West Bancorporation Extends Margin Expansion

The Tip Desk · November 10, 2026 · 3 min read

Tax-equivalent net interest income reached $26.4 million in the third quarter as the margin widened 8 bps to 2.77%.

West Bancorporation, Inc. (WTBA), parent of West Bank, reported third-quarter 2026 net income of $11.6 million, or $0.67 a share, up from $11.1 million, or $0.64 a share, in the second quarter.

The Des Moines, Iowa community bank’s tax-equivalent net interest margin expanded 8 bps to 2.77% in the third quarter from 2.69% in the second quarter, after a 10 bps expansion to 2.69% in the second quarter from 2.59% in the first quarter. Net interest income rose to $26.4 million from $25.5 million.

Loan yields increased 8 bps to 5.73% while the average loan balance declined $44.1 million. The cost of interest-bearing deposits rose 3 bps to 2.76%. The company said the comparison of asset yields and deposit costs was affected by a 25 bps increase in the federal funds target rate in September 2026.

Average interest-bearing deposits fell $36.4 million. Average FHLB advances declined $32.1 million as matured advances were not renewed. Period-end FHLB advances stood at $210.0 million.

Loan balances increased $45.1 million, or 1.5%, to $2.995 billion at September 30, 2026, reversing a $41.5 million, or 1.4%, decline at June 30. Commercial real estate loans rose to $2.069 billion. Construction, land and land development loans were $289.6 million.

Deposits excluding brokered deposits decreased $65.8 million, or 2.0%, in the third quarter, after a $15.9 million, or 0.5%, increase in the second quarter. Brokered deposits were reduced by $8.5 million. Total deposits were $3.271 billion. Estimated uninsured deposits, excluding reciprocal-network, brokered and state-protected public funds, accounted for about 28.5% of total deposits.

The efficiency ratio improved to 47.81% from 48.78%, which the company attributed primarily to higher tax-equivalent net interest income. Quarterly return on average equity increased to 16.41% from 16.21%. Return on average assets was 1.16%.

No credit loss expense on loans was recorded in either the third or second quarter. The allowance for credit losses to total loans was 1.02% at September 30, compared with 1.03% at June 30. There were no nonaccrual loans. Substandard loans decreased to $13.8 million from $14.4 million; the company said the balances consisted of commercial and commercial real estate loans to two borrowers it believes are sufficiently collateralized. Watch-list loans decreased from $7.1 million to $6.7 million. The company said the decreases were primarily due to principal payments and marked a ninth consecutive quarter-end with no loans more than 30 days past due.

The tangible common equity ratio was 6.98% at September 30, compared with 6.97% at June 30. Consolidated total risk-based capital was 13.43%.

The board declared a regular quarterly dividend of $0.26 a share on October 28, matching the record $0.26 dividend declared in the second quarter. The dividend is payable November 25, 2026, to stockholders of record November 11.

President and Chief Executive Officer David Nelson said net income for the first nine months of 2026 increased 32% compared with the first nine months of 2025, and that annualized return on average equity improved to 16.18% for the nine months ended September 30, 2026, from 14.27% a year earlier. He said the company is producing stronger profitability through margin expansion and expense discipline, and that balance-sheet strategies have reduced wholesale funding and produced steady growth in net interest income.