West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent
company of West Bank, today reported 2021 net income was $49.6
million, or $2.95 per diluted common share, compared to 2020 net
income of $32.7 million, or $1.98 per diluted common share. Net
income for the fourth quarter of 2021 was $11.9 million, or $0.71
per diluted common share, compared to fourth quarter 2020 net
income of $8.6 million, or $0.52 per diluted common share. On
January 26, 2022, the Company’s Board of Directors declared a
regular quarterly dividend of $0.25 per common share, an increase
of $0.01 from the prior quarter and representing a record high
quarterly dividend for the Company. The dividend is payable on
February 23, 2022, to stockholders of record on February 9, 2022.
The Company recorded negative provision for loan
losses of $1,500 for the year ended December 31, 2021, compared to
provision for loan losses of $12,000 for the year ended December
31, 2020. The provision in 2020 was due to the onset of the global
pandemic, whereas 2021 includes a reserve release due to the
improving economic outlook.
David Nelson, President and Chief Executive
Officer of the Company, commented, “West Bancorporation, Inc.
experienced extraordinary financial performance in 2021. Net income
increased 52 percent in 2021, compared to 2020, and net interest
income increased 15 percent in 2021, compared to 2020. Total assets
were $3.5 billion at December 31, 2021, compared to $3.2 billion at
December 31, 2020. We experienced loan growth (exclusive of
Paycheck Protection Program loan activity) of 16 percent and
deposit growth of 12 percent in 2021. Our credit quality continues
to improve as classified and impaired loans were paid down and paid
off. As of December 31, 2021, the Texas ratio declined to 3.10
percent and there were no loans past due more than 30 days.”
David Nelson added, “We currently have four new
bank building projects in various stages of planning and
development. These buildings represent our commitment to our
customers, our employees and the communities we serve as we
continue our pursuit of excellence.”
The Company will file its report on Form 10-K
with the Securities and Exchange Commission on or before February
24, 2022. Please refer to that document for a more in-depth
discussion of the Company’s financial results. The Form 10-K will
be available on the Investor Relations section of West Bank’s
website at www.westbankstrong.com.
The Company will discuss its financial results
on a conference call scheduled for 10:00 a.m. Central Time
tomorrow, Friday, January 28, 2022. The telephone number for the
conference call is 888-339-0814. A recording of the call will be
available until February 11, 2022, by dialing 877-344-7529. The
replay passcode is 3153348.
About West Bancorporation, Inc. (Nasdaq:
WTBA)
West Bancorporation, Inc. is headquartered in
West Des Moines, Iowa. Serving customers since 1893, West Bank, a
wholly-owned subsidiary of West Bancorporation, Inc., is a
community bank that focuses on lending, deposit services, and trust
services for small- to medium-sized businesses and consumers. West
Bank has seven offices in the Des Moines, Iowa metropolitan area,
one office in Coralville, Iowa, and four offices in Minnesota in
the cities of Rochester, Owatonna, Mankato and St. Cloud.
Certain statements in this report, other than
purely historical information, including estimates, projections,
statements relating to the Company’s business plans, objectives and
expected operating results, and the assumptions upon which those
statements are based, are “forward-looking statements” within the
meanings of the Private Securities Litigation Reform Act of 1995,
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements may appear throughout this report. These
forward-looking statements are generally identified by the words
“believes,” “expects,” “intends,” “anticipates,” “projects,”
“future,” “confident,” “may,” “should,” “will,” “strategy,” “plan,”
“opportunity,” “will be,” “will likely result,” “will continue” or
similar references, or references to estimates, predictions or
future events. Such forward-looking statements are based upon
certain underlying assumptions, risks and
uncertainties. Because of the possibility that the underlying
assumptions are incorrect or do not materialize as expected in the
future, actual results could differ materially from these
forward-looking statements. Risks and uncertainties that
may affect future results include: the effects of the COVID-19
pandemic, including its effects on the economic environment, our
customers and our operations, including due to supply chain
disruptions, as well as any changes to federal, state or local
government laws, regulations or orders in connection with the
pandemic; interest rate risk; competitive pressures, including from
non-bank competitors such as “fintech” companies; pricing pressures
on loans and deposits; changes in credit and other risks posed by
the Company’s loan and investment portfolios, including declines in
commercial or residential real estate values or changes in the
allowance for loan losses dictated by new market conditions,
accounting standards (including as a result of the future
implementation of the current expected credit loss (CECL)
accounting standard) or regulatory requirements; changes in local,
national and international economic conditions, including rising
rates of inflation; changes in legal and regulatory requirements,
limitations and costs; changes in customers’ acceptance of the
Company’s products and services; cyber-attacks; unexpected outcomes
of existing or new litigation involving the Company; the monetary,
trade and other regulatory policies of the U.S. government,
including anticipated rate increases; acts of war or terrorism,
widespread disease or pandemics, such as the COVID-19 pandemic, or
other adverse external events; developments and uncertainty related
to the future use and availability of some reference rates, such as
the London Interbank Offered Rate, as well as other alternative
reference rates; changes to U.S. tax laws, regulations and
guidance; liquidity risk due to excess liquidity at the Company’s
bank subsidiary; talent and labor shortages; and any other risks
described in the “Risk Factors” sections of reports filed by the
Company with the Securities and Exchange Commission. The Company
undertakes no obligation to revise or update such forward-looking
statements to reflect current or future events or circumstances
after the date hereof or to reflect the occurrence of unanticipated
events.
WEST BANCORPORATION,
INC. AND SUBSIDIARY |
|
|
|
|
Financial Information
(unaudited) |
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS |
|
December 31, 2021 |
|
December 31, 2020 |
Assets |
|
|
|
|
Cash and due from banks |
|
$ |
17,555 |
|
|
$ |
77,693 |
|
Federal funds sold |
|
|
175,270 |
|
|
|
318,742 |
|
Securities available for sale,
at fair value |
|
|
758,822 |
|
|
|
420,571 |
|
Federal Home Loan Bank stock,
at cost |
|
|
9,965 |
|
|
|
11,723 |
|
Loans |
|
|
2,456,196 |
|
|
|
2,280,575 |
|
Allowance for loan losses |
|
|
(28,364 |
) |
|
|
(29,436 |
) |
Loans, net |
|
|
2,427,832 |
|
|
|
2,251,139 |
|
Premises and equipment,
net |
|
|
34,568 |
|
|
|
29,077 |
|
Bank-owned life insurance |
|
|
43,609 |
|
|
|
42,686 |
|
Other assets |
|
|
32,580 |
|
|
|
34,113 |
|
Total assets |
|
$ |
3,500,201 |
|
|
$ |
3,185,744 |
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
Deposits: |
|
|
|
|
Noninterest-bearing demand |
|
$ |
720,136 |
|
|
$ |
696,731 |
|
Interest-bearing: |
|
|
|
|
Demand |
|
|
548,242 |
|
|
|
553,881 |
|
Savings |
|
|
1,550,636 |
|
|
|
1,274,254 |
|
Time of $250 or more |
|
|
53,019 |
|
|
|
46,907 |
|
Other time |
|
|
143,972 |
|
|
|
129,221 |
|
Total deposits |
|
|
3,016,005 |
|
|
|
2,700,994 |
|
Federal funds purchased |
|
|
2,880 |
|
|
|
5,375 |
|
Other borrowings |
|
|
196,986 |
|
|
|
217,010 |
|
Other liabilities |
|
|
24,002 |
|
|
|
38,670 |
|
Stockholders’ equity |
|
|
260,328 |
|
|
|
223,695 |
|
Total liabilities and stockholders’ equity |
|
$ |
3,500,201 |
|
|
$ |
3,185,744 |
|
WEST
BANCORPORATION, INC. AND SUBSIDIARY |
|
|
|
|
|
|
Financial Information
(continued) (unaudited) |
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
CONSOLIDATED STATEMENTS OF INCOME |
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Interest income |
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
24,179 |
|
|
$ |
23,536 |
|
|
$ |
95,585 |
|
|
$ |
90,668 |
|
Securities |
|
|
3,419 |
|
|
|
2,162 |
|
|
|
11,403 |
|
|
|
9,261 |
|
Other |
|
|
66 |
|
|
|
48 |
|
|
|
292 |
|
|
|
304 |
|
Total interest income |
|
|
27,664 |
|
|
|
25,746 |
|
|
|
107,280 |
|
|
|
100,233 |
|
Interest
expense |
|
|
|
|
|
|
|
|
Deposits |
|
|
2,055 |
|
|
|
1,913 |
|
|
|
7,948 |
|
|
|
11,256 |
|
Federal funds purchased |
|
|
1 |
|
|
|
2 |
|
|
|
5 |
|
|
|
23 |
|
Other borrowings |
|
|
1,006 |
|
|
|
1,341 |
|
|
|
4,268 |
|
|
|
6,121 |
|
Total interest expense |
|
|
3,062 |
|
|
|
3,256 |
|
|
|
12,221 |
|
|
|
17,400 |
|
Net interest income |
|
|
24,602 |
|
|
|
22,490 |
|
|
|
95,059 |
|
|
|
82,833 |
|
Provision for loan losses |
|
|
— |
|
|
|
4,000 |
|
|
|
(1,500 |
) |
|
|
12,000 |
|
Net interest income after provision for loan
losses |
|
|
24,602 |
|
|
|
18,490 |
|
|
|
96,559 |
|
|
|
70,833 |
|
Noninterest
income |
|
|
|
|
|
|
|
|
Service charges on deposit
accounts |
|
|
603 |
|
|
|
617 |
|
|
|
2,352 |
|
|
|
2,360 |
|
Debit card usage fees |
|
|
505 |
|
|
|
427 |
|
|
|
1,948 |
|
|
|
1,632 |
|
Trust services |
|
|
633 |
|
|
|
601 |
|
|
|
2,671 |
|
|
|
2,078 |
|
Increase in cash value of
bank-owned life insurance |
|
|
233 |
|
|
|
166 |
|
|
|
923 |
|
|
|
593 |
|
Loan swap fees |
|
|
24 |
|
|
|
— |
|
|
|
66 |
|
|
|
1,572 |
|
Realized securities gains
(losses), net |
|
|
— |
|
|
|
(4 |
) |
|
|
51 |
|
|
|
77 |
|
Other income |
|
|
350 |
|
|
|
297 |
|
|
|
1,718 |
|
|
|
1,290 |
|
Total noninterest income |
|
|
2,348 |
|
|
|
2,104 |
|
|
|
9,729 |
|
|
|
9,602 |
|
Noninterest
expense |
|
|
|
|
|
|
|
|
Salaries and employee
benefits |
|
|
5,928 |
|
|
|
5,577 |
|
|
|
23,226 |
|
|
|
21,591 |
|
Occupancy |
|
|
1,532 |
|
|
|
1,228 |
|
|
|
5,162 |
|
|
|
4,879 |
|
Data processing |
|
|
630 |
|
|
|
575 |
|
|
|
2,465 |
|
|
|
2,331 |
|
FDIC insurance |
|
|
460 |
|
|
|
330 |
|
|
|
1,818 |
|
|
|
1,210 |
|
Other expenses |
|
|
3,321 |
|
|
|
2,205 |
|
|
|
10,709 |
|
|
|
9,043 |
|
Total noninterest expense |
|
|
11,871 |
|
|
|
9,915 |
|
|
|
43,380 |
|
|
|
39,054 |
|
Income before income taxes |
|
|
15,079 |
|
|
|
10,679 |
|
|
|
62,908 |
|
|
|
41,381 |
|
Income taxes |
|
|
3,169 |
|
|
|
2,125 |
|
|
|
13,301 |
|
|
|
8,669 |
|
Net income |
|
$ |
11,910 |
|
|
$ |
8,554 |
|
|
$ |
49,607 |
|
|
$ |
32,712 |
|
WEST
BANCORPORATION, INC. AND SUBSIDIARY |
|
|
Financial
Information (continued) (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER COMMON SHARE |
|
MARKET INFORMATION (1) |
|
|
Net Income |
|
|
|
|
|
|
|
|
Basic |
|
Diluted |
|
Dividends |
|
High |
|
Low |
2021 |
|
|
|
|
|
|
|
|
|
|
4th Quarter |
|
$ |
0.72 |
|
|
$ |
0.71 |
|
|
$ |
0.24 |
|
|
$ |
34.50 |
|
|
$ |
29.30 |
|
3rd Quarter |
|
|
0.77 |
|
|
|
0.76 |
|
|
|
0.24 |
|
|
|
31.98 |
|
|
|
26.26 |
|
2nd Quarter |
|
|
0.80 |
|
|
|
0.79 |
|
|
|
0.24 |
|
|
|
29.90 |
|
|
|
23.92 |
|
1st Quarter |
|
|
0.71 |
|
|
|
0.70 |
|
|
|
0.22 |
|
|
|
26.78 |
|
|
|
18.86 |
|
|
|
|
|
|
|
|
|
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
4th Quarter |
|
$ |
0.52 |
|
|
$ |
0.52 |
|
|
$ |
0.21 |
|
|
$ |
21.79 |
|
|
$ |
15.53 |
|
3rd Quarter |
|
|
0.49 |
|
|
|
0.49 |
|
|
|
0.21 |
|
|
|
17.99 |
|
|
|
15.50 |
|
2nd Quarter |
|
|
0.48 |
|
|
|
0.48 |
|
|
|
0.21 |
|
|
|
20.67 |
|
|
|
14.50 |
|
1st Quarter |
|
|
0.49 |
|
|
|
0.49 |
|
|
|
0.21 |
|
|
|
25.68 |
|
|
|
13.74 |
|
(1) |
|
The prices shown are the high and low sale prices for the Company’s
common stock, which trades on the Nasdaq Global Select Market under
the symbol WTBA. The market quotations, reported by Nasdaq, do not
include retail markup, markdown or commissions. |
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
SELECTED FINANCIAL MEASURES |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Return on average assets |
|
1.38 |
% |
|
1.15 |
% |
|
1.52 |
% |
|
1.19 |
% |
Return on average equity |
|
18.51 |
% |
|
15.54 |
% |
|
20.33 |
% |
|
15.49 |
% |
Net interest margin on a FTE
basis (1) |
|
3.00 |
% |
|
3.20 |
% |
|
3.05 |
% |
|
3.20 |
% |
Efficiency ratio (1)(2) |
|
43.32 |
% |
|
39.99 |
% |
|
40.91 |
% |
|
41.96 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
|
|
|
|
|
|
2021 |
|
2020 |
Texas ratio (2) |
|
|
|
|
|
3.10 |
% |
|
6.40 |
% |
Allowance for loan losses
ratio |
|
|
|
|
|
1.15 |
% |
|
1.29 |
% |
Allowance for loan
losses ratio, excluding PPP loans (1)(3) |
|
|
|
1.17 |
% |
|
1.40 |
% |
Tangible common equity
ratio |
|
|
|
|
|
7.44 |
% |
|
7.02 |
% |
(1) |
|
Non-GAAP financial measures - see reconciliation below |
(2) |
|
A lower ratio is more
desirable |
(3) |
|
Paycheck Protection Program
(PPP) |
Definitions of ratios:
- Return on average assets -
annualized net income divided by average assets.
- Return on average equity -
annualized net income divided by average stockholders’ equity.
- Net interest margin - annualized
tax-equivalent net interest income divided by average
interest-earning assets.
- Efficiency ratio - noninterest
expense (excluding other real estate owned expense) divided by
noninterest income (excluding net securities gains/losses and
gains/losses on disposition of premises and equipment) plus
tax-equivalent net interest income.
- Texas ratio - total nonperforming
assets divided by tangible common equity plus the allowance for
loan losses.
- Allowance for loan losses ratio -
allowance for loan losses divided by total loans.
- Allowance for loan losses ratio,
excluding PPP loans - allowance for loan losses divided by total
loans minus the amount of PPP loans.
- Tangible common equity ratio -
common equity less intangible assets (none held) divided by
tangible assets.
WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (continued) (unaudited) (dollars in
thousands)
NON-GAAP FINANCIAL MEASURES
This press release contains references to
financial measures that are not defined in generally accepted
accounting principles (GAAP). The following table reconciles the
non-GAAP financial measures of net interest income and net interest
margin on a fully taxable equivalent (FTE) basis, efficiency ratio
on an adjusted and FTE basis, loans, net of PPP loans and allowance
for loan losses ratio, excluding PPP loans, to their most directly
comparable measures under GAAP.
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Reconciliation of net interest income and net interest
margin on a FTE basis to GAAP: |
|
|
|
|
|
|
|
|
Net interest income
(GAAP) |
|
$ |
24,602 |
|
|
$ |
22,490 |
|
|
$ |
95,059 |
|
|
$ |
82,833 |
|
Tax-equivalent adjustment
(1) |
|
|
397 |
|
|
|
191 |
|
|
|
1,202 |
|
|
|
707 |
|
Net interest income on a FTE basis (non-GAAP) |
|
|
24,999 |
|
|
|
22,681 |
|
|
|
96,261 |
|
|
|
83,540 |
|
Average interest-earning
assets |
|
|
3,309,625 |
|
|
|
2,822,563 |
|
|
|
3,152,138 |
|
|
|
2,614,342 |
|
Net interest margin on a FTE
basis (non-GAAP) |
|
|
3.00 |
% |
|
|
3.20 |
% |
|
|
3.05 |
% |
|
|
3.20 |
% |
|
|
|
|
|
|
|
|
|
Reconciliation of efficiency ratio on an adjusted and FTE
basis to GAAP: |
|
|
|
|
|
|
|
|
Net interest income on a FTE
basis (non-GAAP) |
|
$ |
24,999 |
|
|
$ |
22,681 |
|
|
$ |
96,261 |
|
|
$ |
83,540 |
|
Noninterest income |
|
|
2,348 |
|
|
|
2,104 |
|
|
|
9,729 |
|
|
|
9,602 |
|
Adjustment for realized securities (gains) losses, net |
|
|
— |
|
|
|
4 |
|
|
|
(51 |
) |
|
|
(77 |
) |
Adjustment for losses on disposal of premises and equipment,
net |
|
|
55 |
|
|
|
6 |
|
|
|
84 |
|
|
|
9 |
|
Adjusted income |
|
|
27,402 |
|
|
|
24,795 |
|
|
|
106,023 |
|
|
|
93,074 |
|
Noninterest expense |
|
|
11,871 |
|
|
|
9,915 |
|
|
|
43,380 |
|
|
|
39,054 |
|
Efficiency ratio on an
adjusted and FTE basis (non-GAAP) (2) |
|
|
43.32 |
% |
|
|
39.99 |
% |
|
|
40.91 |
% |
|
|
41.96 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
|
|
|
|
|
|
|
2021 |
|
|
|
2020 |
|
Reconciliation of allowance for loan losses ratio,
excluding PPP loans: |
|
|
|
|
|
|
Loans outstanding (GAAP) |
|
|
|
|
|
$ |
2,456,196 |
|
|
$ |
2,280,575 |
|
Less: PPP loans |
|
|
|
|
|
|
(22,206 |
) |
|
|
(180,757 |
) |
Loans, net of PPP loans (non-GAAP) |
|
|
|
|
|
|
2,433,990 |
|
|
|
2,099,818 |
|
Allowance for loan losses |
|
|
|
|
|
|
28,364 |
|
|
|
29,436 |
|
Allowance for loan
losses ratio, excluding PPP loans (non-GAAP) (3) |
|
|
|
|
1.17 |
% |
|
|
1.40 |
% |
(1) |
|
Computed on a tax-equivalent basis using a federal income tax rate
of 21 percent, adjusted to reflect the effect of the nondeductible
interest expense associated with owning tax-exempt securities and
loans. Management believes the presentation of this non-GAAP
measure provides supplemental useful information for proper
understanding of the financial results, as it enhances the
comparability of income arising from taxable and nontaxable
sources. |
(2) |
|
The efficiency ratio expresses
noninterest expense as a percent of fully taxable equivalent net
interest income and noninterest income, excluding specific
noninterest income and expenses. Management believes the
presentation of this non-GAAP measure provides supplemental useful
information for proper understanding of the Company’s financial
performance. It is a standard measure of comparison within the
banking industry. A lower ratio is more desirable. |
(3) |
|
Management believes that
presenting the allowance for loan losses as a percentage of total
loans excluding PPP loans is useful in assessing the credit quality
of the Company’s core portfolio. |
For more information contact:Jane Funk,
Executive Vice President, Treasurer and Chief Financial Officer
(515) 222-5766
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