Western Liberty Bancorp, Inc. (NASDAQ:WLBC), the holding
company for Service1st Bank of Nevada (Service1st Bank) and Las
Vegas Sunset Properties (LVSP), today reported its tangible book
value per share was $5.43, down slightly from $5.53 in the
preceding quarter. Western Liberty reported second quarter loss of
$1.5 million, or $0.11 per share, compared to $1.1 million, or
$0.08 per share, in the first quarter of 2012, and $4.6 million, or
$0.30 per share in the second quarter of 2011. For the six month
period ended June 30, 2012, net losses narrowed to $2.5 million, or
$0.19 per share, compared to $5.0 million, or $0.33 per share in
the first half of 2011. All financial results are unaudited.
“Our loan portfolio continues to stabilize with nonperforming
loans down $3.5 million from year end,” said William Martin, Chief
Executive Officer. “While we still have a lot of work to do, we
believe the steps we are taking will help us achieve our operating
goals. Fortunately, capital remains exceptionally strong.”
Financial Highlights (at or for the six months ended June
30, 2012)
- Service1st Bank has exceptionally
strong capital ratios with Total Capital/Total risk-weighted assets
of 35.98%.
- Western Liberty also has exceptionally
strong capital ratios with Total Capital/Total risk-weighted assets
of 69.04%.
- Tangible book value was $5.43 per
share, based on 13,466,536 shares outstanding.
- Total cash and cash equivalents held by
Western Liberty is $85.1 million, of which $17.7 million is at the
holding company level and $2.3 million is at the holding company
subsidiary Las Vegas Sunset Properties, (LVSP).
- Noninterest bearing deposits increased
by $9.3 million and accounted for 48% of total deposits and core
deposits (excluding time certificates of $100,000 or more) were 85%
of total deposits.
Nevada Economic Update
According to the July 31, 2012 report from the University of
Nevada Las Vegas’ Center for Business and Economic Research (CBER),
“CBER’s Southern Nevada Coincident Index grew by 0.61% in May, the
strongest showing since before the financial crisis in 2008.
Nonfarm employment grew by 0.45% and household employment increased
by 0.77%.
“Compared to the previous six months, CBER’s Southern Nevada
Leading Index slowed down, increasing by only 0.17% for May 2012.
This is about 0.08 percentage points below the average for early
2012 and late 2011. Our neighboring states fared well; Arizona’s
component increased by 0.17% and California’s by 0.29%.
"Decreased activity at McCarran airport and lower stock prices
weren’t enough to offset these gains. Changes in CBER’s three other
indexes for Southern Nevada were as follows:
- CBER’s Clark County Business Activity
Index rose for the second straight month, and is faring better than
in May 2011.
- CBER’s Clark County Tourism Index
remained relatively flat, after lackluster months for gaming
revenue and McCarran airport.
- CBER’s Clark County Construction Index
grew, influenced by both residential and commercial building
permits.”
Sources: http://cber.unlv.edu/commentary/CBER-31July2012.pdf
Balance Sheet Review
Total assets were $198.7 million at June 30, 2012, compared to
$202.0 million at March 31, 2012, and $223.3 million at June 30,
2011.
Western Liberty has cash and cash equivalents of $85.1 million,
which accounts for 43% of total assets. In addition, the investment
portfolio was $713,000 at the end of June 2012, and is comprised of
certificates of deposits, U.S. Government Agency securities and
collateralized mortgage obligations.
Total loans increased to $104.8 million at June 30, 2012,
compared to $102.4 million at March 31, 2012, and $101.5 million at
June 30, 2011. Commercial real estate loans accounted for 56% of
the total loan portfolio, commercial and industrial loans comprised
31%, construction and land development loans accounted for 3% and
residential real estate loans were 10% of total loans at quarter
end. Of the total loan portfolio, 69% is secured by real estate and
34% of the commercial real estate loan portfolio is owner-occupied.
Approximately half of the loan portfolio is adjustable rate loans,
with most of these loans indexed to the national prime rate with
interest rate floors above the current prime rate index.
Western Liberty’s total deposits were $124.3 million at June 30,
2012, with 48% in noninterest bearing demand accounts. At March 31,
2012, total deposits were $126.0 million and$131.6 million at June
30, 2011. “Our deposit mix continues to improve with core deposit
balances making up 85% of our funding base,” said Martin.
Total shares outstanding were approximately 13.5 million at June
30, 2012. Shareholders’ equity was $73.7 million at June 30, 2012,
compared to $76.0 million at December 31, 2011, and $89.1 at June
30, 2011. Tangible book value per share was $5.43 at June 30, 2012
compared to $5.53 at March 31, 2012 and $5.48 at June 30, 2011.
Asset Quality
Nonperforming assets totaled $26.5 million, or 13% of total
assets at June 30, 2012, compared to $28.5 million, or 14% of total
assets at March 31, 2012, and $14.1 million, or 6% of total assets
at June 30, 2011. Loans measured for impairment, which include
nonperforming loans as well as loans that continue to perform but
have some identified weakness, decreased to $28.5 million, down
from $29.3 million at December 31, 2011. The majority of loans
measured for impairment were in the commercial real estate
portfolio.
Review of Operations
Net interest income, before the provision for loan losses, was
$1.2 million in the second quarter of 2012, compared to $1.6
million in the preceding quarter and $2.0 million in the second
quarter of 2011. Discount accretion contributed $153,000 to second
quarter interest income compared to $469,000 in the preceding
quarter and $27,000 in the year ago quarter. In the first six
months of 2012, net interest income before the provision for loan
losses was $2.8 million, including $622,000 in discount accretion,
compared to $5.7 million, including $1.7 million in discount
accretion, in the first six months of 2011.
The provision for loan losses totaled $319,000 in the second
quarter compared to zero for the first quarter of 2012, and $4.3
million in the second quarter of 2011. “While asset quality has
stabilized, we are continuing to add to our provisions based on the
growth and performance of the loan portfolio,” said Pat Ochal,
Chief Financial Officer. The allowance for loan losses totaled $2.6
million, or 2.52% of total loans at June 30, 2012.
During the second quarter non-interest income contributed
$120,000 to revenue compared to $219,000 in the preceding quarter
and $192,000 in the year ago quarter. In the first six months of
2012, non-interest income was $339,000 compared to $313,000 in the
first six months of 2011.
Noninterest expense for the second quarter of 2012 was $2.5
million, down from $2.9 million in the first quarter and $2.4
million in the year ago quarter. Year to date, noninterest expense
was $5.4 million compared to $5.3 million in the first six months
of 2011.
About Western Liberty Bancorp
Western Liberty Bancorp is a Nevada bank holding company which
conducts operations through Service1st Bank of Nevada, its wholly
owned banking subsidiary, and its newly created wholly owned
subsidiary Las Vegas Sunset Properties. Service1st Bank operates as
a traditional community bank and provides a full range of deposit,
lending and other banking services to locally owned businesses,
professional firms, individuals and other customers from its
headquarters and two retail banking facilities located in the
greater Las Vegas area. Services provided include basic commercial
and consumer depository services, commercial working capital and
equipment loans, commercial real estate loans, and other
traditional commercial banking services. Primarily all of the
bank’s business is generated in the Nevada market.
www.wlbancorp.com
Consolidated
Balance Sheet
(Dollars in thousands, except per share data)
(Unaudited) June 30, March 31, June 30, 2012 2012 2011
Assets: Cash and due from banks $ 8,799 $ 8,525 $ 7,163 Money
market funds 100 100 51,308 Interest-bearing deposits in banks
76,193 84,277 44,955 Cash
and cash equivalents 85,092 92,902 103,426 Certificates of
deposits 1,988 - 4,195 Securities, available for sale 250 300 824
Securities, held to maturity 463 2,007 3,692 Loans: Construction,
land development and other land 2,742 2,101 4,107 Commercial real
estate 58,960 58,860 54,306 Residential real estate 10,488 10,101
4,704 Commercial and industrial 32,585 31,262 38,279 Consumer 16 18
102 Plus: net deferred loan costs 46 31
35 Total loans 104,837 102,373 101,533 Less:
allowance for loan losses (2,645 ) (2,687 )
(4,404 ) Net loans 102,192 99,686 97,129 Premises and equipment,
net 584 742 1,013 Other real estate owned, net 5,820 3,891 4,440
Goodwill, net - - 5,633 Other intangibles, net 624 647 719 Accrued
interest receivable and other assets 1,699
1,815 2,272 Total assets $ 198,712 $
201,990 $ 223,343 Liabilities: Demand
deposits, noninterest bearing $ 59,801 $ 59,891 $ 54,576 NOW and
money market 40,767 38,002 34,056 Savings deposits 1,397 892 925
Time deposits $100,000 or more 19,211 22,559 35,059 Other time
deposits 3,074 4,631 6,969
Total deposits 124,250 125,975 131,585 Contingent
consideration - - 1,816 Accrued interest and other liabilities
750 925 843 Total
liabilities 125,000 126,900 134,244 Shareholders' Equity:
Common stock 1 1 1 Additional paid-in capital 118,068 117,960
117,597 Accumulated deficit (40,263 ) (38,778 ) (28,494 ) Treasury
stock (4,094 ) (4,094 ) - Accumulated other comprehensive
gain/(loss), net - 1 (5 )
Total shareholders' equity
73,712 75,090 89,099
Total liabilities and stockholders’ equity $ 198,712 $
201,990 $ 223,343
Consolidated
Income Statement
2Q 2012 1Q 2012 2Q 2011 (Dollars
in thousands, except per share data) Three Months Ended Three
Months Ended Three Months Ended Six Months Ended Six Months
Ended (Unaudited) June 30, March 31, June 30, June 30, June 30,
2012 2012 2011 2012 2011 Interest Income: Interest and fees on
loans $ 1,285 $ 1,643 $ 2,018 $ 2,928 $ 5,800 Interest on
securities, taxable and other 60 62
68 122 134 Total interest
and dividend income 1,345 1,705 2,086 3,050 5,934 Interest Expense:
Interest expense on deposits 100 115
127 215 239 Net interest
income 1,245 1,590 1,959 2,835 5,695 Provision for loan losses
319 0 4,348 319
5,712 Net interest income (loss) after
provision for loan losses 926 1,590 (2,389 ) 2,516 (17 )
Other Operating Income: Service charges 69 70 78 139 156 Contingent
consideration recovery - - - - - Other 51 149
114 200 157 Total
other operating income 120 219 192 339 313 Other Operating
Expense: Salaries and employee benefits 789 844 765 1,633 1,558
Occupancy, equipment and depreciation 431 332 374 763 748 Computer
service charges 77 78 74 155 151 Federal deposit insurance 136 134
129 270 281 Legal and professional fees 402 750 520 1,152 1,455
Advertising and business development 16 29 48 45 68 Insurance 74 72
67 146 138 Telephone 17 18 17 35 43 Printing and supplies 50 27 87
77 229 Director fees 57 56 49 113 98 Stock-based compensation 108
114 138 222 280 Provision for unfunded commitments 3 - (203 ) 3
(336 ) Oreo property impairment 83 117 - 200 - Goodwill impairment
- - - - - Other 288 299 334
587 588 Total other operating
expense 2,531 2,870 2,399
5,401 5,301 Net loss $ (1,485 ) $
(1,061 ) $ (4,596 ) $ (2,546 ) $ (5,005 ) Basic EPS $ (0.11
) $ (0.08 ) $ (0.30 ) $ (0.19 ) $ (0.33 ) Diluted EPS $ (0.11 ) $
(0.08 ) $ (0.30 ) $ (0.19 ) $ (0.33 ) Average basic shares
13,466,536 13,466,536 15,088,024 13,466,536 15,088,024 Average
diluted shares 13,466,536 13,466,536 15,088,024 13,466,536
15,088,024
Selected
Consolidated Financial Highlights
(Dollars in thousands, except per share data)
June
30, March 31, June 30, (Unaudited)
2012 2012 2011 Per Share data: Book
Value $ 5.47 $ 5.58 $ 5.91 Tangible Book Value $ 5.43 $ 5.53 $ 5.48
Selected Balance Sheet Data: Total Assets $ 198,712 $
201,990 $ 223,343 Cash and cash equivalents 85,092 92,902 103,426
Gross loans, including net deferred loan costs 104,837 102,373
101,533 Allowance for loan losses 2,645 2,687 4,404 Deposits
124,250 125,975 131,585 Stockholders' equity 73,712 75,090 89,099
Asset Quality: Nonperforming loans $ 20,673 $ 24,598
$ 9,650 Other Real Estate Owned 5,862 3,891
4,440 Nonperforming assets $ 26,535 $ 28,489 $
14,090
Allowance for loan losses as a percentage
of nonperforming loans
12.79 % 10.92 % 45.64 %
Allowance for loan losses as a percentage
of portfolio loans
2.52 % 2.62 % 4.34 %
Nonperforming loans as a percentage of
total portfolio loans
19.72 % 24.03 % 9.50 % Nonperforming assets as a percentage of
total assets 13.35 % 14.10 % 6.31 % Net charge-offs to average
portfolio loans 0.22 % 0.22 % 1.33 %
Capital Ratios:
Tier 1 equity to average assets 36.56 % 37.08 % 31.40 % Tier 1
Risk-Based Capital ratio 68.06 % 71.28 % 70.10 % Total Risk-Based
Capital ratio 69.04 % 72.29 % 71.30 %
FORWARD LOOKING STATEMENTS
This release may contain “forward-looking statements” that are
subject to risks and uncertainties. Readers should not place undue
reliance on forward-looking statements, which reflect management’s
views only as of the date hereof. All statements, other than
statements of historical fact, regarding our financial position,
business strategy and management’s plans and objectives for future
operations are forward-looking statements. When used in this
report, the words “anticipate,” “believe,” “estimate,” “expect,”
and “intend” and words or phrases of similar meaning, as they
relate to Western Liberty or management, are intended to help
identify forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Although we
believe that management’s expectations as reflected in
forward-looking statements are reasonable, we cannot assure readers
that those expectations will prove to be correct. Forward-looking
statements are subject to various risks and uncertainties that may
cause our actual results to differ materially and adversely from
our expectations as indicated in the forward-looking statements.
These risks and uncertainties include our ability to maintain or
expand our market share or net interest margins, and to implement
our marketing and growth strategies. Further, actual results may be
affected by our ability to compete on price and other factors with
other financial institutions; customer acceptance of new products
and services; the regulatory environment in which we operate; and
general trends in the local, regional and national banking industry
and economy, as those factors relate to our cost of funds and
return on assets. In addition, there are risks inherent in the
banking industry relating to collectability of loans and changes in
interest rates. Many of these risks, as well as other risks that
may have a material adverse impact on our operations and business,
are identified in our other filings with the SEC. However, you
should be aware that these factors are not an exhaustive list, and
you should not assume these are the only factors that may cause our
actual results to differ from our expectations.
Western Liberty Bancorp (MM) (NASDAQ:WLBC)
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