ELLIJAY, Ga., May 1, 2008 (PRIME NEWSWIRE) -- Appalachian Bancshares, Inc. (Nasdaq:APAB), holding company for Appalachian Community Bank and Appalachian Community Bank, F.S.B., today announced that total assets grew to $1.0 billion, as of March 31, 2008, compared to $827.1 million on March 31, 2007, an increase of 23.3%. Total loans were $845.6 million, an increase of $175.5 million, or 26.2%, when compared with $670.1 million on March 31, 2007. Deposits grew to $846.1 million on March 31, 2008, an increase of $138.1 million, or 19.5%, when compared to $708.0 million on March 31, 2007.
Tracy Newton, President and Chief Executive Officer, stated that, "In many ways the challenges experienced during the first quarter were identical to the previous quarter. Some of our customers continue to be troubled by the effects of a slower real estate and housing market. We have spent much of our time listening to their concerns and doing what we could to help them through this negative economic cycle. Recently, our staff has also focused a tremendous amount of time and energy toward responding to the new pressures on our net interest margin created by the rapidly falling interest rates. Our efforts to balance the need for lower loan rates, which should help our borrowers navigate a slower economy, are being offset by our market's slower reaction to funding costs. We will continue to implement our retail branch strategy that began over two years ago to attain local core deposits in our new and existing markets, of which we are beginning to see solid results."
Net income for first quarter 2008 was $1.1 million, or $0.21 per diluted share, a 27.1% decrease in net income, when compared to $1.6 million, or $0.30 per diluted share, for the same quarter in 2007. However, net income for the first quarter of 2008 was consistent with the net income for fourth quarter of 2007, which was $1.1 million, or $0.21 per diluted share.
Return on average shareholders' equity for the first quarter 2008 was 6.10%, annualized for the quarter, compared to 9.40% for the same period in 2007. Return on average assets was 0.46% for first quarter 2008, compared to 0.80% for the same period in 2007.
Mr. Newton commented that, "Faced with additional intense challenges, equal to those during the previous quarter and significantly tougher than we faced during the first quarter of 2007, our outstanding staff did a superb job getting 2008 started on a positive note. During the first quarter, our non-performing assets to total assets decreased 7.8%, from 0.64% at December 31, 2007, to 0.59% at March 31, 2008." Mr. Newton further commented that, "Our non-performing assets to total assets increased 28.3%, from 0.46% to 0.59%, from March 31, 2007 to March 31, 2008. However, during the first quarter of 2008, our non-performing loans to total loans decreased 12.3%, from 0.57% at year end to 0.50% at March 31, 2008. Further, our non-performing loans to total loans ratio has increased only 28.2%, from 0.39% at March 31, 2007 to 0.50% at March 31, 2008. Additionally, we feel confident that our loan loss reserves remain adequate at 1.21% of gross loans outstanding. However, if conditions should warrant, additional loan-loss reserve provisions will be provided."
For the quarter ended March 31, 2008, net interest margin was 4.29%, compared with 4.90% the same quarter a year ago and 4.47% during the fourth quarter of 2007.
Total revenue, net of interest expense, was $11.0 million for first quarter 2008 and $10.2 million for the first quarter 2007. This represents an increase of 7.8%. Total revenue, net of interest expense, for the fourth quarter 2007 was consistent with the current quarter, at $11.0 million.
Book value per share stood at $14.14 on March 31, 2008, compared to $13.14 per share at March 31, 2007, an increase of approximately 7.6%. At December 31, 2007, our book value per share was $13.94.
Conference Call
The Company will hold a conference call on Thursday, May 1, 2008, at 11:00 a.m. ET, to discuss its financial results and strategic initiatives and to entertain questions. Listeners will be able to participate in the question-and-answer session. The telephone number for the conference call is 1-800-860-2442. The conference call also will be available by webcast, through the Company's website, www.apab.com, by clicking on the Investor Relations' section. A replay of the call will be archived on the Company's website for one year.
About Appalachian Bancshares, Inc.
The Company is based in Ellijay, Georgia, and is the holding company of Appalachian Community Bank, a Georgia state-chartered bank, and Appalachian Community Bank, F.S.B., a federally-chartered thrift. The Company, through Appalachian Community Bank (which also operates in Gilmer County, Georgia, under the trade name of Gilmer County Bank, and in Whitfield County, Georgia, under the trade name of Banco Fuerza) and Appalachian Community Bank, F.S.B., provides a full range of community banking services to individuals and to small and medium-sized businesses, through its thirteen banking offices, located in Ellijay, East Ellijay, Blue Ridge, Blairsville, Chatsworth, Dawsonville, McCaysville, Dahlonega and Dalton, Georgia, and in Ducktown, Tennessee, and Murphy, North Carolina. The Company's common stock trades on the NASDAQ Global Market under the symbol APAB. For more information, please visit the Company's website at www.apab.com.
Certain statements in this news release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans and expectations, and are thus prospective. These forward-looking statements are subject to risks and uncertainties, including, but not limited to, economic conditions, competition, interest rate sensitivity and exposure to regulatory and legislative changes, and other risks and uncertainties described in our company's filings with the Securities and Exchange Commission. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by our company or any person that the future events, plans, or expectations contemplated by our company will be achieved. We undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(Dollars in thousands, except shares and per share data)
Three Months Ended
March 31,
----------------------
2008 2007
-------- --------
Summary Results of Operations Data:
Interest income $ 18,643 $ 16,564
Interest expense 8,929 7,694
-------- --------
Net interest income 9,714 8,870
Provision for loan losses 955 636
-------- --------
Net interest income after provision
for loan losses 8,759 8,234
Noninterest income 1,265 1,372
Noninterest expense 8,362 7,297
-------- --------
Income before taxes 1,662 2,309
Income tax expense 525 750
-------- --------
Net income $ 1,137 $ 1,559
======== ========
Per Share Data:
Net income, basic $ 0.21 $ 0.30
Net income, diluted 0.21 0.30
Book value 14.14 13.14
Weighted average number of shares
outstanding:
Basic 5,348,966 5,214,768
Diluted 5,348,966 5,257,442
Performance Ratios:
Return on average assets(1) 0.46% 0.80%
Return on average equity(1) 6.10% 9.40%
Net interest margin(1)(2) 4.29% 4.90%
Efficiency ratio(3) 76.23% 71.25%
Growth Ratios and Other Data:
Percentage change in net income -27.07%
Percentage change in diluted
net income per share -30.00%
APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(Dollars in thousands, except shares and per share data)
At March 31,
-------------------------
2008 2007
----------- ----------
Summary Balance Sheet Data:
Assets $ 1,020,048 $ 827,088
Average earning assets 918,345 741,437
Investment securities 80,226 76,137
Loans held for sale 6,406 2,570
Loans 845,558 670,098
Allowance for loan losses 10,254 8,144
Deposits 846,123 707,961
Short-term borrowings 24,710 5,185
Accrued interest 1,929 1,532
Federal Home Loan Bank
advances 62,250 34,800
Subordinated long-term
capital notes 6,186 6,186
Other liabilities 2,895 2,965
Shareholders' equity 75,955 68,459
Asset Quality Ratios:
Nonperforming loans to
total loans 0.50% 0.39%
Nonperforming assets to
total assets 0.59% 0.46%
Net charge-offs to average
total loans 0.06% 0.02%
Allowance for loan losses
to nonperforming loans 243.56% 310.60%
Allowance for loan losses
to total loans 1.21% 1.21%
At March 31,
-------------------------------------------
2008 2007
-------------------------------------------
% of % of
Total Total
Amount Loans Amount Loans
Loans by Category --------- ------- --------- -------
Real estate -
acquisition
& development(4) $ 409,903 48.48% $ 351,840 52.51%
Real estate
- commercial 165,798 19.61% 131,062 19.56%
Real estate
- residential 185,426 21.93% 109,768 16.38%
Commercial
business 48,735 5.76% 48,417 7.23%
Other loans 35,696 4.22% 29,011 4.33%
--------- ---------
Total Loans $ 845,558 $ 670,098
========= =========
APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(Dollars in thousands, except shares and per share data)
At March 31,
--------------------------------------
2008 2007
------------------ ------------------
% of % of
Total Total
Nonper- Nonper-
Amount forming Amount forming
-------- -------- ------- -------
Nonperforming assets
by category:
Loans
Real estate - acquisition
& development $ 1,556 25.86% $ 774 20.43%
Real estate - commercial 669 11.12% 284 7.50%
Real estate - residential 1,353 22.49% 1,146 30.25%
Commercial business 492 8.18% 189 4.99%
Other loans 140 2.33% 229 6.02%
Other Real Estate
Real estate - acquisition
& development 665 11.05% 771 20.35%
Real estate - commercial 207 3.44% 145 3.83%
Real estate - residential 845 14.05% 250 6.63%
Other Repossessed Property
Other loans 89 1.48% -- 0.00%
------- ------
Total Nonperforming
Assets $ 6,016 $3,788
======= ======
At March 31,
--------------------------------------
2008 2007
------------------ ------------------
% of % of
Total Total
Average Average
Amount Loans Amount Loans
-------- -------- ------- -------
Year-to-Date Net Charge-Offs
by Category
Real estate - acquisition
& development $ 311 0.04% $ 2 0.00%
Real estate - commercial 7 0.00% 1 0.00%
Real estate - residential 45 0.01% 55 0.01%
Commercial business 28 0.00% 11 0.00%
Other loans 118 0.02% 93 0.02%
------- ------
Total Net Charge-Offs $ 509 0.07% $ 162 0.03%
======= ======
Growth Ratios and
Other Data:
Percentage change in
assets 23.33%
Percentage change in
loans 26.18%
Percentage change in
deposits 19.52%
Percentage change in
equity 10.95%
Loans to deposits ratio 99.93%
(1) Annualized.
(2) Taxable equivalent.
(3) Computed by dividing noninterest expense by the sum of the net
interest income and noninterest income.
APPALACHIAN BANCSHARES, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except per share data)
Three Months Ended
March 31,
--------------------------
2008 2007
--------- ---------
Interest Income
Interest and fees on loans $ 17,659 $ 15,585
Interest on securities:
Taxable securities 779 691
Nontaxable securities 160 157
Interest on deposits with other
banks 2 46
Interest on federal funds sold 43 85
--------- ---------
Total Interest Income 18,643 16,564
--------- ---------
Interest Expense
Interest on deposits 8,116 7,211
Interest on short-term borrowings 124 28
Interest on Federal Home Loan Bank
advances 580 321
Interest on subordinated long-term
capital notes 109 134
--------- ---------
Total Interest Expense 8,929 7,694
--------- ---------
Net Interest Income 9,714 8,870
Provision for loan losses 955 636
--------- ---------
Net Interest Income After Provision
for Loan Losses 8,759 8,234
--------- ---------
Noninterest Income
Customer service fees 564 513
Mortgage origination commissions 446 480
Net gains on sales of securities 9 --
Other operating income 246 379
--------- ---------
Total Noninterest Income 1,265 1,372
--------- ---------
Noninterest Expenses
Salaries and employee benefits 4,991 4,415
Occupancy, furniture and equipment
expense 1,082 854
Other operating expenses 2,289 2,028
--------- ---------
Total Noninterest expense 8,362 7,297
--------- ---------
Income before income taxes 1,662 2,309
Income tax expense 525 750
--------- ---------
Net Income $ 1,137 $ 1,559
========= =========
Earnings Per Common Share
Basic $ 0.21 $ 0.30
Diluted 0.21 0.30
Cash Dividends Declared Per Common
Share -- --
Weighted Average Shares Outstanding
Basic 5,348,966 5,214,768
Diluted 5,348,966 5,257,442
APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
(Dollars in thousands)
March 31, Dec. 31, March 31,
2008 2007 2007
---------- ---------- ----------
Assets
Cash and due from banks $ 15,334 $ 13,392 $ 17,422
Interest-bearing deposits
with other banks 191 310 4,465
Federal funds sold 22,370 12,797 16,312
---------- ---------- ----------
Cash and Cash Equivalents 37,895 26,499 38,199
Securities available-for-
sale 80,226 80,510 76,137
Loans, held for sale 6,406 6,503 2,570
Loans, net of unearned
income 845,558 807,522 670,098
Allowance for loan losses (10,254) (9,808) (8,144)
---------- ---------- ----------
Net Loans 835,304 797,714 661,954
Premises and equipment, net 33,378 32,966 24,620
Accrued interest 10,201 9,797 8,554
Cash surrender value on
life insurance 8,865 8,778 8,513
Intangibles, net 2,043 2,179 2,166
Other assets 5,730 6,254 4,375
---------- ---------- ----------
Total Assets $1,020,048 $ 971,200 $ 827,088
========== ========== ==========
Liabilities and
Shareholders' Equity
Liabilities
Noninterest-bearing deposits $ 54,831 $ 56,559 $ 60,823
Interest-bearing deposits 791,292 751,038 647,138
---------- ---------- ----------
Total Deposits 846,123 807,597 707,961
Short-term borrowings 24,710 21,048 5,185
Accrued interest 1,929 2,059 1,532
Federal Home Loan Bank
advances 62,250 57,350 34,800
Subordinated long-term
capital notes 6,186 6,186 6,186
Other liabilities 2,895 3,297 2,965
---------- ---------- ----------
Total Liabilities 944,093 897,537 758,629
---------- ---------- ----------
Shareholders' Equity
Preferred Stock, 20,000,000
shares authorized, none
issued -- -- --
Common stock, par value
$0.01 per share, 20,000,000
shares authorized,
5,372,505 shares issued
at March 31, 2008,
5,285,026 shares issued at
December 31, 2007 and
5,208,611 shares issued
at March 31, 2007 54 53 52
Paid-in capital 44,770 43,998 43,232
Retained earnings 30,468 29,331 25,320
Accumulated other
comprehensive income
(loss) 663 281 (145)
---------- ---------- ----------
Total Shareholders' Equity 75,955 73,663 68,459
---------- ---------- ----------
Total Liabilities and
Shareholders' Equity $1,020,048 $ 971,200 $ 827,088
========== ========== ==========