CYBA Canyon Bancorp (CE)

Canyon Bancorp (OTCBB:CYBA) today announced total assets at September 30, 2008 were $295.4 million and net loans receivable were $253.6 million. Canyon Bancorp incurred a loss of $1,350,000 or $0.54 per diluted share for the third quarter ended September 30, 2008 compared to income of $949,000 or $0.37 per diluted share for third quarter of 2007. For the nine months ended September 30, 2008, Canyon Bancorp incurred a loss of $1,139,000 or $0.46 per diluted share compared to earning $3,098,000 or $1.22 per diluted share for the same period in 2007. Like many Southern California banks, the Company�s earnings were adversely affected by the deterioration in the real estate market. Classified loans and loan charge-offs have increased. As a result, the Company increased the provision for loan losses from $210,000 in the third quarter of 2007 to $3,280,000 in the third quarter of 2008. Other financial highlights for the third quarter 2008 compared to the same period in 2007: Total assets increased $15.5 million or 5.5 percent to $295.4 million. Net loans receivable increased $13.5 million or 5.6 percent to $253.6 million. Total deposits increased $12.4 million or 5.4 percent to $242.4 million. Capital to assets ratio for the third quarter 2008 was 9.30 percent compared to 9.98 percent for the same period in 2007. President and CEO Stephen G. Hoffmann said, �In this volatile economic climate, Canyon Bancorp and Canyon National Bank maintain �Well-Capitalized� regulatory ratings and are financially strong. We have responded aggressively to changes in the economy and real estate markets to mitigate risk.� Canyon National Bank has entered into an agreement with the Office of the Comptroller of the Currency (OCC) requiring the Bank to develop a three-year capital plan and to refrain from paying cash dividends except in compliance with the capital plan and with the approval of the OCC. The bank has also agreed to review and enhance its policies for credit administration, appraisal, commercial real estate underwriting, asset diversification, liquidity and loan loss allowance. The bank is in compliance with the terms of the agreement. 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) � � � � � � 9/30/2008 12/31/2007 9/30/2007 (Unaudited) (Audited) (Unaudited) Assets Cash and cash equivalents $ 11,436 $ 13,562 $ 12,833 Investment securities available for sale 12,010 12,196 15,849 Federal Home Loan Bank, Federal Reserve Bank and Pacific Coast Bankers' Bank restricted stock, at cost 1,786 1,890 1,597 Loans held for sale � 123 1,046 Loans receivable, net 253,575 248,468 240,100 Furniture, fixtures and equipment 5,325 5,680 4,290 Income tax receivable 1,925 909 � Deferred tax asset 1,498 1,430 1,671 Foreclosed assets 5,683 3,073 � Other assets 2,189 � 1,825 � 2,534 � � Total Assets $ 295,427 � $ 289,156 � $ 279,920 � � Liabilities and Stockholders� Equity Deposits: Demand deposits $ 67,500 $ 73,961 $ 71,229 NOW accounts 9,464 14,223 9,538 Savings and money market 81,673 79,262 83,471 Time certificate of deposits 83,766 � 63,181 � 65,771 � � Total Deposits 242,403 � 230,627 � 230,009 � � Other borrowed funds 23,341 28,160 20,000 Other liabilities 2,220 � 1,795 � 1,971 � � Total Liabilities 267,964 � 260,582 � 251,980 � � 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; 2,497,360, 2,479,927, and 2,342,882 shares issued and outstanding as of September 30, 2008, December 31, 2007, and September 30, 2007, respectively 23,639 23,513 21,157 Accumulated other comprehensive income: Unrealized loss on investment securities available-for-sale (113 ) (15 ) (41 ) Retained earnings 3,937 � 5,076 � 6,824 � � Total Stockholders� Equity 27,463 28,574 27,940 � Total Liabilities and Stockholders� Equity $ 295,427 � $ 289,156 � $ 279,920 � � CANYON BANCORP & SUBSIDIARY Consolidated Statement of Operations (Unaudited) For the three and nine months ended September 30, 2008 and 2007 (Dollars in thousands, except per share amounts) � � � � � � Three months ended Nine months ended September 30, September 30, 2008 2007 2008 2007 Interest income: Loans receivable $ 4,333 $ 5,148 $ 13,607 $ 14,888 Federal funds sold 26 89 133 477 Interest bearing deposits in other financial institutions � 12 � 68 Investment securities available for sale 107 � 191 375 � 470 Total interest income 4,466 5,440 14,115 15,903 Interest expense Deposits 1,172 1,570 3,515 4,366 Other borrowed funds 178 � 70 655 � 70 Total interest expense 1,350 1,640 4,170 4,436 � Net interest income 3,116 3,800 9,945 11,467 � Provision for loan losses 3,280 � 210 5,265 � 410 � Net interest income after provision for loan losses (164 ) 3,590 4,680 � 11,057 Non-interest income: Service charges and fees 245 173 650 512 Loan related fees 57 121 198 387 Lease administration fees 83 132 301 540 Automated teller machine fees 193 173 568 520 Net loss on sale of foreclosed assets � � (31 ) � Net gain on sale of investment securities 5 � � 33 � � Total non-interest income 583 � 599 1,719 � 1,959 Non-interest expenses: Salaries and employee benefits 1,364 1,317 4,051 3,971 Occupancy and equipment expense 401 381 1,187 1,107 Professional fees 60 82 182 276 Data processing 152 147 502 430 Marketing and advertising expense 64 112 294 327 Director and shareholder expense 102 124 372 390 Foreclosed asset expense, net 220 � 627 � Other operating expense 393 � 429 1,283 � 1,303 Total non-interest expenses 2,756 � � 2,592 � 8,498 � � 7,804 � Earnings before income taxes (2,337 ) 1,597 (2,099 ) 5,212 � Income tax expense (987 ) 648 (960 ) 2,114 � Net earnings $ (1,350 ) $ 949 $ (1,139 ) $ 3,098 Earnings per share: Basic $ (0.54 ) $ 0.39 $ (0.46 ) $ 1.26 Diluted $ (0.54 ) $ 0.37 $ (0.46 ) $ 1.22 Weighted average shares outstanding: Basic 2,496,665 2,459,389 2,487,222 2,451,561 Diluted 2,496,665 2,536,564 2,487,222 2,541,580 � CANYON BANCORP & SUBSIDIARY Selected Ratios (Unaudited) � � � � � � Three Months Ended 1 Nine Months Ended 1 9/30/2008 9/30/2007 9/30/2008 9/30/2007 Return on average equity -18.81 % 13.66 % -5.28 % 15.67 % Return on average assets -1.83 % 1.39 % -0.52 % 1.56 % Yield on interest-earning assets 6.69 % 8.46 % 6.95 % 8.53 % Cost of interest-bearing liabilities 2.78 % 3.92 % 2.93 % 3.83 % Net interest margin 4.67 % 5.91 % 4.89 % 6.15 % Non-interest income/average assets 0.79 % 0.88 % 0.78 % 0.99 % Non-interest expense/average assets 3.73 % 3.81 % 3.85 % 3.93 % Net non-interest expense/average assets 2.94 % 2.93 % 3.07 % 2.94 % Net charge-offs/(recoveries) to average loans 3.95 % 0.39 % 2.61 % 0.23 % � as of: 9/30/2008 12/31/2007 9/30/2007 Capital to assets ratio 9.30 % 9.88 % 9.98 % Allowance for loan losses/gross loans 1.30 % 1.21 % 1.41 % Loan to deposit ratio 106.3 % 109.5 % 106.3 % Adversely classified loans to gross loans 6.4 % 0.9 % 1.2 % Non-accrual loans to gross loans 4.1 % 0.4 % 0.6 % Demand deposit accounts/total deposit accounts 27.8 % 32.1 % 31.1 % Book value per share 2 $ 11.00 $ 11.52 $ 11.36 � 1 Interim periods annualized 2 Prior year restated for past stock dividends and splits