Westamerica Bancorporation Reports Third Quarter 2016 Financial Results

SAN RAFAEL, Calif., Oct. 20, 2016 (GLOBE NEWSWIRE) — Westamerica Bancorporation (Nasdaq:WABC), parent company of Westamerica Bank, generated net income for the third quarter 2016 of $15.6 million and diluted earnings per common share (“EPS”) of $0.61, compared to net income of $14.5 million and EPS of $0.57 for the prior quarter, and net income of $14.9 million and EPS of $0.58 for the third quarter 2015.
           
“Nonperforming delinquent loans declined $7.1 million during the third quarter 2016; the resolution of these problem loans contributed to net recoveries of prior loan losses of $649 thousand during the quarter. Given the level of improvement in credit quality, Westamerica recorded a reversal of the provision for loan losses of $3.2 million for the third quarter 2016. Operating expenses increased approximately $900 thousand for the third quarter 2016 relative to the prior quarter due in part to higher legal fees related to loan administration and collection activities. Our net interest margin was 3.21 percent in the third quarter 2016, down 0.06 percent from the prior quarter due to persistently low market interest rates,” said Chairman, President and CEO David Payne. “Westamerica continued to generate relatively high returns within our industry, realizing an annualized return on shareholders’ common equity of 11.4 percent for the third quarter 2016. Westamerica paid its shareholders a $0.39 per share dividend in the third quarter,” concluded Payne.

The annualized net interest margin on a fully taxable equivalent basis was 3.21 percent for the third quarter 2016, compared to 3.27 percent for the prior quarter, and 3.31 percent for the third quarter 2015. Net interest income on a fully taxable equivalent basis was $36.2 million for the third quarter 2016, compared to $36.5 million for the prior quarter, and $37.2 million for the third quarter 2015. The Company’s loan portfolio has declined from the third quarter 2015 through the third quarter 2016; Management has avoided originating long-term, low-yielding loans given historically low interest rates. Management has also maintained conservative loan underwriting, terms and conditions. During this period, the investment portfolio has grown. The changing composition of interest earning assets and low market interest rates has pressured the net interest margin. The funding cost of deposits and other interest-bearing borrowings, as a percentage of average loans and investment securities, was 0.05 percent for the third quarter 2016, unchanged from the prior quarter and the third quarter 2015. Checking and savings deposits, which earn relatively low interest rates and are less volatile than time deposits during periods of rising market interest rates, represented 94 percent of average total deposits during the third quarter 2016.

During the third quarter 2016, Westamerica’s recoveries of loan losses exceeded gross loan losses by $649 thousand. In contrast, gross loan losses exceeded recoveries of loan losses by $577 thousand for the second quarter 2016 and by $792 thousand for the third quarter 2015. Westamerica recorded a reversal of the provision for loan losses of $3.2 million for the third quarter 2016 while the provision for loan losses was zero for both the second quarter 2016 and third quarter 2015. At September 30, 2016, the allowance for loan losses totaled $26.4 million.

Noninterest income for the third quarter 2016 totaled $11.6 million, compared to $11.7 million for the prior quarter and $12.0 million for the third quarter 2015.

Noninterest expense for the third quarter 2016 totaled $26.1 million, compared to $25.2 million for the prior quarter, and $26.2 million for the third quarter 2015. The approximate $900 thousand increase in noninterest expense from the second quarter 2016 to the third quarter 2016 is attributable to higher legal fees related to loan administration and collection efforts as well as increased occupancy costs and higher net OREO costs, offset in part by lower other expenses. The approximate $100 thousand reduction in noninterest expense from the third quarter 2015 to the third quarter 2016 is due to lower net OREO costs and other expenses, offset in part by higher legal fees and employee benefit costs.

 

At September 30, 2016, Westamerica Bancorporation’s tangible common equity-to-asset ratio was 8.4 percent, and assets totaled $5.3 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, 2015 filed on Form 10-K and quarterly report for the quarter ended June 30, 2016 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 October 20, 2016    
WESTAMERICA BANCORPORATION        
FINANCIAL HIGHLIGHTS          
September 30, 2016          
             
1. Net Income Summary.          
    (in thousands except per-share amounts)  
        %    
    Q3’16 Q3’15 Change Q2’16  
             
  Net Interest and Fee Income (FTE) $ 36,176   $ 37,179     -2.7 % $ 36,495    
  Reversal of Provision for Loan Losses     (3,200 )         n/m          
  Noninterest Income   11,598     11,993     -3.3 %   11,702    
  Noninterest Expense   26,088     26,173     -0.3 %   25,229    
  Income Before Taxes (FTE)   24,886     22,999     8.2 %   22,968    
  Income Tax Provision (FTE)   9,258     8,142     13.7 %   8,422    
  Net Income $ 15,628   $ 14,857     5.2 % $ 14,546    
             
  Average Common Shares Outstanding   25,641     25,530     0.4 %   25,586    
  Diluted Average Common Shares   25,687     25,565     0.5 %   25,630    
             
  Operating Ratios:          
  Basic Earnings Per Common Share $ 0.61   $ 0.58     5.2 % $ 0.57    
  Diluted Earnings Per Common Share   0.61     0.58     5.2 %   0.57    
  Return On Assets (a)   1.18 %   1.16 %     1.13 %  
  Return On Common Equity (a)   11.4 %   11.3 %     10.9 %  
  Net Interest Margin (FTE) (a)   3.21 %   3.31 %     3.27 %  
  Efficiency Ratio (FTE)   54.6 %   53.2 %     52.3 %  
             
  Dividends Paid Per Common Share $ 0.39   $ 0.38     2.6 % $ 0.39    
  Common Dividend Payout Ratio      64 %   66 %     68 %  
             
        %    
    9/30’16YTD 9/30’15YTD Change    
             
  Net Interest and Fee Income (FTE) $ 109,118   $ 111,524     -2.2 %    
  Reversal of Provision for Loan Losses     (3,200 )         n/m      
  Noninterest Income   35,029     36,562     -4.2 %    
  Noninterest Expense   77,175     79,796     -3.3 %    
  Income Before Taxes (FTE)   70,172     68,290     2.8 %    
  Income Tax Provision (FTE)   25,772     24,115     6.9 %    
  Net Income $ 44,400   $ 44,175     0.5 %    
             
  Average Common Shares Outstanding   25,558     25,565     0.0 %    
  Diluted Average Common Shares   25,595     25,585     0.0 %    
             
  Operating Ratios:          
  Basic Earnings Per Common Share $ 1.74   $ 1.73     0.6 %    
  Diluted Earnings Per Common Share   1.73     1.73     0.0 %    
  Return On Assets (a)   1.14 %   1.17 %      
  Return On Common Equity (a)   11.0 %   11.4 %      
  Net Interest Margin (FTE) (a)   3.27 %   3.37 %      
  Efficiency Ratio (FTE)   53.5 %   53.9 %      
             
  Dividends Paid Per Common Share $ 1.17   $ 1.14     2.6 %    
  Common Dividend Payout Ratio      68 %   66 %      
             
2. Net Interest Income.          
    (dollars in thousands)  
        %    
    Q3’16 Q3’15 Change Q2’16  
             
  Interest and Fee Income (FTE) $ 36,699   $ 37,764     -2.8 % $ 37,036    
  Interest Expense   523     585     -10.6 %   541    
  Net Interest and Fee Income (FTE) $ 36,176   $ 37,179     -2.7 % $ 36,495    
             
  Average Earning Assets $ 4,489,317   $ 4,471,690     0.4 % $ 4,473,700    
  Average Interest-          
  Bearing Liabilities   2,616,357     2,511,820     4.2 %   2,598,868    
             
  Yield on Earning Assets (FTE) (a)   3.26 %   3.36 %     3.32 %  
  Cost of Funds (a)   0.05 %   0.05 %     0.05 %  
  Net Interest Margin (FTE) (a)   3.21 %   3.31 %     3.27 %  
  Interest Expense/          
  Interest-Bearing Liabilities (a)   0.08 %   0.09 %     0.08 %  
  Net Interest Spread (FTE) (a)   3.18 %   3.27 %     3.24 %  
             
        %    
    9/30’16YTD 9/30’15YTD Change    
             
  Interest and Fee Income (FTE) $ 110,734   $ 113,385     -2.3 %    
  Interest Expense   1,616     1,861     -13.2 %    
  Net Interest and Fee Income (FTE) $ 109,118   $ 111,524     -2.2 %    
             
  Average Earning Assets $ 4,448,261   $ 4,417,114     0.7 %    
  Average Interest-          
  Bearing Liabilities   2,605,584     2,540,948     2.5 %    
             
  Yield on Earning Assets (FTE) (a)   3.32 %   3.43 %      
  Cost of Funds (a)   0.05 %   0.06 %      
  Net Interest Margin (FTE) (a)   3.27 %   3.37 %      
  Interest Expense/          
  Interest-Bearing Liabilities (a)   0.08 %   0.10 %      
  Net Interest Spread (FTE) (a)   3.24 %   3.33 %      
             
3. Loans & Other Earning Assets.          
    (average volume, dollars in thousands)  
        %    
    Q3’16 Q3’15 Change Q2’16  
             
  Total Assets $ 5,253,502   $ 5,062,334     3.8 % $ 5,184,409    
  Total Earning Assets   4,489,317     4,471,690     0.4 %   4,473,700    
  Total Loans   1,386,186     1,591,798     -12.9 %   1,455,050    
  Commercial Loans   343,727     377,687     -9.0 %   356,629    
  Commercial RE Loans    572,044     675,597     -15.3 %   611,996    
  Consumer Loans   470,415     538,514     -12.6 %   486,425    
  Total Investment Securities   3,103,131     2,879,892     7.8 %   3,018,650    
  Available For Sale (Market)   1,660,680     1,649,986     0.6 %   1,554,014    
  Held To Maturity   1,442,451     1,229,906     17.3 %   1,464,636    
  Unrealized Gain   29,100     15,144     n/m     33,820    
             
  Loans/Deposits   30.2 %   36.1 %     32.1 %  
             
        %    
    9/30’16YTD 9/30’15YTD Change    
             
  Total Assets $ 5,204,418   $ 5,055,421     2.9 %    
  Total Earning Assets   4,448,261     4,417,114     0.7 %    
  Total Loans   1,447,061     1,643,438     -11.9 %    
  Commercial Loans   356,781     394,829     -9.6 %    
  Commercial RE Loans    604,741     690,970     -12.5 %    
  Consumer Loans   485,539     557,639     -12.9 %    
  Total Investment Securities   3,001,200     2,773,676     8.2 %    
  Available For Sale (Market)   1,594,253     1,669,056     -4.5 %    
  Held To Maturity   1,406,947     1,104,620     27.4 %    
  Unrealized Gain   29,100     15,144     n/m      
             
  Loans/Deposits   31.8 %   37.3 %      
             
4. Deposits, Other Interest-Bearing Liabilities & Equity.      
    (average volume, dollars in thousands)  
        %    
    Q3’16 Q3’15 Change Q2’16  
             
  Total Deposits $ 4,588,762   $ 4,414,711     3.9 % $ 4,531,751    
  Noninterest Demand    2,041,045     1,975,498     3.3 %   1,994,803    
  Interest Bearing Transaction   850,215     817,479     4.0 %   855,732    
  Savings   1,427,247     1,304,128     9.4 %   1,404,322    
  Time greater than $100K   118,113     147,216     -19.8 %   119,475    
  Time less than $100K   152,142     170,390     -10.7 %   157,419    
  Total Short-Term Borrowings   68,640     72,607     -5.5 %   61,920    
  Shareholders’ Equity   545,771     520,261     4.9 %   537,987    
             
  Demand Deposits/          
  Total Deposits   44.5 %   44.7 %     44.0 %  
  Transaction & Savings           
  Deposits / Total Deposits   94.1 %   92.8 %     93.9 %  
             
        %    
    9/30’16YTD 9/30’15YTD Change    
             
  Total Deposits $ 4,552,819   $ 4,404,379     3.4 %    
  Noninterest Demand    2,010,058     1,946,018     3.3 %    
  Interest Bearing Transaction   859,437     810,980     6.0 %    
  Savings   1,406,338     1,298,851     8.3 %    
  Time greater than $100K   120,418     172,834     -30.3 %    
  Time less than $100K   156,568     175,696     -10.9 %    
  Total Short-Term Borrowings   62,823     81,926     -23.3 %    
  Federal Home Loan Bank Advances         661     n/m      
  Shareholders’ Equity   537,010     517,054     3.9 %    
             
  Demand Deposits/          
  Total Deposits   44.1 %   44.2 %      
  Transaction & Savings           
  Deposits / Total Deposits   93.9 %   92.1 %      
             
5. Interest Yields Earned & Rates Paid.        
    (dollars in thousands)    
    Q3’16    
    Average Income/ Yield (a) /    
    Volume Expense Rate    
             
  Interest & Fee Income Earned          
  Total Earning Assets (FTE) $ 4,489,317   $ 36,699     3.26 %    
  Total Loans (FTE)     1,386,186     17,260     4.95 %    
  Commercial Loans (FTE)   343,727     4,302     4.98 %    
  Commercial RE Loans    572,044     8,832     6.14 %    
  Consumer Loans   470,415     4,126     3.49 %    
  Total Investments (FTE)   3,103,131     19,439     2.51 %    
             
  Interest Expense Paid          
  Total Earning Assets    4,489,317     523     0.05 %    
  Total Interest-Bearing Liabilities   2,616,357     523     0.08 %    
  Total Interest-Bearing Deposits   2,547,717     512     0.08 %    
  Interest-Bearing Transaction   850,215     64     0.03 %    
  Savings   1,427,247     229     0.06 %    
  Time less than $100K   152,142     95     0.25 %    
  Time greater than $100K   118,113     124     0.42 %    
  Total Short-Term Borrowings    68,640     11     0.06 %    
             
  Net Interest Income and           
  Margin (FTE)   $ 36,176     3.21 %    
             
    Q3’15    
    Average Income/ Yield (a) /    
    Volume Expense Rate    
             
  Interest & Fee Income Earned          
  Total Earning Assets (FTE) $ 4,471,690   $ 37,764     3.36 %    
  Total Loans (FTE)   1,591,798     19,732     4.92 %    
  Commercial Loans (FTE)   377,687     4,470     4.70 %    
  Commercial RE Loans    675,597     10,127     5.95 %    
  Consumer Loans   538,514     5,135     3.79 %    
  Total Investments (FTE)   2,879,892     18,032     2.50 %    
             
  Interest Expense Paid          
  Total Earning Assets    4,471,690     585     0.05 %    
  Total Interest-Bearing Liabilities   2,511,820     585     0.09 %    
  Total Interest-Bearing Deposits   2,439,213     573     0.09 %    
  Interest-Bearing Transaction   817,479     65     0.03 %    
  Savings   1,304,128     211     0.06 %    
  Time less than $100K   170,390     133     0.31 %    
  Time greater than $100K   147,216     164     0.44 %    
  Total Short-Term Borrowings    72,607     12     0.07 %    
             
  Net Interest Income and          
  Margin (FTE)   $ 37,179     3.31 %    
             
6. Noninterest Income.          
    (dollars in thousands except per-share amounts)  
        %    
    Q3’16 Q3’15 Change Q2’16  
             
  Service Charges on Deposits $ 5,303   $ 5,581     -5.0 % $ 5,239    
  Merchant Processing Services   1,532     1,485     3.1 %   1,638    
  Debit Card Fees   1,587     1,538     3.2 %   1,621    
  Other Service Fees   671     693     -3.1 %   650    
  ATM Processing Fees   600     616     -2.6 %   603    
  Trust Fees   686     682     0.5 %   657    
  Financial Services Commissions   118     177     -33.4 %   137    
  Other Income   1,101     1,221     -9.9 %   1,157    
  Total Noninterest Income $ 11,598   $ 11,993     -3.3 % $ 11,702    
             
  Total Revenue (FTE) $ 47,774   $ 49,172     -2.8 % $ 48,197    
  Noninterest Income/Revenue (FTE)   24.3 %   24.4 %     24.3 %  
  Service Charges/Avg. Deposits (a)   0.46 %   0.50 %     0.46 %  
  Total Revenues (FTE) Per Avg.           
  Common Share (a) $ 7.41   $ 7.64     -3.0 % $ 7.58    
             
        %    
    9/30’16YTD 9/30’15YTD Change    
             
  Service Charges on Deposits $ 15,790   $ 16,981     -7.0 %    
  Merchant Processing Services   4,699     4,971     -5.5 %    
  Debit Card Fees   4,724     4,528     4.3 %    
  Other Service Fees   1,951     2,041     -4.4 %    
  ATM Processing Fees   1,860     1,828     1.8 %    
  Trust Fees   2,004     2,061     -2.8 %    
  Financial Services Commissions   411     527     -22.2 %    
  Other Income   3,590     3,625     -1.0 %    
  Total Noninterest Income $ 35,029   $ 36,562     -4.2 %    
             
  Total Revenue (FTE) $ 144,147   $ 148,086     -2.7 %    
  Noninterest Income/Revenue (FTE)   24.3 %   24.7 %      
  Service Charges/Avg. Deposits (a)   0.46 %   0.52 %      
  Total Revenues (FTE) Per Avg.           
  Common Share (a) $ 7.53   $ 7.74     -2.7 %    
             
7. Noninterest Expense.          
    (dollars in thousands)  
        %    
    Q3’16 Q3’15 Change Q2’16  
             
  Salaries & Benefits $ 13,063   $ 12,761     2.4 % $ 12,887    
  Occupancy   3,749     3,746     0.1 %   3,400    
  Outsourced Data Processing   2,114     2,115     0.0 %   2,130    
  Amortization of           
  Identifiable Intangibles   867     952     -9.0 %   870    
  Professional Fees   1,693     746     127.1 %   758    
  Furniture & Equipment   1,211     1,075     12.7 %   1,187    
  Other Real Estate Owned   (206 )   83     n/m     (392 )  
  Courier Service   451     604     -25.3 %   462    
  Other Operating   3,146     4,091     -23.1 %   3,927    
  Total Noninterest Expense $ 26,088   $ 26,173     -0.3 % $ 25,229    
             
  Noninterest Expense/          
  Avg. Earning Assets (a)   2.31 %   2.32 %     2.27 %  
  Noninterest Expense/Revenues (FTE)   54.6 %   53.2 %     52.3 %  
             
        %    
    9/30’16YTD 9/30’15YTD Change    
             
  Salaries & Benefits $ 39,067   $ 39,795     -1.8 %    
  Occupancy   10,546     11,199     -5.8 %    
  Outsourced Data Processing   6,375     6,334     0.6 %    
  Amortization of           
  Identifiable Intangibles   2,642     2,908     -9.2 %    
  Professional Fees   3,183     1,876     69.7 %    
  Furniture & Equipment   3,611     3,353     7.7 %    
  Other Real Estate Owned   (487 )   451     n/m      
  Courier Service   1,458     1,744     -16.4 %    
  Other Operating   10,780     12,136     -11.2 %    
  Total Noninterest Expense $ 77,175   $ 79,796     -3.3 %    
             
  Noninterest Expense/          
  Avg. Earning Assets (a)   2.32 %   2.42 %      
  Noninterest Expense/Revenues (FTE)   53.5 %   53.9 %      
             
8. Allowance for Loan Losses.          
    (dollars in thousands)  
        %    
    Q3’16 Q3’15 Change Q2’16  
             
  Average Total Loans $ 1,386,186   $ 1,591,798     -12.9 % $ 1,455,050    
             
  Allowance for Loan Loss (ALL)         
  Beginning of Period  $ 28,910   $ 30,828     -6.2 % $ 29,487    
  Reversal of Provision for Loan Losses        (3,200 )         n/m          
  Net ALL Recoveries (Losses)   649     (792 )   -182.0 %   (577 )  
  ALL End of Period $ 26,359   $ 30,036     -12.2 % $ 28,910    
  ALL Recoveries/Gross ALL Losses      134 %   46 %     61 %  
             
  Net ALL (Recoveries) Losses/Avg.          
  Total Loans (a)   -0.19 %   0.20 %     0.16 %  
             
        %    
    9/30’16YTD 9/30’15YTD Change    
             
  Average Total Loans $ 1,447,061   $ 1,643,438     -11.9 %    
             
  Allowance for Loan Loss (ALL)         
  Beginning of Period  $ 29,771   $ 31,485     -5.4 %    
  Reversal of Provision for Loan Losses        (3,200 )         n/m      
  Net ALL Losses   (212 )   (1,449 )   -85.4 %    
  ALL End of Period $ 26,359   $ 30,036     -12.2 %    
  ALL Recoveries/Gross ALL Losses      96 %   63 %      
             
  Net ALL Losses/Avg. Total Loans (a)   0.02 %   0.12 %      
             
9. Credit Quality.          
    (dollars in thousands)  
        %    
    9/30/16 9/30/15 Change 6/30/16  
             
  Nonperforming Originated Loans:          
  Nonperforming Nonaccrual $ 1,198   $ 7,578     -84.2 % $ 1,693    
  Performing Nonaccrual     4,410           n/m       6,890    
  Total Nonaccrual Loans   5,608     7,578     -26.0 %   8,583    
  90+ Days Past Due Accruing Loans   438     481     -8.9 %   303    
  Total   6,046     8,059     -25.0 %   8,886    
  Repossessed Originated Loan Collateral   666     5,834     -88.6 %   1,089    
  Total Nonperforming          
  Originated Assets   6,712     13,893     -51.7 %   9,975    
             
  Nonperforming Purchased Covered Loans (1):        
  Nonperforming Nonaccrual     29           n/m       29    
  Performing Nonaccrual               n/m          
  Total Nonaccrual Loans     29           n/m       29    
  90+ Days Past Due Accruing Loans               n/m          
  Total     29           n/m       29    
  Repossessed Purchased Covered               
  Loan Collateral (1)               n/m          
  Total Nonperforming Purchased              
  Covered Assets (1)     29           n/m       29    
             
  Nonperforming Purchased Non-Covered Loans (2):        
  Nonperforming Nonaccrual   634       8,784     -92.8 %   4,805    
  Performing Nonaccrual     22       84     n/m       148    
  Total Nonaccrual Loans   656       8,868     -92.6 %   4,953    
  90+ Days Past Due Accruing Loans     49           n/m       53    
  Total   705       8,868     -92.1 %   5,006    
  Repossessed Purchased Non-Covered           
  Loan Collateral (2)     2,366       3,435     -31.1 %     3,073    
  Total Nonperforming Purchased          
  Non-Covered Assets (2)   3,071       12,303     -75.0 %   8,079    
             
  Total Nonperforming Assets $ 9,812   $ 26,196     -62.5 % $ 18,083    
             
  Total Originated Loans Outstanding $ 1,242,224   $ 1,376,905     -9.8 % $ 1,280,194    
  Total Purchased Covered           
  Loans Outstanding (1)   11,745     14,640     -19.8 %   12,777    
  Total Purchased Non-Covered           
  Loans Outstanding (2)   110,360       180,298     -38.8 %   136,589    
  Total Loans Outstanding  $ 1,364,329   $ 1,571,843     -13.2 % $ 1,429,560    
             
  Total Assets  $ 5,306,778   $ 5,001,395     6.1 % $ 5,179,085    
             
  Loans:          
  Allowance for Loan Losses $ 26,359   $ 30,036     -12.2 % $ 28,910    
  Allowance/Loans   1.93 %   1.91 %     2.02 %  
  Nonperforming Loans/Total Loans   0.50 %   1.08 %     0.97 %  
             
  Purchased Covered Loans (1):          
  Fair Value Discount on Purchased           
  Covered Loans $   $ 155     $    
  Discount/Purchased Covered          
  Loans, gross   0.00 %   1.05 %     0.00 %  
  Nonperforming Purchased Covered Loans/        
  Total Purchased Covered Loans   0.25 %   0.00 %     0.23 %  
             
  Purchased Non-Covered Loans (2):          
  Fair Value Discount on Purchased           
  Non-Covered Loans $ 4,922   $ 7,082     $ 5,411    
  Discount/Purchased Non-Covered   4.27 %   3.78 %     3.81 %  
  Loans, gross          
  Nonperforming Purchased Non-Covered Loans/        
  Total Purchased Non-Covered Loans   0.64 %   4.92 %     3.66 %  
             
10. Capital.          
    (in thousands, except per-share amounts)  
        %    
    9/30/16 9/30/15 Change 6/30/16  
             
  Shareholders’ Equity $ 562,996   $ 533,938     5.4 % $ 558,327    
  Total Assets   5,306,778     5,001,395     6.1 %   5,179,085    
             
  Shareholders’ Equity/          
  Total Assets   10.61 %   10.68 %     10.78 %  
  Shareholders’ Equity/          
  Total Loans   41.27 %   33.97 %     39.06 %  
  Tangible Common Equity Ratio   8.37 %   8.23 %     8.48 %  
  Common Shares Outstanding   25,665     25,530     0.5 %   25,632    
  Common Equity Per Share $ 21.94   $ 20.91     4.9 % $ 21.78    
  Market Value Per Common Share $ 50.88   $ 44.44     14.5 % $ 49.26    
             
  Share Repurchase Programs          
    (shares in thousands)  
        %    
    Q3’16 Q3’15 Change Q2’16  
             
  Total Shares Repurchased       26   n/m   7    
  Average Repurchase Price $   $ 50.30   n/m $ 49.35    
  Net Shares Issued   (33 )   (1 ) n/m   (194 )  
             
        %    
    9/30’16YTD 9/30’15YTD Change    
             
  Total Shares Repurchased   137     342     -59.8 %    
  Average Repurchase Price $ 41.94   $ 43.90     -4.5 %    
  Net Shares (Issued) Repurchased   (137 )   215     -163.6 %    
             
11. Period-End Balance Sheets.          
    (unaudited, dollars in thousands)  
        %    
    9/30/16 9/30/15 Change 6/30/16  
  Assets:          
  Cash and Due from Banks $ 471,367   $ 268,587     75.5 % $ 441,785    
             
  Investment Securities:          
  Available For Sale   1,762,408     1,571,710     12.1 %   1,531,035    
  Held to Maturity   1,411,019     1,278,814     10.3 %   1,473,357    
             
  Loans   1,364,329     1,571,843     -13.2 %   1,429,560    
  Allowance For Loan Losses   (26,359 )   (30,036 )   -12.2 %   (28,910 )  
  Total Loans, net   1,337,970     1,541,807     -13.2 %   1,400,650    
             
  Other Real Estate Owned   3,032     9,269     -67.3 %   4,162    
  Premises and Equipment, net   37,059     39,244     -5.6 %   37,759    
  Identifiable Intangibles, net   7,789     11,379     -31.5 %   8,656    
  Goodwill    121,673     121,673     0.0 %   121,673    
  Other Assets   154,461     158,912     -2.8 %   160,008    
             
  Total Assets $ 5,306,778   $ 5,001,395     6.1 % $ 5,179,085    
             
  Liabilities and Shareholders’ Equity:          
  Deposits:          
  Noninterest Bearing $ 2,064,988   $ 1,942,450     6.3 % $ 1,978,947    
  Interest-Bearing Transaction   851,885     812,940     4.8 %   827,857    
  Savings   1,462,860     1,310,985     11.6 %   1,404,840    
  Time   265,137     300,545     -11.8 %   273,670    
  Total Deposits   4,644,870     4,366,920     6.4 %   4,485,314    
             
  Short-Term Borrowed Funds   56,358     57,063     -1.2 %   67,852    
  Other Liabilities   42,554     43,474     -2.1 %   67,592    
  Total Liabilities   4,743,782     4,467,457     6.2 %   4,620,758    
             
  Shareholders’ Equity:          
  Common Equity:          
  Paid-In Capital   393,134     381,227     3.1 %   391,213    
  Accumulated Other          
  Comprehensive Income   9,001     7,198     25.1 %   11,885    
  Retained Earnings   160,861     145,513     10.5 %   155,229    
  Total Shareholders’ Equity   562,996     533,938     5.4 %   558,327    
             
  Total Liabilities and           
  Shareholders’ Equity $ 5,306,778   $ 5,001,395     6.1 % $ 5,179,085    
             
12. Income Statements.          
    (unaudited, in thousands except per-share amounts)  
        %    
    Q3’16 Q3’15 Change Q2’16  
  Interest & Fee Income:          
  Loans $ 16,968   $ 19,378     -12.4 % $ 17,583    
  Investment Securities:          
  Available for Sale   8,796     7,880     11.6 %   8,091    
  Held to Maturity   7,704     7,041     9.4 %   8,053    
  Total Interest & Fee Income   33,468     34,299     -2.4 %   33,727    
             
  Interest Expense:          
  Transaction Deposits   64     65     -1.0 %   67    
  Savings Deposits   229     211     8.5 %   225    
  Time Deposits   219     297     -26.3 %   239    
  Short-Term Borrowed Funds   11     12     -10.3 %   10    
  Total Interest Expense   523     585     -10.6 %   541    
             
  Net Interest Income   32,945     33,714     -2.3 %   33,186    
             
  Reversal of Provision for Loan Losses     (3,200 )         n/m          
             
  Noninterest Income:          
  Service Charges    5,303     5,581     -5.0 %   5,239    
  Merchant Processing Services   1,532     1,485     3.1 %   1,638    
  Debit Card Fees   1,587     1,538     3.2 %   1,621    
  Other Service Fees   671     693     -3.1 %   650    
  ATM Processing Fees   600     616     -2.6 %   603    
  Trust Fees   686     682     0.5 %   657    
  Financial Services Commissions   118     177     -33.4 %   137    
  Other   1,101     1,221     -9.9 %   1,157    
  Total Noninterest Income   11,598     11,993     -3.3 %   11,702    
             
  Noninterest Expense:          
  Salaries and  Benefits   13,063     12,761     2.4 %   12,887    
  Occupancy    3,749     3,746     0.1 %   3,400    
  Outsourced Data Processing   2,114     2,115     0.0 %   2,130    
  Amortization of Identifiable Intangibles   867     952     -9.0 %   870    
  Professional Fees   1,693     746     127.1 %   758    
  Furniture & Equipment   1,211     1,075     12.7 %   1,187    
  Other Real Estate Owned   (206 )   83     n/m     (392 )  
  Courier Service   451     604     -25.3 %   462    
  Other   3,146     4,091     -23.1 %   3,927    
  Total Noninterest Expense   26,088     26,173     -0.3 %   25,229    
             
  Income Before Income Taxes   21,655     19,534     10.9 %   19,659    
  Income Tax Provision   6,027     4,677     28.9 %   5,113    
  Net Income $ 15,628   $ 14,857     5.2 % $ 14,546    
             
  Average Common Shares Outstanding   25,641     25,530     0.4 %   25,586    
  Diluted Common Shares Outstanding   25,687     25,565     0.5 %   25,630    
             
  Per Common Share Data:          
  Basic Earnings $ 0.61   $ 0.58     5.2 % $ 0.57    
  Diluted Earnings   0.61     0.58     5.2 %   0.57    
  Dividends Paid   0.39     0.38     2.6 %   0.39    
        %    
    9/30’16YTD 9/30’15YTD Change    
  Interest & Fee Income:          
  Loans $ 52,904   $ 59,643     -11.3 %    
  Investment Securities:          
  Available for Sale   24,855     23,347     6.5 %    
  Held to Maturity   23,083     19,651     17.5 %    
  Total Interest & Fee Income   100,842     102,641     -1.8 %    
             
  Interest Expense:          
  Transaction Deposits   201     190     5.7 %    
  Savings Deposits   677     634     6.6 %    
  Time Deposits   708     992     -28.6 %    
  Short-Term Borrowed Funds   30     44     -30.9 %    
  Federal Home Loan Bank Advances         1     n/m      
  Total Interest Expense   1,616     1,861     -13.2 %    
                 
  Net Interest Income   99,226     100,780     -1.5 %    
                 
  Reversal of Provision for Loan Losses     (3,200 )         n/m      
             
  Noninterest Income:          
  Service Charges    15,790     16,981     -7.0 %    
  Merchant Processing Services   4,699     4,971     -5.5 %    
  Debit Card Fees   4,724     4,528     4.3 %    
  Other Service Fees   1,951     2,041     -4.4 %    
  ATM Processing Fees   1,860     1,828     1.8 %    
  Trust Fees   2,004     2,061     -2.8 %    
  Financial Services Commissions   411     527     -22.2 %    
  Other   3,590     3,625     -1.0 %    
  Total Noninterest Income   35,029     36,562     -4.2 %    
             
  Noninterest Expense:          
  Salaries and Benefits   39,067     39,795     -1.8 %    
  Occupancy    10,546     11,199     -5.8 %    
  Outsourced Data Processing   6,375     6,334     0.6 %    
  Amortization of Identifiable Intangibles   2,642     2,908     -9.2 %    
  Professional Fees   3,183     1,876     69.7 %    
  Furniture & Equipment   3,611     3,353     7.7 %    
  Other Real Estate Owned   (487 )   451     n/m      
  Courier Service   1,458     1,744     -16.4 %    
  Other   10,780     12,136     -11.2 %    
  Total Noninterest Expense   77,175     79,796     -3.3 %    
             
  Income Before Income Taxes   60,280     57,546     4.8 %    
  Income Tax Provision   15,880     13,371     18.8 %    
  Net Income $ 44,400   $ 44,175     0.5 %    
             
  Average Common Shares Outstanding   25,558     25,565     0.0 %    
  Diluted Common Shares Outstanding   25,595     25,585     0.0 %    
             
  Per Common Share Data:          
  Basic Earnings $ 1.74   $ 1.73     0.6 %    
  Diluted Earnings   1.73     1.73     0.0 %    
  Dividends Paid   1.17     1.14     2.6 %    
             
  Footnotes and Abbreviations:          
  (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, which is a non-generally accepted accounting principles (GAAP) financial measure.  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          
  (1) Purchased covered loans and repossessed loan collateral represent assets purchased in a business combination on which losses are shared with the FDIC per a Loss-Sharing Agreement.    
  (2) Purchased non-covered loans and repossessed loan collateral represent assets purchased in a business combination.    
             
CONTACT: 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