Alliance Bankshares Reports 2nd Quarter 2009 Results

Aug 07, 2009 (Close-Up Media via COMTEX) -- ABVA | Quote | Chart | News | PowerRating -- Alliance Bankshares Corp. has reported a second quarter loss of $493 thousand compared to the second quarter 2008 loss of $1.088 million.

On a year-to-date basis the company on August 3 reported a net loss of $972 thousand compared to a loss of $3.2 million for the same period in 2008. Despite the net loss, all regulatory capital ratios remain above the levels necessary to be considered a "well capitalized" institution.

"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 percent of total assets, down 50 basis points from the December 31, 2008 level of 2.91 percent. Our long-term deposit growth strategies are paying off, as well. Total demand deposits rose to $148.2 million as of June 30, 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, compared to $428.7 million as of December 31, 2008. As of June 30, demand deposits represented 28.7 percent of total deposits up from the 17.6 percent as of December 31, 2008. The net interest margin was 2.82 percent for the quarter ended June 30, and 2.80 percent for the first six months of 2009. This is a significant improvement over the 2008 levels of 2.59 percent and 2.58 percent 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, 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, 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, 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.

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