---

---

|SECURITIES AND EXCHANGE COMMISSION              
|------------------------------------------------
|Washington, D.C. 20549                          
|FORM 10-Q                                       
|[Mark One]                                      
|[X]                                             
|for the quarterly period endedSeptember 30, 2005
|[  ]                                            
|                                                
|Commission File Number:000-50332                



PREMIERWEST BANCORP
(Exact name of registrant as specified in its charter)

OREGON
	
	93-1282171(State or other jurisdiction of
	
	(I.R.S. Employer Identification Number)incorporation or organization)


503 Airport RoadP.O. Box 40Medford, Oregon 97504(Address of principal executive offices)(Zip Code)



(541) 618-6003
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

                                                                                                    Yes [X]No [ ]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Common stock, no par value: 15,369,087 shares as of October 25, 2005

---

|Form 10-Q        
|-----------------
|Table of Contents
|                 
|Part I           
|Item 1.          
|Item 2.          
|Item 3.          
|Item 4.          
|Part II          
|Item 1.          
|Item 2.          
|Item 3.          
|Item 4.          
|Item 5.          
|Item 6.          
|SIGNATURES       

---

|PART I. FINANCIAL INFORMATION                                    |               |         |              |      |        
|---------------------------------------------------------------- | ------------- | ------- | ------------ | ---- | -------
|                                                                
|ITEM 1. FINANCIAL STATEMENTS.                                    |               |         |              |      |        
|                                                                
|PREMIERWEST BANCORP AND SUBSIDIARY                               |               |         |              |     
|CONSOLIDATED BALANCE SHEETS                                      |               |         |              |      |        
|(Dollars in 000s)                                               |               |         |              |      |        
|(UNAUDITED)                                                      |               |         |              |      |        
|                                                                
|ASSETS                                                          
|                                                                 | September 30, |         | December 31,
|                                                                 |               | 2005    |              | 2004
|                                                                 |               |         |             
|Cash and cash equivalents:                                       |               |         |              |      |        
|Cash and due from banks                                          | $             | 33,659  |              | $    | 21,084 
|Federal funds sold                                               |               | 3,055   |              |      | 15,350 
|                                                                 |               |         |             
|                                                                
|Total cash and cash
equivalents                                  |               | 36,714  |              |      | 36,434 
|                                                                 |               |         |             
|                                                                
|Interest-bearing deposits with Federal Home Loan Bank            |               | 181     |              |      | 21     
|                                                                 |               |         |             
|Investments:                                                     |               |         |              |      |        
|Investment securities available-for-sale, at fair market value   |               | 5,344   |              |      | 6,515  
|Investment securities held-to-maturity, at amortized cost        |               | 10,258  |              |      | 11,087 
|Restricted equity securities                                     |               | 1,865   |              |      | 1,599  
|                                                                 |               |         |             
|Total
investments                                                |               | 17,467  |              |      | 19,201 
|                                                                 |               |         |             
|                                                                
|Mortgage loans held-for-sale, at cost, which approximates market |               | 199     |              |      | 533    
|Loans, net of allowance for loan losses and deferred loan fees   |               | 765,128 |              |      | 678,594
|                                                                 |               |         |             
|                                                                
|Total loans                                                      |               | 765,327 |              |      | 679,127
|                                                                 |               |         |             
|                                                                
|Premises and equipment, net of accumulated depreciation          |               |         |              |      |        
|and amortization                                                 |               | 30,255  |              |      | 27,922 
|Core deposit intangibles, net of amortization                    |               | 2,628   |              |      | 2,997  
|Goodwill                                                         |               | 19,566  |              |      | 19,566 
|Accrued interest and other assets                                |               | 18,245  |              |      | 19,177 
|                                                                 |               |         |             
|TOTAL ASSETS                                                     | $             | 890,383 |              | $    | 804,445
|                                                                 |               |         |             
|LIABILITIES AND SHAREHOLDERS' EQUITY                            
|LIABILITIES                                                      |               |         |              |      |        
|Deposits:                                                        |               |         |              |      |        
|Demand                                                           | $             | 207,223 |              | $    | 183,845
|Interest-bearing demand and savings                              |               | 347,720 |              |      | 324,834
|Time                                                             |               | 211,307 |              |      | 180,306
|                                                                 |               |         |             
|Total deposits                                                   |               | 766,250 |              |      | 688,985
|                                                                
|Federal Home Loan Bank borrowings                                |               | 1,940   |              |      | 2,419  
|Junior subordinated debentures                                   |               | 15,464  |              |      | 15,464 
|Accrued interest and other liabilities                           |               | 6,920   |              |      | 6,997  
|                                                                 |               |         |             
|Total
liabilities                                                |               | 790,574 |              |      | 713,865
|                                                                 |               |         |             
|                                                                
|COMMITMENTS AND CONTINGENCIES (Note 7)                           |               |         |              |      |        
|SHAREHOLDERS' EQUITY                                             |               |         |              |      |        
|Series A Preferred Stock, no par value, 1,000,000 shares         |               |         |              |      |        
|authorized, 11,000 shares issued and outstanding                 |               | 9,590   |              |      | 9,590  
|Common stock - no par value; 50,000,000 shares authorized;       |               |         |              |      |        
|15,367,096 shares issued and outstanding (14,612,332 in 2004)    |               | 73,191  |              |      | 62,482 
|Retained earnings                                                |               | 16,872  |              |      | 18,224 
|Accumulated other comprehensive income, net of taxes             |               | 156     |              |      | 284    
|                                                                 |               |         |             
|Total shareholders'
equity                                       |               | 99,809  |              |      | 90,580 
|                                                                 |               |         |             
|TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                       | $             | 890,383 |              | $    | 804,445
|                                                                 |               |         |             
|                                                                
|                                                                
|See accompanying notes.                                         

3

---

|PREMIERWEST BANCORP AND SUBSIDIARY                    
|------------------------------------------------------
|CONSOLIDATED STATEMENTS OF INCOME                     
|(Dollars in 000s, Except for Earnings per Share Data)
|(UNAUDITED)                                           
|                                                      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                      
|INTEREST AND DIVIDEND INCOME                          
|Interest and fees on loans                            
|Interest on investments:                              
|Taxable                                               
|Nontaxable                                            
|Interest on federal funds sold                        
|Other interest and dividends                          
|                                                      
|                                                      
|Total interest and dividend income                    
|                                                      
|                                                      
|INTEREST EXPENSE                                      
|Deposits:                                             
|Interest-bearing demand and savings                   
|Time                                                  
|Borrowed funds:                                       
|Federal funds purchased and repurchase agreements     
|Federal Home Loan Bank borrowings                     
|Junior subordinated debentures                        
|                                                      
|                                                      
|Total interest expense                                
|                                                      
|                                                      
|Net Interest Income                                   
|                                                      
|LOAN LOSS PROVISION                                   
|                                                      
|                                                      
|Net interest income after loan loss provision         
|                                                      
|                                                      
|NONINTEREST INCOME                                    
|Service charges on deposits accounts                  
|Mortgage loan brokerage and other fees                
|Investment brokerage and annuity fees                 
|Other commissions and fees                            
|Gains on sales on investment securities, net          
|Other noninterest income                              
|                                                      
|                                                      
|Total noninterest income                              
|                                                      
|                                                      
|NONINTEREST EXPENSE                                   
|Salaries and employee benefits                        
|Net occupancy and equipment                           
|Communications                                        
|Professional fees                                     
|Advertising                                           
|Other                                                 
|                                                      
|                                                      
|Total noninterest expense                             
|                                                      
|                                                      
|INCOME BEFORE PROVISION FOR INCOME TAXES              
|                                                      
|PROVISION FOR INCOME TAXES                            
|                                                      
|                                                      
|NET INCOME                                            
|                                                      
|                                                      
|EARNINGS PER COMMON SHARE:                            
|BASIC                                                 
|                                                      
|DILUTED                                               
|                                                      
|                                                      
|                                                      
|See accompanying notes.                               

4

---

|PREMIERWEST BANCORP AND SUBSIDIARY                        
|----------------------------------------------------------
|CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
|(Dollars in 000s)                                        
|(UNAUDITED)                                               
|                                                          
|                                                          
|                                                          
|                                                          
|                                                          
|                                                          
|                                                          
|BALANCE - JANUARY 1, 2004                                 
|Comprehensive income:                                     
|Net income                                                
|Unrealized losses                                         
|on investment securities                                  
|available-for-sale of $78                                 
|(net of taxes of $40)                                     
|                                                          
|Comprehensive income                                      
|                                                          
|Common stock issued to shareholders                       
|of Mid Valley Bank                                        
|Preferred stock dividend declared                         
|5% stock dividend                                         
|Stock options exercised                                   
|Income tax benefit of stock options                       
|exercised                                                 
|                                                          
|BALANCE - SEPTEMBER 30, 2004                              
|                                                          
|                                                          
|BALANCE - JANUARY 1, 2005                                 
|Comprehensive income:                                     
|Net income                                                
|Unrealized losses                                         
|on investment securities                                  
|available-for-sale of $29                                 
|(net of taxes of $15)                                     
|Amortization of unrealized gains                          
|for investment securities                                 
|transferred to held-to-maturity                           
|of $99 (net of taxes of $51)                              
|                                                          
|Comprehensive income                                      
|                                                          
|Preferred stock dividend declared                         
|5% stock dividend                                         
|Cash paid for fractional shares                           
|Stock options exercised                                   
|Income tax benefit of stock options                       
|exercised                                                 
|                                                          
|BALANCE - SEPTEMBER 30, 2005                              
|                                                          

See accompanying notes.



5

---

|PREMIERWEST BANCORP AND SUBSIDIARY                                            
|------------------------------------------------------------------------------
|CONSOLIDATED STATEMENTS OF CASH FLOWS                                         
|(Dollars in 000s)                                                            
|(UNAUDITED)                                                                   
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|CASH FLOWS FROM OPERATING ACTIVITIES:                                         
|Net income                                                                    
|Adjustments to reconcile net income to net cash                               
|from operating activities:                                                    
|Depreciation and amortization                                                 
|Loan loss provision                                                           
|Deferred income taxes                                                         
|Amortization of premiums (accretion of discounts)                             
|on investment securities, net                                                 
|Funding of loans held-for-sale                                                
|Proceeds from sales of loans held-for-sale                                    
|Gain on sale of loans held-for-sale                                           
|Restricted equity security stock dividends                                    
|Gains on sales of premises and equipment                                      
|Losses on sales of other real estate owned                                    
|Gains on sales of investment securities, net                                  
|Changes in accrued interest receivable/payable and other                      
|assets/liabilities                                                            
|                                                                              
|                                                                              
|Net cash from operating activities                                            
|                                                                              
|                                                                              
|CASH FLOWS FROM INVESTING ACTIVITIES:                                         
|Proceeds from sales of investment securities available-for-sale               
|Proceeds from sales of investment securities held-to-maturity                 
|Proceeds from calls and maturities of investment                              
|securities available-for-sale                                                 
|Proceeds from calls and maturities of investment                              
|securities held-to-maturity                                                   
|Proceeds from redemption of restricted equity securities                      
|Purchase of restricted equity securities                                      
|Increase in interest-bearing deposits with Federal Home Loan Bank             
|Loan originations, net                                                        
|Purchase of premises and equipment, net                                       
|Proceeds from the sale of other real estate owned                             
|Cash and cash equivalents received in acquisition of Mid Valley Bank,         
|net of cash paid of $9,813 and acquisition costs of $627                      
|Increase in other investments                                                 
|Proceeds from sale of premises and equipment                                  
|                                                                              
|                                                                              
|Net cash from investing activities                                            
|                                                                              
|                                                                              
|CASH FLOWS FROM FINANCING ACTIVITIES:                                         
|Net increase in deposits                                                      
|Net decrease in Federal Home Loan Bank borrowings                             
|Net decrease in securities sold under agreements to repurchase                
|Proceeds from exercise of stock options                                       
|Cash paid for fractional shares relating to stock dividend                    
|                                                                              
|Net cash from financing activities                                            
|                                                                              
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                              
|CASH AND CASH EQUIVALENTS - Beginning of the period                           
|                                                                              
|CASH AND CASH EQUIVALENTS - End of the period                                 
|                                                                              
|                                                                              
|SUPPLEMENTAL DISCOSURE OF CASH FLOW INFORMATION:                              
|Cash paid for interest                                                        
|                                                                              
|Cash paid for taxes                                                           
|                                                                              
|                                                                              
|SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND                              
|FINANCING ACTIVITIES:                                                         
|Transfer of loans to other real estate owned                                  
|                                                                              
|Preferred stock dividend declared                                             
|                                                                              
|Transfer securities from Available For Sale to Hold To Maturity classification
|                                                                              
|Income tax benefit of stock options exercised                                 
|                                                                              

See accompanying notes.

6

---

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization-The accompanying consolidated financial statements include the accounts of PremierWest Bancorp and its wholly-owned subsidiary
PremierWest Bank (collectively, "PremierWest", "the Company" or "the Bank").  PremierWest Bank's wholly-owned subsidiaries include PremierWest Investment Services, Inc., Premier Finance Company, and Blue Star Properties, Inc.

The Bank conducts a general commercial banking business operating in Jackson, Josephine, Douglas, and Klamath counties of southern Oregon, Deschutes County in central Oregon and Siskiyou, Shasta, Tehama, Butte, Placer and
Yolo counties of northern California. Its activities include the usual lending and deposit functions of a commercial bank including commercial, real estate, installment, and mortgage loans; checking, time deposit, and savings accounts; mortgage loan
brokerage services; automated teller machines (ATMs); and safe deposit facilities.

Basis of presentation-The consolidated financial statements include the accounts of PremierWest Bancorp and
its wholly-owned subsidiary PremierWest Bank. All significant intercompany accounts and transactions have been eliminated in consolidation.

The interim consolidated financial statements are not audited, but include all adjustments that management considers necessary for a fair presentation of the results of operations for such interim periods. All such
adjustments are considered normal and recurring in nature.

The statement of income data for the nine-month period ending September 30, 2004 includes the acquired operations of Mid Valley Bank from the acquisition date (January 23, 2004) through September 30, 2004.

The balance sheet data as of December 31, 2004 was derived from audited financial statements and does not include all disclosures contained in the 2004 Annual Report to Shareholders.  The interim consolidated financial
statements should be read in conjunction with the Company's 2004 consolidated financial statements, including the notes thereto, included in the 2004 Annual Report to Shareholders as filed with the Securities and Exchange Commission under Form 10-K.
The reader should keep in mind that the results of operations for the interim periods shown in the accompanying consolidated financial statements are not necessarily indicative of results for any future interim periods or the entire fiscal year.

Method of accounting and use of estimates-The Bank prepares its consolidated financial statements in conformity with accounting principles generally
accepted in the United States of America and prevailing practices within the banking industry.  The Bank utilizes the accrual method of accounting, which recognizes income when earned and expenses when incurred.

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those
estimates.

Elements of our accounting policies are inherently subject to estimation techniques, valuation assumptions and other subjective assessments. In particular, management has identified certain policies that, due to the
judgments, estimates and assumptions inherent in those policies, are critical to an understanding of our consolidated financial statements. These policies relate primarily to the determination of our allowance for loan losses and the valuation of
goodwill and other intangible assets.

There are other complex accounting standards that require the Company to employ significant judgment in interpreting and applying certain of the principles prescribed by those standards. These judgments include the
determination of whether a financial instrument or other contract meets the definition of a derivative and qualifies for accounting in accordance with Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and
Hedging Activities".  These judgments also include significant estimates and assumptions necessary to determine the disclosure requirements of Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" and
Statement of Financial Accounting Standards No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure - an Amendment of FASB Statement No. 123."   These policies and judgments, estimates and assumptions are described in greater
detail in the Notes to the consolidated financial statements included in our 2004 Annual Report on Form 10-K.  We believe that the judgments, estimates and assumptions used in the preparation of our consolidated financial statements are appropriate
given the factual circumstances at the time. However, given the sensitivity of our consolidated financial statements to these critical accounting policies, the use of other judgments, estimates and assumptions could result in material differences in
our results of operations or financial condition.

Stock dividends-On March 22, 2005, the Company declared a 5% stock dividend payable on June 27, 2005 to its shareholders of record on June 1, 2005.
On March 1, 2004, the Company declared a 5% stock dividend payable on June 21, 2004 to its shareholders of record on May 28, 2004. Share and per share data in the accompanying consolidated financial statements have been retroactively restated to
reflect these stock dividends.

7

---

NOTE 2 - STOCK BASED COMPENSATION

Stock options- The Company applies Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations in accounting for its stock
option plans. SFAS No. 123, "Accounting for Stock-Based Compensation," requires companies, such as the Bank, that use the intrinsic value method to account for employee stock options, to provide pro forma disclosures of the net income and earnings
per share effect of applying the fair value based method of accounting for stock options.

The effect of applying the fair value based method to stock options granted during the nine months ended September 30, 2005 and 2004 resulted in an estimated weighted average grant date fair value of $2.74 for the three
and nine months ended September 30, 2005, and $2.51 for the three and nine months ended September 30, 2004. Had compensation costs been determined consistent with SFAS 123, the Company's net income, earnings per common share, and diluted
earnings per common share for the quarter and nine months ended September 30, 2005 and 2004 would have been as follows: (Dollars in 000s, except per share amounts)

|                                                  |  | FOR THE THREE MONTHS ENDED |  |                    |  | FOR THE NINE MONTHS ENDED
|------------------------------------------------- |  | -------------------------- |  | ------------------ |  | -------------------------
|                                                  |  |                            |  |                   
|                                                  |  | September 30, 2005         |  | September 30, 2004 |  | September 30, 2005       
|                                                  |  |                            |  |                    |  |                          
|                                                 
|NET INCOME, as reported                           |  | $                          |  | 3,503              |  | $                        
|Less: Stock-based compensation expense determined |  |                            |  |                    |  |                          
|under the fair value based method, net of tax     |  | $                          |  | (25)               |  | $                        
|                                                  |  |                            |  |                    |  |                          
|                                                 
|Pro forma net income                              |  | $                          |  | 3,478              |  | $                        
|                                                  |  |                            |  |                    |  |                          
|                                                 
|Earnings Per Share:                               |  |                            |  |                    |  |                          
|Basic - as reported                               |  | $                          |  | 0.22               |  | $                        
|Basic - pro forma                                 |  | $                          |  | 0.22               |  | $                        
|Diluted - as reported                             |  | $                          |  | 0.21               |  | $                        
|Diluted - pro forma                               |  | $                          |  | 0.21               |  | $                        

The fair value of each option granted is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions for September 30, 2005 and 2004:

|                      |  | FOR THE THREE MONTHS ENDED |  | FOR THE NINE MONTHS ENDED
|--------------------- |  | -------------------------- |  | -------------------------
|                      |  |                            |  |                          
|                      |  | September 30, 2005         |  | September 30, 2004       
|                      |  |                            |  |                          
|                     
|Dividend yield        |  | 5.0%                       |  | 5.0%                     
|Expected life (years) |  | 7.50                       |  | 7.75                     
|Expected volatility   |  | 39%                        |  | 40%                      
|Risk-free rate        |  | 4.4%                       |  | 3.4%                     

8

---

NOTE 3 - INVESTMENT SECURITIES

Investment securities at September 30, 2005 and December 31, 2004 consisted of the following: (Dollars in 000's)

|                                                 |  |           |  |       |  |            |  |       |  | 2005       |  |          |  |           |  |      
|------------------------------------------------ |  | --------- |  | ----- |  | ---------- |  | ----- |  | ---------- |  | -------- |  | --------- |  | -----
|                                                 |  |          
|                                                 |  |           |  |       |  |            |  | Gross |  |            |  | Gross    |  | Estimated
|                                                 |  | Amortized |  |       |  | unrealized |  |       |  | unrealized |  | fair    
|                                                 |  | cost      |  |       |  | gains      |  |       |  | losses     |  | value   
|                                                 |  |           |  |       |  |            |  |      
|Available-for-sale:                              |  |           |  |       |  |            |  |       |  |            |  |          |  |           |  |      
|U.S. Government and agency securities            |  | $         |  | 4,064 |  | $          |  | -     |  | $          |  | (81)     |  | $         |  | 3,983
|Mortgage-backed securities and collateralized    |  |           |  |       |  |            |  |       |  |            |  |          |  |           |  |      
|mortgage obligations                             |  |           |  | 357   |  |            |  | 3     |  |            |  | (1)      |  |           |  | 359  
|Corporate bonds                                  |  |           |  | 1,000 |  |            |  | 2     |  |            |  |          |  |           |  | 1,002
|                                                 |  |           |  |       |  |            |  |      
|                                                
|Total                                            |  | $         |  | 5,421 |  | $          |  | 5     |  | $          |  | (82)     |  | $         |  | 5,344
|                                                 |  |           |  |       |  |            |  |      
|                                                
|Held-to-maturity:                                |  |           |  |       |  |            |  |       |  |            |  |          |  |           |  |      
|Obligations of states and political subdivisions |  | $ 10,258  |  | $     |  | 9          |  | $     |  | (57)       |  | $ 10,210
|                                                 |  |           |  |       |  |            |  |      
|                                                
|Restricted equity securities                     |  | $         |  | 1,865 |  | $          |  | -     |  | $          |  | -        |  | $         |  | 1,865
|                                                 |  |           |  |       |  |            |  |      
|                                                
|                                                
|                                                 |  |           |  |       |  |            |  |       |  | 2004       |  |          |  |           |  |      
|                                                 |  |          
|                                                 |  |           |  |       |  |            |  | Gross |  |            |  | Gross    |  | Estimated
|                                                 |  | Amortized |  |       |  | unrealized |  |       |  | unrealized |  | fair    
|                                                 |  | cost      |  |       |  | gains      |  |       |  | losses     |  | value   
|                                                 |  |           |  |       |  |            |  |      
|Available-for-sale                               |  |           |  |       |  |            |  |       |  |            |  |          |  |           |  |      
|U.S. Government and agency securities            |  | $         |  | 4,106 |  | $          |  | -     |  | $          |  | (72)     |  | $         |  | 4,034
|Mortgage-backed securities and collateralized    |  |           |  |       |  |            |  |       |  |            |  |          |  |           |  |      
|mortgage obligations                             |  |           |  | 442   |  |            |  | 6     |  |            |  | (2)      |  |           |  | 446  
|Corporate bonds                                  |  |           |  | 2,000 |  |            |  | 35    |  |            |  | -        |  |           |  | 2,035
|                                                 |  |           |  |       |  |            |  |      
|                                                
|Total                                            |  | $         |  | 6,548 |  | $          |  | 41    |  | $          |  | (74)     |  | $         |  | 6,515
|                                                 |  |           |  |       |  |            |  |      
|                                                
|Held-to-maturity:                                |  |           |  |       |  |            |  |       |  |            |  |          |  |           |  |      
|Obligations of states and political subdivisions |  | $ 11,087  |  | $     |  | 100        |  | $     |  | (7)        |  | $ 11,180
|                                                 |  |           |  |       |  |            |  |      
|                                                
|Restricted equity securities                     |  | $         |  | 1,599 |  | $          |  | -     |  | $          |  | -        |  | $         |  | 1,599
|                                                 |  |           |  |       |  |            |  |      

During the third quarter of 2004, the Bank reclassified obligations of state and political subdivision securities from available-for-sale to held-to-maturity to more accurately reflect the purpose and intent in holding
these securities for long-term pledging requirements. The unrealized holding gains at the time of transfer were $335,000, net of deferred taxes of $224,000, and are being amortized as an adjustment to yield over the estimated remaining lives
of the underlying securities. This is offset by the amortization of a similar amount, recorded as accumulated other comprehensive income within shareholders' equity, from the date of transfer through the maturity date of each security transferred.

In response to the devastation caused by Hurricane Katrina upon the gulf coast region of the United States, management conducted a review of the Bank's municipal bond portfolio. The purpose of this review was to determine
if any holdings within the portfolio, having geographic exposure to the gulf coast region and potentially suffering devastation that resulted from the occurrence of the hurricane, presented a level of credit risk that was unacceptable under the
Bank's current investment policy. Management determined that a single bond in the Bank's held-to-maturity portfolio, having a net carrying value of $150,000, did present such a risk. The subject bond was subsequently sold, and resulted in a
realized gain of $3,120 for the quarter ending September 30, 2005.

All unrealized losses reflected above have been the result of changes in interest rates subsequent to the purchase of the securities. Because the decline in fair value is attributable to changes in interest rates and not
credit quality, and because the Bank has the ability and intent to hold these investments until a market price recovery is realized, or to maturity, the unrealized losses on these investments are not considered other-than-temporarily impaired.

At September 30, 2005, investment securities of $15.6 million were pledged to secure public deposits, certain nonpublic deposits, and borrowings.

9

---

|NOTE 4-LOANS, NON-PERFORMING ASSETS, AND ALLOWANCE FOR LOAN LOSSES               |  |           |  |          
|-------------------------------------------------------------------------------- |  | --------- |  | ---------
|                                                                                
|Loans as of September 30, 2005 and December 31, 2004 consisted of the following: |  |           |  |          
|(Dollars in 000's)                                                               |  | 2005      |  | 2004     
|                                                                                 |  |           |  |          
|Real estate-commercial                                                           |  | $ 332,353 |  | $ 359,601
|Real estate-construction                                                         |  | 235,834   |  | 149,250  
|Real estate-residential                                                          |  | 20,032    |  | 12,678   
|Commercial                                                                       |  | 115,918   |  | 94,560   
|Agricultural                                                                     |  | 17,856    |  | 19,031   
|Consumer                                                                         |  | 42,713    |  | 43,039   
|Other                                                                            |  | 13,444    |  | 11,769   
|                                                                                 |  |           |  |          
|Loans, gross                                                                     |  | 778,150   |  | 689,928  
|                                                                                 |  |           |  |          
|Less:                                                                            |  |           |  |          
|Allowance for loan losses                                                        |  | (10,857)  |  | (9,171)  
|Deferred loan fees                                                               |  | (2,165)   |  | (2,163)  
|                                                                                 |  |           |  |          
|                                                                                 |  | (13,022)  |  | (11,334) 
|                                                                                 |  |           |  |          
|Loans, net                                                                       |  | $ 765,128 |  | $ 678,594
|                                                                                 |  |           |  |          

Activity in the allowance for loan losses for the nine months ended September 30, 2005 and September 30, 2004 was as follows:

|(Dollars in 000's)                                                     |  | 2005     |  | 2004   
|---------------------------------------------------------------------- |  | -------- |  | -------
|                                                                       |  |          |  |        
|BALANCE, beginning of the period                                       |  | $ 9,171  |  | $ 5,466
|Loans charged-off                                                      |  | (154)    |  | (3,700)
|Loan recoveries                                                        |  | 1,690    |  | 294    
|Loan loss provision                                                    |  | 150      |  | 650    
|Allowance for loan losses recorded with acquisition of Mid Valley Bank |  | -        |  | 6,085  
|                                                                       |  |          |  |        
|BALANCE, end of the period                                             |  | $ 10,857 |  | $ 8,795
|                                                                       |  |          |  |        

The following table summarizes non-performing assets as of September 30, 2005 and December 31, 2004:

|(Dollars in 000's)                                                |  | 2005    |  | 2004   
|----------------------------------------------------------------- |  | ------- |  | -------
|                                                                  |  |         |  |        
|Loans on non-accrual status                                       |  | $ 3,060 |  | $ 1,890
|Loans past due greater than 90 days but not on non-accrual status |  | 6       |  | 26     
|                                                                  |  |         |  |        
|Total non-performing loans                                        |  | 3,066   |  | 1,916  
|Other real estate owned                                           |  | 62      |  | 483    
|                                                                  |  |         |  |        
|Total non-performing assets                                       |  | $ 3,128 |  | $ 2,399
|                                                                  |  |         |  |        
|Percentage of non-performing loans to total loans                 |  | 0.40%   |  | 0.28%  
|                                                                  |  |         |  |        
|Percentage of non-performing assets to total assets               |  | 0.35%   |  | 0.30%  
|                                                                  |  |         |  |        

10

---

NOTE 5 - LINE OF CREDIT AND OTHER BORROWINGS

The Company has a secured line of credit available with the Federal Home Loan Bank of Seattle (FHLB) under which it may borrow up to 10% of the Bank's total assets. The line of credit is secured by loans and securities,
including restricted FHLB stock owned by the Company. As of September 30, 2005 and December 31, 2004, the Company had long-term advances outstanding against this line of credit aggregating $1.9 million and $2.4 million, respectively.
Interest and principal payments under these long-term advances are due monthly and the Company was making monthly principal payments of approximately $53,000 plus accrued interest at the weighted average annual interest rate of 5.92% as of both
September 30, 2005 and December 31, 2004. Of the $1.9 million in outstanding long-term advances, approximately $1.8 million matures August 2008 while the remaining $145,000 matures at various times through February 2014.  As of September
30, 2005, the Company had pledged available collateral of approximately $44.8 million to support additional borrowings.

Additionally, as of September 30, 2005, the Company has approximately $106.0 million in available borrowings through lines of credit with certain correspondent banks and through the Federal Reserve Bank's discount
window.  No balances were outstanding as of September 30, 2005 and December 31, 2004.

NOTE 6 - JUNIOR SUBORDINATED DEBENTURES

On December 30, 2004, the Company established two wholly owned statutory business trusts (Trusts) that were formed to issue trust preferred securities and related common securities. The $15,464,000 junior subordinated
debentures issued by the Company to the Trusts require quarterly interest-only payments and are reflected as junior subordinated debentures in the consolidated balance sheets. Common stock issued by the Trusts and held as an investment by the
Company is recorded in other assets in the consolidated balance sheets. Following are the terms of the junior subordinated debentures as of September 30, 2005.

|                      |  |            |  | Issued      |  |       |  | Maturity |  | Redemption
|--------------------- |  | ---------- |  | ----------- |  | ----- |  | -------- |  | ----------
|Trust Name            |  | Issue Date |  | Amount      |  | Rate  |  | Date     |  | Date      
|                      |  |            |  |             |  |       |  |          |  |           
|                     
|PremierWest Statutory |  | December   |  |             |  |       |  | December |  | December  
|Trust I (1)           |  | 2004       |  | $ 7,732,000 |  | 5.65% |  | 2034     |  | 2009      
|                     
|PremierWest Statutory |  | December   |  |             |  |       |  | March    |  | March     
|Trust II (2)          |  | 2004       |  | $ 7,732,000 |  | 5.65% |  | 2035     |  | 2010      

|(1) | PremierWest Statutory Trust I bears interest at the fixed rate of 5.65% until December 2009 at which time it converts to the variable rate of LIBOR + 1.75%, adjusted quarterly, through the final maturity date in December
2034.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | PremierWest Statutory Trust II bears interest at the fixed rate of 5.65% until March 2010 at which time it converts to the variable rate of LIBOR + 1.79%, adjusted quarterly, through the final maturity date in March
2035.     

NOTE 7 - COMMITMENTS AND CONTINGENCIES

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and
standby letters of credit. These instruments involve various levels and elements of credit and interest rate risk in excess of the amount recognized in the accompanying consolidated financial statements. The contract or notional amounts of those
instruments reflect the extent of involvement the Company has in particular classes of financial instruments. As of September 30, 2005, the Company has $177.6 million of commitments to extend credit to customers and $10.0 million in standby
letters of credit.

In the ordinary course of business, the Bank may become involved in various litigations arising from normal banking activities. In the opinion of management, the ultimate disposition of current actions will not have a
material adverse effect on the Bank's consolidated financial position or results of operations.

11

---

NOTE 8 - EARNINGS PER SHARE

The Company's basic earnings per common share is computed by dividing net income, less dividends declared on convertible preferred stock, by the weighted average number of common shares outstanding during the period,
retroactively adjusted for all stock dividends. The Company's diluted earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding plus dilutive common shares related to stock options and
convertible preferred shares, retroactively adjusted for all stock dividends. The following summarizes the weighted average shares outstanding for the computation of basic and diluted shares as of September 30, 2005 and 2004.

|Three-months ended September 30, 2005 and 2004: |  | 2005       |  | 2004      
|----------------------------------------------- |  | ---------- |  | ----------
|                                                |  |            |  |           
|Weighted average number of common shares:       |  |            |  |           
|Basic common shares                             |  | 15,364,771 |  | 15,308,612
|Diluted common shares                           |  | 16,807,534 |  | 16,577,314
|                                               
|Nine-months ended September 30, 2005 and 2004:  |  | 2005       |  | 2004      
|                                                |  |            |  |           
|Weighted average number of common shares:       |  |            |  |           
|Basic common shares                             |  | 15,354,735 |  | 15,111,029
|Diluted common shares                           |  | 16,782,858 |  | 16,361,060

In March 2004, the FASB ratified the consensus reached by the Emerging Issues Task Force (EITF) regarding Issue 03-1, "The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments." EITF Issue
03-1 provides guidance on recognition and measurement of other-than-temporary impairment and its application to certain investments, including all debt securities and equity securities that are subject to the scope of SFAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities."

On September 30, 2004, the FASB issued a proposed Board-directed Staff Position, FSP EITF Issue 03-1-a, "Implementation Guidance for the Application of Paragraph 16," of EITF Issue No. 03-1. The proposed FSP will provide
implementation guidance with respect to debt securities that are impaired solely due to interest rates and/or sector spreads and analyzed for other-than-temporary impairment under paragraph 16 of EITF Issue 03-1. The Board has delayed the effective
date to provide further implementation guidance. This delay does not suspend the requirement to recognize other-than-temporary impairments as required by existing authoritative literature. The delay of the effective date for paragraphs 10 through 20
of EITF Issue 03-1 will be superseded concurrent with the final issuance of FSP EITF Issue 03-1-a. Management does not anticipate adoption of EITF Issue 03-1-a or further amendments will have a significant impact upon PremierWest's consolidated
financial statements.

In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS No. 123R,Shared Based Payment, a revision to the previously issued
guidance on accounting for stock options and other forms of equity-based compensation. SFAS No. 123R requires companies to recognize in the income statement the grant-date fair value of stock options and other equity-based forms of compensation
issued to employees. For the Company, this standard will become effective on January 1, 2006. The company does not expect the impact of adoption of SFAS No. 123R on earnings per share will be materially different from the current fair value pro
forma disclosure.

Companies may elect one of two methods for adoption of SFAS No. 123R. Under themodified prospectivemethod, any awards that are granted or modified
after the date of adoption will be measured and accounted for under the provisions of SFAS No. 123R.  The unvested portion of previously granted awards will continue to be accounted for under SFAS No. 123,Accounting for Stock-Based Compensation, except that the compensation expense associated with the unvested portions will be recognized in the statement of income.  Under themodified retrospectivemethod, all amounts previously reported are restated to reflect the amounts in the SFAS No. 123 pro forma disclosure. The Company expects to make a decision with respect to the
method of adoption during the fourth quarter of 2005.

In March 2005, the SEC issued Staff Accounting Bulletin ("SAB") No. 107 which expressed the views of the SEC regarding the interaction between SFAS No. 123R and certain SEC rules and regulations. SAB No. 107 provides
guidance related to the valuation of share-based payment arrangements for public companies, including assumptions such as expected volatility and expected term. The Company is assessing the impact SAB No. 107 will have on its consolidated financial
statements.

12

---

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS

This report includes forward-looking statements within the meaning of the "safe-harbor" provisions of Sections 21D and 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are based on the
beliefs of PremierWest Bancorp's (the Company) management and on assumptions made by management on the basis of information currently available. Other than for statements of historical fact, all statements about our financial position and results of
operations, business strategy and management's plans and objectives for future operations are forward-looking statements. When used in this report, the words "anticipate," "believe," "estimate," "expect," and "intend" and words or phrases of similar
meaning, as they relate to the Company or management, are intended in part to help identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements that include projections or management's
expectations for revenues, income or expenses, earnings per share, capital expenditures, dividends, capital structure and other financial items; statements of the plans and objectives of the Company, its management or its board of directors,
including the introduction of new products or services, plans for expansion, acquisitions or future growth and estimates or predictions of actions by customers, vendors, competitors or regulatory authorities; statements about future economic
performance; and statements of assumptions underlying other statements about the Company and its business. Although management believes that the expectations reflected in forward-looking statements are reasonable, we can make no assurance that such
expectations will prove correct. Forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements. These risks and uncertainties
include factors that might inhibit our ability to maintain or expand our market share or our net interest margins and factors that could limit or delay implementation of our marketing and growth strategies. Further, actual results may be affected by
our ability to compete on price and other factors with other financial institutions; customer acceptance of new products and services; localized economic conditions and events that disproportionately affect our business; and general trends in the
banking industry, interest rate economy and regulatory environment. In addition, we face various risks inherent in the banking industry relating to collectibility of loans and changes in interest rates. Other risks include those identified from time
to time in our past and future filings with the Securities and Exchange Commission. Note that this list of risks is not exhaustive, and risks identified are applicable as of the date made and cannot be updated.

OVERVIEW -The following includes management's discussion of the financial condition and results of operations for PremierWest Bancorp and its wholly owned subsidiary, PremierWest
Bank, for the quarter and year-to-date periods ending September 30, 2005. The discussion should be read in conjunction with the consolidated financial statements and accompanying notes to the consolidated financial statements contained in this
report as well as the Company's Form 10-K for the year ended December 31, 2004. For discussion purposes, management has made comparisons, as it deems appropriate, to other periods including the same interim periods in 2004 and the fiscal year ended
December 31, 2004.

HIGHLIGHTS -For the third quarter ended September 30, 2005, the Company earned $3.5 million ($0.21 per diluted share), an increase of 44.39% compared to earnings of $2.4
million ($0.15 per diluted share) for the quarter ended September 30, 2004. For the year-to-date period ending September 30, 2005, the Company earned $9.4 million ($0.56 per diluted share) compared to $6.4 million ($0.39 per
diluted share) for the same period ending September 30, 2004, an increase of 47.48% . Annualized return on average shareholders' equity was 14.21%, and return on average assets was 1.57% for the quarter ended September 30, 2005 as compared to an
annualized return on average shareholders' equity of 11.18% and a return on average assets of 1.26% for the quarter ended September 30, 2004. At September 30, 2005 and December 31, 2004, loans, net of deferred loan fees, totaled $776.0 and
$687.8 million, respectively, an increase of $88.2 million or 12.82% since year-end and an increase of $140.7 million or 22.15% when compared to loans, net of deferred loan fees, of $635.3 million as of September 30, 2004. Deposits
totaled $766.3 million at September 30, 2005 compared to $689.0 million at December 31, 2004 and $670.9 million at September 30, 2004, representing a 11.21% increase since year-end and 14.22% compared to a year ago.

The growth in assets and earnings for the third quarter and year-to-date periods ending September 30, 2005, when compared to the same periods a year ago, continues to be a function of internal growth resulting from
management's business strategy for building a dominant community banking franchise along the Interstate 5 corridor between Eugene, Oregon and Sacramento, California. This strategy remains focused on strengthening or expanding the Bank's position
within existing markets, opening de novo start-up offices in new markets and seeking opportunities to grow by acquisition. Impacting quarter and year-to-date operating results, when compared to the same period a year ago, was the Company's
acquisition of Mid Valley Bank on January 23, 2004; its entry into the new markets of Bend, Oregon and Woodland, California during the 4thquarter of 2004; and its entry
into the Roseville, California market with a temporary loan production office during the 2ndquarter of 2005. The Bend, Woodland and Roseville offices are start-up
operations requiring an investment in overhead for facilities and personnel in return for the expected increasing contribution to the overall profitability of the Bank. A permanent full-service Roseville office and a new full-service office in Eagle
Point, Oregon, both opened in early October 2005.  Previously announced expansion plans for 2005-2006 include new branch offices, in various stages of development, to be located in Shady Cove and Ashland, Oregon and Anderson, California.

13

---

FINANCIAL HIGHLIGHTS

The following table presents information regarding yields on interest-earning assets, rates paid on interest-bearing liabilities, net interest spreads, net yields on average interest-earning assets, returns on average
assets and returns on average equity for the periods indicated.

|Analysis for the three-month period ended      |  |          |  |   |  |         |  |   |  | Increase   |  |        
|---------------------------------------------- |  | -------- |  | - |  | ------- |  | - |  | ---------- |  | -------
|September 30, 2005 and 2004 (Dollars in 000's) |  | 2005     |  |   |  | 2004    |  |   |  | (Decrease) |  | %Change
|                                               |  |          |  |   |  |         |  |  
|Average fed funds sold and investments         |  | $ 25,968 |  | $ |  | 55,002  |  | $ |  | (29,034)   |  | -52.79%
|Average gross loans                            |  | 776,096  |  |   |  | 623,305 |  |   |  | 152,791    |  | 24.51% 
|Average interest-earning assets                |  | 802,064  |  |   |  | 678,307 |  |   |  | 123,757    |  | 18.24% 
|Average interest-bearing liabilities           |  | 579,272  |  |   |  | 500,420 |  |   |  | 78,852     |  | 15.76% 
|Average total assets                           |  | 889,859  |  |   |  | 769,100 |  |   |  | 120,759    |  | 15.70% 
|Average equity                                 |  | 98,631   |  |   |  | 86,771  |  |   |  | 11,860     |  | 13.67% 
|Average yield earned (1)                       |  | 7.65%    |  |   |  | 6.68%   |  |   |  | 0.97       |  | 14.52% 
|Average rate paid (2)                          |  | 1.49%    |  |   |  | 0.92%   |  |   |  | 0.57       |  | 61.96% 
|                                               |  |          |  |   |  |         |  |  
|Net interest spread                            |  | 6.16%    |  |   |  | 5.76%   |  |   |  | 0.40       |  | 6.94%  
|                                               |  |          |  |   |  |         |  |  
|Net interest income to average                 |  |          |  |   |  |         |  |   |  |            |  |        
|interest-earning assets (net interest          |  |          |  |   |  |         |  |   |  |            |  |        
|margin) (1)                                    |  | 6.20%    |  |   |  | 5.76%   |  |   |  | 0.44       |  | 7.64%  
|Return on average assets                       |  | 1.57%    |  |   |  | 1.26%   |  |   |  | 0.31       |  | 24.60% 
|Return on average equity                       |  | 14.21%   |  |   |  | 11.18%  |  |   |  | 3.03       |  | 27.10% 
|Efficiency ratio (3)                           |  | 60.49%   |  |   |  | 66.82%  |  |   |  | (6.33)     |  | -9.47% 
|                                              
|Analysis for the nine-month period ended       |  |          |  |   |  |         |  |   |  | Increase   |  |        
|September 30, 2005 and 2004 (Dollars in 000's) |  | 2005     |  |   |  | 2004    |  |   |  | (Decrease) |  | %Change
|                                               |  |          |  |   |  |         |  |  
|Average fed funds sold and investments         |  | $ 26,072 |  | $ |  | 73,213  |  | $ |  | (47,141)   |  | -64.39%
|Average gross loans                            |  | 742,404  |  |   |  | 586,746 |  |   |  | 155,658    |  | 26.53% 
|Average interest-earning assets                |  | 768,476  |  |   |  | 659,959 |  |   |  | 108,517    |  | 16.44% 
|Average interest-bearing liabilities           |  | 559,311  |  |   |  | 490,116 |  |   |  | 69,195     |  | 14.12% 
|Average total assets                           |  | 855,276  |  |   |  | 742,780 |  |   |  | 112,496    |  | 15.15% 
|Average equity                                 |  | 95,336   |  |   |  | 83,236  |  |   |  | 12,100     |  | 14.54% 
|Average yield earned (1)                       |  | 7.27%    |  |   |  | 6.34%   |  |   |  | 0.93       |  | 14.67% 
|Average rate paid (2)                          |  | 1.37%    |  |   |  | 0.94%   |  |   |  | 0.43       |  | 45.74% 
|                                               |  |          |  |   |  |         |  |  
|Net interest spread                            |  | 5.90%    |  |   |  | 5.40%   |  |   |  | 0.50       |  | 9.26%  
|                                               |  |          |  |   |  |         |  |  
|                                              
|Net interest income to average                 |  |          |  |   |  |         |  |   |  |            |  |        
|interest-earning assets (net interest          |  |          |  |   |  |         |  |   |  |            |  |        
|margin) (1)                                    |  | 5.93%    |  |   |  | 5.41%   |  |   |  | 0.52       |  | 9.61%  
|Return on average assets                       |  | 1.46%    |  |   |  | 1.14%   |  |   |  | 0.32       |  | 28.07% 
|Return on average equity                       |  | 13.13%   |  |   |  | 10.20%  |  |   |  | 2.93       |  | 28.73% 
|Efficiency ratio (3)                           |  | 62.53%   |  |   |  | 67.69%  |  |   |  | (5.16)     |  | -7.62% 

|Notes:
|------

|(1) | Tax equivalent at a 34% rate                                                                   
|--- | -----------------------------------------------------------------------------------------------
|(2) | Calculation is based on average total deposit accounts and borrowings for the periods indicated
|(3) | Non-interest expense divided by net interest income plus non-interest income                   
|   

RESULTS OF OPERATIONS

NET INTEREST INCOME- Net interest income, our primary source of revenue, is the difference between the interest income generated from our earning assets (loans and investments) and
the interest expense paid on our interest-bearing liabilities (interest-bearing deposits and borrowed funds).  Our net interest income is impacted by variables such as the volume and mix of our earning assets; the volume and mix of both our
interest-bearing and non interest-bearing liabilities; the quality of our loan portfolio; and the general movement in the market rates of interest. A key measurement of profitability is our net interest margin (net interest income divided by average
interest-earning assets), which represents the relative stability in net interest income over time.

14

---

For the three-month period ending September 30, 2005, our interest income increased $4.0 million while our interest expense increased $1.4 million resulting in our net interest income increasing $2.6 million
(27.3%) for the third quarter of 2005 compared to the same period a year ago. On a year-to-date basis, for the period ending September 30, 2005, interest income and interest expense was up $10.5 million and $3.1 million, respectively,
resulting in a higher net interest income by $7.4 million (27.8%) for the first nine months of this year compared to the same period in 2004.

The increases in our interest income, interest expense and the resulting net interest margin for both the quarter and year-to-date periods ending September 30, 2005, compared to the same periods in 2004, were driven by the
combination of higher levels of both our earning assets and interest-bearing liabilities, as well as the general trend of rising short-term interest rates. Over the past twelve months, movements in increments of 25 basis points by the Federal
Reserve Bank have resulted in an equal rise in the prime rate of interest, the leading short-term rate index, by a total of 200 basis points, 50 basis points in each of the last four quarters. The growth in our earning assets over the past year
resulted from strong loan demand across all of our markets, including our two newest geographic markets located in northern California (Woodland) and central Oregon (Bend), which we entered during 2004.

For the quarter ending September 30, 2005, our tax equivalent net interest margin was 6.20%, a 44 basis point increase over the same period a year ago and a 31 basis point improvement over our second quarter ended June 30,
2005.  On a year-to-date basis, for the nine months ending September 30, 2005, our tax equivalent net interest margin was 5.93%, a 52 basis point improvement compared to 5.41% for the same period a year ago. The improving trend in our net interest
margin continues to be impacted positively by the rising interest rate environment and the make up of our balance sheet, which is relatively "asset sensitive." By being "asset sensitive," we expect our rate sensitive assets (primarily our loan
portfolio) will re-price faster than our interest-sensitive liabilities (primarily interest-bearing deposits). Management anticipates 2005's full year tax equivalent net interest margin to fall within 15 basis points of 6.0% .

LOAN LOSS PROVISION- Charges made to the provision for loan losses for the nine months ended September 30, 2005 were $150,000 compared to $150,000 and $650,000,
respectively, for the three and nine-month periods ended September 30, 2004. There were no charges to the provision for loan losses for the quarters ended June 30, 2005 and September 30, 2005, and management does not currently anticipate recording
an additional provision during the 4thquarter of 2005. The reduction in charges made to the loan loss provision during the current year, compared to a year ago, is a
reflection of management's ongoing assessment of the Bank's loan portfolio quality and the sufficiency, as of September 30, 2005, of the allowance for loan losses, in addressing the risk for potential losses in the Bank's loan portfolio.
Contributing to management's assessment and decision to suspend the loan loss provision expense during the 2nd and 3rd quarters of 2005 is the Bank's $1.5 million, year-to-date, net loan loss recovery position that resulted primarily from one
previously announced large recovery that occurred during the 2ndquarter of 2005. The increase in non-performing loans during the 3rdquarter was primarily attributable to one loan, which management expects to resolve and have returned to a performing status prior to the end of the 4thquarter of 2005. Management believes that as of September 30, 2005, the balance in the Allowance for Loan Losses was reasonable and adequate.

NONINTEREST INCOME- Noninterest income represents service charges, fees, commissions and other income derived principally from general banking services, residential mortgage
brokerage activity, sales of investment and insurance products, and gains from the sale of investment securities and other assets. Total noninterest income increased approximately $168,000 (9.96%) and $548,000 (11.11%), respectively, for the
three and nine months ending September 30, 2005, as compared to the same periods in 2004.  The increases came generally from all categories of noninterest income and resulted from the Bank's internal growth.

NONINTEREST EXPENSE- Total noninterest expense increased approximately $979,000 (12.89%) and $3.3 million (15.66%), respectively, for the three and nine months ending
September 30, 2005, as compared to the corresponding periods in 2004. The overall increases in noninterest expense have been driven by internal growth and expansion into new markets and as a result are centered in higher levels of expense for
salaries and benefits and occupancy. Management believes that the implementation of our growth strategy, resulting in initially higher occupancy and personnel expenses as we enter new markets, will drive future earnings growth over time.

EFFICIENCY RATIO- The Company's efficiency ratio was 60.49% during the third quarter 2005 compared to 66.82% for the third quarter of 2004. The improvement in this key measure of
operating efficiency has been driven by the growth in our net interest income and gains in operating efficiency - both positively impacted by our successful integration of the acquired operations of Mid Valley Bank. The efficiency ratio for the
third quarter of 2005 reflected a 176 basis point improvement when compared to the 62.25% efficiency ratio achieved for the immediately preceding quarter ending June 30, 2005.  Management expects to drive further improvements in this ratio to below
60%.  However, the Bank's growth strategy may result in the temporary deterioration of the efficiency ratio in future periods as new facilities are brought on line necessitating the upfront investment in personnel and facility costs that precede
revenue-generating activities.

15

---

The table below sets forth certain summary balance sheet information for September 30, 2005 and December 31, 2004:

|(Dollars in 000's)            |  |              |  |             |  |   |                     |         | 
|----------------------------- |  | ------------ |  | ----------- |  | - | ------------------- | ------- | 
|                             
|                              |  |              |  |             |  |   | Increase (Decrease) |        
|                              |  | September 30 |  | December 31 |  |  
|                              |  | 2005         |  | 2004        |  |   | 9/30/05  12/31/04  |        
|                              |  |              |  |             |  |  
|(Dollars in 000's)            |  |              |  |             |  |   |                     |        
|                             
|ASSETS                        |  |              |  |             |  |   |                     |        
|Federal funds sold            |  | $ 3,055      |  | $ 15,350    |  | $ | (12,295)            | -80.10%
|Securities available for sale |  | 5,344        |  | 6,515       |  |   | (1,171)             | -17.97%
|Securities held to maturity   |  | 10,258       |  | 11,087      |  |   | (829)               | -7.48% 
|Federal Home Loan Bank        |  |              |  |             |  |   |                     |        
|deposits and stock            |  | 1,769        |  | 1,344       |  |   | 425                 | 31.62% 
|Loans, net                    |  | 765,327      |  | 679,127     |  |   | 86,200              | 12.69% 
|Other assets (1)              |  | 104,630      |  | 91,022      |  |   | 13,608              | 14.95% 
|                              |  |              |  |             |  |   |                     |        
|                             
|Total assets                  |  | $ 890,383    |  | $ 804,445   |  | $ | 85,938              | 10.68% 
|                              |  |              |  |             |  |   |                     |        
|                             
|LIABILITIES                   |  |              |  |             |  |   |                     |        
|Noninterest-bearing           |  |              |  |             |  |   |                     |        
|deposits                      |  | $ 207,223    |  | $ 183,845   |  | $ | 23,378              | 12.72% 
|Interest-bearing              |  |              |  |             |  |   |                     |        
|deposits                      |  | 559,027      |  | 505,140     |  |   | 53,887              | 10.67% 
|                              |  |              |  |             |  |   |                     |        
|                             
|Total deposits                |  | 766,250      |  | 688,985     |  |   | 77,265              | 11.21% 
|                             
|Other liabilities (2)         |  | 24,324       |  | 24,880      |  |   | (556)               | -2.23% 
|                              |  |              |  |             |  |   |                     |        
|                             
|Total liabilities             |  | 790,574      |  | 713,865     |  |   | 76,709              | 10.75% 
|                             
|SHAREHOLDERS                 |  |              |  |             |  |   |                     |        
|EQUITY                        |  | 99,809       |  | 90,580      |  |   | 9,229               | 10.19% 
|                              |  |              |  |             |  |   |                     |        
|                             
|Total liabilities             |  |              |  |             |  |   |                     |        
|and share-                    |  |              |  |             |  |   |                     |        
|holders equity               |  | $ 890,383    |  | $ 804,445   |  | $ | 85,938              | 10.68% 
|                              |  |              |  |             |  |   |                     |        

(1) Includes cash and due from banks, other equity investments, premises and equipment, goodwill, accrued interest receivable, bank-owned life insurance and other intangible assets (2) Includes borrowings, repurchase
agreements, accrued interest payable and other liabilities

FINANCIAL CONDITION -Total assets of $890.4 million at September 30, 2005 increased 10.68% over total assets of $804.4 million at December 31, 2004. The increase in assets
primarily resulted from an increase in net loans outstanding offset by decreases in federal funds sold and investment securities. Loans, net of allowance for loan losses and deferred fees, increased $86.2 million while fed funds sold decreased
$12.3 million and investment securities decreased $2.0 million.

Net loans, including loans held for sale, accounted for 85.95% of total assets at September 30, 2005 compared to 84.42% at December 31, 2004. As of September 30, 2005, the allowance for loan losses increased to $10.9
million from $9.2 million at December 31, 2004. This significant increase resulted primarily from the recovery, during the second quarter, of $1.5 million from a previously charged-off loan.  The Company's ratio of allowance for loan losses
to total loans was 1.40% at September 30, 2005, compared to 1.33% at December 31, 2004. Non-performing assets (defined as loans on non-accrual status, loans 90 days or more past due and other real estate owned), either specifically reserved or
adequately collateralized, were approximately $3.1 million at September 30, 2005 compared to $2.4 million as of December 31, 2004 - a slight deterioration resulting primarily from one loan placed on non-accrual during the quarter.
Management maintains and adheres to disciplined underwriting standards and has a proven track record for managing credit risk as well as identifying and aggressively administering problem loans.

Total deposits increased to $766.3 million at September 30, 2005, a $77.3 million or 11.21% increase compared to $689.0 million as of December 31, 2004. Net loan growth, on a year-to-date basis, has continued to
outpace our growth in deposits although the difference in rate of growth between loans and deposits narrowed in the third quarter partly the result of a concerted effort, through internal and external marketing campaigns initiated during the second
quarter, to attract more deposit volume. As of September 30, 2005 our loan-to-deposit ratio remained high at 99.88%, but reflected an improvement when compared to the ratio of 102.72% as of June 30, 2005. Management's desire is to maintain a
loan-to-deposit ratio at or below 100%. However, management is comfortable, in the short-term, with slightly exceeding a 100% loan-to-deposit ratio because the Bank's deposits are growing, albeit at a slower rate than loans, and because the deposit
mix has remained stable with respect to core and non-core deposits. As of September 30, 2005, our ratio of noninterest-bearing demand deposits to total deposits was 27.04% and our core deposit base, consisting of noninterest-bearing demand deposits,
interest-bearing demand deposits and regular savings, represented 72.42% of total deposits, while time deposits made up 27.58% of total deposits.  The Bank has not utilized brokered deposits as a source of funds, as a result, should

16

---

liquidity requirements dictate the need to grow deposits more rapidly, the Bank has flexibility in pricing its time deposits or in utilizing brokered deposit sources in order to more aggressively attract deposits at a
higher cost of funds.

Management closely monitors the Bank's liquidity needs and maintains the ability to borrow from the Federal Home Loan Bank of Seattle and other correspondent banks. For more information about liquidity, refer to the
Liquidity and Capital Resources section below.

LIQUIDITY AND CAPITAL RESOURCES

LIQUIDITY- Liquidity enables the Company to fund loan commitments and meet customer withdrawals of deposits. The Company maintains its liquidity position through maintenance of cash
resources, the stability of and growth in its core deposit base and through its ability to borrow funds from committed sources of credit.  The Bank's liquidity position improved during the quarter ended September 30, 2005 as deposit volume increased
relative to loan volume with core deposits as a percentage of total deposits remaining a relatively stable 72.42% of total deposits. As a result, the Bank's loan-to-deposit ratio fell to 99.88% at September 30, 2005 from 102.72% as of June 30, 2005.
The increase in deposits during the quarter was sufficient to pay off $25.0 million of short-term borrowings that were outstanding as of June 30, 2005 with $3.1 million of excess cash invested in Fed Funds Sold as of September 30, 2005
compared to $15.4 million in Fed Funds Sold as of December 31, 2004.

Management maintains contingency plans for addressing the Bank's ongoing liquidity needs and presently believes the Bank's stable core deposit base provides for flexibility and opportunity should management decide to
attract deposits more aggressively by increasing the rate of interest offered on deposits - particularly certificates of deposit. Management has also identified certain loans where a portion of the outstanding balance could be "sold" to a
participant bank to provide additional cash for liquidity purposes. Further, should loan demand outpace our ability to gather sufficient deposits or maintain adequate funding from other borrowings, the Company could cause loan growth to decrease
through higher pricing strategies. Presently, the Company maintains a secured line-of-credit with the FHLB for up to 10% of the Bank's total assets. As of September 30, 2005, the Bank had $1.9 million of long-term and no short-term borrowings
advanced from the FHLB with the immediate availability for an additional $44.8 million under the Company's credit line.  The Company also has unsecured "fed funds" credit lines for up to $105.0 million through certain correspondent banks and
a $1.0 million secured line of credit through the Federal Reserve Bank of San Francisco. As of September 30, 2005, there were no outstanding borrowings against these credit lines.

At September 30, 2005, the Company had approximately $177.6 million in outstanding commitments to extend credit for newly approved loans and construction projects. Under the terms of construction project commitments,
completion of specified project benchmarks must be certified before funds may be drawn.  Additionally, it is anticipated that a portion of these commitments will expire or terminate without funding. Management believes that the Company's available
resources will be sufficient to fund these commitments in the normal course of business.

CAPITAL RESOURCES- Federal regulators require the measurement of various capital ratios, including risk-based capital measurements. Risk-weighted ratios require an analysis that
weights balance sheet and off-balance sheet items for their inherent risk.  It requires minimum standards, by capital tier, for risk-based capital. As a minimum requirement, the total risk-based capital ratio should be at least 8.00%, the Tier 1
capital ratio should be at least 4.00%, and the leverage capital ratio should be at least 4.00% . At September 30, 2005, the Company's regulatory capital ratios were as follows: total risk-based capital ratio of 12.04%, Tier 1 capital ratio of
10.79%, and a leverage capital ratio of 10.67% . If the Company achieved only minimum regulatory capital levels, further growth could be restricted to the level attainable through generation and retention of net income or the Company may find it
necessary to seek additional capital from outside sources.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss from adverse changes in market prices and rates. The Company's market risk arises principally from interest rate risk in its lending, deposit and borrowing activities. Management actively
monitors and manages its interest rate risk exposure. Although the Company manages other risks, such as credit quality and liquidity risk, in the normal course of business, management considers interest rate risk to be a significant market risk,
which could have the largest material effect on the Company's financial condition and results of operations. Other types of market risks, such as foreign currency exchange rate risk and commodity price risk, do not arise in the normal course of the
Company's business activities. The Company did not experience a significant change in market risk at September 30, 2005 as compared to December 31, 2004.

As stated in the annual report on Form 10-K for 2004, the Company attempts to monitor interest rate risk from the perspective of changes in the economic value of equity, also referred to as net portfolio value (NPV), and
changes in net interest income. Changes to the NPV and net interest income are simulated using instant and permanent rate shocks of plus and minus 200 basis points, in increments of 50 basis points. It is the Company's policy to manage interest rate
risk to maximize long-term profitability under the range of likely interest-rate scenarios. For additional information, refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" referenced in the Company's
annual report on Form 10-K for the year ended December 31, 2004.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, the Company conducted an evaluation, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, of our disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")). Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective for ensuring that all material information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the
time periods specified in the SEC's rules and forms, and that such information has been accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding the disclosures required under the Exchange Act.

There was no change in our internal control over financial reporting during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over
financial reporting.

17

---

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS-From time to time, in the normal course of business, PremierWest may
become party to various legal actions. Generally, these actions are not expected to have a material adverse impact on our business, financial condition or results of operations. Litigation matters that have been reported previously have been
resolved or, in the opinion of management, are not expected to have a material adverse impact on the financial condition or results of operations for the Company.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

|(a) | [Not applicable.]
|--- | -----------------
|   
|(b) | [Not applicable.]
|   
|(c) | [Not applicable.]
|   

|ITEM 3. DEFAULTS UPON SENIOR SECURITIES
|---------------------------------------

|(a) | [Not applicable.]
|--- | -----------------
|   
|(b) | [Not applicable.]
|   

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

No matters were submitted to a vote of securities holders of PremierWest during the quarter ended September 30, 2005.

ITEM 5. OTHER INFORMATION

[None.]

ITEM 6. EXHIBITS

|(a) | Exhibits                                                                                                                                                                     
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | 31.1      Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) and Section 302 of the Sarbanes- Oxley Act of 2002.                          
|   
|    | 31.2       Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) and Section 302 of the Sarbanes- Oxley Act of 2002.                         
|   
|    | 32.1
Certification of Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 906 of the Sarbanes- Oxley Act of 2002, 18 U.S.C. Section 1350.       
|   
|    | 32.2        Certification of Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 906 of the Sarbanes- Oxley Act of 2002, 18 U.S.C. Section 1350.
|   

18

---

SIGNATURES: Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

| | DATED: October 25, 2005PREMIERWEST BANCORP
| | ------------------------------------------

|/s/ John L. Anhorn                                             
|---------------------------------------------------------------
|John L. Anhorn, President and Chief Executive Officer          
|                                                               
|/s/ Tom Anderson                                               
|Tom Anderson, Senior Vice-President and Chief Financial Officer

19

---

---