SAN RAFAEL, Calif., Jan. 19, 2017 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq:WABC), parent company of Westamerica Bank, generated net income for the fourth quarter 2016 of $14.5 million and diluted earnings per common share ("EPS") of $0.56, compared to net income of $14.6 million and EPS of $0.57 for the fourth quarter 2015, and compared to net income of $15.6 million and EPS of $0.61 for the third quarter 2016. The provision for loan losses was zero in the fourth quarter 2016 and in the fourth quarter 2015, while third quarter 2016 results included a $3.2 million reversal of provision for loan losses due to improved credit quality in the quarter and higher operating expenses for legal expenses related to loan administration and collection efforts.
"Originated loan volumes declined one-half of one percent from September 30, 2016 to December 31, 2016, which represents improved results. Westamerica’s strategy following the 'great recession' has been to minimize interest rate risk by avoiding longer dated loans priced at historically low interest rates, which resulted in declining loan volumes. Our annualized fully tax equivalent net interest margin was 3.15 percent for the fourth quarter 2016; yields on loans and investment securities declined due to low market interest rates. Management has continued to focus on operating cost reductions in light of the market based pressures on our revenue. For the full year 2016, noninterest expenses were 3.4 percent lower than for 2015,” said Chairman, President and CEO David Payne. “Westamerica continued to generate relatively high returns within our industry, realizing a return on shareholders’ common equity of 10.9 percent for 2016. Total 2016 shareholder dividends of $1.56 per common share represent the highest level in the Company’s history,” concluded Payne.
The annualized net interest margin on a fully taxable equivalent basis was 3.15 percent for the fourth quarter 2016, compared to 3.21 percent for the prior quarter, and 3.32 percent for the fourth quarter 2015. Net interest income on a fully taxable equivalent basis was $36.0 million for the fourth quarter 2016, compared to $36.2 million for the prior quarter, and $36.7 million for the fourth quarter 2015. The Company’s loan portfolio declined from the fourth quarter 2015 through the fourth 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 and net interest income. The funding cost of deposits and other interest-bearing borrowings, as a percentage of average loans and investment securities, was 0.04 percent for the fourth quarter 2016, an improvement from 0.05 percent for both the prior quarter and the fourth 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 fourth quarter 2016.
The provision for loan losses was zero for the fourth quarter 2016 and for the fourth quarter 2015; loan losses exceeded loan loss recoveries by $405 thousand for the fourth quarter 2016 and by $265 thousand for the fourth quarter 2015. During the third quarter 2016, loan loss recoveries exceeded loan losses by $649 thousand and nonperforming loans declined $7.1 million, or 51 percent; given the improvement in credit quality, Westamerica recorded a reversal of the provision for loan losses of $3.2 million for the third quarter 2016. At December 31, 2016, the allowance for loan losses totaled $26.0 million.
Noninterest income for the fourth quarter 2016 totaled $11.5 million, compared to $11.6 million for the prior quarter and $11.3 million for the fourth quarter 2015.
Noninterest expense for the fourth quarter 2016 totaled $24.6 million, reduced from $26.1 million for the prior quarter; the decline is attributable to higher third quarter 2016 legal fees related to loan administration and collection efforts as well as fourth quarter 2016 declines in personnel and occupancy costs. Noninterest expense for the fourth quarter 2016 also declined compared to noninterest expense of $25.5 million for the fourth quarter 2015; the decline is attributable to lower other operating expenses including FDIC insurance assessments, correspondent service fees and operating losses on limited partnership investments.
At December 31, 2016, Westamerica Bancorporation's tangible common equity-to-asset ratio was 8.26 percent, and assets totaled $5.4 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 September 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 January 19, 2017 | |||||||||||||
| WESTAMERICA BANCORPORATION | |||||||||||||
| FINANCIAL HIGHLIGHTS | |||||||||||||
| December 31, 2016 | |||||||||||||
| 1. Net Income Summary. | |||||||||||||
| (in thousands except per-share amounts) | |||||||||||||
| % | |||||||||||||
| Q4'16 | Q4'15 | Change | Q3'16 | ||||||||||
| Net Interest and Fee Income (FTE) | $ | 35,959 | $ | 36,734 | -2.1 | % | $ | 36,176 | |||||
| (Reversal of) Provision for Loan Losses | - | - | n/m | (3,200 | ) | ||||||||
| Noninterest Income | 11,545 | 11,305 | 2.1 | % | 11,598 | ||||||||
| Noninterest Expense | 24,577 | 25,504 | -3.6 | % | 26,088 | ||||||||
| Income Before Taxes (FTE) | 22,927 | 22,535 | 1.7 | % | 24,886 | ||||||||
| Income Tax Provision (FTE) | 8,474 | 7,957 | 6.5 | % | 9,258 | ||||||||
| Net Income | $ | 14,453 | $ | 14,578 | -0.9 | % | $ | 15,628 | |||||
| Average Common Shares Outstanding | 25,773 | 25,528 | 1.0 | % | 25,641 | ||||||||
| Diluted Average Common Shares | 25,925 | 25,555 | 1.4 | % | 25,687 | ||||||||
| Operating Ratios: | |||||||||||||
| Basic Earnings Per Common Share | $ | 0.56 | $ | 0.57 | -1.8 | % | $ | 0.61 | |||||
| Diluted Earnings Per Common Share | 0.56 | 0.57 | -1.8 | % | 0.61 | ||||||||
| Return On Assets (a) | 1.07 | % | 1.12 | % | 1.18 | % | |||||||
| Return On Common Equity (a) | 10.3 | % | 11.0 | % | 11.4 | % | |||||||
| Net Interest Margin (FTE) (a) | 3.15 | % | 3.32 | % | 3.21 | % | |||||||
| Efficiency Ratio (FTE) | 51.7 | % | 53.1 | % | 54.6 | % | |||||||
| Dividends Paid Per Common Share | $ | 0.39 | $ | 0.39 | 0.0 | % | $ | 0.39 | |||||
| Common Dividend Payout Ratio | 70 | % | 68 | % | 64 | % | |||||||
| % | |||||||||||||
| 12/31'16YTD | 12/31'15YTD | Change | |||||||||||
| Net Interest and Fee Income (FTE) | $ | 145,077 | $ | 148,258 | -2.1 | % | |||||||
| (Reversal of) Provision for Loan Losses | (3,200 | ) | - | n/m | |||||||||
| Noninterest Income | 46,574 | 47,867 | -2.7 | % | |||||||||
| Noninterest Expense | 101,752 | 105,300 | -3.4 | % | |||||||||
| Income Before Taxes (FTE) | 93,099 | 90,825 | 2.5 | % | |||||||||
| Income Tax Provision (FTE) | 34,246 | 32,072 | 6.8 | % | |||||||||
| Net Income | $ | 58,853 | $ | 58,753 | 0.2 | % | |||||||
| Average Common Shares Outstanding | 25,612 | 25,555 | 0.2 | % | |||||||||
| Diluted Average Common Shares | 25,678 | 25,577 | 0.4 | % | |||||||||
| Operating Ratios: | |||||||||||||
| Basic Earnings Per Common Share | $ | 2.30 | $ | 2.30 | 0.0 | % | |||||||
| Diluted Earnings Per Common Share | 2.29 | 2.30 | -0.4 | % | |||||||||
| Return On Assets | 1.12 | % | 1.16 | % | |||||||||
| Return On Common Equity | 10.9 | % | 11.3 | % | |||||||||
| Net Interest Margin (FTE) | 3.24 | % | 3.36 | % | |||||||||
| Efficiency Ratio (FTE) | 53.1 | % | 53.7 | % | |||||||||
| Dividends Paid Per Common Share | $ | 1.56 | $ | 1.53 | 2.0 | % | |||||||
| Common Dividend Payout Ratio | 68 | % | 67 | % | |||||||||
| 2. Net Interest Income. | |||||||||||||
| (dollars in thousands) | |||||||||||||
| % | |||||||||||||
| Q4'16 | Q4'15 | Change | Q3'16 | ||||||||||
| Interest and Fee Income (FTE) | $ | 36,459 | $ | 37,297 | -2.2 | % | $ | 36,699 | |||||
| Interest Expense | 500 | 563 | -11.2 | % | 523 | ||||||||
| Net Interest and Fee Income (FTE) | $ | 35,959 | $ | 36,734 | -2.1 | % | $ | 36,176 | |||||
| Average Earning Assets | $ | 4,561,619 | $ | 4,411,599 | 3.4 | % | $ | 4,489,317 | |||||
| Average Interest- | |||||||||||||
| Bearing Liabilities | 2,681,585 | 2,554,447 | 5.0 | % | 2,616,357 | ||||||||
| Yield on Earning Assets (FTE) (a) | 3.19 | % | 3.37 | % | 3.26 | % | |||||||
| Cost of Funds (a) | 0.04 | % | 0.05 | % | 0.05 | % | |||||||
| Net Interest Margin (FTE) (a) | 3.15 | % | 3.32 | % | 3.21 | % | |||||||
| Interest Expense/ | |||||||||||||
| Interest-Bearing Liabilities (a) | 0.07 | % | 0.09 | % | 0.08 | % | |||||||
| Net Interest Spread (FTE) (a) | 3.12 | % | 3.28 | % | 3.18 | % | |||||||
| % | |||||||||||||
| 12/31'16YTD | 12/31'15YTD | Change | |||||||||||
| Interest and Fee Income (FTE) | $ | 147,193 | $ | 150,682 | -2.3 | % | |||||||
| Interest Expense | 2,116 | 2,424 | -12.7 | % | |||||||||
| Net Interest and Fee Income (FTE) | $ | 145,077 | $ | 148,258 | -2.1 | % | |||||||
| Average Earning Assets | $ | 4,476,755 | $ | 4,415,724 | 1.4 | % | |||||||
| Average Interest- | |||||||||||||
| Bearing Liabilities | 2,624,688 | 2,544,350 | 3.2 | % | |||||||||
| Yield on Earning Assets (FTE) | 3.29 | % | 3.41 | % | |||||||||
| Cost of Funds | 0.05 | % | 0.05 | % | |||||||||
| Net Interest Margin (FTE) | 3.24 | % | 3.36 | % | |||||||||
| Interest Expense/ | |||||||||||||
| Interest-Bearing Liabilities | 0.08 | % | 0.10 | % | |||||||||
| Net Interest Spread (FTE) | 3.21 | % | 3.31 | % | |||||||||
| 3. Loans & Other Earning Assets. | |||||||||||||
| (average volume, dollars in thousands) | |||||||||||||
| % | |||||||||||||
| Q4'16 | Q4'15 | Change | Q3'16 | ||||||||||
| Total Assets | $ | 5,370,412 | $ | 5,168,805 | 3.9 | % | $ | 5,253,502 | |||||
| Total Earning Assets | 4,561,619 | 4,411,599 | 3.4 | % | 4,489,317 | ||||||||
| Total Loans | 1,356,350 | 1,543,591 | -12.1 | % | 1,386,186 | ||||||||
| Commercial Loans | 349,022 | 371,902 | -6.2 | % | 343,727 | ||||||||
| Commercial RE Loans | 546,145 | 651,991 | -16.2 | % | 572,044 | ||||||||
| Consumer Loans | 461,183 | 519,698 | -11.3 | % | 470,415 | ||||||||
| Total Investment Securities | 3,205,269 | 2,868,008 | 11.8 | % | 3,103,131 | ||||||||
| Available For Sale (Market) | 1,821,998 | 1,589,483 | 14.6 | % | 1,660,680 | ||||||||
| Held To Maturity | 1,383,271 | 1,278,525 | 8.2 | % | 1,442,451 | ||||||||
| Unrealized Gain | (5,571 | ) | 9,624 | n/m | 29,100 | ||||||||
| Loans/Deposits | 28.8 | % | 34.0 | % | 30.2 | % | |||||||
| % | |||||||||||||
| 12/31'16YTD | 12/31'15YTD | Change | |||||||||||
| Total Assets | $ | 5,246,144 | $ | 5,084,000 | 3.2 | % | |||||||
| Total Earning Assets | 4,476,755 | 4,415,724 | 1.4 | % | |||||||||
| Total Loans | 1,424,259 | 1,618,271 | -12.0 | % | |||||||||
| Commercial Loans | 354,831 | 389,050 | -8.8 | % | |||||||||
| Commercial RE Loans | 590,012 | 681,145 | -13.4 | % | |||||||||
| Consumer Loans | 479,416 | 548,076 | -12.5 | % | |||||||||
| Total Investment Securities | 3,052,496 | 2,797,453 | 9.1 | % | |||||||||
| Available For Sale (Market) | 1,651,500 | 1,648,999 | 0.2 | % | |||||||||
| Held To Maturity | 1,400,996 | 1,148,454 | 22.0 | % | |||||||||
| Unrealized Gain | (5,571 | ) | 9,624 | n/m | |||||||||
| Loans/Deposits | 31.0 | % | 36.5 | % | |||||||||
| 4. Deposits, Other Interest-Bearing Liabilities & Equity. | |||||||||||||
| (average volume, dollars in thousands) | |||||||||||||
| % | |||||||||||||
| Q4'16 | Q4'15 | Change | Q3'16 | ||||||||||
| Total Deposits | $ | 4,702,129 | $ | 4,536,256 | 3.7 | % | $ | 4,588,762 | |||||
| Noninterest Demand | 2,077,213 | 2,036,470 | 2.0 | % | 2,041,045 | ||||||||
| Interest Bearing Transaction | 871,947 | 855,320 | 1.9 | % | 850,215 | ||||||||
| Savings | 1,492,748 | 1,351,412 | 10.5 | % | 1,427,247 | ||||||||
| Time greater than $100K | 113,781 | 128,703 | -11.6 | % | 118,113 | ||||||||
| Time less than $100K | 146,440 | 164,351 | -10.9 | % | 152,142 | ||||||||
| Total Short-Term Borrowings | 56,669 | 54,661 | 3.7 | % | 68,640 | ||||||||
| Shareholders' Equity | 558,057 | 525,277 | 6.2 | % | 545,771 | ||||||||
| Demand Deposits/ | |||||||||||||
| Total Deposits | 44.2 | % | 44.9 | % | 44.5 | % | |||||||
| Transaction & Savings | |||||||||||||
| Deposits / Total Deposits | 94.5 | % | 93.5 | % | 94.1 | % | |||||||
| % | |||||||||||||
| 12/31'16YTD | 12/31'15YTD | Change | |||||||||||
| Total Deposits | $ | 4,590,351 | $ | 4,437,619 | 3.4 | % | |||||||
| Noninterest Demand | 2,026,939 | 1,968,817 | 3.0 | % | |||||||||
| Interest Bearing Transaction | 862,581 | 822,156 | 4.9 | % | |||||||||
| Savings | 1,428,059 | 1,312,100 | 8.8 | % | |||||||||
| Time greater than $100K | 118,750 | 161,710 | -26.6 | % | |||||||||
| Time less than $100K | 154,022 | 172,836 | -10.9 | % | |||||||||
| Total Short-Term Borrowings | 61,276 | 75,054 | -18.4 | % | |||||||||
| Federal Home Loan Bank Advances | - | 494 | n/m | ||||||||||
| Shareholders' Equity | 542,301 | 519,126 | 4.5 | % | |||||||||
| Demand Deposits/ | |||||||||||||
| Total Deposits | 44.2 | % | 44.4 | % | |||||||||
| Transaction & Savings | |||||||||||||
| Deposits / Total Deposits | 94.1 | % | 92.5 | % | |||||||||
| 5. Interest Yields Earned & Rates Paid. | |||||||||||||
| (dollars in thousands) | |||||||||||||
| 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 | % | |||||||||
| Q4'15 | |||||||||||||
| Average | Income/ | Yield (a) / | |||||||||||
| Volume | Expense | Rate | |||||||||||
| Interest & Fee Income Earned | |||||||||||||
| Total Earning Assets (FTE) | $ | 4,411,599 | $ | 37,297 | 3.37 | % | |||||||
| Total Loans (FTE) | 1,543,591 | 19,157 | 4.93 | % | |||||||||
| Commercial Loans (FTE) | 371,902 | 4,551 | 4.85 | % | |||||||||
| Commercial RE Loans | 651,991 | 9,807 | 5.97 | % | |||||||||
| Consumer Loans | 519,698 | 4,799 | 3.67 | % | |||||||||
| Total Investments (FTE) | 2,868,008 | 18,140 | 2.53 | % | |||||||||
| Interest Expense Paid | |||||||||||||
| Total Earning Assets | 4,411,599 | 563 | 0.05 | % | |||||||||
| Total Interest-Bearing Liabilities | 2,554,447 | 563 | 0.09 | % | |||||||||
| Total Interest-Bearing Deposits | 2,499,786 | 554 | 0.09 | % | |||||||||
| Interest-Bearing Transaction | 855,320 | 70 | 0.03 | % | |||||||||
| Savings | 1,351,412 | 218 | 0.06 | % | |||||||||
| Time less than $100K | 164,351 | 122 | 0.29 | % | |||||||||
| Time greater than $100K | 128,703 | 144 | 0.44 | % | |||||||||
| Total Short-Term Borrowings | 54,661 | 9 | 0.06 | % | |||||||||
| Net Interest Income and | |||||||||||||
| Margin (FTE) | $ | 36,734 | 3.32 | % | |||||||||
| 6. Noninterest Income. | |||||||||||||
| (dollars in thousands except per-share amounts) | |||||||||||||
| % | |||||||||||||
| Q4'16 | Q4'15 | Change | Q3'16 | ||||||||||
| Service Charges on Deposits | $ | 5,064 | $ | 5,259 | -3.7 | % | $ | 5,303 | |||||
| Merchant Processing Services | 1,678 | 1,368 | 22.7 | % | 1,532 | ||||||||
| Debit Card Fees | 1,566 | 1,557 | 0.6 | % | 1,587 | ||||||||
| Other Service Fees | 620 | 648 | -4.3 | % | 671 | ||||||||
| ATM Processing Fees | 551 | 569 | -3.2 | % | 600 | ||||||||
| Trust Fees | 682 | 671 | 1.7 | % | 686 | ||||||||
| Financial Services Commissions | 157 | 168 | -6.3 | % | 118 | ||||||||
| Other Income | 1,227 | 1,065 | 15.2 | % | 1,101 | ||||||||
| Total Noninterest Income | $ | 11,545 | $ | 11,305 | 2.1 | % | $ | 11,598 | |||||
| Total Revenue (FTE) | $ | 47,504 | $ | 48,039 | -1.1 | % | $ | 47,774 | |||||
| Noninterest Income/Revenue (FTE) | 24.3 | % | 23.5 | % | 24.3 | % | |||||||
| Service Charges/Avg. Deposits (a) | 0.43 | % | 0.46 | % | 0.46 | % | |||||||
| Total Revenues (FTE) Per Avg. | |||||||||||||
| Common Share (a) | $ | 7.33 | $ | 7.47 | -1.8 | % | $ | 7.41 | |||||
| % | |||||||||||||
| 12/31'16YTD | 12/31'15YTD | Change | |||||||||||
| Service Charges on Deposits | $ | 20,854 | $ | 22,241 | -6.2 | % | |||||||
| Merchant Processing Services | 6,377 | 6,339 | 0.6 | % | |||||||||
| Debit Card Fees | 6,290 | 6,084 | 3.4 | % | |||||||||
| Other Service Fees | 2,571 | 2,689 | -4.4 | % | |||||||||
| ATM Processing Fees | 2,411 | 2,397 | 0.6 | % | |||||||||
| Trust Fees | 2,686 | 2,732 | -1.7 | % | |||||||||
| Financial Services Commissions | 568 | 695 | -18.3 | % | |||||||||
| Other Income | 4,817 | 4,690 | 2.7 | % | |||||||||
| Total Noninterest Income | $ | 46,574 | $ | 47,867 | -2.7 | % | |||||||
| Total Revenue (FTE) | $ | 191,651 | $ | 196,125 | -2.3 | % | |||||||
| Noninterest Income/Revenue (FTE) | 24.3 | % | 24.4 | % | |||||||||
| Service Charges/Avg. Deposits | 0.45 | % | 0.50 | % | |||||||||
| Total Revenues (FTE) Per Avg. | |||||||||||||
| Common Share | $ | 7.48 | $ | 7.67 | -2.5 | % | |||||||
| 7. Noninterest Expense. | |||||||||||||
| (dollars in thousands) | |||||||||||||
| % | |||||||||||||
| Q4'16 | Q4'15 | Change | Q3'16 | ||||||||||
| Salaries & Benefits | $ | 12,439 | $ | 12,398 | 0.3 | % | $ | 13,063 | |||||
| Occupancy | 3,570 | 3,761 | -5.1 | % | 3,749 | ||||||||
| Outsourced Data Processing | 2,131 | 2,107 | 1.1 | % | 2,114 | ||||||||
| Amortization of | |||||||||||||
| Identifiable Intangibles | 863 | 948 | -9.0 | % | 867 | ||||||||
| Professional Fees | 797 | 614 | 29.8 | % | 1,693 | ||||||||
| Furniture & Equipment | 1,290 | 1,081 | 19.3 | % | 1,211 | ||||||||
| Other Real Estate Owned | 7 | 53 | n/m | (206 | ) | ||||||||
| Courier Service | 494 | 585 | -15.6 | % | 451 | ||||||||
| Other Operating | 2,986 | 3,957 | -24.5 | % | 3,146 | ||||||||
| Total Noninterest Expense | $ | 24,577 | $ | 25,504 | -3.6 | % | $ | 26,088 | |||||
| Noninterest Expense/ | |||||||||||||
| Avg. Earning Assets (a) | 2.14 | % | 2.29 | % | 2.31 | % | |||||||
| Noninterest Expense/Revenues (FTE) | 51.7 | % | 53.1 | % | 54.6 | % | |||||||
| % | |||||||||||||
| 12/31'16YTD | 12/31'15YTD | Change | |||||||||||
| Salaries & Benefits | $ | 51,507 | $ | 52,192 | -1.3 | % | |||||||
| Occupancy | 14,116 | 14,960 | -5.6 | % | |||||||||
| Outsourced Data Processing | 8,505 | 8,441 | 0.8 | % | |||||||||
| Amortization of | |||||||||||||
| Identifiable Intangibles | 3,504 | 3,856 | -9.1 | % | |||||||||
| Professional Fees | 3,980 | 2,490 | 59.8 | % | |||||||||
| Furniture & Equipment | 4,901 | 4,434 | 10.5 | % | |||||||||
| Other Real Estate Owned | (479 | ) | 504 | n/m | |||||||||
| Courier Service | 1,952 | 2,329 | -16.2 | % | |||||||||
| Other Operating | 13,766 | 16,094 | -14.5 | % | |||||||||
| Total Noninterest Expense | $ | 101,752 | $ | 105,300 | -3.4 | % | |||||||
| Noninterest Expense/ | |||||||||||||
| Avg. Earning Assets | 2.27 | % | 2.38 | % | |||||||||
| Noninterest Expense/Revenues (FTE) | 53.1 | % | 53.7 | % | |||||||||
| 8. Allowance for Loan Losses. | |||||||||||||
| (dollars in thousands) | |||||||||||||
| % | |||||||||||||
| Q4'16 | Q4'15 | Change | Q3'16 | ||||||||||
| Average Total Loans | $ | 1,356,350 | $ | 1,543,591 | -12.1 | % | $ | 1,386,186 | |||||
| Allowance for Loan Loss (ALL) | |||||||||||||
| Beginning of Period | $ | 26,359 | $ | 30,036 | -12.2 | % | $ | 28,910 | |||||
| (Reversal of) Provision for Loan Losses | - | - | n/m | (3,200 | ) | ||||||||
| Net ALL (Losses) Recoveries | (405 | ) | (265 | ) | 52.7 | % | 649 | ||||||
| ALL End of Period | $ | 25,954 | $ | 29,771 | -12.8 | % | $ | 26,359 | |||||
| ALL Recoveries/Gross ALL Losses | 66 | % | 78 | % | 134 | % | |||||||
| Net ALL Losses (Recoveries)/Avg. | |||||||||||||
| Total Loans (a) | 0.12 | % | 0.07 | % | -0.19 | % | |||||||
| % | |||||||||||||
| 12/31'16YTD | 12/31'15YTD | Change | |||||||||||
| Average Total Loans | $ | 1,424,259 | $ | 1,618,271 | -12.0 | % | |||||||
| 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 | (617 | ) | (1,714 | ) | -64.0 | % | |||||||
| ALL End of Period | $ | 25,954 | $ | 29,771 | -12.8 | % | |||||||
| ALL Recoveries/Gross ALL Losses | 91 | % | 67 | % | |||||||||
| Net ALL Losses/Avg. Total Loans | 0.04 | % | 0.11 | % | |||||||||
| 9. Credit Quality. | |||||||||||||
| (dollars in thousands) | |||||||||||||
| % | |||||||||||||
| 12/31/16 | 12/31/15 | Change | 9/30/16 | ||||||||||
| Nonperforming Originated Loans: | |||||||||||||
| Nonperforming Nonaccrual | $ | 1,405 | $ | 6,302 | -77.7 | % | $ | 1,198 | |||||
| Performing Nonaccrual | 4,410 | 350 | n/m | 4,410 | |||||||||
| Total Nonaccrual Loans | 5,815 | 6,652 | -12.6 | % | 5,608 | ||||||||
| 90+ Days Past Due Accruing Loans | 355 | 295 | 20.3 | % | 438 | ||||||||
| Total | 6,170 | 6,947 | -11.2 | % | 6,046 | ||||||||
| Repossessed Originated Loan Collateral | 396 | 5,829 | -93.2 | % | 666 | ||||||||
| Total Nonperforming | |||||||||||||
| Originated Assets | 6,566 | 12,776 | -48.6 | % | 6,712 | ||||||||
| Nonperforming Purchased Covered Loans (1): | |||||||||||||
| Nonperforming Nonaccrual | 858 | - | n/m | 29 | |||||||||
| Performing Nonaccrual | - | - | n/m | - | |||||||||
| Total Nonaccrual Loans | 858 | - | n/m | 29 | |||||||||
| 90+ Days Past Due Accruing Loans | - | - | n/m | - | |||||||||
| Total | 858 | - | n/m | 29 | |||||||||
| Repossessed Purchased Covered | |||||||||||||
| Loan Collateral (1) | - | - | n/m | - | |||||||||
| Total Nonperforming Purchased | |||||||||||||
| Covered Assets (1) | 858 | - | n/m | 29 | |||||||||
| Nonperforming Purchased Non-Covered Loans (2): | |||||||||||||
| Nonperforming Nonaccrual | 1,693 | 8,346 | -79.7 | % | 634 | ||||||||
| Performing Nonaccrual | 19 | - | n/m | 22 | |||||||||
| Total Nonaccrual Loans | 1,712 | 8,346 | -79.5 | % | 656 | ||||||||
| 90+ Days Past Due Accruing Loans | 142 | - | n/m | 49 | |||||||||
| Total | 1,854 | 8,346 | -77.8 | % | 705 | ||||||||
| Repossessed Purchased Non-Covered | |||||||||||||
| Loan Collateral (2) | 2,699 | 3,435 | -21.4 | % | 2,366 | ||||||||
| Total Nonperforming Purchased | |||||||||||||
| Non-Covered Assets (2) | 4,553 | 11,781 | -61.4 | % | 3,071 | ||||||||
| Total Nonperforming Assets | $ | 11,977 | $ | 24,557 | -51.2 | % | $ | 9,812 | |||||
| Total Originated Loans Outstanding | $ | 1,235,559 | $ | 1,351,839 | -8.6 | % | $ | 1,242,224 | |||||
| Total Purchased Covered | |||||||||||||
| Loans Outstanding (1) | 11,027 | 14,061 | -21.6 | % | 11,745 | ||||||||
| Total Purchased Non-Covered | |||||||||||||
| Loans Outstanding (2) | 106,125 | 167,496 | -36.6 | % | 110,360 | ||||||||
| Total Loans Outstanding | $ | 1,352,711 | $ | 1,533,396 | -11.8 | % | $ | 1,364,329 | |||||
| Total Assets | $ | 5,366,083 | $ | 5,168,875 | 3.8 | % | $ | 5,306,778 | |||||
| Loans: | |||||||||||||
| Allowance for Loan Losses | $ | 25,954 | $ | 29,771 | -12.8 | % | $ | 26,359 | |||||
| Allowance/Loans | 1.92 | % | 1.94 | % | 1.93 | % | |||||||
| Nonperforming Loans/Total Loans | 0.66 | % | 1.00 | % | 0.50 | % | |||||||
| Purchased Covered Loans (1): | |||||||||||||
| Fair Value Discount on Purchased | |||||||||||||
| Covered Loans | $ | - | $ | 152 | $ | - | |||||||
| Discount/Purchased Covered | |||||||||||||
| Loans, gross | 0.00 | % | 1.07 | % | 0.00 | % | |||||||
| Nonperforming Purchased Covered Loans/ | |||||||||||||
| Total Purchased Covered Loans | 7.78 | % | 0.00 | % | 0.25 | % | |||||||
| Purchased Non-Covered Loans (2): | |||||||||||||
| Fair Value Discount on Purchased | |||||||||||||
| Non-Covered Loans | $ | 4,058 | $ | 6,432 | $ | 4,922 | |||||||
| Discount/Purchased Non-Covered | 3.68 | % | 3.70 | % | 4.27 | % | |||||||
| Loans, gross | |||||||||||||
| Nonperforming Purchased Non-Covered Loans/ | |||||||||||||
| Total Purchased Non-Covered Loans | 1.75 | % | 4.98 | % | 0.64 | % | |||||||
| 10. Capital. | |||||||||||||
| (in thousands, except per-share amounts) | |||||||||||||
| % | |||||||||||||
| 12/31/16 | 12/31/15 | Change | 9/30/16 | ||||||||||
| Shareholders' Equity | $ | 561,367 | $ | 532,205 | 5.5 | % | $ | 562,996 | |||||
| Total Assets | 5,366,083 | 5,168,875 | 3.8 | % | 5,306,778 | ||||||||
| Shareholders' Equity/ | |||||||||||||
| Total Assets | 10.46 | % | 10.30 | % | 10.61 | % | |||||||
| Shareholders' Equity/ | |||||||||||||
| Total Loans | 41.50 | % | 34.71 | % | 41.27 | % | |||||||
| Tangible Common Equity Ratio | 8.26 | % | 7.94 | % | 8.37 | % | |||||||
| Common Shares Outstanding | 25,907 | 25,528 | 1.5 | % | 25,665 | ||||||||
| Common Equity Per Share | $ | 21.67 | $ | 20.85 | 3.9 | % | $ | 21.94 | |||||
| Market Value Per Common Share | $ | 62.93 | $ | 46.75 | 34.6 | % | $ | 50.88 | |||||
| Share Repurchase Programs | |||||||||||||
| (shares in thousands) | |||||||||||||
| % | |||||||||||||
| Q4'16 | Q4'15 | Change | Q3'16 | ||||||||||
| Total Shares Repurchased | - | 2 | n/m | - | |||||||||
| Average Repurchase Price | $ | - | $ | 43.01 | n/m | $ | - | ||||||
| Net Shares (Issued) Repurchased | (242 | ) | 2 | n/m | (33 | ) | |||||||
| % | |||||||||||||
| 12/31'16YTD | 12/31'15YTD | Change | |||||||||||
| Total Shares Repurchased | 137 | 344 | n/m | ||||||||||
| Average Repurchase Price | $ | 41.94 | $ | 43.90 | n/m | ||||||||
| Net Shares (Issued) Repurchased | (379 | ) | 217 | n/m | |||||||||
| 11. Period-End Balance Sheets. | |||||||||||||
| (unaudited, dollars in thousands) | |||||||||||||
| % | |||||||||||||
| 12/31/16 | 12/31/15 | Change | 9/30/16 | ||||||||||
| Assets: | |||||||||||||
| Cash and Due from Banks | $ | 462,271 | $ | 433,044 | 6.7 | % | $ | 471,367 | |||||
| Investment Securities: | |||||||||||||
| Available For Sale | 1,890,758 | 1,570,216 | 20.4 | % | 1,762,408 | ||||||||
| Held to Maturity | 1,346,312 | 1,316,075 | 2.3 | % | 1,411,019 | ||||||||
| Loans | 1,352,711 | 1,533,396 | -11.8 | % | 1,364,329 | ||||||||
| Allowance For Loan Losses | (25,954 | ) | (29,771 | ) | -12.8 | % | (26,359 | ) | |||||
| Total Loans, net | 1,326,757 | 1,503,625 | -11.8 | % | 1,337,970 | ||||||||
| Other Real Estate Owned | 3,095 | 9,264 | -66.6 | % | 3,032 | ||||||||
| Premises and Equipment, net | 36,566 | 38,693 | -5.5 | % | 37,059 | ||||||||
| Identifiable Intangibles, net | 6,927 | 10,431 | -33.6 | % | 7,789 | ||||||||
| Goodwill | 121,673 | 121,673 | 0.0 | % | 121,673 | ||||||||
| Other Assets | 171,724 | 165,854 | 3.5 | % | 154,461 | ||||||||
| Total Assets | $ | 5,366,083 | $ | 5,168,875 | 3.8 | % | $ | 5,306,778 | |||||
| Liabilities and Shareholders' Equity: | |||||||||||||
| Deposits: | |||||||||||||
| Noninterest Bearing | $ | 2,089,443 | $ | 2,026,049 | 3.1 | % | $ | 2,064,988 | |||||
| Interest-Bearing Transaction | 865,701 | 860,706 | 0.6 | % | 851,885 | ||||||||
| Savings | 1,493,427 | 1,366,936 | 9.3 | % | 1,462,860 | ||||||||
| Time | 256,170 | 286,968 | -10.7 | % | 265,137 | ||||||||
| Total Deposits | 4,704,741 | 4,540,659 | 3.6 | % | 4,644,870 | ||||||||
| Short-Term Borrowed Funds | 59,078 | 53,028 | 11.4 | % | 56,358 | ||||||||
| Other Liabilities | 40,897 | 42,983 | -4.9 | % | 42,554 | ||||||||
| Total Liabilities | 4,804,716 | 4,636,670 | 3.6 | % | 4,743,782 | ||||||||
| Shareholders' Equity: | |||||||||||||
| Common Equity: | |||||||||||||
| Paid-In Capital | 406,139 | 381,436 | 6.5 | % | 393,134 | ||||||||
| Accumulated Other | |||||||||||||
| Comprehensive Income | (10,074 | ) | 675 | n/m | 9,001 | ||||||||
| Retained Earnings | 165,302 | 150,094 | 10.1 | % | 160,861 | ||||||||
| Total Shareholders' Equity | 561,367 | 532,205 | 5.5 | % | 562,996 | ||||||||
| Total Liabilities and | |||||||||||||
| Shareholders' Equity | $ | 5,366,083 | $ | 5,168,875 | 3.8 | % | $ | 5,306,778 | |||||
| 12. Income Statements. | |||||||||||||
| (unaudited, in thousands except per-share amounts) | |||||||||||||
| % | |||||||||||||
| Q4'16 | Q4'15 | Change | Q3'16 | ||||||||||
| Interest & Fee Income: | |||||||||||||
| Loans | $ | 16,235 | $ | 18,798 | -13.6 | % | $ | 16,968 | |||||
| Investment Securities: | |||||||||||||
| Available for Sale | 9,422 | 7,916 | 19.0 | % | 8,796 | ||||||||
| Held to Maturity | 7,552 | 7,174 | 5.3 | % | 7,704 | ||||||||
| Total Interest & Fee Income | 33,209 | 33,888 | -2.0 | % | 33,468 | ||||||||
| Interest Expense: | |||||||||||||
| Transaction Deposits | 58 | 70 | -17.0 | % | 64 | ||||||||
| Savings Deposits | 230 | 218 | 5.7 | % | 229 | ||||||||
| Time Deposits | 203 | 266 | -23.6 | % | 219 | ||||||||
| Short-Term Borrowed Funds | 9 | 9 | -1.7 | % | 11 | ||||||||
| Total Interest Expense | 500 | 563 | -11.2 | % | 523 | ||||||||
| Net Interest Income | 32,709 | 33,325 | -1.8 | % | 32,945 | ||||||||
| (Reversal of) Provision for Loan Losses | - | - | n/m | (3,200 | ) | ||||||||
| Noninterest Income: | |||||||||||||
| Service Charges | 5,064 | 5,259 | -3.7 | % | 5,303 | ||||||||
| Merchant Processing Services | 1,678 | 1,368 | 22.7 | % | 1,532 | ||||||||
| Debit Card Fees | 1,566 | 1,557 | 0.6 | % | 1,587 | ||||||||
| Other Service Fees | 620 | 648 | -4.3 | % | 671 | ||||||||
| ATM Processing Fees | 551 | 569 | -3.2 | % | 600 | ||||||||
| Trust Fees | 682 | 671 | 1.7 | % | 686 | ||||||||
| Financial Services Commissions | 157 | 168 | -6.3 | % | 118 | ||||||||
| Other | 1,227 | 1,065 | 15.2 | % | 1,101 | ||||||||
| Total Noninterest Income | 11,545 | 11,305 | 2.1 | % | 11,598 | ||||||||
| Noninterest Expense: | |||||||||||||
| Salaries and Benefits | 12,439 | 12,398 | 0.3 | % | 13,063 | ||||||||
| Occupancy | 3,570 | 3,761 | -5.1 | % | 3,749 | ||||||||
| Outsourced Data Processing | 2,131 | 2,107 | 1.1 | % | 2,114 | ||||||||
| Amortization of Identifiable Intangibles | 863 | 948 | -9.0 | % | 867 | ||||||||
| Professional Fees | 797 | 614 | 29.8 | % | 1,693 | ||||||||
| Furniture & Equipment | 1,290 | 1,081 | 19.3 | % | 1,211 | ||||||||
| Other Real Estate Owned | 7 | 53 | n/m | (206 | ) | ||||||||
| Courier Service | 494 | 585 | -15.6 | % | 451 | ||||||||
| Other | 2,986 | 3,957 | -24.5 | % | 3,146 | ||||||||
| Total Noninterest Expense | 24,577 | 25,504 | -3.6 | % | 26,088 | ||||||||
| Income Before Income Taxes | 19,677 | 19,126 | 2.9 | % | 21,655 | ||||||||
| Income Tax Provision | 5,224 | 4,548 | 14.9 | % | 6,027 | ||||||||
| Net Income | $ | 14,453 | $ | 14,578 | -0.9 | % | $ | 15,628 | |||||
| Average Common Shares Outstanding | 25,773 | 25,528 | 1.0 | % | 25,641 | ||||||||
| Diluted Common Shares Outstanding | 25,925 | 25,555 | 1.4 | % | 25,687 | ||||||||
| Per Common Share Data: | |||||||||||||
| Basic Earnings | $ | 0.56 | $ | 0.57 | -1.8 | % | $ | 0.61 | |||||
| Diluted Earnings | 0.56 | 0.57 | -1.8 | % | 0.61 | ||||||||
| Dividends Paid | 0.39 | 0.39 | 0.0 | % | 0.39 | ||||||||
| % | |||||||||||||
| 12/31'16YTD | 12/31'15YTD | Change | |||||||||||
| Interest & Fee Income: | |||||||||||||
| Loans | $ | 69,139 | $ | 78,441 | -11.9 | % | |||||||
| Investment Securities: | |||||||||||||
| Available for Sale | 34,276 | 31,263 | 9.6 | % | |||||||||
| Held to Maturity | 30,636 | 26,825 | 14.2 | % | |||||||||
| Total Interest & Fee Income | 134,051 | 136,529 | -1.8 | % | |||||||||
| Interest Expense: | |||||||||||||
| Transaction Deposits | 259 | 260 | -0.4 | % | |||||||||
| Savings Deposits | 907 | 852 | 6.4 | % | |||||||||
| Time Deposits | 911 | 1,258 | -27.6 | % | |||||||||
| Short-Term Borrowed Funds | 39 | 53 | -26.1 | % | |||||||||
| Federal Home Loan Bank Advances | - | 1 | n/m | ||||||||||
| Total Interest Expense | 2,116 | 2,424 | -12.7 | % | |||||||||
| Net Interest Income | 131,935 | 134,105 | -1.6 | % | |||||||||
| (Reversal of) Provision for Loan Losses | (3,200 | ) | - | n/m | |||||||||
| Noninterest Income: | |||||||||||||
| Service Charges | 20,854 | 22,241 | -6.2 | % | |||||||||
| Merchant Processing Services | 6,377 | 6,339 | 0.6 | % | |||||||||
| Debit Card Fees | 6,290 | 6,084 | 3.4 | % | |||||||||
| Other Service Fees | 2,571 | 2,689 | -4.4 | % | |||||||||
| ATM Processing Fees | 2,411 | 2,397 | 0.6 | % | |||||||||
| Trust Fees | 2,686 | 2,732 | -1.7 | % | |||||||||
| Financial Services Commissions | 568 | 695 | -18.3 | % | |||||||||
| Other | 4,817 | 4,690 | 2.7 | % | |||||||||
| Total Noninterest Income | 46,574 | 47,867 | -2.7 | % | |||||||||
| Noninterest Expense: | |||||||||||||
| Salaries and Benefits | 51,507 | 52,192 | -1.3 | % | |||||||||
| Occupancy | 14,116 | 14,960 | -5.6 | % | |||||||||
| Outsourced Data Processing | 8,505 | 8,441 | 0.8 | % | |||||||||
| Amortization of Identifiable Intangibles | 3,504 | 3,856 | -9.1 | % | |||||||||
| Professional Fees | 3,980 | 2,490 | 59.8 | % | |||||||||
| Furniture & Equipment | 4,901 | 4,434 | 10.5 | % | |||||||||
| Other Real Estate Owned | (479 | ) | 504 | n/m | |||||||||
| Courier Service | 1,952 | 2,329 | -16.2 | % | |||||||||
| Other | 13,766 | 16,094 | -14.5 | % | |||||||||
| Total Noninterest Expense | 101,752 | 105,300 | -3.4 | % | |||||||||
| Income Before Income Taxes | 79,957 | 76,672 | 4.3 | % | |||||||||
| Income Tax Provision | 21,104 | 17,919 | 17.8 | % | |||||||||
| Net Income | $ | 58,853 | $ | 58,753 | 0.2 | % | |||||||
| Average Common Shares Outstanding | 25,612 | 25,555 | 0.2 | % | |||||||||
| Diluted Common Shares Outstanding | 25,678 | 25,577 | 0.4 | % | |||||||||
| Per Common Share Data: | |||||||||||||
| Basic Earnings | $ | 2.30 | $ | 2.30 | 0.0 | % | |||||||
| Diluted Earnings | 2.29 | 2.30 | -0.4 | % | |||||||||
| Dividends Paid | 1.56 | 1.53 | 2.0 | % | |||||||||
| 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. | |||||||||||||