CYBA Canyon Bancorp (CE)

Canyon Bancorp (OTCBB:CYBA) today announced record net income of $4,257,000 or $1.77 per diluted share for the full year ended December 31, 2006 � an increase of $603,000 or 16.5 percent over the prior year�s income of $3,654,000 or $1.52 per diluted share. For the fourth quarter ended December 31, 2006, Canyon Bancorp earned $1,170,000 or $0.48 per diluted share compared to $1,042,000 or $0.44 per diluted share for the same period of 2005, an increase of $128,000 or 12.2 percent. Return on average shareholders� equity for the full year 2006 was 19.43 percent, with a return on average assets of 1.70 percent. �Canyon National Bank�s record-setting performance in 2006 was positively impacted by the bank�s continued strength in its net interest margin which increased by 37 basis points, as both loans and deposits increased from prior year levels,� stated President and CEO Stephen G. Hoffmann. Other financial highlights as of year-end 2006 compared to year-end 2005: Capital to assets ratio increased to 9.68 percent from 8.13 percent. Book value per share increased $1.97 or 23.0 percent to $10.54. Total assets increased $13.0 million or 5.5 percent to $252.4 million. Net loans increased $31.0 million or 18.1 percent to $202.9 million. Total deposits increased $7.9 million or 3.6 percent to $226.4 million. Total shareholders� equity increased by $5.0 million or 25.6 percent to $24.4 million. Net interest margin for the full year 2006 was 6.53 percent compared to 6.16 percent for the full year 2005. Highlights of major activities in 2006 include: Opening in March of the bank�s fourth branch, the Desert Business Park branch, a 2,600-square-foot, full-service facility located in Palm Desert directly across from Sun City Palm Desert. The issuance of a five percent stock dividend in December. This is the bank�s seventh stock dividend or stock split since opening in July 1998. 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) � � 12/31/2006 (Unaudited) � 12/31/2005 (Audited) Assets � Cash and cash equivalents $ 20,569� $ 27,576� Interest-bearing deposits in other financial institutions 2,000� 3,400� Investment securities available for sale 14,250� 24,702� Federal Home Loan Bank and Federal Reserve Bank and Pacific Coast Bankers' Bank restricted stock, at cost 1,558� 1,412� Loans held for sale 752� 782� Loans receivable, net 202,881� 171,833� Furniture, fixtures and equipment 4,548� 4,444� Income tax receivable 276� 69� Deferred tax asset 1,713� 1,384� Other assets 3,821� 3,638� � Total Assets $ 252,368� $ 239,240� � Liabilities and Stockholders� Equity � Deposits: Demand deposits $ 90,248� $ 85,142� NOW accounts 9,645� 8,271� Savings and money market 67,770� 89,642� Time certificate of deposits 58,767� 35,471� � Total Deposits 226,430� 218,526� � Other Liabilities 1,515� 1,263� � Total Liabilities 227,945� 219,789� � Commitments and contingencies �� �� � Stockholders� Equity: Serial Preferred Stock, $5.00 par value; authorized 10,000,000 shares; none issued or outstanding �� �� Common Stock; authorized 10,000,000 shares; 2,316,627 and 2,160,655 shares issued and outstanding as of December 31, 2006 and December 31, 2005, respectively 1 � � 20,809� 5,402� Additional paid-in capital �� 11,888� Accumulated other comprehensive income unrealized (loss) on investment securities available-for-sale (106) (234) Retained earnings 3,720� 2,395� � Total Stockholders� Equity 24,423� 19,451� � Total Liabilities and Stockholders� Equity $ 252,368� $ 239,240� 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 twelve months ended December 31, 2006 and 2005 (Dollars in thousands, except per share amounts) � Three months ended Twelve months ended December 31, December 31, 2006� 2005� 2006� 2005� Interest income: Loans receivable $ 4,743� $ 3,723� $ 17,251� $ 13,092� Federal funds sold 187� 135� 833� 433� Interest bearing deposits in other financial institutions 13� 36� 133� 93� Investment securities available for sale 202� 249� 915� 948� Total Interest Income 5,145� 4,143� 19,132� 14,566� � Interest expense on deposits and other borrowings 1,272� 672� 4,146� 2,007� � Net Interest Income 3,873� 3,471� 14,986� 12,559� � Provision for loan losses 100� 260� 525� 710� � Net Interest Income After Provision for Loan Losses 3,773� 3,211� 14,461� 11,849� Noninterest income: Service charges and fees 167� 127� 591� 508� Loan related fees 111� 127� 541� 472� Lease administration fees 305� 333� 1,278� 1,204� Automated teller machine fees 174� 130� 622� 583� Net gain (loss) on disposition of fixed assets (2) �� (5) (5) Total Noninterest Income 755� 717� 3,027� 2,762� � Noninterest expenses: Salaries and employee benefits 1,343� 1,155� 5,418� 4,425� Occupancy and equipment expense 369� 282� 1,456� 1,234� Professional fees 70� 67� 339� 290� Data processing 129� 111� 530� 445� Marketing and advertising expense 112� 108� 431� 369� Director and shareholder expense 116� 67� 480� 330� Other operating expense 427� 380� 1,646� 1,325� Total Noninterest Expenses 2,566� � 2,170� � 10,300� � 8,418� � Earnings before income taxes 1,962� 1,758� 7,188� 6,193� � Income Tax Expense 792� 716� 2,931� 2,539� � Net earnings $ 1,170� $ 1,042� $ 4,257� $ 3,654� � Earnings Per Share: Basic $ 0.51� $ 0.46� $ 1.86� $ 1.63� Diluted $ 0.48� $ 0.44� $ 1.77� $ 1.52� � Weighted Average Shares Outstanding: Basic 2,311,363� 2,266,329� 2,291,932� 2,245,255� Diluted 2,414,472� 2,390,412� 2,409,311� 2,391,927� CANYON BANCORP & SUBSIDIARY Selected Ratios (Unaudited) � Three Months Ended1 Twelve Months Ended � 12/31/2006� � 12/31/2005� 12/31/2006� 12/31/2005� � Return on average equity 19.45% 22.06% 19.43% 20.97% Return on average assets 1.80% 1.77% 1.70% 1.62% Yield on interest earning-assets 8.63% 7.69% 8.34% 7.14% Cost of interest-bearing liabilities 3.58% 2.06% 3.03% 1.64% Net interest margin 6.50% 6.44% 6.53% 6.16% Non-interest income / average assets 1.17% 1.29% 1.21% 1.23% Non-interest expense / average assets 3.96% 3.70% 4.11% 3.74% Net non-interest expense / average assets 2.79% 2.47% 2.90% 2.51% Net charge-offs / (recoveries) to average loans 0.02% 0.15% 0.02% 0.16% � as of: � 12/31/2006� � 12/31/2005� � Capital to assets ratio 9.68% 8.13% Allowance for loan losses / gross loans 1.66% 1.67% Loan to deposit ratio 91.4% 78.6% Adversely classified loans to gross loans 1.1% 1.2% Demand deposit accounts / total deposit accounts 39.9% 39.0% Book value per share 2 $ 10.54� $ 8.57� 1 Interim periods annualized 2 Prior year restated for past stock dividends and splits