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Westamerica Bancorporation Reports Second Quarter 2013 Earnings

SAN RAFAEL, Calif., July 16, 2013 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq:WABC), parent company of Westamerica Bank, generated net income for the second quarter 2013 of $17.1 million and diluted earnings per common share ("EPS") of $0.64. Second quarter 2013 results compare to net income of $17.3 million and EPS of $0.64 for the prior quarter, and net income of $21.0 million and EPS of $0.75 for the second quarter 2012. Second quarter 2013 net income represented an annualized return on shareholders' equity of 13 percent.

"Westamerica continues to deliver relatively high levels of profitability from a high-quality balance sheet. Our credit quality has continued to improve with nonperforming assets declining 36 percent in the last twelve months, and net loan charge-offs declining to $3.9 million in the six-months ended June 30, 2013 compared to $6.9 million in the six-months ended December 31, 2012. The sustained improvement in our credit quality resulted in a reduced provision for loan losses of $1.8 million for the second quarter 2013. Our annualized net interest margin was 4.12 percent for the second quarter 2013, which reflects continued pressure from low market interest rates and aggressive loan competition," said Chairman, President and CEO David Payne. "We remain focused on controlling noninterest expenses, which declined $1.2 million in the second quarter 2013 compared to the second quarter 2012. Westamerica paid a $0.37 per common share dividend in the second quarter 2013, and retired 249 thousand common shares in the quarter using our share repurchase plan," added Payne.

Net interest income on a fully taxable equivalent basis was $42.6 million for the second quarter 2013, compared to $43.8 million for the prior quarter and $50.3 million for the second quarter 2012. 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 which increases credit risk. Management is avoiding these low-yielding higher-risk loans. To offset the decline in interest income, interest expense has been reduced by lowering rates paid on interest-bearing deposits and by reducing the volume of higher-cost funding sources. The annualized interest cost of funding the Company's loans and investment securities was 0.12 percent in the second quarter 2013 compared to 0.12 percent in the prior quarter and 0.15 percent in the second quarter 2012. The annualized net interest margin on a fully taxable equivalent basis was 4.12 percent for the second quarter 2013, compared to 4.27 percent for the prior quarter and 4.89 percent for the second quarter 2012.

The provision for loan losses was $1.8 million for the second quarter 2013, down $1.0 million from $2.8 million in both the prior quarter and second quarter 2012. Net loan losses charged against the allowance for loan losses totaled $1.2 million for the second quarter 2013, compared to $2.7 million for the prior quarter and $3.2 million for the second quarter 2012. At June 30, 2013, the allowance for loan losses totaled $30.9 million; nonperforming originated loans totaled $9.2 million; nonperforming purchased FDIC-indemnified loans totaled $16.9 million, net of purchase discounts of $1.6 million; and nonperforming purchased non-indemnified loans totaled $4.9 million, net of purchase discounts of $802 thousand.

Noninterest income for the second quarter 2013 totaled $14.3 million, compared to $14.3 million for the prior quarter and $13.5 million for the second quarter 2012. The second quarter 2012 included $1.3 million in realized securities losses.

Noninterest expense for the second quarter 2013 totaled $28.2 million, compared to $28.7 million in the prior quarter and $29.3 million for the second quarter 2012. The 2 percent decline in noninterest expenses for the second quarter 2013 compared to the first quarter 2013 was primarily due to seasonally lower payroll taxes and reduced occupancy costs. The 4 percent decline in noninterest expenses for the second quarter 2013 compared to the second quarter 2012 was primarily due to lower personnel costs, occupancy expenses, professional fees, and intangible asset amortization.

At June 30, 2013, Westamerica Bancorporation's tangible common equity-to-asset ratio was 8.6 percent, assets totaled $4.8 billion and loans outstanding totaled $1.9 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, 2012 filed on Form 10-K and quarterly report for the quarter ended March 31, 2013 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 16, 2013
WESTAMERICA BANCORPORATION
FINANCIAL HIGHLIGHTS
June 30, 2013
1. Net Income Summary.
(in thousands except per-share amounts)
%
Q2'13 Q2'12 Change Q1'13
Net Interest and Fee Income (FTE) $42,628 $50,333 -15.3% $43,835
Provision for Loan Losses 1,800 2,800 -35.7% 2,800
Noninterest Income:
Loss on Sale of Securities -- (1,287) n/m --
Other 14,284 14,820 -3.6% 14,278
Total Noninterest Income 14,284 13,533 5.5% 14,278
Noninterest Expense 28,192 29,349 -3.9% 28,677
Income Before Taxes (FTE) 26,920 31,717 -15.1% 26,636
Income Tax Provision (FTE) 9,808 10,753 -8.8% 9,365
Net Income $17,112 $20,964 -18.4% $17,271
Average Common Shares Outstanding 26,890 27,744 -3.1% 27,145
Diluted Average Common Shares 26,898 27,790 -3.2% 27,157
Operating Ratios:
Basic Earnings Per Common Share $0.64 $0.76 -15.8% $0.64
Diluted Earnings Per Common Share 0.64 0.75 -14.7% 0.64
Return On Assets (a) 1.42% 1.69% 1.43%
Return On Common Equity (a) 12.7% 15.6% 12.9%
Net Interest Margin (FTE) (a) 4.12% 4.89% 4.27%
Efficiency Ratio (FTE) 49.5% 46.0% 49.3%
Dividends Paid Per Common Share $0.37 $0.37 0.0% $0.37
Common Dividend Payout Ratio 58% 49% 58%
%
6/30'13YTD 6/30'12YTD Change
Net Interest and Fee Income (FTE) $86,463 $102,032 -15.3%
Provision for Loan Losses 4,600 5,600 -17.9%
Noninterest Income:
Loss on Sale of Securities -- (1,287) n/m
Other 28,562 29,489 -3.1%
Total Noninterest Income 28,562 28,202 1.3%
Noninterest Expense 56,869 59,383 -4.2%
Income Before Taxes (FTE) 53,556 65,251 -17.9%
Income Tax Provision (FTE) 19,173 23,282 -17.6%
Net Income $34,383 $41,969 -18.1%
Average Common Shares Outstanding 27,017 27,897 -3.2%
Diluted Average Common Shares 27,027 27,951 -3.3%
Operating Ratios:
Basic Earnings Per Common Share $1.27 $1.50 -15.3%
Diluted Earnings Per Common Share 1.27 1.50 -15.3%
Return On Assets (a) 1.42% 1.69%
Return On Common Equity (a) 12.8% 15.5%
Net Interest Margin (FTE) (a) 4.19% 5.00%
Efficiency Ratio (FTE) 49.4% 45.6%
Dividends Paid Per Common Share $0.74 $0.74 0.0%
Common Dividend Payout Ratio 58% 49%
2. Net Interest Income.
(dollars in thousands)
%
Q2'13 Q2'12 Change Q1'13
Interest and Fee Income (FTE) $43,847 $51,805 -15.4% $45,087
Interest Expense 1,219 1,472 -17.2% 1,252
Net Interest and Fee Income (FTE) $42,628 $50,333 -15.3% $43,835
Average Earning Assets $4,147,096 $4,127,699 0.5% $4,135,863
Average Interest--
Bearing Liabilities 2,613,978 2,792,905 -6.4% 2,664,391
Yield on Earning Assets (FTE) (a) 4.24% 5.04% 4.39%
Cost of Funds (a) 0.12% 0.15% 0.12%
Net Interest Margin (FTE) (a) 4.12% 4.89% 4.27%
Interest Expense/
Interest-Bearing Liabilities (a) 0.19% 0.21% 0.19%
Net Interest Spread (FTE) (a) 4.05% 4.83% 4.20%
%
6/30'13YTD 6/30'12YTD Change
Interest and Fee Income (FTE) $88,934 $105,063 -15.4%
Interest Expense 2,471 3,031 -18.5%
Net Interest and Fee Income (FTE) $86,463 $102,032 -15.3%
Average Earning Assets $4,141,510 $4,093,985 1.2%
Average Interest--
Bearing Liabilities 2,639,046 2,818,259 -6.4%
Yield on Earning Assets (FTE) (a) 4.31% 5.15%
Cost of Funds (a) 0.12% 0.15%
Net Interest Margin (FTE) (a) 4.19% 5.00%
Interest Expense/
Interest-Bearing Liabilities (a) 0.19% 0.22%
Net Interest Spread (FTE) (a) 4.12% 4.93%
3. Loans & Other Earning Assets.
(average volume, dollars in thousands)
%
Q2'13 Q2'12 Change Q1'13
Total Assets $4,840,319 $4,974,619 -2.7% $4,908,483
Total Earning Assets 4,147,096 4,127,699 0.5% 4,135,863
Total Loans 1,994,361 2,375,669 -16.1% 2,077,989
Commercial Loans 382,632 492,703 -22.3% 404,892
Commercial RE Loans 881,108 1,046,878 -15.8% 904,841
Consumer Loans 730,621 836,088 -12.6% 768,256
Total Investment Securities 2,152,735 1,752,030 22.9% 2,057,874
Available For Sale (Market) 1,001,151 670,701 49.3% 902,633
Held To Maturity 1,151,584 1,081,329 6.5% 1,155,241
Unrealized (Loss) Gain (9,669) 26,167 n/m 23,283
Loans/Deposits 48.3% 56.2% 49.5%
%
6/30'13YTD 6/30'12YTD Change
Total Assets $4,874,212 $5,002,777 -2.6%
Total Earning Assets 4,141,510 4,093,985 1.2%
Total Loans 2,035,944 2,421,754 -15.9%
Commercial Loans 393,701 507,896 -22.5%
Commercial RE Loans 892,908 1,068,951 -16.5%
Consumer Loans 749,335 844,907 -11.3%
Total Investment Securities 2,105,566 1,672,231 25.9%
Available For Sale (Market) 952,164 653,967 45.6%
Held To Maturity 1,153,402 1,018,264 13.3%
Unrealized (Loss) Gain (9,669) 26,167 n/m
Loans/Deposits 48.9% 57.1%
4. Deposits, Other Interest-Bearing Liabilities & Equity.
(average volume, dollars in thousands)
%
Q2'13 Q2'12 Change Q1'13
Total Deposits $4,132,509 $4,227,752 -2.3% $4,199,229
Noninterest Demand 1,630,326 1,579,359 3.2% 1,643,348
Interest Bearing Transaction 753,148 750,322 0.4% 766,810
Savings 1,148,193 1,126,412 1.9% 1,158,454
Time greater than $100K 369,275 501,110 -26.3% 390,518
Time less than $100K 231,567 270,549 -14.4% 240,099
Total Short-Term Borrowings 61,076 93,568 -34.7% 57,733
Federal Home Loan Bank Advances 25,719 25,944 -0.9% 25,777
Term Repurchase Agreement 10,000 10,000 0.0% 10,000
Debt Financing 15,000 15,000 0.0% 15,000
Shareholders' Equity 538,529 542,192 -0.7% 541,874
Demand Deposits/
Total Deposits 39.5% 37.4% 39.1%
Transaction & Savings
Deposits / Total Deposits 85.5% 81.7% 85.0%
%
6/30'13YTD 6/30'12YTD Change
Total Deposits $4,165,685 $4,240,758 -1.8%
Noninterest Demand 1,636,801 1,577,708 3.7%
Interest Bearing Transaction 759,941 750,803 1.2%
Savings 1,153,295 1,129,837 2.1%
Time greater than $100K 379,838 506,768 -25.0%
Time less than $100K 235,810 275,642 -14.5%
Total Short-Term Borrowings 59,414 104,237 -43.0%
Federal Home Loan Bank Advances 25,748 25,972 -0.9%
Term Repurchase Agreement 10,000 10,000 0.0%
Debt Financing 15,000 15,000 0.0%
Shareholders' Equity 540,192 544,434 -0.8%
Demand Deposits/
Total Deposits 39.3% 37.2%
Transaction & Savings
Deposits / Total Deposits 85.2% 81.6%
5. Interest Yields Earned & Rates Paid.
(dollars in thousands)
Q2'13
Average Income/ Yield (a) /
Volume Expense Rate
Interest & Fee Income Earned
Total Earning Assets (FTE) $4,147,096 $43,847 4.24%
Total Loans (FTE) 1,994,361 26,745 5.38%
Commercial Loans (FTE) 382,632 5,794 6.07%
Commercial RE Loans 881,108 13,725 6.25%
Consumer Loans 730,621 7,226 3.97%
Total Investments (FTE) 2,152,735 17,102 3.18%
Interest Expense Paid
Total Earning Assets 4,147,096 1,219 0.12%
Total Interest-Bearing Liabilities 2,613,978 1,219 0.19%
Total Interest-Bearing Deposits 2,502,183 847 0.14%
Interest-Bearing Transaction 753,148 64 0.03%
Savings 1,148,193 228 0.08%
Time less than $100K 231,567 272 0.47%
Time greater than $100K 369,275 283 0.31%
Total Short-Term Borrowings 61,076 26 0.17%
Federal Home Loan Bank Advances 25,719 120 1.87%
Term Repurchase Agreement 10,000 25 0.99%
Debt Financing 15,000 201 5.35%
Net Interest Income and
Margin (FTE) $42,628 4.12%
Q2'12
Average Income/ Yield (a) /
Volume Expense Rate
Interest & Fee Income Earned
Total Earning Assets (FTE) $4,127,699 $51,805 5.04%
Total Loans (FTE) 2,375,669 34,472 5.84%
Commercial Loans (FTE) 492,703 7,875 6.43%
Commercial RE Loans 1,046,878 17,531 6.74%
Consumer Loans 836,088 9,066 4.36%
Total Investments (FTE) 1,752,030 17,333 3.95%
Interest Expense Paid
Total Earning Assets 4,127,699 1,472 0.15%
Total Interest-Bearing Liabilities 2,792,905 1,472 0.21%
Total Interest-Bearing Deposits 2,648,393 1,107 0.17%
Interest-Bearing Transaction 750,322 78 0.04%
Savings 1,126,412 230 0.08%
Time less than $100K 270,549 385 0.57%
Time greater than $100K 501,110 414 0.33%
Total Short-Term Borrowings 93,568 21 0.09%
Federal Home Loan Bank Advances 25,944 119 1.86%
Term Repurchase Agreement 10,000 24 0.97%
Debt Financing 15,000 201 5.35%
Net Interest Income and
Margin (FTE) $50,333 4.89%
6. Noninterest Income.
(dollars in thousands except per-share amounts)
%
Q2'13 Q2'12 Change Q1'13
Service Charges on Deposits $6,452 $7,027 -8.2% $6,542
Merchant Processing Services 2,413 2,529 -4.6% 2,409
Debit Card Fees 1,478 1,345 9.9% 1,358
ATM Processing Fees 721 932 -22.6% 705
Trust Fees 585 497 17.6% 568
Financial Services Commissions 284 194 46.5% 180
Loss on Sale of Securities -- (1,287) n/m --
Other Income 2,351 2,296 2.4% 2,516
Total Noninterest Income $14,284 $13,533 5.5% $14,278
Total Revenue (FTE) $56,912 $63,866 -10.9% $58,113
Noninterest Income/Revenue (FTE) 25.1% 21.2% 24.6%
Service Charges/Avg. Deposits (a) 0.63% 0.67% 0.63%
Total Revenues (FTE) Per Avg.
Common Share (a) $8.49 $9.26 -8.3% $8.68
%
6/30'13YTD 6/30'12YTD Change
Service Charges on Deposits $12,994 $14,122 -8.0%
Merchant Processing Services 4,822 4,922 -2.0%
Debit Card Fees 2,836 2,508 13.1%
ATM Processing Fees 1,426 1,865 -23.5%
Trust Fees 1,153 986 16.9%
Financial Services Commissions 464 365 27.0%
Loss on Sale of Securities -- (1,287) n/m
Other Income 4,867 4,721 3.1%
Total Noninterest Income $28,562 $28,202 1.3%
Total Revenue (FTE) $115,025 $130,234 -11.7%
Noninterest Income/Revenue (FTE) 24.8% 21.7%
Service Charges/Avg. Deposits (a) 0.63% 0.67%
Total Revenues (FTE) Per Avg.
Common Share (a) $8.59 $9.39 -8.5%
7. Noninterest Expense.
(dollars in thousands)
%
Q2'13 Q2'12 Change Q1'13
Salaries & Benefits $14,064 $14,494 -3.0% $14,403
Occupancy 3,638 3,775 -3.6% 3,886
Outsourced Data Processing 2,140 2,078 3.0% 2,157
Amortization of
Identifiable Intangibles 1,165 1,339 -12.9% 1,219
Professional Fees 745 902 -17.5% 635
Equipment 1,021 1,041 -2.0% 880
Other Real Estate Owned 278 3 n/m 334
Courier Service 737 793 -7.1% 741
Loan Expense 414 390 6.2% 417
Telephone 462 418 10.7% 448
Postage 293 344 -15.0% 300
Operational Losses 86 149 -42.5% 128
Stationery & Supplies 235 247 -4.8% 281
Other Operating 2,914 3,376 -13.7% 2,848
Total Noninterest Expense $28,192 $29,349 -3.9% $28,677
Noninterest Expense/
Avg. Earning Assets (a) 2.73% 2.86% 2.81%
Noninterest Expense/Revenues (FTE) 49.5% 46.0% 49.3%
%
6/30'13YTD 6/30'12YTD Change
Salaries & Benefits $28,467 $29,540 -3.6%
Occupancy 7,524 7,709 -2.4%
Outsourced Data Processing 4,297 4,161 3.3%
Amortization of
Identifiable Intangibles 2,384 2,741 -13.0%
Professional Fees 1,380 1,669 -17.3%
Equipment 1,901 1,892 0.4%
Other Real Estate Owned 612 233 162.8%
Courier Service 1,478 1,578 -6.3%
Loan Expense 831 1,017 -18.3%
Telephone 910 794 14.6%
Postage 593 716 -17.2%
Operational Losses 214 322 -33.8%
Stationery & Supplies 516 490 5.3%
Other Operating 5,762 6,521 -11.6%
Total Noninterest Expense $56,869 $59,383 -4.2%
Noninterest Expense/
Avg. Earning Assets (a) 2.77% 2.92%
Noninterest Expense/Revenues (FTE) 49.4% 45.6%
8. Provision for Loan Losses.
(dollars in thousands)
%
Q2'13 Q2'12 Change Q1'13
Average Total Loans $1,994,361 $2,375,669 -16.1% $2,077,989
Avg. Total Purchased
Covered Loans (1) 341,896 478,965 -28.6% 363,836
Avg. Total Purchased
Non-Covered Loans (2) 66,030 107,483 -38.6% 72,752
Avg. Total Originated Loans 1,586,435 1,789,221 -11.3% 1,641,401
Allowance for Loan Loss (ALL)
Beginning of Period $30,354 $31,883 -4.8% $30,234
Provision for Loan Losses 1,800 2,800 -35.7% 2,800
Net ALL Losses (1,228) (3,160) -61.1% (2,680)
ALL End of Period $30,926 $31,523 -1.9% $30,354
ALL Recoveries/Gross ALL Losses 42% 25% 29%
Net ALL Losses/Avg. Loans:
Originated Loans (a) 0.15% 0.65% 0.57%
Purchased Covered Loans (1)(a) 0.59% 0.19% 0.39%
Purchased Non-Covered Loans (2)(a) 0.71% 0.09% --
%
6/30'13YTD 6/30'12YTD Change
Average Total Loans $2,035,944 $2,421,754 -15.9%
Avg. Total Purchased
Covered Loans (1) 352,802 495,965 -28.9%
Avg. Total Purchased
Non-Covered Loans (2) 69,373 113,493 -38.9%
Avg. Total Originated Loans 1,613,769 1,812,296 -11.0%
Allowance for Loan Loss (ALL)
Beginning of Period $30,234 $32,597 -7.2%
Provision for Loan Losses 4,600 5,600 -17.9%
Net ALL Losses (3,908) (6,674) -41.4%
ALL End of Period $30,926 $31,523 -1.9%
ALL Recoveries/Gross ALL Losses 34% 25%
Net ALL Losses/Avg. Loans:
Originated Loans (a) 0.37% 0.67%
Purchased Covered Loans (1)(a) 0.49% 0.23%
Purchased Non-Covered Loans (2)(a) 0.34% 0.04%
9. Credit Quality.
(dollars in thousands)
%
6/30/13 6/30/12 Change 3/31/13
Nonperforming Originated Loans:
Nonperforming Nonaccrual $7,664 $15,445 -50.4% $7,005
Performing Nonaccrual 1,272 1,101 15.5% 1,154
Total Nonaccrual Loans 8,936 16,546 -46.0% 8,159
90+ Days Past Due Accruing Loans 241 525 -54.1% 305
Total 9,177 17,071 -46.2% 8,464
Repossessed Loan Collateral 5,414 10,551 -48.7% 7,691
Total Originated
Nonperforming Assets 14,591 27,622 -47.2% 16,155
Nonperforming Purchased Covered Loans (1):
Nonperforming Nonaccrual 14,619 8,627 69.5% 9,578
Performing Nonaccrual 2,204 1,409 56.4% 2,299
Total Nonaccrual Loans 16,823 10,036 67.6% 11,877
90+ Days Past Due Accruing Loans 74 140 -47.1% 88
Total 16,897 10,176 66.0% 11,965
Repossessed Purchased Covered
Loan Collateral (1) 10,480 14,608 -28.3% 13,713
Total Nonperforming Purchased
Covered Assets (1) 27,377 24,784 10.5% 25,678
Nonperforming Purchased Non-Covered Loans (2):
Nonperforming Nonaccrual 1,890 12,822 -85.3% 6,052
Performing Nonaccrual 3,013 7,050 -57.3% 3,060
Total Nonaccrual Loans 4,903 19,872 -75.3% 9,112
90+ Days Past Due Accruing Loans -- -- n/m --
Total 4,903 19,872 -75.3% 9,112
Repossessed Purchased Non-Covered
Loan Collateral (2) 3,543 7,034 -49.6% 1,980
Total Nonperforming Purchased
Non-Covered Assets (2) 8,446 26,906 -68.6% 11,092
Total Nonperforming Assets $50,414 $79,312 -36.4% $52,925
Total Originated Loans Outstanding $1,553,303 $1,751,578 -11.3% $1,613,396
Total Purchased Covered
Loans Outstanding (1) 324,976 463,251 -29.8% 353,034
Total Purchased Non-Covered
Loans Outstanding (2) 61,062 102,390 -40.4% 70,504
Total Loans Outstanding $1,939,341 $2,317,219 -16.3% $2,036,934
Total Assets $4,813,908 $4,953,130 -2.8% $4,887,844
Originated Loans:
Allowance for Loan Losses $30,926 $31,523 -1.9% $30,354
Allowance/Originated Loans 1.99% 1.80% 1.88%
Nonperforming Originated Loans/
Total Originated Loans 0.59% 0.97% 0.52%
Allowance/Originated
Nonperforming Loans 337% 185% 359%
Purchased Covered Loans (1):
Fair Value Discount on Purchased Covered Loans $18,514 $30,366 $22,660
Discount/Purchased Covered
Loans, gross 5.39% 6.15% 6.03%
Nonperforming Purchased Covered Loans/
Total Purchased Covered Loans 5.20% 2.20% 3.39%
Purchased Non-Covered Loans (2):
Fair Value Discount on Purchased
Non-Covered Loans $3,609 $8,028 $4,586
Discount/Purchased Non-Covered 5.58% 7.27% 6.11%
Loans, gross
Nonperforming Purchased Non-Covered Loans/
Total Purchased Non-Covered Loans 8.03% 19.41% 12.92%
10. Capital.
(in thousands, except per-share amounts)
%
6/30/13 6/30/12 Change 3/31/13
Shareholders' Equity $544,622 $557,926 -2.4% $558,980
Tier I Regulatory Capital 405,851 407,571 -0.4% 408,643
Total Regulatory Capital 443,052 443,650 -0.1% 444,401
Total Assets 4,813,908 4,953,130 -2.8% 4,887,844
Risk-Adjusted Assets 2,772,900 2,818,628 -1.6% 2,778,938
Shareholders' Equity/
Total Assets 11.31% 11.26% 11.44%
Shareholders' Equity/
Total Loans 28.08% 24.08% 27.44%
Tier I Capital/Total Assets 8.43% 8.23% 8.36%
Tier I Capital/
Risk-Adjusted Assets 14.64% 14.46% 14.71%
Total Regulatory Capital/
Risk-Adjusted Assets 15.98% 15.74% 15.99%
Tangible Common Equity Ratio 8.61% 8.54% 8.75%
Common Shares Outstanding 26,769 27,621 -3.1% 27,018
Common Equity Per Share $20.34 $20.20 0.7% $20.69
Market Value Per Common Share $45.69 $47.19 -3.2% $45.33
Share Repurchase Programs
(shares in thousands)
%
Q2'13 Q2'12 Change Q1'13
Total Shares Repurchased 270 317 -14.9% 347
Average Repurchase Price $44.29 $45.45 -2.6% $44.47
Net Shares Repurchased 249 296 -16.2% 195
%
6/30'13YTD 6/30'12YTD Change
Total Shares Repurchased 617 566 9.0%
Average Repurchase Price $44.39 $46.07 -3.6%
Net Shares Repurchased 444 529 -16.1%
11. Period-End Balance Sheets.
(unaudited, dollars in thousands)
%
6/30/13 6/30/12 Change 3/31/13
Assets:
Cash and Due from Banks $384,276 $320,925 19.7% $355,459
Investment Securities:
Available For Sale 1,004,888 708,717 41.8% 972,176
Held to Maturity 1,134,615 1,206,646 -6.0% 1,162,358
Purchased Covered Loans (1) 324,976 463,251 -29.8% 353,034
Purchased Non-Covered Loans (2) 61,062 102,390 -40.4% 70,504
Originated Loans 1,553,303 1,751,578 -11.3% 1,613,396
Allowance For Loan Losses (30,926) (31,523) -1.9% (30,354)
Total Loans, net 1,908,415 2,285,696 -16.5% 2,006,580
Non-Covered Other Real Estate
Owned 8,957 17,585 -49.1% 9,671
Covered Other Real Estate
Owned (1) 10,480 14,608 -28.3% 13,713
Premises and Equipment, net 38,267 37,867 1.1% 38,519
Identifiable Intangibles, net 20,877 25,888 -19.4% 22,042
Goodwill 121,673 121,673 0.0% 121,673
Other Assets 181,460 213,525 -15.0% 185,653
Total Assets $4,813,908 $4,953,130 -2.8% $4,887,844
Liabilities and Shareholders' Equity:
Deposits:
Noninterest Bearing $1,644,151 $1,573,188 4.5% $1,621,887
Interest-Bearing Transaction 725,852 742,633 -2.3% 771,268
Savings 1,139,110 1,136,876 0.2% 1,160,976
Time 592,281 755,802 -21.6% 607,819
Total Deposits 4,101,394 4,208,499 -2.5% 4,161,950
Short-Term Borrowed Funds 66,640 81,582 -18.3% 61,854
Federal Home Loan Bank Advances 25,687 25,911 -0.9% 25,743
Term Repurchase Agreement 10,000 10,000 0.0% 10,000
Debt Financing 15,000 15,000 0.0% 15,000
Other Liabilities 50,565 54,212 -6.7% 54,317
Total Liabilities 4,269,286 4,395,204 -2.9% 4,328,864
Shareholders' Equity:
Common Equity:
Paid-In Capital 374,209 375,732 -0.4% 376,680
Accumulated Other
Comprehensive Income 4,524 13,030 -65.3% 15,372
Retained Earnings 165,889 169,164 -1.9% 166,928
Total Shareholders' Equity 544,622 557,926 -2.4% 558,980
Total Liabilities and
Shareholders' Equity $4,813,908 $4,953,130 -2.8% $4,887,844
12. Income Statements.
(unaudited, in thousands except per-share amounts)
%
Q2'13 Q2'12 Change Q1'13
Interest & Fee Income:
Loans $26,180 $33,745 -22.4% $27,399
Investment Securities:
Available for Sale 5,532 4,938 12.0% 5,336
Held to Maturity 7,557 8,218 -8.0% 7,730
Total Interest & Fee Income 39,269 46,901 -16.3% 40,465
Interest Expense:
Transaction Deposits 64 78 -17.9% 66
Savings Deposits 228 230 -0.6% 230
Time Deposits 555 799 -30.6% 603
Short-Term Borrowed Funds 26 21 24.9% 11
Federal Home Loan Bank Advances 120 119 0.5% 118
Term Repurchase Agreement 25 24 2.4% 24
Debt Financing 201 201 -0.1% 200
Total Interest Expense 1,219 1,472 -17.2% 1,252
Net Interest Income 38,050 45,429 -16.2% 39,213
Provision for Loan Losses 1,800 2,800 -35.7% 2,800
Noninterest Income:
Service Charges 6,452 7,027 -8.2% 6,542
Merchant Processing Services 2,413 2,529 -4.6% 2,409
Debit Card Fees 1,478 1,345 9.9% 1,358
ATM Processing Fees 721 932 -22.6% 705
Trust Fees 585 497 17.6% 568
Financial Services Commissions 284 194 46.5% 180
Loss on Sale of Securities -- (1,287) n/m --
Other 2,351 2,296 2.4% 2,516
Total Noninterest Income 14,284 13,533 5.5% 14,278
Noninterest Expense:
Salaries and Benefits 14,064 14,494 -3.0% 14,403
Occupancy 3,638 3,775 -3.6% 3,886
Outsourced Data Processing 2,140 2,078 3.0% 2,157
Amortization of Identifiable Intangibles 1,165 1,339 -12.9% 1,219
Professional Fees 745 902 -17.5% 635
Equipment 1,021 1,041 -2.0% 880
Other Real Estate Owned 278 3 n/m 334
Courier Service 737 793 -7.1% 741
Other 4,404 4,924 -10.6% 4,422
Total Noninterest Expense 28,192 29,349 -3.9% 28,677
Income Before Income Taxes 22,342 26,813 -16.7% 22,014
Income Tax Provision 5,230 5,849 -10.6% 4,743
Net Income $17,112 $20,964 -18.4% $17,271
Average Common Shares Outstanding 26,890 27,744 -3.1% 27,145
Diluted Common Shares Outstanding 26,898 27,790 -3.2% 27,157
Per Common Share Data:
Basic Earnings $0.64 $0.76 -15.8% $0.64
Diluted Earnings 0.64 0.75 -14.7% 0.64
Dividends Paid 0.37 0.37 0.0% 0.37
%
6/30'13YTD 6/30'12YTD Change
Interest & Fee Income:
Loans $53,579 $69,401 -22.8%
Investment Securities:
Available for Sale 10,868 9,726 11.7%
Held to Maturity 15,287 16,072 -4.9%
Total Interest & Fee Income 79,734 95,199 -16.2%
Interest Expense:
Transaction Deposits 130 168 -22.6%
Savings Deposits 458 466 -1.5%
Time Deposits 1,158 1,660 -30.2%
Short-Term Borrowed Funds 37 48 -22.5%
Federal Home Loan Bank Advances 238 239 -0.4%
Term Repurchase Agreement 49 49 0.0%
Debt Financing 401 401 0.0%
Total Interest Expense 2,471 3,031 -18.5%
Net Interest Income 77,263 92,168 -16.2%
Provision for Loan Losses 4,600 5,600 -17.9%
Noninterest Income:
Service Charges 12,994 14,122 -8.0%
Merchant Processing Services 4,822 4,922 -2.0%
Debit Card Fees 2,836 2,508 13.1%
ATM Processing Fees 1,426 1,865 -23.5%
Trust Fees 1,153 986 16.9%
Financial Services Commissions 464 365 27.0%
Loss on Sale of Securities -- (1,287) n/m
Other 4,867 4,721 3.1%
Total Noninterest Income 28,562 28,202 1.3%
Noninterest Expense:
Salaries and Benefits 28,467 29,540 -3.6%
Occupancy 7,524 7,709 -2.4%
Outsourced Data Processing 4,297 4,161 3.3%
Amortization of Identifiable Intangibles 2,384 2,741 -13.0%
Professional Fees 1,380 1,669 -17.3%
Equipment 1,901 1,892 0.4%
Other Real Estate Owned 612 233 162.8%
Courier Service 1,478 1,578 -6.3%
Other 8,826 9,860 -10.5%
Total Noninterest Expense 56,869 59,383 -4.2%
Income Before Income Taxes 44,356 55,387 -19.9%
Income Tax Provision 9,973 13,418 -25.7%
Net Income $34,383 $41,969 -18.1%
Average Common Shares Outstanding 27,017 27,897 -3.2%
Diluted Common Shares Outstanding 27,027 27,951 -3.3%
Per Common Share Data:
Basic Earnings $1.27 $1.50 -15.3%
Diluted Earnings 1.27 1.50 -15.3%
Dividends Paid 0.74 0.74 0.0%
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