EXHIBIT 99.1
Press Release
January 19, 2004
FOR IMMEDIATE RELEASE
For more information contact:
Doug Gulling, Chief Financial Officer (515) 222-2309
WEST BANCORPORATION, INC. ANNOUNCES RESULTS FOR 4TH QUARTER AND THE YEAR 2003
AND DIRECTOR RETIREMENTS
West Des Moines, IA -- West Bancorporation, Inc. (WTBA), parent company of West
Bank and WB Capital Management Inc. (d/b/a VMF Capital), reports net income of
$17,283,000 for the year ended December 31, 2003, compared to $16,376,000 for
2002, an increase of 5.5 percent over 2002. Earnings per share were $1.08
compared to $1.02 for 2002. This performance resulted in a return on average
equity of 19.48 percent, a return on average assets of 1.85 percent, and an
efficiency ratio of 34.78 percent. As of December 31, 2003, equity as a
percentage of total assets was 9.3 percent.
For the fourth quarter of 2003, net income was $4,417,000, or $0.28 per share,
compared to $4,378,000 or $0.27 per share for the fourth quarter of 2002. The
return on average equity, return on average assets and the efficiency ratio were
19.05 percent, 1.74 percent and 45.75 percent, respectively for the fourth
quarter of 2003.
Net income for the fourth quarter of 2003 was $147,000 lower than the third
quarter of 2003. The decline is primarily due to the fact that gains from the
sale of loans in the secondary market decreased by $176,000, or approximately
$109,000 on an after-tax basis. This is the result of reduced residential
mortgage loan volume as interest rates trended upward. As projected, WB Capital
Management Inc., which commenced operations on October 1, 2003 by the
acquisition of VMF Capital, L.L.C., had a net loss for the quarter of $82,000.
WB Capital Management is projected to breakeven in 2004. Also, the net interest
margin declined to 3.67 percent for the fourth quarter of 2003 from 3.86 percent
in the third quarter of 2003. The decline was due to a decrease in the loan
portfolio yield as the interest rate on new loans was generally lower than the
interest rate associated with maturing loans.
During the fourth quarter of 2003, the Company received $821,000 in tax-exempt
income from life insurance proceeds as a result of the untimely death of one of
the Bank's officers. The Company decided to form a charitable foundation and
contribute the tax-equivalent amount of the income received from the insurance
claim. This will allow the proceeds from the death claim to benefit worthwhile
charities in future years. The amount of the donation was $1,330,000. The net
effect of these transactions on net income was zero.
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The Company's efficiency ratio was higher in the fourth quarter and year ended
December 31, 2003 than in prior periods because of the receipt of the income
from the life insurance proceeds and the related charitable contribution, and
the results of WB Capital Management Inc. Excluding these two items, the
Company's efficiency ratio would have been 33.08 percent and 31.10 percent for
the fourth quarter and year ended December 31, 2003, respectively. The Company
expects the efficiency ratio for 2004 to be in the range of 38 percent, with 4
percent attributable to WB Capital Management Inc.
Net income for 2003 was $907,000 higher than 2002. Most of that increase is
attributable to higher net interest income. Net interest income increased in
large part because of the acquisition of approximately $103 million in
interest-earning assets in the Hawkeye State Bank transaction effective July 18,
2003. The after-tax increase in net interest income was approximately $822,000
due to the higher level of interest-earning assets, which offsets a 20 basis
point decline in the net interest margin for 2003 to 3.77 percent.
The amount of nonaccrual loans as of December 31, 2003 dropped to $1,668,000
from $1,816,000 at September 30, 2003, and was slightly higher than the December
31, 2002 total of $1,354,000. Loans past due 90 days or more as of the end of
2003 dropped to $125,000 from $545,000 a year ago and $2,691,000 at September
30, 2003. Likewise, other real estate owned was $441,000 at December 31, 2003
compared to $529,000 and $674,000 at December 31, 2002 and September 30, 2003,
respectively. The allowance for loan losses as a percent of total loans was
1.00% as of December 31, 2003 compared to .92% a year earlier.
The Corporate Governance and Nominating Committee of the Company's Board of
Directors is reviewing candidates for nomination to the Board of Directors.
During the process, David L. Miller and Raymond G. Johnston informed Committee
members that they will retire from the Company's Board of Directors effective at
the end of their terms on April 15, 2004, the date of the Company's annual
shareholders' meeting. Both Mr. Miller and Mr. Johnston informed Committee
members their retirement was for personal reasons. Mr. Johnston joined West Bank
in 1984 as a senior vice-president, was executive vice president from 1988 to
1996, and began serving on the board of the Company and West Bank in 1986. He
retired from the Bank's board in 2003. Mr. Miller has been associated with West
Bank since 1961 and began phasing into full retirement from the Company at the
end of 2001 when he retired as Chairman and Chief Executive Officer of West
Bank. He retired as Chairman, President and Chief Executive Officer of the
Company in early 2003 and from West Bank's board effective January 1, 2004. Mr.
Miller will remain an advisor to the Company through a life-time consulting
agreement.
West Bancorporation, Inc. is headquartered in West Des Moines, Iowa and through
its subsidiary, West Bank, has been serving the greater metropolitan Des Moines
area for 110 years and the Iowa City area since July of 2003. West Bank focuses
on lending and deposit services for consumers and small to medium sized
businesses. VMF Capital, with offices in Cedar Rapids and Clive, Iowa, provides
portfolio management services to individuals, retirement plans, corporations,
foundations and endowments.
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WEST BANCORPORATION, INC. AND SUBSIDIARIES
Financial Information
DECEMBER 31,
CONSOLIDATED STATEMENTS OF CONDITION 2003 2002
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ASSETS
Cash and due from banks $ 27,786,795 $ 23,022,298
Short-term investments 54,287,004 158,191,770
Securities 274,912,746 212,291,701
Loans 599,355,407 488,452,911
Allowance for loan losses (5,975,587) (4,493,583)
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Loans, net 593,379,820 483,959,328
Goodwill and other intangible assets 16,900,487 47,730
Cash value of bank-owned life insurance 20,386,714 -
Other assets 12,958,045 8,603,236
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TOTAL ASSETS $ 1,000,611,611 $ 886,116,063
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LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing $ 172,070,832 $ 145,208,492
Interest-bearing
Demand and savings 403,060,980 338,775,544
Time 129,942,201 129,114,464
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Total deposits 705,074,013 613,098,500
Short-term borrowings 94,584,648 132,515,543
Long-term borrowings 106,024,315 51,600,000
Other liabilities 2,032,291 3,077,858
Stockholders'equity 92,896,344 85,824,162
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,000,611,611 $ 886,116,063
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PER COMMON SHARE MARKET INFORMATION*
Net Income Dividends High Low
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2003
1st quarter $0.25 $0.16 $17.54 $14.35
2nd quarter 0.26 0.16 19.61 15.77
3rd quarter 0.28 0.16 18.82 16.56
4th quarter 0.28 0.16 18.54 17.05
2002
1st quarter $0.24 $0.15 $14.00 $11.50
2nd quarter 0.25 0.15 18.00 13.15
3rd quarter 0.26 0.16 16.50 14.38
4th quarter 0.27 0.16 15.63 14.40
*The prices shown are the high and low sale prices for the Company's common
stock, which trades on the NASDAQ National Market, under the symbol WTBA. The
market quotations, reported by NASDAQ, do not include retail markup, markdown or
commissions.
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WEST BANCORPORATION, INC. AND SUBSIDIARIES
Financial Information (continued)
(unaudited)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
CONSOLIDATED STATEMENTS OF OPERATION 2003 2002 2003 2002
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INTEREST INCOME
Loans $ 8,627,708 $ 8,249,621 $ 32,633,401 $ 33,035,194
Securities 2,474,919 2,466,113 9,564,524 9,794,216
Other 319,731 510,654 1,263,190 1,810,348
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Total interest income 11,422,358 11,226,388 43,461,115 44,639,758
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INTEREST EXPENSE
Deposits 1,344,944 1,927,193 5,750,003 8,839,642
Short-term borrowings 298,298 510,660 1,511,615 1,958,719
Long-term borrowings 1,299,123 723,775 3,877,773 2,851,210
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Total interest expense 2,942,365 3,161,628 11,139,391 13,649,571
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NET INTEREST INCOME 8,479,993 8,064,760 32,321,724 30,990,187
Provision for loan losses 225,000 200,000 850,000 910,000
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 8,254,993 7,864,760 31,471,724 30,080,187
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NONINTEREST INCOME
Service charges on deposit accounts 1,274,773 1,213,724 4,811,335 4,527,170
Trust services 121,000 132,000 507,000 569,634
Investment advisory fees 503,899 - 503,899 -
Increase in cash value of bank-owned life insurance 252,605 - 666,785 -
Proceeds from bank-owned life insurance 821,254 - 821,254 -
Net realized gains from sales of securities available for sale 152,581 24,430 299,562 115,939
Other income 378,638 371,896 1,695,386 1,401,459
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Total noninterest income 3,504,750 1,742,050 9,305,221 6,614,202
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NONINTEREST EXPENSE
Salaries and employee benefits 2,340,553 1,615,980 7,700,608 6,408,438
Occupancy 480,638 344,654 1,582,660 1,310,971
Data processing 354,824 237,110 1,130,131 1,006,272
Charitable contributions 1,370,847 19,592 1,483,516 106,552
Other expense 969,803 533,206 2,797,331 2,388,294
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Total noninterest expense 5,516,665 2,750,542 14,694,246 11,220,527
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Income before income taxes 6,243,078 6,856,268 26,082,699 25,473,862
Income taxes 1,825,721 2,478,881 8,800,071 9,098,059
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NET INCOME $ 4,417,357 $ 4,377,387 $ 17,282,628 $ 16,375,803
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PERFORMANCE HIGHLIGHTS
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Return on average equity 19.05% 20.57% 19.48% 19.99%
Return on average assets 1.74% 1.98% 1.85% 1.95%
Net interest margin 3.67% 3.90% 3.77% 3.97%
Efficiency ratio 45.75% 27.47% 34.78% 29.19%
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