**FNB      Financial Services Corporation Announces**

**Record      Earnings for 2006**

** **

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***Forward      Looking Statements***

*This      news release may contain forward looking statements with respect to the      financial conditions and results of operations of FNB Financial Services      Corporation (“FNB”). These forward looking statements involve certain risks and      uncertainties. Factors that may cause actual results to differ materially from      those contemplated by such forward looking statements include, among others,      the      following possibilities: (1) projected results in connection with the      implementation of our business plan are lower than expected; (2) competitive      pressure among financial services companies increases significantly; (3) costs      or difficulties related to the integration of acquisitions or expenses in      general are greater than expected; (4) general economic conditions, in the      markets in which FNB does business, are less favorable than expected; (5) risks      inherent in making loans, including repayment risks and risks associated with      collateral values, are greater than expected; (6) changes in the interest rate      environment reduce interest margins and affect funding sources; (7) changes      in      market rates and prices may adversely affect the value of financial products;      (8) legislation or regulatory requirements or changes thereto adversely affect      the businesses in which FNB is engaged; (9) regulatory compliance cost increases      are greater than expected; and (10) decisions to change the business mix of      FNB.      For further information and other factors which could affect the accuracy of      forward looking statements, please see FNB’s reports filed with the Securities      and Exchange Commission (“SEC”) pursuant to the Securities Exchange Act of 1934      which are available at the SEC’s website (*
*www.sec.gov*
*)      or      at FNB’s website (*
*www.fnbsoutheast.com*
*).      Readers are cautioned not to place undue reliance on these forward looking      statements, which reflect management’s judgments only as of the date hereof. FNB      undertakes no obligation to publicly revise those forward looking statements      to      reflect events and circumstances that arise after the date      hereof.*

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| **FINANCIAL                    SUMMARY**        |   |        |          |        |            |                           |    |    |      |    |   |      |   |                                   |      |   |   |     |   |
|-------------------------------------------------|--------|-------------|---------------|-------------|-----------------|--------------------------------|---------|---------|-----------|---------|--------|-----------|--------|----------------------------------------|-----------|--------|--------|----------|--------|
|                                            |   |        |          |        |            |                           |    |    |      |    |   |      |   |                                   |      |   |   |     |   |
|                                            |   |        |          |        |            |                           |    |    |      |    |   |      |   |                                   |      |   |   |     |   |
|                                            |   |        |          |        |            |                           |    |    |      |    |   | Fourth    |   |                                   |      |   |   |     |   |
|                                            |   |        |          |        |            |                           |    |    |      |    |   | Quarter   |   | Twelve                    Months Ended |      |
|                                            |   |  2006  |          | 2005        |  2006-2005 | December                    31 |    |
|                                            |   | **Fourth**  |          | Third       |            | Second                         |    | First   |      | Fourth  |   | Percent   |   |                                   |      |   |   | Percent  |   |
|                                            |   | **Quarter** |          | Quarter     |            | Quarter                        |    | Quarter |      | Quarter |   | Variance  |   | **2006**                               |      | 2005   |   | Variance |   |
|                                            |   |        |          |        |            |                           |    |    |      |    |   |      |   |                                   |      |   |   |     |   |
| **Average                    Balances**         |   |        |          |        |            |                           |    |    |      |    |   |      |   |                                   |      |   |   |     |   |
| *(Dollars                    in thousands)*     |   |        |          |        |            |                           |    |    |      |    |   |      |   |                                   |      |   |   |     |   |
|                                            |   |        |          |        |            |                           |    |    |      |    |   |      |   |                                   |      |   |   |     |   |
| Assets                                          |   | **$**       | **1,003,156** |        | $               | 1,031,364                      |    | $       | 1,022,267 |    | $      | 1,015,797 |   | $                                      | 1,011,103 |   |   | (0.8     | )%     | **$** | **1,018,148** |   | $ | 965,704 |   |   | 5.4 | % |
| Loans                                           |   |        | **714,082**   |        |            | 736,365                        |    |    | 759,948   |    |   | 760,026   |   |                                   | 764,331   |   |   | (6.6     | )      |   | **742,463** |   |   | 740,468 |   |   | 0.3 |   |
| Investment                    securities        |   |        | **218,452**   |        |            | 212,884                        |    |    | 209,041   |    |   | 204,468   |   |                                   | 181,222   |   |   | 20.5     |   |   | **211,254** |   |   | 159,957 |   |   | 32.1 |   |
| Earning                    assets               |   |        | **943,324**   |        |            | 976,797                        |    |    | 977,031   |    |   | 974,586   |   |                                   | 953,263   |   |   | (1.0     | )      |   | **965,049** |   |   | 910,858 |   |   | 5.9 |   |
| Noninterest-bearing                    deposits |   |        | **85,571**    |        |            | 86,741                         |    |    | 89,311    |    |   | 87,174    |   |                                   | 89,999    |   |   | (4.9     | )      |   | **87,194** |   |   | 85,704 |   |   | 1.7 |   |
| Interest-bearing                    deposits    |   |        | **729,513**   |        |            | 755,221                        |    |    | 734,631   |    |   | 741,104   |   |                                   | 733,000   |   |   | (0.5     | )      |   | **740,127** |   |   | 704,537 |   |   | 5.1 |   |
| Interest-bearing                    liabilities |   |        | **827,387**   |        |            | 859,476                        |    |    | 853,536   |    |   | 850,713   |   |                                   | 831,665   |   |   | (0.5     | )      |   | **847,746** |   |   | 793,028 |   |   | 6.9 |   |
| Shareholders'                    equity         |   |        | **73,092**    |        |            | 70,573                         |    |    | 68,897    |    |   | 68,203    |   |                                   | 74,153    |   |   | (1.4     | )      |   | **70,163** |   |   | 72,692 |   |   | (3.5 | ) |
|                                            |   |        |          |        |            |                           |    |    |      |    |   |      |   |                                   |      |   |   |     |   |   |   |   |   |   |   |   |   |   |
| **Period-End                    Balances**      |   |        |          |        |            |                           |    |    |      |    |   |      |   |                                   |      |   |   |     |   |   |   |   |   |   |   |   |   |   |
| *(Dollars                    in thousands)*     |   |        |          |        |            |                           |    |    |      |    |   |      |   |                                   |      |   |   |     |   |   |   |   |   |   |   |   |   |   |
|                                            |   |        |          |        |            |                           |    |    |      |    |   |      |   |                                   |      |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Assets                                          |   | **$**       | **1,010,773** |        | $               | 1,013,671.0                    |    | $       | 1,027,827 |    | $      | 1,019,878 |   | $                                      | 1,007,406 |   |   | 0.3      | %      |   |   |   |   |   |   |   |   |   |
| Loans                                           |   |        | **707,146**   |        |            | 722,494                        |    |    | 750,725   |    |   | 754,921   |   |                                   | 757,967   |   |   | (6.7     | )      |   |   |   |   |   |   |   |   |   |
| Investment                    securities        |   |        | **217,127**   |        |            | 218,641                        |    |    | 211,871   |    |   | 203,824   |   |                                   | 201,890   |   |   | 7.5      |   |   |   |   |   |   |   |   |   |   |
| Earning                    assets               |   |        | **927,281**   |        |            | 954,471                        |    |    | 968,126   |    |   | 965,004   |   |                                   | 964,431   |   |   | (3.9     | )      |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing                    deposits |   |        | **87,047**    |        |            | 89,204                         |    |    | 90,116    |    |   | 89,996    |   |                                   | 92,884    |   |   | (6.3     | )      |   |   |   |   |   |   |   |   |   |
| Interest-bearing                    deposits    |   |        | **731,521**   |        |            | 744,924                        |    |    | 756,668   |    |   | 746,422   |   |                                   | 731,746   |   |   | (0.0     | )      |   |   |   |   |   |   |   |   |   |
| Interest-bearing                    liabilities |   |        | **838,679**   |        |            | 840,403                        |    |    | 864,769   |    |   | 855,611   |   |                                   | 839,826   |   |   | (0.1     | )      |   |   |   |   |   |   |   |   |   |
| Shareholders'                    equity         |   |        | **72,693**    |        |            | 73,153                         |    |    | 69,363    |    |   | 68,986    |   |                                   | 67,233    |   |   | 8.1      |   |   |   |   |   |   |   |   |   |   |
|                                            |   |        |          |        |            |                           |    |    |      |    |   |      |   |                                   |      |   |   |     |   |   |   |   |   |   |   |   |   |   |
| **Asset                    Quality Data**       |   |        |          |        |            |                           |    |    |      |    |   |      |   |                                   |      |   |   |     |   |   |   |   |   |   |   |   |   |   |
| *(Dollars                    in thousands)*     |   |        |          |        |            |                           |    |    |      |    |   |      |   |                                   |      |   |   |     |   |   |   |   |   |   |   |   |   |   |
|                                            |   |        |          |        |            |                           |    |    |      |    |   |      |   |                                   |      |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Nonperforming                    loans          |   | **$**       | **13,521**    |        | $               | 15,287                         |    | $       | 14,869    |    | $      | 9,346.0   |   | $                                      | 10,386    |   |   |     |   | **$** | **13,521** |   | $ | 10,386 |   |   |   |   |
| Other                    nonperforming assets   |   |        | **889**       |        |            | 1,786                          |    |    | 1,609     |    |   | 1,527     |   |                                   | 1,483     |   |   |     |   |   | **889** |   |   | 1,483 |   |   |   |   |
| Net                    credit losses            |   |        | **2,776**     |        |            | 2,583                          |    |    | 791       |    |   | 1,232     |   |                                   | 3,629     |   |   |     |   |   | **7,382** |   |   | 4,342 |   |   |   |   |
| Allowance                    for credit losses  |   |        | **13,195**    |        |            | 15,656                         |    |    | 18,239    |    |   | 18,665    |   |                                   | 19,142    |   |   |     |   |   | **13,195** |   |   | 19,142 |   |   |   |   |
| Nonperforming                    loans          |   |        |          |        |            |                           |    |    |      |    |   |      |   |                                   |      |   |   |     |   |   |   |   |   |   |   |   |   |   |
| to                    outstanding loans         |   |        | **1.91**      | **%**       |            | 2.12                           | %       |    | 1.98      | %       |   | 1.24      | %      |                                   | 1.37      | %      |   |     |   |   | **1.91** | **%** |   | 1.37 | % |   |   |   |
| Annualized                    net credit losses |   |        |          |        |            |                           |    |    |      |    |   |      |   |                                   |      |   |   |     |   |   |   |   |   |   |   |   |   |   |
| to                    average loans             |   |        | **1.56**      |        |            | 1.40                           |    |    | 0.42      |    |   | 0.65      |   |                                   | 1.90      |   |   |     |   |   | **0.99** |   |   | 0.59 |   |   |   |   |
| Allowance                    for credit losses  |   |        |          |        |            |                           |    |    |      |    |   |      |   |                                   |      |   |   |     |   |   |   |   |   |   |   |   |   |   |
| to                    outstanding loans         |   |        | **1.87**      |        |            | 2.17                           |    |    | 2.43      |    |   | 2.47      |   |                                   | 2.53      |   |   |     |   |   | **1.87** |   |   | 2.53 |   |   |   |   |
| Allowance                    for credit losses  |   |        |          |        |            |                           |    |    |      |    |   |      |   |                                   |      |   |   |     |   |   |   |   |   |   |   |   |   |   |
| to                    nonperforming loans       |   |        | **97.59**     | **X**  |            | 102.41                         | X  |    | 122.66    | X       |   | 199.71    | X      |                                   | 184.31    | X      |   |     |   |   | **97.59** | **X**  |   | 184.31 | X |   |   |   |

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|                                                         |   |   |      |        |     |       |            |                         |   |    |   |    |   |     |   |                                 |   |   |   |     |       |
|--------------------------------------------------------------|--------|--------|-----------|-------------|----------|------------|-----------------|------------------------------|--------|---------|--------|---------|--------|----------|--------|--------------------------------------|--------|--------|--------|----------|------------|
| **FINANCIAL                  SUMMARY**                       |   |   |      |        |     |       |            |                         |   |    |   |    |   |     |   |                                 |   |   |   |     |       |
|                                                         |   |   |      |        |     |       |            |                         |   |    |   |    |   |     |   |                                 |   |   |   |     |       |
|                                                         |   |   |      |        |     |       |            |                         |   |    |   |    |   |     |   |                                 |   |   |   |     |       |
|                                                         |   |   |      |        |     |       |            |                         |   |    |   |    |   | Fourth   |   |                                 |   |   |   |     |       |
|                                                         |   |   |      |        |     |       |            |                         |   |    |   |    |   | Quarter  |   | Twelve                  Months Ended |   |
|                                                         |   |   |      |  2006  |     | 2005       |  2006-2005 | December                  31 |   |
|                                                         |   |   |      | **Fourth**  |     | Third      |            | Second                       |   | First   |   | Fourth  |   | Percent  |   |                                 |   |   |   | Percent  |       |
|                                                         |   |   |      | **Quarter** |     | Quarter    |            | Quarter                      |   | Quarter |   | Quarter |   | Variance |   | **2006**                             |   | 2005   |   | Variance |       |
|                                                         |   |   |      |        |     |       |            |                         |   |    |   |    |   |     |   |                                 |   |   |   |     |       |
| **Income                  Statement Data**                   |   |   |      |        |     |       |            |                         |   |    |   |    |   |     |   |                                 |   |   |   |     |       |   |   |   |   |   |   |   |   |   |   |
| *(Dollars                  in thousands, except share data)* |   |   |      |        |     |       |            |                         |   |    |   |    |   |     |   |                                 |   |   |   |     |       |   |   |   |   |
|                                                         |   |   |      |        |     |       |            |                         |   |    |   |    |   |     |   |                                 |   |   |   |     |       |   |   |   |   |   |   |   |   |   |   |
| Interest                  income:                            |   |   |      |        |     |       |            |                         |   |    |   |    |   |     |   |                                 |   |   |   |     |       |   |   |   |   |   |   |   |   |   |   |
| Loans                                                        |   |   |      |        | **$**    | **16,055** |            | $                            | 15,972 |    | $      | 15,814  |   | $        | 15,757 |                                 | $      | 15,363 |   |     | 4.5        | % | **$** | **63,598** |   | $ | 56,011 |   |   | 13.5 | % |
| Other                                                        |   |   |      |        |     | **2,401**  |            |                         | 2,600  |    |   | 2,204   |   |     | 2,131  |                                 |   | 1,819  |   |     | 32.0       |   |   | **9,336** |   |   | 6,101 |   |   | 53.0 |   |
| Total                  interest income                       |   |   |      |        |     | **18,456** |            |                         | 18,572 |    |   | 18,018  |   |     | 17,888 |                                 |   | 17,182 |   |     | 7.4        |   |   | **72,934** |   |   | 62,112 |   |   | 17.4 |   |
| Interest                  expense                            |   |   |      |        |     | **9,092**  |            |                         | 9,185  |    |   | 8,479   |   |     | 7,786  |                                 |   | 7,181  |   |     | 26.6       |   |   | **34,542** |   |   | 24,709 |   |   | 39.8 |   |
| Net                  interest income                         |   |   |      |        |     | **9,364**  |            |                         | 9,387  |    |   | 9,539   |   |     | 10,102 |                                 |   | 10,001 |   |     | (6.4       | ) |   | **38,392** |   |   | 37,403 |   |   | 2.6 |   |
| Provision                  for credit losses                 |   |   |      |        |     | **315**    |            |                         | 0      |    |   | 365     |   |     | 755    |                                 |   | 13,627 |   |     | (97.7      | ) |   | **1,435** |   |   | 16,132 |   |   | (91.1 | ) |
| Net                  interest income after                   |   |   |      |        |     |       |            |                         |   |    |   |    |   |     |   |                                 |   |   |   |     |       |   |   |   |   |   |   |   |   |   |   |
| provision                  for credit losses                 |   |   |      |        |     | **9,049**  |            |                         | 9,387  |    |   | 9,174   |   |     | 9,347  |                                 |   | (3,626 | )      |     | 349.6      |   |   | **36,957** |   |   | 21,271 |   |   | 73.7 |   |
| Noninterest                  income                          |   |   |      |        |     | **1,459**  |            |                         | 1,406  |    |   | 1,311   |   |     | 1,332  |                                 |   | 1,696  |   |     | (14.0      | ) |   | **5,508** |   |   | 7,383 |   |   | (25.4 | ) |
| Noninterest                  expense                         |   |   |      |        |     | **7,699**  |            |                         | 7,305  |    |   | 6,846   |   |     | 7,057  |                                 |   | 7,276  |   |     | 5.8        |   |   | **28,907** |   |   | 28,206 |   |   | 2.5 |   |
| Income                  before income tax expense            |   |   | **2,809** |        |     | 3,488      |            |                         | 3,639  |    |   | 3,622   |   |     | (9,206 | )                                    |   | 130.5  |   |     | **13,558** |   |   | 448 |   |   | 2,926.3 |   |
| Income                  tax expense                          |   |   |      |        |     | **789**    |            |                         | 1,163  |    |   | 1,249   |   |     | 1,244  |                                 |   | (3,601 | )      |     | 121.9      |   |   | **4,445** |   |   | (344 | ) |   | 1,392.2 |   |
| Net                  income                                  |   |   |      |        | **$**    | **2,020**  |            | $                            | 2,325  |    | $      | 2,390   |   | $        | 2,378  |                                 | $      | (5,605 | )      |     | 136.0      |   | **$** | **9,113** |   | $ | 792 |   |   | 1,050.6 |   |
|                                                         |   |   |      |        |     |       |            |                         |   |    |   |    |   |     |   |                                 |   |   |   |     |       |   |   |   |   |   |   |   |   |   |   |
| Net                  income per share:                       |   |   |      |        |     |       |            |                         |   |    |   |    |   |     |   |                                 |   |   |   |     |       |   |   |   |   |   |   |   |   |   |   |
| Basic                                                        |   |   |      |        | **$**    | **0.29**   |            | $                            | 0.33   |    | $      | 0.34    |   | $        | 0.34   |                                 | $      | (0.80  | )      |     | 136.3      | % | **$** | **1.29** |   | $ | 0.11 |   |   | 1,072.7 | % |
| Diluted                                                      |   |   |      |        | **$**    | **0.28**   |            | $                            | 0.32   |    | $      | 0.33    |   | $        | 0.33   |                                 | $      | (0.80  | )      |     | 135.0      | % | **$** | **1.26** |   | $ | 0.11 |   |   | 1,045.5 | % |
| Cash                  dividends per share                    |   |   |      |        | **$**    | **0.13**   |            | $                            | 0.12   |    | $      | 0.12    |   | $        | 0.12   |                                 | $      | 0.12   |   |     | 8.3        | % | **$** | **0.49** |   | $ | 0.45 |   |   | 8.9 | % |
|                                                         |   |   |      |        |     |       |            |                         |   |    |   |    |   |     |   |                                 |   |   |   |     |       |   |   |   |   |   |   |   |   |   |   |
| **Other                  Data**                              |   |   |      |        |     |       |            |                         |   |    |   |    |   |     |   |                                 |   |   |   |     |       |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |   |      |        |     |       |            |                         |   |    |   |    |   |     |   |                                 |   |   |   |     |       |   |   |   |   |   |   |   |   |   |   |
| Return                  on average assets                    |   |   |      |        |     | **0.80**   | **%**           |                         | 0.89   | %       |   | 0.94    | %      |     | 0.95   | %                                    |   | (2.20  | )%     |     |       |   |   | **0.90** | **%** |   | 0.08 | % |   |   |   |
| Return                  on average equity                    |   |   |      |        |     | **10.96**  |            |                         | 13.07  |    |   | 13.91   |   |     | 14.14  |                                 |   | (29.99 | )      |     |       |   |   | **12.99** |   |   | 1.09 |   |   |   |   |
| Net                  yield on earning assets *               |   |   |      |        | **4.05** |       |            | 3.91                         |   |    | 4.00   |    |   | 4.28     |   |                                 | 4.24   |   |   |     |       |   | **4.06** |   |   | 4.18 |   |   |   |   |
| Efficiency                                                   |   |   |      |        |     | **69.06**  |            |                         | 66.21  |    |   | 61.87   |   |     | 60.70  |                                 |   | 61.23  |   |     |       |   |   | **64.46** |   |   | 62.04 |   |   |   |   |
| Equity                  to assets                            |   |   |      |        |     | **7.29**   |            |                         | 6.84   |    |   | 6.74    |   |     | 6.71   |                                 |   | 7.33   |   |     |       |   |   | **6.89** |   |   | 7.53 |   |   |   |   |
| Loans                  to assets                             |   |   |      |        |     | **71.18**  |            |                         | 71.40  |    |   | 74.34   |   |     | 74.82  |                                 |   | 75.59  |   |     |       |   |   | **72.92** |   |   | 76.68 |   |   |   |   |
| Loans                  to deposits                           |   |   |      |        |     | **87.61**  |            |                         | 87.46  |    |   | 92.23   |   |     | 91.76  |                                 |   | 92.87  |   |     |       |   |   | **89.74** |   |   | 93.70 |   |   |   |   |
| Noninterest                  - bearing deposits              |   |   |      |        |     |       |            |                         |   |    |   |    |   |     |   |                                 |   |   |   |     |       |   |   |   |   |   |   |
| to                  total deposits                           |   |   |      |        |     | **10.50**  |            |                         | 10.30  |    |   | 10.84   |   |     | 10.52  |                                 |   | 10.94  |   |     |       |   |   | **10.54** |   |   | 10.85 |   |   |   |   |
|                                                         |   |   |      |        |     |       |            |                         |   |    |   |    |   |     |   |                                 |   |   |   |     |       |   |   |   |   |   |   |   |   |   |   |
| *Fully                  taxable equivalent basis             |   |   |      |        |     |       |            |                         |   |    |   |    |   |     |   |                                 |   |   |   |     |       |   |   |   |   |   |   |   |

----

| **COMMON                  STOCK DATA**            |   |        |          |    |   |      |   |    |      |    |   |
|---------------------------------------------------|--------|-------------|---------------|---------|--------|-----------|--------|---------|-----------|---------|--------|
|                                              |   |        |          |    |   |      |   |    |      |    |   |
|                                              |   |        |          |    |   |      |   |    |      |    |   |
|                                              |   |  2006  |          | 2005    |   |
|                                              |   | **Fourth**  |          | Third   |   | Second    |   | First   |      | Fourth  |   |
|                                              |   | **Quarter** |          | Quarter |   | Quarter   |   | Quarter |      | Quarter |   |
|                                              |   |        |          |    |   |      |   |    |      |    |   |
| Market                  value:                    |   |        |          |    |   |      |   |    |      |    |   |   |   |   |   |   |
| End                  of period                    |   | **$**       | **14.82**     |    | $      | 14.75     |   | $       | 15.16     |    | $      | 16.05 |   | $ | 16.40 |   |
| High                                              |   |        | **15.68**     |    |   | 15.50     |   |    | 15.67     |    |   | 16.46 |   |   | 17.89 |   |
| Low                                               |   |        | **14.56**     |    |   | 13.04     |   |    | 14.70     |    |   | 14.00 |   |   | 14.40 |   |
| Book                  value                       |   |        | **10.30**     |    |   | 10.34     |   |    | 9.81      |    |   | 9.79 |   |   | 9.55 |   |
| Dividend                                          |   |        | **0.13**      |    |   | 0.12      |   |    | 0.12      |    |   | 0.12 |   |   | 0.12 |   |
| Shares                  outstanding at period-end |   |        | **7,060,241** |    |   | 7,077,691 |   |    | 7,048,976 |    |   | 7,045,335 |   |   | 7,038,110 |   |
| Average                  shares outstanding       |   |        | **7,057,452** |    |   | 7,053,509 |   |    | 7,074,254 |    |   | 7,040,964 |   |   | 7,036,704 |   |
| Shares                  traded                    |   |        | **305,100**   |    |   | 493,900   |   |    | 544,000   |    |   | 474,471 |   |   | 282,011 |   |