What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-04-23 compared with 2025-10-23 · 131 added, 235 removed, 326 unchanged (53% of the section changed)

1 unchanged sentence

"SAFE HARBOR" CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to the Company’s business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to the Company’s business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meanings of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Forward-looking statements may appear throughout this report.

These forward-looking statements are generally identified by the words “believes,” “expects,” “intends,” “anticipates,” “projects,” “future,” “confident,” “may,” “should,” “will,” “strategy,” “plan,” “opportunity,” “will be,” “will likely result,” “will continue” or similar references, or references to estimates, predictions or future events.

Such forward-looking statements are based upon certain underlying assumptions, risks and uncertainties.

Because of the possibility that the underlying assumptions are incorrect or do not materialize as expected in the future, actual results could differ materially from these forward-looking statements.

Risks and uncertainties that may affect future results include:

These forward-looking statements are generally identified by the words “believes,” “expects,” “intends,” “anticipates,” “projects,” “forecasts,” “plans,” “targets,” “future,” “confident,” “potentially,” “probably,” “outlook,” “may,” “should,” “would,” “could,” “will,” “strategy,” “plan,” “opportunity,” “will be,” “will likely result,” “will continue” or similar references, as well as the negative of such words, or references to estimates, predictions or future events.

Forward-looking statements are not historical facts but instead represent management's current expectations and forecasts regarding future events, many of which are inherently uncertain and outside of our control.

Such forward-looking statements are based upon certain underlying assumptions, known and unknown risks and uncertainties.

Because of the possibility that the underlying assumptions are incorrect or do not materialize as expected in the future, actual results may differ, possibly materially, from these forward-looking statements.

Risks and uncertainties that may affect future results include, but are not limited to:

interest rate risk, including the effects of changes in interest rates;

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the threat or imposition of domestic or foreign tariffs or other governmental policies impacting the global supply chain and the value of products produced by our commercial borrowers;

effects on the U.S.

economy resulting from actions taken by the federal government, including executive orders and immigration enforcement;

changes in local, national and international economic conditions, including the level and impact of inflation, and future monetary policies of the Federal Reserve in response thereto, and possible recession;

5 unchanged sentences

the monetary, trade and other regulatory policies of the U.S.

acts of war or terrorism, including the ongoing Israeli-Palestinian conflict and the Russian invasion of Ukraine, widespread disease or pandemics, or other adverse external events;

the effects of acts of war or terrorism, including the wars in Iran and Ukraine and the military conflict between Israel and Hamas in the Middle East;

widespread disease, pandemics or epidemics, or other adverse external events;

risks related to climate change and the negative impact it may have on our customers and their business;

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potential changes in federal policy and at regulatory agencies;

the impact of a continued shutdown of the U.S.

talent and labor shortages;

and any other risks described in the “Risk Factors” sections of this and other reports filed by the Company with the SEC.

The Company undertakes no obligation to revise or update such forward-looking statements to reflect current or future events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

The Company cautions readers not to place undue reliance on any forward-looking statements.

Moreover, any of the forward-looking statements that the Company makes in this report or the documents the Company files with or furnishes to the SEC are based only on information then actually known to the Company and upon management's beliefs and assumptions at the time they are made, which may turn out to be wrong because of inaccurate assumptions they might make, because of the factors described above or because of other factors that the Company cannot foresee.

Forward-looking statements speak only as of the date they are made, and the Company does not undertake and specifically disclaims any obligation to revise or update such forward-looking statements to reflect current or future events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

West Bancorporation, Inc.

Management's Discussion and Analysis

(dollars in thousands, except share and per share data)

CRITICAL ACCOUNTING POLICIES

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Management's Discussion and Analysis

(in thousands, except share and per share data)

(dollars in thousands, except share and per share data)

NON-GAAP FINANCIAL MEASURES

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The following table reconciles the non-GAAP financial measures of net interest income and net interest margin on a FTE basis and efficiency ratio on an adjusted and FTE basis to their most directly comparable measures under GAAP.

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

2025 2024 2025 2024

Three Months Ended March 31,

Reconciliation of net interest income and net interest margin on a FTE basis to GAAP:

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Tax-equivalent adjustment (1)

61 29 186 166

Net interest income on a FTE basis (non-GAAP) 24,457 20,921

17 unchanged sentences

Management's Discussion and Analysis

(in thousands, except share and per share data)

The following discussion describes the consolidated operations and financial condition of the Company, West Bank and West Bank's special purpose subsidiaries (which are invested in new markets tax credit activities).

Results of operations for the three and nine months ended September 30, 2025 are compared to the results for the same periods in 2024, and the consolidated financial condition of the Company as of September 30, 2025 is compared to that as of December 31, 2024.

(dollars in thousands, except share and per share data)

The following discussion describes the consolidated operations and financial condition of the Company, West Bank and West Bank's special purpose subsidiaries.

Results of operations for the three months ended March 31, 2026 are compared to the results for the same period in 2025, and the consolidated financial condition of the Company as of March 31, 2026 is compared to that as of December 31, 2025.

This discussion and analysis should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 26, 2026.

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and southern Minnesota, which includes the cities of Rochester, Owatonna, Mankato and St.

Net income for the three months ended September 30, 2025 was $9,314, or $0.55 per diluted common share, compared to $5,952, or $0.35 per diluted common share, for the three months ended September 30, 2024.

The Company's annualized return on average assets and return on average equity for the three months ended September 30, 2025 were 0.92 percent and 15.25 percent, respectively, compared to 0.60 percent and 10.41 percent, respectively, for the three months ended September 30, 2024.

Net interest income for the three months ended September 30, 2025 increased $4,541, or 25.3 percent, compared to the three months ended September 30, 2024.

The increase in net interest income was primarily due to an increase in interest income on securities purchased under agreements to resell and decreases in interest expense on deposits and borrowed funds, partially offset by a decrease in interest income on securities.

Noninterest income increased $144 for the three months ended September 30, 2025 compared to the same period in 2024.

Noninterest expense increased $658 during the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to increases in salaries and employee benefits and occupancy and equipment expense.

Net income for the nine months ended September 30, 2025 was $25,135, or $1.48 per diluted common share, compared to $16,953, or $1.00 per diluted common share, for the nine months ended September 30, 2024.

The Company's annualized return on average assets and return on average equity for the nine months ended September 30, 2025 were 0.84 percent and 14.27 percent, respectively, compared to 0.59 percent and 10.18 percent, respectively, for the nine months ended September 30, 2024.

Net interest income for the nine months ended September 30, 2025 increased $12,835, or 24.7 percent, compared to the nine months ended September 30, 2024.

Net income for the three months ended March 31, 2026 was $10,572, or $0.61 per diluted common share, compared to $7,842, or $0.46 per diluted common share, for the three months ended March 31, 2025.

The Company's annualized return on average assets and return on average equity for the three months ended March 31, 2026 were 1.06 percent and 15.91 percent, respectively, compared to 0.81 percent and 13.84 percent, respectively, for the three months ended March 31, 2025.

Net interest income for the three months ended March 31, 2026 increased $3,530, or 16.9 percent, compared to the three months ended March 31, 2025.

The increase in net interest income was primarily due to increases in interest income on deposits with banks and securities purchased under agreements to resell and decreases in interest expense on deposits and borrowed funds, partially offset by a decrease in interest income on securities.

Noninterest income increased $152 for the nine months ended September 30, 2025 compared to the same period in 2024.

Noninterest expense increased $2,144 during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to increases in salaries and employee benefits and occupancy and equipment expense.

Total loans outstanding increased $4,028, or 0.1 percent, to $3,008,888 during the first nine months of 2025.

The credit quality of the loan portfolio remained pristine, as evidenced by the Company's ratio of nonperforming loans to total assets of 0.00 percent as of both September 30, 2025 and December 31, 2024.

As of both September 30, 2025 and December 31, 2024, the allowance for credit losses was 1.01 percent of total outstanding loans.

Management believed the allowance for credit losses at September 30, 2025 was adequate to absorb expected losses in the loan portfolio as of that date.

West Bancorporation, Inc.

Management's Discussion and Analysis

(in thousands, except share and per share data)

Noninterest income increased $311 for the three months ended March 31, 2026 compared to the same period in 2025, primarily due to an increase in trust services revenue.

Noninterest expense increased $402 during the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to an increase in salaries and employee benefits, partially offset by a decrease in FDIC insurance expense.

Total loans outstanding decreased $10,052, or 0.3 percent, to $2,991,638 during the first three months of 2026.

The credit quality of the loan portfolio remained pristine, as evidenced by the Company's ratio of nonperforming loans to total assets of 0.00 percent as of both March 31, 2026 and December 31, 2025.

As of both March 31, 2026 and December 31, 2025, the allowance for credit losses was 1.02 percent of total outstanding loans.

Management believed the allowance for credit losses at March 31, 2026 was adequate to absorb expected losses in the loan portfolio as of that date.

On a quarterly basis, the Company compares three key performance metrics to those of our identified peer group.

The peer group for 2025 consists of 20 Midwestern, publicly traded financial institutions, including Bank First Corporation, Bridgewater Bancshares Inc., ChoiceOne Financial Services, Inc., Civista Bancshares, Inc., Equity Bancshares, Inc., Farmers National Banc Corp., Farmers & Merchants Bancorp., First Business Financial Services, Inc., First Financial Corp., First Mid Bancshares, Inc., German American Bancorp, Inc., HBT Financial Inc., Hills Bancorporation, Isabella Bank Corporation, LCNB Corp., Mercantile Bank Corporation, MidWest One Financial Group, Inc., Nicolet Bankshares, Inc., Peoples Bancorp, Inc., and Southern Missouri Bancorp, Inc.

The Company is in the middle of the group in terms of asset size.

The peer group for 2026 consists of 20 Midwestern, publicly traded financial institutions, including Ames National Corporation, Bank First Corporation, Bridgewater Bancshares Inc., CF Bankshares, Inc., ChoiceOne Financial Services, Inc., Civista Bancshares, Inc., Equity Bancshares, Inc., Farmers National Banc Corp., Farmers & Merchants Bancorp., First Business Financial Services, Inc., First Financial Corp., First Mid Bancshares, Inc., First Savings Financial Group, German American Bancorp, Inc., HBT Financial Inc., Hills Bancorporation, Isabella Bank Corporation, LCNB Corp., Mercantile Bank Corporation, and Southern Missouri Bancorp, Inc.

The Company ranks in the middle of the peer group by total assets.

The Company's goal is to perform at or near the top of this peer group relative to what we consider to be three key metrics:

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Peer Group Range (2)

As of and for the nine months ended September 30, 2025 As of and for the six months ended June 30, 2025 As of and for the six months ended June 30, 2025

As of and for the three months ended March 31, 2026 As of and for the year ended December 31, 2025 As of and for the year ended December 31, 2025

Return on average equity 15.91% 13.47% 3.40% - 14.45%

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(2) Latest data available.

At its meeting on October 22, 2025, the Company's Board of Directors declared a regular quarterly cash dividend of $0.25 per common share.

The dividend is payable on November 19, 2025, to stockholders of record on November 5, 2025.

West Bancorporation, Inc.

Management's Discussion and Analysis

(in thousands, except share and per share data)

(dollars in thousands, except share and per share data)

At its meeting on April 22, 2026, the Company's Board of Directors declared a regular quarterly cash dividend of $0.25 per common share.

The dividend is payable on May 20, 2026, to stockholders of record on May 6, 2026.

West Bancorporation, Inc.

Management's Discussion and Analysis

(dollars in thousands, except share and per share data)

RESULTS OF OPERATIONS

The following table shows selected financial results and measures for the three and nine months ended September 30, 2025 compared with the same periods in 2024.

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

2025 2024 Change Change % 2025 2024 Change Change %

The following table shows selected financial results and measures for the three months ended March 31, 2026 compared with the same period in 2025.

Three Months Ended March 31,

2026 2025 Change Change %

Net income $ 10,572 $ 7,842 $ 2,730 34.81 %

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6.69 % 5.83 % 0.86 %

As of September 30,

As of March 31,

2026 2025 Change

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Management's Discussion and Analysis

(in thousands, except share and per share data)

(dollars in thousands, except share and per share data)

Net Interest Income

The following tables present average balances and related interest income or interest expense, with the resulting annualized average yield or rate by category of interest-earning assets or interest-bearing liabilities.

The following table presents average balances and related interest income or interest expense, with the resulting annualized average yield or rate by category of interest-earning assets or interest-bearing liabilities.

Interest income and the resulting net interest income

are shown on a FTE basis.

Data for the three months ended September 30:

Average Balance Interest Income/Expense Yield/Rate

2025 2024 Change Change-

% 2025 2024 Change Change-

% 2025 2024 Change

Interest-earning assets:

Commercial $ 499,754 $ 507,127 $ (7,373) (1.45) % $ 8,182 $ 8,514 $ (332) (3.90) % 6.50 % 6.68 % (0.18) %

Real estate (3)

2,436,758 2,469,145 (32,387) (1.31) % 33,647 33,721 (74) (0.22) % 5.48 % 5.43 % 0.05 %

Consumer and other 23,450 15,000 8,450 56.33 % 399 282 117 41.49 % 6.75 % 7.48 % (0.73) %

Total loans 2,959,962 2,991,272 (31,310) (1.05) % 42,228 42,517 (289) (0.68) % 5.66 % 5.65 % 0.01 %

Taxable 425,238 468,100 (42,862) (9.16) % 2,643 3,261 (618) (18.95) % 2.49 % 2.79 % (0.30) %

Tax-exempt (3)

121,446 141,214 (19,768) (14.00) % 770 822 (52) (6.33) % 2.54 % 2.33 % 0.21 %

Total securities 546,684 609,314 (62,630) (10.28) % 3,413 4,083 (670) (16.41) % 2.50 % 2.68 % (0.18) %

Deposits with banks 186,474 149,102 37,372 25.06 % 2,087 2,041 46 2.25 % 4.44 % 5.45 % (1.01) %

Securities purchased under

agreements to resell 97,034 — 97,034 N/A 1,258 — 1,258 N/A 5.07 % — % 5.07 %

Total interest-earning assets (3)

$ 3,790,154 $ 3,749,688 $ 40,466 1.08 % 48,986 48,641 345 0.71 % 5.13 % 5.16 % (0.03) %

Interest-bearing liabilities:

Interest-bearing demand $ 457,323 $ 453,589 $ 3,734 0.82 % 1,830 2,167 (337) (15.55) % 1.59 % 1.90 % (0.31) %

Savings and money market 1,817,719 1,609,695 208,024 12.92 % 15,021 15,566 (545) (3.50) % 3.28 % 3.85 % (0.57) %

Time deposits 547,133 665,938 (118,805) (17.84) % 5,688 8,343 (2,655) (31.82) % 4.12 % 4.98 % (0.86) %

Total interest-bearing deposits 2,822,175 2,729,222 92,953 3.41 % 22,539 26,076 (3,537) (13.56) % 3.17 % 3.80 % (0.63) %

Borrowed Funds:

Federal funds purchased and

other short-term borrowings 1 8,132 (8,131) (99.99) % — 115 (115) (100.00) % 4.52 % 5.62 % (1.10) %

Subordinated notes, net 80,058 79,792 266 0.33 % 1,107 1,112 (5) (0.45) % 5.49 % 5.55 % (0.06) %

Federal Home Loan Bank

advances 270,000 315,000 (45,000) (14.29) % 2,292 2,748 (456) (16.59) % 3.37 % 3.47 % (0.10) %

Long-term debt 39,407 44,407 (5,000) (11.26) % 486 601 (115) (19.13) % 4.90 % 5.38 % (0.48) %

Total borrowed funds 389,466 447,331 (57,865) (12.94) % 3,885 4,576 (691) (15.10) % 3.96 % 4.07 % (0.11) %

Total interest-bearing

liabilities $ 3,211,641 $ 3,176,553 $ 35,088 1.10 % 26,424 30,652 (4,228) (13.79) % 3.26 % 3.84 % (0.58) %

Net interest income (FTE) (4)

$ 22,562 $ 17,989 $ 4,573 25.42 %

Net interest spread (FTE) 1.87 % 1.32 % 0.55 %

Net interest margin (FTE) (4)

2.36 % 1.91 % 0.45 %

West Bancorporation, Inc.

Management's Discussion and Analysis

(in thousands, except share and per share data)

Data for the nine months ended September 30:

Data for the three months ended March 31:

Average Balance Interest Income/Expense Yield/Rate

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Borrowed funds:

Federal funds purchased and

other short-term borrowings 1 101,166 (101,165) (100.00) % — 4,248 (4,248) (100.00) % 4.63 % 5.61 % (0.98) %

Subordinated notes, net 80,187 79,924 263 0.33 % 1,104 1,105 (1) (0.09) % 5.58 % 5.61 % (0.03) %

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Management's Discussion and Analysis

(in thousands, except share and per share data)

(dollars in thousands, except share and per share data)

The Company's largest component of net income is net interest income, which is the difference between interest earned on interest-earning assets, consisting primarily of loans and securities, and interest paid on interest-bearing liabilities, consisting of deposits and borrowings.

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Interest rates earned and paid are also affected by general economic conditions, particularly changes in market interest rates, and by competitive factors, government policies and actions of regulatory authorities.

The Federal Reserve decreased the target federal funds interest rate by a total of 100 basis points from September through December of 2024, which impacted the comparability of the net interest margin between the three and nine months ended September 30, 2025 and the three and nine months ended September 30, 2024.

Additionally, in September 2025, the Federal Reserve decreased the target federal funds interest rate by 25 basis points.

The FOMC decreased the target federal funds interest rate by a total of 75 basis points from September through December of 2025, which will impact the comparability of net interest margin between 2026 and 2025.

Net interest margin on a FTE basis, a non-GAAP financial measure, is a measure of the net return on interest-earning assets and is computed by dividing annualized tax-equivalent net interest income by total average interest-earning assets for the period.

The net interest margin for the three and nine months ended September 30, 2025 increased by 45 and 42 basis points, respectively, compared to the three and nine months ended September 30, 2024.

Tax-equivalent net interest income for the three and nine months ended September 30, 2025 increased $4,573 and $12,855, respectively, when compared to the same periods in 2024.

Tax-equivalent interest income on loans decreased $289 for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

The decrease in tax-equivalent interest income on loans for the three months ended September 30, 2025 compared to the same period in 2024 was primarily due to a decrease in average loan balances.

Tax-equivalent interest income on loans increased $452 for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

The increase in interest income on loans during the nine months ended September 30, 2025 compared to the same period in 2024 was driven primarily by an increase in the average loan balances.

The average balance of loans for the nine months ended September 30, 2025 increased $9,842, compared to the nine months ended September 30, 2024.

The yield on the loan portfolio increased by 1 basis point for both the three and nine months ended September 30, 2025 compared to the same periods in 2024.

The net interest margin for the three months ended March 31, 2026 increased 31 basis points compared to the three months ended March 31, 2025.

Tax-equivalent net interest income for the three months ended March 31, 2026 increased $3,536, when compared to the same period in 2025.

Tax-equivalent interest income on loans decreased $37 for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

The decrease in tax-equivalent interest income on loans during the three months ended March 31, 2026 compared to the same period in 2025 was driven primarily by a decrease in the average loan balances, partially offset by an increase in loan yields.

The average balance of loans for the three months ended March 31, 2026 decreased $44,621, compared to the three months ended March 31, 2025.

The yield on the loan portfolio increased by 7 basis points for the three months ended March 31, 2026 compared to the same period in 2025.

While the fixed-rate loan portfolio has benefited from higher prevailing market rates for originations and renewals compared to the roll-off rates, the yield on the variable-rate loan portfolio has decreased due to reductions in the prime rate and SOFR rates driven by the reductions in the federal funds rate since September 2025.

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however, as long as market rates remain higher than the yield on the fixed-rate portfolio, renewals and originations will continue to increase the yield on the fixed-rate portfolio.

Tax-equivalent interest income on securities decreased $670 and $2,135, respectively, for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024.

The decrease was primarily due to the decrease in average balances of securities.

This decrease in average balances of securities was driven by calls and principal paydowns on securities, which have been reinvested in the loan portfolio, deposits with banks and securities purchased under agreements to resell.

Interest income on deposits with banks increased $46 and $2,696, respectively, for the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024.

The increase was primarily due to the increase in the average balances of interest-bearing deposits with banks.

Tax-equivalent interest income on securities decreased $749 for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

The decrease was primarily due to a decrease in average balances of securities.

This decrease in average balances of securities was driven by a sale of securities in November 2025 and calls and principal paydowns on securities.

Proceeds from the sale and principal paydowns have been reinvested in the loan portfolio, deposits with banks and securities purchased under agreements to resell.

Interest income on deposits with banks increased $430 for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

The increase was primarily due to the increase in the average balances of interest-bearing deposits with banks, partially offset by the decline in yield.

This increase in balance sheet liquidity was driven by the growth in average deposit balances.

Additionally, the Company began investing in securities purchased under agreements to resell in June 2025.

These produced interest income of $1,258 and $1,280 for the three and nine months ended September 30, 2025.

The average balance of interest-bearing deposits increased $92,953 and $225,225, respectively, for the three and nine months ended September 30, 2025 compared to the same periods in 2024.

The rate paid on interest-bearing deposits decreased 63 and 53 basis points for the three and nine months ended September 30, 2025 compared to the same periods in 2024.

The decrease in the cost of deposits was primarily driven by the reductions in the federal funds rate since September of 2024.

These produced interest income of $1,617 for the three months ended March 31, 2026.

Interest expense on deposits decreased $2,162 for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

The decrease in the interest expense on deposits was primarily due to the decline in interest rates paid on deposits of 40 basis points for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

The decrease in rates paid was primarily driven by the reductions in the federal funds rate since September of 2025.

The decline in interest rates paid on deposits was partially offset by the increase in average deposit balances.

The average balance of interest-bearing deposits increased $79,808 for the three months ended March 31, 2026 compared to the same period in 2025.

West Bancorporation, Inc.

Management's Discussion and Analysis

(in thousands, except share and per share data)

Interest expense on borrowed funds decreased $691 and $5,622, respectively, for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024.

The average balance of borrowed funds decreased $57,865 and $150,917, respectively, for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024.

The largest drivers of the decrease in average borrowed funds balances were decreases in average balances of federal funds purchased and other short-term borrowings and FHLB advances.

The average balance of federal funds purchased and other short-term borrowings decreased $8,131 and $101,165, respectively, for the three and nine months ended September 30, 2025, compared to the same periods in 2024 primarily due to increases in average customer deposits.

The average balance of FHLB advances decreased by $45,000 for both the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024.

FHLB advances with a total balance of $45,000 matured in the fourth quarter of 2024.

(dollars in thousands, except share and per share data)

Interest expense on borrowed funds decreased $113 for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

The average balance of borrowed funds decreased $16,236 for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

The largest driver of the decrease in average borrowed funds balances was the decrease in average balances on long-term debt, which decreased by $16,499 for the three months ended March 31, 2026, compared to the same period in 2025.

This decrease in average long-term debt balances was due to principal payments on the long-term debt.

Credit Loss Expense and the Related Allowance for Credit Losses

2 unchanged sentences

The allowance for credit losses is management's estimate of expected lifetime losses in the loan portfolio as of the balance sheet date.

The Company recorded no credit loss expense for loans for the three and nine months ended September 30, 2025.

The Company recorded a credit loss expense for loans of $1,000 for the three and nine months ended September 30, 2024.

The credit loss expense for loans recorded in 2024 was primarily due to changes in the forecasted loss rates which were driven by increases in forecasted unemployment rates.

The Company recorded no credit loss expense related to unfunded commitments for the three and nine months ended September 30, 2025, compared to a negative credit loss expense of $1,000 related to unfunded commitments for the three and nine months ended September 30, 2024.

The negative credit loss expense related to unfunded commitments recorded in 2024 was primarily due to decreases in the balance of unfunded commitments resulting primarily from the funding of construction loans.

Management believed the allowance for credit losses at September 30, 2025 was adequate to absorb expected losses in the loan portfolio as of that date.

The Company recorded no credit loss expense for loans or unfunded commitments for the three months ended March 31, 2026 and 2025.

Management believed the allowance for credit losses at March 31, 2026 was adequate to absorb expected losses in the loan portfolio as of that date.

Factors management considers in establishing an appropriate allowance include:

24 unchanged sentences

Management's Discussion and Analysis

(in thousands, except share and per share data)

(dollars in thousands, except share and per share data)

West Bank's policy is to charge off loans when, in management's opinion, a loan or a portion of a loan is deemed uncollectible.

Commercially reasonable efforts are made to maximize subsequent recoveries.

The following table summarizes the activity in the Company's allowance for credit losses on loans for the three and nine months ended September 30, 2025 and 2024 and related ratios.

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

2025 2024 Change 2025 2024 Change

The following table summarizes the activity in the Company's allowance for credit losses on loans for the three months ended March 31, 2026 and 2025 and related ratios.

Three Months Ended March 31,

2026 2025 Change

Balance at beginning of period $ 30,525 $ 30,432 $ 93

15 unchanged sentences

Management's Discussion and Analysis

(in thousands, except share and per share data)

Noninterest Income

The following tables show the variance from the prior year in the noninterest income categories shown in the Consolidated Statements of Income.

Three Months Ended September 30,

(dollars in thousands, except share and per share data)

Noninterest Income

2025 2024 Change Change %

Service charges on deposit accounts $ 491 $ 459 $ 32 6.97 %

Debit card usage fees 477 500 (23) (4.60) %

Trust services 894 828 66 7.97 %

Increase in cash value of bank-owned life insurance 308 287 21 7.32 %

Other income 333 285 48 16.84 %

Total noninterest income $ 2,503 $ 2,359 $ 144 6.10 %

Nine Months Ended September 30,

The following table shows the variance from the prior year in the noninterest income categories shown in the Consolidated Statements of Income.

Three Months Ended March 31,

Noninterest income:

1 unchanged sentence

Service charges on deposit accounts $ 508 $ 471 $ 37 7.86 %

Debit card usage fees 1,401 1,448 (47) (3.25) %

Debit card interchange income 472 446 26 5.83 %

Trust services 1,010 777 233 29.99 %

2 unchanged sentences

Total noninterest income $ 2,554 $ 2,243 $ 311 13.87 %

West Bancorporation, Inc.

Management's Discussion and Analysis

(in thousands, except share and per share data)

The increase in trust services revenue in the three months ended March 31, 2026 compared to the same period in 2025 was primarily due to the increase in trust assets and trust accounts since March 31, 2025.

Noninterest Expense

The following tables show the variance from the prior year in the noninterest expense categories shown in the Consolidated Statements of Income.

The following table shows the variance from the prior year in the noninterest expense categories shown in the Consolidated Statements of Income.

In addition, accounts within the “other expenses” category that represent a significant portion of the total or a significant variance are shown below.

Three Months Ended September 30,

Three Months Ended March 31,

Noninterest expense:

6 unchanged sentences

Professional fees 278 308 (30) (9.74) %

Director fees 195 223 (28) (12.56) %

Other expenses:

Insurance expense 186 197 (11) (5.58) %

Business development 249 216 33 15.28 %

Trust 243 202 41 20.30 %

Consulting fees 70 61 9 14.75 %

Marketing 22 12 10 83.33 %

Low income housing projects amortization 114 123 (9) (7.32) %

New markets tax credit project amortization and management

fees 76 230 (154) (66.96) %

All other 505 470 35 7.45 %

Total other expenses 1,411 1,477 (66) (4.47) %

Total noninterest expense $ 13,550 $ 12,892 $ 658 5.10 %

Nine Months Ended September 30,

Noninterest expense:

2025 2024 Change Change %

Salaries and employee benefits $ 21,804 $ 20,481 $ 1,323 6.46 %

Occupancy and equipment 6,087 5,225 862 16.50 %

Data processing 1,923 2,239 (316) (14.11) %

Technology and software 2,371 2,153 218 10.13 %

FDIC insurance 1,894 1,861 33 1.77 %

Professional fees 914 740 174 23.51 %

Director fees 603 658 (55) (8.36) %

Other expenses:

Insurance expense 239 294 (55) (18.81) %

Business development 236 215 21 9.77 %

Trust 566 495 71 14.34 %

Consulting fees 73 79 (6) (7.59) %

6 unchanged sentences

Total noninterest expense $ 13,465 $ 13,063 $ 402 3.08 %

Salaries and employee benefits increased for the three months ended March 31, 2026 compared to the same period in 2025 due to the combination of normal merit increases and an increase in full-time equivalent employees since March 31, 2025.

FDIC insurance expense decreased for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to a decrease in the assessment rate.

New markets tax credit project amortization declined with the expiration of the related tax credit.

West Bancorporation, Inc.

Management's Discussion and Analysis

(in thousands, except share and per share data)

Salaries and employee benefits increased for the three and nine months ended September 30, 2025 compared to the same periods in 2024 due primarily to an increase in incentive compensation related accruals.

Occupancy and equipment expense increased for the three and nine months ended September 30, 2025 compared to the three and nine months September 30, 2024 primarily due to an increase in occupancy costs related to new bank buildings.

The Company's new headquarters, which opened in April 2024, contributed to the increase for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, and the new branch building in Owatonna, Minnesota, which opened in January 2025, contributed to the increase for the three and nine months ended September 30, 2025 compared to the same periods in 2024.

Insurance expense increased for the nine months ended September 30, 2025 compared to the same period in 2024 due to increased coverage related to these new bank buildings and general increases in insurance costs.

Technology and software expense increased for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 due to ongoing updates in information technology and security solutions.

New market tax credit project amortization declined with the expiration of the related tax credit.

(dollars in thousands, except share and per share data)

Income Tax Expense

The Company recorded income tax expense of $2,140 (18.7 percent of pre-tax income) and $6,698 (21.0 percent of pre-tax income) for the three and nine months ended September 30, 2025, compared with $1,475 (19.9 percent of pre-tax income) and $4,037 (19.2 percent of pre-tax income) for the three and nine months ended September 30, 2024.

The decrease in effective tax rate for the three months ended September 30, 2025 compared to the same period in 2024 was due to a change in estimate of energy-related investment tax credits in the third quarter of 2025.

The increase in effective tax rate for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was primarily due to the expiration of the new markets tax credit at the end of 2024.

The tax rates for the first nine months of 2025 and 2024 were impacted by total year-to-date tax credits of approximately $495 and $1,131, respectively.

The Company recorded income tax expense of $2,902 (21.5 percent of pre-tax income) for the three months ended March 31, 2026, compared with $2,193 (21.9 percent of pre-tax income) for the three months ended March 31, 2025.

The tax rates for the first three months of 2026 and 2025 were impacted by total year-to-date tax credits of approximately $140 and $165, respectively.

The Company's consolidated income tax rate differs from the federal statutory income tax rate in each period, primarily due to tax-exempt interest income, the tax-exempt increase in cash value of bank-owned life insurance, disallowed interest expense, and state income taxes.

Additionally, for the nine months ended September 30, 2025, a tax benefit of $85 was recorded as a result of the increase in fair value of restricted stock over the vesting period, compared to a tax benefit of $2 for the nine months ended September 30, 2024.

Additionally, for the three months ended March 31, 2026 and 2025, a tax benefit of $211 and $67, respectively, was recorded as a result of the increase in fair value of restricted stock over the vesting period.

West Bancorporation, Inc.

Management's Discussion and Analysis

(in thousands, except share and per share data)

(dollars in thousands, except share and per share data)

FINANCIAL CONDITION

The Company had total assets of $3,985,480 as of September 30, 2025, compared to total assets of $4,014,991 as of December 31, 2024.

Changes in the balance sheet included increases in securities purchased under agreements to resell and stockholders' equity and decreases in deposits and interest-earning deposits in banks.

The Company had total assets of $4,010,973 as of March 31, 2026, compared to total assets of $4,142,244 as of December 31, 2025.

Changes in the balance sheet included increases in securities purchased under agreements to resell and stockholders' equity and decreases in interest-earning deposits in banks, securities available for sale, loans and deposits.

Cash and Cash Equivalents

As of September 30, 2025, the Company held securities purchased under agreements to resell of $96,792 compared to none at December 31, 2024.

The Company uses these instruments as short-term secured investments which have a maturity of approximately 30 days.

As of March 31, 2026, the Company held securities purchased under agreements to resell of $141,742 compared to $121,413 at December 31, 2025.

The Company uses these instruments as short-term secured investments which have monthly maturities.

Balances will fluctuate based on the Company's liquidity and investment strategies.

Securities available for sale decreased by $6,709 during the nine months ended September 30, 2025.

This decrease was primarily due to calls and principal paydowns on securities, partially offset by a decrease in unrealized losses on securities since December 31, 2024.

Management concluded unrealized losses in the portfolio as of September 30, 2025 are the result of increases in risk-free market interest rates since the securities were purchased and are not an indication of declining credit quality.

Securities available for sale decreased by $12,037 during the three months ended March 31, 2026.

This decrease was due to calls and principal paydowns on securities and an increase in unrealized losses on securities since December 31, 2025.

Management concluded unrealized losses in the portfolio as of March 31, 2026 are the result of increases in risk-free market interest rates since the securities were purchased and are not an indication of declining credit quality.

Unrealized losses are recorded in accumulated other comprehensive loss, net of tax.

The Company expects the securities portfolio as a percentage of total assets to decrease over time as the proceeds from paydowns and maturities may be used for loan growth or repayment of borrowed funds.

As of September 30, 2025, approximately 62 percent of the available for sale securities portfolio consisted of government agency guaranteed collateralized mortgage obligations and mortgage-backed securities.

As of March 31, 2026, approximately 62 percent of the available for sale securities portfolio consisted of government agency guaranteed collateralized mortgage obligations and mortgage-backed securities.

Management believes these securities have little to no credit risk and provide cash flows for liquidity and repricing opportunities.

Loans and Nonperforming Assets

Loans outstanding increased $4,028 from $3,004,860 as of December 31, 2024 to $3,008,888 as of September 30, 2025.

Changes in the loan portfolio during the first nine months of 2025 included an increase of $51,040 in commercial real estate loans and a decrease of $59,487 in construction, land and land development loans.

Loans outstanding decreased $10,052 from $3,001,690 as of December 31, 2025 to $2,991,638 as of March 31, 2026.

Changes in the loan portfolio during the first three months of 2026 included decreases of $50,774 in construction, land and land development loans and $33,636 in commercial loans and increases of $45,996 in 1-4 family residential first mortgage loans and $28,423 in commercial real estate loans.

We continue to experience notable loan payoffs as a result of secondary market refinancings and asset and business sales.

The change in loan mix is primarily due to reclassifications resulting from completed construction projects moving to permanent financing and commercial loan restructurings adding real estate collateral.

In accordance with regulatory guidelines, the Company exercises heightened risk management practices when non-owner occupied commercial real estate lending exceeds 300 percent of total risk-based capital or construction, land and land development loans exceed 100 percent of total risk-based capital.

Although the commercial real estate portfolio exceeded these regulatory guidelines as of September 30, 2025, they were within the Company's established policy limits and management believes that the Company has appropriate risk management policies and procedures to regularly monitor the commercial real estate portfolio.

Although the commercial real estate portfolio exceeded these regulatory guidelines as of March 31, 2026, they were within the Company's established policy limits and management believes that the Company has appropriate risk management policies and procedures to regularly monitor the commercial real estate portfolio.

An analysis of the Company's non-owner occupied commercial real estate portfolio as of December 31, 2025 was presented in the Company's Annual Report on Form 10-K, filed with the SEC on February 26, 2026, and the Company has not experienced any material changes to that portfolio since December 31, 2025.

The Company had no nonaccrual loans or loans past due 90 days and still accruing interest as of March 31, 2026 and December 31, 2025.

Additionally, the Company had no loan restructurings or other real estate owned as of March 31, 2026 and December 31, 2025.

Deposits decreased $133,498, or 3.8 percent, during the first three months of 2026.

Brokered deposits decreased to $116,476 at March 31, 2026, from $154,564 at December 31, 2025.

Excluding brokered deposits, deposits decreased $95,410, or 2.9 percent, during the first three months of 2026.

The decline in deposits was due to normal cash flow fluctuations of our core depositors.

Deposit inflows and outflows can be influenced by prevailing market interest rates, competition, local and national economic conditions, normal operating cycles of public fund deposits and fluctuations in our business customers' own liquidity needs.

West Bancorporation, Inc.

Management's Discussion and Analysis

(in thousands, except share and per share data)

The following table sets forth the amount of nonperforming assets held by the Company and common ratio measurements of those assets as of the dates shown.

September 30, 2025 December 31, 2024 Change

Nonaccrual loans $ — $ 133 $ (133)

Loans past due 90 days and still accruing interest — — —

Loan restructurings (1)

Total nonperforming loans — 133 (133)

Other real estate owned — — —

Total nonperforming assets $ — $ 133 $ (133)

Nonperforming loans to total loans 0.00 % 0.00 % 0.00 %

Nonperforming assets to total assets 0.00 % 0.00 % 0.00 %

(1) While loan restructurings made to borrowers experiencing financial difficulty (loan restructurings) are commonly reported by the industry as nonperforming, those not classified in the nonaccrual category are accruing interest due to payment performance.

Loan restructurings on nonaccrual status are categorized as nonaccrual.

There were no loan restructurings categorized as nonaccrual as of September 30, 2025 or December 31, 2024.

Deposits decreased $51,079, or 1.5 percent, during the first nine months of 2025.

Brokered deposits decreased to $204,832 at September 30, 2025, from $266,418 at December 31, 2024.

Excluding brokered deposits, deposits increased $10,507, or 0.3 percent, during the first nine months of 2025.

In the first nine months of 2025, the Company entered into three interest rate collar agreements with a total notional amount of $100,000 to mitigate interest rate risk on certain customer deposits.

The structure of the interest rate collars is such that the Company pays the counterparty an incremental amount if the index rate falls below the floor rate.

Conversely, the Company receives an incremental amount if the index rate rises above the cap rate.

(dollars in thousands, except share and per share data)

West Bank participates in a reciprocal deposit network which enables depositors to receive FDIC insurance coverage on deposits otherwise exceeding the maximum insurable amount.

As of September 30, 2025, estimated uninsured deposits, which exclude deposits in reciprocal deposit networks, brokered deposits and public funds protected by state programs, were approximately 28.6 percent of total deposits.

As of March 31, 2026, estimated uninsured deposits, which exclude deposits in reciprocal deposit networks, brokered deposits and public funds protected by state programs, were approximately 27.0 percent of total deposits.

Borrowed Funds

The Company had $270,000 of FHLB advances outstanding at September 30, 2025, all of which are one-month rolling advances hedged with long-term interest rate swaps.

The Company had $270,000 of FHLB advances outstanding at March 31, 2026, all of which are one-month rolling advances hedged with long-term interest rate swaps.

The interest rate swaps that hedge the interest rates on these FHLB advances have maturity dates ranging from July 2026 through June 2029 and fixed rates ranging from 1.86 percent to 4.32 percent.

4 unchanged sentences

Liquidity management is conducted on both a daily and a long-term basis.

Investments in liquid assets are adjusted based on expected loan demand, projected loan and securities maturities and payments, expected deposit flows and the objectives set by the Company's asset-liability management policy.

The Company had liquid assets (cash and cash equivalents) of $232,932 as of September 30, 2025 compared with $243,478 as of December 31, 2024.

West Bancorporation, Inc.

Management's Discussion and Analysis

(in thousands, except share and per share data)

Investments in liquid assets are adjusted based on expected loan demand, projected loan and security maturities and payments, expected deposit flows and the objectives set by the Company's asset-liability management policy.

The Company had liquid assets (cash and cash equivalents) of $361,978 as of March 31, 2026 compared with $471,086 as of December 31, 2025.

Our deposit growth strategy emphasizes core deposit growth.

1 unchanged sentence

The Company utilizes brokered deposits and other wholesale funding to supplement core deposit fluctuations and loan growth.

At September 30, 2025, the Company had $204,832 in brokered deposits, which included fixed-rate deposits and variable-rate deposits with terms through February 2027.

As of September 30, 2025, West Bank had additional borrowing capacity available from the FHLB of approximately $545,000, as well as approximately $53,000 through the Federal Reserve discount window and $75,000 through unsecured federal funds lines of credit with correspondent banks.

Net cash from operating activities contributed $34,686 to liquidity for the nine months ended September 30, 2025.

Management believed that the combination of high levels of liquid assets, unencumbered securities, cash flows from operations, and additional borrowing capacity were sufficient to meet our liquidity needs as of September 30, 2025.

The Company had remaining commitments to invest in qualified affordable housing projects totaling $1,488 and $861 as of September 30, 2025 and December 31, 2024, respectively.

The Company's total stockholders' equity increased to $255,133 at September 30, 2025 from $227,875 at December 31, 2024.

The increase was primarily the result of growth in retained earnings and the increase in the market value of our available for sale investment portfolio.

While accumulated other comprehensive losses reduce tangible common equity, they have no impact on regulatory capital.

At September 30, 2025, the Company's tangible common equity as a percent of tangible assets was 6.40 percent, compared to 5.68 percent as of December 31, 2024.

At March 31, 2026, the Company had $116,476 in brokered deposits, which included fixed-rate deposits with terms through September 2026 and variable-rate deposits with terms through February 2027.

As of March 31, 2026, West Bank had additional borrowing capacity available from the FHLB of approximately $674,000, as well as approximately $37,000 through the Federal Reserve discount window and $75,000 through unsecured federal funds lines of credit with correspondent banks.

Net cash from operating activities contributed $12,885 to liquidity for the three months ended March 31, 2026.

The Company had remaining commitments to invest in qualified affordable housing projects totaling $1,329 and $1,383 as of March 31, 2026 and December 31, 2025, respectively.

The Company's total stockholders' equity increased to $270,743 at March 31, 2026 from $265,985 at December 31, 2025.

The increase was primarily the result of growth in retained earnings.

At March 31, 2026, the Company's tangible common equity as a percent of tangible assets was 6.75 percent, compared to 6.42 percent as of December 31, 2025.

The Company and West Bank are subject to various regulatory capital requirements administered by federal and state banking agencies.

2 unchanged sentences

The Company's and West Bank's capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Management believed the Company and West Bank met all capital adequacy requirements to which they were subject as of September 30, 2025.

Management believed the Company and West Bank met all capital adequacy requirements to which they were subject as of March 31, 2026.

West Bancorporation, Inc.

Management's Discussion and Analysis

(in thousands, except share and per share data)

(dollars in thousands, except share and per share data)

The Company's and West Bank's capital amounts and ratios are presented in the following table.

3 unchanged sentences

Amount Ratio Amount Ratio Amount Ratio Amount Ratio

As of September 30, 2025

As of March 31, 2026

Total Capital (to Risk-Weighted Assets)

25 unchanged sentences

A banking organization with a capital conservation buffer of less than the required amount will be subject to limitations on capital distributions, including dividend payments, and certain discretionary bonus payments to executive officers.

At September 30, 2025, the capital ratios for the Company and West Bank were sufficient to meet the conservation buffer.

At March 31, 2026, the capital ratios for the Company and West Bank were sufficient to meet the conservation buffer.

(dollars in thousands, except share and per share data)

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 2. Management’s Discussion and Analysis