West Bancorporation · NASDAQ:WTBA
West Bancorporation — IPO Roadshow (June 2022)
29 slides from West Bancorporation's IPO roadshow presentation, Jun 6, 2022
Slide 1: Subordinated Notes Offering Investor Presentation
1 Subordinated Notes Offering Investor Presentation June 6, 2022 DRAFT – 6/03 Dated June 6, 2022 Filed Pursuant to Rule 433 Registration No. 333 - 236740 Supplementing the Preliminary Prospectus Supplement dated June 6, 2022 (to Prospectus dated February 28, 2020)
Slide 2: Forward Looking Statements
2 Forward Looking Statements This presentation may contain various statements about West Bancorporation, Inc . (“WTBA,” the “Company,” “we,” “our,” or “us”) that constitute “forward - looking statements” within the meaning of Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E
Slide 3: Disclaimers
3 Disclaimers Non - GAAP Financial Information In addition to the results presented in accordance with U . S . General Accepted Accounting Principles (“GAAP”), the Company routinely supplements its evaluation with an analysis of certain non - GAAP financial measures . The Company believes these non
Slide 4: Terms of the Proposed Offering
4 Issuer • West Bancorporation, Inc. (NASDAQ: WTBA) Terms of the Proposed Offering Offering Type • SEC Registered Term / Maturity • 10 years / 2032 Offering Size • $60.0 Million Denomination • $1,000 Redemption • 5 year non - call period, callable at par thereafter Coupon Structure • 5 year fixed ra
Slide 5: Summary Financial Highlights (Q1 2022)
5 Summary Financial Highlights (Q1 2022) Branch Map • West Bancorporation, Inc . is a publicly - traded financial holding company (NASDAQ : WTBA) established in 1984 whose sole subsidiary is West Bank, which was founded in 1893 • WTBA is one of the strongest performing companies in U . S . community
Slide 6: Corporate History
6 Corporate History Herman & Anna Raaz establish First Valley Junction Savings Bank which eventually becomes West Bank West Bancorporation, Inc. is formed as the holding company of West Bank West Bancorporation, Inc. stock listed on the NASDAQ exchange West Bank builds permanent office building in R
Slide 7: Meticulous Growth Strategy with Efficient Operations
7 Meticulous Growth Strategy with Efficient Operations • Conservative yet opportunistic growth strategy, driven by a combination of ongoing organic loan and core deposit growth from existing footprint • Highly selective new branch development using team lift - outs in their Minnesota markets • Utili
Slide 8: Market Demographics and Deposit Market Share
8 Market Branch Dep. In Dep. / Dep. Percent 2022 2010-2022 2022-2027 2022 2022-2027 Rank Count Market Branch Market of Dep. Total Pop. Pop. ∆ Proj. Pop. ∆ Median Proj. HH MSA (#) (#) ($MM) ($MM) Share (%) (%) (000s) (%) (%) HH Inc. ($) Inc. ∆ ( %) Des Moines-West Des Moines, IA 4 7 ¹ 2,190 313 8.2 7
Slide 9: Minnesota Markets: St. Cloud, Owatonna, Mankato
9 St. Cloud, MN Owatonna, MN Mankato, MN • WTBA finished the construction of its St. Cloud building in April of 2022 • St. Cloud is in a central location in the State with an economy based on manufacturing, agriculture, national and international industry, and a vibrant urban center with a strong mi
Slide 10: Experienced Management Team
10 Harlee Olafson EVP & Chief Risk Officer Harlee Olafson joined West Bank in August 2010 as Chief Risk Officer and has over 40 years experience in the financial services industry. He was previously Area Business Banking Manager for Wells Fargo in Southern, Minnesota. He has also served as Bank Pres
Slide 11: Experienced Management Team (cont.)
11 Experienced Management Team (cont.) Brad Peters EVP; Minnesota Group President, West Bank Mr. Peters is Executive Vice President of the Company and Executive Vice President and Minnesota Group President of West Bank. He joined West Bank in 2019 with over 30 years of experience in commercial banki
Slide 12: Business Line Overview
12 Business Line Overview (1) As of March 31, 2022 • Commercial real estate lending • Construction and development financing • Commercial and industrial lending • Letters of credit • Full suite of deposit and treasury management services Business and Commercial Banking • Estate administration • Cons
Slide 13: Balance Sheet Metrics
13 90.9% 96.4% 84.4% 81.4% 80.4% 0% 20% 40% 60% 80% 100% 2018 2019 2020 2021 2022Q1 Gross Loans / Deposits (%) $1,722 $1,942 $2,281 $2,456 $2,485 4.61% 4.77% 4.24% 4.13% 3.88% $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 2018 2019 2020 2021 2022Q1 Loans HFI ($MM) Yield on Loans (%) $2,297 $2,474 $3,18
Slide 14: Earnings and Profitability
14 15.68% 14.34% 15.49% 20.33% 20.96% 10.98% 11.41% 9.57% 11.74% 10.59% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 2018 2019 2020 2021 2022Q1 WTBA ROAE (%) Peer ROAE (%) 1.31% 1.20% 1.19% 1.52% 1.51% 1.19% 1.38% 1.17% 1.21% 1.21% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 2018 2019 2020 2021
Slide 15: Noninterest Income and Noninterest Expense
15 $34,992 $38,406 $39,054 $43,380 $42,648 1.61% 1.61% 1.43% 1.33% 1.22% $0 $10,000 $20,000 $30,000 $40,000 $50,000 2018 2019 2020 2021 2022Q1 Annualized Compensation & Benefits ($000) Occupancy ($000) Other Noninterest Expense ($000) Noninterest Expense / Avg. Assets (%) $7,752 $8,318 $9,602 $9,729
Slide 16: Credit Culture Overview
16 • Legal lending limit of $54.3 million • No subprime lending • No specialty or niche lending • Loan participations make up less than 2.5% of the loan portfolio • Disciplined underwriting • Experienced loan committee • Banker’s compensation is not tied to the size of their portfolio, but the devel
Slide 17: Loan Portfolio: Overview
17 1-4 Family $75,191 Multifamily 302,407 Owner-Occupied RE 311,005 Construction & Development 388,424 Non Owner-Occupied RE 941,589 Commercial & Industrial 466,874 Consumer & Other 4,068 Gross Loans & Leases $2,489,558 1 - 4 Family , 3.0% Multifamily , 12.2% Owner - Occupied RE , 12.5% Construction
Slide 18: Loan Portfolio: CRE and C&D Portfolio Details
18 Note: Data as of March 31, 2022 Loan Portfolio: CRE and C&D Portfolio Details • CRE / Bank Level RBC ratio: 444.3% • The four largest CRE concentration types include multifamily, warehouse, hotels and office and have average WALTVs of 55% - 68% and DSC ratios of 1.20 to 2.25 • Predominately stron
Slide 19: Credit Quality
19 ($509) $54 ($201) ($428) ($9) (0.03)% 0.00 % (0.01)% (0.02)% (0.00)% 2018 2019 2020 2021 2022Q1 WTBA NCOs (Recoveries) ($000) WTBA NCOs / Average Loans (%) • Conservative underwriting continues to result in pristine credit quality performance • No loans greater than 30 days past due for the past
Slide 20: Deposit Portfolio
20 0.92% 1.28% 0.50% 0.28% 0.28% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 2018 2019 2020 2021 2022Q1 Cost of Deposits (%) Deposit Portfolio Deposit Composition Cost of Total Deposits Additional Deposit Information Note: Dollars in thousands; as of March 31, 2022 (1) Core deposits equates to t
Slide 21: Securities Portfolio
21 TX , 30.2% PA , 9.5% FL , 9.1% MI , 6.6% CO , 4.1% MA , 3.8% OH , 3.7% CA , 3.5% VA , 3.1% WA , 3.0% 16 Other , 23.4% Investment Portfolio ( Book Value) Investment Portfolio Detail Municipal Securities Geography & Ratings Note: Dollars in thousands; as of March 31, 2022 Securities Portfolio Colla
Slide 22: Funding and Liquidity
22 Funding and Liquidity Note: Dollars in thousands; as of March 31, 2022 1) The Company has an interest rate swap with a notional amount of $20 million which converts the variable rate trust preferred securities coupon to a fixed rate of 4.81%; the swap matures in September 2026 • Holding company l
Slide 23: Interest Rate Sensitivity
23 Interest Rate Sensitivity Interest Rate Sensitivity Note: As of March 31, 2022 Net Interest Income Impact (%) Interest Rate Change Next 12 Months Next 24 Months +300 bp (1.26%) 0.64% +200 bp (0.79%) 0.97% +100 bp (0.46%) 0.63% 0 bp 0.00% 0.00% -100 bp 0.75% (1.35%) • WTBA views its interest rate
Slide 24: Historic Capital Ratios
24 10.68% 10.62% 10.27% 9.92% 9.81% 11.25% 10.96% 10.50% 11.13% 10.98% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 2018 2019 2020 2021 2022Q1 WTBA Tier 1 Capital Ratio (%) Bank Tier 1 Capital Ratio (%) 9.74% 9.53% 8.66% 8.49% 8.39% 10.26% 9.83% 8.86% 9.53% 9.39% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00%
Slide 25: Pro Forma Capitalization
25 Dollars in thousands As of Pro Forma $60 Million Consolidated March 31, 2022 Subordinated Debt Offering Total Assets $3,547,069 $3,605,719 Deposits 3,091,252 3,091,252 FHLB Advances 125,000 125,000 Long-term Debt 1 51,486 51,486 Trust Preferred 20,468 20,468 Subordinated Debt 2 0 58,650 Other Lia
Slide 26: Double Leverage and Interest Coverage
26 Double Leverage and Interest Coverage Note: Assumes a $60.0 million subordinated debt offering, 1.50% underwriting fee, $450 thousand in fixed offering costs and 100% of net proceeds down - streamed to West Bank (1) Interest coverage calculation assumes $60.0 million gross offering with an assume
Slide 27: Summary
27 Summary Note: Financial data for the quarter ended March 31, 2022 (1) Presented on an FTE basis; see Appendix for “Reconciliation of Non - GAAP Financial Measures” Meaningfully Sized Commercial Bank with Strong Profitability With 1.51% ROAA, a 40.1% efficiency ratio ¹ and $3.5 billion in assets,
Slide 28: Appendix
28 Appendix
Slide 29: Reconciliation of Non-GAAP Financial Measures
29 Appendix Reconciliation of Non - GAAP Financial Measures (1) Computed on a tax - equivalent basis using a federal income tax rate of 21 percent, adjusted to reflect the effect of the nondeduc tible interest expense associated with owning tax - exempt securities and loans. Management believes the