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"We are continuing to manage through this difficult economic cycle. Our team remains focused on the financial strategies we believe will return us to profitability: reducing nonperforming assets, increasing core deposits, expanding our net interest margin, and managing non-interest expense," said Thomas A. Young, Jr., President & CEO. "At the end of the second quarter nonperforming assets declined to 2.41% of total assets, down 50 basis points from the December 31, 2008 level of 2.91%. Our long-term deposit growth strategies are paying off, as well. Total demand deposits rose to $148.2 million as of June 30, 2009 or nearly double the December 31, 2008 level of $75.4 million, " he continued. Total deposits amounted to $516.3 million as of June 30, 2009 compared to $428.7 million as of December 31, 2008. As of June 30, 2009, demand deposits represented 28.7% of total deposits up from the 17.6% as of December 31, 2008. The net interest margin was 2.82% for the quarter ended June 30, 2009 and 2.80% for the first six months of 2009. This is a significant improvement over the 2008 levels of 2.59% and 2.58% for second quarter and the first half of 2008 respectively. The strategy to increase core deposits has allowed the organization to reposition certain longer-term fundings and reduce the overall interest cost to fund the organization. In addition to the normal operating expenses, the organization recorded a charge of $299 thousand for the special FDIC assessment that impacted all banks in the second quarter of 2009. The total non-interest expenses for the second quarter of 2009 adjusted for the special FDIC assessment were $248 lower than the non-interest expense level of $5.3 million in the same period 2008. Total assets were $643.8 million as of June 30, 2009 or $71.0 million greater than the December 31, 2008 level of $572.8 million and $74.2 million greater than the June 30, 2008 level of $569.6 million. As part of the strategic initiative to reduce certain loan concentrations, the loan portfolio declined from the December 31, 2008 level of $367.4 million to the June 30, 2009 level of $354.6 million. Alliance remains committed to community lending; however the appetite for certain loan types (e.g. real estate construction and land) has diminished. The strategy to reduce the trading security positions has also been very effective. At June 30, 2009, trading assets amounted to $36.5 million or $46.1 million lower than the December 31, 2008 level of $82.6 million. "Alliance continues to remain focused on core business operations as we manage through these tough economic times. The members of the board are pleased to see the positive indicators such as an increased net interest margin, decreased levels of nonperforming assets to total assets, strong demand deposit growth and reduced levels of operating losses. We believe that the proactive steps taken by management will enhance the long-term value of the franchise while managing through these unprecedented economic times," said William M. Drohan, Chairman of the Board of Directors. 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 forwarding-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
June30, December31, June30,
2009* 2008 2008*
ASSETS (Dollars in thousands)
Cash and due from banks $ 71,135 $ 12,205 $ 26,321
Federal funds sold 14,999 5,050 15,265
Trading securities, at fair value 36,468 82,584 98,514
Investment securities available-for-sale, at fair value 137,538 73,303 24,354
Loans held for sale 1,206 347 1,087
Loans, net of unearned discount and fees 354,639 367,371 372,169
Less: allowance for loan losses (5,213 ) (5,751 ) (5,502 )
Loans, net 349,426 361,620 366,667
Premises and equipment, net 1,974 1,888 2,073
Other real estate owned (OREO) 9,835 11,749 14,495
Goodwill and intangibles 5,690 5,900 6,368
Other assets 15,550 18,203 14,418
TOTAL ASSETS $ 643,821 $ 572,849 $ 569,562
LIABILITIES AND STOCKHOLDERS' EQUITY
Non-interest bearing deposits $ 148,159 $ 75,448 $ 89,173
Interest-bearing deposits ($9,329, $24,180 and $78,964 at fair value) 368,162 353,276 337,102
Total deposits 516,321 428,724 426,275
Repurchase agreements, federal funds purchased and other borrowings 26,159 40,711 35,075
Federal Home Loan Bank advances ($25,729, $26,361 and $25,871 at 50,729 51,361 50,871
fair value)
Trust Preferred Capital Notes 10,310 10,310 10,310
Other liabilities 4,225 4,576 4,752
Commitments and contingent liabilities - - -
TOTAL LIABILITIES 607,744 535,682 527,283
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
June
30, 2009, December 31, 2008 and June 30, 2008, respectively.
Capital surplus 25,613 25,364 25,223
Retained earnings (deficit) (9,592 ) (8,620 ) (2,766 )
Accumulated other comprehensive income (loss), net (371 ) (4 ) (605 )
TOTAL STOCKHOLDERS' EQUITY 36,077 37,167 42,279
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 643,821 $ 572,849 $ 569,562
* Unaudited financial results
ALLIANCE BANKSHARES CORPORATION
Consolidated Income Statements
Three Months Ended Three Months Ended Six Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2009* 2008* 2009* 2008*
(Dollars in thousands, except per share)
INTEREST INCOME:
Loans $ 5,177 $ 5,972 $ 10,462 $ 12,213
Trading securities 445 987 1,103 2,096
Investment securities 1,447 298 2,614 597
Federal funds sold 15 40 28 86
Total interest income 7,084 7,297 14,207 14,992
INTEREST EXPENSE:
Deposits 2,649 3,335 5,550 6,594
Purchased funds and other borrowings 575 807 1,135 2,074
Total interest expense 3,224 4,142 6,685 8,668
Net interest income 3,860 3,155 7,522 6,324
Provision for loan losses 700 610 1,274 1,160
Net interest income after provision for loan losses 3,160 2,545 6,248 5,164
OTHER INCOME:
Insurance commissions 738 753 1,690 1,816
Deposit account service charges 75 66 143 144
Gain on sale of loans 33 32 75 92
Net gain on sale of securities 274 8 863 10
Trading activity and fair value adjustments 325 166 (139 ) (2,389 )
Other operating income 29 24 46 67
Total other income (loss) 1,474 1,049 2,678 (260 )
OTHER EXPENSES:
Salaries and employee benefits 2,186 2,131 4,378 4,425
Occupancy expense 665 546 1,272 1,091
Equipment expense 226 242 444 477
Other real estate owned expense 217 566 615 574
Operating expenses 2,100 1,858 3,708 3,240
Total other expenses 5,394 5,343 10,417 9,807
INCOME (LOSS) BEFORE INCOME TAXES (760 ) (1,749 ) (1,491 ) (4,903 )
Income tax expense (benefit) (267 ) (661 ) (519 ) (1,737 )
NET INCOME (LOSS) $ (493 ) $ (1,088 ) $ (972 ) $ (3,166 )
Net income (loss) per common share, basic $ (0.10 ) $ (0.21 ) $ (0.19 ) $ (0.62 )
Net income (loss) per common share, diluted $ (0.10 ) $ (0.21 ) $ (0.19 ) $ (0.62 )
Weighted average number of shares, basic 5,106,819 5,106,819 5,106,819 5,106,819
Weighted average number of shares, diluted 5,106,819 5,106,819 5,106,819 5,106,819
* Unaudited financial results
ALLIANCE BANKSHARES CORPORATION
Consolidated Statistical Information
Performance Information
June 30, June 30,
2009* 2008*
(Dollars in thousands, except per share)
Performance Information:
For The Three Months Ended:
Average loans $ 362,088 $ 375,545
Average earning assets 558,737 502,857
Average assets 604,750 558,105
Average non-interest bearing deposits 110,320 69,049
Average total deposits 463,670 396,373
Average interest-bearing liabilities 455,503 443,079
Average equity 36,290 43,612
Net interest margin (1) 2.82 % 2.59 %
Earnings per share, basic $ (0.10 ) $ (0.21 )
Earnings per share, diluted (0.10 ) (0.21 )
For The Six Months Ended:
Average loans $ 365,166 $ 382,565
Average earning assets 552,635 505,234
Average assets 597,501 552,526
Average non-interest bearing deposits 94,399 67,186
Average total deposits 442,594 383,230
Average interest-bearing liabilities 463,474 437,807
Average equity 36,749 44,319
Net interest margin (1) 2.80 % 2.58 %
Earnings per share, basic $ (0.19 ) $ (0.62 )
Earnings per share, diluted (0.19 ) (0.62 )
* 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)
June 30, December 31, June 30,
2009* 2008 2008*
(Dollars in thousands)
Credit Quality Information:
Nonperforming assets:
Impaired loans (performing loans with a specific allowance) $ 147 $ 1,428 $ 4,616
Non-accrual loans 5,544 3,467 2,834
OREO 9,835 11,749 14,495
Total nonperforming assets & past due loans $ 15,526 $ 16,644 $ 21,945
Specific reserves associated with impaired & non-accrual loans $ 806 $ 1,148 $ 1,283
Largest components of the nonperforming assets listed above:
June 30, 2009 impaired loans (100% of the total)
$147 thousand which is an office condominium in Northern Virginia.
June 30, 2009 non-accrual loans (95.4% of the total)
$3.2 million which is secured by multi-family land in Northern
Virginia.
$973 thousand which is secured by 1-4 family residential properties
to four individual borrowers.
$410 thousand which is secured by a residential condominium project
in Virginia Beach, Virginia.
(Non-accrual as of 9/30/08)
$400 thousand which is secured by a commercial real estate property
in Winchester, Virginia.
(Non-accrual as of 3/31/09)
$324 thousand which are consumer HELOCs to two individual borrowers.
June 30, 2009 OREO (94.1% of the total)
$2.1 million which is farmland/development acreage in the Winchester
Virginia area.
(OREO as of 3/31/08)
$2.0 million which is a single family residence under construction
in Northern Virginia.
(OREO as of 12/31/08)
$1.4 million which is residential building lots in Northern Virginia.
(OREO as of 6/30/08)
$1.2 million on building lots in Northern Virginia.
(OREO as of 3/31/08)
$911 thousand which consists of two parcels of land in Northern
Virginia.
(OREO as of 3/31/08)
$774 thousand which is two office condominium units in Northern
Virginia.
(OREO as of 3/31/09)
$527 thousand which is a two unit office condominium in Richmond,
Virginia.
(OREO as of 12/31/07)
$452 thousand which is a commercial building and assets of a retail
hardware and lumber company in Maryland.
(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 Six Months Ended: June 30, June 30,
2009* 2008*
(Dollars in thousands)
Balance, beginning of period $ 5,751 $ 6,411
Provision for loan losses 1,274 1,160
Loans charged off (1,912 ) (2,269 )
Recoveries of loans charged off 100 200
Net charge-offs (1,812 ) (2,069 )
Balance, end of period $ 5,213 $ 5,502
June 30, March 31, December 31, June 30,
2009* 2009* 2008 2008*
Ratios:
Allowance for loan losses to total loans 1.47% 1.42% 1.57% 1.48%
Allowance for loan losses to non-accrual loans 0.9X 2.3X 1.7X 1.9X
Allowance for loan losses to nonperforming assets 0.3X 0.4X 0.3X 0.3X
Nonperforming assets to total assets 2.41% 2.42% 2.91% 3.85%
Net charge-offs to average loans 0.50% 0.30% 1.43% 0.54%
* 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
June30, 2009 December31, 2008 June30, 2008
Trading Securities Fair Yield Fair Yield Fair Yield
Value Value Value
(Dollars in thousands)
U.S. government corporations & agencies $ 14,052 5.25 % $ 35,947 5.25 % $ 46,037 5.42 %
PCMOs (1) 7,558 5.37 % 12,251 5.42 % 13,159 5.39 %
SBA securities (2) 14,858 1.44 % 34,386 2.99 % 39,318 3.14 %
Totals $ 36,468 3.81 % $ 82,584 4.37 % $ 98,514 4.55 %
(1) All PCMOs are rated AAA by at least one of
the following agencies: Moody's, S&P or Fitch.
$3.6 million of the PCMOs have a split rating as of June 30, 2009.
(2 )SBA securities are U.S. government agency
securities. For presentation purposes they are separated out on the
table above.
June30, 2009 December31, 2008 June30, 2008
Fair Value Assets and Liabilities Fair Fair Fair
Value Value Value
(Dollars in thousands)
Trading securities $ 36,468 $ 82,584 $ 98,514
Interest-bearing deposits (brokered certificates of deposit) $ 9,329 $ 24,180 $ 78,964
FHLB advances 25,729 26,361 25,871
Total fair value liabilities $ 35,058 $ 50,541 $ 104,835
ALLIANCE BANKSHARES CORPORATION
Consolidated Statistical Information
Capital Information
June 30, December 31, June 30,
2009* 2008 2008*
(Dollars in thousands, except per share)
Capital Information:
Book value per share $ 7.06 $ 7.28 $ 8.28
Tier I risk-based capital ratio 10.0 % 9.6 % 10.5 %
Total risk-based capital ratio 11.3 % 10.9 % 11.7 %
Leverage capital ratio 6.8 % 7.6 % 8.4 %
Total equity to total assets ratio 5.6 % 6.5 % 7.4 %
* Unaudited financial results
SOURCE: Alliance Bankshares Corporation Alliance Bankshares Corporation Thomas A. Young, Jr. OR Paul M. Harbolick, Jr. 703-814-7200 For full details for ABVA click here.
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