West Bancorporation Q4 Net Income $7.4M, NIM Rises 49bps
West Bancorporation's Q4 net income was $7.4 million, down from $9.3 million in Q3 and above last year's $7.1 million, for a full-year net income of $32.6 million, up 35%. Net interest margin rose 49 basis points year-over-year to 2.5%, and a securities repositioning loss booked to enhance balance sheet flexibility.
1. Strong Earnings Growth and Core Trends
West Bancorporation reported net income of $7.4 million in the fourth quarter, down from $9.3 million in Q3 2025 but up from $7.1 million a year earlier. Full-year net income rose 35% to $32.6 million versus $24.1 million in 2024. Management highlighted improving core earnings trends, noting that excluding a securities portfolio loss of approximately $4 million, Q4 net income would have exceeded $10 million. CEO Dave Nelson described the company as positioned for “a special year” in 2026 based on these results and trend momentum.
2. Expanding Net Interest Margin and Lower Deposit Costs
Chief Financial Officer Jane Funk said net interest margin expanded by 11 basis points sequentially and 49 basis points year-over-year, reaching roughly 2.5% in late 2025. Net interest income benefited from this margin growth, while the cost of deposits declined 28 basis points from Q3 and 64 basis points year-over-year. Funk indicated that management expects further margin improvement through 2026 even without additional rate changes.
3. Robust Deposit Growth with Funding Mix Dynamics
Deposit balances increased by $162 million during Q4, driven by gains in core commercial, retail, and public fund deposits. Excluding brokered funds, core deposits rose by $212 million in the quarter and $223 million for the full year. Management cautioned that a portion of growth stemmed from public funds tied to municipal bond offerings, anticipating some outflows in 2026 that could introduce normal volatility in deposit balances.
4. Loan Portfolio Activity and Pristine Credit Quality
Total loans outstanding edged below $3.0 billion in Q4, reflecting several large payoffs—over $50 million from medical office building dispositions—and refinancing activity that replaced lower-yielding assets with quality new loans at higher rates. The bank has approximately $400 million of fixed-rate loans repricing in 2026, with an expected yield pickup of 1.5%–2%. Credit metrics remain pristine: no past dues over 30 days, no nonaccruals, no substandard loans, and no other real estate owned. The watch list stands at a low 1.7% of total loans, primarily related to the trucking sector. No provision for credit losses was required in the quarter.