• West Bancorporation, Inc. Announces First Quarter 2024 Financial Results and Declares Quarterly Dividend

    المصدر: Nasdaq GlobeNewswire / 25 أبريل 2024 08:30:01   America/New_York

    WEST DES MOINES, Iowa, April 25, 2024 (GLOBE NEWSWIRE) -- West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent company of West Bank, today reported first quarter 2024 net income of $5.8 million, or $0.35 per diluted common share, compared to fourth quarter 2023 net income of $4.5 million, or $0.27 per diluted common share, and first quarter 2023 net income of $7.8 million, or $0.47 per diluted common share. On April 24, 2024, the Company’s Board of Directors declared a regular quarterly dividend of $0.25 per common share. The dividend is payable on May 22, 2024, to stockholders of record on May 8, 2024.

    David Nelson, President and Chief Executive Officer of the Company, commented, “We have completed our move to our new headquarters building in West Des Moines. After being in the same leased space for over 50 years, our new building is an opportunity to consolidate our corporate operations under one roof, provide space for future growth and enhance business development opportunities. This construction project was years in the making and is a commitment to honor our 131 year history and support the future of our community.”

    David Nelson added, “Like the rest of our industry, our Company continues to experience margin challenges in 2024. High short-term rates, an ongoing inverted yield curve and aggressive deposit competition continues to have a significant impact on our cost of funds and net interest margin. We have a clear understanding of our path forward to more normalized margins and earnings.”

    First Quarter 2024 Financial Highlights

     Quarter Ended
    March 31, 2024
    Net income (in thousands)$5,809 
    Return on average equity10.63%
    Return on average assets0.61%
    Efficiency ratio (a non-GAAP measure)62.04%
    Nonperforming assets to total assets0.01%
       

    First Quarter 2024 Compared to Fourth Quarter 2023 Overview

    • Loans increased $52.6 million in the first quarter of 2024, or 7.2 percent annualized. The increase is primarily due to the funding of previously committed construction loans.
    • No credit loss expense was recorded in the first quarter of 2024, compared to a credit loss expense of $500 thousand recorded in the fourth quarter of 2023. The $500 thousand credit loss expense recorded in the fourth quarter of 2023 was due to growth in loans and unfunded commitments.
    • The allowance for credit losses to total loans was 0.95 percent at March 31, 2024, compared to 0.97 percent at December 31, 2023. Nonaccrual loans at March 31, 2024 consisted of one loan with a balance of $289 thousand, compared to one loan with a balance of $296 thousand at December 31, 2023.
    • Deposits increased $91.3 million, or 3.1 percent, in the first quarter of 2024. Brokered deposits totaled $396.4 million at March 31, 2024, compared to $305.4 million at December 31, 2023, an increase of $91.0 million. Excluding brokered deposits, deposits increased $0.3 million during the first quarter of 2024. As of March 31, 2024, estimated uninsured deposits, which exclude deposits in the IntraFi® reciprocal network, brokered deposits and public funds protected by state programs, accounted for approximately 27.2 percent of total deposits.
    • Borrowed funds increased to $639.7 million at March 31, 2024, compared to $592.6 million at December 31, 2023. The increase was primarily attributable to an increase of $48.2 million in federal funds purchased and other short-term borrowings.
    • The efficiency ratio (a non-GAAP measure) was 62.04 percent for the first quarter of 2024, compared to 64.66 percent for the fourth quarter of 2023. The decrease in the efficiency ratio was primarily due to the increase in net interest income.
    • Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 1.88 percent for the first quarter of 2024, compared to 1.87 percent for the fourth quarter of 2023. Net interest income for the first quarter of 2024 was $16.8 million, compared to $16.4 million for the fourth quarter of 2023.
    • The tangible common equity ratio was 5.65 percent at March 31, 2024, compared to 5.88 percent at December 31, 2023. The decrease was attributable to the increase in accumulated other comprehensive loss, which was primarily driven by the effect of increasing long-term interest rates in the first quarter on the unrealized market value adjustment of our available for sale investment portfolio. While accumulated other comprehensive losses reduce tangible common equity, they have no impact on regulatory capital.

    First Quarter 2024 Compared to First Quarter 2023 Overview

    • Loans increased $223.9 million at March 31, 2024, or 8.1 percent, compared to March 31, 2023.
    • Deposits increased $266.6 million at March 31, 2024, compared to March 31, 2023. Included in deposits were brokered deposits totaling $396.4 million at March 31, 2024, compared to $234.2 million at March 31, 2023. Excluding brokered deposits, deposits increased $104.4 million, or 4.1 percent, as of March 31, 2024 compared to March 31, 2023.
    • Borrowed funds increased to $639.7 million at March 31, 2024, compared to $580.2 million at March 31, 2023. The increase included increases of $75.0 million in FHLB one-month rolling advances hedged with long-term interest rate swaps, and $20.0 million in FHLB long-term advances, partially offset by a decrease of $30.5 million in federal funds purchased and other short-term borrowings.
    • The efficiency ratio (a non-GAAP measure) was 62.04 percent for the first quarter of 2024, compared to 55.34 percent for the first quarter of 2023. The increase in the efficiency ratio in the first quarter of 2024 compared to the first quarter of 2023 was primarily due to the decreases in net interest income and noninterest income.
    • Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 1.88 percent for the first quarter of 2024, compared to 2.23 percent for the first quarter of 2023. Net interest income for the first quarter of 2024 was $16.8 million, compared to $18.7 million for the first quarter of 2023. Through 2023 and the first quarter of 2024, 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.

    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, April 25, 2024. The telephone number for the conference call is 800-715-9871. The conference ID for the conference call is 8178676. A recording of the call will be available until May 9, 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 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 high 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 that resulted in recent bank failures; changes in legal and regulatory requirements, limitations and costs including in response to the recent bank failures; 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 ongoing 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 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.

    For more information contact:
    Jane Funk, Executive Vice President, Treasurer and Chief Financial Officer (515) 222-5766

    WEST BANCORPORATION, INC. AND SUBSIDIARY      
    Financial Information (unaudited)          
    (in thousands)          
      As of
    CONDENSED BALANCE SHEETS March 31,
    2024
     December 31,
    2023
     September 30,
    2023
     June 30,
    2023
     March 31,
    2023
    Assets          
    Cash and due from banks $27,071  $33,245  $18,819  $29,776  $21,579 
    Interest-bearing deposits  120,946   32,112   1,802   1,968   901 
    Securities available for sale, at fair value  605,735   623,919   609,365   645,091   665,358 
    Federal Home Loan Bank stock, at cost  26,181   22,957   26,691   22,488   22,226 
    Loans  2,980,133   2,927,535   2,849,777   2,807,075   2,756,185 
    Allowance for credit losses  (28,373)  (28,342)  (28,147)  (27,938)  (27,941)
    Loans, net  2,951,760   2,899,193   2,821,630   2,779,137   2,728,244 
    Premises and equipment, net  95,880   86,399   75,675   66,683   59,565 
    Bank-owned life insurance  44,138   43,864   43,589   43,328   44,830 
    Other assets  90,981   84,069   104,329   90,084   82,240 
    Total assets $3,962,692  $3,825,758  $3,701,900  $3,678,555  $3,624,943 
               
    Liabilities and Stockholders’ Equity          
    Deposits $3,065,030  $2,973,779  $2,755,529  $2,836,325  $2,798,393 
    Federal funds purchased and other short-term borrowings  198,500   150,270   261,510   184,150   229,290 
    Other borrowings  441,183   442,367   443,552   409,736   350,921 
    Other liabilities  34,223   34,299   37,376   31,218   29,347 
    Stockholders’ equity  223,756   225,043   203,933   217,126   216,992 
    Total liabilities and stockholders’ equity $3,962,692  $3,825,758  $3,701,900  $3,678,555  $3,624,943 
               
      For the Quarter Ended
    AVERAGE BALANCES March 31,
    2024
     December 31,
    2023
     September 30,
    2023
     June 30,
    2023
     March 31,
    2023
    Assets $3,812,199  $3,706,497  $3,679,541  $3,645,651  $3,617,458 
    Loans  2,949,672   2,857,594   2,813,213   2,783,463   2,745,381 
    Deposits  2,931,222   2,878,676   2,764,184   2,854,945   2,846,926 
    Stockholders’ equity  219,835   201,920   215,230   213,177   215,391 
                         


    WEST BANCORPORATION, INC. AND SUBSIDIARY      
    Financial Information (unaudited)          
    (in thousands)          
      As of
    LOANS March 31,
    2024
     December 31,
    2023
     September 30,
    2023
     June 30,
    2023
     March 31,
    2023
    Commercial $544,293  $531,594  $529,293  $535,085  $520,894 
    Real estate:          
    Construction, land and land development  465,247   413,477   399,253   351,461   336,739 
    1-4 family residential first mortgages  108,065   106,688   89,713   80,998   75,223 
    Home equity  14,020   14,618   12,429   12,625   9,726 
    Commercial  1,839,580   1,854,510   1,812,816   1,820,718   1,810,158 
    Consumer and other  12,844   10,930   10,123   10,289   7,381 
       2,984,049   2,931,817   2,853,627   2,811,176   2,760,121 
    Net unamortized fees and costs  (3,916)  (4,282)  (3,850)  (4,101)  (3,936)
    Total loans $2,980,133  $2,927,535  $2,849,777  $2,807,075  $2,756,185 
    Less allowance for credit losses  (28,373)  (28,342)  (28,147)  (27,938)  (27,941)
    Net loans $2,951,760  $2,899,193  $2,821,630  $2,779,137  $2,728,244 
               
    CREDIT QUALITY          
    Pass $2,983,618  $2,931,377  $2,853,100  $2,810,640  $2,706,951 
    Watch  142   144   184   187   52,766 
    Substandard  289   296   343   349   404 
    Doubtful               
    Total loans $2,984,049  $2,931,817  $2,853,627  $2,811,176  $2,760,121 
               
    DEPOSITS          
    Noninterest-bearing demand $521,377  $548,726  $551,688  $568,029  $605,666 
    Interest-bearing demand  449,946   481,207   417,802   459,030   486,656 
    Savings and money market - non-brokered  1,315,698   1,315,741   1,249,309   1,302,468   1,202,756 
    Money market - brokered  119,840   124,335   99,282   114,142   92,524 
    Total nonmaturity deposits  2,406,861   2,470,009   2,318,081   2,443,669   2,387,602 
    Time - non-brokered  381,646   322,694   299,683   276,097   269,102 
    Time - brokered  276,523   181,076   137,765   116,559   141,689 
    Total time deposits  658,169   503,770   437,448   392,656   410,791 
    Total deposits $3,065,030  $2,973,779  $2,755,529  $2,836,325  $2,798,393 
               
    BORROWINGS          
    Federal funds purchased and other short-term borrowings $198,500  $150,270  $261,510  $184,150  $229,290 
    Subordinated notes, net  79,697   79,631   79,566   79,500   79,435 
    Federal Home Loan Bank advances  315,000   315,000   315,000   280,000   220,000 
    Long-term debt  46,486   47,736   48,986   50,236   51,486 
    Total borrowings $639,683  $592,637  $705,062  $593,886  $580,211 
               
    STOCKHOLDERS’ EQUITY          
    Preferred stock $  $  $  $  $ 
    Common stock  3,000   3,000   3,000   3,000   3,000 
    Additional paid-in capital  33,685   34,197   33,487   32,642   31,797 
    Retained earnings  272,997   271,369   271,025   269,301   267,620 
    Accumulated other comprehensive loss  (85,926)  (83,523)  (103,579)  (87,817)  (85,425)
    Total Stockholders’ Equity $223,756  $225,043  $203,933  $217,126  $216,992 
                         


    WEST BANCORPORATION, INC. AND SUBSIDIARY        
    Financial Information (unaudited)          
    (in thousands)          
      For the Quarter Ended
    CONSOLIDATED STATEMENTS OF INCOME March 31,
    2024
     December 31,
    2023
     September 30,
    2023
     June 30,
    2023
     March 31,
    2023
    Interest income:          
    Loans, including fees $40,196  $38,208  $36,756  $35,011  $32,948 
    Securities:          
    Taxable  3,416   3,521   3,427   3,432   3,316 
    Tax-exempt  810   869   880   883   885 
    Interest-bearing deposits  148   85   29   25   30 
    Total interest income  44,570   42,683   41,092   39,351   37,179 
    Interest expense:          
    Deposits  21,559   20,024   17,156   16,277   13,339 
    Federal funds purchased and other short-term borrowings  2,183   2,024   3,165   2,264   2,079 
    Subordinated notes  1,108   1,114   1,113   1,109   1,106 
    Federal Home Loan Bank advances  2,325   2,482   2,329   1,621   1,262 
    Long-term debt  645   678   695   739   698 
    Total interest expense  27,820   26,322   24,458   22,010   18,484 
    Net interest income  16,750   16,361   16,634   17,341   18,695 
    Credit loss expense     500   200       
    Net interest income after credit loss expense  16,750   15,861   16,434   17,341   18,695 
    Noninterest income:          
    Service charges on deposit accounts  460   476   463   458   462 
    Debit card usage fees  458   488   495   511   486 
    Trust services  776   782   831   749   706 
    Increase in cash value of bank-owned life insurance  274   275   262   250   257 
    Gain from bank-owned life insurance              691 
    Loan swap fees        431       
    Realized securities losses, net     (431)         
    Other income  331   308   340   421   355 
    Total noninterest income  2,299   1,898   2,822   2,389   2,957 
    Noninterest expense:          
    Salaries and employee benefits  6,489   6,468   6,696   7,029   6,867 
    Occupancy and equipment  1,447   1,499   1,359   1,322   1,327 
    Data processing  714   723   703   729   635 
    Technology and software  700   676   573   579   513 
    FDIC insurance  519   475   439   420   416 
    Professional fees  257   235   254   287   250 
    Director fees  199   240   196   251   205 
    Other expenses  1,543   1,845   1,685   1,857   1,858 
    Total noninterest expense  11,868   12,161   11,905   12,474   12,071 
    Income before income taxes  7,181   5,598   7,351   7,256   9,581 
    Income taxes  1,372   1,073   1,445   1,394   1,737 
    Net income $5,809  $4,525  $5,906  $5,862  $7,844 
               
    Basic earnings per common share $0.35  $0.27  $0.35  $0.35  $0.47 
    Diluted earnings per common share $0.35  $0.27  $0.35  $0.35  $0.47 
                         


    WEST BANCORPORATION, INC. AND SUBSIDIARY  
    Financial Information (unaudited)          
               
      As of and for the Quarter Ended
    COMMON SHARE DATA March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023
    Earnings per common share (basic) $0.35  $0.27  $0.35  $0.35  $0.47 
    Earnings per common share (diluted)  0.35   0.27   0.35   0.35   0.47 
    Dividends per common share  0.25   0.25   0.25   0.25   0.25 
    Book value per common share(1)  13.31   13.46   12.19   12.98   12.98 
    Closing stock price  17.83   21.20   16.31   18.41   18.27 
    Market price/book value(2)  133.96%  157.50%  133.80%  141.83%  140.76%
    Price earnings ratio(3)  12.77   19.79   11.75   13.11   9.56 
    Annualized dividend yield(4)  5.61%  4.72%  6.13%  5.43%  5.47%
               
    REGULATORY CAPITAL RATIOS          
    Consolidated:          
    Total risk-based capital ratio  11.78%  11.88%  11.96%  12.15%  12.17%
    Tier 1 risk-based capital ratio  9.23   9.30   9.37   9.51   9.51 
    Tier 1 leverage capital ratio  8.36   8.50   8.58   8.60   8.60 
    Common equity tier 1 ratio  8.67   8.74   8.80   8.92   8.92 
    West Bank:          
    Total risk-based capital ratio  12.63%  12.76%  12.89%  13.13%  13.16%
    Tier 1 risk-based capital ratio  11.76   11.89   12.01   12.24   12.26 
    Tier 1 leverage capital ratio  10.65   10.86   11.00   11.08   11.10 
    Common equity tier 1 ratio  11.76   11.89   12.01   12.24   12.26 
               
    KEY PERFORMANCE RATIOS AND OTHER METRICS          
    Return on average assets(5)  0.61%  0.48%  0.64%  0.64%  0.88%
    Return on average equity(6)  10.63   8.89   10.89   11.03   14.77 
    Net interest margin(7)(13)  1.88   1.87   1.91   2.02   2.23 
    Yield on interest-earning assets(8)(13)  4.99   4.87   4.70   4.57   4.41 
    Cost of interest-bearing liabilities  3.70   3.60   3.38   3.10   2.76 
    Efficiency ratio(9)(13)  62.04   64.66   60.83   62.83   55.34 
    Nonperforming assets to total assets(10)  0.01   0.01   0.01   0.01   0.01 
    ACL ratio(11)  0.95   0.97   0.99   1.00   1.01 
    Loans/total assets  75.20   76.52   76.98   76.31   76.03 
    Loans/total deposits  97.23   98.44   103.42   98.97   98.49 
    Tangible common equity ratio(12)  5.65   5.88   5.51   5.90   5.99 
                         

    (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) For the Quarter Ended
      March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023
    Reconciliation of net interest income and net interest margin on a FTE basis to GAAP:          
    Net interest income (GAAP) $16,750  $16,361  $16,634  $17,341  $18,695 
    Tax-equivalent adjustment(1)  82   95   113   122   161 
    Net interest income on a FTE basis (non-GAAP)  16,832   16,456   16,747   17,463   18,856 
    Average interest-earning assets  3,595,954   3,487,799   3,478,053   3,461,313   3,435,988 
    Net interest margin on a FTE basis (non-GAAP)  1.88%  1.87%  1.91%  2.02%  2.23%
               
    Reconciliation of efficiency ratio on an adjusted and FTE basis to GAAP:          
    Net interest income on a FTE basis (non-GAAP) $16,832  $16,456  $16,747  $17,463  $18,856 
    Noninterest income  2,299   1,898   2,822   2,389   2,957 
    Adjustment for realized securities losses, net     431          
    Adjustment for losses on disposal of premises and equipment, net     24   3   2    
    Adjusted income  19,131   18,809   19,572   19,854   21,813 
    Noninterest expense  11,868   12,161   11,905   12,474   12,071 
    Efficiency ratio on an adjusted and FTE basis (non-GAAP)(2)  62.04%  64.66%  60.83%  62.83%  55.34%
                         

    (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.


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