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

August 12, 2011 | About:

Alliance Bankshares Corp. (ABVA) filed Quarterly Report for the period ended 2011-06-30.

Alliance Bankshares Corp. has a market cap of $22.9 million; its shares were traded at around $4.511 with a P/E ratio of 19.4 and P/S ratio of 0.8.

Highlight of Business Operations:

Financial Performance Measures. Bankshares net income for the three month period ended June 30, 2011 was $394 thousand, an improvement of $203 thousand over the second quarter of 2010 net income of $191 thousand. The net income of $394 thousand includes net interest income of $4.3 million compared to $4.9 million for the same period last year, a decrease of $556 thousand. That decrease is due primarily to a decrease in interest income in the amount of $1.2 million, which was partially offset by a decrease of $623 thousand in the cost of funds. For the three months ended June 30, 2011, total interest expense was $1.4 million compared to $2.1 million for the three months ended June 30, 2010. These results led to $0.08 basic and diluted earnings per share for the quarter ended June 30, 2011, compared to $0.04 basic and diluted earnings per share for the quarter ended June 30, 2010. Weighted average basic shares outstanding were 5,108,821 for the three months ended June 30, 2011 and 5,106,819 for the three months ended June 30, 2010. Weighted average diluted shares outstanding were 5,134,153 for the three months ended June 30, 2011 and 5,107,788 for the three months ended June 30, 2010.

For the six month period ended June 30, 2011, Bankshares had net income of $759 thousand compared to $305 thousand for the same period in the prior year, an improvement of $454 thousand. The net income of $759 thousand includes net interest income of $8.7 million compared to $9.5 million for the same period last year, a decrease of $839 thousand. That decrease is due primarily to a decrease in interest income in the amount of $2.3 million, which was partially offset by a decrease of $1.4 million in the cost of funds. For the six months ended June 30, 2011, total interest expense was $3.0 million compared to $4.4 million for the six months ended June 30, 2010. These results led to $0.15 basic and diluted income per share for the six months ended June 30, 2011. The basic and diluted income per share for the six months ended June 30, 2010 was $0.06. Weighted average basic shares outstanding were 5,108,436 for the six months ended June 30, 2011 and 5,106,819 for the six months ended June 30, 2010.

Net interest margin increased to 3.86% for the three months ended June 30, 2011 compared to 3.84% for the three months ended June 30, 2010, an increase of 2 basis points. Net interest margin was 3.82% for the six months ended June 30, 2011 compared to 3.75% for the six months ended June 30, 2010, an improvement of 7 basis points. A key contributing factor to the improved net interest margin was the lower cost of funds during 2011. Net interest margin for the first six months was negatively affected by the increase in non-accrual loans and by a decrease in the yield on interest earning assets. Total interest income reversed for the six months ended June 30, 2011 was $311 thousand compared to $116 thousand for the six months ended June 30, 2010.

Net Interest Income. Net interest income (on a fully tax equivalent basis) for the three months ended June 30, 2011 was $4.3 million compared to $5.0 million for the same period in 2010. Interest income on earning assets was $1.3 million lower for the three months ended June 30, 2011, compared to the second quarter of 2010, while interest expense decreased $623 thousand in the same time period.

Net interest income (on a fully tax equivalent basis) for the six months ended June 30, 2011 was $8.7 million compared to $9.7 million for the same period in 2010. Interest income on earning assets was $2.4 million lower for the six months ended June 30, 2011, compared to the first six months of 2010. Of the $2.4 million decrease in interest income, $858 thousand is attributable to the $30.0 million lower average balance in loans. The decrease in yield from 5.92% to 5.68% in the loan portfolio also contributed $410 thousand to the decrease in interest income. The reduction in the average balance in the investment securities portfolio was $26.2 million and contributed $551 thousand to the reduction in interest income. The decrease in yield from 4.64% to 3.94% in the investment securities portfolio also contributed $497 thousand to the decrease in interest income. This was offset by the decrease in interest expense of $1.4 million. The average balance of interest bearing deposits decreased by $49.4 million and contributed $540 thousand to the reduction in interest expense. The average rate paid on deposits improved to 1.58% from 2.15%, which reduced interest expense by $749 thousand. A lower average balance of borrowed funds offset a higher rate paid on borrowed funds.

Read the The complete Report

About the author:

10qk
Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

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