West Bancorporation Inc. this morning reported a net loss of $22.3 million for the second quarter of 2009, due primarily to recognizing a goodwill impairment of $23 million and loan-loss provisions for the quarter totaling $15 million.

The net loss was in contrast to net income of $4.5 million for the second quarter of 2008 for the West Des Moines-based company. The common stock loss per share for the second quarter of 2009, after a preferred stock dividend of $450,000 and preferred stock discount amortization of $120,000, was $1.32, compared with earnings of 26 cents per share for the second quarter of 2008.

The parent company of West Bank and WB Capital Management Inc. had earlier this month announced a preliminary loss of $5.4 million, but said that figure would likely change following a review of its goodwill by a third-party valuation firm. That process was required because the price of its publicly traded stock had fallen below its book value.

Goodwill, the difference between the purchase price and the sum of the fair value of the net assets of an acquired company, must be accounted for as an intangible asset by the acquiring company. West Bancorporation’s goodwill resulted from its acquisitions of Hawkeye State Bank in Iowa City and two investment firms that it purchased and combined to form WB Capital Management.

“It has not been unusual for companies that have made acquisitions in the past few years to be experiencing goodwill impairment during these economic times,” Doug Gulling, West Bancorporation’s executive vice president and chief financial officer, said in a press release. “It is important to note that the charge does not impact the company’s tangible equity and has a negligible impact on its regulatory capital ratios.”

West Bancorporation’s goodwill consisted of $13.3 million associated with the acquisition of Hawkeye State Bank in 2003, and $11.6 million associated with the acquisitions of VMF Capital in 2003 and Investors Management Group, Ltd. in 2005. All of the goodwill associated with the bank acquisition has been impaired, and $9.7 million of the goodwill associated with WB Capital has been impaired, the company said.

The turmoil brought a management shakeup, with “a collective focus to return to profitability and increase shareholder value,” the company said earlier this month. On July 15, West Bancorporation’s board of directors announced it had accepted the resignation of Tom Stanberry, who had served as the company’s chairman, CEO and president for the past five years. The board named Jack Wahlig as chairman of the corporation’s board of directors and Robert Pulver as vice chairman. David R. Milligan, who retired as CEO and chairman of West Bank in 2004 after 26 years, returned to those positions on an interim basis.

The bank’s second-quarter provision for loan losses combined with the first quarter provision of $3.5 million resulted in a year-to-date provision of $18.5 million. The second-quarter provision of $15 million was the result of net loans charged off during the quarter that totaled $9.4 million, including $4.6 million to one customer, and continued deterioration in collateral values on certain loans, the company said.

“Additions to the loan loss reserves reflect our thorough and aggressive stance to monitor loans that show signs of stress,” Milligan said in the release. “It is important to remember that, as a community bank, we reflect both the successes and struggles of our community.”

West Bank is one of Central Iowa’s largest financial institutions, with $1.5 billion in assets. During the first half of 2009, West Bank’s loans, not including those held for sale, grew by $14.6 million. Total deposits grew by $22.1 million. Non-performing assets were $64.3 million, or 4.25 percent of assets, as of June 30, compared with $35.8 million, or 2.3 percent of assets at the end of 2008.

Milligan said that he believes the allowance for loan losses, which for the first six months of 2009 was 2.11 percent of average loans outstanding, is adequate to absorb losses in the bank’s loan portfolio, although the economic environment will be a significant determinant of future provisions for loan losses. “Our opinion is that we have not seen a turn around in the economy at this point in time,” he said.

West Bancorporation will discuss its results for the second quarter and first half of 2009 during a conference call scheduled for 2 p.m. The telephone number for the conference call is (800) 860-2442. A recording of the call will be available until Aug. 14 at (877) 344-7529, passcode: 426995.