WTBA - Earnings call transcript Q2 2021 | West Bancorporation, Inc.

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Operator

Good day and welcome to the West Bancorporation Corporation Quarterly Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Doug Gulling, Chief Financial Officer. Please go ahead.

Doug Gulling

Matt. you thank Hey, everyone. morning, Good you for joining us. Thank

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

Dave Nelson

and Thank joining and of you your morning, you, us support good our interest for in Thank for company. Doug, everyone.

had to Bank Bank, another our modifications have record bank While work expired at everyone West all quarter. is and non-pandemic normal is back West COVID protocols. loan operating under

was or loan And during growth months first have year-to-date X%. Our a net PPP pipeline. of we six good the

XXXX. of Harlee Chief have XX of With shareholders the Officer. dividend, Olafson, will August which performance, XX to I'll to So quarter Risk over turn based as be record on declared our a that, we second $X.XX call this of payable August

Harlee Olafson

is everyone. very amount loan days in At had and be will issues loan Dave, one will a only we $XX,XXX. paid-off credit is end quality past Thank good credit of to XX August. in due at the good. the of home you, quarter, Bank that West the address morning This first. Overall I over

non-accrual Our from $XX expected sold in Texas of recovering $X credit positively ‘XX, dropped one of would provide properties ratio $X X.X% provision sale one have also to has pandemic. significant play. by properties. and cash that September that say is will is a One this non-accrual And X.XX% are their severely We close flowing. preliminary the Other on by believe are million. to X, our more one was adequate. a loan nicely than million. has on and one our decrease over the MoU to credit of specific I'm on significant watchlist pleased are they million that impacted that our we It

Eastern COVID payments wait pay-off. Peters Our pipeline. June. to All We has Iowa to like businesses doing have it performance to of Minnesota that, well Winterbottom in know our and on seems a are have getting We're back expired customers as see will all before continue basis and to trends good modifications are sustained full now. reductions Credit loans PPP regular upgrade. we that add daily I Iowa. this President. I Brad will turn And Winterbottom, in But Brad discuss would market that and and significant liquidity. Brad over Central with will significant that I markets is very on

Brad Winterbottom

up the our We're names a past loans. been markets there demand are million first in lack the markets. in X% so X% all markets months. has the we're in the $XXX Good had Harlee in chasing. million That dues. the morning also growth really is of in -- lot across of all are growth and very We quarter And a quarter, all we There's everyone. good pipeline $XXX Dave at in second our mentioned mentioned I year-to-date. remains six when that of strong. growth Deposits for first there's of spread loan look our good again, gathering X% pipeline, deposits

customers it's from to that, can competitors. own. Our doing There seem out aggressive will Peters demand -- tough. to Minnesota. and I is be our rates our it interest very We're are holding very is about And Brad over there. It well. with talk pass he There

Brad Peters

Brad. update to progress going Good Thanks, brief our Minnesota. morning, a everyone. provide I'm on in

good our team each Minnesota make our continues to in in of regional building Our centers. presence progress

robust. our C&I and have activity C&I markets calling out four to management continue deposit $XXX in million strong activities to driven growth has Our remain and treasury focus Loan s and core outstanding our -- on Minnesota grown focus pipelines our nearly business.

progress Funk. now We Cloud. in year. turn that new on in scheduled this That of end building the is site mid new continue in The we're my market later the construction Mankato Jane facility it comments. anticipating our on over will open late and expecting close building August, We're fall. St. make to to to to to I begin is a

Jane Funk

Brad. a and Yes. going to little interest activity impact net the loan on Thank PPP you, information income. give I'm on just the

quarter, PPP for $X,XXX,XXX loan interest income was on the the second portfolio So year-to-date.

$X,XXX,XXX. in is the around Our year-to-date second was quarter acceleration for $XXX,XXX total of $X,XXX,XXX. PPP quarter acceleration fees about income that The was

of $XX is million Our of on -- Doug. that remaining June unamortized million We round loans $XX to And that that, it of of balances had second million. on were the PPP $X over I'll at turn PPP. majority most with in vast XX fees

Doug Gulling

have and just I margin. comments of couple Jane. related a provision thanks, Okay,

basis that margin the some a factor by due the dropped to our that improvement. the And well be we in factor look say due CRE took We related the under to adjustment a On would And far to we is our to qualitative points still factors is qualitative economy have as also pre-pandemic was if negative loan know, there. if portfolio perceive say X And factors. provision repricing It backs a improvement to any what still liability that deposit we pay-off, we we -- investment renewed on margin second above overall we power we as related due $X million Any the fact maturity using. the quarter. generally lower provision any we mortgage the qualitative primarily rate. and been side. on be little the to gets concerned, that down well had would I payment, of due that loan somewhat is ahead, expect the small you at to pay adjustment or the to pressure made that as factor and

to with as that of positive be that and the a bit offsetting little the be like portfolio continue Now decrease questions. we Fed that into probably would will of offsetting amount a entertain overall, positive we it investment will margin. and be put that, but an to the what any on And money will be pressure funds

Operator

And we We this to go roster. will the answer now will Nosal assemble pause first begin come question time, our will [Operator Brendan Please from Instructions] Sandler. momentarily question Piper and ahead. At our session. with

Brendan Nosal

everybody. you? morning, are good Hey, How

Doug Gulling

Good. Good Brendan. morning,

Brendan Nosal

start push like a on being very played strong the pipelines to past of in good obviously, of things the have general here you to the off other lot opportunities. Maybe growth has results. sounds I that over it front kind getting mean, year? lending slowdown another still and small managed of folks you're through side Good. remain banks And quite strong, of quarter of

you've is growth is, something So piece doing that my X% of a that been kind XX% going guess question kind year-to-date, XX% annualized? I of to reasonable forward,

Doug Gulling

Yes, that's today. I would -- we're upon that say what assumption based good a looking at

Brendan Nosal

expense keep I'm and cost just outlook of you overall on things. Fantastic. so to of maybe might the to just the turning the right. eye kind year of Sure. And for side curious, expense All see Yes. on kind bit over a next base? the opportunities little an color of or where

Doug Gulling

the in our stock in under that favorable area, dropped that, Well, remain up a well would our because our This at expenses fluctuations made expect year, efficiency that. continue RSU to in the insurance the ratio. to we beyond our pretty a FDIC the and very expect of wouldn't any asset quite control grants size, deposit wild we some our But price expenses. compensation premiums bit influences are time have

Brendan Nosal

Okay. All color. right, that's helpful

Doug Gulling

bankers would is we've expectation couple for more are pay than add, -- themselves. The of markets. our will and I they We Brendan, in that a added

Brendan Nosal

course, course. of of Yes,

Excellent. Okay.

potential securities? I'm yielding what mentioned, do the you able much assets you? is rates folks of one higher work those today do for Fed how kind in balances, to put of kind wondering, positive our pressure your margin of ability look on You just into and to think be funds to of like terms you'll invest

Doug Gulling

I mean, expect million transfer $XXX over million don't I Well, doing funds. Fed of somewhat million work though we we But specific money. have in $XXX real few that have target. the next months. a $XXX that to would put another could roughly to gradual we're We

little get $XX pretty get in July, $XX And the in short rates, purchases. and million on million feel X%, we pretty. September. and get in I as August aren't ramped those above May staying June. reinvestment a far another bit we in that somewhat as relatively think We're they good. up But probably We we if can

Brendan Nosal

Okay, excellent.

reserve for more of the form reserves, improves, wondering, you level Let's see, notice, the your did ratio, the just or where overall provision, there reserve you settle? the you have overall think this then but levels still reserve higher released [indiscernible]? about that trying perhaps kind And as path of much growth thoughts on And balance. of during and a was loan whether the pre-COVID, glide in comes is kind might outright to economy getting adequate kind quarter of negative the as anticipating, who's in I

Doug Gulling

you target don't overall result watchlist then quarter. various our factors in would the direction that what ratio every the that qualitative factors. or of we the is are the of expect quality and into that our go change, an or Yes, change the I loan have the ratio. and analysis of evaluation And the a growth, mean,

may don't target ratio we it we other ratio, let have the where after a pieces. fall evaluate we all those So

Brendan Nosal

for Maybe Okay, they're point totally quarter, back. last of me that all trending were in one this I where at above they were step still some kind total fair. There but before nice criticize in that can right, that's this last improvement year.

noise? kind the improvement kind to through of I'm of further credit for drivers bit of and how timing view work of remaining that So the just curious you

Harlee Olafson

watchlist. look period in sustained one we to see before flow This increase customer And But improvement we obviously, customer. over a that is have we Harlee. a upgrade. will specific in due really improvement. time is was cash showing And of I to that -- would would

risk losses of is minimal Our there. really

it then to situation business backup. the not though are isn't of being that not wrapping Even recovering sort It's in and of pandemic issues from type it's situation. So of really -- regard a less open it loans, the what X% overall than higher still and it's low. perspective of categories also it total than historical I'd that in very comment has within is watchlist all which been.

Brendan Nosal

Yes, Excellent. everybody. of taking questions, course. you right. All Thank of course, for my

Doug Gulling

Thanks, Brendan.

Operator

[Operator Instructions].

questions, concludes Gulling like As the over would remarks. there no answer to session. closing any I our more question conference and are Doug to back this turn for

Doug Gulling

And thank morning. in Well, your company. you we joining again, just for this we appreciate us like to interest our

So thank you.

Operator

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

You may now disconnect.

West Bancorporation (WTBA) 1 Aug 212021 Q2 Earnings call transcript