July 26, 2012

Lyons Bancorp, Inc., the parent company of The Lyons National Bank, reported earnings of $3.0 million for the six months ended June 30, 2012, an increase of 28% over the same period last year. Earnings per diluted share were $2.15, an increase of 26% over the same period last year.

The increase in net income year over year was due primarily to increases in net interest income and noninterest income and a reduction in provision for loan losses. Net interest income totaled $9.3 million, up 11% over the same period last year, due primarily to growth in earning assets. Net interest margin, on a tax-equivalent basis, was 3.48% for the six months ended June 30, 2012, down nine basis points, or 2.5% compared to the same period last year.

During the first half of 2012, there were no provisions for loan losses made, compared to $325,000 for the same period in 2011, as credit quality of loan portfolio continued to improve. At June 30, 2012, the company's allowance for credit losses totaled $7.0 million, or 1.72% of total loans. Nonperforming loans totaled 1.43% of total loans as of June 30, 2012, decreasing from 1.65% at December 31, 2011. Net charge-offs to total loans were 0.01% during the first six months of 2012, compared to 0.11% for the same period last year. Each of these indicators helped support the level of the company's allowance for credit losses, and the subsequent reduction in provision expense, and continues to compare favorably to national averages published by the Federal Reserve.

Noninterest income, excluding gains on sales of securities, was $3.1 million for the first six months of 2012, up $196,000 or 7% from the same period last year, due primarily to increased gains on sale of residential loans, as well as increases in loan servicing fees and ATM interchange fees. Noninterest expenses increased 9% year over year, due primarily to an increase in salaries and benefits, data processing and advertising.

Total assets as of June 30, 2012 were $638.9 million, an increase of $100.5 million or 19% over the same period last year. Total loans outstanding as of June 30, 2012 were $404.9 million, up $76.1 million or 23% over the same period last year. Loan growth was funded by strong growth in core deposits, as total deposits increased $93.0 million, totaling $566.4 million at June 30, 2012.

"The public's continued acceptance of our hometown style of banking again fueled our growth and subsequent increase in earnings," stated President and CEO Robert A. Schick. "The prospects of prolonged historically low interest rates makes it all but mandatory that successful banks grow their customer base."

Lyons Bancorp, Inc. is the holding company for The Lyons National Bank. The Lyons National Bank is a community bank with offices in Lyons, Clyde, Macedon, Newark, Ontario, and Wolcott in Wayne County; Jordan in Onondaga County; Geneva in Ontario County; Penn Yan in Yates County; and Waterloo in Seneca County. The Lyons National Bank has one subsidiary, Lyons Realty Associates Corp.