West Bancorporation, Inc. (NASDAQ:WTBA) Q3 2023 Earnings Call Transcript

West Bancorporation, Inc. (NASDAQ:WTBA) Q3 2023 Earnings Call Transcript: October 26, 2023

West Bancorporation, Inc. exceeds earnings expectations, reporting an EPS of $0.35 compared to the expected $0.31.

Operator: Greetings! I am Chris, your conference operator for today. I extend a warm welcome to all participants joining us for the West Bancorporation, Inc. Q3 Earnings Call. To ensure clarity, all lines have been muted to minimize background noise. Following the speaker’s remarks, a question-and-answer session will take place. [Operator Instructions] Thank you. Let’s begin with Jane Funk, our Chief Financial Officer.

Jane Funk: Thank you. We appreciate your presence on this earnings call and your interest in our company. I’m Jane Funk, the CFO. With me are Dave Nelson, our CEO; Harlee Olafson, Chief Risk Officer; Brad Winterbottom, our Bank President; and Brad Peters, our Minnesota Group President. During today’s conference call, we may share projections or forward-looking statements within the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, regarding future events or the financial performance of the Company. It’s important to note that such statements are predictions and actual results may vary. For a comprehensive understanding of the risks and uncertainties that may impact us, please refer to the forward-looking statement disclosures in our 2023 third quarter earnings release.

The information we provide today is accurate as of September 30, 2023, and we are under no obligation to update it. Now, I’ll pass the baton to Dave Nelson, our CEO.

David Nelson: Thank you, Jane, and welcome everyone. We are grateful for your presence today and your interest in our Company. Our third quarter unfolded as anticipated, and we will provide more insights regarding our credit quality, growth, and margin. Our credit quality remains exceptionally robust, with no problematic or delinquent loans. In terms of growth, the Federal Reserve’s actions seem to be effectively curbing the demand for loan expansion, but the communities we serve are faring well. Year-to-date, our loan growth stands at approximately 4%, and we boast a healthy loan and deposit pipeline. Our margin situation aligns with industry trends. To attract deposits, we have offered higher rates, and we may have reached the pinnacle. In 2020 and 2021, when our sector witnessed a surge in liquidity due to federal deficit spending, we utilized that liquidity to make loans and investments, primarily within a five-year duration.

Consequently, these assets will readjust to prevailing market rates in 2025 and 2026. We anticipate continued temporary margin compression throughout 2024, which will progressively improve in 2025 and 2026. We have declared a dividend of $0.25 per share, scheduled for payment on November 22, to shareholders of record as of November 8. I will now hand over the reins to our Chief Risk Officer, Harlee Olafson, for his remarks.

To access the Q&A session, click here.