West Bancorporation, Inc. Announces Third Quarter 2020 Net Income, Declares Quarterly Dividend

Nachrichtenquelle: globenewswire
29.10.2020, 13:30  |  111   |   |   

WEST DES MOINES, Iowa, Oct. 29, 2020 (GLOBE NEWSWIRE) -- West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent company of West Bank, today reported that third quarter 2020 net income was $8.1 million, or $0.49 per diluted common share, compared to third quarter 2019 net income of $7.5 million, or $0.46 per diluted common share. For the first nine months of 2020, net income was $24.2 million, or $1.46 per diluted common share, compared to $21.1 million, or $1.28 per diluted common share, for the first nine months of 2019. On October 28, 2020, the Company’s Board of Directors declared a regular quarterly dividend of $0.21 per common share, the same amount as in the previous six quarters. The dividend is payable on November 25, 2020, to stockholders of record on November 11, 2020.

“We are pleased with our strong financial performance in 2020,” commented Dave Nelson, President and Chief Executive Officer of the Company. “The challenges of 2020 and COVID-19 have amplified the Company’s attention to monitoring the ongoing credit quality of the loan portfolio. Credit quality related to certain industry segments in our commercial real estate loan portfolio is being monitored closely as the economic recovery in those industries remains slow and uncertain. In spite of economic stress, we are encouraged by our customers’ abilities to resume contractual payments at the end of most payment deferral accommodation periods related to COVID-19. We believe our history of strong capital, earnings and credit quality and the strength of our customer relationships put us in a position to successfully navigate the ongoing challenges related to COVID-19.”

In 2019, the Company implemented a growth strategy in three new Minnesota markets. As a result of that strategy and continued business development efforts in its existing markets, the Company’s average loan balances for the first nine months of 2020 have increased $208.1 million compared to the same period of 2019, excluding Paycheck Protection Program loans. Dave Nelson commented, “Because of the success of our business development efforts in Minnesota, we have purchased land in Sartell, Minnesota, a suburb of St. Cloud, and plan to begin construction on a permanent full service office to serve all of the St. Cloud metropolitan area. We are excited to continue building the West Bank brand in Minnesota.”

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 its 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, October 30, 2020. The telephone number for the conference call is 888-339-0814.  A recording of the call will be available until November 13, 2020, by dialing 877-344-7529.  The replay passcode is 10137424.

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 consumers and small- to medium-sized businesses. West Bank has eight 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 Coronavirus Disease 2019 (COVID-19) pandemic, including its potential effects on the economic environment, our customers and our operations, 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; 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; actions of bank and nonbank competitors; changes in local, national and international economic conditions; 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; 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; 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.

For more information contact:
Doug Gulling, Executive Vice President, Treasurer and Chief Financial Officer (515) 222-2309


WEST BANCORPORATION, INC. AND SUBSIDIARY        
Financial Information (unaudited)        
(in thousands)        
         
CONSOLIDATED BALANCE SHEETS   September 30, 2020   September 30, 2019
Assets        
Cash and due from banks   $ 49,445     $ 62,119  
Federal funds sold   16,398     67,168  
Investment securities available for sale, at fair value   374,387     410,371  
Federal Home Loan Bank stock, at cost   11,905     11,685  
Loans   2,247,425     1,836,730  
Allowance for loan losses   (25,403 )   (17,042 )
Loans, net   2,222,022     1,819,688  
Premises and equipment, net   28,099     30,057  
Bank-owned life insurance   42,520     34,731  
Other assets   31,107     21,417  
Total assets   $ 2,775,883     $ 2,457,236  
         
Liabilities and Stockholders’ Equity        
Deposits:        
Noninterest-bearing demand   $ 619,346     $ 395,925  
Interest-bearing:        
Demand   363,430     322,487  
Savings   1,130,582     1,015,443  
Time of $250 or more   54,241     71,669  
Other time   129,181     219,283  
Total deposits   2,296,780     2,024,807  
Federal funds purchased   2,350     3,535  
Other borrowings   217,661     197,387  
Other liabilities   43,772     27,370  
Stockholders’ equity   215,320     204,137  
Total liabilities and stockholders’ equity   $ 2,775,883     $ 2,457,236  


WEST BANCORPORATION, INC. AND SUBSIDIARY            
Financial Information (continued) (unaudited)                
(in thousands)                
                 
    Three Months Ended September 30,   Nine Months Ended September 30,
CONSOLIDATED STATEMENTS OF INCOME   2020   2019   2020   2019
Interest income                
Loans, including fees   $ 22,489     $ 22,203     $ 67,132     $ 63,699  
Investment securities   2,106     2,798     7,099     9,080  
Other   15     611     256     819  
Total interest income   24,610     25,612     74,487     73,598  
Interest expense                
Deposits   1,946     6,771     9,343     19,405  
Federal funds purchased   2     17     21     219  
Other borrowings   1,530     1,708     4,780     4,931  
Total interest expense   3,478     8,496     14,144     24,555  
Net interest income   21,132     17,116     60,343     49,043  
Provision for loan losses   4,000     300     8,000     300  
Net interest income after provision for loan losses   17,132     16,816     52,343     48,743  
Noninterest income                
Service charges on deposit accounts   609     630     1,743     1,841  
Debit card usage fees   432     426     1,205     1,235  
Trust services   553     572     1,477     1,536  
Increase in cash value of bank-owned life insurance   133     168     427     482  
Loan swap fees   983         1,572      
Realized investment securities gains (losses), net   156     1     81     (64 )
Other income   337     361     993     1,246  
Total noninterest income   3,203     2,158     7,498     6,276  
Noninterest expense                
Salaries and employee benefits   5,412     5,440     16,014     16,324  
Occupancy   1,383     1,379     4,092     3,956  
Data processing   614     695     1,882     2,091  
FDIC insurance   351         880     404  
Other expenses   2,299     2,022     6,271     6,055  
Total noninterest expense   10,059     9,536     29,139     28,830  
Income before income taxes   10,276     9,438     30,702     26,189  
Income taxes   2,176     1,912     6,544     5,106  
Net income   $ 8,100     $ 7,526     $ 24,158     $ 21,083  


WEST BANCORPORATION, INC. AND SUBSIDIARY    
Financial Information (continued) (unaudited)                
(dollars in thousands, except per share data)                
             
    PER COMMON SHARE   MARKET INFORMATION (1)
    Net Income            
    Basic   Diluted   Dividends   High   Low
2020                    
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  
                     
2019                    
4th Quarter   $ 0.46     $ 0.46     $ 0.21     $ 25.93     $ 21.01  
3rd Quarter   0.46     0.46     0.21     22.47     19.63  
2nd Quarter   0.41     0.41     0.21     22.32     20.14  
1st Quarter   0.42     0.42     0.20     23.74     19.02  

(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 September 30,   Nine Months Ended September 30,
SELECTED FINANCIAL MEASURES   2020   2019   2020   2019
Return on average assets   1.16 %   1.22 %   1.21 %   1.20 %
Return on average equity   15.20 %   14.76 %   15.47 %   14.25 %
Net interest margin (2)   3.21 %   2.94 %   3.19 %   2.95 %
Efficiency ratio (1)(2)   41.35 %   49.03 %   42.68 %   51.74 %
                 
        As of September 30,
            2020   2019
Texas ratio(1)           7.38 %   0.24  %
Allowance for loan losses ratio           1.13 %   0.93  %
Allowance for loan losses ratio, excluding PPP loans (2)(3)       1.26 %   0.93  %
Tangible common equity ratio           7.76 %   8.31  %

(1) A lower ratio is more desirable
(2) Non-GAAP financial measures - see reconciliation below
(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 $224,489 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 report 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 September 30,   Nine Months Ended September 30,
    2020   2019   2020   2019
Reconciliation of net interest income and net interest margin on an FTE basis to GAAP:                
Net interest income (GAAP)   $ 21,132     $ 17,116     $ 60,343     $ 49,043  
Tax-equivalent adjustment (1)   144     178     516     650  
Net interest income on an FTE basis (non-GAAP)   21,276     17,294     60,859     49,693  
Average interest-earning assets   2,639,532     2,334,365     2,544,429     2,249,520  
Net interest margin on an FTE basis (non-GAAP)   3.21 %   2.94 %   3.19 %   2.95 %
                 
Reconciliation of efficiency ratio on an FTE basis to GAAP:                
Net interest income on an FTE basis (non-GAAP)   $ 21,276     $ 17,294     $ 60,859     $ 49,693  
Noninterest income   3,203     2,158     7,498     6,276  
Adjustment for realized investment securities (gains) losses, net   (156 )   (1 )   (81 )   64  
Adjustment for (gain) loss on sale of fixed assets   1         3     (307 )
Adjusted income   24,324     19,451     68,279     55,726  
Noninterest expense   10,059     9,536     29,139     28,830  
Efficiency ratio on an adjusted and FTE basis (non-GAAP) (2)   41.35 %   49.03 %   42.68
%   51.74 %
                 
            As of September 30,
            2020   2019
Reconciliation of allowance for loan losses ratio, excluding PPP loans:            
Loans outstanding (GAAP)           $ 2,247,425     $ 1,836,730  
Less: PPP loans           (224,489 )    
   Loans, net of PPP loans (non-GAAP)           2,022,936     1,836,730  
Allowance for loan losses           25,403     17,042  
Allowance for loan losses ratio, excluding PPP loans (non-GAAP)       1.26 %   0.93 %

(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.

 


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West Bancorporation, Inc. Announces Third Quarter 2020 Net Income, Declares Quarterly Dividend WEST DES MOINES, Iowa, Oct. 29, 2020 (GLOBE NEWSWIRE) - West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent company of West Bank, today reported that third quarter 2020 net income was $8.1 million, or $0.49 per diluted common share, …

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