Alliance Bankshares Reports 3rd Quarter 2006 Results.

Earnings Up 15% Over Third Quarter 2005; Up 33% Over 2005 Results

CHANTILLY, Va. -- Alliance Bankshares Corporation (NASDAQ: ABVA) today reported third quarter 2006 earnings of $1.4 million, a 15.2% increase over the same period last year. For the first nine months of 2006 net income was $3.9 million or 33.2% greater than the earnings for the first nine months of 2005. Earnings per share, diluted were $.23 for the quarter compared to the third quarter 2005 results of $.20. Earnings per share, diluted for the first nine months of 2006 were $.66 per share compared to $.50 per share for the first nine months of 2005.

Thomas A. Young, Jr., President and Chief Executive Officer of Alliance Bankshares, said, "The results for the third quarter and the first nine months of 2006 continue to reflect positively on a key organizational goal, the expansion of our loan portfolio and lending team. In the fall of 2005, we hired Mike O'Grady as Senior Vice President and Director of Commercial Banking. Mike has significantly expanded his commercial banking team and the early results are reflected in our growth numbers with loans increasing 33.6% to $377.0 million as of September 30, 2006. We remain focused on building solid client relationships and we will continue to adjust to the markets we currently serve and those we intend to serve in the near future."

"As originally planned at acquisition, the insurance agency is doing its part to add value to the Alliance financial services platform. On a year to date basis, the insurance agency contributed $474,000 in pre tax income to the organization. In addition, we are focused on expanding the business line. We recently announced the expansion of the operation in the Manassas / Prince William County area," said Thomas Patrick Danaher, President of Alliance Insurance Agency, Inc.

Total assets were $643.7 million or $32.2 million greater than December 31, 2005 level of $611.5 million or $18.9 million lower than the September 30, 2005 level. Total deposits declined by $18.3 million or 4.0% to $442.9 million as of September 30, 2006, compared to $461.2 million as of December 31, 2005. Total deposits are down $76.7 million from the September 30, 2005 level of $519.6 million. The decline in both assets and deposits is a function of the changing and slowing real estate market in the Washington, DC metropolitan area. Investment securities were $205.0 million as of September 30, 2006 down $23.8 million from the December 31, 2005 level of $228.8 million and down $26.2 million from the September 30, 2005 level of $231.2 million. As the loan portfolio grows, the organization remains committed to strong credit quality resulting in nominal net charge-offs and very low levels of past due loans. As of September 30, 2006, the organization did not have any non accrual loans, loans past due greater than 90 days or OREO. As of September 30, 2006, we had approximately five loans identified as impaired with specific reserves. The total loan value of these performing loans was $3.3 million. The allowance for loan losses stands at 1.15% of total loans outstanding as of September 30, 2006, up from 1.12% as of December 31, 2005 and September 30, 2005.

Our net interest margin continues to improve and in the third quarter was 3.64% or 10 basis points greater than the third quarter 2005 net interest margin of 3.54%. On a year to date basis our net interest margin was 3.71% compared to 3.41% for the same period in 2005. Although the net interest margin has risen in recent periods, the organization anticipates continued pressure on the net interest margin, as funding costs rise and normal competitive pressures persist.

Harvey E. Johnson, Jr., Chairman of the Board of Directors said, "Management and the Board remain committed to delivering high quality financial services in the Greater Washington, DC metropolitan marketplace. As we invest in our people and business lines our results are expected to blossom. This year has proven to hold many challenges for our mortgage company. The management team continues to evaluate and adjust our business model to find the proper mix of staffing, fixed overhead and business to weather the down cycle in the mortgage market. We believe a mortgage operation is an important component of our long term financial services vision. As with any cyclical business the downward industry trends present great challenges."

Alliance Bankshares Corporation is a locally managed community banking organization based in Northern Virginia. The independent status of the organization allows the bank's management to create, implement and maintain banking services with a level of flexibility, creativity and discretion that is not possible with larger institutions.

Some of the matters discussed herein may include forward-looking statements. These forward-looking statements may include statements regarding profitability and financial and other goals. These statements are based on certain assumptions and analyses by the Company and other factors it believes are appropriate in the circumstances. However, the Company's expectations are subject to a number of risks and uncertainties and other factors that could cause actual results, events and developments to differ materially from those contemplated by any forward-looking statements herein. Consequently, all forwarding-looking statements made herein are qualified by these cautionary statements and cautionary language in the Company's most recent report on Form 10-K and other documents filed with the Securities and Exchange Commission

* All per share amounts are adjusted to reflect the three-for-twenty stock split in the form of a 15% stock dividend payable on June 30, 2006.

More information on Alliance Bankshares Corporation can be found online at www.alliancebankva.com , or by phoning an Alliance office.

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