CYBA Canyon Bancorp (CE)

Canyon Bancorp (OTCBB: CYBA) today announced total assets at June 30, 2008 were $289.7 million and net loans receivable were $248.5 million. Canyon Bancorp earned $160,000 or $0.06 per diluted share for the second quarter ended June 30, 2008 compared to income of $1,077,000 or $0.42 per diluted share for second quarter of 2007. For the six months ended June 30, 2008, Canyon Bancorp earned $211,000 or $0.08 per diluted share compared to $2,149,000 or $0.85 per diluted share for the same period in 2007. Like many Southern California banks, the Company�s earnings continued to be affected by the current residential real estate market conditions that impacted construction loans. Because of these factors and increases in classified loans and loan charge-offs, the provision for loan losses increased from $110,000 in the second quarter of 2007 to $825,000 in the second quarter of 2008. Notwithstanding these items, the Company continues to be profitable during these very challenging times. Other financial highlights for the second quarter 2008 compared to the same period in 2007: Total shareholders� equity increased by $1.9 million or 7.1 percent to $28.8 million. Capital to assets ratio for the second quarter 2008 was 9.95 percent compared to 10.33 percent for the same period in 2007. Total assets increased $29.1 million or 11.2 percent to $289.7 million. Net loans receivable increased $28.5 million or 12.9 percent to $248.5 million. Total deposits increased $4.8 million or 2.1 percent to $236.4 million. Book value per share increased $0.61 or 5.6 percent to $11.55. President and CEO Stephen G. Hoffmann said, �Canyon Bancorp has shown growth in total assets, loans, deposits and shareholder equity, when compared to the same period in 2007, and has remained profitable for the first six months of 2008. Our capital ratios exceed the requirements for a �well capitalized bank.� We have recently celebrated our 10 year anniversary, and look forward to the 2009 opening of our newest branch office in Indio.� 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. CANYON BANCORP & SUBSIDIARY Consolidated Balance Sheets (Dollars in thousands, except per share amounts) � � � � 6/30/2008 (Unaudited) 12/31/2007 (Audited) 6/30/2007 (Unaudited) Assets � Cash and cash equivalents $ 17,244 $ 13,562 $ 16,945 Interest-bearing deposits in other financial institutions � � 1,382 Investment securities available for sale 9,269 12,196 12,063 Federal Home Loan Bank, Federal Reserve Bank and Pacific Coast Bankers' Bank restricted stock, at cost 1,764 1,890 1,585 Loans held for sale 109 123 390 Loans receivable, net 248,526 248,468 220,034 Furniture, fixtures and equipment 5,446 5,680 4,363 Income tax receivable 931 909 � Deferred tax asset 1,484 1,430 1,722 Foreclosed assets 3,412 3,073 � Other assets � 1,533 � � 1,825 � � 2,122 � � Total Assets $ 289,718 � $ 289,156 � $ 260,606 � � Liabilities and Stockholders� Equity � Deposits: Demand deposits $ 71,135 $ 73,961 $ 78,878 NOW accounts 12,045 14,223 11,461 Savings and money market 91,422 79,262 80,076 Time certificate of deposits � 61,812 � � 63,181 � � 61,239 � � Total Deposits � 236,414 � � 230,627 � � 231,654 � � Other borrowed funds 22,514 28,160 � Other liabilities � 1,975 � � 1,795 � � 2,042 � � Total Liabilities � 260,903 � � 260,582 � � 233,696 � � Commitments and contingencies � � � � � � � � � � Stockholders� Equity: Serial Preferred Stock, $5.00 par value; authorized 10,000,000 shares; none issued or outstanding � � � Common Stock; no par value; authorized 10,000,000 shares; 2,494,802, 2,479,927, and 2,342,338 shares issued and outstanding as of June 30, 2008, December 31, 2007, and June 30, 2007, respectively 23,621 23,513 21,153 Accumulated other comprehensive income: Unrealized loss on investment securities available-for-sale (93 ) (15 ) (118 ) Retained earnings � 5,287 � � 5,076 � � 5,875 � � Total Stockholders� Equity 28,815 28,574 26,910 � Total Liabilities and Stockholders� Equity $ 289,718 � $ 289,156 � $ 260,606 � CANYON BANCORP & SUBSIDIARY Consolidated Statement of Operations (Unaudited) For the three and six months ended June 30, 2008 and 2007 (Dollars in thousands, except per share amounts) � � � � Three months ended Six months ended June 30, June 30, � 2008 � 2007 � 2008 � 2007 Interest income: Loans receivable $ 4,420 $ 4,921 $ 9,274 $ 9,741 Federal funds sold 27 210 107 389 Interest bearing deposits in other financial institutions � 20 � 37 Investment securities available for sale � 136 � � 155 � 268 � � 296 Total interest income 4,583 5,306 9,649 10,463 Interest expense Deposits 1,017 1,452 2,343 2,796 Other borrowed funds � 188 � � � � 477 � � � Total interest expense 1,205 1,452 2,820 2,796 � Net interest income 3,378 3,854 6,829 7,667 � Provision for loan losses � 825 � � 110 � 1,985 � � 200 � Net interest income after provision for loan losses � 2,553 � � 3,744 � 4,844 � � 7,467 Noninterest income: Service charges and fees 212 174 405 339 Loan related fees 106 87 141 266 Lease administration fees 122 185 218 407 Automated teller machine fees 196 184 375 347 Net loss on sale of foreclosed assets (12 ) � (31 ) � Net gain on sale of investment securities � 7 � � � � 28 � � � Total noninterest income � 631 � � 630 � 1,136 � � 1,359 Noninterest expenses: Salaries and employee benefits 1,329 1,224 2,687 2,654 Occupancy and equipment expense 390 355 785 727 Professional fees 69 124 122 194 Data processing 184 140 350 283 Marketing and advertising expense 96 100 231 215 Director and shareholder expense 123 153 269 265 Foreclosed asset expense, net 380 � 406 � Other operating expense � 445 � � 465 � 892 � � 873 Total noninterest expenses � 3,016 � � � 2,561 � � 5,742 � � � 5,211 � Earnings before income taxes 168 1,813 238 3,615 � Income tax expense � 8 � � 736 � 27 � � 1,466 � Net earnings $ 160 � $ 1,077 $ 211 � $ 2,149 Earnings per share: Basic $ 0.06 $ 0.44 $ 0.08 $ 0.88 Diluted $ 0.06 $ 0.42 $ 0.08 $ 0.85 Weighted average shares outstanding: Basic 2,484,971 2,456,390 2,482,450 2,447,580 Diluted 2,535,563 2,542,545 2,535,590 2,543,160 CANYON BANCORP & SUBSIDIARY Selected Ratios (Unaudited) � � � � Three Months Ended 1 Six Months Ended 1 � 6/30/2008 � � 6/30/2007 � � 6/30/2008 � 6/30/2007 � Return on average equity 2.22 % 16.30 % 1.47 % 16.76 % Return on average assets 0.22 % 1.63 % 0.14 % 1.65 % Yield on interest-earning assets 6.89 % 8.58 % 7.11 % 8.57 % Cost of interest-bearing liabilities 2.64 % 3.81 % 3.02 % 3.77 % Net interest margin 5.08 % 6.23 % 5.03 % 6.28 % Non-interest income / average assets 0.87 % 0.95 % 0.77 % 1.04 % Non-interest expense / average assets 4.18 % 3.88 % 3.91 % 4.00 % Net non-interest expense / average assets 3.31 % 2.92 % 3.14 % 2.95 % Net charge-offs / (recoveries) to average loans 3.05 % 0.00 % 1.95 % 0.14 % � as of: � 6/30/2008 � � 12/31/2007 � � 6/30/2007 � � Capital to assets ratio 9.95 % 9.88 % 10.33 % Allowance for loan losses / gross loans 1.02 % 1.21 % 1.55 % Loan to deposit ratio 106.6 % 109.5 % 95.0 % Adversely classified loans to gross loans 5.2 % 0.9 % 1.4 % Non-accrual loans to gross loans 4.5 % 0.4 % 0.6 % Demand deposit accounts / total deposit accounts 30.1 % 32.1 % 34.1 % Book value per share 2 $ 11.55 $ 11.52 $ 10.94 � 1 Interim periods annualized 2 Prior year restated for past stock dividends and splits