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In This Article:
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Net Income: $7.1 million in Q4 2024, compared to $6 million in Q3 2024 and $4.5 million in Q4 2023.
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Annual Net Income: $24.1 million for both 2024 and 2023.
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Provision for Credit Losses: $1 million in Q4 2024.
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Investment Securities Loss: $1.2 million loss from selling $12 million of investment securities in December.
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Income Tax Benefit: $1.8 million from an energy-related investment tax credit.
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Core Deposit Growth: Increased 15.8% in 2024, with an 8.3% increase in Q4.
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Reduction in Wholesale Funding: Over $200 million reduction in Q4 2024.
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Net Interest Margin: Increased by 7 basis points in Q4 compared to Q3.
Release Date: January 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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West Bancorp Inc (NASDAQ:WTBA) reported its best earnings quarter in the past seven quarters, indicating strong financial performance.
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The company successfully gathered deposits in 2024, allowing for a reduction in expensive wholesale deposits.
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Credit quality remains strong with zero past dues over 30 days and a minimal watch list representing only 0.26% of total loans.
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Core deposit balances increased by 15.8% in 2024, with an 8.3% increase in the fourth quarter, reflecting effective deposit relationship strategies.
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Net interest margin increased by 7 basis points in the fourth quarter, supported by a reduction in the Fed rate and lower deposit rates.
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The company recorded a $1.2 million loss from selling approximately $12 million of investment securities.
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Provision for credit losses was $1 million in the fourth quarter, due to an increase in certain qualitative factors, indicating potential future risks.
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New credit opportunities have slowed, and the company is being selective in its focus, which may limit growth.
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Interest rates could affect the level of new projects and expansions, potentially impacting future growth.
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The company faces challenges with significant vacancies in office properties within its markets.
Q: Can you elaborate on the qualitative factors affecting the provision for credit losses? A: Jane Funk, CFO, explained that the provision was due to a broad-based acknowledgment of potential impacts on debt service coverage ratios as loans reprice higher, affecting property economics and values, rather than specific portfolio issues.
Q: Where are you seeing the most activity in loan pipelines? A: Harlee Olafson, Chief Risk Officer, noted that most activity is in the C&I (Commercial and Industrial) sector, with business purchases and relationship-based C&I opportunities, while new commercial real estate projects are limited.
