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

Rhea-AI Summary

West Bancorporation reported third quarter 2024 net income of $6.0 million, or $0.35 per diluted share, compared to $5.2 million in Q2 2024. The company declared a quarterly dividend of $0.25 per share. Key highlights include loan growth of $22.4 million (3.0% annualized), deposit increase of $97.6 million (3.1%), and a net interest margin of 1.91%. The company maintained strong credit quality with nonperforming assets at 0.01% of total assets. The efficiency ratio improved to 63.28% from 67.14% in Q2 2024, driven by increased net interest income.

Positive

• Net income increased to $6.0 million from $5.2 million in Q2 2024
• Loans grew by $171.4 million (6.0%) year-over-year
• Deposits increased by $97.6 million (3.1%) in Q3
• Net interest income improved to $18.0 million from $17.2 million in Q2
• Excellent credit quality with nonperforming assets at 0.01%
• Efficiency ratio improved to 63.28% from 67.14% in Q2

Negative

• Increased provision for credit losses of $1.0 million compared to no provision in Q2
• High level of uninsured deposits at 27.8% of total deposits
• Efficiency ratio deteriorated compared to 60.83% in Q3 2023

Insights

Financial Analyst

West Bancorporation's Q3 2024 results show modest improvement with $6.0 million in net income ($0.35 per share), up from $5.2 million in Q2. Key metrics reveal:

• Loan portfolio grew by $22.4 million (3.0% annualized)
• Deposits increased by $97.6 million (3.1%)
• Net interest margin improved to 1.91% from 1.86% in Q2
• Efficiency ratio enhanced to 63.28% from 67.14%

The bank's pristine credit quality (0.01% nonperforming assets) and strong deposit growth demonstrate resilient fundamentals, though the high level of uninsured deposits (27.8%) warrants monitoring. The reduction in borrowed funds and improved efficiency metrics suggest strengthening operational stability.

WEST DES MOINES, Iowa, Oct. 24, 2024 (GLOBE NEWSWIRE) -- West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent company of West Bank, today reported third quarter 2024 net income of $6.0 million, or $0.35 per diluted common share, compared to second quarter 2024 net income of $5.2 million, or $0.31 per diluted common share, and third quarter 2023 net income of $5.9 million, or $0.35 per diluted common share. On October 23, 2024, the Company’s Board of Directors declared a regular quarterly dividend of $0.25 per common share. The dividend is payable on November 20, 2024, to stockholders of record on November 6, 2024.

David Nelson, President and Chief Executive Officer of the Company, commented, “Our third quarter results include moderate growth in loans and core deposits along with an increase in quarterly net interest income and net interest margin. 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%.”

David Nelson added, “West Bank is focused on initiatives that will drive sustained core profitability. Those initiatives are centered around our culture of building strong relationships and providing exceptional personal service to drive growth in both commercial and consumer banking services.”

Third Quarter 2024 Financial Highlights

		Quarter Ended September 30, 2024				Nine Months Ended September 30, 2024
	Net income (in thousands)	$5,952				$16,953
	Return on average equity		10.41%				10.18%
	Return on average assets		0.60%				0.59%
	Efficiency ratio (a non-GAAP measure)		63.28%				64.16%
	Nonperforming assets to total assets		0.01%				0.01%

Third Quarter 2024 Compared to Second Quarter 2024 Overview

• Loans increased $22.4 million in the third quarter of 2024, or 3.0 percent annualized. The increase is primarily due to the funding of previously committed construction loans.
  
  
• A provision for credit losses on loans of $1.0 million was recorded in the third quarter of 2024, compared to no provision in the second quarter 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 second quarter of 2024. 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 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 0.97 percent and 0.95 percent at September 30, 2024 and June 30, 2024, respectively. Nonaccrual loans at September 30, 2024 consisted of two loans with a total balance of $233 thousand, compared to three loans with a balance of $521 thousand at June 30, 2024.
  
  
• Deposits increased $97.6 million, or 3.1 percent, in the third quarter of 2024. Brokered deposits totaled $425.9 million at September 30, 2024, compared to $370.3 million at June 30, 2024, an increase of $55.6 million. Excluding brokered deposits, deposits increased $42.0 million during the third quarter of 2024. As of September 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 27.8 percent of total deposits.
  
  
• Borrowed funds decreased to $438.8 million at September 30, 2024, compared to $525.5 million at June 30, 2024. The decrease was primarily due to the balance of federal funds purchased and other short-term borrowings decreasing to $0 as of September 30, 2024, from $85.5 million as of June 30, 2024 as a result of growth in deposits.
  
  
• The efficiency ratio (a non-GAAP measure) was 63.28 percent for the third quarter of 2024, compared to 67.14 percent for the second quarter of 2024. The improvement in the efficiency ratio was primarily due to the increase in net interest income. In the third quarter of 2024, the increase in interest income on loans outpaced the increase in interest expense on deposits and borrowed funds.
  
  
• Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 1.91 percent for the third quarter of 2024, compared to 1.86 percent for the second quarter of 2024. Net interest income for the third quarter of 2024 was $18.0 million, compared to $17.2 million for the second quarter of 2024.
  
  
• The tangible common equity ratio was 5.90 percent as of September 30, 2024, compared to 5.65 percent as of June 30, 2024. The increase in the tangible common equity ratio was driven by retained net income and the decrease in accumulated other comprehensive loss, which was primarily the result of the increase in the market value of our available for sale investment portfolio.
  

Third Quarter 2024 Compared to Third Quarter 2023 Overview

• Loans increased $171.4 million at September 30, 2024, or 6.0 percent, compared to September 30, 2023. The increase is primarily due to increases in commercial real estate loans and the funding of previously committed construction loans.
  
  
• Deposits increased to $3.3 billion at September 30, 2024, compared to $2.8 billion at September 30, 2023. Included in deposits were brokered deposits totaling $425.9 million at September 30, 2024, compared to $237.0 million at September 30, 2023. Brokered deposits were used to reduce short-term borrowed funds and to fund loan growth. Excluding brokered deposits, deposits increased $334.2 million, or 13.3 percent, as of September 30, 2024, compared to September 30, 2023. Deposit growth included a mix of public funds and commercial and consumer deposits.
  
  
• Borrowed funds decreased to $438.8 million at September 30, 2024, compared to $705.1 million at September 30, 2023. The decrease was primarily attributable to a decrease of $261.5 million in federal funds purchased and other short-term borrowings as a result of growth in deposits.
  
  
• The efficiency ratio (a non-GAAP measure) was 63.28 percent for the third quarter of 2024, compared to 60.83 percent for the third quarter of 2023. The increase in the efficiency ratio in the third quarter of 2024 compared to the third quarter of 2023 was primarily due to the increase in noninterest expense, partially offset by an increase in net interest income. 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 1.91 percent for both the third quarter of 2024 and the third quarter of 2023. Net interest income for the third quarter of 2024 was $18.0 million, compared to $16.6 million for the third 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, October 24, 2024. 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 November 7, 2024, by dialing 800-770-2030. The conference ID for the replay call is 7846129, 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 changes in interest rates; 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 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		September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023
Assets
Cash and due from banks		$	34,157			$	27,994			$	27,071			$	33,245			$	18,819
Interest-bearing deposits			123,646				121,825				120,946				32,112				1,802
Securities available for sale, at fair value			597,745				588,452				605,735				623,919				609,365
Federal Home Loan Bank stock, at cost			17,195				21,065				26,181				22,957				26,691
Loans			3,021,221				2,998,774				2,980,133				2,927,535				2,849,777
Allowance for credit losses			(29,419	)			(28,422	)			(28,373	)			(28,342	)			(28,147	)
Loans, net			2,991,802				2,970,352				2,951,760				2,899,193				2,821,630
Premises and equipment, net			106,771				101,965				95,880				86,399				75,675
Bank-owned life insurance			44,703				44,416				44,138				43,864				43,589
Other assets			72,547				89,046				90,981				84,069				104,329
Total assets		$	3,988,566			$	3,965,115			$	3,962,692			$	3,825,758			$	3,701,900
Liabilities and Stockholders’ Equity
Deposits		$	3,278,553			$	3,180,922			$	3,065,030			$	2,973,779			$	2,755,529
Federal funds purchased and other short-term borrowings			—				85,500				198,500				150,270				261,510
Other borrowings			438,814				439,998				441,183				442,367				443,552
Other liabilities			35,846				34,812				34,223				34,299				37,376
Stockholders’ equity			235,353				223,883				223,756				225,043				203,933
Total liabilities and stockholders’ equity		$	3,988,566			$	3,965,115			$	3,962,692			$	3,825,758			$	3,701,900
		For the Quarter Ended
AVERAGE BALANCES		September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023
Assets		$	3,973,824			$	3,964,109			$	3,812,199			$	3,706,497			$	3,679,541
Loans			2,991,272				2,994,492				2,949,672				2,857,594				2,813,213
Deposits			3,258,669				3,123,282				2,956,635				2,878,676				2,764,184
Stockholders’ equity			227,513				219,771				219,835				201,920				215,230

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
		As of
LOANS		September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023
Commercial		$	512,884			$	526,589			$	544,293			$	531,594			$	529,293
Real estate:
Construction, land and land development			520,516				496,864				465,247				413,477				399,253
1-4 family residential first mortgages			89,749				92,230				108,065				106,688				89,713
Home equity			17,140				15,264				14,020				14,618				12,429
Commercial			1,870,132				1,856,301				1,839,580				1,854,510				1,812,816
Consumer and other			14,261				15,234				12,844				10,930				10,123
			3,024,682				3,002,482				2,984,049				2,931,817				2,853,627
Net unamortized fees and costs			(3,461	)			(3,708	)			(3,916	)			(4,282	)			(3,850	)
Total loans		$	3,021,221			$	2,998,774			$	2,980,133			$	2,927,535			$	2,849,777
Less: allowance for credit losses			(29,419	)			(28,422	)			(28,373	)			(28,342	)			(28,147	)
Net loans		$	2,991,802			$	2,970,352			$	2,951,760			$	2,899,193			$	2,821,630
CREDIT QUALITY
Pass		$	3,016,493			$	2,994,310			$	2,983,618			$	2,931,377			$	2,853,100
Watch			7,956				7,651				142				144				184
Substandard			233				521				289				296				343
Doubtful			—				—				—				—				—
Total loans		$	3,024,682			$	3,002,482			$	2,984,049			$	2,931,817			$	2,853,627
DEPOSITS
Noninterest-bearing demand		$	525,332			$	530,441			$	521,377			$	548,726			$	551,688
Interest-bearing demand			438,402				443,658				449,946				481,207				417,802
Savings and money market - non-brokered			1,481,840				1,483,264				1,315,698				1,315,741				1,249,309
Money market - brokered			123,780				97,259				119,840				124,335				99,282
Total nonmaturity deposits			2,569,354				2,554,622				2,406,861				2,470,009				2,318,081
Time - non-brokered			407,109				353,269				381,646				322,694				299,683
Time - brokered			302,090				273,031				276,523				181,076				137,765
Total time deposits			709,199				626,300				658,169				503,770				437,448
Total deposits		$	3,278,553			$	3,180,922			$	3,065,030			$	2,973,779			$	2,755,529
BORROWINGS
Federal funds purchased and other short-term borrowings		$	—			$	85,500			$	198,500			$	150,270			$	261,510
Subordinated notes, net			79,828				79,762				79,697				79,631				79,566
Federal Home Loan Bank advances			315,000				315,000				315,000				315,000				315,000
Long-term debt			43,986				45,236				46,486				47,736				48,986
Total borrowings		$	438,814			$	525,498			$	639,683			$	592,637			$	705,062
STOCKHOLDERS’ EQUITY
Preferred stock		$	—			$	—			$	—			$	—			$	—
Common stock			3,000				3,000				3,000				3,000				3,000
Additional paid-in capital			34,960				34,322				33,685				34,197				33,487
Retained earnings			275,724				273,981				272,997				271,369				271,025
Accumulated other comprehensive loss			(78,331	)			(87,420	)			(85,926	)			(83,523	)			(103,579	)
Total stockholders’ equity		$	235,353			$	223,883			$	223,756			$	225,043			$	203,933

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
		For the Quarter Ended
CONSOLIDATED STATEMENTS OF INCOME		September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023
Interest income:
Loans, including fees		$	42,504			$	41,700			$	40,196			$	38,208			$	36,756
Securities:
Taxable			3,261				3,394				3,416				3,521				3,427
Tax-exempt			806				808				810				869				880
Interest-bearing deposits			2,041				1,666				148				85				29
Total interest income			48,612				47,568				44,570				42,683				41,092
Interest expense:
Deposits			26,076				23,943				21,559				20,024				17,156
Federal funds purchased and other short-term borrowings			115				1,950				2,183				2,024				3,165
Subordinated notes			1,112				1,105				1,108				1,114				1,113
Federal Home Loan Bank advances			2,748				2,718				2,325				2,482				2,329
Long-term debt			601				622				645				678				695
Total interest expense			30,652				30,338				27,820				26,322				24,458
Net interest income			17,960				17,230				16,750				16,361				16,634
Credit loss expense			—				—				—				500				200
Net interest income after credit loss expense			17,960				17,230				16,750				15,861				16,434
Noninterest income:
Service charges on deposit accounts			459				462				460				476				463
Debit card usage fees			500				490				458				488				495
Trust services			828				794				776				782				831
Increase in cash value of bank-owned life insurance			287				278				274				275				262
Loan swap fees			—				—				—				—				431
Realized securities losses, net			—				—				—				(431	)			—
Other income			285				322				331				308				340
Total noninterest income			2,359				2,346				2,299				1,898				2,822
Noninterest expense:
Salaries and employee benefits			6,823				7,169				6,489				6,468				6,696
Occupancy and equipment			1,926				1,852				1,447				1,499				1,359
Data processing			771				754				714				723				703
Technology and software			722				731				700				676				573
FDIC insurance			711				631				519				475				439
Professional fees			239				244				257				235				254
Director fees			223				236				199				240				196
Other expenses			1,477				1,577				1,543				1,845				1,685
Total noninterest expense			12,892				13,194				11,868				12,161				11,905
Income before income taxes			7,427				6,382				7,181				5,598				7,351
Income taxes			1,475				1,190				1,372				1,073				1,445
Net income		$	5,952			$	5,192			$	5,809			$	4,525			$	5,906
Basic earnings per common share		$	0.35			$	0.31			$	0.35			$	0.27			$	0.35
Diluted earnings per common share		$	0.35			$	0.31			$	0.35			$	0.27			$	0.35

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
		For the Nine Months Ended
CONSOLIDATED STATEMENTS OF INCOME		September 30, 2024				September 30, 2023
Interest income:
Loans, including fees		$	124,400			$	104,715
Securities:
Taxable			10,071				10,175
Tax-exempt			2,424				2,648
Interest-bearing deposits			3,855				84
Total interest income			140,750				117,622
Interest expense:
Deposits			71,578				46,772
Federal funds purchased and other short-term borrowings			4,248				7,508
Subordinated notes			3,325				3,328
Federal Home Loan Bank advances			7,791				5,212
Long-term debt			1,868				2,132
Total interest expense			88,810				64,952
Net interest income			51,940				52,670
Credit loss expense			—				200
Net interest income after credit loss expense			51,940				52,470
Noninterest income:
Service charges on deposit accounts			1,381				1,383
Debit card usage fees			1,448				1,492
Trust services			2,398				2,286
Increase in cash value of bank-owned life insurance			839				769
Loan swap fees			—				431
Gain from bank-owned life insurance			—				691
Other income			938				1,116
Total noninterest income			7,004				8,168
Noninterest expense:
Salaries and employee benefits			20,481				20,592
Occupancy and equipment			5,225				4,008
Data processing			2,239				2,067
Technology and software			2,153				1,665
FDIC insurance			1,861				1,275
Professional fees			740				791
Director fees			658				652
Other expenses			4,597				5,400
Total noninterest expense			37,954				36,450
Income before income taxes			20,990				24,188
Income taxes			4,037				4,576
Net income		$	16,953			$	19,612
Basic earnings per common share		$	1.01			$	1.17
Diluted earnings per common share		$	1.00			$	1.17

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
		As of and for the Quarter Ended																				For the Nine Months Ended
COMMON SHARE DATA		September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				September 30, 2024				September 30, 2023
Earnings per common share (basic)		$	0.35			$	0.31			$	0.35			$	0.27			$	0.35			$	1.01			$	1.17
Earnings per common share (diluted)			0.35				0.31				0.35				0.27				0.35				1.00				1.17
Dividends per common share			0.25				0.25				0.25				0.25				0.25				0.75				0.75
Book value per common share(1)			13.98				13.30				13.31				13.46				12.19
Closing stock price			19.01				17.90				17.83				21.20				16.31
Market price/book value(2)			135.98	%			134.59	%			133.96	%			157.50	%			133.80	%
Price earnings ratio(3)			13.65				14.36				12.77				19.79				11.75
Annualized dividend yield(4)			5.26	%			5.59	%			5.61	%			4.72	%			6.13	%
REGULATORY CAPITAL RATIOS
Consolidated:
Total risk-based capital ratio			11.95	%			11.85	%			11.78	%			11.88	%			11.96	%
Tier 1 risk-based capital ratio			9.39				9.30				9.23				9.30				9.37
Tier 1 leverage capital ratio			8.15				8.08				8.36				8.50				8.58
Common equity tier 1 ratio			8.83				8.74				8.67				8.74				8.80
West Bank:
Total risk-based capital ratio			12.73	%			12.66	%			12.63	%			12.76	%			12.89	%
Tier 1 risk-based capital ratio			11.86				11.79				11.76				11.89				12.01
Tier 1 leverage capital ratio			10.29				10.25				10.65				10.86				11.00
Common equity tier 1 ratio			11.86				11.79				11.76				11.89				12.01
KEY PERFORMANCE RATIOS AND OTHER METRICS
Return on average assets(5)			0.60	%			0.53	%			0.61	%			0.48	%			0.64	%			0.59	%			0.72	%
Return on average equity(6)			10.41				9.50				10.63				8.89				10.89				10.18				12.22
Net interest margin(7)(13)			1.91				1.86				1.88				1.87				1.91				1.88				2.05
Yield on interest-earning assets(8)(13)			5.16				5.13				4.99				4.87				4.70				5.10				4.56
Cost of interest-bearing liabilities			3.84				3.83				3.70				3.60				3.38				3.79				3.09
Efficiency ratio(9)(13)			63.28				67.14				62.04				64.66				60.83				64.16				59.52
Nonperforming assets to total assets(10)			0.01				0.01				0.01				0.01				0.01
ACL ratio(11)			0.97				0.95				0.95				0.97				0.99
Loans/total assets			75.75				75.63				75.20				76.52				76.98
Loans/total deposits			92.15				94.27				97.23				98.44				103.42
Tangible common equity ratio(12)			5.90				5.65				5.65				5.88				5.51

(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 Nine Months Ended
		September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				September 30, 2024				September 30, 2023
Reconciliation of net interest income and net interest margin on a FTE basis to GAAP:
Net interest income (GAAP)		$	17,960			$	17,230			$	16,750			$	16,361			$	16,634			$	51,940			$	52,670
Tax-equivalent adjustment (1)			29				55				82				95				113				166				396
Net interest income on a FTE basis (non-GAAP)			17,989				17,285				16,832				16,456				16,747				52,106				53,066
Average interest-earning assets			3,749,688				3,731,674				3,595,954				3,487,799				3,478,053				3,692,647				3,458,606
Net interest margin on a FTE basis (non-GAAP)			1.91	%			1.86	%			1.88	%			1.87	%			1.91	%			1.88	%			2.05	%
Reconciliation of efficiency ratio on an adjusted and FTE basis to GAAP:
Net interest income on a FTE basis (non-GAAP)		$	17,989			$	17,285			$	16,832			$	16,456			$	16,747			$	52,106			$	53,066
Noninterest income			2,359				2,346				2,299				1,898				2,822				7,004				8,168
Adjustment for realized securities losses, net			—				—				—				431				—				—				—
Adjustment for losses on disposal of premises and equipment, net			26				21				—				24				3				47				5
Adjusted income			20,374				19,652				19,131				18,809				19,572				59,157				61,239
Noninterest expense			12,892				13,194				11,868				12,161				11,905				37,954				36,450
Efficiency ratio on an adjusted and FTE basis (non-GAAP) (2)			63.28	%			67.14	%			62.04	%			64.66	%			60.83	%			64.16	%			59.52	%

(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) earnings per share in Q3 2024?

West Bancorporation reported earnings of $0.35 per diluted share in Q3 2024.

What dividend did WTBA declare for Q3 2024?

WTBA declared a quarterly dividend of $0.25 per common share, payable on November 20, 2024.

How much did WTBA's deposits grow in Q3 2024?

Deposits increased by $97.6 million, or 3.1%, in the third quarter of 2024.

What was WTBA's net interest margin in Q3 2024?

The net interest margin was 1.91% for the third quarter of 2024.