West Bancorporation, Inc. Announces Record First Quarter Net Income, Declares Quarterly Dividend
West Bancorporation, Inc. (Nasdaq: WTBA) reported a first quarter 2022 net income of $13.2 million, or $0.78 per diluted share, a 12% increase compared to $11.8 million in Q1 2021. The Board declared a quarterly dividend of $0.25 per share, payable on May 25, 2022. The Company recorded a negative provision for loan losses of $750,000, indicating strong loan performance. Total assets grew to $3.5 billion from $3.2 billion year-over-year. Additionally, a new bank in St. Cloud opened in March 2022, reflecting the Company’s expansion plans.
- Net income increased by 12% to $13.2 million.
- Quarterly dividend declared at $0.25 per share.
- Total assets rose to $3.5 billion, up from $3.2 billion.
- Negative provision for loan losses indicates strong credit quality.
- None.
WEST DES MOINES, Iowa, April 28, 2022 (GLOBE NEWSWIRE) -- West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent company of West Bank, today reported first quarter 2022 net income of
The Company recorded a negative provision for loan losses of
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 | 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
FAQ
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