A home builder's demise has forced West Bancorp. Inc. in West Des Moines to add $5 million to its previously reported loan-loss provision and revise its first-quarter earnings.
Last month the $1.3 billion-asset West Bancorp. reported first-quarter earnings of $4.5 million, or 26 cents a share. But after increasing its loss provision, it now says it earned $1.4 million, or 8 cents a share.
It earned $4.4 million in last year's first quarter.
It said the revision was necessary because Regency Homes of West Des Moines has ceased operating. Though its West Bank unit has no loans to the home builder, it has 13 loans to individuals related to Regency and companies they own.
It said none of the loans are in default, but $4 million of the total $22 million outstanding is unsecured.
Because of Regency's financial difficulty, West Bancorp. deemed the loans impaired.
Its provision jumped eighteenfold from a year earlier, to $5.6 million. Nonperforming assets were 1.33% of loans on March 31, up from 0.31% a year earlier.
In late trading Tuesday, West Bancorp.'s shares were down 3.4% from Monday's close, to $12.25.
