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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)
%
Q2'16Q2'15ChangeQ1'16
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%
%
6/30'16YTD6/30'15YTDChange
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)
%
Q2'16Q2'15ChangeQ1'16
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%
%
6/30'16YTD6/30'15YTDChange
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)
%
Q2'16Q2'15ChangeQ1'16
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%
%
6/30'16YTD6/30'15YTDChange
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)
%
Q2'16Q2'15ChangeQ1'16
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%
%
6/30'16YTD6/30'15YTDChange
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
AverageIncome/Yield (a) /
VolumeExpenseRate
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
AverageIncome/Yield (a) /
VolumeExpenseRate
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)
%
Q2'16Q2'15ChangeQ1'16
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
%
6/30'16YTD6/30'15YTDChange
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)
%
Q2'16Q2'15ChangeQ1'16
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%
%
6/30'16YTD6/30'15YTDChange
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)
%
Q2'16Q2'15ChangeQ1'16
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%
%
6/30'16YTD6/30'15YTDChange
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)
%
6/30/166/30/15Change3/31/16
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)
%
6/30/166/30/15Change3/31/16
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)
%
Q2'16Q2'15ChangeQ1'16
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
%
6/30'16YTD6/30'15YTDChange
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)
%
6/30/166/30/15Change3/31/16
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)
%
Q2'16Q2'15ChangeQ1'16
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
%
6/30'16YTD6/30'15YTDChange
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 income
on a FTE basis using the current statutory federal tax rate, which is a non-generally accepted
accounting principles (GAAP) financial measure.
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) 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.



For additional information contact: Westamerica Bancorporation 1108 Fifth Avenue, San Rafael, CA 94901 Robert A. Thorson – SVP & Chief Financial Officer 707-863-6840 investments@westamerica.com

Source:Westamerica Bancorporation