EXHIBIT 99
Press Release
October 29, 2009
FOR IMMEDIATE RELEASE
For more information contact:
Doug Gulling, Executive Vice President and Chief Financial Officer (515) 222-2309
WEST BANCORPORATION, INC. ANNOUNCES RESULTS FOR 3rd QUARTER AND FIRST NINE MONTHS OF 2009
West Des Moines, IA – West Bancorporation, Inc. (NASDAQ: WTBA) (the “Company”), parent company of West Bank and WB Capital Management Inc. (“WB Capital”), reports net income available to common shareholders from continuing operations of $2.4 million or $0.14 per share compared to a net loss available to common shareholders from continuing operations of ($182,000) or ($0.01) per share for the same quarter last year. The results of WB Capital, a net loss of ($1.1 Million) or ($0.06) per share compared to a net loss of ($178,000) or ($0.01) per share for the same quarter last year, are considered to be from discontinued operations since the Company entered into an agreement on October 1, 2009, to sell this subsidiary.
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) | ||||||||||||||||
September 30, | September 30, | |||||||||||||||
CONSOLIDATED STATEMENTS OF 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 | |||||||||||||||
September 30, | September 30, | |||||||||||||||
CONSOLIDATED STATEMENTS OF 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 | % |