Westamerica Bancorporation Reports Fourth Quarter 2020 Financial Results

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Westamerica Bancorporation (WABC) reported a fourth-quarter 2020 net income of $23.8 million, achieving diluted earnings per share (EPS) of $0.89. This represents an increase from $20.1 million and $0.74 in the previous quarter, and $20.7 million and $0.77 in the same quarter last year. The results benefited from a $1.9 million gain on called corporate bonds and adjustments to the tax provision. Operating expenses were $24.5 million, maintaining a favorable 43% expense-to-revenue ratio. The company maintained a stable credit quality with nonperforming loans of $4.8 million.

Positive

Quarterly net income increased to $23.8 million, up from $20.1 million in Q3 2020.
Diluted EPS rose to $0.89, compared to $0.74 in Q3 2020.
Operating expenses at $24.5 million, only 43% of revenues, indicating cost efficiency.
Annualized return on average common equity was 13.2%.
Dividends paid of $0.41 per common share.
Average total deposits increased by $123 million from Q3 2020.

Negative

Revenues affected by reduced demand for certain banking products due to the pandemic.
Noninterest income decreased to $14 million from $10.5 million in Q3 2020.

01/21/2021 - 10:54 AM

SAN RAFAEL, Calif., Jan. 21, 2021 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the fourth quarter 2020 of $23.8 million and diluted earnings per common share ("EPS") of $0.89. Fourth quarter 2020 results include a gain on sale of a closed branch building, make-whole interest income on corporate bonds redeemed prior to maturity, and a customary adjustment to the tax provision for the filed 2019 tax returns which increased EPS $0.15. These results compare to net income of $20.1 million and EPS of $0.74 for the third quarter 2020 and net income of $20.7 million and EPS of $0.77 for the fourth quarter 2019.

"Westamerica remains focused on maintaining superior customer service during the pandemic. In keeping all our branches open, we are following all health orders affecting our business to provide a safe environment for our customers and employees. Operating expenses were $24.5 million for the fourth quarter 2020, representing only 43 percent of revenues on a fully-taxable equivalent basis. Westamerica’s revenues continue to reflect current operating conditions, including reduced demand for certain bank products and services due to the pandemic, and low market interest rates. Credit quality remained stable with nonperforming loans of $4.8 million at December 31, 2020,” said Chairman, President and CEO David Payne. “Fourth quarter 2020 results generated an annualized 13.2 percent return on average common equity, and shareholders were paid a $0.41 per common share dividend during the quarter,” concluded Payne.

Net interest income on a fully-taxable equivalent (FTE) basis was $43.3 million for the fourth quarter 2020, including make-whole interest income on called corporate bonds of $1.9 million. Fourth quarter 2020 net interest income (FTE) compares to $41.8 million for the third quarter 2020 and $40.5 million for the fourth quarter 2019. Average total deposits grew $123 million from the third quarter 2020 to the fourth quarter 2020. Checking and savings deposits represented ninety-seven percent of the Company’s average deposit base during the fourth quarter 2020 generating a 0.03 percent annualized cost of funding interest-earning assets.

At December 31, 2020, nonperforming loans totaled $4.8 million and the allowance for credit losses on loans was $23.9 million. The Company continues to work with loan customers requesting deferral of loan payments due to economic weakness caused by the pandemic. At December 31, 2020, consumer loans granted loan deferrals totaled $2.5 million, commercial real estate loans with deferred payments totaled $7.8 million, primarily for hospitality, restaurant and retail properties, and commercial loans with deferred payments totaled $33 thousand. The commercial real estate loans with deferred payments are seasoned with low loan-to-value ratios.

Noninterest income for the fourth quarter 2020 totaled $14.0 million, including a $3.5 million gain on sale of a closed branch building. Noninterest income was $10.5 million and $11.7 million for the third quarter 2020 and fourth quarter 2019, respectively.

Noninterest expense for the fourth quarter 2020 was $24.5 million compared to $24.6 million for the third quarter 2020 and $24.2 million for the fourth quarter 2019.

The tax rate (FTE) applied to pre-tax income (FTE) was 27.1 percent for the fourth quarter 2020 compared to 27.5 percent for the third quarter 2020 and 26.0 percent for the fourth quarter 2019. The fourth quarter 2020 tax provision was reduced by $250 thousand resulting from a customary adjustment to true-up the Company’s 2019 estimated tax provision to the filed 2019 tax return.

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 & Treasurer
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, 2019 filed on Form 10-K and quarterly report for the quarter ended September 30, 2020 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.

Public Information January 21, 2021

WESTAMERICA BANCORPORATION

FINANCIAL HIGHLIGHTS

December 31, 2020

1. Net Income Summary.

(in thousands except per-share amounts)

Q4'2020

Q4'2019

Change

Q3'2020

Net Interest and Fee Income (FTE)

$43,292

$40,481

6.9

$41,780

Provision for Credit Losses

n/m

Noninterest Income

13,959

11,732

19.0

10,476

Noninterest Expense

24,545

24,209

1.4

24,603

Income Before Taxes (FTE)

32,706

28,004

16.8

27,653

Income Tax Provision (FTE)

8,868

7,276

21.9

7,602

Net Income

$23,838

$20,728

15.0

$20,051

Average Common Shares Outstanding

26,838

27,050

-0.8

26,930

Diluted Average Common Shares

26,849

27,094

-0.9

26,946

Operating Ratios:

Basic Earnings Per Common Share

$0.89

$0.77

15.6

$0.74

Diluted Earnings Per Common Share

0.89

0.77

15.6

0.74

Return On Assets (a)

1.44

1.46

1.24

Return On Common Equity (a)

13.2

11.8

11.2

Net Interest Margin (FTE) (a)

2.81

3.08

2.78

Efficiency Ratio (FTE)

42.9

46.4

47.1

Dividends Paid Per Common Share

$0.41

0.0

$0.41

Common Dividend Payout Ratio

12/31'20YTD

12/31'19YTD

Change

Net Interest and Fee Income (FTE)

$167,682

$161,406

3.9

Provision for Credit Losses

4,300

n/m

Noninterest Income

45,637

47,408

-3.7

Noninterest Expense

98,566

98,986

-0.4

Income Before Taxes (FTE)

110,453

109,828

0.6

Income Tax Provision (FTE)

30,040

29,439

2.0

Net Income

$80,413

$80,389

0.0

Average Common Shares Outstanding

26,942

26,956

0.0

Diluted Average Common Shares

26,960

27,006

-0.2

Operating Ratios:

Basic Earnings Per Common Share

$2.98

0.0

Diluted Earnings Per Common Share

2.98

0.0

Return On Assets

1.30

1.44

Return On Common Equity

11.3

11.9

Net Interest Margin (FTE)

2.91

3.11

Efficiency Ratio (FTE)

46.2

47.4

Dividends Paid Per Common Share

$1.64

$1.63

0.6

Common Dividend Payout Ratio

2. Net Interest Income.

(dollars in thousands)

Q4'2020

Q4'2019

Change

Q3'2020

Interest and Fee Income (FTE)

$43,773

$40,932

6.9

$42,246

Interest Expense

481

451

6.7

466

Net Interest and Fee Income (FTE)

$43,292

$40,481

6.9

$41,780

Average Earning Assets

$6,156,749

$5,243,783

17.4

$6,001,287

Average Interest-

Bearing Liabilities

3,034,240

2,599,703

16.7

2,931,717

Yield on Earning Assets (FTE) (a)

2.84

3.11

2.81

Cost of Funds (a)

0.03

Net Interest Margin (FTE) (a)

2.81

3.08

2.78

Interest Expense/

Interest-Bearing Liabilities (a)

0.06

0.07

0.06

Net Interest Spread (FTE) (a)

2.78

3.04

2.75

12/31'20YTD

12/31'19YTD

Change

Interest and Fee Income (FTE)

$169,506

$163,294

3.8

Interest Expense

1,824

1,888

-3.4

Net Interest and Fee Income (FTE)

$167,682

$161,406

3.9

Average Earning Assets

$5,760,548

$5,191,276

11.0

Average Interest-

Bearing Liabilities

2,847,988

2,630,370

8.3

Yield on Earning Assets (FTE)

2.94

3.14

Cost of Funds

0.03

Net Interest Margin (FTE)

2.91

3.11

Interest Expense/

Interest-Bearing Liabilities

0.06

0.07

Net Interest Spread (FTE)

2.88

3.07

3. Loans & Other Earning Assets.

(average volume, dollars in thousands)

Q4'2020

Q4'2019

Change

Q3'2020

Total Assets

$6,562,753

$5,645,013

16.3

$6,414,399

Total Earning Assets

6,156,749

5,243,783

17.4

6,001,287

Total Loans

1,286,480

1,116,446

15.2

1,312,758

Total Commercial Loans

426,564

219,710

94.1

444,091

Paycheck Protection Program (PPP) Loans

227,828

n/m

243,104

Commercial Loans

198,736

219,710

-9.5

200,987

Commercial RE Loans

561,394

568,892

-1.3

566,626

Consumer Loans

298,522

327,844

-8.9

302,041

Total Investment Securities

4,430,592

3,792,781

16.8

4,360,119

Debt Securities Available For Sale

3,884,451

3,027,461

28.3

3,750,737

Debt Securities Held To Maturity

546,141

765,320

-28.6

609,382

Total Interest-Bearing Cash

439,677

334,556

31.4

328,410

Loans/Deposits

22.7

23.1

23.7

12/31'20YTD

12/31'19YTD

Change

Total Assets

$6,174,470

$5,597,109

10.3

Total Earning Assets

5,760,548

5,191,276

11.0

Total Loans

1,239,144

1,161,779

6.7

Total Commercial Loans

359,937

248,586

44.8

PPP Loans

151,320

n/m

Commercial Loans

208,617

248,586

-16.1

Commercial RE Loans

571,543

577,539

-1.0

Consumer Loans

307,664

335,654

-8.3

Total Investment Securities

4,149,960

3,704,764

12.0

Equity Securities

961

n/m

Debt Securities Available For Sale

3,517,633

2,844,542

23.7

Debt Securities Held To Maturity

632,327

859,261

-26.4

Total Interest-Bearing Cash

371,444

324,733

14.4

Loans/Deposits

23.4

24.2

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

(average volume, dollars in thousands)

Q4'2020

Q4'2019

Change

Q3'2020

Total Deposits

$5,655,768

$4,839,552

16.9

$5,533,144

Noninterest Demand

2,736,348

2,279,615

20.0

2,695,458

Interest-Bearing Transaction

1,071,576

922,772

16.1

1,039,833

Savings

1,688,031

1,464,206

15.3

1,634,814

Time greater than $100K

71,306

75,314

-5.3

72,045

Time less than $100K

88,507

97,645

-9.4

90,994

Total Short-Term Borrowings

114,820

39,766

188.7

94,031

Shareholders' Equity

720,473

694,709

3.7

714,400

Demand Deposits/

Total Deposits

48.4

47.1

48.7

Transaction & Savings

Deposits / Total Deposits

97.2

96.4

97.1

12/31'20YTD

12/31'19YTD

Change

Total Deposits

$5,306,177

$4,801,804

10.5

Noninterest Demand

2,538,819

2,222,876

14.2

Interest-Bearing Transaction

1,008,758

932,524

8.2

Savings

1,594,718

1,464,080

8.9

Time greater than $100K

72,363

78,925

-8.3

Time less than $100K

91,519

103,399

-11.5

Total Short-Term Borrowings

80,456

51,442

56.4

Other Borrowed Funds

174

n/m

Shareholders' Equity

711,554

675,512

5.3

Demand Deposits/

Total Deposits

47.8

46.3

Transaction & Savings

Deposits / Total Deposits

96.9

96.2

5. Interest Yields Earned & Rates Paid.

(dollars in thousands)

Q4'2020

Average

Income/

Yield (a) /

Volume

Expense

Rate (a)

Interest & Fee Income Earned

Total Earning Assets (FTE)

$6,156,749

$43,773

2.84

Total Loans (FTE)

1,286,480

15,103

4.67

Total Commercial Loans (FTE)

426,564

4,459

4.16

PPP Loans

227,828

2,342

4.08

Commercial Loans (FTE)

198,736

2,117

4.24

Commercial RE Loans

561,394

7,288

5.16

Consumer Loans

298,522

3,356

4.47

Total Investments (FTE)

4,430,592

28,558

2.58

Total Interest-Bearing Cash

439,677

112

0.10

Interest Expense Paid

Total Earning Assets

6,156,749

481

0.03

Total Interest-Bearing Liabilities

3,034,240

481

0.06

Total Interest-Bearing Deposits

2,919,420

462

0.06

Interest-Bearing Transaction

1,071,576

0.03

Savings

1,688,031

246

0.06

Time less than $100K

88,507

0.20

Time greater than $100K

71,306

0.45

Total Short-Term Borrowings

114,820

0.07

Net Interest Income and

Margin (FTE)

$43,292

2.81

Q4'2019

Average

Income/

Yield (a) /

Volume

Expense

Rate (a)

Interest & Fee Income Earned

Total Earning Assets (FTE)

$5,243,783

$40,932

3.11

Total Loans (FTE)

1,116,446

14,206

5.05

Commercial Loans (FTE)

219,710

2,821

5.09

Commercial RE Loans

568,892

7,748

5.40

Consumer Loans

327,844

3,637

4.41

Total Investments (FTE)

3,792,781

25,330

2.67

Total Interest-Bearing Cash

334,556

1,396

1.63

Interest Expense Paid

Total Earning Assets

5,243,783

451

0.03

Total Interest-Bearing Liabilities

2,599,703

451

0.07

Total Interest-Bearing Deposits

2,559,937

444

0.07

Interest-Bearing Transaction

922,772

0.04

Savings

1,464,206

215

0.06

Time less than $100K

97,645

0.24

Time greater than $100K

75,314

0.42

Total Short-Term Borrowings

39,766

0.08

Net Interest Income and

Margin (FTE)

$40,481

3.08

6. Noninterest Income.

(dollars in thousands except per-share amounts)

Q4'2020

Q4'2019

Change

Q3'2020

Service Charges on Deposits

$3,452

$4,374

-21.1

$3,298

Merchant Processing Services

2,713

2,424

11.9

2,860

Debit Card Fees

1,643

1,568

4.8

1,611

Trust Fees

765

764

0.1

756

ATM Processing Fees

570

696

-18.1

606

Other Service Fees

457

513

-10.9

454

Financial Services Commissions

122

-45.9

Gains on Sales of Real Property

3,536

n/m

Securities Gains

167

n/m

Other Operating

757

1,104

-31.4

833

Total Noninterest Income

$13,959

$11,732

19.0

$10,476

Total Revenue (FTE)

$57,251

$52,213

9.6

$52,256

Noninterest Income/Revenue (FTE)

24.4

22.5

20.0

Service Charges/Avg. Deposits (a)

0.24

0.36

0.24

Total Revenues (FTE) Per Avg.

Common Share (a)

$8.49

$7.66

10.9

$7.72

12/31'20YTD

12/31'19YTD

Change

Service Charges on Deposits

$14,149

$17,882

-20.9

Merchant Processing Services

10,208

10,132

0.8

Debit Card Fees

6,181

6,357

-2.8

Trust Fees

3,012

2,963

1.6

ATM Processing Fees

2,273

2,776

-18.1

Other Service Fees

1,837

2,255

-18.5

Financial Services Commissions

372

392

-5.1

Gains on Sales of Real Property

3,536

n/m

Life Insurance Gains

433

n/m

Securities Gains

217

n/m

Other Operating (6)

3,998

4,001

-0.1

Total Noninterest Income

$45,637

$47,408

-3.7

Total Revenue (FTE)

$213,319

$208,814

2.2

Noninterest Income/Revenue (FTE)

21.4

22.7

Service Charges/Avg. Deposits

0.27

0.37

Total Revenues (FTE) Per Avg./

Common Share

$7.92

$7.75

2.2

7. Noninterest Expense.

(dollars in thousands)

Q4'2020

Q4'2019

Change

Q3'2020

Salaries & Benefits

$12,291

$12,297

0.0

$12,540

Occupancy and Equipment

4,900

5,077

-3.5

5,014

Outsourced Data Processing

2,359

2,361

-0.1

2,338

Professional Fees

722

674

7.1

669

Courier Service

502

529

-5.1

500

Amortization of

Identifiable Intangibles

-5.5

Other Operating

3,702

3,198

15.8

3,470

Total Noninterest Expense

$24,545

$24,209

1.4

$24,603

Noninterest Expense/

Avg. Earning Assets (a)

1.59

1.83

1.63

Noninterest Expense/Revenues (FTE)

42.9

46.4

47.1

12/31'20YTD

12/31'19YTD

Change

Salaries & Benefits

$50,749

$51,054

-0.6

Occupancy and Equipment

19,637

20,240

-3.0

Outsourced Data Processing

9,426

9,471

-0.5

Professional Fees

2,423

2,465

-1.7

Courier Service

2,001

1,878

6.5

Amortization of

Identifiable Intangibles

287

538

-46.7

Loss Contingency (1)

553

n/m

Other Operating

14,043

12,787

9.8

Total Noninterest Expense

$98,566

$98,986

-0.4

Noninterest Expense/

Avg. Earning Assets

1.71

1.91

Noninterest Expense/Revenues (FTE)

46.2

47.4

8. Allowance for Credit Losses.

(dollars in thousands)

Q4'2020

Q4'2019

Change

Q3'2020

Average Total Loans

$1,286,480

$1,116,446

15.2

$1,312,758

Beginning of Period Allowance for

Credit Losses on Loans (ACLL)

$24,142

$19,828

21.8

$24,529

Provision for Credit Losses

n/m

Net ACLL Losses

(295

)

(344

)

-14.2

(387

)

End of Period ACLL

$23,854

$19,484

22.4

$24,142

Gross ACLL Recoveries /

Gross ACLL Losses

Net ACLL Losses /

Avg. Total Loans (a)

0.09

0.12

12/31'20YTD

12/31'19YTD

Change

Average Total Loans

$1,239,144

$1,161,779

6.7

Prior Period Allowance for

Credit Losses on Loans (ACLL)

$19,484

$21,351

-8.7

Adoption of ASU 2016-13(2)

2,017

n/m

Beginning of Period ACLL

21,501

21,351

0.7

Provision for Credit Losses

4,307

n/m

Net ACLL Losses

(1,954

)

(1,867

)

4.7

End of Period ACLL

$23,854

$19,484

22.4

Gross ACLL Recoveries /

Gross ACLL Losses

Net ACLL Losses /

Avg. Total Loans

0.16

(dollars in thousands)

12/31/20

12/31/19

Change

9/30/20

Allowance for Credit Losses on Loans

$23,854

$19,484

22.4

$24,142

Allowance for Credit Losses on

HTM Securities (3)

n/m

Total Allowance for Credit Losses

$23,863

$19,484

22.5

$24,158

Allowance for Unfunded

Credit Commitments

101

2,160

-95.3

9. Credit Quality.

(dollars in thousands)

12/31/20

12/31/19

Change

9/30/20

Nonperforming Loans:

Nonperforming Nonaccrual

$526

$659

-20.2

$409

Performing Nonaccrual

3,803

3,781

0.6

3,971

Total Nonaccrual Loans

4,329

4,440

-2.5

4,380

90+ Days Past Due Accruing Loans

450

440

2.3

360

Total

4,779

4,880

-2.1

4,740

Repossessed Loan Collateral

-100.0

Total Nonperforming Assets

$4,779

$4,923

-2.9

$4,783

Total Loans Outstanding

$1,256,243

$1,126,664

11.5

$1,310,009

Total Assets

$6,747,931

$5,619,555

20.1

$6,563,215

Loans:

Allowance for Credit Losses on Loans

$23,854

$19,484

22.4

$24,142

Allowance for Credit Losses on Loans /

Loans

1.90

1.73

1.84

Nonperforming Loans/Total Loans

0.38

0.43

0.36

10. Capital.

(in thousands, except per-share amounts)

12/31/20

12/31/19

Change

9/30/20

Shareholders' Equity

$844,809

$731,417

15.5

$825,576

Total Assets

6,747,931

{ "@context": "https://schema.org", "@type": "FAQPage", "name": "Westamerica Bancorporation Reports Fourth Quarter 2020 Financial Results FAQs", "mainEntity": [ { "@type": "Question", "name": "What were Westamerica Bancorporation's earnings for the fourth quarter 2020?", "acceptedAnswer": { "@type": "Answer", "text": "Westamerica Bancorporation reported a net income of $23.8 million for the fourth quarter of 2020." } }, { "@type": "Question", "name": "What is the diluted EPS for WABC in Q4 2020?", "acceptedAnswer": { "@type": "Answer", "text": "The diluted earnings per share (EPS) for Westamerica Bancorporation in Q4 2020 was $0.89." } }, { "@type": "Question", "name": "How much did operating expenses amount to for WABC in Q4 2020?", "acceptedAnswer": { "@type": "Answer", "text": "Operating expenses for Westamerica Bancorporation in the fourth quarter of 2020 were $24.5 million." } }, { "@type": "Question", "name": "What was the return on equity for Westamerica Bancorporation in Q4 2020?", "acceptedAnswer": { "@type": "Answer", "text": "Westamerica Bancorporation achieved an annualized return on average common equity of 13.2% in Q4 2020." } }, { "@type": "Question", "name": "Did WABC pay dividends in Q4 2020?", "acceptedAnswer": { "@type": "Answer", "text": "Yes, Westamerica Bancorporation paid dividends of $0.41 per common share in the fourth quarter of 2020." } } ] }