Alliance Bancorp Inc of Pennsylvania Reports Operating Results (10-Q)

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Nov 12, 2010
Alliance Bancorp Inc of Pennsylvania (ALLB, Financial) filed Quarterly Report for the period ended 2010-09-30.

Alliance Bancorp Inc Of Pennsylvania has a market cap of $50.2 million; its shares were traded at around $7.5 with a P/E ratio of 68.1 and P/S ratio of 2.3. The dividend yield of Alliance Bancorp Inc Of Pennsylvania stocks is 1.6%.ALLB is in the portfolios of Chuck Royce of Royce& Associates.

Highlight of Business Operations:

Stockholders equity increased $29,000 to $48.5 million as of September 30, 2010 compared to $48.4 million at December 31, 2009. The increase was primarily due to a $183,000 decrease in accumulated other comprehensive loss and a $227,000 increase in retained earnings. The increase was partially offset by a $437,000 increase in treasury stock. Beginning in January of 2009, the Company commenced a 292,612 share repurchase program and has repurchased 281,200 shares at an average price of $8.35 per share through September 30, 2010.

Nonperforming assets, which consist of nonaccruing loans, accruing loans 90 days or more delinquent and other real estate owned (OREO) (which includes real estate acquired through, or in lieu of, foreclosure) increased $5.8 million to $16.6 million or 3.81% of total assets at September 30, 2010 from $10.8 million or 2.33% of total assets at December 31, 2009. This increase was primarily due to the placement of a $6.1 million land and development loan for a mixed use commercial real estate project located in Bradenton, Florida, as nonaccruing at March 31, 2010. This resulted from a lack of sales activity combined with a decline in the liquidity of the borrowers and their inability to access additional funds. The borrowers have not made payment as required by an extension and forbearance agreement entered into in June 2010. Given the borrowers failure to make the scheduled payment in the quarter ended September 30, 2010, as required by the extension and forbearance agreement, and the inability of the borrower to enter into agreements with potential buyers of any of the collateral parcels securing the loan, the Companys considering all of its options with respect to this loan, including the possibility of foreclosure. At September 30, 2010, the $16.6 million of nonperforming assets consisted of $1.8 million of accruing loans 90 days or more delinquent, $11.6 million of nonaccrual loans, and $3.1 million in OREO. At September 30, 2010, the $11.6 million of nonaccrual loans consisted of one single family real estate loan in the amount of $75,000, ten commercial real estate loans totaling $1.6 million, two real estate construction loans totaling $9.9 million, and one commercial business loan in the amount of $74,000. The amount of specific reserves related to nonaccrual loans was $1.5 million as of September 30, 2010. Management continues to aggressively pursue the collection and resolution of all delinquent loans.

General. Net income decreased $250,000 or 54.4% to $209,000 or $0.03 per share for the three months ended September 30, 2010 as compared to $459,000 or $0.07 per share for the same period in 2009. The decrease in net income was primarily due to a $675,000 or 900.0% increase in provision for loan losses for the three months ended September 30, 2010 compared to the three months ended September 30, 2009. The increase in the provision for loan losses was primarily due to the need for additional specific allowances that resulted from our quarterly valuation analysis for problem loans and charge-offs of $60,000.

Net income decreased $610,000 or 56.3% to $474,000 or $0.07 per share for the nine months ended September 30, 2010 as compared to $1.1 million or $0.16 per share for the same period in 2009. The decrease in net income was primarily due to a $1.7 million or 753.3% increase in provision for loan losses for the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009. Also contributing to the decrease in net income was the $135,000 provision for loss on OREO. The increase in the provision for loan losses was primarily due to the need for additional reserves that resulted from our quarterly valuation analysis for problem loans and, charge-offs of $582,000. The provision for loss on OREO was primarily due to the need for additional write-downs that resulted from our quarterly valuation analysis of our OREO.

Interest Income. Interest income decreased $348,000 or 6.6% to $4.9 million for the three months ended September 30, 2010, compared to the same period in 2009. The decrease was due to a $246,000 or 36.9% decrease in interest income on investment securities, a $95,000 or 32.8% decrease in interest income on mortgage backed securities, and a $16,000 or 28.6% decrease in interest earned on balances due from depository institutions. These decreases were partially offset by a $9,000 increase on interest income earned on loans. The decrease in interest income on investment securities was due to a $9.7 million or 16.3% decrease in the average balance of investment securities and a 109 basis point or 24.5% decrease in the average yield earned. The decrease in interest income on mortgage backed securities was due to an $7.8 million or 29.2% decrease in the average balance of mortgage backed securities and a 22 basis point or 5.1% decrease in the average yield earned. The decrease in interest income on balances due from depository institutions was due to a 20 basis point or 42.0% decrease in the average yield earned, partially offset by $10.7 million or 22.9% increase in the average balance of balances due from depository institutions. The increase in interest income on loans was due to a $3.2 million or 1.1% increase in the average balance of loans outstanding, partially offset by a 5 basis point or 0.9% decrease in the average yield earned.

Interest income decreased $819,000 or 5.2% to $15.1 million for the nine months ended September 30, 2010, compared to the same period in 2009. The decrease was due to a $520,000 or 26.0% decrease in interest income on investment securities, a $319,000 or 33.1% decrease in interest income on mortgage backed securities, and a $46,000 or 0.4% decrease in interest income on loans. These decreases were partially offset by a $66,000 or 53.2% increase in interest income earned on balances due from depository institutions. The decrease in interest income on investment securities was due to a $5.6 million or 9.7% decrease in the average balance of investment securities and an 84 basis point or 18.2% decrease in the average yield earned. The decrease in interest income on mortgage backed securities was due to an $8.1 million or 28.1% decrease in the average balance of mortgage backed securities and a 31 basis point or 7.0% decrease in the average yield earned. The decrease in interest income on loans was due to a 12 basis point or 2.0% decrease in the average yield earned on loans, partially offset by a $4.9 million or 1.7% increase in the average balance of loans. The increase in interest income on balances due from depository institutions was due to a $31.8 million or 85.3%

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