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Westamerica Bancorporation Reports Second Quarter 2021 Financial Results

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SAN RAFAEL, Calif., July 15, 2021 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the second quarter 2021 of $22.6 million and diluted earnings per common share ("EPS") of $0.84. Second quarter 2021 results include “make-whole” interest income on corporate bonds redeemed prior to maturity, which increased EPS $0.04. These results compare to net income of $20.1 million and EPS of $0.75 for the first quarter 2021, which included “make-whole” interest income on corporate bonds redeemed before maturity that increased EPS $0.02.

"Westamerica continued originating loans for our customers under the second round of the Paycheck Protection Program during the second quarter 2021. Average total deposits grew $327 million from the first quarter 2021 to the second quarter 2021. Westamerica’s valuable deposit base generated a very low 0.03 percent annualized cost of funding our loan and bond portfolios during the second quarter 2021. Operating expenses were well managed in the second quarter 2021 declining $615 thousand from the first quarter 2021 and $463 thousand from the second quarter 2020. Credit quality remained stable with nonperforming loans of $4.4 million at June 30, 2021,” said Chairman, President and CEO David Payne. “Second quarter 2021 results generated an annualized 12.2 percent return on average common equity, and shareholders were paid a $0.41 per common share dividend during the quarter,” concluded Payne.

Net interest income on a fully-taxable equivalent (FTE) basis was $44.5 million for the second quarter 2021, including “make-whole” interest income on corporate bonds redeemed prior to maturity of $1.4 million. Second quarter 2021 net interest income (FTE) compares to $42.6 million for the first quarter 2021, which included “make-whole” interest income on corporate bonds redeemed prior to maturity of $700 thousand. Average PPP loans grew $19 million from the first quarter 2021 to the second quarter 2021. Average total deposits grew $327 million from the first quarter 2021 to the second quarter 2021. Checking and savings deposits represented ninety-seven percent of the Company’s average deposit base during the second quarter 2021.

At June 30, 2021, nonperforming loans totaled $4.4 million and the allowance for credit losses on loans was $23.7 million. The Company continues to work with loan customers requesting loan payment deferrals due to economic weakness caused by the pandemic. At June 30, 2021, loans with deferred payments totaled $586 thousand, all of which were consumer automobile loans.

Noninterest income for the second quarter 2021 totaled $11.0 million, compared to noninterest income for the first quarter 2021 of $10.2 million. The increase in noninterest income was primarily due to higher levels of merchant processing services fees and debit card fees.

Noninterest expense for the second quarter 2021 was $24.3 million compared to $24.9 million for the first quarter 2021; the decline in noninterest expense was primarily attributable to the seasonal decline in payroll related taxes.

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 & 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, 2020 filed on Form 10-K and quarterly report for the quarter ended March 31, 2021 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.




WESTAMERICA BANCORPORATION

FINANCIAL HIGHLIGHTS

June 30, 2021

1. Net Income Summary.

(in thousands except per-share amounts)

%

Q2'2021

Q2'2020

Change

Q1'2021

Net Interest and Fee Income (FTE)

$

44,499

$

42,063

5.8

%

$

42,583

Provision for Credit Losses

-

-

n/m

-

Noninterest Income

11,032

9,554

15.5

%

10,189

Noninterest Expense

24,291

24,754

-1.9

%

24,906

Income Before Taxes (FTE)

31,240

26,863

16.3

%

27,866

Income Tax Provision (FTE)

8,661

7,301

18.6

%

7,719

Net Income

$

22,579

$

19,562

15.4

%

$

20,147

Average Common Shares Outstanding

26,865

26,935

-0.3

%

26,821

Diluted Average Common Shares

26,887

26,951

-0.2

%

26,842

Operating Ratios:

Basic Earnings Per Common Share

$

0.84

$

0.72

16.7

%

$

0.75

Diluted Earnings Per Common Share

0.84

0.72

16.7

%

0.75

Return On Assets (a)

1.29

%

1.30

%

1.23

%

Return On Common Equity (a)

12.2

%

11.1

%

11.1

%

Net Interest Margin (FTE) (a)

2.70

%

2.99

%

2.74

%

Efficiency Ratio (FTE)

43.7

%

48.0

%

47.2

%

Dividends Paid Per Common Share

$

0.41

$

0.41

0.0

%

$

0.41

Common Dividend Payout Ratio

49

%

57

%

55

%

%

6/30'21YTD

6/30'20YTD

Change

Net Interest and Fee Income (FTE)

$

87,082

$

82,610

5.4

%

Provision for Credit Losses

-

4,300

n/m

Noninterest Income

21,221

21,202

0.1

%

Noninterest Expense

49,197

49,418

-0.4

%

Income Before Taxes (FTE)

59,106

50,094

18.0

%

Income Tax Provision (FTE)

16,380

13,570

20.7

%

Net Income

$

42,726

$

36,524

17.0

%

Average Common Shares Outstanding

26,843

27,001

-0.6

%

Diluted Average Common Shares

26,865

27,024

-0.6

%

Operating Ratios:

Basic Earnings Per Common Share

$

1.59

$

1.35

17.8

%

Diluted Earnings Per Common Share

1.59

1.35

17.8

%

Return On Assets (a)

1.26

%

1.25

%

Return On Common Equity (a)

11.6

%

10.4

%

Net Interest Margin (FTE) (a)

2.72

%

3.04

%

Efficiency Ratio (FTE)

45.4

%

47.6

%

Dividends Paid Per Common Share

$

0.82

$

0.82

0.0

%

Common Dividend Payout Ratio

52

%

61

%

2. Net Interest Income.

(dollars in thousands)

%

Q2'2021

Q2'2020

Change

Q1'2021

Interest and Fee Income (FTE)

$

44,983

$

42,498

5.8

%

$

43,058

Interest Expense

484

435

11.3

%

475

Net Interest and Fee Income (FTE)

$

44,499

$

42,063

5.8

%

$

42,583

Average Earning Assets

$

6,603,343

$

5,635,014

17.2

%

$

6,244,622

Average Interest-

Bearing Liabilities

3,298,221

2,774,450

18.9

%

3,130,227

Yield on Earning Assets (FTE) (a)

2.73

%

3.02

%

2.77

%

Cost of Funds (a)

0.03

%

0.03

%

0.03

%

Net Interest Margin (FTE) (a)

2.70

%

2.99

%

2.74

%

Interest Expense/

Interest-Bearing Liabilities (a)

0.06

%

0.06

%

0.06

%

Net Interest Spread (FTE) (a)

2.67

%

2.96

%

2.71

%

%

6/30'21YTD

6/30'20YTD

Change

Interest and Fee Income (FTE)

$

88,041

$

83,487

5.5

%

Interest Expense

959

877

9.4

%

Net Interest and Fee Income (FTE)

$

87,082

$

82,610

5.4

%

Average Earning Assets

$

6,424,973

$

5,438,578

18.1

%

Average Interest-

Bearing Liabilities

3,214,688

2,711,515

18.6

%

Yield on Earning Assets (FTE) (a)

2.75

%

3.07

%

Cost of Funds (a)

0.03

%

0.03

%

Net Interest Margin (FTE) (a)

2.72

%

3.04

%

Interest Expense/

Interest-Bearing Liabilities (a)

0.06

%

0.07

%

Net Interest Spread (FTE) (a)

2.69

%

3.00

%

3. Loans & Other Earning Assets.

(average volume, dollars in thousands)

%

Q2'2021

Q2'2020

Change

Q1'2021

Total Assets

$

7,004,695

$

6,058,365

15.6

%

$

6,650,164

Total Earning Assets

6,603,343

5,635,014

17.2

%

6,244,622

Total Loans

1,257,087

1,232,073

2.0

%

1,251,540

Total Commercial Loans

413,797

344,053

20.3

%

395,473

Paycheck Protection Program (PPP) Loans

207,515

132,500

56.6

%

188,971

Commercial Loans

206,282

211,553

-2.5

%

206,502

Commercial RE Loans

546,470

578,572

-5.5

%

559,191

Consumer Loans

296,820

309,448

-4.1

%

296,876

Total Investment Securities

4,394,169

3,957,851

11.0

%

4,440,621

Debt Securities Available For Sale

3,953,016

3,293,009

20.0

%

3,947,549

Debt Securities Held To Maturity

441,153

664,842

-33.6

%

493,072

Total Interest-Bearing Cash

952,087

445,090

113.9

%

552,461

Loans/Deposits

20.7

%

23.7

%

21.8

%

%

6/30'21YTD

6/30'20YTD

Change

Total Assets

$

6,828,409

$

5,856,913

16.6

%

Total Earning Assets

6,424,973

5,438,578

18.1

%

Total Loans

1,254,328

1,178,004

6.5

%

Total Commercial Loans

404,685

283,718

42.6

%

PPP Loans

198,294

66,250

199.3

%

Commercial Loans

206,391

217,468

-5.1

%

Commercial RE Loans

552,795

579,157

-4.6

%

Consumer Loans

296,848

315,129

-5.8

%

Total Investment Securities

4,417,267

3,901,868

13.2

%

Debt Securities Available For Sale

3,950,298

3,214,376

22.9

%

Debt Securities Held To Maturity

466,969

687,492

-32.1

%

Total Interest-Bearing Cash

753,378

358,706

110.0

%

Loans/Deposits

21.2

%

23.5

%

4. Deposits, Other Interest-Bearing Liabilities & Equity.

(average volume, dollars in thousands)

%

Q2'2021

Q2'2020

Change

Q1'2021

Total Deposits

$

6,074,730

$

5,200,475

16.8

%

$

5,748,070

Noninterest Demand

2,888,259

2,496,840

15.7

%

2,713,632

Interest-Bearing Transaction

1,208,584

980,872

23.2

%

1,130,760

Savings

1,822,625

1,558,201

17.0

%

1,746,815

Time greater than $100K

70,750

72,267

-2.1

%

71,241

Time less than $100K

84,512

92,295

-8.4

%

85,622

Total Short-Term Borrowings

111,750

70,116

59.4

%

95,575

Other Borrowed Funds

-

699

-100.0

%

214

Shareholders' Equity

744,746

705,882

5.5

%

735,496

Demand Deposits/

Total Deposits

47.5

%

48.0

%

47.2

%

Transaction & Savings

Deposits / Total Deposits

97.4

%

96.8

%

97.3

%

%

6/30'21YTD

6/30'20YTD

Change

Total Deposits

$

5,912,303

$

5,014,731

17.9

%

Noninterest Demand

2,801,428

2,359,788

18.7

%

Interest-Bearing Transaction

1,169,888

961,295

21.7

%

Savings

1,784,929

1,527,282

16.9

%

Time greater than $100K

70,994

73,058

-2.8

%

Time less than $100K

85,064

93,308

-8.8

%

Total Short-Term Borrowings

103,707

56,223

84.5

%

Other Borrowed Funds

106

349

-69.6

%

Shareholders' Equity

740,147

705,606

4.9

%

Demand Deposits/

Total Deposits

47.4

%

47.1

%

Transaction & Savings

Deposits / Total Deposits

97.4

%

96.7

%

5. Interest Yields Earned & Rates Paid.

(dollars in thousands)

Q2'2021

Average

Income/

Yield (a) /

Volume

Expense

Rate (a)

Interest & Fee Income Earned

Total Earning Assets (FTE)

$

6,603,343

$

44,983

2.73

%

Total Loans (FTE)

1,257,087

15,168

4.84

%

Total Commercial Loans (FTE)

413,797

4,763

4.62

%

PPP Loans

207,515

2,713

5.25

%

Commercial Loans (FTE)

206,282

2,050

3.98

%

Commercial RE Loans

546,470

6,994

5.13

%

Consumer Loans

296,820

3,411

4.61

%

Total Investments (FTE)

4,394,169

29,556

2.69

%

Total Interest-Bearing Cash

952,087

259

0.11

%

Interest Expense Paid

Total Earning Assets

6,603,343

484

0.03

%

Total Interest-Bearing Liabilities

3,298,221

484

0.06

%

Total Interest-Bearing Deposits

3,186,471

466

0.06

%

Interest-Bearing Transaction

1,208,584

93

0.03

%

Savings

1,822,625

263

0.06

%

Time less than $100K

84,512

42

0.20

%

Time greater than $100K

70,750

68

0.39

%

Total Short-Term Borrowings

111,750

18

0.07

%

Net Interest Income and

Margin (FTE)

$

44,499

2.70

%

Q2'2020

Average

Income/

Yield (a) /

Volume

Expense

Rate (a)

Interest & Fee Income Earned

Total Earning Assets (FTE)

$

5,635,014

$

42,498

3.02

%

Total Loans (FTE)

1,232,073

15,376

5.02

%

Total Commercial Loans (FTE)

344,053

4,052

4.74

%

PPP Loans

132,500

1,673

5.07

%

Commercial Loans (FTE)

211,553

2,379

4.52

%

Commercial RE Loans

578,572

7,892

5.49

%

Consumer Loans

309,448

3,432

4.46

%

Total Investments (FTE)

3,957,851

27,009

2.73

%

Total Interest-Bearing Cash

445,090

113

0.10

%

Interest Expense Paid

Total Earning Assets

5,635,014

435

0.03

%

Total Interest-Bearing Liabilities

2,774,450

435

0.06

%

Total Interest-Bearing Deposits

2,703,635

424

0.06

%

Interest-Bearing Transaction

980,872

74

0.03

%

Savings

1,558,201

224

0.06

%

Time less than $100K

92,295

47

0.20

%

Time greater than $100K

72,267

79

0.44

%

Total Short-Term Borrowings

70,116

10

0.06

%

Other Borrowed Funds

699

1

0.35

%

Net Interest Income and

Margin (FTE)

$

42,063

2.99

%

6. Noninterest Income.

(dollars in thousands except per-share amounts)

%

Q2'2021

Q2'2020

Change

Q1'2021

Service Charges on Deposits

$

3,235

$

3,151

2.6

%

$

3,304

Merchant Processing Services

3,279

2,277

44.0

%

2,560

Debit Card Fees

1,791

1,459

22.8

%

1,601

Trust Fees

827

714

15.8

%

801

ATM Processing Fees

618

518

19.3

%

601

Other Service Fees

491

420

16.9

%

469

Financial Services Commissions

95

123

-22.8

%

70

Securities Gains

34

71

n/m

-

Other Noninterest Income

662

821

-19.4

%

783

Total Noninterest Income

$

11,032

$

9,554

15.5

%

$

10,189

Total Revenue (FTE)

$

55,531

$

51,617

7.6

%

$

52,772

Noninterest Income/Revenue (FTE)

19.9

%

18.5

%

19.3

%

Service Charges/Avg. Deposits (a)

0.21

%

0.24

%

0.23

%

Total Revenues (FTE) Per Avg.

Common Share (a)

$

8.29

$

7.71

7.6

%

$

7.98

%

6/30'21YTD

6/30'20YTD

Change

Service Charges on Deposits

$

6,539

$

7,399

-11.6

%

Merchant Processing Services

5,839

4,635

26.0

%

Debit Card Fees

3,392

2,927

15.9

%

Trust Fees

1,628

1,491

9.2

%

ATM Processing Fees

1,219

1,097

11.1

%

Other Service Fees

960

926

3.7

%

Financial Services Commissions

165

248

-33.5

%

Securities Gains

34

71

n/m

Other Noninterest Income

1,445

2,408

-40.0

%

Total Noninterest Income

$

21,221

$

21,202

0.1

%

Total Revenue (FTE)

$

108,303

$

103,812

4.3

%

Noninterest Income/Revenue (FTE)

19.6

%

20.4

%

Service Charges/Avg. Deposits (a)

0.22

%

0.30

%

Total Revenues (FTE) Per Avg./

Common Share (a)

$

8.14

$

7.73

5.2

%

7. Noninterest Expense.

(dollars in thousands)

%

Q2'2021

Q2'2020

Change

Q1'2021

Salaries & Benefits

$

12,097

$

12,900

-6.2

%

$

12,665

Occupancy and Equipment

4,808

4,791

0.4

%

4,880

Outsourced Data Processing

2,425

2,324

4.3

%

2,390

Professional Fees

830

643

29.1

%

942

Courier Service

567

508

11.6

%

504

Amortization of

Identifiable Intangibles

68

73

-6.8

%

69

Other Noninterest Expense

3,496

3,515

-0.5

%

3,456

Total Noninterest Expense

$

24,291

$

24,754

-1.9

%

$

24,906

Noninterest Expense/

Avg. Earning Assets (a)

1.48

%

1.77

%

1.62

%

Noninterest Expense/Revenues (FTE)

43.7

%

48.0

%

47.2

%

%

6/30'21YTD

6/30'20YTD

Change

Salaries & Benefits

$

24,762

$

25,918

-4.5

%

Occupancy and Equipment

9,688

9,723

-0.4

%

Outsourced Data Processing

4,815

4,729

1.8

%

Professional Fees

1,772

1,032

71.7

%

Courier Service

1,071

999

7.2

%

Amortization of

Identifiable Intangibles

137

146

-6.2

%

Other Noninterest Expense

6,952

6,871

1.2

%

Total Noninterest Expense

$

49,197

$

49,418

-0.4

%

Noninterest Expense/

Avg. Earning Assets (a)

1.54

%

1.83

%

Noninterest Expense/Revenues (FTE)

45.4

%

47.6

%

8. Allowance for Credit Losses.

(dollars in thousands)

%

Q2'2021

Q2'2020

Change

Q1'2021

Average Total Loans

$

1,257,087

$

1,232,073

2.0

%

$

1,251,540

Beginning of Period Allowance for

Credit Losses on Loans (ACLL)

$

23,483

$

24,804

-5.3

%

$

23,854

Provision for Credit Losses

-

-

n/m

-

Net ACLL Recoveries (Losses)

254

(275

)

-192.4

%

(371

)

End of Period ACLL

$

23,737

$

24,529

-3.2

%

$

23,483

Gross ACLL Recoveries /

Gross ACLL Losses

176

%

66

%

60

%

Net ACLL (Recoveries) Losses /

Avg. Total Loans (a)

-0.08

%

0.09

%

0.12

%

%

6/30'21YTD

6/30'20YTD

Change

Average Total Loans

$

1,254,328

$

1,178,004

6.5

%

Prior Period ACLL

$

23,854

$

19,484

22.4

%

Adoption of ASU 2016-13(1)

-

2,017

n/m

Beginning of Period ACLL

23,854

21,501

10.9

%

Provision for Credit Losses

-

4,300

n/m

Net ACLL Losses

(117

)

(1,272

)

-90.8

%

End of Period ACLL

$

23,737

$

24,529

-3.2

%

Gross ACLL Recoveries /

Gross ACLL Losses

91

%

46

%

Net ACLL Losses /

Avg. Total Loans (a)

0.02

%

0.22

%

(dollars in thousands)

%

6/30/21

6/30/20

Change

3/31/21

Allowance for Credit Losses on Loans

$

23,737

$

24,529

-3.2

%

$

23,483

Allowance for Credit Losses on

HTM Securities

9

16

-44.6

%

9

Total Allowance for Credit Losses

$

23,746

$

24,545

-3.3

%

$

23,492

Allowance for Unfunded

Credit Commitments

$

101

$

53

90.0

%

$

101

9. Credit Quality.

(dollars in thousands)

%

6/30/21

6/30/20

Change

3/31/21

Nonperforming Loans:

Nonperforming Nonaccrual

$

652

$

590

10.5

%

$

402

Performing Nonaccrual

3,564

3,643

-2.2

%

3,569

Total Nonaccrual Loans

4,216

4,233

-0.4

%

3,971

90+ Days Past Due Accruing Loans

167

290

-42.4

%

132

Total

4,383

4,523

-3.1

%

4,103

Repossessed Loan Collateral

-

43

-100.0

%

-

Total Nonperforming Assets

$

4,383

$

4,566

-4.0

%

$

4,103

Total Loans Outstanding

$

1,194,834

$

1,316,359

-9.2

%

$

1,293,756

Total Assets

7,147,779

6,463,889

10.6

%

6,912,481

Loans:

Allowance for Credit Losses on Loans

$

23,737

$

24,529

-3.2

%

$

23,483

Allowance for Credit Losses on Loans /

Loans

1.99

%

1.86

%

1.82

%

Nonperforming Loans/Total Loans

0.37

%

0.34

%

0.32

%

10. Capital.

(in thousands, except per-share amounts)

%

6/30/21

6/30/20

Change

3/31/21

Shareholders' Equity

$

842,196

$

808,076

4.2

%

$

812,132

Total Assets

7,147,779

6,463,889

10.6

%

6,912,481

Shareholders' Equity/

Total Assets

11.78

%

12.50

%

11.75

%

Shareholders' Equity/

Total Loans

70.49

%

61.39

%

62.77

%

Tangible Common Equity Ratio

10.24

%

10.81

%

10.15

%

Common Shares Outstanding

26,865

26,933

-0.3

%

26,864

Common Equity Per Share

$

31.35

$

30.00

4.5

%

$

30.23

Market Value Per Common Share

58.03

57.42

1.1

%

62.78

Share Repurchase Programs

(shares in thousands)

%

Q2'2021

Q2'2020

Change

Q1'2021

Total Shares Repurchased

-

13

n/m

4

Average Repurchase Price

$

-

$

52.27

n/m

$

61.09

Net Shares Issued

(1

)

(1

)

n/m

(57

)

%

6/30'21YTD

6/30'20YTD

Change

Total Shares Repurchased

4

193

n/m

Average Repurchase Price

$

61.09

$

51.50

n/m

Net Shares (Issued) Repurchased

(58

)

129

n/m

11. Period-End Balance Sheets.

(unaudited, dollars in thousands)

%

6/30/21

6/30/20

Change

3/31/21

Assets:

Cash and Due from Banks

$

939,929

$

500,820

87.7

%

$

866,457

Debt Securities Available For Sale

4,304,162

3,708,370

16.1

%

3,990,570

Debt Securities Held To Maturity (2)

414,413

638,281

-35.1

%

469,259

Loans

1,194,834

1,316,359

-9.2

%

1,293,756

Allowance For Credit Losses on Loans

(23,737

)

(24,529

)

-3.2

%

(23,483

)

Total Loans, net

1,171,097

1,291,830

-9.3

%

1,270,273

Other Real Estate Owned

-

43

n/m

-

Premises and Equipment, net

32,080

34,061

-5.8

%

32,216

Identifiable Intangibles, net

967

1,245

-22.4

%

1,035

Goodwill

121,673

121,673

0.0

%

121,673

Other Assets

163,458

167,566

-2.5

%

160,998

Total Assets

$

7,147,779

$

6,463,889

10.6

%

$

6,912,481

Liabilities and Shareholders' Equity:

Deposits:

Noninterest-Bearing

$

2,872,920

$

2,702,885

6.3

%

$

2,798,542

Interest-Bearing Transaction

1,200,634

997,593

20.4

%

1,179,484

Savings

1,849,258

1,605,169

15.2

%

1,791,636

Time

153,577

162,765

-5.6

%

154,171

Total Deposits

6,076,389

5,468,412

11.1

%

5,923,833

Short-Term Borrowed Funds

90,043

86,170

4.5

%

95,479

Other Borrowed Funds

-

-

n/m

1,681

Other Liabilities

139,151

101,231

37.5

%

79,356

Total Liabilities

6,305,583

5,655,813

11.5

%

6,100,349

Shareholders' Equity:

Common Equity:

Paid-In Capital

470,365

467,386

0.6

%

469,885

Accumulated Other

Comprehensive Income

86,921

93,732

n/m

68,901

Retained Earnings

284,910

246,958

15.4

%

273,346

Total Shareholders' Equity

842,196

808,076

4.2

%

812,132

Total Liabilities and

Shareholders' Equity

$

7,147,779

$

6,463,889

10.6

%

$

6,912,481

12. Income Statements.

(unaudited, in thousands except per-share amounts)

%

Q2'2021

Q2'2020

Change

Q1'2021

Interest & Fee Income:

Loans

$

15,064

$

15,278

-1.4

%

$

14,581

Equity Securities

110

103

6.8

%

110

Debt Securities Available For Sale (3)

26,481

22,429

18.1

%

24,889

Debt Securities Held To Maturity

2,362

3,616

-34.7

%

2,598

Interest-Bearing Cash

259

113

129.2

%

138

Total Interest & Fee Income

44,276

41,539

6.6

%

42,316

Interest Expense:

Transaction Deposits

93

74

25.7

%

89

Savings Deposits

263

224

17.4

%

250

Time Deposits

110

126

-12.7

%

120

Short-Term Borrowed Funds

18

10

80.0

%

16

Other Borrowed Funds

-

1

-100.0

%

-

Total Interest Expense

484

435

11.3

%

475

Net Interest Income

43,792

41,104

6.5

%

41,841

Provision for Credit Losses

-

-

n/m

-

Noninterest Income:

Service Charges

3,235

3,151

2.6

%

3,304

Merchant Processing Services

3,279

2,277

44.0

%

2,560

Debit Card Fees

1,791

1,459

22.8

%

1,601

Trust Fees

827

714

15.8

%

801

ATM Processing Fees

618

518

19.3

%

601

Other Service Fees

491

420

16.9

%

469

Financial Services Commissions

95

123

-22.8

%

70

Securities Gains

34

71

n/m

-

Other Noninterest Income

662

821

-19.4

%

783

Total Noninterest Income

11,032

9,554

15.5

%

10,189

Noninterest Expense:

Salaries and Benefits

12,097

12,900

-6.2

%

12,665

Occupancy and Equipment

4,808

4,791

0.4

%

4,880

Outsourced Data Processing

2,425

2,324

4.3

%

2,390

Professional Fees

830

643

29.1

%

942

Courier Service

567

508

11.6

%

504

Amortization of Identifiable Intangibles

68

73

-6.8

%

69

Other Noninterest Expense

3,496

3,515

-0.5

%

3,456

Total Noninterest Expense

24,291

24,754

-1.9

%

24,906

Income Before Income Taxes

30,533

25,904

17.9

%

27,124

Income Tax Provision

7,954

6,342

25.4

%

6,977

Net Income

$

22,579

$

19,562

15.4

%

$

20,147

Average Common Shares Outstanding

26,865

26,935

-0.3

%

26,821

Diluted Common Shares Outstanding

26,887

26,951

-0.2

%

26,842

Per Common Share Data:

Basic Earnings

$

0.84

$

0.72

16.7

%

$

0.75

Diluted Earnings

0.84

0.72

16.7

%

0.75

Dividends Paid

0.41

0.41

0.0

%

0.41

%

6/30'21YTD

6/30'20YTD

Change

Interest & Fee Income:

Loans

$

29,645

$

29,087

1.9

%

Equity Securities

220

206

6.9

%

Debt Securities Available For Sale (3)

51,370

43,744

17.4

%

Debt Securities Held To Maturity

4,960

7,524

-34.1

%

Interest-Bearing Cash

397

969

-59.0

%

Total Interest & Fee Income

86,592

81,530

6.2

%

Interest Expense:

Transaction Deposits

182

158

15.2

%

Savings Deposits

513

441

16.2

%

Time Deposits

230

259

-11.3

%

Short-Term Borrowed Funds

34

18

88.9

%

Other Borrowed Funds

-

1

-100.0

%

Total Interest Expense

959

877

9.4

%

Net Interest Income

85,633

80,653

6.2

%

Provision for Credit Losses

-

4,300

n/m

Noninterest Income:

Service Charges

6,539

7,399

-11.6

%

Merchant Processing Services

5,839

4,635

26.0

%

Debit Card Fees

3,392

2,927

15.9

%

Trust Fees

1,628

1,491

9.2

%

ATM Processing Fees

1,219

1,097

11.1

%

Other Service Fees

960

926

3.7

%

Financial Services Commissions

165

248

-33.5

%

Securities Gains

34

71

n/m

Other Operating

1,445

2,408

-40.0

%

Total Noninterest Income

21,221

21,202

0.1

%

Noninterest Expense:

Salaries and Benefits

24,762

25,918

-4.5

%

Occupancy and Equipment

9,688

9,723

-0.4

%

Outsourced Data Processing

4,815

4,729

1.8

%

Professional Fees

1,772

1,032

71.7

%

Courier Service

1,071

999

7.2

%

Amortization of Identifiable Intangibles

137

146

-6.2

%

Other Operating

6,952

6,871

1.2

%

Total Noninterest Expense

49,197

49,418

-0.4

%

Income Before Income Taxes

57,657

48,137

19.8

%

Income Tax Provision

14,931

11,613

28.6

%

Net Income

$

42,726

$

36,524

17.0

%

Average Common Shares Outstanding

26,843

27,001

-0.6

%

Diluted Common Shares Outstanding

26,865

27,024

-0.6

%

Per Common Share Data:

Basic Earnings

$

1.59

$

1.35

17.8

%

Diluted Earnings

1.59

1.35

17.8

%

Dividends Paid

0.82

0.82

0.0

%

Footnotes and Abbreviations:

(1) Effective January 1, 2020, the Company adopted Accounting Standards Update (ASU) 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments ("CECL"), resulting in a period opening adjustment to the allowance for credit losses for loans and held-to-maturity debt securities, other liabilities, deferred tax assets, and shareholders' equity.

(2) The Company adopted ASU 2016-13, effective January 1, 2020. Debt Securities Held To Maturity of $414,413 thousand at June 30, 2021, $469,259 thousand at March 31, 2021 and $638,281 thousand at June 30, 2020 are net of related reserve for expected credit losses of $9 thousand, $9 thousand and $16 thousand, respectively.

(3) Interest income on Debt Securities Available For Sale included make-whole interest income on called corporate bonds of $1.4 million in the second quarter 2021 and $700 thousand in the first quarter 2021.

(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