- Assets Grow to $971 Million during 2007 - Non-Performing Assets Drop to $6.2 Million from $7.3 Million - Net Income Comes in at $5.6 Million or $1.06 per Diluted Share - Net Interest Margin Remains Above Peer Levels at 4.68% for 2007 - Newly Expanded Branches Drive Core Deposit Growth of 19.8%
ELLIJAY, Ga. Jan. 31, 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 $971.2 million, as of December 31, 2007, compared to $758.2 million on December 31, 2006, an increase of 28.1%. Total loans, net of allowance, were $797.7 million, an increase of $174.3 million, or 28.0%, when compared with $623.4 million on December 31, 2006. Deposits grew to $807.6 million as of December 31, 2007, an increase of $156.5 million, or 24.0%, when compared to $651.1 million on December 31, 2006.
Tracy Newton, President and Chief Executive Officer, stated that, "The fourth quarter was certainly one that will be long remembered both from the effects of a slower real estate and housing market and the way the market is viewing the value of the assets of our company. We have leveraged the specialized talents of real estate lenders during the quarter to pinpoint potential credit issues and to deal with them quickly and efficiently as shown in our operating results."
Net income for 2007 was $5,570,000, or $1.06 per diluted share, a 7.2% decrease in net income when compared to $6,004,000, or $1.14 per diluted share, for 2006. Net income for the fourth quarter of 2007 was $1,103,000, or $0.21 per diluted share, a 32.8% decrease in net income when compared to $1,642,000, or $0.31 per diluted share, for the same period in 2006.
Return on average shareholders' equity was 7.93% for 2007, compared to 9.57 % for 2006. Return on average assets was 0.65% for 2007, compared to 0.91% for 2006.
Mr. Newton commented that, "In spite of a continued weakness in the residential housing market and one of the most challenging quarters that I can remember, our outstanding staff did a superb job finishing up the year. During the fourth quarter, our non-performing assets to total assets decreased 22.0% from 0.82% at September 30, 2007 to 0.64% at December 31, 2007. Compared to the end of 2006, our non-performing assets to total assets only increased 3.2% to 0.64% from 0.62%. Likewise, our non-performing loans to total loans decreased 26.0% to 0.57% at year end from 0.77% at the end of the third quarter. Since the end of 2006, our non-performing loans to total loans ratio only increased 3.6% to 0.57% from 0.55%. Our net charge-offs for 2007 were 0.36% compared with 0.30% in 2006, only a slight increase during deteriorating economic conditions. Additionally, we feel confident that our loan loss reserves remain adequate at 1.21% of gross loans outstanding."
For the quarter ended, net interest margin was 4.47% compared with 4.84% the same quarter a year ago. The net interest margin was 4.68% for 2007, compared to 5.04 % for 2006.
Total revenue, net of interest expense, was $42.8 million for 2007 and $11.0 million for the fourth quarter compared with $34.7 million for 2006 and $9.5 million for the same quarter a year ago. This represented increases of 23.6% and 16.5% for the same periods respectively.
Book value per share stood at $13.94 at December 31, 2007, compared to $12.83 per share at the end of 2006, an increase of approximately 8.7%.
Conference Call
The Company will hold a conference call on Thursday, January 31, 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) (in thousands, except per share data) Three Months Ended Year Ended December 31, December 31, --------------------- --------------------- 2007 2006 2007 2006 --------- --------- --------- --------- Summary Results of Operations Data: Interest income $ 19,068 $ 15,494 $ 72,127 $ 53,193 Interest expense 9,420 7,144 34,800 22,494 --------- --------- --------- --------- Net interest income 9,648 8,350 37,327 30,699 Provision for loan losses 2,466 794 4,726 3,253 --------- --------- --------- --------- Net interest income after provision loan losses 7,182 7,556 32,601 27,446 Noninterest income 1,387 1,125 5,518 3,971 Noninterest expense 6,969 6,295 29,786 22,561 --------- --------- --------- --------- Income before taxes 1,600 2,386 8,333 8,856 Income tax expense 497 744 2,763 2,852 --------- --------- --------- --------- Net income $ 1,103 $ 1,642 $ 5,570 $ 6,004 ========= ========= ========= ========= Per Share Data: Net income, basic $ 0.21 $ 0.32 $ 1.06 $ 1.16 Net income, diluted 0.21 0.31 1.06 1.14 Book value 13.94 12.83 13.94 12.83 Weighted average number of shares outstanding: Basic 5,293,571 5,201,562 5,265,555 5,170,687 Diluted 5,293,571 5,268,005 5,276,200 5,278,711 Performance Ratios: Return on average assets(1) 0.47% 0.88% 0.65% 0.91% Return on average equity(1) 5.99% 9.93% 7.93% 9.57% Net interest margin(1)(2) 4.47% 4.84% 4.68% 5.04% Efficiency ratio(3) 63.19% 66.44% 69.53% 65.07% Growth Ratios and Other Data: Percentage change in net income -32.83% -7.23% Percentage change in diluted net income per share -32.26% -7.02% At December 31, -------------------- 2007 2006 -------- -------- Summary Balance Sheet Data: Assets $971,200 $758,214 Average earning assets (quarter-to-date) 865,235 692,895 Average earning assets (year-to-date) 804,865 617,595 Investment securities 80,510 74,725 Loans, held for sale 6,503 733 Loans 807,522 631,053 Allowance for loan losses 9,808 7,670 Deposits 807,597 651,134 Short-term borrowings 21,048 4,738 Accrued interest 2,059 1,454 Federal Home Loan Bank advances 57,350 25,050 Subordinated long-term capital notes 6,186 6,186 Other liabilities 3,297 2,889 Shareholders' equity 73,663 66,763 Asset Quality : Asset Quality Ratios Nonperforming loans to total loans 0.57% 0.55% Nonperforming assets to total assets 0.64% 0.62% Allowance for loan losses to nonperforming loans 212.52% 220.21% Allowance for loan losses to total loans 1.21% 1.21% At December 31, -------------------------------------------- 2007 2006 --------------------- --------------------- % of % of Amount Total Loans Amount Total Loans -------- ----------- -------- ----------- Loans by Category Real estate - acquisition & development(4) $389,695 48.26% $320,406 50.77% Real estate - commercial 154,663 19.15% 125,560 19.90% Real estate - residential 178,193 22.07% 115,276 18.27% Commercial business 48,749 6.04% 40,491 6.42% Other loans 36,222 4.49% 29,320 4.65% -------- -------- Total Loans $807,522 $631,053 ======== ======== At December 31, --------------------------------------------- 2007 2006 --------------------- --------------------- % of Total % of Total Amount Nonperforming Amount Nonperforming ------ ------------- ------ ------------- Nonperforming assets by category: Loans Real estate - acquisi- tion & development $3,302 53.36% $ 521 11.08% Real estate - commercial -- 0.00% 1,436 30.55% Real estate - residential 839 13.56% 545 11.59% Commercial business 412 6.66% 720 15.32% Other loans 62 1.00% 261 5.55% Other Real Estate Real estate - acquisi- tion & development 363 5.87% 771 16.40% Real estate - commercial 206 3.33% 145 3.08% Real estate - residential 935 15.11% 302 6.42% Other Repossessed Property Other loans 69 1.12% -- 0.00% ------ ------ Total Nonperforming Assets $6,188 $4,701 ====== ====== At December 31, --------------------------------------------- 2007 2006 --------------------- --------------------- % of Total % of Total Amount Average Loans Amount Average Loans ------ ------------- ------ ------------- Quarterly Net Charge-Offs by Category Real estate - acquisi- tion & development $ 940 0.12% $ 115 0.02% Real estate - commercial -- 0.00% -- 0.00% Real estate - residential 495 0.06% 142 0.02% Commercial business 40 0.01% 13 0.00% Other loans 149 0.02% 26 0.00% ------ ------ Total Net Charge- Offs $1,624 0.21% $ 296 0.05% ====== ====== Year-to-Date Net Charge- Offs by Category Real estate - acquisi- tion & development $1,230 0.17% $ 386 0.07% Real estate - commercial 145 0.02% -- 0.00% Real estate - residential 671 0.09% 316 0.06% Commercial business 114 0.02% 784 0.15% Other loans 428 0.06% 156 0.03% ------ ------ Total Net Charge- Offs $2,588 0.36% $1,642 0.30% ====== ====== At December 31, Growth Ratios and Other Data: 2007 -------------- Percentage change in assets 28.09% Percentage change in loans 27.96% Percentage change in deposits 24.03% Percentage change in equity 10.34% Loans to deposits ratio 99.99% --------------------------------------------------------------------- (1) Annualized. (2) Taxable equivalent. (3) Computed by dividing noninterest expense by the sum of the net interest income and noninterest income. (4) Residential loans amounted to $311.1 million or 79.8% of the Real Estate - Acquisition & Development category at December 31, 2007 and $274.7 million or 43.5% at December 31, 2006. APPALACHIAN BANCSHARES, INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except shares and per share data) Three Months Ended Year Ended December 31, December 31, --------------------- --------------------- 2007 2006 2007 2006 --------- --------- --------- --------- Interest Income Interest and fees on loans $ 18,061 $ 14,608 $ 68,213 $ 49,843 Interest on securities: Taxable securities 743 618 2,859 2,301 Nontaxable securities 164 160 639 668 Interest on deposits with other banks 5 6 78 30 Interest on federal funds sold 95 102 338 351 --------- --------- --------- --------- Total Interest Income 19,068 15,494 72,127 53,193 --------- --------- --------- --------- Interest Expense Interest on deposits 8,708 6,558 32,367 20,351 Interest on federal funds purchased, short-term notes and securities sold under agreements to repurchase 92 129 283 472 Interest on Federal Home Loan Bank advances 500 332 1,629 1,180 Interest on subordinated long-term capital notes 120 125 521 491 --------- --------- --------- --------- Total Interest Expense 9,420 7,144 34,800 22,494 --------- --------- --------- --------- Net Interest Income 9,648 8,350 37,327 30,699 Provision for loan losses 2,466 794 4,726 3,253 --------- --------- --------- --------- Net Interest Income After Provision for Loan Losses 7,182 7,556 32,601 27,446 --------- --------- --------- --------- Noninterest Income Customer service fees 588 450 2,235 1,650 Mortgage origination commissions 512 406 1,988 1,348 Net gains on sales of securities 7 -- 7 -- Other operating income 280 269 1,288 973 --------- --------- --------- --------- Total Noninterest Income 1,387 1,125 5,518 3,971 --------- --------- --------- --------- Noninterest Expenses Salaries and employee benefits 3,702 3,651 17,510 13,341 Occupancy, furniture and equipment expense 978 785 3,678 2,685 Other operating expenses 2,289 1,859 8,598 6,535 --------- --------- --------- --------- Total Noninterest expense 6,969 6,295 29,786 22,561 --------- --------- --------- --------- Income before income taxes 1,600 2,386 8,333 8,856 Income tax expense 497 744 2,763 2,852 --------- --------- --------- --------- Net Income $ 1,103 $ 1,642 $ 5,570 $ 6,004 ========= ========= ========= ========= Earnings Per Common Share Basic $ 0.21 $ 0.32 $ 1.06 $ 1.16 Diluted 0.21 0.31 1.06 1.14 Cash Dividends Declared Per Common Share -- -- -- -- Weighted Average Shares Outstanding Basic 5,293,571 5,201,562 5,265,555 5,170,687 Diluted 5,293,571 5,268,005 5,276,200 5,278,711 APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) (Dollars in thousands) December 31, -------------------- 2007 2006 -------- -------- Assets Cash and due from banks $ 13,392 $ 7,940 Interest-bearing deposits with other banks 310 541 Federal funds sold 12,797 3,107 -------- -------- Cash and Cash Equivalents 26,499 11,588 Securities available-for-sale 80,510 74,725 Loans, held for sale 6,503 733 Loans, net of unearned income 807,522 631,053 Allowance for loan losses (9,808) (7,670) -------- -------- Net Loans 797,714 623,383 Premises and equipment, net 32,966 23,412 Accrued interest 9,797 8,157 Cash surrender value on life insurance 8,778 8,438 Intangibles, net 2,179 2,197 Other assets 6,254 5,581 -------- -------- Total Assets $971,200 $758,214 ======== ======== Liabilities and Shareholders' Equity Liabilities Noninterest-bearing deposits $ 56,559 $ 53,422 Interest-bearing deposits 751,038 597,712 -------- -------- Total Deposits 807,597 651,134 Short-term borrowings 21,048 4,738 Accrued interest 2,059 1,454 Federal Home Loan Bank advances 57,350 25,050 Subordinated long-term capital notes 6,186 6,186 Other liabilities 3,297 2,889 -------- -------- Total Liabilities 897,537 691,451 -------- -------- Shareholders' Equity Preferred Stock, 20,000,000 shares authorized, none issued -- -- Common stock, par value $0.01 per share, 20,000,000 shares authorized, 5,285,026 shares issued at December 31, 2007, and 5,280,497 shares issued at December 31, 2006 53 53 Paid-in capital 43,998 43,870 Retained earnings 29,331 23,761 Accumulated other comprehensive income (loss) 281 (221) Treasury stock, at cost (-0- shares at December 31, 2007 and 75,973 shares at December 31, 2006) -- (700) -------- -------- Total Shareholders' Equity 73,663 66,763 -------- -------- Total Liabilities and Shareholders' Equity $971,200 $758,214 ======== ========