Westamerica Bancorporation Reports First Quarter 2021 Financial Results

Fairfield, California, UNITED STATES


SAN RAFAEL, Calif., April 15, 2021 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the first quarter 2021 of $20.1 million and diluted earnings per common share ("EPS") of $0.75. First quarter 2021 results include “make-whole” interest income on corporate bonds redeemed prior to maturity, which increased EPS $0.02. These results compare to net income of $23.8 million and EPS of $0.89 for the fourth quarter 2020, which included a gain on sale of a closed branch building, “make-whole” interest income on corporate bonds redeemed before maturity, and a customary adjustment to the tax provision for filed 2019 tax returns, which increased EPS $0.15.

“Westamerica continues to support our customers during the pandemic. We have kept our branches open to continue providing full-service, and during the first quarter 2021, we originated $91 million in loans under the second round of the Paycheck Protection Program. Operating expenses have remained stable with first quarter 2020 pre-pandemic levels, and in the first quarter 2021 operating expenses represented only 47 percent of revenues on a fully-taxable equivalent basis. The predominance of checking and savings accounts within Westamerica’s deposit base resulted in a very low 0.03 percent annualized cost of funding our loan and bond portfolios during the first quarter 2021. Credit quality remained stable with nonperforming loans of $4.1 million at March 31, 2021,” said Chairman, President and CEO David Payne. “First quarter 2021 results generated an annualized 11.1 percent return on average common equity, and shareholders were paid a $0.41 per common share dividend during the quarter,” concluded Payne.

Net interest income on a fully-taxable equivalent (FTE) basis was $42.6 million for the first quarter 2021, including “make-whole” interest income on corporate bonds redeemed prior to maturity of $700 thousand. First quarter 2021 net interest income (FTE) compares to $43.3 million for the fourth quarter 2020, which included “make-whole” interest income on corporate bonds redeemed prior to maturity of $1.9 million. Average total deposits grew $92 million from the fourth quarter 2020 to the first quarter 2021. Checking and savings deposits represented ninety-seven percent of the Company’s average deposit base during the first quarter 2021 resulting in a 0.03 percent annualized cost of funding interest-earning assets.

At March 31, 2021, nonperforming loans totaled $4.1 million and the allowance for credit losses on loans was $23.5 million. The Company continues to work with loan customers requesting deferral of loan payments due to economic weakness caused by the pandemic. At March 31, 2021, loans with deferred payments included consumer loans totaling $1.8 million and one hospitality industry commercial real estate loan totaling $2.3 million (the commercial real estate loan borrower re-commenced payments on April 1, 2021).

Noninterest income for the first quarter 2021 totaled $10.2 million, compared to noninterest income for the fourth quarter 2020 of $14.0 million, which included a $3.5 million gain on sale of a closed branch building.

Noninterest expense for the first quarter 2021 was $24.9 million compared to $24.5 million for the fourth quarter 2020, and $24.7 million for the first quarter 2020.

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 & Treasurer
707-863-6840
investments@westamerica.com


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, 2020 filed on Form 10-K and quarterly report for the quarter ended September 30, 2020 filed on Form 10-Q, describe some of these factors, including certain credit, interest rate, operational, liquidity and market risks associated with the Company's business and operations. Other factors described in these reports include changes in business and economic conditions, competition, fiscal and monetary policies, disintermediation, cyber security risks, legislation including the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2011, the Sarbanes-Oxley Act of 2002 and the Gramm-Leach-Bliley Act of 1999, and mergers and acquisitions.

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 April 15, 2021  
WESTAMERICA BANCORPORATION     
FINANCIAL HIGHLIGHTS     
March 31, 2021     
       
1. Net Income Summary.     
  (in thousands except per-share amounts) 
    %  
  Q1'2021Q1'2020ChangeQ4'2020 
       
 Net Interest and Fee Income (FTE)$42,583 $40,547 5.0%$43,292  
 Provision for Credit Losses -  4,300 n/m     -  
 Noninterest Income 10,189  11,648 -12.5% 13,959  
 Noninterest Expense 24,906  24,664 1.0% 24,545  
 Income Before Taxes (FTE) 27,866  23,231 20.0% 32,706  
 Income Tax Provision (FTE) 7,719  6,269 23.1% 8,868  
 Net Income$20,147 $16,962 18.8%$23,838  
       
 Average Common Shares Outstanding 26,821  27,068 -0.9% 26,838  
 Diluted Average Common Shares 26,842  27,139 -1.1% 26,849  
       
 Operating Ratios:     
 Basic Earnings Per Common Share$0.75 $0.63 19.0%$0.89  
 Diluted Earnings Per Common Share 0.75  0.63 19.0% 0.89  
 Return On Assets (a) 1.23% 1.21%  1.44% 
 Return On Common Equity (a) 11.1% 9.7%  13.2% 
 Net Interest Margin (FTE) (a) 2.74% 3.10%  2.81% 
 Efficiency Ratio (FTE) 47.2% 47.3%  42.9% 
       
 Dividends Paid Per Common Share$0.41 $0.41 0.0%$0.41  
 Common Dividend Payout Ratio  55% 66%  46% 
       
2. Net Interest Income.     
  (dollars in thousands) 
    %  
  Q1'2021Q1'2020ChangeQ4'2020 
       
 Interest and Fee Income (FTE)$43,058 $40,989 5.0%$43,773  
 Interest Expense 475  442 7.5% 481  
 Net Interest and Fee Income (FTE)$42,583 $40,547 5.0%$43,292  
       
 Average Earning Assets$6,244,622 $5,242,142 19.1%$6,156,749  
 Average Interest-     
    Bearing Liabilities 3,130,227  2,648,581 18.2% 3,034,240  
       
 Yield on Earning Assets (FTE) (a) 2.77% 3.13%  2.84% 
 Cost of Funds (a) 0.03% 0.03%  0.03% 
 Net Interest Margin (FTE) (a) 2.74% 3.10%  2.81% 
 Interest Expense/     
    Interest-Bearing Liabilities (a) 0.06% 0.07%  0.06% 
 Net Interest Spread (FTE) (a) 2.71% 3.06%  2.78% 
       
3. Loans & Other Earning Assets.     
  (average volume, dollars in thousands) 
    %  
  Q1'2021Q1'2020ChangeQ4'2020 
       
 Total Assets$6,650,164 $5,655,460 17.6%$6,562,753  
 Total Earning Assets 6,244,622  5,242,142 19.1% 6,156,749  
 Total Loans 1,251,540  1,123,934 11.4% 1,286,480  
   Total Commercial Loans 395,473  223,383 77.0% 426,564  
     Paycheck Protection Program (PPP) Loans 188,971  - n/m     227,828  
     Commercial Loans 206,502  223,383 -7.6% 198,736  
   Commercial RE Loans  559,191  579,743 -3.5% 561,394  
   Consumer Loans 296,876  320,808 -7.5% 298,522  
 Total Investment Securities 4,440,621  3,845,885 15.5% 4,430,592  
   Debt Securities Available For Sale 3,947,549  3,135,743 25.9% 3,884,451  
   Debt Securities Held To Maturity 493,072  710,142 -30.6% 546,141  
 Total Interest-Bearing Cash 552,461  272,323 102.9% 439,677  
       
 Loans/Deposits 21.8% 23.3%  22.7% 
       
4. Deposits, Other Interest-Bearing Liabilities & Equity.    
  (average volume, dollars in thousands) 
    %  
  Q1'2021Q1'2020ChangeQ4'2020 
       
 Total Deposits$5,748,070 $4,828,988 19.0%$5,655,768  
   Noninterest Demand  2,713,632  2,222,737 22.1% 2,736,348  
   Interest-Bearing Transaction 1,130,760  941,720 20.1% 1,071,576  
   Savings 1,746,815  1,496,362 16.7% 1,688,031  
   Time greater than $100K 71,241  73,849 -3.5% 71,306  
   Time less than $100K 85,622  94,320 -9.2% 88,507  
 Total Short-Term Borrowings 95,575  42,330 125.8% 114,820  
 Other Borrowed Funds 214  - n/m     -  
 Shareholders' Equity 735,496  705,330 4.3% 720,473  
       
 Demand Deposits/     
    Total Deposits 47.2% 46.0%  48.4% 
 Transaction & Savings      
    Deposits / Total Deposits 97.3% 96.5%  97.2% 
       
5. Interest Yields Earned & Rates Paid.     
  (dollars in thousands)  
  Q1'2021  
  AverageIncome/Yield (a) /  
  VolumeExpenseRate (a)  
       
 Interest & Fee Income Earned     
   Total Earning Assets (FTE)$6,244,622 $43,058 2.77%  
   Total Loans (FTE) 1,251,540  14,684 4.76%  
     Total Commercial Loans (FTE) 395,473  4,005 4.11%  
       PPP Loans 188,971  1,853 3.98%  
       Commercial Loans (FTE) 206,502  2,152 4.23%  
     Commercial RE Loans  559,191  7,341 5.32%  
     Consumer Loans 296,876  3,338 4.56%  
   Total Investments (FTE) 4,440,621  28,236 2.54%  
   Total Interest-Bearing Cash 552,461  138 0.10%  
       
 Interest Expense Paid     
   Total Earning Assets  6,244,622  475 0.03%  
   Total Interest-Bearing Liabilities 3,130,227  475 0.06%  
   Total Interest-Bearing Deposits 3,034,438  459 0.06%  
     Interest-Bearing Transaction 1,130,760  89 0.03%  
     Savings 1,746,815  250 0.06%  
     Time less than $100K 85,622  42 0.20%  
     Time greater than $100K 71,241  78 0.44%  
   Total Short-Term Borrowings  95,575  16 0.07%  
 Other Borrowed Funds 214  - 0.35%  
       
 Net Interest Income and      
 Margin (FTE) $42,583 2.74%  
       
  Q1'2020  
  AverageIncome/Yield (a) /  
  VolumeExpenseRate (a)  
       
 Interest & Fee Income Earned     
   Total Earning Assets (FTE)$5,242,142 $40,989 3.13%  
   Total Loans (FTE) 1,123,934  13,910 4.98%  
     Commercial Loans (FTE) 223,383  2,776 5.00%  
     Commercial RE Loans  579,743  7,599 5.27%  
     Consumer Loans 320,808  3,535 4.43%  
   Total Investments (FTE) 3,845,885  26,223 2.73%  
   Total Interest-Bearing Cash 272,323  856 1.24%  
       
 Interest Expense Paid     
   Total Earning Assets  5,242,142  442 0.03%  
   Total Interest-Bearing Liabilities 2,648,581  442 0.07%  
   Total Interest-Bearing Deposits 2,606,251  434 0.07%  
     Interest-Bearing Transaction 941,720  84 0.04%  
     Savings 1,496,362  217 0.06%  
     Time less than $100K 94,320  54 0.23%  
     Time greater than $100K 73,849  79 0.43%  
   Total Short-Term Borrowings  42,330  8 0.07%  
       
 Net Interest Income and     
 Margin (FTE) $40,547 3.10%  
       
6. Noninterest Income.     
  (dollars in thousands except per-share amounts) 
    %  
  Q1'2021Q1'2020ChangeQ4'2020 
       
 Service Charges on Deposits$3,304 $4,248 -22.2%$3,452  
 Merchant Processing Services 2,560  2,358 8.6% 2,713  
 Debit Card Fees 1,601  1,468 9.0% 1,643  
 Trust Fees 801  777 3.1% 765  
 ATM Processing Fees 601  579 3.8% 570  
 Other Service Fees 469  506 -7.2% 457  
 Financial Services Commissions 70  125 -44.0% 66  
 Gains on Sales of Real Property -  - n/m     3,536  
 Other Noninterest Income (5) 783  1,587 -50.7% 757  
 Total Noninterest Income$10,189 $11,648 -12.5%$13,959  
       
   Total Revenue (FTE)$52,772 $52,195 1.1%$57,251  
   Noninterest Income/Revenue (FTE) 19.3% 22.3%  24.4% 
   Service Charges/Avg. Deposits (a) 0.23% 0.35%  0.24% 
   Total Revenues (FTE) Per Avg.      
 Common Share (a)$7.98 $7.76 2.9%$8.49  
       
7. Noninterest Expense.     
  (dollars in thousands) 
    %  
  Q1'2021Q1'2020ChangeQ4'2020 
       
 Salaries & Benefits$12,665 $13,018 -2.7%$12,291  
 Occupancy and Equipment 4,880  4,932 -1.1% 4,900  
 Outsourced Data Processing 2,390  2,405 -0.6% 2,359  
 Professional Fees 942  389 142.2% 722  
 Courier Service 504  491 2.6% 502  
 Amortization of      
   Identifiable Intangibles 69  73 -5.5% 69  
 Other Noninterest Expense 3,456  3,356 3.0% 3,702  
 Total Noninterest Expense$24,906 $24,664 1.0%$24,545  
       
 Noninterest Expense/     
    Avg. Earning Assets (a) 1.62% 1.89%  1.59% 
 Noninterest Expense/Revenues (FTE) 47.2% 47.3%  42.9% 
       
8. Allowance for Credit Losses.     
  (dollars in thousands) 
    %  
  Q1'2021Q1'2020ChangeQ4'2020 
       
 Average Total Loans$1,251,540 $1,123,934 11.4%$1,286,480  
       
 Beginning of Period Allowance for     
 Credit Losses on Loans (ACLL)$23,854 $19,484 22.4%$24,142  
 Adoption of ASU 2016-13(1) -  2,017 n/m     -  
 Beginning of Period ACLL  23,854  21,501 10.9% 24,142  
 Provision for Credit Losses  -  4,300 n/m     7  
 Net ACLL Losses (371) (997)-62.8% (295) 
 End of Period ACLL$23,483 $24,804 -5.3%$23,854  
 Gross ACLL Recoveries /     
 Gross ACLL Losses  60% 37%  69% 
 Net ACLL Losses /      
 Avg. Total Loans (a)  0.12% 0.36%  0.09% 
       
  (dollars in thousands) 
    %  
  3/31/213/31/20Change12/31/20 
 Allowance for Credit Losses on Loans$23,483 $24,804 -5.3%$23,854  
 Allowance for Credit Losses on     
 HTM Securities (2) 9  16 -44.6% 9  
 Total Allowance for Credit Losses$23,492 $24,820 -5.4%$23,863  
       
 Allowance for Unfunded     
 Credit Commitments 101  53 90.0% 101  
       
9. Credit Quality.     
  (dollars in thousands) 
    %  
  3/31/213/31/20Change12/31/20 
       
 Nonperforming Loans:     
    Nonperforming Nonaccrual$402 $419 -4.1%$526  
    Performing Nonaccrual 3,569  3,933 -9.3% 3,803  
 Total Nonaccrual Loans 3,971  4,352 -8.8% 4,329  
 90+ Days Past Due Accruing Loans 132  178 -25.8% 450  
 Total 4,103  4,530 -9.4% 4,779  
 Repossessed Loan Collateral  -  43 n/m     -  
  Total Nonperforming Assets$4,103 $4,573 -10.3%$4,779  
       
 Total Loans Outstanding $1,293,756 $1,121,243 15.4%$1,256,243  
       
 Total Assets  6,912,481  5,628,126 22.8% 6,747,931  
       
 Loans:     
 Allowance for Credit Losses on Loans$23,483 $24,804 -5.3%$23,854  
 Allowance for Credit Losses on Loans /     
 Loans 1.82% 2.21%  1.90% 
 Nonperforming Loans/Total Loans 0.32% 0.40%  0.38% 
       
10. Capital.     
  (in thousands, except per-share amounts) 
    %  
  3/31/213/31/20Change12/31/20 
       
 Shareholders' Equity$812,132 $705,546 15.1%$844,809  
 Total Assets 6,912,481  5,628,126 22.8% 6,747,931  
 Shareholders' Equity/     
    Total Assets 11.75% 12.54%  12.52% 
 Shareholders' Equity/     
    Total Loans 62.77% 62.93%  67.25% 
 Tangible Common Equity Ratio 10.15% 10.58%  10.90% 
 Common Shares Outstanding 26,864  26,932 -0.3% 26,807  
 Common Equity Per Share$30.23 $26.20 15.4%$31.51  
 Market Value Per Common Share 62.78  58.78 6.8% 55.29  
       
  (shares in thousands) 
    %  
  Q1'2021Q1'2020ChangeQ4'2020 
       
 Total Shares Repurchased 4  180 n/m     91  
   Average Repurchase Price$61.09 $51.52 n/m    $52.22  
 Net Shares (Issued) Repurchased (57) 130 n/m     91  
       
11. Period-End Balance Sheets.     
  (unaudited, dollars in thousands) 
    %  
  3/31/213/31/20Change12/31/20 
 Assets:     
   Cash and Due from Banks$866,457 $304,628 184.4%$621,275  
       
   Investment Securities:     
      Debt Securities Available For Sale 3,990,570  3,210,689 24.3% 4,063,185  
      Debt Securities Held To Maturity (3) 469,259  681,821 -31.2% 515,589  
       
   Loans 1,293,756  1,121,243 15.4% 1,256,243  
   Allowance For Credit Losses on Loans (23,483) (24,804)-5.3% (23,854) 
   Total Loans, net 1,270,273  1,096,439 15.9% 1,232,389  
       
   Other Real Estate Owned -  43 n/m     -  
   Premises and Equipment, net 32,216  35,403 -9.0% 32,813  
   Identifiable Intangibles, net 1,035  1,318 -21.5% 1,105  
   Goodwill  121,673  121,673 0.0% 121,673  
   Other Assets 160,998  176,112 -8.6% 159,903  
       
 Total Assets$6,912,481 $5,628,126 22.8%$6,747,931  
       
 Liabilities and Shareholders' Equity:     
   Deposits:     
     Noninterest-Bearing$2,798,542 $2,183,283 28.2%$2,725,177  
     Interest-Bearing Transaction 1,179,484  936,516 25.9% 1,102,601  
     Savings 1,791,636  1,514,431 18.3% 1,703,812  
     Time 154,171  165,196 -6.7% 156,389  
   Total Deposits 5,923,833  4,799,426 23.4% 5,687,979  
       
   Short-Term Borrowed Funds 95,479  52,664 81.3% 102,545  
   Other Borrowed Funds 1,681  - n/m     -  
   Other Liabilities 79,356  70,490 12.6% 112,598  
 Total Liabilities 6,100,349  4,922,580 23.9% 5,903,122  
       
 Shareholders' Equity:     
   Common Equity:     
     Paid-In Capital 469,885  466,472 0.7% 466,041  
     Accumulated Other     
       Comprehensive Income 68,901  171 n/m     114,412  
     Retained Earnings 273,346  238,903 14.4% 264,356  
 Total Shareholders' Equity 812,132  705,546 15.1% 844,809  
       
 Total Liabilities and      
    Shareholders' Equity$6,912,481 $5,628,126 22.8%$6,747,931  
       
12. Income Statements.     
  (unaudited, in thousands except per-share amounts) 
    %  
  Q1'2021Q1'2020ChangeQ4'2020 
 Interest & Fee Income:     
   Loans$14,581 $13,809 5.6%$14,999  
   Investment Securities:     
     Equity Securities 110  103 6.9% 110  
     Debt Securities Available For Sale (4) 24,889  21,315 16.8% 24,947  
     Debt Securities Held To Maturity 2,598  3,908 -33.5% 2,793  
   Interest-Bearing Cash 138  856 -83.9% 112  
 Total Interest & Fee Income 42,316  39,991 5.8% 42,961  
       
 Interest Expense:     
   Transaction Deposits 89  84 6.5% 90  
   Savings Deposits 250  217 15.0% 246  
   Time Deposits 120  133 -9.9% 126  
   Short-Term Borrowed Funds 16  8 99.9% 19  
 Total Interest Expense 475  442 7.4% 481  
       
 Net Interest Income 41,841  39,549 5.8% 42,480  
       
 Provision for Credit Losses -  4,300 n/m     -  
       
 Noninterest Income:     
   Service Charges  3,304  4,248 -22.2% 3,452  
   Merchant Processing Services 2,560  2,358 8.6% 2,713  
   Debit Card Fees 1,601  1,468 9.0% 1,643  
   Trust Fees 801  777 3.1% 765  
   ATM Processing Fees 601  579 3.8% 570  
   Other Service Fees 469  506 -7.2% 457  
   Financial Services Commissions 70  125 -44.0% 66  
   Gains on Sales of Real Property -  - n/m     3,536  
   Other Noninterest Income (5) 783  1,587 -50.7% 757  
 Total Noninterest Income 10,189  11,648 -12.5% 13,959  
       
 Noninterest Expense:     
   Salaries and Benefits 12,665  13,018 -2.7% 12,291  
   Occupancy and Equipment 4,880  4,932 -1.1% 4,900  
   Outsourced Data Processing 2,390  2,405 -0.6% 2,359  
   Professional Fees 942  389 142.2% 722  
   Courier Service 504  491 2.6% 502  
   Amortization of Identifiable Intangibles 69  73 -5.5% 69  
   Other Noninterest Expense 3,456  3,356 3.0% 3,702  
 Total Noninterest Expense 24,906  24,664 1.0% 24,545  
       
 Income Before Income Taxes 27,124  22,233 22.0% 31,894  
 Income Tax Provision 6,977  5,271 32.4% 8,056  
 Net Income$20,147 $16,962 18.8%$23,838  
       
 Average Common Shares Outstanding 26,821  27,068 -0.9% 26,838  
 Diluted Common Shares Outstanding 26,842  27,139 -1.1% 26,849  
       
 Per Common Share Data:     
   Basic Earnings$0.75 $0.63 19.0%$0.89  
   Diluted Earnings 0.75  0.63 19.0% 0.89  
   Dividends Paid 0.41  0.41 0.0% 0.41  
       
 Footnotes and Abbreviations:     
       
 (1) Effective January 1, 2020, the Company adopted Accounting Standards Update (ASU) 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments ("CECL"), resulting in a period opening adjustment to the allowance for credit losses for loans and held-to-maturity debt securities, other liabilities, deferred tax assets, and shareholders' equity.  
       
 (2) In the fourth quarter 2020, the Company recorded a $7 thousand reversal of provision for credit losses on Debt Securities Held To Maturity and the balance of the allowance for credit losses on Debt Securities Held To Maturity was reduced from $16 thousand at September 30, 2020 to $9 thousand at December 31, 2020. 
       
 (3) The Company adopted ASU 2016-13, effective January 1, 2020. Debt Securities Held To Maturity of $469,259 thousand at March 31, 2021, $515,589 thousand at December 31, 2020 and $681,821 thousand at March 31, 2020 are net of related reserve for expected credit losses of $9 thousand, $9 thousand and $16 thousand, respectively. 
       
 (4) Interest income on Debt Securities Available For Sale included make-whole interest income on called corporate bonds of $700 thousand in the first quarter 2021 and $1.9 million in the fourth quarter 2020. 
       
 (5) The Company received $603 thousand in excess of amounts charged-off in prior periods on a purchased loan during the first quarter 2020, representing the recovery of a purchased loan credit-risk discount.  
       
 (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 relatively large 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     
       
 Certain amounts in prior periods have been reclassified to conform to the current presentation.