|Westamerica Bancorporation reports first quarter 2012 earnings|
april 17, 2012
For Immediate Release
San Rafael, CA: Westamerica Bancorporation (NASDAQ: WABC), parent company of Westamerica Bank, today reported net income for the first quarter 2012 of $21.0 million and diluted earnings per common share (“EPS”) of $0.75. First quarter 2012 results compare to fourth quarter 2011 net income of $21.8 million and EPS of $0.77, and to first quarter 2011 net income of $22.4 million and EPS of $0.77. First quarter 2012 net income represented an annualized return on shareholders’ equity of 15.5 percent.
“Westamerica remains highly profitable in spite of the protracted low-interest rate environment. Our first quarter 2012 net interest margin was 5.12 percent, which is supported by a low-cost funding base with 81 percent of our Bank’s deposits represented by checking and savings deposits. Operating expenses remain well contained, declining $600 thousand from the prior quarter. Credit quality improved with nonperforming assets declining $20 million during the first quarter of 2012,” said Chairman, President and CEO David Payne. “Westamerica paid a $0.37 per common share dividend in the first quarter 2012 and our common shares outstanding were reduced 233 thousand shares under our share repurchase plan. Westamerica’s capital ratios remain at historically high levels,” added Payne.
Net interest income on a fully taxable equivalent basis was $51.7 million for the first quarter 2012, compared to $53.4 million for the fourth quarter 2011 and to $55.0 million for the first quarter 2011. The change in net interest income is due to reductions in yields on loans and investment securities, which have declined during this period of low market interest rates. The change in net interest income is also attributable to reduced loan volumes, placing greater reliance on lower-yielding investment securities. Westamerica’s purchased loans declined due to credit administration practices with higher-risk borrowers. Loan originations have been impacted by competitive loan pricing which, in Management’s opinion, does not provide adequate forward earnings potential. To offset the decline in interest income, rates paid on interest-bearing deposits and borrowings have been reduced to minimize interest expense. The first quarter 2012 net interest margin on a fully taxable equivalent basis was 5.12 percent, compared to 5.24 percent and 5.35 percent for the fourth and first quarters of 2011, respectively.
The provision for loan losses was $2.8 million for the first quarter 2012, unchanged from the fourth and first quarters of 2011. First quarter 2012 net loan losses charged against the allowance for loan losses totaled $3.5 million, compared to $3.1 million and $4.1 million for the fourth and first quarters of 2011, respectively. At March 31, 2012, the allowance for loan losses totaled $31.9 million, and nonperforming originated loans totaled $16.7 million. At March 31, 2012, nonperforming purchased FDIC-indemnified loans totaled $7.2 million, net of purchase discounts of $3.6 million, and nonperforming purchased non-indemnified loans totaled $21.0 million, net of purchase discounts of $6.0 million.
Noninterest income for the first quarter 2012 totaled $14.7 million, compared to $14.9 million in the prior quarter and $14.7 million in the first quarter 2011.
Noninterest expense for the first quarter 2012 totaled $30.0 million, compared to $30.7 million in the prior quarter and $31.3 million in the first quarter 2011. The decline in noninterest expenses from the prior quarter was due to lower costs related to managing nonperforming assets and lower occupancy costs, offset in part by higher payroll taxes and other employee benefits. The decline in expenses from the first quarter 2011 was due to lower deposit insurance assessments and lower outsourced data processing costs.
At March 31, 2012, Westamerica Bancorporation’s tangible common equity-to-asset ratio was 8.4 percent, Westamerica Bancorporation’s total regulatory capital ratio was16.1 percent, and Westamerica Bank’s total regulatory capital ratio was 15.6 percent. At March 31, 2012, the Company’s assets totaled $5.1 billion and loans outstanding totaled $2.4 billion. Westamerica Bancorporation, through its wholly owned subsidiary Westamerica Bank, operates commercial banking and trust offices throughout Northern and Central California.
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, 2011 filed on Form 10-K and quarterly report for the quarter ended September 30, 2011 filed on Form 10-Q, describe some of these factors, including certain credit, market, operational, liquidity and interest rate 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.
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