ELLIJAY, Ga., May 1, 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 $1.0 billion, as of March 31, 2008, compared to $827.1 million on March 31, 2007, an increase of 23.3%. Total loans were $845.6 million, an increase of $175.5 million, or 26.2%, when compared with $670.1 million on March 31, 2007. Deposits grew to $846.1 million on March 31, 2008, an increase of $138.1 million, or 19.5%, when compared to $708.0 million on March 31, 2007.
Tracy Newton, President and Chief Executive Officer, stated that, "In many ways the challenges experienced during the first quarter were identical to the previous quarter. Some of our customers continue to be troubled by the effects of a slower real estate and housing market. We have spent much of our time listening to their concerns and doing what we could to help them through this negative economic cycle. Recently, our staff has also focused a tremendous amount of time and energy toward responding to the new pressures on our net interest margin created by the rapidly falling interest rates. Our efforts to balance the need for lower loan rates, which should help our borrowers navigate a slower economy, are being offset by our market's slower reaction to funding costs. We will continue to implement our retail branch strategy that began over two years ago to attain local core deposits in our new and existing markets, of which we are beginning to see solid results."
Net income for first quarter 2008 was $1.1 million, or $0.21 per diluted share, a 27.1% decrease in net income, when compared to $1.6 million, or $0.30 per diluted share, for the same quarter in 2007. However, net income for the first quarter of 2008 was consistent with the net income for fourth quarter of 2007, which was $1.1 million, or $0.21 per diluted share.
Return on average shareholders' equity for the first quarter 2008 was 6.10%, annualized for the quarter, compared to 9.40% for the same period in 2007. Return on average assets was 0.46% for first quarter 2008, compared to 0.80% for the same period in 2007.
Mr. Newton commented that, "Faced with additional intense challenges, equal to those during the previous quarter and significantly tougher than we faced during the first quarter of 2007, our outstanding staff did a superb job getting 2008 started on a positive note. During the first quarter, our non-performing assets to total assets decreased 7.8%, from 0.64% at December 31, 2007, to 0.59% at March 31, 2008." Mr. Newton further commented that, "Our non-performing assets to total assets increased 28.3%, from 0.46% to 0.59%, from March 31, 2007 to March 31, 2008. However, during the first quarter of 2008, our non-performing loans to total loans decreased 12.3%, from 0.57% at year end to 0.50% at March 31, 2008. Further, our non-performing loans to total loans ratio has increased only 28.2%, from 0.39% at March 31, 2007 to 0.50% at March 31, 2008. Additionally, we feel confident that our loan loss reserves remain adequate at 1.21% of gross loans outstanding. However, if conditions should warrant, additional loan-loss reserve provisions will be provided."
For the quarter ended March 31, 2008, net interest margin was 4.29%, compared with 4.90% the same quarter a year ago and 4.47% during the fourth quarter of 2007.
Total revenue, net of interest expense, was $11.0 million for first quarter 2008 and $10.2 million for the first quarter 2007. This represents an increase of 7.8%. Total revenue, net of interest expense, for the fourth quarter 2007 was consistent with the current quarter, at $11.0 million.
Book value per share stood at $14.14 on March 31, 2008, compared to $13.14 per share at March 31, 2007, an increase of approximately 7.6%. At December 31, 2007, our book value per share was $13.94.
Conference Call
The Company will hold a conference call on Thursday, May 1, 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) (Dollars in thousands, except shares and per share data) Three Months Ended March 31, ---------------------- 2008 2007 -------- -------- Summary Results of Operations Data: Interest income $ 18,643 $ 16,564 Interest expense 8,929 7,694 -------- -------- Net interest income 9,714 8,870 Provision for loan losses 955 636 -------- -------- Net interest income after provision for loan losses 8,759 8,234 Noninterest income 1,265 1,372 Noninterest expense 8,362 7,297 -------- -------- Income before taxes 1,662 2,309 Income tax expense 525 750 -------- -------- Net income $ 1,137 $ 1,559 ======== ======== Per Share Data: Net income, basic $ 0.21 $ 0.30 Net income, diluted 0.21 0.30 Book value 14.14 13.14 Weighted average number of shares outstanding: Basic 5,348,966 5,214,768 Diluted 5,348,966 5,257,442 Performance Ratios: Return on average assets(1) 0.46% 0.80% Return on average equity(1) 6.10% 9.40% Net interest margin(1)(2) 4.29% 4.90% Efficiency ratio(3) 76.23% 71.25% Growth Ratios and Other Data: Percentage change in net income -27.07% Percentage change in diluted net income per share -30.00% APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES SELECTED CONSOLIDATED FINANCIAL DATA (Unaudited) (Dollars in thousands, except shares and per share data) At March 31, ------------------------- 2008 2007 ----------- ---------- Summary Balance Sheet Data: Assets $ 1,020,048 $ 827,088 Average earning assets 918,345 741,437 Investment securities 80,226 76,137 Loans held for sale 6,406 2,570 Loans 845,558 670,098 Allowance for loan losses 10,254 8,144 Deposits 846,123 707,961 Short-term borrowings 24,710 5,185 Accrued interest 1,929 1,532 Federal Home Loan Bank advances 62,250 34,800 Subordinated long-term capital notes 6,186 6,186 Other liabilities 2,895 2,965 Shareholders' equity 75,955 68,459 Asset Quality Ratios: Nonperforming loans to total loans 0.50% 0.39% Nonperforming assets to total assets 0.59% 0.46% Net charge-offs to average total loans 0.06% 0.02% Allowance for loan losses to nonperforming loans 243.56% 310.60% Allowance for loan losses to total loans 1.21% 1.21% At March 31, ------------------------------------------- 2008 2007 ------------------------------------------- % of % of Total Total Amount Loans Amount Loans Loans by Category --------- ------- --------- ------- Real estate - acquisition & development(4) $ 409,903 48.48% $ 351,840 52.51% Real estate - commercial 165,798 19.61% 131,062 19.56% Real estate - residential 185,426 21.93% 109,768 16.38% Commercial business 48,735 5.76% 48,417 7.23% Other loans 35,696 4.22% 29,011 4.33% --------- --------- Total Loans $ 845,558 $ 670,098 ========= ========= APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES SELECTED CONSOLIDATED FINANCIAL DATA (Unaudited) (Dollars in thousands, except shares and per share data) At March 31, -------------------------------------- 2008 2007 ------------------ ------------------ % of % of Total Total Nonper- Nonper- Amount forming Amount forming -------- -------- ------- ------- Nonperforming assets by category: Loans Real estate - acquisition & development $ 1,556 25.86% $ 774 20.43% Real estate - commercial 669 11.12% 284 7.50% Real estate - residential 1,353 22.49% 1,146 30.25% Commercial business 492 8.18% 189 4.99% Other loans 140 2.33% 229 6.02% Other Real Estate Real estate - acquisition & development 665 11.05% 771 20.35% Real estate - commercial 207 3.44% 145 3.83% Real estate - residential 845 14.05% 250 6.63% Other Repossessed Property Other loans 89 1.48% -- 0.00% ------- ------ Total Nonperforming Assets $ 6,016 $3,788 ======= ====== At March 31, -------------------------------------- 2008 2007 ------------------ ------------------ % of % of Total Total Average Average Amount Loans Amount Loans -------- -------- ------- ------- Year-to-Date Net Charge-Offs by Category Real estate - acquisition & development $ 311 0.04% $ 2 0.00% Real estate - commercial 7 0.00% 1 0.00% Real estate - residential 45 0.01% 55 0.01% Commercial business 28 0.00% 11 0.00% Other loans 118 0.02% 93 0.02% ------- ------ Total Net Charge-Offs $ 509 0.07% $ 162 0.03% ======= ====== Growth Ratios and Other Data: Percentage change in assets 23.33% Percentage change in loans 26.18% Percentage change in deposits 19.52% Percentage change in equity 10.95% Loans to deposits ratio 99.93% (1) Annualized. (2) Taxable equivalent. (3) Computed by dividing noninterest expense by the sum of the net interest income and noninterest income. APPALACHIAN BANCSHARES, INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except per share data) Three Months Ended March 31, -------------------------- 2008 2007 --------- --------- Interest Income Interest and fees on loans $ 17,659 $ 15,585 Interest on securities: Taxable securities 779 691 Nontaxable securities 160 157 Interest on deposits with other banks 2 46 Interest on federal funds sold 43 85 --------- --------- Total Interest Income 18,643 16,564 --------- --------- Interest Expense Interest on deposits 8,116 7,211 Interest on short-term borrowings 124 28 Interest on Federal Home Loan Bank advances 580 321 Interest on subordinated long-term capital notes 109 134 --------- --------- Total Interest Expense 8,929 7,694 --------- --------- Net Interest Income 9,714 8,870 Provision for loan losses 955 636 --------- --------- Net Interest Income After Provision for Loan Losses 8,759 8,234 --------- --------- Noninterest Income Customer service fees 564 513 Mortgage origination commissions 446 480 Net gains on sales of securities 9 -- Other operating income 246 379 --------- --------- Total Noninterest Income 1,265 1,372 --------- --------- Noninterest Expenses Salaries and employee benefits 4,991 4,415 Occupancy, furniture and equipment expense 1,082 854 Other operating expenses 2,289 2,028 --------- --------- Total Noninterest expense 8,362 7,297 --------- --------- Income before income taxes 1,662 2,309 Income tax expense 525 750 --------- --------- Net Income $ 1,137 $ 1,559 ========= ========= Earnings Per Common Share Basic $ 0.21 $ 0.30 Diluted 0.21 0.30 Cash Dividends Declared Per Common Share -- -- Weighted Average Shares Outstanding Basic 5,348,966 5,214,768 Diluted 5,348,966 5,257,442 APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) (Dollars in thousands) March 31, Dec. 31, March 31, 2008 2007 2007 ---------- ---------- ---------- Assets Cash and due from banks $ 15,334 $ 13,392 $ 17,422 Interest-bearing deposits with other banks 191 310 4,465 Federal funds sold 22,370 12,797 16,312 ---------- ---------- ---------- Cash and Cash Equivalents 37,895 26,499 38,199 Securities available-for- sale 80,226 80,510 76,137 Loans, held for sale 6,406 6,503 2,570 Loans, net of unearned income 845,558 807,522 670,098 Allowance for loan losses (10,254) (9,808) (8,144) ---------- ---------- ---------- Net Loans 835,304 797,714 661,954 Premises and equipment, net 33,378 32,966 24,620 Accrued interest 10,201 9,797 8,554 Cash surrender value on life insurance 8,865 8,778 8,513 Intangibles, net 2,043 2,179 2,166 Other assets 5,730 6,254 4,375 ---------- ---------- ---------- Total Assets $1,020,048 $ 971,200 $ 827,088 ========== ========== ========== Liabilities and Shareholders' Equity Liabilities Noninterest-bearing deposits $ 54,831 $ 56,559 $ 60,823 Interest-bearing deposits 791,292 751,038 647,138 ---------- ---------- ---------- Total Deposits 846,123 807,597 707,961 Short-term borrowings 24,710 21,048 5,185 Accrued interest 1,929 2,059 1,532 Federal Home Loan Bank advances 62,250 57,350 34,800 Subordinated long-term capital notes 6,186 6,186 6,186 Other liabilities 2,895 3,297 2,965 ---------- ---------- ---------- Total Liabilities 944,093 897,537 758,629 ---------- ---------- ---------- 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 March 31, 2008, 5,285,026 shares issued at December 31, 2007 and 5,208,611 shares issued at March 31, 2007 54 53 52 Paid-in capital 44,770 43,998 43,232 Retained earnings 30,468 29,331 25,320 Accumulated other comprehensive income (loss) 663 281 (145) ---------- ---------- ---------- Total Shareholders' Equity 75,955 73,663 68,459 ---------- ---------- ---------- Total Liabilities and Shareholders' Equity $1,020,048 $ 971,200 $ 827,088 ========== ========== ==========