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 1st QUARTER 2007
West Des Moines, IA – West Bancorporation, Inc. (WTBA) (the “Company”), parent company of West Bank and WB Capital Management Inc., reports net income of $4,444,000, or $0.25 per share, for the first quarter of 2007, compared to $4,545,000 or $0.26 per share for the first quarter of 2006. The return on average equity and return on average assets were 15.86 percent and 1.38 percent, respectively. For the first quarter of 2006, the return on average equity was 17.60 percent and the return on average assets was 1.45 percent.
Loans outstanding are $17 million higher than a year ago. Deposits are $45 million lower. Interest bearing demand accounts are up due to the favorable response to a new interest bearing checking account that was introduced in the last half of 2006. Customers continue to shift funds from savings accounts to certificates of deposit to enhance their yield. The overall decline in deposits is due to fewer wholesale certificates of deposit, which was a conscious decision by the Company. Those funds were replaced by Federal funds purchased from community banks and Federal Home Loan Bank advances.
The net interest margin for the first quarter of 2007 was 3.24 percent, which was 18 basis points lower than a year ago. As a result, net interest income was $232,000 lower than the first quarter of 2006. The decline in net interest margin has more than offset the growth in earning assets. The net interest margin has declined over the past year because the cost of funds (deposits and borrowings) has increased faster than the yield on earning assets (loans and investments).
Non-accrual loans at March 31, 2007 totaled $590,000. This is significantly lower than a year ago. Loans past due 90 days or more and still accruing interest as of March 31, 2007 totaled $371,000 compared to $10,000 a year ago. Other real estate owned was $1,974,000 and $252,000 at March 31, 2007 and 2006, respectively. Included in other real estate owned is farmland that is expected to go to sale in the second quarter. The Company expects to receive proceeds from the sale at least equal to the carrying value of the land. The allowance for loan losses as a percent of total loans was 0.92 percent as of March 31, 2007 compared to 0.87 percent a year earlier. Non-performing assets as a percentage of loans at March 31, 2007 were 0.31 percent, compared to 0.46 percent a year ago.
The Company is participating in the alternative energy arena is several ways. West Bank has two loan officers focusing on the renewable fuels industry. WB Capital is the investment advisor to a private equity fund that plans to invest in ethanol and biodiesel plants. The Company has purchased income tax credits from a wind energy farm. We are proud to be able to assist these industries as they grow and help the local economies in Iowa.
On April 18, 2007, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.16 per share. The dividend is payable on May 16, 2007 to shareholders of record on April 30, 2007. As of April 18, 2007, there were 17,536,682 shares of common stock outstanding. The Board also authorized the buy-back of Company stock over the next 12 months in an amount up to $5 million. This authorization replaces a similar one that expired unused.
On April 13, 2007, the Company indicated it was reviewing Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”, to determine if the Company should early adopt it, and that as a result of this review, the first quarter earnings results would be delayed. After a thorough review of the standard, and in consultation with the Company’s independent registered public accounting firm, McGladrey & Pullen, LLP, it was concluded the standard did not have current applicability to the Company.
The Company will discuss its results for the first quarter of 2007 in a conference call scheduled for 2:00 pm central time on Friday, April 27, 2007. The telephone number for the conference call is 877-407-0778. A recording of the conference call will be available until May 1, 2007 by dialing 877-660-6853. The following is required to access the recording: account # 286, conference ID # 226742.
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. The 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. WB Capital Management Inc., a wholly owned subsidiary of West Bancorporation, Inc., has offices in Cedar Rapids and West Des Moines, Iowa, and provides portfolio management services to individuals, 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. Such forward-looking information is 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: competitive pressures, pricing pressures on loans and deposits, actions of bank and non-bank competitors, changes in local and national economic conditions, changes in regulatory requirements, actions of the Securities and Exchange Commission and/or the Federal Reserve Board, and customer’s 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)
March 31,
March 31,
2007
2006
CONSOLIDATED STATEMENTS OF CONDITION
Assets
Cash and due from banks
$
30,931
$
27,182
Short-term investments
24,426
2,784
260,016
274,947
Securities
946,745
929,630
Loans
Allowance for loan losses
(8,743
)
(8,049
)
Loans, net
938,002
921,581
Other assets
76,722
70,469
Total assets
$
1,330,097
$
1,296,963
Liabilities and Stockholders’ Equity
Deposits:
Noninterest-bearing
$
193,111
$
196,468
Interest-bearing
Demand
71,776
44,907
Savings
209,070
269,039
Time, in excess of $100,000
283,740
280,247
Other time
166,317
178,801
Total deposits
924,014
969,462
Short-term borrowings
143,918
114,293
Long-term borrowings
134,369
99,109
Other liabilities
11,903
8,056
Stockholders’ equity
115,893
106,043
Total liabilities and stockholders’ equity
$
1,330,097
$
1,296,963
PER COMMON SHARE
MARKET INFORMATION(1)
Net Income
Dividends
High
Low
2007
1st quarter
$
0.25
$
0.160
$
18.25
$
14.29
2006
1st quarter
$
0.26
$
0.152
$
18.95
$
16.67
2nd quarter
0.28
0.152
19.98
15.24
3rd quarter
0.28
0.160
18.10
15.61
4th quarter
0.29
0.160
19.02
16.69
(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,
2007
2006
CONSOLIDATED STATEMENTS OF INCOME
Interest income
Loans
$
17,104
$
15,463
Securities
2,855
2,867
Other
289
126
Total interest income
20,248
18,456
Interest expense
Deposits
7,572
6,629
Short-term borrowings
1,683
926
Long-term borrowings
1,682
1,358
Total interest expense
10,937
8,913
Net interest income
9,311
9,543
Provision for loan losses
300
450
Net interest income after provision for loan losses
9,011
9,093
Noninterest income
Service charges on deposit accounts
1,128
1,004
Trust services
181
168
Investment advisory fees
1,959
2,249
Increase in cash value of bank-owned life insurance
216
209
Net realized (losses) from sales of securities
available for sale
4
(106
)
Other income
382
357
Total noninterest income
3,870
3,881
Noninterest expense
Salaries and employee benefits
3,616
3,675
Occupancy
934
856
Data processing
467
479
Other expenses
1,437
1,302
Total noninterest expense
6,454
6,312
Income before income taxes
6,427
6,662
Income taxes
1,983
2,117
Net income
$
4,444
$
4,545
PERFORMANCE HIGHLIGHTS
Return on average equity
15.86
%
17.60
%
Return on average assets
1.38
%
1.45
%
Net interest margin
3.24
%
3.42
%
Efficiency ratio
47.53
%
45.17
%
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