West Bancorporation (WTBA) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $7.8 million ($0.46 per diluted share), up from $5.8 million in Q1 2024 and $7.1 million in Q4 2024, with annualized ROA of 0.81% and ROE of 13.84%.

• Earnings increased 35% year-over-year, reflecting ongoing financial improvement, margin expansion, and improved efficiency ratio.

• Credit quality remains strong, with nonperforming assets at 0.00% and allowance for credit losses at 1.01% of loans.

• Declared a $0.25 per share dividend, payable May 21, 2025, with an annualized yield of 5.02%.

• Opened new headquarters in April 2024, supporting future growth and contributing to higher occupancy costs.

Financial highlights

• Net interest income rose to $20.9 million in Q1 2025, up from $16.8 million in Q1 2024; net interest margin (FTE) increased to 2.28% from 1.88% year-over-year.

• Efficiency ratio improved to 56.37% from 62.04% in Q1 2024.

• Loan yield in Q1 2025 was 5.52%, stable compared to prior quarters.

• No credit loss expense reported in Q1 2025.

• Brokered deposits increased by $69.1 million, while total deposits decreased by $33.1 million sequentially.

Outlook and guidance

• Management expects continued focus on disciplined organic growth, risk management, and expansion in high-quality markets.

• Deposit costs are expected to remain static unless market conditions change.

• Expense run rate for Q1 2025 expected to be indicative of future quarters.

• Tax rate will be higher in 2025 due to expiration of a seven-year tax credit at end of 2024.

• Interest rate environment remains uncertain; further Federal Reserve actions could impact net interest margin and deposit flows.