For Immediate Release
Wednesday, June 25, 2003

                          SHAREHOLDERS APPROVE UNION OF
                  FNB CORPORATION AND BEDFORD BANCSHARES, INC.


         William P. Heath,  Jr.,  President and CEO of FNB Corporation  (NASDAQ:
FNBP), parent company of First National Bank and FNB Salem Bank and Trust, N.A.,
and  Harold K. Neal,  President  and CEO of Bedford  Bancshares,  Inc.  (NASDAQ:
BFSB),  parent  company of Bedford  Federal  Savings Bank  jointly  announce the
approval  by  their   respective   shareholders  of  the  affiliation  of  their
organizations  at  special  meetings  held  in  Christiansburg  and  Bedford  on
Wednesday,  June 25. Both shareholder groups approved the combination by margins
in excess of 98 percent of shares cast.

         "Our merger  affiliates  two banking  companies that have shared common
operating  philosophies  and  direction  in  distinct  markets,  and  now we are
officially joining forces. Together, we can best deploy our resources to enhance
our  commitment to our customers and local  communities  while ensuring a strong
return to our shareholders," Heath and Neal observed.

         Subsequent to the affiliation,  FNB Corporation will have approximately
3,500 shareholders and nearly 7.2 million outstanding shares. Stretching east to
west,  from Bedford  County to Wythe County,  and north to south,  from the West
Virginia to the North Carolina borders, the organization will operate 26 offices
and 39 ATMs.  With  assets of nearly $1.3  billion and  deposits in excess of $1
billion,  FNB Corporation,  through its affiliates,  will constitute the largest
publicly traded banking organization in terms of Virginia deposits.

         Pending regulatory  approval,  the merger is expected to take effect on
August 1, 2003 with systems  integration  to follow  during the first quarter of
2004.

         For more information contact:

         William P. Heath, Jr       Peter A. Seitz
         President and CEO          Executive Vice President/General Counsel
         FNB Corporation            FNB Corporation
         (540) 382-6041             (540) 381-6700

         Harold K. Neal
         President and CEO
         Bedford Bancshares, Inc.
         (540) 586-2590