Westamerica Bancorporation Reports Second Quarter 2022 Financial Results

| Source: Westamerica Bancorporation Westamerica Bancorporation

SAN RAFAEL, Calif., July 21, 2022 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the second quarter 2022 of $25.3 million and diluted earnings per common share (“EPS”) of $0.94. Second quarter 2022 results compare to net income of $22.6 million and EPS of $0.84 for the first quarter 2022.

“Westamerica’s second quarter 2022 results benefited from the Company’s variable-rate bonds, cash and loans, a valuable deposit base with ninety-eight percent of deposits represented by checking and savings deposits, and well controlled operating expenses. Credit quality remained solid with nonperforming loans of $861 thousand at June 30, 2022,” said Chairman, President and CEO David Payne. “Second quarter 2022 results generated an annualized 12.9% return on average common equity. Shareholders were paid a $0.42 per common share dividend during the second quarter 2022,” concluded Payne.

Net interest income on a fully-taxable equivalent (FTE) basis was $48.0 million for the second quarter 2022, compared to $43.8 million for the first quarter 2022. Interest income on Paycheck Protection Program (“PPP”) loans was $645 thousand for the second quarter 2022, compared to $849 thousand first quarter 2022.

Variable rate assets at June 30, 2022 included $1.6 billion in collateralized loan obligations for which interest rates reset quarterly, and $640 million in interest-bearing cash balances for which the interest rate changes concurrently with Federal Open Market Committee adjustments to the federal funds rate.

At June 30, 2022, nonperforming loans totaled $861 thousand and the allowance for credit losses on loans was $22.3 million.

Noninterest income for the second quarter 2022 totaled $11.3 million, compared to noninterest income for the first quarter 2022 of $11.6 million. Noninterest income for the first quarter 2022 included a $1.2 million reconciling payment from a payments network. Merchant card processing fees increased $751 thousand from the first quarter 2022 to the second quarter 2022.

Noninterest expenses for the second quarter 2022 were $24.6 million compared to $24.9 million for the first quarter 2022; the decline in noninterest expenses was primarily due to lower personnel salaries and benefits.

The fully-tax equivalent (FTE) tax rate for the second quarter 2022 was 27.0%, compared to 25.9% for the first quarter 2022; the higher second quarter tax rate is attributable to the increase in income before taxes without a proportional increase in tax preference items such as tax-exempt interest and tax credits.

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, 2021 filed on Form 10-K and quarterly report for the quarter ended March 31, 2022 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 July 21, 2022 
WESTAMERICA BANCORPORATION    
FINANCIAL HIGHLIGHTS    
June 30, 2022    
     
1. Net Income Summary.    
 (in thousands except per-share amounts)
   % 
 Q2'2022Q2'2021ChangeQ1'2022
     
Net Interest and Fee Income (FTE)$48,033 $44,499 7.9%$43,807 
Provision for Credit Losses -  - n/m  - 
Noninterest Income (1) 11,264  11,032 2.1% 11,576 
Noninterest Expense 24,629  24,291 1.4% 24,875 
Income Before Taxes (FTE) 34,668  31,240 11.0% 30,508 
Income Tax Provision (FTE) 9,354  8,661 8.0% 7,892 
Net Income$25,314 $22,579 12.1%$22,616 
     
Average Common Shares Outstanding 26,889  26,865 0.1% 26,870 
Diluted Average Common Shares 26,901  26,887 0.1% 26,885 
     
Operating Ratios:    
Basic Earnings Per Common Share$0.94 $0.84 11.9%$0.84 
Diluted Earnings Per Common Share 0.94  0.84 11.9% 0.84 
Return On Assets (a) 1.37% 1.29%  1.24%
Return On Common Equity (a) 12.9% 12.2%  11.8%
Net Interest Margin (FTE) (a) 2.74% 2.70%  2.51%
Efficiency Ratio (FTE) 41.5% 43.7%  44.9%
     
Dividends Paid Per Common Share$0.42 $0.41 2.4%$0.42 
Common Dividend Payout Ratio  45% 49%  50%
     
   % 
 6/30'22YTD6/30'21YTDChange 
     
Net Interest and Fee Income (FTE)$91,840 $87,082 5.5% 
Provision for Credit Losses -  - n/m  
Noninterest Income (1) 22,840  21,221 7.6% 
Noninterest Expense 49,504  49,197 0.6% 
Income Before Taxes (FTE) 65,176  59,106 10.3% 
Income Tax Provision (FTE) 17,246  16,380 5.3% 
Net Income$47,930 $42,726 12.2% 
     
Average Common Shares Outstanding 26,880  26,843 0.1% 
Diluted Average Common Shares 26,893  26,865 0.1% 
     
Operating Ratios:    
Basic Earnings Per Common Share$1.78 $1.59 11.9% 
Diluted Earnings Per Common Share 1.78  1.59 11.9% 
Return On Assets 1.30% 1.26%  
Return On Common Equity 12.4% 11.6%  
Net Interest Margin (FTE) 2.63% 2.72%  
Efficiency Ratio (FTE) 43.2% 45.4%  
     
Dividends Paid Per Common Share$0.84 $0.82 2.4% 
Common Dividend Payout Ratio  47% 52%  
     
2. Net Interest Income.    
 (dollars in thousands)
   % 
 Q2'2022Q2'2021ChangeQ1'2022
     
Interest and Fee Income (FTE)$48,516 $44,983 7.9%$44,287 
Interest Expense 483  484 -0.2% 480 
Net Interest and Fee Income (FTE)$48,033 $44,499 7.9%$43,807 
     
Average Earning Assets$7,000,862 $6,603,343 6.0%$6,998,234 
Average Interest-    
Bearing Liabilities 3,549,140  3,298,221 7.6% 3,546,146 
     
Yield on Earning Assets (FTE) (a) 2.77% 2.73%  2.54%
Cost of Funds (a) 0.03% 0.03%  0.03%
Net Interest Margin (FTE) (a) 2.74% 2.70%  2.51%
Interest Expense/    
Interest-Bearing Liabilities (a) 0.05% 0.06%  0.05%
Net Interest Spread (FTE) (a) 2.72% 2.67%  2.49%
     
   % 
 6/30'22YTD6/30'21YTDChange 
     
Interest and Fee Income (FTE)$92,803 $88,041 5.4% 
Interest Expense 963  959 0.4% 
Net Interest and Fee Income (FTE)$91,840 $87,082 5.5% 
     
Average Earning Assets$6,999,556 $6,424,973 8.9% 
Average Interest-    
Bearing Liabilities 3,547,651  3,214,688 10.4% 
     
Yield on Earning Assets (FTE) 2.66% 2.75%  
Cost of Funds 0.03% 0.03%  
Net Interest Margin (FTE) 2.63% 2.72%  
Interest Expense/    
Interest-Bearing Liabilities 0.05% 0.06%  
Net Interest Spread (FTE) 2.61% 2.69%  
     
3. Loans & Other Earning Assets.    
 (average volume, dollars in thousands)
   % 
 Q2'2022Q2'2021ChangeQ1'2022
     
Total Assets$7,420,069 $7,004,695 5.9%$7,406,321 
Total Earning Assets 7,000,862  6,603,343 6.0% 6,998,234 
Total Loans 1,009,633  1,257,087 -19.7% 1,029,724 
Total Commercial Loans 202,585  413,797 -51.0% 207,901 
Paycheck Protection Program (PPP) Loans 20,997  207,515 -89.9% 35,871 
Commercial Loans 181,588  206,282 -12.0% 172,030 
Commercial RE Loans  508,003  546,470 -7.0% 524,040 
Consumer Loans 299,045  296,820 0.7% 297,783 
Total Investment Securities 5,008,929  4,394,169 14.0% 4,947,846 
Debt Securities Available For Sale 4,721,083  3,953,016 19.4% 4,655,983 
Debt Securities Held To Maturity 287,846  441,153 -34.8% 291,863 
Total Interest-Bearing Cash 982,300  952,087 3.2% 1,020,664 
     
Loans/Deposits 15.7% 20.7%  16.1%
     
   % 
 6/30'22YTD6/30'21YTDChange 
     
Total Assets$7,413,233 $6,828,409 8.6% 
Total Earning Assets 6,999,556  6,424,973 8.9% 
Total Loans 1,019,623  1,254,328 -18.7% 
Total Commercial Loans 205,228  404,685 -49.3% 
PPP Loans 28,393  198,294 -85.7% 
Commercial Loans 176,835  206,391 -14.3% 
Commercial RE Loans  515,977  552,795 -6.7% 
Consumer Loans 298,418  296,848 0.5% 
Total Investment Securities 4,978,557  4,417,267 12.7% 
Debt Securities Available For Sale 4,688,714  3,950,298 18.7% 
Debt Securities Held To Maturity 289,843  466,969 -37.9% 
Total Interest-Bearing Cash 1,001,376  753,378 32.9% 
     
Loans/Deposits 15.9% 21.2%  
     
4. Deposits, Other Interest-Bearing Liabilities & Equity.   
 (average volume, dollars in thousands)
   % 
 Q2'2022Q2'2021ChangeQ1'2022
     
Total Deposits$6,424,202 $6,074,730 5.8%$6,393,458 
Noninterest Demand  2,998,360  2,888,259 3.8% 3,005,065 
Interest-Bearing Transaction 1,298,665  1,208,584 7.5% 1,265,100 
Savings 1,985,325  1,822,625 8.9% 1,980,092 
Time greater than $100K 63,790  70,750 -9.8% 64,172 
Time less than $100K 78,062  84,512 -7.6% 79,029 
Total Short-Term Borrowings 123,298  111,750 10.3% 157,753 
Shareholders' Equity 788,078  744,746 5.8% 776,225 
     
Demand Deposits/    
Total Deposits 46.7% 47.5%  47.0%
Transaction & Savings     
Deposits / Total Deposits 97.8% 97.4%  97.8%
     
   % 
 6/30'22YTD6/30'21YTDChange 
     
Total Deposits$6,408,915 $5,912,303 8.4% 
Noninterest Demand  3,001,694  2,801,428 7.1% 
Interest-Bearing Transaction 1,281,975  1,169,888 9.6% 
Savings 1,982,723  1,784,929 11.1% 
Time greater than $100K 63,980  70,994 -9.9% 
Time less than $100K 78,543  85,064 -7.7% 
Total Short-Term Borrowings 140,430  103,707 35.4% 
Other Borrowed Funds -  106 -100.0% 
Shareholders' Equity 782,184  740,147 5.7% 
     
Demand Deposits/    
Total Deposits 46.8% 47.4%  
Transaction & Savings     
Deposits / Total Deposits 97.8% 97.4%  
     
5. Interest Yields Earned & Rates Paid.    
 (dollars in thousands) 
 Q2'2022 
 AverageIncome/Yield (a) / 
 VolumeExpenseRate (a) 
     
Interest & Fee Income Earned    
Total Earning Assets (FTE)$7,000,862 $48,516 2.77% 
Total Loans (FTE) 1,009,633  12,426 4.94% 
Total Commercial Loans (FTE) 202,585  2,716 5.38% 
PPP Loans 20,997  645 12.32% 
Commercial Loans (FTE) 181,588  2,071 4.57% 
Commercial RE Loans 508,003  6,192 4.89% 
Consumer Loans 299,045  3,518 4.72% 
Total Investments (FTE) 5,008,929  34,088 2.72% 
Total Debt Securities Available For Sale (FTE) 4,721,083  32,059 2.72% 
Corporate Securities 2,589,490  17,857 2.76% 
Collateralized Loan Obligations 1,610,811  10,572 2.60% 
Agency Mortgage Backed Securities 357,727  2,049 2.29% 
Securities OF U.S. Government sponsored entities 59,892  533 3.56% 
Obligations of States and Political Subdivisions (FTE) 88,829  682 3.07% 
Other Debt Securities Available For Sale (FTE) 14,334  366 10.23% 
Total Debt Securities Held To Maturity (FTE) 287,846  2,029 2.82% 
Agency Mortgage Backed Securities 128,319  595 1.85% 
Corporate Securities 17,749  202 4.56% 
Obligations of States and Political Subdivisions (FTE) 141,778  1,232 3.48% 
Total Interest-Bearing Cash 982,300  2,002 0.81% 
     
Interest Expense Paid    
Total Earning Assets 7,000,862  483 0.03% 
Total Interest-Bearing Liabilities 3,549,140  483 0.05% 
Total Interest-Bearing Deposits 3,425,842  461 0.05% 
Interest-Bearing Transaction 1,298,665  91 0.03% 
Savings 1,985,325  288 0.06% 
Time less than $100K 78,062  42 0.22% 
Time greater than $100K 63,790  40 0.25% 
Total Short-Term Borrowings 123,298  22 0.07% 
     
Net Interest Income and    
Margin (FTE) $48,033 2.74% 
     
 Q2'2021 
 AverageIncome/Yield (a) / 
 VolumeExpenseRate (a) 
     
Interest & Fee Income Earned    
Total Earning Assets (FTE)$6,603,343 $44,983 2.73% 
Total Loans (FTE) 1,257,087  15,168 4.84% 
Total Commercial Loans (FTE) 413,797  4,763 4.62% 
PPP Loans 207,515  2,713 5.25% 
Commercial Loans (FTE) 206,282  2,050 3.98% 
Commercial RE Loans 546,470  6,994 5.13% 
Consumer Loans 296,820  3,411 4.61% 
Total Investments (FTE) 4,394,169  29,556 2.69% 
Total Debt Securities Available For Sale (FTE) 3,953,016  26,779 2.71% 
Corporate Securities 2,289,882  17,564 3.07% 
Collateralized Loan Obligations 1,020,187  5,646 2.19% 
Agency Mortgage Backed Securities 526,958  2,409 1.83% 
Securities OF U.S. Government sponsored entities 0  0 0.00% 
Obligations of States and Political Subdivisions (FTE) 101,619  812 3.19% 
Other Debt Securities Available For Sale (FTE) 14,370  348 9.70% 
Total Debt Securities Held To Maturity (FTE) 441,153  2,777 2.52% 
Agency Mortgage Backed Securities 201,703  793 1.57% 
Corporate Securities 0  0 0.00% 
Obligations of States and Political Subdivisions (FTE) 239,450  1,984 3.32% 
Total Interest-Bearing Cash 952,087  259 0.11% 
     
Interest Expense Paid    
Total Earning Assets 6,603,343  484 0.03% 
Total Interest-Bearing Liabilities 3,298,221  484 0.06% 
Total Interest-Bearing Deposits 3,186,471  466 0.06% 
Interest-Bearing Transaction 1,208,584  93 0.03% 
Savings 1,822,625  263 0.06% 
Time less than $100K 84,512  42 0.20% 
Time greater than $100K 70,750  68 0.39% 
Total Short-Term Borrowings 111,750  18 0.07% 
     
Net Interest Income and    
Margin (FTE) $44,499 2.70% 
     
6. Noninterest Income.    
 (dollars in thousands except per-share amounts)
   % 
 Q2'2022Q2'2021ChangeQ1'2022
     
Service Charges on Deposits$3,687 $3,235 14.0%$3,582 
Merchant Processing Services 3,374  3,279 2.9% 2,623 
Debit Card Fees (1) 1,709  1,791 -4.6% 2,872 
Trust Fees 809  827 -2.2% 843 
ATM Processing Fees 469  618 -24.1% 451 
Other Service Fees 480  491 -2.3% 449 
Financial Services Commissions 118  95 24.2% 117 
Securities Gains -  34 n/m  - 
Other Noninterest Income 618  662 -6.6% 639 
Total Noninterest Income$11,264 $11,032 2.1%$11,576 
     
Total Revenue (FTE)$59,297 $55,531 6.8%$55,383 
Noninterest Income/Revenue (FTE) 19.0% 19.9%  20.9%
Service Charges/Avg. Deposits (a) 0.23% 0.21%  0.23%
Total Revenues (FTE) Per Avg.    
Common Share (a)$8.85 $8.29 6.7%$8.36 
Life Insurance Gains    
   % 
 6/30'22YTD6/30'21YTDChange 
     
Service Charges on Deposits$7,269 $6,539 11.2% 
Merchant Processing Services 5,997  5,839 2.7% 
Debit Card Fees (1) 4,581  3,392 35.1% 
Trust Fees 1,652  1,628 1.5% 
ATM Processing Fees 920  1,219 -24.6% 
Other Service Fees 929  960 -3.2% 
Financial Services Commissions 235  165 42.4% 
Securities Gains -  34 n/m  
Other Noninterest Income 1,257  1,445 -13.0% 
Total Noninterest Income$22,840 $21,221 7.6% 
     
Total Revenue (FTE)$114,680 $108,303 5.9% 
Noninterest Income/Revenue (FTE) 19.9% 19.6%  
Service Charges/Avg. Deposits 0.23% 0.22%  
Total Revenues (FTE) Per Avg./    
Common Share$8.60 $8.14 5.7% 
     
7. Noninterest Expense.    
 (dollars in thousands)
   % 
 Q2'2022Q2'2021ChangeQ1'2022
     
Salaries & Benefits$11,412 $12,097 -5.7%$11,920 
Occupancy and Equipment 4,856  4,808 1.0% 4,746 
Outsourced Data Processing 2,423  2,425 -0.1% 2,437 
Professional Fees 736  830 -11.3% 736 
Courier Service 661  567 16.6% 582 
Amortization of    
Identifiable Intangibles 64  68 -5.9% 64 
Other Noninterest Expense 4,477  3,496 28.1% 4,390 
Total Noninterest Expense$24,629 $24,291 1.4%$24,875 
     
Noninterest Expense/    
Avg. Earning Assets (a) 1.41% 1.48%  1.44%
Noninterest Expense/Revenues (FTE) 41.5% 43.7%  44.9%
     
   % 
 6/30'22YTD6/30'21YTDChange 
     
Salaries & Benefits$23,332 $24,762 -5.8% 
Occupancy and Equipment 9,602  9,688 -0.9% 
Outsourced Data Processing 4,860  4,815 0.9% 
Professional Fees 1,472  1,772 -16.9% 
Courier Service 1,243  1,071 16.1% 
Amortization of    
Identifiable Intangibles 128  137 -6.6% 
Other Noninterest Expense 8,867  6,952 27.5% 
Total Noninterest Expense$49,504 $49,197 0.6% 
     
Noninterest Expense/    
Avg. Earning Assets 1.43% 1.54%  
Noninterest Expense/Revenues (FTE) 43.2% 45.4%  
     
8. Allowance for Credit Losses.    
 (dollars in thousands)
   % 
 Q2'2022Q2'2021ChangeQ1'2022
     
Average Total Loans$1,009,633 $1,257,087 -19.7%$1,029,724 
     
Beginning of Period Allowance for    
Credit Losses on Loans (ACLL)$22,925 $23,483 -2.4%$23,514 
Provision for Credit Losses -  - n/m  - 
Net ACLL (Losses) Recoveries (612) 254 -340.9% (589)
End of Period ACLL$22,313 $23,737 -6.0%$22,925 
Gross ACLL Recoveries /    
Gross ACLL Losses 57% 176%  51%
Net ACLL Losses (Recoveries) /    
Avg. Total Loans (a)  0.24% -0.08%  0.23%
     
   % 
 6/30'22YTD6/30'21YTDChange 
     
Average Total Loans$1,019,623 $1,254,328 -18.7% 
     
Beginning of Period ACLL$23,514 $23,854 -1.4% 
Provision for Credit Losses -  - n/m  
Net ACLL Losses (1,201) (117)926.5% 
End of Period ACLL$22,313 $23,737 -6.0% 
Gross ACLL Recoveries /    
Gross ACLL Losses 54% 91%  
Net ACLL Losses /    
Avg. Total Loans 0.24% 0.02%  
     
 (dollars in thousands)
   % 
 6/30/226/30/21Change3/31/22
Allowance for Credit Losses on Loans$22,313 $23,737 -6.0%$22,925 
Allowance for Credit Losses on    
HTM Securities 7  9 -22.3% 7 
Total Allowance for Credit Losses$22,320 $23,746 -6.0%$22,932 
     
Allowance for Unfunded    
Credit Commitments$201 $101 99.3%$201 
     
9. Credit Quality.    
 (dollars in thousands)
   % 
 6/30/226/30/21Change3/31/22
Nonperforming Loans:    
Nonperforming Nonaccrual$12 $652 -98.2%$63 
Performing Nonaccrual 235  3,564 -93.4% 421 
Total Nonaccrual Loans 247  4,216 -94.1% 484 
90+ Days Past Due Accruing Loans 614  167 267.7% 431 
Total Nonperforming Loans$861 $4,383 -80.4%$915 
     
Total Loans Outstanding$999,768 $1,194,834 -16.3%$1,002,514 
     
Total Assets 7,222,405  7,147,779 1.0% 7,306,417 
     
Loans:    
Allowance for Credit Losses on Loans$22,313 $23,737 -6.0%$22,925 
Allowance for Credit Losses on Loans /    
Loans 2.23% 1.99%  2.29%
Nonperforming Loans/Total Loans 0.09% 0.37%  0.09%
     
10. Capital.    
 (in thousands, except per-share amounts)
   % 
 6/30/226/30/21Change3/31/22
     
Shareholders' Equity$617,126 $842,196 -26.7%$701,744 
Total Assets 7,222,405  7,147,779 1.0% 7,306,417 
Shareholders' Equity/    
Total Assets 8.54% 11.78%  9.60%
Shareholders' Equity/    
Total Loans 61.73% 70.49%  70.00%
Tangible Common Equity Ratio 6.97% 10.24%  8.06%
Common Shares Outstanding 26,896  26,865 0.1% 26,883 
Common Equity Per Share$22.94 $31.35 -26.8%$26.10 
Market Value Per Common Share 55.66  58.03 -4.1% 60.50 
     
 (shares in thousands)
   % 
 Q2'2022Q2'2021ChangeQ1'2022
Share Repurchase Programs:    
Total Shares Repurchased -  - n/m  3 
Average Repurchase Price$- $- n/m $58.66 
Net Shares (Issued) (13) (1)n/m  (17)
     
   % 
 6/30'22YTD6/30'21YTDChange 
     
Total Shares Repurchased 3  4 n/m  
Average Repurchase Price$58.66 $61.09 n/m  
Net Shares (Issued) (30) (58)n/m  
     
11. Period-End Balance Sheets.    
 (unaudited, dollars in thousands)
   % 
 6/30/226/30/21Change3/31/22
Assets:    
Cash and Due from Banks$753,293 $939,929 -19.9%$1,037,593 
     
Equity Securities -  - n/m  - 
Debt Securities Available For Sale    
Corporate Securities 2,296,853  2,596,850 -11.6% 2,547,118 
Collateralized Loan Obligations 1,601,333  1,092,112 46.6% 1,616,584 
Agency Mortgage Backed Securities 331,425  510,460 -35.1% 363,181 
Securities OF U.S. Government sponsored entities 290,725  - n/m  - 
Obligations of States and Political Subdivisions 86,676  104,603 -17.1% 89,595 
Other Debt Securities Available For Sale 102  137 -25.6% 110 
Total Debt Securities Available For Sale 4,607,114  4,304,162 7.0% 4,616,588 
     
Debt Securities Held To Maturity    
Agency Mortgage Backed Securities 121,810  187,901 -35.2% 133,754 
Corporate Securities 181,316  - n/m  - 
Obligations of States and Political Subdivisions (2) 139,228  226,512 -38.5% 146,766 
Total Debt Securities Held To Maturity (2) 442,354  414,413 6.7% 280,520 
     
Loans 999,768  1,194,834 -16.3% 1,002,514 
Allowance For Credit Losses on Loans (22,313) (23,737)-6.0% (22,925)
Total Loans, net 977,455  1,171,097 -16.5% 979,589 
     
Premises and Equipment, net 30,309  32,080 -5.5% 30,626 
Identifiable Intangibles, net 707  967 -26.9% 771 
Goodwill 121,673  121,673 0.0% 121,673 
Other Assets 289,500  163,458 77.1% 239,057 
     
Total Assets$7,222,405 $7,147,779 1.0%$7,306,417 
     
Liabilities and Shareholders' Equity:    
Deposits:    
Noninterest-Bearing$2,987,725 $2,872,920 4.0%$3,000,268 
Interest-Bearing Transaction 1,303,700  1,200,634 8.6% 1,279,165 
Savings 1,983,713  1,849,258 7.3% 1,984,719 
Time 140,453  153,577 -8.5% 141,722 
Total Deposits 6,415,591  6,076,389 5.6% 6,405,874 
     
Short-Term Borrowed Funds 118,167  90,043 31.2% 124,442 
Other Liabilities 71,521  139,151 -48.6% 74,357 
Total Liabilities 6,605,279  6,305,583 4.8% 6,604,673 
     
Shareholders' Equity:    
Common Equity:    
Paid-In Capital 473,555  470,365 0.7% 472,470 
Accumulated Other    
Comprehensive (Loss) Income (188,025) 86,921 n/m  (88,300)
Retained Earnings 331,596  284,910 16.4% 317,574 
Total Shareholders' Equity 617,126  842,196 -26.7% 701,744 
     
Total Liabilities and    
Shareholders' Equity$7,222,405 $7,147,779 1.0%$7,306,417 
     
12. Income Statements.    
 (unaudited, in thousands except per-share amounts)
   % 
 Q2'2022Q2'2021ChangeQ1'2022
Interest & Fee Income:    
Loans$12,331 $15,064 -18.1%$12,942 
Equity Securities 129  110 17.3% 128 
Debt Securities Available For Sale 31,764  26,481 19.9% 28,566 
Debt Securities Held To Maturity 1,771  2,362 -25.0% 1,644 
Interest-Bearing Cash 2,002  259 673.0% 479 
Total Interest & Fee Income 47,997  44,276 8.4% 43,759 
     
Interest Expense:    
Transaction Deposits 91  93 -2.2% 88 
Savings Deposits 288  263 9.5% 283 
Time Deposits 82  110 -25.5% 81 
Short-Term Borrowed Funds 22  18 22.2% 28 
Other Borrowed Funds -  - n/m  - 
Total Interest Expense 483  484 -0.2% 480 
     
Net Interest Income 47,514  43,792 8.5% 43,279 
     
Provision for Credit Losses -  - n/m  - 
     
Noninterest Income:    
Service Charges 3,687  3,235 14.0% 3,582 
Merchant Processing Services 3,374  3,279 2.9% 2,623 
Debit Card Fees (1) 1,709  1,791 -4.6% 2,872 
Trust Fees 809  827 -2.2% 843 
ATM Processing Fees 469  618 -24.1% 451 
Other Service Fees 480  491 -2.3% 449 
Financial Services Commissions 118  95 24.2% 117 
Securities Gains -  34 n/m  - 
Other Noninterest Income 618  662 -6.6% 639 
Total Noninterest Income 11,264  11,032 2.1% 11,576 
     
Noninterest Expense:    
Salaries and Benefits 11,412  12,097 -5.7% 11,920 
Occupancy and Equipment 4,856  4,808 1.0% 4,746 
Outsourced Data Processing 2,423  2,425 -0.1% 2,437 
Professional Fees 736  830 -11.3% 736 
Courier Service 661  567 16.6% 582 
Amortization of Identifiable Intangibles 64  68 -5.9% 64 
Other Noninterest Expense 4,477  3,496 28.1% 4,390 
Total Noninterest Expense 24,629  24,291 1.4% 24,875 
     
Income Before Income Taxes 34,149  30,533 11.8% 29,980 
Income Tax Provision 8,835  7,954 11.1% 7,364 
Net Income$25,314 $22,579 12.1%$22,616 
     
Average Common Shares Outstanding 26,889  26,865 0.1% 26,870 
Diluted Common Shares Outstanding 26,901  26,887 0.1% 26,885 
     
Per Common Share Data:    
Basic Earnings$0.94 $0.84 11.9%$0.84 
Diluted Earnings 0.94  0.84 11.9% 0.84 
Dividends Paid 0.42  0.41 2.4% 0.42 
     
   % 
 6/30'22YTD6/30'21YTDChange 
Interest & Fee Income:    
Loans$25,273 $29,645 -14.7% 
Equity Securities 257  220 16.8% 
Debt Securities Available For Sale 60,330  51,370 17.4% 
Debt Securities Held To Maturity 3,415  4,960 -31.2% 
Interest-Bearing Cash 2,481  397 524.9% 
Total Interest & Fee Income 91,756  86,592 6.0% 
     
Interest Expense:    
Transaction Deposits 179  182 -1.6% 
Savings Deposits 571  513 11.3% 
Time Deposits 163  230 -29.1% 
Short-Term Borrowed Funds 50  34 47.1% 
Total Interest Expense 963  959 0.4% 
     
Net Interest Income 90,793  85,633 6.0% 
     
Provision for Credit Losses -  - n/m  
     
Noninterest Income:    
Service Charges 7,269  6,539 11.2% 
Merchant Processing Services 5,997  5,839 2.7% 
Debit Card Fees (1) 4,581  3,392 35.1% 
Trust Fees 1,652  1,628 1.5% 
ATM Processing Fees 920  1,219 -24.6% 
Other Service Fees 929  960 -3.2% 
Financial Services Commissions 235  165 42.4% 
Securities Gains -  34 n/m  
Other Operating 1,257  1,445 -13.0% 
Total Noninterest Income 22,840  21,221 7.6% 
     
Noninterest Expense:    
Salaries and Benefits 23,332  24,762 -5.8% 
Occupancy and Equipment 9,602  9,688 -0.9% 
Outsourced Data Processing 4,860  4,815 0.9% 
Professional Fees 1,472  1,772 -16.9% 
Courier Service 1,243  1,071 16.1% 
Amortization of Identifiable Intangibles 128  137 -6.6% 
Other Operating 8,867  6,952 27.5% 
Total Noninterest Expense 49,504  49,197 0.6% 
     
Income Before Income Taxes 64,129  57,657 11.2% 
Income Tax Provision 16,199  14,931 8.5% 
Net Income$47,930 $42,726 12.2% 
     
Average Common Shares Outstanding 26,880  26,843 0.1% 
Diluted Common Shares Outstanding 26,893  26,865 0.1% 
     
Per Common Share Data:    
Basic Earnings$1.78 $1.59 11.9% 
Diluted Earnings 1.78  1.59 11.9% 
Dividends Paid 0.84  0.82 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) Debt Securities Held To Maturity and Obligations of States and Political Subdivisions are net of related reserve for expected credit losses of $7 thousand at June 30, 2022 and March 31, 2022, and $9 thousand at June 30, 2021.
     
(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.