Westamerica Bancorporation Reports Fourth Quarter 2016 Financial Results

SAN RAFAEL, Calif., Jan. 19, 2017 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq:WABC), parent company of Westamerica Bank, generated net income for the fourth quarter 2016 of $14.5 million and diluted earnings per common share ("EPS") of $0.56, compared to net income of $14.6 million and EPS of $0.57 for the fourth quarter 2015, and compared to net income of $15.6 million and EPS of $0.61 for the third quarter 2016. The provision for loan losses was zero in the fourth quarter 2016 and in the fourth quarter 2015, while third quarter 2016 results included a $3.2 million reversal of provision for loan losses due to improved credit quality in the quarter and higher operating expenses for legal expenses related to loan administration and collection efforts.

"Originated loan volumes declined one-half of one percent from September 30, 2016 to December 31, 2016, which represents improved results. Westamerica’s strategy following the 'great recession' has been to minimize interest rate risk by avoiding longer dated loans priced at historically low interest rates, which resulted in declining loan volumes. Our annualized fully tax equivalent net interest margin was 3.15 percent for the fourth quarter 2016; yields on loans and investment securities declined due to low market interest rates. Management has continued to focus on operating cost reductions in light of the market based pressures on our revenue. For the full year 2016, noninterest expenses were 3.4 percent lower than for 2015,” said Chairman, President and CEO David Payne. “Westamerica continued to generate relatively high returns within our industry, realizing a return on shareholders’ common equity of 10.9 percent for 2016. Total 2016 shareholder dividends of $1.56 per common share represent the highest level in the Company’s history,” concluded Payne.

The annualized net interest margin on a fully taxable equivalent basis was 3.15 percent for the fourth quarter 2016, compared to 3.21 percent for the prior quarter, and 3.32 percent for the fourth quarter 2015. Net interest income on a fully taxable equivalent basis was $36.0 million for the fourth quarter 2016, compared to $36.2 million for the prior quarter, and $36.7 million for the fourth quarter 2015. The Company’s loan portfolio declined from the fourth quarter 2015 through the fourth 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 and net interest income. The funding cost of deposits and other interest-bearing borrowings, as a percentage of average loans and investment securities, was 0.04 percent for the fourth quarter 2016, an improvement from 0.05 percent for both the prior quarter and the fourth 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 fourth quarter 2016.

The provision for loan losses was zero for the fourth quarter 2016 and for the fourth quarter 2015; loan losses exceeded loan loss recoveries by $405 thousand for the fourth quarter 2016 and by $265 thousand for the fourth quarter 2015. During the third quarter 2016, loan loss recoveries exceeded loan losses by $649 thousand and nonperforming loans declined $7.1 million, or 51 percent; given the improvement in credit quality, Westamerica recorded a reversal of the provision for loan losses of $3.2 million for the third quarter 2016. At December 31, 2016, the allowance for loan losses totaled $26.0 million.

Noninterest income for the fourth quarter 2016 totaled $11.5 million, compared to $11.6 million for the prior quarter and $11.3 million for the fourth quarter 2015.

Noninterest expense for the fourth quarter 2016 totaled $24.6 million, reduced from $26.1 million for the prior quarter; the decline is attributable to higher third quarter 2016 legal fees related to loan administration and collection efforts as well as fourth quarter 2016 declines in personnel and occupancy costs. Noninterest expense for the fourth quarter 2016 also declined compared to noninterest expense of $25.5 million for the fourth quarter 2015; the decline is attributable to lower other operating expenses including FDIC insurance assessments, correspondent service fees and operating losses on limited partnership investments.

At December 31, 2016, Westamerica Bancorporation's tangible common equity-to-asset ratio was 8.26 percent, and assets totaled $5.4 billion. Westamerica Bancorporation, through its wholly owned subsidiary Westamerica Bank, operates commercial banking and trust offices throughout Northern and Central California.

Westamerica Bancorporation Web Address: www.westamerica.com

FORWARD-LOOKING INFORMATION:

The following appears in accordance with the Private Securities Litigation Reform Act of 1995:

This press release may contain forward-looking statements about the Company, including descriptions of plans or objectives of its management for future operations, products or services, and forecasts of its revenues, earnings or other measures of economic performance. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may."

Forward-looking statements, by their nature, are subject to risks and uncertainties. A number of factors — many of which are beyond the Company's control — could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. The Company's most recent reports filed with the Securities and Exchange Commission, including the annual report for the year ended December 31, 2015 filed on Form 10-K and quarterly report for the quarter ended September 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 January 19, 2017
WESTAMERICA BANCORPORATION
FINANCIAL HIGHLIGHTS
December 31, 2016
1. Net Income Summary.
(in thousands except per-share amounts)
%
Q4'16Q4'15ChangeQ3'16
Net Interest and Fee Income (FTE)$35,959 $36,734 -2.1%$36,176
(Reversal of) Provision for Loan Losses - - n/m (3,200)
Noninterest Income 11,545 11,305 2.1% 11,598
Noninterest Expense 24,577 25,504 -3.6% 26,088
Income Before Taxes (FTE) 22,927 22,535 1.7% 24,886
Income Tax Provision (FTE) 8,474 7,957 6.5% 9,258
Net Income$14,453 $14,578 -0.9%$15,628
Average Common Shares Outstanding 25,773 25,528 1.0% 25,641
Diluted Average Common Shares 25,925 25,555 1.4% 25,687
Operating Ratios:
Basic Earnings Per Common Share$0.56 $0.57 -1.8%$0.61
Diluted Earnings Per Common Share 0.56 0.57 -1.8% 0.61
Return On Assets (a) 1.07% 1.12% 1.18%
Return On Common Equity (a) 10.3% 11.0% 11.4%
Net Interest Margin (FTE) (a) 3.15% 3.32% 3.21%
Efficiency Ratio (FTE) 51.7% 53.1% 54.6%
Dividends Paid Per Common Share$0.39 $0.39 0.0%$0.39
Common Dividend Payout Ratio 70% 68% 64%
%
12/31'16YTD12/31'15YTDChange
Net Interest and Fee Income (FTE)$145,077 $148,258 -2.1%
(Reversal of) Provision for Loan Losses (3,200) - n/m
Noninterest Income 46,574 47,867 -2.7%
Noninterest Expense 101,752 105,300 -3.4%
Income Before Taxes (FTE) 93,099 90,825 2.5%
Income Tax Provision (FTE) 34,246 32,072 6.8%
Net Income$58,853 $58,753 0.2%
Average Common Shares Outstanding 25,612 25,555 0.2%
Diluted Average Common Shares 25,678 25,577 0.4%
Operating Ratios:
Basic Earnings Per Common Share$2.30 $2.30 0.0%
Diluted Earnings Per Common Share 2.29 2.30 -0.4%
Return On Assets 1.12% 1.16%
Return On Common Equity 10.9% 11.3%
Net Interest Margin (FTE) 3.24% 3.36%
Efficiency Ratio (FTE) 53.1% 53.7%
Dividends Paid Per Common Share$1.56 $1.53 2.0%
Common Dividend Payout Ratio 68% 67%
2. Net Interest Income.
(dollars in thousands)
%
Q4'16Q4'15ChangeQ3'16
Interest and Fee Income (FTE)$36,459 $37,297 -2.2%$36,699
Interest Expense 500 563 -11.2% 523
Net Interest and Fee Income (FTE)$35,959 $36,734 -2.1%$36,176
Average Earning Assets$4,561,619 $4,411,599 3.4%$4,489,317
Average Interest-
Bearing Liabilities 2,681,585 2,554,447 5.0% 2,616,357
Yield on Earning Assets (FTE) (a) 3.19% 3.37% 3.26%
Cost of Funds (a) 0.04% 0.05% 0.05%
Net Interest Margin (FTE) (a) 3.15% 3.32% 3.21%
Interest Expense/
Interest-Bearing Liabilities (a) 0.07% 0.09% 0.08%
Net Interest Spread (FTE) (a) 3.12% 3.28% 3.18%
%
12/31'16YTD12/31'15YTDChange
Interest and Fee Income (FTE)$147,193 $150,682 -2.3%
Interest Expense 2,116 2,424 -12.7%
Net Interest and Fee Income (FTE)$145,077 $148,258 -2.1%
Average Earning Assets$4,476,755 $4,415,724 1.4%
Average Interest-
Bearing Liabilities 2,624,688 2,544,350 3.2%
Yield on Earning Assets (FTE) 3.29% 3.41%
Cost of Funds 0.05% 0.05%
Net Interest Margin (FTE) 3.24% 3.36%
Interest Expense/
Interest-Bearing Liabilities 0.08% 0.10%
Net Interest Spread (FTE) 3.21% 3.31%
3. Loans & Other Earning Assets.
(average volume, dollars in thousands)
%
Q4'16Q4'15ChangeQ3'16
Total Assets$5,370,412 $5,168,805 3.9%$5,253,502
Total Earning Assets 4,561,619 4,411,599 3.4% 4,489,317
Total Loans 1,356,350 1,543,591 -12.1% 1,386,186
Commercial Loans 349,022 371,902 -6.2% 343,727
Commercial RE Loans 546,145 651,991 -16.2% 572,044
Consumer Loans 461,183 519,698 -11.3% 470,415
Total Investment Securities 3,205,269 2,868,008 11.8% 3,103,131
Available For Sale (Market) 1,821,998 1,589,483 14.6% 1,660,680
Held To Maturity 1,383,271 1,278,525 8.2% 1,442,451
Unrealized Gain (5,571) 9,624 n/m 29,100
Loans/Deposits 28.8% 34.0% 30.2%
%
12/31'16YTD12/31'15YTDChange
Total Assets$5,246,144 $5,084,000 3.2%
Total Earning Assets 4,476,755 4,415,724 1.4%
Total Loans 1,424,259 1,618,271 -12.0%
Commercial Loans 354,831 389,050 -8.8%
Commercial RE Loans 590,012 681,145 -13.4%
Consumer Loans 479,416 548,076 -12.5%
Total Investment Securities 3,052,496 2,797,453 9.1%
Available For Sale (Market) 1,651,500 1,648,999 0.2%
Held To Maturity 1,400,996 1,148,454 22.0%
Unrealized Gain (5,571) 9,624 n/m
Loans/Deposits 31.0% 36.5%
4. Deposits, Other Interest-Bearing Liabilities & Equity.
(average volume, dollars in thousands)
%
Q4'16Q4'15ChangeQ3'16
Total Deposits$4,702,129 $4,536,256 3.7%$4,588,762
Noninterest Demand 2,077,213 2,036,470 2.0% 2,041,045
Interest Bearing Transaction 871,947 855,320 1.9% 850,215
Savings 1,492,748 1,351,412 10.5% 1,427,247
Time greater than $100K 113,781 128,703 -11.6% 118,113
Time less than $100K 146,440 164,351 -10.9% 152,142
Total Short-Term Borrowings 56,669 54,661 3.7% 68,640
Shareholders' Equity 558,057 525,277 6.2% 545,771
Demand Deposits/
Total Deposits 44.2% 44.9% 44.5%
Transaction & Savings
Deposits / Total Deposits 94.5% 93.5% 94.1%
%
12/31'16YTD12/31'15YTDChange
Total Deposits$4,590,351 $4,437,619 3.4%
Noninterest Demand 2,026,939 1,968,817 3.0%
Interest Bearing Transaction 862,581 822,156 4.9%
Savings 1,428,059 1,312,100 8.8%
Time greater than $100K 118,750 161,710 -26.6%
Time less than $100K 154,022 172,836 -10.9%
Total Short-Term Borrowings 61,276 75,054 -18.4%
Federal Home Loan Bank Advances - 494 n/m
Shareholders' Equity 542,301 519,126 4.5%
Demand Deposits/
Total Deposits 44.2% 44.4%
Transaction & Savings
Deposits / Total Deposits 94.1% 92.5%
5. Interest Yields Earned & Rates Paid.
(dollars in thousands)
Q4'16
AverageIncome/Yield (a) /
VolumeExpenseRate
Interest & Fee Income Earned
Total Earning Assets (FTE)$4,561,619 $36,459 3.19%
Total Loans (FTE) 1,356,350 16,526 4.85%
Commercial Loans (FTE) 349,022 4,084 4.66%
Commercial RE Loans 546,145 8,386 6.11%
Consumer Loans 461,183 4,056 3.50%
Total Investments (FTE) 3,205,269 19,933 2.49%
Interest Expense Paid
Total Earning Assets 4,561,619 500 0.04%
Total Interest-Bearing Liabilities 2,681,585 500 0.07%
Total Interest-Bearing Deposits 2,624,916 491 0.07%
Interest-Bearing Transaction 871,947 58 0.03%
Savings 1,492,748 230 0.06%
Time less than $100K 146,440 90 0.24%
Time greater than $100K 113,781 113 0.40%
Total Short-Term Borrowings 56,669 9 0.06%
Net Interest Income and
Margin (FTE) $35,959 3.15%
Q4'15
AverageIncome/Yield (a) /
VolumeExpenseRate
Interest & Fee Income Earned
Total Earning Assets (FTE)$4,411,599 $37,297 3.37%
Total Loans (FTE) 1,543,591 19,157 4.93%
Commercial Loans (FTE) 371,902 4,551 4.85%
Commercial RE Loans 651,991 9,807 5.97%
Consumer Loans 519,698 4,799 3.67%
Total Investments (FTE) 2,868,008 18,140 2.53%
Interest Expense Paid
Total Earning Assets 4,411,599 563 0.05%
Total Interest-Bearing Liabilities 2,554,447 563 0.09%
Total Interest-Bearing Deposits 2,499,786 554 0.09%
Interest-Bearing Transaction 855,320 70 0.03%
Savings 1,351,412 218 0.06%
Time less than $100K 164,351 122 0.29%
Time greater than $100K 128,703 144 0.44%
Total Short-Term Borrowings 54,661 9 0.06%
Net Interest Income and
Margin (FTE) $36,734 3.32%
6. Noninterest Income.
(dollars in thousands except per-share amounts)
%
Q4'16Q4'15ChangeQ3'16
Service Charges on Deposits$5,064 $5,259 -3.7%$5,303
Merchant Processing Services 1,678 1,368 22.7% 1,532
Debit Card Fees 1,566 1,557 0.6% 1,587
Other Service Fees 620 648 -4.3% 671
ATM Processing Fees 551 569 -3.2% 600
Trust Fees 682 671 1.7% 686
Financial Services Commissions 157 168 -6.3% 118
Other Income 1,227 1,065 15.2% 1,101
Total Noninterest Income$11,545 $11,305 2.1%$11,598
Total Revenue (FTE)$47,504 $48,039 -1.1%$47,774
Noninterest Income/Revenue (FTE) 24.3% 23.5% 24.3%
Service Charges/Avg. Deposits (a) 0.43% 0.46% 0.46%
Total Revenues (FTE) Per Avg.
Common Share (a)$7.33 $7.47 -1.8%$7.41
%
12/31'16YTD12/31'15YTDChange
Service Charges on Deposits$20,854 $22,241 -6.2%
Merchant Processing Services 6,377 6,339 0.6%
Debit Card Fees 6,290 6,084 3.4%
Other Service Fees 2,571 2,689 -4.4%
ATM Processing Fees 2,411 2,397 0.6%
Trust Fees 2,686 2,732 -1.7%
Financial Services Commissions 568 695 -18.3%
Other Income 4,817 4,690 2.7%
Total Noninterest Income$46,574 $47,867 -2.7%
Total Revenue (FTE)$191,651 $196,125 -2.3%
Noninterest Income/Revenue (FTE) 24.3% 24.4%
Service Charges/Avg. Deposits 0.45% 0.50%
Total Revenues (FTE) Per Avg.
Common Share$7.48 $7.67 -2.5%
7. Noninterest Expense.
(dollars in thousands)
%
Q4'16Q4'15ChangeQ3'16
Salaries & Benefits$12,439 $12,398 0.3%$13,063
Occupancy 3,570 3,761 -5.1% 3,749
Outsourced Data Processing 2,131 2,107 1.1% 2,114
Amortization of
Identifiable Intangibles 863 948 -9.0% 867
Professional Fees 797 614 29.8% 1,693
Furniture & Equipment 1,290 1,081 19.3% 1,211
Other Real Estate Owned 7 53 n/m (206)
Courier Service 494 585 -15.6% 451
Other Operating 2,986 3,957 -24.5% 3,146
Total Noninterest Expense$24,577 $25,504 -3.6%$26,088
Noninterest Expense/
Avg. Earning Assets (a) 2.14% 2.29% 2.31%
Noninterest Expense/Revenues (FTE) 51.7% 53.1% 54.6%
%
12/31'16YTD12/31'15YTDChange
Salaries & Benefits$51,507 $52,192 -1.3%
Occupancy 14,116 14,960 -5.6%
Outsourced Data Processing 8,505 8,441 0.8%
Amortization of
Identifiable Intangibles 3,504 3,856 -9.1%
Professional Fees 3,980 2,490 59.8%
Furniture & Equipment 4,901 4,434 10.5%
Other Real Estate Owned (479) 504 n/m
Courier Service 1,952 2,329 -16.2%
Other Operating 13,766 16,094 -14.5%
Total Noninterest Expense$101,752 $105,300 -3.4%
Noninterest Expense/
Avg. Earning Assets 2.27% 2.38%
Noninterest Expense/Revenues (FTE) 53.1% 53.7%
8. Allowance for Loan Losses.
(dollars in thousands)
%
Q4'16Q4'15ChangeQ3'16
Average Total Loans$1,356,350 $1,543,591 -12.1%$1,386,186
Allowance for Loan Loss (ALL)
Beginning of Period $26,359 $30,036 -12.2%$28,910
(Reversal of) Provision for Loan Losses - - n/m (3,200)
Net ALL (Losses) Recoveries (405) (265)52.7% 649
ALL End of Period$25,954 $29,771 -12.8%$26,359
ALL Recoveries/Gross ALL Losses 66% 78% 134%
Net ALL Losses (Recoveries)/Avg.
Total Loans (a) 0.12% 0.07% -0.19%
%
12/31'16YTD12/31'15YTDChange
Average Total Loans$1,424,259 $1,618,271 -12.0%
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 (617) (1,714)-64.0%
ALL End of Period$25,954 $29,771 -12.8%
ALL Recoveries/Gross ALL Losses 91% 67%
Net ALL Losses/Avg. Total Loans 0.04% 0.11%
9. Credit Quality.
(dollars in thousands)
%
12/31/1612/31/15Change9/30/16
Nonperforming Originated Loans:
Nonperforming Nonaccrual$1,405 $6,302 -77.7%$1,198
Performing Nonaccrual 4,410 350 n/m 4,410
Total Nonaccrual Loans 5,815 6,652 -12.6% 5,608
90+ Days Past Due Accruing Loans 355 295 20.3% 438
Total 6,170 6,947 -11.2% 6,046
Repossessed Originated Loan Collateral 396 5,829 -93.2% 666
Total Nonperforming
Originated Assets 6,566 12,776 -48.6% 6,712
Nonperforming Purchased Covered Loans (1):
Nonperforming Nonaccrual 858 - n/m 29
Performing Nonaccrual - - n/m -
Total Nonaccrual Loans 858 - n/m 29
90+ Days Past Due Accruing Loans - - n/m -
Total 858 - n/m 29
Repossessed Purchased Covered
Loan Collateral (1) - - n/m -
Total Nonperforming Purchased
Covered Assets (1) 858 - n/m 29
Nonperforming Purchased Non-Covered Loans (2):
Nonperforming Nonaccrual 1,693 8,346 -79.7% 634
Performing Nonaccrual 19 - n/m 22
Total Nonaccrual Loans 1,712 8,346 -79.5% 656
90+ Days Past Due Accruing Loans 142 - n/m 49
Total 1,854 8,346 -77.8% 705
Repossessed Purchased Non-Covered
Loan Collateral (2) 2,699 3,435 -21.4% 2,366
Total Nonperforming Purchased
Non-Covered Assets (2) 4,553 11,781 -61.4% 3,071
Total Nonperforming Assets$11,977 $24,557 -51.2%$9,812
Total Originated Loans Outstanding$1,235,559 $1,351,839 -8.6%$1,242,224
Total Purchased Covered
Loans Outstanding (1) 11,027 14,061 -21.6% 11,745
Total Purchased Non-Covered
Loans Outstanding (2) 106,125 167,496 -36.6% 110,360
Total Loans Outstanding $1,352,711 $1,533,396 -11.8%$1,364,329
Total Assets $5,366,083 $5,168,875 3.8%$5,306,778
Loans:
Allowance for Loan Losses$25,954 $29,771 -12.8%$26,359
Allowance/Loans 1.92% 1.94% 1.93%
Nonperforming Loans/Total Loans 0.66% 1.00% 0.50%
Purchased Covered Loans (1):
Fair Value Discount on Purchased
Covered Loans$- $152 $-
Discount/Purchased Covered
Loans, gross 0.00% 1.07% 0.00%
Nonperforming Purchased Covered Loans/
Total Purchased Covered Loans 7.78% 0.00% 0.25%
Purchased Non-Covered Loans (2):
Fair Value Discount on Purchased
Non-Covered Loans$4,058 $6,432 $4,922
Discount/Purchased Non-Covered 3.68% 3.70% 4.27%
Loans, gross
Nonperforming Purchased Non-Covered Loans/
Total Purchased Non-Covered Loans 1.75% 4.98% 0.64%
10. Capital.
(in thousands, except per-share amounts)
%
12/31/1612/31/15Change9/30/16
Shareholders' Equity$561,367 $532,205 5.5%$562,996
Total Assets 5,366,083 5,168,875 3.8% 5,306,778
Shareholders' Equity/
Total Assets 10.46% 10.30% 10.61%
Shareholders' Equity/
Total Loans 41.50% 34.71% 41.27%
Tangible Common Equity Ratio 8.26% 7.94% 8.37%
Common Shares Outstanding 25,907 25,528 1.5% 25,665
Common Equity Per Share$21.67 $20.85 3.9%$21.94
Market Value Per Common Share$62.93 $46.75 34.6%$50.88
Share Repurchase Programs
(shares in thousands)
%
Q4'16Q4'15ChangeQ3'16
Total Shares Repurchased - 2 n/m -
Average Repurchase Price$- $43.01 n/m $-
Net Shares (Issued) Repurchased (242) 2 n/m (33)
%
12/31'16YTD12/31'15YTDChange
Total Shares Repurchased 137 344 n/m
Average Repurchase Price$41.94 $43.90 n/m
Net Shares (Issued) Repurchased (379) 217 n/m
11. Period-End Balance Sheets.
(unaudited, dollars in thousands)
%
12/31/1612/31/15Change9/30/16
Assets:
Cash and Due from Banks$462,271 $433,044 6.7%$471,367
Investment Securities:
Available For Sale 1,890,758 1,570,216 20.4% 1,762,408
Held to Maturity 1,346,312 1,316,075 2.3% 1,411,019
Loans 1,352,711 1,533,396 -11.8% 1,364,329
Allowance For Loan Losses (25,954) (29,771)-12.8% (26,359)
Total Loans, net 1,326,757 1,503,625 -11.8% 1,337,970
Other Real Estate Owned 3,095 9,264 -66.6% 3,032
Premises and Equipment, net 36,566 38,693 -5.5% 37,059
Identifiable Intangibles, net 6,927 10,431 -33.6% 7,789
Goodwill 121,673 121,673 0.0% 121,673
Other Assets 171,724 165,854 3.5% 154,461
Total Assets$5,366,083 $5,168,875 3.8%$5,306,778
Liabilities and Shareholders' Equity:
Deposits:
Noninterest Bearing$2,089,443 $2,026,049 3.1%$2,064,988
Interest-Bearing Transaction 865,701 860,706 0.6% 851,885
Savings 1,493,427 1,366,936 9.3% 1,462,860
Time 256,170 286,968 -10.7% 265,137
Total Deposits 4,704,741 4,540,659 3.6% 4,644,870
Short-Term Borrowed Funds 59,078 53,028 11.4% 56,358
Other Liabilities 40,897 42,983 -4.9% 42,554
Total Liabilities 4,804,716 4,636,670 3.6% 4,743,782
Shareholders' Equity:
Common Equity:
Paid-In Capital 406,139 381,436 6.5% 393,134
Accumulated Other
Comprehensive Income (10,074) 675 n/m 9,001
Retained Earnings 165,302 150,094 10.1% 160,861
Total Shareholders' Equity 561,367 532,205 5.5% 562,996
Total Liabilities and
Shareholders' Equity$5,366,083 $5,168,875 3.8%$5,306,778
12. Income Statements.
(unaudited, in thousands except per-share amounts)
%
Q4'16Q4'15ChangeQ3'16
Interest & Fee Income:
Loans$16,235 $18,798 -13.6%$16,968
Investment Securities:
Available for Sale 9,422 7,916 19.0% 8,796
Held to Maturity 7,552 7,174 5.3% 7,704
Total Interest & Fee Income 33,209 33,888 -2.0% 33,468
Interest Expense:
Transaction Deposits 58 70 -17.0% 64
Savings Deposits 230 218 5.7% 229
Time Deposits 203 266 -23.6% 219
Short-Term Borrowed Funds 9 9 -1.7% 11
Total Interest Expense 500 563 -11.2% 523
Net Interest Income 32,709 33,325 -1.8% 32,945
(Reversal of) Provision for Loan Losses - - n/m (3,200)
Noninterest Income:
Service Charges 5,064 5,259 -3.7% 5,303
Merchant Processing Services 1,678 1,368 22.7% 1,532
Debit Card Fees 1,566 1,557 0.6% 1,587
Other Service Fees 620 648 -4.3% 671
ATM Processing Fees 551 569 -3.2% 600
Trust Fees 682 671 1.7% 686
Financial Services Commissions 157 168 -6.3% 118
Other 1,227 1,065 15.2% 1,101
Total Noninterest Income 11,545 11,305 2.1% 11,598
Noninterest Expense:
Salaries and Benefits 12,439 12,398 0.3% 13,063
Occupancy 3,570 3,761 -5.1% 3,749
Outsourced Data Processing 2,131 2,107 1.1% 2,114
Amortization of Identifiable Intangibles 863 948 -9.0% 867
Professional Fees 797 614 29.8% 1,693
Furniture & Equipment 1,290 1,081 19.3% 1,211
Other Real Estate Owned 7 53 n/m (206)
Courier Service 494 585 -15.6% 451
Other 2,986 3,957 -24.5% 3,146
Total Noninterest Expense 24,577 25,504 -3.6% 26,088
Income Before Income Taxes 19,677 19,126 2.9% 21,655
Income Tax Provision 5,224 4,548 14.9% 6,027
Net Income$14,453 $14,578 -0.9%$15,628
Average Common Shares Outstanding 25,773 25,528 1.0% 25,641
Diluted Common Shares Outstanding 25,925 25,555 1.4% 25,687
Per Common Share Data:
Basic Earnings$0.56 $0.57 -1.8%$0.61
Diluted Earnings 0.56 0.57 -1.8% 0.61
Dividends Paid 0.39 0.39 0.0% 0.39
%
12/31'16YTD12/31'15YTDChange
Interest & Fee Income:
Loans$69,139 $78,441 -11.9%
Investment Securities:
Available for Sale 34,276 31,263 9.6%
Held to Maturity 30,636 26,825 14.2%
Total Interest & Fee Income 134,051 136,529 -1.8%
Interest Expense:
Transaction Deposits 259 260 -0.4%
Savings Deposits 907 852 6.4%
Time Deposits 911 1,258 -27.6%
Short-Term Borrowed Funds 39 53 -26.1%
Federal Home Loan Bank Advances - 1 n/m
Total Interest Expense 2,116 2,424 -12.7%
Net Interest Income 131,935 134,105 -1.6%
(Reversal of) Provision for Loan Losses (3,200) - n/m
Noninterest Income:
Service Charges 20,854 22,241 -6.2%
Merchant Processing Services 6,377 6,339 0.6%
Debit Card Fees 6,290 6,084 3.4%
Other Service Fees 2,571 2,689 -4.4%
ATM Processing Fees 2,411 2,397 0.6%
Trust Fees 2,686 2,732 -1.7%
Financial Services Commissions 568 695 -18.3%
Other 4,817 4,690 2.7%
Total Noninterest Income 46,574 47,867 -2.7%
Noninterest Expense:
Salaries and Benefits 51,507 52,192 -1.3%
Occupancy 14,116 14,960 -5.6%
Outsourced Data Processing 8,505 8,441 0.8%
Amortization of Identifiable Intangibles 3,504 3,856 -9.1%
Professional Fees 3,980 2,490 59.8%
Furniture & Equipment 4,901 4,434 10.5%
Other Real Estate Owned (479) 504 n/m
Courier Service 1,952 2,329 -16.2%
Other 13,766 16,094 -14.5%
Total Noninterest Expense 101,752 105,300 -3.4%
Income Before Income Taxes 79,957 76,672 4.3%
Income Tax Provision 21,104 17,919 17.8%
Net Income$58,853 $58,753 0.2%
Average Common Shares Outstanding 25,612 25,555 0.2%
Diluted Common Shares Outstanding 25,678 25,577 0.4%
Per Common Share Data:
Basic Earnings$2.30 $2.30 0.0%
Diluted Earnings 2.29 2.30 -0.4%
Dividends Paid 1.56 1.53 2.0%
Footnotes and Abbreviations:
(FTE) Fully Taxable Equivalent. The Company presents its net interest margin and net interest income
on a FTE basis using the current statutory federal tax rate, 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