GlobeNewswire Inc | Jul 29, 2021 08:30AM EDT

July 29, 2021

WEST DES MOINES, Iowa, July 29, 2021 (GLOBE NEWSWIRE) -- West Bancorporation, Inc. (Nasdaq: WTBA; the Company), parent company of West Bank, today reported that second quarter 2021 net income was $13.2 million, or $0.79 per diluted common share, compared to second quarter 2020 net income of $8.0 million, or $0.48 per diluted common share. For the first six months of 2021, net income was $25.0 million, or $1.49 per diluted common share, compared to $16.1 million, or $0.97 per diluted common share, for the first six months of 2020. On July 28, 2021, the Companys Board of Directors declared a regular quarterly dividend of $0.24 per common share. The dividend is payable on August 25, 2021, to stockholders of record on August 11, 2021.

Dave Nelson, President and Chief Executive Officer of the Company, commented, As the country and our communities continue to emerge from the economic uncertainties created by the COVID-19 pandemic, our bankers are dedicated to executing our strategic objectives, which include organic loan growth and superior credit quality resulting from disciplined underwriting. We are pleased to have loan growth (exclusive of Paycheck Protection Program (PPP) loan activity) of 6.0 percent for the first six months of 2021, and year over year loan growth of 12.6 percent (also exclusive of PPP loan activity). Our credit quality continues to improve as all remaining COVID-related loan modifications expired in the second quarter and those loans returned to normal payment status. This improvement in economic conditions and credit quality resulted in a negative provision for loan losses of $2.0 million in the second quarter compared to a provision for loan losses of $3.0 million in the second quarter last year.

Dave Nelson also commented, We continue to build our brand in Minnesota. Construction of our permanent branch office in Sartell, Minnesota, a suburb of St. Cloud, is expected to be completed before the end of the year. We are also in the planning phase for the construction of a permanent branch office in Mankato, Minnesota.

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 the Companys 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 30, 2021. The telephone number for the conference call is 888-339-0814. A recording of the call will be available until August 13, 2021, by dialing 877-344-7529. The replay passcode is 10150541.

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 seven 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 COVID-19 pandemic, including its 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; developments and uncertainty related to the future use and availability of some reference rates, such as the London Interbank Offered Rate, as well as other alternative reference rates; changes to U.S. tax laws, regulations and guidance; 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, 2021 June 30, 2020Assets Cash and due from banks $ 31,978 $ 54,175 Federal funds sold 238,845 62,494 Securities available for sale, at fair 601,462 342,017 valueFederal Home Loan Bank stock, at cost 10,189 12,307 Loans 2,309,527 2,199,688 Allowance for loan losses (28,042 ) (21,363 ) Loans, net 2,281,485 2,178,325 Premises and equipment, net 30,753 28,655 Bank-owned life insurance 43,146 35,187 Other assets 30,902 27,163 Total assets $ 3,268,760 $ 2,740,323 Liabilities and Stockholders? Equity Deposits: Noninterest-bearing demand $ 703,691 $ 590,487 Interest-bearing: Demand 487,642 378,931 Savings 1,391,231 1,081,743 Time of $250 or more 46,660 61,456 Other time 196,065 143,092 Total deposits 2,825,289 2,255,709 Federal funds purchased 3,605 5,755 Other borrowings 165,744 223,181 Other liabilities 27,596 46,991 Stockholders? equity 246,526 208,687 Total liabilities and stockholders? equity $ 3,268,760 $ 2,740,323

WEST BANCORPORATION, INC. AND SUBSIDIARYFinancialInformation (continued)(unaudited)(in thousands) Three Months Ended June 30, Six Months Ended June 30,CONSOLIDATEDSTATEMENTS 2021 2020 2021 2020OF INCOMEInterest incomeLoans,including $ 23,139 $ 22,332 $ 47,177 $ 44,643 feesSecurities 2,607 2,313 4,810 4,993 Other 75 12 144 241 Totalinterest 25,821 24,657 52,131 49,877 incomeInterest expenseDeposits 1,995 2,351 3,872 7,397 Federalfunds 1 3 2 19 purchasedOther 975 1,556 2,286 3,250 borrowingsTotalinterest 2,971 3,910 6,160 10,666 expenseNet interest 22,850 20,747 45,971 39,211 incomeProvisionfor loan (2,000 ) 3,000 (1,500 ) 4,000 lossesNet interestincome afterprovision 24,850 17,747 47,471 35,211 for loanlossesNoninterest incomeServicecharges on 578 531 1,160 1,134 depositaccountsDebit card 511 391 953 773 usage feesTrust 691 461 1,343 924 servicesIncrease incash valueof 240 136 460 294 bank-ownedlifeinsuranceLoan swap 42 3 42 589 feesRealizedinvestmentsecurities 36 (69 ) 40 (75 ) gains(losses),netOther income 417 322 982 656 Totalnoninterest 2,515 1,775 4,980 4,295 incomeNoninterest expenseSalaries andemployee 5,672 5,318 11,280 10,602 benefitsOccupancy 1,199 1,217 2,427 2,430 Data 617 554 1,219 1,184 processingFDIC 426 292 830 529 insuranceOther 2,612 2,036 5,041 4,335 expensesTotalnoninterest 10,526 9,417 20,797 19,080 expenseIncomebefore 16,839 10,105 31,654 20,426 income taxesIncome taxes 3,600 2,136 6,663 4,368 Net income $ 13,239 $ 7,969 $ 24,991 $ 16,058

WEST BANCORPORATION, INC. AND SUBSIDIARY Financial Information (continued) (unaudited) PER COMMON SHARE MARKET INFORMATION (1) Net Income Basic Diluted Dividends High Low2021 2nd $ 0.80 $ 0.79 $ 0.24 $ 29.90 $ 23.92 Quarter1st 0.71 0.70 0.22 26.78 18.86 Quarter 2020 4th $ 0.52 $ 0.52 $ 0.21 $ 21.79 $ 15.53 Quarter3rd 0.49 0.49 0.21 17.99 15.50 Quarter2nd 0.48 0.48 0.21 20.67 14.50 Quarter1st 0.49 0.49 0.21 25.68 13.74 Quarter

(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 2021 2020 2021 2020Return on average assets 1.65 % 1.19 % 1.59 % 1.23 %Return on average equity 22.20 % 15.68 % 21.50 % 15.61 %Net interest margin on a FTE 2.99 % 3.27 % 3.08 % 3.19 %basis ^(1)Efficiency ratio ^(1)(2) 41.11 % 41.33 % 40.43 % 43.41 % As of June 30, 2021 2020Texas ratio^(2) 5.31 % 0.17 %Allowance for loan losses 1.21 % 0.97 %ratioAllowance for loan lossesratio, excluding PPP loans ^ 1.26 % 1.08 %(1)(3)Tangible common equity ratio 7.54 % 7.62 %

(1) Non-GAAP financial measures - see reconciliation below(2) A lower ratio is more desirable(3) Paycheck Protection Program (PPP)

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. -- Allowance for loan losses ratio, excluding PPP loans - allowance for loan losses divided by total loans minus the amount of PPP 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 press release 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 and net interest margin on a fully taxable equivalent (FTE) basis, efficiency ratio on an adjusted and FTE basis, loans, net of PPP loans and allowance for loan losses ratio, excluding PPP loans, to their most directly comparable measures under GAAP.

Three Months Ended June Six Months Ended June 30, 30, 2021 2020 2021 2020Reconciliationof net interestincome and net interest marginon a FTE basisto GAAP:Net interest $ 22,850 $ 20,747 $ 45,971 $ 39,211 income (GAAP)Tax-equivalent 270 194 499 372 adjustment ^(1)Net interestincome on a FTE 23,120 20,941 46,470 39,583 basis (non-GAAP)Averageinterest-earning 3,102,649 2,572,211 3,041,519 2,496,354 assetsNet interestmargin on a FTE 2.99 % 3.27 % 3.08 % 3.19 %basis (non-GAAP) Reconciliationof efficiencyratio on an adjusted and FTEbasis to GAAP:Net interestincome on a FTE $ 23,120 $ 20,941 $ 46,470 $ 39,583 basis (non-GAAP)Noninterest 2,515 1,775 4,980 4,295 incomeAdjustment forrealizedsecurities (36) 69 (40) 75 (gains) losses,netAdjustment forlosses ondisposal of 5 ? 29 2 premises andequipment, netAdjusted income 25,604 22,785 51,439 43,955 Noninterest 10,526 9,417 20,797 19,080 expenseEfficiency ratioon an adjusted 41.11 % 41.33 % 40.43 % 43.41 %and FTE basis(non-GAAP) ^(2) As of June 30, 2021 2020Reconciliationof allowance forloan losses ratio, excludingPPP loans:Loansoutstanding $ 2,309,527 $ 2,199,688 (GAAP)Less: PPP loans (84,573) (223,435) Loans, net ofPPP loans 2,224,954 1,976,253 (non-GAAP)Allowance for 28,042 21,363 loan lossesAllowance forloan lossesratio, excluding 1.26 % 1.08 %PPP loans(non-GAAP)

(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