WTBA's Net Income Soars 56% on Strong Net Interest Income Growth

TL;DR

**WTBA is crushing it with net interest income, making it a strong buy in a tough market.**

AI Summary

WEST BANCORPORATION INC (WTBA) reported a significant increase in net income for the three and nine months ended September 30, 2025. Net income for the three months rose to $9.314 million, a 56.5% increase from $5.952 million in the prior year. For the nine months, net income reached $25.135 million, up 48.3% from $16.953 million in 2024. This growth was primarily driven by a substantial increase in net interest income, which climbed to $22.501 million for the quarter (up 25.3% from $17.960 million) and $64.775 million for the nine months (up 24.7% from $51.940 million). Total assets slightly decreased to $3.985 billion from $4.015 billion at December 31, 2024, while total liabilities also decreased to $3.730 billion from $3.787 billion. Stockholders' equity improved to $255.133 million from $227.875 million, partly due to a reduction in accumulated other comprehensive loss from $(89.357) million to $(75.409) million. Loans, net, saw a modest increase to $2.978 billion from $2.974 billion. The company also reported an increase in salaries and employee benefits to $7.457 million for the quarter, up from $6.823 million in the prior year.

Why It Matters

WTBA's robust net income growth, driven by a significant increase in net interest income, signals strong operational performance in a challenging banking environment. For investors, this indicates effective interest rate management and potentially higher returns, especially with diluted EPS rising to $0.55 from $0.35. Employees might see continued stability and growth opportunities as the company performs well. Customers could benefit from a financially healthy institution, though competitive pressures in the banking sector remain intense, with other regional banks vying for deposits and loan business. The broader market will watch if WTBA can sustain this momentum amidst evolving economic conditions and regulatory changes.

Risk Assessment

Risk Level: medium — While net income is up, the company's total assets slightly decreased to $3.985 billion from $4.015 billion, and total deposits declined to $3.307 billion from $3.358 billion. This indicates some balance sheet contraction, which could pose a risk to future growth if deposit outflows continue. Additionally, the company still carries a significant accumulated other comprehensive loss of $(75.409) million, although it has improved from $(89.357) million.

Analyst Insight

Investors should consider WTBA's strong net income and net interest income growth as a positive indicator. The improved stockholders' equity and reduced accumulated other comprehensive loss suggest a strengthening financial position. Monitor deposit trends closely, but the current performance warrants a closer look for potential long-term investment.

Financial Highlights

debt To Equity

14.63

revenue

$22.501M

operating Margin

N/A

total Assets

$3.985B

total Debt

$492.972B

net Income

$9.314M

eps

$0.55

gross Margin

N/A

cash Position

$232.932M

revenue Growth

+25.3%

Revenue Breakdown

Key Numbers

• $9.314M — Net Income (Q3 2025) (Increased 56.5% from $5.952M in Q3 2024)
• $25.135M — Net Income (YTD 2025) (Increased 48.3% from $16.953M in YTD 2024)
• $22.501M — Net Interest Income (Q3 2025) (Increased 25.3% from $17.960M in Q3 2024)
• $64.775M — Net Interest Income (YTD 2025) (Increased 24.7% from $51.940M in YTD 2024)
• $3.985B — Total Assets (Sept 30, 2025) (Slight decrease from $4.015B at Dec 31, 2024)
• $255.133M — Total Stockholders' Equity (Sept 30, 2025) (Increased from $227.875M at Dec 31, 2024)
• $(75.409)M — Accumulated Other Comprehensive Loss (Sept 30, 2025) (Improved from $(89.357)M at Dec 31, 2024)
• $0.55 — Basic EPS (Q3 2025) (Increased from $0.35 in Q3 2024)
• $1.49 — Basic EPS (YTD 2025) (Increased from $1.01 in YTD 2024)
• $3.307B — Total Deposits (Sept 30, 2025) (Decreased from $3.358B at Dec 31, 2024)

Key Players & Entities

• WEST BANCORPORATION INC (company) — Registrant
• SEC (regulator) — Securities and Exchange Commission
• $9.314 million (dollar_amount) — Net income for three months ended September 30, 2025
• $5.952 million (dollar_amount) — Net income for three months ended September 30, 2024
• $25.135 million (dollar_amount) — Net income for nine months ended September 30, 2025
• $16.953 million (dollar_amount) — Net income for nine months ended September 30, 2024
• $22.501 million (dollar_amount) — Net interest income for three months ended September 30, 2025
• $17.960 million (dollar_amount) — Net interest income for three months ended September 30, 2024
• $64.775 million (dollar_amount) — Net interest income for nine months ended September 30, 2025
• $51.940 million (dollar_amount) — Net interest income for nine months ended September 30, 2024

FAQ

Risk Factors

• Interest Rate Sensitivity [medium — financial]: The company's profitability is sensitive to changes in interest rates. Fluctuations in interest income and expense, particularly on deposits and loans, can impact net interest income. For the three months ended September 30, 2025, net interest income increased by 25.3% to $22.501 million, indicating a positive impact from current rate environments, but future rate shifts pose a risk.
• Credit Risk and Loan Portfolio Quality [medium — financial]: The company's primary asset is its loan portfolio, valued at $2.978 billion net of allowance for credit losses. While the allowance for credit losses remained relatively stable at $30.515 million, any deterioration in borrower creditworthiness or economic downturn could lead to increased credit loss expenses and negatively impact earnings.
• Increased Operating Expenses [low — operational]: Salaries and employee benefits increased to $7.457 million for the quarter ended September 30, 2025, up from $6.823 million in the prior year. While this reflects investment in personnel, a continued upward trend in operating expenses without commensurate revenue growth could pressure profitability.
• Regulatory Compliance [medium — regulatory]: As a financial institution, West Bancorporation is subject to extensive regulation. Changes in regulatory requirements, capital adequacy standards, or compliance failures could result in significant costs, penalties, and reputational damage.
• Economic Conditions [medium — market]: The company's performance is tied to the overall economic health of its operating regions. A recession or significant economic slowdown could lead to reduced loan demand, increased credit risk, and lower deposit growth.

Industry Context

West Bancorporation operates within the highly competitive banking sector. The industry is characterized by evolving customer preferences for digital services, increasing regulatory scrutiny, and sensitivity to interest rate movements. Banks are focused on managing net interest margins, controlling operating costs, and maintaining strong capital adequacy ratios to navigate economic cycles and competitive pressures.

Regulatory Implications

As a regulated financial institution, West Bancorporation must adhere to stringent capital requirements, lending standards, and consumer protection laws. Compliance with evolving regulations, such as those related to cybersecurity and data privacy, is critical. Any failure to comply can lead to significant fines and reputational damage.

What Investors Should Do

1. Monitor Net Interest Margin Trends
2. Assess Loan Portfolio Health
3. Evaluate Expense Management
4. Review Capital Adequacy

Key Dates

• 2025-09-30: Quarter and Nine Months Ended — Reporting period for the 10-Q, showing significant net income growth driven by net interest income.
• 2025-12-31: Previous Year End — Baseline for comparison of assets, liabilities, and equity.
• 2025-02-20: Form 10-K Filing (for year ended Dec 31, 2024) — Reference document for detailed annual financial information.

Glossary

Net Interest Income

The difference between the interest income generated by a financial institution and the amount of interest it pays out to its customers and lenders. (Key driver of profitability for West Bancorporation, showing a significant increase in the current period.)

Accumulated Other Comprehensive Loss

A component of stockholders' equity that includes unrealized gains and losses on certain investments and foreign currency translations that have not yet been realized. (A reduction in this loss indicates an improvement in the value of certain assets or a decrease in liabilities not reflected in net income, contributing to higher total equity.)

Allowance for Credit Losses

An estimate of the amount of loans that are expected to be uncollectible. (A contra-asset account that reduces the carrying value of loans on the balance sheet; changes in this allowance can impact reported earnings.)

Basic Earnings per Common Share

Net income divided by the weighted average number of outstanding common shares. (A fundamental measure of profitability on a per-share basis for common shareholders.)

Securities purchased under agreements to resell

Short-term borrowing transactions where the company sells securities and agrees to repurchase them at a later date at a slightly higher price. (Represents a short-term investment and a source of funding, appearing as an asset and a liability respectively.)

Year-Over-Year Comparison

Compared to the prior year's comparable periods, West Bancorporation has demonstrated robust growth in profitability, with net income increasing by 56.5% for the quarter and 48.3% year-to-date. This surge is primarily attributed to a substantial 25.3% rise in net interest income, indicating effective management of interest-earning assets and liabilities in the current rate environment. Total assets and liabilities have seen slight decreases, while stockholders' equity has improved, partly due to a reduction in accumulated other comprehensive loss. Key risk factors remain centered around interest rate sensitivity and credit quality, though current performance suggests these are being managed effectively.

Filing Documents

• wtba-20250930.htm (10-Q) — 2931KB
• wtba-20250930xex311.htm (EX-31.1) — 10KB
• wtba-20250930xex312.htm (EX-31.2) — 10KB
• wtba-20250930xex321.htm (EX-32.1) — 3KB
• wtba-20250930xex322.htm (EX-32.2) — 3KB
• 0001166928-25-000081.txt ( ) — 12561KB
• wtba-20250930.xsd (EX-101.SCH) — 39KB
• wtba-20250930_cal.xml (EX-101.CAL) — 105KB
• wtba-20250930_def.xml (EX-101.DEF) — 229KB
• wtba-20250930_lab.xml (EX-101.LAB) — 615KB
• wtba-20250930_pre.xml (EX-101.PRE) — 440KB
• wtba-20250930_htm.xml (XML) — 3030KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements 4 Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 4 Consolidated Statements of Income for the three and nine months ended September 30, 2025 and 2024 5 Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2025 and 2024 6 Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2025 and 2024 7 Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 9

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 10

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 32 "Safe Harbor" Concerning Forward-Looking Statements 32 Critical Accounting Policies 32 Non-GAAP Financial Measures 33 Overview 34 Results of Operations 36 Financial Condition 45

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 49

Controls and Procedures

Item 4. Controls and Procedures 50

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 50

Risk Factors

Item 1A. Risk Factors 50

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 50

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 50

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 50

Other Information

Item 5. Other Information 50

Exhibits

Item 6. Exhibits 50

Signatures

Signatures 52 3 Table of Contents

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements West Bancorporation, Inc. and Subsidiary Consolidated Balance Sheet (unaudited) (in thousands, except share and per share data) September 30, 2025 December 31, 2024 ASSETS Cash and due from banks $ 26,875 $ 28,750 Interest-earning deposits with banks 109,265 214,728 Securities purchased under agreements to resell 96,792 — Cash and cash equivalents 232,932 243,478 Securities available for sale, at fair value 537,856 544,565 Federal Home Loan Bank stock, at cost 15,190 15,129 Loans 3,008,888 3,004,860 Allowance for credit losses ( 30,515 ) ( 30,432 ) Loans, net 2,978,373 2,974,428 Premises and equipment, net 109,212 109,985 Accrued interest receivable 13,366 12,825 Bank-owned life insurance 45,875 44,990 Deferred tax assets, net 27,722 33,202 Other assets 24,954 36,389 Total assets $ 3,985,480 $ 4,014,991 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits: Noninterest-bearing demand $ 512,869 $ 541,053 Interest-bearing demand 448,731 543,855 Savings and money market 1,799,392 1,643,891 Time 545,525 628,797 Total deposits 3,306,517 3,357,596 Subordinated notes, net 80,090 79,893 Federal Home Loan Bank advances 270,000 270,000 Long-term debt 38,986 42,736 Accrued expenses and other liabilities 34,754 36,891 Total liabilities 3,730,347 3,787,116 COMMITMENTS AND CONTINGENCIES (NOTE 8) STOCKHOLDERS' EQUITY Preferred stock, $ 0.01 par value; authorized 50,000,000 shares; no shares issued and outstanding at September 30, 2025 and December 31, 2024 — — Common stock, no par value; authorized 50,000,000 shares; 16,940,785 and 16,832,632 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively 3,000 3,000 Additional paid-in capital 36,473 35,619 Retained earnings 291,069 278,613 Accumulated other comprehensive loss ( 75,409 ) ( 89,357 ) Total stockholders' equity 255,133 227,875 Total liabilities and stockholders' equity $ 3,985,480 $ 4,014,991 See Notes to Conso

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) 1. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared by West Bancorporation, Inc. (the Company) pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to such rules and regulations. Although management believes that the disclosures are adequate to make the information presented understandable, it is suggested that these interim consolidated financial statements be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 20, 2025. In the opinion of management, the accompanying consolidated financial statements of the Company contain all adjustments necessary to fairly present its financial position as of September 30, 2025 and December 31, 2024, net income, comprehensive income (loss) and changes in stockholders' equity for the three and nine months ended September 30, 2025 and 2024, and cash flows for the nine months ended September 30, 2025 and 2024. The results for these interim periods may not be indicative of results for the entire year or for any other period. The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (GAAP) established by the Financial Accounting Standards Board (FASB). References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codification , sometimes referred to as the Codification or ASC. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the repo

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) Current accounting developments : In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative . The ASU incorporates certain SEC disclosure requirements into the FASB Accounting Standards Codification TM. . The amendments in the ASU are expected to clarify or improve disclosure presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC's regulations. For entities subject to the SEC's existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. For all other entities, the amendments will be effective two years later. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. These amendments have not had an impact to the Company as of September 30, 2025. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . The ASU is intended to improve the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation table and income taxes paid to be disaggregated by jurisdiction. It also includes certain amendments to improve the effectiveness of income tax disclosures.

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) 2. Earnings per Common Share Basic earnings per common share are computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per common share reflect the potential dilution that could occur if the Company's outstanding restricted stock units were vested. The dilutive effect was computed using the treasury stock method, which assumes all stock-based awards were exercised and the hypothetical proceeds from exercise were used by the Company to purchase common stock at the average market price during the period. The incremental shares, to the extent they would have been dilutive, were included in the denominator of the diluted earnings per common share calculation. The calculations of earnings per common share and diluted earnings per common share for the three and nine months ended September 30, 2025 and 2024 are presented in the following table. Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per share data) 2025 2024 2025 2024 Net income $ 9,314 $ 5,952 $ 25,135 $ 16,953 Weighted average common shares outstanding 16,941 16,833 16,906 16,797 Weighted average effect of restricted stock units outstanding 74 88 89 76 Diluted weighted average common shares outstanding 17,015 16,921 16,995 16,873 Basic earnings per common share $ 0.55 $ 0.35 $ 1.49 $ 1.01 Diluted earnings per common share $ 0.55 $ 0.35 $ 1.48 $ 1.00 Number of anti-dilutive common stock equivalents excluded from diluted earnings per share computation 309 264 316 303 12 Table of Contents West Bancorporation, Inc. and Subsidiary

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) 3. Securities Available for Sale The following tables show the amortized cost, gross unrealized gains and losses, and fair value of securities available for sale, by security type as of September 30, 2025 and December 31, 2024. September 30, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized (Losses) Fair Value Securities available for sale: Collateralized mortgage obligations (1) 260,546 — ( 43,449 ) 217,097 Mortgage-backed securities (1) 137,628 2 ( 19,652 ) 117,978 Collateralized loan obligations 14,823 8 — 14,831 Corporate notes 13,750 — ( 858 ) 12,892 $ 640,936 $ 24 $ ( 103,104 ) $ 537,856 December 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized (Losses) Fair Value Securities available for sale: Collateralized mortgage obligations (1) 278,754 — ( 59,490 ) 219,264 Mortgage-backed securities (1) 145,992 — ( 26,173 ) 119,819 Collateralized loan obligations 18,932 33 — 18,965 Corporate notes 13,750 — ( 1,378 ) 12,372 $ 673,370 $ 33 $ ( 128,838 ) $ 544,565 (1) Collateralized mortgage obligations and mortgage-backed securities consist of residential and commercial mortgage pass-through securities and collateralized mortgage obligations guaranteed by FNMA, FHLMC, GNMA and SBA. Securities with a total amortized cost of approximately $ 547,338 and $ 572,491 as of September 30, 2025 and December 31, 2024, respectively, were pledged as collateral for borrowings and public fund deposits, and for other purposes as required or permitted by law or regulation. The amortized cost and fair value of securities available for sale as of September 30, 2025, by contractual maturity, are shown below. Certain securities have call features that allow the issuer to call the securities prio

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) There were no sales of securities available for sale during the three and nine months ended September 30, 2025 and 2024. The following tables show the fair value and gross unrealized losses, aggregated by investment type and length of time that individual securities have been in a continuous loss position, as of September 30, 2025 and December 31, 2024. September 30, 2025 Less than 12 months 12 months or longer Total Fair Value Gross Unrealized (Losses) No. of Securities Fair Value Gross Unrealized (Losses) No. of Securities Fair Value Gross Unrealized (Losses) Securities available for sale: subdivisions $ — $ — — $ 173,161 $ ( 39,145 ) 94 $ 173,161 $ ( 39,145 ) Collateralized mortgage obligations — — — 217,097 ( 43,449 ) 68 217,097 ( 43,449 ) Mortgage-backed securities — — — 117,564 ( 19,652 ) 25 117,564 ( 19,652 ) Corporate notes — — — 12,892 ( 858 ) 8 12,892 ( 858 ) $ — $ — — $ 520,714 $ ( 103,104 ) 195 $ 520,714 $ ( 103,104 ) December 31, 2024 Less than 12 months 12 months or longer Total Fair Value Gross Unrealized (Losses) No. of Securities Fair Value Gross Unrealized (Losses) No. of Securities Fair Value Gross Unrealized (Losses) Securities available for sale: subdivisions $ 4,485 $ ( 271 ) 7 $ 169,650 $ ( 41,526 ) 90 $ 174,135 $ ( 41,797 ) Collateralized mortgage obligations — — — 219,264 ( 59,490 ) 69 219,264 ( 59,490 ) Mortgage-backed securities 610 ( 3 ) 1 119,209 ( 26,170 ) 25 119,819 ( 26,173 ) Corporate notes — — — 12,372 ( 1,378 ) 8 12,372 ( 1,378 ) $ 5,095 $ ( 274 ) 8 $ 520,495 $ ( 128,564 ) 192 $ 525,590 $ ( 128,838 ) If the Company intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis, then the security is written down to fair value through income. As of September 30, 2025 and December 31, 2024,

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