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Westamerica Bancorporation Reports Fourth Quarter 2019 Financial Results

SAN RAFAEL, Calif., Jan. 16, 2020 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (WABC), parent company of Westamerica Bank, generated net income for the fourth quarter 2019 of $20.7 million and diluted earnings per common share ("EPS") of $0.77. These results compare to net income of $20.4 million and EPS of $0.75 for the third quarter 2019 and net income of $19.1 million and EPS of $0.71 for the fourth quarter 2018.

“The annualized net interest margin was 3.08 percent during the fourth quarter 2019. Our annualized funding costs as a percentage of our interest-earning assets improved from 0.04 percent for the third quarter 2019 to 0.03 percent for the fourth quarter 2019. Operating expense represented only 46 percent of revenues for the fourth quarter 2019. Asset quality remained healthy during the fourth quarter 2019 with nonperforming assets totaling only $4.9 million at December 31, 2019,” said Chairman, President and CEO David Payne. “Annualized fourth quarter operating results generated a return on average shareholders’ equity of 11.8 percent, and the Company also paid its shareholders a $0.41 dividend per common share in the fourth quarter,” concluded Payne.

Net interest income on a fully-taxable equivalent (FTE) basis was $40.5 million for the fourth quarter 2019, compared to $40.3 million for the third quarter 2019 and $40.3 million for the fourth quarter 2018.  The annualized net interest margin (FTE) was 3.08 percent for the fourth quarter 2019, compared to 3.11 percent for the third quarter 2019 and 3.06 percent for the fourth 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 fourth quarter 2019.

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

Noninterest income for the fourth quarter 2019 totaled $11.7 million, compared to $11.8 million for the third quarter 2019, and $11.9 million for the fourth quarter 2018. 

Noninterest expense for the fourth quarter 2019 totaled $24.2 million, compared to $24.0 million for the third quarter 2019.  Noninterest expense for the fourth quarter 2019 was $1.6 million lower than the fourth quarter 2018 due to lower employee benefit costs, FDIC insurance assessments, and intangible amortization in the fourth quarter 2019. Lower 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 26.0 percent for the fourth quarter 2019 compared to 27.5 percent for the third quarter 2019 and 27.8 percent for the fourth quarter 2018. The fourth quarter 2019 tax provision was reduced by $352 thousand resulting from a customary adjustment to true-up the Company’s 2018 estimated tax provision to the filed 2018 tax return.

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 – Treasurer
 707-863-6840
 investments@westamerica.com

FORWARD-LOOKING INFORMATION:

The following appears in accordance with the Private Securities Litigation Reform Act of 1995:

This press release may contain forward-looking statements about the Company, including descriptions of plans or objectives of its management for future operations, products or services, and forecasts of its revenues, earnings or other measures of economic performance. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may."

Forward-looking statements, by their nature, are subject to risks and uncertainties. A number of factors — many of which are beyond the Company's control — could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. The Company's most recent reports filed with the Securities and Exchange Commission, including the annual report for the year ended December 31, 2018 filed on Form 10-K and quarterly report for the quarter ended September 30, 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 January 16, 2020
 
WESTAMERICA BANCORPORATION        
FINANCIAL HIGHLIGHTS          
December 31, 2019          
             
1. Net Income Summary.          
    (in thousands except per-share amounts)  
        %    
    Q4'2019 Q4'2018 Change Q3'2019  
             
  Net Interest and Fee Income (FTE) $40,481   $40,288   0.5 % $40,349    
  Provision for Loan Losses   -     -   n/m     -    
  Noninterest Income   11,732     11,897   -1.4 %   11,809    
  Noninterest Expense   24,209     25,787   -6.1 %   24,033    
  Income Before Taxes (FTE)   28,004     26,398   6.1 %   28,125    
  Income Tax Provision (FTE)   7,276     7,343   -0.9 %   7,735    
  Net Income $20,728   $19,055   8.8 % $20,390    
             
  Average Common Shares Outstanding   27,050     26,729   1.2 %   26,986    
  Diluted Average Common Shares   27,094     26,815   1.0 %   27,027    
             
  Operating Ratios:          
  Basic Earnings Per Common Share $0.77   $0.71   7.9 % $0.76    
  Diluted Earnings Per Common Share $0.77     0.71   6.3 %   0.75    
  Return On Assets (a)   1.46 %   1.33 %     1.45 %  
  Return On Common Equity (a)   11.8 %   11.7 %     11.9 %  
  Net Interest Margin (FTE) (a)   3.08 %   3.06 %     3.11 %  
  Efficiency Ratio (FTE)   46.4 %   49.4 %     46.1 %  
             
  Dividends Paid Per Common Share $0.41   $0.40   2.5 % $0.41    
  Common Dividend Payout Ratio   54 %   56 %     55 %  
             
        %    
    12/31'19YTD 12/31'18YTD Change    
             
  Net Interest and Fee Income (FTE) $161,406   $155,410   3.9 %    
  Provision for Loan Losses   -     -   n/m      
  Noninterest Income   47,408     48,149   -1.5 %    
  Noninterest Expense   98,986     106,916   -7.4 %    
  Income Before Taxes (FTE)   109,828     96,643   13.6 %    
  Income Tax Provision (FTE)   29,439     25,079   17.4 %    
  Net Income $80,389   $71,564   12.3 %    
             
  Average Common Shares Outstanding   26,956     26,649   1.2 %    
  Diluted Average Common Shares   27,006     26,756   0.9 %    
             
  Operating Ratios:          
  Basic Earnings Per Common Share $2.98   $2.69   10.8 %    
  Diluted Earnings Per Common Share   2.98     2.67   11.6 %    
  Return On Assets   1.44 %   1.27 %      
  Return On Common Equity   11.9 %   11.3 %      
  Net Interest Margin (FTE)   3.11 %   2.98 %      
  Efficiency Ratio (FTE)   47.4 %   52.5 %      
             
  Dividends Paid Per Common Share $1.63   $1.60   1.9 %    
  Common Dividend Payout Ratio   55 %   60 %      
             
2. Net Interest Income.          
    (dollars in thousands)  
        %    
    Q4'2019 Q4'2018 Change Q3'2019  
             
  Interest and Fee Income (FTE) $40,932   $40,802   0.3 % $40,804    
  Interest Expense   451     514   -12.3 %   455    
  Net Interest and Fee Income (FTE) $40,481   $40,288   0.5 % $40,349    
             
  Average Earning Assets $5,243,783   $5,270,708   -0.5 % $5,176,744    
  Average Interest-          
    Bearing Liabilities   2,599,703     2,691,370   -3.4 %   2,586,880    
             
  Yield on Earning Assets (FTE) (a)   3.11 %   3.10 %     3.15 %  
  Cost of Funds (a)   0.03 %   0.04 %     0.04 %  
  Net Interest Margin (FTE) (a)   3.08 %   3.06 %     3.11 %  
  Interest Expense/          
    Interest-Bearing Liabilities (a)   0.07 %   0.08 %     0.07 %  
  Net Interest Spread (FTE) (a)   3.04 %   3.02 %     3.08 %  
             
        %    
    12/31'19YTD 12/31'18YTD Change    
             
  Interest and Fee Income (FTE) $163,294   $157,369   3.8 %    
  Interest Expense   1,888     1,959   -3.6 %    
  Net Interest and Fee Income (FTE) $161,406   $155,410   3.9 %    
             
  Average Earning Assets $5,191,276   $5,212,635   -0.4 %    
  Average Interest-          
    Bearing Liabilities   2,630,370     2,722,149   -3.4 %    
             
  Yield on Earning Assets (FTE)   3.14 %   3.02 %      
  Cost of Funds   0.03 %   0.04 %      
  Net Interest Margin (FTE)   3.11 %   2.98 %      
  Interest Expense/          
    Interest-Bearing Liabilities   0.07 %   0.07 %      
  Net Interest Spread (FTE)   3.07 %   2.95 %      
             
3. Loans & Other Earning Assets.          
    (average volume, dollars in thousands)  
        %    
    Q4'2019 Q4'2018 Change Q3'2019  
             
  Total Assets $5,645,013   $5,680,321   -0.6 % $5,570,843    
  Total Earning Assets   5,243,783     5,270,708   -0.5 %   5,176,744    
  Total Loans   1,116,446     1,189,744   -6.2 %   1,142,668    
    Commercial Loans   219,710     271,165   -19.0 %   231,232    
    Commercial RE Loans   568,892     570,059   -0.2 %   579,069    
    Consumer Loans   327,844     348,520   -5.9 %   332,367    
  Total Investment Securities   3,792,781     3,692,951   2.7 %   3,687,049    
    Equity Securities   -     1,733   n/m     352    
    Debt Securities Available For Sale   3,027,461     2,684,431   12.8 %   2,862,537    
    Debt Securities Held To Maturity   765,320     1,006,787   -24.0 %   824,160    
  Total Interest-Bearing Cash   334,556     388,013   -13.8 %   347,027    
             
  Loans/Deposits   23.1 %   24.2 %     24.0 %  
             
        %    
    12/31'19YTD 12/31'18YTD Change    
             
  Total Assets $5,597,109   $5,620,618   -0.4 %    
  Total Earning Assets   5,191,276     5,212,635   -0.4 %    
  Total Loans   1,161,779     1,209,167   -3.9 %    
    Commercial Loans   248,586     292,893   -15.1 %    
    Commercial RE Loans   577,539     557,679   3.6 %    
    Consumer Loans   335,654     358,595   -6.4 %    
  Total Investment Securities   3,704,764     3,577,597   3.6 %    
    Equity Securities   961     1,809   -46.9 %    
    Debt Securities Available For Sale   2,844,542     2,503,356   13.6 %    
    Debt Securities Held To Maturity   859,261     1,072,432   -19.9 %    
  Total Interest-Bearing Cash   324,733     425,871   -23.7 %    
             
  Loans/Deposits   24.2 %   24.8 %      
             
4. Deposits, Other Interest-Bearing Liabilities & Equity.      
    (average volume, dollars in thousands)  
        %    
    Q4'2019 Q4'2018 Change Q3'2019  
             
  Total Deposits $4,839,552   $4,917,901   -1.6 % $4,770,976    
    Noninterest Demand   2,279,615     2,280,174   -0.0 %   2,234,494    
    Interest-Bearing Transaction   922,772     927,676   -0.5 %   916,180    
    Savings   1,464,206     1,510,358   -3.1 %   1,441,282    
    Time greater than $100K   75,314     86,141   -12.6 %   77,568    
    Time less than $100K   97,645     113,552   -14.0 %   101,452    
  Total Short-Term Borrowings   39,766     53,643   -25.9 %   50,398    
  Shareholders' Equity   694,709     646,129   7.5 %   681,513    
             
  Demand Deposits/          
    Total Deposits   47.1 %   46.4 %     46.8 %  
  Transaction & Savings          
    Deposits / Total Deposits   96.4 %   95.9 %     96.2 %  
             
        %    
    12/31'19YTD 12/31'18YTD Change    
             
  Total Deposits $4,801,804   $4,872,081   -1.4 %    
    Noninterest Demand   2,222,876     2,209,924   0.6 %    
    Interest-Bearing Transaction   932,524     928,277   0.5 %    
    Savings   1,464,080     1,519,375   -3.6 %    
    Time greater than $100K   78,925     94,919   -16.8 %    
    Time less than $100K   103,399     119,586   -13.5 %    
  Total Short-Term Borrowings   51,442     59,992   -14.3 %    
  Shareholders' Equity   675,512     630,697   7.1 %    
             
  Demand Deposits/          
    Total Deposits   46.3 %   45.4 %      
  Transaction & Savings          
    Deposits / Total Deposits   96.2 %   95.6 %      
             
5. Interest Yields Earned & Rates Paid.        
    (dollars in thousands)    
    Q4'2019    
    Average Income/ Yield (a) /    
    Volume Expense Rate    
  Interest & Fee Income Earned          
    Total Earning Assets (FTE) $5,243,783   $40,932   3.11 %    
    Total Loans (FTE)   1,116,446     14,206   5.05 %    
    Commercial Loans (FTE)   219,710     2,821   5.09 %    
    Commercial RE Loans   568,892     7,748   5.40 %    
    Consumer Loans   327,844     3,637   4.41 %    
    Total Investments (FTE)   3,792,781     25,330   2.67 %    
    Total Interest-Bearing Cash   334,556     1,396   1.63 %    
             
  Interest Expense Paid          
    Total Earning Assets   5,243,783     451   0.03 %    
    Total Interest-Bearing Liabilities   2,599,703     451   0.07 %    
    Total Interest-Bearing Deposits   2,559,937     444   0.07 %    
    Interest-Bearing Transaction   922,772     89   0.04 %    
    Savings   1,464,206     215   0.06 %    
    Time less than $100K   97,645     60   0.24 %    
    Time greater than $100K   75,314     80   0.42 %    
    Total Short-Term Borrowings   39,766     7   0.08 %    
             
  Net Interest Income and          
  Margin (FTE)   $40,481   3.08 %    
             
    Q4'2018    
    Average Income/ Yield (a) /    
    Volume Expense Rate    
             
  Interest & Fee Income Earned          
    Total Earning Assets (FTE) $5,270,708   $40,802   3.10 %    
    Total Loans (FTE)   1,189,744     14,894   4.97 %    
    Commercial Loans (FTE)   271,165     3,698   5.41 %    
    Commercial RE Loans   570,059     7,607   5.29 %    
    Consumer Loans   348,520     3,589   4.09 %    
    Total Investments (FTE)   3,692,951     23,916   2.59 %    
    Total Interest-Bearing Cash   388,013     1,992   2.23 %    
             
  Interest Expense Paid          
    Total Earning Assets   5,270,708     514   0.04 %    
    Total Interest-Bearing Liabilities   2,691,370     514   0.08 %    
    Total Interest-Bearing Deposits   2,637,727     506   0.08 %    
    Interest-Bearing Transaction   927,676     124   0.05 %    
    Savings   1,510,358     227   0.06 %    
    Time less than $100K   113,552     70   0.24 %    
    Time greater than $100K   86,141     85   0.39 %    
    Total Short-Term Borrowings   53,643     8   0.06 %    
             
  Net Interest Income and          
  Margin (FTE)   $40,288   3.06 %    
             
6. Noninterest Income.          
    (dollars in thousands except per-share amounts)  
        %    
    Q4'2019 Q4'2018 Change Q3'2019  
             
  Service Charges on Deposits $4,374   $4,496   -2.7 % $4,510    
  Merchant Processing Services   2,424     2,440   -0.7 %   2,494    
  Debit Card Fees   1,568     1,685   -6.9 %   1,641    
  Trust Fees   764     737   3.8 %   733    
  ATM Processing Fees   696     703   -1.0 %   725    
  Other Service Fees   513     620   -17.3 %   580    
  Financial Services Commissions   122     112   9.7 %   75    
  Securities Gains   167     14   n/m   -    
  Other Income   1,104     1,090   1.3 %   1,051    
  Total Noninterest Income $11,732   $11,897   -1.4 % $11,809    
             
    Total Revenue (FTE) $52,213   $52,185   0.1 % $52,158    
    Noninterest Income/Revenue (FTE)   22.5 %   22.8 %     22.6 %  
    Service Charges/Avg. Deposits (a)   0.36 %   0.36 %     0.38 %  
    Total Revenues (FTE) Per Avg.          
  Common Share (a) $7.66   $7.75   -1.1 % $7.67    
             
        %    
    12/31'19YTD 12/31'18YTD Change    
             
  Service Charges on Deposits $17,882   $18,508   -3.4 %    
  Merchant Processing Services   10,132     9,630   5.2 %    
  Debit Card Fees   6,357     6,643   -4.3 %    
  Trust Fees   2,963     2,938   0.9 %    
  ATM Processing Fees   2,776     2,752   0.9 %    
  Other Service Fees   2,255     2,567   -12.2 %    
  Life Insurance Gains   433     585   -26.0 %    
  Financial Services Commissions   392     499   -21.4 %    
  Securities Gains (Losses)   217     (52 ) n/m      
  Other Income   4,001     4,079   -1.9 %    
  Total Noninterest Income $47,408   $48,149   -1.5 %    
             
    Total Revenue (FTE) $208,814   $203,559   2.6 %    
    Noninterest Income/Revenue (FTE)   22.7 %   23.7 %      
    Service Charges/Avg. Deposits   0.37 %   0.38 %      
    Total Revenues (FTE) Per Avg.          
  Common Share $7.75   $7.64   1.4 %    
             
7. Noninterest Expense.          
    (dollars in thousands)  
        %    
    Q4'2019 Q4'2018 Change Q3'2019  
             
  Salaries & Benefits $12,297   $13,055   -5.8 % $12,559    
  Occupancy and Equipment   5,077     5,314   -4.5 %   5,199    
  Outsourced Data Processing   2,361     2,299   2.7 %   2,374    
  Professional Fees   674     565   19.3 %   645    
  Courier Service   529     446   18.6 %   456    
  Amortization of          
    Identifiable Intangibles   73     447   -83.7 %   76    
  Other Operating   3,198     3,661   -12.6 %   2,724    
  Total Noninterest Expense $24,209   $25,787   -6.1 % $24,033    
             
  Noninterest Expense/          
    Avg. Earning Assets (a)   1.83 %   1.94 %     1.84 %  
  Noninterest Expense/Revenues (FTE)   46.4 %   49.4 %     46.1 %  
             
        %    
    12/31'19YTD 12/31'18YTD Change    
             
  Salaries & Benefits $51,054   $53,007   -3.7 %