American Community Bancshares, Inc. Announces Earnings for the Quarter Ended June 30, 2004 CHARLOTTE, N.C., July 20 /PRNewswire-FirstCall/ -- Randy P. Helton, President and Chief Executive Officer of American Community Bancshares, Inc. (Nasdaq: ACBA; ACBAW) the holding company for American Community Bank and First National Bank of the Carolinas, announced higher unaudited earnings for the three months ended June 30, 2004 of $655,000 or an 61.3% increase over unaudited earnings for the three months ended June 30, 2003 of $406,000. Earnings per share (diluted) for the three months ended June 30, 2004 increased to $0.18 compared to $0.14 for the three months ended June 30, 2003. The annualized return on average assets for the quarter was 0.73% with a return on average equity of 8.16%. Net income for the six months ended June 30, 2004 was $1,130,000 or a 68.9% increase over net income for the six months ended June 30, 2003 of $669,000. Earnings per share (diluted) for the three months ended June 30, 2004 increased to $0.33 compared to $0.24 for the three months ended June 30, 2003. The annualized return on average assets for the six months was 0.71%, with a return on average equity of 7.85%. Total assets at June 30, 2004 were $368.1 million, with loan and lease receivables of $280.6 million, deposits of $280.0 million, borrowings of $51.6 million, and stockholders' equity of $34.7 million. Total assets increased 50.2% or $123.1 million, from June 30, 2003, loan and lease receivables increased 50.4% or $94.0 million, deposits increased 41.6% or $82.3 million and borrowings increased 124.1% or $28.6 million. The acquisition of First National Bank of the Carolinas of Gaffney, South Carolina added assets of $82.7 million, total loans of $56.1 million and deposits and $61.3 million at April 15, 2004. "All of us at American Community Bancshares are especially pleased with the acquisition of First National Bank of the Carolinas and the addition of our new branches in Gaffney and Blacksburg, South Carolina. We are very excited about the opportunities that exist for expansion into the South Carolina markets," said Randy Helton, President and Chief Executive Officer of American Community Bancshares, Inc. The allowance for loan losses represented 1.20% of total loans at June 30, 2004. Non-performing loans totaled $378,000 or 0.13% of loans at June 30, 2004 compared to $91,000 or 0.05% of loans at June 30, 2003, a $287,000 or a 315% increase. Non-performing assets (which includes foreclosed real estate and repossessed assets) totaled $527,000 at June 30, 2004 and represented 0.14% of total assets compared to $281,000 or 0.11% of total assets at June 30, 2003, a $246,000 or 87.5% increase. Net interest income for the quarter ended June 30, 2004 totaled $2.9 million, an increase of 52.6% over the $1.9 million for the quarter ended June 30, 2003. Quarter-end results also include a $137,000 or 18.4% increase in non-interest income from $745,000 for the three months ended June 30, 2003 to $882,000 for the three months ended June 30, 2004. In addition, operating expenses increased $731,000 or 36.8% from $1.9 million for the three months ended June 30, 2003 to $2.6 million for the three months ended June 30, 2004. American Community Bancshares, headquartered in Charlotte, NC is the holding company for American Community Bank and First National Bank of the Carolinas. American Community Bank is a full service community bank, headquartered in Monroe, NC with five offices in Union County, North Carolina's fastest growing county. The Bank also has three offices in Mecklenburg County, home of Charlotte, North Carolina's largest city and the nation's second largest financial center. First National Bank of the Carolinas is a full service community bank, headquartered in Gaffney, SC with two offices in Gaffney and one in Blacksburg, SC. A proposed fourth branch was recently announced to be built in the township of Tega Cay located in York County, SC. The Banks provide a wide assortment of traditional banking and financial services offered with a high level of personal attention. American Community Bancshares website is http://www.americancommunitybank.com/ . American Community Bancshares stock is traded on the NASDAQ SmallCap market under the symbol "ACBA" with stock warrants traded under "ACBAW." For more information contact -- Stephanie Helms, Shareholder Relations, or Dan Ellis, CFO at (704) 225-8444. American Community Bancshares, Inc. (Amounts in thousands except per share data) (Unaudited) Consolidated Balance Sheet June 30, March 31, December 31, 2004 2004 2003 (a) Assets Cash and due from banks $5,960 $9,351 $7,330 Interest-earning deposits with banks 5,774 7,520 11,012 Investment securities 51,488 48,908 52,069 Loans 283,995 212,066 204,533 Allowance for loan losses (3,413) (2,645) (2,529) Net loans 280,582 209,421 202,004 Accrued interest receivable 1,407 1,184 1,131 Bank premises and equipment 8,284 5,267 5,339 Foreclosed real estate 122 21 117 Federal Home Loan Bank stock 1,088 672 792 Goodwill 10,125 - - Other assets 3,285 1,774 1,459 Total assets $368,115 $284,118 $281,253 Liabilities and stockholders' equity Deposits Non-interest bearing $41,718 $35,638 $29,782 Interest bearing 238,277 175,195 178,381 Total deposits 279,995 210,833 208,163 Borrowings 51,578 47,928 48,319 Accrued expenses and other liabilities 1,865 851 582 Total liabilities 333,438 259,612 257,064 Total stockholders' equity 34,677 24,506 24,189 Total liabilities and stockholders' equity $368,115 $284,118 $281,253 Ending shares outstanding 3,446,753 2,827,709 2,825,709 Book value per share 10.06 8.67 8.56 (a) Derived from audited financial statements American Community Bancshares, Inc. (Amounts in thousands except per share data) (Unaudited) Consolidated Balance Sheet September 30, June 30, 2003 2003 Assets Cash and due from banks $6,274 $7,846 Interest-earning deposits with banks 3,205 1,116 Investment securities 54,425 40,842 Loans 200,102 188,853 Allowance for loan losses (2,426) (2,286) Net loans 197,676 186,567 Accrued interest receivable 1,084 1,060 Bank premises and equipment 5,271 5,197 Foreclosed real estate - 94 Federal Home Loan Bank stock 792 792 Goodwill - - Other assets 1,780 1,462 Total assets $270,507 $244,976 Liabilities and stockholders' equity Deposits Non-interest bearing $31,721 $25,084 Interest bearing 176,069 172,659 Total deposits 207,790 197,743 Borrowings 38,156 23,021 Accrued expenses and other liabilities 768 716 Total liabilities 246,714 221,480 Total stockholders' equity 23,793 23,496 Total liabilities and stockholders' equity $270,507 $244,976 Ending shares outstanding 2,824,376 2,824,376 Book value per share 8.42 8.32 (a) Derived from audited financial statements American Community Bancshares, Inc. Consolidated Income Statements (Amounts in thousands except per share data) (Unaudited) June 30, March 31, December 31, Three months ended 2004 2004 2003 Total interest income $4,421 $3,534 $3,458 Total interest expense 1,492 1,346 1,274 Net interest income 2,929 2,188 2,184 Provision for loan losses 140 118 148 Net interest income after provision for loan loss 2,789 2,070 2,036 Non-interest income Service charges on deposit accounts 585 465 372 Mortgage banking operations 108 66 72 Realized gains on sale of securities - 58 - Other 189 113 98 Total non-interest income 882 702 542 Non-interest expense Salaries and employee benefits 1,316 1,011 1,022 Occupancy and equipment 440 369 409 Other 874 634 665 Total non-interest expense 2,630 2,014 2,096 Income before income taxes 1,041 758 482 Provision for income taxes 386 283 175 Net income $655 $475 $307 Net income per share Basic $0.20 $0.17 $0.11 Diluted $0.18 $0.15 $0.10 Weighted average number of shares outstanding Basic 3,344,713 2,826,039 2,824,376 Diluted 3,703,920 3,145,162 3,053,723 Return on average equity 8.16% 7.84% 5.12% Return on average assets 0.73% 0.69% 0.45% Net interest margin 3.46% 3.38% 3.42% Allowance for loan losses to total loans 1.20% 1.25% 1.24% Net charge-offs to avg loans (annualized) 0.09% 0.00% 0.27% Nonperforming loans to total loans 0.13% 0.13% 0.16% Nonperforming assets to total assets 0.14% 0.12% 0.17% American Community Bancshares, Inc. Consolidated Income Statements (Amounts in thousands except per share data) (Unaudited) September 30, June 30, Three months ended 2003 2003 Total interest income $3,304 $3,263 Total interest expense 1,287 1,342 Net interest income 2,017 1,921 Provision for loan losses 144 127 Net interest income after provision for loan loss 1,873 1,794 Non-interest income Service charges on deposit accounts 420 481 Mortgage banking operations 142 163 Realized gains on sale of securities - - Other 116 101 Total non-interest income 678 745 Non-interest expense Salaries and employee benefits 975 1,003 Occupancy and equipment 355 302 Other 562 594 Total non-interest expense 1,892 1,899 Income before income taxes 659 640 Provision for income taxes 247 234 Net income $412 $406 Net income per share Basic $0.15 $0.14 Diluted $0.14 $0.14 Weighted average number of shares outstanding Basic 2,824,376 2,824,376 Diluted 2,900,162 2,859,066 Return on average equity 7.00% 6.98% Return on average assets 0.66% 0.68% Net interest margin 3.43% 3.42% Allowance for loan losses to total loans 1.21% 1.21% Net charge-offs to avg loans (annualized) 0.00% -0.07% Nonperforming loans to total loans 0.13% 0.05% Nonperforming assets to total assets 0.12% 0.15% DATASOURCE: American Community Bancshares, Inc. CONTACT: Stephanie Helms, Shareholder Relations, or Dan Ellis, CFO, of American Community Bancshares, Inc., +1-704-225-8444

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