West Bancorporation
Annual Report 2020

Plain-text annual report

e e e e e e e e e e e e e e e e e e e e e e e e e e e e e 2 0 2 0 A N N U A L R E P O R T e e e e e THOUSANDS $ 34,000 32,000 30,000 28,000 26,000 24,000 22,000 20,000 18,000 16,000 2020 FINANCIAL PERFORMANCE Return on Average Equity Return on Average Assets 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Net Income Earnings Per Share Dividends Per Share $ 2.50 2.00 1.50 1.00 0.50 $ 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Total Loans Total Deposits THOUSANDS $ 2,400,000 2,200,000 2,000,000 1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 THOUSANDS $ 2,800,000 2,600,000 2,400,000 2,200,000 2,000,000 1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 W E S T B A N C O R P O R A T I O N , I N C . A N D S U B S I D I A R Y • 2 0 2 0 A N N U A L R E P O R T Dear Stockholders: Our Company entered 2020 with great momentum and optimism for another year of outstanding performance. We started the year with a strong balance sheet, exceptional credit quality and profitable operations in our newest Minnesota market expansion. It was that momentum and optimism that sustained our performance during the unprecedented challenges of 2020. Our strategy of being the best, not the biggest, served us well this year. Our business model allowed us to be a source of strength for our communities. Despite the unique operating conditions and demands, our team remained focused on responding to the needs of our customers and communities, while keeping the health and safety of everyone a top priority. The pandemic provided an opportunity for West Bank to live its brand and be agile in working to meet the needs of clients. These efforts included originating nearly 1,000 Small Business Administration Paycheck Protection Program (PPP) loans and providing nearly 300 payment deferral modifications related to the pandemic. Despite this being an incredibly unique and challenging year, we are proud of what our team has accomplished and happy to share some of the Company’s achievements. First, loans grew over eight percent, not including PPP loans. Our employees engaged in extraordinary efforts to meet the ongoing business needs of our customers and communities in addition to delivering pandemic-related relief programs. Second, net income for 2020 was $32.7 million, a 14 percent increase over last year. This represents an all-time record year for earnings even while the Bank recorded a provision for loan losses of $12 million as the risk for loan defaults continues to be elevated with uncertainty surrounding the duration of the pandemic and impact of government actions. Finally, because of the success of our 2019 expansion in Minnesota, we began construction of a permanent branch office in Sartell, Minnesota, a suburb of St. Cloud. The Company’s board and management wish to thank all of our employees for their dedication and hard work during the past year while adjusting to ongoing changes and unique work demands in response to the pandemic. We see a bright future for your Company. We believe we have the right people doing the right things on purpose every day. Those efforts will allow us to create value for our stockholders for years to come. Sincerely, David D. Nelson CEO and President, West Bancorporation, Inc. Chairman and CEO, West Bank W E S T B A N C O R P O R A T I O N , I N C . A N D S U B S I D I A R Y • 2 0 2 0 A N N U A L R E P O R T 1 e e e e e 2 OUR VISION Our vision is to achieve and sustain a position of industry envy and admiration. 2020 HIGHLIGHTS Despite a turbulent year for our country, we remained steadfast in our focus to: Enhance the service experience • During June and July, more than 8,000 West Bank customers received email surveys to provide feedback on opportunities for banking service improvements. • Based on the results, we updated our Customer Service training manual and implemented new teller service standards to ensure our customers receive the highest level of assistance every time. In October, West Bank launched a new • website to improve the online user experience featuring a fresh new look, streamlined navigation and updated video tutorials. Support our communities • With social distancing identified as a key safety measure during the COVID-19 pandemic, we held a contact-free paper shred day so the community could dispose of personal identifying information safely. • West Bank employees and the West Bancorporation Foundation supported more than 170 nonprofits in 2020. OUR MISSION 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. 3 3 Standing Strong With Our Community Businesses "The West Bank team has always valued the local connections that make us a community bank. I credit the strength of these relationships for putting us in a position to successfully help our customers navigate challenges related to COVID-19." The year 2020 was unlike any we’ve seen in our lifetime. For more than 127 years, we have remained a dedicated partner to community businesses, yet the COVID-19 pandemic presented some of the toughest, unexpected challenges for our communities we’ve seen in decades. As a bank serving communities across Iowa and Minnesota, the financial strain created by the pandemic for some of our business customers became evident early in the year. Some businesses were forced to temporarily close, while others experienced drastic reductions in income and profits. Retailers struggled to balance cash flow, often resulting in trouble covering payroll. When the United States Treasury announced on March 27 the Paycheck Protection Program (PPP), with $349 billion available in forgivable small business loans, we immediately jumped to action, converting the Bank almost overnight into an SBA “loan factory.” The people counting on us weren’t just our customers—they were our neighbors, our community retailers and our friends. Despite the initial uncertainty surrounding the requirements and process for PPP loans, our bankers began alerting business customers of the loan opportunity, gathering information and quickly processing as many applications as possible for the “first come, first served” loans. 4 e e e e e "The West Bank team has always valued the local connections that make us a community bank. I credit the strength of these relationships for putting us in a position to successfully help our customers navigate challenges related to COVID-19." - David Nelson, CEO and President, West Bancorporation, Inc. The first major hurdle faced by West Bank staff was experiencing a block when attempting to access the online SBA portal for submitting data. Thanks to Senator Joni Ernst and her staff, we were granted access within a couple days. Due to the overwhelming number of forms submitted nationwide through the portal, the West Bank team found that entering data during off-business hours offered the least interference. Our team worked tirelessly for weeks around the clock in a race against millions of other applicants from across the nation to submit applications for as many of our customers as possible. By the end of 2020, West Bank processed nearly 1,000 PPP loans equaling approximately a quarter of a billion dollars for community businesses across Iowa and Minnesota. The year 2020 was tough. Yet we are proud to look back and share the stories that illustrate—to our team, our customers and our partners—that we are reliable, we are steadfast, and we are undeniably “West Bank Strong.” 5 Just as our business bankers and credit teams exhibited perseverance in helping our commercial clients, we would be remiss not to highlight the commitment of our entire team to address the needs of every customer despite the unusual, and even uncomfortable, circumstances of 2020. Like many other businesses experienced in the spring, West Bank was suddenly faced with the extraordinary challenge of temporarily closing our physical doors to help curb the spread of the COVID-19 virus. While our lobbies and branches may have been closed to walk-in traffic, we made sure our banking services remained accessible. We know that thousands of businesses, families and individuals count on us as their financial resource and advisors, so it was essential to keep our full range of banking services available no matter the circumstantial challenge. With our commitment to maintaining strong communities in mind, the West Bank team quickly mobilized to make the appropriate adjustments to continue supporting our customers:  When in-person meetings were restricted, our bankers continued to help customers through e-communications, telephone and secure electronic document sharing tools.  The West Bank Mobile App, Mobile Deposit and Video Teller Machines became invaluable for check deposits and completing routine bank transactions without requiring in-person interaction between bankers and customers.  While tellers continued to provide drive-up services, bankers joined them at the windows to provide services: opening accounts and new services, signatures on account and loan documents, new and replacement debit cards, and more.  A new “digital teller” was implemented through West Bank Online Banking and the Mobile App to provide product and service descriptions and other information. We are proud of the irrepressible spirit demonstrated by more than 175 employees throughout our West Bank locations in Iowa and Minnesota. Their care, strength and resolve for each other and our customers through a time of great uncertainty was unshakable. We know, without a doubt, that it is because of each team member that we are collectively "West Bank Strong." 6 e e e e e 7 7 Standing Strong With Our Team e e e e e 8 Standing Strong With Our Communities While many aspects of 2020 looked different, one thing remained the same—our love for giving back. As a community bank, we know the health of our communities is critical. For this reason, it was more important than ever to support the organizations that help fill the gaps of community need. In fact, between the West Bancorporation Foundation and West Bank, we supported more than 170 nonprofit organizations with more than $600,000 in donations and grants—on par with our giving history despite the challenges faced throughout the year.  West Bancorporation provided grants to organizations in three focus areas: Education ($47,500), Arts and Culture ($39,000) and Human Services ($181,500).  West Bankers were able to offer contact-free, socially distanced paper shredding to help the community safely dispose of personal identifying documents.  West Bank contributed more than $356,000 through sponsorships to support community organizations and events. Together with our nonprofit partners, our passionate team members and community groups, we are proud to contribute to the success and strength of the communities we serve. 9 B O A R D O F D I R E C T O R S Jim Noyce* Chairman, West Bancorporation Dave Nelson* CEO and President, West Bancorporation; Chairman and CEO, West Bank Douglas Gulling** 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 Patrick Donovan* Retired Steven Gaer* R & R Realty Group; Mayor, West Des Moines Mike Gerdin* Heartland Express, Inc. Sean McMurray* Businessolver, Inc. David Milligan* Retired West Bank Executive George Milligan* The Graham Group, Inc. Lou Ann Sandburg* Retired Steven Schuler* Retired Therese Vaughan* Drake University Jason Worth* Gilcrest/Jewett Lumber Company * Director of West Bancorporation, Inc. and West Bank ** Director of West Bank 1 0 W E S T B A N C O R P O R A T I O N , I N C . A N D S U B S I D I A R Y • 2 0 2 0 A N N U A L R E P O R T C E N T R A L I O W A C O M M U N I T Y B O A R D Jerry Deegan Retired Darin Ferguson Ferguson Commercial Real Estate Services Ryan Flynn, CPA Flynn + Sweeney, LLC Kevin Grimm Wexford & James, LLC Greg LaMair LMC Insurance and Risk Management Gene Loffredo Loffredo Fresh Produce Co., Inc. Dave Moench The Rasmussen Group, Inc. Austin Palmer The Palmer Group Victoria Veiock Bing's Mark Wackerbarth Denman & Company Nancy Williams American Land and Redevelopment, Corp. Jeff Yurgae Mueller-Yurgae Associates, Inc. E A S T E R N I O W A C O M M U N I T Y B O A R D Jesse Allen Allen Homes, Inc. Rodney Anderson Pancheros Mexican Grill Jill Armstrong Skogman Realty David Barker Barker Apartments Kevin Digmann Hodge Construction Mark Mysnyk Steindler Orthopedic Clinic, PLC Ravi Patel Hawkeye Hotels Luke Recker Stryker Instruments Chuck Skaugstad The Mansion Leighton Smith BerganKDV All six of our community boards are non-voting advisory boards with knowledge of the communities we serve. W E S T B A N C O R P O R A T I O N , I N C . A N D S U B S I D I A R Y • 2 0 2 0 A N N U A L R E P O R T 1 1 M A N K A T O C O M M U N I T Y B O A R D Bryan Bode Investor/Consultant Mark Draper River City Electric Company Mike Hennek 4.0 School Services, Inc. Dr. Wynn Kearney Retired Surgeon/Investor Steve Kibble Farmer/Investor Bruce Kinsella Retired Trust Officer Non-Profit Consultant Tim Lidstrom Lidstrom Commercial Realtors David Pfeffer Vintage Fine Homes, Inc. Mark Phinney C&N Sales Company Shield Security Systems Randy Westman Westman Investments Art Westphal Bethany Lutheran College Andrew Willaert Gislason & Hunter LLP O W A T O N N A C O M M U N I T Y B O A R D Dale Buytaert CliftonLarsonAllen LLP Joseph Effertz Black Forest Chad Hanson Main Street Dental Theresa James James Brothers Construction Wayne James James Brothers Construction Scott Mohs Mohs Contracting Mohs Homes Mike Noble Noble RV Pat Noble Noble RV Robert Randall Transcend Engagement Darren Roemhildt Bridge Street Chiropractic Brandon Wayne Ameriprise All six of our community boards are non-voting advisory boards with knowledge of the communities we serve. 1 2 W E S T B A N C O R P O R A T I O N , I N C . A N D S U B S I D I A R Y • 2 0 2 0 A N N U A L R E P O R T R O C H E S T E R C O M M U N I T Y B O A R D Jason Boynton, CPA Smith Schafer & Associates Jeff Brown Jeff Brown Real Estate Michael Busch Paramark Corp. Patrick Deutsch Pace International Bobbie Gostout, M.D. Mayo Clinic & Mayo Health Systems Greg Groves In Memoriam 1953-2020 Hal Henderson HGA, Architect and Developer Charlie Kuehn Kuehn Motors Dick Kuehn Kuehn Motors David Pederson Dunlap & Seeger, P.A. Peter Schuller A.B. Systems, Inc. Ed Stanley Merit Building Enclosure Systems Tim Weir Olmsted Medical Center All six of our community boards are non-voting advisory boards with knowledge of the communities we serve. W E S T B A N C O R P O R A T I O N , I N C . A N D S U B S I D I A R Y • 2 0 2 0 A N N U A L R E P O R T 1 3 S T . C L O U D C O M M U N I T Y B O A R D David Berdan J-Berd Mechanical Byron Bjorklund Short Stop Restaurants Steve Feneis Granite City Real Estate Jason Ferche Ferche Excavating Marc Sanderson Wilkie Sanderson Dr. Kevin Smith Regional Diagnostic Radiology Eric Stack Millerbernd Manufacturing Tim Torborg Torborg Builders, LLC Heidi Weikert S.T. Cotter Turbine Services West Bank invests a great deal in relationships because we believe they’re the cornerstone of our success — it’s one of the reasons we form a community board where we do business. We turn to these leaders for their insight, perspective and collective wisdom. We know it’s impossible to be a community bank without local connections and support, so we’re grateful for their assistance in helping us achieve our business and community relations goals. All six of our community boards are non-voting advisory boards with knowledge of the communities we serve. 1 4 W E S T B A N C O R P O R A T I O N , I N C . A N D S U B S I D I A R Y • 2 0 2 0 A N N U A L R E P O R T F I N A N C I A L H I G H L I G H T S Results of operations Net interest income Provision for loan losses Noninterest income Noninterest expense Income before income taxes Net income Per common share Cash dividends Basic earnings Diluted earnings Closing stock price Book value Year-end balances Assets Investment securities Loans Nonperforming loans Other real estate owned Deposits Stockholders’ equity Ratios Return on average assets Return on average equity Texas ratio (1) Efficiency ratio (1) (2) Dividend payout ratio Dividend yield Net interest margin (2) Allowance for loan losses as % of loans Net (charge-offs) recoveries as % of average loans Nonperforming loans as % of loans Tangible common equity to tangible assets As of and for the years ended December 31, 2020, 2019, and 2018 (dollars in thousands, except per share data) 2020 2019 2018 $ 82,833 $ 66,430 $ 62,058 12,000 9,602 39,054 41,381 32,712 600 8,318 38,406 35,742 28,690 (250) 7,752 34,992 35,068 28,508 $ 0.84 $ 0.83 $ 0.78 1.99 1.98 19.30 13.58 1.75 1.74 25.63 12.93 $3,185,744 $ 2,473,691 432,294 2,280,575 16,194 - 2,700,994 223,695 411,069 1,941,663 538 - 2,014,756 211,820 1.19% 15.49% 6.40% 41.96% 42.23% 4.35% 3.20% 1.29% 0.01% 0.71% 7.02% 1.20% 14.34% 0.23% 50.96% 47.33% 3.24% 2.95% 0.89% 0.00% 0.03% 8.56% 1.75 1.74 19.09 11.72 $ 2,296,568 465,795 1,721,830 1,928 - 1,894,529 191,023 1.31% 15.68% 0.93% 48.33% 44.53% 4.09% 3.06% 0.97% 0.03% 0.11% 8.32% (1) A lower ratio is better. (2) As presented, this is a non-GAAP measure – see “Non-GAAP Financial Measures” for additional details. W E S T B A N C O R P O R A T I O N , I N C . A N D S U B S I D I A R Y • 2 0 2 0 A N N U A L R E P O R T 1 5 C O N S O L I D A T E D B A L A N C E S H E E T S Assets Cash and due from banks Federal funds sold Cash and cash equivalents Investment securities available for sale, at fair value Federal Home Loan Bank stock, at cost Loans Allowance for loan losses Loans, net Premises and equipment, net Accrued interest receivable Bank-owned life insurance Deferred tax assets, net Other assets Total assets Liabilities and stockholders’ equity Liabilities Deposits Noninterest-bearing demand Interest-bearing demand Savings Time of $250 or more Other time Total deposits Federal funds purchased Subordinated notes, net Federal Home Loan Bank advances, net Long-term debt Accrued expenses and other liabilities Total liabilities Stockholders’ equity Preferred stock, $0.01 par value; authorized 50,000,000 shares; no shares issued and outstanding at December 31, 2020 and 2019 Common stock, no par value; authorized 50,000,000 shares; 16,469,272 and 16,379,752 shares issued and outstanding at December 31, 2020 and 2019, respectively Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total stockholders’ equity Total liabilities and stockholders’ equity December 31, 2020 and 2019 (dollars in thousands, except per share data) 2020 2019 $ 77,693 $ 37,808 318,742 396,435 420,571 11,723 2,280,575 (29,436) 2,251,139 29,077 11,231 42,686 11,289 11,593 15,482 53,290 398,578 12,491 1,941,663 (17,235) 1,924,428 29,680 7,134 34,893 5,361 7,836 $ 3,185,744 $2,473,691 $ 696,731 $ 380,079 553,881 1,274,254 46,907 129,221 2,700,994 5,375 20,452 175,000 21,558 38,670 346,307 996,836 81,871 209,663 2,014,756 2,660 20,438 179,365 22,925 21,727 2,962,049 2,261,871 - - 3,000 28,823 203,718 (11,846) 223,695 3,000 27,260 184,821 (3,261) 211,820 $ 3,185,744 $ 2,473,691 1 6 W E S T B A N C O R P O R A T I O N , I N C . A N D S U B S I D I A R Y • 2 0 2 0 A N N U A L R E P O R T C O N S O L I D A T E D S T A T E M E N T S O F I N C O M E Interest income Loans, including fees Investment securities: Taxable Tax-exempt Federal funds sold Total interest income Interest expense Deposits Federal funds purchased Subordinated notes Federal Home Loan Bank advances Long-term debt Total interest expense Net interest income Provision for loan losses Net interest income after provision for loan losses Noninterest income Service charges on deposit accounts Debit card usage fees Trust services Increase in cash value of bank-owned life insurance Loan swap fees Realized investment securities gains (losses), net Other income Total noninterest income Noninterest expense Salaries and employee benefits Occupancy Data processing FDIC insurance Professional fees Director fees Write-down of premises Other expenses Total noninterest expense Income before income taxes Income taxes Net income Earnings per common share: Basic earnings per common share Diluted earnings per common share Years ended December 31, 2020, 2019, and 2018 (dollars in thousands, except per share data) 2020 2019 2018 $ 90,668 $ 85,512 $ 71,189 7,818 1,443 304 100,233 11,256 23 1,016 4,705 400 17,400 82,833 12,000 70,833 2,360 1,632 2,078 593 1,572 77 1,290 9,602 21,591 5,467 2,508 1,210 927 868 - 6,483 39,054 41,381 8,669 10,031 2,022 1,110 98,675 25,214 241 1,023 5,130 637 32,245 66,430 600 65,830 2,492 1,644 2,026 644 - (87) 1,599 8,318 21,790 5,355 2,735 404 814 993 - 6,315 38,406 35,742 7,052 8,124 4,993 487 84,793 17,064 188 1,076 3,650 757 22,735 62,058 (250) 62,308 2,541 1,681 1,921 631 - (263) 1,241 7,752 18,791 4,996 2,682 685 840 1,014 333 5,651 34,992 35,068 6,560 $ 32,712 $ 28,690 $ 28 ,5 08 $ 1.99 $ 1.98 $ 1.75 $ 1.74 $ 1.75 $ 1.74 W E S T B A N C O R P O R A T I O N , I N C . A N D S U B S I D I A R Y • 2 0 2 0 A N N U A L R E P O R T 1 7 R E P O R T O F I N D E P E N D E N T R E G I S T E R E D P U B L I C A C C O U N T I N G F I R M 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 subsidiary as of December 31, 2020 and 2019, 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, 2020; and in our report, dated February 26, 2021, 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. Des Moines, Iowa | February 26, 2021 N O N - G A A P F I N A N C I A L M E A S U R E S Non-GAAP financial measures include the Company’s presentation of net interest margin on a fully taxable equivalent (FTE) basis and the presentation of the efficiency ratio on an FTE basis, excluding certain noninterest income and expenses. The following table reconciles the non-GAAP financial measures to GAAP. As of and for the years ended December 31, 2020, 2019, and 2018 (dollars in thousands, except per share data) Reconciliation of net interest income and net interest margin on an FTE basis to GAAP: Net interest income (GAAP) Tax-equivalent adjustment (1) Net interest income on an FTE basis (non-GAAP) Average interest-earning assets Net interest margin on an FTE basis (non-GAAP) Reconciliation of efficiency ratio on an FTE basis to GAAP: 2020 2019 2018 $ 82,833 $ 66,430 $ 62,058 707 $ 83,540 $ 2,614,342 3.20% 834 1,528 $ 67,264 $ 63,586 $ 2,277,461 $ 2,075,372 2.95% 3.06% Net interest income on an FTE basis (non-GAAP) $ 83,540 $ 67,264 $ 63,586 Noninterest income Adjustment for realized investment securities (gains) losses, net Adjustment for losses on disposal of premises and equipment, net Adjustment for gain on sale of premises Adjusted income Noninterest expense Adjustment for write-down of premises Adjusted expense 9,602 (77) 9 - 8,318 87 - (307) 7,752 263 109 - $ 93,074 $ 39,054 - $ 75,362 $ 38,406 - $ 71,710 $ 34,992 (333) $ 39,054 $ 38,406 $ 34,659 Efficiency ratio on an adjusted FTE basis (non-GAAP) (2) 41.96% 50.96% 48.33% (1) Computed on a tax-equivalent basis using a federal income tax rate of 21 percent, adjusted to reflect the effect of the 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 financial performance. It is a standard measure of comparison within the banking industry. 1 8 W E S T B A N C O R P O R A T I O N , I N C . A N D S U B S I D I A R Y • 2 0 2 0 A N N U A L R E P O R T F O R M 1 0 - K 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 Alice Jensen at 515-222-2300 or ajensen@westbankstrong.com. S T O C K I N F O R M A T I O N West Bancorporation’s common stock is traded on the Nasdaq Global Select Market, and quotations are furnished by the Nasdaq System. We had 170 common stockholders of record on December 31, 2020, and an estimated 3,200 additional beneficial holders whose stock was held in street name by brokerages or fiduciaries. Market and dividend information (1) High Low Close Dividends 2020 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter Total 2019 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter Total $ 21.79 $ 15.53 $ 19.30 17.99 20.67 25.68 15.50 14.50 13.74 15.84 17.49 16.35 $ 25.93 $ 21.01 $ 25.63 22.47 22.32 23.74 19.63 20.14 19.02 21.74 21.22 20.68 $ 0.21 0.21 0.21 0.21 $0.84 $ 0.21 0.21 0.21 0.20 $0.83 (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. T R A N S F E R A G E N T A N D R E G I S T R A R American Stock Transfer & Trust Company, LLC 6201 15th Avenue, Brooklyn, New York 11219 800-937-5449 | www.amstock.com W E S T B A N C O R P O R A T I O N , I N C . A N D S U B S I D I A R Y • 2 0 2 0 A N N U A L R E P O R T 1 9 F O R W A R D - L O O K I N G S T A T E M E N T S 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: the effects of the Coronavirus Disease 2019 (COVID-19) pandemic, including its potential effects on the economic environment, our customers and our operations, as well as any changes to federal, state or local government laws, regulations or orders in connection with the pandemic; interest rate risk; competitive pressures; pricing pressures on loans and deposits; changes in credit and other risks posed by the Company’s loan and investment portfolios, including declines in commercial or residential real estate values or changes in the allowance for loan losses dictated by new market conditions, accounting standards (including as a result of the future implementation of the current expected credit loss (CECL) accounting standard) or regulatory requirements; actions of bank and nonbank competitors; changes in local, national and international economic conditions; changes in legal and regulatory requirements, limitations and costs; changes in customers’ acceptance of the Company’s products and services; cyber-attacks; 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, widespread disease or pandemics, such as the COVID-19 pandemic, or other adverse external events; developments and uncertainty related to the future use and availability of some reference rates, such as the London Interbank Offered Rate, as well as other alternative reference rates; 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. 2 0 W E S T B A N C O R P O R A T I O N , I N C . A N D S U B S I D I A R Y • 2 0 2 0 A N N U A L R E P O R T 2 0 2 0 A N N U A L R E P O R T © West Bancorporation, Inc. and Subsidiary 2 0 2 0 A N N U A L R E P O R T Locations IOWA Main Bank 1601 22nd St. Waukee 955 East Hickman Rd. West Des Moines Waukee Drive-Up Express City Center 809 6th Ave. Des Moines Urbandale 3255 99th St. Urbandale Coralville 401 10th Ave. Coralville East 2440 East Euclid Ave. Des Moines Grand 125 Grand Ave. West Des Moines South 3920 SW 9th St. Des Moines MINNESOTA Mankato 122 North Broad St. Mankato Owatonna 345 Florence Ave., Suite 101 Owatonna Rochester 2188 Superior Dr. NW Rochester St. Cloud 622 Roosevelt Rd., Suite 150 St. Cloud ONLINE westbankstrong.com @westbankstrong © West Bancorporation, Inc. and Subsidiary 

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