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July 19, 2007 - West Bancorporation, Inc. Announces Quarterly Cash Dividend and Results for 2nd Quarter and First Half of 2007

WEST DES MOINES, IA – West Bancorporation, Inc. (Nasdaq: WTBA) (the “Company”), parent company of West Bank and WB Capital Management Inc., reports net income of $5,127,000, or $0.29 per share, for the second quarter of 2007, compared to $4,882,000 or $0.28 per share for the second quarter of 2006. The annualized returns on average equity and average assets were 17.80 percent and 1.55 percent, respectively. For the second quarter of 2006, the annualized returns on average equity and average assets were 18.56 percent and 1.49 percent, respectively.
For the first half of 2007, net income was $9,571,000, or $0.55 per share, up from $9,427,000 or $0.54 per share for the first half of 2006. The annualized returns on average equity and average assets were 16.84 percent and 1.47 percent, respectively. For the first half of 2006, the annualized returns on average equity and average assets were 18.09 percent and 1.47 percent, respectively.
During the second quarter, several large construction loan payoffs outpaced new loan originations. Consequently, loans outstanding as of June 30, 2007 totaled $937.3 million, down from $946.7 million at the end of the first quarter. A year ago, loans totaled $948.6 million. West Bank has new loans in process which should result in modest loan growth in the third quarter.
Loan quality remains good. At June 30, 2007, non-accrual loans totaled $605,000, loans past due 90 days or more and still accruing interest were $31,000 and other real estate owned was $154,000. Those three categories combined represent non-performing assets and total $790,000. That is the lowest dollar amount of non-performing assets West Bank has experienced in at least the past 5 years. During the second quarter, West Bank sold farmland that had been carried as other real estate owned at a gain of $250,000. The allowance for loan losses as a percent of total loans was 0.94 percent as of June 30, 2007 compared to 0.89 percent a year earlier. Non-performing assets as a percentage of loans at June 30, 2007 were 0.08 percent, compared to 0.49 percent a year ago. As a result of the decrease in loans outstanding and the improvement in loan quality measures, the provision for loan losses for the first half of 2007 was $650,000, down from $900,000 for the same period last year.
The net interest margin for the first half of 2007 was 3.29 percent, which was 10 basis points lower than a year ago. This decline contributed to the $281,000 reduction in net interest income compared to the first half of 2006. The net interest margin has declined over the past year because the cost of funds (deposits and borrowings) has increased faster than the yield on earning assets (loans and investments). At this point in time, except for the impact of any changes in interest rates by the Federal Reserve, it appears any further erosion of the net interest margin should be limited to the impact of those customers who may switch funds from lower earning deposit accounts, such as savings and money market accounts, into certificates of deposit which typically have a higher interest rate.
Total deposits are $172 million lower than a year ago. Most of the decline has been in wholesale deposits such as public funds. Compared to a year ago, it has been more advantageous to use borrowings as a funding source rather than wholesale deposits.
WB Capital Management Inc. (“WB Capital”) had approximately $4.4 billion in assets under management as of June 30, 2007. A year ago, assets under management totaled approximately $4.5 billion. Expenses at WB Capital are down 3.6 percent compared to a year ago, which represents the cost savings that were achieved as a result of VMF Capital and Investors Management Group merging to form WB Capital in the fourth quarter of last year. However, revenues were also lower than a year ago, primarily due to decisions made to reduce the fees on the Vintage Fund mutual funds. Generally, the performance yields of the investment strategies employed by WB Capital exceed their comparative benchmarks. As a result, certain investment strategies are gaining more recognition by the investment community.
On July 18, 2007, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.16 per share. The dividend is payable on August 15, 2007 to shareholders of record on July 30, 2007. As of July 18, 2007, there were 17,536,682 shares of common stock outstanding.
The Company will discuss its results for the second quarter and first half of 2007 in a conference call scheduled for 2:00 pm central time on Thursday, July 19, 2007. The telephone number for the conference call is 877-407-0778. A recording of the call will be available until July 27, 2007 by dialing 877-660-6853. The following is required to access the recording: account # 286, conference ID # 226743.
West Bancorporation, Inc. is headquartered in West Des Moines, Iowa. Serving Iowans since 1893, West Bank, a wholly owned subsidiary of West Bancorporation, Inc., is a community bank that focuses on lending, deposit services and trust services for consumers and small to medium sized businesses. The Bank has two full-service offices in Iowa City, one full-service office in Coralville, and seven full-service offices in the greater Des Moines area. WB Capital Management Inc., a wholly owned subsidiary of West Bancorporation, Inc., has offices in West Des Moines and Coralville, and provides portfolio management services to individuals, retirement plans, corporations, public funds, mutual funds, foundations, endowments and high net worth individuals.
The information contained in this Press Release may contain forward-looking statements about the Company’s growth and acquisition strategies, new products and services, and future financial performance, including earnings and dividends per share, return on average assets, return on average equity, efficiency ratio and capital ratio. Certain statements in this news release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking information is based upon certain underlying assumptions, risks and uncertainties. Because of the possibility of change in the underlying assumptions, actual results could differ materially from these forward-looking statements. Risks and uncertainties that may affect future results include: competitive pressures, pricing pressures on loans and deposits, actions of bank and non-bank competitors, changes in local and national economic conditions, changes in regulatory requirements, actions of the Securities and Exchange Commission and/or the Federal Reserve Board, and customers’ acceptance of the Company’s products and services. The Company undertakes no obligation to revise or update such statements to reflect current events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
WEST BANCORPORATION, INC. AND SUBSIDIARIES
Financial Information (unaudited)
(in thousands, except per share data)
June 30, June 30,
CONSOLIDATED STATEMENTS OF CONDITION 2007 2006
Assets
Cash and due from banks $27,329 $33,946
Short-term investments 9,555 31,766
Securities 253,376 269,147
Loans 937,257 948,590
Allowance for loan losses (8,779) (8,440)
Loans, net 928,478 940,150
Other assets 75,996 72,245
Total assets $1,294,734 $1,347,254
Liabilities and Stockholders’ Equity
Deposits:
Noninterest-bearing $187,575 $192,909
Interest-bearing
Demand 69,401 44,416
Savings 216,376 281,920
Time, in excess of $100,000 220,414 308,617
Other time 163,938 201,397
Total deposits 857,704 1,029,259
Short-term borrowings 184,920 105,073
Long-term borrowings 124,119 99,030
Other liabilities 11,637 7,212
Stockholders’equity 116,354 106,680
Total liabilities and stockholders’ equity $1,294,734 $1,347,254
PER COMMON SHARE MARKET INFORMATION
Net Income Dividends High Low
2007
1st quarter $0.25 $0.160 $18.25 $14.29
2nd quarter 0.29 0.160 16.36 14.17
2006
1st quarter $0.26 $0.152 $18.95 $16.67
2nd quarter 0.28 0.152 19.98 15.24
3rd quarter 0.28 0.160 18.10 15.61
4th quarter 0.29 0.160 19.02 16.69
(1) The prices shown are the high and low sale prices for the Company’s
common stock, which trades on the NASDAQ Global Market, under the
symbol WTBA. The market quotations, reported by NASDAQ, do not
include retail markup, markdown or commissions.
WEST BANCORPORATION, INC. AND SUBSIDIARIES
Financial Information (continued) (unaudited)
(in thousands, except per share data)
Three months ended Six months ended
June 30, June 30,
CONSOLIDATED STATEMENTS OF INCOME 2007 2006 2007 2006
Interest income
Loans $17,932 $17,036 $35,036 $32,499
Securities 2,815 2,949 5,670 5,816
Other 271 219 560 345
Total interest income 21,018 20,204 41,266 38,660
Interest expense
Deposits 7,683 8,128 15,255 14,757
Short-term borrowings 1,843 858 3,526 1,784
Long-term borrowings 1,704 1,381 3,386 2,739
Total interest expense 11,230 10,367 22,167 19,280
Net interest income 9,788 9,837 19,099 19,380
Provision for loan losses 350 450 650 900
Net interest income after provision
for loan losses 9,438 9,387 18,449 18,480
Noninterest income
Service charges on deposit accounts 1,211 1,117 2,339 2,121
Trust services 188 195 369 363
Investment advisory fees 2,043 2,112 4,002 4,361
Increase in cash value of bank-owned
life insurance 219 213 435 422
Net realized losses from sales of
securities available for sale (13) (38) (9) (144)
Other income 387 361 769 718
Total noninterest income 4,035 3,960 7,905 7,841
Noninterest expense
Salaries and employee benefits 3,355 3,492 6,971 7,167
Occupancy 897 866 1,831 1,722
Data processing 473 506 940 985
Other expenses 1,183 1,318 2,620 2,620
Total noninterest expense 5,908 6,182 12,362 12,494
Income before income taxes 7,565 7,165 13,992 13,827
Income taxes 2,438 2,283 4,421 4,400
Net income $5,127 $4,882 $9,571 $9,427
PERFORMANCE HIGHLIGHTS
Return on average equity 17.80% 18.56% 16.84% 18.09%
Return on average assets 1.55% 1.49% 1.47% 1.47%
Net interest margin 3.33% 3.35% 3.29% 3.39%
Efficiency ratio 41.54% 43.35% 44.46% 44.25%
SOURCE West Bancorporation, Inc.
Contact: Doug Gulling, Executive Vice President and Chief Financial Officer of West Bancorporation, Inc., 515-222-2309