Westamerica Bancorporation Reports Second Quarter 2016 Financial Results

SAN RAFAEL, Calif., July 21, 2016 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq:WABC), parent company of Westamerica Bank, generated net income for the second quarter 2016 of $14.5 million and diluted earnings per common share ("EPS") of $0.57, compared to net income of $14.2 million and EPS of $0.56 for the prior quarter, and net income of $14.8 million and EPS of $0.58 for the second quarter 2015.

"Westamerica's revenue stream was stable from the first quarter 2016 to the second quarter 2016, with fully-taxable equivalent net interest income and noninterest income totaling $48.2 million for both quarters. Credit quality improved with nonperforming assets declining to $18.1 million at June 30, 2016 from $26.4 million at March 31, 2016. Noninterest expenses declined $630 thousand from the first quarter 2016 to the second quarter 2016," said Chairman, President and CEO David Payne. "With stable revenues and reduced expenses, Westamerica delivered higher net income for our shareholders, generating an annualized return on shareholders' common equity of 11 percent for the second quarter 2016. Westamerica paid its shareholders a $0.39 per share dividend in the second quarter," concluded Payne.

The annualized net interest margin on a fully taxable equivalent basis was 3.27 percent for the second quarter 2016, compared to 3.34 percent for the prior quarter, and 3.37 percent for the second quarter 2015. Net interest income on a fully taxable equivalent basis was $36.5 million for the second quarter 2016, compared to $36.4 million for the prior quarter, and $37.4 million for the second quarter 2015. The Company's loan portfolio has declined from the second quarter 2015 through the second quarter 2016; Management has been avoiding long-dated, low-yielding loans given historically low interest rates. Management has also maintained conservative loan underwriting, terms and conditions. During this period, the investment portfolio has grown. The changing composition of interest earning assets and low market interest rates has pressured the net interest margin. The funding cost of deposits and other interest-bearing borrowings, as a percentage of average loans and investment securities, was 0.05 percent for the second quarter 2016, unchanged from the prior quarter and down from 0.06 percent for the second quarter 2015.

The provision for loan losses was zero for the second quarter 2016, unchanged from the prior quarter and second quarter 2015. Net loan losses charged against the allowance for loan losses totaled $577 thousand for the second quarter 2016, compared to $284 thousand for the prior quarter and $359 thousand for the second quarter 2015. At June 30, 2016, the allowance for loan losses totaled $28.9 million and nonperforming loans totaled $13.9 million.

Noninterest income for the second quarter 2016 totaled $11.7 million, essentially unchanged from the prior quarter, and compared to $12.3 million for the second quarter 2015.

Noninterest expense for the second quarter 2016 totaled $25.2 million, compared to $25.9 million for the prior quarter, and $26.9 million for the second quarter 2015. Personnel costs were lower for the second quarter 2016 compared to the first quarter 2016 due to seasonally higher payroll taxes in the first quarter 2016. Personnel costs were lower for the second quarter 2016 compared to the second quarter 2015 due to lower insurance related costs. For the second quarter 2016, the cost of holding other real estate owned was offset by gains realized on the liquidation of properties.

At June 30, 2016, Westamerica Bancorporation's tangible common equity-to-asset ratio was 8.5 percent, and assets totaled $5.2 billion. Westamerica Bancorporation, through its wholly owned subsidiary Westamerica Bank, operates commercial banking and trust offices throughout Northern and Central California.

Westamerica Bancorporation Web Address: www.westamerica.com

FORWARD-LOOKING INFORMATION:

The following appears in accordance with the Private Securities Litigation Reform Act of 1995:

This press release may contain forward-looking statements about the Company, including descriptions of plans or objectives of its management for future operations, products or services, and forecasts of its revenues, earnings or other measures of economic performance. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may."

Forward-looking statements, by their nature, are subject to risks and uncertainties. A number of factors — many of which are beyond the Company's control — could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. The Company's most recent reports filed with the Securities and Exchange Commission, including the annual report for the year ended December 31, 2015 filed on Form 10-K and quarterly report for the quarter ended March 31, 2016 filed on Form 10-Q, describe some of these factors, including certain credit, interest rate, operational, liquidity and market risks associated with the Company's business and operations. Other factors described in these reports include changes in business and economic conditions, competition, fiscal and monetary policies, disintermediation, legislation including the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2011, the Sarbanes-Oxley Act of 2002 and the Gramm-Leach-Bliley Act of 1999, and mergers and acquisitions.

Forward-looking statements speak only as of the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date forward looking statements are made.
    Public Information July 21, 2016    
WESTAMERICA BANCORPORATION        
FINANCIAL HIGHLIGHTS          
June 30, 2016          
             
1. Net Income Summary.          
    (in thousands except per-share amounts)  
        %    
    Q2'16 Q2'15 Change Q1'16  
             
  Net Interest and Fee Income (FTE) $ 36,495   $ 37,415     -2.5 % $ 36,447    
  Provision for Loan Losses     -       -     n/m       -    
  Noninterest Income   11,702     12,269     -4.6 %   11,729    
  Noninterest Expense   25,229     26,896     -6.2 %   25,858    
  Income Before Taxes (FTE)   22,968     22,788     0.8 %   22,318    
  Income Tax Provision (FTE)   8,422     8,027     4.9 %   8,092    
  Net Income $ 14,546   $ 14,761     -1.5 % $ 14,226    
             
  Average Common Shares Outstanding   25,586     25,514     0.3 %   25,445    
  Diluted Average Common Shares   25,630     25,536     0.4 %   25,468    
             
  Operating Ratios:          
  Basic Earnings Per Common Share $ 0.57   $ 0.58     -1.7 % $ 0.56    
  Diluted Earnings Per Common Share   0.57     0.58     -1.7 %   0.56    
  Return On Assets (a)   1.13 %   1.17 %     1.11 %  
  Return On Common Equity (a)   10.9 %   11.5 %     10.9 %  
  Net Interest Margin (FTE) (a)   3.27 %   3.37 %     3.34 %  
  Efficiency Ratio (FTE)   52.3 %   54.1 %     53.7 %  
             
  Dividends Paid Per Common Share $ 0.39   $ 0.38     2.6 % $ 0.39    
  Common Dividend Payout Ratio       68 %   66 %     70 %  
             
        %    
    6/30'16YTD 6/30'15YTD Change    
             
  Net Interest and Fee Income (FTE) $ 72,942   $ 74,345     -1.9 %    
  Provision for Loan Losses     -       -     n/m      
  Noninterest Income   23,431     24,569     -4.6 %    
  Noninterest Expense   51,087     53,623     -4.7 %    
  Income Before Taxes (FTE)   45,286     45,291     0.0 %    
  Income Tax Provision (FTE)   16,514     15,973     3.4 %    
  Net Income $ 28,772   $ 29,318     -1.9 %    
             
  Average Common Shares Outstanding   25,516     25,582     -0.3 %    
  Diluted Average Common Shares   25,549     25,595     -0.2 %    
             
  Operating Ratios:          
  Basic Earnings Per Common Share $ 1.13   $ 1.15     -1.7 %    
  Diluted Earnings Per Common Share   1.13     1.15     -1.7 %    
  Return On Assets (a)   1.12 %   1.17 %      
  Return On Common Equity (a)   10.9 %   11.5 %      
  Net Interest Margin (FTE) (a)   3.30 %   3.40 %      
  Efficiency Ratio (FTE)   53.0 %   54.2 %      
             
  Dividends Paid Per Common Share $ 0.78   $ 0.76     2.6 %    
  Common Dividend Payout Ratio       69 %   66 %      
             
2. Net Interest Income.          
    (dollars in thousands)  
        %    
    Q2'16 Q2'15 Change Q1'16  
             
  Interest and Fee Income (FTE) $ 37,036   $ 38,032     -2.6 % $ 36,999    
  Interest Expense   541     617     -12.3 %   552    
  Net Interest and Fee Income (FTE) $ 36,495   $ 37,415     -2.5 % $ 36,447    
             
  Average Earning Assets $ 4,473,700   $ 4,436,196     0.8 % $ 4,381,423    
  Average Interest-          
    Bearing Liabilities   2,598,868     2,540,194     2.3 %   2,601,408    
             
  Yield on Earning Assets (FTE) (a)   3.32 %   3.43 %     3.39 %  
  Cost of Funds (a)   0.05 %   0.06 %     0.05 %  
  Net Interest Margin (FTE) (a)   3.27 %   3.37 %     3.34 %  
  Interest Expense/          
    Interest-Bearing Liabilities (a)   0.08 %   0.10 %     0.09 %  
  Net Interest Spread (FTE) (a)   3.24 %   3.33 %     3.30 %  
             
        %    
    6/30'16YTD 6/30'15YTD Change    
             
  Interest and Fee Income (FTE) $ 74,035   $ 75,621     -2.1 %    
  Interest Expense   1,093     1,276     -14.4 %    
  Net Interest and Fee Income (FTE) $ 72,942   $ 74,345     -1.9 %    
             
  Average Earning Assets $ 4,427,507   $ 4,389,374     0.9 %    
  Average Interest-          
    Bearing Liabilities   2,600,138     2,555,752     1.7 %    
             
  Yield on Earning Assets (FTE) (a)   3.35 %   3.46 %      
  Cost of Funds (a)   0.05 %   0.06 %      
  Net Interest Margin (FTE) (a)   3.30 %   3.40 %      
  Interest Expense/          
    Interest-Bearing Liabilities (a)   0.08 %   0.10 %      
  Net Interest Spread (FTE) (a)   3.27 %   3.36 %      
             
3. Loans & Other Earning Assets.          
    (average volume, dollars in thousands)  
        %    
    Q2'16 Q2'15 Change Q1'16  
             
  Total Assets $ 5,184,409   $ 5,044,361     2.8 % $ 5,174,804    
  Total Earning Assets   4,473,700     4,436,196     0.8 %   4,381,423    
  Total Loans   1,455,050     1,655,779     -12.1 %   1,500,616    
    Commercial Loans   356,629     405,891     -12.1 %   370,131    
    Commercial RE Loans     611,996     687,221     -10.9 %   630,542    
    Consumer Loans   486,425     562,667     -13.6 %   499,943    
  Total Investment Securities   3,018,650     2,780,417     8.6 %   2,880,807    
    Available For Sale (Market)   1,554,014     1,724,126     -9.9 %   1,567,335    
    Held To Maturity   1,464,636     1,056,291     38.7 %   1,313,472    
    Unrealized Gain   33,820     5,022     n/m     23,669    
             
  Loans/Deposits   32.1 %   37.7 %     33.1 %  
             
        %    
    6/30'16YTD 6/30'15YTD Change    
             
  Total Assets $ 5,179,607   $ 5,051,907     2.5 %    
  Total Earning Assets   4,427,507     4,389,374     0.9 %    
  Total Loans   1,477,833     1,669,686     -11.5 %    
    Commercial Loans   363,380     403,542     -10.0 %    
    Commercial RE Loans     621,269     698,784     -11.1 %    
    Consumer Loans   493,184     567,360     -13.1 %    
  Total Investment Securities   2,949,674     2,719,688     8.5 %    
    Available For Sale (Market)   1,560,675     1,678,749     -7.0 %    
    Held To Maturity   1,388,999     1,040,939     33.4 %    
    Unrealized Gain   33,820     5,022     n/m      
             
  Loans/Deposits   32.6 %   38.0 %      
             
4. Deposits, Other Interest-Bearing Liabilities & Equity.      
    (average volume, dollars in thousands)  
        %    
    Q2'16 Q2'15 Change Q1'16  
             
  Total Deposits $ 4,531,751   $ 4,395,351     3.1 % $ 4,537,548    
    Noninterest Demand     1,994,803     1,942,124     2.7 %   1,993,986    
    Interest Bearing Transaction   855,732     804,512     6.4 %   872,464    
    Savings   1,404,322     1,300,058     8.0 %   1,387,217    
    Time greater than $100K   119,475     172,605     -30.8 %   123,691    
    Time less than $100K   157,419     176,052     -10.6 %   160,190    
  Total Short-Term Borrowings   61,920     86,967     -28.8 %   57,846    
  Shareholders' Equity   537,987     514,768     4.5 %   527,177    
             
  Demand Deposits/          
    Total Deposits   44.0 %   44.2 %     43.9 %  
  Transaction & Savings            
    Deposits / Total Deposits   93.9 %   92.1 %     93.7 %  
             
        %    
    6/30'16YTD 6/30'15YTD Change    
             
  Total Deposits $ 4,534,650   $ 4,399,127     3.1 %    
    Noninterest Demand     1,994,395     1,931,034     3.3 %    
    Interest Bearing Transaction   864,098     807,677     7.0 %    
    Savings   1,395,769     1,296,169     7.7 %    
    Time greater than $100K   121,583     185,854     -34.6 %    
    Time less than $100K   158,805     178,393     -11.0 %    
  Total Short-Term Borrowings   59,883     86,662     -30.9 %    
  Federal Home Loan Bank Advances     -     997     n/m      
  Shareholders' Equity   532,582     515,423     3.3 %    
             
  Demand Deposits/          
    Total Deposits   44.0 %   43.9 %      
  Transaction & Savings            
    Deposits / Total Deposits   93.8 %   91.7 %      
             
5. Interest Yields Earned & Rates Paid.        
    (dollars in thousands)    
    Q2'16    
    Average Income/ Yield (a) /    
    Volume Expense Rate    
             
  Interest & Fee Income Earned          
    Total Earning Assets (FTE) $ 4,473,700   $ 37,036     3.32 %    
    Total Loans (FTE)     1,455,050     17,897     4.95 %    
    Commercial Loans (FTE)   356,629     4,197     4.73 %    
    Commercial RE Loans     611,996     9,538     6.27 %    
    Consumer Loans   486,425     4,162     3.44 %    
    Total Investments (FTE)   3,018,650     19,139     2.53 %    
             
  Interest Expense Paid          
    Total Earning Assets     4,473,700     541     0.05 %    
    Total Interest-Bearing Liabilities   2,598,868     541     0.08 %    
    Total Interest-Bearing Deposits   2,536,948     531     0.08 %    
    Interest-Bearing Transaction   855,732     67     0.03 %    
    Savings   1,404,322     225     0.06 %    
    Time less than $100K   157,419     104     0.27 %    
    Time greater than $100K   119,475     135     0.45 %    
    Total Short-Term Borrowings     61,920     10     0.07 %    
             
  Net Interest Income and            
    Margin (FTE)   $ 36,495     3.27 %    
             
    Q2'15    
    Average Income/ Yield (a) /    
    Volume Expense Rate    
             
  Interest & Fee Income Earned          
    Total Earning Assets (FTE) $ 4,436,196   $ 38,032     3.43 %    
    Total Loans (FTE)   1,655,779     20,424     4.95 %    
    Commercial Loans (FTE)   405,891     4,922     4.86 %    
    Commercial RE Loans     687,221     10,524     6.14 %    
    Consumer Loans   562,667     4,978     3.55 %    
    Total Investments (FTE)   2,780,417     17,608     2.53 %    
             
  Interest Expense Paid          
    Total Earning Assets     4,436,196     617     0.06 %    
    Total Interest-Bearing Liabilities   2,540,194     617     0.10 %    
    Total Interest-Bearing Deposits   2,453,227     601     0.10 %    
    Interest-Bearing Transaction   804,512     62     0.03 %    
    Savings   1,300,058     207     0.06 %    
    Time less than $100K   176,052     150     0.34 %    
    Time greater than $100K   172,605     182     0.42 %    
    Total Short-Term Borrowings     86,967     16     0.07 %    
             
  Net Interest Income and          
    Margin (FTE)   $ 37,415     3.37 %    
             
6. Noninterest Income.          
    (dollars in thousands except per-share amounts)  
        %    
    Q2'16 Q2'15 Change Q1'16  
             
  Service Charges on Deposits $ 5,239   $ 5,694     -8.0 % $ 5,248    
  Merchant Processing Services   1,638     1,783     -8.1 %   1,529    
  Debit Card Fees   1,621     1,534     5.7 %   1,516    
  Other Service Fees   650     683     -4.8 %   629    
  ATM Processing Fees   603     627     -4.0 %   658    
  Trust Fees   657     672     -2.2 %   661    
  Financial Services Commissions   137     198     -31.0 %   156    
  Other Income   1,157     1,078     7.3 %   1,332    
  Total Noninterest Income $ 11,702   $ 12,269     -4.6 % $ 11,729    
             
    Total Revenue (FTE) $ 48,197   $ 49,684     -3.0 % $ 48,176    
    Noninterest Income/Revenue (FTE)   24.3 %   24.7 %     24.3 %  
    Service Charges/Avg. Deposits (a)   0.46 %   0.52 %     0.47 %  
    Total Revenues (FTE) Per Avg.            
  Common Share (a) $ 7.58   $ 7.81     -3.0 % $ 7.61    
             
        %    
    6/30'16YTD 6/30'15YTD Change    
             
  Service Charges on Deposits $ 10,487   $ 11,401     -8.0 %    
  Merchant Processing Services   3,167     3,486     -9.1 %    
  Debit Card Fees   3,137     2,990     4.9 %    
  Other Service Fees   1,279     1,348     -5.1 %    
  ATM Processing Fees   1,261     1,212     4.0 %    
  Trust Fees   1,318     1,378     -4.4 %    
  Financial Services Commissions   293     351     -16.6 %    
  Other Income   2,489     2,403     3.6 %    
  Total Noninterest Income $ 23,431   $ 24,569     -4.6 %    
             
    Total Revenue (FTE) $ 96,373   $ 98,914     -2.6 %    
    Noninterest Income/Revenue (FTE)   24.3 %   24.8 %      
    Service Charges/Avg. Deposits (a)   0.47 %   0.52 %      
    Total Revenues (FTE) Per Avg.            
  Common Share (a) $ 7.60   $ 7.80     -2.6 %    
             
7. Noninterest Expense.          
    (dollars in thousands)  
        %    
    Q2'16 Q2'15 Change Q1'16  
             
  Salaries & Benefits $ 12,887   $ 13,696     -5.9 % $ 13,117    
  Occupancy   3,400     3,726     -8.8 %   3,398    
  Outsourced Data Processing   2,130     2,111     0.9 %   2,130    
  Amortization of            
    Identifiable Intangibles   870     955     -8.9 %   905    
  Professional Fees   758     582     30.2 %   732    
  Furniture & Equipment   1,187     1,158     2.5 %   1,213    
  Other Real Estate Owned   (392 )   52     n/m     111    
  Courier Service   462     598     -22.6 %   545    
  Other Operating   3,927     4,018     -2.3 %   3,707    
  Total Noninterest Expense $ 25,229   $ 26,896     -6.2 % $ 25,858    
             
  Noninterest Expense/          
    Avg. Earning Assets (a)   2.27 %   2.43 %     2.37 %  
  Noninterest Expense/Revenues (FTE)   52.3 %   54.1 %     53.7 %  
             
        %    
    6/30'16YTD 6/30'15YTD Change    
             
  Salaries & Benefits $ 26,004   $ 27,034     -3.8 %    
  Occupancy   6,798     7,453     -8.8 %    
  Outsourced Data Processing   4,260     4,219     1.0 %    
  Amortization of            
    Identifiable Intangibles   1,775     1,956     -9.3 %    
  Professional Fees   1,490     1,130     31.8 %    
  Furniture & Equipment   2,400     2,277     5.4 %    
  Other Real Estate Owned   (281 )   367     n/m      
  Courier Service   1,007     1,141     -11.7 %    
  Other Operating   7,634     8,046     -5.1 %    
  Total Noninterest Expense $ 51,087   $ 53,623     -4.7 %    
             
  Noninterest Expense/          
    Avg. Earning Assets (a)   2.32 %   2.46 %      
  Noninterest Expense/Revenues (FTE)   53.0 %   54.2 %      
             
8. Provision for Loan Losses.          
    (dollars in thousands)  
        %    
    Q2'16 Q2'15 Change Q1'16  
             
  Average Total Loans $ 1,455,050   $ 1,655,779     -12.1 % $ 1,500,616    
             
  Allowance for Loan Loss (ALL)          
    Beginning of Period   $ 29,487   $ 31,187     -5.5 % $ 29,771    
  Provision for Loan Losses         -       -     n/m       -    
  Net ALL Losses   (577 )   (359 )   60.7 %   (284 )  
  ALL End of Period $ 28,910   $ 30,828     -6.2 % $ 29,487    
  ALL Recoveries/Gross ALL Losses       61 %   74 %     87 %  
             
  Net ALL Losses/Avg. Total Loans (a)   0.16 %   0.09 %     0.08 %  
             
        %    
    6/30'16YTD 6/30'15YTD Change    
             
  Average Total Loans $ 1,477,833   $ 1,669,686     -11.5 %    
             
  Allowance for Loan Loss (ALL)          
    Beginning of Period   $ 29,771   $ 31,485     -5.4 %    
  Provision for Loan Losses         -       -     n/m      
  Net ALL Losses   (861 )   (657 )   30.9 %    
  ALL End of Period $ 28,910   $ 30,828     -6.2 %    
  ALL Recoveries/Gross ALL Losses       76 %   73 %      
             
  Net ALL Losses/Avg. Total Loans (a)   0.12 %   0.08 %      
             
9. Credit Quality.          
    (dollars in thousands)  
        %    
    6/30/16 6/30/15 Change 3/31/16  
             
  Nonperforming Originated Loans:          
    Nonperforming Nonaccrual $ 1,693   $ 6,269     -73.0 % $ 9,205    
    Performing Nonaccrual     6,890     11     n/m       1,841    
   Total Nonaccrual Loans   8,583     6,280     36.7 %   11,046    
   90+ Days Past Due Accruing Loans   303     221     37.1 %   183    
   Total   8,886     6,501     36.7 %   11,229    
  Repossessed Originated Loan Collateral   1,089     5,906     -81.6 %   4,786    
  Total Nonperforming          
    Originated Assets   9,975     12,407     -19.6 %   16,015    
             
  Nonperforming Purchased Covered Loans (1):        
    Nonperforming Nonaccrual     29       3     n/m       -    
    Performing Nonaccrual     -       -     n/m       -    
   Total Nonaccrual Loans     29       3     n/m       -    
   90+ Days Past Due Accruing Loans     -       -     n/m       -    
   Total     29       3     n/m       -    
  Repossessed Purchased Covered            
   Loan Collateral (1)     -       486     n/m       -    
  Total Nonperforming Purchased          
  Covered Assets (1)     29     489     n/m       -    
             
  Nonperforming Purchased Non-Covered Loans (2):        
    Nonperforming Nonaccrual   4,805       9,937     -51.6 %   6,601    
    Performing Nonaccrual     148       5     n/m       80    
   Total Nonaccrual Loans   4,953       9,942     -50.2 %   6,681    
   90+ Days Past Due Accruing Loans     53       -     n/m       77    
   Total   5,006       9,942     -49.6 %   6,758    
  Repossessed Purchased Non-Covered            
   Loan Collateral (2)     3,073       2,868     7.2 %     3,652    
  Total Nonperforming Purchased          
   Non-Covered Assets (2)   8,079       12,810     -36.9 %   10,410    
             
  Total Nonperforming Assets $ 18,083   $ 25,706     -29.7 % $ 26,425    
             
  Total Originated Loans Outstanding $ 1,280,194   $ 1,425,047     -10.2 % $ 1,310,083    
  Total Purchased Covered            
   Loans Outstanding (1)   12,777     15,109     -15.4 %   13,664    
  Total Purchased Non-Covered            
   Loans Outstanding (2)   136,589       191,115     -28.5 %   149,449    
  Total Loans Outstanding   $ 1,429,560   $ 1,631,271     -12.4 % $ 1,473,196    
             
  Total Assets   $ 5,179,085   $ 5,031,230     2.9 % $ 5,199,868    
             
  Loans:          
   Allowance for Loan Losses $ 28,910   $ 30,828     -6.2 % $ 29,487    
   Allowance/Loans   2.02 %   1.89 %     2.00 %  
   Nonperforming Loans/Total Loans   0.97 %   1.01 %     1.22 %  
             
  Purchased Covered Loans (1):          
   Fair Value Discount on Purchased            
    Covered Loans     -     $ 197     $ 18    
   Discount/Purchased Covered          
    Loans, gross   0.00 %   1.29 %     0.13 %  
   Nonperforming Purchased Covered Loans/        
    Total Purchased Covered Loans   0.23 %   0.02 %     0.00 %  
             
  Purchased Non-Covered Loans (2):          
   Fair Value Discount on Purchased            
    Non-Covered Loans $ 5,411   $ 7,780     $ 6,084    
   Discount/Purchased Non-Covered   3.81 %   3.91 %     3.91 %  
    Loans, gross          
   Nonperforming Purchased Non-Covered Loans/        
    Total Purchased Non-Covered Loans   3.66 %   5.20 %     4.52 %  
             
10. Capital.          
    (in thousands, except per-share amounts)  
        %    
    6/30/16 6/30/15 Change 3/31/16  
             
  Shareholders' Equity $ 558,327   $ 525,338     6.3 % $ 538,973    
  Total Assets   5,179,085     5,031,230     2.9 %   5,199,868    
             
  Shareholders' Equity/          
    Total Assets   10.78 %   10.44 %     10.37 %  
  Shareholders' Equity/          
    Total Loans   39.06 %   32.20 %     36.59 %  
  Tangible Common Equity Ratio   8.48 %   7.99 %     8.04 %  
  Common Shares Outstanding   25,632     25,529     0.4 %   25,438    
  Common Equity Per Share $ 21.78   $ 20.58     5.9 % $ 21.19    
  Market Value Per Common Share $ 49.26   $ 50.65     -2.7 % $ 48.71    
             
  Share Repurchase Programs          
    (shares in thousands)  
        %    
    Q2'16 Q2'15 Change Q1'16  
             
  Total Shares Repurchased   7     133     -94.6 %   130    
    Average Repurchase Price $ 49.35   $ 43.89     12.5 % $ 41.53    
  Net Shares (Issued) Repurchased   (194 )   34     n/m     90    
             
        %    
    6/30'16YTD 6/30'15YTD Change    
             
  Total Shares Repurchased   137     316     -56.4 %    
    Average Repurchase Price $ 41.94   $ 43.37     -3.3 %    
  Net Shares (Issued) Repurchased   (104 )   216     -148.2 %    
             
11. Period-End Balance Sheets.          
    (unaudited, dollars in thousands)  
        %    
    6/30/16 6/30/15 Change 3/31/16  
  Assets:          
    Cash and Due from Banks $ 441,785   $ 289,606     52.5 % $ 471,164    
             
    Investment Securities:          
    Available For Sale   1,531,035     1,634,878     -6.4 %   1,585,970    
    Held to Maturity   1,473,357     1,159,581     27.1 %   1,358,139    
             
    Loans   1,429,560     1,631,271     -12.4 %   1,473,196    
    Allowance For Loan Losses   (28,910 )   (30,828 )   -6.2 %   (29,487 )  
    Total Loans, net   1,400,650     1,600,443     -12.5 %   1,443,709    
             
    Other Real Estate Owned   4,162     9,260     -55.1 %   8,438    
    Premises and Equipment, net   37,759     37,945     -0.5 %   38,045    
    Identifiable Intangibles, net   8,656     12,331     -29.8 %   9,526    
    Goodwill     121,673     121,673     0.0 %   121,673    
    Other Assets   160,008     165,513     -3.3 %   163,204    
             
  Total Assets $ 5,179,085   $ 5,031,230     2.9 % $ 5,199,868    
             
  Liabilities and Shareholders' Equity:          
    Deposits:          
    Noninterest Bearing $ 1,978,947   $ 1,930,551     2.5 % $ 1,989,010    
    Interest-Bearing Transaction   827,857     795,793     4.0 %   855,008    
    Savings   1,404,840     1,287,859     9.1 %   1,393,919    
    Time   273,670     340,641     -19.7 %   278,813    
    Total Deposits   4,485,314     4,354,844     3.0 %   4,516,750    
             
    Short-Term Borrowed Funds   67,852     82,747     -18.0 %   52,451    
    Other Liabilities   67,592     68,301     -1.0 %   91,694    
  Total Liabilities   4,620,758     4,505,892     2.5 %   4,660,895    
             
  Shareholders' Equity:          
    Common Equity:          
    Paid-In Capital   391,213     380,050     2.9 %   381,426    
    Accumulated Other          
    Comprehensive Income   11,885     3,988     198.0 %   6,619    
    Retained Earnings   155,229     141,300     9.9 %   150,928    
  Total Shareholders' Equity   558,327     525,338     6.3 %   538,973    
             
  Total Liabilities and            
    Shareholders' Equity $ 5,179,085   $ 5,031,230     2.9 % $ 5,199,868    
             
12. Income Statements.          
    (unaudited, in thousands except per-share amounts)  
        %    
    Q2'16 Q2'15 Change Q1'16  
  Interest & Fee Income:          
    Loans $ 17,583   $ 20,035     -12.2 % $ 18,353    
    Investment Securities:          
    Available for Sale   8,091     7,999     1.1 %   7,967    
    Held to Maturity   8,053     6,391     26.0 %   7,327    
  Total Interest & Fee Income   33,727     34,425     -2.0 %   33,647    
             
  Interest Expense:          
    Transaction Deposits   67     62     7.2 %   70    
    Savings Deposits   225     207     8.5 %   223    
    Time Deposits   239     332     -28.0 %   250    
    Short-Term Borrowed Funds   10     16     -35.2 %   9    
  Total Interest Expense   541     617     -12.3 %   552    
             
  Net Interest Income   33,186     33,808     -1.8 %   33,095    
             
  Provision for Loan Losses     -       -     n/m       -    
             
  Noninterest Income:          
    Service Charges     5,239     5,694     -8.0 %   5,248    
    Merchant Processing Services   1,638     1,783     -8.1 %   1,529    
    Debit Card Fees   1,621     1,534     5.7 %   1,516    
    Other Service Fees   650     683     -4.8 %   629    
    ATM Processing Fees   603     627     -4.0 %   658    
    Trust Fees   657     672     -2.2 %   661    
    Financial Services Commissions   137     198     -31.0 %   156    
    Other   1,157     1,078     7.3 %   1,332    
  Total Noninterest Income   11,702     12,269     -4.6 %   11,729    
             
  Noninterest Expense:          
    Salaries and   Benefits   12,887     13,696     -5.9 %   13,117    
    Occupancy     3,400     3,726     -8.8 %   3,398    
    Outsourced Data Processing   2,130     2,111     0.9 %   2,130    
    Amortization of Identifiable Intangibles   870     955     -8.9 %   905    
    Professional Fees   758     582     30.2 %   732    
    Furniture & Equipment   1,187     1,158     2.5 %   1,213    
    Other Real Estate Owned   (392 )   52     n/m     111    
    Courier Service   462     598     -22.6 %   545    
    Other   3,927     4,018     -2.3 %   3,707    
  Total Noninterest Expense   25,229     26,896     -6.2 %   25,858    
             
  Income Before Income Taxes   19,659     19,181     2.5 %   18,966    
  Income Tax Provision   5,113     4,420     15.7 %   4,740    
  Net Income $ 14,546   $ 14,761     -1.5 % $ 14,226    
             
  Average Common Shares Outstanding   25,586     25,514     0.3 %   25,445    
  Diluted Common Shares Outstanding   25,630     25,536     0.4 %   25,468    
             
  Per Common Share Data:          
    Basic Earnings $ 0.57   $ 0.58     -1.7 % $ 0.56    
    Diluted Earnings   0.57     0.58     -1.7 %   0.56    
    Dividends Paid   0.39     0.38     2.6 %   0.39    
             
        %    
    6/30'16YTD 6/30'15YTD Change    
  Interest & Fee Income:          
    Loans $ 35,936   $ 40,265     -10.7 %    
    Investment Securities:          
    Available for Sale   16,058     15,468     3.8 %    
    Held to Maturity   15,380     12,609     22.0 %    
  Total Interest & Fee Income   67,374     68,342     -1.4 %    
             
  Interest Expense:          
    Transaction Deposits   137     125     9.2 %    
    Savings Deposits   448     423     5.7 %    
    Time Deposits   489     695     -29.6 %    
    Short-Term Borrowed Funds   19     32     -38.8 %    
    Federal Home Loan Bank Advances     -     1     n/m      
  Total Interest Expense   1,093     1,276     -14.4 %    
             
  Net Interest Income   66,281     67,066     -1.2 %    
             
  Provision for Loan Losses     -       -     n/m      
             
  Noninterest Income:          
    Service Charges     10,487     11,401     -8.0 %    
    Merchant Processing Services   3,167     3,486     -9.1 %    
    Debit Card Fees   3,137     2,990     4.9 %    
    Other Service Fees   1,279     1,348     -5.1 %    
    ATM Processing Fees   1,261     1,212     4.0 %    
    Trust Fees   1,318     1,378     -4.4 %    
    Financial Services Commissions   293     351     -16.6 %    
    Other   2,489     2,403     3.6 %    
  Total Noninterest Income   23,431     24,569     -4.6 %    
             
  Noninterest Expense:          
    Salaries and   Benefits   26,004     27,034     -3.8 %    
    Occupancy     6,798     7,453     -8.8 %    
    Outsourced Data Processing   4,260     4,219     1.0 %    
    Amortization of Identifiable Intangibles   1,775     1,956     -9.3 %    
    Professional Fees   1,490     1,130     31.8 %    
    Furniture & Equipment   2,400     2,277     5.4 %    
    Other Real Estate Owned   (281 )   367     n/m      
    Courier Service   1,007     1,141     -11.7 %    
    Other   7,634     8,046     -5.1 %    
  Total Noninterest Expense   51,087     53,623     -4.7 %    
             
  Income Before Income Taxes   38,625     38,012     1.6 %    
  Income Tax Provision   9,853     8,694     13.3 %    
  Net Income $ 28,772   $ 29,318     -1.9 %    
             
  Average Common Shares Outstanding   25,516     25,582     -0.3 %    
  Diluted Common Shares Outstanding   25,549     25,595     -0.2 %    
             
  Per Common Share Data:          
  Basic Earnings $ 1.13   $ 1.15     -1.7 %    
  Diluted Earnings   1.13     1.15     -1.7 %    
  Dividends Paid   0.78     0.76     2.6 %    
             
  Footnotes and Abbreviations:          
  (FTE) Fully Taxable Equivalent. The Company presents its net interest margin and net interest incomeon a FTE basis using the current statutory federal tax rate, which is a non-generally acceptedaccounting principles (GAAP) financial measure.   Management believes the FTE basis is valuable tothe reader because the Company's loan and investment securities portfolios contain a relatively largeportion of municipal loans and securities that are federally tax exempt.   The Company's tax exemptloans and securities composition may not be similar to that of other banks, therefore in order toreflect the impact of the federally tax exempt loans and securities on the net interest margin and netinterest income for comparability with other banks, the Company presents its net interest margin andnet interest income on a FTE basis.    
  (a) Annualized          
  (1) Purchased covered loans and repossessed loan collateral represent assets purchased in abusiness combination on which losses are shared with the FDIC per a Loss-Sharing Agreement.    
  (2) Purchased non-covered loans and repossessed loan collateral represent assets purchased in abusiness combination.    
             

 

 

 
For additional information contact:Westamerica Bancorporation1108 Fifth Avenue, San Rafael, CA 94901Robert A. Thorson - SVP & Chief Financial Officer707-863-6840investments@westamerica.com

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