EX-99.1 2 wtba-20250123exhibit991.htm EX-99.1 Document

Exhibit 99.1

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Press Release
 
January 23, 2025
 
FOR IMMEDIATE RELEASE
For more information contact:
Jane Funk, Executive Vice President, Treasurer and Chief Financial Officer (515) 222-5766
 
WEST BANCORPORATION, INC. ANNOUNCES FOURTH QUARTER AND YEAR END 2024 FINANCIAL RESULTS AND DECLARES QUARTERLY DIVIDEND

West Des Moines, IA - West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent company of West Bank, today reported 2024 net income of $24.1 million, or $1.42 per diluted common share, compared to 2023 net income of $24.1 million, or $1.44 per diluted common share. Net income for the fourth quarter 2024 was $7.1 million, or $0.42 per diluted common share, compared to third quarter 2024 net income of $6.0 million, or $0.35 per diluted common share, and fourth quarter 2023 net income of $4.5 million, or $0.27 per diluted common share. On January 22, 2025, the Company’s Board of Directors declared a regular quarterly dividend of $0.25 per common share. The dividend is payable on February 19, 2025, to stockholders of record on February 5, 2025.

David Nelson, President and Chief Executive Officer of the Company, commented, “Although 2024 was a challenging year, we are very pleased with our fourth quarter results. We saw growth in core deposits and improvements in net interest income, net interest margin and efficiency ratio in the fourth quarter and believe these trends can continue during 2025. Our credit quality remains pristine and we had no loans past due greater than 30 days at year end as a result of our disciplined loan growth and credit risk management practices.”

David Nelson added, “During 2024, we focused on initiatives that would generate core deposit growth through targeted relationship building activities and comprehensive customer recommendations. We also made improvements to our retail online and mobile banking platforms along with our fraud management tools. Despite a highly competitive deposit environment in 2024, we saw incredible success in growing core retail and commercial deposits which led to reductions in wholesale funding and overall cost of funds in the fourth quarter.”

Fourth Quarter and Year Ended 2024 Financial Highlights
Quarter Ended December 31, 2024Year Ended December 31, 2024
Net income (in thousands)$7,097$24,050
Return on average equity12.24 %10.71 %
Return on average assets0.68 %0.61 %
Efficiency ratio (a non-GAAP measure)60.79 %63.25 %
Nonperforming assets to total assets0.00 %0.00 %

Fourth Quarter 2024 Compared to Third Quarter 2024 Overview

•Loans decreased $16.4 million in the fourth quarter of 2024, primarily due to loan payoffs resulting from customer asset sales and secondary market refinancing.





•A provision for credit losses on loans of $1.0 million was recorded in both the fourth and third quarters of 2024. A negative provision for credit losses on unfunded commitments of $1.0 million was recorded in the third quarter of 2024, compared to no provision in the fourth quarter of 2024. The provision for loans in the fourth quarter of 2024 was due to an adjustment to qualitative factors in the commercial real estate loan segment. The provision for loans in the third quarter of 2024 was primarily due to changes in the forecasted loss rates due to increases in forecasted unemployment rates. The negative provision for unfunded commitments in the third quarter of 2024 was primarily due to the decline in unfunded commitments resulting primarily from the funding of construction loans.

•The allowance for credit losses to total loans was 1.01 percent and 0.97 percent at December 31, 2024 and September 30, 2024, respectively. Nonaccrual loans at December 31, 2024 consisted of one loan with a balance of $133 thousand, compared to two loans with a total balance of $233 thousand at September 30, 2024.

•Deposits increased $79.0 million, or 2.4 percent, in the fourth quarter of 2024. Brokered deposits totaled $266.4 million at December 31, 2024, compared to $425.9 million at September 30, 2024, a decrease of $159.5 million. Excluding brokered deposits, deposits increased $238.5 million, or 8.4 percent, during the fourth quarter of 2024. Deposit growth includes a mix of public funds and commercial and consumer deposits. As of December 31, 2024, estimated uninsured deposits, which exclude deposits in the IntraFi® reciprocal network, brokered deposits and public funds protected by state programs, accounted for approximately 30.0 percent of total deposits.

•Borrowed funds decreased to $392.6 million at December 31, 2024, compared to $438.8 million at September 30, 2024. This decrease was due to two Federal Home Loan Bank advances that matured in the fourth quarter and were not renewed. One advance, with a balance of $20.0 million, was a term advance and the other advance, with a balance of $25.0 million, was part of the Company’s rolling funding program and associated with a corresponding interest rate swap agreement that also matured.

•Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 1.98 percent for the fourth quarter of 2024, compared to 1.91 percent for the third quarter of 2024. Net interest income for the fourth quarter of 2024 was $19.4 million, compared to $18.0 million for the third quarter of 2024. In the fourth quarter of 2024, interest income on interest-bearing deposits in other financial institutions increased by $1.7 million, primarily driven by the impact that an increase in average customer deposit balances had on cash liquidity. A significant, but temporary, customer deposit during the fourth quarter resulted in increases in the average balance of customer deposits and average balance of interest-bearing deposits in other financial institutions. The cost of deposits decreased 27 bps due to changes in deposit mix and reductions in deposit pricing facilitated by decreases in the federal funds target rate. Additionally, interest expense on borrowed funds decreased by $0.4 million in the fourth quarter of 2024, primarily due to the reduction in Federal Home Loan Bank advances.

•The efficiency ratio (a non-GAAP measure) was 60.79 percent for the fourth quarter of 2024, compared to 63.28 percent for the third quarter of 2024. The improvement in the efficiency ratio was primarily due to the increase in net interest income, partially offset by an increase in noninterest expense.

•In December 2024, the Company sold approximately $11.8 million of securities from the available for sale securities portfolio and realized a net loss of $1.2 million. The proceeds from this sale will be reinvested in the loan portfolio and have an estimated earn back period of approximately 2 years.
•The tangible common equity ratio was 5.68 percent as of December 31, 2024, compared to 5.90 percent as of September 30, 2024. The decrease in the tangible common equity ratio was driven by the increase in accumulated other comprehensive loss, which was the result of the decrease in the market value of our available for sale securities portfolio, partially offset by retained net income.

•Income tax expense decreased $2.1 million in the fourth quarter of 2024 compared to the third quarter of 2024. This was primarily due to recording an income tax benefit of $1.8 million in the fourth quarter of 2024 for an energy related investment tax credit associated with the construction of the Company’s new headquarters building.

Fourth Quarter 2024 Compared to Fourth Quarter 2023 Overview

•Loans increased $77.3 million at December 31, 2024, or 2.6 percent, compared to December 31, 2023. The increase is primarily due to the funding of previously committed construction loans, partially offset by loan payoffs resulting from customer asset sales and secondary market refinancing.




•Deposits increased to $3.4 billion at December 31, 2024, compared to $3.0 billion at December 31, 2023. Included in deposits were brokered deposits totaling $266.4 million at December 31, 2024, compared to $305.4 million at December 31, 2023. Excluding brokered deposits, deposits increased $422.8 million, or 15.8 percent, as of December 31, 2024, compared to December 31, 2023. Deposit growth included a mix of public funds and commercial and consumer deposits and was used to reduce wholesale funding, build liquidity and fund loan growth.
•Borrowed funds decreased to $392.6 million at December 31, 2024, compared to $592.6 million at December 31, 2023. The decrease was primarily attributable to a decrease of $150.3 million in federal funds purchased and other short-term borrowings and a decrease of $45.0 million in Federal Home Loan Bank advances, which was the result of growth in deposits.
•The efficiency ratio (a non-GAAP measure) was 60.79 percent for the fourth quarter of 2024, compared to 64.66 percent for the fourth quarter of 2023. The decrease in the efficiency ratio in the fourth quarter of 2024 compared to the fourth quarter of 2023 was primarily due to the increase in net interest income, partially offset by an increase in noninterest expense. Occupancy and equipment expense increased primarily due to the occupancy costs associated with the Company’s newly constructed headquarters.
•Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 1.98 percent for the fourth quarter of 2024, compared to 1.87 percent for the fourth quarter of 2023. Net interest income for the fourth quarter of 2024 was $19.4 million, compared to $16.4 million for the fourth quarter of 2023.

Year Ended 2024 Compared to Year Ended 2023 Overview

•The credit loss expense recorded in 2024 was $1.0 million, compared to $700 thousand in 2023. The credit loss expense in 2024 was primarily due to an adjustment to qualitative factors within the commercial real estate segment and changes in forecasted loss rates, which was driven by the increase in forecasted unemployment rate. The credit loss expense recorded in 2023 was associated with growth in loans and unfunded commitments.

•Net interest income increased $2.3 million in 2024 compared to 2023. The increase in net interest income was primarily due to the increase in the average balance and yield of the loan portfolio, the increase in the average balance of interest bearing deposits in other financial institutions and the decrease in average balance of borrowed funds, partially offset by the increase in the average balance and cost of deposits. Net interest margin decreased to 1.91 percent in 2024, compared to 2.01 percent in 2023.

The Company plans to file its report on Form 10-K with the Securities and Exchange Commission on or before February 20, 2025. Please refer to that document for a more in-depth discussion of the Company’s financial results. The Form 10-K will be available on the Investor Relations section of West Bank’s website at www.westbankstrong.com.

The Company will discuss its results in a conference call scheduled for 2:00 p.m. Central Time on Thursday, January 23, 2025. The telephone number for the conference call is 800-715-9871. The conference ID for the conference call is 7846129. A recording of the call will be available until February 6, 2025, by dialing 800-770-2030. The conference ID for the replay call is 7846129.





About West Bancorporation, Inc. (Nasdaq: WTBA)

West Bancorporation, Inc. is headquartered in West Des Moines, Iowa. Serving customers since 1893, West Bank, a wholly-owned subsidiary of West Bancorporation, Inc., is a community bank that focuses on lending, deposit services, and trust services for small- to medium-sized businesses and consumers. West Bank has six offices in the Des Moines, Iowa metropolitan area, one office in Coralville, Iowa, and four offices in Minnesota in the cities of Rochester, Owatonna, Mankato and St. Cloud.

Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to the Company’s business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may appear throughout this report. These forward-looking statements are generally identified by the words “believes,” “expects,” “intends,” “anticipates,” “projects,” “future,” “confident,” “may,” “should,” “will,” “strategy,” “plan,” “opportunity,” “will be,” “will likely result,” “will continue” or similar references, or references to estimates, predictions or future events. Such forward-looking statements are based upon certain underlying assumptions, risks and uncertainties. Because of the possibility that the underlying assumptions are incorrect or do not materialize as expected in the future, actual results could differ materially from these forward-looking statements.  Risks and uncertainties that may affect future results include: interest rate risk, including the effects of changes in interest rates; effects on the U.S. economy resulting from the implementation of policies proposed by the new presidential administration, including tariffs, mass deportations and tax regulations; fluctuations in the values of the securities held in our investment portfolio, including as a result of changes in interest rates; competitive pressures, including from non-bank competitors such as credit unions, “fintech” companies and digital asset service providers; pricing pressures on loans and deposits; our ability to successfully manage liquidity risk; changes in credit and other risks posed by the Company’s loan portfolio, including declines in commercial or residential real estate values or changes in the allowance for credit losses dictated by new market conditions, accounting standards or regulatory requirements; the concentration of large deposits from certain clients, including those who have balances above current FDIC insurance limits; changes in local, national and international economic conditions, including the level and impact of inflation and possible recession; the effects of recent developments and events in the financial services industry, including the large-scale deposit withdrawals over a short period of time that resulted in several bank failures; changes in legal and regulatory requirements, limitations and costs; changes in customers’ acceptance of the Company’s products and services; the occurrence of fraudulent activity, breaches or failures of our or our third-party partners’ information security controls or cyber-security related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools; unexpected outcomes of existing or new litigation involving the Company; the monetary, trade and other regulatory policies of the U.S. government; acts of war or terrorism, including the ongoing Israeli-Palestinian conflict and the Russian invasion of Ukraine, widespread disease or pandemics, or other adverse external events; risks related to climate change and the negative impact it may have on our customers and their businesses; changes to U.S. tax laws, regulations and guidance; potential changes in federal policy and at regulatory agencies as a result of the 2024 presidential election; new or revised accounting policies and practices, as may be adopted by state and federal regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board; talent and labor shortages and employee turnover; and any other risks described in the “Risk Factors” sections of reports filed by the Company with the Securities and Exchange Commission. The Company undertakes no obligation to revise or update such forward-looking statements to reflect current or future events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.



WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
As of
CONDENSED BALANCE SHEETSDecember 31, 2024September 30, 2024June 30, 2024March 31, 2024December 31, 2023
Assets
Cash and due from banks$28,750 $34,157 $27,994 $27,071 $33,245 
Interest-bearing deposits214,728 123,646 121,825 120,946 32,112 
Securities available for sale, at fair value544,565 597,745 588,452 605,735 623,919 
Federal Home Loan Bank stock, at cost15,129 17,195 21,065 26,181 22,957 
Loans3,004,860 3,021,221 2,998,774 2,980,133 2,927,535 
Allowance for credit losses(30,432)(29,419)(28,422)(28,373)(28,342)
Loans, net2,974,428 2,991,802 2,970,352 2,951,760 2,899,193 
Premises and equipment, net109,985 106,771 101,965 95,880 86,399 
Bank-owned life insurance44,990 44,703 44,416 44,138 43,864 
Other assets82,416 72,547 89,046 90,981 84,069 
Total assets$4,014,991 $3,988,566 $3,965,115 $3,962,692 $3,825,758 
Liabilities and Stockholders’ Equity
Deposits$3,357,596 $3,278,553 $3,180,922 $3,065,030 $2,973,779 
Federal funds purchased and other short-term borrowings— — 85,500 198,500 150,270 
Other borrowings392,629 438,814 439,998 441,183 442,367 
Other liabilities36,891 35,846 34,812 34,223 34,299 
Stockholders’ equity227,875 235,353 223,883 223,756 225,043 
Total liabilities and stockholders’ equity$4,014,991 $3,988,566 $3,965,115 $3,962,692 $3,825,758 
For the Quarter Ended
AVERAGE BALANCESDecember 31, 2024September 30, 2024June 30, 2024March 31, 2024December 31, 2023
Assets$4,135,049 $3,973,824 $3,964,109 $3,812,199 $3,706,497 
Loans3,007,558 2,991,272 2,994,492 2,949,672 2,857,594 
Deposits3,434,234 3,258,669 3,123,282 2,956,635 2,878,676 
Stockholders’ equity230,720 227,513 219,771 219,835 201,920 



WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
As of
LOANSDecember 31, 2024September 30, 2024June 30, 2024March 31, 2024December 31, 2023
Commercial$514,232 $512,884 $526,589 $544,293 $531,594 
Real estate:
Construction, land and land development508,147 520,516 496,864 465,247 413,477 
1-4 family residential first mortgages87,858 89,749 92,230 108,065 106,688 
Home equity19,294 17,140 15,264 14,020 14,618 
Commercial1,861,195 1,870,132 1,856,301 1,839,580 1,854,510 
Consumer and other17,287 14,261 15,234 12,844 10,930 
3,008,013 3,024,682 3,002,482 2,984,049 2,931,817 
Net unamortized fees and costs(3,153)(3,461)(3,708)(3,916)(4,282)
Total loans$3,004,860 $3,021,221 $2,998,774 $2,980,133 $2,927,535 
Less: allowance for credit losses(30,432)(29,419)(28,422)(28,373)(28,342)
Net loans$2,974,428 $2,991,802 $2,970,352 $2,951,760 $2,899,193 
CREDIT QUALITY
Pass$2,999,531 $3,016,493 $2,994,310 $2,983,618 $2,931,377 
Watch8,349 7,956 7,651 142 144 
Substandard133 233 521 289 296 
Doubtful— — — — — 
     Total loans$3,008,013 $3,024,682 $3,002,482 $2,984,049 $2,931,817 
DEPOSITS
Noninterest-bearing demand$541,053 $525,332 $530,441 $521,377 $548,726 
Interest-bearing demand543,855 438,402 443,658 449,946 481,207 
Savings and money market - non-brokered1,517,510 1,481,840 1,483,264 1,315,698 1,315,741 
Money market - brokered126,381 123,780 97,259 119,840 124,335 
    Total nonmaturity deposits2,728,799 2,569,354 2,554,622 2,406,861 2,470,009 
Time - non-brokered488,760 407,109 353,269 381,646 322,694 
Time - brokered140,037 302,090 273,031 276,523 181,076 
    Total time deposits628,797 709,199 626,300 658,169 503,770 
    Total deposits$3,357,596 $3,278,553 $3,180,922 $3,065,030 $2,973,779 
BORROWINGS
Federal funds purchased and other short-term borrowings$— $— $85,500 $198,500 $150,270 
Subordinated notes, net79,893 79,828 79,762 79,697 79,631 
Federal Home Loan Bank advances270,000 315,000 315,000 315,000 315,000 
Long-term debt42,736 43,986 45,236 46,486 47,736 
    Total borrowings$392,629 $438,814 $525,498 $639,683 $592,637 
STOCKHOLDERS’ EQUITY
Preferred stock$— $— $— $— $— 
Common stock3,000 3,000 3,000 3,000 3,000 
Additional paid-in capital35,619 34,960 34,322 33,685 34,197 
Retained earnings278,613 275,724 273,981 272,997 271,369 
Accumulated other comprehensive loss(89,357)(78,331)(87,420)(85,926)(83,523)
    Total stockholders’ equity$227,875 $235,353 $223,883 $223,756 $225,043 




WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
For the Quarter Ended
CONSOLIDATED STATEMENTS OF INCOMEDecember 31, 2024September 30, 2024June 30, 2024March 31, 2024December 31, 2023
Interest income:
Loans, including fees$41,822 $42,504 $41,700 $40,196 $38,208 
Securities:
Taxable2,959 3,261 3,394 3,416 3,521 
Tax-exempt795 806 808 810 869 
Interest-bearing deposits3,740 2,041 1,666 148 85 
Total interest income49,316 48,612 47,568 44,570 42,683 
Interest expense:
Deposits25,706 26,076 23,943 21,559 20,024 
 Federal funds purchased and other short-term borrowings— 115 1,950 2,183 2,024 
Subordinated notes1,106 1,112 1,105 1,108 1,114 
Federal Home Loan Bank advances2,522 2,748 2,718 2,325 2,482 
Long-term debt560 601 622 645 678 
Total interest expense29,894 30,652 30,338 27,820 26,322 
Net interest income19,422 17,960 17,230 16,750 16,361 
Credit loss expense1,000 — — — 500 
Net interest income after credit loss expense18,422 17,960 17,230 16,750 15,861 
Noninterest income:
Service charges on deposit accounts462 459 462 460 476 
Debit card usage fees471 500 490 458 488 
Trust services1,051 828 794 776 782 
 Increase in cash value of bank-owned life insurance287 287 278 274 275 
Realized securities losses, net(1,172)— — — (431)
Other income331 285 322 331 308 
Total noninterest income1,430 2,359 2,346 2,299 1,898 
Noninterest expense:
Salaries and employee benefits7,107 6,823 7,169 6,489 6,468 
Occupancy and equipment2,095 1,926 1,852 1,447 1,499 
Data processing752 771 754 714 723 
Technology and software743 722 731 700 676 
FDIC insurance699 711 631 519 475 
Professional fees301 239 244 257 235 
Director fees170 223 236 199 240 
Other expenses1,532 1,477 1,577 1,543 1,845 
Total noninterest expense13,399 12,892 13,194 11,868 12,161 
Income before income taxes6,453 7,427 6,382 7,181 5,598 
Income taxes(644)1,475 1,190 1,372 1,073 
Net income$7,097 $5,952 $5,192 $5,809 $4,525 
Basic earnings per common share$0.42 $0.35 $0.31 $0.35 $0.27 
Diluted earnings per common share$0.42 $0.35 $0.31 $0.35 $0.27 




WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
For the Year Ended
CONSOLIDATED STATEMENTS OF INCOMEDecember 31, 2024December 31, 2023
Interest income:
Loans, including fees$166,222 $142,923 
Securities:
Taxable13,030 13,696 
Tax-exempt3,219 3,517 
Interest-bearing deposits7,595 169
Total interest income190,066 160,305 
Interest expense:
Deposits97,284 66,796 
Federal funds purchased and other short-term borrowings4,248 9,532 
Subordinated notes4,431 4,442 
Federal Home Loan Bank advances10,313 7,694 
Long-term debt2,428 2,810 
Total interest expense118,704 91,274 
Net interest income71,362 69,031 
Credit loss expense1,000 700 
Net interest income after credit loss expense70,362 68,331 
Noninterest income:
Service charges on deposit accounts1,843 1,859 
Debit card usage fees1,919 1,980 
Trust services3,449 3,068 
Increase in cash value of bank-owned life insurance1,126 1,044 
Loan swap fees— 431 
Realized securities losses, net(1,172)(431)
Gain from bank-owned life insurance— 691 
Other income1,269 1,424 
Total noninterest income8,434 10,066 
Noninterest expense:
Salaries and employee benefits27,588 27,060 
Occupancy and equipment7,320 5,507 
Data processing2,991 2,790 
Technology and software2,896 2,341 
FDIC insurance2,560 1,750 
Professional fees1,041 1,026 
Director fees828 892 
Other expenses6,129 7,245 
Total noninterest expense51,353 48,611 
Income before income taxes27,443 29,786 
Income taxes3,393 5,649 
Net income$24,050 $24,137 
Basic earnings per common share$1.43 $1.44 
Diluted earnings per common share$1.42 $1.44 






WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
As of and for the Quarter EndedFor the Year Ended
COMMON SHARE DATADecember 31, 2024September 30, 2024June 30, 2024March 31, 2024December 31, 2023December 31, 2024December 31, 2023
Earnings per common share (basic)$0.42 $0.35 $0.31 $0.35 $0.27 $1.43 $1.44 
Earnings per common share (diluted)0.42 0.35 0.31 0.35 0.27 1.42 1.44 
Dividends per common share0.25 0.25 0.25 0.25 0.25 1.00 1.00 
Book value per common share(1)
13.54 13.98 13.30 13.31 13.46 
Closing stock price21.65 19.01 17.90 17.83 21.20 
Market price/book value(2)
159.90 %135.98 %134.59 %133.96 %157.50 %
Price earnings ratio(3)
12.96 13.65 14.36 12.77 19.79 
Annualized dividend yield(4)
4.62 %5.26 %5.59 %5.61 %4.72 %
REGULATORY CAPITAL RATIOS
Consolidated:
Total risk-based capital ratio12.11 %11.95 %11.85 %11.78 %11.88 %
Tier 1 risk-based capital ratio9.51 9.39 9.30 9.23 9.30 
Tier 1 leverage capital ratio7.93 8.15 8.08 8.36 8.50 
Common equity tier 1 ratio8.95 8.83 8.74 8.67 8.74 
West Bank:
Total risk-based capital ratio12.86 %12.73 %12.66 %12.63 %12.76 %
Tier 1 risk-based capital ratio11.96 11.86 11.79 11.76 11.89 
Tier 1 leverage capital ratio9.97 10.29 10.25 10.65 10.86 
Common equity tier 1 ratio11.96 11.86 11.79 11.76 11.89 
KEY PERFORMANCE RATIOS AND OTHER METRICS
Return on average assets(5)
0.68 %0.60 %0.53 %0.61 %0.48 %0.61 %0.66 %
Return on average equity(6)
12.24 10.41 9.50 10.63 8.89 10.71 11.42 
Net interest margin(7)(13)
1.98 1.91 1.86 1.88 1.87 1.91 2.01 
Yield on interest-earning assets(8)(13)
5.02 5.16 5.13 4.99 4.87 5.08 4.64 
Cost of interest-bearing liabilities3.57 3.84 3.83 3.70 3.60 3.73 3.21 
Efficiency ratio(9)(13)
60.79 63.28 67.14 62.04 64.66 63.25 60.73 
Nonperforming assets to total assets(10)
0.00 0.01 0.01 0.01 0.01 
ACL ratio(11)
1.01 0.97 0.95 0.95 0.97 
Loans/total assets74.84 75.75 75.63 75.20 76.52 
Loans/total deposits89.49 92.15 94.27 97.23 98.44 
Tangible common equity ratio(12)
5.68 5.90 5.65 5.65 5.88 

(1) Includes accumulated other comprehensive loss.
(2) Closing stock price divided by book value per common share.
(3) Closing stock price divided by annualized earnings per common share (basic).
(4) Annualized dividend divided by period end closing stock price.
(5) Annualized net income divided by average assets.
(6) Annualized net income divided by average stockholders’ equity.
(7) Annualized tax-equivalent net interest income divided by average interest-earning assets.
(8) Annualized tax-equivalent interest income on interest-earning assets divided by average interest-earning assets.
(9) Noninterest expense (excluding other real estate owned expense and write-down of premises) divided by noninterest income (excluding net securities gains/losses and gains/losses on disposition of premises and equipment) plus tax-equivalent net interest income.
(10) Total nonperforming assets divided by total assets.
(11) Allowance for credit losses on loans divided by total loans.    
(12) Common equity less intangible assets (none held) divided by tangible assets.
(13) A non-GAAP measure.






NON-GAAP FINANCIAL MEASURES

This report contains references to financial measures that are not defined in GAAP. Such non-GAAP financial measures include the Company’s presentation of net interest income and net interest margin on a fully taxable equivalent (FTE) basis and the presentation of the efficiency ratio on an adjusted and FTE basis, excluding certain income and expenses. Management believes these non-GAAP financial measures provide useful information to both management and investors to analyze and evaluate the Company’s financial performance. These measures are considered standard measures of comparison within the banking industry. Additionally, management believes providing measures on a FTE basis enhances the comparability of income arising from taxable and nontaxable sources. Limitations associated with non-GAAP financial measures include the risks that persons might disagree as to the appropriateness of items included in these measures and that different companies might calculate these measures differently. These non-GAAP disclosures should not be considered an alternative to the Company’s GAAP results. The following table reconciles the non-GAAP financial measures of net interest income and net interest margin on a fully taxable equivalent basis and efficiency ratio on an adjusted and FTE basis.

 (in thousands)For the Quarter EndedFor the Year Ended
December 31, 2024September 30, 2024June 30, 2024March 31, 2024December 31, 2023December 31, 2024December 31, 2023
Reconciliation of net interest income and net interest margin on a FTE basis to GAAP:
Net interest income (GAAP)$19,422 $17,960 $17,230 $16,750 $16,361 $71,362 $69,031 
Tax-equivalent adjustment (1)
16 29 55 82 95 182 491 
Net interest income on a FTE basis (non-GAAP)19,438 17,989 17,285 16,832 16,456 71,544 69,522 
Average interest-earning assets3,910,978 3,749,688 3,731,674 3,595,954 3,487,799 3,747,528 3,465,964 
Net interest margin on a FTE basis (non-GAAP)1.98 %1.91 %1.86 %1.88 %1.87 %1.91 %2.01 %
Reconciliation of efficiency ratio on an adjusted and FTE basis to GAAP:
Net interest income on a FTE basis (non-GAAP)$19,438 $17,989 $17,285 $16,832 $16,456 $71,544 $69,522 
Noninterest income1,430 2,359 2,346 2,299 1,898 8,434 10,066 
Adjustment for realized securities losses, net1,172 — — — 431 1,172 431 
Adjustment for losses on disposal of premises and equipment, net— 26 21 — 24 47 29 
Adjusted income22,040 20,374 19,652 19,131 18,809 81,197 80,048 
Noninterest expense13,399 12,892 13,194 11,868 12,161 51,353 48,611 
Efficiency ratio on an adjusted and FTE basis (non-GAAP) (2)
60.79 %63.28 %67.14 %62.04 %64.66 %63.25 %60.73 %
(1)    Computed on a tax-equivalent basis using a federal income tax rate of 21 percent, adjusted to reflect the effect of the nondeductible interest expense associated with owning tax-exempt securities and loans. Management believes the presentation of this non-GAAP measure provides supplemental useful information for proper understanding of the financial results, as it enhances the comparability of income arising from taxable and nontaxable sources.
(2)     The efficiency ratio expresses noninterest expense as a percent of fully taxable equivalent net interest income and noninterest income, excluding specific noninterest income and expenses. Management believes the presentation of this non-GAAP measure provides supplemental useful information for proper understanding of the Company's financial performance. It is a standard measure of comparison within the banking industry. A lower ratio is more desirable.