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Western Financial Group reports third quarter 2009 results

^{Published on 2009-11-12 17:47:24 - Market Wire}
 

 ----------------------------------------------------------- 2009 OBJECTIVES Same Store Revenue 5% to 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 (unaudited) (in $ thousands except for per For the three months For the nine months share amounts) ended Sept 30 ended Sept 30 ------------------------------------------------------------------------- 2009 2008 % Change 2009 2008 % Change The Network Commissions and other customer income $20,425 $19,825 3.0 % $61,055 $58,186 4.9 % Operating expenses 14,594 14,243 2.5 % 43,407 40,810 6.4 % ------------------------------------------------------------------------- Operating income $5,831 $5,582 4.5 % $17,648 $17,376 1.6 % ------------------------------------------------------------------------- ------------------------------------------------------------------------- Bank West Interest and investment income 6,795 4,677 45.3 % 19,017 14,228 33.7 % Interest expense - customer deposits 3,723 3,185 16.9 % 11,155 9,684 15.2 % ------------------------------------------------------------------------- Net interest and investment income 3,072 1,492 105.9 % 7,862 4,544 73.0 % Provisions for credit losses - General 202 38 431.6 % 393 (17) 2411.8 % - Specific 720 322 123.6 % 1,335 586 127.8 % Operating expenses 1,869 1,164 60.6 % 6,593 2,875 129.3 % ------------------------------------------------------------------------- Operating (loss) income $ 281 $ (32) (977.5)% $ (459) $ 1,100 (141.7)% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Western Life Premium and investment income 12,260 7,092 72.9 % 31,052 22,584 37.5 % Policyholder benefits 7,224 2,550 183.3 % 16,056 9,037 77.7 % Operating expenses 3,997 3,456 15.7 % 11,370 10,025 13.4 % ------------------------------------------------------------------------- Operating income $ 1,039 $ 1,086 (4.3)% $ 3,626 $ 3,522 3.0 % ------------------------------------------------------------------------- ------------------------------------------------------------------------- Corporate and all other Other revenues 608 418 45.4 % 1,219 1,487 (18.0)% Operating expenses 2,505 2,605 (3.9)% 7,257 6,896 5.2 % ------------------------------------------------------------------------- Operating loss $(1,897) $(2,187) (13.3)% $(6,038) $(5,409) 11.6 % ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total operating income $ 5,254 $ 4,449 18.1 % $14,777 $16,589 (10.9)% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net income 4,147 2,100 97.5 % 9,986 10,325 (3.3)% Preferred dividends (1,202) (531) 126.3 % (3,207) (1,908) 68.1 % ------------------------------------------------------------------------- Earnings available to common shareholders 2,945 1,569 87.7 % 6,779 8,417 (19.5)% Earnings per common share - basic ($) $ 0.06 $ 0.04 49.2 % $ 0.14 $ 0.17 (19.2)% ------------------------------------------------------------------------- - diluted ($) $ 0.06 $ 0.04 48.9 % $ 0.13 $ 0.17 (21.2)% ------------------------------------------------------------------------- 

 CONSOLIDATED BALANCE SHEET (unaudited) (in thousands, except for per share amounts) As at As at September 30 December 31 2009 2008 ------------------------------------------------------------------------- ASSETS Cash and cash equivalents $ 73,842 $ 28,563 Interest rate swap (Note 14) 97 - Marketable securities - held-for-trading (Note 14) 61,007 53,091 Marketable securities - available-for-sale (Note 14) 13,882 103,808 Mortgages and loans (Note 6 and 14) 344,854 272,135 Equity investments 50,861 38,040 Accounts receivable 25,527 23,999 Prepaid expenses 7,271 8,039 Future income taxes 548 539 Capital assets 16,982 15,325 Intangible assets 34,235 27,996 Goodwill 118,105 105,285 ------------------------------------------------------------------------- $ 747,211 $ 676,820 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES Customer deposits $ 330,234 $ 333,130 Actuarial liabilities 40,635 38,256 Provision for unpaid and unreported claims 10,291 8,510 Accounts payable and accrued liabilities 53,631 50,378 Income taxes payable (recoverable) 1,379 (800) Long-term debt (Notes 7 and 17) 61,774 38,151 Future income taxes 6,270 5,480 ------------------------------------------------------------------------- Total liabilities 504,214 473,105 ------------------------------------------------------------------------- SHAREHOLDERS' EQUITY Share capital (Note 8) 207,136 173,438 Other paid in capital (Note 7) 268 - Contributed surplus 1,971 1,975 ------------------------------------------------------------------------- 209,375 175,413 Accumulated other comprehensive income (loss) (170) (296) Retained earnings 33,792 28,598 ------------------------------------------------------------------------- Total shareholders' equity 242,997 203,715 ------------------------------------------------------------------------- $ 747,211 $ 676,820 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (unaudited) (in thousands, except for per share amounts) Three months ended Nine months ended Sept 30 Sept 30 2009 2008 2009 2008 ------------------------------------------------------------------------- REVENUE Commission and other customer income $ 20,925 $ 20,119 $ 62,225 $ 59,046 Premium income 9,522 8,121 27,647 22,999 Interest income on customer loans 6,487 4,677 18,422 14,228 Investment income Change in fair value of held-for-trading securities 2,304 (1,458) 2,930 (1,616) Realized gain (loss) on sales of held-for-trading securities 27 2 57 (2) Realized gain (loss) on sales of available-for-sale assets 396 - (154) - Other net investment income 427 551 1,216 1,830 ------------------------------------------------------------------------- 40,088 32,012 112,343 96,485 EXPENSES Operating expenses 22,965 21,468 68,627 60,606 Policyholder benefits 7,224 2,550 16,056 9,037 Interest expense - customer deposits 3,723 3,185 11,155 9,684 Provision for credit losses (Note 14) 922 360 1,728 569 ------------------------------------------------------------------------- Income before the following: 5,254 4,449 14,777 16,589 Income from equity investments 1,783 67 2,618 1,525 Gain on sale of investments and capital assets 371 303 374 901 Interest and financing costs on long-term debt (997) (540) (2,600) (1,676) Amortization of intangible assets (449) (316) (1,311) (946) Amortization of capital assets (764) (731) (2,191) (2,087) ------------------------------------------------------------------------- Income before income taxes 5,198 3,232 11,667 14,306 Income taxes (1,051) (1,132) (1,681) (3,981) ------------------------------------------------------------------------- NET INCOME FOR THE PERIOD $ 4,147 $ 2,100 $ 9,986 $ 10,325 ------------------------------------------------------------------------- Retained earnings, beginning of period $ 31,376 33,361 28,598 28,015 Preferred share dividends (1,202) - (3,207) (1,908) Common share dividends (529) (531) (1,585) (1,502) ------------------------------------------------------------------------- Retained earnings, end of period $ 33,792 $ 34,930 $ 33,792 $ 34,930 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Earnings per share (Note 9) Basic $ 0.06 $ 0.04 $ 0.14 $ 0.17 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Diluted $ 0.06 $ 0.04 $ 0.13 $ 0.17