In just the first month since West Bancorporation Inc. completed its purchase of Investors Management Group, the synergy is already apparent, says Tom Stanberry.

“In addition to the growth that (our current investment management) clients are seeing, we’ve already seen them give us additional money to manage, and we think that’s going to continue,” said Stanberry, West Bancorporation’s chairman, president and CEO.

On Dec. 30, West Bancorporation, the West Des Moines-based parent company of West Bank and WB Capital Management, which does business as VMF Capital, completed its purchase of IMG from Rockford, Ill.-based Amcore Financial Inc. Now, the company is working on plans to merge VMF and IMG into one entity, WB Capital Management, by the end of this year.

“I think it’s an exciting venture for us,” Stanberry said. “There are not any Iowa-based banks that have the type of asset management capabilities that we do. And there are not many around the country our size that have these capabilities. It gives us a strong competitive advantage.”

With assets of more than $1.24 billion, West Bancorporation reported net income of $20.1 million in 2005, a 7.8 percent increase over 2004. Earnings per share were $1.20 in 2005 compared with $1.11 the previous year. A large portion of that increase was attributable to higher net interest income, driven in large part by loan growth of 22 percent, the company said.

When West Bancorporation acquired VMF Capital in late 2004, VMF was already the largest independently owned Iowa-based asset manager, with $329 million under management.

“Just from a numbers standpoint, they’ve exceeded our expectations, both in terms of assets under management and bottom line,” said Doug Gulling, West Bancorporation’s chief financial officer. “At the end of (2005), they’re right around $800 million under management, so that’s more than a 100 percent increase.”

VMF has also was recognized by Pensions & Investments magazine in both 2004 and 2005 for its small-cap and mid-cap stock fund performance, Gulling noted.

“I think they’ve been a tremendous addition,” Stanberry said. “Their culture is as close a match as you would ever find between an asset management company and a community bank. They’ve been a good partner for a lot of our mutual clients, bringing business to the bank as well as accepting referrals from us. Their professional approach to things has been a good complement for our bank customers.”

West Bancorporation began looking into a second non-bank acquisition in late 2004, and became aware of Amcore’s desire to sell IMG in the second quarter of 2005.

“We had been looking for additional sources of non-interest income, and the asset management area was particularly interesting to us,” said Stanberry, a former investment banker who joined the company in March 2003 from U.S. Bancorp Piper Jaffray. “We understand the business, and we think it’s complementary to the wealth management area as well as the business banking area.”

IMG’s $3.8 billion in assets under management includes $1.1 billion in Amcore’s bond portfolio and in the Vintage fixed-income mutual funds that IMG will continue to sell at Amcore branches. Gulling said West Bank will not offer those funds at its branches because it would require its employees to obtain specialized securities licenses. However, some of the bank’s trust clients might find the Vintage funds useful, he said.

IMG is also one of a handful of companies in the country specializing in the management of pooled public investment funds for cities, counties and school districts. It handles investment pools for four states’ pools, among them the Iowa Public Agency Investment Trust, for which it manages two pooled fixed-income funds with net assets totaling $245 million.

Stanberry said he expects to have a preliminary plan for merging VMF and IMG sometime in March.

“For existing clients, there will be very little change for them,” he said. “Their portfolio managers will likely be the same; their client contact people will remain the same. There probably will be some additional capabilities as a result of merging the two. It’s possible that a customer we’re doing business with today in a fairly narrow range of business might be able to take advantage of some broader opportunities. I think from a new-business standpoint, the combined business will have a stronger sales capability than either one has today.”

Stanberry said West Bancorporation currently has no plans to seek acquisitions in other financial services areas, in part because it doesn’t want to compete with clients in areas such as insurance or real estate brokerage.

On the banking side, West Bank plans to open additional branches within Greater Des Moines, though the specific locations have yet to be decided, he said. “The areas are the ones you would suspect, all the growing areas,” he said.

Stanberry said he’d like to make another bank acquisition to grow in other Iowa markets, similar to the 2003 purchase of Hawkeye State Bank that gave West Bank a presence in Eastern Iowa. However, there aren’t any candidates of the right size and location on the market right now, he said.

“And prices have become quite inflated, which I think is a factor of banks in very hot markets in the Southeast and Southwest being sold at great multiples and people stand back and thinking, ‘Well, why can’t I sell my bank for that in the Midwest?’”