ELLIJAY, Ga., April 30, 2009 (GLOBE NEWSWIRE) -- Appalachian Bancshares, Inc. (Nasdaq:APAB), holding company for Appalachian Community Bank, Appalachian Community Bank, F.S.B., and Appalachian Real Estate Holdings, Inc. reported consolidated total assets of $1.2 billion, at March 31, 2009, compared to $1.0 billion at March 31, 2008, an increase of 21.0%. Total loans net of unearned income were $883.0 million at March 31, 2009, an increase of $37.5 million, or 4.4%, when compared with $845.6 million at March 31, 2008. Deposits grew to $1.1 billion at March 31, 2009, an increase of $218.0 million, or 25.8%, when compared to $846.1 million at March 31, 2008.
Tracy Newton, President and Chief Executive Officer, stated that, "The challenges of the fourth quarter of 2008 continued during the recent quarter. Volatile financial events continue to promote an environment of fear and uncertainty causing a continued lack of consumer confidence and conservative spending in our markets. Although, our team remains determined with a 'Together We Can' attitude, as we continue to focus on building liquidity, lowering wholesale funding, identifying and providing proper reserves for problem assets, and maintaining a strong capitalized position. We are well poised to re-price many of our interest bearing deposits in the second half of 2009. This should give us much needed relief on our net interest margin in the months to come."
Net loss for the first quarter of 2009 was $1.8 million, or $(0.32) per diluted share, which is a 254.4% decrease in net income when compared to $1.1 million, or $0.21 per diluted share, for the same quarter in 2008. Our decrease in net income for the first quarter 2009 was primarily due to our provision for loan losses of $3.7 million, which represent an increase of $2.8 million when compared to the same period in 2008. A decreasing net interest margin in the first quarter of 2009 compared to 2008 also contributed to our net losses. Our net interest margin was 2.70% for the quarter ended March 31, 2009, compared to 4.29% the same quarter in 2008. We reversed interest, due to placing loans on non-accrual, during the first quarter of 2009, which represents an 11 basis point decrease of our margin compared to only a 6 basis point reduction during the same period in 2008. In addition, we sold investment securities and took a $1.0 million net gain in the first quarter 2009 compared to only a $9 thousand net gain for the same period in 2008. We reinvested the sales proceeds in shorter term securities with lesser risk weights to improve our total risk based capital position.
Return on average shareholders' equity was (9.71%) annualized for the first quarter of 2009, compared to 6.10% for the same period in 2008. Return on average assets was (0.59%) annualized for the first quarter of 2009, compared to 0.46% for the same period in 2008.
Mr. Newton commented that, "Our non-performing assets to total assets ratio increased to 5.69% at March 31, 2009, from 3.50% at December 31, 2008 and from 0.59% at March 31, 2008. Our non-performing loans to total loans ratio was 5.76% at March 31, 2009, compared to 3.18% at December 31, 2008 and 0.50% at March 31, 2008. Our net charge-off ratio was 0.46% for first quarter 2009, compared to 0.58% for the fourth quarter 2008 and 0.07% for the quarter ended March 31, 2008. Considering increasing risks in our loan portfolio and our timely approach that allows us to quickly identify troubled loans, we believe that our loan loss reserves of 1.60% of gross loans outstanding at March 31, 2009, compared to 1.21% of gross loans outstanding at March 31, 2008, adequately prepares us for identified potential future losses. As always, if conditions continue to worsen, additional loan loss reserve provisions will be provided."
Total revenue, net of interest expense, was $8.9 million for the first quarter of 2009 and $11.0 million for the first quarter 2008, a decrease of 19.2%. The decrease in total revenue, net of interest expense, is primarily due to the decrease in our net interest margin, which was partially offset by the $1 million gain on the sale of securities.
Book value per share stood at $12.86 at March 31, 2009, compared to $14.14 per share at March 31, 2008, a decrease of approximately 9.1%.
Conference Call
The Company will hold a conference call on Thursday, April 30, 2009 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 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, Appalachian Community Bank, F.S.B., a federally-chartered thrift and Appalachian Real Estate Holdings, Inc. 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 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)
(in thousands, except per share data)
Three Months Ended
March 31,
------------------------
2009 2008
---------- ----------
Summary Results of Operations Data:
Interest income $ 15,670 $ 18,643
Interest expense 9,007 8,929
---------- ----------
Net interest income 6,663 9,714
Provision for loan losses 3,726 955
---------- ----------
Net interest income after provision
for loan losses 2,937 8,759
Noninterest income 2,208 1,265
Noninterest expense 8,165 8,362
---------- ----------
Income (loss) before taxes (3,020) 1,662
Income tax expense (benefit) (1,264) 525
---------- ----------
Net income (loss) $ (1,756) $ 1,137
========== ==========
Per Share Data:
Net income (loss), basic $ (0.32) $ 0.21
Net income (loss), diluted (0.32) 0.21
Book value 12.86 14.14
Weighted average number of shares
outstanding:
Basic 5,452,769 5,348,966
Diluted 5,452,769 5,348,966
Performance Ratios:
Return on average assets(1) -0.59% 0.46%
Return on average equity(1) -9.71% 6.10%
Net interest margin(1) (2) 2.70% 4.29%
Efficiency ratio(3) 104.01% 76.23%
Growth Ratios and Other Data:
Percentage change in net income -254.44%
Percentage change in diluted
net income per share -253.35%
APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(in thousands, except per share data)
At March 31,
------------------------
2009 2008
---------- ----------
Summary Balance Sheet Data:
Assets $1,234,348 $1,020,048
Average earning assets 1,011,451 918,345
Securities available-for-sale 206,119 75,732
Restricted equity securities 5,225 4,494
Loans, held for sale 9,055 6,406
Loans 883,016 845,558
Allowance for loan losses 14,149 10,254
Deposits 1,064,140 846,123
Short-term borrowings 10,330 24,710
Accrued interest 2,324 1,929
Federal Home Loan Bank advances 72,000 62,250
Subordinated long-term
capital notes 12,511 6,186
Other liabilities 2,640 2,895
Shareholders' equity 70,403 75,955
Asset Quality :
Asset Quality Ratios
Nonperforming loans to total loans 5.76% 0.50%
Nonperforming assets to total assets 5.69% 0.59%
Allowance for loan losses to
nonperforming loans 27.82% 243.56%
Allowance for loan losses to total loans 1.60% 1.21%
At March 31,
--------------------------------------
2009 2008
------------------ ------------------
% of % of
Total Total
Loans by Category Amount Loans Amount Loans
-------- -------- -------- --------
Real estate - acquisition &
development $380,430 43.08% $409,903 48.48%
Real estate - commercial 173,119 19.61% 165,798 19.61%
Real estate - residential 221,974 25.14% 185,426 21.93%
Commercial business 71,927 8.15% 48,735 5.76%
Other loans 35,566 4.02% 35,696 4.22%
-------- --------
Total Loans $883,016 $845,558
======== ========
At March 31,
--------------------------------------
2009 2008
------------------ ------------------
% of % of
Nonperforming assets Total Total
by category: Non- Non-
Loans Amount performing Amount performing
-------- -------- -------- --------
Real estate - acquisition
& development $ 31,495 44.82% $ 1,556 25.86%
Real estate - commercial 6,500 9.25% 669 11.12%
Real estate - residential 10,040 14.29% 1,353 22.49%
Commercial business 2,683 3.82% 492 8.18%
Other loans 149 0.21% 140 2.33%
Other Real Estate
Real estate - acquisition
& development 8,658 12.32% 665 11.05%
Real estate - commercial 5,127 7.30% 207 3.44%
Real estate - residential 5,281 7.51% 845 14.05%
Commercial business 84 0.11% -- 0.00%
Other Repossessed Property
Other loans 258 0.37% 89 1.48%
-------- --------
Total Nonperforming
Assets $ 70,275 $ 6,016
======== ========
APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(in thousands, except per share data)
At March 31,
--------------------------------------
2009 2008
------------------ ------------------
% of % of
Total Total
Quarterly Net Charge-Offs Average Average
by Category Amount Loans Amount Loans
-------- -------- -------- --------
Real estate - acquisition
& development $ 2,641 0.30% $ 311 0.04%
Real estate - commercial (688) -0.08% 7 0.00%
Real estate - residential 908 0.10% 45 0.01%
Commercial business 1,102 0.12% 28 0.00%
Other loans 123 0.02% 118 0.02%
-------- --------
Total Net Charge-Offs $ 4,086 0.46% $ 509 0.07%
======== ========
At
December 31,
Growth Ratios and Other Data: 2008
--------
Percentage change in assets 21.01%
Percentage change in loans 4.43%
Percentage change in
deposits 25.77%
Percentage change in equity -7.31%
Loans to deposits ratio 82.98%
-----------------------------
(1) Annualized.
(2) Taxable equivalent.
(3) Computed by dividing noninterest expense by the sum of the net
interest income and noninterest income excluding any realized
gains/losses on securities.
APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
(Dollars in thousands)
March 31, December 31, March 31,
2009 2008 2008
---------- ---------- ----------
Assets
Cash and due from banks $ 54,747 $ 12,825 $ 15,334
Interest-bearing deposits
with other banks 171 731 191
Federal funds sold 1,555 133,351 22,370
---------- ---------- ----------
Cash and Cash Equivalents 56,473 146,907 37,895
Securities available-for-sale 206,119 79,308 75,732
Restricted equity securities 5,225 4,932 4,494
Loans, held for sale 9,055 2,783 6,406
Loans, net of unearned income 883,016 885,374 845,558
Allowance for loan losses (14,149) (14,510) (10,254)
---------- ---------- ----------
Net Loans 868,867 870,864 835,304
Premises and equipment, net 40,594 39,638 33,378
Accrued interest 8,321 9,289 10,201
Cash surrender value on
life insurance 9,197 9,140 8,865
Intangibles, net 1,992 1,992 2,043
Foreclosed assets 19,408 13,323 1,806
Other assets 9,097 7,502 3,924
---------- ---------- ----------
Total Assets $1,234,348 $1,185,678 $1,020,048
========== ========== ==========
Liabilities and
Shareholders' Equity
Liabilities
Noninterest-bearing
deposits $ 52,825 $ 50,035 $ 54,831
Interest-bearing deposits 1,011,315 963,241 791,292
---------- ---------- ----------
Total Deposits 1,064,140 1,013,276 846,123
Short-term borrowings 10,330 10,604 24,710
Accrued interest 2,324 1,936 1,929
Federal Home Loan Bank
advances 72,000 72,000 62,250
Subordinated long-term
capital notes 12,511 12,511 6,186
Other liabilities 2,640 2,913 2,895
---------- ---------- ----------
Total Liabilities 1,163,945 1,113,240 944,093
---------- ---------- ----------
Shareholders' Equity
Preferred Stock, 20,000,000
shares authorized, none
issued -- -- --
Common stock, par value
$0.01 per share,
20,000,000 shares
authorized, 5,475,701,
5,372,505 and 5,372,505
shares issued at March 31,
2009, December 31, 2008 and
March 31, 2008, respectively 55 54 54
Paid-in capital 45,296 44,979 44,770
Retained earnings 24,716 26,472 30,468
Accumulated other
comprehensive income 336 933 663
---------- ---------- ----------
Total Shareholders' Equity 70,403 72,438 75,955
---------- ---------- ----------
Total Liabilities and
Shareholders' Equity $1,234,348 $1,185,678 $1,020,048
========== ========== ==========
APPALACHIAN BANCSHARES, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except shares and per share data)
Three Months Ended
March 31,
------------------------
2009 2008
---------- ----------
Interest Income
Interest and fees on loans $ 14,784 $ 17,659
Interest on securities: --
Taxable securities 735 779
Nontaxable securities 131 160
Interest on deposits with other banks -- 2
Interest on federal funds sold 20 43
---------- ----------
Total Interest Income 15,670 18,643
---------- ----------
Interest Expense
Interest on deposits 8,028 8,116
Interest on short-term borrowings 121 124
Interest on Federal Home Loan Bank
advances 597 580
Interest on subordinated long-term
capital notes 261 109
---------- ----------
Total Interest Expense 9,007 8,929
---------- ----------
Net Interest Income 6,663 9,714
Provision for loan losses 3,726 955
---------- ----------
Net Interest Income After Provision
for Loan Losses 2,937 8,759
---------- ----------
Noninterest Income
Customer service fees 518 564
Mortgage origination commissions 436 446
Net gains on sales of securities 1,021 9
Other operating income 233 246
---------- ----------
Total Noninterest Income 2,208 1,265
---------- ----------
Noninterest Expenses
Salaries and employee benefits 4,136 4,991
Occupancy, furniture and equipment expense 1,127 1,082
Other operating expenses 2,902 2,289
---------- ----------
Total Noninterest expense 8,165 8,362
---------- ----------
Income (loss) before income taxes (3,020) 1,662
Income tax expense (benefit) (1,264) 525
---------- ----------
Net Income (Loss) $ (1,756) $ 1,137
========== ==========
Earnings (Loss) Per Common Share
Basic $ (0.32) $ 0.21
Diluted (0.32) 0.21
Cash Dividends Declared Per Common Share -- --
Weighted Average Shares Outstanding
Basic 5,452,769 5,348,966
Diluted 5,452,769 5,348,966