CYBA Canyon Bancorp (CE)

Canyon Bancorp (OTCBB: CYBA) today announced record net income of $1,063,000, or $0.46 per diluted share for the second quarter ended June 30, 2006 - an increase of $157,000 or 17.3 percent compared to income of $906,000, or $0.40 per diluted share for the second quarter of 2005. For the six months ended June 30, 2006, Canyon Bancorp earned $2,009,000, or $0.87 per diluted share compared to $1,672,000 or $0.73 per diluted share for the same period of 2005, an increase of $337,000 or 20.2 percent. Annualized return on average shareholders' equity for the second quarter of 2006 was 20.05 percent, with an annualized return on average assets of 1.70 percent. Other financial highlights for the second quarter 2006 compared to the same period in 2005: -- Total assets increased $25.2 million or 11.8 percent to $240.0 million. -- Net loans increased $24.6 million or 15.7 percent to $181.2 million. -- Total deposits increased $20.5 million or 10.5 percent to $216.7 million. -- Total shareholders' equity increased by $4.2 million or 24.1 percent to $21.6 million. -- Net interest margin for the second quarter 2006 was 6.50 percent compared to 6.00 percent for the same period in 2005. "Since June 2004, the Federal Reserve's Open Market Committee has increased short-term interest rates seventeen times. The overall increase is 4.25 percent resulting in a Fed Funds rate of 5.25 percent as of June 29. These increases, although challenging to both funding costs and deposit and loan growth, have contributed to Canyon Bancorp's earnings performance, thus resulting in the higher margin in 2006," said President and CEO Stephen G. Hoffmann. Other highlights of the quarter include: -- The bank announced that July marks its eighth year of service since opening July 10, 1998. -- Less than four months after opening, the bank's newest branch at Desert Business Park across from Del Webb's Sun City reported total deposits in excess of $3 million. Hoffmann credits the branch's asset growth to the expanding area's need for personalized, customer-focused bank services. Hoffmann stated, "The growth of business and retail prospects in this area is significant. Our goal is to personally inform our neighbors that the Coachella Valley's locally owned and managed bank is now conveniently located to provide their full-service banking needs." -- Formation of Canyon Bancorp on June 30, 2006, a newly created bank holding company. The holding company structure will provide greater corporate and financial flexibility allowing Canyon Bancorp to engage in expanded bank activities, acquire or establish other bank-related businesses, and to provide alternatives for raising capital. Canyon Bancorp is a bank holding company with one banking subsidiary, Canyon National Bank, a full-service commercial bank and member of the FDIC. Palm Springs branch locations are at 1711 East Palm Canyon Drive at the Smoke Tree Village Shopping Center and 901 East Tahquitz Canyon Way. Palm Desert branch locations are at 74-150 Country Club Drive and 77-933 Las Montanas Road across from Sun City. Shares of the Company's common stock are traded on the Over the Counter Bulletin Board - stock symbol CYBA. This release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projected in the forward-looking statements. -0- *T CANYON BANCORP & SUBSIDIARY Consolidated Balance Sheets (Dollars in thousands, except per share amounts) Assets 6/30/2006 12/31/2005 6/30/2005 (Unaudited) (Audited) (Unaudited) ------------ ---------- ------------ Cash and cash equivalents $ 19,720 $ 27,576 $ 19,175 Interest-bearing deposits in other financial institutions 4,600 3,400 3,100 Investment securities available for sale 23,730 24,702 28,112 Federal Home Loan Bank and Federal Reserve Bank and Pacific Coast Bankers' Bank restricted stock, at cost 1,527 1,412 1,252 Loans held for sale 1,534 782 Loans receivable, net 181,186 171,833 156,607 Furniture, fixtures and equipment 4,723 4,444 4,454 Income tax receivable -- 69 188 Deferred tax asset 1,476 1,384 903 Other assets 1,496 3,638 966 ------------ ---------- ------------ Total Assets $ 239,992 $ 239,240 $ 214,757 ============ ========== ============ Liabilities and Stockholders' Equity Deposits: Demand deposits $ 86,491 $ 85,142 $ 81,087 NOW accounts 8,836 8,271 6,519 Savings and money market 72,923 89,642 85,706 Time certificate of deposits 48,409 35,471 22,817 ------------ ---------- ------------ Total Deposits 216,659 218,526 196,129 ------------ ---------- ------------ Other Liabilities 1,768 1,263 1,256 ------------ ---------- ------------ Total Liabilities 218,427 219,789 197,385 ------------ ---------- ------------ Commitments and contingencies -- -- -- ------------ ---------- ------------ Stockholders' Equity: Preferred stock, $5.00 par value; authorized 10,000,000 shares; none issued or outstanding -- -- -- Common stock; authorized 10,000,000 shares; 2,180,479, 2,160,655 and 2,041,347 shares issued and outstanding as of June 30, 2006, December 31, 2005, and June 30, 2005, respectively(1) 5,452 5,402 5,103 Additional paid-in capital 12,007 11,888 9,293 Accumulated other comprehensive income unrealized (loss) on investment securities available-for-sale (298) (234) (127) Retained earnings 4,404 2,395 3,103 ------------ ---------- ------------ Total Stockholders' Equity 21,565 19,451 17,372 ------------ ---------- ------------ Total Liabilities and Stockholders' Equity $ 239,992 $ 239,240 $ 214,757 ============ ========== ============ (1) On June 30, 2006 Canyon National Bank's Plan of Reorganization was consummated to form a bank holding company, Canyon Bancorp. On the date of consummation, 2,180,479 shares of Canyon National Bank, $2.50 par value, were exchanged for the same number of shares of Canyon Bancorp, no par value. Shares outstanding prior to June 30, 2006 were issued by Canyon National Bank. CANYON BANCORP & SUBSIDIARY Consolidated Statement of Operations (Unaudited) For the three and six months ended June 30, 2006 and 2005 (Dollars in thousands, except per share amounts) Three-months ended Six-months ended June 30, June 30, ---------------------- ---------------------- 2006 2005 2006 2005 ---------- ---------- ---------- ---------- Interest income: Loans receivable $ 4,113 $ 3,121 $ 7,980 $ 6,022 Federal funds sold 302 82 482 172 Interest bearing deposits in other financial institutions 51 21 88 27 Investment securities available for sale 241 250 475 471 ---------- ---------- ---------- ---------- Total Interest Income 4,707 3,474 9,025 6,692 Interest expense on deposits 938 443 1,740 800 ---------- ---------- ---------- ---------- Net Interest Income 3,769 3,031 7,285 5,892 Provision for loan losses 100 150 325 300 ---------- ---------- ---------- ---------- Net Interest Income After Provision for Loan Losses 3,669 2,881 6,960 5,592 ---------- ---------- ---------- ---------- Noninterest income: Service charges and fees 144 139 279 257 Loan related fees 134 99 301 210 Lease administration fees 365 331 674 603 Automated teller machine fees 154 153 299 318 Net gain (loss) on disposition of fixed assets -- (4) (3) (5) ---------- ---------- ---------- ---------- Total Noninterest Income 797 718 1,550 1,383 ---------- ---------- ---------- ---------- Noninterest expenses: Salaries and employee benefits 1,387 1,065 2,702 2,140 Occupancy and equipment expense 368 310 695 639 Professional fees 73 74 180 156 Data processing 138 112 262 228 Marketing and advertising expense 117 83 220 174 Director and shareholder expense 142 87 239 189 Other operating expense 449 321 824 611 ---------- ---------- ---------- ---------- Total Noninterest Expenses 2,674 2,052 5,122 4,137 ---------- ----------- ---------- ----------- Earnings before income taxes 1,792 1,547 3,388 2,838 Income Tax Expense 729 641 1,379 1,166 ---------- ---------- ---------- ---------- Net earnings $ 1,063 $ 906 $ 2,009 $ 1,672 ========== ========== ========== ========== Earnings Per Share: Basic $ 0.49 $ 0.43 $ 0.93 $ 0.79 Diluted $ 0.46 $ 0.40 $ 0.87 $ 0.73 ========== ========== ========== ========== Weighted Average Shares Outstanding: Basic 2,178,655 2,123,603 2,171,064 2,121,365 Diluted 2,298,393 2,278,868 2,295,795 2,281,755 ========== ========== ========== ========== CANYON BANCORP & SUBSIDIARY Selected Ratios Unaudited Three Months Ended (1) Six Months Ended (1) ---------------------- --------------------- 6/30/2006 6/30/2005 6/30/2006 6/30/2005 ---------- ----------- ---------- ---------- Return on average equity 20.05% 21.59% 19.44% 20.39% Return on average assets 1.70% 1.64% 1.63% 1.52% Yield on interest earning- assets 8.12% 6.87% 7.99% 6.71% Cost of interest-bearing liabilities 2.76% 1.50% 2.63% 1.35% Net interest margin 6.50% 6.00% 6.45% 5.91% Non-interest income / average assets 1.28% 1.30% 1.27% 1.27% Non-interest expense / average assets 4.28% 3.72% 4.20% 3.80% Net non-interest expense / average assets 3.01% 2.42% 2.93% 2.53% Net charge-offs /(recoveries) to average loans 0.01% 0.12% -0.03% 0.07% as of: --------------------------------- 6/30/2006 12/31/2005 6/30/2005 ---------- ----------- ---------- Capital Ratios (2) ------------------ Tier 1 capital ratio 8.8% 8.4% 7.9% Tier 1 risk based capital 12.0% 11.2% 11.5% Risk-based capital 13.3% 12.5% 12.8% Allowance for loan losses / gross loans 1.77% 1.67% 1.72% Loan to deposit ratio 83.6% 78.6% 79.8% Adversely classified loans to gross loans 1.0% 1.2% 1.2% Demand deposit accounts / total deposit accounts 40.0% 39.0% 41.3% Book value per share (3) $9.95 $9.00 $8.10 (1) Interim periods annualized (2) Capital Ratios for Canyon National Bank only (3) Restated for past stock dividends and splits *T