West Bancorporation, Inc. Announces First Quarter 2026 Financial Results And Declares Quarterly Dividend

WEST DES MOINES, Iowa, April 23, 2026 (GLOBE NEWSWIRE) -- West Bancorporation, Inc. (NASDAQ:WTBA, the "Company")), parent company of West Bank, today reported first quarter 2026 net income of $10.6 million, or $0.61 per diluted common share, compared to fourth quarter 2025 net income of $7.4 million, or $0.43 per diluted common share, and first quarter 2025 net income of $7.8 million, or $0.46 per diluted common share. On April 22, 2026, the Company's Board of Directors declared a regular quarterly dividend of $0.25 per common share. The dividend is payable on May 20, 2026, to stockholders of record on May 6, 2026.

David Nelson, President and Chief Executive Officer of the Company, commented, "Our priorities continue to center on our relationship building strategies to drive improvements in profitability and build shareholder value. Our net interest margin continues to expand and we saw net income increase 34.8 percent in the first quarter of 2026 compared to the first quarter of 2025. Our teams are working hard at the activities that we believe will result in enhanced financial performance."

Mr. Nelson added, "Our balance sheet remains exceptionally strong, supported by solid capital and liquidity levels. Credit quality remains pristine with no loans on nonaccrual status at March 31, 2026. Additionally, this marks our seventh consecutive quarter-end with no loans greater than 30 days past due."

First Quarter 2026 Compared to Fourth Quarter 2025 Overview

• Loans decreased $10.1 million, or 0.3 percent, in the first quarter of 2026. We continue to experience notable loan payoffs as a result of secondary market refinancings and asset and business sales. The change in loan mix is primarily due to reclassifications resulting from completed construction projects moving to permanent financing and commercial loan restructurings adding real estate collateral.
  
  
  
  
• No credit loss expense on loans was recorded in either the first quarter of 2026 or fourth quarter of 2025.
  
  
  
  
• The allowance for credit losses to total loans was 1.02 percent as of both March 31, 2026 and December 31, 2025. There were no nonaccrual loans at March 31, 2026 or December 31, 2025. Watch list loans decreased from $52.2 million as of December 31, 2025 to $41.3 million as of March 31, 2026. This decrease was primarily due to the payoff of one commercial real estate loan in the first quarter of 2026 with a balance of $11.4 million.
  
  
  
  
• Deposits decreased $133.5 million, or 3.8 percent, in the first quarter of 2026. Brokered deposits totaled $116.5 million at March 31, 2026, compared to $154.6 million at December 31, 2025, a decrease of $38.1 million. Excluding brokered deposits, deposits decreased $95.4 million, or 2.9 percent, during the first quarter of 2026. The decline in deposits was due to normal cash flow fluctuations of our core depositors. As of March 31, 2026, estimated uninsured deposits, which exclude deposits in a reciprocal deposit network, brokered deposits and public funds protected by state programs, accounted for approximately 27.0 percent of total deposits.
  
  
  
  
• Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 2.59 percent for the first quarter of 2026, compared to 2.47 percent for the fourth quarter of 2025. Net interest income for the first quarter of 2026 was $24.4 million, compared to $24.2 million for the fourth quarter of 2025. The improvement in net interest margin was primarily due to a 14 basis point decrease in the cost of deposits in the first quarter of 2026 when compared to the fourth quarter of 2025.
  
  
  
  
• The efficiency ratio (a non-GAAP measure) improved to 49.85 percent for the first quarter of 2026, compared to 50.21 percent for the fourth quarter of 2025.

• The tangible common equity ratio was 6.75 percent as of March 31, 2026, compared to 6.42 percent as of December 31, 2025.
  
  

First Quarter 2026 Compared to First Quarter 2025 Overview

• Loans decreased $24.8 million at March 31, 2026, or 0.8 percent, compared to March 31, 2025. We continue to experience notable loan payoffs as a result of secondary market refinancings and asset and business sales. The change in loan mix is primarily due to reclassifications resulting from completed construction projects moving to permanent financing and commercial loan restructurings adding real estate collateral.
  
  
  
  
• Deposits increased $10.5 million, or 0.3 percent, at March 31, 2026, compared to March 31, 2025. Included in deposits were brokered deposits totaling $116.5 million at March 31, 2026, compared to $335.5 million at March 31, 2025. Excluding brokered deposits, deposits increased $229.5 million, or 7.7 percent, as of March 31, 2026, compared to March 31, 2025. 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 a 24 month time period.
  
  
  
  
• Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 2.59 percent for the first quarter of 2026, compared to 2.28 percent for the first quarter of 2025. Net interest income for the first quarter of 2026 was $24.4 million, compared to $20.9 million for the first quarter of 2025. The increase in net interest margin and net interest income was primarily due to a decrease in interest expense on deposits and borrowed funds. The cost of deposits decreased by 40 basis points in the first quarter of 2026 compared to the first quarter of 2025. This was partially offset by a $79.8 million increase in average deposit balances in the first quarter of 2026 compared to the first quarter of 2025. Additionally, the average balance of borrowed funds decreased $16.2 million in the first quarter of 2026, compared to the first quarter of 2025.
  
  
  
  
• The efficiency ratio (a non-GAAP measure) was 49.85 percent for the first quarter of 2026, compared to 56.37 percent for the first quarter of 2025. The improvement in the efficiency ratio in the first quarter of 2026 compared to the first quarter of 2025 was primarily due to the increase in net interest income.

• The tangible common equity ratio was 6.75 percent as of March 31, 2026, compared to 5.97 percent as of March 31, 2025. 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, April 23, 2026. 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 May 7, 2026, 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 Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements may appear throughout this report. These forward-looking statements are generally identified by the words "believes," "expects," "intends," "anticipates," "projects," "forecasts," "plans," "targets," "future," "confident," "potentially," "probably," "outlook," "may," "should," "would," "could," "will," "strategy," "plan," "opportunity," "will be," "will likely result," "will continue" or similar references, as well as the negative of such words, or references to estimates, predictions or future events. Forward-looking statements are not historical facts but instead represent management's current expectations and forecasts regarding future events, many of which are inherently uncertain and outside of our control. Such forward-looking statements are based upon certain underlying assumptions, known and unknown, risks and uncertainties. Because of the possibility that the underlying assumptions are incorrect or do not materialize as expected in the future, actual results may differ, possibly materially from these forward-looking statements. Risks and uncertainties that may affect future results include, but are not limited to: 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 rising 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; effects on the U.S. economy resulting from actions taken by the federal government, including executive orders and immigration enforcement; 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; the effects of acts of war or terrorism, including the wars in Iran and Ukraine and the military conflict between Israel and Hamas in the Middle East; widespread disease, pandemics or epidemics, or other adverse external events; risks related to climate change and the negative impact it may have on our customers and their business; changes to U.S. tax laws, regulations and guidance; potential changes in federal policy and at regulatory agencies; 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 "SEC"). The Company cautions readers not to place undue reliance on any forward-looking statements. Moreover, any of the forward-looking statements that the Company makes in this report or the documents the Company files with or furnishes to the SEC are based only on information then actually known to the Company and upon management's beliefs and assumptions at the time they are made, which may turn out to be wrong because of inaccurate assumptions they might make, because of the factors described above or because of other factors that the Company cannot foresee. Forward-looking statements speak only as of the date they are made, and the Company does not undertake and specifically disclaims any 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)
		As of and for the Quarter Ended
KEY PERFORMANCE RATIOS AND OTHER METRICS		March 31, 2026				December 31, 2025				September 30, 2025				June 30, 2025				March 31, 2025
Return on average assets(1)			1.06	%			0.72	%			0.92	%			0.80	%			0.81	%
Return on average equity(2)			15.91				11.33				15.25				13.65				13.84
Net interest margin(3)(13)			2.59				2.47				2.36				2.27				2.28
Yield on interest-earning assets(4)(13)			5.04				5.02				5.13				5.07				5.04
Cost of interest-bearing liabilities			2.90				3.02				3.26				3.28				3.25
Efficiency ratio(5)(13)			49.85				50.21				54.06				56.45				56.37
Nonperforming assets to total assets(6)			0.00				0.00				0.00				0.00				0.00
ACL ratio(7)			1.02				1.02				1.01				1.03				1.01
Loans/total assets			74.59				72.47				75.50				73.12				75.66
Loans/total deposits			89.71				86.54				91.00				87.45				90.73
Tangible common equity ratio(8)			6.75				6.42				6.40				5.94				5.97
COMMON SHARE DATA
Earnings per common share (basic)		$	0.62			$	0.44			$	0.55			$	0.47			$	0.47
Earnings per common share (diluted)			0.61				0.43				0.55				0.47				0.46
Dividends per common share			0.25				0.25				0.25				0.25				0.25
Book value per common share(9)			15.90				15.70				15.06				14.22				14.06
Closing stock price			23.79				22.19				20.32				19.63				19.94
Market price/book value(10)			149.62	%			141.34	%			134.93	%			138.05	%			141.82	%
Price earnings ratio(11)			9.40				12.71				9.31				10.41				10.46
Annualized dividend yield(12)			4.20	%			4.51	%			4.92	%			5.09	%			5.02	%
REGULATORY CAPITAL RATIOS
Consolidated:
Total risk-based capital ratio			12.99	%			12.77	%			12.54	%			12.53	%			12.18	%
Tier 1 risk-based capital ratio			10.34				10.14				9.93				9.89				9.59
Tier 1 leverage capital ratio			8.74				8.44				8.51				8.33				8.36
Common equity tier 1 ratio			9.77				9.56				9.37				9.32				9.02
West Bank:
Total risk-based capital ratio			13.53	%			13.35	%			13.17	%			13.21	%			12.90	%
Tier 1 risk-based capital ratio			12.61				12.44				12.26				12.29				11.99
Tier 1 leverage capital ratio			10.66				10.35				10.50				10.36				10.46
Common equity tier 1 ratio			12.61				12.44				12.26				12.29				11.99

(1) Annualized net income divided by average assets.

(2) Annualized net income divided by average stockholders' equity.

(3) Annualized tax-equivalent net interest income divided by average interest-earning assets.

(4) Annualized tax-equivalent interest income on interest-earning assets divided by average interest-earning assets.

(5) 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.

(6) Total nonperforming assets divided by total assets.

(7) Allowance for credit losses on loans divided by total loans.        

(8) Common equity less intangible assets (none held) divided by tangible assets.

(9) Includes accumulated other comprehensive loss.

(10) Closing stock price divided by book value per common share.

(11) Closing stock price divided by annualized earnings per common share (basic).

(12) Annualized dividend divided by period end closing stock price.

(13) A non-GAAP measure.

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
		As of
CONDENSED BALANCE SHEETS		March 31, 2026				December 31, 2025				September 30, 2025				June 30, 2025				March 31, 2025
Assets
Cash and due from banks		$	40,018			$	25,171			$	26,875			$	35,796			$	39,253
Interest-earning deposits with banks			180,218				324,502				109,265				212,450				171,357
Securities purchased under agreements to resell			141,742				121,413				96,792				96,955				—
Securities available for sale, at fair value			456,410				468,447				537,856				536,709				546,619
Federal Home Loan Bank stock, at cost			15,180				15,167				15,190				15,311				15,216
Loans			2,991,638				3,001,690				3,008,888				2,966,357				3,016,471
Allowance for credit losses			(30,523	)			(30,525	)			(30,515	)			(30,539	)			(30,526	)
Loans, net			2,961,115				2,971,165				2,978,373				2,935,818				2,985,945
Premises and equipment, net			107,619				108,380				109,212				109,806				110,270
Bank-owned life insurance			46,500				46,192				45,875				45,567				45,272
Other assets			62,171				61,807				66,042				68,257				72,737
Total assets		$	4,010,973			$	4,142,244			$	3,985,480			$	4,056,669			$	3,986,669
Liabilities and Stockholders' Equity
Deposits		$	3,334,972			$	3,468,470			$	3,306,517			$	3,391,993			$	3,324,518
Borrowings			375,221				376,406				389,076				390,260				391,445
Other liabilities			30,037				31,383				34,754				33,486				32,833
Stockholders' equity			270,743				265,985				255,133				240,930				237,873
Total liabilities and stockholders' equity		$	4,010,973			$	4,142,244			$	3,985,480			$	4,056,669			$	3,986,669
		For the Quarter Ended
AVERAGE BALANCES		March 31, 2026				December 31, 2025				September 30, 2025				June 30, 2025				March 31, 2025
Assets		$	4,027,218			$	4,104,279			$	4,004,769			$	4,016,490			$	3,944,789
Loans			2,971,497				2,982,754				2,959,962				2,989,638				3,016,119
Deposits			3,348,255				3,418,539				3,333,800				3,353,982				3,284,394
Stockholders' equity			269,453				259,932				242,245				234,399				229,874

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
		As of
LOANS		March 31, 2026				December 31, 2025				September 30, 2025				June 30, 2025				March 31, 2025
Commercial		$	471,423			$	505,059			$	511,316			$	500,854			$	531,267
Real estate:
Construction, land and land development			376,059				426,833				448,660				459,037				451,230
1-4 family residential first mortgages			139,118				93,122				87,784				86,173				86,292
Home equity			27,084				26,088				27,083				24,285				21,961
Commercial			1,958,189				1,929,766				1,912,235				1,875,857				1,909,330
Consumer and other			22,257				23,374				24,697				22,900				19,323
			2,994,130				3,004,242				3,011,775				2,969,106				3,019,403
Net unamortized fees and costs			(2,492	)			(2,552	)			(2,887	)			(2,749	)			(2,932	)
Total loans		$	2,991,638			$	3,001,690			$	3,008,888			$	2,966,357			$	3,016,471
Less: allowance for credit losses			(30,523	)			(30,525	)			(30,515	)			(30,539	)			(30,526	)
Net loans		$	2,961,115			$	2,971,165			$	2,978,373			$	2,935,818			$	2,985,945
CREDIT QUALITY
Pass		$	2,952,824			$	2,952,015			$	2,973,103			$	2,958,318			$	3,011,231
Watch			41,306				52,227				38,672				10,788				7,991
Substandard			—				—				—				—				181
Doubtful			—				—				—				—				—
Total loans		$	2,994,130			$	3,004,242			$	3,011,775			$	2,969,106			$	3,019,403
DEPOSITS
Noninterest-bearing demand		$	511,013			$	540,358			$	512,869			$	521,990			$	519,771
Interest-bearing demand			489,990				577,814				448,731				461,207				517,409
Savings and money market - non-brokered			1,731,835				1,739,790				1,677,543				1,749,049				1,490,189
Money market - brokered			86,304				99,718				121,849				98,877				143,423
Total nonmaturity deposits			2,819,142				2,957,680				2,760,992				2,831,123				2,670,792
Time - non-brokered			485,658				455,944				462,542				451,463				461,655
Time - brokered			30,172				54,846				82,983				109,407				192,071
Total time deposits			515,830				510,790				545,525				560,870				653,726
Total deposits		$	3,334,972			$	3,468,470			$	3,306,517			$	3,391,993			$	3,324,518
BORROWINGS
Subordinated notes, net		$	80,221			$	80,156			$	80,090			$	80,024			$	79,959
Federal Home Loan Bank advances			270,000				270,000				270,000				270,000				270,000
Long-term debt			25,000				26,250				38,986				40,236				41,486
Total borrowings		$	375,221			$	376,406			$	389,076			$	390,260			$	391,445
STOCKHOLDERS' EQUITY
Preferred stock		$	—			$	—			$	—			$	—			$	—
Common stock			3,000				3,000				3,000				3,000				3,000
Additional paid-in capital			36,553				37,231				36,473				35,773				35,072
Retained earnings			300,596				294,259				291,069				285,990				282,247
Accumulated other comprehensive loss			(69,406	)			(68,505	)			(75,409	)			(83,833	)			(82,446	)
Total stockholders' equity		$	270,743			$	265,985			$	255,133			$	240,930			$	237,873

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
		For the Quarter Ended
CONSOLIDATED STATEMENTS OF INCOME		March 31, 2026			December 31, 2025				September 30, 2025			June 30, 2025			March 31, 2025
Interest income:
Loans, including fees		$	40,946		$	41,992			$	42,198		$	41,666		$	40,988
Securities:
Taxable			2,143			2,355				2,643			2,685			2,788
Tax-exempt			638			677				739			742			743
Deposits with banks			2,047			2,808				2,087			2,847			1,617
Securities purchased under agreements to resell			1,617			1,370				1,258			22			—
Total interest income			47,391			49,202				48,925			47,962			46,136
Interest expense:
Deposits			19,261			21,112				22,539			22,676			21,423
Subordinated notes			1,104			1,109				1,107			1,104			1,105
Federal Home Loan Bank advances			2,244			2,316				2,292			2,259			2,235
Long-term debt			397			459				486			504			518
Total interest expense			23,006			24,996				26,424			26,543			25,281
Net interest income			24,385			24,206				22,501			21,419			20,855
Credit loss expense			—			—				—			—			—
Net interest income after credit loss expense			24,385			24,206				22,501			21,419			20,855
Noninterest income:
Service charges on deposit accounts			508			493				491			486			471
Debit card interchange income			472			493				477			478			446
Trust services			1,010			964				894			801			777
Increase in cash value of bank-owned life insurance			308			317				308			295			282
Realized securities losses, net			—			(3,959	)			—			—			—
Other income			256			800				333			350			267
Total noninterest income (loss)			2,554			(892	)			2,503			2,410			2,243
Noninterest expense:
Salaries and employee benefits			7,632			7,579				7,457			7,343			7,004
Occupancy and equipment			2,006			2,083				2,090			2,034			1,963
Data processing			596			673				663			643			617
Technology and software			774			789				794			791			786
FDIC insurance			473			475				637			670			587
Professional fees			278			297				303			303			308
Other expenses			1,706			1,833				1,606			1,701			1,798
Total noninterest expense			13,465			13,729				13,550			13,485			13,063
Income before income taxes			13,474			9,585				11,454			10,344			10,035
Income taxes			2,902			2,160				2,140			2,365			2,193
Net income		$	10,572		$	7,425			$	9,314		$	7,979		$	7,842
Basic earnings per common share		$	0.62		$	0.44			$	0.55		$	0.47		$	0.47
Diluted earnings per common share		$	0.61		$	0.43			$	0.55		$	0.47		$	0.46

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, 2026				December 31, 2025				September 30, 2025				June 30, 2025				March 31, 2025
Reconciliation of net interest income and net interest margin on a FTE basis to GAAP:
Net interest income (GAAP)		$	24,385			$	24,206			$	22,501			$	21,419			$	20,855
Tax-equivalent adjustment(1)			72				70				61				59				66
Net interest income on a FTE basis (non-GAAP)			24,457				24,276				22,562				21,478				20,921
Average interest-earning assets			3,821,463				3,893,827				3,790,154				3,799,081				3,717,441
Net interest margin on a FTE basis (non-GAAP)			2.59	%			2.47	%			2.36	%			2.27	%			2.28	%
Reconciliation of efficiency ratio on an adjusted and FTE basis to GAAP:
Net interest income on a FTE basis (non-GAAP)		$	24,457			$	24,276			$	22,562			$	21,478			$	20,921
Noninterest income			2,554				(892	)			2,503				2,410				2,243
Adjustment for realized securities losses, net			—				3,959				—				—				—
Adjustment for losses on disposal of premises and equipment, net			2				—				—				—				8
Adjusted income			27,013				27,343				25,065				23,888				23,172
Noninterest expense			13,465				13,729				13,550				13,485				13,063
Efficiency ratio on an adjusted and FTE basis (non-GAAP)(2)			49.85	%			50.21	%			54.06	%			56.45	%			56.37	%

(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