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Appalachian Bancshares, Inc. Reports Continued Growth for Second Quarter
Published Jul 30, 2007
Appalachian Bancshares, Inc. (Nasdaq:APAB), holding company for Appalachian Community Bank and Appalachian Community Bank, F.S.B., announced Friday that net income for the second quarter of 2007 was $1,501,000, or $0.29 per diluted share, a 4.38% increase in net income when compared to $1,438,000, or $0.27 per diluted share, for the same period in 2006.
Net income for the first six months of 2007 was $3,060,000, or $0.58 per diluted share, a 2.93% increase in net income when compared to $2,973,000, or $0.56 per diluted share, for the same period in 2006.
Total assets grew to $873.6 million, as of June 30, 2007, compared to $675.0 million on June 30, 2006, an increase of 29.4%. Total loans were $729.8 million, an increase of $189.5 million, or 35.0%, when compared with $540.4 million on June 30, 2006. Deposits grew to $746.2 million as of June 30, 2007, an increase of $188.2 million, or 33.7%, when compared to $558.0 million on June 30, 2006.
Annualized return on average shareholders' equity was 9.04% for the six months ended June 30, 2007, compared to 9.83% for the six months ended June 30, 2006. Annualized return on average assets was 0.75% for the six months ended June 30, 2007, compared to 0.99% for the six months ended June 30, 2006. The net interest margin was 4.86% for the six months ended June 30, 2007, compared to 5.18% for the same period a year ago. Book value per share stood at $13.30 at June 30, 2007, compared to $12.12 per share at June 30, 2006, an increase of approximately 9.7%.
Tracy Newton, Chief Executive Officer, commented, "Our performance in the first six months of 2007 reflects our investment in infrastructure and personnel needed to support our expansionary efforts, which, during the second quarter of 2007, culminated with the opening our first branch office in Dahlonega, Georgia, and the opening of our new thrift subsidiary, Appalachian Community Bank, F.S.B, headquartered in McCaysville, Georgia, with new branch locations in Ducktown, Tennessee, and Murphy, North Carolina." Mr. Newton further stated that, "While the cost associated with our expansionary activities have impacted current earnings, at June 30, 2007, approximately half of our growth in loans and deposits is attributable to our eight new bank and thrift offices opened over the last 9 to 14 months. Moving forward, our primary focus will be on growing market share and improving operations in our existing branch network."
Conference Call
The Company will hold a conference call on Friday, July 27, 2007, 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 1-877-407-9210. The conference call will also 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 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 twelve banking offices, located in Ellijay, East Ellijay, Blue Ridge, Blairsville, Chatsworth, Dawsonville, McCaysville and Dahlonega, 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.
Please contact Tracy Newton, Chief Executive Officer, Joe Moss, President and Chief Operating Officer, or Keith Hales, Chief Financial Officer at (706) 276-8160, with any questions or requests for additional information.
APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(Dollars in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- ------------------------
2007 2006 2007 2006
-------- ------- ------- --------
Summary Results of
Operations Data:
Interest income $17,966 $12,513 $34,530 $23,576
Interest
expense 8,532 5,087 16,226 9,162
-------- ------- ------- --------
Net interest
income 9,434 7,426 18,304 14,414
Provision for
loan losses 947 823 1,583 1,708
-------- ------- ------- --------
Net interest
income after
provision
for loan
losses 8,487 6,603 16,721 12,706
Noninterest
income 1,260 937 2,632 1,796
Noninterest
expense 7,435 5,326 14,732 9,912
-------- ------- ------- --------
Income before
taxes 2,312 2,214 4,621 4,590
Income tax
expense 811 776 1,561 1,617
-------- ------- ------- --------
Net income $ 1,501 $ 1,438 $ 3,060 $ 2,973
======== ======= ======= ========
Per Share Data:
Net income,
basic $ 0.29 $ 0.28 $ 0.58 $ 0.58
Net income,
diluted 0.29 0.27 0.58 0.56
Book value 13.30 12.12 13.30 12.12
Weighted average
number of shares
outstanding:
Basic 5,255,507 5,156,124 5,235,250 5,154,911
Diluted 5,256,001 5,274,516 5,256,717 5,281,859
Performance Ratios:
Return on average
assets(1) 0.71% 0.91% 0.75% 0.99%
Return on average
equity(1) 8.68% 9.36% 9.04% 9.83%
Net interest
margin(1) (2) 4.83% 5.11% 4.86% 5.18%
Efficiency
ratio(3) 69.52% 63.69% 70.37% 61.15%
Growth Ratios and
Other Data:
Percentage change
in net income 4.38% 2.93%
Percentage change
in diluted net
income per share 7.41% 3.57%
--------------------------------------------------------------------
At June 30,
--------------------------
2007 2006
---- ----
Summary Balance Sheet Data:
Assets $ 873,576 $ 674,971
Average earning assets QTD 791,258 589,830
Average earning assets YTD 766,388 567,834
Investment securities 76,974 72,912
Mortgage loans held for sale 4,932 --
Loans, net of unearned income 724,898 540,350
Allowance for loan losses 8,880 6,531
Deposits 746,172 558,021
Short-term borrowings 5,965 17,565
Accrued interest 1,841 1,006
Federal Home Loan Bank
advances 39,600 27,250
Subordinated long-term
capital notes 6,186 6,186
Other liabilities 3,236 2,414
Shareholders' equity 70,576 62,529
Asset Quality Ratios:
Nonperforming loans to total
loans 0.63% 0.25%
Nonperforming assets to
total assets 0.73% 0.21%
Net charge-offs to average total
loans 0.05% 0.25%
Allowance for loan losses to
nonperforming loans 193.76% 480.22%
Allowance for loan losses to
total loans 1.22% 1.21%
Growth Ratios and Other Data:
Percentage change in assets 29.42%
Percentage change in loans 35.07%
Percentage change in deposits 33.72%
Percentage change in equity 12.87%
Loans to deposits ratio 97.81%
------------------------------------------------------------
(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 Six Months Ended
June 30, June 30,
------------------- -------------------
2007 2006 2007 2006
-------- ------- -------- --------
Interest Income
Interest and fees on
loans $ 17,021 $ 11,630 $ 32,606 $ 21,930
Interest on securities:
Taxable securities 706 568 1,397 1,099
Nontaxable securities 153 180 310 347
Interest on deposits with
other banks 18 9 64 18
Interest on federal funds
sold 68 126 153 182
-------- -------- ------- -------
Total Interest
Income 17,966 12,513 34,530 23,576
-------- -------- ------- -------
Interest Expense
Interest on deposits 7,895 4,531 15,106 8,201
Interest on federal funds
purchased, short-term notes
and securities sold under
agreements to repurchase 84 122 112 156
Interest on Federal Home
Loan Bank advances 419 306 740 573
Interest on subordinated
long-term capital notes 134 128 268 232
-------- -------- ------- -------
Total Interest
Expense 8,532 5,087 16,226 9,162
-------- -------- ------- -------
Net Interest Income 9,434 7,426 18,304 14,414
Provision for loan losses 947 823 1,583 1,708
-------- -------- ------- -------
Net Interest Income After
Provision for Loan Losses 8,487 6,603 16,721 12,706
-------- -------- ------- -------
Noninterest Income
Customer service fees 548 411 1,061 787
Mortgage origination
commissions 513 278 993 552
Other operating income 199 248 578 457
-------- -------- ------- -------
Total Noninterest
Income 1,260 937 2,632 1,796
-------- -------- ------- -------
Noninterest Expenses
Salaries and employee
benefits 4,523 3,179 8,938 5,869
Occupancy, furniture and
equipment expense 909 653 1,763 1,167
Other operating expenses 2,003 1,494 4,031 2,876
-------- -------- ------- -------
Total Noninterest
expense 7,435 5,326 14,732 9,912
-------- -------- ------- -------
Income before income taxes 2,312 2,214 4,621 4,590
Income tax expense 811 776 1,561 1,617
-------- -------- ------- -------
Net Income $ 1,501 $ 1,438 $ 3,060 $ 2,973
======== ======== ======== ========
Earnings Per Common Share
Basic 0.29 0.28 0.58 0.58
Diluted 0.29 0.27 0.58 0.56
Cash Dividends Declared Per
Common Share -- -- -- --
Weighted Average Shares
Outstanding
Basic 5,255,507 5,156,124 5,235,250 5,154,911
Diluted 5,256,001 5,274,516 5,256,717 5,281,859
APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
(Dollars in thousands)
June 30, Dec. 31, June 30,
2007 2006 2006
-------- ------- --------
Assets
Cash and due from banks $ 17,641 $ 7,940 $ 12,484
Interest-bearing deposits with
other banks 314 541 9,714
Federal funds sold 2,163 3,107 4,163
-------- ------- --------
Cash and Cash Equivalents 20,118 11,588 26,361
Securities available-for-sale 76,974 74,725 72,912
Mortgage loans held for sale 4,932 -- --
Loans, net of unearned income 724,898 631,786 540,350
Allowance for loan losses (8,880) (7,670) (6,531)
-------- ------- --------
Net Loans 716,018 624,116 533,819
Premises and equipment, net 28,531 23,412 20,184
Accrued interest 8,757 8,157 5,444
Cash surrender value on life
insurance 8,604 8,438 8,286
Intangibles, net 2,135 2,197 1,992
Other assets 7,507 5,581 5,973
-------- ------- --------
Total Assets $873,576 $758,214 $674,971
======== ======== ========
Liabilities and Shareholders' Equity
Liabilities
Noninterest-bearing deposits $ 55,679 $ 53,422 $ 56,471
Interest-bearing deposits 690,493 597,712 501,550
-------- ------- --------
Total Deposits 746,172 651,134 558,021
Short-term borrowings 5,965 4,738 17,565
Accrued interest 1,841 1,454 1,006
Federal Home Loan Bank advances 39,600 25,050 27,250
Subordinated long-term capital
notes 6,186 6,186 6,186
Other liabilities 3,236 2,889 2,414
-------- ------- --------
Total Liabilities 803,000 691,451 612,442
-------- ------- --------
Shareholders' Equity
Preferred Stock, 20,000,000 shares
authorized, none issued -- -- --
Common stock, par value $0.01
per share, 20,000,000 shares
authorized, 5,304,726 shares
issued at June 30, 2007,
5,280,497 shares issued at
December 31, 2006 and
5,235,597 shares issued at
June 30, 2006 53 53 52
Paid-in capital 44,233 43,870 43,364
Retained earnings 26,821 23,761 20,730
Accumulated other comprehensive
loss (531) (221) (917)
Treasury stock, at cost (-0-
shares at June 30, 2007,
75,973 shares at December 31,
2006 and June 30, 2006) -- (700) (700)
-------- ------- --------
Total Shareholders' Equity 70,576 66,763 62,529
-------- ------- --------
Total Liabilities and
Shareholders' Equity $873,576 $758,214 $674,971
======== ======== ========
CONTACT: Appalachian Bancshares, Inc.
Tracy Newton, Chief Executive Officer
Joe Moss, President and Chief Operating Officer
Keith Hales, Chief Financial Officer
(706) 276-8160
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