What changed in this filing

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Item 1. Financial Statements

2022-04-28 compared with 2021-10-28 · 120 added, 173 removed, 769 unchanged (28% of the section changed)

3 unchanged sentences

Consolidated Balance Sheet

(in thousands, except share and per share data) September 30, 2021 December 31, 2020

(in thousands, except share and per share data) March 31, 2022 December 31, 2021

Cash and due from banks $ 21,896 $ 17,555

29 unchanged sentences

authorized 50,000,000 shares;

no shares issued and outstanding at September 30, 2021 and December 31, 2020

no shares issued and outstanding at March 31, 2022 and December 31, 2021

Common stock, no par value;

authorized 50,000,000 shares;

and 16,469,272 shares issued and outstanding at September 30, 2021

and 16,554,846 shares issued and outstanding at March 31, 2022

and December 31, 2021, respectively

8 unchanged sentences

Consolidated Statements of Income

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands, except per share data) 2022 2021

21 unchanged sentences

Increase in cash value of bank-owned life insurance 227 220

Loan swap fees — 983 42 1,572

Realized securities gains, net — 4

18 unchanged sentences

and Subsidiary

Consolidated Statements of Comprehensive Income

Three Months Ended September 30, Nine Months Ended September 30,

Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended March 31,

(in thousands) 2022 2021

2 unchanged sentences

Unrealized gains (losses) on securities:

Unrealized holding gains (losses) arising during the period ( 6,172 ) 357 ( 10,462 ) 6,171

Unrealized holding losses arising during the period ( 54,595 ) ( 8,338 )

reclassification adjustment for net gains realized in net income — ( 4 )

Income tax (expense) benefit 1,558 ( 50 ) 2,649 ( 1,522 )

Other comprehensive income (loss) on securities ( 4,625 ) 151 ( 7,864 ) 4,568

Income tax benefit 13,813 2,102

Other comprehensive loss on securities ( 40,782 ) ( 6,240 )

Unrealized gains (losses) on derivatives:

Unrealized holding gains (losses) arising during the period 359 256 5,801 ( 23,912 )

reclassification adjustment for net losses on derivatives realized in net income 1,105 1,405 7,173 2,768

reclassification adjustment for amortization of derivative termination costs

Income tax (expense) benefit ( 369 ) ( 415 ) ( 3,269 ) 5,277

Other comprehensive income (loss) on derivatives 1,095 1,246 9,705 ( 15,836 )

Unrealized holding gains arising during the period 10,536 7,763

reclassification adjustment for net losses realized in net income 1,045 4,970

Income tax expense ( 2,930 ) ( 3,208 )

Other comprehensive income on derivatives 8,651 9,525

Total other comprehensive income (loss) ( 32,131 ) 3,285

Comprehensive income $ 9,176 $ 9,497 $ 39,538 $ 12,890

See Notes to Consolidated Financial Statements.

West Bancorporation, Inc.

and Subsidiary

Consolidated Statements of Stockholders' Equity

(in thousands, except share and per share data)

Three Months Ended September 30, 2021

Additional Other

Preferred Common Stock Paid-In Retained Comprehensive

Stock Shares Amount Capital Earnings Income (Loss) Total

Balance, June 30, 2021 $ — 16,554,846 $ 3,000 $ 28,888 $ 221,113 $ ( 6,475 ) $ 246,526

— — — — 12,706 — 12,706

Other comprehensive loss, net of tax — — — — — ( 3,530 ) ( 3,530 )

Cash dividends declared, $ 0.24 per common share

— — — — ( 3,974 ) — ( 3,974 )

Stock-based compensation costs

— — — 648 — — 648

Balance, September 30, 2021 $ — 16,554,846 $ 3,000 $ 29,536 $ 229,845 $ ( 10,005 ) $ 252,376

Three Months Ended September 30, 2020

Additional Other

Preferred Common Stock Paid-In Retained Comprehensive

Stock Shares Amount Capital Earnings Income (Loss) Total

Balance, June 30, 2020 $ — 16,469,272 $ 3,000 $ 27,632 $ 193,981 $ ( 15,926 ) $ 208,687

Net income — — — — 8,100 — 8,100

Other comprehensive income, net of tax — — — — — 1,397 1,397

Cash dividends declared, $ 0.21 per common share

— — — — ( 3,459 ) — ( 3,459 )

Stock-based compensation costs

— — — 595 — — 595

Balance, September 30, 2020 $ — 16,469,272 $ 3,000 $ 28,227 $ 198,622 $ ( 14,529 ) $ 215,320

Comprehensive income (loss) $ ( 18,947 ) $ 15,037

See Notes to Consolidated Financial Statements.

3 unchanged sentences

(in thousands, except share and per share data)

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

Additional Other

3 unchanged sentences

— — — — 13,184 — 13,184

Other comprehensive income, net of tax

Other comprehensive loss, net of tax

— — — — — ( 32,131 ) ( 32,131 )

5 unchanged sentences

— 76,567 — ( 1,519 ) — — ( 1,519 )

Balance, September 30, 2021 $ — 16,554,846 $ 3,000 $ 29,536 $ 229,845 $ ( 10,005 ) $ 252,376

Nine Months Ended September 30, 2020

Balance, March 31, 2022 $ — 16,631,413 $ 3,000 $ 29,421 $ 246,827 $ ( 42,768 ) $ 236,480

Three Months Ended March 31, 2021

Additional Other

3 unchanged sentences

— — — — 11,752 — 11,752

Other comprehensive loss, net of tax — — — — — ( 11,268 ) ( 11,268 )

Other comprehensive income, net of tax — — — — — 3,285 3,285

Cash dividends declared, $ 0.22 per common share

4 unchanged sentences

— 71,109 — ( 1,213 ) — — ( 1,213 )

Balance, September 30, 2020 $ — 16,469,272 $ 3,000 $ 28,227 $ 198,622 $ ( 14,529 ) $ 215,320

Balance, March 31, 2021 $ — 16,540,381 $ 3,000 $ 28,243 $ 211,847 $ ( 8,561 ) $ 234,529

See Notes to Consolidated Financial Statements.

2 unchanged sentences

Consolidated Statements of Cash Flows

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2022 2021

8 unchanged sentences

Depreciation 307 373

(Benefit) provision for deferred income taxes 380 ( 1,693 )

Provision for deferred income taxes 824 446

Change in assets and liabilities:

10 unchanged sentences

Net increase in loans ( 29,161 ) ( 23,352 )

Purchase of bank-owned life insurance — ( 7,200 )

Purchases of premises and equipment ( 6,951 ) ( 963 )

1 unchanged sentence

Cash Flows from Financing Activities:

Net increase in deposits 35,929 282,024

Net increase (decrease) in federal funds purchased 34,005 ( 310 )

Net decrease in Federal Home Loan Bank advances ( 50,000 ) ( 5,000 )

Net increase (decrease) in deposits 75,247 ( 18,901 )

Net decrease in federal funds purchased ( 2,880 ) ( 1,315 )

Principal payments on long-term debt ( 35 ) ( 639 )

1 unchanged sentence

Restricted stock units withheld for payroll taxes ( 1,519 ) ( 1,213 )

Net cash provided by financing activities 3,247 264,896

Net increase (decrease) in cash and cash equivalents ( 363,966 ) 12,553

Net cash provided by (used in) financing activities 66,674 ( 25,691 )

Net decrease in cash and cash equivalents ( 48,570 ) ( 70,946 )

Cash and Cash Equivalents:

5 unchanged sentences

Income taxes — —

Supplemental Disclosure of Noncash Investing and Financing Activities:

Purchase of securities available for sale, pending settlement $ 30,151 $ —

See Notes to Consolidated Financial Statements.

7 unchanged sentences

Certain information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to such rules and regulations.

Although management believes that the disclosures are adequate to make the information presented understandable, it is suggested that these interim consolidated financial statements be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 1, 2021.

In the opinion of management, the accompanying consolidated financial statements of the Company contain all adjustments necessary to fairly present its financial position as of September 30, 2021 and December 31, 2020, net income, comprehensive income and changes in stockholders' equity for the three and nine months ended September 30, 2021 and 2020, and cash flows for the nine months ended September 30, 2021 and 2020.

In the opinion of management, the accompanying consolidated financial statements of the Company contain all adjustments necessary to fairly present its financial position as of March 31, 2022 and December 31, 2021 and net income, comprehensive income, changes in stockholders' equity and cash flows for the three months ended March 31, 2022 and 2021.

The results for these interim periods may not be indicative of results for the entire year or for any other period.

41 unchanged sentences

In March 2022, the FASB issued ASU No.

2022-02, Financial Instruments - Credit Losses (ASC 326):

Troubled Debt Restructurings and Vintage Disclosures .

The amendments in this ASU improve the usefulness of information provided to investors about certain loan refinancing, restructurings, and write-offs.

The amendments eliminate the accounting guidance for troubled debt restructurings (TDRs) by creditors that have adopted ASU No.

It also enhances disclosure requirements for certain loan refinancings and restructurings by creditors made to borrowers experiencing financial difficult.

Lastly, the amendments require that a public business entity disclose current-period gross write-offs by year of origination for financing receivables and net investment in leases.

The Company is currently evaluating the impact of the ASU on the Company's consolidated financial statements.

In March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform (Topic 848):

14 unchanged sentences

The incremental shares, to the extent they would have been dilutive, were included in the denominator of the diluted earnings per common share calculation.

The calculations of earnings per common share and diluted earnings per common share for the three and nine months ended September 30, 2021 and 2020 are presented in the following table.

Three Months Ended September 30, Nine Months Ended September 30,

The calculations of earnings per common share and diluted earnings per common share for the three months ended March 31, 2022 and 2021 are presented in the following table.

Three Months Ended March 31,

(in thousands, except per share data) 2022 2021

2 unchanged sentences

Weighted average effect of restricted stock units outstanding

248 54 245 59

Diluted weighted average common shares outstanding 16,840 16,701

7 unchanged sentences

Securities Available for Sale

The following tables show the amortized cost, gross unrealized gains and losses, and fair value of securities available for sale, by security type as of September 30, 2021 and December 31, 2020.

September 30, 2021

The following tables show the amortized cost, gross unrealized gains and losses, and fair value of securities available for sale, by security type as of March 31, 2022 and December 31, 2021.

March 31, 2022

(Losses) Fair

17 unchanged sentences

Collateralized loan obligations 37,880 59 ( 157 ) 37,782

Corporate notes 12,750 62 ( 52 ) 12,760

$ 765,546 $ 5,076 $ ( 11,800 ) $ 758,822

(1) Collateralized mortgage obligations and mortgage-backed securities consist of residential and commercial mortgage pass-through securities and collateralized mortgage obligations guaranteed by FNMA, FHLMC, GNMA and SBA.

Securities with an amortized cost of approximately $ 283,428 and $ 232,206 as of September 30, 2021 and December 31, 2020, respectively, were pledged to secure access to the Federal Reserve discount window, for public fund deposits, and for other purposes as required or permitted by law or regulation.

The amortized cost and fair value of securities available for sale as of September 30, 2021, by contractual maturity, are shown below.

Securities with an amortized cost of approximately $ 286,672 and $ 295,961 as of March 31, 2022 and December 31, 2021, respectively, were pledged to secure access to the Federal Reserve discount window, for public fund deposits, and for other purposes as required or permitted by law or regulation.

The amortized cost and fair value of securities available for sale as of March 31, 2022, by contractual maturity, are shown below.

Certain securities have call features that allow the issuer to call the securities prior to maturity.

1 unchanged sentence

Therefore, collateralized mortgage obligations and mortgage-backed securities are not included in the maturity categories within the following maturity summary.

September 30, 2021

March 31, 2022

Amortized Cost Fair Value

8 unchanged sentences

(dollars in thousands, except per share data)

The details of the sales of securities available for sale for the three and nine months ended September 30, 2021 and 2020 are summarized in the following table.

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

The details of the sales of securities available for sale for the three months ended March 31, 2022 and 2021 are summarized in the following table.

Three Months Ended March 31,

Proceeds from sales $ — $ 18,775

1 unchanged sentence

Gross losses on sales — 158

The following tables show the fair value and gross unrealized losses, aggregated by investment type and length of time that individual securities have been in a continuous loss position, as of September 30, 2021 and December 31, 2020.

September 30, 2021

March 31, 2022

Less than 12 months 12 months or longer Total

17 unchanged sentences

Collateralized loan obligations 22,821 ( 157 ) — — 22,821 ( 157 )

Corporate notes 4,198 ( 52 ) — — 4,198 ( 52 )

$ 530,081 $ ( 10,295 ) $ 36,246 $ ( 1,505 ) $ 566,327 $ ( 11,800 )

As of September 30, 2021, securities available for sale with unrealized losses included 47 state and political subdivision securities, 22 collateralized mortgage obligation securities, 14 mortgage-backed securities, two collateralized loan obligation securities and four corporate notes.

As of March 31, 2022, securities available for sale with unrealized losses included 75 state and political subdivision securities, 72 collateralized mortgage obligation securities, 25 mortgage-backed securities, six collateralized loan obligation securities and seven corporate notes.

Collateralized loan obligation securities are debt securities backed by pools of senior secured commercial loans to a diverse group of companies across a broad spectrum of industries.

At September 30, 2021, the Company only owned collateralized loan obligations that were AAA- or AA-rated.

The Company believes the unrealized losses on securities available for sale as of September 30, 2021 were due to market conditions rather than reduced estimated cash flows.

At September 30, 2021, the Company did not intend to sell these securities, did not anticipate that these securities will be required to be sold before anticipated recovery, and expected full principal and interest to be collected.

Therefore, the Company did not consider these securities to have other than temporary impairment as of September 30, 2021.

At March 31, 2022, the Company only owned collateralized loan obligations that were AAA- or AA-rated.

The Company believes the unrealized losses on securities available for sale as of March 31, 2022 were due to market interest rate conditions rather than reduced estimated cash flows.

At March 31, 2022, the Company did not intend to sell these securities, did not anticipate that these securities will be required to be sold before anticipated recovery, and expected full principal and interest to be collected.

Therefore, the Company did not consider these securities to have other than temporary impairment as of March 31, 2022.

West Bancorporation, Inc.

3 unchanged sentences

Loans and Allowance for Loan Losses

Loans consisted of the following segments as of September 30, 2021 and December 31, 2020.

September 30, 2021 December 31, 2020

Loans consisted of the following segments as of March 31, 2022 and December 31, 2021.

March 31, 2022 December 31, 2021

Commercial $ 466,874 $ 492,815

7 unchanged sentences

$ 2,485,366 $ 2,456,196

Included in commercial loans at September 30, 2021 and December 31, 2020, were $ 47,416 and $ 180,757 , respectively, of loans originated in the Paycheck Protection Program (PPP).

Included in commercial loans at March 31, 2022 and December 31, 2021, were $ 9,398 and $ 22,206 , respectively, of loans originated in the Paycheck Protection Program (PPP).

The PPP was established by the Coronavirus Aid, Relief and Economic Security Act (CARES Act), enacted on March 27, 2020, and expanded by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, enacted on December 27, 2020 and the American Rescue Plan Act, enacted on March 11, 2021, in response to the Coronavirus Disease 2019 (COVID-19) pandemic.

2 unchanged sentences

Therefore, no allowance for loan losses is allocated to PPP loans.

Real estate loans of approximately $ 1,250,000 and $ 1,010,000 were pledged as security for Federal Home Loan Bank (FHLB) advances as of September 30, 2021 and December 31, 2020, respectively.

Real estate loans of approximately $ 1,170,000 and $ 1,190,000 were pledged as security for Federal Home Loan Bank (FHLB) advances as of March 31, 2022 and December 31, 2021, respectively.

Loans are stated at the principal amounts outstanding, net of unamortized loan fees and costs, with interest income recognized on the interest method based upon the terms of the loan.

7 unchanged sentences

Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured.

A loan is classified as a troubled debt restructured (TDR) loan when the Company separately concludes that a borrower is experiencing financial difficulties and a concession is granted that would not otherwise be considered.

A loan is classified as a TDR loan when the Company separately concludes that a borrower is experiencing financial difficulties and a concession is granted that would not otherwise be considered.

Concessions may include a restructuring of the loan terms to alleviate the burden of the borrower's cash requirements, such as an extension of the payment terms beyond the original maturity date or a change in the interest rate charged.

7 unchanged sentences

(dollars in thousands, except per share data)

The CARES Act also provided financial institutions the option to temporarily suspend certain requirements under GAAP related to TDRs for a limited period of time in certain circumstances.

This temporary suspension may only be applied to modifications of loans that were not more than 30 days past due as of December 31, 2019 and may not be applied to modifications that are not related to the COVID-19 pandemic.

If elected, the temporary suspension may be applied to eligible modifications executed during the period beginning on March 1, 2020 and, as extended by the Coronavirus Response and Relief Supplemental Appropriations Act of 2021, ending on the earlier of January 1, 2022 or 60 days after the termination of the COVID-19 national emergency.

In 2020, federal banking regulators, in consultation with FASB, issued interagency statements that included similar guidance on their approach for the accounting of loan modifications in light of the economic impact of the COVID-19 pandemic that provide that short-term modifications and additional accommodations made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not TDRs.

At September 30, 2021, there were no COVID-19-related loan modifications on the Company's loans.

Based upon its ongoing assessment of credit quality within the loan portfolio, the Company maintains a Watch List, which includes loans classified as Doubtful, Substandard and Watch according to the Company's classification criteria.

3 unchanged sentences

The amount of impairment, if any, and any subsequent changes are included in the specific component of the allowance for loan losses.

TDR loans totaled $ 8,725 and $ 0 as of September 30, 2021 and December 31, 2020 and were included in the nonaccrual category.

There were six loan modifications related to one borrower considered to be TDR, with a pre- and post-modification recorded investment of $ 14,044 , that occurred during the three and nine months ended September 30, 2021.

The modification included significant payment delays.

A specific reserve of $ 2,500 and $ 3,000 related to these loans was recorded at September 30, 2021 and December 31, 2020, respectively.

There were no loan modifications considered to be TDR that occurred during the three and nine months ended September 30, 2020.

No TDR loans that were modified within the 12 months preceding September 30, 2021 and 2020 have subsequently had a payment default.

TDR loans totaled $ 8,458 and $ 8,599 as of March 31, 2022 and December 31, 2021 and were included in the nonaccrual category.

There were no loan modifications considered to be TDR that occurred during the three months ended March 31, 2022 and 2021.

A specific reserve of $ 2,500 related to TDR loans was recorded at March 31, 2022 and December 31, 2021.

No TDR loans that were modified within the 12 months preceding March 31, 2022 and 2021 have subsequently had a payment default.

A TDR loan is considered to have a payment default when it is past due 30 days or more.

3 unchanged sentences

(dollars in thousands, except per share data)

The following table summarizes the recorded investment in impaired loans by segment, broken down by loans with no related allowance for loan losses and loans with a related allowance and the amount of that allowance as of September 30, 2021 and December 31, 2020.

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance

22 unchanged sentences

$ 8,800 $ 8,800 $ 2,500 $ 8,948 $ 8,948 $ 2,500

The balance of impaired loans at September 30, 2021 and December 31, 2020 was composed of two different borrowers.

The balance of impaired loans at March 31, 2022 and December 31, 2021 was composed of two different borrowers.

The Company has no commitments to advance additional funds on any of the impaired loans.

3 unchanged sentences

(dollars in thousands, except per share data)

The following table summarizes the average recorded investment and interest income recognized on impaired loans by segment for the three and nine months ended September 30, 2021 and 2020.

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized

The following table summarizes the average recorded investment and interest income recognized on impaired loans by segment for the three months ended March 31, 2022 and 2021.

Three Months Ended March 31,

Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized

With no related allowance recorded:

1 unchanged sentence

Construction, land and land development

— — — — — — — —

1-4 family residential first mortgages

360 — 386 1 367 — 395 4

Home equity — — — —

1 unchanged sentence

Consumer and other — — — —

360 — 4,365 5 367 — 2,044 20

With an allowance recorded:

1 unchanged sentence

Construction, land and land development

— — — — — — — —

1-4 family residential first mortgages

— — — — — — — —

Home equity — — — —

4 unchanged sentences

Construction, land and land development

— — — — — — — —

1-4 family residential first mortgages

360 — 386 1 367 — 395 4

Home equity — — — —

6 unchanged sentences

(dollars in thousands, except per share data)

The following tables provide an analysis of the payment status of the recorded investment in loans as of September 30, 2021 and December 31, 2020.

September 30, 2021

The following tables provide an analysis of the payment status of the recorded investment in loans as of March 31, 2022 and December 31, 2021.

March 31, 2022

Past Due Total

25 unchanged sentences

(dollars in thousands, except per share data)

The following tables present the recorded investment in loans by credit quality indicator and loan segment as of September 30, 2021 and December 31, 2020.

September 30, 2021

The following tables present the recorded investment in loans by credit quality indicator and loan segment as of March 31, 2022 and December 31, 2021.

March 31, 2022

Pass Watch Substandard Doubtful Total

57 unchanged sentences

Risk ratings are updated as circumstances that could affect the repayment of an individual loan are brought to management's attention through an established monitoring process.

Individual bankers initiate changes as appropriate for ratings 1 through 5, and changes for ratings 6 through 9 are initiated by management.

Individual bankers initiate changes as appropriate for ratings 1 through 5, and changes for ratings 6 through 9 are initiated via communications with management.

The likelihood of loss increases as the risk rating increases and is generally preceded by a loan appearing on the Watch List, which consists of all loans with a risk rating of 6 or worse.

28 unchanged sentences

In addition, regulatory agencies, as an integral part of their examination processes, periodically review the Company's allowance for loan losses, and may require the Company to make additions to the allowance based on their judgment about information available to them at the time of their examinations.

The following tables detail the changes in the allowance for loan losses by segment for the three and nine months ended September 30, 2021 and 2020.

Three Months Ended September 30, 2021

Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total

Beginning balance $ 4,464 $ 2,950 $ 359 $ 91 $ 20,129 $ 49 $ 28,042

Charge-offs — — — — — — —

Recoveries 45 — 1 1 4 5 56

Provision (1)

191 498 ( 5 ) 9 ( 686 ) ( 7 ) —

Ending balance $ 4,700 $ 3,448 $ 355 $ 101 $ 19,447 $ 47 $ 28,098

Three Months Ended September 30, 2020

Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total

Beginning balance $ 4,318 $ 3,300 $ 331 $ 128 $ 13,205 $ 81 $ 21,363

Charge-offs — — — — — — —

Recoveries 35 — — 1 4 — 40

Provision (1)

491 124 29 ( 2 ) 3,358 — 4,000

Ending balance $ 4,844 $ 3,424 $ 360 $ 127 $ 16,567 $ 81 $ 25,403

Nine Months Ended September 30, 2021

The following tables detail the changes in the allowance for loan losses by segment for the three months ended March 31, 2022 and 2021.

Three Months Ended March 31, 2022

Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total

5 unchanged sentences

Ending balance $ 4,708 $ 3,998 $ 348 $ 101 $ 18,417 $ 51 $ 27,623

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total

10 unchanged sentences

(dollars in thousands, except per share data)

The following tables present a breakdown of the allowance for loan losses disaggregated on the basis of impairment analysis method by segment as of September 30, 2021 and December 31, 2020.

September 30, 2021

The following tables present a breakdown of the allowance for loan losses disaggregated on the basis of impairment analysis method by segment as of March 31, 2022 and December 31, 2021.

March 31, 2022

Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total

9 unchanged sentences

Total $ 4,776 $ 3,646 $ 339 $ 91 $ 19,466 $ 46 $ 28,364

The following tables present the recorded investment in loans, exclusive of unamortized fees and costs, disaggregated on the basis of impairment analysis method by segment as of September 30, 2021 and December 31, 2020.

September 30, 2021

March 31, 2022

Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total

17 unchanged sentences

Interest Rate Swaps Designated as a Cash Flow Hedge:

The Company had interest rate swaps designated as cash flow hedges with total notional amounts of $ 255,000 and $ 305,000 at September 30, 2021 and December 31, 2020, respectively.

As of September 30, 2021, the Company had swaps with a total notional amount of $ 125,000 that hedge the interest payments of rolling fixed-rate one-month funding consisting of FHLB advances or brokered deposits.

Also as of September 30, 2021, the Company had a swap with a total notional amount of $ 20,000 that effectively converts variable-rate junior subordinated notes to fixed-rate debt, and swaps with a total notional amount of $ 110,000 that hedge the interest payments of certain deposit accounts.

The Company had interest rate swaps designated as cash flow hedges with total notional amounts of $ 255,000 at March 31, 2022 and December 31, 2021.

As of March 31, 2022, the Company had swaps with a total notional amount of $ 125,000 that hedge the interest payments of rolling fixed-rate one-month funding consisting of FHLB advances or brokered deposits.

Also as of March 31, 2022, the Company had a swap with a total notional amount of $ 20,000 that effectively converts variable-rate junior subordinated notes to fixed-rate debt, and swaps with a total notional amount of $ 110,000 that hedge the interest payments of certain deposit accounts.

In March 2021, the Company terminated interest rate swaps with a total notional amount of $ 50,000 .

12 unchanged sentences

These swaps were terminated in March 2021, and the resulting gains of $ 3,781 were recorded in noninterest income.

The table below identifies the balance sheet category and fair values of the Company's derivative instruments as of September 30, 2021 and December 31, 2020.

September 30, 2021 December 31, 2020

The table below identifies the balance sheet category and fair values of the Company's derivative instruments as of March 31, 2022 and December 31, 2021.

March 31, 2022 December 31, 2021

Cash Flow Hedges:

Gross notional amount $ 255,000 $ 255,000

Fair value in other assets 4,065 —

Fair value in other liabilities — ( 7,517 )

10 unchanged sentences

(dollars in thousands, except per share data)

The following table identifies the pre-tax gains or losses recognized on the Company's derivative instruments designated as cash flow hedges for the three and nine months ended September 30, 2021 and 2020.

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Pre-tax gain (loss) recognized in other comprehensive income $ 359 $ 256 $ 5,801 $ ( 23,912 )

The following table identifies the pre-tax gains or losses recognized on the Company's derivative instruments designated as cash flow hedges for the three months ended March 31, 2022 and 2021.

Three Months Ended March 31,

Pre-tax gain recognized in other comprehensive income $ 10,536 $ 7,763

Reclassification from AOCI into income:

Interest expense $ ( 1,105 ) $ ( 1,405 ) $ ( 3,573 ) $ ( 2,799 )

Swap termination losses reclassified to noninterest income — — 3,600 —

The Company estimates there will be approximately $ 4,379 reclassified from accumulated other comprehensive income to interest expense through the 12 months ending September 30, 2022 related to cash flow hedges.

Increase in interest expense $ ( 1,045 ) $ ( 1,370 )

Decrease in noninterest income, swap termination fees — ( 3,600 )

The Company estimates there will be approximately $ 3,651 reclassified from accumulated other comprehensive income to interest expense through the 12 months ending March 31, 2023 related to cash flow hedges.

The Company is exposed to credit risk in the event of nonperformance by interest rate swap counterparties, which is minimized by collateral-pledging provisions in the agreements.

1 unchanged sentence

These agreements protect the interests of the Company and its counterparties should either party suffer a credit rating deterioration.

As of September 30, 2021 and December 31, 2020, the Company pledged $ 7,720 and $ 24,100 , respectively, of collateral to the counterparties in the form of cash on deposit with third parties.

As of March 31, 2022 and December 31, 2021, the Company pledged $ 0 and $ 4,500 , respectively, of collateral to the counterparties in the form of cash on deposit with third parties.

As of March 31, 2022 and December 31, 2021, the Company's counterparties pledged $ 12,580 and $ 0 , respectively, of collateral to the Company in the form of cash on deposit.

The interest rate swap product with the borrower is cross-collateralized with the underlying loan and therefore there is no pledged cash collateral under swap contracts with customers.

Net deferred tax assets consisted of the following as of September 30, 2021 and December 31, 2020.

September 30, 2021 December 31, 2020

Net deferred tax assets consisted of the following as of March 31, 2022 and December 31, 2021.

March 31, 2022 December 31, 2021

Deferred tax assets:

6 unchanged sentences

State net operating loss carryforward 1,296 1,276

Other 151 139

26,072 14,913

2 unchanged sentences

Net deferred loan fees and costs 250 247

Net unrealized gains on securities available for sale — 2,019

Net unrealized gains on interest rate swaps 1,027 —

Premises and equipment 926 809

10 unchanged sentences

Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in the balances of each component of accumulated other comprehensive income (loss), net of tax, for the nine months ended September 30, 2021 and 2020.

The following table summarizes the changes in the balances of each component of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2022 and 2021.

Unrealized Unrealized Accumulated

6 unchanged sentences

Net current period other comprehensive income (loss) ( 40,782 ) 8,651 ( 32,131 )

Balance, September 30, 2021 $ ( 1,870 ) $ ( 8,135 ) $ ( 10,005 )

Balance, March 31, 2022 $ ( 45,803 ) $ 3,035 $ ( 42,768 )

Balance, December 31, 2020 $ 5,994 $ ( 17,840 ) $ ( 11,846 )

2 unchanged sentences

Net current period other comprehensive income (loss) ( 6,240 ) 9,525 3,285

Balance, September 30, 2020 $ 5,625 $ ( 20,154 ) $ ( 14,529 )

Balance, March 31, 2021 $ ( 246 ) $ ( 8,315 ) $ ( 8,561 )

Commitments and Contingencies

5 unchanged sentences

The Company uses the same credit policies in making commitments and conditional obligations that it uses for on-balance-sheet instruments.

The Company's commitments consisted of the following amounts as of September 30, 2021 and December 31, 2020.

September 30, 2021 December 31, 2020

Commitments to extend credit $ 874,647 $ 832,590

The Company's commitments consisted of the following amounts as of March 31, 2022 and December 31, 2021.

March 31, 2022 December 31, 2021

Commitments to fund real estate construction loans $ 290,261 $ 294,580

Other commitments to extend credit 735,200 585,678

Standby letters of credit 17,130 17,391

2 unchanged sentences

West Bank receives credit enhancement fees from the FHLB for providing this guarantee and continuing to assist with managing the credit risk of the MPF Program residential mortgage loans.

The outstanding balance of mortgage loans sold under the MPF Program was $ 31,552 and $ 43,847 at September 30, 2021 and December 31, 2020, respectively.

The outstanding balance of mortgage loans sold under the MPF Program was $ 26,676 and $ 31,552 at March 31, 2022 and December 31, 2021, respectively.

West Bancorporation, Inc.

3 unchanged sentences

Contractual commitments :

The Company had remaining commitments to invest in qualified affordable housing projects totaling $ 3,992 and $ 3,505 as of September 30, 2021 and December 31, 2020, respectively.

During 2020, the Company began construction on a new office in Sartell, Minnesota, which had a remaining construction commitment of $ 3,477 and $ 8,324 as of September 30, 2021 and December 31, 2020, respectively.

The Company had remaining commitments to invest in qualified affordable housing projects totaling $ 3,947 and $ 3,986 as of March 31, 2022 and December 31, 2021, respectively.

Contingencies :

9 unchanged sentences

The Company's policy is to recognize transfers between levels at the end of each reporting period, if applicable.

There were no transfers between levels of the fair value hierarchy during the nine months ended September 30, 2021.

There were no transfers between levels of the fair value hierarchy during the three months ended March 31, 2022.

The following is a description of valuation methodologies used for financial assets and liabilities recorded at fair value on a recurring basis.

18 unchanged sentences

(dollars in thousands, except per share data)

The following tables present the balances of financial assets and liabilities measured at fair value on a recurring basis by level as of September 30, 2021 and December 31, 2020.

September 30, 2021

The following tables present the balances of financial assets and liabilities measured at fair value on a recurring basis by level as of March 31, 2022 and December 31, 2021.

March 31, 2022

Total Level 1 Level 2 Level 3

17 unchanged sentences

Collateralized loan obligations 37,782 — 37,782 —

Corporate notes 12,760 — 12,760 —

Derivative instruments, interest rate swaps 3,887 — 3,887 —

Financial liabilities:

Derivative instrument, interest rate swap $ 24,340 $ — $ 24,340 $ —

Derivative instruments, interest rate swaps $ 11,404 $ — $ 11,404 $ —

Certain assets are measured at fair value on a nonrecurring basis.

That is, they are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).

Impaired loans with a net book value of $ 6,225 and $ 12,817 for which a fair value adjustment was recorded were classified as Level 3 as of September 30, 2021 and December 31, 2020, respectively.

Impaired loans with a net book value of $ 5,958 and $ 6,099 for which a fair value adjustment was recorded were classified as Level 3 as of March 31, 2022 and December 31, 2021, respectively.

As of March 31, 2022, impaired loans with a carrying value of $ 8,458 were reduced by a specific reserve of $ 2,500 , resulting in a reported fair value of $ 5,958 .

As of December 31, 2021, impaired loans with a carrying value of $ 8,599 were reduced by a specific reserve of $ 2,500 , resulting in a reported fair value of $ 6,099 .

In determining the estimated net realizable value of the underlying collateral of impaired loans, the Company primarily uses third-party appraisals or broker opinions which may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach.

8 unchanged sentences

Valuation Technique Unobservable Inputs Range (Weighted Average)

September 30, 2021

March 31, 2022

Impaired loans Appraisal of collateral Appraisal adjustment 50%, including selling costs

December 31, 2021

Impaired loans Appraisal of collateral Appraisal adjustment 7% selling costs

Impaired loans Appraisal of collateral Appraisal adjustment 50%, including selling costs

GAAP requires disclosure of the fair value of financial assets and financial liabilities, including those that are not measured and reported at fair value on a recurring or nonrecurring basis .

The following table presents the carrying amounts and approximate fair values of financial assets and liabilities as of September 30, 2021 and December 31, 2020.

September 30, 2021

The following table presents the carrying amounts and approximate fair values of financial assets and liabilities as of March 31, 2022 and December 31, 2021.

March 31, 2022

Carrying Amount Approximate Fair Value Level 1 Level 2 Level 3

47 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements