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West Bancorporation, Inc. Announces Net Income for the First Quarter of 2020, Declares Quarterly Dividend

WEST DES MOINES, Iowa, April 23, 2020 (GLOBE NEWSWIRE) -- West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent company of West Bank, today reported that first quarter 2020 net income was $8.1 million, or $0.49 per diluted common share, compared to first quarter 2019 net income of $6.9 million, or $0.42 per diluted common share.  On April 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 four quarters.  The dividend is payable on May 20, 2020, to stockholders of record on May 6, 2020.

“The uncertainty of the COVID-19 pandemic presents unprecedented challenges for our customers, employees, shareholders and communities,” commented Dave Nelson, President and Chief Executive Officer of the Company.  “The economic impact of the pandemic is highly dependent on variables that are extremely difficult to predict, and we are focused on supporting our customers through this difficult period of time.  We believe our disciplines of maintaining strong capital levels and exceptional asset quality have positioned West Bank to support the current and future credit and banking needs of our customers.  We are committed to supporting our customers, employees and communities during this crisis and will assist them in meeting the challenges that lie ahead.  While West Bank, like all banks, is not immune from the effects of COVID-19, we will work diligently to bring all of our resources to the table as we face the social and economic challenges that lie ahead.”

Over the past several years, the Company has increased the amount of the quarterly dividend during the second quarter of each year.  Even though the Company had strong earnings in the first quarter of 2020, due to the uncertainty facing the economy, the Board decided to keep the dividend at the current level of $0.21 per share.  The Board will evaluate the dividend on a quarterly basis as the Company works through the COVID-19 pandemic.

Dave Nelson also commented, “In March 2020, we recognized the one year anniversary of our expansion in Minnesota, and as of March 31, 2020, we reached loan balances totaling $143.2 million in the three new markets in Mankato, Owatonna and St. Cloud, Minnesota.
We are pleased with our continued strong financial performance in the first quarter of 2020, and believe that our history of strong capital,  earnings and credit quality put us in a position to support our customers, employees, shareholders and communities during this period of unprecedented challenges.”

West Bank is proud to assist the federal government in protecting the economy by participating as a lender in the Paycheck Protection Program.  From the inception of the program through April 22, 2020, we have processed 596 applications totaling $206 million.  In addition, we have taken steps to protect our employees and customers from the pandemic.  Lobbies are closed except by appointment, and customers are encouraged to use drive-up and online services.  Additionally, many employees are working at home.

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, April 24, 2020. The telephone number for the conference call is 888-339-0814.  A recording of the call will be available until May 8, 2020, by dialing 877-344-7529.  The replay passcode is 10137422.

About West Bancorporation, Inc. (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 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.

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

Financial Information (unaudited)        
(in thousands)        
CONSOLIDATED BALANCE SHEETS   March 31, 2020   March 31, 2019
Cash and due from banks   $ 65,256     $ 45,461  
Federal funds sold   1,141     2,078  
Investment securities available for sale, at fair value   372,420     433,963  
Federal Home Loan Bank stock, at cost   13,739     11,639  
Loans   1,994,432     1,748,830  
Allowance for loan losses   (18,332 )   (16,737 )
Loans, net   1,976,100     1,732,093  
Premises and equipment, net   29,129     30,510  
Bank-owned life insurance   35,051     34,401  
Other assets   26,773     21,946  
Total assets   $ 2,519,609     $ 2,312,091  
Liabilities and Stockholders’ Equity        
Noninterest-bearing demand   $ 408,144     $ 388,686  
Demand   357,313     309,975  
Savings   1,025,749     1,007,634  
Time of $250 or more   71,789     40,689  
Other time   157,130     161,339  
Total deposits   2,020,125     1,908,323  
Federal funds purchased   32,340     17,735  
Other borrowings   222,958     173,686  
Other liabilities   43,493     16,077  
Stockholders’ equity   200,693     196,270  
Total liabilities and stockholders’ equity   $ 2,519,609     $ 2,312,091  

Financial Information (continued) (unaudited)        
(in thousands)        
    Three Months Ended March 31,
Interest income        
Loans, including fees   $ 22,311     $ 20,388  
Investment securities   2,680     3,165  
Other   229     98  
Total interest income   25,220     23,651  
Interest expense        
Deposits   5,046     5,964  
Federal funds purchased   16     87  
Other borrowings   1,694     1,711  
Total interest expense   6,756     7,762  
Net interest income   18,464     15,889  
Provision for loan losses   1,000      
Net interest income after provision for loan losses   17,464     15,889  
Noninterest income        
Service charges on deposit accounts   603     611  
Debit card usage fees   382     375  
Trust services   463     483  
Increase in cash value of bank-owned life insurance   158     152  
Loan swap fees   586      
Realized investment securities losses, net   (6 )   (88 )
Other income   334     586  
Total noninterest income   2,520     2,119  
Noninterest expense        
Salaries and employee benefits   5,284     5,460  
Occupancy   1,360     1,233  
Data processing   672     680  
FDIC insurance   237     219  
Other expenses   2,110     1,952  
Total noninterest expense   9,663     9,544  
Income before income taxes   10,321     8,464  
Income taxes   2,232     1,565  
Net income   $ 8,089     $ 6,899  

Financial Information (continued) (unaudited)                
    Net Income            
    Basic   Diluted   Dividends   High   Low
1st Quarter   $ 0.49     $ 0.49     $ 0.21     $ 25.68     $ 13.74  
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 March 31,
Return on average assets   1.29 %   1.22 %
Return on average equity   15.54 %   14.49 %
Net interest margin   3.10 %   2.99 %
Efficiency ratio*   45.64 %   52.84 %
    As of March 31,
    2020   2019
Texas ratio*   0.22 %   0.86 %
Allowance for loan losses ratio   0.92 %   0.96 %
Tangible common equity ratio   7.97 %   8.49 %

* 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 March 31,
    2020   2019
Reconciliation of net interest income and net interest margin on an FTE basis to GAAP:        
Net interest income (GAAP)   $ 18,464     $ 15,889  
Tax-equivalent adjustment (1)   178     272  
Net interest income on an FTE basis (non-GAAP)   18,642     16,161  
Average interest-earning assets   2,420,497     2,188,567  
Net interest margin on an FTE basis (non-GAAP)   3.10 %   2.99 %
Reconciliation of efficiency ratio on an FTE basis to GAAP:        
Net interest income on an FTE basis (non-GAAP)   $ 18,642     $ 16,161  
Noninterest income   2,520     2,119  
Adjustment for realized investment securities losses, net   6     88  
Adjustment for (gain) loss on sale of fixed assets   2     (307 )
Adjusted income   21,170     18,061  
Noninterest expense   9,663     9,544  
Efficiency ratio on an adjusted and FTE basis (non-GAAP) (2)   45.64 %   52.84 %

(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.

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