UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      D.C. 20549





**FORM
      10-Q**





(Mark
      One)





**x**
            **QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934**


For
      the
      quarterly period ended March 31, 2008





or





**o**
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934**


For
      the
      transition period from  to





Commission
      File Number 0-49677





WEST
      BANCORPORATION, INC.


(Exact
      name of registrant as specified in its charter)








IOWA
            
            42-1230603(State
                of Incorporation)
            
            (I.R.S.
                Employer Identification No.)





1601
      22 nd Street,
      West Des Moines, Iowa 50266





Telephone
      Number (515) 222-2300





Indicate
      by check mark whether the registrant (1) has filed all reports required by
      Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
      12 months (or for such shorter period that the registrant was required to file
      such reports), and (2) has been subject to such filing requirements for the
      past
      90 days.




Yes x
            No o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller reporting company.
      See
      the definitions of “large accelerated filer,” “accelerated filer” and “smaller
      reporting company” in Rule 12b-2 of the Exchange Act:





Large
                accelerated filer o
            Accelerated
                filer xNon-accelerated
                filer o
            Smaller
                reporting company o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).




Yes o
            No x





As
      of May
      8, 2008, there were 17,403,882 shares of common stock, no par value
      outstanding.





PART
      I – FINANCIAL INFORMATION


Item
      1.
      Financial Statements





West
      Bancorporation, Inc. and Subsidiaries


Consolidated
      Balance Sheets


(unaudited)





March 31,
            
            December 31,(in
                thousands, except per share data)
            
            2008
            
            2007AssetsCash
                and due from banks
            
            $
            50,357
            
            $
            49,529Federal
                funds sold and other short-term investments
            
            
            45,494
            
            
            414Cash
                and cash equivalents
            
            
            95,851
            
            
            49,943Securities
                available for sale
            
            
            158,516
            
            
            231,427Federal
                Home Loan Bank stock, at cost
            
            
            8,206
            
            
            5,951Total
                securities
            
            
            166,722
            
            
            237,378Loans
                held for sale
            
            
            1,597
            
            
            1,858Loans
            
            
            1,005,824
            
            
            983,565Allowance
                for loan losses
            
            
            (14,260
            )
            
            (8,935
            )Loans,
                net
            
            
            991,564
            
            
            974,630Premises
                and equipment, net
            
            
            4,978
            
            
            5,181Accrued
                interest receivable
            
            
            6,940
            
            
            7,829Goodwill
            
            
            24,930
            
            
            24,930Other
                intangible assets
            
            
            1,955
            
            
            2,131Bank-owned
                life insurance
            
            
            24,533
            
            
            24,341Other
                assets
            
            
            13,871
            
            
            11,747Total
                assets
            
            $
            1,332,941
            
            $
            1,339,968Liabilities
                and Stockholders' EquityLiabilitiesDeposits:Noninterest-bearing
                demand
            
            $
            204,690
            
            $
            196,698Interest-bearing
                demand
            
            
            80,537
            
            
            85,027Savings
            
            
            233,270
            
            
            243,405Time,
                in excess of $100,000
            
            
            209,650
            
            
            160,936Other
                time
            
            
            155,704
            
            
            224,859Total
                deposits
            
            
            883,851
            
            
            910,925Federal
                funds purchased and securities sold under agreements to
                repurchase
            
            
            141,664
            
            
            166,930Other
                short-term borrowings
            
            
            1,394
            
            
            2,672Accrued
                expenses and other liabilities
            
            
            13,323
            
            
            14,216Subordinated
                notes
            
            
            20,619
            
            
            20,619Long-term
                borrowings
            
            
            152,750
            
            
            103,000Total
                liabilities
            
            
            1,213,601
            
            
            1,218,362Stockholders'
                EquityCommon
                stock, no par value; authorized 50,000,000 shares; 17,403,882 and
                17,462,182 shares issued and outstanding at March 31, 2008 and December
                31, 2007, respectively
            
            
            3,000
            
            
            3,000Additional
                paid-in capital
            
            
            32,000
            
            
            32,000Retained
                earnings
            
            
            84,885
            
            
            87,084Accumulated
                other comprehensive (loss)
            
            
            (545
            )
            
            (478
            )Total
                stockholders' equity
            
            
            119,340
            
            
            121,606Total
                liabilities and stockholders' equity
            
            $
            1,332,941
            
            $
            1,339,968





See
      accompanying notes to consolidated financial statements.


2


West
      Bancorporation, Inc. and Subsidiaries


Consolidated
      Statements of Income


(unaudited)





Three Months Ended March 31,(in
                thousands, except per share data)
            
            2008
            
            2007Interest
                income:Loans,
                including fees
            
            $
            16,377
            
            $
            17,104Securities:Government
                agencies and corporations
            
            
            985
            
            
            1,496States
                and political subdivisions
            
            
            943
            
            
            970Other
            
            
            398
            
            
            389Federal
                funds sold and other short-term investments
            
            
            160
            
            
            289Total
                interest income
            
            
            18,863
            
            
            20,248Interest
                expense:Demand
                deposits
            
            
            290
            
            
            325Savings
                deposits
            
            
            1,493
            
            
            1,715Time
                deposits
            
            
            4,189
            
            
            5,532Federal
                funds purchased and securities sold under agreements to
                repurchase
            
            
            1,264
            
            
            1,675Other
                short-term borrowings
            
            
            29
            
            
            8Subordinated
                notes
            
            
            367
            
            
            363Long-term
                borrowings
            
            
            1,355
            
            
            1,319Total
                interest expense
            
            
            8,987
            
            
            10,937Net
                interest income
            
            
            9,876
            
            
            9,311Provision
                for loan losses
            
            
            5,600
            
            
            300Net
                interest income after provision for loan losses
            
            
            4,276
            
            
            9,011Noninterest
                income:Service
                charges on deposit accounts
            
            
            1,046
            
            
            1,128Trust
                services
            
            
            194
            
            
            181Investment
                advisory fees
            
            
            1,938
            
            
            1,959Increase
                in cash value of bank-owned life insurance
            
            
            192
            
            
            216Net
                realized gains from sales of securities available for sale
            
            
            5
            
            
            4Other
                income
            
            
            461
            
            
            382Total
                noninterest income
            
            
            3,836
            
            
            3,870Noninterest
                expense:Salaries
                and employee benefits
            
            
            3,731
            
            
            3,616Occupancy
            
            
            900
            
            
            934Data
                processing
            
            
            492
            
            
            467Other
                expenses
            
            
            1,546
            
            
            1,437Total
                noninterest expense
            
            
            6,669
            
            
            6,454Income
                before income taxes
            
            
            1,443
            
            
            6,427Income
                taxes
            
            
            69
            
            
            1,983Net
                income
            
            $
            1,374
            
            $
            4,444Earnings
                per share, basic
            
            $
            0.08
            
            $
            0.25Cash
                dividends per share
            
            $
            0.16
            
            $
            0.16





See
      accompanying notes to consolidated financial statements.


3





West
      Bancorporation, Inc. and Subsidiaries


Consolidated
      Statements of Stockholders' Equity


(unaudited)





Three Months Ended March 31,(in
                thousands, except per share data)
            
            2008
            
            2007Common
                stock:Beginning
                of year balance
            
            $
            3,000
            
            $
            3,000End
                of period balance
            
            
            3,000
            
            
            3,000Additional
                paid-in capital:Beginning
                of year balance
            
            
            32,000
            
            
            32,000End
                of period balance
            
            
            32,000
            
            
            32,000Retained
                earnings:Beginning
                of year balance
            
            
            87,084
            
            
            80,397Net
                income
            
            
            1,374
            
            
            4,444Dividends
                on common stock; per share amounts 2008 and 2007 - $0.160
            
            
            (2,785
            )
            
            (2,806
            )Shares
                reacquired under the common stock repurchase plan
            
            
            (788
            )
            
            -End
                of period balance
            
            
            84,885
            
            
            82,035Accumulated
                other comprehensive loss:Beginning
                of year balance
            
            
            (478
            )
            
            (1,585
            )Unrealized
                gains (losses) on securities, net of tax
            
            
            (67
            )
            
            443End
                of period balance
            
            
            (545
            )
            
            (1,142
            )Total
                stockholders' equity
            
            $
            119,340
            
            $
            115,893





West
      Bancorporation, Inc. and Subsidiaries


Consolidated
      Statements of Comprehensive Income


(unaudited)





Three Months Ended March 31,(in
                thousands)
            
            2008
            
            2007Net
                income
            
            $
            1,374
            
            $
            4,444Other
                comprehensive income (loss), unrealized gains (losses) on securities,
                net
                of reclassification adjustment, net of tax
            
            
            (67
            )
            
            443Comprehensive
                income
            
            $
            1,307
            
            $
            4,887





See
      accompanying notes to consolidated financial statements.


4


West
      Bancorporation, Inc. and Subsidiaries


Consolidated
      Statements of Cash Flows


(unaudited)





Three Months Ended March 31,(in
                thousands)
            
            2008
            
            2007Cash
                Flows from Operating Activities:Net
                income
            
            $
            1,374
            
            $
            4,444Adjustments
                to reconcile net income to net cash provided by operating
                activities:Provision
                for loan losses
            
            
            5,600
            
            
            300Net
                amortization and accretion
            
            
            193
            
            
            384Loss
                on disposition of fixed assets
            
            
            16
            
            
            2Net
                gains from sales of securities available for sale
            
            
            (5
            )
            
            (4
            )Net
                gains from sales of loans held for sale
            
            
            (85
            )
            
            (13
            )Proceeds
                from sales of loans held for sale
            
            
            7,081
            
            
            1,269Originations
                of loans held for sale
            
            
            (6,732
            )
            
            (1,371
            )Increase
                in value of bank-owned life insurance
            
            
            (192
            )
            
            (216
            )Depreciation
            
            
            227
            
            
            226Deferred
                income taxes
            
            
            (1,968
            )
            
            (85
            )Change
                in assets and liabilities:Decrease
                (increase) in accrued interest receivable
            
            
            889
            
            
            (1,089
            )Decrease
                in accrued expenses and other liabilities
            
            
            (893
            )
            
            (193
            )Net
                cash provided by operating activites
            
            
            5,505
            
            
            3,654Cash
                Flows from Investing Activities:Proceeds
                from sales, calls, and maturities of securities available for
                sale
            
            
            83,608
            
            
            4,551Purchases
                of securities available for sale
            
            
            (10,818
            )
            
            (1,142
            )Acquisition
                of Federal Home Loan Bank stock
            
            
            (3,854
            )
            
            (1,393
            )Proceeds
                from redemption of Federal Home Loan Bank stock
            
            
            1,599
            
            
            98Net
                change in loans
            
            
            (23,199
            )
            
            (42,258
            )Proceeds
                from sales of premises and equipment
            
            
            10
            
            
            -Purchases
                of premises and equipment
            
            
            (51
            )
            
            (106
            )Change
                in other assets
            
            
            549
            
            
            (592
            )Net
                cash provided by (used in) investing activities
            
            
            47,844
            
            
            (40,842
            )Cash
                Flows from Financing Activities:Net
                change in deposits
            
            
            (27,074
            )
            
            (1,320
            )Net
                change in federal funds purchased and securities sold under agreements
                to
                repurchase
            
            
            (25,266
            )
            
            34,543Net
                change in other short-term borrowings
            
            
            (1,278
            )
            
            (1,900
            )Proceeds
                from long-term borrowings
            
            
            50,000
            
            
            30,000Principal
                payments on long-term borrowings
            
            
            (250
            )
            
            (1,650
            )Payment
                for shares reacquired under common stock repurchase plan
            
            
            (788
            )
            
            -Cash
                dividends
            
            
            (2,785
            )
            
            (2,806
            )Net
                cash provided by (used in) financing activities
            
            
            (7,441
            )
            
            56,867Net
                increase in cash and cash equivalents
            
            
            45,908
            
            
            19,679Cash
                and Cash Equivalents:Beginning
            
            
            49,943
            
            
            35,678End
            
            $
            95,851
            
            $
            55,357Supplemental
                Disclosures of Cash Flow InformationCash
                payments for:Interest
            
            $
            9,318
            
            $
            10,570Income
                taxes
            
            
            -
            
            
            -





See
      accompanying notes to consolidated financial statements.


5





West
      Bancorporation, Inc.


Notes
      to
      Consolidated Financial Statements


(unaudited)


(in
      thousands, except per share information)





1.
      Basis
      of Presentation





The
      accompanying consolidated statements of income, stockholders’ equity,
      comprehensive income, and cash flows for the three months ended March 31, 2008
      and 2007, and the consolidated balance sheets as of March 31, 2008, and December
      31, 2007, include the accounts of the Holding Company, West Bank, West Bank’s
      wholly-owned subsidiary, WB Funding Corporation (which owns an interest in
      a
      partnership), and WB Capital Management Inc. All significant intercompany
      transactions and balances have been eliminated in consolidation. In accordance
      with Financial Accounting Standards Board (FASB) Interpretation No. 46, *Consolidation
      of Variable Interest Entities* ,
      a
      subsidiary, West Bancorporation Capital Trust I (the Trust) is not consolidated
      with the Company. The results of the Trust are recorded on the books of the
      Company using the equity method of accounting.





The
      accompanying consolidated financial statements have been prepared by the Company
      pursuant to the rules and regulations of the Securities and Exchange Commission.
      Certain information and footnote disclosures normally included in financial
      statements prepared in accordance with generally accepted accounting principles
      have been condensed or omitted pursuant to such rules and regulations. Although
      management believes that the disclosures are adequate to make the information
      presented not misleading, it is suggested that these interim consolidated
      financial statements be read in conjunction with the Company's most recent
      audited financial statements and notes thereto. In the opinion of management,
      the accompanying consolidated financial statements contain all adjustments
      (consisting of only normal recurring accruals) necessary to present fairly
      the
      financial position as of March 31, 2008, and the results of operations and
      cash
      flows for the three months ended March 31, 2008 and 2007.





The
      results for these interim periods may not be indicative of results for the
      entire year or for any other period.





2.
      Earnings per Common Share





Earnings
      per share represents income available to common shareholders divided by the
      weighted average number of common shares outstanding during the period. The
      Company has no common equivalent shares that could cause dilution. The weighted
      average number of shares outstanding for the three months ended March 31, 2008
      and 2007, were 17,409,064 and 17,536,682, respectively.





3.
      Commitments





In
      the
      normal course of business, the Company enters into commitments to extend credit
      such as loan commitments and standby letters of credit to meet the financing
      needs of its customers. These commitments expose the Company to varying degrees
      of credit and market risk and are subject to the same credit policies as are
      loans recorded on the balance sheet. For additional information on credit
      extension commitments and the characteristics of these obligations, see Note
      13
      of the Company’s 2007 consolidated financial statements (pages 53-55 of Appendix
      to Proxy Statement). The Company’s commitments as of the dates shown are
      approximately as follows:





March 31, 2008
            
            December 31, 2007Commitments
                to extend credit
            
            $
            358,602
            
            $
            330,769Standby
                letters of credit
            
            
            20,061
            
            
            22,682$
            378,663
            
            $
            353,451


6





4.
      Impaired Loans and Allowance for Loan Losses





A
      loan is
      impaired when it is probable West Bank will be unable to collect all
      contractual principal and interest payments due in accordance with the terms
      of
      the loan agreement. Impaired loans are measured based on the present value
      of
      expected future cash flows discounted at the loan’s effective interest rate or
      at the fair value of the collateral if the loan is collateral dependent. The
      amount of impairment, if any, and any subsequent changes are included in the
      allowance for loan losses. The following is a recap of impaired loans at March
      31, 2008 and December 31, 2007:





March 31, 2008
            
            December 31, 2007Impaired
                loans without an allowance
            
            $
            21,070
            
            $
            5,469Impaired
                loans with an allowance
            
            
            6,317
            
            
            -Total
                impaired loans
            
            $
            27,387
            
            $
            5,469Allowance
                for loan losses related to impaired loans
            
            $
            5,000
            
            $
            -





The
      following table reconciles the balance of non-accrual loans with impaired loans
      carried at fair value as of March 31, 2008:





Non-accrual
                loans
            
            $
            11,820Other
                impaired loans still accruing interest
            
            
            15,567Total
                impaired loans
            
            $
            27,387





Changes
      in the allowance for loan losses were as follows for the three months ended
      March 31, 2008 and 2007:





March 31,
                2008
            
            December 31, 2007Balance
                at beginning of period
            
            $
            8,935
            
            $
            8,494Charge-offs
            
            
            (381
            )
            
            (155
            )Recoveries
            
            
            106
            
            
            104Net
                charge-offs
            
            
            (275
            )
            
            (51
            )Provision
                charged to operations
            
            
            5,600
            
            
            300Balance
                at end of period
            
            $
            14,260
            
            $
            8,743





5.
      Segment Information





An
      operating segment is generally defined as a component of a business for which
      discrete financial information is available and whose operating results are
      regularly reviewed by the chief operating decision-maker. The Company’s primary
      business segments are banking and investment advisory services. The banking
      segment generates revenue primarily through interest and fees on loans, service
      charges on deposit accounts, interest on investment securities, and fees for
      trust services. The banking segment includes West Bank, the Holding Company,
      and
      related elimination entries between the two, as the Holding Company’s operation
      is similar to that of West Bank. The investment advisory segment generates
      revenue by providing investment portfolio management services to individuals,
      retirement plans, corporations, foundations, endowments, and public entities.
      The investment advisory segment consists of WB Capital Management Inc. The
      “Other” column represents the elimination of intercompany balances. Selected
      financial information on the Company’s segments is presented below for the three
      months ended March 31, 2008 and 2007.





7




Three
      months ended March 31, 2008:





SegmentsInvestmentBanking
            
            Advisory
            
            Other
            
            ConsolidatedInterest
                income
            
            $
            18,863
            
            $
            -
            
            $
            -
            
            $
            18,863Interest
                expense
            
            
            8,987
            
            
            -
            
            
            -
            
            
            8,987Net
                interest income
            
            
            9,876
            
            
            -
            
            
            -
            
            
            9,876Provision
                for loan losses
            
            
            5,600
            
            
            -
            
            
            -
            
            
            5,600Net
                interest income after provision for loan losses
            
            
            4,276
            
            
            -
            
            
            -
            
            
            4,276Noninterest
                income
            
            
            1,895
            
            
            1,989
            
            
            (48
            )
            
            3,836Noninterest
                expense
            
            
            4,961
            
            
            1,756
            
            
            (48
            )
            
            6,669Income
                before income taxes
            
            
            1,210
            
            
            233
            
            
            -
            
            
            1,443Income
                taxes
            
            
            (29
            )
            
            98
            
            
            -
            
            
            69Net
                income
            
            $
            1,239
            
            $
            135
            
            $
            -
            
            $
            1,374Depreciation
                and amortization
            
            $
            230
            
            $
            173
            
            $
            -
            
            $
            403Goodwill
            
            $
            13,376
            
            $
            11,554
            
            $
            -
            
            $
            24,930Total
                assets
            
            $
            1,319,255
            
            $
            14,373
            
            $
            (687
            )
            $
            1,332,941





Three
      months ended March 31, 2007:





SegmentsInvestmentBanking
            
            Advisory
            
            Other
            
            ConsolidatedInterest
                income
            
            $
            20,248
            
            $
            -
            
            $
            -
            
            $
            20,248Interest
                expense
            
            
            10,937
            
            
            -
            
            
            -
            
            
            10,937Net
                interest income
            
            
            9,311
            
            
            -
            
            
            -
            
            
            9,311Provision
                for loan losses
            
            
            300
            
            
            -
            
            
            -
            
            
            300Net
                interest income after provision for loan losses
            
            
            9,011
            
            
            -
            
            
            -
            
            
            9,011Noninterest
                income
            
            
            1,911
            
            
            2,013
            
            
            (54
            )
            
            3,870Noninterest
                expense
            
            
            4,546
            
            
            1,962
            
            
            (54
            )
            
            6,454Income
                before income taxes
            
            
            6,376
            
            
            51
            
            
            -
            
            
            6,427Income
                taxes
            
            
            1,961
            
            
            22
            
            
            -
            
            
            1,983Net
                income
            
            $
            4,415
            
            $
            29
            
            $
            -
            
            $
            4,444Depreciation
                and amortization
            
            $
            205
            
            $
            235
            
            $
            -
            
            $
            440Goodwill
            
            $
            13,376
            
            $
            11,554
            
            $
            -
            
            $
            24,930Total
                assets
            
            $
            1,315,364
            
            $
            15,420
            
            $
            (687
            )
            $
            1,330,097





6.
      Fair
      Value Measurements





Effective
      January 1, 2008, the Company partially adopted SFAS No. 157, *Fair
      Value Measurements* ,
      which
      requires disclosures for those assets and liabilities carried in the balance
      sheet on a fair value basis. The Financial Accounting Standard Board (FASB)
      has
      deferred the effective date of SFAS No. 157 until 2009 for nonfinancial assets
      and liabilities which are recognized at fair value on a nonrecurring basis.
      For
      the Company, this deferral applies to other real estate owned, goodwill and
      intangible assets.





Three
      categories of the Company’s balance sheet contain assets and liabilities that
      are recorded at fair value. Those categories are: 1) Securities available for
      sale, 2) Other assets and 3) Other liabilities. Within other assets and other
      liabilities, equity indexed certificate of deposit derivatives are recorded
      at
      fair value.


8





SFAS
      No.
      157 requires that assets and liabilities carried at fair value also be
      classified and disclosed according to the process for determining fair value.
      There are three levels of determining fair value.





Level
      1
      uses quoted market prices in active markets for identical assets or
      liabilities.





Level
      2
      uses observable market based inputs or unobservable inputs that are corroborated
      by market data.





Level
      3
      uses unobservable inputs that are not corroborated by market data.





The
      following table presents the balances of assets and liabilities measured at
      fair
      value on a recurring basis by level as of March 31, 2008:





Quoted Pricesin Active Markets
            
            Significant Other
            
            Significantfor Identical Assets
            
            Observable Inputs
            
            Unobservable InputsDescription
            
            Total
            
            (Level 1)
            
            (Level 2)
            
            (Level 3)Assets:Securities
                available for sale
            
            $
            158,516
            
            $
            -
            
            $
            158,516
            
            $
            -Equity
                indexed CD options
            
            
            4,734
            
            
            -
            
            
            -
            
            
            4,734Total
            
            $
            163,250
            
            $
            -
            
            $
            158,516
            
            $
            4,734Liabilities:Equity
                indexed CD options
            
            $
            4,734
            
            $
            -
            
            $
            -
            
            $
            4,734Total
            
            $
            4,734
            
            $
            -
            
            $
            -
            
            $
            4,734





Securities
      available for sale are valued by a third party vendor. This vendor has informed
      the Company that its evaluations are based on market data. The vendor utilizes
      evaluated pricing models that vary by asset class and incorporate available
      trade, bid and other market information and for structured securities, cash
      flow
      and, when available, loan performance data. Because many fixed income securities
      do not trade on a daily basis, the evaluated pricing applications apply
      available information as applicable through processes such as benchmark curves,
      benchmarking of like securities, sector groupings and matrix pricing, to prepare
      evaluations. In addition, model processes, such as the Option Adjusted Spread
      model, is used to assess interest rate impact and develop prepayment scenarios.
      The market inputs used for evaluations of securities include: benchmark yields,
      reported trades, broker/dealer quotes, issuer’s spreads, two-sided markets,
      benchmark securities, bids, offers and reference data. Market indicators and
      industry and economic events are also monitored. The inputs used for determining
      the fair value of securities available for sale are observable and therefore
      considered to be a Level 2 determination.





The
      valuations for the equity indexed CD options are obtained from a third party
      vendor who determines the value of the options using a Black Scholes model
      which
      incorporates index value, growth and volatility. The index value is the most
      significant input and is an observable market based input. The growth factor
      is
      the estimated value of the index over the remaining term and is an estimate
      based on various assumptions, of which, some would be non-observable . The
      volatility factor is based on past experience and projected expectations.
      Historical volatility would be observable; however, expected volatility would
      be
      based on unobservable assumptions. The overall determination of the fair value
      of the equity indexed CD options is considered to be a Level 3 determination
      because some of the inputs are unobservable. The asset and liability related
      to
      the equity indexed CD’s net to zero.


9





Certain
      assets are measured at fair value on a nonrecurring basis; that is, they are
      subject to fair value adjustments in certain circumstances (for example, when
      there is evidence of impairment). The following table presents the assets
      carried on the balance sheet by caption and by level with the SFAS No. 157
      valuation hierarchy as of March 31, 2008:





Quoted Pricesin Active Markets
            
            Significant Other
            
            Significantfor Identical Assets
            
            Observable Inputs
            
            Unobservable InputsDescription
            
            Total
            
            (Level 1)
            
            (Level 2)
            
            (Level 3)Assets:Loans
            
            $
            23,392
            
            $
            -
            
            $
            -
            
            $
            23,392Total
            
            $
            23,392
            
            $
            -
            
            $
            -
            
            $
            23,392





Loans
      consist of impaired held for investment loans. Impaired loans are valued by
      management based on collateral values underlying the loans. Management uses
      original appraised values and adjusts for trends observed in the
      market.





7.
      Current Accounting Developments





In
      March
      2008, the Financial Accounting Standards Board (FASB) issued SFAS No. 161, *Disclosures
      about Derivative Instruments and Hedging Activities* .
      SFAS
      No. 161 requires enhanced disclosures about how and why an entity uses
      derivative instruments; how derivative instruments are accounted for under
      SFAS
      No. 133 and its related interpretations; and how derivative instruments and
      related hedged items affect an entity’s financial position, results of
      operations, and cash flows. This Statement is effective for the Company
      beginning on January 1, 2009. Earlier application is permitted, but is not
      required. The Company does not expect the adoption of this Statement to have
      a
      material impact on its financial position or results of operations as the
      Company has limited derivative instrument activity.





8.
      Use of
      Estimates in the Preparation of Financial Statements





The
      consolidated financial statements have been prepared in conformity with
      generally accepted accounting principles. In preparing the financial statements,
      management is required to make estimates and assumptions that affect the
      reported amounts of assets and liabilities and disclosure of contingent assets
      and liabilities at the date of the financial statements and the reported amounts
      of revenue and expenses for the reporting period. Actual results could differ
      from those estimates. Material estimates that are particularly susceptible
      to
      significant change in the near term are the allowance for loan losses, fair
      value of financial instruments, and the goodwill impairment
      assessment.





9.
      Critical Accounting Policies





Management
      has identified its most critical accounting policy to be that related to the
      allowance for loan losses. The allowance for loan losses is established through
      a provision for loan losses charged to expense. Loans are charged against the
      allowance for loan losses when management believes that collectibility of the
      principal is unlikely. The Company has policies and procedures for evaluating
      the overall credit quality of its loan portfolio, including timely
      identification of potential problem loans. On a quarterly basis, management
      determines the appropriate level for the allowance for loan losses incorporating
      a variety of risk considerations, both quantitative and qualitative.
      Quantitative factors include the Company’s historical loss experience,
      delinquency and charge-off trends, collateral values, known information about
      individual loans, and other factors. Qualitative factors include the general
      economic environment in the Company’s market areas and the expected trend of
      those economic conditions. To the extent actual results differ from forecasts
      and management’s judgment, the allowance for loan losses may be greater or less
      than future charge-offs.


10




Item
      2.
      Management's Discussion and Analysis of Financial Condition and Results of
      Operations.





"SAFE
      HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
      ACT





The
      information contained in this report may contain forward-looking statements
      about the Company’s growth and acquisition strategies, new products and
      services, and future financial performance, including earnings and dividends
      per
      share, return on average assets, return on average equity, efficiency ratio,
      and
      capital ratio. Certain statements in this report constitute “forward-looking
      statements” within the meaning of the Private Securities Litigation Reform Act
      of 1995, including statements preceded by, followed by, or that include the
      words “believes,” “expects,” “should,” or “anticipates,” or references to
      estimates or similar expressions. Such forward-looking statements are based
      upon
      certain underlying assumptions, risks, and uncertainties. Because of the
      possibility of change in the underlying assumptions, actual results could differ
      materially from these forward-looking statements. Risks and uncertainties that
      may affect future results include: 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 or regulatory requirements;
      actions of bank and non-bank competitors; changes in local and national economic
      conditions; changes in regulatory requirements, including actions of the
      Securities and Exchange Commission and/or the Federal Reserve Board; and
      customers’ acceptance of the Company’s products and services. The Company
      undertakes no obligation to revise or update such forward-looking statements
      to
      reflect current events or circumstances after the date hereof or to reflect
      the
      occurrence of unanticipated events.





THREE
      MONTHS ENDED MARCH 31, 2008


(dollars
      in thousands, except per share amounts)





OVERVIEW





The
      following discussion describes the consolidated operations of the Company,
      including its wholly-owned subsidiaries, West Bank and WB Capital Management
      Inc. (“WB Capital”), and West Bank’s wholly-owned subsidiary, WB Funding
      Corporation. Consolidated results of operations for the three months ended
      March
      31, 2008, are compared to the results for the same period in 2007, and the
      consolidated financial condition of the Company at March 31, 2008, is compared
      to the December 31, 2007, position.





Net
      income for the three months ended March 31, 2008, was $1,374 compared to $4,444
      for the three months ended March 31, 2007. Earnings per share were $0.08 and
      $0.25, respectively, for the same time periods. The Company’s return on average
      equity and return on average assets for the first three months of 2008 were
      4.54
      percent and 0.42 percent, respectively, and 15.86 percent and 1.38 percent,
      respectively, for the first three months of 2007.





Net
      income for the three months ended March 31, 2008, declined sharply when compared
      to the previous year. The decline in net income is entirely attributable to
      an
      increase in the provision for loan losses. The provision for loan losses was
      increased by $5 million when a large real estate developer ceased operations.
      See the discussion under the heading “Provision for Loan Losses and Related
      Allowance for Loan Losses” later in this report.





Year-to-date
      noninterest income was slightly lower than in the first three months of 2007
      as
      an increase in revenue from the sale of residential mortgages into the secondary
      market was more than offset by a decline in overdraft fees.





Year-to-date
      noninterest expense was $215 higher than a year ago, primarily due to increases
      in salaries, marketing and training expenses, and professional
      fees.





While
      West Bank’s income declined from the prior year, WB Capital’s net income
      increased to $135 for the three months ended March 31, 2008, compared to $29
      reported for the same period in 2007. The main reason for the improvement was
      expense reductions. The Holding Company’s net loss increased due to higher
      professional and director fees.




11





RESULTS
      OF OPERATIONS





The
      following table shows selected financial results and measures for the three
      months ended March 31, 2008, compared with the same period in 2007.





Three
                months ended March 31,2008
            
            2007
            
            Change
            
            Change-%Net
                income
            
            $
            1,374
            
            $
            4,444
            
            $
            (3,070
            )
            
            -69.1
            %Average
                assets
            
            
            1,323,204
            
            
            1,304,283
            
            
            18,921
            
            
            1.5
            %Average
                stockholders' equity
            
            
            121,711
            
            
            113,670
            
            
            8,041
            
            
            7.1
            %Return
                on assets
            
            
            0.42
            %
            
            1.38
            %
            
            -0.96
            %Return
                on equity
            
            
            4.54
            %
            
            15.86
            %
            
            -11.32
            %Efficiency
                ratio
            
            
            47.10
            %
            
            47.53
            %
            
            -0.43
            %Dividend
                payout ratio
            
            
            202.70
            %
            
            63.14
            %
            
            139.56
            %Equity
                to assets ratio
            
            
            9.20
            %
            
            8.72
            %
            
            0.48
            %




Definition
      of ratios:





Return
      on
      assets – annualized net income divided by average assets.


Return
      on
      equity – annualized net income divided by average stockholders’
equity.


Efficiency
      ratio – noninterest expense divided by noninterest income (excluding
      securities gains) plus taxable equivalent net interest income.


Dividend
      payout ratio – dividends paid divided by net income.


Equity
      to
      assets ratio – average equity divided by average assets.




12





Net
      Interest Income





The
      following table shows average balances and related interest income or interest
      expense, with the resulting average yield or rate by category of
      interest-earning assets or interest-bearing liabilities. Interest income and
      the
      resulting net interest income are shown on a fully taxable basis.





Data
      for
      the three months ended March 31:




Average
                Balance
            
            Interest
                Income/Expense
            
            Yield/Rate2008
            
            2007
            
            Change
            
            Change-%
            
            2008
            
            2007
            
            Change
            
            Change-%
            
            2008
            
            2007
            
            ChangeInterest-earning
                assets:Loans:Commercial
            
            $
            360,277
            
            $
            337,851
            
            $
            22,426
            
            
            6.64
            %
            $
            5,873
            
            $
            6,640
            
            $
            (767
            )
            
            -11.55
            %
            
            6.56
            %
            
            7.97
            %
            
            -1.41
            %Real
                estate
            
            
            626,266
            
            
            574,846
            
            
            51,420
            
            
            8.95
            %
            
            10,378
            
            
            10,273
            
            
            105
            
            
            1.02
            %
            
            6.66
            %
            
            7.25
            %
            
            -0.59
            %Consumer
                and other
            
            
            13,689
            
            
            14,855
            
            
            (1,166
            )
            
            -7.85
            %
            
            236
            
            
            280
            
            
            (44
            )
            
            -15.71
            %
            
            6.93
            %
            
            7.64
            %
            
            -0.71
            %Total
                Loans
            
            
            1,000,232
            
            
            927,552
            
            
            72,680
            
            
            7.84
            %
            
            16,487
            
            
            17,193
            
            
            (706
            )
            
            -4.11
            %
            
            6.63
            %
            
            7.52
            %
            
            -0.89
            %Investment
                securities:Taxable
            
            
            119,628
            
            
            170,281
            
            
            (50,653
            )
            
            -29.75
            %
            
            1,477
            
            
            1,981
            
            
            (504
            )
            
            -25.44
            %
            
            4.94
            %
            
            4.65
            %
            
            0.29
            %Tax-exempt
            
            
            85,796
            
            
            90,937
            
            
            (5,141
            )
            
            -5.65
            %
            
            1,193
            
            
            1,189
            
            
            4
            
            
            0.34
            %
            
            5.56
            %
            
            5.23
            %
            
            0.33
            %Total
                investment securities
            
            
            205,424
            
            
            261,218
            
            
            (55,794
            )
            
            -21.36
            %
            
            2,670
            
            
            3,170
            
            
            (500
            )
            
            -15.77
            %
            
            5.20
            %
            
            4.85
            %
            
            0.35
            %Federal
                funds sold and short-term investments
            
            
            23,241
            
            
            22,417
            
            
            824
            
            
            3.68
            %
            
            160
            
            
            289
            
            
            (129
            )
            
            -44.64
            %
            
            2.77
            %
            
            5.22
            %
            
            -2.45
            %Total
                interest-earning assets
            
            $
            1,228,897
            
            $
            1,211,187
            
            $
            17,710
            
            
            1.46
            %
            $
            19,317
            
            $
            20,652
            
            $
            (1,335
            )
            
            -6.46
            %
            
            6.32
            %
            
            6.90
            %
            
            -0.58
            %Interest-bearing
                liabilities:Deposits:Checking
                with interest, savings and money markets
            
            $
            327,263
            
            $
            289,054
            
            $
            38,209
            
            
            13.22
            %
            $
            1,783
            
            $
            2,040
            
            $
            (257
            )
            
            -12.60
            %
            
            2.19
            %
            
            2.86
            %
            
            -0.67
            %Time
                deposits
            
            
            376,862
            
            
            441,281
            
            
            (64,419
            )
            
            -14.60
            %
            
            4,189
            
            
            5,532
            
            
            (1,343
            )
            
            -24.28
            %
            
            4.47
            %
            
            5.08
            %
            
            -0.61
            %Total
                deposits
            
            
            704,125
            
            
            730,335
            
            
            (26,210
            )
            
            -3.59
            %
            
            5,972
            
            
            7,572
            
            
            (1,600
            )
            
            -21.13
            %
            
            3.41
            %
            
            4.20
            %
            
            -0.79
            %Other
                borrowed funds
            
            
            306,382
            
            
            267,561
            
            
            38,821
            
            
            14.51
            %
            
            3,015
            
            
            3,365
            
            
            (350
            )
            
            -10.40
            %
            
            3.96
            %
            
            5.10
            %
            
            -1.14
            %Total
                interest-bearing liabilities
            
            $
            1,010,507
            
            $
            997,896
            
            $
            12,611
            
            
            1.26
            %
            
            8,987
            
            
            10,937
            
            
            (1,950
            )
            
            -17.83
            %
            
            3.58
            %
            
            4.44
            %
            
            -0.86
            %Tax-equivalent
                net interest income
            
            
            
            
            
            
            
            
            
            
            
            
            
            $
            10,330
            
            $
            9,715
            
            $
            615
            
            
            6.33
            %Net
                interest spread
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            2.74
            %
            
            2.46
            %
            
            0.28
            %Net
                interest margin
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            3.38
            %
            
            3.24
            %
            
            0.14
            %





Fluctuations
      in net interest income can result from the combination of changes in the
      balances of asset and liability categories and changes in interest rates. Net
      interest margin is a measure of the net return on interest-earning assets and
      is
      computed by dividing annualized tax-equivalent net interest income by the
      average of total interest-earning assets for the period. The net interest margin
      for the first quarter of 2008 increased to 3.38 percent, which was 14 basis
      points higher than the same quarter last year. The Company’s tax-equivalent net
      interest income for the three months ended March 31, 2008, increased $615
      compared to the three months ended March 31, 2007.





Taxable-equivalent
      interest income and fees on loans declined $706 in the first quarter of 2008
      compared to the same period in 2007, despite the $72.7 million growth in the
      average balance of loans. The average yield on loans declined to 6.63 percent
      for the first quarter of 2008, from 7.52 percent in the first quarter of 2007
      as
      a result of declining market interest rates which began to occur in September
      2007 and continued through March 2008. The yield on the Company's loan portfolio
      is affected by the mix of the portfolio, the effects of competition, the
      interest rate environment, and the amount of non-accrual loans. The interest
      rate environment can influence the volume of new loan originations and the
      mix
      of variable rate versus fixed-rate loans. Loan pricing in the Company’s market
      areas remains very competitive.





The
      average balance of investment securities was $55.8 million lower than last
      year,
      while the yield has increased 35 basis points. Bonds were called during the
      first three months of 2008 due to the lower interest rate environment. The
      yield
      of the portfolio increased temporarily due to recognizing unamortized discounts
      on the called bonds. There have been minimal purchases of investment securities
      during the first quarter of 2008 as the proceeds of called bonds were used
      to
      pay down wholesale deposits and retained in federal funds sold.


13


The
      average rate paid on deposits declined to 3.41 percent from 4.20 percent for
      the
      first quarter of last year. This reduction is primarily the result of a
      significant decline in market interest rates on interest-bearing checking,
      money
      market savings, and certificates of deposits. The average balance of time
      deposits declined in the first three months of 2008, as the Company has not
      been
      renewing maturing wholesale certificates of deposit as the cost of those
      deposits has been higher than the cost of Federal Home Loan Bank (FHLB)
      advances.





The
      average rate paid on other borrowings fell 114 basis points compared to the
      first quarter of 2007. The average balance of borrowings for the first quarter
      of 2008 was $38.8 million higher than a year ago. Overnight borrowings in the
      form of federal funds purchased from correspondent banks and securities sold
      under agreements to repurchase averaged $16.2 million more than in the first
      quarter of last year. The average rate paid on those additional borrowings
      declined 168 basis points compared to the first quarter of 2007. Average
      long-term borrowings increased $20.1 million, while the rates paid on those
      additional borrowings declined 65 basis points compared to 2007.





Provision
      for Loan Losses and the Related Allowance for Loan Losses





The
      following table sets forth the activity in the allowance for loan losses for
      the
      three months ended March 31, 2008 and 2007, as well as common ratios related
      to
      the allowance for loan losses.





Three
                months ended March 31,2008
            
            2007
            
            ChangeBalance
                at beginning of period
            
            $
            8,935
            
            $
            8,494
            
            $
            441Charge-offs
            
            
            (381
            )
            
            (155
            )
            
            (226
            )Recoveries
            
            
            106
            
            
            104
            
            
            2Net
                charge-offs
            
            
            (275
            )
            
            (51
            )
            
            (224
            )Provision
                charged to operations
            
            
            5,600
            
            
            300
            
            
            5,300Balance
                at end of period
            
            $
            14,260
            
            $
            8,743
            
            $
            5,517Average
                loans outstanding
            
            $
            1,000,232
            
            $
            927,552Ratio
                of net charge-offs during the period to average loans
                outstanding
            
            
            0.03
            %
            
            0.01
            %Ratio
                of allowance for loan losses to average loans outstanding
            
            
            1.43
            %
            
            0.94
            %




The
      provision for loan losses represents charges made to earnings to maintain an
      adequate allowance for loan losses. The allowance for loan losses is
      management’s best estimate of probable losses inherent in the loan portfolio as
      of the balance sheet date. Factors considered in establishing an appropriate
      allowance include: an assessment of the financial condition of the borrower;
      a
      realistic determination of value and adequacy of underlying collateral; the
      condition of the local economy and the condition of the specific industry of
      the
      borrower; an analysis of the levels and trends of loan categories; and a review
      of delinquent and classified loans.





The
      provision for loan losses was increased significantly compared to a year ago.
      $5
      million of the increase was due to an announcement on April 25, 2008, that
      Iowa’s largest homebuilder and developer laid off its entire staff and suspended
      business. West Bank does not have any loans to the developer. However, West
      Bank
      does have approximately $22 million in loans to closely related entities and
      individuals. Approximately $18 million of the loans are secured by first real
      estate mortgages, limited guarantees from parties related to the developer,
      and
      limited guarantees from parties not related to the developer. Approximately
      $4
      million of the loans are unsecured. The loans are not in default, and West
      Bank
      is working on arrangements to obtain further security. Nevertheless, as a result
      of the developer’s decision to cease operations, West Bank increased the
      allowance for loan losses by $5 million as of March 31, 2008. While West Bank
      is
      working to obtain collateral for these loans, until that happens, the fact
      the
      developer has ceased operations limits the owner’s ability to repay the $4
      million in unsecured loans. In addition, it was determined that current
      estimated collateral values are not sufficient to cover the full amount owed
      on
      the secured loans. An additional $1 million was added to the provision for
      this
      estimated shortfall.


14




Net
      charge-offs during the first three months of 2008 were $224 higher than in
      the
      same period in 2007. The majority of the charge-offs were commercial loans,
      including two loans that accounted for $283 of the first quarter 2008
      charge-offs. The net charge-off ratio for the three months ended March 31,
      2008,
      was 0.03 percent compared to 0.01 percent for the three months ended March
      31,
      2007. Significant efforts continue to be made to maximize
      recoveries.





The
      allowance for loan losses represented 113.0 percent of non-accrual loans and
      loans past due more than 90 days at March 31, 2008, compared to 152.0 percent
      at
      December 31, 2007. The ratio has declined due to the increase in both
      non-accrual loans and loans past due 90 days and still accruing
      interest.





The
      adequacy of the allowance for loan losses is evaluated quarterly by management
      and reviewed by the Bank’s Board of Directors. This evaluation focuses on
      specific loan reviews, changes in the type and volume of the loan portfolio
      given the current and forecasted economic conditions, and historical loss
      experience. Any one of the following conditions may result in the review of
      a
      specific loan: concern about whether the customer’s cash flow or net worth is
      sufficient to repay the loan; delinquency status; criticism of the loan in
      a
      regulatory examination; the suspension of interest accrual; or other reasons,
      including whether the loan has other special or unusual characteristics that
      suggest special monitoring is warranted.





While
      management uses available information to recognize potential losses on loans,
      further reduction in the carrying amounts of loans may be necessary based on
      changes in circumstances, past assumptions, or knowledge about the loans. The
      general economy is slowing. Based upon increasing numbers of foreclosures and
      slower sales of one-to-four-family residences, it is generally agreed that
      the
      real estate market is in a slowdown. The Federal Reserve reduced the targeted
      federal funds rate and the discount rate by 300 basis points between September
      of 2007 and March of 2008, indicating its concern about the slowing economy.
      It
      is uncertain when this slowdown will turn around and what ripple effect it
      could
      have on other parts of the economy. The duration and magnitude of any near-term
      economic difficulties are not now known. In addition, regulatory agencies,
      as an
      integral part of their examination process, periodically review the estimated
      losses on loans. Such agencies may require the Company to recognize additional
      losses based on their judgment about information available to them at the time
      of their examinations.





Noninterest
      Income





The
      following table shows the variance from the prior year in the noninterest income
      categories shown in the Consolidated Statements of Income. In addition, accounts
      within the “Other income” category that represent significant variances are
      shown.





Three
                months ended March 31,Noninterest
                income
            
            
            2008
            
            
            2007
            
            
            Change
            
            
            Change-%Service
                charges on deposit accounts
            
            $
            1,046
            
            $
            1,128
            
            $
            (82
            )
            
            -7.3
            %Trust
                services
            
            
            194
            
            
            181
            
            
            13
            
            
            7.2
            %Investment
                advisory fees
            
            
            1,938
            
            
            1,959
            
            
            (21
            )
            
            -1.1
            %Increase
                in cash value of bank-owned life insurance
            
            
            192
            
            
            216
            
            
            (24
            )
            
            -11.1
            %Net
                realized gains from sales of securities
            
            
            5
            
            
            4
            
            
            1
            
            
            -25.0
            %Other
                income:Debit
                card usage fees
            
            
            95
            
            
            82
            
            
            13
            
            
            15.9
            %Check
                printing fees
            
            
            33
            
            
            36
            
            
            (3
            )
            
            -8.3
            %VISA/MasterCard
                income
            
            
            39
            
            
            54
            
            
            (15
            )
            
            -27.8
            %Gain
                on sale of residential mortgages
            
            
            85
            
            
            13
            
            
            72
            
            
            553.8
            %All
                other
            
            
            209
            
            
            197
            
            
            12
            
            
            6.1
            %Total
                other
            
            
            461
            
            
            382
            
            
            79
            
            
            20.7
            %Total
                noninterest income
            
            $
            3,836
            
            $
            3,870
            
            $
            (34
            )
            
            -0.9
            %




15





Return
      check charges have declined in the first quarter of 2008 compared to the same
      quarter last year, as some customers have modified their check writing habits
      resulting in fewer checks presented against non-sufficient funds.





Investment
      advisory fees are fees earned by WB Capital. The slight decline in 2008 fees
      compared to 2007 was the result of lower fees from the Vintage mutual funds
      due
      to lower asset levels in the funds.





Increases
      in the cash value of life insurance have declined from the prior year due to
      lower market interest rates and the transfer of funds between insurance carriers
      in connection with a 1035 exchange. During the transfer process, there are
      periods of time where the cash value of the insurance policies is not
      increasing.





Debit
      card usage fees continued to improve as a result of higher utilization of this
      convenient payment method. In April 2008, West Bank began offering a new product
      that is expected to add to this revenue source. Meanwhile, check printing income
      continued to decline as customers increase the use of all forms of electronic
      payments, thus reducing the frequency of ordering checks. VISA/MasterCard income
      declined as a result of lower transaction volumes in the first three months
      of
      2008 compared to the same time period in 2007.





The
      volume of originations of residential mortgages sold into the secondary market
      has increased significantly compared to 2007. An experienced staff member was
      hired in May 2007, and is devoted to this line of business on a full-time basis.
      Two additional loan originators have been hired in 2008, which should continue
      to enhance the growth of this line of business. The average income per
      residential loan sold increased approximately 14 basis points in the first
      three
      months of 2008 compared to the first three months of 2007.





Noninterest
      Expense





The
      following table shows the variance from the prior year in the noninterest
      expense categories shown in the Consolidated Statements of Income. In addition,
      accounts within the “Other expenses” category that represent significant
      variances are shown.





Three
                months ended March 31,Noninterest
                expense:
            
            
            2008
            
            
            2007
            
            
            Change
            
            
            Change-%Salaries
                and employee benefits
            
            $
            3,731
            
            $
            3,616
            
            $
            115
            
            
            3.2
            %Occupancy
            
            
            900
            
            
            934
            
            
            (34
            )
            
            -3.6
            %Data
                processing
            
            
            492
            
            
            467
            
            
            25
            
            
            5.4
            %Other
                expenses:Insurance
            
            
            63
            
            
            73
            
            
            (10
            )
            
            -13.7
            %Training
            
            
            55
            
            
            25
            
            
            30
            
            
            120.0
            %Marketing
            
            
            187
            
            
            104
            
            
            83
            
            
            79.8
            %Professional
                fees
            
            
            244
            
            
            205
            
            
            39
            
            
            19.0
            %Director
                fees
            
            
            66
            
            
            43
            
            
            23
            
            
            53.5
            %Other
                real estate owned expense
            
            
            (14
            )
            
            19
            
            
            (33
            )
            
            -173.7
            %Intangible
                amortization
            
            
            177
            
            
            214
            
            
            (37
            )
            
            -17.3
            %All
                other
            
            
            768
            
            
            754
            
            
            14
            
            
            1.9
            %Total
                other
            
            
            1,546
            
            
            1,437
            
            
            109
            
            
            7.6
            %Total
                noninterest expense
            
            $
            6,669
            
            $
            6,454
            
            $
            215
            
            
            3.3
            %




The
      increase in salaries and benefits resulted from personnel additions and annual
      merit increases.





Occupancy
      expenses declined in the three months ended March 31, 2008, due to closing
      one
      lower traffic office in the Des Moines metropolitan area in the second quarter
      of 2007 and lower equipment depreciation. The Company continues to market excess
      space available in the facility in which WB Capital is located in West Des
      Moines. A portion of the space has been leased with rental payments scheduled
      to
      begin in April 2008. A site for a new office in the Des Moines metropolitan
      area
      has been identified and a lease is under negotiation.





Training
      expense has increased because of beginning an extensive sales training program
      for consumer branch bankers, commercial bankers, and the investment advisory
      sales force. Marketing expenses are up as a result of a retail sales campaign
      and a new product offering.


16





Professional
      fees increased as external audit and tax compliance related fees continue to
      rise and legal fees associated with corporate governance and loan portfolio
      issues also rose. Director fees increased in 2008 as the result of an April
      2007
      increase in quarterly retainer and meeting fees.





The
      sale
      of one other real estate owned property in the first three months of 2008
      resulted in a gain, which offset the operating expenses of other properties
      currently held by West Bank.





Noninterest
      expense for the last nine months of 2008 is expected to increase approximately
      $350 as a result of the re-establishment of the FDIC assessment. In 2007, a
      one-time assessment credit was allocated to all eligible financial institutions.
      West Bank’s credit was almost fully utilized by March 31, 2008.





Income
      Tax Expense





The
      Company incurred income tax expense of $69 for the three months ended March
      31,
      2008, compared with $1,983 for the three months ended March 31, 2007. The
      effective income tax rate as a percent of income before taxes for the three
      months ended March 31, 2008 and 2007, was 4.8 percent and 30.9 percent,
      respectively. The reduction in the effective rate is due to the sharp decline
      in
      income before income taxes in the first three months of 2008 combined with
      the
      effect of tax-exempt interest income. In the second half of 2007, West Bank
      invested in a qualified community development entity, which qualified West
      Bank
      for a Federal new market tax credit. The credit totaling $2,730 reduces income
      tax expense over a seven-year period.




FINANCIAL
      CONDITION





Total
      assets approximated $1.33 billion as of March 31, 2008 and December 31, 2007.
      Certain components of total assets have changed significantly and are described
      in the following paragraphs.





Investment
      Securities





Investment
      securities available for sale declined approximately $73 million from December
      31, 2007 to $158.5 million at March 31, 2008. The decline was primarily the
      result of bonds being called due to the lower interest rate
      environment.





The
      credit markets are in considerable stress, due to the sub-prime turmoil and
      related negative developments. Investors seem to be hesitant to invest in any
      credit product except Treasuries and agencies until more stability returns
      to
      the market, thus contributing to pricing fluctuations. In many cases, bond
      prices may be the result of distressed selling rather than normal market
      transactions. Management believes some price fluctuations have more to do with
      the environment surrounding the credit markets than the inability to receive
      full principal payments.





On
      a
      quarterly basis, the investment securities portfolio is reviewed for
      other-than-temporary impairment. As of March 31, 2008, existing unrealized
      losses are considered to be temporary in nature due to market interest rate
      fluctuations, not in estimated cash flows, and the Company has the ability
      and
      the intent to hold securities with unrealized losses for a period of time
      sufficient to allow for a recovery, which may be at maturity. Therefore, no
      other than temporary impairment adjustment has been recorded as of March 31,
      2008 .





Loans
      and
      Non-performing Assets





Loans
      outstanding increased approximately $22 million from December 31, 2007, to
      March
      31, 2008. The increase was primarily attributable to growth in commercial real
      estate ($16.6 million) and one-to-four-family real estate construction loans
      ($14.0 million). Offsetting these increases was a decline of approximately
      $8.0
      million in commercial loans. West Bank has new loans in process that should
      result in similar loan growth in the second quarter of 2008.


17





The
      following table sets forth the amount of non-performing loans and assets carried
      by the Company and common ratio measurements of those items.





March
                31,
              2008
            
            December
                31, 2007
            
            ChangeNon-accrual
                loans
            
            $
            11,820
            
            $
            5,469
            
            $
            6,351Loans
                past due 90 days and still accruing interest
            
            
            796
            
            
            408
            
            
            388Total
                non-performing loans
            
            
            12,616
            
            
            5,877
            
            
            6,739Other
                real estate owned
            
            
            780
            
            
            155
            
            
            625Total
                non-performing assets
            
            $
            13,396
            
            $
            6,032
            
            $
            7,364Non-performing
                loans to total loans
            
            
            1.25
            %
            
            0.60
            %
            
            0.65
            %Non-performing
                assets to total loans
            
            
            1.33
            %
            
            0.61
            %
            
            0.72
            %Non-performing
                assets to total assets
            
            
            1.00
            %
            
            0.45
            %
            
            0.55
            %




Total
      non-performing assets have increased 122 percent since the end of 2007. The
      non-accrual category increased by $6,351 during the first quarter. Virtually
      all
      of the increase relates to loans to entities controlled by owners of the
      developer that ceased operation on April 25, 2008, that was discussed earlier
      in
      this report. Other real estate owned increased by $625 as the result of the
      foreclosure on a townhouse construction project. The project is approximately
      80
      percent complete and at this time management does not believe a loss will be
      incurred. Loans past due 90 days and still accruing interest increased by $388
      to $796. Most of this increase was in the construction loan category and
      management believes the loans are sufficiently collateralized to receive all
      principal and interest.





Reference
      is also made to the information and discussion earlier in this report under
      the
      heading “Provision for Loan Losses and the Related Allowance for Loan Losses”
and footnote number 4.





Deposits





Total
      deposits were approximately $884 million as of March 31, 2008, a decline of
      3.0
      percent compared to December 31, 2007, balances. The reduction in deposits
      was
      attributable to the maturity of wholesale deposits as the cost of those deposits
      was higher than the cost of FHLB advances. In order to boost and retain core
      deposits, the Company began an extensive sales campaign on April 7, 2008, for
      a
      new product called “Reward Me Checking.” The new product pays a certificate of
      deposit-like interest rate if the customer performs a certain number of
      electronic banking transactions and agrees to receive his or her monthly
      statements electronically. In addition, West Bank is the banking partner for
      a
      new savings program called SmartyPig. SmartyPig is an innovative, internet-based
      savings and rewards program developed by SmartyPig, LLC. In return for assisting
      with the development efforts, West Bank acquired a 20 percent ownership interest
      in SmartyPig, LLC in 2007.





Borrowings





The
      balance of federal funds purchased and securities sold under agreement to
      repurchase was $141.7 million at March 31, 2008, down from $166.9 million at
      December 31, 2007. The reduction was primarily in federal funds purchased,
      which
      includes federal funds purchased from regional and national correspondent banks
      as necessary for short-term liquidity needs and funds sold to West Bank by
      approximately 25 banks throughout Iowa as part of correspondent bank services
      provided by West Bank. The balance of federal funds purchased from correspondent
      banks throughout Iowa will fluctuate depending upon the loan demand and
      investment strategy of those banks. The balance of other short-term borrowings
      consisted of Treasury, Tax, and Loan option notes. Long-term borrowings
      increased $49.8 million compared to December 31, 2007. The increase consisted
      of
      a $25 million, 10-year advance with an interest rate of 2.70 percent that is
      callable after three years, and a $25 million, 5-year advance with an interest
      rate of 1.91 percent that is callable after three months. The advances were
      used
      to fund loan growth and are being used as a lower cost alternative to wholesale
      deposits.


18





Liquidity
      and Capital Resources





The
      objective of liquidity management is to ensure the availability of sufficient
      cash flows to meet all corporate financial commitments and to capitalize on
      opportunities for profitable business expansion. The Company’s principal source
      of funds is deposits, which include demand, money market, savings, and
      certificates of deposit. Other sources include principal repayments on loans,
      proceeds from the maturity and sale of investment securities, federal funds
      purchased, repurchase agreements, advances from the FHLB, and funds provided
      by
      operations. Liquidity management is conducted on both a daily and a long-term
      basis. Investments in liquid assets are adjusted based on expected loan demand,
      projected loan maturities and payments, expected deposit flows, and the
      objectives set by the Company’s asset-liability management policy. The Company
      had liquid assets (cash and cash equivalents) of $95,851 as of March 31, 2008,
      compared with $49,943 as of December 31, 2007. West Bank had additional
      borrowing capacity available from the FHLB of approximately $18.0 million at
      March 31, 2008, and the Company has a $5.0 million unsecured line of credit
      through a large regional correspondent bank. In addition, West Bank has $110
      million in borrowing capacity available through unsecured federal funds lines
      of
      credit with correspondent banks. West Bank was not utilizing any of those lines
      of credit at March 31, 2008. The combination of high levels of potentially
      liquid assets, cash flows from operations, and additional borrowing capacity
      provided strong liquidity for the Company at March 31, 2008.





The
      Company’s total stockholders’ equity declined to $119.3 million at March 31,
      2008, from $121.6 million at December 31, 2007. Total equity declined as
      dividend payments exceeded earnings in the first three months of 2008. Total
      shareholders' equity was 9.00 and 9.08 percent of total assets as of March
      31,
      2008, and December 31, 2007, respectively. No material capital expenditures
      or
      material changes in the capital resource mix are anticipated at this
      time.





Quantitative
      measures established by regulation to ensure capital adequacy require the
      Company and West Bank to maintain minimum amounts and ratios (set forth in
      the
      following table) of total and Tier 1 capital to risk-weighted assets and of
      Tier
      1 capital to average assets. Management believes the capital levels of the
      Company and West Bank met all capital adequacy requirements to which they were
      subject at March 31, 2008.





Regulatoryrequirements
                to be:
            
            Actual
                RegulatoryAdequately
            
            Well-
            
            Capital
                Ratios as of:Capitalized
            
            Capitalized
            
            March 31, 2008
            
            December 31, 2007Total
                risk-based capital as % of risk-weighted assets:Consolidated
            
            
            8.0
            %
            
            n/a
            
            
            11.3
            %
            
            11.1
            %West
                Bank
            
            
            8.0
            %
            
            10.0
            %
            
            11.0
            %
            
            10.8
            %Tier
                1 capital as % of risk-weighted assets:Consolidated
            
            
            4.0
            %
            
            n/a
            
            
            10.1
            %
            
            10.3
            %West
                Bank
            
            
            4.0
            %
            
            6.0
            %
            
            8.9
            %
            
            9.1
            %Tier
                1 capital as % average assetsConsolidated
            
            
            4.0
            %
            
            n/a
            
            
            8.7
            %
            
            8.9
            %West
                Bank
            
            
            4.0
            %
            
            5.0
            %
            
            7.7
            %
            
            7.9
            %




On
      April
      16, 2008, the Company’s Board of Directors authorized $5 million to be used
      during the following 12 months for the buy-back of Company common stock. During
      the three months ended March 31, 2008, 58,300 shares of its common stock were
      repurchased at an average price of $13.53 per share under the previous
      authorization.


19





Market
      Risk Management





Market
      risk is the risk of earnings volatility that results from adverse changes in
      interest rates and market prices. The Company's market risk is primarily
      interest rate risk arising from its core banking activities of lending and
      deposit taking. Interest rate risk is the risk that changes in market interest
      rates may adversely affect the Company's net interest income. Management
      continually develops and implements strategies to mitigate this risk. The
      analysis of the Company’s interest rate risk was presented in the Form 10-K
      filed with the Securities and Exchange Commission on March 7, 2008, and is
      incorporated herein by reference. The Company has not experienced any material
      changes to its market risk position since December 31, 2007. Management does
      not
      believe the Company's primary market risk exposures and how those exposures
      were
      managed in the first three months of 2008 changed when compared to
      2007.





Effects
      of New Statements of Financial Accounting Standards





Effective
      January 1, 2008, the Company partially adopted SFAS No. 157, *Fair
      Value Measurements* ,
      which
      requires disclosures for those assets and liabilities carried in the balance
      sheet on a fair value basis. The Financial Accounting Standard Board (FASB)
      has
      deferred the effective date of SFAS No. 157 until 2009 for nonfinancial assets
      and liabilities which are recognized at fair value on a nonrecurring basis.
      For
      the Company, this deferral applies to other real estate owned, goodwill and
      intangible assets. The Company does not expect the final adoption of this
      Statement to have a material impact on its financial position or results of
      operations as the Company has limited derivative instrument
      activity.





In
      March
      2008, the Financial Accounting Standards Board (FASB) issued SFAS No. 161, *Disclosures
      about Derivative Instruments and Hedging Activities* .
      SFAS
      No. 161 requires enhanced disclosures about how and why an entity uses
      derivative instruments; how derivative instruments are accounted for under
      SFAS
      No. 133 and its related interpretations; and how derivative instruments and
      related hedged items affect an entity’s financial position, results of
      operations, and cash flows. This Statement is effective for the Company
      beginning on January 1, 2009. Earlier application is permitted, but is not
      required. The Company does not expect the adoption of this Statement to have
      a
      material impact on its financial position or results of operations as the
      Company has limited derivative instrument activity.





Item
      3.
      Quantitative and Qualitative Disclosures about Market Risk





The
      information appearing above under the heading “Market Risk Management” is
      incorporated herein by reference.





Item
      4.
      Controls and Procedures





a.
      Evaluation of disclosure controls and procedures. As of the end of the period
      covered by this report, an evaluation of the effectiveness of the Company’s
      disclosure controls and procedures (as defined in Exchange Act Rule
      240.13a-15(f)) was performed under the supervision and with the participation
      of
      the Company’s Chief Executive Officer and Chief Financial Officer. Based on that
      evaluation, the Chief Executive Officer and the Chief Financial Officer have
      concluded that the Company’s current disclosure controls and procedures are
      effective to ensure that information required to be disclosed by the Company
      in
      the reports that it files or submits under the Exchange Act is recorded,
      processed, summarized, and reported within the time periods specified in the
      Securities and Exchange Commission’s rules and forms.





b.
      Changes in internal controls over financial reporting. There were no changes
      in
      the Company's internal control over financial reporting that occurred during
      the
      period covered by this report that have materially affected, or are reasonably
      likely to materially affect, the Company’s internal control over financial
      reporting.


20





Part
      II – OTHER INFORMATION





Item
      1.
      Legal Proceedings





The
      Company and its subsidiaries are not parties to any material pending legal
      proceedings (other than ordinary litigation incidental to the entities’
businesses) and no property of these entities is the subject of any such
      proceeding. The Company does not know of any proceeding contemplated by a
      governmental authority against the Company, its subsidiaries, or any related
      property.





Item
      1A.
      Risk Factors





Management
      of the Company does not believe there have been any material changes in the
      risk
      factors that were disclosed in the Form 10-K filed with the Securities and
      Exchange Commission on March 7, 2008.





Item
      2.
      Unregistered Sales of Equity Securities and Use of Proceeds





The
      following table provides information regarding the Company’s purchases of its
      common shares during the fiscal quarter ended March 31, 2008:





Quarter
                ended
              March 31, 2008
            
            Total Number
              of Shares
              Purchased
            
            Average
              PricePaid
              per Share (1)
            
            Total
              Number of Shares
              Purchased as
              Part of Publicly
              Announced
              Plan
            
            Maximum
              Dollar Amount of
              Shares that May
              Yet be Purchased
              Under the Plan (2)January 1
                through January 31, 2008
            
            
            58,300
            
            $
            13.53
            
            
            58,300
            
            $
            3,237February
                1 through February 29, 2008
            
            
            -
            
            
            -
            
            
            -
            
            
            3,237March
                1 through March 31, 2008
            
            
            -
            
            
            -
            
            
            -
            
            
            3,237Total
            
            
            58,300
            
            $
            13.53
            
            
            58,300
            
            $
            3,237




(1)
            All
                shares were purchased via open market
                transactions.


(2)
            The
                stock buy-back plan was approved by the Board of Directors on April
                18,
                2007. The Company was authorized to purchase up to $5 million of
                common
                stock within a 12-month period ending April 17,
                2008.





On
      April
      16, 2008, the Board of Directors authorized an additional buy-back of Company
      stock over a 12-month period in an amount of up to $5 million.





Item
      6.
      Exhibits





The
      following exhibits are filed as part of this report:





Exhibits3.1
            Restated
                Articles of Incorporation of the Company(1)3.2
            Amendment
                to Bylaws of the Company(10)10.1
            Lease
                for Main Bank Facility(1)10.2
            Supplemental
                Agreement to Lease for Main Bank Facility(1)10.3
            Short-term
                Lease related to Main Bank Facility(1)10.4
            Assignment(1)10.5
            Lease
                Modification Agreement No. 1 for Main Bank Facility(1)10.6
            Memorandum
                of Real Estate Contract(1)10.7
            Affidavit(1)


21





10.8
            Addendum
                to Lease for Main Bank Facility(1)10.9
            Data
                Processing Contract(1)10.10
            Employment
                Contract for certain Executive Officers(1)10.11
            Intentionally
                omitted10.12
            Data
                Processing Contract Amendment(2)10.13
            Intentionally
                omitted10.14
            Intentionally
                omitted10.15
            The
                Employee Savings and Stock Ownership Plan, as
                amended(3)10.16
            Amendment
                to Lease Agreement(4)10.17
            Employment
                Agreement with Scott Eltjes(4)10.18
            Consulting
                Agreement with David L. Miller(6)10.19
            West
                Bancorporation, Inc. Restricted Stock Compensation
                Plan(5)10.20
            Employment
                Agreement between Investors Management Group Ltd. and Jeff
                Lorenzen(7)10.21
            Assignment
                and Assumption of Lease and Consent to Assignment(8)10.22
            2007
                Amendment to Lease Agreement(9)31.1
            Certification
                of Chief Executive Officer under Section 302 of the Sarbanes-Oxley
                Act of
                200231.2
            Certification
                of Chief Financial Officer under Section 302 of the Sarbanes-Oxley
                Act of
                200232.1
            Certification
                of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as
                Adopted
                Pursuant to Section 906 of the Sarbanes-Oxley Act of
                200232.2
            Certification
                of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as
                Adopted
                Pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002





(1)
            Incorporated
                herein by reference to the related exhibit filed with the Form 10
                on March
                11, 2002.(2)
            Incorporated
                herein by reference to the related exhibit filed with the Form 10-K
                on
                March 26, 2003.(3)
            Incorporated
                herein by reference to the related exhibit filed with the Form S-8
                on
                October 29, 2004.(4)
            Incorporated
                herein by reference to the related exhibit filed with the Form 10-K
                on
                March 3, 2005.(5)
            Incorporated
                herein by reference to the definitive proxy statement 14A filed on
                March
                10, 2005.(6)
            Incorporated
                herein by reference to the related exhibit filed with the Form 10-Q
                on May
                6, 2005.(7)
            Incorporated
                herein by reference to the related exhibit filed with the Form 8-K
                on
                February 22, 2006.(8)
            Incorporated
                herein by reference to the related exhibit filed with the Form 10-K
                on
                March 8, 2006.(9)
            Incorporated
                herein by reference to the related exhibit filed with the Form 10-Q
                on May
                4, 2007.(10)
            Incorporated
                herein by reference to the related exhibit filed with the Form 8-K
                on
                November 13, 2007.


22


SIGNATURES





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned, thereunto
      duly authorized.








West
                Bancorporation, Inc.(Registrant)May
                8, 2008
            
            By:
            /s/
                Thomas E. StanberryDate
            
            
            Thomas
                E. StanberryChairman,
                President and Chief Executive OfficerMay
                8, 2008
            
            By:
            /s/
                Douglas R. GullingDate
            
            
            Douglas
                R. GullingExecutive
                Vice President and Chief Financial Officer(Principal
                Accounting Officer)




23


EXHIBIT
      INDEX





The
      following exhibits are filed herewith:





Exhibit
                No.
            
            Description31.1
            
            Certification
                of Chief Executive Officer under Section 302 of the Sarbanes-Oxley
                Act of
                200231.2
            
            Certification
                of Chief Financial Officer under Section 302 of the Sarbanes-Oxley
                Act of
                200232.1
            
            Certification
                of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as
                Adopted
                Pursuant to Section 906 of the Sarbanes-Oxley Act of
                200232.2
            
            Certification
                of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as
                Adopted
                Pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002