Business Description

Development of Business West Bancorporation, Inc. (the Company or West Bancorporation) is an Iowa corporation and a financial holding company registered under the Bank Holding Company Act of 1956, as amended (BHCA). The Company was formed in 1984 to own West Bank, an Iowa-chartered bank headquartered in West Des Moines, Iowa. West Bank is a business-focused community bank that was organized in 1893. The Company’s primary activity during 2017 was the ownership of West Bank. The Company’s and West Bank’s only business is banking, and therefore, no segment information is presented in this report. As a financial holding company, the Company has additional flexibility to engage in a broader range of financial activities through affiliates than are permissible for bank holding companies that are not financial holding companies. While the Company does not currently have a plan to engage in any new activities, as a financial holding company, it has the ability to respond more quickly to market developments and opportunities. The Company operates in three markets: central Iowa, which is generally the greater Des Moines metropolitan area; eastern Iowa, which is the area including and surrounding Iowa City and Coralville, Iowa; and the Rochester, Minnesota, area. The Company’s financial performance goal is to be in the top quartile of our benchmarking peer group, which at the end of 2017 consisted of 15 Midwestern, publicly traded financial institutions. The Company and West Bank achieved strong results in the fiscal year ended December 31, 2017 , as measured by the following four key metrics: l Return on average assets: 1.18 % l Return on average equity: 13.29 % l Efficiency ratio (1) : 45.39 % l Texas ratio: 0.32 % (1) As presented, this is a non-GAAP financial measure. See Part II, Item 7 - "Non-GAAP Financial Measures" for additional details. 5 Table of Contents Based on peer group analysis using data from the nine months ended September 30, 2017 , which is the latest available data, the Company’s results and ratios for the fiscal year 2017 were better than those of each member of our defined peer group for each of the measures shown above, except for one peer that had a higher return on average assets. The Company’s ratios for the year ended December 31, 2017, were affected by a one-time increase in federal income tax expense related to the enactment of tax reform legislation on December 22, 2017. The tax legislation reduces the federal corporate tax rate from a maximum rate of 35 percent to a flat rate of 21 percent effective January 1, 2018. Accounting guidance requires companies to revalue their deferred tax assets or liabilities using the enacted tax rates, thus causing the one-time decline in net deferred tax assets and increase in tax expense. Management expects peer results to be similarly affected by the legislation. We currently believe our fiscal year 2017 results will remain in the top quartile once comparable peer results are available. During 2017, the Company received a number of financial performance recognitions, including the following: • West Bancorporation received national recognition from investment bank and research firm Raymond James in the annual Raymond James Community Bankers Cup, which identifies America’s top performing publicly traded community banks with assets between $500 million and $10 billion. The Raymond James Community Bankers Cup recognizes the top exchange-traded community banks based on various profitability, operational efficiency, and balance sheet metrics. Raymond James ranked West Bancorporation number 4 in the nation for 2016. This is the fourth consecutive year we have made this list. • West Bancorporation was ranked number 6 among the publicly traded banks with assets between $1 billion and $5 billion in Bank Director Magazine’s 2017 Bank Performance Scorecard. The rankings were based on five measures related to profitability, capitalization and asset quality. This is the fifth consecutive year we have made this list. • American Banker Magazine , the publication of the American Bankers Association, rated community banks based on three-year average return on average equity. West Bancorporation came in at number 9 in the United States. All public financial institutions across the United States with assets of less than $2 billion were eligible for inclusion on this list.…