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West Bank announces plan to sell preferred stock, raise capital

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West Bancorporation Inc., the holding company for West Bank in West Des Moines, has announced it intends to seek shareholder approval to authorize issuance of preferred stock so that it can participate in the Treasury Department’s Capital Purchase Program.

Though both the holding company and the bank’s capital ratios are above those needed to be considered well-capitalized, “[r]aising capital under the Treasury’s program would provide the Company and West Bank additional strength to face this challenging environment,” the company said in a release.

The company’s board of directors on Thursday passed a resolution to adopt an amendment to the corporation’s restated articles of incorporation and calling for a special shareholders meeting in December.

West Bancorporation would be eligible to raise between $12 million and $36 million of additional capital under the Treasury program, the company estimated, “at a cost that may be significantly lower than the cost of capital otherwise available at this time.” The minimum subscription amount under the program is 1 percent of a bank’s risk-weighted assets, up to the lesser of $25 billion or 3 percent of risk-weighted assets.

Banks have until Nov. 14 to submit applications for the Capital Purchase Program.