Exhibit 99.1

Thursday, July 24, 2014

HomeTown Bankshares Corporation Reports Record Operating Performance

YTD Earnings up 40% over 2013 

News Release                              

FOR IMMEDIATE RELEASE

For more information contact:

Susan K. Still, President and CEO, 540-278-1705

Charles W. Maness, Jr. Executive Vice President and CFO, 540-278-1702

HomeTown Bankshares Reports Record Operating Performance

Year-to-Date Net Income Up 40% Over 2013 

ROANOKE, Va., July 24, 2014 - HomeTown Bankshares Corporation (the "Company"), the parent company of HomeTown Bank, reported record earnings of $833,000 for the second quarter ended June 30, 2014, a 30% or $191,000 increase over the $642,000 in net income reported for the comparative period in 2013. Net Income for the first six months of 2014 was $1.64 million, up 40% or $469,000 increase over the first six months of 2013.

Net income of $623,000, or $0.15 per diluted common share, for the second quarter ended June 30, 2014 was realized, up from $488,000, or $0.15 per share, for the second quarter of 2013. For the first six months of 2014, net income was $1.22 million, or $0.30 per share, up from $860,000, or $0.26 per share, for the same period of 2013.

“Our results reflect the continued, strong growth in our customer base during the first half of 2014 and our ongoing commitment to deliver an increased return for our shareholders, said President & CEO Susan Still. “Our double-digit annualized growth in both loans and new deposit relationships are also representative of our continued success in the markets we serve. We are very pleased with our ability to effectively deploy the capital raised a year ago, and we remain optimistic about our continued ability to strongly grow market share and profitability and meet the financial needs of our customers.”

In addition to strong loan and deposit growth, other key drivers in earnings growth in the second quarter and the first half of 2014 were a strong net interest margin, double-digit, annualized growth in non-interest income, a reduction in non-interest expense as well as continued improvement in credit quality.

Revenue

Total revenue was $4.68 million for the second quarter, up $256,000 from $4.43 million in the first quarter 2014 which reflected increases in both net interest income and non-interest income. Growth in commercial lines and loans, commercial real estate loans, personal lines and loans, merchant services, title insurance and retail brokerage contributed to the increase in total revenue.

Net Interest Income

Net interest income in the second quarter 2014 increased $77,000 to $3.64 million from the first quarter of 2014, and up $188,000 from $3.56 million earned for the comparative 2013 second quarter. The net interest margin experienced a 7 basis point decline to 3.86% for the 2014 second quarter, down from the 3.93% for the second quarter of 2013; however, the net interest margin was up 2 basis points to 3.92% for the first six months of 2014 vs. 3.90% for comparable 2013. Lower funding costs were partially offset by a decline in market interest rates that resulted in lower yields in the Company’s loan portfolio. We will continue to grow our lower cost core deposits while taking steps to protect our balance sheet from exposure to lower loan and investment rates and preserve our strong net interest margin during the remainder of 2014.

Noninterest Income

Noninterest income excluding securities gains increased to $398,000 in the second quarter 2014, up 20% from the prior quarter with noninterest income of $839,000 for the first half of 2014, up 9% from $770,000 realized for the second half of 2013. The primary increase for 2014 was a 32% increase in service charges on deposit accounts, ATM and interchange income which offset a decline in mortgage loan brokerage fees. Other contributors to the increase in noninterest income were retail brokerage, title insurance and merchant income.

Noninterest Expense

Noninterest expense increased $140,000 in the second quarter 2014 from the prior quarter due to higher revenue-based incentive, annual merit increases and the impact of an additional day during the quarter. However, noninterest expense declined in the second quarter of 2014 and the six months ended June 30, 2014 compared to 2013 due to deferred compensation costs associated with the increase in loan volume. The efficiency ratio was 67.9% for the second quarter 2014 vs. 66.97% for 2013 while the year-to-date efficiency ratio improved to 67.33% for the six months ended June 30, 2014 vs. 70.06% during the first half of 2013.

Loans

Total loans were $318.0 million at June 30, 2014, up $6.2 million from the prior quarter, up 13.5% on an annualized basis for the first six months and up 12.5% over the prior year. Loan growth was driven by commercial real estate, commercial and industrial lines and term loans as well as consumer lines and loans.

Deposits

Total average deposits for the second quarter 2014 were up $715,000 to $346.0 million from the prior quarter. Total deposits increased $8.7 million at June 30, 2014, up 5.1% on an annualized basis for the first six months of 2014 and up 8.3% over the prior year. Deposit growth was achieved by solid commercial and consumer growth during 2014. The average deposit cost for the second quarter was 51 basis points, which improved 1 basis point in the second quarter 2014 over the prior quarter and 2 basis points for the first six months 2014 with a 7 basis point improvement from a year ago. Year-to-date deposit account openings increased 55% for the first half of 2013 and are up 122% thus far in 2014.

Capital

Capital levels remained strong in the second quarter, with total stockholders’ equity increasing $896,000 from the prior quarter. Total risk-based capital, Tier 1 risk-based capital and Tier 1 leverage ratios were 13.7%, 12.6% and 10.1%, respectively. All ratios continue to exceed the current regulatory standards for well-capitalized institutions. Book value per common share increased to $8.60 at June 30, 2014, up from $8.32 at March 31, 2014 and $7.93 at June 30, 2013.

Credit Quality

Credit quality continued to improve overall during the second quarter. Non-performing assets amounted to 2.36% of total assets at June 30, 2014, down from 2.47% at June 30, 2013. Non-performing assets, including restructured loans, were also down from 4.08% of total assets at June 30, 2013 to 3.83% at June 30, 2014. Net charge-offs increased during the second quarter from the prior quarter but remained at historically low levels for the first half of 2014 ending June 30, 2014.

Net Loan Charge-Offs

Net loan charge-offs were $307,000, or 0.20% (annualized) for the first six months ended June 30, 2014 with $-0- in net loan charge-offs in the first quarter of 2014.

Nonperforming Assets

During the second quarter of 2014, non-performing assets increased $1.72 million over the prior quarter due to two previously classified loan reaching non-accrual status. At June 30, 2014, non-performing assets increased $173,000 to $9.84 million from $9.34 million the prior year. Foreclosed assets increased $219,000 during the second quarter but decreased $1.05 million to $7.39 million at June 30, 2014 from $8.44 million at June 30, 2013.

Past Due and Nonaccrual Loans

Total past due and non-accrual loans were $2.97 million or 0.93% of total loans at June 30, 2014, down from $3.43 million or 1.10% the prior quarter. Past due accruing loans decreased $1.95 million to $523,800 at June 30, 2014 or 0.16% of total loans. Nonaccruals increased $1.49 million to $2.44 million or 0.77% of total loans during the second quarter of 2014 from $937,000 or .31% the prior quarter and $1,223,700 or 0.43% of total loans at June 30, 2013.

Allowance for Loan Losses

The allowance for loan losses totaled $3.62 million at June 30, 2014 compared to $3.79 million at March 31, 2014. The allowance coverage to total loans was 1.14% vs. 1.22% at March 31, 2014. The allowance covered 5.9 times annualized net charge-offs for the first half of 2014, compared with 7.2 times annualized net charge-offs for the first half of 2013. Provisions for credit losses were $202,000 for the first half of 2014 vs. $125,000 for the first half of 2013 due primarily to the strong loan growth realized in 2014.

Key Performance Ratios

The key performance ratios are the return on average assets (ROA), the return on average equity (ROE) and the efficiency ratio. The ROA improved to 0.81% for the second quarter and the first half of 2014, up from 0.67% for the second quarter and 0.62% for the first half of 2013. The ROE improved as well and increased to 8.07% for the second quarter and 8.08% for the first half of 2014 compared to 6.82% and 6.29%, respectively, for comparable periods in 2013. The efficiency ratio, which measures the proportion of net operating revenues that are absorbed by overhead expenses, improved as well in 2014 and amounted to 67.90% for the second quarter and 67.33% for the first half of 2014 vs. 66.97% and 70.06%, respectively, for the comparable periods of 2013.

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Forward-Looking Statements:

Certain statements in this press release may be “forward-looking statements.” Forward-looking statements are statements that include projections, predictions, expectations or beliefs about future events or results that are not statements of historical fact and that involve significant risks and uncertainties. Although the Company believes that its expectations with regard to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results will not differ materially from any future results implied by the forward-looking statements. Actual results may be materially different from past or anticipated results because of many factors, some of which may include changes in economic conditions, the interest rate environment, legislative and regulatory requirements, new products, competition, changes in the stock and bond markets and technology. The Company does not update any forward-looking statements that it may make.

(See Attached Financial Statements for quarter ending June 30, 2014)

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