What changed in this filing

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Item 1. Financial Statements

2023-10-26 compared with 2023-07-27 · 111 added, 108 removed, 921 unchanged (19% of the section changed)

3 unchanged sentences

Consolidated Balance Sheet

(in thousands, except share and per share data) June 30, 2023 December 31, 2022

(in thousands, except share and per share data) September 30, 2023 December 31, 2022

Cash and due from banks $ 18,819 $ 24,896

28 unchanged sentences

authorized 50,000,000 shares;

no shares issued and outstanding at June 30, 2023 and December 31, 2022

no shares issued and outstanding at September 30, 2023 and December 31, 2022

Common stock, no par value;

authorized 50,000,000 shares;

and 16,640,413 shares issued and outstanding at June 30, 2023

and 16,640,413 shares issued and outstanding at September 30, 2023

and December 31, 2022, respectively

8 unchanged sentences

Consolidated Statements of Income

Three Months Ended June 30, Six Months Ended June 30,

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

(in thousands, except per share data) 2023 2022 2023 2022

21 unchanged sentences

Gain from bank-owned life insurance — — 691 —

Loan swap fees 431 835 431 835

Other income 340 364 1,116 1,173

19 unchanged sentences

Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended June 30, Six Months Ended June 30,

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

(in thousands) 2023 2022 2023 2022

2 unchanged sentences

Unrealized gains (losses) on securities:

Unrealized holding gains (losses) arising during the period ( 8,837 ) ( 44,413 ) 2,830 ( 99,008 )

Income tax (expense) benefit 2,192 11,236 ( 719 ) 25,049

Other comprehensive income (loss) on securities ( 6,645 ) ( 33,177 ) 2,111 ( 73,959 )

Unrealized gains (losses) on derivatives:

Unrealized holding losses arising during the period ( 23,391 ) ( 42,621 ) ( 20,561 ) ( 141,629 )

Income tax benefit 5,819 10,558 5,100 35,607

Other comprehensive loss on securities ( 17,572 ) ( 32,063 ) ( 15,461 ) ( 106,022 )

Unrealized gains on derivatives:

Unrealized holding gains arising during the period 5,303 8,637 11,771 23,239

2 unchanged sentences

Other comprehensive income on derivatives 1,810 6,327 3,353 18,495

Total other comprehensive income (loss) ( 2,392 ) ( 29,660 ) 3,654 ( 61,791 )

Total other comprehensive loss ( 15,762 ) ( 25,736 ) ( 12,108 ) ( 87,527 )

Comprehensive income (loss) $ ( 9,856 ) $ ( 14,134 ) $ 7,504 $ ( 50,074 )

4 unchanged sentences

(in thousands, except share and per share data)

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Additional Other

1 unchanged sentence

Stock Shares Amount Capital Earnings Income (Loss) Total

Balance, March 31, 2023 $ — 16,712,257 $ 3,000 $ 31,797 $ 267,620 $ ( 85,425 ) $ 216,992

Balance, June 30, 2023 $ — 16,725,094 $ 3,000 $ 32,642 $ 269,301 $ ( 87,817 ) $ 217,126

— — — — 5,906 — 5,906

4 unchanged sentences

— — — 845 — — 845

Issuance of common stock upon vesting of restricted stock units, net of shares withheld for payroll taxes — 12,837 — — — — —

Balance, June 30, 2023 $ — 16,725,094 $ 3,000 $ 32,642 $ 269,301 $ ( 87,817 ) $ 217,126

Three Months Ended June 30, 2022

Balance, September 30, 2023 $ — 16,725,094 $ 3,000 $ 33,487 $ 271,025 $ ( 103,579 ) $ 203,933

Three Months Ended September 30, 2022

Additional Other

1 unchanged sentence

Stock Shares Amount Capital Earnings Income (Loss) Total

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

Net income — — — — 12,667 — 12,667

Balance, June 30, 2022 $ — 16,640,413 $ 3,000 $ 30,283 $ 255,334 $ ( 72,428 ) $ 216,189

— — — — 11,602 — 11,602

Other comprehensive loss, net of tax — — — — — ( 25,736 ) ( 25,736 )

3 unchanged sentences

— — — 869 — — 869

Issuance of common stock upon vesting of restricted stock units, net of shares withheld for payroll taxes — 9,000 — — — — —

Balance, June 30, 2022 $ — 16,640,413 $ 3,000 $ 30,283 $ 255,334 $ ( 72,428 ) $ 216,189

Balance, September 30, 2022 $ — 16,640,413 $ 3,000 $ 31,152 $ 262,776 $ ( 98,164 ) $ 198,764

See Notes to Consolidated Financial Statements.

3 unchanged sentences

(in thousands, except share and per share data)

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Additional Other

5 unchanged sentences

— — — — 19,612 — 19,612

Other comprehensive income, net of tax

Other comprehensive loss, net of tax

— — — — — ( 12,108 ) ( 12,108 )

4 unchanged sentences

Issuance of common stock upon vesting of restricted stock units, net of shares withheld for payroll taxes — 84,681 — ( 935 ) — — ( 935 )

Balance, June 30, 2023 $ — 16,725,094 $ 3,000 $ 32,642 $ 269,301 $ ( 87,817 ) $ 217,126

Six Months Ended June 30, 2022

Balance, September 30, 2023 $ — 16,725,094 $ 3,000 $ 33,487 $ 271,025 $ ( 103,579 ) $ 203,933

Nine Months Ended September 30, 2022

Additional Other

10 unchanged sentences

— 85,567 — ( 1,519 ) — — ( 1,519 )

Balance, June 30, 2022 $ — 16,640,413 $ 3,000 $ 30,283 $ 255,334 $ ( 72,428 ) $ 216,189

Balance, September 30, 2022 $ — 16,640,413 $ 3,000 $ 31,152 $ 262,776 $ ( 98,164 ) $ 198,764

(1) Cumulative effect adjustment pursuant to adoption of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

5 unchanged sentences

Consolidated Statements of Cash Flows

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands) 2023 2022

10 unchanged sentences

Change in assets and liabilities:

(Increase) decrease in accrued interest receivable 203 ( 473 )

Increase in accrued interest receivable ( 1,610 ) ( 1,896 )

(Increase) decrease in other assets ( 1,936 ) 930

12 unchanged sentences

Net decrease in deposits ( 124,879 ) ( 193,158 )

Net increase (decrease) in federal funds purchased and other short-term borrowings ( 15,850 ) 130,120

Net increase in federal funds purchased and other short-term borrowings 61,510 201,620

Proceeds from issuance of subordinated debt, net of issuance costs — 58,756

4 unchanged sentences

Net cash provided by financing activities 80,673 53,205

Net increase (decrease) in cash and cash equivalents 5,205 ( 165,885 )

Net decrease in cash and cash equivalents ( 5,918 ) ( 133,434 )

Cash and Cash Equivalents:

15 unchanged sentences

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, 2022 filed with the SEC on February 23, 2023.

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 June 30, 2023 and December 31, 2022, and net income, comprehensive income (loss) and changes in stockholders' equity for the three and six months ended June 30, 2023 and 2022, and cash flows for the six months ended June 30, 2023 and 2022.

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, 2023 and December 31, 2022, and net income, comprehensive income (loss) and changes in stockholders' equity for the three and nine months ended September 30, 2023 and 2022, and cash flows for the nine months ended September 30, 2023 and 2022.

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

90 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 six months ended June 30, 2023 and 2022 are presented in the following table.

Three Months Ended June 30, Six Months Ended June 30,

The calculations of earnings per common share and diluted earnings per common share for the three and nine months ended September 30, 2023 and 2022 are presented in the following table.

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

(in thousands, except per share data) 2023 2022 2023 2022

12 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 June 30, 2023 and December 31, 2022.

June 30, 2023

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, 2023 and December 31, 2022.

September 30, 2023

(Losses) Fair

20 unchanged sentences

(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 $ 464,361 and $ 293,017 as of June 30, 2023 and December 31, 2022, respectively, were pledged to secure access to FHLB advances and Federal Reserve credit programs, 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 June 30, 2023, by contractual maturity, are shown below.

Securities with an amortized cost of approximately $ 458,126 and $ 293,017 as of September 30, 2023 and December 31, 2022, respectively, were pledged to secure access to Federal Home Loan Bank (FHLB) advances and Federal Reserve credit programs, 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, 2023, 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.

June 30, 2023

September 30, 2023

Amortized Cost Fair Value

8 unchanged sentences

(dollars in thousands, except per share data)

There were no sales of securities available for sale during the three and six months ended June 30, 2023 and 2022.

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 June 30, 2023 and December 31, 2022.

June 30, 2023

There were no sales of securities available for sale during the three and nine months ended September 30, 2023 and 2022.

September 30, 2023

Less than 12 months 12 months or longer Total

2 unchanged sentences

Securities available for sale:

State and political subdivisions $ 9,853 $ ( 273 ) 14 $ 186,848 $ ( 43,914 ) 102 $ 196,701 $ ( 44,187 )

Collateralized mortgage obligations — — — 264,834 ( 59,169 ) 79 264,834 ( 59,169 )

State and political

subdivisions $ 8,083 $ ( 674 ) 15 $ 173,924 $ ( 58,273 ) 103 $ 182,007 $ ( 58,947 )

Collateralized mortgage

obligations — — — 252,702 ( 63,101 ) 79 252,702 ( 63,101 )

Mortgage-backed securities — — — 126,113 ( 34,178 ) 27 126,113 ( 34,178 )

7 unchanged sentences

Securities available for sale:

State and political subdivisions $ 74,676 $ ( 11,556 ) 74 $ 118,487 $ ( 37,916 ) 43 $ 193,163 $ ( 49,472 )

Collateralized mortgage obligations 107,449 ( 14,484 ) 48 174,179 ( 42,763 ) 31 281,628 ( 57,247 )

State and political

subdivisions $ 74,676 $ ( 11,556 ) 74 $ 118,487 $ ( 37,916 ) 43 $ 193,163 $ ( 49,472 )

Collateralized mortgage

obligations 107,449 ( 14,484 ) 48 174,179 ( 42,763 ) 31 281,628 ( 57,247 )

Mortgage-backed securities 31,350 ( 4,556 ) 8 108,930 ( 24,615 ) 19 140,280 ( 29,171 )

5 unchanged sentences

If the Company intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis, then the security is written down to fair value through income.

As of June 30, 2023, the Company did not have the intent to sell, nor was it more likely than not that we would be required to sell any of the securities in an unrealized loss position prior to recovery.

As of June 30, 2023, the Company also determined that no individual securities in an unrealized loss position represented credit losses that would require an allowance for credit losses.

As of September 30, 2023, the Company did not have the intent to sell, nor was it more likely than not that we would be required to sell any of the securities in an unrealized loss position prior to recovery.

As of September 30, 2023, the Company also determined that no individual securities in an unrealized loss position represented credit losses that would require an allowance for credit losses.

The Company concluded that the unrealized losses were primarily attributable to increases in market interest rates since these securities were purchased and other market conditions.

Accrued interest receivable is not included in available-for-sale security balances and is presented in the "Accrued interest receivable" line of the Consolidated Balance Sheets.

Interest receivable on securities was $ 3,354 as of June 30, 2023, and is excluded from the estimate of credit losses.

Interest receivable on securities was $ 3,588 as of September 30, 2023, and was excluded from the estimate of credit losses.

As of December 31, 2022, the Company believed the unrealized losses on securities available for sale were due to market conditions rather than reduced estimated cash flows.

6 unchanged sentences

Loans and Allowance for Credit Losses

Loans consisted of the following segments as of June 30, 2023 and December 31, 2022.

June 30, 2023 December 31, 2022

Loans consisted of the following segments as of September 30, 2023 and December 31, 2022.

September 30, 2023 December 31, 2022

Commercial $ 529,293 $ 519,196

7 unchanged sentences

$ 2,849,777 $ 2,742,836

Real estate loans of approximately $ 1,390,000 and $ 1,190,000 were pledged as security for Federal Home Loan Bank (FHLB) advances as of June 30, 2023 and December 31, 2022, respectively.

Real estate loans of approximately $ 1,380,000 and $ 1,190,000 were pledged as security for FHLB advances as of September 30, 2023 and December 31, 2022, 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.

8 unchanged sentences

The Company adopted ASU No.

2016-13 on January 1, 2023, at which time the Company implemented the current expected credit loss model in estimating the allowance for credit losses (ACL) valuation account.

The following tables detail the changes in the ACL by loan segment for the three and six months ended June 30, 2023.

Three Months Ended June 30, 2023

2016-13 on January 1, 2023, at which time the Company implemented the current expected credit loss (CECL) model in estimating the allowance for credit losses (ACL) valuation account.

The following tables detail the changes in the ACL by loan segment for the three and nine months ended September 30, 2023.

Three Months Ended September 30, 2023

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

5 unchanged sentences

Ending balance $ 5,283 $ 3,751 $ 569 $ 111 $ 18,326 $ 107 $ 28,147

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

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

13 unchanged sentences

2016-13 on January 1, 2023, the Company calculated the allowance for loan losses using the incurred loss methodology.

The following tables present the activity in the allowance for loan losses by segment for the three and six months ended June 30, 2022.

Three Months Ended June 30, 2022

The following tables present the activity in the allowance for loan losses by segment for the three and nine months ended September 30, 2022.

Three Months Ended September 30, 2022

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

5 unchanged sentences

Ending balance $ 5,099 $ 3,486 $ 363 $ 105 $ 16,275 $ 90 $ 25,418

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

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

6 unchanged sentences

(1) The negative provisions for the various segments are related to the decline in outstanding balances in each of those portfolio segments during the time periods disclosed and/or improvement in the credit quality factors related to those portfolio segments.

The following tables present a breakdown of the allowance for credit losses by segment, disaggregated based on the evaluation method as of June 30, 2023 and December 31, 2022.

June 30, 2023

The following tables present a breakdown of the allowance for credit losses by segment, disaggregated based on the evaluation method as of September 30, 2023 and December 31, 2022.

September 30, 2023

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

13 unchanged sentences

(dollars in thousands, except per share data)

The following tables present the recorded investment in loans, exclusive of unamortized fees and costs, disaggregated based on the evaluation method by segment as of June 30, 2023 and December 31, 2022.

June 30, 2023

The following tables present the recorded investment in loans, exclusive of unamortized fees and costs, disaggregated based on the evaluation method by segment as of September 30, 2023 and December 31, 2022.

September 30, 2023

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

9 unchanged sentences

Total $ 519,196 $ 363,014 $ 75,211 $ 10,322 $ 1,771,940 $ 7,292 $ 2,746,975

Under the current expected credit loss model, the ACL is a valuation account estimated at each balance sheet date and deducted from the amortized cost basis of loans to present the net amount expected to be collected.

Under the CECL model, the ACL is a valuation account estimated at each balance sheet date and deducted from the amortized cost basis of loans to present the net amount expected to be collected.

The Company estimates the ACL based on the underlying loans' amortized cost basis, which is the amount at which the loan is originated or acquired, adjusted for collection of cash and charge-offs, as well as applicable accretion or amortization of premiums, discounts, and net deferred fees or costs.

3 unchanged sentences

Therefore, the Company has made a policy election to exclude accrued interest from the measurement of the ACL.

Accrued interest on loans of $ 8,430 and $ 8,665 at June 30, 2023 and December 31, 2022, respectively, is included in accrued interest receivable on the balance sheet and is excluded from the estimate of credit losses.

Accrued interest on loans of $ 10,005 and $ 8,665 at September 30, 2023 and December 31, 2022, respectively, was included in accrued interest receivable on the balance sheet and was excluded from the estimate of credit losses.

Expected credit losses are reflected in the allowance for credit losses through a charge to credit loss expense.

24 unchanged sentences

Total Nonaccrual Nonaccrual with no Allowance for Credit Losses 90 Days or More Past Due and Accruing

June 30, 2023 December 31, 2022 June 30, 2023 December 31, 2022 June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022

Commercial $ — $ — $ — $ — $ — $ —

Construction, land and land development — — — — — —

1-4 family residential first mortgages 309 322 309 322 — —

Construction, land and land

development — — — — — —

1-4 family residential first

mortgages 303 322 303 322 — —

Home equity — — — — — —

2 unchanged sentences

Total $ 303 $ 322 $ 303 $ 322 $ — $ —

There was no interest income recognized on loans that were on nonaccrual for the six months ended June 30, 2023 and June 30, 2022.

There was no interest income recognized on loans that were on nonaccrual for the nine months ended September 30, 2023 and September 30, 2022.

West Bancorporation, Inc.

2 unchanged sentences

(dollars in thousands, except per share data)

The following tables provide an analysis of the delinquency status of the amortized cost of loans as of June 30, 2023 and December 31, 2022.

June 30, 2023

The following tables provide an analysis of the delinquency status of the amortized cost of loans as of September 30, 2023 and December 31, 2022.

September 30, 2023

Past Due Total

26 unchanged sentences

Loan Restructurings Made to Borrowers Experiencing Financial Difficulty

As of June 30, 2023 and December 31, 2022, the Company had no loan restructurings made to borrowers experiencing financial difficulty.

There were no loan restructurings made to borrowers experiencing financial difficulty for which there was a payment default within twelve months following the modification during the three and six months ended June 30, 2023 and 2022.

As of September 30, 2023 and December 31, 2022, the Company had no loan restructurings made to borrowers experiencing financial difficulty.

A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

65 unchanged sentences

(dollars in thousands, except per share data)

The following tables present the amortized cost basis of loans by loan segment, credit quality indicator and origination year, and the current period gross write-off by loan segment and origination year, based on the analysis performed as of June 30, 2023 and December 31, 2022.

Term Loans by Origination Year

As of June 30, 2023 2023 2022 2021 2020 2019 Prior Revolving Loans Total

As of September 30, 2023 2023 2022 2021 2020 2019 Prior Revolving Loans Total

Pass $ 130,239 $ 119,579 $ 51,124 $ 36,264 $ 7,519 $ 44,657 $ 139,911 $ 529,293

93 unchanged sentences

The following table presents the amortized cost basis of collateral dependent loans, by primary collateral type, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans.

As of June 30, 2023

As of September 30, 2023

Primary Type of Collateral

10 unchanged sentences

The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.

The Company's allowance for credit losses for unfunded commitments was $ 2,344 as of June 30, 2023.

The Company's allowance for credit losses for unfunded commitments was $ 2,344 as of September 30, 2023.

The allowance for credit losses for off-balance-sheet credit exposures is presented in the "Accrued expenses and other liabilities" line of the Consolidated Balance Sheets.

Changes in the allowance for credit losses for off-balance-sheet credit exposures is reflected in the "Credit loss expense " line of the Consolidated Statements of Income.

There were no changes to the allowance for credit losses for off-balance-sheet credit exposures during the six months ended June 30, 2023.

There were no changes to the allowance for credit losses for off-balance-sheet credit exposures during the nine months ended September 30, 2023.

The Company has entered into various interest rate swap agreements as part of its interest rate risk management strategy.

The Company uses interest rate swaps to manage its interest rate risk exposure on certain loans, variable-rate and short-term borrowings, and deposits due to interest rate movements.

The Company uses interest rate swaps to manage its interest rate risk exposure on certain loans, borrowings and deposits due to interest rate movements.

The notional amounts of the interest rate swaps do not represent amounts exchanged by the counterparties, but rather, the notional amount is used to determine, along with other terms of the derivative, the amounts to be exchanged between the counterparties.

4 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 $ 435,000 and $ 310,000 at June 30, 2023 and December 31, 2022, respectively.

As of June 30, 2023, the Company had swaps with a total notional amount of $ 285,000 that hedge the interest payments of rolling fixed-rate one-month funding consisting of FHLB advances or brokered deposits.

One of these swaps with a total notional amount of $ 25,000 is a forward-starting swap with a starting date in September 2023.

Also as of June 30, 2023, the Company had swaps with a total notional amount of $ 40,000 that effectively converts variable-rate long-term debt 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 $ 445,000 and $ 310,000 at September 30, 2023 and December 31, 2022, respectively.

As of September 30, 2023, the Company had swaps with a total notional amount of $ 295,000 that hedge the interest payments of rolling one-month funding consisting of FHLB advances or brokered deposits.

Also as of September 30, 2023, the Company had swaps with a total notional amount of $ 40,000 that effectively converts variable-rate long-term debt to fixed-rate debt and swaps with a total notional amount of $ 110,000 that hedge the interest payments of certain deposit accounts.

Derivatives Not Designated as Accounting Hedges:

7 unchanged sentences

The customer accommodations and any offsetting swaps are treated as non-hedging derivative instruments which do not qualify for hedge accounting.

The table below identifies the balance sheet category and fair values of the Company's derivative instruments as of June 30, 2023 and December 31, 2022.

June 30, 2023 December 31, 2022

The table below identifies the balance sheet category and fair values of the Company's derivative instruments as of September 30, 2023 and December 31, 2022.

September 30, 2023 December 31, 2022

Cash Flow Hedges:

1 unchanged sentence

Fair value in other assets 20,726 16,284

Fair value in other liabilities ( 59 ) —

Weighted-average floating rate received 5.64 % 4.53 %

5 unchanged sentences

Fair value in other liabilities ( 18,512 ) ( 15,309 )

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 six months ended June 30, 2023 and 2022.

Three Months Ended June 30, Six Months Ended June 30,

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, 2023 and 2022.

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

2023 2022 2023 2022

7 unchanged sentences

(dollars in thousands, except per share data)

The Company estimates there will be approximately $ 10,451 reclassified from accumulated other comprehensive income to reduce interest expense through the 12 months ending June 30, 2024 related to cash flow hedges.

The Company estimates there will be approximately $ 11,575 reclassified from accumulated other comprehensive income to reduce interest expense through the 12 months ending September 30, 2024 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 both June 30, 2023 and December 31, 2022, the Company pledged $ 0 of collateral to the counterparties in the form of cash on deposit.

As of June 30, 2023 and December 31, 2022, the Company's counterparties pledged $ 33,880 and $ 31,560 , respectively, of collateral to the Company in the form of cash on deposit.

As of both September 30, 2023 and December 31, 2022, the Company pledged $ 0 of collateral to the counterparties in the form of cash on deposit.

As of September 30, 2023 and December 31, 2022, the Company's counterparties pledged $ 40,670 and $ 31,560 , 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 June 30, 2023 and December 31, 2022.

June 30, 2023 December 31, 2022

Net deferred tax assets consisted of the following as of September 30, 2023 and December 31, 2022.

September 30, 2023 December 31, 2022

Deferred tax assets:

23 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 six months ended June 30, 2023 and 2022.

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, 2023 and 2022.

Unrealized Unrealized Accumulated

3 unchanged sentences

Balance, December 31, 2022 $ ( 103,680 ) $ 12,209 $ ( 91,471 )

Other comprehensive income before reclassifications 2,124 4,881 7,005

Amounts reclassified from accumulated other comprehensive income (loss) ( 13 ) ( 3,338 ) ( 3,351 )

Net current period other comprehensive income 2,111 1,543 3,654

Balance, June 30, 2023 $ ( 101,569 ) $ 13,752 $ ( 87,817 )

Other comprehensive income (loss) before reclassifications ( 15,441 ) 8,879 ( 6,562 )

Amounts reclassified from accumulated other comprehensive income ( 20 ) ( 5,526 ) ( 5,546 )

Net current period other comprehensive income (loss) ( 15,461 ) 3,353 ( 12,108 )

Balance, September 30, 2023 $ ( 119,141 ) $ 15,562 $ ( 103,579 )

Balance, December 31, 2021 $ ( 5,021 ) $ ( 5,616 ) $ ( 10,637 )

2 unchanged sentences

Net current period other comprehensive income (loss) ( 106,022 ) 18,495 ( 87,527 )

Balance, June 30, 2022 $ ( 78,980 ) $ 6,552 $ ( 72,428 )

Balance, September 30, 2022 $ ( 111,043 ) $ 12,879 $ ( 98,164 )

Commitments and Contingencies

8 unchanged sentences

See Note 4 for additional information.

The Company's commitments consisted of the following amounts as of June 30, 2023 and December 31, 2022.

June 30, 2023 December 31, 2022

The Company's commitments consisted of the following amounts as of September 30, 2023 and December 31, 2022.

September 30, 2023 December 31, 2022

Commitments to fund real estate construction loans $ 444,205 $ 336,900

4 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 $ 21,791 and $ 23,337 at June 30, 2023 and December 31, 2022, respectively.

The outstanding balance of mortgage loans sold under the MPF Program was $ 20,854 and $ 23,337 at September 30, 2023 and December 31, 2022, respectively.

Contractual commitments :

The Company had remaining commitments to invest in qualified affordable housing projects totaling $ 2,678 and $ 3,431 as of June 30, 2023 and December 31, 2022, respectively.

The Company had remaining commitments to invest in qualified affordable housing projects totaling $ 1,811 and $ 3,431 as of September 30, 2023 and December 31, 2022, respectively.

West Bancorporation, Inc.

4 unchanged sentences

West Bank will pay the contractor a contract price consisting of the cost of work plus a fee, subject to a guaranteed maximum price of $ 42,309 , with anticipated construction completed in 2024.

As of June 30, 2023, there was a remaining commitment of $ 24,511 under this contract.

West Bank is also building a new office in Mankato, Minnesota to be completed in the fourth quarter of 2023, which had a remaining commitment of $ 3,991 as of June 30, 2023.

As of September 30, 2023, there was a remaining commitment of $ 18,625 under this contract.

West Bank is also building a new office in Mankato, Minnesota to be completed in the fourth quarter of 2023, which had a remaining commitment of $ 2,023 as of September 30, 2023.

Concentrations of credit risk :

14 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 six months ended June 30, 2023.

There were no transfers between levels of the fair value hierarchy during the nine months ended September 30, 2023.

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

These models’ key assumptions include the contractual terms of the respective contract along with significant observable inputs, including interest rates, yield curves, nonperformance risk and volatility.

The following tables present the balances of financial assets and liabilities measured at fair value on a recurring basis by level as of June 30, 2023 and December 31, 2022.

June 30, 2023

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, 2023 and December 31, 2022.

September 30, 2023

Total Level 1 Level 2 Level 3

27 unchanged sentences

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

As of both June 30, 2023 and December 31, 2022, there were no individually evaluated loans with a fair value adjustment.

As of both September 30, 2023 and December 31, 2022, there were no individually evaluated loans with a fair value adjustment.

Individually evaluated loans are classified within Level 3 of the fair value hierarchy and are evaluated and valued at the lower of cost or fair value when the loan is individually evaluated.

5 unchanged sentences

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 June 30, 2023 and December 31, 2022.

June 30, 2023

The following table presents the carrying amounts and approximate fair values of financial assets and liabilities as of September 30, 2023 and December 31, 2022.

September 30, 2023

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