Allegiance Bank of North America (the Bank) today announced it has
agreed to extend the Private Placement Offering engagement of Cohen &
Company Securities, LLC (Cohen) (COHN AMEX) from August 30, 2010
to September 30, 2010. On May 14, 2010 the Bank announced the engagement
of Cohen to sell a minimum of 2,000,000 shares and up to 5,000,000
shares (the Shares) of the Banks common stock, par value $1.00 per
share (the Common Stock), on a best efforts basis to accredited
investors at a price of $10.00per share, resulting in gross proceeds of
up to $50,000,000 (the Offering). Under the terms of the engagement,
the Bank will effect a reverse stock split so that there will be no more
than 125,000 common shares outstanding immediately prior to closing the
Offering.
Gregg J. Wagner, President and CEO of the Bank, stated, The market for
capital continues to be very competitive. The Bank and Cohen will
continue to meet with prospective investors during September with a goal
of adding capital to comply with regulatory capital directives and
provide us with resources to establish new relationships and expand our
offerings within the communities we serve.
As previously reported, on November 3, 2009, the Federal Deposit
Insurance Corporation (FDIC) and the Commonwealth of Pennsylvania
Department of Banking and Insurance (Department) each issued a Consent
Order (Order) designed to improve the Banks overall performance. The
Bank has implemented actions to achieve the objectives in the Orders and
has been successful in the resolution of certain of these objectives.
One of the specific directives within the Order is to achieve an 8% tier
1 leverage capital ratio and a 12% total risk-based capital ratio. The
Banks tier 1 leverage capital ratio was 2.74% and its total risk based
capital ratio was 5.63% at June 30, 2010.
The Bank reported a net loss of $1.5 million, or $0.31 per share, for
the second quarter of 2010, compared to a net loss of $7.0 million, or
$1.46 per share, for the second quarter of 2009. The second quarter 2009
net loss was the result of the Bank initiating a strategy to
significantly reduce its non-performing loans and classifying its
Paramount Mortgage and Capital, LLC (Paramount) loan portfolio loans
held for sale. This classification change resulted in the Bank
recording an additional expense of $4.4 million to reduce the Paramount
loan portfolio to its fair value as of June 30, 2009. The total
operating loss from Paramount during the second quarter of 2009 was
approximately $5.3 million, including the $4.4 million charge. The
second quarter 2010 net loss of $1.5 million was the result of an
$800,000 addition to the provision for loan losses and a reduction in
net interest income. The lower net interest income is related to the
planned reduction in earning assets to correspond with the Banks lower
level of capital. The Bank continues to control its expenses as noted by
a 36.8% reduction in other expenses during the second quarter of 2010,
compared to the same period in 2009. This reduction was the result of
both a 30% cutback in employees and lower expenses associated with the
Paramount portfolio experienced in the second quarter of 2010, compared
to the second quarter of 2009. The year-to-date June 30, 2010 net loss
was $2.8 million, compared to the $7.8 million net loss for the same
period in 2009. The higher net loss in 2009 was primarily the result of
losses associated with Paramount.
Paramount was formed on December 18, 2003 to originate secured
commercial loans made primarily to small real estate investors and
developers. These loans were held by Paramount and funded by loans to
Paramount from the Bank. On March 1, 2008 the Bank took action to close
down Paramount operations. Paramounts loan portfolio was sold on
September 3, 2009, which resulted in a loss on sale of $4,038,000. The
Bank sold the loans as is and surrendered control of the assets.
As a result of the decrease in capital during the last year related to
the Banks earnings performance, the Bank strategically reduced its
assets to be more aligned with its level of capital. Total assets at
June 30, 2010 of $116.1 million declined $43.1 million, or 27.1%,
compared to total assets at June 30, 2009 of $159.2 million. The Bank
decreased net loans, securities available for sale, and loans held for
sale by $31.9 million, $8.9 million and $2.8 million, respectively.
Total deposits decreased $40.1 million, or 29.1% from $137.8 million at
June 30, 2009 to $97.7 million at June 30, 2010. As a result of the
lower level of assets, the Bank did not require the same level of
deposits to fund its assets. All deposit products experienced decreases
during the past year. Contributing to this decrease were reductions in
time deposits, money market accounts, interest bearing demand, and
non-interest bearing accounts of $18.6 million, $10.7 million, $7.6
million and $3.0 million, respectively.
Total non-performing loans were $6.9 million at June 30, 2010, which
decreased $3.3 million from $10.2 million at June 30, 2009. This
decrease was due to a $1.8 million reduction in non-performing Bank
loans and $1.5 million of non-performing Paramount loans.
The $2.6 million, or 27.6%, reduction in non-performing loans from March
31, 2010 to June 30, 2010 included the payoff of a $540,000 construction
loan, the transfer of $992,000 non-performing loans to other real estate
owned, and partial charge-offs of two properties in the amount of
$903,000. The Banks non-performing loan total of $6.9 million at June
30, 2010 included 11 commercial mortgage loans ($4.0 million), two
construction loans ($1.5 million), and two residential mortgage loans
($1.4 million). The Bank has continued to aggressively manage its loan
portfolio as demonstrated by the fact the Bank has not had a loan 30-89
days past due for 4 consecutive quarters.
June 30,
March 31,
Dec. 31,
June 30,
Dec 31,
(In Thousands)
2010
2010
2009
2009
2008
Non-Performing Loans*
Bank Non-Performing Loans
$
6,876
$
9,499
$
8,712
$
8,745
$
6,767
Paramount Non-Performing Loans
-
-
-
1,503
6,607
Total Non-Performing Loans
$
6,876
$
9,499
$
8,712
$
10,248
$
13,374
30-89 days past due
$
-
$
-
$
-
$
573
$
1,461
*Non-Performing Loans includes loans that are not earning income due
to: (1) full payment of principal and interest under the original terms
of the loan agreement is no longer anticipated, (2) principal or
interest is 90 days or more delinquent, or (3) the maturity date has
passed and payment in full has not been made.
The regulatory Orders are not intended to interfere with the Banks
current, basic day-to-day operations. Consequently, the Orders do not
affect Bank customers. Accounts at Allegiance Bank continue to be
insured up to $250,000 per depositor by the FDIC. IRA accounts continue
to be separately insured by the FDIC up to $250,000 per depositor. The
Bank is participating in the FDICs Transaction Account Guarantee
Program. Under that program, through December 31, 2010, all non-interest
bearing transaction accounts are fully guaranteed by the FDIC for the
entire amount in the account. Coverage under the Transaction Account
Guarantee Program is in addition to and separate from the coverage
available under the FDICs general deposit insurance rules.
About Allegiance Bank: Allegiance Bank is headquartered in Bala
Cynwyd, with offices in Berwyn, King of Prussia, Old City and Worcester.
Allegiance Bank offers a package of services beyond traditional bank
offerings, such as Allegiance Universitys free educational classes for
customers and community members. Visit Allegiance Bank online at www.allegbank.com,
or call (610) 949-9500. The common stock of Allegiance Bank is traded on
the OTC Bulletin Board under the symbol ABPA.
This announcement does not constitute an offer to sell or the
solicitation of an offer to buy securities in any jurisdiction. Any
offering will be made in accordance with applicable federal and state
securities laws.
Statements contained in this news release which are not historical facts
are forward looking statements, as that term is defined in the Private
Securities Litigation Reform Act of 1995. Amounts herein could vary as a
result of market and other factors. Such forward-looking statements are
subject to risks and uncertainties which could cause actual results to
differ materially from those currently anticipated due to a number of
factors. Such forward-looking statements may be identified by the use of
such words as believe, expect, anticipate, should, planned,
estimated and potential. Examples of forward-looking statements
include, but are not limited to, estimates with respect to the financial
condition, expected or anticipated revenue, results of operations and
business of the Company that are subject to various factors which could
cause actual results to differ materially from these estimates. These
factors include, but are not limited to, general economic conditions,
changes in interest rates, deposit flows, loan demand, real estate
values and competition; changes in accounting principles, policies or
guidelines; changes in legislation or regulation; the Banks ability to
successfully complete its current offering of Common Stock; and other
economic, competitive, governmental, regulatory and technological
factors affecting the Companys operations, pricing, products and
services.
Consolidated Income Statements
(Unaudited)
Six Months Ended
Three Months Ended
June 30,
June 30,
(In thousands)
2010
2009
2010
2009
Interest Income
Loans receivable, including fees
$
2,763
$
3,783
$
1,337
$
1,903
Securities
191
480
81
207
Other
9
6
3
5
Total Interest Income
2,963
4,269
1,421
2,115
Interest Expense
Deposits
1,109
2,031
511
997
Federal Home Loan Bank Borrowings
262
256
135
128
Total Interest Expense
1,371
2,287
646
1,125
Net Interest Income
1,592
1,982
775
990
Provision for Loan Losses
1,530
1,282
800
1,242
Net Interest Income after Prov. for Loan Losses
62
700
(25
)
(252
)
Other Income
Customer service fees
33
49
30
31
Loss on sale of loans
-
(94
)
-
(94
)
Gain (loss) on sale of OREO
44
3
-
3
Valuation allowance on loans held for sale
-
(4,367
)
-
(4,367
)
Other
110
33
33
29
Total Other Income
187
(4,376
)
63
(4,398
)
Other Expenses
Salaries and employee benefits
1,188
1,736
588
878
Occupancy
531
577
262
292
Equipment and data processing
246
275
123
148
Advertising, marketing and business development
13
85
9
44
Professional fees
427
495
213
284
Bank shares tax
85
98
35
56
FDIC insurance expense
277
203
99
104
Other
280
673
175
538
Total Other Expenses
3,047
4,142
1,504
2,344
Net Loss
$
(2,798
)
$
(7,818
)
$
(1,466
)
$
(6,994
)
Loss Per Share
Basic
($0.58
)
($1.63
)
($0.31
)
($1.46
)
Diluted
($0.58
)
($1.63
)
($0.31
)
($1.46
)
Consolidated Balance Sheets
(Unaudited)
(In thousands)
June 30,
Assets
2010
2009
Cash & due from banks
$
682
$
484
Interest bearing demand deposits
13,661
12,755
Cash & Cash Equivalents
14,343
13,239
Interest bearing time deposits
-
50
Securities available for sale
8,717
17,607
Loans held for sale
-
2,828
Loans receivable
88,730
121,791
Allowance for loan losses
(1,326
)
(2,530
)
Net Loans Receivable
87,404
119,261
Bank premises & equipment
2,088
2,535
Restricted bank stock
1,753
1,753
Accrued interest receivable
379
646
Foreclosed assets
865
506
Other assets
585
746
Total Assets
$
116,134
$
159,171
Liabilities & Shareholders
Equity
Liabilities
Deposits:
Demand, non-interest bearing
$
3,926
$
6,942
Demand, interest bearing
6,029
13,649
Money Market
34,396
45,105
Savings
264
457
Time over $100,000
32,501
36,483
Time, other
20,535
35,157
Total Deposits
97,651
137,793
Federal Home Loan Bank Borrowings
14,471
12,651
Accrued interest payable
56
68
Other liabilities
662
1,341
Total Liabilities
112,840
151,853
Shareholders Equity
Common Stock
4,798
4,798
Surplus
19,922
19,910
Accumulated deficit
(21,540
)
(17,251
)
Accumulated other comprehensive loss
114
(139
)
Total Shareholders Equity
3,294
7,318
Total Liabilities & Shareholders Equity
$
116,134
$
159,171
Source: Business Wire
