Appalachian Bank agrees to reduce real esate loans

[Mickey]

[I love the fact that Appalation Bank has three banks located in Ellijay and also has five atms scattared about.Convience is what I want and any loans I have had with them I was treated fairly. My big mega bank credit card has been unfair to me twice now. I paid them in full by establishing a personal line of credit at my local bank saving 13 percent interest Go local, deal with a person .

[epworth]

FROM THE FTC:
On October 28, 2009, Appalachian Bancshares, Inc.(the "Company") executed an agreement to issue 5,999,994 shares of its common stock,$.01 par value per share (the "Shares"), to Alan S. Dover, Charles A. Edmondson, Joseph C. Hensley, Frank E. Jones, J. Ronald Knight, Tracy R. Newton, and Kenneth D. Warren (collectively, the "Purchasers") in exchange for $3.0 million aggregate principal amount of Appalachian Community Bank Fixed Rate Subordinated Notes, due September 30, 2015 (the "Notes"). The Purchasers are each existing shareholders and members of the Company's board of directors.

Now in plain English:
Look up the form 8-K if you like, but when APAB was removed from NASDAQ it was at $0.20/share. Then, last week the directors exercised their right to be paid $0.50/share that they purchased at the sum of $0.01/share. Why would they exercise their stock options unless they knew the price would never again go above fifty cents per share? Is it just me or did the rats just jump ship?

[Warren Buffett]

Read the SEC filings and the cease and desist orders and understand that they lost $6Million in July after their 2nd Qtr report. More losses are likely and the FDIC is at their doorstep. Their non-performing assets are very bad and getting worse not better.

"Sometimes it is better to come to a Horrible End than to be an Endless Horror". The horrible end is here and there may not be an after-life as the FDIC will have a difficult time finding a bank that wants these branches. SunTrust may want Blue Ridge, Ellijay, Dalton and Dawsonville as they may not overlap that much. UCBI and BBT would exceed the deposit concentrations in some locations. Asset liquidations will take some time and FDIC deposits are protected up to the max limits. McCaysville, Ducktown and a couple of others will be gone.
Just remember when a bank pays higher interest that it means they are desperate to raise funds and this is the last source. Not all of the high interest will be paid by the FDIC but the base amount will be protected. Unfortunately, Crescent and Habersham and others are also on the same list.

When the final analysis is done as to why this bank failed, there should be some questions of the Board as to why they were not implementing controls instead of making loans based on the "fog the mirror" test to their friends and family

[Warren Buffett]

Nov 5, 2009

Ellijay, Ga.-based Appalachian Bancshares Inc., parent of Appalachian Community Bank, is under the regulatory oversight of the Federal Reserve Bank of Atlanta and banking commissioner of Georgia.

Under the terms of a “written agreement,” made public Nov. 5, the company is restricted from paying dividends, buying/redeeming shares of its stock or accruing additional debt without prior consent of the Federal Reserve Bank of Atlanta and banking commissioner of Georgia.

Appalachian Bancshares (Pink Sheets: APAB) also must submit a plan to maintain sufficient capital within 60 days of the agreement. And it has to provide written progress reports within 30 days after the end of each quarter.

Appalachian Bancshares Chairman J. Ronald Knight signed the agreement on Oct. 29.

[Truthis]

So what happens to properties that have been foreclosed on? Are the loans bought by other banks?
I know of a piece of property that was foreclosed on due to bankruptcy. A third party was willing to buy it for the amount owed the bank and the bank refused to sell. Anything over and above the amount owed to Appalachian would go to the bankruptcy court. If they go under what happens next?

[Smarter than you]

epworth wrote:

FROM THE FTC:
On October 28, 2009, Appalachian Bancshares, Inc.(the "Company") executed an agreement to issue 5,999,994 shares of its common stock,$.01 par value per share (the "Shares"), to Alan S. Dover, Charles A. Edmondson, Joseph C. Hensley, Frank E. Jones, J. Ronald Knight, Tracy R. Newton, and Kenneth D. Warren (collectively, the "Purchasers") in exchange for $3.0 million aggregate principal amount of Appalachian Community Bank Fixed Rate Subordinated Notes, due September 30, 2015 (the "Notes"). The Purchasers are each existing shareholders and members of the Company's board of directors.
Now in plain English:
Look up the form 8-K if you like, but when APAB was removed from NASDAQ it was at $0.20/share. Then, last week the directors exercised their right to be paid $0.50/share that they purchased at the sum of $0.01/share. Why would they exercise their stock options unless they knew the price would never again go above fifty cents per share? Is it just me or did the rats just jump ship?

You are a D*** idiot almost every stock that you see has a par value of .01 why don't you do some research. They didn't buy the stock for .01 per share almost all stock has that for a par value when it is issued.

[thinking]

I stick with UCB. If I need them, they are in towns around us and states around Georgia, NC, Tennessee, ect.
If I need them for anything while in those areas, they are there. That is a safety net of protection!

What concerns me is the amount of foreclosures with the smaller banks. There are some with a couple of listings equally a large amount of money on different loans. It's been for the past few months. How much longer can they stay a float like this?

[epworth]

Tracy is that you? I'm thinking you are not anywhere near as smart as I am, but I'm going to give you the benefit of the doubt...

In layman terms for your benefit: Stocks are issued at a certain price to the public when a company begins(APAB was $10 at their initial public offering - that is back when the local school teachers etc were buying the stock for their retirement). The combined total of the outstanding stock is the market value of the company (there is more to it than this, but for our purposes, we will simplify). APAB was scheduled to be removed from NASDAQ for two reasons... 1) stock price per share was 'trading' under the minimum for NASDAQ - this can happen for quite some time depending on the market capitalization of the company 2) the market capitalization - and I simplify for you again - is the number of certificates of stock issued multiplied by the price of the stock. This number was also too low.

Now, this does not mean the company has low assets necessarily. In the case of APAB, they are doctoring the books however. They have very little cash on hand. APAB is a holding company for Gilmer County Bank, Appalachian Community Bank and a "thrift." A thrift is what we call savings and loans in a post Regan/Bush era (as S&L doesn't have a nice ring to it anymore - most people think S&L=Bailout=Bad).

For quite some time the holding company has been operating under a "Cease and Desist" order. This is available to you, so I won't post it here (google it your self). The order wanted new management, and more involvement from the board of directors. Obviously, management has not changed. The stock value tanked. The ratio of productive loans tanked due to poor management. They have also been accused of authorizing payments on non-productive loans without the consent of the party they lent money. This would make their books look better for the regulators. However, it will bite them in the end.

Now, all I posted was a statement regarding a document that must be made public when persons with a certain percentage of interest in the company sells, buys, OR exercises their right to stock options. When a person exercises their right to "buy" their stock options, it is at a pre-determined price (in this case .01). Now, the bank must pay a a pre-determined price to the individual buying the stock. This is why it is good to be a bank director. You can buy a stock for a low price (often with borrowed money) and the bank must pay a higher price or market value. In this case the price the directors will be paid is much more than market value.

I must go work now. Look up public filings at your pleasure. I say that mostly for anyone reading this besides yourself. I am guessing you already know your bank in going under soon and are trying to discredit me. You're not looking real good at the moment...

Smarter than you wrote:

<quoted text>
You are a D*** idiot almost every stock that you see has a par value of .01 why don't you do some research. They didn't buy the stock for .01 per share almost all stock has that for a par value when it is issued.

[Smarter than you]

You sound like Obama, it takes you several paragraphs to explain something we all already knew. All the information you just spewed out had nothing to do with the fact you were dumb enough to think board members bought stock for $.01

[Smarter than you]

The members didn't exercise anything. If you read the release it states they exchanged subordinated notes for stock. If you continue to read the release you will see that they exchanged the notes for stock valued a .50 a share, it is common place to state the par value of the stock in these releases. I have already given you a lesson on par value, so I will spare you this time.

[chicken]

Smarter than you wrote:

The members didn't exercise anything. If you read the release it states they exchanged subordinated notes for stock. If you continue to read the release you will see that they exchanged the notes for stock valued a .50 a share, it is common place to state the par value of the stock in these releases. I have already given you a lesson on par value, so I will spare you this time.

The truth is the board traded the "inventures" that were offerd last year to common stock so the could sell it and regain some of there money back. Also the 10% intrest that they promised to pay is now gone due to the FDIC oversite clause.If they did not trade for the stock when the bank fails there just"S.O.L" but coverted in to stock they can dump it at a smaller lost.

Since they used to purchase stock at $3.25 then turn and sell it at above $17 (back in the good ole days) there really not loosing anything.

[Mandy M]

I am almost scared to have any accounts there now.

[smarter than your]

chicken wrote:

<quoted text>
The truth is the board traded the "inventures" that were offerd last year to common stock so the could sell it and regain some of there money back. Also the 10% intrest that they promised to pay is now gone due to the FDIC oversite clause.If they did not trade for the stock when the bank fails there just"S.O.L" but coverted in to stock they can dump it at a smaller lost.
Since they used to purchase stock at $3.25 then turn and sell it at above $17 (back in the good ole days) there really not loosing anything.

not sure what an inventure is....they are called debentures

[Stockholder]

I'm not into stock and really do not know much about buying and selling stock. I purchased some stock with GCB shortly after it opened, because they were the hometown bank and it was good for the community. I never kept up with my stock and always thought that it was a good investment with a hometown bank!!
The stock split several times, but I never got a divident. All the board members got bonuses, and the CEO made more money per year than most people make in 5 to 10 years!
They grew from one bank to branches in all surrounding counties, and a huge corporate HQ and two more branches in this little town??? I know that it must be expensive to operate all of those buildings and the huge staff to man them!!!
They got greedy, grew too fast, and lost the hometown appeal.
Now my stock is about worthless, and I guess that I'm not alone!!! They let down a bunch of good citizens of this county.

[Not A Fact]

All that remains now is for the shareholders to start sueing the bank directors. You can "Bank" on that.

[Bea Patient]

Not A Fact wrote:

All that remains now is for the shareholders to start sueing the bank directors. You can "Bank" on that.

Wait'll you see whats about to happen to UCB.

[Movin in]

I wouldnt go so far as to say they lost their hometown appeal. I still bank there and the people who work there are very nice. I just hope everyone remembers that this country is in a bad way. Housing and banking are taking the biggest hit, it is not anyone persons fault (maybe the goverment but thats another comment for another day). Since my money is insured I will continue to bank there.

Stockholder wrote:

I'm not into stock and really do not know much about buying and selling stock. I purchased some stock with GCB shortly after it opened, because they were the hometown bank and it was good for the community. I never kept up with my stock and always thought that it was a good investment with a hometown bank!!
The stock split several times, but I never got a divident. All the board members got bonuses, and the CEO made more money per year than most people make in 5 to 10 years!
They grew from one bank to branches in all surrounding counties, and a huge corporate HQ and two more branches in this little town??? I know that it must be expensive to operate all of those buildings and the huge staff to man them!!!
They got greedy, grew too fast, and lost the hometown appeal.
Now my stock is about worthless, and I guess that I'm not alone!!! They let down a bunch of good citizens of this county.

[Independent]

Mandy M wrote:

I am almost scared to have any accounts there now.

As long as you're within the FDIC insurance limits you shouldn't have anything to worry about.

[Independent]

chicken wrote:

<quoted text>
The truth is the board traded the "inventures" that were offerd last year to common stock so the could sell it and regain some of there money back. Also the 10% intrest that they promised to pay is now gone due to the FDIC oversite clause.If they did not trade for the stock when the bank fails there just"S.O.L" but coverted in to stock they can dump it at a smaller lost.
Since they used to purchase stock at $3.25 then turn and sell it at above $17 (back in the good ole days) there really not loosing anything.

Exchanging debt for stock helped the bank improve its capital position. Lots of banks are doing this - and not just with insiders.

[Tired of Gossip Too]

I read these posts with some amusement because it seems that so many think that the information contained in this forum is the gospel...what a joke.

I also can't help but to think of the child's fable, Chicken Little. So many of you are believing that the sky is falling, but have not seen the pieces falling yourself. Hmmm...in the fable, everyone who believes Chicken Little ends up in the fox den and is eaten. Wonder what that says about you all?

It is very sad that we feed off the gossip on here. Have any of you personally witnessed the events being talked about, spoken with bank personnel or been involved?

I really hope that anyone reading these blogs will take this information with a grain of salt. Until we know a fact, don't go around saying the sky is falling. Even after we do, is it our business to talk? Think about all of the great employees that have to constantly have people questioning them about these RIDICULOUS rumors.

Is the sky falling? Don't decide or tell others until you see the pieces with your own eyes!