West Bancorporation, Inc. Reports Second Quarter 2011 Results and Quarterly Dividend

Jul 29, 2011, 08:30 ET from West Bancorporation, Inc.

WEST DES MOINES, Iowa, July 29, 2011 /PRNewswire/ -- West Bancorporation, Inc. (NASDAQ: WTBA), parent company of West Bank, today reported second quarter net income of $3.9 million, a 51% increase compared to second quarter 2010 net income of $2.6 million.  Second quarter 2011 net income per share available to common shareholders was $0.12, which is the same amount earned in the second quarter 2010.  Net income per share available to common shareholders was reduced in second quarter 2011 by $445,000 for preferred stock dividends and $1.37 million for the final accretion of discount on the preferred stock sold to the United States Treasury.  The discount accretion was required by the Company's June 29, 2011, complete redemption of preferred stock sold to the Treasury under the Capital Purchase Program.  Second quarter 2010 preferred stock dividends and accretion of discount totaled $572,000.   There will be no future dividends or accretion of discount for the redeemed preferred stock.  

Return on average equity, return on average assets, and net interest margin are all up substantially over the same period last year.  Second quarter 2011 return on average equity was 10.36 percent, up from 7.52 percent in second quarter 2010.  Return on average assets increased to 1.21 percent from 0.63 percent during second quarter 2010.  Net interest margin increased to 3.58 percent from 2.80 percent.  The provision for loan losses fell to $0.45 million from $1.4 million.  Nonperforming assets have fallen 54 percent from a year ago.  West Bank's allowance for loan losses is 2.12 percent of total loans outstanding.

"Second quarter 2011 was very good on multiple fronts," stated President and Chief Executive Officer Dave Nelson.  "Our performance benchmarks improved significantly. We also exited TARP, reduced our regulatory requirements and expense, and our loan portfolio began to grow.  West Bank is clearly performing well.  Our primary focus now is on quality growth."

Total loans outstanding as of June 30, 2011, were $838 million compared to $961 million a year ago, but up from $831 million at March 31, 2011.  "Our business development efforts are generating quality new business opportunities," reported West Bank President Brad Winterbottom.  "We are working on growing the loan portfolio further during the second half of 2011."

On July 27, 2011, the Company's Board of Directors declared a quarterly common stock dividend of $0.05 per share.  The dividend is payable on August 30, 2011, to shareholders of record on August 8, 2011.  "We currently plan to use our increasing net income to pay regular quarterly dividends and internally fund anticipated growth," reported David Milligan, Chairman of the Board.  

West Bancorporation and West Bank have strong capital positions.  West Bank's capital substantially exceeds all of the FDIC's well-capitalized standards.  The following table shows West Bank's regulatory capital dollar amounts and ratios as of June 30, 2011, after the preferred stock was redeemed.  

Requirements to Be

Actual

Well-Capitalized

(in thousands)

Amount

Ratio

Amount

Ratio

As of June 30, 2011:

Total Capital (to Risk-Weighted Assets)

West Bancorporation

$150,791

15.7%

n/a    

n/a    

West Bank

133,511

14.4%

$92,520

10.0%

Tier I Capital (to Risk-Weighted Assets)

West Bancorporation

138,704

14.4%

n/a    

n/a    

West Bank

121,869

13.2%

55,512

6.0%

Tier I Capital (to Average Assets)

West Bancorporation

138,704

10.6%

n/a    

n/a    

West Bank

121,869

9.5%

64,340

5.0%

The Company filed its quarterly report on Form 10-Q with the Securities and Exchange Commission today.  Please refer to that document for a more in-depth discussion of our results.  This document is also available on the Investor Relations section of West Bank's website at www.westbankiowa.com.

The Company will discuss its second quarter 2011 results during a conference call scheduled for today, Friday, July 29, 2011, at 2:00 p.m. Central Time.  The telephone number for the conference call is 877-317-6789.  A recording of the call will be available until August 15, 2011, at 877-344-7529, pass code: 447163.  

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 eight full-service offices in the Des Moines metropolitan area, two full-service offices in Iowa City, and one full-service office in Coralville.

Certain statements in this press release, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements" within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934.  Forward-looking statements may appear throughout this press release.  These forward-looking statements are generally identified by the words "believes," "expects," "intends," "should," "anticipates," "projects," "future," "may," "should," "will," "strategy," "plan," "opportunity," "will be," "will likely result," "will continue," or similar references, or references to estimates, predictions, or future events.  Such forward-looking statements are based upon certain underlying assumptions, risks, and uncertainties.  Because of the possibility that the underlying assumptions are incorrect or do not materialize as expected in the future, 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, limitations, and costs; changes in customers' acceptance of the Company's products and services; and any other risks described in the "Risk Factors" sections of reports made by the Company to the Securities and Exchange Commission.  The Company undertakes no obligation to revise or update such forward-looking statements to reflect current or future events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

WEST BANCORPORATION, INC. AND SUBSIDIARY

Financial Information (unaudited)

(in thousands, except per share data)

CONSOLIDATED STATEMENTS OF CONDITION

June 30, 2011

June 30, 2010

Assets

Cash and due from banks

$       37,944

$       26,596

Short-term investments

64,537

257,277

Securities

271,040

298,409

Loans held for sale

116

1,041

Loans

838,076

961,221

Allowance for loan losses

(17,790)

(21,091)

Loans, net

820,286

940,130

Bank-owned life insurance

25,284

25,844

Other real estate owned

14,693

24,637

Other assets

27,236

34,943

Total assets

$  1,261,136

$  1,608,877

Liabilities and Stockholders' Equity

Deposits:

Noninterest-bearing

$     236,859

$     208,960

Interest-bearing:

Demand

143,078

165,699

Savings

316,450

429,638

Time of $100,000 or more

169,554

350,676

Other Time

95,992

120,414

Total deposits

961,933

1,275,387

Short-term borrowings

48,064

60,790

Long-term borrowings

125,619

125,619

Other liabilities

6,330

7,057

Stockholders' equity

119,190

140,024

Total liabilities and stockholders' equity

$  1,261,136

$  1,608,877

PER COMMON SHARE

MARKET INFORMATION (1)

Net Income

Dividends

High

Low

2011

1st quarter

$    0.23

$        -

$    8.00

$    6.75

2nd quarter

0.12

0.05

8.89

6.94

2010

1st quarter

$    0.16

$        -

$    6.64

$    4.80

2nd quarter

0.12

-

9.04

6.32

3rd quarter

0.19

-

7.28

5.51

4th quarter

0.17

0.05

8.19

6.13

(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.

Three months ended June 30,

Six months ended June 30,

PERFORMANCE HIGHLIGHTS

2011

2010

2011

2010

Return on average equity

10.36%

7.52%

11.40%

8.75%

Return on average assets

1.21%

0.63%

1.30%

0.73%

Net interest margin

3.58%

2.80%

3.60%

2.81%

Efficiency ratio

49.05%

56.33%

48.25%

51.34%

WEST BANCORPORATION, INC. AND SUBSIDIARY

Financial Information (continued) (unaudited)

(in thousands, except per share data)

Three months ended June 30,

Six months ended June 30,

CONSOLIDATED STATEMENTS OF OPERATIONS

2011

2010

2011

2010

Interest income

Loans

$    11,634

$    13,525

$    23,427

$    27,231

Securities

1,696

1,976

3,414

3,952

Other

66

183

127

330

Total interest income

13,396

15,684

26,968

31,513

Interest expense

Deposits

1,743

3,973

3,608

8,013

Short-term borrowings

43

62

89

118

Long-term borrowings

1,197

1,386

2,381

2,985

Total interest expense

2,983

5,421

6,078

11,116

Net interest income

10,413

10,263

20,890

20,397

Provision for loan losses

450

1,400

950

3,400

Net interest income after provision for loan losses

9,963

8,863

19,940

16,997

Noninterest income

Service charges on deposit accounts

805

820

1,555

1,658

Debit card usage fees

378

348

725

656

Service fee from SmartyPig, LLC

-

794

-

1,061

Trust services

207

198

426

406

Gains and fees on sales of residential mortgages

272

286

456

473

Increase in cash value of bank-owned life insurance

223

226

444

444

Gain from bank-owned life insurance

-

-

637

-

Other income

231

247

544

493

Total noninterest income

2,116

2,919

4,787

5,191

Investment securities gains (losses), net

Total other than temporary impairment losses

-

(188)

-

(188)

Portion of loss recognized in other comprehensive income (loss)

before taxes

-

-

-

-

Net impairment losses recognized in earnings

-

(188)

-

(188)

Realized securities gains, net

-

(9)

-

37

Investment securities gains (losses), net

-

(197)

-

(151)

Noninterest expense

Salaries and employee benefits

3,170

2,775

6,225

5,367

Occupancy

821

796

1,637

1,597

Data processing

479

469

930

902

FDIC insurance expense

346

883

895

1,445

Other real estate owned expense

93

550

280

660

Professional fees

237

226

459

474

Miscellaneous losses

27

921

51

988

Other expense

1,203

1,146

2,375

2,329

Total noninterest expense

6,376

7,766

12,852

13,762

Income before income taxes

5,703

3,819

11,875

8,275

Income taxes

1,780

1,216

3,422

2,333

Net income

3,923

2,603

8,453

5,942

Preferred stock dividends and accretion of discount

(1,816)

(572)

(2,387)

(1,141)

Net income available to common stockholders

$      2,107

$      2,031

$      6,066

$      4,801

SOURCE West Bancorporation, Inc.



RELATED LINKS

http://www.westbankiowa.com