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

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May 12, 2010
Alliance Bancorp Inc of Pennsylvania (ALLB, Financial) filed Quarterly Report for the period ended 2010-03-31.

Alliance Bancorp Inc Of Pennsylvania has a market cap of $55.8 million; its shares were traded at around $8.31 with a P/E ratio of 48.9 and P/S ratio of 2.5. The dividend yield of Alliance Bancorp Inc Of Pennsylvania stocks is 1.4%.ALLB is in the portfolios of Chuck Royce of Royce& Associates.

Highlight of Business Operations:

Total assets increased $7.6 million or 1.6% to $471.8 million at March 31, 2010 compared to $464.2 million at December 31, 2009. This increase was primarily due to an $11.8 million or 15.7% increase in total cash and cash equivalents, and a $1.4 million or 0.5% increase in net loans. These increases were partially offset by a $3.8 million or 13.0% decrease in investment securities available for sale and a $1.8 million or 7.6% decrease in mortgage-backed securities available for sale.

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 to $17.1 million or 3.62% of total assets at March 31, 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 $6.2 million land and development loan for a mixed use commercial real estate project located in Bradenton, Florida, as nonperforming 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. At March 31, 2010, the $17.1 million of nonperforming assets consisted of $1.4 million of accruing loans 90 days or more delinquent, $13.0 million of nonaccrual loans, and $2.7 million in OREO. At March 31, 2010, the $13.0 million of nonaccrual loans consisted of three single family real estate loans totaling $394,000, fifteen commercial real estate loans totaling $2.2 million, two real estate construction loans in the amount of $9.9 million, and four commercial business loans in the amount of $463,000. The amount of specific reserves related to nonaccrual loans was $891,000 as of March 31, 2010. Management continues to aggressively pursue the collection and resolution of all delinquent loans.

General. Net income decreased $225,000 or 54.7% to $186,000 or $0.03 per share for the three months ended March 31, 2010 as compared to $411,000 or $0.06 per share for the same period in 2009. The decrease in net income was primarily due to a $445,000 or 593.3% increase in provision for loan losses for the three months ended March 31, 2010 compared to the three months ended March 31, 2009. The increase in the provision for loan losses was primarily due to the need for $370,000 of additional reserves that resulted from our quarter end valuation analysis for problem loans and, to a lesser extent net charge-offs of $67,000 related to one residential loan and one commercial real estate loan.

Interest Income. Interest income decreased $287,000 or 5.4% to $5.1 million for the three months ended March 31, 2010, compared to the same period in 2009. The decrease was due to a $163,000 or 23.3% decrease in interest income on investment securities, an $113,000 or 31.8% decrease in interest income on mortgage backed securities, and a $57,000 or 1.3% decrease on interest income on loans. The decrease in interest income was partially offset by a $46,000 or 153.3% increase in interest income earned on balances due from depository institutions. The decrease in interest income on investment securities was due to a $4.6 million or 8.1% decrease in the average balance of investment securities and an 80 basis point or 16.6% decrease in the average yield earned. The decrease in interest income on mortgage backed securities was due to an $8.5 million or 27.2% decrease in the average balance of mortgage backed securities and a 29 basis point or 6.4% decrease in the average yield earned. The decrease in interest income on loans was due to a 19 basis point or 3.1% decrease in the average yield earned, partially offset by $5.4 million or 1.9% increase in the average balance of loans outstanding. The increase in interest income on balances due from depository institutions was due to a $45.5 million or 173.4% increase in the average balance of balances due from depository institutions, partially offset by a 4 basis point or 8.7% decrease in the average yield earned.

Other Income. Other income was $266,000 for the three months ended March 31, 2010 as compared to $290,000 for the same period in 2009. The $24,000 or 8.3% decrease was primarily the result of the Company realizing a $20,000 loss on the sale of OREO which was recorded as a reduction of other income for the three months ended March 31, 2010. The decrease in other income also included a $6,000 or 6.7% decrease in management fees, and a $2,000 or 2.3% decrease in the increase in cash surrender value of bank owned life insurance, partially offset by a $4,000 or 10.8% increase in other fee income.

Other Expenses. Other expenses increased $102,000 or 3.9% to $2.7 million for the three months ended March 31, 2010 compared to the same period in 2009. The increase was primarily due to an $117,000 or 8.2% increase in salary and employee benefits, an $11,000 or 2.2% increase in occupancy and equipment expense, a $45,000 or 36.9% increase in FDIC insurance premiums, a $15,000 or 100.0% increase in loan and OREO expense, and a $5,000 or 7.8% increase in directors fees. The increase in other expenses was partially offset by a $19,000 or 33.3% decrease in advertising and marketing expense, a $44,000 or 31.2% decrease in professional fees, and a $28,000 or 9.3% decrease in other noninterest expense.

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