WEST DES MOINES, Iowa, July 29, 2021 (GLOBE NEWSWIRE) -- West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent company of West Bank, today reported that second quarter 2021 net income was $13.2 million, or $0.79 per diluted common share, compared to second quarter 2020 net income of $8.0 million, or $0.48 per diluted common share. For the first six months of 2021, net income was $25.0 million, or $1.49 per diluted common share, compared to $16.1 million, or $0.97 per diluted common share, for the first six months of 2020. On July 28, 2021, the Company’s Board of Directors declared a regular quarterly dividend of $0.24 per common share. The dividend is payable on August 25, 2021, to stockholders of record on August 11, 2021.

Dave Nelson, President and Chief Executive Officer of the Company, commented, “As the country and our communities continue to emerge from the economic uncertainties created by the COVID-19 pandemic, our bankers are dedicated to executing our strategic objectives, which include organic loan growth and superior credit quality resulting from disciplined underwriting. We are pleased to have loan growth (exclusive of Paycheck Protection Program (PPP) loan activity) of 6.0 percent for the first six months of 2021, and year over year loan growth of 12.6 percent (also exclusive of PPP loan activity). Our credit quality continues to improve as all remaining COVID-related loan modifications expired in the second quarter and those loans returned to normal payment status. This improvement in economic conditions and credit quality resulted in a negative provision for loan losses of $2.0 million in the second quarter compared to a provision for loan losses of $3.0 million in the second quarter last year.”

Dave Nelson also commented, “We continue to build our brand in Minnesota. Construction of our permanent branch office in Sartell, Minnesota, a suburb of St. Cloud, is expected to be completed before the end of the year. We are also in the planning phase for the construction of a permanent branch office in Mankato, 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 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, July 30, 2021. The telephone number for the conference call is 888-339-0814. A recording of the call will be available until August 13, 2021, by dialing 877-344-7529. The replay passcode is 10150541.

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 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, 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; changes to U.S. tax laws, regulations and guidance; 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 June 30, 2021 June 30, 2020
Assets    
Cash and due from banks $31,978    $54,175  
Federal funds sold 238,845    62,494  
Securities available for sale, at fair value 601,462    342,017  
Federal Home Loan Bank stock, at cost 10,189    12,307  
Loans 2,309,527    2,199,688  
Allowance for loan losses (28,042)  (21,363) 
Loans, net 2,281,485    2,178,325  
Premises and equipment, net 30,753    28,655  
Bank-owned life insurance 43,146    35,187  
Other assets 30,902    27,163  
Total assets $3,268,760    $2,740,323  
     
Liabilities and Stockholders’ Equity    
Deposits:    
Noninterest-bearing demand $703,691    $590,487  
Interest-bearing:    
Demand 487,642    378,931  
Savings 1,391,231    1,081,743  
Time of $250 or more 46,660    61,456  
Other time 196,065    143,092  
Total deposits 2,825,289    2,255,709  
Federal funds purchased 3,605    5,755  
Other borrowings 165,744    223,181  
Other liabilities 27,596    46,991  
Stockholders’ equity 246,526    208,687  
Total liabilities and stockholders’ equity $3,268,760    $2,740,323  


       
       
WEST BANCORPORATION, INC. AND SUBSIDIARY      
Financial Information (continued) (unaudited)        
(in thousands)        
         
  Three Months Ended June 30, Six Months Ended June 30,
CONSOLIDATED STATEMENTS OF INCOME 2021 2020 2021 2020
Interest income        
Loans, including fees $23,139    $22,332   $47,177    $44,643  
Securities 2,607    2,313   4,810    4,993  
Other 75    12   144    241  
Total interest income 25,821    24,657   52,131    49,877  
Interest expense        
Deposits 1,995    2,351   3,872    7,397  
Federal funds purchased 1    3   2    19  
Other borrowings 975    1,556   2,286    3,250  
Total interest expense 2,971    3,910   6,160    10,666  
Net interest income 22,850    20,747   45,971    39,211  
Provision for loan losses (2,000)  3,000   (1,500)  4,000  
Net interest income after provision for loan losses 24,850    17,747   47,471    35,211  
Noninterest income        
Service charges on deposit accounts 578    531   1,160    1,134  
Debit card usage fees 511    391   953    773  
Trust services 691    461   1,343    924  
Increase in cash value of bank-owned life insurance 240    136   460    294  
Loan swap fees 42    3   42    589  
Realized investment securities gains (losses), net 36    (69)  40    (75) 
Other income 417    322   982    656  
Total noninterest income 2,515    1,775   4,980    4,295  
Noninterest expense        
Salaries and employee benefits 5,672    5,318   11,280    10,602  
Occupancy 1,199    1,217   2,427    2,430  
Data processing 617    554   1,219    1,184  
FDIC insurance 426    292   830    529  
Other expenses 2,612    2,036   5,041    4,335  
Total noninterest expense 10,526    9,417   20,797    19,080  
Income before income taxes 16,839    10,105   31,654    20,426  
Income taxes 3,600    2,136   6,663    4,368  
Net income $13,239    $7,969   $24,991    $16,058  


   
   
WEST BANCORPORATION, INC. AND SUBSIDIARY  
Financial Information (continued) (unaudited)        
         
       
  PER COMMON SHARE MARKET INFORMATION (1)
  Net Income      
  Basic Diluted Dividends High Low
2021          
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 June 30, Six Months Ended June 30,
SELECTED FINANCIAL MEASURES 2021 2020 2021 2020
Return on average assets 1.65 % 1.19% 1.59 % 1.23%
Return on average equity 22.20 % 15.68% 21.50 % 15.61%
Net interest margin on a FTE basis (1) 2.99 % 3.27% 3.08 % 3.19%
Efficiency ratio (1)(2) 41.11 % 41.33% 40.43 % 43.41%
         
    As of June 30,
      2021 2020
Texas ratio(2)     5.31 % 0.17%
Allowance for loan losses ratio     1.21 % 0.97%
Allowance for loan losses ratio, excluding PPP loans (1)(3)      1.26 % 1.08%
Tangible common equity ratio     7.54 % 7.62%

(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 June 30, Six Months Ended June 30,
  2021 2020 2021  2020
Reconciliation of net interest income and net interest margin on a FTE basis to GAAP:        
Net interest income (GAAP) $22,850   $20,747  $45,971   $39,211 
Tax-equivalent adjustment (1) 270   194  499   372 
Net interest income on a FTE basis (non-GAAP) 23,120   20,941  46,470   39,583 
Average interest-earning assets 3,102,649   2,572,211  3,041,519   2,496,354 
Net interest margin on a FTE basis (non-GAAP) 2.99 % 3.27% 3.08 % 3.19%
         
Reconciliation of efficiency ratio on an adjusted and FTE basis to GAAP:        
Net interest income on a FTE basis (non-GAAP) $23,120   $20,941  $46,470   $39,583 
Noninterest income 2,515   1,775  4,980   4,295 
Adjustment for realized securities (gains) losses, net (36)  69  (40)  75 
Adjustment for losses on disposal of premises and equipment, net 5   —  29   2 
Adjusted income 25,604   22,785  51,439   43,955 
Noninterest expense 10,526   9,417  20,797   19,080 
Efficiency ratio on an adjusted and FTE basis (non-GAAP) (2) 41.11 % 41.33% 40.43
% 43.41%
         
      As of June 30,
      2021  2020
Reconciliation of allowance for loan losses ratio, excluding PPP loans:          
Loans outstanding (GAAP)     $2,309,527   $2,199,688 
Less: PPP loans     (84,573)  (223,435) 
Loans, net of PPP loans (non-GAAP)     2,224,954   1,976,253 
Allowance for loan losses     28,042   21,363 
Allowance for loan losses ratio, excluding PPP loans (non-GAAP)       1.26 % 1.08%

(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.

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


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Source: West Bancorporation

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