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, 2009
 
 or
 
  ̈
                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
22nd
Street, West Des Moines, Iowa 50266
 
 Telephone
Number (515) 222-2300
 
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed 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
 ̈
 
 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 definition of “large accelerated filer,” “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act.
 
 Large
      accelerated filer
                   ̈
                  
                  Accelerated
      filer
                  xNon-accelerated
      filer
                   ̈
                  
                  Smaller
      reporting company
                   ̈
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
 Yes  ̈    No
x
 
 As of
April 28, 2009, there were 17,403,882 shares of common stock, no par value
outstanding.
  
  PART 1 –
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)
                                          
                                          2009
                                          
                                          
                                          2008AssetsCash
      and due from banks
                                          
                                          $
                                          28,753
                                          
                                          
                                          $
                                          23,712Federal
      funds sold and other short-term investments
                                          
                                          
                                          213,423
                                          
                                          
                                          
                                          173,257Cash
      and cash equivalents
                                          
                                          
                                          242,176
                                          
                                          
                                          
                                          196,969Securities
      available for sale
                                          
                                          
                                          175,596
                                          
                                          
                                          
                                          181,434Federal
      Home Loan Bank stock, at cost
                                          
                                          
                                          8,978
                                          
                                          
                                          
                                          8,174Loans
      held for sale
                                          
                                          
                                          984
                                          
                                          
                                          
                                          1,018Loans
                                          
                                          
                                          1,122,415
                                          
                                          
                                          
                                          1,100,735Allowance
      for loan losses
                                          
                                          
                                          (18,015
                                          )
                                          
                                          
                                          (15,441
                                          )Loans,
      net
                                          
                                          
                                          1,104,400
                                          
                                          
                                          
                                          1,085,294Premises
      and equipment, net
                                          
                                          
                                          5,247
                                          
                                          
                                          
                                          4,916Accrued
      interest receivable
                                          
                                          
                                          6,869
                                          
                                          
                                          
                                          6,415Goodwill
                                          
                                          
                                          24,930
                                          
                                          
                                          
                                          24,930Other
      intangible assets
                                          
                                          
                                          1,249
                                          
                                          
                                          
                                          1,404Bank-owned
      life insurance
                                          
                                          
                                          24,806
                                          
                                          
                                          
                                          25,277Other
      assets
                                          
                                          
                                          17,078
                                          
                                          
                                          
                                          17,357Total
      assets
                                          
                                          $
                                          1,612,313
                                          
                                          
                                          $
                                          1,553,188Liabilities and Stockholders'
      EquityLiabilitiesDeposits:Noninterest-bearing
      demand
                                          
                                          $
                                          202,766
                                          
                                          
                                          $
                                          174,635Interest-bearing
      demand
                                          
                                          
                                          117,671
                                          
                                          
                                          
                                          97,853Savings
                                          
                                          
                                          266,529
                                          
                                          
                                          
                                          238,058Time
      of $100,000 or more
                                          
                                          
                                          322,684
                                          
                                          
                                          
                                          274,825Other
      time
                                          
                                          
                                          284,555
                                          
                                          
                                          
                                          369,416Total
      deposits
                                          
                                          
                                          1,194,205
                                          
                                          
                                          
                                          1,154,787Federal
      funds purchased and securities sold under agreements to
      repurchase
                                          
                                          
                                          110,078
                                          
                                          
                                          
                                          93,111Other
      short-term borrowings
                                          
                                          
                                          50
                                          
                                          
                                          
                                          245Accrued
      expenses and other liabilities
                                          
                                          
                                          11,035
                                          
                                          
                                          
                                          9,363Subordinated
      notes
                                          
                                          
                                          20,619
                                          
                                          
                                          
                                          20,619Long-term
      borrowings
                                          
                                          
                                          125,000
                                          
                                          
                                          
                                          125,000Total
      liabilities
                                          
                                          
                                          1,460,987
                                          
                                          
                                          
                                          1,403,125Stockholders'
      EquityPreferred
      stock, $0.01 par value, with a liquidation preference of $1,000 per share;
      authorized 50,000,000 shares; 36,000 shares issued
      and  outstanding at March 31, 2009 and December 31, 2008,
      respectively
                                          
                                          
                                          33,665
                                          
                                          
                                          
                                          33,548Common
      stock, no par value; authorized 50,000,000 shares; 17,403,882 shares
      issued and outstanding at March 31, 2009 and December 31, 2008,
      respectively
                                          
                                          
                                          3,000
                                          
                                          
                                          
                                          3,000Additional
      paid-in capital
                                          
                                          
                                          34,389
                                          
                                          
                                          
                                          34,452Retained
      earnings
                                          
                                          
                                          83,775
                                          
                                          
                                          
                                          82,793Accumulated
      other comprehensive (loss)
                                          
                                          
                                          (3,503
                                          )
                                          
                                          
                                          (3,730
                                          )Total
      stockholders' equity
                                          
                                          
                                          151,326
                                          
                                          
                                          
                                          150,063Total
      liabilities and stockholders' equity
                                          
                                          $
                                          1,612,313
                                          
                                          
                                          $
                                          1,553,188
  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)
                                    
                                    2009
                                    
                                    
                                    2008Interest
      income:Loans,
      including fees
                                    
                                    $
                                    15,022
                                    
                                    
                                    $
                                    16,377Securities:U.S
      Treasury, government agencies and corporations
                                    
                                    
                                    612
                                    
                                    
                                    
                                    985States
      and political subdivisions
                                    
                                    
                                    1,100
                                    
                                    
                                    
                                    943Corporate
      notes and other investments
                                    
                                    
                                    125
                                    
                                    
                                    
                                    398Federal
      funds sold and other short-term investments
                                    
                                    
                                    103
                                    
                                    
                                    
                                    160Total
      interest income
                                    
                                    
                                    16,962
                                    
                                    
                                    
                                    18,863Interest
      expense:Demand
      deposits
                                    
                                    
                                    477
                                    
                                    
                                    
                                    290Savings
      deposits
                                    
                                    
                                    384
                                    
                                    
                                    
                                    1,493Time
      deposits
                                    
                                    
                                    4,404
                                    
                                    
                                    
                                    4,189Federal
      funds purchased and securities sold underagreements
      to repurchase
                                    
                                    
                                    91
                                    
                                    
                                    
                                    1,264Other
      short-term borrowings
                                    
                                    
                                    -
                                    
                                    
                                    
                                    29Subordinated
      notes
                                    
                                    
                                    363
                                    
                                    
                                    
                                    367Long-term
      borrowings
                                    
                                    
                                    1,306
                                    
                                    
                                    
                                    1,355Total
      interest expense
                                    
                                    
                                    7,025
                                    
                                    
                                    
                                    8,987Net
      interest income
                                    
                                    
                                    9,937
                                    
                                    
                                    
                                    9,876Provision
      for loan losses
                                    
                                    
                                    3,500
                                    
                                    
                                    
                                    5,600Net
      interest income after provision for loan losses
                                    
                                    
                                    6,437
                                    
                                    
                                    
                                    4,276Noninterest
      income:Service
      charges on deposit accounts
                                    
                                    
                                    969
                                    
                                    
                                    
                                    1,046Trust
      services
                                    
                                    
                                    180
                                    
                                    
                                    
                                    194Gains
      and fees on sales of residential mortgages
                                    
                                    
                                    298
                                    
                                    
                                    
                                    85Investment
      advisory fees
                                    
                                    
                                    1,416
                                    
                                    
                                    
                                    1,938Increase
      in cash value of bank-owned life insurance
                                    
                                    
                                    182
                                    
                                    
                                    
                                    192Proceeds
      from bank-owned life insurance
                                    
                                    
                                    840
                                    
                                    
                                    
                                    -Securities
      gains, net
                                    
                                    
                                    1,453
                                    
                                    
                                    
                                    5Investment
      securities impairment losses
                                    
                                    
                                    (1,415
                                    )
                                    
                                    
                                    -Other
      income
                                    
                                    
                                    504
                                    
                                    
                                    
                                    472Total
      noninterest income
                                    
                                    
                                    4,427
                                    
                                    
                                    
                                    3,932Noninterest
      expense:Salaries
      and employee benefits
                                    
                                    
                                    3,664
                                    
                                    
                                    
                                    3,731Occupancy
                                    
                                    
                                    940
                                    
                                    
                                    
                                    900Data
      processing
                                    
                                    
                                    546
                                    
                                    
                                    
                                    587FDIC
      insurance expense
                                    
                                    
                                    453
                                    
                                    
                                    
                                    32Other
      expenses
                                    
                                    
                                    1,900
                                    
                                    
                                    
                                    1,515Total
      noninterest expense
                                    
                                    
                                    7,503
                                    
                                    
                                    
                                    6,765Income
      before income taxes
                                    
                                    
                                    3,361
                                    
                                    
                                    
                                    1,443Income
      taxes
                                    
                                    
                                    420
                                    
                                    
                                    
                                    69Net
      income
                                    
                                    $
                                    2,941
                                    
                                    
                                    $
                                    1,374Preferred
      stock dividends and discount
                                    
                                    
                                    (567
                                    )
                                    
                                    
                                    -Net
      income available to common stockholders
                                    
                                    $
                                    2,374
                                    
                                    
                                    $
                                    1,374Earnings
      per common share, basic
                                    
                                    $
                                    0.14
                                    
                                    
                                    $
                                    0.08Earnings
      per common share, diluted
                                    
                                    $
                                    0.14
                                    
                                    
                                    $
                                    0.08Cash
      dividends per common share
                                    
                                    $
                                    0.08
                                    
                                    
                                    $
                                    0.16
  See
accompanying Notes to Consolidated Financial Statements.
  3
  West
Bancorporation, Inc. and Subsidiaries
 Consolidated
Statements of Stockholders’ Equity
 (unaudited)
 
 AccumulatedAdditional
                          
                          
                          
                          
                          
                          OtherComprehensive
                          
                          
                          Preferred
                          
                          
                          Common
                          
                          
                          Paid-in
                          
                          
                          Retained
                          
                          
                          Comprehensive(in
      thousands, except per share
    data)
                          
                          Income
                          
                          
                          Stock
                          
                          
                          Stock
                          
                          
                          Capital
                          
                          
                          Earnings
                          
                          
                          Income
      (Loss)
                          
                          
                          TotalBalance,
      January 1, 2008
                          
                          
                          
                          
                          $
                          -
                          
                          
                          $
                          3,000
                          
                          
                          $
                          32,000
                          
                          
                          $
                          87,084
                          
                          
                          $
                          (478
                          )
                          
                          $
                          121,606Comprehensive
      income:Net
      income
                          
                          $
                          1,374
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          1,374
                          
                          
                          
                          -
                          
                          
                          
                          1,374Other
      comprehensive loss, unrealized (losses) on securities, net of
      reclassification adjustment, net of tax
                          
                          
                          (67
                          )
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (67
                          )
                          
                          
                          (67
                          )Total
      comprehensive income
                          
                          $
                          1,307Shares
      reaquired and retired under the common stock repurchase
    plan
                          
                          
                          
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (788
                          )
                          
                          
                          -
                          
                          
                          
                          (788
                          )Cash
      dividends declared, $0.16 per common share
                          
                          
                          
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (2,785
                          )
                          
                          
                          -
                          
                          
                          
                          (2,785
                          )Balance,
      March 31, 2008
                          
                          
                          
                          
                          
                          $
                          -
                          
                          
                          $
                          3,000
                          
                          
                          $
                          32,000
                          
                          
                          $
                          84,885
                          
                          
                          $
                          (545
                          )
                          
                          $
                          119,340Balance
      at January 1, 2009
                          
                          
                          
                          
                          
                          $
                          33,548
                          
                          
                          $
                          3,000
                          
                          
                          $
                          34,452
                          
                          
                          $
                          82,793
                          
                          
                          $
                          (3,730
                          )
                          
                          $
                          150,063Comprehensive
      income:Net
      income
                          
                          $
                          2,941
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          2,941
                          
                          
                          
                          -
                          
                          
                          
                          2,941Other
      comprehensive income, unrealized gains on securities, net of
      reclassification adjustment, net of tax
                          
                          
                          227
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          227
                          
                          
                          
                          227Total
      comprehensive income
                          
                          $
                          3,168Preferred
      stock discount accretion
                          
                          
                          
                          
                          
                          
                          117
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (117
                          )
                          
                          
                          -
                          
                          
                          
                          -Preferred
      stock issuance costs
                          
                          
                          
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (63
                          )
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (63
                          )Cash
      dividends declared, $0.08 per common share
                          
                          
                          
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (1,392
                          )
                          
                          
                          -
                          
                          
                          
                          (1,392
                          )Preferred
      stock dividends
                          
                          
                          
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (450
                          )
                          
                          
                          -
                          
                          
                          
                          (450
                          )Balance,
      March 31, 2009
                          
                          
                          
                          
                          
                          $
                          33,665
                          
                          
                          $
                          3,000
                          
                          
                          $
                          34,389
                          
                          
                          $
                          83,775
                          
                          
                          $
                          (3,503
                          )
                          
                          $
                          151,326
 
 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)
                        
                        2009
                        
                        
                        2008Cash
      Flows from Operating Activities:Net
      income
                        
                        $
                        2,941
                        
                        
                        $
                        1,374Adjustments
      to reconcile net income to net cash provided by operating
      activities:Provision
      for loan losses
                        
                        
                        3,500
                        
                        
                        
                        5,600Net
      amortization and accretion
                        
                        
                        230
                        
                        
                        
                        193Loss
      on disposition of premises and equipment
                        
                        
                        1
                        
                        
                        
                        16Securities
      gains, net
                        
                        
                        (1,453
                        )
                        
                        
                        (5
                        )Investment
      securities impairment losses
                        
                        
                        1,415
                        
                        
                        
                        -Proceeds
      from sales of loans held for sale
                        
                        
                        19,762
                        
                        
                        
                        6,996Originations
      of loans held for sale
                        
                        
                        (19,727
                        )
                        
                        
                        (6,732
                        )Proceeds
      from bank-owned life insurance
                        
                        
                        (840
                        )
                        
                        
                        -Increase
      in value of bank-owned life insurance
                        
                        
                        (182
                        )
                        
                        
                        (192
                        )Depreciation
                        
                        
                        211
                        
                        
                        
                        227Deferred
      income taxes
                        
                        
                        (1,384
                        )
                        
                        
                        (1,968
                        )Change
      in assets and liabilities:(Increase)
      decrease in accrued interest receivable
                        
                        
                        (454
                        )
                        
                        
                        889Increase
      (decrease) in accrued expenses and other liabilities
                        
                        
                        1,447
                        
                        
                        
                        (893
                        )Net
      cash provided by operating activities
                        
                        
                        5,467
                        
                        
                        
                        5,505Cash
      Flows from Investing Activities:Proceeds
      from sales, calls, and maturities of securities available for
      sale
                        
                        
                        65,971
                        
                        
                        
                        83,608Purchases
      of securities available for sale
                        
                        
                        (59,802
                        )
                        
                        
                        (10,818
                        )Purchases
      of Federal Home Loan Bank stock
                        
                        
                        (804
                        )
                        
                        
                        (3,854
                        )Proceeds
      from redemption of Federal Home Loan Bank stock
                        
                        
                        -
                        
                        
                        
                        1,599Net
      change in loans
                        
                        
                        (23,675
                        )
                        
                        
                        (23,199
                        )Net
      proceeds for the sale of other real estate owned
                        
                        
                        2,161
                        
                        
                        
                        40Proceeds
      from sales of premises and equipment
                        
                        
                        -
                        
                        
                        
                        10Purchases
      of premises and equipment
                        
                        
                        (543
                        )
                        
                        
                        (51
                        )Proceeds
      of principal and earnings from bank-owned life insurance
                        
                        
                        1,493
                        
                        
                        
                        -Other
                        
                        
                        429
                        
                        
                        
                        509Net
      cash provided by (used in) investing activities
                        
                        
                        (14,770
                        )
                        
                        
                        47,844Cash
      Flows from Financing Activities:Net
      change in deposits
                        
                        
                        39,418
                        
                        
                        
                        (27,074
                        )Net
      change in federal funds purchased and securities sold under agreements to
      repurchase
                        
                        
                        16,967
                        
                        
                        
                        (25,266
                        )Net
      change in other short-term borrowings
                        
                        
                        (195
                        )
                        
                        
                        (1,278
                        )Proceeds
      from long-term borrowings
                        
                        
                        -
                        
                        
                        
                        50,000Principal
      payments on long-term borrowings
                        
                        
                        -
                        
                        
                        
                        (250
                        )Payment
      for shares reacquired under common stock repurchase plan
                        
                        
                        -
                        
                        
                        
                        (788
                        )Common
      stock cash dividends
                        
                        
                        (1,392
                        )
                        
                        
                        (2,785
                        )Preferred
      stock dividends
                        
                        
                        (225
                        )
                        
                        
                        -Preferred
      stock issuance costs
                        
                        
                        (63
                        )
                        
                        
                        -Net
      cash provided by (used in) financing activities
                        
                        
                        54,510
                        
                        
                        
                        (7,441
                        )Net
      increase in cash and cash equivalents
                        
                        
                        45,207
                        
                        
                        
                        45,908Cash
      and Cash Equivalents:Beginning
                        
                        
                        196,969
                        
                        
                        
                        49,943End
                        
                        $
                        242,176
                        
                        
                        $
                        95,851
  5
  West
Bancorporation, Inc. and Subsidiaries
 Consolidated Statements of Cash Flows(continued)
 (unaudited)
 
 Three
      Months Ended March 31,(in
      thousands)
                    
                    2009
                    
                    
                    2008Supplemental
      Disclosures of Cash Flow InformationCash
      payments for:Interest
                    
                    $
                    6,720
                    
                    
                    $
                    9,318Income
      taxes
                    
                    
                    190
                    
                    
                    
                    -Supplemental
      Disclosure of Noncash Investing and Financing ActivitiesTransfer
      of loans to other real estate owned
                    
                    $
                    1,069
                    
                    
                    $
                    665
 
 See
accompanying Notes to Consolidated Financial Statements.
  6
 
 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, and cash
flows for the three months ended March 31, 2009 and 2008, and the consolidated
balance sheets as of March 31, 2009 and December 31, 2008, include the accounts
of West Bancorporation, Inc. (the Company), West Bank, West Bank’s wholly-owned
subsidiary, WB Funding Corporation (which owns an interest in a partnership),
West Bank’s 99.9 percent owned subsidiary, ICD IV, LLC (a community development
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, 2009, and the results of operations and cash
flows for the three months ended March 31, 2009 and 2008.
 
 The
results for these interim periods may not be indicative of results for the
entire year or for any other period.
 
 Certain
items in the financial statements as of March 31, 2008 were reclassified to be
consistent with the classifications used in the March 31, 2009 financial
statements.  The reclassification has no effect on net income or
stockholders’ equity.
 
 2.  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 revenues and expenses for the reported 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 (including the determination of the value of impaired
loans), fair value of financial instruments, and the goodwill impairment
assessment.
 
 3.  Critical
Accounting Policies
 
 Management
has identified its most critical accounting policies to be those related to
asset impairment judgments, including fair value of available for sale
investment securities and recoverability of goodwill, and the allowance for loan
losses.
 
 Securities
available for sale are reported at fair value, with unrealized gains and losses
reported as a separate component of accumulated other comprehensive income, net
of deferred income taxes.  Declines in fair value of individual
securities, below their amortized cost, are evaluated by management to determine
whether the decline is temporary or other-than-temporary.  Declines in
fair value of available for sale securities below their cost that are deemed
other-than-temporary are reflected in earnings as impairment
losses.  In estimating other-than-temporary impairment losses,
management considers a number of factors including (1) the length of time and
extent to which the fair value has been less than cost, (2) the financial
condition and near-term prospects of the issuer, and (3) the intent and ability
of the Company to retain its investment in the issuer for a period of time
sufficient to allow for any anticipated recovery in fair value.
 
 Goodwill
is the excess of the cash paid over the net fair value of assets acquired and
liabilities assumed in an acquisition, less the amount of identifiable
intangible assets.  Goodwill is tested for impairment annually or on
an interim basis if events or circumstances indicate a possible inability to
realize the carrying amount.
  7
 
 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 collectability 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 credits.  On a quarterly basis, management reviews
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.
 
 4.  Earnings
per Common Share
 
 Basic
earnings per common share is computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding for the
period.  Income available to common stockholders is net income less
preferred stock dividends and accretion of discount on preferred stock, treated
as preferred stock dividends.  Diluted earnings per common share
reflects the potential dilution that could occur if the Company’s outstanding
stock warrant was exercised and converted into common stock.  The
dilutive effect is computed using the treasury stock method, which assumes all
outstanding warrants are exercised.  The incremental shares, to the
extent they would have been dilutive, are included in the denominator of the
diluted earnings per common share calculation.  The calculation of
earnings per common share and diluted earnings per common share for the three
months ended March 31, 2009 and 2008 is presented below.
 
 Three
      months ended March 31,2009
                        
                        
                        2008Basic
      earnings per common share:Net
      income
                        
                        $
                        2,941
                        
                        
                        $
                        1,374Preferred
      stock dividends*
                        
                        
                        (450
                        )
                        
                        
                        -Preferred
      stock discount accretion*
                        
                        
                        (117
                        )
                        
                        
                        -Net
      income available to common stockholders
                        
                        $
                        2,374
                        
                        
                        $
                        1,374Weighted
      average common shares outstanding
                        
                        
                        17,404
                        
                        
                        
                        17,409Basic
      earnings per common share
                        
                        $
                        0.14
                        
                        
                        $
                        0.08Diluted
      earnings per common share:Net
      income available to common stockholders
                        
                        $
                        2,374
                        
                        
                        $
                        1,374Weighted
      average common shares outstanding
                        
                        
                        17,404
                        
                        
                        
                        17,409Effect
      of dilutive securities:Common
      stock warrant**
                        
                        
                        -
                        
                        
                        
                        -Total
      diluted average common shares issued and outstanding
                        
                        
                        17,404
                        
                        
                        
                        17,409Diluted
      earnings per common share
                        
                        $
                        0.14
                        
                        
                        $
                        0.08
 
 * Preferred stock
and the common stock warrant were issued on December 31, 2008, and therefore had
no effect in 2008.
 ** The
average closing price of the Company’s common stock for the three months ended
March 31, 2009, was $8.33.  This was less than the $11.39 exercise
price of the common stock warrant to purchase 474,100 shares of common stock;
therefore, the warrant was not dilutive.
 
 5.  Commitments
 
 In the
normal course of business, the Company enters into commitments to extend credit
in the form of 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 2008 consolidated financial
statements (pages 54-56 of Appendix to Proxy Statement).  The
Company’s commitments as of the dates shown are approximately as
follows:
 
 March 31, 2009
                        
                        
                        December 31, 2008Commitments
      to extend credit
                        
                        $
                        270,789
                        
                        
                        $
                        301,214Standby
      letters of credit
                        
                        
                        20,271
                        
                        
                        
                        19,788$
                        291,060
                        
                        
                        $
                        321,002
  8
 
 6.  Other-Than-Temporary
Impairment on Securities
 
 In March
2009, the Company recognized an other-than-temporary impairment of $1,380 on two
trust preferred securities.  The carrying values of these investment
securities were written down to $120 as of March 31, 2009.  The
Company also recognized an additional other-than-temporary impairment of $35 on
an investment in a trust that holds common stock of community bank holding
companies.  This security was deemed impaired in the fourth quarter of
2008 and the carrying value of this investment was written down to $145 as of
March 31, 2009.  Income accruals on these securities have been
suspended.  No change in fair value was recognized on two other
investment securities which were deemed impaired during 2008.
 
 7.  Impaired
Loans and Allowance for Loan Losses
 
 A loan is
impaired when it is probable that 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 the impairment is included in the allowance
for loan losses.  The following is a recap of impaired loans at the
dates shown:
 
 March 31, 2009
                        
                        
                        December 31, 2008Impaired
      loans without an allowance
                        
                        $
                        20,547
                        
                        
                        $
                        18,067Impaired
      loans with an allowance
                        
                        
                        27,863
                        
                        
                        
                        23,044Total
      impaired loans
                        
                        $
                        48,410
                        
                        
                        $
                        41,111Allowance
      for loan losses related to impaired loans
                        
                        $
                        4,723
                        
                        
                        $
                        3,590
  The
following table reconciles the balance of non-accrual loans with impaired loans
carried at fair value as of the dates shown below.
 
 March 31, 2009
                        
                        
                        December 31, 2008Non-accrual
      loans
                        
                        $
                        29,988
                        
                        
                        $
                        21,367Restructured
      loans
                        
                        
                        7,456
                        
                        
                        
                        7,376Other
      impaired loans still accruing interest
                        
                        
                        10,966
                        
                        
                        
                        12,368Total
      impaired loans
                        
                        $
                        48,410
                        
                        
                        $
                        41,111
  Changes
in the allowance for loan losses were as follows for the periods shown
below:
 
 Three
      Months Ended March 31,2009
                        
                        
                        2008Balance
      at beginning of period
                        
                        $
                        15,441
                        
                        
                        $
                        8,935Charge-offs
                        
                        
                        (1,187
                        )
                        
                        
                        (381
                        )Recoveries
                        
                        
                        261
                        
                        
                        
                        106Net
      charge-offs
                        
                        
                        (926
                        )
                        
                        
                        (275
                        )Provision
      charged to operations
                        
                        
                        3,500
                        
                        
                        
                        5,600Balance
      at end of period
                        
                        $
                        18,015
                        
                        
                        $
                        14,260
  9
 
 8.  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 through interest and
fees on loans, interest on investment securities, service charges on deposit
accounts, gains and fees on sale of residential mortgages, and fees for trust
services.  The banking segment includes West Bank, the Company, and
related elimination entries between the two, as the 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, 2009
and 2008.
 
 Three
      months ended March 31, 2009SegmentsInvestmentBanking
                              
                              
                              Advisory
                              
                              
                              Other
                              
                              
                              ConsolidatedInterest
      income
                              
                              $
                              16,962
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              16,962Interest
      expense
                              
                              
                              7,025
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              7,025Net
      interest income
                              
                              
                              9,937
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              9,937Provision
      for loan losses
                              
                              
                              3,500
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              3,500Net
      interest income after provision for loan losses
                              
                              
                              6,437
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              6,437Noninterest
      income
                              
                              
                              3,011
                              
                              
                              
                              1,459
                              
                              
                              
                              (43
                              )
                              
                              
                              4,427Noninterest
      expense
                              
                              
                              6,094
                              
                              
                              
                              1,452
                              
                              
                              
                              (43
                              )
                              
                              
                              7,503Income
      before income taxes
                              
                              
                              3,354
                              
                              
                              
                              7
                              
                              
                              
                              -
                              
                              
                              
                              3,361Income
      taxes
                              
                              
                              417
                              
                              
                              
                              3
                              
                              
                              
                              -
                              
                              
                              
                              420Net
      income
                              
                              $
                              2,937
                              
                              
                              $
                              4
                              
                              
                              $
                              -
                              
                              
                              $
                              2,941Depreciation
      and amortization
                              
                              $
                              226
                              
                              
                              $
                              140
                              
                              
                              $
                              -
                              
                              
                              $
                              366Goodwill
                              
                              $
                              13,376
                              
                              
                              $
                              11,554
                              
                              
                              $
                              -
                              
                              
                              $
                              24,930Total
      assets
                              
                              $
                              1,599,309
                              
                              
                              $
                              13,404
                              
                              
                              $
                              (400
                              )
                              
                              $
                              1,612,313Three
      months ended March 31, 2008SegmentsInvestmentBanking
                              
                              
                              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
                              
                              
                              1,991
                              
                              
                              
                              1,989
                              
                              
                              
                              (48
                              )
                              
                              
                              3,932Noninterest
      expense
                              
                              
                              5,057
                              
                              
                              
                              1,756
                              
                              
                              
                              (48
                              )
                              
                              
                              6,765Income
      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
  10
  9.  Fair
Value Measurements
 
 Statement
of Financial Accounting Standard (SFAS) No. 157, Fair Value Measurements,requires disclosure for those assets and liabilities carried in the
balance sheet on a fair value basis.  In October 2008, the FASB issued
Staff Position (FSP) No. 157-3, Determining the Fair Value of a
Financial Asset in a Market that is not Active, which amended SFAS No.
157.  The FSP clarified how the fair value of a financial instrument
is determined when the market for that financial asset is
inactive.  Effective January 1, 2009, the Company adopted the
nonfinancial assets and liabilities portion of SFAS No. 157 which requires
recognition at fair value of nonfinancial assets and liablities on a
nonrecurring basis.  See Footnote 10 for details on additional changes
to required disclosures which will be effective as of June 30,
2009.
 
 The
Company’s balance sheet contains securities available for sale that are recorded
at fair value on a recurring basis.  SFAS No. 157 requires that assets
and liabilities carried at fair value 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.
 
 When
available, quoted market prices are used to determine the fair value of
investment securities and such items are classified within Level 1 of the fair
value hierarchy.  An example is U.S. Treasury
securities.  For other securities, the Company determines fair value
based on various sources and may apply matrix pricing with observable prices for
similar bonds where a price for the identical bond is not
observable.  Securities measured at fair value by such methods are
classified as Level 2.  Certain securities are not valued based on
observable transactions and are, therefore, classified as Level
3.  The fair value of these securities is based on management’s best
estimates.
 
 The
following table presents the balances of assets and liabilities measured at fair
value on a recurring basis by level as of March 31, 2009:
 
 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
                      
                      $
                      175,596
                      
                      
                      $
                      2,032
                      
                      
                      $
                      171,220
                      
                      
                      $
                      2,344Total
                      
                      $
                      175,596
                      
                      
                      $
                      2,032
                      
                      
                      $
                      171,220
                      
                      
                      $
                      2,344
  The
following table presents changes in securities available for sale with
significant unobservable inputs (Level 3) for the three months ended March 31,
2009:
 
 Securities Availablefor SaleBeginning
      balance
                        
                        $
                        2,325Transfer
      into Level 3
                        
                        
                        250Total
      gains or losses:Included
      in earnings
                        
                        
                        -Included
      in other comprehensive income
                        
                        
                        (200
                        )Principal
      payments
                        
                        
                        (31
                        )Ending
      balance
                        
                        $
                        2,344
  11
  The table
above includes one pooled trust preferred security which was transferred to
Level 3 during 2008.  Market pricing for this security varies widely
from one pricing service to another based on a lack of trading so it was
considered to no longer have readily observable market data.  The fair
value as of March 31, 2009, was determined by discounting the expected cash
flows over the life of the security.  The discount rate included an
estimate for illiquidity, credit risk, and the time value of
money.  One additional trust preferred security with a carrying value
of $250 was transferred to Level 3 during the first quarter of
2009.  The bank holding company that issued the trust preferred
security is not a public company, has been deferring interest payments on the
trust preferred securities, and has been losing money for over a year.This security was
estimated by management to have a fair market value of $50 at March 31,
2009.
 
 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 within the SFAS No.
157 valuation hierarchy as of March 31, 2009:
 
 Quoted Pricesin Active Markets
                    
                    
                    Significant Other
                    
                    
                    Significantfor Identical Assets
                    
                    
                    Observable Inputs
                    
                    
                    Unobservable InputsDescription
                    
                    Total
                    
                    
                    (Level 1)
                    
                    
                    (Level 2)
                    
                    
                    (Level 3)Assets:Loans
                    
                    $
                    23,140
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    23,140Other
      real estate owned
                    
                    
                    3,260
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    3,260Total
                    
                    $
                    26,400
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    26,400
 
 Loans in
the table above consist of impaired loans held for investment less the portion
of the allowance for loan losses related to these loans. Impaired loans are
evaluated and valued at the time the loan is identified as impaired, at the
lower of cost or fair value and are classified at a Level 3 in the fair value
hierarchy.  Fair value is measured based on the value of the
collateral securing these loans.  Collateral may be real estate and/or
business assets including equipment, inventory and/or accounts receivable and is
determined based on appraisals by qualified licensed appraisers hired by the
Company.  Appraised and reported values may be discounted based on
management’s historical knowledge, changes in market conditions from the time of
valuation, and/or management’s expertise and knowledge of the client and
client’s business.  Other real estate owned in the table above
consists of property acquired through foreclosures and settlements of
loans.  Property acquired is carried at the lower of the principal
amount of loans outstanding, or the estimated fair value of the property, less
disposal costs, and is classified at a Level 3 in the fair value
hierarchy.
 
 10.  Current
Accounting Developments
 
 In April
2009, the FASB issued the following new accounting standards:
 
 i.)
                FASB
      Staff Position FAS 157−4, Determining Whether a Market
      Is Not Active and a Transaction Is Not Distressed,provides
      guidelines for making fair value measurements more consistent with the
      principles presented in SFAS 157.  FSP FAS 157−4 provides
      additional authoritative guidance in determining whether a market is
      active or inactive, and whether a transaction is
      distressed.  This FSP is applicable to all assets and
      liabilities (i.e. financial and nonfinancial) and will require enhanced
      disclosures.
 ii.)
                FASB
      Staff Position FAS 115−2 and FAS 124−2, Recognition and Presentation
      of Other−Than−Temporary Impairments, provides additional guidance
      to provide greater clarity about the credit and noncredit component of an
      other−than−temporary impairment event and to more effectively communicate
      when an other−than−temporary impairment event has occurred. This FSP
      applies to debt securities.
 iii.)
                FASB
      Staff Position FAS 107−1 and APB 28−1, Interim Disclosures about Fair
      Value of Financial Instruments, amends FASB Statement No. 107,
      Disclosures about Fair
      Value of Financial Instruments, to require disclosures about fair
      value of financial instruments in interim as well as in annual financial
      statements.  This FSP also amends APB Opinion No. 28, Interim Financial
      Reporting, to require those disclosures in all interim financial
      statements.
 
 These
statements are effective for periods ending after June 15, 2009, with early
adoption permitted for periods ending after March 15, 2009.  The
Company has elected to adopt these statements effective for the quarter ending
June 30, 2009.  The Company is currently evaluating the impact that
the adoption of these Statements will have on its financial position and results
of operations.
  12
 
 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 ratios.  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,” “intends,” “should,” or
“anticipates,” or similar references 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; changes in the Treasury’s Capital Purchase Program; 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, 2009
 (dollars
in thousands, except per share amounts)
 
 OVERVIEW
 
 The
following discussion describes the consolidated operations of the Company,
including West Bank, West Bank’s wholly-owned subsidiary, WB Funding
Corporation, West Bank’s 99.9 percent owned subsidiary, ICD IV, LLC, and WB
Capital Management Inc. (WB Capital).  Consolidated results of
operations for the quarter ended March 31, 2009, are compared to the results for
the same period in 2008, and the consolidated financial condition of the Company
at March 31, 2009, is compared to the December 31, 2008, position.
 
 Net
income for the quarter ended March 31, 2009, was $2,941 compared to $1,374 for
the quarter ended March 31, 2008.  Basic and diluted earnings per
common share were $0.14 and $0.08, respectively, for the same
periods.  The Company’s annualized return on average equity and return
on average assets for the first quarter of 2009 were 7.84 percent and 0.75
percent, respectively, and 4.54 percent and 0.42 percent, respectively, for the
first quarter of 2008.
 
 Net
income for the first quarter of 2009 increased $1,567 compared to the first
quarter of 2008 due in large part to a lower provision for loan
losses.  The provision was $3,500 in the quarter ended March 31, 2009,
compared to $5,600 in the first quarter of 2008.  The 2009 provision
was significantly higher than historical levels due to the prolonged economic
downturn and its effect on West Bank customers.  The 2008 first
quarter provision included $5,000 related to a large homebuilder and developer
that failed.
 
 First
quarter 2009 noninterest income included investment security gains of $1,453
compared to only $5 in 2008, $840 of proceeds from a bank-owned life insurance
policy due to the death of a West Bank officer, and an increase of $213 in gains
and fees on the sale of residential mortgages.  Offsetting these
improvements were the recognition of investment security impairment losses of
$1,415 and a $522 reduction in investment advisory fees.
 
 Year-to-date
noninterest expense was $738 higher in the first quarter of 2009 than a year
ago.  The increase included significantly higher FDIC insurance
expense and increased contribution expense as a portion of the bank-owned life
insurance proceeds were donated to the West Bancorporation
Foundation.
 
 WB
Capital’s first quarter 2009 net income declined to $4 compared to $135 for the
same period in 2008.  Revenues were lower than a year ago because of a
severe decline in stock values and lower levels of assets under
management.  Operating expenses declined $304 during the first quarter
of 2009 compared to the same 2008 period due to lower salaries and benefits and
intangible amortization.
  13
  RESULTS
OF OPERATIONS
 
 The
following table shows selected financial results and measures for the three
months ended March 31, 2009, compared with the same periods in
2008:
 
 Three Months Ended March 31,2009
                      
                      
                      2008
                      
                      
                      Change
                      
                      
                      Change %Net
      income
                      
                      $
                      2,941
                      
                      
                      $
                      1,374
                      
                      
                      $
                      1,567
                      
                      
                      
                      114.0
                      %Average
      assets
                      
                      
                      1,582,010
                      
                      
                      
                      1,323,204
                      
                      
                      
                      258,806
                      
                      
                      
                      19.6
                      %Average
      stockholders' equity
                      
                      
                      152,138
                      
                      
                      
                      121,711
                      
                      
                      
                      30,427
                      
                      
                      
                      25.0
                      %Return
      on assets
                      
                      
                      0.75
                      %
                      
                      
                      0.42
                      %
                      
                      
                      0.33
                      %Return
      on equity
                      
                      
                      7.84
                      %
                      
                      
                      4.54
                      %
                      
                      
                      3.30
                      %Efficiency
      ratio
                      
                      
                      50.19
                      %
                      
                      
                      47.45
                      %
                      
                      
                      2.74
                      %Dividend
      payout ratio
                      
                      
                      47.34
                      %
                      
                      
                      202.70
                      %
                      
                      
                      -155.36
                      %Equity
      to assets ratio
                      
                      
                      9.62
                      %
                      
                      
                      9.20
                      %
                      
                      
                      0.42
                      %
 
 Definitions
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.
  14
 
 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, 2009 and 2008:
 
 Average
      Balance
                      
                      
                      Interest
      Income/Expense
                      
                      
                      Yield/Rate2009
                      
                      
                      2008
                      
                      
                      Change
                      
                      
                      Change
      %
                      
                      
                      2009
                      
                      
                      2008
                      
                      
                      Change
                      
                      
                      Change
      %
                      
                      
                      2009
                      
                      
                      2008
                      
                      
                      ChangeInterest-earning
      assets:Loans:Commercial
                      
                      $
                      396,806
                      
                      
                      $
                      360,277
                      
                      
                      $
                      36,529
                      
                      
                      
                      10.14
                      %
                      
                      $
                      4,751
                      
                      
                      $
                      5,873
                      
                      
                      $
                      (1,122
                      )
                      
                      
                      -19.10
                      %
                      
                      
                      4.86
                      %
                      
                      
                      6.56
                      %
                      
                      
                      -1.70
                      %Real
      estate
                      
                      
                      707,597
                      
                      
                      
                      626,266
                      
                      
                      
                      81,331
                      
                      
                      
                      12.99
                      %
                      
                      
                      10,252
                      
                      
                      
                      10,378
                      
                      
                      
                      (126
                      )
                      
                      
                      -1.21
                      %
                      
                      
                      5.88
                      %
                      
                      
                      6.66
                      %
                      
                      
                      -0.78
                      %Consumer
      and other
                      
                      
                      11,734
                      
                      
                      
                      13,689
                      
                      
                      
                      (1,955
                      )
                      
                      
                      -14.28
                      %
                      
                      
                      184
                      
                      
                      
                      236
                      
                      
                      
                      (52
                      )
                      
                      
                      -22.03
                      %
                      
                      
                      6.34
                      %
                      
                      
                      6.93
                      %
                      
                      
                      -0.59
                      %Total
      Loans
                      
                      
                      1,116,137
                      
                      
                      
                      1,000,232
                      
                      
                      
                      115,905
                      
                      
                      
                      11.59
                      %
                      
                      
                      15,187
                      
                      
                      
                      16,487
                      
                      
                      
                      (1,300
                      )
                      
                      
                      -7.89
                      %
                      
                      
                      5.52
                      %
                      
                      
                      6.63
                      %
                      
                      
                      -1.11
                      %Investment
      securities:Taxable
                      
                      
                      86,438
                      
                      
                      
                      119,628
                      
                      
                      
                      (33,190
                      )
                      
                      
                      -27.74
                      %
                      
                      
                      831
                      
                      
                      
                      1,477
                      
                      
                      
                      (646
                      )
                      
                      
                      -43.74
                      %
                      
                      
                      3.85
                      %
                      
                      
                      4.94
                      %
                      
                      
                      -1.09
                      %Tax-exempt
                      
                      
                      95,163
                      
                      
                      
                      85,796
                      
                      
                      
                      9,367
                      
                      
                      
                      10.92
                      %
                      
                      
                      1,464
                      
                      
                      
                      1,193
                      
                      
                      
                      271
                      
                      
                      
                      22.72
                      %
                      
                      
                      6.16
                      %
                      
                      
                      5.56
                      %
                      
                      
                      0.60
                      %Total
      investment securities
                      
                      
                      181,601
                      
                      
                      
                      205,424
                      
                      
                      
                      (23,823
                      )
                      
                      
                      -11.60
                      %
                      
                      
                      2,295
                      
                      
                      
                      2,670
                      
                      
                      
                      (375
                      )
                      
                      
                      -14.04
                      %
                      
                      
                      5.06
                      %
                      
                      
                      5.20
                      %
                      
                      
                      -0.14
                      %Federal
      funds sold and short-term investments
                      
                      
                      193,884
                      
                      
                      
                      23,241
                      
                      
                      
                      170,643
                      
                      
                      
                      734.23
                      %
                      
                      
                      103
                      
                      
                      
                      160
                      
                      
                      
                      (57
                      )
                      
                      
                      -35.63
                      %
                      
                      
                      0.22
                      %
                      
                      
                      2.77
                      %
                      
                      
                      -2.55
                      %Total
      interest-earning assets
                      
                      $
                      1,491,622
                      
                      
                      $
                      1,228,897
                      
                      
                      $
                      262,725
                      
                      
                      
                      21.38
                      %
                      
                      
                      17,585
                      
                      
                      
                      19,317
                      
                      
                      
                      (1,732
                      )
                      
                      
                      -8.97
                      %
                      
                      
                      4.78
                      %
                      
                      
                      6.32
                      %
                      
                      
                      -1.54
                      %Interest-bearing
      liabilities:Deposits:Checking
      with interest, savings and money markets
                      
                      $
                      341,464
                      
                      
                      $
                      327,263
                      
                      
                      $
                      14,201
                      
                      
                      
                      4.34
                      %
                      
                      
                      861
                      
                      
                      
                      1,783
                      
                      
                      
                      (922
                      )
                      
                      
                      -51.71
                      %
                      
                      
                      1.02
                      %
                      
                      
                      2.19
                      %
                      
                      
                      -1.17
                      %Time
      deposits
                      
                      
                      653,899
                      
                      
                      
                      376,862
                      
                      
                      
                      277,037
                      
                      
                      
                      73.51
                      %
                      
                      
                      4,404
                      
                      
                      
                      4,189
                      
                      
                      
                      215
                      
                      
                      
                      5.13
                      %
                      
                      
                      2.73
                      %
                      
                      
                      4.47
                      %
                      
                      
                      -1.74
                      %Total
      deposits
                      
                      
                      995,363
                      
                      
                      
                      704,125
                      
                      
                      
                      291,238
                      
                      
                      
                      41.36
                      %
                      
                      
                      5,265
                      
                      
                      
                      5,972
                      
                      
                      
                      (707
                      )
                      
                      
                      -11.84
                      %
                      
                      
                      2.15
                      %
                      
                      
                      3.41
                      %
                      
                      
                      -1.26
                      %Other
      borrowed funds
                      
                      
                      242,264
                      
                      
                      
                      306,382
                      
                      
                      
                      (64,118
                      )
                      
                      
                      -20.93
                      %
                      
                      
                      1,760
                      
                      
                      
                      3,015
                      
                      
                      
                      (1,255
                      )
                      
                      
                      -41.63
                      %
                      
                      
                      2.95
                      %
                      
                      
                      3.96
                      %
                      
                      
                      -1.01
                      %Total
      interest-bearing liabilities
                      
                      $
                      1,237,627
                      
                      
                      $
                      1,010,507
                      
                      
                      $
                      227,120
                      
                      
                      
                      22.48
                      %
                      
                      
                      7,025
                      
                      
                      
                      8,987
                      
                      
                      
                      (1,962
                      )
                      
                      
                      -21.83
                      %
                      
                      
                      2.30
                      %
                      
                      
                      3.58
                      %
                      
                      
                      -1.28
                      %Tax-equivalent
      net interest income
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      $
                      10,560
                      
                      
                      $
                      10,330
                      
                      
                      $
                      230
                      
                      
                      
                      2.23
                      %Net
      interest spread
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      2.48
                      %
                      
                      
                      2.74
                      %
                      
                      
                      -0.26
                      %Net
      interest margin
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      2.87
                      %
                      
                      
                      3.38
                      %
                      
                      
                      -0.51
                      %
 
 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.  Interest rates earned and paid are also affected by general
economic conditions, particularly changes in market interest rates, and by
competitive factors, government policies, and the action of regulatory
authorities.  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 2009 was
2.87 percent, a 51 basis point decline compared to the same quarter last
year.
 
 The
Company’s tax-equivalent net interest income for the quarter ended March 31,
2009, increased $230 compared to the quarter ended March 31,
2008.  The high level of competition in the local markets and the
December 2008 drop in the targeted federal funds rate by the Federal Reserve to
a range of zero to 25 basis points are expected to continue to put pressure on
the net interest margin of the Company.
 
 Tax-equivalent
interest income and fees on loans declined $1,300 in the first quarter of 2009
compared to the same period in 2008, as the combination of lower rates, and a
higher volume of non-accrual loans exceeded the positive impact of the $116
million increase in the average volume of outstanding loans.  The
average yield on loans declined to 5.52 percent for the first quarter of 2009,
compared to 6.63 percent for the same period in 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, the amount of non-accrual
loans, and reversals of previously accrued interest on charged-off
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
competitive, while the level of demand for new loans has declined as business
customers assess the long-term effects of the recession.
  15
 
 The
average balance of investment securities was $23.8 million lower than last year,
and the yield declined 14 basis points.  The decline in yield was
caused by reversing $117 of interest on securities deemed impaired during the
first quarter of 2009.  Investment securities totaling approximately
$66.0 million were sold, called, or matured in the first three months of 2009
and approximately $59.8 million of investment securities were purchased during
the same period.
 
 The
average balance of federal funds sold and short-term investments increased over
$170 million as management maintained a high level of liquidity during these
tumultuous economic times.  Unfortunately, despite the significant
increase in volume, net interest income on these assets declined due to the 255
basis point drop in rates.  Management is planning to invest
approximately $100 million of these funds in agency and municipal securities
during the second quarter of 2009 in order to maintain the net interest margin
at or above its current level.
 
 Market
interest rates on deposits fell considerably and the average rate paid on
deposits declined to 2.15 percent from 3.41 percent for the first quarter of
last year.  The result was a reduction in interest expense of $707
despite a sizable increase in average balances.  The average balance
of time deposits increased $277 million in the first quarter of 2009 compared to
the same time period in 2008 with all of that increase in brokered time
deposits.  The balance is expected to stay higher as more customers
are participating in the Certificate of Deposit Account Registry Service (CDARS)
program to ensure the safety of their deposits.  CDARS is a program
that coordinates a network of banks to spread deposits exceeding the FDIC
insurance coverage limits out to numerous institutions in order to provide
insurance coverage for all participating deposits.
 
 The
average rate paid on other borrowings declined by 101 basis points compared to
the first quarter of 2008.  The average balance of borrowings for the
first quarter of 2009 was $64.1 million lower than a year
ago.  Overnight borrowings in the form of federal funds purchased from
correspondent banks and securities sold under agreements to repurchase averaged
$54.4 million less than in the first quarter of last year.  The
average rate paid on overnight borrowings declined 299 basis points compared to
the first quarter of 2008.  Average long-term borrowings declined $6.8
million, while the rates paid on borrowings increased 11 basis points compared
to 2008.
 
 Provision
for Loan Losses and the Related Allowance for Loan Losses
 
 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
adequacy of the allowance for loan losses is evaluated quarterly by management
and reviewed by West Bank’s Board of Directors.  This evaluation
focuses on factors such as 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 or later acquired information.  Furthermore,
changes in future economic activity are always
uncertain.  Identifiable sectors within the general economy are
subject to additional volatility, which at any time may have a substantial
impact on the loan portfolio.  In addition, regulatory agencies, as an
integral part of their examination process, periodically review the estimated
losses on loans.  Such agencies may require West Bank to recognize
additional losses based on their judgment about information available to them at
the time of their examination.
 
 West
Bank’s policy is to charge off loans when, in management’s opinion, the loan is
deemed uncollectible, although concerted efforts are made to maximize future
recoveries.  The following table summarizes the activity in the
allowance for loan losses for the three months ended March 31, 2009 and 2008, as
well as common ratios related to the allowance for loan losses.
  16
 
 Three Months Ended March 31,2009
                        
                        
                        2008
                        
                        
                        ChangeBalance
      at beginning of period
                        
                        $
                        15,441
                        
                        
                        $
                        8,935
                        
                        
                        $
                        6,506Charge-offs
                        
                        
                        (1,187
                        )
                        
                        
                        (381
                        )
                        
                        
                        (806
                        )Recoveries
                        
                        
                        261
                        
                        
                        
                        106
                        
                        
                        
                        155Net
      charge-offs
                        
                        
                        (926
                        )
                        
                        
                        (275
                        )
                        
                        
                        (651
                        )Provision
      charged to operations
                        
                        
                        3,500
                        
                        
                        
                        5,600
                        
                        
                        
                        (2,100
                        )Balance
      at end of period
                        
                        $
                        18,015
                        
                        
                        $
                        14,260
                        
                        
                        $
                        3,755Average
      loans outstanding
                        
                        $
                        1,116,137
                        
                        
                        $
                        1,000,232Ratio
      of net charge-offs during the period to average loans
      outstanding
                        
                        
                        0.08
                        %
                        
                        
                        0.03
                        %Ratio
      of allowance for loan losses to average loans outstanding
                        
                        
                        1.61
                        %
                        
                        
                        1.43
                        %
 
 The
provision for loan losses was reduced $2,100 for the first quarter of 2009
compared to a year ago.  The first quarter 2008 provision included
$5,000 related to a large homebuilder and developer that failed.  The
2009 provision remained higher than historic levels as the economy remained in a
recession with significant difficulty being experienced in the construction and
real estate development areas.
 
 Net
charge-offs during the first three months of 2009 were $651 higher than in the
same period in 2008.  The majority of the 2009 year-to-date
charge-offs were related to two customers.  In the first instance,
declining collateral values for a customer that had been the victim of a
substantial fraud identified in 2008 caused a partial charge-off of
$600.  In the second instance, the value of repossessed development
property transferred to other real estate owned was less than the loan balance
resulting in a charge-off of $200.
 
 The
allowance for loan losses represented 47.4 percent of non-performing loans at
March 31, 2009, compared to 53.5 percent at December 31, 2008.  The
ratio has declined primarily due to the increase in non-accrual
loans.
 
 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:
                          
                          2009
                          
                          
                          2008
                          
                          
                          Change
                          
                          
                          Change
      %Service
      charges on deposit accounts
                          
                          $
                          969
                          
                          
                          $
                          1,046
                          
                          
                          $
                          (77
                          )
                          
                          
                          -7.4
                          %Trust
      services
                          
                          
                          180
                          
                          
                          
                          194
                          
                          
                          
                          (14
                          )
                          
                          
                          -7.2
                          %Gains
      and fees on sales of residential mortgages
                          
                          
                          298
                          
                          
                          
                          85
                          
                          
                          
                          213
                          
                          
                          
                          250.6
                          %Investment
      advisory fees
                          
                          
                          1,416
                          
                          
                          
                          1,938
                          
                          
                          
                          (522
                          )
                          
                          
                          -26.9
                          %Increase
      in cash value of bank-ownedlife insurance
                          
                          
                          182
                          
                          
                          
                          192
                          
                          
                          
                          (10
                          )
                          
                          
                          -5.2
                          %Proceeds
      from bank-owned life insurance
                          
                          
                          840
                          
                          
                          
                          -
                          
                          
                          
                          840
                          
                          
                          
                          N/ASecurities
      gains (losses), net
                          
                          
                          1,453
                          
                          
                          
                          5
                          
                          
                          
                          1,448
                          
                          
                          
                          28960.0
                          %Investment
      securities impairment losses
                          
                          
                          (1,415
                          )
                          
                          
                          -
                          
                          
                          
                          (1,415
                          )
                          
                          
                          N/AOther:Debit
      card usage fees
                          
                          
                          248
                          
                          
                          
                          190
                          
                          
                          
                          58
                          
                          
                          
                          30.5
                          %All
      other
                          
                          
                          256
                          
                          
                          
                          282
                          
                          
                          
                          (26
                          )
                          
                          
                          -9.2
                          %Total
      other
                          
                          
                          504
                          
                          
                          
                          472
                          
                          
                          
                          32
                          
                          
                          
                          6.8
                          %Total
      noninterest income
                          
                          $
                          4,427
                          
                          
                          $
                          3,932
                          
                          
                          $
                          495
                          
                          
                          
                          12.6
                          %
  17


Year-to-date
service charges on deposit accounts declined compared to the first quarter of
2008 as return check charges fell more than an increase in fees on commercial
accounts.  Return check charges were $100 lower than in the same
period of 2008 as customers presented fewer checks against non-sufficient
funds.  Commercial fee income grew because low market interest rates
resulted in lower earnings credits.





Trust
fees have declined compared to the prior year due to lower asset values due to
the decline in the stock market.





The
volume of originations of residential mortgages sold into the secondary market
in the first quarter of 2009 almost tripled compared to 2008.  The
growth of this line of business is expected to continue as historically low
interest rates cause consumers to refinance existing mortgages in order to
reduce their monthly costs.  Despite the low level of home sales,
consumers are selectively purchasing real estate while locking in relatively low
long-term rates.





Investment
advisory fees are fees earned by WB Capital.  A portion of the first
quarter 2009 decline resulted from the decline in advisory fees from separately
managed accounts due to the severe decline in stock values and business lost due
to the uncertain markets.  Also contributing to the decline was the
loss of assets in the WB Capital Mutual Funds.  Partially offsetting
the decline was a 21.7 percent or $65 increase in public funds revenue due to
increased asset levels.





As
previously discussed, West Bank received tax-exempt income from life insurance
proceeds as the result of the death of one of its officers.





During
March of 2009, West Bank sold agency and municipal available-for-sale investment
securities with a book value of approximately $8.8 million to take advantage of
gains within the portfolio.  The Company also recognized impairment
losses of $1,415 on two trust preferred securities held by West Bank and one
unit investment trust at the Company.  Interest of $117 related to the
two trust preferred securities that were considered impaired was reversed from
interest income in March 2009.  No further interest accruals will be
recorded.





Debit
card usage fees continued to increase in the first quarter of 2009 as West
Bank’s interest-bearing checking account with reward features and an above
market interest rate grew by over one thousand accounts and approximately $24
million in balances compared to December 31, 2008.  This product was
introduced in April 2008 and encourages the use of electronic
payments.  This source of revenue is expected to continue to grow due
to the convenience of this payment method.  The growth rate may
decline going forward due to the recent implementation of a requirement that new
account owners be Iowa residents.





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:
                      
                      2009
                      
                      
                      2008
                      
                      
                      Change
                      
                      
                      Change %Salaries
      and employee benefits
                      
                      $
                      3,664
                      
                      
                      $
                      3,731
                      
                      
                      $
                      (67
                      )
                      
                      
                      -1.8
                      %Occupancy
                      
                      
                      940
                      
                      
                      
                      900
                      
                      
                      
                      40
                      
                      
                      
                      4.4
                      %Data
      processing
                      
                      
                      546
                      
                      
                      
                      587
                      
                      
                      
                      (41
                      )
                      
                      
                      -7.0
                      %FDIC
      insurance expense
                      
                      
                      453
                      
                      
                      
                      32
                      
                      
                      
                      421
                      
                      
                      
                      1315.6
                      %Other:Marketing
                      
                      
                      164
                      
                      
                      
                      187
                      
                      
                      
                      (23
                      )
                      
                      
                      -12.3
                      %Professional
      fees
                      
                      
                      279
                      
                      
                      
                      244
                      
                      
                      
                      35
                      
                      
                      
                      14.3
                      %Consulting
      fees
                      
                      
                      83
                      
                      
                      
                      50
                      
                      
                      
                      33
                      
                      
                      
                      66.0
                      %Deposit
      operations expense
                      
                      
                      89
                      
                      
                      
                      3
                      
                      
                      
                      86
                      
                      
                      
                      2866.7
                      %Bank
      service charges
                      
                      
                      82
                      
                      
                      
                      57
                      
                      
                      
                      25
                      
                      
                      
                      43.9
                      %Other
      real estate owned expense
                      
                      
                      35
                      
                      
                      
                      (14
                      )
                      
                      
                      49
                      
                      
                      
                      350.0
                      %Charitable
      contributions
                      
                      
                      200
                      
                      
                      
                      36
                      
                      
                      
                      164
                      
                      
                      
                      455.6
                      %Intangible
      amortization
                      
                      
                      155
                      
                      
                      
                      177
                      
                      
                      
                      (22
                      )
                      
                      
                      -12.4
                      %All
      other
                      
                      
                      813
                      
                      
                      
                      775
                      
                      
                      
                      38
                      
                      
                      
                      4.9
                      %Total
      other
                      
                      
                      1,900
                      
                      
                      
                      1,515
                      
                      
                      
                      385
                      
                      
                      
                      25.4
                      %Total
      noninterest expense
                      
                      $
                      7,503
                      
                      
                      $
                      6,765
                      
                      
                      $
                      738
                      
                      
                      
                      10.9
                      %


18





The
decline in salaries and benefits resulted from a $191 reduction in bonus
accruals compared to the first quarter of 2008.  Partially offsetting
this reduction was a 7.6 percent increase in the cost of employee healthcare
coverage.





Occupancy
expenses increased in the three months ended March 31, 2009, mainly due to the
February 2009 opening of a new branch in Waukee.  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
and rental payments began in the second quarter of 2008.





Data
processing expense declined because of new terms in West Bank’s contract with
its data processing provider.  Those savings were somewhat offset by
increased costs related to higher volumes of pin and signature-based debit/ATM
card transactions and higher volumes of transactions and accounts on West Bank’s
various deposit and loan application systems.





FDIC
insurance expense increased as a result of the re-establishment of the FDIC
assessment and subsequent rate increases.  West Bank’s share of a
one-time assessment credit was almost fully utilized by March 31,
2008.  The rate assessed to each bank is based upon risk factors
including past due and non-performing loans, net loan charge-offs, and net
income before taxes.  The cost is expected to double in the second
quarter of 2009 due to a premium increase which became effective on April 1,
2009.  The FDIC has also proposed a one-time emergency special
assessment of 20 basis points as part of the restoration plan for the Deposit
Insurance Fund.  The impact on West Bank would be an additional cost
of approximately $2.4 million for the second quarter.  The one-time
assessment has attracted significant attention and may be reduced to 10 basis
points, or approximately $1.2 million.  A final determination on the
rate of the one-time emergency special assessment is expected in May
2009.





Professional
fees increased due to higher legal fees, primarily associated with loan
collection efforts, and higher external audit and tax compliance related
fees.  Consulting fees increased due to the implementation of a
customer relationship management system beginning in the second half of
2008.





Deposit
operations expense increased due to costs associated with the SmartyPig savings
and the Reward Me interest-bearing checking products which have both grown
substantially compared to the prior year.  West Bank’s service charges
paid have increased as a result of technological improvements in cash letter
processing that allows better availability of funds from incoming
deposits.  The improved availability results in a loss of earnings
credit used to offset the charges assessed by the processor.





Other
real estate owned expense increased due to operating costs for a higher number
of properties held.





Charitable
contributions increased in the first quarter of 2009 because $200 of the
previously mentioned bank-owned life insurance proceeds was contributed to the
West Bancorporation Foundation.  The Company does not anticipate
funding additional contribution expenses for the remainder of 2009.





Income
Tax Expense





The
Company incurred income tax expense of $420 for the quarter ended March 31,
2009, compared to $69 for the quarter ended March 31, 2008.  The
effective income tax rate as a percent of income before taxes for the three
months ended March 31, 2009 and 2008 were 12.5 percent and 4.8 percent,
respectively.  The low effective rates are the result of the
relatively high proportion of tax-exempt income, including the life insurance
proceeds, compared to lower than historical net income before taxes for both
years.  The effective tax rate for both years was also impacted by
West Bank’s 2007 investment in a qualified community development entity, which
generated a federal new market tax credit.  The credit, which totals
$2,730, is being recognized over a seven-year period.





FINANCIAL
CONDITION





Total
assets were approximately $1.6 billion as of March 31, 2009, an increase of 3.8
percent compared to December 31, 2008.  The increase was primarily due
to higher deposit levels which were held in short-term investments as of the end
of the first quarter.  A summary of changes in the components of the
balance sheet are described in the following paragraphs.





Investment
Securities





Investment
securities available for sale declined approximately $5.8 million from December
31, 2008, to $175.6 million at March 31, 2009.  The decline was
primarily the result of selectively selling agency and municipal securities to
recognize gains in the portfolio.


19





On a
quarterly basis, the investment securities portfolio is reviewed for
other-than-temporary impairment.  As of March 31, 2009, existing
pre-tax unrealized losses of $7.9 million are considered to be temporary in
nature due to market interest rate fluctuations and illiquid markets, not
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, other than the
securities discussed earlier, no other-than-temporary impairment adjustment has
been recorded as of March 31, 2009.





At March
31, 2009, the most significant risk of a future impairment charge relates to
West Bank’s investment in trust preferred securities of other
banks.  As of March 31, 2009, six trust preferred securities with an
original cost of $4.2 million were valued at $2.0 million.  In
accordance with SFAS No. 115, the decline in fair market value has been charged
against equity on an after income tax basis.  Management has concluded
these securities are not other than temporarily impaired.  Any
potential future loss that would be considered other-than-temporary impairment
would negatively impact net income and regulatory capital; however, as
previously noted the fair market value adjustment at March 31, 2009, has already
been recorded against equity.  Also, included in the investment
securities portfolio is a note issued by SLM Corporation, also know as Sallie
Mae.  The cost of the note was $4 million and the current market value
is $1.5 million.  The value of the note has been impacted by the U.S.
Government’s decision to directly originate student loans.  At this
time, management believes SLM Corporation is still profitable and should still
be able to expand its business through servicing student loans.





The
world-wide financial and credit markets are still experiencing considerable
stress due to the financial crisis and recession.  Despite substantial
government intervention, the markets remain highly
volatile.  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.





As of
March 31, 2009, the available for sale investment securities portfolio consists
of approximately 37 percent U.S. government and government agency securities, 56
percent municipal securities, 1 percent mortgage-backed securities, and 6
percent corporate and trust preferred securities.





Loans and
Non-performing Assets





Loans
outstanding increased approximately $22 million from December 31, 2008, to March
31, 2009.  The increase was primarily attributable to growth in
commercial, construction and commercial real estate loans.  Meanwhile,
multifamily and residential real estate loans declined somewhat compared to
December 31, 2008.  New loan funding in the first quarter of 2009
totaled approximately $86 million.  West Bank has fewer new loans in
process which should result in growth in the second quarter of 2009 that is
lower than the first quarter.





The
following tables show a breakdown of West Bank’s three major components of its
loan portfolio (construction, commercial real estate, and commercial) as of
March 31, 2009.





Construction
      loans:March 31, 2009$
                        
                        
                        
                        %Land
      development:1-4
      family
                        
                        $
                        8,116
                        
                        
                        
                        5
                        %Multifamily
                        
                        
                        18,714
                        
                        
                        
                        12
                        %Construction1-4
      familyOwner
      occupied
                        
                        
                        5,222
                        
                        
                        
                        3
                        %Non-owner
      occupied
                        
                        
                        32,673
                        
                        
                        
                        21
                        %Multifamily
                        
                        
                        17,681
                        
                        
                        
                        11
                        %Industrial,
      commercial and other
                        
                        
                        73,103
                        
                        
                        
                        47
                        %$
                        155,509
                        
                        
                        
                        100
                        %


20





Commercial
      Real Estate Loans:March 31, 2009$
                            
                            
                            
                            %Owner
      occupied
                            
                            $
                            194,233
                            
                            
                            
                            43
                            %Non-owner
      occupiedMedical/Retirement
                            
                            
                            63,046
                            
                            
                            
                            14
                            %Retail
                            
                            
                            53,222
                            
                            
                            
                            12
                            %Multifamily
                            
                            
                            41,291
                            
                            
                            
                            9
                            %Office
                            
                            
                            38,453
                            
                            
                            
                            8
                            %Warehouse
                            
                            
                            19,232
                            
                            
                            
                            4
                            %Hotel
                            
                            
                            11,943
                            
                            
                            
                            3
                            %Other
                            
                            
                            31,699
                            
                            
                            
                            7
                            %Total
      non-owner occupied
                            
                            
                            258,886
                            
                            
                            
                            57
                            %$
                            453,119
                            
                            
                            
                            100
                            %





Commercial
      Loans:March 31, 2009$
                          
                          
                          
                          %Finance
      and insurance
                          
                          $
                          94,160
                          
                          
                          
                          23
                          %Real
      estate and rental/leasing
                          
                          
                          57,032
                          
                          
                          
                          14
                          %Manufacturing
                          
                          
                          48,763
                          
                          
                          
                          12
                          %Publishing,
      broadcasting, and information services
                          
                          
                          29,560
                          
                          
                          
                          7
                          %Construction
                          
                          
                          18,438
                          
                          
                          
                          5
                          %Wholesale
      trade
                          
                          
                          17,548
                          
                          
                          
                          4
                          %Building
      trades
                          
                          
                          15,428
                          
                          
                          
                          4
                          %Transportation
      and warehousing
                          
                          
                          13,681
                          
                          
                          
                          3
                          %Retail
                          
                          
                          13,243
                          
                          
                          
                          3
                          %Arts,
      entertainment and recreation
                          
                          
                          10,766
                          
                          
                          
                          3
                          %Other
                          
                          
                          82,138
                          
                          
                          
                          20
                          %$
                          400,757
                          
                          
                          
                          100
                          %





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





March 31, 2009
                  
                  
                  December 31, 2008
                  
                  
                  ChangeNon-accrual
      loans
                  
                  $
                  29,988
                  
                  
                  $
                  21,367
                  
                  
                  $
                  8,621Loans
      past due 90 days and still accruing interest
                  
                  
                  569
                  
                  
                  
                  92
                  
                  
                  
                  477Restructured
      loans
                  
                  
                  7,456
                  
                  
                  
                  7,376
                  
                  
                  
                  80Total
      non-performing loans
                  
                  
                  38,013
                  
                  
                  
                  28,835
                  
                  
                  
                  9,178Other
      real estate owned
                  
                  
                  3,260
                  
                  
                  
                  4,352
                  
                  
                  
                  (1,092
                  )Non-accrual
      investment securities
                  
                  
                  2,810
                  
                  
                  
                  2,575
                  
                  
                  
                  235Total
      non-performing assets
                  
                  $
                  44,083
                  
                  
                  $
                  35,762
                  
                  
                  $
                  8,321Non-performing
      loans to total loans
                  
                  
                  3.39
                  %
                  
                  
                  2.62
                  %
                  
                  
                  0.77
                  %Non-performing
      assets to total assets
                  
                  
                  2.73
                  %
                  
                  
                  2.30
                  %
                  
                  
                  0.43
                  %


21





Total
non-performing assets have increased 23.3 percent since the end of
2008.  The balance of non-accrual loans grew $8,621 during the first
quarter of 2009 with all of the increase consisting of 1-4 family construction
and development loans as that sector of the economy continues to experience
difficulties.  If the economy does not improve in the near future it
is expected that commercial customers in various retail industries could
experience financial difficulties.





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 Notes 7 and 9 to the Financial Statements.





Deposits





Total
deposits were approximately $1.2 billion as of March 31, 2009, an increase of
3.4 percent compared to December 31, 2008 balances.  All deposit
categories except certificates of deposit increased during this time
period.  Certificates of deposit declined approximately $37 million in
the first quarter of 2009, with the majority of the change attributable to one
customer who opted to move a portion of their CDARS deposits into other
investment vehicles.





In order
to maintain and build core deposits, West Bank introduced a product called
“Reward Me Checking” in April 2008.  This product, which pays a
certificate of deposit-like rate if the customer performs a certain number of
electronic banking transactions and agrees to receive monthly statements
electronically, grew by almost $24 million in the first quarter of
2009.  West Bank is the banking partner for a savings program called
SmartyPig.  SmartyPig is an internet-based savings and rewards program
developed by SmartyPig, LLC.  As of March 31, 2009, this program had
gathered $31 million in deposits, including over $22 million in the first
quarter of 2009.





Borrowings





The
balance of federal funds purchased and securities sold under agreement to
repurchase was $110.0 million at March 31, 2009, up from $93.1 million at
December 31, 2008.  The increase was principally in federal funds
purchased, which consisted of funds sold to West Bank by approximately 15 banks
throughout Iowa as part of the correspondent bank services provided by West
Bank.  The balance of federal funds purchased from correspondent banks
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 had no
changes in composition since December 31, 2008.





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 $242 million as of March 31, 2009, compared with $197
million as of December 31, 2008.  West Bank has additional borrowing
capacity available from the FHLB of approximately $65 million.  In
addition, West Bank has $88 million in borrowing capacity available through
unsecured federal funds lines of credit with correspondent
banks.  West Bank was not drawing on any of these lines of credit as
of March 31, 2009.  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, 2009.





On
December 31, 2008, the Company received $36 million from the Treasury in
exchange for 36,000 shares of cumulative senior preferred stock and a warrant to
purchase 474,100 shares of common stock under the Capital Purchase Program
(CPP).  The senior preferred shares qualify as Tier 1 capital for
regulatory purposes and rank senior to common stock and bear a cumulative
dividend rate of five percent per annum for the first five years they are
outstanding and a rate of nine percent per annum thereafter.  The
Board of Directors and management believe it was prudent to participate in the
CPP because (i) the cost of capital under this program may be significantly
lower than the cost of capital otherwise available to the Company at this time,
and (ii) despite being well-capitalized, additional capital under this program
provides the Company and West Bank additional flexibility to meet future capital
needs that may arise in the current uncertain economic environment.





The
Company’s total stockholders’ equity increased to $151.3 million at March 31,
2009, from $150.1 million at December 31, 2008.  Total equity
increased due to the retention of earnings as year-to-date net income exceeded
dividends paid.  Total stockholders' equity was 9.39 percent and 9.66
percent of total assets as of March 31, 2009, and December 31, 2008,
respectively.  No material capital expenditures or material changes in
the capital resource mix are anticipated at this time.


22


The
Company and West Bank are subject to various regulatory capital requirements
administered by Federal and State banking agencies.  Failure to meet
minimum capital requirements can result in certain mandatory and possibly
additional discretionary actions by regulators which, if undertaken, could have
a direct material effect on the Company’s consolidated financial
statements.  Under capital adequacy guidelines and regulatory
framework for prompt corrective action, the Company and West Bank must meet
specific capital guidelines that involve quantitative measures of their assets,
liabilities, and certain off-balance-sheet items as calculated under regulatory
accounting practices.  The Company’s and West Bank’s capital amounts
and classification are also subject to qualitative judgments by the regulators
about components, risk weightings, and other factors.





The
quantitative measures of the Company and West Bank of total and Tier 1 capital
to risk-weighted assets and of Tier 1 capital to average assets are set forth in
the following table along with the minimum required
ratios.  Management believes the capital levels of the Company and
West Bank met all capital adequacy requirements to which they were subject at
March 31, 2009.  Prompt corrective action provisions are not
applicable to the Holding Company.  Management is closely monitoring
the capital ratios of the Company and West Bank to ensure they stay in
compliance with the well-capitalized guidelines.





Regulatory
                  
                  
                  Actual
      Regulatoryrequirements
      to be:
                  
                  
                  Capital
      Ratios as of:Adequately
                  
                  
                  Well-
                  
                  
                  March
      31,
                  
                  
                  December
      31,Capitalized
                  
                  
                  Capitalized
                  
                  
                  2009
                  
                  
                  2008Total
      risk-based capital as % of risk-weighted assets:Consolidated
                  
                  
                  8.0
                  %
                  
                  
                  n/a
                  
                  
                  
                  13.5
                  %
                  
                  
                  13.3
                  %West
      Bank
                  
                  
                  8.0
                  %
                  
                  
                  10.0
                  %
                  
                  
                  13.3
                  %
                  
                  
                  13.1
                  %Tier
      1 capital as % of risk-weighted assets:Consolidated
                  
                  
                  4.0
                  %
                  
                  
                  n/a
                  
                  
                  
                  12.3
                  %
                  
                  
                  12.1
                  %West
      Bank
                  
                  
                  4.0
                  %
                  
                  
                  6.0
                  %
                  
                  
                  11.2
                  %
                  
                  
                  11.0
                  %Tier
      1 capital as % of average assets:Consolidated
                  
                  
                  4.0
                  %
                  
                  
                  n/a
                  
                  
                  
                  9.7
                  %
                  
                  
                  10.3
                  %West
      Bank
                  
                  
                  4.0
                  %
                  
                  
                  5.0
                  %
                  
                  
                  8.9
                  %
                  
                  
                  9.4
                  %





In April
2008, the Company’s Board of Directors authorized the buyback of up to $5
million of the Company’s common stock for a period of twelve
months.  No shares were repurchased under this authorization which has
expired.





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 6, 2009, and is incorporated herein by reference.  The
Company has not experienced any material changes to its market risk position
since December 31, 2008.  Management does not believe the Company's
primary market risk exposures and how those exposures were managed in the first
three months of 2009 changed when compared to 2008.





Effects
of New Statements of Financial Accounting Standards





In April
2009, the FASB issued the following new accounting standards:





i.)
            FASB
      Staff Position FAS 157−4, Determining Whether a Market
      Is Not Active and a Transaction Is Not Distressed,provides
      guidelines for making fair value measurements more consistent with the
      principles presented in SFAS 157.  FSP FAS 157−4 provides
      additional authoritative guidance in determining whether a market is
      active or inactive, and whether a transaction is
      distressed.  This FSP is applicable to all assets and
      liabilities (i.e. financial and nonfinancial) and will require enhanced
      disclosures.


ii.)
            FASB
      Staff Position FAS 115−2 and FAS 124−2, Recognition and Presentation
      of Other−Than−Temporary Impairments, provides additional guidance
      to provide greater clarity about the credit and noncredit component of an
      other−than−temporary impairment event and to more effectively communicate
      when an other−than−temporary impairment event has occurred. This FSP
      applies to debt securities.


23





iii.)
            FASB
      Staff Position FAS 107−1 and APB 28−1, Interim Disclosures about Fair
      Value of Financial Instruments, amends FASB Statement No. 107,
      Disclosures about Fair
      Value of Financial Instruments, to require disclosures about fair
      value of financial instruments in interim as well as in annual financial
      statements.  This FSP also amends APB Opinion No. 28, Interim Financial
      Reporting, to require those disclosures in all interim financial
      statements.





These
statements are effective for periods ending after June 15, 2009, with early
adoption permitted for periods ending after March 15, 2009.  The
Company has elected to adopt these statements effective for the quarter ending
June 30, 2009.  The Company is currently evaluating the impact that
the adoption of these Statements will have on its financial position and results
of operations.





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.





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 6, 2009.  However, management believes
the current economic environment continues to remain uncertain.





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





There
were no purchases of the Company’s common shares during the first quarter of
2009 under the $5 million stock buy-back plan approved by the Board of Directors
on April 16, 2008, which expired on April 15, 2009.


24





Item
6.  Exhibits





The
following exhibits are filed as part of this report:





Exhibits
                
                Description3.1
                
                Restated
      Articles of Incorporation of the Company (incorporated herein by
      reference to Exhibit 3.1 filed with the Form 10 on March 11,
      2002.)3.2
                
                Articles
      of Amendment to the Restated Articles of Incorporation filed with the
      Secretary of State on December 24, 2008 (incorporated herein by
      reference to Exhibit 3.1 filed with the Form 8-K on December 31,
      2008.)3.3
                
                Articles
      of Amendment to the Restated Articles of Incorporation filed with the Iowa
      Secretary of State on December 24, 2008, designating the terms of Fixed
      Rate Cumulative Perpetual Preferred Stock, Series A (incorporated herein by
      reference to Exhibit 3.2 filed with the Form 8-K on December 31,
      2008.)3.4
                
                Bylaws
      of the Company as amended through October 17, 2007 (incorporated herein by
      reference to Exhibit 4.1 filed with the Form S-3 on January 30,
      2009.)4.1
                
                Warrant
      for Purchase of Shares of Common Stock (incorporate herein by
      reference to Exhibit 4.1 filed with the Form 8-K on December 31,
      2008.)4.2
                
                Letter
      Agreement, dated December 31, 2008, between the Company and the UST, which
      includes the Securities Purchase Agreement attached hereto, with respect
      to the issuance and sale of the Preferred Stock and the Warrant (incorporated herein by
      reference to Exhibit 10.1 filed with the Form 8-K on December 31,
      2008.)10.1
                
                Lease
      for Main Bank Facility(incorporated herein by
      reference to Exhibit 10.1 filed with the Form 10 on March 11,
      2002.)10.2
                
                Supplemental
      Agreement to Lease for Main Bank Facility (incorporated herein by
      reference to Exhibit 10.2 filed with the Form 10 on March 11,
      2002.)10.3
                
                Short-term
      Lease related to Main Bank Facility (incorporated herein by
      reference to Exhibit 10.3 filed with the Form 10 on March 11,
      2002.)10.4
                
                Assignment
      (incorporated herein by
      reference to Exhibit 10.4 filed with the Form 10 on March 11,
      2002.)10.5
                
                Lease
      Modification Agreement No. 1 for Main Bank Facility (incorporated herein by
      reference to Exhibit 10.5 filed with the Form 10 on March 11,
      2002.)10.6
                
                Memorandum
      of Real Estate Contract (incorporated herein by
      reference to Exhibit 10.6 filed with the Form 10 on March 11,
      2002.)10.7
                
                Affidavit
      (incorporated herein by
      reference to Exhibit 10.7 filed with the Form 10 on March 11,
      2002.)10.8
                
                Addendum
      to Lease for Main Bank Facility (incorporated herein by
      reference to Exhibit 10.8 filed with the Form 10 on March 11,
      2002.)10.9
                
                Data
      Processing Contract (incorporated herein by
      reference to Exhibit 10.9 filed with the Form 10 on March 11,
      2002.)10.10*
                
                Employment
      Contract (incorporated
      herein by reference to Exhibit 10.10 filed with the Form 10 on March 11,
      2002.)10.11
                
                Data
      Processing Contract Amendment (incorporated herein by
      reference to Exhibit 10.12 filed with the Form 10-K on March 26,
      2003.)10.12
                
                The
      Employee Savings and Stock Ownership Plan, as amended (incorporated herein by
      reference to Exhibit 4.1 filed with the Form S-8 on October 29,
      2004.)10.13
                
                Amendment
      to Lease Agreement (incorporated herein by
      reference to Exhibit 10.16 filed with the Form 10-K on March 3,
      2005.)10.14*
                
                Employment
      Agreement with Scott D. Eltjes (incorporated herein by
      reference to Exhibit 10.17 filed with the Form 10-K on March 3,
      2005.)10.15
                
                Consulting
      Agreement with David L. Miller (incorporated herein by
      reference to Exhibit 10.18 filed with the Form 10-Q on May 6,
      2005.)10.16*
                
                West
      Bancorporation, Inc. Restricted Stock Compensation Plan (incorporated herein by
      reference to Exhibit B of the definitive proxy statement 14A filed on
      March 10, 2005.)10.17*
                
                Employment
      Agreement between Investors Management Group Ltd. and Jeff Lorenzen (incorporated herein by
      reference to Exhibit 99 filed with the Form 8-K on February 22,
      2006.)10.18
                
                Assignment
      and Assumption of Lease and Consent to Assignment (incorporated herein by
      reference to Exhibit 10.21 filed with the Form 10-K on March 8,
      2006.)10.19
                
                2007
      Amendment to Lease Agreement (incorporated herein by
      reference to Exhibit 10.22 filed with the Form 10-Q on May 4,
      2007.)10.20*
                
                Employment
      Agreement with Thomas E. Stanberry (incorporated herein by
      reference to Exhibit 10.24 filed with the Form 8-K on May 23,
      2008.)10.21*
                
                Employment
      Agreement with Douglas R. Gulling (incorporated herein by
      reference to Exhibit 10.25 filed with the Form 8-K on May 23,
      2008.)


25





10.22*
                
                Employment
      Agreement with Brad L. Winterbottom (incorporated herein by
      reference to Exhibit 10.26 filed with the Form 8-K on May 23,
      2008.)10.23
                
                Data
      Processing Contract Amendment (incorporated herein by
      reference to Exhibit 10.23 filed with the Form 10-Q on October 30,
      2008).12
                
                Computation
      of Ratios of Earnings to Fixed Charges and Preferred
    Dividends31.1
                
                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





*
      Indicates management contract or compensatory plan or
      arrangement.


26





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)





April 29, 2009
                    By:
                    /s/ Thomas E. StanberryDate
                    Thomas E. StanberryChairman, President and Chief Executive OfficerApril 29, 2009
                    By:
                    /s/ Douglas R. GullingDate
                    Douglas R. GullingExecutive Vice President and Chief Financial Officer(Principal Accounting Officer)


27





EXHIBIT
INDEX





The
following exhibits are filed herewith:





Exhibit No.
                      
                      Description
                      
                      Page Number12
                      
                      Ratios
      of Earnings to Fixed Charges and Preferred Dividends
                      
                      2931.1
                      
                      Certification
      of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of
      2002
                      
                      3031.2
                      
                      Certification
      of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of
      2002
                      
                      3132.1
                      
                      Certification
      of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as
      Adopted
                      
                      32Pursuant
      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
                      
                      33Pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002


28