Westamerica Bancorporation Reports Fourth Quarter 2020 Financial Results

SAN RAFAEL, Calif., Jan. 21, 2021 (GLOBE NEWSWIRE) — Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the fourth quarter 2020 of $23.8 million and diluted earnings per common share (“EPS”) of $0.89. Fourth quarter 2020 results include a gain on sale of a closed branch building, make-whole interest income on corporate bonds redeemed prior to maturity, and a customary adjustment to the tax provision for the filed 2019 tax returns which increased EPS $0.15. These results compare to net income of $20.1 million and EPS of $0.74 for the third quarter 2020 and net income of $20.7 million and EPS of $0.77 for the fourth quarter 2019.
“Westamerica remains focused on maintaining superior customer service during the pandemic. In keeping all our branches open, we are following all health orders affecting our business to provide a safe environment for our customers and employees. Operating expenses were $24.5 million for the fourth quarter 2020, representing only 43 percent of revenues on a fully-taxable equivalent basis. Westamerica’s revenues continue to reflect current operating conditions, including reduced demand for certain bank products and services due to the pandemic, and low market interest rates. Credit quality remained stable with nonperforming loans of $4.8 million at December 31, 2020,” said Chairman, President and CEO David Payne. “Fourth quarter 2020 results generated an annualized 13.2 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 $43.3 million for the fourth quarter 2020, including make-whole interest income on called corporate bonds of $1.9 million. Fourth quarter 2020 net interest income (FTE) compares to $41.8 million for the third quarter 2020 and $40.5 million for the fourth quarter 2019. Average total deposits grew $123 million from the third quarter 2020 to the fourth quarter 2020. Checking and savings deposits represented ninety-seven percent of the Company’s average deposit base during the fourth quarter 2020 generating a 0.03 percent annualized cost of funding interest-earning assets.At December 31, 2020, nonperforming loans totaled $4.8 million and the allowance for credit losses on loans was $23.9 million. The Company continues to work with loan customers requesting deferral of loan payments due to economic weakness caused by the pandemic. At December 31, 2020, consumer loans granted loan deferrals totaled $2.5 million, commercial real estate loans with deferred payments totaled $7.8 million, primarily for hospitality, restaurant and retail properties, and commercial loans with deferred payments totaled $33 thousand. The commercial real estate loans with deferred payments are seasoned with low loan-to-value ratios.Noninterest income for the fourth quarter 2020 totaled $14.0 million, including a $3.5 million gain on sale of a closed branch building. Noninterest income was $10.5 million and $11.7 million for the third quarter 2020 and fourth quarter 2019, respectively.Noninterest expense for the fourth quarter 2020 was $24.5 million compared to $24.6 million for the third quarter 2020 and $24.2 million for the fourth quarter 2019.The tax rate (FTE) applied to pre-tax income (FTE) was 27.1 percent for the fourth quarter 2020 compared to 27.5 percent for the third quarter 2020 and 26.0 percent for the fourth quarter 2019. The fourth quarter 2020 tax provision was reduced by $250 thousand resulting from a customary adjustment to true-up the Company’s 2019 estimated tax provision to the filed 2019 tax return.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.comFor additional information contact:
Westamerica Bancorporation
1108 Fifth Avenue, San Rafael, CA 94901
Robert A. Thorson – SVP & Treasurer
707-863-6840
investments@westamerica.comFORWARD-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 September 30, 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.