West Bancorporation, Inc. Announces Second Quarter 2024 Financial Results and Declares Quarterly Dividend

Rhea-AI Summary

West Bancorporation (Nasdaq: WTBA) reported Q2 2024 net income of $5.2 million, or $0.31 per diluted share, down from $5.8 million in Q1 2024 and $5.9 million in Q2 2023. The company declared a quarterly dividend of $0.25 per share. Key highlights include:

- Loans increased by $18.6 million (2.5% annualized) in Q2 2024
- Deposits grew by $115.9 million (3.8%) in Q2 2024
- Net interest margin was 1.86% for Q2 2024
- Efficiency ratio increased to 67.14% in Q2 2024
- Nonperforming assets to total assets remained low at 0.01%

The company's credit quality remains strong, with no credit loss expense recorded in Q1 or Q2 2024. West Bancorporation's strategic investments in new buildings are expected to drive future growth.

Positive

• Loans increased by $18.6 million (2.5% annualized) in Q2 2024
• Deposits grew by $115.9 million (3.8%) in Q2 2024
• Nonperforming assets to total assets remained low at 0.01%
• No credit loss expense recorded in Q1 or Q2 2024
• Allowance for credit losses to total loans remained stable at 0.95%

Negative

• Net income decreased to $5.2 million in Q2 2024 from $5.8 million in Q1 2024 and $5.9 million in Q2 2023
• Earnings per diluted share decreased to $0.31 in Q2 2024 from $0.35 in Q1 2024 and Q2 2023
• Efficiency ratio increased to 67.14% in Q2 2024 from 62.04% in Q1 2024
• Net interest margin decreased to 1.86% in Q2 2024 from 2.02% in Q2 2023

Financial Analyst

West Bancorporation's Q2 2024 results reveal a mixed financial picture. Net income decreased to $5.2 million ($0.31 per diluted share) from $5.8 million in Q1 2024 and $5.9 million in Q2 2023. However, there are some positive indicators:

• Loan growth of $18.6 million (2.5% annualized) in Q2 2024
• Deposit growth of $115.9 million (3.8%) in Q2 2024
• Stable credit quality with negligible nonperforming assets ratio of 0.01%

The efficiency ratio increased to 67.14% from 62.04% in Q1 2024, primarily due to higher noninterest expenses related to new buildings and compensation adjustments. This strategic investment may impact short-term profitability but could drive long-term growth.

The net interest margin slightly decreased to 1.86% from 1.88% in Q1 2024 and 2.02% in Q2 2023, reflecting ongoing pressure on margins in the current interest rate environment.

While the tangible common equity ratio remained stable at 5.65%, investors should monitor this metric closely as it's relatively low compared to industry standards, potentially limiting the bank's financial flexibility.

Banking Industry Expert

West Bancorporation's Q2 2024 results highlight both challenges and opportunities in the current banking landscape. The pristine credit quality, with a nonperforming assets ratio of just 0.01%, is particularly noteworthy in an environment where credit risks are increasing for many banks.

The significant deposit growth of $115.9 million in Q2 is impressive, especially considering the $26.1 million decrease in brokered deposits. However, the $120 million municipal deposit, expected to be withdrawn over 12-18 months, adds an element of deposit volatility that needs careful management.

The bank's estimated uninsured deposits at 26.3% of total deposits is worth monitoring, particularly in light of recent industry events highlighting the importance of deposit stability. The reduction in borrowed funds from $639.7 million to $525.5 million is a positive sign, indicating improved liquidity management.

The increase in the efficiency ratio to 67.14% is concerning, as it's moving away from the industry's ideal range of 50-60%. While new building costs are cited as a factor, management should focus on improving operational efficiency to offset these expenses.

Overall, West Bancorporation appears to be navigating the challenging banking environment relatively well, but continued focus on deposit stability, margin improvement and operational efficiency will be important for future performance.

WEST DES MOINES, Iowa, July 25, 2024 (GLOBE NEWSWIRE) -- West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent company of West Bank, today reported second quarter 2024 net income of $5.2 million, or $0.31 per diluted common share, compared to first quarter 2024 net income of $5.8 million, or $0.35 per diluted common share, and second quarter 2023 net income of $5.9 million, or $0.35 per diluted common share. On July 24, 2024, the Company’s Board of Directors declared a regular quarterly dividend of $0.25 per common share. The dividend is payable on August 21, 2024, to stockholders of record on August 7, 2024.

David Nelson, President and Chief Executive Officer of the Company, commented, “Our credit quality remains pristine as a result of our disciplined loan growth and credit risk management practices. The ratio of nonperforming assets to total assets remains negligible at 0.01%. In the first half of 2024, we have seen deposits grow, net interest income improve and net interest margin stabilize.”

David Nelson added, “Our efficiency ratio has increased as expected with the costs associated with our new buildings. Our buildings are designed as tools for building strong relationships and facilitating business development. We believe these strategic investments will continue to drive profitable growth similar to the successes we have had in our newer Minnesota offices.”

Second Quarter 2024 Financial Highlights
		Quarter Ended June 30, 2024				Six Months Ended June 30, 2024
	Net income (in thousands)	$5,192				$11,001
	Return on average equity	9.50 %				10.07 %
	Return on average assets	0.53 %				0.57 %
	Efficiency ratio (a non-GAAP measure)	67.14 %				64.62 %
	Nonperforming assets to total assets	0.01 %				0.01 %

Second Quarter 2024 Compared to First Quarter 2024 Overview

• Loans increased $18.6 million in the second quarter of 2024, or 2.5 percent annualized. The increase is primarily due to the funding of previously committed construction loans.
  
• No credit loss expense was recorded in either the first or second quarter of 2024.
  
• The allowance for credit losses to total loans was 0.95 percent at June 30, 2024 and March 31, 2024. Nonaccrual loans at June 30, 2024 consisted of three loans with a total balance of $521 thousand, compared to one loan with a balance of $289 thousand at March 31, 2024.
• Deposits increased $115.9 million, or 3.8 percent, in the second quarter of 2024. Brokered deposits totaled $370.3 million at June 30, 2024, compared to $396.4 million at March 31, 2024, a decrease of $26.1 million. Excluding brokered deposits, deposits increased $142.0 million during the second quarter of 2024. In the second quarter of 2024, a local municipal customer deposited approximately $120.0 million of bond proceeds that are expected to be withdrawn over the next 12-18 months. As of June 30, 2024, estimated uninsured deposits, which exclude deposits in the IntraFi^® reciprocal network, brokered deposits and public funds protected by state programs, accounted for approximately 26.3 percent of total deposits.
• Borrowed funds decreased to $525.5 million at June 30, 2024, compared to $639.7 million at March 31, 2024. The decrease was primarily attributable to a decrease of $113.0 million in federal funds purchased and other short-term borrowings as a result of the increase in deposits.
• The efficiency ratio (a non-GAAP measure) was 67.14 percent for the second quarter of 2024, compared to 62.04 percent for the first quarter of 2024. The increase in the efficiency ratio was primarily due to the increase in noninterest expense, partially offset by the increase in net interest income. Salaries and benefits increased primarily due to annual officer compensation increases and compensation related accrual adjustments. Occupancy and equipment 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 1.86 percent for the second quarter of 2024, compared to 1.88 percent for the first quarter of 2024. Net interest income for the second quarter of 2024 was $17.2 million, compared to $16.8 million for the first quarter of 2024.
• The tangible common equity ratio was 5.65 percent as of both June 30, 2024 and March 31, 2024.

Second Quarter 2024 Compared to Second Quarter 2023 Overview

• Loans increased $191.7 million at June 30, 2024, or 6.8 percent, compared to June 30, 2023. The increase is primarily due to the funding of previously committed construction loans.
  
• Deposits increased $344.6 million at June 30, 2024, compared to June 30, 2023. Included in deposits were brokered deposits totaling $370.3 million at June 30, 2024, compared to $230.7 million at June 30, 2023. Brokered deposits were used to reduce short-term borrowed funds and to fund loan growth. Excluding brokered deposits, deposits increased $205.0 million, or 7.9 percent, as of June 30, 2024, compared to June 30, 2023. In the second quarter of 2024, a local municipal customer deposited approximately $120.0 million of bond proceeds that are expected to be withdrawn over the next 12-18 months.
  
• Borrowed funds decreased to $525.5 million at June 30, 2024, compared to $593.9 million at June 30, 2023. The decrease was primarily attributable to a decrease of $98.7 million in federal funds purchased and other short-term borrowings, partially offset by an increase of $35.0 million in FHLB one-month rolling advances hedged with long-term interest rate swaps.
  
• The efficiency ratio (a non-GAAP measure) was 67.14 percent for the second quarter of 2024, compared to 62.83 percent for the second quarter of 2023. The increase in the efficiency ratio in the second quarter of 2024 compared to the second quarter of 2023 was primarily due to the decrease in net interest income and increase in noninterest expense. Occupancy and equipment 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 1.86 percent for the second quarter of 2024, compared to 2.02 percent for the second quarter of 2023. Net interest income for the second quarter of 2024 was $17.2 million, compared to $17.3 million for the second quarter of 2023.
  

The Company filed its report on Form 10-Q with the Securities and Exchange Commission today. Please refer to that document for a more in-depth discussion of the Company’s financial results. The Form 10-Q is 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, July 25, 2024. The telephone number for the conference call is 800-715-9871. The conference ID for the conference call is 8511345. A recording of the call will be available until August 8, 2024, by dialing 800-770-2030. The conference ID for the replay call is 8511345, followed by the # key.

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 sustained high interest rates by the Federal Reserve; 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 “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 who have balances above current FDIC insurance limits; changes in local, national and international economic conditions, including high rates 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 recent bank failures; changes in legal and regulatory requirements, limitations and costs including in response to the recent bank failures; 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 upcoming 2024 presidential election; talent and labor shortages; 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		June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023
Assets
Cash and due from banks		$	27,994			$	27,071			$	33,245			$	18,819			$	29,776
Interest-bearing deposits			121,825				120,946				32,112				1,802				1,968
Securities available for sale, at fair value			588,452				605,735				623,919				609,365				645,091
Federal Home Loan Bank stock, at cost			21,065				26,181				22,957				26,691				22,488
Loans			2,998,774				2,980,133				2,927,535				2,849,777				2,807,075
Allowance for credit losses			(28,422	)			(28,373	)			(28,342	)			(28,147	)			(27,938	)
Loans, net			2,970,352				2,951,760				2,899,193				2,821,630				2,779,137
Premises and equipment, net			101,965				95,880				86,399				75,675				66,683
Bank-owned life insurance			44,416				44,138				43,864				43,589				43,328
Other assets			89,046				90,981				84,069				104,329				90,084
Total assets		$	3,965,115			$	3,962,692			$	3,825,758			$	3,701,900			$	3,678,555
Liabilities and Stockholders’ Equity
Deposits		$	3,180,922			$	3,065,030			$	2,973,779			$	2,755,529			$	2,836,325
Federal funds purchased and other short-term borrowings			85,500				198,500				150,270				261,510				184,150
Other borrowings			439,998				441,183				442,367				443,552				409,736
Other liabilities			34,812				34,223				34,299				37,376				31,218
Stockholders’ equity			223,883				223,756				225,043				203,933				217,126
Total liabilities and stockholders’ equity		$	3,965,115			$	3,962,692			$	3,825,758			$	3,701,900			$	3,678,555
		For the Quarter Ended
AVERAGE BALANCES		June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023
Assets		$	3,964,109			$	3,812,199			$	3,706,497			$	3,679,541			$	3,645,651
Loans			2,994,492				2,949,672				2,857,594				2,813,213				2,783,463
Deposits			3,123,282				2,956,635				2,878,676				2,764,184				2,854,945
Stockholders’ equity			219,771				219,835				201,920				215,230				213,177

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
		As of
LOANS		June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023
Commercial		$	526,589			$	544,293			$	531,594			$	529,293			$	535,085
Real estate:
Construction, land and land development			496,864				465,247				413,477				399,253				351,461
1-4 family residential first mortgages			92,230				108,065				106,688				89,713				80,998
Home equity			15,264				14,020				14,618				12,429				12,625
Commercial			1,856,301				1,839,580				1,854,510				1,812,816				1,820,718
Consumer and other			15,234				12,844				10,930				10,123				10,289
			3,002,482				2,984,049				2,931,817				2,853,627				2,811,176
Net unamortized fees and costs			(3,708	)			(3,916	)			(4,282	)			(3,850	)			(4,101	)
Total loans		$	2,998,774			$	2,980,133			$	2,927,535			$	2,849,777			$	2,807,075
Less allowance for credit losses			(28,422	)			(28,373	)			(28,342	)			(28,147	)			(27,938	)
Net loans		$	2,970,352			$	2,951,760			$	2,899,193			$	2,821,630			$	2,779,137
CREDIT QUALITY
Pass		$	2,994,310			$	2,983,618			$	2,931,377			$	2,853,100			$	2,810,640
Watch			7,651				142				144				184				187
Substandard			521				289				296				343				349
Doubtful			—				—				—				—				—
Total loans		$	3,002,482			$	2,984,049			$	2,931,817			$	2,853,627			$	2,811,176
DEPOSITS
Noninterest-bearing demand		$	530,441			$	521,377			$	548,726			$	551,688			$	568,029
Interest-bearing demand			443,658				449,946				481,207				417,802				459,030
Savings and money market - non-brokered			1,483,264				1,315,698				1,315,741				1,249,309				1,302,468
Money market - brokered			97,259				119,840				124,335				99,282				114,142
Total nonmaturity deposits			2,554,622				2,406,861				2,470,009				2,318,081				2,443,669
Time - non-brokered			353,269				381,646				322,694				299,683				276,097
Time - brokered			273,031				276,523				181,076				137,765				116,559
Total time deposits			626,300				658,169				503,770				437,448				392,656
Total deposits		$	3,180,922			$	3,065,030			$	2,973,779			$	2,755,529			$	2,836,325
BORROWINGS
Federal funds purchased and other short-term borrowings		$	85,500			$	198,500			$	150,270			$	261,510			$	184,150
Subordinated notes, net			79,762				79,697				79,631				79,566				79,500
Federal Home Loan Bank advances			315,000				315,000				315,000				315,000				280,000
Long-term debt			45,236				46,486				47,736				48,986				50,236
Total borrowings		$	525,498			$	639,683			$	592,637			$	705,062			$	593,886
STOCKHOLDERS’ EQUITY
Preferred stock		$	—			$	—			$	—			$	—			$	—
Common stock			3,000				3,000				3,000				3,000				3,000
Additional paid-in capital			34,322				33,685				34,197				33,487				32,642
Retained earnings			273,981				272,997				271,369				271,025				269,301
Accumulated other comprehensive loss			(87,420	)			(85,926	)			(83,523	)			(103,579	)			(87,817	)
Total stockholders’ equity		$	223,883			$	223,756			$	225,043			$	203,933			$	217,126

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
		For the Quarter Ended
CONSOLIDATED STATEMENTS OF INCOME		June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023
Interest income:
Loans, including fees		$	41,700			$	40,196			$	38,208			$	36,756			$	35,011
Securities:
Taxable			3,394				3,416				3,521				3,427				3,432
Tax-exempt			808				810				869				880				883
Interest-bearing deposits			1,666				148				85				29				25
Total interest income			47,568				44,570				42,683				41,092				39,351
Interest expense:
Deposits			23,943				21,559				20,024				17,156				16,277
Federal funds purchased and other short-term borrowings			1,950				2,183				2,024				3,165				2,264
Subordinated notes			1,105				1,108				1,114				1,113				1,109
Federal Home Loan Bank advances			2,718				2,325				2,482				2,329				1,621
Long-term debt			622				645				678				695				739
Total interest expense			30,338				27,820				26,322				24,458				22,010
Net interest income			17,230				16,750				16,361				16,634				17,341
Credit loss expense (benefit)			—				—				500				200				—
Net interest income after credit loss expense (benefit)			17,230				16,750				15,861				16,434				17,341
Noninterest income:
Service charges on deposit accounts			462				460				476				463				458
Debit card usage fees			490				458				488				495				511
Trust services			794				776				782				831				749
Increase in cash value of bank-owned life insurance			278				274				275				262				250
Loan swap fees			—				—				—				431				—
Realized securities losses, net			—				—				(431	)			—				—
Other income			322				331				308				340				421
Total noninterest income			2,346				2,299				1,898				2,822				2,389
Noninterest expense:
Salaries and employee benefits			7,169				6,489				6,468				6,696				7,029
Occupancy and equipment			1,852				1,447				1,499				1,359				1,322
Data processing			754				714				723				703				729
Technology and software			731				700				676				573				579
FDIC insurance			631				519				475				439				420
Professional fees			244				257				235				254				287
Director fees			236				199				240				196				251
Other expenses			1,577				1,543				1,845				1,685				1,857
Total noninterest expense			13,194				11,868				12,161				11,905				12,474
Income before income taxes			6,382				7,181				5,598				7,351				7,256
Income taxes			1,190				1,372				1,073				1,445				1,394
Net income		$	5,192			$	5,809			$	4,525			$	5,906			$	5,862
Basic earnings per common share		$	0.31			$	0.35			$	0.27			$	0.35			$	0.35
Diluted earnings per common share		$	0.31			$	0.35			$	0.27			$	0.35			$	0.35

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
		For the Six Months Ended
CONSOLIDATED STATEMENTS OF INCOME		June 30, 2024			June 30, 2023
Interest income:
Loans, including fees		$	81,896		$	67,959
Securities:
Taxable			6,810			6,748
Tax-exempt			1,618			1,768
Interest-bearing deposits			1,814			55
Total interest income			92,138			76,530
Interest expense:
Deposits			45,502			29,616
Federal funds purchased and other short-term borrowings			4,133			4,343
Subordinated notes			2,213			2,215
Federal Home Loan Bank advances			5,043			2,883
Long-term debt			1,267			1,437
Total interest expense			58,158			40,494
Net interest income			33,980			36,036
Credit loss expense (benefit)			—			—
Net interest income after credit loss expense (benefit)			33,980			36,036
Noninterest income:
Service charges on deposit accounts			922			920
Debit card usage fees			948			997
Trust services			1,570			1,455
Increase in cash value of bank-owned life insurance			552			507
Gain from bank-owned life insurance			—			691
Other income			653			776
Total noninterest income			4,645			5,346
Noninterest expense:
Salaries and employee benefits			13,658			13,896
Occupancy and equipment			3,299			2,649
Data processing			1,468			1,364
Technology and software			1,431			1,092
FDIC insurance			1,150			836
Professional fees			501			537
Director fees			435			456
Other expenses			3,120			3,715
Total noninterest expense			25,062			24,545
Income before income taxes			13,563			16,837
Income taxes			2,562			3,131
Net income		$	11,001		$	13,706
Basic earnings per common share		$	0.66		$	0.82
Diluted earnings per common share		$	0.65		$	0.82

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
		As of and for the Quarter Ended																				For the Six Months Ended
COMMON SHARE DATA		June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				June 30, 2024				June 30, 2023
Earnings per common share (basic)		$	0.31			$	0.35			$	0.27			$	0.35			$	0.35			$	0.66			$	0.82
Earnings per common share (diluted)			0.31				0.35				0.27				0.35				0.35				0.65				0.82
Dividends per common share			0.25				0.25				0.25				0.25				0.25				0.50				0.50
Book value per common share(1)			13.30				13.31				13.46				12.19				12.98
Closing stock price			17.90				17.83				21.20				16.31				18.41
Market price/book value(2)			134.59	%			133.96	%			157.50	%			133.80	%			141.83	%
Price earnings ratio(3)			14.36				12.77				19.79				11.75				13.11
Annualized dividend yield(4)			5.59	%			5.61	%			4.72	%			6.13	%			5.43	%
REGULATORY CAPITAL RATIOS
Consolidated:
Total risk-based capital ratio			11.85	%			11.78	%			11.88	%			11.96	%			12.15	%
Tier 1 risk-based capital ratio			9.30				9.23				9.30				9.37				9.51
Tier 1 leverage capital ratio			8.08				8.36				8.50				8.58				8.60
Common equity tier 1 ratio			8.74				8.67				8.74				8.80				8.92
West Bank:
Total risk-based capital ratio			12.66	%			12.63	%			12.76	%			12.89	%			13.13	%
Tier 1 risk-based capital ratio			11.79				11.76				11.89				12.01				12.24
Tier 1 leverage capital ratio			10.25				10.65				10.86				11.00				11.08
Common equity tier 1 ratio			11.79				11.76				11.89				12.01				12.24
KEY PERFORMANCE RATIOS AND OTHER METRICS
Return on average assets(5)			0.53	%			0.61	%			0.48	%			0.64	%			0.64	%			0.57	%			0.76	%
Return on average equity(6)			9.50				10.63				8.89				10.89				11.03				10.07				12.90
Net interest margin(7)(13)			1.86				1.88				1.87				1.91				2.02				1.87				2.12
Yield on interest-earning assets(8)(13)			5.13				4.99				4.87				4.70				4.57				5.06				4.49
Cost of interest-bearing liabilities			3.83				3.70				3.60				3.38				3.10				3.77				2.94
Efficiency ratio(9)(13)			67.14				62.04				64.66				60.83				62.83				64.62				58.91
Nonperforming assets to total assets(10)			0.01				0.01				0.01				0.01				0.01
ACL ratio(11)			0.95				0.95				0.97				0.99				1.00
Loans/total assets			75.63				75.20				76.52				76.98				76.31
Loans/total deposits			94.27				97.23				98.44				103.42				98.97
Tangible common equity ratio(12)			5.65				5.65				5.88				5.51				5.90

(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 Six Months Ended
		June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				June 30, 2024				June 30, 2023
Reconciliation of net interest income and net interest margin on a FTE basis to GAAP:
Net interest income (GAAP)		$	17,230			$	16,750			$	16,361			$	16,634			$	17,341			$	33,980			$	36,036
Tax-equivalent adjustment (1)			55				82				95				113				122				137				283
Net interest income on a FTE basis (non-GAAP)			17,285				16,832				16,456				16,747				17,463				34,117				36,319
Average interest-earning assets			3,731,674				3,595,954				3,487,799				3,478,053				3,461,313				3,663,814				3,448,722
Net interest margin on a FTE basis (non-GAAP)			1.86	%			1.88	%			1.87	%			1.91	%			2.02	%			1.87	%			2.12	%
Reconciliation of efficiency ratio on an adjusted and FTE basis to GAAP:
Net interest income on a FTE basis (non-GAAP)		$	17,285			$	16,832			$	16,456			$	16,747			$	17,463			$	34,117			$	36,319
Noninterest income			2,346				2,299				1,898				2,822				2,389				4,645				5,346
Adjustment for realized securities losses, net			—				—				431				—				—				—				—
Adjustment for losses on disposal of premises and equipment, net			21				—				24				3				2				21				2
Adjusted income			19,652				19,131				18,809				19,572				19,854				38,783				41,667
Noninterest expense			13,194				11,868				12,161				11,905				12,474				25,062				24,545
Efficiency ratio on an adjusted and FTE basis (non-GAAP) (2)			67.14	%			62.04	%			64.66	%			60.83	%			62.83	%			64.62	%			58.91	%

(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.

FAQ

What was West Bancorporation's (WTBA) net income for Q2 2024?

West Bancorporation (WTBA) reported a net income of $5.2 million for Q2 2024.

How much was the quarterly dividend declared by West Bancorporation (WTBA) for Q2 2024?

West Bancorporation (WTBA) declared a regular quarterly dividend of $0.25 per common share for Q2 2024.

What was West Bancorporation's (WTBA) loan growth in Q2 2024?

West Bancorporation (WTBA) reported loan growth of $18.6 million, or 2.5% annualized, in Q2 2024.

How did West Bancorporation's (WTBA) deposits change in Q2 2024?

West Bancorporation's (WTBA) deposits increased by $115.9 million, or 3.8%, in Q2 2024.

What was West Bancorporation's (WTBA) efficiency ratio in Q2 2024?

West Bancorporation's (WTBA) efficiency ratio was 67.14% for Q2 2024.