WEST BANCORPORATION (WTBA)·Q4 2025 Earnings Summary

West Bancorporation Caps Strong 2025 with NIM Expansion and Pristine Credit Quality

January 29, 2026 · by Fintool AI Agent

West Bancorporation (NASDAQ: WTBA) delivered Q4 2025 results that capped a transformational year for the Iowa-based community bank. While headline EPS of $0.43 declined sequentially from Q3's $0.55, the quarter showcased meaningful margin expansion, continued efficiency gains, and the bank's hallmark: zero nonperforming assets .

Full-year 2025 net income reached $32.6 million, or $1.92 per diluted share—a 35% increase from $24.1 million ($1.42 EPS) in 2024. The improvement was driven by a 49 basis point year-over-year expansion in net interest margin and aggressive expense management .

Did West Bancorporation Beat Earnings?

Limited analyst coverage makes beat/miss analysis less relevant for this $378 million market cap regional bank. What matters more: the trajectory.

The Q4 EPS decline was driven by a one-time securities loss of $4.0 million pre-tax ($63.7 million of securities sold at a 2.90% weighted average yield) undertaken to improve balance sheet flexibility . Excluding this, core operating trends remained strong.

What Changed From Last Quarter?

The sequential comparison tells the real story:

Positives:

• Net interest income +$1.7M to $24.2M, driven by asset mix improvement and deposit cost reductions
• Deposits +$162M (+4.9%) with brokered deposits declining $50M as the bank replaced wholesale funding with core deposits
• Net interest margin +11 bps to 2.47% as deposit costs fell 28 bps quarter-over-quarter
• Efficiency ratio improved to 50.21% from 54.06%

Negatives:

• Securities loss of $4.0M from balance sheet repositioning
• Loans declined $7.2M (-0.2%) with construction loans decreasing, partially offset by commercial real estate growth
• Watch list loans increased from $38.7M to $52.2M, primarily due to one commercial real estate loan management believes is adequately collateralized

What Did Management Say?

CEO David Nelson struck a confident tone:

"We have had continuous improvement in earnings and key performance metrics throughout 2025 and finished the year very strong. Through proactive and strategic balance sheet management, we see opportunities for further improvements in 2026."

On credit quality—the bank's standout feature:

"We had no loans on nonaccrual status and no loans past due greater than 30 days at December 31, 2025. Our pristine credit quality is the result of our disciplined underwriting standards and steadfast approach to risk, which is consistently executed regardless of the economic or interest rate environment."

Credit Quality: A Differentiator

West Bancorporation's credit profile is exceptional for any bank environment:

The bank recorded zero credit loss expense for all of 2025, compared to $1.0 million in 2024 .

Balance Sheet and Capital Position

Capital ratios improved across the board, with the tangible common equity ratio up 74 bps year-over-year due to retained earnings growth and reduced accumulated other comprehensive loss .

How Did the Stock React?

The earnings were released after market close on January 29, 2026. Prior to the announcement, WTBA shares closed at $22.33, down 2.2% on the day. The stock trades at:

• 1.42x book value ($22.33 / $15.70)
• 11.6x trailing P/E based on full-year 2025 EPS of $1.92
• 4.5% dividend yield based on the $1.00 annual dividend

The stock has traded in a range of $17.31 to $24.27 over the past year, with the current price near the middle of that range.

Dividend Declared

The Board declared a quarterly dividend of $0.25 per share, payable February 25, 2026, to shareholders of record on February 11, 2026 . This maintains the $1.00 annual dividend paid in 2024 and 2025 .

Forward Catalysts

Management highlighted several opportunities for 2026:

1. Fixed-rate loan repricing — ~$400M of fixed-rate loans will reprice in 2026, with management expecting a 1.5%-2% yield pickup from current rates in the low 4s
2. Balance sheet repositioning — Proceeds from the $63.7M securities sale can be redeployed into higher-earning assets or used to repay higher-cost borrowings
3. NIM expansion runway — CFO expects margin "around 2.5%" to start the year with "room certainly to improve that throughout the year without any changes in the rate environment"
4. Geographic expansion + M&A opportunities — Minnesota markets benefiting from competitor disruption (Bremer merger, ALRS transaction) creating new prospecting opportunities

Key Risks

• Interest rate sensitivity — Variable-rate loans (39% of portfolio) will reprice lower if rates continue to decline
• Commercial real estate concentration — CRE represents ~64% of total loans, with hotels ($262M) and office ($139M) among the larger exposures
• Watch list increase — Watch list loans rose from $38.7M to $52.2M, with 70% related to the trucking industry, which has been "suffering through low freight and excess capacity"

Q&A Highlights

Analyst Nathan Race (Piper Sandler) pressed management on loan dynamics and margin outlook:

On loan payoffs: CFO Brad Winterbottom disclosed that one customer sold medical office buildings, resulting in over $50 million in payoffs. Additional payoffs came from customers selling or refinancing multifamily properties into the secondary market. Management expects "a little bit more of that in the first quarter" .

On fixed-rate repricing: Just under $400 million of fixed-rate loans will reprice in 2026, with an expected yield pickup of 1.5%-2% (currently in the low 4s) .

On NIM guidance: Jane Funk provided specific forward guidance: "Right now, kind of for December, end of year, January, beginning of year, we're probably running around 2.5% margin, and we think that there's room certainly to improve that throughout the year without any changes in the rate environment" .

On deposit outlook: Funk noted uncertainty around deposit growth due to public funds volatility—some municipalities raised bond proceeds that will flow out in 2026, potentially offsetting retail and commercial deposit growth .

On future securities repositioning: "We look at it on a regular basis... part of that depends on our liquidity and our needs for that cash. Where else can we deploy it?" No set plans for 2026, but ongoing evaluation continues .

On Minnesota M&A opportunities: Brad Peters highlighted that recent M&A activity from competitors (Bremer merger, ALRS transaction) is creating prospecting opportunities that should continue into 2026 .

The Bottom Line

West Bancorporation delivered a solid Q4 that capped a strong 2025. The headline EPS decline was driven by a strategic securities sale, while underlying trends—NIM expansion, efficiency gains, and pristine credit quality—remained intact. With no bad loans, improving capital ratios, and a 4.5% dividend yield, WTBA offers a defensive profile in an uncertain rate environment. The key question for 2026: Can management continue to expand margins as the Fed cutting cycle matures?

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West Bancorporation will discuss results on a conference call at 2:00 PM CT on January 29, 2026. Dial 800-715-9871, Conference ID: 7846129 .

Related: WTBA Company Profile | Q3 2025 Earnings | Latest Transcript