WEST BANCORPORATION INC 10-Q

Item 1. Financial Statements West Bancorporation, Inc. and Subsidiary Consolidated Balance Sheet (unaudited) (in thousands, except share and per share data) June 30, 2026 December 31, 2025 ASSETS Cash and due from banks $ 30,986 $ 25,171 Interest-earning deposits with banks 260,633 324,502 Securities purchased under agreements to resell 142,080 121,413 Cash and cash equivalents 433,699 471,086 Securities available for sale, at fair value 446,575 468,447 Federal Home Loan Bank stock, at cost 15,168 15,167 Loans 2,950,114 3,001,690 Allowance for credit losses ( 30,530 ) ( 30,525 ) Loans, net 2,919,584 2,971,165 Premises and equipment, net 106,626 108,380 Accrued interest receivable 11,260 11,982 Bank-owned life insurance 46,751 46,192 Deferred tax assets, net 25,152 25,925 Other assets 24,849 23,900 Total assets $ 4,029,664 $ 4,142,244 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits: Noninterest-bearing demand $ 553,660 $ 540,358 Interest-bearing demand 506,574 577,814 Savings and money market 1,805,507 1,839,508 Time 479,159 510,790 Total deposits 3,344,900 3,468,470 Subordinated notes, net 80,287 80,156 Federal Home Loan Bank advances 270,000 270,000 Long-term debt 23,750 26,250 Accrued expenses and other liabilities 29,685 31,383 Total liabilities 3,748,622 3,876,259 COMMITMENTS AND CONTINGENCIES (NOTE 8) STOCKHOLDERS' EQUITY Preferred stock, $ 0.01 par value; authorized 50,000,000 shares; no shares issued and outstanding at June 30, 2026 and December 31, 2025 — — Common stock, no par value; authorized 50,000,000 shares; 17,043,743 and 16,940,785 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively 3,000 3,000 Additional paid-in capital 37,312 37,231 Retained earnings 307,408 294,259 Accumulated other comprehensive loss ( 66,678 ) ( 68,505 ) Total stockholders' equity 281,042 265,985 Total liabilities and stockholders' equity $ 4,029,664 $ 4,142,244 See Notes to Consolidated Financial Statements. 4 Table of Contents West Bancorporation, Inc. and Subsidiary Consolidated Statements of Income (unaudited) Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per share data) 2026 2025 2026 2025 Interest income: Loans, including fees $ 42,031 $ 41,666 $ 82,977 $ 82,654 Securities: Taxable 2,097 2,685 4,240 5,473 Tax-exempt 636 742 1,274 1,485 Deposits with banks 2,130 2,847 4,177 4,464 Securities purchased under agreements to resell 1,580 22 3,197 22 Total interest income 48,474 47,962 95,865 94,098 Interest expense: Deposits 19,184 22,676 38,445 44,099 Subordinated notes 1,110 1,104 2,214 2,209 Federal Home Loan Bank advances 2,274 2,259 4,518 4,494 Long-term debt 385 504 782 1,022 Total interest expense 22,953 26,543 45,959 51,824 Net interest income 25,521 21,419 49,906 42,274 Credit loss expense (benefit) — — — — Net interest income after credit loss expense 25,521 21,419 49,906 42,274 Noninterest income: Service charges on deposit accounts 476 486 984 957 Debit card interchange income 514 478 986 924 Trust services 1,048 801 2,058 1,578 Increase in cash value of bank-owned life insurance 313 295 621 577 Other income 245 350 501 617 Total noninterest income 2,596 2,410 5,150 4,653 Noninterest expense: Salaries and employee benefits 7,987 7,343 15,619 14,347 Occupancy and equipment 2,006 2,034 4,012 3,997 Technology and software 822 791 1,596 1,577 Data processing 545 643 1,141 1,260 FDIC insurance 444 670 917 1,257 Professional fees 298 303 576 611 Other expenses 1,665 1,701 3,371 3,499 Total noninterest expense 13,767 13,485 27,232 26,548 Income before income taxes 14,350 10,344 27,824 20,379 Income taxes 3,277 2,365 6,179 4,558 Net income $ 11,073 $ 7,979 $ 21,645 $ 15,821 Basic earnings per common share $ 0.65 $ 0.47 $ 1.27 $ 0.94 Diluted earnings per common share $ 0.64 $ 0.47 $ 1.26 $ 0.93 See Notes to Consolidated Financial Statements. 5 Table of Contents West Bancorporation, Inc. and Subsidiary Consolidated Statements of Comprehensive Income (Loss) (unaudited) Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Net income $ 11,073 $ 7,979 $ 21,645 $ 15,821 Other comprehensive income (loss): Unrealized gains (losses) on securities: Unrealized holding gains (losses) arising during the period 2,527 601 ( 109 ) 13,508 Income tax (expense) benefit ( 633 ) ( 154 ) 13 ( 3,349 ) Other comprehensive income (loss) on securities 1,894 447 ( 96 ) 10,159 Unrealized gains (losses) on derivatives: Unrealized holding gains (losses) arising during the period 1,454 ( 1,021 ) 3,508 ( 3,335 ) Plus: reclassification adjustment for net gains realized in net income ( 348 ) ( 1,412 ) ( 958 ) ( 2,816 ) Income tax (expense) benefit ( 272 ) 599 ( 627 ) 1,516 Other comprehensive income (loss) on derivatives 834 ( 1,834 ) 1,923 ( 4,635 ) Total other comprehensive income (loss) 2,728 ( 1,387 ) 1,827 5,524 Comprehensive income $ 13,801 $ 6,592 $ 23,472 $ 21,345 See Notes to Consolidated Financial Statements. 6 Table of Contents West Bancorporation, Inc. and Subsidiary Consolidated Statements of Stockholders' Equity (unaudited) (in thousands, except share and per share data) Three Months Ended June 30, 2026 Accumulated Additional Other Preferred Common Stock Paid-In Retained Comprehensive Stock Shares Amount Capital Earnings Income (Loss) Total Balance, March 31, 2026 $ — 17,028,101 $ 3,000 $ 36,553 $ 300,596 $ ( 69,406 ) $ 270,743 Net income — — — — 11,073 — 11,073 Other comprehensive income, net of tax — — — — — 2,728 2,728 Cash dividends declared, $ 0.25 per common share — — — — ( 4,261 ) — ( 4,261 ) Stock-based compensation costs — — — 759 — — 759 Issuance of common stock upon vesting of restricted stock units, net of shares withheld for payroll taxes — 15,642 — — — — — Balance, June 30, 2026 $ — 17,043,743 $ 3,000 $ 37,312 $ 307,408 $ ( 66,678 ) $ 281,042 Three Months Ended June 30, 2025 Accumulated Additional Other Preferred Common Stock Paid-In Retained Comprehensive Stock Shares Amount Capital Earnings Income (Loss) Total Balance, March 31, 2025 $ — 16,923,280 $ 3,000 $ 35,072 $ 282,247 $ ( 82,446 ) $ 237,873 Net income — — — — 7,979 — 7,979 Other comprehensive loss, net of tax — — — — — ( 1,387 ) ( 1,387 ) Cash dividends declared, $ 0.25 per common share — — — — ( 4,236 ) — ( 4,236 ) Stock-based compensation costs — — — 701 — — 701 Issuance of common stock upon vesting of restricted stock units, net of shares withheld for payroll taxes — 17,505 — — — — — Balance, June 30, 2025 $ — 16,940,785 $ 3,000 $ 35,773 $ 285,990 $ ( 83,833 ) $ 240,930 See Notes to Consolidated Financial Statements. 7 Table of Contents West Bancorporation, Inc. and Subsidiary Consolidated Statements of Stockholders' Equity (unaudited) (in thousands, except share and per share data) Six Months Ended June 30, 2026 Accumulated Additional Other Preferred Common Stock Paid-In Retained Comprehensive Stock Shares Amount Capital Earnings Income (Loss) Total Balance, December 31, 2025 $ — 16,940,785 $ 3,000 $ 37,231 $ 294,259 $ ( 68,505 ) $ 265,985 Net income — — — — 21,645 — 21,645 Other comprehensive income, net of tax — — — — — 1,827 1,827 Cash dividends declared, $ 0.50 per common share — — — — ( 8,496 ) — ( 8,496 ) Stock-based compensation costs — — — 1,359 — — 1,359 Issuance of common stock upon vesting of restricted stock units, net of shares withheld for payroll taxes — 102,958 — ( 1,278 ) — — ( 1,278 ) Balance, June 30, 2026 $ — 17,043,743 $ 3,000 $ 37,312 $ 307,408 $ ( 66,678 ) $ 281,042 Six Months Ended June 30, 2025 Accumulated Additional Other Preferred Common Stock Paid-In Retained Comprehensive Stock Shares Amount Capital Earnings Income (Loss) Total Balance, December 31, 2024 $ — 16,832,632 $ 3,000 $ 35,619 $ 278,613 $ ( 89,357 ) $ 227,875 Net income — — — — 15,821 — 15,821 Other comprehensive income, net of tax — — — — — 5,524 5,524 Cash dividends declared, $ 0.50 per common share — — — — ( 8,444 ) — ( 8,444 ) Stock-based compensation costs — — — 1,286 — — 1,286 Issuance of common stock upon vesting of restricted stock units, net of shares withheld for payroll taxes — 108,153 — ( 1,132 ) — — ( 1,132 ) Balance, June 30, 2025 $ — 16,940,785 $ 3,000 $ 35,773 $ 285,990 $ ( 83,833 ) $ 240,930 See Notes to Consolidated Financial Statements. 8 Table of Contents West Bancorporation, Inc. and Subsidiary Consolidated Statements of Cash Flows (unaudited) Six Months Ended June 30, (in thousands) 2026 2025 Cash Flows from Operating Activities: Net income $ 21,645 $ 15,821 Adjustments to reconcile net income to net cash provided by operating activities: Net amortization and accretion 1,477 1,542 Stock-based compensation 1,359 1,286 Increase in cash value of bank-owned life insurance ( 621 ) ( 577 ) Depreciation 2,332 2,231 Provision for deferred income taxes 159 994 Change in assets and liabilities: Decrease in accrued interest receivable 722 196 Decrease in other assets 1,082 2,435 Decrease in accrued expenses and other liabilities ( 904 ) ( 652 ) Net cash provided by operating activities 27,251 23,276 Cash Flows from Investing Activities: Proceeds from principal paydowns, maturities and calls of securities available for sale 20,416 19,954 Purchases of Federal Home Loan Bank stock ( 213 ) ( 234 ) Proceeds from redemption of Federal Home Loan Bank stock 212 52 Net decrease in loans 51,581 38,610 Purchases of premises and equipment ( 790 ) ( 2,256 ) Net cash provided by investing activities 71,206 56,126 Cash Flows from Financing Activities: Net increase (decrease) in deposits ( 123,570 ) 34,397 Principal payments on long-term debt ( 2,500 ) ( 2,500 ) Common stock dividends paid ( 8,496 ) ( 8,444 ) Restricted stock units withheld for payroll taxes ( 1,278 ) ( 1,132 ) Net cash provided by (used in) financing activities ( 135,844 ) 22,321 Net increase (decrease) in cash and cash equivalents ( 37,387 ) 101,723 Cash and Cash Equivalents: Beginning 471,086 243,478 Ending $ 433,699 $ 345,201 Supplemental Disclosures of Cash Flow Information: Cash payments for: Interest $ 45,917 $ 52,524 Income taxes 5,240 650 See Notes to Consolidated Financial Statements. 9 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) 1. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared by West Bancorporation, Inc. (the Company) pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to such rules and regulations. Although management believes that the disclosures are adequate to make the information presented understandable, it is suggested that these unaudited consolidated financial statements be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 26, 2026. In the opinion of management, the accompanying unaudited consolidated financial statements of the Company contain all adjustments necessary to fairly present its financial position as of June 30, 2026 and December 31, 2025, net income, comprehensive income (loss) and changes in stockholders' equity for the three and six months ended June 30, 2026 and 2025, and cash flows for the six months ended June 30, 2026 and 2025. The results for these interim periods may not be indicative of results for the entire year or for any other period. The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (GAAP) established by the Financial Accounting Standards Board (FASB). References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codification™ , sometimes referred to as the Codification or ASC. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses for the reporting period. 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 . The accompanying unaudited consolidated financial statements include the accounts of the Company, the Company's wholly-owned subsidiary West Bank and West Bank's special purpose subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. In accordance with GAAP, West Bancorporation Capital Trust I is recorded on the books of the Company using the equity method of accounting and is not consolidated. As a community-oriented financial institution, substantially all of West Bank's operations involve the delivery of loan and deposit products to customers. 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, which is the Company's chief executive officer. The accounting policies of this segment are the same as those described in the Company's Annual Report on Form 10-K, filed with the SEC on February 26, 2026. Refer to Note 1 in the Company's Annual Report on Form 10-K for additional information. As the chief operating decision maker, the Company's Chief Executive Officer 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 against actual results. It is also used in benchmarking performance measures to the Company's peers for compensation related analysis. The measure of segment assets is reported on the Consolidated Balance Sheets as total consolidated assets. Current accounting developments : In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative . The ASU incorporates certain SEC disclosure requirements into the FASB Accounting Standards Codification TM. . The amendments in the ASU are expected to clarify or improve disclosure presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations. For entities subject to the SEC’s existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. For all other entities, the amendments will be effective two years later. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. These amendments have not had an impact to the Company as of June 30, 2026. 10 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) 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. In November 2025, the FASB issued ASU No. 2025-08, Financial Instruments-Credit Losses (Topic 326): Purchased Loans . The ASU expands the population of acquired financial assets accounted for using the “gross-up approach” when recording the initial allowance for credit losses through an adjustment to the initial amortized cost basis. Acquired loans are deemed purchased seasoned loans and accounted for using the gross-up approach upon acquisition if criteria established by the new guidance are met. This change aims to enhance comparability, consistency and better reflect the economics of acquiring financial assets. This ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of the ASU on the Company’s consolidated financial statements. In November 2025, the FASB issued ASU No. 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements . The ASU enables entities to apply hedge accounting to a greater number of highly effective economic hedges in multiple areas. The ASU expands the hedged risks permitted to be aggregated in a group of individual forecasted transactions, enabling entities to apply hedge accounting to potentially broader portfolios of forecasted transactions. The ASU is effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of the ASU on the Company’s consolidated financial statements. In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements . The ASU clarifies the applicability of the interim reporting guidance, the types of interim reporting, and the form and content of interim financial statements in accordance with generally accepted accounting principles. The amendments in this ASU are effective for public business entities for interim periods within annual periods beginning after December 15, 2027. Early adoption is permitted. The amendments can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of the ASU on the Company’s consolidated financial statements. In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements . The amendments in this ASU update the FASB Accounting Standards Codification for a broad range of topics arising from technical corrections, unintended application of the Codification, clarifications, and other minor improvements. The amendments in this ASU are effective for all entities for annual periods beginning after December 15, 2026, and interim periods within those annual periods. Early adoption is permitted in both interim and annual periods in which financial statements have not yet been issued or made available for issuance. An entity may elect to adopt the amendments on an issue-by-issue basis. The Company is currently evaluating the impact of the ASU on the Company’s consolidated financial statements. 11 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) 2. Earnings per Common Share Basic earnings per common share are computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per common share reflect the potential dilution that could occur if the Company's outstanding restricted stock units were vested. The dilutive effect was computed using the treasury stock method, which assumes all stock-based awards were exercised and the hypothetical proceeds from exercise were used by the Company to purchase common stock at the average market price during the period. The incremental shares, to the extent they would have been dilutive, were included in the denominator of the diluted earnings per common share calculation. The calculations of earnings per common share and diluted earnings per common share for the three and six months ended June 30, 2026 and 2025 are presented in the following table. Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per share data) 2026 2025 2026 2025 Net income $ 11,073 $ 7,979 $ 21,645 $ 15,821 Weighted average common shares outstanding 17,040 16,936 16,994 16,888 Weighted average effect of restricted stock units outstanding 161 71 213 97 Diluted weighted average common shares outstanding 17,201 17,007 17,207 16,985 Basic earnings per common share $ 0.65 $ 0.47 $ 1.27 $ 0.94 Diluted earnings per common share $ 0.64 $ 0.47 $ 1.26 $ 0.93 Number of anti-dilutive common stock equivalents excluded from diluted earnings per share computation 169 309 134 319 12 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) 3. Securities Available for Sale The following tables show the amortized cost, gross unrealized gains and losses, and fair value of securities available for sale, by security type as of June 30, 2026 and December 31, 2025. June 30, 2026 Amortized Cost Gross Unrealized Gains Gross Unrealized (Losses) Fair Value Securities available for sale: State and political subdivisions $ 196,911 $ 1 $ ( 32,523 ) $ 164,389 Collateralized mortgage obligations (1) 223,006 — ( 43,139 ) 179,867 Mortgage-backed securities (1) 109,285 — ( 17,388 ) 91,897 Corporate notes 10,750 — ( 328 ) 10,422 $ 539,952 $ 1 $ ( 93,378 ) $ 446,575 December 31, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized (Losses) Fair Value Securities available for sale: State and political subdivisions $ 198,083 $ 1 $ ( 34,820 ) $ 163,264 Collateralized mortgage obligations (1) 234,217 — ( 40,534 ) 193,683 Mortgage-backed securities (1) 113,358 — ( 17,216 ) 96,142 Collateralized loan obligations 2,307 1 ( 1 ) 2,307 Corporate notes 13,750 — ( 699 ) 13,051 $ 561,715 $ 2 $ ( 93,270 ) $ 468,447 (1) Collateralized mortgage obligations and mortgage-backed securities consist of residential and commercial mortgage pass-through securities and collateralized mortgage obligations guaranteed by FNMA, FHLMC, GNMA and SBA. Securities with a fair value of approximately $ 402,979 and $ 418,670 as of June 30, 2026 and December 31, 2025, respectively, were pledged as collateral for borrowings and public fund deposits, and for other purposes as required or permitted by law or regulation. The amortized cost and fair value of securities available for sale as of June 30, 2026, by contractual maturity, are shown below. Certain securities have call features that allow the issuer to call the securities prior to maturity. Expected maturities may differ from contractual maturities for collateralized mortgage obligations and mortgage-backed securities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Therefore, collateralized mortgage obligations and mortgage-backed securities are not included in the maturity categories within the following maturity summary. June 30, 2026 Amortized Cost Fair Value Due after one year through five years $ 6,750 $ 6,527 Due after five years through ten years 25,780 22,683 Due after ten years 175,131 145,601 207,661 174,811 Collateralized mortgage obligations and mortgage-backed securities 332,291 271,764 $ 539,952 $ 446,575 13 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) There were no sales of securities available for sale during the three and six months ended June 30, 2026 and 2025. The following tables show the fair value and gross unrealized losses, aggregated by investment type and length of time that individual securities have been in a continuous loss position, as of June 30, 2026 and December 31, 2025. June 30, 2026 Less than 12 months 12 months or longer Total Fair Value Gross Unrealized (Losses) No. of Securities Fair Value Gross Unrealized (Losses) No. of Securities Fair Value Gross Unrealized (Losses) Securities available for sale: State and political subdivisions $ — $ — — $ 164,299 $ ( 32,523 ) 68 $ 164,299 $ ( 32,523 ) Collateralized mortgage obligations — — — 179,867 ( 43,139 ) 53 179,867 ( 43,139 ) Mortgage-backed securities — — — 91,897 ( 17,388 ) 22 91,897 ( 17,388 ) Corporate notes — — — 10,422 ( 328 ) 7 10,422 ( 328 ) $ — $ — — $ 446,485 $ ( 93,378 ) 150 $ 446,485 $ ( 93,378 ) December 31, 2025 Less than 12 months 12 months or longer Total Fair Value Gross Unrealized (Losses) No. of Securities Fair Value Gross Unrealized (Losses) No. of Securities Fair Value Gross Unrealized (Losses) Securities available for sale: State and political subdivisions $ — $ — — $ 163,173 $ ( 34,820 ) 68 $ 163,173 $ ( 34,820 ) Collateralized mortgage obligations — — — 193,683 ( 40,534 ) 53 193,683 ( 40,534 ) Mortgage-backed securities — — — 96,142 ( 17,216 ) 22 96,142 ( 17,216 ) Collateralized loan obligations 1,110 ( 1 ) 1 — — — 1,110 ( 1 ) Corporate notes — — — 13,052 ( 699 ) 8 13,052 ( 699 ) $ 1,110 $ ( 1 ) 1 $ 466,050 $ ( 93,269 ) 151 $ 467,160 $ ( 93,270 ) If the Company intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis, then the security is written down to fair value through income. As of June 30, 2026 and December 31, 2025, the Company did not have the intent to sell, nor was it more likely than not that it would be required to sell any of the securities in an unrealized loss position prior to recovery. As of June 30, 2026 and December 31, 2025, 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 $ 2,271 and $ 2,354 as of June 30, 2026 and December 31, 2025, respectively, and was excluded from the measurement of credit losses. 14 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) 4. Loans and Allowance for Credit Losses Loans consisted of the following segments as of June 30, 2026 and December 31, 2025. June 30, 2026 December 31, 2025 Commercial $ 463,248 $ 505,059 Real estate: Construction, land and land development 333,753 426,833 1-4 family residential first mortgages 130,951 93,122 Home equity 25,999 26,088 Commercial 1,977,477 1,929,766 Consumer and other 21,347 23,374 2,952,775 3,004,242 Net unamortized fees and costs ( 2,661 ) ( 2,552 ) $ 2,950,114 $ 3,001,690 Real estate loans of approximately $ 1,570,000 and $ 1,540,000 were pledged as security for FHLB advances and letters of credit as of June 30, 2026 and December 31, 2025, respectively. Loans are stated at the principal amounts outstanding, net of unamortized loan fees and costs, with interest income recognized on the interest method based upon the terms of the loan. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method. Loans are reported by the portfolio segments identified above and are analyzed by management on this basis. All loan policies identified below apply to all segments of the loan portfolio. Allowance for Credit Losses for Loans The following tables detail the changes in the allowance for credit losses (ACL) by loan segment for the three and six months ended June 30, 2026 and 2025. Three Months Ended June 30, 2026 Real Estate Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total Beginning balance $ 5,223 $ 3,240 $ 1,088 $ 278 $ 20,378 $ 316 $ 30,523 Charge-offs — — — — — — — Recoveries 2 4 — 1 — — 7 Provision for credit loss expense (1) 32 ( 334 ) ( 59 ) ( 10 ) 386 ( 15 ) — Ending balance $ 5,257 $ 2,910 $ 1,029 $ 269 $ 20,764 $ 301 $ 30,530 Six Months Ended June 30, 2026 Real Estate Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total Beginning balance $ 5,700 $ 3,744 $ 687 $ 274 $ 19,795 $ 325 $ 30,525 Charge-offs ( 1 ) — — — — ( 18 ) ( 19 ) Recoveries 7 7 6 2 — 2 24 Provision for credit loss expense (1) ( 449 ) ( 841 ) 336 ( 7 ) 969 ( 8 ) — Ending balance $ 5,257 $ 2,910 $ 1,029 $ 269 $ 20,764 $ 301 $ 30,530 15 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) Three Months Ended June 30, 2025 Real Estate Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total Beginning balance $ 5,846 $ 3,894 $ 635 $ 220 $ 19,701 $ 230 $ 30,526 Charge-offs — — — — — — — Recoveries 7 5 — 1 — — 13 Provision for credit loss expense (1) ( 209 ) 199 ( 12 ) 20 ( 48 ) 50 — Ending balance $ 5,644 $ 4,098 $ 623 $ 241 $ 19,653 $ 280 $ 30,539 Six Months Ended June 30, 2025 Real Estate Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total Beginning balance $ 5,489 $ 4,354 $ 650 $ 200 $ 19,544 $ 195 $ 30,432 Charge-offs — — — — — — — Recoveries 14 7 73 13 — — 107 Provision for credit loss expense (1) 141 ( 263 ) ( 100 ) 28 109 85 — Ending balance $ 5,644 $ 4,098 $ 623 $ 241 $ 19,653 $ 280 $ 30,539 (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. The following tables present a breakdown of the ACL by segment, disaggregated based on the evaluation method as of June 30, 2026 and December 31, 2025. June 30, 2026 Real Estate Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total Ending balance: Individually evaluated for credit losses $ — $ — $ — $ — $ — $ — $ — Collectively evaluated for credit losses 5,257 2,910 1,029 269 20,764 301 30,530 Total $ 5,257 $ 2,910 $ 1,029 $ 269 $ 20,764 $ 301 $ 30,530 December 31, 2025 Real Estate Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total Ending balance: Individually evaluated for credit losses $ — $ — $ — $ — $ — $ — $ — Collectively evaluated for credit losses 5,700 3,744 687 274 19,795 325 30,525 Total $ 5,700 $ 3,744 $ 687 $ 274 $ 19,795 $ 325 $ 30,525 16 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) The following tables present the recorded investment in loans, exclusive of unamortized fees and costs, disaggregated based on the evaluation method by segment as of June 30, 2026 and December 31, 2025. June 30, 2026 Real Estate Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total Ending balance: Individually evaluated for credit losses $ 749 $ — $ — $ — $ 624 $ — $ 1,373 Collectively evaluated for credit losses 462,499 333,753 130,951 25,999 1,976,853 21,347 2,951,402 Total $ 463,248 $ 333,753 $ 130,951 $ 25,999 $ 1,977,477 $ 21,347 $ 2,952,775 December 31, 2025 Real Estate Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total Ending balance: Individually evaluated for credit losses $ — $ — $ — $ — $ — $ — $ — Collectively evaluated for credit losses 505,059 426,833 93,122 26,088 1,929,766 23,374 3,004,242 Total $ 505,059 $ 426,833 $ 93,122 $ 26,088 $ 1,929,766 $ 23,374 $ 3,004,242 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. The Company's estimate of the ACL reflects losses expected over the remaining contractual life of the assets. The contractual term does not consider extensions, renewals or modifications unless the Company has identified an expected restructuring. In the event that collection of principal becomes uncertain, the Company has policies in place to reverse accrued interest in a timely manner. Therefore, the Company has made a policy election to exclude accrued interest from the measurement of the ACL. Accrued interest on loans of $ 8,799 and $ 9,341 at June 30, 2026 and December 31, 2025, respectively, was included in the "Accrued interest receivable" line of the Consolidated Balance Sheets and was excluded from the measurement of credit losses. Expected credit losses are reflected in the ACL through a charge to credit loss expense. When the Company deems all or a portion of a loan to be uncollectible, the appropriate amount is written off and the ACL is reduced by the same amount. The Company applies judgment to determine when a loan is deemed uncollectible; however, generally speaking, a loan will be considered uncollectible no later than when all efforts at collection have been exhausted. 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'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. The methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions expected to exist through the contractual lives of the financial assets that are reasonable and supportable, to the identified pools of financial assets with similar risk characteristics for which the historical experience was observed. 17 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) The Company uses the cash flow based model to estimate expected credit losses for all loan segments. For each of the loan segments, the Company calculates a cash flow projection using contractual terms, estimated prepayment speeds, estimated curtailment rates, and other relevant data. The Company uses regression analysis that links historical losses of the Company and its peer group to two economic metrics: national unemployment rate and 10-year treasury rate over 2-year treasury rate spread to establish the loss rates applied to the projected cash flows. For all loan segments, the Company uses a forecast period of four quarters and reverts to a historical rate after four quarters. When estimating prepayment speed and curtailment rates, the modeling is based on historical internal data. Nonaccrual Loans and Delinquency Status Delinquencies are determined based on the payment terms of the individual loan agreements. The accrual of interest on past due and other individually evaluated loans is generally discontinued at 90 days past due or when, in the opinion of management, the borrower may be unable to make all payments pursuant to contractual terms. Unless considered collectible, all interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. Generally, all payments received while a loan is on nonaccrual status are applied to the principal balance of the loan. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured. The following table presents the amortized cost basis of loans on nonaccrual status, loans on nonaccrual status with no ACL recorded, and loans past due 90 days or more and still accruing by loan segment as of the dates indicated. Total Nonaccrual Nonaccrual with no Allowance for Credit Losses 90 Days or More Past Due and Accruing June 30, 2026 December 31, 2025 June 30, 2026 December 31, 2025 June 30, 2026 December 31, 2025 Commercial $ — $ — $ — $ — $ — $ — Real estate: Construction, land and land development — — — — — — 1-4 family residential first mortgages — — — — — — Home equity — — — — — — Commercial — — — — — — Consumer and other — — — — — — Total $ — $ — $ — $ — $ — $ — There was $ 0 and $ 18 of interest income recognized on loans that were on nonaccrual for the six months ended June 30, 2026 and June 30, 2025, respectively. 18 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) The following tables provide an analysis of the delinquency status of the amortized cost of loans as of June 30, 2026 and December 31, 2025. June 30, 2026 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Loans Commercial $ — $ — $ — $ — $ 463,248 $ 463,248 Real estate: Construction, land and land development — — — — 333,753 333,753 1-4 family residential first mortgages — — — — 130,951 130,951 Home equity — — — — 25,999 25,999 Commercial — — — — 1,977,477 1,977,477 Consumer and other — — — — 21,347 21,347 Total $ — $ — $ — $ — $ 2,952,775 $ 2,952,775 December 31, 2025 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Loans Commercial $ — $ — $ — $ — $ 505,059 $ 505,059 Real estate: Construction, land and land development — — — — 426,833 426,833 1-4 family residential first mortgages — — — — 93,122 93,122 Home equity — — — — 26,088 26,088 Commercial — — — — 1,929,766 1,929,766 Consumer and other — — — — 23,374 23,374 Total $ — $ — $ — $ — $ 3,004,242 $ 3,004,242 19 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) Loan Modifications Made to Borrowers Experiencing Financial Difficulty As of June 30, 2026, the Company had $ 749 in loan modifications made to borrowers experiencing financial difficulties, compared to none as of December 31, 2025. The loan modifications as of June 30, 2026 consisted of one loan with a borrower that has two loans individually evaluated for credit losses and was related to a payment deferral. The modified loan is in the commercial loans segment and makes up 0.16 percent of the total loans within the commercial loan segment. There were no loan modifications made to borrowers experiencing financial difficulty for which there was a payment default within twelve months following the modification during the three and six months ended June 30, 2026 and 2025, and there were no commitments to lend additional funds to such borrowers. A modified loan is considered to be in payment default once it is 30 days contractually past due under the modified terms. Credit Quality Indicators Based upon its ongoing assessment of credit quality within the loan portfolio, the Company maintains a Watch List, which includes loans classified as Doubtful, Substandard and Watch according to the Company's classification criteria. These loans involve the anticipated potential for payment defaults or collateral inadequacies. A loan on the Watch List is analyzed individually to categorize the loan to the appropriate credit risk category. All loans are subject to the assessment of a credit quality indicator. Risk ratings are assigned for each loan at the time of approval, and they change as circumstances dictate during the term of the loan. The Company utilizes a 9-point risk rating scale as shown below, with ratings 1 - 5 included in the Pass column, rating 6 included in the Watch column, ratings 7 - 8 included in the Substandard column and rating 9 included in the Doubtful column. Risk rating 1: The loan is secured by cash equivalent collateral. Risk rating 2: The loan is secured by properly margined marketable securities, bonds or cash surrender value of life insurance. Risk rating 3: The borrower is in strong financial condition and has strong debt service capacity. The loan is performing as agreed, and the financial characteristics and trends of the borrower exceed industry statistics. Risk rating 4: The borrower's financial condition is satisfactory and stable. The borrower has satisfactory debt service capacity, and the loan is well secured. The loan is performing as agreed, and the financial characteristics and trends fall in line with industry statistics. Risk rating 5: The borrower's financial condition is less than satisfactory. The loan is still generally paying as agreed, but strained cash flows may cause some slowness in payments. The collateral values adequately preclude loss on the loan. Financial characteristics and trends lag industry statistics. There may be noncompliance with loan covenants. Risk rating 6: The borrower's financial condition is deficient. Payment delinquencies may be more common. Collateral values still protect from loss, but margins are narrow. The loan may be reliant on secondary sources of repayment, including liquidation of collateral and guarantor support. Risk rating 7: The loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Well-defined weaknesses exist that jeopardize the liquidation of the debt. The Company is inadequately protected by the valuation or paying capacity of the collateral pledged. If deficiencies are not corrected, there is a distinct possibility that a loss will be sustained. Risk rating 8: All the characteristics of rating 7 exist with the added condition that the loan is past due more than 90 days or there is reason to believe the Company will not receive its principal and interest according to the terms of the loan agreement. Risk rating 9: All the weaknesses inherent in risk ratings 7 and 8 exist with the added condition that collection or liquidation, on the basis of currently known facts, conditions and values, is highly questionable and improbable. A loan reaching this category would most likely be charged off. 20 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) Credit quality indicators for all loans and the Company's risk rating process are dynamic and updated on a continuous basis. Risk ratings are updated as circumstances that could affect the repayment of an individual loan are brought to management's attention through an established monitoring process. Individual bankers initiate changes as appropriate for ratings 1 through 5, and changes for ratings 6 through 9 are initiated by management. The likelihood of loss increases as the risk rating increases and is generally preceded by a loan appearing on the Watch List, which consists of all loans with a risk rating of 6 or worse. Written action plans with firm target dates for resolution of identified problems are maintained and reviewed on a quarterly basis for all segments of loans included on the Watch List. In addition to the Company's internal credit monitoring practices and procedures, an outsourced independent credit review function is in place to further assess assigned internal risk classifications and monitor compliance with internal lending policies and procedures. In all portfolio segments, the primary risks are that a borrower's income stream diminishes to the point that the borrower is not able to make scheduled principal and interest payments and any collateral securing the loan declines in value. The risk of declining collateral values is present for most types of loans. Commercial loans consist primarily of loans to businesses for various purposes, including revolving lines to finance current operations, inventory and accounts receivable, and capital expenditure loans to finance equipment and other fixed assets. These loans generally have short maturities, have either adjustable or fixed interest rates, and are either unsecured or secured by inventory, accounts receivable and/or fixed assets. For commercial loans, the primary source of repayment is from the operation of the business. Real estate loans include various types of loans for which the Company holds real property as collateral, and consist of loans on commercial properties and single and multifamily residences. Real estate loans are typically structured to mature or reprice every five years with payments based on amortization periods up to 30 years. The majority of construction loans are to contractors and developers for construction of commercial buildings or residential real estate. These loans typically have maturities of up to 24 months. The Company's loan policy includes minimum appraisal and other credit guidelines. Consumer loans include loans extended to individuals for household, family and other personal expenditures not secured by real estate. The majority of the Company's consumer lending is for vehicles, consolidation of personal debts and household improvements. The repayment source for consumer loans, including 1-4 family residential and home equity loans, is typically wages. 21 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) The following tables present the amortized cost basis of loans by loan segment, credit quality indicator and origination year, and the current period gross write-off by loan segment and origination year, based on the analysis performed as of June 30, 2026 and December 31, 2025. Term Loans by Origination Year As of June 30, 2026 2026 2025 2024 2023 2022 Prior Revolving Loans Total Commercial Pass $ 54,944 $ 95,002 $ 41,168 $ 37,708 $ 47,904 $ 49,535 $ 129,240 $ 455,501 Watch 50 1,723 305 245 178 5 600 3,106 Substandard — 749 — 137 — — 3,755 4,641 Doubtful — — — — — — — — Total $ 54,994 $ 97,474 $ 41,473 $ 38,090 $ 48,082 $ 49,540 $ 133,595 $ 463,248 Current period gross writeoffs $ — $ — $ — $ — $ — $ 1 $ — $ 1 Real estate: Construction, land and land development Pass $ 126,384 $ 60,250 $ 8,271 $ 46,581 $ 5,047 $ 598 $ 86,622 $ 333,753 Watch — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total $ 126,384 $ 60,250 $ 8,271 $ 46,581 $ 5,047 $ 598 $ 86,622 $ 333,753 Current period gross writeoffs $ — $ — $ — $ — $ — $ — $ — $ — 1-4 family residential first mortgages Pass $ 21,573 $ 70,369 $ 5,170 $ 9,028 $ 15,475 $ 6,078 $ 1,118 $ 128,811 Watch — — — 2,140 — — — 2,140 Substandard — — — — — — — — Doubtful — — — — — — — — Total $ 21,573 $ 70,369 $ 5,170 $ 11,168 $ 15,475 $ 6,078 $ 1,118 $ 130,951 Current period gross writeoffs $ — $ — $ — $ — $ — $ — $ — $ — Home equity Pass $ 1,178 $ 2,356 $ 287 $ 2,590 $ 125 $ 271 $ 19,192 $ 25,999 Watch — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total $ 1,178 $ 2,356 $ 287 $ 2,590 $ 125 $ 271 $ 19,192 $ 25,999 Current period gross writeoffs $ — $ — $ — $ — $ — $ — $ — $ — Commercial Pass $ 448,202 $ 270,556 $ 160,691 $ 111,160 $ 373,758 $ 557,848 $ 43,674 $ 1,965,889 Watch — 475 1,391 — — — — 1,866 Substandard 3,016 1,209 624 — — 4,873 — 9,722 Doubtful — — — — — — — — Total $ 451,218 $ 272,240 $ 162,706 $ 111,160 $ 373,758 $ 562,721 $ 43,674 $ 1,977,477 Current period gross writeoffs $ — $ — $ — $ — $ — $ — $ — $ — Consumer and other Pass $ 88 $ 13,251 $ 58 $ 365 $ 24 $ 148 $ 7,413 $ 21,347 Watch — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total $ 88 $ 13,251 $ 58 $ 365 $ 24 $ 148 $ 7,413 $ 21,347 Current period gross writeoffs $ 18 $ — $ — $ — $ — $ — $ — $ 18 22 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) Term Loans by Origination Year As of December 31, 2025 2025 2024 2023 2022 2021 Prior Revolving Loans Total Commercial Pass $ 138,785 $ 50,820 $ 45,188 $ 60,692 $ 26,356 $ 43,088 $ 130,280 $ 495,209 Watch 3,131 768 1,027 568 31 — 4,325 9,850 Substandard — — — — — — — — Doubtful — — — — — — — — Total $ 141,916 $ 51,588 $ 46,215 $ 61,260 $ 26,387 $ 43,088 $ 134,605 $ 505,059 Current period gross writeoffs $ — $ — $ — $ — $ — $ — $ — $ — Real estate: Construction, land and land development Pass $ 125,890 $ 15,669 $ 119,117 $ 73,287 $ 3,107 $ 125 $ 89,338 $ 426,533 Watch 300 — — — — — — 300 Substandard — — — — — — — — Doubtful — — — — — — — — Total $ 126,190 $ 15,669 $ 119,117 $ 73,287 $ 3,107 $ 125 $ 89,338 $ 426,833 Current period gross writeoffs $ — $ — $ — $ — $ — $ — $ — $ — 1-4 family residential first mortgages Pass $ 36,210 $ 5,387 $ 10,563 $ 16,055 $ 11,858 $ 3,269 $ 1,143 $ 84,485 Watch 6,458 — 2,179 — — — — 8,637 Substandard — — — — — — — — Doubtful — — — — — — — — Total $ 42,668 $ 5,387 $ 12,742 $ 16,055 $ 11,858 $ 3,269 $ 1,143 $ 93,122 Current period gross writeoffs $ — $ — $ — $ — $ — $ 27 $ — $ 27 Home equity Pass $ 2,581 $ 283 $ 2,618 $ 151 $ 368 $ — $ 20,087 $ 26,088 Watch — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total $ 2,581 $ 283 $ 2,618 $ 151 $ 368 $ — $ 20,087 $ 26,088 Current period gross writeoffs $ — $ — $ — $ — $ 8 $ — $ — $ 8 Commercial Pass $ 322,398 $ 224,664 $ 132,918 $ 409,576 $ 400,372 $ 344,525 $ 61,988 $ 1,896,441 Watch 29,835 2,050 1,440 — — — — 33,325 Substandard — — — — — — — — Doubtful — — — — — — — — Total $ 352,233 $ 226,714 $ 134,358 $ 409,576 $ 400,372 $ 344,525 $ 61,988 $ 1,929,766 Current period gross writeoffs $ — $ — $ — $ — $ — $ — $ — $ — Consumer and other Pass $ 13,966 $ 100 $ 444 $ 36 $ 34 $ 130 $ 8,549 $ 23,259 Watch — — — — — — 115 115 Substandard — — — — — — — — Doubtful — — — — — — — — Total $ 13,966 $ 100 $ 444 $ 36 $ 34 $ 130 $ 8,664 $ 23,374 Current period gross writeoffs $ — $ — $ — $ — $ — $ — $ — $ — 23 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) Collateral Dependent Loans Loans that do not share risk characteristics are evaluated on an individual basis. For collateral dependent loans where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the loans to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the loan exceeds the present value of expected cash flows from the operation of collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the loan exceeds the fair value of the underlying collateral less estimated cost to sell. 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 June 30, 2026. There were none as of December 31, 2025. As of June 30, 2026 Primary Type of Collateral Real Estate Business Assets Other Total ACL Allocation Commercial $ — $ 749 $ — $ 749 $ — Real estate: Commercial 624 — — 624 — Total $ 624 $ 749 $ — $ 1,373 $ — Allowance for Credit Losses on Off-Balance-Sheet Credit Exposures The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The Company's allowance for credit losses for unfunded commitments was $ 1,544 as of both June 30, 2026 and December 31, 2025. The allowance for credit losses for off-balance-sheet credit exposures is presented in the "Accrued expenses and other liabilities" line of the Consolidated Balance Sheets. Changes in the allowance for credit losses for off-balance-sheet credit exposures is reflected in the "Credit loss expense" line of the Consolidated Statements of Income. There was no provision for credit losses for off-balance-sheet credit exposures during the three and six months ended June 30, 2026 and 2025. 5. Derivatives The Company has entered into interest rate swap agreements and interest rate collars as part of its interest rate risk management strategy. The Company uses interest rate derivatives to manage its interest rate risk exposure on certain loans, borrowings and deposits due to interest rate movements. The notional amounts of the interest rate derivatives 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 Derivatives Designated as a Cash Flow Hedge: The Company had interest rate swaps designated as cash flow hedges with a total notional amount of $ 380,000 at both June 30, 2026 and December 31, 2025. As of June 30, 2026 and December 31, 2025, the Company had interest rate swaps with a total notional amount of $ 270,000 that hedge the interest payments of rolling one-month funding consisting of FHLB advances or brokered deposits. Also, as of June 30, 2026 and December 31, 2025, the Company had interest rate 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 $ 70,000 that hedge the interest payments of certain customer deposit accounts. 24 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) The Company had interest rate collars designated as cash flow hedges with a total notional amount of $ 100,000 as of both June 30, 2026 and December 31, 2025. The Company enters into interest rate collars 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. Derivatives Not Designated as Accounting Hedges: To accommodate customer needs, the Company on occasion offers loan level interest rate swaps to its customers and offsets its exposure from such contracts by entering into mirror image swaps with a swap counterparty (back-to-back swap program). The interest rate swaps are free-standing derivatives and are recorded at fair value. The Company enters into a floating-rate loan and a fixed-rate swap with our customer. Simultaneously, the Company enters into an offsetting fixed-rate swap with a swap counterparty. In connection with each swap transaction, the Company agrees to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on the same notional amount at a fixed interest rate. At the same time, the Company agrees to pay a swap counterparty the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. These transactions allow the Company’s customers to effectively convert variable-rate loans to fixed-rate loans. The customer accommodations and any offsetting swaps are treated as non-hedging derivative instruments which do not qualify for hedge accounting. The table below identifies the balance sheet category and fair values of the Company's derivative instruments as of June 30, 2026 and December 31, 2025. June 30, 2026 December 31, 2025 Cash Flow Hedges: Interest Rate Swaps : Gross notional amount $ 380,000 $ 380,000 Fair value in other assets 4,225 2,989 Fair value in other liabilities ( 58 ) ( 1,040 ) Weighted-average floating rate received 3.93 % 3.98 % Weighted-average fixed rate paid 3.45 % 3.45 % Weighted-average maturity in years 1.1 1.6 Interest Rate Collars : Gross notional amount $ 100,000 $ 100,000 Fair value in other assets 251 — Fair value in other liabilities — ( 80 ) Weighted-average maturity in years 2.1 2.6 Non-Hedging Derivatives: Gross notional amount $ 276,225 $ 279,980 Fair value in other assets 10,277 9,796 Fair value in other liabilities ( 10,277 ) ( 9,796 ) 25 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) The following table identifies the pre-tax gains or losses recognized on the Company's derivative instruments designated as cash flow hedges for the three and six months ended June 30, 2026 and 2025. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Pre-tax gain (loss) recognized in other comprehensive income $ 1,454 $ ( 1,021 ) $ 3,508 $ ( 3,335 ) Decrease in interest expense ( 348 ) ( 1,412 ) ( 958 ) ( 2,816 ) The Company estimates there will be approximately $ 1,644 reclassified from accumulated other comprehensive income (loss) to decrease interest expense through the 12 months ending June 30, 2027 related to cash flow hedges. The Company is exposed to credit risk in the event of nonperformance by interest rate derivative counterparties, which is minimized by collateral-pledging provisions in the agreements. Derivative contracts are executed with a Credit Support Annex, which is a bilateral ratings-sensitive agreement that requires collateral postings at established credit threshold levels. These agreements protect the interests of the Company and its counterparties should either party suffer a credit rating deterioration. As of June 30, 2026 and December 31, 2025, the Company pledged $ 0 and $ 240 , respectively, of collateral to the counterparties in the form of cash on deposit. As of June 30, 2026 and December 31, 2025, the Company's counterparties pledged $ 14,050 and $ 10,500 , respectively, of collateral to the Company in the form of cash on deposit. The interest rate swap product with the borrower is cross-collateralized with the underlying loan collateral and therefore there is no pledged cash collateral under swap contracts with customers. 6. Income Taxes Net deferred tax assets consisted of the following as of June 30, 2026 and December 31, 2025. June 30, 2026 December 31, 2025 Deferred tax assets: Allowance for credit losses $ 7,891 $ 7,889 Net unrealized losses on securities available for sale 23,063 23,036 Lease liabilities 967 1,019 Accrued expenses 261 236 Restricted stock unit compensation 706 1,041 State net operating loss carryforward 2,433 2,325 Other 213 200 35,534 35,746 Deferred tax liabilities: Right-of-use assets 928 981 Deferred loan costs 227 227 Net unrealized gains on interest rate swaps 1,089 462 Premises and equipment 5,563 5,572 Other 142 254 7,949 7,496 Net deferred tax assets before valuation allowance 27,585 28,250 Valuation allowance ( 2,433 ) ( 2,325 ) Net deferred tax assets $ 25,152 $ 25,925 26 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) The Company has recorded a valuation allowance against the tax effect of the state net operating loss carryforwards, as management believes it is more likely than not that these carryforwards will expire without being utilized. The state net operating loss carryforwards expire in 2026 and thereafter. 7 . Accumulated Other Comprehensive Income (Loss) The following table summarizes the changes in the balances of each component of accumulated other comprehensive income (loss), net of tax, for the six months ended June 30, 2026 and 2025. Unrealized Unrealized Accumulated Gains Gains Other (Losses) on (Losses) on Comprehensive Securities Derivatives Income (Loss) Balance, December 31, 2025 $ ( 69,879 ) $ 1,374 $ ( 68,505 ) Other comprehensive income (loss) before reclassifications ( 82 ) 2,644 2,562 Amounts reclassified from accumulated other comprehensive loss ( 14 ) ( 721 ) ( 735 ) Net current period other comprehensive income (loss) ( 96 ) 1,923 1,827 Balance, June 30, 2026 $ ( 69,975 ) $ 3,297 $ ( 66,678 ) Balance, December 31, 2024 $ ( 96,564 ) $ 7,207 $ ( 89,357 ) Other comprehensive income (loss) before reclassifications 10,172 ( 2,514 ) 7,658 Amounts reclassified from accumulated other comprehensive loss ( 13 ) ( 2,121 ) ( 2,134 ) Net current period other comprehensive income (loss) 10,159 ( 4,635 ) 5,524 Balance, June 30, 2025 $ ( 86,405 ) $ 2,572 $ ( 83,833 ) 8. Commitments and Contingencies Financial instruments with off-balance-sheet risk : The Company is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations that it uses for on-balance-sheet instruments. The Company's commitments consisted of the following amounts as of June 30, 2026 and December 31, 2025. June 30, 2026 December 31, 2025 Commitments to fund real estate construction loans $ 195,832 $ 152,936 Other commitments to extend credit 491,502 589,309 Standby letters of credit 13,817 13,291 $ 701,151 $ 755,536 27 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) West Bank previously executed Mortgage Partnership Finance (MPF) Master Commitments (Commitments) with the FHLB of Des Moines to deliver residential mortgage loans and to guarantee the payment of any realized losses that exceed the FHLB's first loss account for mortgages delivered under the Commitments. West Bank receives credit enhancement fees from the FHLB for providing this guarantee and continuing to assist with managing the credit risk of the MPF Program residential mortgage loans. The total outstanding balance of mortgage loans sold under the MPF Program was $ 12,993 and $ 14,411 at June 30, 2026 and December 31, 2025, respectively. Contractual commitments : The Company had remaining commitments to invest in qualified affordable housing projects totaling $ 1,270 and $ 1,383 as of June 30, 2026 and December 31, 2025, respectively. Concentrations of credit risk : Substantially all of the Company's loans, commitments to extend credit and standby letters of credit have been granted to customers in the Company's market areas. The concentrations of credit by type of loan are set forth in Note 4. The distribution by type of loan of commitments to extend credit approximates the distribution by type of loan outstanding. Standby letters of credit were granted primarily to commercial borrowers. Contingencies : Neither the Company nor West Bank is a party, and no property of these entities is subject, to any material pending legal proceedings, other than ordinary routine litigation incidental to West Bank's business. The Company does not know of any proceeding contemplated by a governmental authority against the Company or West Bank. 9. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts business. The Company's balance sheet contains securities available for sale and derivative instruments that are recorded at fair value on a recurring basis. The three-level valuation hierarchy for disclosure of fair value is as follows: Level 1 uses quoted market prices in active markets for identical assets or liabilities. Level 2 uses observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3 uses unobservable inputs that are not corroborated by market data. The Company's policy is to recognize transfers between levels at the end of each reporting period, if applicable. There were no transfers between levels of the fair value hierarchy during the six months ended June 30, 2026. The following is a description of valuation methodologies used for financial assets and liabilities recorded at fair value on a recurring basis. Securities available for sale: When available, quoted market prices are used to determine the fair value of securities (Level 1). If quoted market prices are not available, the Company determines fair value based on various sources and may apply matrix pricing with observable prices for similar bonds where a price for the identical bond is not observable (Level 2). The fair values of these securities are determined by pricing models that consider observable market data such as interest rate volatilities, yield curves, credit spreads, prices from market makers and live trading systems. Management obtains the fair value of securities at the end of each reporting period via a third-party pricing service. Management reviewed the valuation process used by the third party and believed the process was valid. On a quarterly basis, management corroborates the fair values of securities by obtaining pricing from an independent financial market data vendor and comparing the two sets of fair values. Any significant variances are reviewed and investigated. For a sample of securities, prices are further validated by management by obtaining details of the inputs used by the pricing service. Those inputs were independently tested, and management concluded the fair values were consistent with GAAP requirements and the securities were properly classified in the fair value hierarchy. 28 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) Derivative instruments: The Company's derivative instruments consist of interest rate swaps and interest rate collars accounted for as cash flow hedges, as well as interest rate swaps, which are accounted for as non-hedging derivatives. The Company's derivative positions are classified within Level 2 of the fair value hierarchy and are valued using models that are generally accepted in the financial services industry, including discounted cash flow models, and that use actively quoted or observable market input values from external market data providers and/or non-binding broker-dealer quotations. These models’ key assumptions include the contractual terms of the respective contract along with significant observable inputs, including interest rates, yield curves, nonperformance risk and volatility. The following tables present the balances of financial assets and liabilities measured at fair value on a recurring basis by level as of June 30, 2026 and December 31, 2025. June 30, 2026 Total Level 1 Level 2 Level 3 Financial assets: Securities available for sale: State and political subdivisions $ 164,389 $ — $ 164,389 $ — Collateralized mortgage obligations 179,867 — 179,867 — Mortgage-backed securities 91,897 — 91,897 — Corporate notes 10,422 — 10,422 — Derivative instruments 14,753 — 14,753 — Financial liabilities: Derivative instruments $ 10,335 $ — $ 10,335 $ — December 31, 2025 Total Level 1 Level 2 Level 3 Financial assets: Securities available for sale: State and political subdivisions $ 163,264 $ — $ 163,264 $ — Collateralized mortgage obligations 193,683 — 193,683 — Mortgage-backed securities 96,142 — 96,142 — Collateralized loan obligations 2,307 — 2,307 — Corporate notes 13,051 — 13,051 — Derivative instruments 12,785 — 12,785 — Financial liabilities: Derivative instruments $ 10,916 $ — $ 10,916 $ — 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 June 30, 2026 and December 31, 2025, there were no individually evaluated loans with a fair value adjustment. 29 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) 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. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available and include consideration of variations in location, size, and income production capacity of the property. Additionally, the appraisals are periodically further adjusted by the Company in consideration of charges that may be incurred in the event of foreclosure and are based on management’s historical knowledge, changes in business factors and changes in market conditions. Because of the high degree of judgment required in estimating the fair value of collateral underlying individually evaluated loans and because of the relationship between fair value and general economic conditions, the Company considers the fair value of individually evaluated loans to be highly sensitive to changes in market conditions. GAAP requires disclosure of the fair value of financial assets and financial liabilities, including those that are not measured and reported at fair value on a recurring or nonrecurring basis . The following table presents the carrying amounts and approximate fair values of financial assets and liabilities as of June 30, 2026 and December 31, 2025. June 30, 2026 Carrying Amount Approximate Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 30,986 $ 30,986 $ 30,896 $ — $ — Interest-earning deposits with banks 260,633 260,633 260,633 — — Securities purchased under agreements to resell 142,080 142,080 — 142,080 — Securities available for sale 446,575 446,575 — 446,575 — Federal Home Loan Bank stock 15,168 15,168 — 15,168 — Loans, net 2,919,584 2,879,740 — 2,879,740 — Accrued interest receivable 11,260 11,260 11,260 — — Derivative instruments 14,753 14,753 — 14,753 — Financial liabilities: Deposits $ 3,344,900 $ 3,344,277 $ — $ 3,344,277 $ — Subordinated notes, net 80,287 75,333 — 75,333 — Federal Home Loan Bank advances 270,000 270,000 — 270,000 — Long-term debt 23,750 23,750 — 23,750 — Accrued interest payable 5,361 5,361 5,361 — — Derivative instruments 10,335 10,335 — 10,335 — 30 Table of Contents West Bancorporation, Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (dollars in thousands, except per share data) December 31, 2025 Carrying Amount Approximate Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 25,171 $ 25,171 $ 25,171 $ — $ — Interest-earning deposits with banks 324,502 324,502 324,502 — — Securities purchased under agreements to resell 121,413 121,413 — 121,413 — Securities available for sale 468,447 468,447 — 468,447 — Federal Home Loan Bank stock 15,167 15,167 — 15,167 — Loans, net 2,971,165 2,953,867 — 2,953,867 — Accrued interest receivable 11,982 11,982 11,982 — — Derivative instruments 12,785 12,785 — 12,785 — Financial liabilities: Deposits $ 3,468,470 $ 3,468,215 $ — $ 3,468,215 $ — Subordinated notes, net 80,156 74,660 — 74,660 — Federal Home Loan Bank advances 270,000 270,000 — 270,000 — Long-term debt 26,250 26,250 — 26,250 — Accrued interest payable 5,319 5,319 5,319 — — Derivative instruments 10,916 10,916 — 10,916 — 31 Table of Contents West Bancorporation, Inc. Management's Discussion and Analysis (dollars in thousands, except share and per share data)