West Bancorporation, Inc. Q1 FY2026 earnings call

Dave Nelson: Strong quarter, margin expected to improve as COVID era assets reprice, loan balances flat but deposits growing, attractive credit opportunities in pipeline, credit quality pristine, $0.25 quarterly dividend declared. Harley Olson: Credit quality very strong, no past dues over 30 days, etc., watch list down, trucking industry issues, commercial real estate portfolio performing well, credit pipeline strong. Brad Winterbottom: Loan portfolio flat, loan payoffs due to secondary market, backfilling with new opportunities, selective in new loans, confident in customer relationships. Brad Peters: Minnesota banks expansion since 2016, relationship-based model, strategic facilities, disciplined calling, expect core deposit and loan growth, well positioned for market share growth as economy improves

Net income for the quarter was $10.6 million, compared to $7.8 million in the first quarter of 2025, representing a 35% increase. Net interest income increased $3.5 million, or 17%, compared to the first quarter of last year. Margin has increased 12 basis points compared to the previous quarter and 31 basis points compared to the first quarter of last year. Cost of deposits has declined 14 basis points compared to the previous quarter and 40 basis points compared to the first quarter of last year. Credit quality remains pristine with no provision for credit losses recorded. Non-interest expenses increased 3% from first quarter of last year. Core deposit balances were down a bit this quarter due to normal cash flow fluctuations. Loan portfolio was flat compared to year end. No loans past 30 days. Watch list down 20% from year end to 1.4% of total loans, 90% related to trucking industry. Commercial real estate portfolio performs well. Credit pipeline volume increased substantially.

If Fed rates don't change, ample asset repricing opportunity with cash flow from six-rate portfolio maturing. Projected $38 million rolling off investment portfolio over next 12 months. About $250 million of loans and investments to reprice in next 12 months. Capital managed based on earnings improvement and loan growth. Allocate investment cash flows to loan portfolio as needed

Trucking industry issues affecting watch list loans, economic and political issues causing mild new business activity, core deposit seasonality due to customer cash flow fluctuations

Q: Regarding the municipal depositor from last year, where do outstanding balances sit today?

A: ~75% remaining.

Q: What takes loan demand higher and translate to loan growth?

A: Active new business opportunities, backfilling loan payoffs, large prospect list.

Q: Thoughts on capital needs vs deployment?

A: Earnings improvement helps capital, manage with loan growth.

Q: Outlook for NIM if Fed on hold?

A: Asset repricing to improve margin with $250 million reprice in next 12 months.

Q: Margin outlook over next few quarters?

A: ~$250 million reprice, no specific targets.

Q: Excess equity for loan growth?

A: Allocate investment cash flows to loan portfolio.

Q: Expense growth and commercial bankers in Minnesota?

A: Expense management ordinary, conversations ongoing for commercial bankers.

Q: Tail of M&A-related opportunities in Minnesota?

A: Several years, focus on getting in second place and winning business