West Bancorporation

Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the West Bank Corporation Inc. First Q 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press card followed with the number one on your telephone keypad. If you would like to withdraw your question, press R1 again. Thank you. I would now like to turn the call over to Jane Funk, CFO. Please go ahead.

Thank you. Good afternoon, everybody. I'm Jane Funk, the CFO of West Bank Corporation, and I'd like to welcome the participants on the call today, and thank you for joining us. With me today are Dave Nelson, our CEO, Brad Winterbottom, Bank President, Carly Olson, Chief Risk Officer, and Brad Peters, Minnesota Group President. I'll now read the fair disclosure statement. During today's conference call, we may make projections or other forward-looking statements within the meeting of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 regarding future events or the future financial performance of the company. We caution that such statements are predictions and that actual results may differ materially. Please see the board listing statement disclosure in our 2025 first quarter earnings release for more information about risks and uncertainties, which may affect us. The information we will provide today is accurate as of March 21st, 2025, and we undertake no duty to update the information. With that, I'll turn it over to Dave Nelson.

Thank you, Jane, and good afternoon, everyone. Thank you for joining us. We appreciate your interest in West Bank. And we have good news to share. Our financial improvement is underway. Our margin is our end driver, and we are experiencing improvement. The first quarter earnings were 35% higher than first quarter last year. Our credit quality remains excellent with no problem loans. We had biggest core deposit growth last year. And this year, first quarter 2025, rather flat so far, both loan and deposit growth. Our pipeline for both is good. We declared a 25% per share dividend, payable May 21st to shareholders of record as of May 7th. Those are the end of my prepared comments other than thanking you again for joining us. With that, I'd like to turn the call over to Harley Olison. Thank you, Dave. Credit quality remains strong at West Bank. Quarter end, we had one pass through over 30 days in the amount of $180,000. This loan is on non-accrual. Since quarter end, that loan has been paid in full. So now we have no non-accruals, no OREO, and no adversely classified assets. Our commercial real estate portfolio continues to perform well. Office property is deteriorating. There is significant office property that is vacant or nearly vacant. We do not have any property that is currently not performing, but with the amount of vacant property, our customers who have multiple tenants with pending lease expirations will not be dealing from a position of strength. Our C&I portfolio is seasoned and strong. We continue to receive year-end financial information on our customers, and we do see less profitability than in previous years. Uncertainty in the direction of the economy does concern us and our customers. Prices for imported products and possible supply interruptions could cause production problems and earnings distress. The uncommon strength of our loan portfolio is due to doing business with customers, with proven management, good balance sheets, and strong and diverse payment abilities. That has not changed. Though we do face potential changes in the economy, our commitment to our underwriting disciplines, and our conservative philosophy, we expect our credit portfolio to remain very strong. Part of our strength also stems from the markets we serve. All communities have different strengths that are currently thriving. We have a seasoned team of bankers that continue to prospect for comprehensive banking relationships and provide exceptional service to their customers to obtain even more wallet share. I am available for questions after our prepared remarks. I now turn it over to Brad Winterbottom, our bank president. Thank you. Before the quarter ended March 31, 25, our loan portfolio was relatively flat when compared to year end. Outstandings were just over $3 billion. Several events took place during the first quarter that impacted our portfolio size. We experienced approximately $100 million in payoffs from asset sale and refinance activity. The majority of those assets were priced below the current rate environment. I'm pleased to report that the refinance activity was planned. We replaced those assets with quality new assets at better rates. These assets represent approximately 50% T&I business and 50% commercial real estate transaction. Deposit gathering sales efforts continue to be an emphasis in the markets we serve. During the first quarter, deposits decreased slightly, primarily the result of ordinary cash flow fluctuations from our customers, not a lot of any relationships. We remain selective in obtaining new loan opportunities, and those opportunities are less than in previous years. We remain confident in our ability to create and maintain positive relationships with our customers and prospects that we're pursuing in a highly competitive market that we serve in all markets. That's the end of my comments. I'd like to now turn it over to Mr. Brad Peters. Thanks, Brad. Good afternoon, everyone. I'm going to provide you a brief update on our Minnesota banks. Our customers have been cautious with the economic uncertainty in the marketplace. We continue to work closely with our clients and have increased our calling efforts to our CNI base of customers. We do not have specific production goals for our bankers, but instead measure our bankers on the right activities that will drive results. Our focus is on CNI prospects with significant deposit balances. We have been successful in winning these opportunities. We have a seasoned group of bankers that have proven this strategy to be effective. We are also targeting high-value retail deposits. Our bankers have been successful in winning the retail deposits of our business owners and key executives. We are also attracting new deposits from high-earning individuals in our communities. Our principal bankers provide superior service that sets us apart from the competition. Each of our Minnesota regional centers has seen significant retail deposit growth. All of our building construction projects are now complete. We design each of our facilities with well-appointed entertainment areas that allow our teams to host client and prospect events and quality small group gatherings. These unique facilities align perfectly with our strategy of building business based on strong relationships. Our team has embraced this and have done an outstanding job of leveraging our buildings to grow our business. Those are the end of my comments. I will now turn the call back over to Jane.