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Articles 

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

November 14, 2012 | About:

Alliance Bankshares Corp. (ABVA) filed Quarterly Report for the period ended 2012-09-30.

Alliance Bankshares Corp has a market cap of $22.2 million; its shares were traded at around $4.39 with and P/S ratio of 1.

Highlight of Business Operations:

The net loss for the quarter ended September 30, 2012 was $170 thousand compared to a net loss of $503 thousand for the same period in 2011, an improvement of $333 thousand. The net loss was $1.5 million for the nine months ended September 30, 2012 compared to net income of $256 thousand for the nine months ended September 30, 2011, a decrease of $1.8 million. Loss per common share, basic and diluted, amounted to $0.30 for the nine months ended September 30, 2012, compared to earnings per share of $0.05 for the nine months ended September 30, 2011. Earnings for the nine months ended September 30, 2012, were negatively affected by merger related expenses of $666 thousand, the negative fair value adjustment on the FHLB advance of $668 thousand and a reduction in interest income of $3.9 million, from $17.1 million for the nine months ended September 30, 2011 to $13.2 million for the nine months ended September 30, 2012. Due to the improvement in the overall risk profile of the loan portfolio and the lower level of total loans, Alliance released $223 thousand of reserves into income and also did not recognized a provision expense during the quarter, this has positively affected net income for the period. The reduction in interest income is comprised of a $1.4 million decrease in the loan interest income and a $2.5 million decrease in the interest income from investment securities.

For the nine month period ended September 30, 2012, Bankshares had a net loss of $1.5 million compared to net income of $256 thousand for the same period in the prior year, a decline of $1.8 million. The net loss of $1.5 million for the nine months ended September 30, 2012 includes net interest income of $9.6 million compared to $12.7 million for the same period last year, a decrease of $3.1 million. The decrease is due primarily to a decrease in interest income in the amount of $3.9 million, from $17.1 million for the nine months ended September 30, 2011, to $13.2 million for the same period in 2012, and the lower average yield on the investment portfolio and the lower average balances on the loan portfolio. The decrease was partially offset by a reduction of $787 thousand in the cost of funds. For the nine months ended September 30, 2012, total interest expense was $3.5 million compared to $4.3 million for the nine months ended September 30, 2011. These factors led to a $0.30 basic and diluted loss per share for the nine months ended September 30, 2012. The basic and diluted earnings per share for the nine months ended September 30, 2011 was $0.05. Weighted average basic shares outstanding were 5,109,969 for the nine months ended September 30, 2012 and 5,108,616 for the nine months ended September 30, 2011. Weighted average diluted shares outstanding were 5,109,969 and 5,129,311 for the nine months ended September 30, 2012 and September 30, 2011, respectively.

Net interest income for the nine months ended September 30, 2012 was $9.6 million compared to $12.8 million for the same period in 2011. Interest income on earning assets was $3.9 million lower for the nine months ended September 30, 2012, compared to the first nine months of 2011. Of the $3.9 million decrease in interest income, $1.1 million is attributable to the $27.5 million lower average balance in loans. The reduction in the average balance in the investment securities portfolio was $17.3 million and contributed $2.5 million to the reduction in interest income. This was offset by the decrease in interest expense of $787 thousand. The average balance of interest bearing deposits decreased by $18.0 million and contributed $818 thousand to the reduction in interest expense.

Total average interest earning assets yielded 4.10% for the three months ended September 30, 2012 compared to the yield of 4.82% for the same period in 2011. Total interest income was $4.2 million for the three months ended September 30, 2012 compared to $5.4 million for the three months ended September 30, 2011. As discussed above, interest income decreased in the third quarter of 2012 compared to the third quarter of 2011 due to the smaller average loans and securities balances, which are a product of Bankshares strategies to reposition its balance sheet, and lower yields generated by Bankshares interest-earning assets in the low interest rate environment, coupled with the unexpected prepayments on the CMO instruments in the investment portfolio.

Total average earning assets yielded 4.24% for the nine months ended September 30, 2012 or 76 basis points lower than the yield of 5.00% for the same period in 2011. Total interest income (on a fully tax equivalent basis) was $13.2 million for the nine months ended September 30, 2012 compared to $17.1 million for the nine months ended September 30, 2011.

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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