Edgar Filing: WEST BANCORPORATION INC

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FINANCIAL SOLUTIONS THAT ADD VALUE

(WEST BANCORPORATION LOGO)

West Bancorporation, Inc. | 2005 Annual Report

WEST BANCORPORATION, INC. & SUBSIDIARIES

FINANCIAL HIGHLIGHTS (dollars in thousands, except per share amounts)

2005 2004 2003 2002 2001
---------- ---------- ---------- -------- --------

YEAR-END BALANCES
Assets $1,244,380 $1,148,435 $1,000,612 $886,116 $815,970
Investment securities 274,718 347,052 274,913 212,292 189,473
Loans 867,504 725,845 599,355 488,453 493,399
Non-performing loans 4,912 860 1,793 1,899 1,274
Deposits 944,893 865,932 705,074 613,099 571,730
Stockholders' equity 104,521 97,620 92,896 85,824 79,012

AVERAGE BALANCES
Assets 1,192,208 1,066,511 932,907 837,938 837,798
Investment securities 313,015 301,718 246,823 213,361 203,137
Loans 785,164 645,875 531,033 482,013 495,825
Deposits 862,376 764,741 608,544 568,625 547,247
Stockholders' equity 100,392 94,209 88,742 81,904 74,977

RESULTS OF OPERATIONS
Net interest income 38,373 35,647 32,322 30,990 29,662
Provision for loan losses 1,775 1,200 850 910 1,063
Noninterest income 11,517 10,706 9,305 6,614 6,314
Noninterest expense 18,645 16,968 14,694 11,220 10,480
Income before taxes 29,470 28,185 26,083 25,474 24,433
Net income 20,075 18,614 17,283 16,376 15,736

PER COMMON SHARE(1)
Net income 1.20 1.11 1.02 0.97 0.93
Dividend 0.640 0.625 0.610 0.590 0.571
Book value 6.26 5.84 5.51 5.09 4.69
Closing price 18.70 17.61 16.46 14.46 11.24

RATIOS
Return on average equity 20.00% 19.76% 19.48% 19.99% 20.99%
Return on average assets 1.68% 1.75% 1.85% 1.95% 1.88%
Efficiency ratio 36.22% 35.78% 34.78% 29.19% 28.23%
Net interest margin 3.62% 3.71% 3.77% 3.97% 3.81%
Average equity as %
of average assets 8.42% 8.83% 9.51% 9.77% 8.95%
Allowance for loan losses
as % of average loans 0.97% 1.01% 1.13% 0.93% 0.86%
Net charge-offs as %
of average loans 0.09% 0.10% 0.05% 0.14% 0.21%
Non-performing loans
as % of loans 0.57% 0.12% 0.30% 0.39% 0.26%

(1) In July 2004, the Company's Board of Directors authorized a 5% common stock
dividend. Per share numbers in this report have been adjusted for that
stock dividend.

Shareholders' Letter

DEAR SHAREHOLDERS:

2005 was another successful year for West Bancorporation, Inc. Net income for
the Company was $20,075,000 or $1.20 per share, up 7.8 percent from $18,614,000
or $1.11 per share in 2004. Return on average equity was 20 percent and return
on average assets was 1.68 percent. The overall efficiency ratio was 36.22
percent, while the efficiency ratio for our subsidiary West Bank was 32.19
percent.

We continue to believe that working in partnership with each of our four
stakeholders is the key to our success. In 2005 we accomplished the following.

OUR SHAREHOLDERS. We paid a cash dividend of $.64 per share for a dividend yield
of 3.42 percent based on the year end closing stock price of $18.70. The total
return on an investment in our stock from January 1, 2005 through December 31,
2005 was 10 percent compared to the total return of the SNL Midwest Bank Index
of -3.6 percent. In 2005 we expanded the use of our new profitability and asset
liability management system which will allow us to make better use of our
income-producing assets for the benefit of our shareholders.

OUR EMPLOYEES. 2005 was noteworthy for the installation of systems to create and
manage checking and savings accounts for our clients in a manner that will allow
our employees to spend more time assisting our clients and less time managing
paperwork. We completed the remodeling of our 22nd Street bank, which included
the expansion of our employee break room, the creation of our conference center
and new trust facilities, and updating the first floor client area. Our employee
mission continues to be to provide a quality work environment in which our
employees can serve our clients in a fun, competitive and efficient manner.

OUR CLIENTS. The entities profiled in this report, Lutheran Services in Iowa and
The Mansion typify the close relationships we have with our many clients. Client
surveys, conducted in 2005, reinforced the concept that close relationships and
excellent service are expected by our clients. To improve our client service we
implemented a mystery shopping program in all of our branch offices. We saw
immediate results. As our mystery shopping results improved we experienced fewer
client problems and an increase in positive survey results from our clients.

OUR COMMUNITY. In 2005, we continued our focus on funding charitable
contributions and community service. Through the West Bancorporation Foundation,
we funded 56 charitable grants totaling $204,000. Several community projects
were accomplished as our employees contributed approximately 7,500 hours to
community service in our markets. As described on page six of our Annual Report,
these efforts were recognized by the United Way of Central Iowa with its 2005
Impact Award. Receipt of the Impact Award was a proud moment for all of us.

On December 30th, we completed the purchase of Investors Management Group, Ltd.
(IMG). IMG is a registered investment advisor headquartered in West Des Moines.
It currently manages approximately $3.8 billion for a variety of investors. In
late 2006 IMG will combine with VMF Capital, our other registered investment
advisor. The combined company will allow us to expand asset management solutions
for our clients and to make progress toward our vision of being the best
financial solutions company in our markets. We describe this latest acquisition
in more detail on page four of our Annual Report.

In 2006, we will focus on building client relationships and providing financial
solutions through superior service and a collaborative approach from each of our
business lines. We will also focus on enhancing the work experience of our
employees in a manner that will provide better solutions for our clients and
increase our shareholder value. Our market share expansion in both community
banking and the asset management business will continue as we deepen the
relationships with our current clients.

2006 will be a challenging year. We expect the increase in short-term interest
rates to abate early in the year and the rate of inflation to remain relatively
low. We also anticipate the level of foreign investment in the U.S. Treasury
market will keep the yield curve flat or inverted throughout the year, which
will reduce the largest driver of our net income - the net interest income from
the bank. We have implemented steps to reduce expenses in all business lines.
This expense reduction, when combined with the non-interest income from the bank
and our asset management companies, should produce positive results for us in
2006.

All of us at West Bank, VMF Capital and IMG look forward to delivering
exceptional service and financial solutions to our clients, and providing the
financial results that you, our shareholders, expect.

Very truly yours,

/s/ Thomas E. Stanberry
----------------------------------------
Thomas E. Stanberry
Chairman, President and Chief
Executive Officer

Adding value to our relationships with our customers

"IMG HAS CONSISTENTLY DELIVERED SOLID PERFORMANCE"

The acquisition of Investors Management Group (IMG) in 2005 has added an
important component to West Bancorporation's ability to offer customers a
complete, one-stop financial solutions resource. The acquisition, which became
final in December of 2005, complements the money management services currently
offered by the West Bank trust department and through our wholly-owned
subsidiary WB Capital Management Inc., doing business as VMF Capital.

"This transaction expands our comprehensive asset management solutions for
business and high net worth individual customers," explained Thomas E.
Stanberry.

(GROUP PHOTO)

(l to r) Tom Stanberry, West Bancorporation chairman, president and
CEO; Jeff Lorenzen, president and chief investment officer of IMG; and
Scott Eltjes, managing director and head of VMF Capital, gather at
IMG's West Des Moines office.

With assets under management of more than $3.8 billion, IMG's strength is
in managing fixed income assets. VMF Capital, which specializes in equity asset
management, has an additional $800 million in assets under management. IMG
currently has 26 employees in its West Des Moines Office. The company was
purchased from Rockford, Illinois-based AMCORE Financial, Inc. AMCORE Chairman,
President and CEO Kenneth E. Edge said, "IMG consistently has delivered solid
fixed-income performance and will be a good fit for West Bancorporation.
Headquartered in Iowa, West Bancorporation can better facilitate the expansion
of Des Moines-based IMG's institutional investment business."

Agreeing with that assessment, Stanberry further commented, "For over 20
years, IMG has been serving customers in the upper midwest, and we are pleased
to bring its ownership back home to Iowa. We have great respect for IMG's
business and team."

The acquisition fits nicely into the wealth management structure being
built by West Bancorporation. The West Bank trust department specializes in
helping individuals and families maximize their financial resources through
financial planning, asset management, trust administration and estate planning.
VMF Capital specializes in portfolio management services for individual
investors, retirement plans, corporations, foundations and endowments primarily
through domestic equity and fixed income strategies.

IMG will enhance the wealth management structure already in place, focusing
on long-term relationships with insurance companies, foundations and endowments,
public agencies, institutional financial consultants, and high net worth
individuals by managing portfolios primarily comprised of investment-grade
fixed-income assets.

"West Bancorporation's growth will continue to be driven by the addition of
products and services that add value to our customers," said Stanberry. "IMG
fits perfectly into that profile."

(GROUP PHOTO)

(l to r) Tina Gordinier, VMF Capital; Carol Stone, West Bank trust
department; Deb Gay and Mike Buck, Luthern Services in Iowa.

"THEY'VE BEEN QUICK TO UNDERSTAND OUR NEEDS AND BRING US SOLUTIONS"

Lutheran Services in Iowa (LSI) is the state's largest private non-profit
provider of human services. LSI improves the lives of more than 40,000 Iowans
every year with residential treatment, services to families, home health care,
early childhood programs, adoption services, refugee resettlement, services for
persons with disabilities, disaster response, and economic development community
programs. All this is accomplished with 750 employees in locations throughout
Iowa.

LSI's ability to continue to provide these crucial services year-to-year is
dependent upon being good financial stewards. To that end, they have turned to
the West Bank trust department and VMF Capital for asset management assistance.

"VMF Capital helps manage a portion of our investment portfolio," explained
Deb Gay, LSI's director of finance. "Our board establishes an investment policy
which we share with VMF. In turn, VMF invests our assets according to the
parameters of the policy for the best possible return."

Deb says working with Scott Eltjes and Tina Gordinier at VMF has been a
pleasure. "We recently had some statement and reporting problems," she said.
"Tina and Scott brought us technical solutions for the problems that have
resulted in better, more precise, more understandable summaries for our board
and investment committee to use."

They even presented LSI's investment committee with suggestions for
modifying and improving the organization's investment policy. "They've been
quick to understand our needs and bring us solutions," she said.

The organization and VMF also work with Carol Stone in West Bank's trust
department, which maintains custody of the securities and provides reporting
services. "We're glad they continue to place their confidence in us," commented
Carol Stone who heads the West Bank trust department. "We look forward to
working with them for many years to come."

"THEY'RE VERY PROACTIVE IN ANTICIPATING OUR NEEDS"

The Mansion is a fine furnishings and interior design firm that has a long,
successful track record. Originally opened in Iowa City in 1980 by Chuck
Skaugstad, Jr., The Mansion has now expanded into the Des Moines market with a
second location, owned and operated by Ted Irvine. Skaugstad describes the
second location as the "same business under the same name" which runs as a
partnership between Skaugstad and Irvine.

The expansion into the Des Moines market necessitated a new approach to the
company's banking requirements. Skaugstad credits the technology West Bank
brought to them for making it easier for his company to do business in two
markets.

"West Bank offered us the flexibility and structuring we needed to transact
business in both locations," he said. "They're very proactive in anticipating
our needs and presenting us with solutions we may not have even realized
existed."

Says Lynn Rowat, West Bank Eastern Iowa market president, "The Mansion is a
truly extraordinary place with which we have forged strong personal and business
relationships. If you build strong enough relationships, it really does make a
difference."

"We didn't shop around for a bank when we opened in Des Moines," said
Irvine. "I knew West Bank was the bank. They've always had a strong reputation
for local service and fair dealing with businesses like ours."

Irvine works with West Bank vice-president John Humeston. Both Skaugstad
and Irvine had worked with West Bank President Brad Winterbottom for many years.
"We bank at West Bank because of the people," says Irvine. "We tap into the
expertise of Humeston, Rowat and Winterbottom every chance we get."

"I've known Brad Winterbottom and Lynn Rowat for years and so has Ted,"
says Skaugstad. "They're personal friends and exceptional bankers... business
partners in the best sense."

(GROUP PHOTO)

(l to r) Chuck Skaugstad, Jr., owner of The Mansion of Iowa City; Lynn
Rowat, West Bank Eastern Iowa market president; Ted Irvine, owner of
The Mansion of Des Moines; John Humeston, West Bank vice president,
Des Moines. The four work together to keep The Mansion growing.

Adding value to the communities we serve

"A GREAT UNITED WAY PARTNER AND SUPPORTER FOR MANY YEARS"

The United Way of Central Iowa awarded West Bank its Impact Award for the
bank's outstanding results and effort in the employee fundraising campaign. The
award was presented at the United Way's annual awards luncheon attended by more
than 400 people representing more than 100 companies that support the United
Way.

"West Bank has been a great United Way partner and supporter for many
years," said Tim Henkel, United Way of Central Iowa vice president of resource
development. "The participation by their employees is among the highest in the
community. The company and its employees also give freely of their time to reach
out to the community."

(GROUP PHOTO)

Displaying the United Way Impact Award are (l to r) Brad Winterbottom,
West Bank president; Marc Meyer, West Bank senior vice president; and
Tom Stanberry, West Bancorporation chairman, president and CEO.

According to Henkel, the awards were developed to recognize the most
outstanding efforts of the nearly 1,000 companies that participate in the annual
United Way campaign. The panel of judges is made up of employees who coordinate
their campaign efforts at their various companies and have won these awards in
the past.

Impact Award winners were chosen from a group of community peers from
nearly 40 local firms for their creative and successful campaign practices.

"This award recognizes the caring nature and community spirit of our
employees," said Tom Stanberry. "I think one of the most important factors in
our winning this award is the 7,500 hours of volunteer time our employees gave
to the community and that's just in the greater Des Moines area."

The West Bank branches in Iowa City and Coralville are also making
significant contributions of both time and resources. "We're committed to
helping United Way of Johnson County be successful and effective," said Lynn
Rowat, West Bank Eastern Iowa market president. "We do this by providing
significant corporate gifts and by providing a forum for our employees to learn
more about the United Way agencies in Johnson County."

Rowat has a long history of personal involvement with United Way, having
served as volunteer treasurer for the organization for more than nine years in
the past. Iowa City and Coralville West Bank staff members also currently serve
on several boards of various United Way of Johnson County organizations.

"MORE COMMITTED THAN EVER TO GIVING BACK TO THE COMMUNITY"

The West Bancorporation Foundation, Inc. is primarily focused on community
activities that further the well-being of children and young adults through
initiatives that address issues of health, education, housing and the arts. We
have had a very long, vested interest in maximizing the health and well-being of
the communities where we do business and the citizens who live there. We remain
more committed than ever to giving back to the communities that have contributed
to our success. During 2005, the Foundation awarded grants to the following
organizations:

- AIB College of Business Foundation

- American Diabetes Association 2005 Walk

- American Red Cross Central Iowa & Grant Wood Chapters for Hurricane
Relief

- Beacon of Life

- Bernie Lorenz Recovery, Inc.

- Camp Courageous of Iowa

- Children and Families of Iowa

- Coralville Public Library

- Des Moines Art Center

- Des Moines Art Festival

- Des Moines Library Foundation

- Des Moines Metro Opera

- Des Moines Public School Library Support Group

- Des Moines Symphony Muggles Making Music

- Dollars for Scholars

- Domestic Violence Intervention Program

- Dowling Catholic High School - Project Intercept

- Eddie Davis Community Center, Inc.

- Englert Theater

- Freedom for Youth Ministries

- Friends of the Botanical Center

- Goodwill Industries of Central Iowa

- Goodwill Industries of Southeast Iowa

- Greater Des Moines Habitat for Humanity / Greater Des Moines
Leadership Institute - Raise the Roof Project

- Hawthorne Hill

- Hope Ministries

- Housing Trust Fund of Johnson County

- Iowa College Foundation Minority Scholarship

- Iowa Senior Games

- Iowa Valley Habitat for Humanity

- Iowa Women's Foundation

- Iowa Youth Chorus

- Junior Achievement

- Junior Service League Holiday Home Tour

- Link Associates

- Mentor Holiday Parties

- Metro Arts Alliance

- Oakridge Neighborhood

- Old Brick

- Old Capitol Museum Renovation

- Phenix Elementary School

- Prevent Blindness Iowa

- Safe Schools for All (GLBT)

- St. Joseph Emergency Family Shelter

- Salisbury House Foundation

- Science Center of Iowa

- Tools for Schools

- United Way (Corporate Gift)

- Variety Club of Iowa

- Winefest 2005

- WOI Radio Group

- World Food Prize

- Young Women's Resource Center

- Youth Homes of Mid-America

DIRECTORS & EXECUTIVE OFFICERS

WEST BANCORPORATION BOARD OF DIRECTORS

(GROUP PHOTO)

JACK G. WAHLIG 1
President, Integrus Financial, L.C.

STEVEN G. CHAPMAN 2
Chairman, President & CEO, ITAGroup, Inc.

THOMAS E. STANBERRY 3
Chairman, President, & CEO

FRANK W. BERLIN 4
President, Frank W. Berlin & Associates

MICHAEL A. COPPOLA 5
President, Coppola Enterprises, Inc.

GEORGE D. MILLIGAN 6
President, The Graham Group, Inc.

CONNIE WIMER 7
Publisher, Business Publications

ROBERT G. PULVER 8
President & CEO, All State Industries, Inc.

ORVILLE E. CROWLEY 9
President, Linden Lane Farms

EXECUTIVE OFFICERS

(GROUP PHOTO)

THOMAS E. STANBERRY 1
Chairman, President & CEO

JOYCE A. CHAPMAN 2
Executive Vice President, West Bank

SCOTT D. ELTJES 3
Head of VMF Capital

SHAREN K. SURBER 4
Executive Vice President, West Bank

BRAD L. WINTERBOTTOM 5
President, West Bank

DOUGLAS R. GULLING 6
Chief Financial Officer

WEST BANCORPORATION, INC. & SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS December 31, 2005 & 2004

2005 2004
-------------- --------------

ASSETS
Cash and due from banks $ 39,424,270 $ 18,686,360
Federal funds sold and other short-term investments 1,241,044 11,193,099
-------------- --------------
CASH AND CASH EQUIVALENTS 40,665,314 29,879,459

Securities available for sale 270,333,846 281,110,020
Securities held to maturity -- 59,419,549
Federal Home Loan Bank stock, at cost 4,384,400 6,522,800
Loans 867,504,620 725,845,003
Allowance for loan losses (7,615,188) (6,526,824)
-------------- --------------
LOANS, NET 859,889,432 719,318,179
Premises and equipment, net 5,650,009 4,309,597
Accrued interest receivable 7,861,647 6,505,047
Goodwill and other intangible assets 27,116,287 16,561,810
Bank-owned life insurance 22,099,259 21,256,138
Other assets 6,380,103 3,551,911
-------------- --------------
$1,244,380,297 $1,148,434,510
============== ==============

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Deposits:
Noninterest bearing demand $ 207,492,888 $ 186,710,245
Savings and interest bearing demand 343,697,862 422,560,048
Time, in excess of $100,000 269,057,298 193,716,248
Other time 124,645,285 62,945,833
-------------- --------------
TOTAL DEPOSITS 944,893,333 865,932,374

Federal funds purchased and securities sold
under agreements to repurchase 84,748,150 74,543,033
Other short-term borrowings 4,732,124 4,668,451
Long-term borrowings 99,187,766 101,892,773
Accrued expenses and other liabilities 6,298,408 3,777,903
-------------- --------------
TOTAL LIABILITIES 1,139,859,781 1,050,814,534
-------------- --------------

STOCKHOLDERS' EQUITY
Common stock, no par value; authorized
50,000,000 shares; 16,701,843 shares issued and
outstanding at December 31, 2005 and 2004 3,000,000 3,000,000
Additional paid-in capital 32,000,000 32,000,000
Retained earnings 71,950,620 62,565,046
Accumulated other comprehensive income (loss) (2,430,104) 54,930
-------------- --------------
TOTAL STOCKHOLDERS' EQUITY 104,520,516 97,619,976
-------------- --------------
$1,244,380,297 $1,148,434,510
============== ==============

WEST BANCORPORATION, INC. & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME(1) Years Ended December 31, 2005, 2004 & 2003

2005 2004 2003
----------- ----------- -----------

INTEREST INCOME:
Loans $50,361,321 $37,168,986 $32,633,401
Securities:
U.S. Treasury, government agencies and corporations 6,902,778 6,408,522 4,727,838
States and political subdivisions 4,098,811 2,399,378 1,725,250
Other 1,699,978 2,673,791 3,111,436
Federal funds sold and other short-term investments 411,866 947,993 1,263,190
----------- ----------- -----------
TOTAL INTEREST INCOME 63,474,754 49,598,670 43,461,115

INTEREST EXPENSE:
Demand and savings deposits 5,482,295 3,681,439 3,084,033
Time deposits 10,458,667 3,759,910 2,665,970
Federal funds purchased and securities
sold under agreements to repurchase 2,484,291 857,050 1,503,051
Other short-term borrowings 1,682,784 444,120 8,564
Long-term borrowings 4,993,772 5,209,148 3,877,773
----------- ----------- -----------
TOTAL INTEREST EXPENSE 25,101,809 13,951,667 11,139,391
----------- ----------- -----------

NET INTEREST INCOME 38,372,945 35,647,003 32,321,724

PROVISION FOR LOAN LOSSES 1,775,000 1,200,000 850,000
----------- ----------- -----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 36,597,945 34,447,003 31,471,724
----------- ----------- -----------
NONINTEREST INCOME:
Service charges on deposit accounts 4,659,509 4,968,077 4,984,373
Trust services 820,292 631,500 507,000
Investment advisory fees 3,349,386 2,682,690 503,899
Increase in cash value of bank-owned life insurance 843,122 869,423 666,785
Proceeds from bank-owned life insurance -- -- 821,254
Net realized gains from securities available for sale 290,941 198,877 299,562
Other income 1,553,693 1,355,342 1,522,348
----------- ----------- -----------
TOTAL NONINTEREST INCOME 11,516,943 10,705,909 9,305,221
----------- ----------- -----------
NONINTEREST EXPENSE:
Salaries and employee benefits 10,307,508 9,680,139 7,700,608
Occupancy 2,497,104 2,056,755 1,582,660
Data processing 1,428,509 1,360,724 1,130,131
Charitable contributions 146,990 147,584 1,483,516
Other expenses 4,264,663 3,722,923 2,797,331
----------- ----------- -----------
TOTAL NONINTEREST EXPENSE 18,644,774 16,968,125 14,694,246
----------- ----------- -----------

INCOME BEFORE INCOME TAXES 29,470,114 28,184,787 26,082,699

INCOME TAXES 9,395,361 9,570,310 8,800,071
----------- ----------- -----------
NET INCOME $20,074,753 $18,614,477 $17,282,628
=========== =========== ===========
EARNINGS PER SHARE:
Basic $ 1.20 $ 1.11 $ 1.02
=========== =========== ===========

WEST BANCORPORATION, INC. & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY(1)

Years Ended December 31, 2005, 2004 & 2003

ACCUMULATED
OTHER TOTAL
COMPREHENSIVE ADDITIONAL RETAINED COMPREHENSIVE STOCKHOLDERS'
INCOME COMMON STOCK PAID-IN CAPITAL EARNINGS INCOME (LOSS) EQUITY
------------- ------------ --------------- ------------ ------------- -------------

BALANCE, DECEMBER 31, 2002 $3,000,000 $32,000,000 $ 49,792,716 $ 1,031,446 $ 85,824,162
COMPREHENSIVE INCOME
Net income $17,282,628 -- -- 17,282,628 -- 17,282,628
Other comprehensive income,
unrealized gains on securities,
net of reclassification adjustment,
net of tax 68,127 -- -- -- 68,127 68,127
-----------
TOTAL COMPREHENSIVE INCOME $17,350,755
===========
Cash dividends declared, $0.610 per share -- -- (10,278,573) -- (10,278,573)
---------- ----------- ------------ ----------- ------------
BALANCE, DECEMBER 31, 2003 3,000,000 32,000,000 56,796,771 1,099,573 92,896,344
COMPREHENSIVE INCOME
Net income $18,614,477 -- -- 18,614,477 -- 18,614,477
Other comprehensive loss,
unrealized (losses) on securities,
net of reclassification adjustment,
net of tax (1,044,643) -- -- -- (1,044,643) (1,044,643)
-----------
TOTAL COMPREHENSIVE INCOME $17,569,834
===========
Cash dividends declared, $0.625 per share -- -- (10,483,877) -- (10,483,877)
Purchase of fractional shares
resulting from stock dividend -- -- (2,090) -- (2,090)
Shares reacquired under the
common stock repurchase plan -- -- (2,360,235) -- (2,360,235)
---------- ----------- ------------ ----------- ------------
BALANCE, DECEMBER 31, 2004 3,000,000 32,000,000 62,565,046 54,930 97,619,976
COMPREHENSIVE INCOME
Net income $20,074,753 -- -- 20,074,753 -- 20,074,753
Other comprehensive loss,
unrealized (losses) on securities,
net of reclassification adjustment,
net of tax (2,485,034) -- -- -- (2,485,034) (2,485,034)
-----------
TOTAL COMPREHENSIVE INCOME $17,589,719
===========
Cash dividends declared, $0.640 per share -- -- (10,689,179) -- (10,689,179)
---------- ----------- ------------ ----------- ------------
BALANCE, DECEMBER 31, 2005 $3,000,000 $32,000,000 $ 71,950,620 $(2,430,104) $104,520,516
========== =========== ============ =========== ============

FORM 10-K

A copy of the Company's annual report to the Securities and Exchange Commission
on Form 10-K will be mailed when available without charge to shareholders upon
written request to the Chief Financial Officer. The annual report will also be
available on the Securities and Exchange Commission's website at
http://www.sec.gov/edgar/searchedgar/webusers.htm and through a link on the
Company's investor relations web page at www.westbankiowa.com.

WEST BANCORPORATION, INC. & SUBSIDIARIES

STOCK INFORMATION

West Bancorporation, Inc. common stock is traded on the NASDAQ National Market
and quotations are furnished by the NASDAQ System. There were 314 common
stockholders of record on December 31, 2005, and an estimated 800 additional
beneficial holders whose stock was held in street name by brokerage houses.

MARKET AND DIVIDEND INFORMATION (1)(2)

HIGH LOW DIVIDENDS
------ ------ ---------

2005
1st quarter $19.25 $15.93 $0.160
2nd quarter 19.09 15.34 0.160
3rd quarter 20.02 17.25 0.160
4th quarter 19.95 17.50 0.160

2004
1st quarter $17.14 $15.40 $0.152
2nd quarter 17.14 13.93 0.152
3rd quarter 17.54 14.76 0.160
4th quarter 18.15 16.21 0.160

(1) In July 2004, the Company's Board of Directors authorized a 5% common stock
dividend. Per-share numbers in this report have been adjusted for that
stock dividend.

(2) The prices shown are the high and low sale prices for the Company's common
stock. The market quotations, reported by NASDAQ, do not include retail
markup, markdown or commissions.

NASDAQ SYMBOL: WTBA WALL STREET JOURNAL AND OTHER NEWSPAPERS: WestBcp

TRANSFER AGENT/DIVIDEND PAYING AGENT

Illinois Stock Transfer Company
209 West Jackson Boulevard, Suite 903
Chicago, Illinois 60606-6905
800-757-5755
www.illinoisstocktransfer.com

GENERAL COUNSEL

Ahlers & Cooney P.C.
100 Court Avenue
Suite 600
Des Moines, Iowa 50309

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

McGladrey & Pullen, LLP
400 Locust Street
Suite 640
Des Moines, Iowa 50309

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors of West Bancorporation, Inc.:

We have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated balance sheets of
West Bancorporation, Inc. and subsidiaries as of December 31, 2005, and 2004,
and the related consolidated statements of income, stockholders' equity, and
cash flows (not presented herein) for each of the three years in the period
ended December 31, 2005 and in our report dated February 7, 2006, we expressed
an unqualified opinion on those consolidated financial statements.

In our opinion, the information set forth in the accompanying condensed
consolidated financial statements appearing in this report is fairly presented,
in all material respects, in relation to the consolidated financial statements
from which it has been derived.

/s/ MCGLADREY & PULLEN, LLP

Des Moines, Iowa
February 7, 2006

WEST BANCORPORATION, INC. AND SUBSIDIARIES' BOARDS OF DIRECTORS

JON K. AUGUSTINE (3)
Managing Director, WB Capital Management Inc.

FRANK W. BERLIN (1,2,7,8)
President, Frank W. Berlin & Associates

THOMAS A. CARLSTROM (2)
Neurosurgeon

JOYCE A. CHAPMAN (2,3,4)
Executive Vice President, West Bank
Vice President, West Bancorporation, Inc.

STEVEN G. CHAPMAN (1,2,8)
Chairman, President & CEO, ITAGroup, Inc.

CHRISTOPHER C. COOK (3)
Managing Director, WB Capital Management Inc.

MICHAEL A. COPPOLA (1,2,6,8)
President, Coppola Enterprises, Inc.

ORVILLE E. CROWLEY (1,5,7)
President, Linden Lane Farms

CRAIG P. DAMOS (2)
Senior Vice President & Vertical Growth Officer,
The Weitz Company

SCOTT D. ELTJES (3,4)
Managing Director and
Head of WB Capital Management Inc.

KAREN J. GREEN (3)
Managing Director, WB Capital Management Inc.

DOUGLAS R. GULLING (2,3,4)
Executive Vice President & Chief Financial Officer,
West Bancorporation, Inc.
Chief Financial Officer, West Bank Treasurer, WB
Capital Management Inc. Treasurer, Investors
Management Group, Ltd.

HARLAN D. HOCKENBERG (5)
Attorney, Sullivan & Ward, P.C.

PAUL R. KNAPP (5)
Vice President, Knapp Properties, Inc.

JEFFREY D. LORENZEN (4)
President & Chief Investment Officer,
Investors Management Group, Ltd.

KAYE R. LOZIER (2)
Director of Development, Greater Des Moines Community Foundation

EUGENE T. MEYER (2)
Director, Division of Criminal Investigation, State of Iowa
Mayor of West Des Moines

DAVID R. MILLIGAN (2)
Vice Chairman, West Bank

GEORGE D. MILLIGAN (1,2,8)
President, The Graham Group, Inc.

AMY MITCHELL (4)
Vice President & Secretary, Investors Management Group, Ltd.

THOMAS E. MYERS (3)
Managing Director, WB Capital Management Inc.

ROBERT G. PULVER (1,2,7,8)
President & CEO, All State Industries, Inc.

KEVIN J. SMITH (3)
Senior Vice President, West Bank

THOMAS E. STANBERRY (1,2,3,4)
Chairman, President, & CEO, West Bancorporation, Inc.
Chairman & CEO, West Bank
Chairman, WB Capital Management Inc.
Chairman, Investors Management Group, Ltd.

JACK G. WAHLIG (1,2,6)
President, Integrus Financial, L.C.
Vice Chairman, West Bancorporation

RODNEY S. WEIKERT (4)
Senior Vice President, West Bank

CONNIE WIMER (1,2,6)
Publisher, Business Publications

BRAD L. WINTERBOTTOM (2,3,4)
President, West Bank
Vice President, West Bancorporation

----------
(1) Director of West Bancorporation, Inc.

(2) Director of West Bank

(3) Director of WB Capital Management Inc.

(4) Director of Investors Management Group, Ltd.

(5) Director Emeritus of West Bank

(6) Audit Committee

(7) Compensation Committee

(8) Nominating & Corporate Governance Committee

WEST BANK OFFICERS

EXECUTIVE OFFICERS
SHAREN K. SURBER
LYNN E. ROWAT

SENIOR VICE PRESIDENTS
THOMAS J. CILEK
RONALD H. DEGEN
CATHERINE L. MACKAY
MARC J. MEYER

SENIOR TRUST OFFICER
CAROL T. STONE

VICE PRESIDENTS
MICHELE A. BELDEN
WILLIAM S. BOWLES
RUSSELL W. BREAZEALE
GREGORY L. DOCKUM
JOHN R. HUMESTON
ALICE A. JENSEN
PAM K. KELLER
J. CRAIG KROUCH
KEITH A. KURTH
JOHN F. MCKINNEY III
DANIEL L. MCNACE
GEORGANN R. MEFFERD
ALLEN R. PETERSEN
JOHN A. POLEY
MARIE I. ROBERTS
JOHN J. STONE
KAY A. TRAGER
RYAN D. WEDEMEYER

WEST BANK LOCATIONS

DES MOINES MARKET
Main Bank
1601 22nd - West Des Moines

Grand
125 Grand Ave - West Des Moines

Urbandale
3255 99th St - Urbandale

North
3839 Merle Hay Rd - Des Moines

City Center
809 6th Ave - Des Moines

Skywalk
501 Locust #214 - Des Moines

East
2742 Hubbell - Des Moines

South
SW 9th & Watrous - Des Moines

EASTERN IOWA MARKET
Downtown
229 S. Dubuque Street - Iowa City

East
1910 Lower Muscatine Road - Iowa City

Coralville
1150 5th Street - Coralville

CUSTOMER SERVICE
Des Moines: 515.222.2360
Iowa City/Coralville: 319.351.4121
24 Hour Telephone Banking:
515.222.0314 / toll free 866.815.7858

VMF CAPITAL
1415 28th Street
Suite 200
West Des Moines, IA 50266

118 Third Ave SE
Suite 700
Cedar Rapids, IA 52401

Phone: 800.343.7084

INVESTORS MANAGEMENT GROUP

1415 28th Street
Suite 200
West Des Moines, IA 50266
Phone: 800.798.1819

WEST BANCORPORATION
1601 22nd Street
Suite 209
West Des Moines, IA 50266
Phone: 515.222.2300

WWW.WESTBANKIOWA.COM

Member FDIC

(EQUAL HOUSING LENDER LOGO)

We want you to know: Investment products provided by
VMF Capital & Investors Management Group

ARE NOT MAY LOSE ARE NOT BANK
FDIC INSURED VALUE GUARANTEED

Accounts offered through VMF Capital & Investors Management
Group, non-bank affiliates of West Bancorporation.