West Bancorporation (WTBA) risk factors, FY2025 10-K

Risks Related to Credit Quality

1. 01We must effectively manage the credit risks of our loan portfolio
2. 02The information that we use in managing our credit risk may be inaccurate or incomplete, which may result in an increased risk of default and otherwise have an adverse effect on our business, results of operations and financial condition
3. 03Our loan portfolio includes commercial loans, which involve risks specific to commercial borrowers
4. 04Our loan portfolio includes commercial real estate loans, which involve risks specific to real estate values
5. 05West Bancorporation, Inc. and Subsidiary
6. 06The level of our commercial real estate loan portfolio may subject us to additional regulatory scrutiny
7. 07We are subject to environmental liability risk associated with real estate collateral securing our loans

Risks Related to Accounting Policies and Estimates

1. 08Our allowance for credit losses may be insufficient to absorb potential losses in our loan portfolio
2. 09Our accounting policies and methods are the basis for how we report our financial condition and results of operations, and they may require management to make estimates about matters that are inherently uncertain
3. 10Changes in accounting policies or standards could materially impact our financial statements
4. 11If a significant portion of any unrealized losses in our portfolio of investment securities were to incur credit losses, we would recognize a material charge to our earnings, and our capital ratios would be adversely impacted
5. 12Failure to maintain effective internal controls over financial reporting could impair our ability to accurately and timely report our financial results and could increase the risk of fraud

Risks Related to Information Security and Business Interruption

1. 13The occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents could have a material adverse effect on our business, financial condition, results of operations and growth prospects
2. 14Issues with the use of artificial intelligence in our marketplace may result in reputational harm or liability, or could otherwise adversely affect our business
3. 15We depend on information technology and telecommunications systems of third parties, and any systems failures, interruptions or data breaches involving these systems could adversely affect our operations and financial condition
4. 16We are subject to liquidity risks31% rewritten
5. 17The competition for banking and financial services in our market areas is high, which could adversely affect our financial condition and results of operations
6. 18Loss of customer deposits due to increased competition could increase our funding costs
7. 19Damage to our reputation could adversely affect our business
8. 20We are subject to various legal claims and litigation
9. 21The soundness of other financial institutions could adversely affect us
10. 22We may experience difficulties in managing our growth
11. 23Maintaining or increasing our market share may depend on lowering prices and the adoption of new products and services
12. 24The loss of the services of any of our senior executive officers or key personnel could cause our business to suffer
13. 25Labor shortages and a failure to attract and retain qualified employees could negatively impact our business, results of operations and financial condition
14. 26Changes in interest rates could negatively impact our financial condition and results of operations76% rewritten
15. 27Our business is subject to domestic and, to a lesser extent, international economic conditions and other factors, many of which are beyond our control and could materially and adversely affect us28% rewritten
16. 28Continued elevated levels of inflation could adversely impact our business, results of operations and financial condition

Risks Related to the Supervision and Regulation of the Banking Industry and Government Policies

1. 29We may be materially and adversely affected by the highly regulated environment in which we operate
2. 30Monetary policies and regulations of the Federal Reserve could adversely affect our business, financial condition and results of operations54% rewritten
3. 31Technology is changing rapidly and may put us at a competitive disadvantage
4. 32Consumers may decide not to use banks to complete their financial transactions, which could adversely affect our business and results of operations
5. 33Climate change could adversely affect our business, affect client activity levels and damage our reputation

Risks Related to West Bancorporation’s Common Stock

1. 34Our stock is relatively thinly traded
2. 35The stock market can be volatile, and fluctuations in our operating results and other factors could cause our stock price to decline
3. 36Issuing additional common or preferred stock may adversely affect the market price of our common stock, and capital may not be available when needed
4. 37The holders of our 5.25% Fixed-to-Floating Rate Subordinated Notes due in 2032 and the holders of our junior subordinated debentures have rights that are senior to those of our common stockholders
5. 38Our ability to pay dividends is subject to certain limitations and restrictions, and there is no guarantee that we will be able to continue paying the same level of dividends in the future that we have paid in the past or that we will be able to pay future dividends at all