EX-99.1 2 wtba-20251023exhibit991.htm EX-99.1 Document

Exhibit 99.1

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Press Release
 
October 23, 2025
 
FOR IMMEDIATE RELEASE
For more information contact:
Jane Funk, Executive Vice President, Treasurer and Chief Financial Officer (515) 222-5766
 
WEST BANCORPORATION, INC. ANNOUNCES THIRD QUARTER 2025 FINANCIAL RESULTS AND DECLARES QUARTERLY DIVIDEND

West Des Moines, IA - 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, 2025Quarter Ended June 30, 2025Quarter Ended September 30, 2024
Net income (in thousands)$9,314$7,979$5,952
Return on average equity15.25 %13.65 %10.41 %
Return on average assets0.92 %0.80 %0.60 %
Efficiency ratio (a non-GAAP measure)54.06 %56.45 %63.28 %
Nonperforming assets to total assets0.00 %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 SHEETSSeptember 30, 2025June 30, 2025March 31, 2025December 31, 2024September 30, 2024
Assets
Cash and due from banks$26,875 $35,796 $39,253 $28,750 $34,157 
Interest-earning deposits with banks109,265 212,450 171,357 214,728 123,646 
Securities purchased under agreements to resell96,792 96,955 — — — 
Securities available for sale, at fair value537,856 536,709 546,619 544,565 597,745 
Federal Home Loan Bank stock, at cost15,190 15,311 15,216 15,129 17,195 
Loans3,008,888 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, net2,978,373 2,935,818 2,985,945 2,974,428 2,991,802 
Premises and equipment, net109,212 109,806 110,270 109,985 106,771 
Bank-owned life insurance45,875 45,567 45,272 44,990 44,703 
Other assets66,042 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 borrowings389,076 390,260 391,445 392,629 438,814 
Other liabilities34,754 33,486 32,833 36,891 35,846 
Stockholders’ equity255,133 240,930 237,873 227,875 235,353 
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 BALANCESSeptember 30, 2025June 30, 2025March 31, 2025December 31, 2024September 30, 2024
Assets$4,004,769 $4,016,490 $3,944,789 $4,135,049 $3,973,824 
Loans2,959,962 2,989,638 3,016,119 3,007,558 2,991,272 
Deposits3,333,800 3,353,982 3,284,394 3,434,234 3,258,669 
Stockholders’ equity242,245 234,399 229,874 230,720 227,513 



WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
As of
LOANSSeptember 30, 2025June 30, 2025March 31, 2025December 31, 2024September 30, 2024
Commercial$511,316 $500,854 $531,267 $514,232 $512,884 
Real estate:
Construction, land and land development448,660 459,037 451,230 508,147 520,516 
1-4 family residential first mortgages87,784 86,173 86,292 87,858 89,749 
Home equity27,083 24,285 21,961 19,294 17,140 
Commercial1,912,235 1,875,857 1,909,330 1,861,195 1,870,132 
Consumer and other24,697 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 
Watch38,672 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 demand448,731 461,207 517,409 543,855 438,402 
Savings and money market - non-brokered1,677,543 1,749,049 1,490,189 1,517,510 1,481,840 
Money market - brokered121,849 98,877 143,423 126,381 123,780 
    Total nonmaturity deposits2,760,992 2,831,123 2,670,792 2,728,799 2,569,354 
Time - non-brokered462,542 451,463 461,655 488,760 407,109 
Time - brokered82,983 109,407 192,071 140,037 302,090 
    Total time deposits545,525 560,870 653,726 628,797 709,199 
    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 advances270,000 270,000 270,000 270,000 315,000 
Long-term debt38,986 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 stock3,000 3,000 3,000 3,000 3,000 
Additional paid-in capital36,473 35,773 35,072 35,619 34,960 
Retained earnings291,069 285,990 282,247 278,613 275,724 
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 INCOMESeptember 30, 2025June 30, 2025March 31, 2025December 31, 2024September 30, 2024
Interest income:
Loans, including fees$42,198 $41,666 $40,988 $41,822 $42,504 
Securities:
Taxable2,643 2,685 2,788 2,959 3,261 
Tax-exempt739 742 743 795 806 
Deposits with banks2,087 2,847 1,617 3,740 2,041 
Securities purchased under agreements to resell1,258 22 — — — 
Total interest income48,925 47,962 46,136 49,316 48,612 
Interest expense:
Deposits22,539 22,676 21,423 25,706 26,076 
 Federal funds purchased and other short-term borrowings— — — — 115 
Subordinated notes1,107 1,104 1,105 1,106 1,112 
Federal Home Loan Bank advances2,292 2,259 2,235 2,522 2,748 
Long-term debt486 504 518 560 601 
Total interest expense26,424 26,543 25,281 29,894 30,652 
Net interest income22,501 21,419 20,855 19,422 17,960 
Credit loss expense— — — 1,000 — 
Net interest income after credit loss expense22,501 21,419 20,855 18,422 17,960 
Noninterest income:
Service charges on deposit accounts491 486 471 462 459 
Debit card usage fees477 478 446 471 500 
Trust services894 801 777 1,051 828 
 Increase in cash value of bank-owned life insurance308 295 282 287 287 
Realized securities losses, net— — — (1,172)— 
Other income333 350 267 331 285 
Total noninterest income2,503 2,410 2,243 1,430 2,359 
Noninterest expense:
Salaries and employee benefits7,457 7,343 7,004 7,107 6,823 
Occupancy and equipment2,090 2,034 1,963 2,095 1,926 
Data processing663 643 617 752 771 
Technology and software794 791 786 743 722 
FDIC insurance637 670 587 699 711 
Professional fees303 303 308 301 239 
Director fees195 202 206 170 223 
Other expenses1,411 1,499 1,592 1,532 1,477 
Total noninterest expense13,550 13,485 13,063 13,399 12,892 
Income before income taxes11,454 10,344 10,035 6,453 7,427 
Income taxes2,140 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 INCOMESeptember 30, 2025September 30, 2024
Interest income:
Loans, including fees$124,852 $124,400 
Securities:
Taxable8,116 10,071 
Tax-exempt2,224 2,424 
Deposits with banks6,551 3,855 
Securities purchased under agreements to resell1,280 — 
Total interest income143,023 140,750 
Interest expense:
Deposits66,638 71,578 
Federal funds purchased and other short-term borrowings— 4,248 
Subordinated notes3,316 3,325 
Federal Home Loan Bank advances6,786 7,791 
Long-term debt1,508 1,868 
Total interest expense78,248 88,810 
Net interest income64,775 51,940 
Credit loss expense— — 
Net interest income after credit loss expense64,775 51,940 
Noninterest income:
Service charges on deposit accounts1,448 1,381 
Debit card usage fees1,401 1,448 
Trust services2,472 2,398 
Increase in cash value of bank-owned life insurance885 839 
Other income950 938 
Total noninterest income7,156 7,004 
Noninterest expense:
Salaries and employee benefits21,804 20,481 
Occupancy and equipment6,087 5,225 
Data processing1,923 2,239 
Technology and software2,371 2,153 
FDIC insurance1,894 1,861 
Professional fees914 740 
Director fees603 658 
Other expenses4,502 4,597 
Total noninterest expense40,098 37,954 
Income before income taxes31,833 20,990 
Income taxes6,698 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 EndedFor the Nine Months Ended
COMMON SHARE DATASeptember 30, 2025June 30, 2025March 31, 2025December 31, 2024September 30, 2024September 30, 2025September 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 share0.25 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 price20.32 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 ratio12.54 %12.53 %12.18 %12.11 %11.95 %
Tier 1 risk-based capital ratio9.93 9.89 9.59 9.51 9.39 
Tier 1 leverage capital ratio8.51 8.33 8.36 7.93 8.15 
Common equity tier 1 ratio9.37 9.32 9.02 8.95 8.83 
West Bank:
Total risk-based capital ratio13.17 %13.21 %12.90 %12.86 %12.73 %
Tier 1 risk-based capital ratio12.26 12.29 11.99 11.96 11.86 
Tier 1 leverage capital ratio10.50 10.36 10.46 9.97 10.29 
Common equity tier 1 ratio12.26 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 liabilities3.26 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 assets75.50 73.12 75.66 74.84 75.75 
Loans/total deposits91.00 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 EndedFor the Nine Months Ended
September 30, 2025June 30, 2025March 31, 2025December 31, 2024September 30, 2024September 30, 2025September 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 assets3,790,154 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 income2,503 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 income25,065 23,888 23,172 22,040 20,374 72,125 59,157 
Noninterest expense13,550 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.