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Western Financial Group reports second quarter 2009 results

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^{Published in Business and Finance on Thursday, August 13th 2009 at 17:39 GMT, Last Modified on 2009-08-13 17:39:45 by Market Wire}  

 HIGH RIVER, AB, Aug. 13 /CNW/ - (TSX - WES) - Western Financial Group ("the Company") announced today its operating and financial results for the three and six months ended June 30, 2009. 
"Our company is progressing toward its 2009 objectives," said Scott Tannas, President and CEO. "Our profits are up substantially over last quarter, and we see signs of accelerating growth across our businesses. The Network and Western Life both posted record quarters for revenue and operating profit. Both operations are growing top and bottom lines at a rate that exceeds their industry peers. Bank West has managed its business cautiously through the first half of 2009, and continues to maintain strong credit quality, with non performing loans at a respectable percentage relative to the major Canadian Banks. With the summer funding season in swing, and fall harvest coming, the Bank is now in a position to profitably grow its operations in the third quarter."
 ------------------------------------------------------- 2009 OBJECTIVES Same Store Revenue 5%-8% growth Network Operating Margin 29% Bank West Specific Provisions 50 bps or less Western Life Loss Ratio (less than)45% Overall 2009 Net Income $14.5 to $16.5 million ------------------------------------------------------- ------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (in $ thousands except for per THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30 share amounts) 2009 2008 % Change 2009 2008 % Change The Network Commissions and other customer income $23,109 $21,872 5.7 % $40,631 $38,361 5.9 % Operating expenses 14,882 13,929 6.8 % 28,813 26,568 8.5 % -------- -------- -------- -------- Operating income $ 8,227 $ 7,943 3.6 % $11,818 $11,793 0.2 % -------- -------- -------- -------- -------- -------- -------- -------- Bank West Interest and investment income 6,685 4,610 45.0 % 12,224 9,551 28.0 % Interest expense - customer deposits 3,778 3,103 21.7 % 7,432 6,499 14.3 % -------- -------- -------- -------- Net interest and investment income 2,908 1,507 93.0 % 4,792 3,052 57.0 % Provisions for credit losses 517 129 300.0 % 806 209 286.3 % Operating expenses 2,625 943 178.3 % 4,724 1,711 176.1 % -------- -------- -------- -------- Operating (loss) income $ (235) $ 434 (154.1)% $ (738) $ 1,132 (165.2)% -------- -------- -------- -------- -------- -------- -------- -------- Western Life Premium and investment income 10,841 7,488 44.8 % 18,791 15,491 21.3 % Policyholder benefits 5,199 2,782 86.9 % 8,832 6,487 36.1 % Operating expenses 3,995 3,446 15.9 % 7,373 6,568 12.3 % -------- -------- -------- -------- Operating income $ 1,647 $ 1,261 30.6 % $ 2,586 $ 2,436 6.2 % -------- -------- -------- -------- -------- -------- -------- -------- Corporate and all other Other revenues 243 401 (39.4)% 612 1,070 (42.8)% Operating expenses 2,602 1,892 37.5 % 4,752 4,291 10.7 % -------- -------- -------- -------- Operating loss $(2,360) $(1,491) 58.3 % $(4,140) $(3,221) 28.5 % -------- -------- -------- -------- -------- -------- -------- -------- Total operating income $ 7,280 $ 8,147 (10.6)% $ 9,526 $12,140 (21.5)% -------- -------- -------- -------- -------- -------- -------- -------- Net income 4,925 5,839 (15.7)% 5,839 8,225 (29.0)% Preferred dividends (1,002) (1,908) (47.5)% (2,005) (1,908) - % -------- -------- -------- -------- Earnings available to common shareholders 3,923 3,931 (0.2)% 3,834 6,317 (39.3)% Earnings per common share - basic ($) $ 0.08 $ 0.08 0.0 % $ 0.08 $ 0.13 (41.1)% - diluted ($) $ 0.07 $ 0.08 (12.5)% $ 0.07 $ 0.13 (42.5)% ------------------------------------------------------------------------- 
 CONSOLIDATED BALANCE SHEET (unaudited) (in thousands, except for per share amounts) As at As at June 30 December 31 2009 2008 ------------------------------------------------------------------------- ASSETS Cash and cash equivalents $ 48,627 $ 28,563 Interest rate swap (Note 14) 67 - Marketable securities - held-for-trading (Note 14) 55,350 53,091 Marketable securities - available-for-sale (Note 14) 16,448 103,808 Mortgages and loans (Note 6 and 14) 341,453 272,135 Equity investments 41,305 38,040 Accounts receivable 29,931 23,999 Prepaid expenses 7,955 8,039 Future income taxes 668 539 Capital assets 16,348 15,325 Intangible assets 34,684 27,996 Goodwill 118,089 105,285 ------------------------------------------------------------------------- $ 710,925 $ 676,820 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES Customer deposits $ 329,570 $ 333,130 Actuarial liabilities 37,732 38,256 Provision for unpaid and unreported claims 9,860 8,510 Accounts payable and accrued liabilities 56,263 50,378 Income taxes payable (recoverable) 1,077 (800) Long-term debt (Note 7) 63,378 38,151 Future income taxes 5,666 5,480 ------------------------------------------------------------------------- Total liabilities 503,546 473,105 ------------------------------------------------------------------------- SHAREHOLDERS' EQUITY Share capital (Note 8) 173,438 173,438 Other paid in capital (Note 7) 268 - Contributed surplus 1,971 1,975 ------------------------------------------------------------------------- 175,677 175,413 Accumulated other comprehensive income (loss) 326 (296) Retained earnings 31,376 28,598 ------------------------------------------------------------------------- Total shareholders' equity 207,379 203,715 ------------------------------------------------------------------------- $ 710,925 $ 676,820 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (unaudited) (in thousands, except for per share amounts) Three months ended Six months ended June 30 June 30 2009 2008 2009 2008 ------------------------------------------------------------------------- REVENUE Commission and other customer income $ 24,540 $ 22,129 $ 42,981 $ 38,927 Premium income 9,678 7,717 18,125 14,878 Interest income on customer loans 5,451 4,610 10,373 9,551 Investment income Change in fair value of held-for-trading securities 758 (615) 627 (158) Realized gain (loss) on sales of held-for-trading securities 24 (25) 30 (4) Realized loss on sales of available-for-sale assets (3) - (731) - Other net investment income 430 555 853 1,279 ------------------------------------------------------------------------- 40,878 34,371 72,258 64,473 EXPENSES Operating expenses 24,104 20,210 45,662 39,138 Policyholder benefits 5,199 2,782 8,832 6,487 Interest expense - customer deposits 3,778 3,103 7,432 6,499 Provision for credit losses (Note 14) 517 129 806 209 ------------------------------------------------------------------------- Income before the following: 7,280 8,147 9,526 12,140 Income from equity investments 1,088 845 835 1,458 Gain on sale of intangible assets - 598 - 598 Interest and financing costs on long-term debt (1,041) (553) (1,603) (1,136) Amortization of intangible assets (450) (278) (862) (630) Amortization of capital assets (736) (841) (1,427) (1,356) ------------------------------------------------------------------------- Income before income taxes 6,141 7,918 6,469 11,074 Income taxes (1,216) (2,079) (630) (2,849) ------------------------------------------------------------------------- NET INCOME FOR THE PERIOD $ 4,925 $ 5,839 $ 5,839 $ 8,225 ------------------------------------------------------------------------- Retained earnings, beginning of period $ 27,981 29,923 28,598 28,015 Preferred share dividends (1,002) (1,908) (2,005) (1,908) Common share dividends (528) (493) (1,056) (971) ------------------------------------------------------------------------- Retained earnings, end of period $ 31,376 $ 33,361 $ 31,376 $ 33,361 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Earnings per share (Note 9) Basic $ 0.08 $ 0.08 $ 0.08 $ 0.13 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Diluted $ 0.07 $ 0.08 $ 0.07 $ 0.13 
For further information: Arlene Beggs, Executive Assistant to the CEO, Western Financial Group, (403) 652-2663, [ info@westernfinancialgroup.net ]