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Westamerica Ban Corp. (WABC) filed Quarterly Report for the period ended 2011-09-30.
Westamerica Ban Corp. has a market cap of $1.22 billion; its shares were traded at around $42.63 with a P/E ratio of 13.7 and P/S ratio of 4.3. The dividend yield of Westamerica Ban Corp. stocks is 3.4%. Westamerica Ban Corp. had an annual average earning growth of 2.4% over the past 10 years.
This is the annual revenues and earnings per share of WABC over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of WABC.
Highlight of Business Operations:
Interest and fee income (FTE) for the third quarter of 2011 decreased $3.0 million or 5.1% from the same period in 2010. The decrease was caused by lower average balances of loans and lower yields on earning assets, partially offset by higher average balances of investments. The total average balances of loans declined due to decreases in the average balances of taxable commercial loans (down $122 million), commercial real estate loans (down $49 million) and residential real estate loans (down $46 million), construction loans (down $21 million) and tax-exempt commercial loans (down $19 million), partially offset by a $10 million increase in the average balances of consumer loans. The average investment portfolio increased largely due to higher average balances of municipal securities (up $96 million), U.S. Government sponsored entities (up $74 million), corporate securities (up $59 million) and collateralized mortgage obligations (up $72 million), partially offset by a $38 million decline in the average balance of residential mortgage backed securities. The average yield on the Company's earning assets decreased from 5.84% in the third quarter of 2010 to 5.52% in the corresponding period of 2011. The composite yield on loans declined 0.13% to 6.00% in the third quarter 2011 compared to the corresponding period of 2010. Nonperforming loans are included in average loan volumes used to compute loan yields; fluctuations in nonaccrual loan volumes impact loan yields. The loan portfolio yield declined due to lower yields on consumer loans (down 0.65%), tax-exempt commercial loans (down 0.40%), residential real estate loans (down 0.32%) and commercial real estate loans (down 0.11%), partially offset by increases in yields on construction (up 2.94%) and taxable commercial loans (up 0.29%). The investment portfolio yield decreased 0.51% to 4.58%. Decreases in yields on collateralized mortgage obligations (down 1.44%), residential mortgage backed securities (down 0.15%), municipal securities (down 0.19%) were partially offset by increases in yields on corporate securities (up 0.70%) and U.S. government sponsored entities (up 0.20%). The decline in loan and investment yields is primarily due to relatively low market rates and competitive loan pricing.Comparing the first nine months of 2011 with the first nine months of 2010, interest and fee income (FTE) was down $8.0 million or 4.5%. The decrease resulted from a lower average volume of loans and lower yields on interest earning assets, partially offset by higher average balances of investments. A lower average balance of the loan portfolio was mostly attributable to decreases in average balances of taxable commercial loans (down $94 million), residential real estate loans (down $45 million), tax-exempt commercial loans (down $20 million) and commercial real estate loans (down $13 million), partially offset by a $7 million increase in the average balance of consumer loans. The average investment portfolio increased mostly due to higher average balances of U.S. government sponsored entity obligations (up $112 million), municipal securities (up $90 million) and corporate securities (up $69 million), partially offset by a $47 million decrease in the average balance of residential mortgage backed securities. The average yield on earning assets for the first nine months of 2011 was 5.56% compared with 5.91% in the first nine months of 2010. The loan portfolio yield for the first nine months of 2011 decreased 0.16% compared with the first nine months of 2010 primarily due to lower yields on consumer loans (down 0.52%), residential real estate loans (down 0.45%), tax-exempt commercial loans (down 0.15%) and commercial real estate loans (down 0.12%), partially offset by increases in yields on taxable commercial loans (up 0.22%) and construction loans (up 0.16%). The investment portfolio yield declined from 5.24% in the first nine months of 2010 to 4.65% in the first nine months of 2011 mainly due to decreases in yields on collateralized mortgage obligations (down 0.90%), residential mortgage backed securities (down 0.25%) and municipal securities (down 0.18%), partially offset by corporate securities (up 0.84%).
The following tables present, for the periods indicated, information regarding the Company's consolidated average assets, liabilities and shareholders' equity, the amount of interest income from average earning assets and the resulting annualized yields, and the amount of interest expense paid on average interest-bearing liabilities and the resulting annualized rate paid. Average loan balances include nonperforming loans. Interest income includes proceeds from loans on nonaccrual status only to the extent cash payments have been received and applied as interest income. The amount of gross interest income that would have been recorded if all nonaccrual loans had been current in accordance with their original terms while outstanding was $1.1 million and $4.4 million in the third quarter and first nine months of 2011, respectively, compared with $1.6 million and $4.7 million for the third quarter and first nine months of 2010, respectively. The amount of interest income that was recognized on nonaccrual loans from all cash payments made during the three and nine months ended September 30, 2011, totaled $1.0 million and $3.9 million, respectively, compared with $1.7 million and $5.2 million for the third quarter and first nine months of 2010, respectively. There were no cash payments received that were applied against the book balance of nonaccrual purchased covered loans outstanding at September 30, 2011 in the third quarter and first nine months of 2011. Cash payments of $60 thousand received in the first nine months of 2010, which were applied against the book balance of nonaccrual loans outstanding at September 30, 2010, were received in the third quarter 2010. Yields on securities and certain loans have been adjusted upward to reflect the effect of income that is exempt from federal income taxation at the current statutory tax rate (FTE).
In the first nine months of 2011, noninterest income decreased $1.1 million or 2.3% compared with the first nine months of 2010. Service charges on deposits decreased $3.0 million due to declines in fees charged on overdrawn accounts and insufficient funds (down $2.5 million) and deficit fees charged on analyzed accounts (down $476 thousand). Financial services commissions decreased $326 thousand due to lower sales of mutual funds and annuities. Merchant processing services income increased $290 thousand mainly due to higher transaction volumes. Trust fees increased $150 thousand due to increased accounts. Other noninterest income increased $1.8 million primarily due to $459 thousand in ACH service fee income, a $446 thousand increase in income from net recoveries of charged-off purchased loans, a $299 thousand increase in income from investment in real estate, a $173 thousand gain on retirement of subordinated debt and $148 thousand in recoveries of unclaimed funds.
Noninterest expense increased $1.4 million or 1.4% in the first nine months of 2011 compared with the same period in 2010 primarily due to $2.1 million in settlement accruals. The first nine months of 2011 results also included $679 thousand related to pre-integration costs for the acquired Sonoma, primarily outsourced data processing and personnel costs. Sonoma operations were fully integrated in February 2011. Expenses related to other real estate owned were $1.2 million higher in the nine months ended September 30, 2011 due to recognition of declines in value based on recent appraisals, payment of delinquent property taxes on real estate repossessed during the period and lower gains on sales of foreclosed assets. Professional fees increased $1.0 million due to higher legal fees. Occupancy expense increased $524 thousand primarily due increased rental of bank premises. Loan expense increased $267 thousand primarily due to increases in foreclosure expense, appraisal fees and waived fees on foreclosed loans. Operational losses increased $200 thousand due to increased fraudulent deposit account and debit card activity and branch robberies. Outsourced data processing services expense increased $114 thousand mainly due to merger deconversion costs for Sonoma operations. Salaries and related benefits decreased $2.5 million primarily due to a reduction in regular salaries, decreases in incentives, bonuses and other benefits, partially offset by higher group health insurance costs and annual merit increases in salaries. Deposit insurance assessments declined $1.1 million due to new assessment rules effective April 1, 2011. Equipment expense declined $319 thousand primarily due to lower repairs and maintenance expenses. Amortization of identifiable intangible assets declined $206 thousand as intangible assets are amortized on a declining balance method.
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