West Bancorporation, Inc. Announces First Quarter 2024 Financial Results and Declares Quarterly Dividend
WEST DES MOINES, Iowa, April 25, 2024 (GLOBE NEWSWIRE) -- West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent company of West Bank, today reported first quarter 2024 net income of $5.8 million, or $0.35 per diluted common share, compared to fourth quarter 2023 net income of $4.5 million, or $0.27 per diluted common share, and first quarter 2023 net income of $7.8 million, or $0.47 per diluted common share. On April 24, 2024, the Company’s Board of Directors declared a regular quarterly dividend of $0.25 per common share. The dividend is payable on May 22, 2024, to stockholders of record on May 8, 2024.
David Nelson, President and Chief Executive Officer of the Company, commented, “We have completed our move to our new headquarters building in West Des Moines. After being in the same leased space for over 50 years, our new building is an opportunity to consolidate our corporate operations under one roof, provide space for future growth and enhance business development opportunities. This construction project was years in the making and is a commitment to honor our 131 year history and support the future of our community.”
David Nelson added, “Like the rest of our industry, our Company continues to experience margin challenges in 2024. High short-term rates, an ongoing inverted yield curve and aggressive deposit competition continues to have a significant impact on our cost of funds and net interest margin. We have a clear understanding of our path forward to more normalized margins and earnings.”
First Quarter 2024 Financial Highlights
| Quarter Ended March 31, 2024 | ||
| Net income (in thousands) | $5,809 | |
| Return on average equity | 10.63 | % |
| Return on average assets | 0.61 | % |
| Efficiency ratio (a non-GAAP measure) | 62.04 | % |
| Nonperforming assets to total assets | 0.01 | % |
First Quarter 2024 Compared to Fourth Quarter 2023 Overview
- Loans increased $52.6 million in the first quarter of 2024, or 7.2 percent annualized. The increase is primarily due to the funding of previously committed construction loans.
- No credit loss expense was recorded in the first quarter of 2024, compared to a credit loss expense of $500 thousand recorded in the fourth quarter of 2023. The $500 thousand credit loss expense recorded in the fourth quarter of 2023 was due to growth in loans and unfunded commitments.
- The allowance for credit losses to total loans was 0.95 percent at March 31, 2024, compared to 0.97 percent at December 31, 2023. Nonaccrual loans at March 31, 2024 consisted of one loan with a balance of $289 thousand, compared to one loan with a balance of $296 thousand at December 31, 2023.
- Deposits increased $91.3 million, or 3.1 percent, in the first quarter of 2024. Brokered deposits totaled $396.4 million at March 31, 2024, compared to $305.4 million at December 31, 2023, an increase of $91.0 million. Excluding brokered deposits, deposits increased $0.3 million during the first quarter of 2024. As of March 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 27.2 percent of total deposits.
- Borrowed funds increased to $639.7 million at March 31, 2024, compared to $592.6 million at December 31, 2023. The increase was primarily attributable to an increase of $48.2 million in federal funds purchased and other short-term borrowings.
- The efficiency ratio (a non-GAAP measure) was 62.04 percent for the first quarter of 2024, compared to 64.66 percent for the fourth quarter of 2023. The decrease in the efficiency ratio was primarily due to the increase in net interest income.
- Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 1.88 percent for the first quarter of 2024, compared to 1.87 percent for the fourth quarter of 2023. Net interest income for the first quarter of 2024 was $16.8 million, compared to $16.4 million for the fourth quarter of 2023.
- The tangible common equity ratio was 5.65 percent at March 31, 2024, compared to 5.88 percent at December 31, 2023. The decrease was attributable to the increase in accumulated other comprehensive loss, which was primarily driven by the effect of increasing long-term interest rates in the first quarter on the unrealized market value adjustment of our available for sale investment portfolio. While accumulated other comprehensive losses reduce tangible common equity, they have no impact on regulatory capital.
First Quarter 2024 Compared to First Quarter 2023 Overview
- Loans increased $223.9 million at March 31, 2024, or 8.1 percent, compared to March 31, 2023.
- Deposits increased $266.6 million at March 31, 2024, compared to March 31, 2023. Included in deposits were brokered deposits totaling $396.4 million at March 31, 2024, compared to $234.2 million at March 31, 2023. Excluding brokered deposits, deposits increased $104.4 million, or 4.1 percent, as of March 31, 2024 compared to March 31, 2023.
- Borrowed funds increased to $639.7 million at March 31, 2024, compared to $580.2 million at March 31, 2023. The increase included increases of $75.0 million in FHLB one-month rolling advances hedged with long-term interest rate swaps, and $20.0 million in FHLB long-term advances, partially offset by a decrease of $30.5 million in federal funds purchased and other short-term borrowings.
- The efficiency ratio (a non-GAAP measure) was 62.04 percent for the first quarter of 2024, compared to 55.34 percent for the first quarter of 2023. The increase in the efficiency ratio in the first quarter of 2024 compared to the first quarter of 2023 was primarily due to the decreases in net interest income and noninterest income.
- Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 1.88 percent for the first quarter of 2024, compared to 2.23 percent for the first quarter of 2023. Net interest income for the first quarter of 2024 was $16.8 million, compared to $18.7 million for the first quarter of 2023. Through 2023 and the first quarter of 2024, the rising cost of deposits and borrowed funds and the change in mix of funding increased interest expense faster than the increase in interest income from loan repricing and loan originations.
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
The Company will discuss its results in a conference call scheduled for 2:00 p.m. Central Time on Thursday, April 25, 2024. The telephone number for the conference call is 800-715-9871. The conference ID for the conference call is 8178676. A recording of the call will be available until May 9, 2024, by dialing 800-770-2030.
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 recent rate increases 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; the 1 percent excise tax on stock buybacks by publicly traded companies; 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 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||||||||||||
| Assets | ||||||||||||||||||||
| Cash and due from banks | $ | 27,071 | $ | 33,245 | $ | 18,819 | $ | 29,776 | $ | 21,579 | ||||||||||
| Interest-bearing deposits | 120,946 | 32,112 | 1,802 | 1,968 | 901 | |||||||||||||||
| Securities available for sale, at fair value | 605,735 | 623,919 | 609,365 | 645,091 | 665,358 | |||||||||||||||
| Federal Home Loan Bank stock, at cost | 26,181 | 22,957 | 26,691 | 22,488 | 22,226 | |||||||||||||||
| Loans | 2,980,133 | 2,927,535 | 2,849,777 | 2,807,075 | 2,756,185 | |||||||||||||||
| Allowance for credit losses | (28,373 | ) | (28,342 | ) | (28,147 | ) | (27,938 | ) | (27,941 | ) | ||||||||||
| Loans, net | 2,951,760 | 2,899,193 | 2,821,630 | 2,779,137 | 2,728,244 | |||||||||||||||
| Premises and equipment, net | 95,880 | 86,399 | 75,675 | 66,683 | 59,565 | |||||||||||||||
| Bank-owned life insurance | 44,138 | 43,864 | 43,589 | 43,328 | 44,830 | |||||||||||||||
| Other assets | 90,981 | 84,069 | 104,329 | 90,084 | 82,240 | |||||||||||||||
| Total assets | $ | 3,962,692 | $ | 3,825,758 | $ | 3,701,900 | $ | 3,678,555 | $ | 3,624,943 | ||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||||||||
| Deposits | $ | 3,065,030 | $ | 2,973,779 | $ | 2,755,529 | $ | 2,836,325 | $ | 2,798,393 | ||||||||||
| Federal funds purchased and other short-term borrowings | 198,500 | 150,270 | 261,510 | 184,150 | 229,290 | |||||||||||||||
| Other borrowings | 441,183 | 442,367 | 443,552 | 409,736 | 350,921 | |||||||||||||||
| Other liabilities | 34,223 | 34,299 | 37,376 | 31,218 | 29,347 | |||||||||||||||
| Stockholders’ equity | 223,756 | 225,043 | 203,933 | 217,126 | 216,992 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 3,962,692 | $ | 3,825,758 | $ | 3,701,900 | $ | 3,678,555 | $ | 3,624,943 | ||||||||||
| For the Quarter Ended | ||||||||||||||||||||
| AVERAGE BALANCES | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||||||||||||
| Assets | $ | 3,812,199 | $ | 3,706,497 | $ | 3,679,541 | $ | 3,645,651 | $ | 3,617,458 | ||||||||||
| Loans | 2,949,672 | 2,857,594 | 2,813,213 | 2,783,463 | 2,745,381 | |||||||||||||||
| Deposits | 2,931,222 | 2,878,676 | 2,764,184 | 2,854,945 | 2,846,926 | |||||||||||||||
| Stockholders’ equity | 219,835 | 201,920 | 215,230 | 213,177 | 215,391 | |||||||||||||||
| WEST BANCORPORATION, INC. AND SUBSIDIARY | ||||||||||||||||||||
| Financial Information (unaudited) | ||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| As of | ||||||||||||||||||||
| LOANS | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||||||||||||
| Commercial | $ | 544,293 | $ | 531,594 | $ | 529,293 | $ | 535,085 | $ | 520,894 | ||||||||||
| Real estate: | ||||||||||||||||||||
| Construction, land and land development | 465,247 | 413,477 | 399,253 | 351,461 | 336,739 | |||||||||||||||
| 1-4 family residential first mortgages | 108,065 | 106,688 | 89,713 | 80,998 | 75,223 | |||||||||||||||
| Home equity | 14,020 | 14,618 | 12,429 | 12,625 | 9,726 | |||||||||||||||
| Commercial | 1,839,580 | 1,854,510 | 1,812,816 | 1,820,718 | 1,810,158 | |||||||||||||||
| Consumer and other | 12,844 | 10,930 | 10,123 | 10,289 | 7,381 | |||||||||||||||
| 2,984,049 | 2,931,817 | 2,853,627 | 2,811,176 | 2,760,121 | ||||||||||||||||
| Net unamortized fees and costs | (3,916 | ) | (4,282 | ) | (3,850 | ) | (4,101 | ) | (3,936 | ) | ||||||||||
| Total loans | $ | 2,980,133 | $ | 2,927,535 | $ | 2,849,777 | $ | 2,807,075 | $ | 2,756,185 | ||||||||||
| Less allowance for credit losses | (28,373 | ) | (28,342 | ) | (28,147 | ) | (27,938 | ) | (27,941 | ) | ||||||||||
| Net loans | $ | 2,951,760 | $ | 2,899,193 | $ | 2,821,630 | $ | 2,779,137 | $ | 2,728,244 | ||||||||||
| CREDIT QUALITY | ||||||||||||||||||||
| Pass | $ | 2,983,618 | $ | 2,931,377 | $ | 2,853,100 | $ | 2,810,640 | $ | 2,706,951 | ||||||||||
| Watch | 142 | 144 | 184 | 187 | 52,766 | |||||||||||||||
| Substandard | 289 | 296 | 343 | 349 | 404 | |||||||||||||||
| Doubtful | — | — | — | — | — | |||||||||||||||
| Total loans | $ | 2,984,049 | $ | 2,931,817 | $ | 2,853,627 | $ | 2,811,176 | $ | 2,760,121 | ||||||||||
| DEPOSITS | ||||||||||||||||||||
| Noninterest-bearing demand | $ | 521,377 | $ | 548,726 | $ | 551,688 | $ | 568,029 | $ | 605,666 | ||||||||||
| Interest-bearing demand | 449,946 | 481,207 | 417,802 | 459,030 | 486,656 | |||||||||||||||
| Savings and money market - non-brokered | 1,315,698 | 1,315,741 | 1,249,309 | 1,302,468 | 1,202,756 | |||||||||||||||
| Money market - brokered | 119,840 | 124,335 | 99,282 | 114,142 | 92,524 | |||||||||||||||
| Total nonmaturity deposits | 2,406,861 | 2,470,009 | 2,318,081 | 2,443,669 | 2,387,602 | |||||||||||||||
| Time - non-brokered | 381,646 | 322,694 | 299,683 | 276,097 | 269,102 | |||||||||||||||
| Time - brokered | 276,523 | 181,076 | 137,765 | 116,559 | 141,689 | |||||||||||||||
| Total time deposits | 658,169 | 503,770 | 437,448 | 392,656 | 410,791 | |||||||||||||||
| Total deposits | $ | 3,065,030 | $ | 2,973,779 | $ | 2,755,529 | $ | 2,836,325 | $ | 2,798,393 | ||||||||||
| BORROWINGS | ||||||||||||||||||||
| Federal funds purchased and other short-term borrowings | $ | 198,500 | $ | 150,270 | $ | 261,510 | $ | 184,150 | $ | 229,290 | ||||||||||
| Subordinated notes, net | 79,697 | 79,631 | 79,566 | 79,500 | 79,435 | |||||||||||||||
| Federal Home Loan Bank advances | 315,000 | 315,000 | 315,000 | 280,000 | 220,000 | |||||||||||||||
| Long-term debt | 46,486 | 47,736 | 48,986 | 50,236 | 51,486 | |||||||||||||||
| Total borrowings | $ | 639,683 | $ | 592,637 | $ | 705,062 | $ | 593,886 | $ | 580,211 | ||||||||||
| STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
| Preferred stock | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
| Common stock | 3,000 | 3,000 | 3,000 | 3,000 | 3,000 | |||||||||||||||
| Additional paid-in capital | 33,685 | 34,197 | 33,487 | 32,642 | 31,797 | |||||||||||||||
| Retained earnings | 272,997 | 271,369 | 271,025 | 269,301 | 267,620 | |||||||||||||||
| Accumulated other comprehensive loss | (85,926 | ) | (83,523 | ) | (103,579 | ) | (87,817 | ) | (85,425 | ) | ||||||||||
| Total Stockholders’ Equity | $ | 223,756 | $ | 225,043 | $ | 203,933 | $ | 217,126 | $ | 216,992 | ||||||||||
| WEST BANCORPORATION, INC. AND SUBSIDIARY | ||||||||||||||||||||
| Financial Information (unaudited) | ||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||||||||||||
| Interest income: | ||||||||||||||||||||
| Loans, including fees | $ | 40,196 | $ | 38,208 | $ | 36,756 | $ | 35,011 | $ | 32,948 | ||||||||||
| Securities: | ||||||||||||||||||||
| Taxable | 3,416 | 3,521 | 3,427 | 3,432 | 3,316 | |||||||||||||||
| Tax-exempt | 810 | 869 | 880 | 883 | 885 | |||||||||||||||
| Interest-bearing deposits | 148 | 85 | 29 | 25 | 30 | |||||||||||||||
| Total interest income | 44,570 | 42,683 | 41,092 | 39,351 | 37,179 | |||||||||||||||
| Interest expense: | ||||||||||||||||||||
| Deposits | 21,559 | 20,024 | 17,156 | 16,277 | 13,339 | |||||||||||||||
| Federal funds purchased and other short-term borrowings | 2,183 | 2,024 | 3,165 | 2,264 | 2,079 | |||||||||||||||
| Subordinated notes | 1,108 | 1,114 | 1,113 | 1,109 | 1,106 | |||||||||||||||
| Federal Home Loan Bank advances | 2,325 | 2,482 | 2,329 | 1,621 | 1,262 | |||||||||||||||
| Long-term debt | 645 | 678 | 695 | 739 | 698 | |||||||||||||||
| Total interest expense | 27,820 | 26,322 | 24,458 | 22,010 | 18,484 | |||||||||||||||
| Net interest income | 16,750 | 16,361 | 16,634 | 17,341 | 18,695 | |||||||||||||||
| Credit loss expense | — | 500 | 200 | — | — | |||||||||||||||
| Net interest income after credit loss expense | 16,750 | 15,861 | 16,434 | 17,341 | 18,695 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||
| Service charges on deposit accounts | 460 | 476 | 463 | 458 | 462 | |||||||||||||||
| Debit card usage fees | 458 | 488 | 495 | 511 | 486 | |||||||||||||||
| Trust services | 776 | 782 | 831 | 749 | 706 | |||||||||||||||
| Increase in cash value of bank-owned life insurance | 274 | 275 | 262 | 250 | 257 | |||||||||||||||
| Gain from bank-owned life insurance | — | — | — | — | 691 | |||||||||||||||
| Loan swap fees | — | — | 431 | — | — | |||||||||||||||
| Realized securities losses, net | — | (431 | ) | — | — | — | ||||||||||||||
| Other income | 331 | 308 | 340 | 421 | 355 | |||||||||||||||
| Total noninterest income | 2,299 | 1,898 | 2,822 | 2,389 | 2,957 | |||||||||||||||
| Noninterest expense: | ||||||||||||||||||||
| Salaries and employee benefits | 6,489 | 6,468 | 6,696 | 7,029 | 6,867 | |||||||||||||||
| Occupancy and equipment | 1,447 | 1,499 | 1,359 | 1,322 | 1,327 | |||||||||||||||
| Data processing | 714 | 723 | 703 | 729 | 635 | |||||||||||||||
| Technology and software | 700 | 676 | 573 | 579 | 513 | |||||||||||||||
| FDIC insurance | 519 | 475 | 439 | 420 | 416 | |||||||||||||||
| Professional fees | 257 | 235 | 254 | 287 | 250 | |||||||||||||||
| Director fees | 199 | 240 | 196 | 251 | 205 | |||||||||||||||
| Other expenses | 1,543 | 1,845 | 1,685 | 1,857 | 1,858 | |||||||||||||||
| Total noninterest expense | 11,868 | 12,161 | 11,905 | 12,474 | 12,071 | |||||||||||||||
| Income before income taxes | 7,181 | 5,598 | 7,351 | 7,256 | 9,581 | |||||||||||||||
| Income taxes | 1,372 | 1,073 | 1,445 | 1,394 | 1,737 | |||||||||||||||
| Net income | $ | 5,809 | $ | 4,525 | $ | 5,906 | $ | 5,862 | $ | 7,844 | ||||||||||
| Basic earnings per common share | $ | 0.35 | $ | 0.27 | $ | 0.35 | $ | 0.35 | $ | 0.47 | ||||||||||
| Diluted earnings per common share | $ | 0.35 | $ | 0.27 | $ | 0.35 | $ | 0.35 | $ | 0.47 | ||||||||||
| WEST BANCORPORATION, INC. AND SUBSIDIARY | ||||||||||||||||||||
| Financial Information (unaudited) | ||||||||||||||||||||
| As of and for the Quarter Ended | ||||||||||||||||||||
| COMMON SHARE DATA | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||||||||||||
| Earnings per common share (basic) | $ | 0.35 | $ | 0.27 | $ | 0.35 | $ | 0.35 | $ | 0.47 | ||||||||||
| Earnings per common share (diluted) | 0.35 | 0.27 | 0.35 | 0.35 | 0.47 | |||||||||||||||
| Dividends per common share | 0.25 | 0.25 | 0.25 | 0.25 | 0.25 | |||||||||||||||
| Book value per common share(1) | 13.31 | 13.46 | 12.19 | 12.98 | 12.98 | |||||||||||||||
| Closing stock price | 17.83 | 21.20 | 16.31 | 18.41 | 18.27 | |||||||||||||||
| Market price/book value(2) | 133.96 | % | 157.50 | % | 133.80 | % | 141.83 | % | 140.76 | % | ||||||||||
| Price earnings ratio(3) | 12.77 | 19.79 | 11.75 | 13.11 | 9.56 | |||||||||||||||
| Annualized dividend yield(4) | 5.61 | % | 4.72 | % | 6.13 | % | 5.43 | % | 5.47 | % | ||||||||||
| REGULATORY CAPITAL RATIOS | ||||||||||||||||||||
| Consolidated: | ||||||||||||||||||||
| Total risk-based capital ratio | 11.78 | % | 11.88 | % | 11.96 | % | 12.15 | % | 12.17 | % | ||||||||||
| Tier 1 risk-based capital ratio | 9.23 | 9.30 | 9.37 | 9.51 | 9.51 | |||||||||||||||
| Tier 1 leverage capital ratio | 8.36 | 8.50 | 8.58 | 8.60 | 8.60 | |||||||||||||||
| Common equity tier 1 ratio | 8.67 | 8.74 | 8.80 | 8.92 | 8.92 | |||||||||||||||
| West Bank: | ||||||||||||||||||||
| Total risk-based capital ratio | 12.63 | % | 12.76 | % | 12.89 | % | 13.13 | % | 13.16 | % | ||||||||||
| Tier 1 risk-based capital ratio | 11.76 | 11.89 | 12.01 | 12.24 | 12.26 | |||||||||||||||
| Tier 1 leverage capital ratio | 10.65 | 10.86 | 11.00 | 11.08 | 11.10 | |||||||||||||||
| Common equity tier 1 ratio | 11.76 | 11.89 | 12.01 | 12.24 | 12.26 | |||||||||||||||
| KEY PERFORMANCE RATIOS AND OTHER METRICS | ||||||||||||||||||||
| Return on average assets(5) | 0.61 | % | 0.48 | % | 0.64 | % | 0.64 | % | 0.88 | % | ||||||||||
| Return on average equity(6) | 10.63 | 8.89 | 10.89 | 11.03 | 14.77 | |||||||||||||||
| Net interest margin(7)(13) | 1.88 | 1.87 | 1.91 | 2.02 | 2.23 | |||||||||||||||
| Yield on interest-earning assets(8)(13) | 4.99 | 4.87 | 4.70 | 4.57 | 4.41 | |||||||||||||||
| Cost of interest-bearing liabilities | 3.70 | 3.60 | 3.38 | 3.10 | 2.76 | |||||||||||||||
| Efficiency ratio(9)(13) | 62.04 | 64.66 | 60.83 | 62.83 | 55.34 | |||||||||||||||
| Nonperforming assets to total assets(10) | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | |||||||||||||||
| ACL ratio(11) | 0.95 | 0.97 | 0.99 | 1.00 | 1.01 | |||||||||||||||
| Loans/total assets | 75.20 | 76.52 | 76.98 | 76.31 | 76.03 | |||||||||||||||
| Loans/total deposits | 97.23 | 98.44 | 103.42 | 98.97 | 98.49 | |||||||||||||||
| Tangible common equity ratio(12) | 5.65 | 5.88 | 5.51 | 5.90 | 5.99 | |||||||||||||||
(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 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 | |||||||||||||||||||
| March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||||||||
| Reconciliation of net interest income and net interest margin on a FTE basis to GAAP: | ||||||||||||||||||||
| Net interest income (GAAP) | $ | 16,750 | $ | 16,361 | $ | 16,634 | $ | 17,341 | $ | 18,695 | ||||||||||
| Tax-equivalent adjustment(1) | 82 | 95 | 113 | 122 | 161 | |||||||||||||||
| Net interest income on a FTE basis (non-GAAP) | 16,832 | 16,456 | 16,747 | 17,463 | 18,856 | |||||||||||||||
| Average interest-earning assets | 3,595,954 | 3,487,799 | 3,478,053 | 3,461,313 | 3,435,988 | |||||||||||||||
| Net interest margin on a FTE basis (non-GAAP) | 1.88 | % | 1.87 | % | 1.91 | % | 2.02 | % | 2.23 | % | ||||||||||
| Reconciliation of efficiency ratio on an adjusted and FTE basis to GAAP: | ||||||||||||||||||||
| Net interest income on a FTE basis (non-GAAP) | $ | 16,832 | $ | 16,456 | $ | 16,747 | $ | 17,463 | $ | 18,856 | ||||||||||
| Noninterest income | 2,299 | 1,898 | 2,822 | 2,389 | 2,957 | |||||||||||||||
| Adjustment for realized securities losses, net | — | 431 | — | — | — | |||||||||||||||
| Adjustment for losses on disposal of premises and equipment, net | — | 24 | 3 | 2 | — | |||||||||||||||
| Adjusted income | 19,131 | 18,809 | 19,572 | 19,854 | 21,813 | |||||||||||||||
| Noninterest expense | 11,868 | 12,161 | 11,905 | 12,474 | 12,071 | |||||||||||||||
| Efficiency ratio on an adjusted and FTE basis (non-GAAP)(2) | 62.04 | % | 64.66 | % | 60.83 | % | 62.83 | % | 55.34 | % | ||||||||||
(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.
