West Bancorporation, Inc. Q3 FY2025 earnings call

• General: West Banc had a solid quarter with 16% earnings increase QoQ and 55% YoY, margin expansion driven by Fed rate cuts and loan renewal repricing. - Credit quality: Very strong with no past dues, OREO, nonaccruals, etc. A small watch list in transportation industry with well-secured but cash flow issues. - Loans: Slight increase in loan outstandings, replaced assets with better interest rates. - Minnesota banks: Slowdown in manufacturing, but new business from M&A activity, focus on deposit-rich business banking, disciplined calling approach to attract new business.

Loan outstandings were slightly up to just over $3 billion in the quarter ended 9/30/25. Net income was $9.3 million in Q3 2025, an increase from $8 million in Q2 2025 and $6 million in Q3 2024. The net interest margin improved 9 basis points, with the loan yield at 5.66% in Q3 2025. Core deposit balances decreased approximately $82 million in Q3 due to normal cash flow fluctuations. Revenue contribution details weren't explicitly broken down by product segment, but overall financial performance was driven by margin expansion.

• Loan growth: Expect mid-single digit growth going forward, with pipeline being good but selective, expecting to maintain current pace. - Deposits: Objective to fund growth via deposit gathering, cash flows from investment portfolio, possibly some wholesale funding. - Margin: Still has ~$550 million of fixed rate loans repricing over next 12 months, deposit betas may be lower than last year due to competitive deposit pricing pressure.

• Economic uncertainty in Minnesota affecting manufacturing clients. - Potential impact from ag distress though West Banc is somewhat insulated from direct ag lender exposure as most customers aren't specific ag manufacturers.

Q: Could you update on loan growth pipeline and outlook for growth over balance of year and into 2026?

A: In Minnesota, pipeline is good but selective, expecting to maintain current mid-single digit pace.

Q: Regarding the $50 million municipal deposit that came out, how will you fund mid-single digit growth?

A: Objective is to use cash flows from investment portfolio, deposit gathering, and possibly some wholesale funding.

Q: Thoughts on margin tailwinds and deposit betas with Fed rate cuts?

A: Still has loan repricing opportunities, deposit betas may be lower than last year due to competitive deposit pricing.

Q: Impact of farming community distress on West Banc?

A: Direct impact is limited as most customers aren't specific ag manufacturers, somewhat insulated.

Q: Medium-term assessment of Minnesota growth venture?

A: Exceeded expectations to date, accounts for about 1/3 of the company and pleased with performance.