WTBA West Bancorporation

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 EndedDecember 31, 2024			Year EndedDecember 31, 2024
	Net income (in thousands)	$7,097			$24,050
	Return on average equity	12.24%			10.71%
	Return on average assets	0.68%			0.61%
	Efficiency ratio (a non-GAAP measure)	60.79%			63.25%
	Nonperforming assets to total assets	0.00%			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.

For more information contact:Jane Funk, Executive Vice President, Treasurer and Chief Financial Officer (515) 222-5766

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
		As of
CONDENSED BALANCE SHEETS		December 31,2024				September 30,2024				June 30,2024				March 31,2024				December 31,2023
Assets
Cash and due from banks		$	28,750			$	34,157			$	27,994			$	27,071			$	33,245
Interest-bearing deposits			214,728				123,646				121,825				120,946				32,112
Securities available for sale, at fair value			544,565				597,745				588,452				605,735				623,919
Federal Home Loan Bank stock, at cost			15,129				17,195				21,065				26,181				22,957
Loans			3,004,860				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, net			2,974,428				2,991,802				2,970,352				2,951,760				2,899,193
Premises and equipment, net			109,985				106,771				101,965				95,880				86,399
Bank-owned life insurance			44,990				44,703				44,416				44,138				43,864
Other assets			82,416				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 borrowings			392,629				438,814				439,998				441,183				442,367
Other liabilities			36,891				35,846				34,812				34,223				34,299
Stockholders’ equity			227,875				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 BALANCES		December 31,2024				September 30,2024				June 30,2024				March 31,2024				December 31,2023
Assets		$	4,135,049			$	3,973,824			$	3,964,109			$	3,812,199			$	3,706,497
Loans			3,007,558				2,991,272				2,994,492				2,949,672				2,857,594
Deposits			3,434,234				3,258,669				3,123,282				2,956,635				2,878,676
Stockholders’ equity			230,720				227,513				219,771				219,835				201,920

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
		As of
LOANS		December 31,2024				September 30,2024				June 30,2024				March 31,2024				December 31,2023
Commercial		$	514,232			$	512,884			$	526,589			$	544,293			$	531,594
Real estate:
Construction, land and land development			508,147				520,516				496,864				465,247				413,477
1-4 family residential first mortgages			87,858				89,749				92,230				108,065				106,688
Home equity			19,294				17,140				15,264				14,020				14,618
Commercial			1,861,195				1,870,132				1,856,301				1,839,580				1,854,510
Consumer and other			17,287				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
Watch			8,349				7,956				7,651				142				144
Substandard			133				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 demand			543,855				438,402				443,658				449,946				481,207
Savings and money market - non-brokered			1,517,510				1,481,840				1,483,264				1,315,698				1,315,741
Money market - brokered			126,381				123,780				97,259				119,840				124,335
Total nonmaturity deposits			2,728,799				2,569,354				2,554,622				2,406,861				2,470,009
Time - non-brokered			488,760				407,109				353,269				381,646				322,694
Time - brokered			140,037				302,090				273,031				276,523				181,076
Total time deposits			628,797				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, net			79,893				79,828				79,762				79,697				79,631
Federal Home Loan Bank advances			270,000				315,000				315,000				315,000				315,000
Long-term debt			42,736				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 stock			3,000				3,000				3,000				3,000				3,000
Additional paid-in capital			35,619				34,960				34,322				33,685				34,197
Retained earnings			278,613				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 INCOME		December 31,2024				September 30,2024			June 30,2024			March 31,2024			December 31,2023
Interest income:
Loans, including fees		$	41,822			$	42,504		$	41,700		$	40,196		$	38,208
Securities:
Taxable			2,959				3,261			3,394			3,416			3,521
Tax-exempt			795				806			808			810			869
Interest-bearing deposits			3,740				2,041			1,666			148			85
Total interest income			49,316				48,612			47,568			44,570			42,683
Interest expense:
Deposits			25,706				26,076			23,943			21,559			20,024
Federal funds purchased and other short-term borrowings			—				115			1,950			2,183			2,024
Subordinated notes			1,106				1,112			1,105			1,108			1,114
Federal Home Loan Bank advances			2,522				2,748			2,718			2,325			2,482
Long-term debt			560				601			622			645			678
Total interest expense			29,894				30,652			30,338			27,820			26,322
Net interest income			19,422				17,960			17,230			16,750			16,361
Credit loss expense			1,000				—			—			—			500
Net interest income after credit loss expense			18,422				17,960			17,230			16,750			15,861
Noninterest income:
Service charges on deposit accounts			462				459			462			460			476
Debit card usage fees			471				500			490			458			488
Trust services			1,051				828			794			776			782
Increase in cash value of bank-owned life insurance			287				287			278			274			275
Realized securities losses, net			(1,172	)			—			—			—			(431	)
Other income			331				285			322			331			308
Total noninterest income			1,430				2,359			2,346			2,299			1,898
Noninterest expense:
Salaries and employee benefits			7,107				6,823			7,169			6,489			6,468
Occupancy and equipment			2,095				1,926			1,852			1,447			1,499
Data processing			752				771			754			714			723
Technology and software			743				722			731			700			676
FDIC insurance			699				711			631			519			475
Professional fees			301				239			244			257			235
Director fees			170				223			236			199			240
Other expenses			1,532				1,477			1,577			1,543			1,845
Total noninterest expense			13,399				12,892			13,194			11,868			12,161
Income before income taxes			6,453				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 INCOME		December 31, 2024				December 31, 2023
Interest income:
Loans, including fees		$	166,222			$	142,923
Securities:
Taxable			13,030				13,696
Tax-exempt			3,219				3,517
Interest-bearing deposits			7,595				169
Total interest income			190,066				160,305
Interest expense:
Deposits			97,284				66,796
Federal funds purchased and other short-term borrowings			4,248				9,532
Subordinated notes			4,431				4,442
Federal Home Loan Bank advances			10,313				7,694
Long-term debt			2,428				2,810
Total interest expense			118,704				91,274
Net interest income			71,362				69,031
Credit loss expense			1,000				700
Net interest income after credit loss expense			70,362				68,331
Noninterest income:
Service charges on deposit accounts			1,843				1,859
Debit card usage fees			1,919				1,980
Trust services			3,449				3,068
Increase in cash value of bank-owned life insurance			1,126				1,044
Loan swap fees			—				431
Realized securities losses, net			(1,172	)			(431	)
Gain from bank-owned life insurance			—				691
Other income			1,269				1,424
Total noninterest income			8,434				10,066
Noninterest expense:
Salaries and employee benefits			27,588				27,060
Occupancy and equipment			7,320				5,507
Data processing			2,991				2,790
Technology and software			2,896				2,341
FDIC insurance			2,560				1,750
Professional fees			1,041				1,026
Director fees			828				892
Other expenses			6,129				7,245
Total noninterest expense			51,353				48,611
Income before income taxes			27,443				29,786
Income taxes			3,393				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 Ended																				For the Year Ended
COMMON SHARE DATA		December 31,2024				September 30,2024				June 30,2024				March 31,2024				December 31,2023				December 31,2024				December 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 share			0.25				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 price			21.65				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 ratio			12.11	%			11.95	%			11.85	%			11.78	%			11.88	%
Tier 1 risk-based capital ratio			9.51				9.39				9.30				9.23				9.30
Tier 1 leverage capital ratio			7.93				8.15				8.08				8.36				8.50
Common equity tier 1 ratio			8.95				8.83				8.74				8.67				8.74
West Bank:
Total risk-based capital ratio			12.86	%			12.73	%			12.66	%			12.63	%			12.76	%
Tier 1 risk-based capital ratio			11.96				11.86				11.79				11.76				11.89
Tier 1 leverage capital ratio			9.97				10.29				10.25				10.65				10.86
Common equity tier 1 ratio			11.96				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 liabilities			3.57				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 assets			74.84				75.75				75.63				75.20				76.52
Loans/total deposits			89.49				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 Ended																				For the Year Ended
		December 31,2024				September 30,2024				June 30,2024				March 31,2024				December 31,2023				December 31,2024				December 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 assets			3,910,978				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 income			1,430				2,359				2,346				2,299				1,898				8,434				10,066
Adjustment for realized securities losses, net			1,172				—				—				—				431				1,172				431
Adjustment for losses on disposal of premises and equipment, net			—				26				21				—				24				47				29
Adjusted income			22,040				20,374				19,652				19,131				18,809				81,197				80,048
Noninterest expense			13,399				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.