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Westamerica Bancorporation Reports Third Quarter 2016 Financial Results

SAN RAFAEL, Calif., Oct. 20, 2016 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq:WABC), parent company of Westamerica Bank, generated net income for the third quarter 2016 of $15.6 million and diluted earnings per common share ("EPS") of $0.61, compared to net income of $14.5 million and EPS of $0.57 for the prior quarter, and net income of $14.9 million and EPS of $0.58 for the third quarter 2015.

"Nonperforming delinquent loans declined $7.1 million during the third quarter 2016; the resolution of these problem loans contributed to net recoveries of prior loan losses of $649 thousand during the quarter. Given the level of improvement in credit quality, Westamerica recorded a reversal of the provision for loan losses of $3.2 million for the third quarter 2016. Operating expenses increased approximately $900 thousand for the third quarter 2016 relative to the prior quarter due in part to higher legal fees related to loan administration and collection activities. Our net interest margin was 3.21 percent in the third quarter 2016, down 0.06 percent from the prior quarter due to persistently low market interest rates,” said Chairman, President and CEO David Payne. “Westamerica continued to generate relatively high returns within our industry, realizing an annualized return on shareholders’ common equity of 11.4 percent for the third quarter 2016. Westamerica paid its shareholders a $0.39 per share dividend in the third quarter,” concluded Payne.

The annualized net interest margin on a fully taxable equivalent basis was 3.21 percent for the third quarter 2016, compared to 3.27 percent for the prior quarter, and 3.31 percent for the third quarter 2015. Net interest income on a fully taxable equivalent basis was $36.2 million for the third quarter 2016, compared to $36.5 million for the prior quarter, and $37.2 million for the third quarter 2015. The Company’s loan portfolio has declined from the third quarter 2015 through the third quarter 2016; Management has avoided originating long-term, 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 third quarter 2016, unchanged from the prior quarter and the third quarter 2015. 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 94 percent of average total deposits during the third quarter 2016.

During the third quarter 2016, Westamerica’s recoveries of loan losses exceeded gross loan losses by $649 thousand. In contrast, gross loan losses exceeded recoveries of loan losses by $577 thousand for the second quarter 2016 and by $792 thousand for the third quarter 2015. Westamerica recorded a reversal of the provision for loan losses of $3.2 million for the third quarter 2016 while the provision for loan losses was zero for both the second quarter 2016 and third quarter 2015. At September 30, 2016, the allowance for loan losses totaled $26.4 million.

Noninterest income for the third quarter 2016 totaled $11.6 million, compared to $11.7 million for the prior quarter and $12.0 million for the third quarter 2015.

Noninterest expense for the third quarter 2016 totaled $26.1 million, compared to $25.2 million for the prior quarter, and $26.2 million for the third quarter 2015. The approximate $900 thousand increase in noninterest expense from the second quarter 2016 to the third quarter 2016 is attributable to higher legal fees related to loan administration and collection efforts as well as increased occupancy costs and higher net OREO costs, offset in part by lower other expenses. The approximate $100 thousand reduction in noninterest expense from the third quarter 2015 to the third quarter 2016 is due to lower net OREO costs and other expenses, offset in part by higher legal fees and employee benefit costs.


At September 30, 2016, Westamerica Bancorporation's tangible common equity-to-asset ratio was 8.4 percent, and assets totaled $5.3 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 June 30, 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 October 20, 2016
WESTAMERICA BANCORPORATION
FINANCIAL HIGHLIGHTS
September 30, 2016
1. Net Income Summary.
(in thousands except per-share amounts)
%
Q3'16Q3'15ChangeQ2'16
Net Interest and Fee Income (FTE)$36,176 $37,179 -2.7%$36,495
Reversal of Provision for Loan Losses (3,200) - n/m -
Noninterest Income 11,598 11,993 -3.3% 11,702
Noninterest Expense 26,088
26,173 -0.3
% 25,229
Income Before Taxes (FTE) 24,886
22,999 8.2% 22,968
Income Tax Provision (FTE) 9,258
8,142 13.7
% 8,422
Net Income$15,628
$14,857 5.2%$14,546
Average Common Shares Outstanding 25,641 25,530 0.4% 25,586
Diluted Average Common Shares 25,687 25,565 0.5% 25,630
Operating Ratios:
Basic Earnings Per Common Share$0.61 $0.58 5.2%$0.57
Diluted Earnings Per Common Share 0.61 0.58 5.2
% 0.57
Return On Assets (a) 1.18% 1.16% 1.13%
Return On Common Equity (a) 11.4
% 11.3% 10.9%
Net Interest Margin (FTE) (a) 3.21% 3.31% 3.27%
Efficiency Ratio (FTE) 54.6% 53.2% 52.3%
Dividends Paid Per Common Share$0.39 $0.38 2.6%$0.39
Common Dividend Payout Ratio 64
% 66% 68%
%
9/30'16YTD9/30'15YTDChange
Net Interest and Fee Income (FTE)$109,118 $111,524 -2.2%
Reversal of Provision for Loan Losses (3,200) - n/m
Noninterest Income 35,029 36,562 -4.2%
Noninterest Expense 77,175
79,796 -3.3%
Income Before Taxes (FTE) 70,172
68,290 2.8
%
Income Tax Provision (FTE) 25,772
24,115 6.9%
Net Income$44,400
$44,175 0.5%
Average Common Shares Outstanding 25,558 25,565 0.0%
Diluted Average Common Shares 25,595 25,585 0.0%
Operating Ratios:
Basic Earnings Per Common Share$1.74 $1.73 0.6
%
Diluted Earnings Per Common Share 1.73 1.73 0.0%
Return On Assets (a) 1.14% 1.17%
Return On Common Equity (a) 11.0
% 11.4%
Net Interest Margin (FTE) (a) 3.27% 3.37%
Efficiency Ratio (FTE) 53.5% 53.9%
Dividends Paid Per Common Share$1.17 $1.14 2.6%
Common Dividend Payout Ratio 68
% 66%
2. Net Interest Income.
(dollars in thousands)
%
Q3'16Q3'15ChangeQ2'16
Interest and Fee Income (FTE)$36,699 $37,764 -2.8%$37,036
Interest Expense 523 585 -10.6% 541
Net Interest and Fee Income (FTE)$36,176 $37,179 -2.7%$36,495
Average Earning Assets$4,489,317 $4,471,690 0.4%$4,473,700
Average Interest-
Bearing Liabilities 2,616,357 2,511,820 4.2% 2,598,868
Yield on Earning Assets (FTE) (a) 3.26% 3.36% 3.32%
Cost of Funds (a) 0.05% 0.05% 0.05%
Net Interest Margin (FTE) (a) 3.21% 3.31% 3.27%
Interest Expense/
Interest-Bearing Liabilities (a) 0.08% 0.09% 0.08%
Net Interest Spread (FTE) (a) 3.18% 3.27% 3.24%
%
9/30'16YTD9/30'15YTDChange
Interest and Fee Income (FTE)$110,734 $113,385 -2.3%
Interest Expense 1,616 1,861 -13.2%
Net Interest and Fee Income (FTE)$109,118 $111,524 -2.2%
Average Earning Assets$4,448,261 $4,417,114 0.7%
Average Interest-
Bearing Liabilities 2,605,584 2,540,948 2.5%
Yield on Earning Assets (FTE) (a) 3.32% 3.43%
Cost of Funds (a) 0.05% 0.06%
Net Interest Margin (FTE) (a) 3.27% 3.37%
Interest Expense/
Interest-Bearing Liabilities (a) 0.08% 0.10%
Net Interest Spread (FTE) (a) 3.24% 3.33%
3. Loans & Other Earning Assets.
(average volume, dollars in thousands)
%
Q3'16Q3'15ChangeQ2'16
Total Assets$5,253,502 $5,062,334 3.8%$5,184,409
Total Earning Assets 4,489,317 4,471,690 0.4% 4,473,700
Total Loans 1,386,186 1,591,798 -12.9% 1,455,050
Commercial Loans 343,727 377,687 -9.0% 356,629
Commercial RE Loans 572,044 675,597 -15.3% 611,996
Consumer Loans 470,415 538,514 -12.6% 486,425
Total Investment Securities 3,103,131 2,879,892 7.8% 3,018,650
Available For Sale (Market) 1,660,680 1,649,986 0.6% 1,554,014
Held To Maturity 1,442,451 1,229,906 17.3% 1,464,636
Unrealized Gain 29,100 15,144 n/m 33,820
Loans/Deposits 30.2% 36.1% 32.1%
%
9/30'16YTD9/30'15YTDChange
Total Assets$5,204,418 $5,055,421 2.9%
Total Earning Assets 4,448,261 4,417,114 0.7%
Total Loans 1,447,061 1,643,438 -11.9%
Commercial Loans 356,781 394,829 -9.6%
Commercial RE Loans 604,741 690,970 -12.5%
Consumer Loans 485,539 557,639 -12.9%
Total Investment Securities 3,001,200 2,773,676 8.2%
Available For Sale (Market) 1,594,253 1,669,056 -4.5%
Held To Maturity 1,406,947 1,104,620 27.4%
Unrealized Gain 29,100 15,144 n/m
Loans/Deposits 31.8% 37.3%
4. Deposits, Other Interest-Bearing Liabilities & Equity.
(average volume, dollars in thousands)
%
Q3'16Q3'15ChangeQ2'16
Total Deposits$4,588,762 $4,414,711 3.9%$4,531,751
Noninterest Demand 2,041,045 1,975,498 3.3% 1,994,803
Interest Bearing Transaction 850,215 817,479 4.0% 855,732
Savings 1,427,247 1,304,128 9.4% 1,404,322
Time greater than $100K 118,113 147,216 -19.8% 119,475
Time less than $100K 152,142 170,390 -10.7% 157,419
Total Short-Term Borrowings 68,640 72,607 -5.5% 61,920
Shareholders' Equity 545,771 520,261 4.9% 537,987
Demand Deposits/
Total Deposits 44.5% 44.7% 44.0%
Transaction & Savings
Deposits / Total Deposits 94.1% 92.8% 93.9%
%
9/30'16YTD9/30'15YTDChange
Total Deposits$4,552,819 $4,404,379 3.4%
Noninterest Demand 2,010,058 1,946,018 3.3%
Interest Bearing Transaction 859,437 810,980 6.0%
Savings 1,406,338 1,298,851 8.3%
Time greater than $100K 120,418 172,834 -30.3%
Time less than $100K 156,568 175,696 -10.9%
Total Short-Term Borrowings 62,823 81,926 -23.3%
Federal Home Loan Bank Advances - 661 n/m
Shareholders' Equity 537,010 517,054 3.9%
Demand Deposits/
Total Deposits 44.1% 44.2%
Transaction & Savings
Deposits / Total Deposits 93.9% 92.1%
5. Interest Yields Earned & Rates Paid.
(dollars in thousands)
Q3'16
AverageIncome/Yield (a) /
VolumeExpenseRate
Interest & Fee Income Earned
Total Earning Assets (FTE)$4,489,317 $36,699 3.26%
Total Loans (FTE) 1,386,186 17,260 4.95%
Commercial Loans (FTE) 343,727 4,302 4.98%
Commercial RE Loans 572,044 8,832 6.14%
Consumer Loans 470,415 4,126 3.49%
Total Investments (FTE) 3,103,131 19,439 2.51%
Interest Expense Paid
Total Earning Assets 4,489,317 523 0.05%
Total Interest-Bearing Liabilities 2,616,357 523 0.08%
Total Interest-Bearing Deposits 2,547,717 512 0.08%
Interest-Bearing Transaction 850,215 64 0.03%
Savings 1,427,247 229 0.06%
Time less than $100K 152,142 95 0.25%
Time greater than $100K 118,113 124 0.42%
Total Short-Term Borrowings 68,640 11 0.06%
Net Interest Income and
Margin (FTE) $36,176 3.21%
Q3'15
AverageIncome/Yield (a) /
VolumeExpenseRate
Interest & Fee Income Earned
Total Earning Assets (FTE)$4,471,690 $37,764 3.36%
Total Loans (FTE) 1,591,798 19,732 4.92%
Commercial Loans (FTE) 377,687 4,470 4.70%
Commercial RE Loans 675,597 10,127 5.95%
Consumer Loans 538,514 5,135 3.79%
Total Investments (FTE) 2,879,892 18,032 2.50%
Interest Expense Paid
Total Earning Assets 4,471,690 585 0.05%
Total Interest-Bearing Liabilities 2,511,820 585 0.09%
Total Interest-Bearing Deposits 2,439,213 573 0.09%
Interest-Bearing Transaction 817,479 65 0.03%
Savings 1,304,128 211 0.06%
Time less than $100K 170,390 133 0.31%
Time greater than $100K 147,216 164 0.44%
Total Short-Term Borrowings 72,607 12 0.07%
Net Interest Income and
Margin (FTE) $37,179 3.31%
6. Noninterest Income.
(dollars in thousands except per-share amounts)
%
Q3'16Q3'15ChangeQ2'16
Service Charges on Deposits$5,303 $5,581 -5.0%$5,239
Merchant Processing Services 1,532 1,485 3.1% 1,638
Debit Card Fees 1,587 1,538 3.2% 1,621
Other Service Fees 671 693 -3.1% 650
ATM Processing Fees 600 616 -2.6% 603
Trust Fees 686 682 0.5% 657
Financial Services Commissions 118 177 -33.4% 137
Other Income 1,101 1,221 -9.9% 1,157
Total Noninterest Income$11,598 $11,993 -3.3%$11,702
Total Revenue (FTE)$47,774 $49,172 -2.8%$48,197
Noninterest Income/Revenue (FTE) 24.3% 24.4% 24.3%
Service Charges/Avg. Deposits (a) 0.46% 0.50% 0.46%
Total Revenues (FTE) Per Avg.
Common Share (a)$7.41 $7.64 -3.0%$7.58
%
9/30'16YTD9/30'15YTDChange
Service Charges on Deposits$15,790 $16,981 -7.0%
Merchant Processing Services 4,699 4,971 -5.5%
Debit Card Fees 4,724 4,528 4.3%
Other Service Fees 1,951 2,041 -4.4%
ATM Processing Fees 1,860 1,828 1.8%
Trust Fees 2,004 2,061 -2.8%
Financial Services Commissions 411 527 -22.2%
Other Income 3,590 3,625 -1.0%
Total Noninterest Income$35,029 $36,562 -4.2%
Total Revenue (FTE)$144,147 $148,086 -2.7%
Noninterest Income/Revenue (FTE) 24.3% 24.7%
Service Charges/Avg. Deposits (a) 0.46% 0.52%
Total Revenues (FTE) Per Avg.
Common Share (a)$7.53 $7.74 -2.7%
7. Noninterest Expense.
(dollars in thousands)
%
Q3'16Q3'15ChangeQ2'16
Salaries & Benefits$13,063 $12,761 2.4%$12,887
Occupancy 3,749 3,746 0.1% 3,400
Outsourced Data Processing 2,114 2,115 0.0% 2,130
Amortization of
Identifiable Intangibles 867 952 -9.0% 870
Professional Fees 1,693 746 127.1
% 758
Furniture & Equipment 1,211 1,075 12.7% 1,187
Other Real Estate Owned (206) 83 n/m (392)
Courier Service 451 604 -25.3% 462
Other Operating 3,146 4,091 -23.1% 3,927
Total Noninterest Expense$26,088 $26,173 -0.3%$25,229
Noninterest Expense/
Avg. Earning Assets (a) 2.31% 2.32% 2.27%
Noninterest Expense/Revenues (FTE) 54.6% 53.2% 52.3%
%
9/30'16YTD9/30'15YTDChange
Salaries & Benefits$39,067 $39,795 -1.8%
Occupancy 10,546 11,199 -5.8%
Outsourced Data Processing 6,375 6,334 0.6%
Amortization of
Identifiable Intangibles 2,642 2,908 -9.2%
Professional Fees 3,183 1,876 69.7
%
Furniture & Equipment 3,611 3,353 7.7%
Other Real Estate Owned (487) 451 n/m
Courier Service 1,458 1,744 -16.4%
Other Operating 10,780 12,136 -11.2%
Total Noninterest Expense$77,175 $79,796 -3.3%
Noninterest Expense/
Avg. Earning Assets (a) 2.32% 2.42%
Noninterest Expense/Revenues (FTE) 53.5% 53.9%
8. Allowance for Loan Losses.
(dollars in thousands)
%
Q3'16Q3'15ChangeQ2'16
Average Total Loans$1,386,186 $1,591,798 -12.9%$1,455,050
Allowance for Loan Loss (ALL)
Beginning of Period $28,910 $30,828 -6.2%$29,487
Reversal of Provision for Loan Losses (3,200) - n/m -
Net ALL Recoveries (Losses) 649 (792) -182.0% (577)
ALL End of Period$26,359 $30,036 -12.2%$28,910
ALL Recoveries/Gross ALL Losses 134% 46% 61%
Net ALL (Recoveries) Losses/Avg.
Total Loans (a) -0.19% 0.20% 0.16%
%
9/30'16YTD9/30'15YTDChange
Average Total Loans$1,447,061 $1,643,438 -11.9%
Allowance for Loan Loss (ALL)
Beginning of Period $29,771 $31,485 -5.4%
Reversal of Provision for Loan Losses (3,200) - n/m
Net ALL Losses (212) (1,449) -85.4%
ALL End of Period$26,359 $30,036 -12.2%
ALL Recoveries/Gross ALL Losses 96% 63%
Net ALL Losses/Avg. Total Loans (a) 0.02% 0.12%
9. Credit Quality.
(dollars in thousands)
%
9/30/169/30/15Change6/30/16
Nonperforming Originated Loans:
Nonperforming Nonaccrual$1,198 $7,578 -84.2%$1,693
Performing Nonaccrual 4,410 - n/m 6,890
Total Nonaccrual Loans 5,608 7,578 -26.0% 8,583
90+ Days Past Due Accruing Loans 438 481 -8.9% 303
Total 6,046 8,059 -25.0% 8,886
Repossessed Originated Loan Collateral 666 5,834 -88.6% 1,089
Total Nonperforming
Originated Assets 6,712 13,893 -51.7% 9,975
Nonperforming Purchased Covered Loans (1):
Nonperforming Nonaccrual 29 - n/m 29
Performing Nonaccrual - - n/m -
Total Nonaccrual Loans 29 - n/m 29
90+ Days Past Due Accruing Loans - - n/m -
Total 29 - n/m 29
Repossessed Purchased Covered
Loan Collateral (1) - - n/m -
Total Nonperforming Purchased
Covered Assets (1) 29 - n/m 29
Nonperforming Purchased Non-Covered Loans (2):
Nonperforming Nonaccrual 634 8,784 -92.8% 4,805
Performing Nonaccrual 22 84 n/m 148
Total Nonaccrual Loans 656 8,868 -92.6% 4,953
90+ Days Past Due Accruing Loans 49 - n/m 53
Total 705 8,868 -92.1% 5,006
Repossessed Purchased Non-Covered
Loan Collateral (2) 2,366 3,435 -31.1% 3,073
Total Nonperforming Purchased
Non-Covered Assets (2) 3,071 12,303 -75.0% 8,079
Total Nonperforming Assets$9,812 $26,196 -62.5%$18,083
Total Originated Loans Outstanding$1,242,224 $1,376,905 -9.8%$1,280,194
Total Purchased Covered
Loans Outstanding (1) 11,745 14,640 -19.8% 12,777
Total Purchased Non-Covered
Loans Outstanding (2) 110,360 180,298 -38.8% 136,589
Total Loans Outstanding $1,364,329 $1,571,843 -13.2%$1,429,560
Total Assets $5,306,778 $5,001,395 6.1%$5,179,085
Loans:
Allowance for Loan Losses$26,359 $30,036 -12.2
%$28,910
Allowance/Loans 1.93
% 1.91% 2.02%
Nonperforming Loans/Total Loans 0.50% 1.08% 0.97%
Purchased Covered Loans (1):
Fair Value Discount on Purchased
Covered Loans$- $155 $-
Discount/Purchased Covered
Loans, gross 0.00% 1.05% 0.00%
Nonperforming Purchased Covered Loans/
Total Purchased Covered Loans 0.25% 0.00% 0.23%
Purchased Non-Covered Loans (2):
Fair Value Discount on Purchased
Non-Covered Loans$4,922 $7,082 $5,411
Discount/Purchased Non-Covered 4.27% 3.78% 3.81%
Loans, gross
Nonperforming Purchased Non-Covered Loans/
Total Purchased Non-Covered Loans 0.64% 4.92% 3.66%
10. Capital.
(in thousands, except per-share amounts)
%
9/30/169/30/15Change6/30/16
Shareholders' Equity$562,996 $533,938 5.4%$558,327
Total Assets 5,306,778 5,001,395 6.1% 5,179,085
Shareholders' Equity/
Total Assets 10.61% 10.68% 10.78%
Shareholders' Equity/
Total Loans 41.27% 33.97% 39.06%
Tangible Common Equity Ratio 8.37% 8.23% 8.48%
Common Shares Outstanding 25,665 25,530 0.5% 25,632
Common Equity Per Share$21.94 $20.91 4.9%$21.78
Market Value Per Common Share$50.88 $44.44 14.5%$49.26
Share Repurchase Programs
(shares in thousands)
%
Q3'16Q3'15ChangeQ2'16
Total Shares Repurchased - 26 n/m 7
Average Repurchase Price$- $50.30 n/m$49.35
Net Shares Issued (33) (1)n/m (194)
%
9/30'16YTD9/30'15YTDChange
Total Shares Repurchased 137 342 -59.8%
Average Repurchase Price$41.94 $43.90 -4.5%
Net Shares (Issued) Repurchased (137) 215 -163.6%
11. Period-End Balance Sheets.
(unaudited, dollars in thousands)
%
9/30/169/30/15Change6/30/16
Assets:
Cash and Due from Banks$471,367 $268,587 75.5%$441,785
Investment Securities:
Available For Sale 1,762,408 1,571,710 12.1% 1,531,035
Held to Maturity 1,411,019 1,278,814 10.3% 1,473,357
Loans 1,364,329 1,571,843 -13.2% 1,429,560
Allowance For Loan Losses (26,359) (30,036) -12.2% (28,910)
Total Loans, net 1,337,970 1,541,807 -13.2% 1,400,650
Other Real Estate Owned 3,032 9,269 -67.3% 4,162
Premises and Equipment, net 37,059 39,244 -5.6% 37,759
Identifiable Intangibles, net 7,789 11,379 -31.5% 8,656
Goodwill 121,673 121,673 0.0% 121,673
Other Assets 154,461 158,912 -2.8% 160,008
Total Assets$5,306,778 $5,001,395 6.1%$5,179,085
Liabilities and Shareholders' Equity:
Deposits:
Noninterest Bearing$2,064,988 $1,942,450 6.3%$1,978,947
Interest-Bearing Transaction 851,885 812,940 4.8% 827,857
Savings 1,462,860 1,310,985 11.6% 1,404,840
Time 265,137 300,545 -11.8% 273,670
Total Deposits 4,644,870 4,366,920 6.4% 4,485,314
Short-Term Borrowed Funds 56,358 57,063 -1.2% 67,852
Other Liabilities 42,554 43,474 -2.1% 67,592
Total Liabilities 4,743,782 4,467,457 6.2% 4,620,758
Shareholders' Equity:
Common Equity:
Paid-In Capital 393,134 381,227 3.1% 391,213
Accumulated Other
Comprehensive Income 9,001 7,198 25.1% 11,885
Retained Earnings 160,861 145,513 10.5
% 155,229
Total Shareholders' Equity 562,996 533,938 5.4% 558,327
Total Liabilities and
Shareholders' Equity$5,306,778 $5,001,395 6.1%$5,179,085
12. Income Statements.
(unaudited, in thousands except per-share amounts)
%
Q3'16Q3'15ChangeQ2'16
Interest & Fee Income:
Loans$16,968 $19,378 -12.4%$17,583
Investment Securities:
Available for Sale 8,796 7,880 11.6% 8,091
Held to Maturity 7,704 7,041 9.4% 8,053
Total Interest & Fee Income 33,468 34,299 -2.4% 33,727
Interest Expense:
Transaction Deposits 64 65 -1.0% 67
Savings Deposits 229 211 8.5% 225
Time Deposits 219 297 -26.3% 239
Short-Term Borrowed Funds 11 12 -10.3% 10
Total Interest Expense 523 585 -10.6% 541
Net Interest Income 32,945 33,714 -2.3% 33,186
Reversal of Provision for Loan Losses (3,200) - n/m -
Noninterest Income:
Service Charges 5,303 5,581 -5.0% 5,239
Merchant Processing Services 1,532 1,485 3.1% 1,638
Debit Card Fees 1,587 1,538 3.2% 1,621
Other Service Fees 671 693 -3.1% 650
ATM Processing Fees 600 616 -2.6% 603
Trust Fees 686 682 0.5% 657
Financial Services Commissions 118 177 -33.4% 137
Other 1,101 1,221 -9.9% 1,157
Total Noninterest Income 11,598 11,993 -3.3% 11,702
Noninterest Expense:
Salaries and Benefits 13,063 12,761 2.4% 12,887
Occupancy 3,749 3,746 0.1% 3,400
Outsourced Data Processing 2,114 2,115 0.0% 2,130
Amortization of Identifiable Intangibles 867 952 -9.0% 870
Professional Fees 1,693 746 127.1
% 758
Furniture & Equipment 1,211 1,075 12.7% 1,187
Other Real Estate Owned (206) 83 n/m (392)
Courier Service 451 604 -25.3% 462
Other 3,146 4,091 -23.1% 3,927
Total Noninterest Expense 26,088 26,173 -0.3% 25,229
Income Before Income Taxes 21,655
19,534 10.9
% 19,659
Income Tax Provision 6,027
4,677 28.9
% 5,113
Net Income$15,628 $14,857 5.2
%$14,546
Average Common Shares Outstanding 25,641 25,530 0.4% 25,586
Diluted Common Shares Outstanding 25,687 25,565 0.5% 25,630
Per Common Share Data:
Basic Earnings$0.61 $0.58 5.2
%$0.57
Diluted Earnings 0.61 0.58 5.2% 0.57
Dividends Paid 0.39 0.38 2.6% 0.39
%
9/30'16YTD9/30'15YTDChange
Interest & Fee Income:
Loans$52,904 $59,643 -11.3%
Investment Securities:
Available for Sale 24,855 23,347 6.5%
Held to Maturity 23,083 19,651 17.5%
Total Interest & Fee Income 100,842 102,641 -1.8%
Interest Expense:
Transaction Deposits 201 190 5.7%
Savings Deposits 677 634 6.6%
Time Deposits 708 992 -28.6%
Short-Term Borrowed Funds 30 44 -30.9%
Federal Home Loan Bank Advances - 1 n/m
Total Interest Expense 1,616 1,861 -13.2%
Net Interest Income 99,226 100,780 -1.5%
Reversal of Provision for Loan Losses (3,200) - n/m
Noninterest Income:
Service Charges 15,790 16,981 -7.0%
Merchant Processing Services 4,699 4,971 -5.5%
Debit Card Fees 4,724 4,528 4.3%
Other Service Fees 1,951 2,041 -4.4%
ATM Processing Fees 1,860 1,828 1.8%
Trust Fees 2,004 2,061 -2.8%
Financial Services Commissions 411 527 -22.2%
Other 3,590 3,625 -1.0%
Total Noninterest Income 35,029 36,562 -4.2%
Noninterest Expense:
Salaries and Benefits 39,067 39,795 -1.8%
Occupancy 10,546 11,199 -5.8%
Outsourced Data Processing 6,375 6,334 0.6%
Amortization of Identifiable Intangibles 2,642 2,908 -9.2%
Professional Fees 3,183
1,876 69.7
%
Furniture & Equipment 3,611 3,353 7.7%
Other Real Estate Owned (487) 451 n/m
Courier Service 1,458 1,744 -16.4%
Other 10,780 12,136 -11.2%
Total Noninterest Expense 77,175 79,796 -3.3%
Income Before Income Taxes 60,280 57,546 4.8
%
Income Tax Provision 15,880 13,371 18.8
%
Net Income$44,400 $44,175 0.5
%
Average Common Shares Outstanding 25,558 25,565 0.0%
Diluted Common Shares Outstanding 25,595 25,585 0.0%
Per Common Share Data:
Basic Earnings$1.74 $1.73 0.6
%
Diluted Earnings 1.73 1.73 0.0
%
Dividends Paid 1.17 1.14 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