Thursday, December 1 2022
WESTAMERICA BANCORPORATION
                                         FINANCIAL SUMMARY

                                           For the Three Months             For the Nine Months
                                                            Ended September 30,
                                           2022            2021            2022            2021
                                                   (In thousands, except per share data)
Net Interest and Loan Fee Income
(FTE)(1)                                $    60,780     $    43,952     $   152,620     $   131,034
Provision for Credit Losses                       -               -               -               -
Noninterest Income                           11,818          11,282          34,658          32,503
Noninterest Expense                          24,767          24,697          74,271          73,894
Income Before Income Taxes (FTE)(1)          47,831          30,537         113,007          89,643
Income Tax Provision (FTE)(1)                13,071           8,474          30,317          24,854
Net Income                              $    34,760     $    22,063     $    82,690     $    64,789

Average Common Shares Outstanding            26,906          26,866          26,889          26,851
Average Diluted Common Shares
Outstanding                                  26,916          26,875          26,901          26,868
Common Shares Outstanding at Period
End                                          26,911          26,866

Per Common Share:
Basic Earnings                          $      1.29     $      0.82     $      3.08     $      2.41
Diluted Earnings                               1.29            0.82            3.07            2.41
Book Value                                    20.03           31.19

Financial Ratios:
Return on Assets                               1.85 %          1.22 %          1.49 %          1.25 %
Return on Common Equity                       17.08 %         11.58 %         13.98 %         11.62 %
Net Interest Margin (FTE)(1)                   3.44 %          2.60 %          2.90 %          2.67 %
Net Loan Losses (Recoveries) to
Average Loans                                  0.44 %        (0.05% )          0.30 %          0.00 %
Efficiency Ratio(2)                            34.1 %          44.7 %          39.7 %          45.2 %

Average Balances:
Assets                                  $ 7,472,304     $ 7,158,462     $ 7,433,140     $ 6,939,636
Loans                                       989,033       1,176,114       1,009,314       1,227,971
Investment Securities                     5,552,588       4,615,540       5,172,003       4,484,084
Deposits                                  6,495,051       6,223,500       6,437,943       6,017,175
Shareholders' Equity                        807,428         755,682         790,691         745,382

Period End Balances:
Assets                                  $ 7,177,025     $ 7,403,573
Loans                                       979,033       1,132,472
Investment Securities                     5,312,605       4,958,819
Deposits                                  6,495,256       6,288,961
Shareholders' Equity                        538,988         837,953

Capital Ratios at Period End:
Total Risk Based Capital                      14.67 %         15.54 %
Tangible Equity to Tangible Assets             5.91 %          9.83 %

Dividends paid per common share $0.42 $0.41 $

   1.26     $      1.23
Common Dividend Payout Ratio                     33 %            50 %            41 %            51 %




The above
financial
summary has
been derived
from the
Company's
unaudited
consolidated
financial
statements.
This
information
should be
read in
conjunction
with those
statements,
notes and
the other
information
included
elsewhere
herein.
Percentages
under the
heading
"Financial
Ratios" are
annualized
with the
exception of
the
efficiency
ratio.

(1) Yields
on
securities
and certain
loans have
been
adjusted
upward to a
"fully
taxable
equivalent"
("FTE")
basis in
order to
reflect the
effect
of income
which is
exempt from
federal
income
taxation at
the current
statutory
tax rate.

(2) The
efficiency
ratio is
defined as
noninterest
expense
divided by
total
revenue (net
interest
income on an
FTE basis
and
noninterest
income).






                                      -30-
--------------------------------------------------------------------------------


Financial Overview



Westamerica Bancorporation and subsidiaries (collectively, the "Company")
reported net income of $34.8 million or $1.29 diluted earnings per common share
("EPS") for the third quarter of 2022 and net income of $82.7 million or $3.07
EPS for the nine months ended September 30, 2022. Third quarter 2022 results
included a $923 thousand life insurance gain equivalent to EPS of $0.03. Results
for 2022 compare with net income of $22.1 million or $0.82 EPS for the third
quarter 2021 and net income of $64.8 million or $2.41 EPS for the nine months
ended September 30, 2021. Results for 2021 include "make-whole" interest income
on corporate bonds redeemed prior to maturity of $732 thousand for the third
quarter 2021, which increased EPS $0.02, and $2.8 million for the first nine
months of 2021, which increased EPS $0.07.



In response to the high levels of inflation during a period of tight employment
conditions, the Federal Open Market Committee of the Federal Reserve Board
("FOMC") has tightened monetary policy through reduced bond purchases and
increases to the overnight federal funds interest rate. The FOMC started to
increase the target federal funds rate in March 2022. A September 21, 2022
Federal Reserve press release stated, "Recent indicators point to modest growth
in spending and production. Job gains have been robust in recent months, and the
unemployment rate has remained low. Inflation remains elevated, reflecting
supply and demand imbalances related to the pandemic, higher food and energy
prices, and broader price pressures. Russia's war against Ukraine is causing
tremendous human and economic hardship. The war and related events are creating
additional upward pressure on inflation and weighing on global economic
activity. The Committee is highly attentive to inflation risks." On September
21, 2022, the FOMC increased the target federal funds ranging from 3% to 3.25%
and "anticipates that ongoing increases in the target range will be appropriate"
as it stated in the press release. The FOMC increased the interest rate paid on
reserve balances to 3.15% effective September 22, 2022. On November 2, 2022, the
FOMC announced its decision to increase the target federal funds ranging from
3.75% to 4% and the interest rate paid on reserve balances to 3.90% effective
November 3, 2022. The Bank maintains deposit balances at the Federal Reserve
Bank; the amount that earns interest is identified as "interest-bearing cash".



The Company presents its net interest margin and net interest income on a fully
taxable equivalent ("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 an FTE basis.



The Company's significant accounting policies (see Note 1, "Summary of
Significant Accounting Policies," to Financial Statements in the Company's 2021
Form 10-K and Note 2 "Summary of Significant Accounting Policies" in this Form
10-Q) are fundamental to understanding the Company's results of operations and
financial condition. Certain risks, uncertainties and other factors, including
those discussed in "Risk Factors" in Part I - Item 1A of the Company's Annual
Report on Form 10-K for the year ended December 31, 2021 may cause actual future
results to differ materially from the results discussed in this report on Form
10-Q. Management continues to evaluate the impacts of the COVID-19 pandemic,
inflation, the Federal Reserve's monetary policy, climate changes, the war in
Ukraine on the Company's business and its customers. The extent of the impact on
the Company's results of operations, cash flow liquidity, and financial
performance, as well as the Company's ability to execute near- and long-term
business strategies and initiatives, will depend on numerous evolving factors
and future developments, which are highly uncertain and cannot be reasonably
predicted.



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                                      -31-
--------------------------------------------------------------------------------


Net Income



Following is a summary of the components of net income for the periods
indicated:



                                           For the Three Months             For the Nine Months
                                                            Ended September 30,
                                           2022            2021            2022            2021
                                                   (In thousands, except per share data)
Net interest and loan fee income
(FTE)                                   $    60,780     $    43,952     $   152,620     $   131,034
Provision for credit losses                       -               -               -               -
Noninterest income                           11,818          11,282          34,658          32,503
Noninterest expense                          24,767          24,697          74,271          73,894
Income before taxes (FTE)                    47,831          30,537         113,007          89,643
Income tax provision (FTE)                   13,071           8,474          30,317          24,854
Net income                              $    34,760     $    22,063     $    82,690     $    64,789

Average diluted common shares                26,916          26,875          26,901          26,868
Diluted earnings per common share       $      1.29     $      0.82     $   

3.07 $2.41

Average total assets                    $ 7,472,304     $ 7,158,462     $ 7,433,140     $ 6,939,636
Net income to average total assets
(annualized)                                   1.85 %          1.22 %          1.49 %          1.25 %
Net income to average common
shareholders' equity (annualized)             17.08 %         11.58 %         13.98 %         11.62 %




Net income for the third quarter 2022 increased $12.7 million compared with the
third quarter 2021. Net interest and loan fee income (FTE) increased $16.8
million in the third quarter 2022 compared with the third quarter 2021 due to
higher average balances of investment debt securities and higher yield on
investment debt securities and interest-bearing cash, partially offset by lower
average balances of loans. The provision for credit losses was zero for the
third quarter 2022 and the third quarter 2021, reflecting Management's estimate
of credit losses over the remaining life of its loans and investment debt
securities. Third quarter 2022 noninterest income increased $536 thousand
compared with third quarter 2021. Third quarter 2022 noninterest income included
a $923 thousand life insurance gain. Third quarter 2022 noninterest expense
remained at the same level compared with the third quarter 2021. The tax rate
(FTE) was 27.3% for the third quarter 2022 and 27.8% for the third quarter 2021.



Net income for the nine months ended September 30, 2022 increased $17.9 million
compared with the nine months ended September 30, 2021. Net interest and loan
fee income (FTE) increased $21.6 million in the nine months ended September 30,
2022 compared with the nine months ended September 30, 2021 due to higher
average balances of investment debt securities and higher yield on
interest-earning assets, partially offset by lower average balances of loans.
The provision for credit losses was zero for the nine months ended September 30,
2022 and the nine months ended September 30, 2021, reflecting Management's
estimate of credit losses over the remaining life of its loans and investment
debt securities. Noninterest income in the nine months ended September 30, 2022
increased $2.2 million compared with the nine months ended September 30, 2021
primarily due to a $1.2 million reconciling payment from a payments network, a
$923 thousand life insurance gain and higher fee income on deposit accounts.
Noninterest expense in the nine months ended September 30, 2022 increased $377
thousand primarily due to higher estimated operating losses on limited
partnership investments in low-income housing, partially offset by decreases in
salaries and related benefits resulting from attrition and lower professional
fees. The tax rate (FTE) was 26.8% for the nine months ended September 30, 2022
compared with 27.7% for the nine months ended September 30, 2021.



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                                      -32-
--------------------------------------------------------------------------------

Net interest and loan fee income (ETP)

The following is a summary of the components of net loan interest and fee income (ETP) for the periods indicated:


                                            For the Three Months             For the Nine Months
                                                             Ended September 30,
                                            2022            2021            2022            2021
                                                              ($ in thousands)
Interest and loan fee income             $    60,802     $    43,810     $   152,558     $   130,402
FTE adjustment                                   465             634           1,512           2,083
Interest expense                                 487             492           1,450           1,451

Net loan interest and fee income (ETP) $60,780 $43,952 $

152,620 $131,034

Average earning assets                   $ 7,041,313     $ 6,754,281     $ 7,013,627     $ 6,535,949
Net interest margin (FTE) (annualized)          3.44 %          2.60 %          2.90 %          2.67 %




Net interest and loan fee income (FTE) increased $16.8 million in the third
quarter 2022 compared with the third quarter 2021 due to higher average balances
of investment securities (up $937 million) and higher yield on investment debt
securities (up 0.80%) and interest-bearing cash (up 2.00%), partially offset by
lower average balances of loans (down $187 million).



Net loan interest and fee income (ETP) increased $21.6 million in the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 due to higher average balances of investment securities (increased $688 million) and a higher return on interest-earning assets (up 0.23%), partially offset by lower average loan balances (down $219 million).



The annualized net interest margin (FTE) was 3.44% in the third quarter 2022 and
2.90% in the first nine months of 2022 compared with 2.60% in the third quarter
2021 and 2.67% in the first nine months of 2021.



The Company's funding costs were 0.03% in the third quarter 2022 and 2021 and in
the first nine months of 2022 and 2021. Average balances of time deposits in the
first nine months of 2022 declined $13 million from the first nine months of
2021. Average balances of checking and saving deposits increased $434 million in
the first nine months of 2022 compared with the first nine months of 2021.
Average balances of those checking and saving deposits accounted for 97.8% of
average total deposits in the first nine months of 2022 compared with 97.4% of
average total deposits in the first nine months of 2021.



Net Interest Margin (FTE)


The following table summarizes the components of the Company’s net interest margin (ETP) for the periods indicated (percentages are annualized.)


                                            For the Three Months               For the Nine Months
                                                              Ended September 30,
                                           2022              2021            2022              2021

Yield on earning assets (FTE)                  3.47 %            2.63 %          2.93 %            2.70 %
Rate paid on interest-bearing
liabilities                                    0.05 %            0.06 %          0.05 %            0.06 %
Net interest spread (FTE)                      3.42 %            2.57 %          2.88 %            2.64 %
Impact of noninterest-bearing demand
deposits                                       0.02 %            0.03 %          0.02 %            0.03 %
Net interest margin (FTE)                      3.44 %            2.60 %          2.90 %            2.67 %




The increase in the Company's yield on earning assets has been generated
primarily by collateralized loan obligations (CLOs), held in debt securities
available for sale portfolio, and interest-bearing cash. The CLOs have interest
coupons that change once every three months by the amount of change in the
three-month LIBOR and SOFR base rates. The average balances and yields of CLOs
for the three months and nine months ended September 30, 2022 was $1,601 million
yielding 4.00% and $1,559 million yielding 2.87%, respectively. The average
balances and yields of CLOs for the three months and nine months ended September
30, 2021 was $1,148 million yielding 1.92% and $1,119 million yielding 2.06.%,
respectively. The interest-bearing cash yield changes by the amount of change in
the overnight federal funds rate on the effective date declared by the FOMC. The
average balance and yields of interest-bearing cash for the three months and
nine months ended September 30, 2022 was 0 million yielding 2.15% and $832
million yielding 0.86%, respectively. The average balance and yields of
interest-bearing cash for the three months and nine months ended September 30,
2021 was $963 million yielding 0.15% and $824 million yielding 0.12%,
respectively. The Company has other earning assets with variable yields such as
commercial loans and lines of credit, consumer lines of credit and adjustable
rate residential real estate loans, which are included in "other taxable loans"
in the following "Summary of Average Balances, Yields/Rates and Interest
Differential."



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                                      -33-
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Summary of average balances, yields/rates and interest differential



The following tables present information regarding the consolidated average
assets, liabilities and shareholders' equity, the amounts of interest income
earned from average interest earning assets and the resulting yields, and the
amounts of interest expense incurred on average interest-bearing liabilities and
the resulting rates. Average loan balances include nonperforming loans. Interest
income includes the reversal of previously accrued interest on loans placed on
non-accrual status during the period, proceeds from loans on nonaccrual status
only to the extent cash payments have been received and applied as interest
income, and accretion of purchased loan discounts. Yields, rates and interest
margins are annualized.

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