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 ($1.6 million) or ($0.47) per share for the three months ended March 31, 2009, compared to net income of $0.2 million or $0.07 per share for the three months ended March 31, 2008. Total assets were $408.9 million at March 31, 2009, a 6.17% increase compared to $385.2 million at December 31, 2008. Loans grew 0.16% to $309.1 million at March 31, 2009 compared to $308.6 million at December 31, 2008. Deposits grew 11.46% to $347.5 million at March 31, 2009 compared to $311.8 million at December 31, 2008.

The residential real estate downturn in our market continues to negatively impact our results in 2009. As noted in the Financial Highlights below, The Bank of Georgia expensed against first quarter earnings $2.3 million in additional provision for loan losses. Our allowance for loan losses at March 31, 2009 totaled $8.9 million or 2.88% of total loans in preparation for any future credit issues that may develop. Net charge-offs against the allowance for loan losses for the first quarter of 2009 totaled $1.4 million compared to $0.3 million in the same quarter in 2008. At March 31, 2009 non-performing assets (loans on non-accrual status ($10.6 million) plus other real estate owned ($13.2 million)) were $23.8 million as compared to $6.0 million at March 31, 2008. During the first three months of 2009, $0.8 million of repossessed properties were sold at a loss of ($0.01 million).

The Bank of Georgia�s liquidity position has improved markedly as the result of increases in checking and savings accounts of over $35.2 million during the first three months of 2009. In addition, The Bank of Georgia remains �well capitalized� in regard to regulatory capital levels.

Commenting on the challenging environment in the south-metro Atlanta area, Pat Shepherd, President and Chief Executive Officer, stated, �While we anticipate some further deterioration in the second quarter, we are encouraged by positive trends that are developing and expect to see improvement during the second half of 2009.�

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 Three Months Ended March 31, 2009 March 31, 2008 Total interest income $ 4,683 $ 6,078 Total interest expense � 2,791 � � 3,154 � Net interest income 1,892 2,924 Provision for loan losses � 2,309 � � 345 � Net interest income after provision (417 ) 2,579 Total other income 490 421 Total other expense � 2,662 � � 2,728 � Income before income taxes (2,589 ) 272 Income tax expense (benefit) � (1,001 ) � 72 � Net earnings (loss) $ (1,588 ) $ 200 � � Per Share Data: Common shares outstanding - end of period 3,398,715 3,010,023 Weighted average shares outstanding 3,398,715 3,010,023 Weighted average diluted shares outstanding 3,398,715 3,278,464 Basic net earnings per share $ (0.47 ) $ 0.07 Diluted net earnings per share $ (0.47 ) $ 0.06 Cash dividends declared (common) $ 0.00 $ 0.10 Cash dividends declared (preferred) $ 0.00 $ 0.11 Book value (common) $ 6.96 $ 9.13 � At Period End: Loans, gross $ 309,137 $ 304,324 Allowance for loan losses $ 8,907 $ 4,545 Total assets $ 408,931 $ 377,129 Total deposits $ 347,480 $ 307,403 Shareholders' equity $ 25,943 $ 29,772 � Key Performance Ratios: Return on average assets (1.61 )% 0.22 % Return on average equity (23.45 )% 2.69 % Net interest margin 2.23 % 3.58 % Dividend payout ratio 0.00 % 159.25 % Total efficiency ratio 107.88 % 81.54 % � Asset Quality Ratios: Non-performing assets / loans & OREO 7.40 % 1.92 % Allowance for loan losses / total loans 2.88 % 1.49 % Allowance for loan losses / non-performing assets 37.36 % 76.36 % Allowance for loan losses / total capital 27.52 % 12.55 % Net charge-offs / average loans 0.44 % 0.09 % � Capital Ratios: Equity / assets 6.34 % 7.89 % Tier 1 leverage ratio 8.80 % 9.83 % Total risk based capital ratio 11.10 % 12.25 %