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West Bancorporation, Inc. Announces Record Net Income for the Second Quarter of 2021, Declares Quarterly Dividend

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WEST DES MOINES, Iowa, July 29, 2021 (GLOBE NEWSWIRE) -- West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent company of West Bank, today reported that second quarter 2021 net income was $13.2 million, or $0.79 per diluted common share, compared to second quarter 2020 net income of $8.0 million, or $0.48 per diluted common share. For the first six months of 2021, net income was $25.0 million, or $1.49 per diluted common share, compared to $16.1 million, or $0.97 per diluted common share, for the first six months of 2020. On July 28, 2021, the Company’s Board of Directors declared a regular quarterly dividend of $0.24 per common share. The dividend is payable on August 25, 2021, to stockholders of record on August 11, 2021.

Dave Nelson, President and Chief Executive Officer of the Company, commented, “As the country and our communities continue to emerge from the economic uncertainties created by the COVID-19 pandemic, our bankers are dedicated to executing our strategic objectives, which include organic loan growth and superior credit quality resulting from disciplined underwriting. We are pleased to have loan growth (exclusive of Paycheck Protection Program (PPP) loan activity) of 6.0 percent for the first six months of 2021, and year over year loan growth of 12.6 percent (also exclusive of PPP loan activity). Our credit quality continues to improve as all remaining COVID-related loan modifications expired in the second quarter and those loans returned to normal payment status. This improvement in economic conditions and credit quality resulted in a negative provision for loan losses of $2.0 million in the second quarter compared to a provision for loan losses of $3.0 million in the second quarter last year.”

Dave Nelson also commented, “We continue to build our brand in Minnesota. Construction of our permanent branch office in Sartell, Minnesota, a suburb of St. Cloud, is expected to be completed before the end of the year. We are also in the planning phase for the construction of a permanent branch office in Mankato, Minnesota.”

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 financial results on a conference call scheduled for 10:00 a.m. Central Time tomorrow, Friday, July 30, 2021. The telephone number for the conference call is 888-339-0814. A recording of the call will be available until August 13, 2021, by dialing 877-344-7529. The replay passcode is 10150541.

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 seven 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 COVID-19 pandemic, including its 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; 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; 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, 2021

June 30, 2020

Assets

Cash and due from banks

$

31,978

$

54,175

Federal funds sold

238,845

62,494

Securities available for sale, at fair value

601,462

342,017

Federal Home Loan Bank stock, at cost

10,189

12,307

Loans

2,309,527

2,199,688

Allowance for loan losses

(28,042

)

(21,363

)

Loans, net

2,281,485

2,178,325

Premises and equipment, net

30,753

28,655

Bank-owned life insurance

43,146

35,187

Other assets

30,902

27,163

Total assets

$

3,268,760

$

2,740,323

Liabilities and Stockholders’ Equity

Deposits:

Noninterest-bearing demand

$

703,691

$

590,487

Interest-bearing:

Demand

487,642

378,931

Savings

1,391,231

1,081,743

Time of $250 or more

46,660

61,456

Other time

196,065

143,092

Total deposits

2,825,289

2,255,709

Federal funds purchased

3,605

5,755

Other borrowings

165,744

223,181

Other liabilities

27,596

46,991

Stockholders’ equity

246,526

208,687

Total liabilities and stockholders’ equity

$

3,268,760

$

2,740,323


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

2021

2020

2021

2020

Interest income

Loans, including fees

$

23,139

$

22,332

$

47,177

$

44,643

Securities

2,607

2,313

4,810

4,993

Other

75

12

144

241

Total interest income

25,821

24,657

52,131

49,877

Interest expense

Deposits

1,995

2,351

3,872

7,397

Federal funds purchased

1

3

2

19

Other borrowings

975

1,556

2,286

3,250

Total interest expense

2,971

3,910

6,160

10,666

Net interest income

22,850

20,747

45,971

39,211

Provision for loan losses

(2,000

)

3,000

(1,500

)

4,000

Net interest income after provision for loan losses

24,850

17,747

47,471

35,211

Noninterest income

Service charges on deposit accounts

578

531

1,160

1,134

Debit card usage fees

511

391

953

773

Trust services

691

461

1,343

924

Increase in cash value of bank-owned life insurance

240

136

460

294

Loan swap fees

42

3

42

589

Realized investment securities gains (losses), net

36

(69

)

40

(75

)

Other income

417

322

982

656

Total noninterest income

2,515

1,775

4,980

4,295

Noninterest expense

Salaries and employee benefits

5,672

5,318

11,280

10,602

Occupancy

1,199

1,217

2,427

2,430

Data processing

617

554

1,219

1,184

FDIC insurance

426

292

830

529

Other expenses

2,612

2,036

5,041

4,335

Total noninterest expense

10,526

9,417

20,797

19,080

Income before income taxes

16,839

10,105

31,654

20,426

Income taxes

3,600

2,136

6,663

4,368

Net income

$

13,239

$

7,969

$

24,991

$

16,058


WEST BANCORPORATION, INC. AND SUBSIDIARY

Financial Information (continued) (unaudited)

PER COMMON SHARE

MARKET INFORMATION (1)

Net Income

Basic

Diluted

Dividends

High

Low

2021

2nd Quarter

$

0.80

$

0.79

$

0.24

$

29.90

$

23.92

1st Quarter

0.71

0.70

0.22

26.78

18.86

2020

4th Quarter

$

0.52

$

0.52

$

0.21

$

21.79

$

15.53

3rd Quarter

0.49

0.49

0.21

17.99

15.50

2nd Quarter

0.48

0.48

0.21

20.67

14.50

1st Quarter

0.49

0.49

0.21

25.68

13.74

(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

2021

2020

2021

2020

Return on average assets

1.65

%

1.19

%

1.59

%

1.23

%

Return on average equity

22.20

%

15.68

%

21.50

%

15.61

%

Net interest margin on a FTE basis (1)

2.99

%

3.27

%

3.08

%

3.19

%

Efficiency ratio (1)(2)

41.11

%

41.33

%

40.43

%

43.41

%

As of June 30,

2021

2020

Texas ratio(2)

5.31

%

0.17

%

Allowance for loan losses ratio

1.21

%

0.97

%

Allowance for loan losses ratio, excluding PPP loans (1)(3)

1.26

%

1.08

%

Tangible common equity ratio

7.54

%

7.62

%

(1) Non-GAAP financial measures - see reconciliation below
(2) A lower ratio is more desirable
(3) Paycheck Protection Program (PPP)

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.

  • Allowance for loan losses ratio, excluding PPP loans - allowance for loan losses divided by total loans minus the amount of PPP 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 press release 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 and net interest margin on a fully taxable equivalent (FTE) basis, efficiency ratio on an adjusted and FTE basis, loans, net of PPP loans and allowance for loan losses ratio, excluding PPP loans, to their most directly comparable measures under GAAP.

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Reconciliation of net interest income and net interest margin on a FTE basis to GAAP:

Net interest income (GAAP)

$

22,850

$

20,747

$

45,971

$

39,211

Tax-equivalent adjustment (1)

270

194

499

372

Net interest income on a FTE basis (non-GAAP)

23,120

20,941

46,470

39,583

Average interest-earning assets

3,102,649

2,572,211

3,041,519

2,496,354

Net interest margin on a FTE basis (non-GAAP)

2.99

%

3.27

%

3.08

%

3.19

%

Reconciliation of efficiency ratio on an adjusted and FTE basis to GAAP:

Net interest income on a FTE basis (non-GAAP)

$

23,120

$

20,941

$

46,470

$

39,583

Noninterest income

2,515

1,775

4,980

4,295

Adjustment for realized securities (gains) losses, net

(36)

69

(40)

75

Adjustment for losses on disposal of premises and equipment, net

5

29

2

Adjusted income

25,604

22,785

51,439

43,955

Noninterest expense

10,526

9,417

20,797

19,080

Efficiency ratio on an adjusted and FTE basis (non-GAAP) (2)

41.11

%

41.33

%

40.43

%

43.41

%

As of June 30,

2021

2020

Reconciliation of allowance for loan losses ratio, excluding PPP loans:

Loans outstanding (GAAP)

$

2,309,527

$

2,199,688

Less: PPP loans

(84,573)

(223,435)

Loans, net of PPP loans (non-GAAP)

2,224,954

1,976,253

Allowance for loan losses

28,042

21,363

Allowance for loan losses ratio, excluding PPP loans (non-GAAP)

1.26

%

1.08

%

(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.

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