CHARLOTTE, N.C., Jan. 25 /PRNewswire-FirstCall/ -- American Community Bancshares, Inc. , the holding company for American Community Bank, announced unaudited earnings for the year ended December 31, 2007 of $5,020,000, an increase of $744,000 or 17.4% from unaudited earnings for the year ended December 31, 2006. Diluted earnings per common share increased to $0.72 for the year ended December 31, 2007 compared to $0.60 for the year ended December 31, 2006. Return on average equity was 9.15% and 8.08% and return on average assets was 1.01% and .91% for the years ended December 31, 2007 and 2006, respectively.
Earnings were higher for the year due to an increase in net interest income of $420,000 as a result of an $18.0 million increase in earning assets which was partially offset by a 20 basis point decrease in average net interest margin. In addition the provision for loan losses decreased $1.6 million to $1.0 million in 2007 as compared to $2.6 million in 2006. The large provision in 2006 was primarily due to problems that arose in the leasing portfolio. That line of business was discontinued in 2006 and the remaining balances of $3.9 million continue to roll off. Compensation expense increased as a result of normal salary increases combined with an increase in employee headcount during 2007. Other expense increased $428,000 and was primarily a result of an increase in professional fees of $233,000 combined with an increase in FDIC federal deposit insurance premiums of $256,000.
Unaudited earnings for the quarter ended December 31, 2007 were $1,112,000, a $313,000 or 22.0% decrease over unaudited earnings for the quarter ended December 31, 2006 of $1,425,000. Diluted earnings per share for the quarter ended December 31, 2007 decreased to $.17 compared to $.20 for the quarter ended December 31, 2006. Earnings were down primarily due to a decrease in net interest margin from 4.28% for the quarter ended December 31, 2006 to 4.01% for the quarter ended December 31, 2007 which resulted in a $187,000 decrease in net interest income. In addition the provision for loan losses was $328,000 higher for the quarter ended December 31, 2007 primarily due to the growth in the loan portfolio in the fourth quarter of 2007.
Total assets as of December 31, 2007 were $505.3 million, compared to $494.7 million at December 31, 2006, an increase of $10.6 million or 2.1%. Total loans were $387.2 million, an increase of $22.4 million or 6.1%, over the $364.8 million reported at December 31, 2006. Total deposits were $399.8 million, a slight decrease of $1.3 million or 0.32% over year ended 2006 deposits of $401.1 million. Asset quality continues to improve on a linked quarter basis, as nonperforming assets decreased to $1.2 million or 0.24% of assets in the fourth quarter of 2007 from $1.5 million or 0.29% of assets in the third quarter of 2007 continuing the positive trend in problem assets.
American Community Bancshares, Inc., headquartered in Charlotte, North Carolina is the holding company for American Community Bank. American Community Bank is a full service community bank headquartered in Monroe, North Carolina with nine North Carolina offices located in two of the fastest growing counties in North Carolina, Mecklenburg and Union. It also has four offices located in York and Cherokee Counties in South Carolina. American Community Bank provides a wide assortment of traditional banking and financial services offered with a high level of personal attention. The website for American Community Bancshares, Inc. is http://www.americancommunitybank.com/. Its stock is traded on the NASDAQ Capital Market under the symbol "ACBA". For more information contact: Stephanie Helms, Shareholder Relations or Dan Ellis, Chief Financial Officer at (704) 225- 8444.
This press release contains "forward-looking statements." These statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation, the effects of future economic conditions, governmental fiscal and monetary policies, legislative and regulatory changes, the risks of changes in interest rates and the effects of competition. Additional factors that could cause actual results to differ materially are discussed in American Community Bancshares's recent filings with the Securities and Exchange Commission, including but not limited to its Annual Report on Form 10-K and its other periodic reports.
American Community Bancshares, Inc. (Amounts in thousands except share and per share data) (Unaudited) Consolidated Balance Sheet Dec, 31, Sept. 30, June 30, March 31, Dec. 31, 2007 2007 2007 2007 2006(a) Assets Cash and due from banks $14,346 $15,684 $17,989 $17,977 $19,950 Interest-earning deposits with banks 930 5,484 11,481 14,381 17,295 Investment securities 76,782 79,043 74,012 59,946 65,192 Loans 392,959 373,309 381,415 375,395 370,431 Allowance for loan losses (5,740) (5,374) (5,543) (5,472) (5,628) Net loans 387,219 367,935 375,872 369,923 364,803 Accrued interest receivable 2,640 2,922 2,615 2,751 2,938 Bank premises and equipment 8,694 8,746 8,927 9,046 9,105 Foreclosed real estate - 25 25 25 195 Non-marketable equity securities at cost 2,119 2,119 2,119 1,819 1,879 Goodwill 9,838 9,838 9,838 9,838 9,838 Other assets 2,685 3,232 2,803 3,302 3,463 Total assets $505,253 $495,028 $505,681 $489,008 $494,658 Liabilities and Stockholders' Equity Deposits Non-interest bearing $54,459 $54,805 $58,453 $62,414 $61,735 Interest bearing 345,335 342,574 349,013 333,576 339,402 Total deposits 399,794 397,379 407,466 395,990 401,137 Borrowings 49,504 43,533 40,984 34,934 37,085 Accrued expenses and other liabilities 1,931 1,649 1,272 1,797 1,368 Total liabilities 451,229 442,561 449,722 432,721 439,590 Total stockholders' equity 54,024 52,467 55,959 56,287 55,068 Total liabilities and stockholders' equity $505,253 $495,028 $505,681 $489,008 $494,658 Ending shares outstanding 6,502,288 6,502,288 6,961,236 7,020,343 7,008,081 Book value per share $8.31 $8.07 $8.04 $8.02 $7.86 Average Balances: Loans $379,191 $372,407 $373,741 $369,191 $360,877 Earning assets 462,078 460,577 460,615 444,022 450,244 Total assets 499,430 501,961 496,220 487,791 491,385 Interest-bearing deposits 344,619 346,820 341,627 331,231 332,523 Stockholders' equity 53,366 54,041 56,236 55,752 54,599 (a) Derived from audited consolidated financial statements, except average balance data American Community Bancshares, Inc. (Amounts in thousands except per share data) (Unaudited) Three Months Consolidated Income Ended December 31, Year ended December 31, Statements 2007 2006 2007 2006 (a) Total interest income $8,737 $8,754 $35,426 $32,334 Total interest expense 4,068 3,898 16,193 13,521 Net interest income 4,669 4,856 19,233 18,813 Provision for loan losses 471 143 1,041 2,612 Net interest income after provision for loan losses 4,198 4,713 18,192 16,201 Non-interest income Service charges on deposit accounts 613 615 2,419 2,393 Mortgage banking operations 83 81 326 352 Realized gains on sale of securities - - (56) 60 Other 205 99 626 548 Total non-interest income 901 795 3,315 3,353 Non-interest expense Salaries and employee benefits 1,724 1,577 6,893 6,474 Occupancy and equipment 505 570 2,194 2,261 Other 1,132 1,114 4,531 4,103 Total non-interest expense 3,361 3,261 13,618 12,838 Income before income taxes 1,738 2,247 7,889 6,716 Provision for income taxes 626 822 2,869 2,440 Net income $1,112 $1,425 $5,020 $4,276 Net income per share Basic 0.17 0.20 0.74 0.62 Diluted 0.17 0.20 0.72 0.60 Weighted average number of shares outstanding Basic 6,502,288 6,993,838 6,779,635 6,913,534 Diluted 6,652,452 7,191,755 6,938,259 7,171,413 Return on average equity 8.26% 10.35% 9.15% 8.08% Return on average assets 0.88% 1.15% 1.01% 0.91% Net interest margin 4.01% 4.28% 4.19% 4.39% Efficiency ratio 60.34% 57.71% 60.40% 57.92% Net charge-offs to avg loans (annualized) 0.10% 0.60% 0.25% 0.37% (a) Derived from audited financial statements American Community Bancshares, Inc. Consolidated Income Statements (Amounts in thousands except share and per share data) (Unaudited) December 31, September 30, June 30, Three months ended 2007 2007 2007 Total interest income $8,737 $9,070 $8,921 Total interest expense 4,068 4,225 4,001 Net interest income 4,669 4,845 4,920 Provision for loan losses 471 156 231 Net interest income after provision for loan loss 4,198 4,689 4,689 Non-interest income Service charges on deposit accounts 613 617 608 Mortgage banking operations 83 70 93 Realized gains on sale of securities - 2 - Gain (loss) on economic hedge 132 138 (67) Other 73 134 88 Total non-interest income 901 961 722 Non-interest expense Salaries and employee benefits 1,724 1,768 1,743 Occupancy and equipment 505 560 564 Other than temporary impairment - - - Other 1,132 1,121 1,175 Total non-interest expense 3,361 3,449 3,482 Income before income taxes 1,738 2,201 1,929 Provision for income taxes 626 801 707 Net income $1,112 $1,400 $1,222 Net income per share Basic $0.17 $0.21 $0.18 Diluted $0.17 $0.21 $0.17 Weighted average number of shares outstanding Basic 6,502,288 6,635,709 6,978,724 Diluted 6,652,452 6,799,753 7,140,680 Return on average equity 8.26% 10.28% 8.81% Return on average assets 0.88% 1.11% 1.00% Net interest margin 4.01% 4.22% 4.28% Efficiency ratio 60.34% 59.40% 61.72% Allowance for loan losses to total loans 1.46% 1.44% 1.45% Net charge-offs to avg loans (annualized) 0.10% 0.35% 0.17% Nonperforming loans to total loans 0.31% 0.37% 0.40% Nonperforming assets to total assets 0.24% 0.29% 0.31% March 31, December 31, Three months ended 2007 2006 Total interest income $8,698 $8,754 Total interest expense 3,899 3,898 Net interest income 4,799 4,856 Provision for loan losses 183 143 Net interest income after provision for loan loss 4,616 4,713 Non-interest income Service charges on deposit accounts 581 615 Mortgage banking operations 80 81 Realized gains on sale of securities 17 - Gain (loss) on economic hedge 11 - Other 118 99 Total non-interest income 807 795 Non-interest expense Salaries and employee benefits 1,658 1,577 Occupancy and equipment 565 570 Other than temporary impairment 76 - Other 1,103 1,114 Total non-interest expense 3,402 3,261 Income before income taxes 2,021 2,247 Provision for income taxes 735 822 Net income $1,286 $1,425 Net income per share Basic $0.18 $0.20 Diluted $0.18 $0.20 Weighted average number of shares outstanding Basic 7,008,971 6,993,838 Diluted 7,176,577 7,191,755 Return on average equity 9.36% 10.35% Return on average assets 1.05% 1.15% Net interest margin 4.38% 4.28% Efficiency ratio 60.68% 56.91% Allowance for loan losses to total loans 1.46% 1.52% Net charge-offs to avg loans (annualized) 0.37% 0.60% Nonperforming loans to total loans 0.41% 0.57% Nonperforming assets to total assets 0.32% 0.47%
