BALA CYNWYD, Pa., Aug. 11 /PRNewswire-FirstCall/ -- Allegiance Bank of North America (OTC:ABPA) (BULLETIN BOARD: ABPA) reported today its twelfth consecutive profitable quarter of operations for the quarter ended June 30, 2005. C. Andrew Cook, President and Chief Executive Officer, noted the achievements of the organization in 2005 to date: -- The second quarter of 2005 marked the Bank's twelfth consecutive quarter of profitable operations. Earnings for the second quarter of 2005 increased to $215 thousand from $159 thousand during the year- ago period, an increase of 35.2%. Earnings per share fell from $0.07 in the second quarter of 2004 to $0.05 in the second quarter of 2005. The decline in earnings per share was due to a doubling of outstanding shares as a result of our issuance of common stock in an offering completed in January 2005. -- Net income for the six months ended June 30, 2005 grew 54.3% over net income for the prior-year period. Net income for the six months ended June 30, 2005 increased to $446 thousand or $0.10 per share from $289 thousand or $0.12 per share in 2004. -- Increased an already strong net interest margin. For the six months ended June 30, 2005, the Bank expanded its net interest margin by 17 basis points from 4.74% for the prior year period to 4.91% for 2005; -- Increased total assets by 38.2% year over year to $108.4 million at June 30, 2005 from $78.4 million a year earlier; -- Increased total loans by $17.9 million or 24.5% to $90.9 million at June 30, 2005 from $73.0 million at June 30, 2004; -- Maintained superior asset quality as the Bank had no non-performing loans at June 30, 2005; -- Opened a new branch, the Bank's second full-service retail location, in the Old City section of Philadelphia on April 21, 2005; Net income for the second quarter of 2005 was $215 thousand or $0.05 per share compared to $159 thousand or $0.07 per share for the second quarter of 2004. The increase in earnings is primarily the result of a 45.9% increase in net interest income to $1.3 million from $889 thousand and a $77 thousand or 240.6% increase in non-interest income to $109 thousand in the second quarter of 2005 from $32 thousand in the prior-year period. These increases were partially offset by a 114.1% or $73 thousand increase in the provision for loan losses to $137 thousand during the second quarter of 2005 from $64 thousand during the same period in 2004 and a $356 thousand increase in other expenses from $698 thousand during the second quarter of 2004 to $1.1 million in the second quarter of 2005. The increase in net interest income was primarily due to a $632 thousand increase in interest income driven by a 24.5% increase in the Bank's loan portfolio. The increase in the loan loss provision was related solely to the growth of the loan portfolio as asset quality remained excellent with no non-performing loans at June 30, 2005. Net interest income for the second quarter of 2005 increased by 45.9% to $1.3 million from $889 thousand for the second quarter of 2004 reflecting continued growth in earning assets, primarily investments and loans, and a higher net interest margin. The Bank opened its second office on April 21, 2005 to further support its franchise growth in attractive markets and stimulate further loan and deposit growth while improving its deposit mix by emphasizing lower cost core deposit generation. Non-interest income grew by 240.6% in the second quarter of 2005 to $109 thousand compared to $32 thousand for the same period in 2004. The increase in non-interest income was primarily due to mortgage banking activities, which generated $87 thousand of additional income. For the six months ended June 30, 2005, the Bank earned $446 thousand or $0.10 per share compared to $289 thousand or $0.12 per share during the prior- year period. Driven by continued growth in the loan portfolio and higher interest rates, interest income for the first half of 2005 increased 43.7% to $3.5 million compared to $2.4 million reported in the year-ago period. For the six months ended June 30, 2005, the net interest margin was 4.91% versus 4.74% for the first six months of 2004. Net interest income for the six months ended June 30, 2005 amounted to $2.5 million, a 43.2% increase over the $1.7 million recorded in the same six-month period in 2004. Non-interest income for the first six months of 2005 was $221 thousand, an increase of $166 thousand from the same period in 2004, mainly driven by mortgage banking revenues which contributed $179 thousand over the six-month period in 2005. Non-interest expenses amounted to $2.0 million for the six months ended June 30, 2005, a 44.7% increase from the $1.4 million reported in the first half of 2004. The increase in non-interest expenses reflects the Bank's overall growth in loans, deposits and the addition of a second branch office. As reported, assets increased 38.2% to $108.4 million at June 30, 2005 from $78.4 million at June 30, 2004. Investments increased by $12.2 million or 450.0% from $2.7 million at June 30, 2004 to $14.9 million at June 30, 2005 while loans increased by 24.5% or $17.9 million to $90.9 million at June 30, 2005 from $73.0 million one year earlier. Deposits increased 37.4% to $84.2 million at June 30, 2005 from $61.3 million at June 30, 2004. Short-term borrowings decreased 93.8% or $6.4 million to $424 thousand at June 30, 2005 from $6.8 million reported twelve months ago as deposit inflows were used to repay short-term borrowings. At June 30, 2005, the Bank's allowance for loan losses equaled $1.2 million or 1.33% of total loans compared to $875 thousand or 1.20% of total loans at June 30, 2004. The Bank had no non-performing loans at June 30, 2005. Stockholders' equity increased by $13.3 million to $22.3 million at June 30, 2005 compared to $9.0 million a year earlier. Stockholders' equity equaled 20.6% of total assets at June 30, 2005. In January 2005 the Bank issued 2,415,000 shares of its common stock in a public offering underwritten by Ryan Beck & Co. and received net proceeds of $12.7 million. Regulatory capital ratios are all well in excess of the "well-capitalized" threshold. Allegiance Bank of North America is a Pennsylvania state-chartered full- service commercial bank formed in 1999, headquartered in Bala Cynwyd, Pennsylvania. The Bank offers a sophisticated package of services beyond traditional bank services, such as escrow account management, specialty real estate lending programs, Internet banking and non-bank services including title insurance, real estate settlement services, financial planning, life and health insurance and retirement programs through its three subsidiaries, Allegiance Financial Services, Inc., AllSearch Abstract, LLC, and Paramount Mortgage and Capital, LLC. The common stock of the Company is traded on OTC Bulletin Board under the symbol ABPA. 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 principals, policies, or guidelines; changes in legislation or regulation; and other economic, competitive, governmental, regulatory, and technological factors affecting the Company's operations, pricing, products and services. DATASOURCE: Allegiance Bank of North America CONTACT: C. Andrew Cook, President and Chief Executive Officer, Allegiance Bank of North America, +1-610-949-0760

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