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Psychiatric Solutions, Inc. Completes $20 Million Private Placement of Senior Subordinated Notes with Brown Brothers Harriman

Franklin, TN - July 2, 2002 -- Joey A. Jacobs, President and Chief Executive Officer of Psychiatric Solutions, Inc. ("PSI") today announced that PSI has completed a $20 million private placement of senior subordinated notes with detachable nominal warrants. The Company intends to use the proceeds from the securities, which were placed through the Company's exclusive financial advisor, Brentwood Capital Advisors LLC, to fund acquisitions of freestanding psychiatric hospitals, including the 210-bed Riveredge Hospital in Forest Park, Illinois, with which PSI signed a definitive agreement in June 2002.

The senior subordinated notes were placed with The 1818 Mezzanine Fund II, LP, a private equity investment fund managed by Brown Brothers Harriman & Co. ("BBH"), America's largest private bank and one of the oldest owner-managed partnerships in the country. The 1818 Funds are a family of private equity partnerships with committed capital exceeding $1.5 billion, which BBH organized to acquire substantial, non-controlling long-term ownership positions in growing, strongly positioned companies. As a result of the placement, Joseph P. Donlan, Managing Director of BBH, has joined PSI's Board of Directors.

Mr. Jacobs remarked, "The completion of this placement with Brown Brothers Harriman represents another significant step toward PSI's becoming a leading owner and operator of acute care psychiatric facilities that treat behavioral and neurological disorders. Most immediately, the placement will help us fund our acquisition of Riveredge Hospital, our fifth hospital acquisition within the past year. In addition, by creating a new relationship with BBH, one of the country's premiere investment companies, the placement validates PSI's business model, growth strategies and prospects for profitable expansion. We also expect to benefit significantly from the addition of Joe Donlan to our board. He brings an extensive institutional expertise to PSI developed through investments in a wide range of industries across the country. BBH's substantial healthcare portfolio includes representation on the Boards of Directors of, among others, HCA (NYSE: HCA) and National HealthCare Corp (AMEX:NHC).

Mr. Donlan added, "This transaction demonstrates BBH's confidence in the growth opportunities that exist today in the behavioral healthcare market. We believe that senior management of PSI is the right team to consolidate this expanding market successfully, and we are pleased to initiate through this transaction what we hope is a long-term, mutually beneficial relationship."

PSI also announced today that it has completed the expansion of its Senior Credit Facility with CapitalSource, a leading commercial finance company, to $40.0 million from the $33.2 million that was originally structured in November 2001. The facility is comprised of two lines of credit - a revolving working capital line and a nonrevolving term loan - and, as of March 31, 2002, PSI had outstanding borrowings under the facility of approximately $28 million.

"The expansion of our credit facility with CapitalSource strengthens our financial position and improves the flexibility we have in implementing our growth strategies," said Mr. Jacobs. "Combined with the placement of the senior subordinate notes with BBH, we believe our working capital on hand and available credit are sufficient to meet our operating and capital needs for the coming year."

On May 6, 2002, PSI and PMR Corporation (Nasdaq: PMRP) announced a definitive merger agreement. Upon completion of the merger, PSI shareholders will own approximately 72% of the company and PMR shareholders will own approximately 28%. It is also anticipated that the name of the company will be changed to Psychiatric Solutions, Inc. and the company's stock will trade on the Nasdaq National Market under the new symbol, "PSYS." The transaction, which is subject to various conditions, including the approval of the stockholders of PSI and PMR, is expected to be consummated in July 2002.

Psychiatric Solutions, Inc. offers an extensive continuum of behavioral health programs to critically ill children, adolescents and adults through its ownership and operation of freestanding psychiatric inpatient hospitals and its management of psychiatric units within general acute care hospitals owned by others. As of April 30, 2002, PSI owned and operated four freestanding hospitals and managed 44 psychiatric units.