Westamerica Bancorporation Reports Fourth Quarter 2017 Financial Results

SAN RAFAEL, Calif., Jan. 18, 2018 (GLOBE NEWSWIRE) — Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the fourth quarter 2017 of $4.2 million and diluted earnings per common share (“EPS”) of $0.16. Fourth quarter 2017 results include adjustments to asset values triggered by enactment of the Tax Cuts and Jobs Act of 2017 which reduced EPS $0.48, recognition of a loss contingency which reduced EPS $0.12, and securities gains which increased EPS $0.18. Fourth quarter 2017 results compare to third quarter 2017 net income of $15.0 million and EPS of $0.57, and to fourth quarter 2016 net income of $14.5 million and EPS of $0.56.

“Fourth quarter 2017 net income benefited from higher net interest income; Westamerica’s annualized net interest margin on a fully taxable equivalent basis increased to 3.12 percent in the fourth quarter 2017 from 3.10 percent in the third quarter 2017. The margin is supported by a relatively low cost of funding, which has been steady at 0.04 percent of loans and investments from the fourth quarter of 2016 through the fourth quarter 2017. Asset quality remains very high with nonperforming assets totaling only $7.9 million at December 31, 2017 and net loan losses for the year 2017 were just 0.08 percent of average loan balances,” said Chairman, President and CEO David Payne.  “After the accounting charges required by the new tax law, Westamerica’s capital position remains solid with total capital to assets of 10.7 percent at December 31, 2017 compared to 11.1 percent at September 30, 2017. Westamerica increased its quarterly dividend to $0.40 per common share in the fourth quarter 2017,” concluded Payne.

The annualized net interest margin on a fully taxable equivalent basis was 3.12 percent for the fourth quarter 2017, compared to 3.10 percent for the third quarter 2017, and 3.15 percent for the fourth quarter 2016. Net interest income on a fully taxable equivalent basis was $36.6 million for the fourth quarter 2017, compared to $35.7 million for the third quarter 2017, and $36.0 million for the fourth quarter 2016. The annualized funding cost of deposits and other interest-bearing borrowings, as a percentage of average earning assets, was unchanged at 0.04 percent for the fourth quarter 2017, third quarter 2017, and fourth quarter 2016. 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 95 percent of average total deposits during the fourth quarter 2017.

The Company recognized no provision for loan losses for the fourth quarter 2017 given stable nonperforming loan volumes and other credit quality attributes. At December 31, 2017, the allowance for loan losses totaled $23.0 million.

Noninterest income for the fourth quarter 2017 totaled $20.3 million, including $8.0 million in securities gains, compared to $12.5 million for the third quarter 2017 and $11.5 million for the fourth quarter 2016. Merchant processing fees were $2.3 million for the fourth quarter 2017, $2.2 million for the third quarter 2017 and $1.7 million for the fourth quarter 2016; the increase is due to successful sales efforts and increased processing volumes.

Noninterest expense for the fourth quarter 2017 totaled $30.2 million, including a $625 thousand impairment of low income housing limited partnership investments due to enactment of the Tax Cuts and Jobs Act of 2017 and a $5.5 million loss contingency accrual. As disclosed in the Company’s Form 8-K filed October 19, 2017 and Form 10-Q filed November 3, 2017, the Company has determined that it is obligated to provide refunds of revenue recognized in prior years to some customers; the Company has estimated the probable amount of these obligations and accrued a liability as of December 31, 2017.

The book tax provision on a fully taxable equivalent basis for the fourth quarter 2017 totaled $22.6 million, of which $12.3 million represents the charge to re-measure the Company’s net deferred tax asset triggered by enactment of the Tax Cuts and Jobs Act of 2017.

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

For additional information contact:
Westamerica Bancorporation
1108 Fifth Avenue, San Rafael, CA 94901
Robert A. Thorson – SVP & Chief Financial Officer
707-863-6840
[email protected]

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, 2016 filed on Form 10-K and quarterly report for the quarter ended September 30, 2017 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 January 18, 2018
WESTAMERICA BANCORPORATION
FINANCIAL HIGHLIGHTS
December 31, 2017
1. Net Income Summary.
		(in thousands except per-share amounts)
						%
		Q4’17		Q4’16		Change		Q3’17
	Net Interest and Fee Income (FTE)	$36,644		$35,959		1.9	%	$35,680
	Reversal of Provision for Loan Losses	–		–		n/m		–
	Noninterest Income	20,300		11,545		75.8	%	12,548
	Noninterest Expense	30,167		24,577		22.7	%	24,114
	Income Before Taxes (FTE)	26,777		22,927		16.8	%	24,114
	Income Tax Provision (FTE)	22,617		8,474		n/m		9,097
	Net Income	$4,160		$14,453		-71.2	%	$15,017
	Average Common Shares Outstanding	26,384		25,773		2.4	%	26,309
	Diluted Average Common Shares	26,538		25,925		2.4	%	26,404
	Operating Ratios:
	Basic Earnings Per Common Share	$0.16		$0.56		-71.4	%	$0.57
	Diluted Earnings Per Common Share	0.16		0.56		-71.4	%	0.57
	Return On Assets (a)	0.30	%	1.07	%			1.09	%
	Return On Common Equity (a)	2.7	%	10.3	%			9.9	%
	Net Interest Margin (FTE) (a)	3.12	%	3.15	%			3.10	%
	Efficiency Ratio (FTE)	53.0	%	51.7	%			50.0	%
	Dividends Paid Per Common Share	$0.40		$0.39		2.6	%	$0.39
	Common Dividend Payout Ratio	250	%	70	%			68	%
						%
		12/31’17YTD		12/31’16YTD		Change
	Net Interest and Fee Income (FTE)	$144,118		$145,077		-0.7	%
	Reversal of Provision for Loan Losses	(1,900	)	(3,200	)	n/m
	Noninterest Income	56,628		46,574		21.6	%
	Noninterest Expense	103,292		101,752		1.5	%
	Income Before Taxes (FTE)	99,354		93,099		6.7	%
	Income Tax Provision (FTE)	49,329		34,246		44.0	%
	Net Income	$50,025		$58,853		-15.0	%
	Average Common Shares Outstanding	26,291		25,612		2.7	%
	Diluted Average Common Shares	26,419		25,678		2.9	%
	Operating Ratios:
	Basic Earnings Per Common Share	$1.90		$2.30		-17.4	%
	Diluted Earnings Per Common Share	1.89		2.29		-17.5	%
	Return On Assets	0.92	%	1.12	%
	Return On Common Equity	8.4	%	10.9	%
	Net Interest Margin (FTE)	3.12	%	3.24	%
	Efficiency Ratio (FTE)	51.5	%	53.1	%
	Dividends Paid Per Common Share	$1.57		$1.56		0.6	%
	Common Dividend Payout Ratio	83	%	68	%
2. Net Interest Income.
		(dollars in thousands)
						%
		Q4’17		Q4’16		Change		Q3’17
	Interest and Fee Income (FTE)	$37,115		$36,459		1.8	%	$36,153
	Interest Expense	471		500		-5.8	%	473
	Net Interest and Fee Income (FTE)	$36,644		$35,959		1.9	%	$35,680
	Average Earning Assets	$4,682,897		$4,561,619		2.7	%	$4,587,848
	Average Interest-
	Bearing Liabilities	2,701,190		2,681,585		0.7	%	2,687,620
	Yield on Earning Assets (FTE) (a)	3.16	%	3.19	%			3.14	%
	Cost of Funds (a)	0.04	%	0.04	%			0.04	%
	Net Interest Margin (FTE) (a)	3.12	%	3.15	%			3.10	%
	Interest Expense/
	Interest-Bearing Liabilities (a)	0.07	%	0.07	%			0.07	%
	Net Interest Spread (FTE) (a)	3.09	%	3.12	%			3.07	%
						%
		12/31’17YTD		12/31’16YTD		Change
	Interest and Fee Income (FTE)	$146,018		$147,193		-0.8	%
	Interest Expense	1,900		2,116		-10.2	%
	Net Interest and Fee Income (FTE)	$144,118		$145,077		-0.7	%
	Average Earning Assets	$4,622,339		$4,476,755		3.3	%
	Average Interest-
	Bearing Liabilities	2,696,399		2,624,688		2.7	%
	Yield on Earning Assets (FTE)	3.16	%	3.29	%
	Cost of Funds	0.04	%	0.05	%
	Net Interest Margin (FTE)	3.12	%	3.24	%
	Interest Expense/
	Interest-Bearing Liabilities	0.07	%	0.08	%
	Net Interest Spread (FTE)	3.09	%	3.21	%
3. Loans & Other Earning Assets.
		(average volume, dollars in thousands)
						%
		Q4’17		Q4’16		Change		Q3’17
	Total Assets	$5,534,700		$5,370,412		3.1	%	$5,441,612
	Total Earning Assets	4,682,897		4,561,619		2.7	%	4,587,848
	Total Loans	1,285,748		1,356,350		-5.2	%	1,287,740
	Commercial Loans	327,790		349,022		-6.1	%	324,727
	Commercial RE Loans	575,984		546,145		5.5	%	566,794
	Consumer Loans	381,974		461,183		-17.2	%	396,219
	Total Investment Securities	3,397,149		3,205,269		6.0	%	3,300,108
	Available For Sale (Market)	2,216,054		1,821,998		21.6	%	2,066,568
	Held To Maturity	1,181,095		1,383,271		-14.6	%	1,233,540
	Unrealized (Loss) Gain	(3,522	)	(5,571	)	n/m		4,039
	Loans/Deposits	26.7	%	28.8	%			27.3	%
						%
		12/31’17YTD		12/31’16YTD		Change
	Total Assets	$5,439,682		$5,246,144		3.7	%
	Total Earning Assets	4,622,339		4,476,755		3.3	%
	Total Loans	1,315,202		1,424,259		-7.7	%
	Commercial Loans	339,234		354,831		-4.4	%
	Commercial RE Loans	567,006		590,012		-3.9	%
	Consumer Loans	408,962		479,416		-14.7	%
	Total Investment Securities	3,307,137		3,052,496		8.3	%
	Available For Sale (Market)	2,052,456		1,651,500		24.3	%
	Held To Maturity	1,254,681		1,400,996		-10.4	%
	Unrealized Loss	(3,522	)	(5,571	)	n/m
	Loans/Deposits	27.9	%	31.0	%
4. Deposits, Other Interest-Bearing Liabilities & Equity.
		(average volume, dollars in thousands)
						%
		Q4’17		Q4’16		Change		Q3’17
	Total Deposits	$4,811,035		$4,702,129		2.3	%	$4,714,579
	Noninterest Demand	2,172,678		2,077,213		4.6	%	2,103,042
	Interest Bearing Transaction	899,822		871,947		3.2	%	891,532
	Savings	1,501,872		1,492,748		0.6	%	1,475,969
	Time greater than $100K	106,746		113,781		-6.2	%	108,673
	Time less than $100K	129,917		146,440		-11.3	%	135,363
	Total Short-Term Borrowings	62,833		56,669		10.9	%	76,083
	Shareholders’ Equity	610,200		558,057		9.3	%	599,473
	Demand Deposits/
	Total Deposits	45.2	%	44.2	%			44.6	%
	Transaction & Savings
	Deposits / Total Deposits	95.1	%	94.5	%			94.8	%
		12/31’17YTD		12/31’16YTD		Change
	Total Deposits	$4,722,250		$4,590,351		2.9	%
	Noninterest Demand	2,095,522		2,026,939		3.4	%
	Interest Bearing Transaction	888,116		862,581		3.0	%
	Savings	1,492,725		1,428,059		4.5	%
	Time greater than $100K	109,563		118,750		-7.7	%
	Time less than $100K	136,324		154,022		-11.5	%
	Total Short-Term Borrowings	69,671		61,276		13.7	%
	Shareholders’ Equity	596,356		542,301		10.0	%
	Demand Deposits/
	Total Deposits	44.4	%	44.2	%
	Transaction & Savings
	Deposits / Total Deposits	94.8	%	94.1	%
5. Interest Yields Earned & Rates Paid.
		(dollars in thousands)
		Q4’17
		Average		Income/		Yield (a) /
		Volume		Expense		Rate
	Interest & Fee Income Earned
	Total Earning Assets (FTE)	$4,682,897		$37,115		3.16	%
	Total Loans (FTE)	1,285,748		15,671		4.84	%
	Commercial Loans (FTE)	327,790		4,168		5.05	%
	Commercial RE Loans	575,984		8,009		5.52	%
	Consumer Loans	381,974		3,494		3.63	%
	Total Investments (FTE)	3,397,149		21,444		2.52	%
	Interest Expense Paid
	Total Earning Assets	4,682,897		471		0.04	%
	Total Interest-Bearing Liabilities	2,701,190		471		0.07	%
	Total Interest-Bearing Deposits	2,638,357		461		0.07	%
	Interest-Bearing Transaction	899,822		60		0.03	%
	Savings	1,501,872		225		0.06	%
	Time less than $100K	129,917		75		0.23	%
	Time greater than $100K	106,746		101		0.38	%
	Total Short-Term Borrowings	62,833		10		0.06	%
	Net Interest Income and
	Margin (FTE)			$36,644		3.12	%
		Q4’16
		Average		Income/		Yield (a) /
		Volume		Expense		Rate
	Interest & Fee Income Earned
	Total Earning Assets (FTE)	$4,561,619		$36,459		3.19	%
	Total Loans (FTE)	1,356,350		16,526		4.85	%
	Commercial Loans (FTE)	349,022		4,084		4.66	%
	Commercial RE Loans	546,145		8,386		6.11	%
	Consumer Loans	461,183		4,056		3.50	%
	Total Investments (FTE)	3,205,269		19,933		2.49	%
	Interest Expense Paid
	Total Earning Assets	4,561,619		500		0.04	%
	Total Interest-Bearing Liabilities	2,681,585		500		0.07	%
	Total Interest-Bearing Deposits	2,624,916		491		0.07	%
	Interest-Bearing Transaction	871,947		58		0.03	%
	Savings	1,492,748		230		0.06	%
	Time less than $100K	146,440		90		0.24	%
	Time greater than $100K	113,781		113		0.40	%
	Total Short-Term Borrowings	56,669		9		0.06	%
	Net Interest Income and
	Margin (FTE)			$35,959		3.15	%
6. Noninterest Income.
		(dollars in thousands except per-share amounts)
						%
		Q4’17		Q4’16		Change		Q3’17
	Service Charges on Deposits	$4,756		$5,064		-6.1	%	$4,989
	Merchant Processing Services	2,346		1,678		39.8	%	2,153
	Debit Card Fees	1,569		1,566		0.2	%	1,784
	Other Service Fees	620		620		0.1	%	652
	ATM Processing Fees	696		551		26.4	%	684
	Trust Fees	739		682		8.4	%	718
	Financial Services Commissions	155		157		-1.4	%	148
	Securities Gains	7,955		–		n/m		–
	Other Income	1,464		1,227		19.3	%	1,420
	Total Noninterest Income	$20,300		$11,545		75.8	%	$12,548
	Total Revenue (FTE)	$56,944		$47,504		19.9	%	$48,228
	Noninterest Income/Revenue (FTE)	35.6	%	24.3	%			26.0	%
	Service Charges/Avg. Deposits (a)	0.39	%	0.43	%			0.42	%
	Total Revenues (FTE) Per Avg.
	Common Share (a)	$8.56		$7.33		16.8	%	$7.27
						%
		12/31’17YTD		12/31’16YTD		Change
	Service Charges on Deposits	$19,612		$20,854		-6.0	%
	Merchant Processing Services	8,426		6,377		32.1	%
	Debit Card Fees	6,421		6,290		2.1	%
	Other Service Fees	2,584		2,571		0.5	%
	ATM Processing Fees	2,610		2,411		8.2	%
	Trust Fees	2,875		2,686		7.0	%
	Financial Services Commissions	639		568		12.6	%
	Securities Gains	7,955		–		n/m
	Other Income	5,506		4,817		14.3	%
	Total Noninterest Income	$56,628		$46,574		21.6	%
	Total Revenue (FTE)	$200,746		$191,651		4.7	%
	Noninterest Income/Revenue (FTE)	28.2	%	24.3	%
	Service Charges/Avg. Deposits	0.42	%	0.45	%
	Total Revenues (FTE) Per Avg.
	Common Share	$7.64		$7.48		2.0	%
7. Noninterest Expense.
		(dollars in thousands)
						%
		Q4’17		Q4’16		Change		Q3’17
	Salaries & Benefits	$12,652		$12,439		1.7	%	$12,816
	Loss Contingency (2)	5,542		3		n/m		–
	Occupancy and Equipment	4,860		4,860		0.0	%	4,907
	Outsourced Data Processing	2,325		2,131		9.1	%	2,383
	Amortization of
	Identifiable Intangibles	755		863		-12.4	%	760
	Professional Fees	627		797		-21.3	%	512
	Impairment of Tax Credit Investments	625		–		n/m		–
	Courier Service	423		494		-14.4	%	451
	Other Operating	2,358		2,990		-21.2	%	2,285
	Total Noninterest Expense	$30,167		$24,577		22.7	%	$24,114
	Noninterest Expense/
	Avg. Earning Assets (a)	2.56	%	2.14	%			2.09	%
	Noninterest Expense/Revenues (FTE)	53.0	%	51.7	%			50.0	%
						%
		12/31’17YTD		12/31’16YTD		Change
	Salaries & Benefits	$51,519		$51,507		0.0	%
	Loss Contingency (2)	5,542		3		n/m
	Occupancy and Equipment	19,430		19,017		2.2	%
	Outsourced Data Processing	9,035		8,505		6.2	%
	Amortization of
	Identifiable Intangibles	3,077		3,504		-12.2	%
	Professional Fees	2,161		3,980		-45.7	%
	Impairment of Tax Credit Investments	625		–		n/m
	Courier Service	1,732		1,952		-11.3	%
	Other Operating	10,171		13,284		-23.4	%
	Total Noninterest Expense	$103,292		$101,752		1.5	%
	Noninterest Expense/
	Avg. Earning Assets	2.23	%	2.27	%
	Noninterest Expense/Revenues (FTE)	51.5	%	53.1	%
8. Allowance for Loan Losses.
		(dollars in thousands)
						%
		Q4’17		Q4’16		Change		Q3’17
	Average Total Loans	$1,285,748		$1,356,350		-5.2	%	$1,287,740
	Allowance for Loan Loss (ALL)
	Beginning of Period	$23,628		$26,359		-10.4	%	$24,103
	Reversal of Provision for Loan Losses	–		–		n/m		–
	Net ALL Losses	(619	)	(405	)	n/m		(475	)
	ALL End of Period	$23,009		$25,954		-11.3	%	$23,628
	ALL Recoveries/Gross ALL Losses	47	%	66	%			53	%
	Net ALL Losses /Avg. Total Loans (a)	0.19	%	0.12	%			0.15	%
						%
		12/31’17YTD		12/31’16YTD		Change
	Average Total Loans	$1,315,202		$1,424,259		-7.7	%
	Allowance for Loan Loss (ALL)
	Beginning of Period	$25,954		$29,771		-12.8	%
	Reversal of Provision for Loan Losses	(1,900	)	(3,200	)	n/m
	Net ALL Losses	(1,045	)	(617	)	n/m
	ALL End of Period	$23,009		$25,954		-11.3	%
	ALL Recoveries/Gross ALL Losses	82	%	91	%
	Net ALL Losses /Avg. Total Loans	0.08	%	0.04	%
9. Credit Quality.
		(dollars in thousands)
						%
		12/31/17		12/31/16		Change		9/30/17
	Nonperforming Loans (1):
	Nonperforming Nonaccrual	$1,641		$3,956		-58.5	%	$1,498
	Performing Nonaccrual	4,285		4,429		-3.2	%	4,285
	Total Nonaccrual Loans	5,926		8,385		-29.3	%	5,783
	90+ Days Past Due Accruing Loans	531		497		6.8	%	434
	Total	6,457		8,882		-27.3	%	6,217
	Repossessed Loan Collateral (1)	1,426		3,095		-53.9	%	1,426
	Total Nonperforming Assets (1)	$7,883		$11,977		-34.2	%	$7,643
	Total Loans Outstanding	$1,287,982		$1,352,711		-4.8	%	$1,284,782
	Total Assets	$5,513,046		$5,366,083		2.7	%	$5,445,808
	Loans:
	Allowance for Loan Losses	$23,009		$25,954		-11.3	%	$23,628
	Allowance/Loans	1.79	%	1.92	%			1.84	%
	Nonperforming Loans/Total Loans	0.50	%	0.66	%			0.48	%
10. Capital.
		(in thousands, except per-share amounts)
						%
		12/31/17		12/31/16		Change		9/30/17
	Shareholders’ Equity	$590,239		$561,367		5.1	%	$603,957
	Total Assets	5,513,046		5,366,083		2.7	%	5,445,808
	Shareholders’ Equity/
	Total Assets	10.71	%	10.46	%			11.09	%
	Shareholders’ Equity/
	Total Loans	45.83	%	41.50	%			47.01	%
	Tangible Common Equity Ratio	8.63	%	8.26	%			8.98	%
	Common Shares Outstanding	26,425		25,907		2.0	%	26,319
	Common Equity Per Share	$22.34		$21.67		3.1	%	$22.95
	Market Value Per Common Share	$59.55		$62.93		-5.4	%	$59.54
	Share Repurchase Programs
		(shares in thousands)
						%
		Q4’17		Q4’16		Change		Q3’17
	Total Shares Repurchased	–		–		n/m		–
	Average Repurchase Price	$–		$–		n/m		$–
	Net Shares Issued	(106	)	(242	)	n/m		(15	)
						%
		12/31’17YTD		12/31’16YTD		Change
	Total Shares Repurchased	6		137		n/m
	Average Repurchase Price	$56.51		$41.94		n/m
	Net Shares Issued	(518	)	(379	)	n/m
11. Period-End Balance Sheets.
		(unaudited, dollars in thousands)
						%
		12/31/17		12/31/16		Change		9/30/17
	Assets:
	Cash and Due from Banks	$575,002		$462,271		24.4	%	$561,757
	Investment Securities:
	Available For Sale	2,193,507		1,890,758		16.0	%	2,090,477
	Held to Maturity	1,158,864		1,346,312		-13.9	%	1,204,240
	Loans	1,287,982		1,352,711		-4.8	%	1,284,782
	Allowance For Loan Losses	(23,009	)	(25,954	)	-11.3	%	(23,628	)
	Total Loans, net	1,264,973		1,326,757		-4.7	%	1,261,154
	Other Real Estate Owned	1,426		3,095		-53.9	%	1,426
	Premises and Equipment, net	35,301		36,566		-3.5	%	35,507
	Identifiable Intangibles, net	3,850		6,927		-44.4	%	4,605
	Goodwill	121,673		121,673		0.0	%	121,673
	Other Assets	158,450		171,724		-7.7	%	164,969
	Total Assets	$5,513,046		$5,366,083		2.7	%	$5,445,808
	Liabilities and Shareholders’ Equity:
	Deposits:
	Noninterest Bearing	$2,197,526		$2,089,443		5.2	%	$2,128,342
	Interest-Bearing Transaction	904,245		865,701		4.5	%	873,145
	Savings	1,494,024		1,493,427		0.0	%	1,491,168
	Time	231,818		256,170		-9.5	%	241,925
	Total Deposits	4,827,613		4,704,741		2.6	%	4,734,580
	Short-Term Borrowed Funds	58,471		59,078		-1.0	%	66,337
	Other Liabilities	36,723		40,897		-10.2	%	40,934
	Total Liabilities	4,922,807		4,804,716		2.5	%	4,841,851
	Shareholders’ Equity:
	Common Equity:
	Paid-In Capital	433,267		406,139		6.7	%	427,188
	Accumulated Other
	Comprehensive Loss	(16,832	)	(10,074	)	n/m		(3,433	)
	Retained Earnings	173,804		165,302		5.1	%	180,202
	Total Shareholders’ Equity	590,239		561,367		5.1	%	603,957
	Total Liabilities and
	Shareholders’ Equity	$5,513,046		$5,366,083		2.7	%	$5,445,808
12. Income Statements.
		(unaudited, in thousands except per-share amounts)
						%
		Q4’17		Q4’16		Change		Q3’17
	Interest & Fee Income:
	Loans	$15,410		$16,235		-5.1	%	$15,082
	Investment Securities:
	Available for Sale	12,359		9,422		31.2	%	11,347
	Held to Maturity	6,435		7,552		-14.8	%	6,716
	Total Interest & Fee Income	34,204		33,209		3.0	%	33,145
	Interest Expense:
	Transaction Deposits	60		58		3.1	%	60
	Savings Deposits	225		230		-2.3	%	220
	Time Deposits	176		203		-13.1	%	181
	Short-Term Borrowed Funds	10		9		13.6	%	12
	Total Interest Expense	471		500		-5.8	%	473
	Net Interest Income	33,733		32,709		3.1	%	32,672
	Reversal of Provision for Loan Losses	–		–		n/m		–
	Noninterest Income:
	Service Charges	4,756		5,064		-6.1	%	4,989
	Merchant Processing Services	2,346		1,678		39.8	%	2,153
	Debit Card Fees	1,569		1,566		0.2	%	1,784
	Other Service Fees	620		620		0.1	%	652
	ATM Processing Fees	696		551		26.4	%	684
	Trust Fees	739		682		8.4	%	718
	Financial Services Commissions	155		157		-1.4	%	148
	Securities Gains	7,955		–		n/m		–
	Other	1,464		1,227		19.3	%	1,420
	Total Noninterest Income	20,300		11,545		75.8	%	12,548
	Noninterest Expense:
	Salaries and  Benefits	12,652		12,439		1.7	%	12,816
	Loss Contingency (2)	5,542		3		n/m		–
	Occupancy and Equipment	4,860		4,860		0.0	%	4,907
	Outsourced Data Processing	2,325		2,131		9.1	%	2,383
	Amortization of Identifiable Intangibles	755		863		-12.4	%	760
	Professional Fees	627		797		-21.3	%	512
	Impairment of Tax Credit Investments	625		–		n/m		–
	Courier Service	423		494		-14.4	%	451
	Other	2,358		2,990		-21.2	%	2,285
	Total Noninterest Expense	30,167		24,577		22.7	%	24,114
	Income Before Income Taxes	23,866		19,677		21.3	%	21,106
	Income Tax Provision	19,706		5,224		n/m		6,089
	Net Income	$4,160		$14,453		-71.2	%	$15,017
	Average Common Shares Outstanding	26,384		25,773		2.4	%	26,309
	Diluted Common Shares Outstanding	26,538		25,925		2.4	%	26,404
	Per Common Share Data:
	Basic Earnings	$0.16		$0.56		-71.4	%	$0.57
	Diluted Earnings	0.16		0.56		-71.4	%	0.57
	Dividends Paid	0.40		0.39		2.6	%	0.39
						%
		12/31’17YTD		12/31’16YTD		Change
	Interest & Fee Income:
	Loans	$61,740		$69,139		-10.7	%
	Investment Securities:
	Available for Sale	44,664		34,276		30.3	%
	Held to Maturity	27,432		30,636		-10.5	%
	Total Interest & Fee Income	133,836		134,051		-0.2	%
	Interest Expense:
	Transaction Deposits	233		259		-10.0	%
	Savings Deposits	890		907		-1.8	%
	Time Deposits	733		911		-19.6	%
	Short-Term Borrowed Funds	44		39		12.5	%
	Total Interest Expense	1,900		2,116		-10.2	%
	Net Interest Income	131,936		131,935		0.0	%
	Reversal of Provision for Loan Losses	(1,900	)	(3,200	)	n/m
	Noninterest Income:
	Service Charges	19,612		20,854		-6.0	%
	Merchant Processing Services	8,426		6,377		32.1	%
	Debit Card Fees	6,421		6,290		2.1	%
	Other Service Fees	2,584		2,571		0.5	%
	ATM Processing Fees	2,610		2,411		8.2	%
	Trust Fees	2,875		2,686		7.0	%
	Financial Services Commissions	639		568		12.6	%
	Securities Gains	7,955		–		n/m
	Other	5,506		4,817		14.3	%
	Total Noninterest Income	56,628		46,574		21.6	%
	Noninterest Expense:
	Salaries and  Benefits	51,519		51,507		0.0	%
	Loss Contingency (2)	5,542		3		n/m
	Occupancy and Equipment	19,430		19,017		2.2	%
	Outsourced Data Processing	9,035		8,505		6.2	%
	Amortization of Identifiable Intangibles	3,077		3,504		-12.2	%
	Professional Fees	2,161		3,980		-45.7	%
	Impairment of Tax Credit Investments	625		–		n/m
	Courier Service	1,732		1,952		-11.3	%
	Other	10,171		13,284		-23.4	%
	Total Noninterest Expense	103,292		101,752		1.5	%
	Income Before Income Taxes	87,172		79,957		9.0	%
	Income Tax Provision	37,147		21,104		76.0	%
	Net Income	$50,025		$58,853		-15.0	%
	Average Common Shares Outstanding	26,291		25,612		2.7	%
	Diluted Common Shares Outstanding	26,419		25,678		2.9	%
	Per Common Share Data:
	Basic Earnings	$1.90		$2.30		-17.4	%
	Diluted Earnings	1.89		2.29		-17.5	%
	Dividends Paid	1.57		1.56		0.6	%
	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.  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) All originated and purchased non performing loans and repossessed loan collateral have been combined as of Q1 ’17.  Prior period presentation has been updated, accordingly.
	(2) Represents the Company’s estimated refunds to customers of revenue recognized in prior years.