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Westamerica Bancorporation Reports Fourth Quarter 2012 Earnings

SAN RAFAEL, Calif., Jan. 17, 2013 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq:WABC), parent company of Westamerica Bank, today reported net income for the fourth quarter 2012 of $19.1 million and diluted earnings per common share ("EPS") of $0.70. Fourth quarter 2012 results compare to net income of $20.0 million and EPS of $0.73 for the prior quarter, and net income of $21.8 million and EPS of $0.77 for the fourth quarter 2011. Fourth quarter 2012 net income represented an annualized return on shareholders' equity of 14.1 percent.

"Westamerica continues to deliver relatively high levels of profitability in a difficult operating environment. We are focused on controlling costs while banking industry revenues are pressured by low interest rates and aggressive competition. Westamerica's problem loans and repossessed loan collateral declined $41.8 million from December 31, 2011 to December 31, 2012, which helped reduce credit administration costs and professional fees. During the fourth quarter, we delivered approximately 34 percent of our revenue, after-taxes, to the bottom line for shareholders," said Chairman, President and CEO David Payne. "Westamerica paid a $0.37 per common share dividend in the fourth quarter 2012, and retired 183 thousand common shares using our share repurchase plan. Westamerica's capital ratios continue to exceed the highest regulatory guidelines," added Payne.

Net interest income on a fully taxable equivalent basis was $46.3 million for the fourth quarter 2012, compared to $48.7 million for the prior quarter and $53.4 million for the fourth 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 annualized interest cost of funding the Company's loans and investment securities was 0.13 percent in both the fourth quarter 2012 and third quarter 2012 compared to 0.18 percent in the fourth quarter 2011. The annualized net interest margin on a fully taxable equivalent basis was 4.49 percent for the fourth quarter 2012, compared to 4.67 percent for the prior quarter and 5.24 percent for the fourth quarter 2011.

The provision for loan losses was $2.8 million for the fourth quarter 2012, unchanged from the prior quarter and fourth quarter 2011. Net loan losses charged against the allowance for loan losses totaled $3.5 million for the fourth quarter 2012, compared to $3.4 million for the prior quarter and $3.1 million for the fourth quarter 2011. At December 31, 2012, the allowance for loan losses totaled $30.2 million; nonperforming originated loans totaled $12.2 million; nonperforming purchased FDIC-indemnified loans totaled $13.2 million, net of purchase discounts of $1.9 million; and nonperforming purchased non-indemnified loans totaled $7.5 million, net of purchase discounts of $2.0 million.

Noninterest income for the fourth quarter 2012 totaled $14.2 million, compared to $14.6 million in the third quarter 2012 and $14.9 million for the fourth quarter 2011.

Noninterest expense for the fourth quarter 2012 totaled $28.2 million, compared to $29.3 million in the prior quarter and $30.7 million in the fourth 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. Expenses related to repossessed loan collateral in the fourth quarter 2012 were lower by $357 thousand and $301 thousand compared to the third quarter 2012 and fourth quarter 2011, respectively. Professional fees were $553 thousand lower in the fourth quarter 2012 compared to the fourth quarter 2011. In addition, personnel related costs have declined primarily due to lower stock based compensation expense and a decline in the number of employees due to attrition.

At December 31, 2012, Westamerica Bancorporation's tangible common equity-to-asset ratio was 8.6 percent, assets totaled $5.0 billion and loans outstanding totaled $2.1 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, 2011 filed on Form 10-K and quarterly report for the quarter ended September 30, 2012 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.

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

Public Information January 17, 2013
WESTAMERICA BANCORPORATION
FINANCIAL HIGHLIGHTS
December 31, 2012
1. Net Income Summary.
(in thousands except per-share amounts)
%
Q4'12 Q4'11 Change Q3'12
Net Interest Income (FTE) $46,283 $53,362 -13.3% $48,712
Provision for Loan Losses 2,800 2,800 0.0% 2,800
Total Noninterest Income 14,194 14,857 -4.5% 14,626
Noninterest Expense 28,233 30,663 -7.9% 29,269
Income Before Taxes (FTE) 29,444 34,756 -15.3% 31,269
Income Tax Provision (FTE) 10,308 12,951 -20.4% 11,247
Net Income $19,136 $21,805 -12.2% $20,022
Average Common Shares Outstanding 27,313 28,296 -3.5% 27,513
Diluted Average Common Shares 27,334 28,334 -3.5% 27,565
Operating Ratios:
Basic Earnings Per Common Share $0.70 $0.77 -9.1% $0.73
Diluted Earnings Per Common Share 0.70 0.77 -9.1% 0.73
Return On Assets (a) 1.55% 1.73% 1.63%
Return On Common Equity (a) 14.1% 15.9% 14.7%
Net Interest Margin (FTE) (a) 4.49% 5.24% 4.67%
Efficiency Ratio (FTE) 46.7% 44.9% 46.2%
Dividends Paid Per Common Share $0.37 $0.37 0.0% $0.37
Common Dividend Payout Ratio 53% 48% 51%
%
12/31'12YTD 12/31'11YTD Change
Net Interest Income (FTE) $197,027 $218,867 -10.0%
Provision for Loan Losses 11,200 11,200 0.0%
Noninterest Income:
Loss on Sale of Securities (1,287) -- n/m
Other 58,309 60,097 -3.0%
Total Noninterest Income 57,022 60,097 -5.1%
Noninterest Expense:
Settlements -- 2,100 n/m
Other 116,885 125,578 -6.9%
Total Noninterest Expense 116,885 127,678 -8.5%
Income Before Taxes (FTE) 125,964 140,086 -10.1%
Income Tax Provision (FTE) 44,837 52,198 -14.1%
Net Income $81,127 $87,888 -7.7%
Average Common Shares Outstanding 27,654 28,628 -3.4%
Diluted Average Common Shares 27,699 28,742 -3.6%
Operating Ratios:
Basic Earnings Per Common Share $2.93 $3.07 -4.6%
Diluted Earnings Per Common Share 2.93 3.06 -4.2%
Return On Assets 1.64% 1.78%
Return On Common Equity 14.9% 16.1%
Net Interest Margin (FTE) 4.79% 5.32%
Efficiency Ratio (FTE) 46.0% 45.8%
Dividends Paid Per Common Share $1.48 $1.45 2.1%
Common Dividend Payout Ratio 51% 47%
2. Net Interest Income.
(dollars in thousands)
%
Q4'12 Q4'11 Change Q3'12
Interest and Fee Income (FTE) $47,614 $55,217 -13.8% $50,094
Interest Expense 1,331 1,855 -28.3% 1,382
Net Interest Income (FTE) $46,283 $53,362 -13.3% $48,712
Average Earning Assets $4,111,970 $4,052,476 1.5% $4,160,953
Average Interest--
Bearing Liabilities 2,663,389 2,846,417 -6.4% 2,683,663
Yield on Earning Assets (FTE) (a) 4.62% 5.42% 4.80%
Cost of Funds (a) 0.13% 0.18% 0.13%
Net Interest Margin (FTE) (a) 4.49% 5.24% 4.67%
Interest Expense/
Interest-Bearing Liabilities (a) 0.20% 0.26% 0.21%
Net Interest Spread (FTE) (a) 4.42% 5.16% 4.59%
%
12/31'12YTD 12/31'11YTD Change
Interest and Fee Income (FTE) $202,771 $227,249 -10.8%
Interest Expense 5,744 8,382 -31.5%
Net Interest Income (FTE) $197,027 $218,867 -10.0%
Average Earning Assets $4,115,339 $4,113,375 0.0%
Average Interest--
Bearing Liabilities 2,745,497 2,848,441 -3.6%
Yield on Earning Assets (FTE) 4.93% 5.52%
Cost of Funds 0.14% 0.20%
Net Interest Margin (FTE) 4.79% 5.32%
Interest Expense/
Interest-Bearing Liabilities 0.21% 0.29%
Net Interest Spread (FTE) 4.72% 5.23%
3. Loans & Other Earning Assets.
(average volume, dollars in thousands)
%
Q4'12 Q4'11 Change Q3'12
Total Assets $4,920,620 $5,013,227 -1.8% $4,892,088
Total Earning Assets 4,111,970 4,052,476 1.5% 4,160,953
Total Loans 2,155,059 2,587,303 -16.7% 2,263,239
Commercial Loans 425,035 575,607 -26.2% 457,644
Commercial RE Loans 939,943 1,139,249 -17.5% 990,509
Consumer Loans 790,081 872,447 -9.4% 815,086
Total Investment Securities 1,956,911 1,465,173 33.6% 1,897,714
Available For Sale (Market) 796,998 667,514 19.4% 716,369
Held To Maturity 1,159,913 797,659 45.4% 1,181,345
Unrealized Gain 28,516 24,690 15.5% 31,614
Loans/Deposits 51.2% 60.9% 54.2%
%
12/31'12YTD 12/31'11YTD Change
Total Assets $4,954,302 $4,950,754 0.1%
Total Earning Assets 4,115,339 4,113,375 0.0%
Total Loans 2,314,870 2,736,545 -15.4%
Commercial Loans 474,436 643,254 -26.2%
Commercial RE Loans 1,016,805 1,199,390 -15.2%
Consumer Loans 823,629 893,901 -7.9%
Total Investment Securities 1,800,469 1,376,830 30.8%
Available For Sale (Market) 705,606 704,394 0.2%
Held To Maturity 1,094,863 672,436 62.8%
Unrealized Gain 28,516 24,690 15.5%
Loans/Deposits 54.9% 65.6%
4. Deposits, Other Interest-Bearing Liabilities & Equity
(average volume, dollars in thousands)
%
Q4'12 Q4'11 Change Q3'12
Total Deposits $4,211,609 $4,248,191 -0.9% $4,176,342
Noninterest Demand 1,654,575 1,559,801 6.1% 1,605,362
Interest Bearing Transaction 761,395 727,617 4.6% 756,824
Savings 1,146,891 1,145,110 0.2% 1,125,286
Time greater than $100K 400,556 521,742 -23.2% 430,239
Time less than $100K 248,192 293,921 -15.6% 258,631
Total Short-Term Borrowings 55,523 106,973 -48.1% 61,794
Federal Home Loan Bank Advances 25,832 26,054 -0.9% 25,889
Term Repurchase Agreement 10,000 10,000 0.0% 10,000
Debt Financing and Notes Payable 15,000 15,000 0.0% 15,000
Shareholders' Equity 541,684 545,654 -0.7% 542,708
Demand Deposits/
Total Deposits 39.3% 36.7% 38.4%
Transaction & Savings
Deposits / Total Deposits 84.6% 80.8% 83.5%
%
12/31'12YTD 12/31'11YTD Change
Total Deposits $4,217,239 $4,171,894 1.1%
Noninterest Demand 1,603,981 1,496,362 7.2%
Interest Bearing Transaction 754,979 713,754 5.8%
Savings 1,132,980 1,112,364 1.9%
Time greater than $100K 460,833 535,866 -14.0%
Time less than $100K 264,466 313,548 -15.7%
Total Short-Term Borrowings 81,323 105,157 -22.7%
Federal Home Loan Bank Advances 25,916 41,741 -37.9%
Term Repurchase Agreement 10,000 3,945 n/m
Debt Financing and Notes Payable 15,000 22,066 -32.0%
Shareholders' Equity 543,309 544,458 -0.2%
Demand Deposits/
Total Deposits 38.0% 35.9%
Transaction & Savings
Deposits / Total Deposits 82.8% 79.6%
5. Interest Yields Earned & Rates Paid.
(dollars in thousands)
Q4'12
Average Income/ Yield (a) /
Volume Expense Rate
Interest & Fee Income Earned
Total Earning Assets (FTE) $4,111,970 $47,614 4.62%
Total Loans (FTE) 2,155,059 30,267 5.59%
Commercial Loans (FTE) 425,035 6,983 6.54%
Commercial RE Loans 939,943 15,067 6.38%
Consumer Loans 790,081 8,217 4.14%
Total Investments (FTE) 1,956,911 17,347 3.54%
Interest Expense Paid
Total Earning Assets 4,111,970 1,331 0.13%
Total Interest-Bearing Liabilities 2,663,389 1,331 0.20%
Total Interest-Bearing Deposits 2,557,034 970 0.15%
Interest-Bearing Transaction 761,395 70 0.04%
Savings 1,146,891 234 0.08%
Time less than $100K 248,192 332 0.53%
Time greater than $100K 400,556 334 0.33%
Total Short-Term Borrowings 55,523 14 0.10%
Federal Home Loan Bank Advances 25,832 122 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) $46,283 4.49%
Q4'11
Average Income/ Yield (a) /
Volume Expense Rate
Interest & Fee Income Earned
Total Earning Assets (FTE) $4,052,476 $55,217 5.42%
Total Loans (FTE) 2,587,303 38,936 5.97%
Commercial Loans (FTE) 575,607 9,932 6.85%
Commercial RE Loans 1,139,249 18,676 6.50%
Consumer Loans 872,447 10,328 4.70%
Total Investments (FTE) 1,465,173 16,281 4.44%
Interest Expense Paid
Total Earning Assets 4,052,476 1,855 0.18%
Total Interest-Bearing Liabilities 2,846,417 1,855 0.26%
Total Interest-Bearing Deposits 2,688,390 1,461 0.22%
Interest-Bearing Transaction 727,617 144 0.08%
Savings 1,145,110 356 0.12%
Time less than $100K 293,921 496 0.67%
Time greater than $100K 521,742 465 0.35%
Total Short-Term Borrowings 106,973 46 0.17%
Federal Home Loan Bank Advances 26,054 122 1.87%
Term Repurchase Agreement 10,000 25 0.97%
Debt Financing and Notes Payable 15,000 201 5.35%
Net Interest Income and
Margin (FTE) $53,362 5.24%
6. Noninterest Income.
(dollars in thousands except per-share amounts)
%
Q4'12 Q4'11 Change Q3'12
Service Charges on Deposits $6,722 $6,994 -3.9% $6,847
Merchant Processing Services 2,401 2,515 -4.5% 2,411
Debit Card Fees 1,357 1,204 12.7% 1,308
ATM Processing Fees 749 904 -17.2% 782
Trust Fees 552 480 15.0% 540
Financial Services Commissions 148 165 -10.3% 175
Other Income 2,265 2,595 -12.7% 2,563
Total Noninterest Income $14,194 $14,857 -4.5% $14,626
Total Revenue (FTE) $60,477 $68,219 -11.3% $63,338
Noninterest Income/Revenue (FTE) 23.5% 21.8% 23.1%
Service Charges/Avg. Deposits (a) 0.63% 0.65% 0.65%
Total Revenues (FTE) Per Avg.
Common Share (a) $8.81 $9.57 -7.9% $9.16
%
12/31'12YTD 12/31'11YTD Change
Service Charges on Deposits $27,691 $29,523 -6.2%
Merchant Processing Services 9,734 9,436 3.2%
Debit Card Fees 5,173 4,956 4.4%
ATM Processing Fees 3,396 3,815 -11.0%
Trust Fees 2,078 1,887 10.1%
Financial Services Commissions 689 423 63.0%
Loss on Sale of Securities (1,287) -- n/m
Other Income 9,548 10,057 -5.1%
Total Noninterest Income $57,022 $60,097 -5.1%
Total Revenue (FTE) $254,049 $278,964 -8.9%
Noninterest Income/Revenue (FTE) 22.4% 21.5%
Service Charges/Avg. Deposits 0.66% 0.71%
Total Revenues (FTE) Per Avg.
Common Share $9.19 $9.74 -5.7%
7. Noninterest Expense.
(dollars in thousands)
%
Q4'12 Q4'11 Change Q3'12
Salaries & Benefits $13,555 $14,113 -4.0% $14,294
Occupancy 3,851 4,124 -6.6% 3,901
Outsourced Data Processing 2,213 2,101 5.3% 2,156
Amortization of
Identifiable Intangibles 1,292 1,470 -12.1% 1,336
Professional Fees 761 1,314 -42.0% 786
Equipment 892 922 -3.3% 991
Other Real Estate Owned 322 623 -48.3% 679
Courier Service 768 806 -4.8% 772
Loan Expense 467 589 -20.7% 400
Telephone 511 420 21.7% 429
Postage 301 383 -21.5% 308
Operational Losses 113 236 -52.0% 110
Stationery & Supplies 275 340 -19.3% 274
Other Operating 2,912 3,222 -9.6% 2,833
Total Noninterest Expense $28,233 $30,663 -7.9% $29,269
Noninterest Expense/
Avg. Earning Assets (a) 2.73% 3.00% 2.80%
Noninterest Expense/Revenues (FTE) 46.7% 44.9% 46.2%
%
12/31'12YTD 12/31'11YTD Change
Salaries & Benefits $57,388 $58,501 -1.9%
Occupancy 15,460 16,209 -4.6%
Outsourced Data Processing 8,531 8,844 -3.5%
Amortization of
Identifiable Intangibles 5,368 5,975 -10.2%
Professional Fees 3,217 4,802 -33.0%
Equipment 3,775 3,837 -1.6%
Other Real Estate Owned 1,235 2,458 -49.8%
Courier Service 3,117 3,342 -6.7%
Loan Expense 1,884 2,104 -10.5%
Telephone 1,735 1,705 1.8%
Postage 1,326 1,467 -9.6%
Operational Losses 546 1,051 -48.0%
Stationery & Supplies 1,038 1,259 -17.5%
Settlements -- 2,100 n/m
Other Operating 12,265 14,024 -12.5%
Total Noninterest Expense $116,885 $127,678 -8.5%
Noninterest Expense/
Avg. Earning Assets 2.84% 3.10%
Noninterest Expense/Revenues (FTE) 46.0% 45.8%
8. Provision for Loan Losses.
(dollars in thousands)
%
Q4'12 Q4'11 Change Q3'12
Average Total Loans $2,155,059 $2,587,303 -16.7% $2,263,239
Avg. Total Purchased
Covered Loans (1) 394,848 559,451 -29.4% 435,953
Avg. Total Purchased
Non-Covered Loans (2) 77,632 132,576 -41.4% 97,100
Avg. Total Originated Loans 1,682,579 1,895,276 -11.2% 1,730,186
Allowance for Loan Loss (ALL)
Beginning of Period $30,966 $32,893 -5.9% $31,523
Provision for Loan Losses 2,800 2,800 0.0% 2,800
Net ALL Losses (3,532) (3,096) 14.1% (3,357)
ALL End of Period $30,234 $32,597 -7.2% $30,966
ALL Recoveries/Gross ALL Losses 23% 50% 28%
Net ALL Losses/Avg. Loans:
Originated Loans (a) 0.91% 0.53% 0.63%
Purchased Covered Loans (1)(a) 0.14% 0.40% 0.09%
Purchased Non-Covered Loans (2)(a) -2.31% -- 2.19%
%
12/31'12YTD 12/31'11YTD Change
Average Total Loans $2,314,870 $2,736,545 -15.4%
Avg. Total Purchased
Covered Loans (1) 455,463 618,343 -26.3%
Avg. Total Purchased
Non-Covered Loans (2) 100,358 163,808 -38.7%
Avg. Total Originated Loans 1,759,049 1,954,394 -10.0%
Allowance for Loan Loss (ALL)
Beginning of Period $32,597 $35,636 -8.5%
Provision for Loan Losses 11,200 11,200 0.0%
Net ALL Losses (13,563) (14,239) -4.8%
ALL End of Period $30,234 $32,597 -7.2%
ALL Recoveries/Gross ALL Losses 25% 30%
Net ALL Losses/Avg. Loans:
Originated Loans 0.72% 0.68%
Purchased Covered Loans (1) 0.18% 0.16%
Purchased Non-Covered Loans (2) 0.11% --
9. Credit Quality.
(dollars in thousands)
%
12/31/12 12/31/11 Change 9/30/12
Nonperforming Originated Loans:
Nonperforming Nonaccrual $10,016 $10,291 -2.7% $9,870
Performing Nonaccrual 1,759 5,256 -66.5% 3,169
Total Nonaccrual Loans 11,775 15,547 -24.3% 13,039
90+ Days Past Due Accruing Loans 455 2,047 -77.8% 433
Total 12,230 17,594 -30.5% 13,472
Repossessed Loan Collateral 9,295 14,868 -37.5% 11,539
Total Originated
Nonperforming Assets 21,525 32,462 -33.7% 25,011
Nonperforming Purchased Covered Loans (1):
Nonperforming Nonaccrual 11,698 9,388 24.6% 19,584
Performing Nonaccrual 1,323 4,924 -73.1% 1,014
Total Nonaccrual Loans 13,021 14,312 -9.0% 20,598
90+ Days Past Due Accruing Loans 155 241 -35.7% 59
Total 13,176 14,553 -9.5% 20,657
Repossessed Purchased Covered
Loan Collateral (1) 13,691 19,135 -28.5% 12,437
Total Nonperforming Purchased
Covered Assets (1) 26,867 33,688 -20.2% 33,094
Nonperforming Purchased Non-Covered Loans (2):
Nonperforming Nonaccrual 7,038 16,170 -56.5% 7,823
Performing Nonaccrual 461 7,037 -93.4% 2,260
Total Nonaccrual Loans 7,499 23,207 -67.7% 10,083
90+ Days Past Due Accruing Loans 4 34 n/m 1
Total 7,503 23,241 -67.7% 10,084
Repossessed Purchased Non-Covered
Loan Collateral (2) 3,366 11,632 -71.1% 3,303
Total Nonperforming Purchased
Non-Covered Assets (2) 10,869 34,873 -68.8% 13,387
Total Nonperforming Assets $59,261 $101,023 -41.3% $71,492
Total Originated Loans Outstanding $1,664,183 $1,862,607 -10.7% $1,708,414
Total Purchased Covered
Loans Outstanding (1) 372,283 535,278 -30.5% 418,364
Total Purchased Non-Covered
Loans Outstanding (2) 74,891 125,921 -40.5% 82,676
Total Loans Outstanding $2,111,357 $2,523,806 -16.3% $2,209,454
Total Assets $4,952,193 $5,042,161 -1.8% $4,859,627
Originated Loans:
Allowance for Loan Losses $30,234 $32,597 -7.2% $30,966
Allowance/Originated Loans 1.82% 1.75% 1.81%
Nonperforming Originated Loans/
Total Originated Loans 0.73% 0.94% 0.79%
Allowance/Originated
Nonperforming Loans 247% 185% 230%
Purchased Covered Loans (1):
Fair Value Discount on Purchased
Covered Loans $26,128 $46,282 $27,241
Discount/Purchased Covered
Loans, gross 6.56% 7.96% 6.11%
Nonperforming Purchased Covered Loans/
Total Purchased Covered Loans 3.54% 2.72% 4.94%
Purchased Non-Covered Loans (2):
Fair Value Discount on Purchased
Non-Covered Loans $5,226 $10,211 $5,495
Discount/Purchased Non-Covered 6.52% 7.50% 6.23%
Loans, gross
Nonperforming Purchased Non-Covered Loans/
Total Purchased Non-Covered Loans 10.02% 18.46% 12.20%
10. Capital.
(in thousands, except per-share amounts)
%
12/31/12 12/31/11 Change 9/30/12
Shareholders' Equity $560,102 $558,641 0.3% $558,841
Tier I Regulatory Capital 409,763 408,266 0.4% 407,881
Total Regulatory Capital 444,205 444,659 -0.1% 442,399
Total Assets 4,952,193 5,042,161 -1.8% 4,859,627
Risk-Adjusted Assets 2,720,332 2,808,303 -3.1% 2,726,803
Shareholders' Equity/
Total Assets 11.31% 11.08% 11.50%
Shareholders' Equity/
Total Loans 26.53% 22.13% 25.29%
Tier I Capital/Total Assets 8.27% 8.10% 8.39%
Tier I Capital/
Risk-Adjusted Assets 15.06% 14.54% 14.96%
Total Regulatory Capital/
Risk-Adjusted Assets 16.33% 15.83% 16.22%
Tangible Common Equity Ratio 8.64% 8.35% 8.75%
Common Shares Outstanding 27,213 28,150 -3.3% 27,396
Common Equity Per Share $20.58 $19.85 3.7% $20.40
Market Value Per Common Share $42.59 $43.90 -3.0% $47.05
Share Repurchase Programs
(shares in thousands)
%
Q4'12 Q4'11 Change Q3'12
Total Shares Repurchased 299 361 -17.2% 270
Average Repurchase Price $42.92 $42.83 0.2% $46.63
Net Shares Repurchased 183 151 21.1% 225
%
12/31'12YTD 12/31'11YTD Change
Total Shares Repurchased 1,135 1,317 -13.8%
Average Repurchase Price $45.38 $45.99 -1.3%
Net Shares Repurchased 937 940 -0.4%
11. Period-End Balance Sheets.
(unaudited, dollars in thousands)
%
12/31/12 12/31/11 Change 9/30/12
Assets:
Cash and Money Market Assets $491,382 $530,045 -7.3% $367,964
Investment Securities:
Available For Sale 825,636 638,753 29.3% 738,462
Held to Maturity 1,156,041 922,803 25.3% 1,158,731
Purchased Covered Loans (1) 372,283 535,278 -30.5% 418,364
Purchased Non-Covered Loans (2) 74,891 125,921 -40.5% 82,676
Originated Loans 1,664,183 1,862,607 -10.7% 1,708,414
Allowance For Loan Losses (30,234) (32,597) -7.2% (30,966)
Total Loans, net 2,081,123 2,491,209 -16.5% 2,178,488
Non-Covered Other Real Estate
Owned 12,661 26,500 -52.2% 14,842
Covered Other Real Estate
Owned (1) 13,691 19,135 -28.5% 12,437
Premises and Equipment, net 38,639 36,548 5.7% 38,386
Identifiable Intangibles, net 23,261 28,629 -18.8% 24,553
Goodwill 121,673 121,673 0.0% 121,673
Other Assets 188,086 226,866 -17.1% 204,091
Total Assets $4,952,193 $5,042,161 -1.8% $4,859,627
Liabilities and Shareholders' Equity:
Deposits:
Noninterest Bearing $1,676,071 $1,562,254 7.3% $1,594,379
Interest-Bearing Transaction 748,818 734,988 1.9% 745,852
Savings 1,165,032 1,148,178 1.5% 1,133,788
Time 642,571 804,501 -20.1% 656,538
Total Deposits 4,232,492 4,249,921 -0.4% 4,130,557
Short-Term Borrowed Funds 53,687 115,689 -53.6% 55,630
Federal Home Loan Bank Advances 25,799 26,023 -0.9% 25,855
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 55,113 66,887 -17.6% 63,744
Total Liabilities 4,392,091 4,483,520 -2.0% 4,300,786
Shareholders' Equity:
Common Equity:
Paid-In Capital 375,113 380,835 -1.5% 374,312
Accumulated Other
Comprehensive Income 14,625 11,369 28.6% 14,454
Retained Earnings 170,364 166,437 2.4% 170,075
Total Shareholders' Equity 560,102 558,641 0.3% 558,841
Total Liabilities and
Shareholders' Equity $4,952,193 $5,042,161 -1.8% $4,859,627
12. Income Statements.
(unaudited, in thousands except per-share amounts)
%
Q4'12 Q4'11 Change Q3'12
Interest & Fee Income:
Loans $29,640 $38,139 -22.3% $31,779
Investment Securities:
Available for Sale 5,166 5,167 0.0% 4,918
Held to Maturity 8,087 7,115 13.7% 8,575
Total Interest & Fee Income 42,893 50,421 -14.9% 45,272
Interest Expense:
Transaction Deposits 70 144 -51.6% 70
Savings Deposits 234 356 -34.3% 231
Time Deposits 666 961 -30.7% 719
Short-Term Borrowed Funds 14 46 -69.0% 15
Federal Home Loan Bank Advances 122 122 -0.4% 122
Term Repurchase Agreement 25 25 0.0% 25
Debt Financing and Notes Payable 200 201 0.0% 200
Total Interest Expense 1,331 1,855 -28.3% 1,382
Net Interest Income 41,562 48,566 -14.4% 43,890
Provision for Loan Losses 2,800 2,800 0.0% 2,800
Noninterest Income:
Service Charges 6,722 6,994 -3.9% 6,847
Merchant Processing Services 2,401 2,515 -4.5% 2,411
Debit Card Fees 1,357 1,204 12.7% 1,308
ATM Processing Fees 749 904 -17.2% 782
Trust Fees 552 480 15.0% 540
Financial Services Commissions 148 165 -10.3% 175
Other 2,265 2,595 -12.7% 2,563
Total Noninterest Income 14,194 14,857 -4.5% 14,626
Noninterest Expense:
Salaries and Benefits 13,555 14,113 -4.0% 14,294
Occupancy 3,851 4,124 -6.6% 3,901
Outsourced Data Processing 2,213 2,101 5.3% 2,156
Amortization of Identifiable Intangibles 1,292 1,470 -12.1% 1,336
Professional Fees 761 1,314 -42.0% 786
Equipment 892 922 -3.3% 991
Other Real Estate Owned 322 623 -48.3% 679
Courier Service 768 806 -4.8% 772
Other 4,579 5,190 -11.8% 4,354
Total Noninterest Expense 28,233 30,663 -7.9% 29,269
Income Before Income Taxes 24,723 29,960 -17.5% 26,447
Income Tax Provision 5,587 8,155 -31.5% 6,425
Net Income $19,136 $21,805 -12.2% $20,022
Average Common Shares Outstanding 27,313 28,296 -3.5% 27,513
Diluted Common Shares Outstanding 27,334 28,334 -3.5% 27,565
Per Common Share Data:
Basic Earnings $0.70 $0.77 -9.1% $0.73
Diluted Earnings 0.70 0.77 -9.1% 0.73
Dividends Paid 0.37 0.37 0.0% 0.37
%
12/31'12YTD 12/31'11YTD Change
Interest & Fee Income:
Loans $130,820 $160,673 -18.6%
Investment Securities:
Available for Sale 19,810 21,594 -8.3%
Held to Maturity 32,734 25,712 27.3%
Total Interest & Fee Income 183,364 207,979 -11.8%
Interest Expense:
Transaction Deposits 308 727 -57.6%
Savings Deposits 930 1,692 -45.1%
Time Deposits 3,045 4,386 -30.6%
Short-Term Borrowed Funds 77 216 -64.2%
Federal Home Loan Bank Advances 483 520 -7.2%
Term Repurchase Agreement 99 39 n/m
Debt Financing and Notes Payable 802 802 0.0%
Total Interest Expense 5,744 8,382 -31.5%
Net Interest Income 177,620 199,597 -11.0%
Provision for Loan Losses 11,200 11,200 0.0%
Noninterest Income:
Service Charges 27,691 29,523 -6.2%
Merchant Processing Services 9,734 9,436 3.2%
Debit Card Fees 5,173 4,956 4.4%
ATM Processing Fees 3,396 3,815 -11.0%
Trust Fees 2,078 1,887 10.1%
Financial Services Commissions 689 423 63.0%
Loss on Sale of Securities (1,287) -- n/m
Other 9,548 10,057 -5.1%
Total Noninterest Income 57,022 60,097 -5.1%
Noninterest Expense:
Salaries and Benefits 57,388 58,501 -1.9%
Occupancy 15,460 16,209 -4.6%
Outsourced Data Processing 8,531 8,844 -3.5%
Amortization of Identifiable Intangibles 5,368 5,975 -10.2%
Professional Fees 3,217 4,802 -33.0%
Equipment 3,775 3,837 -1.6%
Other Real Estate Owned 1,235 2,458 -49.8%
Courier Service 3,117 3,342 -6.7%
Settlements -- 2,100 n/m
Other 18,794 21,610 -13.0%
Total Noninterest Expense 116,885 127,678 -8.5%
Income Before Income Taxes 106,557 120,816 -11.8%
Income Tax Provision 25,430 32,928 -22.8%
Net Income $81,127 $87,888 -7.7%
Average Common Shares Outstanding 27,654 28,628 -3.4%
Diluted Common Shares Outstanding 27,699 28,742 -3.6%
Per Common Share Data:
Basic Earnings $2.93 $3.07 -4.6%
Diluted Earnings 2.93 3.06 -4.2%
Dividends Paid 1.48 1.45 2.1%
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