West Bancorporation(WTBA)

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Strength Seen in West Bancorp (WTBA): Can Its 8.5% Jump Turn into More Strength?
ZACKS· 2024-07-12 16:50
West Bancorp (WTBA) shares ended the last trading session 8.5% higher at $18.71. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 0.9% gain over the past four weeks. Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements. With cooling ...
West Bancorporation(WTBA) - 2024 Q1 - Earnings Call Transcript
2024-04-25 21:22
West Bancorporation, Inc. (NASDAQ:WTBA) Q1 2024 Earnings Conference Call April 25, 2024 3:00 PM ET Company Participants Jane Funk - Chief Financial Officer Dave Nelson - Chief Executive Officer Harlee Olafson - Chief Risk Officer Brad Winterbottom - President Brad Peters - Minnesota Group President Conference Call Participants Andrew Liesch - Piper Sandler Operator Thanks for standing by. My name is Mandeep, and I will be your conference operator today. At this time, I would like to welcome everyone to the ...
West Bancorporation(WTBA) - 2024 Q1 - Quarterly Report
2024-04-25 11:12
PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents West Bancorporation, Inc.'s unaudited consolidated financial statements for Q1 2024 and 2023, encompassing balance sheets, income statements, and detailed notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$3.96 billion** by March 31, 2024, driven by loans and cash, while liabilities grew due to deposits, and equity slightly decreased Consolidated Balance Sheet Highlights (in thousands USD) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$3,962,692** | **$3,825,758** | | Cash and cash equivalents | $148,017 | $65,357 | | Loans, net | $2,951,760 | $2,899,193 | | Securities available for sale | $605,735 | $623,919 | | **Total Liabilities** | **$3,738,936** | **$3,600,715** | | Total deposits | $3,065,030 | $2,973,779 | | Federal Home Loan Bank advances | $315,000 | $315,000 | | **Total Stockholders' Equity** | **$223,756** | **$225,043** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Net income for Q1 2024 decreased to **$5.8 million** from **$7.8 million** in Q1 2023, primarily due to a **$1.9 million** decline in net interest income Q1 2024 vs. Q1 2023 Income Statement (in thousands USD, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Interest Income | $44,570 | $37,179 | | Total Interest Expense | $27,820 | $18,484 | | **Net Interest Income** | **$16,750** | **$18,695** | | Credit Loss Expense (benefit) | $0 | $0 | | Total Noninterest Income | $2,299 | $2,957 | | Total Noninterest Expense | $11,868 | $12,071 | | **Net Income** | **$5,809** | **$7,844** | | **Diluted EPS** | **$0.35** | **$0.47** | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail accounting policies, financial instruments, the securities portfolio's unrealized losses, strong loan credit quality, and off-balance-sheet commitments - As of March 31, 2024, the securities available for sale portfolio had **$129.6 million** in gross unrealized losses, primarily due to increased market interest rates[30](index=30&type=chunk)[35](index=35&type=chunk) - The loan portfolio grew to **$2.98 billion**, with an Allowance for Credit Losses of **$28.4 million** (0.95% of total loans), and minimal nonaccrual loans of **$289 thousand**, reflecting strong credit quality[37](index=37&type=chunk)[40](index=40&type=chunk)[53](index=53&type=chunk) - The company uses **$515 million** in interest rate swaps as cash flow hedges to manage interest rate risk on borrowings and deposits[82](index=82&type=chunk)[85](index=85&type=chunk) - Off-balance-sheet commitments totaled **$955 million**, primarily for real estate construction loans (**$343.8 million**) and other credit extensions (**$593.5 million**)[93](index=93&type=chunk)[94](index=94&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2024 financial results, noting a decrease in net income to **$5.8 million** due to net interest margin compression, while highlighting strong credit quality and capital position [Overview](index=33&type=section&id=Overview) Q1 2024 net income decreased to **$5.8 million** (**$0.35** diluted EPS) from **$7.8 million** in Q1 2023, primarily due to lower net interest income, despite loan growth and strong credit quality Q1 2024 Key Performance Metrics (in thousands USD, except percentages and EPS) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Income | $5,809 thousand | $7,844 thousand | | Diluted EPS | $0.35 | $0.47 | | Return on Average Assets | 0.61% | 0.88% | | Return on Average Equity | 10.63% | 14.77% | - The Board of Directors declared a quarterly cash dividend of **$0.25** per common share, payable on May 22, 2024[127](index=127&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Q1 2024 operating results show net interest margin compression, with net interest income (FTE) falling **10.7%** to **$16.8 million**, while noninterest income decreased and noninterest expense slightly declined - Net interest margin (FTE) compressed to **1.88%** in Q1 2024 from **2.23%** in Q1 2023, as the cost of interest-bearing liabilities rose faster than asset yields[134](index=134&type=chunk)[138](index=138&type=chunk) - No credit loss expense was recorded in Q1 2024 or Q1 2023, with the allowance for credit losses deemed adequate at **$28.4 million**[142](index=142&type=chunk)[148](index=148&type=chunk) - Noninterest income fell by **$0.66 million**, primarily due to a non-recurring **$0.69 million** gain from a bank-owned life insurance death benefit claim in Q1 2023[150](index=150&type=chunk) - Noninterest expense decreased by **$0.20 million**, mainly from a **$0.38 million** reduction in salaries and employee benefits, partially offset by higher technology and FDIC insurance costs[152](index=152&type=chunk) [Financial Condition](index=41&type=section&id=Financial%20Condition) As of March 31, 2024, total assets grew to **$3.96 billion**, driven by a **$52.6 million** increase in loans, while deposits rose by **$91.3 million**, and capital ratios remained strong - Total loans grew by **$52.6 million** (**1.8%**) in Q1 2024, reaching **$2.98 billion**, with nonperforming assets remaining extremely low at **$289 thousand**[157](index=157&type=chunk)[160](index=160&type=chunk) - Total deposits increased by **$91.3 million** (**3.1%**), with brokered deposits rising to **$396.4 million**, and estimated uninsured deposits at approximately **27.2%** of total deposits[161](index=161&type=chunk)[162](index=162&type=chunk) - The company maintains significant available liquidity, including **$479 million** in FHLB borrowing capacity and **$73 million** from the Federal Reserve discount window[165](index=165&type=chunk) Capital Ratios as of March 31, 2024 (%) | Ratio | Consolidated Actual | To Be Well-Capitalized | | :--- | :--- | :--- | | Common Equity Tier 1 Capital | 8.67% | 6.50% | | Tier 1 Capital | 9.23% | 8.00% | | Total Capital | 11.78% | 10.00% | | Tier 1 Capital (Leverage) | 8.36% | 5.00% | [Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, with an earnings simulation model projecting a **5.86%** decrease in net interest income for a **+100 bps** rate rise and a **1.57%** increase for a **-100 bps** rate fall Sensitivity of Net Interest Income (1-Year Horizon, % Change) | Change in Interest Rates | % Change in NII | | :--- | :--- | | +300 bps | (16.94)% | | +200 bps | (11.34)% | | +100 bps | (5.86)% | | -100 bps | 1.57% | | -200 bps | 1.63% | [Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures are effective, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of the end of the reporting period[177](index=177&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter[178](index=178&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is not a party to any material pending legal proceedings beyond ordinary routine litigation incidental to its business - There are no material pending legal proceedings against the Company or its subsidiary, West Bank, outside of ordinary routine litigation[180](index=180&type=chunk) [Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's amended Form 10-K filed on February 23, 2024 - Management believes there have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K[181](index=181&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities during the reporting period - None[182](index=182&type=chunk)
West Bancorporation(WTBA) - 2024 Q1 - Quarterly Results
2024-04-25 11:07
Financial Performance - First quarter 2024 net income was $5.8 million, or $0.35 per diluted common share, compared to $4.5 million, or $0.27 per diluted common share in Q4 2023, and $7.8 million, or $0.47 per diluted common share in Q1 2023[1] - The net income for the quarter was $5,809,000, representing a 28.3% increase from $4,525,000 in the previous quarter[15] - Basic and diluted earnings per common share increased to $0.35, up from $0.27 in the previous quarter, marking a 29.6% increase[16] - Adjusted income for the quarter was $19,131,000, up from $18,809,000 in the previous quarter, indicating a growth of 1.7%[22] Loans and Deposits - Loans increased by $52.6 million, or 7.2 percent annualized, in Q1 2024, primarily due to funding of previously committed construction loans[6] - Total loans reached $2,980,133 thousand, an increase of 1.8% from $2,927,535 thousand at the end of 2023[14] - Net loans amounted to $2,951,760 thousand, reflecting a rise of 1.8% compared to $2,899,193 thousand in the previous quarter[14] - Deposits increased by $91.3 million, or 3.1 percent, in Q1 2024, with brokered deposits totaling $396.4 million, up from $305.4 million at the end of Q4 2023[10] - Total deposits grew to $3,065,030 thousand, up 3.1% from $2,973,779 thousand at December 31, 2023[14] Asset Management - Total assets increased to $3,962,692 thousand as of March 31, 2024, up from $3,825,758 thousand at December 31, 2023, representing a growth of 3.6%[13] - The average balance of assets for the quarter was $3,812,199 thousand, compared to $3,706,497 thousand in the previous quarter, indicating an increase of 2.9%[13] - The tangible common equity ratio decreased to 5.65 percent at March 31, 2024, from 5.88 percent at December 31, 2023, due to accumulated other comprehensive losses[10] Income and Expenses - For the quarter ended March 31, 2024, total interest income increased to $44,570,000, up 4.4% from $42,683,000 in the previous quarter[15] - Net interest income after credit loss expense for the quarter was $16,750,000, compared to $15,861,000 in the previous quarter, reflecting a 5.6% increase[15] - Noninterest income totaled $2,299,000, a significant increase of 21.1% from $1,898,000 in the previous quarter[15] - Noninterest expense decreased to $11,868,000 from $12,161,000 in the previous quarter, showing a reduction of about 2.4%[22] Efficiency and Ratios - The efficiency ratio improved to 62.04 percent in Q1 2024 from 64.66 percent in Q4 2023, driven by an increase in net interest income[10] - The efficiency ratio on an adjusted and FTE basis improved to 62.04% from 64.66% in the previous quarter, indicating enhanced operational efficiency[23] - Return on average assets increased to 0.61% from 0.48% in the previous quarter, showing improved asset utilization[17] - The total risk-based capital ratio as of March 31, 2024, was 11.78%, slightly down from 11.88% in the previous quarter[16] Dividends and Stock Performance - The company declared a quarterly dividend of $0.25 per common share, payable on May 22, 2024[1] - The closing stock price as of March 31, 2024, was $17.83, down from $21.20 at the end of the previous quarter[16] - The annualized dividend yield increased to 5.61% from 4.72% in the previous quarter, reflecting a more attractive return for shareholders[16]
West Bancorporation(WTBA) - 2023 Q4 - Annual Report
2024-02-22 12:04
Part I [Business](index=6&type=section&id=ITEM%201.%20BUSINESS) West Bancorporation, Inc. operates West Bank, a business-focused community bank in Iowa and Minnesota, emphasizing strong customer relationships and credit quality under extensive regulation - The Company is a financial holding company primarily owning West Bank, a business-focused community bank established in 1893[17](index=17&type=chunk) - The Company operates across central and eastern Iowa and southern Minnesota, including major cities like Des Moines, Iowa City, and Rochester[19](index=19&type=chunk) Key Business Metrics (2022 vs 2023) | Metric | 2022 | 2023 | Change | | :--- | :--- | :--- | :--- | | Loans Outstanding | $2.7 billion | $2.9 billion | +6.7% | | Total Deposits | - | - | +3.2% | | Dividends per Share | - | $1.00 | - | - The company's strategy focuses on developing strong relationships with small- to medium-sized businesses, providing personalized attention and financial expertise[24](index=24&type=chunk) - As an FDIC-insured financial holding company, the business is extensively regulated by federal and state agencies, impacting capital levels, investments, and dividend payments[38](index=38&type=chunk)[39](index=39&type=chunk) [Risk Factors](index=17&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces inherent banking risks including credit concentration in commercial real estate, subjective allowance for credit losses, cybersecurity threats, interest rate sensitivity, intense competition, and extensive regulatory oversight impacting profitability and operations - The company's loan portfolio has a significant concentration in commercial real estate, posing risks from fluctuating property values and income dependency for repayment[94](index=94&type=chunk)[97](index=97&type=chunk) - The allowance for credit losses (ACL) is subjective, requiring significant management estimates, and an insufficient ACL could decrease net income and capital[99](index=99&type=chunk)[100](index=100&type=chunk) - The company is susceptible to cybersecurity threats, including fraud and data breaches, which could lead to financial losses, reputational damage, and litigation[107](index=107&type=chunk)[108](index=108&type=chunk) - Earnings are highly dependent on net interest income, sensitive to interest rate changes, where rising rates have compressed the net interest margin by increasing funding costs faster than asset yields[130](index=130&type=chunk)[131](index=131&type=chunk) - Operating in a highly regulated environment, changes in banking laws and regulations could adversely impact profitability, business practices, and compliance costs[136](index=136&type=chunk)[138](index=138&type=chunk) [Unresolved Staff Comments](index=30&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) The company reports no unresolved comments from the Securities and Exchange Commission (SEC) staff - There are no unresolved comments from the SEC staff[153](index=153&type=chunk) [Cybersecurity](index=30&type=section&id=ITEM%201C.%20CYBERSECURITY) The company maintains a comprehensive Information Security Program, overseen by the Board and its committees, to manage cybersecurity risks through safeguards, assessments, and training, with no material impact from identified threats to date - The company maintains an Information Security Program with administrative, technical, and physical safeguards to protect customer information[156](index=156&type=chunk) - Oversight is managed by the Information Security Committee, with ultimate responsibility from the Board of Directors and its Risk and Information Technology Committee for cybersecurity risk management[158](index=158&type=chunk)[159](index=159&type=chunk) - While cybersecurity threats are identified periodically, none have materially affected the company's business, operations, or financial condition to date[157](index=157&type=chunk) [Properties](index=33&type=section&id=ITEM%202.%20PROPERTIES) The company's corporate office is in West Des Moines, Iowa, with West Bank operating 11 locations across Iowa and Minnesota (six leased, five owned), and a new corporate headquarters expected in Q2 2024 - West Bank operates **11 locations** in total, comprising a main office and ten branches, with **six facilities leased and five owned**[160](index=160&type=chunk) - A new corporate headquarters is under construction in West Des Moines, Iowa, with an expected opening date of **April 15, 2024**[161](index=161&type=chunk) [Legal Proceedings](index=33&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) Neither the company nor West Bank is party to any material pending legal proceedings beyond ordinary litigation incidental to business - Neither the Company nor West Bank is party to any material pending legal proceedings, apart from ordinary litigation incidental to business[162](index=162&type=chunk) [Mine Safety Disclosures](index=33&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section is not applicable to the company - Not applicable[163](index=163&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=34&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%2C%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's common stock trades on Nasdaq under 'WTBA', with **149 holders** as of February 16, 2024, and paid **$1.00 per share** in dividends for 2023 and 2022, intending to continue quarterly payments subject to approvals - The company's common stock is traded on the Nasdaq Global Select Market under the symbol **"WTBA"**[166](index=166&type=chunk) - Total cash dividends paid to common stockholders were **$1.00 per share** in both 2023 and 2022[167](index=167&type=chunk) Five-Year Stock Performance Comparison (Indexed) | Index | 12/31/2018 | 12/31/2019 | 12/31/2020 | 12/31/2021 | 12/31/2022 | 12/31/2023 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | West Bancorporation, Inc. | 100.00 | 139.47 | 109.93 | 183.00 | 156.60 | 137.21 | | Nasdaq Composite Index | 100.00 | 136.69 | 198.10 | 242.03 | 163.28 | 236.17 | | S&P U.S. BMI Banks - Midwest Region Index | 100.00 | 130.10 | 111.85 | 147.78 | 127.53 | 130.20 | [Reserved](index=36&type=section&id=ITEM%206.%20RESERVED) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Net income for 2023 significantly decreased to **$24.1 million** from **$46.4 million** in 2022, primarily due to a **24.7% drop** in net interest income and the adoption of CECL, while total assets grew **5.9% to $3.8 billion** and credit quality remained strong Financial Highlights (2023 vs 2022) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Net Income | $24,137 thousand | $46,399 thousand | | Diluted EPS | $1.44 | $2.76 | | Return on Average Assets | 0.66% | 1.32% | | Return on Average Equity | 11.42% | 20.71% | | Net Interest Margin | 2.01% | 2.76% | | Total Assets | $3,825,758 thousand | $3,613,218 thousand | | Total Loans | $2,927,535 thousand | $2,742,836 thousand | | Total Deposits | $2,973,779 thousand | $2,880,408 thousand | - The **$22.7 million (24.7%) decrease** in 2023 net income was primarily due to a decline in net interest income, as rising short-term interest rates caused interest expense to increase more than interest income[195](index=195&type=chunk) - The company adopted the CECL standard on January 1, 2023, resulting in a **$700 thousand credit loss expense** in 2023, contrasting with a **$2.5 million credit loss benefit** in 2022 under the prior model[196](index=196&type=chunk)[250](index=250&type=chunk) [Critical Accounting Policies and Estimates](index=38&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) Management identifies fair value of financial instruments and the allowance for credit losses (ACL) as critical accounting policies, with ACL measured under the CECL model requiring significant judgment and estimates based on historical data, current conditions, and future forecasts - The company's most critical accounting policies are the fair value of financial instruments and the allowance for credit losses (ACL)[183](index=183&type=chunk) - The ACL is measured using a cash flow-based model under the CECL standard, requiring significant management judgment for economic forecasts and qualitative factors[186](index=186&type=chunk)[187](index=187&type=chunk) - The allowance for credit losses was **$28.3 million (0.97% of loans)** at year-end 2023, up from **$25.5 million (0.93% of loans)** at year-end 2022[188](index=188&type=chunk) [Results of Operations - 2023 Compared to 2022](index=41&type=section&id=RESULTS%20OF%20OPERATIONS%20-%202023%20COMPARED%20TO%202022) Net income for 2023 was **$24.1 million**, down from **$46.4 million** in 2022, primarily due to a **$22.7 million decrease** in net interest income and a **$0.7 million credit loss expense**, while noninterest expense increased by **7.9%** and the effective tax rate decreased to **18.9%** - Net interest income decreased by **$22.7 million (24.7%)** as interest expense on deposits and borrowings increased more than interest income on assets[195](index=195&type=chunk) - Noninterest expense increased by **$3.6 million (7.9%)**, driven by higher salaries and benefits (**+4.7%**), occupancy and equipment costs (**+12.1%**), and a **75.7% increase** in FDIC insurance expense[197](index=197&type=chunk)[205](index=205&type=chunk) - The effective income tax rate was **18.9%** in 2023, down from **21.9%** in 2022, with the 2022 rate including a one-time increase in state income tax expense[208](index=208&type=chunk) [Securities Portfolio](index=48&type=section&id=SECURITIES%20PORTFOLIO) The securities available for sale portfolio decreased by **$40.2 million** to **$623.9 million** at year-end 2023, with **61%** in government agency-guaranteed securities, and **$121.8 million** in gross unrealized losses attributed to interest rate changes, with no credit loss allowance deemed necessary - The balance of securities available for sale decreased by **$40.2 million** during 2023, primarily due to principal paydowns and a **$11.3 million** securities sale[226](index=226&type=chunk) - Approximately **61%** of the portfolio consists of government agency-guaranteed collateralized mortgage obligations and mortgage-backed securities, considered to have little to no credit risk[227](index=227&type=chunk) - The portfolio had gross unrealized losses of **$121.8 million** at year-end 2023, attributed to market interest rate changes rather than credit quality decline, with no allowance for credit losses recorded[230](index=230&type=chunk) [Loan Portfolio](index=49&type=section&id=LOAN%20PORTFOLIO) Total loans grew **6.7% to $2.93 billion** in 2023, driven by commercial real estate, construction, and residential mortgages, with a **77.4% concentration** in commercial real estate exceeding regulatory guidelines, yet credit quality remains strong with nonperforming loans at **0.01%** - Total loans outstanding increased by **6.7%** in 2023 compared to 2022[233](index=233&type=chunk) - Nonperforming loans remained stable at **0.01% of total loans** at year-end 2023 and 2022[201](index=201&type=chunk) - Loans classified as 'watch' significantly decreased from **$54.2 million** at year-end 2022 to **$0.14 million** at year-end 2023, primarily due to a large borrowing relationship upgrade[237](index=237&type=chunk) - The company's loan portfolio is concentrated in commercial real estate, exceeding regulatory guidelines, necessitating heightened risk management practices like stress testing and trend analysis[241](index=241&type=chunk)[243](index=243&type=chunk) [Summary of the Allowance for Credit Losses](index=52&type=section&id=SUMMARY%20OF%20THE%20ALLOWANCE%20FOR%20CREDIT%20LOSSES) Effective January 1, 2023, the company adopted CECL, increasing the ACL by **$2.5 million** upon adoption, with the ACL ending the year at **$28.3 million (0.97% of loans)**, and management believes it is adequate for expected lifetime losses - The company adopted the CECL standard on January 1, 2023, requiring a one-time adjustment that increased the ACL by **$2.458 million**[250](index=250&type=chunk)[260](index=260&type=chunk) Allowance for Credit Losses Ratios | Ratio | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | ACL to Total Loans | 0.97% | 0.93% | | Nonaccrual Loans to Total Loans | 0.01% | 0.01% | | ACL to Nonaccrual Loans | 9,575.00% | 7,910.87% | [Deposits](index=54&type=section&id=DEPOSITS) Total deposits increased **3.2% to $2.97 billion** at year-end 2023, facing significant competition and increasing funding costs, with brokered deposits totaling **$305.4 million** and estimated uninsured deposits at approximately **$1.44 billion** - Total deposits increased **3.2% to $2.97 billion** as of December 31, 2023[261](index=261&type=chunk) - The company utilizes brokered deposits, which increased to **$305.4 million** at year-end 2023 from **$272.7 million** at year-end 2022[262](index=262&type=chunk) - Total estimated uninsured deposits were **$1.44 billion** as of December 31, 2023[267](index=267&type=chunk) [Liquidity and Capital Resources](index=57&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company maintains sufficient liquidity with **$528 million** additional FHLB borrowing capacity and Federal Reserve access, while total stockholders' equity increased to **$225.0 million**, and both the company and West Bank met all well-capitalized regulatory requirements - As of December 31, 2023, West Bank had additional borrowing capacity of approximately **$528 million** from the FHLB and **$2.282 billion** from the Federal Reserve discount window[280](index=280&type=chunk) - Total stockholders' equity increased to **$225.0 million** at year-end 2023 from **$211.1 million** at year-end 2022, primarily due to net income less dividends and a decrease in accumulated other comprehensive loss[282](index=282&type=chunk) - The Company and West Bank met all capital adequacy requirements and were considered well-capitalized as of December 31, 2023[283](index=283&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=58&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risk is interest rate risk, managed by an Asset Liability Committee using an earnings simulation model, which estimates a **100 basis point rate increase** would decrease net interest income by **4.58%** over one year, while a **100 basis point decrease** would increase it by **3.16%** - The company's main market risk is interest rate risk, managed by an Asset Liability Committee using an earnings simulation approach to measure exposure[285](index=285&type=chunk)[286](index=286&type=chunk)[287](index=287&type=chunk) Estimated Change in Net Interest Income (One Year) | Change in Interest Rates | $ Change (thousands) | % Change | | :--- | :--- | :--- | | 300 bps rising | $(11,456) | (14.73)% | | 200 bps rising | $(7,187) | (9.24)% | | 100 bps rising | $(3,559) | (4.58)% | | 100 bps falling | $2,461 | 3.16% | | 200 bps falling | $4,786 | 6.16% | [Financial Statements and Supplementary Data](index=59&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section presents the company's consolidated financial statements and RSM US LLP's unqualified audit opinion on financial statements and internal controls, highlighting the Allowance for Credit Losses for Loans as a critical audit matter due to significant judgment and CECL adoption - The independent auditor, RSM US LLP, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of December 31, 2023[292](index=292&type=chunk)[305](index=305&type=chunk) - The auditor identified the Allowance for Credit Losses for Loans as a critical audit matter due to significant judgments and complex estimations required by management, particularly under the new CECL model[297](index=297&type=chunk)[300](index=300&type=chunk) [Consolidated Balance Sheets](index=63&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2023, total assets were **$3.83 billion**, up from **$3.61 billion** in 2022, driven by increased net loans, while total liabilities rose to **$3.60 billion**, and total stockholders' equity increased to **$225.0 million** Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $65,357 | $26,539 | | Securities available for sale | $623,919 | $664,115 | | Loans, net | $2,899,193 | $2,717,363 | | **Total Assets** | **$3,825,758** | **$3,613,218** | | **Liabilities & Equity** | | | | Total deposits | $2,973,779 | $2,880,408 | | Borrowings (FHLB, etc.) | $465,270 | $355,000 | | Subordinated notes, net | $79,631 | $79,369 | | **Total Liabilities** | **$3,600,715** | **$3,402,106** | | **Total Stockholders' Equity** | **$225,043** | **$211,112** | [Consolidated Statements of Income](index=64&type=section&id=Consolidated%20Statements%20of%20Income) For 2023, net income sharply declined to **$24.1 million** from **$46.4 million** in 2022, primarily due to net interest income falling to **$69.0 million** as interest expense more than doubled, alongside a **$0.7 million credit loss expense** and increased noninterest expenses Consolidated Income Statement Highlights (in thousands) | Account | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Total Interest Income | $160,305 | $123,349 | $107,280 | | Total Interest Expense | $91,274 | $31,609 | $12,221 | | **Net Interest Income** | **$69,031** | **$91,740** | **$95,059** | | Credit Loss Expense (Benefit) | $700 | $(2,500) | $(1,500) | | Total Noninterest Income | $10,066 | $10,208 | $9,729 | | Total Noninterest Expense | $48,611 | $45,051 | $43,380 | | **Net Income** | **$24,137** | **$46,399** | **$49,607** | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=109&type=section&id=ITEM%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) The company reports no changes in or disagreements with its accountants regarding accounting principles, financial disclosure, or auditing scope within the last two years - There have been no changes in or disagreements with the Company's accountants in the two years prior to the most recent financial statements[501](index=501&type=chunk) [Controls and Procedures](index=109&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) As of December 31, 2023, the CEO and CFO concluded disclosure controls and procedures were effective, management asserted effective internal control over financial reporting, and no material changes occurred during Q4 2023 - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of the end of the period[502](index=502&type=chunk) - Management asserts that the Company maintained effective internal control over financial reporting as of December 31, 2023[506](index=506&type=chunk) - No material changes in internal control over financial reporting occurred during the fourth quarter of 2023[508](index=508&type=chunk) [Other Information](index=109&type=section&id=ITEM%209B.%20OTHER%20INFORMATION) During Q4 2023, no directors or executive officers adopted or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements - During the fourth quarter of 2023, no directors or executive officers adopted or terminated any Rule 10b5-1 trading arrangement[509](index=509&type=chunk) [Disclosure Regarding Foreign Jurisdictions That Prevent Inspection](index=110&type=section&id=ITEM%209C.%20DISCLOSURE%20REGARDING%20FOREIGN%20JURISDICTIONS%20THAT%20PREVENT%20INSPECTION) This section is not applicable to the company - Not applicable[510](index=510&type=chunk) Part III [Directors, Executive Officers, and Corporate Governance](index=111&type=section&id=ITEM%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%2C%20AND%20CORPORATE%20GOVERNANCE) Information on directors, executive officers, code of ethics, and the audit committee is incorporated by reference from the definitive Proxy Statement, with the company maintaining a Code of Conduct applicable to all personnel - Information required for this item is incorporated by reference from the Company's definitive Proxy Statement on Form DEF 14A[512](index=512&type=chunk) - The Company has a Code of Conduct applicable to all directors, officers, and employees, available on its website[513](index=513&type=chunk) [Executive Compensation](index=111&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) Information regarding executive and director compensation is incorporated by reference from the company's definitive Proxy Statement on Form DEF 14A - Information regarding executive compensation is incorporated by reference from the Company's definitive Proxy Statement[516](index=516&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=111&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) This section details the company's equity compensation plans, with **479,480 shares** to be issued upon exercise of outstanding rights and **266,963 shares** available for future issuance as of December 31, 2023, with further information incorporated by reference from the Proxy Statement Equity Compensation Plan Information (as of Dec 31, 2023) | Plan Category | Number of shares to be issued upon exercise (a) | Weighted-average exercise price (b) | Number of shares remaining available for future issuance (c) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by stockholders | 479,480 | — | 266,963 | | Total | 479,480 | — | 266,963 | - Additional information regarding security ownership of beneficial owners and management is incorporated by reference from the Company's definitive Proxy Statement[520](index=520&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=112&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) Information concerning related party transactions and director independence is incorporated by reference from the company's definitive Proxy Statement on Form DEF 14A - Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the Company's definitive Proxy Statement[521](index=521&type=chunk) [Principal Accountant Fees and Services](index=113&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) Information concerning principal accountant fees and services is incorporated by reference from the company's definitive Proxy Statement on Form DEF 14A - Information regarding principal accountant fees and services is incorporated by reference from the Company's definitive Proxy Statement[523](index=523&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=113&type=section&id=ITEM%2015.%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists financial statements, schedules, and exhibits filed as part of the Form 10-K, with consolidated financial statements in Item 8 and all schedules omitted as not applicable or included elsewhere, alongside a comprehensive exhibit list - The consolidated financial statements from Item 8 are incorporated by reference[525](index=525&type=chunk) - All financial statement schedules are omitted as not applicable or included in the financial statements or notes[526](index=526&type=chunk) [Form 10-K Summary](index=118&type=section&id=ITEM%2016.%20FORM%2010-K%20SUMMARY) The company has not provided a summary for its Form 10-K - None[533](index=533&type=chunk)
West Bancorporation(WTBA) - 2023 Q4 - Earnings Call Transcript
2024-01-25 22:06
West Bancorporation, Inc. (NASDAQ:WTBA) Q4 2023 Earnings Conference Call January 25, 2024 3:00 PM ET Company Participants Jane Funk - EVP, Treasurer & CFO David Nelson - CEO Harlee Olafson - Chief Risk Officer Brad Winterbottom - President Bradley Peters - Minnesota Group President Conference Call Participants Andrew Liesch - Piper Sandler Operator Good afternoon, and welcome to West Bancorporation Inc.'s Fourth Quarter 2023 Earnings Call. Please note that this call is being recorded. All participants are n ...
West Bancorporation(WTBA) - 2023 Q3 - Earnings Call Transcript
2023-10-26 20:20
West Bancorporation, Inc. (NASDAQ:WTBA) Q3 2023 Earnings Conference Call October 26, 2023 3:00 PM ET Company Participants David Nelson - Chief Executive Officer Jane Funk - Executive VP, Treasurer and CFO Harlee Olafson - Chief Risk Officer Brad Winterbottom - President Brad Peters - Minnesota Group President Conference Call Participants Andrew Liesch - Piper Sandler Operator Hello. My name is Chris and I'll be your conference operator today. At this time, I'd like to welcome everyone to the West Bancorpora ...
West Bancorporation(WTBA) - 2023 Q3 - Quarterly Report
2023-10-26 11:02
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 0-49677 WEST BANCORPORATION, INC. (Exact Name of Registrant as Specified in its Charter) (State of Incorp ...
West Bancorporation(WTBA) - 2023 Q2 - Earnings Call Presentation
2023-08-10 09:10
West Bancorporation NASDAQ: WTBA Q2 2023 | Earnings Highlights Disclaimers Certain statements in this presentation, other than purely historical information, including estimates, projections, statements relating to the Company's business plans, ob and expected operating results, and the assumptions upon which those statements are based, are "forward-hoking statements" within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Secti ...
West Bancorporation(WTBA) - 2023 Q2 - Earnings Call Transcript
2023-07-29 15:59
West Bancorporation, Inc. (NASDAQ:WTBA) Q2 2023 Earnings Call July 27, 2023 3:00 PM ET Company Participants Jane M. Funk - Chief Financial Officer David D. Nelson - Chief Executive Officer Harlee N. Olafson - Chief Risk Officer Brad L. Winterbottom - President Brad P. Peters - Minnesota Group President Conference Call Participants Brendan Nosal - Piper Sandler David Welch - River Oaks Capital Hello, everyone, and welcome to the West Bancorporation, Inc. Second Quarter Earnings Call. My name is Emily, and I' ...