YAVY Yadkin Financial Corporation (MM)

ELKIN, N.C., Nov. 2 /PRNewswire-FirstCall/ -- Yadkin Valley Bank and Trust Company, Elkin, NC (NASDAQ:YAVY) reports earnings of $2,935,176 for the quarter ended September 30, 2005, an increase of 17.4% as compared with earnings of $2,499,443 for the same quarter last year. Basic and diluted earnings per share were $0.27 and $0.24 for the quarters ended September 30, 2005 and 2004, respectively. For the nine months ended September 30, 2005 earnings increased by 18.3% to $8,205,207 from $6,938,583 for the nine months ended September 30, 2004. Basic earnings per share were $0.77 and $0.66 for the nine months ended September 30, 2005 and 2004, respectively. Diluted earnings per share were $0.76 and $0.65 for the respective periods. Commenting on the results, Bill Long, President and CEO, stated, "Record third quarter and year-to-date performance are the results of continuing consolidation from our two previous bank mergers, strong loan growth, increased interest margins, and significant increases from noninterest income over the prior year. Asset quality remains strong, and net charge-offs are down significantly for the nine month period. Yet, we understand the importance of not reducing our provision for loan losses to enhance performance. We expect continued progress in the last quarter, and net earnings per share for 2005 should be in the $1.00 to $1.04 range." Yadkin Valley Bank and Trust Company is a full service community bank providing service 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 September 30, September 30, 2005 2004 Net interest income $8,799 $7,844 Provision for loan losses 498 405 Other income 3,688 2,203 Other expenses 7,642 5,920 Income taxes 1,412 1,223 Net income 2,935 2,499 Income per share: Basic $0.27 $0.24 Diluted $0.27 $0.24 For the Nine Months Ended September 30, September 30, 2005 2004 Net interest income $25,336 $22,362 Provision for loan losses 1,262 1,350 Other income 9,848 6,586 Other expenses 21,759 17,284 Income taxes 3,957 3,375 Net income 8,205 6,939 Income per share: Basic $0.77 $0.66 Diluted $0.76 $0.65 As of September 30, As of December 31, 2005 2004 * Assets $997,352 $959,790 Securities available for sale 112,543 114,466 Gross loans 718,514 687,345 Allowance for loan losses (9,305) (8,654) Loans held for sale 40,374 41,607 Goodwill 31,672 31,672 Core deposit intangible 6,058 6,704 Non-interest bearing deposits 129,007 116,480 NOW, savings, and money market 242,538 264,051 Time deposits over $100,000 162,143 122,821 Other time deposits 251,888 225,356 Stockholders' equity 115,486 111,640 Shares outstanding 10,690 10,688 * Note: Derived from audited financial statements Yadkin Valley Bank and Trust Company (unaudited) As of or For the Three Months Ended Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, 2005 2005 2005 2004 2004 Per Share Data: Basic Earnings per Share $0.27 $0.26 $0.23 $0.24 $0.24 Diluted Earnings per Share $0.27 $0.26 $0.23 $0.23 $0.24 Book Value per Share $10.80 $10.65 $10.48 $10.45 $10.09 Tangible Book Value per Share $7.27 $7.10 $6.91 $6.85 $7.03 Cash Dividends per Share $0.11 $0.11 $0.10 $0.10 $0.10 Selected Performance Ratios: Return on Average Assets (annualized) 1.17% 1.16% 1.05% 1.05% 1.13% Return on Average Equity (annualized) 10.07% 9.87% 8.93% 9.19% 9.42% Return on Tangible Equity (annualized) 14.98% 14.82% 13.48% 13.45% 13.57% Net Interest Margin 4.04% 4.03% 3.99% 3.97% 3.96% Net Interest Spread 3.64% 3.68% 3.65% 3.66% 3.69% Noninterest Income as a % of Revenue 30.76% 28.54% 27.60% 26.21% 22.85% Noninterest Income as a % of Average Assets 0.37% 0.33% 0.31% 0.28% 0.25% Noninterest Expense as a % of Average Assets 0.77% 0.73% 0.74% 0.70% 0.67% Efficiency Ratio 58.94% 58.26% 61.16% 60.71% 56.36% Asset Quality: Nonperforming Loans (000's) 3,059 4,076 4,919 3,041 2,832 Nonperforming Assets (000's) 4,085 4,972 6,025 4,166 3,474 Nonperforming Loans to Total Loans 0.40% 0.54% 0.68% 0.42% 0.37% Nonperforming Assets to Total Assets 0.41% 0.50% 0.63% 0.43% 0.40% Allowance for Loan Losses to Total Loans 1.23% 1.19% 1.20% 1.19% 1.33% Allowance for Loan Losses to Nonperforming Loans 3.04 2.21 1.77 2.85 3.63 Net Charge-offs to Average Loans (annualized) 0.11% 0.03% 0.20% 0.26% 0.11% Capital Ratios: Equity to Total Assets 11.58% 11.49% 11.70% 11.63% 12.01% Tangible Equity to Total Tangible Assets 8.10% 7.97% 8.04% 7.95% 8.68% Tier 1 leverage ratio 8.14% 8.10% 8.12% 7.87% 8.55% Tier 1 risk-based ratio 9.45% 9.35% 9.52% 9.19% 10.06% Total risk-based capital ratio 10.59% 10.46% 10.64% 10.29% 11.27% For the Nine Months Ended Sep 30, Sep 30, 2005 2004 Selected Performance Ratios: Return on Average Assets (annualized) 1.13% 1.06% Return on Average Equity (annualized) 9.63% 8.77% Return on Tangible Equity (annualized) 14.44% 12.65% Net Interest Margin 4.02% 3.92% Net Interest Spread 3.66% 3.65% Noninterest Income as a % of Revenue 29.03% 23.86% Noninterest Income as a % of Average Assets 1.01% 0.75% Noninterest Expense as a % of Average Assets 2.24% 1.98% Efficiency Ratio 59.42% 56.74% Asset Quality: Net Charge-offs to Average Loans (annualized) 0.11% 0.19% 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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