YAVY Yadkin Financial Corporation (MM)

ELKIN, N.C., Feb. 1 /PRNewswire-FirstCall/ -- Yadkin Valley Bank and Trust Company, Elkin, NC (NASDAQ:YAVY) reports earnings of $2,953,256 for the quarter ended December 31, 2005, an increase of 16.0% as compared with earnings of $2,545,949 for the same quarter last year. Basic earnings per share were $0.28 and $0.24, and diluted earnings per share were $0.27 and $0.24 for the quarters ended December 31, 2005 and 2004, respectively. For the year ended December 31, 2005 earnings increased by 17.6% to $11,158,464 from $9,484,532 for the year ended December 31, 2004. Basic earnings per share were $1.04 and $0.90 for the year ended December 31, 2005 and 2004, respectively. Diluted earnings per share were $1.03 and $0.89 for the respective periods. Commenting on the results, Bill Long, President and CEO, stated, "We are pleased to report higher earnings for the fourth quarter and the year. In addition we are proud to announce that we are a billion dollar bank, having reached $1.02 billion at year end while averaging $1.00 billion during the fourth quarter. Strong growth throughout the quarter in demand deposits (21.2%, annualized) and certificates of deposit (12.4%, annualized) funded the loan growth (10.5%, annualized). Our net interest margin increased to 4.26% during the quarter as we were able to keep the cost of deposits and borrowings under control. We are excited about the opportunities in 2006 and expect further asset and income growth as we implement our plan for additional fee income from deposit and loan services. The investment brokerage business should also improve after consolidating three subsidiaries in 2005. Our loyal employees in the branches, operations, and administration as well as the mortgage and brokerage subsidiaries continue to build customer relationships and provide services efficiently. The employees' efforts and management's focus on improving products, pricing, and delivery provide a foundation for the long-term returns that our shareholders expect and deserve." Yadkin Valley Bank and Trust Company is a full service community bank providing services in twenty-three branches throughout its three regions in North Carolina. The Yadkin Valley Bank region serves Ashe, Surry, Yadkin, and Wilkes counties. The Piedmont Bank region serves Iredell and Mecklenburg counties. The High Country Bank region serves Watauga and Avery counties. The bank provides mortgage services through Sidus Financial, LLC headquartered in Greenville, North Carolina. This news release contains forward-looking statements. Such statements are subject to certain factors that may cause the Bank's results to vary from those expected. These factors include changing economic and financial market conditions, competition, ability to execute our business plan, items already mentioned in this press release, and other factors described in our filings with the Federal Deposit Insurance Corporation. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's judgment only as of the date hereof. The Bank undertakes no obligation to publicly revise these forward-looking statements to reflect events and circumstances that arise after the date hereof. Yadkin Valley Bank and Trust Company (Amounts in thousands except per share data) (unaudited) For the Three Months Ended December 31, December 31, 2005 2004 Net interest income $9,329 $8,243 Provision for loan losses 462 270 Other income 3,396 2,489 Other expenses 7,869 6,731 Income taxes 1,441 1,185 Net income 2,953 2,546 Income per share: Basic $0.28 $0.24 Diluted $0.27 $0.24 For the Year Ended December 31, December 31, 2005 2004 Net interest income $34,665 $30,452 Provision for loan losses 1,724 1,620 Other income 13,244 9,228 Other expenses 29,628 24,015 Income taxes 5,399 4,560 Net income 11,158 9,485 Income per share: Basic $1.04 $0.90 Diluted $1.03 $0.89 As of December 31, As of December 31, 2005 2004 * Assets $1,024,295 $959,790 Securities available for sale 113,716 114,466 Gross loans 737,530 687,345 Allowance for loan losses (9,474) (8,654) Loans held for sale 31,427 41,607 Goodwill 32,136 31,672 Core deposit intangible 5,851 6,704 Non-interest bearing deposits 135,912 116,480 NOW, savings, and money market 251,423 264,051 Time deposits over $100,000 170,574 122,821 Other time deposits 256,444 225,356 Stockholders' equity 116,323 111,640 Shares outstanding 10,680 10,688 * Note: Derived from audited financial statements Yadkin Valley Bank and Trust Company (unaudited) Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, 2005 2005 2005 2005 2004 Per Share Data: Basic Earnings per Share $0.28 $0.27 $0.26 $0.23 $0.24 Diluted Earnings per Share $0.27 $0.27 $0.26 $0.23 $0.24 Book Value per Share $10.89 $10.80 $10.65 $10.48 $10.45 Tangible Book Value per Share $7.33 $7.27 $7.10 $6.91 $6.85 Cash Dividends per Share $0.11 $0.11 $0.11 $0.10 $0.10 Selected Performance Ratios: Return on Average Assets (annualized) 1.17% 1.17% 1.16% 1.05% 1.05% Return on Average Equity (annualized) 10.03% 10.07% 9.87% 8.93% 9.19% Return on Tangible Equity (annualized) 14.82% 14.98% 14.82% 13.48% 13.45% Net Interest Margin 4.26% 4.04% 4.03% 3.99% 3.97% Net Interest Spread 3.81% 3.64% 3.68% 3.65% 3.66% Noninterest Income as a % of Revenue 27.69% 30.76% 28.54% 27.60% 26.21% Noninterest Income as a % of Average Assets 0.34% 0.37% 0.33% 0.31% 0.28% Noninterest Expense as a % of Average Assets 0.78% 0.77% 0.73% 0.74% 0.70% Efficiency Ratio 59.49% 58.94% 58.26% 61.16% 60.71% Asset Quality: Nonperforming Loans (000's) 3,199 3,059 4,076 4,919 3,041 Nonperforming Assets (000's) 3,962 4,085 4,972 6,025 4,166 Nonperforming Loans to Total Loans 0.42% 0.40% 0.54% 0.68% 0.42% Nonperforming Assets to Total Assets 0.39% 0.41% 0.50% 0.63% 0.43% Allowance for Loan Losses to Total Loans 1.23% 1.23% 1.19% 1.20% 1.19% Allowance for Loan Losses to Nonperforming Loans 2.96 3.04 2.21 1.77 2.85 Net Charge-offs to Average Loans (annualized) 0.15% 0.11% 0.03% 0.20% 0.26% Capital Ratios: Equity to Total Assets 11.36% 11.58% 11.49% 11.70% 11.63% Tangible Equity to Total Tangible Assets 7.94% 8.10% 7.97% 8.04% 7.95% Tier 1 leverage ratio 8.19% 8.14% 8.10% 8.12% 7.87% Tier 1 risk-based ratio 9.38% 9.45% 9.35% 9.52% 9.19% Total risk-based capital ratio 10.51% 10.59% 10.46% 10.64% 10.29% For the Year Ended Dec 31, Dec 31, 2005 2004 Selected Performance Ratios: Return on Average Assets (annualized) 1.14% 1.07% Return on Average Equity (annualized) 9.79% 9.20% Return on Tangible Equity (annualized) 14.65% 13.54% Net Interest Margin 4.10% 3.94% Net Interest Spread 3.71% 3.67% Noninterest Income as a % of Revenue 28.68% 24.25% Noninterest Income as a % of Average Assets 1.35% 1.04% Noninterest Expense as a % of Average Assets 3.02% 2.71% Efficiency Ratio 59.32% 57.72% Asset Quality: Net Charge-offs to Average Loans (annualized) 0.12% 0.18% First Call Analyst: FCMN Contact: DATASOURCE: Yadkin Valley Bank and Trust Company CONTACT: William A. Long, President and CEO, or Edwin E. Laws, CFO, of Yadkin Valley Bank and Trust Company, +1-336-526-6312

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