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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2003
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________________ to _______________________
Commission file number 0-49677
WEST BANCORPORATION, INC.
-------------------------
(Exact name of registrant as specified in its charter)
IOWA 42 - 1230603
---- ------------
(State of incorporation (I.R.S. Employer Identification No.)
or organization)
1601 22nd STREET, WEST DES MOINES, IOWA 50266
- --------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (515) 222-2300
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section
12(g) of the Act:
COMMON STOCK, NO PAR VALUE
--------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
[X] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [X].
Indicate by check mark whether the registrant is an accelerated filer (as
defined in rule 12b-2 of the Act). [X] Yes [ ] No
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of June 30, 2003, was $266,953,202.
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the most recent practicable date, February 6, 2004.
16,060,271 shares Common Stock, no par value
DOCUMENTS INCORPORATED BY REFERENCE
The Appendix to the Proxy Statement for the 2003 calendar year is incorporated
by reference into Part II and Part IV hereof to the extent indicated in such
Parts.
The definitive proxy statement of West Bancorporation, Inc., which will be filed
not later than 120 days after the close of the Company's fiscal year ending
December 31, 2003, is incorporated by reference into Part III hereof to the
extent indicated in such Part.
2
TABLE OF CONTENTS
PART I
PAGE
ITEM 1. BUSINESS.................................................................. 4
ITEM 2. PROPERTIES................................................................ 11
ITEM 3. LEGAL PROCEEDINGS......................................................... 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS....................... 12
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASERS OF EQUITY SECURITIES........................ 12
ITEM 6. SELECTED FINANCIAL DATA................................................... 12
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS....................................... 12
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK............................................................... 12
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA............................... 12
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE.................................... 13
ITEM 9A. CONTROLS AND PROCEDURES................................................... 13
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT........................ 13
ITEM 11. EXECUTIVE COMPENSATION.................................................... 16
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT............................................................ 16
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............................ 16
ITEM 14 PRINCIPAL ACCOUNTING FEES AND SERVICES.................................... 16
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K....................................................... 17
3
PART I
ITEM 1. BUSINESS
GENERAL
West Bancorporation, Inc. (the "Company") is an Iowa corporation and bank
holding company registered under the Bank Holding Company Act of 1956, as
amended. The Company owns 100 percent of the stock of one state banking
subsidiary and one registered investment advisory firm, as described below. All
of the Company's banking operations are conducted in the State of Iowa and
primarily within the Des Moines and Iowa City, Iowa metropolitan areas. The
Company's registered investment advisory firm's operations are conducted
primarily in the Des Moines and Cedar Rapids, Iowa metropolitan areas, but it
also has customers throughout the United States. The Company does not engage in
any material business activities apart from its ownership of its banking and
investment advisory subsidiaries. The principal executive offices of the Company
are located at 1601 22nd Street, West Des Moines, Iowa 50266 and its telephone
number is (515) 222-2300.
The Company was organized and incorporated on May 22, 1984 under the laws of the
State of Iowa to serve as a holding company for its principal banking
subsidiary, West Bank (sometimes referred to as the "Bank") whose main office is
located in West Des Moines, Iowa.
The principal sources of Company revenue are derived from West Bank: (1)
interest and fees earned on loans made; (2) service charges on deposit accounts
and (3) interest on fixed income securities.
West Bank's lending activities consist primarily of short-term and medium-term
commercial and real estate loans, business operating loans and lines of credit,
equipment loans, vehicle loans, personal loans and lines of credit, home
improvement loans and conventional and secondary market mortgage loan
origination. West Bank also offers a variety of demand, savings and time
deposits, merchant credit card processing, safe deposit boxes, wire transfers,
debit cards, direct deposit of payroll and social security checks and automated
teller machine access, trust services and correspondent bank services.
The Company's investment advisory subsidiary, WB Capital Management Inc., was
formed on October 1, 2003. At that time WB Capital Management Inc., purchased
the assets of VMF Capital, L.L.C., a registered investment advisor. The
subsidiary is operating as VMF Capital.
BANKING SUBSIDIARY
West Bank, West Des Moines, Iowa. West Bank is a state chartered commercial bank
insured by the Federal Deposit Insurance Corporation ("FDIC"). It was organized
in 1893 as First Valley Junction Savings Bank. The name was changed to West Des
Moines State Bank in 1938. The Bank became a wholly owned subsidiary of the
Company in 1984 through a bank holding company organization whereby the bank's
controlling interest was transferred to West Bancorporation, Inc. On July 18,
2003, West Bank purchased the assets and assumed certain liabilities of Hawkeye
State Bank in Iowa City, Iowa. Assets acquired in this transaction totaled
approximately $129 million at two offices in Iowa City. In the fall of 2003, the
name of the bank was shortened from West Des Moines State Bank to West Bank.
West Bank provides full-service banking to businesses and residents primarily in
the Des Moines and Iowa City metropolitan areas as well as correspondent
services to banking organizations primarily located in Iowa. It provides a
variety of products and services designed to meet the needs of the markets it
serves. It has an experienced staff of bank officers who have spent the majority
of their banking careers with West Bank and local financial service
organizations and who emphasize long-term customer relationships. West Bank
conducts business out of eight full-service offices within the Des Moines
metropolitan area and two full-service offices in the Iowa City metropolitan
area.
As of December 31, 2003, West Bank had capital of $86,796,000. West Bank had net
income of $17,783,000 in 2003, $16,516,000 in 2002 and $15,754,000 in 2001.
Total assets as of December 31, 2003, 2002 and 2001 were $997,097,000,
$886,103,000 and $815,970,000, respectively.
INVESTMENT ADVISOR SUBSIDIARY
WB Capital Management Inc. (d/b/a VMF Capital), Clive, Iowa. VMF Capital is a
registered investment advisor regulated by the Securities and Exchange
Commission, which provides portfolio management services to individual
investors, retirement plans, corporations, foundations and endowments. The
subsidiary specializes in domestic equity and fixed income strategies and also
provides customized strategies to meet specific investment objectives of
clients.
As of December 31, 2003, VMF Capital had approximately $462 million in assets
under management. For the three-month period ended December 31, 2003, it had a
net loss of $82,000.
4
BUSINESS STRATEGY AND OPERATIONS
The Company is a bank holding company serving primarily the Des Moines and Iowa
City metropolitan areas. As previously discussed, during 2003, the Bank grew
through the acquisition of two offices in Iowa City. The business strategy is to
emphasize strong personal and business relationships to provide products and
services that meet the needs of its customers. The Company seeks to maintain a
strong return on equity and net income. To accomplish these goals, West Bank
focuses on small to medium size businesses that traditionally wish to develop an
exclusive relationship with a single bank. West Bank has the size to give the
personal attention required by business owners, in addition to the credit
expertise to help businesses meet their goals. The Company emphasizes strong
cost controls while striving to achieve return on equity and net income goals.
West Bank offers a full range of deposit services that are typically available
in most financial institutions, including checking accounts, savings accounts,
money market accounts and time certificates of deposit. One major goal in
developing the Bank's product mix is to keep the product offerings as simple as
possible, both in terms of the number of products and the features and benefits
of the individual services. The transaction accounts and time certificates are
tailored to the marketplace at competitive rates. In addition, the Bank offers
retirement accounts such as Individual Retirement Accounts. The FDIC insures all
deposit accounts up to the maximum amount. The Bank solicits these accounts from
small-to-medium sized businesses and from individuals who live and/or work
within its market area. Occasionally, one particular customer may have balances
in short-term deposits that represent approximately 15% of the Bank's total
deposits. Those funds are specifically invested in short-term liquid
investments. The Company does not believe that the loss of deposits of any one
customer or of a few customers would have an adverse effect on the Bank's
operation or erode its core deposit base.
Loans are provided to creditworthy borrowers regardless of their race, color,
national origin or ancestry, religion, sex, age, marital status, sexual
orientation, disability, veteran status, receipt of public assistance or any
other basis prohibited by law. West Bank intends to fulfill this commitment
while maintaining prudent credit standards. In the course of fulfilling this
obligation to meet the credit needs of the marketplace it serves, West Bank will
give consideration to each credit application regardless of the fact that the
applicant may reside in a low to moderate income neighborhood, and without
regard to the geographic location of the residence, property or business within
the market area.
The Bank provides quality financial products and services such as telephone and
internet banking and trust services that meet the banking needs of its customers
and its market place. The loan programs and acceptance of certain loans may vary
from time-to-time depending on the funds available and regulations governing the
banking industry. West Bank offers all basic types of credit to its marketplace
including commercial, real estate and consumer loans. The types of loans within
these categories are as follows:
Commercial Loans. Commercial loans are typically made to sole proprietors,
partnerships, corporations and other business entities such as municipalities
and individuals where the loan is to be used primarily for business purposes.
These loans are typically secured by assets owned by the borrower and often
involve personal guarantees given by the owners of the business. The types of
loans that West Bank offers include financing guaranteed under Small Business
Administration programs, operating and working capital loans, loans to finance
equipment and other capital purchases, commercial real estate loans, business
lines of credit, term loans, loans to professionals, and letters of credit.
Consumer Loans. Consumer loans are typically available to finance home
improvements and consumer purchases, such as automobiles, boats and education.
These loans are made on both a secured and an unsecured basis. The types of
loans that West Bank offers include automobiles and trucks, boats and
recreational vehicles, personal loans and lines of credit, home equity lines of
credit, home improvement and rehabilitation loans, credit card services and
residential real estate loans.
Other types of credit programs, such as loans to nonprofit organizations and to
public entities for community development, also are available.
West Bank offers trust services typically found in a commercial bank with trust
powers, including the administration of estates, conservatorships, personal and
corporate trusts and agency accounts.
West Bank also earns fees from the origination of residential mortgages that are
sold in the secondary real estate market without retaining the mortgage
servicing rights.
The Bank offers traditional banking services, such as safe deposit boxes, wire
transfers, direct deposit of payroll and social security checks, automated
teller machine access and automatic drafts (ACH) for various accounts.
West Bank offers correspondent bank services to community banks located
primarily in Iowa. These services include the buying and selling of federal
funds as well as purchases and sales of loan participations.
5
CREDIT MANAGEMENT
The Company strives to achieve sound credit risk management. In order to achieve
this, the Company has established uniform credit policies and underwriting
criteria for West Bank's loan portfolio. The Bank diversifies the types of loans
offered and is subject to regular credit examinations by regulators, annual
external loan audits and an internal annual review of large loans. The Company
attempts to identify potential problem loans early, charge off loans promptly
and maintain an adequate allowance for loan losses. The Bank has established
credit guidelines for the lending activities that include guidelines relating to
the more commonly requested loan types, as follows:
Commercial Real Estate Loans - Commercial real estate loans are normally based
on loan-to-appraisal value ratios of not more than 75 percent and secured by a
first priority lien position. Loans are typically subject to interest rate
adjustments no less frequently than 5 years from origination. Fully amortized
monthly repayment terms normally do not exceed twenty years. Projections and
cash flows that show ability to service debt within the amortization period are
required. Property and casualty insurance is required to protect the Banks'
collateral interests. A major risk factor for commercial real estate loans, as
well as the other loan types described below, is the geographic concentration in
the Des Moines and Iowa City metropolitan areas. Loans are generally guaranteed
by the principal(s).
Commercial Operating Lines - These loans are made to businesses with normal
terms up to twelve months. The credit needs are generally seasonal with the
source of repayment coming from the entity's normal business cycle. Cash flow
reviews are completed to establish the ability to service the debt within the
terms of the loan. A first priority lien on the general assets of the business
normally secures these types of loans. Loan-to-value limits vary and are
dependent upon the nature and type of the underlying collateral and the
financial strength of the borrower. Loans are generally guaranteed by the
principal(s).
Commercial Term Loans - These loans are made to businesses to finance equipment
and other capital expenditures. Terms are generally the lesser of five years or
the useful life of the asset. Term loans are normally secured by the asset being
financed and are often additionally secured with the general assets of the
business. Loan-to-value is generally a maximum of 75 percent of the cost or
value of the assets. Loans are normally guaranteed by the principal(s).
Construction Loans - Construction loans on commercial real estate are normally
based on a loan-to-appraisal value ratio of not more than 75 percent and secured
by a first priority lien position. Loan payments are typically interest only for
a term of 1-1/2 to 2 years. The interest rate is usually variable, based on the
prime rate. Residential construction loans are generally for a term not to
exceed one year, based on a loan-to-appraisal value ratio of not more than 80%
and secured by a first priority lien position. Interest is normally paid monthly
or quarterly based on a variable rate tied to prime.
Residential First Mortgage Loans - Proceeds of these loans are used to buy or
refinance the purchase of residential real estate with the loan secured by a
first lien on the real estate. Most of the residential mortgage loans originated
by the Bank during the past year have been sold (including servicing rights) in
the secondary mortgage market due to the higher interest rate risk inherent in
the 15 and 30 year fixed rate terms consumers prefer. Loans that are originated
and not sold in the secondary market generally have higher interest rates and
have rate adjustment periods normally no longer than seven years. The maximum
amortization of first mortgage residential real estate loans is 30 years. The
loan-to-value ratios do not exceed 80 percent. Property insurance is required on
all loans to protect the Banks' collateral position.
Home Equity Term Loans - These loans are normally for the purpose of home
improvement or other consumer purposes and are secured by a junior mortgage on
residential real estate. Loan-to-value ratios normally do not exceed 90 percent
of market value.
Home Equity Lines of Credit - The Bank offers a home equity line of credit with
a maximum term of 60 months. These loans are secured by a junior mortgage on the
residential real estate and normally do not exceed a loan-to-value ratio of 90
percent with the interest adjusted quarterly.
Consumer Loans - Consumer loans are normally made to consumers under the
following guidelines: automobiles - loans on new and used automobiles generally
will not exceed 80 and 75 percent of the value, respectively; recreational
vehicles and boats - 75 percent of value; mobile home loans have a maximum term
of 180 months with the loan-to-value ratio generally not exceeding 80 percent.
Each of these loans is secured by a first priority lien on the assets and
requires insurance to protect the Bank's collateral position. The term for
unsecured loans generally does not exceed 24 months.
6
EMPLOYEES
At December 31, 2003, the Bank had a total of 139 full-time equivalent
employees, VMF Capital had 15 employees and the Company had 1 employee.
Full-time equivalents represent the number of people a business would employ if
all of its employees were employed on a full-time basis. It is calculated by
dividing the total number of hours worked by all full and part-time employees by
the number of hours a full-time individual would work for a given period of
time. Employees are provided with a comprehensive program of benefits, including
comprehensive medical and dental plans, long-term disability coverage, and a
profit sharing plan with a 401(k) feature. Management considers its relations
with employees to be satisfactory. Unions represent none of the employees.
MARKET AREA
The Company operates one commercial bank with eight locations throughout the Des
Moines, Iowa metropolitan area and two locations in the Iowa City, Iowa
metropolitan area. West Bank's primary business includes providing business and
retail banking services and lending.
West Bank's main office is located in West Des Moines, Iowa, one of the fastest
growing communities in Iowa. The population of the Des Moines metropolitan area
is nearly 500,000. Des Moines is the capital of Iowa. Major employers are the
State of Iowa, Principal Financial Group, Pioneer Hi-Bred International, Inc.,
Central Iowa Hospital Corporation, Mercy Hospital Medical Center, Hy-Vee Food
Stores, Inc., and the Des Moines Independent School District.
COMPETITION
The geographic market area served by West Bank is highly competitive with
respect to both loans and deposits. The Bank competes principally with other
commercial banks, savings and loans associations, credit unions, mortgage
companies, finance divisions of auto companies, and other service providers.
Some of these competitors are local, while others are statewide or nationwide.
The major commercial bank competitors include Bankers Trust Company, NA, a local
banking organization; regional banks: Union Planters Bank, NA and Commercial
Federal Bank; and several nationwide banks: Wells Fargo Bank, Bank of America
and U.S. Bank, NA. Among the advantages such larger banks have are their ability
to finance extensive advertising campaigns and to allocate their investment
assets to geographic regions of higher yield and demand. Such banks offer
certain services, which are not offered directly by West Bank, but that may be
offered through correspondent banking institutions. These larger banking
organizations have much higher legal lending limits than West Bank and thus are
better able to finance large regional, national and global commercial customers.
In order to compete, to the fullest extent possible, with the other financial
institutions in its primary trade area, West Bank uses the flexibility that is
accorded by its independent status. This includes an emphasis on specialized
services, local promotional activities and personal contacts by the Bank's
officers, directors and employees. In particular, the Bank competes for deposits
principally by offering depositors a variety of deposit programs, convenient
office locations, hours and other services. West Bank competes for loans
primarily by offering competitive interest rates, experienced lending personnel
with local decision-making authority and quality products and services.
Pursuant to the FDIC's Summary of Deposits, as of June 30, 2003, there were 29
other banks and savings and loan associations within Polk County, Iowa, where
eight of the Bank's offices are located. West Bank ranked 6th based on total
deposits of all offices in Polk County. As of June 30, 2003, there were 13 other
banks and savings and loan associations within Johnson County, Iowa, where the
two offices acquired through the Hawkeye State Bank transaction are located.
West Bank, ranked 4th based on total deposits of all offices in Johnson County.
For the entire state, West Bank, ranked 9th in terms of deposit size.
The Bank also competes with the financial markets for funds. Yields on corporate
and government debt securities and commercial paper affect the ability of
commercial banks to attract and hold deposits. Commercial banks also compete for
funds with money market instruments and similar investment vehicles offered by
competitors including brokerage firms, insurance companies, credit card issuers
and retailers such as Sears. Money market funds offered by these types of
organizations have provided substantial competition for deposits. This trend
will likely continue in the future.
The Company anticipates bank competition will continue to change significantly
over the next several years as more banks, including the major regionals and
nationals, continue to consolidate. Credit unions, because of their income tax
advantage, will continue to show substantial growth.
7
SUPERVISION AND REGULATION
The following discussion generally refers to certain statutes and regulations
affecting the banking industry. These references provide brief summaries and,
therefore, do not purport to be complete and are qualified in their entirety by
reference to those statutes and regulations. In addition, due to the numerous
statutes and regulations that apply to and regulate the operation of the banking
industry, many are not referenced below.
The Company and West Bank are subject to extensive federal and state regulation
and supervision. Regulation and supervision of financial institutions is
primarily intended to protect depositors and the FDIC rather than shareholders
of the Company. The laws and regulations affecting banks and bank holding
companies have changed significantly over recent years, particularly with the
passage of the Financial Services Modernization Act. There is reason to expect
that similar changes will continue in the future. Any change in applicable laws,
regulations or regulatory policies may have a material effect on the business,
operations and prospects of the Company. The Company is unable to predict the
nature or the extent of the effects on its business and earnings that any fiscal
or monetary policies or new federal or state legislation may have in the future.
The Company
The Company is a bank holding company by virtue of its ownership of West Bank,
and is registered as such with the Board of Governors of the Federal Reserve
System (the "Federal Reserve"). The Company is subject to regulation under the
Bank Holding Company Act of 1956, as amended (the "BHCA"), which subjects the
Company and the Bank to supervision and examination by the Federal Reserve.
Under the BHCA, the Company files with the Federal Reserve quarterly and annual
reports of its operations and such additional information as the Federal Reserve
may require.
Source of Strength to the Bank. The Federal Reserve takes the position that a
bank holding company is required to serve as a source of financial strength to
its subsidiary bank and may not conduct its operations in an unsafe or unsound
manner. In addition, it is the Federal Reserve's position that in serving as a
source of strength to its subsidiary bank, a bank holding company should use
available resources to provide adequate capital funds to its subsidiary bank
during periods of financial stress or adversity. It should also maintain the
financial flexibility and capital raising capacity to obtain additional
resources for providing assistance to its subsidiary bank. A bank holding
company's failure to meet its obligations to serve as a source of strength to
its subsidiary bank will generally be considered by the Federal Reserve to be an
unsafe and unsound banking practice or a violation of the Federal Reserve's
regulations or both.
Federal Reserve Approval. Bank holding companies must obtain the approval of the
Federal Reserve before they: (1) acquire direct or indirect ownership or control
of any voting stock of any bank if, after such acquisition, they would own or
control, directly or indirectly, more than 5 percent of the voting stock of such
bank; (2) merge or consolidate with another bank holding company; or (3) acquire
substantially all of the assets of any additional banks.
Non-Banking Activities. With certain exceptions, the BHCA also prohibits bank
holding companies from acquiring direct or indirect ownership or control of
voting stock in any company other than a bank or bank holding company unless the
Federal Reserve finds the company's business to be incidental to the business of
banking. When making this determination, the Federal Reserve in part considers
whether allowing a bank holding company to engage in those activities would
offer advantages to the public that would outweigh possible adverse effects. A
bank holding company may engage in permissible non-banking activities on a de
novo basis, if the holding company meets certain criteria and notifies the
Federal Reserve within ten (10) business days after the activity has commenced.
Under the Financial Services Modernization Act, an eligible bank holding company
may elect (with the approval of the Federal Reserve) to become a "financial
holding company". Financial holding companies are permitted to engage in certain
financial activities through affiliates that had previously been prohibited
activities for bank holding companies. Such financial activities include
securities and insurance underwriting and merchant banking. At this time, the
Company has not elected to become a financial holding company, but may choose to
do so at some time in the future.
Control Transactions. The Change in Bank Control Act of 1978, as amended,
requires a person or group of persons acquiring "control" of a bank holding
company to provide the Federal Reserve with at least 60 days prior written
notice of the proposed acquisition. Following receipt of this notice, the
Federal Reserve has 60 days to issue a notice disapproving the proposed
acquisition, but the Federal Reserve may extend this time period for up to
another 30 days. An acquisition may be completed before the disapproval period
expires if the Federal Reserve issues written notice of its intent not to
disapprove the action. Under a rebuttable presumption established by the Federal
Reserve, the acquisition of 10 percent or more of a class of voting stock of a
bank holding company with a class of securities registered under Section 12 of
the Securities Exchange Act of 1934, as amended, would constitute the
acquisition of control. In addition, any "company" would be required to obtain
the approval of the Federal Reserve under the BHCA before acquiring 25 percent
(or 5 percent if the "company" is a bank holding company) or more of the
outstanding shares of the Company, or otherwise obtain control over the Company.
8
Affiliate Transactions. The Company, West Bank and VMF Capital are deemed
affiliates within the meaning of the Federal Reserve Act, and transactions
between affiliates are subject to certain restrictions. Generally, the Federal
Reserve Act: (1) limits the extent to which the financial institution or its
subsidiaries may engage in "covered transactions" with an affiliate; and (2)
requires all transactions with an affiliate, whether or not "covered
transactions", to be on terms substantially the same, or at least as favorable
to the institution or subsidiary, as those provided to a non-affiliate. The term
"covered transaction" includes the making of loans, purchase of assets, issuance
of guarantees and similar transactions.
State Law on Acquisitions. Iowa law permits bank holding companies to make
acquisitions throughout the state. However, Iowa currently has a deposit
concentration limit of 15 percent on the amount of deposits in the state that
any one banking organization can control and continue to acquire banks or bank
deposits (by acquisitions), which applies to all depository institutions doing
business in Iowa.
Banking Subsidiaries
Applicable federal and state statutes and regulations governing a bank's
operations relate, among other matters, to capital adequacy requirements,
required reserves against deposits, investments, loans, legal lending limits,
certain interest rates payable, mergers and consolidations, borrowings, issuance
of securities, payment of dividends, establishment of branches and dealings with
affiliated persons.
West Bank is a state bank subject to primary federal regulation and supervision
by the Federal Deposit Insurance Corporation (the "FDIC") and the Iowa Division
of Banking. The federal laws that apply to the bank regulate, among other
things, the scope of its business, its investments, its reserves against
deposits, the timing of the availability of deposited funds and the nature and
amount of and collateral for loans. The laws and regulations governing the bank
generally have been promulgated to protect depositors and the deposit insurance
fund of the FDIC and not to protect stockholders of such institutions or their
holding companies.
The FDIC has authority to prohibit banks under their supervision from engaging
in what it considers to be unsafe and unsound practices in conducting business.
The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA")
requires federal banking regulators to adopt regulations or guidelines in a
number of areas to ensure bank safety and soundness, including internal
controls, credit underwriting, asset growth, earnings, management compensation
and ratios of classified assets to capital. FDICIA also contains provisions
which are intended to change independent auditing requirements, restrict the
activities of state-chartered insured banks, amend various consumer banking
laws, limit the ability of "undercapitalized banks" to borrow from the Federal
Reserve's discount window, require regulators to perform periodic on-site bank
examinations and set standards for real estate lending.
Borrowing Limitations. West Bank is subject to limitations on the aggregate
amount of loans that it can make to any one borrower, including related
entities. Subject to numerous exceptions based on the type of loans and
collateral, applicable statutes and regulations generally limit loans to one
borrower of 15 percent of total equity and reserves. West Bank is in compliance
with applicable loans to one borrower requirements.
FDIC Insurance. Generally, customer deposit accounts in banks are insured by the
FDIC for up to a maximum amount of $100,000. The FDIC has adopted a risk-based
insurance assessment system under which depository institutions contribute funds
to the FDIC insurance fund based on their risk classification. The FDIC may
terminate the deposit insurance of any insured depository institution if it
determines after an administrative hearing that the institution has engaged or
is engaging in unsafe or unsound practices, is in an unsafe or unsound condition
to continue operations or has violated any applicable law.
Capital Adequacy Requirements. The Federal Reserve, the FDIC and the Office of
the Comptroller of the Currency ("OCC") (collectively, the "Agencies") have
adopted risk-based capital guidelines for banks and bank holding companies that
are designed to make regulatory capital requirements more sensitive to
differences in risk profiles among banks and bank holding companies and account
for off-balance sheet items. Failure to achieve and maintain adequate capital
levels may give rise to supervisory action through the issuance of a capital
directive to ensure the maintenance of required capital levels. West Bank is in
compliance with applicable regulatory capital level requirements.
The current guidelines require all federally regulated banks to maintain a
minimum risk-based total capital ratio equal to 8 percent, of which at least 4
percent must be Tier 1 capital. Tier 1 capital includes common shareholders'
equity, qualifying perpetual preferred stock and minority interests in equity
accounts of consolidated subsidiaries, but excludes goodwill and most other
intangibles and the allowance for loan and lease losses. Tier 2 capital includes
the excess of any preferred stock not included in Tier 1 capital, mandatory
convertible securities, hybrid capital instruments, subordinated debt and
intermediate term preferred stock and general reserve for loan and lease losses
up to 1.25 percent of risk weighted assets. West Bank has not received any
notice indicating that it will be subject to higher capital requirements.
9
Under these guidelines, bank assets are given risk weights of 0 percent, 20
percent, 50 percent or 100 percent. Most loans are assigned to the 100 percent
risk category, except for first mortgage loans fully secured by residential
property and, under certain circumstances, residential construction loans (both
carry a 50 percent rating). Most investment securities are assigned to the 20
percent category, except for municipal or state revenue bonds (which have a 50
percent rating) and direct obligations of or obligations guaranteed by the
United States Treasury or United States Government Agencies (which have a 0
percent rating).
The Agencies have also implemented a leverage ratio, which is equal to Tier 1
capital as a percentage of average total assets less intangibles, to be used as
a supplement to the risk based guidelines. The principal objective of the
leverage ratio is to limit the maximum degree to which a bank may leverage its
equity capital base. The minimum required leverage ratio for top rated
institutions is 3 percent, but most institutions are required to maintain an
additional cushion of at least 100 to 200 basis points. Any institution
operating at or near the 3 percent level is expected to be a strong banking
organization without any supervisory, financial or operational weaknesses or
deficiencies. Any institution experiencing or anticipating significant growth
would be expected to maintain capital ratios, including tangible capital
positions, well above the minimum levels.
Prompt Corrective Action. Regulations adopted by the Agencies impose even more
stringent capital requirements. The FDIC and other Agencies must take certain
"prompt corrective action" when a bank fails to meet capital requirements. The
regulations establish and define five capital levels: (1) "well-capitalized",
(2) "adequately capitalized", (3) "undercapitalized", (4) "significantly
undercapitalized" and (5) "critically undercapitalized". Increasingly severe
restrictions are imposed on the payment of dividends and management fees, asset
growth and other aspects of the operations of institutions that fall below the
category of being "adequately capitalized". Undercapitalized institutions are
required to develop and implement capital plans acceptable to the appropriate
federal regulatory agency. Such plans must require that any company that
controls the undercapitalized institution must provide certain guarantees that
the institution will comply with the plan until it is adequately capitalized. As
of the date of this Annual Report on Form 10-K, neither the Company or West Bank
was subject to any regulatory order, agreement or directive to meet and maintain
a specific capital level for any capital measure. Furthermore, as of that same
date, West Bank was categorized as "well capitalized" under regulatory prompt
corrective action provisions.
Restrictions on Dividends. Dividends paid to the Company by West Bank are the
major source of Company cash flow. Various federal and state statutory
provisions limit the amount of dividends banking subsidiaries are permitted to
pay to their holding companies without regulatory approval. Federal Reserve
policy further limits the circumstances under which bank holding companies may
declare dividends. For example, a bank holding company should not continue its
existing rate of cash dividends on its common stock unless its net income is
sufficient to fully fund each dividend and its prospective rate of earnings
retention appears consistent with its capital needs, asset quality and overall
financial condition. In addition, the Federal Reserve and the FDIC have issued
policy statements that provide that insured banks and bank holding companies
should generally pay dividends only out of current operating earnings. Federal
and state banking regulators may also restrict the payment of dividends by
order.
West Bank, as a state chartered bank, is restricted under Iowa law to paying
dividends only out of its undivided profits. Additionally, the payment of
dividends by West Bank is affected by the requirement to maintain adequate
capital pursuant to applicable capital adequacy guidelines and regulations, and
West Bank is generally prohibited from paying any dividends if, following
payment thereof, the bank would be undercapitalized. As of December 31, 2003,
approximately $7,000,000 was available to be paid as dividends by West Bank to
the Company without prior regulatory approval.
Reserves Against Deposits. The Federal Reserve requires all depository
institutions to maintain reserves against their transaction accounts (primarily
checking accounts) and non-personal time deposits. Generally reserves of 3
percent must be maintained against total transaction accounts of $45,400,000 or
less (subject to an exemption not in excess of the first $6,600,000 of
transaction accounts). A reserve of $1,164,000 plus 10 percent of amounts in
excess of $45,400,000 must be maintained in the event total transaction accounts
exceed $45,400,000. The balances maintained to meet the reserve requirements
imposed by the Federal Reserve may be used to satisfy applicable liquidity
requirements. Because required reserves must be maintained in the form of vault
cash or a non-interest bearing account at a Federal Reserve Bank, the effect of
this reserve requirement is to reduce the earning assets of West Bank.
Bank Offices. Iowa law regulates the establishment of bank offices and thus may
affect the Company's future plans to establish additional offices of West Bank.
Pursuant to amendments to Iowa law effective February 21, 2001, current Iowa
laws permits a state bank to establish up to three (3) offices anywhere in the
state. Until July 1, 2004, in addition to the three offices which may be
established anywhere in the state, a bank may only establish a bank office
inside the boundaries of the county in which the principal place of business of
the state bank is located and those counties contiguous to or cornering upon
such county. The number of offices a state bank may establish in a particular
municipality or urban complex may also be limited depending upon the population.
Effective July 1, 2004, the geographical restrictions on bank office locations
will be repealed. Finally, until July 1, 2004, Iowa law restricts the ability of
a bank to establish a de novo office within the limits of a municipal
corporation where there is an already established state or national bank or bank
office.
10
Nonbanking Subsidiaries
VMF Capital is under the jurisdiction of the Investment Advisors Act of 1940 and
is regulated by the Securities and Exchange Commission ("SEC"). VMF Capital has
filed its form ADV with the SEC. Investment advisers are heavily regulated by
the SEC. In addition, in light of recent market events, the SEC has recently
promulgated several proposed as well as final rules pertaining to corporate
governance and compliance matters pursuant to which VMF Capital will have to
comply.
Regulatory Developments
In 1999, the Financial Services Modernization Act was enacted which: (1)
repealed historical restrictions on preventing banks from affiliating with
securities firms; (2) broadened the activities that may be conducted by bank
subsidiaries of holding companies; and (3) provided an enhanced framework for
protecting the privacy of consumers' information. In addition, bank holding
companies may be owned, controlled or acquired by any company engaged in
financially related activities, as long as such company meets regulatory
requirements. To the extent that this legislation permits banks to affiliate
with financial services companies, the banking industry may experience further
consolidation, although the impact of this legislation on the Company and West
Bank is unclear at this time.
Regulatory Enforcement Authority
The enforcement powers available to federal and state banking regulators are
substantial and include, among other things, the ability to assess civil
monetary penalties, to issue cease-and-desist or removal orders and to initiate
injunctive actions against banking organizations and institution-affiliated
parties, as defined. In general, enforcement actions must be initiated for
violations of laws and regulations and unsafe or unsound practices. Other
actions, or inactions, may provide the basis for enforcement action, including
misleading or untimely reports filed with regulatory authorities. Applicable law
also requires public disclosure on final enforcement actions by the federal
banking agencies.
National Monetary Policies
In addition to being affected by general economic conditions, the earnings and
growth of West Bank are affected by the regulatory authorities' policies,
including the Federal Reserve. An important function of the Federal Reserve is
to regulate the money supply, credit conditions and interest rates. Among the
instruments used to implement these objectives are open market operations in
U.S. Government securities, changes in reserve requirements against bank
deposits and the Federal Reserve Discount Rate, which is the rate charged banks
borrowing from the Federal Reserve Bank. These instruments are used in varying
combinations to influence overall growth and distribution of credit, bank loans,
investments and deposits, and their use may also affect interest rates charged
on loans or paid on deposits.
The monetary policies of the Federal Reserve have had a material impact on the
operating results of commercial banks in the past and are expected to do so in
the future. Also important in terms of effect on banks are controls on interest
rates paid by banks on deposits and types of deposits that may be offered by
banks. The Depository Institutions Deregulation Committee, created by Congress
in 1980, phased out ceilings on the rate of interest that may be paid on
deposits by commercial banks and savings and loan associations, with the result
that the differentials between the maximum rates banks and savings and loans can
pay on deposit accounts have been eliminated. The effect of deregulation of
deposit interest rates has been to increase banks' cost of funds and to make
banks more sensitive to fluctuations in market rates.
ITEM 2. PROPERTIES
The Company's office is housed in the main office of West Bank located at 1601
22nd Street in West Des Moines, Iowa. The space is leased and consists of
approximately 300 square feet with annual rent of $5,000. West Bank's main
office is also located in the leased facility at 1601 22nd Street in West Des
Moines. The Bank rents 13,952 square feet and pays annual rent of $358,000 for a
full-service banking location that includes drive-in facilities and two
automated teller machines. The bank also leases buildings and space for six
other locations located within the Des Moines metropolitan area. These offices
are full-service banking locations with five of these offices having drive-in
facilities and all six locations have automated teller machines. Lease payments
for these six offices totaled $364,000 for the year ended December 31, 2003. The
Bank owns one other full-service banking location in Des Moines and two full
service banking locations in Iowa City. These locations also include drive-in
facilities and automatic teller machines.
VMF Capital has leased offices in Clive and Cedar Rapids, Iowa. Annual lease
payments for these offices totaled $92,000 for the period from formation of the
Company through December 31, 2003.
11
ITEM 3. LEGAL PROCEEDINGS
West Bank from time to time is a party to various legal actions arising in the
normal course of business. The Company believes that there is no threatened or
pending proceeding against the Company, West Bank or VMF Capital, which, if
determined adversely, would have a material adverse effect on the business or
financial position of the Company, West Bank or VMF Capital.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year covered by this report.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASERS OF EQUITY SECURITIES
The information appearing on page 55 of the Corporation's Appendix to the Proxy
Statement, filed as Exhibit 13 hereto, is incorporated herein by reference.
There were 337 holders of record of the Company's no par value common stock as
of February 6, 2004, and an estimated 600 additional beneficial holders whose
stock was held in street name by brokerage houses. The closing price of the
Company's common stock was $17.26 on February 6, 2004.
The Company increased dividends to common shareholders in 2003 to $.64 per
share, a 3.2 percent increase over $.62 for 2002. Dividend declarations are
evaluated and determined by the Board of Directors on a quarterly basis. The
ability of the Company to continue to pay such dividends will depend primarily
upon the earnings of West Bank and its ability to pay dividends to the Company.
It is anticipated that West Bank will continue to pay dividends on a regular
basis in the future.
The ability of West Bank to pay dividends is governed by various statutes. West
Bank, as a state bank, is restricted to paying dividends only out of undivided
profits. These statutes provide that no bank shall declare or pay any dividends
in an amount greater than its retained earnings, without approval from governing
regulatory bodies. In addition, applicable bank regulatory authorities have the
power to require any bank to suspend the payment of any and all dividends until
the bank shall have complied with all requirements that may have been imposed by
such authorities.
ITEM 6. SELECTED FINANCIAL DATA
The information appearing on page 3 of the Company's Appendix to the Proxy
Statement, filed as Exhibit 13 hereto, is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information appearing on pages 4 through 23 of the Company's Appendix to the
Proxy Statement, filed as Exhibit 13 hereto, is incorporated herein by
reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information appearing on pages 20 through 22 of the Company's Appendix to
the Proxy Statement, filed as Exhibit 13 hereto, is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information appearing on pages 24 through 54 of the Company's Appendix to
the Proxy Statement, filed as Exhibit 13 hereto, is incorporated herein by
reference.
12
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Within the two years prior to the date of the most recent financial statements,
there have been no changes in or disagreements with accountants of the Company.
ITEM 9A. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, an evaluation was performed
under the supervision and with the participation of the Company's Chief
Executive Officer and Chief Financial Officer of the effectiveness of the
Company's disclosure controls and procedures (as defined in Exchange Act Rule
240.13a-15(e)). Based on that evaluation, the Chief Executive Officer and the
Chief Financial Officer have concluded that the Company's current disclosure
controls and procedures are effective to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported,
within the time periods specified in the Securities and Exchange Commission's
rules and forms.
There were no changes in the Company's internal control over financial reporting
that occurred during the period covered by this report that have materially
affected, or are reasonably likely to materially affect, the Company's internal
control over financial reporting.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth summary information about the directors and
executive officers of the Company and certain executive officers of West Bank.
13
Position with Company,
Name Age West Bank or WB Capital Management Inc.
- --------------------- --- ---------------------------------------------------------
Frank W. Berlin 58 Director of Company and Bank
Steven G. Chapman 52 Director of Company and Bank
Michael A. Coppola 47 Director of Company and Bank
Orville E. Crowley 77 Director of Company
Raymond G. Johnston 75 Director and Vice Chairman of Company
David L. Miller 71 Director and Chairman Emeritus of Company
David R. Milligan 56 Director and Executive Vice President of Company;
Director, Chairman and Chief Executive
Officer of Bank; Director of WB Capital Management Inc.
Robert G. Pulver 56 Director of Company and Bank
Thomas E. Stanberry 49 Director and Chairman, President and Chief Executive
Officer of Company; Director and Vice Chairman of
Bank; Director and Chairman of WB Capital Management Inc.
Jack G. Wahlig 71 Director of Company and Bank
Connie Wimer 71 Director of Company and Bank
Joyce A. Chapman 59 Vice President and Treasurer of Company;
Director and Executive Vice President of Bank;
Director of WB Capital Management Inc.
Douglas R. Gulling 50 Chief Financial Officer of Company and Bank;
Director and Treasurer of WB Capital Management Inc.
Sharen K. Surber 59 Executive Vice President of Bank
Brad L. Winterbottom 47 Director and President of Bank;
Director of WB Capital Management Inc.
During 2003, and until the Annual Shareholders' Meeting on April 15, 2004, the
Board of Directors was and will be comprised of eleven (11) members. Two
long-time directors, David L. Miller and Raymond G. Johnston have each decided
to retire for personal reasons. Subsequent to the annual meeting, the Board will
be comprised of nine (9) members, the majority of which will be "independent"
pursuant to NASD Rule 4350(c)(1). Directors are elected at each annual meeting
of shareholders to hold office until the next annual meeting of shareholders
after their election and until their successor shall be elected and shall
qualify or until their earlier resignation, removal from office, death or
incapacitation. The shareholders may at any time remove any director, with or
without cause, by majority vote of the outstanding shares and elect a successor
to fill the vacancy. The executive officers of the Company are elected on an
annual basis by the Board of Directors of the Company. An executive officer may
be removed by the Board of Directors whenever in its judgment the best interest
of the Company will be served thereby.
The principal occupation or business and experience of the directors and
executive officers of the Company and certain executive officers of West Bank
for the past five years are set forth below:
FRANK W. BERLIN is president of Frank W. Berlin & Associates, an insurance
broker. Mr. Berlin has served as a director of the Company and the Bank since
1995.
STEVEN G. CHAPMAN is president and chief executive officer of ITAGroup, Inc., a
performance marketing group headquartered in West Des Moines, Iowa. He has
served as a director of the Company since 1994 and the Bank since 1993.
MICHAEL A. COPPOLA is president of Coppola Enterprises, Inc. a fully integrated
real estate development and management company. He has been a director of the
Company and the Bank since 1996.
14
ORVILLE E. CROWLEY is president and chief operating officer of Linden Lane Farms
Company, a family farm corporation involved in growing row crops in Madison and
Warren counties in Iowa. Mr. Crowley has been a director of the Company since
1984.
RAYMOND G. JOHNSTON is vice chairman of the Board of Directors of the Company
and has been a director of the Company since 1986. Mr. Johnston is a retired
executive vice president of the Bank.
DAVID L. MILLER is chairman emeritus of the Company. He retired as chairman,
president and chief executive officer of the Company as of February 28, 2003. He
retired as chief executive officer of the Bank as of December 31, 2001 and
retired as vice chairman of the Bank as of January 1, 2004. Mr. Miller has been
a director of the Company since 1984 and the Bank since 1962. He joined the Bank
in 1961.
DAVID R. MILLIGAN is executive vice president of the Company. He has served as
chairman and chief executive officer of the Bank since January 1, 2002. Prior to
2002 he was executive vice president and general counsel of the Bank. Mr.
Milligan has been a director of the Company since 2002, of the Bank since 2000
and of VMF Capital since October 2003. He started with the Bank in 1980.
ROBERT G. PULVER is president of All State Industries, Inc. an industrial rubber
products manufacturer. He has been a director of the Company since 1984 and the
Bank since 1981.
THOMAS E. STANBERRY is chairman, president and chief executive officer of the
Company. He was elected to this position effective March 1, 2003. He has been a
director of the Bank since May 2003 and of VMF Capital since October 2003. From
1989 until February 2003, Mr. Stanberry served in a variety of capacities for
U.S. Bancorp Piper Jaffray, most recently as a Managing Director in its Fixed
Income Capital Markets division.
JACK G. WAHLIG is president of Integrus Financial, L.C. He is a retired partner
from the certified public accounting firm McGladrey & Pullen, LLP. Mr. Wahlig
has been a director of the Company since 2001 and the Bank since 1997.
CONNIE WIMER is owner/publisher of Business Publications Corporation and retired
November 1, 2001 as president of Iowa Title Company. She has been a director of
the Company and the Bank since 1985.
JOYCE A. CHAPMAN is vice president and treasurer of the Company. She has served
as executive vice president-administration of the Bank since 2001. Prior to that
time she was senior vice president-administration. Ms. Chapman has been a
director of the Bank since 1975 and served as a director of the Company from
1984 until February 2002. She has been a director of VMF Capital since October
2003. She has been with the Bank since 1971.
DOUGLAS R. GULLING joined the Company in November 2001 as chief financial
officer and was elected chief financial officer of the Bank in February 2002. He
has been a director and treasurer of VMF Capital since October 2003. From 1996
until 2001, Mr. Gulling served as senior vice president and corporate controller
of Brenton Bank in Des Moines, Iowa.
SHAREN K. SURBER is executive vice president-operations of the Bank and has
served in that capacity since 2001. Prior to that time she was senior vice
president-operations. She has been with the bank since 1975, serving in a
variety of capacities including cashier and human resource director.
BRAD L. WINTERBOTTOM is president of the Bank and has served as a director and
president of the Bank since 2000. He has been a director of VMF Capital since
October 2003. He was executive vice president - credit from 1998 to 2000. Prior
to that time he was senior vice president - credit of the Bank. He joined the
Bank in 1992.
Identification of Audit Committee and Audit Committee Financial Expert
The information for this matter as required pursuant to Item 401 of Regulation
S-K can be found in the Company's definitive Proxy Statement at page 4, which
will be filed not later than 120 days following the close of the Company's
fiscal year ended December 31, 2003, is incorporated herein by reference.
Shareholder Recommendations for Nominees to the Board of Directors
The information for this matter as required pursuant to Item 401 of Regulation
S-K can be found in the Company's definitive Proxy Statement at page 13, which
will be filed not later than 120 days following the close of the Company's
fiscal year ended December 31, 2003, is incorporated herein by reference.
15
Section 16(a) Beneficial Ownership Reporting Compliance
The information for this matter as required pursuant to Item 405 of Regulation
S-K can be found in the Company's definitive Proxy Statement at page 6, which
will be filed not later than 120 days following the close of the Company's
fiscal year ended December 31, 2003, is incorporated herein by reference.
Code of Ethics
The Company has adopted a code of conduct which applies to all directors,
officers and employees, including the chairman, president and chief executive
officer, chief financial officer and controller. A copy of the code of conduct
is filed as Exhibit 14 to this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
The information for this matter as required pursuant to Item 402 of Regulation
S-K can be found in the Company's definitive Proxy Statement at page 5 and pages
7 through 10, which will be filed not later than 120 days following the close of
the Company's fiscal year ended December 31, 2003, is incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information for this matter as required pursuant to Item 201(d) and Item 403
of Regulation S-K can be found in the Company's definitive Proxy Statement at
pages 5 through 6, which will be filed not later than 120 days following the
close of the Company's fiscal year ended December 31, 2003, is incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information for this matter as required pursuant to Item 404 of Regulation
S-K can be found in the Company's definitive Proxy Statement at page 9, which
will be filed not later than 120 days following the close of the Company's
fiscal year ended December 31, 2003, is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information for this matter as required pursuant to Item 9(e) of Schedule
14A can be found in the Company's definitive Proxy Statement at pages 11 through
12, which will be filed not later than 120 days following the close of the
Company's fiscal year ended December 31, 2003, is incorporated herein by
reference.
16
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
The following exhibits and financial statement schedules of the Company are
filed as part of this report:
(a) 1. Financial Statements
See the financial statements on pages 24 through 54
of the Company's Appendix to the Proxy Statement,
filed as Exhibit 13 hereto, which are incorporated
herein by reference.
2. Financial Statement Schedules
All schedules are omitted because they are not
applicable, not required or because the required
information is included in the consolidated financial
statements or notes thereto.
3. Exhibits (not covered by independent auditors'
report).
3.1 Restated Articles of Incorporation of the
Company*
3.2 By-laws of the Company*
10.1 Lease for Main Bank Facility*
10.2 Supplemental Agreement to Lease for Main
Bank Facility*
10.3 Short-term Lease related to Main Bank
Facility*
10.4 Assignment*
10.5 Lease Modification Agreement No. 1 for Main
Bank Facility*
10.6 Memorandum of Real Estate Contract*
10.7 Affidavit*
10.8 Addendum to Lease for Main Bank Facility*
10.9 Data Processing Contract*
10.10 Employment Contract*
10.11 Consulting Contract*
10.12 Data Processing Contract Amendment**
10.13 Purchase and Assumption Agreement between
West Des Moines State Bank and Hawkeye State
Bank***
10.14 Employment Agreement effective March 1,
2003, which was consummated in the first
quarter of 2004
13 The Appendix to the Proxy Statement for West
Bancorporation, Inc. for the 2003 calendar
year****
14 Code of Conduct
21 Subsidiaries
31.1 Certification of Chief Executive Officer
under Section 302 of the Sarbanes Oxley Act
of 2002
31.2 Certification of Chief Financial Officer
under Section 302 of the Sarbanes Oxley Act
of 2002
32.1 Certification of Chief Executive Officer
under Section 906 of the Sarbanes-Oxley Act
of 2002
32.1 Certification of Chief Financial Officer
under Section 906 of the Sarbanes-Oxley Act
of 2002
* Incorporated herein by reference to the
related exhibit filed with the Form 10 on
March 11, 2002.
** Incorporated herein by reference to the
related exhibit filed with the Form 10-K on
March 26, 2003.
*** Incorporated herein by reference to the
related exhibit filed with the Form 10-Q on
May 15, 2003.
**** Incorporated herein by reference to the
definitive proxy statement 14A filed on
March 3, 2004.
The Company will furnish to any person, upon request, and upon payment of a fee
of $.50 per page, a copy of any exhibit. No fee payment will be required for a
copy of the Company's Code of Conduct. Requests for copies of exhibits should be
directed to Chief Financial Officer, West Bancorporation, Inc., 1601 22nd
Street, West Des Moines, Iowa 50266.
(b) Reports on Form 8-K
During the three months ended December 31, 2003, the Company
filed Form 8-K on October 1, 2003, which contained a press
release announcing the completion of the transaction to
acquire VMF Capital, L.L.C., Form 8-K on October 9, 2003 which
contained a press release announcing the quarterly dividend,
and Form 8-K on October 20, 2003 which contained a press
release announcing earnings for the three and nine months
ended September 30, 2003.
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
WEST BANCORPORATION, INC.
(Registrant)
March 4, 2004 By: /s/ Thomas E. Stanberry
------------------------------
Thomas E. Stanberry
Chairman, President and Chief
Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
March 4, 2004 By: /s/ Thomas E. Stanberry
------------------------
Thomas E. Stanberry
Chairman, President and Chief
Executive Officer
(Principal Executive Officer)
March 4, 2004 By: /s/ Douglas R. Gulling
-----------------------
Douglas R. Gulling
Chief Financial Officer
(Principal Accounting Officer)
BOARD OF DIRECTORS
March 4, 2004 By: /s/ Frank W. Berlin
-------------------
Frank W. Berlin
March 4, 2004 By: /s/ Steven G. Chapman
---------------------
Steven G. Chapman
March 4, 2004 By: /s/ Michael A. Coppola
----------------------
Michael A. Coppola
March 4, 2004 By: /s/ Orville E. Crowley
----------------------
Orville E. Crowley
March 4, 2004 By: /s/ Raymond G. Johnston
-----------------------
Raymond G. Johnston
March 4, 2004 By: /s/ David L. Miller
-------------------
David L. Miller
March 4, 2004 By: /s/ David R. Milligan
---------------------
David R. Milligan
March 4, 2004 By: /s/ Robert G. Pulver
--------------------
Robert G. Pulver
March 4, 2004 By: /s/ Jack G. Wahlig
------------------
Jack G. Wahlig
March 4, 2004 By: /s/ Connie Wimer
----------------
Connie Wimer
18
EXHIBIT INDEX
The following exhibits are filed herewith:
Exhibit No. Description
- ----------- -----------
10.14 Employment Agreement effective March 1, 2003, which was consummated in the first quarter of 2004
14 Code of Conduct
21 Subsidiaries
31.1 Certification of Chief Executive Officer under Section 302 of the Sarbanes Oxley Act of 2002
31.2 Certification of Chief Financial Officer under Section 302 of the Sarbanes Oxley Act of 2002
32.1 Certification of Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification of Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002
19