Sept 22, 2017 -- Gaston Gazette Article

Alliance Bank & Trust fights its way back to solid footing

By Michael Barrett, Gazette staff, posted Sep 22, 2017 at 3:20 PM
http://www.gastongazette.com/news/20170922/alliance-bank-amp-trust-fights-its-way-back-to-solid-footing

Alliance Bank & Trust President and CEO Dan Boyd IV is pictured at the bank’s West Main Avenue branch in downtown Gastonia. [Mike Hendsill/The Gaston Gazette]

 

Gaston County’s last remaining community bank is continuing to put the dark days of 2012 behind it, with a strong financial run that has now spanned a year and a half.

Alliance Bank & Trust’s recent results from the second quarter of 2017 demonstrated another period of profitability. It’s the latest in a positive cycle that has now been spinning for six quarters in a row.

In addition, the bank was recently released from the effective probation it had been placed on five and a half years ago due to being on shaky fiscal ground. The Federal Deposit Insurance Corp. and North Carolina Office of the Commissioner of Banks issued a consent order for Alliance Bank in February 2012, which had required it to go through much more intensive reporting and regulatory oversight. But the agencies recently lifted that order, offering further evidence of the positive turnaround.

Alliance Bank & Trust CEO and President Dan Boyd IV said resolving the latter issue was indeed noteworthy.

“Having that removed frankly means a lot less restrictions on the bank,” he said. “While we were under that consent order, for example, we really could not consider branch expansion, but now we can.

“We’re very excited to have that in the rearview mirror.”

Climbing back

Founded in Gastonia in 2004, Alliance Bank & Trust Co. now has two local branches, with an additional presence in Shelby and Kings Mountain. Boyd said a number of things have contributed to the overall improvement of late.

Alliance Bank’s struggles mirrored those of many other financial institutions in the wake of the Great Recession almost a decade ago, as capital ratios were hit hard. As home foreclosures mounted during that time, problematic loans left the bank holding real estate that it didn’t want. And it took a while to rectify that.

On June 30, 2015, Alliance still had $3.8 million worth of foreclosed real estate. But at the end of the most recent reporting period this past summer, the bank had dropped that number to zero.

“There are a lot of ancillary expenses to a bank in having foreclosed real estate, like real estate taxes, insurance on buildings, and of course there are attorney fees involved,” said Boyd.

In addition to shaking that burden, Alliance has put a renewed emphasis on “relationship banking.” Increasing core deposits from checking and savings accounts of commercial and consumer customers has become a strategic focus, Boyd said.

“The two markets we serve are in Gaston and Cleveland counties, and deposits are the lifeblood that help our loan growth,” he said. “We’re a lot more focused on growing deposits locally and less focused on growing them through internet deposits or wholesale funding.”

In the last two years, Alliance has grown its core deposits by almost 30 percent.

Opportunities ahead

Boyd developed a strong local resume in banking before coming to Alliance two years ago. He was then given the top post after former CEO Don Harrison retired.

He and others have watched as a trend of consolidation and mergers have led to the demise of other small, community-based banks in the area. But as an institution that still offers entirely local decision-making, Boyd said Alliance’s resurgence is only making it more appealing to existing and potential customers.

“That allows us to be very responsive to our customers when their needs arise,” he said. “We feel that any time there’s a disruption like that (from consolidation), that creates opportunities. And we feel that will prove to be advantageous to us.”


Alliance Bank & Trust, by the numbers

  • Earnings for the first six months of 2017 increased by $12,000 to $235,000, compared to $223,000 for the same period in 2016.
  • Assets (cash, government securities, interest-earning loans like mortgages) totaled $142 million on June 30, down 1 percent from Dec. 31
  • Deposits decreased to $116.7 million on June 30, from $117.4 million on Dec. 31
  • Deposits available for withdrawal at any time totaled $39.5 million, an increase of 4 percent since Dec. 31

You can reach Michael Barrett at 704-869-1826 or on Twitter @GazetteMike.