Financial Data and Key Metrics Changes - The company reported a net income of $22.5 million, with a net interest margin (NIM) of 4.59%, return on equity (ROE) of 17.64%, and return on assets (ROA) of 2.13% [3][13] - Diluted earnings per share (EPS) stood at $2.67, with tangible book value just under $60 at $59.98 [3][4] - Total assets decreased slightly to $4.17 billion from $4.28 billion at the end of the previous quarter [13] Business Line Data and Key Metrics Changes - Loan purchases amounted to $145 million, while originations were $134 million, with the loan book remaining flat overall [13][14] - The company funded $42 million in SBA loans and sold $58 million, resulting in gains of $4.2 million, down from $8.2 million in the previous quarter [15][16] - The average loan balances decreased by $92 million compared to the previous quarter due to timing of transactions [7] Market Data and Key Metrics Changes - The company noted a robust purchase pipeline driven by M&A activity and repositioning of commercial real estate loans [4][10] - The SBA activity was impacted by a government shutdown, which halted new originations since October 1 [8][9] Company Strategy and Development Direction - The company is optimistic about its new insured small business loan product with NUITY, which has seen about $10 million closed since its launch [9] - The management emphasized a disciplined approach to credit while expecting strong growth in both purchased and originated loans [10][53] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future loan growth despite challenges posed by the government shutdown affecting SBA loans [25][52] - The company anticipates a ramp-up in SBA activity once the government reopens, with continued strong demand expected [25][26] Other Important Information - The company is experiencing a change in its cost structure with NUITY, moving from a gain-sharing model to a flat fee per loan submitted [21][22] - The effective tax rate for the quarter was lower due to state law changes, with expectations for the rest of the year to be around 31% to 32% [55] Q&A Session Summary Question: Change in cost structure with NUITY - The cost structure changed to a flat fee per loan submitted instead of a split in the gain on sale [21] Question: Expectations for SBA loan gains in the fourth quarter - Management indicated uncertainty due to variables like the duration of the government shutdown but expressed optimism for a return to previous volume levels once reopened [25] Question: Increase in professional fees - The increase was attributed to temporary employees and heightened legal fees related to new products [26] Question: Quality of lender finance portfolio amid industry concerns - Management reassured that they have robust monitoring and verification processes in place to mitigate fraud risks [44] Question: Visibility on loan payoffs this quarter - There were larger payoffs than typical, with expectations that this could continue in a declining interest rate environment [51] Question: Lower tax rate explanation - The lower tax rate was due to state law changes and stock vesting impacts, with expectations for a higher effective tax rate moving forward [55]

Financial Data and Key Metrics Changes - West Bancorporation reported a 16% earnings increase over the prior quarter and a 55% increase compared to the third quarter of the previous year [4] - Net income for the third quarter was $9.3 million, up from $8 million in the second quarter and $6 million in the same quarter last year [12] - The net interest margin improved by nine basis points compared to the previous quarter [12] - Loan yield increased to 5.66% from 5.59% in the second quarter and 5.52% in the first quarter of the year [12] - The effective tax rate for the quarter was around 19%, lower than the 22% to 23% range in the first two quarters of the year [12] Business Line Data and Key Metrics Changes - Loan outstandings were slightly up at just over $3 billion, with a $43 million increase in the third quarter [8][12] - Core deposit balances decreased by approximately $82 million in the third quarter, primarily due to normal cash flow fluctuations in public fund deposits [12] Market Data and Key Metrics Changes - The Minnesota banking segment is experiencing a slowdown among manufacturing clients due to economic uncertainty, but there are new business opportunities arising from M&A activity in the market [9][10] - The company is focusing on deposit-rich business banking opportunities and has successfully attracted new deposits from high-earning individuals [10] Company Strategy and Development Direction - The company is committed to maintaining strong credit quality and has no past due loans or non-accrual loans [6] - West Bancorporation aims to leverage its strong customer relationships and liquidity to drive growth in a competitive market [8][10] - The company is focused on organic growth and taking advantage of good loan opportunities without specific plans for capital deployment [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining a solid pace of loan growth, despite being more selective in credit opportunities [19] - The company anticipates favorable conditions for margin expansion due to future Fed rate cuts and loan renewal repricing [4] - Management believes that credit quality will remain strong and expects no significant changes in the operating environment [6][12] Other Important Information - A quarterly dividend of $0.25 per share was declared, payable on November 19, 2025 [5] Q&A Session Summary Question: Update on loan growth pipeline and market share opportunities - The pipeline in Minnesota is good but not as robust as in the past due to selectivity in credit opportunities, with expectations of mid-single-digit growth [18][19] Question: Funding growth outlook with deposits and cash flow - The objective is to fund growth through deposit gathering and cash flows from the investment portfolio, with potential short-term reliance on wholesale funding [22] Question: Update on margin tailwinds and deposit beta assumptions - There are still significant repricing opportunities in the loan portfolio, but deposit betas may not be as aggressive as in the past due to competitive pressures [23][26] Question: Thoughts on future tax rate - The forward tax rate is expected to be similar to the first half of the year, with the third quarter being an anomaly [27] Question: Capital management and deployment priorities - There are no specific plans for capital deployment, but the focus remains on organic growth and good loan opportunities [29]