Community Bank of Northern Virginia Announces Second Quarter Earnings up 28%.

Business Editors

STERLING, Va.--(BUSINESS WIRE)--July 17, 2003

Community Bank of Northern Virginia (Nasdaq:CBNV) today announced second quarter 2003 net income of $1,871,213, or $0.18 per diluted common share, compared to $1,457,272, or $0.14 per diluted common share for the

same period last year. Return on average equity for the second quarter 2003 was 13.87% compared to 12.83% for the same period last year. Return on average assets for the second quarter 2003 was 1.08% compared to 0.98% for the same quarter last year. During the second quarter 2003, the Bank reduced its reserves associated with potential recourse obligations and established reserves for expenses associated with litigation, the net effect of which reduced pre-tax earnings by $375,000, or $0.02 per diluted common share.

Comparing the second quarter of 2003 and 2002, net interest income increased 9.3% as the net interest margin declined from 4.32% in 2002 to 4.03% in 2003. The provision for possible loan losses declined by $1.246 million, reflecting the effect of the aforementioned reduction in reserves for potential recourse obligations recorded in the second quarter 2003. Both other income and operating expenses declined dramatically in the second quarter 2003 compared to the same period in 2002 as a consequence of the Bank's exit from the mortgage origination business. Other income in the second quarter 2003 includes securities gains of $240,000 compared to securities gains of $67,000 in the second quarter 2002. Operating expenses in the second quarter 2003 include the effects of the reserves established for ongoing litigation previously mentioned. Operating expenses in the same period in 2002 included exit costs of $799,000 associated with the closure of the wholesale mortgage operation as well as the Bank's Rockville retail mortgage operation.

David P. Summers, President and Chief Executive Officer, stated, "We are pleased to report another quarter of solid earnings despite the continued prevailing weak economic conditions and compressing net interest margin due to the historically low interest rate environment we are currently experiencing."

Year-to-date net income for 2003 totaled $4,489,723, or $0.43 per diluted common share compared to 2002 year-to-date net income of $2,527,847, or $0.26 per diluted common share, an increase of 78%. Year-to-date 2003 return on average assets and return on average equity was 1.33% and 16.98%, respectively, compared to 0.84% and 12.06%, respectively, for the same period last year.

Asset quality continues to improve as the Bank's non-performing asset ratio stood at 0.29% at June 30 2003, compared to 1.01% at June 30, 2002 and 0.69% at December 31, 2002. The allowance for possible loan losses to loans held for investment stood at 1.19% at June 30, 2003 compared to 1.17% at June 30, 2002. The Bank continues to maintain a separate valuation allowance related to off-balance sheet recourse exposure that stood at $1.2 million at June 30, 2003.

Total assets as of June 30, 2003, were $715.5 million, an increase of 16% from June 30, 2002. Total loans held for investment increased 22% to $462.1 million from June 30, 2002 to June 30, 2003 while total deposits increased 7% over the same period. Stockholders' equity totaled approximately $54.9 million at June 30, 2003.

During the second quarter 2003 the Bank opened its Chantilly, Virginia office and expects to open its Reston, Virginia office in the third quarter 2003. Based upon the planned branch expansion and the recent bank merger activity in the region, Community Bank may be afforded an opportunity for increased market share.

On July 8, 2003, the shareholders held their annual meeting and elected Class 1 directors to serve on the Board of Community Bank for a term of three years. Class 1 directors are David A. Dickens, Norman C. Hardee and Otis R. Pool. In addition, the shareholders ratified the Board's appointment of Grant Thornton LLP to continue as the independent auditors of the Bank.

The Bank was added to the Russell 3000(R) index as of June 30, 2003. The Russell 3000(R) contains the largest 3,000 companies incorporated in the United States and its territories based on market capitalization.

Community Bank of Northern Virginia (http://www.cbnv.com/) began banking activities in 1992 upon receiving its charter from the Virginia State Corporation Commission through the acquisition of assets and liabilities of an existing bank. Community Bank is a full-service banking institution that operates twelve branch offices and fifteen automated teller machines. The primary services offered by its 116 full-time equivalent employees include retail banking, home banking and commercial banking.

This press release contains certain forward-looking statements with respect to the plans, objectives, future performance and business of Community Bank of Northern Virginia. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) competitive pressure in the banking industry increase significantly; (2) changes in the interest rate environment reduce margins; (3) general economic conditions either nationally or regionally are less favorable than expected, resulting in, among other things, a deterioration in credit quality; (4) changes occur in the regulatory environment; (5) changes occur in business conditions; (6) changes occur in the securities markets; and (7) the Bank's loan loss reserve to address credit quality concerns may be inadequate, and additional reserves are necessary; (8) strategies to enhance earnings and/or shareholder value are not implemented or fail to have the effects anticipated; (9) recent bank merger activity may not result in the Bank's realizing its goals of increased market share and additional branch expansion, and (10) litigation relating to the Bank's second mortgage lending does not have the effects anticipated and liabilities resulting from the litigation are greater than expected.

                 COMMUNITY BANK OF NORTHERN VIRGINIA
                         FINANCIAL HIGHLIGHTS
                             (Unaudited)

                      Quarter Ended               Year to Date
               --------------------------- ---------------------------
                  6/30/03       6/30/02       6/30/03       6/30/02
               ------------- ------------- ------------- -------------
Book value per
 share                $5.45         $4.69         $5.45         $4.69

Weighted
 average shares
 outstanding     10,081,352     9,941,342    10,051,944     9,589,897
Potential
 dilutive
 common shares   10,389,379    10,224,808    10,346,728     9,875,876
Balance Sheet
 (averages)
---------------
  Investments  $215,479,982  $129,549,613  $212,230,346  $114,944,013

  Gross Loans  $457,593,377  $441,853,826  $443,596,762  $462,233,363

  Deposits     $527,668,089  $507,078,936  $522,402,044  $517,414,674

  Total Assets $696,733,983  $594,834,627  $679,298,700  $604,046,442
Operations
---------------
  Interest
   income        $9,981,791   $10,334,265   $19,898,504   $21,039,698
  Interest
   expense        3,310,356     4,231,362     6,666,054     9,222,475
               ------------- ------------- ------------- -------------
  Net interest
   income         6,671,435     6,102,903    13,232,450    11,817,223
  Provision
   for
   possible
   loan losses     (574,130)      671,531      (717,130)    2,111,031
               ------------- ------------- ------------- -------------
  Net interest
   income
   after
   provision
   for
   possible
   loan losses    7,245,565     5,431,372    13,949,580     9,706,192
  Other income      502,961     9,739,969     1,696,957    21,747,734
  Operating
   expenses       5,019,064    13,086,822     9,046,745    27,755,702
               ------------- ------------- ------------- -------------
   Income
    before
    taxes         2,729,462     2,084,519     6,599,792     3,698,224
   Applicable
    income
    taxes           858,249       627,247     2,110,069     1,170,377
               ------------- ------------- ------------- -------------
   Net income    $1,871,213    $1,457,272    $4,489,723    $2,527,847
               ============= ============= ============= =============

Basic earnings
 per share of
 common stock         $0.19         $0.15         $0.45         $0.26
Diluted
 earnings per
 share of
 common stock         $0.18         $0.14         $0.43         $0.26

Dividends per
 share                $0.07         $0.03         $0.14         $0.08
Ratios
---------------
  Return on
   average
   assets             1.08%         0.98%         1.33%         0.84%
  Return on
   average
   equity            13.87%        12.83%        16.98%        12.06%
  Gross loans
   to deposits       83.25%        82.52%        83.25%        82.52%
  Net interest
   margin (tax
   equivalent)        4.03%         4.32%         4.12%         4.16%
  Overhead
   ratio (1)          1.74%         2.26%         1.74%         2.01%
  Operating
   efficiency
   (2)               49.98%        82.46%        51.94%        82.44%
  Non-
   performing
   assets to
   total
   assets             0.29%         1.01%         0.29%         1.01%
  Net charge-
   offs to
   average
   loans held
   for
   investment
   (annualized)        0.38%         0.11%         0.27%         0.13%
  Allowance
   for
   possible
   loan losses
   To loans
   held for
   investment         1.19%         1.17%         1.19%         1.17%
Regulatory
 Capital Ratios
---------------
   Tier 1 risk-
    based
    capital
    ratio             10.47%         9.96%        10.47%         9.96%
   Total risk-
    based
    capital
    ratio             11.57%        10.95%        11.57%        10.95%
   Leverage
    ratio              7.61%         7.66%         7.61%         7.55%


                        STOCK TRADING PRICE
                ------------------------------------
                                     Bid     Ask
                                  ---------
                 06/30/03           $11.64   $11.79
                 03/31/03           $18.89   $19.03
                 12/31/02           $11.25   $11.28
                 06/30/02           $10.15   $10.74

    (1) Excludes non-recurring charge of $1.5 million in second
        quarter 2003.

    (2) Excludes securities gains, OREO gains (losses) and
        nonrecurring charge of $1.5 million in second quarter 2003.