West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent
company of West Bank, today reported third quarter 2022 net income
of $11.6 million, or $0.69 per diluted common share, compared to
third quarter 2021 net income of $12.7 million, or $0.76 per
diluted common share. For the first nine months of 2022, net income
was $37.5 million, or $2.23 per diluted common share, compared to
$37.7 million, or $2.25 per diluted common share, for the first
nine months of 2021. On October 26, 2022, the Company’s Board of
Directors declared a regular quarterly dividend of $0.25 per common
share. The dividend is payable on November 23, 2022, to
stockholders of record on November 9, 2022.
David Nelson, President and Chief Executive
Officer of the Company, commented, “Our company had another strong
quarter. Our credit quality remains pristine and we continue to see
opportunities for high quality loan growth, although at a slower
pace than we experienced the last few quarters. We remain diligent
in monitoring and managing our credit quality as we anticipate
increasing economic challenges as the Federal Reserve aggressively
seeks to reduce inflation by raising interest rates. Our bankers
are working hard every day to assist our customers and communities
in navigating the current economic and interest rate uncertainties.
For the fifth consecutive quarter end, we had no loans greater than
30 days past due.”
David Nelson added, “While the yield on our loan
portfolio is increasing, changes in liquidity and competitive
deposit pricing, resulting from volatility and uncertainty in the
interest rate environment, has put upward pressure on our cost of
funds. Our capital position is strong and we remain focused on our
highly successful core business model to continue building
shareholder value.”
Third Quarter 2022 Financial
Highlights
|
Return on Average Equity |
21.01 |
% |
|
Return on Average Assets |
1.32 |
% |
|
Efficiency ratio (a non-GAAP
measure) |
43.16 |
% |
|
Nonperforming assets to total
assets |
0.01 |
% |
|
|
|
|
Third Quarter 2022 Compared to Second
Quarter 2022 Overview
- No provision for loan losses was
recorded in the third quarter of 2022, compared to a negative
provision for loan losses of $1.75 million in the second quarter of
2022. The negative provision in the second quarter of 2022 was due
primarily to the reversal of a specific reserve on an impaired
loan. The impaired loan, which had a specific reserve of $2.5
million, was settled in the second quarter of 2022 resulting in a
charge-off of $451 thousand.
- The allowance for loan losses to
total loans was 0.97 percent at September 30, 2022, compared to
0.99 percent at June 30, 2022. There were no loans greater than 30
days past due at September 30, 2022, for the fifth consecutive
quarter. Nonaccrual loans at September 30, 2022 consisted of one
loan with a balance of $329 thousand.
- Loan swap fees of $835 thousand
were recorded in the third quarter of 2022, compared to none in the
second quarter of 2022.
- Loans increased $41.0 million in
the third quarter of 2022, or 6.3 percent annualized.
- Deposits decreased $19.6 million in
the third quarter of 2022. Included in deposits were brokered
deposits totaling $258.1 million at September 30, 2022, compared to
$196.5 million at June 30, 2022.
- The efficiency ratio (a non-GAAP
measure) was 43.16 percent for the third quarter of 2022, compared
to 41.96 percent for the second quarter of 2022.
- Net interest margin, on a fully
tax-equivalent basis (a non-GAAP measure), was 2.78 percent for the
third quarter of 2022, compared to 2.93 percent for the second
quarter of 2022. Net interest income for the third quarter of 2022
was $23.0 million, compared to $24.2 million for the second quarter
of 2022. The rising cost of deposits and borrowed funds and the
change in mix of liabilities has increased interest expense faster
than the increase in the interest income from loan repricing and
loan growth.
- The tangible common equity ratio
was 5.65 percent at September 30, 2022, a decrease of 43 basis
points compared to 6.22 percent at June 30, 2022 due to continued
decline in the market value of the securities portfolio resulting
from rising interest rates, which negatively impacts accumulated
other comprehensive income.
Third Quarter 2022 Compared to Third
Quarter 2021 Overview
- Loans increased $254.6 million at
September 30, 2022, or 10.8 percent, compared to September 30,
2021.
- Deposits increased $85.9 million at
September 30, 2022, compared to September 30, 2021. Included in
deposits were brokered deposits totaling $258.1 million at
September 30, 2022, compared to $103.0 million at September 30,
2021.
- Borrowed funds increased to $460.3
million at September 30, 2022, compared to $202.5 million at
September 30, 2021. The increase included $58.9 million in
subordinated notes that were issued in June 2022, $33.8 million in
long-term debt that was issued in December 2021 and $165.1 million
in federal funds purchased.
- The efficiency ratio (a non-GAAP
measure) was 43.16 percent for the third quarter of 2022, compared
to 39.41 percent for the third quarter of 2021. Salaries and
benefits were higher in the third quarter of 2022, compared to the
third quarter of 2021, due to a higher number of full-time
equivalent employees and annual compensation adjustments.
- Net interest margin, on a fully
tax-equivalent basis (a non-GAAP measure), was 2.78 percent for the
third quarter of 2022, compared to 3.06 percent for the third
quarter of 2021. Net interest income for the third quarter of 2022
was $23.0 million, compared to $24.5 million for the third quarter
of 2021. Net interest income in the third quarter of 2021 included
$1.6 million of PPP loan interest income, compared to $101 thousand
in the third quarter of 2022. In 2022, the rising cost of deposits
and borrowed funds and the change in mix of liabilities has
increased interest expense faster than the increase in the interest
income from loan repricing and loan growth.
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 results in a
conference call scheduled for 2:00 p.m. Central Time on Thursday,
October 27, 2022. The telephone number for the conference call is
844-200-6205. The access code for the conference call is 014998. A
recording of the call will be available until November 10, 2022, by
dialing 866-813-9403. The replay access code is 419470.
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 six 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: interest rate risk, including
the effects of recent rate increases by the Federal Reserve;
fluctuations in the values of the securities held in our investment
portfolio, including as a result of rising interest rates;
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
portfolio, 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; 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; talent and labor
shortages; the new 1% excise tax on stock buybacks by publicly
traded companies; 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) |
|
|
|
|
|
|
|
|
|
|
|
|
As of |
CONDENSED BALANCE SHEETS |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
Assets |
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
58,342 |
|
|
$ |
26,174 |
|
|
$ |
21,896 |
|
|
$ |
17,555 |
|
|
$ |
30,922 |
|
Federal funds sold |
|
|
1,049 |
|
|
|
766 |
|
|
|
122,359 |
|
|
|
175,270 |
|
|
|
1,547 |
|
Securities available for sale,
at fair value |
|
|
671,752 |
|
|
|
731,970 |
|
|
|
797,912 |
|
|
|
758,822 |
|
|
|
763,397 |
|
Federal Home Loan Bank stock,
at cost |
|
|
18,350 |
|
|
|
15,532 |
|
|
|
10,269 |
|
|
|
9,965 |
|
|
|
11,544 |
|
Loans |
|
|
2,614,145 |
|
|
|
2,573,129 |
|
|
|
2,485,366 |
|
|
|
2,456,196 |
|
|
|
2,359,567 |
|
Allowance for loan losses |
|
|
(25,418 |
) |
|
|
(25,434 |
) |
|
|
(27,623 |
) |
|
|
(28,364 |
) |
|
|
(28,098 |
) |
Loans, net |
|
|
2,588,727 |
|
|
|
2,547,695 |
|
|
|
2,457,743 |
|
|
|
2,427,832 |
|
|
|
2,331,469 |
|
Premises and equipment,
net |
|
|
44,592 |
|
|
|
41,807 |
|
|
|
40,898 |
|
|
|
34,568 |
|
|
|
33,287 |
|
Bank-owned life insurance |
|
|
44,318 |
|
|
|
44,072 |
|
|
|
43,836 |
|
|
|
43,609 |
|
|
|
43,376 |
|
Other assets |
|
|
90,387 |
|
|
|
66,775 |
|
|
|
52,156 |
|
|
|
32,580 |
|
|
|
34,158 |
|
Total assets |
|
$ |
3,517,517 |
|
|
$ |
3,474,791 |
|
|
$ |
3,547,069 |
|
|
$ |
3,500,201 |
|
|
$ |
3,249,700 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
$ |
2,822,847 |
|
|
$ |
2,842,451 |
|
|
$ |
3,091,252 |
|
|
$ |
3,016,005 |
|
|
$ |
2,736,923 |
|
Federal funds purchased |
|
|
204,500 |
|
|
|
133,000 |
|
|
|
— |
|
|
|
2,880 |
|
|
|
39,380 |
|
Other borrowings |
|
|
255,789 |
|
|
|
255,751 |
|
|
|
196,954 |
|
|
|
196,986 |
|
|
|
163,116 |
|
Other liabilities |
|
|
35,617 |
|
|
|
27,400 |
|
|
|
22,383 |
|
|
|
24,002 |
|
|
|
57,905 |
|
Stockholders’ equity |
|
|
198,764 |
|
|
|
216,189 |
|
|
|
236,480 |
|
|
|
260,328 |
|
|
|
252,376 |
|
Total liabilities and stockholders’ equity |
|
$ |
3,517,517 |
|
|
$ |
3,474,791 |
|
|
$ |
3,547,069 |
|
|
$ |
3,500,201 |
|
|
$ |
3,249,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended |
AVERAGE BALANCES |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
Assets |
|
$ |
3,475,894 |
|
|
$ |
3,503,686 |
|
|
$ |
3,544,564 |
|
|
$ |
3,421,020 |
|
|
$ |
3,325,522 |
|
Loans |
|
|
2,579,862 |
|
|
|
2,537,152 |
|
|
|
2,449,521 |
|
|
|
2,379,872 |
|
|
|
2,337,355 |
|
Deposits |
|
|
2,864,648 |
|
|
|
3,002,535 |
|
|
|
3,067,019 |
|
|
|
2,964,585 |
|
|
|
2,874,005 |
|
Stockholders’ equity |
|
|
219,065 |
|
|
|
222,731 |
|
|
|
255,130 |
|
|
|
255,224 |
|
|
|
251,770 |
|
WEST
BANCORPORATION, INC. AND SUBSIDIARY |
|
|
|
|
|
|
Financial Information
(unaudited) |
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
As of |
ANALYSIS OF LOAN PORTFOLIO |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
Loan mix: |
|
|
|
|
|
|
|
|
|
|
Commercial |
|
$ |
526,336 |
|
|
$ |
475,704 |
|
|
$ |
466,874 |
|
|
$ |
492,815 |
|
|
$ |
491,344 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
Construction, land and land development |
|
|
341,549 |
|
|
|
390,137 |
|
|
|
388,424 |
|
|
|
359,258 |
|
|
|
325,655 |
|
1-4 family residential first mortgages |
|
|
69,991 |
|
|
|
69,829 |
|
|
|
65,978 |
|
|
|
66,216 |
|
|
|
63,881 |
|
Home equity |
|
|
10,271 |
|
|
|
8,564 |
|
|
|
9,213 |
|
|
|
8,422 |
|
|
|
8,993 |
|
Commercial |
|
|
1,661,907 |
|
|
|
1,627,150 |
|
|
|
1,555,001 |
|
|
|
1,530,218 |
|
|
|
1,471,170 |
|
Consumer and other |
|
|
7,884 |
|
|
|
5,912 |
|
|
|
4,068 |
|
|
|
3,797 |
|
|
|
3,698 |
|
|
|
|
2,617,938 |
|
|
|
2,577,296 |
|
|
|
2,489,558 |
|
|
|
2,460,726 |
|
|
|
2,364,741 |
|
Net unamortized fees and costs |
|
|
(3,793 |
) |
|
|
(4,167 |
) |
|
|
(4,192 |
) |
|
|
(4,530 |
) |
|
|
(5,174 |
) |
Total loans |
|
$ |
2,614,145 |
|
|
$ |
2,573,129 |
|
|
$ |
2,485,366 |
|
|
$ |
2,456,196 |
|
|
$ |
2,359,567 |
|
Less allowance for loan losses |
|
|
(25,418 |
) |
|
|
(25,434 |
) |
|
|
(27,623 |
) |
|
|
(28,364 |
) |
|
|
(28,098 |
) |
Net
loans |
|
$ |
2,588,727 |
|
|
$ |
2,547,695 |
|
|
$ |
2,457,743 |
|
|
$ |
2,427,832 |
|
|
$ |
2,331,469 |
|
|
|
|
|
|
|
|
|
|
|
|
ANALYSIS OF DEPOSITS |
|
|
|
|
|
|
|
|
|
|
Deposit mix: |
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand |
|
$ |
712,722 |
|
|
$ |
690,335 |
|
|
$ |
710,697 |
|
|
$ |
720,136 |
|
|
$ |
713,076 |
|
Interest-bearing demand |
|
|
469,257 |
|
|
|
472,919 |
|
|
|
554,235 |
|
|
|
548,242 |
|
|
|
458,165 |
|
Savings and money market |
|
|
1,252,694 |
|
|
|
1,360,020 |
|
|
|
1,632,690 |
|
|
|
1,550,636 |
|
|
|
1,379,321 |
|
Time |
|
|
388,174 |
|
|
|
319,177 |
|
|
|
193,630 |
|
|
|
196,991 |
|
|
|
186,361 |
|
Total
deposits |
|
$ |
2,822,847 |
|
|
$ |
2,842,451 |
|
|
$ |
3,091,252 |
|
|
$ |
3,016,005 |
|
|
$ |
2,736,923 |
|
|
|
|
|
|
|
|
|
|
|
|
ANALYSIS OF BORROWINGS |
|
|
|
|
|
|
|
|
|
|
Borrowings mix: |
|
|
|
|
|
|
|
|
|
|
Federal funds purchased |
|
$ |
204,500 |
|
|
$ |
133,000 |
|
|
$ |
— |
|
|
$ |
2,880 |
|
|
$ |
39,380 |
|
Subordinated notes, net |
|
|
79,303 |
|
|
|
79,265 |
|
|
|
20,468 |
|
|
|
20,465 |
|
|
|
20,462 |
|
Federal Home Loan Bank advances |
|
|
125,000 |
|
|
|
125,000 |
|
|
|
125,000 |
|
|
|
125,000 |
|
|
|
125,000 |
|
Long-term debt |
|
|
51,486 |
|
|
|
51,486 |
|
|
|
51,486 |
|
|
|
51,521 |
|
|
|
17,654 |
|
Total
borrowings |
|
$ |
460,289 |
|
|
$ |
388,751 |
|
|
$ |
196,954 |
|
|
$ |
199,866 |
|
|
$ |
202,496 |
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
Preferred stock |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Common stock |
|
|
3,000 |
|
|
|
3,000 |
|
|
|
3,000 |
|
|
|
3,000 |
|
|
|
3,000 |
|
Additional paid-in
capital |
|
|
31,152 |
|
|
|
30,283 |
|
|
|
29,421 |
|
|
|
30,183 |
|
|
|
29,536 |
|
Retained earnings |
|
|
262,776 |
|
|
|
255,334 |
|
|
|
246,827 |
|
|
|
237,782 |
|
|
|
229,845 |
|
Accumulated other
comprehensive loss |
|
|
(98,164 |
) |
|
|
(72,428 |
) |
|
|
(42,768 |
) |
|
|
(10,637 |
) |
|
|
(10,005 |
) |
Total Stockholders’
Equity |
|
$ |
198,764 |
|
|
$ |
216,189 |
|
|
$ |
236,480 |
|
|
$ |
260,328 |
|
|
$ |
252,376 |
|
WEST
BANCORPORATION, INC. AND SUBSIDIARY |
|
|
|
|
|
|
|
|
Financial Information
(unaudited) |
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended |
CONSOLIDATED STATEMENTS OF INCOME |
|
September 30,2022 |
|
June 30,2022 |
|
March 31,2022 |
|
December 31,2021 |
|
September 30,2021 |
Interest income: |
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
28,102 |
|
$ |
24,848 |
|
|
$ |
23,286 |
|
|
$ |
24,179 |
|
$ |
24,229 |
Securities: |
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
3,147 |
|
|
3,090 |
|
|
|
2,889 |
|
|
|
2,590 |
|
|
2,412 |
Tax-exempt |
|
|
890 |
|
|
892 |
|
|
|
858 |
|
|
|
829 |
|
|
762 |
Federal funds sold |
|
|
30 |
|
|
67 |
|
|
|
82 |
|
|
|
66 |
|
|
82 |
Total interest income |
|
|
32,169 |
|
|
28,897 |
|
|
|
27,115 |
|
|
|
27,664 |
|
|
27,485 |
Interest expense: |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
6,289 |
|
|
3,146 |
|
|
|
2,151 |
|
|
|
2,055 |
|
|
2,021 |
Federal funds purchased |
|
|
655 |
|
|
157 |
|
|
|
— |
|
|
|
1 |
|
|
2 |
Subordinated notes |
|
|
1,106 |
|
|
394 |
|
|
|
248 |
|
|
|
254 |
|
|
254 |
Federal Home Loan Bank advances |
|
|
649 |
|
|
635 |
|
|
|
630 |
|
|
|
656 |
|
|
656 |
Long-term debt |
|
|
466 |
|
|
326 |
|
|
|
258 |
|
|
|
96 |
|
|
66 |
Total interest expense |
|
|
9,165 |
|
|
4,658 |
|
|
|
3,287 |
|
|
|
3,062 |
|
|
2,999 |
Net interest income |
|
|
23,004 |
|
|
24,239 |
|
|
|
23,828 |
|
|
|
24,602 |
|
|
24,486 |
Provision for loan losses |
|
|
— |
|
|
(1,750 |
) |
|
|
(750 |
) |
|
|
— |
|
|
— |
Net interest income after provision for loan
losses |
|
|
23,004 |
|
|
25,989 |
|
|
|
24,578 |
|
|
|
24,602 |
|
|
24,486 |
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
|
|
553 |
|
|
585 |
|
|
|
580 |
|
|
|
603 |
|
|
589 |
Debit card usage fees |
|
|
498 |
|
|
507 |
|
|
|
472 |
|
|
|
505 |
|
|
490 |
Trust services |
|
|
780 |
|
|
622 |
|
|
|
629 |
|
|
|
633 |
|
|
695 |
Increase in cash value of bank-owned life insurance |
|
|
246 |
|
|
236 |
|
|
|
227 |
|
|
|
233 |
|
|
230 |
Loan swap fees |
|
|
835 |
|
|
— |
|
|
|
— |
|
|
|
24 |
|
|
— |
Realized securities gains, net |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
11 |
Other income |
|
|
364 |
|
|
328 |
|
|
|
481 |
|
|
|
350 |
|
|
386 |
Total noninterest income |
|
|
3,276 |
|
|
2,278 |
|
|
|
2,389 |
|
|
|
2,348 |
|
|
2,401 |
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
6,578 |
|
|
6,410 |
|
|
|
6,298 |
|
|
|
5,928 |
|
|
6,018 |
Occupancy |
|
|
1,315 |
|
|
1,242 |
|
|
|
1,086 |
|
|
|
1,532 |
|
|
1,203 |
Data processing |
|
|
644 |
|
|
656 |
|
|
|
624 |
|
|
|
630 |
|
|
616 |
FDIC insurance |
|
|
127 |
|
|
289 |
|
|
|
337 |
|
|
|
460 |
|
|
528 |
Professional fees |
|
|
250 |
|
|
202 |
|
|
|
217 |
|
|
|
183 |
|
|
212 |
Director fees |
|
|
209 |
|
|
222 |
|
|
|
168 |
|
|
|
184 |
|
|
176 |
Other expenses |
|
|
2,335 |
|
|
2,245 |
|
|
|
1,932 |
|
|
|
2,954 |
|
|
1,959 |
Total noninterest expense |
|
|
11,458 |
|
|
11,266 |
|
|
|
10,662 |
|
|
|
11,871 |
|
|
10,712 |
Income before income taxes |
|
|
14,822 |
|
|
17,001 |
|
|
|
16,305 |
|
|
|
15,079 |
|
|
16,175 |
Income taxes |
|
|
3,220 |
|
|
4,334 |
|
|
|
3,121 |
|
|
|
3,169 |
|
|
3,469 |
Net income |
|
$ |
11,602 |
|
$ |
12,667 |
|
|
$ |
13,184 |
|
|
$ |
11,910 |
|
$ |
12,706 |
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common
share |
|
$ |
0.70 |
|
$ |
0.76 |
|
|
$ |
0.80 |
|
|
$ |
0.72 |
|
$ |
0.77 |
Diluted earnings per common
share |
|
$ |
0.69 |
|
$ |
0.75 |
|
|
$ |
0.78 |
|
|
$ |
0.71 |
|
$ |
0.76 |
WEST
BANCORPORATION, INC. AND SUBSIDIARY |
|
|
Financial Information
(unaudited) |
|
|
|
|
(in thousands) |
|
|
|
|
|
|
For the Nine Months Ended |
CONSOLIDATED STATEMENTS OF INCOME |
|
September 30, 2022 |
|
September 30, 2021 |
Interest income: |
|
|
|
|
Loans, including fees |
|
$ |
76,236 |
|
|
$ |
71,406 |
|
Securities: |
|
|
|
|
Taxable |
|
|
9,126 |
|
|
|
5,952 |
|
Tax-exempt |
|
|
2,640 |
|
|
|
2,032 |
|
Federal funds sold |
|
|
179 |
|
|
|
226 |
|
Total interest income |
|
|
88,181 |
|
|
|
79,616 |
|
Interest expense: |
|
|
|
|
Deposits |
|
|
11,586 |
|
|
|
5,893 |
|
Federal funds purchased |
|
|
812 |
|
|
|
4 |
|
Subordinated notes |
|
|
1,748 |
|
|
|
754 |
|
Federal Home Loan Bank advances |
|
|
1,914 |
|
|
|
2,288 |
|
Long-term debt |
|
|
1,050 |
|
|
|
220 |
|
Total interest expense |
|
|
17,110 |
|
|
|
9,159 |
|
Net interest income |
|
|
71,071 |
|
|
|
70,457 |
|
Provision for loan losses |
|
|
(2,500 |
) |
|
|
(1,500 |
) |
Net interest income after provision for loan
losses |
|
|
73,571 |
|
|
|
71,957 |
|
Noninterest income: |
|
|
|
|
Service charges on deposit accounts |
|
|
1,718 |
|
|
|
1,749 |
|
Debit card usage fees |
|
|
1,477 |
|
|
|
1,443 |
|
Trust services |
|
|
2,031 |
|
|
|
2,038 |
|
Increase in cash value of bank-owned life insurance |
|
|
709 |
|
|
|
690 |
|
Loan swap fees |
|
|
835 |
|
|
|
42 |
|
Realized securities gains, net |
|
|
— |
|
|
|
51 |
|
Other income |
|
|
1,173 |
|
|
|
1,368 |
|
Total noninterest income |
|
|
7,943 |
|
|
|
7,381 |
|
Noninterest expense: |
|
|
|
|
Salaries and employee benefits |
|
|
19,286 |
|
|
|
17,298 |
|
Occupancy |
|
|
3,643 |
|
|
|
3,630 |
|
Data processing |
|
|
1,924 |
|
|
|
1,835 |
|
FDIC insurance |
|
|
753 |
|
|
|
1,358 |
|
Professional fees |
|
|
669 |
|
|
|
763 |
|
Director fees |
|
|
599 |
|
|
|
581 |
|
Other expenses |
|
|
6,512 |
|
|
|
6,044 |
|
Total noninterest expense |
|
|
33,386 |
|
|
|
31,509 |
|
Income before income taxes |
|
|
48,128 |
|
|
|
47,829 |
|
Income taxes |
|
|
10,675 |
|
|
|
10,132 |
|
Net income |
|
$ |
37,453 |
|
|
$ |
37,697 |
|
|
|
|
|
|
Basic earnings per common
share |
|
$ |
2.25 |
|
|
$ |
2.28 |
|
Diluted earnings per common
share |
|
$ |
2.23 |
|
|
$ |
2.25 |
|
WEST
BANCORPORATION, INC. AND SUBSIDIARY |
|
|
|
|
|
|
Financial Information
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for the Quarter Ended |
|
For the Nine Months Ended |
COMMON SHARE DATA |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
|
September 30, 2022 |
|
September 30, 2021 |
Earnings per common share (basic) |
|
$ |
0.70 |
|
|
$ |
0.76 |
|
|
$ |
0.80 |
|
|
$ |
0.72 |
|
|
$ |
0.77 |
|
|
$ |
2.25 |
|
|
$ |
2.28 |
|
Earnings per common share
(diluted) |
|
|
0.69 |
|
|
|
0.75 |
|
|
|
0.78 |
|
|
|
0.71 |
|
|
|
0.76 |
|
|
|
2.23 |
|
|
|
2.25 |
|
Dividends per common
share |
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.24 |
|
|
|
0.24 |
|
|
|
0.75 |
|
|
|
0.70 |
|
Book value per common
share(1) |
|
|
11.94 |
|
|
|
12.99 |
|
|
|
14.22 |
|
|
|
15.73 |
|
|
|
15.24 |
|
|
|
|
|
Closing stock price |
|
|
20.81 |
|
|
|
24.34 |
|
|
|
27.21 |
|
|
|
31.07 |
|
|
|
30.03 |
|
|
|
|
|
Market price/book
value(2) |
|
|
174.29 |
% |
|
|
187.37 |
% |
|
|
191.35 |
% |
|
|
197.52 |
% |
|
|
197.05 |
% |
|
|
|
|
Price earnings ratio(3) |
|
|
7.49 |
% |
|
|
7.98 |
% |
|
|
8.39 |
% |
|
|
10.88 |
% |
|
|
9.83 |
% |
|
|
|
|
Annualized dividend
yield(4) |
|
|
4.81 |
% |
|
|
4.11 |
% |
|
|
3.68 |
% |
|
|
3.89 |
% |
|
|
3.20 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REGULATORY CAPITAL RATIOS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total risk-based capital
ratio |
|
|
12.34 |
% |
|
|
12.53 |
% |
|
|
10.72 |
% |
|
|
10.89 |
% |
|
|
11.12 |
% |
|
|
|
|
Tier 1 risk-based capital
ratio |
|
|
9.72 |
|
|
|
9.81 |
|
|
|
9.81 |
|
|
|
9.92 |
|
|
|
10.11 |
|
|
|
|
|
Tier 1 leverage capital
ratio |
|
|
8.85 |
|
|
|
8.59 |
|
|
|
8.39 |
|
|
|
8.49 |
|
|
|
8.51 |
|
|
|
|
|
Common equity tier 1
ratio |
|
|
9.11 |
|
|
|
9.17 |
|
|
|
9.16 |
|
|
|
9.24 |
|
|
|
9.40 |
|
|
|
|
|
West
Bank: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total risk-based capital
ratio |
|
|
13.38 |
% |
|
|
13.62 |
% |
|
|
11.88 |
% |
|
|
12.10 |
% |
|
|
11.18 |
% |
|
|
|
|
Tier 1 risk-based capital
ratio |
|
|
12.60 |
|
|
|
12.81 |
|
|
|
10.98 |
|
|
|
11.13 |
|
|
|
10.17 |
|
|
|
|
|
Tier 1 leverage capital
ratio |
|
|
11.47 |
|
|
|
11.22 |
|
|
|
9.39 |
|
|
|
9.53 |
|
|
|
8.56 |
|
|
|
|
|
Common equity tier 1
ratio |
|
|
12.60 |
|
|
|
12.81 |
|
|
|
10.98 |
|
|
|
11.13 |
|
|
|
10.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KEY PERFORMANCE RATIOS AND OTHER METRICS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets(5) |
|
|
1.32 |
% |
|
|
1.45 |
% |
|
|
1.51 |
% |
|
|
1.38 |
% |
|
|
1.52 |
% |
|
|
1.43 |
% |
|
|
1.56 |
% |
Return on average
equity(6) |
|
|
21.01 |
|
|
|
22.81 |
|
|
|
20.96 |
|
|
|
18.51 |
|
|
|
20.02 |
|
|
|
21.57 |
|
|
|
20.98 |
|
Net interest
margin(7)(13) |
|
|
2.78 |
|
|
|
2.93 |
|
|
|
2.85 |
|
|
|
3.00 |
|
|
|
3.06 |
|
|
|
2.85 |
|
|
|
3.07 |
|
Yield on interest-earning
assets(8) |
|
|
3.87 |
|
|
|
3.49 |
|
|
|
3.24 |
|
|
|
3.36 |
|
|
|
3.43 |
|
|
|
3.53 |
|
|
|
3.47 |
|
Cost of interest-bearing
liabilities |
|
|
1.45 |
|
|
|
0.73 |
|
|
|
0.52 |
|
|
|
0.50 |
|
|
|
0.51 |
|
|
|
0.90 |
|
|
|
0.55 |
|
Efficiency ratio(9)(13) |
|
|
43.16 |
|
|
|
41.96 |
|
|
|
40.14 |
|
|
|
43.32 |
|
|
|
39.41 |
|
|
|
41.75 |
|
|
|
40.08 |
|
Non-performing assets to total
assets(10) |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.25 |
|
|
|
0.26 |
|
|
|
0.28 |
|
|
|
|
|
ALLL ratio(11) |
|
|
0.97 |
|
|
|
0.99 |
|
|
|
1.11 |
|
|
|
1.15 |
|
|
|
1.19 |
|
|
|
|
|
Loans/total assets |
|
|
74.32 |
|
|
|
74.05 |
|
|
|
70.07 |
|
|
|
70.17 |
|
|
|
72.61 |
|
|
|
|
|
Loans/total deposits |
|
|
92.61 |
|
|
|
90.53 |
|
|
|
80.40 |
|
|
|
81.44 |
|
|
|
86.21 |
|
|
|
|
|
Tangible common equity
ratio(12) |
|
|
5.65 |
|
|
|
6.22 |
|
|
|
6.67 |
|
|
|
7.44 |
|
|
|
7.77 |
|
|
|
|
|
(1) Includes accumulated other comprehensive
income (loss).(2) Closing stock price divided by book value per
common share. (3) Closing stock price divided by annualized
earnings per common share (basic).(4) Annualized dividend divided
by period end closing stock price.(5) Annualized net income divided
by average assets. (6) Annualized net income divided by average
stockholders’ equity.(7) Annualized tax-equivalent net interest
income divided by average interest-earning assets.(8) Annualized
tax-equivalent interest income on interest-earning assets divided
by average interest-earning assets.(9) Noninterest expense
(excluding other real estate owned expense and write-down of
premises) divided by noninterest income (excluding net securities
gains/losses and gains/losses on disposition of premises and
equipment) plus tax-equivalent net interest income. (10) Total
nonperforming assets divided by total assets. (11) Allowance for
loan losses divided by total
loans. (12) Common
equity less intangible assets (none held) divided by tangible
assets. (13) A non-GAAP measure.
NON-GAAP FINANCIAL MEASURES
This report contains references to financial
measures that are not defined in GAAP. Such non-GAAP financial
measures include the Company’s presentation of net interest income
and net interest margin on a fully taxable equivalent (FTE) basis
and the presentation of the efficiency ratio on an adjusted and FTE
basis, excluding certain income and expenses. Management believes
these non-GAAP financial measures provide useful information to
both management and investors to analyze and evaluate the Company’s
financial performance. These measures are considered standard
measures of comparison within the banking industry. Additionally,
management believes providing measures on a FTE basis enhances the
comparability of income arising from taxable and nontaxable
sources. Limitations associated with non-GAAP financial measures
include the risks that persons might disagree as to the
appropriateness of items included in these measures and that
different companies might calculate these measures differently.
These non-GAAP disclosures should not be considered an alternative
to the Company’s GAAP results. The following table reconciles the
non-GAAP financial measures of net interest income and net interest
margin on a fully taxable equivalent basis and efficiency ratio on
an adjusted and FTE basis.
(in thousands) |
|
As of and for the Quarter Ended |
|
For the Nine Months Ended |
|
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
|
September 30, 2022 |
|
September 30, 2021 |
Reconciliation of net interest income and net interest
margin on a FTE basis to GAAP: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (GAAP) |
|
$ |
23,004 |
|
|
$ |
24,239 |
|
|
$ |
23,828 |
|
|
$ |
24,602 |
|
|
$ |
24,486 |
|
|
$ |
71,071 |
|
|
$ |
70,457 |
|
Tax-equivalent
adjustment(1) |
|
|
270 |
|
|
|
326 |
|
|
|
329 |
|
|
|
397 |
|
|
|
306 |
|
|
|
925 |
|
|
|
805 |
|
Net interest income on a FTE basis (non-GAAP) |
|
|
23,274 |
|
|
|
24,565 |
|
|
|
24,157 |
|
|
|
24,999 |
|
|
|
24,792 |
|
|
|
71,996 |
|
|
|
71,262 |
|
Average interest-earning
assets |
|
|
3,322,522 |
|
|
|
3,362,313 |
|
|
|
3,432,114 |
|
|
|
3,309,625 |
|
|
|
3,212,283 |
|
|
|
3,371,915 |
|
|
|
3,099,066 |
|
Net interest margin on a FTE
basis (non-GAAP) |
|
|
2.78 |
% |
|
|
2.93 |
% |
|
|
2.85 |
% |
|
|
3.00 |
% |
|
|
3.06 |
% |
|
|
2.85 |
% |
|
|
3.07 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of efficiency ratio on an adjusted and FTE
basis to GAAP: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income on a FTE
basis (non-GAAP) |
|
$ |
23,274 |
|
|
$ |
24,565 |
|
|
$ |
24,157 |
|
|
$ |
24,999 |
|
|
$ |
24,792 |
|
|
$ |
71,996 |
|
|
$ |
71,262 |
|
Noninterest income |
|
|
3,276 |
|
|
|
2,278 |
|
|
|
2,389 |
|
|
|
2,348 |
|
|
|
2,401 |
|
|
|
7,943 |
|
|
|
7,381 |
|
Adjustment for realized securities gains, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(11 |
) |
|
|
— |
|
|
|
(51 |
) |
Adjustment for losses on disposal of premises and equipment,
net |
|
|
— |
|
|
|
9 |
|
|
|
18 |
|
|
|
55 |
|
|
|
— |
|
|
|
27 |
|
|
|
29 |
|
Adjusted income |
|
|
26,550 |
|
|
|
26,852 |
|
|
|
26,564 |
|
|
|
27,402 |
|
|
|
27,182 |
|
|
|
79,966 |
|
|
|
78,621 |
|
Noninterest expense |
|
|
11,458 |
|
|
|
11,266 |
|
|
|
10,662 |
|
|
|
11,871 |
|
|
|
10,712 |
|
|
|
33,386 |
|
|
|
31,509 |
|
Efficiency ratio on an
adjusted and FTE basis (non-GAAP)(2) |
|
|
43.16 |
% |
|
|
41.96 |
% |
|
|
40.14 |
% |
|
|
43.32 |
% |
|
|
39.41 |
% |
|
|
41.75 |
% |
|
|
40.08 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. A
lower ratio is more desirable.
For more information contact:Jane Funk, Executive Vice
President, Treasurer and Chief Financial Officer (515) 222-5766
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