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 $5.53, down slightly from $5.60 in the
preceding quarter. Western Liberty narrowed its first quarter loss
to $1.1 million, or $0.08 per share, in the first quarter of 2012,
compared to $2.4 million, or $0.17 per share, in the fourth quarter
of 2011. Net loss for the year ago quarter was $409,000, or $0.03
per share. All financial results are unaudited.
“Our loan portfolio is beginning to stabilize. No new properties
moved into classified status during the quarter, and we are
receiving solid interest from investors in some of our foreclosed
properties,” said William Martin, Chief Executive Officer. “During
December, we moved $4 million of foreclosed real estate into our
new holding company asset resolution subsidiary, Las Vegas Sunset
Properties (LVSP). Then during the first quarter of 2012, we moved
an additional $18 million in classified loans to LVSP. These
transfers improved the Bank’s ratio of classified assets to Tier 1
capital plus reserves to 29% at March 31, 2012, down from 84% at
year end. While on a consolidated basis our nonperforming assets
are still higher than we would like, at the Bank level we are much
closer to achieving asset quality levels mandated by our
regulators.”
“Our capital levels at both Service1st Bank and Western Liberty
Bancorp remain very strong. For Service1st Bank and Western Liberty
Bancorp, we ended the quarter with a Tier 1 Risk based-capital of
35.61% and 71.28%, respectively,” Martin continued. “And, as an
improving economy emerges in Las Vegas, we expect to be able to
deploy capital and liquidity into loans as demand improves.”
“While we earned a profit at the bank level of $62,000, expenses
at the holding company generated a loss of $1.1 million in the
first quarter of 2012, reflecting ongoing elevated expenses for
legal and professional fees, and a $117,000 impairment charge for
other real estate owned at LVSP,” said Martin. “We will continue to
monitor asset quality and maintain our reserves at the appropriate
level, as well as work diligently to keep expenses down.”
Financial Highlights (at or for the quarter ended March
31, 2012)
- No provision for potential loan losses
needed to be recorded in the first quarter.
- Service1st Bank has exceptionally
strong capital ratios with Total Capital/Total risk-weighted assets
of 36.88%.
- Western Liberty also has exceptionally
strong capital ratios with Total Capital/Total risk-weighted assets
of 72.29%.
- Tangible book value was $5.53 per
share, based on 13,466,535 shares outstanding.
- Total cash and cash equivalents held by
Western Liberty is $92.9 million, of which $22.6 million is at the
holding company level and $745,000 is at the holding company
subsidiary LVSP.
- Noninterest bearing deposits jumped by
$9.4 million and accounted for 48% of total deposits and core
deposits (excluding time certificates of $100,000 or more) are 60%
of total deposits.
- Total deposits increased $4.8 million
to $126.0 million from the preceding quarter.
Nevada Economic Update
Although new reports confirm that Las Vegas continues to lag in
the economic recovery, Marcus & Millichap, a national
commercial real estate brokerage and advisory firm, projected the
addition of 12,000 jobs locally this year and that office-using job
growth will push start a recovery in the Las Vegas office market
this year.
Further signs of recovery were reported by the Nevada State
Department of Taxation with its April 26 report on February tax
revenues. “Statewide taxable sales for February 2012 of $3.2
million represent a 10.2% increase over February 2011 and a 7.5%
increase for the fiscal year. The largest increases in statewide
taxable sales were realized by Food Services and Drinking Places,
up 11.9%; Motor Vehicle and Parts Dealers, up 22.9%; General
Merchandise Stores, up 16.9%; Merchant Wholesalers, Durable Goods,
up 18.0%; and Clothing and Clothing Accessories Stores, up
11.3%.”
According to the April 5, 2012, report from the University of
Nevada Las Vegas’ Center for Business and Economic Research,
“CBER’s Southern Nevada Index of Coincident Economic Indicators
showed significant gains for March 2012, rising by more than 2%
from the previous month. The index is constructed with two measures
of employment. One is collected from a survey of businesses and one
collected from a survey of households (the latter as part of the
U.S. Bureau of Labor Statistics Local Area Unemployment
Statistics). Although both measures included in the index rose, the
data from the household survey were the primary driver of the gain,
increasing by over 3% from February 2012. CBER’s Southern Nevada
Index of Leading Indicators also rose by 0.36% in March, continuing
on its trend of a slow recovery. The local, regional, and national
components all contributed to this growth and allow us to forecast
continued economic growth until late summer. CBER’s other three
indexes of current economic activity were mixed:
- CBER’s Clark County Business Activity
Index declined slightly in January, the result of the drop in
taxable sales after the holiday season.
- CBER’s Clark County Tourism Index grew
by 0.6% in January. Increased activity at McCarran airport and Las
Vegas hotels/casinos drove the growth.
- CBER’s Clark County Construction Index
rose in January, the result of a spike in residential and
commercial building permits.”
Additional reports on the Nevada economy can be found at
http://www.lasvegassun.com/news/2012/apr/03/new-reports-confirm-las-vegas-lagging-economic-rec/;
http://tax.state.nv.us/press_release.htm; and http://cber.unlv.edu.
Sources:
http://business.unlv.edu/wp-content/uploads/2011/03/CBER-05Apr2012.pdf
Balance Sheet Review
Total assets were up slightly to $202.0 million at March 31,
2012, from $198.3 million at December 31, 2011, and fell 12% from
$228.8 million a year ago.
Western Liberty increased its cash and cash equivalents by $3.5
million to $92.9 million, during the first quarter of 2012, while
the investment securities portfolio declined by $196,000 to $2.3
million. At March 31, 2012, the investment portfolio was comprised
of U.S. Government Agency securities, investment grade corporate
debt securities and collateralized mortgage obligations. “We
actively manage our investments for liquidity and interest rate
risk and are readily able to provide liquidity for the funding of
loans or deposit withdrawals,” said Martin.
Total loans were stable at $102.4 million at March 31, 2012,
compared to $101.9 million at December 31, 2011, and $102.2 million
at March 31, 2011. Commercial real estate loans accounted for 58%
of the total loan portfolio and commercial and industrial loans
comprised 30%. Construction and land development loans accounted
for 2% 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 32% of the commercial real estate loan portfolio is
owner occupied. 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 increased $4.8 million from the
preceding quarter to $126.0 million at March 31, 2012, with 48% in
noninterest bearing demand accounts. At December 31, 2011, total
deposits were $121.2 million, compared to $131.8 million at March
31, 2011. “Our core deposit base continues to consist entirely of
customers from our home-town, providing a stable and low cost
funding source for the Bank,” said Martin. Noninterest-bearing
deposits grew by $9.4 million during the first quarter, and
accounted for 48 of total deposits, while certificates of deposits
declined by $5.5 million. Interesting bearing deposits (NOWs, Money
Market and Savings) increased marginally by $854,000.
Total shares outstanding were 13.5 million at quarter end.
Shareholders’ equity was $75.1 million at the end of March compared
to $76.0 million at the end of December and $93.6 at the end of
March 2011. Tangible book value per share was $5.53 at quarter end
compared to $5.60 in the preceding quarter and $5.78 a year
ago.
Asset Quality
Nonperforming assets totaled $28.5 million, or 14.1% of total
assets at March 31, 2012, compared to $28.1 million, or 14.2% of
total assets at December 31, 2011, and $10.1 million, or 4.4% of
total assets at March 31, 2011. Loans measured for impairment,
which include nonperforming loans as well as loans that continue to
perform but have some identified weakness, improved to $28.0
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
$1.6 million in the first quarter of 2012, compared to $1.8 million
in the preceding quarter and $3.8 million in the first quarter of
2011. Discount accretion contributed $469,000 to first quarter
interest income compared to $507,000 in the preceding quarter and
$2.2 million in the year ago quarter.
Western Liberty did not need to record a provision for loan
losses compared to $1.3 million for the fourth quarter of 2011, and
$1.4 million in the first quarter of 2011. “We have rebuilt our
allowance for loan losses during the past five quarters which now
stands at $2.7 million, or 2.62% of gross loans,” said Ochal. The
allowance for loan losses totaled $1.3 million, or 1.26% of total
loans at March 31, 2011.
During the first quarter non-interest income increased to
$219,000 up from $117,000 in the preceding quarter and $121,000 in
the year ago quarter. This revenue is primarily attributable to
$58,000 in OREO income from the operations of an OREO property in
Southern Nevada.
Noninterest expense for the first quarter of 2012 remained flat
at $2.9 million when compared to $2.9 million a year ago. In spite
of this, noninterest expense included a $51,000 increase in
salaries and employee benefits expense as well as a $9,000 increase
in advertising and business development from the year ago quarter.
However, legal and professional fees decreased $186,000, but
continue to be elevated. In addition, there was a property
impairment charge of $117,000 in the first quarter of 2012.
Management will continue to monitor and control expenses.
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
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.
Consolidated
Balance Sheet(Dollars in thousands, except per share
data)(Unaudited)
March 31,2012 December 31,2011 March 31,2011 Assets: Cash
and due from banks $ 8,525 $ 11,227 $ 8,749 Money market funds 100
100 52,206 Interest-bearing deposits in banks 84,277
78,026 29,488 Cash and cash equivalents
92,902 89,353 90,443 Certificates of deposits - - 16,784
Securities, available for sale 300 472 1,345 Securities, held to
maturity 2,007 2,031 3,737 Loans: Construction, land development
and other land 2,101 3,417 4,619 Commercial real estate 58,860
58,252 53,416 Residential real estate 10,101 4,704 3,980 Commercial
and industrial 31,262 35,417 40,041 Consumer 18 30 131 Plus: net
deferred loan costs 31 41 20
Total loans 102,373 101,861 102,207 Less: allowance for loan
losses (2,687 ) (2,919 ) (1,290 ) Net loans
99,686 98,942 100,917 Premises and equipment, net 742 818 1,120
Other real estate owned, net 3,891 4,008 5,444 Goodwill, net - -
5,633 Other intangibles, net 647 670 744 Accrued interest
receivable and other assets 1,815 1,996
2,624 Total assets $ 201,990 $ 198,290
$ 228,791 Liabilities: Demand deposits, noninterest
bearing $ 59,891 $ 50,488 $ 51,847 NOW and money market 38,002
37,306 39,721 Savings deposits 892 735 1,031 Time deposits $100,000
or more 4,631 26,479 33,335 Other time deposits 22,559
6,218 5,879 Total deposits
125,975 121,226 131,813 Contingent consideration - - 1,816 Accrued
interest and other liabilities 925 1,023
1,604 Total liabilities 126,900 122,249
135,233 Shareholders' Equity: Common stock 1 1 1 Additional
paid-in capital 117,960 117,846 117,458 Accumulated deficit (38,778
) (37,717 ) (23,898 ) Treasury stock (4,094 ) (4,094 ) -
Accumulated other comprehensive gain/(loss), net 1
5 (3 )
Total stockholders’ equity
75,090 76,041 93,558
Total liabilities and stockholders’ equity $ 201,990 $
198,290 $ 228,791
Consolidated
Income Statement(Dollars in thousands, except per share
data)(Unaudited)
Three Months Ended Three Months Ended
March 31,2012
December 31,2011 March 31,2011 Interest Income:
Interest and fees on loans $ 1,643 $ 1,866 $ 3,782 Interest on
securities, taxable and other 62 66
66 Total interest and dividend income 1,705
1,932 3,848 Interest Expense: Interest expense on deposits
115 122 112 Net interest
income 1,590 1,810 3,736 Provision for loan losses 0
1,287 1,364 Net interest income
(loss) after provision for loan losses 1,590 523 2,372 Other
Operating Income: Service charges 70 69 78 Contingent consideration
recovery - 0 - Other 149 48
43 Total other operating income 219 117 121
Other Operating Expense: Salaries and employee benefits 844 861 793
Occupancy, equipment and depreciation 332 377 374 Computer service
charges 78 72 77 Federal deposit insurance 134 132 152 Legal and
professional fees 750 837 936 Advertising and business development
29 12 20 Insurance 72 73 71 Telephone 18 19 26 Printing and
supplies 27 24 142 Director fees 56 76 49 Stock-based compensation
114 119 141 Provision for unfunded commitments 0 31 (133 ) Oreo
property impairment 117 111 - Goodwill impairment - 0 - Other
299 252 254 Total
other operating expense 2,870 2,996
2,902 Net loss $ (1,061 ) $ (2,356 ) $
(409 ) Basic EPS $ (0.08 ) $ (0.17 ) $ (0.03 ) Diluted EPS $
(0.08 ) $ (0.17 ) $ (0.03 ) Average basic shares 13,466,535
14,278,467 15,088,023 Average diluted shares 13,466,535 14,278,467
15,088,023
Selected
Consolidated Financial Highlights(Dollars in thousands,
except per share data)(Unaudited)
March 31,2012
December 31,2011
March 31,2011
Per Share data: Book Value $ 5.58 $ 5.65 $ 6.21 Tangible
Book Value $ 5.53 $ 5.60 $ 5.78
Selected Balance Sheet
Data: Total Assets $ 201,990 $ 198,290 $ 228,791 Cash and cash
equivalents 92,902 89,353 90,443 Gross loans, including net
deferred loan costs 102,373 101,861 102,207 Allowance for loan
losses 2,687 2,919 1,290 Deposits 125,975 121,226 131,813
Stockholders' equity 75,090 76,041 93,558
Asset
Quality: Nonperforming loans $ 24,598 $ 24,054 $ 4,665 Other
Real Estate Owned 3,891 4,008
5,444 Nonperforming assets $ 28,489 $ 28,062 $ 10,109
Allowance for loan losses as a percentage
of nonperforming loans
10.92 % 12.14 % 27.65 %
Allowance for loan losses as a percentage
of portfolio loans
2.62 % 2.87 % 1.26 %
Nonperforming loans as a percentage of
total portfolio loans
24.03 % 23.61 % 4.56 % Nonperforming assets as a percentage of
total assets 14.10 % 14.15 % 4.42 % Net charge-offs to average
portfolio loans 0.22 % 5.66 % 0.11 %
Capital Ratios:
Tier 1 equity to average assets 37.08 % 34.77 % 33.00 % Tier 1
Risk-Based Capital ratio 71.28 % 70.36 % 70.60 % Total Risk-Based
Capital ratio 72.29 % 71.58 % 71.70 %
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