What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-02-20 compared with 2024-02-22 · 139 added, 222 removed, 1445 unchanged (20% of the section changed)

7 unchanged sentences

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated February 19, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Adoption of New Accounting Standard

As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for credit losses on financial instruments in 2023 due to the adoption of Accounting Standards Update 2016-13, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments (Credit Losses) .

Basis for Opinion

12 unchanged sentences

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matter or on the account or disclosures to which it relates.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

West Bancorporation, Inc.

and Subsidiary

Allowance for Credit Losses for Loans

As described in Note 1 and Note 4 to the consolidated financial statements, the Company’s allowance for credit losses for loans (allowance) totaled $28.3 million at December 31, 2023.

On January 1, 2023 the Company adopted Accounting Standards Update 2016-13, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments .

As described in Note 1 and Note 4 to the consolidated financial statements, the allowance for credit losses for loans (allowance) totaled $30.4 million at December 31, 2024.

The allowance is a valuation account that is deducted from the amortized cost basis of loans to present the net amount of loans expected to be collected.

3 unchanged sentences

At December 31, 2024 the reserve on loans collectively evaluated totaled $30.4 million and there was no reserve on loans individually evaluated.

West Bancorporation, Inc.

and Subsidiary

The measurement of the reserve is based on relevant information about the collectability of cash flows, including information about past events, current conditions and reasonable and supportable forecasts.

6 unchanged sentences

Qualitative factors are based on management’s judgment of the changes in underlying loan composition of specific portfolio, trends relating to credit quality and collateral values, company-specific data, or effects of other factors such as market competition or legal and regulatory requirements.

The evaluation of these qualitative factors and forecasts requires that management make significant judgments and includes significant estimation uncertainty.

We identified the qualitative factors applied to the allowance as a critical audit matter as auditing management’s determination of the qualitative factors and forecasts required significant auditor judgment as the estimate is highly sensitive to changes in significant assumptions.

The evaluation of these qualitative factors and forecasts requires that management make significant judgments and are highly sensitive to changes in significant assumptions.

We identified the qualitative factors and forecasts applied to the allowance as a critical audit matter as auditing management’s determination of the qualitative factors and forecasts required significant auditor judgment as the estimate is highly sensitive to changes in significant assumptions.

Our audit procedures related to the Company’s qualitative factors and forecasts in the allowance included the following, among others:

1 unchanged sentence

• We tested management’s process and evaluated the reasonableness of their judgements and assumptions to develop the qualitative factors and forecasts, which included:

◦ Testing the relevancy and consistency of the data inputs used by management as a basis for the adjustment for qualitative factors and forecasts by comparing to internal and external source data, including data related to current and forecasted periods.

◦ Testing the relevancy and consistency of the data inputs used by management as a basis for the adjustments for qualitative factors and forecasts by comparing to internal and external, independently sourced data, including data related to current and forecasted periods.

◦ Evaluating the magnitude and directional consistency of the adjustments with trends in the loan portfolio, economy and various other relevant measures.

◦ Evaluating whether management’s conclusions were consistent with Company provided internal data and external, independently sourced data and agreeing the impact to the allowance calculation.

/s/ RSM US LLP

We have served as the Company’s auditor since 1998.

Des Moines, Iowa

February 19, 2025

We have served as the Company’s auditor since 1998.

West Bancorporation, Inc.

103 unchanged sentences

Loan swap fees — 431 835

Realized securities gains (losses), net ( 431 ) — 51

Realized securities losses, net ( 1,172 ) ( 431 ) —

Other income 1,269 1,424 1,537

27 unchanged sentences

Unrealized holding gains (losses) arising during the period ( 8,190 ) 16,514 ( 132,009 )

reclassification adjustment for net (gains) losses realized in net income 431 — ( 51 )

reclassification adjustment for net losses realized in net income 1,172 431 —

Income tax (expense) benefit 1,687 ( 4,498 ) 33,350

19 unchanged sentences

Net income — — — — 46,399 — 46,399

Other comprehensive income, net of tax — — — — — 1,209 1,209

Other comprehensive loss, net of tax — — — — — ( 80,834 ) ( 80,834 )

Cash dividends declared, $ 1.00 per common share

4 unchanged sentences

Balance, December 31, 2022 — 16,640,413 3,000 32,021 267,562 ( 91,471 ) 211,112

Cumulative effect of change in accounting principle (1)

— — — — ( 3,626 ) — ( 3,626 )

Net income — — — — 24,137 — 24,137

Other comprehensive loss, net of tax — — — — — ( 80,834 ) ( 80,834 )

Other comprehensive income, net of tax — — — — — 7,948 7,948

Cash dividends declared, $ 1.00 per common share

4 unchanged sentences

Balance, December 31, 2023 — 16,725,094 3,000 34,197 271,369 ( 83,523 ) 225,043

Cumulative effect of change in accounting principle (1)

— — — — ( 3,626 ) — ( 3,626 )

Net income — — — — 24,050 — 24,050

Other comprehensive income, net of tax — — — — — 7,948 7,948

Other comprehensive loss, net of tax — — — — — ( 5,834 ) ( 5,834 )

Cash dividends declared, $ 1.00 per common share

21 unchanged sentences

Net amortization and accretion 3,200 3,293 2,965

Securities (gains) losses, net 431 — ( 51 )

Securities losses, net 1,172 431 —

Stock-based compensation 2,509 3,111 3,357

23 unchanged sentences

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

Proceeds from long-term debt — — 34,500

Principal payments on long-term debt ( 5,000 ) ( 3,750 ) ( 35 )

29 unchanged sentences

Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change in the near term are the fair value of financial instruments and the allowance for credit losses.

Material estimates that are particularly susceptible to significant change in the near term are the allowance for credit losses.

Consolidation policy :

6 unchanged sentences

As a community-oriented financial institution, substantially all of West Bank’s operations involve the delivery of loan and deposit products to customers.

Management makes operating decisions and assesses performance based on an ongoing review of the community banking activities, which constitutes the Company’s only operating segment for financial reporting purposes.

The chief operating decision maker makes operating decisions and assesses performance based on an ongoing review of the community banking activities, which constitutes the Company’s only operating segment for financial reporting purposes.

The Company’s single segment is managed on a consolidated basis by the chief operating decision maker who is the Company’s chief executive officer.

The accounting policies of this segment are the same as those described throughout these significant accounting policies.

The chief operating decision maker assesses performance of the segment and determines the allocation of resources based on consolidated net income, which is reported in the Consolidated Statements of Income.

Consolidated net income is used in deciding where to deploy capital and to monitor budget vs.

actual results.

It is also used in benchmarking performance measures to Company peers for compensation related analysis.

The measure of segment assets is reported on the Consolidated Balance Sheets as total consolidated assets.

Comprehensive income :

7 unchanged sentences

Realized gains and losses on sales of securities are computed on a specific identification basis based on amortized cost.

The amortized cost of securities available for sale is adjusted for accretion of discounts to maturity and amortization of premiums over the estimated life of each security or, in the case of callable securities, through the first call date, using the effective yield method.

Such amortization and accretion is included in interest income.

Interest income on securities is recognized using the interest method according to the terms of the security.

West Bancorporation, Inc.

2 unchanged sentences

(dollars in thousands, except per share data)

Such amortization and accretion is included in interest income.

Interest income on securities is recognized using the interest method according to the terms of the security.

The Company evaluates each of its securities whose value has declined below amortized cost to determine if any of the decline is due to a credit loss.

5 unchanged sentences

Federal Home Loan Bank stock :

West Bank, as a member of the FHLB system, is required to maintain an investment in capital stock of the FHLB in an amount equal to 0.06 percent of total assets plus 4.50 percent of outstanding advances from the FHLB and the outstanding principal balance of loans previously issued through the Mortgage Partnership Finance Program (MPF).

West Bank, as a member of the FHLB system, is required to maintain an investment in capital stock of the FHLB according to a predetermined formula as required to support borrowing activities.

No ready market exists for the FHLB stock, and it has no quoted market value.

27 unchanged sentences

(dollars in thousands, except per share data)

The Company measures the ACL of loans on a collective (pool) basis when the loans share similar risk characteristics and uses a cash flow-based method to estimate expected credit losses for each of these pools.

The Company measures the ACL of loans on a collective (pool) basis when the loans share similar risk characteristics and uses a cash flow-based model to estimate expected credit losses for each of these pools.

The Company’s methodology for estimating the ACL considers available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts.

88 unchanged sentences

Current accounting developments :

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments—Credit Losses (Topic 326).

The amendments in this update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected.

The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net carrying value at the amount expected to be collected on the financial assets.

Under the update, the income statement will reflect the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period.

The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount of financial assets.

An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances.

The allowance for credit losses for purchased financial assets with a more-than-insignificant amount of credit deterioration since origination that are measured at amortized cost basis is determined in a similar manner to other financial assets measured at amortized cost basis;

however, the initial allowance for credit losses is added to the purchase price rather than being reported as a credit loss expense.

Only subsequent changes in the allowance for credit losses are recorded as a credit loss expense for these assets.

Off-balance-sheet arrangements such as commitments to extend credit, guarantees, and standby letters of credit that are not considered derivatives under ASC 815 and are not unconditionally cancellable are also within the scope of this update.

Credit losses relating to available for sale debt securities should be recorded through an allowance for credit losses.

West Bancorporation, Inc.

and Subsidiary

Notes to Consolidated Financial Statements

(dollars in thousands, except per share data)

In December 2019, the FASB issued ASU No.

2019-10, Financial Instruments-Credit Losses (Topic 326).

This update amended the effective date of ASU No.

2016-13 for certain entities, including smaller reporting companies, until fiscal years beginning after December 15, 2022, including interim periods within those fiscal periods.

The one-time determination date for identifying as a smaller reporting company was November 15, 2019.

The Company met the definition of a smaller reporting company as of that date and was not required to adopt the standard until January 1, 2023.

In March 2020, 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 refinancings, 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 difficulty.

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 adopted ASU No.

2016-13 using the modified retrospective method for financial assets measured at amortized cost and off-balance-sheet credit exposures.

Results for the periods beginning after January 1, 2023 are presented under ASU No.

2016-13, while prior period amounts are reported in accordance with the previously applicable accounting standards.

The Company recorded a reduction to retained earnings of $3,626 upon adoption of ASU No.

The transition adjustment included an increase to the allowance for credit losses on loans of $2,458 and established an allowance for credit losses on off-balance sheet credit exposures of $2,344.

There was no allowance for credit losses recorded for available-for-sale debt securities.

The transition adjustment included corresponding increases in deferred tax assets of $ 1,176 .

The following table illustrates the impact of ASC 326 adoption.

January 1, 2023

Pre-ASC 326 Adoption Impact of ASC 326 Adoption As Reported Under ASC 326

Commercial $ 4,804 $ 677 $ 5,481

Construction, land and land development 3,548 ( 234 ) 3,314

1-4 family residential first mortgages 357 121 478

Home equity 101 ( 8 ) 93

Commercial 16,575 1,911 18,486

Consumer and other 88 ( 9 ) 79

Allowance for credit losses on loans $ 25,473 $ 2,458 $ 27,931

Liability for off-balance sheet credit exposures $ — $ 2,344 $ 2,344

West Bancorporation, Inc.

and Subsidiary

Notes to Consolidated Financial Statements

(dollars in thousands, except per share data)

In March 2020, the FASB issued ASU No.

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

10 unchanged sentences

Deferral of the Sunset Date of Topic 848 .

The amendment in this update extends the period of time preparers can utilize reference rate reform relief guidance in Topic 848, discussed above.

2022-06 defers the sunset date from December 31, 2022 to December 31, 2024.

The Company does not expect the updates within Topic 848 to have a material impact on our financial statements.

The amendment in this update extended the period of time preparers could utilize reference rate reform relief guidance in Topic 848, discussed above.

2022-06 deferred the sunset date from December 31, 2022 to December 31, 2024.

This update did not have a material impact on the Company’s financial statements.

West Bancorporation, Inc.

and Subsidiary

Notes to Consolidated Financial Statements

(dollars in thousands, except per share data)

In March 2023, the FASB issued ASU No.

4 unchanged sentences

For public business entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

The Company does not expect the ASU to have a material impact on the Company’s consolidated financial statements.

The implementation of this ASU did not have a material impact on the Company’s financial statements.

In October 2023, the FASB issued ASU No.

11 unchanged sentences

The amendments in this ASU are intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

For public business entities, the amendments are effective for fiscal years beginning after December 15, 2023.

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

For public business entities, the amendments are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted this guidance effective December 31, 2024.

Refer to “Segment information” section of Note 1 for additional information regarding segments.

In December 2023, the FASB issued ASU No.

4 unchanged sentences

For public business entities, the amendments are effective for fiscal years beginning after December 15, 2024.

The Company adopted this guidance effective January 1, 2025 and will provide the required disclosures in the Company’s 2025 filings.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .

The amendments in this ASU require public companies to disclose, in the notes to the financial statements, specified information about certain costs and expenses at each interim and annual reporting period.

Additionally, in January 2025, the FASB issued ASU No.

2025-01, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date .

This ASU amends the effective date of ASU No.

2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption of ASU No.

2024-03 is permitted.

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

73 unchanged sentences

Mortgage-backed securities 610 ( 3 ) 1 119,209 ( 26,170 ) 25 119,819 ( 26,173 )

Collateralized loan obligations — — — 37,536 ( 96 ) 6 37,536 ( 96 )

Corporate notes — — — 12,372 ( 1,378 ) 8 12,372 ( 1,378 )

13 unchanged sentences

$ 3,353 $ ( 89 ) 5 $ 615,436 $ ( 121,717 ) 205 $ 618,789 $ ( 121,806 )

The Company adopted ASU No.

2016-13 effective January 1, 2023 which requires credit losses on available-for-sale securities to be recorded in an allowance for credit losses.

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 December 31, 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 December 31, 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 December 31, 2024 and December 31, 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 December 31, 2024 and December 31, 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 $ 3,271 as of December 31, 2023, and was excluded from the estimate of credit losses.

Interest receivable on securities was $ 2,842 and $ 3,271 as of December 31, 2024 and December 31, 2023, respectively, and was excluded from the estimate of credit losses.

West Bancorporation, Inc.

2 unchanged sentences

(dollars in thousands, except per share data)

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.

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

Therefore, under the accounting principles effective at December 31, 2022, the Company did not consider these securities to have other than temporary impairment as of December 31, 2022.

Loans and Allowance for Credit Losses

10 unchanged sentences

The loan portfolio included $ 1,878,063 and $ 2,003,699 of fixed-rate loans and $ 1,129,950 and $ 928,118 of variable-rate loans as of December 31, 2024 and 2023, respectively.

Real estate loans of approximately $ 1,420,000 and $ 1,190,000 were pledged as security for FHLB advances as of December 31, 2023 and 2022.

Real estate loans of approximately $ 1,470,000 and $ 1,420,000 were pledged as security for FHLB advances as of December 31, 2024 and 2023, respectively.

The Company has had, and may be expected to have in the future, banking transactions in the ordinary course of business with directors, executive officers, their immediate families, and affiliated companies in which they are principal stockholders or executive officers (commonly referred to as related parties), all of which have been originated, in the opinion of management, on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated parties.

13 unchanged sentences

Allowance for Credit Losses for Loans

The Company adopted ASU No.

2016-13 on January 1, 2023, at which time the Company implemented the CECL model in estimating the ACL valuation account.

The following table details the changes in the ACL by loan segment for the year ended December 31, 2023.

The following tables detail the changes in the ACL by loan segment for the years ended December 31, 2024 and 2023.

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

Beginning balance $ 5,291 $ 3,668 $ 704 $ 142 $ 18,420 $ 117 $ 28,342

Adoption of CECL 677 ( 234 ) 121 ( 8 ) 1,911 ( 9 ) 2,458

Charge-offs ( 20 ) — — — — — ( 20 )

3 unchanged sentences

Ending balance $ 5,489 $ 4,354 $ 650 $ 200 $ 19,544 $ 195 $ 30,432

(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, improvement in qualitative risk factors related to those portfolio segments and/or changes in economic forecasts.

Prior to the adoption of ASU No.

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 years ended December 31, 2022 and 2021.

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

Beginning balance $ 4,804 $ 3,548 $ 357 $ 101 $ 16,575 $ 88 $ 25,473

Adoption of CECL 677 ( 234 ) 121 ( 8 ) 1,911 ( 9 ) 2,458

Charge-offs ( 55 ) ( 39 ) ( 40 ) — — — ( 134 )

Recoveries 36 2 2 5 — — 45

Provision for loan losses (1)

Provision for credit loss expense (1)

( 171 ) 391 264 44 ( 66 ) 38 500

Ending balance $ 5,291 $ 3,668 $ 704 $ 142 $ 18,420 $ 117 $ 28,342

Prior to the adoption of ASU No.

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

The following table presents the activity in the allowance for loan losses by segment for the year ended December 31, 2022.

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

20 unchanged sentences

Ending balance:

Individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ —

Collectively evaluated for impairment 4,804 3,548 357 101 16,575 88 25,473

Individually evaluated for credit losses $ — $ — $ — $ — $ — $ — $ —

Collectively evaluated for credit losses 5,291 3,668 704 142 18,420 117 28,342

Total $ 5,291 $ 3,668 $ 704 $ 142 $ 18,420 $ 117 $ 28,342

9 unchanged sentences

Ending balance:

Individually evaluated for impairment $ — $ — $ 322 $ — $ — $ — $ 322

Collectively evaluated for impairment 519,196 363,014 74,889 10,322 1,771,940 7,292 2,746,653

Individually evaluated for credit losses $ — $ — $ 296 $ — $ — $ — $ 296

Collectively evaluated for credit losses 531,594 413,477 106,392 14,618 1,854,510 10,930 2,931,521

Total $ 531,594 $ 413,477 $ 106,688 $ 14,618 $ 1,854,510 $ 10,930 $ 2,931,817

3 unchanged sentences

(dollars in thousands, except per share data)

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 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.

9 unchanged sentences

Subsequent recoveries, if any, are credited to the ACL when received.

The Company measures expected credit losses of loans on a collective (pool) basis when the loans share similar risk characteristics and uses a cash flow-based method to estimate expected credit losses for each of these pools.

The Company measures expected credit losses of loans on a collective (pool) basis when the loans share similar risk characteristics and uses a cash flow-based model to estimate expected credit losses for each of these pools.

The Company's methodology for estimating the ACL considers available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts.

30 unchanged sentences

Total $ 133 $ 296 $ 133 $ 296 $ — $ —

There was no interest income recognized on loans that were on nonaccrual for the years ended December 31, 2023 and 2022.

There was $ 91 and $ 0 interest income recognized on loans that were on nonaccrual for the years ended December 31, 2024 and 2023, respectively.

Interest income forgone on nonaccrual loans was $ 19 , $ 15 and $ 144 , respectively, during the years ended December 31, 2024, 2023 and 2022.

102 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 December 31, 2023 and 2022.

The following tables present the amortized cost basis of loans by loan segment, credit quality indicator and origination year, and the current period gross charge-off by loan segment and origination year, based on the analysis performed as of December 31, 2024 and 2023.

Term Loans by Origination Year

5 unchanged sentences

Total $ 102,199 $ 80,958 $ 79,834 $ 34,318 $ 17,460 $ 41,068 $ 158,395 $ 514,232

Current period gross writeoffs $ 37 $ — $ — $ — $ 18 $ — $ — $ 55

Current period gross charge-offs $ 16 $ — $ 4 $ — $ — $ — $ — $ 20

Construction, land and land development

4 unchanged sentences

Total $ 168,579 $ 144,604 $ 84,281 $ 27,584 $ 805 $ — $ 82,294 $ 508,147

Current period gross writeoffs $ — $ 39 $ — $ — $ — $ — $ — $ 39

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

1-4 family residential first mortgages

4 unchanged sentences

Total $ 12,573 $ 25,022 $ 17,803 $ 16,283 $ 10,251 $ 3,986 $ 1,940 $ 87,858

Current period gross writeoffs $ — $ 40 $ — $ — $ — $ — $ — $ 40

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

Pass $ 425 $ 2,721 $ 175 $ 443 $ 32 $ — $ 15,498 $ 19,294

3 unchanged sentences

Total $ 425 $ 2,721 $ 175 $ 443 $ 32 $ — $ 15,498 $ 19,294

Current period gross writeoffs $ — $ — $ — $ — $ — $ — $ — $ —

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

Pass $ 228,197 $ 141,894 $ 467,411 $ 431,448 $ 342,828 $ 218,440 $ 30,396 $ 1,860,614

3 unchanged sentences

Total $ 228,197 $ 141,894 $ 467,743 $ 431,697 $ 342,828 $ 218,440 $ 30,396 $ 1,861,195

Current period gross writeoffs $ — $ — $ — $ — $ — $ — $ — $ —

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

Consumer and other

4 unchanged sentences

Total $ 4,114 $ 600 $ 108 $ 214 $ 13 $ 113 $ 12,125 $ 17,287

Current period gross writeoffs $ — $ — $ — $ — $ — $ — $ — $ —

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

West Bancorporation, Inc.

3 unchanged sentences

Term Loans by Origination Year

As of December 31, 2022 2022 2021 2020 2019 2018 Prior Revolving Loans Total

December 31, 2023 2023 2022 2021 2020 2019 Prior Revolving Loans Total

Pass $ 147,971 $ 110,228 $ 48,291 $ 31,423 $ 6,510 $ 44,146 $ 143,025 $ 531,594

3 unchanged sentences

Total $ 147,971 $ 110,228 $ 48,291 $ 31,423 $ 6,510 $ 44,146 $ 143,025 $ 531,594

Current period gross writeoffs $ — $ — $ — $ — $ — $ — $ — $ —

Current period gross charge-offs $ 37 $ — $ — $ — $ 18 $ — $ — $ 55

Construction, land and land development

4 unchanged sentences

Total $ 126,608 $ 114,176 $ 64,797 $ 20,210 $ 1,458 $ — $ 86,228 $ 413,477

Current period gross writeoffs $ — $ — $ — $ — $ — $ — $ — $ —

Current period gross charge-offs $ — $ 39 $ — $ — $ — $ — $ — $ 39

1-4 family residential first mortgages

4 unchanged sentences

Total $ 46,910 $ 20,531 $ 19,670 $ 11,779 $ 3,959 $ 3,176 $ 663 $ 106,688

Current period gross writeoffs $ — $ — $ — $ — $ — $ 31 $ — $ 31

Current period gross charge-offs $ — $ 40 $ — $ — $ — $ — $ — $ 40

Pass $ 2,804 $ 288 $ 508 $ 98 $ 138 $ 16 $ 10,766 $ 14,618

3 unchanged sentences

Total $ 2,804 $ 288 $ 508 $ 98 $ 138 $ 16 $ 10,766 $ 14,618

Current period gross writeoffs $ — $ — $ — $ — $ — $ — $ — $ —

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

Pass $ 212,772 $ 519,783 $ 463,750 $ 359,032 $ 84,995 $ 195,967 $ 18,211 $ 1,854,510

3 unchanged sentences

Total $ 212,772 $ 519,783 $ 463,750 $ 359,032 $ 84,995 $ 195,967 $ 18,211 $ 1,854,510

Current period gross writeoffs $ — $ 451 $ — $ — $ — $ — $ — $ 451

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

Consumer and other

4 unchanged sentences

Total $ 1,740 $ 211 $ 392 $ 51 $ 17 $ 126 $ 8,393 $ 10,930

Current period gross writeoffs $ — $ — $ — $ — $ — $ — $ — $ —

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

West Bancorporation, Inc.

8 unchanged sentences

The ACL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the loan.

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 December 31, 2024

3 unchanged sentences

Total $ 133 $ — $ — $ 133 $ —

West Bancorporation, Inc.

and Subsidiary

Notes to Consolidated Financial Statements

(dollars in thousands, except per share data)

Impaired Loans

The following table summarizes the recorded investment in impaired loans by segment, broken down by loans with no related allowance and loans with a related allowance and the amount of that allowance as of December 31, 2022, prior to the adoption of ASU No.

2016-13 on January 1, 2023.

December 31, 2022

Investment Unpaid

Balance Related

With no related allowance recorded:

Commercial $ — $ — $ —

Construction, land and land development — — —

1-4 family residential first mortgages 322 322 —

Home equity — — —

Commercial — — —

Consumer and other — — —

With an allowance recorded:

Commercial — — —

Construction, land and land development — — —

1-4 family residential first mortgages — — —

Home equity — — —

Commercial — — —

Consumer and other — — —

Commercial — — —

Construction, land and land development — — —

As of December 31, 2023

Primary Type of Collateral

Real Estate Equipment Other Total ACL Allocation

1-4 family residential first mortgages $ 296 $ — $ — $ 296 $ —

Home equity — — —

Commercial — — —

Consumer and other — — —

Total impaired loans $ 322 $ 322 $ —

Total $ 296 $ — $ — $ 296 $ —

West Bancorporation, Inc.

2 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 years ended December 31, 2022 and 2021.

December 31, 2022 December 31, 2021

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 year ended December 31, 2022.

December 31, 2022

Average Recorded Investment Interest Income Recognized

With no related allowance recorded:

12 unchanged sentences

Consumer and other — —

3,915 — 13,002 —

Commercial — —

8 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 using the same models for the Company’s other loan portfolio segments described above.

The Company's allowance for credit losses for unfunded commitments was $ 2,544 as of December 31, 2023.

The Company's allowance for credit losses for unfunded commitments was $ 1,544 and $ 2,544 as of December 31, 2024 and 2023, respectively.

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.

During the year ended December 31, 2023, the Company recorded a credit loss expense of $200 associated with off-balance sheet credit exposures.

During the year ended December 31, 2024, the Company recorded a negative credit loss expense of $ 1,000 associated with off-balance sheet credit exposures compared to a credit loss expense of $ 200 for the year ended December 31, 2023.

West Bancorporation, Inc.

13 unchanged sentences

Operating Leases

The Company leases real estate for its main office, five branch offices and office space for operations departments under various operating lease agreements.

The lease agreements have maturity dates ranging from April 2024 to February 2033, some of which include options to renew at the Company's discretion.

The Company leases real estate for four branch offices and office space for operations departments under various operating lease agreements.

The lease agreements have maturity dates ranging from September 2030 to September 2036, some of which include options to renew at the Company's discretion.

If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the measurement of the right-of-use asset and lease liability.

1 unchanged sentence

The discount rate used in determining the lease liability for each individual lease was the FHLB fixed advance rate which corresponded with the remaining lease term as of January 1, 2019 for leases that existed at adoption of this accounting standard and as of the lease commencement date for leases entered into subsequent to January 1, 2019.

For leases that have been extended subsequent to January 1, 2019, the discount rate used was the FHLB fixed rate advance rate which corresponded with the remaining lease term as of the lease extension date.

The weighted average discount rates used in the measurement of the operating lease liabilities were 4.06 percent and 3.42 percent as of December 31, 2024 and 2023, respectively.

34 unchanged sentences

The Notes will mature on June 15, 2032 if they are not earlier redeemed.

Proceeds from this debt issuance were used to make a $ 58,650 capital injection into the Company’s subsidiary, West Bank.

Proceeds from this debt issuance were used to make a $ 58,650 capital injection into the Company’s subsidiary, West Bank to support organic growth.

The Notes were reported net of unamortized debt issuance costs of $ 612 and $ 860 as of December 31, 2024 and 2023, respectively.

5 unchanged sentences

The Company had fixed-rate FHLB advances totaling $ 270,000 and $ 315,000 as of December 31, 2024 and 2023, respectively.

Advances with a total of $ 295,000 have maturities of one month and are part of a rolling funding program associated with long-term interest rate swaps related to the interest cash flows of the rolling advances.

The Company also had one FHLB advance totaling $ 20,000 with a maturity date of November 2024 as of December 31, 2023.

As of December 31, 2024, all advances had maturities of one month and are part of a rolling funding program associated with long-term interest rate swaps related to the interest cash flows of the rolling advances.

The weighted average contractual rates on FHLB advances were 4.62 percent and 5.54 percent as of December 31, 2024 and December 31, 2023, respectively.

9 unchanged sentences

There were no balances outstanding at the Federal Reserve Bank discount window at December 31, 2024.

West Bank had borrowing capacity of approximately $ 89,000 through the BTFP.

The BTFP was established by the Federal Reserve in March 2023 to provide an additional source of liquidity against high-quality securities.

As of December 31, 2023, West Bank had pledged approximately $ 89,000 in eligible securities to facilitate participation in the program and no funds were borrowed from the BTFP.

The Federal Reserve has announced that it is ending the BTFP and will cease making new loans under this program on March 11, 2024.

Long-Term Debt

2 unchanged sentences

Interest under the term note is payable quarterly over five years.

Required quarterly principal payments of $ 1,250 began in May 2023, with the remaining balance due February 2027.

Required quarterly principal payments are $ 1,250 , with the remaining balance due February 2027.

The Company may make additional principal payments without penalty.

18 unchanged sentences

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.

Interest Rate Swaps Designated as a Cash Flow Hedge :

Interest Rate Swaps Designated as Cash Flow Hedges :

The Company had interest rate swaps designated as cash flow hedges with total notional amounts of $ 420,000 and $ 445,000 at December 31, 2024 and 2023, respectively.

As of December 31, 2024, the Company had swaps with a total notional amount of $ 270,000 that hedge the interest payments of rolling fixed-rate one-month funding consisting of FHLB advances or brokered deposits.

Also, as of December 31, 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.

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

In the second quarter of 2021, the Company repaid $ 50,000 of FHLB advances related to these terminated swaps as a result of excess liquidity and in response to market conditions.

Pre-tax losses of $ 3,600 were reclassified from AOCI and recorded in noninterest income at termination.

Also, as of December 31, 2024, the Company had swaps with a total notional amount of $ 40,000 that effectively convert 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.

At the inception of each hedge transaction, the Company represented that the underlying principal balance would remain outstanding throughout the hedge transaction, making it probable that sufficient interest payments would exist through the maturity date of the swaps.

12 unchanged sentences

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

The Company entered into forward-starting interest rate swaps with a total notional amount of $ 100,000 in January 2021 that were not accounting hedges.

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

West Bancorporation, Inc.

and Subsidiary

Notes to Consolidated Financial Statements

(dollars in thousands, except per share data)

The table below identifies the balance sheet category and fair values of the Company’s derivative instruments as of December 31, 2024 and 2023.

11 unchanged sentences

Fair value in other liabilities ( 14,284 ) ( 14,114 )

West Bancorporation, Inc.

and Subsidiary

Notes to Consolidated Financial Statements

(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 years ended December 31, 2024, 2023 and 2022.

1 unchanged sentence

Pre-tax gain recognized in other comprehensive income $ 9,759 $ 4,291 $ 23,595

Reclassification from AOCI into income:

Increase (decrease) in interest expense ( 10,456 ) ( 10,249 ) 206

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

The Company estimates there will be approximately $ 6,487 reclassified from accumulated other comprehensive income to reduce interest expense through December 31, 2025 related to cash flow hedges.

3 unchanged sentences

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

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

As of December 31, 2024 and 2023, the Company pledged $ 30 and $ 0 , respectively, of collateral to the counterparties in the form of cash on deposit.

As of December 31, 2024 and 2023, the Company’s counterparties pledged $ 24,160 and $ 22,340 , respectively, of collateral to the Company in the form of cash on deposit.

34 unchanged sentences

Income taxes $ 3,393 12.3 % $ 5,649 18.9 % $ 12,998 21.9 %

In 2024, the Company recorded a tax benefit of $ 1,842 for an energy-related investment tax credit associated with the construction of the Company’s new headquarters building.

The Company accounted for the investment tax credit using the flow-through method, recognizing the full benefit in 2024.

In 2022, the Company recorded a one-time increase in state income tax expense related to the June 2022 enactment of changes in the Iowa bank franchise tax rates.

23 unchanged sentences

New markets tax credit loan 474 389

Other 138 125

Net deferred tax assets before valuation allowance 35,244 36,066

2 unchanged sentences

As of December 31, 2024, the Company had approximately $ 51,049 of Iowa net operating loss carryforwards available to offset future Iowa taxable income.

The Company has recorded a valuation allowance against the tax effect of the Iowa net operating loss carryforwards, as management believes it is more likely than not that such carryforwards will expire without being utilized.

The Company has recorded a valuation allowance against the tax effect of the Iowa net operating loss carryforwards, as management believes it is more likely than not that a portion of such carryforwards will expire without being utilized.

Iowa net operating loss carryforwards of $ 502 expired in 2024 and the remainder will expire thereafter.

1 unchanged sentence

The West Bancorporation, Inc.

2021 Equity Incentive Plan (the 2021 Plan) was approved by the stockholders in April 2021.

2021 Equity Incentive Plan (as amended, the 2021 Plan) was originally approved by the stockholders in April 2021.

The 2021 Plan replaced the West Bancorporation, Inc.

3 unchanged sentences

The 2021 and 2017 Plans are administered by the Compensation Committee of the Board of Directors, which determines the specific individuals who will be granted awards under the 2021 Plan and the type and amount of any such awards.

The 2021 Plan was originally approved at the April 2021 annual stockholders’ meeting and authorized 625,000 shares, and at the April 2024 annual stockholders’ meeting, the Company obtained stockholder approval to increase the number of shares of common stock authorized for issuance under the 2021 Plan by 550,000 shares, from 625,000 shares to 1,175,000 shares.

All employees and directors of the Company and its subsidiary are eligible to become participants in the 2021 Plan.

Under the terms of the 2021 Plan, the Company may grant a total of 625,000 shares of the Company’s common stock as nonqualified and incentive stock options, stock appreciation rights and stock awards.

Under the terms of the 2021 Plan, the Company may grant a total of 1,175,000 shares of the Company’s common stock as stock awards and cash incentive awards.

As of December 31, 2024, 665,758 shares of the Company’s common stock remained available for future awards under the 2021 Plan.

5 unchanged sentences

All RSUs granted through December 31, 2024 under the 2021 and 2017 Plans were at no cost to the participants, and the participants will not be entitled to receive or accrue dividends until the RSUs have vested.

Each RSU entitles the participant to receive one share of common stock on the vesting date or upon the participant’s termination due to death or disability, or upon a change in control of the Company if the RSUs are not fully assumed or if the RSUs are assumed and the participant’s employment is thereafter terminated by the Company without cause or by the participant for good reason.

Each RSU entitles the participant to receive, to the extent earned, one share of common stock on the vesting date or upon the participant’s termination due to death or disability, for time-based RSUs, upon a change in control of the Company if the RSUs are not fully assumed or if the RSUs are assumed and the participant’s employment is thereafter terminated by the Company without cause or by the participant for good reason, or, for performance-based RSUs, upon a change in control of the Company.

If a participant terminates employment prior to the end of the continuous service period other than due to death, disability or retirement, the award is forfeited.

If a participant terminates service due to retirement, the RSUs will continue to vest, subject to provisions of the 2021 and 2017 Plans.

RSUs granted to employees prior to 2021 vest 20 percent per year over a five year period, and RSUs granted to directors vest after one year.

Beginning in 2021, the Company has granted time-based and performance-based RSU awards.

The Company grants time-based and performance-based RSU awards.

The time-based RSU awards granted to employees vest 20 percent per year over a five year period and have a one to three year post-vesting holding period, applicable to 50 percent of the shares.

The time-based RSU awards granted to directors vest after one year and have a one to three year post-vesting holding period, applicable to 50 percent of the shares.

The performance based RSU awards granted to employees cliff vest at the end of a three year performance period based upon the Company meeting certain performance metrics and have a one to three year post-vesting holding period applicable to 50 percent of the shares.

The time-based RSU awards granted to directors vest after one year and have a three year post-vesting holding period, applicable to 50 percent of the shares.

The performance based RSU awards granted to employees cliff vest at the end of a three year performance period based upon the Company meeting certain performance metrics and have a three year post-vesting holding period applicable to 50 percent of the shares.

The following table includes a summary of nonvested RSU activity for the years ended December 31, 2024, 2023 and 2022.

12 unchanged sentences

Total compensation costs, including director compensation, recorded for the RSUs were $ 2,509 , $ 3,111 and $ 3,357 for the years ended December 31, 2024, 2023 and 2022, respectively.

The tax expense related to vesting of RSUs totaled $ 5 for the year ended December 31, 2023.

The tax benefit related to vesting of RSUs totaled $ 2 and $ 385 for the years ended December 31, 2024 and 2022, respectively.

The tax expense related to vesting of RSUs totaled $ 5 for the year ended December 31, 2023.

As of December 31, 2024, there was $ 3,458 of unrecognized compensation cost related to nonvested RSUs, and the weighted average period over which these remaining costs are expected to be recognized was approximately 1.5 years.

401(k) Retirement Plan

The Company has a defined contribution plan covering substantially all of its employees.

401(k) Retirement Plan and Employee Stock Ownership Plan

The Company has a combined defined contribution plan and employee stock ownership plan covering substantially all of its employees.

Matching and discretionary contributions are determined annually by the Board.

The Company matched 100 percent of the first six percent of employee deferrals and made an annual discretionary contribution of two percent of eligible employee compensation for the year ended December 31, 2023, and four percent of eligible employee compensation for the years ended December 31, 2022 and 2021.

The Company matched 100 percent of the first six percent of employee deferrals and made an annual discretionary contribution of two percent of eligible employee compensation for the years ended December 31, 2024 and 2023, and four percent of eligible employee compensation for the year ended December 31, 2022.

Total matching and discretionary contribution expense for the years ended December 31, 2024, 2023 and 2022, totaled $ 1,273 , $ 1,207 and $ 1,395 , respectively.

18 unchanged sentences

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

Other comprehensive income (loss) before reclassifications ( 98,637 ) 17,739 ( 80,898 )

Other comprehensive income before reclassifications 12,158 3,221 15,379

Amounts reclassified from accumulated other

2 unchanged sentences

Balance, December 31, 2023 ( 91,233 ) 7,710 ( 83,523 )

Other comprehensive income before reclassifications 12,158 3,221 15,379

Other comprehensive income (loss) before reclassifications ( 6,167 ) 7,373 1,206

Amounts reclassified from accumulated other

comprehensive income 836 ( 7,876 ) ( 7,040 )

Net current period other comprehensive income (loss) 12,447 ( 4,499 ) 7,948

Net current period other comprehensive loss ( 5,331 ) ( 503 ) ( 5,834 )

Balance, December 31, 2024 $ ( 96,564 ) $ 7,207 $ ( 89,357 )

60 unchanged sentences

Commitments to lend are subject to borrowers’ continuing compliance with existing credit agreements.

The Company adopted ASU No.

2016-13 effective January 1, 2023 which requires an allowance for credit losses on off-balance sheet credit exposure.

See Note 4 for additional information.

The Company’s commitments consisted of the following amounts as of December 31, 2024 and 2023.

22 unchanged sentences

The Company had commitments to invest in qualified affordable housing projects totaling $ 861 and $ 1,649 as of December 31, 2024 and 2023, respectively.

West Bank entered into a construction contract for the construction of a new headquarters building in West Des Moines, Iowa in 2022.

West Bank will pay the contractor a contract price consisting of the cost of work plus a fee, with anticipated construction completed in 2024.

As of December 31, 2023, there was a remaining commitment of $ 13,019 under this contract.

West Bancorporation, Inc.

and Subsidiary

Notes to Consolidated Financial Statements

(dollars in thousands, except per share data)

Concentrations of credit risk :

3 unchanged sentences

Standby letters of credit were granted primarily to commercial borrowers.

West Bancorporation, Inc.

and Subsidiary

Notes to Consolidated Financial Statements

(dollars in thousands, except per share data)

Contingencies :

17 unchanged sentences

Management reviewed the valuation process used by the third party and believed the process was valid as of December 31, 2024.

On a quarterly basis, management corroborates the fair values of the portfolio by obtaining pricing from an independent financial market data provider and compares the two sets of fair values.

On a quarterly basis, management corroborates the fair values of the portfolio by obtaining pricing from an independent financial market data vendor and compares the two sets of fair values.

Any significant variances are reviewed and investigated.

19 unchanged sentences

Corporate notes 12,372 — 12,372 —

Derivative instrument, interest rate swaps 25,427 — 25,427 —

Derivative instruments, interest rate swaps 24,181 — 24,181 —

Financial liabilities:

Derivative instrument, interest rate swaps $ 15,102 $ — $ 15,102 $ —

Derivative instruments, interest rate swaps $ 14,554 $ — $ 14,554 $ —

Description Total Level 1 Level 2 Level 3

6 unchanged sentences

Corporate notes 11,607 — 11,607 —

Derivative instrument, interest rate swaps 31,593 — 31,593 —

Derivative instruments, interest rate swaps 25,427 — 25,427 —

Financial liabilities:

Derivative instrument, interest rate swaps $ 15,309 $ — $ 15,309 $ —

Derivative instruments, interest rate swaps $ 15,102 $ — $ 15,102 $ —

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).

Individually evaluated loans that are deemed to have impairment are classified within Level 3 of the fair value hierarchy and are recorded at fair value, which is based on the value of the collateral securing these loans.

As of both December 31, 2024 and 2023, 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.

Fair value is based on the value of the collateral securing these loans.

In determining the estimated net realizable value of the underlying collateral of individually evaluated 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.

85 unchanged sentences

Income before income taxes 22,310 22,313 45,207

Income tax benefits ( 1,824 ) ( 1,192 ) ( 457 )

Income tax benefit ( 1,740 ) ( 1,824 ) ( 1,192 )

Net income $ 24,050 $ 24,137 $ 46,399

18 unchanged sentences

(Increase) decrease in other assets ( 778 ) 189 ( 116 )

Increase in accrued expenses and other liabilities 4 440 5

Increase (decrease) in accrued expenses and other liabilities ( 76 ) 4 440

Net cash provided by operating activities 20,844 19,738 17,678

15 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-K

Item 8. Financial Statements and Supplementary Data