Westamerica Bancorporation ( NASDAQ: WABC), parent company of Westamerica Bank, today reported third quarter 2010 net income applicable to common equity of $23.7 million, or $0.81 diluted earnings per share (“EPS”), compared to $23.6 million, or $0.80 EPS in the prior quarter and $23.8 million, or $0.81 EPS in the third quarter 2009. Third quarter 2010 net income applicable to common equity represents an 18 percent annualized return on average common equity.
“Westamerica’s net interest margin was 5.54 percent in the third quarter 2010, supported by a very low 0.30 percent cost of funding. Our focus on growing checking and savings deposits helps maintain a lower funding cost relative to our peers. We also focus on delivering more of our revenue to the bottom line by operating in the most efficient manner possible. Our operating expenses declined $600 thousand from the prior quarter,” said Chairman, President and CEO David Payne. “The credit quality of legacy Westamerica loans remained stable during the quarter, while FDIC-indemnified nonperforming loans declined $4 million to $56 million at September 30, 2010. Common shareholders’ equity grew to $541 million at September 30, 2010 resulting in a total regulatory capital ratio of 14.9 percent. We were pleased to have deployed some of our excess capital during the quarter acquiring assets and assuming liabilities of the former Sonoma Valley Bank,” Payne added.
Third quarter 2010 operating results include net interest and fee income from acquired assets and assumed liabilities of the former Sonoma Valley Bank, which Westamerica purchased and assumed from the Federal Deposit Insurance Corporation (FDIC) on August 20, 2010. During the third quarter 2010, Westamerica incurred noninterest expenses of approximately $325 thousand due to duplicative operations and recorded a $178 thousand acquisition gain. Management anticipates integration activities will be completed in the first quarter 2011.