EX-99.1 2 d303190dex991.htm EXHIBIT 99.1 Exhibit 99.1

NEWS RELEASE

 

FOR IMMEDIATE RELEASE

   CONTACT:    William E. Doyle, Jr.

February 17, 2012

      (703) 814-7200

Alliance Bankshares Reports 2011 Results

CHANTILLY, VA – Alliance Bankshares Corporation (NASDAQ – ABVA) today reported a net loss of $483 thousand for 2011, which includes a loss of $739 thousand during the 4th quarter. Results during the quarter were unfavorably impacted by significant non-recurring merger expenses, OREO write-downs, and settlement of a legal action relating to the previous sale of a bank-owned residential property. Also, the continuing low level of long term interest rates resulted in an additional increase in the valuation of a $25 million FHLB Advance, which is accounted for under Fair Value Option (FVO) accounting. The quarterly results represent a loss of $.14 per share versus income of $.03 per share for the same period in 2010. For the full year ended December 31, 2011, the net loss is $.09 per share versus net income of $.14 per share for the full year ended December 31, 2010. Alliance’s regulatory capital ratios are strengthened since December 31, 2010, and remain above the levels necessary to be considered a “well capitalized” institution.

Core operating earnings (see Reconciliation of Non-GAAP Measures) on a pre-tax basis improved substantially year-over-year, up from $1.9 million in 2010 to $2.98 million for 2011. This calculation results from adjusting net income from continuing operations for non-recurring revenues and expenses, e.g., income from securities gains and expenses for merger-related activities and fair value adjustments.

At December 31, 2011, total assets amounted to $511.6 million, or a decline of $26.9 million when compared to the December 31, 2010 level of $538.5 million. As of December 31, 2011, total loans were $306.9 million, which is $25.4 million below the December 31, 2010 level of $332.3 million. The decline in the loan portfolio results from a combination of strategic repositioning of lending activities, normal amortization, and payoffs, the total of which offset new loan production during the period. Investment securities amounted to $123.5 million as of December 31, 2011, a decline of $12.4 million from the December 31, 2010 level of $135.9 million. Year-over-year, total deposits declined $26.6 million, to $380.4 million at December 31, 2011.

Non-performing assets (NPAs) at December 31, 2011 amounted to $17.97 million, an increase of $8.6 million when compared to $9.4 million at December 31, 2010. Year-over-year, the rise in NPAs is due to an $8.96 million increase in non-accrual loans, which offset a modest decline in OREO. At December 31, 2011, the allowance for loan losses stood at $5.4 million, or 1.76% of loans.

Continued efforts to manage expenses have resulted in a decline in noninterest expenses of $421,000 on a quarterly comparative basis, and $2.2 million year-over-year when comparing 2011 to 2010. The Bank’s net interest margin for 2011 was 3.48%, a decrease from 3.79% for 2010. The margin decline resulted largely from the change in mix within the investment portfolio and was also artificially depressed due to nonaccrual interest income reversals.


Cautionary Statement Regarding Forward-Looking Statements. Certain statements contained in this report that are not historical facts may constitute “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. These statements can generally be identified by the use of words such as “may,” “will,” “should,” “could,” “would,” “plan,” “believe,” “expect,” “anticipate,” “intend” or words of similar meaning. These statements are inherently uncertain; there can be no assurance that the underlying assumptions will prove to be accurate. These forward-looking statements include statements relating to the Company’s anticipated future performance, mix of assets and liabilities and effects of efforts to reposition its business. Readers should not place undue reliance on such statements, which speak only as of the date of this release. The Company does not undertake to update any forward-looking statement that may be made from time to time by it or on its behalf.

Forward-looking statements are subject to risks, assumptions and uncertainties, and could be affected by many factors. Some factors that could cause the Company’s actual results to differ materially from those anticipated in these forward-looking statements include: interest rates, general business conditions, as well as conditions within the financial markets, general economic conditions, unemployment levels, the legislative/regulatory climate, including the effect of the Dodd-Frank Wall Street Reform Act and Consumer Protection Act of 2010 and related regulations, regulatory compliance costs, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve, the quality/composition of the loan portfolios and the value of related collateral, the value of securities the Company holds, charge-offs on loans and the adequacy of the allowance for loan losses, loan demand, deposit flows, counterparty strength, competition, reliance on third parties for key services, the health of the real estate markets, the outcome of the Company’s repositioning initiatives, and changes in accounting principles.

More information on Alliance Bankshares Corporation can be found online at

www.alliancebankva.com, or by phoning an Alliance office.

###


ALLIANCE BANKSHARES CORPORATION

Consolidated Balance Sheets

 

     December 31,     December 31,  
     2011*     2010  
     (Dollars in thousands)  

ASSETS

    

Cash and due from banks

   $ 45,837      $ 24,078   

Federal funds sold

     16,567        17,870   

Trading securities, at fair value

     596        2,075   

Investment securities available-for-sale, at fair value

     123,463        135,852   

Restricted stock, at cost

     4,772        6,355   

Loans, net of unearned discount and fees

     306,876        332,310   

Less: allowance for loan losses

     (5,393     (5,281
  

 

 

   

 

 

 

Loans, net

     301,483        327,029   

Premises and equipment, net

     1,415        1,584   

Other real estate owned (OREO)

     3,748        4,627   

Other assets

     13,754        19,041   
  

 

 

   

 

 

 

TOTAL ASSETS

     511,635        538,511   
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Non-interest bearing deposits

   $ 112,450      $ 124,639   

Savings and NOW deposits

     51,475        56,569   

Money market deposits

     23,370        25,524   

Time deposits

     193,148        200,211   
  

 

 

   

 

 

 

Total deposits

     380,443        406,943   

Repurchase agreements, federal funds purchased and other borrowings

     40,420        43,153   

Federal Home Loan Bank advances ($29,350 and $26,208 at fair value)

     44,350        41,208   

Trust Preferred Capital Notes

     10,310        10,310   

Other liabilities

     2,568        3,212   
  

 

 

   

 

 

 

TOTAL LIABILITIES

     478,091        504,826   
  

 

 

   

 

 

 

Common stock, $4 par value; 15,000,000 shares authorized; 5,109,969 shares issued and outstanding at December 31, 2011 and 5,106,819 shares at December 31, 2010 , respectively.

     20,440        20,427   

Capital surplus

     25,862        25,857   

Retained (deficit)

     (12,794     (12,311

Accumulated other comprehensive income (loss), net

     36        (288
  

 

 

   

 

 

 

TOTAL STOCKHOLDERS’ EQUITY

     33,544        33,685   
  

 

 

   

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   $ 511,635      $ 538,511   
  

 

 

   

 

 

 

 

* Unaudited financial results


ALLIANCE BANKSHARES CORPORATION

Consolidated Income Statements

 

     Three Months Ended     Three Months Ended      Twelve Months Ended     Twelve Months Ended  
     December 31,     December 31,      December 31,     December 31,  
     2011*     2010*      2011*     2010  
     (Dollars in thousands, except per share)  

INTEREST INCOME:

         

Loans

   $ 4,355      $ 5,061       $ 17,870      $ 20,233   

Investment securities

     223        1,318         3,513        6,084   

Trading securities

     10        38         67        214   

Federal funds sold

     21        24         53        64   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total interest income

     4,609        6,441         21,503        26,595   
  

 

 

   

 

 

    

 

 

   

 

 

 

INTEREST EXPENSE:

         

Savings and NOW deposits

     36        44         124        216   

Time deposits

     826        1,153         3,671        5,577   

Money market deposits

     39        53         178        270   

Repurchase agreements, federal funds purchased and other borrowings

     44        68         238        354   

FHLB advances

     266        265         1,042        1,134   

Trust preferred capital notes

     102        93         380        367   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total interest expense

     1,313        1,676         5,633        7,918   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net interest income

     3,296        4,765         15,870        18,677   

Provision for loan losses

     344        425         1,549        1,753   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net interest income after provision for loan losses

     2,952        4,340         14,321        16,924   
  

 

 

   

 

 

    

 

 

   

 

 

 

OTHER INCOME:

         

Deposit account service charges

     36        47         151        220   

Net gain on sale of available-for-sale securities

     338        522         3,372        2,237   

Fair value adjustments

     (182     517         (3,132     (511

Other operating income

     192        97         504        456   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total other income

     384        1,183         895        2,402   

OTHER EXPENSES:

         

Salaries and employee benefits

     1,318        1,556         5,311        6,906   

Occupancy expense

     606        688         2,309        2,663   

Equipment expense

     146        207         632        772   

Other real estate owned expense

     379        392         456        841   

FDIC assessments

     (60     338         800        1,369   

Merger expenses

     539        —           1,158        —     

Operating expenses

     1,634        1,802         5,450        5,726   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total other expenses

     4,562        4,983         16,116        18,277   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) before income taxes

     (1,226     491         (900     1,049   

Income tax expense (benefit)

     (487     333         (417     344   
  

 

 

   

 

 

    

 

 

   

 

 

 

NET INCOME (LOSS)

   $ (739   $ 158       $ (483   $ 705   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income (loss) per common share, basic

   $ (0.14   $ 0.03       $ (0.09   $ 0.14   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income (loss) per common share, diluted

   $ (0.14   $ 0.03       $ (0.09   $ 0.14   
  

 

 

   

 

 

    

 

 

   

 

 

 

Weighted average number of shares, basic

     5,109,176        5,106,819         5,108,757        5,106,819   
  

 

 

   

 

 

    

 

 

   

 

 

 

Weighted average number of shares, diluted

     5,122,235        5,110,321         5,127,416        5,108,496   
  

 

 

   

 

 

    

 

 

   

 

 

 

 

* Unaudited financial results


ALLIANCE BANKSHARES CORPORATION

Consolidated Statistical Information

Performance Information

 

     December 31,     December 31,  
     2011*     2010  
     (Dollars in thousands, except per share)  

Performance Information:

    

For The Three Months Ended:

    

Average loans

   $ 314,140      $ 335,153   

Average earning assets

     445,070        501,985   

Average assets

     501,713        549,998   

Average non-interest bearing deposits

     98,621        112,846   

Average total deposits

     363,485        410,952   

Average interest-bearing liabilities

     366,082        398,084   

Average stockholder equity

     34,650        36,674   

Net interest margin (1)

     2.95     3.86

Net income per share, basic

   $ (0.14   $ 0.03   

Net income per share, diluted

   $ (0.14     0.03   

For The Twelve Months Ended:

    

Average loans

   $ 320,005      $ 344,684   

Average earning assets

     455,673        512,069   

Average assets

     497,964        558,945   

Average non-interest bearing deposits

     92,300        100,365   

Average total deposits

     359,998        409,689   

Average interest-bearing liabilities

     368,369        418,827   

Average equity

     34,790        37,395   

Return on average assets

     NM        NM   

Return on average equity

     NM        NM   

Net interest margin (1)

     3.48     3.79

Net income (loss) per share, basic

   $ (0.09   $ 0.14   

Net income (loss) per share, diluted

   $ (0.09     0.14   

 

* Unaudited financial results
(1)

On a fully-tax equivalent basis assuming a 34% federal tax rate.


ALLIANCE BANKSHARES CORPORATION

Consolidated Statistical Information

Credit Quality Information (1)

     December 31,      December 31,  
     2011*      2010  
     (Dollars in thousands)  

Credit Quality Information:

     

Nonperforming assets:

     

Impaired loans ( with a specific allowance)

   $ 9,031       $ 2,400   

Other Non-accrual loans

     4,233         1,903   

Loans past due 90 days and still accruing

     —           256   

Troubled debt restructured

     957         212   

OREO

     3,748         4,627   
  

 

 

    

 

 

 

Total nonperforming assets

   $ 17,969       $ 9,398   
  

 

 

    

 

 

 

Specific reserves associated with impaired & non-accrual loans

   $ 2,271       $ 873   
  

 

 

    

 

 

 

Largest components of the nonperforming assets listed above:

December 31, 2011 non-accrual and Impaired loans (91% of the total)

$2.6 million which is secured by commercial real estate.

$2.5 million which is secured by residential land.

$2.2 million which is secured by17 residential units

$1.0 million which is secured by commercial real estate

$968 thousand which is secured by commercial equipment and receivables.

$962 thousand which is secured by residential property.

$900 thousand secured by commercial land

$540 thousand which is secured by a residential property and lot.

$348 thousand which is secured by residential property.

$336 thousand which is secured by residential real estate.

December 31, 2010 OREO (96% of the total)

$1.7 million which is acreage near Winchester, Virginia. (OREO as of 9/30/07)

$879 thousand which is acreage in Woodstock, VA. (OREO as of 3/31/08)

$837 thousand which is property in Charles Town, WV. (OREO as of 6/30/10)

$477 thousand which consists of two parcels of land in Northern Virginia. (OREO as of 3/31/08)

$275 thousand which is one acre in Northern Virginina. (OREO as of 3/31/08)

$162 thousand which is residential land in Northern Virginia. (OREO as of 12/31/10)

$117 thousand which is an office warehouse in King George, VA. (OREO as of 3/31/10)

 

* Unaudited financial results
(1)

The allowance for loan losses includes a specific allocation for all impaired loans. Nonperforming assets are defined as impaired loans, non-accrual loans, OREO, troubled debt restructured, and loans past due 90 days or more and still accruing interest.


ALLIANCE BANKSHARES CORPORATION

Consolidated Statistical Information

Credit Quality Information (1)

 

For The Twelve Months Ended:    December 31     December 31  
     2011*     2010*  
     (Dollars in thousands)  

Balance, beginning of period

   $ 5,281      $ 5,619   

Provision for loan losses

     1,549        1,753   

Loans charged off

     (1,702     (2,239

Recoveries of loans charged off

     265        148   
  

 

 

   

 

 

 

Net charge-offs

     (1,437     (2,091
  

 

 

   

 

 

 

Balance, end of period

   $ 5,393      $ 5,281   
  

 

 

   

 

 

 

 

     December 31,     September 30,     June 30,     March 31,     December 31,  
     2011     2011     2011     2011     2010*  

Ratios:

          

Allowance for loan losses to total loans

     1.76     1.62     1.62     1.75     1.59

Allowance for loan losses to non-accrual loans

     0.41X        0.49X        0.53X        0.48X        2.8X   

Allowance for loan losses to nonperforming assets

     0.30X        0.34X        0.35X        0.33X        0.6X   

Nonperforming assets to total assets

     3.51     2.85     2.98     3.16     1.75

Net charge-offs to average loans

     0.45     0.54     0.46     0.03     0.61

 

* Unaudited financial results
(1)

The allowance for loan losses includes a specific allocation for all impaired loans. Nonperforming assets are defined as impaired loans, non-accrual loans, OREO, troubled debt restructured, and loans past due 90 days or more and still accruing interest.


ALLIANCE BANKSHARES CORPORATION

Consolidated Statistical Information

Trading Asset & Liability Summary

 

     December 31, 2011     December 31, 2010  
     Fair            Fair         

Trading Securities

   Value      Yield     Value      Yield  
     (Dollars in thousands)  

PCMOs 1

   $ 596         5.44   $ 2,075         5.32
  

 

 

      

 

 

    

Totals

   $ 596         5.44   $ 2,075         5.32
  

 

 

      

 

 

    

 

1

As of December 31, 2011 trading securities consisted of one PCMO instrument. This PCMO was rated AAA by at least one ratings agency on the purchase date. Currently the security has a rating below investment grade. The instrument is currently performing as expected.

 

     December 31, 2011      December 31, 2010  
     Fair      Fair  

Fair Value Assets and Liabilities

   Value      Value  
     (Dollars in thousands)  

Trading securities

   $ 596       $ 2,075   
  

 

 

    

 

 

 

FHLB advances

     29,350         26,208   
  

 

 

    

 

 

 


ALLIANCE BANKSHARES CORPORATION

Consolidated Statistical Information

Capital Information

 

     December 31,     December 31,  
     2011*     2010  
     (Dollars in thousands, except per share)  

Capital Information:

    

Book value per share

   $ 6.56      $ 6.60   

Tier I risk-based capital ratio

     12.9     11.6

Total risk-based capital ratio

     14.1     12.9

Leverage capital ratio

     7.2     7.5

Total equity to total assets ratio

     6.6     6.3

 

* Unaudited financial results


ALLIANCE BANKSHARES CORPORATION

Components of Stockholder Equity

on a Book Value per Share Basis

 

     Twelve Months     Twelve Months  
     Ended December 31,     Ended December 31,  
     2011     2010  

Book Value Per Share, beginning of the period

   $ 6.60      $ 6.49   

Net income (loss) per common share

     (0.09     0.14   

Effects of Changes in Other Comprenshive Income 1

     0.05        (0.03
  

 

 

   

 

 

 

Book Value Per Share, end of the period

   $ 6.56      $ 6.60   
  

 

 

   

 

 

 

 

1 

Other Comprehensive Income represents the unrealized gains or losses associated with available-for-sale securities and the related reclassification adjustments.


ALLIANCE BANKSHARES CORPORATION

Reconciliation of Non-GAAP Measures

 

     Three Months Ended     Three Months Ended     Twelve Months Ended     Twelve Months Ended  
     December 31,     December 31,     December 31,     December 31,  
     2011*     2010*     2011*     2010  
     (Dollars in thousands, except per share)  

Net income (loss) from continuing operations

   $ (739   $ 158      $ (483   $ 705   

Add: Income taxes (benefit)

     (487     333        (417     344   

Add: Provision for loan losses

     344        425        1,549        1,753   

Add: Other real estate owned (OREO) expense

     379        392        456        841   

Add: Settlement of legal action relating to sale of property

     421        —          830        —     

Add: Consulting arrangement with former employee

     21        —          125        —     

Add: Merger expenses

     539        —          1,158        —     

Less: Net gains on sale of securities

     (338     (522     (3,372     (2,237

Add: Net Fair Value Adjustments (FVO)

     182        (517     3,132        511   
  

 

 

   

 

 

   

 

 

   

 

 

 

Core earnings

   $ 322      $ 269      $ 2,978      $ 1,917   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

* Unaudited financial results