Exhibit 99
Press Release
January 22, 2009
FOR IMMEDIATE RELEASE
For more information contact:
Doug Gulling, Executive Vice President and Chief Financial Officer (515) 222-2309
WEST BANCORPORATION, INC. ANNOUNCES QUARTERLY DIVIDENDS, ANNUAL MEETING DATE AND RESULTS FOR 4TH QUARTER AND THE YEAR 2008
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 of $2,108,000 or $0.12 per share, for the fourth quarter of 2008, compared to $4,402,000 or $0.25 per share, for the fourth quarter of 2007. The return on average equity and return on average assets were 7.37 percent and 0.57 percent, respectively, for the fourth quarter of 2008. The return on average equity and return on average assets for the fourth quarter of 2007 were 14.51 percent and 1.33 percent, respectively.
Net income for the fourth quarter was reduced by an impairment charge for a pooled trust preferred security known as ALESCO X. This security had been discussed in the past two quarterly reports issued by the Company. On December 31, 2008, it was determined that the estimated cash flows to be received over the life of the security would not be sufficient to cover all of the principal and interest. As a result, our analysis determined the security needed to be written down by $2.6 million. This had a negative impact on net income of approximately $1.7 million. It was also decided that an investment owned by the Company in a unit trust comprised of the common stock of several community banks and bank holding companies was also impaired. The impairment charge for this investment was $317,000.
During the fourth quarter, loans grew by $7 million and deposits increased $36 million. Deposits increased as customers sought the safety of FDIC insured accounts. The provision for loan losses for the fourth quarter of 2008 was $3 million compared to $7 million last quarter and $1.2 million in the fourth quarter of 2007. Because of the decline in net income for the fourth quarter and the entire year, the amount set aside for profit sharing and bonuses was reduced by approximately $750,000 in the fourth quarter.
Net income for the year ended December 31, 2008, was $7,636,000, compared to $18,920,000 for 2007. Earnings per share were $0.44 compared to $1.08 for 2007. For 2008, the return on average equity was 6.47 percent and the return on average assets was 0.56 percent, compared to 16.21 percent and 1.45 percent, respectively, for 2007.
The Company’s 2008 net income was $11,284,000 lower than 2007. West Bank’s net income was $10,201,000 lower, while net income from WB Capital was $243,000 lower. Expenses and the impairment charge at the holding company account for the remaining decline in net income. West Bank’s net income was lower due to a provision for loan losses that was higher than last year by $14,250,000 and impairment charges on investment securities totaling $4,422,000. Net income at WB Capital decreased because it incurred a $458,000 loss when it purchased a Lehman Brothers Holdings, Inc. bond from a WB Capital money market fund to prevent the net asset value of the fund from dropping below $1.00 per share.
Net loans charged off during the fourth quarter totaled $4.0 million, bringing net charge-offs for 2008 to $10.1 million. Net charge-offs were $1.9 million in 2007. The fourth quarter 2008 charge-offs included $3.3 million due to a fraud loss suffered by a West Bank customer. This charge-off was covered by an increase in the allowance for loan losses during the third quarter of 2008. Non-accrual loans at December 31, 2008 totaled $21.4 million, up from $5.5 million at the end of 2007 and $19.3 million at the end of the third quarter of 2008. Loans past due 90 days or more and still accruing interest as of the end of 2008 totaled $92,000 compared to $408,000 a year earlier. Other real estate owned was $4.4 million and $155,000 at December 31, 2008 and 2007, respectively. The allowance for loan losses as a percent of total loans was 1.40 percent as of December 31, 2008 compared to 0.91 percent a year ago. Nonperforming assets as a percentage of total assets at December 31, 2008, was 2.30 percent compared to 0.45 percent at 2007 year end.
As previously announced, on December 31, 2008, the Company sold $36 million of preferred stock to the U.S. Treasury Department under the Capital Purchase Program. The preferred stock qualifies as tier 1 capital. At December 31, 2008, the Company’s regulatory capital ratios were as follows:
| 10.3% |
| 12.1% |
| Total risk-based capital ratio | 13.3% |
These ratios are in excess of those required to be considered well-capitalized.
On January 21, 2009, the Board of Directors of West Bancorporation, Inc. authorized the first dividend of $225,000 on its preferred stock, Series A, owned by the U.S Treasury under the Capital Purchase Program. This dividend will be paid on February 16, 2009.
The Board also declared a regular quarterly dividend of $0.08 per common share of outstanding stock. This amount represents 66 percent of the fourth quarter 2008 net income. The historical percentage of dividends paid to net income for the calendar years 2003 through 2007 was approximately 56 percent. The Board believes that a dividend reduction at this time is prudent given the ongoing, negative developments in the national and local economies and the uncertainty of the timing and magnitude of improvement. This dividend is payable on February 18, 2009, to shareholders of record on February 2, 2009. As of January 21, 2009, there were 17,403,882 shares of common stock outstanding.
The Board also set the record date for the Annual Meeting as February 20, 2009. The meeting will be held April 16, 2009.
The Company will discuss its results for 2008 during a conference call scheduled for 2:00 p.m. central time today, Thursday, January 22, 2009. The telephone number for the conference call is 800-860-2442. A replay of the conference call will be available until February 6, 2009, at 877-344-7529, pass code: 426983.
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 seven full-service offices in the greater Des Moines area, with a new office opening in the first quarter of 2009. WB Capital Management Inc., also a wholly-owned subsidiary of West Bancorporation, Inc., has offices in West Des Moines and Coralville, 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 Press Release 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 news release 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; 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 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)
| | | December 31, | | | December 31, | |
| CONSOLIDATED STATEMENTS OF CONDITION | | 2008 | | | 2007 | |
| Assets | | | | | | |
| Cash and due from banks | | $ | 23,712 | | | $ | 49,529 | |
| Short-term investments | | | 173,257 | | | | 414 | |
| Securities | | | 189,608 | | | | 237,378 | |
| Loans held for sale | | | 1,018 | | | | 1,858 | |
| Loans | | | 1,100,735 | | | | 983,565 | |
| Allowance for loan losses | | | (15,441 | ) | | | (8,935 | ) |
| Loans, net | | | 1,085,294 | | | | 974,630 | |
| Goodwill and other intangible assets | | | 26,334 | | | | 27,061 | |
| Bank-owned life insurance | | | 25,277 | | | | 24,341 | |
| Other assets | | | 28,688 | | | | 24,757 | |
| Total assets | | $ | 1,553,188 | | | $ | 1,339,968 | |
| | | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | |
| Deposits: | | | | | | | | |
| Noninterest-bearing | | $ | 174,635 | | | $ | 196,698 | |
| Interest-bearing | | | | | | | | |
| Demand | | | 97,853 | | | | 85,027 | |
| Savings | | | 238,058 | | | | 243,405 | |
| Time of $100,000 or more | | | 193,200 | | | | 160,936 | |
| Time | | | 451,041 | | | | 224,859 | |
| Total deposits | | | 1,154,787 | | | | 910,925 | |
| Short-term borrowings | | | 93,356 | | | | 169,602 | |
| Long-term borrowings | | | 145,619 | | | | 123,619 | |
| Other liabilities | | | 9,363 | | | | 14,216 | |
| Stockholders' equity | | | 150,063 | | | | 121,606 | |
| Total liabilities and stockholders' equity | | $ | 1,553,188 | | | $ | 1,339,968 | |
| | | PER COMMON SHARE | | | MARKET INFORMATION (1) | |
| | | Net Income | | | Dividends | | | High | | | Low | |
| 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 | |
| | | | | | | | | | | | | | | | | |
| 2007 | | | | | | | | | | | | | | | | |
| 1st quarter | | $ | 0.25 | | | $ | 0.16 | | | $ | 18.25 | | | $ | 14.29 | |
| 2nd quarter | | | 0.29 | | | | 0.16 | | | | 16.36 | | | | 14.17 | |
| 3rd quarter | | | 0.28 | | | | 0.16 | | | | 16.19 | | | | 14.68 | |
| 4th quarter | | | 0.25 | | | | 0.16 | | | | 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 | | | Year ended | |
| | | December 31, | | | December 31, | |
| CONSOLIDATED STATEMENTS OF OPERATION | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| Interest income | | | | | | | | | | | | |
| Loans | | $ | 15,848 | | | $ | 17,389 | | | $ | 63,524 | | | $ | 70,155 | |
| Securities | | | 2,109 | | | | 2,666 | | | | 8,540 | | | | 11,120 | |
| Other | | | 196 | | | | 70 | | | | 467 | | | | 752 | |
| Total interest income | | | 18,153 | | | | 20,125 | | | | 72,531 | | | | 82,027 | |
| | | | | | | | | | | | | | | | | |
| Interest expense | | | | | | | | | | | | | | | | |
| Deposits | | | 5,607 | | | | 7,245 | | | | 21,521 | | | | 30,151 | |
| Short-term borrowings | | | 224 | | | | 1,847 | | | | 2,827 | | | | 7,114 | |
| Long-term borrowings | | | 1,719 | | | | 1,581 | | | | 7,083 | | | | 6,558 | |
| Total interest expense | | | 7,550 | | | | 10,673 | | | | 31,431 | | | | 43,823 | |
| | | | | | | | | | | | | | | | | |
| Net interest income | | | 10,603 | | | | 9,452 | | | | 41,100 | | | | 38,204 | |
| Provision for loan losses | | | 3,000 | | | | 1,200 | | | | 16,600 | | | | 2,350 | |
| Net interest income after provision for loan losses | | | 7,603 | | | | 8,252 | | | | 24,500 | | | | 35,854 | |
| | | | | | | | | | | | | | | | | |
| Noninterest income | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 1,249 | | | | 1,211 | | | | 4,832 | | | | 4,794 | |
| Trust services | | | 184 | | | | 194 | | | | 789 | | | | 758 | |
| Investment advisory fees | | | 1,620 | | | | 1,950 | | | | 7,401 | | | | 7,920 | |
| Increase in cash value of bank-owned life insurance | | | 239 | | | | 229 | | | | 936 | | | | 890 | |
| Securities gains, net | | | 2 | | | | 3 | | | | 73 | | | | 5 | |
| Investment securities impairment loss | | | (3,014 | ) | | | - | | | | (4,739 | ) | | | - | |
| Other income | | | 642 | | | | 591 | | | | 2,414 | | | | 1,998 | |
| Total noninterest income | | | 922 | | | | 4,178 | | | | 11,706 | | | | 16,365 | |
| | | | | | | | | | | | | | | | | |
| Noninterest expense | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 2,374 | | | | 3,235 | | | | 13,362 | | | | 13,560 | |
| Occupancy expense | | | 896 | | | | 869 | | | | 3,596 | | | | 3,579 | |
| Data processing expense | | | 526 | | | | 580 | | | | 2,287 | | | | 2,225 | |
| Other expense | | | 1,869 | | | | 1,408 | | | | 7,701 | | | | 5,459 | |
| Total noninterest expense | | | 5,665 | | | | 6,092 | | | | 26,946 | | | | 24,823 | |
| | | | | | | | | | | | | | | | | |
| Income before income taxes | | | 2,860 | | | | 6,338 | | | | 9,260 | | | | 27,396 | |
| Income taxes | | | 752 | | | | 1,936 | | | | 1,624 | | | | 8,476 | |
| Net income | | $ | 2,108 | | | $ | 4,402 | | | $ | 7,636 | | | $ | 18,920 | |
| | | | | | | | | | | | | | | | | |
| PERFORMANCE HIGHLIGHTS | | | | | | | | | | | | | | | | |
| Return on average equity | | | 7.37 | % | | | 14.51 | % | | | 6.47 | % | | | 16.21 | % |
| Return on average assets | | | 0.57 | % | | | 1.33 | % | | | 0.56 | % | | | 1.45 | % |
| Net interest margin | | | 3.23 | % | | | 3.21 | % | | | 3.38 | % | | | 3.28 | % |
| Efficiency ratio | | | 37.45 | % | | | 43.46 | % | | | 45.25 | % | | | 44.23 | % |
