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

WEST DES MOINES, Iowa, Oct. 27, 2016 (GLOBE NEWSWIRE) -- West Bancorporation, Inc. (NASDAQ:WTBA), parent company of West Bank, is pleased to report that third quarter 2016 net income was $5.8 million, or $0.36 per diluted common share.  This is the highest net income ever recorded by the Company for the third quarter of any year.  This compares to third quarter 2015 net income of $5.4 million, or $0.34 per diluted common share.  On October 26, 2016, the Company's Board of Directors declared a regular quarterly dividend of $0.17 per common share.  This is equal to the highest quarterly dividend ever paid by the Company.  The dividend is payable on November 23, 2016, to shareholders of record on November 9, 2016.

For the first nine months of 2016, net income was $17.0 million, or $1.05 per diluted common share, up from $15.8 million, or $0.98 per diluted common share, for the first nine months of 2015.  The increase in net income for the third quarter and first nine months of 2016 compared to the same periods last year was primarily the result of higher net interest income, which was mainly due to loan growth.

"We are very pleased with the third quarter of 2016," commented Dave Nelson, President and Chief Executive Officer of the Company.  "Our key performance measures continue to be strong as compared to our peers.  We are proud to say that this is the ninth consecutive quarter we have had record earnings for the respective quarter."

Brad Winterbottom, West Bank President, said, "Our exceptional loan growth in the first nine months of 2016 has helped us grow net interest income by 6.7 percent compared to the first nine months of 2015.  Outstanding loan balances at September 30, 2016 were 11.5 percent higher than a year ago.  While our loan growth during the third quarter of 2016 was modest, our pipeline of potential new business continues to be strong, and we have several construction loans yet to be funded.  Our bankers continue to work very hard to foster new relationships and leverage existing ones."

Eastern Iowa Market President, Jim Conard, commented, "We have seen 9.6 percent growth in the eastern Iowa loan portfolio from December 31, 2015 through September 30, 2016, which is primarily attributable to healthy loan demand in the active local commercial real estate market. Our clients have taken advantage of opportunities to add to their portfolios with financing provided by West Bank."

"In Rochester, we are enjoying continued market share growth this year, which gives us momentum leading up to next month's opening of our new Rochester bank building," said Mike Zinser, Rochester Market President. "Our state-of-the-art, full-service bank will not only expand our physical presence in Rochester, but will also allow us to broaden our banking services."  Zinser continued, "With last year's addition of Natalie Jones to help build consumer banking in Rochester, we have now assembled a well-known and highly regarded consumer banking team.  The timing is right for us to continue our expansion as many valued households are now desiring a strong, local community bank.  We expect business banking and consumer banking to complement each other in our effort to grow by simply providing what is important to our customers."

The Company filed its report on Form 10-Q with the Securities and Exchange Commission this morning.  Please refer to that document for a more in-depth discussion of our results.  The Form 10-Q document 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 10:00 a.m. Central Time tomorrow, Friday, October 28, 2016.  The telephone number for the conference call is 888-339-0814.  A recording of the call will be available until November 11, 2016, by dialing 877-344-7529.  The replay passcode is 10077826.

About West Bancorporation, Inc. (NASDAQ:WTBA)West Bancorporation, Inc. is headquartered in West Des Moines, Iowa.  Serving Iowans since 1893, West Bank, a wholly-owned subsidiary of West Bancorporation, Inc., is a community bank that focuses on lending, deposit services, and trust services for consumers and small- to medium-sized businesses.  West Bank has eight offices in the Des Moines metropolitan area, one office in Iowa City, Iowa, one office in Coralville, Iowa and one office in Rochester, Minnesota.

Certain statements in this press release, other than purely historical information, including estimates, projections, statements relating to our 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 press release.  These forward-looking statements are generally identified by the words "believes," "expects," "intends," "anticipates," "projects," "future," "may," "should," "will," "strategy," "plan," "opportunity," "will be," "will likely result," "will continue," or similar references, or references to estimates, predictions or future events.  Such forward-looking statements are based upon certain underlying assumptions, risks and uncertainties.  Because of the possibility that the underlying assumptions are incorrect or do not materialize as expected in the future, actual results could differ materially from these forward-looking statements.  Risks and uncertainties that may affect future results include: interest rate risk; competitive pressures; pricing pressures on loans and deposits; changes in credit and other risks posed by the Company's loan and investment portfolios, including declines in commercial or residential real estate values or changes in the allowance for loan losses dictated by new market conditions or regulatory requirements; actions of bank and non-bank competitors; changes in local, national and international economic conditions; changes in 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; 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   September 30, 2016   September 30, 2015
Assets        
Cash and due from banks   $ 44,526     $ 36,194  
Federal funds sold   6,324     18,592  
Investment securities available for sale, at fair value   278,411     325,617  
Investment securities held to maturity, at amortized cost   48,405     51,280  
Federal Home Loan Bank stock, at cost   12,467     14,210  
Loans   1,382,895     1,240,038  
Allowance for loan losses   (15,958 )   (14,660 )
Loans, net   1,366,937     1,225,378  
Premises and equipment, net   21,023     11,115  
Bank-owned life insurance   32,956     32,657  
Other assets   13,781     17,875  
Total assets   $ 1,824,830     $ 1,732,918  
         
Liabilities and Stockholders' Equity        
Deposits:        
Noninterest-bearing   $ 483,434     $ 447,386  
Interest-bearing:        
Demand   264,640     241,250  
Savings   637,044     578,775  
Time of $250,000 or more   10,818     13,622  
Other time   95,720     106,103  
Total deposits   1,491,656     1,387,136  
Short-term borrowings   35,420     61,660  
Long-term borrowings   125,856     128,108  
Other liabilities   7,034     6,797  
Stockholders' equity   164,864     149,217  
Total liabilities and stockholders' equity   $ 1,824,830     $ 1,732,918  

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (continued) (unaudited)                
(in thousands)                
                 
    Three Months Ended September 30,   Nine Months Ended September 30,
CONSOLIDATED STATEMENTS OF INCOME   2016   2015   2016   2015
Interest income                
Loans, including fees   $ 14,898     $ 13,313     $ 42,667     $ 38,934  
Investment securities   1,771     1,806     5,704     5,493  
Other   27     28     58     60  
Total interest income   16,696     15,147     48,429     44,487  
Interest expense                
Deposits   872     500     2,401     1,622  
Short-term borrowings   9     7     43     38  
Long-term borrowings   1,094     934     3,292     2,804  
Total interest expense   1,975     1,441     5,736     4,464  
Net interest income   14,721     13,706     42,693     40,023  
Provision for loan losses   200     200     900     400  
Net interest income after provision for loan losses   14,521     13,506     41,793     39,623  
Noninterest income                
Service charges on deposit accounts   632     663     1,847     1,934  
Debit card usage fees   450     463     1,372     1,367  
Trust services   355     302     946     944  
Increase in cash value of bank-owned life insurance   160     183     492     550  
Gain from bank-owned life insurance           443      
Realized investment securities gains, net           60     47  
Other income   322     324     892     875  
Total noninterest income   1,919     1,935     6,052     5,717  
Noninterest expense                
Salaries and employee benefits   4,154     4,056     12,644     12,051  
Occupancy   1,038     1,031     2,972     3,090  
Data processing   643     595     1,849     1,738  
FDIC insurance   272     209     714     620  
Other expenses   1,886     1,658     5,432     4,939  
Total noninterest expense   7,993     7,549     23,611     22,438  
Income before income taxes   8,447     7,892     24,234     22,902  
Income taxes   2,634     2,466     7,249     7,101  
Net income   $ 5,813     $ 5,426     $ 16,985     $ 15,801  

WEST BANCORPORATION, INC. AND SUBSIDIARY    
Financial Information (continued) (unaudited)                
             
    PER COMMON SHARE   MARKET INFORMATION (1)
    Net Income            
    Basic   Diluted   Dividends   High   Low
2016                    
3rd Quarter   $ 0.36     $ 0.36     $ 0.17     $ 20.52     $ 17.65  
2nd Quarter     0.34       0.34       0.17       19.65       17.33  
1st Quarter     0.35       0.35       0.16       19.58       16.04  
                     
2015                    
4th Quarter     0.37       0.37       0.16       21.09       17.74  
3rd Quarter     0.34       0.34       0.16       20.99       17.67  
2nd Quarter     0.33       0.33       0.16       20.46       17.98  
1st Quarter     0.32       0.32       0.14       19.94       16.00  

(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 September 30,   Nine Months Ended September 30,
SELECTED FINANCIAL MEASURES   2016   2015   2016   2015
Return on average assets   1.26 %   1.28 %   1.26 %   1.28 %
Return on average equity   14.20 %   14.63 %   14.29 %   14.62 %
Net interest margin   3.50 %   3.59 %   3.51 %   3.59 %
Efficiency ratio*   46.25 %   46.30 %   46.59 %   47.12 %
                 
        As of September 30,
            2016   2015
Texas ratio*           0.55 %   2.35 %
Allowance for loan losses ratio           1.15 %   1.18 %
Tangible common equity ratio           9.03 %   8.61 %

* A lower ratio is more desirable.

Definitions of ratios:

  • Return on average assets - annualized net income divided by average assets.
  • Return on average equity - annualized net income divided by average stockholders' equity.
  • Net interest margin - 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 and gains/losses on disposition of premises and equipment) plus tax-equivalent net interest income.
  • Texas ratio - total nonperforming assets divided by tangible common equity plus the allowance for loan losses.
  • Allowance for loan losses ratio - allowance for loan losses divided by total loans.
  • Tangible common equity ratio - common equity less intangible assets divided by tangible assets.

 
For more information contact:Doug Gulling, Executive Vice President and Chief Financial Officer (515) 222-2309

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