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West Bancorporation, Inc. Announces Net Income for the Third Quarter Of 2022, Declares Quarterly Dividend

West Bancorporation
West Bancorporation

WEST DES MOINES, Iowa, Oct. 27, 2022 (GLOBE NEWSWIRE) -- 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