West Bancorporation, Inc. (Nasdaq:WTBA) (the “Company”), parent
company of West Bank, today reported that second quarter 2018 net
income was $6.8 million, or $0.41 per diluted common share.
This compares to second quarter 2017 net income of $6.4 million, or
$0.39 per diluted common share. On July 25, 2018, the Company’s
Board of Directors declared a regular quarterly dividend of $0.20
per common share. The dividend is payable on August 22, 2018,
to stockholders of record on August 8, 2018.
For the first six months of 2018, net income was
$14.1 million, or $0.86 per diluted common share, up from $12.5
million, or $0.76 per diluted common share, for the first six
months of 2017.
“Our second quarter financial results for 2018
were solid,” commented Dave Nelson, President and Chief Executive
Officer of the Company. “Year-over-year earnings growth
benefited from the lower corporate tax rate but was tempered by
rising interest rates and the resulting increased cost of
funds. We remain optimistic about the remainder of the year
and are proud to celebrate West Bank’s 125th anniversary in
2018. Management remains deeply committed to serving our
customers, communities and stockholders.”
Brad Winterbottom, West Bank President, said,
“We continue to see strong growth opportunities in all the markets
we serve. We believe the Bank is well positioned with solid
growth, asset quality and capital levels, and an experienced and
seasoned team. The current environment, though, is not
without its challenges given the flat yield curve and a very
competitive lending environment. We look to the remainder of
2018 with enthusiasm, encouraged by our ability to generate organic
growth in both loans and core deposits.” Winterbottom also
commented, “To meet the changing needs of our customers and improve
the efficiency of our resources, West Bank will consolidate the
Iowa City and Coralville branches this fall. Eastern Iowa
customers will continue to be served by our team at the Coralville
branch and through our online and mobile banking platforms.”
Eastern Iowa Market President, Jim Conard,
commented, “We are pleased to have recently earned the business of
several locally owned companies, contributing to the Eastern Iowa
market’s nearly 12 percent loan growth during the first six months
of 2018. Our banking team’s strategy of growth through
service to our customers and community was highlighted this month
by the leadership of Minda Hamann, West Bank 1st Vice President,
who served as chair of Coralville’s 4thFest Parade.”
“Our momentum in Rochester continued through the
second quarter of 2018, with total loans outstanding increasing 8
percent during the first six months of 2018 and an active pipeline
of new business,” said Mike Zinser, Rochester Market
President. “In addition to strong business loan growth, our
personal banking team continues to expand our consumer base,
helping to grow our market’s deposits by more than 9 percent during
the first six months of 2018.” Zinser concluded, “Based on
our increased referral activity, we believe that Rochester business
owners and local professionals are spreading the word about the
value our team and business model provide. More business
owners are joining the trend of choosing a bank that specializes in
commercial banking, rather than a retail bank trying to make it
work for them.”
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 our 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 27, 2018. The telephone number for the
conference call is 888-339-0814. A recording of the call will
be available until August 10, 2018, by dialing 877-344-7529.
The replay passcode is 10115037.
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
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; 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 |
|
June 30, 2018 |
|
June 30, 2017 |
Assets |
|
|
|
|
Cash and due from
banks |
|
$ |
36,964 |
|
|
$ |
42,617 |
|
Federal funds sold |
|
28,139 |
|
|
4,169 |
|
Investment securities
available for sale, at fair value |
|
526,793 |
|
|
322,597 |
|
Investment securities
held to maturity, at amortized cost |
|
— |
|
|
46,317 |
|
Federal Home Loan Bank
stock, at cost |
|
9,202 |
|
|
11,081 |
|
Loans |
|
1,534,404 |
|
|
1,435,379 |
|
Allowance
for loan losses |
|
(16,518 |
) |
|
(16,486 |
) |
Loans,
net |
|
1,517,886 |
|
|
1,418,893 |
|
Premises and equipment,
net |
|
22,053 |
|
|
23,072 |
|
Bank-owned life
insurance |
|
33,928 |
|
|
33,284 |
|
Other assets |
|
22,201 |
|
|
15,557 |
|
Total assets |
|
$ |
2,197,166 |
|
|
$ |
1,917,587 |
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
Deposits: |
|
|
|
|
Noninterest-bearing |
|
$ |
381,281 |
|
|
$ |
386,246 |
|
Interest-bearing: |
|
|
|
|
Demand |
|
326,567 |
|
|
339,821 |
|
Savings |
|
1,004,926 |
|
|
690,341 |
|
Time of
$250 or more |
|
29,382 |
|
|
13,102 |
|
Other
time |
|
149,773 |
|
|
145,565 |
|
Total
deposits |
|
1,891,929 |
|
|
1,575,075 |
|
Short-term
borrowings |
|
860 |
|
|
15,160 |
|
Long-term
borrowings |
|
117,153 |
|
|
146,506 |
|
Other liabilities |
|
4,872 |
|
|
5,960 |
|
Stockholders’
equity |
|
182,352 |
|
|
174,886 |
|
Total liabilities and stockholders’ equity |
|
$ |
2,197,166 |
|
|
$ |
1,917,587 |
|
|
|
|
|
|
|
|
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 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Interest
income |
|
|
|
|
|
|
|
|
Loans, including
fees |
|
$ |
17,168 |
|
|
$ |
16,042 |
|
|
$ |
33,642 |
|
|
$ |
31,011 |
|
Investment
securities |
|
3,192 |
|
|
2,054 |
|
|
6,367 |
|
|
3,859 |
|
Other |
|
177 |
|
|
70 |
|
|
258 |
|
|
87 |
|
Total interest income |
|
20,537 |
|
|
18,166 |
|
|
40,267 |
|
|
34,957 |
|
Interest
expense |
|
|
|
|
|
|
|
|
Deposits |
|
3,798 |
|
|
1,781 |
|
|
6,810 |
|
|
2,976 |
|
Short-term
borrowings |
|
52 |
|
|
23 |
|
|
79 |
|
|
69 |
|
Long-term
borrowings |
|
1,388 |
|
|
1,269 |
|
|
2,663 |
|
|
2,430 |
|
Total interest expense |
|
5,238 |
|
|
3,073 |
|
|
9,552 |
|
|
5,475 |
|
Net interest income |
|
15,299 |
|
|
15,093 |
|
|
30,715 |
|
|
29,482 |
|
Provision for loan
losses |
|
— |
|
|
— |
|
|
150 |
|
|
— |
|
Net interest income after provision for loan
losses |
|
15,299 |
|
|
15,093 |
|
|
30,565 |
|
|
29,482 |
|
Noninterest
income |
|
|
|
|
|
|
|
|
Service charges on
deposit accounts |
|
627 |
|
|
631 |
|
|
1,276 |
|
|
1,231 |
|
Debit card usage
fees |
|
433 |
|
|
458 |
|
|
832 |
|
|
898 |
|
Trust services |
|
575 |
|
|
436 |
|
|
1,020 |
|
|
828 |
|
Increase in cash value
of bank-owned life insurance |
|
152 |
|
|
163 |
|
|
310 |
|
|
317 |
|
Gain from bank-owned
life insurance |
|
— |
|
|
— |
|
|
— |
|
|
307 |
|
Realized investment
securities gains (losses), net |
|
(25 |
) |
|
229 |
|
|
(25 |
) |
|
226 |
|
Other income |
|
261 |
|
|
399 |
|
|
523 |
|
|
669 |
|
Total noninterest income |
|
2,023 |
|
|
2,316 |
|
|
3,936 |
|
|
4,476 |
|
Noninterest
expense |
|
|
|
|
|
|
|
|
Salaries and employee
benefits |
|
4,775 |
|
|
4,449 |
|
|
9,288 |
|
|
8,786 |
|
Occupancy |
|
1,258 |
|
|
1,131 |
|
|
2,481 |
|
|
2,228 |
|
Data processing |
|
674 |
|
|
708 |
|
|
1,350 |
|
|
1,396 |
|
FDIC insurance |
|
165 |
|
|
150 |
|
|
327 |
|
|
363 |
|
Write-down of
premises |
|
333 |
|
|
— |
|
|
333 |
|
|
— |
|
Other expenses |
|
1,753 |
|
|
1,734 |
|
|
3,466 |
|
|
3,442 |
|
Total noninterest expense |
|
8,958 |
|
|
8,172 |
|
|
17,245 |
|
|
16,215 |
|
Income before income taxes |
|
8,364 |
|
|
9,237 |
|
|
17,256 |
|
|
17,743 |
|
Income taxes |
|
1,600 |
|
|
2,872 |
|
|
3,108 |
|
|
5,272 |
|
Net income |
|
$ |
6,764 |
|
|
$ |
6,365 |
|
|
$ |
14,148 |
|
|
$ |
12,471 |
|
|
|
|
WEST BANCORPORATION, INC. AND SUBSIDIARY |
|
|
Financial
Information (continued) (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER COMMON SHARE |
|
MARKET INFORMATION (1) |
|
|
Net Income |
|
|
|
|
|
|
|
|
Basic |
|
Diluted |
|
Dividends |
|
High |
|
Low |
2018 |
|
|
|
|
|
|
|
|
|
|
2nd Quarter |
|
$ |
0.42 |
|
|
$ |
0.41 |
|
|
$ |
0.20 |
|
|
$ |
26.95 |
|
|
$ |
22.65 |
|
1st Quarter |
|
0.46 |
|
|
0.45 |
|
|
0.18 |
|
|
26.85 |
|
|
23.65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Return on average
assets |
|
1.27 |
% |
|
1.33 |
% |
|
1.34 |
% |
|
1.34 |
% |
Return on average
equity |
|
15.15 |
% |
|
14.86 |
% |
|
15.96 |
% |
|
14.83 |
% |
Net interest
margin |
|
3.05 |
% |
|
3.44 |
% |
|
3.11 |
% |
|
3.46 |
% |
Efficiency ratio* |
|
49.05 |
% |
|
45.93 |
% |
|
48.05 |
% |
|
46.38 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, |
|
|
|
|
|
|
2018 |
|
2017 |
Texas ratio* |
|
|
|
|
|
1.07 |
% |
|
0.43 |
% |
Allowance for loan
losses ratio |
|
|
|
|
|
1.08 |
% |
|
1.15 |
% |
Tangible common equity
ratio |
|
|
|
|
|
8.30 |
% |
|
9.12 |
% |
|
|
|
|
|
|
|
|
|
|
|
* 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 and write down of premises) 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.
WEST BANCORPORATION, INC. AND
SUBSIDIARYFinancial 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, net interest
margin and efficiency ratio on a fully taxable equivalent (FTE)
basis to GAAP.
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Reconciliation
of net interest income and annualized net interest margin on an FTE
basis to GAAP: |
|
|
|
|
|
|
|
|
Net interest income
(GAAP) |
|
$ |
15,299 |
|
|
$ |
15,093 |
|
|
$ |
30,715 |
|
|
$ |
29,482 |
|
Tax-equivalent
adjustment (1) |
|
236 |
|
|
597 |
|
|
525 |
|
|
1,215 |
|
Net interest income on
an FTE basis (non-GAAP) |
|
$ |
15,535 |
|
|
$ |
15,690 |
|
|
$ |
31,240 |
|
|
$ |
30,697 |
|
Average
interest-earning assets |
|
$ |
2,044,821 |
|
|
$ |
1,832,132 |
|
|
$ |
2,028,846 |
|
|
$ |
1,789,565 |
|
Net interest margin on
an FTE basis (non-GAAP) |
|
3.05 |
% |
|
3.44 |
% |
|
3.11 |
% |
|
3.46 |
% |
|
|
|
|
|
|
|
|
|
Reconciliation
of efficiency ratio on an FTE basis to GAAP: |
|
|
|
|
|
|
|
|
Net interest income on
an FTE basis (non-GAAP) |
|
$ |
15,535 |
|
|
$ |
15,690 |
|
|
$ |
31,240 |
|
|
$ |
30,697 |
|
Noninterest income |
|
2,023 |
|
|
2,316 |
|
|
3,936 |
|
|
4,476 |
|
Adjustment for realized
investment securities (gains) losses, net |
|
25 |
|
|
(229 |
) |
|
25 |
|
|
(226 |
) |
Plus: losses on
disposal of premises and equipment, net |
|
— |
|
|
15 |
|
|
— |
|
|
15 |
|
Adjusted
income |
|
$ |
17,583 |
|
|
$ |
17,792 |
|
|
$ |
35,201 |
|
|
$ |
34,962 |
|
Noninterest
expense |
|
$ |
8,958 |
|
|
$ |
8,172 |
|
|
$ |
17,245 |
|
|
$ |
16,215 |
|
Adjustment for
write-down of premises |
|
(333 |
) |
|
— |
|
|
(333 |
) |
|
— |
|
Adjusted
expense |
|
$ |
8,625 |
|
|
$ |
8,172 |
|
|
$ |
16,912 |
|
|
$ |
16,215 |
|
Efficiency ratio on an
adjusted and FTE basis (non-GAAP) (2) |
|
49.05 |
% |
|
45.93 |
% |
|
48.05 |
% |
|
46.38 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Computed on a tax-equivalent basis using a
federal income tax rate of 21 percent in 2018 and 35 percent in
2017, 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 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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