Attached files
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| 8-K - 8-K - WEST BANCORPORATION INC | wtba-2020723form8xk.htm |
Exhibit 99.1
Press Release
July 23, 2020
FOR IMMEDIATE RELEASE
For more information contact:
Doug Gulling, Executive Vice President, Treasurer and Chief Financial Officer (515) 222-2309
WEST BANCORPORATION, INC. ANNOUNCES SECOND QUARTER 2020 NET INCOME, DECLARES QUARTERLY DIVIDEND
West Des Moines, IA - West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent company of West Bank, today reported that second quarter 2020 net income was $8.0 million, or $0.48 per diluted common share, compared to second quarter 2019 net income of $6.7 million, or $0.41 per diluted common share. For the first six months of 2020, net income was $16.1 million, or $0.97 per diluted common share, compared to $13.6 million, or $0.83 per diluted common share, for the first six months of 2019. On July 22, 2020, the Company’s Board of Directors declared a regular quarterly dividend of $0.21 per common share, the same amount as in the previous five quarters. The dividend is payable on August 19, 2020, to stockholders of record on August 5, 2020.
“The COVID-19 pandemic has created unprecedented challenges for our customers, employees and communities,” commented Dave Nelson, President and Chief Executive Officer of the Company. “The long-term economic impact of the pandemic is still uncertain and highly dependent on variables that are extremely difficult to predict. Throughout the pandemic, West Bank has continued to deliver all of our banking services and respond to our customers’ needs in a timely and efficient manner, as demonstrated by the implementation of the Paycheck Protection Program and prudent loan modifications. We remain committed to supporting the recovery of the communities we serve.”
Dave Nelson also commented, “We are pleased with our continued strong financial performance in the first six months of 2020. Although the inherent stress on credit quality and reduced demand for new lending caused by the COVID-19 pandemic may impact our growth and earnings in future periods, we believe our history of strong capital, earnings and credit quality has put us in a position to support our customers, employees and communities during this period of unprecedented challenges.”
For the past several years, the Company has increased the amount of the quarterly dividend during the second quarter of each year. Although the Company had strong earnings in the first and second quarters of 2020, due to the uncertainty facing the economy, the Board of Directors of the Company decided to maintain the dividend at the current level of $0.21 per share. The Board will continue to evaluate the dividend on a quarterly basis based on the effects the COVID-19 pandemic has on the Company and its customers.
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 its financial results. The Form 10-Q is available on the Investor Relations section of West Bank’s website at www.westbankstrong.com.
The Company will discuss its financial results on a conference call scheduled for 10:00 a.m. Central Time tomorrow, Friday, July 24, 2020. The telephone number for the conference call is 888-339-0814. A recording of the call will be available until August 7, 2020, by dialing 877-344-7529. The replay passcode is 10137423.
About West Bancorporation, Inc. (Nasdaq: WTBA)
West Bancorporation, Inc. is headquartered in West Des Moines, Iowa. Serving customers since 1893, West Bank, a wholly-owned subsidiary of West Bancorporation, Inc., is a community bank that focuses on lending, deposit services, and trust services for consumers and small- to medium-sized businesses. West Bank has eight offices in the Des Moines, Iowa metropolitan area, one office in Coralville, Iowa, and four offices in Minnesota in the cities of Rochester, Owatonna, Mankato and St. Cloud.
Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to the Company’s business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may appear throughout this report. These forward-looking statements are generally identified by the words “believes,” “expects,” “intends,” “anticipates,” “projects,” “future,” “confident,” “may,” “should,” “will,” “strategy,” “plan,” “opportunity,” “will be,” “will likely result,” “will continue” or similar references, or references to estimates, predictions or future events. Such forward-looking statements are based upon certain underlying assumptions, risks and uncertainties. Because of the possibility that the underlying assumptions are incorrect or do not materialize as expected in the future, actual results could differ materially from these forward-looking statements. Risks and uncertainties that may affect future results include: the effects of the Coronavirus Disease 2019 (COVID-19) pandemic, including its potential effects on the economic environment, our customers and our operations, as well as any changes to federal, state or local government laws, regulations or orders in connection with the pandemic; interest rate risk; competitive pressures; pricing pressures on loans and deposits; changes in credit and other risks posed by the Company’s loan and investment portfolios, including declines in commercial or residential real estate values or changes in the allowance for loan losses dictated by new market conditions, accounting standards (including as a result of the future implementation of the current expected credit loss (CECL) accounting standard) or regulatory requirements; actions of bank and nonbank competitors; changes in local, national and international economic conditions; changes in legal and regulatory requirements, limitations and costs; changes in customers’ acceptance of the Company’s products and services; cyber-attacks; unexpected outcomes of existing or new litigation involving the Company; the monetary, trade and other regulatory policies of the U.S. government; acts of war or terrorism, widespread disease or pandemics, such as the COVID-19 pandemic, or other adverse external events; and any other risks described in the “Risk Factors” sections of reports filed by the Company with the Securities and Exchange Commission. The Company undertakes no obligation to revise or update such forward-looking statements to reflect current or future events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
| WEST BANCORPORATION, INC. AND SUBSIDIARY | ||||||||||||||
| Financial Information (unaudited) | ||||||||||||||
| (in thousands) | ||||||||||||||
| CONSOLIDATED BALANCE SHEETS | June 30, 2020 | June 30, 2019 | ||||||||||||
| Assets | ||||||||||||||
| Cash and due from banks | $ | 54,175 | $ | 45,286 | ||||||||||
| Federal funds sold | 62,494 | 47,278 | ||||||||||||
| Investment securities available for sale, at fair value | 342,017 | 398,534 | ||||||||||||
| Federal Home Loan Bank stock, at cost | 12,307 | 10,826 | ||||||||||||
| Loans | 2,199,688 | 1,792,718 | ||||||||||||
| Allowance for loan losses | (21,363) | (16,737) | ||||||||||||
| Loans, net | 2,178,325 | 1,775,981 | ||||||||||||
| Premises and equipment, net | 28,655 | 30,447 | ||||||||||||
| Bank-owned life insurance | 35,187 | 34,563 | ||||||||||||
| Other assets | 27,163 | 19,961 | ||||||||||||
| Total assets | $ | 2,740,323 | $ | 2,362,876 | ||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||
| Deposits: | ||||||||||||||
| Noninterest-bearing demand | $ | 590,487 | $ | 373,627 | ||||||||||
| Interest-bearing: | ||||||||||||||
| Demand | 378,931 | 321,747 | ||||||||||||
| Savings | 1,081,743 | 974,769 | ||||||||||||
| Time of $250 or more | 61,456 | 50,980 | ||||||||||||
| Other time | 143,092 | 244,664 | ||||||||||||
| Total deposits | 2,255,709 | 1,965,787 | ||||||||||||
| Federal funds purchased | 5,755 | 2,280 | ||||||||||||
| Other borrowings | 223,181 | 172,035 | ||||||||||||
| Other liabilities | 46,991 | 20,839 | ||||||||||||
| Stockholders’ equity | 208,687 | 201,935 | ||||||||||||
| Total liabilities and stockholders’ equity | $ | 2,740,323 | $ | 2,362,876 | ||||||||||
| WEST BANCORPORATION, INC. AND SUBSIDIARY | ||||||||||||||||||||||||||
| Financial Information (continued) (unaudited) | ||||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||
| Loans, including fees | $ | 22,332 | $ | 21,108 | $ | 44,643 | $ | 41,496 | ||||||||||||||||||
| Investment securities | 2,313 | 3,117 | 4,993 | 6,282 | ||||||||||||||||||||||
| Other | 12 | 110 | 241 | 208 | ||||||||||||||||||||||
| Total interest income | 24,657 | 24,335 | 49,877 | 47,986 | ||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||
| Deposits | 2,351 | 6,670 | 7,397 | 12,634 | ||||||||||||||||||||||
| Federal funds purchased | 3 | 115 | 19 | 202 | ||||||||||||||||||||||
| Other borrowings | 1,556 | 1,512 | 3,250 | 3,223 | ||||||||||||||||||||||
| Total interest expense | 3,910 | 8,297 | 10,666 | 16,059 | ||||||||||||||||||||||
| Net interest income | 20,747 | 16,038 | 39,211 | 31,927 | ||||||||||||||||||||||
| Provision for loan losses | 3,000 | — | 4,000 | — | ||||||||||||||||||||||
| Net interest income after provision for loan losses | 17,747 | 16,038 | 35,211 | 31,927 | ||||||||||||||||||||||
| Noninterest income | ||||||||||||||||||||||||||
| Service charges on deposit accounts | 531 | 600 | 1,134 | 1,211 | ||||||||||||||||||||||
| Debit card usage fees | 391 | 434 | 773 | 809 | ||||||||||||||||||||||
| Trust services | 461 | 481 | 924 | 964 | ||||||||||||||||||||||
| Increase in cash value of bank-owned life insurance | 136 | 162 | 294 | 314 | ||||||||||||||||||||||
| Loan swap fees | 3 | — | 589 | — | ||||||||||||||||||||||
| Realized investment securities gains (losses), net | (69) | 23 | (75) | (65) | ||||||||||||||||||||||
| Other income | 322 | 299 | 656 | 885 | ||||||||||||||||||||||
| Total noninterest income | 1,775 | 1,999 | 4,295 | 4,118 | ||||||||||||||||||||||
| Noninterest expense | ||||||||||||||||||||||||||
| Salaries and employee benefits | 5,318 | 5,424 | 10,602 | 10,884 | ||||||||||||||||||||||
| Occupancy | 1,349 | 1,344 | 2,709 | 2,577 | ||||||||||||||||||||||
| Data processing | 596 | 716 | 1,268 | 1,396 | ||||||||||||||||||||||
| FDIC insurance | 292 | 185 | 529 | 404 | ||||||||||||||||||||||
| Other expenses | 1,862 | 2,081 | 3,972 | 4,033 | ||||||||||||||||||||||
| Total noninterest expense | 9,417 | 9,750 | 19,080 | 19,294 | ||||||||||||||||||||||
| Income before income taxes | 10,105 | 8,287 | 20,426 | 16,751 | ||||||||||||||||||||||
| Income taxes | 2,136 | 1,629 | 4,368 | 3,194 | ||||||||||||||||||||||
| Net income | $ | 7,969 | $ | 6,658 | $ | 16,058 | $ | 13,557 | ||||||||||||||||||
| WEST BANCORPORATION, INC. AND SUBSIDIARY | ||||||||||||||||||||||||||||||||
| Financial Information (continued) (unaudited) | ||||||||||||||||||||||||||||||||
| PER COMMON SHARE | MARKET INFORMATION (1) | |||||||||||||||||||||||||||||||
| Net Income | ||||||||||||||||||||||||||||||||
| Basic | Diluted | Dividends | High | Low | ||||||||||||||||||||||||||||
| 2020 | ||||||||||||||||||||||||||||||||
| 2nd Quarter | $ | 0.48 | $ | 0.48 | $ | 0.21 | $ | 20.67 | $ | 14.50 | ||||||||||||||||||||||
| 1st Quarter | 0.49 | 0.49 | 0.21 | 25.68 | 13.74 | |||||||||||||||||||||||||||
| 2019 | ||||||||||||||||||||||||||||||||
| 4th Quarter | $ | 0.46 | $ | 0.46 | $ | 0.21 | $ | 25.93 | $ | 21.01 | ||||||||||||||||||||||
| 3rd Quarter | 0.46 | 0.46 | 0.21 | 22.47 | 19.63 | |||||||||||||||||||||||||||
| 2nd Quarter | 0.41 | 0.41 | 0.21 | 22.32 | 20.14 | |||||||||||||||||||||||||||
| 1st Quarter | 0.42 | 0.42 | 0.20 | 23.74 | 19.02 | |||||||||||||||||||||||||||
(1) The prices shown are the high and low sale prices for the Company’s common stock, which trades on the Nasdaq Global Select Market under the symbol WTBA. The market quotations, reported by Nasdaq, do not include retail markup, markdown or commissions.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| SELECTED FINANCIAL MEASURES | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
| Return on average assets | 1.19 | % | 1.14 | % | 1.23 | % | 1.18 | % | ||||||||||||||||||
| Return on average equity | 15.68 | % | 13.49 | % | 15.61 | % | 13.98 | % | ||||||||||||||||||
Net interest margin (1) | 3.27 | % | 2.93 | % | 3.19 | % | 2.96 | % | ||||||||||||||||||
Efficiency ratio * (1) | 41.33 | % | 53.53 | % | 43.41 | % | 53.19 | % | ||||||||||||||||||
| As of June 30, | ||||||||||||||||||||||||||
| 2020 | 2019 | |||||||||||||||||||||||||
| Texas ratio* | 0.17 | % | 0.72 | % | ||||||||||||||||||||||
| Allowance for loan losses ratio | 0.97 | % | 0.93 | % | ||||||||||||||||||||||
| Allowance for loan losses ratio (excluding PPP loans) | 1.08 | % | 0.93 | % | ||||||||||||||||||||||
| Tangible common equity ratio | 7.62 | % | 8.55 | % | ||||||||||||||||||||||
* A lower ratio is more desirable.
(1) Non-GAAP financial measures - see reconciliation below.
Definitions of ratios:
•Return on average assets - annualized net income divided by average assets.
•Return on average equity - annualized net income divided by average stockholders’ equity.
•Net interest margin - annualized tax-equivalent net interest income divided by average interest-earning assets.
•Efficiency ratio - noninterest expense (excluding other real estate owned expense) divided by noninterest income (excluding net securities gains/losses and gains/losses on disposition of premises and equipment) plus tax-equivalent net interest income.
•Texas ratio - total nonperforming assets divided by tangible common equity plus the allowance for loan losses.
•Allowance for loan losses ratio - allowance for loan losses divided by total loans.
•Tangible common equity ratio - common equity less intangible assets (none held) divided by tangible assets.
WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (continued) (unaudited)
(dollars in thousands)
NON-GAAP FINANCIAL MEASURES
This report contains references to financial measures that are not defined in generally accepted accounting principles (GAAP). The following table reconciles the non-GAAP financial measures of net interest income, net interest margin and efficiency ratio on a fully taxable equivalent (FTE) basis to GAAP.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Reconciliation of net interest income and net interest margin on an FTE basis to GAAP: | ||||||||||||||||||||||||||
| Net interest income (GAAP) | $ | 20,747 | $ | 16,038 | $ | 39,211 | $ | 31,927 | ||||||||||||||||||
Tax-equivalent adjustment (1) | 194 | 200 | 372 | 472 | ||||||||||||||||||||||
Net interest income on an FTE basis (non-GAAP) | 20,941 | 16,238 | 39,583 | 32,399 | ||||||||||||||||||||||
Average interest-earning assets | 2,572,211 | 2,224,024 | 2,496,354 | 2,206,394 | ||||||||||||||||||||||
Net interest margin on an FTE basis (non-GAAP) | 3.27 | % | 2.93 | % | 3.19 | % | 2.96 | % | ||||||||||||||||||
Reconciliation of efficiency ratio on an FTE basis to GAAP: | ||||||||||||||||||||||||||
Net interest income on an FTE basis (non-GAAP) | $ | 20,941 | $ | 16,238 | $ | 39,583 | $ | 32,399 | ||||||||||||||||||
Noninterest income | 1,775 | 1,999 | 4,295 | 4,118 | ||||||||||||||||||||||
Adjustment for realized investment securities (gains) losses, net | 69 | (23) | 75 | 65 | ||||||||||||||||||||||
Adjustment for (gain) loss on sale of fixed assets | — | — | 2 | (307) | ||||||||||||||||||||||
Adjusted income | 22,785 | 18,214 | 43,955 | 36,275 | ||||||||||||||||||||||
Noninterest expense | 9,417 | 9,750 | 19,080 | 19,294 | ||||||||||||||||||||||
Efficiency ratio on an adjusted and FTE basis (non-GAAP) (2) | 41.33 | % | 53.53 | % | 43.41 | % | 53.19 | % | ||||||||||||||||||
(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.