West Bancorporation, Inc. Announces Record Quarterly Net Income, Declares Quarterly Dividend, Appoints New Director

West Des Moines, Iowa, UNITED STATES

WEST DES MOINES, Iowa, Oct. 24, 2019 (GLOBE NEWSWIRE) -- West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent company of West Bank, today reported that third quarter 2019 net income was $7.5 million, or $0.46 per diluted common share, which is the highest quarterly net income ever recorded by the Company.  This is compared to third quarter 2018 net income of $7.1 million, or $0.43 per diluted common share.  For the first nine months of 2019, net income was $21.1 million, or $1.28 per diluted common share, compared to $21.3 million, or $1.30 per diluted common share, for the first nine months of 2018.  On October 23, 2019, the Company’s Board of Directors declared a regular quarterly dividend of $0.21 per common share.  The dividend is payable on November 20, 2019, to stockholders of record on November 6, 2019.  Also, at its meeting, the Company’s Board of Directors appointed Patrick J. Donovan to the Company’s board. For more information about Mr. Donovan, refer to the Company’s 8-K, which is available on our website.

In March 2019, the Company announced that, through its subsidiary, West Bank, it was initiating a growth strategy in three new Minnesota markets and has since opened full service branch offices in Owatonna, Mankato and St. Cloud, Minnesota.  The financial results of  2019 have been impacted by compensation, professional fees and occupancy and equipment costs related to the Company’s new growth strategy, which totaled approximately $1.9 million on a pretax basis for the first nine months of 2019.  We estimate the pretax benefit from loans and deposits in these markets to be approximately $0.5 million through September 30, 2019.

“We continue to execute on our strategic priorities and are pleased to report an all-time record quarter for net income,” commented Dave Nelson, President and Chief Executive Officer of the Company.  “We have successfully opened three new full service branch offices in Minnesota and are encouraged by the new business activity in those new markets.  We have assembled teams of experienced bankers that are building relationships with local business owners and business leaders.  West Bank remains committed to our community focused business banking model with local leadership.  We believe we are uniquely positioned to seize opportunities in all of our markets with the seasoned business banking teams we bring to the table.  We are confident that this expansion sets us on a path for building shareholder value.”

Dave Nelson also commented, “In addition to the costs associated with our Minnesota expansion, we are experiencing pressure on our net interest margin due to the continued inversion of the U.S. Treasury yield curve and a highly competitive market for loans and deposits.  Despite these challenges, we continue to benefit from our ability to manage credit quality and our disciplined approach to expense management.  West Bank’s loan balances have increased by 14.7 percent as of September 30, 2019 compared to September 30, 2018.”

“In September, West Bank was named a 'Top Workplace in Iowa' by the Des Moines Register for the sixth consecutive year,” said Dave Nelson.  “This award is based solely on employee feedback.  We look forward to sharing this culture with our new Minnesota communities as we believe it gives us a competitive advantage in attracting bankers and business relationships.”

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 our 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, October 25, 2019. The telephone number for the conference call is 888-339-0814.  A recording of the call will be available until November 8, 2019, by dialing 877-344-7529.  The replay passcode is 10128404.

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: 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 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; and any other risks described in the “Risk Factors” sections of other 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.

Financial Information (unaudited)    
(in thousands)    
CONSOLIDATED BALANCE SHEETS September 30, 2019 September 30, 2018
Cash and due from banks $62,119  $26,406 
Federal funds sold 67,168  876 
Investment securities available for sale, at fair value 410,371  470,331 
Federal Home Loan Bank stock, at cost 11,685  10,061 
Loans 1,836,730  1,600,817 
Allowance for loan losses (17,042) (16,673)
Loans, net 1,819,688  1,584,144 
Premises and equipment, net 30,057  21,722 
Bank-owned life insurance 34,731  34,086 
Other assets 21,417  24,040 
Total assets $2,457,236  $2,171,666 
Liabilities and Stockholders’ Equity    
Noninterest-bearing demand $395,925  $396,079 
Demand 322,487  313,916 
Savings 1,015,443  943,717 
Time of $250 or more 71,669  33,752 
Other time 219,283  151,828 
Total deposits 2,024,807  1,839,292 
Federal funds purchased 3,535  26,245 
Other borrowings 197,387  115,505 
Other liabilities 27,370  6,006 
Stockholders’ equity 204,137  184,618 
Total liabilities and stockholders’ equity $2,457,236  $2,171,666 

Financial Information (continued) (unaudited)        
(in thousands)        
  Three Months Ended September 30, Nine Months Ended September 30,
Interest income        
Loans, including fees $22,203  $18,347  $63,699  $51,989 
Investment securities 2,798  3,495  9,080  9,862 
Other 611  78  819  336 
Total interest income 25,612  21,920  73,598  62,187 
Interest expense        
Deposits 6,771  4,768  19,405  11,578 
Federal funds purchased 17  61  219  140 
Other borrowings 1,708  1,404  4,931  4,067 
Total interest expense 8,496  6,233  24,555  15,785 
Net interest income 17,116  15,687  49,043  46,402 
Provision for loan losses 300  (400) 300  (250)
Net interest income after provision for loan losses 16,816  16,087  48,743  46,652 
Noninterest income        
Service charges on deposit accounts 630  649  1,841  1,925 
Debit card usage fees 426  422  1,235  1,254 
Trust services 572  445  1,536  1,465 
Increase in cash value of bank-owned life insurance 168  158  482  468 
Realized investment securities gains (losses), net 1  (78) (64) (103)
Other income 361  518  1,246  1,041 
Total noninterest income 2,158  2,114  6,276  6,050 
Noninterest expense        
Salaries and employee benefits 5,440  4,774  16,324  14,062 
Occupancy 1,379  1,250  3,956  3,731 
Data processing 695  670  2,091  2,020 
FDIC insurance   172  404  499 
Write-down of premises       333 
Other expenses 2,022  1,695  6,055  5,161 
Total noninterest expense 9,536  8,561  28,830  25,806 
Income before income taxes 9,438  9,640  26,189  26,896 
Income taxes 1,912  2,507  5,106  5,615 
Net income $7,526  $7,133  $21,083  $21,281 

Financial Information (continued) (unaudited)        
  Net Income      
  Basic Diluted Dividends High Low
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 
4th Quarter $0.44  $0.44  $0.20  $23.88  $18.06 
3rd Quarter 0.44  0.43  0.20  26.51  23.10 
2nd Quarter 0.42  0.41  0.20  26.95  22.65 
1st Quarter 0.46  0.45  0.18  26.85  23.65 

(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 September 30, Nine Months Ended September 30,
Return on average assets 1.22% 1.28% 1.20% 1.32%
Return on average equity 14.76% 15.40% 14.25% 15.77%
Net interest margin 2.91% 2.95% 2.92% 3.05%
Efficiency ratio* 49.41% 47.71% 52.26% 47.93%
    As of September 30,
      2019 2018
Texas ratio*     0.24% 0.92%
Allowance for loan losses ratio     0.93% 1.04%
Tangible common equity ratio     8.31% 8.50%

* A lower ratio is more desirable.

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(1) - annualized tax-equivalent net interest income divided by average interest-earning assets.
  • Efficiency ratio(1) - 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.

        (1) Non-GAAP financial measures - see reconciliation below.


Financial Information (continued) (unaudited)
(dollars in thousands)


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 September 30, Nine Months Ended September 30,
  2019 2018 2019 2018
Reconciliation of net interest income and net interest margin on an FTE basis to GAAP:        
Net interest income (GAAP) $17,116  $15,687  $49,043  $46,402 
Tax-equivalent adjustment (1) 28  49  96  574 
Net interest income on an FTE basis (non-GAAP) 17,144  15,736  49,139  46,976 
Average interest-earning assets 2,334,365  2,118,129  2,249,520  2,058,934 
Net interest margin on an FTE basis (non-GAAP) 2.91% 2.95% 2.92% 3.05%
Reconciliation of efficiency ratio on an FTE basis to GAAP:        
Net interest income on an FTE basis (non-GAAP) $17,144  $15,736  $49,139  $46,976 
Noninterest income 2,158  2,114  6,276  6,050 
Adjustment for realized investment securities (gains) losses, net (1) 78  64  103 
Adjustment for losses on disposal of premises and equipment, net   14    14 
Adjustment for gain on sale of premises     (307)  
Adjusted income 19,301  17,942  55,172  53,143 
Noninterest expense 9,536  8,561  28,830  25,806 
Adjustment for write-down of premises       (333)
  Adjusted expense 9,536  8,561  28,830  25,473 
Efficiency ratio on an adjusted and FTE basis (non-GAAP) (2) 49.41% 47.71% 52.26% 47.93%

(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 financial performance.  It is a standard measure of comparison within the banking industry.

For more information contact:
Doug Gulling, Executive Vice President, Treasurer and Chief Financial Officer (515) 222-2309