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SECURITIES AND EXCHANGE COMMISSION 
Washington, D. C. 20549

FORM 10-Q

(Mark One)

/X/ Quarterly Report Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

For the quarterly period ended June 30, 2004
--------------

OR

/ / Transition Report Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

For the transition period from	_______ to





_______

Commission File Number 000-50332
-----------

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

OREGON
	
	93-1282171(State of Incorporation)
	
	(I.R.S. EmployerIdentification Number)


503 Airport Road 
P.O. Box 40 
Medford, 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:

14,566,033 shares as of July 30, 2004

1

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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 our ability to effectively integrate our merger with Mid Valley Bank; factors that might increase the costs or delay or diminish the expected benefits of that merger; 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.

2

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Form 10-Q Table of Contents

Part I
	
	FINANCIAL INFORMATIONItem 1.
	
	Financial Statements
	
	4Item 2.
	
	Management's Discussion and Analysis of Financial Condition and Results of Operations
	
	14Item 3.
	
	Quantitative and
 Qualitative Disclosures About Market Risk
	
	19Item 4.
	
	Controls and Procedures
	
	19Part II
	
	OTHER INFORMATIONItem 1.
	
	Legal Proceedings
	
	20Item 2.
	
	Changes in Securities and Use of Proceeds
	
	20Item 3.
	
	Defaults Upon Senior Securities
	
	20Item 4.
	
	Submission of Matters to a Vote of Securities Holders
	
	20Item 5.
	
	Other Information
	
	20Item 6.
	
	Exhibits and Reports on Form 8-K
	
	21SIGNATURES
	
	22


3

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

PREMIERWEST BANCORP AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Dollars in 000s)

ASSETS

(Unaudited)
	
	
	
	(Audited)June 30,
	
	
	
	December 31,2004
	
	
	
	2003Cash and cash equivalents:Cash and due from banks
	
	
	$
	34,661
	
	
	$
	18,949Federal funds sol d
	
	
	
	40,650
	
	
	
	31,400Total cash and cash equivalents
	
	
	
	75,311
	
	
	
	50,349Interest-bearing deposits with Federal Home Loan Bank
	
	
	
	28
	
	
	
	5Investments:Investment securities available-for-sale, at fair market value
	
	
	
	23,183
	
	
	
	23,351Federal Home Loan Bank stock
	
	
	
	1,828
	
	
	
	1,792Other equity investments
	
	
	
	277
	
	
	
	5Total Investments
	
	
	
	25,288
	
	
	
	25,148Loans, net of allowance for loan losses and deferred loan fees
	
	
	
	604,707
	
	
	
	452,972Premises and equipment, net of accumulated depreciationand amortization
	
	
	
	26,154
	
	
	
	21,784Goodwill, net of amortization
	
	
	
	20,079
	
	
	
	6,633Accrued interest and other assets
	
	
	
	24,003
	
	
	
	14,430TOTAL ASSETS
	
	$
	
	775,570
	
	$
	
	571,321LIABILITIES AND SHAREHOLDERS' EQUITYLIABILITIESDeposits:Non-interest-bearing demand
	
	
	$
	169,986
	
	
	$
	121,467Savings and interest-bearing demand
	
	
	
	307,566
	
	
	
	227,267Time
	
	
	
	182,878
	
	
	
	127,012Total deposits
	
	
	
	660,430
	
	
	
	475,746Federal Home Loan Bank borrowings
	
	
	
	22,738
	
	
	
	23,058Securities sold under agreements to repurchase
	
	
	
	264
	
	
	
	3,401Accrued interest and other liabilities
	
	
	
	6,988
	
	
	
	4,365Total liabilities
	
	
	
	690,420
	
	
	
	506,570COMMITMENTS AND CONTINGENCIES (Note 6)SHAREHOLDERS' EQUITYSeries A Preferred Stock, no par value, 1,000,000 sharesauthorized, 11,000 shares issued and outstanding
	
	
	
	9,590
	
	
	
	9,590Common stock - no par value; 20,000,000 shares authorized;and 14,564,354 and 12,162,026 shares issued and outstandingin 2004 and 2003, respectively
	
	
	
	62,213
	
	
	
	38,260Retained earnings
	
	
	
	13,192
	
	
	
	16,463Accumulated other comprehensive income, net of taxes
	
	
	
	155
	
	
	
	438Total shareholders' equity
	
	
	
	85,150
	
	
	
	64,751TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
	
	
	$
	775,570
	
	
	$
	571,321


See accompanying notes.

4

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PREMIERWEST BANCORP AND SUBSIDIARY 
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in 000s, Except for Earnings per Share Data) 
(UNAUDITED)

FOR THE THREE MONTHS ENDED
	
	
	
	FOR THE SIX MONTHS ENDEDJune 30,
	
	June 30,
	
	
	
	June 30,
	
	June 30,2004
	
	2003
	
	
	
	2004
	
	2003INTEREST AND DIVIDEND INCOMEInterest and fees on loans
	
	
	$
	9,994
	$
	7,420
	
	
	$
	19,049
	$
	14,753Taxable interest on investment securities
	
	
	
	81
	
	205
	
	
	
	250
	
	450Nontaxable interest on investment securities
	
	
	
	129
	
	155
	
	
	
	280
	
	318Interest on federal funds sold
	
	
	
	120
	
	120
	
	
	
	246
	
	201Dividends on Federal Home Loan Bank stockan d other equity investments
	
	
	
	22
	
	23
	
	
	
	41
	
	51Total interest and dividend income
	
	
	
	10,346
	
	7,923
	
	
	
	19,866
	
	15,773INTEREST EXPENSEInterest-bearing demand and savings
	
	
	
	491
	
	439
	
	
	
	935
	
	875Time
	
	
	
	924
	
	1,018
	
	
	
	1,853
	
	2,102Federal funds purchased and securities sold underagreements to repurchase
	
	
	
	2
	
	23
	
	
	
	5
	
	45Federal Home Loan Bank and other borrowings
	
	
	
	179
	
	206
	
	
	
	360
	
	414Total interest expense
	
	
	
	1,596
	
	1,686
	
	
	
	3,153
	
	3,436NET INTEREST INCOME
	
	
	
	8,750
	
	6,237
	
	
	
	16,713
	
	12,337LOAN LOSS PROVISION
	
	
	
	200
	
	300
	
	
	
	500
	
	600Net interest income after loan loss provision
	
	
	
	8,550
	
	5,937
	
	
	
	16,213
	
	11,737NONINTEREST INCOMEService charges on deposits accounts
	
	
	
	663
	
	535
	
	
	
	1,253
	
	936Mortgage loan brokerage and other fees
	
	
	
	326
	
	519
	
	
	
	579
	
	973Investment brokerage and annuity fees
	
	
	
	243
	
	199
	
	
	
	500
	
	372Other commissions and fees
	
	
	
	316
	
	206
	
	
	
	614
	
	402Gains on sales of investment securities, net
	
	
	
	1
	
	11
	
	
	
	1
	
	26Other noninterest income
	
	
	
	147
	
	106
	
	
	
	300
	
	223Total noninterest income
	
	
	
	1,696
	
	1,576
	
	
	
	3,247
	
	2,932NONINTEREST EXPENSESalaries and employee benefits
	
	
	
	3,958
	
	2,958
	
	
	
	7,705
	
	6,070Net occupancy and equipment
	
	
	
	1,263
	
	982
	
	
	
	2,429
	
	1,977Communications
	
	
	
	372
	
	284
	
	
	
	694
	
	520Professional fees
	
	
	
	254
	
	151
	
	
	
	428
	
	275Advertising
	
	
	
	231
	
	166
	
	
	
	396
	
	292Other
	
	
	
	1,029
	
	682
	
	
	
	1,929
	
	1,368Total noninterest expense
	
	
	
	7,107
	
	5,223
	
	
	
	13,581
	
	10,502INCOME BEFORE PROVISION FOR INCOME TAXES
	
	
	
	3,139
	
	2,290
	
	
	
	5,879
	
	4,167PROVISION FOR INCOME TAXES
	
	
	
	1,036
	
	769
	
	
	
	1,940
	
	1,398NET INCOME
	
	
	$
	2,103
	$
	1,521
	
	
	$
	3,939
	$
	2,769Earnings per common share:Basic
	
	
	$
	0.14
	$
	0.12
	
	
	$
	0.27
	$
	0.22Diluted
	
	
	$
	0.13
	$
	0.12
	
	
	$
	0.25
	$
	0.22


See accompanying notes.

5

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PREMIERWEST BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
(Dollars in 000s) 
(UNAUDITED)

AccumulatedUnearned
	
	
	
	Other
	
	
	
	TotalPreferred Stock
	
	Common Stock
	
	Retained
	
	ESOP
	
	
	
	Comprehensive
	
	
	
	Shareholders'
	
	ComprehensiveShares
	
	Amount
	
	Shares
	
	Amount
	
	Earnings
	
	Compensation
	
	
	
	Income
	
	
	
	Equity
	
	Income(in thousands, except share amounts)BALANCE - JANUARY 1, 2003
	
	-
	$
	-
	
	11,567,559
	$
	33,875
	
	
	$
	14,772
	$
	(16)
	
	
	$
	541
	
	
	$
	49,172Comprehensive income:Net income
	
	
	
	
	
	
	
	-
	
	
	
	2,769
	
	-
	
	
	
	-
	
	
	
	2,769
	
	$ 2,769Unrealized gainson investment securitiesavailable-for-sale of $124(net of taxes of $62)
	
	-
	
	-
	
	-
	
	-
	
	
	
	-
	
	-
	
	
	
	124
	
	
	
	124
	
	124Reclassification adjustmentfor net gains on sales ofinvestment securitiesavailable-for-sale included innet income of $17 (net oftaxes of $9)
	
	-
	
	-
	
	-
	
	-
	
	
	
	-
	
	-
	
	
	
	(17)
	
	
	
	(17)
	
	(17)Comprehensive income
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	$ 2,876Stock dividend paid (5%)
	
	-
	
	-
	
	578,200
	
	4,311
	
	
	
	(4,311)
	
	-
	
	
	
	-
	
	
	
	-ESOP compensation expense
	
	-
	
	-
	
	-
	
	5
	
	
	
	-
	
	16
	
	
	
	-
	
	
	
	21Stock options exercised
	
	-
	
	-
	
	6,131
	
	14
	
	
	
	-
	
	-
	
	
	
	-
	
	
	
	14Income tax benefit of stock optionsexercised
	
	-
	
	-
	
	-
	
	10
	
	
	
	-
	
	-
	
	
	
	-
	
	
	
	10BALANCE - JUNE 30, 2003
	
	-
	$
	-
	
	12,151,890
	$
	38,215
	
	
	$
	13,230
	$
	-
	
	
	$
	648
	
	
	$
	52,093BALANCE - JANUARY 1, 2004
	
	11,000
	$
	9,590
	
	12,162,026
	$
	38,260
	
	
	$
	16,463
	$
	-
	
	
	$
	438
	
	
	$
	64,751Comprehensive income:Net income
	
	-
	
	-
	
	-
	
	-
	
	
	
	3,939
	
	-
	
	
	
	-
	
	
	
	3,939
	
	$ 3,939Unrealized losseson investment securitiesavailable-for-sale of $283(net of taxes of $143)
	
	-
	
	-
	
	-
	
	-
	
	
	
	-
	
	-
	
	
	
	(283)
	
	
	
	(283)
	
	(283)Comprehensive income
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	$ 3,656Common stock issued toshareholders ofMid Valley Bank
	
	-
	
	-
	
	1,697,473
	
	16,805
	
	
	
	-
	
	-
	
	
	
	-
	
	
	
	16,805Preferred stock dividend declared
	
	-
	
	-
	
	-
	
	-
	
	
	
	(138)
	
	-
	
	
	
	-
	
	
	
	(138)Stock dividend paid (5%)
	
	-
	
	-
	
	692,698
	
	7,072
	
	
	
	(7,072)
	
	-
	
	
	
	-
	
	
	
	-Stock options exercised
	
	-
	
	-
	
	12,157
	
	60
	
	
	
	-
	
	-
	
	
	
	-
	
	
	
	60Income tax benefit of stock optionsexercised
	
	-
	
	-
	
	-
	
	16
	
	
	
	-
	
	-
	
	
	
	-
	
	
	
	16BALANCE - JUNE 30, 2004
	$
	11,000
	$
	9,590
	$
	14,564,354
	$
	62,213
	
	
	$
	13,192
	$
	-
	
	
	$
	155
	
	
	$
	85,150


See accompanying notes.

6

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PREMIERWEST BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in 000s) 
(UNAUDITED)

|                                                                      |  |  |   |                          |  |  |   |         
|--------------------------------------------------------------------- |  |  | - | ------------------------ |  |  | - | --------
|                                                                      |  |  |   | FOR THE SIX MONTHS ENDED
|                                                                      |  |  |   |                         
|                                                                      |  |  |   | June 30,                 |  |  |   | June 30,
|                                                                      |  |  |   | 2004                     |  |  |   | 2003    
|                                                                      |  |  |   |                          |  |  |   |         
|CASH FLOWS FROM OPERATING ACTIVITIES:                                 |  |  |   |                          |  |  |   |         
|Net income                                                            |  |  | $ | 3,939                    |  |  | $ | 2,769   
|Adjustments to reconcile net income to net cash                       |  |  |   |                          |  |  |   |         
|from operating activities:                                            |  |  |   |                          |  |  |   |         
|Depreciation and amortization                                         |  |  |   | 1,198                    |  |  |   | 939     
|Amortization of premiums                                              |  |  |   |                          |  |  |   |         
|on investment securities, net                                         |  |  |   | 82                       |  |  |   | 2       
|Dividends on Federal Home Loan Bank stock                             |  |  |   | (36)                     |  |  |   | (51)    
|Gains on sales of investment securities available-for-sale, net       |  |  |   | (1)                      |  |  |   | (26)    
|Deferred income taxes                                                 |  |  |   | (399)                    |  |  |   | 66      
|Income tax benefit of stock options exercised                         |  |  |   | 16                       |  |  |   | 10      
|Gains on sales of premises and equipment                              |  |  |   | (7)                      |  |  |   | (15)    
|Loan loss provision                                                   |  |  |   | 500                      |  |  |   | 600     
|Recognition of deferred compensation relating to ESOP                 |  |  |   | -                        |  |  |   | 21      
|Decrease in accrued interest and other assets                         |  |  |   | 198                      |  |  |   | 202     
|(Decrease) increase in accrued interest and other liabilities         |  |  |   | (607)                    |  |  |   | 1,131   
|                                                                      |  |  |   |                          |  |  |   |         
|                                                                     
|Net cash from operating activities                                    |  |  |   | 4,883                    |  |  |   | 5,648   
|                                                                      |  |  |   |                          |  |  |   |         
|                                                                     
|CASH FLOWS FROM INVESTING ACTIVITIES:                                 |  |  |   |                          |  |  |   |         
|Purchases of investment securities available-for-sale                 |  |  |   | -                        |  |  |   | (5,989) 
|Proceeds from sales of investment securities available-for-sale       |  |  |   | 38,566                   |  |  |   | 1,024   
|Proceeds from calls and maturities of investment                      |  |  |   |                          |  |  |   |         
|securities available-for-sale                                         |  |  |   | 10,200                   |  |  |   | 19,335  
|Proceeds from redemption of Federal Reserve Bank                      |  |  |   |                          |  |  |   |         
|and Federal Home Loan Bank stock                                      |  |  |   | 340                      |  |  |   | -       
|Increase in interest-bearing deposit with                             |  |  |   |                          |  |  |   |         
|Federal Home Loan Bank                                                |  |  |   | (23)                     |  |  |   | (3,188) 
|Increase (decrease) in other investments                              |  |  |   | 5                        |  |  |   | (20)    
|Loan originations, net                                                |  |  |   | (50,811)                 |  |  |   | (14,137)
|Proceeds from sale of premises and equipment                          |  |  |   | 40                       |  |  |   | 17      
|Purchase of premises and equipment                                    |  |  |   | (1,490)                  |  |  |   | (945)   
|Cash and cash equivalents received in acquisition of Mid Valley Bank, |  |  |   |                          |  |  |   |         
|net of cash paid of $9,813 and acquisition costs of $627              |  |  |   | 6,817                    |  |  |   | -       
|                                                                      |  |  |   |                          |  |  |   |         
|                                                                     
|Net cash from investing activities                                    |  |  |   | 3,644                    |  |  |   | (3,903) 
|                                                                      |  |  |   |                          |  |  |   |         
|                                                                     
|CASH FLOWS FROM FINANCING ACTIVITIES:                                 |  |  |   |                          |  |  |   |         
|Net increase in deposits                                              |  |  |   | 19,832                   |  |  |   | 23,033  
|Net decrease in Federal Home Loan Bank borrowings                     |  |  |   | (320)                    |  |  |   | (441)   
|Net decrease in securities sold under agreements to repurchase        |  |  |   | (3,137)                  |  |  |   | (864)   
|Net decrease in ESOP notes payable                                    |  |  |   | -                        |  |  |   | (16)    
|Proceeds from exercise of stock options                               |  |  |   | 60                       |  |  |   | 14      
|                                                                      |  |  |   |                          |  |  |   |         
|Net cash from financing activities                                    |  |  |   | 16,435                   |  |  |   | 21,726  
|                                                                      |  |  |   |                          |  |  |   |         
|INCREASE IN CASH AND CASH EQUIVALENTS                                 |  |  |   | 24,962                   |  |  |   | 23,471  
|CASH AND CASH EQUIVALENTS - Beginning of the period                   |  |  |   | 50,349                   |  |  |   | 41,437  
|                                                                      |  |  |   |                          |  |  |   |         
|CASH AND CASH EQUIVALENTS - End of the period                         |  |  | $ | 75,311                   |  |  | $ | 64,908  
|                                                                      |  |  |   |                          |  |  |   |         
|                                                                     
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                     |  |  |   |                          |  |  |   |         
|Cash paid for interest                                                |  |  | $ | 3,065                    |  |  | $ | 3,496   
|                                                                      |  |  |   |                          |  |  |   |         
|Cash paid for taxes                                                   |  |  | $ | 930                      |  |  | $ | 782     
|                                                                      |  |  |   |                          |  |  |   |         
|                                                                     
|SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND                      |  |  |   |                          |  |  |   |         
|FINANCING ACTIVITIES:                                                 |  |  |   |                          |  |  |   |         
|Transfer of loans to other real estate owned                          |  |  | $ | 34                       |  |  | $ | 570     
|                                                                      |  |  |   |                          |  |  |   |         
|Preferred stock dividend declared                                     |  |  | $ | 138                      |  |  | $ | -       
|                                                                      |  |  |   |                          |  |  |   |         

See accompanying notes.

7

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PREMIERWEST BANCORP AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

June 30, 2004

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.

On January 23, 2004, the Company completed its acquisition of Mid Valley Bank ("MVB"). Mid Valley Bank, with nearly $177 million in assets at acquisition, consists of 5 branch locations in the northern California
communities of Red Bluff, Redding, Corning and Chico.  The combined institution benefits the customers of Mid Valley Bank by providing an expanded array of financial products and services that the larger organization can provide, while also
solidifying the presence of PremierWest Bank in the northern California market. Internal system integration was completed in mid-May and as of July 1, 2004 all signage at the five Mid Valley Bank branches had been changed to PremierWest Bank. The
acquisition was accounted for using the purchase method of accounting. Accordingly, assets and liabilities of MVB have been recorded by the Company at their respective fair values at the time of the completion of the merger and the results of MVB
have been included with those of the Company since the date of acquisition. The effects of the business acquisition are further described in Note 2.

The Bank has conducted a general banking business operating primarily in Jackson, Josephine, Douglas, and Klamath counties of southern Oregon, and Siskiyou and Shasta counties of northern California. With the acquisition of
MVB, the Bank also now operates in Tehama and Butte counties of northern California. Its activities include the usual lending and deposit functions of a commercial bank - commercial, real estate, installment, and mortgage loans; checking, time
deposit, and savings accounts; mortgage loan brokerage services; and 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. 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.

The balance sheet data as of December 31, 2003 was derived from audited financial statements and does not include all disclosures contained in the 2003 Annual Report to Shareholders. The interim consolidated financial
statements should be read in conjunction with the Company's 2003 consolidated financial statements, including the notes thereto, included in the 2003 Annual Report to Shareholders. 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 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 2003 Annual Report on Form 10-K. We believe that the judgments and 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.

Dividends declared- On March 1, 2004, the Company declared a 5% common stock dividend payable on June 21, 2004 to its May 28, 2004 common shareholders of record. On March 27, 2003,
the Company declared a 5% common stock dividend payable on June 20, 2003 to its May 30, 2003 common shareholders of record. Share and per share data for 2003 in the accompanying consolidated financial statements have been retroactively restated to
reflect the common stock dividends.

On March 25, 2004 the Company declared a quarterly $6.25 per share cash dividend payable on December 15, 2004 to its December 1, 2004 preferred shareholders of record.

8

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PREMIERWEST BANCORP AND SUBSIDIARY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

June 30, 2004

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 six months ended June 30, 2004 and 2003 resulted in an estimated weighted-average grant date fair value of $3.29 and $1.97 for the three
and six months ended June 30, 2004 and 2003. Had compensation costs been determined consistent with SFAS 123, the Company's net income and earnings per common share, and diluted earnings per common share for the quarter and six months ended June 30,
2004 and 2003 would have been as follows: (Dollar in 000s, except per share amounts)

FOR THE THREE MONTHS ENDED
	
	
	
	FOR THE SIX MONTHS ENDEDJune 30, 2004
	
	
	
	June 30, 2003
	
	
	
	June 30, 2004
	
	
	
	June 30, 2003Net income:As reported
	
	
	$
	2,103
	
	
	$
	1,521
	
	
	$
	3,939
	
	
	$
	2,769Fair value of stock-basedcompensation cost, net of tax
	
	
	$
	(24)
	
	
	$
	(41)
	
	
	$
	(33)
	
	
	$
	(41)Pro forma net income
	
	
	$
	2,079
	
	
	$
	1,480
	
	
	$
	3,906
	
	
	$
	2,728Basic earnings per common share:As reported
	
	
	$
	0.14
	
	
	$
	0.12
	
	
	$
	0.27
	
	
	$
	0.22Pro forma
	
	
	$
	0.14
	
	
	$
	0.12
	
	
	$
	0.27
	
	
	$
	0.22Diluted earnings per share:As reported
	
	
	$
	0.13
	
	
	$
	0.12
	
	
	$
	0.25
	
	
	$
	0.22Pro forma
	
	
	$
	0.13
	
	
	$
	0.12
	
	
	$
	0.25
	
	
	$
	0.22


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 June 30, 2004 and 2003:

FOR THE THREE MONTHS ENDED
	
	FOR THE SIX MONTHS ENDEDJune 30, 2004
	
	June 30, 2003
	
	June 30, 2004
	
	June 30, 2003Dividend yield
	
	5.0%
	
	5.0%
	
	5.0%
	
	5.0%Expected life (years)
	
	7.75 years
	
	7-8 years
	
	7.75 years
	
	7-8 yearsExpected volatility
	
	40%
	
	44%
	
	40%
	
	44%Risk-free rate
	
	3.4%
	
	3.3%
	
	3.4%
	
	3.3%


NOTE 2 - ACQUISITION OF MID VALLEY BANK

On January 23, 2004, the Company completed the acquisition of Mid Valley Bank (MVB). To complete its acquisition, the Company issued 1,697,473 shares of its common stock valued at $16,804,990 and $9,812,956 in cash to
shareholders of MVB. The acquisition has been accounted for using the purchase method of accounting. Accordingly, the assets and liabilities of MVB have been recorded by the Company at their respective fair values at the time of the completion of
the transaction and the results of MVB have been included with those of the Company since acquisition. The excess of the Company's purchase price of MVB over the estimated net fair value of the assets acquired and the liabilities assumed, including
identifiable intangible assets, is reported as goodwill.

9

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PREMIERWEST BANCORP AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

June 30, 2004

The estimated fair values of net assets acquired at the acquisition date remain preliminary as of the date of these financial statements and are summarized as follows: (Dollars in 000's)

|                                        |  |   |  |        
|--------------------------------------- |  | - |  | -------
|ASSETS                                  |  |   |  |        
|Cash and due from banks                 |  | $ |  | 11,092 
|Federal funds sold                      |  |   |  | 6,165  
|Investment securities                   |  |   |  | 49,755 
|Loans, net of allowance for loan losses |  |   |  | 101,458
|Property and equipment                  |  |   |  | 4,105  
|Other assets                            |  |   |  | 22,888 
|                                        |  |   |  |        
|Total assets acquired                   |  | $ |  | 195,463
|                                        |  |   |  |        
|LIABILITIES                             |  |   |  |        
|Deposits                                |  | $ |  | 165,126
|Other liabilities                       |  |   |  | 1,526  
|                                        |  |   |  |        
|Total liabilities assumed               |  |   |  | 166,652
|Net assets acquired                     |  |   |  | 28,811 
|                                        |  |   |  |        
|                                        |  | $ |  | 195,463
|                                        |  |   |  |        

Component cost to the Company for the net assets acquired were as follows: (Dollars in 000's)

|                                                                  |  |   |  |       
|----------------------------------------------------------------- |  | - |  | ------
|Fair value of common stock issued to Mid Valley Bank shareholders |  | $ |  | 16,805
|Cash paid to Mid Valley Bank shareholders                         |  |   |  | 9,813 
|Direct transaction costs incurred                                 |  |   |  | 627   
|Restructuring charges in the form of severance and other payments |  |   |  | 1,566 
|                                                                  |  |   |  |       
|                                                                 
|Net assets acquired                                               |  | $ |  | 28,811
|                                                                  |  |   |  |       

The direct transaction costs included in the above schedule involve expenses incurred primarily for legal, accounting, and investment banking services related to the business acquisition. Restructuring charges primarily
include severance costs for the termination of personnel and charges for the discontinuance of contract activities for which management has established a plan that will be executed in 2004. Some of these restructuring charges are presently being
negotiated by management and may ultimately result in an adjustment to the preliminary valuation of goodwill.

During the quarter ending June 30, 2004, adjustments to the initial fair market value of assets acquired were made to reflect a $154,000 increase to investment securities and $288,000 increase to property and equipment
based on a final fair value assessment.  In addition, increases of $197,000 were made to restructuring charges for additional severance and other accruals and $14,000 was accrued for direct transaction costs associated with accounting and legal
services relating to the acquisition.  Each of the these adjustments resulted in an adjustment to the recorded value of goodwill.

The following reconciles the activity affecting the liability for restructure related charges:

|                                                             |  |   |  |      
|------------------------------------------------------------ |  | - |  | -----
|Restructuring charges liability balance as of March 31, 2004 |  | $ |  | 1,368
|Payments made for restructuring charges                      |  |   |  | (460)
|Adjustments made to increase restructuring charge liability  |  |   |  | 197  
|                                                             |  |   |  |      
|Restructuring charges liability balance as of June 30, 2004  |  | $ |  | 1,105
|                                                             |  |   |  |      

10

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PREMIERWEST BANCORP AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

June 30, 2004

The following pro forma information represents the Company's consolidated results of operation as if the acquisition of MVB had occurred at the beginning of the earliest period presented. The pro forma information does not
purport to be indicative of the actual results of operations that would have occurred had the transaction taken place at the beginning of the periods presented or of future results of operations.  Management of the Company anticipates that
significant cost savings and operational synergies will be realized when the operations of Mid Valley Bank are fully integrated in 2004.

(Dollars in 000's, except earnings per share)Three months ended June 30,
	
	
	
	Six months ended June 30,2004
	
	
	
	2003
	
	
	
	2004
	
	
	
	2003Total interest and noninterest income
	
	
	$
	12,042
	
	
	$
	12,098
	
	
	$
	23,743
	
	
	$
	24,018Net income
	
	
	$
	2,103
	
	
	$
	1,812
	
	
	$
	3,756
	
	
	$
	3,386Basic earnings per common share
	
	
	$
	0.14
	
	
	$
	0.12
	
	
	$
	0.26
	
	
	$
	0.23Diluted earnings per common share
	
	
	$
	0.13
	
	
	$
	0.12
	
	
	$
	0.24
	
	
	$
	0.23Basic shares outstanding
	
	
	
	14,563,273
	
	
	
	14,535,571
	
	
	
	14,521,577
	
	
	
	14,535,798Diluted shares outstanding
	
	
	
	15,761,146
	
	
	
	14,623,886
	
	
	
	15,716,284
	
	
	
	14,570,987


NOTE 3 - INVESTMENT SECURITIES AVAILABLE-FOR-SALE

Investment securities available-for-sale at June 30, 2004 and December 31, 2003 consisted of the following: (Dollars in 000's)

2004Gross
	
	Gross
	
	
	
	EstimatedAmortized
	
	
	
	unrealized
	
	unrealized
	
	
	
	faircost
	
	
	
	gains
	
	losses
	
	
	
	valueU.S. Government and agency securities
	$
	7,671
	
	
	$
	-
	$
	(91)
	
	
	$
	7,580Mortgage-backed securities and collateralizedmortgage obligations
	
	518
	
	
	
	9
	
	(3)
	
	
	
	524Obligations of states and political subdivisions
	
	12,393
	
	
	
	312
	
	(29)
	
	
	
	12,676Corporate bonds
	
	2,001
	
	
	
	52
	
	-
	
	
	
	2,053Equity securities
	
	350
	
	
	
	-
	
	-
	
	
	
	350Total
	$
	22,933
	
	
	$
	373
	$
	(123)
	
	
	$
	23,1832003Gross
	
	Gross
	
	
	
	EstimatedAmortized
	
	
	
	unrealized
	
	unrealized
	
	
	
	faircost
	
	
	
	gains
	
	losses
	
	
	
	valueU.S. Government and agency securities
	$
	3,997
	
	
	$
	48
	$
	-
	
	
	$
	4,045Mortgage-backed securities and collateralizedmortgage obligations
	
	595
	
	
	
	12
	
	(2)
	
	
	
	605Obligations of states and political subdivisions
	
	13,747
	
	
	
	554
	
	-
	
	
	
	14,301Corporate bonds
	
	3,957
	
	
	
	98
	
	-
	
	
	
	4,055Equity securities
	
	345
	
	
	
	-
	
	-
	
	
	
	345Total
	$
	22,641
	
	
	$
	712
	$
	(2)
	
	
	$
	23,351


At June 30, 2004, $18.7 million in investment securities available-for-sale were pledged to secure public deposits, certain nonpublic deposits, and borrowings.

11

---

PREMIERWEST BANCORP AND SUBSIDIARY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

June 30, 2004

NOTE 4-LOANS, NON-PERFORMING ASSETS AND ALLOWANCE FOR LOAN LOSSES

Loans as of June 30, 2004 and December 31, 2003 consisted of the following: (Dollars in 000's)

2004
	
	
	
	2003Real estate-commercial
	
	$
	339,413
	
	
	$
	284,881Real estate-construction
	
	
	112,975
	
	
	
	54,900Real estate-residential
	
	
	5,467
	
	
	
	3,170Commercial
	
	
	82,263
	
	
	
	60,598Agricultural
	
	
	20,909
	
	
	
	12,310Consumer
	
	
	44,128
	
	
	
	34,273Other
	
	
	10,134
	
	
	
	9,631615,289
	
	
	
	459,763Less:Allowance for loan losses
	
	
	(8,651)
	
	
	
	(5,466)Deferred loan fees
	
	
	(1,931)
	
	
	
	(1,325)(10,582)
	
	
	
	(6,791)Loans, net
	
	$
	604,707
	
	
	$
	452,972


Transactions in the allowance for loan losses for the six months ended June 30, 2004 and June 30, 2003 were as follows: (Dollars in 000's)

2004
	
	
	
	2003BALANCE - Beginning of the period
	
	
	$
	5,466
	
	
	$
	4,838Loans charged-off
	
	
	
	(3,632)
	
	
	
	(226)Loan recoveries
	
	
	
	232
	
	
	
	24Loan loss provision
	
	
	
	500
	
	
	
	600Allowance for loan losses recorded with acquisition of Mid Valley Bank
	
	
	
	6,085
	
	
	
	-BALANCE - End of the period
	
	
	$
	8,651
	
	
	$
	5,236


The following table summarizes non-performing assets as of June 30, 2004 and December 31, 2003: (Dollars in 000's)

2004
	
	
	
	2003Loans on non-accrual status
	
	
	$
	2,394
	
	
	$
	385Loans past due greater than 90 days butnot on non-accrual status
	
	
	
	35
	
	
	
	15Total non-performing loans
	
	
	
	2,429
	
	
	
	400Other real estate owned
	
	
	
	1,545
	
	
	
	1,511Total non-performing assets
	
	
	$
	3,974
	
	
	$
	1,911Percentage of non-performing loans to total loans
	
	
	
	0.39%
	
	
	
	0.09%Percentage of non-performing assets to total assets
	
	
	
	0.51%
	
	
	
	0.33%


NOTE 5 - LINE OF CREDIT AND OTHER BORROWINGS

The Company has a secured line of credit available with Federal Home Loan Bank of Seattle (FHLB) under which it may borrow up to 15% 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

12

---

PREMIERWEST BANCORP AND SUBSIDIARY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

June 30, 2004

of June 30, 2004 the Company had pledged available collateral of approximately $38.6 million. As of June 30, 2004 and December 31, 2003, the
Company had borrowed long-term funds from the FHLB against this line of credit, aggregating to $22.7 million and $23.1 million respectively. Interest and principal payments are due monthly on any outstanding borrowings and the Company is presently
making monthly principal payments of approximately $53,000 plus interest at rates between 2.77% and 7.63% . As of June 30, 2004, the weighted average interest rate was 3.15% . Required repayments of principal are $20.0 million by July 2006, $2.5
million by August 2008, and the remaining $193,000 is due at various times through February 2014.

Borrowings of $264,000 and $3.4 million at June 30, 2004 and December 31, 2003, relate to repurchase agreements used for customer overnight sweep accounts.  The cost of these funds as of June 30, 2004 is at an average
annual rate of interest of approximating .37%. Certain investment securities, as required, have been pledged as collateral to fully secure the long-term debt and the repurchase agreements.

Additionally, as of June 30, 2004, the Company has approximately $40 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 June 30, 2004 and December 31, 2003.

NOTE 6 - 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 June 30, 2004, the Company has $123.6 million of commitments to extend credit to customers and $8.9 million of standby letters of
credit.

In the ordinary course of business, the Bank may become involved in various litigation 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.

NOTE 7 - 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.

Three-months ended June 30, 2004 and 2003:Weighted average number of common shares:
	
	2004
	
	2003Basic common shares
	
	14,563,273
	
	12,753,224Diluted common per shares
	
	15,761,146
	
	12,841,539Six-months ended June 30, 2004 and 2003:Weighted average number of common shares:
	
	2004
	
	2003Basic common shares
	
	14,296,335
	
	12,753,451Diluted common per shares
	
	15,491,042
	
	12,788,640


NOTE 8 - RECENTLY ISSUED ACCOUNTING STANDARDS

In June 2003, the Financial Accounting Standards Board (FASB) issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity." This statement establishes standards
regarding classification and measurement of certain financial instruments with characteristics of both liabilities and equity. It requires financial instruments within the scope of this statement to be classified as liabilities (or an asset in some
circumstances). Many of these financial instruments were previously classified as equity. This statement is effective for financial instruments entered into or modified after May 31, 2003, and was otherwise effective at the beginning of the first
interim period beginning after June 15, 2003. For financial instruments created before the issuance date of this statement and still existing at the beginning of the interim period of adoption, transition is achieved by reporting the cumulative
effect of a change in an accounting principle by initially measuring the financial instruments at fair value. Application of the provisions of this statement did not have a material impact on PremierWest's consolidated financial statements.

In January 2003, the FASB issued Interpretation No. 46 (FIN 46), "Consolidation of Variable Interest Entities." This interpretation clarifies the application of Accounting Research Bulletin No. 51, "Consolidated Financial
Statements," and requires existing unconsolidated variable interest entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risks among parties involved. This interpretation explains how to identify
variable interest entities and how an enterprise assesses its interests in a variable interest entity to decide whether to consolidate that entity. In December 2003, FASB made revisions and delayed implementation of certain provisions of FIN 46. As
a public entity that is not a "Small Business Issuer," PremierWest was required to apply FIN 46 to all unconsolidated variable interest

13

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PREMIERWEST BANCORP AND SUBSIDIARY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

June 30, 2004

entities no later than March 31, 2004, with the exception of unconsolidated special-purpose entities, which had an implementation deadline of
December 31, 2003. Special-purpose entities for this provision are expected to include entities whose activities are primarily related to securitizations or other forms of asset-backed financings or single-lessee leasing arrangements. PremierWest's
management does not expect that the application of the provisions of this interpretation will have a material impact on PremierWest's consolidated financial statements.

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

HIGHLIGHTS

For the second quarter ended June 30, 2004, the Company earned $2,103,000, an increase of 38.26% compared to $1,521,000 in net income for the quarter ended June 30, 2003. The significant increase in net income for the
second quarter of 2004 compared to the same period a year ago was driven by a combination of internal growth and the acquisition on January 23, 2004 of Mid Valley Bank. The increase in net income for the second quarter of 2004 resulted from a $2.6
million increase in net interest income after the provision for loan losses and a $120,000 increase in non-interest income offset by a $1.9 million increase in non-interest expense and a $267,000 increase in the provision for income taxes. Diluted
earnings per share were $0.13 and $0.12 for the quarters ended June 30, 2004 and 2003, respectively. Return on average shareholder's equity was 9.96% and return on average assets was 1.10% for the quarter ended June 30, 2004 as compared to a return
on average shareholders' equity of 11.81% and a return on average assets of 1.15% for the quarter ended June 30, 2003.

At June 30, 2004 and December 31, 2003, gross loans, net of deferred loan fees, totaled $613.4 and $458.4 million, respectively, an increase of $155.0 million or 33.81% since year end and an increase of $202.9 million or
49.43% when compared to gross loans of $410.5 million as of June 30, 2003. Of this growth, approximately $108.0 million was attributable to the Mid Valley Bank acquisition. Deposits totaled $660.4 million at June 30, 2004 compared to $475.7 million
at December 31, 2003 and $451.4 million at June 30, 2003, representing a 38.83% increase since year end and 46.30% compared to a year ago. A significant potion of this growth came as a result of the acquisition of Mid Valley Bank from which $165.4
million of deposit growth can be attributed.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2004 AND 2003

The Company recorded net income of $2.1 million for the three months ended June 30, 2004, which was an increase of $582,000 (or 38.26%)	 compared to the same period in 2003. The primary contributing factor to the
improvement in net income was from increased net interest income that resulted from a combination of a $2.4 million increase in interest income and a $90,000 decrease in interest expense. 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
	
	
	
	
	
	
	
	IncreaseJune 30, 2004 and 2003 (Dollars in 000's)
	
	
	
	2004
	
	2003
	
	(Decrease)
	
	%ChangeAverage fed funds sold and investments
	
	
	$
	77,140
	$
	76,872
	$
	268
	
	0.35%Average gross loans
	
	
	
	600,664
	
	403,035
	
	197,629
	
	49.04%Average interest-earning assets
	
	
	
	677,804
	
	479,907
	
	197,897
	
	41.24%Average interest-bearing liabilities
	
	
	
	505,340
	
	376,395
	
	128,945
	
	34.26%Average total assets
	
	
	
	761,950
	
	529,702
	
	232,248
	
	43.85%Average equity
	
	
	
	84,424
	
	51,495
	
	32,929
	
	63.95%Average yield earned (1)
	
	
	
	6.16%
	
	6.68%
	
	(0.52)
	
	-7.78%Average rate paid
	
	
	
	0.95%
	
	1.43%
	
	(0.48)
	
	-33.57%Net interest spread
	
	
	
	5.21%
	
	5.25%
	
	(0.04)
	
	-0.76%Net interest income to averageinterest-earning assets (net interestmargin) (1)
	
	
	
	5.22%
	
	5.27%
	
	(0.05)
	
	-0.95%Return on average assets
	
	
	
	1.10%
	
	1.15%
	
	(0.05)
	
	-4.35%Return on average equity
	
	
	
	9.96%
	
	11.81%
	
	(1.85)
	
	-15.66%Efficiency ratio (2)
	
	
	
	68.04%
	
	66.85%
	
	1.19
	
	1.78%


Notes:
(1) Tax equivalent at a 34% rate
(2) Non-interest expense divided by net interest income plus non-interest income

NET INTEREST INCOME- Net interest income before the loan loss provision increased $2.5 million for the three-month period ended June 30, 2004 as compared to the same period in 2003.
The increase was primarily due to an increase in interest income of $2.4 million that resulted from higher levels of earning assets in combination with a reduction in interest expense by $90,000. The declining interest rate environment impacted
yields for both loans and deposits; however, average earning assets, particularly loans, increased 41.24% while average interest-bearing liabilities increased only 34.26% .  Further assisting the decline in interest expense were changes in the
Bank's overall deposit mix as interest paid on certificates of deposit declined 91 basis points and non-interest-bearing demand deposits, as a percentage of total deposits, increased to 25.74% as of June 30, 2004 compared to 22.75% as of June 30,
2003. The change in deposit mix is a direct result of management's efforts to reduce the Bank's concentration in higher priced time certificate accounts and build a stable base of lower cost core deposits. Net loans increased approximately $199.5
million (including approximately $108.0 million from the acquisition of

14

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PREMIERWEST BANCORP AND SUBSIDIARY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

June 30, 2004

Mid Valley Bank) from June 30, 2003 to June 30, 2004 leading to an increase in loan interest income of approximately $2.6 million for the three months ended June 30, 2004 compared to the same period of 2003. This was offset
by a $151,000 decline in interest income from investments and fed funds sold which, although balances outstanding increased, earned a 79 basis point lower average yield for the period ending June 30, 2004 compared to the same period in 2003.
Overall, the Company's average interest-earning assets increased approximately $197.9 million in the second quarter of 2004 over 2003 and average interest-bearing liabilities increased approximately $128.9 million. The Company's net interest rate
margin, net interest income divided by average interest-earning assets, decreased 5 basis points for the three months ending June 30, 2004 compared to the same period of 2003.

LOAN LOSS PROVISION- The loan loss provision was $200,000 and $300,000 respectively for the three-month periods ended June 30, 2004 and June 30, 2003. The Company had net charge-offs
of $3.3 million during the three-month period ended June 30, 2004 compared to net charge-offs of $134,000 for the corresponding period in 2003. The unusually large level of charge-offs experienced during the quarter ended June 30, 2004 was
principally the result of one loan acquired from the Mid Valley Bank portfolio that had been recognized at acquisition and specifically reserved for in the Bank's allowance for loan losses.

NON-INTEREST INCOME- Non-interest income increased 7.61% to $1.7 million for the three months ended June 30, 2004, as compared to $1.6 million for the same period in 2003. The
$120,000 increase was a consequence of benefits from the merger and internal growth. Of the overall increase, service charges on deposit accounts contributed $128,000, $44,000 was related to investment services and $151,000 was related to other
sources of non-interest income including fees, commissions and increased cash surrender value of life insurance. These increases were partially offset by a $193,000 decrease in mortgage loan fee income that resulted from lower demand for home
mortgages and a decline of $10,000 in gains on sales of investment securities. Approximately $226,000 of total non-interest income was contributed from the acquired operations of Mid Valley Bank which more than offset the $193,000 decline in
mortgage loan fee income from the PremierWest operations.

NON-INTEREST EXPENSE- Non-interest expense increased approximately $1.9 million for the three months ended June 30, 2004 as compared to the corresponding period in 2003. On a
consolidated basis the increase resulted from a $1.0 million increase in salaries and benefits expenses; a $281,000 increase in occupancy and equipment expenses; and a $603,000 increase in other non-interest expenses. Of the total increase, 51.68%
or $982,000 was directly attributable to the acquired ongoing operations of Mid Valley Bank and consisted of $602,000 in salaries and benefits expense, $137,000 in occupancy expense and $243,000 in other non-interest expenses. The remaining 48.32%
increase for the quarter approximated $918,000 and resulted from the on-going operations of PremierWest. The increases included approximately $398,000 in salaries and benefits expense attributed to annual salary increases, additional staffing
associated with two new offices and key administrative positions to support the Bank's expansion; $144,000 in occupancy expense primarily as a result of greater depreciation expense in support of the Company's growth; and approximately $440,000 in
other non-interest expense, including $86,000 in one-time merger related expenses associated with the acquisition of Mid Valley Bank.

EFFICIENCY RATIO- The Company's efficiency ratio was 68.04% for the second quarter of 2004 compared to 66.85% for the second quarter of 2003. This deterioration was anticipated and
came as a result of increased non-interest expenses associated with merger related activities that occurred in the first two quarters of 2004. However, the efficiency ratio improved slightly compared to the 68.06% ratio for the immediately preceding
quarter ended March 31, 2004. Management does not anticipate any further merger related expense beyond the second quarter of 2004 now that system integration has been completed. Going forward, management expects progressive efficiency gains and that
the Company's targeted efficiency ratio in the low 60% range will be achieved. The tax equivalent efficiency ratio, adjusted for the effective tax rate on interest earned on municipal bond securities, tax free loan interest income, tax credits
earned on equipment leases and income earned from the increase in the cash surrender value of life insurance, which is nontaxable, was 66.76% for the second quarter of 2004 compared to 65.11% for the second quarter of 2003.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003

The Company recorded net income of $3.9 million for the six months ended June 30, 2004, which was an increase of $1.2 million (or 42.25%)	 compared to the same period in 2003. The primary contributing factor to the improved
net income came from increased net interest income that resulted from a combination of a $4.1 million increase in interest income and a $283,000 decrease in interest expense. 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.

15

---

PREMIERWEST BANCORP AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

June 30, 2004

Analysis for the six-month period ended
	
	
	
	
	
	IncreaseJune 30, 2004 and 2003 (Dollars in 000's)
	
	2004
	
	2003
	
	(Decrease)
	
	%ChangeAverage fed funds sold and investments
	$
	84,371
	$
	72,917
	$
	11,454
	
	15.71%Average gross loans
	
	568,266
	
	399,931
	
	168,335
	
	42.09%Average interest-earning assets
	
	652,637
	
	472,848
	
	179,789
	
	38.02%Average interest-bearing liabilities
	
	484,906
	
	375,147
	
	109,759
	
	29.26%Average total assets
	
	729,475
	
	523,833
	
	205,642
	
	39.26%Average equity
	
	81,450
	
	50,785
	
	30,665
	
	60.38%Average yield earned (1)
	
	6.15%
	
	6.75%
	
	(0.60)
	
	-8.89%Average rate paid
	
	0.99%
	
	1.47%
	
	(0.48)
	
	-32.65%Net interest spread
	
	5.16%
	
	5.28%
	
	(0.12)
	
	-2.27%Net interest income to averageinterest-earning assets (net interestmargin) (1)
	
	5.19%
	
	5.29%
	
	(0.10)
	
	-1.89%Return on average assets
	
	1.08%
	
	1.06%
	
	0.02
	
	1.89%Return on average equity
	
	9.67%
	
	10.90%
	
	(1.23)
	
	-11.28%Efficiency ratio (2)
	
	68.04%
	
	68.78%
	
	(0.74)
	
	-1.08%


Notes:
(1) Tax equivalent at a 34% rate
(2) Non-interest expense divided by net interest income plus non-interest income

NET INTEREST INCOME- Net interest income before the loan loss provision increased $4.4 million for the six-month period ended June 30, 2004 as compared to the same period in 2003.
The increase was primarily due to an increase in interest income of $4.1 million that resulted from higher levels of earning assets in combination with a reduction in interest expense by $283,000. The declining interest rate environment impacted
yields for both loans and deposits; however, average earning assets, particularly loans, increased 38.02% while interest-bearing liabilities increased only 29.26% . Further assisting the decline in interest expense were changes in the Bank's overall
deposit mix as interest paid on certificates of deposit declined 89 basis points while non-interest-bearing demand deposits, as a percentage of total deposits, increased to 25.74% as of June 30, 2004 compared to 22.75% as of June 30, 2003. The
change in deposit mix is a direct result of management's efforts to reduce the Bank's concentration in higher priced time certificate accounts and build a stable base of lower cost core deposits. Net loans increased approximately $199.5 million
(including approximately $108.0 million from the acquisition of Mid Valley Bank) from June 30, 2003 to June 30, 2004 leading to an increase in loan interest income of approximately $4.3 million for the six months ended June 30, 2004 compared to the
same period of 2003. This was offset by a $203,000 decline in interest income from investments and fed funds sold, which although balances outstanding increased, earned an 88 basis point lower average yield for the six month period ending June 30,
2004 compared to the same period in 2003. Overall, the Company's average interest-earning assets increased approximately $179.8 million during the first six months of 2004 over 2003 and average interest-bearing liabilities increased approximately
$109.8 million. The Company's net interest rate margin, net interest income divided by average interest-earning assets, decreased 10 basis points for the first six months of 2004 compared to 2003.

LOAN LOSS PROVISION- The loan loss provision was $500,000 and $600,000 for the six month periods ended June 30, 2004 and June 30, 2003, respectively. The Company had net charge-offs
of $3.4 million during the six-month period ended June 30, 2004 compared to net charge-offs of $202,000 for the corresponding period in 2003. The unusually large level of net charge-offs experienced during the six month period ended June 30, 2004
was principally the result of one loan acquired from the Mid Valley Bank portfolio that had been recognized at acquisition and specifically reserved for in the Bank's allowance for loan losses.

NON-INTEREST INCOME- Non-interest income increased 10.74% to $3.2 million for the six months ended June 30, 2004, as compared to $2.9 million for the same period in 2003. The
acquired operations of Mid Valley Bank contributed $428,000 to this improvement. Of the overall increase, service charges on deposit accounts contributed $317,000, while $128,000 was related to investment services and $289,000 was related to other
sources of non-interest income including fees, commissions and increased cash surrender value of life insurance. These increases were offset by a $394,000 decrease in mortgage loan fee income resulting from lower demand for home mortgages and a
decline of $25,000 in gains on sales of investment securities.

NON-INTEREST EXPENSE- Non-interest expense increased approximately $3.1 million for the six months ended June 30, 2004 as compared to the corresponding period in 2003. On a
consolidated basis, the increase resulted from a $1.6 million increase in salaries and benefits expenses; a $452,000 increase in occupancy and equipment expenses; and a $992,000 increase in other non-interest expenses. Of the total increase, 60.19%
or $1.9 million was directly attributable to the acquired operations of Mid Valley Bank and consisted of $1.2 million in salaries and benefits expense, $234,000 in occupancy expense and $417,000 in other non-interest expenses.  The remaining 39.81%
increase for the six month period approximated $1.2 million and resulted from the on-going operations of PremierWest. The increases included approximately $433,000 in salaries and benefits expense attributed to annual salary increases, additional
staffing

16

---

PREMIERWEST BANCORP AND SUBSIDIARY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

June 30, 2004

associated with two new offices and key administrative positions to support the Bank's expansion; $218,000 in occupancy expense primarily as a
result of greater depreciation expense in support of the Company's growth; and approximately $575,000 in other non-interest expense, including approximately $150,000 in one-time merger related expenses associated with the acquisition of Mid Valley
Bank.

EFFICIENCY RATIO- The Company's efficiency ratio was 68.04% for the six month period ending June 30, 2004 compared to 68.78% for the same period of 2003. The improvement in this key
measure of operating efficiency was the result of combined increases in the Company's net interest income and non-interest income that exceeded the increase that occurred in non-interest expense for the six month period ending June 30, 2004 when
compared to the same period of 2003. While the Company experienced improvement in this ratio for the six-month period ending June 30, 2004 as compared to the same period of 2003, the ratio does reflect an unfavorable movement of 272 basis points
when compared to the 65.32% efficiency ratio achieved for the fourth quarter ending December 31, 2003.  This change was anticipated due to increased non-interest expenses associated with merger and growth related activities that occurred during the
first six months of 2004. Management does not anticipate any further merger related expense beyond the second quarter of 2004 now that system integration has been completed. Going forward, management expects efficiency gains such that the Company's
targeted efficiency ratio in the low 60% range will be achieved. The tax equivalent efficiency ratio, adjusted for the effective tax rate on interest earned on municipal bond securities, tax free loan interest income, tax credits earned on equipment
leases and income earned on the increase in the cash surrender value of life insurance, which is nontaxable, was 66.62% for the six months ended June 30, 2004 compared to 66.99% for the comparable period ended June 30, 2003.

FINANCIAL CONDITION -
Total assets of $775.6 million at June 30, 2004 increased 35.75% over total assets of $571.3 million at December 31, 2003. This amount includes $195 million of
assets initially recognized upon the acquisition of Mid Valley Bank. As of June 30, 2004, net loans totaled $604.7 million of which the operations of Mid Valley Bank contributed approximately $108.0 million. Federal funds sold increased to $40.7
million at June 30, 2004 from $31.4 million at December 31, 2003 as selected securities acquired with the Mid Valley acquisition were sold in order to position the combined Bank's security portfolio and liquidity needs consistent with management's
objectives in the current low interest rate environment. Investment securities available for sale decreased $168,000 as $10.5 million of the securities acquired with the Mid Valley acquisition were offset by $10.2 million in securities that were
called or matured during the six months ended June 30, 2004.

Gross loans grew by approximately $154.9 million in the first six months of 2004, including approximately $46.9 million from PremierWest Bank loan growth and $108.0 million in loans from the Mid Valley Bank acquisition. Net
loans accounted for 77.97% of total assets at June 30, 2004 compared to 79.29% at December 31, 2003. As of June 30, 2004, the allowance for loan losses increased to $8.6 million from $5.5 million at December 31, 2003. The increase in the allowance
for loan losses was significantly impacted by the allowance for loan losses acquired with Mid Valley Bank. The Company's ratio of allowance for loan losses to total loans was 1.41% at June 30, 2004, compared to 1.19% at December 31, 2003.
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 $4.0 million and $1.9 million at June 30, 2004 and December 31,
2003, respectively. The $2.1 million increase in non-performing assets includes $300,000 from the operations of PremierWest Bank and $1.8 million acquired from the operations of Mid Valley Bank.  Non-performing loans acquired with the MVB portfolio
accounted for 87.32% of consolidated non-performing loans as of June 30, 2004. Based on its past success in aggressively administering problem loans and improving portfolio risk, management expects to progressively improve credit quality in the
acquired portfolio of MVB.

Deposits increased to $660.4 million at June 30, 2004 with $165.4 attributable to the operations acquired from Mid Valley Bank.  This increase resulted in a loan-to-deposit ratio of 91.56% compared to 95.21% as of December
31, 2003. The decrease in the loan-to-deposit ratio is attributable to loans and deposits acquired from MVB which separately had a loan to deposit ratio of 61.40% compared to 99.78% for PremierWest Bank.  As part of the acquisition, management will
continue to concentrate on reducing the number of higher-priced time certificate accounts and replacing them with non-interest-bearing demand accounts. The percentage of non-interest-bearing deposits to total deposits increased to 25.74% at June 30,
2004 compared to 25.53% at December 31, 2003.

The table below sets forth certain summary balance sheet information for June 30, 2004 and December 31, 2003: (Dollars in 000's)

17

---

PREMIERWEST BANCORP AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

June 30, 2004

June 30
	
	December 31
	
	Increase (Decrease)2004
	
	2003
	
	6/30/04 - 12/31/03(Dollars in 000's)ASSETSFederal funds sold
	
	40,650
	
	31,400
	
	9,250
	
	29.46%Securities available for sale
	
	23,183
	
	23,351
	
	(168)
	
	-0.72%Federal Home Loan Bankdeposits and stock
	
	1,856
	
	1,797
	
	59
	
	3.28%Loans, net
	
	604,707
	
	452,972
	
	151,735
	
	33.50%Other assets (1)
	
	105,174
	
	61,801
	
	43,373
	
	70.18%Total assets
	$
	775,570
	$
	571,321
	$
	204,249
	
	35.75%LIABILITIESNoninterest-bearingdeposits
	
	169,986
	
	121,467
	
	48,519
	
	39.94%Interest-bearingdeposits
	
	490,444
	
	354,279
	
	136,165
	
	38.43%Total deposits
	
	660,430
	
	475,746
	
	184,684
	
	38.82%Other liabilities (2)
	
	29,990
	
	30,824
	
	(834)
	
	-2.71%Total liabilities
	
	690,420
	
	506,570
	
	183,850
	
	36.29%SHAREHOLDERSEQUITY
	
	85,150
	
	64,751
	
	20,399
	
	31.50%Total liabilitiesand share-holders equity
	$
	775,570
	$
	571,321
	$
	204,249
	
	35.75%


(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

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 and the stability of its core deposit base. Along with the acquisition of Mid Valley Bank, the Company was able to increase its liquidity during the quarter ended June 30, 2004. Excess cash was invested on a short-term basis into federal
funds sold and interest-earning deposits with the FHLB. As of June 30, 2004, the Company had $40.6 million in federal funds sold.

A further source of liquidity is the Company's ability to borrow funds by maintaining a secured line-of-credit with the FHLB of up to 15% of the Bank's total assets.  As of June 30, 2004, $22.7 million had been advanced in
long-term borrowings from the FHLB against the Company's credit line.  Other borrowings of approximately $264,000 relate to repurchase agreements for customer overnight sweep accounts. The average cost of these two borrowings was approximately 2.97%
for the second quarter of 2004 compared to 2.75% for the same period in 2003. The Company also has established secured credit lines of approximately $40 million through certain correspondent banks and the discount window with the Federal Reserve
Bank of San Francisco.

At June 30, 2004, the Company had approximately $123.6 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. In addition, 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 June 30, 2004, the Company's regulatory capital ratios were as follows: total risk-based capital ratio of 10.26%, Tier 1 capital ratio of 9.01%, and
a leverage capital ratio of 8.40% . 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.

18

---

PREMIERWEST BANCORP AND SUBSIDIARY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

June 30, 2004

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. The Company is
experiencing a positive response to its interest rate management through a reduction in cost of deposits as non-interest-bearing deposits increase and certificates of deposits with higher interest rates run off. 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 June 30, 2004 as compared to December 31, 2003.

As stated in the annual report on Form 10-K for 2003, 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, 2003.

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 principal executive officer and principal 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, our principal executive officer and principal financial officer concluded that our
disclosure controls and procedures are effective to ensure that 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 SEC rules and forms. 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.

19

---

PREMIERWEST BANCORP AND SUBSIDIARY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

June 30, 2004

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. CHANGES IN SECURITIES AND USE OF PROCEEDS

(a)     [Not applicable.]

(b)     [Not applicable.]

(c)     [Not applicable.]

(d)     [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

(a)     The Company's 2004 Annual Meeting of Stockholders (the "Annual Meeting") was held on May 26, 2004 in Medford, Oregon.

(b)     The following matters were voted upon at the Annual Meeting and received the following vote:

|                               |  |            |  |          |  |                    
|------------------------------ |  | ---------- |  | -------- |  | -------------------
|Proposal 1:                    |  |            |  |          |  | Percent            
|Election of Board of Directors |  | For        |  | Withheld |  | Voting For Proposal
|John L. Anhorn                 |  | 11,700,269 |  | 76,735   |  | 84.37%             
|Richard Hieb                   |  | 11,701,287 |  | 75,717   |  | 84.38%             
|John A. Duke                   |  | 11,699,120 |  | 77,884   |  | 84.37%             
|Patrick G. Huycke              |  | 11,660,906 |  | 116,098  |  | 84.09%             
|Thomas Becker                  |  | 11,660,906 |  | 116,098  |  | 84.09%             
|Dennis N. Hoffbuhr             |  | 11,701,406 |  | 75,598   |  | 84.38%             
|James L. Patterson             |  | 11,699,120 |  | 77,884   |  | 84.37%             
|Rickar D. Watkins              |  | 11,701,406 |  | 75,598   |  | 84.38%             
|John Dickerson                 |  | 11,699,001 |  | 78,003   |  | 84.36%             
|Brian Pargeter                 |  | 11,701,406 |  | 75,598   |  | 84.38%             

|                                              |  |           |  |         |  |           |  |       
|--------------------------------------------- |  | --------- |  | ------- |  | --------- |  | ------
|Proposal 2:                                   |  | For       |  | Against |  | Withheld  |  |       
|Ratification of the issuance of 11,000 shares |  |           |  |         |  |           |  |       
|of Series A Preferred Stock                   |  | 6,357,685 |  | 620,031 |  | 52,784    |  | 45.85%
|Broker Non-votes                              |  |           |  |         |  | 4,746,504 |  |       

|                        |  |           
|----------------------- |  | ----------
|Quorum:                 |  |           
|Allowed shares to vote: |  | 13,867,179
|Responded:              |  | 11,777,004
|Percent Responded:      |  | 84.93%    

ITEM 5. OTHER INFORMATION

[None.]

20

---

PREMIERWEST BANCORP AND SUBSIDIARY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

June 30, 2004

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



|(a) | Exhibits
|--- | --------
|    | 31.1    
|    | 31.2    
|    | 32.1    
|    | 32.2    

|(b) | Reports on Form 8-K                                                                                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | On July 13, 2004, the Company filed a current report on Form 8-K to provide under Items 7 and 12, a press release reporting the release of earnings for the second quarter of 2004. Such information shall not be deemed
"filed" for purposes of Section 18 of the Securities Exchange Act of 1934.

21

---

PREMIERWEST BANCORP AND SUBSIDIARY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

June 30, 2004

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: August 2, 2004 
PREMIERWEST 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

22

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PREMIERWEST BANCORP AND SUBSIDIARY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

June 30, 2004

EXHIBIT 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES -OXLEY ACT OF 2002

I, John Anhorn, certify that:

1. I have reviewed this quarterly report on Form 10-Q of PremierWest Bancorp;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13(a)-15(e) and 15(d)-(e) for the registrant and have:

> a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its
> consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
> b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the
> period covered by this quarterly report based on such evaluation; and
> c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to
> affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting,, to the registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent function):

> a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process,
> summarize and report financial information; and
> b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 2, 2004

/s/ John Anhorn
John Anhorn 
President and Chief Executive Officer

23

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PREMIERWEST BANCORP AND SUBSIDIARY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

June 30, 2004

EXHIBIT 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES -OXLEY ACT OF 2002

I, Tom Anderson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of PremierWest Bancorp;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13(a)-15(e) and 15(d)-(e) for the registrant and have:

> a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its
> consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
> b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the
> period covered by this quarterly report based on such evaluation; and
> c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to
> affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting,, to the registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent function):

> a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process,
> summarize and report financial information; and
> b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 2, 2004

/s/ Tom Anderson
Tom Anderson 
Senior Vice President & Chief Financial Officer

24

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PREMIERWEST BANCORP AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

June 30, 2004

EXHIBIT 32.1

CERTIFICATION PURSUANT TO  18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of PremierWest Bancorp (the "Company") on Form 10-Q for the quarter ended June 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I,
John Anhorn, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

|(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company for the period certified.

This certification is being furnished solely to comply with the requirements of 18 U.S.C. Section 1350, and shall not be incorporated by reference into any of the Company's filings under the Securities Act of 1933 or the
Securities Exchange Act of 1934, or otherwise be deemed to be filed as part of the Report or under such Acts.

/s/ John Anhorn
John Anhorn 
President and Chief Executive Officer 
August 2, 2004

25

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PREMIERWEST BANCORP AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

June 30, 2004

EXHIBIT 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of PremierWest Bancorp (the "Company") on Form 10-Q for the quarter ended June 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Tom
Anderson, Senior Vice-President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

|(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company for the period certified.

This certification is being furnished solely to comply with the requirements of 18 U.S.C. Section 1350, and shall not be incorporated by reference into any of the Company's filings under the Securities Act of 1933 or the
Securities Exchange Act of 1934, or otherwise be deemed to be filed as part of the Report or under such Acts.

/s/ Tom Anderson
Tom Anderson
Senior Vice-President and Chief Financial Officer 
August 2, 2004

26

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---