What changed in this filing

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Item 1A. Risk Factors

2026-02-26 compared with 2025-02-20 · 40 added, 50 removed, 321 unchanged (22% of the section changed)

33 unchanged sentences

and Subsidiary

If the loans that are collateralized by real estate become troubled and the value of the real estate has been significantly impaired, then we may not be able to recover the full contractual amount of principal and interest that we anticipated at the time of originating the loans, which could cause us to charge off all or a portion of the loans.

If the loans that are collateralized by real estate become troubled and the value of the real estate has been significantly impaired, we may not be able to recover the full contractual amount of principal and interest that we anticipated at the time of originating the loans, which could cause us to charge off all or a portion of the loans.

This could lead to an increased provision for credit losses and adversely affect our operating results and financial condition.

50 unchanged sentences

If we are forced to liquidate any of those investments prior to maturity, including because of a lack of liquidity, we would recognize as a charge to earnings the losses attributable to those securities.

Our securities portfolio has an average duration of 6.4 years, so we expect an increase in unrealized losses in rising interest rate environments.

Failure to maintain effective internal controls over financial reporting could impair our ability to accurately and timely report our financial results and could increase the risk of fraud.

53 unchanged sentences

Our efforts to monitor and manage liquidity risk may not be successful or sufficient to deal with dramatic or unanticipated reductions in our liquidity.

If this were to occur and additional short-term borrowings or debt is needed for liquidity purposes in the future, there can be no assurance that such borrowings or debt would be available or, if available, would be on favorable terms.

If this were to occur and additional short-term borrowings or debt are needed for liquidity purposes in the future, there can be no assurance that such borrowings or debt would be available or, if available, would be on favorable terms.

If we increase our short-term borrowings or debt, our cost of funds will increase, thereby reducing our net interest income, or we may need to sell a portion of our investment portfolio, which, depending upon market conditions, could result in the Company or West Bank realizing losses.

At December 31, 2025, our borrowed funds decreased to $376.4 million, compared to $392.6 million at December 31, 2024.

The overall decrease included reductions of $150.3 million in federal funds purchased and other short-term borrowings, $25.0 million in FHLB advances associated with long-term interest rate swaps and $20.0 million in FHLB advances with a fixed interest rate.

Although we believe West Bank’s current sources of funds are adequate for its liquidity needs, there can be no assurance in this regard for the future.

The competition for banking and financial services in our market areas is high, which could adversely affect our financial condition and results of operations.

We operate in highly competitive markets and face strong competition in originating loans, seeking deposits and offering our other services.

We compete in making loans, attracting deposits, and recruiting and retaining talented employees.

We operate in highly competitive markets and face strong competition in originating loans, attracting deposits and offering our other services.

We also compete in recruiting and retaining talented employees.

The Des Moines metropolitan market area, in particular, has attracted many new financial institutions within the last two decades.

18 unchanged sentences

Should any events or circumstances that could undermine our reputation occur, there can be no assurance that any lost revenue from customers opting to move their business to another institution and the additional costs and expenses that we may incur in addressing such issues would not adversely affect our financial condition and results of operations.

West Bancorporation, Inc.

and Subsidiary

We are subject to various legal claims and litigation.

3 unchanged sentences

Any financial liability, litigation costs or reputational damage caused by these legal claims could have a material adverse impact on our business, financial condition and results of operations.

West Bancorporation, Inc.

and Subsidiary

The soundness of other financial institutions could adversely affect us.

25 unchanged sentences

The loss of services of a few of our senior executive officers or key personnel, or the inability to recruit and retain qualified personnel in the future, could have an adverse effect on our business, financial condition or results of operations, at least in the short term.

West Bancorporation, Inc.

and Subsidiary

Labor shortages and a failure to attract and retain qualified employees could negatively impact our business, results of operations and financial condition.

2 unchanged sentences

A sustained labor shortage or increased turnover rates within our employee base could lead to increased costs, such as increased compensation expense to attract and retain employees.

West Bancorporation, Inc.

and Subsidiary

In addition, if we are unable to hire and retain employees capable of performing at a high-level, or if mitigation measures we take to respond to a decrease in labor availability have unintended negative effects, our business could be adversely affected.

1 unchanged sentence

Changes in interest rates could negatively impact our financial condition and results of operations.

Our earnings and cash flows are largely dependent on our net interest income, which is the difference between the interest income we earn on interest-earning assets, such as loans and investment securities, and the interest expense that we pay on interest-bearing liabilities, such as deposits and borrowings.

Our earnings and cash flows are largely dependent on our net interest income, which is the difference between the interest income we earn on interest-earning assets, such as loans, investment securities and short-term investments, and the interest expense that we pay on interest-bearing liabilities, such as deposits and borrowings.

Additionally, changes in interest rates also affect our ability to fund our operations with client deposits and the fair value of securities in our investment portfolio and derivatives portfolio.

1 unchanged sentence

Interest rates are sensitive to many factors, including government monetary and fiscal policies, domestic and international economic and political conditions and competition.

Following a series of significant increases to the target federal funds rate made by the Federal Reserve throughout 2022 and 2023 as part of an effort to combat elevated levels of inflation affecting the U.S.

economy, the Federal Reserve began enacting incremental rate cuts at the end of 2024.

While additional rate cuts are anticipated in 2025, the occurrence or significance of changes in interest rates cannot be predicted.

Our interest-earning assets and interest-bearing liabilities may react in different degrees to changes in market interest rates.

2 unchanged sentences

We cannot control or accurately predict changes in market rates of interest.

A large percentage of our securities have fixed interest rates and are classified as available for sale.

As is the case with many financial institutions, our emphasis on increasing the development of core deposits, those with no stated maturity date, has resulted in our interest-bearing liabilities having a shorter duration than our interest-earning assets.

This imbalance can create significant earnings volatility because interest rates change over time.

As interest rates have increased in recent periods, our cost of funds has increased more rapidly than the yields on a substantial portion of our interest-earning assets.

In addition, the market value of our securities portfolio has declined in recent periods.

At December 31, 2024, we had $128.8 million of net unrealized losses in the securities portfolio.

In line with the foregoing, we have experienced and may continue to experience an increase in the cost of interest-bearing liabilities, primarily due to raising the rates we pay on some of our deposit products to stay competitive within our market, and an increase in borrowing costs stemming from increases in the federal funds rate.

Community banks, such as West Bank, rely more heavily than larger institutions on net interest income as a revenue source.

Larger institutions generally have more diversified sources of noninterest income.

West Bancorporation, Inc.

and Subsidiary

It is currently expected that, during 2026, the Federal Open Market Committee of the Federal Reserve (“FOMC”) will continue to closely monitor interest rates, in part to manage the rate of inflation to its preferred level.

In the fourth quarter of 2025, the FOMC decreased the target range for the federal funds rate to a range of 3.50 percent to 3.75 percent, following a series of significant increases beginning in 2022.

If the FOMC further alters the targeted federal funds rates, overall interest rates likely will continue to change, which may impact the entire national economy.

Changes in interest rates directly impact the Company’s net interest income and also may affect the demand for loans and the value of fixed-rate investment securities.

These effects from interest rate changes or from other sustained economic stress or a recession, among other matters, could have a material adverse effect on the Company’s business, financial condition, liquidity and results of operations.

In addition, the Company could be prevented from altering the interest rates charged on loans or from maintaining the interest rates offered on deposits and money market savings accounts due to “price” competition from other banks and financial institutions with which the Company competes.

As of December 31, 2025, the Company had $540.4 million of non-maturity, noninterest-bearing deposit accounts and $2.4 billion of non-maturity interest-bearing deposit accounts.

The Company does not know what market rates will be throughout 2026, including the frequency and significance with which the FOMC may continue to change the target range for the federal funds rate.

If the Company fails to offer interest at a sufficient level to keep these non-maturity deposits, core deposits may be reduced, which would require the Company to obtain funding in other ways or risk slowing future asset growth.

Our business is subject to domestic and, to a lesser extent, international economic conditions and other factors, many of which are beyond our control and could materially and adversely affect us.

3 unchanged sentences

limitations on the availability or increases in the cost of credit and capital;

inflation or interest rates;

recent developments and events in the financial services industry, including the large-scale deposit withdrawals over a short period of time that resulted in several bank failures;

inflation or changes in interest rates;

high unemployment;

uncertainty in U.S.

trade policies, legislation, treaties and tariffs;

changes in U.S.

trade and foreign policies, legislation, treaties and tariffs;

natural disasters;

acts of war or terrorism;

widespread disease or pandemics;

military conflicts and acts of war or terrorism;

immigration enforcement, widespread disease or pandemics;

or a combination of these or other factors.

Such unfavorable conditions could materially and adversely affect us.

The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including the current conflicts between Russia and Ukraine and between Israel and Palestine, which are increasing volatility in commodity and energy prices, creating supply chain issues and causing instability in financial markets and political systems.

West Bancorporation, Inc.

and Subsidiary

The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflicts, including the current conflicts between Russia and Ukraine and between Israel and Palestine and recent military activity in Venezuela, which are increasing volatility in commodity and energy prices, creating supply chain issues and causing instability in financial markets and political systems.

Sanctions imposed by the United States and other countries in response to such conflicts could further adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability.

1 unchanged sentence

Continued elevated levels of inflation could adversely impact our business, results of operations and financial condition.

The United States recently experienced elevated levels of inflation throughout 2022 and 2023.

Inflationary pressures moderated in 2024, but future inflation metrics are uncertain for 2025 and onward.

The United States has experienced elevated levels of inflation in recent years, with the consumer price index climbing approximately 2.7 percent in 2025, before seasonal adjustment.

Continued elevated levels of inflation could have complex effects on our business, results of operations and financial condition, some of which could be materially adverse.

8 unchanged sentences

Failure to meet these capital and other regulatory requirements could affect customer confidence, our ability to grow, our costs of funds, FDIC insurance costs, our ability to pay dividends on common stock and to make distributions on our junior subordinated debentures, our ability to make acquisitions, our ability to make certain discretionary bonus payments to executive officers, and our results of operations and financial condition.

West Bancorporation, Inc.

and Subsidiary

Risks Related to the Supervision and Regulation of the Banking Industry and Government Policies

6 unchanged sentences

Although we have policies and procedures designed to mitigate the risk of any such violations, there can be no assurance that such violations will not occur.

West Bancorporation, Inc.

and Subsidiary

Current or proposed regulatory or legislative changes to laws applicable to the financial industry may impact the profitability of our business activities and may change certain of our business practices, including our ability to offer new products, obtain financing, attract deposits, make loans and achieve satisfactory interest spreads, and could expose us to additional costs, including increased compliance costs.

In addition, political developments, including the possible implementation of policies proposed by the new presidential administration, including tariffs, mass deportations and tax or financial regulations or the appointment of new personnel in regulatory agencies, add uncertainty to the implementation, scope and timing of regulatory reforms.

In addition, political developments, including the possible implementation of policies proposed by the presidential administration, including tariffs, mass deportations and tax or financial regulations or the appointment of new personnel in regulatory agencies, add uncertainty to the implementation, scope and timing of regulatory reforms.

These changes may also require us to invest significant management attention and resources to make any necessary changes to operations in order to comply and could therefore materially and adversely affect our business, financial condition and results of operations.

7 unchanged sentences

economy, the Federal Reserve began enacting incremental rate cuts in 2024.

While additional rate cuts are anticipated in 2025, the occurrence or significance of changes in interest rates cannot be predicted.

Given the complex factors affecting the strength of the U.S.

economy, including uncertainties regarding the persistence of inflation, geopolitical developments such as the conflicts in the Middle East and the Russian invasion of Ukraine and resulting disruptions in the global energy market, tight labor market conditions domestically, supply chain issues both domestically and internationally and the potential effects of the new presidential administration, including the possible implementation of new tariffs, mass deportations and changes to tax or other financial regulations, there is a meaningful risk that the Federal Reserve and other central banks may maintain high interest rates or elect to make fewer or smaller interest rate cuts than anticipated, thereby limiting economic growth and potentially causing an economic recession or other political instability.

This could decrease loan demand, harm the credit characteristics of our existing loan portfolio, impact our net interest income, impact the value of our investment securities portfolio, and decrease the value of collateral securing loans.

economy, the Federal Reserve enacted several rate cuts in 2024 and 2025.

The occurrence or significance of additional changes in the target federal funds interest rate in 2026 and beyond is not known at this time.

The monetary policies and regulations of the Federal Reserve have had a significant effect on our operating results and those of commercial banks in the past and are expected to continue to do so in the future.

The specific impact of such policies upon our business, financial condition and results of operations cannot be predicted.

West Bancorporation, Inc.

and Subsidiary

Other Risks Related to the Banking Industry in General

13 unchanged sentences

Accordingly, digital asset service providers which, at present are not subject to the same degree of scrutiny and oversight as banking organizations and other financial institutions, are becoming active competitors to more traditional financial institutions.

West Bancorporation, Inc.

and Subsidiary

The process of eliminating banks as intermediaries, known as “disintermediation”, could result in the loss of fee income, as well as the loss of customer deposits and the related income generated from deposits.

12 unchanged sentences

Our customers are also facing changes in energy and commodity prices driven by climate change, as well as new regulatory requirements resulting in increased operational costs.

West Bancorporation, Inc.

and Subsidiary

Risks Related to West Bancorporation’s Common Stock

9 unchanged sentences

These fluctuations have often been unrelated or disproportionate to the operating performance of particular companies.

These broad market fluctuations, as well as general economic, systemic, political and market conditions, such as recessions, loss of investor confidence, interest rate changes, government shutdowns, presidential elections, international trade wars or international currency fluctuations may negatively affect the market price of our common stock.

These broad market fluctuations, as well as general economic, systemic, political and market conditions, such as recessions, loss of investor confidence, interest rate changes, government shutdowns, actions taken by the federal government, elections, international trade wars or international currency fluctuations may negatively affect the market price of our common stock.

Moreover, our operating results may fluctuate and vary from period to period due to the risk factors set forth herein.

1 unchanged sentence

Our stock price could fluctuate significantly in response to the impact of these risk factors.

West Bancorporation, Inc.

and Subsidiary

Issuing additional common or preferred stock may adversely affect the market price of our common stock, and capital may not be available when needed.

8 unchanged sentences

As of December 31, 2025, the Company had $20.6 million in junior subordinated debentures outstanding that were issued to the Company’s subsidiary trust, West Bancorporation Capital Trust I, and $60.0 million aggregate principal amount outstanding of the Company’s 5.25% Fixed-to-Floating Rate Subordinated Notes due in 2032 (the Notes).

The junior subordinated debentures and the Notes are senior to the Company’s shares of common stock.

The junior subordinated debentures and the Notes are senior in order of payment to the Company’s shares of common stock.

As a result, the Company must make payments on the junior subordinated debentures (and the related trust preferred securities (TPS)) and the Notes before any dividends can be paid on its common stock, and in the event of the Company’s bankruptcy, dissolution or liquidation, the holders of the debentures and the Notes must be satisfied before any distributions can be made to the holders of the common stock.

2 unchanged sentences

Interest payments on the junior subordinated debentures underlying the TPS are classified as “dividends” by the Federal Reserve supervisory policies and therefore are subject to applicable restrictions and approvals imposed by the Federal Reserve Board.

West Bancorporation, Inc.

and Subsidiary

Our ability to pay dividends is subject to certain limitations and restrictions, and there is no guarantee that we will be able to continue paying the same level of dividends in the future that we have paid in the past or that we will be able to pay future dividends at all.

8 unchanged sentences

Any future payment of dividends will depend on the Bank’s ability to make distributions and payments to us, as these distributions and payments are our principal source of funds to pay dividends.

West Bancorporation, Inc.

and Subsidiary

Also, banking institutions that do not maintain a capital conservation buffer, comprised of Common Equity Tier 1 Capital, of 2.5% above the regulatory minimum capital requirements will face constraints on the payment of dividends, stock repurchases and discretionary bonus payments to executive officers based on the amount of the shortfall, unless prior regulatory approval is obtained.

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 1A. Risk Factors