CONTACT:	Teresa Ciambotti, SVP, Director of Investor Relations (814) 231-6401
HEADLINE:	Omega Reports 2nd Quarter Earnings

FOR IMMEDIATE RELEASE ¾ August 1, 2006 ¾

STATE COLLEGE, PA – Omega Financial Corporation (NASDAQ:OMEF) reported second quarter net income of $5.345 million, compared to $5.381 million for the same period last year, company officials said. Diluted earnings per share for the quarter were $0.42.

Donita R. Koval, Omega’s president and chief executive officer, said the company’s net interest margin for the quarter rose to 4.09% on a fully tax-equivalent basis from 3.90% in the same period last year in spite of a flat yield curve and a challenging rate environment. She noted that the net interest margin has also increased this quarter from the 4.01% recorded in this year’s first quarter, with net interest income rising by 1.71%.

In the non-interest income area service fees on loans and deposit accounts contributed solid increases, while non-interest expenses decreased less than one half of one percent when comparing this quarter to second quarter 2005.

“The increase in the net interest margin comes at a time when all financial institutions are challenged to simply maintain their margin,” Koval said. “We continue to manage our balance sheet in order to achieve a margin increase, and that strategy has paid off. At the same time, our continued focus on expense control has aided our bottom line. ”

In year-to-date figures, net income for 2006 is $10.688 million, compared to $11.958 million in 2005, while diluted earnings per share are $0.85 compared to $0.94. Excluding gains on securities and early extinguishment of debt in 2005’s first six months results in net income year-to-date essentially unchanged. Common share dividends declared were $0.31 and $0.62 for the quarter and year to date, respectively, unchanged from the same periods last year.

In the first quarter of 2006, approximately $20 million in loans for one commercial borrower was placed on non-accrual status. Omega continues to evaluate this credit and has increased the amount of loan loss allowance allocated to this borrower to $3 million as of June 30, 2006. The remainder of the Corporation’s loan portfolio has shown improvement during the second quarter in both non-accrual levels and delinquencies. As a result of this improving trend, the provision for loan losses necessary to maintain the allowance for loan losses at an adequate level was $100,000.

The company recently announced the sale of its Sentry Trust affiliate which it acquired in the 2004 merger with Sun Bancorp. The results of Sentry Trust are reflected as discontinued operations in the consolidated statements of income and the related assets and liabilities of Sentry Trust have been segregated as such on the consolidated balance sheets. Additionally, on July 31, 2006, the Company agreed to sell three branch locations as it continues refining its retail network in the wake of the merger. The assets and liabilities of these branches are classified as held for sale on the June 30, 2006 consolidated balance sheet. The branch sales are expected to close before December 31, 2006 and result in a total pre-tax gain of approximately $2.3 million.

In the second quarter, Omega Bank, the company’s principal subsidiary received a Pillars of the Community award from the Federal Home Loan Bank of Pittsburgh (FHLB) for sustained and outstanding commitment to projects that provide affordable housing and community and economic development. Omega is the only financial institution in Central Pennsylvania to receive the award this year and one of only four in Pennsylvania, Delaware and West Virginia among 340 institutions eligible to compete for the designation.

Quarterly and annual reports, a corporate profile, stock quotes and other financial data can be accessed through the Omega web site at www.omegafinancial.com. Financial statements and selected financial highlights are summarized on the following pages.

OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
(In thousands, except as indicated * )
	Three Months Ended June 30,									Six Months Ended June 30,
	2006			2005			% Change			2006			2005			% Change
Earnings:
Net income	$	5,345		$	5,381			(0.7	)%	$	10,688		$	11,958			(10.6	)%
Per share statistics: *
Diluted earnings	$	.42		$	.43			(2.3	)%	$	.85		$	.95			(10.5	)%
Dividends declared — common		.31			.31			0.0			.62			.62			0.0
Book value — common		25.41			25.25			0.6			25.41			25.25			0.6
Book value — tangible		11.89			11.69			1.7			11.89			11.69			1.7
Market value — High		34.10			31.54			8.1			34.21			34.50			(0.8	)
Low		28.19			27.05			4.2			27.88			27.05			3.1
Financial position at period end:
Assets	$	1,908,401		$	1,993,745			(4.3	)%	$	1,908,401		$	1,993,745			(4.3	)%
Net loans (1)		1,178,251			1,238,548			(4.9	)		1,178,251			1,238,548			(4.9	)
Deposits (1)		1,420,652			1,511,334			(6.0	)		1,420,652			1,511,334			(6.0	)
Shareholders’ equity		318,819			318,329			0.2			318,819			318,329			0.2
Average Balances:
Assets	$	1,908,861		$	2,003,840			(4.7	)%	$	1,913,847		$	2,025,803			(5.5	)%
Net loans (1)		1,180,827			1,256,198			(6.0	)		1,215,252			1,292,943			(6.0	)
Deposits (1)		1,416,002			1,515,209			(6.5	)		1,411,955			1,506,197			(6.3	)
Shareholders’ equity		321,768			319,986			0.6			321,662			319,292			0.7
Non-Performing Loans at period end:
Non-accrual loans	$	22,922			5,144			345.6	%	$	22,922			5,144			345.6	%
Accruing loans past due 90 days or more		2,769			3,525			(21.4	)		2,769			3,525			(21.4	)
Restructured loans		—			218			(100.0	)		—			218			(100.0	)
Profitability ratios — annualized: *
Return on average assets		1.12	%		1.07	%		4.3	%		1.12	%		1.18	%		(5.4	)%
Return on tangible assets		1.23			1.17			5.1			1.23			1.29			(4.7	)
Return on average stated equity (2)		6.64			6.73			(1.2	)		6.65			7.49			(11.3	)
Return on average tangible equity (3)		14.06			14.47			(2.8	)		14.09			16.28			(13.5	)
Net interest margin — fully tax equivalent		4.09			3.90			4.9			4.04			3.84			5.2
Shares outstanding at period end: *
Common		12,548,843			12,609,174			(0.5	)%		12,548,843			12,609,174			(0.5	)%
(1) Includes amounts classified as held for sale
(2) Average stated equity is equal to average shareholders’ equity.
(3) Average tangible equity represents average shareholders’ equity less average intangibles and goodwill.

OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
	June 30,			December 31,
Assets	2006			2005
Cash and due from banks		$55,460		$	56,194
Interest bearing deposits with other banks		10,164			8,908
Federal funds sold		16,275			—
Trading securities		40			468
Investment securities available for sale		313,549			347,300
Other investments		12,013			6,055
Investment in unconsolidated subsidiary		1,625			1,625
Loans held for sale		292			264
Total portfolio loans		1,165,346			1,214,591
Less: Allowance for loan losses		(14,625	)		(15,482	)
Net portfolio loans		1,150,721			1,199,109
Premises and equipment, net		31,743			35,997
Other real estate owned		1,425			956
Bank-owned life insurance		76,304			75,144
Investment in limited partnerships		6,165			6,612
Core deposit intangibles		6,009			6,729
Other intangibles		1,139			1,193
Goodwill		159,184			159,191
Assets held for sale		31,749			—
Assets of discontinued operations		5,260			4,599
Other assets		29,284			29,635
TOTAL ASSETS		$1,908,401		$	1,939,979
Liabilities and Shareholders’ Equity
Deposits:
Non-interest bearing		$238,406		$	236,683
Interest bearing		1,145,457			1,185,847
Total deposits		1,383,863			1,422,530
Short-term borrowings		68,934			90,153
ESOP debt		1,665			1,845
Junior subordinated debentures		56,443			56,692
Long-term debt		28,565			36,322
Other interest bearing liabilities		825			882
Liabilities held for sale		36,762			—
Liabilities of discontinued operations		329			156
Other liabilities		12,196			12,909
TOTAL LIABILITIES		1,589,582			1,621,489
Shareholders’ Equity
Preferred stock, par value $5.00 per share:
Authorized - 5,000,000 shares, none issued
Common stock, par value $5.00 per share:
Authorized - 25,000,000 shares;
Issued - 12,756,257 shares at June 30, 2006;
12,670,323 shares at December 31, 2005;		63,782			63,368
Outstanding - 12,551,842 shares at June 30, 2006;
12,599,508 shares at December 31, 2005;
Capital surplus		101,605			99,874
Retained earnings		162,638			159,583
Accumulated other comprehensive income		(2,034	)		(1,226	)
Unearned compensation related to ESOP debt		(994	)		(1,125	)
Cost of common stock in treasury:
204,415 shares at June 30, 2006
70,815 shares at December 31, 2005		(6,178	)		(1,984	)
TOTAL SHAREHOLDERS’ EQUITY		318,819			318,490
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$1,908,401		$	1,939,979

OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES
	CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share data)
	Unaudited
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2006			2005			2006			2005
Interest Income:
Interest and fees on loans	$	20,372		$	19,612		$	40,209		$	38,959
Interest and dividends on investment securities		3,077			2,689			6,181			5,056
Other interest income		241			338			342			696
TOTAL INTEREST INCOME.		23,690			22,639			46,732			44,711
Interest Expense:
Interest on deposits		6,409			5,559			12,304			10,251
Interest on short-term borrowings		663			438			1,434			928
Interest on long-term debt and
other interest bearing liabilities		1,248			1,292			2,512			2,940
TOTAL INTEREST EXPENSE		8,320			7,289			16,250			14,119
NET INTEREST INCOME		15,370			15,350			30,482			30,592
Provision for loan losses		100			180			220			322
INCOME FROM CREDIT ACTIVITIES		15,270			15,170			30,262			30,270
Other Income:
Service fees on deposit accounts		2,598			2,308			4,952			4,448
Service fees on loans		443			315			825			627
Earnings on bank-owned life insurance		552			574			1,159			1,149
Trust fees		1,025			1,079			2,145			2,171
Investment and insurance product sales		618			757			1,542			1,810
Gain on the early extinguishment of debt		—			—			—			1,043
Gain (loss) on sale of loans and other assets		64			(39	)		121			(378	)
Net gains on the sale of investment securities		176			549			238			1,537
Other		1,215			1,149			2,381			2,178
TOTAL OTHER INCOME		6,691			6,692			13,363			14,585
Other Expense:
Salaries and employee benefits		7,308			7,324			14,793			14,519
Net occupancy expense		1,083			1,029			2,188			2,102
Equipment expense		1,143			1,019			2,271			2,097
Data processing service		673			621			1,318			1,247
Pennsylvania shares tax		728			549			1,440			1,168
Amortization of intangible assets		222			234			443			357
Other		3,870			4,309			7,449			7,970
TOTAL OTHER EXPENSE		15,027			15,085			29,902			29,460
Income before income taxes and discontinued operations		6,934			6,777			13,723			15,395
Income tax expense		1,568			1,343			3,051			3,383
Income from continuing operations		5,366			5,434			10,672			12,012
Discontinued operations:
Income (Loss) from discontinued operations, net of tax		125			(53	)		162			(54	)
Loss on disposal of discontinued operations, net of tax		(146	)		—			(146	)		—
Income (Loss) from discontinued operations		(21	)		(53	)		16			(54	)
NET INCOME	$	5,345		$	5,381		$	10,688		$	11,958
Net income per common share:
Basic	$	0.43		$	0.43		$	0.85		$	0.95
Diluted	$	0.42		$	0.43		$	0.85		$	0.95
Net income per common share from continuing operations
Basic	$	0.43		$	0.43		$	0.85		$	0.95
Diluted	$	0.43		$	0.43		$	0.85		$	0.95
Net income per common share from discontinued operations
Basic	$	0.00		$	0.00		$	0.00		$	0.00
Diluted	$	0.00		$	0.00		$	0.00		$	0.00
Weighted average shares and equivalents:
Basic		12,572			12,607			12,579			12,601
Diluted		12,616			12,660			12,624			12,659
Dividends declared per share:
Common		0.31			0.31			0.62			0.62

Omega Financial
Corporation
Consolidated Net Interest Income Analysis
2nd Quarter 2006 vs. 2nd Quarter 2005
(In thousands)
				Second Qtr			2006					Second Qtr			2005		Increase/			(Decrease)
	-								-
	Average						Income/		Average						Income/		Due To			Due To			Net
	Balance			Rate			Expense		Balance			Rate			Expense		Volume			Rate			Change
INTEREST EARNING ASSETS
Money Market Investments
Interest Bearing Deposits		11,158			4.13	%		115		25,224			2.59	%		163		(117.1	)		69.1			(48	)
Federal Funds Sold		10,237			4.94	%		126		24,735			2.85	%		176		(136.7	)		86.7			(50	)
Total Money Market Investments		21,395			4.52	%		241		49,959			2.72	%		339		(253.8	)		155.8			(98	)
Investment Securities
U.S. Treasuries and Agencies		279,381			3.64	%		2,537		234,197			3.38	%		1,973		401.8			162.2			564
State and Municipals-Tax Free		39,609			2.63	%		260		66,337			2.82	%		467		(177.3	)		(29.7	)		(207	)
Corporate Securities		19,201			5.83	%		280		15,756			6.32	%		249		51.3			(20.3	)		31
Total Investment Securities		338,191			3.65	%		3,077		316,290			3.41	%		2,689		275.8			112.2			388
Loans
Commercial Loans		265,236			7.31	%		4,835		258,485			6.37	%		4,107		109.6			618.4			728
Tax Free Commercial Loans		19,315			4.76	%		229		21,655			4.78	%		258		(27.7	)		(1.3	)		(29	)
Real Estate Loans		706,380			6.73	%		11,892		791,630			6.08	%		12,037		(1,362.3	)		1,217.3			(145	)
Tax Free Real Estate Loans		40,507			4.30	%		435		39,894			4.08	%		407		6.3			21.7			28
Personal Loans and Leases		164,415			7.27	%		2,981		159,848			7.03	%		2,802		81.3			97.7			179
Total Loans		1,195,853			6.82	%		20,372		1,271,512			6.18	%		19,611		(1,192.8	)		1,953.8			761
Total Earning Assets		1,555,439			6.10	%		23,690		1,637,761			5.54	%		22,639		(1,170.7	)		2,221.7			1,051
FUNDING SOURCES
Interest Bearing Liabilities
Checking with Interest		314,395			0.73	%		572		383,600			0.73	%		694		(125.9	)		3.9			(122	)
Money Market Accounts .		88,131			1.50	%		330		107,690			1.42	%		381		(72.3	)		21.3			(51	)
Savings Accounts		200,977			0.55	%		275		221,124			0.55	%		303		(27.6	)		(0.4	)		(28	)
CD’S, $100,000 and Over		97,755			4.04	%		984		99,424			3.41	%		846		(14.4	)		152.4			138
Other Time Deposits		476,046			3.58	%		4,248		475,872			2.81	%		3,335		1.2			911.8			913
Total Interest Bearing Deposits		1,177,304			2.18	%		6,409		1,287,710			1.73	%		5,559		(238.9	)		1,088.9			850
Other Borrowed Funds-Short Term		71,576			3.71	%		662		59,301			2.96	%		438		101.0			123.0			224
Long Term Debt		85,236			5.82	%		1,240		94,479			5.44	%		1,286		(130.9	)		84.9			(46	)
Other Interest Bearing Liabilities		806			4.47	%		9		843			2.85	%		6		(0.3	)		3.3			3
Demand Deposits		238,698								227,500
Cash		(50,685	)							(54,221	)
Other		32,504								22,149
Total Funding Sources		1,555,439			2.14	%		8,320		1,637,761			1.78	%		7,289		(269.1	)		1,300.1			1,031
Net Int Spread — Net Int Income					3.96	%		15,370					3.75	%		15,350		(901.6	)		921.6			20
Net Int Spread-Tax Equivalent					4.09	%							3.90	%
Tax Equivalent Net Int Income								15,868								15,960