West Bancorporation, Inc. Announces Third Quarter 2025 Financial Results and Declares Quarterly Dividend

WEST DES MOINES, Iowa, Oct. 23, 2025 (GLOBE NEWSWIRE) -- West Bancorporation, Inc. (NASDAQ:WTBA, the "Company")), parent company of West Bank, today reported third quarter 2025 net income of $9.3 million, or $0.55 per diluted common share, compared to second quarter 2025 net income of $8.0 million, or $0.47 per diluted common share, and third quarter 2024 net income of $6.0 million, or $0.35 per diluted common share. For the first nine months of 2025, net income was $25.1 million, or $1.48 per diluted common share, compared to $17.0 million, or $1.00 per diluted common share, for the first nine months of 2024. On October 22, 2025, the Company's Board of Directors declared a regular quarterly dividend of $0.25 per common share. The dividend is payable on November 19, 2025, to stockholders of record on November 5, 2025.

David Nelson, President and Chief Executive Officer of the Company, commented, "We had a strong third quarter with continued improvements in net interest income and net interest margin while prudently managing our noninterest expenses. We see opportunities for further improvement in earnings and our best-in-class credit quality metrics continue to be extremely strong. We had no loans on nonaccrual status and no loans past due greater than 30 days at September 30, 2025."

David Nelson added, "West Bank remains focused on executing our strategic goals and mission objectives. Building strong relationships and ensuring our customers and communities receive outstanding care and support continues to be the backbone of our culture. We are excited about upcoming enhancements to our treasury management services and digital banking capabilities, initiatives that support our customer-centric approach to delivering financial solutions."

Third Quarter 2025 Financial Highlights
	Quarter Ended September 30, 2025				Quarter Ended June 30, 2025				Quarter Ended September 30, 2024
Net income (in thousands)	$9,314				$7,979				$5,952
Return on average equity		15.25	%			13.65	%			10.41	%
Return on average assets		0.92	%			0.80	%			0.60	%
Efficiency ratio (a non-GAAP measure)		54.06	%			56.45	%			63.28	%
Nonperforming assets to total assets		0.00	%			0.00	%			0.01	%

Third Quarter 2025 Compared to Second Quarter 2025 Overview

• Loans increased $42.5 million, or 1.4 percent, in the third quarter of 2025, primarily due to an increase in commercial real estate loans and commercial loans, partially offset by a decline in construction loans.
  
  
  
  
• No credit loss expense on loans was recorded in either the third or second quarter of 2025.
  
  
  
  
• The allowance for credit losses to total loans was 1.01 percent at September 30, 2025, compared to 1.03 percent at June 30, 2025. There were no nonaccrual loans at September 30, 2025 or June 30, 2025. Watch list loans increased from $10.8 million as of June 30, 2025 to $38.7 million as of September 30, 2025. This increase was primarily due to one customer relationship. We believe, as of September 30, 2025, the loans within this relationship are sufficiently collateralized.
  
  
  
  
• Deposits decreased $85.5 million, or 2.5 percent, in the third quarter of 2025. Brokered deposits totaled $204.8 million at September 30, 2025, compared to $208.3 million at June 30, 2025, a decrease of $3.5 million. Excluding brokered deposits, deposits decreased $82.0 million, or 2.6 percent, during the third quarter of 2025. The decline in deposits was primarily due to normal and anticipated cash flow fluctuations in core public fund deposits. As of September 30, 2025, estimated uninsured deposits, which exclude deposits in a reciprocal deposit network, brokered deposits and public funds protected by state programs, accounted for approximately 28.6 percent of total deposits.
  
  
  
  
• Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 2.36 percent for the third quarter of 2025, compared to 2.27 percent for the second quarter of 2025. Net interest income for the third quarter of 2025 was $22.5 million, compared to $21.4 million for the second quarter of 2025. The increase in net interest income was primarily due to an increase in interest income on loans and short-term assets consisting of deposits with banks and securities purchased under agreements to resell.
  
  
  
  
• The efficiency ratio (a non-GAAP measure) was 54.06 percent for the third quarter of 2025, compared to 56.45 percent for the second quarter of 2025. The improvement in the efficiency ratio was primarily due to the increase in net interest income.
  
  
  
  
• The tangible common equity ratio was 6.40 percent as of September 30, 2025, compared to 5.94 percent as of June 30, 2025. The increase in the tangible common equity ratio was due to growth in retained earnings and a decrease in accumulated other comprehensive loss.
  
  
  
  
• Income tax expense decreased $225 thousand in the third quarter of 2025 compared to the second quarter of 2025. This was primarily due to a change in estimate of energy-related investment tax credits in the third quarter of 2025.
  
  

Third Quarter 2025 Compared to Third Quarter 2024 Overview

• Loans decreased $12.3 million at September 30, 2025, or 0.4 percent, compared to September 30, 2024. The decrease was primarily due to the decrease in construction loans, partially offset by an increase in commercial real estate loans.
  
  
  
  
• Deposits increased $28.0 million, or 0.9 percent, at September 30, 2025, compared to September 30, 2024. Included in deposits were brokered deposits totaling $204.8 million at September 30, 2025, compared to $425.9 million at September 30, 2024. Excluding brokered deposits, deposits increased $249.0 million, or 8.7 percent, as of September 30, 2025, compared to September 30, 2024. In the second quarter of 2025, a local municipal customer deposited approximately $243.0 million of bond proceeds that are expected to be withdrawn over 24 months.
  
  
  
  
• Borrowed funds decreased to $389.1 million at September 30, 2025, compared to $438.8 million at September 30, 2024. The decrease was primarily attributable to a decrease of $45.0 million in Federal Home Loan Bank advances. The reduction in Federal Home Loan Bank advances was due to the repayment of advances at maturity.
  
  
  
  
• Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 2.36 percent for the third quarter of 2025, compared to 1.91 percent for the third quarter of 2024. Net interest income for the third quarter of 2025 was $22.5 million, compared to $18.0 million for the third quarter of 2024. The increase in net interest margin and net interest income was primarily due to the decrease in interest expense on deposits and borrowed funds. The cost of deposits and cost of borrowed funds decreased by 63 and 11 basis points, respectively, in the third quarter of 2025 compared to the third quarter of 2024. Also contributing to the improvement was an increase in average deposit balances of $93.0 million, in comparing the same time periods, which resulted in the reduction of higher-cost borrowed funds and an increase in interest-earning deposits with banks and securities purchased under agreements to resell.
  
  
  
  
• The efficiency ratio (a non-GAAP measure) was 54.06 percent for the third quarter of 2025, compared to 63.28 percent for the third quarter of 2024. The improvement in the efficiency ratio in the third quarter of 2025 compared to the third quarter of 2024 was primarily due to the increase in net interest income, partially offset by an increase in noninterest expense.
  
  
  
  
• The tangible common equity ratio was 6.40 percent as of September 30, 2025, compared to 5.90 percent as of September 30, 2024. The increase in the tangible common equity ratio was due to growth in retained earnings and a decrease in accumulated other comprehensive loss.
  
  

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 23, 2025. The telephone number for the conference call is 800-715-9871. The conference ID for the conference call is 7846129. A recording of the call will be available until November 6, 2025, by dialing 800-770-2030. The conference ID for the replay call is 7846129.

About West Bancorporation, Inc. (NASDAQ:WTBA)

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

Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to the Company's business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements" within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may appear throughout this report. These forward-looking statements are generally identified by the words "believes," "expects," "intends," "anticipates," "projects," "future," "confident," "may," "should," "will," "strategy," "plan," "opportunity," "will be," "will likely result," "will continue" or similar references, or references to estimates, predictions or future events. Such forward-looking statements are based upon certain underlying assumptions, risks and uncertainties. Because of the possibility that the underlying assumptions are incorrect or do not materialize as expected in the future, actual results could differ materially from these forward-looking statements. Risks and uncertainties that may affect future results include: interest rate risk, including the effects of changes in interest rates; 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; technological changes implemented by us and other parties, including third-party vendors, which may be more difficult to implement or more expensive than anticipated or which may have unforeseen consequences to us and our customers, including the development and implementation of tools incorporating artificial intelligence; 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; the threat or imposition of domestic or foreign tariffs or other governmental policies impacting the global supply chain and the value of products produced by our commercial borrowers; changes in local, national and international economic conditions, including the level and impact of inflation, and future monetary policies of the Federal Reserve in response thereto, and possible recession; the impact of bank failures or adverse developments at other banks and related negative publicity about the banking industry in general on investor and depositor sentiment regarding the stability and liquidity of banks; changes in legal and regulatory requirements, limitations and costs; changes in customers' acceptance of the Company's products and services; the occurrence of fraudulent activity, breaches or failures of our or our third-party partners' information security controls or cyber-security related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools; unexpected outcomes of existing or new litigation involving the Company; the monetary, trade and other regulatory policies of the U.S. government; acts of war or terrorism, including the ongoing Israeli-Palestinian conflict and the Russian invasion of Ukraine, widespread disease or pandemics, or other adverse external events; risks related to climate change and the negative impact it may have on our customers and their businesses; changes to U.S. tax laws, regulations and guidance; potential changes in federal policy and at regulatory agencies as a result of the 2024 presidential election; new or revised accounting policies and practices, as may be adopted by state and federal regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board; the impact of a continued shutdown of the U.S. government; talent and labor shortages and employee turnover; and any other risks described in the "Risk Factors" sections of reports filed by the Company with the Securities and Exchange Commission. The Company undertakes no obligation to revise or update such forward-looking statements to reflect current or future events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
		As of
CONDENSED BALANCE SHEETS		September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2024				September 30, 2024
Assets
Cash and due from banks		$	26,875			$	35,796			$	39,253			$	28,750			$	34,157
Interest-earning deposits with banks			109,265				212,450				171,357				214,728				123,646
Securities purchased under agreements to resell			96,792				96,955				—				—				—
Securities available for sale, at fair value			537,856				536,709				546,619				544,565				597,745
Federal Home Loan Bank stock, at cost			15,190				15,311				15,216				15,129				17,195
Loans			3,008,888				2,966,357				3,016,471				3,004,860				3,021,221
Allowance for credit losses			(30,515	)			(30,539	)			(30,526	)			(30,432	)			(29,419	)
Loans, net			2,978,373				2,935,818				2,985,945				2,974,428				2,991,802
Premises and equipment, net			109,212				109,806				110,270				109,985				106,771
Bank-owned life insurance			45,875				45,567				45,272				44,990				44,703
Other assets			66,042				68,257				72,737				82,416				72,547
Total assets		$	3,985,480			$	4,056,669			$	3,986,669			$	4,014,991			$	3,988,566
Liabilities and Stockholders' Equity
Deposits		$	3,306,517			$	3,391,993			$	3,324,518			$	3,357,596			$	3,278,553
Other borrowings			389,076				390,260				391,445				392,629				438,814
Other liabilities			34,754				33,486				32,833				36,891				35,846
Stockholders' equity			255,133				240,930				237,873				227,875				235,353
Total liabilities and stockholders' equity		$	3,985,480			$	4,056,669			$	3,986,669			$	4,014,991			$	3,988,566
		For the Quarter Ended
AVERAGE BALANCES		September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2024				September 30, 2024
Assets		$	4,004,769			$	4,016,490			$	3,944,789			$	4,135,049			$	3,973,824
Loans			2,959,962				2,989,638				3,016,119				3,007,558				2,991,272
Deposits			3,333,800				3,353,982				3,284,394				3,434,234				3,258,669
Stockholders' equity			242,245				234,399				229,874				230,720				227,513

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
		As of
LOANS		September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2024				September 30, 2024
Commercial		$	511,316			$	500,854			$	531,267			$	514,232			$	512,884
Real estate:
Construction, land and land development			448,660				459,037				451,230				508,147				520,516
1-4 family residential first mortgages			87,784				86,173				86,292				87,858				89,749
Home equity			27,083				24,285				21,961				19,294				17,140
Commercial			1,912,235				1,875,857				1,909,330				1,861,195				1,870,132
Consumer and other			24,697				22,900				19,323				17,287				14,261
			3,011,775				2,969,106				3,019,403				3,008,013				3,024,682
Net unamortized fees and costs			(2,887	)			(2,749	)			(2,932	)			(3,153	)			(3,461	)
Total loans		$	3,008,888			$	2,966,357			$	3,016,471			$	3,004,860			$	3,021,221
Less: allowance for credit losses			(30,515	)			(30,539	)			(30,526	)			(30,432	)			(29,419	)
Net loans		$	2,978,373			$	2,935,818			$	2,985,945			$	2,974,428			$	2,991,802
CREDIT QUALITY
Pass		$	2,973,103			$	2,958,318			$	3,011,231			$	2,999,531			$	3,016,493
Watch			38,672				10,788				7,991				8,349				7,956
Substandard			—				—				181				133				233
Doubtful			—				—				—				—				—
Total loans		$	3,011,775			$	2,969,106			$	3,019,403			$	3,008,013			$	3,024,682
DEPOSITS
Noninterest-bearing demand		$	512,869			$	521,990			$	519,771			$	541,053			$	525,332
Interest-bearing demand			448,731				461,207				517,409				543,855				438,402
Savings and money market - non-brokered			1,677,543				1,749,049				1,490,189				1,517,510				1,481,840
Money market - brokered			121,849				98,877				143,423				126,381				123,780
Total nonmaturity deposits			2,760,992				2,831,123				2,670,792				2,728,799				2,569,354
Time - non-brokered			462,542				451,463				461,655				488,760				407,109
Time - brokered			82,983				109,407				192,071				140,037				302,090
Total time deposits			545,525				560,870				653,726				628,797				709,199
Total deposits		$	3,306,517			$	3,391,993			$	3,324,518			$	3,357,596			$	3,278,553
BORROWINGS
Subordinated notes, net		$	80,090			$	80,024			$	79,959			$	79,893			$	79,828
Federal Home Loan Bank advances			270,000				270,000				270,000				270,000				315,000
Long-term debt			38,986				40,236				41,486				42,736				43,986
Total borrowings		$	389,076			$	390,260			$	391,445			$	392,629			$	438,814
STOCKHOLDERS' EQUITY
Preferred stock		$	—			$	—			$	—			$	—			$	—
Common stock			3,000				3,000				3,000				3,000				3,000
Additional paid-in capital			36,473				35,773				35,072				35,619				34,960
Retained earnings			291,069				285,990				282,247				278,613				275,724
Accumulated other comprehensive loss			(75,409	)			(83,833	)			(82,446	)			(89,357	)			(78,331	)
Total stockholders' equity		$	255,133			$	240,930			$	237,873			$	227,875			$	235,353

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
		For the Quarter Ended
CONSOLIDATED STATEMENTS OF INCOME		September 30, 2025			June 30, 2025			March 31, 2025			December 31, 2024				September 30, 2024
Interest income:
Loans, including fees		$	42,198		$	41,666		$	40,988		$	41,822			$	42,504
Securities:
Taxable			2,643			2,685			2,788			2,959				3,261
Tax-exempt			739			742			743			795				806
Deposits with banks			2,087			2,847			1,617			3,740				2,041
Securities purchased under agreements to resell			1,258			22			—			—				—
Total interest income			48,925			47,962			46,136			49,316				48,612
Interest expense:
Deposits			22,539			22,676			21,423			25,706				26,076
Federal funds purchased and other short-term borrowings			—			—			—			—				115
Subordinated notes			1,107			1,104			1,105			1,106				1,112
Federal Home Loan Bank advances			2,292			2,259			2,235			2,522				2,748
Long-term debt			486			504			518			560				601
Total interest expense			26,424			26,543			25,281			29,894				30,652
Net interest income			22,501			21,419			20,855			19,422				17,960
Credit loss expense			—			—			—			1,000				—
Net interest income after credit loss expense			22,501			21,419			20,855			18,422				17,960
Noninterest income:
Service charges on deposit accounts			491			486			471			462				459
Debit card usage fees			477			478			446			471				500
Trust services			894			801			777			1,051				828
Increase in cash value of bank-owned life insurance			308			295			282			287				287
Realized securities losses, net			—			—			—			(1,172	)			—
Other income			333			350			267			331				285
Total noninterest income			2,503			2,410			2,243			1,430				2,359
Noninterest expense:
Salaries and employee benefits			7,457			7,343			7,004			7,107				6,823
Occupancy and equipment			2,090			2,034			1,963			2,095				1,926
Data processing			663			643			617			752				771
Technology and software			794			791			786			743				722
FDIC insurance			637			670			587			699				711
Professional fees			303			303			308			301				239
Director fees			195			202			206			170				223
Other expenses			1,411			1,499			1,592			1,532				1,477
Total noninterest expense			13,550			13,485			13,063			13,399				12,892
Income before income taxes			11,454			10,344			10,035			6,453				7,427
Income taxes			2,140			2,365			2,193			(644	)			1,475
Net income		$	9,314		$	7,979		$	7,842		$	7,097			$	5,952
Basic earnings per common share		$	0.55		$	0.47		$	0.47		$	0.42			$	0.35
Diluted earnings per common share		$	0.55		$	0.47		$	0.46		$	0.42			$	0.35

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
		For the Nine Months Ended
CONSOLIDATED STATEMENTS OF INCOME		September 30, 2025			September 30, 2024
Interest income:
Loans, including fees		$	124,852		$	124,400
Securities:
Taxable			8,116			10,071
Tax-exempt			2,224			2,424
Deposits with banks			6,551			3,855
Securities purchased under agreements to resell			1,280			—
Total interest income			143,023			140,750
Interest expense:
Deposits			66,638			71,578
Federal funds purchased and other short-term borrowings			—			4,248
Subordinated notes			3,316			3,325
Federal Home Loan Bank advances			6,786			7,791
Long-term debt			1,508			1,868
Total interest expense			78,248			88,810
Net interest income			64,775			51,940
Credit loss expense			—			—
Net interest income after credit loss expense			64,775			51,940
Noninterest income:
Service charges on deposit accounts			1,448			1,381
Debit card usage fees			1,401			1,448
Trust services			2,472			2,398
Increase in cash value of bank-owned life insurance			885			839
Other income			950			938
Total noninterest income			7,156			7,004
Noninterest expense:
Salaries and employee benefits			21,804			20,481
Occupancy and equipment			6,087			5,225
Data processing			1,923			2,239
Technology and software			2,371			2,153
FDIC insurance			1,894			1,861
Professional fees			914			740
Director fees			603			658
Other expenses			4,502			4,597
Total noninterest expense			40,098			37,954
Income before income taxes			31,833			20,990
Income taxes			6,698			4,037
Net income		$	25,135		$	16,953
Basic earnings per common share		$	1.49		$	1.01
Diluted earnings per common share		$	1.48		$	1.00

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, 2025				June 30, 2025				March 31,  2025				December 31,  2024				September 30,  2024				September 30,  2025				September 30,  2024
Earnings per common share (basic)		$	0.55			$	0.47			$	0.47			$	0.42			$	0.35			$	1.49			$	1.01
Earnings per common share (diluted)			0.55				0.47				0.46				0.42				0.35				1.48				1.00
Dividends per common share			0.25				0.25				0.25				0.25				0.25				0.75				0.75
Book value per common share(1)			15.06				14.22				14.06				13.54				13.98
Closing stock price			20.32				19.63				19.94				21.65				19.01
Market price/book value(2)			134.93	%			138.05	%			141.82	%			159.90	%			135.98	%
Price earnings ratio(3)			9.31				10.41				10.46				12.96				13.65
Annualized dividend yield(4)			4.92	%			5.09	%			5.02	%			4.62	%			5.26	%
REGULATORY CAPITAL RATIOS
Consolidated:
Total risk-based capital ratio			12.54	%			12.53	%			12.18	%			12.11	%			11.95	%
Tier 1 risk-based capital ratio			9.93				9.89				9.59				9.51				9.39
Tier 1 leverage capital ratio			8.51				8.33				8.36				7.93				8.15
Common equity tier 1 ratio			9.37				9.32				9.02				8.95				8.83
West Bank:
Total risk-based capital ratio			13.17	%			13.21	%			12.90	%			12.86	%			12.73	%
Tier 1 risk-based capital ratio			12.26				12.29				11.99				11.96				11.86
Tier 1 leverage capital ratio			10.50				10.36				10.46				9.97				10.29
Common equity tier 1 ratio			12.26				12.29				11.99				11.96				11.86
KEY PERFORMANCE RATIOS AND OTHER METRICS
Return on average assets(5)			0.92	%			0.80	%			0.81	%			0.68	%			0.60	%			0.84	%			0.59	%
Return on average equity(6)			15.25				13.65				13.84				12.24				10.41				14.27				10.18
Net interest margin(7)(13)			2.36				2.27				2.28				1.98				1.91				2.30				1.88
Yield on interest-earning assets(8)(13)			5.13				5.07				5.04				5.02				5.16				5.08				5.10
Cost of interest-bearing liabilities			3.26				3.28				3.25				3.57				3.84				3.27				3.79
Efficiency ratio(9)(13)			54.06				56.45				56.37				60.79				63.28				55.60				64.16
Nonperforming assets to total assets(10)			0.00				0.00				0.00				0.00				0.01
ACL ratio(11)			1.01				1.03				1.01				1.01				0.97
Loans/total assets			75.50				73.12				75.66				74.84				75.75
Loans/total deposits			91.00				87.45				90.73				89.49				92.15
Tangible common equity ratio(12)			6.40				5.94				5.97				5.68				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 Nine Months Ended
		September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2024				September 30, 2024				September 30, 2025				September 30, 2024
Reconciliation of net interest income and net interest margin on a FTE basis to GAAP:
Net interest income (GAAP)		$	22,501			$	21,419			$	20,855			$	19,422			$	17,960			$	64,775			$	51,940
Tax-equivalent adjustment(1)			61				59				66				16				29				186				166
Net interest income on a FTE basis (non-GAAP)			22,562				21,478				20,921				19,438				17,989				64,961				52,106
Average interest-earning assets			3,790,154				3,799,081				3,717,441				3,910,978				3,749,688				3,769,158				3,692,647
Net interest margin on a FTE basis (non-GAAP)			2.36	%			2.27	%			2.28	%			1.98	%			1.91	%			2.30	%			1.88	%
Reconciliation of efficiency ratio on an adjusted and FTE basis to GAAP:
Net interest income on a FTE basis (non-GAAP)		$	22,562			$	21,478			$	20,921			$	19,438			$	17,989			$	64,961			$	52,106
Noninterest income			2,503				2,410				2,243				1,430				2,359				7,156				7,004
Adjustment for realized securities losses, net			—				—				—				1,172				—				—				—
Adjustment for losses on disposal of premises and equipment, net			—				—				8				—				26				8				47
Adjusted income			25,065				23,888				23,172				22,040				20,374				72,125				59,157
Noninterest expense			13,550				13,485				13,063				13,399				12,892				40,098				37,954
Efficiency ratio on an adjusted and FTE basis (non-GAAP)(2)			54.06	%			56.45	%			56.37	%			60.79	%			63.28	%			55.60	%			64.16	%

(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.

For more information contact:

Jane Funk, Executive Vice President, Treasurer and Chief Financial Officer (515) 222-5766