SAN RAFAEL, Calif., April 20, 2017 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq:WABC), parent company of Westamerica Bank, generated net income for the first quarter 2017 of $15.0 million and diluted earnings per common share ("EPS") of $0.57. First quarter 2017 results reflect the Company’s prospective adoption of a new accounting standard related to the recognition of tax benefits derived from share based compensation; first quarter 2017 EPS measured $0.02 higher than would have been measured under accounting standards applied in 2016. First quarter 2017 results compare to fourth quarter 2016 net income of $14.5 million and EPS of $0.56, and first quarter 2016 net income of $14.2 million and EPS of $0.56.

"Average loan volumes were stable in the first quarter 2017 compared to the prior quarter, and our annualized fully tax equivalent net interest margin was 3.14 percent for the first quarter 2017. Credit quality improved with non-performing assets declining $3 million during the first quarter to total $9 million at March 31, 2017. Our noninterest expenses were $24.6 million in the first quarter 2017, a reduction of $1.3 million compared to the first quarter 2016,” said Chairman, President and CEO David Payne. “Westamerica generated an annualized 10 percent return on shareholders’ common equity for our shareholders in the first quarter 2017, and paid a quarterly dividend of $0.39 per common share,” concluded Payne.

The annualized net interest margin on a fully taxable equivalent basis was 3.14 percent for the first quarter 2017, compared to 3.15 percent for the fourth quarter 2016, and 3.34 percent for the first quarter 2016. Net interest income on a fully taxable equivalent basis was $36.0 million for the first quarter 2017, compared to $36.0 million for the fourth quarter 2016, and $36.4 million for the first quarter 2016. The Company’s average earning assets, loans and investment securities, were $58 million higher in the first quarter 2017 compared to the fourth quarter 2016 due to higher volumes of investment securities. The annualized funding cost of deposits and other interest-bearing borrowings, as a percentage of average earning assets, was 0.04 percent for the first quarter 2017, compared to 0.04 percent for the fourth quarter 2016 and 0.05 percent for the first 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 first quarter 2017.

The provision for loan losses was zero for the first quarter 2017, fourth quarter 2016 and first quarter 2016.

Loan losses, net of loan loss recoveries, were $1.0 million for the first quarter 2017 compared to $405 thousand for the fourth quarter 2016 and $284 thousand for the first quarter 2016; the increase in net loan losses in the first quarter 2017 was due to higher charge-offs of consumer installment loans. At March 31, 2017, the allowance for loan losses totaled $24.9 million.

Noninterest income for the first quarter 2017 totaled $11.7 million, compared $11.5 million for the fourth quarter 2016 and to $11.7 million for the first quarter 2016.

Noninterest expense for the first quarter 2017 totaled $24.6 million, compared to $24.6 million for the fourth quarter 2016 and $25.9 million for the first quarter 2016. The $1.3 million reduction from the first quarter 2016 to the first quarter 2017 was due to reductions in professional fees, courier costs, postage, correspondent service charges, OREO expense, insurance premiums, limited partnership operating losses, and intangible amortization.

The first quarter 2017 income tax provision reflects the prospective adoption of Accounting Standards Update (“ASU”) 2016-09, “Improvements to Employee Share-Based Payment Accounting.” Upon granting non-qualified stock options (“NQSO”), the Company estimates the fair value of the grant and records such value as compensation expense over the attribution period in its financial statements. At the time the NQSO grant is exercised, the ultimate value of the grant is determined and represents taxable income to the grantee and a tax deduction for the Company. The difference between the estimated fair value expensed for financial statement purposes and the realized amount deducted for tax purposes requires a reconciling adjustment to the Company’s tax accounts. Prior to ASU 2016-09, the Company recognized the balancing entry as an adjustment to shareholders’ equity; upon the January 1, 2017 required adoption of ASU 2016-09, the Company must recognize the balancing entry as an adjustment to the provision for income taxes. The Company’s fully-tax equivalent tax rate was 34.8 percent for the first quarter 2017, compared to 37.0 percent for the fourth quarter 2016 and 36.3 percent for the first quarter 2016. The first quarter 2017 fully-tax equivalent tax rate would have been 37.7 percent under accounting rules applied in 2016.

At March 31, 2017, Westamerica Bancorporation's tangible common equity-to-asset ratio was 8.68 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, 2016 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 April 20, 2017  
WESTAMERICA BANCORPORATION   
FINANCIAL HIGHLIGHTS    
March 31, 2017    
      
1. Net Income Summary.    
  (in thousands except per-share amounts)
    % 
  Q1'17Q1'16ChangeQ4'16
      
 Net Interest and Fee Income (FTE)$36,030  $36,447  -1.1%$35,959  
 Provision for Loan Losses   -     -    n/m    -  
 Noninterest Income 11,657   11,729  -0.6% 11,545  
 Noninterest Expense 24,615   25,858  -4.8% 24,577  
 Income Before Taxes (FTE) 23,072   22,318  3.4% 22,927  
 Income Tax Provision (FTE) 8,023   8,092  -0.8% 8,474  
 Net Income$15,049  $14,226  5.8%$14,453  
      
 Average Common Shares Outstanding 26,171   25,445  2.9% 25,773  
 Diluted Average Common Shares 26,329   25,468  3.4% 25,925  
      
 Operating Ratios:    
 Basic Earnings Per Common Share$0.58  $0.56  3.6%$0.56  
 Diluted Earnings Per Common Share 0.57   0.56  1.8% 0.56  
 Return On Assets (a) 1.13% 1.11%  1.07%
 Return On Common Equity (a) 10.5% 10.9%  10.3%
 Net Interest Margin (FTE) (a) 3.14% 3.34%  3.15%
 Efficiency Ratio (FTE) 51.6% 53.7%  51.7%
      
 Dividends Paid Per Common Share$0.39  $0.39  0.0%$0.39  
 Common Dividend Payout Ratio    68% 70%  70%
      
2. Net Interest Income.    
  (dollars in thousands)
    % 
  Q1'17Q1'16ChangeQ4'16
      
 Interest and Fee Income (FTE)$36,510  $36,999  -1.3%$36,459  
 Interest Expense 480   552  -13.0% 500  
 Net Interest and Fee Income (FTE)$36,030  $36,447  -1.1%$35,959  
      
 Average Earning Assets$4,620,001  $4,381,423  5.4%$4,561,619  
 Average Interest-    
   Bearing Liabilities 2,704,472   2,601,408  4.0% 2,681,585  
      
 Yield on Earning Assets (FTE) (a) 3.18% 3.39%  3.19%
 Cost of Funds (a) 0.04% 0.05%  0.04%
 Net Interest Margin (FTE) (a) 3.14% 3.34%  3.15%
 Interest Expense/    
   Interest-Bearing Liabilities (a) 0.07% 0.09%  0.07%
 Net Interest Spread (FTE) (a) 3.11% 3.30%  3.12%
      
3. Loans & Other Earning Assets.    
  (average volume, dollars in thousands)
    % 
  Q1'17Q1'16ChangeQ4'16
      
 Total Assets$5,395,783  $5,174,804  4.3%$5,370,412  
 Total Earning Assets 4,620,001   4,381,423  5.4% 4,561,619  
 Total Loans 1,355,250   1,500,616  -9.7% 1,356,350  
   Commercial Loans 354,896   370,131  -4.1% 349,022  
   Commercial RE Loans  558,485   630,542  -11.4% 546,145  
   Consumer Loans 441,869   499,943  -11.6% 461,183  
 Total Investment Securities 3,264,751   2,880,807  13.3% 3,205,269  
   Available For Sale (Market) 1,941,028   1,567,335  23.8% 1,821,998  
   Held To Maturity 1,323,723   1,313,472  0.8% 1,383,271  
   Unrealized (Loss) Gain (1,676) 23,669  n/m  (5,571)
      
 Loans/Deposits 28.9% 33.1%  28.8%
      
4. Deposits, Other Interest-Bearing Liabilities & Equity.  
  (average volume, dollars in thousands)
    % 
  Q1'17Q1'16ChangeQ4'16
      
 Total Deposits$4,692,746  $4,537,548  3.4%$4,702,129  
   Noninterest Demand  2,056,858   1,993,986  3.2% 2,077,213  
   Interest Bearing Transaction 880,387   872,464  0.9% 871,947  
   Savings 1,501,961   1,387,217  8.3% 1,492,748  
   Time greater than $100K 112,140   123,691  -9.3% 113,781  
   Time less than $100K 141,400   160,190  -11.7% 146,440  
 Total Short-Term Borrowings 68,584   57,846  18.6% 56,669  
 Shareholders' Equity 582,384   527,177  10.5% 558,057  
      
 Demand Deposits/    
   Total Deposits 43.8% 43.9%  44.2%
 Transaction & Savings     
   Deposits / Total Deposits 94.6% 93.7%  94.5%
      
5. Interest Yields Earned & Rates Paid.   
  (dollars in thousands) 
  Q1'17 
  AverageIncome/Yield (a) / 
  VolumeExpenseRate 
      
 Interest & Fee Income Earned    
   Total Earning Assets (FTE)$4,620,001  $36,510  3.18% 
   Total Loans (FTE)   1,355,250   16,069  4.81% 
   Commercial Loans (FTE) 354,896   4,136  4.73% 
   Commercial RE Loans  558,485   8,072  5.86% 
   Consumer Loans 441,869   3,861  3.53% 
   Total Investments (FTE) 3,264,751   20,441  2.50% 
      
 Interest Expense Paid    
   Total Earning Assets  4,620,001   480  0.04% 
   Total Interest-Bearing Liabilities 2,704,472   480  0.07% 
   Total Interest-Bearing Deposits 2,635,888   469  0.07% 
   Interest-Bearing Transaction 880,387   57  0.03% 
   Savings 1,501,961   223  0.06% 
   Time less than $100K 141,400   83  0.24% 
   Time greater than $100K 112,140   106  0.38% 
   Total Short-Term Borrowings  68,584   11  0.06% 
      
 Net Interest Income and     
 Margin (FTE) $36,030  3.14% 
      
  Q1'16 
  AverageIncome/Yield (a) / 
  VolumeExpenseRate 
      
 Interest & Fee Income Earned    
   Total Earning Assets (FTE)$4,381,423  $36,999  3.39% 
   Total Loans (FTE) 1,500,616   18,689  5.01% 
   Commercial Loans (FTE) 370,131   4,541  4.93% 
   Commercial RE Loans  630,542   9,776  6.24% 
   Consumer Loans 499,943   4,372  3.51% 
   Total Investments (FTE) 2,880,807   18,310  2.54% 
      
 Interest Expense Paid    
   Total Earning Assets  4,381,423   552  0.05% 
   Total Interest-Bearing Liabilities 2,601,408   552  0.09% 
   Total Interest-Bearing Deposits 2,543,562   543  0.09% 
   Interest-Bearing Transaction 872,464   70  0.03% 
   Savings 1,387,217   223  0.06% 
   Time less than $100K 160,190   113  0.28% 
   Time greater than $100K 123,691   137  0.44% 
   Total Short-Term Borrowings  57,846   9  0.07% 
      
 Net Interest Income and    
 Margin (FTE) $36,447  3.34% 
      
6. Noninterest Income.    
  (dollars in thousands except per-share amounts)
    % 
  Q1'17Q1'16ChangeQ4'16
      
 Service Charges on Deposits$4,923  $5,248  -6.2%$5,064  
 Merchant Processing Services 1,875   1,529  22.6% 1,678  
 Debit Card Fees 1,481   1,516  -2.3% 1,566  
 Other Service Fees 650   629  3.3% 620  
 ATM Processing Fees 575   658  -12.6% 551  
 Trust Fees 702   661  6.3% 682  
 Financial Services Commissions 195   156  25.0% 157  
 Other Income 1,256   1,332  -5.7% 1,227  
 Total Noninterest Income$11,657  $11,729  -0.6%$11,545  
      
   Total Revenue (FTE)$47,687  $48,176  -1.0%$47,504  
   Noninterest Income/Revenue (FTE) 24.4% 24.3%  24.3%
   Service Charges/Avg. Deposits (a) 0.43% 0.47%  0.43%
   Total Revenues (FTE) Per Avg.     
 Common Share (a)$7.39  $7.61  -3.0%$7.33  
      
7. Noninterest Expense.    
  (dollars in thousands)
    % 
  Q1'17Q1'16ChangeQ4'16
      
 Salaries & Benefits$13,070  $13,117  -0.4%$12,439  
 Occupancy 3,633   3,398  6.9% 3,570  
 Outsourced Data Processing 2,139   2,130  0.4% 2,131  
 Amortization of     
   Identifiable Intangibles 800   905  -11.7% 863  
 Professional Fees 611   732  -16.4% 797  
 Furniture & Equipment 1,254   1,213  3.4% 1,290  
 Other Real Estate Owned (40) 111  n/m  7  
 Courier Service 421   545  -22.8% 494  
 Other Operating 2,727   3,707  -26.4% 2,986  
 Total Noninterest Expense$24,615  $25,858  -4.8%$24,577  
      
 Noninterest Expense/    
   Avg. Earning Assets (a) 2.16% 2.37%  2.14%
 Noninterest Expense/Revenues (FTE) 51.6% 53.7%  51.7%
      
8. Allowance for Loan Losses.    
  (dollars in thousands)
    % 
  Q1'17Q1'16ChangeQ4'16
      
 Average Total Loans$1,355,250  $1,500,616  -9.7%$1,356,350  
      
 Allowance for Loan Loss (ALL)    
 Beginning of Period $25,954  $29,771  -12.8%$26,359  
 Provision for Loan Losses      -     -  n/m    -  
 Net ALL Losses (1,035) (284)264.0% (405)
 ALL End of Period$24,919  $29,487  -15.5%$25,954  
 ALL Recoveries/Gross ALL Losses    44% 87%  66%
      
 Net ALL Losses/Avg. Total Loans (a) 0.31% 0.08%  0.12%
      
9. Credit Quality.    
  (dollars in thousands)
    % 
  3/31/173/31/16Change12/31/16
      
 Nonperforming Loans (1):    
    Nonperforming Nonaccrual$2,382  $15,806  -84.9%$3,956  
    Performing Nonaccrual   4,285     1,921  123.1%   4,429  
  Total Nonaccrual Loans 6,667   17,727  -62.4% 8,385  
  90+ Days Past Due Accruing Loans 373   260  43.5% 497  
  Total 7,040   17,987  -60.9% 8,882  
 Repossessed Loan Collateral (1) 2,136   8,438  -74.7% 3,095  
  Total Nonperforming Assets (1)$9,176  $26,425  -65.3%$11,977  
      
 Total Loans Outstanding $1,351,090  $1,473,196  -8.3%$1,352,711  
      
 Total Assets $5,395,947  $5,199,868  3.8%$5,366,083  
      
 Loans:    
 Allowance for Loan Losses$24,919  $29,487  -15.5%$25,954  
 Allowance/Loans 1.84% 2.00%  1.92%
 Nonperforming Loans/Total Loans 0.52% 1.22%  0.66%
      
10. Capital.    
  (in thousands, except per-share amounts)
    % 
  3/31/173/31/16Change12/31/16
      
 Shareholders' Equity$584,888  $538,973  8.5%$561,367  
 Total Assets 5,395,947   5,199,868  3.8% 5,366,083  
      
 Shareholders' Equity/    
   Total Assets 10.84% 10.37%  10.46%
 Shareholders' Equity/    
   Total Loans 43.29% 36.59%  41.50%
 Tangible Common Equity Ratio 8.68% 8.04%  8.26%
 Common Shares Outstanding 26,283   25,438  3.3% 25,907  
 Common Equity Per Share$22.25  $21.19  5.0%$21.67  
 Market Value Per Common Share$55.83  $48.71  14.6%$62.93  
      
 Share Repurchase Programs    
  (shares in thousands)
    % 
  Q1'17Q1'16ChangeQ4'16
      
 Total Shares Repurchased   -   130  n/m    -  
   Average Repurchase Price$-  $41.53  n/m $-  
 Net Shares (Issued) Repurchased (376) 90  n/m  (242)
      
11. Period-End Balance Sheets.    
  (unaudited, dollars in thousands)
    % 
  3/31/173/31/16Change12/31/16
 Assets:    
   Cash and Due from Banks$546,815  $471,164  16.1%$462,271  
      
   Investment Securities:    
   Available For Sale 1,893,309   1,585,970  19.4% 1,890,758  
   Held to Maturity 1,298,414   1,358,139  -4.4% 1,346,312  
      
   Loans 1,351,090   1,473,196  -8.3% 1,352,711  
   Allowance For Loan Losses (24,919) (29,487)-15.5% (25,954)
   Total Loans, net 1,326,171   1,443,709  -8.1% 1,326,757  
      
   Other Real Estate Owned 2,136   8,438  -74.7% 3,095  
   Premises and Equipment, net 36,025   38,045  -5.3% 36,566  
   Identifiable Intangibles, net 6,127   9,526  -35.7% 6,927  
   Goodwill  121,673   121,673  0.0% 121,673  
   Other Assets 165,277   163,204  1.3% 171,724  
      
 Total Assets$5,395,947  $5,199,868  3.8%$5,366,083  
      
 Liabilities and Shareholders' Equity:    
   Deposits:    
   Noninterest Bearing$2,046,390  $1,989,010  2.9%$2,089,443  
   Interest-Bearing Transaction 905,588   855,008  5.9% 865,701  
   Savings 1,494,854   1,393,919  7.2% 1,493,427  
   Time 251,141   278,813  -9.9% 256,170  
   Total Deposits 4,697,973   4,516,750  4.0% 4,704,741  
      
   Short-Term Borrowed Funds 73,611   52,451  40.3% 59,078  
   Other Liabilities 39,475   91,694  -56.9% 40,897  
 Total Liabilities 4,811,059   4,660,895  3.2% 4,804,716  
      
 Shareholders' Equity:    
   Common Equity:    
   Paid-In Capital 424,203   381,426  11.2% 406,139  
   Accumulated Other    
   Comprehensive Income (9,443) 6,619  n/m  (10,074)
   Retained Earnings 170,128   150,928  12.7% 165,302  
 Total Shareholders' Equity 584,888   538,973  8.5% 561,367  
      
 Total Liabilities and     
   Shareholders' Equity$5,395,947  $5,199,868  3.8%$5,366,083  
      
12. Income Statements.    
  (unaudited, in thousands except per-share amounts)
    % 
  Q1'17Q1'16ChangeQ4'16
 Interest & Fee Income:    
   Loans$15,780  $18,353  -14.0%$16,235  
   Investment Securities:    
   Available for Sale 10,249   7,967  28.6% 9,422  
   Held to Maturity 7,295   7,327  -0.4% 7,552  
 Total Interest & Fee Income 33,324   33,647  -1.0% 33,209  
      
 Interest Expense:    
   Transaction Deposits 57   70  -18.4% 58  
   Savings Deposits 223   223  0.0% 230  
   Time Deposits 189   250  -24.2% 203  
   Short-Term Borrowed Funds 11   9  12.2% 9  
 Total Interest Expense 480   552  -13.0% 500  
      
 Net Interest Income 32,844   33,095  -0.8% 32,709  
      
 Provision for Loan Losses   -     -  n/m    -  
      
 Noninterest Income:    
   Service Charges  4,923   5,248  -6.2% 5,064  
   Merchant Processing Services 1,875   1,529  22.6% 1,678  
   Debit Card Fees 1,481   1,516  -2.3% 1,566  
   Other Service Fees 650   629  3.3% 620  
   ATM Processing Fees 575   658  -12.6% 551  
   Trust Fees 702   661  6.3% 682  
   Financial Services Commissions 195   156  25.0% 157  
   Other 1,256   1,332  -5.7% 1,227  
 Total Noninterest Income 11,657   11,729  -0.6% 11,545  
      
 Noninterest Expense:    
   Salaries and  Benefits 13,070   13,117  -0.4% 12,439  
   Occupancy  3,633   3,398  6.9% 3,570  
   Outsourced Data Processing 2,139   2,130  0.4% 2,131  
   Amortization of Identifiable Intangibles 800   905  -11.7% 863  
   Professional Fees 611   732  -16.4% 797  
   Furniture & Equipment 1,254   1,213  3.4% 1,290  
   Other Real Estate Owned (40) 111  n/m  7  
   Courier Service 421   545  -22.8% 494  
   Other 2,727   3,707  -26.4% 2,986  
 Total Noninterest Expense 24,615   25,858  -4.8% 24,577  
      
 Income Before Income Taxes 19,886   18,966  4.9% 19,677  
 Income Tax Provision 4,837   4,740  2.1% 5,224  
 Net Income$15,049  $14,226  5.8%$14,453  
      
 Average Common Shares Outstanding 26,171   25,445  2.9% 25,773  
 Diluted Common Shares Outstanding 26,329   25,468  3.4% 25,925  
      
 Per Common Share Data:    
   Basic Earnings$0.58  $0.56  3.6%$0.56  
   Diluted Earnings 0.57   0.56  1.8% 0.56  
   Dividends Paid 0.39   0.39  0.0% 0.39  
      
 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. 
  
For additional information contact:
Westamerica Bancorporation
1108 Fifth Avenue, San Rafael, CA 94901
Robert A. Thorson – SVP & Chief Financial Officer
707-863-6840
investments@westamerica.com