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CST: 17/11/2019 19:50:43   

Westamerica Bancorporation Reports Third Quarter 2019 Financial Results

31 Days ago

SAN RAFAEL, Calif., Oct. 17, 2019 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the third quarter 2019 of $20.4 million and diluted earnings per common share ("EPS") of $0.75. These results compare to net income of $19.6 million and EPS of $0.73 for the second quarter 2019 and net income of $17.0 million and EPS of $0.63 for the third quarter 2018.

"The annualized net interest margin was 3.11 percent for the third quarter 2019 compared to 3.13 percent for the second quarter 2019. The valuable composition of our deposit base supported the margin; our annualized funding costs as a percentage of our interest-earning assets remained at just 0.04 percent for the third quarter 2019. Operating expense declined to $24.0 million for the third quarter 2019 compared to $25.6 million for the second quarter 2019 and $29.4 million for the third quarter 2018. Operating costs represented only 46 percent of revenues for the third quarter 2019. Asset quality remained solid with nonperforming assets totaling only 4.7 million at September 30, 2019,” said Chairman, President and CEO David Payne. “Third quarter 2019 results generated an annualized 11.9 percent return on average shareholders’ equity, and the Company paid its shareholders a $0.41 dividend per common share in the third quarter,” concluded Payne.

Net interest income on a fully-taxable equivalent (FTE) basis was $40.3 million for the third quarter 2019, compared to $40.3 million for the second quarter 2019 and $39.5 million for the third quarter 2018. The annualized net interest margin (FTE) was 3.11 percent for the third quarter 2019, compared to 3.13 percent for the second quarter 2019 and 3.00 percent for the third quarter 2018. Checking and savings deposits, which pay much lower interest rates than time deposits, represented ninety-six percent of the Company’s average deposit base during the third quarter 2019.

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

Noninterest income for the third quarter 2019 totaled $11.8 million, compared to $12.3 million for the second quarter 2019, and $12.5 million for the third quarter 2018.

Noninterest expense for the third quarter 2019 totaled $24.0 million, a decline of $1.5 million from the second quarter 2019 due to lower FDIC insurance assessments and employee benefit costs in the third quarter 2019 and a contingency provision recognized in the second quarter 2019. Noninterest expense for the third quarter 2019 was $5.3 million lower than the third quarter 2018 due to a contingency provision recognized in the third quarter 2018 and lower FDIC insurance assessments, employee benefit costs, and intangible amortization in the third quarter 2019. Lower third quarter 2019 FDIC assessments are due to application of Westamerica Bank’s assessment credit described in our December 31, 2018 Form 10-K, Part 1, Item 1, “Premiums for Deposit Insurance.”

The tax rate (FTE) applied to pre-tax income (FTE) was 27.5 percent for the third quarter 2019, compared to 27.5 percent for the second quarter 2019 and 25.0 percent for the third quarter 2018. The higher tax rates in the third and second quarters of 2019 are due to lower levels of tax-exempt interest income and stock compensation tax deductions, and a life insurance gain realized in the third quarter 2018.

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 June 30, 2019 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 October 17, 2019  
WESTAMERICA BANCORPORATION      
FINANCIAL HIGHLIGHTS        
September 30, 2019        
           
1. Net Income Summary.        
    (in thousands except per-share amounts)
        %  
    Q3'2019 Q3'2018 Change Q2'2019
           
  Net Interest and Fee Income (FTE) $40,349 $39,498 2.2% $40,330
  Provision for Loan Losses - - n/m -
  Noninterest Income 11,809 12,528 -5.7% 12,288
  Noninterest Expense 24,033 29,366 -18.2% 25,561
  Income Before Taxes (FTE) 28,125 22,660 24.1% 27,057
  Income Tax Provision (FTE) 7,735 5,667 36.5% 7,432
  Net Income $20,390 $16,993 20.0% $19,625
           
  Average Common Shares Outstanding 26,986 26,701 1.1% 26,942
  Diluted Average Common Shares 27,027 26,815 0.8% 26,987
           
  Operating Ratios:        
  Basic Earnings Per Common Share $0.76 $0.64 18.1% $0.73
  Diluted Earnings Per Common Share $0.75 0.63 19.8% 0.73
  Return On Assets (a) 1.45% 1.19%   1.42%
  Return On Common Equity (a) 11.9% 10.6%   11.7%
  Net Interest Margin (FTE) (a) 3.11% 3.00%   3.13%
  Efficiency Ratio (FTE) 46.1% 56.4%   48.6%
           
  Dividends Paid Per Common Share $0.41 $0.40 2.5% $0.41
  Common Dividend Payout Ratio 55% 63%   56%
           
        %  
    9/30'19YTD 9/30'18YTD Change  
           
  Net Interest and Fee Income (FTE) $120,925 $115,122 5.0%  
  Provision for Loan Losses - - n/m  
  Noninterest Income 35,676 36,252 -1.6%  
  Noninterest Expense 74,777 81,129 -7.8%  
  Income Before Taxes (FTE) 81,824 70,245 16.5%  
  Income Tax Provision (FTE) 22,163 17,736 25.0%  
  Net Income $59,661 $52,509 13.6%  
           
  Average Common Shares Outstanding 26,924 26,622 1.1%  
  Diluted Average Common Shares 26,976 26,736 0.9%  
           
  Operating Ratios:        
  Basic Earnings Per Common Share $2.22 $1.97 12.7%  
  Diluted Earnings Per Common Share 2.21 1.96 12.8%  
  Return On Assets (a) 1.43% 1.25%    
  Return On Common Equity (a) 11.9% 11.2%    
  Net Interest Margin (FTE) (a) 3.12% 2.95%    
  Efficiency Ratio (FTE) 47.8% 53.6%    
           
  Dividends Paid Per Common Share $1.22 $1.20 1.7%  
  Common Dividend Payout Ratio 55% 61%    
           
2. Net Interest Income.        
    (dollars in thousands)
        %  
    Q3'2019 Q3'2018 Change Q2'2019
           
  Interest and Fee Income (FTE) $40,804 $40,025 1.9% $40,817
  Interest Expense 455 527 -13.7% 487
  Net Interest and Fee Income (FTE) $40,349 $39,498 2.2% $40,330
           
  Average Earning Assets $5,176,744 $5,231,257 -1.0% $5,159,112
  Average Interest-        
    Bearing Liabilities 2,586,880 2,733,670 -5.4% 2,646,681
           
  Yield on Earning Assets (FTE) (a) 3.15% 3.04%   3.17%
  Cost of Funds (a) 0.04% 0.04%   0.04%
  Net Interest Margin (FTE) (a) 3.11% 3.00%   3.13%
  Interest Expense/        
    Interest-Bearing Liabilities (a) 0.07% 0.08%   0.08%
  Net Interest Spread (FTE) (a) 3.08% 2.96%   3.09%
           
        %  
    9/30'19YTD 9/30'18YTD Change  
           
  Interest and Fee Income (FTE) $122,362 $116,567 5.0%  
  Interest Expense 1,437 1,445 -0.6%  
  Net Interest and Fee Income (FTE) $120,925 $115,122 5.0%  
           
  Average Earning Assets $5,173,581 $5,191,664 -0.3%  
  Average Interest-        
    Bearing Liabilities 2,640,705 2,732,520 -3.4%  
           
  Yield on Earning Assets (FTE) (a) 3.16% 2.99%    
  Cost of Funds (a) 0.04% 0.04%    
  Net Interest Margin (FTE) (a) 3.12% 2.95%    
  Interest Expense/        
    Interest-Bearing Liabilities (a) 0.07% 0.07%    
  Net Interest Spread (FTE) (a) 3.09% 2.92%    
           
3. Loans & Other Earning Assets.        
    (average volume, dollars in thousands)
        %  
    Q3'2019 Q3'2018 Change Q2'2019
           
  Total Assets $5,570,843 $5,648,004 -1.4% $5,560,740
  Total Earning Assets 5,176,744 5,231,257 -1.0% 5,159,112
  Total Loans 1,142,668 1,194,874 -4.4% 1,183,539
    Commercial Loans 231,232 288,634 -19.9% 262,804
    Commercial RE Loans 579,069 554,081 4.5% 582,126
    Consumer Loans 332,367 352,159 -5.6% 338,609
  Total Investment Securities 3,687,049 3,591,637 2.7% 3,648,436
    Equity Securities 352 1,749 -79.9% 1,772
    Debt Securities Available For Sale 2,862,537 2,538,837 12.7% 2,750,093
    Debt Securities Held To Maturity 824,160 1,051,051 -21.6% 896,571
  Total Interest-Bearing Cash 347,027 444,746 -22.0% 327,137
           
  Loans/Deposits 24.0% 24.4%   24.9%
           
        %  
    9/30'19YTD 9/30'18YTD Change  
           
  Total Assets $5,580,965 $5,600,499 -0.3%  
  Total Earning Assets 5,173,581 5,191,664 -0.3%  
  Total Loans 1,177,057 1,215,712 -3.2%  
    Commercial Loans 258,317 300,215 -14.0%  
    Commercial RE Loans 580,453 553,507 4.9%  
    Consumer Loans 338,287 361,990 -6.5%  
  Total Investment Securities 3,675,102 3,538,724 3.9%  
    Equity Securities 1,285 1,834 -29.9%  
    Debt Securities Available For Sale 2,782,898 2,442,335 13.9%  
    Debt Securities Held To Maturity 890,919 1,094,555 -18.6%  
  Total Interest-Bearing Cash 321,422 437,228 -26.5%  
           
  Loans/Deposits 24.6% 25.0%    
           
4. Deposits, Other Interest-Bearing Liabilities & Equity.    
    (average volume, dollars in thousands)
        %  
    Q3'2019 Q3'2018 Change Q2'2019
           
  Total Deposits $4,770,976 $4,893,859 -2.5% $4,762,286
    Noninterest Demand 2,234,494 2,223,678 0.5% 2,172,207
    Interest-Bearing Transaction 916,180 935,257 -2.0% 945,128
    Savings 1,441,282 1,526,100 -5.6% 1,459,287
    Time greater than $100K 77,568 90,668 -14.4% 80,120
    Time less than $100K 101,452 118,156 -14.1% 105,544
  Total Short-Term Borrowings 50,398 63,489 -20.6% 56,602
  Shareholders' Equity 681,513 636,965 7.0% 669,947
           
  Demand Deposits/        
    Total Deposits 46.8% 45.4%   45.6%
  Transaction & Savings        
    Deposits / Total Deposits 96.2% 95.7%   96.1%
           
        %  
    9/30'19YTD 9/30'18YTD Change  
           
  Total Deposits $4,789,084 $4,856,639 -1.4%  
    Noninterest Demand 2,203,755 2,186,250 0.8%  
    Interest-Bearing Transaction 935,811 928,479 0.8%  
    Savings 1,464,037 1,522,414 -3.8%  
    Time greater than $100K 80,142 97,877 -18.1%  
    Time less than $100K 105,339 121,619 -13.4%  
  Total Short-Term Borrowings 55,376 62,131 -10.9%  
  Shareholders' Equity 669,043 625,496 7.0%  
           
  Demand Deposits/        
    Total Deposits 46.0% 45.0%    
  Transaction & Savings        
    Deposits / Total Deposits 96.1% 95.5%    
           
5. Interest Yields Earned & Rates Paid.      
    (dollars in thousands)  
    Q3'2019  
    Average Income/ Yield (a) /  
    Volume Expense Rate  
  Interest & Fee Income Earned        
    Total Earning Assets (FTE) $5,176,744 $40,804 3.15%  
    Total Loans (FTE) 1,142,668 14,535 5.05%  
    Commercial Loans (FTE) 231,232 3,102 5.32%  
    Commercial RE Loans 579,069 7,772 5.32%  
    Consumer Loans 332,367 3,661 4.37%  
    Total Investments (FTE) 3,687,049 24,368 2.64%  
    Total Interest-Bearing Cash 347,027 1,901 2.14%  
           
  Interest Expense Paid        
    Total Earning Assets 5,176,744 455 0.04%  
    Total Interest-Bearing Liabilities 2,586,880 455 0.07%  
    Total Interest-Bearing Deposits 2,536,482 447 0.07%  
    Interest-Bearing Transaction 916,180 92 0.04%  
    Savings 1,441,282 210 0.06%  
    Time less than $100K 101,452 64 0.25%  
    Time greater than $100K 77,568 81 0.41%  
    Total Short-Term Borrowings 50,398 8 0.06%  
           
  Net Interest Income and        
  Margin (FTE)   $40,349 3.11%  
           
    Q3'2018  
    Average Income/ Yield (a) /  
    Volume Expense Rate  
  Interest & Fee Income Earned        
    Total Earning Assets (FTE) $5,231,257 $40,025 3.04%  
    Total Loans (FTE) 1,194,874 14,707 4.88%  
    Commercial Loans (FTE) 288,634 3,675 5.05%  
    Commercial RE Loans 554,081 7,556 5.41%  
    Consumer Loans 352,159 3,476 3.92%  
    Total Investments (FTE) 3,591,637 22,957 2.56%  
    Total Interest-Bearing Cash 444,746 2,361 1.98%  
           
  Interest Expense Paid        
    Total Earning Assets 5,231,257 527 0.04%  
    Total Interest-Bearing Liabilities 2,733,670 527 0.08%  
    Total Interest-Bearing Deposits 2,670,181 518 0.08%  
    Interest-Bearing Transaction 935,257 129 0.05%  
    Savings 1,526,100 229 0.06%  
    Time less than $100K 118,156 69 0.23%  
    Time greater than $100K 90,668 91 0.40%  
    Total Short-Term Borrowings 63,489 9 0.06%  
           
  Net Interest Income and        
  Margin (FTE)   $39,498 3.00%  
           
6. Noninterest Income.        
    (dollars in thousands except per-share amounts)
        %  
    Q3'2019 Q3'2018 Change Q2'2019
           
  Service Charges on Deposits $4,510 $4,615 -2.3% $4,493
  Merchant Processing Services 2,494 2,464 1.2% 2,657
  Debit Card Fees 1,641 1,656 -0.9% 1,641
  Other Service Fees 580 665 -12.8% 585
  ATM Processing Fees 725 687 5.6% 722
  Trust Fees 733 733 0.1% 749
  Life Insurance Gains - 585 -100.0% 433
  Financial Services Commissions 75 132 -43.2% 93
  Equity Securities (Losses) Gains - (16) n/m 26
  Other Income 1,051 1,007 4.4% 889
  Total Noninterest Income $11,809 $12,528 -5.7% $12,288
           
    Total Revenue (FTE) $52,158 $52,026 0.3% $52,618
    Noninterest Income/Revenue (FTE) 22.6% 24.1%   23.4%
    Service Charges/Avg. Deposits (a) 0.38% 0.37%   0.38%
    Total Revenues (FTE) Per Avg.        
  Common Share (a) $7.67 $7.73 -0.8% $7.83
           
        %  
    9/30'19YTD 9/30'18YTD Change  
           
  Service Charges on Deposits $13,508 $14,012 -3.6%  
  Merchant Processing Services 7,708 7,190 7.2%  
  Debit Card Fees 4,789 4,959 -3.4%  
  Other Service Fees 1,742 1,946 -10.5%  
  ATM Processing Fees 2,080 2,049 1.5%  
  Trust Fees 2,199 2,202 -0.1%  
  Life Insurance Gains 433 585 -26.0%  
  Financial Services Commissions 270 387 -30.4%  
  Equity Securities Gains (Losses) 50 (66) n/m  
  Other Income 2,897 2,988 -3.0%  
  Total Noninterest Income $35,676 $36,252 -1.6%  
           
    Total Revenue (FTE) $156,601 $151,374 3.5%  
    Noninterest Income/Revenue (FTE) 22.8% 23.9%    
    Service Charges/Avg. Deposits (a) 0.38% 0.39%    
    Total Revenues (FTE) Per Avg.        
  Common Share (a) $7.78 $7.60 2.3%  
           
7. Noninterest Expense.        
    (dollars in thousands)
        %  
    Q3'2019 Q3'2018 Change Q2'2019
           
  Salaries & Benefits $12,559 $13,415 -6.4% $13,090
  Occupancy and Equipment 5,199 4,809 8.1% 4,916
  Loss Contingency (1) - 3,500 n/m 553
  Outsourced Data Processing 2,374 2,292 3.6% 2,367
  Amortization of        
    Identifiable Intangibles 76 451 -83.1% 79
  Professional Fees 645 621 3.9% 481
  Courier Service 456 448 1.8% 451
  Other Operating 2,724 3,830 -28.9% 3,624
  Total Noninterest Expense $24,033 $29,366 -18.2% $25,561
           
  Noninterest Expense/        
    Avg. Earning Assets (a) 1.84% 2.23%   1.99%
  Noninterest Expense/Revenues (FTE) 46.1% 56.4%   48.6%
           
        %  
    9/30'19YTD 9/30'18YTD Change  
           
  Salaries & Benefits $38,757 $39,952 -3.0%  
  Occupancy and Equipment 15,163 14,365 5.6%  
  Outsourced Data Processing 7,110 6,930 2.6%  
  Loss Contingency (1) 553 3,500 n/m  
  Amortization of        
    Identifiable Intangibles 465 1,474 -68.4%  
  Professional Fees 1,791 2,277 -21.3%  
  Courier Service 1,349 1,333 1.2%  
  Other Operating 9,589 11,298 -15.1%  
  Total Noninterest Expense $74,777 $81,129 -7.8%  
           
  Noninterest Expense/        
    Avg. Earning Assets (a) 1.93% 2.09%    
  Noninterest Expense/Revenues (FTE) 47.8% 53.6%    
           
8. Allowance for Loan Losses.        
    (dollars in thousands)
        %  
    Q3'2019 Q3'2018 Change Q2'2019
           
  Average Total Loans $1,142,668 $1,194,874 -4.4% $1,183,539
           
  Allowance for Loan Loss (ALL)      
  Beginning of Period $20,117 $23,040 -12.7% $20,477
  Provision for Loan Losses - - n/m -
  Net ALL Losses (289) (1,013) n/m (360)
  ALL End of Period $19,828 $22,027 -10.0% $20,117
  Gross ALL Recoveries /        
  Gross ALL Losses 72% 31%   63%
  Net ALL Losses /        
  Avg. Total Loans (a) 0.10% 0.34%   0.12%
        %  
    9/30'19YTD 9/30'18YTD Change  
           
  Average Total Loans $1,177,057 $1,215,712 -3.2%  
           
  Allowance for Loan Loss (ALL)      
  Beginning of Period $21,351 $23,009 -7.2%  
  Provision for Loan Losses - - n/m  
  Net ALL Losses (1,523) (982) n/m  
  ALL End of Period $19,828 $22,027 -10.0%  
  Gross ALL Recoveries /        
  Gross ALL Losses 55% 73%    
  Net ALL Losses /        
  Avg. Total Loans (a) 0.17% 0.11%    
           
9. Credit Quality.        
    (dollars in thousands)
        %  
    9/30/19 9/30/18 Change 6/30/19
  Nonperforming Loans:        
    Nonperforming Nonaccrual $633 $1,611 -60.7% $177
    Performing Nonaccrual 3,670 3,870 -5.2% 3,670
  Total Nonaccrual Loans 4,303 5,481 -21.5% 3,847
  90+ Days Past Due Accruing Loans 351 361 -2.8% 249
  Total 4,654 5,842 -20.3% 4,096
  Repossessed Loan Collateral 43 620 -93.0% 43
   Total Nonperforming Assets $4,697 $6,462 -27.3% $4,139
           
  Total Loans Outstanding $1,133,229 $1,196,955 -5.3% $1,161,712
           
  Total Assets $5,616,055 $5,529,463 1.6% $5,523,448
           
  Loans:        
  Allowance for Loan Losses $19,828 $22,027 -10.0% $20,117
  Allowance/Loans 1.75% 1.84%   1.73%
  Nonperforming Loans/Total Loans 0.41% 0.49%   0.35%
           
10. Capital.        
    (in thousands, except per-share amounts)
        %  
    9/30/19 9/30/18 Change 6/30/19
           
  Shareholders' Equity $713,378 $592,591 20.4% $693,437
  Total Assets 5,616,055 5,529,463 1.6% 5,523,448
  Shareholders' Equity/        
    Total Assets 12.70% 10.72%   12.55%
  Shareholders' Equity/        
    Total Loans 62.95% 49.51%   59.69%
  Tangible Common Equity Ratio 10.75% 8.67%   10.56%
  Common Shares Outstanding 27,014 26,727 1.1% 26,962
  Common Equity Per Share $26.41 $22.17 19.1% $25.72
  Market Value Per Common Share $62.18 $60.16 3.4% $61.61
           
  Share Repurchase Programs        
    (shares in thousands)
        %  
    Q3'2019 Q3'2018 Change Q2'2019
           
  Total Shares Repurchased - - n/m 8
    Average Repurchase Price $- $- n/m $61.98
  Net Shares Issued (52) (78) n/m (61)
           
        %  
    9/30'19YTD 9/30'18YTD Change  
           
  Total Shares Repurchased 8 9 n/m  
    Average Repurchase Price $61.98 $58.46 n/m  
  Net Shares Issued (284) (302) n/m  
           
11. Period-End Balance Sheets.        
    (unaudited, dollars in thousands)
        %  
    9/30/19 9/30/18 Change 6/30/19
  Assets:        
    Cash and Due from Banks $415,639 $522,660 -20.5% $418,586
           
    Investment Securities:        
    Equity Securities - 1,734 -100.0% 1,797
    Debt Securities Available For Sale 2,983,767 2,478,908 20.4% 2,775,899
    Debt Securities Held to Maturity 793,216 1,025,699 -22.7% 867,989
           
    Loans 1,133,229 1,196,955 -5.3% 1,161,712
    Allowance For Loan Losses (19,828) (22,027) -10.0% (20,117)
    Total Loans, net 1,113,401 1,174,928 -5.2% 1,141,595
           
    Other Real Estate Owned 43 620 -93.0% 43
    Premises and Equipment, net 34,080 35,391 -3.7% 34,014
    Identifiable Intangibles, net 1,464 2,376 -38.4% 1,540
    Goodwill 121,673 121,673 0.0% 121,673
    Other Assets 152,772 165,474 -7.7% 160,312
           
  Total Assets $5,616,055 $5,529,463 1.6% $5,523,448
           
  Liabilities and Shareholders' Equity:        
    Deposits:        
    Noninterest-Bearing $2,265,640 $2,211,028 2.5% $2,163,841
    Interest-Bearing Transaction 910,566 909,954 0.1% 942,140
    Savings 1,445,210 1,510,015 -4.3% 1,442,552
    Time 175,207 204,840 -14.5% 181,729
    Total Deposits 4,796,623 4,835,837 -0.8% 4,730,262
           
    Short-Term Borrowed Funds 45,646 61,756 -26.1% 54,581
    Other Liabilities 60,408 39,279 53.8% 45,168
  Total Liabilities 4,902,677 4,936,872 -0.7% 4,830,011
           
  Shareholders' Equity:        
    Common Equity:        
    Paid-In Capital 463,424 449,180 3.2% 460,140
    Accumulated Other        
    Comprehensive Income (Loss) 20,454 (54,066) n/m 13,124
    Retained Earnings 229,500 197,477 16.2% 220,173
  Total Shareholders' Equity 713,378 592,591 20.4% 693,437
           
  Total Liabilities and        
    Shareholders' Equity $5,616,055 $5,529,463 1.6% $5,523,448
           
12. Income Statements.        
    (unaudited, in thousands except per-share amounts)
        %  
    Q3'2019 Q3'2018 Change Q2'2019
  Interest & Fee Income:        
    Loans $14,431 $14,593 -1.1% $14,822
    Investment Securities:        
    Equity Securities 92 85 9.0% 99
    Debt Securities Available for Sale 18,736 15,644 19.8% 17,823
    Debt Securities Held to Maturity 4,535 5,931 -23.5% 4,924
    Interest-Bearing Cash 1,901 2,361 -19.5% 1,958
  Total Interest & Fee Income 39,695 38,614 2.8% 39,626
           
  Interest Expense:        
    Transaction Deposits 92 129 -28.5% 119
    Savings Deposits 210 229 -8.4% 212
    Time Deposits 145 160 -9.3% 147
    Short-Term Borrowed Funds 8 9 -13.7% 9
  Total Interest Expense 455 527 -13.7% 487
           
  Net Interest Income 39,240 38,087 3.0% 39,139
           
  Provision for Loan Losses - - n/m -


  Noninterest Income:        
    Service Charges 4,510 4,615   -2.3% 4,493
    Merchant Processing Services 2,494 2,464   1.2% 2,657
    Debit Card Fees 1,641 1,656   -0.9% 1,641
    Other Service Fees 580 665   -12.8% 585
    ATM Processing Fees 725 687   5.6% 722
    Trust Fees 733 733   0.1% 749
    Life Insurance Gains   -   585   -100.0%   433
    Financial Services Commissions 75 132   -43.2% 93
    Equity Securities (Losses) Gains    -   (16 ) n/m   26
    Other 1,051 1,007   4.4% 889
  Total Noninterest Income 11,809 12,528   -5.7% 12,288
           
  Noninterest Expense:        
    Salaries and  Benefits 12,559 13,415   -6.4% 13,090
    Occupancy and Equipment 5,199 4,809   8.1% 4,916
    Loss Contingency (1)   -   3,500   n/m   553
    Outsourced Data Processing 2,374 2,292   3.6% 2,367
    Amortization of Identifiable Intangibles 76 451   -83.1% 79
    Professional Fees 645 621   3.9% 481
    Courier Service 456 448   1.8% 451
    Other 2,724 3,830   -28.9% 3,624
  Total Noninterest Expense 24,033 29,366   -18.2% 25,561
           
  Income Before Income Taxes 27,016 21,249   27.1% 25,866
  Income Tax Provision 6,626 4,256   55.7% 6,241
  Net Income $ 20,390 $ 16,993   20.0% $ 19,625
           
  Average Common Shares Outstanding 26,986 26,701   1.1% 26,942
  Diluted Common Shares Outstanding 27,027 26,815   0.8% 26,987
           
  Per Common Share Data:        
    Basic Earnings $ 0.76 $ 0.64   18.8% $ 0.73
    Diluted Earnings 0.75 0.63   19.0% 0.73
    Dividends Paid 0.41 0.40   2.5% 0.41
        %  
    9/30'19YTD 9/30'18YTD Change  
  Interest & Fee Income:        
    Loans $ 44,050 $ 44,247   -0.4%  
    Investment Securities:        
    Equity Securities 289 256   13.2%  
    Debt Securities Available for Sale 54,080 43,518   24.3%  
    Debt Securities Held to Maturity 14,788 18,321   -19.3%  
    Interest-Bearing Cash 5,597 5,933   -5.7%  
  Total Interest & Fee Income 118,804 112,275   5.8%  
           
  Interest Expense:        
    Transaction Deposits 333 249   33.7%  
    Savings Deposits 637 675   -5.6%  
    Time Deposits 440 493   -10.7%  
    Short-Term Borrowed Funds 27 28   -2.4%  
  Total Interest Expense 1,437 1,445   -0.5%  
           
  Net Interest Income 117,367 110,830   5.9%  
           
  Provision for Loan Losses   -    -   n/m  
           
  Noninterest Income:        
    Service Charges 13,508 14,012   -3.6%  
    Merchant Processing Services 7,708 7,190   7.2%  
    Debit Card Fees 4,789 4,959   -3.4%  
    Other Service Fees 1,742 1,946   -10.5%  
    ATM Processing Fees 2,080 2,049   1.5%  
    Trust Fees 2,199 2,202   -0.1%  
    Life Insurance Gains 433   585   -26.0%  
    Financial Services Commissions 270 387   -30.4%  
    Equity Securities Gains (Losses) 50    (66 ) n/m  
    Other 2,897 2,988   -3.0%  
  Total Noninterest Income 35,676 36,252   -1.6%  
           
  Noninterest Expense:        
    Salaries and  Benefits 38,757 39,952   -3.0%  
    Occupancy and Equipment 15,163 14,365   5.6%  
    Outsourced Data Processing 7,110 6,930   2.6%  
    Loss Contingency (1) 553   3,500   n/m  
    Amortization of Identifiable Intangibles 465 1,474   -68.4%  
    Professional Fees 1,791 2,277   -21.3%  
    Courier Service 1,349 1,333   1.2%  
    Other 9,589 11,298   -15.1%  
  Total Noninterest Expense 74,777 81,129   -7.8%  
           
  Income Before Income Taxes 78,266 65,953   18.7%  
  Income Tax Provision 18,605 13,444   38.4%  
  Net Income $ 59,661 $ 52,509   13.6%  
           
  Average Common Shares Outstanding 26,924 26,622   1.1%  
  Diluted Common Shares Outstanding 26,976 26,736   0.9%  
           
  Per Common Share Data:        
  Basic Earnings $ 2.22 $ 1.97   12.7%  
  Diluted Earnings 2.21 1.96   12.8%  
  Dividends Paid 1.22 1.20   1.7%  
           
           
  Footnotes and Abbreviations:        
  (1) In the second quarter 2019 and third quarter 2018, the Company recorded $553 thousand and $3.5 million in loss contingencies, respecitvely.  The loss contingencies recorded in the second quarter 2019 include a $301 thousand increase in estimated customer refunds of revenue recognized prior to 2018 and a $252 thousand loss settlement to dismiss a lawsuit.  The loss contingency recorded in the third quarter 2018 was the result of a mediated settlement to dismiss a lawsuit.  The Company does not anticipate additional losses for these matters.
     
  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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