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CST: 15/10/2019 00:11:27   

Westamerica Bancorporation Reports First Quarter 2019 Financial Results

179 Days ago

SAN RAFAEL, Calif., April 18, 2019 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the first quarter 2019 of $19.6 million and diluted earnings per common share ("EPS") of $0.73. These results compare to net income of $19.1 million and EPS of $0.71 for the fourth quarter 2018 and net income of $17.5 million and EPS of $0.66 for the first quarter 2018.

"The annualized net interest margin increased to 3.12 percent for the first quarter 2019 from 3.06 percent in the fourth quarter 2018. The yields earned on loans and investment securities improved while our annualized funding costs were unchanged at 0.04 percent of our interest-earning assets. Operating expenses declined to $25.2 million for the first quarter 2019 from $25.8 million for the fourth quarter 2018; operating costs represented only 49 percent of revenues, on a fully-taxable equivalent basis, for the first quarter 2019. Asset quality remained high with nonperforming assets totaling only $4.4 million at March 31, 2019,” said Chairman, President and CEO David Payne. “First quarter 2019 results generated an annualized 12.2 percent return on average common equity,” concluded Payne.

Net interest income on a fully-taxable equivalent (FTE) basis was $40.2 million for the first quarter 2019, compared to $40.3 million for the fourth quarter 2018 and $37.3 million for the first quarter 2018. The annualized net interest margin (FTE) was 3.12 percent for the first quarter 2019, compared to 3.06 percent for the fourth quarter 2018 and 2.89 percent for the first quarter 2018. Average earning asset volumes declined in the first quarter 2019 compared to the fourth quarter 2018 as expected seasonal deposit declines reduced interest-bearing cash balances. Checking and savings deposits, which are less sensitive to rising interest rates than time deposits, represented ninety-six percent of the Company’s average deposit base during the first quarter 2019.

The Company recognized no provision for loan losses for the first quarter 2019 given low levels of nonperforming loans and other credit quality attributes.

Noninterest income for the first quarter 2019 totaled $11.6 million, compared to $11.9 million for the fourth quarter 2018, and $12.0 million for the first quarter 2018.

Noninterest expense for the first quarter 2019 totaled $25.2 million, a decline of $604 thousand compared to the fourth quarter 2018 due to lower occupancy and equipment expenses, amortization of intangible assets and operating losses on limited partnership investments. Noninterest expense for the first quarter 2019 was $839 thousand lower than noninterest expense for the first quarter 2018 due to lower personnel costs, professional fees and amortization of intangible assets, offset in part by higher occupancy and equipment expenses.

The tax rate (FTE) applied to pre-tax income (FTE) was 26.3 percent for the first quarter 2019, compared to 27.8 percent for the fourth quarter 2018 and 24.6 percent for the first quarter 2018. The lower tax rates in the first quarter 2019 and first quarter 2018 are due to tax benefits of $284 thousand and $451 thousand, respectively, for tax deductions from the exercise of employee stock options which exceeded related compensation expense recognized in the financial statements.

Westamerica Bancorporation’s 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, 2018 filed on Form 10-K and quarterly report for the quarter ended September 30, 2018 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, cyber security risks, 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 April 18, 2019    
WESTAMERICA BANCORPORATION          
FINANCIAL HIGHLIGHTS            
March 31, 2019            
               
1. Net Income Summary.            
    (in thousands except per-share amounts)  
        %      
    Q1'2019 Q1'2018 Change
  Q4'2018  
               
  Net Interest and Fee Income (FTE) $ 40,247   $ 37,275   8.0%   $ 40,288    
  Provision for Loan Losses     -       -   n/m       -    
  Noninterest Income   11,579     11,955   -3.1%     11,897    
  Noninterest Expense   25,183     26,022   -3.2%     25,787    
  Income Before Taxes (FTE)   26,643     23,208   14.8%     26,398    
  Income Tax Provision (FTE)   6,997     5,702   22.7%     7,343    
  Net Income $ 19,646   $ 17,506   12.2%   $ 19,055    
               
  Average Common Shares Outstanding   26,841     26,532   1.2%     26,729    
  Diluted Average Common Shares   26,912     26,665   0.9%     26,815    
               
  Operating Ratios:            
  Basic Earnings Per Common Share $ 0.73   $ 0.66   10.6%   $ 0.71    
  Diluted Earnings Per Common Share   0.73     0.66   10.6%     0.71    
  Return On Assets (a)   1.42 %     1.28 %         1.33 %    
  Return On Common Equity (a)   12.2 %     11.6 %         11.7 %    
  Net Interest Margin (FTE) (a)   3.12 %     2.89 %         3.06 %    
  Efficiency Ratio (FTE)   48.6 %     52.9 %         49.4 %    
               
  Dividends Paid Per Common Share $ 0.40   $ 0.40   0.0%   $ 0.40    
  Common Dividend Payout Ratio       55 %     61 %         56 %    
               
2. Net Interest Income.            
    (dollars in thousands)  
        %      
    Q1'2019 Q1'2018 Change   Q4'2018  
               
  Interest and Fee Income (FTE) $ 40,741   $ 37,734   8.0%   $ 40,802    
  Interest Expense   494     459   7.6%     514    
  Net Interest and Fee Income (FTE) $ 40,247   $ 37,275   8.0%   $ 40,288    
               
  Average Earning Assets $ 5,184,978   $ 5,161,144   0.5%   $ 5,270,708    
  Average Interest-            
  Bearing Liabilities   2,689,684     2,734,227   -1.6%     2,691,370    
               
  Yield on Earning Assets (FTE) (a)   3.16 %     2.93 %         3.10 %    
  Cost of Funds (a)   0.04 %     0.04 %         0.04 %    
  Net Interest Margin (FTE) (a)   3.12 %     2.89 %         3.06 %    
  Interest Expense/            
  Interest-Bearing Liabilities (a)   0.08 %     0.07 %         0.08 %    
  Net Interest Spread (FTE) (a)   3.08 %     2.86 %         3.02 %    
               
3. Loans & Other Earning Assets.            
    (average volume, dollars in thousands)  
        %      
    Q1'2019 Q1'2018 Change   Q4'2018  
               
  Total Assets $ 5,611,762   $ 5,564,705   0.8%   $ 5,680,321    
  Total Earning Assets   5,184,978     5,161,144   0.5%     5,270,708    
  Total Loans   1,205,656     1,243,750   -3.1%     1,189,744    
  Commercial Loans   281,465     316,345   -11.0%     271,165    
  Commercial RE Loans     580,178     556,034   4.3%     570,059    
  Consumer Loans   344,013     371,371   -7.4%     348,520    
  Total Investment Securities   3,689,852     3,479,463   6.0%     3,692,951    
  Equity Securities   1,748     1,993   -12.3%     1,733    
  Debt Securities Available For Sale   2,734,658     2,341,414   16.8%     2,684,431    
  Debt Securities Held To Maturity   953,446     1,136,056   -16.1%     1,006,787    
  Total Interest-Bearing Cash   289,470     437,931   -33.9%     388,013    
               
  Loans/Deposits   24.9 %     25.8 %         24.2 %    
               
4. Deposits, Other Interest-Bearing Liabilities & Equity.        
    (average volume, dollars in thousands)  
        %      
    Q1'2019 Q1'2018 Change   Q4'2018  
               
  Total Deposits $ 4,834,690   $ 4,828,352   0.1%   $ 4,917,901    
  Noninterest Demand     2,204,232     2,156,626   2.2%     2,280,174    
  Interest-Bearing Transaction   946,458     925,533   2.3%     927,676    
  Savings   1,492,100     1,518,028   -1.7%     1,510,358    
  Time greater than $100K   82,796     103,145   -19.7%     86,141    
  Time less than $100K   109,104     125,020   -12.7%     113,552    
  Total Short-Term Borrowings   59,226     62,501   -5.2%     53,643    
  Shareholders' Equity   655,380     613,860   6.8%     646,129    
               
  Demand Deposits/            
  Total Deposits   45.6 %     44.7 %         46.4 %    
  Transaction & Savings              
  Deposits / Total Deposits   96.0 %     95.3 %         95.9 %    
               
5. Interest Yields Earned & Rates Paid.          
    (dollars in thousands)    
    Q1'2019    
    Average Income/ Yield (a) /      
    Volume Expense Rate      
  Interest & Fee Income Earned            
  Total Earning Assets (FTE) $ 5,184,978   $ 40,741   3.16 %      
  Total Loans (FTE)     1,205,656     14,908   5.01 %      
  Commercial Loans (FTE)   281,465     3,766   5.43 %      
  Commercial RE Loans     580,178     7,577   5.30 %      
  Consumer Loans   344,013     3,565   4.19 %      
  Total Investments (FTE)   3,689,852     24,095   2.61 %      
  Total Interest-Bearing Cash   289,470     1,738   2.40 %      
               
  Interest Expense Paid            
  Total Earning Assets     5,184,978     494   0.04 %      
  Total Interest-Bearing Liabilities   2,689,684     494   0.08 %      
  Total Interest-Bearing Deposits   2,630,458     485   0.07 %      
  Interest-Bearing Transaction   946,458     121   0.05 %      
  Savings   1,492,100     216   0.06 %      
  Time less than $100K   109,104     66   0.24 %      
  Time greater than $100K   82,796     82   0.40 %      
  Total Short-Term Borrowings     59,226     9   0.06 %      
               
  Net Interest Income and              
  Margin (FTE)   $ 40,247   3.12 %      
               
    Q1'2018    
    Average Income/ Yield (a) /      
    Volume Expense Rate      
  Interest & Fee Income Earned            
  Total Earning Assets (FTE) $ 5,161,144   $ 37,734   2.93 %      
  Total Loans (FTE)   1,243,750     14,822   4.83 %      
  Commercial Loans (FTE)   316,345     3,791   4.86 %      
  Commercial RE Loans     556,034     7,632   5.57 %      
  Consumer Loans   371,371     3,399   3.70 %      
  Total Investments (FTE)   3,479,463     21,104   2.43 %      
  Total Interest-Bearing Cash   437,931     1,808   1.52 %      
               
  Interest Expense Paid            
  Total Earning Assets     5,161,144     459   0.04 %      
  Total Interest-Bearing Liabilities   2,734,227     459   0.07 %      
  Total Interest-Bearing Deposits   2,671,726     450   0.07 %      
  Interest-Bearing Transaction   925,533     60   0.03 %      
  Savings   1,518,028     222   0.06 %      
  Time less than $100K   125,020     71   0.23 %      
  Time greater than $100K   103,145     97   0.38 %      
  Total Short-Term Borrowings     62,501     9   0.06 %      
               
  Net Interest Income and            
  Margin (FTE)   $ 37,275   2.89 %      
               
6. Noninterest Income.            
    (dollars in thousands except per-share amounts)  
        %      
    Q1'2019 Q1'2018 Change   Q4'2018  
               
  Service Charges on Deposits $ 4,504   $ 4,752   -5.2%   $ 4,496    
  Merchant Processing Services   2,558     2,420   5.7%     2,440    
  Debit Card Fees   1,507     1,605   -6.1%     1,685    
  Other Service Fees   577     631   -8.6%     620    
  ATM Processing Fees   633     664   -4.7%     703    
  Trust Fees   717     743   -3.4%     737    
  Financial Services Commissions   101     114   -11.8%     112    
  Equity Securities Gains (Losses)   24       (36 ) n/m       14    
  Other Income   958     1,062   -9.7%     1,090    
  Total Noninterest Income $ 11,579   $ 11,955   -3.1%   $ 11,897    
               
  Total Revenue (FTE) $ 51,826   $ 49,230   5.3%   $ 52,185    
  Noninterest Income/Revenue (FTE)   22.3 %     24.3 %         22.8 %    
  Service Charges/Avg. Deposits (a)   0.38 %     0.40 %         0.36 %    
  Total Revenues (FTE) Per Avg.              
  Common Share (a) $ 7.83   $ 7.52   4.1%   $ 7.75    
               
7. Noninterest Expense.            
    (dollars in thousands)  
        %      
    Q1'2019 Q1'2018 Change   Q4'2018  
               
  Salaries & Benefits $ 13,108   $ 13,351   -1.8%   $ 13,055    
  Occupancy and Equipment   5,048     4,691   7.6%     5,314    
  Outsourced Data Processing   2,369     2,340   1.2%     2,299    
  Amortization of              
  Identifiable Intangibles   310     570   -45.6%     447    
  Professional Fees   665     785   -15.3%     565    
  Courier Service   442     463   -4.6%     446    
  Other Operating   3,241     3,822   -15.2%     3,661    
  Total Noninterest Expense $ 25,183   $ 26,022   -3.2%   $ 25,787    
               
  Noninterest Expense/            
  Avg. Earning Assets (a)   1.97 %     2.04 %         1.94 %    
  Noninterest Expense/Revenues (FTE)   48.6 %     52.9 %         49.4 %    
               
8. Allowance for Loan Losses.            
    (dollars in thousands)  
        %      
    Q1'2019 Q1'2018 Change   Q4'2018  
               
  Average Total Loans $ 1,205,656   $ 1,243,750   -3.1%   $ 1,189,744    
               
  Allowance for Loan Loss (ALL)            
  Beginning of Period   $ 21,351   $ 23,009   -7.2%   $ 22,027    
  Provision for Loan Losses         -       -   n/m       -    
  Net ALL (Losses) Recoveries   (874 )   72   n/m     (676 )  
  ALL End of Period $ 20,477   $ 23,081   -11.3%   $ 21,351    
  ALL Recoveries / Gross ALL Losses       37 %     105 %         44 %    
  Net ALL Losses (Recoveries) /            
  Avg. Total Loans (a)   0.29 %     -0.02 %       0.23 %    
               
9. Credit Quality.            
    (dollars in thousands)  
        %      
    3/31/19 3/31/18 Change   12/31/18  
  Nonperforming Loans:            
  Nonperforming Nonaccrual $ 330   $ 2,030   -83.7%   $ 998    
  Performing Nonaccrual     3,670       4,110   -10.7%       3,870    
  Total Nonaccrual Loans   4,000     6,140   -34.9%     4,868    
  Accruing Loans 90+ Days Past Due   394     255   54.5%     551    
  Total   4,394     6,395   -31.3%     5,419    
  Repossessed Loan Collateral     43     1,376   -96.8%     350    
  Total Nonperforming Assets $ 4,437   $ 7,771   -42.9%   $ 5,769    
               
  Total Loans Outstanding   $ 1,204,844   $ 1,228,584   -1.9%   $ 1,207,202    
               
  Total Assets   $ 5,555,961   $ 5,551,036   0.1%   $ 5,568,526    
               
  Loans:            
  Allowance for Loan Losses $ 20,477   $ 23,081   -11.3%   $ 21,351    
  Allowance/Loans   1.70 %     1.88 %         1.77 %    
  Nonperforming Loans/Total Loans   0.36 %     0.52 %         0.45 %    
               
10. Capital.            
    (in thousands, except per-share amounts)  
        %      
    3/31/19 3/31/18 Change   12/31/18  
               
  Shareholders' Equity $ 656,767   $ 582,083   12.8%   $ 615,591    
  Total Assets   5,555,961     5,551,036   0.1%     5,568,526    
               
  Shareholders' Equity/            
  Total Assets   11.82 %     10.49 %         11.05 %    
  Shareholders' Equity/            
  Total Loans   54.51 %     47.38 %         50.99 %    
  Tangible Common Equity Ratio   9.82 %     8.42 %         9.04 %    
  Common Shares Outstanding   26,901     26,591   1.2%     26,730    
  Common Equity Per Share $ 24.41   $ 21.89   11.5%   $ 23.03    
  Market Value Per Common Share $ 61.80   $ 58.08   6.4%   $ 55.68    
               
  Share Repurchase Programs            
    (shares in thousands)  
        %      
    Q1'2019 Q1'2018 Change   Q4'2018  
               
  Total Shares Repurchased     -       -   n/m       -    
  Average Repurchase Price     $-       $-   n/m       $-    
  Net Shares Issued     (171 )   (166 ) n/m     (3 )  
               
11. Period-End Balance Sheets.            
    (unaudited, dollars in thousands)  
        %      
    3/31/19 3/31/18 Change   12/31/18  
  Assets:            
  Cash and Due from Banks $ 421,788   $ 555,607   -24.1%   $ 420,284    
               
  Investment Securities:            
  Equity Securities   1,771     1,764   0.4%     1,747    
  Debt Securities Available For Sale   2,702,240     2,351,970   14.9%     2,654,670    
  Debt Securities Held to Maturity   923,190     1,114,287   -17.1%     984,609    
               
  Loans   1,204,844     1,228,584   -1.9%     1,207,202    
  Allowance For Loan Losses   (20,477 )   (23,081 ) -11.3%     (21,351 )  
  Total Loans, net   1,184,367     1,205,503   -1.8%     1,185,851    
               
  Other Real Estate Owned   43     1,376   -96.8%     350    
  Premises and Equipment, net   33,934     35,790   -5.2%     34,507    
  Identifiable Intangibles, net   1,619     3,280   -50.6%     1,929    
  Goodwill     121,673     121,673   0.0%     121,673    
  Other Assets   165,336     159,786   3.5%     162,906    
               
  Total Assets $ 5,555,961   $ 5,551,036   0.1%   $ 5,568,526    
               
  Liabilities and Shareholders' Equity:            
  Deposits:            
  Noninterest-Bearing $ 2,179,803   $ 2,179,157   0.0%   $ 2,243,251    
  Interest-Bearing Transaction   941,379     924,081   1.9%     929,346    
  Savings   1,482,187     1,540,192   -3.8%     1,498,991    
  Time   189,215     224,437   -15.7%     195,251    
  Total Deposits   4,792,584     4,867,867   -1.5%     4,866,839    
               
  Short-Term Borrowed Funds   58,317     65,356   -10.8%     51,247    
  Other Liabilities   48,293     35,730   35.2%     34,849    
  Total Liabilities   4,899,193     4,968,953   -1.4%     4,952,935    
               
  Shareholders' Equity:            
  Common Equity:            
  Paid-In Capital   465,281     441,350   5.4%     449,746    
  Accumulated Other            
  Comprehensive Loss   (11,249 )   (43,452 ) n/m     (39,996 )  
  Retained Earnings   202,735     184,185   10.1%     205,841    
  Total Shareholders' Equity   656,767     582,083   12.8%     615,591    
               
  Total Liabilities and              
  Shareholders' Equity $ 5,555,961   $ 5,551,036   0.1%   $ 5,568,526    
               
12. Income Statements.            
    (unaudited, in thousands except per-share amounts)  
        %      
    Q1'2019 Q1'2018 Change   Q4'2018  
  Interest & Fee Income:            
  Loans $ 14,797   $ 14,697   0.7%   $ 14,783    
  Investment Securities:            
  Equity Securities   98     85   15.3%     98    
  Debt Securities Available for Sale   17,521     13,551   29.3%     16,865    
  Debt Securities Held to Maturity   5,329     6,174   -13.7%     5,710    
  Interest-Bearing Cash   1,738     1,808   -3.9%     1,992    
  Total Interest & Fee Income   39,483     36,315   8.7%     39,448    
               
  Interest Expense:            
  Transaction Deposits   121     60   102.4%     124    
  Savings Deposits   216     222   -2.3%     227    
  Time Deposits   148     168   -12.3%     155    
  Short-Term Borrowed Funds   9     9   -3.9%     8    
  Total Interest Expense   494     459   7.6%     514    
               
  Net Interest Income   38,989     35,856   8.7%     38,934    
               
  Provision for Loan Losses     -       -   n/m       -    
               
  Noninterest Income:            
  Service Charges     4,504     4,752   -5.2%     4,496    
  Merchant Processing Services   2,558     2,420   5.7%     2,440    
  Debit Card Fees   1,507     1,605   -6.1%     1,685    
  Other Service Fees   577     631   -8.6%     620    
  ATM Processing Fees   633     664   -4.7%     703    
  Trust Fees   717     743   -3.4%     737    
  Financial Services Commissions   101     114   -11.8%     112    
  Equity Securities Gains (Losses)   24       (36 ) n/m       14    
  Other   958     1,062   -9.7%     1,090    
  Total Noninterest Income   11,579     11,955   -3.1%     11,897    
               
  Noninterest Expense:            
  Salaries and   Benefits   13,108     13,351   -1.8%     13,055    
  Occupancy and Equipment   5,048     4,691   7.6%     5,314    
  Outsourced Data Processing   2,369     2,340   1.2%     2,299    
  Amortization of Identifiable Intangibles   310     570   -45.6%     447    
  Professional Fees   665     785   -15.3%     565    
  Courier Service   442     463   -4.6%     446    
  Other   3,241     3,822   -15.2%     3,661    
  Total Noninterest Expense   25,183     26,022   -3.2%     25,787    
               
  Income Before Income Taxes   25,385     21,789   16.5%     25,044    
  Income Tax Provision   5,739     4,283   34.0%     5,989    
  Net Income $ 19,646   $ 17,506   12.2%   $ 19,055    
               
  Average Common Shares Outstanding   26,841     26,532   1.2%     26,729    
  Diluted Common Shares Outstanding   26,912     26,665   0.9%     26,815    
               
  Per Common Share Data:            
  Basic Earnings $ 0.73   $ 0.66   10.6%   $ 0.71    
  Diluted Earnings   0.73     0.66   10.6%     0.71    
  Dividends Paid   0.40     0.40   0.0%     0.40    
               
               
  Footnotes and Abbreviations:            
               
  Certain amounts in prior periods have been reclassified to conform to the current presentation.    
       
  (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            

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