-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E/Txw5XNN/BrbPIXx6kJJoaCmC6mL7NhT6ehRJd/30ziJUlgl9NUdjNLkTi3OC7t NkvvarKnUEyat956gUl3Eg== 0000311094-97-000013.txt : 19971115 0000311094-97-000013.hdr.sgml : 19971115 ACCESSION NUMBER: 0000311094-97-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESTAMERICA BANCORPORATION CENTRAL INDEX KEY: 0000311094 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 942156203 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09383 FILM NUMBER: 97717361 BUSINESS ADDRESS: STREET 1: 1108 FIFTH AVE CITY: SAN RAFAEL STATE: CA ZIP: 94901 BUSINESS PHONE: 4152578000 MAIL ADDRESS: STREET 1: 1108 FIFTH AVENUE CITY: SAN RAFAEL STATE: CA ZIP: 94901 FORMER COMPANY: FORMER CONFORMED NAME: INDEPENDENT BANKSHARES CORP DATE OF NAME CHANGE: 19830801 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended September 30, 1997 Commission File Number: 1-9383 WESTAMERICA BANCORPORATION (Exact Name of Registrant as Specified in its Charter) CALIFORNIA (State or other jurisdiction of incorporation or organization) 94-2156203 (I.R.S. Employer Identification No.) 1108 Fifth Avenue, San Rafael, California 94901 (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, including Area Code (415) 257-8000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ x ] No [ ] Indicate the number of shares outstanding of each of the registrant classes of common stock, as of the latest practicable date: Title of Class Common Stock, No Par Value Shares outstanding as of November 6, 1997 14,304,970 WESTAMERICA BANCORPORATION CONSOLIDATED BALANCE SHEETS (In thousands)
(Unaudited) ------------------------ September 30, December 31, 1997 1996 * 1996 * ---------- ---------- ---------- ASSETS Cash and cash equivalents $246,485 $342,867 $355,177 Money market assets 250 250 250 Investment securities available for sale 974,149 876,701 892,461 Investment securities held to maturity, 234,731 219,744 215,432 with market values of: $237,497 at September 30, 1997 $220,620 at September 30,1996 $218,009 at December 31,1996 Loans, net of reserve for loan losses of: 2,205,658 2,251,746 2,236,319 $50,764 at September 30, 1997 $49,795 at September 30,1996 $50,920 at December 31,1996 Other real estate owned 6,019 8,920 9,912 Premises and equipment, net 53,336 64,804 63,968 Interest receivable and other assets 96,267 91,727 93,255 ----------- ----------- ----------- Total assets $3,816,895 $3,856,759 $3,866,774 =========== =========== =========== LIABILITIES Deposits: Non-interest bearing $803,040 $789,217 $834,964 Interest bearing: Transaction and savings 1,494,522 1,583,727 1,569,022 Time 807,614 847,149 824,714 ----------- ----------- ----------- Total deposits 3,105,176 3,220,093 3,228,700 Short-term borrowed funds 205,476 172,660 167,447 Liability for interest, taxes and other expenses 49,690 33,366 32,483 Debt financing and notes payable 57,500 63,896 58,865 ----------- ----------- ----------- Total liabilities 3,417,842 3,490,015 3,487,495 SHAREHOLDERS' EQUITY Authorized - 50,000 shares Common stock issued and outstanding: 196,994 186,007 187,210 14,367 at September 30, 1997 14,259 at September 30,1996 14,296 at December 31,1996 Unrealized gain on securities available for sale, net of taxes 14,609 2,762 6,019 Retained earnings 187,450 177,975 186,050 ----------- ----------- ----------- Total shareholders' equity 399,053 366,744 379,279 Total liabilities and ----------- ----------- ----------- shareholders' equity $3,816,895 $3,856,759 $3,866,774 =========== =========== ===========
* Restated on a historical basis to reflect the April 12, 1997, acquisition of ValliCorp Holdings, Inc. on a pooling-of-interests basis. WESTAMERICA BANCORPORATION CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data)
Three months ended Nine months ended September 30, September 30, ---------------- ---------------- 1997 1996* 1997 1996* ------- ------- ------- ------- INTEREST INCOME Loans $51,233 $51,239 $151,606 $154,224 Money market assets and funds sold 27 1,009 1,629 3,370 Investment securities: Available for sale Taxable 11,791 10,290 34,453 30,553 Tax-exempt 2,107 1,940 5,626 5,591 Held to maturity Taxable 1,553 1,480 3,661 4,960 Tax-exempt 1,766 1,685 5,444 5,297 ------- ------- -------- -------- Total interest income 68,477 67,643 202,419 203,995 INTEREST EXPENSE Transaction deposits 1,670 1,638 4,974 4,761 Savings deposits 7,172 7,154 21,343 21,138 Time deposits 10,552 10,520 31,227 31,710 Funds purchased 1,771 2,475 5,633 8,075 Debt financing and notes payable 1,005 1,092 3,012 3,066 ------- ------- -------- -------- Total interest expense 22,170 22,879 66,189 68,750 ------- ------- -------- -------- NET INTEREST INCOME 46,307 44,764 136,230 135,245 Provision for loan losses 1,650 3,152 6,250 9,154 ------- ------- -------- -------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 44,657 41,612 129,980 126,091 NON-INTEREST INCOME Service charges on deposit accounts 4,960 5,335 15,592 15,467 Merchant credit card 917 1,176 2,946 3,498 Mortgage banking 392 537 1,112 1,541 Financial services commissions 323 229 787 572 Trust fees 153 102 383 275 Securities gain -- 9 136 56 Other 2,031 1,811 7,085 5,264 ------- ------- -------- -------- Total non-interest income 8,776 9,199 28,041 26,673 NON-INTEREST EXPENSE Salaries and related benefits 12,562 15,072 49,779 45,625 Occupancy 3,320 4,484 19,068 12,760 Equipment 2,140 2,596 8,864 7,522 Professional fees 687 1,222 8,709 3,749 Data processing 1,383 1,482 4,794 4,467 Other real estate owned 88 149 929 758 Other 6,023 7,960 19,805 26,340 ------- ------- -------- -------- Total non-interest expense 26,203 32,965 111,948 101,221 ------- ------- -------- -------- INCOME BEFORE INCOME TAXES 27,230 17,846 46,073 51,543 Provision for income taxes 9,570 5,943 16,235 17,172 ------- ------- -------- -------- NET INCOME $17,660 $11,903 $29,838 $34,371 ======= ======= ======= ======= Average shares outstanding 14,390 14,080 14,355 14,248 PER SHARE DATA Earnings per share $1.23 $0.85 $2.08 $2.41 Dividends paid 0.26 0.23 0.78 0.69
* Restated on a historical basis to reflect the April 12, 1997, acquisition of ValliCorp Holdings, Inc. on a pooling-of-interest basis. WESTAMERICA BANCORPORATION STATEMENTS OF CASH FLOWS (In thousands)
(Unaudited) For the nine months ended September 30, ------------------------ 1997 1996 * -------- -------- OPERATING ACTIVITIES Net income $29,838 $34,371 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,234 7,225 Loan loss provision 6,250 9,154 Amortization of deferred net loan fees (870) (1,010) Decrease in interest income receivable 1,679 2,632 Decrease (increase) in other assets 4,036 (9,056) Increase (decrease) in income taxes payable 3,247 (1,149) Decrease in interest expense payable (541) (26) Decrease in other liabilities (41) (4,198) Gain on sales of investment securities (136) (56) Gain on sales of branches (678) -- Net loss on sales/write-down of equipment 7,627 260 Originations of loans for resale (9,123) (56,031) Proceeds from sale of loans originated for resale 16,387 57,910 Net gain on sale of property acquired in satisfaction of debt (866) (129) Write-down on property acquired in satisfaction of debt 1,248 428 -------- -------- Net cash provided by operating activities 64,291 40,325 INVESTING ACTIVITIES Net cash obtained in merger -- 4,370 Net repayments of loans 16,684 14,780 Purchases of investment securities available for sale (337,857) (246,807) Purchases of investment securities held to maturity (65,721) (10,889) Purchases of property, plant and equipment (4,515) (19,805) Proceeds from maturity of securities available for sale 248,295 217,289 Proceeds from maturity of securities held to maturity 46,422 97,053 Proceeds from sale of securities available for sale 22,415 35,767 Proceeds from sale of property and equipment 1,696 4,366 Proceeds from property acquired in satisfaction of debt 5,112 4,926 -------- -------- Net cash (used in) provided by investing activities (67,469) 101,050 FINANCING ACTIVITIES Net decrease in deposits (123,524) (116,634) Net increase (decrease) in short-term borrowings 38,029 (13,372) Additions to notes payable -- 22,500 Repayments of notes payable (1,365) (5) Exercise of stock options/issuance of shares 13,456 4,196 Retirement of stock (23,015) (26,883) Dividends paid (9,095) (11,217) -------- -------- Net cash used in financing activities (105,514) (141,415) -------- -------- Net decrease in cash and cash equivalents (108,692) (40) Cash and cash equivalents at beginning of year 355,177 342,907 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $246,485 $342,867 ======== ======== Supplemental disclosures: Loans transferred to other real estate owned 1,601 7,120 Unrealized net gain on securities available for sale 8,594 1,607 Interest paid for the period 66,523 67,328 Income tax payments for the period 14,305 19,385
* Restated on a historical basis to reflect the April 12, 1997, acquisition of ValliCorp Holdings, Inc., on a pooling-of-interests basis. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Westamerica Bancorporation (the "Company"), parent company of Westamerica Bank, Bank of Lake County, Community Banker Services Corporation and Westamerica Commercial Credit Inc., reported third quarter 1997 net income of $17.7 million or $1.23 per share. On a year-to-date basis, the Company reported net income of $29.8 million, or $2.08 per share. In addition to historical information, this discussion includes certain forward-looking statements regarding events and trends which may affect the Company's future results. Such statements are subject to risks and uncertainties that could cause the Company's actual results to differ materially. Such factors include, but are not limited to, those described in this discussion and analysis. This report, which includes consolidated financial statements prepared in conformity with generally accepted accounting principles, should be read in conjunction with Westamerica Bancorporation's annual report on Form 10-K for the year ended December 31, 1996. Acquisition On April 12, 1997, the Company completed the acquisition with ValliCorp Holdings, Inc. ("ValliCorp"), parent company of ValliWide Bank, on a pooling-of-interests basis (the "Merger") and, accordingly, the Company's historical consolidated results have been restated. Under the terms of the Agreement and Plan of Reorganization among ValliCorp, ValliWide Bank and the Company, each share of ValliCorp Common Stock was exchanged for .3479 shares of the Company's Common Stock. No gain or loss for tax purposes was recognized by ValliCorp shareholders, except with respect to cash received in lieu of fractional shares. Based on the closing price of the Company's Common Stock on April 11, 1997, the acquisition was valued at approximately $290 million or $20.11 per share. On June 20, 1997, ValliWide Bank, ValliCorp's only bank subsidiary, merged with and into Westamerica Bank. The following summarizes the separate results of the combined entities for the periods shown prior to the combination: (In thousands, except per share data)
Restated Westamerica Combined Bancorporation ValliCorp Results * --------------- --------- ---------- Three months ended 9/30/96 Net interest income $28,069 $16,711 $44,764 Net income 9,467 2,449 11,903 Earnings per share 1.00 0.18 0.85 Nine months ended 9/30/96 Net interest income $84,214 $51,060 $135,245 Net income 27,966 6,434 34,371 Earnings per share 2.89 0.48 2.41 At September 30, 1996 Total assets $2,529,167 $1,329,555 $3,856,759 Total shareholders' equity 229,200 139,376 366,744
* On September 30, 1996, the Company owned 115,500 shares of ValliCorp Common Stock. Amounts indicated have been adjusted to eliminate these shares as a result of the Merger. Components of Net Income Following is a summary of the components of net income for the periods indicated: [/TABLE]
For the three For the nine months ended months ended September 30, September 30, ---------------------- --------------------- (In millions) 1997 1996 1997 1996 ------ ------- ------ ------- Net interest income* $48.8 $46.7 $143.2 $140.9 Provision for loan losses (1.7) (3.2) (6.3) (9.2) Non-interest income 8.8 9.2 28.0 26.7 Non-interest expense (26.2) (33.0) (111.9) (101.2) Provision for income taxes* (12.0) (7.8) (23.2) (22.8) ------ ------ ------ ------ Net income $17.7 $11.9 $29.8 $34.4 ===== ===== ===== ===== Average total assets $3,733.7 $3,754.7 $3,746.9 $3,758.4 Net income (annualized) as a percentage of average total assets 1.88% 1.26% 1.06% 1.22% - ---------------
* Fully taxable equivalent basis (FTE) During the third quarter of 1997, the Company's net income was $17.7 million, $5.8 million higher than the same period in 1996. Higher net interest income, resulting mainly from higher earning asset yields, a lower loan loss provision and reduced expenses due to consolidation of operations after the Merger, were partially offset by lower service fees and other non-interest income. Comparing the first nine months of 1997 to the prior year, net income decreased $4.6 million. During the second quarter of 1997, the Company incurred approximately $18.8 million in one-time costs associated with the Merger, partially offset by staff reductions and other cost controls, as operations were consolidated and efficiencies were achieved during the third quarter. In addition, the Company benefited from higher net interest income, a lower loan loss provision and higher non-interest income. Analysis of Net Interest Income and Margin Net interest income, the Company's principal source of revenues, was higher in the third quarter of 1997 compared to the third quarter of 1996 by $2.1 million, principally due to the favorable effects of higher average earning-asset balances and increased related yields, combined with increased balances of low-cost deposits and a lower volume of high-cost purchased funds. The Company continually manages its interest-earning assets and interest-bearing liabilities and adapts rapidly to changes in market rates. For the nine months ended September 30, 1997, net interest income (FTE) increased $2.3 million. An increased level of low-cost deposits and an accompanying reduction in higher-costing purchased funds balances were the main reasons for the increase. These changes are shown in the components of net interest income and in the analysis of net interest margin summarized as follows for the periods indicated: Net Interest Income
For the three For the nine months ended months ended September 30, September 30, (In millions) ---------------------- --------------------- 1997 1996 1997 1996 ------ ------- ------ ------- Interest income $68.5 $67.6 $202.4 $204.0 Interest expense (22.2) (22.9) (66.2) (68.8) FTE adjustment 2.5 2.0 7.0 5.7 ------- ------- ------- ------- Net interest income (FTE) $48.8 $46.7 $143.2 $140.9 ====== ====== ====== ====== Average earning assets $3,402.1 $3,399.2 $3,409.0 $3,410.6 Net interest margin (FTE) 5.69% 5.47% 5.62% 5.52%
Third quarter loan fees, excluding deferrals of $1.0 million, included in interest income on loans, were $500,000 higher than in the same period of 1996. On a year-to-date basis, loan fees excluding deferrals were $1.2 million higher than the comparable period in 1996. In both cases, the increases were due to the increased level of loan originations. Net Interest Margin (FTE)
For the three For the nine months ended months ended September 30, September 30, ---------------------- --------------------- 1997 1996 1997 1996 ------ ------- ------ ------- Yield on earning assets 8.27% 8.15% 8.21% 8.21% Cost of interest-bearing liabilities 3.47% 3.46% 3.44% 3.47% ------- ------- ------- ------- Net interest spread 4.80% 4.69% 4.77% 4.74% Impact of non-interest bearing demand 0.89% 0.78% 0.85% 0.78% ------- ------- ------- ------- Net interest margin 5.69% 5.47% 5.62% 5.52% ====== ====== ====== ======
The net interest margin during the third quarter of 1997 was 22 basis points higher than the same period in 1996. The average yield on earning assets during the current quarter was 12 basis points higher than the same period in 1996 as the Company benefited from a 32 basis point increase in investment securities yields. This was the combined result of increased balances of tax-free securities, a reduction in lower-yielding short-term funds sold and the restatement of the fully taxable equivalent adjustment on a consolidated basis after the Merger, not previously accounted for by ValliCorp. Even though the rate paid on interest-bearing liabilities increased one basis point from the third quarter of 1996, its effect was offset by the favorable impact to the net interest margin of the higher volume of non-interest bearing demand deposits. For the first nine months of 1997, the net interest margin was 10 basis points higher than the first nine months of 1996. A three basis point decrease in the rate paid on interest-bearing liabilities, combined with the favorable impact of an increase in non-interest bearing demand balances, were the main reasons for this increase. Summary of Average Balances, Yields/Rates and Interest Differential The following tables present, for the periods indicated, information regarding the Company's consolidated average assets, liabilities and shareholders' equity, the amounts of interest income from average earning assets and the resulting yields, and the amount of interest expense paid on interest-bearing liabilities. The information included has been restated on a historical basis and presents the combined financial condition of the Company and ValliCorp as if the Merger had been in effect for all periods presented. Average loan balances include non-performing loans. Interest income includes proceeds from loans on non-accrual status only to the extent cash payments have been received and applied as interest income. Yields on securities and certain loans have been adjusted upward to reflect the effect of income thereon exempt from federal income taxation at the current statutory tax rate. Distribution of assets, liabilities and shareholders' equity:
For the three months ended September 30, 1997 - --------------------------------------------------------------------------- (Dollars in thousands) Interest Rates Average income/ earned/ balance expense paid - --------------------------------------------------------------------------- Assets Money market assets and funds sold $2,250 $27 4.76 % Investment securities: Taxable 865,482 13,344 6.12 Tax-exempt 284,726 5,646 7.87 Loans: Commercial 1,436,306 34,018 9.40 Real estate construction 78,705 2,255 11.37 Real estate residential 329,765 6,174 7.43 Consumer 404,853 9,469 9.28 - ---------------------------------------------------------------- Earning assets 3,402,087 70,933 8.27 Other assets 331,606 - ------------------------------------------------------- Total assets $3,733,693 ======================================================= Liabilities and shareholders' equity Deposits: Non-interest bearing demand $785,603 $-- -- % Savings and interest-bearing transaction 1,523,057 8,842 2.30 Time less than $100,000 475,865 6,156 5.13 Time $100,000 or more 327,853 4,396 5.32 - ---------------------------------------------------------------- Total interest-bearing deposits 2,326,775 19,394 3.31 Funds purchased 151,995 1,771 4.62 Debt financing and notes payable 57,500 1,005 6.93 - ---------------------------------------------------------------- Total interest-bearing liabilities 2,536,270 22,170 3.47 Other liabilities 33,198 Shareholders' equity 378,622 - ------------------------------------------------------- Total liabilities and shareholders' equity $3,733,693 ======================================================= Net interest spread (1) 4.80 % Net interest income and interest margin (2) $48,763 5.69 % ===========================================================================
(1) Net interest spread represents the average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities. (2) Net interest margin is computed by dividing net interest income (annualized) by total average earning assets. Distribution of assets, liabilities and shareholders' equity:
For the three months ended September 30, 1996 - --------------------------------------------------------------------------- (Dollars in thousands) Interest Rates Average income/ earned/ balance expense paid - --------------------------------------------------------------------------- Assets Money market assets and funds sold $73,068 $1,009 5.49 % Investment securities: Taxable 814,044 11,770 5.75 Tax-exempt 260,581 5,135 7.84 Loans: Commercial 1,364,462 31,681 9.24 Real estate construction 113,756 2,992 10.46 Real estate residential 313,893 6,364 8.07 Consumer 459,429 10,677 9.25 - ---------------------------------------------------------------- Earning assets 3,399,233 69,628 8.15 Other assets 355,501 - ------------------------------------------------------- Total assets $3,754,734 ======================================================= Liabilities and shareholders' equity Deposits: Non-interest bearing demand $752,093 $-- -- % Savings and interest-bearing transaction 1,541,845 8,792 2.27 Time less than $100,000 509,261 6,346 4.96 Time $100,000 or more 318,223 4,174 5.22 - ---------------------------------------------------------------- Total interest-bearing deposits 2,369,329 19,312 3.24 Funds purchased 194,800 2,475 5.05 Debt financing and notes payable 63,541 1,092 6.84 - ---------------------------------------------------------------- Total interest-bearing liabilities 2,627,670 22,879 3.46 Other liabilities 27,734 Shareholders' equity 347,237 - ------------------------------------------------------- Total liabilities and shareholders' equity $3,754,734 ======================================================= Net interest spread (1) 4.69 % Net interest income and interest margin (2) $46,749 5.47 % ===========================================================================
(1) Net interest spread represents the average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities. (2) Net interest margin is computed by dividing net interest income (annualized) by total average earning assets. Distribution of assets, liabilities and shareholders' equity:
For the nine months ended September 30, 1997 - --------------------------------------------------------------------------- (Dollars in thousands) Interest Rates Average income/ earned/ balance expense paid - --------------------------------------------------------------------------- Assets Money market assets and funds sold $39,957 $1,629 5.45 % Investment securities: Taxable 866,073 38,114 5.88 Tax-exempt 252,817 16,020 8.47 Loans: Commercial 1,387,306 96,324 9.28 Real estate construction 90,322 7,340 10.87 Real estate residential 348,232 20,488 7.87 Consumer 424,268 29,464 9.28 - ---------------------------------------------------------------- Earning assets 3,408,975 209,379 8.21 Other assets 337,961 - ------------------------------------------------------- Total assets $3,746,936 ======================================================= Liabilities and shareholders' equity Deposits: Non-interest bearing demand $768,036 $-- -- % Savings and interest-bearing transaction 1,548,960 26,317 2.27 Time less than $100,000 484,512 18,432 5.09 Time $100,000 or more 324,032 12,795 5.28 - ---------------------------------------------------------------- Total interest-bearing deposits 2,357,504 57,544 3.26 Funds purchased 156,392 5,633 4.82 Debt financing and notes payable 58,034 3,012 6.94 - ---------------------------------------------------------------- Total interest-bearing liabilities 2,571,930 66,189 3.44 Other liabilities 30,023 Shareholders' equity 376,947 - ------------------------------------------------------- Total liabilities and shareholders' equity $3,746,936 ======================================================= Net interest spread (1) 4.77 % Net interest income and interest margin (2) $143,190 5.62 % ===========================================================================
(1) Net interest spread represents the average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities. (2) Net interest margin is computed by dividing net interest income (annualized) by total average earning assets. Distribution of assets, liabilities and shareholders' equity:
For the nine months ended September 30, 1996 - --------------------------------------------------------------------------- (Dollars in thousands) Interest Rates Average income/ earned/ balance expense paid - --------------------------------------------------------------------------- Assets Money market assets and funds sold $81,268 $3,370 5.54 % Investment securities: Taxable 831,939 35,513 5.70 Tax-exempt 260,615 15,279 7.83 Loans: Commercial 1,333,828 94,115 9.43 Real estate construction 122,772 9,633 10.48 Real estate residential 310,607 19,199 8.26 Consumer 469,524 32,554 9.26 - ---------------------------------------------------------------- Earning assets 3,410,553 209,663 8.21 Other assets 347,833 - ------------------------------------------------------- Total assets $3,758,386 ======================================================= Liabilities and shareholders' equity Deposits: Non-interest bearing demand $734,995 $-- -- % Savings and interest-bearing transaction 1,550,667 25,899 2.23 Time less than $100,000 521,704 19,626 5.03 Time $100,000 or more 305,310 12,084 5.29 - ---------------------------------------------------------------- Total interest-bearing deposits 2,377,681 57,609 3.24 Funds purchased 210,289 8,075 5.13 Debt financing and notes payable 59,308 3,066 6.91 - ---------------------------------------------------------------- Total interest-bearing liabilities 2,647,278 68,750 3.47 Other liabilities 26,251 Shareholders' equity 349,862 - ------------------------------------------------------- Total liabilities and shareholders' equity $3,758,386 ======================================================= Net interest spread (1) 4.74 % Net interest income and interest margin (2) $140,913 5.52 % ===========================================================================
(1) Net interest spread represents the average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities. (2) Net interest margin is computed by dividing net interest income (annualized) by total average earning assets. Rate and volume variances. The following tables set forth a summary of the changes in interest income and interest expense from changes in average asset and liability balances (volume) and changes in average interest rates for the periods indicated. Changes not solely attributable to volume or rates have been allocated in proportion to the respective volume and rate components.
- -------------------------------------------------------------------------- (In thousands) Three months ended September 30, 1997 compared with three months ended September 30, 1996 --------------------------- Volume Rate Total - -------------------------------------------------------------------------- Increase (decrease) in interest and fee income: Money market assets and funds sold ($878) ($104) ($982) Investment securities: Taxable 786 788 1,574 Tax-exempt 492 19 511 Loans: Commercial 1,760 577 2,337 Real estate construction (1,024) 287 (737) Real estate residential 337 (527) (190) Consumer (1,246) 38 (1,208) - -------------------------------------------------------------------------- Total loans (173) 375 202 - -------------------------------------------------------------------------- Total increase in interest and fee income 227 1,078 1,305 - -------------------------------------------------------------------------- Increase (decrease) in interest expense: Deposits: Savings/interest-bearing (198) 248 50 Time less than $ 100,000 (412) 222 (190) Time $ 100,000 or more 135 87 222 - -------------------------------------------------------------------------- Total (decrease) increase in interest-bearing deposits (475) 557 82 Funds purchased (507) (197) (704) Debt financing and notes payable (102) 15 (87) - -------------------------------------------------------------------------- Total(decrease) increase in interest expense (1,084) 375 (709) - -------------------------------------------------------------------------- Increase in net interest income (1) $1,311 $703 $2,014 ==========================================================================
(1) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate. Rate and volume variances.
- -------------------------------------------------------------------------- (In thousands) Nine months ended September 30, 1997 compared with nine months ended September 30, 1996 --------------------------- Volume Rate Total - -------------------------------------------------------------------------- Increase (decrease) in interest and fee income: Money market assets and funds sold ($1,688) ($53) ($1,741) Investment securities: Taxable 1,463 1,138 2,601 Tax-exempt (427) 1,168 741 Loans: Commercial 3,540 (1,331) 2,209 Real estate construction (2,662) 369 (2,293) Real estate residential 2,114 (825) 1,289 Consumer (3,174) 84 (3,090) - -------------------------------------------------------------------------- Total loans (182) (1,703) (1,885) - -------------------------------------------------------------------------- Total (decrease) increase in interest and fee income (834) 550 (284) - -------------------------------------------------------------------------- Increase (decrease) in interest expense: Deposits: Savings/interest-bearing (27) 445 418 Time less than $ 100,000 (1,440) 246 (1,194) Time $ 100,000 or more 728 (17) 711 - -------------------------------------------------------------------------- Total (decrease) increase in interest-bearing deposits (739) 674 (65) Funds purchased (1,971) (471) (2,442) Debt financing and notes payable (70) 16 (54) - -------------------------------------------------------------------------- Total (decrease) increase in interest expense (2,780) 219 (2,561) - -------------------------------------------------------------------------- Increase in net interest income $1,946 $331 $2,277 ==========================================================================
(1) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate. Provision for Loan Losses The level of the provision for loan losses during each of the periods presented reflects the Company's continued efforts to improve loan quality by enforcing underwriting and administration procedures and aggressively pursuing collection efforts with troubled debtors. After the Merger, and continuing with the above mentioned strategy, the Company provided $1.7 million for loan losses for the third quarter of 1997, compared to $3.2 million for the same period in 1996. On a year-to-date basis, the $6.3 million provision for loan losses in 1997 was $2.9 million lower than the first nine months of 1996. The 1997 provision includes $2.5 million recorded by ValliCorp prior to the Merger, conforming to upgraded credit standards and workout strategies for loans and properties. For further information regarding net credit losses and the reserve for loan losses, see the "Asset Quality" section of this report. Non-interest Income The following table summarizes the components of non-interest income for the periods indicated.
For the three For the nine months ended months ended (In millions) September 30, September 30, --------------------- --------------------- 1997 1996 1997 1996 ------ ------- ------ ------- Deposit account fees $4.96 $5.34 $15.59 $15.47 Merchant credit card 0.92 1.18 2.95 3.50 Mortgage banking income 0.39 0.54 1.11 1.54 Financial services commissions 0.32 0.23 0.79 0.57 Trust fees 0.15 0.10 0.38 0.28 Net investment securities gain -- 0.01 0.14 0.06 Other non-interest income 2.04 1.80 7.08 5.25 ------ ------ ------ ------ Total $8.78 $9.20 $28.04 $26.67 ====== ====== ====== ======
The $420,000 decrease in non-interest income during the third quarter of 1997 compared to the third quarter of 1996, included $380,000 lower deposit account fees principally due to income foregone during the first cycle of accounts converted in the merger of ValliWide Bank with and into Westamerica Bank, $260,000 lower merchant credit card income and $150,000 lower mortgage banking mainly due to lower refinancing volume. Partially offsetting these variances, financial services commissions were $90,000 higher than the third quarter of 1996 resulting from increased share of fees earned by the agent managing certain investments of the Company's customers, and trust fees were $50,000 higher than the comparable period of prior year. In addition, gains realized on asset sales were the major contributor to the increase in the other non-interest income category. Comparing the first nine months of 1997 to the same period of 1996, non-interest income increased $1.37 million. The largest contributor to this variance was a gain on sale of assets at ValliWide Bank prior to the merger with and into Westamerica Bank and after the merger of the holding companies, included in the "Other" non-interest income category variance of $1.83 million. In addition, financial services commissions were $220,000 higher than prior year for the same reason stated above and deposit account fees were $120,000 higher than the comparable period in 1996 as higher account analysis and other transaction account fees during the first nine months of 1996 more than offset the income foregone during the first cycle after the merger of ValliWide Bank's converted accounts. The favorable variances also include $100,000 higher trust fees and an $80,000 gain on sales of investment securities. Partially offsetting these favorable variances, merchant credit card fees and mortgage banking income were $550,000 and $430,000, respectively, lower than the same period in 1996. Non-interest Expense The following table summarizes the components of non-interest expense for the periods indicated.
For the three For the nine months ended months ended September 30, September 30, --------------------- --------------------- (In millions) 1997 1996 1997 1996 ------ ------- ------ ------- Salaries and incentives $10.87 $13.89 $44.70 $41.56 Other personnel 1.69 1.18 5.08 4.07 Occupancy 3.32 4.48 19.07 12.76 Equipment 2.14 2.60 8.86 7.52 Professional fees 0.69 1.22 8.71 3.75 Data processing services 1.38 1.48 4.79 4.47 Courier service 0.81 0.81 2.41 2.18 Stationery and supplies 0.53 0.81 1.91 2.17 Postage 0.52 0.59 1.79 1.78 Marketing 0.40 0.78 1.44 2.33 Merchant credit card 0.37 0.65 1.36 1.72 Loan expense 0.36 0.44 1.29 1.35 Other real estate owned 0.09 0.15 0.93 0.76 Operational losses 0.26 0.28 0.79 0.69 Other non-interest expense 2.77 3.61 8.82 14.11 ------- ------- ------- ------- Total $26.20 $32.97 $111.95 $101.22 ======= ======= ======= =======
In the third quarter of 1997, non-interest expense decreased $6.77 million from the third quarter of 1996 reflecting the effect of administration and operation consolidations, branch closures and other Merger-related efficiencies. The decrease affected all categories of non-interest expense. The largest variance from prior year is employee related, reflecting the reduction of 426 full-time equivalent staff. Other expense reductions from prior year include $1.16 million lower occupancy costs, as facilities closures including branches and write-offs of assets have reduced related expenses; $530,000 lower professional fees, mostly due to increased expenses in 1996 related to mergers and acquisitions; and $460,000 lower equipment costs, principally due to lower expenses resulting from merger-related asset write-offs. Other variances in non-interest expense from the third quarter of 1996 resulting primarily from achieved economies of scale after consolidation of operations between Westamerica and ValliWide banks include $380,000 lower marketing expenses; $280,000 lower merchant credit card expenses; and $280,000 and $100,000, respectively, lower stationery and supplies expenses and data processing services. In addition, loan expense was $80,000 lower, postage was $70,000 lower and other real estate owned costs and operational losses were $60,000 and $20,000, respectively, lower than prior year. Comparing the first nine months of 1997 with the comparable period in 1996, non-interest expense increased $10.73 million. Major increases from the first nine months of 1996 relate to one-time costs of approximately $18.8 million in connection with the Merger. These costs are included in salaries and incentives, occupancy, professional fees, equipment, data processing services and courier service costs. Other real estate owned increased $170,000, principally due to write-downs net of sales of properties acquired in satisfaction of debt and operational losses were $100,000 higher than the comparable period of 1996. Partially offsetting these variances, other non-interest expense decreased $5.29 million from prior year principally due to the inclusion of $5.12 million of ValliCorp's costs related to merger and integration activities during 1996. Marketing related costs decreased $890,000 from the first nine months of 1996, mainly from reduced branch advertising and public relations costs. Credit card expenses decreased by $360,000. Stationery and supplies costs decreased by $260,000 as consolidation of operations required lower purchases and usage of inventories and loan expenses were $60,000 lower than the comparable period of 1996 mainly due to decreased activity after the mergers. Provision for Income Tax During the third quarter of 1997, the Company recorded income tax expense of $9.6 million compared to $5.9 million in the third quarter of 1996. On a year-to-date basis, income tax expense was $16.2 million for 1997 compared to $17.2 million in 1996. The provision recorded for the first nine months of 1997 represents an effective tax rate of 35.2 percent, compared to 33.3 percent for the first nine months of 1996. The provision for income taxes for all periods presented is directly attributable to the respective level of earnings and the non-tax deductible expenses incurred in connection with mergers and acquisitions. Asset Quality The Company closely monitors the markets in which it conducts its lending operations. The Company continues its strategy to control exposure to loans with high credit risk and increase diversification of earning assets. Asset reviews are performed using grading standards and criteria similar to those employed by bank regulatory agencies. Assets receiving lesser grades fall under the "classified assets" category, which includes all non-performing assets and potential problem loans, and receive an elevated level of attention to ensure collection. The following is a summary of classified assets on the dates indicated:
September 30, December 31, (In millions) -------------------- ------------- 1997 1996 1996 ------ ------ ------ Classified loans $69.3 $79.4 $62.9 Other classified assets 6.0 8.9 9.9 ------ ------ ------ Total classified assets $75.3 $88.3 $72.8 ====== ====== ====== Reserve for loan losses as a percentage of classified loans 73% 63% 81%
Classified loans at September 30, 1997, decreased $10.1 million or 13 percent to $69.3 million from September 30, 1996, principally due to sales and pay-offs of loans with real estate collateral and transfers to the other real estate owned category. The $6.4 million increase in classified loans from December 31, 1996 was mainly due to increases in commercial loans and other loans with real estate collateral. Non-performing Assets Non-performing assets include non-accrual loans, loans 90 days past due as to principal or interest and still accruing and other real estate owned. Loans are placed on non-accrual status when reaching 90 days or more delinquent, unless the loan is well secured and in the process of collection. Interest previously accrued on loans placed on non-accrual status is charged against interest income. In addition, loans secured by real estate with temporarily impaired values and commercial loans to borrowers experiencing financial difficulties are placed on non-accrual status even though the borrowers continue to repay the loans as scheduled. Such loans are classified as "performing non-accrual" and are included in total non-performing assets. Performing non-accrual loans are reinstated to accrual status when improvements in credit quality eliminate Management's doubt as to the full collectibility of both interest and principal and the loan is brought current. When the ability to fully collect non-accrual loan principal is in doubt, cash payments received are applied against the principal balance of the loan until such time as full collection of the remaining recorded balance is expected. Any subsequent interest received is recorded as interest income on a cash basis. The following is a summary of non-performing assets on the dates indicated:
September 30, December 31, (In millions) --------------------- ------------- 1997 1996 1996 ------- ------- -------- Non-accrual loans: Performing $4.68 $5.27 $4.29 Non-performing 15.64 17.82 12.55 ------- ------- ------- Total non-accrual loans 20.32 23.09 16.84 Restructured loans -- 0.26 0.22 Loans 90 days past due and still accruing 0.75 0.65 1.74 ------- ------- ------- Total non-performing loans 21.07 24.00 18.80 ------- ------- ------- Other real estate owned 6.02 8.92 9.91 ------- ------- ------- Total non-performing assets $27.09 $32.92 $28.71 ======= ======= ======= Reserve for loan losses as a percentage of non-performing loans 241% 207% 271%
Non-accrual loans decreased $2.77 million to $20.32 million at September 30, 1997 from $23.09 at September 30, 1996 and increased $3.48 million from $16.84 million outstanding at December 31, 1996. The reduction in balances of non-accrual loans from September, 1996 was principally due to write-offs, pay-offs and pay-downs net of additions of loans with real estate collateral and commercial loans. The increase from December 31, 1996 was mainly due to the addition of two large commercial real estate loans partially offset by write-offs, pay-offs and pay-downs. The change in the restructured loan category was due to one loan, maturing in December of 2002, categorized by ValliWide Bank as "Trouble Debt Restructure" but eliminated from the non-performing asset list as it has performed as agreed since its restructuring. The $2.90 million and $3.89 million decreases in other real estate owned balances from September 30, 1996 and December 31, 1996, respectively, were due to additions from non-accrual loans with real estate collateral net of liquidations, write-downs and sales. The amount of gross interest income that would have been recorded for non-accrual loans for the three and nine months ended September 30, 1997, if all such loans had been current in accordance with their original terms, was $509,000 and $1.2 million, respectively. The amount of interest income that was recognized on non-accrual loans from cash payments made during the three and nine months ended September 30, 1997 totaled $189,000 and $409,000, respectively, representing annualized yields of 3.34 percent and 3.31 percent, respectively. Cash payments received which were applied against the book balance of non-accrual loans outstanding at September 30, 1997, totaled $555,000. Reserve for Loan Losses It is the position of the Company that the level of the loan loss reserve is adequate to provide for losses that can be estimated based on anticipated specific and general conditions as determined by Management. These include credit loss experience, the amount of past due, non-performing and classified loans, recommendations of regulatory authorities and prevailing economic conditions. The reserve is allocated to segments of the loan portfolio based in part on quantitative analyses of historical credit loss experience. Criticized and classified loan balances are analyzed using both a linear regression model and standard allocation percentages. The results of these analyses are applied to current criticized and classified loan balances to allocate the reserve to the respective segments of the loan portfolio. In addition, loans with similar characteristics not usually criticized using regulatory guidelines due to their small balances and numerous accounts, are analyzed based on the historical rate of net losses and delinquency trends grouped by the number of days the payments on these loans are delinquent. While these factors are judgmental and may not be reduced to a purely mathematical formula, Management considers the reserve for loan losses, for the periods presented, to be adequate as a reserve against inherent losses. Management continues to evaluate the loan portfolio and assess current economic conditions that will dictate future required reserve levels. The following table summarizes the loan loss provision, net credit losses and loan loss reserve for the periods indicated:
For the three For the nine months ended months ended September 30, September 30, (In millions) --------------------- --------------------- 1997 1996 1997 1996 ------ ------- ------ ------- Balance, beginning of period $50.7 $46.6 $50.9 $48.5 Loan loss provision 1.7 3.2 6.3 9.2 Loans charged off (2.9) (2.7) (9.6) (12.6) Recoveries of previously charged-off loans 1.3 1.1 3.2 3.1 ------- ------- ------- ------- Net credit losses (1.6) (1.6) (6.4) (9.5) Reserve acquired through merger * -- 1.6 -- 1.6 ------- ------- ------- ------- Balance, end of period $50.8 $49.8 $50.8 $49.8 ======= ======= ======= ======= Reserve for loan losses as a percentage of loans outstanding 2.25% 2.16%
* As reported by ValliCorp, after its merger with Auburn Bancorp on September 1996, accounted for using the purchase method of accounting. Asset and Liability Management The fundamental objective of the Company's management of assets and liabilities is to maximize economic value while maintaining adequate liquidity and a conservative level of interest rate risk. The primary analytical tool used by the Company to gauge interest rate sensitivity is a simulation model used by many major banks and bank regulators. This model is used to simulate, based on the current and projected portfolio mix, the effects on net interest income of changes in market interest rates. Under the Company's policy and practice, the projected amount of net interest income over the ensuing twelve months is not allowed to fluctuate more than 10 percent even under alternate assumed interest rate changes of plus or minus 200 basis points. The results of the model indicate that the mix of interest rate sensitive assets and liabilities at September 30, 1997 would not result in a fluctuation of net income exceeding 10 percent. The Securities and Exchange Commission (SEC) has approved rule amendments to clarify and expand existing disclosure requirements for derivative financial instruments. The amendments require enhanced disclosure of accounting policies for derivative financial instruments in the footnotes to the financial statements. In addition, the amendments expand existing disclosure requirements to include quantitative and qualitative information about market risk inherent in market risk sensitive instruments. The required quantitative and qualitative information should be disclosed outside the financial statements and related notes thereto. The enhanced accounting policy disclosure requirements are effective for filings that include financial statements for fiscal periods ending after June 15, 1997. As the Company believes that the derivative financial instrument disclosures contained within the notes to the financial statements of its 1996 Form 10-K substantially conform with the accounting policy requirements of these rule amendments, no further interim disclosure has been provided. The rule amendments that require expanded disclosure of quantitative and qualitative information about market risk are effective with the 1997 Form 10-K. At September 30, 1997 and 1996, the Company had no derivative financial instruments outstanding. Liquidity The Company's principal source of asset liquidity is marketable investment securities available for sale. At September 30, 1997, investment securities available for sale totaled $974.1 million. This represents an increase of $97.4 million from September 30, 1996. The Company generates significant liquidity from its operating activities. The Company's profitability during the first nine months of 1997 and 1996 was the main contributor to the cash flows from operations for such periods of $64.3 million and $40.3 million, respectively. Cash flows are provided by and used in financing activities, primarily customer deposits, short-term borrowings from banks, extensions of long-term debt and repurchases of the Company's Common Stock. During the first nine months of 1997, $105.5 million was used by financing activities, including a $123.5 million decrease in deposits, a $23.0 million outflow used for purchasing the Company's common stock, dividends paid in the amount of $9.1 million and repayments of long-term debt for $1.4 million. These uses of cash were partially offset by $13.5 million provided by the issuance of new shares of common stock, principally for stock option exercises and a $38.0 million increase in short-term borrowings. This compares to the first nine months of 1996 when $141.4 million was used in financing activities, as a $116.6 million decrease in deposits combined with other cash flow uses including retirement of stock and dividends to shareholders of $26.9 million and $11.2 million, respectively, and a $13.4 million decrease in short-term borrowed funds were partially offset by the issuance of $22.5 million of the Company's Senior Notes and a $4.2 million increase in common stock principally from stock option exercises. The Company uses cash flows from operating and financing activities primarily to invest in securities and loans. During the first nine months of 1997, net repayments of loans were $16.7 million compared to $14.8 million during the same period in 1996. The Company continued to grow its investment securities portfolio in 1997, reflected in the $86.6 million increase, during the first nine months of 1997, in investment securities net of maturities and sales, compared to a decrease of $92.4 million during the same period of 1996. Costs related to the new facility to consolidate the Company's operations and back office functions to Fairfield, California, are included in purchases of property plant and equipment during the first nine months of 1996; costs related to branch restructurings are included in the purchases of property, plant and equipment, during the first nine months of 1997 and 1996. The Company anticipates increasing its cash level from operations through the end of 1997 due to increased profitability and retained earnings. For the same period, it is anticipated that the investment securities portfolio and demand for loans will moderately increase. The growth in deposit balances is expected to follow the anticipated growth in loan and investment balances through the end of 1997. Capital Resources The current and projected capital position of the Company and the impact of capital plans and long-term strategies is reviewed regularly by Management. The Company's capital position represents the level of capital available to support continued operations and expansion. The Company's primary capital resource is shareholders' equity which was $399.1 million at September 30, 1997, representing an increase of $32.3 million or 9 percent from September 30, 1996 and an increase of $19.8 million, or 5 percent, from December 31, 1996. As a result of the Company's profitability and the retention of earnings, the ratio of equity to total assets increased to 10.5 percent at September 30, 1997, from 9.5 percent a year ago and 9.8 percent as of December 31, 1996. The ratio of Tier I capital to risk-adjusted assets was 12.83 percent at September 30, 1997, compared to 12.52 percent at September 30, 1996 and 12.96 percent at December 31, 1996. Total capital to risk-adjusted assets was 14.78 percent at September 30, 1997 compared to 14.51 percent at June 30, 1996 and 14.95 percent at December 31, 1996. The following summarizes the ratios of capital to risk-adjusted assets for the periods indicated:
September 30, December 31, -------------------- ------------- 1997 1996 1996 ------ ------ ------- Tier I Capital 12.83% 12.52% 12.96% Total Capital 14.78% 14.51% 14.95% Leverage ratio 9.89% 9.25% 9.27%
The risk-based capital ratios increased at September 30, 1997 compared to September 30, 1996 as the increase in equity, principally due to the generation and retention of earnings, out paced the increase in risk-weighted assets. The reduction in capital ratios from December 31, 1996 is due to a relatively large increase in risk-weighted assets due in part to increases in loan balances and other assets. Capital ratios are reviewed on a regular basis to ensure that capital exceeds the prescribed regulatory minimums and is adequate to meet the Company's future needs. All ratios are in excess of the regulatory definition of "well capitalized". Since the beginning of 1994 through June 30, 1997, the Board of Directors of the Company authorized the repurchase of 914,050 shares of common stock from time to time, subject to appropriate regulatory and other accounting requirements. Pursuant to this program, 674,050 shares had been purchased through December 31, 1996, 12,500 were purchased during the first quarter of 1997, 168,200 were purchased during the second quarter of 1997 and 59,300 were purchased during the third quarter of 1997. During October, 1997, the Board of Directors further approved the continuing systematic repurchase of 240,000 additional shares in open-market transactions from time to time prior to November 1, 1998. Through a separate program, the Board of Directors also approved, during October 1997, the purchase from time to time in open-market and block transactions up to 70,000 shares. These purchases are conducted in accordance with the limitations and guidelines of rule 10b-18 and are made to lessen the dilutive impact of issuing new shares to meet stock performance, option plans, acquisitions and other requirements. Interim Periods In February, 1997, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS 128"). SFAS 128 establishes standards for computing and presenting earnings per share ("EPS") and applies to entities with publicly held common stock or potential common stock. SFAS 128 simplifies the standards for computing earnings per share previously found in APB Opinion No. 15, "Earnings per Share", and replaces the presentation of primary EPS with a presentation of basic EPS. It also requires dual presentation of basic and diluted EPS on the face of the income statement and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. SFAS 128 is effective for financial statements issued for periods ending after December 15, 1997, including interim periods; earlier application is not permitted. This statement requires restatement of all prior-period EPS data presented. The pro forma EPS amounts computed using this statement for the three and nine-month periods ended September 30, 1997 and 1996 are as follows:
For the three months (Dollars and shares in ended September 30, 1997 thousands except per --------------------------------------- share amounts) Per Share Net Income Shares Amount ---------- ------ ---------- Basic EPS: Income available to common shareholders $17,660 14,390 $1.23 Effect of dilutive securities: Stock options outstanding -- 279 -------- ------- Diluted EPS: Income available to common shareholders plus assumed conversions $17,660 14,669 $1.20 ======== ======= ======
For the three months (Dollars and shares in ended September 30, 1996 thousands except per --------------------------------------- share amounts) Per Share Net Income Shares Amount ---------- ------ ---------- Basic EPS: Income available to common shareholders $11,903 14,080 $0.85 Effect of dilutive securities: Stock options outstanding -- 270 -------- ------- Diluted EPS: Income available to common shareholders plus assumed conversions $11,903 14,350 $0.83 ======== ======= ======
For the nine months (Dollars and shares in ended September 30, 1997 thousands except per --------------------------------------- share amounts) Per Share Net Income Shares Amount ---------- ------ ---------- Basic EPS: Income available to common shareholders $29,838 14,355 $2.08 Effect of dilutive securities: Stock options outstanding -- 255 -------- ------- Diluted EPS: Income available to common shareholders plus assumed conversions $29,838 14,610 $2.04 ======== ======= ======
For the nine months (Dollars and shares in ended September 30, 1996 thousands except per --------------------------------------- share amounts) Per Share Net Income Shares Amount ---------- ------ ---------- Basic EPS: Income available to common shareholders $34,371 14,248 $2.41 Effect of dilutive securities: Stock options outstanding -- 269 -------- ------- Diluted EPS: Income available to common shareholders plus assumed conversions $34,371 14,517 $2.37 ======== ======= ======
In June 1997, the FASB issued Financial Accounting Standard No. 130, "Reporting Comprehensive Income" ("SFAS 130"). SFAS 130 is effective with the year-end 1998 financial statements; however, the total comprehensive income is required in the financial statements for interim periods beginning in 1998. In June 1997, the FASB issued Financial Accounting Standard No. 131, "Disclosure About Segments of An Enterprise and Related Information" ("SFAS 131"). SFAS 131 is effective with the year-end 1998 financial statements. Management believes that the adoption of these statements will not have a material impact on the Company's financial statements. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. WESTAMERICA BANCORPORATION (Registrant) Date: November 6, 1997 /s/ DENNIS R. HANSEN -------------------- Dennis R. Hansen Senior Vice President and Controller PART II - OTHER INFORMATION Item 1 - Legal Proceedings Due to the nature of the banking business, the Subsidiary Banks are at times party to various legal actions; all such actions are of a routine nature and arise in the normal course of business of the Subsidiary Banks. Item 2 - Changes in Securities None Item 3 - Defaults upon Senior Securities None Item 4 - Submission of Matters to a Vote of Security Holders None Item 5 - Other Information None Item 6 - Exhibits and Reports on Form 8-K (a) Exhibit 11: Computation of Earnings Per Share on Common and Common Equivalent Shares and on Common Shares Assuming Full Dilution (b) Exhibit 27 : Financial Data Schedule (c) Reports on Form 8-K: None EX-11 2 Exhibit 11 WESTAMERICA BANCORPORATION Computation of Earnings Per Share on Common and Common Equivalent Shares and on Common Shares Assuming Full Dilution (In thousands, except per share data)
For the three For the nine months ended months ended September 30, September 30, --------------------- ---------------------- 1997 1996 * 1997 1996 * ------- ------- -------- ------- Weighted average number of common shares outstanding 14,390 14,080 14,355 14,248 Add exercise of options reduced by the number of shares that could have been purchased with the proceeds from such exercise 279 270 255 269 ------- ------- ------- ------- Total 14,669 14,350 14,610 14,517 ======= ======= ======= ======= Net income $17,660 $11,903 $29,838 $34,371 Primary earnings per share $1.23 $0.85 $2.08 $2.41 ====== ====== ====== ====== Fully-diluted earnings per share $1.20 $0.83 $2.04 $2.37 ====== ====== ====== ======
* Restated on a historical basis to reflect the April 12, 1997, acquisition of ValliCorp Holdings, Inc. on a pooling-of-interests basis. EX-27 3
9 1,000 3-MOS 9-MOS 3-MOS 9-MOS DEC-31-1997 DEC-31-1997 DEC-31-1996 DEC-31-1996 JUL-01-1997 JAN-01-1997 JUL-01-1996 JAN-01-1996 SEP-30-1997 SEP-30-1997 SEP-30-1996 SEP-30-1996 0 246,485 0 342,867 0 2,302,136 0 2,430,876 0 0 0 77,700 0 0 0 0 0 974,149 0 876,701 0 234,731 0 219,744 0 237,497 0 220,620 0 2,256,422 0 2,301,541 0 50,764 0 49,795 0 3,816,895 0 3,856,759 0 3,105,176 0 3,220,093 0 205,476 0 172,660 0 49,690 0 33,366 0 57,500 0 63,896 0 0 0 0 0 0 0 0 0 196,994 0 186,007 0 202,059 0 180,737 0 3,816,895 0 3,856,759 51,233 151,606 51,239 154,224 17,217 49,184 15,395 46,401 27 1,629 1,009 3,370 68,477 202,419 67,643 203,995 19,394 57,544 19,312 57,609 22,170 66,189 22,879 68,750 46,307 136,230 44,764 135,245 1,650 6,250 3,152 9,154 0 136 9 56 26,203 111,948 32,965 101,221 27,230 46,073 17,846 51,543 17,660 29,838 11,903 34,371 0 0 0 0 0 0 0 0 17,660 29,838 11,903 34,371 1.23 2.08 .85 2.41 1.20 2.04 .83 2.37 5.69 5.62 5.47 5.52 0 20,318 0 23,095 0 748 0 651 0 0 0 257 0 0 0 0 50,742 50,920 46,615 48,494 2,894 9,626 2,701 12,568 1,266 3,220 1,063 3,049 50,764 50,764 49,794 49,794 0 50,764 0 49,794 0 0 0 0 0 18,405 0 24,177
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