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.
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.”
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 OperationsNet 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 $117,000 in the first quarter of 2012. Management will continue to monitor and control expenses. About Western Liberty Bancorp Western Liberty Bancorp is a Nevada bank holding company which conducts operations through Service1st Bank of Nevada, its wholly owned banking subsidiary, and its newly created wholly-owned subsidiary Las Vegas Sunset Properties. Service1st Bank operates as a traditional community bank and provides a full range of deposit, lending and other banking services to locally owned businesses, professional firms, individuals and other customers from its headquarters and two retail banking facilities located in the greater Las Vegas area. Services provided include basic commercial and consumer depository services, commercial working capital and equipment loans, commercial real estate loans, and other traditional commercial banking services. Primarily all of the bank’s business is generated in the Nevada market.
|Consolidated Balance Sheet (Dollars in thousands, except per share data) (Unaudited)|
|March 31,2012||December 31,2011||March 31,2011|
|Cash and due from banks||$||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|
|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|
|Plus: net deferred loan costs||31||41||20|
|Less: allowance for loan losses||(2,687||)||(2,919||)||(1,290||)|
|Premises and equipment, net||742||818||1,120|
|Other real estate owned, net||3,891||4,008||5,444|
|Other intangibles, net||647||670||744|
|Accrued interest receivable and other assets||1,815||1,996||2,624|
|Demand deposits, noninterest bearing||$||59,891||$||50,488||$||51,847|
|NOW and money market||38,002||37,306||39,721|
|Time deposits $100,000 or more||4,631||26,479||33,335|
|Other time deposits||22,559||6,218||5,879|
|Accrued interest and other liabilities||925||1,023||1,604|
|Additional paid-in capital||117,960||117,846||117,458|
|Accumulated other comprehensive gain/(loss), net||1||5||(3||)|
|Total stockholders’ equity||75,090||76,041||93,558|
|Total liabilities and stockholders’ equity||$||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 and fees on loans||$||1,643||$||1,866||$||3,782|
|Interest on securities, taxable and other||62||66||66|
|Total interest and dividend income||1,705||1,932||3,848|
|Interest expense on deposits||115||122||112|
|Net interest income||1,590||1,810||3,736|
|Provision for loan losses||0||1,287||1,364|
|Net interest income (loss) after provision for loan losses||1,590||523||2,372|
|Other Operating Income:|
|Contingent consideration recovery||-||0||-|
|Total other operating income||219||117||121|
|Other Operating Expense:|
|Salaries and employee benefits||844||861||793|
|Occupancy, equipment and depreciation||332||377||374|
|Computer service charges||78||72||77|
|Federal deposit insurance||134||132||152|
|Legal and professional fees||750||837||936|
|Advertising and business development||29||12||20|
|Printing and supplies||27||24||142|
|Provision for unfunded commitments||0||31||(133||)|
|Oreo property impairment||117||111||-|
|Total other operating expense||2,870||2,996||2,902|
|Average basic shares||13,466,535||14,278,467||15,088,023|
|Average diluted shares||13,466,535||14,278,467||15,088,023|
|Selected Consolidated Financial Highlights (Dollars in thousands, except per share data) (Unaudited)|
|March 31, 2012||December 31, 2011||March 31, 2011|
|Per Share data:|
|Tangible Book Value||$||5.53||$||5.60||$||5.78|
|Selected Balance Sheet Data:|
|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|
|Other Real Estate Owned||3,891||4,008||5,444|
|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||%|
|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||%|