SAN RAFAEL, CA: Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the first quarter 2019 of $19.6 million and diluted earnings per common share (“EPS”) of $0.73. These results compare to net income of $19.1 million and EPS of $0.71 for the fourth quarter 2018 and net income of $17.5 million and EPS of $0.66 for the first quarter 2018.
“The annualized net interest margin increased to 3.12 percent for the first quarter 2019 from 3.06 percent in the fourth quarter 2018. The yields earned on loans and investment securities improved while our annualized funding costs were unchanged at 0.04 percent of our interest-earning assets. Operating expenses declined to $25.2 million for the first quarter 2019 from $25.8 million for the fourth quarter 2018; operating costs represented only 49 percent of revenues, on a fully-taxable equivalent basis, for the first quarter 2019. Asset quality remained high with nonperforming assets totaling only $4.4 million at March 31, 2019,” said Chairman, President and CEO David Payne. “First quarter 2019 results generated an annualized 12.2 percent return on average common equity,” concluded Payne.
Net interest income on a fully-taxable equivalent (FTE) basis was $40.2 million for the first quarter 2019, compared to $40.3 million for the fourth quarter 2018 and $37.3 million for the first quarter 2018. The annualized net interest margin (FTE) was 3.12 percent for the first quarter 2019, compared to 3.06 percent for the fourth quarter 2018 and 2.89 percent for the first quarter 2018. Average earning asset volumes declined in the first quarter 2019 compared to the fourth quarter 2018 as expected seasonal deposit declines reduced interest-bearing cash balances. Checking and savings deposits, which are less sensitive to rising interest rates than time deposits, represented ninety-six percent of the Company’s average deposit base during the first quarter 2019.
The Company recognized no provision for loan losses for the first quarter 2019 given low levels of nonperforming loans and other credit quality attributes.
Noninterest income for the first quarter 2019 totaled $11.6 million, compared to $11.9 million for the fourth quarter 2018, and $12.0 million for the first quarter 2018.
Noninterest expense for the first quarter 2019 totaled $25.2 million, a decline of $604 thousand compared to the fourth quarter 2018 due to lower occupancy and equipment expenses, amortization of intangible assets and operating losses on limited partnership investments. Noninterest expense for the first quarter 2019 was $839 thousand lower than noninterest expense for the first quarter 2018 due to lower personnel costs, professional fees and amortization of intangible assets, offset in part by higher occupancy and equipment expenses.
The tax rate (FTE) applied to pre-tax income (FTE) was 26.3 percent for the first quarter 2019, compared to 27.8 percent for the fourth quarter 2018 and 24.6 percent for the first quarter 2018. The lower tax rates in the first quarter 2019 and first quarter 2018 are due to tax benefits of $284 thousand and $451 thousand, respectively, for tax deductions from the exercise of employee stock options which exceeded related compensation expense recognized in the financial statements.
Westamerica Bancorporation’s wholly owned subsidiary Westamerica Bank, operates commercial banking and trust offices throughout Northern and Central California.
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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, 2018 filed on Form 10-K and quarterly report for the quarter ended September 30, 2018 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.
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For additional information contact:
Robert A. Thorson, Senior Vice President and Chief Financial Officer, (707) 863-6840