West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent
company of West Bank, today reported first quarter 2022 net income
of $13.2 million, or $0.78 per diluted common share, compared to
first quarter 2021 net income of $11.8 million, or $0.70 per
diluted common share. On April 27, 2022, the Company’s Board of
Directors declared a regular quarterly dividend of $0.25 per common
share. The dividend is payable on May 25, 2022, to stockholders of
record on May 11, 2022.
The Company recorded a negative provision for
loan losses of $750 thousand for the three months ended March 31,
2022, compared to a provision for loan losses of $500 thousand for
the three months ended March 31, 2021. The negative provision in
2022 was due to the sustained performance of loans after the
expiration of COVID modifications and sustained improvement in
classified loans. Total assets were $3.5 billion at March 31, 2022,
compared to $3.2 billion at March 31, 2021.
David Nelson, President and Chief Executive
Officer of the Company, commented, “West Bancorporation, Inc.
experienced record performance in the first quarter of 2022,
compared to any prior first quarter of the Company. Net income
increased 12 percent in the first quarter of 2022, compared to the
first quarter of 2021. We are very proud of the strength and
experience of our banking teams in all of our markets. We continue
to find opportunities to build new and expand existing customer
relationships and feel confident in our ability to serve the needs
of our communities. Our credit quality has remained incredibly
strong, as even our classified and impaired loans continue to make
timely payments.”
David Nelson added, “After only three years in
the market, we opened our newly constructed bank building in St.
Cloud, Minnesota in March 2022. Our success in that market is a
testament to our business model and the hard work of our local
bankers and community board advocates who help us tell our story.
We currently have other new bank building projects in various
stages of planning and development, including our new corporate
headquarters in West Des Moines, Iowa. These buildings represent
our commitment to our customers, our employees and the communities
we serve as we continue our pursuit of excellence.”
The Company filed its report on Form 10-Q with
the Securities and Exchange Commission today. Please refer to that
document for a more in-depth discussion of the Company’s financial
results. The Form 10-Q is 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, April 29, 2022. The telephone number for the
conference call is 844-200-6205 with access code 313064. A
recording of the call will be available until May 13, 2022, by
dialing 866-813-9403 with access code 675184.
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,
including the Russian invasion of Ukraine, 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 |
|
March 31, 2022 |
|
March 31, 2021 |
Assets |
|
|
|
|
Cash and due from banks |
|
$ |
21,896 |
|
|
$ |
23,570 |
|
Federal funds sold |
|
|
122,359 |
|
|
|
301,919 |
|
Securities available for sale,
at fair value |
|
|
797,912 |
|
|
|
447,152 |
|
Federal Home Loan Bank stock,
at cost |
|
|
10,269 |
|
|
|
12,414 |
|
Loans |
|
|
2,485,366 |
|
|
|
2,303,999 |
|
Allowance for loan losses |
|
|
(27,623 |
) |
|
|
(30,008 |
) |
Loans, net |
|
|
2,457,743 |
|
|
|
2,273,991 |
|
Premises and equipment,
net |
|
|
40,898 |
|
|
|
29,308 |
|
Bank-owned life insurance |
|
|
43,836 |
|
|
|
42,906 |
|
Other assets |
|
|
52,156 |
|
|
|
41,646 |
|
Total assets |
|
$ |
3,547,069 |
|
|
$ |
3,172,906 |
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
Deposits: |
|
|
|
|
Noninterest-bearing demand |
|
$ |
710,697 |
|
|
$ |
691,329 |
|
Interest-bearing: |
|
|
|
|
Demand |
|
|
554,235 |
|
|
|
466,913 |
|
Savings |
|
|
1,632,690 |
|
|
|
1,318,536 |
|
Time of $250 or more |
|
|
46,486 |
|
|
|
45,844 |
|
Other time |
|
|
147,144 |
|
|
|
159,471 |
|
Total deposits |
|
|
3,091,252 |
|
|
|
2,682,093 |
|
Federal funds purchased |
|
|
— |
|
|
|
4,060 |
|
Other borrowings |
|
|
196,954 |
|
|
|
216,374 |
|
Other liabilities |
|
|
22,383 |
|
|
|
35,850 |
|
Stockholders’ equity |
|
|
236,480 |
|
|
|
234,529 |
|
Total liabilities and stockholders’ equity |
|
$ |
3,547,069 |
|
|
$ |
3,172,906 |
|
WEST
BANCORPORATION, INC. AND SUBSIDIARY |
|
|
Financial Information
(continued) (unaudited) |
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
CONSOLIDATED STATEMENTS OF INCOME |
|
|
2022 |
|
|
|
2021 |
Interest income |
|
|
|
|
Loans, including fees |
|
$ |
23,286 |
|
|
$ |
24,038 |
Securities |
|
|
3,747 |
|
|
|
2,203 |
Other |
|
|
82 |
|
|
|
69 |
Total interest income |
|
|
27,115 |
|
|
|
26,310 |
Interest
expense |
|
|
|
|
Deposits |
|
|
2,151 |
|
|
|
1,877 |
Federal funds purchased |
|
|
— |
|
|
|
1 |
Other borrowings |
|
|
1,136 |
|
|
|
1,311 |
Total interest expense |
|
|
3,287 |
|
|
|
3,189 |
Net interest income |
|
|
23,828 |
|
|
|
23,121 |
Provision for loan losses |
|
|
(750 |
) |
|
|
500 |
Net interest income after provision for loan
losses |
|
|
24,578 |
|
|
|
22,621 |
Noninterest
income |
|
|
|
|
Service charges on deposit
accounts |
|
|
580 |
|
|
|
582 |
Debit card usage fees |
|
|
472 |
|
|
|
442 |
Trust services |
|
|
629 |
|
|
|
652 |
Increase in cash value of
bank-owned life insurance |
|
|
227 |
|
|
|
220 |
Realized securities gains,
net |
|
|
— |
|
|
|
4 |
Other income |
|
|
481 |
|
|
|
565 |
Total noninterest income |
|
|
2,389 |
|
|
|
2,465 |
Noninterest
expense |
|
|
|
|
Salaries and employee
benefits |
|
|
6,298 |
|
|
|
5,608 |
Occupancy |
|
|
1,086 |
|
|
|
1,228 |
Data processing |
|
|
624 |
|
|
|
602 |
FDIC insurance |
|
|
337 |
|
|
|
404 |
Other expenses |
|
|
2,317 |
|
|
|
2,429 |
Total noninterest expense |
|
|
10,662 |
|
|
|
10,271 |
Income before income taxes |
|
|
16,305 |
|
|
|
14,815 |
Income taxes |
|
|
3,121 |
|
|
|
3,063 |
Net income |
|
$ |
13,184 |
|
|
$ |
11,752 |
WEST
BANCORPORATION, INC. AND SUBSIDIARY |
|
|
Financial
Information (continued) (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER COMMON SHARE |
|
MARKET INFORMATION (1) |
|
|
Net Income |
|
|
|
|
|
|
|
|
Basic |
|
Diluted |
|
Dividends |
|
High |
|
Low |
2022 |
|
|
|
|
|
|
|
|
|
|
1st Quarter |
|
$ |
0.80 |
|
$ |
0.78 |
|
$ |
0.25 |
|
$ |
32.60 |
|
$ |
27.07 |
|
|
|
|
|
|
|
|
|
|
|
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 |
(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 March 31, |
SELECTED FINANCIAL MEASURES |
2022 |
|
|
2021 |
|
Return on average assets |
1.51 |
% |
|
1.53 |
% |
Return on average equity |
20.96 |
% |
|
20.77 |
% |
Net interest margin on a FTE
basis (1) |
2.85 |
% |
|
3.17 |
% |
Efficiency ratio (1)(2) |
40.14 |
% |
|
39.75 |
% |
|
|
|
|
|
As of March 31, |
|
2022 |
|
|
2021 |
|
Nonperforming assets to total
assets (2) |
0.25 |
% |
|
0.78 |
% |
Allowance for loan losses
ratio |
1.11 |
% |
|
1.30 |
% |
Allowance for loan losses
ratio, excluding PPP loans (1)(3) |
1.12 |
% |
|
1.39 |
% |
Tangible common equity
ratio |
6.67 |
% |
|
7.39 |
% |
(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.
- Nonperforming assets to total
assets - total nonperforming assets divided by total assets.
- 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 March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Reconciliation of net interest income and net interest
margin on a FTE basis to GAAP: |
|
|
|
|
Net interest income
(GAAP) |
|
$ |
23,828 |
|
|
$ |
23,121 |
|
Tax-equivalent adjustment
(1) |
|
|
329 |
|
|
|
229 |
|
Net interest income on a FTE basis (non-GAAP) |
|
|
24,157 |
|
|
|
23,350 |
|
Average interest-earning
assets |
|
|
3,432,114 |
|
|
|
2,979,710 |
|
Net interest margin on a FTE
basis (non-GAAP) |
|
|
2.85 |
% |
|
|
3.17 |
% |
|
|
|
|
|
Reconciliation of
efficiency ratio on an adjusted and FTE basis to
GAAP: |
|
|
|
|
Net interest income on a FTE
basis (non-GAAP) |
|
$ |
24,157 |
|
|
$ |
23,350 |
|
Noninterest income |
|
|
2,389 |
|
|
|
2,465 |
|
Adjustment for realized securities gains, net |
|
|
— |
|
|
|
(4 |
) |
Adjustment for losses on disposal of premises and equipment,
net |
|
|
18 |
|
|
|
24 |
|
Adjusted income |
|
|
26,564 |
|
|
|
25,835 |
|
Noninterest expense |
|
|
10,662 |
|
|
|
10,271 |
|
Efficiency ratio on an adjusted and FTE basis (non-GAAP) (2) |
|
|
40.14 |
% |
|
|
39.75 |
% |
|
|
|
|
|
|
|
As of March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Reconciliation of
allowance for loan losses ratio, excluding PPP loans: |
|
|
|
|
Loans outstanding (GAAP) |
|
$ |
2,485,366 |
|
|
$ |
2,303,999 |
|
Less: PPP loans |
|
|
(9,398 |
) |
|
|
(151,122 |
) |
Loans, net of PPP loans (non-GAAP) |
|
|
2,475,968 |
|
|
|
2,152,877 |
|
Allowance for loan losses |
|
|
27,623 |
|
|
|
30,008 |
|
Allowance for loan losses
ratio, excluding PPP loans (non-GAAP) (3) |
|
|
1.12 |
% |
|
|
1.39 |
% |
(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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