American Community Bancshares 8-K Results of Operations and Financial Condition

Exhibit 99.1

PRESS RELEASE

FOR IMMEDIATE RELEASE

For Further Information Contact

American Community Bancshares, Inc.

Mr. Randy P. Helton, President and CEO

Phone: 704-225-8444

AMERICAN COMMUNITY BANCSHARES, INC. ANNOUNCES

RESULTS FOR THE QUARTER ENDED JUNE 30, 2006

July 26, 2006. Charlotte, North Carolina: American Community Bancshares, Inc. (NASDAQ Stock Market: ACBA), the holding company for American Community Bank, announced unaudited earnings for the three months ended June 30, 2006 of $932,000, a 12.6% decrease from unaudited earnings for the same period in 2005. Earnings for the second quarter 2006 were negatively impacted by non-cash compensation expense related to stock options granted during the quarter. The Company also recorded a $486,000 increase in its provision for loan losses during the quarter. Absent the compensation charge of $218,000, net of tax, earnings would have been 7.9% higher than the 2005 quarter. In addition, the Company continued to show strong growth in net interest margin which increased from 4.21% to 4.59% and net interest income which increased from $3.9 million to $4.8 million, a 22% increase over the same period in 2005.

Unaudited earnings for the six months ended June 30, 2006 were $2,239,000 or a 5.9% increase over unaudited earnings for the six months ended June 30, 2005 of $2,114,000. Earnings per share (diluted) for the six months ended June 30, 2006 decreased to $0.31 compared to $0.34 for the six months ended June 30, 2005 primarily as a result of a 975,000 increase in average shares outstanding during the period due to the exercise of warrants outstanding during the second quarter of 2005. The annualized return on average assets for the six months was 1.00% with a return on average equity of 8.71%.

Randy P. Helton, President and Chief Executive Officer commented: “While the 2006 six month earnings compared to 2005 six month earnings increased, our 2006 second quarter compared to 2005 second quarter earnings decreased, primarily as a result of the compensation charge due to the change in accounting principles for stock options. We also experienced an increase in our

non-accruing loans of approximately $1.2 million, all of which are primarily secured by local real estate. Management does not anticipate any loss in regard to these loans. After careful study we have determined that the leasing business has become extremely competitive and is dominated by a few large players. We feel as if leasing is not the best use of our capital and have contracted with a third party leasing company to liquidate the remaining leases in our portfolio. We have undertaken a thorough review of our leasing portfolio during the quarter and have classified an additional $1.3 million of leases to non-accrual status. We believe we are appropriately reserved at this time, but will aggressively continue to manage the remaining portfolio. Our leasing portfolio remains at approximately $12 million or three percent (3%) of our total loan portfolio, with a final maturity of approximately four years. Our annualized return on average assets for the quarter was 0.82% and our annualized return on average equity was 7.17%. We fully anticipate returning to an increase in both ratios in the immediate future.”

American Community Bancshares, Inc., headquartered in Charlotte, North Carolina is the holding company for American Community Bank. American Community Bank is a full service community bank headquartered in Monroe, North Carolina with nine North Carolina offices located in two of the fastest growing counties in North Carolina, Mecklenburg and Union. It also has four offices located in York and Cherokee Counties in South Carolina. American Community Bank provides a wide assortment of traditional banking and financial services offered with a high level of personal attention. The website for American Community Bancshares, Inc. iswww.americancommunitybank.com. Its stock is traded on the NASDAQ National Market under the symbol “ACBA”. For more information contact: Stephanie Helms, Shareholder Relations or Dan Ellis, Chief Financial Officer at (704) 225- 8444.

Information in this press release contains “forward-looking statements.” These statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation, the effects of future economic conditions, governmental fiscal and monetary policies, legislative and regulatory changes, the risks of changes in interest rates and the effects of competition. Additional factors that could cause actual results to differ materially are discussed in American Community Bancshares’s recent filings with the Securities and Exchange Commission, including but not limited to its Annual Report on Form 10-K and its other periodic reports.

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American Community Bancshares, Inc.

(Amounts in thousands except share and per share data)

(Unaudited)

Consolidated Balance Sheet

	June 30, 2006			March 31, 2006			December 31, 2005 (a)			September 30, 2005			June 30, 2005
Assets
Cash and due from banks	$	16,057		$	13,646		$	12,495		$	16,226		$	13,518
Interest-earning deposits with banks		326			10,087			4,454			10,920			2,970
Investment securities		65,309			62,842			64,307			60,635			53,253
Loans		357,134			350,516			332,708			332,447			326,266
Allowance for loan losses		(5,041	)		(4,528	)		(4,331	)		(3,968	)		(3,738	)
Net loans		352,093			345,988			328,377			328,479			322,528
Accrued interest receivable		2,576			2,527			2,432			2,187			1,915
Bank premises and equipment		9,328			9,467			9,660			9,812			10,032
Foreclosed real estate		258			91			386			112			176
Non-marketable equity securities at cost		2,062			2,062			1,996			1,996			1,996
Goodwill		9,838			9,838			9,838			9,838			9,838
Other assets		2,925			3,294			2,726			3,023			3,116
Total assets	$	460,772		$	459,842		$	436,671		$	443,228		$	419,342
Liabilities and stockholders’ equity
Deposits
Non-interest bearing	$	56,125		$	57,276		$	58,054		$	52,735		$	51,702
Interest bearing		305,268			309,302			287,347			301,982			278,188
Total deposits		361,393			366,578			345,401			354,717			329,890
Borrowings		46,116			39,885			38,464			36,531			39,049
Accrued expenses and other liabilities		659			1,761			1,920			1,840			1,218
Total liabilities		408,168			408,224			385,785			393,088			370,157
Total stockholders’ equity		52,604			51,618			50,886			50,140			49,185
Total liabilities and stockholders’ equity	$	460,772		$	459,842		$	436,671		$	443,228		$	419,342
Ending shares outstanding		6,921,554			6,853,240			6,853,010			6,812,600			6,800,450
Book value per share		7.60			7.53			7.43			7.36			7.23
Average Balances:
Loans	$	351,815		$	338,525		$	329,267		$	327,946		$	311,642
Earning assets		419,346			414,294			408,788			394,068			370,682
Total assets		457,689			446,991			437,485			427,443			403,842
Interest-bearing deposits		296,171			296,171			296,918			290,565			274,903
Stockholders’ equity		52,163			51,457			50,536			49,696			45,537

(a) Derived from audited consolidated financial statements

American Community Bancshares, Inc.

Consolidated Income Statements

(Amounts in thousands except share and per share data)

(Unaudited)

Three months ended	June 30, 2006			March 31, 2006			December 31, 2005 (a)			September 30, 2005			June 30, 2005
Total interest income	$	7,932		$	7,328		$	7,112		$	6,797		$	6,003
Total interest expense		3,180			2,797			2,615			2,468			2,116
Net interest income		4,752			4,531			4,497			4,329			3,887
Provision for loan losses		668			272			294			224			182
Net interest income after provision for loan loss		4,084			4,259			4,203			4,105			3,705
Non-interest income
Service charges on deposit accounts		601			562			609			598			585
Mortgage banking operations		106			81			77			87			133
Realized gains on sale of securities		—			25			—			—			—
Other		162			159			152			144			162
Total non-interest income		869			827			838			829			880
Non-interest expense
Salaries and employee benefits		1,855			1,529			1,466			1,523			1,400
Occupancy and equipment		560			571			569			569			527
Other		1,034			923			1,100			971			969
Total non-interest expense		3,449			3,023			3,135			3,063			2,896
Income before income taxes		1,504			2,063			1,906			1,871			1,689
Provision for income taxes		572			756			697			686			623
Net income	$	932		$	1,307		$	1,209		$	1,185		$	1,066
Net income per share
Basic	$	0.14		$	0.19		$	0.18		$	0.17		$	0.17
Diluted	$	0.13		$	0.18		$	0.17		$	0.17		$	0.16
Weighted average number of shares outstanding
Basic		6,876,336			6,853,240			6,833,259			6,804,662			6,401,366
Diluted		7,176,336			7,156,948			7,134,699			7,130,129			6,693,972
Return on average equity		7.17	%		10.30	%		9.49	%		9.46	%		9.39	%
Return on average assets		0.82	%		1.19	%		1.10	%		1.10	%		1.06	%
Net interest margin		4.59	%		4.44	%		4.36	%		4.36	%		4.21	%
Efficiency ratio		61.36	%		56.42	%		58.76	%		59.38	%		60.75	%
Allowance for loan losses to total loans		1.41	%		1.29	%		1.30	%		1.19	%		1.15	%
Net charge-offs to avg loans (annualized)		0.13	%		0.02	%		-0.24	%		0.01	%		0.01	%
Nonperforming loans to total loans		0.90	%		0.31	%		0.29	%		0.31	%		0.23	%
Nonperforming assets to total assets		0.78	%		0.27	%		0.33	%		0.28	%		0.24	%