SAN RAFAEL, CA: Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the third quarter 2019 of $20.4 million and diluted earnings per common share (“EPS”) of $0.75. These results compare to net income of $19.6 million and EPS of $0.73 for the second quarter 2019 and net income of $17.0 million and EPS of $0.63 for the third quarter 2018.
“The annualized net interest margin was 3.11 percent for the third quarter 2019 compared to 3.13 percent for the second quarter 2019. The valuable composition of our deposit base supported the margin; our annualized funding costs as a percentage of our interest-earning assets remained at just 0.04 percent for the third quarter 2019. Operating expense declined to $24.0 million for the third quarter 2019 compared to $25.6 million for the second quarter 2019 and $29.4 million for the third quarter 2018. Operating costs represented only 46 percent of revenues for the third quarter 2019. Asset quality remained solid with nonperforming assets totaling only 4.7 million at September 30, 2019,” said Chairman, President and CEO David Payne. “Third quarter 2019 results generated an annualized 11.9 percent return on average shareholders’ equity, and the Company paid its shareholders a $0.41 dividend per common share in the third quarter,” concluded Payne.
Net interest income on a fully-taxable equivalent (FTE) basis was $40.3 million for the third quarter 2019, compared to $40.3 million for the second quarter 2019 and $39.5 million for the third quarter 2018. The annualized net interest margin (FTE) was 3.11 percent for the third quarter 2019, compared to 3.13 percent for the second quarter 2019 and 3.00 percent for the third quarter 2018. Checking and savings deposits, which pay much lower interest rates than time deposits, represented ninety-six percent of the Company’s average deposit base during the third quarter 2019.
The Company recognized no provision for loan losses for the third quarter 2019 given low levels of nonperforming loans and other credit quality attributes.
Noninterest income for the third quarter 2019 totaled $11.8 million, compared to $12.3 million for the second quarter 2019, and $12.5 million for the third quarter 2018.
Noninterest expense for the third quarter 2019 totaled $24.0 million, a decline of $1.5 million from the second quarter 2019 due to lower FDIC insurance assessments and employee benefit costs in the third quarter 2019 and a contingency provision recognized in the second quarter 2019. Noninterest expense for the third quarter 2019 was $5.3 million lower than the third quarter 2018 due to a contingency provision recognized in the third quarter 2018 and lower FDIC insurance assessments, employee benefit costs, and intangible amortization in the third quarter 2019. Lower third quarter 2019 FDIC assessments are due to application of Westamerica Bank’s assessment credit described in our December 31, 2018 Form 10-K, Part 1, Item 1, “Premiums for Deposit Insurance.”
The tax rate (FTE) applied to pre-tax income (FTE) was 27.5 percent for the third quarter 2019, compared to 27.5 percent for the second quarter 2019 and 25.0 percent for the third quarter 2018. The higher tax rates in the third and second quarters of 2019 are due to lower levels of tax-exempt interest income and stock compensation tax deductions, and a life insurance gain realized in the third quarter 2018.
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