YAVY Yadkin Financial Corporation (MM)

Yadkin Valley Bank and Trust Company Announces Net Income Increase of 6.2% for the First Quarter ELKIN, N.C., May 6 /PRNewswire-FirstCall/ -- Yadkin Valley Bank and Trust Company, Elkin, NC (NASDAQ:YAVY) reports earnings of $2,462,712 for the quarter ended March 31, 2005, an increase of 6.2% as compared with earnings of $2,319,670 for the same quarter last year. Basic and diluted earnings per share were $0.23 and $0.22 for the quarters ended March 31, 2005 and 2004, respectively. Commenting on the results, Bill Long, President and CEO, stated, "We are pleased with our first quarter results. Basically, we have made up for the dilution brought about by the High Country Bank and Sidus Financial acquisitions. We still have work to do - particularly in the expense areas of our bank, but overall we are pleased with the 6.2% increase in net earnings and feel that 2005 will be a good year for our stockholders." The acquisition of Sidus Financial, LLC increased the number of outstanding shares by 240,000. Yadkin Valley Bank and Trust Company is a full service community bank providing service throughout its three regions. 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 County. 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 March 31, March 31, 2005 2004 Net interest income $8,066 $7,219 Provision for loan losses 382 540 Other income 2,929 2,213 Other expenses 7,016 5,438 Income taxes 1,134 1,134 Net income 2,463 2,320 Income per share: Basic $0.23 $0.22 Diluted $0.23 $0.22 As of March 31, As of December 31, 2005 2004 Assets $956,810 $959,790 Securities available for sale 112,067 114,466 Gross loans 683,904 687,345 Allowance for loan losses (8,683) (8,654) Loans held for sale 41,130 41,607 Goodwill 31,672 31,672 Core deposit intangible 6,486 6,704 Non-interest bearing deposits 117,371 116,480 NOW, savings, and money market 269,017 264,051 Time deposits over $100,000 116,757 122,821 Other time deposits 229,286 225,356 Stockholders' equity 111,976 111,640 Shares outstanding 10,684 10,688 Yadkin Valley Bank and Trust Company (unaudited) As of or For the Three Months Ended March 31, December 31, March 31, 2005 2004 2004 Per Share Data: Basic Earnings per Share $0.23 $0.24 $0.22 Diluted Earnings per Share $0.23 $0.23 $0.22 Book Value per Share $10.48 $10.45 $10.01 Tangible Book Value per Share $6.91 $6.85 $6.93 Cash Dividends Paid per Share $0.10 $0.10 $0.10 Selected Performance Ratios: Return on Average Assets (annualized) 1.05% 1.05% 1.07% Return on Average Equity (annualized) 8.93% 9.19% 8.86% Return on Tangible Equity (annualized) 13.48% 13.45% 12.84% Net Interest Margin 3.99% 3.97% 3.86% Net Interest Spread 3.65% 3.66% 3.60% Noninterest Income as a % of Revenue 27.60% 26.21% 24.89% Noninterest Income as a % of Average Assets 0.31% 0.28% 0.26% Noninterest Expense as a % of Average Assets 0.74% 0.70% 0.63% Efficiency Ratio 61.16% 60.71% 54.52% Asset Quality: Nonperforming Loans (000's) 4,919 3,041 3,144 Nonperforming Assets(000's) 6,025 4,166 4,777 Nonperforming Loans to Total Loans 0.68% 0.42% 0.50% Nonperforming Assets to Total Assets 0.63% 0.43% 0.55% Allowance for Loan Losses to Total Loans 1.20% 1.19% 1.36% Allowance for Loan Losses to Nonperforming Loans 1.77 2.85 2.73 Net Charge-offs to Average Loans (annualized) 0.20% 0.26% 0.11% Capital Ratios: Equity to Total Assets 11.70% 11.63% 12.15% Tangible Equity to Total Tangible Assets 8.04% 7.95% 8.74% Tier 1 leverage ratio 8.12% 7.87% 8.39% Tier 1 risk-based ratio 9.52% 9.19% 10.22% Total risk-based capital ratio 10.64% 10.29% 11.47% DATASOURCE: Yadkin Valley Bank and Trust Company CONTACT: William A. Long, President and CEO, or Edwin E. Laws, CFO, of the Yadkin Valley Bank and Trust Company, +1-336-526-6312

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