Exhibit 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE

Contact:

Jeffrey W. Farrar

Executive Vice President and CFO

(434) 964-2217

farrarj@vfgi.net

VIRGINIA FINANCIAL GROUP, INC.

ANNOUNCES SECOND QUARTER 2007 EARNINGS

Charlottesville, VA, July 31, 2007 - Virginia Financial Group, Inc. (NASDAQ: VFGI) (VFG) today reported second quarter 2007 earnings of $4.5 million, down 13.3% from $5.2 million for the second quarter of 2006, and up sequentially 13.0% from $4.0 million in the first quarter of 2007. Net income per diluted share was $.42, down 12.5% from $.48 for the same period in 2006 and up 13.5% from $.37 in the first quarter of 2007. VFG’s earnings for the second quarter of 2007 produced an annualized return on average assets (ROA) of 1.15% and an annualized return on average equity (ROE) of 11.82%, compared to prior year ratios of 1.35% and 14.74%, respectively. For the first six months of 2007, net income was $8.6 million, down 11.8% from $9.7 million for the same period in 2006. Net income per diluted share was $.79, down 11.2% from $.89 for the first six months of 2006. ROA and ROE for the six month period was 1.08% and 11.31%, respectively, compared to 1.27% and 13.93% for the same period in 2006.

O.R. Barham, Jr., President and CEO, commented, “We are pleased with the sequential earnings growth, and achieved some improvements on a number of fronts. The housing and real estate market conditions continue to have some impact on our balance sheet from a growth standpoint, although asset quality continues to hold up well. We had some expansion of our net interest margin during the quarter, but will need to reestablish our balance sheet growth in order to maintain it. We continue to see good growth in noninterest income which is encouraging. We are beginning to see the benefit of several corporate initiatives to improve efficiency, which should accelerate during the remainder of the year.”

Financial Performance

Net Interest Income

Net interest income amounted to $14.9 million for the second quarter of 2007, down $326 thousand or 2.1% compared with $15.2 million for the same quarter in 2006. Net interest margin compression of thirteen basis points when compared to the same quarter in the prior year, coupled with a lower rate of growth in average earning assets, led to this decrease. The net interest margin for the second quarter of 2007 was 4.22%, up seventeen basis points compared to 4.05% for the first quarter of 2007, and down

thirteen basis points when compared to 4.35% for the second quarter of 2006. Normalizing the net interest margin for an interest adjustment on a participation loan recorded during the period would have resulted in a net interest margin of 4.13% for the current quarter. Asset yields rose sequentially, with an average yield on assets of 6.99% for the second quarter of 2007, compared to 6.92% for the first quarter of 2007 and 6.62% for the second quarter of 2006. On a linked quarter basis, the average cost of interest bearing deposits decreased to 3.43% for the second quarter of 2007, as compared to 3.51% for the first quarter of 2007, and increased fifty-nine basis points when compared to 2.84% for the second quarter of 2006. Average balances in VFG commercial paper increased to $69.6 million for the second quarter of 2007 at a cost of 4.50%, compared to $48.5 million at a cost of 4.40% for the second quarter of 2006 and increased on a linked quarter basis as compared to $63.8 million at a cost of 4.73% for the first quarter of 2007. Average balances in FHLB advances increased to $73.6 million for the second quarter of 2007 at a cost of 5.20%, compared to $55.5 million at a cost of 4.50% for the second quarter of 2006, and increased on a linked quarter basis compared to $62.2 million at a cost of 5.00%. For the six months ended June 30, 2007, net interest income was $29.3 million, a decrease of $836 thousand or 2.8% from $30.1 million for the same period in 2006. The net interest margin for the six month period ended June 30, 2007 was 4.14%, compared to 4.35% for the same period in 2006. Continuing pressures of a flat yield curve affecting the entire industry and our increased costs related to short-term wholesale funding are key reasons for the decline in our margin.

Non-Interest Income

Total non-interest income was $4.3 million for the second quarter of 2007, up 11.8% compared with $3.9 million for the second quarter of 2006 and up sequentially 13.3% compared with $3.8 million for the first quarter of 2007. Retail banking fee income increased $153 thousand or 8.7% to $1.9 million, compared to $1.8 million in the second quarter of 2006. Mortgage banking revenue amounted to $645 thousand, a decrease of $208 thousand or 24.4%, as compared to $853 thousand for the second quarter of 2006, and up sequentially $46 thousand or 7.7% from the first quarter of 2007. Revenues from trust and brokerage for the second quarter were $1.2 million, up $199 thousand or 20.9% compared to $1.0 million in the second quarter of 2006, and up sequentially $67 thousand or 6.2% from the first quarter of 2007. Fiduciary and brokerage assets under management were $633 million at June 30, 2007, up slightly from $628 million at March 31, 2007. Included in other non-interest income during second quarter 2007 was income associated with an investment in bank owned life insurance of $121 thousand for second quarter 2007 and $240 thousand for the six month period, compared to none in 2006 for both periods.

Non-interest Expense

Non-interest expense for the second quarter of 2007 amounted to $12.9 million, up $1.4 million or 12.2% from $11.5 million for the same period in 2006, and up sequentially $567 thousand or 4.6% from the first quarter of 2007. Marketing and professional fee increases as compared to the first quarter of 2007 are attributable to a company wide direct mail marketing initiative. Total nonrecurring costs associated with the previously announced asset reallocation initiative and charter consolidation amounted to $152 thousand during the second quarter. For the six month period ended June 30, 2007, non-interest expense amounted to $25.1 million, an increase of $2.5 million or 11.1% over $22.6 million for the same period in 2006. This increase reflects incremental operating costs primarily in compensation, occupancy and supplies of $1.2 million associated with four branches and two loan production offices during 2006 and 2007, respectively. VFG’s efficiency ratio was 64.9% for the quarter, compared to 58.5% for the same quarter in 2006. For the six month period ended June 30, 2007, the efficiency ratio was 65.2%, compared to 59.0% for the same period in 2006. Excluding the impact of nonrecurring revenue and expense items noted above, the efficiency ratio was 65.2% and 64.8% for the quarter and six month period, respectively.

Loan Portfolio

Average loans for the second quarter were $1.19 billion, down $23.1 million or 1.8% from the second quarter of 2006, and down sequentially from $1.22 billion for the first quarter of 2007. Likewise, period end loans were down $23.2 million or 1.9% for the quarter, and down $5.0 million or 0.4% over the last twelve months. The portfolio continues to be impacted by payoff activity and a slow down in the commercial and residential real estate markets. In addition, underwriting standards for acquisition and development lending have been modified in response to increased risk given current market conditions. Loan growth is expected to improve in the third quarter, supported by positive initial results from our new loan production office in Richmond, Virginia.

Deposits and Borrowings

Average deposits for the second quarter were $1.24 billion, down $19.5 million or 1.5% from the second quarter of 2006, and down sequentially $44.6 million from the first quarter of 2007. Period end deposits were also down $41.4 million or 3.2% sequentially. Decreases were noted in each category. Demand deposit accounts, while decreasing due to some commercial balance fluctuation, experienced improved growth in account openings as a result of the direct mail initiative. Average certificates of deposits were down $26.3 million or 4.2% sequentially, with the average cost of such funding improving from 4.40% to 4.35% for the period. Average borrowings for the second quarter amounted to $172.9 million, an increase of $29.0 million or 20.2% compared to the same period in 2006, and up sequentially $18.1 million or 11.7% from the first quarter of 2007.

Capital

At June 30, 2007 VFG had total assets of $1.58 billion, compared to $1.59 billion at June 30, 2006. Shareholder’s equity at June 30, 2007 was $155.0 million, an increase of $12.8 million or 9.0% compared to June 30, 2006. Shareholder’s equity represented 9.79% of total assets at June 30, 2007, while tangible equity capital represented 8.79% of tangible assets at June 30, 2007. Book value at June 30, 2007 was $14.36 per share, compared to $13.21 at June 30, 2006.

Asset Quality

VFG’s ratio of non-performing assets as a percentage of total assets amounted to 0.20% as of June 30, 2007, compared to 0.16% at June 30, 2006 and 0.17% at March 31, 2007. Net charge-offs as a percentage of average loans receivable amounted to 0.00% for the quarter ended June 30, 2007, compared to net recoveries of (0.01%) for the same period in 2006. At June 30, 2007, the allowance for loan losses was approximately five times the level of non-performing assets, while the allowance as a percentage of total loans amounted to 1.21%. VFG did not record a provision for loan losses for the second quarter, compared to $100 thousand for the three months ended June 30, 2006. The reduction in provision is a result of loan contraction experienced during the quarter and continuing strength in asset quality. For the six month period, the provision for loan losses amounted to $165 thousand, compared to net charge-offs of $170 thousand for the period.

Merger with FNB Corporation

VFG previously announced on July 26, 2007 that it had entered into a definitive agreement with FNB Corporation to combine in a merger of equals transaction, creating the largest independent bank holding company headquartered in the Commonwealth of Virginia.

Under the terms of the merger agreement, FNB shareholders will receive 1.5850 shares of VFG common stock for each of their shares of FNB common stock, with each share of VFG common stock becoming one share of common stock of the resulting holding company. FNB and VFG will consolidate their banking subsidiaries into one state-chartered bank. Both the resulting holding company and its banking subsidiary will be renamed and will initially consist of 67 full-service banking offices, total assets of over $3 billion and total deposits of approximately $2.6 billion. In addition, the resulting company’s combined trust and wealth management unit will have approximately $1 billion in assets under management. The resulting holding company will be headquartered in Charlottesville, Virginia, with its banking subsidiary and operations center headquartered in Christiansburg, Virginia. The resulting holding company will be governed by a Board of Directors of up to 24 directors, with equal representation from FNB and VFG. The banking subsidiary’s Board of Directors will also have equal representation from FNB and VFG. Current FNB President and Chief Executive Officer William P. Heath, Jr. will serve as Chairman of the Board for the resulting holding company. Current VFG President and Chief Executive Officer O. R. Barham, Jr. will serve as President and Chief Executive Officer for the resulting holding company. Gregory W. Feldmann, current FNB Chief Operating Officer and President and Chief Executive Officer of FNB’s subsidiary, First National Bank, will serve as President and Chief Executive Officer of the resulting banking subsidiary. Raymond D. Smoot, Jr., current Chairman of the Board of FNB’s First National Bank, will serve as Chairman of the Board of the resulting banking subsidiary. Current VFG Executive Vice President and Chief Operating Officer Litz Van Dyke will serve as Executive Vice President and Chief Operating Officer for the resulting holding company, and current VFG Executive Vice President and Chief Financial Officer Jeffrey W. Farrar will serve as Executive Vice President and Chief Financial Officer for the resulting holding company.

The merger is subject to customary closing conditions, including approval by VFG’s and FNB’s shareholders and by both companies’ regulatory agencies. It is expected to be completed during the last quarter of 2007.

“VFG and FNB share similar cultures and visions for the future. We look forward to integrating the companies and creating a strong platform for expanding the combined company’s branch network and ultimately seeking acquisition opportunities and merger partners. We believe our customers will appreciate the expanded geographic footprint, and the communities we serve will benefit from our enhanced ability to compete in the marketplace. Our employees will be partnered with a larger, more vibrant company with more opportunities for advancement, and we believe our shareholders will benefit from significant increased earnings opportunities. The merger will provide a combination of both fast growing and stable markets across a contiguous franchise,” said Ed Barham, President and Chief Executive Officer of VFG.

In connection with the proposed merger, VFG will file with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 to register the shares of VFG common stock to be issued to the shareholders of FNB. The registration statement will include a joint proxy statement/prospectus which will be sent to the shareholders of VFG and FNB seeking their approval of the merger. In addition, each of VFG and FNB may file other relevant documents concerning the proposed merger with the SEC.

WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT ON FORM S-4 AND THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT VFG, FNB AND THE PROPOSED TRANSACTION. Investors and security holders may obtain free copies of these documents through the website maintained by the SEC at http://www.sec.gov. Free copies of the joint proxy statement/prospectus also may be obtained by directing a request by telephone or mail to Virginia Financial Group, Inc., 1807 Seminole Trail, Suite 104 Charlottesville, Virginia 22901, Attention: Investor Relations (telephone: (434) 964-2217) or by accessing

VFG’s website at http://www.vfgi.net under “SEC Filings and Other Documents”. The information on VFG’s website is not, and shall not be deemed to be, a part of this release or incorporated into other filings either company makes with the SEC.

About VFG

VFG is the holding company for Planters Bank & Trust Company of Virginia – in Staunton; Second Bank & Trust – in Fredericksburg and Virginia Commonwealth Trust Company – in Culpeper. The Company is a traditional community banking provider, offering a full range of business and consumer banking services including trust and asset management service via its trust company affiliate. The organization maintains a network of forty branches and two loan production offices serving Northern, Central and Southwest Virginia. It also maintains five trust and investment service offices in its markets.

Non-GAAP Financial Measures

This report refers to the efficiency ratio, which is computed by dividing non-interest expense by the sum of net interest income on a tax equivalent basis and non-interest income excluding gains or losses on securities, fixed assets and foreclosed assets. This is a non-GAAP financial measure that we believe provides investors with important information regarding our operational efficiency. Comparison of our efficiency ratio with those of other companies may not be possible, because other companies may calculate the efficiency ratio differently. Such information is not in accordance with generally accepted accounting principles (GAAP) and should not be construed as such. Management believes such financial information is meaningful to the reader in understanding operating performance, but cautions that such information not be viewed as a substitute for GAAP. VFG, in referring to its net income, is referring to income under generally accepted accounting principles, or “GAAP.”

Caution Regarding Forward-Looking Statements

In addition to historical information, this press release contains forward-looking statements. The forward-looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from historical results, or those anticipated. When we use words such as “believes”, “expects”, “anticipates” or similar expressions, we are making forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date thereof. VFG wishes to caution the reader that factors, such as those listed below, in some cases have affected and could affect VFG’s actual results, causing actual results to differ materially from those in any forward looking statement. These factors include: (i) expected cost savings from VFG’s acquisitions and dispositions, (ii) competitive pressure in the banking industry or in VFG’s markets may increase significantly, (iii) changes in the interest rate environment may reduce margins, (iv) general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, credit quality deterioration, (v) changes may occur in banking legislation and regulation (vi) changes may occur in general business conditions and (vii) changes may occur in the securities markets. Please refer to VFG’s filings with the Securities and Exchange Commission for additional information, which may be accessed at www.vfgi.net.

QUARTERLY PERFORMANCE SUMMARY

Virginia Financial Group, Inc. (NASDAQ: VFGI)

(Dollars in thousands, except per share data)

	For the Three Months Ended						Percent Increase (Decrease)
	6/30/2007			6/30/2006
INCOME STATEMENT
Interest income - taxable equivalent	$	25,604		$	23,970		6.82	%
Interest expense		10,151			8,222		23.46	%
Net interest income - taxable equivalent		15,453			15,748		-1.87	%
Less: taxable equivalent adjustment		538			506		6.32	%
Net interest income		14,915			15,242		-2.15	%
Provision for loan and lease losses		—			100		-100.00	%
Net interest income after provision for loan and lease losses		14,915			15,142		-1.50	%
Noninterest income		4,336			3,879		11.78	%
Noninterest expense		12,854			11,455		12.21	%
Provision for income taxes		1,856			2,326		-20.21	%
Net income	$	4,541		$	5,240		-13.34	%
PER SHARE DATA
Basic earnings	$	0.42		$	0.49		-14.29	%
Diluted earnings	$	0.42		$	0.48		-12.50	%
Shares outstanding		10,792,797			10,771,778
Weighted average shares -
Basic		10,792,467			10,770,557
Diluted		10,817,882			10,849,504
Dividends paid on common shares	$	0.16		$	0.15
PERFORMANCE RATIOS
Return on average assets		1.15	%		1.35	%	-14.81	%
Return on average equity		11.82	%		14.74	%	-19.81	%
Return on average realized equity (A)		11.76	%		14.48	%	-18.78	%
Net interest margin (taxable equivalent)		4.22	%		4.35	%	-2.99	%
Efficiency (taxable equivalent) (B)		64.85	%		58.53	%	10.80	%
ASSET QUALITY
Allowance for loan losses
Beginning of period	$	14,501		$	13,941
Provision for loan losses		—			100
Charge offs		(34	)		(53	)
Recoveries		28			55
Net (charge-offs) recoveries		(6	)		2
End of period	$	14,495		$	14,043
Non-performing assets:
Non-accrual loans	$	3,139		$	2,339
Loans 90+ days past due and still accruing		—			—
Foreclosed assets		—			38
Troubled debt restructurings		—			113
Total non-performing assets	$	3,139		$	2,490
to total assets:		0.20	%		0.16	%
to total loans plus foreclosed assets:		0.26	%		0.21	%
Allowance for loan losses to total loans		1.21	%		1.17	%
Net charge-offs (recoveries)	$	6		$	(2	)
Net charge-offs (recoveries) to average loans outstanding		0.00	%		(0.01	)%

NOTES:

(A) Excludes the effect on average stockholders’ equity of unrealized gains (losses) that result from changes in market values of securities and other comprehensive pension expense.

(B) Excludes gains or losses on securities, fixed assets and foreclosed assets.

(C) Individual amounts shown above are calculated from actual, not rounded amounts in the thousands, which appear above.

QUARTERLY PERFORMANCE SUMMARY

Virginia Financial Group, Inc. (NASDAQ: VFGI)

(Dollars in thousands, except per share data)

							Percent
	For the Six Months Ended						Increase
	6/30/2007			6/30/2006			(Decrease)
INCOME STATEMENT
Interest income - taxable equivalent	$	51,099		$	46,601		9.65	%
Interest expense		20,742			15,530		33.56	%
Net interest income - taxable equivalent		30,357			31,071		-2.30	%
Less: taxable equivalent adjustment		1,087			964		12.76	%
Net interest income		29,270			30,107		-2.78	%
Provision for loan and lease losses		165			610		-72.95	%
Net interest income after provision for loan and lease losses		29,105			29,497		-1.33	%
Noninterest income		8,164			7,142		14.31	%
Noninterest expense		25,141			22,638		11.06	%
Provision for income taxes		3,568			4,297		-16.97	%
Net income	$	8,560		$	9,704		-11.79	%
PER SHARE DATA
Basic earnings	$	0.79		$	0.90		-12.22	%
Diluted earnings	$	0.79		$	0.89		-11.24	%
Shares outstanding		10,792,797			10,771,778
Weighted average shares -
Basic		10,791,224			10,767,905
Diluted		10,819,352			10,847,842
Dividends paid on common shares	$	0.32		$	0.30
PERFORMANCE RATIOS
Return on average assets		1.08	%		1.27	%	-14.96	%
Return on average equity		11.31	%		13.93	%	-18.81	%
Return on average realized equity (A)		11.25	%		13.74	%	-18.12	%
Net interest margin (taxable equivalent)		4.14	%		4.35	%	-4.83	%
Efficiency (taxable equivalent) (B)		65.21	%		59.00	%	10.53	%
ASSET QUALITY
Allowance for loan losses
Beginning of period	$	14,500		$	13,581
Provision for loan losses		165			610
Charge offs		(245	)		(226	)
Recoveries		75			78
Net charge-offs		(170	)		(148	)
End of period	$	14,495		$	14,043
Non-performing assets:
Non-accrual loans	$	3,139		$	2,339
Loans 90+ days past due and still accruing		—			—
Other real estate owned		—			38
Troubled debt restructurings		—			113
Total non-performing assets	$	3,139		$	2,490
to total assets:		0.20	%		0.16	%
to total loans plus OREO:		0.26	%		0.21	%
Allowance for loan losses to total loans		1.21	%		1.17	%
Net charge-offs	$	170		$	148
Net charge-offs to average loans outstanding		0.03	%		0.01	%

NOTES:

(A) Excludes the effect on average stockholders’ equity of unrealized gains (losses) that result from changes in market values of securities and other comprehensive pension expense.

(B) Excludes securities gains (losses) and foreclosed property expense for all periods.

(C) Individual amounts shown above are calculated from actual, not rounded amounts in the thousands, which appear above.

QUARTERLY PERFORMANCE SUMMARY

Virginia Financial Group, Inc. (NASDAQ: VFGI)

(Dollars in thousands, except per share data)

	6/30/2007			6/30/2006			Percent Increase (Decrease)
SELECTED BALANCE SHEET DATA
(Dollars in thousands)
End of period balances
Cash and cash equivalents	$	41,451		$	84,225		-50.79	%
Securities available for sale		260,198			246,667		5.49	%
Securities held to maturity		2,653			3,323		-20.16	%
Total securities		262,851			249,990		5.14	%
Real estate - construction		215,142			178,835		20.30	%
Real estate - 1-4 family residential		317,879			300,935		5.63	%
Real estate - commercial and multifamily		524,527			574,285		-8.66	%
Commercial, financial and agricultural		100,441			102,220		-1.74	%
Consumer loans		29,580			35,597		-16.90	%
All other loans		6,266			6,936		-9.66	%
Total loans		1,193,835			1,198,808		-0.41	%
Deferred loan costs		1,012			617		64.02	%
Allowance for loan losses		(14,495	)		(14,043	)	3.22	%
Net loans		1,180,352			1,185,382		-0.42	%
Bank owned life insurance		10,471			—		—
Other assets		98,975			74,652		32.58	%
Total assets		1,583,629			1,594,249		-0.67	%
Noninterest bearing deposits		233,110			260,067		-10.37	%
Money market & interest checking		315,840			332,407		-4.98	%
Savings		91,553			106,150		-13.75	%
CD’s and other time deposits		595,839			598,084		-0.38	%
Total deposits		1,236,342			1,296,708		-4.66	%
Federal funds purchased and securities sold under agreements to repurchase		—			—		N/A
Federal Home Loan Bank advances		85,500			75,000		14.00	%
Subordinated debt		20,619			20,619		0.00	%
Commercial paper		73,724			48,860		50.89	%
Other borrowed funds		873			12		>100.00	%
Other liabilities		11,555			10,811		6.88	%
Total liabilities		1,428,613			1,452,010		-1.61	%
Total stockholders’ equity	$	155,016		$	142,239		8.98	%
Accumulated comprehensive loss	$	(1,972	)	$	(2,539	)	-22.33	%
Average balances
	For the Three Months Ended						Percent Increase (Decrease)
	6/30/2007			6/30/2006
Total assets	$	1,582,575		$	1,559,265		1.49	%
Total stockholders’ equity	$	154,045		$	142,583		8.04	%
	For the Six Months Ended
	6/30/2007			6/30/2006
Total assets	$	1,595,169		$	1,542,399		3.42	%
Total stockholders’ equity	$	152,685		$	140,485		8.68	%
OTHER DATA
End of period full time employees		536			558

QUARTERLY PERFORMANCE SUMMARY

Virginia Financial Group, Inc. (NASDAQ: VFGI)

(Dollars in thousands)

	For the Three Months Ended						Percent Increase (Decrease)
	6/30/2007			6/30/2006
Interest Income
Loans, including fees	$	22,278		$	20,834		6.93	%
Deposits in other banks		4			29		-86.21	%
Investment securities:
Taxable		1,715			1,512		13.43	%
Tax-exempt		926			845		9.59	%
Dividends		134			111		20.72	%
Federal funds sold		9			133		-93.23	%
Total interest income		25,066			23,464		6.83	%
Interest Expense
Deposits		7,843			6,594		18.94	%
Federal funds repurchased and securities sold under agreements to repurchase		117			64		82.81	%
Federal Home Loan Bank advances		969			623		55.54	%
Subordinated debt		421			402		4.73	%
Commercial paper		791			531		48.96	%
Other borrowings		10			8		25.00	%
Total interest expense		10,151			8,222		23.46	%
Net interest income		14,915			15,242		-2.15	%
Provision for loan losses		—			100		-100.00	%
Net interest income after provision for loan losses		14,915			15,142		-1.50	%
Noninterest Income
Retail banking fees		1,920			1,767		8.66	%
Commissions and fees from fiduciary activities		857			781		9.73	%
Brokerage fee income		294			170		72.94	%
Other operating income		651			246		>100.00	%
Gain on sale of premises and equipment		1			80		-98.75	%
Losses on securities available for sale		(32	)		(18	)	77.78	%
Mortgage banking-related fees		645			853		-24.38	%
Total noninterest income		4,336			3,879		11.78	%
Noninterest Expense
Compensation and employee benefits		7,037			6,596		6.69	%
Net occupancy		885			732		20.90	%
Supplies and equipment		1,166			1,016		14.76	%
Amortization-intangible assets		161			157		2.55	%
Marketing		393			307		28.01	%
State franchise taxes		299			216		38.43	%
Data processing		430			308		39.61	%
Telecommunications		236			272		-13.24	%
Professional fees		378			148		>100.00	%
Other operating expenses		1,869			1,703		9.75	%
Total noninterest expense		12,854			11,455		12.21	%
Income before income taxes		6,397			7,566		-15.45	%
Income tax expense		1,856			2,326		-20.21	%
Net income	$	4,541		$	5,240		-13.34	%

QUARTERLY PERFORMANCE SUMMARY

Virginia Financial Group, Inc. (NASDAQ: VFGI)

(Dollars in thousands)

	For the Six Months Ended						Percent Increase (Decrease)
	6/30/2007			6/30/2006
Interest Income
Loans, including fees	$	44,264		$	40,268		9.92	%
Deposits in other banks		10			65		-84.62	%
Investment securities:
Taxable		3,549			3,010		17.91	%
Tax-exempt		1,869			1,659		12.66	%
Dividends		260			226		15.04	%
Federal funds sold		61			409		-85.09	%
Total interest income		50,013			45,637		9.59	%
Interest Expense
Deposits		16,373			12,556		30.40	%
Federal funds repurchased and securities sold under agreements to repurchase		225			148		52.03	%
Federal Home Loan Bank advances		1,746			1,205		44.90	%
Subordinated debt		838			776		7.99	%
Commercial paper		1,545			833		85.47	%
Other borrowings		16			12		33.33	%
Total interest expense		20,743			15,530		33.57	%
Net interest income		29,270			30,107		-2.78	%
Provision for loan losses		165			610		-72.95	%
Net interest income after provision for loan losses		29,105			29,497		-1.33	%
Noninterest Income
Retail banking fees		3,663			3,375		8.53	%
Commissions and fees from fiduciary activities		1,685			1,592		5.84	%
Brokerage fee income		550			396		38.89	%
Other operating income		1,058			416		>100.00	%
(Losses) Gains on sale of premises and equipment		(4	)		76		-105.26	%
Losses on securities available for sale		(32	)		(199	)	-83.92	%
Mortgage banking-related fees		1,244			1,486		-16.29	%
		—
Total noninterest income		8,164			7,142		14.31	%
Noninterest Expense
Compensation and employee benefits		13,856			13,197		4.99	%
Net occupancy		1,759			1,498		17.42	%
Supplies and equipment		2,286			1,992		14.76	%
Amortization-intangible assets		325			257		26.46	%
Marketing		642			432		48.61	%
State franchise taxes		543			463		17.28	%
Data processing		898			691		29.96	%
Telecommunications		475			547		-13.16	%
Professional fees		528			279		89.25	%
Other operating expenses		3,829			3,282		16.67	%
Total noninterest expense		25,141			22,638		11.06	%
Income before income taxes		12,128			14,001		-13.38	%
Income tax expense		3,568			4,297		-16.97	%
Net income	$	8,560		$	9,704		-11.79	%

VIRGINIA FINANCIAL GROUP INC.

CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES

THREE MONTHS ENDED JUNE 30, 2007 AND 2006

(Dollars in thousands)

	Three months ended June 30,
	2007						2006
Dollars in thousands	Average Balance		Interest Inc/Exp		Average Rates		Average Balance		Interest Inc/Exp		Average Rates
Assets
Loans receivable, net	$	1,209,394	$	22,317	7.40	%	$	1,188,071	$	20,886	7.05	%
Investment securities
Taxable		164,210		1,849	4.45	%		154,145		1,622	4.22	%
Tax exempt		93,876		1,425	6.01	%		84,328		1,300	6.18	%
Total investments		258,086		3,274	5.02	%		238,473		2,922	4.91	%
Interest bearing deposits		378		4	4.19	%		3,842		29	3.03	%
Federal funds sold		667		9	5.34	%		22,605		133	2.36	%
		259,131		3,287	5.02	%		264,920		3,084	4.67	%
Total earning assets		1,468,525		25,604	6.99	%		1,452,991		23,970	6.62	%
Total nonearning assets		114,050						106,274
Total assets	$	1,582,575					$	1,559,265
Liabilities and Stockholders' Equity
Interest-bearing deposits
Interest checking	$	164,391	$	70	0.17	%	$	175,080	$	243	0.56	%
Money market		149,997		898	2.40	%		156,687		679	1.74	%
Savings		95,490		325	1.37	%		109,907		173	0.63	%
Time deposits:
Less than $100,000		397,884		4,199	4.23	%		392,281		3,609	3.69	%
$100,000 and more		204,382		2,351	4.61	%		184,713		1,890	4.10	%
Total interest-bearing deposits		1,012,144		7,843	3.11	%		1,018,668		6,594	2.60	%
Federal funds purchased and securities sold under agreements to repurchase		8,352		117	5.54	%		18,884		64	1.36	%
Federal Home Loan Bank advances		73,643		968	5.20	%		55,496		623	4.50	%
Subordinated debt		20,619		421	8.08	%		20,619		402	7.82	%
Commercial paper		69,605		791	4.50	%		48,451		531	4.40	%
Other borrowings		715		11	6.09	%		468		8	6.86	%
		172,934		2,308	5.28	%		143,918		1,628	4.54	%
Total interest-bearing liabilities		1,185,078		10,151	3.43	%		1,162,586		8,222	2.84	%
Total noninterest-bearing liabilities		243,452						254,096
Total liabilities		1,428,530						1,416,682
Stockholders' equity		154,045						142,583
Total liabilities and stockholders' equity	$	1,582,575					$	1,559,265
Net interest income (tax equivalent)			$	15,453					$	15,748
Average interest rate spread					3.57	%					3.78	%
Interest expense as percentage of average earning assets					2.77	%					2.27	%
Net interest margin					4.22	%					4.35	%

VIRGINIA FINANCIAL GROUP INC.

CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES

SIX MONTHS ENDED JUNE 30, 2007 AND 2006

(Dollars in thousands)

	Six months ended June 30,
	2007						2006
Dollars in thousands	Average Balance		Interest Inc/Exp		Average Rates		Average Balance		Interest Inc/Exp		Average Rates
Assets
Loans receivable, net	$	1,214,647	$	44,343	7.36	%	$	1,173,227	$	40,338	6.93	%
Investment securities
Taxable		169,495		3,809	4.47	%		153,548		3,236	4.25	%
Tax exempt		94,363		2,876	6.06	%		82,485		2,553	6.24	%
Total investments		263,858		6,685	5.04	%		236,033		5,789	4.95	%
Interest bearing deposits		501		10	3.97	%		4,895		65	2.68	%
Federal funds sold		2,241		61	5.41	%		26,627		409	3.10	%
		266,600		6,756	5.04	%		267,555		6,263	4.72	%
Total earning assets		1,481,247		51,099	6.96	%		1,440,782		46,601	6.52	%
Total nonearning assets		113,922						101,616
Total assets	$	1,595,169					$	1,542,398
Liabilities and Stockholders' Equity
Interest-bearing deposits
Interest checking	$	161,918	$	133	0.17	%	$	177,160	$	443	0.50	%
Money market		164,755		2,154	2.64	%		161,649		1,380	1.72	%
Savings		96,002		627	1.32	%		114,970		369	0.65	%
Time deposits:
Less than $100,000		406,338		8,632	4.28	%		382,272		6,794	3.58	%
$100,000 and more		209,001		4,827	4.66	%		180,040		3,570	4.00	%
Total interest-bearing deposits		1,038,014		16,373	3.18	%		1,016,091		12,556	2.49	%
Federal funds purchased and securities sold under agreements to repurchase		8,118		225	5.51	%		17,281		148	1.73	%
Federal Home Loan Bank advances		67,956		1,745	5.11	%		55,959		1,205	4.34	%
Subordinated debt		20,619		838	8.08	%		20,619		776	7.59	%
Commercial paper		66,721		1,545	4.61	%		39,576		833	4.24	%
Other borrowings		531		16	5.99	%		361		12	6.70	%
		163,945		4,369	5.30	%		133,796		2,974	4.48	%
Total interest-bearing liabilities		1,201,959		20,742	3.47	%		1,149,887		15,530	2.72	%
Total noninterest-bearing liabilities		240,525						252,026
Total liabilities		1,442,484						1,401,913
Stockholders' equity		152,685						140,485
Total liabilities and stockholders' equity	$	1,595,169					$	1,542,398
Net interest income (tax equivalent)			$	30,357					$	31,071
Average interest rate spread					3.49	%					3.80	%
Interest expense as percentage of average earning assets					2.82	%					2.17	%
Net interest margin					4.14	%					4.35	%