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):
July 15, 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-4c))
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Exhibits
---------
99.1 Press release dated July 15, 2008
Item 2.02: Results of Operations and Financial Condition
----------------------------------------------------------
On July 15, 2008 Westamerica Bancorporation announced their
earnings for the second 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
July 15, 2008
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INDEX TO EXHIBITS
-----------------
Sequentially
Exhibit No. Description Number Page
----------- ------------------------- -------------
(99.1) Press release dated 5-16
July 15, 2008
Page 5
FOR IMMEDIATE RELEASE
July 15, 2008
WESTAMERICA BANCORPORATION REPORTS
SECOND QUARTER 2008
San Rafael, CA: Westamerica Bancorporation (NASDAQ: WABC), parent company of
Westamerica Bank, today reported quarterly net income for the second quarter of
2008 of $12.2 million, or $0.42 diluted earnings per share (EPS), compared to
net income of $22.4 million, or $0.74 EPS for the second quarter of 2007.
Second quarter 2008 results include a $18.2 million "other than temporary
impairment charge" (OTTI) related to FHLMC and FNMA preferred stock which
reduced net income $10.5 million and reduced EPS $0.35.
Net income for the six months ended June 30, 2008 was $39.0 million or $1.33
diluted earnings per share including the OTTI charge, and benefits from Visa's
initial public offering which increased net income by $4.7 million and EPS by
$0.16. Net income for the six months ended June 30, 2007 was $45.9 million or
$1.50 diluted earnings per share including a $822 thousand gain on company-
owned life insurance which contributed $0.02 to diluted earnings per share.
"Our net interest margin expanded to 5.16 percent in the second quarter 2008,
compared to 4.79 percent for the first quarter 2008. Lower short-term interest
rates allowed us to manage a 0.40 percent decline in our funding costs to
generate this improved margin. Our credit quality remains sound. Non-performing
loans totaled $12.0 million at June 30, 2008, or 0.49 percent of total loans,
while our reserve for loan losses totaled 2.10 percent of total loans.
Classified loans remained relatively stable at $33.5 million at June 30, 2008
compared to $33.3 million at March 31, 2008," said Chairman, President and CEO
David Payne. "Our capital grew $11 million in the second quarter 2008 in spite
of the OTTI charge. Our return on shareholders' equity was 19.4 percent for
the first six months of 2008," Payne added.
Page 6
Net interest income on a fully taxable equivalent basis (FTE) was $49.7 million
for the second quarter of 2008, compared to $48.0 million (FTE) for the prior
quarter and $46.1 million (FTE) reported for the second quarter of 2007. The
second quarter 2008 net interest margin was 5.16 percent (FTE), compared to 4.79
percent (FTE) for the prior quarter and 4.36 percent (FTE) for the second
quarter of 2007. Net interest income for the six months ended June 30, 2008 was
$97.7 million (FTE) generating a margin of 4.97 percent (FTE), compared to net
interest income of $93.0 million (FTE) and a margin of 4.38 percent (FTE) for
the six months ended June 30, 2007. The improved net interest income is
attributable to a higher net interest margin offset partially by lower
average earning assets. The net interest margin has increased as lower short-
term interest rates caused funding costs to decline at a faster pace than
earning asset yields.
The provision for loan losses was $1.2 million for the six months ended June 30,
2008 compared to $150 thousand for the six months ended June 30, 2007. Net
charge-offs for the six months ended June 30, 2008 totaled $2.7 million, or 0.22
percent (annualized) of average loans, compared to $2.0 million, or 0.16 percent
(annualized) of average loans for the six months ended June 30, 2007.
Non-performing loans at June 30, 2008 totaled $12.0 million, increased from $5.6
million at March 31, 2008. Classified loans, which include loans graded
"substandard," "doubtful" and "loss" using regulatory guidelines, totaled $33.5
million at June 30, 2008 compared to $33.3 million at March 31, 2008. The
increase in net charge-offs and non-performing loans is generally attributable
to one construction loan relationship with loan collateral comprised of
developed land and residential real estate properties located north of
Sacramento, California. The borrower has marketed and received purchase offers
on thirteen of the project's seventeen finished and nearly completed properties,
and is negotiating a sale of a portion of the remaining developed land with an
interested party. Management is aggressively pursuing collection of this loan
relationship.
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Noninterest income for the six months ended June 30, 2008 was $15.5 million,
compared to $30.0 million for the six months ended June 30, 2007. Non-interest
income for the 2008 period included the $18.2 million OTTI charge and $5.7
million in securities gains from the redemption of Visa Class B common stock as
part of Visa's initial public offering. Non-interest income for the first six
months of 2007 included a $822 thousand gain on company-owned life insurance.
During 2008, the Company began issuing its own cashiers checks rather than use a
vendor which paid the Company fees based on the availability of funds while the
cashiers checks remained outstanding ("float"). By issuing its own cashiers'
checks, the Company uses the related float as a source of funding and reduces
its interest expense. Such vendor fees were $500 thousand lower in the six
months ended June 30, 2008 compared to the six months ended June 30, 2007.
Noninterest expense for the second quarter of 2008 totaled $26.3 million,
compared to $23.1 million for the prior quarter and $24.7 million for the second
quarter of 2007. The increase in expenses from the prior quarter was primarily
due to the first quarter 2008 reversal of a $2.3 million accrual for Visa
related litigation, which was reversed with the funding of a litigation
escrow as a part of the Visa IPO. In addition, professional fees were $147
thousand higher in the second quarter 2008 compared to the first quarter 2008.
The increase in expenses from the second quarter 2007 to the second quarter 2008
was attributable to higher data processing, personnel, professional, and
occupancy costs. Data processing costs were higher due to conversion of the
Company's item processing function to an outside vendor in the third quarter
2007.
Shareholders' equity at June 30, 2008 was $410 million, increased from $399
million at March 31, 2008. During the second quarter 2008, the number of shares
issued due to the exercise of stock options exceeded shares repurchased by the
Company by 117 thousand shares. At June 30, 2008, 777 thousand shares of
Company common stock may be purchased and retired under repurchase programs
approved by the Company's Board of Directors. At June 30, 2008, Westamerica
Bancorporation's total regulatory capital ratio was 11.5 percent and Westamerica
Bank's total regulatory capital ratio was 11.0 percent; both measurements exceed
the "well-capitalized" level of ten percent under regulatory requirements.
Page 8
Westamerica Bancorporation, through its wholly owned subsidiary Westamerica
Bank, operates 86 branches and two trust offices throughout 21 Northern and
Central California counties. At June 30, 2008, the Company's total assets and
total loans outstanding were $4.2 billion and $2.4 billion, respectively.
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
March 31, 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.
#####
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WESTAMERICA BANCORPORATION Public Information July 15, 2008
FINANCIAL HIGHLIGHTS
June 30, 2008
1. Net Income Summary.
(dollars in thousands except per-share amounts)
Q2'08 / Q2'08 / 6/30'08YTD /
Q2'08 Q2'07 Q2'07 Q1'08 Q1'08 6/30'08YTD 6/30'07YTD 6/30'07YTD
--------------------------------------------------------------------------------------
1 Net Interest Income (Fully $49,731 $46,059 8.0% $47,982 3.6% $97,713 $92,973 5.1%
Taxable Equivalent)
2 Provision for Credit Losses 600 75 700.0% 600 0.0% 1,200 150 700.0%
3 Noninterest Income:
4 Life Insurance Gains 0 0 n/m 0 n/m 0 822 n/m
5 Gain on Sale of Visa Common Stock 0 0 n/m 5,698 n/m 5,698 0 n/m
6 Investment Securities (Impairment) (18,178) 0 n/m 0 n/m (18,178) 0 n/m
7 Other 14,335 14,700 -2.5% 13,680 4.8% 28,015 29,156 -3.9%
------------------------ ------------- ------------------------
8 Total Noninterest Income (3,843) 14,700 -126.1% 19,378 -119.8% 15,535 29,978 -48.2%
9 Noninterest Expense:
10 VISA Litigation 0 0 n/m (2,338) n/m (2,338) 0 n/m
11 Other 26,337 24,706 6.6% 25,394 3.7% 51,731 49,370 4.8%
------------------------ ------------- ------------------------
12 Total Noninterest Expense 26,337 24,706 6.6% 23,056 14.2% 49,393 49,370 0.0%
------------------------ ------------- ------------------------
13 Income Before Taxes (FTE) 18,951 35,978 43,704 62,655 73,431
14 Income Tax Provision (FTE) 6,749 13,627 -50.5% 16,926 -60.1% 23,675 27,510 -13.9%
------------------------ ------------- ------------------------
15 Net Income $12,202 $22,351 -45.4% $26,778 -54.4% $38,980 $45,921 -15.1%
======================== ============= ========================
16 Average Shares Outstanding 28,916 29,938 -3.4% 28,861 0.2% 28,888 30,139 -4.2%
17 Diluted Average Shares Outstanding 29,392 30,365 -3.2% 29,210 0.6% 29,301 30,593 -4.2%
18 Operating Ratios:
19 Basic Earnings Per Share $0.42 $0.75 -43.5% $0.93 -54.8% $1.35 $1.52 -11.4%
20 Diluted Earnings Per Share 0.42 0.74 -43.6% 0.92 -54.3% 1.33 1.50 -11.4%
21 Return On Assets (annualized) 1.15% 1.92% 2.43% 1.80% 1.97%
22 Return On Equity (annualized) 11.9% 21.9% 27.3% 19.4% 22.5%
23 Net Interest Margin (FTE) 5.16% 4.36% 4.79% 4.97% 4.38%
(annualized)
24 Efficiency Ratio (FTE) 57.4% 40.7% 34.2% 43.6% 40.2%
25 Dividends Paid Per Share $0.35 $0.34 2.9% $0.34 2.9% $0.69 $0.68 1.5%
26 Dividend Payout Ratio 83% 46% 37% 52% 45%
2. Net Interest Income.
(dollars in thousands)
Q2'08 / Q2'08 / 6/30'08YTD /
Q2'08 Q2'07 Q2'07 Q1'08 Q1'08 6/30'08YTD 6/30'07YTD 6/30'07YTD
--------------------------------------------------------------------------------------
1 Interest and Fee Income (FTE) $58,117 $64,875 -10.4% $60,810 -4.4% $118,927 $129,900 -8.4%
2 Interest Expense 8,386 18,816 -55.4% 12,828 -34.6% 21,214 36,927 -42.6%
------------------------ ------------- ------------------------
3 Net Interest Income (FTE) $49,731 $46,059 8.0% $47,982 3.6% $97,713 $92,973 5.1%
======================== ============= ========================
4 Average Earning Assets $3,865,110 $4,245,342 -9.0%$4,028,221 -4.0%$3,946,665 $4,266,357 -7.5%
5 Average Interest-Bearing 2,590,406 2,926,090 -11.5% 2,771,526 -6.5% 2,680,966 2,943,515 -8.9%
Liabilities
6 Yield on Earning Assets (FTE) 6.03% 6.12% 6.06% 6.05% 6.12%
(annualized)
7 Cost of Funds (annualized) 0.87% 1.76% 1.27% 1.08% 1.74%
8 Net Interest Margin (FTE) 5.16% 4.36% 4.79% 4.97% 4.38%
(annualized)
9 Interest Expense/Interest-Bearing
Liabilities (annued) 1.30% 2.56% 1.85% 1.58% 2.51%
10 Net Interest Spread (FTE) 4.73% 3.56% 4.21% 4.47% 3.61%
(annualized)
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WESTAMERICA BANCORPORATION Public Information July 15, 2008
3. Loans & Other Earning Assets.
(average volume, dollars in thousands)
Q2'08 / Q2'08 / 6/30'08YTD /
Q2'08 Q2'07 Q2'07 Q1'08 Q1'08 6/30'08YTD 6/30'07YTD 6/30'07YTD
--------------------------------------------------------------------------------------
1 Total Assets $4,257,325 $4,668,627 -8.8%$4,433,934 -4.0%$4,345,630 $4,691,007 -7.4%
2 Total Earning Assets 3,865,110 4,245,342 -9.0% 4,028,221 -4.0% 3,946,665 4,266,357 -7.5%
3 Total Loans 2,439,062 2,516,114 -3.1% 2,477,666 -1.6% 2,458,364 2,518,085 -2.4%
4 Commercial Loans 609,082 626,270 -2.7% 616,994 -1.3% 613,037 621,400 -1.3%
5 Commercial Real Estate Loans 843,793 883,942 -4.5% 850,504 -0.8% 847,149 892,261 -5.1%
6 Consumer Loans 986,187 1,005,902 -2.0% 1,010,168 -2.4% 998,178 1,004,424 -0.6%
7 Total Investment Securities 1,426,048 1,729,228 -17.5% 1,550,555 -8.0% 1,488,301 1,748,272 -14.9%
8 Available For Sale 433,190 602,667 -28.1% 518,217 -16.4% 475,704 607,732 -21.7%
(Market Value)
9 Held To Maturity 992,858 1,126,561 -11.9% 1,032,338 -3.8% 1,012,597 1,140,540 -11.2%
10 HTM Unrealized (Loss) (3,052) (18,668) n/m 13,324 n/m (3,052) (18,668) n/m
Gain at Period-End
11 Loans / Deposits 76.6% 74.5% 77.1% 76.9% 74.0%
4. Deposits & Other Interest-Bearing Liabilities.
(average volume, dollars in thousands)
Q2'08 / Q2'08 / 6/30'08YTD /
Q2'08 Q2'07 Q2'07 Q1'08 Q1'08 6/30'08YTD 6/30'07YTD 6/30'07YTD
--------------------------------------------------------------------------------------
1 Total Deposits $3,183,812 $3,377,413 -5.7%$3,212,347 -0.9%$3,198,079 $3,402,548 -6.0%
2 Noninterest Demand 1,186,921 1,267,032 -6.3% 1,199,604 -1.1% 1,193,262 1,269,036 -6.0%
3 Interest-Bearing Transaction 547,574 577,554 -5.2% 546,417 0.2% 546,995 582,263 -6.1%
4 Savings 763,575 824,300 -7.4% 768,443 -0.6% 766,009 845,214 -9.4%
5 Time greater than $100K 492,932 496,338 -0.7% 500,936 -1.6% 496,934 490,680 1.3%
6 Time less than $100K 192,810 212,189 -9.1% 196,947 -2.1% 194,879 215,355 -9.5%
7 Total Short-Term Borrowings 556,794 778,841 -28.5% 722,025 -22.9% 639,410 773,116 -17.3%
8 Fed Funds Purchased 414,632 625,060 -33.7% 565,415 -26.7% 490,024 610,749 -19.8%
9 Other Short-Term Funds 142,162 153,781 -7.6% 156,610 -9.2% 149,386 162,367 -8.0%
10 Long-Term Debt 36,721 36,868 -0.4% 36,758 -0.1% 36,739 36,887 -0.4%
11 Shareholders' Equity 412,263 408,564 0.9% 394,273 4.6% 403,268 411,791 -2.1%
12 Demand Deposits / Total Deposits 37.3% 37.5% 37.3% 37.3% 37.3%
13 Transaction & Savings Deposits / 78.5% 79.0% 78.3% 78.4% 79.2%
Total Deposits
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WESTAMERICA BANCORPORATION Public Information July 15, 2008
5. Interest Yields Earned & Rates Paid.
(dollars in thousands)
Q2'08 Q2'07
------------------------------- Q1'08 ---------------------------------
Average Income/ Yield */ Yield*/ Average Income/ Yield*/
Volume Expense Rate Rate Volume Expense Rate
---------------------------------------------------------------------------
1 Interest & Fees Income Earned
2 Total Earning Assets (FTE) $3,865,110 $58,117 6.03% 6.06% $4,245,342 $64,875 6.12%
3 Total Loans (FTE) 2,439,062 38,469 6.34% 6.48% 2,516,114 41,938 6.69%
4 Commercial Loans (FTE) 609,082 10,364 6.84% 7.36% 626,270 12,496 8.00%
5 Commercial Real Estate Loans 843,793 14,972 7.14% 7.07% 883,942 15,804 7.17%
6 Consumer Loans 986,187 13,133 5.36% 5.44% 1,005,902 13,638 5.44%
7 Total Investment Securities 1,426,048 19,648 5.51% 5.40% 1,729,228 22,937 5.31%
(FTE)
8 Interest Expense Paid
9 Total Earning Assets 3,865,110 8,386 0.87% 1.27% 4,245,342 18,816 1.76%
10 Total Interest-Bearing 2,590,406 8,386 1.30% 1.85% 2,926,090 18,816 2.56%
Liabilities
11 Total Interest-Bearing Deposits 1,996,891 5,325 1.07% 1.46% 1,110,381 9,520 1.81%
12 Interest-Bearing Transaction 547,574 347 0.25% 0.33% 577,554 528 0.37%
13 Savings 763,575 1,105 0.58% 0.70% 824,300 1,452 0.71%
14 Time less than $100K 192,810 1,354 2.82% 3.25% 212,189 1,751 3.31%
15 Time greater than $100K 492,932 2,519 2.06% 3.18% 496,338 5,789 4.68%
16 Total Short-Term Borrowings 556,794 2,483 1.77% 2.70% 778,841 8,718 4.43%
17 Fed Funds Purchased 414,632 2,220 2.12% 3.22% 625,060 8,294 5.25%
18 Other Short-Term Funds 142,162 263 0.74% 0.83% 153,781 424 1.11%
19 Long-Term Debt 36,721 578 6.30% 6.29% 36,868 578 6.27%
20 Net Interest Income and Margin (FTE) $49,731 5.16% 4.79% $46,059 4.36%
* Annualized
6. Noninterest Income.
(dollars in thousands except per share amounts)
Q2'08 / Q2'08 / 6/30'08YTD /
Q2'08 Q2'07 Q2'07 Q1'08 Q1'08 6/30'08YTD 6/30'07YTD 6/30'07YTD
--------------------------------------------------------------------------------------
1 Service Charges on Deposit $7,529 $7,716 -2.4% $7,296 3.2% $14,825 $15,244 -2.8%
Accounts
2 Merchant Credit Card Income 2,712 2,768 -2.0% 2,580 5.1% 5,292 5,217 1.4%
3 ATM Fees & Interchange 763 714 6.9% 718 6.3% 1,481 1,391 6.5%
4 Debit Card Fees 978 960 1.9% 904 8.3% 1,882 1,856 1.4%
5 Financial Services Commissions 274 363 -24.6% 230 18.9% 504 673 -25.1%
6 Mortgage Banking Income 27 33 -17.4% 40 -33.0% 67 62 7.7%
7 Trust Fees 377 304 24.0% 303 24.6% 680 641 6.1%
8 Other Income 1,675 1,842 -9.1% 1,609 4.1% 3,284 4,072 -19.3%
------------------------ ------------- ------------------------
9 Sub-total 14,335 14,700 -2.5% 13,680 4.8% 28,015 29,156 -3.9%
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 5,698 n/m 5,698 0 n/m
12 Investment Securities (Impairment) (18,178) 0 n/m 0 n/m (18,178) 0 n/m
------------------------ ------------- ------------------------
13 Total Noninterest Income ($3,843) $14,700 -126.1% $19,378 -119.8% $15,535 $29,978 -48.2%
======================== ============= ========================
14 Operating Ratios:
15 Total Revenue (FTE) $45,888 $60,759 -24.5% $67,360 -31.9% $113,248 $122,951 -7.9%
16 Noninterest Income / Revenue -8.4% 24.2% 28.8% 13.7% 24.4%
(FTE)
17 Service Charges / Deposits 0.95% 0.92% 0.91% 0.93% 0.90%
(annualized)
18 Total Revenue Per Share $6.38 $8.14 -21.6% $9.39 -32.0% $7.88 $8.23 -4.2%
(annualized)
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WESTAMERICA BANCORPORATION Public Information July 15, 2008
7. Noninterest Expense.
(dollars in thousands)
Q2'08 / Q2'08 / 6/30'08YTD /
Q2'08 Q2'07 Q2'07 Q1'08 Q1'08 6/30'08YTD 6/30'07YTD 6/30'07YTD
--------------------------------------------------------------------------------------
1 Salaries & Benefits $13,065 $12,622 3.5% $12,984 0.6% $26,049 $25,189 3.4%
2 Occupancy 3,443 3,342 3.0% 3,390 1.6% 6,833 6,633 3.0%
3 Equipment 1,001 1,147 -12.7% 921 8.7% 1,922 2,284 -15.9%
4 Data Processing 2,105 1,543 36.4% 2,120 -0.7% 4,225 3,066 37.8%
5 Courier 824 857 -3.9% 829 -0.6% 1,653 1,705 -3.0%
6 Postage 390 396 -1.6% 383 1.7% 773 806 -4.2%
7 Telephone 346 354 -2.2% 335 3.1% 681 714 -4.5%
8 Professional Fees 683 409 67.1% 536 27.6% 1,219 904 34.8%
9 Stationery & Supplies 285 269 6.3% 279 2.5% 564 583 -3.3%
10 Loan Expense 233 171 36.3% 170 36.8% 403 338 19.1%
11 Operational Losses 196 171 14.6% 184 6.3% 380 331 15.0%
12 Amortization of Identifiable 788 893 -11.8% 858 -8.2% 1,646 1,868 -11.9%
Intangibles
13 Other Operating 2,978 2,532 17.6% 2,405 23.8% 5,383 4,949 8.8%
------------------------ ------------- ------------------------
14 Sub-total 26,337 24,706 6.6% 25,394 3.7% 51,731 49,370 4.8%
15 VISA Litigation 0 0 n/m (2,338) n/m (2,338) 0 n/m
------------------------ ------------- ------------------------
16 Total Noninterest Expense $26,337 $24,706 6.6% $23,056 14.2% $49,393 $49,370 0.0%
======================== ============= ========================
17 Full Time Equivalent Staff 892 910 -2.0% 886 0.7% 889 901 -1.3%
18 Average Assets / Full Time $4,773 $5,130 -7.0% $5,004 -4.6% $4,888 $5,206 -6.1%
Equivalent Staff
19 Operating Ratios:
20 FTE Revenue / Full Time $207 $268 -22.7% $306 -32.3% $256 $275 -6.9%
Equiv. Staff (annualized)
21 Noninterest Expense / Earning 2.74% 2.33% 2.30% 2.52% 2.33%
Assets (annualized)
22 Noninterest Expense / 57.4% 40.7% 34.2% 43.6% 40.2%
FTE Revenues
Page 13
WESTAMERICA BANCORPORATION Public Information July 15, 2008
8. Provision for Credit Losses.
(dollars in thousands)
Q2'08 / Q2'08 / 6/30'08YTD /
Q2'08 Q2'07 Q2'07 Q1'08 Q1'08 6/30'08YTD 6/30'07YTD 6/30'07YTD
--------------------------------------------------------------------------------------
1 Provision for Credit Losses $600 $75 700.0% $600 0.0% $1,200 $150 700.0%
2 Gross Loan Losses 2,208 2,244 -1.6% 1,537 43.6% 3,745 3,488 7.3%
3 Net Loan Losses 1,870 1,491 25.4% 872 114.4% 2,742 2,007 36.6%
4 Recoveries / Gross Loan Losses 15% 34% 43% 27% 42%
5 Average Total Loans $2,439,062 $2,516,114 -3.1%$2,477,666 -1.6%$2,458,364 $2,518,085 -2.4%
6 Net Loan Losses / Loans 0.31% 0.24% 0.14% 0.22% 0.16%
(annualized)
7 Provision for Credit Losses / 0.10% 0.01% 0.10% 0.10% 0.01%
Loans (annualized)
8 Provision for Credit Losses / 32.1% 5.0% 68.8% 43.8% 7.5%
Net Loan Losses
9. Credit Quality.
(dollars in thousands)
06/30/08 / 06/30/08 /
06/30/2008 06/30/2007 06/30/20003/31/2008 03/31/20012/31/2007 09/30/2007 03/31/2007
--------------------------------------------------------------------------------------
1 Nonperforming Nonaccrual Loans $11,713 $3,140 273.0% $3,728 214.2% $3,164 $3,132 $2,341
2 Performing Nonaccrual Loans 28 1,898 -98.5% 1,652 -98.3% 1,688 1,695 2,459
------------------------ ------------- -----------------------------------
3 Total Nonaccrual Loans 11,741 5,038 133.1% 5,380 118.2% 4,852 4,827 4,800
4 Accruing Loans 90+ Days Past Due 254 179 41.9% 268 -5.2% 297 251 82
------------------------ ------------- -----------------------------------
5 Total Nonperforming Loans 11,995 5,217 129.9% 5,648 112.4% 5,149 5,078 4,882
6 Repossessed Collateral 920 613 50.0% 954 -3.6% 613 613 647
7 Total Nonperforming Loans & ------------------------ ------------- -----------------------------------
8 Repossessed Collateral $12,915 $5,830 121.5% $6,602 95.6% $5,762 $5,691 $5,529
======================== ============= ===================================
9 Classified Loans $33,546 $22,498 49.1% $33,303 0.7% $24,419 $21,403 $18,439
======================== ============= ===================================
10 Allowance for Loan Losses $50,964 $53,473 -4.7% $52,234 -2.4% $52,506 $52,938 $54,889
11 Total Loans Outstanding 2,431,011 2,521,738 -3.6% 2,448,320 -0.7% 2,502,976 2,511,374 2,519,898
12 Total Assets 4,188,868 4,647,069 -9.9% 4,342,302 -3.5% 4,558,959 4,657,016 4,748,829
13 Allowance for Loan Losses / 2.10% 2.12% 2.13% 2.10% 2.11% 2.18%
Total Loans
14 Nonperforming Loans / Total Loans 0.49% 0.21% 0.23% 0.21% 0.20% 0.19%
15 Nonperforming Loans & Repossessed
16 Collateral/Total Assets 0.31% 0.13% 0.15% 0.13% 0.12% 0.12%
17 Allowance/Nonperforming Loans 425% 1025% 925% 1020% 1042% 1124%
18 Allowance for Loan Losses / 152% 238% 157% 215% 247% 298%
Classified Loans
19 Classified Loans /
20 (Equity + Allowance for 7.3% 4.9% 7.4% 5.5% 4.7% 3.9%
Loan Losses)
Page 14
WESTAMERICA BANCORPORATION Public Information July 15, 2008
10.Capital.
(dollars in thousands, except per-share amounts)
06/30/08 / 06/30/08 /
06/30/2008 06/30/2007 06/30/20003/31/2008 03/31/20012/31/2007 09/30/2007 03/31/2007
--------------------------------------------------------------------------------------
1 Shareholders' Equity $410,445 $407,982 0.6% $399,109 2.8% $394,603 $403,651 $419,810
2 Tier I Regulatory Capital 290,864 286,818 1.4% 283,768 2.5% 278,970 283,015 293,382
3 Total Regulatory Capital 327,631 326,582 0.3% 321,819 1.8% 318,089 322,598 333,658
4 Total Assets 4,188,868 4,647,069 -9.9% 4,342,302 -3.5% 4,558,959 4,657,016 4,748,829
5 Risk-Adjusted Assets 2,485,553 3,014,947 -17.6% 2,914,007 -14.7% 2,986,737 3,017,668 3,043,445
6 Shareholders' Equity / 9.80% 8.78% 9.19% 8.66% 8.67% 8.84%
Total Assets
7 Shareholders' Equity / Total Loans 16.88% 16.18% 16.30% 15.77% 16.07% 16.66%
8 Tier I Capital /Total Assets 6.94% 6.17% 6.53% 6.12% 6.08% 6.18%
9 Tier I Capital / 10.22% 9.51% 9.74% 9.33% 9.38% 9.64%
Risk-Adjusted Assets
10 Total Capital / 11.51% 10.83% 11.04% 10.64% 10.69% 10.96%
Risk-Adjusted Assets
11 Shares Outstanding 28,889 29,732 -2.8% 28,772 0.4% 29,018 29,378 30,158
12 Book Value Per Share $14.21 $13.72 3.5% $13.87 2.4% $13.60 $13.74 $13.92
13 Market Value Per Share $52.59 $44.24 18.9% $52.60 -0.0% $44.55 $49.81 $48.17
14 Share Repurchase Programs
(shares in thousands)
Q2'08 / Q2'08 / 6/30'08YTD /
Q2'08 Q2'07 Q2'07 Q1'08 Q1'08 6/30'08YTD 6/30'07YTD 6/30'07YTD
--------------------------------------------------------------------------------------
15 Total Shares Repurchased / 172 456 -62.4% 424 -59.5% 596 904 -34.1%
Canceled
16 Average Repurchase Price $54.89 $46.77 17.4% $47.68 15.1% $49.76 $48.12 3.4%
17 Net Shares (Issued) Repurchased (117) 426 -127.6% 246 -147.7% 129 815 -84.2%
Page 15
WESTAMERICA BANCORPORATION Public Information July 15, 2008
11.Period-End Balance Sheets.
(unaudited, dollars in thousands)
06/30/08 / 06/30/08 /
06/30/2008 06/30/2007 06/30/20003/31/2008 03/31/20012/31/2007 09/30/2007 03/31/2007
--------------------------------------------------------------------------------------
1 Assets:
2 Cash and Money Market Assets $134,432 $164,390 -18.2% $139,957 -3.9% $210,097 $219,960 $208,734
3 Investment Securities 391,028 582,959 -32.9% 477,686 -18.1% 532,821 570,086 602,220
Available For Sale
4 Investment Securities 978,298 1,104,132 -11.4% 1,016,613 -3.8% 1,045,288 1,081,009 1,142,382
Held to Maturity
5 Loans, gross 2,431,011 2,521,738 -3.6% 2,448,320 -0.7% 2,502,976 2,511,374 2,519,898
6 Allowance For Loan Losses (50,964) (53,473) -4.7% (52,234) -2.4% (52,506) (52,938) (54,889)
------------------------ ------------- -----------------------------------
7 Loans, net 2,380,047 2,468,265 -3.6% 2,396,086 -0.7% 2,450,470 2,458,436 2,465,009
------------------------ ------------- -----------------------------------
8 Premises and Equipment 27,460 29,169 -5.9% 28,031 -2.0% 28,380 28,666 29,643
9 Identifiable Intangible Assets 16,784 20,215 -17.0% 17,571 -4.5% 18,429 19,322 21,108
10 Goodwill 121,719 121,719 0.0% 121,719 0.0% 121,719 121,719 121,719
11 Interest Receivable and 139,100 156,220 -11.0% 144,639 -3.8% 151,755 157,818 158,014
Other Assets ------------------------ ------------- -----------------------------------
12 Total Assets $4,188,868 $4,647,069 -9.9%$4,342,302 -3.5%$4,558,959 $4,657,016 $4,748,829
======================== ============= ===================================
13 Liabilities and Shareholders' Equity:
14 Deposits:
15 Noninterest Bearing $1,195,004 $1,266,941 -5.7%$1,202,165 -0.6%$1,245,500 $1,251,572 $1,293,920
16 Interest-Bearing Transaction 527,109 554,036 -4.9% 542,468 -2.8% 544,411 549,263 584,026
17 Savings 754,677 809,791 -6.8% 749,471 0.7% 760,006 806,797 851,800
18 Time 686,702 704,264 -2.5% 700,534 -2.0% 714,873 732,582 714,626
------------------------ ------------- -----------------------------------
19 Total Deposits 3,163,492 3,335,032 -5.1% 3,194,638 -1.0% 3,264,790 3,340,214 3,444,372
------------------------ ------------- -----------------------------------
20 Short-Term Borrowed Funds 514,131 809,261 -36.5% 635,264 -19.1% 798,599 815,101 776,781
21 Debt Financing and Notes Payable 36,699 36,846 -0.4% 36,736 -0.1% 36,773 36,809 36,883
22 Liability For Interest, Taxes 64,101 57,948 10.6% 76,555 -16.3% 64,194 61,241 70,983
and Other ------------------------ ------------- -----------------------------------
23 Total Liabilities 3,778,423 4,239,087 -10.9% 3,943,193 -4.2% 4,164,356 4,253,365 4,329,019
------------------------ ------------- -----------------------------------
24 Shareholders' Equity:
25 Paid-In Capital $351,157 $338,290 3.8% $339,468 3.4% $337,201 $337,627 $341,724
26 Accumulated Other Comprehensive
27 Income (Loss) 1,074 (777) -238.2% (3,954) -127.2% (4,520) (412) 3,593
28 Retained Earnings 58,214 70,469 -17.4% 63,595 -8.5% 61,922 66,435 74,493
------------------------ ------------- -----------------------------------
29 Total Shareholders' Equity 410,445 407,982 0.6% 399,109 2.8% 394,603 403,651 419,810
------------------------ ------------- -----------------------------------
30 Total Liabilities and $4,188,868 $4,647,069 -9.9%$4,342,302 -3.5%$4,558,959 $4,657,016 $4,748,829
Shareholders' Equity ======================== ============= ===================================
Page 16
WESTAMERICA BANCORPORATION Public Information July 15, 2008
12.Income Statements.
(unaudited, dollars in thousands, except per-share amounts)
Q2'08 / Q2'08 / 6/30'08YTD /
Q2'08 Q2'07 Q2'07 Q1'08 Q1'08 6/30'08YTD 6/30'07YTD 6/30'07YTD
--------------------------------------------------------------------------------------
1 Interest and Fee Income:
2 Loans $37,274 $40,727 -8.5% $38,732 -3.8% $76,006 $80,894 -6.0%
3 Money Market Assets and 1 2 n/m 1 n/m 2 3 n/m
Funds Sold
4 Investment Securities 4,942 6,841 -27.8% 5,802 -14.8% 10,744 13,963 -23.1%
Available For Sale
5 Investment Securities 10,438 11,771 -11.3% 10,859 -3.9% 21,297 23,854 -10.7%
Held to Maturity ------------------------ ------------- ------------------------
6 Total Interest Income 52,655 59,341 -11.3% 55,394 -4.9% 108,049 118,714 -9.0%
------------------------ ------------- ------------------------
7 Interest Expense:
8 Transaction Deposits 347 528 -34.3% 452 -23.3% 799 1,051 -24.0%
9 Savings Deposits 1,105 1,452 -23.9% 1,330 -16.9% 2,435 2,861 -14.9%
10 Time Deposits 3,873 7,540 -48.6% 5,546 -30.2% 9,419 14,845 -36.6%
11 Short-Term Borrowed Funds 2,483 8,718 -71.5% 4,922 -49.6% 7,405 17,014 -56.5%
12 Debt Financing and Notes Payable 578 578 -0.0% 578 -0.0% 1,156 1,156 -0.0%
------------------------ ------------- ------------------------
13 Total Interest Expense 8,386 18,816 -55.4% 12,828 -34.6% 21,214 36,927 -42.6%
------------------------ ------------- ------------------------
14 Net Interest Income 44,269 40,525 9.2% 42,566 4.0% 86,835 81,787 6.2%
------------------------ ------------- ------------------------
15 Provision for Credit Losses 600 75 700.0% 600 0.0% 1,200 150 700.0%
------------------------ ------------- ------------------------
16 Noninterest Income:
17 Service Charges on 7,529 7,716 -2.4% 7,296 3.2% 14,825 15,244 -2.8%
Deposit Accounts
18 Merchant Credit Card 2,712 2,768 -2.0% 2,580 5.1% 5,292 5,217 1.4%
19 ATM Fees & Interchange 763 714 6.9% 718 6.3% 1,481 1,391 6.5%
20 Debit Card Fees 978 960 1.9% 904 8.3% 1,882 1,856 1.4%
21 Financial Services Commissions 274 363 -24.6% 230 18.9% 504 673 -25.1%
22 Mortgage Banking 27 33 -17.4% 40 -33.0% 67 62 7.7%
23 Trust Fees 377 304 24.0% 303 24.6% 680 641 6.1%
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 5,698 n/m 5,698 0 n/m
Common Stock
26 Investment Securities (18,178) 0 n/m 0 n/m (18,178) 0 n/m
(Impairment)
27 Other 1,675 1,842 -9.1% 1,609 4.1% 3,284 4,072 -19.3%
------------------------ ------------- ------------------------
28 Total Noninterest Income (3,843) 14,700 -126.1% 19,378 -119.8% 15,535 29,978 -48.2%
------------------------ ------------- ------------------------
29 Noninterest Expense:
30 Salaries and Related Benefits 13,065 12,622 3.5% 12,984 0.6% 26,049 25,189 3.4%
31 Occupancy 3,443 3,342 3.0% 3,390 1.6% 6,833 6,633 3.0%
32 Equipment 1,001 1,147 -12.7% 921 8.7% 1,922 2,284 -15.9%
33 Data Processing 2,105 1,543 36.4% 2,120 -0.7% 4,225 3,066 37.8%
34 Professional Fees 683 409 67.1% 536 27.6% 1,219 904 34.8%
35 VISA Litigation 0 0 n/m (2,338) n/m (2,338) 0 n/m
36 Other 6,040 5,643 7.0% 5,443 11.0% 11,483 11,294 1.7%
------------------------ ------------- ------------------------
37 Total Noninterest Expense 26,337 24,706 6.6% 23,056 14.2% 49,393 49,370 0.0%
------------------------ ------------- ------------------------
38 Income Before Income Taxes 13,489 30,444 -55.7% 38,288 -64.8% 51,777 62,245 -16.8%
39 Provision for Income Taxes 1,287 8,093 -84.1% 11,510 -88.8% 12,797 16,324 -21.6%
------------------------ ------------- ------------------------
40 Net Income $12,202 $22,351 -45.4% $26,778 -54.4% $38,980 $45,921 -15.1%
======================== ============= ========================
41 Average Shares Outstanding 28,916 29,938 -3.4% 28,861 0.2% 28,888 30,139 -4.2%
42 Diluted Average Shares Outstanding 29,392 30,365 -3.2% 29,210 0.6% 29,301 30,593 -4.2%
43 Per Share Data:
44 Basic Earnings $0.42 $0.75 -43.5% $0.93 -54.8% $1.35 $1.52 -11.4%
45 Diluted Earnings 0.42 0.74 -43.6% 0.92 -54.3% 1.33 1.50 -11.4%
46 Dividends Paid 0.35 0.34 2.9% 0.34 2.9% 0.69 0.68 1.5%