Appalachian Bancshares, Inc. Reports Increases in Net Income of 8%
and 31% for the Three and Twelve Months (Respectively) Ended
December 31, 2004 ELLIJAY, Ga., Jan. 31 /PRNewswire-FirstCall/ --
Appalachian Bancshares, Inc. (the "Company") (Other OTC: APAB.PK),
today announced that net income for the quarter ended December 31,
2004, was $1,102,655, compared to net income of $1,016,597 for the
quarter ended December 31, 2003, which represents an increase of
$86,058, or 8.47%. Basic earnings per share were $0.30 and $0.28
for the quarters ended December 31, 2004 and 2003, respectively, an
increase of 7.14%. Diluted earnings per share were $0.28 and $0.26
for the quarters ended December 31, 2004, and 2003, respectively,
an increase of 7.69%. Net income for the twelve months ended
December 31, 2004, was $4,047,014, compared to net income of
$3,086,580 for the twelve months ended December 31, 2003, which
represents an increase of $960,434, or 31.12%. Basic earnings per
share were $1.09 and $0.86 for the twelve months ended December 31,
2004 and 2003, respectively, an increase of 26.74%. Diluted
earnings per share were $1.04 and $0.81 for the twelve months ended
December 31, 2004, and 2003, respectively, an increase of 28.40%.
Net interest income increased from $4,161,300 to $4,815,692, or
15.73%, from the quarter ended December 31, 2003, to the quarter
ended December 31, 2004. The provision for loan loss was $310,000
for the quarter ended December 31, 2004, compared to $360,000 for
the quarter ended December 31, 2003. Non-interest expense increased
$547,225, from $3,069,445 to $3,616,670, from the quarter ended
December 31, 2003, to the quarter ended December 31, 2004. This
increase was related primarily to expenses associated with the
increase in the staff of Appalachian Community Bank, the Company's
wholly- owned subsidiary (the "Bank"), which was necessary in order
to accommodate the growth that the Bank has experienced, as well as
the opening, during the second quarter, of a new 9,000-square-foot
branch office in Blue Ridge, Georgia, with a 3,500-square-foot
community building, in order to better service the Bank's Blue
Ridge market. Net interest income increased from $14,833,485 to
$18,177,973, or 22.55%, from the twelve months ended December 31,
2003, to the twelve months ended December 31, 2004. The provision
for loan loss was $1,235,107 for the twelve months ended December
31, 2004, compared to $1,465,000 for the twelve months ended
December 31, 2003. The ratio of loan loss reserves to total loans
increased from 1.09% to 1.15%, for the twelve months ended December
31, 2003, and 2004, respectively. Non-interest expenses increased
$2,108,023, from $11,731,985 to $13,840,008, for the twelve months
ended December 31, 2003, to the twelve months ended December 31,
2004. Tracy R. Newton, President and Chief Executive Officer of the
Company, stated, "We are very pleased with the financial goals the
Company achieved during 2004. This is the result of all the
employees, officers and directors pulling together and working
towards a common goal. When you stay focused on the customer and
build relationships, the financial results will come." Mr. Newton
also stated that, "Site preparation continues at the Highlands
Shopping Center in East Ellijay and at the location for the
corporate office facility on Industrial Blvd in Ellijay. We plan to
have these projects completed by December 2005. The Company had an
excellent year in 2004 and we look forward to serving our
communities in 2005." Appalachian Bancshares, Inc., is a bank
holding company that owns all of the outstanding shares of capital
stock of Appalachian Community Bank. The Company, through
Appalachian Community Bank, engages in a full range of banking
services in northern Georgia, through banking offices located in
Ellijay, East Ellijay, Blue Ridge and Blairsville, Georgia. The
main banking office of the Company, which is located in Ellijay,
Georgia, is operated under the trade name "Gilmer County Bank."
Certain statements in the release contain "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995, which statements can generally be identified by
the use of forward-looking terminology, such as "may," "will,"
"expect," "estimate," "anticipate," "believe," "target," "plan,"
"project," "continue," or the negatives thereof, or other
variations thereon or similar terminology, and are made on the
basis of management's plans and current analyses of the Company,
its business and the industry as a whole. 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. The
above factors, in some cases, have affected, and in the future
could affect, the Company's financial performance and could cause
actual results for 2005 and beyond to differ materially from those
expressed or implied in such forward-looking statements, even if
experience or future changes make it clear that any projected
results expressed or implied therein will not be realized.
APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION December 31, 2004 (Unaudited) and
December 31, 2003 December 31, 2004 December 31, (Unaudited) 2003 %
Change Assets Cash and due from banks $4,953,563 $6,530,984 -24.15%
Interest-bearing deposits with other banks 403,532 273,841 47.36%
Federal funds sold 2,156,000 586,000 267.92% Cash and Cash
Equivalents 7,513,095 7,390,825 1.65% Securities available-for-sale
64,654,722 55,363,327 16.78% Loans, net of unearned income
377,351,501 332,306,446 13.56% Allowance for loan losses
(4,348,618) (3,609,794) 20.47% Net Loans 373,002,883 328,696,652
13.48% Premises and equipment, net 12,988,640 9,161,652 41.77%
Accrued interest 2,901,737 2,289,994 26.71% Cash surrender value on
life insurance 7,833,450 2,592,416 202.17% Intangibles, net
2,116,558 2,157,433 -1.89% Other assets 1,800,043 1,965,179 -8.40%
Total Assets $472,811,128 $409,617,478 15.43% Liabilities and
Shareholders' Equity Liabilities Deposits: Noninterest-bearing
$32,896,346 $23,795,787 38.24% Interest-bearing 348,601,825
309,123,161 12.77% Total Deposits 381,498,171 332,918,948 14.59%
Short-term borrowings 15,469,540 12,085,992 28.00% Accrued interest
540,217 670,614 -19.44% Long-term debt 31,950,000 25,692,858 24.35%
Guaranteed preferred beneficial interest in the Company's
subordinated debentures 6,186,000 6,186,000 0.00% Other liabilities
1,083,878 980,713 10.52% Total Liabilities 436,727,806 378,535,125
15.37% Shareholders' Equity Preferred Stock, 20,000,000 shares
authorized, none issued - - 0.00% Common stock, par value $0.01 per
share, 20,000,000 shares authorized, 3,840,572 shares issued at
December 31, 2004 and 3,734,686 shares issued at December 31, 2003
38,406 37,347 2.84% Paid-in capital 23,731,549 22,727,208 4.42%
Retained earnings 12,635,174 8,588,160 47.12% Accumulated other
comprehensive income: net unrealized holding gains on securities
available-for-sale, net of deferred income tax 377,989 429,434
-11.98% Treasury stock, at cost (75,973 shares at December 31, 2004
and at December 31, 2003) (699,796) (699,796) 0.00% Total
Shareholders' Equity 36,083,322 31,082,353 16.09% Total Liabilities
and Shareholders' Equity $472,811,128 $409,617,478 15.43%
APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF INCOME For the Three Months and Twelve Months Ended
December 31, 2004 and 2003 (Unaudited) Three Months Ended December
31, 2004 2003 % Change Interest Income Interest and fees on loans
$6,342,359 $5,348,248 18.59% Interest on investment securities:
Taxable securities 395,327 351,225 12.56% Nontaxable securities
162,639 167,064 -2.65% Interest on deposits in other banks 3,415
1,408 142.54% Interest on federal funds sold 10,580 2,978 255.27%
Total Interest Income 6,914,320 5,870,923 17.77% Interest Expense
Interest on deposits 1,700,777 1,443,339 17.84% Interest on federal
funds purchased and securities sold under agreements to repurchase
46,432 18,384 152.57% Interest on long-term debt 266,219 184,000
44.68% Interest on subordinated debentures 85,200 63,900 33.33%
Total Interest Expense 2,098,628 1,709,623 22.75% Net Interest
Income 4,815,692 4,161,300 15.73% Provision for loan losses 310,000
360,000 -13.89% Net Interest Income After Provision For Loan Losses
4,505,692 3,801,300 18.53% Noninterest Income Customer services
fees 346,280 246,549 40.45% Insurance commissions 8,693 6,605
31.61% Mortgage origination fees 160,708 216,582 -25.80% Other
operating income 229,584 156,321 46.87% Investment securities gains
(losses) - - 0.00% Total Noninterest Income 745,265 626,057 19.04%
Noninterest Expenses Salaries and employee benefits 1,854,858
1,484,592 24.94% Occupancy expense 210,692 166,918 26.22% Furniture
and equipment expense 296,331 256,135 15.69% Other operating
expenses 1,254,789 1,161,800 8.00% Total Noninterest expense
3,616,670 3,069,445 17.83% Income before income taxes 1,634,287
1,357,912 20.35% Income tax expense 531,632 341,315 55.76% Net
Income $1,102,655 $1,016,597 8.47% Earnings Per Common Share Basic
$0.30 $0.28 7.14% Diluted 0.28 0.26 7.69% Cash Dividends Declared
Per Common Share $- $- 0.00% Weighted Average Shares Outstanding
Basic 3,736,079 3,658,713 2.11% Diluted 3,894,154 3,850,591 1.13%
APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF INCOME For the Three Months and Twelve Months Ended
December 31, 2004 and 2003 (Unaudited) Twelve Months Ended December
31, 2004 2003 % Change Interest Income Interest and fees on loans
$23,652,087 $21,257,660 11.26% Interest on investment securities:
Taxable securities 1,401,522 1,058,688 32.38% Nontaxable securities
650,486 706,115 -7.88% Interest on deposits in other banks 5,488
30,224 -81.84% Interest on federal funds sold 26,369 37,362 -29.42%
Total Interest Income 25,735,952 23,090,049 11.46% Interest Expense
Interest on deposits 6,209,262 6,959,433 -10.78% Interest on
federal funds purchased and securities sold under agreements to
repurchase 123,282 82,722 49.03% Interest on long-term debt 941,835
1,129,209 -16.59% Interest on subordinated debentures 283,600
85,200 232.86% Total Interest Expense 7,557,979 8,256,564 -8.46%
Net Interest Income 18,177,973 14,833,485 22.55% Provision for loan
losses 1,235,107 1,465,000 -15.69% Net Interest Income After
Provision For Loan Losses 16,942,866 13,368,485 26.74% Noninterest
Income Customer services fees 1,233,655 844,669 46.05% Insurance
commissions 47,760 61,824 -22.75% Mortgage origination fees 800,981
1,276,787 -37.27% Other operating income 769,725 537,093 43.31%
Investment securities gains (losses) (22,633) (16,978) -33.31%
Total Noninterest Income 2,829,488 2,703,395 4.66% Noninterest
Expenses Salaries and employee benefits 6,884,579 5,645,790 21.94%
Occupancy expense 814,868 631,235 29.09% Furniture and equipment
expense 1,140,815 980,704 16.33% Other operating expenses 4,999,746
4,474,256 11.74% Total Noninterest expense 13,840,008 11,731,985
17.97% Income before income taxes 5,932,346 4,339,895 36.69% Income
tax expense 1,885,332 1,253,315 50.43% Net Income $4,047,014
$3,086,580 31.12% Earnings Per Common Share Basic $1.09 $0.86
26.74% Diluted $1.04 0.81 28.40% Cash Dividends Declared Per Common
Share $- $- 0.00% Weighted Average Shares Outstanding Basic
3,724,095 3,609,728 3.17% Diluted 3,885,490 3,809,625 1.99%
APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES FINANCIAL HIGHLIGHTS
(Unaudited) Three Months Three Months Ended Ended December 31,
December 31, 2004 2003 % Change Earnings Summary (amounts in
thousands) Net income for period $1,103 $1,017 8.47% Net interest
income 4,816 4,161 15.73% Net interest income (tax equivalent)
4,902 4,271 14.77% Noninterest expense 3,617 3,069 17.83% Select
Average Balances (amounts in thousands) Loans $375,089 $330,378
13.53% Allowance for loan losses 4,266 3,644 17.07% Investment
securities 59,925 54,484 9.99% Earning assets 437,850 386,450
13.30% Total assets 467,450 406,517 14.99% Deposits 378,071 328,651
15.04% Shareholders' equity 34,976 30,442 14.89% Per Common Share
Net income - basic $0.30 $0.28 7.14% Net income - diluted 0.28 0.26
7.69% Book value 9.58 8.50 12.71% End of period shares outstanding
3,764,599 3,658,713 2.89% Weighted average shares outstanding:
Basic 3,736,079 3,658,713 2.11% Diluted 3,894,154 3,850,591 1.13%
Ratios Return on average assets 0.94% 1.00% Return on average
equity 12.61% 13.36% Average earning assets to average total assets
93.67% 95.06% Average loans as percentage of average deposits
99.21% 100.53% Net interest margin (tax equivalent) 4.48% 4.42%
Average equity to average assets 7.48% 7.49% Efficiency ratio
75.10% 73.76% Loan loss reserve to total loans 1.15% 1.09%
APPALACHIAN BANCSHARES, INC. AND SUBSIDIARIES FINANCIAL HIGHLIGHTS
(Unaudited) Twelve Months Twelve Months Ended Ended December 31,
December 31, 2004 2003 % Change Earnings Summary (amounts in
thousands) Net income for period $4,047 $3,087 31.12% Net interest
income 18,178 14,833 22.55% Net interest income (tax equivalent)
18,534 15,263 21.43% Noninterest expense 13,840 11,732 17.97%
Select Average Balances (amounts in thousands) Loans $360,261
$316,605 13.79% Allowance for loan losses 4,094 3,450 18.67%
Investment securities 56,981 49,951 14.07% Earning assets 419,586
371,496 12.94% Total assets 446,074 393,553 13.35% Deposits 362,316
320,833 12.93% Shareholders' equity 33,102 28,447 16.36% Per Common
Share Net income - basic $1.09 $0.86 26.74% Net income - diluted
$1.04 0.81 28.40% Book value 9.58 8.50 12.71% End of period shares
outstanding 3,764,599 3,658,713 2.89% Weighted average shares
outstanding: Basic 3,724,095 3,609,728 3.17% Diluted 3,885,490
3,809,625 1.99% Ratios Return on average assets 0.91% 0.78% Return
on average equity 12.23% 10.85% Average earning assets to average
total assets 94.06% 94.40% Average loans as percentage of average
deposits 99.43% 98.68% Net interest margin (tax equivalent) 4.42%
4.11% Average equity to average assets 7.42% 7.23% Efficiency ratio
76.14% 79.09% Loan loss reserve to total loans 1.15% 1.09%
DATASOURCE: Appalachian Bancshares, Inc. CONTACT: Tracy R. Newton,
Chief Executive Officer, or Darren M. Cantlay, Chief Financial
Officer, both of Appalachian Bancshares, Inc., +1-706-276-8000 Web
site: http://www.appalachianbancshares.com/
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