Westamerica Bancorporation Reports Second Quarter 2017 Financial Results

SAN RAFAEL, Calif., July 20, 2017 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq:WABC), parent company of Westamerica Bank, generated net income for the second quarter 2017 of $15.8 million and diluted earnings per common share ("EPS") of $0.60, compared to first quarter 2017 net income of $15.0 million and EPS of $0.57 and second quarter 2016 net income of $14.5 million and EPS of $0.57. Second quarter 2017 results include a $1.9 million reversal of provision for loan losses which accounted for $0.04 of the quarter's EPS. First quarter 2017 results reflect the Company's prospective adoption of a new accounting standard related to share based compensation tax benefits; first quarter 2017 EPS measured $0.02 higher than would have been measured under accounting standards applied in 2016. The new accounting standard did not affect second quarter 2017 results by a meaningful amount.

"Second quarter 2017 net income benefited from higher noninterest income and lower noninterest expense. While short-term market interest rates rose during the second quarter 2017, intermediate and long-term rates declined; the interest rate environment was not conducive for net interest margin improvement. Credit quality improved with non-performing assets declining $650 thousand during the second quarter 2017 to total $8.5 million at June 30, 2017," said Chairman, President and CEO David Payne.  "Westamerica generated an annualized 10.7 percent return on average shareholders' common equity for the second quarter 2017, and paid a quarterly dividend of $0.39 per common share," concluded Payne.

The annualized net interest margin on a fully taxable equivalent basis was 3.12 percent for the second quarter 2017, compared to 3.14 percent for the first quarter 2017, and 3.27 percent for the second quarter 2016. Net interest income on a fully taxable equivalent basis was $35.8 million for the second quarter 2017, compared to $36.0 million for the first quarter 2017, and $36.5 million for the second quarter 2016. The annualized funding cost of deposits and other interest-bearing borrowings, as a percentage of average earning assets, was 0.04 percent for the second quarter 2017, compared to 0.04 percent for the first quarter 2017 and 0.05 percent for the second quarter 2016. Checking and savings deposits, which earn relatively low interest rates and are less volatile than time deposits during periods of rising market interest rates, represented 95 percent of average total deposits during the second quarter 2017.

The Company recognized a reversal of provision for loan losses of $1.9 million for the second quarter 2017; during the quarter the Company realized net recoveries of prior loan losses of $1.1 million and nonperforming loans declined $159 thousand, totaling $6.9 million at June 30, 2017. The provision for loan losses was zero for the first quarter 2017 and second quarter 2016. At June 30, 2017, the allowance for loan losses totaled $24.1 million.

Noninterest income for the second quarter 2017 totaled $12.1 million, compared to $11.7 million for the first quarter 2017 and $11.7 million for the second quarter 2016. The second quarter 2017 improvement in noninterest income is primarily due to higher merchant processing fees.

Noninterest expense for the second quarter 2017 totaled $24.4 million, compared to $24.6 million for the first quarter 2017 and $25.2 million for the second quarter 2016. The $800 thousand reduction in noninterest expense from the second quarter 2016 to the second quarter 2017 was due to reductions in professional fees, correspondent service charges, insurance premiums, limited partnership operating losses, intangible amortization, and other expenses.

The income tax provision for 2017 reflects the prospective adoption of Accounting Standards Update ("ASU") 2016-09, "Improvements to Employee Share-Based Payment Accounting". Upon granting non-qualified stock options ("NQSO"), the Company estimates the fair value of the grant and records such value as compensation expense over the attribution period in its financial statements. At the time the NQSO grant is exercised, the ultimate value of the grant is determined and represents taxable income to the grantee and a tax deduction for the Company. The difference between the estimated fair value expensed for financial statement purposes and the realized amount deducted for tax purposes requires a reconciling adjustment to the Company's tax accounts. Prior to ASU 2016-09, the Company recognized the balancing entry as an adjustment to shareholders' equity; upon the January 1, 2017 required adoption of ASU 2016-09, the Company must recognize the balancing entry as an adjustment to the provision for income taxes. The Company's fully-tax equivalent tax rate was 37.8 percent for the second quarter 2017, compared to 34.8 percent for the first quarter 2017 and 36.7 percent for the second quarter 2016. The fully-tax equivalent tax rate would have been 37.8 percent for the second quarter 2017 and 37.7 percent for the first quarter 2017 under accounting rules applied in 2016.

At June 30, 2017, Westamerica Bancorporation's tangible common equity-to-asset ratio was 8.90 percent, and assets totaled $5.4 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, 2016 filed on Form 10-K and quarterly report for the quarter ended March 31, 2017 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 20, 2017    
       
WESTAMERICA BANCORPORATION        
FINANCIAL HIGHLIGHTS          
June 30, 2017          
             
1. Net Income Summary.          
    (in thousands except per-share amounts)  
        %    
    Q2'17 Q2'16 Change Q1'17  
             
  Net Interest and Fee Income (FTE) $ 35,764   $ 36,495   -2.0 % $ 36,030    
  (Reversal of) Provision for Loan Losses     (1,900 )     -     n/m       -    
  Noninterest Income   12,123     11,702   3.6 %   11,657    
  Noninterest Expense   24,396     25,229   -3.3 %   24,615    
  Income Before Taxes (FTE)   25,391     22,968   10.5 %   23,072    
  Income Tax Provision (FTE)   9,592     8,422   13.9 %   8,023    
  Net Income $ 15,799   $ 14,546   8.6 % $ 15,049    
             
  Average Common Shares Outstanding   26,299     25,586   2.8 %   26,171    
  Diluted Average Common Shares   26,402     25,630   3.0 %   26,329    
             
  Operating Ratios:          
  Basic Earnings Per Common Share $ 0.60   $ 0.57   5.3 % $ 0.58    
  Diluted Earnings Per Common Share   0.60     0.57   5.3 %   0.57    
  Return On Assets (a)   1.18 %   1.13 %     1.13 %  
  Return On Common Equity (a)   10.7 %   10.9 %     10.5 %  
  Net Interest Margin (FTE) (a)   3.12 %   3.27 %     3.14 %  
  Efficiency Ratio (FTE)   50.9 %   52.3 %     51.6 %  
             
  Dividends Paid Per Common Share $ 0.39   $ 0.39   0.0 % $ 0.39    
  Common Dividend Payout Ratio      65 %   68 %     68 %  
             
        %    
    06/30'17YTD 06/30'16YTD Change    
             
  Net Interest and Fee Income (FTE) $ 71,794   $ 72,942   -1.6 %    
  (Reversal of) Provision for Loan Losses     (1,900 )     -   n/m      
  Noninterest Income   23,780     23,431   1.5 %    
  Noninterest Expense   49,011     51,087   -4.1 %    
  Income Before Taxes (FTE)   48,463     45,286   7.0 %    
  Income Tax Provision (FTE)   17,615     16,514   6.7 %    
  Net Income $ 30,848   $ 28,772   7.2 %    
             
  Average Common Shares Outstanding   26,235     25,516   2.8 %    
  Diluted Average Common Shares   26,366     25,549   3.2 %    
             
  Operating Ratios:          
  Basic Earnings Per Common Share $ 1.18   $ 1.13   4.4 %    
  Diluted Earnings Per Common Share   1.17     1.13   3.5 %    
  Return On Assets (a)   1.15 %   1.12 %      
  Return On Common Equity (a)   10.6 %   10.9 %      
  Net Interest Margin (FTE) (a)   3.13 %   3.30 %      
  Efficiency Ratio (FTE)   51.3 %   53.0 %      
             
  Dividends Paid Per Common Share $ 0.78   $ 0.78   0.0 %    
  Common Dividend Payout Ratio      67 %   69 %      
             
2. Net Interest Income.          
    (dollars in thousands)  
        %    
    Q2'17 Q2'16 Change Q1'17  
             
  Interest and Fee Income (FTE) $ 36,240   $ 37,036   -2.2 % $ 36,510    
  Interest Expense   476     541   -12.1 %   480    
  Net Interest and Fee Income (FTE) $ 35,764   $ 36,495   -2.0 % $ 36,030    
             
  Average Earning Assets $ 4,598,296   $ 4,473,700   2.8 % $ 4,620,001    
  Average Interest-          
    Bearing Liabilities   2,692,447     2,598,868   3.6 %   2,704,472    
             
  Yield on Earning Assets (FTE) (a)   3.16 %   3.32 %     3.18 %  
  Cost of Funds (a)   0.04 %   0.05 %     0.04 %  
  Net Interest Margin (FTE) (a)   3.12 %   3.27 %     3.14 %  
  Interest Expense/          
    Interest-Bearing Liabilities (a)   0.07 %   0.08 %     0.07 %  
  Net Interest Spread (FTE) (a)   3.09 %   3.24 %     3.11 %  
             
        %    
    06/30'17YTD 06/30'16YTD Change    
             
  Interest and Fee Income (FTE) $ 72,750   $ 74,035   -1.7 %    
  Interest Expense   956     1,093   -12.5 %    
  Net Interest and Fee Income (FTE) $ 71,794   $ 72,942   -1.6 %    
             
  Average Earning Assets $ 4,609,089   $ 4,427,507   4.1 %    
  Average Interest-          
    Bearing Liabilities   2,698,426     2,600,138   3.8 %    
             
  Yield on Earning Assets (FTE) (a)   3.17 %   3.35 %      
  Cost of Funds (a)   0.04 %   0.05 %      
  Net Interest Margin (FTE) (a)   3.13 %   3.30 %      
  Interest Expense/          
    Interest-Bearing Liabilities (a)   0.07 %   0.08 %      
  Net Interest Spread (FTE) (a)   3.10 %   3.27 %      
             
3. Loans & Other Earning Assets.          
    (average volume, dollars in thousands)  
        %    
    Q2'17 Q2'16 Change Q1'17  
             
  Total Assets $ 5,385,085   $ 5,184,409   3.9 % $ 5,395,783    
  Total Earning Assets   4,598,296     4,473,700   2.8 %   4,620,001    
  Total Loans   1,333,135     1,455,050   -8.4 %   1,355,250    
    Commercial Loans   349,979     356,629   -1.9 %   354,896    
    Commercial RE Loans    566,570     611,996   -7.4 %   558,485    
    Consumer Loans   416,586     486,425   -14.4 %   441,869    
  Total Investment Securities   3,265,161     3,018,650   8.2 %   3,264,751    
    Available For Sale (Market)   1,982,997     1,554,014   27.6 %   1,941,028    
    Held To Maturity   1,282,164     1,464,636   -12.5 %   1,323,723    
      Unrealized Gain (Loss)   3,438     33,820   n/m     (1,676 )  
             
  Loans/Deposits   28.6 %   32.1 %     28.9 %  
             
        %    
    06/30'17YTD 06/30'16YTD Change    
             
  Total Assets $ 5,390,404   $ 5,179,607   4.1 %    
  Total Earning Assets   4,609,089     4,427,507   4.1 %    
  Total Loans   1,344,132     1,477,833   -9.0 %    
    Commercial Loans   352,424     363,380   -3.0 %    
    Commercial RE Loans    562,550     621,269   -9.5 %    
    Consumer Loans   429,158     493,184   -13.0 %    
  Total Investment Securities   3,264,957     2,949,674   10.7 %    
    Available For Sale (Market)   1,962,128     1,560,675   25.7 %    
    Held To Maturity   1,302,829     1,388,999   -6.2 %    
      Unrealized Gain   3,438     33,820   n/m      
             
  Loans/Deposits   28.7 %   32.6 %      
             
4. Deposits, Other Interest-Bearing Liabilities & Equity.      
    (average volume, dollars in thousands)  
        %    
    Q2'17 Q2'16 Change Q1'17  
             
  Total Deposits $ 4,669,424   $ 4,531,751   3.0 % $ 4,692,746    
    Noninterest Demand    2,048,155     1,994,803   2.7 %   2,056,858    
    Interest Bearing Transaction   880,470     855,732   2.9 %   880,387    
    Savings   1,491,283     1,404,322   6.2 %   1,501,961    
    Time greater than $100K   110,762     119,475   -7.3 %   112,140    
    Time less than $100K   138,754     157,419   -11.9 %   141,400    
  Total Short-Term Borrowings   71,178     61,920   15.0 %   68,584    
  Shareholders' Equity   593,028     537,987   10.2 %   582,384    
             
  Demand Deposits/          
    Total Deposits   43.9 %   44.0 %     43.8 %  
  Transaction & Savings           
    Deposits / Total Deposits   94.7 %   93.9 %     94.6 %  
             
        %    
    06/30'17YTD 06/30'16YTD Change    
             
  Total Deposits $ 4,681,021   $ 4,534,650   3.2 %    
    Noninterest Demand    2,052,483     1,994,395   2.9 %    
    Interest Bearing Transaction   880,429     864,098   1.9 %    
    Savings   1,496,592     1,395,769   7.2 %    
    Time greater than $100K   111,447     121,583   -8.3 %    
    Time less than $100K   140,070     158,805   -11.8 %    
  Total Short-Term Borrowings   69,888     59,883   16.7 %    
  Shareholders' Equity   587,736     532,582   10.4 %    
             
  Demand Deposits/          
    Total Deposits   43.8 %   44.0 %      
  Transaction & Savings           
    Deposits / Total Deposits   94.6 %   93.8 %      
             
5. Interest Yields Earned & Rates Paid.        
    (dollars in thousands)    
    Q2'17    
    Average Income/ Yield (a) /    
    Volume Expense Rate    
             
  Interest & Fee Income Earned          
    Total Earning Assets (FTE) $ 4,598,296   $ 36,240   3.16 %    
    Total Loans (FTE)     1,333,135     15,747   4.74 %    
      Commercial Loans (FTE)   349,979     4,144   4.75 %    
      Commercial RE Loans    566,570     8,011   5.67 %    
      Consumer Loans   416,586     3,592   3.46 %    
    Total Investments (FTE)   3,265,161     20,493   2.51 %    
             
  Interest Expense Paid          
    Total Earning Assets    4,598,296     476   0.04 %    
    Total Interest-Bearing Liabilities   2,692,447     476   0.07 %    
    Total Interest-Bearing Deposits   2,621,269     465   0.07 %    
      Interest-Bearing Transaction   880,470     57   0.03 %    
      Savings   1,491,283     222   0.06 %    
      Time less than $100K   138,754     81   0.23 %    
      Time greater than $100K   110,762     105   0.38 %    
    Total Short-Term Borrowings    71,178     11   0.06 %    
             
  Net Interest Income and           
  Margin (FTE)   $ 35,764   3.12 %    
             
    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 %    
             
6. Noninterest Income.          
    (dollars in thousands except per-share amounts)  
        %    
    Q2'17 Q2'16 Change Q1'17  
             
  Service Charges on Deposits $ 4,945   $ 5,239   -5.6 % $ 4,923    
  Merchant Processing Services   2,052     1,638   25.3 %   1,875    
  Debit Card Fees   1,586     1,621   -2.1 %   1,481    
  Other Service Fees   662     650   1.8 %   650    
  ATM Processing Fees   654     603   8.6 %   575    
  Trust Fees   716     657   8.9 %   702    
  Financial Services Commissions   142     137   3.6 %   195    
  Other Income   1,366     1,157   18.0 %   1,256    
  Total Noninterest Income $ 12,123   $ 11,702   3.6 % $ 11,657    
             
    Total Revenue (FTE) $ 47,887   $ 48,197   -0.6 % $ 47,687    
    Noninterest Income/Revenue (FTE)   25.3 %   24.3 %     24.4 %  
    Service Charges/Avg. Deposits (a)   0.42 %   0.46 %     0.43 %  
    Total Revenues (FTE) Per Avg.           
  Common Share (a) $ 7.30   $ 7.58   -3.6 % $ 7.39    
             
        %    
    06/30'17YTD 06/30'16YTD Change    
             
  Service Charges on Deposits $ 9,868   $ 10,487   -5.9 %    
  Merchant Processing Services   3,927     3,167   24.0 %    
  Debit Card Fees   3,067     3,137   -2.2 %    
  Other Service Fees   1,312     1,279   2.5 %    
  ATM Processing Fees   1,229     1,261   -2.5 %    
  Trust Fees   1,418     1,318   7.6 %    
  Financial Services Commissions   337     293   15.0 %    
  Other Income   2,622     2,489   5.3 %    
  Total Noninterest Income $ 23,780   $ 23,431   1.5 %    
             
    Total Revenue (FTE) $ 95,574   $ 96,373   -0.8 %    
    Noninterest Income/Revenue (FTE)   24.9 %   24.3 %      
    Service Charges/Avg. Deposits (a)   0.43 %   0.47 %      
    Total Revenues (FTE) Per Avg.           
  Common Share (a) $ 7.35   $ 7.60   -3.3 %    
             
7. Noninterest Expense.          
    (dollars in thousands)  
        %    
    Q2'17 Q2'16 Change Q1'17  
             
  Salaries & Benefits $ 12,981   $ 12,887   0.7 % $ 13,070    
  Occupancy   3,509     3,400   3.2 %   3,633    
  Outsourced Data Processing   2,188     2,130   2.7 %   2,139    
  Amortization of           
    Identifiable Intangibles   762     870   -12.4 %   800    
  Professional Fees   410     758   -45.9 %   611    
  Furniture & Equipment   1,267     1,187   6.8 %   1,254    
  Other Real Estate Owned   (126 )   (392 ) n/m     (40 )  
  Courier Service   438     462   -5.2 %   421    
  Other Operating   2,967     3,927   -24.4 %   2,727    
  Total Noninterest Expense $ 24,396   $ 25,229   -3.3 % $ 24,615    
             
  Noninterest Expense/          
    Avg. Earning Assets (a)   2.13 %   2.27 %     2.16 %  
  Noninterest Expense/Revenues (FTE)   50.9 %   52.3 %     51.6 %  
             
        %    
    06/30'17YTD 06/30'16YTD Change    
             
  Salaries & Benefits $ 26,051   $ 26,004   0.2 %    
  Occupancy   7,142     6,798   5.1 %    
  Outsourced Data Processing   4,327     4,260   1.6 %    
  Amortization of           
    Identifiable Intangibles   1,562     1,775   -12.0 %    
  Professional Fees   1,021     1,490   -31.4 %    
  Furniture & Equipment   2,521     2,400   5.1 %    
  Other Real Estate Owned   (166 )   (281 ) n/m      
  Courier Service   859     1,007   -14.7 %    
  Other Operating   5,694     7,634   -25.4 %    
  Total Noninterest Expense $ 49,011   $ 51,087   -4.1 %    
             
  Noninterest Expense/          
    Avg. Earning Assets (a)   2.14 %   2.32 %      
  Noninterest Expense/Revenues (FTE)   51.3 %   53.0 %      
             
8. Allowance for Loan Losses.          
    (dollars in thousands)  
        %    
    Q2'17 Q2'16 Change Q1'17  
             
  Average Total Loans $ 1,333,135   $ 1,455,050   -8.4 % $ 1,355,250    
             
  Allowance for Loan Loss (ALL)         
  Beginning of Period  $ 24,919   $ 29,487   -15.5 % $ 25,954    
  (Reversal of) Provision for Loan Losses        (1,900 )     -   n/m       -    
  Net ALL Recoveries (Losses)   1,084     (577 ) n/m     (1,035 )  
  ALL End of Period $ 24,103   $ 28,910   -16.6 % $ 24,919    
  ALL Recoveries/Gross ALL Losses      158 %   61 %     44 %  
             
  Net ALL (Recoveries) Losses/          
  Avg. Total Loans (a)   -0.33 %   0.16 %     0.31 %  
             
        %    
    06/30'17YTD 06/30'16YTD Change    
             
  Average Total Loans $ 1,344,132   $ 1,477,833   -9.0 %    
             
  Allowance for Loan Loss (ALL)         
  Beginning of Period  $ 25,954   $ 29,771   -12.8 %    
  (Reversal of) Provision for Loan Losses        (1,900 )     -   n/m      
  Net ALL Recoveries (Losses)   49     (861 ) n/m      
  ALL End of Period $ 24,103   $ 28,910   -16.6 %    
  ALL Recoveries/Gross ALL Losses      101 %   76 %      
             
  Net ALL (Recoveries) Losses/          
  Avg. Total Loans (a)   -0.01 %   0.12 %      
             
9. Credit Quality.          
    (dollars in thousands)  
        %    
    6/30/17 6/30/16 Change 3/31/17  
             
  Nonperforming Loans (1):          
    Nonperforming Nonaccrual $ 2,215   $ 6,527   -66.1 % $ 2,382    
    Performing Nonaccrual     4,480       7,038   -36.3 %     4,285    
  Total Nonaccrual Loans   6,695     13,565   -50.6 %   6,667    
  90+ Days Past Due Accruing Loans   186     356   -47.8 %   373    
  Total   6,881     13,921   -50.6 %   7,040    
  Repossessed Loan Collateral (1)   1,645     4,162   -60.5 %   2,136    
   Total Nonperforming Assets (1) $ 8,526   $ 18,083   -52.8 % $ 9,176    
             
  Total Loans Outstanding  $ 1,318,341   $ 1,429,560   -7.8 % $ 1,351,090    
             
  Total Assets  $ 5,393,350   $ 5,179,085   4.1 % $ 5,395,947    
             
  Loans:          
  Allowance for Loan Losses $ 24,103   $ 28,910   -16.6 % $ 24,919    
  Allowance/Loans   1.83 %   2.02 %     1.84 %  
  Nonperforming Loans/Total Loans   0.52 %   0.97 %     0.52 %  
             
10. Capital.          
    (in thousands, except per-share amounts)  
        %    
    6/30/17 6/30/16 Change 3/31/17  
             
  Shareholders' Equity $ 595,594   $ 558,327   6.7 % $ 584,888    
  Total Assets   5,393,350     5,179,085   4.1 %   5,395,947    
             
  Shareholders' Equity/          
    Total Assets   11.04 %   10.78 %     10.84 %  
  Shareholders' Equity/          
    Total Loans   45.18 %   39.06 %     43.29 %  
  Tangible Common Equity Ratio   8.90 %   8.48 %     8.68 %  
  Common Shares Outstanding   26,304     25,632   2.6 %   26,283    
  Common Equity Per Share $ 22.64   $ 21.78   3.9 % $ 22.25    
  Market Value Per Common Share $ 56.04   $ 49.26   13.8 % $ 55.83    
             
  Share Repurchase Programs          
    (shares in thousands)  
        %    
    Q2'17 Q2'16 Change Q1'17  
             
  Total Shares Repurchased     6     7   n/m       -    
    Average Repurchase Price $ 56.51   $ 49.35   n/m   $ -    
  Net Shares Issued   (21 )   (194 ) n/m     (376 )  
             
        %    
    06/30'17YTD 06/30'16YTD Change    
             
  Total Shares Repurchased   6     137   n/m      
    Average Repurchase Price $ 56.51   $ 41.94   n/m      
  Net Shares Issued   (397 )   (104 ) n/m      
             
11. Period-End Balance Sheets.          
    (unaudited, dollars in thousands)  
        %    
    6/30/17 6/30/16 Change 3/31/17  
  Assets:          
    Cash and Due from Banks $ 529,362   $ 441,785   19.8 % $ 546,815    
             
    Investment Securities:          
      Available For Sale   1,976,156     1,531,035   29.1 %   1,893,309    
      Held to Maturity   1,261,321     1,473,357   -14.4 %   1,298,414    
             
    Loans   1,318,341     1,429,560   -7.8 %   1,351,090    
    Allowance For Loan Losses   (24,103 )   (28,910 ) -16.6 %   (24,919 )  
    Total Loans, net   1,294,238     1,400,650   -7.6 %   1,326,171    
             
    Other Real Estate Owned   1,645     4,162   -60.5 %   2,136    
    Premises and Equipment, net   35,564     37,759   -5.8 %   36,025    
    Identifiable Intangibles, net   5,365     8,656   -38.0 %   6,127    
    Goodwill    121,673     121,673   0.0 %   121,673    
    Other Assets   168,026     160,008   5.0 %   165,277    
             
  Total Assets $ 5,393,350   $ 5,179,085   4.1 % $ 5,395,947    
             
  Liabilities and Shareholders' Equity:          
    Deposits:          
      Noninterest Bearing $ 2,079,608   $ 1,978,947   5.1 % $ 2,046,390    
      Interest-Bearing Transaction   885,516     827,857   7.0 %   905,588    
      Savings   1,470,978     1,404,840   4.7 %   1,494,854    
      Time   246,468     273,670   -9.9 %   251,141    
    Total Deposits   4,682,570     4,485,314   4.4 %   4,697,973    
             
    Short-Term Borrowed Funds   75,769     67,852   11.7 %   73,611    
    Other Liabilities   39,417     67,592   -41.7 %   39,475    
  Total Liabilities   4,797,756     4,620,758   3.8 %   4,811,059    
             
  Shareholders' Equity:          
    Common Equity:          
      Paid-In Capital   426,012     391,213   8.9 %   424,203    
      Accumulated Other          
        Comprehensive (Loss) Income   (5,864 )   11,885   n/m     (9,443 )  
      Retained Earnings   175,446     155,229   13.0 %   170,128    
  Total Shareholders' Equity   595,594     558,327   6.7 %   584,888    
             
  Total Liabilities and           
    Shareholders' Equity $ 5,393,350   $ 5,179,085   4.1 % $ 5,395,947    
             
12. Income Statements.          
    (unaudited, in thousands except per-share amounts)  
        %    
    Q2'17 Q2'16 Change Q1'17  
  Interest & Fee Income:          
    Loans $ 15,468   $ 17,583   -12.0 % $ 15,780    
    Investment Securities:          
      Available for Sale   10,709     8,091   32.4 %   10,249    
      Held to Maturity   6,986     8,053   -13.3 %   7,295    
  Total Interest & Fee Income   33,163     33,727   -1.7 %   33,324    
             
  Interest Expense:          
    Transaction Deposits   57     67   -14.9 %   57    
    Savings Deposits   222     225   -1.2 %   223    
    Time Deposits   186     239   -22.5 %   189    
    Short-Term Borrowed Funds   11     10   12.3 %   11    
  Total Interest Expense   476     541   -12.1 %   480    
             
  Net Interest Income   32,687     33,186   -1.5 %   32,844    
             
  (Reversal of) Provision for Loan Losses     (1,900 )     -   n/m       -    
             
  Noninterest Income:          
    Service Charges    4,945     5,239   -5.6 %   4,923    
    Merchant Processing Services   2,052     1,638   25.3 %   1,875    
    Debit Card Fees   1,586     1,621   -2.1 %   1,481    
    Other Service Fees   662     650   1.8 %   650    
    ATM Processing Fees   654     603   8.6 %   575    
    Trust Fees   716     657   8.9 %   702    
    Financial Services Commissions   142     137   3.6 %   195    
    Other   1,366     1,157   18.0 %   1,256    
  Total Noninterest Income   12,123     11,702   3.6 %   11,657    
             
  Noninterest Expense:          
    Salaries and  Benefits   12,981     12,887   0.7 %   13,070    
    Occupancy    3,509     3,400   3.2 %   3,633    
    Outsourced Data Processing   2,188     2,130   2.7 %   2,139    
    Amortization of Identifiable Intangibles   762     870   -12.4 %   800    
    Professional Fees   410     758   -45.9 %   611    
    Furniture & Equipment   1,267     1,187   6.8 %   1,254    
    Other Real Estate Owned   (126 )   (392 ) n/m     (40 )  
    Courier Service   438     462   -5.2 %   421    
    Other   2,967     3,927   -24.4 %   2,727    
  Total Noninterest Expense   24,396     25,229   -3.3 %   24,615    
             
  Income Before Income Taxes   22,314     19,659   13.5 %   19,886    
  Income Tax Provision   6,515     5,113   27.4 %   4,837    
  Net Income $ 15,799   $ 14,546   8.6 % $ 15,049    
             
  Average Common Shares Outstanding   26,299     25,586   2.8 %   26,171    
  Diluted Common Shares Outstanding   26,402     25,630   3.0 %   26,329    
             
  Per Common Share Data:          
    Basic Earnings $ 0.60   $ 0.57   5.3 % $ 0.58    
    Diluted Earnings   0.60     0.57   5.3 %   0.57    
    Dividends Paid   0.39     0.39   0.0 %   0.39    
             
        %    
    06/30'17YTD 06/30'16YTD Change    
  Interest & Fee Income:          
    Loans $ 31,248   $ 35,936   -13.0 %    
    Investment Securities:          
      Available for Sale   20,958     16,058   30.5 %    
      Held to Maturity   14,281     15,380   -7.1 %    
  Total Interest & Fee Income   66,487     67,374   -1.3 %    
             
  Interest Expense:          
    Transaction Deposits   114     137   -16.7 %    
    Savings Deposits   445     448   -0.5 %    
    Time Deposits   375     489   -23.4 %    
    Short-Term Borrowed Funds   22     19   12.2 %    
  Total Interest Expense   956     1,093   -12.5 %    
             
  Net Interest Income   65,531     66,281   -1.1 %    
             
  (Reversal of) Provision for Loan Losses     (1,900 )     -   n/m      
             
  Noninterest Income:          
    Service Charges    9,868     10,487   -5.9 %    
    Merchant Processing Services   3,927     3,167   24.0 %    
    Debit Card Fees   3,067     3,137   -2.2 %    
    Other Service Fees   1,312     1,279   2.5 %    
    ATM Processing Fees   1,229     1,261   -2.5 %    
    Trust Fees   1,418     1,318   7.6 %    
    Financial Services Commissions   337     293   15.0 %    
    Other   2,622     2,489   5.3 %    
  Total Noninterest Income   23,780     23,431   1.5 %    
             
  Noninterest Expense:          
    Salaries and  Benefits   26,051     26,004   0.2 %    
    Occupancy    7,142     6,798   5.1 %    
    Outsourced Data Processing   4,327     4,260   1.6 %    
    Amortization of Identifiable Intangibles   1,562     1,775   -12.0 %    
    Professional Fees   1,021     1,490   -31.4 %    
    Furniture & Equipment   2,521     2,400   5.1 %    
    Other Real Estate Owned   (166 )   (281 ) n/m      
    Courier Service   859     1,007   -14.7 %    
    Other   5,694     7,634   -25.4 %    
  Total Noninterest Expense   49,011     51,087   -4.1 %    
             
  Income Before Income Taxes   42,200     38,625   9.3 %    
  Income Tax Provision   11,352     9,853   15.2 %    
  Net Income $ 30,848   $ 28,772   7.2 %    
             
  Average Common Shares Outstanding   26,235     25,516   2.8 %    
  Diluted Common Shares Outstanding   26,366     25,549   3.2 %    
             
  Per Common Share Data:          
  Basic Earnings $ 1.18   $ 1.13   4.4 %    
  Diluted Earnings   1.17     1.13   3.5 %    
  Dividends Paid   0.78     0.78   0.0 %    
             
  Footnotes and Abbreviations:          
             
  (FTE) Fully Taxable Equivalent. The Company presents its net interest margin and net interest income on a FTE basis using the current statutory federal tax rate.  Management believes the FTE basis is valuable to the reader because the Company's loan and investment securities portfolios contain a relatively large portion of municipal loans and securities that are federally tax exempt.  The Company's tax exempt loans and securities composition may not be similar to that of other banks, therefore in order to reflect the impact of the federally tax exempt loans and securities on the net interest margin and net interest income for comparability with other banks, the Company presents its net interest margin and net interest income on a FTE basis.    
  (a) Annualized          
  (1) All originated and purchased non performing loans and repossessed loan collateral have been combined as of Q1 '17.  Prior period presentation has been updated, accordingly.    
             

 

 

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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