Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
October 16, 2008
----------------
WESTAMERICA BANCORPORATION
--------------------------
(Exact Name of Registrant as Specified in Its Charter)
CALIFORNIA
----------
(State or Other Jurisdiction of Incorporation)
001-9383 94-2156203
-------- ----------
(Commission File Number) (IRS Employer Identification No.)
1108 Fifth Avenue, San Rafael, California 94901
----------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(707) 863-6000
--------------
(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
[] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
[] Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
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Exhibits
---------
99.1 Press release dated October 15, 2008
Item 2.02: Results of Operations and Financial Condition
----------------------------------------------------------
On October 15, 2008 Westamerica Bancorporation announced their
earnings for the third quarter of 2008. A copy of the press release
is attached as Exhibit 99.1 to this Form 8-K and is incorporated
herein by reference.
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Signatures
Pursuant to the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
Westamerica Bancorporation
/s/ JOHN "ROBERT" THORSON
-------------------------------------------------
John "Robert" Thorson
Senior Vice President and Chief Financial Officer
October 16, 2008
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INDEX TO EXHIBITS
-----------------
Sequentially
Exhibit No. Description Number Page
----------- ------------------------- -------------
(99.1) Press release dated 5-13
October 15, 2008
Page 5
FOR IMMEDIATE RELEASE
October 15, 2008
WESTAMERICA BANCORPORATION REPORTS
FINANCIAL RESULTS
San Rafael, CA: Westamerica Bancorporation (NASDAQ: WABC) earned net income of
$39 million for the nine months ended September 30, 2008, representing a 13
percent annualized return on average shareholders' equity. At September 30,
2008, Westamerica maintained a reserve for loan losses equivalent to 2.08
percent of total loans and total regulatory capital of 11.3 percent. Results
for the first nine months of 2008 include gains from the sale of VISA common
stock and losses recognized due to the decline in value of Federal Home Loan
Mortgage Corporation ("FHLMC") and Federal National Mortgage Association
("FNMA") preferred stock.
"The strength of our underlying earnings and the high-quality of our loan
portfolio allowed Westamerica to generate a 13 percent return on shareholders'
equity for the first nine months of 2008, exceeding average returns in the
banking industry, in spite of recognizing a decline in value of FHLMC and FNMA
preferred stock. Our net interest margin remained healthy in the third quarter
2008 at 5.19 percent, compared to 5.16 percent in the prior quarter. Our credit
quality remained stable with non-performing assets totaling $13 million at
September 30, 2008, unchanged from June 30, 2008. We were also successful in
reducing operating expenses $1.1 million in the third quarter 2008 compared to
the prior quarter," said Chairman, President and CEO David Payne. "Our high-
quality loan portfolio, ample loan loss reserve, and healthy capital levels
distinguish Westamerica as a safe and sound bank during this troublesome period
for our industry," added Payne.
Page 6
Westamerica generated net income of $39 million, or diluted earnings per share
("EPS") of $1.33 for the nine months ended September 30, 2008. Results for this
period include a $5.7 million gain on the sale of VISA common stock resulting
from VISA's initial public offering ("IPO"), and $2.3 million in reduced
expenses as known litigation contingencies were satisfied as a part of the VISA
IPO. EPS was increased $0.16 due to transactions recognized as a result of the
VISA IPO. Results for this period also include $34 million in losses, net of
tax, recognized as a result of the decline in value of FHLMC and FNMA preferred
stock, which reduced EPS by $1.17. At September 30, 2008, the recorded value of
FHLMC and FNMA preferred stock was $2.8 million. Also, the Company recorded a
$1.0 million reduction in its tax provision primarily due to filing its 2007 tax
return and adjusting 2007 tax estimates to actual amounts included in the filed
tax return, which increased EPS by $0.03. The adjustment primarily resulted from
higher than anticipated tax credits earned on limited partnership investments
providing low-income housing and housing for the elderly in our Northern and
Central California communities.
Westamerica recorded net income of $44 thousand for the three months ended
September 30, 2008. Results for this period include $24 million in losses, net
of tax, recognized as a result of the decline in value of FHLMC and FNMA
preferred stock, which reduced EPS by $0.81. Also, the Company recorded the $1.0
million reduction in its tax provision primarily due to filing its 2007 tax
return, which increased EPS by $0.03.
Net interest income on a fully-taxable equivalent basis ("FTE") totaled $48.7
million in the third quarter 2008, compared to $49.7 million in the second
quarter 2008, and $45.6 million in the third quarter 2007. For the nine month
periods ended September 30, 2008 and 2007, net interest income (FTE) totaled
$146.4 million and $138.5 million, respectively. Net interest income has
increased in 2008 compared to 2007 due to a higher net interest margin,
partially offset by a smaller base of earnings assets, primarily investment
securities. Lower volumes of high-cost funding sources and lower short-term
interest rates have reduced the Company's cost of funds from 1.75 percent in the
nine months ended September 30, 2007 to 0.98 percent in the nine months ended
September 30, 2008. The lower cost of funds has significantly improved the net
interest margin (FTE) from 4.37 percent in the nine months ended September 30,
2007 to 5.04 percent in the nine months ended September 30, 2008.
The provision for credit losses was $600 thousand for the third quarter 2008,
unchanged from the previous quarter and increased from $75 thousand for the
third quarter 2007.
Page 7
Non-interest income for the first nine months of 2008 declined $56.6 million
when compared to the first nine months of 2007 due to: $59.4 million in charges
to record the decline in value of FHLMC and FNMA preferred stock, $5.7 million
gain on sale of VISA stock recognized in the first quarter 2008, $822 thousand
gain from life insurance proceeds recognized in the first quarter of 2007, and
$759 thousand lower fees on the issuance of cashiers' checks.
Non-interest expense for the first nine months of 2008 was $74.6 million,
compared to $74.2 million for the first nine months of 2007. The $400 thousand
increase is primarily due to: $2.3 million reversal of VISA related litigation
expense in the first quarter 2008, $1.5 million higher data processing expense,
and $894 thousand higher personnel costs. Non-interest expense for the
third quarter 2008 was $25.2 million, compared to $26.3 million for the second
quarter 2008 and $24.9 million for the third quarter 2007. Third quarter 2008
expenses were reduced from the prior quarter primarily due to lower personnel
costs, professional fees, and other expenses.
Non-performing assets as a percentage of total assets were 0.33 percent, 0.31
percent and 0.12 percent at September 30, 2008, June 30, 2008 and September 30,
2007, respectively. Annualized net loan losses as a percentage of total average
loans were 0.23 percent and 0.14 percent during the nine months ended September
30, 2008 and 2007, respectively.
Shareholders' equity was $399 million at September 30, 2008 compared to $410
million at June 30, 2008. At September 30, 2008, total regulatory capital
ratios for Westamerica Bancorporation and its subsidiary bank, Westamerica Bank,
were 11.3 percent and 10.7 percent, respectively, exceeding the 10 percent
requirement to be "well capitalized" under regulatory standards.
Westamerica Bancorporation, through its wholly owned subsidiary Westamerica
Bank, operates 86 branches throughout 21 Northern and Central California
counties.
Page 8
Westamerica Bancorporation Web Address: www.westamerica.com
For additional information contact:
Westamerica Bancorporation
Robert A. Thorson - SVP & Chief Financial Officer
707-863-6840
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 annual and quarterly reports filed with
the Securities and Exchange Commission, including the Company's Form 10-Q for
the quarter ended June 30, 2008, and Form 10-K for the year ended December 31,
2007, describe some of these factors, including certain credit, market,
operational, liquidity and interest rate 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 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.
######
Page 9
WESTAMERICA BANCORPORATION Public Information October 15, 2008
FINANCIAL HIGHLIGHTS
September 30, 2008
1. Net Income Summary.
(dollars in thousands except per-share amounts)
Q3'08 / Q3'08 / 9/30'08YTD /
Q3'08 Q3'07 Q3'07 Q2'08 Q2'08 9/30'08YTD 9/30'07YTD 9/30'07YTD
---------------------------------------------------------------------------------------
1 Net Interest Income (Fully $48,693 $45,563 6.9% $49,731 -2.1% $146,407 $138,536 5.7%
Taxable Equivalent)
2 Provision for Credit Losses 600 75 n/m 600 0.0% 1,800 225 n/m
3 Noninterest Income:
4 Life Insurance Gains 0 0 n/m 0 n/m 0 822 n/m
5 Gain on Sale of Visa 0 0 n/m 0 n/m 5,698 0 n/m
Common Stock
6 Investment Securities Losses (41,206) 0 n/m (18,178) n/m (59,384) 0 n/m
and Impairment
7 Other 13,707 14,644 -6.4% 14,335 -4.4% 41,723 43,799 -4.7%
----------------------- ------------ -----------------------
8 Total Noninterest Income (27,499) 14,644 n/m (3,843) n/m (11,963) 44,621 n/m
9 Noninterest Expense:
10 VISA Litigation 0 0 n/m 0 n/m (2,338) 0 n/m
11 Other 25,203 24,853 1.4% 26,337 -4.3% 76,934 74,222 3.7%
----------------------- ------------ -----------------------
12 Total Noninterest Expense 25,203 24,853 1.4% 26,337 -4.3% 74,596 74,222 0.5%
----------------------- ------------ -----------------------
13 Income Before Taxes (FTE) (4,609) 35,279 18,951 58,048 108,710
14 Income Tax (Benefit) Provision (4,653) 13,257 n/m 6,749 n/m 19,023 40,766 -53.3%
(FTE)
----------------------- ------------ -----------------------
15 Net Income $44 $22,022 n/m $12,202 n/m $39,025 $67,944 -42.6%
======================= ============ =======================
16 Average Shares Outstanding 28,908 29,532 -2.1% 28,916 -0.0% 28,895 29,935 -3.5%
17 Diluted Average Shares 29,273 29,915 -2.1% 29,392 -0.4% 29,292 30,365 -3.5%
Outstanding
18 Operating Ratios:
19 Basic Earnings Per Share $0.00 $0.75 n/m $0.42 n/m $1.35 $2.27 -40.5%
20 Diluted Earnings Per Share 0.00 0.74 n/m 0.42 n/m 1.33 2.24 -40.5%
21 Return On Assets (annualized) 0.00% 1.89% 1.15% 1.22% 1.95%
22 Return On Equity (annualized) 0.0% 21.7% 11.9% 12.8% 22.2%
23 Net Interest Margin (FTE) 5.19% 4.34% 5.16% 5.04% 4.37%
(annualized)
24 Efficiency Ratio (FTE) 118.9% 41.3% 57.4% 55.5% 40.5%
25 Dividends Paid Per Share $0.35 $0.34 2.9% $0.35 0.0% $1.04 $1.02 2.0%
26 Dividend Payout Ratio n/m 46% 83% 78% 46%
2. Net Interest Income.
(dollars in thousands)
Q3'08 / Q3'08 / 9/30'08YTD /
Q3'08 Q3'07 Q3'07 Q2'08 Q2'08 9/30'08YTD 9/30'07YTD 9/30'07YTD
---------------------------------------------------------------------------------------
1 Interest and Fee Income (FTE) $56,131 $64,708 -13.3% $58,117 -3.4% $175,058 $194,608 -10.0%
2 Interest Expense 7,438 19,145 -61.2% 8,386 -11.3% 28,651 56,072 -48.9%
----------------------- ------------ -----------------------
3 Net Interest Income (FTE) $48,693 $45,563 6.9% $49,731 -2.1% $146,407 $138,536 5.7%
======================= ============ =======================
4 Average Earning Assets $3,745,058 $4,198,859 -10.8%$3,865,110 -3.1%$3,878,972 $4,243,610 -8.6%
5 Average Interest-Bearing 2,486,659 2,905,457 -14.4% 2,590,406 -4.0% 2,615,724 2,930,690 -10.7%
Liabilities
6 Yield on Earning Assets (FTE) 5.98% 6.14% 6.03% 6.02% 6.12%
(annualized)
7 Cost of Funds (annualized) 0.79% 1.80% 0.87% 0.98% 1.75%
8 Net Interest Margin (FTE) 5.19% 4.34% 5.16% 5.04% 4.37%
(annualized)
9 Interest Expense/Interest-Bearing
Liabilities (annualized) 1.19% 2.60% 1.30% 1.46% 2.54%
10 Net Interest Spread (FTE) 4.79% 3.54% 4.73% 4.56% 3.58%
(annualized)
3. Loans & Other Earning Assets.
(average volume, dollars in thousands)
Q3'08 / Q3'08 / 9/30'08YTD /
Q3'08 Q3'07 Q3'07 Q2'08 Q2'08 9/30'08YTD 9/30'07YTD 9/30'07YTD
---------------------------------------------------------------------------------------
1 Total Assets $4,137,232 $4,628,728 -10.6%$4,257,325 -2.8%$4,275,657 $4,670,019 -8.4%
2 Total Earning Assets 3,745,058 4,198,859 -10.8% 3,865,110 -3.1% 3,878,972 4,243,610 -8.6%
3 Total Loans 2,414,317 2,514,685 -4.0% 2,439,062 -1.0% 2,443,574 2,516,939 -2.9%
4 Commercial Loans 597,176 625,490 -4.5% 609,082 -2.0% 607,712 622,778 -2.4%
5 Commercial Real Estate Loans 830,001 871,225 -4.7% 843,793 -1.6% 841,391 885,172 -4.9%
6 Consumer Loans 987,140 1,017,970 -3.0% 986,187 0.1% 994,471 1,008,989 -1.4%
7 Total Investment Securities 1,330,741 1,684,174 -21.0% 1,426,048 -6.7% 1,435,398 1,726,671 -16.9%
8 Available For Sale (Market 359,220 590,749 -39.2% 433,190 -17.1% 436,592 602,009 -27.5%
Value)
9 Held To Maturity 971,521 1,093,425 -11.1% 992,858 -2.1% 998,806 1,124,662 -11.2%
10 HTM Unrealized Loss at (15,042) (4,974) n/m (3,052) n/m (15,042) (4,974) n/m
Period-End
11 Loans / Deposits 76.5% 74.9% 76.6% 76.8% 74.3%
Page 10
WESTAMERICA BANCORPORATION Public Information October 15, 2008
FINANCIAL HIGHLIGHTS
September 30, 2008
4. Deposits & Other Interest-Bearing Liabilities.
(average volume, dollars in thousands)
Q3'08 / Q3'08 / 9/30'08YTD /
Q3'08 Q3'07 Q3'07 Q2'08 Q2'08 9/30'08YTD 9/30'07YTD 9/30'07YTD
---------------------------------------------------------------------------------------
1 Total Deposits $3,154,340 $3,358,163 -6.1%$3,183,812 -0.9%$3,183,393 $3,387,591 -6.0%
2 Noninterest Demand 1,172,953 1,254,530 -6.5% 1,186,921 -1.2% 1,186,443 1,264,147 -6.1%
3 Interest-Bearing Transaction 539,286 566,556 -4.8% 547,574 -1.5% 544,407 576,970 -5.6%
4 Savings 764,535 810,213 -5.6% 763,575 0.1% 765,514 833,419 -8.1%
5 Time greater than $100K 484,396 519,488 -6.8% 492,932 -1.7% 492,724 500,389 -1.5%
6 Time less than $100K 193,170 207,376 -6.9% 192,810 0.2% 194,305 212,666 -8.6%
7 Total Short-Term Borrowings 470,109 764,992 -38.5% 556,794 -15.6% 582,564 770,378 -24.4%
8 Fed Funds Purchased 342,338 621,165 -44.9% 414,632 -17.4% 440,435 614,259 -28.3%
9 Other Short-Term Funds 127,771 143,827 -11.2% 142,162 -10.1% 142,129 156,119 -9.0%
10 Long-Term Debt 35,163 36,832 -4.5% 36,721 -4.2% 36,210 36,868 -1.8%
11 Shareholders' Equity 412,133 402,016 2.5% 412,263 -0.0% 406,244 408,497 -0.6%
12 Demand Deposits / Total Deposits 37.2% 37.4% 37.3% 37.3% 37.3%
13 Transaction & Savings Deposits / 78.5% 78.4% 78.5% 78.4% 79.0%
Total Deposits
5. Interest Yields Earned & Rates Paid.
(dollars in thousands)
Q3'08 Q3'07
------------------------------- Q2'08 ----------------------------------
Average Income/ Yield */ Yield*/ Average Income/ Yield*/
Volume Expense Rate Rate Volume Expense Rate
----------------------------------------------------------------------------
1 Interest & Fees Income Earned
2 Total Earning Assets (FTE) $3,745,058 $56,131 5.98% 6.03%$4,198,859 $64,708 6.14%
3 Total Loans (FTE) 2,414,317 37,853 6.24% 6.34% 2,514,685 42,310 6.68%
4 Commercial Loans (FTE) 597,176 9,964 6.64% 6.84% 625,490 12,719 8.07%
5 Commercial Real Estate Loans 830,001 14,516 6.96% 7.14% 871,225 15,602 7.10%
6 Consumer Loans 987,140 13,373 5.39% 5.36% 1,017,970 13,989 5.45%
7 Total Investment Securities 1,330,741 18,278 5.49% 5.51% 1,684,174 22,398 5.32%
(FTE)
8 Interest Expense Paid
9 Total Earning Assets 3,745,058 7,438 0.79% 0.87% 4,198,859 19,145 1.80%
10 Total Interest-Bearing 2,486,659 7,438 1.19% 1.30% 2,905,457 19,145 2.60%
Liabilities
11 Total Interest-Bearing Deposits 1,981,387 4,960 1.00% 1.07% 2,103,633 9,966 1.88%
12 Interest-Bearing Transaction 539,286 346 0.26% 0.25% 566,556 526 0.37%
13 Savings 764,535 1,048 0.55% 0.58% 810,213 1,649 0.81%
14 Time less than $100K 193,170 1,201 2.47% 2.82% 207,376 1,755 3.36%
15 Time greater than $100K 484,396 2,365 1.94% 2.06% 519,488 6,036 4.61%
16 Total Short-Term Borrowings 470,109 1,954 1.63% 1.77% 764,992 8,601 4.40%
17 Fed Funds Purchased 342,338 1,708 1.95% 2.12% 621,165 8,171 5.15%
18 Other Short-Term Funds 127,771 246 0.77% 0.74% 143,827 430 1.18%
19 Long-Term Debt 35,163 524 5.96% 6.30% 36,832 578 6.28%
20 Net Interest Income and Margin (FTE) $48,693 5.19% 5.16% $45,563 4.34%
* Annualized
6. Noninterest Income.
(dollars in thousands except per share amounts)
Q3'08 / Q3'08 / 9/30'08YTD /
Q3'08 Q3'07 Q3'07 Q2'08 Q2'08 9/30'08YTD 9/30'07YTD 9/30'07YTD
---------------------------------------------------------------------------------------
1 Service Charges on Deposit $7,555 $7,569 -0.2% $7,529 0.3% $22,379 $22,813 -1.9%
Accounts
2 Merchant Credit Card Income 2,611 2,808 -7.0% 2,712 -3.7% 7,903 8,024 -1.5%
3 ATM Fees & Interchange 756 723 4.6% 763 -0.9% 2,238 2,114 5.9%
4 Debit Card Fees 970 969 0.0% 978 -0.9% 2,852 2,825 0.9%
5 Financial Services Commissions 186 383 -51.4% 274 -31.9% 689 1,057 -34.8%
6 Mortgage Banking Income 39 29 31.5% 27 43.4% 106 92 15.3%
7 Trust Fees 293 337 -13.2% 377 -22.4% 973 978 -0.6%
8 Other Income 1,297 1,826 -28.9% 1,675 -22.5% 4,583 5,896 -22.3%
----------------------- ------------ -----------------------
9 Sub-total 13,707 14,644 -6.4% 14,335 -4.4% 41,723 43,799 -4.7%
10 Life Insurance Gains 0 0 n/m 0 n/m 0 822 n/m
11 Gain on Sale of Visa Common Stock 0 0 n/m 0 n/m 5,698 0 n/m
12 Investment Securities Losses (41,206) 0 n/m (18,178) n/m (59,384) 0 n/m
and Impairment ----------------------- ------------ -----------------------
13 Total Noninterest Income ($27,499) $14,644 n/m ($3,843 ) n/m ($11,963) $44,621 n/m
======================= ============ =======================
14 Operating Ratios:
15 Total Revenue (FTE) $21,194 $60,207 -64.8% $45,888 -53.8% $134,444 $183,157 -26.6%
16 Noninterest Income / Revenue n/m 24.3% n/m n/m 24.4%
(FTE)
17 Service Charges / Deposits 0.95% 0.89% 0.95% 0.94% 0.90%
(annualized)
18 Total Revenue Per Share $2.92 $8.09 -63.9% $6.38 -54.3% $6.22 $8.18 -24.0%
(annualized)
Page 11
WESTAMERICA BANCORPORATION Public Information October 15, 2008
FINANCIAL HIGHLIGHTS
September 30, 2008
7. Noninterest Expense.
(dollars in thousands)
Q3'08 / Q3'08 / 9/30'08YTD /
Q3'08 Q3'07 Q3'07 Q2'08 Q2'08 9/30'08YTD 9/30'07YTD 9/30'07YTD
---------------------------------------------------------------------------------------
1 Salaries & Benefits $12,621 $12,587 0.3% $13,065 -3.4% $38,670 $37,776 2.4%
2 Occupancy 3,465 3,327 4.1% 3,443 0.6% 10,297 9,960 3.4%
3 Equipment 903 1,083 -16.6% 1,001 -9.8% 2,825 3,367 -16.1%
4 Data Processing 2,098 1,800 16.5% 2,105 -0.3% 6,323 4,866 29.9%
5 Courier 835 854 -2.3% 824 1.2% 2,488 2,559 -2.8%
6 Postage 369 404 -8.8% 390 -5.4% 1,142 1,211 -5.7%
7 Telephone 342 342 0.1% 346 -1.1% 1,023 1,055 -3.0%
8 Professional Fees 485 451 7.5% 683 -29.0% 1,704 1,355 25.7%
9 Stationery & Supplies 272 323 -15.8% 285 -4.7% 836 906 -7.8%
10 Loan Expense 246 217 13.8% 233 5.9% 653 555 17.7%
11 Operational Losses 113 228 -50.2% 196 -42.1% 494 559 -11.6%
12 Amortization of Identifiable 788 893 -11.8% 788 0.0% 2,433 2,760 -11.8%
Intangibles
13 Other Operating 2,666 2,344 13.7% 2,978 -10.5% 8,046 7,293 10.3%
----------------------- ------------ -----------------------
14 Sub-total 25,203 24,853 1.4% 26,337 -4.3% 76,934 74,222 3.7%
15 VISA Litigation 0 0 n/m 0 n/m (2,338) 0 n/m
----------------------- ------------ -----------------------
16 Total Noninterest Expense $25,203 $24,853 1.4% $26,337 -4.3% $74,596 $74,222 0.5%
======================= ============ =======================
17 Full Time Equivalent Staff 899 876 2.6% 892 0.8% 892 893 -0.1%
18 Average Assets / Full Time $4,602 $5,284 -12.9% $4,773 -3.6% $4,793 $5,230 -8.3%
Equivalent Staff
19 Operating Ratios:
20 FTE Revenue / Full Time Equiv. $94 $273 -65.6% $207 -54.7% $201 $274 -26.6%
Staff (annualized)
21 Noninterest Expense / Earning 2.68% 2.35% 2.74% 2.57% 2.34%
Assets (annualized)
22 Noninterest Expense / 118.9% 41.3% 57.4% 55.5% 40.5%
FTE Revenues
8. Provision for Credit Losses.
(dollars in thousands)
Q3'08 / Q3'08 / 9/30'08YTD /
Q3'08 Q3'07 Q3'07 Q2'08 Q2'08 9/30'08YTD 9/30'07YTD 9/30'07YTD
---------------------------------------------------------------------------------------
1 Provision for Credit Losses $600 $75 n/m $600 0.0% $1,800 $225 n/m
2 Gross Loan Losses 1,786 1,031 73.3% 2,208 -19.1% 5,532 4,519 22.4%
3 Net Loan Losses 1,467 610 140.5% 1,870 -21.5% 4,209 2,617 60.8%
4 Recoveries / Gross Loan Losses 18% 41% 15% 24% 42%
5 Average Total Loans $2,414,317 $2,514,685 -4.0%$2,439,062 -1.0%$2,443,574 $2,516,939 -2.9%
6 Net Loan Losses / Loans 0.24% 0.10% 0.31% 0.23% 0.14%
(annualized)
7 Provision for Credit Losses / 0.10% 0.01% 0.10% 0.10% 0.01%
Loans (annualized)
8 Provision for Credit Losses / 40.9% 12.3% 32.1% 42.8% 8.6%
Net Loan Losses
9. Credit Quality.
(dollars in thousands)
9/30/08 / 9/30/08 /
9/30/08 9/30/07 9/30/07 6/30/08 6/30/08 3/31/08 12/31/07 6/30/07
---------------------------------------------------------------------------------------
1 Nonperforming Nonaccrual Loans $12,132 $3,132 287.4% $11,713 3.6% $3,728 $3,164 $3,140
2 Performing Nonaccrual Loans 73 1,695 -95.7% 28 160.5% 1,652 1,688 1,898
----------------------- ------------ ----------------------------------
3 Total Nonaccrual Loans 12,205 4,827 152.8% 11,741 3.9% 5,380 4,852 5,038
4 Accruing Loans 90+ Days Past Due 363 251 44.6% 254 42.9% 268 297 179
----------------------- ------------ ----------------------------------
5 Total Nonperforming Loans 12,568 5,078 147.5% 11,995 4.8% 5,648 5,149 5,217
6 Repossessed Collateral 814 613 32.8% 920 -11.5% 954 613 613
7 Total Nonperforming Loans & ----------------------- ------------ ----------------------------------
8 Repossessed Collateral $13,382 $5,691 135.1% $12,915 3.6% $6,602 $5,762 $5,830
======================= ============ ==================================
9 Classified Loans $38,070 $21,403 77.9% $33,546 13.5% $33,303 $24,419 $22,498
======================= ============ ==================================
10 Allowance for Loan Losses $50,097 $52,938 -5.4% $50,964 -1.7% $52,234 $52,506 $53,473
11 Total Loans Outstanding 2,408,704 2,511,374 -4.1% 2,431,011 -0.9% 2,448,320 2,502,976 2,521,738
12 Total Assets 4,089,482 4,657,016 -12.2% 4,188,868 -2.4% 4,342,302 4,558,959 4,647,069
13 Allowance for Loan Losses / 2.08% 2.11% 2.10% 2.13% 2.10% 2.12%
Total Loans
14 Nonperforming Loans / Total Loans 0.52% 0.20% 0.49% 0.23% 0.21% 0.21%
15 Nonperforming Loans & Repossessed
16 Collateral/Total Assets 0.33% 0.12% 0.31% 0.15% 0.13% 0.13%
17 Allowance/Nonperforming Loans 399% 1042% 425% 925% 1020% 1025%
18 Allowance for Loan Losses / 132% 247% 152% 157% 215% 238%
Classified Loans
19 Classified Loans /
20 (Equity + Allowance for 8.5% 4.7% 7.3% 7.4% 5.5% 4.9%
Loan Losses)
Page 12
WESTAMERICA BANCORPORATION Public Information October 15, 2008
FINANCIAL HIGHLIGHTS
September 30, 2008
10.Capital.
(dollars in thousands, except per-share amounts)
9/30/08 / 9/30/08 /
9/30/08 9/30/07 9/30/07 6/30/08 6/30/08 3/31/08 12/31/07 6/30/07
---------------------------------------------------------------------------------------
1 Shareholders' Equity $399,128 $403,651 -1.1% $410,445 -2.8% $399,109 $394,603 $407,982
2 Tier I Regulatory Capital 278,117 283,015 -1.7% 290,864 -4.4% 283,768 278,970 286,818
3 Total Regulatory Capital 314,023 322,598 -2.7% 327,631 -4.2% 321,819 318,089 326,582
4 Total Assets 4,089,482 4,657,016 -12.2% 4,188,868 -2.4% 4,342,302 4,558,959 4,647,069
5 Risk-Adjusted Assets 2,790,304 3,017,668 -7.5% 2,845,553 -1.9% 2,914,007 2,986,737 3,014,947
6 Shareholders' Equity / 9.76% 8.67% 9.80% 9.19% 8.66% 8.78%
Total Assets
7 Shareholders' Equity / Total Loans 16.57% 16.07% 16.88% 16.30% 15.77% 16.18%
8 Tier I Capital /Total Assets 6.80% 6.08% 6.94% 6.53% 6.12% 6.17%
9 Tier I Capital / 9.97% 9.38% 10.22% 9.74% 9.33% 9.51%
tal / Risk-Adjusted Assets
10 Total Capital / Risk-Adjusted 11.25% 10.69% 11.51% 11.04% 10.64% 10.83%
Assets
11 Tangible Equity Ratio 6.62% 5.82% 6.71% 6.18% 5.76% 5.91%
12 Shares Outstanding 28,895 29,378 -1.6% 28,889 0.0% 28,772 29,018 29,732
13 Book Value Per Share $13.81 $13.74 0.5% $14.21 -2.8% $13.87 $13.60 $13.72
14 Market Value Per Share $57.53 $49.81 15.5% $52.59 9.4% $52.60 $44.55 $44.24
15 Share Repurchase Programs
(shares in thousands)
Q3'08 / Q3'08 / 9/30'08YTD /
Q3'08 Q3'07 Q3'07 Q2'08 Q2'08 9/30'08YTD 9/30'07YTD 9/30'07YTD
---------------------------------------------------------------------------------------
16 Total Shares Repurchased / 108 492 -78.1% 172 -37.3% 703 1,396 -49.6%
Canceled
17 Average Repurchase Price $50.10 $43.90 14.1% $54.89 -8.7% $49.81 $46.63 6.8%
18 Net Shares (Issued) Repurchased (6) 354 n/m (117) n/m 123 1,169 -89.5%
11.Period-End Balance Sheets.
(unaudited, dollars in thousands)
9/30/08 / 9/30/08 /
9/30/08 9/30/07 9/30/07 6/30/08 6/30/08 3/31/08 12/31/07 6/30/07
1 Assets:
2 Cash and Money Market Assets $142,678 $219,960 -35.1% $134,432 6.1% $139,957 $210,097 $164,390
3 Investment Securities Available 304,871 570,086 -46.5% 391,028 -22.0% 477,686 532,821 582,959
For Sale
4 Investment Securities Held 962,621 1,081,009 -11.0% 978,298 -1.6% 1,016,613 1,045,288 1,104,132
to Maturity
5 Loans, gross 2,408,704 2,511,374 -4.1% 2,431,011 -0.9% 2,448,320 2,502,976 2,521,738
6 Allowance For Loan Losses (50,097) (52,938) -5.4% (50,964) -1.7% (52,234) (52,506) (53,473)
----------------------- ------------ ----------------------------------
7 Loans, net 2,358,607 2,458,436 -4.1% 2,380,047 -0.9% 2,396,086 2,450,470 2,468,265
----------------------- ------------ ----------------------------------
8 Premises and Equipment 26,789 28,666 -6.5% 27,460 -2.4% 28,031 28,380 29,169
9 Identifiable Intangible Assets 15,996 19,322 -17.2% 16,784 -4.7% 17,571 18,429 20,215
10 Goodwill 121,702 121,719 -0.0% 121,719 -0.0% 121,719 121,719 121,719
11 Interest Receivable and 156,218 157,818 -1.0% 139,100 12.3% 144,639 151,755 156,220
Interest Receivable and ----------------------- ------------ ----------------------------------
12 Total Assets $4,089,482 $4,657,016 -12.2%$4,188,868 -2.4%$4,342,302 $4,558,959 $4,647,069
======================= ============ ==================================
13 Liabilities and Shareholders' Equity:
14 Deposits:
15 Noninterest Bearing $1,173,852 $1,251,572 -6.2%$1,195,004 -1.8%$1,202,165 $1,245,500 $1,266,941
16 Interest-Bearing Transaction 518,944 549,263 -5.5% 527,109 -1.5% 542,468 544,411 554,036
17 Savings 751,512 806,797 -6.9% 754,677 -0.4% 749,471 760,006 809,791
18 Time 685,480 732,582 -6.4% 686,702 -0.2% 700,534 714,873 704,264
----------------------- ------------ ----------------------------------
19 Total Deposits 3,129,788 3,340,214 -6.3% 3,163,492 -1.1% 3,194,638 3,264,790 3,335,032
----------------------- ------------ ----------------------------------
20 Short-Term Borrowed Funds 487,973 815,101 -40.1% 514,131 -5.1% 635,264 798,599 809,261
21 Debt Financing and Notes Payable 26,665 36,809 -27.6% 36,699 -27.3% 36,736 36,773 36,846
22 Liability For Interest, Taxes 45,928 61,241 -25.0% 64,101 -28.4% 76,555 64,194 57,948
and Other
----------------------- ------------ ----------------------------------
23 Total Liabilities 3,690,354 4,253,365 -13.2% 3,778,423 -2.3% 3,943,193 4,164,356 4,239,087
----------------------- ------------ ----------------------------------
24 Shareholders' Equity:
25 Paid-In Capital $354,537 $337,627 5.0% $351,157 1.0% $339,468 $337,201 $338,290
26 Accumulated Other Comprehensive
27 Income (Loss) 551 (412) n/m 1,074 -48.7% (3,954) (4,520) (777)
28 Retained Earnings 44,040 66,436 -33.7% 58,214 -24.3% 63,595 61,922 70,469
----------------------- ------------ ----------------------------------
29 Total Shareholders' Equity 399,128 403,651 -1.1% 410,445 -2.8% 399,109 394,603 407,982
----------------------- ------------ ----------------------------------
30 Total Liabilities and $4,089,482 $4,657,016 -12.2%$4,188,868 -2.4%$4,342,302 $4,558,959 $4,647,069
Shareholders' Equity ======================= ============ ==================================
Page 13
WESTAMERICA BANCORPORATION Public Information October 15, 2008
FINANCIAL HIGHLIGHTS
September 30, 2008
12.Income Statements.
(unaudited, dollars in thousands, except per-share amounts)
Q3'08 / Q3'08 / 9/30'08YTD /
Q3'08 Q3'07 Q3'07 Q2'08 Q2'08 9/30'08YTD 9/30'07YTD 9/30'07YTD
---------------------------------------------------------------------------------------
1 Interest and Fee Income:
2 Loans $36,710 $41,134 -10.8% $37,274 -1.5% $112,716 $122,027 -7.6%
3 Money Market Assets and 1 2 n/m 1 n/m 3 5 n/m
Funds Sold
4 Investment Securities 4,041 6,713 -39.8% 4,942 -18.2% 14,784 20,676 -28.5%
Available For Sale
5 Investment Securities 10,223 11,448 -10.7% 10,438 -2.1% 31,521 35,303 -10.7%
Held to Maturity ----------------------- ------------ -----------------------
6 Total Interest Income 50,975 59,297 -14.0% 52,655 -3.2% 159,024 178,011 -10.7%
----------------------- ------------ -----------------------
7 Interest Expense:
8 Transaction Deposits 346 526 -34.2% 347 -0.3% 1,145 1,577 -27.4%
9 Savings Deposits 1,048 1,649 -36.5% 1,105 -5.2% 3,482 4,509 -22.8%
10 Time Deposits 3,566 7,791 -54.2% 3,873 -7.9% 12,984 22,637 -42.6%
11 Short-Term Borrowed Funds 1,954 8,601 -77.3% 2,483 -21.3% 9,360 25,614 -63.5%
12 Debt Financing and Notes Payable 524 578 -9.4% 578 -9.4% 1,680 1,735 -3.1%
----------------------- ------------ -----------------------
13 Total Interest Expense 7,438 19,145 -61.2% 8,386 -11.3% 28,651 56,072 -48.9%
----------------------- ------------ -----------------------
14 Net Interest Income 43,537 40,152 8.4% 44,269 -1.7% 130,373 121,939 6.9%
----------------------- ------------ -----------------------
15 Provision for Credit Losses 600 75 n/m 600 0.0% 1,800 225 n/m
----------------------- ------------ -----------------------
16 Noninterest Income:
17 Service Charges on Deposit 7,555 7,569 -0.2% 7,529 0.3% 22,379 22,813 -1.9%
Accounts
18 Merchant Credit Card 2,611 2,808 -7.0% 2,712 -3.7% 7,903 8,024 -1.5%
19 ATM Fees & Interchange 756 723 4.6% 763 -0.9% 2,238 2,114 5.9%
20 Debit Card Fees 970 969 0.0% 978 -0.9% 2,852 2,825 0.9%
21 Financial Services Commissions 186 383 -51.4% 274 -31.9% 689 1,057 -34.8%
22 Mortgage Banking 39 29 31.5% 27 43.4% 106 92 15.3%
23 Trust Fees 293 337 -13.2% 377 -22.4% 973 978 -0.6%
24 Life Insurance Gains 0 0 n/m 0 n/m 0 822 n/m
25 Gain on Sale of Visa 0 0 n/m 0 n/m 5,698 0 n/m
Common Stock
26 Investment Securities Losses (41,206) 0 n/m (18,178) n/m (59,384) 0 n/m
and Impairment
27 Other 1,297 1,826 -28.9% 1,675 -22.5% 4,583 5,896 -22.3%
----------------------- ------------ -----------------------
28 Total Noninterest Income (27,499) 14,644 n/m (3,843) n/m (11,963) 44,621 n/m
----------------------- ------------ -----------------------
29 Noninterest Expense:
30 Salaries and Related Benefits 12,621 12,587 0.3% 13,065 -3.4% 38,670 37,776 2.4%
31 Occupancy 3,465 3,327 4.1% 3,443 0.6% 10,297 9,960 3.4%
32 Equipment 903 1,083 -16.6% 1,001 -9.8% 2,825 3,367 -16.1%
33 Data Processing 2,098 1,800 16.5% 2,105 -0.3% 6,323 4,866 29.9%
34 Professional Fees 485 451 7.5% 683 -29.0% 1,704 1,355 25.7%
35 VISA Litigation 0 0 n/m 0 n/m (2,338) 0 n/m
36 Other 5,631 5,605 0.5% 6,040 -6.8% 17,115 16,898 1.3%
----------------------- ------------ -----------------------
37 Total Noninterest Expense 25,203 24,853 1.4% 26,337 -4.3% 74,596 74,222 0.5%
----------------------- ------------ -----------------------
38 Income Before Income Taxes (9,765) 29,868 n/m 13,489 n/m 42,014 92,113 -54.4%
39 Income Tax (Benefit) Provision (9,809) 7,846 n/m 1,287 n/m 2,989 24,169 -87.6%
----------------------- ------------ -----------------------
40 Net Income $44 $22,022 n/m $12,202 n/m $39,025 $67,944 -42.6%
======================= ============ =======================
41 Average Shares Outstanding 28,908 29,532 -2.1% 28,916 -0.0% 28,895 29,935 -3.5%
42 Diluted Average Shares Outstanding 29,273 29,915 -2.1% 29,392 -0.4% 29,292 30,365 -3.5%
43 Per Share Data:
44 Basic Earnings $0.00 $0.75 n/m $0.42 n/m $1.35 $2.27 -40.5%
45 Diluted Earnings 0.00 0.74 n/m 0.42 n/m 1.33 2.24 -40.5%
46 Dividends Paid 0.35 0.34 2.9% 0.35 0.0% 1.04 1.02 2.0%