GB&T Bancshares, Inc. Reports Third Quarter EPS of $0.24 and Declares Cash Dividend of $0.09


GAINESVILLE, Ga., Oct. 21, 2003 (PRIMEZONE) -- GB&T Bancshares, Inc. (Nasdaq:GBTB), a multi-bank holding company comprised of five Georgia community banks, reported third quarter 2003 net income of $1.48 million, compared to $1.53 million reported in the prior-year third quarter. Diluted earnings per share were $0.24, compared to $0.31 reported in the third quarter 2002. Earnings reflect a 36.5 percent growth in average earning assets achieved both organically and through acquisitions, offset by a $0.68 million reserve established on a currently performing loan relationship which is secured by real-estate. Per share results were further impacted by a 23.1 percent increase in average diluted shares outstanding to 6,054,000 as a result of shares issued for the acquisitions of HomeTown Bank of Villa Rica ($109 million in assets), which closed November 30, 2002, and First National Bank of the South ($127 million in assets), which closed August 29, 2003.

For the first nine months of this year, net income was $4.9 million, up 9.1 percent from the prior-year nine month period, while diluted earnings per share declined to $0.86 from $0.92. The nine-month per share comparison reflects a 16.6 percent increase in average diluted shares outstanding from shares issued in the above-mentioned acquisitions.

At a meeting held October 20, 2003, the Board of Directors of GB&T Bancshares declared a cash dividend of $0.09 per share on the Company's common stock. The newly-declared dividend is payable on November 13, 2003 to shareholders of record as of the close of business on November 3, 2003.

The returns on average assets and average equity for the third quarter of 2003 were 0.72 percent and 7.93 percent, respectively, compared with 1.04 percent and 12.56 percent for the third quarter of 2002.

Richard A. Hunt, President and CEO, commented, "The third quarter was extremely fast-paced, as we continue to consolidate our recently-acquired companies and further expand into growing Georgia markets. This quarter, we completed the acquisition of First National Bank of the South, giving us a foothold in an affluent resort and second-home area southeast of Atlanta that has experienced significant growth and development. Consistent with our community banking philosophy, First National Bank of the South will continue to maintain its name, board and management team. Our experience has taught us that customer satisfaction, as well as long-term revenue growth, are maximized with this approach."

Mr. Hunt continued, "As a result of our several recent acquisitions, our revenue and expense base do not yet fully reflect the impact of growth opportunities nor cost-saving efficiencies. We are working with newly-hired and recently-acquired lenders to maximize their effectiveness in our markets; at the same time, expense levels take time to work through staffing and infrastructure issues. Over time, we want to see the income statement more fully reflect the earnings potential of our asset base and dynamic marketplace. We are pleased to see the efficiency ratio improving as we make progress.

"Our portfolio has performed consistently this past year, and loan quality continues to be good. The newly-identified relationship, from a recent acquisition, is currently performing and we believe adequately secured. We continue to monitor its progress, and believe the situation is improving as we work with the borrower. Overall, our loan portfolio is nearly 90 percent secured by real property which we believe provides strong assurance of ultimate collectibility."

Total revenue, comprised of net interest income and non-interest income, was $10.4 million for the third quarter of 2003, an increase of 28.3 percent over the $8.1 million reported in the prior-year third quarter. Net interest income rose 27.1 percent to $7.9 million, reflecting a 36.5 percent increase in average earning assets partially offset by a 30 basis point decline in the net interest margin, to 4.18 percent. Mr. Hunt noted, "We stabilized the net interest margin within a narrow band throughout 2003, and we see this situation continuing until interest rates eventually rise. The net interest margin was only six basis points lower this quarter than in the second quarter of this year. Loan growth continues to be very strong, reflective of our strong local economy and lenders who are becoming increasingly effective within their local markets.

Non-interest income for the third quarter of 2003 was $2.5 million, an increase of 32.1 percent above the prior-year third quarter. Growth in fee income reflects a combination of acquisition and organic growth, led by growth in service fee income and mortgage origination fees. Mortgage production activity remained strong during the quarter, although origination activity has recently started to taper off. Non-interest income contributed 24.3 percent of operating revenue compared with 23.6 percent a year ago.

Non-interest expense for the third quarter of 2003 was $7.3 million, an increase of 30.3 percent over the prior-year third quarter, again reflecting a combination of acquisition and organic growth. Salaries and employee benefits, the largest component of expense growth, increased 38.2 percent, reflecting the combined impact of a 40.9 percent increase in FTE staff as a result of acquisitions offset by improved staffing efficiencies, as well as merit increases. GB&T Bancshares' efficiency ratio was 71.0 percent for the current quarter compared to 72.1 percent for the previous quarter and 69.7 percent for the third quarter of 2002.

Non-performing assets and charge-offs have remained at reasonable levels as a percent of total assets and average loans, respectively. Mr. Hunt commented, "The dollar level of non-performing assets has increased along with our recent acquisitions; however, we are conservatively postured in our loan loss reserve levels." Past due and non-performing assets now stand at $6.9 million, or 0.75 percent of total assets, compared with $8.2 million and 1.11 percent, respectively, at December 31, 2002, and $3.3 million and 0.55 percent, in the third quarter of 2002. Net charge-offs on an annualized basis were 0.10 percent of average loans for the current quarter compared with 0.29 percent for the fourth quarter of 2002 and 0.11 percent for the prior-year quarter. At period-end, the loan loss reserve was 1.33% of total loans, up from 1.28% at the year-ago quarter.

Total assets were $918.4 million at September 30, 2003, an increase of $318.9 million, or 53.2 percent, from the prior year quarter-end. HomeTown Bank and First National Bank of the South accounted for $236 million, or 74.0 percent, of the increase, while $83 million of the asset growth was organic. Loans rose $233.6 million, or 51.7 percent, to $685.1 million. Total deposits grew by $242.9 million, or 51.7 percent, to $712.3 million.

Shareholders' equity ended the quarter at $95.2 million, a twelve-month increase of $45.9 million, or 93.0 percent, reflecting the impact of the acquisitions of HomeTown Bank and First National Bank of the South. Equity was 10.36 percent of period-end assets. At quarter-end, GB&T Bancshares had 6,792,326 shares of common stock outstanding.

About GB&T Bancshares, Inc.

Based in Gainesville, Georgia, GB&T Bancshares, Inc. is a multi-bank holding company operating five community banks: Gainesville Bank & Trust, United Bank & Trust, Community Trust Bank, HomeTown Bank of Villa Rica, and First National Bank of the South. In addition, the Company owns a consumer finance company, Community Loan Company, with eight offices located in Northern Georgia. As of September 30, 2003, GB&T Bancshares had assets of $918 million, with 20 branches located in growing Georgia markets. GB&T Bancshares' common stock is listed on the Nasdaq National Market under the symbol "GBTB." Please visit our website www.gbt.com for additional information about the company.

Forward-Looking Statements

This release contains forward-looking statements, including statements regarding GB&T's objectives and expectations regarding its future expansion, integration of recently acquired banks, cost savings from recent acquisitions, efficiency, loan portfolio, loan loss reserves, net interest margin, revenue growth and other statements regarding its plans, goals and expectations, which statements are based upon management's beliefs as well as on assumptions made by and data currently available to management. These forward-looking statements are not guarantees of future performance and a variety of factors could cause GB&T's actual results to differ materially from the anticipated or expected results expressed in these forward-looking statements. The following list, which is not intended to be an all-encompassing list of risks and uncertainties affecting GB&T, summarizes several factors that could cause GB&T's actual results to differ materially from those anticipated or expected in these forward-looking statements: economic conditions (both generally and more specifically in the markets where GB&T operates) may be worse than expected, resulting in, among other things, a deterioration in credit quality or a reduced demand for credit; we may be negatively impacted by competition from other companies that provide financial services similar to those offered by GB&T; legislative changes, including changes in accounting standards, may adversely affect the business of GB&T; changes in interest rates may reduce the operating margins or the volumes or values of loans held or made by GB&T; technological changes may increase competitive pressures and increase GB&T's costs, that GB&T may not be able to integrate acquisitions into its existing operations or that new acquisition and alliance opportunities that enhance shareholder value may not be available on terms acceptable to GB&T; and certain other risk factors set forth in our filings with the SEC may impact GB&T. GB&T disclaims any obligation to update or revise publicly or otherwise any forward-looking statements to reflect subsequent events, new information or future circumstances.


                          GB&T Bancshares Inc.
                   CONSOLIDATED FINANCIAL HIGHLIGHTS
                              (Unaudited)

                        ---------------------------------------------
                         3rd Qtr    2nd Qtr  1st Qtr  4th Qtr 3rd Qtr
                          2003      2003     2003     2002     2002
                        --------  -------- -------- -------- --------
                         (dollars in thousands except per share data)          
 EARNINGS
  Net interest income   $  7,865    7,341    6,997    6,409    6,186
  Provision for loan
   loss                 $    861      176      214      256      202
  Non-interest income   $  2,524    2,392    2,352    2,663    1,910
  Non-interest expense  $  7,319    7,291    6,801    5,924    5,616
  Net income            $  1,478    1,733    1,711    2,018    1,534

 PER SHARE DATA
  Basic earnings per
   share                $   0.25     0.32     0.32     0.41     0.32
  Diluted earnings per
   share                $   0.24     0.31     0.31     0.40     0.31
  Book value per share  $  14.01    11.75    11.49    11.35    10.34
  Tangible book value
   per share            $   9.59     9.99     9.72     9.57    10.22
  Cash dividend per
   share                $  0.090    0.090    0.085    0.085    0.085

 PERFORMANCE RATIOS
  Return on average
   assets                   0.72%    0.92%    0.94%    1.24%    1.04%
  Return on average
   equity                   7.93%   11.08%   11.28%   15.55%   12.56%
  Net interest margin       4.18%    4.24%    4.14%    4.19%    4.48%
  Non-int exp/Avg 
   assets                   3.58%    3.89%    3.73%    3.63%    3.82%
  Efficiency Ratio         70.98%   72.10%   72.96%   70.22%   69.65%
  Non-interest
   income/Total
   operating revenue       23.72%   24.19%   24.93%   24.03%   23.28%

 MARKET DATA
  Market value per
   share -- Period end  $  22.26    24.57    19.36    17.99    17.01
  Market as a % of book     1.59     2.09     1.68     1.59     1.65
  Cash dividend yield       1.62%    1.47%    1.76%    1.89%    2.00%
  Common stock dividend
   payout ratio            37.50%   29.03%   27.42%   21.25%   27.42%
  Period-end common
   shares outstanding
   (000)                   6,792    5,391    5,365    5,357    4,769
  Common stock market
   capitalization
   ($Millions)          $ 151.20   132.45   103.88    96.37    81.12

 CAPITAL & LIQUIDITY
  Equity to assets         10.36%    8.35%    8.14%    8.19%    8.23%
  Period-end tangible
   equity to assets         7.33%    7.19%    6.97%    7.00%    8.14%
  Total risk-based
   capital ratio            0.00%   12.84%   12.53%   12.58%   10.97%
  Average loans to
   deposits                96.00%   94.25%   95.49%   95.78%   98.67%

 ASSET QUALITY
  Net charge-offs       $    157       87      314      348      129
  (Ann.) Net loan
    charge-offs/Average
    loans                   0.10%    0.06%    0.23%    0.29%    0.11%
  Non-performing loans  $  4,849    3,332    4,110    5,506    1,381
  OREOs                 $  1,279    1,171    1,263      891    1,047
  90-day past dues      $    750      597      449    1,814      891
  NPAs + 90 day past
   due/Total assets         0.75%    0.67%    0.77%    1.11%    0.55%
  Allowance for loan
   losses/Total loans       1.33%    1.33%    1.32%    1.39%    1.28%
  Allowance for loan
   losses/NPA's
   + 90 days past due     132.00%  147.59%  127.76%   91.80%  174.42%

 END OF PERIOD BALANCES
  Total loans, net of
   unearned fees        $685,098  565,055  562,682  542,834  451,490
  Total assets          $918,378  758,048  757,953  741,972  599,446
  Deposits              $712,289  605,063  600,204  580,248  469,416
  Shareholders' equity  $ 95,168   63,325   61,676   60,777   49,310
  Full-time equivalent
   employees                 365      330      312      312      259

 AVERAGE BALANCES
  Loans                 $611,294  564,210  555,727  482,240  449,034
  Total earning assets  $747,089  694,728  685,075  607,319  547,471
  Total assets          $811,307  751,953  738,743  647,262  583,509
  Deposits              $636,735  598,642  581,985  503,507  455,065
  Shareholders' equity  $ 73,931   62,739   61,507   51,502   48,454

                GB&T BANCSHARES, INC. AND SUBSIDIARIES
                   Consolidated Statements of Income
                              (Unaudited)

                               Three months ended   Nine months ended
                                   September 30,      September 30,
                                  2003      2002     2003      2002
                                -------   -------   -------   -------
                                    (amounts in thousands, except
                                             per share data)
 Interest income:
  Loans, including fees         $10,480   $ 8,604   $30,185   $25,220
  Investment securities:
   Taxable                          882       948     2,817     2,938
   Nontaxable                       169       173       495       526
  Federal funds sold                 11        30       117        69
  Interest-bearing deposits
   in banks                           9         7        26        25
                                -------   -------   -------   -------
    Total interest income        11,551     9,762    33,640    28,778
                                -------   -------   -------   -------

 Interest expense:
  Deposits                        2,723     2,738     8,599     8,627
  Federal funds purchased and
   securities sold under
   repurchase agreements             45        57       128       190
  Federal Home Loan Bank
   advances                         703       743     2,068     2,193
  Other borrowings                  215        38       642        92
                                -------   -------   -------   -------
    Total interest expense        3,686     3,576    11,437    11,102
                                -------   -------   -------   -------

    Net interest income           7,865     6,186    22,203    17,676

 Provision for loan losses          861       202     1,251       589
                                -------   -------   -------   -------

    Net interest income after
     Provision for loan losses    7,004     5,984    20,952    17,087
                                -------   -------   -------   -------

 Other income:
  Service charges on deposit
   accounts                       1,266       852     3,540     2,610
  Mortgage origination fees         698       429     1,981       964
  Insurance commissions             138       152       431       447
  Gain on sale of securities         78        33       155       170
  Other operating income            344       444     1,161     1,208
                                -------   -------   -------   -------
    Total other income            2,524     1,910     7,268     5,399
                                -------   -------   -------   -------

 Other expense:
  Salaries and employee benefits  4,391     3,178    12,686     9,102
  Net occupancy and equipment
   expense                        1,103       843     3,137     2,414
  Other operating expenses        1,825     1,595     5,588     4,304
                                -------   -------   -------   -------
    Total other expense           7,319     5,616    21,411    15,820
                                -------   -------   -------   -------
    Income before income taxes    2,209     2,278     6,809     6,666

 Income tax expense                 731       744     1,887     2,156
                                -------   -------   -------   -------
    Net income                  $ 1,478   $ 1,534   $ 4,922   $ 4,510
                                =======   =======   =======   =======

 Earnings per share:
  Basic                         $  0.25   $  0.32   $  0.89   $  0.95
                                =======   =======   =======   =======
  Diluted                       $  0.24   $  0.31   $  0.86   $  0.92
                                =======   =======   =======   =======
 Weighted average shares
  Basic                           5,848     4,767     5,532     4,762
                                =======   =======   =======   =======
  Diluted                         6,054     4,918     5,717     4,903
                                =======   =======   =======   =======

 Cash dividends per
  common share                  $ 0.090   $ 0.085   $ 0.265   $ 0.250
                                =======   =======   =======   =======

                         GB&T Bancshares, Inc.
             Condensed Consolidated Statement of Condition

                                         9/30/2003        9/30/2002
 Assets (in thousands):                 (Unaudited)      (Unaudited)

 Cash and due from banks                  $ 24,960         $ 16,718
 Interest-bearing deposits in banks            542            2,527
 Federal funds sold                              0           18,343
                                          --------         --------
      Total cash and equivalents            25,502           37,588
                                          --------         --------

 Securities available-for-sale,
  at fair value                            136,422           84,243
 Restricted equity securities                4,477            3,463
                                          --------         --------
     Total securities                      140,899           87,706
                                          --------         --------

 Loans                                     685,098          451,490
 Allowance for loan losses                   9,079            5,789
                                          --------         --------
    Loans, net                             676,019          445,701
                                          --------         --------

 Premises and equipment                     26,117           16,042
 Goodwill and intangible assets             30,008              566
 Other assets                               19,833           11,843
                                          --------         --------
      Total assets                        $918,378         $599,446
                                          ========         ========

 Liabilities and Stockholders'
   Equity (in thousands):

 Deposits

    Non interest-bearing                  $ 96,406         $ 63,202
    Interest-bearing                       615,883          406,214
                                          --------         --------
      Total deposits                       712,289          469,416
                                          --------         --------
 Federal funds purchased and securities
  sold under repurchase agreements          14,455           14,389
 Federal Home Loan Bank advances            75,825           57,026
 Other borrowings                              233            4,822
 Other liabilities                           5,408            4,483
 Company guaranteed trust preferred
  securities                                15,000                0
                                          --------         --------
      Total liabilities                    823,210          550,136
                                          --------         --------

 Stockholders' equity:

 Capital stock                              67,888           25,807
 Retained earnings                          26,626           21,518
 Accumulated other comprehensive
  income (loss)                                654            1,985
                                          --------         --------
    Total stockholders' equity              95,168           49,310
                                          ========         ========
      Total liabilities and stockholders'
       equity                             $918,378         $599,446
                                          ========         ========


            

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