Westamerica Bancorporation Reports First Quarter 2020 Financial Results

SAN RAFAEL, Calif., April 16, 2020 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the first quarter 2020 of $17.0 million and diluted earnings per common share ("EPS") of $0.63. First quarter 2020 results include a provision for credit losses of $4.3 million, which reduced EPS $0.11, representing Management’s estimate of additional reserves needed over the remaining life of its loans due to increased credit-risk from deteriorating economic conditions caused by the Covid-19 pandemic. These results compare to net income of $20.7 million and EPS of $0.77 for the fourth quarter 2019 and net income of $19.6 million and EPS of $0.73 for the first quarter 2019.

"Westamerica’s primary objective during the Covid-19 pandemic is to operate without interruption for our customers. As of today, our staffing levels are unaffected, our operating systems remain fully functional, and all but one of our branches are open. The business environment is highly uncertain at this time given the Covid-19 impacts on society and the economy. Westamerica’s annualized net interest margin increased to 3.10 percent for the first quarter 2020 from 3.08 percent in the fourth quarter 2019. Operating expenses were $24.7 million for the first quarter 2020, representing only 47 percent of revenues on a fully-taxable equivalent basis. First quarter 2020 results generated an annualized 9.7 percent return on average common equity, and shareholders were paid a $0.41 per common share dividend during the quarter,” said Chairman, President and CEO David Payne. “The well-being of our customers, employees and communities is of principal concern during this difficult period,” concluded Payne.

Net interest income on a fully-taxable equivalent (FTE) basis was $40.5 million for the first quarter 2020, compared to $40.5 million for the fourth quarter 2019 and $40.2 million for the first quarter 2019. The annualized net interest margin (FTE) was 3.10 percent for the first quarter 2020, compared to 3.08 percent for the fourth quarter 2019 and 3.12 percent for the first quarter 2019. The Federal Open Market Committee (“FOMC”) reduced the interest rate paid on required reserves and excess reserve balances to 0.10 percent on March 16, 2020, which reduced the interest earned on Westamerica’s interest-bearing cash balances. Westamerica has taken loan applications under the United States Small Business Administration’s Paycheck Protection Program. Westamerica’s interest-bearing loans and investment securities are funded exclusively by shareholders’ equity and customers’ deposits. Checking and savings deposits represented ninety-six percent of the Company’s average deposit base during the first quarter 2020. Average deposit volumes during the first quarter 2020 of $4,829 million were stable compared to average deposit volumes during the fourth quarter 2019 and first quarter 2019 of $4,840 million and $4,835 million, respectively. The Company has no debt.

The Company adopted Accounting Standards Update 2016-13, “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments” (“CECL”), effective January 1, 2020 with a net-of-tax increase to shareholders’ equity of $52 thousand. The Covid-19 environment, which developed after the CECL implementation, has caused deteriorating economic conditions, including a record number of California-based initial claims for unemployment in March 2020. Management expects developing increases in unemployment to result in higher credit-related losses, particularly consumer installment loans. The Company has been actively working with consumer and commercial borrowers requesting deferral of loan payments. The Company recognized a $4.3 million provision for credit losses in the first quarter 2020 representing Management’s estimate of additional reserves needed over the remaining life of its loans due to increased credit-risk from deteriorating economic conditions caused by the Covid-19 pandemic.

Noninterest income for the first quarter 2020 totaled $11.6 million, compared to $11.7 million for the fourth quarter 2019, and $11.6 million for the first quarter 2019. First quarter 2020 non-interest income includes a $603 thousand receipt on a purchased loan, representing the recovery of a purchased loan credit-risk discount. During the month of March 2020, activity-based fees related to deposit accounts and merchant processing fees were lower due to reduced economic activity related to the Covid-19 pandemic.

Noninterest expense for the first quarter 2020 was $455 thousand higher than noninterest expense for the fourth quarter 2019 due to higher personnel costs offset in part by lower professional fees. Noninterest expense for the first quarter 2020 was $519 thousand lower than noninterest expense for the first quarter 2019 due to lower occupancy and equipment costs, professional fees, FDIC assessments and amortization of intangible assets. First quarter 2020 noninterest expense reflects application of a $246 thousand FDIC insurance assessment credit; the Company’s credit is fully exhausted.

The tax rate (FTE) applied to pre-tax income (FTE) was 27.0 percent for the first quarter 2020, compared to 26.0 percent for the fourth quarter 2019 and 26.3 percent for the first quarter 2019. The lower tax rate for the fourth quarter 2019 is due to a customary adjustment to true-up the Company’s 2018 estimated tax provision to the filed 2018 tax return. The lower tax rate for the first quarter 2019 is due to higher tax deductions from the exercise of employee stock options.

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

Westamerica Bancorporation Web Address: www.westamerica.com

For additional information contact:
	Westamerica Bancorporation
	1108 Fifth Avenue, San Rafael, CA 94901
	Robert A. Thorson – SVP & Treasurer
	707-863-6840
	[e-mail]

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 Form 8-K filed on April 16, 2020, the annual report for the year ended December 31, 2019 filed on Form 10-K and quarterly report for the quarter ended September 30, 2019 filed on Form 10-Q, describe some of these factors, including certain pandemic, credit, interest rate, operational, liquidity and market risks associated with the Company's business and operations. Other factors described in these reports include changes in business and economic conditions, competition, fiscal and monetary policies, disintermediation, cyber security risks, legislation including the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2011, the Sarbanes-Oxley Act of 2002 and the Gramm-Leach-Bliley Act of 1999, and mergers and acquisitions.

Forward-looking statements speak only as of the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date forward looking statements are made.

WESTAMERICA BANCORPORATION
FINANCIAL HIGHLIGHTS
March 31, 2020
1. Net Income Summary.
		(in thousands except per-share amounts)
								%
		Q1'2020			Q1'2019			Change		Q4'2019
	Net Interest and Fee Income (FTE)	$	40,547		$	40,247		0.7	%	$	40,481
	Provision for Credit Losses		4,300			-		n/m			-
	Noninterest Income		11,648			11,579		0.6	%		11,732
	Noninterest Expense		24,664			25,183		-2.1	%		24,209
	Income Before Taxes (FTE)		23,231			26,643		-12.8	%		28,004
	Income Tax Provision (FTE)		6,269			6,997		-10.4	%		7,276
	Net Income	$	16,962		$	19,646		-13.7	%	$	20,728
	Average Common Shares Outstanding		27,068			26,841		0.8	%		27,050
	Diluted Average Common Shares		27,139			26,912		0.8	%		27,094
	Operating Ratios:
	Basic Earnings Per Common Share	$	0.63		$	0.73		-14.2	%	$	0.77
	Diluted Earnings Per Common Share	$	0.63			0.73		-14.4	%		0.77
	Return On Assets (a)		1.21	%		1.42	%				1.46	%
	Return On Common Equity (a)		9.7	%		12.2	%				11.8	%
	Net Interest Margin (FTE) (a)		3.10	%		3.12	%				3.08	%
	Efficiency Ratio (FTE)		47.3	%		48.6	%				46.4	%
	Dividends Paid Per Common Share	$	0.41		$	0.40		2.5	%	$	0.41
	Common Dividend Payout Ratio		66	%		55	%				53	%
2. Net Interest Income.
		(dollars in thousands)
								%
		Q1'2020			Q1'2019			Change		Q4'2019
	Interest and Fee Income (FTE)	$	40,989		$	40,741		0.6	%	$	40,932
	Interest Expense		442			494		-10.5	%		451
	Net Interest and Fee Income (FTE)	$	40,547		$	40,247		0.7	%	$	40,481
	Average Earning Assets	$	5,242,142		$	5,184,978		1.1	%	$	5,243,783
	Average Interest-
	Bearing Liabilities		2,648,581			2,689,684		-1.5	%		2,599,703
	Yield on Earning Assets (FTE) (a)		3.13	%		3.16	%				3.11	%
	Cost of Funds (a)		0.03	%		0.04	%				0.03	%
	Net Interest Margin (FTE) (a)		3.10	%		3.12	%				3.08	%
	Interest Expense/
	Interest-Bearing Liabilities (a)		0.07	%		0.08	%				0.07	%
	Net Interest Spread (FTE) (a)		3.06	%		3.08	%				3.04	%
3. Loans & Other Earning Assets.
		(average volume, dollars in thousands)
								%
		Q1'2020			Q1'2019			Change		Q4'2019
	Total Assets	$	5,655,460		$	5,611,762		0.8	%	$	5,645,013
	Total Earning Assets		5,242,142			5,184,978		1.1	%		5,243,783
	Total Loans		1,123,934			1,205,656		-6.8	%		1,116,446
	Commercial Loans		223,383			281,465		-20.6	%		219,710
	Commercial RE Loans		579,743			580,178		-0.1	%		568,892
	Consumer Loans		320,808			344,013		-6.7	%		327,844
	Total Investment Securities		3,845,885			3,689,852		4.2	%		3,792,781
	Equity Securities		-			1,748		n/m			-
	Debt Securities Available For Sale		3,135,743			2,734,658		14.7	%		3,027,461
	Debt Securities Held To Maturity		710,142			953,446		-25.5	%		765,320
	Total Interest-Bearing Cash		272,323			289,470		-5.9	%		334,556
	Loans/Deposits		23.3	%		24.9	%				23.1	%
4. Deposits, Other Interest-Bearing Liabilities & Equity.
		(average volume, dollars in thousands)
								%
		Q1'2020			Q1'2019			Change		Q4'2019
	Total Deposits	$	4,828,988		$	4,834,690		-0.1	%	$	4,839,552
	Noninterest Demand		2,222,737			2,204,232		0.8	%		2,279,615
	Interest-Bearing Transaction		941,720			946,458		-0.5	%		922,772
	Savings		1,496,362			1,492,100		0.3	%		1,464,206
	Time greater than $100K		73,849			82,796		-10.8	%		75,314
	Time less than $100K		94,320			109,104		-13.6	%		97,645
	Total Short-Term Borrowings		42,330			59,226		-28.5	%		39,766
	Shareholders' Equity		705,330			655,380		7.6	%		694,709
	Demand Deposits/
	Total Deposits		46.0	%		45.6	%				47.1	%
	Transaction & Savings
	Deposits / Total Deposits		96.5	%		96.0	%				96.4	%
5. Interest Yields Earned & Rates Paid.
		(dollars in thousands)
		Q1'2020
		Average			Income/			Yield (a) /
		Volume			Expense			Rate
	Interest & Fee Income Earned
	Total Earning Assets (FTE)	$	5,242,142		$	40,989		3.13	%
	Total Loans (FTE)		1,123,934			13,910		4.98	%
	Commercial Loans (FTE)		223,383			2,776		5.00	%
	Commercial RE Loans		579,743			7,599		5.27	%
	Consumer Loans		320,808			3,535		4.43	%
	Total Investments (FTE)		3,845,885			26,223		2.73	%
	Total Interest-Bearing Cash		272,323			856		1.24	%
	Interest Expense Paid
	Total Earning Assets		5,242,142			442		0.03	%
	Total Interest-Bearing Liabilities		2,648,581			442		0.07	%
	Total Interest-Bearing Deposits		2,606,251			434		0.07	%
	Interest-Bearing Transaction		941,720			84		0.04	%
	Savings		1,496,362			217		0.06	%
	Time less than $100K		94,320			54		0.23	%
	Time greater than $100K		73,849			79		0.43	%
	Total Short-Term Borrowings		42,330			8		0.07	%
	Net Interest Income and
	Margin (FTE)				$	40,547		3.10	%
		Q1'2019
		Average			Income/			Yield (a) /
		Volume			Expense			Rate
	Interest & Fee Income Earned
	Total Earning Assets (FTE)	$	5,184,978		$	40,741		3.16	%
	Total Loans (FTE)		1,205,656			14,908		5.01	%
	Commercial Loans (FTE)		281,465			3,766		5.43	%
	Commercial RE Loans		580,178			7,577		5.30	%
	Consumer Loans		344,013			3,565		4.19	%
	Total Investments (FTE)		3,689,852			24,095		2.61	%
	Total Interest-Bearing Cash		289,470			1,738		2.40	%
	Interest Expense Paid
	Total Earning Assets		5,184,978			494		0.04	%
	Total Interest-Bearing Liabilities		2,689,684			494		0.08	%
	Total Interest-Bearing Deposits		2,630,458			485		0.07	%
	Interest-Bearing Transaction		946,458			121		0.05	%
	Savings		1,492,100			216		0.06	%
	Time less than $100K		109,104			66		0.24	%
	Time greater than $100K		82,796			82		0.40	%
	Total Short-Term Borrowings		59,226			9		0.06	%
	Net Interest Income and
	Margin (FTE)				$	40,247		3.12	%
6. Noninterest Income.
		(dollars in thousands except per-share amounts)
								%
		Q1'2020			Q1'2019			Change		Q4'2019
	Service Charges on Deposits	$	4,248		$	4,504		-5.7	%	$	4,374
	Merchant Processing Services		2,358			2,558		-7.8	%		2,424
	Debit Card Fees		1,468			1,507		-2.6	%		1,568
	Trust Fees		777			717		8.4	%		764
	ATM Processing Fees		579			633		-8.5	%		696
	Other Service Fees		506			577		-12.3	%		513
	Financial Services Commissions		125			101		24.6	%		122
	Securities Gains		-			24		n/m			167
	Other Income (3)		1,587			958		65.7	%		1,104
	Total Noninterest Income	$	11,648		$	11,579		0.6	%	$	11,732
	Total Revenue (FTE)	$	52,195		$	51,826		0.7	%	$	52,213
	Noninterest Income/Revenue (FTE)		22.3	%		22.3	%				22.5	%
	Service Charges/Avg. Deposits (a)		0.35	%		0.38	%				0.36	%
	Total Revenues (FTE) Per Avg.
	Common Share (a)	$	7.76		$	7.83		-1.0	%	$	7.66
7. Noninterest Expense.
		(dollars in thousands)
								%
		Q1'2020			Q1'2019			Change		Q4'2019
	Salaries & Benefits	$	13,018		$	13,108		-0.7	%	$	12,297
	Occupancy and Equipment		4,932			5,048		-2.3	%		5,077
	Outsourced Data Processing		2,405			2,369		1.5	%		2,361
	Courier Service		491			442		11.0	%		529
	Professional Fees		389			665		-41.5	%		674
	Amortization of
	Identifiable Intangibles		73			310		-76.5	%		73
	Other Operating		3,356			3,241		3.5	%		3,198
	Total Noninterest Expense	$	24,664		$	25,183		-2.1	%	$	24,209
	Noninterest Expense/
	Avg. Earning Assets (a)		1.89	%		1.97	%				1.83	%
	Noninterest Expense/Revenues (FTE)		47.3	%		48.6	%				46.4	%
8. Allowance for Credit Losses.
		(dollars in thousands)
								%
		Q1'2020			Q1'2019			Change		Q4'2019
	Average Total Loans	$	1,123,934		$	1,205,656		-6.8	%	$	1,116,446
	Prior Period Allowance for
	Credit Losses (Loans) (ACLL)	$	19,484		$	21,351		-8.7	%	$	19,828
	Adoption of ASU 2016-13 (1)		2,017			-		n/m			-
	Beginning of Period ACLL		21,501			21,351		0.7	%		19,828
	Provision for Credit Losses		4,300			-		n/m			-
	Net ACLL Losses		(997	)		(874	)	14.2	%		(344	)
	End of Period ACLL	$	24,804		$	20,477		21.1	%	$	19,484
	Gross ACLL Recoveries /
	Gross ACLL Losses		37	%		37	%				71	%
	Net ACLL Losses /
	Avg. Total Loans (a)		0.36	%		0.29	%				0.12	%
		(dollars in thousands)
								%
		3/31/20			3/31/19			Change		12/31/19
	Allowance for Credit Losses (Loans)	$	24,804		$	20,477		21.1	%	$	19,484
	Allowance for Credit Losses
	(HTM Securities)		16			-		n/m			-
	Total Allowance for Credit Losses	$	24,820		$	20,477		21.2	%	$	19,484
	Allowance for Unfunded
	Credit Commitments		53			2,308		-97.7	%		2,160
9. Credit Quality.
		(dollars in thousands)
								%
		3/31/20			3/31/19			Change		12/31/19
	Nonperforming Loans:
	Nonperforming Nonaccrual	$	419		$	330		27.0	%	$	659
	Performing Nonaccrual		3,933			3,670		7.2	%		3,781
	Total Nonaccrual Loans		4,352			4,000		8.8	%		4,440
	90+ Days Past Due Accruing Loans		178			394		-54.8	%		440
	Total		4,530			4,394		3.1	%		4,880
	Repossessed Loan Collateral		43			43		-0.9	%		43
	Total Nonperforming Assets	$	4,573		$	4,437		3.1	%	$	4,923
	Total Loans Outstanding	$	1,121,243		$	1,204,844		-6.9	%	$	1,126,664
	Total Assets	$	5,628,126		$	5,555,961		1.3	%	$	5,619,555
	Loans:
	Allowance for Credit Losses (Loans)	$	24,804		$	20,477		21.1	%	$	19,484
	Allowance for Credit Losses (Loans) /
	Loans		2.21	%		1.70	%				1.73	%
	Nonperforming Loans/Total Loans		0.40	%		0.36	%				0.43	%
10. Capital.
		(in thousands, except per-share amounts)
								%
		3/31/20			3/31/19			Change		12/31/19
	Shareholders' Equity	$	705,546		$	656,767		7.4	%	$	731,417
	Total Assets		5,628,126			5,555,961		1.3	%		5,619,555
	Shareholders' Equity/
	Total Assets		12.54	%		11.82	%				13.02	%
	Shareholders' Equity/
	Total Loans		62.93	%		54.51	%				64.92	%
	Tangible Common Equity Ratio		10.58	%		9.82	%				11.07	%
	Common Shares Outstanding		26,932			26,901		0.1	%		27,062
	Common Equity Per Share	$	26.20		$	24.41		7.3	%	$	27.03
	Market Value Per Common Share	$	58.78		$	61.80		-4.9	%	$	67.77
	Share Repurchase Programs
		(shares in thousands)
								%
		Q1'2020			Q1'2019			Change		Q4'2019
	Total Shares Repurchased		180			-		n/m			-
	Average Repurchase Price	$	51.52		$	-		n/m		$	-
	Net Shares Repurchased (Issued)		130			(171	)	n/m			(48	)
11. Period-End Balance Sheets.
		(unaudited, dollars in thousands)
								%
		3/31/20			3/31/19			Change		12/31/19
	Assets:
	Cash and Due from Banks	$	304,628		$	421,788		-27.8	%	$	373,421
	Investment Securities:
	Equity Securities		-			1,771		n/m			-
	Debt Securities Available For Sale		3,210,689			2,702,240		18.8	%		3,078,846
	Debt Securities Held To Maturity (2)		681,821			923,190		-26.1	%		738,072
	Loans		1,121,243			1,204,844		-6.9	%		1,126,664
	Allowance For Credit Losses (Loans)		(24,804	)		(20,477	)	21.1	%		(19,484	)
	Total Loans, net		1,096,439			1,184,367		-7.4	%		1,107,180
	Other Real Estate Owned		43			43		0.0	%		43
	Premises and Equipment, net		35,403			33,934		4.3	%		34,597
	Identifiable Intangibles, net		1,318			1,619		-18.6	%		1,391
	Goodwill		121,673			121,673		0.0	%		121,673
	Other Assets		176,112			165,336		6.5	%		164,332
	Total Assets	$	5,628,126		$	5,555,961		1.3	%	$	5,619,555
	Liabilities and Shareholders' Equity:
	Deposits:
	Noninterest-Bearing	$	2,183,283		$	2,179,803		0.2	%	$	2,240,112
	Interest-Bearing Transaction		936,516			941,379		-0.5	%		931,888
	Savings		1,514,431			1,482,187		2.2	%		1,471,284
	Time		165,196			189,215		-12.7	%		169,337
	Total Deposits		4,799,426			4,792,584		0.1	%		4,812,621
	Short-Term Borrowed Funds		52,664			58,317		-9.7	%		30,928
	Other Liabilities		70,490			48,293		46.0	%		44,589
	Total Liabilities		4,922,580			4,899,194		0.5	%		4,888,138
	Shareholders' Equity:
	Common Equity:
	Paid-In Capital		466,472			456,075		2.3	%		466,231
	Accumulated Other
	Comprehensive Income (Loss)		171			(11,249	)	n/m			26,051
	Retained Earnings		238,903			211,941		12.7	%		239,135
	Total Shareholders' Equity		705,546			656,767		7.4	%		731,417
	Total Liabilities and
	Shareholders' Equity	$	5,628,126		$	5,555,961		1.3	%	$	5,619,555
12. Income Statements.
		(unaudited, in thousands except per-share amounts)
								%
		Q1'2020			Q1'2019			Change		Q4'2019
	Interest & Fee Income:
	Loans	$	13,809		$	14,797		-6.7	%	$	14,103
	Investment Securities:
	Equity Securities		103			98		5.1	%		103
	Debt Securities Available For Sale		21,315			17,521		21.7	%		20,067
	Debt Securities Held To Maturity		3,908			5,329		-26.7	%		4,209
	Interest-Bearing Cash		856			1,738		-50.7	%		1,396
	Total Interest & Fee Income		39,991			39,483		1.3	%		39,878
	Interest Expense:
	Transaction Deposits		84			121		-31.1	%		89
	Savings Deposits		217			216		0.4	%		215
	Time Deposits		133			148		-9.6	%		140
	Short-Term Borrowed Funds		8			9		-11.6	%		7
	Total Interest Expense		442			494		-10.5	%		451
	Net Interest Income		39,549			38,989		1.4	%		39,427
	Provision for Credit Losses		4,300			-		n/m			-
	Noninterest Income:
	Service Charges		4,248			4,504		-5.7	%		4,374
	Merchant Processing Services		2,358			2,558		-7.8	%		2,424
	Debit Card Fees		1,468			1,507		-2.6	%		1,568
	Trust Fees		777			717		8.4	%		764
	ATM Processing Fees		579			633		-8.5	%		696
	Other Service Fees		506			577		-12.3	%		513
	Financial Services Commissions		125			101		24.6	%		122
	Securities Gains		-			24		n/m			167
	Other Income (3)		1,587			958		65.7	%		1,104
	Total Noninterest Income		11,648			11,579		0.6	%		11,732
	Noninterest Expense:
	Salaries and Benefits		13,018			13,108		-0.7	%		12,297
	Occupancy and Equipment		4,932			5,048		-2.3	%		5,077
	Outsourced Data Processing		2,405			2,369		1.5	%		2,361
	Courier Service		491			442		11.0	%		529
	Professional Fees		389			665		-41.5	%		674
	Amortization of Identifiable Intangibles		73			310		-76.5	%		73
	Other		3,356			3,241		3.5	%		3,198
	Total Noninterest Expense		24,664			25,183		-2.1	%		24,209
	Income Before Income Taxes		22,233			25,385		-12.4	%		26,950
	Income Tax Provision		5,271			5,739		-8.2	%		6,222
	Net Income	$	16,962		$	19,646		-13.7	%	$	20,728
	Average Common Shares Outstanding		27,068			26,841		0.8	%		27,050
	Diluted Common Shares Outstanding		27,139			26,912		0.8	%		27,094
	Per Common Share Data:
	Basic Earnings	$	0.63		$	0.73		-13.7	%	$	0.77
	Diluted Earnings		0.63			0.73		-13.7	%		0.77
	Dividends Paid		0.41			0.40		2.5	%		0.41
	Footnotes and Abbreviations:
	(1) Effective January 1, 2020, the Company adopted Accounting Standards Update (ASU) 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments ("CECL"), resulting in a period opening adjustment to the allowance for loan losses, held-to-maturity debt securities, other liabilities, deferred tax assets, and shareholders' equity.
	(2) The Company adopted ASU 2016-13, effective January 1, 2020. Debt Securities Held To Maturity at March 31, 2020, of $681,821 thousand is net of related reserve for expected credit losses of $16 thousand.
	(3) The Company received $603 thousand in excess of amounts charged-off in prior periods on a purchased loan during the quarter ending March 31, 2020, representing the recovery of a purchased loan credit-risk discount.
	(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
	Certain amounts in prior periods have been reclassified to conform to the current presentation.