West Bancorporation(WTBA) - 2025 Q1 - Quarterly Results

Financial Highlights and CEO Commentary West Bancorporation reported strong Q1 2025 results, showing improved profitability, efficiency, and excellent credit quality Q1 2025 Key Financial Results | Indicator | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net Income | $7.8 million | $7.1 million | $5.8 million | | Diluted EPS | $0.46 | $0.42 | $0.35 | | Return on average equity | 13.84 % | 12.24 % | 10.63 % | | Efficiency ratio (non-GAAP) | 56.37 % | 60.79 % | 62.04 % | | Nonperforming assets to total assets | 0.00 % | 0.00 % | 0.01 % | - The Board of Directors declared a regular quarterly dividend of $0.25 per common share, payable on May 21, 2025, to stockholders of record on May 7, 2025[1] - CEO David Nelson noted continued improvements in net interest margin and efficiency ratio, modest loan growth as expected, and best-in-class credit quality metrics[2] - As of March 31, 2025, the company had no loans past due over 90 days and only one loan past due over 30 days with an insignificant balance of $181 thousand[2] Quarterly Performance Comparison Compares Q1 2025 financial performance to prior quarters, detailing changes in loans, deposits, and profitability Q1 2025 vs. Q4 2024 Compares Q1 2025 performance against Q4 2024, highlighting changes in loans, deposits, and key financial ratios - Loans increased by $11.6 million, driven by commercial and commercial real estate loans[5] - No credit loss expense was recorded in Q1 2025, compared to a $1.0 million expense in Q4 2024[5] - Net interest margin (FTE, non-GAAP) improved to 2.28% from 1.98% in Q4 2024, primarily due to a 38 basis point decrease in the cost of deposits[7] - The efficiency ratio (non-GAAP) improved to 56.37% from 60.79% in the prior quarter, driven by higher net interest income and lower noninterest expense[7] - Deposits decreased by $33.1 million. However, this included a $69.1 million increase in brokered deposits, meaning non-brokered deposits decreased by $102.2 million due to normal cash flow fluctuations of core depositors[7] Q1 2025 vs. Q1 2024 Compares Q1 2025 performance against Q1 2024, detailing year-over-year changes in loans, deposits, and key ratios - Loans grew by $36.3 million, or 1.2%, year-over-year[7] - Deposits increased by $259.5 million, or 8.5%, year-over-year. Excluding brokered deposits, core deposits grew by $320.4 million, or 12.0%[7] - Borrowed funds decreased from $639.7 million to $391.4 million, as deposit growth was used to reduce wholesale funding[7] - Net interest margin (FTE, non-GAAP) expanded to 2.28% from 1.88% in Q1 2024, driven by a 42 basis point decrease in the cost of deposits and a shift from higher-cost borrowings to deposits[7] - The efficiency ratio (non-GAAP) improved to 56.37% from 62.04% year-over-year, mainly due to higher net interest income[7] Financial Statements Analysis Presents West Bancorporation's detailed unaudited financial statements, including balance sheet, income statement, and credit quality Balance Sheet Presents the condensed balance sheet as of March 31, 2025, detailing assets, liabilities, and equity Condensed Balance Sheet (As of March 31, 2025) | Account | Amount (in thousands) | | :--- | :--- | | Total Assets | $3,986,669 | | Loans, net | $2,985,945 | | Total Deposits | $3,324,518 | | Total Borrowings | $391,445 | | Total Stockholders' Equity | $237,873 | Loan Portfolio Composition (As of March 31, 2025) | Loan Type | Amount (in thousands) | | :--- | :--- | | Commercial | $531,267 | | Real estate - Commercial | $1,909,330 | | Real estate - Construction | $451,230 | | Other Real Estate & Consumer | $127,576 | | Total Loans | $3,019,403 | Deposit Composition (As of March 31, 2025) | Deposit Type | Amount (in thousands) | | :--- | :--- | | Noninterest-bearing demand | $519,771 | | Interest-bearing demand | $517,409 | | Savings and money market | $1,633,612 | | Time deposits | $653,726 | | Total Deposits | $3,324,518 | Income Statement Presents the consolidated income statement for Q1 2025, detailing revenues and expenses Consolidated Statement of Income (For the Quarter Ended March 31, 2025) | Account | Amount (in thousands) | | :--- | :--- | | Net Interest Income | $20,855 | | Credit Loss Expense | $0 | | Total Noninterest Income | $2,243 | | Total Noninterest Expense | $13,063 | | Income Before Income Taxes | $10,035 | | Net Income | $7,842 | - Net interest income for Q1 2025 was $20.9 million, an increase from $19.4 million in Q4 2024 and $16.8 million in Q1 2024[14] - Total interest income was $46.1 million, while total interest expense was $25.3 million for Q1 2025[14] Credit Quality Details the company's credit quality metrics, including nonperforming assets and allowance for credit losses - The ratio of nonperforming assets to total assets was 0.00% as of March 31, 2025[2][15] - The allowance for credit losses (ACL) to total loans was stable at 1.01% at March 31, 2025, the same as at December 31, 2024[5][15] Loan Credit Quality Breakdown (As of March 31, 2025) | Quality Rating | Amount (in thousands) | | :--- | :--- | | Pass | $3,011,231 | | Watch | $7,991 | | Substandard | $181 | | Doubtful | $0 | | Total Loans | $3,019,403 | Shareholder Information Details key shareholder metrics, including per-share data, dividends, and regulatory capital, reflecting financial health Common Share Data and Dividends Presents per-share data and dividend information for common shares, highlighting shareholder returns - A quarterly dividend of $0.25 per common share was declared[1] Per Share Data (As of/For the Quarter Ended March 31, 2025) | Metric | Value | | :--- | :--- | | Diluted Earnings per Share | $0.46 | | Dividends per Common Share | $0.25 | | Book Value per Common Share | $14.06 | | Closing Stock Price | $19.94 | | Annualized Dividend Yield | 5.02% | Regulatory Capital Ratios Details the company's consolidated and West Bank regulatory capital ratios, demonstrating financial strength Consolidated Capital Ratios (As of March 31, 2025) | Ratio | Value % | | :--- | :--- | | Common equity tier 1 ratio | 9.02% | | Tier 1 risk-based capital ratio | 9.59% | | Total risk-based capital ratio | 12.18% | | Tier 1 leverage capital ratio | 8.36% | West Bank Capital Ratios (As of March 31, 2025) | Ratio | Value % | | :--- | :--- | | Common equity tier 1 ratio | 11.99% | | Tier 1 risk-based capital ratio | 11.99% | | Total risk-based capital ratio | 12.90% | | Tier 1 leverage capital ratio | 10.46% | Non-GAAP Financial Measures Reconciles non-GAAP financial measures, including FTE net interest income and adjusted efficiency ratio, to GAAP equivalents - Management believes non-GAAP measures like FTE net interest margin and the adjusted efficiency ratio provide useful information for analyzing financial performance and are standard measures for comparison in the banking industry[19] Reconciliation of Net Interest Margin (FTE, non-GAAP) | (in thousands) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net interest income (GAAP) | $20,855 | $19,422 | $16,750 | | Tax-equivalent adjustment | $66 | $16 | $82 | | Net interest income (FTE) | $20,921 | $19,438 | $16,832 | | Net interest margin (FTE) | 2.28% | 1.98% | 1.88% | Reconciliation of Efficiency Ratio (Adjusted, FTE, non-GAAP) | (in thousands) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Adjusted Income | $23,172 | $22,040 | $19,131 | | Noninterest Expense | $13,063 | $13,399 | $11,868 | | Efficiency Ratio (non-GAAP) | 56.37% | 60.79% | 62.04% |