For Immediate Release
San Rafael, CA: Westamerica Bancorporation (NASDAQ: WABC), parent company of Westamerica Bank, generated net income for the first quarter 2015 of $14.6 million and diluted earnings per common share (“EPS”) of $0.57, compared to net income of $15.0 million and EPS of $0.58 for the prior quarter. In the first quarter 2015, Westamerica Bancorporation paid a $0.38 per common share dividend to its shareholders.
“Westamerica’s credit quality is much improved from one year ago with nonperforming assets declining 24 percent to $23 million at March 31, 2015. Net losses on loans were $298 thousand in the first quarter 2015, which was only 0.07 percent of total average loans on an annualized basis. With credit quality stable at very healthy levels, the provision for loan losses was reduced to zero for the first quarter 2015. Our annualized net interest margin was 3.43 percent in the first quarter 2015, down from 3.53 percent in the prior quarter. Low market interest rates continue to pressure our net interest margin, particularly the securities portfolio yield as we are currently purchasing shorter-duration, lower-yielding securities in anticipation of rising interest rates. Our margin is supported by a relatively low annualized funding cost of 0.06 percent. During the first quarter 2015, 91 percent of our average deposits were low-cost checking and savings deposits. Operating costs remained stable in the first quarter 2015, representing a relatively low 54 percent of total revenues, on a fully-taxable equivalent basis,” said Chairman, President and CEO David Payne. “Our operating results generated an annualized return on shareholders’ common equity of 11.4 percent for the first quarter 2015,” concluded Payne.
Net interest income on a fully taxable equivalent (“FTE”) basis was $36.9 million for the first quarter 2015, compared to $37.3 million for the prior quarter and $38.9 million for the first quarter 2014. 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 0.06 percent for the first quarter 2015, down from 0.08 percent for the prior quarter, and down from 0.09 percent for the first quarter 2014. The annualized net interest margin on a fully taxable equivalent basis was 3.43 percent for the first quarter 2015, compared to 3.53 percent for the prior quarter and 3.83 percent for the first quarter 2014.
The provision for loan losses was zero for the first quarter 2015, down from $200 thousand for the prior quarter, and down from $1.0 million for the first quarter 2014. Net loan losses charged against the allowance for loan losses totaled $298 thousand for the first quarter 2015, compared to $484 thousand for the prior quarter and $584 thousand for the first quarter 2014. At March 31, 2015, the allowance for loan losses totaled $31.2 million; nonperforming originated loans totaled $3.5 million; and nonperforming purchased loans totaled $10.0 million.
Noninterest income for the first quarter 2015 totaled $12.3 million, compared to $12.5 million for the prior quarter and $13.0 million for the first quarter 2014. Noninterest income was lower in the first quarter 2015 due to reduced levels of service charges on deposit accounts. Further, merchant processing service fees declined $221 thousand in the first quarter 2015 compared to the first quarter 2014.
Noninterest expense for the first quarter 2015 totaled $26.7 million, compared to $26.4 million in the prior quarter and $26.9 million for the first quarter 2014.
At March 31, 2015, Westamerica Bancorporation’s tangible common equity-to-asset ratio was 8.0 percent, assets totaled $5.0 billion and loans outstanding totaled $1.7 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, 2014 filed on Form 10-K and quarterly report for the quarter ended September 30, 2014 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