West Bancorporation(US:WTBA)2021-05-01 20:37Financial Data and Key Metrics Changes - The company reported its best quarter in its 128-year history with a return on equity of 20% and an efficiency ratio under 40% [6][7] - The quarterly dividend was increased from $0.22 to $0.24 per share, with a payment date set for May 26 [7] - The provision for the first quarter was $500,000, down from $1 million in the same quarter last year and significantly lower than the $4 million in the fourth quarter of 2020 [30][31] - First-quarter net interest income was positively impacted by $2.842 million from PPP loans, contributing approximately $2.1 million after tax [29] Business Line Data and Key Metrics Changes - The company experienced a loan growth of approximately 2.5% in Eastern Iowa, excluding PPP loans [23] - The Texas ratio increased due to a specific customer issue, but overall credit health remains strong [14][19] - The watch list for loans increased to 5.1% of total loans, primarily due to one hotel group and one separate hotel being placed on the list [16] Market Data and Key Metrics Changes - The hotel sector has shown improvement, with average occupancy increasing from 30% in January to 42% in March [20] - The Minnesota expansion has seen loan outstandings grow to nearly $300 million, contributing to a total of over $0.5 billion in loan outstandings in Minnesota [26] Company Strategy and Development Direction - The company is focused on organic growth, having nearly tripled its size from $1.2 billion to $3.2 billion from 2011 to 2020 without acquisitions [44] - The management is open to M&A opportunities but emphasizes maintaining the purity of their business model [45] Management's Comments on Operating Environment and Future Outlook - The management expects loan growth to continue but acknowledges potential headwinds from aggressive interest rates and rising input costs for construction [41] - The outlook for the second quarter is expected to be strong but not as high as the record first quarter [34] Other Important Information - The company received three national accolades for top performance, ranking 21st in the Raymond James Community Cup and 10th in S&P Global's list of top community banks [10][11] Q&A Session Summary Question: Remaining unrealized fees from PPP loans - The company has about $770,000 of unearned fees from the first round and $2.88 million from the second round of PPP loans [38] Question: Cost of FHLB advances and repayment opportunities - The cost of Federal Home Loan Bank advances was approximately 2.6%, and the company plans to pay off $25 million in April and another $25 million in May [39] Question: Loan growth expectations for the rest of the year - The company is optimistic about loan growth but does not provide specific guidance, noting that construction advances of over $150 million should fund through the year [41] Question: M&A interest - The management is open to M&A but emphasizes their successful organic growth strategy [44][45] Question: Metrics for new market opportunities - The company focuses on hiring top local bankers with existing relationships to ensure successful market entry and profitability [51]