WTBA - Earnings call transcript Q4 2020 | West Bancorporation, Inc.

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Operator

Good day and welcome to the West Bancorporation Quarterly Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Doug Gulling. ahead. go Please

Doug Gulling

Good this you. Thank for you Great. morning, us morning. joining Thank everyone.

reflect the of call Harbor Nelson, events. statement. off. forward-looking Bank this date. meaning On XXXX. Olafson, this are after with and may Chief on today the And us Dave available us contain no we’ll such And during unanticipated provisions Risk Funk, Any forward-looking Controller Reform to the current Act Private or begin today’s occurrence Brad statement start of call this to of Accounting revise us company Jane The call Officer. our made Dave information events the fair call by Securities our the Officer; during to Winterbottom, made or speaks Litigation and statements West disclosure to will of of update obligation only circumstances is as within President; our Nelson our Safe reflect undertakes and only based or Comments currently Chief Harlee CEO; conference statements

Dave Nelson

of closed good interruption. pleased employees, record and all have that year our work Doug, West everyone $X.XX circumstances. followed and increased we safety an board cetera, dividend But $X.XX We have XX achieved share, record et limited for directors so quarterly protocol, COVID with say date company. from XX. unordinary did would lobbies, February we're Thank date quarter extra of done. service everyone. as and appreciate upon to your per the a with you, every no very Thank quite interest rotating February joining very us. you a home support was access, for to record another of from much XXXX imaginable a approved including has Bank year.and our you based and We morning of performance, payment in our was

one bank so and round banks. deposit during PPP, peaked that we PPP of in could I our we're million Our believe Bank We in with delivery did two our current now of usage West the able XXX April of at balances. as and poster stay PPP our alternative timeframe did about one of channels excess loan nightshifts. PPP totaling of nightshifts. named nation's loan and be an March essentially factory loans to converted XXX And certainly and We've about underway. PPP SBA but applications, into $XXX without the round received is

loss and the and about During to added Those XXXX, had by general Winterbottom. our XX%. like call our now expensed my President, year to a over to million Brad turn increasing loan by Bank we XX%. for earnings We increased are $XX I'd allowance allowance our we comments. still record

Brad Winterbottom

PPP did we the And had $XX at mentioned that those I those $XXX of million Thank we million end you. million of in year, we end roughly think forgiven. the Dave loans. I roughly a $XX at had roughly the think of year, of the

transactions, customers the PPP loan the would loans. quarter PPP when had growth we've the And just had Central flat. which fourth ahead three the X%. which fourth that X% was sold with all probably in roughly impacted Iowa Central slightly the markets So just probably of that I relatively say We year, have portfolio, was the exception significant would growth Iowa of at excluding was during market. any for market absent customers, loan our look for the it I growth over quarter roughly then

that on all But we've I markets existing we've customers growth new growth As well. for most be customers. in that seen would existing say from would was it deposit point $XX,XXX end average Harlee or It billion relates Certainly out loans that past XX% growth, XX of about the days is customers. at just had to as that wanted totaled grew more due. there. our primarily added year two portfolio, just but $X.X year. the to of has to under that going deposits I the think come quality really a asset I loan talk we

And statement So year in loss million one adding I in the the month was and we think to with charge-offs of – and that stating that loan the that Dave added – $XX had $X,XXX. provision XXXX we

that very am Harlee. remains to to qualities going portfolio it our good. with over pass I think I And

Harlee Olafson

trends. $XX the you, They've loans thanks. Brad. little issues, modifications. on information COVID-XX then that’s will updated end at Thank million. specific the and million. at That Well, new when $XX it I COVID-XX and markets. it $XX Today is credit in of watchlist today, compares was XXXX our second-draw to a us Currently XXXX list progress already credit million and watch our our discuss PPP at to was our

our risk co-operative watch the list. process very biggest The is the represents is borrower We specialized in marketing of their and have that on one properties. credit

quarter found the receive are first of a that will for draw. the property out of sale the We their they payment not did receive during eligible a loan for debt. they million XX% first under about And one $X that just from in PPP we also

payments them point significant principal that April. We they with And credit until that in forbearance start again. with paying are fairly after in

have more with As Hotels, cash from a ability have tracking experienced weather difficult monthly significant abilities issues either has or or due under and of things times closed the being that and loans or to as problems On loans PPP COVID-XX because theaters reduced have restaurants, certain our also open. drawer. second been even to investor the certainly significantly we stress hours to along had getting such having be Most adequate liquidity portfolio pandemic. hotel burn. are everybody occupancy

dollars the also to the few a theaters our Act. that and significant through which PPP have program again have theater through receive enough receiving of are nice aid concentration We a restaurants business we stages they survive, will Relief

this markets million also University fully deferred the $XXX and as first modifications quarter time. for our the in of normalized end a full Iowa, all is had them of be the quarter. consider and extend The more very become of thriving. but looking gone group $XX times includes Rochester shutdown. at before non-accrual Mankato what that than will on, the what to the loans Iowa. the by I’ll generator they is is these million there of times are that we're they're strong height of this big XXXX, at Cloud interest or over capacity Mayo of dominated that and we monthly think stop of With I probably have markets, at goes And the in our up when year to And P&I. in on things of In we Most modification. commented million Eastern previous Rochester also St. they’re in all second market Owatonna, Minnesota, were on in that and all of Jane. This paying and $XX our modification through base modifications credit this regional X.XX% turn COVID-XX and off will is centers are specific were Regarding seeing new end again. customer and our we

Jane Funk

interest I'm a to and Harlee. income. comments loans just our on make on few the PPP going Thanks, net Okay. impact

XXXX That mentioned So originated of PPP the from of loans $XXX the on loans life on loans received which majority are income. million two the fees million we rate $X.X interest that portfolio of interest plus the amortize represents the FBA. in million the in $X.X are the the years. amortization generated we like for vast fees loans received of When they them over X% our

So, an amortization. additional fees then we excuse me, based $X amortization, was the downs on forgiveness. approximately the through million $X.X normal recognized and December million of of about and there on pay interest normal XX received And income accelerated

yield the the As for to as the margin was X.XX%. on that's far as year XXXX of far our loans. on little same for as X.X% yield was if loans exclude a net loans. That the But basically on the were PPP the you drag PPP interest yield, at a bit overall so

it a did margin on net XXXX. drag overall So, interest not have for

bit it and income on So, more Doug. those detail the kind on turn to statement of a over little are I'll back PPP impact

Doug Gulling

Jane. in allowance the area. year. mentioned a Thanks add one had comments I'll the we charge-off couple at just of the minor more Brad Okay. beginning the

recoveries we $XXX,XXX. year the of had For

of will So, going is we we'll I'm of right some for is in in net to do be today that still our what recovery to quarter and analysis in end then. go this it the the two make we quarter the of a last are $XXX,XXX. first been of And at XXXX have best of provision full three running course you determination lower the our at bit XXXX. the sure -- our provision are quarters has our guess quarter. than quarter, do what But first okay a fourth quite sitting quarter months for wondering here and

what equity are proxy our and that loans is PPP extent margin to The know influenced the X. had by new lastly, a to some forgiven for we the were the been fourth moderate fourth than payments or because In come and around XX-K $X,XXX,XXX,XXX likely many I the quarter since And mature loans the of would going want loans, that for have for compression XX-K average and most were the margin going numbers margin, our PPP file the average then quarterly our or loans that of the stated is was and rate quarter mainly those on loans expect the terms the I $X,XXX,XXX,XXX. course the on on to not the have short be that we we how mention our expect the March quarter the for average may of would so XXXX In were books. fourth average and run, and reinvestment lower you be of yet, on issued investments. assets investments over as few the quarter $XXX,XXX,XXX made rate loans

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

Operator

question begin Sandler. [Operator with now go Instructions] Our Please first question-and-answer Brendan will today come will ahead. Piper Nosal We the from session.

Brendan Nosal

doing Hey, good morning everybody. Hope you're well.

side see. very you of Let's build on quarter. the even guys the that deposit here on inflows. sold excess to funds the assets want Fed sheet in further of It sharply like the looks liquidity increased off during balance I some this start

And So how two, of drivers might course you on of some your what’s the over the liquidity that the just curious. use of then kind underlying thoughts One, were? year?

Dave Nelson

drivers were, were several. there The Sure.

million public year-end the that transactions Our the our had write quarter. at in we had some through flow year. a the just the the a -- end fourth customers had spike We in of $XXX that funds Then businesses bank. money

Today, it'll January. end sitting would $XXX million plan in And some expect this at goes. We further to is XX-day deposit first where And being million thoughts on reverse a and up on now we’re put it here already normal how into in due of And the has this into see X.XX% our that that overnight time gone in quarter well, money. out, be point repo in business moment we liquidity. about and enter $XXX to about earn a will we operations. to the at our runoff just do some program

that's situation. kind the summarize and I of would our so, deposit And how flows liquidity

Brendan Nosal

color. Yeah. helpful Fantastic. That's

given on then, growth how thoughts you PPP and overall Can folks and ahead? your the this growth some a environment. for on just for thoughts quarter it both you quarter the growth growth noted made frame And exceptionally as at by strong solid Good. came year turning offer guys then portfolio and where pretty geographically fourth the from you Okay. year to in loan was

Dave Nelson

fourth there. real transactions. the secured we that Iowa have would of I lagging is the majority a There said – predominantly but transacted. There It in all would like through bit quarter, a market. the couple in occupied were multi-family in come markets, we large owner say growth some I that probably of businesses central estate, were

construction. roughly of on have also $XXX commitments We million

end fairly PPP the example. some see million, that year. the also I of first $XXX activity it we'll would that is the We drawers that the as would robust looked I I forgiveness say growth. more were right Today $XXX of million. like with million $XXX number and now at But today So of is at say at an

happening. we is yes, really but started. are the round just that's forgiveness that of kind second doing So And

forgiven. did our we would would quarter $XXX of I well here fully year. most be So in of that most of would I I that most of will million will customers anticipate imagine that loans be of second the gone by imagine PPP XXXX this relatively

Brendan Nosal

it. Got

makes incremental updated certainly just going, And But balances going it's contributing the on then how just us expansion market like That kind certainly any and it and there well turning it's there sense. stand curious thoughts thoughts the end? any in Okay. sounds that's in Minnesota, of growth. where over at for is remind to new then year to

Dave Nelson

performing markets million The in are have think at year-end and $XXX loans $XXX The strong deposits. markets new and have to us. well. very million totals Sure. in million these The for were in of the neighborhood C&I markets $XXX right been very about I

So we in developer investor those had of of a loans haven't really tremendous amount markets. property type

nice us there. it's for So balance a

able in and was you're we to teeing places Our like the only face do with disappointment the in a had more closed activities face. inability is restricted has the customers that opportunities to Minnesota to that to been been go prospect our that. restaurants meet regard are up lot

you're greet accessible. a that your of and relationships and opportunity less lot future. growth But a in area believe exceptional continue high us meet develop So an to been for will places been for we that the do has trying to us be customers and have where

Brendan Nosal

it. Got

Good. Good. Okay.

Let's see.

capital big and to curious do thoughts the risk it turning course how any of to heading ratio But a bit little just for blunting for regulatory liquidity you TCE looks your on inflows year? doesn't but like ratios. pretty that management so Just capital much a they're view the updated into new assets free moment,

Dave Nelson

regulatory consistent indicated, the really would requirements sure in cover been, our to last well ratios and they of all Well, over I say, couple pretty Sure. requirements. capitalized as excess constant, for our pretty are all well years of you of the have Basel and III be

capital value over and equity good and of still and equity contributed that see that a regulatory asset question any and year, pure swaps the course of that, to concern don't that no the of risk inflated lower so a the in did the and to declined ratios addition the influx to X% little in on course our profile we're equity we sheet this But above bit runs of and market there. our ratio through with cost the liquidity the ratio. quite So, balance shape,

Brendan Nosal

Good. Good.

maybe then I for very, the this one me back, Okay. I And last very certainly costs before think were step well controlled year.

year. than lower in were many for came probably it thinking the think I

base do over of next as Just see trajecting? you you the couple look how quarters, the expense

Doug Gulling

a don't It expenses they hopefully little go the change if that were, business but expenses. development probably, a customer of well, opens more, bit up will and world our I whole a will entertainment see lot where up from in absent

to than I in increases. salaries see our normal a lot for But in expenses. whole of annual going some that, have increases don’t other We’re change

year. done building Our Minnesota St. this expenses a won't Sartell, this of occupancy That'll year The in much we're building year. suburb change following of be the Cloud. end at

won't operational it So XXXX. beginning be the until of

we what expenses So than other mentioned. see of a don't lot whole I just in change just

Dave Nelson

over Doug years… two our headcount, last there's the really not changed

Doug Gulling

No…

Dave Nelson

all growth. our …despite

Doug Gulling

right. that's …no,

Even we've bank. XXX that is areas – added think Minnesota, year. right we people way some other And contracted FTE least of past certainly in added our as at but and the the in some I count well people in been it's people around for we've

Brendan Nosal

Fantastic. so questions. the Okay. it. taking much you Well, I for all thank appreciate

Operator

more there be no time. Well, appear Instructions] [Operator questions at to this

the turn conference will like conclude Doug back I'd our Gulling question-and-answer to any So closing for remarks. to this session. over

Doug Gulling

for us. we do in your all Thank have Bancorporation. that's you Well, for West thank you. interest today. we appreciate And joining Again,

Operator

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

disconnect. now may You

West Bancorporation (WTBA) 29 Jan 212020 Q4 Earnings call transcript