Branch Network Doubles in Size
ELLIJAY, Ga., Jan. 26, 2007 (PRIME NEWSWIRE) -- Appalachian Bancshares, Inc. (Nasdaq:APAB) today announced that net income for year ended December 31, 2006 was $6.0 million, a 17.2% increase when compared to net income of $5.1 million, for the previous year, 2005. Diluted earnings per share was $1.14 per share, on 5,279,000 weighted average shares, for 2006, compared to $1.21 per share, on 4,247,000 weighted average shares, for 2005, representing a year-to-year decrease in diluted earnings per share of 5.8%, against an increase in weighted average shares outstanding of 24.3%. The Company also reported that net income for the fourth quarter of 2006 was $1.6 million, or $0.31 per diluted share, a 9.0% increase when compared to $1.5 million, or $0.30 per diluted share, for the same period in 2005.
"2006 has been an important year for our company," said Tracy Newton, Chief Executive Officer. "For the first time, we achieved net income of over $6.0 million, and we continued to experience double-digit growth rates in assets, loans and deposits. For the year, total assets grew 27.9% to $758.2 million, total loans grew 38.1% to $631.8 million, and total deposits grew 37.6% to $651.1 million. In addition, our net interest margin improved to 5.04% at December 31, 2006, compared to 4.77% at December 31, 2005. I also am excited about our opportunities in 2007, especially in light of our expansionary activities contemplated for 2007, including the opening of our new thrift subsidiary, including new branch offices in Murphy, North Carolina, and Ducktown, Tennessee, which we anticipate to occur in the first quarter of 2007."
Return on average assets was 0.91% for the year ended December 31, 2006, compared to 0.99% for the same period a year ago. Return on average shareholder's equity was 9.57% for the year ended December 31, 2006, compared to 12.18% for the same period a year ago. Book value per share stood at $12.83 per share at December 31, 2006, compared to $11.62 per share at December 31, 2005. The decline in return on average equity resulted from a 49.1% increase in the Company's average shareholders' equity, from 2005 to 2006, as well as from increases in non-interest expenses related to the Company's expansionary activities in 2006. Non-interest expenses directly related to these expansionary activities, including increases in salaries and employee benefits, occupancy expenses, were approximately $2.9 million during 2006. At December 31, 2006, $56.4 million in loans and $38.9 million in deposits were attributable to the branches and loan production offices opened during 2006 in new markets.
Commenting on the Company's 2006 expansionary activities, Mr. Newton stated, "We achieved many goals in 2006, including doubling the size of our branch network from four to eight offices, and entering into three new Georgia markets -- Chatsworth, Dawsonville and McCaysville. We also opened loan production offices in Murphy, North Carolina and Ducktown, Tennessee, which, as mentioned, will become branch banking offices, upon the opening of our new thrift subsidiary, thereby achieving our goal for 2007 of becoming a multi-state bank franchise."
Conference Call
The Company will hold a conference call on Friday, January 26, 2007, 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 1-877-407-9210. The conference call will also be available by webcast through the Company's website, www.acbanks.net, 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.
Appalachian Bancshares, Inc., based in Ellijay, Georgia, is the holding company of Appalachian Community Bank, a state-chartered bank organized under the laws of the State of Georgia. Appalachian Community Bank, which also operates in Gilmer County, Georgia, under the trade name of Gilmer County Bank, provides a full range of community banking services to individuals and to small and medium-sized businesses, through its eight full-service branches in North Georgia (Ellijay, East Ellijay, Blue Ridge, Blairsville, Chatsworth, Dawsonville and McCaysville), as well as through loan production offices in Murphy, North Carolina and Ducktown, Tennessee. 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.acbanks.net.
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.
Please contact Tracy Newton, Chief Executive Officer, or Joe Moss, President and Chief Operating Officer, at (706) 276-8160, with any questions or requests for additional information.
APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(in thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
------------------ ------------------
2006 2005 2006 2005
-------- -------- -------- --------
Summary Results of Operations
Data:
Interest income $ 15,494 $ 10,135 $ 53,193 $ 34,751
Interest expense 7,144 3,653 22,494 11,880
-------- -------- -------- --------
Net interest income 8,350 6,482 30,699 22,871
Provision for loan losses 794 665 3,253 2,211
-------- -------- -------- --------
Net interest income after
provision for loan
losses 7,556 5,817 27,446 20,660
Noninterest income 1,125 937 3,971 3,302
Noninterest expense 6,295 4,442 22,561 16,338
-------- -------- -------- --------
Income before taxes 2,386 2,312 8,856 7,624
Income tax expense 744 806 2,852 2,502
-------- -------- -------- --------
Net income $ 1,642 $ 1,506 $ 6,004 $ 5,122
======== ======== ======== ========
Per Share Data:
Net income, basic $ 0.32 $ 0.30 $ 1.16 $ 1.24
Net income, diluted 0.31 0.30 1.14 1.21
Book value 12.83 11.62 12.83 11.62
Weighted average number of
shares outstanding:
Basic 5,202 4,959 5,171 4,123
Diluted 5,268 5,078 5,279 4,247
Performance Ratios:
Return on average assets(a) 0.88% 1.05% 0.91% 0.99%
Return on average equity(a) 9.93% 10.78% 9.57% 12.18%
Net interest margin(a) (b) 4.84% 4.88% 5.04% 4.77%
Efficiency ratio(c) 66.44% 59.87% 65.07% 62.42%
Growth Ratios and Other
Data:
Percentage change in net
income 9.03% 17.22%
Percentage change in
diluted net income per
share 3.33% -5.79%
At December 31,
------------------
2006 2005
-------- --------
Summary Balance Sheet Data:
Assets 758,214 592,606
Average earning assets (quarter-to-date) 692,895 533,110
Average earning assets (year-to-date) 617,595 485,623
Investment securities 74,725 71,570
Loans 631,786 457,418
Allowance for loan losses 7,670 6,059
Deposits 651,134 473,310
Short-term borrowings 4,738 24,892
Accrued interest 1,454 728
Federal Home Loan Bank advances 25,050 24,950
Subordinated long-term capital notes 6,186 6,186
Other liabilities 2,889 2,715
Shareholders' equity 66,763 59,825
Asset Quality Ratios:
Nonperforming loans to total loans 0.55% 0.24%
Nonperforming assets to total assets 0.62% 0.21%
Net charge-offs to average total loans 0.30% 0.12%
Allowance for loan losses to nonperforming loans 220.21% 555.36%
Allowance for loan losses to total loans 1.21% 1.32%
Growth Ratios and Other Data:
Percentage change in assets 27.95%
Percentage change in loans 38.12%
Percentage change in deposits 37.57%
Percentage change in equity 11.60%
Loans to deposits ratio 97.03%
---------------------------------------------
(a) Annualized.
(b) Taxable equivalent.
(c) 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 Year Ended
December 31, December 31,
----------------- -----------------
2006 2005 2006 2005
------- ------- ------- -------
Interest Income
Interest and fees on loans $14,607 $ 9,302 $49,843 $32,014
Interest on securities:
Taxable securities 618 494 2,301 1,843
Nontaxable securities 160 168 668 655
Interest on deposits with
other banks 5 7 30 20
Interest on federal funds sold 104 164 351 219
------- ------- ------- -------
Total Interest Income 15,494 10,135 53,193 34,751
------- ------- ------- -------
Interest Expense
Interest on deposits 6,558 3,223 20,351 10,132
Interest on short-term
borrowings 129 24 472 174
Interest on Federal Home Loan
Bank advances 332 293 1,180 1,170
Interest on subordinated
long-term capital notes 125 113 491 404
------- ------- ------- -------
Total Interest Expense 7,144 3,653 22,494 11,880
------- ------- ------- -------
Net Interest Income 8,350 6,482 30,699 22,871
Provision for loan losses 794 665 3,253 2,211
------- ------- ------- -------
Net Interest Income After
Provision for Loan Losses 7,556 5,817 27,446 20,660
------- ------- ------- -------
Noninterest Income
Customer service fees 450 401 1,650 1,434
Mortgage origination
commissions 406 269 1,348 959
Other operating income 269 267 973 909
------- ------- ------- -------
Total Noninterest Income 1,125 937 3,971 3,302
------- ------- ------- -------
Noninterest Expenses
Salaries and employee benefits 3,652 2,406 13,341 8,741
Occupancy, furniture and
equipment expense 785 478 2,685 2,014
Other operating expenses 1,858 1,558 6,535 5,583
------- ------- ------- -------
Total Noninterest expense 6,295 4,442 22,561 16,338
------- ------- ------- -------
Income before income taxes 2,386 2,312 8,856 7,624
Income tax expense 744 806 2,852 2,502
------- ------- ------- -------
Net Income $ 1,642 $ 1,506 $ 6,004 $ 5,122
======= ======= ======= =======
Earnings Per Common Share
Basic $ 0.32 $ 0.30 $ 1.16 $ 1.24
Diluted $ 0.31 $ 0.30 $ 1.14 $ 1.21
Cash Dividends Declared
Per Common Share $ -- $ -- $ -- $ --
Weighted Average Shares
Outstanding
Basic 5,202 4,959 5,171 4,123
Diluted 5,268 5,078 5,279 4,247
APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
(Dollars in thousands)
December 31, December 31,
2006 2005
--------- ---------
Assets
Cash and due from banks $ 7,940 $ 20,772
Interest-bearing deposits with other banks 541 13,765
Federal funds sold 3,107 799
--------- ---------
Cash and Cash Equivalents 11,588 35,336
Securities available-for-sale 74,725 71,570
Loans, net of unearned income 631,786 457,418
Allowance for loan losses (7,670) (6,059)
--------- ---------
Net Loans 624,116 451,359
Premises and equipment, net 23,412 16,797
Accrued interest 8,157 4,751
Cash surrender value on life insurance 8,438 8,143
Intangibles, net 2,197 1,992
Other assets 5,581 2,658
--------- ---------
Total Assets $ 758,214 $ 592,606
========= =========
Liabilities and Shareholders' Equity
Liabilities
Noninterest-bearing deposits $ 53,422 $ 46,561
Interest-bearing deposits 597,712 426,749
--------- ---------
Total Deposits 651,134 473,310
Short-term borrowings 4,738 24,892
Accrued interest 1,454 728
Federal Home Loan Bank advances 25,050 24,950
Subordinated long-term capital notes 6,186 6,186
Other liabilities 2,889 2,715
--------- ---------
Total Liabilities 691,451 532,781
--------- ---------
Shareholders' Equity
Preferred Stock, 20,000,000 shares
authorized, none issued -- --
Common stock, par value $0.01 per share,
20,000,000 shares authorized, 5,280,497
shares issued at December 31, 2006, and
5,225,097 shares issued at December 31,
2005 53 52
Paid-in capital 43,870 43,184
Retained earnings 23,761 17,757
Accumulated other comprehensive income
(loss): net unrealized holding gains
(losses) on securities available-for-
sale, net of deferred income tax (221) (468)
Treasury stock, at cost (75,973 shares at
December 31, 2006 and 2005) (700) (700)
--------- ---------
Total Shareholders' Equity 66,763 59,825
--------- ---------
Total Liabilities and Shareholders' Equity $ 758,214 $ 592,606