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Westamerica Bancorporation Reports Second Quarter 2017 Financial Results

SAN RAFAEL, Calif., July 20, 2017 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq:WABC), parent company of Westamerica Bank, generated net income for the second quarter 2017 of $15.8 million and diluted earnings per common share ("EPS") of $0.60, compared to first quarter 2017 net income of $15.0 million and EPS of $0.57 and second quarter 2016 net income of $14.5 million and EPS of $0.57. Second quarter 2017 results include a $1.9 million reversal of provision for loan losses which accounted for $0.04 of the quarter’s EPS. First quarter 2017 results reflect the Company’s prospective adoption of a new accounting standard related to share based compensation tax benefits; first quarter 2017 EPS measured $0.02 higher than would have been measured under accounting standards applied in 2016. The new accounting standard did not affect second quarter 2017 results by a meaningful amount.

"Second quarter 2017 net income benefited from higher noninterest income and lower noninterest expense. While short-term market interest rates rose during the second quarter 2017, intermediate and long-term rates declined; the interest rate environment was not conducive for net interest margin improvement. Credit quality improved with non-performing assets declining $650 thousand during the second quarter 2017 to total $8.5 million at June 30, 2017,” said Chairman, President and CEO David Payne. “Westamerica generated an annualized 10.7 percent return on average shareholders’ common equity for the second quarter 2017, and paid a quarterly dividend of $0.39 per common share,” concluded Payne.

The annualized net interest margin on a fully taxable equivalent basis was 3.12 percent for the second quarter 2017, compared to 3.14 percent for the first quarter 2017, and 3.27 percent for the second quarter 2016. Net interest income on a fully taxable equivalent basis was $35.8 million for the second quarter 2017, compared to $36.0 million for the first quarter 2017, and $36.5 million for the second quarter 2016. The annualized funding cost of deposits and other interest-bearing borrowings, as a percentage of average earning assets, was 0.04 percent for the second quarter 2017, compared to 0.04 percent for the first quarter 2017 and 0.05 percent for the second quarter 2016. 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 95 percent of average total deposits during the second quarter 2017.

The Company recognized a reversal of provision for loan losses of $1.9 million for the second quarter 2017; during the quarter the Company realized net recoveries of prior loan losses of $1.1 million and nonperforming loans declined $159 thousand, totaling $6.9 million at June 30, 2017. The provision for loan losses was zero for the first quarter 2017 and second quarter 2016. At June 30, 2017, the allowance for loan losses totaled $24.1 million.

Noninterest income for the second quarter 2017 totaled $12.1 million, compared to $11.7 million for the first quarter 2017 and $11.7 million for the second quarter 2016. The second quarter 2017 improvement in noninterest income is primarily due to higher merchant processing fees.

Noninterest expense for the second quarter 2017 totaled $24.4 million, compared to $24.6 million for the first quarter 2017 and $25.2 million for the second quarter 2016. The $800 thousand reduction in noninterest expense from the second quarter 2016 to the second quarter 2017 was due to reductions in professional fees, correspondent service charges, insurance premiums, limited partnership operating losses, intangible amortization, and other expenses.

The income tax provision for 2017 reflects the prospective adoption of Accounting Standards Update (“ASU”) 2016-09, “Improvements to Employee Share-Based Payment Accounting”. Upon granting non-qualified stock options (“NQSO”), the Company estimates the fair value of the grant and records such value as compensation expense over the attribution period in its financial statements. At the time the NQSO grant is exercised, the ultimate value of the grant is determined and represents taxable income to the grantee and a tax deduction for the Company. The difference between the estimated fair value expensed for financial statement purposes and the realized amount deducted for tax purposes requires a reconciling adjustment to the Company’s tax accounts. Prior to ASU 2016-09, the Company recognized the balancing entry as an adjustment to shareholders’ equity; upon the January 1, 2017 required adoption of ASU 2016-09, the Company must recognize the balancing entry as an adjustment to the provision for income taxes. The Company’s fully-tax equivalent tax rate was 37.8 percent for the second quarter 2017, compared to 34.8 percent for the first quarter 2017 and 36.7 percent for the second quarter 2016. The fully-tax equivalent tax rate would have been 37.8 percent for the second quarter 2017 and 37.7 percent for the first quarter 2017 under accounting rules applied in 2016.

At June 30, 2017, Westamerica Bancorporation's tangible common equity-to-asset ratio was 8.90 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, 2016 filed on Form 10-K and quarterly report for the quarter ended March 31, 2017 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 20, 2017
WESTAMERICA BANCORPORATION
FINANCIAL HIGHLIGHTS
June 30, 2017
1. Net Income Summary.
(in thousands except per-share amounts)
%
Q2'17Q2'16ChangeQ1'17
Net Interest and Fee Income (FTE)$35,764 $36,495 -2.0%$36,030
(Reversal of) Provision for Loan Losses (1,900) - n/m -
Noninterest Income 12,123 11,702 3.6% 11,657
Noninterest Expense 24,396 25,229 -3.3% 24,615
Income Before Taxes (FTE) 25,391 22,968 10.5% 23,072
Income Tax Provision (FTE) 9,592 8,422 13.9% 8,023
Net Income$15,799 $14,546 8.6%$15,049
Average Common Shares Outstanding 26,299 25,586 2.8% 26,171
Diluted Average Common Shares 26,402 25,630 3.0% 26,329
Operating Ratios:
Basic Earnings Per Common Share$0.60 $0.57 5.3%$0.58
Diluted Earnings Per Common Share 0.60 0.57 5.3% 0.57
Return On Assets (a) 1.18% 1.13% 1.13%
Return On Common Equity (a) 10.7% 10.9% 10.5%
Net Interest Margin (FTE) (a) 3.12% 3.27% 3.14%
Efficiency Ratio (FTE) 50.9% 52.3% 51.6%
Dividends Paid Per Common Share$0.39 $0.39 0.0%$0.39
Common Dividend Payout Ratio 65% 68% 68%
%
06/30'17YTD06/30'16YTDChange
Net Interest and Fee Income (FTE)$71,794 $72,942 -1.6%
(Reversal of) Provision for Loan Losses (1,900) - n/m
Noninterest Income 23,780 23,431 1.5%
Noninterest Expense 49,011 51,087 -4.1%
Income Before Taxes (FTE) 48,463 45,286 7.0%
Income Tax Provision (FTE) 17,615 16,514 6.7%
Net Income$30,848 $28,772 7.2%
Average Common Shares Outstanding 26,235 25,516 2.8%
Diluted Average Common Shares 26,366 25,549 3.2%
Operating Ratios:
Basic Earnings Per Common Share$1.18 $1.13 4.4%
Diluted Earnings Per Common Share 1.17 1.13 3.5%
Return On Assets (a) 1.15% 1.12%
Return On Common Equity (a) 10.6% 10.9%
Net Interest Margin (FTE) (a) 3.13% 3.30%
Efficiency Ratio (FTE) 51.3% 53.0%
Dividends Paid Per Common Share$0.78 $0.78 0.0%
Common Dividend Payout Ratio 67% 69%
2. Net Interest Income.
(dollars in thousands)
%
Q2'17Q2'16ChangeQ1'17
Interest and Fee Income (FTE)$36,240 $37,036 -2.2%$36,510
Interest Expense 476 541 -12.1% 480
Net Interest and Fee Income (FTE)$35,764 $36,495 -2.0%$36,030
Average Earning Assets$4,598,296 $4,473,700 2.8%$4,620,001
Average Interest-
Bearing Liabilities 2,692,447 2,598,868 3.6% 2,704,472
Yield on Earning Assets (FTE) (a) 3.16% 3.32% 3.18%
Cost of Funds (a) 0.04% 0.05% 0.04%
Net Interest Margin (FTE) (a) 3.12% 3.27% 3.14%
Interest Expense/
Interest-Bearing Liabilities (a) 0.07% 0.08% 0.07%
Net Interest Spread (FTE) (a) 3.09% 3.24% 3.11%
%
06/30'17YTD06/30'16YTDChange
Interest and Fee Income (FTE)$72,750 $74,035 -1.7%
Interest Expense 956 1,093 -12.5%
Net Interest and Fee Income (FTE)$71,794 $72,942 -1.6%
Average Earning Assets$4,609,089 $4,427,507 4.1%
Average Interest-
Bearing Liabilities 2,698,426 2,600,138 3.8%
Yield on Earning Assets (FTE) (a) 3.17% 3.35%
Cost of Funds (a) 0.04% 0.05%
Net Interest Margin (FTE) (a) 3.13% 3.30%
Interest Expense/
Interest-Bearing Liabilities (a) 0.07% 0.08%
Net Interest Spread (FTE) (a) 3.10% 3.27%
3. Loans & Other Earning Assets.
(average volume, dollars in thousands)
%
Q2'17Q2'16ChangeQ1'17
Total Assets$5,385,085 $5,184,409 3.9%$5,395,783
Total Earning Assets 4,598,296 4,473,700 2.8% 4,620,001
Total Loans 1,333,135 1,455,050 -8.4% 1,355,250
Commercial Loans 349,979 356,629 -1.9% 354,896
Commercial RE Loans 566,570 611,996 -7.4% 558,485
Consumer Loans 416,586 486,425 -14.4% 441,869
Total Investment Securities 3,265,161 3,018,650 8.2% 3,264,751
Available For Sale (Market) 1,982,997 1,554,014 27.6% 1,941,028
Held To Maturity 1,282,164 1,464,636 -12.5% 1,323,723
Unrealized Gain (Loss) 3,438 33,820 n/m (1,676)
Loans/Deposits 28.6% 32.1% 28.9%
%
06/30'17YTD06/30'16YTDChange
Total Assets$5,390,404 $5,179,607 4.1%
Total Earning Assets 4,609,089 4,427,507 4.1%
Total Loans 1,344,132 1,477,833 -9.0%
Commercial Loans 352,424 363,380 -3.0%
Commercial RE Loans 562,550 621,269 -9.5%
Consumer Loans 429,158 493,184 -13.0%
Total Investment Securities 3,264,957 2,949,674 10.7%
Available For Sale (Market) 1,962,128 1,560,675 25.7%
Held To Maturity 1,302,829 1,388,999 -6.2%
Unrealized Gain 3,438 33,820 n/m
Loans/Deposits 28.7% 32.6%
4. Deposits, Other Interest-Bearing Liabilities & Equity.
(average volume, dollars in thousands)
%
Q2'17Q2'16ChangeQ1'17
Total Deposits$4,669,424 $4,531,751 3.0%$4,692,746
Noninterest Demand 2,048,155 1,994,803 2.7% 2,056,858
Interest Bearing Transaction 880,470 855,732 2.9% 880,387
Savings 1,491,283 1,404,322 6.2% 1,501,961
Time greater than $100K 110,762 119,475 -7.3% 112,140
Time less than $100K 138,754 157,419 -11.9% 141,400
Total Short-Term Borrowings 71,178 61,920 15.0% 68,584
Shareholders' Equity 593,028 537,987 10.2% 582,384
Demand Deposits/
Total Deposits 43.9% 44.0% 43.8%
Transaction & Savings
Deposits / Total Deposits 94.7% 93.9% 94.6%
%
06/30'17YTD06/30'16YTDChange
Total Deposits$4,681,021 $4,534,650 3.2%
Noninterest Demand 2,052,483 1,994,395 2.9%
Interest Bearing Transaction 880,429 864,098 1.9%
Savings 1,496,592 1,395,769 7.2%
Time greater than $100K 111,447 121,583 -8.3%
Time less than $100K 140,070 158,805 -11.8%
Total Short-Term Borrowings 69,888 59,883 16.7%
Shareholders' Equity 587,736 532,582 10.4%
Demand Deposits/
Total Deposits 43.8% 44.0%
Transaction & Savings
Deposits / Total Deposits 94.6% 93.8%
5. Interest Yields Earned & Rates Paid.
(dollars in thousands)
Q2'17
AverageIncome/Yield (a) /
VolumeExpenseRate
Interest & Fee Income Earned
Total Earning Assets (FTE)$4,598,296 $36,240 3.16%
Total Loans (FTE) 1,333,135 15,747 4.74%
Commercial Loans (FTE) 349,979 4,144 4.75%
Commercial RE Loans 566,570 8,011 5.67%
Consumer Loans 416,586 3,592 3.46%
Total Investments (FTE) 3,265,161 20,493 2.51%
Interest Expense Paid
Total Earning Assets 4,598,296 476 0.04%
Total Interest-Bearing Liabilities 2,692,447 476 0.07%
Total Interest-Bearing Deposits 2,621,269 465 0.07%
Interest-Bearing Transaction 880,470 57 0.03%
Savings 1,491,283 222 0.06%
Time less than $100K 138,754 81 0.23%
Time greater than $100K 110,762 105 0.38%
Total Short-Term Borrowings 71,178 11 0.06%
Net Interest Income and
Margin (FTE) $35,764 3.12%
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%
6. Noninterest Income.
(dollars in thousands except per-share amounts)
%
Q2'17Q2'16ChangeQ1'17
Service Charges on Deposits$4,945 $5,239 -5.6%$4,923
Merchant Processing Services 2,052 1,638 25.3% 1,875
Debit Card Fees 1,586 1,621 -2.1% 1,481
Other Service Fees 662 650 1.8% 650
ATM Processing Fees 654 603 8.6% 575
Trust Fees 716 657 8.9% 702
Financial Services Commissions 142 137 3.6% 195
Other Income 1,366 1,157 18.0% 1,256
Total Noninterest Income$12,123 $11,702 3.6%$11,657
Total Revenue (FTE)$47,887 $48,197 -0.6%$47,687
Noninterest Income/Revenue (FTE) 25.3% 24.3% 24.4%
Service Charges/Avg. Deposits (a) 0.42% 0.46% 0.43%
Total Revenues (FTE) Per Avg.
Common Share (a)$7.30 $7.58 -3.6%$7.39
%
06/30'17YTD06/30'16YTDChange
Service Charges on Deposits$9,868 $10,487 -5.9%
Merchant Processing Services 3,927 3,167 24.0%
Debit Card Fees 3,067 3,137 -2.2%
Other Service Fees 1,312 1,279 2.5%
ATM Processing Fees 1,229 1,261 -2.5%
Trust Fees 1,418 1,318 7.6%
Financial Services Commissions 337 293 15.0%
Other Income 2,622 2,489 5.3%
Total Noninterest Income$23,780 $23,431 1.5%
Total Revenue (FTE)$95,574 $96,373 -0.8%
Noninterest Income/Revenue (FTE) 24.9% 24.3%
Service Charges/Avg. Deposits (a) 0.43% 0.47%
Total Revenues (FTE) Per Avg.
Common Share (a)$7.35 $7.60 -3.3%
7. Noninterest Expense.
(dollars in thousands)
%
Q2'17Q2'16ChangeQ1'17
Salaries & Benefits$12,981 $12,887 0.7%$13,070
Occupancy 3,509 3,400 3.2% 3,633
Outsourced Data Processing 2,188 2,130 2.7% 2,139
Amortization of
Identifiable Intangibles 762 870 -12.4% 800
Professional Fees 410 758 -45.9% 611
Furniture & Equipment 1,267 1,187 6.8% 1,254
Other Real Estate Owned (126) (392)n/m (40)
Courier Service 438 462 -5.2% 421
Other Operating 2,967 3,927 -24.4% 2,727
Total Noninterest Expense$24,396 $25,229 -3.3%$24,615
Noninterest Expense/
Avg. Earning Assets (a) 2.13% 2.27% 2.16%
Noninterest Expense/Revenues (FTE) 50.9% 52.3% 51.6%
%
06/30'17YTD06/30'16YTDChange
Salaries & Benefits$26,051 $26,004 0.2%
Occupancy 7,142 6,798 5.1%
Outsourced Data Processing 4,327 4,260 1.6%
Amortization of
Identifiable Intangibles 1,562 1,775 -12.0%
Professional Fees 1,021 1,490 -31.4%
Furniture & Equipment 2,521 2,400 5.1%
Other Real Estate Owned (166) (281)n/m
Courier Service 859 1,007 -14.7%
Other Operating 5,694 7,634 -25.4%
Total Noninterest Expense$49,011 $51,087 -4.1%
Noninterest Expense/
Avg. Earning Assets (a) 2.14% 2.32%
Noninterest Expense/Revenues (FTE) 51.3% 53.0%
8. Allowance for Loan Losses.
(dollars in thousands)
%
Q2'17Q2'16ChangeQ1'17
Average Total Loans$1,333,135 $1,455,050 -8.4%$1,355,250
Allowance for Loan Loss (ALL)
Beginning of Period $24,919 $29,487 -15.5%$25,954
(Reversal of) Provision for Loan Losses (1,900) - n/m -
Net ALL Recoveries (Losses) 1,084 (577)n/m (1,035)
ALL End of Period$24,103 $28,910 -16.6%$24,919
ALL Recoveries/Gross ALL Losses 158% 61% 44%
Net ALL (Recoveries) Losses/
Avg. Total Loans (a) -0.33% 0.16% 0.31%
%
06/30'17YTD06/30'16YTDChange
Average Total Loans$1,344,132 $1,477,833 -9.0%
Allowance for Loan Loss (ALL)
Beginning of Period $25,954 $29,771 -12.8%
(Reversal of) Provision for Loan Losses (1,900) - n/m
Net ALL Recoveries (Losses) 49 (861)n/m
ALL End of Period$24,103 $28,910 -16.6%
ALL Recoveries/Gross ALL Losses 101% 76%
Net ALL (Recoveries) Losses/
Avg. Total Loans (a) -0.01% 0.12%
9. Credit Quality.
(dollars in thousands)
%
6/30/176/30/16Change3/31/17
Nonperforming Loans (1):
Nonperforming Nonaccrual$2,215 $6,527 -66.1%$2,382
Performing Nonaccrual 4,480 7,038 -36.3% 4,285
Total Nonaccrual Loans 6,695 13,565 -50.6% 6,667
90+ Days Past Due Accruing Loans 186 356 -47.8% 373
Total 6,881 13,921 -50.6% 7,040
Repossessed Loan Collateral (1) 1,645 4,162 -60.5% 2,136
Total Nonperforming Assets (1)$8,526 $18,083 -52.8%$9,176
Total Loans Outstanding $1,318,341 $1,429,560 -7.8%$1,351,090
Total Assets $5,393,350 $5,179,085 4.1%$5,395,947
Loans:
Allowance for Loan Losses$24,103 $28,910 -16.6%$24,919
Allowance/Loans 1.83% 2.02% 1.84%
Nonperforming Loans/Total Loans 0.52% 0.97% 0.52%
10. Capital.
(in thousands, except per-share amounts)
%
6/30/176/30/16Change3/31/17
Shareholders' Equity$595,594 $558,327 6.7%$584,888
Total Assets 5,393,350 5,179,085 4.1% 5,395,947
Shareholders' Equity/
Total Assets 11.04% 10.78% 10.84%
Shareholders' Equity/
Total Loans 45.18% 39.06% 43.29%
Tangible Common Equity Ratio 8.90% 8.48% 8.68%
Common Shares Outstanding 26,304 25,632 2.6% 26,283
Common Equity Per Share$22.64 $21.78 3.9%$22.25
Market Value Per Common Share$56.04 $49.26 13.8%$55.83
Share Repurchase Programs
(shares in thousands)
%
Q2'17Q2'16ChangeQ1'17
Total Shares Repurchased 6 7 n/m -
Average Repurchase Price$56.51 $49.35 n/m $-
Net Shares Issued (21) (194)n/m (376)
%
06/30'17YTD06/30'16YTDChange
Total Shares Repurchased 6 137 n/m
Average Repurchase Price$56.51 $41.94 n/m
Net Shares Issued (397) (104)n/m
11. Period-End Balance Sheets.
(unaudited, dollars in thousands)
%
6/30/176/30/16Change3/31/17
Assets:
Cash and Due from Banks$529,362 $441,785 19.8%$546,815
Investment Securities:
Available For Sale 1,976,156 1,531,035 29.1% 1,893,309
Held to Maturity 1,261,321 1,473,357 -14.4% 1,298,414
Loans 1,318,341 1,429,560 -7.8% 1,351,090
Allowance For Loan Losses (24,103) (28,910)-16.6% (24,919)
Total Loans, net 1,294,238 1,400,650 -7.6% 1,326,171
Other Real Estate Owned 1,645 4,162 -60.5% 2,136
Premises and Equipment, net 35,564 37,759 -5.8% 36,025
Identifiable Intangibles, net 5,365 8,656 -38.0% 6,127
Goodwill 121,673 121,673 0.0% 121,673
Other Assets 168,026 160,008 5.0% 165,277
Total Assets$5,393,350 $5,179,085 4.1%$5,395,947
Liabilities and Shareholders' Equity:
Deposits:
Noninterest Bearing$2,079,608 $1,978,947 5.1%$2,046,390
Interest-Bearing Transaction 885,516 827,857 7.0% 905,588
Savings 1,470,978 1,404,840 4.7% 1,494,854
Time 246,468 273,670 -9.9% 251,141
Total Deposits 4,682,570 4,485,314 4.4% 4,697,973
Short-Term Borrowed Funds 75,769 67,852 11.7% 73,611
Other Liabilities 39,417 67,592 -41.7% 39,475
Total Liabilities 4,797,756 4,620,758 3.8% 4,811,059
Shareholders' Equity:
Common Equity:
Paid-In Capital 426,012 391,213 8.9% 424,203
Accumulated Other
Comprehensive (Loss) Income (5,864) 11,885 n/m (9,443)
Retained Earnings 175,446 155,229 13.0% 170,128
Total Shareholders' Equity 595,594 558,327 6.7% 584,888
Total Liabilities and
Shareholders' Equity$5,393,350 $5,179,085 4.1%$5,395,947
12. Income Statements.
(unaudited, in thousands except per-share amounts)
%
Q2'17Q2'16ChangeQ1'17
Interest & Fee Income:
Loans$15,468 $17,583 -12.0%$15,780
Investment Securities:
Available for Sale 10,709 8,091 32.4% 10,249
Held to Maturity 6,986 8,053 -13.3% 7,295
Total Interest & Fee Income 33,163 33,727 -1.7% 33,324
Interest Expense:
Transaction Deposits 57 67 -14.9% 57
Savings Deposits 222 225 -1.2% 223
Time Deposits 186 239 -22.5% 189
Short-Term Borrowed Funds 11 10 12.3% 11
Total Interest Expense 476 541 -12.1% 480
Net Interest Income 32,687 33,186 -1.5% 32,844
(Reversal of) Provision for Loan Losses (1,900) - n/m -
Noninterest Income:
Service Charges 4,945 5,239 -5.6% 4,923
Merchant Processing Services 2,052 1,638 25.3% 1,875
Debit Card Fees 1,586 1,621 -2.1% 1,481
Other Service Fees 662 650 1.8% 650
ATM Processing Fees 654 603 8.6% 575
Trust Fees 716 657 8.9% 702
Financial Services Commissions 142 137 3.6% 195
Other 1,366 1,157 18.0% 1,256
Total Noninterest Income 12,123 11,702 3.6% 11,657
Noninterest Expense:
Salaries and Benefits 12,981 12,887 0.7% 13,070
Occupancy 3,509 3,400 3.2% 3,633
Outsourced Data Processing 2,188 2,130 2.7% 2,139
Amortization of Identifiable Intangibles 762 870 -12.4% 800
Professional Fees 410 758 -45.9% 611
Furniture & Equipment 1,267 1,187 6.8% 1,254
Other Real Estate Owned (126) (392)n/m (40)
Courier Service 438 462 -5.2% 421
Other 2,967 3,927 -24.4% 2,727
Total Noninterest Expense 24,396 25,229 -3.3% 24,615
Income Before Income Taxes 22,314 19,659 13.5% 19,886
Income Tax Provision 6,515 5,113 27.4% 4,837
Net Income$15,799 $14,546 8.6%$15,049
Average Common Shares Outstanding 26,299 25,586 2.8% 26,171
Diluted Common Shares Outstanding 26,402 25,630 3.0% 26,329
Per Common Share Data:
Basic Earnings$0.60 $0.57 5.3%$0.58
Diluted Earnings 0.60 0.57 5.3% 0.57
Dividends Paid 0.39 0.39 0.0% 0.39
%
06/30'17YTD06/30'16YTDChange
Interest & Fee Income:
Loans$31,248 $35,936 -13.0%
Investment Securities:
Available for Sale 20,958 16,058 30.5%
Held to Maturity 14,281 15,380 -7.1%
Total Interest & Fee Income 66,487 67,374 -1.3%
Interest Expense:
Transaction Deposits 114 137 -16.7%
Savings Deposits 445 448 -0.5%
Time Deposits 375 489 -23.4%
Short-Term Borrowed Funds 22 19 12.2%
Total Interest Expense 956 1,093 -12.5%
Net Interest Income 65,531 66,281 -1.1%
(Reversal of) Provision for Loan Losses (1,900) - n/m
Noninterest Income:
Service Charges 9,868 10,487 -5.9%
Merchant Processing Services 3,927 3,167 24.0%
Debit Card Fees 3,067 3,137 -2.2%
Other Service Fees 1,312 1,279 2.5%
ATM Processing Fees 1,229 1,261 -2.5%
Trust Fees 1,418 1,318 7.6%
Financial Services Commissions 337 293 15.0%
Other 2,622 2,489 5.3%
Total Noninterest Income 23,780 23,431 1.5%
Noninterest Expense:
Salaries and Benefits 26,051 26,004 0.2%
Occupancy 7,142 6,798 5.1%
Outsourced Data Processing 4,327 4,260 1.6%
Amortization of Identifiable Intangibles 1,562 1,775 -12.0%
Professional Fees 1,021 1,490 -31.4%
Furniture & Equipment 2,521 2,400 5.1%
Other Real Estate Owned (166) (281)n/m
Courier Service 859 1,007 -14.7%
Other 5,694 7,634 -25.4%
Total Noninterest Expense 49,011 51,087 -4.1%
Income Before Income Taxes 42,200 38,625 9.3%
Income Tax Provision 11,352 9,853 15.2%
Net Income$30,848 $28,772 7.2%
Average Common Shares Outstanding 26,235 25,516 2.8%
Diluted Common Shares Outstanding 26,366 25,549 3.2%
Per Common Share Data:
Basic Earnings$1.18 $1.13 4.4%
Diluted Earnings 1.17 1.13 3.5%
Dividends Paid 0.78 0.78 0.0%
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. 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) All originated and purchased non performing loans and repossessed loan collateral have been combined as of Q1 '17. Prior period presentation has been updated, accordingly.



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