- The Washington Times - Monday, August 7, 2006

Alliance Bank increased its profit by 45 percent in the first six months of this year while it shook up its management to compete more vigorously in Washington’s tough banking market for corporate customers.

The Chantilly bank recently hired three top managers from other financial institutions.

“All three of our recent hires will help expand our commercial portfolio,” said Thomas A. Young Jr., Alliance Bank’s chief executive officer.

Alliance Bank provides commercial and retail banking primarily to small and midsized businesses as well as individual consumers.

Brian Haggerty, formerly a SunTrust executive, is taking over as Alliance Bank’s senior vice president to expand its business with government contractors.

Robert Belch, previously from James Monroe Bank, is assigned to win customers from among the region’s nonprofit organizations and property-management companies.

Stephen Kingsley was hired from BB&T; in Fredericksburg based largely on his experience managing commercial loans, such as to builders, manufacturers and government contractors.

Although income from loans is big business for Alliance Bank, “we are focused on growth in non-interest income, changing the asset and liability mix on our balance sheet, empowering our people to ensure that they are as productive as they can be and taking advantage or technology whenever possible,” Mr. Young said.

Among the challenges the bank faces is “attracting and retaining quality people,” Mr. Young said.

The bank also was challenged in the second quarter of 2006 by the bursting of the real estate bubble, which hurt the mortgage business.

“A slowing housing market and rising interest rates have dampened demand for new originations and refinancings in our area,” said Frank H. Grace, president of the bank’s Alliance Home Funding.

Nevertheless, Alliance Bank’s loan portfolio grew to $366.8 million in the second quarter, or $110.2 million more than one year earlier.

The bank earned second-quarter 2006 net income of $1.4 million, or 24 cents per diluted share, compared with $1.1 million, or 19 cents per diluted share, in the second quarter of 2005. It earned revenue of $10.8 million in the second quarter compared with $8.2 million one year earlier.

Alliance Bank controls $664.6 million in assets.

Its stock, ABVA on the Nasdaq Stock Market, closed yesterday at $16.03 per share, down 47 cents or 3 percent from Friday’s close.

Financial firm Howe Barnes Investments chose Alliance Bank as one of its top stock picks for this year.

The bank “is a small, fast-growing community banking organization with a strategic focus of building a commercial customer base and enhancing shareholder value,” said Daniel Cardenas, research analysts for Howe Barnes, which makes a market in Alliance Bank’s stock.

“Concentrating on capturing small-business lending opportunities in the greater Washington, D.C., metropolitan area, we think [Alliance Bank] should be successful in this endeavor aided by market consolidation over the past several years and a growing staff of lenders.”

Financial firm Ryan Beck & Co., which also makes a market in Alliance Bank’s stock, said in a research note in June that since 2000, “The company has maintained solid asset quality while rapidly expanding its loan portfolio over the same time period.”

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