Executive Summary

Q4 2024 was WTBA’s strongest quarter in seven, with net income of $7.1M and diluted EPS of $0.42, driven by higher net interest income, lower funding costs, and a favorable $1.8M energy investment tax credit .
Core deposits rose 8.4% sequentially; brokered deposits fell by $159.5M, reducing wholesale funding and improving deposit cost by 27 bps, which lifted NIM (FTE) to 1.98% from 1.91% .
Credit quality remains pristine (NPAs/Assets 0.00%) with ACL/Loans at 1.01%; nonaccruals were just one loan at $133K at quarter‑end .
Management expects continued margin improvement in 2025 from further rate cuts and asset repricing; declared a $0.25 dividend payable Feb 19, 2025 .
S&P Global consensus estimates were unavailable due to data access limitations; comparisons to Street were not possible this quarter.

What Went Well and What Went Wrong

What Went Well
- Deposit mix shift and pricing reductions lowered cost of deposits by 27 bps and reduced wholesale funding; NIM (FTE) expanded to 1.98% and net interest income increased to $19.4M. “We saw growth in core deposits and improvements in net interest income [and] net interest margin…and believe these trends can continue during 2025.” — CEO David Nelson .
- Pristine credit quality: NPAs/Assets at 0.00%, watch list ~0.26% of loans; “we had 0 past dues over 30 days” and CRE performing well across multifamily, warehouse, mixed-use, hotels. — CRO Harlee Olafson .
- Efficiency ratio improved to 60.79% as higher net interest income outweighed expense increases; ROA 0.68%, ROE 12.24% .
What Went Wrong
- Securities repositioning incurred a realized loss of $1.2M on ~$11.8M of AFS sales; earn-back expected in ~2 years as proceeds are reinvested in loans .
- Provision for credit losses of $1.0M (loans) increased due to qualitative factor updates in CRE and broader macro assumptions (e.g., unemployment), not specific portfolio deterioration .
- Occupancy costs rose with the new headquarters, contributing to higher noninterest expense; Q4 expenses included incentive accruals and depreciation true‑ups, elevating the quarter’s run rate .

Financial Results

Sequential quarterly comparison (oldest → newest)

Metric	Q2 2024	Q3 2024	Q4 2024
Total Interest Income ($USD Millions)	$47.57	$48.61	$49.32
Net Interest Income ($USD Millions)	$17.23	$17.96	$19.42
Noninterest Income ($USD Millions)	$2.35	$2.36	$1.43
Noninterest Expense ($USD Millions)	$13.19	$12.89	$13.40
Net Income ($USD Millions)	$5.19	$5.95	$7.10
Diluted EPS ($USD)	$0.31	$0.35	$0.42
NIM (FTE, %)	1.86%	1.91%	1.98%
Efficiency Ratio (Adj FTE, %)	67.14%	63.28%	60.79%
ROA (%)	0.53%	0.60%	0.68%
ROE (%)	9.50%	10.41%	12.24%

Year-over-year comparison

Metric	Q4 2023	Q4 2024
Total Interest Income ($USD Millions)	$42.68	$49.32
Net Interest Income ($USD Millions)	$16.36	$19.42
Noninterest Income ($USD Millions)	$1.90	$1.43
Noninterest Expense ($USD Millions)	$12.16	$13.40
Net Income ($USD Millions)	$4.53	$7.10
Diluted EPS ($USD)	$0.27	$0.42
NIM (FTE, %)	1.87%	1.98%
Efficiency Ratio (Adj FTE, %)	64.66%	60.79%
ROA (%)	0.48%	0.68%
ROE (%)	8.89%	12.24%

Balance sheet and funding KPIs

KPI	Q3 2024	Q4 2024
Deposits ($USD Billions)	$3.279	$3.358
Brokered Deposits ($USD Millions)	$425.9	$266.4
Estimated Uninsured Deposits (% of Total)	~27.8%	~30.0%
Borrowings ($USD Millions)	$438.8	$392.6
Loans ($USD Billions, Period End)	$3.021	$3.005
ACL / Loans (%)	0.97%	1.01%
Nonperforming Assets / Assets (%)	0.01%	0.00%
Tangible Common Equity Ratio (%)	5.90%	5.68%

Segment/portfolio detail (as of 12/31/2024)

Segment	Balance ($USD Thousands)
Multifamily	$543,472
Warehouse & Trucking Terminals	$266,551
Hotels	$263,203
Commercial Office	$162,598
Medical	$132,930
Retail	$245,534
Mixed Use	$101,080
Senior Care/Living	$104,894
Residential	$170,206
Land & Land Development	$93,777
Other	$285,097
Total CRE + C&D	$2,369,342

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Margin	2025 Outlook	No formal guidance	Management expects continued improvement with further rate cuts and asset repricing opportunities	Tone: Raised (qualitative)
Deposit Costs	Q1 2025	No formal guidance	Management sees “more improvement…naturally” in Q1 from rate cuts; pace dependent on asset repricing	Tone: Lower costs (qualitative)
Credit Quality	2025	No formal guidance	Expect moderate growth; portfolio remains strong across CRE and C&I	Maintained strong outlook
Tax Rate/Items	Q4 2024	N/A	Recorded $1.8M energy investment tax credit; reduced Q4 tax expense by ~$2.1M vs Q3	One-time benefit in Q4
Securities Repositioning	Q4 2024	N/A	Sold ~$11.8M AFS securities; realized loss $1.2M; earn-back ~2 years via loan reinvestment	Strategic shift; near-term headwind
Dividend	Q1 2025	$0.25 declared in Q3	Declared $0.25 for Q1 (payable Feb 19, 2025)	Maintained

Note: WTBA provided qualitative outlook; no formal numerical guidance ranges were issued in the quarter .

Earnings Call Themes & Trends

Topic	Q-2 (Q2 2024)	Q-1 (Q3 2024)	Current (Q4 2024)	Trend
Deposit Growth & Mix	Core deposits up YTD; large municipal deposit; competitive environment	Core deposits +3.5% ex temporary; proactive pricing post 50 bps Fed cut	Core deposits +8.4% QoQ ex brokered; brokered −$159.5M; deposit costs −27 bps	Improving mix/cost
Margin Trajectory	Margin stabilized; NII rising; swaps maturing a headwind	NIM +5 bps QoQ; expect benefit from rate cuts	NIM (FTE) +7 bps QoQ to 1.98%; expect continued improvement in 2025	Expanding
Credit Quality	No past dues in CRE; watch list ~0.03%	Very strong; 0 past dues in CRE; stress tests sound	0 past dues >30 days; watch list ~0.26%; NPAs/Assets 0.00%	Pristine
CRE Exposure (Office)	No significant downtown multi-tenant office; diversified CRE	No significant downtown multi-tenant office; moderate reprice risk manageable	Office 5.4% of loans; only 1.1% in Des Moines downtown; performing as expected	Stable, limited risk
Rate Environment & Outlook	Margin stabilization without needing cuts; swaps reset risk	Benefit from 50 bps cut; further cuts supportive	100 bps total reductions since September; ongoing benefit expected in 2025	Supportive
Minnesota Expansion	Owatonna build late Q4; facilities for relationship events	Owatonna delayed to Q1 2025; relationship-centric approach	Owatonna opened; strategy driving core deposit wins	Executed

Management Commentary

“We had an excellent fourth quarter…our best quarter during the previous 7 quarters…we forecasted that 2025 would be better and it will…accelerated by our tremendous deposit gathering success during 2024.” — CEO David Nelson .
“Credit quality remains a strength…0 past dues over 30 days, and our watch list represents only 0.26% of total loans…CRE portfolio continues to perform very well.” — CRO Harlee Olafson .
“Net income was $7.1 million…we sold approximately $12 million of investment securities and recorded a $1.2 million loss…earn-back ~2 years…recorded a $1.8 million income tax benefit…core deposit balances increased 15.8% in 2024 with an 8.3% increase in the fourth quarter.” — CFO Jane Funk .

Q&A Highlights

Provision methodology: qualitative factors increased for CRE to reflect potential DSCR pressure as loans reprice higher; no portfolio-specific deterioration identified .
Pipeline mix: activity skewed to C&I; limited new CRE projects near term but a “good pipeline” overall .
Expenses: Q4 elevated by incentive accruals and depreciation true‑ups from new buildings; December likely above run rate .
Noninterest income: trust services strength largely at a new run rate; estate fees recur .
Deposit costs and margin: further natural improvement expected in Q1; margin depends on asset repricing timing as well as deposit repricing .

Estimates Context

S&P Global consensus EPS and revenue estimates were unavailable due to data access limitations this cycle; as a result, we cannot present beat/miss analysis versus Street. We attempted to retrieve “Primary EPS Consensus Mean” and “Revenue Consensus Mean” but did not receive values. Where estimates are required by policy, default source is S&P Global; in this instance, consensus data was unavailable.

Key Takeaways for Investors

Sequential margin expansion with structurally lower funding costs: deposit mix shift and pricing cuts (−27 bps) and reduced FHLB advances lowered liabilities cost, lifting NIM (FTE) to 1.98% and NII to $19.4M; expect continued improvement in 2025 with further rate cuts and repricing — constructive for earnings momentum .
Balance sheet resilience: brokered deposits reduced ~$160M; borrowings down ~$46M; strong liquidity and diversified deposit base support continued funding cost improvement and risk reduction .
Credit remains a differentiator: NPAs/Assets 0.00%, watch list ~0.26%, ACL/Loans 1.01%; limited downtown office exposure (~1.1% of total loans in Des Moines CBD) and diversified CRE mitigate sector-specific stress risks .
One-time items: $1.2M realized securities loss to reposition into higher-earning loans (earn-back ~2 years) and $1.8M tax credit benefit in Q4; adjust models for nonrecurring drivers in Q4 reported EPS .
Operating efficiency trending better: efficiency ratio improved to 60.79% despite higher occupancy costs, suggesting operating leverage as margins recover; watch expense normalization post Q4 accruals .
Deposit franchise strengthening: Minnesota footprint and relationship-led approach are delivering core deposit growth, reducing reliance on wholesale funding; supports medium-term NIM recovery thesis .
Near-term trading: constructive setup on continued NIM improvement and pristine credit; monitor Q1 deposit cost trajectory and asset repricing pace for confirmation. Medium term: thesis centers on margin normalization, disciplined risk, and organic growth in core markets .

Sources: Q4 2024 8‑K and press release with full financial tables and earnings presentation ; Q4 2024 earnings call transcript ; Q3 2024 press release and call for prior-quarter context .

WEST BANCORPORATION INC (WTBA)·Q4 2024 Earnings Summary