West Bancorporation Lifts Profit as Lending Margin Expands
The bank earned $0.64 a diluted share in the second quarter, up from $0.47 a year earlier.
West Bancorporation (WTBA), the bank holding company, reported that second-quarter net income rose 38.8% from a year earlier as a wider lending margin lifted interest income. Profit reached $11.1 million, compared with $8.0 million a year earlier and $10.6 million in the first quarter.
The quarter extended a four-quarter expansion in the fully tax-equivalent net interest margin, which climbed to 2.69% from 2.27% a year earlier. The measure had increased in each intervening quarter, reaching 2.59% in the first three months of 2026.
Net interest income increased to $25.5 million from $21.4 million a year earlier and $24.4 million sequentially. The year-over-year gain came primarily from improved spreads because average loans were roughly unchanged, while period-end loans declined 0.5%.
Lower funding costs drove much of the margin improvement. Deposit costs fell 46 basis points after reductions in the federal-funds rate, and quarterly deposit interest expense declined to $19.2 million from $22.7 million a year earlier. Deposits excluding brokered funds rose 1.6%, while brokered deposits fell by $97.8 million.
The loan portfolio shifted toward commercial real estate as completed construction projects moved to permanent financing. Construction, land and development loans fell to $333.8 million from $459.0 million a year earlier, while commercial-real-estate loans increased to $1.98 billion from $1.88 billion.
Operating returns and capital also strengthened. The efficiency ratio improved to 48.78% from 56.45% a year earlier, while return on average assets rose to 1.10% from 0.80%. The tangible common-equity ratio increased to 6.97% from 5.94%.
West Bancorporation recorded no nonaccrual loans or credit-loss expense, though substandard loans increased to $14.4 million from zero at the end of March and included two commercial and commercial-real-estate borrowers. Watch-list loans fell to $7.1 million from $41.3 million, primarily because of about $32.2 million in payoffs.
The board raised the quarterly dividend by one cent to a company record of $0.26 a share, extending more of the earnings improvement to shareholders as capital ratios strengthened.