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Westamerica Bancorporation Reports Second Quarter 2014 Earnings

SAN RAFAEL, Calif., July 15, 2014 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq:WABC), parent company of Westamerica Bank, generated net income for the second quarter 2014 of $15.2 million and diluted earnings per common share ("EPS") of $0.58. Second quarter 2014 results compare to net income of $15.3 million and EPS of $0.58 for the prior quarter, and net income of $17.1 million and EPS of $0.64 for the second quarter 2013.

"Westamerica's credit quality remained sound with nonperforming assets totaling $30 million at June 30, 2014, essentially unchanged from March 31, 2014. Our net loan losses remained below $1 million for the second consecutive quarter reflecting the improved quality of our loan portfolio. Our net interest margin was 3.76 percent in the second quarter, down from 3.83 percent in the prior quarter. Low market interest rates continued to pressure our net interest margin, particularly yields on the investment securities portfolio where we are purchasing shorter-duration, lower-yielding securities to prepare for rising interest rates. We are also focusing on managing our operating costs to efficient levels while providing superior customer service," said Chairman, President and CEO David Payne. "Our second quarter earnings delivered a relatively high annualized return on common equity of 11.6 percent for our shareholders, and we paid a $0.38 per share dividend during the quarter," concluded Payne.

Net interest income on a fully taxable equivalent ("FTE") basis was $38.6 million for the second quarter 2014, compared to $38.9 million for the prior quarter and $42.6 million for the second quarter 2013. Net interest income declined as market interest rates on many loan products remain below the yields earned on older-dated loans and on the overall loan portfolio. The Company is reducing its exposure to rising interest rates by purchasing shorter-duration investment securities which carry lower yields than longer-duration securities. The annualized interest cost of funding the Company's loans and investment securities was 0.09 percent for the second quarter 2014, unchanged from the prior quarter, and reduced from 0.12 percent for the second quarter 2013. The annualized net interest margin on a fully taxable equivalent basis was 3.76 percent for the second quarter 2014, compared to 3.83 percent for the prior quarter and 4.12 percent for the second quarter 2013.

The provision for loan losses was $1.0 million for the second quarter 2014, unchanged from $1.0 million for the prior quarter, and reduced from $1.8 million for the second quarter 2013. Net loan losses charged against the allowance for loan losses totaled $711 thousand for the second quarter 2014, compared to $584 thousand for the prior quarter and $1.2 million for the second quarter 2013. At June 30, 2014, the allowance for loan losses totaled $32.4 million; nonperforming originated loans totaled $7.1 million; and nonperforming purchased loans totaled $14.0 million, net of purchase discounts of $471 thousand.

Noninterest income for the second quarter 2014 totaled $13.2 million, compared to $13.0 million for the prior quarter and $14.3 million for the second quarter 2013. Noninterest income was higher in the second quarter 2013 due to higher service charges on deposit accounts and higher merchant processing service fees.

Noninterest expense for the second quarter 2014 totaled $27.0 million, compared to $26.9 million in the prior quarter and $28.2 million for the second quarter 2013. Noninterest expense was higher in the second quarter 2013 due to higher professional fees and higher costs related to repossessed loan collateral ("OREO").

At June 30, 2014, Westamerica Bancorporation's tangible common equity-to-asset ratio was 8.4 percent, assets totaled $4.9 billion and loans outstanding totaled $1.8 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, 2013 filed on Form 10-K and quarterly report for the quarter ended March 31, 2014 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.

WESTAMERICA BANCORPORATION
FINANCIAL HIGHLIGHTS
June 30, 2014
1. Net Income Summary.
(in thousands except per-share amounts)
%
Q2'14 Q2'13 Change Q1'14
Net Interest and Fee Income (FTE) $38,582 $42,628 -9.5% $38,864
Provision for Loan Losses 1,000 1,800 -44.4% 1,000
Noninterest Income 13,198 14,284 -7.6% 12,990
Noninterest Expense 26,957 28,192 -4.4% 26,873
Income Before Taxes (FTE) 23,823 26,920 -11.5% 23,981
Income Tax Provision (FTE) 8,666 9,808 -11.6% 8,674
Net Income $15,157 $17,112 -11.4% $15,307
Average Common Shares Outstanding 26,175 26,890 -2.7% 26,433
Diluted Average Common Shares 26,238 26,898 -2.5% 26,537
Operating Ratios:
Basic Earnings Per Common Share $0.58 $0.64 -9.4% $0.58
Diluted Earnings Per Common Share 0.58 0.64 -9.4% 0.58
Return On Assets (a) 1.24% 1.42% 1.27%
Return On Common Equity (a) 11.6% 12.7% 11.6%
Net Interest Margin (FTE) (a) 3.76% 4.12% 3.83%
Efficiency Ratio (FTE) 52.1% 49.5% 51.8%
Dividends Paid Per Common Share $0.38 $0.37 2.7% $0.38
Common Dividend Payout Ratio 66% 58% 66%
%
6/30'14YTD 6/30'13YTD Change
Net Interest and Fee Income (FTE) $77,446 $86,463 -10.4%
Provision for Loan Losses 2,000 4,600 -56.5%
Noninterest Income 26,188 28,562 -8.3%
Noninterest Expense 53,830 56,869 -5.3%
Income Before Taxes (FTE) 47,804 53,556 -10.7%
Income Tax Provision (FTE) 17,340 19,173 -9.6%
Net Income $30,464 $34,383 -11.4%
Average Common Shares Outstanding 26,303 27,017 -2.6%
Diluted Average Common Shares 26,387 27,027 -2.4%
Operating Ratios:
Basic Earnings Per Common Share $1.16 $1.27 -8.7%
Diluted Earnings Per Common Share 1.15 1.27 -9.4%
Return On Assets (a) 1.25% 1.42%
Return On Common Equity (a) 11.6% 12.8%
Net Interest Margin (FTE) (a) 3.79% 4.19%
Efficiency Ratio (FTE) 51.9% 49.4%
Dividends Paid Per Common Share $0.76 $0.74 2.7%
Common Dividend Payout Ratio 66% 58%
2. Net Interest Income.
(dollars in thousands)
%
Q2'14 Q2'13 Change Q1'14
Interest and Fee Income (FTE) $39,482 $43,847 -10.0% $39,762
Interest Expense 900 1,219 -26.2% 898
Net Interest and Fee Income (FTE) $38,582 $42,628 -9.5% $38,864
Average Earning Assets $4,114,811 $4,147,096 -0.8% $4,093,087
Average Interest-
Bearing Liabilities 2,530,030 2,613,978 -3.2% 2,534,251
Yield on Earning Assets (FTE) (a) 3.85% 4.24% 3.92%
Cost of Funds (a) 0.09% 0.12% 0.09%
Net Interest Margin (FTE) (a) 3.76% 4.12% 3.83%
Interest Expense/
Interest-Bearing Liabilities (a) 0.14% 0.19% 0.14%
Net Interest Spread (FTE) (a) 3.71% 4.05% 3.78%
%
6/30'14YTD 6/30'13YTD Change
Interest and Fee Income (FTE) $79,244 $88,934 -10.9%
Interest Expense 1,798 2,471 -27.2%
Net Interest and Fee Income (FTE) $77,446 $86,463 -10.4%
Average Earning Assets $4,104,009 $4,141,510 -0.9%
Average Interest-
Bearing Liabilities 2,532,129 2,639,046 -4.1%
Yield on Earning Assets (FTE) (a) 3.88% 4.31%
Cost of Funds (a) 0.09% 0.12%
Net Interest Margin (FTE) (a) 3.79% 4.19%
Interest Expense/
Interest-Bearing Liabilities (a) 0.14% 0.19%
Net Interest Spread (FTE) (a) 3.74% 4.12%
3. Loans & Other Earning Assets.
(average volume, dollars in thousands)
%
Q2'14 Q2'13 Change Q1'14
Total Assets $4,908,467 $4,840,319 1.4% $4,889,940
Total Earning Assets 4,114,811 4,147,096 -0.8% 4,093,087
Total Loans 1,802,041 1,994,361 -9.6% 1,822,065
Commercial Loans 397,549 382,632 3.9% 388,997
Commercial RE Loans 775,687 881,108 -12.0% 788,270
Consumer Loans 628,805 730,621 -13.9% 644,798
Total Investment Securities 2,312,770 2,152,735 7.4% 2,271,022
Available For Sale (Market) 1,222,987 1,001,151 22.2% 1,147,966
Held To Maturity 1,089,783 1,151,584 -5.4% 1,123,056
Unrealized Gain (Loss) 4,658 (9,669) n/m (6,502)
Loans/Deposits 42.5% 48.3% 43.3%
%
6/30'14YTD 6/30'13YTD Change
Total Assets $4,899,255 $4,874,212 0.5%
Total Earning Assets 4,104,009 4,141,510 -0.9%
Total Loans 1,811,998 2,035,944 -11.0%
Commercial Loans 393,297 393,701 -0.1%
Commercial RE Loans 781,944 892,908 -12.4%
Consumer Loans 636,757 749,335 -15.0%
Total Investment Securities 2,292,011 2,105,566 8.9%
Available For Sale (Market) 1,185,683 952,164 24.5%
Held To Maturity 1,106,328 1,153,402 -4.1%
Unrealized Gain (Loss) 4,658 (9,669) n/m
Loans/Deposits 42.9% 48.9%
4. Deposits, Other Interest-Bearing Liabilities & Equity.
(average volume, dollars in thousands)
%
Q2'14 Q2'13 Change Q1'14
Total Deposits $4,238,769 $4,132,509 2.6% $4,209,723
Noninterest Demand 1,799,994 1,630,326 10.4% 1,768,464
Interest Bearing Transaction 783,737 753,148 4.1% 781,779
Savings 1,202,519 1,148,193 4.7% 1,192,651
Time greater than $100K 251,013 369,275 -32.0% 258,202
Time less than $100K 201,506 231,567 -13.0% 208,627
Total Short-Term Borrowings 60,876 61,076 -0.3% 62,472
Federal Home Loan Bank Advances 20,379 25,719 -20.8% 20,520
Term Repurchase Agreement 10,000 10,000 0.0% 10,000
Debt Financing -- 15,000 n/m --
Shareholders' Equity 525,288 538,529 -2.5% 533,159
Demand Deposits/
Total Deposits 42.5% 39.5% 42.0%
Transaction & Savings
Deposits / Total Deposits 89.3% 85.5% 88.9%
%
6/30'14YTD 6/30'13YTD Change
Total Deposits $4,224,326 $4,165,685 1.4%
Noninterest Demand 1,784,316 1,636,801 9.0%
Interest Bearing Transaction 782,763 759,941 3.0%
Savings 1,197,612 1,153,295 3.8%
Time greater than $100K 254,588 379,838 -33.0%
Time less than $100K 205,047 235,810 -13.0%
Total Short-Term Borrowings 61,670 59,414 3.8%
Federal Home Loan Bank Advances 20,449 25,748 -20.6%
Term Repurchase Agreement 10,000 10,000 0.0%
Debt Financing -- 15,000 n/m
Shareholders' Equity 529,202 540,192 -2.0%
Demand Deposits/
Total Deposits 42.2% 39.3%
Transaction & Savings
Deposits / Total Deposits 89.1% 85.2%
5. Interest Yields Earned & Rates Paid.
(dollars in thousands)
Q2'14
Average Income/ Yield (a) /
Volume Expense Rate
Interest & Fee Income Earned
Total Earning Assets (FTE) $4,114,811 $39,482 3.85%
Total Loans (FTE) 1,802,041 23,256 5.18%
Commercial Loans (FTE) 397,549 5,576 5.63%
Commercial RE Loans 775,687 11,889 6.15%
Consumer Loans 628,805 5,791 3.69%
Total Investments (FTE) 2,312,770 16,226 2.80%
Interest Expense Paid
Total Earning Assets 4,114,811 900 0.09%
Total Interest-Bearing Liabilities 2,530,030 900 0.14%
Total Interest-Bearing Deposits 2,438,775 754 0.12%
Interest-Bearing Transaction 783,737 67 0.03%
Savings 1,202,519 238 0.08%
Time less than $100K 201,506 216 0.43%
Time greater than $100K 251,013 233 0.37%
Total Short-Term Borrowings 60,876 21 0.14%
Federal Home Loan Bank Advances 20,379 101 1.99%
Term Repurchase Agreement 10,000 24 0.98%
Net Interest Income and
Margin (FTE) $38,582 3.76%
Q2'13
Average Income/ Yield (a) /
Volume Expense Rate
Interest & Fee Income Earned
Total Earning Assets (FTE) $4,147,096 $43,847 4.24%
Total Loans (FTE) 1,994,361 26,745 5.38%
Commercial Loans (FTE) 382,632 5,794 6.07%
Commercial RE Loans 881,108 13,725 6.25%
Consumer Loans 730,621 7,226 3.97%
Total Investments (FTE) 2,152,735 17,102 3.18%
Interest Expense Paid
Total Earning Assets 4,147,096 1,219 0.12%
Total Interest-Bearing Liabilities 2,613,978 1,219 0.19%
Total Interest-Bearing Deposits 2,502,183 847 0.14%
Interest-Bearing Transaction 753,148 64 0.03%
Savings 1,148,193 228 0.08%
Time less than $100K 231,567 272 0.47%
Time greater than $100K 369,275 283 0.31%
Total Short-Term Borrowings 61,076 26 0.17%
Federal Home Loan Bank Advances 25,719 120 1.87%
Term Repurchase Agreement 10,000 25 0.99%
Debt Financing 15,000 201 5.35%
Net Interest Income and
Margin (FTE) $42,628 4.12%
6. Noninterest Income.
(dollars in thousands except per-share amounts)
%
Q2'14 Q2'13 Change Q1'14
Service Charges on Deposits $6,105 $6,452 -5.4% $6,010
Merchant Processing Services 1,820 2,413 -24.6% 1,924
Debit Card Fees 1,534 1,478 3.8% 1,405
Other Service Fees 688 696 -1.1% 661
ATM Processing Fees 634 721 -12.1% 620
Trust Fees 615 585 5.2% 654
Financial Services Commissions 221 284 -22.2% 171
Other Income 1,581 1,655 -4.5% 1,545
Total Noninterest Income $13,198 $14,284 -7.6% $12,990
Total Revenue (FTE) $51,780 $56,912 -9.0% $51,854
Noninterest Income/Revenue (FTE) 25.5% 25.1% 25.1%
Service Charges/Avg. Deposits (a) 0.58% 0.63% 0.58%
Total Revenues (FTE) Per Avg.
Common Share (a) $7.93 $8.49 -6.5% $7.96
%
6/30'14YTD 6/30'13YTD Change
Service Charges on Deposits $12,115 $12,994 -6.8%
Merchant Processing Services 3,744 4,822 -22.4%
Debit Card Fees 2,939 2,836 3.6%
Other Service Fees 1,349 1,458 -7.5%
ATM Processing Fees 1,254 1,426 -12.1%
Trust Fees 1,269 1,153 10.1%
Financial Services Commissions 392 464 -15.5%
Other Income 3,126 3,409 -8.3%
Total Noninterest Income $26,188 $28,562 -8.3%
Total Revenue (FTE) $103,634 $115,025 -9.9%
Noninterest Income/Revenue (FTE) 25.3% 24.8%
Service Charges/Avg. Deposits (a) 0.58% 0.63%
Total Revenues (FTE) Per Avg.
Common Share (a) $7.95 $8.59 -7.5%
7. Noninterest Expense.
(dollars in thousands)
%
Q2'14 Q2'13 Change Q1'14
Salaries & Benefits $13,926 $14,064 -1.0% $14,126
Occupancy 3,746 3,638 3.0% 3,727
Outsourced Data Processing 2,115 2,140 -1.2% 2,105
Amortization of
Identifiable Intangibles 1,058 1,165 -9.2% 1,105
Professional Fees 577 745 -22.5% 430
Furniture & Equipment 1,005 1,021 -1.5% 1,005
Other Real Estate Owned (270) 278 n/m (350)
Courier Service 665 737 -9.7% 610
Other Operating 4,135 4,404 -6.1% 4,115
Total Noninterest Expense $26,957 $28,192 -4.4% $26,873
Noninterest Expense/
Avg. Earning Assets (a) 2.63% 2.73% 2.66%
Noninterest Expense/Revenues (FTE) 52.1% 49.5% 51.8%
%
6/30'14YTD 6/30'13YTD Change
Salaries & Benefits $28,052 $28,467 -1.5%
Occupancy 7,473 7,524 -0.7%
Outsourced Data Processing 4,220 4,297 -1.8%
Amortization of
Identifiable Intangibles 2,163 2,384 -9.3%
Professional Fees 1,007 1,380 -27.0%
Furniture & Equipment 2,010 1,901 5.8%
Other Real Estate Owned (620) 612 n/m
Courier Service 1,275 1,478 -13.7%
Other Operating 8,250 8,826 -6.5%
Total Noninterest Expense $53,830 $56,869 -5.3%
Noninterest Expense/
Avg. Earning Assets (a) 2.65% 2.77%
Noninterest Expense/Revenues (FTE) 51.9% 49.4%
8. Provision for Loan Losses.
(dollars in thousands)
%
Q2'14 Q2'13 Change Q1'14
Average Total Loans $1,802,041 $1,994,361 -9.6% $1,822,065
Allowance for Loan Loss (ALL)
Beginning of Period $32,109 $30,354 5.8% $31,693
Provision for Loan Losses 1,000 1,800 -44.4% 1,000
Net ALL Losses (711) (1,228) -42.1% (584)
ALL End of Period $32,398 $30,926 4.8% $32,109
ALL Recoveries/Gross ALL Losses 52% 42% 56%
Net ALL Losses/Avg. Total Loans (a) 0.16% 0.25% 0.13%
%
6/30'14YTD 6/30'13YTD Change
Average Total Loans $1,811,998 $2,035,944 -11.0%
Allowance for Loan Loss (ALL)
Beginning of Period $31,693 $30,234 4.8%
Provision for Loan Losses 2,000 4,600 -56.5%
Net ALL Losses (1,295) (3,908) -66.9%
ALL End of Period $32,398 $30,926 4.8%
ALL Recoveries/Gross ALL Losses 54% 34%
Net ALL Losses/Avg. Total Loans (a) 0.14% 0.39%
9. Credit Quality.
(dollars in thousands)
%
6/30/14 6/30/13 Change 3/31/14
Nonperforming Originated Loans:
Nonperforming Nonaccrual $6,757 $7,664 -11.8% $4,784
Performing Nonaccrual 203 1,272 -84.0% 39
Total Nonaccrual Loans 6,960 8,936 -22.1% 4,823
90+ Days Past Due Accruing Loans 183 241 -24.1% 196
Total 7,143 9,177 -22.2% 5,019
Repossessed Loan Collateral 5,308 5,414 -2.0% 5,347
Total Nonperforming
Originated Assets 12,451 14,591 -14.7% 10,366
Nonperforming Purchased Covered Loans (1,3):
Nonperforming Nonaccrual -- 14,619 n/m 86
Performing Nonaccrual -- 2,204 n/m --
Total Nonaccrual Loans -- 16,823 n/m 86
90+ Days Past Due Accruing Loans -- 74 n/m --
Total -- 16,897 n/m 86
Repossessed Purchased Covered
Loan Collateral (1,3) 585 10,480 n/m 585
Total Nonperforming Purchased
Covered Assets (1,3) 585 27,377 n/m 671
Nonperforming Purchased Non-Covered Loans (2,3):
Nonperforming Nonaccrual 12,707 1,890 n/m 11,578
Performing Nonaccrual 895 3,013 n/m 902
Total Nonaccrual Loans 13,602 4,903 n/m 12,480
90+ Days Past Due Accruing Loans 351 -- n/m 209
Total 13,953 4,903 n/m 12,689
Repossessed Purchased Non-Covered
Loan Collateral (2,3) 2,650 3,543 n/m 6,254
Total Nonperforming Purchased
Non-Covered Assets (2,3) 16,603 8,446 n/m 18,943
Total Nonperforming Assets $29,639 $50,414 -41.2% $29,980
Total Originated Loans Outstanding $1,517,278 $1,553,303 -2.3% $1,529,502
Total Purchased Covered
Loans Outstanding (1,3) 18,169 324,976 n/m 18,969
Total Purchased Non-Covered
Loans Outstanding (2,3) 249,161 61,062 n/m 267,848
Total Loans Outstanding $1,784,608 $1,939,341 -8.0% $1,816,319
Total Assets $4,931,095 $4,813,908 2.4% $4,921,042
Loans:
Allowance for Loan Losses $32,398 $30,926 4.8% $32,109
Allowance/Loans 1.82% 1.59% 1.77%
Nonperforming Loans/Total Loans 1.18% 1.60% 0.98%
Purchased Covered Loans (1,3):
Fair Value Discount on Purchased
Covered Loans $529 $18,514 $643
Discount/Purchased Covered
Loans, gross 2.83% 5.39% 3.28%
Nonperforming Purchased Covered Loans/
Total Purchased Covered Loans 0.00% 5.20% 0.45%
Purchased Non-Covered Loans (2,3):
Fair Value Discount on Purchased
Non-Covered Loans $11,193 $3,609 $12,140
Discount/Purchased Non-Covered 4.30% 5.58% 4.34%
Loans, gross
Nonperforming Purchased Non-Covered Loans/
Total Purchased Non-Covered Loans 5.60% 8.03% 4.74%
10. Capital.
(in thousands, except per-share amounts)
%
6/30/14 6/30/13 Change 3/31/14
Shareholders' Equity $538,803 $544,622 -1.1% $540,883
Tier I Regulatory Capital 394,760 405,851 -2.7% 399,886
Total Regulatory Capital 437,514 443,052 -1.2% 442,274
Total Assets 4,931,095 4,813,908 2.4% 4,921,042
Risk-Adjusted Assets 2,909,838 2,772,900 4.9% 2,910,773
Shareholders' Equity/
Total Assets 10.93% 11.31% 10.99%
Shareholders' Equity/
Total Loans 30.19% 28.08% 29.78%
Tier I Capital/Total Assets 8.01% 8.43% 8.13%
Tier I Capital/
Risk-Adjusted Assets 13.57% 14.64% 13.74%
Total Regulatory Capital/
Risk-Adjusted Assets 15.04% 15.98% 15.19%
Tangible Common Equity Ratio 8.36% 8.61% 8.40%
Common Shares Outstanding 26,074 26,769 -2.6% 26,299
Common Equity Per Share $20.66 $20.34 1.6% $20.57
Market Value Per Common Share $52.28 $45.69 14.4% $54.08
Share Repurchase Programs
(shares in thousands)
%
Q2'14 Q2'13 Change Q1'14
Total Shares Repurchased 271 270 0.5% 437
Average Repurchase Price $50.33 $44.29 13.6% $51.93
Net Shares Repurchased 225 249 -9.4% 211
%
6/30'14YTD 6/30'13YTD Change
Total Shares Repurchased 708 617 14.8%
Average Repurchase Price $51.32 $44.39 15.6%
Net Shares Repurchased 436 444 -1.7%
11. Period-End Balance Sheets.
(unaudited, dollars in thousands)
%
6/30/14 6/30/13 Change 3/31/14
Assets:
Cash and Due from Banks $484,904 $384,276 26.2% $428,840
Investment Securities:
Available For Sale 1,278,242 1,004,888 27.2% 1,240,288
Held to Maturity 1,069,135 1,134,615 -5.8% 1,110,329
Loans 1,784,608 1,939,341 -8.0% 1,816,319
Allowance For Loan Losses (32,398) (30,926) 4.8% (32,109)
Total Loans, net 1,752,210 1,908,415 -8.2% 1,784,210
Other Real Estate Owned 8,543 19,437 -56.0% 12,186
Premises and Equipment, net 37,424 38,267 -2.2% 36,675
Identifiable Intangibles, net 16,394 20,877 -21.5% 17,452
Goodwill 121,673 121,673 0.0% 121,673
Other Assets 162,570 181,460 -10.4% 169,389
Total Assets $4,931,095 $4,813,908 2.4% $4,921,042
Liabilities and Shareholders' Equity:
Deposits:
Noninterest Bearing $1,814,023 $1,644,151 10.3% $1,778,034
Interest-Bearing Transaction 756,596 725,852 4.2% 771,299
Savings 1,198,353 1,139,110 5.2% 1,207,881
Time 444,417 592,281 -25.0% 457,569
Total Deposits 4,213,389 4,101,394 2.7% 4,214,783
Short-Term Borrowed Funds 68,962 66,640 3.5% 64,382
Federal Home Loan Bank Advances 20,296 25,687 -21.0% 20,437
Term Repurchase Agreement 10,000 10,000 0.0% 10,000
Debt Financing -- 15,000 n/m --
Other Liabilities 79,645 50,565 57.5% 70,557
Total Liabilities 4,392,292 4,269,286 2.9% 4,380,159
Shareholders' Equity:
Common Equity:
Paid-In Capital 384,893 374,209 2.9% 386,201
Accumulated Other
Comprehensive Income 12,554 4,524 n/m 8,856
Retained Earnings 141,356 165,889 -14.8% 145,826
Total Shareholders' Equity 538,803 544,622 -1.1% 540,883
Total Liabilities and
Shareholders' Equity $4,931,095 $4,813,908 2.4% $4,921,042
12. Income Statements.
(unaudited, in thousands except per-share amounts)
%
Q2'14 Q2'13 Change Q1'14
Interest & Fee Income:
Loans $22,787 $26,180 -13.0% $22,901
Investment Securities:
Available for Sale 5,875 5,532 6.2% 5,630
Held to Maturity 6,741 7,557 -10.8% 7,033
Total Interest & Fee Income 35,403 39,269 -9.8% 35,564
Interest Expense:
Transaction Deposits 67 64 4.0% 67
Savings Deposits 238 228 4.1% 234
Time Deposits 449 555 -19.2% 453
Short-Term Borrowed Funds 21 26 -18.0% 20
Federal Home Loan Bank Advances 101 120 -15.8% 99
Term Repurchase Agreement 24 25 -4.5% 25
Debt Financing -- 201 n/m --
Total Interest Expense 900 1,219 -26.2% 898
Net Interest Income 34,503 38,050 -9.3% 34,666
Provision for Loan Losses 1,000 1,800 -44.4% 1,000
Noninterest Income:
Service Charges 6,105 6,452 -5.4% 6,010
Merchant Processing Services 1,820 2,413 -24.6% 1,924
Debit Card Fees 1,534 1,478 3.8% 1,405
Other Service Fees 688 696 -1.1% 661
ATM Processing Fees 634 721 -12.1% 620
Trust Fees 615 585 5.2% 654
Financial Services Commissions 221 284 -22.2% 171
Other 1,581 1,655 -4.5% 1,545
Total Noninterest Income 13,198 14,284 -7.6% 12,990
Noninterest Expense:
Salaries and Benefits 13,926 14,064 -1.0% 14,126
Occupancy 3,746 3,638 3.0% 3,727
Outsourced Data Processing 2,115 2,140 -1.2% 2,105
Amortization of Identifiable Intangibles 1,058 1,165 -9.2% 1,105
Professional Fees 577 745 -22.5% 430
Furniture & Equipment 1,005 1,021 -1.5% 1,005
Other Real Estate Owned (270) 278 n/m (350)
Courier Service 665 737 -9.7% 610
Other 4,135 4,404 -6.1% 4,115
Total Noninterest Expense 26,957 28,192 -4.4% 26,873
Income Before Income Taxes 19,744 22,342 -11.6% 19,783
Income Tax Provision 4,587 5,230 -12.3% 4,476
Net Income $15,157 $17,112 -11.4% $15,307
Average Common Shares Outstanding 26,175 26,890 -2.7% 26,433
Diluted Common Shares Outstanding 26,238 26,898 -2.5% 26,537
Per Common Share Data:
Basic Earnings $0.58 $0.64 -9.4% $0.58
Diluted Earnings 0.58 0.64 -9.4% 0.58
Dividends Paid 0.38 0.37 2.7% 0.38
%
6/30'14YTD 6/30'13YTD Change
Interest & Fee Income:
Loans $45,688 $53,579 -14.7%
Investment Securities:
Available for Sale 11,505 10,868 5.9%
Held to Maturity 13,774 15,287 -9.9%
Total Interest & Fee Income 70,967 79,734 -11.0%
Interest Expense:
Transaction Deposits 134 130 2.7%
Savings Deposits 472 458 3.0%
Time Deposits 902 1,158 -22.2%
Short-Term Borrowed Funds 41 37 11.8%
Federal Home Loan Bank Advances 200 238 -15.9%
Term Repurchase Agreement 49 49 0.6%
Debt Financing -- 401 n/m
Total Interest Expense 1,798 2,471 -27.2%
Net Interest Income 69,169 77,263 -10.5%
Provision for Loan Losses 2,000 4,600 -56.5%
Noninterest Income:
Service Charges 12,115 12,994 -6.8%
Merchant Processing Services 3,744 4,822 -22.4%
Debit Card Fees 2,939 2,836 3.6%
Other Service Fees 1,349 1,458 -7.5%
ATM Processing Fees 1,254 1,426 -12.1%
Trust Fees 1,269 1,153 10.1%
Financial Services Commissions 392 464 -15.5%
Other 3,126 3,409 -8.3%
Total Noninterest Income 26,188 28,562 -8.3%
Noninterest Expense:
Salaries and Benefits 28,052 28,467 -1.5%
Occupancy 7,473 7,524 -0.7%
Outsourced Data Processing 4,220 4,297 -1.8%
Amortization of Identifiable Intangibles 2,163 2,384 -9.3%
Professional Fees 1,007 1,380 -27.0%
Furniture & Equipment 2,010 1,901 5.8%
Other Real Estate Owned (620) 612 n/m
Courier Service 1,275 1,478 -13.7%
Other 8,250 8,826 -6.5%
Total Noninterest Expense 53,830 56,869 -5.3%
Income Before Income Taxes 39,527 44,356 -10.9%
Income Tax Provision 9,063 9,973 -9.1%
Net Income $30,464 $34,383 -11.4%
Average Common Shares Outstanding 26,303 27,017 -2.6%
Diluted Common Shares Outstanding 26,387 27,027 -2.4%
Per Common Share Data:
Basic Earnings $1.16 $1.27 -8.7%
Diluted Earnings 1.15 1.27 -9.4%
Dividends Paid 0.76 0.74 2.7%
Footnotes and Abbreviations:
(FTE) Fully Taxable Equivalent
(a) Annualized
(1) Purchased covered loans and repossessed loan collateral represent assets purchased in a business 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 a business combination.
(3) The FDIC indemnification of non-single family assets acquired from the former County Bank expired 2/6/14 and were reclassified into purchased non-covered loans and repossessed loan collateral.

CONTACT: Westamerica Bancorporation Robert A. Thorson - SVP & Chief Financial Officer 707-863-6840

Source:Westamerica Bancorporation