Alliance Financial Announces Quarterly Earnings
- Press Release
- Source: Alliance Financial Corporation
- On 4:00 pm EDT, Wednesday October 14, 2009
SYRACUSE, N.Y., Oct. 14 /PRNewswire-FirstCall/ -- Alliance Financial Corporation ("Alliance", or the "Company") (Nasdaq: ALNC - News), the holding company for Alliance Bank, N.A., announced today its net income for the quarter ended September 30, 2009 was $3.0 million or $0.64 per diluted common share, compared with $3.0 million or $0.65 per diluted common share in the year-ago quarter. Net income increased $922,000 or 45.3% compared with the second quarter of 2009 due primarily to a $608,000 increase in net interest income and a $675,000 decrease in the provision for credit losses as a result of a $670,000 decrease in net charge-offs in the third quarter.
Related Quotes
| Symbol | Price | Change |
|---|---|---|
| ALNC | 28.38 | -1.18 |
Net income was $8.0 million for the nine months ended September 30, 2009 and 2008, respectively. Net income available to common shareholders for the nine months ended September 30, 2009 was $6.9 million or $1.49 per diluted share, compared with $8.0 million or $1.69 per diluted share in the year-ago period. Preferred stock dividends and the accretion of the preferred stock discount was $1.1 million or $0.24 per diluted share for the nine months ended September 30, 2009.
Jack H. Webb, President and CEO of Alliance said, "Alliance's third quarter financial performance is among the best in the Company's history, and is a reflection of the continued execution of our business plan, which places primary focus on excellent service to our customers here in Central New York, and on providing an outstanding return to our shareholders. We remain steadfastly committed to prudent lending and investing strategies and the active management of our balance sheet, balancing short-term performance with long-term strength and stability."
Balance Sheet Highlights
Total assets were $1.5 billion at September 30, 2009, an increase of $88.9 million or 6.5% from December 31, 2008. Securities available-for-sale increased $97.6 million in 2009 to $396.7 million at the end of the third quarter. Total loans and leases (net of unearned income) increased $17.0 million to $927.7 million at September 30, 2009, compared with $910.8 million at December 31, 2008.
Residential mortgages totaled $353.7 million at September 30, 2009. Residential mortgage originations totaled $37.1 million and $133.4 million in the three months and nine months ended September 30, 2009, respectively. The Company's mortgage originations for the first nine months of 2009 have exceeded our full year 2008 record originations of $103.2 million.
Indirect auto loan balances were $194.3 million as of September 30, 2009. The Company originated $25.0 million of indirect auto loans in the third quarter, compared with $32.3 million in the second quarter of 2009 and $25.9 million in the year-ago quarter. Alliance originates auto loans through a network of reputable, well established automobile dealers located in Central and Western New York. Applications received through the Company's indirect lending program are subject to the same comprehensive underwriting criteria and procedures as are employed in its direct lending programs.
Leases (net of unearned income) continued to decrease in the third quarter as a result of the Company's previously announced decision to cease new lease originations. The Company's lease portfolio decreased $9.2 million to $76.1 million at the end of the third quarter, and is expected to continue to run-off at the rate of approximately $8.0 million per quarter over the next twelve months.
Commercial loans and mortgages decreased $10.4 million in the third quarter and totaled $206.5 million at September 30, 2009. Originations of commercial loans (excluding lines of credit) in the third quarter totaled $10.5 million, compared with $10.8 million in the second quarter of 2009 and $13.1 million in the year-ago quarter. The decrease in outstanding balances during the third quarter was largely the result of lower utilization of commercial lines-of-credit.
The Company's investment securities portfolio totaled $396.7 million at September 30, 2009, compared with $299.1 million at December 31, 2008. The Company's portfolio is comprised entirely of investment grade securities, the majority of which are rated "AAA" by one or more of the nationally recognized rating agencies. The breakdown of the securities portfolio at September 30, 2009 was 76% government sponsored entity guaranteed mortgage-backed securities, 22% municipal securities and 2% obligations of U.S. Government-sponsored corporations. Mortgage-backed securities, which totaled $300.8 million at September 30, 2009, are comprised primarily of pass-through securities backed by conventional residential mortgages and guaranteed by Fannie-Mae, Freddie-Mac or Ginnie Mae, which in turn are backed by the full faith and credit of the federal government. The Company does not invest in any private-label mortgage-backed securities or securities backed by sub-prime, Alt-A or other high-risk mortgages. The Company also does not hold any preferred stock, corporate debt or trust preferred securities in its investment portfolio.
The Company had net unrealized gains of approximately $9.7 million in its securities portfolio at September 30, 2009.
Total deposits were $1.1 billion at September 30, 2009, which was an increase of $147.0 million or 15.7% compared with December 31, 2008. Approximately 70% of the deposit increase, or $102.3 million, resulted from growth across all of our retail, commercial and municipal business lines. The Company's deposit mix continued to be weighted heavily in lower cost demand, savings and money market accounts (transaction accounts), which comprised 64.0% of total deposits at the end of the third quarter, compared with 62.1% at December 31, 2008 and 61.0% at September 30, 2008. The balance of the increase in deposits in 2009 resulted from the acquisition of wholesale time deposits to fund investment portfolio growth.
Shareholders' equity was $124.8 million at September 30, 2009, compared with $120.0 million at June 30, 2009 and $144.5 million at December 31, 2008. Net income for the quarter increased shareholders' equity by $3.0 million and was partially offset by common stock dividends declared of $1.3 million or $0.28 per common share.
The Company's Tier 1 leverage ratio was 7.42% and its total risk-based capital ratio was 12.64% at the end of the third quarter, both of which comfortably exceeded the regulatory thresholds required to be classified as a well-capitalized institution, which are 5.0% and 10.0%, respectively. The Company's tangible common equity capital ratio was 5.82% at September 30, 2009.
Asset Quality and the Provision for Credit Losses
Loans and leases past due 30 days or more totaled $22.3 million or 2.4% of total loans and leases at September 30, 2009, compared with $20.4 million or 2.2% at June 30, 2009 and $20.3 million or 2.2% of total loans and leases at December 31, 2008. Approximately 45% of all delinquent loans and leases at the end of the third quarter were past due for one payment, compared with 44% at June 30, 2009 and 55% at the end of 2008.
Nonperforming assets were $10.6 million or 0.72% of total assets at September 30, 2009, compared with $8.0 million or 0.55% of total assets at June 30, 2009 and $5.1 million or 0.38% of total assets at December 31, 2008. Included in nonperforming assets at the end of the third quarter are nonperforming loans and leases totaling $10.2 million, compared with $7.6 million and $4.5 million at June 30, 2009 and December 31, 2008, respectively.
The Company's exposure to any individual nonperforming credit is low, as reflected in the average balance of approximately $80,000 for each individual nonperforming loan and lease. Conventional residential mortgages comprised $2.9 million (32 loans) or 29% of nonperforming loans and leases at September 30, 2009. Nonperforming commercial loans totaled $4.9 million (38 loans) or 49% of nonperforming loans and leases at the end of the third quarter. Leases on nonperforming status totaled $2.0 million (28 leases) or 20% of nonperforming loans and leases at the end of the third quarter.
The provision for credit losses was $1.1 million and $4.7 million in the quarter and nine months ended September 30, 2009, respectively, compared with $849,000 and $3.5 million in the year-ago periods, respectively. Net charge-offs were $978,000 and $3.8 million in the three months and nine months ended September 30, 2009, respectively, compared with $625,000 and $3.1 million in the year-ago periods, respectively. Net charge-offs declined $670,000 or 40.7% from the second quarter of 2009. The decrease in linked-quarter net charge-offs resulted from a $1.4 million or 71.6% decrease in charge-offs in the Company's lease portfolio. Net charge-offs equaled 0.42% and 0.55%, respectively, of average loans and leases during the three months and nine months ended September 30, 2009, compared with 0.28% and 0.46%, respectively, in the year-ago periods. The provision for credit losses as a percentage of net charge-offs was 115% and 122%, respectively, in the quarter and nine months ended September 30, 2009, compared with 136% and 115%, respectively, in the comparable 2008 time periods.
The allowance for credit losses was $10.0 million at September 30, 2009, compared with $9.9 million at June 30, 2009 and $9.2 million at December 31, 2008. The ratio of the allowance for credit losses to total loans and leases was 1.08% at September 30, 2009, compared with 1.05% at June 30, 2009 and 1.01% at December 31, 2008. The ratio of the allowance for credit losses to nonperforming loans and leases was 98.0% at September 30, 2009, compared with 129.5% at June 30, 2009 and 204.6% at December 31, 2008.
Net Interest Income
Net interest income totaled $11.2 million in the three months ended September 30, 2009, which was an increase of $1.7 million or 17.2% compared with the third quarter of 2008. Net interest income increased $608,000 or 5.7% compared with the second quarter of 2009. The increases in net interest income were driven by the continued expansion of the Company's net interest margin and to an increase in average earning assets.
Average earning assets increased $118.0 million in the third quarter compared with the year-ago quarter, and were up $17.7 million compared with the second quarter of 2009, with much of the growth in the Company's residential mortgage and investment portfolios.
The Company's tax-equivalent net interest margin increased 19 basis points in the third quarter compared with the year-ago quarter, and was up 12 basis points compared with the second quarter of 2009. The net interest margin on a tax-equivalent basis was 3.62% in the third quarter of 2009, compared with 3.43% in the third quarter of 2008 and 3.50% in the second quarter of 2009. The increase in the net interest margin was the result of a decrease in the tax-equivalent earning asset yield of 73 basis points in the third quarter compared with the year-ago quarter, which was more than offset by a decrease in its cost of funds of 103 basis points over the same period. The Company's yield on earning assets decreased one basis point in the third quarter of 2009 compared with the second quarter of 2009, which was offset by a decrease in its cost of funds of 16 basis points during the same period.
Net interest income for the nine months ended September 30, 2009 totaled $31.9 million, which was an increase of $4.0 million or 14.5% compared with $27.9 million in the year-ago period. Average earning assets increased $89.4 million in the first nine months of 2009 compared with the year-ago period. The tax-equivalent net interest margin was 3.51% in the first nine months of 2009, compared with 3.32% in the first nine months of 2008. A decrease of 77 basis points in the Company's tax-equivalent earning assets yield in the first nine months of 2009 compared with the same period in 2008 was more than offset by a 104 basis point decrease in its cost of funds over the same period.
The positive net interest margin growth in 2009 has been driven by the Company's ongoing active balance sheet management and deposit pricing strategies and the positive effect of those strategies in the current interest rate environment.
Non-Interest Income and Non-Interest Expenses
Non-interest income was $4.8 million in the third quarter of 2009, which was a decrease of $372,000 or 7.2% from the third quarter of 2008. Investment management income decreased $436,000 or 20.0% in the third quarter compared with the year-ago quarter as a result of the impact of the decline in equity markets over the past two years on the value of assets under management.
Non-interest income comprised 29.8% of total revenue in the third quarter of 2009 compared with 34.9% in the year-ago quarter and 31.0% in the second quarter of 2009. The decline in this ratio was driven largely by the increase in net interest income and to a lesser degree by the decrease in investment management income.
Non-interest income totaled $14.9 million in the first nine months of 2009, which is a decrease of $718,000 from $15.6 million in the year-ago period. The decline in the performance of the public equity markets noted previously resulted in a $1.4 million decrease in investment management income in the first nine months of 2009 compared with the year-ago period, which was partially offset by an $878,000 increase in gains on the sales of securities. Non-interest income (excluding securities gains) comprised 30.3% of total revenue in the first nine months of 2009 compared with 35.6% in the year-ago period.
Non-interest expenses were $10.9 million in the quarter ended September 30, 2009, compared to $9.9 million in the third quarter of 2008. FDIC insurance expense increased $384,000 in the third quarter compared with the year-ago quarter on higher assessment rates charged to all FDIC-insured banks in 2009. Non-interest expenses were unchanged in the third quarter compared to the second quarter of 2009 as a $605,000 decrease in FDIC insurance expense was offset by a $586,000 increase in salaries and benefits resulting largely from an increase in incentive compensation accruals in the third quarter. FDIC insurance was higher in the second quarter of 2009 because of a special assessment charged to all FDIC-insured banks in the second quarter.
Non-interest expenses were $31.9 million in the nine months ended September 30, 2009, compared to $29.3 million in the first nine months of 2008. The increase of $2.5 million or 8.7% was due largely to an increase in FDIC insurance expense of $1.7 million as a result of the special assessment in the second quarter and on higher FDIC assessment rates for all banks in 2009. Also contributing to the increase were higher mortgage servicing costs due to increased servicing volume and $354,000 in nonrecurring miscellaneous asset write-offs.
The Company's efficiency ratio was 68.2% in the third quarter of 2009 compared with 67.3% in the year-ago quarter and 70.8% in the second quarter of 2009. The Company's efficiency ratio was 69.6% in the nine months ended September 30, 2009, compared with 67.8% in the year-ago period.
The Company's effective tax rate was 25.4% and 22.4% for the three months and nine months ended September 30, 2009 compared with 24.1% and 24.9% in the year-ago periods.
Alliance Financial Corporation is an independent financial holding company with Alliance Bank, N.A. as its principal subsidiary that provides retail and commercial banking, and trust and investment services through 29 offices in Cortland, Madison, Oneida, Onondaga and Oswego counties. Alliance also operates an investment management administration center in Buffalo, N.Y., an equipment lease financing company, Alliance Leasing, Inc., and a multi-line insurance agency, Ladd's Agency, Inc.
This press release contains certain forward-looking statements with respect to the financial condition, results of operations and business of Alliance Financial Corporation. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: an increase in competitive pressure in the banking industry; changes in the interest rate environment which may affect the net interest margin; changes in the regulatory environment; general economic conditions, either nationally or regionally, resulting, among other things, in a deterioration in credit quality; changes in business conditions and inflation; changes in the securities markets; changes in technology used in the banking business; our ability to maintain and increase market share and control expenses; and other factors detailed from time to time in our SEC filings.
Contact: Alliance Financial Corporation
J. Daniel Mohr, Treasurer and CFO (315) 475-4478
Alliance Financial Corporation
Consolidated Statements of Income (Unaudited)
Three months ended Nine months ended
September 30, September 30,
----------------- ------------------
2009 2008 2009 2008
---- ---- ---- ----
(Dollars in thousands, except share and
per share data)
Interest income:
Loans, including fees $12,417 $13,585 $37,605 $41,421
Federal funds sold and
interest bearing deposits 1 10 15 99
Securities 3,711 3,139 10,273 9,745
----- ----- ------ -----
Total interest income 16,129 16,734 47,893 51,265
Interest expense:
Deposits:
Savings accounts 105 124 339 361
Money market accounts 766 1,099 2,573 3,615
Time accounts 2,347 3,480 7,523 12,030
NOW accounts 120 177 404 564
----- ----- ------ -----
Total 3,338 4,880 10,839 16,570
Borrowings:
Repurchase agreements 211 252 691 752
FHLB advances 1,171 1,698 3,819 5,024
Junior subordinated
obligations 179 325 647 1,066
----- ----- ------ -----
Total interest expense 4,899 7,155 15,996 23,412
Net interest income 11,230 9,579 31,897 27,853
Provision for credit losses 1,125 849 4,675 3,526
----- ----- ------ -----
Net interest income after
provision for credit losses 10,105 8,730 27,222 24,327
Non-interest income:
Investment management income 1,743 2,179 5,289 6,717
Service charges on deposit
accounts 1,297 1,379 3,758 3,869
Card-related fees 566 533 1,654 1,578
Insurance agency income 338 384 1,027 1,204
Income from bank-owned life
insurance 255 243 754 606
Gain on the sale of loans 230 55 505 217
Gain on sale of securities
available-for-sale - - 1,015 137
Other non-interest income 333 361 886 1,278
----- ----- ------ -----
Total non-interest income 4,762 5,134 14,888 15,606
Non-interest expense:
Salaries and employee benefits 5,307 5,108 14,728 15,025
Occupancy and equipment expense 1,728 1,751 5,279 5,148
Communication expense 207 200 594 602
Office supplies and postage
expense 359 310 971 861
Marketing expense 228 278 727 847
Amortization of intangible
assets 388 444 1,163 1,267
Professional fees 734 602 2,165 1,964
FDIC insurance premium 434 50 1,820 104
Other operating expense 1,515 1,156 4,419 3,505
----- ----- ------ -----
Total non-interest expense 10,900 9,899 31,866 29,323
Income before income tax
expense 3,967 3,965 10,244 10,610
Income tax expense 1,009 955 2,293 2,637
----- ----- ------ -----
Net income $2,958 $3,010 $7,951 $7,973
====== ====== ====== ======
Dividend and accretion of
discount on preferred stock - - (1,084) -
----- ----- ------ -----
Net income available to common
shareholders $2,958 $3,010 $6,867 $7,973
Share and Per Share Data
Basic average common shares
outstanding 4,521,331 4,545,357 4,503,298 4,559,794
Diluted average common shares
outstanding 4,563,168 4,564,904 4,524,057 4,611,888
Basic earnings per common
share $0.64 $0.65 $1.50 $1.71
Diluted earnings per common
share $0.64 $0.65 $1.49 $1.69
Cash dividends declared $0.28 $0.26 $0.80 $0.74
Alliance Financial Corporation
Consolidated Balance Sheets (Unaudited)
September 30, December 31,
2009 2008
---------- ----------
(Dollars in thousands, except share
and per share data)
Assets
Cash and due from banks $24,820 $21,172
Federal funds sold - 26,918
Securities available-for-sale 396,730 299,149
Federal Home Loan Bank of NY
("FHLB") Stock and 11,821 11,844
Federal Reserve Bank ("FRB") Stock
Loans and leases held for sale 1,365 875
Total loans and leases, net of
unearned income 927,732 910,755
Less allowance for credit losses 10,006 9,161
------ -----
Net loans and leases 917,726 901,594
Premises and equipment, net 20,388 21,202
Accrued interest receivable 4,988 4,218
Bank-owned life insurance 25,693 24,940
Goodwill 32,073 32,073
Intangible assets, net 10,365 11,528
Other assets 10,307 11,845
------ ------
Total assets $1,456,276 $1,367,358
========== ==========
Liabilities and shareholders' equity
Liabilities:
Deposits:
Non-interest bearing 151,998 140,845
Interest bearing 932,913 797,037
------- -------
Total deposits 1,084,911 937,882
Borrowings 201,240 238,972
Accrued interest payable 1,177 3,037
Other liabilities 18,404 17,212
Junior subordinated obligations
issued to unconsolidated
subsidiary trusts 25,774 25,774
------ ------
Total liabilities 1,331,506 1,222,877
Shareholders' equity:
Preferred stock - 26,331
Common stock 4,937 4,901
Surplus 42,865 41,922
Undivided profits 83,988 81,110
Accumulated other comprehensive
income 4,051 971
Directors' stock-based deferred
compensation plan (2,415) (2,098)
Treasury stock (8,656) (8,656)
------ ------
Total shareholders' equity 124,770 144,481
------- -------
Total liabilities and
shareholders' equity $1,456,276 $1,367,358
========== ==========
Common shares outstanding 4,614,999 4,578,910
Book value per common share $27.04 $25.67
Tangible book value per common share $17.84 $16.15
Alliance Financial Corporation
Consolidated Average Balances (Unaudited)
Three months ended Nine months ended
September 30, September 30,
------------------- ---------------
2009 2008 2009 2008
---- ---- ---- ----
(Dollars in thousands)
Earning assets:
Federal funds sold and
interest bearing deposits $- $1,596 $17,176 $5,184
Securities(1) 374,718 281,148 339,467 284,813
Loans and leases receivable:
Residential real
estate loans(2) 350,798 301,338 340,632 289,730
Commercial loans 210,629 212,319 213,077 216,944
Leases, net of
unearned income(2) 79,529 116,478 89,313 123,612
Indirect loans 195,244 181,747 187,415 177,648
Other consumer loans 92,109 90,406 90,939 90,686
------ ------ ------ ------
Loans and leases
receivable, net of
unearned income 928,309 902,288 921,376 898,620
------- ------- ------- -------
Total earning assets 1,303,027 1,185,032 1,278,019 1,188,617
Non-earning assets 131,669 126,060 132,904 126,616
------- ------- ------- -------
Total assets $1,434,696 $1,311,092 $1,410,923 $1,315,233
========== ========== ========== ==========
Interest bearing
liabilities:
Interest bearing checking
accounts $116,665 $107,410 $116,097 $106,920
Savings accounts 95,048 88,843 91,671 85,935
Money market accounts 311,788 226,134 295,551 221,721
Time deposits 404,397 372,010 381,566 393,349
Borrowings 182,905 221,855 194,950 216,349
Junior subordinated
obligations issued to
unconsolidated trusts 25,774 25,774 25,774 25,774
------ ------ ------ ------
Total interest bearing
liabilities 1,136,577 1,042,026 1,105,609 1,050,048
Non-interest bearing
deposits 159,617 136,968 154,561 131,665
Other non-interest bearing
liabilities 16,214 16,501 16,833 17,542
------ ------ ------ ------
Total liabilities 1,312,408 1,195,495 1,277,003 1,199,255
Shareholders' equity 122,288 115,597 133,920 115,978
------- ------- ------- -------
Total liabilities and
shareholders' equity $1,434,696 $1,311,092 $1,410,923 $1,315,233
========== ========== ========== ==========
(1) The amounts shown are amortized cost and include FHLB and FRB stock
(2) Includes loans and leases held for sale
Alliance Financial Corporation
Investments, Loans and Leases, and Deposits (Unaudited)
The following table sets forth the amortized cost and fair value of the
Company's available-for-sale securities portfolio:
September 30, 2009 June 30, 2009 December 31, 2008
------------------ ----------------- -----------------
Amortized Fair Amortized Fair Amortized Fair
Cost Value Cost Value Cost Value
--------- ----- --------- ------- --------- -------
Securities (Dollars in thousands)
available-for-sale
Debt securities:
U.S. Treasury
obligations $100 $100 $101 $101 $101 $102
Obligations of
U.S. government-
sponsored
corporations 6,189 6,509 6,651 6,801 34,489 35,143
Obligations of
states and
political
subdivisions 82,762 86,131 82,737 84,788 89,154 91,033
Mortgage-backed
securities(1) 295,026 300,828 271,684 274,782 167,753 169,960
------- ------- ------- ------- ------- -------
Total debt
securities 384,077 393,568 361,173 366,472 291,497 296,238
Stock investments:
Equity securities 1,958 2,151 1,958 2,023 1,958 1,923
Mutual funds 1,000 1,011 1,000 995 1,000 988
----- ----- ----- --- ----- ---
Total stock
investments 2,958 3,162 2,958 3,018 2,958 2,911
Total
available-for-sale $387,035 $396,730 $364,131 $369,490 $294,455 $299,149
======== ======== ======== ======== ======== ========
(1) Comprised of pass-through debt securities collateralized by
conventional residential mortgages and guaranteed by either Fannie
Mae, Freddie Mac or Ginnie Mae, which are, in turn, backed by the full
faith and credit of the federal government.
The following table sets forth the composition of the Company's loan and
lease portfolio at the dates indicated:
September 30, 2009 June 30, 2009 December 31, 2008
-------------- -------------- ---------------
Amount Percent Amount Percent Amount Percent
------ ------- ------ ------- ------ -------
(Dollars in thousands)
Loan portfolio
composition
Residential real
estate loans $353,721 38.3% $346,671 37.2% $314,039 34.6%
Commercial loans 206,472 22.4% 216,915 23.3% 214,315 23.6%
Leases, net of
unearned income 76,117 8.2% 85,339 9.1% 104,655 11.6%
Indirect loans 194,267 21.0% 192,044 20.6% 182,807 20.2%
Other consumer loans 92,953 10.1% 91,716 9.8% 90,906 10.0%
------ ---- ------ --- ------ ----
Total loans and
leases 923,530 100.0% 932,685 100.0% 906,722 100.0%
===== ===== ======
Net deferred loan
costs 4,202 4,102 4,033
Allowance for credit
losses (10,006) (9,859) (9,161)
------- ------ ------
Net loans and leases $917,726 $926,928 $901,594
======== ======== ========
The following table sets forth the composition of the Company's deposits
at the dates indicated:
September 30, 2009 June 30, 2009 December 31, 2008
------------------ ------------- -----------------
Amount Percent Amount Percent Amount Percent
Deposit composition ------ ------- ------ ------- ------ -------
Non-interest bearing
checking $151,998 14.0% $152,828 14.0% $140,845 15.0%
Interest bearing
checking 119,048 11.0% 121,388 11.2% 106,292 11.3%
------- ---- ------- ---- ------- ----
Total checking 271,046 25.0% 274,216 25.2% 247,137 26.3%
Savings 93,329 8.6% 93,672 8.6% 88,242 9.4%
Money market 330,345 30.4% 287,618 26.4% 247,392 26.4%
Time deposits 390,191 36.0% 433,545 39.8% 355,111 37.9%
------- ---- ------- ---- ------- ----
Total deposits $1,084,911 100.0% $1,089,051 100.0% $937,882 100.0%
========== ===== ========== ===== ======== ======
Alliance Financial Corporation
Asset Quality (Unaudited)
The following table represents a summary of delinquent loans and leases
grouped by the number of days delinquent at the dates indicated:
Delinquent loans and
leases September 30, June 30, December 31,
2009 2009 2008
------------- ------------- -------------
$ %(1) $ %(1) $ %(1)
----- ----- ----- ----- ----- -----
(Dollars in thousands)
30 days past due $9,993 1.08% $8,990 0.97% $11,124 1.22%
60 days past due 2,141 0.23% 3,788 0.41% 4,736 0.52%
90 days past due and still
accruing 127 0.01% 23 -% 126 0.01%
Non-accrual 10,084 1.10% 7,588 0.81% 4,352 0.48%
------ ---- ----- ---- ----- ----
Total $22,345 2.42% $20,389 2.19% $20,338 2.23%
======= ==== ======= ==== ======= ====
(1) As a percentage of total loans and leases, excluding deferred costs
The following table represents information concerning the aggregate amount
of non-performing assets:
Non-performing assets
September 30, June 30, December 31,
2009 2009 2008
------ ------ -------
(Dollars in thousands)
Non-accruing loans and leases
Residential real estate loans $2,878 $1,925 $1,506
Commercial loans 4,926 4,400 1,997
Leases 1,976 995 595
Indirect loans 116 82 101
Other consumer loans 188 186 153
--- --- ---
Total non-accruing loans
and leases 10,084 7,588 4,352
Accruing loans and leases
delinquent 90 days or more 127 23 126
--- -- ---
Total non-performing loans
and leases 10,211 7,611 4,478
Other real estate and
repossessed assets 340 373 657
--- --- ---
Total non-performing assets $10,551 $7,984 $5,135
======= ====== ======
The following table summarizes changes in the allowance for credit losses
arising from loans and leases charged off, recoveries on loans and leases
previously charged off and additions to the allowance which have been
charged to expense:
Three months ended Nine months ended
Allowance for credit losses September 30, September 30,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
(Dollars in thousands)
Allowance for credit losses,
beginning of period $9,859 $8,651 $9,161 $8,426
Loans and leases charged-off (1,292) (805) (4,991) (3,762)
Recoveries of loans and leases
previously charged-off 314 180 1,161 685
--- --- ----- ---
Net loans and leases charged-off (978) (625) (3,830) (3,077)
Provision for credit losses 1,125 849 4,675 3,526
----- --- ----- -----
Allowance for credit losses,
end of period $10,006 $8,875 $10,006 $8,875
======= ====== ======= ======
Alliance Financial Corporation
Consolidated Financial Information (Unaudited)
At or for At or for
the three months the nine months
Key Ratios ended September 30, ended September 30,
---------- ------------------- -------------------
2009 2008 2009 2008
---- ---- ---- ----
Return on average assets 0.82% 0.92% 0.65% 0.81%
Return on average equity 9.68% 10.42% 6.84% 9.17%
Return on average common equity 9.68% 10.42% 7.55% 9.17%
Return on average tangible common
equity 14.85% 16.89% 11.69% 13.98%
Yield on earning assets 5.12% 5.85% 5.18% 5.95%
Cost of funds 1.72% 2.75% 1.93% 2.97%
Net interest margin
(tax equivalent)(1) 3.62% 3.43% 3.51% 3.32%
Non-interest income to total
income(2) 29.78% 34.89% 30.31% 35.64%
Efficiency ratio(3) 68.17% 67.28% 69.62% 67.76%
Common dividend payout ratio(4) 43.75% 40.00% 53.69% 42.77%
Net loans and leases charged-off
to average loans and leases,
annualized 0.42% 0.28% 0.55% 0.46%
Provision for credit losses to
average loans and leases,
annualized 0.49% 0.38% 0.68% 0.52%
Allowance for credit losses to
total loans and leases 1.08% 0.97% n/a n/a
Allowance for credit losses to
non-performing loans and leases 98.0% 187.9% n/a n/a
Non-performing loans and leases
to total loans and leases 1.10% 0.52% n/a n/a
Non-performing assets to total
assets 0.72% 0.37% n/a n/a
(1) Tax equivalent net interest income divided by average earning assets
(2) Non-interest income (excluding net realized gains and losses on
securities and other non-recurring gains and losses) divided by the
sum of net interest income and non-interest income (as adjusted)
(3) Non-interest expense divided by the sum of net interest income and
non-interest income (as adjusted)
(4) Cash dividends declared per share divided by diluted earnings per
share
Alliance Financial Corporation
Selected Quarterly Financial Data (Unaudited)
2009 2008
--------------------------- -----------------
Third Second First Fourth Third
----- ------ ----- ------ -----
(Dollars in thousands, except share and per share data)
Interest income $16,129 $15,875 $15,889 $16,699 $16,734
Interest expense 4,899 5,253 5,844 6,855 7,155
----- ----- ----- ----- -----
Net interest
income 11,230 10,622 10,045 9,844 9,579
Provision for
credit losses 1,125 1,800 1,750 1,976 849
----- ----- ----- ----- ---
Net interest
income after
provision for
credit losses 10,105 8,822 8,295 7,868 8,730
Other
non-interest
income 4,762 4,766 5,360 4,750 5,134
Other
non-interest
expense 10,900 10,899 10,067 10,051 9,899
------ ------ ------ ------ -----
Income before
income tax
expense 3,967 2,689 3,588 2,567 3,965
Income tax
expense 1,009 653 631 183 955
----- --- --- --- ---
Net income $2,958 $2,036 $2,957 $2,384 $3,010
====== ====== ====== ====== ======
Net income
available to
common
shareholders $2,958 $1,310 $2,599 $2,337 $3,010
====== ====== ====== ====== ======
Stock and related
per share data
Basic earnings
per common share $0.64 $0.29 $0.57 $0.51 $0.65
Diluted earnings
per common share $0.64 $0.28 $0.57 $0.51 $0.65
Basic weighted
average common
shares
outstanding 4,521,331 4,495,439 4,492,810 4,492,810 4,545,357
Diluted weighted
average common
shares
outstanding 4,563,168 4,518,827 4,495,787 4,510,483 4,564,904
Cash dividends
paid per common
share $0.28 $0.26 $0.26 $0.26 $0.26
Common dividend
payout ratio(1) 43.75% 92.86% 45.61% 50.98% 40.00%
Common book value $27.04 $26.02 $26.04 $25.67 $25.14
Tangible common
book value(2) $17.84 $16.72 $16.63 $16.15 $15.54
Capital Ratios(6)
Holding Company
---------------
Tier 1 leverage
ratio 7.42% 7.30% 9.52% 9.59% 7.58%
Tier 1 risk
based capital 11.53% 11.13% 14.17% 14.05% 10.72%
Total risk based
capital 12.64% 12.22% 15.26% 15.08% 11.71%
Tangible common
equity to
tangible assets 5.82% 5.50% 5.61% 5.63% 5.46%
Bank
----
Tier 1 leverage
ratio 6.95% 6.87% 9.01% 8.97% 7.25%
Tier 1 risk
based capital 10.84% 10.51% 13.47% 13.15% 10.28%
Total risk based
capital 11.97% 11.61% 14.57% 14.19% 11.27%
Selected ratios
Return on
average assets 0.82% 0.58% 0.86% 0.71% 0.92%
Return on
average equity 9.68% 5.82% 8.07% 7.67% 10.42%
Return on
average common
equity 9.68% 4.33% 8.69% 7.74% 10.42%
Return on
average
tangible common
equity 14.85% 6.71% 13.65% 12.14% 16.89%
Yield on earning
assets 5.12% 5.13% 5.30% 5.69% 5.85%
Cost of funds 1.72% 1.88% 2.20% 2.58% 2.75%
Net interest
margin (tax
equivalent) (3) 3.62% 3.50% 3.42% 3.43% 3.43%
Non-interest
income to total
income (4) 29.78% 30.97% 30.19% 32.55% 34.89%
Efficiency
ratio (5) 68.17% 70.83% 69.96% 68.87% 67.28%
Asset quality
ratios
Net loans and
leases charged
off to average
loans and
leases,
annualized 0.42% 0.71% 0.53% 0.74% 0.28%
Provision for
credit losses
to average loans 0.49% 0.77% 0.77% 0.87% 0.38%
and leases,
annualized
Allowance for
credit losses
to total loans
and leases 1.08% 1.05% 1.05% 1.01% 0.97%
Allowance for
credit losses
to non-performing
loans and leases 98.0% 129.5% 164.0% 204.6% 187.9%
Non-performing
loans and leases
to total loans
and leases 1.10% 0.81% 0.64% 0.49% 0.52%
Non-performing
assets to total
assets 0.72% 0.55% 0.48% 0.38% 0.37%
(1) Cash dividends declared per common share divided by diluted earnings
per common share
(2) Common shareholders' equity less goodwill and intangible assets
divided by common shares outstanding
(3) Tax equivalent net interest income divided by average earning assets
(4) Non-interest income (net of realized gains and losses on securities
and other non-recurring items) divided by the sum of net interest
income and non-interest income (as adjusted)
(5) Non-interest expense divided by the sum of net interest income and
non-interest income (as adjusted)
(6) The changes in the Company's and the Bank's Tier 1 and risk based
capital ratios in the fourth quarter of 2008 and the second quarter of
2009 resulted from the participation and subsequent withdrawal from
the U.S. Treasury's Capital Purchase Program.
Related Headlines
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