West Bancorporation reports Q2 EPS 35c vs 75c last year

The efficiency ratio was 62.83 percent for the second quarter of 2023, compared to 55.34 percent for the first quarter of 2023. The increase in the efficiency ratio is primarily the result of the decline in tax equivalent net interest income and an increase in salaries and employee benefits. Net interest margin, on a fully tax-equivalent basis, was 2.02 percent for the second quarter of 2023, compared to 2.23 percent for the first quarter of 2023. Net interest income for the second quarter of 2023 was $17.3 million, compared to $18.7 million for the first quarter of 2023. David Nelson, President and Chief Executive Officer of the Company, commented, “The unprecedented size and pace of the Federal Reserve’s interest rate increases in the last year and the resulting inverted yield curve have had a dramatic impact on our deposit base and cost of funds. Our deposit and funding mix has changed as depositors react to intense short-term rate competition and utilize accumulated cash for business operations. The resulting increase in our cost of funds has outpaced the repricing benefits in loans and investments, leading to a decline in our net interest income and net interest margin.” David Nelson added, “Our credit quality continues to be pristine. We had one loan past due more than 30 days at the end of the second quarter. This is the first time in two years that we have had a loan more than 30 days past due at quarter-end. We have one loan on nonaccrual status and a total of $536 thousand in loans on our watch and classified loan list. We remain diligent in monitoring and managing our credit risk in light of future economic uncertainty and the volatile interest rate environment. Our capital position is strong and we remain focused on delivering high quality services and products through our successful relationship based business model.”