The following is a summary of the West Bancorporation, Inc. (WTBA) Q3 2024 Earnings Call Transcript:

Financial Performance:

• West Bancorporation reported a net income of $6 million for Q3 2024, which was stable compared to $6 million in Q3 2023, but showed a decrease from $19.6 million in the first nine months of 2023 to $17 million in the same period of 2024.

• Net interest margin increased by 5 basis points in Q3 2024 compared to Q2 2024. This increase was largely due to a 50 basis point reduction in the Fed rate allowing for lowered deposit rates in high costing sectors.

• The bank anticipates further benefits to its net interest margin from future rate reductions, depending on various factors including deposit mix and loan investment repricing opportunities.

Business Progress:

• Loan portfolio was relatively flat in Q3, showing a modest growth of 3.2% through the first nine months of 2024 totaling $94 million, driven primarily by vertical construction loan commitments.

• Core deposit balances grew by 7% year-to-date, supported by focused efforts on strengthening deposit relationships, which reflect a mix of public funds, commercial, and retail activity. A projected decrease in temporary funds is expected in 2025.

Opportunities:

• The expectance of future Fed rate cuts is seen as an opportunity to further improve the net interest margin.

• Continued focus on deposit gathering in a competitive environment projects an ongoing increase in core deposit growth.

Risks:

• Future increases in interest rates could cause declines in cash flows for customers with significant commercial real estate loans that are due for repricing, potentially impacting loan repayments despite stress tests not currently showing significant payment issues.

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