West Ban Corp. has a market cap of $119.9 million; its shares were traded at around $6.89 with and P/S ratio of 1.6.
Highlight of Business Operations:Total net income was $2,603 for the three months ended June 30, 2010, compared to a net loss of ($22,279) for the three months ended June 30, 2009. Total basic and diluted earnings (loss) per common share were $0.12 and ($1.32), respectively, for the same periods. The Company s annualized return on average equity and return on average assets for the three months ended June 30, 2010, were 7.52 and 0.63 percent, respectively, compared to (58.33) and (5.10) percent, respectively, for the three months ended June 30, 2009.
Results of continuing operations for the three months ended June 30, 2010, were $16,346 higher than the same period last year, due to a $13,600 decline in provision for loan losses, prior year second quarter results including goodwill impairment of $13,376, and a loss on discontinued operations of ($8,536). Second quarter 2010 results included $794 of services fees from SmartyPig, LLC, recognition of a loss of approximately $900 from writing off the Company s investment in a renewable energy closed-end fund, and a $570 charge to reduce the carrying value of two other real estate owned properties based on updated valuations. The loss on the renewable energy fund is a capital loss which the Company is unable to utilize for tax purposes at this time. Therefore, no tax benefit was recognized. This $900 loss affected earnings per share by approximately $0.05 per common share.
For the first six months of 2010, net income was $5,942, compared to a net loss of ($19,338) for the first six months of 2009. Basic and diluted earnings (loss) per common share were $0.28 and ($1.18), respectively. The annualized return on average equity and return on average assets for the six months ended June 30, 2010, were 8.75 percent and 0.73 percent, respectively, compared to (25.54) percent and (2.34) percent, respectively, for the six months ended June 30, 2009.
The difference between the year-to-date net income in 2010 and the 2009 net loss was due in substantial part to the 2009 goodwill impairment discussed above and the $15,100 decrease in provision for loan losses. Prior year first quarter results included a tax-exempt gain of $840 from bank-owned life insurance proceeds as the result of the death of one of West Bank s officers. Year-to-date 2010 income includes $1,061 of service fees from SmartyPig, LLC. This fee will be discontinued once the previously announced transfer of SmartyPig® savings deposits to Compass Bank occurs on July 31, 2010. The discontinuance of this fee should not materially impact income because it was designed to reimburse West Bank for the difference between the interest expense on the SmartyPig savings accounts and the interest income earned by investing those funds on a short-term basis.
The allowance for loan losses as a percentage of loans outstanding as of June 30, 2010, was 2.19 percent compared to 1.87 percent as of December 31, 2009. During the first six months of 2010, total loans outstanding declined $59,489. Total nonperforming assets declined by $2,711, with declines in all categories except nonaccrual investment securities.
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