SAN RAFAEL, CA: Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the second quarter 2019 of $19.6 million and diluted earnings per common share (“EPS”) of $0.73. These results compare to net income of $19.6 million and EPS of $0.73 for the first quarter 2019 and net income of $18.0 million and EPS of $0.67 for the second quarter 2018.
“Net interest margin remained stable and operating costs continued to be well controlled during the second quarter 2019. Net interest margin was 3.13 percent for the second quarter 2019 compared to 3.12 percent for the first quarter 2019. Operating expenses represented 49 percent of revenues, on a fully-taxable equivalent basis, for both the first and second quarters of 2019. Asset quality improved with nonperforming assets totaling only $4.1 million at June 30, 2019 compared to $4.4 million at March 31, 2019, and $6.0 million at June 30, 2018,” said Chairman, President and CEO David Payne. “Second quarter 2019 results generated an annualized 11.7 percent return on average common equity, and the Board of Directors approved an increase in the quarterly cash dividend to $0.41 per share in April 2019,” concluded Payne.
Net interest income on a fully-taxable equivalent (FTE) basis was $40.3 million for the second quarter 2019, compared to $40.2 million for the first quarter 2019 and $38.3 million for the second quarter 2018. The annualized net interest margin (FTE) was 3.13 percent for the second quarter 2019, compared to 3.12 percent for the first quarter 2019 and 2.97 percent for the second quarter 2018. Checking and savings deposits, which are less sensitive to changes in interest rates than time deposits, represented ninety-six percent of the Company’s average deposit base during the second quarter 2019.
The Company recognized no provision for loan losses for the second quarter 2019 given low levels of nonperforming loans and other credit quality attributes.
Noninterest income for the second quarter 2019 totaled $12.3 million, compared to $11.6 million for the first quarter 2019, and $11.8 million for the second quarter 2018. Second quarter 2019 noninterest income included a life insurance gain of $433 thousand.
Noninterest expense for the second quarter 2019 totaled $25.6 million, compared to $25.2 million for the first quarter 2019 and $25.7 million for the second quarter 2018. Noninterest expense for the second quarter 2019 was $378 thousand higher than noninterest expense for the first quarter 2019, primarily due to $553 thousand in loss contingencies. The loss contingencies include a $301 thousand increase in estimated customer refunds of revenue recognized prior to 2018 and a $252 thousand settlement to dismiss a lawsuit. Although loss contingencies represent estimated liabilities, which are subject to revision, the Company does not anticipate additional losses for either of these matters.
The tax rate for the second quarter 2019 was 27.5 percent on a FTE basis and 24.1 percent on a non-FTE basis. In the second quarter 2019, the Company established a $269 thousand valuation allowance against certain deferred tax assets, which, combined with the tax-exempt nature of the life insurance gains and excess tax benefits of $83 thousand from stock options, increased the tax rate on an FTE and non-FTE basis by 0.3 percent.
Westamerica Bancorporation’s 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, 2018 filed on Form 10-K and quarterly report for the quarter ended September 30, 2018 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, cyber security risks, 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.
For Additional Information Contact:
Robert A. Thorson, Senior Vice President and Chief Financial Officer, (707) 863-6840