[Management View]
West Bancorporation reported a strong quarter with a 16% sequential increase in net income and a 55% YoY increase. Management attributed the growth to improved net interest margin, disciplined credit practices, and loan repricing opportunities. The company emphasized its strategic focus on organic loan growth and selective deposit gathering amid competitive pressures.

[Outlook]
Management expects mid-single-digit loan growth supported by deposit gathering and cash flow from the securities portfolio, with potential short-term use of wholesale or brokered deposits. Loan repricing opportunities remain significant, with $550 million in fixed-rate loans eligible to reprice over the next 12 months. The effective tax rate is projected to return to historical levels after a temporary reduction due to an energy investment tax credit.

[Financial Performance]
- Net income: $9.3 million (+16% QoQ, +55% YoY)
- Net interest margin: Improved by 9 basis points QoQ
- Loan yield: 5.66% (up from 5.59% QoQ and 5.52% in Q1 2025)
- Deposit cost: Declined by 2 basis points QoQ
- Core deposits: Decreased by $82 million due to anticipated public fund outflows
- Credit quality: No past dues, nonaccruals, or substandard loans
- Dividend: $0.25 per share declared, payable November 19, 2025

[Q&A Highlights]
Question 1: Where does the loan pipeline stand, and what is the outlook for growth into 2026?
Answer: Bradley Peters noted that while the Minnesota loan pipeline is not as robust as in the past due to a more selective credit approach, mid-single-digit growth is achievable.

Question 2: Can mid-single-digit loan growth be funded through deposit gathering and securities portfolio cash flow?
Answer: Jane Funk confirmed that the objective is to fund growth through deposit gathering and securities portfolio cash flow. However, short-term wholesale or brokered deposits may be used to supplement cash flows as needed.

Question 3: What are the margin tailwinds and deposit beta assumptions with potential Fed rate cuts?
Answer: Jane Funk highlighted $550 million in fixed-rate loans eligible for repricing, with a weighted average rate of 4.86%, providing room for margin improvement. Deposit beta may be less aggressive due to competitive pricing pressures.

Question 4: What is the expected tax rate going forward?
Answer: Jane Funk stated the tax rate is expected to return to historical levels, similar to the first half of 2025, following the temporary reduction in Q3 due to an energy investment tax credit.

Question 5: Are there any strategic priorities for capital management or deployment?
Answer: Jane Funk emphasized organic growth through good loan opportunities as the primary focus, with no specific plans for additional location build-outs or team expansions.

Question 6: Will distress in the farming community impact West Banc?
Answer: Harlee Olafson explained that while lower farm income may indirectly affect some customers, the bank is largely insulated due to its limited exposure to ag-specific manufacturers.

Question 7: How has the Minnesota growth venture performed?
Answer: Bradley Peters stated that Minnesota operations have exceeded expectations, contributing roughly one-third of total company activities and delivering reasonable growth across all markets.

[Sentiment Analysis]
Analysts expressed optimism about the company's growth trajectory, particularly its margin tailwinds and disciplined credit practices. Management maintained a confident tone, emphasizing strong credit quality, strategic loan growth, and effective deposit management.

[Quarterly Comparison]
| Metric | Q3 2025 | Q2 2025 | Q3 2024 |
|-----------------------|---------|---------|---------|
| Net Income ($M) | 9.3 | 8.0 | 6.0 |
| Net Interest Margin | +9 bps | - | - |
| Loan Yield (%) | 5.66 | 5.59 | 5.52 |
| Deposit Cost (bps) | -2 | - | - |
| Core Deposits ($M) | -82 | - | - |

[Risks and Concerns]
1. Core deposit balances declined by $82 million due to expected public fund outflows, which may impact liquidity.
2. Loan pipeline in Minnesota is less robust, reflecting a selective credit approach that could constrain growth.
3. Competitive pricing pressures on deposits may limit deposit beta improvements during future Fed rate cuts.

[Final Takeaway]
West Bancorporation delivered a strong Q3 2025 performance, driven by margin expansion, disciplined credit practices, and strategic loan repricing. While core deposits declined and competitive pressures persist, management remains confident in achieving mid-single-digit loan growth through deposit gathering and securities portfolio cash flow. The Minnesota operations have exceeded expectations, contributing significantly to the company's overall performance. Investors should monitor deposit trends and competitive dynamics as potential risks to future growth.