Alliance Financial Corp. (ALNC, Financial) filed Quarterly Report for the period ended 2009-06-30.
Alliance Financial Corp. formerly known as Cortland First Financial Corporation is a bank holding company and commenced business. First National Bank of Cortland is a wholly owned subsidiary of Alliance Financial Corp. and its only operating entity. The bank is an independent commercial bank committed to serving the financial needs of customers in the local communities. Alliance Financial Corp. has a market cap of $133 million; its shares were traded at around $28.99 with a P/E ratio of 15.5 and P/S ratio of 1.5. The dividend yield of Alliance Financial Corp. stocks is 3.7%.
Net income available to common shareholders for the six months ended June 30, 2009 was $3.9 million or $0.85 per diluted share, compared with $5.0 million or $1.06 per diluted share in the year-ago period. Preferred dividends and the accretion on the preferred stock discount was $1.1 million or $0.24 per diluted share for the six months ended June 30, 2009, respectively. There was no preferred stock outstanding for the six months ended June 30, 2008. The return on average assets and return on average common shareholders equity were 0.56% and 6.47%, respectively, for the six months ended June 30, 2009 compared with 0.75% and 8.54%, respectively, for the same period in 2008.
The results for the second quarter and year-to-date reflect continued growth in net interest income, which offset higher credit costs and a decrease in investment management income compared to the year-ago periods. Excluding the impact of the Companys CPP participation and exit, second quarter and year-to-date earnings were impacted by a significant increase in the premiums assessed by the Federal Deposit Insurance Corporation (FDIC) to all FDIC-insured banks. FDIC insurance premium expense for the three and six months increased $1.0 million and $1.3 million, respectively, compared with same periods in 2008. A large portion of the FDICs insurance premium increase was in the form of a special assessment charged to all FDIC-insured banks in the second quarter which totaled $676,000 before tax or $0.09 per diluted common share after tax.
Net interest income totaled $10.6 million in the second quarter, representing an increase of $1.1 million or 11.7% compared with the second quarter of 2008. The increase in net interest income was driven by a higher net interest margin combined with earning asset growth. Average earning assets increased $91.0 million in the second quarter compared with the year-ago quarter, due in large part to increases in the average balance of residential mortgages and the securities portfolio. On a linked-quarter basis, net interest income increased $577,000 or 5.7% as a result of a higher net interest margin and a $40.2 million increase in average earning assets.
The Companys liability mix changed favorably during 2008 and into the first half of 2009 as the Company 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 $670.8 million in the second quarter of 2009, which was an increase of $118.1 million or 21.4% from the aggregate average balances of $552.7 million in the second quarter of 2008. Average transaction account balances comprised 64% of total average deposits in the second quarter of 2009, compared with 58% in the year-ago period. Average time account balances in the second quarter of 2009 were 36% of total average deposits, compared with 42% in the year-ago period.
Net interest income for the six months ended June 30, 2009 totaled $20.7 million, an increase of $2.4 million or 13.1% compared with $18.3 million in the year-ago period. Average earning assets increased $74.9 million in the first half of 2009 compared with the year-ago period. The tax-equivalent net interest margin was 3.46% in the first half of 2009, compared with 3.27% in the first half of 2008. A decrease of 79 basis points in the Companys tax-equivalent earning assets yield in the first half of 2009 compared with the same period in 2008 was offset by a 104 basis point decrease in its cost of funds over the same period.
Read the The complete Report
Alliance Financial Corp. formerly known as Cortland First Financial Corporation is a bank holding company and commenced business. First National Bank of Cortland is a wholly owned subsidiary of Alliance Financial Corp. and its only operating entity. The bank is an independent commercial bank committed to serving the financial needs of customers in the local communities. Alliance Financial Corp. has a market cap of $133 million; its shares were traded at around $28.99 with a P/E ratio of 15.5 and P/S ratio of 1.5. The dividend yield of Alliance Financial Corp. stocks is 3.7%.
Highlight of Business Operations:
Net income available to common shareholders for the quarter ended June 30, 2009 was $1.3 million, or $0.28 per diluted share, compared to $2.9 million, or $0.62 per diluted share in the year-ago quarter. The Companys net income in the second quarter of 2009 was reduced by accrued dividends and discount accretion on preferred stock totaling $726,000 associated with its participation in and exit from the U.S. Treasurys Capital Purchase Program (CPP). There was no preferred stock outstanding in the second quarter of 2008. The return on average assets and return on average common shareholders equity were 0.37% and 4.33%, respectively, for the quarter ended June 30, 2009 compared with 0.87% and 9.93%, respectively, for the second quarter of 2008.Net income available to common shareholders for the six months ended June 30, 2009 was $3.9 million or $0.85 per diluted share, compared with $5.0 million or $1.06 per diluted share in the year-ago period. Preferred dividends and the accretion on the preferred stock discount was $1.1 million or $0.24 per diluted share for the six months ended June 30, 2009, respectively. There was no preferred stock outstanding for the six months ended June 30, 2008. The return on average assets and return on average common shareholders equity were 0.56% and 6.47%, respectively, for the six months ended June 30, 2009 compared with 0.75% and 8.54%, respectively, for the same period in 2008.
The results for the second quarter and year-to-date reflect continued growth in net interest income, which offset higher credit costs and a decrease in investment management income compared to the year-ago periods. Excluding the impact of the Companys CPP participation and exit, second quarter and year-to-date earnings were impacted by a significant increase in the premiums assessed by the Federal Deposit Insurance Corporation (FDIC) to all FDIC-insured banks. FDIC insurance premium expense for the three and six months increased $1.0 million and $1.3 million, respectively, compared with same periods in 2008. A large portion of the FDICs insurance premium increase was in the form of a special assessment charged to all FDIC-insured banks in the second quarter which totaled $676,000 before tax or $0.09 per diluted common share after tax.
Net interest income totaled $10.6 million in the second quarter, representing an increase of $1.1 million or 11.7% compared with the second quarter of 2008. The increase in net interest income was driven by a higher net interest margin combined with earning asset growth. Average earning assets increased $91.0 million in the second quarter compared with the year-ago quarter, due in large part to increases in the average balance of residential mortgages and the securities portfolio. On a linked-quarter basis, net interest income increased $577,000 or 5.7% as a result of a higher net interest margin and a $40.2 million increase in average earning assets.
The Companys liability mix changed favorably during 2008 and into the first half of 2009 as the Company 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 $670.8 million in the second quarter of 2009, which was an increase of $118.1 million or 21.4% from the aggregate average balances of $552.7 million in the second quarter of 2008. Average transaction account balances comprised 64% of total average deposits in the second quarter of 2009, compared with 58% in the year-ago period. Average time account balances in the second quarter of 2009 were 36% of total average deposits, compared with 42% in the year-ago period.
Net interest income for the six months ended June 30, 2009 totaled $20.7 million, an increase of $2.4 million or 13.1% compared with $18.3 million in the year-ago period. Average earning assets increased $74.9 million in the first half of 2009 compared with the year-ago period. The tax-equivalent net interest margin was 3.46% in the first half of 2009, compared with 3.27% in the first half of 2008. A decrease of 79 basis points in the Companys tax-equivalent earning assets yield in the first half of 2009 compared with the same period in 2008 was offset by a 104 basis point decrease in its cost of funds over the same period.
Read the The complete Report
