West Bancorporation, Inc. Q4 FY2025 earnings call

• Dave mentioned the company had a good fourth quarter, net income up 35% year-over-year, executed a securities loss trade, maintained a problem-free loan portfolio, deposits growing nicely, margins expanding, and West Bank declared a $0.25 dividend.
• Harlee stated credit quality was very strong at year-end 2025 with no past dues over 30 days, no other real estate owned, etc., watch list at 1.7% of loans with 70% related to the trucking industry, commercial real estate portfolio performing well.
• Todd said loan outstandings were slightly down in the quarter due to asset sales and refinance, replaced with quality new assets at better rates, deposit gathering successful with core commercial and retail deposits increasing.
• Brad Peters described the history of Minnesota banks starting as loan production offices, building to full-service banks, leveraging facilities for business growth, targeting new business opportunities from M&A and other transactions, focusing on business banking and retail deposits.

For the fourth quarter, net income was $7.4 million compared to $9.3 million in the third quarter of 2025 and $7.1 million in the fourth quarter of last year. Net income for 2025 was $32.6 million compared to $24.1 million in 2024, up 35% over last year. In the fourth quarter, $64 million of securities available for sale were sold, realizing a pretax net loss of $4 million. Net interest margin increased 11 basis points compared to the third quarter and 49 basis points compared to the fourth quarter last year. Core deposit balances, excluding brokered funds, increased approximately $212 million in the fourth quarter and $223 million for the year. Loan outstandings were down slightly at just under $3 billion in the quarter ended 12/31/25, and deposit balances increased just over $162 million during the quarter.

• Loan growth expected to pick up when economic expansion begins.
• Net interest margin has room to expand further.
• Deposit growth outlook uncertain due to potential public fund volatility but expects continued growth in retail and commercial deposits.
• Will continue to evaluate securities portfolio repositionings on an ongoing basis.

• Watch list increased with 70% related to the trucking industry which has low freight and excess capacity, but portfolio is well secured.
• Public fund deposits have volatility which could affect deposit growth expectations.

Q: Could you walk through some of the loan growth dynamics in the quarter and the loan pipeline heading into the year?

A: Brad Winterbottom said one customer sold medical office buildings over $50 million in payoffs, other customers sold/refinanced into secondary markets, etc., with some activity continuing into first quarter and trying to replace volume; Brad Peters said opportunities from M&A continuing into 2026.

Q: Update on amount of loans repricing over the balance of this year and yield pickup?

A: Jane Funk said fixed rate portfolio repricing in 2026 is just under $400 million, pickup around 1.5%-2% on loans in the 4s.

Q: Deposit growth seasonality and continued mid-single-digit growth expectation?

A: Jane Funk said deposit growth outlook uncertain due to public funds with money flowing out in 2026, but normal public fund volatility.

Q: Appetite and potential magnitude for additional securities portfolio repositionings in 2026?

A: Jane Funk said they look at it regularly, depends on liquidity and deployment needs, no set goal or plans but will continue to evaluate.

Q: Thoughts on margin starting point for the first quarter?

A: Jane Funk said margin was around 2.5% at December year-end, January, with room to improve throughout the year without rate environment changes.