Westamerica Bancorporation Reports Second Quarter 2023 Financial Results

SAN RAFAEL, Calif., July 20, 2023 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the second quarter 2023 of $40.2 million and diluted earnings per common share ("EPS") of $1.51, which represents the highest second quarter results in Company history. Second quarter 2023 results compare to net income for first quarter 2023 of $40.5 million and EPS of $1.51; the first quarter 2023 included a $1.6 million reversal of provision for credit losses, which increased EPS $0.04.

"Westamerica’s second quarter 2023 results benefited from the Company’s valuable low-cost deposit base; the annualized cost of funding our loan and bond portfolios was 0.04 percent in the second quarter 2023, compared to 0.03 percent in the prior quarter. The Company’s customer deposits and shareholders’ equity fully funded our interest earning assets during the quarter; there was no borrowing from the Federal Reserve Bank or correspondent banks. The second quarter 2023 also benefited from higher yields on variable-rate assets. Operating expenses were well controlled and credit quality remained stable with nonperforming assets of $853 thousand at June 30, 2023,” said Chairman, President and CEO David Payne. “Second quarter 2023 results generated an annualized 18.4 percent return on average common equity. Shareholders were paid a $0.42 per common share dividend during the second quarter 2023,” concluded Payne.

Net interest income on a fully-taxable equivalent (FTE) basis was $70.3 million for the second quarter 2023, compared to $69.6 million for the first quarter 2023. The annualized yield (FTE) earned on loans, bonds and cash for the second quarter 2023 was 4.38 percent, up from 4.21 percent for the first quarter 2023. The annualized cost of funding the loan and bond portfolios was 0.04 percent for the second quarter 2023 and 0.03 percent for the first quarter 2023. Variable rate assets at June 30, 2023 included $1.5 billion in collateralized loan obligations for which interest rates reset quarterly.

Noninterest income for the second quarter 2023 totaled $10.7 million compared to $10.5 million for the first quarter 2023.

Noninterest expenses for the second quarter 2023 were $25.8 million compared to $26.2 million for the first quarter 2023; the decline in noninterest expenses is primarily due to declines in seasonal payroll taxes and occupancy and equipment expenses.

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 & Chief Financial Officer
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 annual report for the year ended December 31, 2022 filed on Form 10-K and quarterly report for the quarter ended March 31, 2023 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 2010, 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, 2023
1. Net Income Summary.
		(in thousands except per-share amounts)
								%
		Q2'2023			Q2'2022			Change		Q1'2023
	Net Interest and Fee Income (FTE)	$	70,281		$	48,033		46.3	%	$	69,562
	Reversal of Provision for Credit Losses (2)		-			-		n/m			(1,550	)
	Noninterest Income		10,700			11,264		-5.0	%		10,549
	Noninterest Expense		25,839			24,629		4.9	%		26,210
	Income Before Taxes (FTE)		55,142			34,668		59.1	%		55,451
	Income Tax Provision (FTE)		14,894			9,354		59.2	%		15,000
	Net Income	$	40,248		$	25,314		59.0	%	$	40,451
	Average Common Shares Outstanding		26,648			26,889		-0.9	%		26,859
	Diluted Average Common Shares Outstanding		26,648			26,901		-0.9	%		26,866
	Operating Ratios:
	Basic Earnings Per Common Share	$	1.51		$	0.94		60.6	%	$	1.51
	Diluted Earnings Per Common Share		1.51			0.94		60.6	%		1.51
	Return On Assets (a)		2.35	%		1.37	%				2.31	%
	Return On Common Equity (a)		18.4	%		12.9	%				19.1	%
	Net Interest Margin (FTE) (a)		4.34	%		2.74	%				4.18	%
	Efficiency Ratio (FTE)		31.9	%		41.5	%				32.7	%
	Dividends Paid Per Common Share	$	0.42		$	0.42		0.0	%	$	0.42
	Common Dividend Payout Ratio		28	%		45	%				28	%
								%
		6/30'23YTD			6/30'22YTD			Change
	Net Interest and Fee Income (FTE)	$	139,843		$	91,840		52.3	%
	Reversal of Provision for Credit Losses (2)		(1,550	)		-		n/m
	Noninterest Income (1)		21,249			22,840		-7.0	%
	Noninterest Expense		52,049			49,504		5.1	%
	Income Before Taxes (FTE)		110,593			65,176		69.7	%
	Income Tax Provision (FTE)		29,894			17,246		73.3	%
	Net Income	$	80,699		$	47,930		68.4	%
	Average Common Shares Outstanding		26,753			26,880		-0.5	%
	Diluted Average Common Shares Outstanding		26,756			26,893		-0.5	%
	Operating Ratios:
	Basic Earnings Per Common Share	$	3.02		$	1.78		69.7	%
	Diluted Earnings Per Common Share		3.02			1.78		69.7	%
	Return On Assets (a)		2.33	%		1.30	%
	Return On Common Equity (a)		18.7	%		12.4	%
	Net Interest Margin (FTE) (a)		4.26	%		2.63	%
	Efficiency Ratio (FTE)		32.3	%		43.2	%
	Dividends Paid Per Common Share	$	0.84		$	0.84		0.0	%
	Common Dividend Payout Ratio		28	%		47	%
2. Net Interest Income.
		(dollars in thousands)
								%
		Q2'2023			Q2'2022			Change		Q1'2023
	Interest and Fee Income (FTE)	$	70,888		$	48,516		46.1	%	$	70,033
	Interest Expense		607			483		25.7	%		471
	Net Interest and Fee Income (FTE)	$	70,281		$	48,033		46.3	%	$	69,562
	Average Earning Assets	$	6,457,270		$	7,000,862		-7.8	%	$	6,665,156
	Average Interest- Bearing Liabilities		3,144,264			3,549,140		-11.4	%		3,287,158
	Yield on Earning Assets (FTE) (a)		4.38	%		2.77	%				4.21	%
	Cost of Funds (a)		0.04	%		0.03	%				0.03	%
	Net Interest Margin (FTE) (a)		4.34	%		2.74	%				4.18	%
	Interest Expense/
	Interest-Bearing Liabilities (a)		0.08	%		0.05	%				0.06	%
	Net Interest Spread (FTE) (a)		4.30	%		2.72	%				4.15	%
								%
		6/30'23YTD			6/30'22YTD			Change
	Interest and Fee Income (FTE)	$	140,921		$	92,803		51.8	%
	Interest Expense		1,078			963		11.9	%
	Net Interest and Fee Income (FTE)	$	139,843		$	91,840		52.3	%
	Average Earning Assets	$	6,560,639		$	6,999,556		-6.3	%
	Average Interest- Bearing Liabilities		3,215,316			3,547,651		-9.4	%
	Yield on Earning Assets (FTE) (a)		4.29	%		2.66	%
	Cost of Funds (a)		0.03	%		0.03	%
	Net Interest Margin (FTE) (a)		4.26	%		2.63	%
	Interest Expense/
	Interest-Bearing Liabilities (a)		0.07	%		0.05	%
	Net Interest Spread (FTE) (a)		4.22	%		2.61	%
3. Loans & Other Earning Assets.
		(average volume, dollars in thousands)
								%
		Q2'2023			Q2'2022			Change		Q1'2023
	Total Assets	$	6,865,591		$	7,420,069		-7.5	%	$	7,112,317
	Total Earning Assets		6,457,270			7,000,862		-7.8	%		6,665,156
	Total Loans		926,795			1,009,633		-8.2	%		945,864
	Commercial Loans		157,975			202,585		-22.0	%		165,360
	Commercial Real Estate Loans		491,902			508,003		-3.2	%		493,132
	Consumer Loans		276,918			299,045		-7.4	%		287,372
	Total Investment Securities		5,365,377			5,008,929		7.1	%		5,548,780
	Debt Securities Available for Sale		4,460,339			4,721,083		-5.5	%		4,636,098
	Debt Securities Held to Maturity		905,038			287,846		214.4	%		912,682
	Total Interest-Bearing Cash		165,098			982,300		-83.2	%		170,512
	Loans/Deposits		16.0	%		15.7	%				15.6	%
								%
		6/30'23YTD			6/30'22YTD			Change
	Total Assets	$	6,988,272		$	7,413,233		-5.7	%
	Total Earning Assets		6,560,639			6,999,556		-6.3	%
	Total Loans		936,277			1,019,623		-8.2	%
	Commercial Loans		161,647			205,228		-21.2	%
	Commercial Real Estate Loans		492,514			515,977		-4.5	%
	Consumer Loans		282,116			298,418		-5.5	%
	Total Investment Securities		5,456,572			4,978,557		9.6	%
	Debt Securities Available for Sale		4,547,733			4,688,714		-3.0	%
	Debt Securities Held to Maturity		908,839			289,843		213.6	%
	Total Interest-Bearing Cash		167,790			1,001,376		-83.2	%
	Loans/Deposits		15.8	%		15.9	%
4. Deposits, Other Interest-Bearing Liabilities & Equity.
		(average volume, dollars in thousands)
								%
		Q2'2023			Q2'2022			Change		Q1'2023
	Total Deposits	$	5,797,504		$	6,424,202		-9.8	%	$	6,061,923
	Noninterest Demand		2,751,319			2,998,360		-8.2	%		2,851,600
	Interest-Bearing Transaction		1,159,653			1,298,665		-10.7	%		1,233,439
	Savings		1,763,410			1,985,325		-11.2	%		1,847,428
	Time greater than $100K		53,901			63,790		-15.5	%		57,630
	Time less than $100K		69,221			78,062		-11.3	%		71,826
	Total Short-Term Borrowings		98,079			123,298		-20.5	%		76,835
	Shareholders' Equity		877,964			788,078		11.4	%		858,473
	Demand Deposits/ Total Deposits		47.5	%		46.7	%				47.0	%
	Transaction & Savings Deposits / Total Deposits		97.9	%		97.8	%				97.9	%
								%
		6/30'23YTD			6/30'22YTD			Change
	Total Deposits	$	5,928,983		$	6,408,915		-7.5	%
	Noninterest Demand		2,801,183			3,001,694		-6.7	%
	Interest-Bearing Transaction		1,196,342			1,281,975		-6.7	%
	Savings		1,805,187			1,982,723		-9.0	%
	Time greater than $100K		55,755			63,980		-12.9	%
	Time less than $100K		70,516			78,543		-10.2	%
	Total Short-Term Borrowings		87,516			140,430		-37.7	%
	Shareholders' Equity		868,272			782,184		11.0	%
	Demand Deposits/ Total Deposits		47.2	%		46.8	%
	Transaction & Savings Deposits / Total Deposits		97.9	%		97.8	%
5. Interest Yields Earned & Rates Paid.
		(dollars in thousands)
		Q2'2023
		Average			Income/			Yield (a) /
		Volume			Expense			Rate (a)
	Interest & Fee Income Earned:
	Total Earning Assets (FTE)	$	6,457,270		$	70,888		4.38	%
	Total Loans (FTE)		926,795			11,937		5.17	%
	Commercial Loans (FTE)		157,975			2,777		7.05	%
	Commercial Real Estate Loans		491,902			5,732		4.67	%
	Consumer Loans		276,918			3,428		4.97	%
	Total Investments (FTE)		5,365,377			56,841		4.22	%
	Total Debt Securities Available for Sale (FTE)		4,460,339			47,752		4.26	%
	Corporate Securities		2,210,511			15,456		2.80	%
	Collateralized Loan Obligations		1,555,328			26,754		6.81	%
	Agency Mortgage Backed Securities		291,270			1,765		2.42	%
	Securities of U.S. Government sponsored entities		306,983			2,776		3.62	%
	Obligations of States and Political Subdivisions (FTE)		82,074			617		3.00	%
	Other Debt Securities Available for Sale (FTE)		14,173			384		10.84	%
	Total Debt Securities Held to Maturity (FTE)		905,038			9,089		4.02	%
	Agency Mortgage Backed Securities		94,960			510		2.15	%
	Corporate Securities		724,157			7,816		4.32	%
	Obligations of States and Political Subdivisions (FTE)		85,921			763		3.56	%
	Total Interest-Bearing Cash		165,098			2,110		5.06	%
	Interest Expense Paid:
	Total Earning Assets		6,457,270			607		0.04	%
	Total Interest-Bearing Liabilities		3,144,264			607		0.08	%
	Total Interest-Bearing Deposits		3,046,185			582		0.08	%
	Interest-Bearing Transaction		1,159,653			104		0.04	%
	Savings		1,763,410			396		0.09	%
	Time less than $100K		69,221			51		0.30	%
	Time greater than $100K		53,901			31		0.23	%
	Total Short-Term Borrowings		98,079			25		0.10	%
	Net Interest Income and
	Margin (FTE)				$	70,281		4.34	%
		Q2'2022
		Average			Income/			Yield (a) /
		Volume			Expense			Rate (a)
	Interest & Fee Income Earned:
	Total Earning Assets (FTE)	$	7,000,862		$	48,516		2.77	%
	Total Loans (FTE)		1,009,633			12,426		4.94	%
	Commercial Loans (FTE)		202,585			2,716		5.38	%
	Commercial Real Estate Loans		508,003			6,192		4.89	%
	Consumer Loans		299,045			3,518		4.72	%
	Total Investments (FTE)		5,008,929			34,088		2.72	%
	Total Debt Securities Available for Sale (FTE)		4,721,083			32,059		2.72	%
	Corporate Securities		2,589,490			17,857		2.76	%
	Collateralized Loan Obligations		1,610,811			10,572		2.60	%
	Agency Mortgage Backed Securities		357,727			2,049		2.29	%
	Securities OF U.S. Government sponsored entities		59,892			533		3.56	%
	Obligations of States and Political Subdivisions (FTE)		88,829			682		3.07	%
	Other Debt Securities Available for Sale (FTE)		14,334			366		10.23	%
	Total Debt Securities Held to Maturity (FTE)		287,846			2,029		2.82	%
	Agency Mortgage Backed Securities		128,319			595		1.85	%
	Corporate Securities		17,749			202		4.56	%
	Obligations of States and Political Subdivisions (FTE)		141,778			1,232		3.48	%
	Total Interest-Bearing Cash		982,300			2,002		0.81	%
	Interest Expense Paid:
	Total Earning Assets		7,000,862			483		0.03	%
	Total Interest-Bearing Liabilities		3,549,140			483		0.05	%
	Total Interest-Bearing Deposits		3,425,842			461		0.05	%
	Interest-Bearing Transaction		1,298,665			91		0.03	%
	Savings		1,985,325			288		0.06	%
	Time less than $100K		78,062			42		0.22	%
	Time greater than $100K		63,790			40		0.25	%
	Total Short-Term Borrowings		123,298			22		0.07	%
	Net Interest Income and
	Margin (FTE)				$	48,033		2.74	%
6. Noninterest Income.
		(dollars in thousands except per-share amounts)
								%
		Q2'2023			Q2'2022			Change		Q1'2023
	Service Charges on Deposit Accounts	$	3,459		$	3,687		-6.2	%	$	3,465
	Merchant Processing Services		2,869			3,374		-15.0	%		2,637
	Debit Card Fees		1,759			1,709		2.9	%		1,642
	Trust Fees		810			809		0.1	%		765
	ATM Processing Fees		702			469		49.7	%		654
	Other Service Fees		458			480		-4.6	%		399
	Financial Services Commissions		103			118		-12.7	%		89
	Securities Losses		(125	)		-		n/m			-
	Other Noninterest Income		665			618		7.6	%		898
	Total Noninterest Income	$	10,700		$	11,264		-5.0	%	$	10,549
	Operating Ratios:
	Total Revenue (FTE)	$	80,981		$	59,297		36.6	%	$	80,111
	Noninterest Income/Revenue (FTE)		13.2	%		19.0	%				13.2	%
	Service Charges/Avg. Deposits (a)		0.24	%		0.23	%				0.23	%
	Total Revenue (FTE) Per Avg.
	Common Share (a)	$	12.19		$	8.85		37.8	%	$	12.10
								%
		6/30'23YTD			6/30'22YTD			Change
	Service Charges on Deposit Accounts	$	6,924		$	7,269		-4.7	%
	Merchant Processing Services		5,506			5,997		-8.2	%
	Debit Card Fees (1)		3,401			4,581		-25.8	%
	Trust Fees		1,575			1,652		-4.7	%
	ATM Processing Fees		1,356			920		47.4	%
	Other Service Fees		857			929		-7.8	%
	Financial Services Commissions		192			235		-18.3	%
	Securities Losses		(125	)		-		n/m
	Other Noninterest Income		1,563			1,257		24.3	%
	Total Noninterest Income	$	21,249		$	22,840		-7.0	%
	Operating Ratios:
	Total Revenue (FTE)	$	161,092		$	114,680		40.5	%
	Noninterest Income/Revenue (FTE)		13.2	%		19.9	%
	Service Charges/Avg. Deposits (a)		0.24	%		0.23	%
	Total Revenue (FTE) Per Avg.
	Common Share (a)	$	12.14		$	8.60		41.1	%
7. Noninterest Expense.
		(dollars in thousands)
								%
		Q2'2023			Q2'2022			Change		Q1'2023
	Salaries & Benefits	$	11,828		$	11,412		3.6	%	$	12,067
	Occupancy and Equipment		5,012			4,856		3.2	%		5,485
	Outsourced Data Processing		2,488			2,423		2.7	%		2,444
	Limited Partnership Operating Losses		1,440			1,431		0.6	%		1,434
	Professional Fees		485			736		-34.1	%		476
	Courier Service		611			661		-7.6	%		615
	Other Noninterest Expense		3,975			3,110		27.8	%		3,689
	Total Noninterest Expense	$	25,839		$	24,629		4.9	%	$	26,210
	Operating Ratios:
	Noninterest Expense/ Avg. Earning Assets (a)		1.60	%		1.41	%				1.59	%
	Noninterest Expense/Revenues (FTE)		31.9	%		41.5	%				32.7	%
								%
		6/30'23YTD			6/30'22YTD			Change
	Salaries & Benefits	$	23,895		$	23,332		2.4	%
	Occupancy and Equipment		10,497			9,602		9.3	%
	Outsourced Data Processing		4,932			4,860		1.5	%
	Limited Partnership Operating Losses		2,874			2,862		0.4	%
	Professional Fees		961			1,472		-34.7	%
	Courier Service		1,226			1,243		-1.4	%
	Other Noninterest Expense		7,664			6,133		25.0	%
	Total Noninterest Expense	$	52,049		$	49,504		5.1	%
	Operating Ratios:
	Noninterest Expense/ Avg. Earning Assets (a)		1.60	%		1.43	%
	Noninterest Expense/Revenues (FTE)		32.3	%		43.2	%
8. Allowance for Credit Losses.
		(dollars in thousands)
								%
		Q2'2023			Q2'2022			Change		Q1'2023
	Average Total Loans	$	926,795		$	1,009,633		-8.2	%	$	945,864
	Beginning of Period Allowance for
	Credit Losses on Loans (ACLL)	$	19,509		$	22,925		-14.9	%	$	20,284
	Reversal of Provision for Credit Losses (2)		-			-		n/m			(1,550	)
	Net ACLL (Losses) Recoveries		(1,029	)		(612	)	68.1	%		775
	End of Period ACLL	$	18,480		$	22,313		-17.2	%	$	19,509
	Gross ACLL Recoveries / Gross ACLL Losses		38	%		57	%				138	%
	Net ACLL Losses (Recoveries) /
	Avg. Total Loans (a)		0.45	%		0.24	%				-0.33	%
								%
		6/30'23YTD			6/30'22YTD			Change
	Average Total Loans	$	936,277		$	1,019,623		-8.2	%
	Beginning of Period ACLL	$	20,284		$	23,514		-13.7	%
	Reversal of Provision for Credit Losses (2)		(1,550	)		-		n/m
	Net ACLL Losses		(254	)		(1,201	)	-78.9	%
	End of Period ACLL	$	18,480		$	22,313		-17.2	%
	Gross ACLL Recoveries / Gross ACLL Losses		93	%		54	%
	Net ACLL Losses / Avg. Total Loans (a)		0.05	%		0.24	%
		(dollars in thousands)
								%
		6/30/23			6/30/22			Change		3/31/23
	Allowance for Credit Losses on Loans	$	18,480		$	22,313		-17.2	%	$	19,509
	Allowance for Credit Losses on
	Held to Maturity Securities		1			7		-85.5	%		1
	Total Allowance for Credit Losses	$	18,481		$	22,320		-17.2	%	$	19,510
	Allowance for Unfunded
	Credit Commitments	$	201		$	201		0.0	%	$	201
9. Credit Quality.
		(dollars in thousands)
								%
		6/30/23			6/30/22			Change		3/31/23
	Nonperforming Loans:
	Nonperforming Nonaccrual Loans	$	192		$	12		n/m		$	207
	Performing Nonaccrual Loans		5			235		-97.9	%		7
	Total Nonaccrual Loans		197			247		-20.2	%		214
	90+ Days Past Due Accruing Loans		656			614		6.8	%		571
	Total Nonperforming Loans	$	853		$	861		-0.9	%	$	785
	Total Loans Outstanding	$	919,583		$	999,768		-8.0	%	$	938,628
	Total Assets		6,582,740			7,222,405		-8.9	%		6,700,471
	Loans:
	Allowance for Credit Losses on Loans	$	18,480		$	22,313		-17.2	%	$	19,509
	Allowance for Credit Losses on Loans / Loans		2.01	%		2.23	%				2.08	%
	Nonperforming Loans/Total Loans		0.09	%		0.09	%				0.08	%
10. Liquidity.
	At June 30, 2023, the Company had $266,187 thousand in cash balances. During the twelve months ending June 30, 2024, the Company expects to receive $288,000 thousand in principal payments from its debt securities. If additional operational liquidity is required, the Company can pledge debt securities as collateral for borrowing purposes; at June 30, 2023, the Company’s debt securities which qualify as collateral for borrowing totaled $3,924,826 thousand. In the ordinary course of business, the Company pledges debt securities as collateral for certain depository customers; at June 30, 2023, the Company had pledged $704,822 thousand in debt securities for depository customers. In the ordinary course of business, the Company pledges debt securities as collateral for borrowing from the Federal Reserve Bank; at June 30, 2023, the Company’s had pledged $1,000,132 thousand in debt securities at the Federal Reserve Bank. During the six months ended June 30, 2023, the Company’s average borrowings from the Federal Reserve Bank and other correspondent banks were $-0- thousand, and at June 30, 2023, the Company’s borrowings from the Federal Reserve Bank and other correspondent banks were $-0- thousand. At June 30, 2023, the Company’s estimated unpledged collateral qualifying debt securities totaled $2,072,988 thousand. Debt securities eligible as collateral are shown in market value unless otherwise noted.
										(in thousands)
										6/30/23
	Debt Securities Eligible as Collateral:
	Corporate Securities									$	2,587,771
	Collateralized Loan Obligations rated AAA										503,037
	Obligations of States and Political Subdivisions										162,528
	Agency Mortgage Backed Securities										344,657
	Securities of U.S. Government Sponsored Entities (Par Value)										326,833
	Total Debt Securities Eligible as Collateral									$	3,924,826
	Debt Securities Pledged as Collateral:
	Deposits by Public Entities									($	704,822	)
	Short-Term Borrowed Funds (Deposit Sweep)										(140,765	)
	Other										(6,119	)
	Total Debt Securities Pledged as Collateral									($	851,706	)
	Debt Securities Pledged at the Federal Reserve Bank									($	1,000,132	)
	Estimated Debt Securities Available to Pledge									$	2,072,988
11. Capital.
		(in thousands, except per-share amounts)
								%
		6/30/23			6/30/22			Change		3/31/23
	Shareholders' Equity	$	651,862		$	617,126		5.6	%	$	642,925
	Total Assets		6,582,740			7,222,405		-8.9	%		6,700,471
	Shareholders' Equity/
	Total Assets		9.90	%		8.54	%				9.60	%
	Shareholders' Equity/
	Total Loans		70.89	%		61.73	%				68.50	%
	Tangible Common Equity Ratio		8.20	%		6.97	%				7.92	%
	Common Shares Outstanding		26,648			26,896		-0.9	%		26,648
	Common Equity Per Share	$	24.46		$	22.94		6.6	%	$	24.13
	Market Value Per Common Share		38.30			55.66		-31.2	%		44.30
		(shares in thousands)
								%
		Q2'2023			Q2'2022			Change		Q1'2023
	Share Repurchase Programs:
	Total Shares Repurchased / Canceled		-			-		n/m			274
	Average Repurchase Price	$	-		$	-		n/m		$	50.11
	Net Shares (Issued) Repurchased		-			(13	)	n/m			265
								%
		6/30'23YTD			6/30'22YTD			Change
	Total Shares Repurchased		274			3		n/m
	Average Repurchase Price	$	50.11		$	58.66		n/m
	Net Shares Repurchased (Issued)		265			(30	)	n/m
12. Period-End Balance Sheets.
		(unaudited, dollars in thousands)
								%
		6/30/23			6/30/22			Change		3/31/23
	Assets:
	Cash and Due from Banks	$	266,187		$	753,293		-64.7	%	$	195,202
	Debt Securities Available for Sale
	Corporate Securities		1,901,504			2,296,853		-17.2	%		2,019,240
	Collateralized Loan Obligations		1,514,962			1,601,333		-5.4	%		1,542,377
	Agency Mortgage Backed Securities		259,190			331,425		-21.8	%		276,078
	Securities of U.S. Government sponsored entities		291,402			290,725		0.2	%		297,140
	Obligations of States and Political Subdivisions		79,400			86,676		-8.4	%		82,678
	Other Debt Securities Available for Sale		-			102		n/m			-
	Total Debt Securities Available for Sale		4,046,458			4,607,114		-12.2	%		4,217,513
	Debt Securities Held to Maturity
	Agency Mortgage Backed Securities		91,141			121,810		-25.2	%		98,006
	Corporate Securities		725,252			181,316		300.0	%		723,553
	Obligations of States and Political Subdivisions (3)		83,963			139,228		-39.7	%		87,760
	Total Debt Securities Held to Maturity (3)		900,356			442,354		103.5	%		909,319
	Loans		919,583			999,768		-8.0	%		938,628
	Allowance For Credit Losses on Loans		(18,480	)		(22,313	)	-17.2	%		(19,509	)
	Total Loans, net		901,103			977,455		-7.8	%		919,119
	Premises and Equipment, net		27,908			30,309		-7.9	%		28,331
	Identifiable Intangibles, net		463			707		-34.5	%		523
	Goodwill		121,673			121,673		0.0	%		121,673
	Other Assets		318,592			289,500		10.0	%		308,791
	Total Assets	$	6,582,740		$	7,222,405		-8.9	%	$	6,700,471
	Liabilities and Shareholders' Equity:
	Deposits:
	Noninterest-Bearing	$	2,721,046		$	2,987,725		-8.9	%	$	2,788,992
	Interest-Bearing Transaction		1,133,006			1,303,700		-13.1	%		1,201,356
	Savings		1,735,083			1,983,713		-12.5	%		1,783,667
	Time		116,792			140,453		-16.8	%		125,300
	Total Deposits		5,705,927			6,415,591		-11.1	%		5,899,315
	Short-Term Borrowed Funds		138,005			118,167		16.8	%		83,088
	Other Liabilities		86,946			71,521		21.6	%		75,143
	Total Liabilities		5,930,878			6,605,279		-10.2	%		6,057,546
	Shareholders' Equity:
	Common Equity:
	Paid-In Capital		471,510			473,555		-0.4	%		471,159
	Accumulated Other
	Comprehensive Loss		(252,043	)		(188,025	)	34.0	%		(231,573	)
	Retained Earnings		432,395			331,596		30.4	%		403,339
	Total Shareholders' Equity		651,862			617,126		5.6	%		642,925
	Total Liabilities and
	Shareholders' Equity	$	6,582,740		$	7,222,405		-8.9	%	$	6,700,471
13. Income Statements.
		(unaudited, in thousands except per-share amounts)
								%
		Q2'2023			Q2'2022			Change		Q1'2023
	Interest & Fee Income:
	Loans	$	11,845		$	12,331		-3.9	%	$	11,740
	Equity Securities		152			129		17.8	%		152
	Debt Securities Available for Sale		47,452			31,764		49.4	%		46,810
	Debt Securities Held to Maturity		8,930			1,771		404.3	%		8,980
	Interest-Bearing Cash		2,110			2,002		5.4	%		1,942
	Total Interest & Fee Income		70,489			47,997		46.9	%		69,624
	Interest Expense:
	Transaction Deposits		104			91		14.3	%		94
	Savings Deposits		396			288		37.5	%		280
	Time Deposits		82			82		0.0	%		84
	Short-Term Borrowed Funds		25			22		13.6	%		13
	Total Interest Expense		607			483		25.7	%		471
	Net Interest Income		69,882			47,514		47.1	%		69,153
	Reversal of Provision for Credit Losses (2)		-			-		n/m			(1,550	)
	Noninterest Income:
	Service Charges on Deposit Accounts		3,459			3,687		-6.2	%		3,465
	Merchant Processing Services		2,869			3,374		-15.0	%		2,637
	Debit Card Fees		1,759			1,709		2.9	%		1,642
	Trust Fees		810			809		0.1	%		765
	ATM Processing Fees		702			469		49.7	%		654
	Other Service Fees		458			480		-4.6	%		399
	Financial Services Commissions		103			118		-12.7	%		89
	Securities Losses		(125	)		-		n/m			-
	Other Noninterest Income		665			618		7.6	%		898
	Total Noninterest Income		10,700			11,264		-5.0	%		10,549
	Noninterest Expense:
	Salaries and Related Benefits		11,828			11,412		3.6	%		12,067
	Occupancy and Equipment		5,012			4,856		3.2	%		5,485
	Outsourced Data Processing		2,488			2,423		2.7	%		2,444
	Limited Partnership Operating Losses		1,440			1,431		0.6	%		1,434
	Professional Fees		485			736		-34.1	%		476
	Courier Service		611			661		-7.6	%		615
	Other Noninterest Expense		3,975			3,110		27.8	%		3,689
	Total Noninterest Expense		25,839			24,629		4.9	%		26,210
	Income Before Income Taxes		54,743			34,149		60.3	%		55,042
	Income Tax Provision		14,495			8,835		64.1	%		14,591
	Net Income	$	40,248		$	25,314		59.0	%	$	40,451
	Average Common Shares Outstanding		26,648			26,889		-0.9	%		26,859
	Diluted Average Common Shares Outstanding		26,648			26,901		-0.9	%		26,866
	Per Common Share Data:
	Basic Earnings	$	1.51		$	0.94		60.6	%	$	1.51
	Diluted Earnings		1.51			0.94		60.6	%		1.51
	Dividends Paid		0.42			0.42		0.0	%		0.42
								%
		6/30'23YTD			6/30'22YTD			Change
	Interest & Fee Income:
	Loans	$	23,585		$	25,273		-6.7	%
	Equity Securities		304			257		18.3	%
	Debt Securities Available for Sale		94,262			60,330		56.2	%
	Debt Securities Held to Maturity		17,910			3,415		424.5	%
	Interest-Bearing Cash		4,052			2,481		63.3	%
	Total Interest & Fee Income		140,113			91,756		52.7	%
	Interest Expense:
	Transaction Deposits		198			179		10.6	%
	Savings Deposits		676			571		18.4	%
	Time Deposits		166			163		1.8	%
	Short-Term Borrowed Funds		38			50		-24.0	%
	Total Interest Expense		1,078			963		11.9	%
	Net Interest Income		139,035			90,793		53.1	%
	Reversal of Provision for Credit Losses (2)		(1,550	)		-		n/m
	Noninterest Income:
	Service Charges on Deposit Accounts		6,924			7,269		-4.7	%
	Merchant Processing Services		5,506			5,997		-8.2	%
	Debit Card Fees (1)		3,401			4,581		-25.8	%
	Trust Fees		1,575			1,652		-4.7	%
	ATM Processing Fees		1,356			920		47.4	%
	Other Service Fees		857			929		-7.8	%
	Financial Services Commissions		192			235		-18.3	%
	Securities Losses		(125	)		-		n/m
	Other Operating		1,563			1,257		24.3	%
	Total Noninterest Income		21,249			22,840		-7.0	%
	Noninterest Expense:
	Salaries and Related Benefits		23,895			23,332		2.4	%
	Occupancy and Equipment		10,497			9,602		9.3	%
	Outsourced Data Processing		4,932			4,860		1.5	%
	Limited Partnership Operating Losses		2,874			2,862		0.4	%
	Professional Fees		961			1,472		-34.7	%
	Courier Service		1,226			1,243		-1.4	%
	Other Operating		7,664			6,133		25.0	%
	Total Noninterest Expense		52,049			49,504		5.1	%
	Income Before Income Taxes		109,785			64,129		71.2	%
	Income Tax Provision		29,086			16,199		79.6	%
	Net Income	$	80,699		$	47,930		68.4	%
	Average Common Shares Outstanding		26,753			26,880		-0.5	%
	Diluted Average Common Shares Outstanding		26,756			26,893		-0.5	%
	Per Common Share Data:
	Basic Earnings	$	3.02		$	1.78		69.7	%
	Diluted Earnings		3.02			1.78		69.7	%
	Dividends Paid		0.84			0.84		0.0	%
	Footnotes and Abbreviations:
	(1) The Company received a $1.2 million reconciling payment from a payments network in the first quarter 2022.
	(2) A recovery of a previously charged off loan in the first quarter 2023 resulted in a $1,550 thousand reversal of the allowance for credit loss provision in the first quarter 2023.
	(3) Debt Securities Held To Maturity and Obligations of States and Political Subdivisions are net of related reserve for expected credit losses of $1 thousand at June 30, 2023, March 31, 2023 and $7 thousand at June 30, 2022.
	(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 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