West Bancorporation, Inc. (Nasdaq:WTBA), parent company of West
Bank, today reported 2017 net income of $23.1 million, or $1.41 per
diluted common share, compared to $23.0 million, or $1.42 per
diluted common share for 2016. Net income for 2017 was a record for
the Company, even after recording an additional provision for
income taxes of $2.3 million in the fourth quarter of 2017. The
additional tax provision related to the revaluation of our deferred
tax assets as a result of the tax reform bill signed into law on
December 22, 2017. Net income for the fourth quarter of 2017 was
$4.2 million, or $0.26 per diluted common share. This compares to
fourth quarter 2016 net income of $6.0 million, or $0.37 per
diluted common share. On January 24, 2018, the Company’s Board of
Directors declared a regular quarterly dividend of $0.18 per common
share. The dividend is payable on February 21, 2018, to
stockholders of record on February 7, 2018.
“I am extremely pleased that West
Bancorporation, Inc. has again delivered record results,” commented
Dave Nelson, President and Chief Executive Officer of the Company.
“We believe our earnings performance is evidence of our
community-focused, relationship-driven business model’s success.
The primary driver of our increased earnings continues to be our
overall loan growth. Management remains committed to achieving a
high level of earnings and creating value for our stockholders in
an evolving economic and regulatory environment. We are confident
in the strength of our balance sheet and capital position.”
Brad Winterbottom, West Bank President, said,
“We continue to grow our community banking relationships in all of
our markets. In 2017, deposit balances increased 17.1 percent and
outstanding loan balances grew 7.9 percent. I am particularly
pleased with the 30 percent growth in trust revenues. We believe
our performance reflects the skill of our team and the quality of
the loan portfolio, and that West Bank’s risk management practices
and capital strength continue to position us well for long-term
growth. We approach 2018 with continued confidence in our ability
to cultivate quality relationships and deliver excellent
service.”
Eastern Iowa Market President, Jim Conard,
commented, “The Eastern Iowa market achieved record loan production
in 2017. We attribute our success in recent years to our ability to
bring real value to the people and businesses we serve, and 2017
was no exception. In 2018, we will focus on delivering new and
innovative value propositions to the market. We feel this strategy
is unique, and we invite any business owner or manager to reach out
to us to learn more about how a business relationship with West
Bank can impact their company.”
“We are very pleased with our strong year in
Rochester and plan on carrying that momentum into 2018,” said Mike
Zinser, Rochester Market President. “Year-end loans outstanding in
Rochester increased over 30 percent in 2017, and our deposits
increased over 15 percent for the same period. While nearly all of
our loan growth was from business banking, much of our deposit
growth was from an inflow of personal deposits. New customers are
enjoying our high service, concierge-type personal banking program
which is similar to our business banking model.” Zinser concluded,
“We are providing our customers with a comprehensive and unique
banking experience that continues to drive our strong growth of
loyal customers and market share in Rochester.”
The Company will file its annual report on Form
10-K with the Securities and Exchange Commission on or about March
1, 2018. Please refer to that document for a more in-depth
discussion of our financial results. The Form 10-K will also 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 26, 2018. The telephone number for the
conference call is 888-339-0814. A recording of the call will be
available until February 9, 2018, by dialing 877-344-7529. The
replay passcode is 10115034.
About West Bancorporation, Inc.
(Nasdaq:WTBA)West Bancorporation, Inc. is headquartered in West Des
Moines, Iowa. Serving Iowans 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 metropolitan area, one office in
Iowa City, Iowa, one office in Coralville, Iowa and one office in
Rochester, Minnesota.
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,” “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: 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 or regulatory
requirements; actions of bank and nonbank competitors; changes in
local, national and international economic conditions; changes in
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; and any other risks described in the “Risk
Factors” sections of other 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, 2017 |
|
December 31, 2016 |
Assets |
|
|
|
|
Cash and due from
banks |
|
$ |
34,952 |
|
|
$ |
40,943 |
|
Federal funds sold |
|
12,997 |
|
|
35,893 |
|
Investment securities
available for sale, at fair value |
|
444,219 |
|
|
260,637 |
|
Investment securities
held to maturity, at amortized cost |
|
45,527 |
|
|
48,386 |
|
Federal Home Loan Bank
stock, at cost |
|
9,174 |
|
|
10,771 |
|
Loans |
|
1,510,500 |
|
|
1,399,870 |
|
Allowance
for loan losses |
|
(16,430 |
) |
|
(16,112 |
) |
Loans,
net |
|
1,494,070 |
|
|
1,383,758 |
|
Premises and equipment,
net |
|
23,022 |
|
|
23,314 |
|
Bank-owned life
insurance |
|
33,618 |
|
|
33,111 |
|
Other assets |
|
16,798 |
|
|
17,391 |
|
Total assets |
|
$ |
2,114,377 |
|
|
$ |
1,854,204 |
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
Deposits: |
|
|
|
|
Noninterest-bearing |
|
$ |
395,888 |
|
|
$ |
479,311 |
|
Interest-bearing: |
|
|
|
|
Demand |
|
395,052 |
|
|
282,592 |
|
Savings |
|
850,216 |
|
|
668,688 |
|
Time of
$250 or more |
|
16,965 |
|
|
10,446 |
|
Other
time |
|
152,692 |
|
|
105,568 |
|
Total
deposits |
|
1,810,813 |
|
|
1,546,605 |
|
Short-term
borrowings |
|
545 |
|
|
9,690 |
|
Long-term
borrowings |
|
119,711 |
|
|
125,410 |
|
Other liabilities |
|
5,210 |
|
|
7,123 |
|
Stockholders’
equity |
|
178,098 |
|
|
165,376 |
|
Total liabilities and stockholders’ equity |
|
$ |
2,114,377 |
|
|
$ |
1,854,204 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEST BANCORPORATION, INC. AND SUBSIDIARY |
|
|
|
|
|
|
Financial
Information (continued) (unaudited) |
|
|
|
|
|
|
|
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
CONSOLIDATED STATEMENTS OF INCOME |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
Loans,
including fees |
|
$ |
16,377 |
|
|
$ |
14,752 |
|
|
$ |
63,242 |
|
|
$ |
57,419 |
|
Investment
securities |
|
3,032 |
|
|
1,763 |
|
|
9,461 |
|
|
7,467 |
|
Other |
|
108 |
|
|
50 |
|
|
331 |
|
|
108 |
|
Total interest income |
|
19,517 |
|
|
16,565 |
|
|
73,034 |
|
|
64,994 |
|
Interest expense |
|
|
|
|
|
|
|
|
Deposits |
|
2,538 |
|
|
990 |
|
|
7,622 |
|
|
3,391 |
|
Short-term
borrowings |
|
17 |
|
|
4 |
|
|
99 |
|
|
47 |
|
Long-term
borrowings |
|
1,418 |
|
|
1,146 |
|
|
5,256 |
|
|
4,438 |
|
Total interest expense |
|
3,973 |
|
|
2,140 |
|
|
12,977 |
|
|
7,876 |
|
Net interest income |
|
15,544 |
|
|
14,425 |
|
|
60,057 |
|
|
57,118 |
|
Provision
for loan losses |
|
— |
|
|
100 |
|
|
— |
|
|
1,000 |
|
Net interest income after provision for loan
losses |
|
15,544 |
|
|
14,325 |
|
|
60,057 |
|
|
56,118 |
|
Noninterest income |
|
|
|
|
|
|
|
|
Service
charges on deposit accounts |
|
686 |
|
|
614 |
|
|
2,632 |
|
|
2,461 |
|
Debit card
usage fees |
|
421 |
|
|
453 |
|
|
1,754 |
|
|
1,825 |
|
Trust
services |
|
441 |
|
|
364 |
|
|
1,705 |
|
|
1,310 |
|
Increase in
cash value of bank-owned life insurance |
|
168 |
|
|
155 |
|
|
652 |
|
|
647 |
|
Gain from
bank-owned life insurance |
|
— |
|
|
— |
|
|
307 |
|
|
443 |
|
Realized
investment securities gains (losses), net |
|
(97 |
) |
|
6 |
|
|
326 |
|
|
66 |
|
Other
income |
|
289 |
|
|
338 |
|
|
1,272 |
|
|
1,230 |
|
Total noninterest income |
|
1,908 |
|
|
1,930 |
|
|
8,648 |
|
|
7,982 |
|
Noninterest expense |
|
|
|
|
|
|
|
|
Salaries
and employee benefits |
|
4,417 |
|
|
4,087 |
|
|
17,633 |
|
|
16,731 |
|
Occupancy |
|
1,091 |
|
|
1,061 |
|
|
4,406 |
|
|
4,033 |
|
Data
processing |
|
646 |
|
|
661 |
|
|
2,677 |
|
|
2,510 |
|
FDIC
insurance |
|
163 |
|
|
223 |
|
|
677 |
|
|
937 |
|
Other
expenses |
|
1,715 |
|
|
1,505 |
|
|
6,874 |
|
|
6,937 |
|
Total noninterest expense |
|
8,032 |
|
|
7,537 |
|
|
32,267 |
|
|
31,148 |
|
Income before income taxes |
|
9,420 |
|
|
8,718 |
|
|
36,438 |
|
|
32,952 |
|
Income
taxes |
|
5,226 |
|
|
2,687 |
|
|
13,368 |
|
|
9,936 |
|
Net income |
|
$ |
4,194 |
|
|
$ |
6,031 |
|
|
$ |
23,070 |
|
|
$ |
23,016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEST BANCORPORATION, INC. AND SUBSIDIARY |
|
|
Financial
Information (continued) (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER COMMON SHARE |
|
MARKET INFORMATION (1) |
|
|
Net Income |
|
|
|
|
|
|
|
|
Basic |
|
Diluted |
|
Dividends |
|
High |
|
Low |
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4th Quarter |
|
$ |
0.26 |
|
|
$ |
0.26 |
|
|
$ |
0.18 |
|
|
$ |
28.00 |
|
|
$ |
23.40 |
|
3rd Quarter |
|
0.40 |
|
|
0.39 |
|
|
0.18 |
|
|
24.75 |
|
|
20.90 |
|
2nd Quarter |
|
0.39 |
|
|
0.39 |
|
|
0.18 |
|
|
24.60 |
|
|
21.40 |
|
1st Quarter |
|
0.38 |
|
|
0.37 |
|
|
0.17 |
|
|
24.90 |
|
|
20.60 |
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
4th Quarter |
|
$ |
0.37 |
|
|
$ |
0.37 |
|
|
$ |
0.17 |
|
|
$ |
25.05 |
|
|
$ |
18.75 |
|
3rd Quarter |
|
0.36 |
|
|
0.36 |
|
|
0.17 |
|
|
20.52 |
|
|
17.65 |
|
2nd Quarter |
|
0.34 |
|
|
0.34 |
|
|
0.17 |
|
|
19.65 |
|
|
17.33 |
|
1st Quarter |
|
0.35 |
|
|
0.35 |
|
|
0.16 |
|
|
19.58 |
|
|
16.04 |
|
(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 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Return on average
assets |
|
0.80 |
% |
|
1.30 |
% |
|
1.18 |
% |
|
1.27 |
% |
Return on average
equity |
|
9.31 |
% |
|
14.53 |
% |
|
13.29 |
% |
|
14.35 |
% |
Net interest
margin |
|
3.25 |
% |
|
3.43 |
% |
|
3.37 |
% |
|
3.49 |
% |
Efficiency ratio* |
|
43.81 |
% |
|
44.38 |
% |
|
45.39 |
% |
|
46.03 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
|
|
|
|
|
|
2017 |
|
2016 |
Texas ratio* |
|
|
|
|
|
0.32 |
% |
|
0.56 |
% |
Allowance for loan
losses ratio |
|
|
|
|
|
1.09 |
% |
|
1.15 |
% |
Tangible common equity
ratio |
|
|
|
|
|
8.42 |
% |
|
8.92 |
% |
* A lower ratio is more desirable.
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(1) - annualized tax-equivalent net interest
income divided by average interest-earning assets.
- Efficiency ratio(1) - noninterest expense (excluding other real
estate owned expense) divided by noninterest income (excluding net
securities gains 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.
- Tangible common equity ratio - common equity less intangible
assets (none held) divided by tangible assets.
(1) Non-GAAP measures - see reconciliation below.
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, net interest margin and
efficiency ratio on a fully taxable equivalent (FTE) basis to
GAAP.
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Reconciliation
of net interest income and annualized net interest margin on an FTE
basis to GAAP: |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(GAAP) |
|
$ |
15,544 |
|
|
$ |
14,425 |
|
|
$ |
60,057 |
|
|
$ |
57,118 |
|
Tax-equivalent
adjustment (1) |
|
785 |
|
|
629 |
|
|
2,677 |
|
|
2,623 |
|
Net interest income on
an FTE basis (non-GAAP) |
|
$ |
16,329 |
|
|
$ |
15,054 |
|
|
$ |
62,734 |
|
|
$ |
59,741 |
|
Average
interest-earning assets |
|
$ |
1,990,776 |
|
|
$ |
1,747,080 |
|
|
$ |
1,863,791 |
|
|
$ |
1,711,612 |
|
Net interest margin on
an FTE basis (non-GAAP) |
|
3.25 |
% |
|
3.43 |
% |
|
3.37 |
% |
|
3.49 |
% |
|
|
|
|
|
|
|
|
|
Reconciliation
of efficiency ratio on an FTE basis to GAAP: |
|
|
|
|
|
|
|
|
Net interest income on
an FTE basis (non-GAAP) |
|
$ |
16,329 |
|
|
$ |
15,054 |
|
|
$ |
62,734 |
|
|
$ |
59,741 |
|
Noninterest income |
|
1,908 |
|
|
1,930 |
|
|
8,648 |
|
|
7,982 |
|
Less: realized
investment securities (gains) losses, net |
|
97 |
|
|
(6 |
) |
|
(326 |
) |
|
(66 |
) |
Plus: losses on
disposal of premises and equipment, net |
|
— |
|
|
4 |
|
|
25 |
|
|
4 |
|
Adjusted
income |
|
$ |
18,334 |
|
|
$ |
16,982 |
|
|
$ |
71,081 |
|
|
$ |
67,661 |
|
Noninterest
expense |
|
$ |
8,032 |
|
|
$ |
7,537 |
|
|
$ |
32,267 |
|
|
$ |
31,148 |
|
Efficiency ratio on an
adjusted and FTE basis (non-GAAP) (2) |
|
43.81 |
% |
|
44.38 |
% |
|
45.39 |
% |
|
46.03 |
% |
(1) Computed on a tax-equivalent basis using an
incremental federal income tax rate of 35 percent, adjusted to
reflect the effect of the nondeductible interest expense associated
with owning tax-exempt securities and loans.(2) 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 financial results, as
it enhances the comparability of income and expenses arising from
taxable and nontaxable sources.
For more information contact:Doug Gulling,
Executive Vice President, Treasurer and Chief Financial Officer
(515) 222-2309
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