West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent
company of West Bank, today reported 2023 net income of $24.1
million, or $1.44 per diluted common share, compared to 2022 net
income of $46.4 million, or $2.76 per diluted common share. Net
income for the fourth quarter 2023 was $4.5 million, or $0.27 per
diluted common share, compared to third quarter 2023 net income of
$5.9 million, or $0.35 per diluted common share, and fourth quarter
2022 net income of $8.9 million, or $0.53 per diluted common share.
On January 24, 2024, the Company’s Board of Directors declared a
regular quarterly dividend of $0.25 per common share. The dividend
is payable on February 21, 2024, to stockholders of record on
February 7, 2024.
David Nelson, President and Chief Executive
Officer of the Company, commented, “Like the rest of our industry,
our Company experienced some significant margin challenges in 2023.
The interest rate environment, including dramatic increases in
short-term rates, an ongoing inverted yield curve and aggressive
deposit competition, had a significant impact on our cost of funds
and net interest margin. We have a clear understanding of what is
driving our challenges, along with a clear understanding of our
path forward to more normalized margins.”
David Nelson added, “Despite the challenges of
the interest rate environment, our credit quality remains pristine.
We have no loans greater than 30 days past due and only one
classified loan for $296 thousand at December 31, 2023. We continue
to closely monitor and manage our credit quality as the economy and
our customers respond to a higher interest rate environment.”
|
Fourth Quarter and Year Ended 2023 Financial
Highlights |
|
|
|
|
|
|
|
Quarter Ended December 31, 2023 |
|
Year Ended December 31, 2023 |
|
Net income (in thousands) |
$4,525 |
|
|
$24,137 |
|
|
Return on average equity |
|
8.89% |
|
|
|
11.42% |
|
|
Return on average assets |
|
0.48% |
|
|
|
0.66% |
|
|
Efficiency ratio (a non-GAAP
measure) |
|
64.66% |
|
|
|
60.73% |
|
|
Nonperforming assets to total
assets |
|
0.01% |
|
|
|
0.01% |
|
|
|
|
|
|
|
|
|
|
Fourth Quarter 2023 Compared to Third
Quarter 2023 Overview
- Loans increased $77.8 million in
the fourth quarter of 2023, or 10.9 percent annualized.
- A credit loss expense of $500
thousand was recorded in the fourth quarter of 2023, compared to a
credit loss expense of $200 thousand in the third quarter of 2023.
$300 thousand of the expense in the fourth quarter was allocated to
the allowance for credit losses on loans, which was due to loan
growth. The additional $200 thousand expensed in the fourth quarter
was allocated to the allowance for unfunded commitments. The
expense in the third quarter of 2023 was due to loan growth.
- The allowance for credit losses to
total loans was 0.97 percent at December 31, 2023, compared to 0.99
percent at September 30, 2023. Nonaccrual loans at December 31,
2023 consisted of one loan with a balance of $296 thousand,
compared to one loan with a balance of $303 thousand at September
30, 2023.
- Deposits increased $218.2 million,
or 7.9 percent, in the fourth quarter of 2023. Brokered deposits
totaled $305.4 million at December 31, 2023, compared to $237.0
million at September 30, 2023, an increase of $68.4 million.
Excluding brokered deposits, deposits increased $149.8 million, or
6.0 percent, during the fourth quarter of 2023. As of December 31,
2023, estimated uninsured deposits, which excludes deposits in the
IntraFi® reciprocal network, brokered deposits and public funds
protected by state programs, were approximately 28.2 percent of
total deposits.
- Borrowed funds decreased to $592.6
million at December 31, 2023, compared to $705.1 million at
September 30, 2023. The decrease was primarily attributable to a
decrease of $111.2 million in federal funds purchased and other
short-term borrowings.
- The efficiency ratio (a non-GAAP
measure) was 64.66 percent for the fourth quarter of 2023, compared
to 60.83 percent for the third quarter of 2023. The increase in the
efficiency ratio was primarily due to the decrease in noninterest
income. This decrease was primarily attributable to $431 thousand
in loan swap fees that were earned in the third quarter of
2023.
- Net interest margin, on a fully
tax-equivalent basis (a non-GAAP measure), was 1.87 percent for the
fourth quarter of 2023, compared to 1.91 percent for the third
quarter of 2023. Net interest income for the fourth quarter of 2023
was $16.4 million, compared to $16.6 million for the third quarter
of 2023. The rising cost of deposits has increased interest expense
faster than the increase in interest income from loan repricing and
loan originations.
- In December 2023, the Company sold
approximately $11.3 million of securities from the available for
sale securities portfolio and realized a net loss of $431 thousand.
The proceeds from this sale were reinvested in the loan portfolio
and have an estimated earn back period of approximately 1
year.
- The tangible common equity ratio
was 5.88 percent at December 31, 2023, compared to 5.51 percent at
September 30, 2023. The increase was attributable to the decrease
in accumulated other comprehensive loss, which was primarily driven
by the effect of decreasing long-term interest rates in the fourth
quarter on the unrealized market value adjustment of our available
for sale investment portfolio.
Fourth Quarter 2023 Compared to Fourth
Quarter 2022 Overview
- Loans increased $184.7 million at
December 31, 2023, or 6.7 percent, compared to December 31,
2022.
- Deposits increased $93.4 million at
December 31, 2023, compared to December 31, 2022. Included in
deposits were brokered deposits totaling $305.4 million at December
31, 2023, compared to $272.7 million at December 31, 2022.
Excluding brokered deposits, deposits increased $60.7 million, or
2.3 percent, as of December 31, 2023 compared to December 31,
2022.
- Borrowed funds increased to $592.6
million at December 31, 2023, compared to $485.9 million at
December 31, 2022. The increase included an increase of $160.0
million in FHLB one-month rolling advances hedged with long-term
interest rate swaps, partially offset by a decrease of $49.7
million in federal funds purchased and other short-term
borrowings.
- The efficiency ratio (a non-GAAP
measure) was 64.66 percent for the fourth quarter of 2023, compared
to 50.42 percent for the fourth quarter of 2022. The increase in
the efficiency ratio in the fourth quarter of 2023 compared to the
fourth quarter of 2022 was primarily due to the decrease in net
interest income.
- Net interest margin, on a fully
tax-equivalent basis (a non-GAAP measure), was 1.87 percent for the
fourth quarter of 2023, compared to 2.49 percent for the fourth
quarter of 2022. Net interest income for the fourth quarter of 2023
was $16.4 million, compared to $20.7 million for the fourth quarter
of 2022. In 2023, the rising cost of deposits and borrowed funds
and the change in mix of funding increased interest expense faster
than the increase in interest income from loan repricing and loan
originations.
Year Ended 2023 Compared to Year Ended
2022 Overview
- The credit loss expense recorded in
2023 was $700 thousand, compared to a credit loss benefit of $2.5
million in 2022. The credit loss expense recorded in 2023 was
associated with growth in loans and unfunded commitments. The
credit loss benefit recorded in 2022 was primarily due to the
reversal of a specific reserve on an impaired loan and the
reduction of certain qualitative factors resulting from the
sustained performance of loans after the expiration of COVID-19
modifications and continued improvement in classified loans.
- Net interest income declined $22.7
million in 2023 compared to 2022. Net interest margin decreased to
2.01 percent in 2023, compared to 2.76 percent in 2022. The decline
in both net interest income and net interest margin was primarily
due to the rising cost of deposits and borrowed funds and the
change in mix of funding, which increased interest expense faster
than the increase in interest income from loan repricing and loan
originations.
The Company plans to file its report on Form
10-K with the Securities and Exchange Commission on or before
February 22, 2024. Please refer to that document for a more
in-depth discussion of the Company’s 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 results in a
conference call scheduled for 2:00 p.m. Central Time on Thursday,
January 25, 2024. The telephone number for the conference call is
888-300-4030. The conference ID for the conference call is 3218904.
A recording of the call will be available until February 8, 2024,
by dialing 800-770-2030.
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 and potential additional rate increases by
the Federal Reserve; fluctuations in the values of the securities
held in our investment portfolio, including as a result of changes
in interest rates; competitive pressures, including from non-bank
competitors such as “fintech” companies and digital asset service
providers; pricing pressures on loans and deposits; our ability to
successfully manage liquidity risk; 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 credit losses dictated by new market conditions,
accounting standards or regulatory requirements; the concentration
of large deposits from certain clients who have balances above
current FDIC insurance limits; changes in local, national and
international economic conditions, including rising rates of
inflation and possible recession; the effects of recent
developments and events in the financial services industry,
including the large-scale deposit withdrawals over a short period
of time at Silicon Valley Bank, Signature Bank and First Republic
Bank that resulted in the failure of those institutions; changes in
legal and regulatory requirements, limitations and costs including
in response to the recent failures of Silicon Valley Bank,
Signature Bank and First Republic Bank; changes in customers’
acceptance of the Company’s products and services; the occurrence
of fraudulent activity, breaches or failures of our or our
third-party partners’ information security controls or
cyber-security related incidents, including as a result of
sophisticated attacks using artificial intelligence and similar
tools; 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
Israeli-Palestinian conflict and the Russian invasion of Ukraine,
widespread disease or pandemics, or other adverse external events;
risks related to climate change and the negative impact it may have
on our customers and their businesses; changes to U.S. tax laws,
regulations and guidance; potential changes in federal policy and
at regulatory agencies as a result of the upcoming 2024
presidential election; talent and labor shortages; the new 1
percent 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 |
|
December 31, 2023 |
|
September 30, 2023 |
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
Assets |
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
33,245 |
|
|
$ |
18,819 |
|
|
$ |
29,776 |
|
|
$ |
21,579 |
|
|
$ |
24,896 |
|
Interest-bearing deposits |
|
|
32,112 |
|
|
|
1,802 |
|
|
|
1,968 |
|
|
|
901 |
|
|
|
1,643 |
|
Securities available for sale,
at fair value |
|
|
623,919 |
|
|
|
609,365 |
|
|
|
645,091 |
|
|
|
665,358 |
|
|
|
664,115 |
|
Federal Home Loan Bank stock,
at cost |
|
|
22,957 |
|
|
|
26,691 |
|
|
|
22,488 |
|
|
|
22,226 |
|
|
|
19,336 |
|
Loans |
|
|
2,927,535 |
|
|
|
2,849,777 |
|
|
|
2,807,075 |
|
|
|
2,756,185 |
|
|
|
2,742,836 |
|
Allowance for credit losses |
|
|
(28,342 |
) |
|
|
(28,147 |
) |
|
|
(27,938 |
) |
|
|
(27,941 |
) |
|
|
(25,473 |
) |
Loans, net |
|
|
2,899,193 |
|
|
|
2,821,630 |
|
|
|
2,779,137 |
|
|
|
2,728,244 |
|
|
|
2,717,363 |
|
Premises and equipment,
net |
|
|
86,399 |
|
|
|
75,675 |
|
|
|
66,683 |
|
|
|
59,565 |
|
|
|
53,124 |
|
Bank-owned life insurance |
|
|
43,864 |
|
|
|
43,589 |
|
|
|
43,328 |
|
|
|
44,830 |
|
|
|
44,573 |
|
Other assets |
|
|
84,069 |
|
|
|
104,329 |
|
|
|
90,084 |
|
|
|
82,240 |
|
|
|
88,168 |
|
Total assets |
|
$ |
3,825,758 |
|
|
$ |
3,701,900 |
|
|
$ |
3,678,555 |
|
|
$ |
3,624,943 |
|
|
$ |
3,613,218 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
$ |
2,973,779 |
|
|
$ |
2,755,529 |
|
|
$ |
2,836,325 |
|
|
$ |
2,798,393 |
|
|
$ |
2,880,408 |
|
Federal funds purchased and
other short-term borrowings |
|
|
150,270 |
|
|
|
261,510 |
|
|
|
184,150 |
|
|
|
229,290 |
|
|
|
200,000 |
|
Other borrowings |
|
|
442,367 |
|
|
|
443,552 |
|
|
|
409,736 |
|
|
|
350,921 |
|
|
|
285,855 |
|
Other liabilities |
|
|
34,299 |
|
|
|
37,376 |
|
|
|
31,218 |
|
|
|
29,347 |
|
|
|
35,843 |
|
Stockholders’ equity |
|
|
225,043 |
|
|
|
203,933 |
|
|
|
217,126 |
|
|
|
216,992 |
|
|
|
211,112 |
|
Total liabilities and stockholders’ equity |
|
$ |
3,825,758 |
|
|
$ |
3,701,900 |
|
|
$ |
3,678,555 |
|
|
$ |
3,624,943 |
|
|
$ |
3,613,218 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended |
AVERAGE BALANCES |
|
December 31, 2023 |
|
September 30, 2023 |
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
Assets |
|
$ |
3,706,497 |
|
|
$ |
3,679,541 |
|
|
$ |
3,645,651 |
|
|
$ |
3,617,458 |
|
|
$ |
3,511,717 |
|
Loans |
|
|
2,857,594 |
|
|
|
2,813,213 |
|
|
|
2,783,463 |
|
|
|
2,745,381 |
|
|
|
2,649,671 |
|
Deposits |
|
|
2,878,676 |
|
|
|
2,764,184 |
|
|
|
2,854,945 |
|
|
|
2,846,926 |
|
|
|
2,901,928 |
|
Stockholders’ equity |
|
|
201,920 |
|
|
|
215,230 |
|
|
|
213,177 |
|
|
|
215,391 |
|
|
|
199,947 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEST
BANCORPORATION, INC. AND SUBSIDIARY |
|
|
|
|
|
|
Financial Information
(unaudited) |
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
As of |
LOANS |
|
December 31, 2023 |
|
September 30, 2023 |
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
Commercial |
|
$ |
531,594 |
|
|
$ |
529,293 |
|
|
$ |
535,085 |
|
|
$ |
520,894 |
|
|
$ |
519,196 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
Construction, land and land development |
|
|
413,477 |
|
|
|
399,253 |
|
|
|
351,461 |
|
|
|
336,739 |
|
|
|
363,014 |
|
1-4 family residential first mortgages |
|
|
106,688 |
|
|
|
89,713 |
|
|
|
80,998 |
|
|
|
75,223 |
|
|
|
75,211 |
|
Home equity |
|
|
14,618 |
|
|
|
12,429 |
|
|
|
12,625 |
|
|
|
9,726 |
|
|
|
10,322 |
|
Commercial |
|
|
1,854,510 |
|
|
|
1,812,816 |
|
|
|
1,820,718 |
|
|
|
1,810,158 |
|
|
|
1,771,940 |
|
Consumer and other |
|
|
10,930 |
|
|
|
10,123 |
|
|
|
10,289 |
|
|
|
7,381 |
|
|
|
7,292 |
|
|
|
|
2,931,817 |
|
|
|
2,853,627 |
|
|
|
2,811,176 |
|
|
|
2,760,121 |
|
|
|
2,746,975 |
|
Net unamortized fees and
costs |
|
|
(4,282 |
) |
|
|
(3,850 |
) |
|
|
(4,101 |
) |
|
|
(3,936 |
) |
|
|
(4,139 |
) |
Total loans |
|
$ |
2,927,535 |
|
|
$ |
2,849,777 |
|
|
$ |
2,807,075 |
|
|
$ |
2,756,185 |
|
|
$ |
2,742,836 |
|
Less allowance for credit
losses |
|
|
(28,342 |
) |
|
|
(28,147 |
) |
|
|
(27,938 |
) |
|
|
(27,941 |
) |
|
|
(25,473 |
) |
Net loans |
|
$ |
2,899,193 |
|
|
$ |
2,821,630 |
|
|
$ |
2,779,137 |
|
|
$ |
2,728,244 |
|
|
$ |
2,717,363 |
|
|
|
|
|
|
|
|
|
|
|
|
CREDIT QUALITY |
|
|
|
|
|
|
|
|
|
|
Pass |
|
$ |
2,931,377 |
|
|
$ |
2,853,100 |
|
|
$ |
2,810,640 |
|
|
$ |
2,706,951 |
|
|
$ |
2,692,334 |
|
Watch |
|
|
144 |
|
|
|
184 |
|
|
|
187 |
|
|
|
52,766 |
|
|
|
54,231 |
|
Substandard |
|
|
296 |
|
|
|
343 |
|
|
|
349 |
|
|
|
404 |
|
|
|
410 |
|
Doubtful |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total loans |
|
$ |
2,931,817 |
|
|
$ |
2,853,627 |
|
|
$ |
2,811,176 |
|
|
$ |
2,760,121 |
|
|
$ |
2,746,975 |
|
|
|
|
|
|
|
|
|
|
|
|
DEPOSITS |
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand |
|
$ |
548,726 |
|
|
$ |
551,688 |
|
|
$ |
568,029 |
|
|
$ |
605,666 |
|
|
$ |
693,563 |
|
Interest-bearing demand |
|
|
481,207 |
|
|
|
417,802 |
|
|
|
459,030 |
|
|
|
486,656 |
|
|
|
536,226 |
|
Savings and money market -
non-brokered |
|
|
1,315,741 |
|
|
|
1,249,309 |
|
|
|
1,302,468 |
|
|
|
1,202,756 |
|
|
|
1,125,202 |
|
Money market - brokered |
|
|
124,335 |
|
|
|
99,282 |
|
|
|
114,142 |
|
|
|
92,524 |
|
|
|
112,752 |
|
Total nonmaturity deposits |
|
|
2,470,009 |
|
|
|
2,318,081 |
|
|
|
2,443,669 |
|
|
|
2,387,602 |
|
|
|
2,467,743 |
|
Time - non-brokered |
|
|
322,694 |
|
|
|
299,683 |
|
|
|
276,097 |
|
|
|
269,102 |
|
|
|
252,725 |
|
Time - brokered |
|
|
181,076 |
|
|
|
137,765 |
|
|
|
116,559 |
|
|
|
141,689 |
|
|
|
159,940 |
|
Total time deposits |
|
|
503,770 |
|
|
|
437,448 |
|
|
|
392,656 |
|
|
|
410,791 |
|
|
|
412,665 |
|
Total deposits |
|
$ |
2,973,779 |
|
|
$ |
2,755,529 |
|
|
$ |
2,836,325 |
|
|
$ |
2,798,393 |
|
|
$ |
2,880,408 |
|
|
|
|
|
|
|
|
|
|
|
|
BORROWINGS |
|
|
|
|
|
|
|
|
|
|
Federal funds purchased and other short-term borrowings |
|
$ |
150,270 |
|
|
$ |
261,510 |
|
|
$ |
184,150 |
|
|
$ |
229,290 |
|
|
$ |
200,000 |
|
Subordinated notes, net |
|
|
79,631 |
|
|
|
79,566 |
|
|
|
79,500 |
|
|
|
79,435 |
|
|
|
79,369 |
|
Federal Home Loan Bank
advances |
|
|
315,000 |
|
|
|
315,000 |
|
|
|
280,000 |
|
|
|
220,000 |
|
|
|
155,000 |
|
Long-term debt |
|
|
47,736 |
|
|
|
48,986 |
|
|
|
50,236 |
|
|
|
51,486 |
|
|
|
51,486 |
|
Total borrowings |
|
$ |
592,637 |
|
|
$ |
705,062 |
|
|
$ |
593,886 |
|
|
$ |
580,211 |
|
|
$ |
485,855 |
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
Preferred stock |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Common stock |
|
|
3,000 |
|
|
|
3,000 |
|
|
|
3,000 |
|
|
|
3,000 |
|
|
|
3,000 |
|
Additional paid-in
capital |
|
|
34,197 |
|
|
|
33,487 |
|
|
|
32,642 |
|
|
|
31,797 |
|
|
|
32,021 |
|
Retained earnings |
|
|
271,369 |
|
|
|
271,025 |
|
|
|
269,301 |
|
|
|
267,620 |
|
|
|
267,562 |
|
Accumulated other
comprehensive loss |
|
|
(83,523 |
) |
|
|
(103,579 |
) |
|
|
(87,817 |
) |
|
|
(85,425 |
) |
|
|
(91,471 |
) |
Total Stockholders’ Equity |
|
$ |
225,043 |
|
|
$ |
203,933 |
|
|
$ |
217,126 |
|
|
$ |
216,992 |
|
|
$ |
211,112 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEST
BANCORPORATION, INC. AND SUBSIDIARY |
|
|
|
|
|
|
|
|
Financial Information
(unaudited) |
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended |
CONSOLIDATED STATEMENTS OF INCOME |
|
December 31, 2023 |
|
September 30, 2023 |
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
Interest income: |
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
38,208 |
|
|
$ |
36,756 |
|
$ |
35,011 |
|
$ |
32,948 |
|
$ |
30,859 |
Securities: |
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
3,521 |
|
|
|
3,427 |
|
|
3,432 |
|
|
3,316 |
|
|
3,398 |
Tax-exempt |
|
|
869 |
|
|
|
880 |
|
|
883 |
|
|
885 |
|
|
887 |
Interest-bearing deposits |
|
|
85 |
|
|
|
29 |
|
|
25 |
|
|
30 |
|
|
24 |
Total interest income |
|
|
42,683 |
|
|
|
41,092 |
|
|
39,351 |
|
|
37,179 |
|
|
35,168 |
Interest expense: |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
20,024 |
|
|
|
17,156 |
|
|
16,277 |
|
|
13,339 |
|
|
11,043 |
Federal funds purchased and other short-term borrowings |
|
|
2,024 |
|
|
|
3,165 |
|
|
2,264 |
|
|
2,079 |
|
|
952 |
Subordinated notes |
|
|
1,114 |
|
|
|
1,113 |
|
|
1,109 |
|
|
1,106 |
|
|
1,119 |
Federal Home Loan Bank advances |
|
|
2,482 |
|
|
|
2,329 |
|
|
1,621 |
|
|
1,262 |
|
|
755 |
Long-term debt |
|
|
678 |
|
|
|
695 |
|
|
739 |
|
|
698 |
|
|
630 |
Total interest expense |
|
|
26,322 |
|
|
|
24,458 |
|
|
22,010 |
|
|
18,484 |
|
|
14,499 |
Net interest income |
|
|
16,361 |
|
|
|
16,634 |
|
|
17,341 |
|
|
18,695 |
|
|
20,669 |
Credit loss expense |
|
|
500 |
|
|
|
200 |
|
|
— |
|
|
— |
|
|
— |
Net interest income after credit loss expense |
|
|
15,861 |
|
|
|
16,434 |
|
|
17,341 |
|
|
18,695 |
|
|
20,669 |
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
|
|
476 |
|
|
|
463 |
|
|
458 |
|
|
462 |
|
|
476 |
Debit card usage fees |
|
|
488 |
|
|
|
495 |
|
|
511 |
|
|
486 |
|
|
492 |
Trust services |
|
|
782 |
|
|
|
831 |
|
|
749 |
|
|
706 |
|
|
678 |
Increase in cash value of bank-owned life insurance |
|
|
275 |
|
|
|
262 |
|
|
250 |
|
|
257 |
|
|
255 |
Gain from bank-owned life insurance |
|
|
— |
|
|
|
— |
|
|
— |
|
|
691 |
|
|
— |
Loan swap fees |
|
|
— |
|
|
|
431 |
|
|
— |
|
|
— |
|
|
— |
Realized securities losses, net |
|
|
(431 |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Other income |
|
|
308 |
|
|
|
340 |
|
|
421 |
|
|
355 |
|
|
364 |
Total noninterest income |
|
|
1,898 |
|
|
|
2,822 |
|
|
2,389 |
|
|
2,957 |
|
|
2,265 |
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
6,468 |
|
|
|
6,696 |
|
|
7,029 |
|
|
6,867 |
|
|
6,552 |
Occupancy and equipment |
|
|
1,499 |
|
|
|
1,359 |
|
|
1,322 |
|
|
1,327 |
|
|
1,270 |
Data processing |
|
|
723 |
|
|
|
703 |
|
|
729 |
|
|
635 |
|
|
673 |
Technology and software |
|
|
676 |
|
|
|
573 |
|
|
579 |
|
|
513 |
|
|
518 |
FDIC insurance |
|
|
475 |
|
|
|
439 |
|
|
420 |
|
|
416 |
|
|
243 |
Professional fees |
|
|
235 |
|
|
|
254 |
|
|
287 |
|
|
250 |
|
|
205 |
Director fees |
|
|
240 |
|
|
|
196 |
|
|
251 |
|
|
205 |
|
|
215 |
Other expenses |
|
|
1,845 |
|
|
|
1,685 |
|
|
1,857 |
|
|
1,858 |
|
|
1,989 |
Total noninterest expense |
|
|
12,161 |
|
|
|
11,905 |
|
|
12,474 |
|
|
12,071 |
|
|
11,665 |
Income before income taxes |
|
|
5,598 |
|
|
|
7,351 |
|
|
7,256 |
|
|
9,581 |
|
|
11,269 |
Income taxes |
|
|
1,073 |
|
|
|
1,445 |
|
|
1,394 |
|
|
1,737 |
|
|
2,323 |
Net income |
|
$ |
4,525 |
|
|
$ |
5,906 |
|
$ |
5,862 |
|
$ |
7,844 |
|
$ |
8,946 |
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common
share |
|
$ |
0.27 |
|
|
$ |
0.35 |
|
$ |
0.35 |
|
$ |
0.47 |
|
$ |
0.54 |
Diluted earnings per common
share |
|
$ |
0.27 |
|
|
$ |
0.35 |
|
$ |
0.35 |
|
$ |
0.47 |
|
$ |
0.53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEST
BANCORPORATION, INC. AND SUBSIDIARY |
|
|
Financial Information
(unaudited) |
|
|
|
|
(in thousands) |
|
|
|
|
|
|
For the Year Ended |
CONSOLIDATED STATEMENTS OF INCOME |
|
December 31, 2023 |
|
December 31, 2022 |
Interest income: |
|
|
|
|
Loans, including fees |
|
$ |
142,923 |
|
|
$ |
107,095 |
|
Securities: |
|
|
|
|
Taxable |
|
|
13,696 |
|
|
|
12,524 |
|
Tax-exempt |
|
|
3,517 |
|
|
|
3,527 |
|
Interest-bearing deposits |
|
|
169 |
|
|
|
203 |
|
Total interest income |
|
|
160,305 |
|
|
|
123,349 |
|
Interest expense: |
|
|
|
|
Deposits |
|
|
66,796 |
|
|
|
22,629 |
|
Federal funds purchased and other short-term borrowings |
|
|
9,532 |
|
|
|
1,764 |
|
Subordinated notes |
|
|
4,442 |
|
|
|
2,867 |
|
Federal Home Loan Bank advances |
|
|
7,694 |
|
|
|
2,669 |
|
Long-term debt |
|
|
2,810 |
|
|
|
1,680 |
|
Total interest expense |
|
|
91,274 |
|
|
|
31,609 |
|
Net interest income |
|
|
69,031 |
|
|
|
91,740 |
|
Credit loss expense
(benefit) |
|
|
700 |
|
|
|
(2,500 |
) |
Net interest income after credit loss expense
(benefit) |
|
|
68,331 |
|
|
|
94,240 |
|
Noninterest income: |
|
|
|
|
Service charges on deposit accounts |
|
|
1,859 |
|
|
|
2,194 |
|
Debit card usage fees |
|
|
1,980 |
|
|
|
1,969 |
|
Trust services |
|
|
3,068 |
|
|
|
2,709 |
|
Increase in cash value of bank-owned life insurance |
|
|
1,044 |
|
|
|
964 |
|
Loan swap fees |
|
|
431 |
|
|
|
835 |
|
Realized securities losses, net |
|
|
(431 |
) |
|
|
— |
|
Gain from bank-owned life insurance |
|
|
691 |
|
|
|
— |
|
Other income |
|
|
1,424 |
|
|
|
1,537 |
|
Total noninterest income |
|
|
10,066 |
|
|
|
10,208 |
|
Noninterest expense: |
|
|
|
|
Salaries and employee benefits |
|
|
27,060 |
|
|
|
25,838 |
|
Occupancy and equipment |
|
|
5,507 |
|
|
|
4,913 |
|
Data processing |
|
|
2,790 |
|
|
|
2,597 |
|
Technology and software |
|
|
2,341 |
|
|
|
2,137 |
|
FDIC insurance |
|
|
1,750 |
|
|
|
996 |
|
Professional fees |
|
|
1,026 |
|
|
|
874 |
|
Director fees |
|
|
892 |
|
|
|
814 |
|
Other expenses |
|
|
7,245 |
|
|
|
6,882 |
|
Total noninterest expense |
|
|
48,611 |
|
|
|
45,051 |
|
Income before income taxes |
|
|
29,786 |
|
|
|
59,397 |
|
Income taxes |
|
|
5,649 |
|
|
|
12,998 |
|
Net income |
|
$ |
24,137 |
|
|
$ |
46,399 |
|
|
|
|
|
|
Basic earnings per common
share |
|
$ |
1.44 |
|
|
$ |
2.79 |
|
Diluted earnings per common
share |
|
$ |
1.44 |
|
|
$ |
2.76 |
|
|
|
|
|
|
|
|
|
|
WEST
BANCORPORATION, INC. AND SUBSIDIARY |
|
|
|
|
|
|
Financial Information
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for the Quarter Ended |
|
For the Year Ended |
COMMON SHARE DATA |
|
December 31, 2023 |
|
September 30, 2023 |
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
Earnings per common share (basic) |
|
$ |
0.27 |
|
|
$ |
0.35 |
|
|
$ |
0.35 |
|
|
$ |
0.47 |
|
|
$ |
0.54 |
|
|
$ |
1.44 |
|
|
$ |
2.79 |
|
Earnings per common share
(diluted) |
|
|
0.27 |
|
|
|
0.35 |
|
|
|
0.35 |
|
|
|
0.47 |
|
|
|
0.53 |
|
|
|
1.44 |
|
|
|
2.76 |
|
Dividends per common
share |
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.25 |
|
|
|
1.00 |
|
|
|
1.00 |
|
Book value per common
share(1) |
|
|
13.46 |
|
|
|
12.19 |
|
|
|
12.98 |
|
|
|
12.98 |
|
|
|
12.69 |
|
|
|
|
|
Closing stock price |
|
|
21.20 |
|
|
|
16.31 |
|
|
|
18.41 |
|
|
|
18.27 |
|
|
|
25.55 |
|
|
|
|
|
Market price/book
value(2) |
|
|
157.50 |
% |
|
|
133.80 |
% |
|
|
141.83 |
% |
|
|
140.76 |
% |
|
|
201.34 |
% |
|
|
|
|
Price earnings ratio(3) |
|
|
19.79 |
|
|
|
11.75 |
|
|
|
13.11 |
|
|
|
9.56 |
|
|
|
11.93 |
|
|
|
|
|
Annualized dividend
yield(4) |
|
|
4.72 |
% |
|
|
6.13 |
% |
|
|
5.43 |
% |
|
|
5.47 |
% |
|
|
3.91 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REGULATORY CAPITAL RATIOS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total risk-based capital
ratio |
|
|
11.88 |
% |
|
|
11.96 |
% |
|
|
12.15 |
% |
|
|
12.17 |
% |
|
|
12.08 |
% |
|
|
|
|
Tier 1 risk-based capital
ratio |
|
|
9.30 |
|
|
|
9.37 |
|
|
|
9.51 |
|
|
|
9.51 |
|
|
|
9.55 |
|
|
|
|
|
Tier 1 leverage capital
ratio |
|
|
8.50 |
|
|
|
8.58 |
|
|
|
8.60 |
|
|
|
8.60 |
|
|
|
8.81 |
|
|
|
|
|
Common equity tier 1
ratio |
|
|
8.74 |
|
|
|
8.80 |
|
|
|
8.92 |
|
|
|
8.92 |
|
|
|
8.96 |
|
|
|
|
|
West
Bank: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total risk-based capital
ratio |
|
|
12.76 |
% |
|
|
12.89 |
% |
|
|
13.13 |
% |
|
|
13.16 |
% |
|
|
13.08 |
% |
|
|
|
|
Tier 1 risk-based capital
ratio |
|
|
11.89 |
|
|
|
12.01 |
|
|
|
12.24 |
|
|
|
12.26 |
|
|
|
12.33 |
|
|
|
|
|
Tier 1 leverage capital
ratio |
|
|
10.86 |
|
|
|
11.00 |
|
|
|
11.08 |
|
|
|
11.10 |
|
|
|
11.37 |
|
|
|
|
|
Common equity tier 1
ratio |
|
|
11.89 |
|
|
|
12.01 |
|
|
|
12.24 |
|
|
|
12.26 |
|
|
|
12.33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KEY PERFORMANCE RATIOS AND OTHER METRICS |
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Return on average assets(5) |
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0.48 |
% |
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0.64 |
% |
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0.64 |
% |
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0.88 |
% |
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1.01 |
% |
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0.66 |
% |
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1.32 |
% |
Return on average
equity(6) |
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8.89 |
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10.89 |
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11.03 |
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14.77 |
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17.75 |
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11.42 |
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20.71 |
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Net interest
margin(7)(13) |
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1.87 |
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1.91 |
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2.02 |
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2.23 |
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2.49 |
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2.01 |
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2.76 |
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Yield on interest-earning
assets(8)(13) |
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4.87 |
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4.70 |
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4.57 |
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4.41 |
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4.21 |
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4.64 |
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3.70 |
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Cost of interest-bearing
liabilities |
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3.60 |
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3.38 |
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3.10 |
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2.76 |
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2.24 |
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3.21 |
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1.24 |
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Efficiency ratio(9)(13) |
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64.66 |
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60.83 |
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62.83 |
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55.34 |
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50.42 |
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60.73 |
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43.70 |
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Nonperforming assets to total
assets(10) |
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0.01 |
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0.01 |
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0.01 |
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0.01 |
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0.01 |
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ACL ratio(11) |
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0.97 |
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0.99 |
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1.00 |
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1.01 |
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0.93 |
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Loans/total assets |
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76.52 |
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76.98 |
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76.31 |
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76.03 |
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75.91 |
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Loans/total deposits |
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98.44 |
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103.42 |
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98.97 |
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98.49 |
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95.22 |
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Tangible common equity
ratio(12) |
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5.88 |
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5.51 |
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5.90 |
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5.99 |
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5.84 |
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(1) Includes accumulated other comprehensive
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 credit 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) |
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For the Quarter Ended |
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For the Year Ended |
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December 31, 2023 |
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September30, 2023 |
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June 30, 2023 |
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March 31, 2023 |
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December 31, 2022 |
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December 31, 2023 |
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December 31, 2022 |
Reconciliation of net interest income and net interest
margin on a FTE basis to GAAP: |
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Net interest income (GAAP) |
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$ |
16,361 |
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$ |
16,634 |
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$ |
17,341 |
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$ |
18,695 |
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$ |
20,669 |
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$ |
69,031 |
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$ |
91,740 |
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Tax-equivalent adjustment
(1) |
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95 |
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113 |
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122 |
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161 |
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197 |
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491 |
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1,122 |
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Net interest income on a FTE basis (non-GAAP) |
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16,456 |
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16,747 |
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17,463 |
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18,856 |
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20,866 |
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69,522 |
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92,862 |
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Average interest-earning
assets |
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3,487,799 |
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3,478,053 |
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3,461,313 |
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3,435,988 |
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3,328,941 |
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3,465,964 |
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3,361,091 |
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Net interest margin on a FTE
basis (non-GAAP) |
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1.87 |
% |
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1.91 |
% |
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2.02 |
% |
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2.23 |
% |
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2.49 |
% |
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2.01 |
% |
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2.76 |
% |
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Reconciliation of
efficiency ratio on an adjusted and FTE basis to
GAAP: |
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Net interest income on a FTE
basis (non-GAAP) |
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$ |
16,456 |
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$ |
16,747 |
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$ |
17,463 |
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$ |
18,856 |
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$ |
20,866 |
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$ |
69,522 |
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$ |
92,862 |
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Noninterest income |
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1,898 |
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2,822 |
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2,389 |
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2,957 |
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2,265 |
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10,066 |
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10,208 |
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Adjustment for realized securities losses, net |
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431 |
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— |
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— |
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— |
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— |
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431 |
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— |
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Adjustment for losses on disposal of premises and equipment,
net |
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24 |
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3 |
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2 |
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— |
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2 |
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29 |
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29 |
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Adjusted income |
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18,809 |
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19,572 |
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19,854 |
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21,813 |
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23,133 |
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80,048 |
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103,099 |
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Noninterest expense |
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12,161 |
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11,905 |
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12,474 |
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12,071 |
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11,665 |
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48,611 |
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45,051 |
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Efficiency ratio on an
adjusted and FTE basis (non-GAAP) (2) |
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64.66 |
% |
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60.83 |
% |
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62.83 |
% |
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55.34 |
% |
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50.42 |
% |
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60.73 |
% |
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43.70 |
% |
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(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
West Bancorporation (NASDAQ:WTBA)
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