Botetourt Bankshares (BORT) 8-K Botetourt Bankshares, Inc Announces Record Earnings

EXHIBIT 99

Section 2: EX-99 (PRESS RELEASE)

FOR RELEASE 8:30 a.m. July 18, 2006

BOTETOURT BANKSHARES, Inc.

19747 Main Street

Buchanan, Virginia 24066

For Further Information Contact:

Michelle A. Alexander, Chief Financial Officer

(540) 591-5013

BOTETOURT BANKSHARES, INC ANNOUNCES RECORD EARNINGS

BUCHANAN, VIRGINIA.July 18, 2006 — Buchanan-based Botetourt Bankshares, Inc. announced today its consolidated financial results for the quarter ending June 30, 2006. Net income for the second quarter amounted to $954,855 which is the highest quarterly income in the history of the company. This amount compares to $811,842 for the same period last year, representing an increase of $143,013 or 17.62%. Both basic and diluted earnings per share increased $0.11 from $0.66 at June 30, 2005 to $0.77 at June 30, 2006.

Net income for the first six months of 2006 amounted to $1,832,995, as compared to $1,562,924 for the same six month period of 2005, an increase of $270,071, or 17.28%. Basic and diluted earnings per share for the first six months of 2006 amounted to $1.48 per share compared to $1.26 per share for the first six months of 2005, an increase of $0.22.

At June 30, 2006 total assets amounted to $257,160,413, total deposits were $233,033,290, net loans stood at $192,177,113 and total shareholders’ equity was $22,989,065.

H. Watts Steger, Chairman and Chief Executive Officer of Botetourt Bankshares, Inc., “We are pleased to report continuing strong earnings in the second quarter ending June 30, 2006, following two consecutive years of record annual earnings. The company’s ongoing performance is gratifying. The continued positive earnings trend for 2006 is reflective of steady loan demand, lower loan loss expense resulting from improved loan quality, and a positive impact on the bank resulting from the Federal Open Market Committee’s monetary policy actions.”

Botetourt Bankshares, Inc. is the holding company for Bank of Botetourt, which was chartered in 1899. Bank of Botetourt operates eight full service offices in Botetourt, Rockbridge, and Roanoke counties.

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 Botetourt Bankshares, Inc.’s recent filings with the Securities and Exchange Commission, included but not limited to its Annual Report on Form 10-KSB and its other periodic reports.

- END OF TEXT. SEE FINANCIAL INFORMATION ON FOLLOWING PAGES.

Botetourt Bankshares, Inc.

Consolidated Balance Sheets

June 30, 2006 and December 31, 2005

	(Unaudited) June 30, 2006			(Audited) December 31, 2005
Assets
Cash and due from banks	$	7,060,747		$	8,985,579
Interest-bearing deposits with banks		257,896			291,648
Federal funds sold		17,224,000			6,752,000
Investment securities available for sale		29,101,055			27,940,163
Investment securities held to maturity		1,539,858			1,809,776
Restricted equity securities		524,600			474,000
Loans, net of allowance for loan losses of $2,348,715 at June 30, 2006 and $2,271,074 at December 31, 2005		192,177,113			183,352,611
Property and equipment, net		5,652,032			5,784,284
Accrued income		1,445,141			1,222,811
Foreclosed assets		80,000			—
Other assets		2,097,971			1,920,863
Total assets	$	257,160,413		$	238,533,735
Liabilities and stockholders equity
Liabilities
Noninterest-bearing deposits	$	36,501,283		$	31,365,352
Interest-bearing deposits		196,532,007			184,477,729
Total deposits		233,033,290			215,843,081
Accrued interest payable		679,198			548,317
Other liabilities		458,860			407,292
Total liabilities		234,171,348			216,798,690
Commitments and contingencies		—			—
Stockholders’ equity
Common stock, $1.00 par value, 2,500,000 shares authorized, 1,240,900 issued and outstanding at June 30, 2006 and 1,240,121 issued and outstanding at December 31, 2005		1,240,900			1,240,121
Additional paid-in capital		1,530,184			1,510,751
Retained earnings		20,346,778			18,960,299
Accumulated other comprehensive income (loss)		(128,797	)		23,874
Total stockholders’ equity		22,989,065			21,735,045
Total liabilities and stockholders’ equity	$	257,160,413		$	238,533,735

Botetourt Bankshares, Inc.

Consolidated Statements of Income

For The Six and Three Months Ended June 30, 2006 and 2005(unaudited)

	Six Months Ended June 30,				Three Months Ended June 30,
	2006		2005		2006		2005
Interest income
Loans and fees on loans	$	7,512,452	$	6,262,159	$	3,850,973	$	3,193,335
Federal funds sold		258,480		18,582		149,602		14,217
Investment securities:
Taxable		388,504		259,801		201,423		129,197
Exempt from federal income tax		186,110		187,900		93,312		92,585
Dividend income		19,317		15,519		10,089		7,989
Deposits with banks		6,253		2,333		4,242		1,233
Total interest income		8,371,116		6,746,294		4,309,641		3,438,556
Interest expense
Deposits		2,824,402		1,828,903		1,495,017		958,096
Federal funds purchased		—		16,807		—		475
Total interest expense		2,824,402		1,845,710		1,495,017		958,571
Net interest income		5,546,714		4,900,584		2,814,624		2,479,985
Provision for loan losses		150,000		250,000		75,000		125,000
Net interest income after provision		5,396,714		4,650,584		2,739,624		2,354,985
Non-interest income
Service charges on deposit accounts		279,398		278,699		147,959		140,487
Net realized gains (losses) on sales of securities		—		7,198		—		—
Other income		485,628		492,949		243,734		225,147
Total non-interest income		765,026		778,846		391,693		365,634
Non-interest expense
Salaries and employee benefits		2,141,366		1,845,241		1,052,919		913,612
Occupancy and equipment expense		435,006		402,413		226,621		197,930
Other expense		930,191		932,359		455,772		426,840
Total non-interest expense		3,506,563		3,180,013		1,735,312		1,538,382
Income before income taxes		2,655,177		2,249,417		1,396,005		1,182,237
Income tax expense		822,182		686,493		441,150		370,395
Net income	$	1,832,995	$	1,562,924	$	954,855	$	811,842
Basic earnings per share	$	1.48	$	1.26	$	0.77	$	0.66
Diluted earnings per share	$	1.48	$	1.26	$	0.77	$	0.66
Basic weighted average shares outstanding		1,240,395		1,235,518		1,240,592		1,235,668
Diluted average shares outstanding		1,242,816		1,236,351		1,243,266		1,236,501