FOR IMMEDIATE RELEASE For more information contact: Doug Gulling, Executive Vice President and Chief Financial Officer (515) 222-2309
WEST BANCORPORATION, INC. ANNOUNCES QUARTERLY CASH DIVIDEND AND RESULTS FOR 3RD QUARTER AND FIRST NINE MONTHS OF 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 $4,947,000, or $0.28 per share, for the third quarter of 2007, compared to $4,977,000 or $0.28 per share for the third quarter of 2006. The annualized returns on average equity and average assets were 16.76 percent and 1.51 percent, respectively. For the third quarter of 2006, the annualized returns on average equity and average assets were 18.30 percent and 1.50 percent, respectively.
For the first nine months of 2007, net income was $14,518,000, or $0.83 per share, up from $14,404,000 or $0.82 per share for the first nine months of 2006. The annualized returns on average equity and average assets were 16.81 percent and 1.48 percent, respectively. For the first nine months of 2006, the annualized returns on average equity and average assets were 18.16 percent and 1.48 percent, respectively.
During the third quarter, loans grew by $6.1 million to $943.4 million. West Bank has new loans in process which should result in similar loan growth in the fourth quarter. A year ago, loans totaled $911.9 million.
Loan quality remains good. At September 30, 2007, non-accrual loans totaled $880,000, loans past due 90 days or more and still accruing interest were $93,000, and other real estate owned was $325,000. These three items represent non-performing assets of $1,298,000. During the third quarter, total non-performing assets increased $508,000. Non-accrual loans increased by $275,000, which was attributable to one commercial loan. Other real estate owned increased $171,000, which was the result of foreclosing on two single family homes. A year ago, non-performing assets totaled $6,281,000. The allowance for loan losses as a percent of total loans was 0.94 percent as of September 30, 2007, compared to 0.90 percent a year earlier. Non-performing assets as a percentage of loans at September 30, 2007, were 0.14 percent, compared to 0.69 percent a year ago.
There has been a significant amount of publicity in the national media regarding sub-prime single family mortgages and increases in foreclosure rates. West Bank has not and does not originate sub-prime single family mortgages. In addition, West Bank does not directly invest in sub-prime mortgages in its investment portfolio and the amount, if any, of sub-prime mortgages securing mortgage backed securities owned by the bank is not a material amount of its investment portfolio. While the foreclosure rate in Iowa has been increasing, the Company does not expect this to have a material impact on its operations. For several years, the majority of mortgage loans originated by West Bank have been sold in the secondary market and not retained on the Company’s books. West Bank has owned a portfolio of single family loans for several years that may from time to time result in foreclosures, but the number of future foreclosures is not expected to be material.
West Bank does have a significant portion of its loan portfolio in construction and commercial real estate loans. The slowdown in the real estate market has resulted in fewer new loans in these categories. West Bank believes these loans are adequately secured, but it is difficult to predict the consequences from any further downturn in the real estate market.
On October 17, 2007, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.16 per share. The dividend is payable on November 14, 2007, to shareholders of record on October 29, 2007. As of October 17, 2007, there were 17,536,682 shares of common stock outstanding.
The Company will discuss its results for the third quarter and first nine months of 2007 during a conference call scheduled for 2:00 pm Central Time on Thursday, October 18, 2007. The telephone number for the conference call is 877-407-0778. A recording of the call will be available until October 23, 2007, by dialing 877-660-6853, account # 286, conference ID # 226744.
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 West Des Moines and Coralville, 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 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)
September 30,
September 30,
CONSOLIDATED STATEMENTS OF CONDITION
2007
2006
Assets
Cash and due from banks
$28,857
$27,088
Short-term investments
5,957
3,478
Securities
250,436
271,599
Loans
943,393
911,931
Allowance for loan losses
(8,905)
(8,178)
Loans, net
934,488
903,753
Goodwill and other intangible assets
27,275
26,453
Bank-owned life insurance
23,617
22,736
Other assets
26,598
26,512
Total assets
$1,297,228
$1,281,619
Liabilities and Stockholders’ Equity
Deposits:
Noninterest-bearing
$177,991
$196,541
Interest-bearing
Demand
69,365
48,135
Savings
219,742
231,086
Time
391,120
509,849
Total deposits
858,218
985,611
Short-term borrowings
181,746
88,632
Long-term borrowings
123,869
86,884
Other liabilities
13,350
9,486
Stockholders’ equity
120,045
111,006
Total liabilities and stockholders’ equity
$1,297,228
$1,281,619
PER COMMON SHARE
MARKET INFORMATION (1)
Net Income
Dividends
High
Low
-
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
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
Nine months ended
September 30,
September 30,
CONSOLIDATED STATEMENTS OF OPERATION
2007
2006
2007
2006
Interest income
Loans
$17,730
$17,505
$
52,766
$50,004
Securities
2,784
2,963
8,454
8,779
Other
122
288
682
633
Total interest income
20,636
20,756
61,902
59,416
Interest expense
Deposits
7,651
8,953
22,906
23,710
Short-term borrowings
1,741
863
5,267
2,647
Long-term borrowings
1,591
1,218
4,977
3,957
Total interest expense
10,983
11,034
33,150
30,314
Net interest income
9,653
9,722
28,752
29,102
Provision for loan losses
500
450
1,150
1,350
Net interest income after provision for loan losses
9,153
9,272
27,602
27,752
Noninterest income
Service charges on deposit accounts
1,244
1,371
3,583
3,492
Trust services
195
208
564
571
Investment advisory fees
1,968
2,003
5,970
6,364
Increase in cash value of bank-owned life insurance
226
215
661
637
Net realized gains (losses) from sales of securities
held for sale
11
(3)
2
(147)
Other income
405
356
1,174
1,074
Total noninterest income
4,049
4,150
11,954
11,991
Noninterest expense
Salaries and employee benefits
3,354
3,323
10,325
10,490
Occupancy expense
879
826
2,710
2,548
Data processing expense
472
448
1,412
1,433
Other expense
1,431
1,500
4,051
4,120
Total noninterest expense
6,136
6,097
18,498
18,591
Income before income taxes
7,066
7,325
21,058
21,152
Income taxes
2,119
2,348
6,540
6,748
Net income
$4,947
$4,977
$
14,518
$14,404
PERFORMANCE HIGHLIGHTS
Return on average equity
16.76%
18.30%
16.81
%
18.16%
Return on average assets
1.51%
1.50%
1.48
%
1.48%
Net interest margin
3.32%
3.29%
3.30
%
3.36%
Efficiency ratio
43.60%
42.60%
44.17
%
43.70%
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