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"While the national economy remains in a difficult and fluid state, we are seeing positive signs in the metropolitan Washington, DC area economy. The level of activity in the residential real estate market has been increasing over the past few months. Alliance has seen the level of non-performing assets drop from the March 2008 level of $24.6 million or 4.44% of total assets to the March 2009 level of $14.9 million or 2.42% of total assets. Our management team has placed a high priority on reducing the level of nonperforming assets to a lower level as rapidly as possible. We believe this strategy, coupled with our core business strategies will lead to better operating results," said Thomas A. Young, Jr., President & CEO.
"In 2009, we continue to see a trend that started in late 2008, as many of our title and escrow services clients saw dramatic increases in their business in the first quarter. Our business model will directly benefit from this increased activity. As of March 31, 2009, demand deposits were $113.7 million a 44.0% increase over the March 31, 2008 level of $79.0 million," said Frank H. Grace, III, Executive Vice President and Director of the Private Client Group and Commercial Banking Team. "Reflecting our positive outlook for commercial banking opportunities, we have added three seasoned relationship managers to our team during the quarter and are constantly looking for talented bankers."
Alliance has always been in the business of serving the community and making loans. We have the capacity to lend and support the economy. However, we are making tactical risk management shifts in specific loan categories, (e.g. reducing exposure to real estate construction and development and land loans). Total loans amounted to $367.6 million as of March 31, 2009 or slightly greater than the December 31, 2008 level of $367.4 million and $12.0 million lower than the March 31, 2008 level of $378.0 million. Total assets grew to $614.2 million or $41.4 million greater than the December 31, 2008 level of $572.8 million. We continually evaluate our trading positions and have implemented a strategy to reduce our trading asset positions. As of March 31, 2009 our trading assets declined to $60.2 million which is down $22.4 million from the December 31, 2008 level of $82.6 million. Our investment securities portfolio has increased to $100.8 million as of March 31, 2009, up from the December 31, 2008 level of $73.3 million.
Total non-interest bearing deposits were $113.7 million or 24.5% of total deposits as of March 31, 2008 which is up from the $75.4 million or the 17.5% of total deposits as of December 31, 2008. Our total deposits grew to $465.1 million as of March 31, 2009 compared to the December 31, 2008 level of $428.7 million.
"In the 2008 year end press release our former Chairman, Harvey E. Johnson, Jr. (who passed away on March 12, 2009) commented, 'the year over year decline in nonperforming assets, shifting of the loan portfolio mix and the governmental actions taken in late 2008 are all solid building blocks that will help our franchise grow and prosper in 2009 and beyond,' the first quarter 2009 reflect his expectations," said William M. Drohan, Chairman of the Board of Directors. "Our management team is aggressively addressing the nonperforming assets to reduce the drain on performance, actively managing current business initiatives and implementing a new strategic deposit gathering product all in the face of an unprecedented difficult economy. The board of directors and I feel that positive results are embedded in our performance. A notable example is the increase in the net interest margin to 2.75% compared to the fourth quarter 2008 level of 2.29%," added Drohan.
Some of the matters discussed herein may include forward-looking statements. These forward-looking statements may include statements regarding profitability, balance sheet management goals and actions and financial and other goals. These statements are based on certain assumptions and analyses by the company and other factors it believes are appropriate in the circumstances. However, the company's expectations are subject to a number of risks and uncertainties such as changes in personnel, interest rates, accounting standards, economic conditions and other factors that could cause actual results, events and developments to differ materially from those contemplated by any forward-looking statements herein. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and cautionary language in the company's most recent report on Form 10-K and other documents filed with the Securities and Exchange Commission.
More information on Alliance Bankshares Corporation can be found online at www.alliancebankva.com, or by phoning an Alliance office.
ALLIANCE BANKSHARES CORPORATION
Consolidated Balance Sheets
March 31, December 31, March 31,
2009* 2008 2008*
ASSETS (Dollars in thousands)
Cash and due from banks $ 39,152 $ 12,205 $ 26,294
Federal funds sold 17,786 5,050 2,935
Trading securities, at fair value 60,164 82,584 89,355
Investment securities available-for-sale, at fair value 100,814 73,303 25,320
Loans held for sale 884 347 2,209
Loans, net of unearned discount and fees 367,653 367,371 378,068
Less: allowance for loan losses (5,225 ) (5,751 ) (5,421 )
Loans, net 362,428 361,620 372,647
Premises and equipment, net 1,856 1,888 1,997
Other real estate owned (OREO) 9,845 11,749 14,200
Goodwill and intangibles 5,795 5,900 6,339
Other assets 15,522 18,203 13,071
TOTAL ASSETS $ 614,246 $ 572,849 $ 554,367
LIABILITIES AND STOCKHOLDERS' EQUITY
Non-interest bearing deposits $ 113,715 $ 75,448 $ 78,969
Interest-bearing deposits ($9,412, $24,180 and $89,259 at fair value) 351,360 353,276 309,109
Total deposits 465,075 428,724 388,078
Repurchase agreements, federal funds purchased and other borrowings 47,017 40,711 57,383
Federal Home Loan Bank advances ($26,156, $26,361 and $26,443 at 51,156 51,361 51,443
fair value)
Trust Preferred Capital Notes 10,310 10,310 10,310
Other liabilities 3,901 4,576 3,580
Commitments and contingent liabilities - - -
TOTAL LIABILITIES 577,459 535,682 510,794
Common stock, $4 par value; 15,000,000 shares authorized; 20,427 20,427 20,427
5,106,819, 5,106,819 and 5,106,819 shares issued and outstanding
at March 31, 2009, December 31, 2008 and March 31, 2008,
respectively.
Capital surplus 25,435 25,364 25,153
Retained earnings (deficit) (9,100 ) (8,620 ) (1,678 )
Accumulated other comprehensive income (loss), net 25 (4 ) (329 )
TOTAL STOCKHOLDERS' EQUITY 36,787 37,167 43,573
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 614,246 $ 572,849 $ 554,367
* Unaudited financial results
ALLIANCE BANKSHARES CORPORATION
Consolidated Income Statements
Three Months Ended Three Months Ended
March 31, March 31,
2009* 2008*
(Dollars in thousands, except per share)
INTEREST INCOME:
Loans $ 5,285 $ 6,241
Trading securities 658 1,109
Investment securities 1,167 299
Federal funds sold 13 46
Total interest income 7,123 7,695
INTEREST EXPENSE:
Deposits 2,901 3,259
Purchased funds and other borrowings 560 1,267
Total interest expense 3,461 4,526
Net interest income 3,662 3,169
Provision for loan losses 574 550
Net interest income after provision for loan losses 3,088 2,619
OTHER INCOME:
Insurance commissions 952 1,063
Deposit account service charges 68 78
Gain on sale of loans 42 60
Net gain on sale of securities 589 2
Trading activity and fair value adjustments (465 ) (2,555 )
Other operating income 18 43
Total other income (loss) 1,204 (1,309 )
OTHER EXPENSES:
Salaries and employee benefits 2,192 2,294
Occupancy expense 607 545
Equipment expense 218 235
OREO expense 398 8
Operating expenses 1,608 1,382
Total other expenses 5,023 4,464
INCOME (LOSS) BEFORE INCOME TAXES (731 ) (3,154 )
Income tax expense (benefit) (252 ) (1,076 )
NET INCOME (LOSS) $ (479 ) $ (2,078 )
Net income (loss) per common share, basic $ (0.09 ) $ (0.41 )
Net income (loss) per common share, diluted $ (0.09 ) $ (0.41 )
Weighted average number of shares, basic 5,106,819 5,106,819
Weighted average number of shares, diluted 5,106,819 5,106,819
* Unaudited financial results
ALLIANCE BANKSHARES CORPORATION
Consolidated Statistical Information
Performance Information
March 31, March 31,
2009* 2008*
(Dollars in thousands, except per share)
Performance Information:
For The Three Months Ended:
Average loans $ 368,278 $ 389,585
Average earning assets 546,465 507,611
Average assets 590,144 546,908
Average non-interest bearing deposits 78,300 65,323
Average total deposits 421,283 370,087
Average interest-bearing liabilities 471,535 432,535
Average equity 37,215 45,028
Net interest margin (1) 2.75% 2.57%
Earnings per share, basic $ (0.09) $ (0.41)
Earnings per share, diluted (0.09) (0.41)
* Unaudited financial results
(1) On a fully-tax equivalent basis assuming a
34% federal tax rate.
ALLIANCE BANKSHARES CORPORATION
Consolidated Statistical Information
Credit Quality Information (1)
March 31, December 31, March 31,
2009* 2008 2008*
(Dollars in thousands)
Credit Quality Information:
Nonperforming assets:
Impaired loans (performing loans with a specific allowance) $ 2,724 $ 1,428 $ 6,385
Non-accrual loans 2,317 3,467 4,009
OREO 9,845 11,749 14,200
Total nonperforming assets & past due loans $ 14,886 $ 16,644 $ 24,594
Specific reserves associated with impaired & non-accrual loans $ 628 $ 1,148 $ 1,262
Largest components of the nonperforming assets listed above: March 31, 2009 impaired loans (95.3% of the total) $1.4 million secured by two completed single family properties in Northern Virginia. $1.2 million on building lots in Northern Virginia. March 31, 2009 non-accrual loans (95.7% of the total) $1.1 million to five borrowers which are 1-4 family residential properties. $410 thousand which is a residential condominium project in Virginia Beach, Virginia. $400 thousand which is secured by a subordinate lien on a commercial real estate property in Winchester, Virginia. $312 thousand to four borrowers which are consumer HELOCs. March 31, 2009 OREO (95.1% of the total) $2.1 million which is farmland/development acreage in the Winchester Virginia area. (Non-accrual as of 12/31/07; OREO as of 3/31/08) $2.0 million which is a single family residence under construction in Northern Virginia. (Impaired as of 9/30/08; OREO as of 12/31/08) $1.4 million which is secured by residential building lots in Northern Virginia. (Non-accrual as of 3/31/08; OREO as of 6/30/08) $1.2 million on building lots in Northern Virginia. (Non-accrual as of 12/31/07; OREO as of 3/31/08) $1.0 million which consists of two land loans all to one borrower in Northern Virginia. (Non-accrual as of 12/31/07; OREO as of 3/31/08) $774 thousand which is a first trust on two office condominium units in Northern Virginia. (Impaired as of 9/30/08; Non-accrual as of 12/31/08; OREO as of 3/31/09) $527 thousand which is a two unit office condominium in Richmond, Virginia. (OREO as of 12/31/07) $467 thousand which is secured by a commercial building and assets of a retail hardware and lumber company in Maryland. (Non-accrual as of 9/30/08; OREO as of 12/31/08) * Unaudited financial results (1) The allowance for loan losses includes a specific allocation for all impaired loans. Nonperforming assets are defined as impaired loans, non-accrual loans, OREO and loans past due 90 days or more and still accruing interest.
ALLIANCE BANKSHARES CORPORATION
Consolidated Statistical Information
Credit Quality Information (1)
For The Three Months Ended: March 31, March 31,
2009* 2008*
(Dollars in thousands)
Balance, beginning of period $ 5,751 $ 6,411
Provision for loan losses 574 550
Loans charged off (1,140 ) (1,627 )
Recoveries of loans charged off 40 87
Net charge-offs (1,100 ) (1,540 )
Balance, end of period $ 5,225 $ 5,421
March 31, March 31,
2009* 2008*
Ratios:
Allowance for loan losses to total loans 1.42 % 1.43 %
Allowance for loan losses to non-accrual loans 2.3X 1.4X
Allowance for loan losses to nonperforming assets 0.4X 0.2X
Nonperforming assets to total assets 2.42 % 4.44 %
Net charge-offs to average loans 0.30 % 0.40 %
* Unaudited financial results (1) The allowance for loan losses includes a specific allocation for all impaired loans. Nonperforming assets are defined as impaired loans, non-accrual loans, OREO and loans past due 90 days or more and still accruing interest.
ALLIANCE BANKSHARES CORPORATION
Consolidated Statistical Information
Trading Asset & Liability Summary
March 31, 2009 March 31, 2008
Fair Fair
Trading Securities Value Yield Value Yield
(Dollars in thousands)
U.S. government corporations & agencies $ 23,675 5.19 % $ 33,716 5.61 %
PCMOs (1) 11,148 5.42 % 13,749 5.38 %
SBA securities (2) 25,341 1.48 % 41,890 4.89 %
Totals $ 60,164 3.75 % $ 89,355 5.25 %
(1) All PCMOs are rated AAA by at least one of
the following agencies: Moody's, S&P or Fitch.
$1.8 million of the PCMOs have a split rating as of March 31,
2009.
(2 )SBA securities are U.S. government agency
securities. For presentation purposes they are separated out on the
table above.
March 31, 2009 March 31, 2008
Fair Fair
Fair Value Assets and Liabilities Value Value
(Dollars in thousands)
Trading securities $ 60,164 $ 89,355
Interest-bearing deposits (brokered certificates of deposit) $ 9,412 $ 89,259
FHLB advances 26,156 26,443
Total fair value liabilities $ 35,568 $ 115,702
ALLIANCE BANKSHARES CORPORATION
Consolidated Statistical Information
Capital Information
March 31, December 31, March 31,
2009* 2008 2008*
(Dollars in thousands, except per share)
Capital Information:
Book value per share $ 7.20 $ 7.28 $ 8.53
Tier I risk-based capital ratio 9.9% 9.6% 10.8%
Total risk-based capital ratio 11.6% 10.9% 12.1%
Leverage capital ratio 7.0% 7.6% 8.8%
Total equity to total assets ratio 6.0% 6.5% 7.9%
* Unaudited financial results
SOURCE: Alliance Bankshares Corporation
Alliance Bankshares Corporation Thomas A. Young, Jr. Paul M. Harbolick, Jr. 703-814-7200
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