West Bancorporation's Q1 2025: Navigating Contradictions in Interest Margins, Loan Growth, and Strategic Direction

Interest margin expectations, loan growth perspective, deposit costs and interest margin, strategic review and business model changes, deposit gathering efforts and costs are the key contradictions discussed in West Bancorporation's latest 2025Q1 earnings call.



Profitability and Earnings Increase:
- West Bancorporation reported net income of $12.7 million for Q1 2025, marking a year-over-year increase of 86%.
- This was driven by improvements in asset quality, lower provisions for loan losses, and growth in interest income.

Loan Growth and Diversification:
- Total loans increased by 9.9% year-over-year, reaching $4.8 billion.
- The growth was fueled by increased lending in commercial banking and a diversified loan portfolio, including growth in commercial real estate and financing for small businesses.

Deposit Expansion:
- Deposit balances grew by 10.5% year-over-year to $5.2 billion.
- This was attributed to expanding relationships with commercial, municipal, and non-profit clients, as well as increased demand for deposit products.

Non-Performing Assets Reduction:
- Non-performing assets as a percentage of total assets decreased to 0.49%, down from 0.61% a year ago.
- This improvement was due to the company's efforts in managing delinquent loans and to the overall strengthening of the economic environment.