April 15, 2014
For Immediate Release
San Rafael, CA: Westamerica Bancorporation (NASDAQ: WABC), parent company of Westamerica Bank, generated net income for the first quarter 2014 of $15.3 million and diluted earnings per common share ("EPS") of $0.58. First quarter 2014 results compare to net income of $16.1 million and EPS of $0.60 for the prior quarter, and net income of $17.3 million and EPS of $0.64 for the first quarter 2013.
"Westamerica’s credit quality continued to improve, as nonperforming assets and loan charge-offs again declined in the first quarter 2014. Nonperforming assets declined by $5 million, or 14 percent from the prior quarter. Net loan losses were $584 thousand in the first quarter 2014, down from $1.8 million in the prior quarter. As a result, we further reduced our provision for loan losses to $1.0 million for the first quarter 2014 from $1.6 million in the prior quarter. Low market interest rates contributed to continued pressure on our net interest margin, but the impact was moderated by consistent control over operating costs reducing expenses by $1.1 million in the first quarter 2014 compared to the fourth quarter 2013,” said Chairman, President and CEO David Payne. “Our first quarter earnings delivered a relatively high annualized return on common equity of 11.6 percent for our shareholders,” concluded Payne.
Net interest income on a fully taxable equivalent (“FTE”) basis was $38.9 million for the first quarter 2014, compared to $40.1 million for the prior quarter and $43.8 million for the first quarter 2013. Net interest income declined as market interest rates on many loan products remain below the yields earned on older-dated loans and on the overall loan portfolio. The Company is reducing its exposure to rising interest rates by purchasing shorter-duration investment securities which carry lower yields than longer-duration securities. The annualized interest cost of funding the Company's loans and investment securities was 0.09 percent for the first quarter 2014 compared to 0.10 percent for the prior quarter and 0.12 percent for the first quarter 2013. The annualized net interest margin on a fully taxable equivalent basis was 3.83 percent for the first quarter 2014, compared to 3.92 percent for the prior quarter and 4.27 percent for the first quarter 2013.
The provision for loan losses was $1.0 million for the first quarter 2014 compared to $1.6 million for the prior quarter and $2.8 million for the first quarter 2013. Net loan losses charged against the allowance for loan losses totaled $584 thousand for the first quarter 2014, compared to $1.8 million for the prior quarter and $2.7 million for the first quarter 2013. At March 31, 2014, the allowance for loan losses totaled $32.1 million; nonperforming originated loans totaled $5.0 million; and nonperforming purchased loans totaled $12.8 million, net of purchase discounts of $0.5 million.
Noninterest income for the first quarter 2014 totaled $13.0 million, compared to $14.0 million for the prior quarter and $14.3 million for the first quarter 2013. Noninterest income was lower in the first quarter 2014 due to fewer processing days compared to the prior quarter and lower levels of customer transaction activity during the first quarter 2014. Fourth quarter 2013 other noninterest income included a recovery on a purchased loan.
Noninterest expense for the first quarter 2014 totaled $26.9 million, compared to $28.0 million in the prior quarter and $28.7 million for the first quarter 2013. First quarter 2014 expenses declined from the earlier periods due to lower professional fees, lower OREO expenses, net of disposition gains, and other reduced costs. Fourth quarter 2013 personnel costs increased as the Company’s share price performance increased the expense for share-based compensation.
At March 31, 2014, Westamerica Bancorporation's tangible common equity-to-asset ratio was 8.4 percent, assets totaled $4.9 billion and loans outstanding totaled $1.8 billion. Westamerica Bancorporation, through its wholly owned subsidiary Westamerica Bank, operates commercial banking and trust offices throughout Northern and Central California.
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, 2013 filed on Form 10-K and quarterly report for the quarter ended September 30, 2013 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.
For additional information contact:
Robert A. Thorson, Senior Vice President and Chief Financial Officer, (707) 863-6840