Business & Finance
Business and FinanceBusiness and Finance 
Thu, October 29, 2009
West Bancorporation, Inc. Announces Results for 3rd Quarter and First Nine Months of 2009
WEST DES MOINES, IA--(Marketwire - October 29, 2009) - West Bancorporation, Inc. (
Total net income available to common shareholders was $1.3 million for the third quarter of 2009 compared to a net loss in the same quarter last year of ($360,000). On a per common share basis, third quarter 2009 net income was $0.08 compared to a net loss of ($0.02) for the third quarter of 2008. "We are very pleased to announce the return to a quarterly profit given the current adverse economic conditions affecting our customers," said Chairman Jack Wahlig.
The results for the third quarter included a provision for loan losses of $3 million and a further goodwill impairment charge for the Company's investment in WB Capital of $1.5 million. The goodwill impairment charge was made to reduce the book value of WB Capital to the approximate amount the Company will recognize when the transaction closes, which is targeted to be on or before December 31, 2009. During the third quarter, the Company also recognized additional impairment losses on investment securities of ($827,000) which were partially offset by gains from the sale of investment securities of $507,000. "We are continuing to reduce our exposure to trust preferred securities and decrease the risk in our investment portfolio," said Doug Gulling, Executive Vice President and Chief Financial Officer.
"During the third quarter, total nonperforming assets declined by $12.6 million to $51.8 million. In addition, we are experiencing expected changes in the categories of nonperforming assets. Nonaccrual loans decreased by $15.1 million, restructured loans increased by $4 million, and other real estate owned grew by $12 million. These developments show our progress in working through problem loans," commented David Milligan, Chief Executive Officer. "There were a number of positive occurrences in our third quarter financial results which are encouraging. However, we are keenly aware that one quarter is not a trend. We remain focused on improving all areas of our operations, particularly credit quality."
Total loans outstanding declined $53 million since June 30, 2009. "The recession has caused the demand for financing to decline. We are seeing fewer new quality loan requests. That, coupled with some significant scheduled loan payoffs, resulted in the reduction in loans outstanding," stated Brad Winterbottom, West Bank's President.
The allowance for loan losses as a percentage of loans outstanding as of September 30, 2009 was 1.85 percent. This is down from 2.12 percent at June 30, 2009. This ratio declined because $7.1 million of loans were charged off during the third quarter of 2009. Management believes the allowance is adequate to absorb the losses inherent in the loan portfolio, although the adverse economic environment will continue to be a significant determinant of future loan losses. "The overall economy may be bottoming out, but in our opinion we are not seeing an upward turn in the local economy at this point in time," said Milligan.
West Bank's core deposits increased by $31 million during the third quarter. Total deposits decreased by $16 million due to a decline in non-core wholesale deposits. That reduction was a planned development. Non-core deposits are purchased from entities with no other direct relationship with West Bank.
For the first nine months of 2009, the net loss for common shareholders was ($19.1) million compared to net income of $5.5 million for the first nine months of 2008. The common stock loss per share for the first nine months of 2009 was ($1.10) compared to earnings per common share of $0.32 for the first nine months of 2008.
At its quarterly meeting on October 21, 2009, the Board of Directors of the Company voted to forgo a quarterly dividend on its common stock.
The Company and West Bank continue to be well-capitalized under all regulatory measures. The following are the regulatory capital ratios as of September 30, 2009:
Requirements to Be Well-Capitalized Actual Amount Ratio Amount Ratio --------- ----------- --------- ----------- As of September 30, 2009: Total Capital (to Risk-Weighted Assets) Consolidated n/a n/a $ 168,793 14.0 % West Bank $ 119,973 10.0 % 164,435 13.7 % Tier I Capital (to Risk-Weighted Assets) Consolidated n/a n/a 153,664 12.7 % West Bank 71,984 6.0 % 139,381 11.6 % Tier I Capital (to Average Assets) Consolidated n/a n/a 153,664 10.0 % West Bank 76,665 5.0 % 139,381 9.1 %
The Company filed its third quarter Form 10-Q with the Securities and Exchange Commission today. Please refer to it for a more in-depth analysis of our results. It is available on the Investor Relations section of the Company's website at [ www.westbankiowa.com ].
The Company will discuss its results for the third quarter and first nine months of 2009 during a conference call scheduled for 2:00 p.m. central time today, Thursday, October 29, 2009. The telephone number for the conference call is 800-860-2442. A recording of the call will be available until November 13, 2009 at 877-344-7529, pass code: 426999.
West Bancorporation, Inc. is headquartered in West Des Moines, Iowa. Serving Iowans since 1893, West Bank, a wholly owned subsidiary of West Bancorporation, Inc., is a community bank that focuses on lending, deposit services, and trust services for consumers and small- to medium-sized businesses. West Bank has two full-service offices in Iowa City, one full-service office in Coralville, and eight full-service offices in the greater Des Moines area. WB Capital Management Inc., also a wholly owned subsidiary of West Bancorporation, Inc., has an office in West Des Moines, Iowa. It provides portfolio management services to retirement plans, corporations, public funds, mutual funds, foundations, endowments, and high net worth individuals.
The information contained in this report may contain forward-looking statements about the Company's growth and acquisition strategies, new products and services, and future financial performance, including earnings and dividends per share, return on average assets, return on average equity, efficiency ratio and capital ratios. Certain statements in this report constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements preceded by, followed by or that include the words "believes," "expects," "intends," "should," or "anticipates," or similar references or references to estimates or predictions. Such forward-looking statements are based upon certain underlying assumptions, risks and uncertainties. Because of the possibility of change in the underlying assumptions, actual results could differ materially from these forward-looking statements. Risks and uncertainties that may affect future results include: interest rate risk; competitive pressures; pricing pressures on loans and deposits; changes in credit and other risks posed by the Company's loan and investment portfolios, including declines in commercial or residential real estate values or changes in the allowance for loan losses dictated by new market conditions or regulatory requirements; actions of bank and non-bank competitors; changes in local and national economic conditions; changes in regulatory requirements, including actions of the Securities and Exchange Commission and/or the Federal Reserve Board; changes in the Treasury's Capital Purchase Program; and customers' acceptance of the Company's products and services. The Company undertakes no obligation to revise or update such forward-looking statements to reflect current events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
WEST BANCORPORATION, INC. AND SUBSIDIARIES Financial Information (unaudited) (in thousands, except per share data) CONSOLIDATED STATEMENTS OF September 30, September 30, CONDITION 2009 2008 ------------- ------------- Assets Cash and due from banks $ 28,631 $ 25,204 Short-term investments 123,685 87,188 Securities 222,526 191,681 Loans held for sale 1,152 77 Loans 1,062,333 1,093,402 Allowance for loan losses (19,658) (16,484) ------------- ------------- Loans, net 1,042,675 1,076,918 Goodwill and other intangible assets 309 13,915 Bank-owned life insurance 25,186 25,037 Other real estate owned 18,089 4,042 Other assets 37,358 40,179 ------------- ------------- Total assets $ 1,499,611 $ 1,464,241 ============= ============= Liabilities and Stockholders' Equity Deposits: Noninterest- bearing $ 201,813 $ 187,727 Interest- bearing Demand 164,092 120,642 Savings 380,497 222,488 Time of $100,000 or more 206,167 219,148 Other Time 208,579 368,889 ------------- ------------- Total deposits 1,161,148 1,118,894 Short-term borrowings 50,304 70,871 Long-term borrowings 145,619 147,869 Other liabilities 10,162 11,746 Stockholders' equity 132,378 114,861 ------------- ------------- Total liabilities and stockholders' equity $ 1,499,611 $ 1,464,241 ============= ============= PER COMMON SHARE MARKET INFORMATION (1) Net Income (Loss) Dividends High Low ------------- -------------- ------------- ------------- 2009 1st quarter $ 0.14 $ 0.08 $ 12.40 $ 4.36 2nd quarter (1.32) 0.01 9.50 5.00 3rd quarter 0.08 - 6.38 4.61 2008 1st quarter $ 0.08 $ 0.16 $ 14.43 $ 11.71 2nd quarter 0.26 0.16 13.48 8.63 3rd quarter (0.02) 0.16 16.21 7.30 4th quarter 0.12 0.16 13.50 8.67 (1) The prices shown are the high and low sale prices for the Company's common stock, which trades on the NASDAQ Global Select Market, under the symbol WTBA. The market quotations, reported by NASDAQ, do not include retail markup, markdown or commissions. WEST BANCORPORATION, INC. AND SUBSIDIARIES Financial Information (continued) (unaudited) (in thousands, except per share data) Three months ended Nine months ended CONSOLIDATED STATEMENTS OF September 30, September 30, OPERATIONS 2009 2008 2009 2008 --------- --------- --------- --------- Interest income Loans $ 14,914 $ 15,987 $ 45,038 $ 47,677 Securities 2,229 2,163 6,027 6,431 Other 73 36 384 271 --------- --------- --------- --------- Total interest income 17,216 18,186 51,449 54,379 --------- --------- --------- --------- Interest expense Deposits 4,672 5,404 15,242 15,914 Short-term borrowings 65 591 240 2,603 Long-term borrowings 1,706 1,804 5,062 5,364 --------- --------- --------- --------- Total interest expense 6,443 7,799 20,544 23,881 --------- --------- --------- --------- Net interest income 10,773 10,387 30,905 30,498 Provision for loan losses 3,000 7,000 21,500 13,600 --------- --------- --------- --------- Net interest income after provision for loan losses 7,773 3,387 9,405 16,898 --------- --------- --------- --------- Noninterest income Service charges on deposit accounts 1,078 1,287 3,120 3,583 Trust services 222 207 581 605 Gains and fees on sales of residential mortgages 324 136 859 356 Increase in cash value of bank-owned life insurance 199 248 562 697 Proceeds from bank-owned life insurance - - 840 - Other income 528 468 1,559 1,412 --------- --------- --------- --------- Total noninterest income 2,351 2,346 7,521 6,653 --------- --------- --------- --------- Investment securities gains (losses), net Total other-than-temporary impairment losses (986) (1,725) (3,414) (1,725) Portion of loss recognized in other comprehensive income (loss) before taxes 159 - 897 - --------- --------- --------- --------- Net impairment losses recognized in earnings (827) (1,725) (2,517) (1,725) Realized securities gains (losses), net 507 66 1,960 71 --------- --------- --------- --------- Investment securities gains (losses), net (320) (1,659) (557) (1,654) --------- --------- --------- --------- Noninterest expense Salaries and employee benefits 2,294 2,482 7,494 7,541 Occupancy 794 748 2,637 2,242 Data processing 455 426 1,312 1,357 FDIC insurance expense 531 209 2,267 394 Goodwill impairment - - 13,376 - Other expense 1,834 1,406 5,120 4,135 --------- --------- --------- --------- Total noninterest expense 5,908 5,271 32,206 15,669 --------- --------- --------- --------- Income (loss) before income taxes 3,896 (1,197) (15,837) 6,228 Income taxes (benefits) 906 (1,015) (8,021) 796 --------- --------- --------- --------- Income (loss) from continuing operations 2,990 (182) (7,816) 5,432 --------- --------- --------- --------- Income (loss) from discontinued operations before income taxes (1,048) (301) (10,394) 172 Income taxes (benefits) 37 (123) (777) 76 --------- --------- --------- --------- Income (loss) from discontinued operations (1,085) (178) (9,617) 96 --------- --------- --------- --------- Preferred stock dividends and accretion of discount (571) - (1,708) - --------- --------- --------- --------- Net income (loss) available to common stockholders $ 1,334 $ (360) $ (19,141) $ 5,528 ========= ========= ========= ========= Three months ended Nine months ended September 30, September 30, SUPPLEMENTAL INFORMATION 2009 2008 2009 2008 --------- --------- --------- --------- Income (loss) from continuing operations $ 2,990 $ (182) $ (7,816) $ 5,432 Preferred stock dividends and accretion of discount (571) - (1,708) - --------- --------- --------- --------- Net income (loss) from continuing operations available to common stockholders $ 2,419 $ (182) $ (9,524) $ 5,432 ========= ========= ========= ========= PERFORMANCE HIGHLIGHTS Return on average equity 5.74% -1.22% -16.01% 6.18% Return on average assets 0.49% -0.10% -1.44% 0.55% Net interest margin 3.11% 3.37% 2.86% 3.44% Efficiency ratio 42.84% 39.71% 46.63% 40.55%