West Bank earnings grow on fees, investment gains

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West Bancorp. Inc., the parent company of West Des Moines State Bank, said second-quarter profits rose 6 percent as it collected more fees and profited from investments.

Net income grew to $4.25 million, or 26 cents per share, from $4 million, or 25 cents, a year ago. Total assets increased 5.9 percent to $863.9 million from $815.9 million.

The bank, which is among the nation’s most profitable, is increasing the sources from which it earns income, and it is also becoming more aggressive in making acquisitions.

On July 11, the company agreed to buy money manager Cedar Rapids-based VMF Capital LLC. A week later, it completed its purchase of Iowa City-based Hawkeye State Bank. That acquisition is expected to close Oct. 1. Combined, the two purchases will give West Bank more than $1 billion in assets.

“In this somewhat sluggish economy, we feel pretty good about the quarter,” said Doug Gulling, West Bancorp.’s chief financial officer.

The bank’s shares have risen about 20 percent in the past year.

West Non-interest income rose 9.6 percent to $1.22 million, mostly because more non-customers were using its automated teller machines. Bank also realized about $96,000 from gains on investments.

West Bank said it had invested in bank-owned life insurance during the first quarter to offset the cost of employee benefits, which have grown more expensive.

In July, the bank’s board of directors approved a proposal to increase the amount of life insurance the bank owns because the yield it earns on the investment is tax-free, the company said. “The size and the timing” of any increase is under consideration, West Bank said in a statement.

Net loans rose 4.1 percent to $500 million from $480.2 million during the same period last year. The total value of foreclosures during the quarter dropped to $522,000 from $800,000.