ELLIJAY, Ga., July 27, 2007 (PRIME NEWSWIRE) -- Appalachian Bancshares, Inc. (Nasdaq:APAB), holding company for Appalachian Community Bank and Appalachian Community Bank, F.S.B., today announced that net income for the second quarter of 2007 was $1,501,000, or $0.29 per diluted share, a 4.38% increase in net income when compared to $1,438,000, or $0.27 per diluted share, for the same period in 2006.
Net income for the first six months of 2007 was $3,060,000, or $0.58 per diluted share, a 2.93% increase in net income when compared to $2,973,000, or $0.56 per diluted share, for the same period in 2006.
Total assets grew to $873.6 million, as of June 30, 2007, compared to $675.0 million on June 30, 2006, an increase of 29.4%. Total loans were $729.8 million, an increase of $189.5 million, or 35.0%, when compared with $540.4 million on June 30, 2006. Deposits grew to $746.2 million as of June 30, 2007, an increase of $188.2 million, or 33.7%, when compared to $558.0 million on June 30, 2006.
Annualized return on average shareholders' equity was 9.04% for the six months ended June 30, 2007, compared to 9.83% for the six months ended June 30, 2006. Annualized return on average assets was 0.75% for the six months ended June 30, 2007, compared to 0.99% for the six months ended June 30, 2006. The net interest margin was 4.86% for the six months ended June 30, 2007, compared to 5.18% for the same period a year ago. Book value per share stood at $13.30 at June 30, 2007, compared to $12.12 per share at June 30, 2006, an increase of approximately 9.7%.
Tracy Newton, Chief Executive Officer, commented, "Our performance in the first six months of 2007 reflects our investment in infrastructure and personnel needed to support our expansionary efforts, which, during the second quarter of 2007, culminated with the opening our first branch office in Dahlonega, Georgia, and the opening of our new thrift subsidiary, Appalachian Community Bank, F.S.B, headquartered in McCaysville, Georgia, with new branch locations in Ducktown, Tennessee, and Murphy, North Carolina." Mr. Newton further stated that, "While the cost associated with our expansionary activities have impacted current earnings, at June 30, 2007, approximately half of our growth in loans and deposits is attributable to our eight new bank and thrift offices opened over the last 9 to 14 months. Moving forward, our primary focus will be on growing market share and improving operations in our existing branch network."
Conference Call
The Company will hold a conference call on Friday, July 27, 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.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 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 twelve banking offices, located in Ellijay, East Ellijay, Blue Ridge, Blairsville, Chatsworth, Dawsonville, McCaysville and Dahlonega, 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.
Please contact Tracy Newton, Chief Executive Officer, Joe Moss, President and Chief Operating Officer, or Keith Hales, Chief Financial Officer at (706) 276-8160, with any questions or requests for additional information.
APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES SELECTED CONSOLIDATED FINANCIAL DATA (Unaudited) (Dollars in thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, -------------------- ------------------------ 2007 2006 2007 2006 -------- ------- ------- -------- Summary Results of Operations Data: Interest income $17,966 $12,513 $34,530 $23,576 Interest expense 8,532 5,087 16,226 9,162 -------- ------- ------- -------- Net interest income 9,434 7,426 18,304 14,414 Provision for loan losses 947 823 1,583 1,708 -------- ------- ------- -------- Net interest income after provision for loan losses 8,487 6,603 16,721 12,706 Noninterest income 1,260 937 2,632 1,796 Noninterest expense 7,435 5,326 14,732 9,912 -------- ------- ------- -------- Income before taxes 2,312 2,214 4,621 4,590 Income tax expense 811 776 1,561 1,617 -------- ------- ------- -------- Net income $ 1,501 $ 1,438 $ 3,060 $ 2,973 ======== ======= ======= ======== Per Share Data: Net income, basic $ 0.29 $ 0.28 $ 0.58 $ 0.58 Net income, diluted 0.29 0.27 0.58 0.56 Book value 13.30 12.12 13.30 12.12 Weighted average number of shares outstanding: Basic 5,255,507 5,156,124 5,235,250 5,154,911 Diluted 5,256,001 5,274,516 5,256,717 5,281,859 Performance Ratios: Return on average assets(1) 0.71% 0.91% 0.75% 0.99% Return on average equity(1) 8.68% 9.36% 9.04% 9.83% Net interest margin(1) (2) 4.83% 5.11% 4.86% 5.18% Efficiency ratio(3) 69.52% 63.69% 70.37% 61.15% Growth Ratios and Other Data: Percentage change in net income 4.38% 2.93% Percentage change in diluted net income per share 7.41% 3.57% -------------------------------------------------------------------- At June 30, -------------------------- 2007 2006 ---- ---- Summary Balance Sheet Data: Assets $ 873,576 $ 674,971 Average earning assets QTD 791,258 589,830 Average earning assets YTD 766,388 567,834 Investment securities 76,974 72,912 Mortgage loans held for sale 4,932 -- Loans, net of unearned income 724,898 540,350 Allowance for loan losses 8,880 6,531 Deposits 746,172 558,021 Short-term borrowings 5,965 17,565 Accrued interest 1,841 1,006 Federal Home Loan Bank advances 39,600 27,250 Subordinated long-term capital notes 6,186 6,186 Other liabilities 3,236 2,414 Shareholders' equity 70,576 62,529 Asset Quality Ratios: Nonperforming loans to total loans 0.63% 0.25% Nonperforming assets to total assets 0.73% 0.21% Net charge-offs to average total loans 0.05% 0.25% Allowance for loan losses to nonperforming loans 193.76% 480.22% Allowance for loan losses to total loans 1.22% 1.21% Growth Ratios and Other Data: Percentage change in assets 29.42% Percentage change in loans 35.07% Percentage change in deposits 33.72% Percentage change in equity 12.87% Loans to deposits ratio 97.81% ------------------------------------------------------------ (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 Six Months Ended June 30, June 30, ------------------- ------------------- 2007 2006 2007 2006 -------- ------- -------- -------- Interest Income Interest and fees on loans $ 17,021 $ 11,630 $ 32,606 $ 21,930 Interest on securities: Taxable securities 706 568 1,397 1,099 Nontaxable securities 153 180 310 347 Interest on deposits with other banks 18 9 64 18 Interest on federal funds sold 68 126 153 182 -------- -------- ------- ------- Total Interest Income 17,966 12,513 34,530 23,576 -------- -------- ------- ------- Interest Expense Interest on deposits 7,895 4,531 15,106 8,201 Interest on federal funds purchased, short-term notes and securities sold under agreements to repurchase 84 122 112 156 Interest on Federal Home Loan Bank advances 419 306 740 573 Interest on subordinated long-term capital notes 134 128 268 232 -------- -------- ------- ------- Total Interest Expense 8,532 5,087 16,226 9,162 -------- -------- ------- ------- Net Interest Income 9,434 7,426 18,304 14,414 Provision for loan losses 947 823 1,583 1,708 -------- -------- ------- ------- Net Interest Income After Provision for Loan Losses 8,487 6,603 16,721 12,706 -------- -------- ------- ------- Noninterest Income Customer service fees 548 411 1,061 787 Mortgage origination commissions 513 278 993 552 Other operating income 199 248 578 457 -------- -------- ------- ------- Total Noninterest Income 1,260 937 2,632 1,796 -------- -------- ------- ------- Noninterest Expenses Salaries and employee benefits 4,523 3,179 8,938 5,869 Occupancy, furniture and equipment expense 909 653 1,763 1,167 Other operating expenses 2,003 1,494 4,031 2,876 -------- -------- ------- ------- Total Noninterest expense 7,435 5,326 14,732 9,912 -------- -------- ------- ------- Income before income taxes 2,312 2,214 4,621 4,590 Income tax expense 811 776 1,561 1,617 -------- -------- ------- ------- Net Income $ 1,501 $ 1,438 $ 3,060 $ 2,973 ======== ======== ======== ======== Earnings Per Common Share Basic 0.29 0.28 0.58 0.58 Diluted 0.29 0.27 0.58 0.56 Cash Dividends Declared Per Common Share -- -- -- -- Weighted Average Shares Outstanding Basic 5,255,507 5,156,124 5,235,250 5,154,911 Diluted 5,256,001 5,274,516 5,256,717 5,281,859 APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) (Dollars in thousands) June 30, Dec. 31, June 30, 2007 2006 2006 -------- ------- -------- Assets Cash and due from banks $ 17,641 $ 7,940 $ 12,484 Interest-bearing deposits with other banks 314 541 9,714 Federal funds sold 2,163 3,107 4,163 -------- ------- -------- Cash and Cash Equivalents 20,118 11,588 26,361 Securities available-for-sale 76,974 74,725 72,912 Mortgage loans held for sale 4,932 -- -- Loans, net of unearned income 724,898 631,786 540,350 Allowance for loan losses (8,880) (7,670) (6,531) -------- ------- -------- Net Loans 716,018 624,116 533,819 Premises and equipment, net 28,531 23,412 20,184 Accrued interest 8,757 8,157 5,444 Cash surrender value on life insurance 8,604 8,438 8,286 Intangibles, net 2,135 2,197 1,992 Other assets 7,507 5,581 5,973 -------- ------- -------- Total Assets $873,576 $758,214 $674,971 ======== ======== ======== Liabilities and Shareholders' Equity Liabilities Noninterest-bearing deposits $ 55,679 $ 53,422 $ 56,471 Interest-bearing deposits 690,493 597,712 501,550 -------- ------- -------- Total Deposits 746,172 651,134 558,021 Short-term borrowings 5,965 4,738 17,565 Accrued interest 1,841 1,454 1,006 Federal Home Loan Bank advances 39,600 25,050 27,250 Subordinated long-term capital notes 6,186 6,186 6,186 Other liabilities 3,236 2,889 2,414 -------- ------- -------- Total Liabilities 803,000 691,451 612,442 -------- ------- -------- Shareholders' Equity Preferred Stock, 20,000,000 shares authorized, none issued -- -- -- Common stock, par value $0.01 per share, 20,000,000 shares authorized, 5,304,726 shares issued at June 30, 2007, 5,280,497 shares issued at December 31, 2006 and 5,235,597 shares issued at June 30, 2006 53 53 52 Paid-in capital 44,233 43,870 43,364 Retained earnings 26,821 23,761 20,730 Accumulated other comprehensive loss (531) (221) (917) Treasury stock, at cost (-0- shares at June 30, 2007, 75,973 shares at December 31, 2006 and June 30, 2006) -- (700) (700) -------- ------- -------- Total Shareholders' Equity 70,576 66,763 62,529 -------- ------- -------- Total Liabilities and Shareholders' Equity $873,576 $758,214 $674,971 ======== ======== ========