Exhibit 99.1
AWBC – Q1 2005 Earnings
April 25, 2005
Page 1 of 8
AMERICANWEST BANCORPORATION
CONTACT: | Robert M. Daugherty | President and CEO | ||
C. Tim Cassels | Chief Financial Officer | |||
(509) 467-6993 |
NEWS RELEASE
AMERICANWEST BANCORPORATION ANNOUNCES 2005 FIRST QUARTER RESULTS
Spokane, Washington – April 25, 2005 – AmericanWest Bancorporation (Nasdaq:AWBC) today announced that net income for the first quarter of 2005 was $3.1 million, or $0.30 per diluted share compared to $3.5 million or $0.34 per diluted share for the first quarter of 2004.
“The first quarter represents a return to core operations for the company,” said Robert M. Daugherty, President and Chief Executive Officer. “On a pretax basis, our performance was on par with the first quarter of 2004. We are striving to improve our performance as we return to our community banking foundation.”
LOAN GROWTH AND CREDIT QUALITY:
Consistent with the Company’s expectations, gross loans at March 31, 2005 were $907.5 million, a decrease of 2.2% compared to $927.9 million at December 31, 2004.
“We expect to have flat loan growth during the first half of 2005 as we refocus our credit culture in combination with our normal seasonality,” said Mr. Daugherty.
The decrease in loans primarily relates to decreases in commercial real estate loans, agricultural loans, real estate construction and installment loans. These decreases were offset by increases in commercial and industrial loans and bankcards and other loans. Commercial real estate loans, commercial and industrial loans, and agricultural loans comprised 88.5% of the gross loan portfolio at March 31, 2005, and 88.1% of the gross loan portfolio at December 31, 2004.
Total nonperforming loans were $31.4 million or 3.5% of total gross loans at March 31, 2005, compared to $24.3 million or 2.6% of total gross loans at December 31, 2004. The Company’s total nonperforming assets, including foreclosed real estate and other foreclosed assets, were $33.3 million or 3.3% of total assets at March 31, 2005 compared to $28.5 million or 2.7% of total assets at December 31, 2004. The increase was primarily due to the placing of one commercial real estate loan in the amount of $4.8 million in nonperforming assets during the first quarter of 2005. Foreclosed real estate and other foreclosed assets decreased more than $2.2 million at March 31, 2005 compared to December 31, 2004 due to the sale of property.
AWBC – Q1 2005 Earnings
April 25, 2005
Page 2 of 8
“Improving the credit quality of our portfolio remains our primary focus,” said Mr. Daugherty. “We are aggressively addressing any credit deterioration and have enhanced our credit process for all new loans. We are excited about the progress we are making addressing our credit issues. In addition to our reduction in foreclosed real estate and other foreclosed assets of more than $2.2 million in the first quarter, we entered into contracts that will reduce our nonperforming assets by an additional $7.5 million subsequent to quarter end without any additional provisions.”
Allowance for loan losses was $16.9 million for March 31, 2005, compared to $18.5 million at December 31, 2004. The allowance constituted 1.86% and 1.99% of total gross loans at March 31, 2005 and December 31, 2004, respectively. Provision for loan losses for the three months ended March 31, 2005 was $1.1 million compared to $1.0 million for the three months ended March 31, 2004.
DEPOSIT GROWTH:
At March 31, 2005, deposits were $856.8 million, down 4.2% from $894.8 million at December 31, 2004. The decrease from December 31, 2004 is due mainly to a decrease in interest bearing deposits offset by an increase in demand deposits. The cost of deposits increased to 1.94% for the quarter ended March 31, 2005, as compared to 1.74% for the quarter ended March 31, 2004, due to higher interest rates and the change in deposit mix.
“We initiated a deposit campaign in March, the first in a long time for the Company, that we expect to increase our transaction accounts in the remainder of 2005,” said Mr. Daugherty. “Retail banking will be an emphasis for us in 2005 and the years to follow.”
NET INTEREST MARGIN:
Net interest margin decreased to 5.87% for the first quarter of 2005, compared to 6.20% for the first quarter of 2004 on a tax effected basis for nontaxable assets. This decrease was due to a decrease in loan yields and an increase in deposit costs which were partially offset by a reduction in borrowing costs.
Net interest income decreased 2.6% to $13.7 million for the three months ended March 31, 2005, as compared to $14.1 million for the three months ended March 31, 2004. This decrease was due to an increase in interest expense on deposits and borrowings and a decrease in interest income from securities which were partially offset by the interest income received on loans.
NONINTEREST INCOME AND EXPENSE:
Noninterest income was $1.6 million for the three months ended March 31, 2005, an increase from $1.5 million for the three months ended March 31, 2004. This slight increase is due mainly to increases in the cash surrender value of bank owned life insurance.
Noninterest expense decreased to $9.5 million for the three months ended March 31, 2005 from $10.0 million for the three months ended March 31, 2004. The decrease in noninterest expense was primarily due to decreases in foreclosed real estate and other foreclosed assets expenses which were partially offset by occupancy and equipment expenses. The occupancy expenses increases are due mainly to escalation clauses in existing lease agreements and a leased building in downtown Spokane for the corporate headquarters.
AWBC – Q1 2005 Earnings
April 25, 2005
Page 3 of 8
INCOME TAXES:
Income tax expense for the quarter ended March 31, 2005 increased as a percentage of income before the provision for income taxes to 33.3% from 24.3% for the quarter ended March 31, 2004. The increase in the effective tax rate is due to the effect of rehabilitation tax credits recognized during 2004 which decreased the tax expense for the period.
AmericanWest Bancorporation is a community bank holding company with 42 locations in Eastern and Central Washington and Northern Idaho. For further information on the Company or to access Internet banking, please visit our web site at www.awbank.net.
FORWARD LOOKING STATEMENTS:
This press release contains certain forward-looking statements within the Private Securities Litigation Reform Act of 1995 (PSLRA), including statements about the financial condition, results of operations, credit performance, and reduction of nonperforming loans of the Company. Such forward looking statements include the expectation that the Company will have flat loan growth during the first half of 2005 and that transaction accounts will increase during the remainder of 2005. The forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Those factors include, but are not limited to, impact of the current national and regional economy on small business loan demand in the Company’s market, loan delinquency rates, changes in portfolio composition, the bank’s ability to attract quality commercial business, interest rate movements and the impact on margins such movement may cause, changes in the demographic make-up of the Company’s market, fluctuation in demand for the Company’s products and services, the Company’s ability to attract and retain qualified people, regulatory changes, competition with other banks and financial institutions, and other factors. For a discussion of factors that could cause actual results to differ, please see the Company’s reports on Forms 10-K and 10-Q as filed with the Securities and Exchange Commission. Words such as “targets,” “expects,” “anticipates,” “believes,” other similar expressions or future or conditional verbs such as “will,” “may,” “should,” “would,” and “could” are intended to identify such forward-looking statements. Readers should not place undue reliance on the forward-looking statements, which reflect management’s view only as of the date hereto. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. This statement is included for the express purpose of protecting the Company under PSLRA’s safe harbor provisions.
AWBC – Q1 2005 Earnings
April 25, 2005
Page 4 of 8
AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)
Three Months Ended | |||||||||||||
3/31/2005 | 3/31/2004 | $ Change | % Change | ||||||||||
Statement of Income Data | |||||||||||||
Interest Income | |||||||||||||
Interest and fees on loans | $ | 16,983 | $ | 16,816 | $ | 167 | 1.0 | % | |||||
Interest on securities | 343 | 458 | $ | (115 | ) | -25.1 | % | ||||||
Other interest income | 10 | 32 | $ | (22 | ) | -68.8 | % | ||||||
Total Interest Income | 17,336 | 17,306 | $ | 30 | 0.2 | % | |||||||
Interest Expense | |||||||||||||
Interest on deposits | 3,027 | 2,901 | $ | 126 | 4.3 | % | |||||||
Interest on borrowings | 568 | 297 | $ | 271 | 91.2 | % | |||||||
Total Interest Expense | 3,595 | 3,198 | $ | 397 | 12.4 | % | |||||||
Net Interest Income | 13,741 | 14,108 | $ | (367 | ) | -2.6 | % | ||||||
Provision for loan losses | 1,075 | 1,000 | $ | 75 | 7.5 | % | |||||||
Net Interest Income After Provision for Loan Losses | 12,666 | 13,108 | $ | (442 | ) | -3.4 | % | ||||||
Noninterest Income | |||||||||||||
Fees and service charges | 1,123 | 1,133 | $ | (10 | ) | -0.9 | % | ||||||
Other | 442 | 406 | $ | 36 | 8.9 | % | |||||||
Total Noninterest Income | 1,565 | 1,539 | $ | 26 | 1.7 | % | |||||||
Noninterst Expense | |||||||||||||
Salaries and employee benefits | 5,549 | 5,591 | $ | (42 | ) | -0.8 | % | ||||||
Occupancy expense, net | 1,045 | 755 | $ | 290 | 38.4 | % | |||||||
Equipment expense | 804 | 679 | $ | 125 | 18.4 | % | |||||||
State business and occupation tax | 223 | 208 | $ | 15 | 7.2 | % | |||||||
Foreclosed real estate and other foreclosed assets expense | 66 | 819 | $ | (753 | ) | -91.9 | % | ||||||
Other | 1,839 | 1,920 | $ | (81 | ) | -4.2 | % | ||||||
Total Noninterest Expense | 9,526 | 9,972 | $ | (446 | ) | -4.5 | % | ||||||
Income Before Provision for Income Tax | 4,705 | 4,675 | $ | 30 | 0.6 | % | |||||||
Provision for Income Tax | 1,566 | 1,138 | $ | 428 | 37.6 | % | |||||||
Net Income | $ | 3,139 | $ | 3,537 | $ | (398 | ) | -11.3 | % | ||||
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AWBC – Q1 2005 Earnings
April 25, 2005
Page 5 of 8
AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)
Consolidated Statement of Condition
3/31/2005 | 12/31/2004 | $ Change | % Change | |||||||||||
Assets | ||||||||||||||
Cash and due from banks | $ | 21,417 | $ | 26,915 | $ | (5,498 | ) | -20.4 | % | |||||
Overnight interest bearing deposits with other banks | 1,737 | 2,302 | $ | (565 | ) | -24.5 | % | |||||||
Cash and cash equivalents | 23,154 | 29,217 | $ | (6,063 | ) | -20.8 | % | |||||||
Securities | 33,318 | 33,886 | $ | (568 | ) | -1.7 | % | |||||||
Loans, net of allowance for loan losses of $16,923 and $18,475, respectively | 890,600 | 909,255 | $ | (18,655 | ) | -2.1 | % | |||||||
Accrued interest receivable | 6,534 | 6,520 | $ | 14 | 0.2 | % | ||||||||
Premises and equipment, net | 24,183 | 23,955 | $ | 228 | 1.0 | % | ||||||||
Foreclosed real estate and other foreclosed assets | 1,940 | 4,201 | $ | (2,261 | ) | -53.8 | % | |||||||
Life insurance and salary continuation assets | 19,115 | 18,912 | $ | 203 | 1.1 | % | ||||||||
Goodwill | 12,050 | 12,050 | $ | — | 0.0 | % | ||||||||
Intangible assets | 2,579 | 2,642 | $ | (63 | ) | -2.4 | % | |||||||
Other assets | 7,085 | 8,356 | $ | (1,271 | ) | -15.2 | % | |||||||
Total Assets | $ | 1,020,558 | $ | 1,048,994 | $ | (28,436 | ) | -2.7 | % | |||||
Liabilities | ||||||||||||||
Noninterest bearing demand deposits | $ | 175,698 | $ | 169,579 | $ | 6,119 | 3.6 | % | ||||||
Interest bearing deposits: | ||||||||||||||
NOW and savings accounts | 425,266 | 452,357 | $ | (27,091 | ) | -6.0 | % | |||||||
Time, $100,000 and over | 107,807 | 123,006 | $ | (15,199 | ) | -12.4 | % | |||||||
Other time | 148,068 | 149,856 | $ | (1,788 | ) | -1.2 | % | |||||||
Total Deposits | 856,839 | 894,798 | $ | (37,959 | ) | -4.2 | % | |||||||
Short-term borrowings | 31,319 | 24,539 | $ | 6,780 | 27.6 | % | ||||||||
Long-term borrowings | 4,260 | 5,668 | $ | (1,408 | ) | -24.8 | % | |||||||
Capital lease obligations | 404 | 416 | $ | (12 | ) | -2.9 | % | |||||||
Subordinated debentures | 10,310 | 10,310 | $ | — | 0.0 | % | ||||||||
Accrued interest payable | 1,028 | 1,000 | $ | 28 | 2.8 | % | ||||||||
Other liabilities | 7,424 | 7,188 | $ | 236 | 3.3 | % | ||||||||
Total Liabilities | 911,584 | 943,919 | $ | (32,335 | ) | -3.4 | % | |||||||
Stockholders’ Equity | ||||||||||||||
Common stock | 101,866 | 100,812 | $ | 1,054 | 1.0 | % | ||||||||
Retained earnings | 7,196 | 4,057 | $ | 3,139 | 77.4 | % | ||||||||
Accumulated other comprehensive income, net of tax | (88 | ) | 206 | $ | (294 | ) | -142.7 | % | ||||||
Total Stockholders’ Equity | 108,974 | 105,075 | $ | 3,899 | 3.7 | % | ||||||||
Total Liabilities and Stockholders’ Equity | $ | 1,020,558 | $ | 1,048,994 | $ | (28,436 | ) | -2.7 | % | |||||
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AWBC – Q1 2005 Earnings
April 25, 2005
Page 6 of 8
AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)
Three Months Ended | ||||||||
3/31/2005 | 3/31/2004 | |||||||
Share Data | ||||||||
Basic earnings per share | $ | 0.30 | $ | 0.35 | ||||
Diluted earnings per share | $ | 0.30 | $ | 0.34 | ||||
Basic weighted average shares outstanding | 10,338,025 | 10,150,470 | ||||||
Diluted weighted average shares outstanding | 10,490,197 | 10,505,234 | ||||||
Three Months Ended | ||||||||
3/31/2005 | 3/31/2004 | |||||||
Financial Ratios, annualized | ||||||||
Return on average assets | 1.21 | % | 1.42 | % | ||||
Return on average equity | 11.68 | % | 14.52 | % | ||||
Efficiency ratio | 62.24 | % | 63.73 | % | ||||
Noninterest expenses to average assets | 3.68 | % | 4.01 | % | ||||
Net interest margin to average earning assets | 5.87 | % | 6.20 | % |
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AWBC – Q1 2005 Earnings
April 25, 2005
Page 7 of 8
AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)
3/31/2005 | 12/31/2004 | |||||||
Loan Portfolio: | ||||||||
Commercial real estate | $ | 488,038 | $ | 497,253 | ||||
Commercial and industrial | 199,657 | 197,912 | ||||||
Agricultural | 115,176 | 122,735 | ||||||
Real estate construction | 42,851 | 45,908 | ||||||
Real estate mortgage | 32,577 | 32,703 | ||||||
Installment | 19,989 | 22,454 | ||||||
Bankcards and other | 9,211 | 8,909 | ||||||
Total loans, gross | $ | 907,499 | $ | 927,874 | ||||
Allowance for loan losses | (16,923 | ) | (18,475 | ) | ||||
Deferred loan fees, net of deferred costs | 24 | (144 | ) | |||||
Total loans, net | $ | 890,600 | $ | 909,255 | ||||
Three Months Ended | ||||||||
3/31/2005 | 3/31/2004 | |||||||
Allowance for loan losses: | ||||||||
Balance, beginning of period | $ | 18,475 | $ | 12,453 | ||||
Provision for loan losses | 1,075 | 1,000 | ||||||
Net charge-offs | (2,627 | ) | (948 | ) | ||||
Balance, end of period | $ | 16,923 | $ | 12,505 | ||||
Allowance for loan loss to total loans | 1.86 | % | 1.35 | % | ||||
3/31/2005 | 12/31/2004 | |||||||
Nonperforming assets: | ||||||||
Accruing loans over 90 days past due | $ | 46 | $ | 53 | ||||
Nonaccrual loans | 31,314 | 24,222 | ||||||
Total nonperforming loans | $ | 31,360 | $ | 24,275 | ||||
Foreclosed real estate and other foreclosed assets | 1,940 | 4,201 | ||||||
Total nonperforming assets | $ | 33,300 | $ | 28,476 | ||||
Ratio of total nonperforming assets to total assets | 3.26 | % | 2.71 | % | ||||
Ratio of total nonperforming loans to total gross loans | 3.46 | % | 2.62 | % | ||||
Ratio of allowance for loan loss to nonperforming loans | 53.96 | % | 76.11 | % |
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AWBC – Q1 2005 Earnings
April 25, 2005
Page 8 of 8
AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)
Three Months Ended March 31, | ||||||||||||||||||
2005 | 2004 | |||||||||||||||||
($ in thousands)
| Average Balance | Interest | % | Average Balance | Interest | % | ||||||||||||
Assets | ||||||||||||||||||
Loans, gross | $ | 919,350 | $ | 16,983 | 7.49 | % | $ | 864,428 | $ | 16,816 | 7.82 | % | ||||||
Taxable Investments | 25,867 | 252 | 3.95 | % | 31,772 | 367 | 4.65 | % | ||||||||||
Nontaxable Investments | 8,723 | 138 | 6.42 | % | 8,873 | 137 | 6.21 | % | ||||||||||
Overnight deposits with other banks | 1,857 | 10 | 2.18 | % | 11,019 | 32 | 1.17 | % | ||||||||||
Total earning assets | 955,797 | $ | 17,383 | 7.38 | % | 916,092 | $ | 17,352 | 7.62 | % | ||||||||
Other assets | 79,541 | 77,444 | ||||||||||||||||
Total assets | $ | 1,035,338 | $ | 993,536 | ||||||||||||||
Liabilities | ||||||||||||||||||
Interest bearing deposits | $ | 687,516 | $ | 3,027 | 1.79 | % | $ | 706,206 | $ | 2,901 | 1.65 | % | ||||||
Borrowings | 64,095 | 568 | 3.59 | % | 31,994 | 297 | 3.73 | % | ||||||||||
Total interestbearing liabilities | 751,611 | $ | 3,595 | 1.94 | % | 738,200 | $ | 3,198 | 1.74 | % | ||||||||
Noninterest bearing deposits | 167,729 | 151,106 | ||||||||||||||||
Other liabilities | 8,506 | 6,780 | ||||||||||||||||
Total liabilities | 927,846 | 896,086 | ||||||||||||||||
Stockholders’ equity | 107,492 | 97,450 | ||||||||||||||||
Total liabilities and stockholders’ equity | $ | 1,035,338 | $ | 993,536 | ||||||||||||||
Net interest income and spread | 5.44 | % | 5.88 | % | ||||||||||||||
Net interest margin to average earnings assets | 5.87 | % | 6.20 | % |