West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent
company of West Bank, today reported 2020 net income of $32.7
million, or $1.98 per diluted common share, compared to 2019 net
income of $28.7 million, or $1.74 per diluted common share. Net
income for the fourth quarter of 2020 was $8.6 million, or $0.52
per diluted common share, compared to fourth quarter 2019 net
income of $7.6 million, or $0.46 per diluted common share. On
January 27, 2021, the Company’s Board of Directors declared a
regular quarterly dividend of $0.22 per common share, an increase
of $0.01 from the prior quarter and representing a record high
quarterly dividend for the Company. The dividend is payable on
February 24, 2021, to stockholders of record on February 10, 2021.
Net interest income increased 24.7 percent in
2020, compared to 2019, primarily due to the decline in deposit
interest expense as a result of the sharp decrease in market
interest rates at the onset of the COVID-19 pandemic. Partially
offsetting the increase in net interest income was a $12.0 million
provision for loan losses in 2020, which compares to $600,000 in
2019. While we believe credit quality is relatively stable, the
COVID-19 pandemic has increased the risk for loan defaults, and
credit quality continues to be evaluated with uncertainty
surrounding the duration of the pandemic and impact of federal and
state government actions.
Total deposits were $2.7 billion at December 31,
2020, compared to $2.0 billion at December 31, 2019, a 34.1 percent
increase. The growth in deposit balances was primarily due to
changes in customer behavior as a result of the COVID-19 pandemic
and their desire to retain liquidity, as well as a result of
additional funds provided to individuals and businesses by
government relief programs. The increase in deposit balances had a
direct impact on our asset balances and liquidity position at year
end as funds were deployed in loan originations, investment
security purchases and federal funds sold. Total assets were $3.2
billion at December 31, 2020, compared to $2.5 billion at December
31, 2019, a 28.8 percent increase. Total loans were $2.3 billion at
December 31, 2020, compared to $1.9 billion at December 31, 2019, a
17.5 percent increase. As of December 31, 2020, 35 loans totaling
$140 million, or 6.1 percent of total loans, had payment deferral
modifications related to the COVID-19 pandemic which were primarily
in the hospitality and entertainment industries.
Dave Nelson, President and Chief Executive
Officer of the Company, commented, “Despite this being an
incredibly unique and challenging year, I am proud of what our team
has accomplished and happy to share some of the Company’s
achievements. First, loan growth was over eight percent for the
year, not including Paycheck Protection Program loans. Our
employees engaged in extraordinary efforts to meet the ongoing
business needs of our customers and communities in addition to
delivering pandemic-related relief programs. In addition to our
normal business development efforts, we originated over 900 Small
Business Administration Paycheck Protection Program loans and
provided nearly 300 loan payment deferral modifications. In
continued support of our communities, we are currently
participating in the newest round of lending under the Paycheck
Protection Program. Second, net income for 2020 was $32.7 million,
a 14 percent increase over last year. This represents an all-time
record year for earnings even while the Bank recorded a provision
for loan losses of $12.0 million related to the uncertain and
unprecedented economic conditions created by the COVID-19 pandemic.
Finally, because of the success of our 2019 expansion in Minnesota,
we began construction of a permanent branch office in Sartell,
Minnesota, a suburb of St. Cloud.”
Dave Nelson also commented, “We believe our
history of strong capital, earnings and credit quality and the
strength of our customer relationships allowed us to successfully
navigate the challenges of 2020. We enter 2021 with great momentum
and optimism.”
The Company will file its report on Form 10-K
with the Securities and Exchange Commission on or before March 1,
2021. Please refer to that document for a more in-depth discussion
of our financial results. The Form 10-K will 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 29, 2021. The telephone number for the
conference call is 888-339-0814. A recording of the call will be
available until February 12, 2021, by dialing 877-344-7529. The
replay passcode is 10150540.
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 eight 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 Coronavirus
Disease 2019 (COVID-19) pandemic, including its potential 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; 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 |
|
December 31, 2020 |
|
December 31, 2019 |
Assets |
|
|
|
|
Cash and due from banks |
|
$ |
77,693 |
|
|
$ |
37,808 |
|
Federal funds sold |
|
318,742 |
|
|
15,482 |
|
Investment securities
available for sale, at fair value |
|
420,571 |
|
|
398,578 |
|
Federal Home Loan Bank stock,
at cost |
|
11,723 |
|
|
12,491 |
|
Loans |
|
2,280,575 |
|
|
1,941,663 |
|
Allowance for loan losses |
|
(29,436 |
) |
|
(17,235 |
) |
Loans, net |
|
2,251,139 |
|
|
1,924,428 |
|
Premises and equipment,
net |
|
29,077 |
|
|
29,680 |
|
Bank-owned life insurance |
|
42,686 |
|
|
34,893 |
|
Other assets |
|
34,113 |
|
|
20,331 |
|
Total assets |
|
$ |
3,185,744 |
|
|
$ |
2,473,691 |
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
Deposits: |
|
|
|
|
Noninterest-bearing demand |
|
$ |
696,731 |
|
|
$ |
380,079 |
|
Interest-bearing: |
|
|
|
|
Demand |
|
553,881 |
|
|
346,307 |
|
Savings |
|
1,274,254 |
|
|
996,836 |
|
Time of $250 or more |
|
46,907 |
|
|
81,871 |
|
Other time |
|
129,221 |
|
|
209,663 |
|
Total deposits |
|
2,700,994 |
|
|
2,014,756 |
|
Federal funds purchased |
|
5,375 |
|
|
2,660 |
|
Other borrowings |
|
217,010 |
|
|
222,728 |
|
Other liabilities |
|
38,670 |
|
|
21,727 |
|
Stockholders’ equity |
|
223,695 |
|
|
211,820 |
|
Total liabilities and stockholders’ equity |
|
$ |
3,185,744 |
|
|
$ |
2,473,691 |
|
WEST
BANCORPORATION, INC. AND SUBSIDIARY |
Financial
Information (continued) (unaudited) |
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
CONSOLIDATED STATEMENTS OF INCOME |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Interest income |
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
23,536 |
|
|
$ |
21,813 |
|
|
$ |
90,668 |
|
|
$ |
85,512 |
|
Investment securities |
|
2,162 |
|
|
2,973 |
|
|
9,261 |
|
|
12,053 |
|
Other |
|
48 |
|
|
291 |
|
|
304 |
|
|
1,110 |
|
Total interest income |
|
25,746 |
|
|
25,077 |
|
|
100,233 |
|
|
98,675 |
|
Interest
expense |
|
|
|
|
|
|
|
|
Deposits |
|
1,913 |
|
|
5,809 |
|
|
11,256 |
|
|
25,214 |
|
Federal funds purchased |
|
2 |
|
|
22 |
|
|
23 |
|
|
241 |
|
Other borrowings |
|
1,341 |
|
|
1,859 |
|
|
6,121 |
|
|
6,790 |
|
Total interest expense |
|
3,256 |
|
|
7,690 |
|
|
17,400 |
|
|
32,245 |
|
Net interest income |
|
22,490 |
|
|
17,387 |
|
|
82,833 |
|
|
66,430 |
|
Provision for loan losses |
|
4,000 |
|
|
300 |
|
|
12,000 |
|
|
600 |
|
Net interest income after provision for loan
losses |
|
18,490 |
|
|
17,087 |
|
|
70,833 |
|
|
65,830 |
|
Noninterest
income |
|
|
|
|
|
|
|
|
Service charges on deposit
accounts |
|
617 |
|
|
651 |
|
|
2,360 |
|
|
2,492 |
|
Debit card usage fees |
|
427 |
|
|
409 |
|
|
1,632 |
|
|
1,644 |
|
Trust services |
|
601 |
|
|
490 |
|
|
2,078 |
|
|
2,026 |
|
Increase in cash value of
bank-owned life insurance |
|
166 |
|
|
162 |
|
|
593 |
|
|
644 |
|
Loan swap fees |
|
— |
|
|
— |
|
|
1,572 |
|
|
— |
|
Realized investment securities
gains (losses), net |
|
(4 |
) |
|
(23 |
) |
|
77 |
|
|
(87 |
) |
Other income |
|
297 |
|
|
353 |
|
|
1,290 |
|
|
1,599 |
|
Total noninterest income |
|
2,104 |
|
|
2,042 |
|
|
9,602 |
|
|
8,318 |
|
Noninterest
expense |
|
|
|
|
|
|
|
|
Salaries and employee
benefits |
|
5,577 |
|
|
5,466 |
|
|
21,591 |
|
|
21,790 |
|
Occupancy |
|
1,375 |
|
|
1,399 |
|
|
5,467 |
|
|
5,355 |
|
Data processing |
|
626 |
|
|
644 |
|
|
2,508 |
|
|
2,735 |
|
FDIC insurance |
|
330 |
|
|
— |
|
|
1,210 |
|
|
404 |
|
Other expenses |
|
2,007 |
|
|
2,067 |
|
|
8,278 |
|
|
8,122 |
|
Total noninterest expense |
|
9,915 |
|
|
9,576 |
|
|
39,054 |
|
|
38,406 |
|
Income before income taxes |
|
10,679 |
|
|
9,553 |
|
|
41,381 |
|
|
35,742 |
|
Income taxes |
|
2,125 |
|
|
1,946 |
|
|
8,669 |
|
|
7,052 |
|
Net income |
|
$ |
8,554 |
|
|
$ |
7,607 |
|
|
$ |
32,712 |
|
|
$ |
28,690 |
|
WEST
BANCORPORATION, INC. AND SUBSIDIARY |
Financial
Information (continued) (unaudited) |
(dollars in
thousands, except per share data) |
|
|
|
|
|
|
|
|
|
PER COMMON SHARE |
|
MARKET INFORMATION (1) |
|
|
Net Income |
|
|
|
|
|
|
|
|
Basic |
|
Diluted |
|
Dividends |
|
High |
|
Low |
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 |
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
4th Quarter |
|
$ |
0.46 |
|
|
$ |
0.46 |
|
|
$ |
0.21 |
|
|
$ |
25.93 |
|
|
$ |
21.01 |
|
3rd Quarter |
|
0.46 |
|
|
0.46 |
|
|
0.21 |
|
|
22.47 |
|
|
19.63 |
|
2nd Quarter |
|
0.41 |
|
|
0.41 |
|
|
0.21 |
|
|
22.32 |
|
|
20.14 |
|
1st Quarter |
|
0.42 |
|
|
0.42 |
|
|
0.20 |
|
|
23.74 |
|
|
19.02 |
|
(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 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Return on average assets |
|
1.15 |
% |
|
1.22 |
% |
|
1.19 |
% |
|
1.20 |
% |
Return on average equity |
|
15.54 |
% |
|
14.61 |
% |
|
15.49 |
% |
|
14.34 |
% |
Net interest margin (2) |
|
3.20 |
% |
|
2.95 |
% |
|
3.20 |
% |
|
2.95 |
% |
Efficiency ratio (1)(2) |
|
39.99 |
% |
|
48.76 |
% |
|
41.96 |
% |
|
50.96 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
|
|
|
|
|
|
2020 |
|
2019 |
Texas ratio(1) |
|
|
|
|
|
6.40 |
% |
|
0.23 |
% |
Allowance for loan losses
ratio |
|
|
|
|
|
1.29 |
% |
|
0.89 |
% |
Allowance for loan
losses ratio, excluding PPP loans (2)(3) |
|
|
|
1.40 |
% |
|
0.89 |
% |
Tangible common equity
ratio |
|
|
|
|
|
7.02 |
% |
|
8.56 |
% |
(1) A lower ratio is more desirable(2) Non-GAAP
financial measures - see reconciliation below(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 $180,757 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 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 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 December 31, |
|
Year Ended December 31, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Reconciliation of net interest income and net interest
margin on an FTE basis to GAAP: |
|
|
|
|
|
|
|
|
Net interest income (GAAP) |
|
$ |
22,490 |
|
|
$ |
17,387 |
|
|
$ |
82,833 |
|
|
$ |
66,430 |
|
Tax-equivalent adjustment
(1) |
|
191 |
|
|
184 |
|
|
707 |
|
|
834 |
|
Net interest income on an FTE basis (non-GAAP) |
|
22,681 |
|
|
17,571 |
|
|
83,540 |
|
|
67,264 |
|
Average interest-earning
assets |
|
2,822,563 |
|
|
2,360,375 |
|
|
2,614,342 |
|
|
2,277,461 |
|
Net interest margin on an FTE
basis (non-GAAP) |
|
3.20 |
% |
|
2.95 |
% |
|
3.20 |
% |
|
2.95 |
% |
|
|
|
|
|
|
|
|
|
Reconciliation of
efficiency ratio on an FTE basis to GAAP: |
|
|
|
|
|
|
|
|
Net interest income on an FTE
basis (non-GAAP) |
|
$ |
22,681 |
|
|
$ |
17,571 |
|
|
$ |
83,540 |
|
|
$ |
67,264 |
|
Noninterest income |
|
2,104 |
|
|
2,042 |
|
|
9,602 |
|
|
8,318 |
|
Adjustment for realized investment securities (gains) losses,
net |
|
4 |
|
|
23 |
|
|
(77 |
) |
|
87 |
|
Adjustment for (gain) loss on sale of fixed assets |
|
6 |
|
|
— |
|
|
9 |
|
|
(307 |
) |
Adjusted income |
|
24,795 |
|
|
19,636 |
|
|
93,074 |
|
|
75,362 |
|
Noninterest expense |
|
9,915 |
|
|
9,576 |
|
|
39,054 |
|
|
38,406 |
|
Efficiency ratio on an
adjusted and FTE basis (non-GAAP) (2) |
|
39.99 |
% |
|
48.76 |
% |
|
41.96 |
% |
|
50.96 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
|
|
|
|
|
|
2020 |
|
2019 |
Reconciliation of allowance for loan losses ratio,
excluding PPP loans: |
|
|
|
|
|
|
Loans outstanding (GAAP) |
|
|
|
|
|
$ |
2,280,575 |
|
|
$ |
1,941,663 |
|
Less: PPP loans |
|
|
|
|
|
(180,757 |
) |
|
— |
|
Loans, net of PPP loans (non-GAAP) |
|
|
|
|
|
2,099,818 |
|
|
1,941,663 |
|
Allowance for loan losses |
|
|
|
|
|
29,436 |
|
|
17,235 |
|
Allowance for loan
losses ratio, excluding PPP loans (non-GAAP) |
|
|
|
1.40 |
% |
|
0.89 |
% |
(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
West Bancorporation (NASDAQ:WTBA)
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From Aug 2024 to Sep 2024
West Bancorporation (NASDAQ:WTBA)
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From Sep 2023 to Sep 2024