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Alliance Financial Corp. Reports Operating Results (10-Q)

August 06, 2010 | About:
10qk

10qk

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Alliance Financial Corp. (ALNC) filed Quarterly Report for the period ended 2010-06-30.

Alliance Financial Corp. has a market cap of $139.8 million; its shares were traded at around $29.98 with a P/E ratio of 11.8 and P/S ratio of 1.6. The dividend yield of Alliance Financial Corp. stocks is 3.6%. Alliance Financial Corp. had an annual average earning growth of 4.2% over the past 5 years.

Highlight of Business Operations:

Net income for the quarter ended June 30, 2010 increased 46.9% to $3.0 million, compared to $2.0 million in the year-ago quarter. The results for the second quarter of 2010 reflect the positive impact of a 5.3% increase in net interest income and a 39.2% decrease in

Net income available to common shareholders for the quarter ended June 30, 2010 was $3.0 million or $0.64 per diluted common share, compared with $1.3 million or $0.28 per diluted common share for the same period in 2009. Preferred dividends and the accretion of the discount on preferred stock issued by Alliance under the Treasury Departments Capital Purchase Program (CPP) was $726,000 or $0.16 per diluted common share in the second quarter of 2009. We redeemed the preferred stock in May 2009.

Net income available to common shareholders for the six months ended June 30, 2010 was $5.7 million or $1.23 per diluted common share, compared with $3.9 million or $0.85 per diluted common share in the year-ago period. Preferred dividends and the accretion of the preferred stock discount was $1.1 million or $0.24 per diluted common share for the first half of 2009.

Net interest income totaled $11.2 million in the second quarter, which was an increase of $568,000 or 5.3% compared with the second quarter of 2009. The increase in net interest income was the result of a higher net interest margin combined with earning asset growth. Average earning assets increased $29.2 million or 2.3% in the second quarter compared with the year-ago quarter, with a $68.7 million increase in securities offsetting a $26.7 million decline in loan and lease balances. Most of the decline in average loans and leases was in the lease portfolio as the result of our previously announced decision in 2008 to cease new lease originations. Net interest income was virtually unchanged from the first quarter of 2010 on a slight decline in the net interest margin, which was offset by a 2.2% increase in earning assets.

Our liability mix changed favorably during 2009 and into 2010 as we continued to focus on growing lower cost savings, demand and money market accounts (transaction accounts) and relied less on higher promotional rates to attract or retain retail time accounts. The aggregate average balance of transaction accounts was $765.4 million in the second quarter, which was an increase of $94.6 million or 14.1% from the aggregate average balances of $670.8 million in the second quarter of 2009. Average transaction account balances comprised 67.2% of total average deposits in the second quarter, compared with 63.6% in the second quarter of 2009. Average time account balances in the first quarter were $373.4 million or 32.8% of total average deposits in the second quarter, compared with $383.2 million or 36.4% in the same period last year. Our ability to gather core transaction deposits over the past year has been greatly enhanced by our strong financial position and earnings performance, enhanced product offerings including upgraded treasury management and internet banking platforms, and a high positive awareness of the Alliance brand. These factors, combined with weakness in equity markets and other higher risk asset classes, and negative operating performance or other challenges being experienced by certain larger financial institutions operating in our market, have been important contributors to our transaction account gains in 2009 and 2010.

Net interest income for the six months ended June 30, 2010 totaled $22.3 million, an increase of $1.6 million or 8.0% compared with $20.7 million in the year-ago period. Average earning assets increased $35.2 million in the first half of 2010 compared with the year-ago period, with most of the growth in residential mortgages and investment securities. The tax-equivalent net interest margin was 3.58% in the first half of 2010, compared with 3.46% in the first half of 2009. A decrease of 32 basis points in our tax-equivalent earning-assets yield in the first half of 2010 compared with the same period in 2009 was offset by a decrease of 54 basis points in the cost of funds.

Read the The complete Report

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