Exhibit 99.1

PREMIERWEST BANCORP

ANNOUNCES SECOND QUARTER RESULTS

MEDFORD, OREGON—July 26, 2011: PremierWest Bancorp (NASDAQ:PRWT) announced results for the second quarter ending June 30, 2011, as follows:

·        Net loss of $2.7 million, or $0.27 per share, after no loan loss provision and net OREO and foreclosed asset expenses of $4.4 million. This compares to a net loss of $7.4 million, or $0.74 per share, after $6.3 million in loan loss provision and net OREO and foreclosed asset expenses of $2.1 million for first quarter 2011.

·        Reduction of non-performing assets by $19.5 million, or 14.0 percent, to $120.1 million or 9.1 percent of total assets compared to $139.6 million or 10.2% of total assets at March 31, 2011.

·        Decrease in net charge-offs to $4.9 million, compared to $8.5 million at March 31, 2011.

·        Reduction in adversely classified loans by $42.4 million, or 17.0% to $207.0 million, compared to $249.5 million at March 31, 2011.

·        Drop in loans past due 30 – 89 days to $2.8 million or 0.32% of total loans, down from $7.1 million or 0.77% at March 31, 2011.

·        No provision for loan losses recorded in the current quarter versus $6.3 million for the first quarter 2011, due to improvement in credit metrics. Loan loss reserve was $28.4 million, or 3.22% of gross loans, compared to $33.4 million, or 3.62%, at March 31, 2011.

Management continued to execute strategies that have resulted in strengthening of the Company’s performance, including:

·         Improvement in the Bank’s total risk-based and leverage capital ratios to 12.65% and 8.71%, respectively, at June 30, 2011, up from 12.51% and 8.59% at March 31, 2011.

·         Expansion of net interest margin to 3.99% (after excluding one-time receipt of $0.6 million in default interest), up from 3.83% for the quarter ended March 31, 2011.

·         Growth in non-interest bearing demand deposits by $8.4 million to $260.9 million, or 22.2% of total deposits, up from $252.6 million, or 20.5% of total deposits at the preceding quarter-end.

James M. Ford, PremierWest’s President & Chief Executive Officer, observed, “Despite the continued economic difficulties, I am pleased with the progress made in second quarter 2011. We narrowed our loss for the quarter and continued to achieve meaningful reductions in nonperforming and adversely classified assets. This quarter represents the fourth consecutive period of declines in adversely-classified loans. It was gratifying to see that a good portion of this progress in credit quality was a result of risk rating improvements, repayments or upgrades to performing status for a number of loan relationships. In addition, commercial real estate (CRE) and acquisition, development and construction (ADC) loan balances continue to decline.

“We increased our net interest margin in part by growing our non-interest bearing deposits through new customer acquisition and expansion of existing client relationships while reducing our higher-cost certificates of deposits,” remarked Ford. “With sluggish loan demand in our marketplace, we have continued to manage our balance sheet primarily by building our investment portfolio. We are structuring the portfolio to have the liquidity needed to respond when loan demand improves, while redeploying our investment portfolio into higher-yielding, high quality federal government agency and municipal securities to improve earnings.”

Ford closed by saying, “We are grateful for to the shareholders for their patience as we guide the Company through these trying economic times. While we still have much work to do, I appreciate the hard efforts of our employees over the recent years which have resulted in the improvements displayed in this quarter’s results.”

CREDIT QUALITY

At June 30, 2011, the Company had $207.0 million in adversely classified loans. This compares favorably to $249.5 million and $316.2 million at March 31, 2011 and June 30, 2010, respectively. Adversely classified loans have declined for four consecutive quarters and were down 17.0% from March 31, 2011 and 34.5% from June 30, 2010.

Included in adversely classified loans at June 30, 2011, were nonperforming loans of $92.5 million, or 10.5% of gross loans, compared to $109.8 million, or 11.9% of gross loans, at March 31, 2011, and $129.7 million, or 11.9% of gross loans, at June 30, 2010. Nonperforming loans have declined for four consecutive quarters and were down 15.8% from March 31, 2011 and 28.7% from June 30, 2010. Reductions in nonperforming loans occurred primarily in the construction, land and land development and commercial real estate loan categories. Of those loans currently designated as nonperforming, approximately $24.2 million, or 26.2% are current as to payment of principal and interest.

The Company monitors delinquencies, defined as loans on accruing status 30-89 days past due, as an indicator of future nonperforming assets. Total delinquencies were $2.8 million, or 0.32% of total loans, at June 30, 2011, down from $7.1 million, or 0.77%, at March 31, 2011, and a reduction from $10.7 million, or 0.98%, at June 30, 2010.

For the quarter ended June 30, 2011, total net loan charge-offs were $4.9 million compared to $8.5 million in the quarter ended March 31, 2011 and $5.0 million in the quarter ended June 30, 2010. The net charge-offs in the current period were concentrated in the construction and land development and non-owner occupied commercial real estate loan categories. The ratio of net loan charge-offs to average gross loans (annualized) for the current quarter was down 39.4% from the previous quarter. The current quarter net loan charge-offs to average gross loans ratio was up 22.5% as compared to the same quarter in 2010, even though net loan charge offs in dollars were virtually the same. Average gross loans in the current period were 18.6% lower as compared to the same quarter in 2010.

The Company’s allowance for credit losses was $28.4 million, or 3.22% of gross loans, at June 30, 2011. This compares to an allowance for credit losses of $33.4 million, or 3.62% of total loans, at March 31, 2011 and $43.9 million, or 4.02% of gross loans, at June 30, 2010. At June 30, 2011, the allowance for credit losses was 30.7% of nonperforming loans, as compared to 30.4% at March 31, 2011 and 33.9% at June 30, 2010.

At June 30, 2011, other real estate owned (OREO) consisted of 90 properties totaling $27.6 million, compared to 93 properties totaling $29.8 million at March 31, 2011, and 54 properties totaling $15.1 million a year ago. OREO balances have declined for two consecutive quarters, down 7.3% from March 31, 2011, and 13.8% from the $32.0 million in OREO as of December 31, 2010. During the second quarter of 2011 the Company disposed of $1.6 million in OREO property. Write-downs of OREO during the second quarter 2011 comprised 15.9% of the balance at the beginning of the period. Additions to OREO in second quarter 2011 were primarily attributed to two separate relationships of $2.2 million and $1.2 million, which are commercial real estate and construction land development properties, respectively. The largest balances in the OREO portfolio at June 30, 2011, were attributable to land development projects and commercial real estate properties, all of which are located within regions we operate.

LOANS AND DEPOSITS

The Company’s total gross loans, net of deferred fees, totaled $880.9 million at June 30, 2011, down $40.2 million, or 4.4%, from March 31, 2011 and down $210.0 million, or 19.3% from June 30, 2010. This is a result of the Company’s decision to reduce its level of construction, land and development, commercial real estate and higher risk commercial and industrial loans. The reduction in these loan types comprised 90.7% and 86.0% of the reduction in gross loan balances during these comparative periods. The decline in gross loans during this quarter reflects $12.1 million in originations, $41.6 million in pay offs, $6.6 million in gross loan charge-offs and $4.1 million transferred to OREO.

Total deposits as of June 30, 2011 were $1.18 billion, a decrease of 4.5% or $56.0 million from March 31, 2011 and a decrease of $135.7 million from June 30, 2010. This decline was mainly due to a purposeful reduction by management of higher-cost time and public entity deposits balances and emphasis on the acquisition of non-interest bearing demand deposit relationships. In keeping with this strategy, non-interest bearing demand deposits grew 3.3%, or $8.4 million, during the second quarter of 2011 and 6.8%, or $16.6 million, since June 30, 2010. As such, the Company’s non-interest bearing and time deposits now comprise 22.2% and 41.6% of total deposits, respectively, as of June 30, 2011, as compared to 18.6% and 44.7% of total deposits, respectively, as of June 30, 2010. The Company had less than $1 million in brokered deposits as of June 30, 2011, all of which were reciprocal in nature.

NET INTEREST INCOME

Second quarter 2011 net interest income was $13.1 million, an increase of $0.9 million versus first quarter 2011 and a decrease of $1.7 million as compared to second quarter of 2010. Average earning assets decreased $38.3 million, or 2.9%, from first quarter 2011 and $151.6 million, or 10.7% from June 30, 2010. Higher yielding average gross loans, as a percentage of average interest earning assets, declined from 78.8% as of June 30, 2010 to 71.9% as of June 30, 2011. Correspondingly, lower yielding average fed funds sold and investment securities, as a percentage of average interest earning assets, increased to 28.1% as of June 30, 2011 from 21.1% as of June 30, 2010. In addition to these changes in the earning asset mix, average non-interest bearing deposits grew as a proportion of total deposits.

The second quarter 2011 net interest margin of 4.19% increased 36 basis points from first quarter 2011. This was due in part to higher yields from loans, which grew to 6.18%, an increase of 41 basis points. Approximately 28 basis points of the increase in loan yields was due to the collection during the quarter of $0.6 million in default interest from one borrower. This one-time event increased net interest margin by 20 basis points, from 3.99% to 4.19%, for the period. In addition, the redeployment during the current quarter of a portion of fed funds sold balances into higher yielding U.S. government agency and investment grade municipal obligations resulted in an increase in investment portfolio yields of 27 basis points to 2.00%. The changes in the deposit mix noted above resulted in a 7 basis point, or 6.3%, decrease in the cost of average interest-bearing liabilities.

The second quarter 2011 net interest margin of 4.19% decreased 4 basis points from second quarter 2010, including the collection of $0.6 million in default interest previously noted. This was due in part to the higher proportion of earning assets in loans during the second quarter 2010. The current period loan portfolio yield of 5.90%, after adjustment as explained above, was down from the second quarter 2010 loan yield of 5.99%, after an adjustment of $0.3 million in interest reversed due to loans being placed in nonaccrual status during that period. By comparison, only a nominal amount of interest was reversed in second quarter 2011. In addition, a higher proportion of the Company’s liquidity was retained in lower yielding fed funds sold balances during the second quarter of 2010, resulting in investment portfolio yields that were 27 basis points below those of second quarter 2011. Also, the cost of interest-bearing liabilities in second quarter 2010 was reduced by a $1.1 million accretion of a negative certificate of deposit purchase premium as a result of the purchase of two Wachovia Bank branches in July 2009. The negative deposit purchase premium was fully accreted as of June 30, 2010, which lowered the cost of interest-bearing deposits by 39 basis points during second quarter 2010. This, along with changes in the deposit mix noted above, resulted in no change in the cost of interest-bearing liabilities when comparing the two periods.

NON-INTEREST INCOME and EXPENSE

Total noninterest income of $2.9 million for the quarter ended June 30, 2011, declined $0.3 million, or 9.3%, from $3.2 million in the first quarter of 2011. This was primarily due to a $0.3 million decrease in gain on death benefit from bank-owned life insurance and declines in investment and mortgage brokerage fee income. This decrease was partially offset by an increase of $0.2 million in gain on sale of investment securities. Noninterest income for the current quarter increased $0.4 million, or 17.4%, from $2.5 million in second quarter 2010. This was primarily due to a $0.5 million increase in gain on sale of investment securities and investment and mortgage brokerage fee income. This increase was partially offset by a decrease of $0.1 million in deposit account service charge fee income. This is a result of the continued trend of banking customers incurring fewer non-sufficient funds (NSF) items, thus reducing fee income in this area.

Noninterest expense for the three months ended June 30, 2011, was $18.0 million, an increase of $2.2 million compared to $15.8 million in first quarter 2011. Salaries and employee benefits expense was virtually unchanged between the periods. Costs related to OREO and foreclosed assets increased, primarily reflecting a $2.7 million increase in impairment charges associated with these assets. The increase in noninterest expenses was partially offset by a $0.3 million decrease in FDIC insurance premiums associated with the recent change in assessment methodology. Noninterest expense for the current quarter increased $1.7 million compared to $16.4 million in second quarter 2010. Salaries and employee benefits expense increased $0.2 million between the periods. Costs related to OREO and foreclosed assets increased $2.0 million over second quarter 2010, primarily reflecting a $2.2 million increase in impairment charges associated with these assets. The increase in noninterest expenses was partially offset by a $0.4 million decrease in FDIC insurance premiums associated with the recent change in assessment methodology and a $0.2 million reduction in occupancy and equipment expense.

CAPITAL

PremierWest Bank has met the quantitative thresholds to be considered “Well-Capitalized” under published regulatory standards for total risk-based capital and Tier 1 risk-based capital at June 30, 2011, with ratios of 12.65 percent and 11.38 percent, respectively. However, we continue to be subject to the terms of the Consent Order with the FDIC and have not yet reached the 10.00 percent leverage ratio required by the Consent Order. As such, we are not considered “Well-Capitalized” for all regulatory ratios.

ABOUT PREMIERWEST BANCORP

PremierWest Bancorp (NASDAQ: PRWT) is a bank holding company headquartered in Medford, Oregon, and operates primarily through its subsidiary, PremierWest Bank. PremierWest Bank offers expanded banking-related services through two subsidiaries, Premier Finance Company and PremierWest Investment Services, Inc.

PremierWest Bank was created following the merger of the Bank of Southern Oregon and Douglas National Bank in May 2000. In April 2001, PremierWest Bancorp acquired Timberline Bancshares, Inc. and its wholly-owned subsidiary, Timberline Community Bank, with eight branch offices located in Siskiyou County in northern California. In January 2004, PremierWest acquired Mid Valley Bank with five branch offices located in the northern California counties of Shasta, Tehama and Butte. In January 2008, PremierWest acquired Stockmans Financial Group, and its wholly-owned subsidiary, Stockmans Bank, with five full service banking offices in the Sacramento, California area. During the last several years, PremierWest expanded into Klamath Falls and the Central Oregon communities of Bend and Redmond, and into Nevada, Yolo and Butte counties in California.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This press release includes forward-looking statements within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders. These statements are necessarily subject to risk and uncertainty and actual results could differ materially due to certain risk factors, including those set forth from time to time in PremierWest’s filings with the SEC, and risks that we are unable to increase capital levels as planned or effectively implement asset reduction and credit quality improvement strategies, unable to comply with regulatory agreements and the risk that market conditions deteriorate. You should not place undue reliance on forward-looking statements and we undertake no obligation to update any such statements. We make forward-looking statements in this press release about future profitability of the Company, net interest margin, regulatory compliance, loan demand, interest rate changes, loan upgrades, loan migration, the prospects for earnings growth, deposit and loan growth, capital levels, the effective management of our credit quality, the collectability of identified non-performing loans, real estate market conditions and the adequacy of our Allowance for Loan Losses.

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