WTBA - Earnings call transcript Q3 2019 | West Bancorporation, Inc.

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Operator

Good morning and welcome to the West Bancorporation Quarterly Earnings Conference Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. I would now like to turn the conference over to Mr. Doug Gulling. ahead. go Please

Doug Gulling

morning call. Good to third our Thank and conference quarter you. welcome

On Nelson, West are Officer; morning fair Accounting the this call with begin Dave Jane our Chief our Officer; Officer. I'll and; statement. Harlee Risk our Brad President Winterbottom, Bank disclosure Funk, Chief Olafson, Executive Chief

statement unanticipated information Safe during currently call current and or Act the speaks obligation of of the after Private call as events. update Litigation Reform Company this Comments only of or or forward-looking revise only events within The provisions undertakes available made conference on to during us the call to reflect Harbor statements us XXXX. today's made Any reflect is based this forward-looking date. to of contain this circumstances such statements to may no occurrence meaning by of the Securities

Dave at this begin. So time, Nelson will

Dave Nelson

for proud had an of Thank thank investment everyone, quarter you, Very Company. you of still drag Minnesota quarter. we in the XXX-year had in us. best our and that our our and expansion, good Doug all-time the earnings report we joining the pleased Despite record history morning to

Xth Iowa Company. news shareholders expansion locally the run year-end, a the our were with quarterly employer fast we we that of of Board a point as on to approved on top Also the here translate into date workplace Directors and dividend sixth breakeven record payable XXth. selected will of one which in swing our year, November of once for better November are our rate, consecutive and again and $X.XX year-over-year even and Perhaps for positive is a by Iowa, achieving approaching profitable hopefully big a

the We also had exciting Director. in appointment of new news a some

of Donovan all decades in extensive Patrick spanning Mr. Board a to in banking banker career Minnesota. an the been Donovan four and Directors. is it's background retired with our Board industry Our appointed J. nearly

welcome to Board. and Mr. Donovan to pleased very proud are We our

the Bank I'd over with that, Winterbottom. to turn like our to And call President, Brad

Brad Winterbottom

in the year comments. our activity million unexpected the that, third quarter. brief Thanks, roughly from third Dave. payoffs Loan we of over up the be -- up were $XX had had X.X% Despite were in I'll X.X%. loans my we and in then quarter, the in beginning

So which in our volume the be really would our directive, is from for quarter markets we've Pipeline the growth, quarter. including good robust. coming fourth third very Minnesota had all

of construction continued We we loans on. growth lot have a anticipate that

XX big we happening closings have days. next We that anticipate XX, some in here the

be on I And of strategy quarter. better fourth think I get with growth very will would terms deposit we the Minnesota fourth to our It anticipate Deposit improve robust board loan good. in our growth in quarter ITMs with our be So volume. been more has when will [ph].

That over ends it and talk to Harlee about to my I'll comments, trends. credit turn

Harlee Olafson

Brad. Thanks,

Just a couple of things to talk about.

been very had full both actually in non-accrual and or is and that X% sticky our they those within than record and on less our area principal total got Our is We three all credits paid developments of that our in off watch we in list currently the a two at substandard and credit interest low. some and credits. on quarter really actually were had loans non-accruals, received

compute non-accrual to it the of to low some fact, level now, a doesn't In area right is type down such percentage.

pleased commercial zero estate, days. significant nothing are that and portfolio, I'm report past presence commercial a real to We in over dues real that on there have XX our estate

and quarter quarters that loan of year sometimes but we in the that, with year, is estate on believe different loan one we a commercial upon of there have, always our the appropriate allowance based it's starting $XXX,XXX growth, Due till XX-day in quality has last In real don't credit fact, -- last we occurs provision it. that's is due a our XX-day in significant think I occur [ph] portfolio. past to now, where a it doesn't fairly did been take really

in really I little momentum. bit good think the In to depository up will of we things markets. our of behind November our we We machines help can. In depository all best we type us to a markets, in pieces and place got those those to will the opening we markets, accelerate in services place that types getting think have the that technologically in in provide our be technology new able and have of growth regard new

believe, of close, I I've committed is that into level the to the it the it. seen consider that pipeline that our by -- significant be waiting portion And which talked are level at we us quarter ever loans Brad customer a to pipeline looking at and by that going our last at been about, have is the highest just of year. this the And accepted

of in, momentum Mankato communities Owatonna that the have magic is of have population economies or really good locations in shrinking any Cloud, we part are of are than in and really are West in that strong Bank in strength. the communities good and markets that any better Des being in we're we don't really of or in those we communities all those city, is have communities, that good -- St. On Rochester, our all Moines economies Iowa losing

bode does well for that us in the future. So

customer and continued staff best future we Our to customer that, we has base give along believe provide the with an is service ability I strong is business. with seasoned good continue opportunity that growth. build incredibly Along us and and to have that the can to continues in stable to

Doug. will it I to turn back over that, With

Doug Gulling

had in mentioned, Harlee. full. we on details unamortized and Brad paid few fees. that collected -- bank some we of of the interest $XXX,XXX penalties loans mentioned -- financial I've the And deferred We got the the comments income between a collect statements. -- We on the have were of on non-recurring just some prepayment the $XXX,XXX Okay. Harlee did We prepayments some quarter. did more interest. Thanks, third that on in non-accrual recognizing then items

would that we So point out.

of of quarter lot credits so fund used insured credits expense portion deposits once this of third at able they out our categories, the FDIC X.XX% -- zero, of third and you were is credits In insurance the the to a build second all have some a FDIC as and was credits that because and zero. costs the early those happened we or take in the FDIC of the at in banks the quarter, reached the know, that the FDIC quarter so end quarter may expense our

FDIC will that and quarter about should in of be zero credits expense the recognized We quarter $XX,XXX expect the fourth that again, XXXX. leave our of in first

bit Just cost of the our Minnesota of net a little initiative. information on

a basis, we've $X.X but on of we that is estimate million, rough incurred generated net have $XXX,XXX. about about year-to-date expenses of interest Our income

a cost year-to-date. give million. that So $X.X us of net That's would

we were quarter, was were approximately the $XXX,XXX, the $XXX,XXX. interest net third For that income our net the estimate expenses cost $XXX,XXX so

with So And we questions. be answer our that remarks. any to would happy concludes prepared that,

Operator

from We begin O'Neill. will ahead. now go Our Liesch [Operator comes Instructions] Please the first Andrew question-and-answer Sandler with session. question

Andrew Liesch

correct? interest a prepayment million margin penalties Good quick of that Doug, of net went NII, $XXX,XXX or is just the through as that $XXX -- well or of clarification morning.

Dave Nelson

correct. That's

Andrew Liesch

to being growth like the do non-recurring saw know see that still, you and on you mean benefits pretty of playing deposit then as items quarter, one-time you you're Okay, which as working that. the trending here? those maybe drove out kind good out? interest got offset I growth from remediate possible some maybe it of you high, those guys locations the And the excess strong that may be the mean in and referenced I the side. of bit And mentioned. a little you. looked and But Notwithstanding I not drove I is do deposit mean it Minnesota see you how where what or liquidity, funding margins that liquidity,

Dave Nelson

good to a may sold rates observation. least the the build loan for there of have. a might but We at do we corporate Good We and carrying been were gain, June into liquidity know, than I sold so, a risk-weighted but over loan interest type and that be that small and we growth bit, and third that's this no, when thing don't down, liquidity some, have growth, Yes, notes in we little more normally investments have -- in actually not those carry, did did liquidity we June. breakeven. a We headed money little the at up. portfolio in sell late able expected to to Sure. that we was the XXX% would July, some quarter late net that were starting question. put have loan

end the those of we million you payoffs when Brad at of with mentioned most $XX were of July. almost being visiting unexpected, with

liquidity And normally so September, little we carry. at than have would end the a we did of more

holding we and strong expect just the of fourth quarter softened good on we're by However, a to the loan so growth -- by that until [Phonetic] portfolio. loan it's and

our terms the a margin, the end benefit know, is moment that the slight So the our which as run. Fed towards of the of in best Fed, end be in while a bottomed is for full benefit short at guess September, us, was out. There the margin of would right the that in of quarter, you at a fourth cut there --

the the certainly than books, higher than as a more rates come fed then funds, out bit. And rates and margin should bottom loans on overnight and improve and little more at investments higher

Andrew Liesch

other Got driving a was then trust pick the areas like the up in there anything that? services, line. little you, unique in also just helpful. It Was the that's income there looked and fee

Dave Nelson

quarter believe have was to the and if a trust fees handling, referred work income in estate that the the I lot fees in fee court extraordinary $XX,XXX. to I can able we where additional more were a that's think we the area, it's go an been that situation had and request as court third Yes, and collect expected, we what's granted on we than to that

Brad Winterbottom

Yes, it was.

Andrew Liesch

Okay.

Brad Winterbottom

have also doing as Dave well. a job been selling good

as we're well. seeing benefit of So the that

Andrew Liesch

lastly how the XX-Q the you guys thought from bank. to or then there? or the process to Got the Are that is delay delay what's CECL, comment just in me, planning applicable release the you. And then about

Dave Nelson

to decision available to and We us. We're is smaller company that Yes, delay. the are going delay we reporting to a made delay.

And so, yes, to going we're delay.

Andrew Liesch

covers Okay, thanks. questions. all That my

Dave Nelson

Yes. Thanks, Andrew.

Operator

ahead. go McLaughlin Please comes from [Operator Instructions] next Our with McLaughlin Kevin Investment. question

Kevin McLaughlin

And late, you've morning. a bit assets these in into Bremer, markets with, have? would saw how say the compare what with I people large that to little valuable And the compare the have those How three they they Fargo those wanted a assume US would market or I presence did you you a Wells came the ask the they be to of it did or how competitors what you would Rochester? I of just Fargo compared does and a that how principal from if Bancorp. have they -- And share a with US Good and in were that markets? Wells taken characterize new but Bancorp? call say, assets of kind

Dave Nelson

Kevin, this Interesting is Dave. questions.

different. similarities, very there are but think the a I is landscape yet lot of

really Rochester able strong hiring when that You similar we're we was to rate only want us say, with Cloud, that had way with we once similar say several in six that took be, able I from Owatonna we're same I a by go best XX team out Mankato to to in proven supplemented ramp-up of the to to we town, again, a hire, Rochester. that, who in hire existing XX community Des the and quite to months deep all town, and we timeline three or of advantage run of know, the team ago, that's experiencing really achieve Moines, this profitable believe in combined of the we were advocates, package deep the had create relationships where were St. went community relationships instead to into leaders. boards going And into with is really it the the were Rochester. us people able of round best employees, and in guess up here and that familiarity very start town the about Only expansion existing bankers experienced we're about years and communities the in had five our a it we in but advantage nine

Kevin McLaughlin

of the excuse Go people some Well, -- ahead. me.

Brad Winterbottom

to the of not to large may be can breadth is, a the the talking about being be what in potential that and things if Group and, regard size potential and wise, look double similar our you to One operation. Group, potential you at you're the might that, of the maybe our and and potential Rochester as is St. was Mankato Owatonna potential of at potential as XX% probably our size Cloud look what Rochester potential as

Kevin McLaughlin

lot know those came Okay. of initially, might that kinds made operation of bringing was same Well, Brad virtually way. been Fargo may that it, then that moved with you a Wells I been some from Peters, these they that the is Mankato, where well? think have out But bankers, where connections as Dave Meeting remember They have these all Owatonna and a that in felt the at remark of Brad. and did or the staff St. roots made Annual Wells him Fargo Brad with over I I of Clouds, Bremer bankers entire you have

Dave Nelson

so Cloud. in Several in and did, Owatonna certainly much not as St. Mankato but

Kevin McLaughlin

-- and on it from but feeling happy kind here, quarter. basis very in Okay. deposit Well, the to a be but for I'll congratulations quarter, on me see anxious pedigree I'm the how reach, shareholder especially this a next of a that the gives great goes

Dave Nelson

Thank you, appreciate support. Kevin. We your

Kevin McLaughlin

sir. Yes,

Operator

concludes turn the for Doug question-and-answer remarks. back This like Gulling closing to session. over conference any our would I to

Doug Gulling

thank just your we us Well, for wanted to joining you and I support. again appreciate

you. thank So

Operator

now has presentation. you Thank today's attending concluded. for conference The

You now may disconnect.

West Bancorporation (WTBA) 25 Oct 192019 Q3 Earnings call transcript