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On Sep 4, Zacks Investment Research upgraded West Bancorp., Inc. (WTBA - Snapshot Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

West Bancorp has been witnessing rising earnings estimates on the back of strong second-quarter 2013 results and strong capital deployment activities. Moreover, this well-known community banking and trust services provider recorded a year-to-date return of 13.4%. The year-over-year expected earnings growth rate for this stock is 6.5%.

West Bancorp reported its second-quarter results on Jul 26 with earnings per share of 25 cents, beating the Zacks Consensus Estimate of 24 cents by 4.2% and coming in line with the year-ago earnings. Results were positively driven by higher net interest income and reduced non-interest expenses. The company maintained a strong capital position with solid loans and deposit balances during the quarter.

Net interest income surged 10.6% year over year to $11.5 million. This upsurge reflected growth in interest income and lower interest expenses. Non-interest expenses decreased 5.1% to $7.4 million, as compared with the prior-year period.

However, on the downside, non-interest income declined 39.4% to $2.0 million, as compared with the prior-year period. Reduced gains and fees on sales of residential mortgages was the primary reason for the decline.

In Jul 2013, West Bancorp announced a 10% increase in its quarterly cash dividend. The increased dividend of 11 cents per share was paid on Aug 27, 2013 to shareholders of record on Aug 7, 2013.  Moreover, the board of directors approved the repurchase of common stock up to $2 million through Apr 2014.

Following second-quarter 2013 results, the Zacks Consensus Estimate for 2013 increased 8.9% to 98 cents per share, over the last 60 days for West Bancorp. For 2014, the Zacks Consensus Estimate advanced 8.8% to 99 cents per share over the same time period.

Other Stocks to Consider

Besides West Bancorp, other companies in the same sector with a Zacks Rank #1 include Banner Corporation (BANR - Snapshot Report), Provident Financial Holdings, Inc. (PROV - Snapshot Report) and Washington Federal Inc. (WAFD - Analyst Report).

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