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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 increased to $5.60 from $5.54 in the prior quarter. Western Liberty also reported it lost $14.2 million, or $0.96 per share, in 2011, following an $8.7 million provision for loan losses for the year and a third quarter non-cash charge of $5.6 million for goodwill impairment which was partially offset by the $1.8 million reduction in the fair value of the contingent consideration liability related to the Service1st acquisition. All financial results for 2011 are unaudited.
For the fourth quarter of 2011, the net loss totaled $2.4 million, or $0.17 per share, which includes a $1.3 million provision for loan losses. Before the acquisition of Service1st Bank on October 28, 2010, Western Liberty had no operating entity. Consequently the comparisons for the year ago periods, reflect only two months of operations of Service1st Bank.
“To expedite the resolution of nonperforming assets, we formed a new wholly-owned subsidiary, Las Vegas Sunset Properties (LVSP), and transferred $4.0 million in foreclosed properties into LVSP from Service1st Bank in the fourth quarter of 2011,” said William Martin, Chief Executive Officer. “In January, we also moved $11.5 million in nonperforming loans (NPLs) to LVSP. Following the January transfer of NPLs, the Bank’s ratio of classified assets to Tier 1 capital plus reserves improved to 48.4%.
“With our extremely strong capital levels, we repurchased 934,987 shares during the fourth quarter at an average cost of $2.34 per share, bringing total shares repurchased during the second half of the year to 1.6 million at an average cost of $2.59 per share,” Martin continued.
“While the national and local economic indicators are starting to improve, we are continuing to see asset quality decline, although at a slower pace than in past quarters,” said Patricia Ochal, Chief Financial Officer. Nonaccrual loans increased to $24.1 million, of which $15.9 million are loans that have been modified or restructured. During the year, these troubled debt restructured (TDR) loans were written down to $14.6 million from $20.0 million, and $1.9 million of the TDR’s are paying on time. “As a result of the decline in asset quality, we are increasing our allowance for loan losses, which was eliminated last year under fair value accounting standards during the merger. Consequently, the allowance for loans losses is now 2.85% of total portfolio loans.”