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West Bancorporation, Inc. Announces Additional Provision for Loan Losses for the First Quarter of 2008
West Bancorporation, Inc. Announces Additional Provision for Loan Losses for the First Quarter of 2008
WEST DES MOINES, Iowa, May 6 /PRNewswire-FirstCall/ -- West
Bancorporation, Inc. (Nasdaq: WTBA) (the "Company"), parent company ofWest
Bank and WB Capital Management Inc. announced today that it is increasing its
provision for loan losses for the first quarter of 2008 by $5 million due to a
recent event.
On April 25, 2008 Regency Homes, aWest Des Moines, Iowa based homebuilder
("Regency") announced that it was suspending business.West Bank does not have
any loans directly to Regency, however it does have seven loans outstanding to
individuals related to Regency and six loans outstanding to limited liability
companies in which the aforementioned individuals and others are owners.
These loans total approximately $22 million. Approximately $18 million of
loans are secured by first mortgages and limited guarantees from the owners of
the borrowers. Loans totaling approximately $4 million are unsecured.
None of these loans are in default and several of the loans are believed
to have collateral values sufficient to cover the amounts owed toWest Bank.
Nevertheless, all of these loans are deemed to be impaired because of
Regency's financial difficulties.West Bank intends to continue to work to
restructure the loans in a manner that could result in additional collateral
and ultimately full payment.
As a result of Regency's decision to cease operations,West Bank is
increasing the first quarter provision to its allowance for loan losses by $5
million over what was previously communicated.
West Bancorporation, Inc. issued a press release on April 17, 2008
announcing its first quarter 2008 earnings. Due to the developments described
above, the Company is adjusting its results for the first quarter of 2008.
As a result of the additional provision for loan losses of $5 million, net
income of the Company for the first quarter was $1,374,000 or $0.08 per share
compared to $4,444,000 or $0.25 per share for the first quarter of 2007. The
return on average equity and return on average assets were 4.54 percent and
0.42 percent, respectively, compared to 15.86 percent and 1.38 percent,
respectively, for the first quarter of 2007. The allowance for loan losses as
a percent of total loans as adjusted was 1.42 percent as of March 31, 2008,
compared to .091 percent at the end of 2007 and .092 percent as of March 31,
2007. Non-performing assets as a percentage of loans at March 31, 2008, was
1.33 percent compared to 0.61 percent at 2007 year end and 0.31 percent a year
ago.
Because the Company andWest Bank remain well-capitalized, no reduction in
the quarterly dividend is currently anticipated.
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 ratio. 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," "should" or
"anticipates," or references to estimates or similar expressions. 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; 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)
March 31, March 31,
CONSOLIDATED STATEMENTS OF CONDITION 2008 2007
Assets
Cash and due from banks $ 50,357 $ 30,931
Short-term investments 45,494 24,426
Securities 166,722 260,016
Loans held for sale 1,597 252
Loans 1,005,824 946,493
Allowance for loan losses (14,260) (8,743)
Loans, net 991,564 937,750
Goodwill and other intangible assets 26,885 27,703
Bank-owned life insurance 24,533 23,172
Other assets 25,789 25,847
Total assets $1,332,941 $1,330,097
Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing $204,690 $193,111
Interest-bearing
Demand 80,537 71,776
Savings 233,270 209,070
Time 365,354 450,057
Total deposits 883,851 924,014
Short-term borrowings 143,058 143,918
Long-term borrowings 173,369 134,369
Other liabilities 13,323 11,903
Stockholders' equity 119,340 115,893
Total liabilities and
stockholders' equity $1,332,941 $1,330,097
PER COMMON SHARE MARKET INFORMATION (1)
Net Income Dividends High Low
2008
1st quarter $0.08 $0.160 $14.43 $11.71
2007
1st quarter $0.25 $0.160 $18.25 $14.29
2nd quarter 0.29 0.160 16.36 14.17
3rd quarter 0.28 0.160 16.19 14.68
4th quarter 0.25 0.160 15.98 11.85
(1) The prices shown are the high and low sale prices for the Company's
common stock, which trades on the NASDAQ Global 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
March 31,
CONSOLIDATED STATEMENTS OF INCOME 2008 2007
Interest income
Loans $16,377 $17,104
Securities 2,326 2,855
Other 160 289
Total interest income 18,863 20,248
Interest expense
Deposits 5,972 7,572
Short-term borrowings 1,293 1,683
Long-term borrowings 1,722 1,682
Total interest expense 8,987 10,937
Net interest income 9,876 9,311
Provision for loan losses 5,600 300
Net interest income after provision for
loan losses 4,276 9,011
Noninterest income
Service charges on deposit accounts 1,046 1,128
Trust services 194 181
Investment advisory fees 1,938 1,959
Increase in cash value of bank-owned
life insurance 192 216
Net realized gains from sales of securities
available for sale 5 4
Other income 461 382
Total noninterest income 3,836 3,870
Noninterest expense
Salaries and employee benefits 3,731 3,616
Occupancy 900 934
Data processing 492 467
Other expense 1,546 1,437
Total noninterest expense 6,669 6,454
Income before income taxes 1,443 6,427
Income taxes 69 1,983
Net income $1,374 $4,444
PERFORMANCE HIGHLIGHTS
Return on average equity 4.54% 15.86%
Return on average assets 0.42% 1.38%
Net interest margin 3.38% 3.24%
Efficiency ratio 47.10% 47.53%
SOURCE West Bancorporation, Inc.
Copyright © 2008, PRNewswire
Copyright © 2008, NewsBlaze,
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