West Bancorporation, Inc. Announces Net Income for the Third Quarter Of 2022, Declares Quarterly Dividend

West Bancorporation

WEST DES MOINES, Iowa, Oct. 27, 2022 (GLOBE NEWSWIRE) -- West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent company of West Bank, today reported third quarter 2022 net income of $11.6 million, or $0.69 per diluted common share, compared to third quarter 2021 net income of $12.7 million, or $0.76 per diluted common share. For the first nine months of 2022, net income was $37.5 million, or $2.23 per diluted common share, compared to $37.7 million, or $2.25 per diluted common share, for the first nine months of 2021. On October 26, 2022, the Company’s Board of Directors declared a regular quarterly dividend of $0.25 per common share. The dividend is payable on November 23, 2022, to stockholders of record on November 9, 2022.

David Nelson, President and Chief Executive Officer of the Company, commented, “Our company had another strong quarter. Our credit quality remains pristine and we continue to see opportunities for high quality loan growth, although at a slower pace than we experienced the last few quarters. We remain diligent in monitoring and managing our credit quality as we anticipate increasing economic challenges as the Federal Reserve aggressively seeks to reduce inflation by raising interest rates. Our bankers are working hard every day to assist our customers and communities in navigating the current economic and interest rate uncertainties. For the fifth consecutive quarter end, we had no loans greater than 30 days past due.”

David Nelson added, “While the yield on our loan portfolio is increasing, changes in liquidity and competitive deposit pricing, resulting from volatility and uncertainty in the interest rate environment, has put upward pressure on our cost of funds. Our capital position is strong and we remain focused on our highly successful core business model to continue building shareholder value.”

Third Quarter 2022 Financial Highlights

	Return on Average Equity	21.01	%
	Return on Average Assets	1.32	%
	Efficiency ratio (a non-GAAP measure)	43.16	%
	Nonperforming assets to total assets	0.01	%

Third Quarter 2022 Compared to Second Quarter 2022 Overview

• No provision for loan losses was recorded in the third quarter of 2022, compared to a negative provision for loan losses of $1.75 million in the second quarter of 2022. The negative provision in the second quarter of 2022 was due primarily to the reversal of a specific reserve on an impaired loan. The impaired loan, which had a specific reserve of $2.5 million, was settled in the second quarter of 2022 resulting in a charge-off of $451 thousand.
  

• The allowance for loan losses to total loans was 0.97 percent at September 30, 2022, compared to 0.99 percent at June 30, 2022. There were no loans greater than 30 days past due at September 30, 2022, for the fifth consecutive quarter. Nonaccrual loans at September 30, 2022 consisted of one loan with a balance of $329 thousand.
  

• Loan swap fees of $835 thousand were recorded in the third quarter of 2022, compared to none in the second quarter of 2022.
  

• Loans increased $41.0 million in the third quarter of 2022, or 6.3 percent annualized.
  

• Deposits decreased $19.6 million in the third quarter of 2022. Included in deposits were brokered deposits totaling $258.1 million at September 30, 2022, compared to $196.5 million at June 30, 2022.
  

• The efficiency ratio (a non-GAAP measure) was 43.16 percent for the third quarter of 2022, compared to 41.96 percent for the second quarter of 2022.
  

• Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 2.78 percent for the third quarter of 2022, compared to 2.93 percent for the second quarter of 2022. Net interest income for the third quarter of 2022 was $23.0 million, compared to $24.2 million for the second quarter of 2022. The rising cost of deposits and borrowed funds and the change in mix of liabilities has increased interest expense faster than the increase in the interest income from loan repricing and loan growth.
  

• The tangible common equity ratio was 5.65 percent at September 30, 2022, a decrease of 43 basis points compared to 6.22 percent at June 30, 2022 due to continued decline in the market value of the securities portfolio resulting from rising interest rates, which negatively impacts accumulated other comprehensive income.

Third Quarter 2022 Compared to Third Quarter 2021 Overview

• Loans increased $254.6 million at September 30, 2022, or 10.8 percent, compared to September 30, 2021.
  

• Deposits increased $85.9 million at September 30, 2022, compared to September 30, 2021. Included in deposits were brokered deposits totaling $258.1 million at September 30, 2022, compared to $103.0 million at September 30, 2021.
  

• Borrowed funds increased to $460.3 million at September 30, 2022, compared to $202.5 million at September 30, 2021. The increase included $58.9 million in subordinated notes that were issued in June 2022, $33.8 million in long-term debt that was issued in December 2021 and $165.1 million in federal funds purchased.
  

• The efficiency ratio (a non-GAAP measure) was 43.16 percent for the third quarter of 2022, compared to 39.41 percent for the third quarter of 2021. Salaries and benefits were higher in the third quarter of 2022, compared to the third quarter of 2021, due to a higher number of full-time equivalent employees and annual compensation adjustments.
  

• Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 2.78 percent for the third quarter of 2022, compared to 3.06 percent for the third quarter of 2021. Net interest income for the third quarter of 2022 was $23.0 million, compared to $24.5 million for the third quarter of 2021. Net interest income in the third quarter of 2021 included $1.6 million of PPP loan interest income, compared to $101 thousand in the third quarter of 2022. In 2022, the rising cost of deposits and borrowed funds and the change in mix of liabilities has increased interest expense faster than the increase in the interest income from loan repricing and loan growth.
  

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 27, 2022. The telephone number for the conference call is 844-200-6205. The access code for the conference call is 014998. A recording of the call will be available until November 10, 2022, by dialing 866-813-9403. The replay access code is 419470.

About West Bancorporation, Inc. (Nasdaq: WTBA)

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

Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to the Company’s business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may appear throughout this report. These forward-looking statements are generally identified by the words “believes,” “expects,” “intends,” “anticipates,” “projects,” “future,” “confident,” “may,” “should,” “will,” “strategy,” “plan,” “opportunity,” “will be,” “will likely result,” “will continue” or similar references, or references to estimates, predictions or future events. Such forward-looking statements are based upon certain underlying assumptions, risks and uncertainties. Because of the possibility that the underlying assumptions are incorrect or do not materialize as expected in the future, actual results could differ materially from these forward-looking statements.  Risks and uncertainties that may affect future results include: interest rate risk, including the effects of recent rate increases by the Federal Reserve; fluctuations in the values of the securities held in our investment portfolio, including as a result of rising interest rates; competitive pressures, including from non-bank competitors such as “fintech” companies; pricing pressures on loans and deposits; 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 loan losses dictated by new market conditions, accounting standards (including as a result of the future implementation of the current expected credit loss (CECL) accounting standard) or regulatory requirements; changes in local, national and international economic conditions, including rising rates of inflation; changes in legal and regulatory requirements, limitations and costs; changes in customers’ acceptance of the Company’s products and services; cyber-attacks; 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 Russian invasion of Ukraine, widespread disease or pandemics, such as the COVID-19 pandemic, or other adverse external events; developments and uncertainty related to the future use and availability of some reference rates, such as the London Interbank Offered Rate, as well as other alternative reference rates; changes to U.S. tax laws, regulations and guidance; talent and labor shortages; the new 1% excise tax on stock buybacks by publicly traded companies; and any other risks described in the “Risk Factors” sections of reports filed by the Company with the Securities and Exchange Commission. The Company undertakes no obligation to revise or update such forward-looking statements to reflect current or future events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
		As of
CONDENSED BALANCE SHEETS		September 30, 2022				June 30, 2022				March 31, 2022				December 31, 2021				September 30, 2021
Assets
Cash and due from banks		$	58,342			$	26,174			$	21,896			$	17,555			$	30,922
Federal funds sold			1,049				766				122,359				175,270				1,547
Securities available for sale, at fair value			671,752				731,970				797,912				758,822				763,397
Federal Home Loan Bank stock, at cost			18,350				15,532				10,269				9,965				11,544
Loans			2,614,145				2,573,129				2,485,366				2,456,196				2,359,567
Allowance for loan losses			(25,418	)			(25,434	)			(27,623	)			(28,364	)			(28,098	)
Loans, net			2,588,727				2,547,695				2,457,743				2,427,832				2,331,469
Premises and equipment, net			44,592				41,807				40,898				34,568				33,287
Bank-owned life insurance			44,318				44,072				43,836				43,609				43,376
Other assets			90,387				66,775				52,156				32,580				34,158
Total assets		$	3,517,517			$	3,474,791			$	3,547,069			$	3,500,201			$	3,249,700
Liabilities and Stockholders’ Equity
Deposits		$	2,822,847			$	2,842,451			$	3,091,252			$	3,016,005			$	2,736,923
Federal funds purchased			204,500				133,000				—				2,880				39,380
Other borrowings			255,789				255,751				196,954				196,986				163,116
Other liabilities			35,617				27,400				22,383				24,002				57,905
Stockholders’ equity			198,764				216,189				236,480				260,328				252,376
Total liabilities and stockholders’ equity		$	3,517,517			$	3,474,791			$	3,547,069			$	3,500,201			$	3,249,700
		For the quarter ended
AVERAGE BALANCES		September 30, 2022				June 30, 2022				March 31, 2022				December 31, 2021				September 30, 2021
Assets		$	3,475,894			$	3,503,686			$	3,544,564			$	3,421,020			$	3,325,522
Loans			2,579,862				2,537,152				2,449,521				2,379,872				2,337,355
Deposits			2,864,648				3,002,535				3,067,019				2,964,585				2,874,005
Stockholders’ equity			219,065				222,731				255,130				255,224				251,770

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
		As of
ANALYSIS OF LOAN PORTFOLIO		September 30, 2022				June 30, 2022				March 31, 2022				December 31, 2021				September 30, 2021
Loan mix:
Commercial		$	526,336			$	475,704			$	466,874			$	492,815			$	491,344
Real estate:
Construction, land and land development			341,549				390,137				388,424				359,258				325,655
1-4 family residential first mortgages			69,991				69,829				65,978				66,216				63,881
Home equity			10,271				8,564				9,213				8,422				8,993
Commercial			1,661,907				1,627,150				1,555,001				1,530,218				1,471,170
Consumer and other			7,884				5,912				4,068				3,797				3,698
			2,617,938				2,577,296				2,489,558				2,460,726				2,364,741
Net unamortized fees and costs			(3,793	)			(4,167	)			(4,192	)			(4,530	)			(5,174	)
Total loans		$	2,614,145			$	2,573,129			$	2,485,366			$	2,456,196			$	2,359,567
Less allowance for loan losses			(25,418	)			(25,434	)			(27,623	)			(28,364	)			(28,098	)
Net loans		$	2,588,727			$	2,547,695			$	2,457,743			$	2,427,832			$	2,331,469
ANALYSIS OF DEPOSITS
Deposit mix:
Noninterest-bearing demand		$	712,722			$	690,335			$	710,697			$	720,136			$	713,076
Interest-bearing demand			469,257				472,919				554,235				548,242				458,165
Savings and money market			1,252,694				1,360,020				1,632,690				1,550,636				1,379,321
Time			388,174				319,177				193,630				196,991				186,361
Total deposits		$	2,822,847			$	2,842,451			$	3,091,252			$	3,016,005			$	2,736,923
ANALYSIS OF BORROWINGS
Borrowings mix:
Federal funds purchased		$	204,500			$	133,000			$	—			$	2,880			$	39,380
Subordinated notes, net			79,303				79,265				20,468				20,465				20,462
Federal Home Loan Bank advances			125,000				125,000				125,000				125,000				125,000
Long-term debt			51,486				51,486				51,486				51,521				17,654
Total borrowings		$	460,289			$	388,751			$	196,954			$	199,866			$	202,496
STOCKHOLDERS’ EQUITY
Preferred stock		$	—			$	—			$	—			$	—			$	—
Common stock			3,000				3,000				3,000				3,000				3,000
Additional paid-in capital			31,152				30,283				29,421				30,183				29,536
Retained earnings			262,776				255,334				246,827				237,782				229,845
Accumulated other comprehensive loss			(98,164	)			(72,428	)			(42,768	)			(10,637	)			(10,005	)
Total Stockholders’ Equity		$	198,764			$	216,189			$	236,480			$	260,328			$	252,376

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
		For the Quarter Ended
CONSOLIDATED STATEMENTS OF INCOME		September 30, 2022			June 30, 2022				March 31, 2022				December 31, 2021			September 30, 2021
Interest income:
Loans, including fees		$	28,102		$	24,848			$	23,286			$	24,179		$	24,229
Securities:
Taxable			3,147			3,090				2,889				2,590			2,412
Tax-exempt			890			892				858				829			762
Federal funds sold			30			67				82				66			82
Total interest income			32,169			28,897				27,115				27,664			27,485
Interest expense:
Deposits			6,289			3,146				2,151				2,055			2,021
Federal funds purchased			655			157				—				1			2
Subordinated notes			1,106			394				248				254			254
Federal Home Loan Bank advances			649			635				630				656			656
Long-term debt			466			326				258				96			66
Total interest expense			9,165			4,658				3,287				3,062			2,999
Net interest income			23,004			24,239				23,828				24,602			24,486
Provision for loan losses			—			(1,750	)			(750	)			—			—
Net interest income after provision for loan losses			23,004			25,989				24,578				24,602			24,486
Noninterest income:
Service charges on deposit accounts			553			585				580				603			589
Debit card usage fees			498			507				472				505			490
Trust services			780			622				629				633			695
Increase in cash value of bank-owned life insurance			246			236				227				233			230
Loan swap fees			835			—				—				24			—
Realized securities gains, net			—			—				—				—			11
Other income			364			328				481				350			386
Total noninterest income			3,276			2,278				2,389				2,348			2,401
Noninterest expense:
Salaries and employee benefits			6,578			6,410				6,298				5,928			6,018
Occupancy			1,315			1,242				1,086				1,532			1,203
Data processing			644			656				624				630			616
FDIC insurance			127			289				337				460			528
Professional fees			250			202				217				183			212
Director fees			209			222				168				184			176
Other expenses			2,335			2,245				1,932				2,954			1,959
Total noninterest expense			11,458			11,266				10,662				11,871			10,712
Income before income taxes			14,822			17,001				16,305				15,079			16,175
Income taxes			3,220			4,334				3,121				3,169			3,469
Net income		$	11,602		$	12,667			$	13,184			$	11,910		$	12,706
Basic earnings per common share		$	0.70		$	0.76			$	0.80			$	0.72		$	0.77
Diluted earnings per common share		$	0.69		$	0.75			$	0.78			$	0.71		$	0.76

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
		For the Nine Months Ended
CONSOLIDATED STATEMENTS OF INCOME		September 30, 2022				September 30, 2021
Interest income:
Loans, including fees		$	76,236			$	71,406
Securities:
Taxable			9,126				5,952
Tax-exempt			2,640				2,032
Federal funds sold			179				226
Total interest income			88,181				79,616
Interest expense:
Deposits			11,586				5,893
Federal funds purchased			812				4
Subordinated notes			1,748				754
Federal Home Loan Bank advances			1,914				2,288
Long-term debt			1,050				220
Total interest expense			17,110				9,159
Net interest income			71,071				70,457
Provision for loan losses			(2,500	)			(1,500	)
Net interest income after provision for loan losses			73,571				71,957
Noninterest income:
Service charges on deposit accounts			1,718				1,749
Debit card usage fees			1,477				1,443
Trust services			2,031				2,038
Increase in cash value of bank-owned life insurance			709				690
Loan swap fees			835				42
Realized securities gains, net			—				51
Other income			1,173				1,368
Total noninterest income			7,943				7,381
Noninterest expense:
Salaries and employee benefits			19,286				17,298
Occupancy			3,643				3,630
Data processing			1,924				1,835
FDIC insurance			753				1,358
Professional fees			669				763
Director fees			599				581
Other expenses			6,512				6,044
Total noninterest expense			33,386				31,509
Income before income taxes			48,128				47,829
Income taxes			10,675				10,132
Net income		$	37,453			$	37,697
Basic earnings per common share		$	2.25			$	2.28
Diluted earnings per common share		$	2.23			$	2.25

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, 2022				June 30, 2022				March 31, 2022				December 31, 2021				September 30, 2021				September 30, 2022				September 30, 2021
Earnings per common share (basic)		$	0.70			$	0.76			$	0.80			$	0.72			$	0.77			$	2.25			$	2.28
Earnings per common share (diluted)			0.69				0.75				0.78				0.71				0.76				2.23				2.25
Dividends per common share			0.25				0.25				0.25				0.24				0.24				0.75				0.70
Book value per common share(1)			11.94				12.99				14.22				15.73				15.24
Closing stock price			20.81				24.34				27.21				31.07				30.03
Market price/book value(2)			174.29	%			187.37	%			191.35	%			197.52	%			197.05	%
Price earnings ratio(3)			7.49	%			7.98	%			8.39	%			10.88	%			9.83	%
Annualized dividend yield(4)			4.81	%			4.11	%			3.68	%			3.89	%			3.20	%
REGULATORY CAPITAL RATIOS
Consolidated:
Total risk-based capital ratio			12.34	%			12.53	%			10.72	%			10.89	%			11.12	%
Tier 1 risk-based capital ratio			9.72				9.81				9.81				9.92				10.11
Tier 1 leverage capital ratio			8.85				8.59				8.39				8.49				8.51
Common equity tier 1 ratio			9.11				9.17				9.16				9.24				9.40
West Bank:
Total risk-based capital ratio			13.38	%			13.62	%			11.88	%			12.10	%			11.18	%
Tier 1 risk-based capital ratio			12.60				12.81				10.98				11.13				10.17
Tier 1 leverage capital ratio			11.47				11.22				9.39				9.53				8.56
Common equity tier 1 ratio			12.60				12.81				10.98				11.13				10.17
KEY PERFORMANCE RATIOS AND OTHER METRICS
Return on average assets(5)			1.32	%			1.45	%			1.51	%			1.38	%			1.52	%			1.43	%			1.56	%
Return on average equity(6)			21.01				22.81				20.96				18.51				20.02				21.57				20.98
Net interest margin(7)(13)			2.78				2.93				2.85				3.00				3.06				2.85				3.07
Yield on interest-earning assets(8)			3.87				3.49				3.24				3.36				3.43				3.53				3.47
Cost of interest-bearing liabilities			1.45				0.73				0.52				0.50				0.51				0.90				0.55
Efficiency ratio(9)(13)			43.16				41.96				40.14				43.32				39.41				41.75				40.08
Non-performing assets to total assets(10)			0.01				0.01				0.25				0.26				0.28
ALLL ratio(11)			0.97				0.99				1.11				1.15				1.19
Loans/total assets			74.32				74.05				70.07				70.17				72.61
Loans/total deposits			92.61				90.53				80.40				81.44				86.21
Tangible common equity ratio(12)			5.65				6.22				6.67				7.44				7.77

(1) Includes accumulated other comprehensive income (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 loan losses divided by total loans.        
(12) Common equity less intangible assets (none held) divided by tangible assets.
(13) A non-GAAP measure.

NON-GAAP FINANCIAL MEASURES

This report contains references to financial measures that are not defined in GAAP. Such non-GAAP financial measures include the Company’s presentation of net interest income and net interest margin on a fully taxable equivalent (FTE) basis and the presentation of the efficiency ratio on an adjusted and FTE basis, excluding certain income and expenses. Management believes these non-GAAP financial measures provide useful information to both management and investors to analyze and evaluate the Company’s financial performance. These measures are considered standard measures of comparison within the banking industry. Additionally, management believes providing measures on a FTE basis enhances the comparability of income arising from taxable and nontaxable sources. Limitations associated with non-GAAP financial measures include the risks that persons might disagree as to the appropriateness of items included in these measures and that different companies might calculate these measures differently. These non-GAAP disclosures should not be considered an alternative to the Company’s GAAP results. The following table reconciles the non-GAAP financial measures of net interest income and net interest margin on a fully taxable equivalent basis and efficiency ratio on an adjusted and FTE basis.

(in thousands)		As of and for the Quarter Ended																				For the Nine Months Ended
		September 30, 2022				June 30, 2022				March 31, 2022				December 31, 2021				September 30, 2021				September 30, 2022				September 30, 2021
Reconciliation of net interest income and net interest margin on a FTE basis to GAAP:
Net interest income (GAAP)		$	23,004			$	24,239			$	23,828			$	24,602			$	24,486			$	71,071			$	70,457
Tax-equivalent adjustment(1)			270				326				329				397				306				925				805
Net interest income on a FTE basis (non-GAAP)			23,274				24,565				24,157				24,999				24,792				71,996				71,262
Average interest-earning assets			3,322,522				3,362,313				3,432,114				3,309,625				3,212,283				3,371,915				3,099,066
Net interest margin on a FTE basis (non-GAAP)			2.78	%			2.93	%			2.85	%			3.00	%			3.06	%			2.85	%			3.07	%
Reconciliation of efficiency ratio on an adjusted and FTE basis to GAAP:
Net interest income on a FTE basis (non-GAAP)		$	23,274			$	24,565			$	24,157			$	24,999			$	24,792			$	71,996			$	71,262
Noninterest income			3,276				2,278				2,389				2,348				2,401				7,943				7,381
Adjustment for realized securities gains, net			—				—				—				—				(11	)			—				(51	)
Adjustment for losses on disposal of premises and equipment, net			—				9				18				55				—				27				29
Adjusted income			26,550				26,852				26,564				27,402				27,182				79,966				78,621
Noninterest expense			11,458				11,266				10,662				11,871				10,712				33,386				31,509
Efficiency ratio on an adjusted and FTE basis (non-GAAP)(2)			43.16	%			41.96	%			40.14	%			43.32	%			39.41	%			41.75	%			40.08	%

(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