GABA Georgia Bancshares Inc (CE)

Georgia Bancshares, Inc., (OTC BB:GABA.OB), the parent company of The Bank of Georgia, today announced a net loss of ($.7 million) or ($0.24) per share for the nine months ended September 30, 2008, compared to a net income of $2.4 million or $0.84 per share for the same period in 2007. The 3rd Quarter 2008 net loss of ($.9 million) or ($0.30) per share was primarily attributable to a $1.3 million addition to the allowance for loan losses made during the quarter, making the total provision for the nine months $2.0 million. Total assets were $387.1 million at September 30, 2008, a 1.9% increase compared to $379.7 million at September 30, 2007. Loans grew 3.9% to $306.6 million at September 30, 2008 compared to $294.9 million at September 30, 2007. Regarding the challenges related to the downturn in the residential housing market, The Bank of Georgia has remained proactive in aggressively identifying and dealing with problem credits. As mentioned above, our allowance for loan losses at September 30, 2008 totaled $5.2 million or 1.70% of total loans to prepare for any further credit issues that may develop. Net charge-offs against the allowance for loan losses during the first nine months of 2008 totaled $1.3 million. This compares with $238 thousand during the same nine month period in 2007 and $1.1 million for the entire year 2007. At September 30, 2008 non-performing assets (loans on non-accrual plus OREO) were $15.1 million as compared to $9.7 million at the end of the 2nd Quarter 2008. Loans on non-accrual increased slightly during the third quarter of 2008 to $5.3 million as compared to $4.6 million on June 30, 2008. Other real estate owned (OREO) increased to $9.8 million at September 30, 2008 as compared to $5.1 million at June 30, 2008. During the first nine months of 2008, over $3.4 million of repossessed properties have been sold at a cumulative loss of $27 thousand when compared to the values established when placed in OREO. Both our common and preferred stocks are available for market quotations on the Over The Counter Bulletin Board (OTCBB) under the symbols �GABA.OB� and �GABAP.OB�, respectively. For more information about Georgia Bancshares, Inc., visit our Investors Relations website at www.georgiabancshares.com. Based in Peachtree City, GA, Georgia Bancshares, Inc. is a bank holding company that provides traditional bank services to small businesses and consumers through its subsidiary, The Bank of Georgia. The Bank of Georgia opened for business in February 2000, and has nine locations in Peachtree City, Fayetteville, Newnan, Sharpsburg, Tyrone and Fairburn, Georgia. A full-service bank, The Bank of Georgia provides a broad array of services, including checking accounts, money market accounts, certificates of deposit, commercial loans, construction loans, consumer loans (including home equity lines of credit), residential mortgage loans, credit cards, drive-through windows, ATMs, on-line banking, and Visa check cards. For more information about The Bank of Georgia, visit www.bankofgeorgia.com. Except for the historical information contained herein, the matters discussed in this press release may be deemed to be forward-looking statements that involve risks and uncertainties, including changes in economic conditions, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans, the level of allowance for loan losses, the rate of delinquencies and amounts of charge-offs, and competition. Actual strategies and results in future periods may differ materially from those currently expected. These forward-looking statements represent our judgment as of the date of this release. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Georgia Bancshares, Inc. Financial Highlights (In Thousands, Except Per Share Data) � � For the Nine Months Ended September 30, 2008 September 30, 2007 Total interest income $ 16,931 $ 20,036 Total interest expense � 9,150 � � 9,719 � Net interest income 7,781 10,317 Provision for loan losses � 1,996 � � 728 � Net interest income after provision 5,785 9,589 Total other income 1,467 1,311 Total other expense � 8,221 � � 7,314 � Income before income taxes (969 ) 3,586 Income tax expense � (231 ) � 1,144 � Net earnings $ (738 ) $ 2,442 � � Per Share Data: Common shares outstanding - end of period 3,162,371 3,010,023 Weighted average shares outstanding 3,092,151 2,918,828 Weighted average diluted shares outstanding 3,238,423 3,326,237 Basic net earnings per share $ (0.24 ) $ 0.84 Diluted net earnings per share $ (0.23 ) $ 0.73 Cash dividends declared (common) $ 0.30 $ 0.20 Cash dividends declared (preferred) $ 0.33 $ 0.22 Book value (common) $ 8.38 $ 9.29 � At Period End: Loans, gross $ 306,561 $ 294,925 Allowance for loan losses $ 5,201 $ 3,802 Total assets $ 387,408 $ 379,717 Total deposits $ 322,990 $ 318,729 Shareholders' equity $ 28,806 $ 30,254 � Key Performance Ratios: Return on average assets (0.26 )% 0.93 % Return on average equity (3.28 )% 11.37 % Net interest margin 3.10 % 4.43 % Dividend payout ratio (132.52 )% 25.53 % Total efficiency ratio 85.76 % 60.43 % � Asset Quality Ratios: Non-performing assets / loans & OREO 4.77 % 0.61 % Allowance for loan losses / total loans 1.70 % 1.29 % Allowance for loan losses / non-performing assets 34.44 % 211.26 % Allowance for loan losses / total capital 14.82 % 10.60 % Net charge-offs / average loans 0.42 % 0.09 % � Capital Ratios:(The Bank of Georgia, per Call Report) Equity / assets 7.44 % 7.97 % Tier 1 leverage ratio 9.11 % 9.83 % Total risk based capital ratio 11.34 % 11.95 %