Westamerica Bancorporation Reports Fourth Quarter 2017 Financial Results

SAN RAFAEL, Calif., Jan. 18, 2018 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the fourth quarter 2017 of $4.2 million and diluted earnings per common share ("EPS") of $0.16. Fourth quarter 2017 results include adjustments to asset values triggered by enactment of the Tax Cuts and Jobs Act of 2017 which reduced EPS $0.48, recognition of a loss contingency which reduced EPS $0.12, and securities gains which increased EPS $0.18. Fourth quarter 2017 results compare to third quarter 2017 net income of $15.0 million and EPS of $0.57, and to fourth quarter 2016 net income of $14.5 million and EPS of $0.56.

"Fourth quarter 2017 net income benefited from higher net interest income; Westamerica’s annualized net interest margin on a fully taxable equivalent basis increased to 3.12 percent in the fourth quarter 2017 from 3.10 percent in the third quarter 2017. The margin is supported by a relatively low cost of funding, which has been steady at 0.04 percent of loans and investments from the fourth quarter of 2016 through the fourth quarter 2017. Asset quality remains very high with nonperforming assets totaling only $7.9 million at December 31, 2017 and net loan losses for the year 2017 were just 0.08 percent of average loan balances,” said Chairman, President and CEO David Payne. “After the accounting charges required by the new tax law, Westamerica’s capital position remains solid with total capital to assets of 10.7 percent at December 31, 2017 compared to 11.1 percent at September 30, 2017. Westamerica increased its quarterly dividend to $0.40 per common share in the fourth quarter 2017,” concluded Payne.

The annualized net interest margin on a fully taxable equivalent basis was 3.12 percent for the fourth quarter 2017, compared to 3.10 percent for the third quarter 2017, and 3.15 percent for the fourth quarter 2016. Net interest income on a fully taxable equivalent basis was $36.6 million for the fourth quarter 2017, compared to $35.7 million for the third quarter 2017, and $36.0 million for the fourth quarter 2016. The annualized funding cost of deposits and other interest-bearing borrowings, as a percentage of average earning assets, was unchanged at 0.04 percent for the fourth quarter 2017, third quarter 2017, and fourth 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 fourth quarter 2017.

The Company recognized no provision for loan losses for the fourth quarter 2017 given stable nonperforming loan volumes and other credit quality attributes. At December 31, 2017, the allowance for loan losses totaled $23.0 million.

Noninterest income for the fourth quarter 2017 totaled $20.3 million, including $8.0 million in securities gains, compared to $12.5 million for the third quarter 2017 and $11.5 million for the fourth quarter 2016. Merchant processing fees were $2.3 million for the fourth quarter 2017, $2.2 million for the third quarter 2017 and $1.7 million for the fourth quarter 2016; the increase is due to successful sales efforts and increased processing volumes.

Noninterest expense for the fourth quarter 2017 totaled $30.2 million, including a $625 thousand impairment of low income housing limited partnership investments due to enactment of the Tax Cuts and Jobs Act of 2017 and a $5.5 million loss contingency accrual. As disclosed in the Company’s Form 8-K filed October 19, 2017 and Form 10-Q filed November 3, 2017, the Company has determined that it is obligated to provide refunds of revenue recognized in prior years to some customers; the Company has estimated the probable amount of these obligations and accrued a liability as of December 31, 2017.

The book tax provision on a fully taxable equivalent basis for the fourth quarter 2017 totaled $22.6 million, of which $12.3 million represents the charge to re-measure the Company’s net deferred tax asset triggered by enactment of the Tax Cuts and Jobs Act of 2017.

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

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


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 September 30, 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 January 18, 2018
WESTAMERICA BANCORPORATION
FINANCIAL HIGHLIGHTS
December 31, 2017
1. Net Income Summary.
(in thousands except per-share amounts)
%
Q4'17Q4'16ChangeQ3'17
Net Interest and Fee Income (FTE)$36,644 $35,959 1.9%$35,680
Reversal of Provision for Loan Losses - - n/m -
Noninterest Income20,300 11,545 75.8%12,548
Noninterest Expense30,167 24,577 22.7%24,114
Income Before Taxes (FTE)26,777 22,927 16.8%24,114
Income Tax Provision (FTE)22,617 8,474 n/m 9,097
Net Income$4,160 $14,453 -71.2%$15,017
Average Common Shares Outstanding26,384 25,773 2.4%26,309
Diluted Average Common Shares26,538 25,925 2.4%26,404
Operating Ratios:
Basic Earnings Per Common Share$0.16 $0.56 -71.4%$0.57
Diluted Earnings Per Common Share0.16 0.56 -71.4%0.57
Return On Assets (a)0.30%1.07% 1.09%
Return On Common Equity (a)2.7%10.3% 9.9%
Net Interest Margin (FTE) (a)3.12%3.15% 3.10%
Efficiency Ratio (FTE)53.0%51.7% 50.0%
Dividends Paid Per Common Share$0.40 $0.39 2.6%$0.39
Common Dividend Payout Ratio 250%70% 68%
%
12/31'17YTD12/31'16YTDChange
Net Interest and Fee Income (FTE)$144,118 $145,077 -0.7%
Reversal of Provision for Loan Losses (1,900) (3,200)n/m
Noninterest Income56,628 46,574 21.6%
Noninterest Expense103,292 101,752 1.5%
Income Before Taxes (FTE)99,354 93,099 6.7%
Income Tax Provision (FTE)49,329 34,246 44.0%
Net Income$50,025 $58,853 -15.0%
Average Common Shares Outstanding26,291 25,612 2.7%
Diluted Average Common Shares26,419 25,678 2.9%
Operating Ratios:
Basic Earnings Per Common Share$1.90 $2.30 -17.4%
Diluted Earnings Per Common Share1.89 2.29 -17.5%
Return On Assets0.92%1.12%
Return On Common Equity8.4%10.9%
Net Interest Margin (FTE)3.12%3.24%
Efficiency Ratio (FTE)51.5%53.1%
Dividends Paid Per Common Share$1.57 $1.56 0.6%
Common Dividend Payout Ratio 83%68%
2. Net Interest Income.
(dollars in thousands)
%
Q4'17Q4'16ChangeQ3'17
Interest and Fee Income (FTE)$37,115 $36,459 1.8%$36,153
Interest Expense471 500 -5.8%473
Net Interest and Fee Income (FTE)$36,644 $35,959 1.9%$35,680
Average Earning Assets$4,682,897 $4,561,619 2.7%$4,587,848
Average Interest-
Bearing Liabilities2,701,190 2,681,585 0.7%2,687,620
Yield on Earning Assets (FTE) (a)3.16%3.19% 3.14%
Cost of Funds (a)0.04%0.04% 0.04%
Net Interest Margin (FTE) (a)3.12%3.15% 3.10%
Interest Expense/
Interest-Bearing Liabilities (a)0.07%0.07% 0.07%
Net Interest Spread (FTE) (a)3.09%3.12% 3.07%
%
12/31'17YTD12/31'16YTDChange
Interest and Fee Income (FTE)$146,018 $147,193 -0.8%
Interest Expense1,900 2,116 -10.2%
Net Interest and Fee Income (FTE)$144,118 $145,077 -0.7%
Average Earning Assets$4,622,339 $4,476,755 3.3%
Average Interest-
Bearing Liabilities2,696,399 2,624,688 2.7%
Yield on Earning Assets (FTE)3.16%3.29%
Cost of Funds0.04%0.05%
Net Interest Margin (FTE)3.12%3.24%
Interest Expense/
Interest-Bearing Liabilities0.07%0.08%
Net Interest Spread (FTE)3.09%3.21%
3. Loans & Other Earning Assets.
(average volume, dollars in thousands)
%
Q4'17Q4'16ChangeQ3'17
Total Assets$5,534,700 $5,370,412 3.1%$5,441,612
Total Earning Assets4,682,897 4,561,619 2.7%4,587,848
Total Loans1,285,748 1,356,350 -5.2%1,287,740
Commercial Loans327,790 349,022 -6.1%324,727
Commercial RE Loans 575,984 546,145 5.5%566,794
Consumer Loans381,974 461,183 -17.2%396,219
Total Investment Securities3,397,149 3,205,269 6.0%3,300,108
Available For Sale (Market)2,216,054 1,821,998 21.6%2,066,568
Held To Maturity1,181,095 1,383,271 -14.6%1,233,540
Unrealized (Loss) Gain(3,522)(5,571)n/m4,039
Loans/Deposits26.7%28.8% 27.3%
%
12/31'17YTD12/31'16YTDChange
Total Assets$5,439,682 $5,246,144 3.7%
Total Earning Assets4,622,339 4,476,755 3.3%
Total Loans1,315,202 1,424,259 -7.7%
Commercial Loans339,234 354,831 -4.4%
Commercial RE Loans 567,006 590,012 -3.9%
Consumer Loans408,962 479,416 -14.7%
Total Investment Securities3,307,137 3,052,496 8.3%
Available For Sale (Market)2,052,456 1,651,500 24.3%
Held To Maturity1,254,681 1,400,996 -10.4%
Unrealized Loss(3,522)(5,571)n/m
Loans/Deposits27.9%31.0%
4. Deposits, Other Interest-Bearing Liabilities & Equity.
(average volume, dollars in thousands)
%
Q4'17Q4'16ChangeQ3'17
Total Deposits$4,811,035 $4,702,129 2.3%$4,714,579
Noninterest Demand 2,172,678 2,077,213 4.6%2,103,042
Interest Bearing Transaction899,822 871,947 3.2%891,532
Savings1,501,872 1,492,748 0.6%1,475,969
Time greater than $100K106,746 113,781 -6.2%108,673
Time less than $100K129,917 146,440 -11.3%135,363
Total Short-Term Borrowings62,833 56,669 10.9%76,083
Shareholders' Equity610,200 558,057 9.3%599,473
Demand Deposits/
Total Deposits45.2%44.2% 44.6%
Transaction & Savings
Deposits / Total Deposits95.1%94.5% 94.8%
12/31'17YTD12/31'16YTDChange
Total Deposits$4,722,250 $4,590,351 2.9%
Noninterest Demand 2,095,522 2,026,939 3.4%
Interest Bearing Transaction888,116 862,581 3.0%
Savings1,492,725 1,428,059 4.5%
Time greater than $100K109,563 118,750 -7.7%
Time less than $100K136,324 154,022 -11.5%
Total Short-Term Borrowings69,671 61,276 13.7%
Shareholders' Equity596,356 542,301 10.0%
Demand Deposits/
Total Deposits44.4%44.2%
Transaction & Savings
Deposits / Total Deposits94.8%94.1%
5. Interest Yields Earned & Rates Paid.
(dollars in thousands)
Q4'17
AverageIncome/Yield (a) /
VolumeExpenseRate
Interest & Fee Income Earned
Total Earning Assets (FTE)$4,682,897 $37,115 3.16%
Total Loans (FTE) 1,285,748 15,671 4.84%
Commercial Loans (FTE)327,790 4,168 5.05%
Commercial RE Loans 575,984 8,009 5.52%
Consumer Loans381,974 3,494 3.63%
Total Investments (FTE)3,397,149 21,444 2.52%
Interest Expense Paid
Total Earning Assets 4,682,897 471 0.04%
Total Interest-Bearing Liabilities2,701,190 471 0.07%
Total Interest-Bearing Deposits2,638,357 461 0.07%
Interest-Bearing Transaction899,822 60 0.03%
Savings1,501,872 225 0.06%
Time less than $100K129,917 75 0.23%
Time greater than $100K106,746 101 0.38%
Total Short-Term Borrowings 62,833 10 0.06%
Net Interest Income and
Margin (FTE) $36,644 3.12%
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 Loans461,183 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 Liabilities2,681,585 500 0.07%
Total Interest-Bearing Deposits2,624,916 491 0.07%
Interest-Bearing Transaction871,947 58 0.03%
Savings1,492,748 230 0.06%
Time less than $100K146,440 90 0.24%
Time greater than $100K113,781 113 0.40%
Total Short-Term Borrowings 56,669 9 0.06%
Net Interest Income and
Margin (FTE) $35,959 3.15%
6. Noninterest Income.
(dollars in thousands except per-share amounts)
%
Q4'17Q4'16ChangeQ3'17
Service Charges on Deposits$4,756 $5,064 -6.1%$4,989
Merchant Processing Services2,346 1,678 39.8%2,153
Debit Card Fees1,569 1,566 0.2%1,784
Other Service Fees620 620 0.1%652
ATM Processing Fees696 551 26.4%684
Trust Fees739 682 8.4%718
Financial Services Commissions155 157 -1.4%148
Securities Gains7,955 - n/m -
Other Income1,464 1,227 19.3%1,420
Total Noninterest Income$20,300 $11,545 75.8%$12,548
Total Revenue (FTE)$56,944 $47,504 19.9%$48,228
Noninterest Income/Revenue (FTE)35.6%24.3% 26.0%
Service Charges/Avg. Deposits (a)0.39%0.43% 0.42%
Total Revenues (FTE) Per Avg.
Common Share (a)$8.56 $7.33 16.8%$7.27
%
12/31'17YTD12/31'16YTDChange
Service Charges on Deposits$19,612 $20,854 -6.0%
Merchant Processing Services8,426 6,377 32.1%
Debit Card Fees6,421 6,290 2.1%
Other Service Fees2,584 2,571 0.5%
ATM Processing Fees2,610 2,411 8.2%
Trust Fees2,875 2,686 7.0%
Financial Services Commissions639 568 12.6%
Securities Gains7,955 - n/m
Other Income5,506 4,817 14.3%
Total Noninterest Income$56,628 $46,574 21.6%
Total Revenue (FTE)$200,746 $191,651 4.7%
Noninterest Income/Revenue (FTE)28.2%24.3%
Service Charges/Avg. Deposits0.42%0.45%
Total Revenues (FTE) Per Avg.
Common Share$7.64 $7.48 2.0%
7. Noninterest Expense.
(dollars in thousands)
%
Q4'17Q4'16ChangeQ3'17
Salaries & Benefits$12,652 $12,439 1.7%$12,816
Loss Contingency (2)5,542 3 n/m -
Occupancy and Equipment4,860 4,860 0.0%4,907
Outsourced Data Processing2,325 2,131 9.1%2,383
Amortization of
Identifiable Intangibles755 863 -12.4%760
Professional Fees627 797 -21.3%512
Impairment of Tax Credit Investments625 - n/m -
Courier Service423 494 -14.4%451
Other Operating2,358 2,990 -21.2%2,285
Total Noninterest Expense$30,167 $24,577 22.7%$24,114
Noninterest Expense/
Avg. Earning Assets (a)2.56%2.14% 2.09%
Noninterest Expense/Revenues (FTE)53.0%51.7% 50.0%
%
12/31'17YTD12/31'16YTDChange
Salaries & Benefits$51,519 $51,507 0.0%
Loss Contingency (2)5,542 3 n/m
Occupancy and Equipment19,430 19,017 2.2%
Outsourced Data Processing9,035 8,505 6.2%
Amortization of
Identifiable Intangibles3,077 3,504 -12.2%
Professional Fees2,161 3,980 -45.7%
Impairment of Tax Credit Investments625 - n/m
Courier Service1,732 1,952 -11.3%
Other Operating10,171 13,284 -23.4%
Total Noninterest Expense$103,292 $101,752 1.5%
Noninterest Expense/
Avg. Earning Assets2.23%2.27%
Noninterest Expense/Revenues (FTE)51.5%53.1%
8. Allowance for Loan Losses.
(dollars in thousands)
%
Q4'17Q4'16ChangeQ3'17
Average Total Loans$1,285,748 $1,356,350 -5.2%$1,287,740
Allowance for Loan Loss (ALL)
Beginning of Period $23,628 $26,359 -10.4%$24,103
Reversal of Provision for Loan Losses - - n/m -
Net ALL Losses(619)(405)n/m (475)
ALL End of Period$23,009 $25,954 -11.3%$23,628
ALL Recoveries/Gross ALL Losses 47%66% 53%
Net ALL Losses /Avg. Total Loans (a)0.19%0.12% 0.15%
%
12/31'17YTD12/31'16YTDChange
Average Total Loans$1,315,202 $1,424,259 -7.7%
Allowance for Loan Loss (ALL)
Beginning of Period $25,954 $29,771 -12.8%
Reversal of Provision for Loan Losses (1,900) (3,200)n/m
Net ALL Losses(1,045)(617)n/m
ALL End of Period$23,009 $25,954 -11.3%
ALL Recoveries/Gross ALL Losses 82%91%
Net ALL Losses /Avg. Total Loans0.08%0.04%
9. Credit Quality.
(dollars in thousands)
%
12/31/1712/31/16Change9/30/17
Nonperforming Loans (1):
Nonperforming Nonaccrual$1,641 $3,956 -58.5%$1,498
Performing Nonaccrual 4,285 4,429 -3.2% 4,285
Total Nonaccrual Loans5,926 8,385 -29.3%5,783
90+ Days Past Due Accruing Loans531 497 6.8%434
Total6,457 8,882 -27.3%6,217
Repossessed Loan Collateral (1)1,426 3,095 -53.9%1,426
Total Nonperforming Assets (1)$7,883 $11,977 -34.2%$7,643
Total Loans Outstanding $1,287,982 $1,352,711 -4.8%$1,284,782
Total Assets $5,513,046 $5,366,083 2.7%$5,445,808
Loans:
Allowance for Loan Losses$23,009 $25,954 -11.3%$23,628
Allowance/Loans1.79%1.92% 1.84%
Nonperforming Loans/Total Loans0.50%0.66% 0.48%
10. Capital.
(in thousands, except per-share amounts)
%
12/31/1712/31/16Change9/30/17
Shareholders' Equity$590,239 $561,367 5.1%$603,957
Total Assets5,513,046 5,366,083 2.7%5,445,808
Shareholders' Equity/
Total Assets10.71%10.46% 11.09%
Shareholders' Equity/
Total Loans45.83%41.50% 47.01%
Tangible Common Equity Ratio8.63%8.26% 8.98%
Common Shares Outstanding26,425 25,907 2.0%26,319
Common Equity Per Share$22.34 $21.67 3.1%$22.95
Market Value Per Common Share$59.55 $62.93 -5.4%$59.54
Share Repurchase Programs
(shares in thousands)
%
Q4'17Q4'16ChangeQ3'17
Total Shares Repurchased - - n/m -
Average Repurchase Price$- $- n/m $-
Net Shares Issued(106)(242)n/m (15)
%
12/31'17YTD12/31'16YTDChange
Total Shares Repurchased6 137 n/m
Average Repurchase Price$56.51 $41.94 n/m
Net Shares Issued(518)(379)n/m
11. Period-End Balance Sheets.
(unaudited, dollars in thousands)
%
12/31/1712/31/16Change9/30/17
Assets:
Cash and Due from Banks$575,002 $462,271 24.4%$561,757
Investment Securities:
Available For Sale2,193,507 1,890,758 16.0%2,090,477
Held to Maturity1,158,864 1,346,312 -13.9%1,204,240
Loans1,287,982 1,352,711 -4.8%1,284,782
Allowance For Loan Losses(23,009)(25,954)-11.3%(23,628)
Total Loans, net1,264,973 1,326,757 -4.7%1,261,154
Other Real Estate Owned1,426 3,095 -53.9%1,426
Premises and Equipment, net35,301 36,566 -3.5%35,507
Identifiable Intangibles, net3,850 6,927 -44.4%4,605
Goodwill 121,673 121,673 0.0%121,673
Other Assets158,450 171,724 -7.7%164,969
Total Assets$5,513,046 $5,366,083 2.7%$5,445,808
Liabilities and Shareholders' Equity:
Deposits:
Noninterest Bearing$2,197,526 $2,089,443 5.2%$2,128,342
Interest-Bearing Transaction904,245 865,701 4.5%873,145
Savings1,494,024 1,493,427 0.0%1,491,168
Time231,818 256,170 -9.5%241,925
Total Deposits4,827,613 4,704,741 2.6%4,734,580
Short-Term Borrowed Funds58,471 59,078 -1.0%66,337
Other Liabilities36,723 40,897 -10.2%40,934
Total Liabilities4,922,807 4,804,716 2.5%4,841,851
Shareholders' Equity:
Common Equity:
Paid-In Capital433,267 406,139 6.7%427,188
Accumulated Other
Comprehensive Loss(16,832)(10,074)n/m (3,433)
Retained Earnings173,804 165,302 5.1%180,202
Total Shareholders' Equity590,239 561,367 5.1%603,957
Total Liabilities and
Shareholders' Equity$5,513,046 $5,366,083 2.7%$5,445,808
12. Income Statements.
(unaudited, in thousands except per-share amounts)
%
Q4'17Q4'16ChangeQ3'17
Interest & Fee Income:
Loans$15,410 $16,235 -5.1%$15,082
Investment Securities:
Available for Sale12,359 9,422 31.2%11,347
Held to Maturity6,435 7,552 -14.8%6,716
Total Interest & Fee Income34,204 33,209 3.0%33,145
Interest Expense:
Transaction Deposits60 58 3.1%60
Savings Deposits225 230 -2.3%220
Time Deposits176 203 -13.1%181
Short-Term Borrowed Funds10 9 13.6%12
Total Interest Expense471 500 -5.8%473
Net Interest Income33,733 32,709 3.1%32,672
Reversal of Provision for Loan Losses - - n/m -
Noninterest Income:
Service Charges 4,756 5,064 -6.1%4,989
Merchant Processing Services2,346 1,678 39.8%2,153
Debit Card Fees1,569 1,566 0.2%1,784
Other Service Fees620 620 0.1%652
ATM Processing Fees696 551 26.4%684
Trust Fees739 682 8.4%718
Financial Services Commissions155 157 -1.4%148
Securities Gains7,955 - n/m -
Other1,464 1,227 19.3%1,420
Total Noninterest Income20,300 11,545 75.8%12,548
Noninterest Expense:
Salaries and Benefits12,652 12,439 1.7%12,816
Loss Contingency (2)5,542 3 n/m -
Occupancy and Equipment4,860 4,860 0.0%4,907
Outsourced Data Processing2,325 2,131 9.1%2,383
Amortization of Identifiable Intangibles755 863 -12.4%760
Professional Fees627 797 -21.3%512
Impairment of Tax Credit Investments625 - n/m -
Courier Service423 494 -14.4%451
Other2,358 2,990 -21.2%2,285
Total Noninterest Expense30,167 24,577 22.7%24,114
Income Before Income Taxes23,866 19,677 21.3%21,106
Income Tax Provision19,706 5,224 n/m 6,089
Net Income$4,160 $14,453 -71.2%$15,017
Average Common Shares Outstanding26,384 25,773 2.4%26,309
Diluted Common Shares Outstanding26,538 25,925 2.4%26,404
Per Common Share Data:
Basic Earnings$0.16 $0.56 -71.4%$0.57
Diluted Earnings0.16 0.56 -71.4%0.57
Dividends Paid0.40 0.39 2.6%0.39
%
12/31'17YTD12/31'16YTDChange
Interest & Fee Income:
Loans$61,740 $69,139 -10.7%
Investment Securities:
Available for Sale44,664 34,276 30.3%
Held to Maturity27,432 30,636 -10.5%
Total Interest & Fee Income133,836 134,051 -0.2%
Interest Expense:
Transaction Deposits233 259 -10.0%
Savings Deposits890 907 -1.8%
Time Deposits733 911 -19.6%
Short-Term Borrowed Funds44 39 12.5%
Total Interest Expense1,900 2,116 -10.2%
Net Interest Income131,936 131,935 0.0%
Reversal of Provision for Loan Losses (1,900) (3,200)n/m
Noninterest Income:
Service Charges 19,612 20,854 -6.0%
Merchant Processing Services8,426 6,377 32.1%
Debit Card Fees6,421 6,290 2.1%
Other Service Fees2,584 2,571 0.5%
ATM Processing Fees2,610 2,411 8.2%
Trust Fees2,875 2,686 7.0%
Financial Services Commissions639 568 12.6%
Securities Gains7,955 - n/m
Other5,506 4,817 14.3%
Total Noninterest Income56,628 46,574 21.6%
Noninterest Expense:
Salaries and Benefits51,519 51,507 0.0%
Loss Contingency (2)5,542 3 n/m
Occupancy and Equipment19,430 19,017 2.2%
Outsourced Data Processing9,035 8,505 6.2%
Amortization of Identifiable Intangibles3,077 3,504 -12.2%
Professional Fees2,161 3,980 -45.7%
Impairment of Tax Credit Investments625 - n/m
Courier Service1,732 1,952 -11.3%
Other10,171 13,284 -23.4%
Total Noninterest Expense103,292 101,752 1.5%
Income Before Income Taxes87,172 79,957 9.0%
Income Tax Provision37,147 21,104 76.0%
Net Income$50,025 $58,853 -15.0%
Average Common Shares Outstanding26,291 25,612 2.7%
Diluted Common Shares Outstanding26,419 25,678 2.9%
Per Common Share Data:
Basic Earnings$1.90 $2.30 -17.4%
Diluted Earnings1.89 2.29 -17.5%
Dividends Paid1.57 1.56 0.6%
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. 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.
(2) Represents the Company's estimated refunds to customers of revenue recognized in prior years.


Source:Westamerica Bancorporation