EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

AWBC – Q1 2005 Earnings

April 25, 2005

Page 1 of 8

 

AMERICANWEST BANCORPORATION

 

CONTACT:    Robert M. Daugherty    President and CEO
     C. Tim Cassels    Chief Financial Officer
          (509) 467-6993

 

NEWS RELEASE

 

AMERICANWEST BANCORPORATION ANNOUNCES 2005 FIRST QUARTER RESULTS

 

Spokane, Washington – April 25, 2005 – AmericanWest Bancorporation (Nasdaq:AWBC) today announced that net income for the first quarter of 2005 was $3.1 million, or $0.30 per diluted share compared to $3.5 million or $0.34 per diluted share for the first quarter of 2004.

 

“The first quarter represents a return to core operations for the company,” said Robert M. Daugherty, President and Chief Executive Officer. “On a pretax basis, our performance was on par with the first quarter of 2004. We are striving to improve our performance as we return to our community banking foundation.”

 

LOAN GROWTH AND CREDIT QUALITY:

 

Consistent with the Company’s expectations, gross loans at March 31, 2005 were $907.5 million, a decrease of 2.2% compared to $927.9 million at December 31, 2004.

 

“We expect to have flat loan growth during the first half of 2005 as we refocus our credit culture in combination with our normal seasonality,” said Mr. Daugherty.

 

The decrease in loans primarily relates to decreases in commercial real estate loans, agricultural loans, real estate construction and installment loans. These decreases were offset by increases in commercial and industrial loans and bankcards and other loans. Commercial real estate loans, commercial and industrial loans, and agricultural loans comprised 88.5% of the gross loan portfolio at March 31, 2005, and 88.1% of the gross loan portfolio at December 31, 2004.

 

Total nonperforming loans were $31.4 million or 3.5% of total gross loans at March 31, 2005, compared to $24.3 million or 2.6% of total gross loans at December 31, 2004. The Company’s total nonperforming assets, including foreclosed real estate and other foreclosed assets, were $33.3 million or 3.3% of total assets at March 31, 2005 compared to $28.5 million or 2.7% of total assets at December 31, 2004. The increase was primarily due to the placing of one commercial real estate loan in the amount of $4.8 million in nonperforming assets during the first quarter of 2005. Foreclosed real estate and other foreclosed assets decreased more than $2.2 million at March 31, 2005 compared to December 31, 2004 due to the sale of property.


AWBC – Q1 2005 Earnings

April 25, 2005

Page 2 of 8

 

“Improving the credit quality of our portfolio remains our primary focus,” said Mr. Daugherty. “We are aggressively addressing any credit deterioration and have enhanced our credit process for all new loans. We are excited about the progress we are making addressing our credit issues. In addition to our reduction in foreclosed real estate and other foreclosed assets of more than $2.2 million in the first quarter, we entered into contracts that will reduce our nonperforming assets by an additional $7.5 million subsequent to quarter end without any additional provisions.”

 

Allowance for loan losses was $16.9 million for March 31, 2005, compared to $18.5 million at December 31, 2004. The allowance constituted 1.86% and 1.99% of total gross loans at March 31, 2005 and December 31, 2004, respectively. Provision for loan losses for the three months ended March 31, 2005 was $1.1 million compared to $1.0 million for the three months ended March 31, 2004.

 

DEPOSIT GROWTH:

 

At March 31, 2005, deposits were $856.8 million, down 4.2% from $894.8 million at December 31, 2004. The decrease from December 31, 2004 is due mainly to a decrease in interest bearing deposits offset by an increase in demand deposits. The cost of deposits increased to 1.94% for the quarter ended March 31, 2005, as compared to 1.74% for the quarter ended March 31, 2004, due to higher interest rates and the change in deposit mix.

 

“We initiated a deposit campaign in March, the first in a long time for the Company, that we expect to increase our transaction accounts in the remainder of 2005,” said Mr. Daugherty. “Retail banking will be an emphasis for us in 2005 and the years to follow.”

 

NET INTEREST MARGIN:

 

Net interest margin decreased to 5.87% for the first quarter of 2005, compared to 6.20% for the first quarter of 2004 on a tax effected basis for nontaxable assets. This decrease was due to a decrease in loan yields and an increase in deposit costs which were partially offset by a reduction in borrowing costs.

 

Net interest income decreased 2.6% to $13.7 million for the three months ended March 31, 2005, as compared to $14.1 million for the three months ended March 31, 2004. This decrease was due to an increase in interest expense on deposits and borrowings and a decrease in interest income from securities which were partially offset by the interest income received on loans.

 

NONINTEREST INCOME AND EXPENSE:

 

Noninterest income was $1.6 million for the three months ended March 31, 2005, an increase from $1.5 million for the three months ended March 31, 2004. This slight increase is due mainly to increases in the cash surrender value of bank owned life insurance.

 

Noninterest expense decreased to $9.5 million for the three months ended March 31, 2005 from $10.0 million for the three months ended March 31, 2004. The decrease in noninterest expense was primarily due to decreases in foreclosed real estate and other foreclosed assets expenses which were partially offset by occupancy and equipment expenses. The occupancy expenses increases are due mainly to escalation clauses in existing lease agreements and a leased building in downtown Spokane for the corporate headquarters.


AWBC – Q1 2005 Earnings

April 25, 2005

Page 3 of 8

 

INCOME TAXES:

 

Income tax expense for the quarter ended March 31, 2005 increased as a percentage of income before the provision for income taxes to 33.3% from 24.3% for the quarter ended March 31, 2004. The increase in the effective tax rate is due to the effect of rehabilitation tax credits recognized during 2004 which decreased the tax expense for the period.

 

AmericanWest Bancorporation is a community bank holding company with 42 locations in Eastern and Central Washington and Northern Idaho. For further information on the Company or to access Internet banking, please visit our web site at www.awbank.net.

 

FORWARD LOOKING STATEMENTS:

 

This press release contains certain forward-looking statements within the Private Securities Litigation Reform Act of 1995 (PSLRA), including statements about the financial condition, results of operations, credit performance, and reduction of nonperforming loans of the Company. Such forward looking statements include the expectation that the Company will have flat loan growth during the first half of 2005 and that transaction accounts will increase during the remainder of 2005. The forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Those factors include, but are not limited to, impact of the current national and regional economy on small business loan demand in the Company’s market, loan delinquency rates, changes in portfolio composition, the bank’s ability to attract quality commercial business, interest rate movements and the impact on margins such movement may cause, changes in the demographic make-up of the Company’s market, fluctuation in demand for the Company’s products and services, the Company’s ability to attract and retain qualified people, regulatory changes, competition with other banks and financial institutions, and other factors. For a discussion of factors that could cause actual results to differ, please see the Company’s reports on Forms 10-K and 10-Q as filed with the Securities and Exchange Commission. Words such as “targets,” “expects,” “anticipates,” “believes,” other similar expressions or future or conditional verbs such as “will,” “may,” “should,” “would,” and “could” are intended to identify such forward-looking statements. Readers should not place undue reliance on the forward-looking statements, which reflect management’s view only as of the date hereto. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. This statement is included for the express purpose of protecting the Company under PSLRA’s safe harbor provisions.


AWBC – Q1 2005 Earnings

April 25, 2005

Page 4 of 8

 

AmericanWest Bancorporation

Selected Consolidated Financial Highlights

($ in thousands, except per share data and ratios; unaudited)

 

     Three Months Ended

            
     3/31/2005

   3/31/2004

   $ Change

    % Change

 

Statement of Income Data

                            

Interest Income

                            

Interest and fees on loans

   $ 16,983    $ 16,816    $ 167     1.0 %

Interest on securities

     343      458    $ (115 )   -25.1 %

Other interest income

     10      32    $ (22 )   -68.8 %
    

  

              

Total Interest Income

     17,336      17,306    $ 30     0.2 %
    

  

              

Interest Expense

                            

Interest on deposits

     3,027      2,901    $ 126     4.3 %

Interest on borrowings

     568      297    $ 271     91.2 %
    

  

              

Total Interest Expense

     3,595      3,198    $ 397     12.4 %
    

  

              

Net Interest Income

     13,741      14,108    $ (367 )   -2.6 %

Provision for loan losses

     1,075      1,000    $ 75     7.5 %
    

  

              

Net Interest Income After Provision for Loan Losses

     12,666      13,108    $ (442 )   -3.4 %
    

  

              

Noninterest Income

                            

Fees and service charges

     1,123      1,133    $ (10 )   -0.9 %

Other

     442      406    $ 36     8.9 %
    

  

              

Total Noninterest Income

     1,565      1,539    $ 26     1.7 %
    

  

              

Noninterst Expense

                            

Salaries and employee benefits

     5,549      5,591    $ (42 )   -0.8 %

Occupancy expense, net

     1,045      755    $ 290     38.4 %

Equipment expense

     804      679    $ 125     18.4 %

State business and occupation tax

     223      208    $ 15     7.2 %

Foreclosed real estate and other foreclosed assets expense

     66      819    $ (753 )   -91.9 %

Other

     1,839      1,920    $ (81 )   -4.2 %
    

  

              

Total Noninterest Expense

     9,526      9,972    $ (446 )   -4.5 %
    

  

              

Income Before Provision for Income Tax

     4,705      4,675    $ 30     0.6 %

Provision for Income Tax

     1,566      1,138    $ 428     37.6 %
    

  

              

Net Income

   $ 3,139    $ 3,537    $ (398 )   -11.3 %
    

  

              

 

-more-


AWBC – Q1 2005 Earnings

April 25, 2005

Page 5 of 8

 

AmericanWest Bancorporation

Selected Consolidated Financial Highlights

($ in thousands, except per share data and ratios; unaudited)

 

Consolidated Statement of Condition

 

     3/31/2005

    12/31/2004

   $ Change

    % Change

 
Assets                              

Cash and due from banks

   $ 21,417     $ 26,915    $ (5,498 )   -20.4 %

Overnight interest bearing deposits with other banks

     1,737       2,302    $ (565 )   -24.5 %
    


 

              

Cash and cash equivalents

     23,154       29,217    $ (6,063 )   -20.8 %

Securities

     33,318       33,886    $ (568 )   -1.7 %

Loans, net of allowance for loan losses of $16,923 and $18,475, respectively

     890,600       909,255    $ (18,655 )   -2.1 %

Accrued interest receivable

     6,534       6,520    $ 14     0.2 %

Premises and equipment, net

     24,183       23,955    $ 228     1.0 %

Foreclosed real estate and other foreclosed assets

     1,940       4,201    $ (2,261 )   -53.8 %

Life insurance and salary continuation assets

     19,115       18,912    $ 203     1.1 %

Goodwill

     12,050       12,050    $ —       0.0 %

Intangible assets

     2,579       2,642    $ (63 )   -2.4 %

Other assets

     7,085       8,356    $ (1,271 )   -15.2 %
    


 

              

Total Assets

   $ 1,020,558     $ 1,048,994    $ (28,436 )   -2.7 %
    


 

              
Liabilities                              

Noninterest bearing demand deposits

   $ 175,698     $ 169,579    $ 6,119     3.6 %

Interest bearing deposits:

                             

NOW and savings accounts

     425,266       452,357    $ (27,091 )   -6.0 %

Time, $100,000 and over

     107,807       123,006    $ (15,199 )   -12.4 %

Other time

     148,068       149,856    $ (1,788 )   -1.2 %
    


 

              

Total Deposits

     856,839       894,798    $ (37,959 )   -4.2 %

Short-term borrowings

     31,319       24,539    $ 6,780     27.6 %

Long-term borrowings

     4,260       5,668    $ (1,408 )   -24.8 %

Capital lease obligations

     404       416    $ (12 )   -2.9 %

Subordinated debentures

     10,310       10,310    $ —       0.0 %

Accrued interest payable

     1,028       1,000    $ 28     2.8 %

Other liabilities

     7,424       7,188    $ 236     3.3 %
    


 

              

Total Liabilities

     911,584       943,919    $ (32,335 )   -3.4 %
Stockholders’ Equity                              

Common stock

     101,866       100,812    $ 1,054     1.0 %

Retained earnings

     7,196       4,057    $ 3,139     77.4 %

Accumulated other comprehensive income, net of tax

     (88 )     206    $ (294 )   -142.7 %
    


 

              

Total Stockholders’ Equity

     108,974       105,075    $ 3,899     3.7 %
    


 

              

Total Liabilities and Stockholders’ Equity

   $ 1,020,558     $ 1,048,994    $ (28,436 )   -2.7 %
    


 

              

 

-more-


AWBC – Q1 2005 Earnings

April 25, 2005

Page 6 of 8

 

AmericanWest Bancorporation

Selected Consolidated Financial Highlights

($ in thousands, except per share data and ratios; unaudited)

 

     Three Months Ended

 
     3/31/2005

    3/31/2004

 

Share Data

                

Basic earnings per share

   $ 0.30     $ 0.35  

Diluted earnings per share

   $ 0.30     $ 0.34  

Basic weighted average shares outstanding

     10,338,025       10,150,470  

Diluted weighted average shares outstanding

     10,490,197       10,505,234  
     Three Months Ended

 
     3/31/2005

    3/31/2004

 

Financial Ratios, annualized

                

Return on average assets

     1.21 %     1.42 %

Return on average equity

     11.68 %     14.52 %

Efficiency ratio

     62.24 %     63.73 %

Noninterest expenses to average assets

     3.68 %     4.01 %

Net interest margin to average earning assets

     5.87 %     6.20 %

 

-more-

 

 


AWBC – Q1 2005 Earnings

April 25, 2005

Page 7 of 8

 

AmericanWest Bancorporation

Selected Consolidated Financial Highlights

($ in thousands, except per share data and ratios; unaudited)

 

     3/31/2005

    12/31/2004

 

Loan Portfolio:

                

Commercial real estate

   $ 488,038     $ 497,253  

Commercial and industrial

     199,657       197,912  

Agricultural

     115,176       122,735  

Real estate construction

     42,851       45,908  

Real estate mortgage

     32,577       32,703  

Installment

     19,989       22,454  

Bankcards and other

     9,211       8,909  
    


 


Total loans, gross

   $ 907,499     $ 927,874  
    


 


Allowance for loan losses

     (16,923 )     (18,475 )

Deferred loan fees, net of deferred costs

     24       (144 )
    


 


Total loans, net

   $ 890,600     $ 909,255  
    


 


     Three Months Ended

 
     3/31/2005

    3/31/2004

 

Allowance for loan losses:

                

Balance, beginning of period

   $ 18,475     $ 12,453  

Provision for loan losses

     1,075       1,000  

Net charge-offs

     (2,627 )     (948 )
    


 


Balance, end of period

   $ 16,923     $ 12,505  
    


 


Allowance for loan loss to total loans

     1.86 %     1.35 %
     3/31/2005

    12/31/2004

 

Nonperforming assets:

                

Accruing loans over 90 days past due

   $ 46     $ 53  

Nonaccrual loans

     31,314       24,222  
    


 


Total nonperforming loans

   $ 31,360     $ 24,275  
    


 


Foreclosed real estate and other foreclosed assets

     1,940       4,201  
    


 


Total nonperforming assets

   $ 33,300     $ 28,476  
    


 


Ratio of total nonperforming assets to total assets

     3.26 %     2.71 %

Ratio of total nonperforming loans to total gross loans

     3.46 %     2.62 %

Ratio of allowance for loan loss to nonperforming loans

     53.96 %     76.11 %

 

-more-


AWBC – Q1 2005 Earnings

April 25, 2005

Page 8 of 8

 

AmericanWest Bancorporation

Selected Consolidated Financial Highlights

($ in thousands, except per share data and ratios; unaudited)

 

     Three Months Ended March 31,

 
     2005

    2004

 

($ in thousands)

 

   Average
Balance


   Interest

   %

    Average
Balance


   Interest

   %

 
Assets                                         

Loans, gross

   $ 919,350    $ 16,983    7.49 %   $ 864,428    $ 16,816    7.82 %

Taxable Investments

     25,867      252    3.95 %     31,772      367    4.65 %

Nontaxable Investments

     8,723      138    6.42 %     8,873      137    6.21 %

Overnight deposits with other banks

     1,857      10    2.18 %     11,019      32    1.17 %
    

  

        

  

      

Total earning assets

     955,797    $ 17,383    7.38 %     916,092    $ 17,352    7.62 %
    

  

        

  

      

Other assets

     79,541                   77,444              
    

               

             

Total assets

   $ 1,035,338                 $ 993,536              
    

               

             
Liabilities                                         

Interest bearing deposits

   $ 687,516    $ 3,027    1.79 %   $ 706,206    $ 2,901    1.65 %

Borrowings

     64,095      568    3.59 %     31,994      297    3.73 %
    

  

        

  

      

Total interestbearing liabilities

     751,611    $ 3,595    1.94 %     738,200    $ 3,198    1.74 %
    

  

        

  

      

Noninterest bearing deposits

     167,729                   151,106              

Other liabilities

     8,506                   6,780              
    

               

             

Total liabilities

     927,846                   896,086              
    

               

             
Stockholders’ equity      107,492                   97,450              
    

               

             

Total liabilities and stockholders’ equity

   $ 1,035,338                 $ 993,536              
    

               

             

Net interest income and spread

                 5.44 %                 5.88 %

Net interest margin to average earnings assets

                 5.87 %                 6.20 %