ELLIJAY, Ga., April 2, 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., today announces revised financial results for its year ended December 31, 2008. Subsequent to the Company's earnings release on January 29, 2009, as a result of continuing analysis of specific impaired loans and as a result of the preliminary results of a regular examination by the Federal Deposit Insurance Corporation, the Bank determined it prudent to record an additional loan loss provision of $2 million for the fourth quarter of 2008.
This provision is in addition to the $3.8 million originally expensed for the quarter. Revised net loss for the quarter and year ended were ($2,077,000), or ($0.39) per diluted share, and ($2,859,000), or ($0.53) per diluted share, down from ($831,000), or ($0.15) per diluted share, and (1,613,000), or ($0.30) per diluted share, respectively, that was previously reported for those periods. The revised earnings are down from the net income of $1,103,000, or $0.21 per diluted share, the Company earned during the same quarter of the prior year and $5,570,000, or $1.06 per diluted share, the Company earned during the year ended December 31, 2007.
This action brings the Company's allowance for loan losses to 1.64% of total loans versus 1.41% of total loans as reflected in the original fourth quarter earnings release. Additionally, non-performing loans increased to $28.2 million from the $24.5 million originally reported in the Company's January release. This increase resulted from the continuing analysis of the Bank's loan portfolio through the year-end audit process.
As of December 31, 2008, the capital ratios of Appalachian Community Bank and Appalachian Community Bank, FSB exceeded regulatory levels for well-capitalized banks after the increased loan loss provision.
A complete description of the Company's provision for loan losses, allowance for loan losses and non-performing loans will be included in the Company's Form 10-K expected to be filed with the Securities and Exchange Commission on or about April 3, 2009.
Book value per share stood at $13.48 at December 31, 2008, compared to $13.94 per share at December 31, 2007, a decrease of approximately 3.3%.
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. 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 Year Ended
December 31, December 31,
---------------------- ----------------------
2008 2007 2008 2007
---------- ---------- ---------- ----------
Summary Results of
Operations Data:
Interest income $ 16,091 $ 19,068 $ 69,005 $ 72,127
Interest expense 8,776 9,420 34,034 34,800
---------- ---------- ---------- ----------
Net interest income 7,315 9,648 34,971 37,327
Provision for loan
losses 5,799 2,466 12,915 4,726
---------- ---------- ---------- ----------
Net interest income
after provision for
loan losses 1,516 7,182 22,056 32,601
Noninterest income 1,187 1,387 4,247 5,518
Noninterest expense 6,268 6,969 31,614 29,786
---------- ---------- ---------- ----------
Income (loss) before
taxes (3,565) 1,600 (5,311) 8,333
Income tax expense
(benefit) (1,488) 497 (2,452) 2,763
---------- ---------- ---------- ----------
Net income (loss) $ (2,077) $ 1,103 $ (2,859) $ 5,570
========== ========== ========== ==========
Per Share Data:
Net income (loss),
basic $ (0.39) $ 0.21 $ (0.53) $ 1.06
Net income (loss),
diluted (0.39) 0.21 (0.53) 1.06
Book value 13.48 13.94 13.48 13.94
Weighted average number
of shares outstanding:
Basic 5,372,505 5,293,571 5,366,658 5,265,555
Diluted 5,372,505 5,293,571 5,366,658 5,276,200
Performance Ratios:
Return on average
assets(1) -0.74% 0.47% -0.27% 0.65%
Return on average
equity(1) -11.20% 5.99% -3.80% 7.93%
Net interest
margin(1)(2) 2.86% 4.47% 3.61% 4.68%
Efficiency ratio(3) 74.08% 63.19% 79.05% 69.53%
Growth Ratios and Other
Data:
Percentage change in
net income -288.30% -151.33%
Percentage change in
diluted net income
per share -284.08% -150.00%
At December 31,
----------------------
2008 2007
---------- ----------
Summary Balance Sheet Data:
Assets $1,185,678 $ 971,200
Average earning assets (quarter-to-date) 1,028,295 865,235
Average earning assets (year-to-date) 978,140 804,865
Investment securities 79,308 76,565
Loans, held for sale 2,783 6,503
Loans 885,374 807,522
Allowance for loan losses 14,510 9,808
Deposits 1,013,276 807,597
Short-term borrowings 10,604 21,048
Accrued interest 1,936 2,059
Federal Home Loan Bank advances 72,000 57,350
Subordinated long-term capital notes 12,511 6,186
Other liabilities 2,913 3,297
Shareholders' equity 72,438 73,663
Asset Quality:
Asset Quality Ratios
Nonperforming loans to total loans 3.18% 0.57%
Nonperforming assets to total assets 3.50% 0.64%
Allowance for loan losses to nonperforming
loans 51.51% 212.57%
Allowance for loan losses to total loans 1.64% 1.21%
At December 31,
--------------------------------------
2008 2007
------------------ ------------------
% of % of
Total Total
Loans by Category Amount Loans Amount Loans
-------- -------- -------- --------
Real estate - acquisition &
development $389,339 43.98% $389,695 48.26%
Real estate - commercial 173,566 19.60% 154,663 19.15%
Real estate - residential 212,661 24.02% 178,193 22.07%
Commercial business 72,543 8.19% 48,749 6.04%
Other loans 37,265 4.21% 36,222 4.48%
-------- --------
Total Loans $885,374 $807,522
======== ========
At December 31,
--------------------------------------
2008 2007
------------------ ------------------
% of % of
Nonperforming assets by Total Total
category: Non- Non-
Loans Amount performing Amount performing
-------- ---------- ------ ----------
Real estate - acquisition &
development $ 16,871 40.66% $ 3,302 53.36%
Real estate - commercial 6,389 15.40% -- 0.00%
Real estate - residential 3,844 9.26% 839 13.56%
Commercial business 908 2.19% 412 6.66%
Other loans 158 0.38% 61 0.98%
Other Real Estate
Real estate - acquisition &
development 4,975 11.99% 363 5.87%
Real estate - commercial 4,360 10.51% 206 3.33%
Real estate - residential 3,756 9.05% 935 15.11%
Commercial business 80 0.19% -- 0.00%
Other Repossessed Property
Other loans 151 0.36% 70 1.13%
-------- --------
Total Nonperforming Assets $ 41,492 $ 6,188
======== ========
At December 31,
--------------------------------------
2008 2007
------------------ ------------------
% of % of
Total Total
Quarterly Net Charge-Offs by Average Average
Category Amount Loans Amount Loans
-------- -------- -------- --------
Real estate - acquisition &
development $ 2,409 0.27% $ 940 0.12%
Real estate - commercial 1,143 0.13% -- 0.00%
Real estate - residential 892 0.10% 495 0.06%
Commercial business 452 0.05% 40 0.01%
Other loans 243 0.03% 149 0.02%
-------- --------
Total Net Charge-Offs $ 5,139 0.58% $ 1,624 0.21%
======== ========
At December 31,
--------------------------------------
2008 2007
------------------ ------------------
Year-to-Date Net Charge-Offs
by Category
Real estate - acquisition &
development $ 3,744 0.43% $ 1,230 0.17%
Real estate - commercial 1,150 0.13% 145 0.02%
Real estate - residential 1,968 0.23% 671 0.09%
Commercial business 626 0.07% 114 0.02%
Other loans 725 0.09% 428 0.06%
-------- --------
Total Net Charge-Offs $ 8,213 0.95% $ 2,588 0.36%
======== ========
At December 31,
Growth Ratios and Other Data: 2008
---------------
Percentage change in assets 22.08%
Percentage change in loans 9.64%
Percentage change in deposits 25.47%
Percentage change in equity -1.66%
Loans to deposits ratio 87.38%
---------------------------------------------------
(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 INCOME
(Unaudited)
(Dollars in thousands, except shares and per share data)
Three Months Ended Year Ended
December 31, December 31,
---------------------- ----------------------
2008 2007 2008 2007
---------- ---------- ---------- ----------
Interest Income
Interest and fees on
loans $ 15,000 $ 18,061 $ 64,637 $ 68,213
Interest on
securities:
Taxable securities 813 743 3,227 2,859
Nontaxable securities 145 164 612 639
Interest on deposits
with other banks 2 5 16 78
Interest on federal
funds sold 131 95 513 338
---------- ---------- ---------- ----------
Total Interest
Income 16,091 19,068 69,005 72,127
---------- ---------- ---------- ----------
Interest Expense
Interest on deposits 7,917 8,708 30,993 32,367
Interest on short-term
borrowings 145 92 417 283
Interest on Federal
Home Loan Bank
advances 457 500 2,066 1,629
Interest on
subordinated
long-term capital
notes 257 120 558 521
---------- ---------- ---------- ----------
Total Interest
Expense 8,776 9,420 34,034 34,800
---------- ---------- ---------- ----------
Net Interest Income 7,315 9,648 34,971 37,327
Provision for loan
losses 5,799 2,466 12,915 4,726
---------- ---------- ---------- ----------
Net Interest Income
After Provision for
Loan Losses 1,516 7,182 22,056 32,601
---------- ---------- ---------- ----------
Noninterest Income
Customer service fees 608 588 2,528 2,235
Mortgage origination
commissions 241 512 1,404 1,988
Net gains (losses) on
sales of securities 41 7 (776) 7
Other operating income 297 280 1,091 1,288
---------- ---------- ---------- ----------
Total Noninterest
Income 1,187 1,387 4,247 5,518
---------- ---------- ---------- ----------
Noninterest Expenses
Salaries and employee
benefits 2,708 3,702 17,743 17,510
Occupancy, furniture
and equipment expense 1,096 978 4,286 3,678
Other operating
expenses 2,464 2,289 9,585 8,598
---------- ---------- ---------- ----------
Total Noninterest
expense 6,268 6,969 31,614 29,786
---------- ---------- ---------- ----------
Income (loss) before
income taxes (3,565) 1,600 (5,311) 8,333
Income tax expense
(benefit) (1,488) 497 (2,452) 2,763
---------- ---------- ---------- ----------
Net Income (Loss) $ (2,077) $ 1,103 $ (2,859) $ 5,570
========== ========== ========== ==========
Earnings (Loss) Per
Common Share
Basic $ (0.39) $ 0.21 $ (0.53) $ 1.06
Diluted $ (0.39) $ 0.21 $ (0.53) $ 1.06
Cash Dividends Declared
Per Common Share $ -- $ -- $ -- $ --
Weighted Average Shares
Outstanding
Basic 5,372,505 5,293,571 5,366,658 5,265,555
Diluted 5,372,505 5,293,571 5,366,658 5,276,200
APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
(Dollars in thousands)
December 31, December 31,
2008 2007
------------ ------------
Assets
Cash and due from banks $ 12,825 $ 13,392
Interest-bearing deposits with other
banks 731 310
Federal funds sold 133,351 12,797
------------ ------------
Cash and Cash Equivalents 146,907 26,499
Securities available-for-sale 79,308 76,565
Restricted equity securities 4,932 3,945
Loans, held for sale 2,783 6,503
Loans, net of unearned income 885,374 807,522
Allowance for loan losses (14,510) (9,808)
------------ ------------
Net Loans 870,864 797,714
Premises and equipment, net 39,638 32,966
Accrued interest 9,289 9,797
Cash surrender value on life insurance 9,140 8,778
Intangibles, net 1,992 2,179
Foreclosed assets 13,323 1,573
Other assets 7,502 4,681
------------ ------------
Total Assets $ 1,185,678 $ 971,200
============ ============
Liabilities and Shareholders' Equity
Liabilities
Noninterest-bearing deposits $ 50,035 $ 56,559
Interest-bearing deposits 963,241 751,038
------------ ------------
Total Deposits 1,013,276 807,597
Short-term borrowings 10,604 21,048
Accrued interest 1,936 2,059
Federal Home Loan Bank advances 72,000 57,350
Subordinated long-term capital notes 12,511 6,186
Other liabilities 2,913 3,297
------------ ------------
Total Liabilities 1,113,240 897,537
------------ ------------
Shareholders' Equity
Preferred Stock, 20,000,000 shares
authorized, none issued -- --
Common stock, par value $0.01 per share,
20,000,000 shares authorized, 5,372,505
shares issued at December 31, 2008, and
5,285,026 shares issued at December 31,
2007 54 53
Paid-in capital 44,979 43,998
Retained earnings 26,472 29,331
Accumulated other comprehensive income 933 281
------------ ------------
Total Shareholders' Equity 72,438 73,663
------------ ------------
Total Liabilities and Shareholders'
Equity $ 1,185,678 $ 971,200
============ ============