WEST BANCORPORATION : ANNOUNCES FOURTH QUARTER AND YEAR END 2022 FINANCIAL RESULTS, DECLARES QUARTERLY DIVIDEND - Form 8-K
January 26, 2023 at 07:13 am EST
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WEST BANCORPORATION, INC. ANNOUNCES FOURTH QUARTER AND YEAR END 2022 FINANCIAL RESULTS, DECLARES QUARTERLY DIVIDEND
West Des Moines, IA - West Bancorporation, Inc. (Nasdaq: WTBA; the "Company"), parent company of West Bank, today reported 2022 net income of $46.4 million, or $2.76 per diluted common share, compared to 2021 net income of $49.6 million, or $2.95 per diluted common share. Net income for the fourth quarter 2022 was $8.9 million, or $0.53 per diluted common share, compared to fourth quarter 2021 net income of $11.9 million, or $0.71 per diluted common share. On January 25, 2023, the Company's Board of Directors declared a regular quarterly dividend of $0.25 per common share. The dividend is payable on February 22, 2023, to stockholders of record on February 8, 2023.
David Nelson, President and Chief Executive Officer of the Company, commented, "Our company had another strong year, the second best year in our company's history. Our credit quality continues to be pristine and we remain diligent in monitoring and managing our credit risk as we anticipate increasing economic challenges resulting from the Federal Reserve's aggressive interest rate hikes in 2022. Loan growth in 2022 exceeded eleven percent and for the sixth consecutive quarter end, we had no loans greater than 30 days past due."
David Nelson added, "Rising interest rates in 2022 have increased the average yield of our loan portfolio. However, changes in liquidity and competitive deposit pricing, as a result of volatility and uncertainty in the interest rate environment, have increased our cost of funds and resulted in a decline in our net interest income and net interest margin. We expect to continue to experience a lower than normal net interest margin while the Federal Reserve continues raising short-term rates. Our capital position is strong and we remain focused on delivering high quality services and products through our very successful relationship based business model."
Fourth Quarter and Year Ended 2022 Financial Highlights
Quarter Ended December 31, 2022
Year Ended December 31, 2022
Net Income (in thousands)
$8,946
$46,399
Return on Average Equity
17.75
%
20.71
%
Return on Average Assets
1.01
%
1.32
%
Efficiency ratio (a non-GAAP measure)
50.42
%
43.70
%
Nonperforming assets to total assets
0.01
%
0.01
%
Fourth Quarter 2022 Compared to Third Quarter 2022 Overview
•Loans increased $128.7 million in the fourth quarter of 2022, or 19.7 percent annualized.
•No provision for loan losses was recorded in either the fourth quarter of 2022 or the third quarter of 2022.
•The allowance for loan losses to total loans was 0.93 percent at December 31, 2022, compared to 0.97 percent at September 30, 2022. There were no loans greater than 30 days past due at December 31, 2022, which was the sixth consecutive quarter in which no loans were greater than 30 days past due. Nonaccrual loans at December 31, 2022, consisted of one loan with a balance of $322 thousand.
•Deposits increased $57.6 million in the fourth quarter of 2022. Included in deposits were brokered deposits totaling $272.7 million at December 31, 2022, compared to $258.1 million at September 30, 2022.
•The efficiency ratio (a non-GAAP measure) was 50.42 percent for the fourth quarter of 2022, compared to 43.16 percent for the third quarter of 2022. The increase in the efficiency ratio is primarily the result of the decline in tax equivalent net interest income.
•Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 2.49 percent for the fourth quarter of 2022, compared to 2.78 percent for the third quarter of 2022. Net interest income for the fourth quarter of 2022 was $20.7 million, compared to $23.0 million for the third quarter of 2022. The rising cost of deposits and borrowed funds and the change in mix of liabilities has increased interest expense faster than the increase in interest income from loan repricing and loan growth.
•The tangible common equity ratio was 5.84 percent at December 31, 2022, an increase of 19 basis points compared to 5.65 percent at September 30, 2022 due to a modest increase in the market value of the securities portfolio, which decreased the accumulated other comprehensive loss.
Fourth Quarter 2022 Compared to Fourth Quarter 2021 Overview
•Loans increased $286.6 million at December 31, 2022, or 11.7 percent, compared to December 31, 2021.
•Deposits decreased $135.6 million at December 31, 2022, compared to December 31, 2021. Included in deposits were brokered deposits totaling $272.7 million at December 31, 2022, compared to $176.0 million at December 31, 2021. The decline in deposits was primarily attributable to customers using their own liquidity to fund business transactions, instead of using debt, and customers seeking higher yielding investment options for excess deposits accumulated over the past couple of years.
•Borrowed funds increased to $485.9 million at December 31, 2022, compared to $199.9 million at December 31, 2021. The increase included $58.9 million in subordinated notes that were issued in June 2022, $30.0 million in FHLB Advances associated with a long-term interest rate swap and $197.1 million in federal funds purchased and other short-term borrowings.
•The efficiency ratio (a non-GAAP measure) was 50.42 percent for the fourth quarter of 2022, compared to 43.32 percent for the fourth quarter of 2021. Tax-equivalent net interest income decreased in the fourth quarter of 2022 compared to the fourth quarter of 2021 due to the increased cost of deposits and borrowed funds. Additionally, salaries and benefits were higher in the fourth quarter of 2022 compared to the fourth quarter of 2021, due primarily to annual compensation adjustments.
•Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 2.49 percent for the fourth quarter of 2022, compared to 3.00 percent for the fourth quarter of 2021. Net interest income for the fourth quarter of 2022 was $20.7 million, compared to $24.6 million for the fourth quarter of 2021. Net interest income in the fourth quarter of 2021 included $912 thousand of PPP loan interest income, compared to $5 thousand in the fourth quarter of 2022. In 2022, the rising cost of deposits and borrowed funds and the change in mix of liabilities has increased interest expense faster than the increase in interest income from loan repricing and loan growth.
Year Ended 2022 Compared to Year Ended 2021 Overview
•The provision for loan losses recorded in 2022 was negative $2.5 million, compared to a negative provision of $1.5 million in 2021. The negative provision in 2022 was primarily due to the reversal of a specific reserve on an impaired loan and the reduction of certain qualitative factors resulting from the sustained performance of loans after the expiration of COVID-19 modifications and continued improvement in classified loans. The negative provision in 2021 was primarily due to the reduction of certain qualitative factors resulting from improvements in economic conditions and lack of loan losses during the COVID-19 pandemic.
•Net interest income declined $3.3 million, or 3.5 percent, in 2022 compared to 2021. Net interest margin decreased to 2.76 percent in 2022, compared to 3.05 percent in 2021. The decline in both net interest income and net interest margin was primarily due to the rising cost of deposits and borrowed funds and the change in mix of liabilities, which has increased interest expense faster than the increase in interest income from loan repricing and loan growth.
•Noninterest income increased $479 thousand, or 4.9 percent, in 2022 compared to 2021. This increase was primarily due to the increase in loan swap fees.
•Noninterest expense increased $1.7 million, or 3.9 percent, in 2022 compared to 2021. The increase was primarily due to an increase of $2.6 million, or 11.2 percent, in salaries and benefits resulting from an increase in expenses related to the issuance of restricted stock units, an increase in full time equivalent employees and annual compensation adjustments. This was partially offset by a decrease of $822 thousand in FDIC insurance expense primarily due to reductions in the assessment rate resulting from capital injections into the Bank.
The Company plans to file its report on Form 10-K with the Securities and Exchange Commission on or before February 23, 2023. Please refer to that document for a more in-depth discussion of the Company's financial results. The Form 10-K will be 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, January 26, 2023. The telephone number for the conference call is 844-200-6205. The access code for the conference call is 214929. A recording of the call will be available until February 9, 2023, by dialing 866-813-9403. The replay access code is 559343.
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 recent rate increases by the Federal Reserve; fluctuations in the values of the securities held in our investment portfolio, including as a result of rising interest rates, which has resulted in unrealized losses in our portfolio; competitive pressures, including from non-bank competitors such as "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 loan losses dictated by new market conditions, accounting standards (including as a result of the implementation of the current expected credit loss (CECL) accounting standard) or regulatory requirements; changes in local, national and international economic conditions, including rising rates of inflation; 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, including the Russian invasion of Ukraine, widespread disease or pandemics, such as the COVID-19 pandemic, or other adverse external events; risks related to climate change and the negative impact it may have on our customers and their businesses; developments and uncertainty related to the future use and availability of some reference rates, such as the expected discontinuation of the London Interbank Offered Rate and the development of other alternative reference rates; changes to U.S. tax laws, regulations and guidance; talent and labor shortages; the new 1% excise tax on stock buybacks by publicly traded companies; 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)
As of
CONDENSED BALANCE SHEETS
December 31, 2022
September 30, 2022
June 30, 2022
March 31, 2022
December 31, 2021
Assets
Cash and due from banks
$
24,896
$
58,342
$
26,174
$
21,896
$
17,555
Interest-bearing deposits
1,643
1,049
766
122,359
175,270
Securities available for sale, at fair value
664,115
671,752
731,970
797,912
758,822
Federal Home Loan Bank stock, at cost
19,336
18,350
15,532
10,269
9,965
Loans
2,742,836
2,614,145
2,573,129
2,485,366
2,456,196
Allowance for loan losses
(25,473)
(25,418)
(25,434)
(27,623)
(28,364)
Loans, net
2,717,363
2,588,727
2,547,695
2,457,743
2,427,832
Premises and equipment, net
53,124
44,592
41,807
40,898
34,568
Bank-owned life insurance
44,573
44,318
44,072
43,836
43,609
Other assets
88,168
90,387
66,775
52,156
32,580
Total assets
$
3,613,218
$
3,517,517
$
3,474,791
$
3,547,069
$
3,500,201
Liabilities and Stockholders' Equity
Deposits
$
2,880,408
$
2,822,847
$
2,842,451
$
3,091,252
$
3,016,005
Federal funds purchased and other short-term borrowings
200,000
204,500
133,000
-
2,880
Other borrowings
285,855
255,789
255,751
196,954
196,986
Other liabilities
35,843
35,617
27,400
22,383
24,002
Stockholders' equity
211,112
198,764
216,189
236,480
260,328
Total liabilities and stockholders' equity
$
3,613,218
$
3,517,517
$
3,474,791
$
3,547,069
$
3,500,201
For the quarter ended
AVERAGE BALANCES
December 31, 2022
September 30, 2022
June 30, 2022
March 31, 2022
December 31, 2021
Assets
$
3,511,717
$
3,475,894
$
3,503,686
$
3,544,564
$
3,421,020
Loans
2,649,671
2,579,862
2,537,152
2,449,521
2,379,872
Deposits
2,901,928
2,864,648
3,002,535
3,067,019
2,964,585
Stockholders' equity
199,947
219,065
222,731
255,130
255,224
WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
As of
ANALYSIS OF LOAN PORTFOLIO
December 31, 2022
September 30, 2022
June 30, 2022
March 31, 2022
December 31, 2021
Loan mix:
Commercial
$
519,196
$
526,336
$
475,704
$
466,874
$
492,815
Real estate:
Construction, land and land development
363,015
341,549
390,137
388,424
359,258
1-4 family residential first mortgages
75,211
69,991
69,829
65,978
66,216
Home equity
10,322
10,271
8,564
9,213
8,422
Commercial
1,771,940
1,661,907
1,627,150
1,555,001
1,530,218
Consumer and other
7,291
7,884
5,912
4,068
3,797
2,746,975
2,617,938
2,577,296
2,489,558
2,460,726
Net unamortized fees and costs
(4,139)
(3,793)
(4,167)
(4,192)
(4,530)
Total loans
$
2,742,836
$
2,614,145
$
2,573,129
$
2,485,366
$
2,456,196
Less allowance for loan losses
(25,473)
(25,418)
(25,434)
(27,623)
(28,364)
Net loans
$
2,717,363
$
2,588,727
$
2,547,695
$
2,457,743
$
2,427,832
ANALYSIS OF DEPOSITS
Deposit mix:
Noninterest-bearing demand
$
693,563
$
712,722
$
690,335
$
710,697
$
720,136
Interest-bearing demand
536,226
469,257
472,919
554,235
548,242
Savings and money market
1,237,954
1,252,694
1,360,020
1,632,690
1,550,636
Time
412,665
388,174
319,177
193,630
196,991
Total deposits
$
2,880,408
$
2,822,847
$
2,842,451
$
3,091,252
$
3,016,005
ANALYSIS OF BORROWINGS
Borrowings mix:
Federal funds purchased and other short-term borrowings
$
200,000
$
204,500
$
133,000
$
-
$
2,880
Subordinated notes, net
79,369
79,303
79,265
20,468
20,465
Federal Home Loan Bank advances
155,000
125,000
125,000
125,000
125,000
Long-term debt
51,486
51,486
51,486
51,486
51,521
Total borrowings
$
485,855
$
460,289
$
388,751
$
196,954
$
199,866
STOCKHOLDERS' EQUITY
Preferred stock
$
-
$
-
$
-
$
-
$
-
Common stock
3,000
3,000
3,000
3,000
3,000
Additional paid-in capital
32,021
31,152
30,283
29,421
30,183
Retained earnings
267,562
262,776
255,334
246,827
237,782
Accumulated other comprehensive loss
(91,471)
(98,164)
(72,428)
(42,768)
(10,637)
Total Stockholders' Equity
$
211,112
$
198,764
$
216,189
$
236,480
$
260,328
WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
For the Quarter Ended
CONSOLIDATED STATEMENTS OF INCOME
December 31, 2022
September 30, 2022
June 30, 2022
March 31, 2022
December 31, 2021
Interest income:
Loans, including fees
$
30,859
$
28,102
$
24,848
$
23,286
$
24,179
Securities:
Taxable
3,398
3,147
3,090
2,889
2,590
Tax-exempt
887
890
892
858
829
Interest-bearing deposits
24
30
67
82
66
Total interest income
35,168
32,169
28,897
27,115
27,664
Interest expense:
Deposits
11,043
6,289
3,146
2,151
2,055
Federal funds purchased and other short-term borrowings
952
655
157
-
1
Subordinated notes
1,119
1,106
394
248
254
Federal Home Loan Bank advances
755
649
635
630
656
Long-term debt
630
466
326
258
96
Total interest expense
14,499
9,165
4,658
3,287
3,062
Net interest income
20,669
23,004
24,239
23,828
24,602
Provision for loan losses
-
-
(1,750)
(750)
-
Net interest income after provision for loan losses
20,669
23,004
25,989
24,578
24,602
Noninterest income:
Service charges on deposit accounts
476
553
585
580
603
Debit card usage fees
492
498
507
472
505
Trust services
678
780
622
629
633
Increase in cash value of bank-owned life insurance
255
246
236
227
233
Loan swap fees
-
835
-
-
24
Other income
364
364
328
481
350
Total noninterest income
2,265
3,276
2,278
2,389
2,348
Noninterest expense:
Salaries and employee benefits
6,552
6,578
6,410
6,298
5,928
Occupancy
1,270
1,315
1,242
1,086
1,532
Data processing
673
644
656
624
630
FDIC insurance
243
127
289
337
460
Professional fees
205
250
202
217
183
Director fees
215
209
222
168
184
Other expenses
2,507
2,335
2,245
1,932
2,954
Total noninterest expense
11,665
11,458
11,266
10,662
11,871
Income before income taxes
11,269
14,822
17,001
16,305
15,079
Income taxes
2,323
3,220
4,334
3,121
3,169
Net income
$
8,946
$
11,602
$
12,667
$
13,184
$
11,910
Basic earnings per common share
$
0.54
$
0.70
$
0.76
$
0.80
$
0.72
Diluted earnings per common share
$
0.53
$
0.69
$
0.75
$
0.78
$
0.71
WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
For the Year Ended
CONSOLIDATED STATEMENTS OF INCOME
December 31, 2022
December 31, 2021
Interest income:
Loans, including fees
$
107,095
$
95,585
Securities:
Taxable
12,524
8,542
Tax-exempt
3,527
2,861
Interest-bearing deposits
203
292
Total interest income
123,349
107,280
Interest expense:
Deposits
22,629
7,948
Federal funds purchased and other short-term borrowings
1,764
5
Subordinated notes
2,867
1,008
Federal Home Loan Bank advances
2,669
2,944
Long-term debt
1,680
316
Total interest expense
31,609
12,221
Net interest income
91,740
95,059
Provision for loan losses
(2,500)
(1,500)
Net interest income after provision for loan losses
94,240
96,559
Noninterest income:
Service charges on deposit accounts
2,194
2,352
Debit card usage fees
1,969
1,948
Trust services
2,709
2,671
Increase in cash value of bank-owned life insurance
964
923
Loan swap fees
835
66
Realized securities gains, net
-
51
Other income
1,537
1,718
Total noninterest income
10,208
9,729
Noninterest expense:
Salaries and employee benefits
25,838
23,226
Occupancy
4,913
5,162
Data processing
2,597
2,465
FDIC insurance
996
1,818
Professional fees
874
946
Director fees
814
765
Other expenses
9,019
8,998
Total noninterest expense
45,051
43,380
Income before income taxes
59,397
62,908
Income taxes
12,998
13,301
Net income
$
46,399
$
49,607
Basic earnings per common share
$
2.79
$
3.00
Diluted earnings per common share
$
2.76
$
2.95
WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
As of and for the Quarter Ended
For the Year Ended
COMMON SHARE DATA
December 31, 2022
September 30, 2022
June 30, 2022
March 31, 2022
December 31, 2021
December 31, 2022
December 31, 2021
Earnings per common share (basic)
$
0.54
$
0.70
$
0.76
$
0.80
$
0.72
$
2.79
$
3.00
Earnings per common share (diluted)
0.53
0.69
0.75
0.78
0.71
2.76
2.95
Dividends per common share
0.25
0.25
0.25
0.25
0.24
1.00
0.94
Book value per common share(1)
12.69
11.94
12.99
14.22
15.73
Closing stock price
25.55
20.81
24.34
27.21
31.07
Market price/book value(2)
201.34
%
174.29
%
187.37
%
191.35
%
197.52
%
Price earnings ratio(3)
11.93
7.49
7.98
8.39
10.88
Annualized dividend yield(4)
3.91
%
4.81
%
4.11
%
3.68
%
3.89
%
REGULATORY CAPITAL RATIOS
Consolidated:
Total risk-based capital ratio
12.08
%
12.34
%
12.53
%
10.72
%
10.89
%
Tier 1 risk-based capital ratio
9.55
9.72
9.81
9.81
9.92
Tier 1 leverage capital ratio
8.81
8.85
8.59
8.39
8.49
Common equity tier 1 ratio
8.96
9.11
9.17
9.16
9.24
West Bank:
Total risk-based capital ratio
13.08
%
13.38
%
13.62
%
11.88
%
12.10
%
Tier 1 risk-based capital ratio
12.33
12.60
12.81
10.98
11.13
Tier 1 leverage capital ratio
11.37
11.47
11.22
9.39
9.53
Common equity tier 1 ratio
12.33
12.60
12.81
10.98
11.13
KEY PERFORMANCE RATIOS AND OTHER METRICS
Return on average assets(5)
1.01
%
1.32
%
1.45
%
1.51
%
1.38
%
1.32
%
1.52
%
Return on average equity(6)
17.75
21.01
22.81
20.96
18.51
20.71
20.33
Net interest margin(7)(13)
2.49
2.78
2.93
2.85
3.00
2.76
3.05
Yield on interest-earning assets(8)
4.21
3.87
3.49
3.24
3.36
3.70
3.44
Cost of interest-bearing liabilities
2.24
1.45
0.73
0.52
0.50
1.24
0.53
Efficiency ratio(9)(13)
50.42
43.16
41.96
40.14
43.32
43.70
40.91
Non-performing assets to total assets(10)
0.01
0.01
0.01
0.25
0.26
ALLL ratio(11)
0.93
0.97
0.99
1.11
1.15
Loans/total assets
75.91
74.32
74.05
70.07
70.17
Loans/total deposits
95.22
92.61
90.53
80.40
81.44
Tangible common equity ratio(12)
5.84
5.65
6.22
6.67
7.44
(1) Includes accumulated other comprehensive income (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 loan losses 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)
As of and for the Quarter Ended
For the Year Ended
December 31, 2022
September 30, 2022
June 30, 2022
March 31, 2022
December 31, 2021
December 31, 2022
December 31, 2021
Reconciliation of net interest income and net interest margin on a FTE basis to GAAP:
Net interest income (GAAP)
$
20,669
$
23,004
$
24,239
$
23,828
$
24,602
$
91,740
$
95,059
Tax-equivalent adjustment (1)
197
270
326
329
397
1,122
1,202
Net interest income on a FTE basis (non-GAAP)
20,866
23,274
24,565
24,157
24,999
92,862
96,261
Average interest-earning assets
3,328,941
3,322,522
3,362,313
3,432,114
3,309,625
3,361,091
3,152,138
Net interest margin on a FTE basis (non-GAAP)
2.49
%
2.78
%
2.93
%
2.85
%
3.00
%
2.76
%
3.05
%
Reconciliation of efficiency ratio on an adjusted and FTE basis to GAAP:
Net interest income on a FTE basis (non-GAAP)
$
20,866
$
23,274
$
24,565
$
24,157
$
24,999
$
92,862
$
96,261
Noninterest income
2,265
3,276
2,278
2,389
2,348
10,208
9,729
Adjustment for realized securities gains, net
-
-
-
-
-
-
(51)
Adjustment for losses on disposal of premises and equipment, net
2
-
9
18
55
29
84
Adjusted income
23,133
26,550
26,852
26,564
27,402
103,099
106,023
Noninterest expense
11,665
11,458
11,266
10,662
11,871
45,051
43,380
Efficiency ratio on an adjusted and FTE basis (non-GAAP) (2)
50.42
%
43.16
%
41.96
%
40.14
%
43.32
%
43.70
%
40.91
%
(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.
West Bancorporation Inc. published this content on 26 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 January 2023 12:12:05 UTC.
West Bancorporation, Inc., is a financial holding company. The Company owns West Bank (the Bank), which is a business-focused community bank. The Bank provides full-service community banking and trust services to customers. The Bank offers range of credit to its customers, including commercial, real estate, and consumer loans. It also offers trust services, including the administration of estates, conservatorships, personal trusts, and agency accounts. The Company operates in the markets, including central Iowa, which is generally the greater Des Moines metropolitan area; eastern Iowa, which includes the area surrounding Iowa City and Coralville, and southern Minnesota, which includes the cities of Rochester, Owatonna, Mankato, and St. Cloud. The Bank offers a full range of deposit services, including checking, savings and money market accounts and time certificates of deposit. It also offers online banking, mobile banking, and treasury management services.