8-K
West Bancorporation Inc (WTBA)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): April 29, 2021
WEST BANCORPORATION, INC.
(Exact name of registrant as specified in its charter)
| Iowa | 0-49677 | 42-1230603 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
1601 22nd Street, West Des Moines, Iowa 50266
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 515-222-2300
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered or to be registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, no par value | WTBA | The Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02 Results of Operations and Financial Condition.
On April 29, 2021, West Bancorporation, Inc. (the "Company") issued a press release announcing its earnings results for the quarter ended March 31, 2021, and the declaration of a quarterly dividend. The press release is furnished as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
| Exhibit Number | Description |
|---|---|
| 99.1 | Press Release of West Bancorporation, Inc. dated April 29, 2021 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| West Bancorporation, Inc. | ||
|---|---|---|
| April 29, 2021 | By: | /s/ Douglas R. Gulling |
| Name: Douglas R. Gulling | ||
| Title: Executive Vice President, Treasurer and Chief Financial Officer |
Document
Exhibit 99.1
Press Release
April 29, 2021
FOR IMMEDIATE RELEASE
For more information contact:
Doug Gulling, Executive Vice President, Treasurer and Chief Financial Officer (515) 222-2309
WEST BANCORPORATION, INC. ANNOUNCES RECORD NET INCOME FOR THE FIRST QUARTER OF 2021, DECLARES INCREASED AND RECORD QUARTERLY DIVIDEND
West Des Moines, IA - West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent company of West Bank, today reported that first quarter 2021 net income was $11.8 million, or $0.70 per diluted common share, compared to first quarter 2020 net income of $8.1 million, or $0.49 per diluted common share. On April 28, 2021, the Company’s Board of Directors declared a regular quarterly dividend of $0.24 per common share, an increase of $0.02 from the prior quarter and representing a record high quarterly dividend for the Company. The dividend is payable on May 26, 2021, to stockholders of record on May 12, 2021.
Dave Nelson, President and Chief Executive Officer of the Company, commented, “One year ago, the onset of the COVID-19 pandemic created significant economic uncertainty across the world. The strength of West Bank’s capital, credit quality and customer relationships provided a strong footing for navigating the economic uncertainties and operational difficulties created by the pandemic. One year later, West Bank continues to post record results. Our commitment to our shareholders, customers and communities has never been stronger. We continue to build our brand in Minnesota and are excited to have begun construction of a permanent branch office in Sartell, Minnesota.”
Dave Nelson also commented, “West Bank was recently ranked 10th in the nation of best-performing large community banks by S&P Global Market Intelligence. The ranking includes public and privately owned community banks between $3 billion and $10 billion in assets in 2020 and is based on six financial performance metrics. We are proud of the acknowledgment our team has received.”
The Company filed its report on Form 10-Q with the Securities and Exchange Commission today. Please refer to that document for a more in-depth discussion of our financial results. The Form 10-Q is available on the Investor Relations section of West Bank’s website at www.westbankstrong.com.
The Company will discuss its financial results on a conference call scheduled for 10:00 a.m. Central Time tomorrow, Friday, April 30, 2021. The telephone number for the conference call is 888-339-0814. A recording of the call will be available until May 14, 2021, by dialing 877-344-7529. The replay passcode is 10150543.
About West Bancorporation, Inc. (Nasdaq: WTBA)
West Bancorporation, Inc. is headquartered in West Des Moines, Iowa. Serving customers since 1893, West Bank, a wholly-owned subsidiary of West Bancorporation, Inc., is a community bank that focuses on lending, deposit services, and trust services for consumers and small- to medium-sized businesses. West Bank has seven offices in the Des Moines, Iowa metropolitan area, one office in Coralville, Iowa, and four offices in Minnesota in the cities of Rochester, Owatonna, Mankato and St. Cloud.
Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to the Company’s business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may appear throughout this report. These forward-looking statements are generally identified by the words “believes,” “expects,” “intends,” “anticipates,” “projects,” “future,” “confident,” “may,” “should,” “will,” “strategy,” “plan,” “opportunity,” “will be,” “will likely result,” “will continue” or similar references, or references to estimates, predictions or future events. Such forward-looking statements are based upon certain underlying assumptions, risks and uncertainties. Because of the possibility that the underlying assumptions are incorrect or do not materialize as expected in the future, actual results could differ materially from these forward-looking statements. Risks and uncertainties that may affect future results include: the effects of the COVID-19 pandemic, including its potential effects on the economic environment, our customers and our operations, as well as any changes to federal, state or local government laws, regulations or orders in connection with the pandemic; interest rate risk; competitive pressures; pricing pressures on loans and deposits; changes in credit and other risks posed by the Company’s loan and investment portfolios, including declines in commercial or residential real estate values or changes in the allowance for loan losses dictated by new market conditions, accounting standards (including as a result of the future implementation of the current expected credit loss (CECL) accounting standard) or regulatory requirements; actions of bank and nonbank competitors; changes in local, national and international economic conditions; changes in legal and regulatory requirements, limitations and costs; changes in customers’ acceptance of the Company’s products and services; cyber-attacks; unexpected outcomes of existing or new litigation involving the Company; the monetary, trade and other regulatory policies of the U.S. government; acts of war or terrorism, widespread disease or pandemics, such as the COVID-19 pandemic, or other adverse external events; developments and uncertainty related to the future use and availability of some reference rates, such as the London Interbank Offered Rate, as well as other alternative reference rates; changes to U.S. tax laws, regulations and guidance; and any other risks described in the “Risk Factors” sections of reports filed by the Company with the Securities and Exchange Commission. The Company undertakes no obligation to revise or update such forward-looking statements to reflect current or future events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
| WEST BANCORPORATION, INC. AND SUBSIDIARY | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Financial Information (unaudited) | ||||||||||
| (in thousands) | ||||||||||
| CONSOLIDATED BALANCE SHEETS | March 31, 2021 | March 31, 2020 | ||||||||
| Assets | ||||||||||
| Cash and due from banks | $ | 23,570 | $ | 65,256 | ||||||
| Federal funds sold | 301,919 | 1,141 | ||||||||
| Securities available for sale, at fair value | 447,152 | 372,420 | ||||||||
| Federal Home Loan Bank stock, at cost | 12,414 | 13,739 | ||||||||
| Loans | 2,303,999 | 1,994,432 | ||||||||
| Allowance for loan losses | (30,008) | (18,332) | ||||||||
| Loans, net | 2,273,991 | 1,976,100 | ||||||||
| Premises and equipment, net | 29,308 | 29,129 | ||||||||
| Bank-owned life insurance | 42,906 | 35,051 | ||||||||
| Other assets | 41,646 | 26,773 | ||||||||
| Total assets | $ | 3,172,906 | $ | 2,519,609 | ||||||
| Liabilities and Stockholders’ Equity | ||||||||||
| Deposits: | ||||||||||
| Noninterest-bearing demand | $ | 691,329 | $ | 408,144 | ||||||
| Interest-bearing: | ||||||||||
| Demand | 466,913 | 357,313 | ||||||||
| Savings | 1,318,536 | 1,025,749 | ||||||||
| Time of $250 or more | 45,844 | 71,789 | ||||||||
| Other time | 159,471 | 157,130 | ||||||||
| Total deposits | 2,682,093 | 2,020,125 | ||||||||
| Federal funds purchased | 4,060 | 32,340 | ||||||||
| Other borrowings | 216,374 | 222,958 | ||||||||
| Other liabilities | 35,850 | 43,493 | ||||||||
| Stockholders’ equity | 234,529 | 200,693 | ||||||||
| Total liabilities and stockholders’ equity | $ | 3,172,906 | $ | 2,519,609 | ||||||
| WEST BANCORPORATION, INC. AND SUBSIDIARY | ||||||||||
| --- | --- | --- | --- | |||||||
| Financial Information (continued) (unaudited) | ||||||||||
| (in thousands) | ||||||||||
| Three Months Ended March 31, | ||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | 2021 | 2020 | ||||||||
| Interest income | ||||||||||
| Loans, including fees | $ | 24,038 | $ | 22,311 | ||||||
| Securities | 2,203 | 2,680 | ||||||||
| Other | 69 | 229 | ||||||||
| Total interest income | 26,310 | 25,220 | ||||||||
| Interest expense | ||||||||||
| Deposits | 1,877 | 5,046 | ||||||||
| Federal funds purchased | 1 | 16 | ||||||||
| Other borrowings | 1,311 | 1,694 | ||||||||
| Total interest expense | 3,189 | 6,756 | ||||||||
| Net interest income | 23,121 | 18,464 | ||||||||
| Provision for loan losses | 500 | 1,000 | ||||||||
| Net interest income after provision for loan losses | 22,621 | 17,464 | ||||||||
| Noninterest income | ||||||||||
| Service charges on deposit accounts | 582 | 603 | ||||||||
| Debit card usage fees | 442 | 382 | ||||||||
| Trust services | 652 | 463 | ||||||||
| Increase in cash value of bank-owned life insurance | 220 | 158 | ||||||||
| Loan swap fees | — | 586 | ||||||||
| Realized investment securities gains (losses), net | 4 | (6) | ||||||||
| Other income | 565 | 334 | ||||||||
| Total noninterest income | 2,465 | 2,520 | ||||||||
| Noninterest expense | ||||||||||
| Salaries and employee benefits | 5,608 | 5,284 | ||||||||
| Occupancy | 1,228 | 1,213 | ||||||||
| Data processing | 602 | 630 | ||||||||
| FDIC insurance | 404 | 237 | ||||||||
| Other expenses | 2,429 | 2,299 | ||||||||
| Total noninterest expense | 10,271 | 9,663 | ||||||||
| Income before income taxes | 14,815 | 10,321 | ||||||||
| Income taxes | 3,063 | 2,232 | ||||||||
| Net income | $ | 11,752 | $ | 8,089 | ||||||
| WEST BANCORPORATION, INC. AND SUBSIDIARY | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Financial Information (continued) (unaudited) | ||||||||||
| PER COMMON SHARE | MARKET INFORMATION (1) | |||||||||
| Net Income | ||||||||||
| Basic | Diluted | Dividends | High | Low | ||||||
| 2021 | ||||||||||
| 1st Quarter | $ | 0.71 | $ | 0.70 | $ | 0.22 | $ | 26.78 | $ | 18.86 |
| 2020 | ||||||||||
| 4th Quarter | $ | 0.52 | $ | 0.52 | $ | 0.21 | $ | 21.79 | $ | 15.53 |
| 3rd Quarter | 0.49 | 0.49 | 0.21 | 17.99 | 15.50 | |||||
| 2nd Quarter | 0.48 | 0.48 | 0.21 | 20.67 | 14.50 | |||||
| 1st Quarter | 0.49 | 0.49 | 0.21 | 25.68 | 13.74 |
(1) The prices shown are the high and low sale prices for the Company’s common stock, which trades on the Nasdaq Global Select Market under the symbol WTBA. The market quotations, reported by Nasdaq, do not include retail markup, markdown or commissions.
| Three Months Ended March 31, | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| SELECTED FINANCIAL MEASURES | 2021 | 2020 | |||||||
| Return on average assets | 1.53 | % | 1.29 | % | |||||
| Return on average equity | 20.77 | % | 15.54 | % | |||||
| Net interest margin (2) | 3.17 | % | 3.10 | % | |||||
| Efficiency ratio (1)(2) | 39.75 | % | 45.64 | % | |||||
| As of March 31, | |||||||||
| 2021 | 2020 | ||||||||
| Texas ratio(1) | 9.38 | % | 0.22 | % | |||||
| Allowance for loan losses ratio | 1.30 | % | 0.92 | % | |||||
| Allowance for loan losses ratio, excluding PPP loans (2)(3) | 1.39 | % | 0.92 | % | |||||
| Tangible common equity ratio | 7.39 | % | 7.97 | % |
(1) A lower ratio is more desirable
(2) Non-GAAP financial measures - see reconciliation below
(3) Paycheck Protection Program (PPP)
Definitions of ratios:
•Return on average assets - annualized net income divided by average assets.
•Return on average equity - annualized net income divided by average stockholders’ equity.
•Net interest margin - annualized tax-equivalent net interest income divided by average interest-earning assets.
•Efficiency ratio - noninterest expense (excluding other real estate owned expense) divided by noninterest income (excluding net securities gains/losses and gains/losses on disposition of premises and equipment) plus tax-equivalent net interest income.
•Texas ratio - total nonperforming assets divided by tangible common equity plus the allowance for loan losses.
•Allowance for loan losses ratio - allowance for loan losses divided by total loans.
•Allowance for loan losses ratio, excluding PPP loans - allowance for loan losses divided by total loans minus the amount of PPP loans.
•Tangible common equity ratio - common equity less intangible assets (none held) divided by tangible assets.
WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (continued) (unaudited)
(dollars in thousands)
NON-GAAP FINANCIAL MEASURES
This report contains references to financial measures that are not defined in generally accepted accounting principles (GAAP). The following table reconciles the non-GAAP financial measures of net interest income and net interest margin on a fully taxable equivalent (FTE) basis, efficiency ratio on an adjusted and FTE basis, loans, net of PPP loans and allowance for loan losses ratio, excluding PPP loans, to their most directly comparable measures under GAAP.
| Three Months Ended March 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | ||||||||||
| Reconciliation of net interest income and net interest margin on an FTE basis to GAAP: | |||||||||||
| Net interest income (GAAP) | $ | 23,121 | $ | 18,464 | |||||||
| Tax-equivalent adjustment (1) | 229 | 178 | |||||||||
| Net interest income on an FTE basis (non-GAAP) | 23,350 | 18,642 | |||||||||
| Average interest-earning assets | 2,979,710 | 2,420,497 | |||||||||
| Net interest margin on an FTE basis (non-GAAP) | 3.17 | % | 3.10 | % | |||||||
| Reconciliation of efficiency ratio on an adjusted and FTE basis to GAAP: | |||||||||||
| Net interest income on an FTE basis (non-GAAP) | $ | 23,350 | $ | 18,642 | |||||||
| Noninterest income | 2,465 | 2,520 | |||||||||
| Adjustment for realized securities (gains) losses, net | (4) | 6 | |||||||||
| Adjustment for losses on disposal of premises and equipment, net | 24 | 2 | |||||||||
| Adjusted income | 25,835 | 21,170 | |||||||||
| Noninterest expense | 10,271 | 9,663 | |||||||||
| Efficiency ratio on an adjusted and FTE basis (non-GAAP) (2) | 39.75% | 45.64 | % | ||||||||
| As of March 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| Reconciliation of allowance for loan losses ratio, excluding PPP loans: | |||||||||||
| Loans outstanding (GAAP) | $ | 2,303,999 | $ | 1,994,432 | |||||||
| Less: PPP loans | (151,122) | — | |||||||||
| Loans, net of PPP loans (non-GAAP) | 2,152,877 | 1,994,432 | |||||||||
| Allowance for loan losses | 30,008 | 18,332 | |||||||||
| Allowance for loan losses ratio, excluding PPP loans (non-GAAP) | 1.39 | % | 0.92 | % |
(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.