Westamerica Bancorporation Reports Third Quarter 2019 Financial Results

            Public Information October 17, 2019   WESTAMERICA BANCORPORATION       FINANCIAL HIGHLIGHTS         September 30, 2019                     1. Net Income Summary.             (in thousands except per-share amounts)         %       Q3’2019 Q3’2018 Change Q2’2019               Net Interest and Fee Income (FTE) $40,349 $39,498 2.2% $40,330   Provision for Loan Losses – – n/m –   Noninterest Income 11,809 12,528 -5.7% 12,288   Noninterest Expense 24,033 29,366 -18.2% 25,561   Income Before Taxes (FTE) 28,125 22,660 24.1% 27,057   Income Tax Provision (FTE) 7,735 5,667 36.5% 7,432   Net Income $20,390 $16,993 20.0% $19,625               Average Common Shares Outstanding 26,986 26,701 1.1% 26,942   Diluted Average Common Shares 27,027 26,815 0.8% 26,987               Operating Ratios:           Basic Earnings Per Common Share $0.76 $0.64 18.1% $0.73   Diluted Earnings Per Common Share $0.75 0.63 19.8% 0.73   Return On Assets (a) 1.45% 1.19%   1.42%   Return On Common Equity (a) 11.9% 10.6%   11.7%   Net Interest Margin (FTE) (a) 3.11% 3.00%   3.13%   Efficiency Ratio (FTE) 46.1% 56.4%   48.6%               Dividends Paid Per Common Share $0.41 $0.40 2.5% $0.41   Common Dividend Payout Ratio 55% 63%   56%                     %       9/30’19YTD 9/30’18YTD Change                 Net Interest and Fee Income (FTE) $120,925 $115,122 5.0%     Provision for Loan Losses – – n/m     Noninterest Income 35,676 36,252 -1.6%     Noninterest Expense 74,777 81,129 -7.8%     Income Before Taxes (FTE) 81,824 70,245 16.5%     Income Tax Provision (FTE) 22,163 17,736 25.0%     Net Income $59,661 $52,509 13.6%                 Average Common Shares Outstanding 26,924 26,622 1.1%     Diluted Average Common Shares 26,976 26,736 0.9%                 Operating Ratios:           Basic Earnings Per Common Share $2.22 $1.97 12.7%     Diluted Earnings Per Common Share 2.21 1.96 12.8%     Return On Assets (a) 1.43% 1.25%       Return On Common Equity (a) 11.9% 11.2%       Net Interest Margin (FTE) (a) 3.12% 2.95%       Efficiency Ratio (FTE) 47.8% 53.6%                   Dividends Paid Per Common Share $1.22 $1.20 1.7%     Common Dividend Payout Ratio 55% 61%                 2. Net Interest Income.             (dollars in thousands)         %       Q3’2019 Q3’2018 Change Q2’2019               Interest and Fee Income (FTE) $40,804 $40,025 1.9% $40,817   Interest Expense 455 527 -13.7% 487   Net Interest and Fee Income (FTE) $40,349 $39,498 2.2% $40,330               Average Earning Assets $5,176,744 $5,231,257 -1.0% $5,159,112   Average Interest-             Bearing Liabilities 2,586,880 2,733,670 -5.4% 2,646,681               Yield on Earning Assets (FTE) (a) 3.15% 3.04%   3.17%   Cost of Funds (a) 0.04% 0.04%   0.04%   Net Interest Margin (FTE) (a) 3.11% 3.00%   3.13%   Interest Expense/             Interest-Bearing Liabilities (a) 0.07% 0.08%   0.08%   Net Interest Spread (FTE) (a) 3.08% 2.96%   3.09%                     %       9/30’19YTD 9/30’18YTD Change                 Interest and Fee Income (FTE) $122,362 $116,567 5.0%     Interest Expense 1,437 1,445 -0.6%     Net Interest and Fee Income (FTE) $120,925 $115,122 5.0%                 Average Earning Assets $5,173,581 $5,191,664 -0.3%     Average Interest-             Bearing Liabilities 2,640,705 2,732,520 -3.4%                 Yield on Earning Assets (FTE) (a) 3.16% 2.99%       Cost of Funds (a) 0.04% 0.04%       Net Interest Margin (FTE) (a) 3.12% 2.95%       Interest Expense/             Interest-Bearing Liabilities (a) 0.07% 0.07%       Net Interest Spread (FTE) (a) 3.09% 2.92%                 3. Loans & Other Earning Assets.             (average volume, dollars in thousands)         %       Q3’2019 Q3’2018 Change Q2’2019               Total Assets $5,570,843 $5,648,004 -1.4% $5,560,740   Total Earning Assets 5,176,744 5,231,257 -1.0% 5,159,112   Total Loans 1,142,668 1,194,874 -4.4% 1,183,539     Commercial Loans 231,232 288,634 -19.9% 262,804     Commercial RE Loans 579,069 554,081 4.5% 582,126     Consumer Loans 332,367 352,159 -5.6% 338,609   Total Investment Securities 3,687,049 3,591,637 2.7% 3,648,436     Equity Securities 352 1,749 -79.9% 1,772     Debt Securities Available For Sale 2,862,537 2,538,837 12.7% 2,750,093     Debt Securities Held To Maturity 824,160 1,051,051 -21.6% 896,571   Total Interest-Bearing Cash 347,027 444,746 -22.0% 327,137               Loans/Deposits 24.0% 24.4%   24.9%                     %       9/30’19YTD 9/30’18YTD Change                 Total Assets $5,580,965 $5,600,499 -0.3%     Total Earning Assets 5,173,581 5,191,664 -0.3%     Total Loans 1,177,057 1,215,712 -3.2%       Commercial Loans 258,317 300,215 -14.0%       Commercial RE Loans 580,453 553,507 4.9%       Consumer Loans 338,287 361,990 -6.5%     Total Investment Securities 3,675,102 3,538,724 3.9%       Equity Securities 1,285 1,834 -29.9%       Debt Securities Available For Sale 2,782,898 2,442,335 13.9%       Debt Securities Held To Maturity 890,919 1,094,555 -18.6%     Total Interest-Bearing Cash 321,422 437,228 -26.5%                 Loans/Deposits 24.6% 25.0%                 4. Deposits, Other Interest-Bearing Liabilities & Equity.         (average volume, dollars in thousands)         %       Q3’2019 Q3’2018 Change Q2’2019               Total Deposits $4,770,976 $4,893,859 -2.5% $4,762,286     Noninterest Demand 2,234,494 2,223,678 0.5% 2,172,207     Interest-Bearing Transaction 916,180 935,257 -2.0% 945,128     Savings 1,441,282 1,526,100 -5.6% 1,459,287     Time greater than $100K 77,568 90,668 -14.4% 80,120     Time less than $100K 101,452 118,156 -14.1% 105,544   Total Short-Term Borrowings 50,398 63,489 -20.6% 56,602   Shareholders’ Equity 681,513 636,965 7.0% 669,947               Demand Deposits/             Total Deposits 46.8% 45.4%   45.6%   Transaction & Savings             Deposits / Total Deposits 96.2% 95.7%   96.1%                     %       9/30’19YTD 9/30’18YTD Change                 Total Deposits $4,789,084 $4,856,639 -1.4%       Noninterest Demand 2,203,755 2,186,250 0.8%       Interest-Bearing Transaction 935,811 928,479 0.8%       Savings 1,464,037 1,522,414 -3.8%       Time greater than $100K 80,142 97,877 -18.1%       Time less than $100K 105,339 121,619 -13.4%     Total Short-Term Borrowings 55,376 62,131 -10.9%     Shareholders’ Equity 669,043 625,496 7.0%                 Demand Deposits/             Total Deposits 46.0% 45.0%       Transaction & Savings             Deposits / Total Deposits 96.1% 95.5%                 5. Interest Yields Earned & Rates Paid.           (dollars in thousands)       Q3’2019       Average Income/ Yield (a) /       Volume Expense Rate     Interest & Fee Income Earned             Total Earning Assets (FTE) $5,176,744 $40,804 3.15%       Total Loans (FTE) 1,142,668 14,535 5.05%       Commercial Loans (FTE) 231,232 3,102 5.32%       Commercial RE Loans 579,069 7,772 5.32%       Consumer Loans 332,367 3,661 4.37%       Total Investments (FTE) 3,687,049 24,368 2.64%       Total Interest-Bearing Cash 347,027 1,901 2.14%                 Interest Expense Paid             Total Earning Assets 5,176,744 455 0.04%       Total Interest-Bearing Liabilities 2,586,880 455 0.07%       Total Interest-Bearing Deposits 2,536,482 447 0.07%       Interest-Bearing Transaction 916,180 92 0.04%       Savings 1,441,282 210 0.06%       Time less than $100K 101,452 64 0.25%       Time greater than $100K 77,568 81 0.41%       Total Short-Term Borrowings 50,398 8 0.06%                 Net Interest Income and           Margin (FTE)   $40,349 3.11%                   Q3’2018       Average Income/ Yield (a) /       Volume Expense Rate     Interest & Fee Income Earned             Total Earning Assets (FTE) $5,231,257 $40,025 3.04%       Total Loans (FTE) 1,194,874 14,707 4.88%       Commercial Loans (FTE) 288,634 3,675 5.05%       Commercial RE Loans 554,081 7,556 5.41%       Consumer Loans 352,159 3,476 3.92%       Total Investments (FTE) 3,591,637 22,957 2.56%       Total Interest-Bearing Cash 444,746 2,361 1.98%                 Interest Expense Paid             Total Earning Assets 5,231,257 527 0.04%       Total Interest-Bearing Liabilities 2,733,670 527 0.08%       Total Interest-Bearing Deposits 2,670,181 518 0.08%       Interest-Bearing Transaction 935,257 129 0.05%       Savings 1,526,100 229 0.06%       Time less than $100K 118,156 69 0.23%       Time greater than $100K 90,668 91 0.40%       Total Short-Term Borrowings 63,489 9 0.06%                 Net Interest Income and           Margin (FTE)   $39,498 3.00%               6. Noninterest Income.             (dollars in thousands except per-share amounts)         %       Q3’2019 Q3’2018 Change Q2’2019               Service Charges on Deposits $4,510 $4,615 -2.3% $4,493   Merchant Processing Services 2,494 2,464 1.2% 2,657   Debit Card Fees 1,641 1,656 -0.9% 1,641   Other Service Fees 580 665 -12.8% 585   ATM Processing Fees 725 687 5.6% 722   Trust Fees 733 733 0.1% 749   Life Insurance Gains – 585 -100.0% 433   Financial Services Commissions 75 132 -43.2% 93   Equity Securities (Losses) Gains – (16) n/m 26   Other Income 1,051 1,007 4.4% 889   Total Noninterest Income $11,809 $12,528 -5.7% $12,288                 Total Revenue (FTE) $52,158 $52,026 0.3% $52,618     Noninterest Income/Revenue (FTE) 22.6% 24.1%   23.4%     Service Charges/Avg. Deposits (a) 0.38% 0.37%   0.38%     Total Revenues (FTE) Per Avg.           Common Share (a) $7.67 $7.73 -0.8% $7.83                     %       9/30’19YTD 9/30’18YTD Change                 Service Charges on Deposits $13,508 $14,012 -3.6%     Merchant Processing Services 7,708 7,190 7.2%     Debit Card Fees 4,789 4,959 -3.4%     Other Service Fees 1,742 1,946 -10.5%     ATM Processing Fees 2,080 2,049 1.5%     Trust Fees 2,199 2,202 -0.1%     Life Insurance Gains 433 585 -26.0%     Financial Services Commissions 270 387 -30.4%     Equity Securities Gains (Losses) 50 (66) n/m     Other Income 2,897 2,988 -3.0%     Total Noninterest Income $35,676 $36,252 -1.6%                   Total Revenue (FTE) $156,601 $151,374 3.5%       Noninterest Income/Revenue (FTE) 22.8% 23.9%         Service Charges/Avg. Deposits (a) 0.38% 0.39%         Total Revenues (FTE) Per Avg.           Common Share (a) $7.78 $7.60 2.3%               7. Noninterest Expense.             (dollars in thousands)         %       Q3’2019 Q3’2018 Change Q2’2019               Salaries & Benefits $12,559 $13,415 -6.4% $13,090   Occupancy and Equipment 5,199 4,809 8.1% 4,916   Loss Contingency (1) – 3,500 n/m 553   Outsourced Data Processing 2,374 2,292 3.6% 2,367   Amortization of             Identifiable Intangibles 76 451 -83.1% 79   Professional Fees 645 621 3.9% 481   Courier Service 456 448 1.8% 451   Other Operating 2,724 3,830 -28.9% 3,624   Total Noninterest Expense $24,033 $29,366 -18.2% $25,561               Noninterest Expense/             Avg. Earning Assets (a) 1.84% 2.23%   1.99%   Noninterest Expense/Revenues (FTE) 46.1% 56.4%   48.6%                     %       9/30’19YTD 9/30’18YTD Change                 Salaries & Benefits $38,757 $39,952 -3.0%     Occupancy and Equipment 15,163 14,365 5.6%     Outsourced Data Processing 7,110 6,930 2.6%     Loss Contingency (1) 553 3,500 n/m     Amortization of             Identifiable Intangibles 465 1,474 -68.4%     Professional Fees 1,791 2,277 -21.3%     Courier Service 1,349 1,333 1.2%     Other Operating 9,589 11,298 -15.1%     Total Noninterest Expense $74,777 $81,129 -7.8%                 Noninterest Expense/             Avg. Earning Assets (a) 1.93% 2.09%       Noninterest Expense/Revenues (FTE) 47.8% 53.6%                 8. Allowance for Loan Losses.             (dollars in thousands)         %       Q3’2019 Q3’2018 Change Q2’2019               Average Total Loans $1,142,668 $1,194,874 -4.4% $1,183,539               Allowance for Loan Loss (ALL)         Beginning of Period $20,117 $23,040 -12.7% $20,477   Provision for Loan Losses – – n/m –   Net ALL Losses (289) (1,013) n/m (360)   ALL End of Period $19,828 $22,027 -10.0% $20,117   Gross ALL Recoveries /           Gross ALL Losses 72% 31%   63%   Net ALL Losses /           Avg. Total Loans (a) 0.10% 0.34%   0.12%         %       9/30’19YTD 9/30’18YTD Change                 Average Total Loans $1,177,057 $1,215,712 -3.2%                 Allowance for Loan Loss (ALL)         Beginning of Period $21,351 $23,009 -7.2%     Provision for Loan Losses – – n/m     Net ALL Losses (1,523) (982) n/m     ALL End of Period $19,828 $22,027 -10.0%     Gross ALL Recoveries /           Gross ALL Losses 55% 73%       Net ALL Losses /           Avg. Total Loans (a) 0.17% 0.11%                 9. Credit Quality.             (dollars in thousands)         %       9/30/19 9/30/18 Change 6/30/19   Nonperforming Loans:             Nonperforming Nonaccrual $633 $1,611 -60.7% $177     Performing Nonaccrual 3,670 3,870 -5.2% 3,670   Total Nonaccrual Loans 4,303 5,481 -21.5% 3,847   90+ Days Past Due Accruing Loans 351 361 -2.8% 249   Total 4,654 5,842 -20.3% 4,096   Repossessed Loan Collateral 43 620 -93.0% 43    Total Nonperforming Assets $4,697 $6,462 -27.3% $4,139               Total Loans Outstanding $1,133,229 $1,196,955 -5.3% $1,161,712               Total Assets $5,616,055 $5,529,463 1.6% $5,523,448               Loans:           Allowance for Loan Losses $19,828 $22,027 -10.0% $20,117   Allowance/Loans 1.75% 1.84%   1.73%   Nonperforming Loans/Total Loans 0.41% 0.49%   0.35%             10. Capital.             (in thousands, except per-share amounts)         %       9/30/19 9/30/18 Change 6/30/19               Shareholders’ Equity $713,378 $592,591 20.4% $693,437   Total Assets 5,616,055 5,529,463 1.6% 5,523,448   Shareholders’ Equity/             Total Assets 12.70% 10.72%   12.55%   Shareholders’ Equity/             Total Loans 62.95% 49.51%   59.69%   Tangible Common Equity Ratio 10.75% 8.67%   10.56%   Common Shares Outstanding 27,014 26,727 1.1% 26,962   Common Equity Per Share $26.41 $22.17 19.1% $25.72   Market Value Per Common Share $62.18 $60.16 3.4% $61.61               Share Repurchase Programs             (shares in thousands)         %       Q3’2019 Q3’2018 Change Q2’2019               Total Shares Repurchased – – n/m 8     Average Repurchase Price $- $- n/m $61.98   Net Shares Issued (52) (78) n/m (61)                     %       9/30’19YTD 9/30’18YTD Change                 Total Shares Repurchased 8 9 n/m       Average Repurchase Price $61.98 $58.46 n/m     Net Shares Issued (284) (302) n/m               11. Period-End Balance Sheets.             (unaudited, dollars in thousands)         %       9/30/19 9/30/18 Change 6/30/19   Assets:             Cash and Due from Banks $415,639 $522,660 -20.5% $418,586                 Investment Securities:             Equity Securities – 1,734 -100.0% 1,797     Debt Securities Available For Sale 2,983,767 2,478,908 20.4% 2,775,899     Debt Securities Held to Maturity 793,216 1,025,699 -22.7% 867,989                 Loans 1,133,229 1,196,955 -5.3% 1,161,712     Allowance For Loan Losses (19,828) (22,027) -10.0% (20,117)     Total Loans, net 1,113,401 1,174,928 -5.2% 1,141,595                 Other Real Estate Owned 43 620 -93.0% 43     Premises and Equipment, net 34,080 35,391 -3.7% 34,014     Identifiable Intangibles, net 1,464 2,376 -38.4% 1,540     Goodwill 121,673 121,673 0.0% 121,673     Other Assets 152,772 165,474 -7.7% 160,312               Total Assets $5,616,055 $5,529,463 1.6% $5,523,448               Liabilities and Shareholders’ Equity:             Deposits:             Noninterest-Bearing $2,265,640 $2,211,028 2.5% $2,163,841     Interest-Bearing Transaction 910,566 909,954 0.1% 942,140     Savings 1,445,210 1,510,015 -4.3% 1,442,552     Time 175,207 204,840 -14.5% 181,729     Total Deposits 4,796,623 4,835,837 -0.8% 4,730,262                 Short-Term Borrowed Funds 45,646 61,756 -26.1% 54,581     Other Liabilities 60,408 39,279 53.8% 45,168   Total Liabilities 4,902,677 4,936,872 -0.7% 4,830,011               Shareholders’ Equity:             Common Equity:             Paid-In Capital 463,424 449,180 3.2% 460,140     Accumulated Other             Comprehensive Income (Loss) 20,454 (54,066) n/m 13,124     Retained Earnings 229,500 197,477 16.2% 220,173   Total Shareholders’ Equity 713,378 592,591 20.4% 693,437               Total Liabilities and             Shareholders’ Equity $5,616,055 $5,529,463 1.6% $5,523,448             12. Income Statements.             (unaudited, in thousands except per-share amounts)         %       Q3’2019 Q3’2018 Change Q2’2019   Interest & Fee Income:             Loans $14,431 $14,593 -1.1% $14,822     Investment Securities:             Equity Securities 92 85 9.0% 99     Debt Securities Available for Sale 18,736 15,644 19.8% 17,823     Debt Securities Held to Maturity 4,535 5,931 -23.5% 4,924     Interest-Bearing Cash 1,901 2,361 -19.5% 1,958   Total Interest & Fee Income 39,695 38,614 2.8% 39,626               Interest Expense:             Transaction Deposits 92 129 -28.5% 119     Savings Deposits 210 229 -8.4% 212     Time Deposits 145 160 -9.3% 147     Short-Term Borrowed Funds 8 9 -13.7% 9   Total Interest Expense 455 527 -13.7% 487               Net Interest Income 39,240 38,087 3.0% 39,139               Provision for Loan Losses – – n/m –