WTBA - Earnings call transcript Q3 2021 | West Bancorporation, Inc.

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Operator

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

Doug Gulling

Thank everyone. joining us. Good you morning, for

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

Dave Nelson

Good company morning non-pandemic today. had joining with XX%. We’ve great you, growth about and growth Bank loan everyone operating of West and been and quarter XX% is deposit has us our protocols interest in almost and Thank ROE almost for under you your thank we year-to-date, our a Doug. XX%. had year-to-date that

liquidity. our have We excess deployed

of days. September even eight for commercial actually, a perhaps due didn’t nine three operations exceeded hired single also months we XX Moines most But just in past impressive end, bankers year’s months. did new Des in XX,’XX last we it we market. loan have earnings We already our quarter past And record as have of

that, Officer. per based payable With XX that Chief on Risk over Olafson, November shareholders share dividend declared Board $X.XX November our of XX. turn to Directors Harlee I’ll the our record So to of a call upon performance,

Harlee Olafson

will some credit quality I our make Dave, watchlist. brief on and Thank you, comments

on First that either they of an history number watchlist All plan small acceptable credits to exit will the watchlist a an are performance credits, structured all for to credits and believe properly them return none payments. are any allow have all, of the have exit financial we we and due very past due classification. have improving or of past watchlist or have

the in entire did portfolio said, loan not Dave due As past credit at have fact, end September. our over XX one of days

fixed executed of a credit plan that one reserve sells should have virtually eliminate non-accrual is our a with million assets We They that non-accrual. $X.X year-end. that have specific a by

have tracked movie to carefully Payment than have made $XX I’m hotels payments the total We outstanding and from to less minimal been now and namely positive almost theaters. are have the loans and cash that with will we the progress that protection pandemic, the pleased by SBA. the daily down by returned very flows. receive dollars they impacted they’re continue million year-end. I be expect credits

were that have our changes last still discussions regulatory All terms. or is on had within recent quarter, standard We no we did a COVID credits and have in back credits have are As bank. modifications we small. that place. In rating risk not on summary, the any reported amortizing exam watchlist

surprises that, being continuation implemented. turn protect With business credit and integrity I our recall. liquidity systems past to IT to Winterbottom the our our customers to any are enhancements markets time plans Brad than becoming it continually over and will discuss of yield. no credit our portfolio. at more have can and expect And do our risks including Other not have We any due I

Brad Winterbottom

estate quarter, it secured brief. is transactions, Thank during do Primarily you. upon real at XX% and growth quarter, projected estate. fourth but million. the approximately My be roughly we pay-offs mentioned the of for C&I, year have In Dave $XX some Based comments mostly third real elsewhere. will X%. refinance asset loan or the our was sales

bit a in is the of to headwind can pipeline We’ll we do little that I replace our think So But fourth that. good. have quarter.

growth and Dave the one a Our also, the two have ground employment deposit is coming three loan hired markets we week. growth our in all of Minnesota which on next from land was started emphasis third heavier bankers, markets. with mentioned here, commercial

And to relationships at I’ll are Brad that these to plans. that So turn our it experienced it bankers employer. over Peters. that help will their very tremendous With hand had previous growth and

Brad Peters

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

deposit around outstanding in grown markets driven nearly have Our continues growth and C&I management markets progress and on treasury growth have our our centers. each ongoing team activities created our of C&I of in presence business continues to good our opportunities. regional to to million. core focused new solid our C&I focus are has Each Loan business. Minnesota bankers Minnesota see the building and make four in And strong $XXX our

a be Our in year. scheduled market new Cloud XXXX. completed The will Mankato for scheduled a mid-January. new comments. potential market building to in And end into the the we exploring first facility market this building. our over building in the sites I to plan is site late is to Owatonna construction has St. with it And begin of turn late purchased new the to move Jane. my That now of quarter is

Jane Funk

are today. At on down remaining, going to loans, morning, million, $XX information down million of still to fees PPP million quarter-end around said, good recognized. to $XX a quarter-end yet were origination Harlee PPP more give unamortized fees $XX like Yes, little bit just at nicely $X.X we had balances had be I’m paying of we the those million

to acceleration pay those recognize as occurs we’ve remaining that’s there. So down got and that what

year-to-date recognized versus last Just million the to quarter-to-date recognized of million $X.X quarter, for And PPP last an from months, to standpoint, $X.X year. statement year. million we’ve the compare income third compared $X.X we about for income nine from loans million $X.X

little loan a Doug. it you impact the turn on gives to that income. of idea now interest And I’ll So over

Doug Gulling

provision. One, I just comment couple I’ll have a of on comments.

in always decision our what fourth today there the quarter right provisional we sitting in that be of course, wonders everybody decline. make non-accruals quarter. Harlee and the mentioned until of course, plans But are Of end place at here that to the don’t the fourth for

that we’ll here watchlist but a positive loan would a loan provision then net between and modest best the fourth at guess today, So be look our the quarter, narrow in look growth, growth provisions a be at would at sitting provision. for the range negative modest our

that. to of add concerned, that. at our going versus forward at the bit more as the the quite look suggests benefit is our a be Piper statement third We average would and time the he investment of And I fourth period that margin that far So portfolio to in next thought margin the as liquidity with Brendan right did pointed wrote from that re-indexing end end in first quarter that, out his on would in present quarterly the quarter agree quarter. the Sandler

will generally we downs the that offset than during rate the setting so, then and be against entire is loan quarter. will rates. working existing fourth take refinancing And pay the And that place or that of a any that at have lower benefit

slight So, maybe quarter. expect the be improvement in I all, fourth would but the to in margin fairly all a constant to

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

Operator

and the begin roster. answer now pause will [Operator Instructions] to We momentarily session. assembler will question We our

first Piper question from from comes Our Nosal go ahead. Brendan Please Sandler.

Brendan Nosal

morning, Good you doing? are How folks.

Doug Gulling

Good. Good morning, Brendan.

Brendan Nosal

prepared Thank detailed you for remarks. the

added I asked, the a Maybe that lot of but commercial been three quarter. You questions definitely off, this I’ve more you you. for start bankers hit a few have to

to like most Just kind curious your and additions? further of of add in perhaps your bankers where you see market appetite would to kind

Doug Gulling

pull add. have to about specifically the now. specifically the to planned conversation that We there’s good three have added. before talked a That trigger. nothing We don’t discussion quarter was did anything Well, we probably and we

However, one are to liked showed and we would market, add them. we if in an them chances experienced any up

So planned. anything we have don’t

Dave Nelson

that become candidate only And the possible Iowa there marketplace. that believe that very really place we to opportunity to place didn’t do a where strong. market. add continues Eastern we our we next Iowa is to likely grow touch one The have possibly on to market would and But the have to add an Eastern that be

Brendan Nosal

question And inflation just the a numbers kind then of higher on we maybe are seeing.

about to Just are kind curious borrowers basis base? inflation in of the in seeing expense their extent inflation of what and your also own wage they’re seeing then effect commercial concerned how costs. your And you’re input

Doug Gulling

costs is some some there and Construction couple there. a increased. activity. caution back-off conversations, on of We’ve having developers had certainly we’re planned certainly, Well

their costs couple Our plus Iowa. under or up. home now builders construction primarily gotXXX And Central I is, think right business probably homes XX minus in a though handful of building with are we’ve

it’s the within sold they demand start And three is there. a months, with closing if a down. months spec However, typically, six

it So agree that relates or it really Do of caution there though. Harlee? to relates you out ordinary are inflation but to the as with nothing certainly some issues as

Harlee Olafson

I do.

when in that think, the some of are side now it, is business going our it, kind of are have the of have interesting all customers I though C&I future it can’t that regard at we but predict we does that look on stuff, even things some immediately. the sold I the levels borrowers of strength it’s see And commercial But they get liquidity commercial trouble on the getting the inventory. right holding. that

strength levels some of But incomes of I customer been holding base good, there’s they lot is a overall, a think of and when the making I have think the in very construction. good net been slowdown liquidity.

Brendan Nosal

quarter of a you just kind or good loan strong to pay-off activity. outside folks. from incredibly elevated quarters year? you that turning here how bit an obviously curious maybe growth next just be I’m sounds But couple will temporary growth, slowdown softer, about next transitory It think of certainly And into given like of

Brad Winterbottom

additional comment there. are go existing up bit we that in a relationships might things say and bankers in Maybe hire to and help. pretty I people job it. happening want we’re grow new some business adding Minnesota maintain should more and to But Brad a to we continue doing good would find Peters on growing Minnesota, of they’re Well, should little in

have do Brad, you So any?

Brad Peters

curtail I expect And to going Brad, would see our going markets. I I to continue solid really we’re to each that. that in of agree. anything see growth that’s don’t would

go at continue. I So the looking growth and just year will the into next in the that opportunities as exist, pipeline think what’s we

Brendan Nosal

at a of going on few bit is ahead, came look the inflation quarter, we come a as expenses, bankers, later to well. pressure to of in quarter as this which turning kind little Maybe maybe

think about of you kind based how outlook? Just near-term curious expense

Doug Gulling

mean, I the see other We middle. one to of one that in was for next came one although well, us. mean, going third quarter. been really the on and don’t the running bankers hit at And yes, three the August. of I ground is we week. paying we’ve was added the since from beginning They away kind in kind

So I expenses we significantly think expect to change. really don’t

Brendan Nosal

Then I non-accrual turning maybe correct? one that that credit, I loan that reserve, specific a to to million confirm has remaining heard is just $X.X the correctly want

Doug Gulling

That’s correct.

Brad Winterbottom

We have million have $X supposed a sold to one they take reduction One to the very two loans. early one close another had in significant there. significant total one may less the non-accrual the that’s is that’s that’s plan And they than right think would now. only a our that fairly commitment have it of property is is significant. number that I place down November The in quarter small, is

of in plans end said, the expect that by are are So that to eliminate mainly appear as going I they year. have that to, the working place that

Brendan Nosal

Maybe one me. for more

margin the about thinking rates. potential higher of kind the interest in for Just

margin be update But as resulting short-term to think re-pricing expect last asset thinking that ended you queue rates happens? and time up when the of in back NIM Can that I respond disclosure to how might think us rising that slightly pressure. shows rose, to you if I in thoughts overall your deposit your rates some in sensitive. you

Doug Gulling

deposits that interest question no to income. overall, some on short-term be there’s have in increase a slight But based rates. Well, we tied that we believe there’d our models, interest do net

Brendan Nosal

all my for right, taking questions. Well, All thank wonderful. you

Doug Gulling

Brendan. Thanks,

Operator

Doug the conference questions question remarks. answer more I’d This queue. over like concludes to for to Instruction] no any closing Gulling back in are turn session. our [Operator There the and

Doug Gulling

fourth today. have you late us the we company. your thank for in you thank And quarter our We joining all about and we’ll for interest January. that’s in Well, for talk

So thank you.

Operator

Thank attending is now Conference today’s concluded. you for presentation.

disconnect. may You now

West Bancorporation (WTBA) 29 Oct 212021 Q3 Earnings call transcript