SOURCE: West Bancorporation

West Bancorporation

October 29, 2009 08:00 ET

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. (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)


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%

Contact Information

  • For more information contact:
    Doug Gulling
    Executive Vice President and Chief Financial Officer
    (515) 222-2309