West Bancorporation Inc ARS, filed Mar 4, 2025
West Bancorporation Inc (WTBA)
ARS
2025-03-04
For: 2024-12-31
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October 25, 2026
Dear Stockholders: 2024 was a challenging year which began with headwinds that included macroeconomic uncertainty and an inverted yield curve. Our 2024 financial performance was as expected with a significantly compressed net interest margin. During the year, we executed sound capital management by closely managing balance sheet growth and credit quality. Our earnings in the past two years have fallen short of our financial performance standards. However, we are making significant strides toward a return to excellence in our industry by concentrating on what we can control. We finished the fourth quarter of 2024 with momentum, and believe this will carry into 2025 with improved margins due to our deposit growth and asset repricing opportunities during 2025 and 2026. During 2024, we focused on initiatives that will drive sustainable core profitability while reinforcing our long- standing strength and stability. Key efforts included generating core deposit growth through targeted relationship building activities, making comprehensive recommendations, and being bankers, not lenders. We have also made improvements to our online and mobile banking platforms along with our fraud management tools. Despite a highly competitive deposit environment in 2024, we saw incredible success in growing core retail and commercial deposits, which allowed us to reduce the overall level of wholesale funding. We have also made investments in technology that support the efficiency of our workforce and help protect the company and our customers against growing cybersecurity risks. Our credit quality remains pristine as a result of our highly effective credit risk management practices and disciplined loan growth. We have a well-diversified CRE portfolio, which is supported by financially strong developers and business operators within our markets. The teamwork displayed by every West Banker to navigate our recent challenges while supporting the needs of our clients and communities during challenging times has been remarkable. Together, we remain committed to delivering value to our clients, communities, and stockholders. I conclude my message by sharing our mission statement that was developed over a decade ago and is still the guiding principle of our daily activities. The mission remains the same in times of both prosperity and uncertainty: Our mission is to build strong relationships, build strong communities, and build upon our strong reputation to ensure our clients receive exceptional care, our communities receive outstanding support, and the loyalty of our employees and stockholders is rewarded. Thank you for your continued support and investment in our company. Sincerely, David D. Nelson CEO and President, West Bancorporation, Inc. Chair and CEO, West Bank 1W E S T B A N C O R P O R AT I O N I N C . A N D S U B S I D I A R I E S
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3W E S T B A N C O R P O R AT I O N I N C . A N D S U B S I D I A R I E S COMMUNITY INVOLVEMENT Despite challenges faced by the entire banking industry in 2024, West Bank maintained its focus on community: MORE THAN $450,000 IN TOTAL SUPPORT Over $267,000 awarded in foundation grants ≥ $148,308 in human services ≥ $81,250 in education ≥ $43,000 in arts & culture In 2024, West Bank Employees volunteered over 8,200 hours of community service West Bank’s mission is to build strong relationships, build strong communities, and build upon our strong reputation to ensure our clients receive exceptional care, our communities receive outstanding support, and the loyalty of our employees and stockholders is rewarded. WE ARE PROUD OF OUR WEST BANK TEAM AND THEIR COMMITMENT TO OUR COMMUNITIES.“
MOVING
5W E S T B A N C O R P O R AT I O N I N C . A N D S U B S I D I A R I E S Since first opening in 1893 on the muddy streets of Valley Junction, West Bank has now called four different locations in West Des Moines home for its headquarters. After residing at its third address on 22nd Street in a building leased for over 50 years, West Bank now has a new home. Following years of planning and construction, West Bank officially opened its new, four-story, 73,000-square-foot headquarters building at 3330 Westown Parkway in West Des Moines. West Bank’s leadership chose this location as a show of continued commitment to the community, as this neighborhood within the city needed a drastic upgrade and a catalyst for revitalization. For the two weeks leading up to its April 15th opening, our employees boxed up their belongings and moved to their new home. Following the opening, the safe deposit boxes also had to be relocated––a daunting task to say the least. Despite the complex logistics required for a move of this magnitude, the bank continued to effectively serve its customers throughout the transition––a true testament to its people. The new facility now provides the bank with spaces better suited to customer care and relationship building. As an additional display of commitment to its community, West Bank donated furniture from its old headquarters to a few nonprofit neighbors. One such organization was Community Support Advocates (CSA) to help furnish their new mental health therapy clinic also in West Des Moines. CSA is dedicated to serving the most vulnerable members of the community––those who have been impacted by disabilities, mental health issues, and traumatic brain injuries. West Bank continues to move forward by investing in its people and building deep-rooted, community-based relationships. West Bank has thrived, weathered change, and endured for 132 years because of its strong connections to the communities it serves––the people who have helped make West Bank Strong. FORWARD NEW ADDRESS, SAME WEST DES MOINES ROOTS. O P E N I N G A P R I L 1 5 , 2 0 2 4 3 3 3 0 W E S T O W N P A R K W A Y • W E S T D E S M O I N E S , I A 5 0 2 6 6 Member FDIC
HEADQUARTERS RIBBON CUTTING On May 1, 2024, West Bank held a ceremonial ribbon cutting to celebrate the opening of its new headquarters. The ceremony was opened by Dave Nelson who reminded attendees that West Bank is the oldest existing business of any kind to be founded in West Des Moines. During his words, he reiterated the importance of remaining headquartered in West Des Moines and discussed the complexity that comes with redevelopment. While most people believed that West Bank owned its prior headquarters on 22nd Street, he reminded them it had been leased for more than 50 years. West Bank’s growth over the years also led to a second leased office space, which housed several back-office employees. The new headquarters is big enough for everyone to be in the same building and offers plenty of room for future growth. The West Des Moines Chamber of Commerce, city officials, and many other community leaders attended the event. A SPECIAL THANKS TO OUR CONTRACTORS On August 23, 2024, West Bank hosted a special contractor appreciation event at the new facility. West Bank’s beautiful four-story, 73,000- square-foot building, which also includes a rooftop entertaining space, retention pond, cafeteria and fitness area for employees, and a lobby and drive-up for customers, wouldn’t have been possible without their hard work and dedication to the project. 2 0 2 4 A N N U A L R E P O R T6 Image of the 2024 invitation
ENCAPSULATED IN TIME On September 25, 2024, a time capsule was buried at West Bank headquarters that will not be opened until 2074. West Bankers attended a small burial ceremony and each pitched a shovel of dirt over the capsules. Items placed in the time capsule include a Banner signed by employees, the Central Iowa Community Board, and the West Bank Board of Directors; Banking Items including a debit card, checks, brochures, and cash envelopes; a Business Record Newspaper featuring Dave Nelson and the West Bank headquarters on the cover; Photos of the building and Letters from employees; Marketing Swag including a koozie, chip clip, business card holder, lapel pin, golf tees, golf ball marker, and divot tool; the Standing Strong West Bank History Video; Postcards mailed to customers that communicated the move; and a Bottle of limited edition 1893 West Bank Bourbon Whiskey.
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9W E S T B A N C O R P O R AT I O N I N C . A N D S U B S I D I A R I E S OWATONNA IS NOW OPEN On January 21, 2025, our new building in Owatonna officially opened to the public, marking the successful completion of new building construction for all of West Bank’s Minnesota locations. The new building is part of Owatonna’s ASCEND project, the city’s first mixed-use and massive riverfront development which was over ten years in the making. When West Bank’s leadership began looking for new locations for its Owatonna location, they knew being part of this project would have the impact the community needed. Confirming this belief, ASCEND development partner Darren Stadheim has stated that West Bank’s decision to build on the former Owatonna Chamber of Commerce & Tourism site provided the “kick” the project needed. When considering sites for the project, West Bank market president Jason Eyberg said, “It’s not just about building a beautiful bank; it’s about how the building impacts, improves, and transforms our community in a positive way. This is what West Bank does.” West Bank CEO Dave Nelson echoed that sentiment by saying, “West Bank is committed to our communities. We frequently build in areas of the community in need of revitalization, and our buildings are designed to facilitate new business development and build strong customer relationships.” WE ARE EXCITED TO KEEP MOVING FORWARD WORKING WITH AND SERVING OUR COMMUNITIES.“
Pictured left to right: Dave Nelson, Al Petersen, Barry Cropp, and Brad Winterbottom AL PETERSEN Al Petersen began his banking career working for his family-owned bank in Harlan, Iowa while he was in high school in 1973. After working in a bank in Iowa City during college, he relocated to the Des Moines market after graduation. Throughout his 50-year banking career, he has served in many different roles and departments including teller, accounting, retail banking, branch management, commercial banking, and special assets. This prepared him well to serve as a mentor for many retail bankers. Throughout the ’70s, ’80s, ’90s, and beyond, Al saw his fair share of ups and downs in the economy and in the banking industry. He humbly describes his biggest accomplish- ments as the way he has “survived” many of the banking industry’s toughest times including deregulation in the 1970s, high inflationary periods and farm crises of the 1980s, floods in the 1990s, recessions, digital transforma- tions, and everything in between. Most recently, in 2020, he led West Bank’s branch teams through the PPP lending process during the Covid pandemic. Al considers himself fortunate to have worked with a number of talented leaders in the banking industry. This includes John Ruan and John Crystal with Bankers Trust and David Miller and Dave Nelson with West Bank. Outside of his time at the bank, Al served on the Bethel Mission and Hope Ministries Board of Directors and held the position of board chair for several years. He also served on the Rebuilding Together Board of Directors. Additionally, he gave back to young professionals in the banking industry by serving as a consultant for Junior Achievement and teaching in American Institute of Banking programs. On September 16, 2024, the Iowa Bankers Association honored Barry Cropp and Al Petersen for their remarkable 50-year careers in banking. 2 0 2 4 A N N U A L R E P O R T10 BARRY CROPP Barry Cropp began his career in banking in Des Moines in 1970 and has been with West Bank since 1993. For Barry, effective customer service is founded in the belief that “we can’t be bigger than the person across the desk, because they are the reason we’re here.” His sincere ability to connect with his customers and gain their trust is notable to this day, as he greets customers, makes them feel at ease, and directs them to the correct department to meet their needs. Barry’s deep Des Moines roots have served him well in his banking career. Barry credits his godmother, Ruth Sandy, as his inspiration for getting into banking, a field that employed few persons of color in the Des Moines area in the 1970s. Ruth was a banker who took Barry under her wing when he was seven years old, challenging him to “change peoples’ way of thinking” by working hard, being respectful, and selling himself to the executives in charge of hiring. Starting in the file room, he worked through the ranks at several financial institutions, becoming a Personal Banker and eventually an Assistant Branch Manager at West Bank. Outside of the bank, Barry has served for years as Cantor, Soloist, and Choir Member at the Basilica of St. John Catholic Church. His volunteer activities are varied, from joining other West Bankers in scrubbing the streets prior to the Valley Junction Art Fair, working the beer tent at the Farmers Market, and staffing his church’s BBQ stand at the State Fair, to singing with Musica Ecclesia, appearing in musicals, caroling at nursing homes, and participating in community choral events. He has also been a regular participant in the Friendly Songs of St. Patrick parade in downtown Des Moines.
DONNA HUFFMAN 35 Years KELLANEY COFFMAN 30 Years MINDA HAMANN 30 Years 11W E S T B A N C O R P O R AT I O N I N C . A N D S U B S I D I A R I E S JON HUMMEL AMERICAN BANKERS ASSOCIATION 2024 EMERGING LEADER AWARD The American Bankers Association presented Vice President and Commercial Banker Jon Hummel with the 2024 ABA Emerging Leaders Award. This award recognizes the next generation of bank leaders who are committed to the highest standards of achievement and service to both their industry and their local communities. Jon began his career at West Bank in 2012 as an Assistant Branch Manager and has been promoted a number of times to his current position of Vice President of Commercial Banking since 2020. He has dedicated much time and talent to the West Des Moines community and currently serves as a director on a variety of boards including the West Des Moines Chamber of Commerce and Ronald McDonald House. STANDING STRONG AWARDS West Bank’s new video, Standing Strong, received two Communicator Awards by the Academy of Interactive and Visual Arts during their 30th Annual Communicator Awards in New York for the Financial Services and Corporate Image categories. The video also a received a Telly Award during the 45th Annual Telly Awards in New York for Branded Content in the Banking and Financial Services category. Standing Strong is a 10-minute video based on a recently published book of the same name which tells West Bank’s more than 130-year story. To watch the video, scan the QR code or visit https://www.westbankstrong.com/about_us ECONOMIC IMPACT AWARD The Greater Des Moines Partnership presented West Bank with a 2024 Economic Impact Award to recognize their outstanding strategic contributions toward the economic vitality of the Greater Des Moines community. MILESTONE ANNIVERSARIES JENNIFER WAY 25 Years TOM CILEK 20 Years JILL HANSEN 20 Years
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LEADERSHIP 13W E S T B A N C O R P O R AT I O N I N C . A N D S U B S I D I A R I E S 2024 ANNUAL REPORT
2 0 2 4 A N N U A L R E P O R T14 JAMES NOYCE* Retired DAVID NELSON* CEO and President, West Bancorporation; Chair and CEO, West Bank JANE FUNK** EVP, Treasurer and Chief Financial Officer, West Bancorporation; EVP and Chief Financial Officer, West Bank BRAD WINTERBOTTOM** EVP, West Bancorporation; President, West Bank HARLEE OLAFSON** EVP and Chief Risk Officer, West Bancorporation; EVP and Chief Risk Officer, West Bank BRADLEY PETERS** EVP, West Bancorporation; EVP and Minnesota Group President, West Bank DOUGLAS GULLING* Retired LISA ELMING* Retired STEVEN GAER* Recoop Disaster Insurance SEAN MCMURRAY* Businessolver, Inc. GEORGE MILLIGAN* Chair, West Bancorporation; The Graham Group, Inc. ROSEMARY PARSON* EquiTrust Life Insurance Company STEVEN SCHULER* Retired THERESE VAUGHAN* Retired PHILIP JASON WORTH* Retired BOARD OF DIRECTORS * Director of West Bancorporation, Inc. and West Bank ** Director of West Bank
15W E S T B A N C O R P O R AT I O N I N C . A N D S U B S I D I A R I E S TAYLOR BROWN Brown NationaLease RHONDA BURKHARDT The Underground Company, LTD JERRY DEEGAN Retired DARIN FERGUSON Ferguson Commercial Real Estate Services RYAN FLYNN, CPA Flynn + Sweeney, LLC KEVIN GRIMM Investor/Consultant GREG LAMAIR Assured Partners LLC BRIAN LOFFREDO Loffredo Fresh Produce DAVE MOENCH Wolfe Eye Clinic STEVE SCHWEIZER Denman & Company VICTORIA VEIOCK Bing’s JEFF YURGAE Mueller-Yurgae Associates, Inc MATT ADAM Simmons Perrine Moyer Bergman PLC RODNEY ANDERSON Pancheros Mexican Grill JILL ARMSTRONG Skogman Realty DAVID BARKER Barker Apartments ADAM BRANTMAN Brava Roof Tile KEVIN DIGMANN Hodge Construction ANDY HODGE Hodge Construction BEN KINSETH Kinseth Hospitality Company RAVI PATEL Hawkeye Hotels LUKE RECKER Styker Corporation CHUCK SKAUGSTAD The Mansion Town Square Developers LEIGHTON SMITH BerganKDV CENTRAL IOWA COMMUNITY BOARD All six of our community boards are non-voting advisory boards with knowledge of the communities we serve. EASTERN IOWA COMMUNITY BOARD
2 0 2 4 A N N U A L R E P O R T16 BRYAN BODE Investor/Consultant MARK DRAPER River City Electric Company DR. WYNN KEARNEY Retired Surgeon/Investor STEVE KIBBLE Siesta Hills DAVID PFEFFER Vintage Fine Homes, Inc. MARK PHINNEY C&N Sales Company RANDY WESTMAN Westman Investments ART WESTPHAL Bethany Lutheran College ANDREW WILLAERT Gislason & Hunter LLP DALE BUYTAERT CliftonLarsonAllen LLP MARK FREERKSEN Freerksen Trucking, Inc. CHAD HANSON Main Street Dental Clinics THERESA JAMES James Brothers Construction SCOTT MOHS Mohs Contracting/ Mohs Homes MIKE NOBLE Investor/Retired PAT NOBLE National Online Consignment and Rental DARREN ROEMHILDT Bridges Chiropractic Health Clinic BRANDON WAYNE Wayne–Norrid–Wetmore Wealth Management MANKATO COMMUNITY BOARD All six of our community boards are non-voting advisory boards with knowledge of the communities we serve. OWATONNA COMMUNITY BOARD
17W E S T B A N C O R P O R AT I O N I N C . A N D S U B S I D I A R I E S JASON BOYNTON, CPA Smith Schafer & Associates JEFF BROWN, JR. North Rock Real Estate MICHAEL BUSCH Paramark Corp. PATRICK DEUTSCH Pace International BOBBIE GOSTOUT, M.D. Vice President Emeritus, Mayo Clinic HAL HENDERSON HGA DICK KUEHN Kuehn Motors BRIAN LEARY Pharmaceutical Specialties, Inc. DAVID PEDERSON Dunlap & Seeger, P.A. PETER SCHULLER A.B. Systems, Inc. ED STANLEY Merit Building Enclosure Systems CHRIS TERRY CORE Real Estate Group NATALIE VICTORIA Victoria’s Restaurant and The Tap House DAVID BERDAN J-Berd Companies BYRON BJORKLUND Custom Catering by Short Stop JEFF DROWN Lyon Contracting STEVE FENEIS GC Real Estate Partners JASON FERCHE Ferche Companies JOHN SLOAN BT Holdings DR. KEVIN SMITH Regional Diagnostic Radiology ERIC STACK Millerbernd Manufacturing TIM TORBORG Torborg Builders HEIDI WEIKERT S.T. Cotter Turbine Services GREG WINDFELDT PCI ROCHESTER COMMUNITY BOARD All six of our community boards are non-voting advisory boards with knowledge of the communities we serve. ST. CLOUD COMMUNITY BOARD
FINANCIALS 2024 ANNUAL REPORT 2 0 2 4 A N N U A L R E P O R T18
19W E S T B A N C O R P O R AT I O N I N C . A N D S U B S I D I A R I E S FINANCIAL HIGHLIGHTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2024, 2023, AND 2022 (dollars in thousands, except per share data) 2024 2023 2022 RESULTS OF OPERATIONS Net interest income $ 71,362 $ 69,031 $ 91,740 Credit loss expense (benefit) 1,000 700 (2,500) Noninterest income 8,434 10,066 10,208 Noninterest expense 51,353 48,611 45,051 Income before income taxes 27,443 29,786 59,397 Net income 24,050 24,137 46,399 PER COMMON SHARE Cash dividends $ 1.00 $ 1.00 $ 1.00 Basic earnings 1.43 1.44 2.79 Diluted earnings 1.42 1.44 2.76 Closing stock price 21.65 21.20 25.55 Book value 13.54 13.46 12.69 YEAR-END BALANCES Assets $ 4,014,991 $ 3,825,758 $ 3,613,218 Investment securities 559,694 646,876 683,451 Loans 3,004,860 2,927,535 2,742,836 Nonperforming loans 133 296 322 Other real estate owned — — — Deposits 3,357,596 2,973,779 2,880,408 Stockholders’ equity 227,875 225,043 211,112 RATIOS Return on average assets 0.61% 0.66% 1.32% Return on average equity 10.71% 11.42% 20.71% Texas ratio (1) 0.05% 0.12% 0.14% Efficiency ratio (1) (2) 63.25% 60.73% 43.70% Dividend payout ratio 69.88% 69.21% 35.82% Dividend yield 4.62% 4.72% 3.91% Net interest margin (2) 1.91% 2.01% 2.76% Allowance for credit losses as a % of loans 1.01% 0.97% 0.93% Net (charge-offs) recoveries as % of average loans 0.00% 0.00% (0.02%) Nonperforming loans as % of loans 0.00% 0.01% 0.01% Tangible common equity to tangible assets 5.68% 5.88% 5.84% (1) A lower ratio is better. (2) As presented, this is a non-GAAP measure – see “Non-GAAP Financial Measures” for additional details.
2 0 2 4 A N N U A L R E P O R T20 CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2024 AND 2023 (dollars in thousands, except per share data) 2024 2023 ASSETS Cash and due from banks $ 28,750 $ 33,245 Interest-bearing deposits 214,728 32,112 Cash and cash equivalents 243,478 65,357 Securities available for sale, at fair value 544,565 623,919 Federal Home Loan Bank stock, at cost 15,129 22,957 Loans 3,004,860 2,927,535 Allowance for credit losses (30,432) (28,342) Loans, net 2,974,428 2,899,193 Premises and equipment, net 109,985 86,399 Accrued interest receivable 12,825 13,581 Bank-owned life insurance 44,990 43,864 Deferred tax assets, net 33,202 34,303 Other assets 36,389 36,185 TOTAL ASSETS $ 4,014,991 $ 3,825,758 LIABILITIES AND STOCKHOLDERS’ EQUITY LIABILITIES Deposits Noninterest-bearing demand $ 541,053 $ 548,726 Interest-bearing demand 543,855 481,207 Savings and money market 1,643,891 1,440,076 Time 628,797 503,770 Total deposits 3,357,596 2,973,779 Federal funds purchased and other short-term borrowings — 150,270 Subordinated notes, net 79,893 79,631 Federal Home Loan Bank advances 270,000 315,000 Long-term debt 42,736 47,736 Accrued expenses and other liabilities 36,891 34,299 Total liabilities 3,787,116 3,600,715 STOCKHOLDERS’ EQUITY Preferred stock, $0.01 par value; authorized 50,000,000 shares; no shares issued and outstanding at December 31, 2024 and 2023 — — Common stock, no par value; authorized 50,000,000 shares; 16,832,632 and 16,725,094 shares issued and outstanding at December 31, 2024 and 2023, respectively 3,000 3,000 Additional paid-in capital 35,619 34,197 Retained earnings 278,613 271,369 Accumulated other comprehensive loss (89,357) (83,523) Total stockholders’ equity 227,875 225,043 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 4,014,991 $ 3,825,758 DECEMBER 31,
21W E S T B A N C O R P O R AT I O N I N C . A N D S U B S I D I A R I E S CONSOLIDATED STATEMENTS OF INCOME YEARS ENDED DECEMBER 31, 2024, 2023, AND 2022 (dollars in thousands, except per share data) 2024 2023 2022 INTEREST INCOME Loans, including fees $ 166,222 $ 142,923 $ 107,095 Securities: Taxable 13,030 13,696 12,524 Tax-exempt 3,219 3,517 3,527 Interest-bearing deposits 7,595 169 203 TOTAL INTEREST INCOME 190,066 160,305 123,349 INTEREST EXPENSE Deposits 97,284 66,796 22,629 Federal funds purchased and other short-term borrowings 4,248 9,532 1,764 Subordinated notes 4,431 4,442 2,867 Federal Home Loan Bank advances 10,313 7,694 2,669 Long-term debt 2,428 2,810 1,680 TOTAL INTEREST EXPENSE 118,704 91,274 31,609 NET INTEREST INCOME 71,362 69,031 91,740 CREDIT LOSS EXPENSE (BENEFIT) 1,000 700 (2,500) Net interest income after credit loss expense (benefit) 70,362 68,331 94,240 NONINTEREST INCOME Service charges on deposit accounts 1,843 1,859 2,194 Debit card usage fees 1,919 1,980 1,969 Trust services 3,449 3,068 2,709 Increase in cash value of bank-owned life insurance 1,126 1,044 964 Gain from bank-owned life insurance — 691 — Loan swap fees — 431 835 Realized securities (losses), net (1,172) (431) — Other income 1,269 1,424 1,537 TOTAL NONINTEREST INCOME 8,434 10,066 10,208 NONINTEREST EXPENSE Salaries and employee benefits 27,588 27,060 25,838 Occupancy and equipment 7,320 5,507 4,913 Data processing 2,991 2,790 2,597 Technology and software 2,896 2,341 2,137 FDIC insurance 2,560 1,750 996 Professional fees 1,041 1,026 874 Directors fees 828 892 814 Other expenses 6,129 7,245 6,882 TOTAL NONINTEREST EXPENSE 51,353 48,611 45,051 INCOME BEFORE INCOME TAXES 27,443 29,786 59,397 INCOME TAXES 3,393 5,649 12,998 NET INCOME $ 24,050 $ 24,137 $ 46,399 EARNINGS PER COMMON SHARE Basic earnings per common share $ 1.43 $ 1.44 $ 2.79 Diluted earnings per common share $ 1.42 $ 1.44 $ 2.76 YEAR ENDED DECEMBER 31,
2 0 2 4 A N N U A L R E P O R T22 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM NON-GAAP FINANCIAL MEASURES AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2024, 2023, AND 2022 (dollars in thousands, except per share data) 2024 2023 2022 RECONCILIATION OF NET INTEREST INCOME AND NET INTEREST MARGIN ON AN FTE BASIS TO GAAP: Net interest income (GAAP) $ 71,362 $ 69,031 $ 91,740 Tax-equivalent adjustment (1) 182 491 1,122 Net interest income on an FTE basis (non-GAAP) 71,544 69,522 92,862 Average interest-earning assets 3,747,528 3,465,964 3,361,091 Net interest margin on an FTE basis (non-GAAP) 1.91% 2.01% 2.76% RECONCILIATION OF EFFICIENCY RATIO ON AN FTE BASIS TO GAAP: Net interest income on an FTE basis (non-GAAP) $ 71,544 69,522 92,862 Noninterest income 8,434 10,066 10,208 Adjustment for realized securities losses, net 1,172 431 — Adjustment for losses on disposal of premises and equipment, net 47 29 29 Adjusted income $ 81,197 $ 80,048 $ 103,099 Noninterest expense $ 51,353 $ 48,611 $ 45,051 Efficiency ratio on an adjusted FTE basis (non-GAAP) (2) 63.25% 60.73% 43.70% (1) Computed on a tax-equivalent basis using an incremental federal income tax rate of 21 percent, adjusted to reflect the effect of nondeductible interest expense associated with owning tax-exempt securities and loans. Management believes the presentation of this non-GAAP measure provides supplemental useful information for proper understanding of the financial results, as it enhances the comparability of income arising from taxable and nontaxable sources. (2) The efficiency ratio expresses noninterest expense as a percent of fully taxable equivalent net interest income and noninterest income, excluding specific noninterest income and expenses. Management believes the presentation of this non-GAAP measure provides supplemental useful information for proper understanding of the Company's financial performance. It is a standard measure of comparison within the banking industry. A lower ratio is more desirable. YEAR ENDED DECEMBER 31, To the Stockholders and the Board of Directors of West Bancorporation, Inc. We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of West Bancorporation, Inc. and its subsidiary, West Bank, as of December 31, 2024 and 2023, and the related consolidated statements of income, comprehensive income (not presented herein), stockholders’ equity (not presented herein) and cash flows (not presented herein) for each of the three years in the period ended December 31, 2024; and in our report, dated February 19, 2025, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed financial statements is fairly stated, in all material respects, in relation to the consolidated financial statements from which it has been derived. RSM US LLP Des Moines, Iowa | February 19, 2025
23W E S T B A N C O R P O R AT I O N I N C . A N D S U B S I D I A R I E S FORM 10-K STOCK INFORMATION West Bancorporation Inc. common stock is traded on the Nasdaq Global Select Market (WTBA), and quotations are furnished by the Nasdaq System. We had 136 common stockholders of record on December 31, 2024 and an estimated 4,300 additional beneficial holders whose stock was held in street name by brokerages or fiduciaries. A copy of the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission will be available on the Securities and Exchange Commission’s website at www.sec.gov and through a link on the Company’s website, westbankstrong.com, under Investor Relations—SEC Filings—Documents. A copy of the annual report can also be obtained upon request to Melissa Gillespie, Corporate Secretary, mgillespie@westbankstrong.com, 515-222-2370. TRANSFER AGENT AND REGISTRAR Equiniti Trust Company, LLC 48 Wall Street, New York, New York 10005 800-937-5449 www.equiniti.com MARKET AND DIVIDEND INFORMATION (1) HIGH LOW CLOSE DIVIDENDS 2024 4th Quarter $ 24.85 $ 18.02 $ 21.65 $ 0.25 3rd Quarter 22.13 16.36 19.01 0.25 2nd Quarter 18.20 15.80 17.90 0.25 1st Quarter 21.72 16.59 17.83 0.25 TOTAL: $ 1.00 2023 4th Quarter $ 22.39 $ 15.25 $ 21.20 $ 0.25 3rd Quarter 20.91 16.25 16.31 0.25 2nd Quarter 19.96 15.04 18.41 0.25 1st Quarter 25.80 17.58 18.27 0.25 TOTAL: $ 1.00 (1) The prices shown are the high, low and closing sale prices for the Company’s common stock. The market quotations, reported by Nasdaq, do not include retail markup, markdown or commissions.
FORWARD-LOOKING STATEMENTS 2 0 2 4 A N N U A L R E P O R T24 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. 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: interest rate risk, including the effects of changes in interest rates; effects on the U.S. economy resulting from the implementation of policies proposed by the new presidential administration, including tariffs, mass deportations and tax regulations; fluctuations in the values of the securities held in our investment portfolio, including as a result of changes in interest rates; competitive pressures, including from non-bank competitors such as credit unions, “fintech” companies and digital asset service providers; pricing pressures on loans and deposits; our ability to successfully manage liquidity risk; changes in credit and other risks posed by the Company’s loan portfolio, including declines in commercial or residential real estate values or changes in the allowance for credit losses dictated by new market conditions, accounting standards or regulatory requirements; the concentration of large deposits from certain clients, including those who have balances above current FDIC insurance limits; changes in local, national and international economic conditions, including the level and impact of inflation and possible recession; the effects of recent developments and events in the financial services industry, including the large- scale deposit withdrawals over a short period of time that resulted in several bank failures; changes in legal and regulatory requirements, limitations and costs; changes in customers’ acceptance of the Company’s products and services; the occurrence of fraudulent activity, breaches or failures of our or our third-party partners’ information security controls or cyber-security related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools; unexpected outcomes of existing or new litigation involving the Company; the monetary, trade and other regulatory policies of the U.S. government; 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; risks related to climate change and the negative impact it may have on our customers and their businesses; changes to U.S. tax laws, regulations and guidance; potential changes in federal policy and at regulatory agencies as a result of the 2024 presidential election; new or revised accounting policies and practices, as may be adopted by state and federal regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board; talent and labor shortages and employee turnover; and any other risks described in the “Risk Factors” sections of reports filed by the Company with the Securities and Exchange Commission. 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.
LOCATIONS IOWA HEADQUARTERS 3330 Westown Parkway, West Des Moines CORALVILLE 401 10th Avenue, Coralville EAST 2440 East Euclid Avenue, Des Moines GRAND 125 Grand Avenue, West Des Moines SOUTH 3920 SW 9th Street, Des Moines WAUKEE 955 East Hickman Road, Waukee CITY CENTER 809 6th Avenue, Des Moines MINNESOTA MANKATO 1911 Premier Drive, Mankato OWATONNA 328 Hoffman Drive NW, Owatonna ROCHESTER 2188 Superior Drive NW, Rochester ST. CLOUD 1800 Bellin Drive, St. Cloud ONLINE WESTBANKSTRONG.COM @WESTBANKSTRONG
