GlobeNewswire Inc | Jul 23, 2020 08:30AM EDT

July 23, 2020

WEST DES MOINES, Iowa, July 23, 2020 (GLOBE NEWSWIRE) -- West Bancorporation, Inc. (Nasdaq: WTBA; the Company), parent company of West Bank, today reported that second quarter 2020 net income was $8.0 million, or $0.48 per diluted common share, compared to second quarter 2019 net income of $6.7 million, or $0.41 per diluted common share. For the first six months of 2020, net income was $16.1 million, or $0.97 per diluted common share, compared to $13.6 million, or $0.83 per diluted common share, for the first six months of 2019. On July 22, 2020, the Companys Board of Directors declared a regular quarterly dividend of $0.21 per common share, the same amount as in the previous five quarters. The dividend is payable on August 19, 2020, to stockholders of record on August 5, 2020.

The COVID-19 pandemic has created unprecedented challenges for our customers, employees and communities, commented Dave Nelson, President and Chief Executive Officer of the Company. The long-term economic impact of the pandemic is still uncertain and highly dependent on variables that are extremely difficult to predict. Throughout the pandemic, West Bank has continued to deliver all of our banking services and respond to our customers needs in a timely and efficient manner, as demonstrated by the implementation of the Paycheck Protection Program and prudent loan modifications. We remain committed to supporting the recovery of the communities we serve.

Dave Nelson also commented, We are pleased with our continued strong financial performance in the first six months of 2020. Although the inherent stress on credit quality and reduced demand for new lending caused by the COVID-19 pandemic may impact our growth and earnings in future periods, we believe our history of strong capital, earnings and credit quality has put us in a position to support our customers, employees and communities during this period of unprecedented challenges.

For the past several years, the Company has increased the amount of the quarterly dividend during the second quarter of each year. Although the Company had strong earnings in the first and second quarters of 2020, due to the uncertainty facing the economy, the Board of Directors of the Company decided to maintain the dividend at the current level of $0.21 per share. The Board will continue to evaluate the dividend on a quarterly basis based on the effects the COVID-19 pandemic has on the Company and its customers.

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 its financial results. The Form 10-Q is available on the Investor Relations section of West Banks 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, July 24, 2020. The telephone number for the conference call is 888-339-0814. A recording of the call will be available until August 7, 2020, by dialing 877-344-7529. The replay passcode is 10137423.

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 eight 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 Companys 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 Coronavirus Disease 2019 (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 Companys 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 Companys 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; 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 June 30, 2020 June 30, 2019Assets Cash and due from banks $ 54,175 $ 45,286 Federal funds sold 62,494 47,278 Investment securities available for sale, at 342,017 398,534 fair valueFederal Home Loan Bank stock, at cost 12,307 10,826 Loans 2,199,688 1,792,718 Allowance for loan losses (21,363 ) (16,737 )Loans, net 2,178,325 1,775,981 Premises and equipment, net 28,655 30,447 Bank-owned life insurance 35,187 34,563 Other assets 27,163 19,961 Total assets $ 2,740,323 $ 2,362,876 Liabilities and Stockholders? Equity Deposits: Noninterest-bearing demand $ 590,487 $ 373,627 Interest-bearing: Demand 378,931 321,747 Savings 1,081,743 974,769 Time of $250 or more 61,456 50,980 Other time 143,092 244,664 Total deposits 2,255,709 1,965,787 Federal funds purchased 5,755 2,280 Other borrowings 223,181 172,035 Other liabilities 46,991 20,839 Stockholders? equity 208,687 201,935 Total liabilities and stockholders? equity $ 2,740,323 $ 2,362,876

WEST BANCORPORATION, INC. AND SUBSIDIARY Financial Information (continued) (unaudited)(in thousands) Three Months Ended June Six Months Ended June 30, 30,CONSOLIDATED STATEMENTS OF 2020 2019 2020 2019INCOMEInterest income Loans, including fees $ 22,332 $ 21,108 $ 44,643 $ 41,496 Investment securities 2,313 3,117 4,993 6,282 Other 12 110 241 208 Total interest income 24,657 24,335 49,877 47,986 Interest expense Deposits 2,351 6,670 7,397 12,634 Federal funds purchased 3 115 19 202 Other borrowings 1,556 1,512 3,250 3,223 Total interest expense 3,910 8,297 10,666 16,059 Net interest income 20,747 16,038 39,211 31,927 Provision for loan losses 3,000 ? 4,000 ? Net interest income after 17,747 16,038 35,211 31,927 provision for loan lossesNoninterest income Service charges on deposit 531 600 1,134 1,211 accountsDebit card usage fees 391 434 773 809 Trust services 461 481 924 964 Increase in cash value of 136 162 294 314 bank-owned life insuranceLoan swap fees 3 ? 589 ? Realized investmentsecurities gains (losses), (69 ) 23 (75 ) (65 )netOther income 322 299 656 885 Total noninterest income 1,775 1,999 4,295 4,118 Noninterest expense Salaries and employee 5,318 5,424 10,602 10,884 benefitsOccupancy 1,349 1,344 2,709 2,577 Data processing 596 716 1,268 1,396 FDIC insurance 292 185 529 404 Other expenses 1,862 2,081 3,972 4,033 Total noninterest expense 9,417 9,750 19,080 19,294 Income before income taxes 10,105 8,287 20,426 16,751 Income taxes 2,136 1,629 4,368 3,194 Net income $ 7,969 $ 6,658 $ 16,058 $ 13,557

WEST BANCORPORATION, INC. AND SUBSIDIARY Financial Information (continued) (unaudited) PER COMMON SHARE MARKET INFORMATION (1) Net Income Basic Diluted Dividends High Low2020 2nd Quarter $ 0.48 $ 0.48 $ 0.21 $ 20.67 $ 14.50 1st Quarter 0.49 0.49 0.21 25.68 13.74 2019 4th Quarter $ 0.46 $ 0.46 $ 0.21 $ 25.93 $ 21.01 3rd Quarter 0.46 0.46 0.21 22.47 19.63 2nd Quarter 0.41 0.41 0.21 22.32 20.14 1st Quarter 0.42 0.42 0.20 23.74 19.02

(1) The prices shown are the high and low sale prices for the Companys 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 Six Months Ended June 30, June 30,SELECTED FINANCIAL MEASURES 2020 2019 2020 2019Return on average assets 1.19 % 1.14 % 1.23 % 1.18 %Return on average equity 15.68 % 13.49 % 15.61 % 13.98 %Net interest margin ^(1) 3.27 % 2.93 % 3.19 % 2.96 %Efficiency ratio * ^(1) 41.33 % 53.53 % 43.41 % 53.19 % As of June 30, 2020 2019Texas ratio* 0.17 % 0.72 %Allowance for loan losses ratio 0.97 % 0.93 %Allowance for loan losses ratio (excluding 1.08 % 0.93 %PPP loans)Tangible common equity ratio 7.62 % 8.55 %

* A lower ratio is more desirable.(1) Non-GAAP financial measures - see reconciliation below.

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. -- 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, net interest margin and efficiency ratio on a fully taxable equivalent (FTE) basis to GAAP.

Three Months Ended June Six Months Ended June 30, 30, 2020 2019 2020 2019Reconciliation of netinterest income and net interest margin on anFTE basis to GAAP:Net interest income $ 20,747 $ 16,038 $ 39,211 $ 31,927 (GAAP)Tax-equivalent 194 200 372 472 adjustment ^(1)Net interest income on 20,941 16,238 39,583 32,399 an FTE basis (non-GAAP)Average 2,572,211 2,224,024 2,496,354 2,206,394 interest-earning assetsNet interest margin on 3.27 % 2.93 % 3.19 % 2.96 %an FTE basis (non-GAAP) Reconciliation ofefficiency ratio on an FTE basis to GAAP:Net interest income on $ 20,941 $ 16,238 $ 39,583 $ 32,399 an FTE basis (non-GAAP)Noninterest income 1,775 1,999 4,295 4,118 Adjustment for realizedinvestment securities 69 (23 ) 75 65 (gains) losses, netAdjustment for (gain)loss on sale of fixed ? ? 2 (307 )assetsAdjusted income 22,785 18,214 43,955 36,275 Noninterest expense 9,417 9,750 19,080 19,294 Efficiency ratio on anadjusted and FTE basis 41.33 % 53.53 % 43.41 % 53.19 %(non-GAAP) ^(2)

(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 Companys financial performance. It is a standard measure of comparison within the banking industry.

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