UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
Form 8-K
_____________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event Reported): January 18, 2018
Westamerica Bancorporation
(Exact Name of Registrant as Specified in Charter)
California | 001-09383 | 94-2156203 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
1108 Fifth Avenue, San Rafael, California 94901 |
(Address of Principal Executive Offices) (Zip Code) |
(707) 863-6000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | ||
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 2.02. Results of Operations and Financial Condition.
On January 18, 2018, the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
Exhibit 99.1. Press release dated January 18, 2018
SIGNATURE
Pursuant to the requirements of the Securities 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 | ||
Date: January 18, 2018 | By: | /s/ John "Robert" Thorson |
John "Robert" Thorson | ||
Senior Vice President and Chief Financial Officer | ||
EXHIBIT 99.1
Westamerica Bancorporation Reports Fourth Quarter 2017 Financial Results
SAN RAFAEL, Calif., Jan. 18, 2018 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the fourth quarter 2017 of $4.2 million and diluted earnings per common share ("EPS") of $0.16. Fourth quarter 2017 results include adjustments to asset values triggered by enactment of the Tax Cuts and Jobs Act of 2017 which reduced EPS $0.48, recognition of a loss contingency which reduced EPS $0.12, and securities gains which increased EPS $0.18. Fourth quarter 2017 results compare to third quarter 2017 net income of $15.0 million and EPS of $0.57, and to fourth quarter 2016 net income of $14.5 million and EPS of $0.56.
"Fourth quarter 2017 net income benefited from higher net interest income; Westamerica’s annualized net interest margin on a fully taxable equivalent basis increased to 3.12 percent in the fourth quarter 2017 from 3.10 percent in the third quarter 2017. The margin is supported by a relatively low cost of funding, which has been steady at 0.04 percent of loans and investments from the fourth quarter of 2016 through the fourth quarter 2017. Asset quality remains very high with nonperforming assets totaling only $7.9 million at December 31, 2017 and net loan losses for the year 2017 were just 0.08 percent of average loan balances,” said Chairman, President and CEO David Payne. “After the accounting charges required by the new tax law, Westamerica’s capital position remains solid with total capital to assets of 10.7 percent at December 31, 2017 compared to 11.1 percent at September 30, 2017. Westamerica increased its quarterly dividend to $0.40 per common share in the fourth quarter 2017,” concluded Payne.
The annualized net interest margin on a fully taxable equivalent basis was 3.12 percent for the fourth quarter 2017, compared to 3.10 percent for the third quarter 2017, and 3.15 percent for the fourth quarter 2016. Net interest income on a fully taxable equivalent basis was $36.6 million for the fourth quarter 2017, compared to $35.7 million for the third quarter 2017, and $36.0 million for the fourth quarter 2016. The annualized funding cost of deposits and other interest-bearing borrowings, as a percentage of average earning assets, was unchanged at 0.04 percent for the fourth quarter 2017, third quarter 2017, and fourth quarter 2016. Checking and savings deposits, which earn relatively low interest rates and are less volatile than time deposits during periods of rising market interest rates, represented 95 percent of average total deposits during the fourth quarter 2017.
The Company recognized no provision for loan losses for the fourth quarter 2017 given stable nonperforming loan volumes and other credit quality attributes. At December 31, 2017, the allowance for loan losses totaled $23.0 million.
Noninterest income for the fourth quarter 2017 totaled $20.3 million, including $8.0 million in securities gains, compared to $12.5 million for the third quarter 2017 and $11.5 million for the fourth quarter 2016. Merchant processing fees were $2.3 million for the fourth quarter 2017, $2.2 million for the third quarter 2017 and $1.7 million for the fourth quarter 2016; the increase is due to successful sales efforts and increased processing volumes.
Noninterest expense for the fourth quarter 2017 totaled $30.2 million, including a $625 thousand impairment of low income housing limited partnership investments due to enactment of the Tax Cuts and Jobs Act of 2017 and a $5.5 million loss contingency accrual. As disclosed in the Company’s Form 8-K filed October 19, 2017 and Form 10-Q filed November 3, 2017, the Company has determined that it is obligated to provide refunds of revenue recognized in prior years to some customers; the Company has estimated the probable amount of these obligations and accrued a liability as of December 31, 2017.
The book tax provision on a fully taxable equivalent basis for the fourth quarter 2017 totaled $22.6 million, of which $12.3 million represents the charge to re-measure the Company’s net deferred tax asset triggered by enactment of the Tax Cuts and Jobs Act of 2017.
Westamerica Bancorporation, through its 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, 2016 filed on Form 10-K and quarterly report for the quarter ended September 30, 2017 filed on Form 10-Q, describe some of these factors, including certain credit, interest rate, operational, liquidity and market risks associated with the Company's business and operations. Other factors described in these reports include changes in business and economic conditions, competition, fiscal and monetary policies, disintermediation, legislation including the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2011, the Sarbanes-Oxley Act of 2002 and the Gramm-Leach-Bliley Act of 1999, and mergers and acquisitions.
Forward-looking statements speak only as of the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date forward looking statements are made.
Public Information January 18, 2018 | |||||||||
WESTAMERICA BANCORPORATION | |||||||||
FINANCIAL HIGHLIGHTS | |||||||||
December 31, 2017 | |||||||||
1. Net Income Summary. | |||||||||
(in thousands except per-share amounts) | |||||||||
% | |||||||||
Q4'17 | Q4'16 | Change | Q3'17 | ||||||
Net Interest and Fee Income (FTE) | $36,644 | $35,959 | 1.9 | % | $35,680 | ||||
Reversal of Provision for Loan Losses | - | - | n/m | - | |||||
Noninterest Income | 20,300 | 11,545 | 75.8 | % | 12,548 | ||||
Noninterest Expense | 30,167 | 24,577 | 22.7 | % | 24,114 | ||||
Income Before Taxes (FTE) | 26,777 | 22,927 | 16.8 | % | 24,114 | ||||
Income Tax Provision (FTE) | 22,617 | 8,474 | n/m | 9,097 | |||||
Net Income | $4,160 | $14,453 | -71.2 | % | $15,017 | ||||
Average Common Shares Outstanding | 26,384 | 25,773 | 2.4 | % | 26,309 | ||||
Diluted Average Common Shares | 26,538 | 25,925 | 2.4 | % | 26,404 | ||||
Operating Ratios: | |||||||||
Basic Earnings Per Common Share | $0.16 | $0.56 | -71.4 | % | $0.57 | ||||
Diluted Earnings Per Common Share | 0.16 | 0.56 | -71.4 | % | 0.57 | ||||
Return On Assets (a) | 0.30 | % | 1.07 | % | 1.09 | % | |||
Return On Common Equity (a) | 2.7 | % | 10.3 | % | 9.9 | % | |||
Net Interest Margin (FTE) (a) | 3.12 | % | 3.15 | % | 3.10 | % | |||
Efficiency Ratio (FTE) | 53.0 | % | 51.7 | % | 50.0 | % | |||
Dividends Paid Per Common Share | $0.40 | $0.39 | 2.6 | % | $0.39 | ||||
Common Dividend Payout Ratio | 250 | % | 70 | % | 68 | % | |||
% | |||||||||
12/31'17YTD | 12/31'16YTD | Change | | ||||||
Net Interest and Fee Income (FTE) | $144,118 | $145,077 | -0.7 | % | |||||
Reversal of Provision for Loan Losses | (1,900 | ) | (3,200 | ) | n/m | ||||
Noninterest Income | 56,628 | 46,574 | 21.6 | % | |||||
Noninterest Expense | 103,292 | 101,752 | 1.5 | % | |||||
Income Before Taxes (FTE) | 99,354 | 93,099 | 6.7 | % | |||||
Income Tax Provision (FTE) | 49,329 | 34,246 | 44.0 | % | |||||
Net Income | $50,025 | $58,853 | -15.0 | % | |||||
Average Common Shares Outstanding | 26,291 | 25,612 | 2.7 | % | |||||
Diluted Average Common Shares | 26,419 | 25,678 | 2.9 | % | |||||
Operating Ratios: | |||||||||
Basic Earnings Per Common Share | $1.90 | $2.30 | -17.4 | % | |||||
Diluted Earnings Per Common Share | 1.89 | 2.29 | -17.5 | % | |||||
Return On Assets | 0.92 | % | 1.12 | % | |||||
Return On Common Equity | 8.4 | % | 10.9 | % | |||||
Net Interest Margin (FTE) | 3.12 | % | 3.24 | % | |||||
Efficiency Ratio (FTE) | 51.5 | % | 53.1 | % | |||||
Dividends Paid Per Common Share | $1.57 | $1.56 | 0.6 | % | |||||
Common Dividend Payout Ratio | 83 | % | 68 | % | |||||
2. Net Interest Income. | |||||||||
(dollars in thousands) | |||||||||
% | |||||||||
Q4'17 | Q4'16 | Change | Q3'17 | ||||||
Interest and Fee Income (FTE) | $37,115 | $36,459 | 1.8 | % | $36,153 | ||||
Interest Expense | 471 | 500 | -5.8 | % | 473 | ||||
Net Interest and Fee Income (FTE) | $36,644 | $35,959 | 1.9 | % | $35,680 | ||||
Average Earning Assets | $4,682,897 | $4,561,619 | 2.7 | % | $4,587,848 | ||||
Average Interest- | |||||||||
Bearing Liabilities | 2,701,190 | 2,681,585 | 0.7 | % | 2,687,620 | ||||
Yield on Earning Assets (FTE) (a) | 3.16 | % | 3.19 | % | 3.14 | % | |||
Cost of Funds (a) | 0.04 | % | 0.04 | % | 0.04 | % | |||
Net Interest Margin (FTE) (a) | 3.12 | % | 3.15 | % | 3.10 | % | |||
Interest Expense/ | |||||||||
Interest-Bearing Liabilities (a) | 0.07 | % | 0.07 | % | 0.07 | % | |||
Net Interest Spread (FTE) (a) | 3.09 | % | 3.12 | % | 3.07 | % | |||
% | |||||||||
12/31'17YTD | 12/31'16YTD | Change | |||||||
Interest and Fee Income (FTE) | $146,018 | $147,193 | -0.8 | % | |||||
Interest Expense | 1,900 | 2,116 | -10.2 | % | |||||
Net Interest and Fee Income (FTE) | $144,118 | $145,077 | -0.7 | % | |||||
Average Earning Assets | $4,622,339 | $4,476,755 | 3.3 | % | |||||
Average Interest- | |||||||||
Bearing Liabilities | 2,696,399 | 2,624,688 | 2.7 | % | |||||
Yield on Earning Assets (FTE) | 3.16 | % | 3.29 | % | |||||
Cost of Funds | 0.04 | % | 0.05 | % | |||||
Net Interest Margin (FTE) | 3.12 | % | 3.24 | % | |||||
Interest Expense/ | |||||||||
Interest-Bearing Liabilities | 0.07 | % | 0.08 | % | |||||
Net Interest Spread (FTE) | 3.09 | % | 3.21 | % | |||||
3. Loans & Other Earning Assets. | |||||||||
(average volume, dollars in thousands) | |||||||||
% | |||||||||
Q4'17 | Q4'16 | Change | Q3'17 | ||||||
Total Assets | $5,534,700 | $5,370,412 | 3.1 | % | $5,441,612 | ||||
Total Earning Assets | 4,682,897 | 4,561,619 | 2.7 | % | 4,587,848 | ||||
Total Loans | 1,285,748 | 1,356,350 | -5.2 | % | 1,287,740 | ||||
Commercial Loans | 327,790 | 349,022 | -6.1 | % | 324,727 | ||||
Commercial RE Loans | 575,984 | 546,145 | 5.5 | % | 566,794 | ||||
Consumer Loans | 381,974 | 461,183 | -17.2 | % | 396,219 | ||||
Total Investment Securities | 3,397,149 | 3,205,269 | 6.0 | % | 3,300,108 | ||||
Available For Sale (Market) | 2,216,054 | 1,821,998 | 21.6 | % | 2,066,568 | ||||
Held To Maturity | 1,181,095 | 1,383,271 | -14.6 | % | 1,233,540 | ||||
Unrealized (Loss) Gain | (3,522 | ) | (5,571 | ) | n/m | 4,039 | |||
Loans/Deposits | 26.7 | % | 28.8 | % | 27.3 | % | |||
% | |||||||||
12/31'17YTD | 12/31'16YTD | Change | |||||||
Total Assets | $5,439,682 | $5,246,144 | 3.7 | % | |||||
Total Earning Assets | 4,622,339 | 4,476,755 | 3.3 | % | |||||
Total Loans | 1,315,202 | 1,424,259 | -7.7 | % | |||||
Commercial Loans | 339,234 | 354,831 | -4.4 | % | |||||
Commercial RE Loans | 567,006 | 590,012 | -3.9 | % | |||||
Consumer Loans | 408,962 | 479,416 | -14.7 | % | |||||
Total Investment Securities | 3,307,137 | 3,052,496 | 8.3 | % | |||||
Available For Sale (Market) | 2,052,456 | 1,651,500 | 24.3 | % | |||||
Held To Maturity | 1,254,681 | 1,400,996 | -10.4 | % | |||||
Unrealized Loss | (3,522 | ) | (5,571 | ) | n/m | ||||
Loans/Deposits | 27.9 | % | 31.0 | % | |||||
4. Deposits, Other Interest-Bearing Liabilities & Equity. | |||||||||
(average volume, dollars in thousands) | |||||||||
% | |||||||||
Q4'17 | Q4'16 | Change | Q3'17 | ||||||
Total Deposits | $4,811,035 | $4,702,129 | 2.3 | % | $4,714,579 | ||||
Noninterest Demand | 2,172,678 | 2,077,213 | 4.6 | % | 2,103,042 | ||||
Interest Bearing Transaction | 899,822 | 871,947 | 3.2 | % | 891,532 | ||||
Savings | 1,501,872 | 1,492,748 | 0.6 | % | 1,475,969 | ||||
Time greater than $100K | 106,746 | 113,781 | -6.2 | % | 108,673 | ||||
Time less than $100K | 129,917 | 146,440 | -11.3 | % | 135,363 | ||||
Total Short-Term Borrowings | 62,833 | 56,669 | 10.9 | % | 76,083 | ||||
Shareholders' Equity | 610,200 | 558,057 | 9.3 | % | 599,473 | ||||
Demand Deposits/ | |||||||||
Total Deposits | 45.2 | % | 44.2 | % | 44.6 | % | |||
Transaction & Savings | |||||||||
Deposits / Total Deposits | 95.1 | % | 94.5 | % | 94.8 | % | |||
12/31'17YTD | 12/31'16YTD | Change | |||||||
Total Deposits | $4,722,250 | $4,590,351 | 2.9 | % | |||||
Noninterest Demand | 2,095,522 | 2,026,939 | 3.4 | % | |||||
Interest Bearing Transaction | 888,116 | 862,581 | 3.0 | % | |||||
Savings | 1,492,725 | 1,428,059 | 4.5 | % | |||||
Time greater than $100K | 109,563 | 118,750 | -7.7 | % | |||||
Time less than $100K | 136,324 | 154,022 | -11.5 | % | |||||
Total Short-Term Borrowings | 69,671 | 61,276 | 13.7 | % | |||||
Shareholders' Equity | 596,356 | 542,301 | 10.0 | % | |||||
Demand Deposits/ | |||||||||
Total Deposits | 44.4 | % | 44.2 | % | |||||
Transaction & Savings | |||||||||
Deposits / Total Deposits | 94.8 | % | 94.1 | % | |||||
5. Interest Yields Earned & Rates Paid. | |||||||||
(dollars in thousands) | |||||||||
Q4'17 | |||||||||
Average | Income/ | Yield (a) / | |||||||
Volume | Expense | Rate | |||||||
Interest & Fee Income Earned | |||||||||
Total Earning Assets (FTE) | $4,682,897 | $37,115 | 3.16 | % | |||||
Total Loans (FTE) | 1,285,748 | 15,671 | 4.84 | % | |||||
Commercial Loans (FTE) | 327,790 | 4,168 | 5.05 | % | |||||
Commercial RE Loans | 575,984 | 8,009 | 5.52 | % | |||||
Consumer Loans | 381,974 | 3,494 | 3.63 | % | |||||
Total Investments (FTE) | 3,397,149 | 21,444 | 2.52 | % | |||||
Interest Expense Paid | |||||||||
Total Earning Assets | 4,682,897 | 471 | 0.04 | % | |||||
Total Interest-Bearing Liabilities | 2,701,190 | 471 | 0.07 | % | |||||
Total Interest-Bearing Deposits | 2,638,357 | 461 | 0.07 | % | |||||
Interest-Bearing Transaction | 899,822 | 60 | 0.03 | % | |||||
Savings | 1,501,872 | 225 | 0.06 | % | |||||
Time less than $100K | 129,917 | 75 | 0.23 | % | |||||
Time greater than $100K | 106,746 | 101 | 0.38 | % | |||||
Total Short-Term Borrowings | 62,833 | 10 | 0.06 | % | |||||
Net Interest Income and | |||||||||
Margin (FTE) | $36,644 | 3.12 | % | ||||||
Q4'16 | |||||||||
Average | Income/ | Yield (a) / | |||||||
Volume | Expense | Rate | |||||||
Interest & Fee Income Earned | |||||||||
Total Earning Assets (FTE) | $4,561,619 | $36,459 | 3.19 | % | |||||
Total Loans (FTE) | 1,356,350 | 16,526 | 4.85 | % | |||||
Commercial Loans (FTE) | 349,022 | 4,084 | 4.66 | % | |||||
Commercial RE Loans | 546,145 | 8,386 | 6.11 | % | |||||
Consumer Loans | 461,183 | 4,056 | 3.50 | % | |||||
Total Investments (FTE) | 3,205,269 | 19,933 | 2.49 | % | |||||
Interest Expense Paid | |||||||||
Total Earning Assets | 4,561,619 | 500 | 0.04 | % | |||||
Total Interest-Bearing Liabilities | 2,681,585 | 500 | 0.07 | % | |||||
Total Interest-Bearing Deposits | 2,624,916 | 491 | 0.07 | % | |||||
Interest-Bearing Transaction | 871,947 | 58 | 0.03 | % | |||||
Savings | 1,492,748 | 230 | 0.06 | % | |||||
Time less than $100K | 146,440 | 90 | 0.24 | % | |||||
Time greater than $100K | 113,781 | 113 | 0.40 | % | |||||
Total Short-Term Borrowings | 56,669 | 9 | 0.06 | % | |||||
Net Interest Income and | |||||||||
Margin (FTE) | $35,959 | 3.15 | % | ||||||
6. Noninterest Income. | |||||||||
(dollars in thousands except per-share amounts) | |||||||||
% | |||||||||
Q4'17 | Q4'16 | Change | Q3'17 | ||||||
Service Charges on Deposits | $4,756 | $5,064 | -6.1 | % | $4,989 | ||||
Merchant Processing Services | 2,346 | 1,678 | 39.8 | % | 2,153 | ||||
Debit Card Fees | 1,569 | 1,566 | 0.2 | % | 1,784 | ||||
Other Service Fees | 620 | 620 | 0.1 | % | 652 | ||||
ATM Processing Fees | 696 | 551 | 26.4 | % | 684 | ||||
Trust Fees | 739 | 682 | 8.4 | % | 718 | ||||
Financial Services Commissions | 155 | 157 | -1.4 | % | 148 | ||||
Securities Gains | 7,955 | - | n/m | - | |||||
Other Income | 1,464 | 1,227 | 19.3 | % | 1,420 | ||||
Total Noninterest Income | $20,300 | $11,545 | 75.8 | % | $12,548 | ||||
Total Revenue (FTE) | $56,944 | $47,504 | 19.9 | % | $48,228 | ||||
Noninterest Income/Revenue (FTE) | 35.6 | % | 24.3 | % | 26.0 | % | |||
Service Charges/Avg. Deposits (a) | 0.39 | % | 0.43 | % | 0.42 | % | |||
Total Revenues (FTE) Per Avg. | |||||||||
Common Share (a) | $8.56 | $7.33 | 16.8 | % | $7.27 | ||||
% | |||||||||
12/31'17YTD | 12/31'16YTD | Change | |||||||
Service Charges on Deposits | $19,612 | $20,854 | -6.0 | % | |||||
Merchant Processing Services | 8,426 | 6,377 | 32.1 | % | |||||
Debit Card Fees | 6,421 | 6,290 | 2.1 | % | |||||
Other Service Fees | 2,584 | 2,571 | 0.5 | % | |||||
ATM Processing Fees | 2,610 | 2,411 | 8.2 | % | |||||
Trust Fees | 2,875 | 2,686 | 7.0 | % | |||||
Financial Services Commissions | 639 | 568 | 12.6 | % | |||||
Securities Gains | 7,955 | - | n/m | ||||||
Other Income | 5,506 | 4,817 | 14.3 | % | |||||
Total Noninterest Income | $56,628 | $46,574 | 21.6 | % | |||||
Total Revenue (FTE) | $200,746 | $191,651 | 4.7 | % | |||||
Noninterest Income/Revenue (FTE) | 28.2 | % | 24.3 | % | |||||
Service Charges/Avg. Deposits | 0.42 | % | 0.45 | % | |||||
Total Revenues (FTE) Per Avg. | |||||||||
Common Share | $7.64 | $7.48 | 2.0 | % | |||||
7. Noninterest Expense. | |||||||||
(dollars in thousands) | |||||||||
% | |||||||||
Q4'17 | Q4'16 | Change | Q3'17 | ||||||
Salaries & Benefits | $12,652 | $12,439 | 1.7 | % | $12,816 | ||||
Loss Contingency (2) | 5,542 | 3 | n/m | - | |||||
Occupancy and Equipment | 4,860 | 4,860 | 0.0 | % | 4,907 | ||||
Outsourced Data Processing | 2,325 | 2,131 | 9.1 | % | 2,383 | ||||
Amortization of | |||||||||
Identifiable Intangibles | 755 | 863 | -12.4 | % | 760 | ||||
Professional Fees | 627 | 797 | -21.3 | % | 512 | ||||
Impairment of Tax Credit Investments | 625 | - | n/m | - | |||||
Courier Service | 423 | 494 | -14.4 | % | 451 | ||||
Other Operating | 2,358 | 2,990 | -21.2 | % | 2,285 | ||||
Total Noninterest Expense | $30,167 | $24,577 | 22.7 | % | $24,114 | ||||
Noninterest Expense/ | |||||||||
Avg. Earning Assets (a) | 2.56 | % | 2.14 | % | 2.09 | % | |||
Noninterest Expense/Revenues (FTE) | 53.0 | % | 51.7 | % | 50.0 | % | |||
% | |||||||||
12/31'17YTD | 12/31'16YTD | Change | |||||||
Salaries & Benefits | $51,519 | $51,507 | 0.0 | % | |||||
Loss Contingency (2) | 5,542 | 3 | n/m | ||||||
Occupancy and Equipment | 19,430 | 19,017 | 2.2 | % | |||||
Outsourced Data Processing | 9,035 | 8,505 | 6.2 | % | |||||
Amortization of | |||||||||
Identifiable Intangibles | 3,077 | 3,504 | -12.2 | % | |||||
Professional Fees | 2,161 | 3,980 | -45.7 | % | |||||
Impairment of Tax Credit Investments | 625 | - | n/m | ||||||
Courier Service | 1,732 | 1,952 | -11.3 | % | |||||
Other Operating | 10,171 | 13,284 | -23.4 | % | |||||
Total Noninterest Expense | $103,292 | $101,752 | 1.5 | % | |||||
Noninterest Expense/ | |||||||||
Avg. Earning Assets | 2.23 | % | 2.27 | % | |||||
Noninterest Expense/Revenues (FTE) | 51.5 | % | 53.1 | % | |||||
8. Allowance for Loan Losses. | |||||||||
(dollars in thousands) | |||||||||
% | |||||||||
Q4'17 | Q4'16 | Change | Q3'17 | ||||||
Average Total Loans | $1,285,748 | $1,356,350 | -5.2 | % | $1,287,740 | ||||
Allowance for Loan Loss (ALL) | |||||||||
Beginning of Period | $23,628 | $26,359 | -10.4 | % | $24,103 | ||||
Reversal of Provision for Loan Losses | - | - | n/m | - | |||||
Net ALL Losses | (619 | ) | (405 | ) | n/m | (475 | ) | ||
ALL End of Period | $23,009 | $25,954 | -11.3 | % | $23,628 | ||||
ALL Recoveries/Gross ALL Losses | 47 | % | 66 | % | 53 | % | |||
Net ALL Losses /Avg. Total Loans (a) | 0.19 | % | 0.12 | % | 0.15 | % | |||
% | |||||||||
12/31'17YTD | 12/31'16YTD | Change | |||||||
Average Total Loans | $1,315,202 | $1,424,259 | -7.7 | % | |||||
Allowance for Loan Loss (ALL) | |||||||||
Beginning of Period | $25,954 | $29,771 | -12.8 | % | |||||
Reversal of Provision for Loan Losses | (1,900 | ) | (3,200 | ) | n/m | ||||
Net ALL Losses | (1,045 | ) | (617 | ) | n/m | ||||
ALL End of Period | $23,009 | $25,954 | -11.3 | % | |||||
ALL Recoveries/Gross ALL Losses | 82 | % | 91 | % | |||||
Net ALL Losses /Avg. Total Loans | 0.08 | % | 0.04 | % | |||||
9. Credit Quality. | |||||||||
(dollars in thousands) | |||||||||
% | |||||||||
12/31/17 | 12/31/16 | Change | 9/30/17 | ||||||
Nonperforming Loans (1): | |||||||||
Nonperforming Nonaccrual | $1,641 | $3,956 | -58.5 | % | $1,498 | ||||
Performing Nonaccrual | 4,285 | 4,429 | -3.2 | % | 4,285 | ||||
Total Nonaccrual Loans | 5,926 | 8,385 | -29.3 | % | 5,783 | ||||
90+ Days Past Due Accruing Loans | 531 | 497 | 6.8 | % | 434 | ||||
Total | 6,457 | 8,882 | -27.3 | % | 6,217 | ||||
Repossessed Loan Collateral (1) | 1,426 | 3,095 | -53.9 | % | 1,426 | ||||
Total Nonperforming Assets (1) | $7,883 | $11,977 | -34.2 | % | $7,643 | ||||
Total Loans Outstanding | $1,287,982 | $1,352,711 | -4.8 | % | $1,284,782 | ||||
Total Assets | $5,513,046 | $5,366,083 | 2.7 | % | $5,445,808 | ||||
Loans: | |||||||||
Allowance for Loan Losses | $23,009 | $25,954 | -11.3 | % | $23,628 | ||||
Allowance/Loans | 1.79 | % | 1.92 | % | 1.84 | % | |||
Nonperforming Loans/Total Loans | 0.50 | % | 0.66 | % | 0.48 | % | |||
10. Capital. | |||||||||
(in thousands, except per-share amounts) | |||||||||
% | |||||||||
12/31/17 | 12/31/16 | Change | 9/30/17 | ||||||
Shareholders' Equity | $590,239 | $561,367 | 5.1 | % | $603,957 | ||||
Total Assets | 5,513,046 | 5,366,083 | 2.7 | % | 5,445,808 | ||||
Shareholders' Equity/ | |||||||||
Total Assets | 10.71 | % | 10.46 | % | 11.09 | % | |||
Shareholders' Equity/ | |||||||||
Total Loans | 45.83 | % | 41.50 | % | 47.01 | % | |||
Tangible Common Equity Ratio | 8.63 | % | 8.26 | % | 8.98 | % | |||
Common Shares Outstanding | 26,425 | 25,907 | 2.0 | % | 26,319 | ||||
Common Equity Per Share | $22.34 | $21.67 | 3.1 | % | $22.95 | ||||
Market Value Per Common Share | $59.55 | $62.93 | -5.4 | % | $59.54 | ||||
Share Repurchase Programs | |||||||||
(shares in thousands) | |||||||||
% | |||||||||
Q4'17 | Q4'16 | Change | Q3'17 | ||||||
Total Shares Repurchased | - | - | n/m | - | |||||
Average Repurchase Price | $- | $- | n/m | $- | |||||
Net Shares Issued | (106 | ) | (242 | ) | n/m | (15 | ) | ||
% | |||||||||
12/31'17YTD | 12/31'16YTD | Change | |||||||
Total Shares Repurchased | 6 | 137 | n/m | ||||||
Average Repurchase Price | $56.51 | $41.94 | n/m | ||||||
Net Shares Issued | (518 | ) | (379 | ) | n/m | ||||
11. Period-End Balance Sheets. | |||||||||
(unaudited, dollars in thousands) | |||||||||
% | |||||||||
12/31/17 | 12/31/16 | Change | 9/30/17 | ||||||
Assets: | |||||||||
Cash and Due from Banks | $575,002 | $462,271 | 24.4 | % | $561,757 | ||||
Investment Securities: | |||||||||
Available For Sale | 2,193,507 | 1,890,758 | 16.0 | % | 2,090,477 | ||||
Held to Maturity | 1,158,864 | 1,346,312 | -13.9 | % | 1,204,240 | ||||
Loans | 1,287,982 | 1,352,711 | -4.8 | % | 1,284,782 | ||||
Allowance For Loan Losses | (23,009 | ) | (25,954 | ) | -11.3 | % | (23,628 | ) | |
Total Loans, net | 1,264,973 | 1,326,757 | -4.7 | % | 1,261,154 | ||||
Other Real Estate Owned | 1,426 | 3,095 | -53.9 | % | 1,426 | ||||
Premises and Equipment, net | 35,301 | 36,566 | -3.5 | % | 35,507 | ||||
Identifiable Intangibles, net | 3,850 | 6,927 | -44.4 | % | 4,605 | ||||
Goodwill | 121,673 | 121,673 | 0.0 | % | 121,673 | ||||
Other Assets | 158,450 | 171,724 | -7.7 | % | 164,969 | ||||
Total Assets | $5,513,046 | $5,366,083 | 2.7 | % | $5,445,808 | ||||
Liabilities and Shareholders' Equity: | |||||||||
Deposits: | |||||||||
Noninterest Bearing | $2,197,526 | $2,089,443 | 5.2 | % | $2,128,342 | ||||
Interest-Bearing Transaction | 904,245 | 865,701 | 4.5 | % | 873,145 | ||||
Savings | 1,494,024 | 1,493,427 | 0.0 | % | 1,491,168 | ||||
Time | 231,818 | 256,170 | -9.5 | % | 241,925 | ||||
Total Deposits | 4,827,613 | 4,704,741 | 2.6 | % | 4,734,580 | ||||
Short-Term Borrowed Funds | 58,471 | 59,078 | -1.0 | % | 66,337 | ||||
Other Liabilities | 36,723 | 40,897 | -10.2 | % | 40,934 | ||||
Total Liabilities | 4,922,807 | 4,804,716 | 2.5 | % | 4,841,851 | ||||
Shareholders' Equity: | |||||||||
Common Equity: | |||||||||
Paid-In Capital | 433,267 | 406,139 | 6.7 | % | 427,188 | ||||
Accumulated Other | |||||||||
Comprehensive Loss | (16,832 | ) | (10,074 | ) | n/m | (3,433 | ) | ||
Retained Earnings | 173,804 | 165,302 | 5.1 | % | 180,202 | ||||
Total Shareholders' Equity | 590,239 | 561,367 | 5.1 | % | 603,957 | ||||
Total Liabilities and | |||||||||
Shareholders' Equity | $5,513,046 | $5,366,083 | 2.7 | % | $5,445,808 | ||||
12. Income Statements. | |||||||||
(unaudited, in thousands except per-share amounts) | |||||||||
% | |||||||||
Q4'17 | Q4'16 | Change | Q3'17 | ||||||
Interest & Fee Income: | |||||||||
Loans | $15,410 | $16,235 | -5.1 | % | $15,082 | ||||
Investment Securities: | |||||||||
Available for Sale | 12,359 | 9,422 | 31.2 | % | 11,347 | ||||
Held to Maturity | 6,435 | 7,552 | -14.8 | % | 6,716 | ||||
Total Interest & Fee Income | 34,204 | 33,209 | 3.0 | % | 33,145 | ||||
Interest Expense: | |||||||||
Transaction Deposits | 60 | 58 | 3.1 | % | 60 | ||||
Savings Deposits | 225 | 230 | -2.3 | % | 220 | ||||
Time Deposits | 176 | 203 | -13.1 | % | 181 | ||||
Short-Term Borrowed Funds | 10 | 9 | 13.6 | % | 12 | ||||
Total Interest Expense | 471 | 500 | -5.8 | % | 473 | ||||
Net Interest Income | 33,733 | 32,709 | 3.1 | % | 32,672 | ||||
Reversal of Provision for Loan Losses | - | - | n/m | - | |||||
Noninterest Income: | |||||||||
Service Charges | 4,756 | 5,064 | -6.1 | % | 4,989 | ||||
Merchant Processing Services | 2,346 | 1,678 | 39.8 | % | 2,153 | ||||
Debit Card Fees | 1,569 | 1,566 | 0.2 | % | 1,784 | ||||
Other Service Fees | 620 | 620 | 0.1 | % | 652 | ||||
ATM Processing Fees | 696 | 551 | 26.4 | % | 684 | ||||
Trust Fees | 739 | 682 | 8.4 | % | 718 | ||||
Financial Services Commissions | 155 | 157 | -1.4 | % | 148 | ||||
Securities Gains | 7,955 | - | n/m | - | |||||
Other | 1,464 | 1,227 | 19.3 | % | 1,420 | ||||
Total Noninterest Income | 20,300 | 11,545 | 75.8 | % | 12,548 | ||||
Noninterest Expense: | |||||||||
Salaries and Benefits | 12,652 | 12,439 | 1.7 | % | 12,816 | ||||
Loss Contingency (2) | 5,542 | 3 | n/m | - | |||||
Occupancy and Equipment | 4,860 | 4,860 | 0.0 | % | 4,907 | ||||
Outsourced Data Processing | 2,325 | 2,131 | 9.1 | % | 2,383 | ||||
Amortization of Identifiable Intangibles | 755 | 863 | -12.4 | % | 760 | ||||
Professional Fees | 627 | 797 | -21.3 | % | 512 | ||||
Impairment of Tax Credit Investments | 625 | - | n/m | - | |||||
Courier Service | 423 | 494 | -14.4 | % | 451 | ||||
Other | 2,358 | 2,990 | -21.2 | % | 2,285 | ||||
Total Noninterest Expense | 30,167 | 24,577 | 22.7 | % | 24,114 | ||||
Income Before Income Taxes | 23,866 | 19,677 | 21.3 | % | 21,106 | ||||
Income Tax Provision | 19,706 | 5,224 | n/m | 6,089 | |||||
Net Income | $4,160 | $14,453 | -71.2 | % | $15,017 | ||||
Average Common Shares Outstanding | 26,384 | 25,773 | 2.4 | % | 26,309 | ||||
Diluted Common Shares Outstanding | 26,538 | 25,925 | 2.4 | % | 26,404 | ||||
Per Common Share Data: | |||||||||
Basic Earnings | $0.16 | $0.56 | -71.4 | % | $0.57 | ||||
Diluted Earnings | 0.16 | 0.56 | -71.4 | % | 0.57 | ||||
Dividends Paid | 0.40 | 0.39 | 2.6 | % | 0.39 | ||||
% | |||||||||
12/31'17YTD | 12/31'16YTD | Change | |||||||
Interest & Fee Income: | |||||||||
Loans | $61,740 | $69,139 | -10.7 | % | |||||
Investment Securities: | |||||||||
Available for Sale | 44,664 | 34,276 | 30.3 | % | |||||
Held to Maturity | 27,432 | 30,636 | -10.5 | % | |||||
Total Interest & Fee Income | 133,836 | 134,051 | -0.2 | % | |||||
Interest Expense: | |||||||||
Transaction Deposits | 233 | 259 | -10.0 | % | |||||
Savings Deposits | 890 | 907 | -1.8 | % | |||||
Time Deposits | 733 | 911 | -19.6 | % | |||||
Short-Term Borrowed Funds | 44 | 39 | 12.5 | % | |||||
Total Interest Expense | 1,900 | 2,116 | -10.2 | % | |||||
Net Interest Income | 131,936 | 131,935 | 0.0 | % | |||||
Reversal of Provision for Loan Losses | (1,900 | ) | (3,200 | ) | n/m | ||||
Noninterest Income: | |||||||||
Service Charges | 19,612 | 20,854 | -6.0 | % | |||||
Merchant Processing Services | 8,426 | 6,377 | 32.1 | % | |||||
Debit Card Fees | 6,421 | 6,290 | 2.1 | % | |||||
Other Service Fees | 2,584 | 2,571 | 0.5 | % | |||||
ATM Processing Fees | 2,610 | 2,411 | 8.2 | % | |||||
Trust Fees | 2,875 | 2,686 | 7.0 | % | |||||
Financial Services Commissions | 639 | 568 | 12.6 | % | |||||
Securities Gains | 7,955 | - | n/m | ||||||
Other | 5,506 | 4,817 | 14.3 | % | |||||
Total Noninterest Income | 56,628 | 46,574 | 21.6 | % | |||||
Noninterest Expense: | |||||||||
Salaries and Benefits | 51,519 | 51,507 | 0.0 | % | |||||
Loss Contingency (2) | 5,542 | 3 | n/m | ||||||
Occupancy and Equipment | 19,430 | 19,017 | 2.2 | % | |||||
Outsourced Data Processing | 9,035 | 8,505 | 6.2 | % | |||||
Amortization of Identifiable Intangibles | 3,077 | 3,504 | -12.2 | % | |||||
Professional Fees | 2,161 | 3,980 | -45.7 | % | |||||
Impairment of Tax Credit Investments | 625 | - | n/m | ||||||
Courier Service | 1,732 | 1,952 | -11.3 | % | |||||
Other | 10,171 | 13,284 | -23.4 | % | |||||
Total Noninterest Expense | 103,292 | 101,752 | 1.5 | % | |||||
Income Before Income Taxes | 87,172 | 79,957 | 9.0 | % | |||||
Income Tax Provision | 37,147 | 21,104 | 76.0 | % | |||||
Net Income | $50,025 | $58,853 | -15.0 | % | |||||
Average Common Shares Outstanding | 26,291 | 25,612 | 2.7 | % | |||||
Diluted Common Shares Outstanding | 26,419 | 25,678 | 2.9 | % | |||||
Per Common Share Data: | |||||||||
Basic Earnings | $1.90 | $2.30 | -17.4 | % | |||||
Diluted Earnings | 1.89 | 2.29 | -17.5 | % | |||||
Dividends Paid | 1.57 | 1.56 | 0.6 | % | |||||
Footnotes and Abbreviations: | |||||||||
(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 relatively large 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 | |||||||||
(1) All originated and purchased non performing loans and repossessed loan collateral have been combined as of Q1 '17. Prior period presentation has been updated, accordingly. | |||||||||
(2) Represents the Company's estimated refunds to customers of revenue recognized in prior years. | |||||||||