WTBA - Earnings call 4 2023 | West Bancorporation, Inc.

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Operator

Good afternoon, and welcome to West Bankcorporation Inc.'s Fourth Quarter 2023 Earnings Call. Please note that this call is being recorded. [Operator Instructions] I will now turn the call over to Jane Funk, CFO. Please go ahead.

Jane Funk

Thank you, and welcome, everybody. us joining for you today. Thank

our today, On our our Bank earnings myself; I'll Peters, Nelson, call forward-looking have Harlee the President; the Olafson, with Brad our call CEO; Winterbottom, Chief Dave Brad President. we'll Risk call Group Minnesota statements. and start Officer;

performance other the we the over to Reform safe December update actual the fourth we I'll risks During of will harbor predictions of or make quarter is duty the forward-looking today's future regarding accurate the that information within XX, Private are XXXX materially. may turn we that, undertake statements it conference may about Litigation future no Nelson. in results and more Please statement provisions Dave or events our meaning financial earnings uncertainties, call, XXXX, release Securities information caution affect statements and We provide the projections forward-looking as disclosure of today differ of with for company. which to information. And may the see such that and The us.

David Nelson

you, for Thank and continued you, and of us for support company. your our interest thank and Jane, this morning, joining thank you everyone,

went Our as quarter expected.

that provide provision a an the we quarter, During had details of intentional Jane loss those. and both trade will on

rate terms would be Fed compression, fourth helpful. rate future no welcome of and cuts margin quarter even In hike during was the more

year quarter essentially the the Our no ended with XX-day credit problems. past quality pristine. remains loans credit and no due and We

February to Risk remarks. turn now of of record to payable the would per X. Those regular Harlee Wednesday, dividend, shareholders February Officer, approved like call Wednesday, XX $X.XX a Board Olafson. of extent I to Chief over my are the Directors our Mr. share of Our prepared as quarterly

Harlee Olafson

stated, quality he credit extremely you, our as remains strong. And Dave. Thank

and quarter and commercial list percentages occupied, properties approximately test makeup mixed-use portfolio in medical have improving have over have multifamily, in is in end past is each properties, locations watch for do of owner living our to total loans debt in hotels, XX -- loan is stress X% days. We service Office And XX% pressure values on office, to we of assisted warehouse office as before, area. estate value trends downtown no which coverage, X% XX% in real XX% in vacancies. only XX% and said portfolio XX% the type at portfolio properties senior housing is $XXX,XXX. the just most this the Our due our properties. due in is quarter seen and some

We have minimal exposure to the type of property.

long-term pressure Assisted facilities. that also. living the to also a those And under care have staffing high limited and amount we facilities cost of of are due

looking to focus us. relationships not deal. want to that to a Our have comprehensive We're our applicants is just with do that great customers provide service for

sides our Our increase Brad more relationships markets total our to customers' with I will the keep Winterbottom. rates business. that, add turn bankers maintain The deposit to a having our both we our balance doing over have been President, that in of to strong. of with good remain customer our those job to prospecting bank economy base, it capturing sheet. And

Brad Winterbottom

Good afternoon.

portfolio in our $X.XX ended for X.X% grew to loan loan XX/XX/XX, grew outstandings. just ended and portfolio our million XXXX, quarter $XX For year over billion the X.X%. the And or

in and vertical asset acquisition part draws was to portfolio previously on funding the in committed due construction growth Our transactions. some

We're markets fair the should environment months. in gathering slightly on winning in to these. $XXX very have sales place share efforts draws construction our Deposit XX competitive in of over XX commitments serve. we next a are an take million vertical over the We unfunded emphasis battles that highly

good. is pipeline Our

serve to we our over Brad our create prospects turn President. to see relationships we're abilities we remain Peters, interest with the continue market maintain our environment and and that And in, share. we living to Given all I'll opportunities pursuing. With markets our have grow it that, customers Minnesota and the positive to confident rate in we good in are

Bradley Peters

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

to environment to existing interest spite navigate business continue in are those rates. rapid the We rise through In and challenging enhancing a of new we challenges, relationships. due growing

and a intentional been been efforts new has draw we deposit focus business. Our on and to management our C&I calling have in treasury growth,

our tool high-value great business employees. Mankato business high-value our growing and We has new on are and been facility. focusing market personal This owners The their by their to now new retail attract key relationships. also has a deposits opened deposit

finalized has this turn of Jane. and now for end new spring. Those will my are market will it Owatonna the later the to I over comments. back construction building Our plans begin

Jane Funk

Thanks, Brad.

a Just open our on we'll then and questions. comments up for few financials, it

loss period to So X compared quarter our million transaction on The securities investment is earnings of included were million be $XX earn-back proceeds reinvested loan on income fourth quarter million the to $X.X and provided $X.X that in loss year. $XXX,XXX transaction portfolio that third fourth quarter. in sale approximately a the the was about securities. The in the estimated

recorded unfunded earlier margin margin each the relatively quarter to $XXX,XXX just a X -- year. interest was of And quarter, a small interest with X also each month has in since compared provision and fourth a $XXX,XXX significantly as for for interest months decline third fourth net basis stable. decline points quarter the quarter-over-quarter. credit of growth the We our in the net slowed the in fourth result declined relatively was commitments. Net The of in growth. of in the loan losses and flat quarter the income

for our near rate forecasting the flow deposits, any margin customers' interest volatility, in due market net activities remains to and cash uncertain. However, term competition

of income. million from year, decline Our XXXX were in net result $XX.X earnings interest the with decline prior primarily the the

increases of and building open increases market St. the it compensation questions. up in Our noninterest net new X.XX% the to in assessment inflationary-related Cloud, for margin rate. Those and of in occupancy end due were XXXX FDIC Minnesota Year-over-year prepared the and costs from in in declined primarily we'll interest in increases and XXXX. insurance X.XX% comments, are costs, expenses to our

Operator

Andrew [Operator Instructions] comes first Liesch Your with Piper question Sandler. from

Andrew Liesch

sticking here. pace with the margin the a quite bit. Obviously, has Just slowed

you it? best we're you nearing do as look the forecast a can bottom that to you So out think

Jane Funk

Yes.

margin So monthly pretty the margin has been -- stable during quarter. fourth

the bit would our the margin. dictate I like is side cost next this to we think which a how is the here X of portfolio side, in what's going at what drive cost funding really be X depositors than point just the the slower will will activity little that But to kind be. and flows current deposit quickly months reprices, of what it really loan to of

mix So will that changes things in and significantly. that like influence

Andrew Liesch

strong. have Do loans the Got loan average were the at the during new The was what growth of it. pretty quarter? added you here

Brad Winterbottom

that be Most be of construction prime on basis rate a added did Xs. asset of in to our the some would high the of construction floating off funding loans, loans we our would mid- virtually all of we that

Andrew Liesch

it. Got

in the the Fed Okay. margins -- have year, under here And pressure you how That's obviously, think middle margin of if of you But a helpful. with been series the that? up. got the cuts rates how we react beginning rate to do would going do

Jane Funk

be would certainly helpful. it think I Well,

in probably to unknown deposit there's this could quickly some the is you probably environment? How rates And the piece on -- lag. and be side actually deposit that's there. going really kind lower the -- lag that Our to of

lower So relief little starts. a when rates from Fed lagged bit that maybe

Andrew Liesch

offices online? Makes just it. the costs coming related occupancy the to Got operating was the sense. new on increase Then or cost there,

Jane Funk

Yes.

Andrew Liesch

adjustment? Got going Or And salaries to it. benefits then was item noticed figure guess bonus I I'm trying be that down, line I in the out XXXX? rate were what a forward to that going accrual run and is that for

Jane Funk

costs there true-up fourth and kind of was the additional Compensation benefits. in quarter, Yes. -- of bonuses some some

some So are compensation. our small another next that in bankers year, at those end retiring. XXXX, the in occurring the got for of had and a is and we've retirements the increase retirement are early year expectation We've

kind And the that have of not annual we'll we're be increases our And on will dependent be increases -- will marketplace. going some and -- to so raises replacing.

we're significant in costs. not overall change So compensation expecting a

Andrew Liesch

Got it.

into growth. had but is Okay. That's quarter. drove gears go this what up It also some helpful. And like then construction there XXXX, Or to really also growth curious residential see? in asset strong, loan look is the that? single-family pipeline sounds to as we the was CRE And you purchases are some construction? going I book like the you be by shifting could driven that the again

Brad Winterbottom

that we have some the late various that seen that some in that million fourth will early do $XXX early sizable do also I -- had this But advanced. in plus we've per month. off of paid we've transactions think get in construction and fairly quarter, Well, projects

that do just construction, -- and The unexpected. in construction are most up it's place, took a unexpected, are the probably through the in dig frozen. those to some the starts in put is going home and so hole foundations -- hole So they is versus could trying maybe winter tick when big while some

those though. So minor, be would

Andrew Liesch

then helpful. expecting the those Any the just you on question details you one them. And quarter. I it. that not Very just can was in that Got charge-offs surrounding had provide,

Brad Winterbottom

on. of, for our any thinking went I been his it's $XX,XXX, health. and a health I books, a payments. monthly maybe don't but bit, know is I'm on which of fact, classified. were that dark turn this And getting one I The been Yes. kind think think We south

to we to it's we collateral. going very decided charge to money we all minor. just get some but -- have time, going decided take to So that we're think off, it We back, of so

Operator

from comes question next Your [indiscernible]. Paul

Unknown Analyst

did In terms sale, estimated how earn-back million $XX.X the of you calculate the bond period?

Jane Funk

the the went in the Well, portfolio. foregone the at looking proceeds then selling. proceeds, loan that the securities into million really And interest we're $XX on

that That's the payback going we're off period. to we loans prevailing at earn we're how for So kind looking that rate those. at income of measure the booking the

Operator

this turn time. further now Funk. will I call at no Jane Seeing questions to back the

Jane Funk

much. joining We with to us XXXX. All forward you, Thank look the call right. everybody earnings everyone, very continue today. Thank and through you discussions next for

Operator

you may This now disconnect. concludes today's conference call,

West Bancorporation (WTBA) 25 Jan 242023 Q4 Earnings call transcript