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West Bancorporation to sell WB Capital Management


West Bancorporation Inc. announced this morning a definitive agreement to sell its wholly owned investment management subsidiary, WB Capital Management Inc., to Miles Capital Holdings Inc.

The independent asset management company will be under the direction of David Miles, a longtime asset manager in Greater Des Moines.

“We did not set out to sell WB Capital; we were approached by various parties,” said Doug Gulling, West Bancorporation’s chief financial officer. “After evaluating those (offers), we decided we would divest and concentrate on being just a community bank.”

The sale, which is subject to approval by a “requisite percentage” of WB Capital clients, would make Miles Capital Holdings one of the largest independent asset management firms in Iowa, with more than $4.6 billion under management.

Gulling said financial terms of the transaction, which is expected to close by Dec. 31, will be disclosed in a filing with the U.S. Securities and Exchange Commission within the next few days.

West Bancorporation’s move follows a second-quarter loss of $22.3 million announced in July, which was due in part to recognition of impairment of goodwill earlier this year after the company’s stock price fell below its book value.

A portion of that goodwill was recorded when the company acquired two investment management firms that were merged to form WB Capital Management four years ago. In July, West Bancorporation had announced that $9.7 million of the goodwill associated with the formation of WB Capital has been impaired due to economic conditions.

Based in West Des Moines, West Bancorporation is the holding company for West Bank.

Following the sale, Miles Capital Management will continue to manage investments for West Bank’s $50 million trust department portfolio, as well as West Bank’s $250 million investment portfolio.

David Miles joined Investors Management Group (IMG) in 1987 and acquired controlling interest of the firm in 1991. Under his leadership, IMG became one of the state’s largest independent asset management firms before it was sold to AMCORE Financial in 1998. West Bancorporation bought the firm in 2005, combining it with VMF Capital to form WB Capital.

“We have great respect for David Miles and are delighted that our company and our state will benefit from having an independent asset management company headquartered in Iowa,” Jack Wahlig, West Bancorporation’s chairman, said in a press release.

In a phone interview, Wahlig said the sale will “let us concentrate on our core competency, which is being a good community bank.

“As we thought about strategy going forward; our competency is really community banking as opposed to asset management,” he said. “We’re going back to our roots, back to what we know and do well.”

Wahlig said approval for the transaction is needed from at least 90 percent of the group of clients that make up the largest part of asset management revenue.

To facilitate the transfer, West Bancorporation also announced that it has named Miles president and CEO of WB Capital, effective immediately. Miles was managing director of the Miles Group, a West Des Moines private-equity investment firm, since leaving IMG in 2003. The firm currently has 24 employees.

“I’m thrilled to rejoin the organization, and I think there is a strong need for an independent investment adviser in Iowa,” Miles said. “We just look forward to our opportunities to serve clients as we grow the firm.”

The management team includes Amy Mitchell, chief administrative officer, Tom Myers, equity manager, and Laurie Mardis, fixed income manager. Vera Lichtenberger continues as chief compliance officer.

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