Westamerica Bancorporation Reports Third Quarter 2017 Financial Results

For Immediate Release

San Rafael, CA: Westamerica Bancorporation (NASDAQ: WABC), parent company of Westamerica Bank, generated net income for the third quarter 2017 of $15.0 million and diluted earnings per common share (“EPS”) of $0.57, compared to second quarter 2017 net income of $15.8 million and EPS of $0.60 and third quarter 2016 net income of $15.6 million and EPS of $0.61. Financial results for both the second quarter 2017 and third quarter 2016 include a reversal of provision for loan losses of $1.9 million and $3.2 million, respectively.

“Third quarter 2017 net income benefited from higher noninterest income and lower noninterest expense. Merchant processing fees and debit card fees have been growing, and we have been successful in further reducing our operating costs. Asset quality remained very high with nonperforming assets totaling only $7.6 million at September 30, 2017,” said Chairman, President and CEO David Payne. “Westamerica generated an annualized 10 percent return on average shareholders’ common equity for the third 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 3.10 percent for the third quarter 2017, compared to 3.12 percent for the second quarter 2017, and 3.21 percent for the third quarter 2016. Net interest income on a fully taxable equivalent basis was $35.7 million for the third quarter 2017, compared to $35.8 million for the second quarter 2017, and $36.2 million for the third quarter 2016. The annualized funding cost of deposits and other interest-bearing borrowings, as a percentage of average earning assets, was 0.04 percent for the third quarter 2017, compared to 0.04 percent for the second quarter 2017 and 0.05 percent for the third 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 third quarter 2017.

The Company recognized no provision for loan losses for the third quarter 2017 given stable nonperforming loan volumes and other credit quality attributes. The Company recognized a reversal of provision for loan losses of $1.9 million for the second quarter 2017 given realization of net recoveries of prior loan losses of $1.1 million and improvements in credit quality. The Company recognized a reversal of provision for loan losses of $3.2 million for the third quarter 2016 given realization of net recoveries of prior loan losses of $649 thousand and significant declines in the volume of nonperforming loans. At September 30, 2017, the allowance for loan losses totaled $23.6 million.

Noninterest income for the third quarter 2017 totaled $12.5 million, compared to $12.1 million for the second quarter 2017 and $11.6 million for the third quarter 2016. The increase in third quarter 2017 noninterest income relative to the prior quarters was primarily due to higher merchant processing fees and debit card fees.

Noninterest expense for the third quarter 2017 totaled $24.1 million, compared to $24.4 million for the second quarter 2017 and $26.1 million for the third quarter 2016. The $2 million reduction in noninterest expense from the third quarter 2016 to the third quarter 2017 was due to reductions in professional fees, limited partnership operating losses, intangible amortization, and correspondent service charges, offset in part by higher outsourced automation and other real estate owned expenses.

At September 30, 2017, Westamerica Bancorporation’s tangible common equity-to-asset ratio was 8.98 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.

Quarterly Financial Highlights 

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 June 30, 2017 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. 

##### 

For additional information contact:

Westamerica Bancorporation
Robert A. Thorson, Senior Vice President and Chief Financial Officer, (707) 863-6840
E-mail: [email protected]

Scroll to Top