Westamerica Bancorporation Reports Fourth Quarter 2023 Financial Results

- NASDAQ Companies
  0

SAN RAFAEL, Calif., Jan. 18, 2024 (GLOBE NEWSWIRE) — Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the fourth quarter 2023 of $39.5 million and diluted earnings per common share (“EPS”) of $1.48. Fourth quarter 2023 results include an increase to the book tax provision to reconcile the 2022 income tax provision to the filed 2022 tax returns, which reduced EPS $0.02. Fourth quarter 2023 results compare to third quarter 2023 net income of $41.6 million and EPS of $1.56.

“Westamerica’s fourth quarter 2023 results benefited from the Company’s valuable low-cost deposit base, of which 48 percent was represented by non-interest bearing checking accounts during the quarter. The annualized cost of funding our loan and bond portfolios was 0.11 percent in the fourth quarter 2023. The Company’s customer deposits and shareholders’ equity fully funded our interest earning assets during the fourth quarter 2023; the Company did not take in brokered deposits, or borrow from the Federal Reserve Bank or correspondent banks. Operating expenses remained well controlled and nonperforming assets were stable,” said Chairman, President and CEO David Payne. “Fourth quarter 2023 results generated an annualized 16.7 percent return on average common equity. Shareholders were paid a $0.44 per common share dividend during the fourth quarter 2023,” concluded Payne.

Net interest income on a fully-taxable equivalent (FTE) basis was $69.7 million for the fourth quarter 2023, compared to $72.1 million for the third quarter 2023. The annualized yield earned on loans, bonds and cash for the fourth quarter 2023 was 4.52 percent, up from 4.50 percent for the third quarter 2023. The annualized cost of funding the loan and bond portfolios was 0.11 percent for the fourth quarter 2023, compared to 0.07 percent for the third quarter 2023.

Noninterest income for the fourth quarter 2023 totaled $11.0 million compared to $11.3 million for the third quarter 2023. Third quarter 2023 results include a $278 thousand life insurance gain.

Noninterest expenses for the fourth quarter 2023 were $25.5 million compared to $25.7 million for the third quarter 2023.

The income tax provision for the fourth quarter 2023 includes a $492 thousand increase to reconcile the 2022 income tax provision to the filed 2022 tax returns.

Westamerica Bancorporation’s wholly owned subsidiary Westamerica Bank, operates commercial banking and trust offices throughout Northern and Central California.

Westamerica Bancorporation Web Address: www.westamerica.com

For additional information contact:

Westamerica Bancorporation
1108 Fifth Avenue, San Rafael, CA 94901
Robert A. Thorson – SVP & Chief Financial Officer
707-863-6840
[email protected]

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 reports filed with the Securities and Exchange Commission, including the annual report for the year ended December 31, 2022 filed on Form 10-K and quarterly report for the quarter ended September 30, 2023 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 2010, 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.

       
  Public Information January 18, 2024 
WESTAMERICA BANCORPORATION        
FINANCIAL HIGHLIGHTS        
December 31, 2023        
           
1. Net Income Summary.        
    (in thousands except per-share amounts)
        %  
    Q4’2023 Q4’2022 Change Q3’2023
           
  Net Interest and Fee Income (FTE) $69,738   $69,155   0.8 % $72,092  
  Provision for Credit Losses   –     –   n/m   400  
  Noninterest Income   10,992     10,463   5.1 %   11,281  
  Noninterest Expense   25,517     25,090   1.7 %   25,650  
  Income Before Taxes (FTE)   55,213     54,528   1.3 %   57,323  
  Income Tax Provision (FTE)   15,745     15,184   3.7 %   15,722  
  Net Income $39,468   $39,344   0.3 % $41,601  
           
  Average Common Shares Outstanding   26,662     26,912   -0.9 %   26,648  
  Diluted Average Common Shares Outstanding   26,664     26,924   -1.0 %   26,650  
           
  Operating Ratios:        
  Basic Earnings Per Common Share $1.48   $1.46   1.4 % $1.56  
  Diluted Earnings Per Common Share   1.48     1.46   1.4 %   1.56  
  Return On Assets (a)   2.35 %   2.12 %     2.41 %
  Return On Common Equity (a)   16.7 %   18.6 %     18.3 %
  Net Interest Margin (FTE) (a)   4.41 %   3.95 %     4.43 %
  Efficiency Ratio (FTE)   31.6 %   31.5 %     30.8 %
           
  Dividends Paid Per Common Share $0.44   $0.42   4.8 % $0.44  
  Common Dividend Payout Ratio   30 %   29 %     28 %
           
        %  
    12/31’23YTD 12/31’22YTD Change  
           
  Net Interest and Fee Income (FTE) $281,673   $221,775   27.0 %  
  Reversal of Provision for Credit Losses (2)   (1,150 )   –   n/m    
  Noninterest Income (1)   43,522     45,121   -3.5 %  
  Noninterest Expense   103,216     99,361   3.9 %  
  Income Before Taxes (FTE)   223,129     167,535   33.2 %  
  Income Tax Provision (FTE)   61,361     45,501   34.9 %  
  Net Income $161,768   $122,034   32.6 %  
           
  Average Common Shares Outstanding   26,703     26,895   -0.7 %  
  Diluted Average Common Shares Outstanding   26,706     26,907   -0.7 %  
           
  Operating Ratios:        
  Basic Earnings Per Common Share $6.06   $4.54   33.5 %  
  Diluted Earnings Per Common Share   6.06     4.54   33.5 %  
  Return On Assets   2.35 %   1.65 %    
  Return On Common Equity   18.1 %   15.2 %    
  Net Interest Margin (FTE)   4.37 %   3.17 %    
  Efficiency Ratio (FTE)   31.7 %   37.2 %    
           
  Dividends Paid Per Common Share $1.72   $1.68   2.4 %  
  Common Dividend Payout Ratio   28 %   37 %    
           
2. Net Interest Income.        
    (dollars in thousands)
        %  
    Q4’2023 Q4’2022 Change Q3’2023
           
  Interest and Fee Income (FTE) $71,417   $69,630   2.6 % $73,225  
  Interest Expense   1,679     475   253.5 %   1,133  
  Net Interest and Fee Income (FTE) $69,738   $69,155   0.8 % $72,092  
           
  Average Earning Assets $6,251,143   $6,930,584   -9.8 % $6,438,411  
  Average Interest- Bearing Liabilities   2,966,038     3,412,189   -13.1 %   3,118,632  
           
  Yield on Earning Assets (FTE) (a)   4.52 %   3.98 %     4.50 %
  Cost of Funds (a)   0.11 %   0.03 %     0.07 %
  Net Interest Margin (FTE) (a)   4.41 %   3.95 %     4.43 %
  Interest Expense/        
     Interest-Bearing Liabilities (a)   0.22 %   0.06 %     0.14 %
  Net Interest Spread (FTE) (a)   4.30 %   3.92 %     4.36 %
           
        %  
    12/31’23YTD 12/31’22YTD Change  
           
  Interest and Fee Income (FTE) $285,563   $223,700   27.7 %  
  Interest Expense   3,890     1,925   102.1 %  
  Net Interest and Fee Income (FTE) $281,673   $221,775   27.0 %  
           
  Average Earning Assets $6,451,821   $6,992,696   -7.7 %  
  Average Interest- Bearing Liabilities   3,128,115     3,506,559   -10.8 %  
           
  Yield on Earning Assets (FTE)   4.43 %   3.20 %    
  Cost of Funds   0.06 %   0.03 %    
  Net Interest Margin (FTE)   4.37 %   3.17 %    
  Interest Expense/        
     Interest-Bearing Liabilities   0.12 %   0.05 %    
  Net Interest Spread (FTE)   4.31 %   3.15 %    
           
3. Loans & Other Earning Assets.        
    (average volume, dollars in thousands)
        %  
    Q4’2023 Q4’2022 Change Q3’2023
           
  Total Assets $6,665,040   $7,353,270   -9.4 % $6,847,691  
  Total Earning Assets   6,251,143     6,930,584   -9.8 %   6,438,411  
  Total Loans   873,635     964,287   -9.4 %   903,854  
    Commercial Loans   139,535     173,527   -19.6 %   151,431  
    Commercial Real Estate Loans   490,645     492,549   -0.4 %   493,072  
    Consumer Loans   243,455     298,211   -18.4 %   259,351  
  Total Investment Securities   5,182,557     5,694,280   -9.0 %   5,247,118  
    Debt Securities Available for Sale   4,298,396     4,767,459   -9.8 %   4,353,794  
    Debt Securities Held to Maturity   884,161     926,821   -4.6 %   893,324  
  Total Interest-Bearing Cash   194,951     272,017   -28.3 %   287,439  
           
  Loans/Deposits   15.7 %   15.2 %     15.8 %
           
        %  
    12/31’23YTD 12/31’22YTD Change  
           
  Total Assets $6,871,366   $7,413,008   -7.3 %  
  Total Earning Assets   6,451,821     6,992,696   -7.7 %  
  Total Loans   912,316     997,964   -8.6 %  
    Commercial Loans   153,499     193,481   -20.7 %  
    Commercial Real Estate Loans   492,183     504,713   -2.5 %  
    Consumer Loans   266,634     299,770   -11.1 %  
  Total Investment Securities   5,334,711     5,303,646   0.6 %  
    Debt Securities Available for Sale   4,436,003     4,747,969   -6.6 %  
    Debt Securities Held to Maturity   898,708     555,677   61.7 %  
  Total Interest-Bearing Cash   204,794     691,086   -70.4 %  
           
  Loans/Deposits   15.8 %   15.6 %    
           
4. Deposits, Other Interest-Bearing Liabilities & Equity.    
    (average volume, dollars in thousands)
        %  
    Q4’2023 Q4’2022 Change Q3’2023
           
  Total Deposits $5,573,281   $6,349,401   -12.2 % $5,722,817  
    Noninterest Demand   2,672,170     3,010,806   -11.2 %   2,721,358  
    Interest-Bearing Transaction   1,085,864     1,287,304   -15.6 %   1,149,483  
    Savings   1,713,803     1,917,370   -10.6 %   1,741,994  
    Time greater than $100K   37,970     59,720   -36.4 %   43,073  
    Time less than $100K   63,474     74,201   -14.5 %   66,909  
  Total Short-Term Borrowings   64,927     73,594   -11.8 %   117,173  
  Shareholders’ Equity   938,738     837,499   12.1 %   902,300  
           
  Demand Deposits/ Total Deposits   47.9 %   47.4 %     47.6 %
  Transaction & Savings Deposits / Total Deposits   98.2 %   97.9 %     98.1 %
           
        %  
    12/31’23YTD 12/31’22YTD Change  
           
  Total Deposits $5,787,361   $6,415,626   -9.8 %  
    Noninterest Demand   2,748,544     3,018,350   -8.9 %  
    Interest-Bearing Transaction   1,156,684     1,289,956   -10.3 %  
    Savings   1,766,225     1,967,902   -10.2 %  
    Time greater than $100K   48,076     62,411   -23.0 %  
    Time less than $100K   67,832     77,007   -11.9 %  
  Total Short-Term Borrowings   89,298     109,283   -18.3 %  
  Shareholders’ Equity   894,610     802,489   11.5 %  
           
  Demand Deposits/ Total Deposits   47.5 %   47.0 %    
  Transaction & Savings Deposits / Total Deposits   98.0 %   97.8 %    
           
5. Interest Yields Earned & Rates Paid.        
    (dollars in thousands)  
    Q4’2023  
    Average Income/ Yield (a) /  
    Volume Expense Rate (a)  
  Interest & Fee Income Earned:        
    Total Earning Assets (FTE) $6,251,143   $71,417   4.52 %  
    Total Loans (FTE)   873,635     11,695   5.31 %  
      Commercial Loans (FTE)   139,535     2,503   7.12 %  
      Commercial Real Estate Loans   490,645     5,945   4.81 %  
      Consumer Loans   243,455     3,247   5.29 %  
    Total Investments (FTE)   5,182,557     57,032   4.35 %  
      Total Debt Securities Available for Sale (FTE)   4,298,396     48,094   4.42 %  
        Corporate Securities   2,129,736     14,687   2.76 %  
        Collateralized Loan Obligations   1,508,494     28,041   7.27 %  
        Agency Mortgage Backed Securities   264,514     1,627   2.46 %  
        Securities of U.S. Government sponsored entities   308,234     2,777   3.60 %  
        Obligations of States and Political        
           Subdivisions (FTE)   73,191     549   3.00 %  
        Other Debt Securities Available for Sale (FTE)   14,227     413   11.62 %  
      Total Debt Securities Held to Maturity (FTE)   884,161     8,938   4.04 %  
        Agency Mortgage Backed Securities   81,789     456   2.23 %  
        Corporate Securities   727,579     7,816   4.30 %  
        Obligations of States and Political        
           Subdivisions (FTE)   74,793     666   3.56 %  
    Total Interest-Bearing Cash   194,951     2,690   5.40 %  
           
  Interest Expense Paid:        
    Total Earning Assets   6,251,143     1,679   0.11 %  
    Total Interest-Bearing Liabilities   2,966,038     1,679   0.22 %  
    Total Interest-Bearing Deposits   2,901,111     1,635   0.22 %  
      Interest-Bearing Transaction   1,085,864     128   0.05 %  
      Savings   1,713,803     1,431   0.33 %  
      Time less than $100K   63,474     51   0.32 %  
      Time greater than $100K   37,970     25   0.26 %  
    Total Short-Term Borrowings   64,927     44   0.26 %  
           
  Net Interest Income and        
  Margin (FTE)   $69,738   4.41 %  
           
    Q4’2022  
    Average Income/ Yield (a) /  
    Volume Expense Rate (a)  
           
  Interest & Fee Income Earned:        
    Total Earning Assets (FTE) $6,930,584   $69,630   3.98 %  
    Total Loans (FTE)   964,287     12,293   5.06 %  
      Commercial Loans (FTE)   173,527     2,896   6.62 %  
      Commercial Real Estate Loans   492,549     5,812   4.68 %  
      Consumer Loans   298,211     3,585   4.77 %  
    Total Investments (FTE)   5,694,280     54,770   3.81 %  
      Total Debt Securities Available for Sale (FTE)   4,767,459     45,531   3.78 %  
        Corporate Securities   2,462,131     17,102   2.78 %  
        Collateralized Loan Obligations   1,590,164     22,801   5.61 %  
        Agency Mortgage Backed Securities   319,843     1,921   2.40 %  
        Securities of U.S. Government sponsored entities   297,710     2,690   3.61 %  
        Obligations of States and Political        
           Subdivisions (FTE)   84,774     644   3.04 %  
        Other Debt Securities Available for Sale (FTE)   12,837     373   11.63 %  
      Total Debt Securities Held to Maturity (FTE)   926,821     9,239   3.99 %  
        Agency Mortgage Backed Securities   109,100     575   2.11 %  
        Corporate Securities   720,752     7,815   4.34 %  
        Obligations of States and Political        
           Subdivisions (FTE)   96,969     849   3.50 %  
    Total Interest-Bearing Cash   272,017     2,567   3.69 %  
           
  Interest Expense Paid:        
    Total Earning Assets   6,930,584     475   0.03 %  
    Total Interest-Bearing Liabilities   3,412,189     475   0.06 %  
    Total Interest-Bearing Deposits   3,338,595     463   0.05 %  
      Interest-Bearing Transaction   1,287,304     96   0.03 %  
      Savings   1,917,370     280   0.06 %  
      Time less than $100K   74,201     51   0.27 %  
      Time greater than $100K   59,720     36   0.24 %  
    Total Short-Term Borrowings   73,594     12   0.06 %  
           
  Net Interest Income and        
  Margin (FTE)   $69,155   3.95 %  
           
6. Noninterest Income.        
    (dollars in thousands except per-share amounts)
        %  
    Q4’2023 Q4’2022 Change Q3’2023
           
  Service Charges on Deposit Accounts $3,540   $3,484   1.6 % $3,705  
  Merchant Processing Services   2,863     2,701   6.0 %   2,911  
  Debit Card Fees   2,067     1,704   21.3 %   1,717  
  Trust Fees   764     754   1.3 %   783  
  ATM Processing Fees   622     646   -3.7 %   640  
  Other Service Fees   445     416   6.9 %   463  
  Financial Services Commissions   66     103   -35.9 %   78  
  Life Insurance Gains   1     7   n/m   278  
  Other Noninterest Income   624     648   -3.7 %   706  
    Total Noninterest Income $10,992   $10,463   5.1 % $11,281  
           
  Operating Ratios:        
    Total Revenue (FTE) $80,730   $79,618   1.4 % $83,373  
    Noninterest Income/Revenue (FTE)   13.6 %   13.1 %     13.5 %
    Service Charges/Avg. Deposits (a)   0.25 %   0.22 %     0.26 %
    Total Revenue (FTE) Per Avg.        
  Common Share (a) $12.01   $11.74   2.3 % $12.41  
           
        %  
    12/31’23YTD 12/31’22YTD Change  
           
  Service Charges on Deposit Accounts $14,169   $14,490   -2.2 %  
  Merchant Processing Services   11,280     11,623   -3.0 %  
  Debit Card Fees (1)   7,185     7,879   -8.8 %  
  Trust Fees   3,122     3,216   -2.9 %  
  ATM Processing Fees   2,618     2,160   21.2 %  
  Other Service Fees   1,765     1,808   -2.4 %  
  Financial Services Commissions   336     417   -19.4 %  
  Life Insurance Gains   279     930   n/m    
  Securities Losses   (125 )   –   n/m    
  Other Noninterest Income   2,893     2,598   11.4 %  
    Total Noninterest Income $43,522   $45,121   -3.5 %  
           
  Operating Ratios:        
    Total Revenue (FTE) $325,195   $266,896   21.8 %  
    Noninterest Income/Revenue (FTE)   13.4 %   16.9 %    
    Service Charges/Avg. Deposits   0.24 %   0.23 %    
    Total Revenue (FTE) Per Avg.        
  Common Share $12.18   $9.92   22.7 %  
           
7. Noninterest Expense.        
    (dollars in thousands)
        %  
    Q4’2023 Q4’2022 Change Q3’2023
           
  Salaries & Benefits $12,156   $11,482   5.9 % $11,820  
  Occupancy and Equipment   4,958     5,218   -5.0 %   5,065  
  Outsourced Data Processing   2,441     2,390   2.1 %   2,473  
  Limited Partnership Operating Losses   1,440     1,431   0.6 %   1,440  
  Professional Fees   389     574   -32.2 %   401  
  Courier Service   681     700   -2.7 %   745  
  Other Noninterest Expense   3,452     3,295   4.8 %   3,706  
    Total Noninterest Expense $25,517   $25,090   1.7 % $25,650  
           
  Operating Ratios:        
    Noninterest Expense/ Avg. Earning Assets (a)   1.62 %   1.44 %     1.58 %
    Noninterest Expense/Revenues (FTE)   31.6 %   31.5 %     30.8 %
           
        %  
    12/31’23YTD 12/31’22YTD Change  
           
  Salaries & Benefits $47,871   $46,125   3.8 %  
  Occupancy and Equipment   20,520     19,884   3.2 %  
  Outsourced Data Processing   9,846     9,684   1.7 %  
  Limited Partnership Operating Losses   5,754     5,724   0.5 %  
  Professional Fees   1,751     2,628   -33.4 %  
  Courier Service   2,652     2,614   1.5 %  
  Other Noninterest Expense   14,822     12,702   16.7 %  
    Total Noninterest Expense $103,216   $99,361   3.9 %  
           
  Operating Ratios:        
    Noninterest Expense/ Avg. Earning Assets   1.60 %   1.42 %    
    Noninterest Expense/Revenues (FTE)   31.7 %   37.2 %    
           
8. Allowance for Credit Losses.        
    (dollars in thousands)
        %  
    Q4’2023 Q4’2022 Change Q3’2023
           
  Average Total Loans $873,635   $964,287   -9.4 % $903,854  
           
  Beginning of Period Allowance for        
  Credit Losses on Loans (ACLL) $17,744   $21,218   -16.4 % $18,480  
  Provision for Credit Losses   –     6   n/m     400  
  Net ACLL Losses   (877 )   (940 ) -6.7 %   (1,136 )
  End of Period ACLL $16,867   $20,284   -16.8 % $17,744  
           
  Gross ACLL Recoveries / Gross ACLL Losses   60 %   44 %     46 %
           
  Net ACLL Losses /        
  Avg. Total Loans (a)   0.40 %   0.39 %     0.50 %
           
        %  
    12/31’23YTD 12/31’22YTD Change  
           
  Average Total Loans $912,316   $997,964   -8.6 %  
           
  Beginning of Period ACLL $20,284   $23,514   -13.7 %  
  (Reversal of) Provision for Credit Losses (2)   (1,150 )   6   n/m    
  Net ACLL Losses   (2,267 )   (3,236 ) -29.9 %  
  End of Period ACLL $16,867   $20,284   -16.8 %  
           
  Gross ACLL Recoveries / Gross ACLL Losses   72 %   48 %    
           
  Net ACLL Losses / Avg. Total Loans   0.25 %   0.32 %    
           
    (dollars in thousands)
        %  
    12/31/23 12/31/22 Change 9/30/23
  Allowance for Credit Losses on Loans $16,867   $20,284   -16.8 % $17,744  
  Allowance for Credit Losses on        
  Held to Maturity Securities   1     1   -33.0 %   1  
  Total Allowance for Credit Losses $16,868   $20,285   -16.8 % $17,745  
           
  Allowance for Unfunded        
  Credit Commitments $201   $201   0.0 % $201  
           
9. Credit Quality.        
    (dollars in thousands)
        %  
    12/31/23 12/31/22 Change 9/30/23
  Nonperforming Loans:        
     Nonperforming Nonaccrual Loans $401   $146   174.7 % $205  
     Performing Nonaccrual Loans   2     –   n/m     4  
  Total Nonaccrual Loans   403     146   176.0 %   209  
  90+ Days Past Due Accruing Loans   388     628   -38.2 %   1,029  
  Total Nonperforming Loans $791   $774   2.2 % $1,238  
           
  Total Loans Outstanding $866,602   $958,488   -9.6 % $885,850  
           
  Total Assets   6,364,592     6,950,317   -8.4 %   6,567,288  
           
  Loans:        
  Allowance for Credit Losses on Loans $16,867   $20,284   -16.8 % $17,744  
  Allowance for Credit Losses on Loans /        
    Loans   1.95 %   2.12 %     2.00 %
  Nonperforming Loans/Total Loans   0.09 %   0.08 %     0.14 %
           
10. Liquidity.        
           
  At December 31, 2023, the Company had $190,314 thousand in cash balances. During the twelve months ending December 31, 2024, the Company expects to receive $265,000 thousand in principal payments from its debt securities. If additional operational liquidity is required, the Company can pledge debt securities as collateral for borrowing purposes; at December 31, 2023, the Company’s debt securities which qualify as collateral for borrowing totaled $3,915,867 thousand. In the ordinary course of business, the Company pledges debt securities as collateral for certain depository customers; at December 31, 2023, the Company had pledged $708,439 thousand in debt securities for depository customers. In the ordinary course of business, the Company pledges debt securities as collateral for borrowing from the Federal Reserve Bank; at December 31, 2023, the Company had pledged $996,935 thousand in debt securities at the Federal Reserve Bank. During the Twelve months ended December 31, 2023, the Company’s average borrowings from the Federal Reserve Bank and other correspondent banks were $-0- thousand, and at December 31, 2023, the Company’s borrowings from the Federal Reserve Bank and other correspondent banks were $-0- thousand. At December 31, 2023, the Company’s estimated unpledged collateral qualifying debt securities totaled $1,945,176 thousand. Debt securities eligible as collateral are shown at market value unless otherwise noted.
           
          (in thousands)
          12/31/23
  Debt Securities Eligible as Collateral:        
  Corporate Securities       $2,614,904  
  Collateralized Loan Obligations rated AAA         517,796  
  Obligations of States and Political Subdivisions             142,178  
  Agency Mortgage Backed Securities         314,156  
  Securities of U.S. Government Sponsored Entities (Par Value)                 326,833  
        Total Debt Securities Eligible as Collateral       $3,915,867  
           
  Debt Securities Pledged as Collateral:        
  Deposits by Public Entities       ($708,439 )
  Short-Term Borrowed Funds (Deposit Sweep)             (259,616 )
  Other         (5,701 )
        Total Debt Securities Pledged as Collateral       ($973,756 )
           
  Debt Securities Pledged at the Federal Reserve Bank           ($996,935 )
           
  Estimated Debt Securities Available to Pledge       $1,945,176  
           
11. Capital.        
    (in thousands, except per-share amounts)
        %  
    12/31/23 12/31/22 Change 9/30/23
           
  Shareholders’ Equity $772,894   $602,110   28.4 % $648,423  
  Total Assets   6,364,592     6,950,317   -8.4 %   6,567,288  
  Shareholders’ Equity/        
     Total Assets   12.14 %   8.66 %     9.87 %
  Shareholders’ Equity/        
     Total Loans   89.19 %   62.82 %     73.20 %
  Tangible Common Equity Ratio   10.43 %   7.03 %     8.17 %
  Common Shares Outstanding   26,671     26,913   -0.9 %   26,649  
  Common Equity Per Share $28.98   $22.37   29.5 % $24.33  
  Market Value Per Common Share   56.41     59.01   -4.4 %   43.25  
           
    (shares in thousands)
        %  
    Q4’2023 Q4’2022 Change Q3’2023
  Share Repurchase Programs:        
    Total Shares Repurchased / Canceled   –     –   n/m   –  
    Average Repurchase Price $ –   $ –   n/m $ –  
    Net Shares Issued   (22 )   (2 ) n/m   (1 )
           
        %  
    12/31’23YTD 12/31’22YTD Change  
           
    Total Shares Repurchased   274     3   n/m  
    Average Repurchase Price $50.11   $58.66   n/m  
    Net Shares Repurchased (Issued)   242     (47 ) n/m  
           
12. Period-End Balance Sheets.        
    (unaudited, dollars in thousands)
        %  
    12/31/23 12/31/22 Change 9/30/23
  Assets:        
    Cash and Due from Banks $190,314   $294,236   -35.3 % $420,550  
           
    Debt Securities Available for Sale:        
      Corporate Securities   1,909,548     2,099,955   -9.1 %   1,814,424  
      Collateralized Loan Obligations   1,484,597     1,572,883   -5.6 %   1,503,078  
      Agency Mortgage Backed Securities   239,454     286,048   -16.3 %   239,728  
      Securities of U.S. Government sponsored        
        entities   294,919     290,853   1.4 %   279,364  
      Obligations of States and Political        
        Subdivisions   71,283     82,004   -13.1 %   69,639  
        Total Debt Securities Available for Sale   3,999,801     4,331,743   -7.7 %   3,906,233  
           
    Debt Securities Held to Maturity:        
      Agency Mortgage Backed Securities   78,565     104,852   -25.1 %   84,347  
      Corporate Securities   728,650     721,854   0.9 %   726,951  
      Obligations of States and Political        
        Subdivisions (3)   71,181     89,207   -20.2 %   77,558  
        Total Debt Securities Held to Maturity (3)   878,396     915,913   -4.1 %   888,856  
           
    Loans   866,602     958,488   -9.6 %   885,850  
    Allowance For Credit Losses on Loans   (16,867 )   (20,284 ) -16.8 %   (17,744 )
      Total Loans, net   849,735     938,204   -9.4 %   868,106  
           
    Premises and Equipment, net   27,016     28,819   -6.3 %   27,490  
    Identifiable Intangibles, net   347     583   -40.4 %   404  
    Goodwill   121,673     121,673   0.0 %   121,673  
    Other Assets   297,310     319,146   -6.8 %   333,976  
           
        Total Assets $6,364,592   $6,950,317   -8.4 % $6,567,288  
           
  Liabilities and Shareholders’ Equity:        
    Deposits:        
      Noninterest-Bearing $2,605,844   $2,947,277   -11.6 % $2,723,403  
      Interest-Bearing Transaction   1,072,233     1,273,143   -15.8 %   1,138,220  
      Savings   1,699,388     1,874,115   -9.3 %   1,732,849  
      Time   96,802     130,755   -26.0 %   104,541  
        Total Deposits   5,474,267     6,225,290   -12.1 %   5,699,013  
           
    Short-Term Borrowed Funds   58,162     57,792   0.6 %   115,341  
    Other Liabilities   59,269     65,125   -9.0 %   104,511  
        Total Liabilities   5,591,698     6,348,207   -11.9 %   5,918,865  
           
  Shareholders’ Equity:        
    Common Equity:        
      Paid-In Capital   473,171     475,121   -0.4 %   471,862  
      Accumulated Other        
        Comprehensive Loss   (190,282 )   (256,105 ) -25.7 %   (285,709 )
      Retained Earnings   490,005     383,094   27.9 %   462,270  
        Total Shareholders’ Equity   772,894     602,110   28.4 %   648,423  
           
        Total Liabilities and        
        Shareholders’ Equity $6,364,592   $6,950,317   -8.4 % $6,567,288  
           
13. Income Statements.        
    (unaudited, in thousands except per-share amounts)
        %  
    Q4’2023 Q4’2022 Change Q3’2023
  Interest & Fee Income:        
  Loans $11,606   $12,201   -4.9 % $11,925  
  Equity Securities   174     153   13.7 %   152  
  Debt Securities Available for Sale   47,783     45,216   5.7 %   47,994  
  Debt Securities Held to Maturity   8,799     9,061   -2.9 %   8,848  
  Interest-Bearing Cash   2,690     2,567   4.8 %   3,929  
       Total Interest & Fee Income   71,052     69,198   2.7 %   72,848  
           
  Interest Expense:        
    Transaction Deposits   128     96   33.3 %   131  
    Savings Deposits   1,431     280   411.1 %   886  
    Time Deposits   76     87   -12.6 %   78  
    Short-Term Borrowed Funds   44     12   266.7 %   38  
      Total Interest Expense   1,679     475   253.5 %   1,133  
           
  Net Interest Income   69,373     68,723   0.9 %   71,715  
           
  Provision for Credit Losses   –     –   n/m     400  
           
  Noninterest Income:        
    Service Charges on Deposit Accounts   3,540     3,484   1.6 %   3,705  
    Merchant Processing Services   2,863     2,701   6.0 %   2,911  
    Debit Card Fees   2,067     1,704   21.3 %   1,717  
    Trust Fees   764     754   1.3 %   783  
    ATM Processing Fees   622     646   -3.7 %   640  
    Other Service Fees   445     416   6.9 %   463  
    Financial Services Commissions   66     103   -35.9 %   78  
    Life Insurance Gains   1     7   n/m     278  
    Other Noninterest Income   624     648   -3.7 %   706  
      Total Noninterest Income   10,992     10,463   5.1 %   11,281  
           
  Noninterest Expense:        
    Salaries and Related Benefits   12,156     11,482   5.9 %   11,820  
    Occupancy and Equipment   4,958     5,218   -5.0 %   5,065  
    Outsourced Data Processing   2,441     2,390   2.1 %   2,473  
    Limited Partnership Operating Losses   1,440     1,431   0.6 %   1,440  
    Professional Fees   389     574   -32.2 %   401  
    Courier Service   681     700   -2.7 %   745  
    Other Noninterest Expense   3,452     3,295   4.8 %   3,706  
      Total Noninterest Expense   25,517     25,090   1.7 %   25,650  
           
  Income Before Income Taxes   54,848     54,096   1.4 %   56,946  
  Income Tax Provision   15,380     14,752   4.3 %   15,345  
  Net Income $39,468   $39,344   0.3 % $41,601  
           
  Average Common Shares Outstanding   26,662     26,912   -0.9 %   26,648  
  Diluted Average Common Shares Outstanding   26,664     26,924   -1.0 %   26,650  
           
  Per Common Share Data:        
    Basic Earnings $1.48   $1.46   1.4 % $1.56  
    Diluted Earnings   1.48     1.46   1.4 %   1.56  
    Dividends Paid   0.44     0.42   4.8 %   0.44  
        %  
    12/31’23YTD 12/31’22YTD Change  
  Interest & Fee Income:        
  Loans $47,116   $49,682   -5.2 %  
  Equity Securities   630     537   17.3 %  
  Debt Securities Available for Sale   190,039     144,646   31.4 %  
  Debt Securities Held to Maturity   35,557     19,101   86.2 %  
  Interest-Bearing Cash   10,671     7,790   37.0 %  
       Total Interest & Fee Income   284,013     221,756   28.1 %  
           
  Interest Expense:        
    Transaction Deposits   457     369   23.8 %  
    Savings Deposits   2,993     1,141   162.3 %  
    Time Deposits   320     336   -4.8 %  
    Short-Term Borrowed Funds   120     79   51.9 %  
       Total Interest Expense   3,890     1,925   102.1 %  
           
  Net Interest Income   280,123     219,831   27.4 %  
           
  Reversal of Provision for Credit Losses (2)   (1,150 )   –   n/m    
           
  Noninterest Income:        
    Service Charges on Deposit Accounts   14,169     14,490   -2.2 %  
    Merchant Processing Services   11,280     11,623   -3.0 %  
    Debit Card Fees (1)   7,185     7,879   -8.8 %  
    Trust Fees   3,122     3,216   -2.9 %  
    ATM Processing Fees   2,618     2,160   21.2 %  
    Other Service Fees   1,765     1,808   -2.4 %  
    Financial Services Commissions   336     417   -19.4 %  
    Life Insurance Gains   279     930   n/m    
    Securities Losses   (125 )   –   n/m    
    Other Operating   2,893     2,598   11.4 %  
      Total Noninterest Income   43,522     45,121   -3.5 %  
           
  Noninterest Expense:        
    Salaries and Related Benefits   47,871     46,125   3.8 %  
    Occupancy and Equipment   20,520     19,884   3.2 %  
    Outsourced Data Processing   9,846     9,684   1.7 %  
    Limited Partnership Operating Losses   5,754     5,724   0.5 %  
    Professional Fees   1,751     2,628   -33.4 %  
    Courier Service   2,652     2,614   1.5 %  
    Other Operating   14,822     12,702   16.7 %  
      Total Noninterest Expense   103,216     99,361   3.9 %  
           
  Income Before Income Taxes   221,579     165,591   33.8 %  
  Income Tax Provision   59,811     43,557   37.3 %  
  Net Income $161,768   $122,034   32.6 %  
           
  Average Common Shares Outstanding   26,703     26,895   -0.7 %  
  Diluted Average Common Shares Outstanding   26,706     26,907   -0.7 %  
           
  Per Common Share Data:        
  Basic Earnings $6.06   $4.54   33.5 %  
  Diluted Earnings   6.06     4.54   33.5 %  
  Dividends Paid   1.72     1.68   2.4 %  
           
           
  Footnotes and Abbreviations:        
           
  (1) The Company received a $1.2 million reconciling payment from a payments network in the first quarter 2022.
           
  (2) A recovery of a previously charged off loan in the first quarter 2023 resulted in a $1,550 thousand reversal of the allowance for credit loss provision in the first quarter 2023.
           
  (3) Debt Securities Held To Maturity and Obligations of States and Political Subdivisions are net of related reserve for expected credit losses of $1 thousand at December 31, 2023, September 30, 2023 and December 31, 2022.
           
  (FTE) Fully Taxable Equivalent. The Company presents its net interest margin and net interest income on a FTE basis using the current statutory federal tax rate. Management believes the FTE basis is valuable to the reader because the Company’s loan and investment securities portfolios contain a portion of municipal loans and securities that are federally tax exempt. The Company’s tax exempt loans and securities composition may not be similar to that of other banks, therefore in order to reflect the impact of the federally tax exempt loans and securities on the net interest margin and net interest income for comparability with other banks, the Company presents its net interest margin and net interest income on a FTE basis.
           
  (a) Annualized        
           

 


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