SAN RAFAEL, Calif., July 20, 2023 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (NASDAQ:WABC), parent company of Westamerica Bank, generated net income for the second quarter 2023 of $40.2 million and diluted earnings per common share ("EPS") of $1.51, which represents the highest second quarter results in Company history. Second quarter 2023 results compare to net income for first quarter 2023 of $40.5 million and EPS of $1.51; the first quarter 2023 included a $1.6 million reversal of provision for credit losses, which increased EPS $0.04.

"Westamerica's second quarter 2023 results benefited from the Company's valuable low-cost deposit base; the annualized cost of funding our loan and bond portfolios was 0.04 percent in the second quarter 2023, compared to 0.03 percent in the prior quarter. The Company's customer deposits and shareholders' equity fully funded our interest earning assets during the quarter; there was no borrowing from the Federal Reserve Bank or correspondent banks. The second quarter 2023 also benefited from higher yields on variable-rate assets. Operating expenses were well controlled and credit quality remained stable with nonperforming assets of $853 thousand at June 30, 2023," said Chairman, President and CEO David Payne. "Second quarter 2023 results generated an annualized 18.4 percent return on average common equity. Shareholders were paid a $0.42 per common share dividend during the second quarter 2023," concluded Payne.

Net interest income on a fully-taxable equivalent (FTE) basis was $70.3 million for the second quarter 2023, compared to $69.6 million for the first quarter 2023. The annualized yield (FTE) earned on loans, bonds and cash for the second quarter 2023 was 4.38 percent, up from 4.21 percent for the first quarter 2023. The annualized cost of funding the loan and bond portfolios was 0.04 percent for the second quarter 2023 and 0.03 percent for the first quarter 2023. Variable rate assets at June 30, 2023 included $1.5 billion in collateralized loan obligations for which interest rates reset quarterly.

Noninterest income for the second quarter 2023 totaled $10.7 million compared to $10.5 million for the first quarter 2023.

Noninterest expenses for the second quarter 2023 were $25.8 million compared to $26.2 million for the first quarter 2023; the decline in noninterest expenses is primarily due to declines in seasonal payroll taxes and occupancy and equipment expenses.

Westamerica Bancorporation's wholly owned subsidiary Westamerica Bank, operates commercial banking and trust offices throughout Northern and Central California.

Westamerica Bancorporation Web Address: www.westamerica.com

For additional information contact:

Westamerica Bancorporation

1108 Fifth Avenue, San Rafael, CA 94901

Robert A. Thorson – SVP & Chief Financial Officer

707-863-6840

investments@westamerica.com

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, 2022 filed on Form 10-K and quarterly report for the quarter ended March 31, 2023 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 2010, 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.

WESTAMERICA BANCORPORATION

FINANCIAL HIGHLIGHTS

June 30, 2023

1. Net Income Summary.

(in thousands except per-share amounts)

Q2'2023

Q2'2022

Change

Q1'2023

Net Interest and Fee Income (FTE)

70,281

48,033

46.3

69,562

Reversal of Provision for Credit Losses (2)

n/m

(1,550

)

Noninterest Income

10,700

11,264

-5.0

10,549

Noninterest Expense

25,839

24,629

4.9

26,210

Income Before Taxes (FTE)

55,142

34,668

59.1

55,451

Income Tax Provision (FTE)

14,894

9,354

59.2

15,000

Net Income

40,248

25,314

59.0

40,451

Average Common Shares Outstanding

26,648

26,889

-0.9

26,859

Diluted Average Common Shares Outstanding

26,648

26,901

-0.9

26,866

Operating Ratios:

Basic Earnings Per Common Share

1.51

0.94

60.6

1.51

Diluted Earnings Per Common Share

1.51

0.94

60.6

1.51

Return On Assets (a)

2.35

1.37

2.31

Return On Common Equity (a)

18.4

12.9

19.1

Net Interest Margin (FTE) (a)

4.34

2.74

4.18

Efficiency Ratio (FTE)

31.9

41.5

32.7

Dividends Paid Per Common Share

0.42

0.0

0.42

Common Dividend Payout Ratio

6/30'23YTD

6/30'22YTD

Change

Net Interest and Fee Income (FTE)

139,843

91,840

52.3

Reversal of Provision for Credit Losses (2)

(1,550

)

n/m

Noninterest Income (1)

21,249

22,840

-7.0

Noninterest Expense

52,049

49,504

5.1

Income Before Taxes (FTE)

110,593

65,176

69.7

Income Tax Provision (FTE)

29,894

17,246

73.3

Net Income

80,699

47,930

68.4

Average Common Shares Outstanding

26,753

26,880

-0.5

Diluted Average Common Shares Outstanding

26,756

26,893

-0.5

Operating Ratios:

Basic Earnings Per Common Share

3.02

1.78

69.7

Diluted Earnings Per Common Share

3.02

1.78

69.7

Return On Assets (a)

2.33

1.30

Return On Common Equity (a)

18.7

12.4

Net Interest Margin (FTE) (a)

4.26

2.63

Efficiency Ratio (FTE)

32.3

43.2

Dividends Paid Per Common Share

0.84

0.0

Common Dividend Payout Ratio

2. Net Interest Income.

(dollars in thousands)

Q2'2023

Q2'2022

Change

Q1'2023

Interest and Fee Income (FTE)

70,888

48,516

46.1

70,033

Interest Expense

607

483

25.7

471

Net Interest and Fee Income (FTE)

70,281

48,033

46.3

69,562

Average Earning Assets

6,457,270

7,000,862

-7.8

6,665,156

Average Interest- Bearing Liabilities

3,144,264

3,549,140

-11.4

3,287,158

Yield on Earning Assets (FTE) (a)

4.38

2.77

4.21

Cost of Funds (a)

0.04

0.03

Net Interest Margin (FTE) (a)

4.34

2.74

4.18

Interest Expense/

Interest-Bearing Liabilities (a)

0.08

0.05

0.06

Net Interest Spread (FTE) (a)

4.30

2.72

4.15

6/30'23YTD

6/30'22YTD

Change

Interest and Fee Income (FTE)

140,921

92,803

51.8

Interest Expense

1,078

963

11.9

Net Interest and Fee Income (FTE)

139,843

91,840

52.3

Average Earning Assets

6,560,639

6,999,556

-6.3

Average Interest- Bearing Liabilities

3,215,316

3,547,651

-9.4

Yield on Earning Assets (FTE) (a)

4.29

2.66

Cost of Funds (a)

0.03

Net Interest Margin (FTE) (a)

4.26

2.63

Interest Expense/

Interest-Bearing Liabilities (a)

0.07

0.05

Net Interest Spread (FTE) (a)

4.22

2.61

3. Loans & Other Earning Assets.

(average volume, dollars in thousands)

Q2'2023

Q2'2022

Change

Q1'2023

Total Assets

6,865,591

7,420,069

-7.5

7,112,317

Total Earning Assets

6,457,270

7,000,862

-7.8

6,665,156

Total Loans

926,795

1,009,633

-8.2

945,864

Commercial Loans

157,975

202,585

-22.0

165,360

Commercial Real Estate Loans

491,902

508,003

-3.2

493,132

Consumer Loans

276,918

299,045

-7.4

287,372

Total Investment Securities

5,365,377

5,008,929

7.1

5,548,780

Debt Securities Available for Sale

4,460,339

4,721,083

-5.5

4,636,098

Debt Securities Held to Maturity

905,038

287,846

214.4

912,682

Total Interest-Bearing Cash

165,098

982,300

-83.2

170,512

Loans/Deposits

16.0

15.7

15.6

6/30'23YTD

6/30'22YTD

Change

Total Assets

6,988,272

7,413,233

-5.7

Total Earning Assets

6,560,639

6,999,556

-6.3

Total Loans

936,277

1,019,623

-8.2

Commercial Loans

161,647

205,228

-21.2

Commercial Real Estate Loans

492,514

515,977

-4.5

Consumer Loans

282,116

298,418

-5.5

Total Investment Securities

5,456,572

4,978,557

9.6

Debt Securities Available for Sale

4,547,733

4,688,714

-3.0

Debt Securities Held to Maturity

908,839

289,843

213.6

Total Interest-Bearing Cash

167,790

1,001,376

-83.2

Loans/Deposits

15.8

15.9

4. Deposits, Other Interest-Bearing Liabilities & Equity.

(average volume, dollars in thousands)

Q2'2023

Q2'2022

Change

Q1'2023

Total Deposits

5,797,504

6,424,202

-9.8

6,061,923

Noninterest Demand

2,751,319

2,998,360

-8.2

2,851,600

Interest-Bearing Transaction

1,159,653

1,298,665

-10.7

1,233,439

Savings

1,763,410

1,985,325

-11.2

1,847,428

Time greater than $100K

53,901

63,790

-15.5

57,630

Time less than $100K

69,221

78,062

-11.3

71,826

Total Short-Term Borrowings

98,079

123,298

-20.5

76,835

Shareholders' Equity

877,964

788,078

11.4

858,473

Demand Deposits/ Total Deposits

47.5

46.7

47.0

Transaction & Savings Deposits / Total Deposits

97.9

97.8

97.9

6/30'23YTD

6/30'22YTD

Change

Total Deposits

5,928,983

6,408,915

-7.5

Noninterest Demand

2,801,183

3,001,694

-6.7

Interest-Bearing Transaction

1,196,342

1,281,975

-6.7

Savings

1,805,187

1,982,723

-9.0

Time greater than $100K

55,755

63,980

-12.9

Time less than $100K

70,516

78,543

-10.2

Total Short-Term Borrowings

87,516

140,430

-37.7

Shareholders' Equity

868,272

782,184

11.0

Demand Deposits/ Total Deposits

47.2

46.8

Transaction & Savings Deposits / Total Deposits

97.9

97.8

5. Interest Yields Earned & Rates Paid.

(dollars in thousands)

Q2'2023

Average

Income/

Yield (a) /

Volume

Expense

Rate (a)

Interest & Fee Income Earned:

Total Earning Assets (FTE)

6,457,270

70,888

4.38

Total Loans (FTE)

926,795

11,937

5.17

Commercial Loans (FTE)

157,975

2,777

7.05

Commercial Real Estate Loans

491,902

5,732

4.67

Consumer Loans

276,918

3,428

4.97

Total Investments (FTE)

5,365,377

56,841

4.22

Total Debt Securities Available for Sale (FTE)

4,460,339

47,752

4.26

Corporate Securities

2,210,511

15,456

2.80

Collateralized Loan Obligations

1,555,328

26,754

6.81

Agency Mortgage Backed Securities

291,270

1,765

2.42

Securities of U.S. Government sponsored entities

306,983

2,776

3.62

Obligations of States and Political Subdivisions (FTE)

82,074

617

3.00

Other Debt Securities Available for Sale (FTE)

14,173

384

10.84

Total Debt Securities Held to Maturity (FTE)

905,038

9,089

4.02

Agency Mortgage Backed Securities

94,960

510

2.15

Corporate Securities

724,157

7,816

4.32

Obligations of States and Political Subdivisions (FTE)

85,921

763

3.56

Total Interest-Bearing Cash

165,098

2,110

5.06

Interest Expense Paid:

Total Earning Assets

6,457,270

607

0.04

Total Interest-Bearing Liabilities

3,144,264

607

0.08

Total Interest-Bearing Deposits

3,046,185

582

0.08

Interest-Bearing Transaction

1,159,653

104

0.04

Savings

1,763,410

396

0.09

Time less than $100K

69,221

0.30

Time greater than $100K

53,901

0.23

Total Short-Term Borrowings

98,079

0.10

Net Interest Income and

Margin (FTE)

70,281

4.34

Q2'2022

Average

Income/

Yield (a) /

Volume

Expense

Rate (a)

Interest & Fee Income Earned:

Total Earning Assets (FTE)

7,000,862

48,516

2.77

Total Loans (FTE)

1,009,633

12,426

4.94

Commercial Loans (FTE)

202,585

2,716

5.38

Commercial Real Estate Loans

508,003

6,192

4.89

Consumer Loans

299,045

3,518

4.72

Total Investments (FTE)

5,008,929

34,088

2.72

Total Debt Securities Available for Sale (FTE)

4,721,083

32,059

2.72

Corporate Securities

2,589,490

17,857

2.76

Collateralized Loan Obligations

1,610,811

10,572

2.60

Agency Mortgage Backed Securities

357,727

2,049

2.29

Securities OF U.S. Government sponsored entities

59,892

533

3.56

Obligations of States and Political Subdivisions (FTE)

88,829

682

3.07

Other Debt Securities Available for Sale (FTE)

14,334

366

10.23

Total Debt Securities Held to Maturity (FTE)

287,846

2,029

2.82

Agency Mortgage Backed Securities

128,319

595

1.85

Corporate Securities

17,749

202

4.56

Obligations of States and Political Subdivisions (FTE)

141,778

1,232

3.48

Total Interest-Bearing Cash

982,300

2,002

0.81

Interest Expense Paid:

Total Earning Assets

7,000,862

483

0.03

Total Interest-Bearing Liabilities

3,549,140

483

0.05

Total Interest-Bearing Deposits

3,425,842

461

0.05

Interest-Bearing Transaction

1,298,665

0.03

Savings

1,985,325

288

0.06

Time less than $100K

78,062

0.22

Time greater than $100K

63,790

0.25

Total Short-Term Borrowings

123,298

0.07

Net Interest Income and

Margin (FTE)

48,033

2.74

6. Noninterest Income.

(dollars in thousands except per-share amounts)

Q2'2023

Q2'2022

Change

Q1'2023

Service Charges on Deposit Accounts

3,459

3,687

-6.2

3,465

Merchant Processing Services

2,869

3,374

-15.0

2,637

Debit Card Fees

1,759

1,709

2.9

1,642

Trust Fees

810

809

0.1

765

ATM Processing Fees

702

469

49.7

654

Other Service Fees

458

480

-4.6

399

Financial Services Commissions

103

118

-12.7

Securities Losses

(125

)

n/m

Other Noninterest Income

665

618

7.6

898

Total Noninterest Income

10,700

11,264

-5.0

10,549

Operating Ratios:

Total Revenue (FTE)

80,981

59,297

36.6

80,111

Noninterest Income/Revenue (FTE)

13.2

19.0

13.2

Service Charges/Avg. Deposits (a)

0.24

0.23

Total Revenue (FTE) Per Avg.

Common Share (a)

12.19

8.85

37.8

12.10

6/30'23YTD

6/30'22YTD

Change

Service Charges on Deposit Accounts

6,924

7,269

-4.7

Merchant Processing Services

5,506

5,997

-8.2

Debit Card Fees (1)

3,401

4,581

-25.8

Trust Fees

1,575

1,652

-4.7

ATM Processing Fees

1,356

920

47.4

Other Service Fees

857

929

-7.8

Financial Services Commissions

192

235

-18.3

Securities Losses

(125

)

n/m

Other Noninterest Income

1,563

1,257

24.3

Total Noninterest Income

21,249

22,840

-7.0

Operating Ratios:

Total Revenue (FTE)

161,092

114,680

40.5

Noninterest Income/Revenue (FTE)

13.2

19.9

Service Charges/Avg. Deposits (a)

0.24

0.23

Total Revenue (FTE) Per Avg.

Common Share (a)

12.14

8.60

41.1

7. Noninterest Expense.

(dollars in thousands)

Q2'2023

Q2'2022

Change

Q1'2023

Salaries & Benefits

11,828

11,412

3.6

12,067

Occupancy and Equipment

5,012

4,856

3.2

5,485

Outsourced Data Processing

2,488

2,423

2.7

2,444

Limited Partnership Operating Losses

1,440

1,431

0.6

1,434

Professional Fees

485

736

-34.1

476

Courier Service

611

661

-7.6

615

Other Noninterest Expense

3,975

3,110

27.8

3,689

Total Noninterest Expense

25,839

24,629

4.9

26,210

Operating Ratios:

Noninterest Expense/ Avg. Earning Assets (a)

1.60

1.41

1.59

Noninterest Expense/Revenues (FTE)

31.9

41.5

32.7

6/30'23YTD

6/30'22YTD

Change

Salaries & Benefits

23,895

23,332

2.4

Occupancy and Equipment

10,497

9,602

9.3

Outsourced Data Processing

4,932

4,860

1.5

Limited Partnership Operating Losses

2,874

2,862

0.4

Professional Fees

961

1,472

-34.7

Courier Service

1,226

1,243

-1.4

Other Noninterest Expense

7,664

6,133

25.0

Total Noninterest Expense

52,049

49,504

5.1

Operating Ratios:

Noninterest Expense/ Avg. Earning Assets (a)

1.60

1.43

Noninterest Expense/Revenues (FTE)

32.3

43.2

8. Allowance for Credit Losses.

(dollars in thousands)

Q2'2023

Q2'2022

Change

Q1'2023

Average Total Loans

926,795

1,009,633

-8.2

945,864

Beginning of Period Allowance for

Credit Losses on Loans (ACLL)

19,509

22,925

-14.9

20,284

Reversal of Provision for Credit Losses (2)

n/m

(1,550

)

Net ACLL (Losses) Recoveries

(1,029

)

(612

)

68.1

775

End of Period ACLL

18,480

22,313

-17.2

19,509

Gross ACLL Recoveries / Gross ACLL Losses

138

Net ACLL Losses (Recoveries) /

Avg. Total Loans (a)

0.45

0.24

-0.33

6/30'23YTD

6/30'22YTD

Change

Average Total Loans

936,277

1,019,623

-8.2

Beginning of Period ACLL

20,284

23,514

-13.7

Reversal of Provision for Credit Losses (2)

(1,550

)

n/m

Net ACLL Losses

(254

)

(1,201

)

-78.9

End of Period ACLL

18,480

22,313

-17.2

Gross ACLL Recoveries / Gross ACLL Losses

Net ACLL Losses / Avg. Total Loans (a)

0.05

0.24

(dollars in thousands)

6/30/23

6/30/22

Change

3/31/23

Allowance for Credit Losses on Loans

18,480

22,313

-17.2

19,509

Allowance for Credit Losses on

Held to Maturity Securities

-85.5

Total Allowance for Credit Losses

18,481

22,320

-17.2

19,510

Allowance for Unfunded

Credit Commitments

201

0.0

201

9. Credit Quality.

(dollars in thousands)

6/30/23

6/30/22

Change

3/31/23

Nonperforming Loans:

Nonperforming Nonaccrual Loans

192

n/m

207

Performing Nonaccrual Loans

235

-97.9

Total Nonaccrual Loans

197

247

-20.2

214

90+ Days Past Due Accruing Loans

656

614

6.8

571

Total Nonperforming Loans

853

861

-0.9

785

Total Loans Outstanding

919,583

999,768

-8.0

938,628

Total Assets

6,582,740

7,222,405

-8.9

6,700,471

Loans:

Allowance for Credit Losses on Loans

18,480

22,313

-17.2

19,509

Allowance for Credit Losses on Loans / Loans

2.01

2.23

2.08

Nonperforming Loans/Total Loans

0.09

0.08

10. Liquidity.

At June 30, 2023, the Company had $266,187 thousand in cash balances. During the twelve months ending June 30, 2024, the Company expects to receive $288,000 thousand in principal payments from its debt securities. If additional operational liquidity is required, the Company can pledge debt securities as collateral for borrowing purposes; at June 30, 2023, the Company's debt securities which qualify as collateral for borrowing totaled $3,924,826 thousand. In the ordinary course of business, the Company pledges debt securities as collateral for certain depository customers; at June 30, 2023, the Company had pledged $704,822 thousand in debt securities for depository customers. In the ordinary course of business, the Company pledges debt securities as collateral for borrowing from the Federal Reserve Bank; at June 30, 2023, the Company's had pledged $1,000,132 thousand in debt securities at the Federal Reserve Bank. During the six months ended June 30, 2023, the Company's average borrowings from the Federal Reserve Bank and other correspondent banks were $-0- thousand, and at June 30, 2023, the Company's borrowings from the Federal Reserve Bank and other correspondent banks were $-0- thousand. At June 30, 2023, the Company's estimated unpledged collateral qualifying debt securities totaled $2,072,988 thousand. Debt securities eligible as collateral are shown in market value unless otherwise noted.

(in thousands)

6/30/23

Debt Securities Eligible as Collateral:

Corporate Securities

2,587,771

Collateralized Loan Obligations rated AAA

503,037

Obligations of States and Political Subdivisions

162,528

Agency Mortgage Backed Securities

344,657

Securities of U.S. Government Sponsored Entities (Par Value)

326,833

Total Debt Securities Eligible as Collateral

3,924,826

Debt Securities Pledged as Collateral:

Deposits by Public Entities

704,822

)

Short-Term Borrowed Funds (Deposit Sweep)

(140,765

)

Other

(6,119

)

Total Debt Securities Pledged as Collateral

851,706

)

Debt Securities Pledged at the Federal Reserve Bank

1,000,132

)

Estimated Debt Securities Available to Pledge

2,072,988

11. Capital.

(in thousands, except per-share amounts)

6/30/23

6/30/22

Change

3/31/23

Shareholders' Equity

651,862

617,126

5.6

642,925

Total Assets

6,582,740

7,222,405

-8.9

6,700,471

Shareholders' Equity/

Total Assets

9.90

8.54

9.60

Shareholders' Equity/

Total Loans

70.89

61.73

68.50

Tangible Common Equity Ratio

8.20

6.97

7.92

Common Shares Outstanding

26,648

26,896

-0.9

26,648

Common Equity Per Share

24.46

22.94

6.6

24.13

Market Value Per Common Share

38.30

55.66

-31.2

44.30

(shares in thousands)

Q2'2023

Q2'2022

Change

Q1'2023

Share Repurchase Programs:

Total Shares Repurchased / Canceled

n/m

274

Average Repurchase Price

n/m

50.11

Net Shares (Issued) Repurchased

(13

)

n/m

265

6/30'23YTD

6/30'22YTD

Change

Total Shares Repurchased

274

n/m

Average Repurchase Price

50.11

58.66

n/m

Net Shares Repurchased (Issued)

265

(30

)

n/m

12. Period-End Balance Sheets.

(unaudited, dollars in thousands)

6/30/23

6/30/22

Change

3/31/23

Assets:

Cash and Due from Banks

266,187

753,293

-64.7

195,202

Debt Securities Available for Sale

Corporate Securities

1,901,504

2,296,853

-17.2

2,019,240

Collateralized Loan Obligations

1,514,962

1,601,333

-5.4

1,542,377

Agency Mortgage Backed Securities

259,190

331,425

-21.8

276,078

Securities of U.S. Government sponsored entities

291,402

290,725

0.2

297,140

Obligations of States and Political Subdivisions

79,400

86,676

-8.4

82,678

Other Debt Securities Available for Sale

102

n/m

Total Debt Securities Available for Sale

4,046,458

4,607,114

-12.2

4,217,513

Debt Securities Held to Maturity

Agency Mortgage Backed Securities

91,141

121,810

-25.2

98,006

Corporate Securities

725,252

181,316

300.0

723,553

Obligations of States and Political Subdivisions (3)

83,963

139,228

-39.7

87,760

Total Debt Securities Held to Maturity (3)

900,356

442,354

103.5

909,319

Loans

919,583

999,768

-8.0

938,628

Allowance For Credit Losses on Loans

(18,480

)

(22,313

)

-17.2

(19,509

)

Total Loans, net

901,103

977,455

-7.8

919,119

Premises and Equipment, net

27,908

30,309

-7.9

28,331

Identifiable Intangibles, net

463

707

-34.5

523

Goodwill

121,673

0.0

121,673

Other Assets

318,592

289,500

10.0

308,791

Total Assets

6,582,740

7,222,405

-8.9

6,700,471

Liabilities and Shareholders' Equity:

Deposits:

Noninterest-Bearing

2,721,046

2,987,725

-8.9

2,788,992

Interest-Bearing Transaction

1,133,006

1,303,700

-13.1

1,201,356

Savings

1,735,083

1,983,713

-12.5

1,783,667

Time

116,792

140,453

-16.8

125,300

Total Deposits

5,705,927

6,415,591

-11.1

5,899,315

Short-Term Borrowed Funds

138,005

118,167

16.8

83,088

Other Liabilities

86,946

71,521

21.6

75,143

Total Liabilities

5,930,878

6,605,279

-10.2

6,057,546

Shareholders' Equity:

Common Equity:

Paid-In Capital

471,510

473,555

-0.4

471,159

Accumulated Other

Comprehensive Loss

(252,043

)

(188,025

)

34.0

(231,573

)

Retained Earnings

432,395

331,596

30.4

403,339

Total Shareholders' Equity

651,862

617,126

5.6

642,925

Total Liabilities and

Shareholders' Equity

6,582,740

7,222,405

-8.9

6,700,471

13. Income Statements.

(unaudited, in thousands except per-share amounts)

Q2'2023

Q2'2022

Change

Q1'2023

Interest & Fee Income:

Loans

11,845

12,331

-3.9

11,740

Equity Securities

152

129

17.8

152

Debt Securities Available for Sale

47,452

31,764

49.4

46,810

Debt Securities Held to Maturity

8,930

1,771

404.3

8,980

Interest-Bearing Cash

2,110

2,002

5.4

1,942

Total Interest & Fee Income

70,489

47,997

46.9

69,624

Interest Expense:

Transaction Deposits

104

14.3

Savings Deposits

396

288

37.5

280

Time Deposits

0.0

Short-Term Borrowed Funds

13.6

Total Interest Expense

607

483

25.7

471

Net Interest Income

69,882

47,514

47.1

69,153

Reversal of Provision for Credit Losses (2)

n/m

(1,550

)

Noninterest Income:

Service Charges on Deposit Accounts

3,459

3,687

-6.2

3,465

Merchant Processing Services

2,869

3,374

-15.0

2,637

Debit Card Fees

1,759

1,709

2.9

1,642

Trust Fees

810

809

0.1

765

ATM Processing Fees

702

469

49.7

654

Other Service Fees

458

480

-4.6

399

Financial Services Commissions

103

118

-12.7

Securities Losses

(125

)

n/m

Other Noninterest Income

665

618

7.6

898

Total Noninterest Income

10,700

11,264

-5.0

10,549

Noninterest Expense:

Salaries and Related Benefits

11,828

11,412

3.6

12,067

Occupancy and Equipment

5,012

4,856

3.2

5,485

Outsourced Data Processing

2,488

2,423

2.7

2,444

Limited Partnership Operating Losses

1,440

1,431

0.6

1,434

Professional Fees

485

736

-34.1

476

Courier Service

611

661

-7.6

615

Other Noninterest Expense

3,975

3,110

27.8

3,689

Total Noninterest Expense

25,839

24,629

4.9

26,210

Income Before Income Taxes

54,743

34,149

60.3

55,042

Income Tax Provision

14,495

8,835

64.1

14,591

Net Income

40,248

25,314

59.0

40,451

Average Common Shares Outstanding

26,648

26,889

-0.9

26,859

Diluted Average Common Shares Outstanding

26,648

26,901

-0.9

26,866

Per Common Share Data:

Basic Earnings

1.51

0.94

60.6

1.51

Diluted Earnings

1.51

0.94

60.6

1.51

Dividends Paid

0.42

0.0

0.42

6/30'23YTD

6/30'22YTD

Change

Interest & Fee Income:

Loans

23,585

25,273

-6.7

Equity Securities

304

257

18.3

Debt Securities Available for Sale

94,262

60,330

56.2

Debt Securities Held to Maturity

17,910

3,415

424.5

Interest-Bearing Cash

4,052

2,481

63.3

Total Interest & Fee Income

140,113

91,756

52.7

Interest Expense:

Transaction Deposits

198

179

10.6

Savings Deposits

676

571

18.4

Time Deposits

166

163

1.8

Short-Term Borrowed Funds

-24.0

Total Interest Expense

1,078

963

11.9

Net Interest Income

139,035

90,793

53.1

Reversal of Provision for Credit Losses (2)

(1,550

)

n/m

Noninterest Income:

Service Charges on Deposit Accounts

6,924

7,269

-4.7

Merchant Processing Services

5,506

5,997

-8.2

Debit Card Fees (1)

3,401

4,581

-25.8

Trust Fees

1,575

1,652

-4.7

ATM Processing Fees

1,356

920

47.4

Other Service Fees

857

929

-7.8

Financial Services Commissions

192

235

-18.3

Securities Losses

(125

)

n/m

Other Operating

1,563

1,257

24.3

Total Noninterest Income

21,249

22,840

-7.0

Noninterest Expense:

Salaries and Related Benefits

23,895

23,332

2.4

Occupancy and Equipment

10,497

9,602

9.3

Outsourced Data Processing

4,932

4,860

1.5

Limited Partnership Operating Losses

2,874

2,862

0.4

Professional Fees

961

1,472

-34.7

Courier Service

1,226

1,243

-1.4

Other Operating

7,664

6,133

25.0

Total Noninterest Expense

52,049

49,504

5.1

Income Before Income Taxes

109,785

64,129

71.2

Income Tax Provision

29,086

16,199

79.6

Net Income

80,699

47,930

68.4

Average Common Shares Outstanding

26,753

26,880

-0.5

Diluted Average Common Shares Outstanding

26,756

26,893

-0.5

Per Common Share Data:

Basic Earnings

3.02

1.78

69.7

Diluted Earnings

3.02

1.78

69.7

Dividends Paid

0.84

0.0

Footnotes and Abbreviations:

(1) The Company received a $1.2 million reconciling payment from a payments network in the first quarter 2022.

(2) A recovery of a previously charged off loan in the first quarter 2023 resulted in a $1,550 thousand reversal of the allowance for credit loss provision in the first quarter 2023.

(3) Debt Securities Held To Maturity and Obligations of States and Political Subdivisions are net of related reserve for expected credit losses of $1 thousand at June 30, 2023, March 31, 2023 and $7 thousand at June 30, 2022.

(FTE) Fully Taxable Equivalent. The Company presents its net interest margin and net interest income on a 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 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 a FTE basis.

(a) Annualized

Westamerica Bancorporation Reports Second Quarter 2023 Financial Results