West Bancorporation Reports Mixed Q3 Results, Assets and Deposits Grow Amid Rising Interest Expenses

West Bancorporation, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, showing a mixed performance compared to the previous fiscal period. As of September 30, 2024, the company had total assets of $3.99 billion, an increase from $3.83 billion at the end of 2023. Total deposits rose significantly to $3.28 billion, up from $2.97 billion, reflecting a 10.2% increase during the first nine months of 2024.

For the third quarter, net income was $5.95 million, slightly up from $5.91 million in the same period of 2023. However, net income for the nine months decreased to $16.95 million from $19.61 million year-over-year. Basic earnings per share remained stable at $0.35 for the third quarter, while diluted earnings per share for the nine months fell to $1.00 from $1.17.

Interest income from loans increased to $42.50 million for the third quarter, compared to $36.76 million in 2023, contributing to a total interest income of $48.61 million, up from $41.09 million. However, total interest expense also rose to $30.65 million from $24.46 million, leading to a slight increase in net interest income to $17.96 million from $16.63 million. For the nine months, net interest income declined by 1.4% to $51.94 million, primarily due to increased interest expenses on deposits.

Noninterest income for the third quarter decreased to $2.36 million from $2.82 million, attributed to lower loan swap fees. Noninterest expenses increased to $12.89 million from $11.91 million, driven by higher occupancy, technology, and FDIC insurance costs.

The allowance for credit losses (ACL) increased to $29.42 million as of September 30, 2024, from $28.15 million a year earlier, reflecting management's assessment of potential loan losses. The ratio of nonperforming loans to total assets remained stable at 0.01%.

Strategically, West Bancorporation has maintained a focus on managing interest rate risk through various hedging strategies, including interest rate swaps. The company’s capital ratios indicate a strong capital position, with Total Capital to Risk-Weighted Assets at 11.95% as of September 30, 2024, slightly up from 11.88% at the end of 2023.

Overall, while West Bancorporation experienced growth in assets and deposits, profitability metrics showed some decline, particularly in net income for the nine-month period, reflecting the challenges of rising interest expenses and competitive market conditions.