Alliance Financial Announces Fourth Quarter and Full Year 2006 Earnings19 February 2007
Alliance Financial Corporation ("Alliance", or the "Company")(Nasdaq: ALNC), the holding company for Alliance Bank, N.A., announced today its net income for the quarter and year ended December 31, 2006. Net income was $2.1 million, or $0.43 per diluted share in the fourth quarter, compared to $1.8 million, or $0.48 per diluted share in the year-ago quarter. Net income in 2006 was $7.3 million or $1.88 per diluted share, compared to $7.5 million or $2.05 per share in 2005.
The decline in diluted earnings per share for the fourth quarter and year ended December 31, 2006 compared with the year-ago periods resulted primarily from the issuance of 1,292,000 shares of common stock in connection with the acquisition of Bridge Street Financial, Inc. ("Bridge Street"), a $219.3 million bank holding company, on October 6, 2006. Much of the earnings enhancement in the fourth quarter attributable to the acquisition was offset by acquisition and integration expenses related to the transaction, which totaled approximately $1.0 million before taxes.
Net income for 2006 was most impacted by non-interest income growth of $3.6 million compared with 2005, resulting largely from our expanded trust business and higher service charges, and by a $2.6 million increase in non- interest expenses due in large part to the acquisition of Bridge Street and the associated one-time and ongoing expenses. The provision for loan and lease losses increased $2.3 million in 2006 compared with 2005 due to the growth and changing mix of our loan and lease portfolio and to a higher level of charge-offs, including two relationship totaling $951,000 which were charged off in the first half of 2006.
Jack H. Webb, President and CEO of Alliance said, "The acquisition of Bridge Street and successful integration of its branch network and systems was a significant milestone for our franchise. With $1.3 billion in assets and an additional 1.3 million shares of Alliance common stock outstanding as a result of the acquisition, this strategic transaction, which is expected to be accretive to earnings per share in 2007, raises the profile of Alliance in our market area and in the investment community. Alliance is well-positioned, through this acquisition, in combination with our de-novo branch expansion strategy which resulted in six new branches in the Syracuse area over the last three years, to execute on our strategic growth objectives for 2007 and beyond."
Total assets were $1.3 billion at December 31, 2006, an increase of $229.7 million from September 30, 2006, and up $286.9 million from December 31, 2005. The following table summarizes the significant assets acquired and liabilities assumed in the acquisition of Bridge Street (amounts are estimated fair values in thousands):
Assets:
Securities $38,467
Loans (gross) 142,627
Allowance for loan losses (1,297)
Premises and equipment 8,227
Bank-owned life insurance 6,429
Goodwill 33,456
Intangible assets 6,039
Liabilities:
Interest-bearing deposits 8,300
Non-interest-bearing deposits 35,007
Borrowings 23,707
Total loans and leases (net of unearned income) increased $156.7 million in the fourth quarter, and were up $228.5 million compared with December 31, 2005, with most of the growth in the fourth quarter attributable to loans acquired in the Bridge Street transaction.
The company's commercial lease portfolio (net of unearned income) increased $18.9 million in the fourth quarter and was up $66.2 million from December 31, 2005 as a result of our continuing focus on developing this business line. Net leases totaled $131.3 million at the end of 2006, which represents 14.9% of total loans and leases, compared with $112.5 million (15.5% of total loans and leases), and $65.2 million (10.0% of total loans and leases) at September 30, 2006 and December 31, 2005, respectively.
Webb added, "We are very pleased with the growth of our commercial lease portfolio in 2006. This is an important component of our strategic growth objectives and we will seek continued growth in this higher-yielding portfolio in 2007 to supplement our traditional commercial lending business."
Commercial loans increased $57.8 million during the fourth quarter ($64.7 million acquired form Bridge Street, net of $2.4 million of loans sold in December) and were $223.5 million at December 31, 2006 or 25.3% of total loans and leases, compared with $165.7 million (22.8% of total loans and leases) at September 30, 2006 and $162.4 million (24.8% of total loans and leases) at December 31, 2005. Without the effect of loans acquired from Bridge Street, we experienced a decrease in commercial loans of $6.9 million in the fourth quarter, due primarily to scheduled loan amortization and lower line of credit utilization by certain large commercial customers at year-end.
Residential mortgages increased $57.1 million ($57.9 acquired from Bridge Street) in the fourth quarter, and were $253.8 million or 28.8% of total loans and leases at December 31, 2006, compared with $196.7 million (27.1% of total loans and leases) at September 30, 2006 and $186.6 million (28.5% of total loans and leases) at December 31, 2005.
Total deposits were $935.6 million at December 31, 2006, an increase of $153.0 million and $196.5 million from September 30, 2006 and December 31, 2005, respectively. Checking accounts increased $27.9 million and $51.0 million ($39.6 million acquired from Bridge Street) in the quarter and year ended December 31, 2006, respectively. Increases in commercial checking deposits in 2006, due in large part to the success of our ongoing business development efforts, were partially offset by a $10.7 million fourth quarter decrease in municipal checking accounts due to normal seasonal activity. Savings and money market accounts increased $64.1 million during the fourth quarter of 2006, and were up $42.9 million ($79.2 million acquired form Bridge Street) for the year ended December 31, 2006. Time accounts increased $61.0 million and $102.6 million ($49.6 million acquired form Bridge Street) in the quarter and year ended December 31, 2006, respectively, in part mirroring the trends in savings and money market accounts, as customers have favored higher rate, short-term time accounts over lower rate savings and money market accounts. We expect the intense competition for deposits in our market area will continue for the foreseeable future, which, along with the significant difference between higher yielding short term time account rates and savings and money market rates, may result in a continuing migration of savings and money market accounts to higher yielding time accounts.
In September 2006, a wholly-owned subsidiary trust of Alliance completed the sale of $15.0 million of trust preferred securities, the proceeds of which were used to purchase junior subordinated notes issued by Alliance. Most of the proceeds of this issuance were used by Alliance to fund the cash portion of the Bridge Street acquisition.
Shareholders' equity was $109.5 million at December 31, 2006, compared with $69.6 million at December 31, 2005. Shareholders' equity was increased by $38.1 million from the issuance of common stock (862,856 new shares and 428,956 shares from treasury) in connection with the acquisition of Bridge Street, and by net income for 2006 of $7.3 million. Shareholders' equity was reduced by dividends declared in 2006 totaling $3.4 million, and by the repurchase of 94,482 shares of Alliance common stock in the fourth quarter at a total cost of $2.9 million. There remains 31,830 shares available for repurchase under the previously announced program. Shareholders' equity was further reduced by $994,000 (net of deferred taxes) upon the adoption by the Company of Statement of Financial Accounting Standards No. 158 "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans -- an amendment of FASB Statements No. 87, 88, 106, and 132(R)" as of December 31, 2006. The adoption of this statement had no effect on our regulatory capital ratios.
Nonperforming assets increased $1.5 million in the fourth quarter of 2006, to $2.6 million or 0.21% of total assets, compared with $1.1 million or 0.11% of total assets at September 30, 2006 and $1.6 million or 0.17% of total assets at December 31, 2005. The increase in nonperforming assets in the fourth quarter resulted almost entirely from nonperforming assets acquired from Bridge Street. The largest nonperforming loan at year-end was an $855,000 commercial line of credit that we acquired from Bridge Street. Payments are being made in accordance with the contractual terms of the agreement, however the facility, which is secured by a first-lien on accounts receivable, has been placed on non-accrual status while the terms of an extension of the facility are negotiated. A number of small relationships make up the remaining balance of nonperforming loans, the largest of which is a $119,000 commercial loan.
The provision for loan and lease losses was $510,000 and $2.5 million in the quarter and year ended December 31, 2006, respectively, compared with $178,000 and $144,000 in the year-ago periods, respectively. Net charge-offs were $180,000 and $1.7 million in the three months and year ended December 31, 2006, respectively, compared with $379,000 and $451,000 in the year-ago periods, respectively. The increased level of provisions in 2006 is a reflection of the growth and changing mix of our loan and lease portfolio and higher charge-offs. Two commercial relationships comprised approximately 40% of total charge-offs in 2006, with both borrowers experiencing significant unexpected deterioration in their businesses earlier in the year.
The allowance for loan losses was $7.0 million at December 31, 2006, compared with $5.4 million at September 30, 2006 and $5.0 million at December 31, 2005. We acquired $1.3 million of loan loss allowances in the fourth quarter from Bridge Street. The ratio of the allowance for loan and lease losses to total loans and leases was 0.80% at December 31, 2006, compared with 0.74% at September 30, 2006 and 0.77% at December 31, 2005. The ratio of the allowance for loan and lease losses to nonperforming loans and leases was 266.4% at December 31, 2006, compared with 495.8% at September 30, 2006 and 304.7% at December 31, 2005.
Net interest income totaled $8.2 million in the three months ended December 31, 2006, an increase of $1.3 million compared with the fourth quarter of 2005. Much of the increase resulted from the impact of the net assets acquired from Bridge Street, which offset the effect of the net interest margin compression we experienced in 2006. Growth in average earning assets of $219.1 million in the fourth quarter compared with the year-ago quarter partially offset the effect of an 11 basis point decrease in the Company's net interest margin compared with the year-ago quarter.
Net interest income totaled $27.8 million for the year ended December 31, 2006, compared to $27.1 million in 2005, reflecting the favorable impact of the net interest income resulting from the Bridge Street acquisition, offsetting an otherwise declining trend in net interest income resulting primarily from net interest margin compression during 2006.
Higher short-term interest rates and the persistently flat yield curve and periods of yield curve inversions over the past year, along with highly competitive deposit pricing negatively impacted the company's net interest margin during the quarter and year ended December 31, 2006. An increase in our earning asset yield of 64 basis points in the fourth quarter of 2006 compared with the same quarter in 2005 was offset by an increase in our cost of funds of 85 basis points over the same period. The net interest margin on a tax-equivalent basis was 3.08% in the fourth quarter of 2006, compared with 3.19% in the fourth quarter of 2005 and 2.91% in the third quarter of 2006. Our net interest margin increased on a linked quarter basis in the fourth quarter due primarily to the higher net interest margin on the net assets acquired from Bridge Street compared to Alliance's pre-acquisition margin. Our tax-equivalent net interest margin was 3.02% in 2006, compared with 3.28% in 2005.
We expect that the highly competitive deposit pricing in our markets, along with the migration of savings and money market deposits to higher rate short-term time accounts, will continue for the foreseeable future. These conditions, along with the current inverted yield curve, will continue to pressure our net interest margin in coming quarters.
Non-interest income was $5.5 million in the fourth quarter of 2006, which was an increase of $1.6 million or 40.4% compared with $3.9 million in the fourth quarter of 2005. Non-interest income was $17.7 million in 2006, which was an increase of $3.6 million or 25.2% compared with $14.2 million in 2005. Increases in service charges on deposit accounts, income from bank-owned life insurance, and card-related fees in the fourth quarter resulted largely from the Bridge Street acquisition. Also contributing to the increase in service charges on deposit accounts, which accounted for approximately 23% and 38% of the increase in non-interest income in the quarter and year ended December 31, 2006, respectively, were changes to certain fees in the fourth quarter of 2005. Card related fees increased $184,000 and $365,000 in the quarter and year ended December 31, 2006 compared with the year ago periods due primarily to higher customer debit card utilization. Non-interest income from the insurance subsidiary acquired in the Bridge Street transaction was $615,000 in the fourth quarter, or approximately 39% and 17% of the total increase in non- interest income in the fourth quarter and full year 2006, respectively. The full-year 2006 increase in trust and brokerage income of $1.0 million or 13.1% compared with 2005 reflects the less than full year impact in 2005 of the acquisition of approximately $560 million of trust assets under management from HSBC, USA N.A., which closed in February 2005. Rental income from leases decreased 32.8% in the year ended December 31, 2006 compared with 2005 due to the declining balance in our operating lease portfolio. We ceased originating operating leases in early 2004, and as a result, rental income declined steadily during 2006 and will cease in early 2007 (along with related depreciation expense on the leased assets). Other non-interest income increased $316,000 and $548,000 in the quarter and year ended December 31, 2006 compared with the same periods in 2005. Approximately $86,000 of the fourth quarter increase and $168,000 of the full year increase resulted from non-recurring items. The balance of the fourth quarter and full year increases resulted primarily from increases in mortgage servicing fees and miscellaneous customer fees. Non-interest income (excluding loss on sales of securities) comprised 40.1% and 38.9% of revenue in the quarter and year ended December 31, 2006 up from 36.3% and 34.4% in the year-ago periods.
Non-interest expenses were $10.8 million in the quarter ended December 31, 2006, which was an increase of $2.3 million or 27.1% compared to $8.5 million in the fourth quarter of 2005. Non-interest expenses were $34.0 million in the year ended December 31, 2006, up $2.6 million or 8.3% compared with $31.4 million in 2005. The increases in non-interest expenses in the quarter and full-year periods were due in large part to the acquisition of Bridge Street. Non-recurring merger and conversion expenses totaled approximately $1.0 million in the fourth quarter of 2006, and were primarily in professional fees, salaries and benefits, communications expense, stationary and supplies and marketing expense. There were no such merger related expenses in the fourth quarter of 2005. Salaries and benefits increased $243,000 or 5.2% in the fourth quarter of 2006 compared with the year-ago quarter primarily due to salaries and benefits for employees of Bridge Street, and a $148,000 increase in incentive compensation expense related to the acquisition, partially offset by efficiencies gained through the implementation of a new staffing model in the first quarter of 2006 and deferrals of a portion of salaries and benefits costs associated with our lending activities in accordance with generally accepted accounting principles. Occupancy and equipment expense increased $528,000 or 37.6% and $714,000 or 12.4% for the fourth quarter and year ended December 31, 2006, respectively due to a writedown of $174,000 on bank-owned property reclassified to assets held for sale in the fourth quarter and to expenses associated with properties acquired from Bridge Street. Amortization of intangible assets increased $266,000 in the fourth quarter of 2006 compared with 2005 as a result of the Bridge Street acquisition. Increases in other operating expenses for the fourth quarter ($97,000 increase) and full year ($694,000 increase) resulted primarily from higher postage, courier, loan origination costs and ATM processing fees due primarily to increases in customer account and transaction volumes from organic growth and customers acquired from Bridge Street. In addition, director fees increased $170,000 for the fourth quarter and $231,000 for the year due to an increase in the number of meetings in 2006 primarily related to the acquisition, and an increase in the value of directors deferred compensation which is tied to the book value of Alliance common stock.
Alliance Financial Corporation is an independent financial holding company with Alliance bank, N.A. as a subsidiary that provides banking, commercial leasing, and trust and investment services through 29 office locations in Cortland, Madison, Oneida, Onondaga and Oswego counties. The Bank also operates a trust administration center in Buffalo, NY and offers lease financing through its wholly-owned subsidiary, Alliance Leasing, Inc. Alliance also operates a wholly-owned multi-line insurance subsidiary, 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 reduce margins; changes in the regulatory environment; general economic conditions, either nationally or regionally, are less favorable than expected, resulting, among other things, 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; the possibility that our trust business will fail to perform as currently anticipated; the possibility that we may fail to realize the anticipated benefits of the acquisition of Bridge Street; 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 Balance Sheets (Unaudited)
December 31, December 31,
2006 2005
Assets (Dollars in thousands, except share
and per share data)
Cash and due from banks $ 27,398 $ 17,972
Federal funds sold - 4,906
Securities available-for-sale 256,752 261,368
Federal Home Loan Bank of NY ("FHLB") Stock 7,235 6,126
Total loans and leases, net of
unearned income 882,566 654,086
Less allowance for loan and lease losses 7,029 4,960
Net loans and leases 875,537 649,126
Premises and equipment, net 20,125 13,032
Accrued interest receivable 4,605 3,915
Bank-owned life insurance 16,449 9,565
Assets held-for-sale 2,367 -
Goodwill 33,456 -
Intangible assets, net 14,912 9,671
Other assets 8,509 4,740
Total assets $1,267,345 $ 980,421
Liabilities and shareholders' equity
Liabilities:
Deposits:
Non-interest bearing 129,575 91,883
Interest bearing 806,021 647,235
Total deposits 935,596 739,118
Borrowings(1) 179,650 150,429
Accrued interest payable 2,651 2,261
Other liabilities 14,168 8,732
Junior subordinated obligations
issued to unconsolidated subsidiary trusts 25,774 10,310
Total liabilities 1,157,839 910,850
Shareholders' equity:
Common stock 4,895 3,979
Surplus 40,420 11,185
Unamortized value of restricted stock (1,434) (1,453)
Undivided profits 70,658 66,740
Accumulated other comprehensive income (2,122) (1,700)
Treasury stock (2,911) (9,180)
Total shareholders' equity 109,506 69,571
Total liabilities and shareholders' $1,267,345 $ 980,421
Common shares outstanding 4,800,512 3,565,012
Book value per share $ 22.81 $ 19.52
Tangible book value per share $ 12.74 $ 16.80
Trust assets under management(2) $ 927,674 $ 862,504
(1) Includes mortgagors' escrow funds
(2) Not included in assets of Alliance Financial Corporation
Alliance Financial Corporation
Consolidated Average Balances (Unaudited)
Three months ended Twelve months ended
December 31, December 31,
2006 2005 2006 2005
Earning assets: (Dollars in thousands)
Federal funds sold and
interest bearing deposits $906 $1,941 $2,450 $4,094
Securities(1) 270,634 274,958 260,644 290,034
Loans and leases
receivable:
Residential real estate
loans 250,545 184,524 205,527 178,669
Commercial loans 222,282 163,100 177,868 161,066
Leases, net of unearned
income 121,069 56,570 90,504 36,269
Indirect loans 183,538 171,219 179,994 147,364
Other consumer loans 90,225 67,759 73,355 65,744
Loans and leases receivable,
net of unearned income 867,659 643,172 727,248 589,112
Total earning assets 1,139,199 920,071 990,342 883,240
Non-earning assets 102,124 54,898 64,531 57,124
Total assets $1,241,323 $974,969 $1,054,873 $940,364
Interest bearing liabilities:
Interest bearing checking
accounts $93,973 $81,321 $87,221 $80,463
Savings accounts 84,439 55,813 62,412 59,876
Money market accounts 194,743 186,273 176,811 182,905
Time deposits 438,267 329,260 378,402 297,040
Borrowings(2) 163,438 142,357 145,140 149,289
Junior subordinated
obligations issued to
unconsolidated trusts 25,774 10,310 14,606 10,310
Total interest bearing
liabilities 1,000,634 805,334 864,592 779,883
Non-interest bearing
deposits 124,753 88,201 101,266 80,757
Other non-interest bearing
liabilities 15,844 10,690 11,239 9,880
Total liabilities 1,141,231 904,225 977,097 870,520
Shareholders' equity 100,092 70,744 77,776 69,844
Total liabilities and
shareholders'
equity $1,241,323 $974,969 $1,054,873 $940,364
(1) The amounts shown are amortized cost and include FHLB stock.
(2) Includes mortgagors' escrow funds.
Alliance Financial Corporation
Loan and Deposit Composition (Unaudited)
December 31, September 30, December 31,
2006 2006 2005
Amount Percent Amount Percent Amount Percent
Loan portfolio composition (Dollars in thousands)
Residential real
estate loans $253,825 28.8% $196,741 27.1% $186,550 28.5%
Commercial loans 223,527 25.3% 165,709 22.8% 162,350 24.8%
Leases, net of
unearned income 131,338 14.9% 112,471 15.5% 65,172 10.0%
Indirect loans 182,528 20.7% 184,745 25.4% 172,113 26.3%
Other consumer
loans 91,348 10.3% 66,248 9.2% 67,901 10.4%
Total loans
and leases $882,566 100.0% $725,914 100.0% $654,086 100.0%
Allowance for
loan and lease
losses (7,029) (5,402) (4,960)
Net loans and
leases $875,537 $720,512 $649,126
Deposit composition
Non-interest
bearing checking $129,575 13.9% $98,781 12.6% $91,883 12.4%
Interest bearing
checking 93,817 10.0% 96,715 12.4% 80,536 10.9%
Total checking 223,392 23.9% 195,496 25.0% 172,419 23.3%
Savings 85,888 9.2% 52,052 6.7% 55,214 7.5%
Money market 189,143 20.2% 158,883 20.3% 176,894 23.9%
Time deposits 437,173 46.7% 376,127 48.0% 334,591 45.3%
Total deposits $935,596 100.0% $782,558 100.0% $739,118 100.0%
Alliance Financial Corporation
Consolidated Statements of Income (Unaudited)
Three months ended Twelve months ended
December 31, December 31,
2006 2005 2006 2005
(In thousands, except share and per share data)
Interest income:
Loans, including fees $14,523 $9,724 $46,790 $34,960
Federal funds sold and
interest bearing deposits 27 19 148 129
Securities 2,883 2,841 10,835 11,336
Total interest income 17,433 12,584 57,773 46,425
Interest expense:
Deposits:
Savings accounts 114 74 339 307
Money market accounts 1,517 1,181 5,141 3,955
Time accounts 5,031 2,755 16,161 8,988
NOW accounts 183 79 519 250
Total 6,845 4,089 22,160 13,500
Borrowings:
Repurchase agreements 711 554 2,591 2,297
FHLB advances 1,188 917 4,052 2,895
Mortgagors' escrow funds 4 - 4 -
1,903 1,471 6,647 5,192
Junior subordinated
obligations 500 183 1,144 644
Total interest expense 9,248 5,743 29,951 19,336
Net interest income 8,185 6,841 27,822 27,089
Provision for loan and
lease losses 510 178 2,477 144
Net interest income after
provision for loan and
lease losses 7,675 6,663 25,345 26,945
Non-interest income:
Trust and brokerage income 2,258 2,246 8,895 7,864
Insurance agency income 615 - 615 -
Service charges on deposit
accounts 1,378 1,012 4,316 2,957
(Loss) gain on sale of
securities available
for sale (2) 3 (2) (19)
Gain on the sale of loans 56 14 126 163
Income from bank-owned
life insurance 155 101 455 402
Card-related fees 440 256 1,291 926
Rental income from leases 196 203 797 1,186
Other non-interest income 380 64 1,225 677
Total non-interest income 5,476 3,899 17,718 14,156
Non-interest expense:
Salaries and employee
benefits 4,885 4,642 16,607 17,150
Occupancy and equipment
expense 1,932 1,404 6,460 5,746
Communication expense 337 225 744 603
Stationery and supplies
expense 309 164 645 514
Marketing expense 327 193 1,128 921
Amortization of intangible
assets 392 126 770 418
Professional fees 1,156 382 3,239 2,385
Other operating expense 1,418 1,321 4,397 3,703
Total non-interest expense 10,756 8,457 33,990 31,440
Income before income tax
expense 2,395 2,105 9,073 9,661
Income tax expense 315 342 1,762 2,154
Net income $2,080 $1,763 $7,311 $7,507
Share and Per Share Data
Basic average shares
outstanding 4,720,384 3,592,579 3,804,711 3,593,864
Diluted average shares
outstanding 4,801,544 3,664,305 3,874,484 3,664,684
Basic earnings per share $0.44 $0.49 $1.92 $2.09
Diluted earnings per share $0.43 $0.48 $1.88 $2.05
Cash dividends declared $0.22 $0.21 $0.88 $0.84
Alliance Financial Corporation
Consolidated Financial Information (Unaudited)
($ in thousands)
December 31, September 30, December 31,
2006 2006 2005
Asset quality
Non-accruing loans and leases:
Residential real estate loans $298 $9 $11
Commercial loans 1,248 619 1,104
Leases 99 99 -
Indirect loans 63 70 74
Other consumer loans 141 64 169
Total non-accruing loans
and leases 1,849 861 1,358
Accruing loans and leases
delinquent 90 days or more 790 229 270
Total non-performing
loans and leases 2,639 1,090 1,628
Other real estate and repossessed
assets - 20 6
Total non-performing assets $2,639 $1,110 $1,634
Allowance for loan and lease losses Three months Twelve months
ended ended
December 31, December 31,
2006 2005 2006 2005
Allowance for loan and lease
losses, beginning of period $5,402 $5,161 $4,960 $5,267
Loans and leases charged-off (360) (500) (2,390) (1,088)
Recoveries of loans and leases
previously charged-off 180 121 685 637
Net loans and leases charged-off (180) (379) (1,705) (451)
Provision for loan and lease losses 510 178 2,477 144
Allowance acquired from Bridge
Street Financial 1,297 - 1,297 -
Allowance for loan and lease
losses, end of period $7,029 $4,960 $7,029 $4,960
Alliance Financial Corporation
Consolidated Financial Information (Unaudited)
At or for the At or for the
three months twelve months
ended December 31, ended December 31,
Key Ratios 2006 2005 2006 2005
Return on average assets 0.67% 0.72% 0.69% 0.80%
Return on average equity 8.31% 9.97% 9.40% 10.75%
Yield on earning assets 6.33% 5.69% 6.05% 5.47%
Cost of funds 3.70% 2.85% 3.46% 2.48%
Net interest margin (tax equivalent) 3.08% 3.19% 3.02% 3.28%
Efficiency ratio 78.74% 78.74% 74.64% 76.22%
Net loans and leases charged-off to
average loans and leases, annualized 0.08% 0.24% 0.23% 0.08%
Provision for loan and lease losses
to average loans and leases,
annualized 0.24% 0.11% 0.34% 0.02%
Allowance for loan and lease losses
to total loans and leases 0.80% 0.77% 0.80% 0.77%
Allowance for loan and lease losses
to nonperforming loans and
leases 266.4% 304.7% 266.4% 304.7%
Nonperforming loans and leases to
total loans and leases 0.30% 0.25% 0.30% 0.25%
Nonperforming assets to total assets 0.21% 0.17% 0.21% 0.17%
Alliance Financial Corporation
Selected Quarterly Financial Data (Unaudited)
2006 2005
Fourth Third Second First Fourth
(Dollars in thousands, except share and per share data)
Interest income $17,433 $14,066 $13,565 $12,709 $12,584
Interest expense 9,248 7,604 6,925 6,174 5,743
Net interest income 8,185 6,462 6,640 6,535 6,841
Provision for loan and lease
losses 510 550 417 1,000 178
Net interest income after
provision for loan and
leases losses 7,675 5,912 6,223 5,535 6,663
Other non-interest income 5,476 4,170 4,041 4,031 3,899
Other non-interest expense 10,756 7,688 7,723 7,823 8,457
Income before income tax
expense 2,395 2,394 2,541 1,743 2,105
Income tax expense 315 575 569 303 342
Net income $2,080 $1,819 $1,972 $1,440 $1,763
Basic earnings per share $0.44 $0.52 $0.55 $0.40 $0.49
Diluted earnings per share $0.43 $0.51 $0.54 $0.40 $0.48
Basic weighted average
shares outstanding 4,720,384 3,503,851 3,569,033 3,566,228 3,592,579
Diluted weighted
average shares
outstanding 4,801,544 3,585,204 3,638,442 3,639,637 3,664,305
Dividends paid per share $0.22 $0.22 $0.22 $0.22 $0.21
Net interest margin (tax
equivalent) 3.08% 2.91% 3.05% 3.04% 3.19%
Return on average assets 0.67% 0.72% 0.80% 0.59% 0.72%
Return on average equity 8.31% 10.27% 11.30% 8.18% 9.97%
Efficiency ratio 78.7% 72.3% 72.3% 74.0% 78.7%
Source: prnewswire
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