EXHIBIT 99.1
Press Release
October 18, 2004
FOR IMMEDIATE RELEASE
For more information contact:
Doug Gulling, Chief Financial Officer (515) 222-2309
West Bancorporation, Inc. Announces Results for 3rd Quarter of 2004
West Des Moines, Iowa -- West Bancorporation, Inc. (Nasdaq: WTBA), parent
company of West Bank and WB Capital Management Inc., d/b/a VMF Capital, reports
net income for the third quarter of 2004 of $4,807,000, which is a 5.3 percent
increase over the same period last year. Earnings per share were $.29 this
quarter compared to $.27 for the same quarter last year. Total capital as a
percentage of total assets was 8.4 percent as of September 30, 2004. For the
third quarter of 2004, the return on average equity was 20.5 percent and the
return on average assets was 1.8 percent.
For the first nine months of 2004, net income was $13,622,000, or $.81 per
share, compared to $12,865,000 and $.76, respectively, for the same period last
year. Year-to-date return on average equity was 19.5 percent and return on
average assets was 1.8 percent.
Year-to-date net income exceeded last year primarily because of the increase in
earning assets. Compared to a year ago, loans are up $98 million and the
investment securities portfolio is $78 million higher. This growth has been
funded by deposits, which have increased $158 million over last year. Most of
the deposit growth has come from public unit certificates of deposit.
Year-to-date net interest margin has decreased 2 basis points from a year ago.
Average loan and deposit rates are both lower than a year ago, but with changes
in the mix of earning assets and interest bearing liabilities, the Company was
able to maintain the net interest margin. During the third quarter of 2004 the
net interest margin was 3.74%, which was 2 basis points lower than the second
quarter of 2004. The increase in market rates has caused an increase in the
rates offered on longer term certificates of deposit and the cost of short term
borrowings.
Noninterest income was higher than last year due to investment advisory fees
earned by VMF Capital. Those fees totaled $711,000 for the quarter and
$1,900,000 year-to-date. VMF Capital was acquired in October of 2003 so there
were no such fees for the comparable periods last year. In addition, the
increase in the cash value of bank-owned life insurance (BOLI) was $244,000
higher than last year. The increase is due to the fact that BOLI was purchased
during the year 2003 and has been outstanding for the entire year of 2004. Gains
from the sale of real estate loans in the secondary market are $194,000 lower
than last year due to a decrease in the volume of loans originated this year.
--more--
Year-to-date noninterest expense was 38% higher than a year ago and 23% higher
when comparing the third quarter of 2004 to the same period last year. The
increase is primarily due to the increased operating expenses associated with
the Iowa City banking offices acquired in July of 2003 and the two VMF Capital
locations acquired in October of last year.
Loans as of September 30, 2004, totaled $677,752,000, up $97,617,000 from a year
ago. This growth has been in the areas of commercial real estate, construction
and commercial loans. Nonaccrual loans totaled $919,000 as of September 30,
2004, down from $1,816,000 at September 30, 2003. Loans past due 90 days and
still accruing interest amounted to $132,000 at September 30, 2004 compared to
$2,691,000 last year. Other real estate owned totaled $195,000 at September 30,
2004, down from $674,000 a year ago. The allowance for loan losses as a
percentage of total loans was .91 percent as of September 30, 2004. This
compares to 1.01 percent a year ago.
Deposits totaled $793,145,000 at September 30, 2004. This is an increase of
$158,129,000 from last year at this time. The growth has been in checking
accounts, money market accounts and time deposits $100,000 and over. The
increase in the time deposit category has been mostly public unit deposits.
During the third quarter of 2004, the Company paid a 5% stock dividend in
addition to its regular quarterly cash dividend. All per share numbers have been
restated to reflect that stock dividend.
West Bancorporation, Inc. is headquartered in West Des Moines, Iowa. West Bank
has been serving the greater metropolitan Des Moines area for 111 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.
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.
--more--
WEST BANCORPORATION, INC. AND SUBSIDIARIES
Financial Information
(unaudited)
SEPTEMBER 30, SEPTEMBER 30,
CONSOLIDATED STATEMENTS OF CONDITION 2004 2003
--------------- --------------
ASSETS
Cash and due from banks $ 28,819,898 $ 15,263,321
Short-term investments 39,092,295 49,014,909
Securities 354,821,552 276,727,360
Loans 677,752,180 580,134,688
Allowance for loan losses (6,139,881) (5,879,375)
--------------- --------------
Loans, net 671,612,299 574,255,313
Goodwill and other intangible assets 16,644,392 14,940,535
Bank-owned life insurance 21,044,752 20,414,180
Other assets 13,207,725 12,504,387
--------------- --------------
TOTAL ASSETS $ 1,145,242,913 $ 963,120,005
=============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing $ 179,312,400 $ 150,467,680
Interest-bearing
Demand 41,728,823 49,616,142
Savings 324,780,327 312,242,571
Time 247,323,805 122,689,489
--------------- --------------
Total deposits 793,145,355 635,015,882
Short-term borrowings 139,765,007 125,083,234
Long-term borrowings 101,966,545 108,445,736
Other liabilities 14,336,591 3,442,679
Stockholders'equity 96,029,415 91,132,474
--------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,145,242,913 $ 963,120,005
=============== ==============
PER COMMON SHARE (1) MARKET INFORMATION (1)(2)
Net Income Dividends High Low
---------- --------- ------ ------
2004
1st quarter $ 0.25 $0.152 $17.14 $15.40
2nd quarter 0.27 0.152 17.14 13.93
3rd quarter 0.29 0.160 17.54 14.76
2003
1st quarter 0.24 0.152 16.70 13.67
2nd quarter 0.25 0.152 18.68 15.02
3rd quarter 0.27 0.152 17.92 15.77
4th quarter 0.26 0.152 17.66 16.24
(1) In July 2004, the Company's Board of Directors authorized a 5% stock
dividend. Per share numbers in this report have been adjusted for that stock
dividend.
(2) 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.
(3) Minor reclassifications were made to certain 2003 categories to conform to
the 2004 presentation.
WEST BANCORPORATION, INC. AND SUBSIDIARIES
Financial Information (continued)
(unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
CONSOLIDATED STATEMENTS OF OPERATION (3) 2004 2003 2004 2003
----------- ----------- ------------ ------------
INTEREST INCOME
Loans $ 9,457,232 $ 8,636,379 $ 27,036,739 $ 24,005,693
Securities 2,931,536 2,563,926 8,056,948 7,089,605
Other 183,265 124,779 550,411 943,459
----------- ----------- ------------ ------------
Total interest income 12,572,033 11,325,084 35,644,098 32,038,757
----------- ----------- ------------ ------------
INTEREST EXPENSE
Deposits 1,844,293 1,341,247 4,754,006 4,405,059
Short-term borrowings 399,939 321,609 815,508 1,213,317
Long-term borrowings 1,309,291 1,154,703 3,899,908 2,578,650
----------- ----------- ------------ ------------
Total interest expense 3,553,523 2,817,559 9,469,422 8,197,026
----------- ----------- ------------ ------------
NET INTEREST INCOME 9,018,510 8,507,525 26,174,676 23,841,731
Provision for loan losses 325,000 250,000 775,000 625,000
----------- ----------- ------------ ------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 8,693,510 8,257,525 25,399,676 23,216,731
----------- ----------- ------------ ------------
NONINTEREST INCOME
Service charges on deposit accounts 1,339,223 1,305,158 3,759,792 3,663,375
Trust services 157,000 132,000 415,500 386,000
Investment advisory fees 711,166 - 1,900,187 -
Increase in cash value of bank-owned life insurance 213,072 222,833 658,037 414,180
Net realized gains from sales of securities
held for sale 1,975 (48,626) 244,981 146,981
Other income 334,959 545,651 1,042,483 1,189,935
----------- ----------- ------------ ------------
Total noninterest income 2,757,395 2,157,016 8,020,980 5,800,471
----------- ----------- ------------ ------------
NONINTEREST EXPENSE
Salaries and employee benefits 2,408,132 1,954,613 7,297,535 5,360,055
Occupancy expense 494,033 378,899 1,499,206 1,102,022
Data processing expense 338,189 283,133 1,027,348 775,307
Other expense 918,084 776,662 2,880,750 1,940,197
----------- ----------- ------------ ------------
Total noninterest expense 4,158,438 3,393,307 12,704,839 9,177,581
----------- ----------- ------------ ------------
Income before income taxes 7,292,467 7,021,234 20,715,817 19,839,621
Income taxes 2,485,641 2,457,389 7,093,924 6,974,350
----------- ----------- ------------ ------------
NET INCOME $ 4,806,826 $ 4,563,845 $ 13,621,893 $ 12,865,271
=========== =========== ============ ============
PERFORMANCE HIGHLIGHTS
Return on average equity 20.50% 20.48% 19.46% 19.63%
Return on average assets 1.79% 1.88% 1.78% 1.90%
Net interest margin 3.74% 3.86% 3.79% 3.81%
Efficiency ratio 34.38% 31.03% 36.49% 30.40%
--end--