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CST: 15/10/2019 00:11:54   

Westamerica Bancorporation Reports Second Quarter 2019 Financial Results

88 Days ago

SAN RAFAEL, Calif., July 18, 2019 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the second quarter 2019 of $19.6 million and diluted earnings per common share ("EPS") of $0.73. These results compare to net income of $19.6 million and EPS of $0.73 for the first quarter 2019 and net income of $18.0 million and EPS of $0.67 for the second quarter 2018.

"Net interest margin remained stable and operating costs continued to be well controlled during the second quarter 2019.  Net interest margin was 3.13 percent for the second quarter 2019 compared to 3.12 percent for the first quarter 2019.  Operating expenses represented 49 percent of revenues, on a fully-taxable equivalent basis, for both the first and second quarters of 2019.  Asset quality improved with nonperforming assets totaling only $4.1 million at June 30, 2019 compared to $4.4 million at March 31, 2019, and $6.0 million at June 30, 2018,” said Chairman, President and CEO David Payne. “Second quarter 2019 results generated an annualized 11.7 percent return on average common equity, and the Board of Directors approved an increase in the quarterly cash dividend to $0.41 per share in April 2019,” concluded Payne.

Net interest income on a fully-taxable equivalent (FTE) basis was $40.3 million for the second quarter 2019, compared to $40.2 million for the first quarter 2019 and $38.3 million for the second quarter 2018. The annualized net interest margin (FTE) was 3.13 percent for the second quarter 2019, compared to 3.12 percent for the first quarter 2019 and 2.97 percent for the second quarter 2018. Checking and savings deposits, which are less sensitive to changes in interest rates than time deposits, represented ninety-six percent of the Company’s average deposit base during the second quarter 2019.

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

Noninterest income for the second quarter 2019 totaled $12.3 million, compared to $11.6 million for the first quarter 2019, and $11.8 million for the second quarter 2018.  Second quarter 2019 noninterest income included a life insurance gain of $433 thousand.   

Noninterest expense for the second quarter 2019 totaled $25.6 million, compared to $25.2 million for the first quarter 2019 and $25.7 million for the second quarter 2018.  Noninterest expense for the second quarter 2019 was $378 thousand higher than noninterest expense for the first quarter 2019, primarily due to $553 thousand in loss contingencies.  The loss contingencies include a $301 thousand increase in estimated customer refunds of revenue recognized prior to 2018 and a $252 thousand settlement to dismiss a lawsuit.  Although loss contingencies represent estimated liabilities, which are subject to revision, the Company does not anticipate additional losses for either of these matters.      

The tax rate for the second quarter 2019 was 27.5 percent on a FTE basis and 24.1 percent on a non-FTE basis.  In the second quarter 2019, the Company established a $269 thousand valuation allowance against certain deferred tax assets, which, combined with the tax-exempt nature of the life insurance gains and excess tax benefits of $83 thousand from stock options, increased the tax rate on an FTE and non-FTE basis by 0.3 percent.  

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 March 31, 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 July 18, 2019  
WESTAMERICA BANCORPORATION      
FINANCIAL HIGHLIGHTS        
June 30, 2019        
           
1. Net Income Summary.        
    (in thousands except per-share amounts)
        %  
    Q2'2019 Q2'2018 Change Q1'2019
           
  Net Interest and Fee Income (FTE) $ 40,330 $ 38,349 5.2% $ 40,247
  Provision for Loan Losses     -     - n/m     -
  Noninterest Income   12,288   11,769 4.4%   11,579
  Noninterest Expense   25,561   25,741 -0.7%   25,183
  Income Before Taxes (FTE)   27,057   24,377 11.0%   26,643
  Income Tax Provision (FTE)   7,432   6,367 16.7%   6,997
  Net Income $ 19,625 $ 18,010 9.0% $ 19,646
           
  Average Common Shares Outstanding   26,942   26,630 1.2%   26,841
  Diluted Average Common Shares   26,987   26,728 1.0%   26,912
           
  Operating Ratios:        
  Basic Earnings Per Common Share $ 0.73 $ 0.68 7.1% $ 0.73
  Diluted Earnings Per Common Share $ 0.73   0.67 8.5%   0.73
  Return On Assets (a)   1.42 %   1.29 %     1.42 %
  Return On Common Equity (a)   11.7 %   11.6 %     12.2 %
  Net Interest Margin (FTE) (a)   3.13 %   2.97 %     3.12 %
  Efficiency Ratio (FTE)   48.6 %   51.4 %     48.6 %
           
  Dividends Paid Per Common Share $ 0.41 $ 0.40 2.5% $ 0.40
  Common Dividend Payout Ratio       56 %   60 %     55 %
           
        %  
    6/30'19YTD 6/30'18YTD Change  
           
  Net Interest and Fee Income (FTE) $ 80,577 $ 75,624 6.5%  
  Provision for Loan Losses     -     - n/m  
  Noninterest Income   23,867   23,724 0.6%  
  Noninterest Expense   50,744   51,763 -2.0%  
  Income Before Taxes (FTE)   53,700   47,585 12.9%  
  Income Tax Provision (FTE)   14,429   12,069 19.6%  
  Net Income $ 39,271 $ 35,516 10.6%  
           
  Average Common Shares Outstanding   26,892   26,581 1.2%  
  Diluted Average Common Shares   26,950   26,696 1.0%  
           
  Operating Ratios:        
  Basic Earnings Per Common Share $ 1.46 $ 1.34 9.0%  
  Diluted Earnings Per Common Share   1.46   1.33 9.8%  
  Return On Assets (a)   1.42 %   1.28 %    
  Return On Common Equity (a)   12.0 %   11.6 %    
  Net Interest Margin (FTE) (a)   3.12 %   2.93 %    
  Efficiency Ratio (FTE)   48.6 %   52.1 %    
           
  Dividends Paid Per Common Share $ 0.81 $ 0.80 1.3%  
  Common Dividend Payout Ratio       55 %   60 %    
           
2. Net Interest Income.        
    (dollars in thousands)
        %  
    Q2'2019 Q2'2018 Change Q1'2019
           
  Interest and Fee Income (FTE) $ 40,817 $ 38,808 5.2% $ 40,741
  Interest Expense   487   459 6.1%   494
  Net Interest and Fee Income (FTE) $ 40,330 $ 38,349 5.2% $ 40,247
           
  Average Earning Assets $ 5,159,112 $ 5,180,524 -0.4% $ 5,184,978
  Average Interest-        
  Bearing Liabilities   2,646,681   2,729,671 -3.0%   2,689,684
           
  Yield on Earning Assets (FTE) (a)   3.17 %   3.01 %     3.16 %
  Cost of Funds (a)   0.04 %   0.04 %     0.04 %
  Net Interest Margin (FTE) (a)   3.13 %   2.97 %     3.12 %
  Interest Expense/        
  Interest-Bearing Liabilities (a)   0.08 %   0.07 %     0.08 %
  Net Interest Spread (FTE) (a)   3.09 %   2.94 %     3.08 %
           
        %  
    6/30'19YTD 6/30'18YTD Change  
           
  Interest and Fee Income (FTE) $ 81,558 $ 76,542 6.6%  
  Interest Expense   981   918 6.9%  
  Net Interest and Fee Income (FTE) $ 80,577 $ 75,624 6.5%  
           
  Average Earning Assets $ 5,171,973 $ 5,171,312 0.0%  
  Average Interest-        
  Bearing Liabilities   2,668,063   2,731,936 -2.3%  
           
  Yield on Earning Assets (FTE) (a)   3.16 %   2.97 %    
  Cost of Funds (a)   0.04 %   0.04 %    
  Net Interest Margin (FTE) (a)   3.12 %   2.93 %    
  Interest Expense/        
  Interest-Bearing Liabilities (a)   0.08 %   0.07 %    
  Net Interest Spread (FTE) (a)   3.08 %   2.90 %    
           
3. Loans & Other Earning Assets.        
    (average volume, dollars in thousands)
        %  
    Q2'2019 Q2'2018 Change Q1'2019
           
  Total Assets $ 5,560,740 $ 5,587,871 -0.5% $ 5,611,762
  Total Earning Assets   5,159,112   5,180,524 -0.4%   5,184,978
  Total Loans   1,183,539   1,209,049 -2.1%   1,205,656
  Commercial Loans   262,804   295,971 -11.2%   281,465
  Commercial RE Loans     582,126   550,427 5.8%   580,178
  Consumer Loans   338,609   362,651 -6.6%   344,013
  Total Investment Securities   3,648,436   3,543,838 3.0%   3,689,852
  Equity Securities   1,772   1,763 0.5%   1,748
  Debt Securities Available For Sale   2,750,093   2,444,582 12.5%   2,734,658
  Debt Securities Held To Maturity   896,571   1,097,493 -18.3%   953,446
  Total Interest-Bearing Cash   327,137   427,637 -23.5%   289,470
           
  Loans/Deposits   24.9 %   24.9 %     24.9 %
           
        %  
    6/30'19YTD 6/30'18YTD Change  
           
  Total Assets $ 5,586,110 $ 5,576,352 0.2%  
  Total Earning Assets   5,171,973   5,171,312 0.0%  
  Total Loans   1,194,536   1,226,304 -2.6%  
  Commercial Loans   272,083   306,102 -11.1%  
  Commercial RE Loans     581,157   553,215 5.1%  
  Consumer Loans   341,296   366,987 -7.0%  
  Total Investment Securities   3,669,029   3,511,828 4.5%  
  Equity Securities   1,760   1,877 -6.3%  
  Debt Securities Available For Sale   2,742,418   2,393,283 14.6%  
  Debt Securities Held To Maturity   924,851   1,116,668 -17.2%  
  Total Interest-Bearing Cash   308,408   433,180 -28.8%  
           
  Loans/Deposits   24.9 %   25.3 %    
           
4. Deposits, Other Interest-Bearing Liabilities & Equity.    
    (average volume, dollars in thousands)
        %  
    Q2'2019 Q2'2018 Change Q1'2019
           
  Total Deposits $ 4,762,286 $ 4,846,986 -1.7% $ 4,834,690
  Noninterest Demand     2,172,207   2,177,708 -0.3%   2,204,232
  Interest-Bearing Transaction   945,128   924,542 2.2%   946,458
  Savings   1,459,287   1,523,024 -4.2%   1,492,100
  Time greater than $100K   80,120   99,955 -19.8%   82,796
  Time less than $100K   105,544   121,757 -13.3%   109,104
  Total Short-Term Borrowings   56,602   60,393 -6.3%   59,226
  Shareholders' Equity   669,947   625,409 7.1%   655,380
           
  Demand Deposits/        
  Total Deposits   45.6 %   44.9 %     45.6 %
  Transaction & Savings          
  Deposits / Total Deposits   96.1 %   95.4 %     96.0 %
           
        %  
    6/30'19YTD 6/30'18YTD Change  
           
  Total Deposits $ 4,798,288 $ 4,837,721 -0.8%  
  Noninterest Demand     2,188,131   2,167,226 1.0%  
  Interest-Bearing Transaction   945,789   925,034 2.2%  
  Savings   1,475,603   1,520,540 -3.0%  
  Time greater than $100K   81,451   101,541 -19.8%  
  Time less than $100K   107,314   123,380 -13.0%  
  Total Short-Term Borrowings   57,906   61,441 -5.8%  
  Shareholders' Equity   662,704   619,666 6.9%  
           
  Demand Deposits/        
  Total Deposits   45.6 %   44.8 %    
  Transaction & Savings          
  Deposits / Total Deposits   96.1 %   95.4 %    
           
5. Interest Yields Earned & Rates Paid.      
    (dollars in thousands)  
    Q2'2019  
    Average Income/ Yield (a) /  
    Volume Expense Rate  
           
  Interest & Fee Income Earned        
  Total Earning Assets (FTE) $ 5,159,112 $ 40,817 3.17 %  
  Total Loans (FTE)     1,183,539   14,929 5.06 %  
  Commercial Loans (FTE)   262,804   3,561 5.43 %  
  Commercial RE Loans     582,126   7,709 5.31 %  
  Consumer Loans   338,609   3,659 4.33 %  
  Total Investments (FTE)   3,648,436   23,930 2.62 %  
  Total Interest-Bearing Cash   327,137   1,958 2.37 %  
           
  Interest Expense Paid        
  Total Earning Assets     5,159,112   487 0.04 %  
  Total Interest-Bearing Liabilities   2,646,681   487 0.08 %  
  Total Interest-Bearing Deposits   2,590,079   478 0.07 %  
  Interest-Bearing Transaction   945,128   119 0.05 %  
  Savings   1,459,287   212 0.06 %  
  Time less than $100K   105,544   65 0.25 %  
  Time greater than $100K   80,120   82 0.41 %  
  Total Short-Term Borrowings     56,602   9 0.06 %  
           
  Net Interest Income and          
  Margin (FTE)   $ 40,330 3.13 %  
           
    Q2'2018  
    Average Income/ Yield (a) /  
    Volume Expense Rate  
           
  Interest & Fee Income Earned        
  Total Earning Assets (FTE) $ 5,180,524 $ 38,808 3.01 %  
  Total Loans (FTE)   1,209,049   15,081 5.00 %  
  Commercial Loans (FTE)   295,971   3,804 5.16 %  
  Commercial RE Loans     550,427   7,804 5.69 %  
  Consumer Loans   362,651   3,473 3.84 %  
  Total Investments (FTE)   3,543,838   21,963 2.48 %  
  Total Interest-Bearing Cash   427,637   1,764 1.77 %  
           
  Interest Expense Paid        
  Total Earning Assets     5,180,524   459 0.04 %  
  Total Interest-Bearing Liabilities   2,729,671   459 0.07 %  
  Total Interest-Bearing Deposits   2,669,278   449 0.07 %  
  Interest-Bearing Transaction   924,542   60 0.03 %  
  Savings   1,523,024   224 0.06 %  
  Time less than $100K   121,757   70 0.23 %  
  Time greater than $100K   99,955   95 0.38 %  
  Total Short-Term Borrowings     60,393   10 0.06 %  
           
  Net Interest Income and        
  Margin (FTE)   $ 38,349 2.97 %  
           
6. Noninterest Income.        
    (dollars in thousands except per-share amounts)
        %  
    Q2'2019 Q2'2018 Change Q1'2019
           
  Service Charges on Deposits $ 4,493 $ 4,645 -3.3% $ 4,504
  Merchant Processing Services   2,657   2,305 15.2%   2,558
  Debit Card Fees   1,641   1,698 -3.4%   1,507
  Other Service Fees   585   650 -10.0%   577
  ATM Processing Fees   722   698 3.4%   633
  Trust Fees   749   726 3.2%   717
  Life Insurance Gains     433     - n/m     -
  Financial Services Commissions   93   141 -34.1%   101
  Equity Securities Gains (Losses)   26     (14) n/m     24
  Other Income   889   920 -3.4%   958
  Total Noninterest Income $ 12,288 $ 11,769 4.4% $ 11,579
           
  Total Revenue (FTE) $ 52,618 $ 50,118 5.0% $ 51,826
  Noninterest Income/Revenue (FTE)   23.4 %   23.5 %     22.3 %
  Service Charges/Avg. Deposits (a)   0.38 %   0.38 %     0.38 %
  Total Revenues (FTE) Per Avg.          
  Common Share (a) $ 7.83 $ 7.55 3.8% $ 7.83
           
        %  
    6/30'19YTD 6/30'18YTD Change  
           
  Service Charges on Deposits $ 8,997 $ 9,397 -4.3%  
  Merchant Processing Services   5,215   4,725 10.4%  
  Debit Card Fees   3,148   3,303 -4.7%  
  Other Service Fees   1,162   1,281 -9.3%  
  ATM Processing Fees   1,355   1,362 -0.5%  
  Trust Fees   1,466   1,469 -0.1%  
  Life Insurance Gains   433     - n/m  
  Financial Services Commissions   194   255 -23.7%  
  Equity Securities Gains (Losses)   50     (50) n/m  
  Other Income   1,847   1,982 -6.8%  
  Total Noninterest Income $ 23,867 $ 23,724 0.6%  
           
  Total Revenue (FTE) $ 104,444 $ 99,348 5.1%  
  Noninterest Income/Revenue (FTE)   22.9 %   23.9 %    
  Service Charges/Avg. Deposits (a)   0.38 %   0.39 %    
  Total Revenues (FTE) Per Avg.          
  Common Share (a) $ 7.83 $ 7.54 3.9%  
           
7. Noninterest Expense.        
    (dollars in thousands)
        %  
    Q2'2019 Q2'2018 Change Q1'2019
           
  Salaries & Benefits $ 13,090 $ 13,186 -0.7% $ 13,108
  Occupancy and Equipment   4,916   4,864 1.1%   5,048
  Loss Contingency (1)     553     - n/m     -
  Outsourced Data Processing   2,367   2,299 3.0%   2,369
  Amortization of          
  Identifiable Intangibles   79   453 -82.5%   310
  Professional Fees   481   871 -44.8%   665
  Courier Service   451   422 6.9%   442
  Other Operating   3,624   3,646 -0.6%   3,241
  Total Noninterest Expense $ 25,561 $ 25,741 -0.7% $ 25,183
           
  Noninterest Expense/        
  Avg. Earning Assets (a)   1.99 %   1.99 %     1.97 %
  Noninterest Expense/Revenues (FTE)   48.6 %   51.4 %     48.6 %
           
        %  
    6/30'19YTD 6/30'18YTD Change  
           
  Salaries & Benefits $ 26,198 $ 26,537 -1.3%  
  Occupancy and Equipment   9,964   9,555 4.3%  
  Outsourced Data Processing   4,736   4,639 2.1%  
  Loss Contingency (1)   553     - n/m  
  Amortization of          
  Identifiable Intangibles   389   1,023 -62.0%  
  Professional Fees   1,146   1,656 -30.8%  
  Courier Service   893   885 0.9%  
  Other Operating   6,865   7,468 -8.1%  
  Total Noninterest Expense $ 50,744 $ 51,763 -2.0%  
           
  Noninterest Expense/        
  Avg. Earning Assets (a)   1.98 %   2.02 %    
  Noninterest Expense/Revenues (FTE)   48.6 %   52.1 %    
           
8. Allowance for Loan Losses.        
    (dollars in thousands)
        %  
    Q2'2019 Q2'2018 Change Q1'2019
           
  Average Total Loans $ 1,183,539 $ 1,209,049 -2.1% $ 1,205,656
           
  Allowance for Loan Loss (ALL)        
  Beginning of Period   $ 20,477 $ 23,081 -11.3% $ 21,351
  Provision for Loan Losses         -     - n/m     -
  Net ALL Losses   (360)   (41) n/m   (874)
  ALL End of Period $ 20,117 $ 23,040 -12.7% $ 20,477
  Gross ALL Recoveries / Gross ALL Losses       63 %   95 %     37 %
           
  Net ALL Losses / Avg. Total Loans (a)   0.12 %   0.01 %     0.29 %
        %  
    6/30'19YTD 6/30'18YTD Change  
           
  Average Total Loans $ 1,194,536 $ 1,226,304 -2.6%  
           
  Allowance for Loan Loss (ALL)        
  Beginning of Period   $ 21,351 $ 23,009 -7.2%  
  Provision for Loan Losses         -     - n/m  
  Net ALL (Losses) Recoveries   (1,234)   31 n/m  
  ALL End of Period $ 20,117 $ 23,040 -12.7%  
  Gross ALL Recoveries / Gross ALL Losses       48 %   101 %    
           
  Net ALL Losses (Recoveries) /          
  Avg. Total Loans (a)     0.21 %   -0.01 %    
           
9. Credit Quality.        
    (dollars in thousands)
        %  
    6/30/19 6/30/18 Change 3/31/19
           
  Nonperforming Loans:        
  Nonperforming Nonaccrual $ 177 $ 783 -77.4% $ 330
  Performing Nonaccrual     3,670     4,110 -10.7%     3,670
  Total Nonaccrual Loans   3,847   4,893 -21.4%   4,000
  90+ Days Past Due Accruing Loans   249   193 29.0%   394
  Total   4,096   5,086 -19.5%   4,394
  Repossessed Loan Collateral     43   939 -95.4%   43
  Total Nonperforming Assets $ 4,139 $ 6,025 -31.3% $ 4,437
           
  Total Loans Outstanding   $ 1,161,712 $ 1,200,192 -3.2% $ 1,204,844
           
  Total Assets   $ 5,523,448 $ 5,577,844 -1.0% $ 5,555,961
           
  Loans:        
  Allowance for Loan Losses $ 20,117 $ 23,040 -12.7% $ 20,477
  Allowance/Loans   1.73 %   1.92 %     1.70 %
  Nonperforming Loans/Total Loans   0.35 %   0.42 %     0.36 %
           
10. Capital.        
    (in thousands, except per-share amounts)
        %  
    6/30/19 6/30/18 Change 3/31/19
           
  Shareholders' Equity $ 693,437 $ 586,138 18.3% $ 656,767
  Total Assets   5,523,448   5,577,844 -1.0%   5,555,961
           
  Shareholders' Equity/        
  Total Assets   12.55 %   10.51 %     11.82 %
  Shareholders' Equity/        
  Total Loans   59.69 %   48.84 %     54.51 %
  Tangible Common Equity Ratio   10.56 %   8.47 %     9.82 %
  Common Shares Outstanding   26,962   26,649 1.2%   26,901
  Common Equity Per Share $ 25.72 $ 21.99 16.9% $ 24.41
  Market Value Per Common Share $ 61.61 $ 56.51 9.0% $ 61.80
           
  Share Repurchase Programs        
    (shares in thousands)
        %  
    Q2'2019 Q2'2018 Change Q1'2019
           
  Total Shares Repurchased     8     9 n/m     -
  Average Repurchase Price $ 61.98 $ 58.46 n/m $ -
  Net Shares Issued     (61)   (58) n/m   (171)
           
        %  
    6/30'19YTD 6/30'18YTD Change  
           
  Total Shares Repurchased     8     9 n/m  
  Average Repurchase Price $ 61.98 $ 58.46 n/m  
  Net Shares Issued   (232)   (224) n/m  
           
11. Period-End Balance Sheets.        
    (unaudited, dollars in thousands)
        %  
    6/30/19 6/30/18 Change 3/31/19
  Assets:        
  Cash and Due from Banks $ 418,586 $ 629,146 -33.5% $ 421,788
           
  Investment Securities:        
  Equity Securities   1,797   1,750 2.7%   1,771
  Debt Securities Available For Sale   2,775,899   2,363,194 17.5%   2,702,240
  Debt Securities Held to Maturity   867,989   1,076,456 -19.4%   923,190
           
  Loans   1,161,712   1,200,192 -3.2%   1,204,844
  Allowance For Loan Losses   (20,117)   (23,040) -12.7%   (20,477)
  Total Loans, net   1,141,595   1,177,152 -3.0%   1,184,367
           
  Other Real Estate Owned   43   939 -95.4%   43
  Premises and Equipment, net   34,014   35,774 -4.9%   33,934
  Identifiable Intangibles, net   1,540   2,827 -45.5%   1,619
  Goodwill     121,673   121,673 0.0%   121,673
  Other Assets   160,312   168,933 -5.1%   165,336
           
  Total Assets $ 5,523,448 $ 5,577,844 -1.0% $ 5,555,961
           
  Liabilities and Shareholders' Equity:        
  Deposits:        
  Noninterest-Bearing $ 2,163,841 $ 2,205,971 -1.9% $ 2,179,803
  Interest-Bearing Transaction   942,140   939,002 0.3%   941,379
  Savings   1,442,552   1,526,228 -5.5%   1,482,187
  Time   181,729   215,921 -15.8%   189,215
  Total Deposits   4,730,262   4,887,122 -3.2%   4,792,584
           
  Short-Term Borrowed Funds   54,581   68,894 -20.8%   58,317
  Other Liabilities   45,168   35,690 26.6%   48,293
  Total Liabilities   4,830,011   4,991,705 -3.2%   4,899,194
           
  Shareholders' Equity:        
  Common Equity:        
  Paid-In Capital   460,140   444,871 3.4%   456,075
  Accumulated Other        
  Comprehensive Income (Loss)   13,124   (49,900) n/m   (11,249)
  Retained Earnings   220,173   191,167 15.2%   211,941
  Total Shareholders' Equity   693,437   586,138 18.3%   656,767
           
  Total Liabilities and          
  Shareholders' Equity $ 5,523,448 $ 5,577,844 -1.0% $ 5,555,961
           
12. Income Statements.        
    (unaudited, in thousands except per-share amounts)
        %  
    Q2'2019 Q2'2018 Change Q1'2019
  Interest & Fee Income:        
  Loans $ 14,822 $ 14,957 -0.9% $ 14,797
  Investment Securities:        
  Equity Securities   99   86 15.3%   98
  Debt Securities Available for Sale   17,823   14,323 24.4%   17,521
  Debt Securities Held to Maturity   4,924   6,216 -20.8%   5,329
  Interest-Bearing Cash   1,958   1,764 11.0%   1,738
  Total Interest & Fee Income   39,626   37,346 6.1%   39,483
           
  Interest Expense:        
  Transaction Deposits   119   60 97.6%   121
  Savings Deposits   212   224 -5.5%   216
  Time Deposits   147   165 -10.7%   148
  Short-Term Borrowed Funds   9   10 -3.8%   9
  Total Interest Expense   487   459 6.3%   494
           
  Net Interest Income   39,139   36,887 6.1%   38,989
           
  Provision for Loan Losses     -     - n/m     -
           
  Noninterest Income:        
  Service Charges     4,493   4,645 -3.3%   4,504
  Merchant Processing Services   2,657   2,305 15.2%   2,558
  Debit Card Fees   1,641   1,698 -3.4%   1,507
  Other Service Fees   585   650 -10.0%   577
  ATM Processing Fees   722   698 3.4%   633
  Trust Fees   749   726 3.2%   717
  Life Insurance Gains     433     - n/m     -
  Financial Services Commissions   93   141 -34.1%   101
  Equity Securities Gains (Losses)   26     (14) n/m     24
  Other   889   920 -3.4%   958
  Total Noninterest Income   12,288   11,769 4.4%   11,579
           
  Noninterest Expense:        
  Salaries and   Benefits   13,090   13,186 -0.7%   13,108
  Occupancy and Equipment   4,916   4,864 1.1%   5,048
  Loss Contingency (1)     553     - n/m     -
  Outsourced Data Processing   2,367   2,299 3.0%   2,369
  Amortization of Identifiable Intangibles   79   453 -82.5%   310
  Professional Fees   481   871 -44.8%   665
  Courier Service   451   422 6.9%   442
  Other   3,624   3,646 -0.6%   3,241
  Total Noninterest Expense   25,561   25,741 -0.7%   25,183
           
  Income Before Income Taxes   25,866   22,915 12.9%   25,385
  Income Tax Provision   6,241   4,905 27.2%   5,739
  Net Income $ 19,625 $ 18,010 9.0% $ 19,646
           
  Average Common Shares Outstanding   26,942   26,630 1.2%   26,841
  Diluted Common Shares Outstanding   26,987   26,728 1.0%   26,912
           
  Per Common Share Data:        
  Basic Earnings $ 0.73 $ 0.68 7.4% $ 0.73
  Diluted Earnings   0.73   0.67 9.0%   0.73
  Dividends Paid   0.41   0.40 2.5%   0.40
        %  
    6/30'19YTD 6/30'18YTD Change  
  Interest & Fee Income:        
  Loans $ 29,619 $ 29,654 -0.1%  
  Investment Securities:        
  Equity Securities   197   171 15.3%  
  Debt Securities Available for Sale   35,344   27,874 26.8%  
  Debt Securities Held to Maturity   10,253   12,390 -17.2%  
  Interest-Bearing Cash   3,696   3,572 3.5%  
  Total Interest & Fee Income   79,109   73,661 7.4%  
           
  Interest Expense:        
  Transaction Deposits   240   120 100.0%  
  Savings Deposits   428   446 -4.1%  
  Time Deposits   295   333 -11.3%  
  Short-Term Borrowed Funds   18   19 -1.8%  
  Total Interest Expense   981   918 6.9%  
           
  Net Interest Income   78,128   72,743 7.4%  
           
  Provision for Loan Losses     -     - n/m  
           
  Noninterest Income:        
  Service Charges     8,997   9,397 -4.3%  
  Merchant Processing Services   5,215   4,725 10.4%  
  Debit Card Fees   3,148   3,303 -4.7%  
  Other Service Fees   1,162   1,281 -9.3%  
  ATM Processing Fees   1,355   1,362 -0.5%  
  Trust Fees   1,466   1,469 -0.1%  
  Life Insurance Gains   433     - n/m  
  Financial Services Commissions   194   255 -23.7%  
  Equity Securities Gains (Losses)   50     (50) n/m  
  Other   1,847   1,982 -6.8%  
  Total Noninterest Income   23,867   23,724 0.6%  
           
  Noninterest Expense:        
  Salaries and   Benefits   26,198   26,537 -1.3%  
  Occupancy and Equipment   9,964   9,555 4.3%  
  Outsourced Data Processing   4,736   4,639 2.1%  
  Loss Contingency (1)   553     - n/m  
  Amortization of Identifiable Intangibles   389   1,023 -62.0%  
  Professional Fees   1,146   1,656 -30.8%  
  Courier Service   893   885 0.9%  
  Other   6,865   7,468 -8.1%  
  Total Noninterest Expense   50,744   51,763 -2.0%  
           
  Income Before Income Taxes   51,251   44,704 14.6%  
  Income Tax Provision   11,980   9,188 30.4%  
  Net Income   39,271   35,516 10.6%  
           
  Average Common Shares Outstanding   26,892   26,581 1.2%  
  Diluted Common Shares Outstanding   26,950   26,696 1.0%  
           
  Per Common Share Data:        
  Basic Earnings $ 1.46 $ 1.34 9.0%  
  Diluted Earnings   1.46   1.33 9.8%  
  Dividends Paid   0.81   0.80 1.3%  
           
           
  Footnotes and Abbreviations:        
   
  (1) In the second quarter 2019, the Company recorded $553 thousand in loss contingencies.   The loss contingencies 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.   Although loss contingencies represent estimated liabilities, which are subject to revision, the Company does not anticipate additional losses for either of 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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