- 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
======== ========