Westamerica Bancorporation Reports Second Quarter 2020 Financial Results

Nachrichtenquelle: globenewswire
16.07.2020, 16:56  |  107   |   |   

SAN RAFAEL, Calif., July 16, 2020 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the second quarter 2020 of $19.6 million and diluted earnings per common share ("EPS") of $0.72. These results compare to net income of $17.0 million and EPS of $0.63 for the first quarter 2020 and net income of $19.6 million and EPS of $0.73 for the second quarter 2019.

"Westamerica’s primary objective during the Covid-19 pandemic is to support our customers. Westamerica remains open for business during regular business hours at all but one branch. Westamerica funded $249 million Paycheck Protection Program loans for our customers during the second quarter 2020. We are following all health orders affecting our business to keep our customers and employees safe. Westamerica’s net interest income on a fully-tax equivalent basis for the second quarter 2020 increased to $42.1 million from $40.5 million for the first quarter 2020. Operating expenses were $24.8 million for the second quarter 2020, representing only 48 percent of revenues on a fully-taxable equivalent basis. Credit quality remained stable with nonperforming assets of $4.6 million at June 30, 2020,” said Chairman, President and CEO David Payne. “Second quarter 2020 results generated an annualized 11.1 percent return on average common equity, and shareholders were paid a $0.41 per common share dividend during the quarter,” concluded Payne.

Net interest income on a fully-taxable equivalent (FTE) basis was $42.1 million for the second quarter 2020, compared to $40.5 million for the first quarter 2020 and $40.3 million for the second quarter 2019. The annualized net interest margin (FTE) was 2.99 percent for the second quarter 2020, compared to 3.10 percent for the first quarter 2020 and 3.13 percent for the second quarter 2019. The decline in the margin during the second quarter 2020 is primarily due to higher average interest-bearing cash balances and lower cash yields. Total average deposits grew $371 million during the second quarter 2020. Checking and savings deposits represented ninety-seven percent of the Company’s average deposit base during the second quarter 2020 maintaining a 0.03 percent annualized cost of funding interest-earning assets.

The Company has been actively working with consumer and commercial borrowers requesting deferral of loan payments. At June 30, 2020, automobile loans and other consumer loans granted loan deferrals totaled $29 million and $5 million, respectively, commercial real estate loans with deferred payments totaled $66 million, primarily for hospitality and retail properties, and commercial loans with deferred payments totaled $3 million. The commercial real estate loans with deferred payments are seasoned with low loan-to-value ratios.

Nonperforming assets were $4.6 million at June 30, 2020. The Company’s allowance for credit losses was $25 million at June 30, 2020. The Company recognized no provision for credit losses in the second quarter 2020 compared to a Covid-19 related provision of $4.3 million for the first quarter 2020.

Noninterest income for the second quarter 2020 totaled $9.6 million, compared to $11.6 million for the first quarter 2020, and $12.3 million for the second quarter 2019. Beginning March 2020, activity-based fees related to deposit accounts and merchant processing fees have been lower due to reduced economic activity.

Noninterest expense for the second quarter 2020 was $24.8 million compared to $24.7 million for the first quarter 2020 and $25.6 million for the second quarter 2019.

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

Westamerica Bancorporation Web Address: www.westamerica.com

For additional information contact:
  Westamerica Bancorporation
  1108 Fifth Avenue, San Rafael, CA 94901
  Robert A. Thorson – SVP & Treasurer
  707-863-6840
  investments@westamerica.com

FORWARD-LOOKING INFORMATION:

The following appears in accordance with the Private Securities Litigation Reform Act of 1995:

This press release may contain forward-looking statements about the Company, including descriptions of plans or objectives of its management for future operations, products or services, and forecasts of its revenues, earnings or other measures of economic performance. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may."

Forward-looking statements, by their nature, are subject to risks and uncertainties. A number of factors — many of which are beyond the Company's control — could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. The Company's most recent reports filed with the Securities and Exchange Commission, including the annual report for the year ended December 31, 2019 filed on Form 10-K and quarterly report for the quarter ended March 31, 2020 filed on Form 10-Q, describe some of these factors, including certain credit, interest rate, operational, liquidity and market risks associated with the Company's business and operations. Other factors described in these reports include changes in business and economic conditions, competition, fiscal and monetary policies, disintermediation, cyber security risks, legislation including the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2011, the Sarbanes-Oxley Act of 2002 and the Gramm-Leach-Bliley Act of 1999, and mergers and acquisitions.

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

 
WESTAMERICA BANCORPORATION
FINANCIAL HIGHLIGHTS
June 30, 2020
 
1. Net Income Summary.
 
  (in thousands except per-share amounts)
          %      
  Q2'2020   Q2'2019   Change   Q1'2020  
                 
Net Interest and Fee Income (FTE) $ 42,063   $ 40,330   4.3 % $ 40,547  
Provision for Credit Losses   -     -   n/m     4,300  
Noninterest Income 9,554    12,288   -22.2%   11,648  
Noninterest Expense 24,754    25,561   -3.2%   24,664  
Income Before Taxes (FTE) 26,863   27,057   -0.7%   23,231  
Income Tax Provision (FTE) 7,301   7,432   -1.8%   6,269   
Net Income $ 19,562   $ 19,625   -0.3%   $ 16,962  
                 
Average Common Shares Outstanding 26,935   26,942   0.0 % 27,068   
Diluted Average Common Shares 26,951   26,987   -0.1 % 27,139   
                 
Operating Ratios:                
Basic Earnings Per Common Share $ 0.72   $ 0.73   -1.9 % $ 0.63  
Diluted Earnings Per Common Share $ 0.72   0.73   -1.9 % 0.63  
Return On Assets (a) 1.30 % 1.42 %     1.21 %
Return On Common Equity (a) 11.1 % 11.7 %     9.7 %
Net Interest Margin (FTE) (a) 2.99 % 3.13 %     3.10 %
Efficiency Ratio (FTE) 48.0 % 48.6 %     47.3 %
                 
Dividends Paid Per Common Share $ 0.41   $ 0.41   0.0 % $ 0.41  
Common Dividend Payout Ratio  57 % 56 %     66 %
                 


          %  
  6/30'20YTD   6/30'19YTD   Change  
             
Net Interest and Fee Income (FTE) $ 82,610   $ 80,577   2.5 %
Provision for Credit Losses   4,300     -   n/m  
Noninterest Income 21,202   23,867   -11.2 %
Noninterest Expense 49,418   50,744   -2.6 %
Income Before Taxes (FTE) 50,094   53,700   -6.7 %
Income Tax Provision (FTE) 13,570   14,429   -6.0 %
Net Income $ 36,524   $ 39,271   -7.0 %
             
Average Common Shares Outstanding 27,001   26,892   0.4 %
Diluted Average Common Shares 27,024   26,950   0.3 %
             
Operating Ratios:            
Basic Earnings Per Common Share $ 1.35   $ 1.46   -7.5 %
Diluted Earnings Per Common Share 1.35   1.46   -7.4 %
Return On Assets (a) 1.25 % 1.42 %    
Return On Common Equity (a) 10.4 % 12.0 %    
Net Interest Margin (FTE) (a) 3.04 % 3.12 %    
Efficiency Ratio (FTE) 47.6 % 48.6 %    
             
Dividends Paid Per Common Share $ 0.82   $ 0.81   1.2 %
Common Dividend Payout Ratio  61 % 55 %    
             


2. Net Interest Income.                
  (dollars in thousands)
          %      
  Q2'2020   Q2'2019   Change   Q1'2020  
                 
Interest and Fee Income (FTE) $ 42,498   $ 40,817   4.1 % $ 40,989  
Interest Expense 435   487   -10.7 % 442  
Net Interest and Fee Income (FTE) $ 42,063   $ 40,330   4.3 % $ 40,547  
                 
Average Earning Assets $ 5,635,014   $ 5,159,112   9.2 % $ 5,242,142  
Average Interest-                
Bearing Liabilities 2,774,450   2,646,681   4.8 % 2,648,581  
                 
Yield on Earning Assets (FTE) (a) 3.02 % 3.17 %     3.13 %
Cost of Funds (a) 0.03 % 0.04 %     0.03 %
Net Interest Margin (FTE) (a) 2.99 % 3.13 %     3.10 %
Interest Expense/                
Interest-Bearing Liabilities (a) 0.06 % 0.08 %     0.07 %
Net Interest Spread (FTE) (a) 2.96 % 3.09 %     3.06 %
                 


          %  
  6/30'20YTD   6/30'19YTD   Change  
             
Interest and Fee Income (FTE) $ 83,487   $ 81,558   2.4 %
Interest Expense 877   981   -10.6 %
Net Interest and Fee Income (FTE) $ 82,610   $ 80,577   2.5 %
             
Average Earning Assets $ 5,438,578   $ 5,171,973   5.2 %
Average Interest-            
Bearing Liabilities 2,711,515   2,668,063   1.6 %
             
Yield on Earning Assets (FTE) (a) 3.07 % 3.16 %    
Cost of Funds (a) 0.03 % 0.04 %    
Net Interest Margin (FTE) (a) 3.04 % 3.12 %    
Interest Expense/            
Interest-Bearing Liabilities (a) 0.07 % 0.08 %    
Net Interest Spread (FTE) (a) 3.00 % 3.08 %    
             


3. Loans & Other Earning Assets.                
  (average volume, dollars in thousands)
          %      
  Q2'2020   Q2'2019   Change   Q1'2020  
                 
Total Assets $ 6,058,365   $ 5,560,740   8.9 % $ 5,655,460  
Total Earning Assets 5,635,014   5,159,112   9.2 % 5,242,142  
Total Loans 1,232,073   1,183,539   4.1 % 1,123,934  
Total Commercial Loans 344,053   262,804   30.9 % 223,383  
Paycheck Protection Program (PPP) Loans   132,500     -   n/m     -  
Commercial Loans 211,553   262,804   -19.5 % 223,383  
Commercial RE Loans  578,572   582,126   -0.6 % 579,743  
Consumer Loans 309,448   338,609   -8.6 % 320,808  
Total Investment Securities 3,957,851   3,648,436   8.5 % 3,845,885  
Equity Securities   -   1,772   n/m     -  
Debt Securities Available For Sale 3,293,009   2,750,093   19.7 % 3,135,743  
Debt Securities Held To Maturity 664,842   896,571   -25.8 % 710,142  
Total Interest-Bearing Cash 445,090   327,137   36.1 % 272,323  
                 
Loans/Deposits 23.7 % 24.9 %     23.3 %
                 


          %  
  6/30'20YTD   6/30'19YTD   Change  
             
Total Assets $ 5,856,913   $ 5,586,110   4.8 %
Total Earning Assets 5,438,578   5,171,973   5.2 %
Total Loans 1,178,004   1,194,536   -1.4 %
Total Commercial Loans 283,718   272,083   4.3 %
PPP Loans   66,250     -   n/m  
Commercial Loans 217,468   272,083   -20.1 %
Commercial RE Loans  579,157   581,157   -0.3 %
Consumer Loans 315,129   341,296   -7.7 %
Total Investment Securities 3,901,868   3,669,029   6.3 %
Equity Securities   -   1,760   n/m  
Debt Securities Available For Sale 3,214,376   2,742,418   17.2 %
Debt Securities Held To Maturity 687,492   924,851   -25.7 %
Total Interest-Bearing Cash 358,706   308,408   16.3 %
             
Loans/Deposits 23.5 % 24.9 %    


4. Deposits, Other Interest-Bearing Liabilities & Equity.            
  (average volume, dollars in thousands)
          %      
  Q2'2020   Q2'2019   Change   Q1'2020  
                 
Total Deposits $ 5,200,475   $ 4,762,286   9.2 % $ 4,828,988  
Noninterest Demand  2,496,840   2,172,207   14.9 % 2,222,737  
Interest-Bearing Transaction 980,872   945,128   3.8 % 941,720  
Savings 1,558,201   1,459,287   6.8 % 1,496,362  
Time greater than $100K 72,267   80,120   -9.8 % 73,849  
Time less than $100K 92,295   105,544   -12.6 % 94,320  
Total Short-Term Borrowings 70,116   56,602   23.9 % 42,330  
Other Borrowed Funds   699     -   n/m     -  
Shareholders' Equity 705,882   669,947   5.4 % 705,330  
                 
Demand Deposits/                
Total Deposits 48.0 % 45.6 %     46.0 %
Transaction & Savings                 
Deposits / Total Deposits 96.8 % 96.1 %     96.5 %
                 


          %  
  6/30'20YTD   6/30'19YTD   Change  
             
Total Deposits $ 5,014,731   $ 4,798,288   4.5 %
Noninterest Demand  2,359,788   2,188,131   7.8 %
Interest-Bearing Transaction 961,295   945,789   1.6 %
Savings 1,527,282   1,475,603   3.5 %
Time greater than $100K 73,058   81,451   -10.3 %
Time less than $100K 93,308   107,314   -13.1 %
Total Short-Term Borrowings 56,223   57,906   -2.9 %
Other Borrowed Funds   349     -   n/m  
Shareholders' Equity 705,606   662,704   6.5 %
             
Demand Deposits/            
Total Deposits 47.1 % 45.6 %    
Transaction & Savings             
Deposits / Total Deposits 96.7 % 96.1 %    
             


5. Interest Yields Earned & Rates Paid.  
  (dollars in thousands)
  Q2'2020
  Average Income/ Yield (a) /
  Volume Expense Rate
         
Interest & Fee Income Earned        
Total Earning Assets (FTE) $ 5,635,014 $ 42,498 3.02 %
Total Loans (FTE)   1,232,073 15,376 5.02 %
Total Commercial Loans (FTE) 344,053 4,052 4.74 %
PPP Loans   132,500   1,673 5.07 %
Commercial Loans (FTE) 211,553 2,379 4.52 %
Commercial RE Loans  578,572 7,892 5.49 %
Consumer Loans 309,448 3,432 4.46 %
Total Investments (FTE) 3,957,851 27,009 2.73 %
Total Interest-Bearing Cash 445,090 113 0.10 %
         
Interest Expense Paid        
Total Earning Assets  5,635,014 435 0.03 %
Total Interest-Bearing Liabilities 2,774,450 435 0.06 %
Total Interest-Bearing Deposits 2,703,635 424 0.06 %
Interest-Bearing Transaction 980,872 74 0.03 %
Savings 1,558,201 224 0.06 %
Time less than $100K 92,295 47 0.20 %
Time greater than $100K 72,267 79 0.44 %
Total Short-Term Borrowings  70,116 10 0.06 %
Other Borrowed Funds   699   1 0.35 %
         
Net Interest Income and         
Margin (FTE)   $ 42,063 2.99 %
         


  Q2'2019
  Average Income/ Yield (a) /
  Volume Expense Rate
         
Interest & Fee Income Earned        
Total Earning Assets (FTE) $ 5,159,112 $ 40,817 3.17 %
Total Loans (FTE) 1,183,539 14,929 5.06 %
Commercial Loans (FTE) 262,804 3,561 5.43 %
Commercial RE Loans  582,126 7,709 5.31 %
Consumer Loans 338,609 3,659 4.33 %
Total Investments (FTE) 3,648,436 23,930 2.62 %
Total Interest-Bearing Cash 327,137 1,958 2.37 %
         
Interest Expense Paid        
Total Earning Assets  5,159,112 487 0.04 %
Total Interest-Bearing Liabilities 2,646,681 487 0.08 %
Total Interest-Bearing Deposits 2,590,079 478 0.07 %
Interest-Bearing Transaction 945,128 119 0.05 %
Savings 1,459,287 212 0.06 %
Time less than $100K 105,544 65 0.25 %
Time greater than $100K 80,120 82 0.41 %
Total Short-Term Borrowings  56,602 9 0.06 %
         
Net Interest Income and        
Margin (FTE)   $ 40,330 3.13 %
         


6. Noninterest Income.                
  (dollars in thousands except per-share amounts)
          %      
  Q2'2020   Q2'2019   Change   Q1'2020  
                 
Service Charges on Deposits $ 3,151   $ 4,493   -29.9 % $ 4,248  
Merchant Processing Services 2,277   2,657   -14.3 % 2,358  
Debit Card Fees 1,459   1,641   -11.1 % 1,468  
Trust Fees 714   749   -4.7 % 777  
ATM Processing Fees 518   722   -28.3 % 579  
Other Service Fees 420   585   -28.2 % 506  
Financial Services Commissions 123   93   32.6 % 125  
Life Insurance Gains   -   433   n/m     -  
Securities Gains   71     26   n/m     -  
Other Income (4) 821   889   -7.6 % 1,587  
Total Noninterest Income $ 9,554   $ 12,288   -22.2 % $ 11,648  
                 
Total Revenue (FTE) $ 51,617   $ 52,618   -1.9 % $ 52,195  
Noninterest Income/Revenue (FTE) 18.5 % 23.4 %     22.3 %
Service Charges/Avg. Deposits (a) 0.24 % 0.38 %     0.35 %
Total Revenues (FTE) Per Avg.                 
Common Share (a) $ 7.71   $ 7.83   -1.6 % $ 7.76  
                 


          %  
  6/30'20YTD   6/30'19YTD   Change  
             
Service Charges on Deposits $ 7,399   $ 8,997   -17.8 %
Merchant Processing Services 4,635   5,215   -11.1 %
Debit Card Fees 2,927   3,148   -7.0 %
Trust Fees 1,491   1,466   1.7 %
ATM Processing Fees 1,097   1,355   -19.0 %
Other Service Fees 926   1,162   -20.3 %
Financial Services Commissions 248   194   27.4 %
Life Insurance Gains   -     433   n/m  
Securities Gains   71     50   n/m  
Other Income (4) 2,408    1,847   30.4 %
Total Noninterest Income $ 21,202   $ 23,867   -11.2 %
             
Total Revenue (FTE) $ 103,812   $ 104,444   -0.6 %
Noninterest Income/Revenue (FTE) 20.4 % 22.9 %    
Service Charges/Avg. Deposits (a) 0.30 % 0.38 %    
Total Revenues (FTE) Per Avg./            
Common Share (a) $ 7.73   $ 7.83   -1.3 %
             

 

7. Noninterest Expense.                
  (dollars in thousands)
          %      
  Q2'2020   Q2'2019   Change   Q1'2020  
                 
Salaries & Benefits $ 12,900   $ 13,090   -1.5 % $ 13,018  
Occupancy and Equipment 4,791   4,916   -2.5 % 4,932  
Outsourced Data Processing 2,324   2,367   -1.8 % 2,405  
Professional Fees 643   481   33.7 % 389  
Courier Service 508   451   12.6 % 491  
Amortization of                 
Identifiable Intangibles 73   79   -7.6 % 73  
Loss Contingency (1)   -   553   n/m     -  
Other Operating 3,515   3,624    -3.0 % 3,356   
Total Noninterest Expense $ 24,754   $ 25,561   -3.2 % $ 24,664  
                 
Noninterest Expense/                
Avg. Earning Assets (a) 1.77 % 1.99 %     1.89 %
Noninterest Expense/Revenues (FTE) 48.0 % 48.6 %     47.3 %
                 


          %  
  6/30'20YTD   6/30'19YTD   Change  
             
Salaries & Benefits $ 25,918   $ 26,198   -1.1 %
Occupancy and Equipment 9,723   9,964   -2.4 %
Outsourced Data Processing 4,729   4,736   -0.1 %
Professional Fees 1,032   1,146   -9.9 %
Courier Service 999   893   11.9 %
Amortization of             
Identifiable Intangibles 146   389   -62.5 %
Loss Contingency (1)   -     553   n/m  
Other Operating 6,871   6,865   0.1 %
Total Noninterest Expense $ 49,418   $ 50,744   -2.6 %
             
Noninterest Expense/            
Avg. Earning Assets (a) 1.83 % 1.98 %    
Noninterest Expense/Revenues (FTE) 47.6 % 48.6 %    
             


8. Allowance for Credit Losses.                
  (dollars in thousands)
          %      
  Q2'2020   Q2'2019   Change   Q1'2020  
                 
Average Total Loans $ 1,232,073   $ 1,183,539   4.1 % $ 1,123,934  
                 
Prior Period Allowance for                
Credit Losses on Loans (ACLL) $ 24,804   $ 20,477   21.1 % $ 19,484  
Adoption of ASU 2016-13(2)   -     -   n/m     2,017  
Beginning of Period ACLL  24,804    20,477    21.1 % 21,501   
Provision for Credit Losses    -     -   n/m     4,300  
Net ACLL Losses (275 ) (360 ) -23.5 % (997 )
End of Period ACLL $ 24,529   $ 20,117   21.9 % $ 24,804  
Gross ACLL Recoveries /                
Gross ACLL Losses  66 % 63 %     37 %
Net ACLL Losses /                 
Avg. Total Loans (a)  0.09 % 0.12 %     0.36 %
                 


          %  
  6/30'20YTD   6/30'19YTD   Change  
             
Average Total Loans $ 1,178,004   $ 1,194,536   -1.4 %
             
Prior Period Allowance for            
Credit Losses on Loans (ACLL) $ 19,484   $ 21,351   n/m  
Adoption of ASU 2016-13(2)   2,017     -   n/m  
Beginning of Period ACLL    21,501     21,351   0.7 %
Provision for Credit Losses    4,300     -   n/m  
Net ACLL Losses (1,272 ) (1,234 ) n/m  
End of Period ACLL $ 24,529   $ 20,117   21.9 %
Gross ACLL Recoveries /            
Gross ACLL Losses  46 % 48 %    
Net ACLL Losses /             
Avg. Total Loans (a) 0.22 % 0.21 %    
             


  (dollars in thousands)
      %    
  6/30/20 6/30/19 Change   3/31/20
Allowance for Credit Losses on Loans $ 24,529 $ 20,117 21.9 % $ 24,804
Allowance for Credit Losses on          
HTM Securities 16    - n/m     16
Total Allowance for Credit Losses $ 24,545 $ 20,117 22.0 % $ 24,820
           
Allowance for Unfunded          
Credit Commitments   53   2,308 -97.7 %   53
           


9. Credit Quality.                
  (dollars in thousands)
          %      
  6/30/20   6/30/19   Change   3/31/20  
                 
Nonperforming Loans:                
Nonperforming Nonaccrual $ 590   $ 177   232.7 % $ 419  
Performing Nonaccrual   3,643     3,670   -0.7 %   3,933  
Total Nonaccrual Loans 4,233   3,847   10.0 % 4,352  
90+ Days Past Due Accruing Loans 290   249   16.5 % 178  
Total 4,523   4,096   10.4 % 4,530  
Repossessed Loan Collateral  43   43   -0.9 % 43  
Total Nonperforming Assets $ 4,566   $ 4,139   10.3 % $ 4,573  
                 
Total Loans Outstanding  $ 1,316,359   $ 1,161,712   13.3 % $ 1,121,243  
                 
Total Assets  $ 6,463,889   $ 5,523,448   17.0 % $ 5,628,126  
                 
Loans:                
Allowance for Credit Losses on Loans $ 24,529   $ 20,117   21.9 % $ 24,804  
Allowance for Credit Losses on Loans /                
Loans 1.86 % 1.73 %     2.21 %
Nonperforming Loans/Total Loans 0.34 % 0.35 %     0.40 %
                 


10. Capital.                
  (in thousands, except per-share amounts)
          %      
  6/30/20   6/30/19   Change   3/31/20  
                 
Shareholders' Equity $ 808,076   $ 693,437   16.5 % $ 705,546  
Total Assets 6,463,889   5,523,448   17.0 % 5,628,126  
Shareholders' Equity/                
Total Assets 12.50 % 12.55 %     12.54 %
Shareholders' Equity/                
Total Loans 61.39 % 59.69 %     62.93 %
Tangible Common Equity Ratio 10.81 % 10.56 %     10.58 %
Common Shares Outstanding 26,933   26,962   -0.1 % 26,932  
Common Equity Per Share $ 30.00   $ 25.72   16.7 % $ 26.20  
Market Value Per Common Share $ 57.42   $ 61.61   -6.8 % $ 58.78  
                 
Share Repurchase Programs                
  (shares in thousands)
          %      
  Q2'2020   Q2'2019   Change   Q1'2020  
                 
Total Shares Repurchased   13     8   n/m     180  
Average Repurchase Price $  52.27   $  61.98   n/m   $  51.52  
Net Shares (Issued) Repurchased   (1 ) (61 ) n/m   130  
                 
          %      
  6/30'20YTD   6/30'19YTD   Change      
                 
Total Shares Repurchased   193     8   n/m      
Average Repurchase Price $ 51.50   $ 61.98   n/m      
Net Shares Repurchased (Issued) 129   (232 ) n/m      



11. Period-End Balance Sheets.                
  (unaudited, dollars in thousands)
          %      
  6/30/20   6/30/19   Change   3/31/20  
Assets:                
Cash and Due from Banks $ 500,820   $ 418,586   19.6 % $ 304,628  
                 
Investment Securities:                
Equity Securities   -   1,797   n/m     -  
Debt Securities Available For Sale 3,708,370   2,775,899   33.6 % 3,210,689  
Debt Securities Held To Maturity (3) 638,281   867,989   -26.5 % 681,821  
                 
Loans 1,316,359   1,161,712   13.3 % 1,121,243  
Allowance For Credit Losses on Loans (24,529 ) (20,117 ) 21.9 % (24,804 )
Total Loans, net 1,291,830   1,141,595   13.2 % 1,096,439  
                 
Other Real Estate Owned 43   43   0.0 % 43  
Premises and Equipment, net 34,061   34,014   0.1 % 35,403  
Identifiable Intangibles, net 1,245   1,540   -19.2 % 1,318  
Goodwill  121,673   121,673   0.0 % 121,673  
Other Assets 167,566   160,312   4.5 % 176,112  
                 
Total Assets $ 6,463,889   $ 5,523,448   17.0 % $ 5,628,126  
                 
Liabilities and Shareholders' Equity:                
Deposits:                
Noninterest-Bearing $ 2,702,885   $ 2,163,841   24.9 % $ 2,183,283  
Interest-Bearing Transaction 997,593   942,140   5.9 % 936,516  
Savings 1,605,169   1,442,552   11.3 % 1,514,431  
Time 162,765   181,729   -10.4 % 165,196  
Total Deposits 5,468,412   4,730,262   15.6 % 4,799,426  
                 
Short-Term Borrowed Funds 86,170   54,581   57.9 % 52,664  
Other Liabilities 101,231   45,168   124.1 % 70,490  
Total Liabilities 5,655,813   4,830,011   17.1 % 4,922,580  
                 
Shareholders' Equity:                
Common Equity:                
Paid-In Capital 467,386   460,140   1.6 % 466,472  
Accumulated Other                
Comprehensive Income 93,732   13,124   n/m   171  
Retained Earnings 246,958   220,173   12.2 % 238,903  
Total Shareholders' Equity 808,076   693,437   16.5 % 705,546  
                 
Total Liabilities and                 
Shareholders' Equity $ 6,463,889   $ 5,523,448   17.0 % $ 5,628,126  
                 


12. Income Statements.          
  (unaudited, in thousands except per-share amounts)
      %  
  Q2'2020 Q2'2019 Change Q1'2020
Interest & Fee Income:          
Loans $ 15,278 $ 14,822 3.1 % $ 13,809
Investment Securities:          
Equity Securities 103 99 4.0 % 103
Debt Securities Available For Sale 22,429 17,823 25.8 % 21,315
Debt Securities Held To Maturity 3,616 4,924 -26.6 % 3,908
Interest-Bearing Cash 113 1,958 -94.3 % 856
Total Interest & Fee Income 41,539 39,626 4.8 % 39,991
           
Interest Expense:          
Transaction Deposits 74 119 -37.8 % 84
Savings Deposits 224 212 5.6 % 217
Time Deposits 126 147 -14.3 % 133
Short-Term Borrowed Funds 10 9 9.4 % 8
Other Borrowed Funds 1   - n/m     -
Total Interest Expense 435 487 -10.8 % 442
           
Net Interest Income 41,104 39,139 5.0 % 39,549
           
Provision for Credit Losses   -   - n/m     4,300
           
Noninterest Income:          
Service Charges  3,151 4,493 -29.9 % 4,248
Merchant Processing Services 2,277 2,657 -14.3 % 2,358
Debit Card Fees 1,459 1,641 -11.1 % 1,468
Trust Fees 714 749 -4.7 % 777
ATM Processing Fees 518 722 -28.3 % 579
Other Service Fees 420 585 -28.2 % 506
Financial Services Commissions 123 93 32.6 % 125
Life Insurance Gains   - 433 n/m     -
Securities Gains   71   26 n/m     -
Other Income (4) 821 889 -7.6 % 1,587
Total Noninterest Income 9,554 12,288 -22.2 % 11,648
           
Noninterest Expense:          
Salaries and  Benefits 12,900 13,090 -1.5 % 13,018
Occupancy and Equipment 4,791 4,916 -2.5 % 4,932
Outsourced Data Processing 2,324 2,367 -1.8 % 2,405
Professional Fees 643 481 33.7 % 389
Courier Service 508 451 12.6 % 491
Amortization of Identifiable Intangibles 73 79 -7.6 % 73
Loss Contingency (1)   - 553 n/m     -
Other 3,515 3,624 -3.0 % 3,356
Total Noninterest Expense 24,754 25,561 -3.2 % 24,664
           
Income Before Income Taxes 25,904 25,866 0.1 % 22,233
Income Tax Provision 6,342 6,241 1.6 % 5,271
Net Income $ 19,562 $ 19,625 -0.3 % $ 16,962
           
Average Common Shares Outstanding 26,935 26,942 0.0 % 27,068
Diluted Common Shares Outstanding 26,951 26,987 -0.1 % 27,139
           
Per Common Share Data:          
Basic Earnings $ 0.72 $ 0.73 -1.9   $ 0.63
Diluted Earnings 0.72 0.73 -1.9   0.63
Dividends Paid 0.41 0.41 0.0 % 0.41


      %  
  6/30'20YTD 6/30'19YTD Change  
Interest & Fee Income:        
Loans $ 29,087 $ 29,619 -1.8
Investment Securities:        
Equity Securities 206 197 4.5 %
Debt Securities Available For Sale 43,744 35,344 23.8 %
Debt Securities Held To Maturity 7,524 10,253 -26.6 %
Interest-Bearing Cash 969 3,696 -73.8 %
Total Interest & Fee Income 81,530 79,109 3.1 %
         
Interest Expense:        
Transaction Deposits 158 240 -34.4 %
Savings Deposits 441 428 3.2 %
Time Deposits 259 295 -12.2 %
Short-Term Borrowed Funds 18 18 1.1 %
Other Borrowed Funds 1   - n/m  
Total Interest Expense 877 981 -10.7 %
         
Net Interest Income 80,653 78,128 3.2 %
         
Provision for Credit Losses   4,300   - n/m  
         
Noninterest Income:        
Service Charges  7,399 8,997 -17.8 %
Merchant Processing Services 4,635 5,215 -11.1 %
Debit Card Fees 2,927 3,148 -7.0 %
Trust Fees 1,491 1,466 1.7 %
ATM Processing Fees 1,097 1,355 -19.0 %
Other Service Fees 926 1,162 -20.3 %
Financial Services Commissions 248 194 27.4 %
Life Insurance Gains   -   433 n/m  
Securities Gains   71   50 n/m  
Other Income (4) 2,408 1,847 30.4 %
Total Noninterest Income 21,202 23,867 -11.2 %
         
Noninterest Expense:        
Salaries and  Benefits 25,918 26,198 -1.1 %
Occupancy and Equipment 9,723 9,964 -2.4 %
Outsourced Data Processing 4,729 4,736 -0.1 %
Professional Fees 1,032 1,146 -9.9 %
Courier Service 999 893 11.9 %
Amortization of Identifiable Intangibles 146 389 -62.5 %
Loss Contingency (1)   -   553 n/m  
Other 6,871 6,865 0.1 %
Total Noninterest Expense 49,418 50,744 -2.6 %
         
Income Before Income Taxes 48,137 51,251 -6.1 %
Income Tax Provision 11,613 11,980 -3.1 %
Net Income $ 36,524 $ 39,271 -7.0 %
         
Average Common Shares Outstanding 27,001 26,892 0.4 %
Diluted Common Shares Outstanding 27,024 26,950 0.3 %
         
Per Common Share Data:        
Basic Earnings $ 1.35 $ 1.46 -7.5 %
Diluted Earnings 1.35 1.46 -7.4 %
Dividends Paid 0.82 0.81 1.2 %
         


Footnotes and Abbreviations:  
           
  (1) In the second quarter 2019, the Company recorded a $301 thousand increase in estimated customer refunds of revenue recognized prior to 2018 and a $252 thousand loss settlement to dismiss a lawsuit.
  (2) 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. 
  (3) The Company adopted ASU 2016-13, effective January 1, 2020.  Debt Securities Held To Maturity of $638,281 thousand at June 30, 2020 and $681,821 thousand at March 31, 2020 are net of related reserve for expected credit losses of $16 thousand.
  (4) 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.  

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