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Western Financial Group announces Q2 results

^{Published on 2010-08-12 16:35:49 - Market Wire}
 

 Financial Highlights (unaudited) (in $ thousands Three Months ended Six Months ended except for per June 30 June 30 share amounts) 2010 2009 % Change 2010 2009 % Change ------------------------------------------- ----------------------------- The Network Commissions and other customer revenue $ 31,249 $ 23,109 35.2% $ 53,668 $ 40,631 32.1% Operating expenses 20,373 14,882 36.9% 38,834 28,813 34.8% ------------------------------------------- ----------------------------- Operating income $ 10,876 $ 8,227 32.2% $ 14,834 $ 11,818 25.5% ------------------------------------------- ----------------------------- ------------------------------------------- ----------------------------- Bank West Interest and investment income $ 6,961 $ 6,685 4.1% $ 13,571 $ 12,224 11.0% Interest expense - customer deposits 3,176 3,778 -15.9% 6,153 7,432 -17.2% ------------------------------------------- ----------------------------- Net interest and investment income 3,785 2,907 30.2% 7,418 4,792 54.8% Provisions for credit losses 748 517 44.7% 924 806 14.6% Operating expenses 2,447 2,625 -6.8% 4,764 4,724 0.8% ------------------------------------------- ----------------------------- Operating income (loss) $ 590 $ (235) 350.9% $ 1,730 $ (738) 334.5% ------------------------------------------- ----------------------------- ------------------------------------------- ----------------------------- Western Life Premium and investment income $ 13,608 $ 10,841 25.5% $ 24,411 $ 18,791 29.9% Policyholder benefits 6,910 5,199 32.9% 12,637 8,832 43.1% Operating expenses 4,766 3,995 19.3% 8,643 7,373 17.2% ------------------------------------------- ----------------------------- Operating income $ 1,932 $ 1,647 17.3% $ 3,131 $ 2,586 21.1% ------------------------------------------- ----------------------------- ------------------------------------------- ----------------------------- Western Financial Insurance Premium and investment income $ 9,189 $ - - $ 18,221 $ - - Policyholder benefits 4,790 - - 8,732 - - Operating expenses 3,278 - - 6,328 - - ------------------------------------------- ----------------------------- Operating income $ 1,121 $ - - $ 3,161 $ - - ------------------------------------------- ----------------------------- ------------------------------------------- ----------------------------- Corporate and all other Other revenues $ 295 $ 243 21.3% $ 709 $ 612 15.8% Operating expenses 3,173 2,602 21.9% 5,647 4,752 18.8% ------------------------------------------- ----------------------------- Operating loss $ (2,878)$ (2,359) 22.0% $ (4,938)$ (4,140) 19.3% ------------------------------------------- ----------------------------- ------------------------------------------- ----------------------------- Total operating income $ 11,641 $ 7,280 59.9% $ 17,918 $ 9,526 88.1% ------------------------------------------- ----------------------------- ------------------------------------------- ----------------------------- Net income $ 5,742 $ 4,925 16.6% $ 8,013 $ 5,839 37.2% Preferred dividends (1,797) (1,002) 79.3% (3,629) (2,005) 81.0% ------------------------------------------- ----------------------------- Earnings (loss) available to common shareholders $ 3,945 $ 3,923 0.6% $ 4,384 $ 3,834 14.3% ------------------------------------------- ----------------------------- ------------------------------------------- ----------------------------- Earnings per share - basic ($) 0.08 $ 0.08 0.09 $ 0.08 - diluted ($) 0.08 $ 0.07 0.09 $ 0.07 -------------------------------------------------------------- 2010 KEY OBJECTIVES -------------------------------------------------------------- Network Same Store Sales 4%-7% growth Network Operating Margin 28% Bank West Specific Provisions 75 bps or less Western Financial Insurance Loss Ratio 55% or less Western Life Loss Ratio 45% or less Overall 2010 Net Income $18.5 to $20 million -------------------------------------------------------------- 

 CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands, except for per share amounts) As at As at June 30 December 31 Note 2010 2009 ------------------------------------------------------------------------- ASSETS Cash and cash equivalents $ 82,867 $ 58,463 Securities - held-for-trading 65,514 61,373 Securities - available-for-sale 3 36,357 30,901 Mortgages, loans and leases, net of allowance for credit losses 4 374,252 355,621 Interest rate swaps - 90 Equity investments 12,152 11,591 Capital assets 22,785 21,630 Goodwill 6 160,825 148,205 Intangible assets 65,162 66,719 Accounts receivable 49,590 51,114 Prepaid expenses 8,394 7,231 Future income taxes 1,283 1,102 Other assets 1,890 2,286 ------------------------------------------------------------------------- Total assets $ 881,071 $ 816,326 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES Customer deposits $ 337,409 $ 317,953 Actuarial liabilities 42,483 40,032 Provision for unpaid and unreported claims 16,289 13,919 Debt 76,318 79,771 Interest rate swaps 169 - Due to policyholders 19,384 20,392 Accounts payable and accrued liabilities 98,146 82,700 Income taxes payable 1,327 1,809 Future income taxes 13,376 13,199 ------------------------------------------------------------------------- Total liabilities 604,901 569,775 ------------------------------------------------------------------------- ------------------------------------------------------------------------- SHAREHOLDERS' EQUITY Share capital 7 233,356 206,905 Other paid in capital 268 268 Contributed surplus 2,112 2,041 ------------------------------------------------------------------------- 235,736 209,214 Accumulated other comprehensive loss 8 (248) (129) Retained earnings 40,682 37,466 ------------------------------------------------------------------------- Total shareholders' equity 276,170 246,551 ------------------------------------------------------------------------- $ 881,071 $ 816,326 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF INCOME (unaudited) (in thousands, except for per share amounts) Three months ended June 30 Six months ended June 30 2010 2009 2010 2009 ------------------------------------------------------------------------- REVENUE Commission and other customer income $ 32,190 $ 24,540 $ 55,561 $ 42,981 Premium income 19,823 9,678 37,843 18,125 Interest income on customer loans 6,386 5,451 12,560 10,373 Investment income Change in fair value of held-for-trading securities 2,240 758 3,272 627 Realized gain (loss) on sales of available-for-sale assets 52 (3) 88 (731) Realized gain (loss) on sales of held-for-trading securities (32) 24 7 30 Other net investment income 643 430 1,249 853 ------------------------------------------------------------------------- 61,302 40,878 110,580 72,258 EXPENSES Operating expenses 34,037 24,104 64,216 45,662 Policyholder benefits 11,700 5,199 21,369 8,832 Interest expense - customer deposits 3,176 3,778 6,153 7,432 Provision for credit losses 748 517 924 806 ------------------------------------------------------------------------- Income before the following: 11,641 7,280 17,918 9,526 Income from equity investments 449 1,088 592 835 Interest and financing costs on debt (1,595) (1,041) (3,005) (1,603) Amortization of capital assets (893) (736) (1,692) (1,427) Amortization of intangible assets (779) (450) (1,557) (862) ------------------------------------------------------------------------- Income before income taxes 8,823 6,141 12,256 6,469 Income taxes (3,081) (1,216) (4,243) (630) ------------------------------------------------------------------------- NET INCOME FOR THE PERIOD $ 5,742 $ 4,925 $ 8,013 $ 5,839 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Preferred share dividends $ (1,797) $ (1,002) $ (3,629) $ (2,005) ------------------------------------------------------------------------- Net income available to common shareholders $ 3,945 $ 3,923 $ 4,384 $ 3,834 Average number of common shares 49,507 49,345 49,507 49,345 Average number of diluted common shares 49,548 54,915 49,553 54,920 Earnings per common share Basic $ 0.08 $ 0.08 $ 0.09 $ 0.08 ------------------------------------------------------------------------- Diluted $ 0.08 $ 0.07 $ 0.09 $ 0.07