Balance Sheet Review
Western Liberty's total assets were $257.5 million at December 31, 2010, which reflects completion of the acquisition of Service1st Bank of Nevada on October 28, 2010. Prior to this acquisition, Western Liberty had no operating arm.
Commercial real estate loans accounted for 52% of the loan portfolio and commercial loans comprised 34% of the loan portfolio at December 31, 2010. Construction and land development loans accounted for 6% of the loan portfolio and residential real estate loans were 9% of total loans at December 31, 2010. Of the total loan portfolio, 66% is secured by real estate and 38% of the real estate loan portfolio is owner occupied. The loan portfolio includes fair value adjustments as of October 28, 2010, as a result of the acquisition. The majority, or 56%, of the loan portfolio is adjustable rate loans, with most of these loans indexed to the national prime rate. In addition, most of these loans have interest rate minimums which are above the current prime rate index.
Total deposits were $160.3 million at December 31, 2010, with 42% of the total in non-interest bearing demand accounts. "We continue to have a solid core deposit base with virtually no brokered funding," said Martin. Since year end, a $23.5 million interest bearing demand account was reduced, and transaction accounts dropped from 78% of total deposits at year end to 74% of total deposits following the transfer.Total shares outstanding were 15.1 million at year end and there are 200,000 restricted stock units convertible into common shares on a one-for-one basis. Asset Quality Nonperforming assets totaled $13.8 million, or 5.37% of total assets at December 31, 2010. "Due to the accounting requirements, the loan loss allowance established by Service1st prior to the merger did not transfer to Western Liberty and any future provisions for loan losses will be based on the performance of the loan portfolio after the mark-to-market adjustments and for new loans recorded. Consequently our provision for loan losses was $36,000 which equals our total allowance for loan losses at year end," said Rosenbaum.