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Westamerica Bancorporation Reports Third Quarter 2012 Earnings

SAN RAFAEL, Calif., Oct. 17, 2012 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq:WABC), parent company of Westamerica Bank, today reported net income for the third quarter 2012 of $20.0 million and diluted earnings per common share ("EPS") of $0.73. Third quarter 2012 results compare to net income of $21.0 million and EPS of $0.75 for the prior quarter, and net income of $22.4 million and EPS of $0.79 for the third quarter 2011. Third quarter 2012 net income represented an annualized return on shareholders' equity of 14.7 percent.

"Westamerica continues to deliver relatively high levels of profitability in a difficult operating environment. We are focused on operating in a low-cost, efficient manner while banking industry revenues are pressured by low interest rates, increased regulation, and aggressive competition. During the third quarter, we spent only 46 percent of our revenue on operating costs, delivering approximately 32 percent of our revenue, after-taxes, to the bottom line for shareholders. Credit quality continued to improve with nonperforming assets declining to $71 million at September 30, 2012," said Chairman, President and CEO David Payne. "Westamerica paid a $0.37 per common share dividend in the third quarter 2012, and retired 225 thousand common shares using our share repurchase plan. Westamerica's capital ratios remain at historically high levels exceeding the highest regulatory guidelines," added Payne.

Net interest income on a fully taxable equivalent basis was $48.7 million for the third quarter 2012, compared to $50.3 million for the prior quarter and $54.7 million for the third quarter 2011. The change in net interest income is due to reductions in yields on loans and investment securities, which have declined during this period of low market interest rates. The change in net interest income is also attributable to reduced loan volumes, placing greater reliance on lower-yielding investment securities. Loan volumes have declined due to problem loan workout activities, particularly with purchased loans, and reduced volumes of loan originations. In Management's opinion, current levels of competitive loan pricing do not provide adequate forward earnings potential, and competitive loan underwriting standards are loosening, causing newly originated loans to contain higher levels of credit risk; Management is avoiding low-yielding higher-risk loan originations. To offset the decline in interest income, interest expense has been reduced by lowering rates paid on interest-bearing deposits and borrowings and by reducing the volume of higher-cost funding sources. The interest cost of funding the Company's loans and investment securities has declined to 0.13 percent in the third quarter 2012 from 0.15 percent in the prior quarter and 0.20 percent in the third quarter 2011. The third quarter 2012 net interest margin on a fully taxable equivalent basis was 4.67 percent, compared to 4.89 percent for the prior quarter and 5.32 percent for the third quarter 2011.

The provision for loan losses was $2.8 million for the third quarter 2012, unchanged from the prior quarter and third quarter 2011. Net loan losses charged against the allowance for loan losses totaled $3.4 million for the third quarter 2012, compared to $3.2 million for the prior quarter and $2.9 million for the third quarter 2011. At September 30, 2012, the allowance for loan losses totaled $31.0 million; nonperforming originated loans totaled $13.5 million; nonperforming purchased FDIC-indemnified loans totaled $20.7 million, net of purchase discounts of $2.8 million; and nonperforming purchased non-indemnified loans totaled $10.1 million, net of purchase discounts of $2.2 million.

Noninterest income for the third quarter 2012 totaled $14.6 million, compared to $13.5 million in the second quarter 2012 and $15.2 million for the third quarter 2011. The decline in second quarter 2012 noninterest income is primarily due to a $1.3 million loss realized from the sale of a collateralized mortgage obligation bond, which reduced net income $750 thousand.

Noninterest expense for the third quarter 2012 totaled $29.3 million, compared to $29.3 million in the prior quarter and $31.4 million in the third quarter 2011. Management is focused on reducing operating expenses over the near-term, primarily professional fees, repossessed loan collateral expenses and other problem loan related costs.

The Company's fully tax-equivalent tax rate was 36 percent in the third quarter 2012 compared to 34 percent in the second quarter 2012 and 37 percent in the third quarter 2011. The decline in tax rate in the second quarter 2012 is attributable to a tax refund from an amended tax return which increased net income $950 thousand.

At September 30, 2012, Westamerica Bancorporation's tangible common equity-to-asset ratio was 8.8 percent, assets totaled $4.9 billion and loans outstanding totaled $2.2 billion. Westamerica Bancorporation, through its wholly owned subsidiary Westamerica Bank, operates commercial banking and trust offices throughout Northern and Central California.

Westamerica Bancorporation Web Address: www.westamerica.com


The Westamerica Bancorporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3638

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, 2011 filed on Form 10-K and quarterly report for the quarter ended June 30, 2012 filed on Form 10-Q, describe some of these factors, including certain credit, market, operational, liquidity and interest rate 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 17, 2012
WESTAMERICA BANCORPORATION
FINANCIAL HIGHLIGHTS
September 30, 2012
1. Net Income Summary.
(in thousands except per-share amounts)
%
Q3'12 Q3'11 Change Q2'12
Net Interest Income (FTE) $48,712 $54,675 -10.9% $50,333
Provision for Loan Losses 2,800 2,800 0.0% 2,800
Noninterest Income:
Loss on Sale of Securities -- -- n/m (1,287)
Other 14,626 15,205 -3.8% 14,820
Total Noninterest Income 14,626 15,205 -3.8% 13,533
Noninterest Expense 29,269 31,383 -6.7% 29,349
Income Before Taxes (FTE) 31,269 35,697 -12.4% 31,717
Income Tax Provision (FTE) 11,247 13,265 -15.2% 10,753
Net Income $20,022 $22,432 -10.7% $20,964
Average Common Shares Outstanding 27,513 28,433 -3.2% 27,744
Diluted Average Common Shares 27,565 28,498 -3.3% 27,790
Operating Ratios:
Basic Earnings Per Common Share $0.73 $0.79 -7.6% $0.76
Diluted Earnings Per Common Share 0.73 0.79 -7.6% 0.75
Return On Assets (a) 1.63% 1.81% 1.69%
Return On Common Equity (a) 14.7% 16.4% 15.6%
Net Interest Margin (FTE) (a) 4.67% 5.32% 4.89%
Efficiency Ratio (FTE) 46.2% 44.9% 46.0%
Dividends Paid Per Common Share $0.37 $0.36 2.8% $0.37
Common Dividend Payout Ratio 51% 46% 49%
%
9/30'12YTD 9/30'11YTD Change
Net Interest Income (FTE) $150,743 $165,506 -8.9%
Provision for Loan Losses 8,400 8,400 0.0%
Noninterest Income:
Loss on Sale of Securities (1,287) -- n/m
Other 44,115 45,239 -2.5%
Total Noninterest Income 42,828 45,239 -5.3%
Noninterest Expense:
Settlements -- 2,100 n/m
Other 88,651 94,914 -6.6%
Total Noninterest Expense 88,651 97,014 -8.6%
Income Before Taxes (FTE) 96,520 105,331 -8.4%
Income Tax Provision (FTE) 34,529 39,248 -12.0%
Net Income $61,991 $66,083 -6.2%
Average Common Shares Outstanding 27,769 28,739 -3.4%
Diluted Average Common Shares 27,821 28,879 -3.7%
Operating Ratios:
Basic Earnings Per Common Share $2.23 $2.30 -3.0%
Diluted Earnings Per Common Share 2.23 2.29 -2.6%
Return On Assets (a) 1.67% 1.79%
Return On Common Equity (a) 15.2% 16.2%
Net Interest Margin (FTE) (a) 4.89% 5.35%
Efficiency Ratio (FTE) 45.8% 46.0%
Dividends Paid Per Common Share $1.11 $1.08 2.8%
Common Dividend Payout Ratio 50% 47%
2. Net Interest Income.
(dollars in thousands)
%
Q3'12 Q3'11 Change Q2'12
Interest and Fee Income (FTE) $50,094 $56,746 -11.7% $51,805
Interest Expense 1,382 2,071 -33.3% 1,472
Net Interest Income (FTE) $48,712 $54,675 -10.9% $50,333
Average Earning Assets $4,160,953 $4,093,020 1.7% $4,127,699
Average Interest-
Bearing Liabilities 2,683,663 2,822,805 -4.9% 2,792,905
Yield on Earning Assets (FTE) (a) 4.80% 5.52% 5.04%
Cost of Funds (a) 0.13% 0.20% 0.15%
Net Interest Margin (FTE) (a) 4.67% 5.32% 4.89%
Interest Expense/
Interest-Bearing Liabilities (a) 0.21% 0.29% 0.21%
Net Interest Spread (FTE) (a) 4.59% 5.23% 4.83%
%
9/30'12YTD 9/30'11YTD Change
Interest and Fee Income (FTE) $155,156 $172,033 -9.8%
Interest Expense 4,413 6,527 -32.4%
Net Interest Income (FTE) $150,743 $165,506 -8.9%
Average Earning Assets $4,116,471 $4,133,898 -0.4%
Average Interest-
Bearing Liabilities 2,773,066 2,849,123 -2.7%
Yield on Earning Assets (FTE) (a) 5.03% 5.56%
Cost of Funds (a) 0.14% 0.21%
Net Interest Margin (FTE) (a) 4.89% 5.35%
Interest Expense/
Interest-Bearing Liabilities (a) 0.21% 0.31%
Net Interest Spread (FTE) (a) 4.82% 5.25%
3. Loans & Other Earning Assets.
(average volume, dollars in thousands)
%
Q3'12 Q3'11 Change Q2'12
Total Assets $4,892,088 $4,920,482 -0.6% $4,974,619
Total Earning Assets 4,160,953 4,093,020 1.7% 4,127,699
Total Loans 2,263,239 2,691,085 -15.9% 2,375,669
Commercial Loans 457,644 610,863 -25.1% 492,703
Commercial RE Loans 990,509 1,185,692 -16.5% 1,046,878
Consumer Loans 815,086 894,530 -8.9% 836,088
Total Investment Securities 1,897,714 1,401,935 35.4% 1,752,030
Available For Sale (Market) 716,369 705,686 1.5% 670,701
Held To Maturity 1,181,345 696,249 69.7% 1,081,329
Unrealized Gain 31,614 22,424 41.0% 26,167
Loans/Deposits 54.2% 64.8% 56.2%
%
9/30'12YTD 9/30'11YTD Change
Total Assets $4,965,611 $4,929,701 0.7%
Total Earning Assets 4,116,471 4,133,898 -0.4%
Total Loans 2,368,530 2,786,838 -15.0%
Commercial Loans 491,023 666,050 -26.3%
Commercial RE Loans 1,042,613 1,219,657 -14.5%
Consumer Loans 834,894 901,131 -7.4%
Total Investment Securities 1,747,941 1,347,060 29.8%
Available For Sale (Market) 674,920 716,823 -5.8%
Held To Maturity 1,073,021 630,237 70.3%
Unrealized Gain 31,614 22,424 41.0%
Loans/Deposits 56.1% 67.2%
4. Deposits & Other Interest-Bearing Liabilities.
(average volume, dollars in thousands)
%
Q3'12 Q3'11 Change Q2'12
Total Deposits $4,176,342 $4,155,812 0.5% $4,227,752
Noninterest Demand 1,605,362 1,494,773 7.4% 1,579,359
Interest Bearing Transaction 756,824 707,328 7.0% 750,322
Savings 1,125,286 1,119,360 0.5% 1,126,412
Time greater than $100K 430,239 530,583 -18.9% 501,110
Time less than $100K 258,631 303,768 -14.9% 270,549
Total Short-Term Borrowings 61,794 99,730 -38.0% 93,568
Federal Home Loan Bank Advances 25,889 35,309 -26.7% 25,944
Term Repurchase Agreement 10,000 5,652 n/m 10,000
Debt Financing and Notes Payable 15,000 21,075 -28.8% 15,000
Shareholders' Equity 542,708 541,369 0.2% 542,192
Demand Deposits/
Total Deposits 38.4% 36.0% 37.4%
Transaction & Savings
Deposits / Total Deposits 83.5% 79.9% 81.7%
%
9/30'12YTD 9/30'11YTD Change
Total Deposits $4,219,129 $4,146,183 1.8%
Noninterest Demand 1,586,993 1,474,983 7.6%
Interest Bearing Transaction 752,825 709,083 6.2%
Savings 1,128,309 1,102,879 2.3%
Time greater than $100K 481,072 540,625 -11.0%
Time less than $100K 269,930 318,613 -15.3%
Total Short-Term Borrowings 89,986 104,544 -13.9%
Federal Home Loan Bank Advances 25,944 47,027 -44.8%
Term Repurchase Agreement 10,000 1,905 n/m
Debt Financing and Notes Payable 15,000 24,447 -38.6%
Shareholders' Equity 543,855 544,056 0.0%
Demand Deposits/
Total Deposits 37.6% 35.6%
Transaction & Savings
Deposits / Total Deposits 82.2% 79.3%
5. Interest Yields Earned & Rates Paid.
(dollars in thousands)
Q3'12
Average Income/ Yield (a) /
Volume Expense Rate
Interest & Fee Income Earned
Total Earning Assets (FTE) $4,160,953 $50,094 4.80%
Total Loans (FTE) 2,263,239 32,434 5.70%
Commercial Loans (FTE) 457,644 6,731 5.85%
Commercial RE Loans 990,509 17,015 6.83%
Consumer Loans 815,086 8,688 4.24%
Total Investments (FTE) 1,897,714 17,660 3.72%
Interest Expense Paid
Total Earning Assets 4,160,953 1,382 0.13%
Total Interest-Bearing Liabilities 2,683,663 1,382 0.21%
Total Interest-Bearing Deposits 2,570,980 1,020 0.16%
Interest-Bearing Transaction 756,824 70 0.04%
Savings 1,125,286 231 0.08%
Time less than $100K 258,631 359 0.55%
Time greater than $100K 430,239 360 0.33%
Total Short-Term Borrowings 61,794 15 0.10%
Federal Home Loan Bank Advances 25,889 122 1.87%
Term Repurchase Agreement 10,000 25 0.97%
Debt Financing and Notes Payable 15,000 200 5.35%
Net Interest Income and
Margin (FTE) $48,712 4.67%
Q3'11
Average Income/ Yield (a) /
Volume Expense Rate
Interest & Fee Income Earned
Total Earning Assets (FTE) $4,093,020 $56,746 5.52%
Total Loans (FTE) 2,691,085 40,689 6.00%
Commercial Loans (FTE) 610,863 10,243 6.65%
Commercial RE Loans 1,185,692 19,557 6.54%
Consumer Loans 894,530 10,889 4.83%
Total Investments (FTE) 1,401,935 16,057 4.58%
Interest Expense Paid
Total Earning Assets 4,093,020 2,071 0.20%
Total Interest-Bearing Liabilities 2,822,805 2,071 0.29%
Total Interest-Bearing Deposits 2,661,039 1,677 0.25%
Interest-Bearing Transaction 707,328 191 0.11%
Savings 1,119,360 406 0.14%
Time less than $100K 303,768 556 0.73%
Time greater than $100K 530,583 524 0.39%
Total Short-Term Borrowings 99,730 62 0.25%
Federal Home Loan Bank Advances 35,309 118 1.34%
Term Repurchase Agreement 5,652 14 0.97%
Debt Financing and Notes Payable 21,075 200 3.80%
Net Interest Income and
Margin (FTE) $54,675 5.32%
6. Noninterest Income.
(dollars in thousands except per-share amounts)
%
Q3'12 Q3'11 Change Q2'12
Service Charges on Deposits $6,847 $7,430 -7.8% $7,027
Merchant Processing Services 2,411 2,358 2.2% 2,529
Debit Card Fees 1,308 1,269 3.1% 1,345
ATM Processing Fees 782 980 -20.2% 932
Trust Fees 540 432 24.8% 497
Financial Services Commissions 175 111 57.9% 194
Loss on Sale of Securities -- -- n/m (1,287)
Other Income 2,563 2,625 -2.4% 2,296
Total Noninterest Income $14,626 $15,205 -3.8% $13,533
Total Revenue (FTE) $63,338 $69,880 -9.4% $63,866
Noninterest Income/Revenue (FTE) 23.1% 21.8% 21.2%
Service Charges/Avg. Deposits (a) 0.65% 0.71% 0.67%
Total Revenues (FTE) Per Avg.
Common Share (a) $9.16 $9.75 -6.1% $9.26
%
9/30'12YTD 9/30'11YTD Change
Service Charges on Deposits $20,969 $22,529 -6.9%
Merchant Processing Services 7,333 6,921 6.0%
Debit Card Fees 3,816 3,752 1.7%
ATM Processing Fees 2,648 2,911 -9.1%
Trust Fees 1,526 1,407 8.5%
Financial Services Commissions 540 257 110.3%
Loss on Sale of Securities (1,287) -- n/m
Other Income 7,283 7,462 -2.4%
Total Noninterest Income $42,828 $45,239 -5.3%
Total Revenue (FTE) $193,571 $210,745 -8.1%
Noninterest Income/Revenue (FTE) 22.1% 21.5%
Service Charges/Avg. Deposits (a) 0.66% 0.73%
Total Revenues (FTE) Per Avg.
Common Share (a) $9.31 $9.80 -5.0%
7. Noninterest Expense.
(dollars in thousands)
%
Q3'12 Q3'11 Change Q2'12
Salaries & Benefits $14,294 $14,401 -0.7% $14,494
Occupancy 3,901 4,010 -2.7% 3,775
Outsourced Data Processing 2,156 2,165 -0.4% 2,078
Amortization of
Identifiable Intangibles 1,336 1,477 -9.6% 1,339
Professional Fees 786 1,185 -33.6% 902
Equipment 991 943 5.1% 1,041
Other Real Estate Owned 679 700 -2.9% 3
Courier Service 772 840 -8.1% 793
Loan Expense 400 578 -30.8% 390
Telephone 429 422 1.8% 418
Postage 308 353 -12.7% 344
Operational Losses 110 226 -51.2% 149
Stationery & Supplies 274 272 0.6% 247
Settlements -- -- n/m --
Other Operating 2,833 3,811 -25.7% 3,376
Total Noninterest Expense $29,269 $31,383 -6.7% $29,349
Noninterest Expense/
Avg. Earning Assets (a) 2.80% 3.04% 2.86%
Noninterest Expense/Revenues (FTE) 46.2% 44.9% 46.0%
%
9/30'12YTD 9/30'11YTD Change
Salaries & Benefits $43,833 $44,388 -1.3%
Occupancy 11,609 12,085 -3.9%
Outsourced Data Processing 6,318 6,743 -6.3%
Amortization of
Identifiable Intangibles 4,076 4,505 -9.5%
Professional Fees 2,455 3,489 -29.6%
Equipment 2,883 2,915 -1.1%
Other Real Estate Owned 912 1,835 -50.3%
Courier Service 2,350 2,535 -7.3%
Loan Expense 1,417 1,515 -6.5%
Telephone 1,224 1,285 -4.8%
Postage 1,024 1,083 -5.4%
Operational Losses 433 815 -46.9%
Stationery & Supplies 764 919 -16.9%
Settlements -- 2,100 n/m
Other Operating 9,353 10,802 -13.4%
Total Noninterest Expense $88,651 $97,014 -8.6%
Noninterest Expense/
Avg. Earning Assets (a) 2.88% 3.14%
Noninterest Expense/Revenues (FTE) 45.8% 46.0%
8. Provision for Loan Losses.
(dollars in thousands)
%
Q3'12 Q3'11 Change Q2'12
Average Total Loans $2,263,239 $2,691,085 -15.9% $2,375,669
Avg. Total Purchased
Covered Loans (1) 435,953 596,072 -26.9% 478,965
Avg. Total Purchased
Non-Covered Loans (2) 97,100 151,634 -36.0% 107,483
Avg. Total Originated Loans 1,730,186 1,943,379 -11.0% 1,789,221
Allowance for Loan Loss (ALL)
Beginning of Period $31,523 $33,008 -4.5% $31,883
Provision for Loan Losses 2,800 2,800 0.0% 2,800
Net ALL Losses (3,357) (2,915) 15.2% (3,160)
ALL End of Period $30,966 $32,893 -5.9% $31,523
ALL Recoveries/Gross ALL Losses 28% 20% 25%
Net ALL Losses/Avg. Loans:
Originated Loans (a) 0.63% 0.51% 0.65%
Purchased Covered Loans (1)(a) 0.09% 0.28% 0.19%
Purchased Non-Covered Loans (2)(a) 2.19% -- 0.09%
%
9/30'12YTD 9/30'11YTD Change
Average Total Loans $2,368,530 $2,786,838 -15.0%
Avg. Total Purchased
Covered Loans (1) 475,815 638,189 -25.4%
Avg. Total Purchased
Non-Covered Loans (2) 107,989 174,333 -38.1%
Avg. Total Originated Loans 1,784,726 1,974,316 -9.6%
Allowance for Loan Loss (ALL)
Beginning of Period $32,597 $35,636 -8.5%
Provision for Loan Losses 8,400 8,400 0.0%
Net ALL Losses (10,031) (11,143) -10.0%
ALL End of Period $30,966 $32,893 -5.9%
ALL Recoveries/Gross ALL Losses 26% 21%
Net ALL Losses/Avg. Loans:
Originated Loans (a) 0.66% 0.73%
Purchased Covered Loans (1)(a) 0.19% 0.09%
Purchased Non-Covered Loans (2)(a) 0.69% --
9. Credit Quality.
(dollars in thousands)
%
9/30/12 9/30/11 Change 6/30/12
Nonperforming Originated Loans:
Nonperforming Nonaccrual $9,870 $12,063 -18.2% $15,445
Performing Nonaccrual 3,169 5,235 -39.5% 1,101
Total Nonaccrual Loans 13,039 17,298 -24.6% 16,546
90+ Days Past Due Accruing Loans 433 794 -45.5% 525
Total 13,472 18,092 -25.5% 17,071
Repossessed Loan Collateral 11,539 14,939 -22.8% 10,551
Total Originated
Nonperforming Assets 25,011 33,031 -24.3% 27,622
Nonperforming Purchased Covered Loans (1):
Nonperforming Nonaccrual 19,584 10,635 84.1% 8,627
Performing Nonaccrual 1,014 5,386 -81.2% 1,409
Total Nonaccrual Loans 20,598 16,021 28.6% 10,036
90+ Days Past Due Accruing Loans 59 279 -78.9% 140
Total 20,657 16,300 26.7% 10,176
Repossessed Purchased Covered
Loan Collateral (1) 12,437 23,160 -46.3% 14,608
Total Nonperforming Purchased
Covered Assets (1) 33,094 39,460 -16.1% 24,784
Nonperforming Purchased Non-Covered Loans (2):
Nonperforming Nonaccrual 7,823 18,502 -57.7% 12,822
Performing Nonaccrual 2,260 7,039 -67.9% 7,050
Total Nonaccrual Loans 10,083 25,541 -60.5% 19,872
90+ Days Past Due Accruing Loans 1 -- n/m --
Total 10,084 25,541 -60.5% 19,872
Repossessed Purchased Non-Covered
Loan Collateral (2) 3,303 9,732 -66.1% 7,034
Total Nonperforming Purchased
Non-Covered Assets (2) 13,387 35,273 -62.0% 26,906
Total Nonperforming Assets $71,492 $107,764 -33.7% $79,312
Total Originated Loans Outstanding $1,708,414 $1,920,286 -11.0% $1,751,578
Total Purchased Covered
Loans Outstanding (1) 418,364 575,353 -27.3% 463,251
Total Purchased Non-Covered
Loans Outstanding (2) 82,676 139,200 -40.6% 102,390
Total Loans Outstanding $2,209,454 $2,634,839 -16.1% $2,317,219
Total Assets $4,859,627 $4,966,499 -2.2% $4,953,130
Originated Loans:
Allowance for Loan Losses $30,966 $32,893 -5.9% $31,523
Allowance/Originated Loans 1.81% 1.71% 1.80%
Nonperforming Originated Loans/
Total Originated Loans 0.79% 0.94% 0.97%
Allowance/Originated
Nonperforming Loans 230% 182% 185%
Purchased Covered Loans (1):
Fair Value Discount on Purchased
Covered Loans $27,241 $48,965 $30,366
Discount/Purchased Covered
Loans, gross 6.11% 7.84% 6.15%
Nonperforming Purchased Covered Loans/
Total Purchased Covered Loans 4.94% 2.83% 2.20%
Purchased Non-Covered Loans (2):
Fair Value Discount on Purchased
Non-Covered Loans $5,495 $16,546 $8,028
Discount/Purchased Non-Covered 6.23% 10.62% 7.27%
Loans, gross
Nonperforming Purchased Non-Covered Loans/
Total Purchased Non-Covered Loans 12.20% 18.35% 19.41%
10. Capital.
(in thousands, except per-share amounts)
%
9/30/12 9/30/11 Change 6/30/12
Shareholders' Equity $558,841 $553,988 0.9% $557,926
Tier I Regulatory Capital 407,881 403,287 1.1% 407,571
Total Regulatory Capital 442,399 440,605 0.4% 443,650
Total Assets 4,859,627 4,966,499 -2.2% 4,953,130
Risk-Adjusted Assets 2,726,803 2,858,321 -4.6% 2,818,628
Shareholders' Equity/
Total Assets 11.50% 11.15% 11.26%
Shareholders' Equity/
Total Loans 25.29% 21.03% 24.08%
Tier I Capital/Total Assets 8.39% 8.12% 8.23%
Tier I Capital/
Risk-Adjusted Assets 14.96% 14.11% 14.46%
Total Regulatory Capital/
Risk-Adjusted Assets 16.22% 15.41% 15.74%
Tangible Common Equity Ratio 8.75% 8.35% 8.54%
Common Shares Outstanding 27,396 28,301 -3.2% 27,621
Common Equity Per Share $20.40 $19.57 4.2% $20.20
Market Value Per Common Share $47.05 $38.32 22.8% $47.19
Share Repurchase Programs
(shares in thousands)
%
Q3'12 Q3'11 Change Q2'12
Total Shares Repurchased 270 316 -14.4% 317
Average Repurchase Price $46.63 $42.37 10.0% $45.45
Net Shares Repurchased 225 239 -5.7% 296
%
9/30'12YTD 9/30'11YTD Change
Total Shares Repurchased 836 955 -12.4%
Average Repurchase Price $46.25 $47.18 -2.0%
Net Shares Repurchased 754 789 -4.4%
11. Period-End Balance Sheets.
(unaudited, dollars in thousands)
%
9/30/12 9/30/11 Change 6/30/12
Assets:
Cash and Money Market Assets $367,964 $459,754 -20.0% $320,925
Investment Securities:
Available For Sale 738,462 683,640 8.0% 708,717
Held to Maturity 1,158,731 755,906 53.3% 1,206,646
Purchased Covered Loans (1) 418,364 575,353 -27.3% 463,251
Purchased Non-Covered Loans (2) 82,676 139,200 -40.6% 102,390
Originated Loans 1,708,414 1,920,286 -11.0% 1,751,578
Allowance For Loan Losses (30,966) (32,893) -5.9% (31,523)
Total Loans, net 2,178,488 2,601,946 -16.3% 2,285,696
Non-Covered Other Real Estate
Owned 14,842 24,671 -39.8% 17,585
Covered Other Real Estate
Owned (1) 12,437 23,160 -46.3% 14,608
Premises and Equipment, net 38,386 36,098 6.3% 37,867
Identifiable Intangibles, net 24,553 30,099 -18.4% 25,888
Goodwill 121,673 121,673 0.0% 121,673
Other Assets 204,091 229,552 -11.1% 213,525
Total Assets $4,859,627 $4,966,499 -2.2% $4,953,130
Liabilities and Shareholders' Equity:
Deposits:
Noninterest Bearing $1,594,379 $1,527,030 4.4% $1,573,188
Interest-Bearing Transaction 745,852 701,323 6.3% 742,633
Savings 1,133,788 1,137,919 -0.4% 1,136,876
Time 656,538 826,111 -20.5% 755,802
Total Deposits 4,130,557 4,192,383 -1.5% 4,208,499
Short-Term Borrowed Funds 55,630 110,917 -49.8% 81,582
Federal Home Loan Bank Advances 25,855 26,078 -0.9% 25,911
Term Repurchase Agreement 10,000 10,000 0.0% 10,000
Debt Financing and Notes Payable 15,000 15,000 0.0% 15,000
Other Liabilities 63,744 58,133 9.7% 54,212
Total Liabilities 4,300,786 4,412,511 -2.5% 4,395,204
Shareholders' Equity:
Common Equity:
Paid-In Capital 374,312 377,458 -0.8% 375,732
Accumulated Other
Comprehensive Income 14,454 10,795 33.9% 13,030
Retained Earnings 170,075 165,735 2.6% 169,164
Total Shareholders' Equity 558,841 553,988 0.9% 557,926
Total Liabilities and
Shareholders' Equity $4,859,627 $4,966,499 -2.2% $4,953,130
12. Income Statements.
(unaudited, in thousands except per-share amounts)
%
Q3'12 Q3'11 Change Q2'12
Interest & Fee Income:
Loans $31,779 $39,899 -20.4% $33,745
Investment Securities:
Available for Sale 4,918 5,526 -11.0% 4,938
Held to Maturity 8,575 6,551 30.9% 8,218
Total Interest & Fee Income 45,272 51,976 -12.9% 46,901
Interest Expense:
Transaction Deposits 70 191 -63.3% 78
Savings Deposits 231 406 -43.2% 230
Time Deposits 719 1,080 -33.4% 799
Short-Term Borrowed Funds 15 62 -75.0% 21
Federal Home Loan Bank Advances 122 118 2.6% 119
Term Repurchase Agreement 25 14 n/m 24
Debt Financing and Notes Payable 200 200 0.0% 201
Total Interest Expense 1,382 2,071 -33.3% 1,472
Net Interest Income 43,890 49,905 -12.1% 45,429
Provision for Loan Losses 2,800 2,800 0.0% 2,800
Noninterest Income:
Service Charges 6,847 7,430 -7.8% 7,027
Merchant Processing Services 2,411 2,358 2.2% 2,529
Debit Card Fees 1,308 1,269 3.1% 1,345
ATM Processing Fees 782 980 -20.2% 932
Trust Fees 540 432 24.8% 497
Financial Services Commissions 175 111 57.9% 194
Loss on Sale of Securities -- -- n/m (1,287)
Other 2,563 2,625 -2.4% 2,296
Total Noninterest Income 14,626 15,205 -3.8% 13,533
Noninterest Expense:
Salaries and Benefits 14,294 14,401 -0.7% 14,494
Occupancy 3,901 4,010 -2.7% 3,775
Outsourced Data Processing 2,156 2,165 -0.4% 2,078
Amortization of Identifiable Intangibles 1,336 1,477 -9.6% 1,339
Professional Fees 786 1,185 -33.6% 902
Equipment 991 943 5.1% 1,041
Other Real Estate Owned 679 700 -2.9% 3
Courier Service 772 840 -8.1% 793
Other 4,354 5,662 -23.1% 4,924
Total Noninterest Expense 29,269 31,383 -6.7% 29,349
Income Before Income Taxes 26,447 30,927 -14.5% 26,813
Income Tax Provision 6,425 8,495 -24.4% 5,849
Net Income $20,022 $22,432 -10.7% $20,964
Average Common Shares Outstanding 27,513 28,433 -3.2% 27,744
Diluted Common Shares Outstanding 27,565 28,498 -3.3% 27,790
Per Common Share Data:
Basic Earnings $0.73 $0.79 -7.6% $0.76
Diluted Earnings 0.73 0.79 -7.6% 0.75
Dividends Paid 0.37 0.36 2.8% 0.37
%
9/30'12YTD 9/30'11YTD Change
Interest & Fee Income:
Loans $101,180 $122,534 -17.4%
Investment Securities:
Available for Sale 14,644 16,428 -10.9%
Held to Maturity 24,646 18,597 32.5%
Total Interest & Fee Income 140,470 157,559 -10.8%
Interest Expense:
Transaction Deposits 238 583 -59.1%
Savings Deposits 696 1,332 -47.8%
Time Deposits 2,380 3,429 -30.6%
Short-Term Borrowed Funds 63 170 -62.9%
Federal Home Loan Bank Advances 361 398 -9.3%
Term Repurchase Agreement 74 14 n/m
Debt Financing and Notes Payable 601 601 0.0%
Total Interest Expense 4,413 6,527 -32.4%
Net Interest Income 136,057 151,032 -9.9%
Provision for Loan Losses 8,400 8,400 0.0%
Noninterest Income:
Service Charges 20,969 22,529 -6.9%
Merchant Processing Services 7,333 6,921 6.0%
Debit Card Fees 3,816 3,752 1.7%
ATM Processing Fees 2,648 2,911 -9.1%
Trust Fees 1,526 1,407 8.5%
Financial Services Commissions 540 257 110.3%
Loss on Sale of Securities (1,287) -- n/m
Other 7,283 7,462 -2.4%
Total Noninterest Income 42,828 45,239 -5.3%
Noninterest Expense:
Salaries and Benefits 43,833 44,388 -1.3%
Occupancy 11,609 12,085 -3.9%
Outsourced Data Processing 6,318 6,743 -6.3%
Amortization of Identifiable Intangibles 4,076 4,505 -9.5%
Professional Fees 2,455 3,489 -29.6%
Equipment 2,883 2,915 -1.1%
Other Real Estate Owned 912 1,835 -50.3%
Courier Service 2,350 2,535 -7.3%
Settlements -- 2,100 n/m
Other 14,215 16,419 -13.4%
Total Noninterest Expense 88,651 97,014 -8.6%
Income Before Income Taxes 81,834 90,857 -9.9%
Income Tax Provision 19,843 24,774 -19.9%
Net Income $61,991 $66,083 -6.2%
Average Common Shares Outstanding 27,769 28,739 -3.4%
Diluted Common Shares Outstanding 27,821 28,879 -3.7%
Per Common Share Data:
Basic Earnings $2.23 $2.30 -3.0%
Diluted Earnings 2.23 2.29 -2.6%
Dividends Paid 1.11 1.08 2.8%
Footnotes and Abbreviations:
(FTE) Fully Taxable Equivalent
(a) Annualized
(1) Purchased covered loans represent purchased loans on which losses are shared with the FDIC per a Loss Sharing Agreement. Purchased covered loans were recorded at estimated fair value at February 6, 2009, the date of purchase.
(2) Purchased non-covered loans represent purchased loans recorded at estimated fair value at August 20, 2010, the date of purchase.
CONTACT: Westamerica Bancorporation Robert A. Thorson - SVP & Chief Financial Officer 707-863-6840

Source:Westamerica Bancorporation