AmericanWest Bancorporation Reports Double-digit Gains in Assets and Loans; Net Income Equals $2.3 Million or $0.31 Per Diluted Share for 2Q01.Business Editors SPOKANE Spokane, city, United States Spokane (spōkăn`), city (1990 pop. 177,196), seat of Spokane co., E Wash., at the spectacular falls of the Spokane River; inc. 1881. , Wash.--(BUSINESS WIRE)--July 19, 2001 AmericanWest Bancorporation (Nasdaq:AWBC AWBC Australian Wine Brandy Corporation ) today reported its assets and loans at June June: see month. 30, 2001 posted double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. gains over year-ago levels due entirely to internally generated growth. Total assets at June 30, 2001 increased 13% from the year ago period to $637.8 million from $564.6; loans rose 21% to $551.8 million from $457.6 million; and deposits increased over 6% to $509.1 million from $478.3 million one year ago. Net income for the second quarter of 2001 was $2.3 million or $.31 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share compared to $2.0 million or $.25 per diluted share in the year ago period. For the first six months of this year, net income was $4.1 million, or $.54 per diluted share compared to $3.8 million, or $0.46 per diluted share a year ago. Results for the first half of 2001 included a $391,000 gain on the sale of the insurance agency subsidiary (2Q01), a $142,000 gain on the sale of an investment in a credit card processing company (1Q01), bank subsidiary merger expense of $284,000 (2Q01), and $186,000 of nonperforming loan legal expense (2Q01). The net of these items added $41,000 to net income in 2001. Per share figures have been adjusted for a 10% stock dividend issued February February: see month. 15, 2001. Interest income of $26.7 million was higher than the $23.3 million one year ago due to the increase in average loan volume to $517 million from $431 million over the same period. Interest expense of $10.7 million was higher than the $9.0 million in the prior-year period due to an increase in deposits to $509 million from $478 million over the same period. Net interest income of $15.9 million was higher than the $14.2 million net interest income in 2000. The net interest margin eased to 5.66% in 2001 from 5.83% one year ago. "Interest rate changes have a greater initial impact on loan yields than on the cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. , as variable rate loans re-price immediately and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. borrowings and certificates of deposits re-price according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. maturity schedules," noted Wes Colley Col´ley n. 1. See Collie. , President and Chief Executive Officer. AWBC's efficiency ratio, excluding nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. items, was 59.97% for 2001 compared to 63.54% for 2000. "We continue to improve productivity and efficiency throughout our organization," said Colley. "During the first four months of 2001 we consolidated our subsidiary community banks representing 34 branch locations and combined them into one Bank under the name of AmericanWest Bank, utilizing a single operating platform," Colley added. "We are continuing to consolidate our `back-room' operations to further improve efficiencies." For 2001, AWBC's return on average assets was 1.33% and the return on average equity was 12.6%, excluding nonrecurring items, compared to 1.42% and 12.3% for the same period one year ago. Total nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. increased to $15.8 million or 2.48% of total assets in the second quarter of 2001 compared to $7.6 million or 1.35% the year before. "The majority of the nonperforming assets involve four borrowers," said Wes Colley. "We think we are secured on a $4 million retail/office complex near downtown Spokane Downtown Spokane is the central business district in Spokane. Downtown Spokane's rough boundaries are I-90 to the south, Division St. to the east, Maple St. to the west, and the Spokane River to the north, although one could argue that downtown has extended north of the river. . We are well secured on two ice skating ice skating, gliding along an ice surface on keellike runners known as ice skates. Skating as a Sport Skating, besides being an important form of winter recreation and the essential skill in the game of ice hockey (see hockey, ice) has developed complexes in Spokane for another $4 million. The fourth borrower of $1.0 million is to an orchard orchard, generally an area on which fruit or nut trees are planted and cultivated. The words grove and plantation are often used when the fruits are tropical, e.g., a "citrus grove" or a "banana plantation. growing operation in the Yakima Valley region. We continue to monitor the progress of these loans and should deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in the collateral position occur, we are well poised to remedy the situation. We continue to monitor nonperforming credits closely and take remedial action A remedial action is a change made to a nonconforming product or service to address the deficiency. Rework and repair are generally the remedial actions taken on products, while services usually require additional services to be performed to ensure satisfaction. as quickly as possible." The allowance for loan losses was $5.5 million -- equal to 1.00% of total loans and 39.19% of nonperforming loans at June 30, 2001. "Based on our loan quality assessment report, which measures the amount of loan reserves we should have to support our past due loans, we should have $4.5 million in reserves versus actual reserves of $5.5 million," said Colley. Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. rose to $66.0 million, equal to book value of $8.88 per share. Tangible book value was $8.24 per share. "The stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program has continued through the second quarter of 2001 with 298,039 shares repurchased during the year," said Colley. Founded in 1983, AmericanWest Bancorporation is a regional community bank holding company with 34 branch offices -- 33 in Central and Eastern Washington
FINANCIAL HIGHLIGHTS
(unaudited) ($ in thousands except per share)
Second Quarter Ended First Half Ended
June 30, June 30,
2001 2000 2001 2000
-------------------------------------
Interest Income $13,340 $12,022 $26,659 $23,260
Interest Expense $ 5,162 $ 4,719 $10,723 $ 9,030
Net Interest Income $ 8,178 $ 7,303 $15,936 $14,230
Provision for Loan Losses $ 707 $ 307 $ 1,128 $ 644
Noninterest Income $ 1,326 $ 1,043 $ 2,577 $ 2,086
Noninterest Expense $ 5,322 $ 5,148 $11,183 $10,368
Income Before Income Tax $ 3,475 $ 2,891 $ 6,202 $ 5,304
Income Tax $ 1,161 $ 873 $ 2,068 $ 1,496
Net Income $ 2,314 $ 2,018 $ 4,134 $ 3,808
Basic Earnings Per Share(b) $ 0.31 $ 0.25 $ 0.54 $ 0.47
Diluted Earnings Per Share(b) $ 0.31 $ 0.25 $ 0.54 $ 0.46
Basic Earnings Per Share
without nonrecurring item(b) $ 0.31 $ 0.25 $ 0.54 $ 0.47
Diluted Earnings Per Share
without nonrecurring items(b) $ 0.31 $ 0.25 $ 0.54 $ 0.46
Basic Weighted Average Shares
Outstanding(b) 7,519,930 8,048,252 7,590,940 8,173,964
Diluted Weighted Average Shares
Outstanding(b) 7,573,012 8,089,761 7,650,643 8,230,096
BALANCE SHEET
-------------
June 30, December 31, June 30,
2001 2000 2000
-----------------------------------
Total Assets $637,829 $598,513 $564,577
Loans $551,769 $493,407 $457,609
Deposits $509,058 $501,426 $478,346
Borrowings $ 57,361 $ 27,367 $ 18,931
Shareholders' Equity $ 65,985 $ 64,530 $ 62,765
Book Value Per Share(b) $ 8.88 $ 8.41 $ 7.80
Tangible Book Value Per Share(b) $ 8.24 $ 7.77 $ 7.13
FINANCIAL RATIOS: (Annualized)
-----------------
June 30, December 31, June 30,
2001 2000 2000
-----------------------------------
Return on Average Assets 1.35% 1.44% 1.42%
Return On Average Assets without
nonrecurring items(a) 1.33% 1.54% 1.42%
Return on Average Equity 12.71% 12.73% 12.30%
Return on Average Equity without
nonrecurring items(a) 12.59% 13.91% 12.30%
Efficiency Ratio 60.78% 61.44% 63.54%
Efficiency Ratio without
nonrecurring items(a) 59.97% 60.05% 63.54%
Operating Expense to Average
Assets 3.65% 3.83% 3.87%
Net Interest Margin to Average
Earning Assets 5.66% 5.96% 5.83%
Average Equity to Average Assets 10.60% 11.32% 11.57%
Equity to Assets Ratio 10.35% 10.78% 11.12%
ALLOWANCE FOR LOAN LOSSES:
($ in thousands, except per share)
June 30, December 31, June 30,
2001 2000 2000
-----------------------------------
Balance Beginning of Period $ 4,948 $ 4,349 $ 4,349
Provision for Loan Losses $ 1,128 $ 1,643 $ 644
Net (Charge Offs)/Recoveries $ (565) $(1,044) $ (693)
Balance End of Period $ 5,511 $ 4,948 $ 4,300
Allowance for Loan Losses to
Total Loans 1.00% 1.00% 0.94%
Allowance for Loan Loss to
Nonperforming Loans 39.19% 72.80% 71.65%
NONPERFORMING ASSETS:
($ in thousands, except per share)
June 30, December 31, June 30,
2001 2000 2000
-----------------------------------
Accruing Loans - 90 days past
due $ 6,404 $ 1,339 $ 516
Nonaccrual Loans $ 7,657 $ 5,458 $ 5,485
Total Nonperforming Loans $14,061 $ 6,797 $ 6,001
Other Real Estate
Owned/Foreclosed Assets $ 1,730 $ 1,510 $ 1,631
Total Nonperforming Assets $15,791 $ 8,307 $ 7,632
Total Nonperforming Assets to
Total Assets 2.48% 1.39% 1.35%
(a) In the second quarter of 2001 AmericanWest Bancorporation had nonrecurring income in the form of a gain from the sale of the insurance agency subsidiary and nonrecurring expense in the form of bank merger expense and nonperforming loan legal expense. In the first quarter of 2001, AWBC had a gain on the sale of an investment in a credit card processing company. In 2000 AWBC had nonrecurring income from the sale of one branch, real estate and nonrecurring expenses from the sale of securities, write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of impaired intangible asset Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , write-off of computer equipment and the sale of real estate. (b) All per share figures have been adjusted for a 10% stock dividend issued February 15, 2001. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: Statements in this news release looking forward in time involve risks and uncertainties, including success in integrating subsidiaries, consolidation of back office functions, the effect of changing economic conditions, trends in the interest rate market, and other risk factors detailed in the company's Securities and Exchange Commission filings. |
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