The Bank Expects

To Rebound After

A Difficult Year

By DOUGLAS WATSON

Managing Editor

Stockholders of American Patriot Bank, which has its headquarters in Greeneville, were assured Thursday at an annual shareholders meeting that the bank has turned the corner financially after a difficult 2007.

The seventh annual meeting of American Patriot Financial Group, Inc., the holding company that owns the bank, was held at the General Morgan Inn.

Jerry A. Simmerly, the bank's president and CEO, said no officers or shareholders of the "bank could have been very happy" with the strains the bank, like many other financial institutions, have been under.

He noted that its share price dropped to about $4, but now is back up to over $6.

However, on the positive side, Simmerly praised the decision made earlier to name the business American Patriot Bank, which he called a very good brand. "We are going to leverage this name as we go forward."

Simmerly also said opening an office of the bank in Maryville has been a success, although "It took a leap of faith to go to Maryville." He said the Maryville office has assets of $20 million.

Simmerly cautioned, "We are facing one of the toughest business environments in the past 15 years, if not the past quarter-century."

He said the national economic downturn is challenging virtually all U.S. financial institutions, and what probably will be declared a recession "is not going to end anytime this year, but will probably go well into 2009."

Fortunately, he said, American Patriot Bank had not been heavily involved in the residential housing market, where nationally there have been many foreclosures, with many more expected.

Simmerly said the bank had net losses of $190,585 in 2007.

However, he said, the bank had net income of $133,565 for the first quarter of 2008, and results for the second quarter, which end on June 30, "are right in line with that."

Cost-Cutting Efforts

Simmerly said American Patriot Bank has been making great efforts to cut costs. As a result, he said, "Our expenses are $1 million below our budget in the first five months" of this year.

He said it is hoped the bank's assets can be grown to $130 million by the end of this year.

At the end of 2007, American Patriot Financial Group reported total assets of $116.5 million, up from $97.7 million in total assets at the end of 2006.

He stressed that the bank's "building blocks for the future" need to be the strong ties its employees build with customers, the community and families.

He noted that the bank has launched a "freedom checking" program with no charges for check-writing, and other advantages.

It also has a new Patriot Kids savings account offer under which opening of a checking account will result in a $25 deposit into a savings account for children under 12 years.

Earlier, Simmerly individually introduced about a dozen of bank's key personnel.

Simmerly, who resides in Maryville, regularly commutes to Greeneville.

The luncheon meeting was attended by about 60 shareholders

Earlier, during a brief business section conducted by Dr. William Smead, chairman of the bank's board of trustees, shareholder voting results were announced that elected Simmerly and Lennie Lawson, the Greeneville auto dealer, to new three-year terms to the bank's board of directors.

The shareholders also approved the appointment of Hazlett, Lewis & Bieter, PLLC as the bank's independent auditor.

Bank's Background

What was formerly the Bank of Greeneville became American Patriot Bank on May 1, 2007. The name change was explained by the fact that, in opening a Maryville office, the bank was no longer limited to Greeneville.

Simmerly last year was appointed head of American Patriot Bank. He succeeded Bob Grubbs, founder and president of the bank, who had resigned.

American Patriot Bank's main local office is here at 3095 E. Andrew Johnson Hwy. The bank has local branches at 506 Asheville Hwy. and 208 W. Summer St., as well as an office in Maryville at 710 South Foothills Plaza Drive.