West Bancorporation, Inc. Announces Third Quarter 2024 Financial Results and Declares Quarterly Dividend
WEST DES MOINES, Iowa, Oct. 24, 2024 (GLOBE NEWSWIRE) — West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent company of West Bank, today reported third quarter 2024 net income of $6.0 million, or $0.35 per diluted common share, compared to second quarter 2024 net income of $5.2 million, or $0.31 per diluted common share, and third quarter 2023 net income of $5.9 million, or $0.35 per diluted common share. On October 23, 2024, the Company’s Board of Directors declared a regular quarterly dividend of $0.25 per common share. The dividend is payable on November 20, 2024, to stockholders of record on November 6, 2024.
David Nelson, President and Chief Executive Officer of the Company, commented, “Our third quarter results include moderate growth in loans and core deposits along with an increase in quarterly net interest income and net interest margin. Our credit quality remains pristine as a result of our disciplined loan growth and credit risk management practices. The ratio of nonperforming assets to total assets remains negligible at 0.01%.”
David Nelson added, “West Bank is focused on initiatives that will drive sustained core profitability. Those initiatives are centered around our culture of building strong relationships and providing exceptional personal service to drive growth in both commercial and consumer banking services.”
Third Quarter 2024 Financial Highlights
| Quarter Ended September 30, 2024 | Nine Months Ended September 30, 2024 | |||||||
| Net income (in thousands) | $5,952 | $16,953 | ||||||
| Return on average equity | 10.41% | 10.18% | ||||||
| Return on average assets | 0.60% | 0.59% | ||||||
| Efficiency ratio (a non-GAAP measure) | 63.28% | 64.16% | ||||||
| Nonperforming assets to total assets | 0.01% | 0.01% | ||||||
Third Quarter 2024 Compared to Second Quarter 2024 Overview
- Loans increased $22.4 million in the third quarter of 2024, or 3.0 percent annualized. The increase is primarily due to the funding of previously committed construction loans.
- A provision for credit losses on loans of $1.0 million was recorded in the third quarter of 2024, compared to no provision in the second quarter of 2024. A negative provision for credit losses on unfunded commitments of $1.0 million was recorded in the third quarter of 2024, compared to no provision in the second quarter of 2024. The provision for loans in the third quarter of 2024 was primarily due to changes in the forecasted loss rates due to increases in forecasted unemployment rates. The negative provision for unfunded commitments was primarily due to the decline in unfunded commitments resulting primarily from the funding of construction loans.
- The allowance for credit losses to total loans was 0.97 percent and 0.95 percent at September 30, 2024 and June 30, 2024, respectively. Nonaccrual loans at September 30, 2024 consisted of two loans with a total balance of $233 thousand, compared to three loans with a balance of $521 thousand at June 30, 2024.
- Deposits increased $97.6 million, or 3.1 percent, in the third quarter of 2024. Brokered deposits totaled $425.9 million at September 30, 2024, compared to $370.3 million at June 30, 2024, an increase of $55.6 million. Excluding brokered deposits, deposits increased $42.0 million during the third quarter of 2024. As of September 30, 2024, estimated uninsured deposits, which exclude deposits in the IntraFi® reciprocal network, brokered deposits and public funds protected by state programs, accounted for approximately 27.8 percent of total deposits.
- Borrowed funds decreased to $438.8 million at September 30, 2024, compared to $525.5 million at June 30, 2024. The decrease was primarily due to the balance of federal funds purchased and other short-term borrowings decreasing to $0 as of September 30, 2024, from $85.5 million as of June 30, 2024 as a result of growth in deposits.
- The efficiency ratio (a non-GAAP measure) was 63.28 percent for the third quarter of 2024, compared to 67.14 percent for the second quarter of 2024. The improvement in the efficiency ratio was primarily due to the increase in net interest income. In the third quarter of 2024, the increase in interest income on loans outpaced the increase in interest expense on deposits and borrowed funds.
- Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 1.91 percent for the third quarter of 2024, compared to 1.86 percent for the second quarter of 2024. Net interest income for the third quarter of 2024 was $18.0 million, compared to $17.2 million for the second quarter of 2024.
- The tangible common equity ratio was 5.90 percent as of September 30, 2024, compared to 5.65 percent as of June 30, 2024. The increase in the tangible common equity ratio was driven by retained net income and the decrease in accumulated other comprehensive loss, which was primarily the result of the increase in the market value of our available for sale investment portfolio.
Third Quarter 2024 Compared to Third Quarter 2023 Overview
- Loans increased $171.4 million at September 30, 2024, or 6.0 percent, compared to September 30, 2023. The increase is primarily due to increases in commercial real estate loans and the funding of previously committed construction loans.
- Deposits increased to $3.3 billion at September 30, 2024, compared to $2.8 billion at September 30, 2023. Included in deposits were brokered deposits totaling $425.9 million at September 30, 2024, compared to $237.0 million at September 30, 2023. Brokered deposits were used to reduce short-term borrowed funds and to fund loan growth. Excluding brokered deposits, deposits increased $334.2 million, or 13.3 percent, as of September 30, 2024, compared to September 30, 2023. Deposit growth included a mix of public funds and commercial and consumer deposits.
- Borrowed funds decreased to $438.8 million at September 30, 2024, compared to $705.1 million at September 30, 2023. The decrease was primarily attributable to a decrease of $261.5 million in federal funds purchased and other short-term borrowings as a result of growth in deposits.
- The efficiency ratio (a non-GAAP measure) was 63.28 percent for the third quarter of 2024, compared to 60.83 percent for the third quarter of 2023. The increase in the efficiency ratio in the third quarter of 2024 compared to the third quarter of 2023 was primarily due to the increase in noninterest expense, partially offset by an increase in net interest income. Occupancy and equipment expense increased primarily due to the occupancy costs associated with the Company’s newly constructed headquarters.
- Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 1.91 percent for both the third quarter of 2024 and the third quarter of 2023. Net interest income for the third quarter of 2024 was $18.0 million, compared to $16.6 million for the third quarter of 2023.
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, October 24, 2024. The telephone number for the conference call is 800-715-9871. The conference ID for the conference call is 7846129. A recording of the call will be available until November 7, 2024, by dialing 800-770-2030. The conference ID for the replay call is 7846129, followed by the # key.
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 changes in interest rates; 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 credit unions, “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, including those who have balances above current FDIC insurance limits; changes in local, national and international economic conditions, including the level and impact 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; 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.
For more information contact:
Jane Funk, Executive Vice President, Treasurer and Chief Financial Officer (515) 222-5766
| WEST BANCORPORATION, INC. AND SUBSIDIARY | ||||||||||||||||||||
| Financial Information (unaudited) | ||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| As of | ||||||||||||||||||||
| CONDENSED BALANCE SHEETS | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||||||||||||
| Assets | ||||||||||||||||||||
| Cash and due from banks | $ | 34,157 | $ | 27,994 | $ | 27,071 | $ | 33,245 | $ | 18,819 | ||||||||||
| Interest-bearing deposits | 123,646 | 121,825 | 120,946 | 32,112 | 1,802 | |||||||||||||||
| Securities available for sale, at fair value | 597,745 | 588,452 | 605,735 | 623,919 | 609,365 | |||||||||||||||
| Federal Home Loan Bank stock, at cost | 17,195 | 21,065 | 26,181 | 22,957 | 26,691 | |||||||||||||||
| Loans | 3,021,221 | 2,998,774 | 2,980,133 | 2,927,535 | 2,849,777 | |||||||||||||||
| Allowance for credit losses | (29,419 | ) | (28,422 | ) | (28,373 | ) | (28,342 | ) | (28,147 | ) | ||||||||||
| Loans, net | 2,991,802 | 2,970,352 | 2,951,760 | 2,899,193 | 2,821,630 | |||||||||||||||
| Premises and equipment, net | 106,771 | 101,965 | 95,880 | 86,399 | 75,675 | |||||||||||||||
| Bank-owned life insurance | 44,703 | 44,416 | 44,138 | 43,864 | 43,589 | |||||||||||||||
| Other assets | 72,547 | 89,046 | 90,981 | 84,069 | 104,329 | |||||||||||||||
| Total assets | $ | 3,988,566 | $ | 3,965,115 | $ | 3,962,692 | $ | 3,825,758 | $ | 3,701,900 | ||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||||||||
| Deposits | $ | 3,278,553 | $ | 3,180,922 | $ | 3,065,030 | $ | 2,973,779 | $ | 2,755,529 | ||||||||||
| Federal funds purchased and other short-term borrowings | — | 85,500 | 198,500 | 150,270 | 261,510 | |||||||||||||||
| Other borrowings | 438,814 | 439,998 | 441,183 | 442,367 | 443,552 | |||||||||||||||
| Other liabilities | 35,846 | 34,812 | 34,223 | 34,299 | 37,376 | |||||||||||||||
| Stockholders’ equity | 235,353 | 223,883 | 223,756 | 225,043 | 203,933 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 3,988,566 | $ | 3,965,115 | $ | 3,962,692 | $ | 3,825,758 | $ | 3,701,900 | ||||||||||
| For the Quarter Ended | ||||||||||||||||||||
| AVERAGE BALANCES | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||||||||||||
| Assets | $ | 3,973,824 | $ | 3,964,109 | $ | 3,812,199 | $ | 3,706,497 | $ | 3,679,541 | ||||||||||
| Loans | 2,991,272 | 2,994,492 | 2,949,672 | 2,857,594 | 2,813,213 | |||||||||||||||
| Deposits | 3,258,669 | 3,123,282 | 2,956,635 | 2,878,676 | 2,764,184 | |||||||||||||||
| Stockholders’ equity | 227,513 | 219,771 | 219,835 | 201,920 | 215,230 | |||||||||||||||
| WEST BANCORPORATION, INC. AND SUBSIDIARY | ||||||||||||||||||||
| Financial Information (unaudited) | ||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| As of | ||||||||||||||||||||
| LOANS | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||||||||||||
| Commercial | $ | 512,884 | $ | 526,589 | $ | 544,293 | $ | 531,594 | $ | 529,293 | ||||||||||
| Real estate: | ||||||||||||||||||||
| Construction, land and land development | 520,516 | 496,864 | 465,247 | 413,477 | 399,253 | |||||||||||||||
| 1-4 family residential first mortgages | 89,749 | 92,230 | 108,065 | 106,688 | 89,713 | |||||||||||||||
| Home equity | 17,140 | 15,264 | 14,020 | 14,618 | 12,429 | |||||||||||||||
| Commercial | 1,870,132 | 1,856,301 | 1,839,580 | 1,854,510 | 1,812,816 | |||||||||||||||
| Consumer and other | 14,261 | 15,234 | 12,844 | 10,930 | 10,123 | |||||||||||||||
| 3,024,682 | 3,002,482 | 2,984,049 | 2,931,817 | 2,853,627 | ||||||||||||||||
| Net unamortized fees and costs | (3,461 | ) | (3,708 | ) | (3,916 | ) | (4,282 | ) | (3,850 | ) | ||||||||||
| Total loans | $ | 3,021,221 | $ | 2,998,774 | $ | 2,980,133 | $ | 2,927,535 | $ | 2,849,777 | ||||||||||
| Less: allowance for credit losses | (29,419 | ) | (28,422 | ) | (28,373 | ) | (28,342 | ) | (28,147 | ) | ||||||||||
| Net loans | $ | 2,991,802 | $ | 2,970,352 | $ | 2,951,760 | $ | 2,899,193 | $ | 2,821,630 | ||||||||||
| CREDIT QUALITY | ||||||||||||||||||||
| Pass | $ | 3,016,493 | $ | 2,994,310 | $ | 2,983,618 | $ | 2,931,377 | $ | 2,853,100 | ||||||||||
| Watch | 7,956 | 7,651 | 142 | 144 | 184 | |||||||||||||||
| Substandard | 233 | 521 | 289 | 296 | 343 | |||||||||||||||
| Doubtful | — | — | — | — | — | |||||||||||||||
| Total loans | $ | 3,024,682 | $ | 3,002,482 | $ | 2,984,049 | $ | 2,931,817 | $ | 2,853,627 | ||||||||||
| DEPOSITS | ||||||||||||||||||||
| Noninterest-bearing demand | $ | 525,332 | $ | 530,441 | $ | 521,377 | $ | 548,726 | $ | 551,688 | ||||||||||
| Interest-bearing demand | 438,402 | 443,658 | 449,946 | 481,207 | 417,802 | |||||||||||||||
| Savings and money market – non-brokered | 1,481,840 | 1,483,264 | 1,315,698 | 1,315,741 | 1,249,309 | |||||||||||||||
| Money market – brokered | 123,780 | 97,259 | 119,840 | 124,335 | 99,282 | |||||||||||||||
| Total nonmaturity deposits | 2,569,354 | 2,554,622 | 2,406,861 | 2,470,009 | 2,318,081 | |||||||||||||||
| Time – non-brokered | 407,109 | 353,269 | 381,646 | 322,694 | 299,683 | |||||||||||||||
| Time – brokered | 302,090 | 273,031 | 276,523 | 181,076 | 137,765 | |||||||||||||||
| Total time deposits | 709,199 | 626,300 | 658,169 | 503,770 | 437,448 | |||||||||||||||
| Total deposits | $ | 3,278,553 | $ | 3,180,922 | $ | 3,065,030 | $ | 2,973,779 | $ | 2,755,529 | ||||||||||
| BORROWINGS | ||||||||||||||||||||
| Federal funds purchased and other short-term borrowings | $ | — | $ | 85,500 | $ | 198,500 | $ | 150,270 | $ | 261,510 | ||||||||||
| Subordinated notes, net | 79,828 | 79,762 | 79,697 | 79,631 | 79,566 | |||||||||||||||
| Federal Home Loan Bank advances | 315,000 | 315,000 | 315,000 | 315,000 | 315,000 | |||||||||||||||
| Long-term debt | 43,986 | 45,236 | 46,486 | 47,736 | 48,986 | |||||||||||||||
| Total borrowings | $ | 438,814 | $ | 525,498 | $ | 639,683 | $ | 592,637 | $ | 705,062 | ||||||||||
| STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
| Preferred stock | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
| Common stock | 3,000 | 3,000 | 3,000 | 3,000 | 3,000 | |||||||||||||||
| Additional paid-in capital | 34,960 | 34,322 | 33,685 | 34,197 | 33,487 | |||||||||||||||
| Retained earnings | 275,724 | 273,981 | 272,997 | 271,369 | 271,025 | |||||||||||||||
| Accumulated other comprehensive loss | (78,331 | ) | (87,420 | ) | (85,926 | ) | (83,523 | ) | (103,579 | ) | ||||||||||
| Total stockholders’ equity | $ | 235,353 | $ | 223,883 | $ | 223,756 | $ | 225,043 | $ | 203,933 | ||||||||||
| WEST BANCORPORATION, INC. AND SUBSIDIARY | ||||||||||||||||||||
| Financial Information (unaudited) | ||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||||||||||||
| Interest income: | ||||||||||||||||||||
| Loans, including fees | $ | 42,504 | $ | 41,700 | $ | 40,196 | $ | 38,208 | $ | 36,756 | ||||||||||
| Securities: | ||||||||||||||||||||
| Taxable | 3,261 | 3,394 | 3,416 | 3,521 | 3,427 | |||||||||||||||
| Tax-exempt | 806 | 808 | 810 | 869 | 880 | |||||||||||||||
| Interest-bearing deposits | 2,041 | 1,666 | 148 | 85 | 29 | |||||||||||||||
| Total interest income | 48,612 | 47,568 | 44,570 | 42,683 | 41,092 | |||||||||||||||
| Interest expense: | ||||||||||||||||||||
| Deposits | 26,076 | 23,943 | 21,559 | 20,024 | 17,156 | |||||||||||||||
| Federal funds purchased and other short-term borrowings | 115 | 1,950 | 2,183 | 2,024 | 3,165 | |||||||||||||||
| Subordinated notes | 1,112 | 1,105 | 1,108 | 1,114 | 1,113 | |||||||||||||||
| Federal Home Loan Bank advances | 2,748 | 2,718 | 2,325 | 2,482 | 2,329 | |||||||||||||||
| Long-term debt | 601 | 622 | 645 | 678 | 695 | |||||||||||||||
| Total interest expense | 30,652 | 30,338 | 27,820 | 26,322 | 24,458 | |||||||||||||||
| Net interest income | 17,960 | 17,230 | 16,750 | 16,361 | 16,634 | |||||||||||||||
| Credit loss expense | — | — | — | 500 | 200 | |||||||||||||||
| Net interest income after credit loss expense | 17,960 | 17,230 | 16,750 | 15,861 | 16,434 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||
| Service charges on deposit accounts | 459 | 462 | 460 | 476 | 463 | |||||||||||||||
| Debit card usage fees | 500 | 490 | 458 | 488 | 495 | |||||||||||||||
| Trust services | 828 | 794 | 776 | 782 | 831 | |||||||||||||||
| Increase in cash value of bank-owned life insurance | 287 | 278 | 274 | 275 | 262 | |||||||||||||||
| Loan swap fees | — | — | — | — | 431 | |||||||||||||||
| Realized securities losses, net | — | — | — | (431 | ) | — | ||||||||||||||
| Other income | 285 | 322 | 331 | 308 | 340 | |||||||||||||||
| Total noninterest income | 2,359 | 2,346 | 2,299 | 1,898 | 2,822 | |||||||||||||||
| Noninterest expense: | ||||||||||||||||||||
| Salaries and employee benefits | 6,823 | 7,169 | 6,489 | 6,468 | 6,696 | |||||||||||||||
| Occupancy and equipment | 1,926 | 1,852 | 1,447 | 1,499 | 1,359 | |||||||||||||||
| Data processing | 771 | 754 | 714 | 723 | 703 | |||||||||||||||
| Technology and software | 722 | 731 | 700 | 676 | 573 | |||||||||||||||
| FDIC insurance | 711 | 631 | 519 | 475 | 439 | |||||||||||||||
| Professional fees | 239 | 244 | 257 | 235 | 254 | |||||||||||||||
| Director fees | 223 | 236 | 199 | 240 | 196 | |||||||||||||||
| Other expenses | 1,477 | 1,577 | 1,543 | 1,845 | 1,685 | |||||||||||||||
| Total noninterest expense | 12,892 | 13,194 | 11,868 | 12,161 | 11,905 | |||||||||||||||
| Income before income taxes | 7,427 | 6,382 | 7,181 | 5,598 | 7,351 | |||||||||||||||
| Income taxes | 1,475 | 1,190 | 1,372 | 1,073 | 1,445 | |||||||||||||||
| Net income | $ | 5,952 | $ | 5,192 | $ | 5,809 | $ | 4,525 | $ | 5,906 | ||||||||||
| Basic earnings per common share | $ | 0.35 | $ | 0.31 | $ | 0.35 | $ | 0.27 | $ | 0.35 | ||||||||||
| Diluted earnings per common share | $ | 0.35 | $ | 0.31 | $ | 0.35 | $ | 0.27 | $ | 0.35 | ||||||||||
| WEST BANCORPORATION, INC. AND SUBSIDIARY | ||||||||
| Financial Information (unaudited) | ||||||||
| (in thousands) | ||||||||
| For the Nine Months Ended | ||||||||
| CONSOLIDATED STATEMENTS OF INCOME | September 30, 2024 | September 30, 2023 | ||||||
| Interest income: | ||||||||
| Loans, including fees | $ | 124,400 | $ | 104,715 | ||||
| Securities: | ||||||||
| Taxable | 10,071 | 10,175 | ||||||
| Tax-exempt | 2,424 | 2,648 | ||||||
| Interest-bearing deposits | 3,855 | 84 | ||||||
| Total interest income | 140,750 | 117,622 | ||||||
| Interest expense: | ||||||||
| Deposits | 71,578 | 46,772 | ||||||
| Federal funds purchased and other short-term borrowings | 4,248 | 7,508 | ||||||
| Subordinated notes | 3,325 | 3,328 | ||||||
| Federal Home Loan Bank advances | 7,791 | 5,212 | ||||||
| Long-term debt | 1,868 | 2,132 | ||||||
| Total interest expense | 88,810 | 64,952 | ||||||
| Net interest income | 51,940 | 52,670 | ||||||
| Credit loss expense | — | 200 | ||||||
| Net interest income after credit loss expense | 51,940 | 52,470 | ||||||
| Noninterest income: | ||||||||
| Service charges on deposit accounts | 1,381 | 1,383 | ||||||
| Debit card usage fees | 1,448 | 1,492 | ||||||
| Trust services | 2,398 | 2,286 | ||||||
| Increase in cash value of bank-owned life insurance | 839 | 769 | ||||||
| Loan swap fees | — | 431 | ||||||
| Gain from bank-owned life insurance | — | 691 | ||||||
| Other income | 938 | 1,116 | ||||||
| Total noninterest income | 7,004 | 8,168 | ||||||
| Noninterest expense: | ||||||||
| Salaries and employee benefits | 20,481 | 20,592 | ||||||
| Occupancy and equipment | 5,225 | 4,008 | ||||||
| Data processing | 2,239 | 2,067 | ||||||
| Technology and software | 2,153 | 1,665 | ||||||
| FDIC insurance | 1,861 | 1,275 | ||||||
| Professional fees | 740 | 791 | ||||||
| Director fees | 658 | 652 | ||||||
| Other expenses | 4,597 | 5,400 | ||||||
| Total noninterest expense | 37,954 | 36,450 | ||||||
| Income before income taxes | 20,990 | 24,188 | ||||||
| Income taxes | 4,037 | 4,576 | ||||||
| Net income | $ | 16,953 | $ | 19,612 | ||||
| Basic earnings per common share | $ | 1.01 | $ | 1.17 | ||||
| Diluted earnings per common share | $ | 1.00 | $ | 1.17 | ||||
| WEST BANCORPORATION, INC. AND SUBSIDIARY | ||||||||||||||||||||||||||||
| Financial Information (unaudited) | ||||||||||||||||||||||||||||
| As of and for the Quarter Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
| COMMON SHARE DATA | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||||||||||||||
| Earnings per common share (basic) | $ | 0.35 | $ | 0.31 | $ | 0.35 | $ | 0.27 | $ | 0.35 | $ | 1.01 | $ | 1.17 | ||||||||||||||
| Earnings per common share (diluted) | 0.35 | 0.31 | 0.35 | 0.27 | 0.35 | 1.00 | 1.17 | |||||||||||||||||||||
| Dividends per common share | 0.25 | 0.25 | 0.25 | 0.25 | 0.25 | 0.75 | 0.75 | |||||||||||||||||||||
| Book value per common share(1) | 13.98 | 13.30 | 13.31 | 13.46 | 12.19 | |||||||||||||||||||||||
| Closing stock price | 19.01 | 17.90 | 17.83 | 21.20 | 16.31 | |||||||||||||||||||||||
| Market price/book value(2) | 135.98 | % | 134.59 | % | 133.96 | % | 157.50 | % | 133.80 | % | ||||||||||||||||||
| Price earnings ratio(3) | 13.65 | 14.36 | 12.77 | 19.79 | 11.75 | |||||||||||||||||||||||
| Annualized dividend yield(4) | 5.26 | % | 5.59 | % | 5.61 | % | 4.72 | % | 6.13 | % | ||||||||||||||||||
| REGULATORY CAPITAL RATIOS | ||||||||||||||||||||||||||||
| Consolidated: | ||||||||||||||||||||||||||||
| Total risk-based capital ratio | 11.95 | % | 11.85 | % | 11.78 | % | 11.88 | % | 11.96 | % | ||||||||||||||||||
| Tier 1 risk-based capital ratio | 9.39 | 9.30 | 9.23 | 9.30 | 9.37 | |||||||||||||||||||||||
| Tier 1 leverage capital ratio | 8.15 | 8.08 | 8.36 | 8.50 | 8.58 | |||||||||||||||||||||||
| Common equity tier 1 ratio | 8.83 | 8.74 | 8.67 | 8.74 | 8.80 | |||||||||||||||||||||||
| West Bank: | ||||||||||||||||||||||||||||
| Total risk-based capital ratio | 12.73 | % | 12.66 | % | 12.63 | % | 12.76 | % | 12.89 | % | ||||||||||||||||||
| Tier 1 risk-based capital ratio | 11.86 | 11.79 | 11.76 | 11.89 | 12.01 | |||||||||||||||||||||||
| Tier 1 leverage capital ratio | 10.29 | 10.25 | 10.65 | 10.86 | 11.00 | |||||||||||||||||||||||
| Common equity tier 1 ratio | 11.86 | 11.79 | 11.76 | 11.89 | 12.01 | |||||||||||||||||||||||
| KEY PERFORMANCE RATIOS AND OTHER METRICS | ||||||||||||||||||||||||||||
| Return on average assets(5) | 0.60 | % | 0.53 | % | 0.61 | % | 0.48 | % | 0.64 | % | 0.59 | % | 0.72 | % | ||||||||||||||
| Return on average equity(6) | 10.41 | 9.50 | 10.63 | 8.89 | 10.89 | 10.18 | 12.22 | |||||||||||||||||||||
| Net interest margin(7)(13) | 1.91 | 1.86 | 1.88 | 1.87 | 1.91 | 1.88 | 2.05 | |||||||||||||||||||||
| Yield on interest-earning assets(8)(13) | 5.16 | 5.13 | 4.99 | 4.87 | 4.70 | 5.10 | 4.56 | |||||||||||||||||||||
| Cost of interest-bearing liabilities | 3.84 | 3.83 | 3.70 | 3.60 | 3.38 | 3.79 | 3.09 | |||||||||||||||||||||
| Efficiency ratio(9)(13) | 63.28 | 67.14 | 62.04 | 64.66 | 60.83 | 64.16 | 59.52 | |||||||||||||||||||||
| Nonperforming assets to total assets(10) | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | |||||||||||||||||||||||
| ACL ratio(11) | 0.97 | 0.95 | 0.95 | 0.97 | 0.99 | |||||||||||||||||||||||
| Loans/total assets | 75.75 | 75.63 | 75.20 | 76.52 | 76.98 | |||||||||||||||||||||||
| Loans/total deposits | 92.15 | 94.27 | 97.23 | 98.44 | 103.42 | |||||||||||||||||||||||
| Tangible common equity ratio(12) | 5.90 | 5.65 | 5.65 | 5.88 | 5.51 | |||||||||||||||||||||||
| (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 on loans 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 | For the Nine Months Ended | ||||||||||||||||||||||||||
| September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||||||||||||||||
| Reconciliation of net interest income and net interest margin on a FTE basis to GAAP: | ||||||||||||||||||||||||||||
| Net interest income (GAAP) | $ | 17,960 | $ | 17,230 | $ | 16,750 | $ | 16,361 | $ | 16,634 | $ | 51,940 | $ | 52,670 | ||||||||||||||
| Tax-equivalent adjustment (1) | 29 | 55 | 82 | 95 | 113 | 166 | 396 | |||||||||||||||||||||
| Net interest income on a FTE basis (non-GAAP) | 17,989 | 17,285 | 16,832 | 16,456 | 16,747 | 52,106 | 53,066 | |||||||||||||||||||||
| Average interest-earning assets | 3,749,688 | 3,731,674 | 3,595,954 | 3,487,799 | 3,478,053 | 3,692,647 | 3,458,606 | |||||||||||||||||||||
| Net interest margin on a FTE basis (non-GAAP) | 1.91 | % | 1.86 | % | 1.88 | % | 1.87 | % | 1.91 | % | 1.88 | % | 2.05 | % | ||||||||||||||
| Reconciliation of efficiency ratio on an adjusted and FTE basis to GAAP: | ||||||||||||||||||||||||||||
| Net interest income on a FTE basis (non-GAAP) | $ | 17,989 | $ | 17,285 | $ | 16,832 | $ | 16,456 | $ | 16,747 | $ | 52,106 | $ | 53,066 | ||||||||||||||
| Noninterest income | 2,359 | 2,346 | 2,299 | 1,898 | 2,822 | 7,004 | 8,168 | |||||||||||||||||||||
| Adjustment for realized securities losses, net | — | — | — | 431 | — | — | — | |||||||||||||||||||||
| Adjustment for losses on disposal of premises and equipment, net | 26 | 21 | — | 24 | 3 | 47 | 5 | |||||||||||||||||||||
| Adjusted income | 20,374 | 19,652 | 19,131 | 18,809 | 19,572 | 59,157 | 61,239 | |||||||||||||||||||||
| Noninterest expense | 12,892 | 13,194 | 11,868 | 12,161 | 11,905 | 37,954 | 36,450 | |||||||||||||||||||||
| Efficiency ratio on an adjusted and FTE basis (non-GAAP) (2) | 63.28 | % | 67.14 | % | 62.04 | % | 64.66 | % | 60.83 | % | 64.16 | % | 59.52 | % | ||||||||||||||
| (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. |
