WTBA

West Bancorporation is a small, plain-vanilla Iowa/Minnesota commercial bank in the middle of a genuine earnings recovery. The engine is net interest income, which the MD&A shows jumping from $69.0M (FY2023) to $71.4M (FY2024) to $89.0M (FY2025) on a GAAP basis — a ~25% YoY expansion that flowed straight through to net income of $32.6M (+35.4%) and diluted EPS of $1.92 (+35.2%). Credit looks clean and well-reserved: the allowance for credit losses sits at $30.5M, or 1.02% of loans, essentially flat versus 1.01% a year ago, so the earnings jump is margin-driven rather than a reserve release. Equity grew 16.7% to $266M, cash nearly doubled to $471M, and the 12.2% ROE is respectable for a bank this size.

The caution is twofold. First, this is a recovery, not a new high — net income is still well below the $49.6M (2021) and $46.4M (2022) peaks, and it collapsed to $24.1M in both 2023 and 2024 when rising funding costs crushed the margin. That history shows how rate-sensitive this franchise is; the same NIM that is lifting results now can reverse. Second, valuation already gives credit for the rebound. At $27.09 the stock trades at 14.1x FY2025 EPS and roughly 1.7x book (market cap ~$458M against $266M of equity) — a full multiple for a 12% ROE, single-state bank. The ~$1.00/share dividend (payout near 52% of earnings) offers a ~3.7% yield and some support, but there is no buyback and share count is essentially flat, so returns lean on the operating story.