Exhibit 99.1
AWBC – 2008 Q2 Earnings
July 24, 2008
Page 1 of 15
AMERICANWEST BANCORPORATION
NEWS RELEASE
AMERICANWEST BANCORPORATION ANNOUNCES
2008 SECOND QUARTER FINANCIAL RESULTS AND PLANS TO IMPROVE CAPITAL LEVELS
SPOKANE, WASHINGTON, July 24, 2008 (Business Wire) - AmericanWest Bancorporation (NASDAQ: AWBC, “Company”) today announced its second quarter 2008 financial results, which included the following:
| | • | | Net interest margin (tax-equivalent) of 4.19%. |
| | • | | Provision for loan losses of $16.4 million, or 3.68% of average loans (annualized). |
| | • | | Net charge-offs of $11.7 million, or 2.63% of average loans (annualized). |
| | • | | Allowance for credit losses to total loan ratio increase of 24 basis points to 1.86% over March 31, 2008. |
| | • | | Increase in the level of non-performing assets to 3.44% of total assets at June 30, 2008 with $10.2 million subsequent pay-downs improving the ratio to 2.96%. |
| | • | | Non-interest income growth of 21% on a linked quarter basis and 9% from Q2 2007. |
| | • | | Success of expense control initiatives reflected in flat non-interest expense for Q2 2008 as compared to prior year. |
For the quarter ended June 30, 2008, the Company recognized a net loss of $6.2 million, or $0.36 per diluted share, as compared with a net loss of $31.6 million, or $1.83 per diluted share for the first quarter of 2008 and net income of $4.5 million or $0.26 per diluted share for the same period in 2007. For the six months ended June 30, 2008, the Company recognized a net loss of $37.8 million, or $2.19 per diluted share, as compared with net income of $6.7 million, or $0.47 per diluted share for the same period of the prior year. Included in the first quarter 2008 results was a non-cash goodwill impairment charge of $27 million, or $1.57 per diluted share. Excluding the impact of this charge, the first quarter net loss totaled $4.6 million, or $0.26 per diluted share and the six months ended June 30, 2008 net loss totaled $10.8 million, or $0.63 per diluted share. On April 1, 2007, the Company acquired Far West Bancorporation and the financial results have been consolidated since that date.
“Our strong results with fee revenue, up 9%, and expense control, which resulted in non-interest expense being flat compared to the same period last year, were offset by an elevated loan loss provision and anticipated margin compression,” remarked Robert M. Daugherty, President and Chief Executive Officer. “We remain focused on the timely identification and resolution of problem loans, and our provision and charge-off levels are reflective of the reality of collateral valuations in some of our residential construction and development markets. Measurable progress in liquidating problem loans is being made, as evidenced by a 15% reduction in the level of non-performing loans since June 30.” “I remain impressed by the dedication, motivation and customer focus
AWBC – 2008 Q2 Earnings
July 24, 2008
Page 2 of 15
of our professional staff of community bankers. We are ensuring that our customers continue to receive the high level of service that the employees in our 63 financial centers provide on a daily basis. An extensive outreach effort has been initiated to combat the recent sensationalized media attention focused on the safety and security of the banking industry.”
Capital:
Total shareholders’ equity at June 30, 2008 was $243.8 million and total tangible shareholders’ equity was $127.7 million, or $7.42 per share. At March 31, 2008, total shareholder’s equity was $250.8 million and total tangible shareholders’ equity was $133.9 million, or $7.78 per share. As of June 30, 2008, the Company and AmericanWest Bank were “adequately capitalized” by regulatory standards and the Company’s tangible equity ratio was 6.41%. AmericanWest Bank’s capital ratios as of June 30, 2008 exceeded the threshold for “well-capitalized” status on two of the three regulatory capital ratios, as reflected in the table below.
| | | | | | | | | | | | | | | | | | |
| | | Actual | | | Adequately Capitalized | | | Well Capitalized | |
($ in thousands) | | Amount | | Ratio | | | Amount | | Ratio | | | Amount | | Ratio | |
As of June 30, 2008: | | | | | | | | | | | | | | | | | | |
Total capital to risk weighted assets: | | | | | | | | | | | | | | | | | | |
AWBC | | $ | 193,106 | | 9.72 | % | | $ | 158,954 | | 8.00 | % | | | N/A | | N/A | |
AWB | | | 192,132 | | 9.68 | % | | | 158,778 | | 8.00 | % | | $ | 198,472 | | 10.00 | % |
Tier I capital to risk weighted assets: | | | | | | | | | | | | | | | | | | |
AWBC | | | 168,169 | | 8.46 | % | | | 79,477 | | 4.00 | % | | | N/A | | N/A | |
AWB | | | 167,223 | | 8.43 | % | | | 79,389 | | 4.00 | % | | | 119,083 | | 6.00 | % |
Leverage capital, Tier I capital to average assets: | | | | | | | | | | | | | | | | | | |
AWBC | | | 168,169 | | 8.43 | % | | | 79,829 | | 4.00 | % | | | N/A | | N/A | |
AWB | | | 167,223 | | 8.39 | % | | | 79,751 | | 4.00 | % | | | 99,689 | | 5.00 | % |
As of June 30, 2008, the capital shortfall to qualify as “well capitalized” for AmericanWest Bank was $6.3 million.
The Company has engaged Sandler O’Neill + Partners LP to serve as its financial advisor with respect to raising additional capital and evaluating other strategic alternatives, as the previously announced public offering of up to $34.5 million of capital securities has been suspended due to adverse capital markets conditions for trust preferred securities. In addition, the Company’s board of directors directed management to complete a comprehensive review of AmericanWest’s operations to analyze additional efficiencies and opportunities. The preliminary results of this review have determined that annualized pre-tax expense savings of between $2.5 and $3.0 million could be realized through the consolidation of the Company’s commercial and retail banking delivery channels. The Company is also evaluating alternatives for improving operating performance and capital ratios through the sale of certain loans and sale or consolidation of certain financial centers.
“When it became apparent that current capital market conditions were not favorable to the issuance of capital securities, we quickly redirected efforts toward options in the new equity capital arena,” remarked Patrick Rusnak, Chief Operating Officer. “Our presence in high-growth markets and deeply rooted core deposit franchise has attracted the attention of investors who can see beyond the horizon of the current credit cycle and appreciate the future earnings potential. We intend to pursue the evaluation and decision process for this recapitalization in a thoughtful but expedient manner.”
AWBC – 2008 Q2 Earnings
July 24, 2008
Page 3 of 15
Net Interest Margin:
The tax-equivalent net interest margin for the second quarter of 2008 was 4.19% as compared to 4.62% for the first quarter of 2008. This is a decrease of 118 basis points over the similar period of the prior year. The decrease from the prior quarter is due to a decline in the yield on earning assets of 71 basis points, offset by a 36 basis point reduction in the cost of interest bearing liabilities. The margin was reduced by approximately 13 basis points due to the reversal of previously accrued interest income for loans placed on non-accrual status during the second quarter. The tax equivalent net interest margin for the six months ended June 30, 2008 was 4.41% as compared to 5.08% for the similar period of the prior year. The decrease from the prior year is due to a decline in the yield on earning assets of 121 basis points, partially offset by a 75 basis point reduction in the cost of interest bearing liabilities.
The average yield on loans for the second quarter of 2008 was 6.69%, a decrease of 72 basis points from the prior quarter and 180 basis points from the second quarter of 2007. The decrease in the average yield on loans from the prior quarter was principally attributable to the re-pricing of approximately $783.5 million, or 44%, of the Company’s loan portfolio, which is indexed on a variable basis, and the reversal of previously accrued interest income for loans placed on non-accrual status. The average prime rate for the second quarter of 2008 was 5.09%, down 115 basis points from the previous quarter. The average yield on loans for the six months ended June 30, 2008 was 7.05% as compared to 8.29% in the prior year. This decrease is due mainly to the average prime rate for the six months ended June 30, 2008 of 5.66% as compared to 8.25% for the similar period of the prior year.
The average cost of interest bearing deposits for the second quarter of 2008 was 2.73%, a decrease of 28 basis points from the first quarter of 2008 and a decrease of 80 basis points from the same period in 2007. The cost of borrowed funds, including FHLB advances and subordinated debt, was 4.32% for the second quarter of 2008, representing a decrease of 49 basis points from the prior quarter and 166 basis points from the same period in 2007. The average cost of interest bearing liabilities for the six months ended June 30, 2008 was 3.17% as compared to 3.92% for the same period of the prior year due to similar reasons discussed for the three month fluctuation.
Loan Growth and Asset Quality:
Total average loans for the second quarter of 2008 increased by $12.9 million over the previous quarter, with the increase principally driven by seasonal agricultural loan advances.
Total non-performing assets, net of government guarantees on loans, were 3.44% of total assets at June 30, 2008, as compared to 2.30% at March 31, 2008 and 1.90% of total assets at December 31, 2007. Foreclosed assets at June 30, 2008 totaled $3.0 million and consisted of ten properties, as compared to $1.6 million and six properties at March 31, 2008. Non-performing loans, net of government guaranteed amounts, represented 3.94% of total loans at June 30, 2008 as compared to 2.67% of total loans at March 31, 2008, and 2.21% at December 31, 2007.
AWBC – 2008 Q2 Earnings
July 24, 2008
Page 4 of 15
At June 30, 2008, the Company had approximately $33.0 million of loans which were not classified as non-performing but were internally identified as potential problem loans due to management’s concerns about the borrower’s financial condition. This represented approximately 1.87% of total outstanding loans. At March 31, 2008, potential problem loans were approximately 1.22% of total outstanding loans. This increase is principally the result of internal credit classification downgrading of certain residential construction and development loans due to softening real estate market conditions.
The Company recognized a provision for loan losses of $16.4 million, or 3.68% of average loans on an annualized basis, for the quarter ended June 30, 2008 as compared to $12.8 million, or 2.89% of average loans on an annualized basis, for the quarter ended March 31, 2008. For the quarter ended June 30, 2007, the Company recognized a provision for loan losses of $1.5 million or 0.38% of average loans on an annualized basis. For the quarter ended June 30, 2008, net charge-offs were $11.7 million, or 2.63% of average loans annualized, as compared to $11.0 million, or 2.48% of average loans annualized, for the first quarter of 2008 and $1.9 million, or 0.46%, for the second quarter of 2007.
For the six months ended June 30, 2008, the Company recognized a provision for loan losses of $29.2 million, or 3.29% of average loans annualized, as compared to $1.5 million, or 0.21% of average loans annualized, for the six months ended June 30, 2007. For the six months ended June 30, 2008, net charge-offs were $22.7 million, or 2.56% of average loans annualized, as compared to $2.3 million, or 0.33% of average loans annualized, for the six months ended June 30, 2007.
The allowance for credit losses, which is comprised of the allowance for loan losses and reserve for unfunded commitments, was $32.9 million or 1.86% of total loans, an increase of 24 basis points over March 31, 2008, 35 basis points over December 31, 2007, and 45 basis points over June 30, 2007. The allowance for credit losses represented 47% of total non-performing loans (net of government guarantees) as of June 30, 2008 as compared to 61% at March 31, 2008.
Deposits and Borrowed Funds:
Total average deposits for the second quarter of 2008 were $1.59 billion, an increase of approximately 4% from the prior quarter. The average balance of certificates of deposit increased $77 million principally due to the issuance of brokered certificates, which increased by $87 million. This growth was offset by reductions in savings/money market deposits of $15 million. Total ending deposits at June 30, 2008 were $1.61 billion, up from $1.58 billion at March 31, 2008 and $1.53 billion at December 31, 2007. The increase was related mainly to growth in the brokered certificates ($107 million since March 31, 2008, and $138 million since December 31, 2007).
Total FHLB and other borrowings at June 30, 2008 were $191 million as compared to $212 million at March 31, 2008 and $245 million at December 31, 2007. The decrease from year-end 2007 was principally due to the replacement of matured borrowings with brokered certificates of deposit.
Non-interest Income and Expense:
Non-interest income was $5.1 million for the quarter ended June 30, 2008 as compared to $4.2 million for the quarter ended March 31, 2008 and $4.7 million for the same period of the prior year. The increase over the prior quarter is principally related to fees on mortgage loan sales which increased $396 thousand, or 46%, as
AWBC – 2008 Q2 Earnings
July 24, 2008
Page 5 of 15
compared to the prior quarter. Additionally, fees and service charges on deposits increased $294 thousand, or 12%, over the prior quarter related mainly to overdraft fees and debit card fees. The other non-interest income includes $61 thousand related to sales on SBA loans during the second quarter and net gains of $49 thousand related to the sale-leaseback of two properties. Approximately another $600 thousand of deferred revenue related to one of these sales will be amortized into income over the next 10 years.
Non-interest income for the six months ended June 30, 2008 was $9.3 million as compared to $7.1 million for the same period of the prior year. Fees and service charges increased $1.5 million over the prior year, principally due to higher deposit service charge and debit card fee income. Fees on mortgage loan sales have increased $774 thousand as compared to the prior year.
Non-interest expense for the three months ended June 30, 2008 was $19.2 million, as compared to $45.8 million for March 31, 2008 and $19.2 million for the same quarter of the prior year. Excluding the impact of the $27 million goodwill impairment charge recognized during the first quarter of 2008, total non-interest expense for the second quarter of 2008 increased by $458 thousand, or 2.4% over the first quarter of 2008. The increase in total non-interest expense excluding goodwill impairment as compared to the prior quarter is principally due to increased FDIC deposit insurance premiums of $259 thousand (as the result of a one-time credit being fully utilized in the prior quarter) , and increased foreclosed asset and equipment expenses, offset by a reduction in salaries and employee benefit expense. Total non-interest expense for the second quarter of 2008 increased by $65 thousand over the same period in 2007.
For the six months ended June 30, 2008 non-interest expense was $65.0 million. Excluding the goodwill impairment charge, non-interest expense would have been $38.0 million as compared to $33.0 million in the prior year. The prior year did not include the operating expenses associated with Far West Bancorporation prior to the date of the merger, April 1, 2007, which is the primary cause of the increase. The salaries and employee benefits expense increased $1.1 million or 6% and other non-interest expenses increased $1.5 million including the Far West Bancorporation merger, FDIC credit discussed previously, legal costs and professional fees for services performed.
The efficiency ratio was 74.6% for the quarter ended June 30, 2008 as compared to 70.2%, excluding the goodwill impairment charge, for the quarter ended March 31, 2008. The efficiency ratio, excluding the goodwill impairment charge, was 72.4% for the six months ended June 30, 2008 as compared to 70.5% for the same period of the prior year. The increase in the ratio level from the prior quarter is related mainly to the decrease in net interest income which was offset slightly by the increase in the non-interest income.
Income Taxes:
The effective tax benefit rate, excluding the goodwill impairment charge, for the six months ended June 30, 2008 was 37.0% as compared to 35.0% in the prior year. The tax benefit rate for the three months ended June 30, 2008 was 43.9%, as compared to a benefit rate, excluding the goodwill impairment charge, of 25% for the first quarter of 2008 and an effective tax rate of 34.9% for the similar quarter of the prior year. The tax benefit rate is an approximation of management’s estimate of the tax rate for the remainder of the year.
AWBC – 2008 Q2 Earnings
July 24, 2008
Page 6 of 15
Earnings Conference Call:
The second quarter earnings conference call will be held Thursday, July 24, 2008 at 10:00 a.m. PDT (1:00 p.m. EDT). Management will discuss the second quarter 2008 operating results and provide an update on recent initiatives. Shareholders, analysts and other interested parties are invited to join the call. The call may be accessed via telephone at (800) 860-2442 (no pass code is required) or webcast atwww.awbank.net/IR.
About AmericanWest Bancorporation:
AmericanWest Bancorporation is a bank holding company whose principal subsidiary is AmericanWest Bank which includes Far West Bank operating as an integrated division of AmericanWest Bank. AmericanWest Bank is a community bank with 63 financial centers and two loan production offices located in Washington, Northern Idaho and Utah. For further information on the Company, please visit our web site atwww.awbank.net/IR.
The press release contains certain non-GAAP measures related to eliminating the effects of goodwill impairment on certain amounts and ratios presented and management believes these measures are meaningful as they provide a comparable basis to other periods presented.
This press release includes forward-looking statements, and AmericanWest Bancorporation intends for such statements to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements describe AmericanWest Bancorporation’s expectations regarding future events, including the performance of the construction and development loan portfolio, cost savings from operational changes, expense control and capital raising initiatives. Future events are difficult to predict and are subject to risk and uncertainty which could cause actual results to differ materially and adversely. Additional information regarding risks and uncertainties is included in AmericanWest Bancorporation’s periodic filings on Forms 10-K and 10-Q with the Securities and Exchange Commission. AmericanWest Bancorporation undertakes no obligation to revise or amend any forward-looking statements to reflect subsequent events or circumstances.
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July 24, 2008
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AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)
Consolidated Statements of Income (Loss):
| | | | | | | | | | | |
| | | For the three months ended: |
| | | 6/30/2008 | | | 3/31/2008 | | | 6/30/2007 |
INTEREST INCOME | | | | | | | | | | | |
Interest and fees on loans | | $ | 29,784 | | | $ | 32,784 | | | $ | 34,825 |
Interest on securities | | | 862 | | | | 827 | | | | 844 |
Other interest income | | | 93 | | | | 59 | | | | 85 |
| | | | | | | | | | | |
TOTAL INTEREST INCOME | | | 30,739 | | | | 33,670 | | | | 35,754 |
| | | | | | | | | | | |
INTEREST EXPENSE | | | | | | | | | | | |
Interest on deposits | | | 8,630 | | | | 9,052 | | | | 10,234 |
Interest on borrowings | | | 2,591 | | | | 3,331 | | | | 2,519 |
| | | | | | | | | | | |
TOTAL INTEREST EXPENSE | | | 11,221 | | | | 12,383 | | | | 12,753 |
| | | | | | | | | | | |
NET INTEREST INCOME | | | 19,518 | | | | 21,287 | | | | 23,001 |
Loan loss provision | | | 16,400 | | | | 12,800 | | | | 1,538 |
| | | | | | | | | | | |
NET INTEREST INCOME AFTER LOAN LOSS PROVISION | | | 3,118 | | | | 8,487 | | | | 21,463 |
| | | | | | | | | | | |
NON-INTEREST INCOME | | | | | | | | | | | |
Fees and service charges on deposits | | | 2,847 | | | | 2,553 | | | | 2,498 |
Fees on mortgage loan sales | | | 1,258 | | | | 862 | | | | 1,004 |
Other | | | 1,000 | | | | 805 | | | | 1,185 |
| | | | | | | | | | | |
TOTAL NON-INTEREST INCOME | | | 5,105 | | | | 4,220 | | | | 4,687 |
| | | | | | | | | | | |
NON-INTEREST EXPENSE | | | | | | | | | | | |
Salaries and employee benefits | | | 10,146 | | | | 10,786 | | | | 11,409 |
Equipment expense | | | 2,139 | | | | 1,845 | | | | 1,773 |
Occupancy expense, net | | | 1,765 | | | | 1,855 | | | | 1,388 |
Impairment of goodwill | | | — | | | | 27,000 | | | | — |
Amortization of intangible assets | | | 863 | | | | 885 | | | | 1,063 |
State business and occupation tax | | | 304 | | | | 288 | | | | 323 |
Foreclosed real estate and other foreclosed assets expense | | | 233 | | | | 63 | | | | 74 |
Other | | | 3,791 | | | | 3,061 | | | | 3,146 |
| | | | | | | | | | | |
TOTAL NON-INTEREST EXPENSE | | | 19,241 | | | | 45,783 | | | | 19,176 |
| | | | | | | | | | | |
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX | | | (11,018 | ) | | | (33,076 | ) | | | 6,974 |
PROVISION (BENEFIT) FOR INCOME TAX | | | (4,806 | ) | | | (1,519 | ) | | | 2,433 |
| | | | | | | | | | | |
NET INCOME (LOSS) | | $ | (6,212 | ) | | $ | (31,557 | ) | | $ | 4,541 |
| | | | | | | | | | | |
Basic earnings (loss) per common share | | $ | (0.36 | ) | | $ | (1.83 | ) | | $ | 0.26 |
Diluted earnings (loss) per common share | | $ | (0.36 | ) | | $ | (1.83 | ) | | $ | 0.26 |
Basic weighted average shares outstanding | | | 17,211 | | | | 17,206 | | | | 17,177 |
Diluted weighted average shares outstanding | | | 17,211 | | | | 17,206 | | | | 17,290 |
Ending book value per share | | $ | 14.16 | | | $ | 14.58 | | | $ | 16.46 |
Ending tangible book value per share | | $ | 7.42 | | | $ | 7.78 | | | $ | 7.84 |
Ending shares outstanding | | | 17,211 | | | | 17,209 | | | | 17,186 |
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July 24, 2008
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AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)
Consolidated Statements of Income (Loss):
| | | | | | | |
| | | For the six months ended: |
| | | 6/30/2008 | | | 6/30/2007 |
INTEREST INCOME | | | | | | | |
Interest and fees on loans | | $ | 62,568 | | | $ | 59,154 |
Interest on securities | | | 1,689 | | | | 1,306 |
Other interest income | | | 152 | | | | 156 |
| | | | | | | |
TOTAL INTEREST INCOME | | | 64,409 | | | | 60,616 |
| | | | | | | |
INTEREST EXPENSE | | | | | | | |
Interest on deposits | | | 17,682 | | | | 18,754 |
Interest on borrowings | | | 5,922 | | | | 4,127 |
| | | | | | | |
TOTAL INTEREST EXPENSE | | | 23,604 | | | | 22,881 |
| | | | | | | |
NET INTEREST INCOME | | | 40,805 | | | | 37,735 |
Loan loss provision | | | 29,200 | | | | 1,505 |
| | | | | | | |
NET INTEREST INCOME AFTER LOAN LOSS PROVISION | | | 11,605 | | | | 36,230 |
| | | | | | | |
NON-INTEREST INCOME | | | | | | | |
Fees and service charges on deposits | | | 5,400 | | | | 3,888 |
Fees on mortgage loan sales | | | 2,120 | | | | 1,346 |
Other | | | 1,805 | | | | 1,858 |
| | | | | | | |
TOTAL NON-INTEREST INCOME | | | 9,325 | | | | 7,092 |
| | | | | | | |
NON-INTEREST EXPENSE | | | | | | | |
Salaries and employee benefits | | | 20,932 | | | | 19,827 |
Equipment expense | | | 3,984 | | | | 3,034 |
Occupancy expense, net | | | 3,620 | | | | 2,615 |
Impairment of goodwill | | | 27,000 | | | | — |
Amortization of intangible assets | | | 1,748 | | | | 1,354 |
State business and occupation tax | | | 592 | | | | 627 |
Foreclosed real estate and other foreclosed assets expense | | | 296 | | | | 122 |
Other | | | 6,852 | | | | 5,397 |
| | | | | | | |
TOTAL NON-INTEREST EXPENSE | | | 65,024 | | | | 32,976 |
| | | | | | | |
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX | | | (44,094 | ) | | | 10,346 |
PROVISION (BENEFIT) FOR INCOME TAX | | | (6,325 | ) | | | 3,620 |
| | | | | | | |
NET INCOME (LOSS) | | $ | (37,769 | ) | | $ | 6,726 |
| | | | | | | |
Basic earnings (loss) per common share | | $ | (2.19 | ) | | $ | 0.47 |
Diluted earnings (loss) per common share | | $ | (2.19 | ) | | $ | 0.47 |
Basic weighted average shares outstanding | | | 17,208 | | | | 14,311 |
Diluted weighted average shares outstanding | | | 17,208 | | | | 14,432 |
Ending book value per share | | $ | 14.16 | | | $ | 16.46 |
Ending tangible book value per share | | $ | 7.42 | | | $ | 7.84 |
Ending shares outstanding | | | 17,211 | | | | 17,186 |
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AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)
Consolidated Statement of Condition:
| | | | | | | | | | | | | | | |
| | | June 30,
2008 | | | March 31,
2008 | | | December 31,
2007 | | June 30,
2007 | |
| ASSETS | | | | | | | | | | | | | | | |
Cash and due from banks | | $ | 50,469 | | | $ | 50,483 | | | $ | 46,591 | | $ | 58,850 | |
Overnight interest bearing deposits with other banks | | | 8,031 | | | | 239 | | | | 498 | | | 688 | |
| | | | | | | | | | | | | | | |
Cash and cash equivalents | | | 58,500 | | | | 50,722 | | | | 47,089 | | | 59,538 | |
Securities, available-for-sale at fair value | | | 70,245 | | | | 77,673 | | | | 66,985 | | | 68,979 | |
Loans, net of allowance for loan losses | | | 1,734,318 | | | | 1,725,615 | | | | 1,738,838 | | | 1,625,242 | |
Loans, held for sale | | | 14,134 | | | | 21,147 | | | | 11,105 | | | 13,051 | |
Accrued interest receivable | | | 10,080 | | | | 10,522 | | | | 11,766 | | | 11,816 | |
FHLB stock | | | 8,790 | | | | 10,147 | | | | 7,801 | | | 7,801 | |
Premises and equipment, net | | | 45,802 | | | | 48,489 | | | | 47,426 | | | 44,116 | |
Foreclosed real estate and other foreclosed assets | | | 2,962 | | | | 1,645 | | | | 1,230 | | | 213 | |
Bank owned life insurance | | | 29,660 | | | | 29,381 | | | | 29,104 | | | 28,550 | |
Goodwill | | | 100,852 | | | | 100,852 | | | | 127,852 | | | 129,147 | |
Intangible assets | | | 15,194 | | | | 16,057 | | | | 16,942 | | | 19,068 | |
Other assets | | | 18,965 | | | | 15,927 | | | | 14,107 | | | 4,084 | |
| | | | | | | | | | | | | | | |
TOTAL ASSETS | | $ | 2,109,502 | | | $ | 2,108,177 | | | $ | 2,120,245 | | $ | 2,011,605 | |
| | | | | | | | | | | | | | | |
| LIABILITIES | | | | | | | | | | | | | | | |
Non-interest bearing demand deposits | | $ | 321,102 | | | $ | 339,363 | | | $ | 342,701 | | $ | 348,763 | |
Interest bearing deposits: | | | | | | | | | | | | | | | |
NOW, savings accounts and MMDA | | | 655,138 | | | | 701,120 | | | | 678,314 | | | 659,246 | |
Time, $100,000 and over | | | 425,200 | | | | 326,353 | | | | 288,204 | | | 270,270 | |
Other time | | | 207,350 | | | | 215,169 | | | | 220,208 | | | 231,887 | |
| | | | | | | | | | | | | | | |
TOTAL DEPOSITS | | | 1,608,790 | | | | 1,582,005 | | | | 1,529,427 | | | 1,510,166 | |
FHLB advances | | | 190,623 | | | | 179,589 | | | | 208,052 | | | 157,329 | |
Other borrowings | | | 599 | | | | 32,439 | | | | 36,611 | | | 274 | |
Junior subordinated debt | | | 41,239 | | | | 41,239 | | | | 41,239 | | | 41,239 | |
Accrued interest payable | | | 6,147 | | | | 5,686 | | | | 5,339 | | | 5,049 | |
Other liabilities | | | 18,315 | | | | 16,379 | | | | 15,590 | | | 14,680 | |
| | | | | | | | | | | | | | | |
TOTAL LIABILITIES | | | 1,865,713 | | | | 1,857,337 | | | | 1,836,258 | | | 1,728,737 | |
| STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | | | |
Common stock, no par | | | 253,388 | | | | 253,319 | | | | 253,150 | | | 252,951 | |
Retained earnings (loss) | | | (9,173 | ) | | | (2,961 | ) | | | 30,709 | | | 30,273 | |
Accumulated other comprehensive income (loss), net of tax | | | (426 | ) | | | 482 | | | | 128 | | | (356 | ) |
| | | | | | | | | | | | | | | |
TOTAL STOCKHOLDERS’ EQUITY | | | 243,789 | | | | 250,840 | | | | 283,987 | | | 282,868 | |
| | | | | | | | | | | | | | | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 2,109,502 | | | $ | 2,108,177 | | | $ | 2,120,245 | | $ | 2,011,605 | |
| | | | | | | | | | | | | | | |
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AWBC – 2008 Q2 Earnings
July 24, 2008
Page 10 of 15
AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)
| | | | | | | | | | | | |
| | | Three Months Ended | |
| | | 6/30/2008 | | | GAAP
3/31/2008 | | | Non-GAAP (1)
3/31/2008 | | | 6/30/2007 | |
Financial Ratios, annualized: | | | | | | | | | | | | |
Return on average assets | | -1.18 | % | | -5.98 | % | | -0.86 | % | | 0.92 | % |
Return on average equity | | -9.91 | % | | -44.58 | % | | -6.44 | % | | 6.46 | % |
Return on tangible average equity | | -18.43 | % | | -90.25 | % | | -13.03 | % | | 13.60 | % |
Efficiency ratio | | 74.64 | % | | 176.02 | % | | 70.17 | % | | 65.42 | % |
Non-interest income to average assets | | 0.97 | % | | 0.80 | % | | 0.80 | % | | 0.95 | % |
Non-interest expenses to average assets | | 3.66 | % | | 8.68 | % | | 3.56 | % | | 3.87 | % |
Net interest margin to average earning assets (2) | | 4.19 | % | | 4.62 | % | | 4.62 | % | | 5.37 | % |
Ending stockholders’ equity to assets | | 11.56 | % | | 11.90 | % | | 13.18 | % | | 14.06 | % |
Ending tangible stockholders’ equity to tangible assets | | 6.41 | % | | 6.73 | % | | 6.73 | % | | 7.23 | % |
| | |
| | | Six Months Ended | | | | |
| | | GAAP
6/30/2008 | | | Non-GAAP (1)
6/30/2008 | | | 6/30/2007 | | | | |
Year to Date Financial Ratios, annualized: | | | | | | | | | | | | |
Return on average assets | | -3.59 | % | | -1.02 | % | | 0.80 | % | | | |
Return on average equity | | -28.40 | % | | -8.10 | % | | 6.20 | % | | | |
Return on tangible average equity | | -55.39 | % | | -15.79 | % | | 10.82 | % | | | |
Efficiency ratio | | 126.22 | % | | 72.36 | % | | 70.54 | % | | | |
Non-interest income to average assets | | 0.89 | % | | 0.89 | % | | 0.84 | % | | | |
Non-interest expenses to average assets | | 6.18 | % | | 3.61 | % | | 3.92 | % | | | |
Net interest margin to average earning assets (2) | | 4.41 | % | | 4.41 | % | | 5.08 | % | | | |
| (1) | Excludes goodwill impairment. |
| (2) | Presented on a tax equivalent basis for tax exempt securities. |
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AWBC – 2008 Q2 Earnings
July 24, 2008
Page 11 of 15
AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)
| | | | | | | | | | | | | | | | |
| | | 6/30/2008 | | | 3/31/2008 | | | 12/31/2007 | | | 6/30/2007 | |
Loan Portfolio: | | | | | | | | | | | | | | | | |
Commercial real estate | | $ | 604,246 | | | $ | 579,443 | | | $ | 580,627 | | | $ | 577,417 | |
Construction, land development and other land | | | 497,467 | | | | 525,547 | | | | 523,913 | | | | 452,280 | |
Commercial and industrial | | | 282,733 | | | | 316,456 | | | | 321,638 | | | | 293,406 | |
Residential real estate | | | 176,045 | | | | 149,150 | | | | 153,043 | | | | 129,378 | |
Agricultural | | | 167,125 | | | | 139,791 | | | | 157,196 | | | | 161,676 | |
Installment and other | | | 41,296 | | | | 45,485 | | | | 31,455 | | | | 36,162 | |
| | | | | | | | | | | | | | | | |
Total loans | | | 1,768,912 | | | | 1,755,872 | | | | 1,767,872 | | | | 1,650,319 | |
Allowance for loan losses | | | (31,768 | ) | | | (27,089 | ) | | | (25,258 | ) | | | (21,830 | ) |
Deferred loan fees, net of deferred costs | | | (2,826 | ) | | | (3,168 | ) | | | (3,776 | ) | | | (3,247 | ) |
| | | | | | | | | | | | | | | | |
Net loans | | $ | 1,734,318 | | | $ | 1,725,615 | | | $ | 1,738,838 | | | $ | 1,625,242 | |
| | | | | | | | | | | | | | | | |
Non-performing Assets: | | | | | | | | | | | | | | | | |
Accruing loans over 90 days past due (1) | | $ | 0 | | | $ | 3,578 | | | $ | 0 | | | $ | 0 | |
Nonaccrual loans (1) | | | 69,632 | | | | 43,269 | | | | 39,098 | | | | 23,640 | |
| | | | | | | | | | | | | | | | |
Total non-performing loans | | $ | 69,632 | | | $ | 46,847 | | | $ | 39,098 | | | $ | 23,640 | |
Foreclosed real estate and other foreclosed assets | | | 2,962 | | | | 1,645 | | | | 1,230 | | | | 213 | |
| | | | | | | | | | | | | | | | |
Total non-performing assets | | $ | 72,594 | | | $ | 48,492 | | | $ | 40,328 | | | $ | 23,853 | |
| | | | | | | | | | | | | | | | |
Allowance for Credit Losses: | | | | | | | | | | | | | | | | |
Allowance for loan losses | | $ | 31,768 | | | $ | 27,089 | | | $ | 25,258 | | | $ | 21,830 | |
Reserve for unfunded commitments | | | 1,172 | | | | 1,272 | | | | 1,374 | | | | 1,383 | |
| | | | | | | | | | | | | | | | |
Allowance for credit losses | | $ | 32,940 | | | $ | 28,361 | | | $ | 26,632 | | | $ | 23,213 | |
| | | | | | | | | | | | | | | | |
Credit Quality Ratios: | | | | | | | | | | | | | | | | |
Non-performing loans to total gross loans (1) | | | 3.94 | % | | | 2.67 | % | | | 2.21 | % | | | 1.43 | % |
Non-performing assets to total assets (1) | | | 3.44 | % | | | 2.30 | % | | | 1.90 | % | | | 1.19 | % |
Allowance for loan loss to total gross loans | | | 1.80 | % | | | 1.54 | % | | | 1.43 | % | | | 1.32 | % |
Allowance for credit losses to total gross loans | | | 1.86 | % | | | 1.62 | % | | | 1.51 | % | | | 1.41 | % |
Allowance for credit losses to non-performing loans (1) | | | 47.31 | % | | | 60.54 | % | | | 68.12 | % | | | 98.19 | % |
| (1) | Amounts and ratios shown net of government guarantees on non-performing loans of $1.1 million, $1.2 million, $922 thousand, and $1.1 million, respectively. |
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AWBC – 2008 Q2 Earnings
July 24, 2008
Page 12 of 15
AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | 6/30/2008 | | | 3/31/2008 | | | 6/30/2007 | | | 6/30/2008 | | | 6/30/2007 | |
Allowance for Loan Losses: | | | | | | | | | | | | | | | | | | | | |
Balance, beginning of period | | $ | 27,089 | | | $ | 25,258 | | | $ | 14,657 | | | $ | 25,258 | | | $ | 15,136 | |
Loan loss provision | | | 16,400 | | | | 12,800 | | | | 1,538 | | | | 29,200 | | | | 1,505 | |
Allowance related to acquired loans | | | — | | | | — | | | | 7,529 | | | | — | | | | 7,529 | |
Loans charged-off | | | (12,201 | ) | | | (11,088 | ) | | | (2,074 | ) | | | (23,289 | ) | | | (2,620 | ) |
Recoveries | | | 480 | | | | 119 | | | | 180 | | | | 599 | | | | 280 | |
| | | | | | | | | | | | | | | | | | | | |
Balance, end of period | | $ | 31,768 | | | $ | 27,089 | | | $ | 21,830 | | | $ | 31,768 | | | $ | 21,830 | |
| | | | | | | | | | | | | | | | | | | | |
Reserve for Unfunded Commitments: | | | | | | | | | | | | | | | | | | | | |
Balance, beginning of period | | $ | 1,272 | | | $ | 1,374 | | | $ | 914 | | | $ | 1,374 | | | $ | 881 | |
Provision for unfunded commitments | | | (100 | ) | | | (102 | ) | | | 212 | | | | (202 | ) | | | 245 | |
Reserve related to acquired unfunded commitments | | | — | | | | — | | | | 257 | | | | — | | | | 257 | |
| | | | | | | | | | | | | | | | | | | | |
Balance, end of period | | $ | 1,172 | | | $ | 1,272 | | | $ | 1,383 | | | $ | 1,172 | | | $ | 1,383 | |
| | | | | | | | | | | | | | | | | | | | |
Net charge-offs to average gross loans (1) | | | 2.63 | % | | | 2.48 | % | | | 0.46 | % | | | 2.56 | % | | | 0.33 | % |
Provision for loan losses to average gross loans (1) | | | 3.68 | % | | | 2.89 | % | | | 0.38 | % | | | 3.29 | % | | | 0.21 | % |
| (1) | Quarterly ratios are annualized. |
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AWBC – 2008 Q2 Earnings
July 24, 2008
Page 13 of 15
AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)
Quarter to Date Net Interest Margin:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
June 30, 2008 | | | Three Months Ended
March 31, 2008 | | | Three Months Ended
June 30, 2007 | |
($ in thousands) | | Average
Balance | | Interest | | % | | | Average
Balance | | Interest | | % | | | Average
Balance | | Interest | | % | |
| Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans (1) | | $ | 1,791,902 | | $ | 29,784 | | 6.69 | % | | $ | 1,778,977 | | $ | 32,784 | | 7.41 | % | | $ | 1,644,490 | | $ | 34,825 | | 8.49 | % |
Taxable securities | | | 52,572 | | | 655 | | 5.01 | % | | | 51,844 | | | 647 | | 5.02 | % | | | 47,883 | | | 625 | | 5.24 | % |
Non-taxable securities (2) | | | 20,517 | | | 313 | | 6.14 | % | | | 17,918 | | | 273 | | 6.13 | % | | | 21,128 | | | 330 | | 6.26 | % |
FHLB Stock | | | 9,212 | | | 42 | | 1.83 | % | | | 9,689 | | | 20 | | 0.83 | % | | | 7,524 | | | 12 | | 0.64 | % |
Overnight deposits with other banks and other | | | 7,603 | | | 51 | | 2.70 | % | | | 2,688 | | | 39 | | 5.84 | % | | | 5,085 | | | 73 | | 5.76 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total interest earning assets | | | 1,881,806 | | | 30,845 | | 6.59 | % | | | 1,861,116 | | | 33,763 | | 7.30 | % | | | 1,726,110 | | | 35,865 | | 8.33 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-interest earning assets | | | 229,959 | | | | | | | | | 260,208 | | | | | | | | | 261,758 | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 2,111,765 | | | | | | | | $ | 2,121,324 | | | | | | | | $ | 1,987,868 | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest bearing demand deposits | | $ | 137,774 | | $ | 183 | | 0.53 | % | | $ | 138,319 | | $ | 189 | | 0.55 | % | | $ | 146,496 | | $ | 268 | | 0.73 | % |
Savings and MMDA deposits | | | 530,890 | | | 2,508 | | 1.90 | % | | | 546,262 | | | 2,953 | | 2.17 | % | | | 521,396 | | | 3,970 | | 3.05 | % |
Time deposits | | | 601,158 | | | 5,939 | | 3.97 | % | | | 523,962 | | | 5,910 | | 4.54 | % | | | 496,021 | | | 5,996 | | 4.85 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total interest bearing deposits | | | 1,269,822 | | | 8,630 | | 2.73 | % | | | 1,208,543 | | | 9,052 | | 3.01 | % | | | 1,163,913 | | | 10,234 | | 3.53 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Overnight borrowings | | | 30,194 | | | 191 | | 2.54 | % | | | 85,425 | | | 822 | | 3.87 | % | | | 58,644 | | | 826 | | 5.65 | % |
Junior subordinated debt | | | 41,239 | | | 655 | | 6.39 | % | | | 41,239 | | | 736 | | 7.18 | % | | | 41,239 | | | 766 | | 7.45 | % |
Other borrowings | | | 169,998 | | | 1,745 | | 4.13 | % | | | 151,672 | | | 1,773 | | 4.70 | % | | | 69,164 | | | 927 | | 5.38 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total interest bearing liabilities | | | 1,511,253 | | | 11,221 | | 2.99 | % | | | 1,486,879 | | | 12,383 | | 3.35 | % | | | 1,332,960 | | | 12,753 | | 3.84 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-interest bearing demand deposits | | | 324,142 | | | | | | | | | 327,931 | | | | | | | | | 351,751 | | | | | | |
Other non-interest bearing liabilities | | | 24,347 | | | | | | | | | 21,821 | | | | | | | | | 21,013 | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total liabilities | | | 1,859,742 | | | | | | | | | 1,836,631 | | | | | | | | | 1,705,724 | | | | | | |
| Stockholders’ Equity | | | 252,023 | | | | | | | | | 284,693 | | | | | | | | | 282,144 | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 2,111,765 | | | | | | | | $ | 2,121,324 | | | | | | | | $ | 1,987,868 | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income and spread | | | | | $ | 19,624 | | 3.60 | % | | | | | $ | 21,380 | | 3.95 | % | | | | | $ | 23,112 | | 4.49 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest margin to average earning assets | | | | | | | | 4.19 | % | | | | | | | | 4.62 | % | | | | | | | | 5.37 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Includes loans held for sale and non-performing loans in average loans. Interest income includes loan fee income. |
| (2) | Tax-exempt securities income has been presented using a tax equivalent basis and an assumed tax rate of 34%. |
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AWBC – 2008 Q2 Earnings
July 24, 2008
Page 14 of 15
AmericanWest Bancorporation
Selected Consolidated Financial Highlights
($ in thousands, except per share data and ratios; unaudited)
Year to Date Net Interest Margin:
| | | | | | | | | | | | | | | | | | |
| | | Six Months Ended June 30, | |
| | | 2008 | | | 2007 | |
($ in thousands) | | Average
Balance | | Interest | | % | | | Average
Balance | | Interest | | % | |
| Assets | | | | | | | | | | | | | | | | | | |
Loans (1) | | $ | 1,785,447 | | $ | 62,568 | | 7.05 | % | | $ | 1,438,143 | | $ | 59,154 | | 8.29 | % |
Taxable securities | | | 52,214 | | | 1,302 | | 5.01 | % | | | 39,124 | | | 995 | | 5.13 | % |
Non-taxable securities (2) | | | 19,218 | | | 586 | | 6.13 | % | | | 15,084 | | | 471 | | 6.30 | % |
FHLB Stock | | | 9,450 | | | 62 | | 1.32 | % | | | 6,925 | | | 18 | | 0.52 | % |
Overnight deposits with other banks and other | | | 5,213 | | | 90 | | 3.47 | % | | | 4,791 | | | 138 | | 5.81 | % |
| | | | | | | | | | | | | | | | | | |
Total interest earning assets | | | 1,871,542 | | | 64,608 | | 6.94 | % | | | 1,504,067 | | | 60,776 | | 8.15 | % |
| | | | | | | | | | | | | | | | | | |
Non-interest earning assets | | | 245,046 | | | | | | | | | 192,774 | | | | | | |
| | | | | | | | | | | | | | | | | | |
Total assets | | $ | 2,116,588 | | | | | | | | $ | 1,696,841 | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | | | | | | | |
Interest bearing demand deposits | | $ | 138,046 | | $ | 372 | | 0.54 | % | | $ | 117,743 | | $ | 446 | | 0.76 | % |
Savings and MMDA deposits | | | 538,576 | | | 5,462 | | 2.04 | % | | | 454,357 | | | 7,067 | | 3.14 | % |
Time deposits | | | 562,560 | | | 11,848 | | 4.24 | % | | | 465,591 | | | 11,241 | | 4.87 | % |
| | | | | | | | | | | | | | | | | | |
Total interest bearing deposits | | | 1,239,182 | | | 17,682 | | 2.87 | % | | | 1,037,691 | | | 18,754 | | 3.64 | % |
| | | | | | | | | | | | | | | | | | |
Overnight borrowings | | | 57,810 | | | 1,013 | | 3.52 | % | | | 40,524 | | | 1,130 | | 5.62 | % |
Junior subordinated debt | | | 41,239 | | | 1,392 | | 6.79 | % | | | 32,126 | | | 1,228 | | 7.71 | % |
Other borrowings | | | 160,834 | | | 3,517 | | 4.40 | % | | | 65,664 | | | 1,769 | | 5.43 | % |
| | | | | | | | | | | | | | | | | | |
Total interest bearing liabilities | | | 1,499,065 | | | 23,604 | | 3.17 | % | | | 1,176,005 | | | 22,881 | | 3.92 | % |
| | | | | | | | | | | | | | | | | | |
Non-interest bearing demand deposits | | | 326,550 | | | | | | | | | 285,351 | | | | | | |
Other noninterest bearing liabilities | | | 23,571 | | | | | | | | | 16,800 | | | | | | |
| | | | | | | | | | | | | | | | | | |
Total liabilities | | | 1,849,186 | | | | | | | | | 1,478,156 | | | | | | |
| Stockholders’ Equity | | | 267,402 | | | | | | | | | 218,685 | | | | | | |
| | | | | | | | | | | | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 2,116,588 | | | | | | | | $ | 1,696,841 | | | | | | |
| | | | | | | | | | | | | | | | | | |
Net interest income and spread | | | | | $ | 41,004 | | 3.77 | % | | | | | $ | 37,895 | | 4.23 | % |
| | | | | | | | | | | | | | | | | | |
Net interest margin to average earning assets | | | | | | | | 4.41 | % | | | | | | | | 5.08 | % |
| | | | | | | | | | | | | | | | | | |
| (1) | Includes loans held for sale and non-performing loans in average loans. Interest income includes loan fee income. |
| (2) | Tax-exempt securities income has been presented using a tax equivalent basis and an assumed tax rate of 34%. |
AWBC – 2008 Q2 Earnings
July 24, 2008
Page 15 of 15
Contacts:
AmericanWest Bancorporation
Robert M. Daugherty
President and CEO
509.344.5329
bdaugherty@awbank.net
or
Patrick J. Rusnak
Chief Operating Officer
509.232.1963
prusnak@awbank.net
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