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West Bancorporation, Inc. Announces Third Quarter 2024 Financial Results and Declares Quarterly Dividend
المصدر: Nasdaq GlobeNewswire / 24 أكتوبر 2024 08:30:01 America/New_York
WEST DES MOINES, Iowa, Oct. 24, 2024 (GLOBE NEWSWIRE) -- West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent company of West Bank, today reported third quarter 2024 net income of $6.0 million, or $0.35 per diluted common share, compared to second quarter 2024 net income of $5.2 million, or $0.31 per diluted common share, and third quarter 2023 net income of $5.9 million, or $0.35 per diluted common share. On October 23, 2024, the Company’s Board of Directors declared a regular quarterly dividend of $0.25 per common share. The dividend is payable on November 20, 2024, to stockholders of record on November 6, 2024.
David Nelson, President and Chief Executive Officer of the Company, commented, “Our third quarter results include moderate growth in loans and core deposits along with an increase in quarterly net interest income and net interest margin. Our credit quality remains pristine as a result of our disciplined loan growth and credit risk management practices. The ratio of nonperforming assets to total assets remains negligible at 0.01%.”
David Nelson added, “West Bank is focused on initiatives that will drive sustained core profitability. Those initiatives are centered around our culture of building strong relationships and providing exceptional personal service to drive growth in both commercial and consumer banking services.”
Third Quarter 2024 Financial Highlights
Quarter Ended
September 30, 2024Nine Months Ended
September 30, 2024Net income (in thousands) $5,952 $16,953 Return on average equity 10.41% 10.18% Return on average assets 0.60% 0.59% Efficiency ratio (a non-GAAP measure) 63.28% 64.16% Nonperforming assets to total assets 0.01% 0.01% Third Quarter 2024 Compared to Second Quarter 2024 Overview
- Loans increased $22.4 million in the third quarter of 2024, or 3.0 percent annualized. The increase is primarily due to the funding of previously committed construction loans.
- A provision for credit losses on loans of $1.0 million was recorded in the third quarter of 2024, compared to no provision in the second quarter of 2024. A negative provision for credit losses on unfunded commitments of $1.0 million was recorded in the third quarter of 2024, compared to no provision in the second quarter of 2024. The provision for loans in the third quarter of 2024 was primarily due to changes in the forecasted loss rates due to increases in forecasted unemployment rates. The negative provision for unfunded commitments was primarily due to the decline in unfunded commitments resulting primarily from the funding of construction loans.
- The allowance for credit losses to total loans was 0.97 percent and 0.95 percent at September 30, 2024 and June 30, 2024, respectively. Nonaccrual loans at September 30, 2024 consisted of two loans with a total balance of $233 thousand, compared to three loans with a balance of $521 thousand at June 30, 2024.
- Deposits increased $97.6 million, or 3.1 percent, in the third quarter of 2024. Brokered deposits totaled $425.9 million at September 30, 2024, compared to $370.3 million at June 30, 2024, an increase of $55.6 million. Excluding brokered deposits, deposits increased $42.0 million during the third quarter of 2024. As of September 30, 2024, estimated uninsured deposits, which exclude deposits in the IntraFi® reciprocal network, brokered deposits and public funds protected by state programs, accounted for approximately 27.8 percent of total deposits.
- Borrowed funds decreased to $438.8 million at September 30, 2024, compared to $525.5 million at June 30, 2024. The decrease was primarily due to the balance of federal funds purchased and other short-term borrowings decreasing to $0 as of September 30, 2024, from $85.5 million as of June 30, 2024 as a result of growth in deposits.
- The efficiency ratio (a non-GAAP measure) was 63.28 percent for the third quarter of 2024, compared to 67.14 percent for the second quarter of 2024. The improvement in the efficiency ratio was primarily due to the increase in net interest income. In the third quarter of 2024, the increase in interest income on loans outpaced the increase in interest expense on deposits and borrowed funds.
- Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 1.91 percent for the third quarter of 2024, compared to 1.86 percent for the second quarter of 2024. Net interest income for the third quarter of 2024 was $18.0 million, compared to $17.2 million for the second quarter of 2024.
- The tangible common equity ratio was 5.90 percent as of September 30, 2024, compared to 5.65 percent as of June 30, 2024. The increase in the tangible common equity ratio was driven by retained net income and the decrease in accumulated other comprehensive loss, which was primarily the result of the increase in the market value of our available for sale investment portfolio.
Third Quarter 2024 Compared to Third Quarter 2023 Overview
- Loans increased $171.4 million at September 30, 2024, or 6.0 percent, compared to September 30, 2023. The increase is primarily due to increases in commercial real estate loans and the funding of previously committed construction loans.
- Deposits increased to $3.3 billion at September 30, 2024, compared to $2.8 billion at September 30, 2023. Included in deposits were brokered deposits totaling $425.9 million at September 30, 2024, compared to $237.0 million at September 30, 2023. Brokered deposits were used to reduce short-term borrowed funds and to fund loan growth. Excluding brokered deposits, deposits increased $334.2 million, or 13.3 percent, as of September 30, 2024, compared to September 30, 2023. Deposit growth included a mix of public funds and commercial and consumer deposits.
- Borrowed funds decreased to $438.8 million at September 30, 2024, compared to $705.1 million at September 30, 2023. The decrease was primarily attributable to a decrease of $261.5 million in federal funds purchased and other short-term borrowings as a result of growth in deposits.
- The efficiency ratio (a non-GAAP measure) was 63.28 percent for the third quarter of 2024, compared to 60.83 percent for the third quarter of 2023. The increase in the efficiency ratio in the third quarter of 2024 compared to the third quarter of 2023 was primarily due to the increase in noninterest expense, partially offset by an increase in net interest income. Occupancy and equipment expense increased primarily due to the occupancy costs associated with the Company’s newly constructed headquarters.
- Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 1.91 percent for both the third quarter of 2024 and the third quarter of 2023. Net interest income for the third quarter of 2024 was $18.0 million, compared to $16.6 million for the third quarter of 2023.
The Company filed its report on Form 10-Q with the Securities and Exchange Commission today. Please refer to that document for a more in-depth discussion of the Company’s financial results. The Form 10-Q is available on the Investor Relations section of West Bank’s website at www.westbankstrong.com.
The Company will discuss its results in a conference call scheduled for 2:00 p.m. Central Time on Thursday, October 24, 2024. The telephone number for the conference call is 800-715-9871. The conference ID for the conference call is 7846129. A recording of the call will be available until November 7, 2024, by dialing 800-770-2030. The conference ID for the replay call is 7846129, followed by the # key.
About West Bancorporation, Inc. (Nasdaq: WTBA)
West Bancorporation, Inc. is headquartered in West Des Moines, Iowa. Serving customers since 1893, West Bank, a wholly-owned subsidiary of West Bancorporation, Inc., is a community bank that focuses on lending, deposit services, and trust services for small- to medium-sized businesses and consumers. West Bank has six offices in the Des Moines, Iowa metropolitan area, one office in Coralville, Iowa, and four offices in Minnesota in the cities of Rochester, Owatonna, Mankato and St. Cloud.
Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to the Company’s business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may appear throughout this report. These forward-looking statements are generally identified by the words “believes,” “expects,” “intends,” “anticipates,” “projects,” “future,” “confident,” “may,” “should,” “will,” “strategy,” “plan,” “opportunity,” “will be,” “will likely result,” “will continue” or similar references, or references to estimates, predictions or future events. Such forward-looking statements are based upon certain underlying assumptions, risks and uncertainties. Because of the possibility that the underlying assumptions are incorrect or do not materialize as expected in the future, actual results could differ materially from these forward-looking statements. Risks and uncertainties that may affect future results include: interest rate risk, including the effects of changes in interest rates; fluctuations in the values of the securities held in our investment portfolio, including as a result of changes in interest rates; competitive pressures, including from non-bank competitors such as credit unions, “fintech” companies and digital asset service providers; pricing pressures on loans and deposits; our ability to successfully manage liquidity risk; changes in credit and other risks posed by the Company’s loan portfolio, including declines in commercial or residential real estate values or changes in the allowance for credit losses dictated by new market conditions, accounting standards or regulatory requirements; the concentration of large deposits from certain clients, including those who have balances above current FDIC insurance limits; changes in local, national and international economic conditions, including the level and impact of inflation and possible recession; the effects of recent developments and events in the financial services industry, including the large-scale deposit withdrawals over a short period of time that resulted in recent bank failures; changes in legal and regulatory requirements, limitations and costs including in response to the recent bank failures; changes in customers’ acceptance of the Company’s products and services; the occurrence of fraudulent activity, breaches or failures of our or our third-party partners’ information security controls or cyber-security related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools; unexpected outcomes of existing or new litigation involving the Company; the monetary, trade and other regulatory policies of the U.S. government; acts of war or terrorism, including the ongoing Israeli-Palestinian conflict and the Russian invasion of Ukraine, widespread disease or pandemics, or other adverse external events; risks related to climate change and the negative impact it may have on our customers and their businesses; changes to U.S. tax laws, regulations and guidance; potential changes in federal policy and at regulatory agencies as a result of the upcoming 2024 presidential election; talent and labor shortages; and any other risks described in the “Risk Factors” sections of reports filed by the Company with the Securities and Exchange Commission. The Company undertakes no obligation to revise or update such forward-looking statements to reflect current or future events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
For more information contact:
Jane Funk, Executive Vice President, Treasurer and Chief Financial Officer (515) 222-5766WEST BANCORPORATION, INC. AND SUBSIDIARY Financial Information (unaudited) (in thousands) As of CONDENSED BALANCE SHEETS September 30,
2024June 30,
2024March 31,
2024December 31,
2023September 30,
2023Assets Cash and due from banks $ 34,157 $ 27,994 $ 27,071 $ 33,245 $ 18,819 Interest-bearing deposits 123,646 121,825 120,946 32,112 1,802 Securities available for sale, at fair value 597,745 588,452 605,735 623,919 609,365 Federal Home Loan Bank stock, at cost 17,195 21,065 26,181 22,957 26,691 Loans 3,021,221 2,998,774 2,980,133 2,927,535 2,849,777 Allowance for credit losses (29,419 ) (28,422 ) (28,373 ) (28,342 ) (28,147 ) Loans, net 2,991,802 2,970,352 2,951,760 2,899,193 2,821,630 Premises and equipment, net 106,771 101,965 95,880 86,399 75,675 Bank-owned life insurance 44,703 44,416 44,138 43,864 43,589 Other assets 72,547 89,046 90,981 84,069 104,329 Total assets $ 3,988,566 $ 3,965,115 $ 3,962,692 $ 3,825,758 $ 3,701,900 Liabilities and Stockholders’ Equity Deposits $ 3,278,553 $ 3,180,922 $ 3,065,030 $ 2,973,779 $ 2,755,529 Federal funds purchased and other short-term borrowings — 85,500 198,500 150,270 261,510 Other borrowings 438,814 439,998 441,183 442,367 443,552 Other liabilities 35,846 34,812 34,223 34,299 37,376 Stockholders’ equity 235,353 223,883 223,756 225,043 203,933 Total liabilities and stockholders’ equity $ 3,988,566 $ 3,965,115 $ 3,962,692 $ 3,825,758 $ 3,701,900 For the Quarter Ended AVERAGE BALANCES September 30,
2024June 30,
2024March 31,
2024December 31,
2023September 30,
2023Assets $ 3,973,824 $ 3,964,109 $ 3,812,199 $ 3,706,497 $ 3,679,541 Loans 2,991,272 2,994,492 2,949,672 2,857,594 2,813,213 Deposits 3,258,669 3,123,282 2,956,635 2,878,676 2,764,184 Stockholders’ equity 227,513 219,771 219,835 201,920 215,230 WEST BANCORPORATION, INC. AND SUBSIDIARY Financial Information (unaudited) (in thousands) As of LOANS September 30,
2024June 30,
2024March 31,
2024December 31,
2023September 30,
2023Commercial $ 512,884 $ 526,589 $ 544,293 $ 531,594 $ 529,293 Real estate: Construction, land and land development 520,516 496,864 465,247 413,477 399,253 1-4 family residential first mortgages 89,749 92,230 108,065 106,688 89,713 Home equity 17,140 15,264 14,020 14,618 12,429 Commercial 1,870,132 1,856,301 1,839,580 1,854,510 1,812,816 Consumer and other 14,261 15,234 12,844 10,930 10,123 3,024,682 3,002,482 2,984,049 2,931,817 2,853,627 Net unamortized fees and costs (3,461 ) (3,708 ) (3,916 ) (4,282 ) (3,850 ) Total loans $ 3,021,221 $ 2,998,774 $ 2,980,133 $ 2,927,535 $ 2,849,777 Less: allowance for credit losses (29,419 ) (28,422 ) (28,373 ) (28,342 ) (28,147 ) Net loans $ 2,991,802 $ 2,970,352 $ 2,951,760 $ 2,899,193 $ 2,821,630 CREDIT QUALITY Pass $ 3,016,493 $ 2,994,310 $ 2,983,618 $ 2,931,377 $ 2,853,100 Watch 7,956 7,651 142 144 184 Substandard 233 521 289 296 343 Doubtful — — — — — Total loans $ 3,024,682 $ 3,002,482 $ 2,984,049 $ 2,931,817 $ 2,853,627 DEPOSITS Noninterest-bearing demand $ 525,332 $ 530,441 $ 521,377 $ 548,726 $ 551,688 Interest-bearing demand 438,402 443,658 449,946 481,207 417,802 Savings and money market - non-brokered 1,481,840 1,483,264 1,315,698 1,315,741 1,249,309 Money market - brokered 123,780 97,259 119,840 124,335 99,282 Total nonmaturity deposits 2,569,354 2,554,622 2,406,861 2,470,009 2,318,081 Time - non-brokered 407,109 353,269 381,646 322,694 299,683 Time - brokered 302,090 273,031 276,523 181,076 137,765 Total time deposits 709,199 626,300 658,169 503,770 437,448 Total deposits $ 3,278,553 $ 3,180,922 $ 3,065,030 $ 2,973,779 $ 2,755,529 BORROWINGS Federal funds purchased and other short-term borrowings $ — $ 85,500 $ 198,500 $ 150,270 $ 261,510 Subordinated notes, net 79,828 79,762 79,697 79,631 79,566 Federal Home Loan Bank advances 315,000 315,000 315,000 315,000 315,000 Long-term debt 43,986 45,236 46,486 47,736 48,986 Total borrowings $ 438,814 $ 525,498 $ 639,683 $ 592,637 $ 705,062 STOCKHOLDERS’ EQUITY Preferred stock $ — $ — $ — $ — $ — Common stock 3,000 3,000 3,000 3,000 3,000 Additional paid-in capital 34,960 34,322 33,685 34,197 33,487 Retained earnings 275,724 273,981 272,997 271,369 271,025 Accumulated other comprehensive loss (78,331 ) (87,420 ) (85,926 ) (83,523 ) (103,579 ) Total stockholders’ equity $ 235,353 $ 223,883 $ 223,756 $ 225,043 $ 203,933 WEST BANCORPORATION, INC. AND SUBSIDIARY Financial Information (unaudited) (in thousands) For the Quarter Ended CONSOLIDATED STATEMENTS OF INCOME September 30,
2024June 30,
2024March 31,
2024December 31,
2023September 30,
2023Interest income: Loans, including fees $ 42,504 $ 41,700 $ 40,196 $ 38,208 $ 36,756 Securities: Taxable 3,261 3,394 3,416 3,521 3,427 Tax-exempt 806 808 810 869 880 Interest-bearing deposits 2,041 1,666 148 85 29 Total interest income 48,612 47,568 44,570 42,683 41,092 Interest expense: Deposits 26,076 23,943 21,559 20,024 17,156 Federal funds purchased and other short-term borrowings 115 1,950 2,183 2,024 3,165 Subordinated notes 1,112 1,105 1,108 1,114 1,113 Federal Home Loan Bank advances 2,748 2,718 2,325 2,482 2,329 Long-term debt 601 622 645 678 695 Total interest expense 30,652 30,338 27,820 26,322 24,458 Net interest income 17,960 17,230 16,750 16,361 16,634 Credit loss expense — — — 500 200 Net interest income after credit loss expense 17,960 17,230 16,750 15,861 16,434 Noninterest income: Service charges on deposit accounts 459 462 460 476 463 Debit card usage fees 500 490 458 488 495 Trust services 828 794 776 782 831 Increase in cash value of bank-owned life insurance 287 278 274 275 262 Loan swap fees — — — — 431 Realized securities losses, net — — — (431 ) — Other income 285 322 331 308 340 Total noninterest income 2,359 2,346 2,299 1,898 2,822 Noninterest expense: Salaries and employee benefits 6,823 7,169 6,489 6,468 6,696 Occupancy and equipment 1,926 1,852 1,447 1,499 1,359 Data processing 771 754 714 723 703 Technology and software 722 731 700 676 573 FDIC insurance 711 631 519 475 439 Professional fees 239 244 257 235 254 Director fees 223 236 199 240 196 Other expenses 1,477 1,577 1,543 1,845 1,685 Total noninterest expense 12,892 13,194 11,868 12,161 11,905 Income before income taxes 7,427 6,382 7,181 5,598 7,351 Income taxes 1,475 1,190 1,372 1,073 1,445 Net income $ 5,952 $ 5,192 $ 5,809 $ 4,525 $ 5,906 Basic earnings per common share $ 0.35 $ 0.31 $ 0.35 $ 0.27 $ 0.35 Diluted earnings per common share $ 0.35 $ 0.31 $ 0.35 $ 0.27 $ 0.35 WEST BANCORPORATION, INC. AND SUBSIDIARY Financial Information (unaudited) (in thousands) For the Nine Months Ended CONSOLIDATED STATEMENTS OF INCOME September 30, 2024 September 30, 2023 Interest income: Loans, including fees $ 124,400 $ 104,715 Securities: Taxable 10,071 10,175 Tax-exempt 2,424 2,648 Interest-bearing deposits 3,855 84 Total interest income 140,750 117,622 Interest expense: Deposits 71,578 46,772 Federal funds purchased and other short-term borrowings 4,248 7,508 Subordinated notes 3,325 3,328 Federal Home Loan Bank advances 7,791 5,212 Long-term debt 1,868 2,132 Total interest expense 88,810 64,952 Net interest income 51,940 52,670 Credit loss expense — 200 Net interest income after credit loss expense 51,940 52,470 Noninterest income: Service charges on deposit accounts 1,381 1,383 Debit card usage fees 1,448 1,492 Trust services 2,398 2,286 Increase in cash value of bank-owned life insurance 839 769 Loan swap fees — 431 Gain from bank-owned life insurance — 691 Other income 938 1,116 Total noninterest income 7,004 8,168 Noninterest expense: Salaries and employee benefits 20,481 20,592 Occupancy and equipment 5,225 4,008 Data processing 2,239 2,067 Technology and software 2,153 1,665 FDIC insurance 1,861 1,275 Professional fees 740 791 Director fees 658 652 Other expenses 4,597 5,400 Total noninterest expense 37,954 36,450 Income before income taxes 20,990 24,188 Income taxes 4,037 4,576 Net income $ 16,953 $ 19,612 Basic earnings per common share $ 1.01 $ 1.17 Diluted earnings per common share $ 1.00 $ 1.17 WEST BANCORPORATION, INC. AND SUBSIDIARY Financial Information (unaudited) As of and for the Quarter Ended For the Nine Months Ended COMMON SHARE DATA September 30,
2024June 30,
2024March 31,
2024December 31,
2023September 30,
2023September 30,
2024September 30,
2023Earnings per common share (basic) $ 0.35 $ 0.31 $ 0.35 $ 0.27 $ 0.35 $ 1.01 $ 1.17 Earnings per common share (diluted) 0.35 0.31 0.35 0.27 0.35 1.00 1.17 Dividends per common share 0.25 0.25 0.25 0.25 0.25 0.75 0.75 Book value per common share(1) 13.98 13.30 13.31 13.46 12.19 Closing stock price 19.01 17.90 17.83 21.20 16.31 Market price/book value(2) 135.98 % 134.59 % 133.96 % 157.50 % 133.80 % Price earnings ratio(3) 13.65 14.36 12.77 19.79 11.75 Annualized dividend yield(4) 5.26 % 5.59 % 5.61 % 4.72 % 6.13 % REGULATORY CAPITAL RATIOS Consolidated: Total risk-based capital ratio 11.95 % 11.85 % 11.78 % 11.88 % 11.96 % Tier 1 risk-based capital ratio 9.39 9.30 9.23 9.30 9.37 Tier 1 leverage capital ratio 8.15 8.08 8.36 8.50 8.58 Common equity tier 1 ratio 8.83 8.74 8.67 8.74 8.80 West Bank: Total risk-based capital ratio 12.73 % 12.66 % 12.63 % 12.76 % 12.89 % Tier 1 risk-based capital ratio 11.86 11.79 11.76 11.89 12.01 Tier 1 leverage capital ratio 10.29 10.25 10.65 10.86 11.00 Common equity tier 1 ratio 11.86 11.79 11.76 11.89 12.01 KEY PERFORMANCE RATIOS AND OTHER METRICS Return on average assets(5) 0.60 % 0.53 % 0.61 % 0.48 % 0.64 % 0.59 % 0.72 % Return on average equity(6) 10.41 9.50 10.63 8.89 10.89 10.18 12.22 Net interest margin(7)(13) 1.91 1.86 1.88 1.87 1.91 1.88 2.05 Yield on interest-earning assets(8)(13) 5.16 5.13 4.99 4.87 4.70 5.10 4.56 Cost of interest-bearing liabilities 3.84 3.83 3.70 3.60 3.38 3.79 3.09 Efficiency ratio(9)(13) 63.28 67.14 62.04 64.66 60.83 64.16 59.52 Nonperforming assets to total assets(10) 0.01 0.01 0.01 0.01 0.01 ACL ratio(11) 0.97 0.95 0.95 0.97 0.99 Loans/total assets 75.75 75.63 75.20 76.52 76.98 Loans/total deposits 92.15 94.27 97.23 98.44 103.42 Tangible common equity ratio(12) 5.90 5.65 5.65 5.88 5.51 (1) Includes accumulated other comprehensive loss. (2) Closing stock price divided by book value per common share. (3) Closing stock price divided by annualized earnings per common share (basic). (4) Annualized dividend divided by period end closing stock price. (5) Annualized net income divided by average assets. (6) Annualized net income divided by average stockholders’ equity. (7) Annualized tax-equivalent net interest income divided by average interest-earning assets. (8) Annualized tax-equivalent interest income on interest-earning assets divided by average interest-earning assets. (9) Noninterest expense (excluding other real estate owned expense and write-down of premises) divided by noninterest income (excluding net securities gains/losses and gains/losses on disposition of premises and equipment) plus tax-equivalent net interest income. (10) Total nonperforming assets divided by total assets. (11) Allowance for credit losses on loans divided by total loans. (12) Common equity less intangible assets (none held) divided by tangible assets. (13) A non-GAAP measure. NON-GAAP FINANCIAL MEASURES
This report contains references to financial measures that are not defined in GAAP. Such non-GAAP financial measures include the Company’s presentation of net interest income and net interest margin on a fully taxable equivalent (FTE) basis and the presentation of the efficiency ratio on an adjusted and FTE basis, excluding certain income and expenses. Management believes these non-GAAP financial measures provide useful information to both management and investors to analyze and evaluate the Company’s financial performance. These measures are considered standard measures of comparison within the banking industry. Additionally, management believes providing measures on a FTE basis enhances the comparability of income arising from taxable and nontaxable sources. Limitations associated with non-GAAP financial measures include the risks that persons might disagree as to the appropriateness of items included in these measures and that different companies might calculate these measures differently. These non-GAAP disclosures should not be considered an alternative to the Company’s GAAP results. The following table reconciles the non-GAAP financial measures of net interest income and net interest margin on a fully taxable equivalent basis and efficiency ratio on an adjusted and FTE basis.
(in thousands) For the Quarter Ended For the Nine Months Ended September 30,
2024June 30,
2024March 31,
2024December 31,
2023September 30,
2023September 30,
2024September 30,
2023Reconciliation of net interest income and net interest margin on a FTE basis to GAAP: Net interest income (GAAP) $ 17,960 $ 17,230 $ 16,750 $ 16,361 $ 16,634 $ 51,940 $ 52,670 Tax-equivalent adjustment (1) 29 55 82 95 113 166 396 Net interest income on a FTE basis (non-GAAP) 17,989 17,285 16,832 16,456 16,747 52,106 53,066 Average interest-earning assets 3,749,688 3,731,674 3,595,954 3,487,799 3,478,053 3,692,647 3,458,606 Net interest margin on a FTE basis (non-GAAP) 1.91 % 1.86 % 1.88 % 1.87 % 1.91 % 1.88 % 2.05 % Reconciliation of efficiency ratio on an adjusted and FTE basis to GAAP: Net interest income on a FTE basis (non-GAAP) $ 17,989 $ 17,285 $ 16,832 $ 16,456 $ 16,747 $ 52,106 $ 53,066 Noninterest income 2,359 2,346 2,299 1,898 2,822 7,004 8,168 Adjustment for realized securities losses, net — — — 431 — — — Adjustment for losses on disposal of premises and equipment, net 26 21 — 24 3 47 5 Adjusted income 20,374 19,652 19,131 18,809 19,572 59,157 61,239 Noninterest expense 12,892 13,194 11,868 12,161 11,905 37,954 36,450 Efficiency ratio on an adjusted and FTE basis (non-GAAP) (2) 63.28 % 67.14 % 62.04 % 64.66 % 60.83 % 64.16 % 59.52 % (1) Computed on a tax-equivalent basis using a federal income tax rate of 21 percent, adjusted to reflect the effect of the nondeductible interest expense associated with owning tax-exempt securities and loans. Management believes the presentation of this non-GAAP measure provides supplemental useful information for proper understanding of the financial results, as it enhances the comparability of income arising from taxable and nontaxable sources. (2) The efficiency ratio expresses noninterest expense as a percent of fully taxable equivalent net interest income and noninterest income, excluding specific noninterest income and expenses. Management believes the presentation of this non-GAAP measure provides supplemental useful information for proper understanding of the Company's financial performance. It is a standard measure of comparison within the banking industry. A lower ratio is more desirable. 
- Loans increased $22.4 million in the third quarter of 2024, or 3.0 percent annualized. The increase is primarily due to the funding of previously committed construction loans.