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West Bancorporation, Inc. Announces Second Quarter Net Income, Declares Quarterly Dividend

WEST DES MOINES, Iowa, July 25, 2019 (GLOBE NEWSWIRE) -- West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent company of West Bank, today reported that second quarter 2019 net income was $6.7 million, or $0.41 per diluted common share, compared to second quarter 2018 net income of $6.8 million, or $0.41 per diluted common share.  For the first six months of 2019, net income was $13.6 million, or $0.83 per diluted common share, compared to $14.1 million, or $0.86 per diluted common share, for the first six months of 2018.  On March 4, 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 were impacted by compensation, professional fees and occupancy costs related to the Company’s new growth strategy, which totaled $1.0 million on a pretax basis for the first six months of 2019.

On July 24, 2019, the Company’s Board of Directors declared a regular quarterly dividend of $0.21 per common share.  The dividend is payable on August 21, 2019, to stockholders of record on August 7, 2019.

“We continue to execute well on our strategic priorities and are pleased to report solid financial results,” commented Dave Nelson, President and Chief Executive Officer of the Company.  “We have successfully executed the opening of 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.  Using those relationships, we have assembled local community boards to guide our efforts in these three new markets. This approach is consistent with the path we have taken in other new market initiatives.  We are confident that this expansion sets us on a path for building shareholder value.”

In addition, Dave Nelson commented, “West Bank continues to focus on building and improving the performance of our core bank operations.  West Bank’s loan balances have increased by 16.8 percent as of June 30, 2019 compared to June 30, 2018.  We see opportunities in all of our markets for stable organic loan growth while staying committed to our disciplined approach to credit quality.  Competition for customer deposits remains strong and continues to put upward pressure on the cost of funds.”

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, July 26, 2019. The telephone number for the conference call is 888-339-0814.  A recording of the call will be available until August 9, 2019, by dialing 877-344-7529.  The replay passcode is 10127162.

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 metropolitan area, one office in Coralville, Iowa, and one office in Rochester, Minnesota.  West Bank recently opened branch offices in Owatonna, Mankato and St. Cloud, Minnesota.

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   June 30, 2019   June 30, 2018
Cash and due from banks   $ 45,286     $ 36,964  
Federal funds sold   47,278     28,139  
Investment securities available for sale, at fair value   398,534     526,793  
Federal Home Loan Bank stock, at cost   10,826     9,202  
Loans   1,792,718     1,534,404  
Allowance for loan losses   (16,737 )   (16,518 )
Loans, net   1,775,981     1,517,886  
Premises and equipment, net   30,447     22,053  
Bank-owned life insurance   34,563     33,928  
Other assets   19,961     22,201  
Total assets   $ 2,362,876     $ 2,197,166  
Liabilities and Stockholders’ Equity        
Noninterest-bearing demand   $ 373,627     $ 381,281  
Demand   321,747     326,567  
Savings   974,769     1,004,926  
Time of $250 or more   50,980     29,382  
Other time   244,664     149,773  
Total deposits   1,965,787     1,891,929  
Federal funds purchased   2,280     860  
Other borrowings   172,035     117,153  
Other liabilities   20,839     4,872  
Stockholders’ equity   201,935     182,352  
Total liabilities and stockholders’ equity   $ 2,362,876     $ 2,197,166  

Financial Information (continued) (unaudited)                
(in thousands)                
    Three Months Ended June 30,   Six Months Ended June 30,
CONSOLIDATED STATEMENTS OF INCOME   2019   2018   2019   2018
Interest income                
Loans, including fees   $ 21,108     $ 17,168     $ 41,496     $ 33,642  
Investment securities   3,117     3,192     6,282     6,367  
Other   110     177     208     258  
Total interest income   24,335     20,537     47,986     40,267  
Interest expense                
Deposits   6,670     3,798     12,634     6,810  
Federal funds purchased   115     52     202     79  
Other borrowings   1,512     1,388     3,223     2,663  
Total interest expense   8,297     5,238     16,059     9,552  
Net interest income   16,038     15,299     31,927     30,715  
Provision for loan losses               150  
Net interest income after provision for loan losses   16,038     15,299     31,927     30,565  
Noninterest income                
Service charges on deposit accounts   600     627     1,211     1,276  
Debit card usage fees   434     433     809     832  
Trust services   481     575     964     1,020  
Increase in cash value of bank-owned life insurance   162     152     314     310  
Realized investment securities gains (losses), net   23     (25 )   (65 )   (25 )
Other income   299     261     885     523  
Total noninterest income   1,999     2,023     4,118     3,936  
Noninterest expense                
Salaries and employee benefits   5,424     4,775     10,884     9,288  
Occupancy   1,344     1,258     2,577     2,481  
Data processing   716     674     1,396     1,350  
FDIC insurance   185     165     404     327  
Write-down of premises       333         333  
Other expenses   2,081     1,753     4,033     3,466  
Total noninterest expense   9,750     8,958     19,294     17,245  
Income before income taxes   8,287     8,364     16,751     17,256  
Income taxes   1,629     1,600     3,194     3,108  
Net income   $ 6,658     $ 6,764     $ 13,557     $ 14,148  

Financial Information (continued) (unaudited)                
    Net Income            
    Basic   Diluted   Dividends   High   Low
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 June 30,   Six Months Ended June 30,
SELECTED FINANCIAL MEASURES   2019   2018   2019   2018
Return on average assets   1.14%   1.27%   1.18%   1.34%
Return on average equity   13.49%   15.15%   13.98%   15.96%
Net interest margin   2.90%   3.05%   2.92%   3.11%
Efficiency ratio*   54.05%   49.05%   53.79%   48.05%
        As of June 30,
            2019   2018
Texas ratio*           0.72%   1.07%
Allowance for loan losses ratio           0.93%   1.08%
Tangible common equity ratio           8.55%   8.30%

* 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 June 30,   Six Months Ended June 30,
    2019   2018   2019   2018
Reconciliation of net interest income and annualized net interest margin on an FTE basis to GAAP:                
Net interest income (GAAP)   $ 16,038     $ 15,299     $ 31,927     $ 30,715  
Tax-equivalent adjustment (1)   25     236     68     525  
Net interest income on an FTE basis (non-GAAP)   16,063     15,535     31,995     31,240  
Average interest-earning assets   2,224,024     2,044,821     2,206,394     2,028,846  
Net interest margin on an FTE basis (non-GAAP)   2.90 %   3.05 %   2.92 %   3.11 %
Reconciliation of efficiency ratio on an FTE basis to GAAP:                
Net interest income on an FTE basis (non-GAAP)   $ 16,063     $ 15,535     $ 31,995     $ 31,240  
Noninterest income   1,999     2,023     4,118     3,936  
Adjustment for realized investment securities (gains) losses, net   (23 )   25     65     25  
Adjustment for gain on sale of premises           (307 )    
Adjusted income   18,039     17,583     35,871     35,201  
Noninterest expense   9,750     8,958     19,294     17,245  
Adjustment for write-down of premises       (333 )       (333 )
Adjusted expense   9,750     8,625     19,294     16,912  
Efficiency ratio on an adjusted and FTE basis (non-GAAP) (2)   54.05 %   49.05 %   53.79 %   48.05 %

(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