WEST BANCORPORATION INC

The following discussion describes the consolidated operations and financial condition of the Company, West Bank and West Bank's special purpose subsidiaries (which are invested in new markets tax credit activities). Results of operations for the three and six months ended June 30, 2025 are compared to the results for the same periods in 2024, and the consolidated financial condition of the Company as of June 30, 2025 is compared to that as of December 31, 2024. This discussion and analysis should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 20, 2025.

The Company conducts business from its headquarters building in West Des Moines, Iowa and through its branch offices in central Iowa, which is generally the greater Des Moines metropolitan area; eastern Iowa, which is the area including and surrounding Iowa City and Coralville; and southern Minnesota, which includes the cities of Rochester, Owatonna, Mankato and St. Cloud.

Net income for the three months ended June 30, 2025 was $7,979, or $0.47 per diluted common share, compared to $5,192, or $0.31 per diluted common share, for the three months ended June 30, 2024. The Company's annualized return on average assets and return on average equity for the three months ended June 30, 2025 were 0.80 percent and 13.65 percent, respectively, compared to 0.53 percent and 9.50 percent, respectively, for the three months ended June 30, 2024.

Net interest income for the three months ended June 30, 2025 increased $4,189, or 24.3 percent, compared to the three months ended June 30, 2024. The increase in net interest income was primarily due to an increase in interest income on deposits with banks and decreases in interest expense on deposits and borrowed funds, partially offset by a decrease in interest income on securities.

Noninterest income increased $64 for the three months ended June 30, 2025 compared to the same period in 2024. Noninterest expense increased $291 during the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to increases in salaries and employee benefits and occupancy and equipment expense.

Net income for the six months ended June 30, 2025 was $15,821, or $0.93 per diluted common share, compared to $11,001, or $0.65 per diluted common share, for the six months ended June 30, 2024. The Company's annualized return on average assets and return on average equity for the six months ended June 30, 2025 were 0.80 percent and 13.74 percent, respectively, compared to 0.57 percent and 10.07 percent, respectively, for the six months ended June 30, 2024.

Net interest income for the six months ended June 30, 2025 increased $8,294, or 24.4 percent, compared to the six months ended June 30, 2024. The increase in net interest income was primarily due to increases in interest income on loans and deposits with banks and decreases in interest expense on deposits and short-term borrowed funds, partially offset by a decrease in interest income on securities.

Noninterest income increased $8 for the six months ended June 30, 2025 compared to the same period in 2024. Noninterest expense increased $1,486 during the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to increases in salaries and employee benefits and occupancy and equipment expense.

Total loans outstanding decreased $38,503, or 1.3 percent, to $2,966,357 during the first six months of 2025. The credit quality of the loan portfolio remained strong, as evidenced by the Company's ratio of nonperforming loans to total assets of 0.00 percent as of both June 30, 2025 and December 31, 2024. As of June 30, 2025, the allowance for credit losses was 1.03 percent of total outstanding loans, compared to 1.01 percent of total outstanding loans as of December 31, 2024. Management believed the allowance for credit losses at June 30, 2025 was adequate to absorb expected losses in the loan portfolio as of that date.

On a quarterly basis, the Company compares three key performance metrics to those of our identified peer group. The peer group for 2025 consists of 20 Midwestern, publicly traded financial institutions, including Bank First Corporation, Bridgewater Bancshares Inc., ChoiceOne Financial Services, Inc., Civista Bancshares, Inc., Equity Bancshares, Inc., Farmers National Banc Corp., Farmers & Merchants Bancorp., First Business Financial Services, Inc., First Financial Corp., First Mid Bancshares, Inc., German American Bancorp, Inc., HBT Financial Inc., Hills Bancorporation, Isabella Bank Corporation, LCNB Corp., Mercantile Bank Corporation, MidWest One Financial Group, Inc., Nicolet Bankshares, Inc., Peoples Bancorp, Inc., and Southern Missouri Bancorp, Inc. The Company is in the middle of the group in terms of asset size. The Company's goal is to perform at or near the top of this peer group relative to what we consider to be three key metrics: return on average equity, efficiency ratio and nonperforming assets to total assets. We believe these measures encompass the factors that define the performance of a community bank. Company and peer results for the key financial performance measures are summarized below.

(1) The efficiency ratio is a non-GAAP financial measure. For further information, refer to the Non-GAAP Financial Measures section of this report.

(2) Latest data available.

At its meeting on July 23, 2025, the Company's Board of Directors declared a regular quarterly cash dividend of $0.25 per common share. The dividend is payable on August 20, 2025, to stockholders of record on August 6, 2025.