EX-99.1 2 wtba-20240425exhibit991.htm EX-99.1 Document

Exhibit 99.1

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Press Release
 
April 25, 2024
 
FOR IMMEDIATE RELEASE
For more information contact:
Jane Funk, Executive Vice President, Treasurer and Chief Financial Officer (515) 222-5766
 
WEST BANCORPORATION, INC. ANNOUNCES FIRST QUARTER 2024 FINANCIAL RESULTS AND DECLARES QUARTERLY DIVIDEND

West Des Moines, IA - West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent company of West Bank, today reported first quarter 2024 net income of $5.8 million, or $0.35 per diluted common share, compared to fourth quarter 2023 net income of $4.5 million, or $0.27 per diluted common share, and first quarter 2023 net income of $7.8 million, or $0.47 per diluted common share. On April 24, 2024, the Company’s Board of Directors declared a regular quarterly dividend of $0.25 per common share. The dividend is payable on May 22, 2024, to stockholders of record on May 8, 2024.

David Nelson, President and Chief Executive Officer of the Company, commented, “We have completed our move to our new headquarters building in West Des Moines. After being in the same leased space for over 50 years, our new building is an opportunity to consolidate our corporate operations under one roof, provide space for future growth and enhance business development opportunities. This construction project was years in the making and is a commitment to honor our 131 year history and support the future of our community.”

David Nelson added, “Like the rest of our industry, our Company continues to experience margin challenges in 2024. High short-term rates, an ongoing inverted yield curve and aggressive deposit competition continues to have a significant impact on our cost of funds and net interest margin. We have a clear understanding of our path forward to more normalized margins and earnings.”

First Quarter 2024 Financial Highlights
Quarter Ended March 31, 2024
Net income (in thousands)$5,809
Return on average equity10.63 %
Return on average assets0.61 %
Efficiency ratio (a non-GAAP measure)62.04 %
Nonperforming assets to total assets0.01 %

First Quarter 2024 Compared to Fourth Quarter 2023 Overview

•Loans increased $52.6 million in the first quarter of 2024, or 7.2 percent annualized. The increase is primarily due to the funding of previously committed construction loans.

•No credit loss expense was recorded in the first quarter of 2024, compared to a credit loss expense of $500 thousand recorded in the fourth quarter of 2023. The $500 thousand credit loss expense recorded in the fourth quarter of 2023 was due to growth in loans and unfunded commitments.

•The allowance for credit losses to total loans was 0.95 percent at March 31, 2024, compared to 0.97 percent at December 31, 2023. Nonaccrual loans at March 31, 2024 consisted of one loan with a balance of $289 thousand, compared to one loan with a balance of $296 thousand at December 31, 2023.




•Deposits increased $91.3 million, or 3.1 percent, in the first quarter of 2024. Brokered deposits totaled $396.4 million at March 31, 2024, compared to $305.4 million at December 31, 2023, an increase of $91.0 million. Excluding brokered deposits, deposits increased $0.3 million during the first quarter of 2024. As of March 31, 2024, estimated uninsured deposits, which exclude deposits in the IntraFi® reciprocal network, brokered deposits and public funds protected by state programs, accounted for approximately 27.2 percent of total deposits.

•Borrowed funds increased to $639.7 million at March 31, 2024, compared to $592.6 million at December 31, 2023. The increase was primarily attributable to an increase of $48.2 million in federal funds purchased and other short-term borrowings.
•The efficiency ratio (a non-GAAP measure) was 62.04 percent for the first quarter of 2024, compared to 64.66 percent for the fourth quarter of 2023. The decrease in the efficiency ratio was primarily due to the increase in net interest income.
•Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 1.88 percent for the first quarter of 2024, compared to 1.87 percent for the fourth quarter of 2023. Net interest income for the first quarter of 2024 was $16.8 million, compared to $16.4 million for the fourth quarter of 2023.
•The tangible common equity ratio was 5.65 percent at March 31, 2024, compared to 5.88 percent at December 31, 2023. The decrease was attributable to the increase in accumulated other comprehensive loss, which was primarily driven by the effect of increasing long-term interest rates in the first quarter on the unrealized market value adjustment of our available for sale investment portfolio. While accumulated other comprehensive losses reduce tangible common equity, they have no impact on regulatory capital.

First Quarter 2024 Compared to First Quarter 2023 Overview

•Loans increased $223.9 million at March 31, 2024, or 8.1 percent, compared to March 31, 2023.
•Deposits increased $266.6 million at March 31, 2024, compared to March 31, 2023. Included in deposits were brokered deposits totaling $396.4 million at March 31, 2024, compared to $234.2 million at March 31, 2023. Excluding brokered deposits, deposits increased $104.4 million, or 4.1 percent, as of March 31, 2024 compared to March 31, 2023.
•Borrowed funds increased to $639.7 million at March 31, 2024, compared to $580.2 million at March 31, 2023. The increase included increases of $75.0 million in FHLB one-month rolling advances hedged with long-term interest rate swaps, and $20.0 million in FHLB long-term advances, partially offset by a decrease of $30.5 million in federal funds purchased and other short-term borrowings.
•The efficiency ratio (a non-GAAP measure) was 62.04 percent for the first quarter of 2024, compared to 55.34 percent for the first quarter of 2023. The increase in the efficiency ratio in the first quarter of 2024 compared to the first quarter of 2023 was primarily due to the decreases in net interest income and noninterest income.
•Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 1.88 percent for the first quarter of 2024, compared to 2.23 percent for the first quarter of 2023. Net interest income for the first quarter of 2024 was $16.8 million, compared to $18.7 million for the first quarter of 2023. Through 2023 and the first quarter of 2024, the rising cost of deposits and borrowed funds and the change in mix of funding increased interest expense faster than the increase in interest income from loan repricing and loan originations.

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 results in a conference call scheduled for 2:00 p.m. Central Time on Thursday, April 25, 2024. The telephone number for the conference call is 800-715-9871. The conference ID for the conference call is 8178676. A recording of the call will be available until May 9, 2024, by dialing 800-770-2030.





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 changes in interest rates; 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 credit losses dictated by new market conditions, accounting standards or regulatory requirements; the concentration of large deposits from certain clients who have balances above current FDIC insurance limits; changes in local, national and international economic conditions, including high rates of inflation and possible recession; the effects of recent developments and events in the financial services industry, including the large-scale deposit withdrawals over a short period of time that resulted in recent bank failures; changes in legal and regulatory requirements, limitations and costs including in response to the recent bank failures; changes in customers’ acceptance of the Company’s products and services; the occurrence of fraudulent activity, breaches or failures of our or our third-party partners’ information security controls or cyber-security related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools; 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 ongoing Israeli-Palestinian conflict and the Russian invasion of Ukraine, widespread disease or pandemics, or other adverse external events; risks related to climate change and the negative impact it may have on our customers and their businesses; changes to U.S. tax laws, regulations and guidance; potential changes in federal policy and at regulatory agencies as a result of the upcoming 2024 presidential election; talent and labor shortages; the 1 percent 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 SHEETSMarch 31, 2024December 31, 2023September 30, 2023June 30, 2023March 31, 2023
Assets
Cash and due from banks$27,071 $33,245 $18,819 $29,776 $21,579 
Interest-bearing deposits120,946 32,112 1,802 1,968 901 
Securities available for sale, at fair value605,735 623,919 609,365 645,091 665,358 
Federal Home Loan Bank stock, at cost26,181 22,957 26,691 22,488 22,226 
Loans2,980,133 2,927,535 2,849,777 2,807,075 2,756,185 
Allowance for credit losses(28,373)(28,342)(28,147)(27,938)(27,941)
Loans, net2,951,760 2,899,193 2,821,630 2,779,137 2,728,244 
Premises and equipment, net95,880 86,399 75,675 66,683 59,565 
Bank-owned life insurance44,138 43,864 43,589 43,328 44,830 
Other assets90,981 84,069 104,329 90,084 82,240 
Total assets$3,962,692 $3,825,758 $3,701,900 $3,678,555 $3,624,943 
Liabilities and Stockholders’ Equity
Deposits$3,065,030 $2,973,779 $2,755,529 $2,836,325 $2,798,393 
Federal funds purchased and other short-term borrowings198,500 150,270 261,510 184,150 229,290 
Other borrowings441,183 442,367 443,552 409,736 350,921 
Other liabilities34,223 34,299 37,376 31,218 29,347 
Stockholders’ equity223,756 225,043 203,933 217,126 216,992 
Total liabilities and stockholders’ equity$3,962,692 $3,825,758 $3,701,900 $3,678,555 $3,624,943 
For the Quarter Ended
AVERAGE BALANCESMarch 31, 2024December 31, 2023September 30, 2023June 30, 2023March 31, 2023
Assets$3,812,199 $3,706,497 $3,679,541 $3,645,651 $3,617,458 
Loans2,949,672 2,857,594 2,813,213 2,783,463 2,745,381 
Deposits2,931,222 2,878,676 2,764,184 2,854,945 2,846,926 
Stockholders’ equity219,835 201,920 215,230 213,177 215,391 



WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
As of
LOANSMarch 31, 2024December 31, 2023September 30, 2023June 30, 2023March 31, 2023
Commercial$544,293 $531,594 $529,293 $535,085 $520,894 
Real estate:
Construction, land and land development465,247 413,477 399,253 351,461 336,739 
1-4 family residential first mortgages108,065 106,688 89,713 80,998 75,223 
Home equity14,020 14,618 12,429 12,625 9,726 
Commercial1,839,580 1,854,510 1,812,816 1,820,718 1,810,158 
Consumer and other12,844 10,930 10,123 10,289 7,381 
2,984,049 2,931,817 2,853,627 2,811,176 2,760,121 
Net unamortized fees and costs(3,916)(4,282)(3,850)(4,101)(3,936)
Total loans$2,980,133 $2,927,535 $2,849,777 $2,807,075 $2,756,185 
Less allowance for credit losses(28,373)(28,342)(28,147)(27,938)(27,941)
Net loans$2,951,760 $2,899,193 $2,821,630 $2,779,137 $2,728,244 
CREDIT QUALITY
Pass$2,983,618 $2,931,377 $2,853,100 $2,810,640 $2,706,951 
Watch142 144 184 187 52,766 
Substandard289 296 343 349 404 
Doubtful— — — — — 
     Total loans$2,984,049 $2,931,817 $2,853,627 $2,811,176 $2,760,121 
DEPOSITS
Noninterest-bearing demand$521,377 $548,726 $551,688 $568,029 $605,666 
Interest-bearing demand449,946 481,207 417,802 459,030 486,656 
Savings and money market - non-brokered1,315,698 1,315,741 1,249,309 1,302,468 1,202,756 
Money market - brokered119,840 124,335 99,282 114,142 92,524 
    Total nonmaturity deposits2,406,861 2,470,009 2,318,081 2,443,669 2,387,602 
Time - non-brokered381,646 322,694 299,683 276,097 269,102 
Time - brokered276,523 181,076 137,765 116,559 141,689 
    Total time deposits658,169 503,770 437,448 392,656 410,791 
    Total deposits$3,065,030 $2,973,779 $2,755,529 $2,836,325 $2,798,393 
BORROWINGS
Federal funds purchased and other short-term borrowings$198,500 $150,270 $261,510 $184,150 $229,290 
Subordinated notes, net79,697 79,631 79,566 79,500 79,435 
Federal Home Loan Bank advances315,000 315,000 315,000 280,000 220,000 
Long-term debt46,486 47,736 48,986 50,236 51,486 
    Total borrowings$639,683 $592,637 $705,062 $593,886 $580,211 
STOCKHOLDERS’ EQUITY
Preferred stock$— $— $— $— $— 
Common stock3,000 3,000 3,000 3,000 3,000 
Additional paid-in capital33,685 34,197 33,487 32,642 31,797 
Retained earnings272,997 271,369 271,025 269,301 267,620 
Accumulated other comprehensive loss(85,926)(83,523)(103,579)(87,817)(85,425)
    Total Stockholders’ Equity$223,756 $225,043 $203,933 $217,126 $216,992 




WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
For the Quarter Ended
CONSOLIDATED STATEMENTS OF INCOMEMarch 31, 2024December 31, 2023September 30, 2023June 30, 2023March 31, 2023
Interest income:
Loans, including fees$40,196 $38,208 $36,756 $35,011 $32,948 
Securities:
Taxable3,416 3,521 3,427 3,432 3,316 
Tax-exempt810 869 880 883 885 
Interest-bearing deposits148 85 29 25 30 
Total interest income44,570 42,683 41,092 39,351 37,179 
Interest expense:
Deposits21,559 20,024 17,156 16,277 13,339 
 Federal funds purchased and other short-term borrowings2,183 2,024 3,165 2,264 2,079 
Subordinated notes1,108 1,114 1,113 1,109 1,106 
Federal Home Loan Bank advances2,325 2,482 2,329 1,621 1,262 
Long-term debt645 678 695 739 698 
Total interest expense27,820 26,322 24,458 22,010 18,484 
Net interest income16,750 16,361 16,634 17,341 18,695 
Credit loss expense— 500 200 — — 
Net interest income after credit loss expense16,750 15,861 16,434 17,341 18,695 
Noninterest income:
Service charges on deposit accounts460 476 463 458 462 
Debit card usage fees458 488 495 511 486 
Trust services776 782 831 749 706 
 Increase in cash value of bank-owned life insurance274 275 262 250 257 
Gain from bank-owned life insurance— — — — 691 
Loan swap fees— — 431 — — 
Realized securities losses, net— (431)— — — 
Other income331 308 340 421 355 
Total noninterest income2,299 1,898 2,822 2,389 2,957 
Noninterest expense:
Salaries and employee benefits6,489 6,468 6,696 7,029 6,867 
Occupancy and equipment1,447 1,499 1,359 1,322 1,327 
Data processing714 723 703 729 635 
Technology and software700 676 573 579 513 
FDIC insurance519 475 439 420 416 
Professional fees257 235 254 287 250 
Director fees199 240 196 251 205 
Other expenses1,543 1,845 1,685 1,857 1,858 
Total noninterest expense11,868 12,161 11,905 12,474 12,071 
Income before income taxes7,181 5,598 7,351 7,256 9,581 
Income taxes1,372 1,073 1,445 1,394 1,737 
Net income$5,809 $4,525 $5,906 $5,862 $7,844 
Basic earnings per common share$0.35 $0.27 $0.35 $0.35 $0.47 
Diluted earnings per common share$0.35 $0.27 $0.35 $0.35 $0.47 







WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
As of and for the Quarter Ended
COMMON SHARE DATAMarch 31, 2024December 31, 2023September 30, 2023June 30, 2023March 31, 2023
Earnings per common share (basic)$0.35 $0.27 $0.35 $0.35 $0.47 
Earnings per common share (diluted)0.35 0.27 0.35 0.35 0.47 
Dividends per common share0.25 0.25 0.25 0.25 0.25 
Book value per common share(1)
13.31 13.46 12.19 12.98 12.98 
Closing stock price17.83 21.20 16.31 18.41 18.27 
Market price/book value(2)
133.96 %157.50 %133.80 %141.83 %140.76 %
Price earnings ratio(3)
12.77 19.79 11.75 13.11 9.56 
Annualized dividend yield(4)
5.61 %4.72 %6.13 %5.43 %5.47 %
REGULATORY CAPITAL RATIOS
Consolidated:
Total risk-based capital ratio11.78 %11.88 %11.96 %12.15 %12.17 %
Tier 1 risk-based capital ratio9.23 9.30 9.37 9.51 9.51 
Tier 1 leverage capital ratio8.36 8.50 8.58 8.60 8.60 
Common equity tier 1 ratio8.67 8.74 8.80 8.92 8.92 
West Bank:
Total risk-based capital ratio12.63 %12.76 %12.89 %13.13 %13.16 %
Tier 1 risk-based capital ratio11.76 11.89 12.01 12.24 12.26 
Tier 1 leverage capital ratio10.65 10.86 11.00 11.08 11.10 
Common equity tier 1 ratio11.76 11.89 12.01 12.24 12.26 
KEY PERFORMANCE RATIOS AND OTHER METRICS
Return on average assets(5)
0.61 %0.48 %0.64 %0.64 %0.88 %
Return on average equity(6)
10.63 8.89 10.89 11.03 14.77 
Net interest margin(7)(13)
1.88 1.87 1.91 2.02 2.23 
Yield on interest-earning assets(8)(13)
4.99 4.87 4.70 4.57 4.41 
Cost of interest-bearing liabilities3.70 3.60 3.38 3.10 2.76 
Efficiency ratio(9)(13)
62.04 64.66 60.83 62.83 55.34 
Nonperforming assets to total assets(10)
0.01 0.01 0.01 0.01 0.01 
ACL ratio(11)
0.95 0.97 0.99 1.00 1.01 
Loans/total assets75.20 76.52 76.98 76.31 76.03 
Loans/total deposits97.23 98.44 103.42 98.97 98.49 
Tangible common equity ratio(12)
5.65 5.88 5.51 5.90 5.99 

(1) Includes accumulated other comprehensive 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 credit 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)For the Quarter Ended
March 31, 2024December 31, 2023September 30, 2023June 30, 2023March 31, 2023
Reconciliation of net interest income and net interest margin on a FTE basis to GAAP:
Net interest income (GAAP)$16,750 $16,361 $16,634 $17,341 $18,695 
Tax-equivalent adjustment (1)
82 95 113 122 161 
Net interest income on a FTE basis (non-GAAP)16,832 16,456 16,747 17,463 18,856 
Average interest-earning assets3,595,954 3,487,799 3,478,053 3,461,313 3,435,988 
Net interest margin on a FTE basis (non-GAAP)1.88 %1.87 %1.91 %2.02 %2.23 %
Reconciliation of efficiency ratio on an adjusted and FTE basis to GAAP:
Net interest income on a FTE basis (non-GAAP)$16,832 $16,456 $16,747 $17,463 $18,856 
Noninterest income2,299 1,898 2,822 2,389 2,957 
Adjustment for realized securities losses, net— 431 — — — 
Adjustment for losses on disposal of premises and equipment, net— 24 3 2 — 
Adjusted income19,131 18,809 19,572 19,854 21,813 
Noninterest expense11,868 12,161 11,905 12,474 12,071 
Efficiency ratio on an adjusted and FTE basis (non-GAAP) (2)
62.04 %64.66 %60.83 %62.83 %55.34 %
(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.