West Bancorporation's 2025Q2 Earnings Call: Diverging Views on Loan and Deposit Growth Strategies

Loan growth and deposit growth opportunities, digital banking strategy and loan growth, loan pipeline and activity, deposit growth opportunities, and loan growth expectations are the key contradictions discussed in West Bancorporation's latest 2025Q2 earnings call.



Loan and Deposit Growth:
- West Bancorporation's loan outstandings were slightly down, with $50 million decrease in the second quarter, while core deposit balances increased by approximately $195 million.
- The loan decline was due to larger payoffs from asset sales and refinancing, while deposit growth was driven by a municipal customer's bond offering for a construction project.

Strong Earnings and Margin Improvement:
- The company reported net income of $8 million in the second quarter, compared to $5.2 million in the same period last year.
- This improvement was attributed to asset repricing, leading to better yields, and deposit growth reducing brokered funding.

Credit Quality and Asset Management:
- West Bancorporation maintained strong credit quality, with one small 30-day past due loan now current, and no other assets, real estate, doubtful accounts, nonaccruals, or substandard loans.
- This was achieved through adherence to underwriting disciplines and the focus on building strong relationships with customers who have strong cash flows and varied income sources.

Deposit Gathering and Operational Strategy:
- Despite decreasing loan outstandings, West Bancorporation focused on deposit gathering and increasing core deposit balances, with a strategic emphasis on attracting new depositors.
- This was part of their overall strategy to enhance their balance sheet and remain selective in pursuing new loan opportunities in a competitive market.