West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent
company of West Bank, today reported 2022 net income of $46.4
million, or $2.76 per diluted common share, compared to 2021 net
income of $49.6 million, or $2.95 per diluted common share. Net
income for the fourth quarter 2022 was $8.9 million, or $0.53 per
diluted common share, compared to fourth quarter 2021 net income of
$11.9 million, or $0.71 per diluted common share. On January 25,
2023, the Company’s Board of Directors declared a regular quarterly
dividend of $0.25 per common share. The dividend is payable on
February 22, 2023, to stockholders of record on February 8, 2023.
David Nelson, President and Chief Executive
Officer of the Company, commented, “Our company had another strong
year, the second best year in our company’s history. Our credit
quality continues to be pristine and we remain diligent in
monitoring and managing our credit risk as we anticipate increasing
economic challenges resulting from the Federal Reserve’s aggressive
interest rate hikes in 2022. Loan growth in 2022 exceeded eleven
percent and for the sixth consecutive quarter end, we had no loans
greater than 30 days past due.”
David Nelson added, “Rising interest rates in
2022 have increased the average yield of our loan portfolio.
However, changes in liquidity and competitive deposit pricing, as a
result of volatility and uncertainty in the interest rate
environment, have increased our cost of funds and resulted in a
decline in our net interest income and net interest margin. We
expect to continue to experience a lower than normal net interest
margin while the Federal Reserve continues raising short-term
rates. Our capital position is strong and we remain focused on
delivering high quality services and products through our very
successful relationship based business model.”
Fourth Quarter and Year Ended 2022
Financial Highlights
|
|
|
Quarter EndedDecember 31,2022 |
|
Year EndedDecember 31,2022 |
|
Net Income (in thousands) |
|
$ |
8,946 |
|
|
$ |
46,399 |
|
|
Return on Average Equity |
|
|
17.75 |
% |
|
|
20.71 |
% |
|
Return on Average Assets |
|
|
1.01 |
% |
|
|
1.32 |
% |
|
Efficiency ratio (a non-GAAP
measure) |
|
|
50.42 |
% |
|
|
43.70 |
% |
|
Nonperforming assets to total
assets |
|
|
0.01 |
% |
|
|
0.01 |
% |
Fourth Quarter 2022 Compared to Third
Quarter 2022 Overview
- Loans increased $128.7 million in
the fourth quarter of 2022, or 19.7 percent annualized.
- No provision for loan losses was
recorded in either the fourth quarter of 2022 or the third quarter
of 2022.
- The allowance for loan losses to
total loans was 0.93 percent at December 31, 2022, compared to 0.97
percent at September 30, 2022. There were no loans greater than 30
days past due at December 31, 2022, which was the sixth consecutive
quarter in which no loans were greater than 30 days past due.
Nonaccrual loans at December 31, 2022, consisted of one loan with a
balance of $322 thousand.
- Deposits increased $57.6 million in
the fourth quarter of 2022. Included in deposits were brokered
deposits totaling $272.7 million at December 31, 2022, compared to
$258.1 million at September 30, 2022.
- The efficiency ratio (a non-GAAP
measure) was 50.42 percent for the fourth quarter of 2022, compared
to 43.16 percent for the third quarter of 2022. The increase in the
efficiency ratio is primarily the result of the decline in tax
equivalent net interest income.
- Net interest margin, on a fully
tax-equivalent basis (a non-GAAP measure), was 2.49 percent for the
fourth quarter of 2022, compared to 2.78 percent for the third
quarter of 2022. Net interest income for the fourth quarter of 2022
was $20.7 million, compared to $23.0 million for the third quarter
of 2022. The rising cost of deposits and borrowed funds and the
change in mix of liabilities has increased interest expense faster
than the increase in interest income from loan repricing and loan
growth.
- The tangible common equity ratio
was 5.84 percent at December 31, 2022, an increase of 19 basis
points compared to 5.65 percent at September 30, 2022 due to a
modest increase in the market value of the securities portfolio,
which decreased the accumulated other comprehensive loss.
Fourth Quarter 2022
Compared to Fourth Quarter 2021 Overview
- Loans increased $286.6 million at
December 31, 2022, or 11.7 percent, compared to December 31,
2021.
- Deposits decreased $135.6 million
at December 31, 2022, compared to December 31, 2021. Included in
deposits were brokered deposits totaling $272.7 million at December
31, 2022, compared to $176.0 million at December 31, 2021. The
decline in deposits was primarily attributable to customers using
their own liquidity to fund business transactions, instead of using
debt, and customers seeking higher yielding investment options for
excess deposits accumulated over the past couple of years.
- Borrowed funds increased to $485.9
million at December 31, 2022, compared to $199.9 million at
December 31, 2021. The increase included $58.9 million in
subordinated notes that were issued in June 2022, $30.0 million in
FHLB Advances associated with a long-term interest rate swap and
$197.1 million in federal funds purchased and other short-term
borrowings.
- The efficiency ratio (a non-GAAP
measure) was 50.42 percent for the fourth quarter of 2022, compared
to 43.32 percent for the fourth quarter of 2021. Tax-equivalent net
interest income decreased in the fourth quarter of 2022 compared to
the fourth quarter of 2021 due to the increased cost of deposits
and borrowed funds. Additionally, salaries and benefits were higher
in the fourth quarter of 2022 compared to the fourth quarter of
2021, due primarily to annual compensation adjustments.
- Net interest margin, on a fully
tax-equivalent basis (a non-GAAP measure), was 2.49 percent for the
fourth quarter of 2022, compared to 3.00 percent for the fourth
quarter of 2021. Net interest income for the fourth quarter of 2022
was $20.7 million, compared to $24.6 million for the fourth quarter
of 2021. Net interest income in the fourth quarter of 2021 included
$912 thousand of PPP loan interest income, compared to $5 thousand
in the fourth quarter of 2022. In 2022, the rising cost of deposits
and borrowed funds and the change in mix of liabilities has
increased interest expense faster than the increase in interest
income from loan repricing and loan growth.
Year Ended 2022 Compared to Year Ended
2021 Overview
- The provision for loan losses
recorded in 2022 was negative $2.5 million, compared to a negative
provision of $1.5 million in 2021. The negative provision in 2022
was primarily due to the reversal of a specific reserve on an
impaired loan and the reduction of certain qualitative factors
resulting from the sustained performance of loans after the
expiration of COVID-19 modifications and continued improvement in
classified loans. The negative provision in 2021 was primarily due
to the reduction of certain qualitative factors resulting from
improvements in economic conditions and lack of loan losses during
the COVID-19 pandemic.
- Net interest income declined $3.3
million, or 3.5 percent, in 2022 compared to 2021. Net interest
margin decreased to 2.76 percent in 2022, compared to 3.05 percent
in 2021. The decline in both net interest income and net interest
margin was primarily due to the rising cost of deposits and
borrowed funds and the change in mix of liabilities, which has
increased interest expense faster than the increase in interest
income from loan repricing and loan growth.
- Noninterest income increased $479
thousand, or 4.9 percent, in 2022 compared to 2021. This increase
was primarily due to the increase in loan swap fees.
- Noninterest expense increased $1.7
million, or 3.9 percent, in 2022 compared to 2021. The increase was
primarily due to an increase of $2.6 million, or 11.2 percent, in
salaries and benefits resulting from an increase in expenses
related to the issuance of restricted stock units, an increase in
full time equivalent employees and annual compensation adjustments.
This was partially offset by a decrease of $822 thousand in FDIC
insurance expense primarily due to reductions in the assessment
rate resulting from capital injections into the Bank.
The Company plans to file its report on Form
10-K with the Securities and Exchange Commission on or before
February 23, 2023. Please refer to that document for a more
in-depth discussion of the Company’s financial results. The Form
10-K will be available on the Investor Relations section of West
Bank’s website at www.westbankstrong.com.
The Company will discuss its results in a
conference call scheduled for 2:00 p.m. Central Time on Thursday,
January 26, 2023. The telephone number for the conference call is
844-200-6205. The access code for the conference call is 214929. A
recording of the call will be available until February 9, 2023, by
dialing 866-813-9403. The replay access code is 559343.
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 small- to medium-sized businesses and consumers. West
Bank has six 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, including
the effects of recent rate increases by the Federal Reserve;
fluctuations in the values of the securities held in our investment
portfolio, including as a result of rising interest rates, which
has resulted in unrealized losses in our portfolio; competitive
pressures, including from non-bank competitors such as “fintech”
companies and digital asset service providers; pricing pressures on
loans and deposits; our ability to successfully manage liquidity
risk; changes in credit and other risks posed by the Company’s loan
portfolio, 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 implementation of the current expected credit loss
(CECL) accounting standard) or regulatory requirements; changes in
local, national and international economic conditions, including
rising rates of inflation; 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, including the Russian
invasion of Ukraine, widespread disease or pandemics, such as the
COVID-19 pandemic, or other adverse external events; risks related
to climate change and the negative impact it may have on our
customers and their businesses; developments and uncertainty
related to the future use and availability of some reference rates,
such as the expected discontinuation of the London Interbank
Offered Rate and the development of other alternative reference
rates; changes to U.S. tax laws, regulations and guidance; talent
and labor shortages; the new 1% excise tax on stock buybacks by
publicly traded companies; 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) |
|
|
As of |
CONDENSED BALANCE SHEETS |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
Assets |
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
24,896 |
|
|
$ |
58,342 |
|
|
$ |
26,174 |
|
|
$ |
21,896 |
|
|
$ |
17,555 |
|
Interest-bearing deposits |
|
|
1,643 |
|
|
|
1,049 |
|
|
|
766 |
|
|
|
122,359 |
|
|
|
175,270 |
|
Securities available for sale,
at fair value |
|
|
664,115 |
|
|
|
671,752 |
|
|
|
731,970 |
|
|
|
797,912 |
|
|
|
758,822 |
|
Federal Home Loan Bank stock,
at cost |
|
|
19,336 |
|
|
|
18,350 |
|
|
|
15,532 |
|
|
|
10,269 |
|
|
|
9,965 |
|
Loans |
|
|
2,742,836 |
|
|
|
2,614,145 |
|
|
|
2,573,129 |
|
|
|
2,485,366 |
|
|
|
2,456,196 |
|
Allowance for loan losses |
|
|
(25,473 |
) |
|
|
(25,418 |
) |
|
|
(25,434 |
) |
|
|
(27,623 |
) |
|
|
(28,364 |
) |
Loans, net |
|
|
2,717,363 |
|
|
|
2,588,727 |
|
|
|
2,547,695 |
|
|
|
2,457,743 |
|
|
|
2,427,832 |
|
Premises and equipment,
net |
|
|
53,124 |
|
|
|
44,592 |
|
|
|
41,807 |
|
|
|
40,898 |
|
|
|
34,568 |
|
Bank-owned life insurance |
|
|
44,573 |
|
|
|
44,318 |
|
|
|
44,072 |
|
|
|
43,836 |
|
|
|
43,609 |
|
Other assets |
|
|
88,168 |
|
|
|
90,387 |
|
|
|
66,775 |
|
|
|
52,156 |
|
|
|
32,580 |
|
Total assets |
|
$ |
3,613,218 |
|
|
$ |
3,517,517 |
|
|
$ |
3,474,791 |
|
|
$ |
3,547,069 |
|
|
$ |
3,500,201 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
$ |
2,880,408 |
|
|
$ |
2,822,847 |
|
|
$ |
2,842,451 |
|
|
$ |
3,091,252 |
|
|
$ |
3,016,005 |
|
Federal funds purchased and
other short-term borrowings |
|
|
200,000 |
|
|
|
204,500 |
|
|
|
133,000 |
|
|
|
— |
|
|
|
2,880 |
|
Other borrowings |
|
|
285,855 |
|
|
|
255,789 |
|
|
|
255,751 |
|
|
|
196,954 |
|
|
|
196,986 |
|
Other liabilities |
|
|
35,843 |
|
|
|
35,617 |
|
|
|
27,400 |
|
|
|
22,383 |
|
|
|
24,002 |
|
Stockholders’ equity |
|
|
211,112 |
|
|
|
198,764 |
|
|
|
216,189 |
|
|
|
236,480 |
|
|
|
260,328 |
|
Total liabilities and stockholders’ equity |
|
$ |
3,613,218 |
|
|
$ |
3,517,517 |
|
|
$ |
3,474,791 |
|
|
$ |
3,547,069 |
|
|
$ |
3,500,201 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended |
AVERAGE BALANCES |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
Assets |
|
$ |
3,511,717 |
|
|
$ |
3,475,894 |
|
|
$ |
3,503,686 |
|
|
$ |
3,544,564 |
|
|
$ |
3,421,020 |
|
Loans |
|
|
2,649,671 |
|
|
|
2,579,862 |
|
|
|
2,537,152 |
|
|
|
2,449,521 |
|
|
|
2,379,872 |
|
Deposits |
|
|
2,901,928 |
|
|
|
2,864,648 |
|
|
|
3,002,535 |
|
|
|
3,067,019 |
|
|
|
2,964,585 |
|
Stockholders’ equity |
|
|
199,947 |
|
|
|
219,065 |
|
|
|
222,731 |
|
|
|
255,130 |
|
|
|
255,224 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEST
BANCORPORATION, INC. AND
SUBSIDIARY |
Financial
Information
(unaudited) |
(in
thousands) |
|
|
As of |
ANALYSIS OF LOAN PORTFOLIO |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
Loan mix: |
|
|
|
|
|
|
|
|
|
|
Commercial |
|
$ |
519,196 |
|
|
$ |
526,336 |
|
|
$ |
475,704 |
|
|
$ |
466,874 |
|
|
$ |
492,815 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
Construction, land and land development |
|
|
363,015 |
|
|
|
341,549 |
|
|
|
390,137 |
|
|
|
388,424 |
|
|
|
359,258 |
|
1-4 family residential first mortgages |
|
|
75,211 |
|
|
|
69,991 |
|
|
|
69,829 |
|
|
|
65,978 |
|
|
|
66,216 |
|
Home equity |
|
|
10,322 |
|
|
|
10,271 |
|
|
|
8,564 |
|
|
|
9,213 |
|
|
|
8,422 |
|
Commercial |
|
|
1,771,940 |
|
|
|
1,661,907 |
|
|
|
1,627,150 |
|
|
|
1,555,001 |
|
|
|
1,530,218 |
|
Consumer and other |
|
|
7,291 |
|
|
|
7,884 |
|
|
|
5,912 |
|
|
|
4,068 |
|
|
|
3,797 |
|
|
|
|
2,746,975 |
|
|
|
2,617,938 |
|
|
|
2,577,296 |
|
|
|
2,489,558 |
|
|
|
2,460,726 |
|
Net unamortized fees and costs |
|
|
(4,139 |
) |
|
|
(3,793 |
) |
|
|
(4,167 |
) |
|
|
(4,192 |
) |
|
|
(4,530 |
) |
Total loans |
|
$ |
2,742,836 |
|
|
$ |
2,614,145 |
|
|
$ |
2,573,129 |
|
|
$ |
2,485,366 |
|
|
$ |
2,456,196 |
|
Less allowance for loan losses |
|
|
(25,473 |
) |
|
|
(25,418 |
) |
|
|
(25,434 |
) |
|
|
(27,623 |
) |
|
|
(28,364 |
) |
Net
loans |
|
$ |
2,717,363 |
|
|
$ |
2,588,727 |
|
|
$ |
2,547,695 |
|
|
$ |
2,457,743 |
|
|
$ |
2,427,832 |
|
|
|
|
|
|
|
|
|
|
|
|
ANALYSIS OF DEPOSITS |
|
|
|
|
|
|
|
|
|
|
Deposit mix: |
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand |
|
$ |
693,563 |
|
|
$ |
712,722 |
|
|
$ |
690,335 |
|
|
$ |
710,697 |
|
|
$ |
720,136 |
|
Interest-bearing demand |
|
|
536,226 |
|
|
|
469,257 |
|
|
|
472,919 |
|
|
|
554,235 |
|
|
|
548,242 |
|
Savings and money market |
|
|
1,237,954 |
|
|
|
1,252,694 |
|
|
|
1,360,020 |
|
|
|
1,632,690 |
|
|
|
1,550,636 |
|
Time |
|
|
412,665 |
|
|
|
388,174 |
|
|
|
319,177 |
|
|
|
193,630 |
|
|
|
196,991 |
|
Total
deposits |
|
$ |
2,880,408 |
|
|
$ |
2,822,847 |
|
|
$ |
2,842,451 |
|
|
$ |
3,091,252 |
|
|
$ |
3,016,005 |
|
|
|
|
|
|
|
|
|
|
|
|
ANALYSIS OF BORROWINGS |
|
|
|
|
|
|
|
|
|
|
Borrowings mix: |
|
|
|
|
|
|
|
|
|
|
Federal funds purchased and other short-term borrowings |
|
$ |
200,000 |
|
|
$ |
204,500 |
|
|
$ |
133,000 |
|
|
$ |
— |
|
|
$ |
2,880 |
|
Subordinated notes, net |
|
|
79,369 |
|
|
|
79,303 |
|
|
|
79,265 |
|
|
|
20,468 |
|
|
|
20,465 |
|
Federal Home Loan Bank advances |
|
|
155,000 |
|
|
|
125,000 |
|
|
|
125,000 |
|
|
|
125,000 |
|
|
|
125,000 |
|
Long-term debt |
|
|
51,486 |
|
|
|
51,486 |
|
|
|
51,486 |
|
|
|
51,486 |
|
|
|
51,521 |
|
Total
borrowings |
|
$ |
485,855 |
|
|
$ |
460,289 |
|
|
$ |
388,751 |
|
|
$ |
196,954 |
|
|
$ |
199,866 |
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
Preferred stock |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Common stock |
|
|
3,000 |
|
|
|
3,000 |
|
|
|
3,000 |
|
|
|
3,000 |
|
|
|
3,000 |
|
Additional paid-in
capital |
|
|
32,021 |
|
|
|
31,152 |
|
|
|
30,283 |
|
|
|
29,421 |
|
|
|
30,183 |
|
Retained earnings |
|
|
267,562 |
|
|
|
262,776 |
|
|
|
255,334 |
|
|
|
246,827 |
|
|
|
237,782 |
|
Accumulated other
comprehensive loss |
|
|
(91,471 |
) |
|
|
(98,164 |
) |
|
|
(72,428 |
) |
|
|
(42,768 |
) |
|
|
(10,637 |
) |
Total Stockholders’
Equity |
|
$ |
211,112 |
|
|
$ |
198,764 |
|
|
$ |
216,189 |
|
|
$ |
236,480 |
|
|
$ |
260,328 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEST
BANCORPORATION, INC. AND
SUBSIDIARY |
Financial
Information
(unaudited) |
(in
thousands) |
|
|
For the Quarter Ended |
CONSOLIDATED STATEMENTS OF INCOME |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
Interest income: |
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
30,859 |
|
$ |
28,102 |
|
$ |
24,848 |
|
|
$ |
23,286 |
|
|
$ |
24,179 |
Securities: |
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
3,398 |
|
|
3,147 |
|
|
3,090 |
|
|
|
2,889 |
|
|
|
2,590 |
Tax-exempt |
|
|
887 |
|
|
890 |
|
|
892 |
|
|
|
858 |
|
|
|
829 |
Interest-bearing deposits |
|
|
24 |
|
|
30 |
|
|
67 |
|
|
|
82 |
|
|
|
66 |
Total interest income |
|
|
35,168 |
|
|
32,169 |
|
|
28,897 |
|
|
|
27,115 |
|
|
|
27,664 |
Interest expense: |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
11,043 |
|
|
6,289 |
|
|
3,146 |
|
|
|
2,151 |
|
|
|
2,055 |
Federal funds purchased and other short-term borrowings |
|
|
952 |
|
|
655 |
|
|
157 |
|
|
|
— |
|
|
|
1 |
Subordinated notes |
|
|
1,119 |
|
|
1,106 |
|
|
394 |
|
|
|
248 |
|
|
|
254 |
Federal Home Loan Bank advances |
|
|
755 |
|
|
649 |
|
|
635 |
|
|
|
630 |
|
|
|
656 |
Long-term debt |
|
|
630 |
|
|
466 |
|
|
326 |
|
|
|
258 |
|
|
|
96 |
Total interest expense |
|
|
14,499 |
|
|
9,165 |
|
|
4,658 |
|
|
|
3,287 |
|
|
|
3,062 |
Net interest income |
|
|
20,669 |
|
|
23,004 |
|
|
24,239 |
|
|
|
23,828 |
|
|
|
24,602 |
Provision for loan losses |
|
|
— |
|
|
— |
|
|
(1,750 |
) |
|
|
(750 |
) |
|
|
— |
Net interest income after provision for loan
losses |
|
|
20,669 |
|
|
23,004 |
|
|
25,989 |
|
|
|
24,578 |
|
|
|
24,602 |
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
|
|
476 |
|
|
553 |
|
|
585 |
|
|
|
580 |
|
|
|
603 |
Debit card usage fees |
|
|
492 |
|
|
498 |
|
|
507 |
|
|
|
472 |
|
|
|
505 |
Trust services |
|
|
678 |
|
|
780 |
|
|
622 |
|
|
|
629 |
|
|
|
633 |
Increase in cash value of bank-owned life insurance |
|
|
255 |
|
|
246 |
|
|
236 |
|
|
|
227 |
|
|
|
233 |
Loan swap fees |
|
|
— |
|
|
835 |
|
|
— |
|
|
|
— |
|
|
|
24 |
Other income |
|
|
364 |
|
|
364 |
|
|
328 |
|
|
|
481 |
|
|
|
350 |
Total noninterest income |
|
|
2,265 |
|
|
3,276 |
|
|
2,278 |
|
|
|
2,389 |
|
|
|
2,348 |
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
6,552 |
|
|
6,578 |
|
|
6,410 |
|
|
|
6,298 |
|
|
|
5,928 |
Occupancy |
|
|
1,270 |
|
|
1,315 |
|
|
1,242 |
|
|
|
1,086 |
|
|
|
1,532 |
Data processing |
|
|
673 |
|
|
644 |
|
|
656 |
|
|
|
624 |
|
|
|
630 |
FDIC insurance |
|
|
243 |
|
|
127 |
|
|
289 |
|
|
|
337 |
|
|
|
460 |
Professional fees |
|
|
205 |
|
|
250 |
|
|
202 |
|
|
|
217 |
|
|
|
183 |
Director fees |
|
|
215 |
|
|
209 |
|
|
222 |
|
|
|
168 |
|
|
|
184 |
Other expenses |
|
|
2,507 |
|
|
2,335 |
|
|
2,245 |
|
|
|
1,932 |
|
|
|
2,954 |
Total noninterest expense |
|
|
11,665 |
|
|
11,458 |
|
|
11,266 |
|
|
|
10,662 |
|
|
|
11,871 |
Income before income taxes |
|
|
11,269 |
|
|
14,822 |
|
|
17,001 |
|
|
|
16,305 |
|
|
|
15,079 |
Income taxes |
|
|
2,323 |
|
|
3,220 |
|
|
4,334 |
|
|
|
3,121 |
|
|
|
3,169 |
Net income |
|
$ |
8,946 |
|
$ |
11,602 |
|
$ |
12,667 |
|
|
$ |
13,184 |
|
|
$ |
11,910 |
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common
share |
|
$ |
0.54 |
|
$ |
0.70 |
|
$ |
0.76 |
|
|
$ |
0.80 |
|
|
$ |
0.72 |
Diluted earnings per common
share |
|
$ |
0.53 |
|
$ |
0.69 |
|
$ |
0.75 |
|
|
$ |
0.78 |
|
|
$ |
0.71 |
|
|
|
|
|
|
WEST
BANCORPORATION, INC. AND SUBSIDIARY |
Financial
Information (unaudited) |
(in
thousands) |
|
|
For the Year Ended |
CONSOLIDATED STATEMENTS OF INCOME |
|
December 31, 2022 |
|
December 31, 2021 |
Interest income: |
|
|
|
|
Loans, including fees |
|
$ |
107,095 |
|
|
$ |
95,585 |
|
Securities: |
|
|
|
|
Taxable |
|
|
12,524 |
|
|
|
8,542 |
|
Tax-exempt |
|
|
3,527 |
|
|
|
2,861 |
|
Interest-bearing deposits |
|
|
203 |
|
|
|
292 |
|
Total interest income |
|
|
123,349 |
|
|
|
107,280 |
|
Interest expense: |
|
|
|
|
Deposits |
|
|
22,629 |
|
|
|
7,948 |
|
Federal funds purchased and other short-term borrowings |
|
|
1,764 |
|
|
|
5 |
|
Subordinated notes |
|
|
2,867 |
|
|
|
1,008 |
|
Federal Home Loan Bank advances |
|
|
2,669 |
|
|
|
2,944 |
|
Long-term debt |
|
|
1,680 |
|
|
|
316 |
|
Total interest expense |
|
|
31,609 |
|
|
|
12,221 |
|
Net interest income |
|
|
91,740 |
|
|
|
95,059 |
|
Provision for loan losses |
|
|
(2,500 |
) |
|
|
(1,500 |
) |
Net interest income after provision for loan
losses |
|
|
94,240 |
|
|
|
96,559 |
|
Noninterest income: |
|
|
|
|
Service charges on deposit accounts |
|
|
2,194 |
|
|
|
2,352 |
|
Debit card usage fees |
|
|
1,969 |
|
|
|
1,948 |
|
Trust services |
|
|
2,709 |
|
|
|
2,671 |
|
Increase in cash value of bank-owned life insurance |
|
|
964 |
|
|
|
923 |
|
Loan swap fees |
|
|
835 |
|
|
|
66 |
|
Realized securities gains, net |
|
|
— |
|
|
|
51 |
|
Other income |
|
|
1,537 |
|
|
|
1,718 |
|
Total noninterest income |
|
|
10,208 |
|
|
|
9,729 |
|
Noninterest expense: |
|
|
|
|
Salaries and employee benefits |
|
|
25,838 |
|
|
|
23,226 |
|
Occupancy |
|
|
4,913 |
|
|
|
5,162 |
|
Data processing |
|
|
2,597 |
|
|
|
2,465 |
|
FDIC insurance |
|
|
996 |
|
|
|
1,818 |
|
Professional fees |
|
|
874 |
|
|
|
946 |
|
Director fees |
|
|
814 |
|
|
|
765 |
|
Other expenses |
|
|
9,019 |
|
|
|
8,998 |
|
Total noninterest expense |
|
|
45,051 |
|
|
|
43,380 |
|
Income before income taxes |
|
|
59,397 |
|
|
|
62,908 |
|
Income taxes |
|
|
12,998 |
|
|
|
13,301 |
|
Net income |
|
$ |
46,399 |
|
|
$ |
49,607 |
|
|
|
|
|
|
Basic earnings per common
share |
|
$ |
2.79 |
|
|
$ |
3.00 |
|
Diluted earnings per common
share |
|
$ |
2.76 |
|
|
$ |
2.95 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEST
BANCORPORATION, INC. AND SUBSIDIARY |
Financial
Information
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for the Quarter Ended |
|
For the Year Ended |
COMMON SHARE DATA |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|
December 31, 2022 |
|
December 31, 2021 |
Earnings per common share (basic) |
|
$ |
0.54 |
|
|
$ |
0.70 |
|
|
$ |
0.76 |
|
|
$ |
0.80 |
|
|
$ |
0.72 |
|
|
$ |
2.79 |
|
|
$ |
3.00 |
|
Earnings per common share
(diluted) |
|
|
0.53 |
|
|
|
0.69 |
|
|
|
0.75 |
|
|
|
0.78 |
|
|
|
0.71 |
|
|
|
2.76 |
|
|
|
2.95 |
|
Dividends per common
share |
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.24 |
|
|
|
1.00 |
|
|
|
0.94 |
|
Book value per common
share(1) |
|
|
12.69 |
|
|
|
11.94 |
|
|
|
12.99 |
|
|
|
14.22 |
|
|
|
15.73 |
|
|
|
|
|
Closing stock price |
|
|
25.55 |
|
|
|
20.81 |
|
|
|
24.34 |
|
|
|
27.21 |
|
|
|
31.07 |
|
|
|
|
|
Market price/book
value(2) |
|
|
201.34 |
% |
|
|
174.29 |
% |
|
|
187.37 |
% |
|
|
191.35 |
% |
|
|
197.52 |
% |
|
|
|
|
Price earnings ratio(3) |
|
|
11.93 |
|
|
|
7.49 |
|
|
|
7.98 |
|
|
|
8.39 |
|
|
|
10.88 |
|
|
|
|
|
Annualized dividend
yield(4) |
|
|
3.91 |
% |
|
|
4.81 |
% |
|
|
4.11 |
% |
|
|
3.68 |
% |
|
|
3.89 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REGULATORY CAPITAL RATIOS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total risk-based capital
ratio |
|
|
12.08 |
% |
|
|
12.34 |
% |
|
|
12.53 |
% |
|
|
10.72 |
% |
|
|
10.89 |
% |
|
|
|
|
Tier 1 risk-based capital
ratio |
|
|
9.55 |
|
|
|
9.72 |
|
|
|
9.81 |
|
|
|
9.81 |
|
|
|
9.92 |
|
|
|
|
|
Tier 1 leverage capital
ratio |
|
|
8.81 |
|
|
|
8.85 |
|
|
|
8.59 |
|
|
|
8.39 |
|
|
|
8.49 |
|
|
|
|
|
Common equity tier 1
ratio |
|
|
8.96 |
|
|
|
9.11 |
|
|
|
9.17 |
|
|
|
9.16 |
|
|
|
9.24 |
|
|
|
|
|
West
Bank: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total risk-based capital
ratio |
|
|
13.08 |
% |
|
|
13.38 |
% |
|
|
13.62 |
% |
|
|
11.88 |
% |
|
|
12.10 |
% |
|
|
|
|
Tier 1 risk-based capital
ratio |
|
|
12.33 |
|
|
|
12.60 |
|
|
|
12.81 |
|
|
|
10.98 |
|
|
|
11.13 |
|
|
|
|
|
Tier 1 leverage capital
ratio |
|
|
11.37 |
|
|
|
11.47 |
|
|
|
11.22 |
|
|
|
9.39 |
|
|
|
9.53 |
|
|
|
|
|
Common equity tier 1
ratio |
|
|
12.33 |
|
|
|
12.60 |
|
|
|
12.81 |
|
|
|
10.98 |
|
|
|
11.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KEY PERFORMANCE RATIOS AND OTHER METRICS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets(5) |
|
|
1.01 |
% |
|
|
1.32 |
% |
|
|
1.45 |
% |
|
|
1.51 |
% |
|
|
1.38 |
% |
|
|
1.32 |
% |
|
|
1.52 |
% |
Return on average
equity(6) |
|
|
17.75 |
|
|
|
21.01 |
|
|
|
22.81 |
|
|
|
20.96 |
|
|
|
18.51 |
|
|
|
20.71 |
|
|
|
20.33 |
|
Net interest
margin(7)(13) |
|
|
2.49 |
|
|
|
2.78 |
|
|
|
2.93 |
|
|
|
2.85 |
|
|
|
3.00 |
|
|
|
2.76 |
|
|
|
3.05 |
|
Yield on interest-earning
assets(8) |
|
|
4.21 |
|
|
|
3.87 |
|
|
|
3.49 |
|
|
|
3.24 |
|
|
|
3.36 |
|
|
|
3.70 |
|
|
|
3.44 |
|
Cost of interest-bearing
liabilities |
|
|
2.24 |
|
|
|
1.45 |
|
|
|
0.73 |
|
|
|
0.52 |
|
|
|
0.50 |
|
|
|
1.24 |
|
|
|
0.53 |
|
Efficiency ratio(9)(13) |
|
|
50.42 |
|
|
|
43.16 |
|
|
|
41.96 |
|
|
|
40.14 |
|
|
|
43.32 |
|
|
|
43.70 |
|
|
|
40.91 |
|
Non-performing assets to total
assets(10) |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.25 |
|
|
|
0.26 |
|
|
|
|
|
ALLL ratio(11) |
|
|
0.93 |
|
|
|
0.97 |
|
|
|
0.99 |
|
|
|
1.11 |
|
|
|
1.15 |
|
|
|
|
|
Loans/total assets |
|
|
75.91 |
|
|
|
74.32 |
|
|
|
74.05 |
|
|
|
70.07 |
|
|
|
70.17 |
|
|
|
|
|
Loans/total deposits |
|
|
95.22 |
|
|
|
92.61 |
|
|
|
90.53 |
|
|
|
80.40 |
|
|
|
81.44 |
|
|
|
|
|
Tangible common equity
ratio(12) |
|
|
5.84 |
|
|
|
5.65 |
|
|
|
6.22 |
|
|
|
6.67 |
|
|
|
7.44 |
|
|
|
|
|
(1) Includes accumulated other comprehensive
income (loss).(2) Closing stock price divided by book value per
common share. (3) Closing stock price divided by annualized
earnings per common share (basic).(4) Annualized dividend divided
by period end closing stock price.(5) Annualized net income divided
by average assets. (6) Annualized net income divided by average
stockholders’ equity.(7) Annualized tax-equivalent net interest
income divided by average interest-earning assets.(8) Annualized
tax-equivalent interest income on interest-earning assets divided
by average interest-earning assets.(9) Noninterest expense
(excluding other real estate owned expense and write-down of
premises) divided by noninterest income (excluding net securities
gains/losses and gains/losses on disposition of premises and
equipment) plus tax-equivalent net interest income. (10) Total
nonperforming assets divided by total assets. (11) Allowance for
loan losses divided by total
loans. (12) Common
equity less intangible assets (none held) divided by tangible
assets. (13) A non-GAAP measure.
NON-GAAP FINANCIAL MEASURES
This report contains references to financial
measures that are not defined in GAAP. Such non-GAAP financial
measures include the Company’s presentation of net interest income
and net interest margin on a fully taxable equivalent (FTE) basis
and the presentation of the efficiency ratio on an adjusted and FTE
basis, excluding certain income and expenses. Management believes
these non-GAAP financial measures provide useful information to
both management and investors to analyze and evaluate the Company’s
financial performance. These measures are considered standard
measures of comparison within the banking industry. Additionally,
management believes providing measures on a FTE basis enhances the
comparability of income arising from taxable and nontaxable
sources. Limitations associated with non-GAAP financial measures
include the risks that persons might disagree as to the
appropriateness of items included in these measures and that
different companies might calculate these measures differently.
These non-GAAP disclosures should not be considered an alternative
to the Company’s GAAP results. The following table reconciles the
non-GAAP financial measures of net interest income and net interest
margin on a fully taxable equivalent basis and efficiency ratio on
an adjusted and FTE basis.
(in thousands) |
|
As of and for the Quarter Ended |
|
For the Year Ended |
|
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|
December 31, 2022 |
|
December 31, 2021 |
Reconciliation of net interest income and net interest
margin on a FTE basis to GAAP: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (GAAP) |
|
$ |
20,669 |
|
|
$ |
23,004 |
|
|
$ |
24,239 |
|
|
$ |
23,828 |
|
|
$ |
24,602 |
|
|
$ |
91,740 |
|
|
$ |
95,059 |
|
Tax-equivalent adjustment
(1) |
|
|
197 |
|
|
|
270 |
|
|
|
326 |
|
|
|
329 |
|
|
|
397 |
|
|
|
1,122 |
|
|
|
1,202 |
|
Net interest income on a FTE basis (non-GAAP) |
|
|
20,866 |
|
|
|
23,274 |
|
|
|
24,565 |
|
|
|
24,157 |
|
|
|
24,999 |
|
|
|
92,862 |
|
|
|
96,261 |
|
Average interest-earning
assets |
|
|
3,328,941 |
|
|
|
3,322,522 |
|
|
|
3,362,313 |
|
|
|
3,432,114 |
|
|
|
3,309,625 |
|
|
|
3,361,091 |
|
|
|
3,152,138 |
|
Net interest margin on a FTE
basis (non-GAAP) |
|
|
2.49 |
% |
|
|
2.78 |
% |
|
|
2.93 |
% |
|
|
2.85 |
% |
|
|
3.00 |
% |
|
|
2.76 |
% |
|
|
3.05 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
efficiency ratio on an adjusted and FTE basis to
GAAP: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income on a FTE
basis (non-GAAP) |
|
$ |
20,866 |
|
|
$ |
23,274 |
|
|
$ |
24,565 |
|
|
$ |
24,157 |
|
|
$ |
24,999 |
|
|
$ |
92,862 |
|
|
$ |
96,261 |
|
Noninterest income |
|
|
2,265 |
|
|
|
3,276 |
|
|
|
2,278 |
|
|
|
2,389 |
|
|
|
2,348 |
|
|
|
10,208 |
|
|
|
9,729 |
|
Adjustment for realized securities gains, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(51 |
) |
Adjustment for losses on disposal of premises and equipment,
net |
|
|
2 |
|
|
|
— |
|
|
|
9 |
|
|
|
18 |
|
|
|
55 |
|
|
|
29 |
|
|
|
84 |
|
Adjusted income |
|
|
23,133 |
|
|
|
26,550 |
|
|
|
26,852 |
|
|
|
26,564 |
|
|
|
27,402 |
|
|
|
103,099 |
|
|
|
106,023 |
|
Noninterest expense |
|
|
11,665 |
|
|
|
11,458 |
|
|
|
11,266 |
|
|
|
10,662 |
|
|
|
11,871 |
|
|
|
45,051 |
|
|
|
43,380 |
|
Efficiency ratio on an
adjusted and FTE basis (non-GAAP) (2) |
|
|
50.42 |
% |
|
|
43.16 |
% |
|
|
41.96 |
% |
|
|
40.14 |
% |
|
|
43.32 |
% |
|
|
43.70 |
% |
|
|
40.91 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. A
lower ratio is more desirable.
For more information contact:Jane Funk,
Executive Vice President, Treasurer and Chief Financial Officer
(515) 222-5766
West Bancorporation (NASDAQ:WTBA)
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