Westamerica Bancorporation Reports Second Quarter 2019 Financial Results

Published

SAN RAFAEL, Calif., July 18, 2019 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the second quarter 2019 of $19.6 million and diluted earnings per common share ("EPS") of $0.73. These results compare to net income of $19.6 million and EPS of $0.73 for the first quarter 2019 and net income of $18.0 million and EPS of $0.67 for the second quarter 2018. "Net interest margin remained stable and operating costs continued to be well controlled during the second quarter 2019.  Net interest margin was 3.13 percent for the second quarter 2019 compared to 3.12 percent for the first quarter 2019.  Operating expenses represented 49 percent of revenues, on a fully-taxable equivalent basis, for both the first and second quarters of 2019.  Asset quality improved with nonperforming assets totaling only $4.1 million at June 30, 2019 compared to $4.4 million at March 31, 2019, and $6.0 million at June 30, 2018,” said Chairman, President and CEO David Payne. “Second quarter 2019 results generated an annualized 11.7 percent return on average common equity, and the Board of Directors approved an increase in the quarterly cash dividend to $0.41 per share in April 2019,” concluded Payne. Net interest income on a fully-taxable equivalent (FTE) basis was $40.3 million for the second quarter 2019, compared to $40.2 million for the first quarter 2019 and $38.3 million for the second quarter 2018. The annualized net interest margin (FTE) was 3.13 percent for the second quarter 2019, compared to 3.12 percent for the first quarter 2019 and 2.97 percent for the second quarter 2018. Checking and savings deposits, which are less sensitive to changes in interest rates than time deposits, represented ninety-six percent of the Company’s average deposit base during the second quarter 2019. The Company recognized no provision for loan losses for the second quarter 2019 given low levels of nonperforming loans and other credit quality attributes. Noninterest income for the second quarter 2019 totaled $12.3 million, compared to $11.6 million for the first quarter 2019, and $11.8 million for the second quarter 2018.  Second quarter 2019 noninterest income included a life insurance gain of $433 thousand.    Noninterest expense for the second quarter 2019 totaled $25.6 million, compared to $25.2 million for the first quarter 2019 and $25.7 million for the second quarter 2018.  Noninterest expense for the second quarter 2019 was $378 thousand higher than noninterest expense for the first quarter 2019, primarily due to $553 thousand in loss contingencies.  The loss contingencies include a $301 thousand increase in estimated customer refunds of revenue recognized prior to 2018 and a $252 thousand settlement to dismiss a lawsuit.  Although loss contingencies represent estimated liabilities, which are subject to revision, the Company does not anticipate additional losses for either of these matters.       The tax rate for the second quarter 2019 was 27.5 percent on a FTE basis and 24.1 percent on a non-FTE basis.  In the second quarter 2019, the Company established a $269 thousand valuation allowance against certain deferred tax assets, which, combined with the tax-exempt nature of the life insurance gains and excess tax benefits of $83 thousand from stock options, increased the tax rate on an FTE and non-FTE basis by 0.3 percent.   Westamerica Bancorporation’s wholly owned subsidiary Westamerica Bank, operates commercial banking and trust offices throughout Northern and Central California. Westamerica Bancorporation Web Address: www.westamerica.com For additional information contact:Westamerica Bancorporation1108 Fifth Avenue, San Rafael, CA 94901Robert A. Thorson – SVP & Chief Financial Officer707-863-6840investments@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, 2018 filed on Form 10-K and quarterly report for the quarter ended March 31, 2019 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, cyber security risks, 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 18, 2019 WESTAMERICA BANCORPORATION   FINANCIAL HIGHLIGHTS    June 30, 2019          1. Net Income Summary.      (in thousands except per-share amounts)    %   Q2'2019Q2'2018ChangeQ1'2019       Net Interest and Fee Income (FTE)$40,330 $38,349 5.2%$40,247  Provision for Loan Losses   -    - n/m   -  Noninterest Income 12,288  11,769 4.4% 11,579  Noninterest Expense 25,561  25,741 -0.7% 25,183  Income Before Taxes (FTE) 27,057  24,377 11.0% 26,643  Income Tax Provision (FTE) 7,432  6,367 16.7% 6,997  Net Income$19,625 $18,010 9.0%$19,646        Average Common Shares Outstanding 26,942  26,630 1.2% 26,841  Diluted Average Common Shares 26,987  26,728 1.0% 26,912        Operating Ratios:     Basic Earnings Per Common Share$0.73 $0.68 7.1%$0.73  Diluted Earnings Per Common Share$0.73  0.67 8.5% 0.73  Return On Assets (a) 1.42% 1.29%  1.42% Return On Common Equity (a) 11.7% 11.6%  12.2% Net Interest Margin (FTE) (a) 3.13% 2.97%  3.12% Efficiency Ratio (FTE) 48.6% 51.4%  48.6%       Dividends Paid Per Common Share$0.41 $0.40 2.5%$0.40  Common Dividend Payout Ratio    56% 60%  55%          %   6/30'19YTD6/30'18YTDChange        Net Interest and Fee Income (FTE)$80,577 $75,624 6.5%  Provision for Loan Losses   -    - n/m  Noninterest Income 23,867  23,724 0.6%  Noninterest Expense 50,744  51,763 -2.0%  Income Before Taxes (FTE) 53,700  47,585 12.9%  Income Tax Provision (FTE) 14,429  12,069 19.6%  Net Income$39,271 $35,516 10.6%        Average Common Shares Outstanding 26,892  26,581 1.2%  Diluted Average Common Shares 26,950  26,696 1.0%        Operating Ratios:     Basic Earnings Per Common Share$1.46 $1.34 9.0%  Diluted Earnings Per Common Share 1.46  1.33 9.8%  Return On Assets (a) 1.42% 1.28%   Return On Common Equity (a) 12.0% 11.6%   Net Interest Margin (FTE) (a) 3.12% 2.93%   Efficiency Ratio (FTE) 48.6% 52.1%         Dividends Paid Per Common Share$0.81 $0.80 1.3%  Common Dividend Payout Ratio    55% 60%        2. Net Interest Income.      (dollars in thousands)    %   Q2'2019Q2'2018ChangeQ1'2019       Interest and Fee Income (FTE)$40,817 $38,808 5.2%$40,741  Interest Expense 487  459 6.1% 494  Net Interest and Fee Income (FTE)$40,330 $38,349 5.2%$40,247        Average Earning Assets$5,159,112 $5,180,524 -0.4%$5,184,978  Average Interest-     Bearing Liabilities 2,646,681  2,729,671 -3.0% 2,689,684        Yield on Earning Assets (FTE) (a) 3.17% 3.01%  3.16% Cost of Funds (a) 0.04% 0.04%  0.04% Net Interest Margin (FTE) (a) 3.13% 2.97%  3.12% Interest Expense/     Interest-Bearing Liabilities (a) 0.08% 0.07%  0.08% Net Interest Spread (FTE) (a) 3.09% 2.94%  3.08%          %   6/30'19YTD6/30'18YTDChange        Interest and Fee Income (FTE)$81,558 $76,542 6.6%  Interest Expense 981  918 6.9%  Net Interest and Fee Income (FTE)$80,577 $75,624 6.5%        Average Earning Assets$5,171,973 $5,171,312 0.0%  Average Interest-     Bearing Liabilities 2,668,063  2,731,936 -2.3%        Yield on Earning Assets (FTE) (a) 3.16% 2.97%   Cost of Funds (a) 0.04% 0.04%   Net Interest Margin (FTE) (a) 3.12% 2.93%   Interest Expense/     Interest-Bearing Liabilities (a) 0.08% 0.07%   Net Interest Spread (FTE) (a) 3.08% 2.90%        3. Loans & Other Earning Assets.      (average volume, dollars in thousands)    %   Q2'2019Q2'2018ChangeQ1'2019       Total Assets$5,560,740 $5,587,871 -0.5%$5,611,762  Total Earning Assets 5,159,112  5,180,524 -0.4% 5,184,978  Total Loans 1,183,539  1,209,049 -2.1% 1,205,656  Commercial Loans 262,804  295,971 -11.2% 281,465  Commercial RE Loans  582,126  550,427 5.8% 580,178  Consumer Loans 338,609  362,651 -6.6% 344,013  Total Investment Securities 3,648,436  3,543,838 3.0% 3,689,852  Equity Securities 1,772  1,763 0.5% 1,748  Debt Securities Available For Sale 2,750,093  2,444,582 12.5% 2,734,658  Debt Securities Held To Maturity 896,571  1,097,493 -18.3% 953,446  Total Interest-Bearing Cash 327,137  427,637 -23.5% 289,470        Loans/Deposits 24.9% 24.9%  24.9%          %   6/30'19YTD6/30'18YTDChange        Total Assets$5,586,110 $5,576,352 0.2%  Total Earning Assets 5,171,973  5,171,312 0.0%  Total Loans 1,194,536  1,226,304 -2.6%  Commercial Loans 272,083  306,102 -11.1%  Commercial RE Loans  581,157  553,215 5.1%  Consumer Loans 341,296  366,987 -7.0%  Total Investment Securities 3,669,029  3,511,828 4.5%  Equity Securities 1,760  1,877 -6.3%  Debt Securities Available For Sale 2,742,418  2,393,283 14.6%  Debt Securities Held To Maturity 924,851  1,116,668 -17.2%  Total Interest-Bearing Cash 308,408  433,180 -28.8%        Loans/Deposits 24.9% 25.3%        4. Deposits, Other Interest-Bearing Liabilities & Equity.    (average volume, dollars in thousands)    %   Q2'2019Q2'2018ChangeQ1'2019       Total Deposits$4,762,286 $4,846,986 -1.7%$4,834,690  Noninterest Demand  2,172,207  2,177,708 -0.3% 2,204,232  Interest-Bearing Transaction 945,128  924,542 2.2% 946,458  Savings 1,459,287  1,523,024 -4.2% 1,492,100  Time greater than $100K 80,120  99,955 -19.8% 82,796  Time less than $100K 105,544  121,757 -13.3% 109,104  Total Short-Term Borrowings 56,602  60,393 -6.3% 59,226  Shareholders' Equity 669,947  625,409 7.1% 655,380        Demand Deposits/     Total Deposits 45.6% 44.9%  45.6% Transaction & Savings      Deposits / Total Deposits 96.1% 95.4%  96.0%          %   6/30'19YTD6/30'18YTDChange        Total Deposits$4,798,288 $4,837,721 -0.8%  Noninterest Demand  2,188,131  2,167,226 1.0%  Interest-Bearing Transaction 945,789  925,034 2.2%  Savings 1,475,603  1,520,540 -3.0%  Time greater than $100K 81,451  101,541 -19.8%  Time less than $100K 107,314  123,380 -13.0%  Total Short-Term Borrowings 57,906  61,441 -5.8%  Shareholders' Equity 662,704  619,666 6.9%        Demand Deposits/     Total Deposits 45.6% 44.8%   Transaction & Savings      Deposits / Total Deposits 96.1% 95.4%        5. Interest Yields Earned & Rates Paid.     (dollars in thousands)   Q2'2019   AverageIncome/Yield (a) /   VolumeExpenseRate        Interest & Fee Income Earned     Total Earning Assets (FTE)$5,159,112 $40,817 3.17%  Total Loans (FTE)   1,183,539  14,929 5.06%  Commercial Loans (FTE) 262,804  3,561 5.43%  Commercial RE Loans  582,126  7,709 5.31%  Consumer Loans 338,609  3,659 4.33%  Total Investments (FTE) 3,648,436  23,930 2.62%  Total Interest-Bearing Cash 327,137  1,958 2.37%        Interest Expense Paid     Total Earning Assets  5,159,112  487 0.04%  Total Interest-Bearing Liabilities 2,646,681  487 0.08%  Total Interest-Bearing Deposits 2,590,079  478 0.07%  Interest-Bearing Transaction 945,128  119 0.05%  Savings 1,459,287  212 0.06%  Time less than $100K 105,544  65 0.25%  Time greater than $100K 80,120  82 0.41%  Total Short-Term Borrowings  56,602  9 0.06%        Net Interest Income and      Margin (FTE) $40,330 3.13%         Q2'2018   AverageIncome/Yield (a) /   VolumeExpenseRate        Interest & Fee Income Earned     Total Earning Assets (FTE)$5,180,524 $38,808 3.01%  Total Loans (FTE) 1,209,049  15,081 5.00%  Commercial Loans (FTE) 295,971  3,804 5.16%  Commercial RE Loans  550,427  7,804 5.69%  Consumer Loans 362,651  3,473 3.84%  Total Investments (FTE) 3,543,838  21,963 2.48%  Total Interest-Bearing Cash 427,637  1,764 1.77%        Interest Expense Paid     Total Earning Assets  5,180,524  459 0.04%  Total Interest-Bearing Liabilities 2,729,671  459 0.07%  Total Interest-Bearing Deposits 2,669,278  449 0.07%  Interest-Bearing Transaction 924,542  60 0.03%  Savings 1,523,024  224 0.06%  Time less than $100K 121,757  70 0.23%  Time greater than $100K 99,955  95 0.38%  Total Short-Term Borrowings  60,393  10 0.06%        Net Interest Income and     Margin (FTE) $38,349 2.97%       6. Noninterest Income.      (dollars in thousands except per-share amounts)    %   Q2'2019Q2'2018ChangeQ1'2019       Service Charges on Deposits$4,493 $4,645 -3.3%$4,504  Merchant Processing Services 2,657  2,305 15.2% 2,558  Debit Card Fees 1,641  1,698 -3.4% 1,507  Other Service Fees 585  650 -10.0% 577  ATM Processing Fees 722  698 3.4% 633  Trust Fees 749  726 3.2% 717  Life Insurance Gains   433    - n/m   -  Financial Services Commissions 93  141 -34.1% 101  Equity Securities Gains (Losses) 26    (14)n/m   24  Other Income 889  920 -3.4% 958  Total Noninterest Income$12,288 $11,769 4.4%$11,579        Total Revenue (FTE)$52,618 $50,118 5.0%$51,826  Noninterest Income/Revenue (FTE) 23.4% 23.5%  22.3% Service Charges/Avg. Deposits (a) 0.38% 0.38%  0.38% Total Revenues (FTE) Per Avg.      Common Share (a)$7.83 $7.55 3.8%$7.83           %   6/30'19YTD6/30'18YTDChange        Service Charges on Deposits$8,997 $9,397 -4.3%  Merchant Processing Services 5,215  4,725 10.4%  Debit Card Fees 3,148  3,303 -4.7%  Other Service Fees 1,162  1,281 -9.3%  ATM Processing Fees 1,355  1,362 -0.5%  Trust Fees 1,466  1,469 -0.1%  Life Insurance Gains 433    - n/m  Financial Services Commissions 194  255 -23.7%  Equity Securities Gains (Losses) 50    (50)n/m  Other Income 1,847  1,982 -6.8%  Total Noninterest Income$23,867 $23,724 0.6%        Total Revenue (FTE)$104,444 $99,348 5.1%  Noninterest Income/Revenue (FTE) 22.9% 23.9%   Service Charges/Avg. Deposits (a) 0.38% 0.39%   Total Revenues (FTE) Per Avg.      Common Share (a)$7.83 $7.54 3.9%       7. Noninterest Expense.      (dollars in thousands)    %   Q2'2019Q2'2018ChangeQ1'2019       Salaries & Benefits$13,090 $13,186 -0.7%$13,108  Occupancy and Equipment 4,916  4,864 1.1% 5,048  Loss Contingency (1)   553    - n/m   -  Outsourced Data Processing 2,367  2,299 3.0% 2,369  Amortization of      Identifiable Intangibles 79  453 -82.5% 310  Professional Fees 481  871 -44.8% 665  Courier Service 451  422 6.9% 442  Other Operating 3,624  3,646 -0.6% 3,241  Total Noninterest Expense$25,561 $25,741 -0.7%$25,183        Noninterest Expense/     Avg. Earning Assets (a) 1.99% 1.99%  1.97% Noninterest Expense/Revenues (FTE) 48.6% 51.4%  48.6%          %   6/30'19YTD6/30'18YTDChange        Salaries & Benefits$26,198 $26,537 -1.3%  Occupancy and Equipment 9,964  9,555 4.3%  Outsourced Data Processing 4,736  4,639 2.1%  Loss Contingency (1) 553    - n/m  Amortization of      Identifiable Intangibles 389  1,023 -62.0%  Professional Fees 1,146  1,656 -30.8%  Courier Service 893  885 0.9%  Other Operating 6,865  7,468 -8.1%  Total Noninterest Expense$50,744 $51,763 -2.0%        Noninterest Expense/     Avg. Earning Assets (a) 1.98% 2.02%   Noninterest Expense/Revenues (FTE) 48.6% 52.1%        8. Allowance for Loan Losses.      (dollars in thousands)    %   Q2'2019Q2'2018ChangeQ1'2019       Average Total Loans$1,183,539 $1,209,049 -2.1%$1,205,656        Allowance for Loan Loss (ALL)     Beginning of Period $20,477 $23,081 -11.3%$21,351  Provision for Loan Losses      -    - n/m   -  Net ALL Losses (360) (41)n/m (874) ALL End of Period$20,117 $23,040 -12.7%$20,477  Gross ALL Recoveries / Gross ALL Losses    63% 95%  37%       Net ALL Losses / Avg. Total Loans (a) 0.12% 0.01%  0.29%    %   6/30'19YTD6/30'18YTDChange        Average Total Loans$1,194,536 $1,226,304 -2.6%        Allowance for Loan Loss (ALL)     Beginning of Period $21,351 $23,009 -7.2%  Provision for Loan Losses      -    - n/m  Net ALL (Losses) Recoveries (1,234) 31 n/m  ALL End of Period$20,117 $23,040 -12.7%  Gross ALL Recoveries / Gross ALL Losses    48% 101%         Net ALL Losses (Recoveries) /      Avg. Total Loans (a)  0.21% -0.01%        9. Credit Quality.      (dollars in thousands)    %   6/30/196/30/18Change3/31/19       Nonperforming Loans:     Nonperforming Nonaccrual$177 $783 -77.4%$330  Performing Nonaccrual   3,670    4,110 -10.7%   3,670  Total Nonaccrual Loans 3,847  4,893 -21.4% 4,000  90+ Days Past Due Accruing Loans 249  193 29.0% 394  Total 4,096  5,086 -19.5% 4,394  Repossessed Loan Collateral  43  939 -95.4% 43  Total Nonperforming Assets$4,139 $6,025 -31.3%$4,437        Total Loans Outstanding $1,161,712 $1,200,192 -3.2%$1,204,844        Total Assets $5,523,448 $5,577,844 -1.0%$5,555,961        Loans:     Allowance for Loan Losses$20,117 $23,040 -12.7%$20,477  Allowance/Loans 1.73% 1.92%  1.70% Nonperforming Loans/Total Loans 0.35% 0.42%  0.36%      10. Capital.      (in thousands, except per-share amounts)    %   6/30/196/30/18Change3/31/19       Shareholders' Equity$693,437 $586,138 18.3%$656,767  Total Assets 5,523,448  5,577,844 -1.0% 5,555,961        Shareholders' Equity/     Total Assets 12.55% 10.51%  11.82% Shareholders' Equity/     Total Loans 59.69% 48.84%  54.51% Tangible Common Equity Ratio 10.56% 8.47%  9.82% Common Shares Outstanding 26,962  26,649 1.2% 26,901  Common Equity Per Share$25.72 $21.99 16.9%$24.41  Market Value Per Common Share$61.61 $56.51 9.0%$61.80        Share Repurchase Programs      (shares in thousands)    %   Q2'2019Q2'2018ChangeQ1'2019       Total Shares Repurchased   8    9 n/m   -  Average Repurchase Price$61.98 $58.46 n/m$-  Net Shares Issued   (61) (58)n/m (171)          %   6/30'19YTD6/30'18YTDChange        Total Shares Repurchased   8    9 n/m  Average Repurchase Price$61.98 $58.46 n/m  Net Shares Issued (232) (224)n/m       11. Period-End Balance Sheets.      (unaudited, dollars in thousands)    %   6/30/196/30/18Change3/31/19 Assets:     Cash and Due from Banks$418,586 $629,146 -33.5%$421,788        Investment Securities:     Equity Securities 1,797  1,750 2.7% 1,771  Debt Securities Available For Sale 2,775,899  2,363,194 17.5% 2,702,240  Debt Securities Held to Maturity 867,989  1,076,456 -19.4% 923,190        Loans 1,161,712  1,200,192 -3.2% 1,204,844  Allowance For Loan Losses (20,117) (23,040)-12.7% (20,477) Total Loans, net 1,141,595  1,177,152 -3.0% 1,184,367        Other Real Estate Owned 43  939 -95.4% 43  Premises and Equipment, net 34,014  35,774 -4.9% 33,934  Identifiable Intangibles, net 1,540  2,827 -45.5% 1,619  Goodwill  121,673  121,673 0.0% 121,673  Other Assets 160,312  168,933 -5.1% 165,336        Total Assets$5,523,448 $5,577,844 -1.0%$5,555,961        Liabilities and Shareholders' Equity:     Deposits:     Noninterest-Bearing$2,163,841 $2,205,971 -1.9%$2,179,803  Interest-Bearing Transaction 942,140  939,002 0.3% 941,379  Savings 1,442,552  1,526,228 -5.5% 1,482,187  Time 181,729  215,921 -15.8% 189,215  Total Deposits 4,730,262  4,887,122 -3.2% 4,792,584        Short-Term Borrowed Funds 54,581  68,894 -20.8% 58,317  Other Liabilities 45,168  35,690 26.6% 48,293  Total Liabilities 4,830,011  4,991,705 -3.2% 4,899,194        Shareholders' Equity:     Common Equity:     Paid-In Capital 460,140  444,871 3.4% 456,075  Accumulated Other     Comprehensive Income (Loss) 13,124  (49,900)n/m (11,249) Retained Earnings 220,173  191,167 15.2% 211,941  Total Shareholders' Equity 693,437  586,138 18.3% 656,767        Total Liabilities and      Shareholders' Equity$5,523,448 $5,577,844 -1.0%$5,555,961       12. Income Statements.      (unaudited, in thousands except per-share amounts)    %   Q2'2019Q2'2018ChangeQ1'2019 Interest & Fee Income:     Loans$14,822 $14,957 -0.9%$14,797  Investment Securities:     Equity Securities 99  86 15.3% 98  Debt Securities Available for Sale 17,823  14,323 24.4% 17,521  Debt Securities Held to Maturity 4,924  6,216 -20.8% 5,329  Interest-Bearing Cash 1,958  1,764 11.0% 1,738  Total Interest & Fee Income 39,626  37,346 6.1% 39,483        Interest Expense:     Transaction Deposits 119  60 97.6% 121  Savings Deposits 212  224 -5.5% 216  Time Deposits 147  165 -10.7% 148  Short-Term Borrowed Funds 9  10 -3.8% 9  Total Interest Expense 487  459 6.3% 494        Net Interest Income 39,139  36,887 6.1% 38,989        Provision for Loan Losses   -    - n/m   -        Noninterest Income:     Service Charges  4,493  4,645 -3.3% 4,504  Merchant Processing Services 2,657  2,305 15.2% 2,558  Debit Card Fees 1,641  1,698 -3.4% 1,507  Other Service Fees 585  650 -10.0% 577  ATM Processing Fees 722  698 3.4% 633  Trust Fees 749  726 3.2% 717  Life Insurance Gains   433    - n/m   -  Financial Services Commissions 93  141 -34.1% 101  Equity Securities Gains (Losses) 26    (14)n/m   24  Other 889  920 -3.4% 958  Total Noninterest Income 12,288  11,769 4.4% 11,579        Noninterest Expense:     Salaries and  Benefits 13,090  13,186 -0.7% 13,108  Occupancy and Equipment 4,916  4,864 1.1% 5,048  Loss Contingency (1)   553    - n/m   -  Outsourced Data Processing 2,367  2,299 3.0% 2,369  Amortization of Identifiable Intangibles 79  453 -82.5% 310  Professional Fees 481  871 -44.8% 665  Courier Service 451  422 6.9% 442  Other 3,624  3,646 -0.6% 3,241  Total Noninterest Expense 25,561  25,741 -0.7% 25,183        Income Before Income Taxes 25,866  22,915 12.9% 25,385  Income Tax Provision 6,241  4,905 27.2% 5,739  Net Income$19,625 $18,010 9.0%$19,646        Average Common Shares Outstanding 26,942  26,630 1.2% 26,841  Diluted Common Shares Outstanding 26,987  26,728 1.0% 26,912        Per Common Share Data:     Basic Earnings$0.73 $0.68 7.4%$0.73  Diluted Earnings 0.73  0.67 9.0% 0.73  Dividends Paid 0.41  0.40 2.5% 0.40     %   6/30'19YTD6/30'18YTDChange  Interest & Fee Income:     Loans$29,619 $29,654 -0.1%  Investment Securities:     Equity Securities 197  171 15.3%  Debt Securities Available for Sale 35,344  27,874 26.8%  Debt Securities Held to Maturity 10,253  12,390 -17.2%  Interest-Bearing Cash 3,696  3,572 3.5%  Total Interest & Fee Income 79,109  73,661 7.4%        Interest Expense:     Transaction Deposits 240  120 100.0%  Savings Deposits 428  446 -4.1%  Time Deposits 295  333 -11.3%  Short-Term Borrowed Funds 18  19 -1.8%  Total Interest Expense 981  918 6.9%        Net Interest Income 78,128  72,743 7.4%        Provision for Loan Losses   -    - n/m        Noninterest Income:     Service Charges  8,997  9,397 -4.3%  Merchant Processing Services 5,215  4,725 10.4%  Debit Card Fees 3,148  3,303 -4.7%  Other Service Fees 1,162  1,281 -9.3%  ATM Processing Fees 1,355  1,362 -0.5%  Trust Fees 1,466  1,469 -0.1%  Life Insurance Gains 433    - n/m  Financial Services Commissions 194  255 -23.7%  Equity Securities Gains (Losses) 50    (50)n/m  Other 1,847  1,982 -6.8%  Total Noninterest Income 23,867  23,724 0.6%        Noninterest Expense:     Salaries and  Benefits 26,198  26,537 -1.3%  Occupancy and Equipment 9,964  9,555 4.3%  Outsourced Data Processing 4,736  4,639 2.1%  Loss Contingency (1) 553    - n/m  Amortization of Identifiable Intangibles 389  1,023 -62.0%  Professional Fees 1,146  1,656 -30.8%  Courier Service 893  885 0.9%  Other 6,865  7,468 -8.1%  Total Noninterest Expense 50,744  51,763 -2.0%        Income Before Income Taxes 51,251  44,704 14.6%  Income Tax Provision 11,980  9,188 30.4%  Net Income 39,271  35,516 10.6%        Average Common Shares Outstanding 26,892  26,581 1.2%  Diluted Common Shares Outstanding 26,950  26,696 1.0%        Per Common Share Data:     Basic Earnings$1.46 $1.34 9.0%  Diluted Earnings 1.46  1.33 9.8%  Dividends Paid 0.81  0.80 1.3%              Footnotes and Abbreviations:       (1) In the second quarter 2019, the Company recorded $553 thousand in loss contingencies.  The loss contingencies include a $301 thousand increase in estimated customer refunds of revenue recognized prior to 2018 and a $252 thousand loss settlement to dismiss a lawsuit.  Although loss contingencies represent estimated liabilities, which are subject to revision, the Company does not anticipate additional losses for either of these matters.   Certain amounts in prior periods have been reclassified to conform to the current presentation.   (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 Source: Westamerica Bancorporation

In This Story