----

----

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

|   | or |
|--------|----|

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

|   | Commission File Number:  0-49677 |
|--------|--------------------------------------------|

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

| Large accelerated filer | o | Accelerated filer         | x |
|-------------------------|---|---------------------------|---|
| Non-accelerated filer   | o | Smaller reporting company | o |

----

IN

|     |                                                                                                             | Page Number |
|----------|------------------------------------------------------------------------------------------------------------------|-------------|
|     |                                                                                                             |        |
| PART I.  | FINANCIAL INFORMATION                                                                                            |        |
|     |                                                                                                             |        |
| Item 1.  | Consolidated Financial Statements (Unaudited)                                                                    |  3     |
|     |                                                                                                             |        |
|     | Consolidated Balance Sheets at June 30, 2010, and December 31, 2009                                              |  3     |
|     |                                                                                                             |        |
|     | Consolidated Statements of Operations for the three and six months ended June 30, 2010 and 2009                  |  4     |
|     |                                                                                                             |        |
|     | Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2010 and 2009 |  6     |
|     |                                                                                                             |        |
|     | Consolidated Statements of Stockholders’ Equity for the six months ended June 30, 2010 and 2009            |  7     |
|     |                                                                                                             |        |
|     | Consolidated Statements of Cash Flows for the six months ended June 30, 2010 and 2009                            |  8     |
|     |                                                                                                             |        |
|     | Notes to the Consolidated Financial Statements                                                                   | 10          |
|     |                                                                                                             |        |
| Item 2.  | Management's Discussion and Analysis of Financial Condition and Results of Operations                            | 24          |
|     |                                                                                                             |        |
| Item 3.  | Quantitative and Qualitative Disclosures about Market Risk                                                       | 40          |
|     |                                                                                                             |        |
| Item 4.  | Controls and Procedures                                                                                          | 41          |
|     |                                                                                                             |        |
| PART II. | OTHER INFORMATION                                                                                                |        |
|     |                                                                                                             |        |
| Item 1.  | Legal Proceedings                                                                                                | 41          |
|     |                                                                                                             |        |
| Item 1A. | Risk Factors                                                                                                     | 41          |
|     |                                                                                                             |        |
| Item 6.  | Exhibits                                                                                                         | 42          |
|     |                                                                                                             |        |
|     | Signatures                                                                                                       | 43          |
|     |                                                                                                             |        |
|     | Index to Exhibits                                                                                                | 44          |

----

Index

PART

It

| West Bancorporation, Inc. and Subsidiary                                                                                                                                                                                                                                                       |   |          |      |   |              |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|-----------|--------|-------------------|--------|
| Consolidated Balance Sheets                                                                                                                                                                                                                                                                    |   |          |      |   |              |   |
| (unaudited)                                                                                                                                                                                                                                                                                    |   |          |      |   |              |   |
|                                                                                                                                                                                                                                                                                           |   |          |      |   |              |   |
| (in thousands, except per share data)                                                                                                                                                                                                                                                          |   | June 30, 2010 |      |   | December 31, 2009 |   |
| ASSETS                                                                                                                                                                                                                                                                                         |   |          |      |   |              |   |
| Cash and due from banks                                                                                                                                                                                                                                                                        |   | $             | 26,596    |   |              | $      | 27,923 |   |
| Federal funds sold and other short-term investments                                                                                                                                                                                                                                            |   |          | 257,277   |   |              |   | 103,572 |   |
| Cash and cash equivalents                                                                                                                                                                                                                                                                      |   |          | 283,873   |   |              |   | 131,495 |   |
| Securities available for sale                                                                                                                                                                                                                                                                  |   |          | 287,812   |   |              |   | 340,478 |   |
| Federal Home Loan Bank stock, at cost                                                                                                                                                                                                                                                          |   |          | 10,597    |   |              |   | 10,791 |   |
| Loans held for sale                                                                                                                                                                                                                                                                            |   |          | 1,041     |   |              |   | 332 |   |
| Loans                                                                                                                                                                                                                                                                                          |   |          | 961,221   |   |              |   | 1,020,710 |   |
| Allowance for loan losses                                                                                                                                                                                                                                                                      |   |          | (21,091   | )      |              |   | (19,126 | ) |
| Loans, net                                                                                                                                                                                                                                                                                     |   |          | 940,130   |   |              |   | 1,001,584 |   |
| Premises and equipment, net                                                                                                                                                                                                                                                                    |   |          | 5,288     |   |              |   | 5,290 |   |
| Accrued interest receivable                                                                                                                                                                                                                                                                    |   |          | 5,406     |   |              |   | 5,502 |   |
| Bank-owned life insurance                                                                                                                                                                                                                                                                      |   |          | 25,844    |   |              |   | 25,400 |   |
| Other real estate owned                                                                                                                                                                                                                                                                        |   |          | 24,637    |   |              |   | 25,350 |   |
| Deferred tax assets                                                                                                                                                                                                                                                                            |   |          | 11,840    |   |              |   | 12,823 |   |
| Other assets                                                                                                                                                                                                                                                                                   |   |          | 12,409    |   |              |   | 16,009 |   |
| Total assets                                                                                                                                                                                                                                                                                   |   | $             | 1,608,877 |   |              | $      | 1,575,054 |   |
|                                                                                                                                                                                                                                                                                           |   |          |      |   |              |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                                                                                                           |   |          |      |   |              |   |   |   |
| LIABILITIES                                                                                                                                                                                                                                                                                    |   |          |      |   |              |   |   |   |
| Deposits:                                                                                                                                                                                                                                                                                      |   |          |      |   |              |   |   |   |
|         Noninterest-bearing demand                                                                                                                                                                                                                          |   | $             | 208,960   |   |              | $      | 206,412 |   |
|         Interest-bearing demand                                                                                                                                                                                                                             |   |          | 165,699   |   |              |   | 162,305 |   |
|         Savings                                                                                                                                                                                                                                             |   |          | 429,638   |   |              |   | 442,137 |   |
|         Time of $100,000 or more                                                                                                                                                                                                                            |   |          | 350,676   |   |              |   | 271,145 |   |
|         Other time                                                                                                                                                                                                                                          |   |          | 120,414   |   |              |   | 164,618 |   |
| Total deposits                                                                                                                                                                                                                                                                                 |   |          | 1,275,387 |   |              |   | 1,246,617 |   |
|                                                                                                                                                                                                                                                                                           |   |          |      |   |              |   |   |   |
| Federal funds purchased and securities sold under agreements to repurchase                                                                                                                                                                                                                     |   |          | 58,982    |   |              |   | 40,342 |   |
| Other short-term borrowings                                                                                                                                                                                                                                                                    |   |          | 1,808     |   |              |   | 2,553 |   |
| Subordinated notes                                                                                                                                                                                                                                                                             |   |          | 20,619    |   |              |   | 20,619 |   |
| Federal Home Loan Bank advances                                                                                                                                                                                                                                                                |   |          | 105,000   |   |              |   | 125,000 |   |
| Accrued expenses and other liabilities                                                                                                                                                                                                                                                         |   |          | 7,057     |   |              |   | 6,864 |   |
| Total liabilities                                                                                                                                                                                                                                                                              |   |          | 1,468,853 |   |              |   | 1,441,995 |   |
|                                                                                                                                                                                                                                                                                           |   |          |      |   |              |   |   |   |
| STOCKHOLDERS' EQUITY                                                                                                                                                                                                                                                                           |   |          |      |   |              |   |   |   |
| Preferred 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 June 30, 2010, and December 31, 2009 |   |          | 34,265    |   |              |   | 34,024 |   |
| Common stock, no par value; authorized 50,000,000 shares; 17,403,882        shares issued and outstanding at June 30, 2010, and December 31, 2009                                                                                                      |   |          | 3,000     |   |              |   | 3,000 |   |
| Additional paid-in capital                                                                                                                                                                                                                                                                     |   |          | 34,387    |   |              |   | 34,387 |   |
| Retained earnings                                                                                                                                                                                                                                                                              |   |          | 70,760    |   |              |   | 65,959 |   |
| Accumulated other comprehensive loss                                                                                                                                                                                                                                                           |   |          | (2,388    | )      |              |   | (4,311 | ) |
| Total stockholders' equity                                                                                                                                                                                                                                                                     |   |          | 140,024   |   |              |   | 133,059 |   |
| Total liabilities and stockholders' equity                                                                                                                                                                                                                                                     |   | $             | 1,608,877 |   |              | $      | 1,575,054 |   |

----

Index

| West Bancorporation, Inc. and Subsidiary                                                                                   |   |                        |   |   |                      |   |   |   |   |   |   |   |
|----------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|--------|--------|---------------------------|--------|--------|--------|--------|--------|--------|--------|
| Consolidated Statements of Operations                                                                                      |   |                        |   |   |                      |   |   |   |   |   |   |   |
| (unaudited)                                                                                                                |   |                        |   |   |                      |   |   |   |   |   |   |   |
|                                                                                                                       |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
| (in thousands, except per share data)                                                                                      |   | 2010                        |   |   | 2009                      |   |   | 2010   |   |   | 2009   |   |
| Interest income:                                                                                                           |   |                        |   |   |                      |   |   |   |   |   |   |   |
|         Loans, including fees                                                           |   | $                           | 13,525 |   |                      | $      | 15,102 |   |   | $      | 27,231 |   |   | $ | 30,124 |   |
| Securities:                                                                                                                |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
|    U.S. Treasury, government agencies and corporations                                                           |   |                        | 723    |   |                      |   | 607    |   |   |   | 1,468  |   |   |   | 1,219 |   |
|    States and political subdivisions                                                                             |   |                        | 851    |   |                      |   | 1,120  |   |   |   | 1,740  |   |   |   | 2,220 |   |
|    Corporate notes and other investments                                                                         |   |                        | 402    |   |                      |   | 234    |   |   |   | 744    |   |   |   | 359 |   |
| Federal funds sold and other short-term investments                                                                        |   |                        | 183    |   |                      |   | 208    |   |   |   | 330    |   |   |   | 311 |   |
| Total interest income                                                                                                      |   |                        | 15,684 |   |                      |   | 17,271 |   |   |   | 31,513 |   |   |   | 34,233 |   |
| Interest expense:                                                                                                          |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
|         Demand deposits                                                            |   |                        | 628    |   |                      |   | 671    |   |   |   | 1,224  |   |   |   | 1,148 |   |
|         Savings deposits                                                                |   |                        | 1,433  |   |                      |   | 1,147  |   |   |   | 2,974  |   |   |   | 1,531 |   |
|         Time deposits                                                              |   |                        | 1,912  |   |                      |   | 3,487  |   |   |   | 3,815  |   |   |   | 7,891 |   |
|         Federal funds purchased and securities sold under agreements to repurchase |   |                        | 62     |   |                      |   | 84     |   |   |   | 118    |   |   |   | 175 |   |
|         Subordinated notes                                                              |   |                        | 367    |   |                      |   | 367    |   |   |   | 730    |   |   |   | 730 |   |
|         Long-term borrowings                                                            |   |                        | 1,019  |   |                      |   | 1,320  |   |   |   | 2,255  |   |   |   | 2,626 |   |
| Total interest expense                                                                                                     |   |                        | 5,421  |   |                      |   | 7,076  |   |   |   | 11,116 |   |   |   | 14,101 |   |
| Net interest income                                                                                                        |   |                        | 10,263 |   |                      |   | 10,195 |   |   |   | 20,397 |   |   |   | 20,132 |   |
| Provision for loan losses                                                                                                  |   |                        | 1,400  |   |                      |   | 15,000 |   |   |   | 3,400  |   |   |   | 18,500 |   |
| Net interest income after provision for loan losses                                                                        |   |                        | 8,863  |   |                      |   | (4,805 | )      |   |   | 16,997 |   |   |   | 1,632 |   |
| Noninterest income:                                                                                                        |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
|         Service charges on deposit accounts                                             |   |                        | 820    |   |                      |   | 1,073  |   |   |   | 1,658  |   |   |   | 2,042 |   |
|         Debit card usage fees                                                           |   |                        | 348    |   |                      |   | 281    |   |   |   | 656    |   |   |   | 529 |   |
|         Service fee from SmartyPig, LLC                                            |   |                        | 794    |   |                      |   | -      |   |   |   | 1,061  |   |   |   | - |   |
|         Trust services                                                                  |   |                        | 198    |   |                      |   | 179    |   |   |   | 406    |   |   |   | 359 |   |
|         Gains and fees on sales of residential mortgages                                |   |                        | 286    |   |                      |   | 237    |   |   |   | 473    |   |   |   | 535 |   |
|         Increase in cash value of bank-owned life insurance                             |   |                        | 226    |   |                      |   | 181    |   |   |   | 444    |   |   |   | 363 |   |
|         Gain from bank-owned life insurance                                             |   |                        | -      |   |                      |   | -      |   |   |   | -      |   |   |   | 840 |   |
|         Other income                                                                    |   |                        | 247    |   |                      |   | 246    |   |   |   | 493    |   |   |   | 502 |   |
| Total noninterest income                                                                                                   |   |                        | 2,919  |   |                      |   | 2,197  |   |   |   | 5,191  |   |   |   | 5,170 |   |
| Investment securities gains (losses), net:                                                                                 |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
|         Total other than temporary impairment losses                                    |   |                        | (188   | )      |                      |   | (1,013 | )      |   |   | (188   | )      |   |   | (2,428 | ) |
|         Portion of loss recognized in other comprehensive income (loss) before taxes    |   |                        | -      |   |                      |   | 738    |   |   |   | -      |   |   |   | 738 |   |
|         Net impairment losses recognized in earnings                                    |   |                        | (188   | )      |                      |   | (275   | )      |   |   | (188   | )      |   |   | (1,690 | ) |
|         Realized securities gains (losses), net                                         |   |                        | (9     | )      |                      |   | -      |   |   |   | 37     |   |   |   | 1,453 |   |
| Investment securities gains (losses), net                                                                                  |   |                        | (197   | )      |                      |   | (275   | )      |   |   | (151   | )      |   |   | (237 | ) |
| Noninterest expense:                                                                                                       |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
|         Salaries and employee benefits                                                  |   |                        | 2,775  |   |                      |   | 2,473  |   |   |   | 5,367  |   |   |   | 5,200 |   |
|         Occupancy                                                                       |   |                        | 796    |   |                      |   | 1,028  |   |   |   | 1,597  |   |   |   | 1,843 |   |
|         Data processing                                                            |   |                        | 469    |   |                      |   | 447    |   |   |   | 902    |   |   |   | 857 |   |
|         FDIC insurance expense                                                     |   |                        | 883    |   |                      |   | 1,283  |   |   |   | 1,445  |   |   |   | 1,736 |   |
|         Other real estate owned expense                                                 |   |                        | 550    |   |                      |   | 90     |   |   |   | 660    |   |   |   | 125 |   |
|         Professional fees                                                               |   |                        | 226    |   |                      |   | 229    |   |   |   | 474    |   |   |   | 491 |   |
|         Miscellaneous losses                                                            |   |                        | 921    |   |                      |   | 18     |   |   |   | 988    |   |   |   | 32 |   |
|         Goodwill impairment                                                             |   |                        | -      |   |                      |   | 13,376 |   |   |   | -      |   |   |   | 13,376 |   |
|         Other expenses                                                                  |   |                        | 1,146  |   |                      |   | 1,260  |   |   |   | 2,329  |   |   |   | 2,638 |   |
| Total noninterest expense                                                                                                  |   |                        | 7,766  |   |                      |   | 20,204 |   |   |   | 13,762 |   |   |   | 26,298 |   |

----

Index

| West Bancorporation, Inc. and Subsidiary                                                                                        |   |                        |   |   |                      |   |    |   |   |   |   |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|--------|--------|---------------------------|--------|---------|--------|--------|--------|--------|--------|
| Consolidated Statements of Operations (continued)                                                                               |   |                        |   |   |                      |   |    |   |   |   |   |   |
| (unaudited)                                                                                                                     |   |                        |   |   |                      |   |    |   |   |   |   |   |
|                                                                                                                            |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
| (in thousands, except per share data)                                                                                           |   | 2010                        |   |   | 2009                      |   |    | 2010   |   |   | 2009   |   |
| Income (loss) before income taxes                                                                                               |   |                        | 3,819  |   |                      |   | (23,087 | )      |   |   | 8,275  |   |   |   | (19,733 | ) |
| Income taxes (benefits)                                                                                                         |   |                        | 1,216  |   |                      |   | (9,344  | )      |   |   | 2,333  |   |   |   | (8,927 | ) |
| Income (loss) from continuing operations                                                                                        |   |                        | 2,603  |   |                      |   | (13,743 | )      |   |   | 5,942  |   |   |   | (10,806 | ) |
| Discontinued operations:                                                                                                        |   |                        |   |   |                      |   |    |   |   |   |   |   |   |   |   |   |
|         Loss from discontinued operations before income taxes                                |   |                        | -      |   |                      |   | (9,353  | )      |   |   | -      |   |   |   | (9,346 | ) |
|         Income tax benefits                                                                  |   |                        | -      |   |                      |   | (817    | )      |   |   | -      |   |   |   | (814 | ) |
| Loss from discontinued operations                                                                                               |   |                        | -      |   |                      |   | (8,536  | )      |   |   | -      |   |   |   | (8,532 | ) |
| Net income (loss)                                                                                                               |   |                        | 2,603  |   |                      |   | (22,279 | )      |   |   | 5,942  |   |   |   | (19,338 | ) |
| Preferred stock dividends and accretion of discount                                                                             |   |                        | (572   | )      |                      |   | (570    | )      |   |   | (1,141 | )      |   |   | (1,137 | ) |
| Net income (loss) available to common stockholders                                                                              |   | $                           | 2,031  |   |                      | $      | (22,849 | )      |   | $      | 4,801  |   |   | $ | (20,475 | ) |
|                                                                                                                            |   |                        |   |   |                      |   |    |   |   |   |   |   |   |   |   |   |
| Earnings (loss) per common share:                                                                                               |   |                        |   |   |                      |   |    |   |   |   |   |   |   |   |   |   |
|         Basic and diluted earnings (loss) per common share from continuing operations        |   | $                           | 0.12   |   |                      | $      | (0.83   | )      |   | $      | 0.28   |   |   | $ | (0.69 | ) |
|         Basic and diluted earnings (loss) per common share from discontinued operations |   | $                           | -      |   |                      | $      | (0.49   | )      |   | $      | -      |   |   | $ | (0.49 | ) |
|         Basic and diluted earnings (loss) per common share                                   |   | $                           | 0.12   |   |                      | $      | (1.32   | )      |   | $      | 0.28   |   |   | $ | (1.18 | ) |
| Cash dividends per common share                                                                                                 |   | $                           | -      |   |                      | $      | 0.01    |   |   | $      | -      |   |   | $ | 0.09 |   |

----

Index

| West Bancorporation, Inc. and Subsidiary                                                                                                                                                                                                       |   |                        |   |   |                      |   |    |   |   |   |   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|--------|--------|---------------------------|--------|---------|--------|--------|--------|--------|--------|
| Consolidated Statements of Comprehensive Income (Loss)                                                                                                                                                                                         |   |                        |   |   |                      |   |    |   |   |   |   |   |
| (unaudited)                                                                                                                                                                                                                                    |   |                        |   |   |                      |   |    |   |   |   |   |   |
|                                                                                                                                                                                                                                           |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
| (in thousands, except per share data)                                                                                                                                                                                                          |   | 2010                        |   |   | 2009                      |   |    | 2010   |   |   | 2009   |   |
| Net income (loss)                                                                                                                                                                                                                              |   | $                           | 2,603  |   |                      | $      | (22,279 | )      |   | $      | 5,942  |   |   | $ | (19,338 | ) |
| Other comprehensive income (loss):                                                                                                                                                                                                             |   |                        |   |   |                      |   |    |   |   |   |   |   |   |   |   |   |
|         Securities for which a portion of an other than     temporary impairment has been recorded in earnings:                                                                         |   |                        |   |   |                      |   |    |   |   |   |   |   |   |   |   |   |
|                  Unrealized holding gains (losses) arising during the period                                                                                   |   |                        | 67     |   |                      |   | (1,013  | )      |   |   | 86     |   |   |   | (1,013 | ) |
|                  Loss recognized in earnings                                                                                                                   |   |                        | -      |   |                      |   | 275     |   |   |   | -      |   |   |   | 275 |   |
|                  Net unrealized gains (losses) on securities with other than        temporary impairment before tax benefit |   |                        | 67     |   |                      |   | (738    | )      |   |   | 86     |   |   |   | (738 | ) |
|         Tax (expense) benefit                                                                                                                                                                               |   |                        | (26    | )      |                      |   | 280     |   |   |   | (33    | )      |   |   | 280 |   |
| Net unrealized gains (losses) on securities with        other than temporary impairment, net of tax, in other        comprehensive income (loss)                         |   |                        | 41     |   |                      |   | (458    | )      |   |   | 53     |   |   |   | (458 | ) |
|         Other securities:                                                                                                                                                                                   |   |                        |   |   |                      |   |    |   |   |   |   |   |   |   |   |   |
|                  Unrealized holding gains arising during the period                                                                                            |   |                        | 1,183  |   |                      |   | 1,138   |   |   |   | 2,865  |   |   |   | 1,542 |   |
|                  Realized net (gains) losses recognized into net income                                                                                        |   |                        | 9      |   |                      |   | -       |   |   |   | (37    | )      |   |   | (1,453 | ) |
|                  Realized impairment losses reclassified into net income                                                                                       |   |                        | 188    |   |                      |   | -       |   |   |   | 188    |   |   |   | 1,415 |   |
|                  Net unrealized gains on other securities before tax expense                                                                              |   |                        | 1,380  |   |                      |   | 1,138   |   |   |   | 3,016  |   |   |   | 1,504 |   |
|         Tax expense                                                                                                                                                                                         |   |                        | (524   | )      |                      |   | (433    | )      |   |   | (1,146 | )      |   |   | (572 | ) |
| Net unrealized gains on other securities, net of tax,        in other comprehensive income (loss)                                                                                                           |   |                        | 856    |   |                      |   | 705     |   |   |   | 1,870  |   |   |   | 932 |   |
| Other comprehensive income (loss)                                                                                                                                                                                                              |   | $                           | 3,500  |   |                      | $      | (22,032 | )      |   | $      | 7,865  |   |   | $ | (18,864 | ) |

----

Index

| West Bancorporation, Inc. and Subsidiary                                                                                                |   |           |   |   |        |   |   |                     |   |   |             |   |   |                                       |    |   |   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|--------|-------------|--------|--------|--------------------------|--------|--------|------------------|--------|--------|--------------------------------------------|---------|--------|--------|--------|
| Consolidated Statements of Stockholders’ Equity                                                                                   |   |           |   |   |        |   |   |                     |   |   |             |   |   |                                       |    |   |   |   |
| (unaudited)                                                                                                                             |   |           |   |   |        |   |   |                     |   |   |             |   |   |                                       |    |   |   |   |
|                                                                                                                                    |   |           |   |   |        |   |   |                     |   |   |             |   |   |                                       |    |   |   |   |
| (in thousands, except per share data)                                                                                                   |   | PreferredStock |   |   | CommonStock |   |   | AdditionalPaid-InCapital |   |   | RetainedEarnings |   |   | AccumulatedOtherComprehensiveIncome (Loss) |    |   | Total  |   |
| Balance, January 1, 2009                                                                                                                |   | $              | 33,548 |   |        | $      | 3,000  |                     |   | $      | 34,452           |   |   | $                                          | 82,793  |   |   | $      | (3,730 | ) |   | $ | 150,063 |   |
| Cumulative effect accounting adjustment, net of tax (1)                                                                                 |   |           | -      |   |        |   | -      |                     |   |   | -                |   |   |                                       | 1,625   |   |   |   | (1,625 | ) |   |   | - |   |
| Net (loss)                                                                                                                              |   |           | -      |   |        |   | -      |                     |   |   | -                |   |   |                                       | (19,338 | )      |   |   | - |   |   |   | (19,338 | ) |
| Other comprehensive income, unrealized gains on     securities, net of reclassification adjustment, net of tax |   |           | -      |   |        |   | -      |                     |   |   | -                |   |   |                                       | -       |   |   |   | 474 |   |   |   | 474 |   |
| Preferred stock discount accretion                                                                                                      |   |           | 237    |   |        |   | -      |                     |   |   | -                |   |   |                                       | (237    | )      |   |   | - |   |   |   | - |   |
| Preferred stock issuance costs                                                                                                          |   |           | -      |   |        |   | -      |                     |   |   | (65              | )      |   |                                       | -       |   |   |   | - |   |   |   | (65 | ) |
| Cash dividends declared, $0.09 per common share                                                                                         |   |           | -      |   |        |   | -      |                     |   |   | -                |   |   |                                       | (1,566  | )      |   |   | - |   |   |   | (1,566 | ) |
| Preferred stock dividends declared                                                                                                      |   |           | -      |   |        |   | -      |                     |   |   | -                |   |   |                                       | (900    | )      |   |   | - |   |   |   | (900 | ) |
| Balance, June 30, 2009                                                                                                                  |   | $              | 33,785 |   |        | $      | 3,000  |                     |   | $      | 34,387           |   |   | $                                          | 62,377  |   |   | $      | (4,881 | ) |   | $ | 128,668 |   |
|                                                                                                                                    |   |           |   |   |        |   |   |                     |   |   |             |   |   |                                       |    |   |   |   |   |   |   |   |   |   |
| Balance, January 1, 2010                                                                                                                |   | $              | 34,024 |   |        | $      | 3,000  |                     |   | $      | 34,387           |   |   | $                                          | 65,959  |   |   | $      | (4,311 | ) |   | $ | 133,059 |   |
| Net income                                                                                                                              |   |           | -      |   |        |   | -      |                     |   |   | -                |   |   |                                       | 5,942   |   |   |   | - |   |   |   | 5,942 |   |
| Other comprehensive income, unrealized gains on     securities, net of reclassification adjustment, net of tax |   |           | -      |   |        |   | -      |                     |   |   | -                |   |   |                                       | -       |   |   |   | 1,923 |   |   |   | 1,923 |   |
| Preferred stock discount accretion                                                                                                      |   |           | 241    |   |        |   | -      |                     |   |   | -                |   |   |                                       | (241    | )      |   |   | - |   |   |   | - |   |
| Preferred stock dividends declared                                                                                                      |   |           | -      |   |        |   | -      |                     |   |   | -                |   |   |                                       | (900    | )      |   |   | - |   |   |   | (900 | ) |
| Balance, June 30, 2010                                                                                                                  |   | $              | 34,265 |   |        | $      | 3,000  |                     |   | $      | 34,387           |   |   | $                                          | 70,760  |   |   | $      | (2,388 | ) |   | $ | 140,024 |   |

| (1)   | Represents reclassifications of noncredit-related components of previously recorded other than temporary losses pursuant to the adoption of FSP 115-2 and 124-2, Recognition and Presentation of Other Than Temporary Impairments, now included as part of FASB ASC Topic 320 Investments--Debt and Equity Securities. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

| West Bancorporation, Inc. and Subsidiary                                                                   |   |                      |     |   |   |   |
|------------------------------------------------------------------------------------------------------------|--------|---------------------------|----------|--------|--------|--------|
| Consolidated Statements of Cash Flows                                                                      |   |                      |     |   |   |   |
| (unaudited)                                                                                                |   |                      |     |   |   |   |
|                                                                                                       |   | Six Months Ended June 30, |     |
| (in thousands)                                                                                             |   | 2010                      |     |   | 2009   |   |
| Cash Flows from Operating Activities:                                                                      |   |                      |     |   |   |   |
| Net income (loss)                                                                                          |   | $                         | 5,942    |   |   | $      | (19,338 | ) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities:                   |   |                      |     |   |   |   |   |   |
| Provision for loan losses                                                                                  |   |                      | 3,400    |   |   |   | 18,500 |   |
| Goodwill impairment                                                                                        |   |                      | -        |   |   |   | 13,376 |   |
| Goodwill impairment of discontinued operations                                                             |   |                      | -        |   |   |   | 9,660 |   |
| Net amortization and accretion                                                                             |   |                      | 533      |   |   |   | 285 |   |
| (Gain) loss on disposition of premises and equipment                                                       |   |                      | (7       | )      |   |   | 3 |   |
| Securities gains, net                                                                                      |   |                      | (37      | )      |   |   | (1,453 | ) |
| Investment securities impairment losses                                                                    |   |                      | 188      |   |   |   | 1,690 |   |
| Proceeds from sales of loans held for sale                                                                 |   |                      | 23,529   |   |   |   | 39,043 |   |
| Originations of loans held for sale                                                                        |   |                      | (24,238  | )      |   |   | (45,238 | ) |
| Gain on sale of other real estate owned                                                                    |   |                      | (211     | )      |   |   | (64 | ) |
| Gain from bank-owned life insurance                                                                        |   |                      | -        |   |   |   | (840 | ) |
| Increase in value of bank-owned life insurance                                                             |   |                      | (444     | )      |   |   | (363 | ) |
| Depreciation                                                                                               |   |                      | 297      |   |   |   | 350 |   |
| Deferred income taxes                                                                                      |   |                      | (195     | )      |   |   | (8,759 | ) |
| Other                                                                                                      |   |                      | -        |   |   |   | (1,128 | ) |
| Change in assets and liabilities:                                                                          |   |                      |     |   |   |   |   |   |
| Decrease (increase) in accrued interest receivable                                                         |   |                      | 96       |   |   |   | (707 | ) |
| Decrease (increase) in other assets                                                                        |   |                      | 4,180    |   |   |   | (2,501 | ) |
| Increase in accrued expenses and other liabilities                                                         |   |                      | 193      |   |   |   | 1,028 |   |
| Net cash provided by operating activities - continuing operations                                          |   |                      | 13,226   |   |   |   | 3,544 |   |
| Net cash provided by operating activities - discontinued operations                                        |   |                      | -        |   |   |   | 394 |   |
| Net cash provided by operating activities                                                                  |   |                      | 13,226   |   |   |   | 3,938 |   |
| Cash Flows from Investing Activities:                                                                      |   |                      |     |   |   |   |   |   |
| Proceeds from sales, calls, and maturities of securities available for sale                                |   |                      | 176,706  |   |   |   | 74,436 |   |
| Purchases of securities available for sale                                                                 |   |                      | (121,541 | )      |   |   | (138,525 | ) |
| Purchases of Federal Home Loan Bank stock                                                                  |   |                      | (630     | )      |   |   | (1,582 | ) |
| Proceeds from redemption of Federal Home Loan Bank stock                                                   |   |                      | 824      |   |   |   | - |   |
| Net decrease (increase) in loans                                                                           |   |                      | 52,155   |   |   |   | (30,748 | ) |
| Net proceeds from the sale of other real estate owned                                                      |   |                      | 6,161    |   |   |   | 4,156 |   |
| Proceeds from sales of premises and equipment                                                              |   |                      | 7        |   |   |   | 2 |   |
| Purchases of premises and equipment                                                                        |   |                      | (295     | )      |   |   | (615 | ) |
| Proceeds of principal and earnings from bank-owned life insurance                                          |   |                      | -        |   |   |   | 1,493 |   |
| Net cash provided by (used in) investing activities - continuing operations                                |   |                      | 113,387  |   |   |   | (91,383 | ) |
| Net cash provided by investing activities - discontinued operations                                        |   |                      | -        |   |   |   | 31 |   |
| Net cash provided by (used in) investing activities                                                        |   |                      | 113,387  |   |   |   | (91,352 | ) |
| Cash Flows from Financing Activities:                                                                      |   |                      |     |   |   |   |   |   |
| Net increase in deposits                                                                                   |   |                      | 28,770   |   |   |   | 22,146 |   |
| Net increase (decrease) in federal funds purchased and securities sold under agreements to repurchase |   |                      | 18,640   |   |   |   | (44,173 | ) |
| Net (decrease) increase in other short-term borrowings                                                     |   |                      | (745     | )      |   |   | 3,017 |   |
| Principal payments on long-term borrowings                                                                 |   |                      | (20,000  | )      |   |   | - |   |
| Common stock cash dividends                                                                                |   |                      | -        |   |   |   | (1,566 | ) |
| Preferred stock dividends paid                                                                             |   |                      | (900     | )      |   |   | (675 | ) |
| Preferred stock issuance costs                                                                             |   |                      | -        |   |   |   | (65 | ) |
| Net cash provided by (used in) financing activities - continuing operations                                |   |                      | 25,765   |   |   |   | (21,316 | ) |
| Net cash provided by financing activities - discontinued operations                                        |   |                      | -        |   |   |   | - |   |
| Net cash provided by (used in) financing activities                                                        |   |                      | 25,765   |   |   |   | (21,316 | ) |

----

Index

|                                                                  |   |                      |    |   |   |   |
|-----------------------------------------------------------------------|--------|---------------------------|---------|--------|--------|--------|
| West Bancorporation, Inc. and Subsidiary                              |   |                      |    |   |   |   |
| Consolidated Statements of Cash Flows (continued)                     |   |                      |    |   |   |   |
| (unaudited)                                                           |   |                      |    |   |   |   |
|                                                                  |   | Six months ended June 30, |    |
| (in thousands)                                                        |   | 2010                      |    |   | 2009   |   |
| Net increase (decrease) in cash and cash equivalents                  |   |                      | 152,378 |   |   |   | (108,730 | ) |
| Cash and Cash Equivalents:                                            |   |                      |    |   |   |   |   |   |
| Beginning                                                             |   |                      | 131,495 |   |   |   | 196,969 |   |
| Ending                                                                |   | $                         | 283,873 |   |   | $      | 88,239 |   |
|                                                                  |   |                      |    |   |   |   |   |   |
|                                                                  |   |                      |    |   |   |   |   |   |
| Supplemental Disclosures of Cash Flow Information                     |   |                      |    |   |   |   |   |   |
| Cash payments for:                                                    |   |                      |    |   |   |   |   |   |
| Interest                                                              |   | $                         | 11,222  |   |   | $      | 13,988 |   |
| Income taxes                                                          |   |                      | 625     |   |   |   | 2,276 |   |
| Supplemental Disclosure of Noncash Investing and Financing Activities |   |                      |    |   |   |   |   |   |
| Transfer of loans to other real estate owned                          |   | $                         | 5,899   |   |   | $      | 5,813 |   |

----

Index

Wes

----

Index

|                                                       |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|------------------------------------------------------------|--------|-----------------------------|--------|--------|---------------------------|--------|
|                                                       |   | 2010                        |   |   | 2009                      |   |   | 2010 |   |   | 2009 |   |
| Loss from discontinued operations:                         |   |                        |   |   |                      |   |   |   |   |   |   |   |
| Interest income                                            |   | $                           | -      |   |                      | $      | - |   |   | $ | - |   |   | $ | - |   |
| Interest expense                                           |   |                        | -      |   |                      |   | - |   |   |   | - |   |   |   | - |   |
| Net interest income                                        |   |                        | -      |   |                      |   | - |   |   |   | - |   |   |   | - |   |
| Noninterest income                                         |   |                        | -      |   |                      |   | 1,634 |   |   |   | - |   |   |   | 3,093 |   |
| Noninterest expense                                        |   |                        | -      |   |                      |   | 10,987 |   |   |   | - |   |   |   | 12,439 |   |
| Loss from discontinued operations before income taxes |   |                        | -      |   |                      |   | (9,353 | ) |   |   | - |   |   |   | (9,346 | ) |
| Income tax benefits                                        |   |                        | -      |   |                      |   | (817 | ) |   |   | - |   |   |   | (814 | ) |
| Loss from discontinued operations                          |   | $                           | -      |   |                      | $      | (8,536 | ) |   | $ | - |   |   | $ | (8,532 | ) |

----

Index

----

Index

|                                      |   | June 30, 2010     |    |
|-------------------------------------------|--------|-------------------|---------|
|                                      |   | AmortizedCost     |    |   | GrossUnrealizedGains |   |   | GrossUnrealized(Losses) |   |   | FairValue |   |
| U.S. government agencies and corporations |   | $                 | 118,706 |   |   | $ | 748 |   |   | $ | - |   |   | $ | 119,454 |   |
| State and political subdivisions          |   |              | 74,037  |   |   |   | 758 |   |   |   | (782 | ) |   |   | 74,013 |   |
| Mortgage-backed securities (1)            |   |              | 85,593  |   |   |   | 552 |   |   |   | (10 | ) |   |   | 86,135 |   |
| Trust preferred securities                |   |              | 6,743   |   |   |   | - |   |   |   | (4,435 | ) |   |   | 2,308 |   |
| Corporate notes and other investments     |   |              | 6,586   |   |   |   | 17 |   |   |   | (701 | ) |   |   | 5,902 |   |
|                                      |   | $                 | 291,665 |   |   | $ | 2,075 |   |   | $ | (5,928 | ) |   | $ | 287,812 |   |
|                                      |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                      |   | December 31, 2009 |    |
|                                      |   | AmortizedCost     |    |   | GrossUnrealizedGains |   |   | GrossUnrealized(Losses) |   |   | FairValue |   |
| U.S. government agencies and corporations |   | $                 | 177,940 |   |   | $ | 190 |   |   | $ | (240 | ) |   | $ | 177,890 |   |
| State and political subdivisions          |   |              | 88,831  |   |   |   | 823 |   |   |   | (1,719 | ) |   |   | 87,935 |   |
| Mortgage-backed securities (1)            |   |              | 64,897  |   |   |   | 141 |   |   |   | (460 | ) |   |   | 64,578 |   |
| Trust preferred securities                |   |              | 6,926   |   |   |   | - |   |   |   | (4,859 | ) |   |   | 2,067 |   |
| Corporate notes and other investments     |   |              | 8,839   |   |   |   | 28 |   |   |   | (859 | ) |   |   | 8,008 |   |
|                                      |   | $                 | 347,433 |   |   | $ | 1,182 |   |   | $ | (8,137 | ) |   | $ | 340,478 |   |

| (1)   | All mortgage-backed securities consist of residential mortgage pass-through securities guaranteed by GNMA or issued by FNMA, and real estate mortgage investment conduits guaranteed by FHLMC or GNMA. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                   |   | June 30, 2010 |    |
|----------------------------------------|--------|---------------|---------|
|                                   |   | AmortizedCost |    |   | FairValue |   |
| Due in one year or less                |   | $             | 16,240  |   |   | $ | 16,281 |   |
| Due after one year through five years  |   |          | 102,275 |   |   |   | 102,195 |   |
| Due after five years through ten years |   |          | 45,907  |   |   |   | 46,234 |   |
| Due after ten years                    |   |          | 41,650  |   |   |   | 36,967 |   |
|                                   |   |          | 206,072 |   |   |   | 201,677 |   |
| Mortgage-backed securities             |   |          | 85,593  |   |   |   | 86,135 |   |
|                                   |   | $             | 291,665 |   |   | $ | 287,812 |   |

----

Index

|                  |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|-----------------------|--------|-----------------------------|--------|--------|---------------------------|--------|
|                  |   | 2010                        |   |   | 2009                      |   |   | 2010 |   |   | 2009 |   |
| Proceeds from sales   |   | $                           | 52,171 |   |                      | $      | - |   |   | $ | 67,621 |   |   | $ | 54,343 |   |
| Gross gains on sales  |   |                        | 40     |   |                      |   | - |   |   |   | 86 |   |   |   | 1,453 |   |
| Gross losses on sales |   |                        | (49    | )      |                      |   | - |   |   |   | (49 | ) |   |   | - |   |

|                                           |   | June 30, 2010       |    |
|------------------------------------------------|--------|---------------------|---------|
|                                           |   | Less than 12 months |    |   | 12 months or longer |   |   | Total |   |
|                                           |   | FairValue           |    |   | GrossUnrealized(Losses) |   |   | FairValue |   |   | GrossUnrealized(Losses) |   |   | FairValue |   |   | GrossUnrealized(Losses) |   |
| U.S. government agencies and corporations |   | $                   | -       |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| State and political subdivisions               |   |                | 18,830  |   |   |   | (510 | ) |   |   | 9,873 |   |   |   | (272 | ) |   |   | 28,703 |   |   |   | (782 | ) |
| Mortgage-backed securities                     |   |                | 4,959   |   |   |   | (10 | ) |   |   | - |   |   |   | - |   |   |   | 4,959 |   |   |   | (10 | ) |
| Trust preferred securities                     |   |                | -       |   |   |   | - |   |   |   | 1,871 |   |   |   | (4,435 | ) |   |   | 1,871 |   |   |   | (4,435 | ) |
| Corporate notes and other investments          |   |                | -       |   |   |   | - |   |   |   | 3,287 |   |   |   | (701 | ) |   |   | 3,287 |   |   |   | (701 | ) |
|                                           |   | $                   | 23,789  |   |   | $ | (520 | ) |   | $ | 15,031 |   |   | $ | (5,408 | ) |   | $ | 38,820 |   |   | $ | (5,928 | ) |
|                                           |   |                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   | December 31, 2009   |    |
|                                           |   | Less than 12 months |    |   | 12 months or longer |   |   | Total |   |
|                                           |   | FairValue           |    |   | GrossUnrealized(Losses) |   |   | FairValue |   |   | GrossUnrealized(Losses) |   |   | FairValue |   |   | GrossUnrealized(Losses) |   |
| U.S. government agencies and corporations |   | $                   | 42,535  |   |   | $ | (240 | ) |   | $ | - |   |   | $ | - |   |   | $ | 42,535 |   |   | $ | (240 | ) |
| State and political subdivisions               |   |                | 31,433  |   |   |   | (1,159 | ) |   |   | 11,652 |   |   |   | (560 | ) |   |   | 43,085 |   |   |   | (1,719 | ) |
| Mortgage-backed securities                     |   |                | 47,644  |   |   |   | (460 | ) |   |   | - |   |   |   | - |   |   |   | 47,644 |   |   |   | (460 | ) |
| Trust preferred securities                     |   |                | -       |   |   |   | - |   |   |   | 2,067 |   |   |   | (4,859 | ) |   |   | 2,067 |   |   |   | (4,859 | ) |
| Corporate notes and other investments          |   |                | -       |   |   |   | - |   |   |   | 3,128 |   |   |   | (859 | ) |   |   | 3,128 |   |   |   | (859 | ) |
|                                           |   | $                   | 121,612 |   |   | $ | (1,859 | ) |   | $ | 16,847 |   |   | $ | (6,278 | ) |   | $ | 138,459 |   |   | $ | (8,137 | ) |

----

Index

----

Index

| As of June 30, 2010:                                                      |                  |   |   |   |   |      |   |   |      |   |   |                  |   |            |   |                                    |   |   |                          |   |   |                            |   |   |                   |   |
|---------------------------------------------------------------------------|-----------------------|--------|--------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------------------|--------|-----------------|--------|-----------------------------------------|--------|--------|-------------------------------|--------|--------|---------------------------------|--------|--------|------------------------|--------|
|                                                                      | Single-issuerorpooled |   | Class  |   |   | Bookvalue |   |   | Fairvalue |   |   | Unrealizedgain/(loss) |   | Creditrating(1) |   | Number ofentitiescurrentlyperforming(2) |   |   | Actualdeferralsanddefaults(3) |   |   | Expecteddeferralsanddefaults(4) |   |   | Excesssubordination(4) |   |
| ALESCO Preferred Funding      X, Ltd.            | Pooled                |   |   | C-2    |   |      | $      | 4,591  |      |   | $      | 1,222                 |   |            | $      | (3,369                                  | )      | Ca     |                          |   | 56     |                            |   |   | 18.1                   | %      |   |   | 17.9 | % |   |   | 0.0 | % |
| Heartland Financial Statutory     Trust VII 144A | Single                |   |   | n/a    |   |      |   | 1,715  |      |   |   | 649                   |   |            |   | (1,066                                  | )      | NR     |                          |   | n/a    |                            |   |   | n/a                    |   |   |   | n/a |   |   |   | n/a |   |
| Old Second Capital Trust I                                                | Single                |   |   | n/a    |   |      |   | 437    |      |   |   | 437                   |   |            |   | -                                       |   | NR     |                          |   | n/a    |                            |   |   | n/a                    |   |   |   | n/a |   |   |   | n/a |   |

| As of December 31, 2009:                                                  |                  |   |   |   |   |      |   |   |      |   |   |                  |   |            |   |                                    |   |   |                          |   |   |                            |   |   |                   |   |
|---------------------------------------------------------------------------|-----------------------|--------|--------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------------------|--------|-----------------|--------|-----------------------------------------|--------|--------|-------------------------------|--------|--------|---------------------------------|--------|--------|------------------------|--------|
|                                                                      | Single-issuerorpooled |   | Class  |   |   | Bookvalue |   |   | Fairvalue |   |   | Unrealizedgain/(loss) |   | Creditrating(1) |   | Number ofentitiescurrentlyperforming(2) |   |   | Actualdeferralsanddefaults(3) |   |   | Expecteddeferralsanddefaults(4) |   |   | Excesssubordination(4) |   |
| ALESCO Preferred Funding     X, Ltd.             | Pooled                |   |   | C-2    |   |      | $      | 4,591  |      |   | $      | 1,136                 |   |            | $      | (3,455                                  | )      | Ca     |                          |   | 58     |                            |   |   | 18.2                   | %      |   |   | 19.6 | % |   |   | 0.0 | % |
| Heartland Financial Statutory     Trust VII 144A | Single                |   |   | n/a    |   |      |   | 1,710  |      |   |   | 594                   |   |            |   | (1,116                                  | )      | NR     |                          |   | n/a    |                            |   |   | n/a                    |   |   |   | n/a |   |   |   | n/a |   |
| Old Second Capital Trust I                                                | Single                |   |   | n/a    |   |      |   | 625    |      |   |   | 337                   |   |            |   | (288                                    | )      | NR     |                          |   | n/a    |                            |   |   | n/a                    |   |   |   | n/a |   |   |   | n/a |   |

|                                                                                   |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|----------------------------------------------------------------------------------------|--------|-----------------------------|--------|--------|---------------------------|--------|
|                                                                                   |   | 2010                        |   |   | 2009                      |   |   | 2010 |   |   | 2009 |   |
| Balance at beginning of period                                                         |   | $                           | 310    |   |                      | $      | - |   |   | $ | 310 |   |   | $ | - |   |
| Current period credit loss recognized in earnings                                      |   |                        | -      |   |                      |   | 275 |   |   |   | - |   |   |   | 275 |   |
| Reductions for securities sold during the period                                       |   |                        | -      |   |                      |   | - |   |   |   | - |   |   |   | - |   |
| Reductions for securities where there is an intent to sell or requirement to sell |   |                        | -      |   |                      |   | - |   |   |   | - |   |   |   | - |   |
| Reductions for increases in cash flows expected to be collected                        |   |                        | -      |   |                      |   | - |   |   |   | - |   |   |   | - |   |
| Balance at end of period                                                               |   | $                           | 310    |   |                      | $      | 275 |   |   | $ | 310 |   |   | $ | 275 |   |

----

Index

|                                                                                                                                                                                                                                                                  |   | June 30, 2010 |   |   | December 31, 2009 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
| Accumulated other comprehensive (loss):                                                                                                                                                                                                                               |   |          |   |   |              |   |
| Unrealized (losses) on available for sale securities for which a portion of other than temporary impairment             has been recorded in earnings, net of tax of $1,280 and $1,313, respectively |   | $             | (2,089 | )      |              | $      | (2,142 | ) |
| Unrealized (losses) on available for sale securities which are not other than temporarily impaired,             net of tax of $184 and $1,330, respectively                                               |   |          | (299   | )      |              |   | (2,169 | ) |
|                                                                                                                                                                                                                                                                  |   | $             | (2,388 | )      |              | $      | (4,311 | ) |

|                                                |   | June 30, 2010 |   |   | December 31, 2009 |   |
|-----------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
| Impaired loans without an allowance                 |   | $             | 14,100 |   |              | $      | 16,809 |   |
| Impaired loans with an allowance                    |   |          | 23,520 |   |              |   | 24,745 |   |
| Total impaired loans                                |   | $             | 37,620 |   |              | $      | 41,554 |   |
| Allowance for loan losses related to impaired loans |   | $             | 5,877  |   |              | $      | 4,935 |   |

|                                         |   | June 30, 2010 |   |   | December 31, 2009 |   |
|----------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
| Nonaccrual loans                             |   | $             | 11,445 |   |              | $      | 12,350 |   |
| Troubled debt restructured loans             |   |          | 12,339 |   |              |   | 12,817 |   |
| Other impaired loans still accruing interest |   |          | 13,836 |   |              |   | 16,387 |   |
| Total impaired loans                         |   | $             | 37,620 |   |              | $      | 41,554 |   |

----

Index

|                            |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|---------------------------------|--------|-----------------------------|--------|--------|---------------------------|--------|
|                            |   | 2010                        |   |   | 2009                      |   |   | Change |   |   | 2010 |   |   | 2009 |   |   | Change |   |
| Balance at beginning of period  |   | $                           | 20,273 |   |                      | $      | 18,015 |   |   | $ | 2,258 |   |   | $ | 19,126 |   |   | $ | 15,441 |   |   | $ | 3,685 |   |
| Charge-offs                     |   |                        | (661   | )      |                      |   | (9,366 | ) |   |   | 8,705 |   |   |   | (1,683 | ) |   |   | (10,553 | ) |   |   | 8,870 |   |
| Recoveries                      |   |                        | 79     |   |                      |   | 13 |   |   |   | 66 |   |   |   | 248 |   |   |   | 274 |   |   |   | (26 | ) |
| Net charge-offs                 |   |                        | (582   | )      |                      |   | (9,353 | ) |   |   | 8,771 |   |   |   | (1,435 | ) |   |   | (10,279 | ) |   |   | 8,844 |   |
| Provision charged to operations |   |                        | 1,400  |   |                      |   | 15,000 |   |   |   | (13,600 | ) |   |   | 3,400 |   |   |   | 18,500 |   |   |   | (15,100 | ) |
| Balance at end of period        |   | $                           | 21,091 |   |                      | $      | 23,662 |   |   | $ | (2,571 | ) |   | $ | 21,091 |   |   | $ | 23,662 |   |   | $ | (2,571 | ) |

----

Index

|                                      |   | June 30, 2010     |    |
|-------------------------------------------|--------|-------------------|---------|
| Description                               |   | Total             |    |   | Quoted Pricesin Active Marketsfor Identical Assets(Level 1) |   |   | Significant OtherObservable Inputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
| Assets:                                   |   |              |    |   |   |   |   |   |   |   |   |   |
| U.S. government agencies and corporations |   | $                 | 119,454 |   |   | $ | - |   |   | $ | 119,454 |   |   | $ | - |   |
| State and political subdivisions          |   |              | 74,013  |   |   |   | - |   |   |   | 74,013 |   |   |   | - |   |
| Mortgage-backed securities                |   |              | 86,135  |   |   |   | - |   |   |   | 86,135 |   |   |   | - |   |
| Trust preferred securities                |   |              | 2,308   |   |   |   | - |   |   |   | 649 |   |   |   | 1,659 |   |
| Corporate notes and other investments     |   |              | 5,902   |   |   |   | - |   |   |   | 5,902 |   |   |   | - |   |
| Total                                     |   | $                 | 287,812 |   |   | $ | - |   |   | $ | 286,153 |   |   | $ | 1,659 |   |
|                                      |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                      |   | December 31, 2009 |    |
| Description                               |   | Total             |    |   | Quoted Pricesin Active Marketsfor Identical Assets(Level 1) |   |   | Significant OtherObservable Inputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
| Assets:                                   |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. government agencies and corporations |   | $                 | 177,890 |   |   | $ | - |   |   | $ | 177,890 |   |   | $ | - |   |
| State and political subdivisions          |   |              | 87,935  |   |   |   | - |   |   |   | 87,935 |   |   |   | - |   |
| Mortgage-backed securities                |   |              | 64,578  |   |   |   | - |   |   |   | 64,578 |   |   |   | - |   |
| Trust preferred securities                |   |              | 2,067   |   |   |   | - |   |   |   | 931 |   |   |   | 1,136 |   |
| Corporate notes and other investments     |   |              | 8,008   |   |   |   | - |   |   |   | 8,008 |   |   |   | - |   |
| Total                                     |   | $                 | 340,478 |   |   | $ | - |   |   | $ | 339,342 |   |   | $ | 1,136 |   |

|                                   |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|----------------------------------------|--------|-----------------------------|--------|--------|---------------------------|--------|
|                                   |   | 2010                        |   |   | 2009                      |   |   | 2010 |   |   | 2009 |   |
| Beginning balance                      |   | $                           | 1,155  |   |                      | $      | 2,344 |   |   | $ | 1,136 |   |   | $ | 2,325 |   |
| Transfer into level 3                  |   |                        | 625    |   |                      |   | - |   |   |   | 625 |   |   |   | 250 |   |
| Total gains or (losses):               |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Included in earnings                   |   |                        | (188   | )      |                      |   | (275 | ) |   |   | (188 | ) |   |   | (275 | ) |
| Included in other comprehensive income |   |                        | 67     |   |                      |   | (738 | ) |   |   | 86 |   |   |   | (938 | ) |
| Principal payments                     |   |                        | -      |   |                      |   | (15 | ) |   |   | - |   |   |   | (46 | ) |
| Ending balance                         |   | $                           | 1,659  |   |                      | $      | 1,316 |   |   | $ | 1,659 |   |   | $ | 1,316 |   |

----

Index

|                    |   | June 30, 2010     |   |
|-------------------------|--------|-------------------|--------|
| Description             |   | Total             |   |   | Quoted Prices in Active Markets for Identical Assets (Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
| Assets:                 |   |              |   |   |   |   |   |   |   |   |   |   |
| Loans                   |   | $                 | 17,643 |   |   | $ | - |   |   | $ | - |   |   | $ | 17,643 |   |
| Other real estate owned |   |              | 24,637 |   |   |   | - |   |   |   | - |   |   |   | 24,637 |   |
| Total                   |   | $                 | 42,280 |   |   | $ | - |   |   | $ | - |   |   | $ | 42,280 |   |
|                    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                    |   | December 31, 2009 |   |
| Description             |   | Total             |   |   | Quoted Prices in Active Markets for Identical Assets (Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
| Assets:                 |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                   |   | $                 | 19,810 |   |   | $ | - |   |   | $ | - |   |   | $ | 19,810 |   |
| Other real estate owned |   |              | 25,350 |   |   |   | - |   |   |   | - |   |   |   | 25,350 |   |
| Total                   |   | $                 | 45,160 |   |   | $ | - |   |   | $ | - |   |   | $ | 45,160 |   |

----

Index

|                                                                            |   | June 30, 2010   |      |   | December 31, 2009      |   |
|---------------------------------------------------------------------------------|--------|-----------------|-----------|--------|------------------------|--------|
|                                                                            |   | Carrying Amount |      |   | Approximate Fair Value |   |   | Carrying Amount |   |   | Approximate Fair Value |   |
| Financial assets:                                                               |   |            |      |   |                   |   |   |   |   |   |   |   |
| Cash and due from banks                                                         |   | $               | 26,596    |   |                   | $      | 26,596 |   |   | $ | 27,923 |   |   | $ | 27,923 |   |
| Federal funds sold and other short-term investments                        |   |            | 257,277   |   |                   |   | 257,277 |   |   |   | 103,572 |   |   |   | 103,572 |   |
| Securities available for sale                                                   |   |            | 287,812   |   |                   |   | 287,812 |   |   |   | 340,478 |   |   |   | 340,478 |   |
| Federal Home Loan Bank stock                                                    |   |            | 10,597    |   |                   |   | 10,597 |   |   |   | 10,791 |   |   |   | 10,791 |   |
| Loans held for sale                                                             |   |            | 1,041     |   |                   |   | 1,052 |   |   |   | 332 |   |   |   | 332 |   |
| Loans, net                                                                      |   |            | 940,130   |   |                   |   | 946,108 |   |   |   | 1,001,584 |   |   |   | 1,006,217 |   |
| Accrued interest receivable                                                     |   |            | 5,406     |   |                   |   | 5,406 |   |   |   | 5,502 |   |   |   | 5,502 |   |
| Financial liabilities:                                                          |   |            |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                        |   |            | 1,275,387 |   |                   |   | 1,278,971 |   |   |   | 1,246,617 |   |   |   | 1,250,163 |   |
| Federal funds purchased and securities sold under agreements to repurchase |   |            | 58,982    |   |                   |   | 58,982 |   |   |   | 40,342 |   |   |   | 40,342 |   |
| Other short-term borrowings                                                     |   |            | 1,808     |   |                   |   | 1,808 |   |   |   | 2,553 |   |   |   | 2,553 |   |
| Accrued interest payable                                                        |   |            | 1,650     |   |                   |   | 1,650 |   |   |   | 1,756 |   |   |   | 1,756 |   |
| Subordinated notes                                                              |   |            | 20,619    |   |                   |   | 15,462 |   |   |   | 20,619 |   |   |   | 14,387 |   |
| FHLB advances                                                                   |   |            | 105,000   |   |                   |   | 109,426 |   |   |   | 125,000 |   |   |   | 122,177 |   |
| Off-balance-sheet financial instruments:                                        |   |            |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Commitments to extend credit                                                    |   |            | -         |   |                   |   | - |   |   |   | - |   |   |   | - |   |
| Standby letters of credit                                                       |   |            | -         |   |                   |   | - |   |   |   | - |   |   |   | - |   |

----

Index

|                                                                       |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|----------------------------------------------------------------------------|--------|-----------------------------|--------|--------|---------------------------|--------|
|                                                                       |   | 2010                        |   |   | 2009                      |   |   | 2010 |   |   | 2009 |   |
| Income (loss) from continuing operations                                   |   | $                           | 2,603  |   |                      | $      | (13,743 | ) |   | $ | 5,942 |   |   | $ | (10,806 | ) |
| Loss from discontinued operations                                          |   |                        | -      |   |                      |   | (8,536 | ) |   |   | - |   |   |   | (8,532 | ) |
| Net income (loss)                                                          |   |                        | 2,603  |   |                      |   | (22,279 | ) |   |   | 5,942 |   |   |   | (19,338 | ) |
| Preferred stock dividends                                                  |   |                        | (450   | )      |                      |   | (450 | ) |   |   | (900 | ) |   |   | (900 | ) |
| Preferred stock discount accretion                                         |   |                        | (122   | )      |                      |   | (120 | ) |   |   | (241 | ) |   |   | (237 | ) |
| Net income (loss) available to common stockholders                         |   | $                           | 2,031  |   |                      | $      | (22,849 | ) |   | $ | 4,801 |   |   | $ | (20,475 | ) |
|                                                                       |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common shares outstanding                                 |   |                        | 17,404 |   |                      |   | 17,404 |   |   |   | 17,404 |   |   |   | 17,404 |   |
| Common stock warrant*                                                      |   |                        | -      |   |                      |   | - |   |   |   | - |   |   |   | - |   |
| Diluted weighted average common shares outstanding                         |   |                        | 17,404 |   |                      |   | 17,404 |   |   |   | 17,404 |   |   |   | 17,404 |   |
|                                                                       |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Basic earnings (loss) per common share from continuing operations     |   | $                           | 0.12   |   |                      | $      | (0.83 | ) |   | $ | 0.28 |   |   | $ | (0.69 | ) |
| Basic earnings (loss) per common share from discontinued operations   |   | $                           | -      |   |                      | $      | (0.49 | ) |   | $ | - |   |   | $ | (0.49 | ) |
| Basic earnings (loss) per common share                                     |   | $                           | 0.12   |   |                      | $      | (1.32 | ) |   | $ | 0.28 |   |   | $ | (1.18 | ) |
|                                                                       |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Diluted earnings (loss) per common share from continuing operations   |   | $                           | 0.12   |   |                      | $      | (0.83 | ) |   | $ | 0.28 |   |   | $ | (0.69 | ) |
| Diluted earnings (loss) per common share from discontinued operations |   | $                           | -      |   |                      | $      | (0.49 | ) |   | $ | - |   |   | $ | (0.49 | ) |
| Diluted earnings (loss) per common share                                   |   | $                           | 0.12   |   |                      | $      | (1.32 | ) |   | $ | 0.28 |   |   | $ | (1.18 | ) |

----

Index

|                                                   |   | June 30, 2010 |   |   | December 31, 2009 |   |
|--------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
| Allowance for loan losses                              |   | $             | 8,015  |   |              | $      | 7,268 |   |
| Intangibles                                            |   |          | 2,391  |   |              |   | 2,517 |   |
| Net unrealized losses on securities available for sale |   |          | 1,464  |   |              |   | 2,643 |   |
| Equity security impairment                             |   |          | -      |   |              |   | 144 |   |
| Investment security impairment                         |   |          | 71     |   |              |   | - |   |
| Alternative minimum tax credit and other credits       |   |          | 389    |   |              |   | 909 |   |
| State net operating loss carryforward                  |   |          | 334    |   |              |   | 296 |   |
| Capital loss carryforward                              |   |          | 3,780  |   |              |   | 3,269 |   |
| Other                                                  |   |          | (490   | )      |              |   | (514 | ) |
| Net deferred tax assets before valuation allowance     |   |          | 15,954 |   |              |   | 16,532 |   |
| Valuation allowance                                    |   |          | (4,114 | )      |              |   | (3,709 | ) |
| Net deferred tax assets                                |   | $             | 11,840 |   |              | $      | 12,823 |   |

|                         |   | June 30, 2010 |    |   | December 31, 2009 |   |
|------------------------------|--------|---------------|---------|--------|-------------------|--------|
| Commitments to extend credit |   | $             | 159,539 |   |              | $      | 202,217 |   |
| Standby letters of credit    |   |          | 15,416  |   |              |   | 18,350 |   |
|                         |   | $             | 174,955 |   |              | $      | 220,567 |   |

----

Index

Ite

----

Index

----

Index

|                                                                                                           |   | Three Months Ended June 30, |      |   | Six Months Ended June 30, |   |
|----------------------------------------------------------------------------------------------------------------|--------|-----------------------------|-----------|--------|---------------------------|--------|
|                                                                                                           |   | 2010                        |      |   | 2009                      |   |   | Change |   |   | Change % |   |   | 2010 |   |   | 2009 |   |   | Change |   |   | Change % |   |
| Income (loss) from continuing operations                                                                  |   | $                           | 2,603     |   |                      | $      | (13,743 | ) |   | $ | 16,346 |   |   |   | 118.9 | % |   | $ | 5,942 |   |   | $ | (10,806 | ) |   | $ | 16,748 |   |   |   | 155.0 | % |
| Loss from discontinued operations                                                                         |   |                        | -         |   |                      |   | (8,536 | ) |   |   | 8,536 |   |   |   | 100.0 | % |   |   | - |   |   |   | (8,532 | ) |   |   | 8,532 |   |   |   | 100.0 | % |
| Net income (loss)                                                                                              |   | $                           | 2,603     |   |                      | $      | (22,279 | ) |   | $ | 24,882 |   |   |   | 111.7 | % |   | $ | 5,942 |   |   | $ | (19,338 | ) |   | $ | 25,280 |   |   |   | 130.7 | % |
|                                                                                                           |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average assets                                                                                                 |   | $                           | 1,657,364 |   |                      | $      | 1,753,534 |   |   | $ | (96,170 | ) |   |   | -5.5 | % |   | $ | 1,646,955 |   |   | $ | 1,668,246 |   |   | $ | (21,291 | ) |   |   | -1.3 | % |
| Average stockholders' equity                                                                                   |   |                        | 138,887   |   |                      |   | 153,203 |   |   |   | (14,316 | ) |   |   | -9.3 | % |   |   | 136,882 |   |   |   | 152,673 |   |   |   | (15,791 | ) |   |   | -10.3 | % |
|                                                                                                           |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Return on average assets                                                                                       |   |                        | 0.63      | %      |                      |   | -5.10 | % |   |   | 5.73 | % |   |   |   |   |   |   | 0.73 | % |   |   | -2.34 | % |   |   | 3.07 | % |   |   |   |   |
|                                                                                                           |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Return on average equity                                                                                       |   |                        | 7.52      | %      |                      |   | -58.33 | % |   |   | 65.85 | % |   |   |   |   |   |   | 8.75 | % |   |   | -25.54 | % |   |   | 34.29 | % |   |   |   |   |
|                                                                                                           |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Efficiency ratio                                                                                               |   |                        | 56.33     | %      |                      |   | 52.30 | % |   |   | 4.03 | % |   |   |   |   |   |   | 51.34 | % |   |   | 48.60 | % |   |   | 2.74 | % |   |   |   |   |
|                                                                                                           |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend payout ratio                                                                                          |   | NM                          |      |   |                      | -0.78  | % |   | NM |   |   |   |   |   |   | NM |   |   |   | -8.10 | % |   | NM |   |   |   |   |   |
|                                                                                                           |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average equity to average assets ratio                                                                    |   |                        | 8.38      | %      |                      |   | 8.74 | % |   |   | -0.36 | % |   |   |   |   |   |   | 8.31 | % |   |   | 9.15 | % |   |   | -0.84 | % |   |   |   |   |
|                                                                                                           |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity to assets ratio - end of period                                                                    |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   | 8.70 | % |   |   | 8.49 | % |   |   | 0.21 | % |   |   |   |   |
|                                                                                                           |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tangible common equity            ratio - end of period |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   | 6.56 | % |   |   | 6.24 | % |   |   | 0.32 | % |   |   |   |   |

|   | Return on average assets – annualized net income (loss) divided by average assets. |
|--------|------------------------------------------------------------------------------------------|

|   | Return on average equity – annualized net income (loss) divided by average stockholders’ equity. |
|--------|--------------------------------------------------------------------------------------------------------------|

|   | Efficiency ratio – noninterest expense (excluding discontinued operations and goodwill impairment) divided by noninterest income (excluding securities gains and net impairment losses and discontinued operations) plus taxable equivalent net interest income. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Dividend payout ratio – dividends paid divided by net income (loss). |
|--------|----------------------------------------------------------------------------|

|   | Equity to assets ratio – equity divided by assets. |
|--------|----------------------------------------------------------|

|   | Tangible common equity ratio – common equity less intangible assets divided by tangible assets. |
|--------|-------------------------------------------------------------------------------------------------------|

|   | NM – not meaningful. |
|--------|----------------------------|

----

Index

|                                                                                        |   | Average Balance |      |   | Interest Income/Expense |   |      | Yield/Rate |   |
|---------------------------------------------------------------------------------------------|--------|-----------------|-----------|--------|-------------------------|--------|-----------|------------|--------|
|                                                                                        |   | 2010            |      |   | 2009                    |   |      | Change     |   |   | Change-% |   |   | 2010 |   |   | 2009 |   |   | Change |   |   | Change-% |   |   | 2010 |   |   | 2009 |   |   | Change |   |
| Interest-earning assets:                                                                    |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans:                                                                                      |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                                                                  |   | $               | 347,396   |   |                    | $      | 411,466   |       |   | $ | (64,070 | ) |   |   | -15.57 | % |   | $ | 4,321 |   |   | $ | 4,967 |   |   | $ | (646 | ) |   |   | -13.01 | % |   |   | 4.99 | % |   |   | 4.84 | % |   |   | 0.15 | % |
| Real estate                                                                                 |   |            | 619,279   |   |                    |   | 707,689   |       |   |   | (88,410 | ) |   |   | -12.49 | % |   |   | 9,272 |   |   |   | 10,151 |   |   |   | (879 | ) |   |   | -8.66 | % |   |   | 6.01 | % |   |   | 5.75 | % |   |   | 0.26 | % |
| Consumer and other                                                                          |   |            | 10,908    |   |                    |   | 10,840    |       |   |   | 68 |   |   |   | 0.63 | % |   |   | 137 |   |   |   | 172 |   |   |   | (35 | ) |   |   | -20.35 | % |   |   | 5.04 | % |   |   | 6.37 | % |   |   | -1.33 | % |
| Total loans                                                                                 |   |            | 977,583   |   |                    |   | 1,129,995 |       |   |   | (152,412 | ) |   |   | -13.49 | % |   |   | 13,730 |   |   |   | 15,290 |   |   |   | (1,560 | ) |   |   | -10.20 | % |   |   | 5.63 | % |   |   | 5.43 | % |   |   | 0.20 | % |
|                                                                                        |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment securities:                                                                      |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                     |   |            | 236,816   |   |                    |   | 107,770   |       |   |   | 129,046 |   |   |   | 119.74 | % |   |   | 1,139 |   |   |   | 935 |   |   |   | 204 |   |   |   | 21.82 | % |   |   | 1.92 | % |   |   | 3.47 | % |   |   | -1.55 | % |
| Tax-exempt                                                                                  |   |            | 79,498    |   |                    |   | 97,650    |       |   |   | (18,152 | ) |   |   | -18.59 | % |   |   | 1,237 |   |   |   | 1,503 |   |   |   | (266 | ) |   |   | -17.70 | % |   |   | 6.22 | % |   |   | 6.15 | % |   |   | 0.07 | % |
| Total investment securities                                                                 |   |            | 316,314   |   |                    |   | 205,420   |       |   |   | 110,894 |   |   |   | 53.98 | % |   |   | 2,376 |   |   |   | 2,438 |   |   |   | (62 | ) |   |   | -2.54 | % |   |   | 3.00 | % |   |   | 4.75 | % |   |   | -1.75 | % |
|                                                                                        |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal funds sold and        short-term investments     |   |            | 264,623   |   |                    |   | 320,865   |       |   |   | (56,242 | ) |   |   | -17.53 | % |   |   | 183 |   |   |   | 208 |   |   |   | (25 | ) |   |   | -12.02 | % |   |   | 0.28 | % |   |   | 0.26 | % |   |   | 0.02 | % |
| Total interest-earning assets                                                               |   | $               | 1,558,520 |   |                    | $      | 1,656,280 |       |   | $ | (97,760 | ) |   |   | -5.90 | % |   |   | 16,289 |   |   |   | 17,936 |   |   |   | (1,647 | ) |   |   | -9.18 | % |   |   | 4.19 | % |   |   | 4.34 | % |   |   | -0.15 | % |
|                                                                                        |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                               |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits:                                                                                   |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Checking with interest, savings        and money markets |   | $               | 650,482   |   |                    | $      | 555,565   |       |   | $ | 94,917 |   |   |   | 17.08 | % |   |   | 2,061 |   |   |   | 1,818 |   |   |   | 243 |   |   |   | 13.37 | % |   |   | 1.27 | % |   |   | 1.31 | % |   |   | -0.04 | % |
| Time deposits                                                                               |   |            | 435,731   |   |                    |   | 580,781   |       |   |   | (145,050 | ) |   |   | -24.97 | % |   |   | 1,912 |   |   |   | 3,487 |   |   |   | (1,575 | ) |   |   | -45.17 | % |   |   | 1.76 | % |   |   | 2.41 | % |   |   | -0.65 | % |
| Total deposits                                                                              |   |            | 1,086,213 |   |                    |   | 1,136,346 |       |   |   | (50,133 | ) |   |   | -4.41 | % |   |   | 3,973 |   |   |   | 5,305 |   |   |   | (1,332 | ) |   |   | -25.11 | % |   |   | 1.47 | % |   |   | 1.87 | % |   |   | -0.40 | % |
| Other borrowed funds                                                                        |   |            | 202,994   |   |                    |   | 250,197   |       |   |   | (47,203 | ) |   |   | -18.87 | % |   |   | 1,448 |   |   |   | 1,771 |   |   |   | (323 | ) |   |   | -18.24 | % |   |   | 2.86 | % |   |   | 2.84 | % |   |   | 0.02 | % |
| Total interest-bearing liabilities                                                          |   | $               | 1,289,207 |   |                    | $      | 1,386,543 |       |   | $ | (97,336 | ) |   |   | -7.02 | % |   |   | 5,421 |   |   |   | 7,076 |   |   |   | (1,655 | ) |   |   | -23.39 | % |   |   | 1.69 | % |   |   | 2.05 | % |   |   | -0.36 | % |
|                                                                                        |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tax-equivalent net interest income                                                          |   |            |      |   |                    |   |      |       |   |   |   |   |   |   | $ | 10,868 |   |   | $ | 10,860 |   |   | $ | 8 |   |   |   | 0.07 | % |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest spread                                                                         |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 2.50 | % |   |   | 2.29 | % |   |   | 0.21 | % |
| Net interest margin                                                                         |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 2.80 | % |   |   | 2.63 | % |   |   | 0.17 | % |

|                                                                                        |   | Average Balance |      |   | Interest Income/Expense |   |      | Yield/Rate |   |
|---------------------------------------------------------------------------------------------|--------|-----------------|-----------|--------|-------------------------|--------|-----------|------------|--------|
|                                                                                        |   | 2010            |      |   | 2009                    |   |      | Change     |   |   | Change-% |   |   | 2010 |   |   | 2009 |   |   | Change |   |   | Change-% |   |   | 2010 |   |   | 2009 |   |   | Change |   |
| Interest-earning assets:                                                                    |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans:                                                                                      |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                                                                  |   | $               | 349,126   |   |                    | $      | 404,177   |       |   | $ | (55,051 | ) |   |   | -13.62 | % |   | $ | 8,604 |   |   | $ | 9,718 |   |   | $ | (1,114 | ) |   |   | -11.46 | % |   |   | 4.97 | % |   |   | 4.85 | % |   |   | 0.12 | % |
| Real estate                                                                                 |   |            | 631,543   |   |                    |   | 707,643   |       |   |   | (76,100 | ) |   |   | -10.75 | % |   |   | 18,767 |   |   |   | 20,403 |   |   |   | (1,636 | ) |   |   | -8.02 | % |   |   | 5.99 | % |   |   | 5.81 | % |   |   | 0.18 | % |
| Consumer and other                                                                          |   |            | 10,658    |   |                    |   | 11,284    |       |   |   | (626 | ) |   |   | -5.55 | % |   |   | 268 |   |   |   | 356 |   |   |   | (88 | ) |   |   | -24.72 | % |   |   | 5.07 | % |   |   | 6.36 | % |   |   | -1.29 | % |
| Total loans                                                                                 |   |            | 991,327   |   |                    |   | 1,123,104 |       |   |   | (131,777 | ) |   |   | -11.73 | % |   |   | 27,639 |   |   |   | 30,477 |   |   |   | (2,838 | ) |   |   | -9.31 | % |   |   | 5.62 | % |   |   | 5.47 | % |   |   | 0.15 | % |
|                                                                                        |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment securities:                                                                      |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                     |   |            | 244,386   |   |                    |   | 97,163    |       |   |   | 147,223 |   |   |   | 151.52 | % |   |   | 2,249 |   |   |   | 1,766 |   |   |   | 483 |   |   |   | 27.35 | % |   |   | 1.84 | % |   |   | 3.63 | % |   |   | -1.79 | % |
| Tax-exempt                                                                                  |   |            | 80,975    |   |                    |   | 96,413    |       |   |   | (15,438 | ) |   |   | -16.01 | % |   |   | 2,514 |   |   |   | 2,967 |   |   |   | (453 | ) |   |   | -15.27 | % |   |   | 6.21 | % |   |   | 6.15 | % |   |   | 0.06 | % |
| Total investment securities                                                                 |   |            | 325,361   |   |                    |   | 193,576   |       |   |   | 131,785 |   |   |   | 68.08 | % |   |   | 4,763 |   |   |   | 4,733 |   |   |   | 30 |   |   |   | 0.63 | % |   |   | 2.93 | % |   |   | 4.89 | % |   |   | -1.96 | % |
|                                                                                        |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal funds sold and        short-term investments     |   |            | 231,106   |   |                    |   | 257,725   |       |   |   | (26,619 | ) |   |   | -10.33 | % |   |   | 330 |   |   |   | 311 |   |   |   | 19 |   |   |   | 6.11 | % |   |   | 0.29 | % |   |   | 0.24 | % |   |   | 0.05 | % |
| Total interest-earning assets                                                               |   | $               | 1,547,794 |   |                    | $      | 1,574,405 |       |   | $ | (26,611 | ) |   |   | -1.69 | % |   |   | 32,732 |   |   |   | 35,521 |   |   |   | (2,789 | ) |   |   | -7.85 | % |   |   | 4.26 | % |   |   | 4.54 | % |   |   | -0.28 | % |
|                                                                                        |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                               |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits:                                                                                   |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Checking with interest, savings        and money markets |   | $               | 658,665   |   |                    | $      | 449,106   |       |   | $ | 209,559 |   |   |   | 46.66 | % |   |   | 4,198 |   |   |   | 2,679 |   |   |   | 1,519 |   |   |   | 56.70 | % |   |   | 1.29 | % |   |   | 1.20 | % |   |   | 0.09 | % |
| Time deposits                                                                               |   |            | 427,845   |   |                    |   | 617,138   |       |   |   | (189,293 | ) |   |   | -30.67 | % |   |   | 3,815 |   |   |   | 7,891 |   |   |   | (4,076 | ) |   |   | -51.65 | % |   |   | 1.80 | % |   |   | 2.58 | % |   |   | -0.78 | % |
| Total deposits                                                                              |   |            | 1,086,510 |   |                    |   | 1,066,244 |       |   |   | 20,266 |   |   |   | 1.90 | % |   |   | 8,013 |   |   |   | 10,570 |   |   |   | (2,557 | ) |   |   | -24.19 | % |   |   | 1.49 | % |   |   | 2.00 | % |   |   | -0.51 | % |
| Other borrowed funds                                                                        |   |            | 200,063   |   |                    |   | 246,252   |       |   |   | (46,189 | ) |   |   | -18.76 | % |   |   | 3,103 |   |   |   | 3,531 |   |   |   | (428 | ) |   |   | -12.12 | % |   |   | 3.13 | % |   |   | 2.89 | % |   |   | 0.24 | % |
| Total interest-bearing liabilities                                                          |   | $               | 1,286,573 |   |                    | $      | 1,312,496 |       |   | $ | (25,923 | ) |   |   | -1.98 | % |   |   | 11,116 |   |   |   | 14,101 |   |   |   | (2,985 | ) |   |   | -21.17 | % |   |   | 1.74 | % |   |   | 2.17 | % |   |   | -0.43 | % |
|                                                                                        |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tax-equivalent net interest income                                                          |   |            |      |   |                    |   |      |       |   |   |   |   |   |   | $ | 21,616 |   |   | $ | 21,420 |   |   | $ | 196 |   |   |   | 0.92 | % |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest spread                                                                         |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 2.52 | % |   |   | 2.37 | % |   |   | 0.15 | % |
| Net interest margin                                                                         |   |            |      |   |                    |   |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 2.81 | % |   |   | 2.74 | % |   |   | 0.07 | % |

----

Index

----

Index

|                                                                                                      |   | Three Months Ended June 30, |    |   | Six Months Ended June 30, |   |
|-----------------------------------------------------------------------------------------------------------|--------|-----------------------------|---------|--------|---------------------------|--------|
|                                                                                                      |   | 2010                        |    |   | 2009                      |   |   | Change |   |   | 2010 |   |   | 2009 |   |   | Change |   |
| Balance at beginning of period                                                                            |   | $                           | 20,273  |   |                      | $      | 18,015 |   |   | $ | 2,258 |   |   | $ | 19,126 |   |   | $ | 15,441 |   |   | $ | 3,685 |   |
| Charge-offs                                                                                               |   |                        | (661    | )      |                      |   | (9,366 | ) |   |   | 8,705 |   |   |   | (1,683 | ) |   |   | (10,553 | ) |   |   | 8,870 |   |
| Recoveries                                                                                                |   |                        | 79      |   |                      |   | 13 |   |   |   | 66 |   |   |   | 248 |   |   |   | 274 |   |   |   | (26 | ) |
| Net charge-offs                                                                                           |   |                        | (582    | )      |                      |   | (9,353 | ) |   |   | 8,771 |   |   |   | (1,435 | ) |   |   | (10,279 | ) |   |   | 8,844 |   |
| Provision charged to operations                                                                           |   |                        | 1,400   |   |                      |   | 15,000 |   |   |   | (13,600 | ) |   |   | 3,400 |   |   |   | 18,500 |   |   |   | (15,100 | ) |
| Balance at end of period                                                                                  |   | $                           | 21,091  |   |                      | $      | 23,662 |   |   | $ | (2,571 | ) |   | $ | 21,091 |   |   | $ | 23,662 |   |   | $ | (2,571 | ) |
|                                                                                                      |   |                        |    |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average loans outstanding                                                                                 |   | $                           | 977,583 |   |                      | $      | 1,129,995 |   |   |   |   |   |   | $ | 991,327 |   |   | $ | 1,123,104 |   |   |   |   |   |
|                                                                                                      |   |                        |    |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Annualized net charge-offs        to average loans outstanding    |   |                        | 0.24    | %      |                      |   | 3.31 | % |   |   |   |   |   |   | 0.29 | % |   |   | 1.83 | % |   |   |   |   |
| Ratio of allowance for loan losses        to average loans outstanding |   |                        | 2.16    | %      |                      |   | 2.09 | % |   |   |   |   |   |   | 2.13 | % |   |   | 2.11 | % |   |   |   |   |

----

Index

|                                                |   | Three Months Ended June 30, |   |
|-----------------------------------------------------|--------|-----------------------------|--------|
| Noninterest income:                                 |   | 2010                        |   |   | 2009 |   |   | Change |   |   | Change % |   |
| Service charges on deposit accounts                 |   | $                           | 820    |   |   | $ | 1,073 |   |   | $ | (253 | ) |   |   | -23.6 | % |
| Debit card usage fees                               |   |                        | 348    |   |   |   | 281 |   |   |   | 67 |   |   |   | 23.8 | % |
| Service fee from SmartyPig, LLC                     |   |                        | 794    |   |   |   | - |   |   |   | 794 |   |   |   | N/A |   |
| Trust services                                      |   |                        | 198    |   |   |   | 179 |   |   |   | 19 |   |   |   | 10.6 | % |
| Gains and fees on sales of residential mortgages    |   |                        | 286    |   |   |   | 237 |   |   |   | 49 |   |   |   | 20.7 | % |
| Increase in cash value of bank-owned life insurance |   |                        | 226    |   |   |   | 181 |   |   |   | 45 |   |   |   | 24.9 | % |
| Other:                                              |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Visa/Mastercard income                              |   |                        | 57     |   |   |   | 44 |   |   |   | 13 |   |   |   | 29.5 | % |
| All other                                           |   |                        | 190    |   |   |   | 202 |   |   |   | (12 | ) |   |   | -5.9 | % |
| Total other                                         |   |                        | 247    |   |   |   | 246 |   |   |   | 1 |   |   |   | 0.4 | % |
| Total noninterest income                            |   | $                           | 2,919  |   |   | $ | 2,197 |   |   | $ | 722 |   |   |   | 32.9 | % |
|                                                |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                |   | Six Months Ended June 30,   |   |
| Noninterest income:                                 |   |                        | 2010   |   |   |   | 2009 |   |   | Change |   |   | Change % |   |
| Service charges on deposit accounts                 |   | $                           | 1,658  |   |   | $ | 2,042 |   |   | $ | (384 | ) |   |   | -18.8 | % |
| Debit card usage fees                               |   |                        | 656    |   |   |   | 529 |   |   |   | 127 |   |   |   | 24.0 | % |
| Service fee from SmartyPig, LLC                     |   |                        | 1,061  |   |   |   | - |   |   |   | 1,061 |   |   |   | N/A |   |
| Trust services                                      |   |                        | 406    |   |   |   | 359 |   |   |   | 47 |   |   |   | 13.1 | % |
| Gains and fees on sales of residential mortgages    |   |                        | 473    |   |   |   | 535 |   |   |   | (62 | ) |   |   | -11.6 | % |
| Increase in cash value of bank-owned life insurance |   |                        | 444    |   |   |   | 363 |   |   |   | 81 |   |   |   | 22.3 | % |
| Gain from bank-owned life insurance                 |   |                        | -      |   |   |   | 840 |   |   |   | (840 | ) |   |   | -100.0 | % |
| Other:                                              |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Visa/Mastercard income                              |   |                        | 98     |   |   |   | 84 |   |   |   | 14 |   |   |   | 16.7 | % |
| All other                                           |   |                        | 395    |   |   |   | 418 |   |   |   | (23 | ) |   |   | -5.5 | % |
| Total other                                         |   |                        | 493    |   |   |   | 502 |   |   |   | (9 | ) |   |   | -1.8 | % |
| Total noninterest income                            |   | $                           | 5,191  |   |   | $ | 5,170 |   |   | $ | 21 |   |   |   | 0.4 | % |

----

Index

----

Index

|                            |   | Three Months Ended June 30, |   |
|---------------------------------|--------|-----------------------------|--------|
| Noninterest expense:            |   | 2010                        |   |   | 2009 |   |   | Change |   |   | Change % |   |
| Salaries and employee benefits  |   | $                           | 2,775  |   |   | $ | 2,473 |   |   | $ | 302 |   |   |   | 12.2 | % |
| Occupancy                       |   |                        | 796    |   |   |   | 1,028 |   |   |   | (232 | ) |   |   | -22.6 | % |
| Data processing                 |   |                        | 469    |   |   |   | 447 |   |   |   | 22 |   |   |   | 4.9 | % |
| FDIC insurance expense          |   |                        | 883    |   |   |   | 1,283 |   |   |   | (400 | ) |   |   | -31.2 | % |
| Other real estate owned expense |   |                        | 550    |   |   |   | 90 |   |   |   | 460 |   |   |   | 511.1 | % |
| Professional fees               |   |                        | 226    |   |   |   | 229 |   |   |   | (3 | ) |   |   | -1.3 | % |
| Miscellaneous losses            |   |                        | 921    |   |   |   | 18 |   |   |   | 903 |   |   |   | 5016.7 | % |
| Goodwill impairment             |   |                        | -      |   |   |   | 13,376 |   |   |   | (13,376 | ) |   |   | -100.0 | % |
| Other:                          |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Marketing                       |   |                        | 95     |   |   |   | 122 |   |   |   | (27 | ) |   |   | -22.1 | % |
| Consulting fees                 |   |                        | 47     |   |   |   | 105 |   |   |   | (58 | ) |   |   | -55.2 | % |
| Director fees                   |   |                        | 90     |   |   |   | 71 |   |   |   | 19 |   |   |   | 26.8 | % |
| Insurance expense               |   |                        | 96     |   |   |   | 64 |   |   |   | 32 |   |   |   | 50.0 | % |
| Bank service charges and fees   |   |                        | 143    |   |   |   | 82 |   |   |   | 61 |   |   |   | 74.4 | % |
| Deposit operations expense      |   |                        | 98     |   |   |   | 288 |   |   |   | (190 | ) |   |   | -66.0 | % |
| Charitable contributions        |   |                        | 37     |   |   |   | - |   |   |   | 37 |   |   |   | N/A |   |
| All other                       |   |                        | 540    |   |   |   | 528 |   |   |   | 12 |   |   |   | 2.3 | % |
| Total other                     |   |                        | 1,146  |   |   |   | 1,260 |   |   |   | (114 | ) |   |   | -9.0 | % |
| Total noninterest expense       |   | $                           | 7,766  |   |   | $ | 20,204 |   |   | $ | (12,438 | ) |   |   | -61.6 | % |
|                            |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                            |   | Six Months Ended June 30,   |   |
| Noninterest expense:            |   |                        | 2010   |   |   |   | 2009 |   |   | Change |   |   | Change % |   |
| Salaries and employee benefits  |   | $                           | 5,367  |   |   | $ | 5,200 |   |   | $ | 167 |   |   |   | 3.2 | % |
| Occupancy                       |   |                        | 1,597  |   |   |   | 1,843 |   |   |   | (246 | ) |   |   | -13.3 | % |
| Data processing                 |   |                        | 902    |   |   |   | 857 |   |   |   | 45 |   |   |   | 5.3 | % |
| FDIC insurance expense          |   |                        | 1,445  |   |   |   | 1,736 |   |   |   | (291 | ) |   |   | -16.8 | % |
| Other real estate owned expense |   |                        | 660    |   |   |   | 125 |   |   |   | 535 |   |   |   | 428.0 | % |
| Professional fees               |   |                        | 474    |   |   |   | 491 |   |   |   | (17 | ) |   |   | -3.5 | % |
| Miscellaneous losses            |   |                        | 988    |   |   |   | 32 |   |   |   | 956 |   |   |   | 2987.5 | % |
| Goodwill impairment             |   |                        | -      |   |   |   | 13,376 |   |   |   | (13,376 | ) |   |   | -100.0 | % |
| Other:                          |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Marketing                       |   |                        | 192    |   |   |   | 285 |   |   |   | (93 | ) |   |   | -32.6 | % |
| Consulting fees                 |   |                        | 123    |   |   |   | 162 |   |   |   | (39 | ) |   |   | -24.1 | % |
| Director fees                   |   |                        | 174    |   |   |   | 130 |   |   |   | 44 |   |   |   | 33.8 | % |
| Insurance expense               |   |                        | 195    |   |   |   | 130 |   |   |   | 65 |   |   |   | 50.0 | % |
| Bank service charges and fees   |   |                        | 296    |   |   |   | 155 |   |   |   | 141 |   |   |   | 91.0 | % |
| Deposit operations expense      |   |                        | 190    |   |   |   | 376 |   |   |   | (186 | ) |   |   | -49.5 | % |
| Charitable contributions        |   |                        | 75     |   |   |   | 200 |   |   |   | (125 | ) |   |   | -62.5 | % |
| All other                       |   |                        | 1,084  |   |   |   | 1,200 |   |   |   | (116 | ) |   |   | -9.7 | % |
| Total other                     |   |                        | 2,329  |   |   |   | 2,638 |   |   |   | (309 | ) |   |   | -11.7 | % |
| Total noninterest expense       |   | $                           | 13,762 |   |   | $ | 26,298 |   |   | $ | (12,536 | ) |   |   | -47.7 | % |

----

Index

----

Index

----

Index

| Commercial loans:                                 |   | June 30, 2010 |    |   | December 31, 2009 |   |
|---------------------------------------------------|--------|---------------|---------|--------|-------------------|--------|
|                                              |   |  $       |    |   |              | %      |   |   |  $ |   |   |   | % |   |
| Finance and insurance                             |   | $             | 92,473  |   |              |   | 27 | % |   | $ | 88,960 |   |   |   | 25 | % |
| Real estate and rental/leasing                    |   |          | 40,123  |   |              |   | 12 | % |   |   | 42,747 |   |   |   | 12 | % |
| Manufacturing                                     |   |          | 32,375  |   |              |   | 9 | % |   |   | 41,112 |   |   |   | 12 | % |
| Publishing, broadcasting and information services |   |          | 28,917  |   |              |   | 8 | % |   |   | 28,987 |   |   |   | 8 | % |
| Construction                                      |   |          | 9,298   |   |              |   | 3 | % |   |   | 5,019 |   |   |   | 1 | % |
| Wholesale trade                                   |   |          | 14,815  |   |              |   | 4 | % |   |   | 10,946 |   |   |   | 3 | % |
| Building trades                                   |   |          | 16,360  |   |              |   | 5 | % |   |   | 20,121 |   |   |   | 6 | % |
| Transportation and warehousing                    |   |          | 12,336  |   |              |   | 3 | % |   |   | 12,367 |   |   |   | 3 | % |
| Retail                                            |   |          | 9,361   |   |              |   | 3 | % |   |   | 10,125 |   |   |   | 3 | % |
| Arts, entertainment and recreation                |   |          | 13,973  |   |              |   | 4 | % |   |   | 11,091 |   |   |   | 3 | % |
| Other                                             |   |          | 74,093  |   |              |   | 22 | % |   |   | 85,545 |   |   |   | 24 | % |
|                                              |   | $             | 344,124 |   |              |   | 100 | % |   | $ | 357,020 |   |   |   | 100 | % |

| Construction, land, and land development loans: |   | June 30, 2010 |    |   | December 31, 2009 |   |
|-------------------------------------------------|--------|---------------|---------|--------|-------------------|--------|
|                                            |   |  $       |    |   |              | %      |   |   |  $ |   |   |   | % |   |
| Land development:                               |   |          |    |   |              |   |   |   |   |   |   |   |   |   |
| 1-4 family                                      |   | $             | 18,607  |   |              |   | 14 | % |   | $ | 19,092 |   |   |   | 13 | % |
| Other construction and development              |   |          | 31,350  |   |              |   | 24 | % |   |   | 38,863 |   |   |   | 26 | % |
| Land:                                           |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Agricultural                                    |   |          | 11,413  |   |              |   | 9 | % |   |   | 12,798 |   |   |   | 8 | % |
| Construction:                                   |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| 1-4 family:                                     |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Owner occupied                                  |   |          | 7,458   |   |              |   | 6 | % |   |   | 4,325 |   |   |   | 3 | % |
| Nonowner occupied                               |   |          | 10,771  |   |              |   | 8 | % |   |   | 20,466 |   |   |   | 14 | % |
| Multifamily                                     |   |          | 4,806   |   |              |   | 3 | % |   |   | 8,899 |   |   |   | 6 | % |
| Industrial, commercial and other                |   |          | 46,884  |   |              |   | 36 | % |   |   | 44,062 |   |   |   | 30 | % |
|                                            |   | $             | 131,289 |   |              |   | 100 | % |   | $ | 148,505 |   |   |   | 100 | % |

| Commercial real estate loans: |   | June 30, 2010 |    |   | December 31, 2009 |   |
|-------------------------------|--------|---------------|---------|--------|-------------------|--------|
|                          |   |  $       |    |   |              | %      |   |   |  $ |   |   |   | % |   |
| Owner occupied                |   | $             | 200,464 |   |              |   | 51 | % |   | $ | 203,432 |   |   |   | 49 | % |
| Nonowner occupied:            |   |          |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Medical/retirement            |   |          | 51,453  |   |              |   | 13 | % |   |   | 51,731 |   |   |   | 13 | % |
| Retail                        |   |          | 42,430  |   |              |   | 11 | % |   |   | 47,225 |   |   |   | 12 | % |
| Multifamily                   |   |          | 33,917  |   |              |   | 9 | % |   |   | 34,321 |   |   |   | 8 | % |
| Office                        |   |          | 23,946  |   |              |   | 6 | % |   |   | 38,424 |   |   |   | 9 | % |
| Warehouse                     |   |          | 14,289  |   |              |   | 4 | % |   |   | 15,123 |   |   |   | 4 | % |
| Hotel                         |   |          | 8,630   |   |              |   | 2 | % |   |   | 8,440 |   |   |   | 2 | % |
| Other                         |   |          | 16,834  |   |              |   | 4 | % |   |   | 13,743 |   |   |   | 3 | % |
| Total nonowner occupied       |   |          | 191,499 |   |              |   | 49 | % |   |   | 209,007 |   |   |   | 51 | % |
|                          |   | $             | 391,963 |   |              |   | 100 | % |   | $ | 412,439 |   |   |   | 100 | % |

----

Index

|                                                |   | June 30, 2010 |   |   | December 31, 2009 |   |   | Change |   |
|-----------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|--------|--------|--------|
| Nonaccrual loans:                                   |   |          |   |   |              |   |   |   |   |
| Commercial                                          |   | $             | 7,106  |   |              | $      | 9,846  |   |   | $ | (2,740 | ) |
| Real estate:                                        |   |          |   |   |              |   |   |   |   |   |   |   |
| Construction, land, and land development            |   |          | 361    |   |              |   | 1,399  |   |   |   | (1,038 | ) |
| 1-4 family residential                              |   |          | 711    |   |              |   | 863    |   |   |   | (152 | ) |
| Commercial                                          |   |          | 2,113  |   |              |   | 214    |   |   |   | 1,899 |   |
| Consumer and other loans                            |   |          | 1,154  |   |              |   | 28     |   |   |   | 1,126 |   |
| Total nonaccrual loans                              |   |          | 11,445 |   |              |   | 12,350 |   |   |   | (905 | ) |
| Loans past due 90 days and still accruing interest: |   |          |   |   |              |   |   |   |   |   |   |   |
| Commercial                                          |   |          | -      |   |              |   | -      |   |   |   | - |   |
| Real estate:                                        |   |          |   |   |              |   |   |   |   |   |   |   |
| Construction, land, and land development            |   |          | -      |   |              |   | -      |   |   |   | - |   |
| 1-4 family residential                              |   |          | -      |   |              |   | -      |   |   |   | - |   |
| Commercial                                          |   |          | 158    |   |              |   | -      |   |   |   | 158 |   |
| Consumer and other loans                            |   |          | -      |   |              |   | 1,150  |   |   |   | (1,150 | ) |
| Total past due 90 days and still accruing interest  |   |          | 158    |   |              |   | 1,150  |   |   |   | (992 | ) |
| Trouble debt restructured loans:                    |   |          |   |   |              |   |   |   |   |   |   |   |
| Commercial                                          |   |          | 973    |   |              |   | 6,168  |   |   |   | (5,195 | ) |
| Real estate:                                        |   |          |   |   |              |   |   |   |   |   |   |   |
| Construction, land, and land development            |   |          | 1,205  |   |              |   | 84     |   |   |   | 1,121 |   |
| 1-4 family residential                              |   |          | 521    |   |              |   | 523    |   |   |   | (2 | ) |
| Commercial                                          |   |          | 9,483  |   |              |   | 6,024  |   |   |   | 3,459 |   |
| Consumer and other loans                            |   |          | 157    |   |              |   | 18     |   |   |   | 139 |   |
| Total troubled debt restructured loans              |   |          | 12,339 |   |              |   | 12,817 |   |   |   | (478 | ) |
| Total nonperforming loans                           |   |          | 23,942 |   |              |   | 26,317 |   |   |   | (2,375 | ) |
| Other real estate owned                             |   |          | 24,637 |   |              |   | 25,350 |   |   |   | (713 | ) |
| Nonaccrual investment securities                    |   |          | 1,659  |   |              |   | 1,282  |   |   |   | 377 |   |
| Total nonperforming assets                          |   | $             | 50,238 |   |              | $      | 52,949 |   |   | $ | (2,711 | ) |
|                                                |   |          |   |   |              |   |   |   |   |   |   |   |
|                                                |   |          |   |   |              |   |   |   |   |   |   |   |
| Nonperforming loans to total loans                  |   |          | 2.49   | %      |              |   | 2.58   | %      |   |   | -0.09 | % |
| Nonperforming assets to total assets                |   |          | 3.12   | %      |              |   | 3.36   | %      |   |   | -0.24 | % |

----

Index

|                                                                                      |   | Nonaccrual |   |   | Loans Past Due 90 Days and Still Accruing Interest |   |   | Troubled Debt Restructured |   |   | Total Nonperforming Loans |   |   | Other Real Estate Owned |   |   | Nonaccrual lnvestment Securities |   |   | Total Nonperforming Assets |   |
|-------------------------------------------------------------------------------------------|--------|------------|--------|--------|----------------------------------------------------|--------|--------|----------------------------|--------|--------|---------------------------|--------|--------|-------------------------|--------|--------|----------------------------------|--------|--------|----------------------------|--------|
| Balance at beginning of period                                                            |   | $          | 12,350 |   |                                               | $      | 1,150  |                       |   | $      | 12,817                    |   |   | $                       | 26,317 |   |                             | $      | 25,350 |                       |   | $ | 1,282 |   |   | $ | 52,949 |   |
| Increase in fair market value                                                             |   |       | -      |   |                                               |   | -      |                       |   |   | -                         |   |   |                    | -      |   |                             |   | -      |                       |   |   | 86 |   |   |   | 86 |   |
| Additions                                                                                 |   |       | 3,357  |   |                                               |   | 2,200  |                       |   |   | 5,009                     |   |   |                    | 10,566 |   |                             |   | 4,753  |                       |   |   | 625 |   |   |   | 15,944 |   |
| Transfers:                                                                                |   |       |   |   |                                               |   |   |                       |   |   |                      |   |   |                    |   |   |                             |   |   |                       |   |   |   |   |   |   |   |   |
|             Past due to nonaccrual |   |       | 1,447  |   |                                               |   | (1,447 | )                          |   |   | -                         |   |   |                    | -      |   |                             |   | -      |                       |   |   | - |   |   |   | - |   |
|     Troubled debt to nonaccrual                                            |   |       | 55     |   |                                               |   | -      |                       |   |   | (55                       | )      |   |                    | -      |   |                             |   | -      |                       |   |   | - |   |   |   | - |   |
|             Nonaccrual to OREO     |   |       | (1,146 | )      |                                               |   | -      |                       |   |   | -                         |   |   |                    | (1,146 | )      |                             |   | 1,146  |                       |   |   | - |   |   |   | - |   |
| Upgrade in classification                                                                 |   |       | (712   | )      |                                               |   | (1,550 | )                          |   |   | (5,246                    | )      |   |                    | (7,508 | )      |                             |   | -      |                       |   |   | - |   |   |   | (7,508 | ) |
| Sales                                                                                     |   |       | -      |   |                                               |   | -      |                       |   |   | -                         |   |   |                    | -      |   |                             |   | (5,950 | )                          |   |   | (146 | ) |   |   | (6,096 | ) |
| Subsequent writedowns/impairment                                                          |   |       | -      |   |                                               |   | -      |                       |   |   | -                         |   |   |                    | -      |   |                             |   | (662   | )                          |   |   | (188 | ) |   |   | (850 | ) |
| Charge-offs                                                                               |   |       | (1,265 | )      |                                               |   | (8     | )                          |   |   | -                         |   |   |                    | (1,273 | )      |                             |   | -      |                       |   |   | - |   |   |   | (1,273 | ) |
| Payments                                                                                  |   |       | (2,641 | )      |                                               |   | (187   | )                          |   |   | (186                      | )      |   |                    | (3,014 | )      |                             |   | -      |                       |   |   | - |   |   |   | (3,014 | ) |
| Balance at end of period                                                                  |   | $          | 11,445 |   |                                               | $      | 158    |                       |   | $      | 12,339                    |   |   | $                       | 23,942 |   |                             | $      | 24,637 |                       |   | $ | 1,659 |   |   | $ | 50,238 |   |

|                                           |   | June 30, 2010 |   |   | December 31, 2009 |   |
|------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
| Construction, land development, and other land |   | $             | 13,427 |   |              | $      | 8,596 |   |
| 1-4 family residential properties              |   |          | 277    |   |              |   | 1,853 |   |
| Multifamily                                    |   |          | 1,859  |   |              |   | 2,065 |   |
| Commercial properties                          |   |          | 9,074  |   |              |   | 12,836 |   |
|                                           |   | $             | 24,637 |   |              | $      | 25,350 |   |

----

Index

----

Index

----

Index

|                                     |   | Actual |    |   | For CapitalAdequacy Purposes |   |   | To Be Well-Capitalized UnderPrompt CorrectiveAction Provisions |   |
|------------------------------------------|--------|--------|---------|--------|------------------------------|--------|--------|----------------------------------------------------------------|--------|
|                                     |   | Amount |    |   | Ratio                        |   |   | Amount                                                         |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
| As of June 30, 2010:                     |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |
| Total Capital (to Risk-Weighted Assets)  |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |
| Consolidated                             |   | $      | 173,650 |   |                         |   | 15.6   | %                                                              |   | $ | 89,024 |   |   |   | 8.0 | % |   |   | n/a |   |   |   | n/a |   |
| West Bank                                |   |   | 169,858 |   |                         |   | 15.3   |                                                           |   |   | 88,631 |   |   |   | 8.0 |   |   | $ | 110,789 |   |   |   | 10.0 | % |
|                                     |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier I Capital (to Risk-Weighted Assets) |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                             |   |   | 159,651 |   |                         |   | 14.3   |                                                           |   |   | 44,512 |   |   |   | 4.0 |   |   |   | n/a |   |   |   | n/a |   |
| West Bank                                |   |   | 145,920 |   |                         |   | 13.2   |                                                           |   |   | 44,316 |   |   |   | 4.0 |   |   |   | 66,473 |   |   |   | 6.0 |   |
|                                     |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier I Capital (to Average Assets)       |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                             |   |   | 159,651 |   |                         |   | 9.6    |                                                           |   |   | 66,388 |   |   |   | 4.0 |   |   |   | n/a |   |   |   | n/a |   |
| West Bank                                |   |   | 145,920 |   |                         |   | 8.8    |                                                           |   |   | 66,201 |   |   |   | 4.0 |   |   |   | 82,751 |   |   |   | 5.0 |   |
|                                     |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As of December 31, 2009:                 |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Capital (to Risk-Weighted Assets)  |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                             |   | $      | 172,217 |   |                         |   | 14.3   | %                                                              |   | $ | 96,441 |   |   |   | 8.0 | % |   |   | n/a |   |   |   | n/a |   |
| West Bank                                |   |   | 166,795 |   |                         |   | 13.9   |                                                           |   |   | 95,991 |   |   |   | 8.0 |   |   | $ | 119,989 |   |   |   | 10.0 | % |
|                                     |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier I Capital (to Risk-Weighted Assets) |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                             |   |   | 157,098 |   |                         |   | 13.0   |                                                           |   |   | 48,220 |   |   |   | 4.0 |   |   |   | n/a |   |   |   | n/a |   |
| West Bank                                |   |   | 141,745 |   |                         |   | 11.8   |                                                           |   |   | 47,995 |   |   |   | 4.0 |   |   |   | 71,993 |   |   |   | 6.0 |   |
|                                     |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier I Capital (to Average Assets)       |   |   |    |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                             |   |   | 157,098 |   |                         |   | 9.8    |                                                           |   |   | 64,180 |   |   |   | 4.0 |   |   |   | n/a |   |   |   | n/a |   |
| West Bank                                |   |   | 141,745 |   |                         |   | 8.9    |                                                           |   |   | 64,013 |   |   |   | 4.0 |   |   |   | 80,016 |   |   |   | 5.0 |   |

Ite

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Index

Ite

Par

Ite

Ite

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Index

Ite

| Exhibits | Description                                                                                                                                       |
|----------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| 12       | Computation of Ratios of Earnings (Loss) to Fixed Charges and Preferred Dividends                                                                 |
| 31.1     | Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002                                                      |
| 31.2     | Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002                                                      |
| 32.1     | 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 2002 |
| 32.2     | 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 |

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Index

SIGN

| West Bancorporation, Inc. |   |                                                 |   |
|---------------------------|--------|------------------------------------------------------|--------|
| (Registrant)              |   |                                                 |   |
|                      |   |                                                 |   |
|                      |   |                                                 |   |
| July 30, 2010             | By:    | /s/ David D. Nelson                                  |   |
| Date                      |   | David D. Nelson                                      |   |
|                      |   | Chief Executive Officer and President                |   |
|                      |   |                                                 |   |
| July 30, 2010             | By:    | /s/ Douglas R. Gulling                               |   |
| Date                      |   | Douglas R. Gulling                                   |   |
|                      |   | Executive Vice President and Chief Financial Officer |   |
|                      |   | (Principal Accounting Officer)                       |   |
|                      |   |                                                 |   |

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Index

EXHI

| Exhibit No. | Description                                                                                                                                       | Page Number |
|-------------|---------------------------------------------------------------------------------------------------------------------------------------------------|-------------|
| 12          | Ratios of Earnings (Loss) to Fixed Charges and Preferred Dividends                                                                                | 45          |
| 31.1        | Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002                                                      | 46          |
| 31.2        | Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002                                                      | 47          |
| 32.1        | 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 2002 | 48          |
| 32.2        | 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 | 49          |

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