ELLIJAY, Ga., Aug. 19, 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 quarter and year to date ended June 30, 2009. Subsequent to the Company's earnings release on July 30, 2009, management determined that there was a need for an additional $3.1 million valuation allowance on the Company's deferred tax assets. Based on forecasts of the Company's future profitability, management concluded recognition of these deferred tax assets was unlikely. In addition, the Company has determined that the entire balance of its recorded goodwill was impaired, which resulted in a $2.0 million impairment charge. The additional deferred tax asset valuation allowances, as well as the goodwill impairment were due to the increasingly uncertain economic environment and the Bank's continued decline in market capitalization and continued losses.
This deferred tax asset valuation allowance is in addition to the $3.3 million originally recorded for the quarter. The revised net loss for the quarter and six months ended June 30, 2009 were ($30,904,000), or ($5.64) per diluted share, and ($32,660,000), or ($5.98) per diluted share, respectively, down from ($25,766,000), or ($0.93) per diluted share, and (27,522,000), or ($0.94) per diluted share, respectively, that was previously reported for those periods. The revised earnings are down from the net income of $701,000, or $0.13 per diluted share, the Company earned during the same quarter of the prior year and $1,838,000, or $0.34 per diluted share, the Company earned during the six months ended June 30, 2008.
Book value per share stood at $7.16 at June 30, 2009, compared to $14.13 per share at June 30, 2008, a decrease of approximately 49.3%.
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 Six Months Ended
June 30, June 30,
-------------------- --------------------
2009 2008 2009 2008
--------- --------- --------- ---------
Summary Results of
Operations Data:
Interest income $ 12,119 $ 17,400 $ 27,789 $ 36,043
Interest expense 8,942 7,864 17,949 16,793
--------- --------- --------- ---------
Net interest income 3,177 9,536 9,840 19,250
Provision for loan losses 21,468 1,496 25,194 2,451
--------- --------- --------- ---------
Net interest income after
provision for loan losses (18,291) 8,040 (15,354) 16,799
Noninterest income 1,465 1,342 3,673 2,607
Noninterest expense 10,932 8,426 19,097 16,788
--------- --------- --------- ---------
Income (loss) before taxes (27,758) 956 (30,778) 2,618
Income tax expense
(benefit) 3,146 255 1,882 780
--------- --------- --------- ---------
Net income (loss) $ (30,904) $ 701 $ (32,660) $ 1,838
========= ========= ========= =========
Per Share Data:
Net income (loss), basic $ (5.64) $ 0.13 $ (5.98) $ 0.34
Net income (loss), diluted (5.64) 0.13 (5.98) 0.34
Book value 7.16 14.13 7.16 14.13
Weighted average number of
shares outstanding:
Basic 5,475,701 5,372,505 5,464,298 5,360,747
Diluted 5,475,701 5,372,505 5,464,298 5,360,747
Performance Ratios:
Return on average assets(1) -10.08% 0.28% -5.40% 0.37%
Return on average equity(1) -182.74% 3.70% -93.19% 4.89%
Net interest margin(1) (2) 1.32% 4.07% 2.01% 4.18%
Efficiency ratio(3) 236.47% 77.46% 153.11% 76.84%
Growth Ratios and Other
Data:
Percentage change in net
income -4508.56% -1876.93%
Percentage change in
diluted net income per
share -4438.46% -1858.82%
At June 30,
----------------------
2009 2008
---------- ----------
Summary Balance Sheet Data:
Assets $1,185,234 $1,059,880
Average earning assets - QTD 993,752 951,717
Average earning assets - YTD 1,002,112 935,092
Securities available-for-sale 56,029 76,454
Restricted equity securities 5,225 4,264
Loans, held for sale 2,868 3,967
Loans 856,866 869,595
Allowance for loan losses 22,099 10,644
Deposits 1,045,178 903,053
Short-term borrowings 10,332 11,803
Accrued interest 1,983 1,871
Federal Home Loan Bank advances 72,000 57,150
Subordinated long-term capital notes 12,511 6,186
Other liabilities 4,028 3,884
Shareholders' equity 39,202 75,933
Asset Quality:
Asset Quality Ratios
Nonperforming loans to total loans 15.11% 0.60%
Nonperforming assets to total assets 13.12% 0.87%
Allowance for loan losses to nonperforming
loans 17.07% 202.67%
Allowance for loan losses to total loans 2.58% 1.22%
At June 30,
----------------------------------
2009 2008
---------------- ----------------
% of % of
Total Total
Loans by Category Amount Loans Amount Loans
-------- ------ -------- ------
Real estate - acquisition &
development $372,368 43.46% $399,520 45.94%
Real estate - commercial 171,219 19.98% 168,717 19.40%
Real estate - residential 210,201 24.53% 197,707 22.74%
Commercial business 68,142 7.95% 66,030 7.59%
Other loans 34,936 4.08% 37,621 4.33%
-------- --------
Total Loans $856,866 $869,595
======== ========
At June 30,
------------------------------------------
2009 2008
-------------------- --------------------
Nonperforming assets by % of Total % of Total
category: Non- Non-
Loans Amount performing Amount performing
-------- ---------- -------- ----------
Real estate -
acquisition &
development $ 87,098 56.00% $ 2,175 23.61%
Real estate - commercial 18,700 12.02% 682 7.40%
Real estate - residential 19,901 12.79% 1,465 15.90%
Commercial business 3,182 2.05% 706 7.66%
Other loans 606 0.39% 224 2.44%
Other Real Estate
Real estate - acquisition
& development 11,131 7.16% 1,559 16.92%
Real estate - commercial 6,607 4.25% 206 2.24%
Real estate - residential 8,004 5.15% 2,144 23.27%
Commercial business 84 0.05% -- 0.00%
Other Repossessed Property
Other loans 222 0.14% 51 0.56%
-------- --------
Total Nonperforming
Assets $155,535 $ 9,212
======== ========
At June 30,
------------------------------------------
2009 2008
-------------------- --------------------
% of Total % of Total
Quarterly Net Charge-Offs Average Average
by Category Amount Loans Amount Loans
-------- ---------- -------- ----------
Real estate - acquisition
& development $ 7,551 0.87% $ 762 0.09%
Real estate - commercial 254 0.03% -- 0.00%
Real estate - residential 3,306 0.38% 211 0.02%
Commercial business 2,167 0.25% 29 0.00%
Other loans 241 0.02% 104 0.02%
-------- --------
Total Net Charge-Offs $ 13,519 1.55% $ 1,106 0.13%
======== ========
At June 30,
------------------------------------------
2009 2008
-------------------- --------------------
% of Total % of Total
Year-to-Date Net Average Average
Charge-Offs by Category Amount Loans Amount Loans
-------- ---------- -------- ----------
Real estate - acquisition
& development $ 10,192 1.16% $ 1,073 0.13%
Real estate - commercial (434) -0.05% 7 0.00%
Real estate - residential 4,214 0.48% 256 0.03%
Commercial business 3,269 0.37% 57 0.01%
Other loans 364 0.05% 222 0.02%
-------- --------
Total Net Charge-Offs $ 17,605 2.01% $ 1,615 0.19%
======== ========
At June 30,
Growth Ratios and Other Data: 2009
-----------
Percentage change in assets 11.83%
Percentage change in loans -1.46%
Percentage change in deposits 15.74%
Percentage change in equity -48.37%
Loans to deposits ratio 81.98%
-------------------------------------------------------
(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 OPERATIONS
(Unaudited)
(Dollars in thousands, except shares and per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2009 2008 2009 2008
--------- --------- --------- ---------
Interest Income
Interest and fees on
loans $ 11,537 $ 16,379 $ 26,321 $ 34,038
Interest on securities:
Taxable securities 434 802 1,169 1,581
Nontaxable securities 131 158 262 318
Interest on deposits with
other banks 9 6 9 8
Interest on federal funds
sold 8 55 28 98
--------- --------- --------- ---------
Total Interest Income 12,119 17,400 27,789 36,043
--------- --------- --------- ---------
Interest Expense
Interest on deposits 7,968 7,142 15,996 15,258
Interest on short-term
borrowings 104 121 225 245
Interest on Federal Home
Loan Bank advances 601 504 1,198 1,084
Interest on subordinated
long-term capital notes 269 97 530 206
--------- --------- --------- ---------
Total Interest Expense 8,942 7,864 17,949 16,793
--------- --------- --------- ---------
Net Interest Income 3,177 9,536 9,840 19,250
Provision for loan losses 21,468 1,496 25,194 2,451
--------- --------- --------- ---------
Net Interest Income After
Provision for Loan Losses (18,291) 8,040 (15,354) 16,799
--------- --------- --------- ---------
Noninterest Income
Customer service fees 588 660 1,106 1,224
Mortgage origination
commissions 617 418 1,053 864
Net gains on sales of
securities 19 -- 1,040 9
Other operating income 241 264 474 510
--------- --------- --------- ---------
Total Noninterest Income 1,465 1,342 3,673 2,607
--------- --------- --------- ---------
Noninterest Expenses
Salaries and employee
benefits 4,107 5,044 8,243 10,035
Occupancy, furniture and
equipment expense 1,121 1,020 2,248 2,102
Goodwill impairment 1,992 -- 1,992 --
Other operating expenses 3,712 2,362 6,614 4,651
--------- --------- --------- ---------
Total Noninterest
expense 10,932 8,426 19,097 16,788
--------- --------- --------- ---------
Income (loss) before income
taxes (27,758) 956 (30,778) 2,618
Income tax expense
(benefit) 3,146 255 1,882 780
--------- --------- --------- ---------
Net Income (Loss) $ (30,904) $ 701 $ (32,660) $ 1,838
========= ========= ========= =========
Earnings (Loss) Per Common
Share
Basic $ (5.64) $ 0.13 $ (5.98) $ 0.34
Diluted (5.64) 0.13 (5.98) 0.34
Cash Dividends Declared Per
Common Share -- -- -- --
Weighted Average Shares
Outstanding
Basic 5,475,701 5,372,505 5,464,298 5,360,747
Diluted 5,475,701 5,372,505 5,464,298 5,360,747
APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
(Dollars in thousands)
June 30, December 31, June 30,
2009 2008 2008
---------- ---------- ----------
Assets
Cash and due from banks $ 44,871 $ 12,825 $ 22,076
Interest-bearing deposits with
other banks 139,242 731 5,896
Federal funds sold 14,132 133,351 23,787
---------- ---------- ----------
Cash and Cash Equivalents 198,245 146,907 51,759
Securities available-for-sale 56,029 79,308 76,454
Restricted equity securities 5,225 4,932 4,264
Loans, held for sale 2,868 2,783 3,967
Loans, net of unearned income 856,866 885,374 869,595
Allowance for loan losses (22,099) (14,510) (10,644)
---------- ---------- ----------
Net Loans 834,767 870,864 858,951
Premises and equipment, net 40,273 39,638 35,311
Accrued interest 6,978 9,289 9,210
Cash surrender value on life
insurance 9,255 9,140 8,967
Intangibles, net -- 1,992 2,013
Foreclosed assets 26,048 13,323 3,960
Other assets 5,546 7,502 5,024
---------- ---------- ----------
Total Assets $1,185,234 $1,185,678 $1,059,880
========== ========== ==========
Liabilities and Shareholders'
Equity
Liabilities
Noninterest-bearing deposits $ 58,879 $ 50,035 $ 53,095
Interest-bearing deposits 986,299 963,241 849,958
---------- ---------- ----------
Total Deposits 1,045,178 1,013,276 903,053
Short-term borrowings 10,332 10,604 11,803
Accrued interest 1,983 1,936 1,871
Federal Home Loan Bank advances 72,000 72,000 57,150
Subordinated long-term capital
notes 12,511 12,511 6,186
Other liabilities 4,028 2,913 3,884
---------- ---------- ----------
Total Liabilities 1,146,032 1,113,240 983,947
---------- ---------- ----------
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
June 30, 2009, December 31, 2008
and June 30, 2008, respectively 55 54 54
Paid-in capital 45,351 44,979 44,841
Retained earnings (6,188) 26,472 31,169
Accumulated other comprehensive
income (loss) (16) 933 (131)
---------- ---------- ----------
Total Shareholders' Equity 39,202 72,438 75,933
---------- ---------- ----------
Total Liabilities and
Shareholders' Equity $1,185,234 $1,185,678 $1,059,880
========== ========== ==========