Westamerica Bancorporation Reports Third Quarter 2023 Financial Results

| Source: Westamerica Bancorporation Westamerica Bancorporation

SAN RAFAEL, Calif., Oct. 19, 2023 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the third quarter 2023 of $41.6 million and diluted earnings per common share (“EPS”) of $1.56, which represent the highest third quarter results in Company history. Third quarter 2023 results include a life insurance gain which increased EPS $0.01. Third quarter 2023 results compare to second quarter 2023 net income of $40.2 million and EPS of $1.51.

“Westamerica’s third 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 third quarter 2023. The annualized cost of funding our loan and bond portfolios was 0.07 percent in the third quarter 2023. The Company’s customer deposits and shareholders’ equity fully funded our interest earning assets during the third quarter 2023; the Company did not borrow from the Federal Reserve Bank or correspondent banks. Operating expenses remained well controlled. Nonperforming assets were a stable $1.2 million at September 30, 2023,” said Chairman, President and CEO David Payne. “Third quarter 2023 results generated an annualized 18.3 percent return on average common equity. Shareholders were paid a $0.44 per common share dividend during the third quarter 2023,” concluded Payne.

Net interest income on a fully-taxable equivalent (FTE) basis was $72.1 million for the third quarter 2023, compared to $70.3 million for the second quarter 2023. The annualized yield earned on loans, bonds and cash for the third quarter 2023 was 4.50 percent, up from 4.38 percent for the second quarter 2023. The annualized cost of funding the loan and bond portfolios was 0.07 percent for the third quarter 2023, compared to 0.04 percent for the second quarter 2023. Variable rate assets at September 30, 2023 included $1.5 billion in collateralized loan obligations on which interest rates reset quarterly.

The Company provided $400 thousand for credit losses on loans in the third quarter 2023. The Allowance for Credit Losses on Loans was $17.7 million at September 30, 2023.

Noninterest income for the third quarter 2023 totaled $11.3 million compared to $10.7 million for the second quarter 2023. Third quarter 2023 results include a $278 thousand life insurance gain.

Noninterest expenses for the third quarter 2023 were $25.7 million compared to $25.8 million for the second quarter 2023.

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
 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, 2022 filed on Form 10-K and quarterly report for the quarter ended June 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 October 19, 2023
WESTAMERICA BANCORPORATION    
FINANCIAL HIGHLIGHTS    
September 30, 2023    
      
1. Net Income Summary.    
  (in thousands except per-share amounts)
    % 
  Q3’2023Q3’2022ChangeQ2’2023
      
 Net Interest and Fee Income (FTE)$72,092 $60,780 18.6%$70,281 
 Provision for Credit Losses 400  - n/m - 
 Noninterest Income 11,281  11,818 -4.5% 10,700 
 Noninterest Expense 25,650  24,767 3.6% 25,839 
 Income Before Taxes (FTE) 57,323  47,831 19.8% 55,142 
 Income Tax Provision (FTE) 15,722  13,071 20.3% 14,894 
 Net Income$41,601 $34,760 19.7%$40,248 
      
 Average Common Shares Outstanding 26,648  26,906 -1.0% 26,648 
 Diluted Average Common Shares Outstanding 26,650  26,916 -1.0% 26,648 
      
 Operating Ratios:    
 Basic Earnings Per Common Share$1.56 $1.29 20.9%$1.51 
 Diluted Earnings Per Common Share 1.56  1.29 20.9% 1.51 
 Return On Assets (a) 2.41% 1.85%  2.35%
 Return On Common Equity (a) 18.3% 17.1%  18.4%
 Net Interest Margin (FTE) (a) 4.43% 3.44%  4.34%
 Efficiency Ratio (FTE) 30.8% 34.1%  31.9%
      
 Dividends Paid Per Common Share$0.44 $0.42 4.8%$0.42 
 Common Dividend Payout Ratio  28% 33%  28%
      
    % 
  9/30’23YTD9/30’22YTDChange 
      
 Net Interest and Fee Income (FTE)$211,935 $152,620 38.9% 
 Reversal of Provision for Credit Losses (2) (1,150) - n/m 
 Noninterest Income (1) 32,530  34,658 -6.1% 
 Noninterest Expense 77,699  74,271 4.6% 
 Income Before Taxes (FTE) 167,916  113,007 48.6% 
 Income Tax Provision (FTE) 45,616  30,317 50.5% 
 Net Income$122,300 $82,690 47.9% 
      
 Average Common Shares Outstanding 26,718  26,889 -0.6% 
 Diluted Average Common Shares Outstanding 26,721  26,901 -0.7% 
      
 Operating Ratios:    
 Basic Earnings Per Common Share$4.58 $3.08 48.7% 
 Diluted Earnings Per Common Share 4.58  3.07 49.2% 
 Return On Assets (a) 2.36% 1.49%  
 Return On Common Equity (a) 18.6% 14.0%  
 Net Interest Margin (FTE) (a) 4.32% 2.90%  
 Efficiency Ratio (FTE) 31.8% 39.7%  
      
 Dividends Paid Per Common Share$1.28 $1.26 1.6% 
 Common Dividend Payout Ratio  28% 41%  
      
2. Net Interest Income.    
  (dollars in thousands)
    % 
  Q3’2023Q3’2022ChangeQ2’2023
      
 Interest and Fee Income (FTE)$73,225 $61,267 19.5%$70,888 
 Interest Expense 1,133  487 132.6% 607 
 Net Interest and Fee Income (FTE)$72,092 $60,780 18.6%$70,281 
      
 Average Earning Assets$6,438,411 $7,041,313 -8.6%$6,457,270 
 Average Interest- Bearing Liabilities 3,118,632  3,520,083 -11.4% 3,144,264 
      
 Yield on Earning Assets (FTE) (a) 4.50% 3.47%  4.38%
 Cost of Funds (a) 0.07% 0.03%  0.04%
 Net Interest Margin (FTE) (a) 4.43% 3.44%  4.34%
 Interest Expense/    
    Interest-Bearing Liabilities (a) 0.14% 0.05%  0.08%
 Net Interest Spread (FTE) (a) 4.36% 3.42%  4.30%
      
    % 
  9/30’23YTD9/30’22YTDChange 
      
 Interest and Fee Income (FTE)$214,146 $154,070 39.0% 
 Interest Expense 2,211  1,450 52.5% 
 Net Interest and Fee Income (FTE)$211,935 $152,620 38.9% 
      
 Average Earning Assets$6,519,448 $7,013,627 -7.0% 
 Average Interest- Bearing Liabilities 3,182,734  3,538,361 -10.1% 
      
 Yield on Earning Assets (FTE) (a) 4.36% 2.93%  
 Cost of Funds (a) 0.04% 0.03%  
 Net Interest Margin (FTE) (a) 4.32% 2.90%  
 Interest Expense/    
    Interest-Bearing Liabilities (a) 0.09% 0.05%  
 Net Interest Spread (FTE) (a) 4.27% 2.88%  
      
3. Loans & Other Earning Assets.    
  (average volume, dollars in thousands)
    % 
  Q3’2023Q3’2022ChangeQ2’2023
      
 Total Assets$6,847,691 $7,472,304 -8.4%$6,865,591 
 Total Earning Assets 6,438,411  7,041,313 -8.6% 6,457,270 
 Total Loans 903,854  989,033 -8.6% 926,795 
   Commercial Loans 151,431  190,325 -20.4% 157,975 
   Commercial Real Estate Loans  493,072  494,717 -0.3% 491,902 
   Consumer Loans 259,351  303,991 -14.7% 276,918 
 Total Investment Securities 5,247,118  5,552,588 -5.5% 5,365,377 
   Debt Securities Available for Sale 4,353,794  4,845,055 -10.1% 4,460,339 
   Debt Securities Held to Maturity 893,324  707,533 26.3% 905,038 
 Total Interest-Bearing Cash 287,439  499,692 -42.5% 165,098 
      
 Loans/Deposits 15.8% 15.2%  16.0%
      
    % 
  9/30’23YTD9/30’22YTDChange 
      
 Total Assets$6,940,897 $7,433,140 -6.6% 
 Total Earning Assets 6,519,448  7,013,627 -7.0% 
 Total Loans 925,351  1,009,314 -8.3% 
   Commercial Loans 158,204  200,206 -21.0% 
   Commercial Real Estate Loans  492,702  508,812 -3.2% 
   Consumer Loans 274,445  300,296 -8.6% 
 Total Investment Securities 5,385,986  5,172,003 4.1% 
   Debt Securities Available for Sale 4,482,376  4,741,400 -5.5% 
   Debt Securities Held to Maturity 903,610  430,603 109.8% 
 Total Interest-Bearing Cash 208,111  832,310 -75.0% 
      
 Loans/Deposits 15.8% 15.7%  
      
4. Deposits, Other Interest-Bearing Liabilities & Equity.  
  (average volume, dollars in thousands)
    % 
  Q3’2023Q3’2022ChangeQ2’2023
      
 Total Deposits$5,722,817 $6,495,051 -11.9%$5,797,504 
   Noninterest Demand  2,721,358  3,058,662 -11.0% 2,751,319 
   Interest-Bearing Transaction 1,149,483  1,308,310 -12.1% 1,159,653 
   Savings 1,741,994  1,989,275 -12.4% 1,763,410 
   Time greater than $100K 43,073  62,014 -30.5% 53,901 
   Time less than $100K 66,909  76,790 -12.9% 69,221 
 Total Short-Term Borrowings 117,173  83,694 40.0% 98,079 
 Shareholders’ Equity 902,300  807,428 11.7% 877,964 
      
 Demand Deposits/ Total Deposits 47.6% 47.1%  47.5%
 Transaction & Savings Deposits / Total Deposits 98.1% 97.9%  97.9%
      
    % 
  9/30’23YTD9/30’22YTDChange 
      
 Total Deposits$5,859,506 $6,437,943 -9.0% 
   Noninterest Demand  2,774,282  3,020,892 -8.2% 
   Interest-Bearing Transaction 1,180,551  1,290,850 -8.5% 
   Savings 1,783,891  1,984,931 -10.1% 
   Time greater than $100K 51,481  63,318 -18.7% 
   Time less than $100K 69,301  77,952 -11.1% 
 Total Short-Term Borrowings 97,510  121,310 -19.6% 
 Shareholders’ Equity 879,740  790,691 11.3% 
      
 Demand Deposits/ Total Deposits 47.3% 46.9%  
 Transaction & Savings Deposits / Total Deposits 97.9% 97.8%  
      
5. Interest Yields Earned & Rates Paid.    
  (dollars in thousands) 
  Q3’2023 
  AverageIncome/Yield (a) / 
  VolumeExpenseRate (a) 
      
 Interest & Fee Income Earned:    
   Total Earning Assets (FTE)$6,438,411 $73,225 4.50% 
   Total Loans (FTE) 903,854  12,016 5.27% 
     Commercial Loans (FTE) 151,431  2,743 7.19% 
     Commercial Real Estate Loans  493,072  5,914 4.76% 
     Consumer Loans 259,351  3,359 5.14% 
   Total Investments (FTE) 5,247,118  57,280 4.32% 
     Total Debt Securities Available for Sale (FTE) 4,353,794  48,285 4.38% 
       Corporate Securities 2,148,308  14,851 2.77% 
       Collateralized Loan Obligations 1,530,992  28,023 7.16% 
       Agency Mortgage Backed Securities 276,755  1,676 2.42% 
       Securities of U.S. Government sponsored    
          entities 307,106  2,777 3.62% 
       Obligations of States and Political    
          Subdivisions (FTE) 76,406  573 3.00% 
       Other Debt Securities Available for Sale (FTE) 14,227  385 10.82% 
     Total Debt Securities Held to Maturity (FTE) 893,324  8,995 4.03% 
       Agency Mortgage Backed Securities 88,147  475 2.16% 
       Corporate Securities 725,862  7,815 4.31% 
       Obligations of States and Political    
          Subdivisions (FTE) 79,315  705 3.55% 
   Total Interest-Bearing Cash 287,439  3,929 5.35% 
      
 Interest Expense Paid:    
   Total Earning Assets  6,438,411  1,133 0.07% 
   Total Interest-Bearing Liabilities 3,118,632  1,133 0.14% 
   Total Interest-Bearing Deposits 3,001,459  1,095 0.14% 
     Interest-Bearing Transaction 1,149,483  131 0.05% 
     Savings 1,741,994  886 0.20% 
     Time less than $100K 66,909  52 0.31% 
     Time greater than $100K 43,073  26 0.24% 
   Total Short-Term Borrowings  117,173  38 0.13% 
      
 Net Interest Income and     
 Margin (FTE) $72,092 4.43% 
      
  Q3’2022 
  AverageIncome/Yield (a) / 
  VolumeExpenseRate (a) 
 Interest & Fee Income Earned:    
   Total Earning Assets (FTE)$7,041,313 $61,267 3.47% 
   Total Loans (FTE) 989,033  12,298 4.93% 
     Commercial Loans (FTE) 190,325  2,843 5.93% 
     Commercial Real Estate Loans  494,717  5,821 4.67% 
     Consumer Loans 303,991  3,634 4.74% 
   Total Investments (FTE) 5,552,588  46,227 3.33% 
     Total Debt Securities Available for Sale (FTE) 4,845,055  39,388 3.22% 
       Corporate Securities 2,518,870  17,404 2.76% 
       Collateralized Loan Obligations 1,600,611  16,355 4.00% 
       Agency Mortgage Backed Securities 336,392  2,001 2.38% 
       Securities of U.S. Government sponsored    
          entities 288,538  2,604 3.61% 
       Obligations of States and Political    
          Subdivisions (FTE) 86,357  660 3.06% 
       Other Debt Securities Available for Sale (FTE) 14,287  364 10.18% 
     Total Debt Securities Held to Maturity (FTE) 707,533  6,839 3.87% 
       Agency Mortgage Backed Securities 117,606  586 1.99% 
       Corporate Securities 477,881  5,230 4.38% 
       Obligations of States and Political    
          Subdivisions (FTE) 112,046  1,023 3.65% 
   Total Interest-Bearing Cash 499,692  2,742 2.15% 
      
 Interest Expense Paid:    
   Total Earning Assets  7,041,313  487 0.03% 
   Total Interest-Bearing Liabilities 3,520,083  487 0.05% 
   Total Interest-Bearing Deposits 3,436,389  470 0.05% 
     Interest-Bearing Transaction 1,308,310  94 0.03% 
     Savings 1,989,275  290 0.06% 
     Time less than $100K 76,790  47 0.24% 
     Time greater than $100K 62,014  39 0.25% 
   Total Short-Term Borrowings  83,694  17 0.08% 
      
 Net Interest Income and    
 Margin (FTE) $60,780 3.44% 
      
6. Noninterest Income.    
  (dollars in thousands except per-share amounts)
    % 
  Q3’2023Q3’2022ChangeQ2’2023
      
 Service Charges on Deposit Accounts$3,705 $3,737 -0.9%$3,459 
 Merchant Processing Services 2,911  2,925 -0.5% 2,869 
 Debit Card Fees 1,717  1,594 7.7% 1,759 
 Trust Fees 783  810 -3.3% 810 
 ATM Processing Fees 640  594 7.7% 702 
 Other Service Fees 463  463 0.1% 458 
 Financial Services Commissions 78  79 -1.3% 103 
 Life Insurance Gains 278  923 n/m - 
 Securities Losses -  - n/m (125)
 Other Noninterest Income 706  693 1.9% 665 
   Total Noninterest Income$11,281 $11,818 -4.5%$10,700 
      
 Operating Ratios:    
   Total Revenue (FTE)$83,373 $72,598 14.8%$80,981 
   Noninterest Income/Revenue (FTE) 13.5% 16.3%  13.2%
   Service Charges/Avg. Deposits (a) 0.26% 0.23%  0.24%
   Total Revenue (FTE) Per Avg.     
 Common Share (a)$12.41 $10.70 15.9%$12.19 
      
    % 
  9/30’23YTD9/30’22YTDChange 
      
 Service Charges on Deposit Accounts$10,629 $11,006 -3.4% 
 Merchant Processing Services 8,417  8,922 -5.7% 
 Debit Card Fees (1) 5,118  6,175 -17.1% 
 Trust Fees 2,358  2,462 -4.2% 
 ATM Processing Fees 1,996  1,514 31.8% 
 Other Service Fees 1,320  1,392 -5.2% 
 Financial Services Commissions 270  314 -14.0% 
 Life Insurance Gains 278  923 n/m 
 Securities Losses (125) - n/m 
 Other Noninterest Income 2,269  1,950 16.4% 
   Total Noninterest Income$32,530 $34,658 -6.1% 
      
 Operating Ratios:    
   Total Revenue (FTE)$244,465 $187,278 30.5% 
   Noninterest Income/Revenue (FTE) 13.3% 18.5%  
   Service Charges/Avg. Deposits (a) 0.24% 0.23%  
   Total Revenue (FTE) Per Avg.    
 Common Share (a)$12.23 $9.31 31.4% 
      
7. Noninterest Expense.    
  (dollars in thousands)
    % 
  Q3’2023Q3’2022ChangeQ2’2023
      
 Salaries & Benefits$11,820 $11,311 4.5%$11,828 
 Occupancy and Equipment 5,065  5,064 0.0% 5,012 
 Outsourced Data Processing 2,473  2,434 1.6% 2,488 
 Limited Partnership Operating Losses 1,440  1,431 0.6% 1,440 
 Professional Fees 401  582 -31.1% 485 
 Courier Service 745  671 11.0% 611 
 Other Noninterest Expense 3,706  3,274 13.2% 3,975 
   Total Noninterest Expense$25,650 $24,767 3.6%$25,839 
      
 Operating Ratios:    
   Noninterest Expense/ Avg. Earning Assets (a) 1.58% 1.40%  1.60%
   Noninterest Expense/Revenues (FTE) 30.8% 34.1%  31.9%
      
    % 
  9/30’23YTD9/30’22YTDChange 
      
 Salaries & Benefits$35,715 $34,643 3.1% 
 Occupancy and Equipment 15,562  14,666 6.1% 
 Outsourced Data Processing 7,405  7,294 1.5% 
 Limited Partnership Operating Losses 4,314  4,293 0.5% 
 Professional Fees 1,362  2,054 -33.7% 
 Courier Service 1,971  1,914 3.0% 
 Other Noninterest Expense 11,370  9,407 20.9% 
   Total Noninterest Expense$77,699 $74,271 4.6% 
      
 Operating Ratios:    
   Noninterest Expense/ Avg. Earning Assets (a) 1.59% 1.42%  
   Noninterest Expense/Revenues (FTE) 31.8% 39.7%  
      
8. Allowance for Credit Losses.    
  (dollars in thousands)
    % 
  Q3’2023Q3’2022ChangeQ2’2023
      
 Average Total Loans$903,854 $989,033 -8.6%$926,795 
      
 Beginning of Period Allowance for    
 Credit Losses on Loans (ACLL)$18,480 $22,313 -17.2%$19,509 
 Provision for Credit Losses 400  - n/m - 
 Net ACLL Losses (1,136) (1,095)3.7% (1,029)
 End of Period ACLL$17,744 $21,218 -16.4%$18,480 
      
 Gross ACLL Recoveries / Gross ACLL Losses  46% 43%  38%
      
 Net ACLL Losses /    
 Avg. Total Loans (a) 0.50% 0.44%  0.45%
      
    % 
  9/30’23YTD9/30’22YTDChange 
      
 Average Total Loans$925,351 $1,009,314 -8.3% 
      
 Beginning of Period ACLL $20,284 $23,514 -13.7% 
 Reversal of Provision for Credit Losses (2)  (1,150) - n/m 
 Net ACLL Losses (1,390) (2,296)-39.5% 
 End of Period ACLL$17,744 $21,218 -16.4% 
      
 Gross ACLL Recoveries / Gross ACLL Losses  76% 49%  
      
 Net ACLL Losses / Avg. Total Loans (a) 0.20% 0.30%  
      
  (dollars in thousands)
    % 
  9/30/239/30/22Change6/30/23
 Allowance for Credit Losses on Loans$17,744 $21,218 -16.4%$18,480 
 Allowance for Credit Losses on    
 Held to Maturity Securities 1  7 -85.5% 1 
 Total Allowance for Credit Losses$17,745 $21,225 -16.4%$18,481 
      
 Allowance for Unfunded    
 Credit Commitments$201 $201 0.0%$201 
      
9. Credit Quality.    
  (dollars in thousands)
    % 
  9/30/239/30/22Change6/30/23
 Nonperforming Loans:    
    Nonperforming Nonaccrual Loans$205 $131 56.5%$192 
    Performing Nonaccrual Loans 4  66 -93.9% 5 
 Total Nonaccrual Loans 209  197 6.1% 197 
 90+ Days Past Due Accruing Loans 1,029  769 33.8% 656 
 Total Nonperforming Loans$1,238 $966 28.2%$853 
      
 Total Loans Outstanding $885,850 $979,033 -9.5%$919,583 
      
 Total Assets  6,567,288  7,177,025 -8.5% 6,582,740 
      
 Loans:    
 Allowance for Credit Losses on Loans$17,744 $21,218 -16.4%$18,480 
 Allowance for Credit Losses on Loans /    
   Loans 2.00% 2.17%  2.01%
 Nonperforming Loans/Total Loans 0.14% 0.10%  0.09%
      
10. Liquidity.    
      
 At September 30, 2023, the Company had $420,550 thousand in cash balances. During the twelve months ending September 30, 2024, the Company expects to receive $257,000 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 September 30, 2023, the Company’s debt securities which qualify as collateral for borrowing totaled $3,810,723 thousand. In the ordinary course of business, the Company pledges debt securities as collateral for certain depository customers; at September 30, 2023, the Company had pledged $680,735 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 September 30, 2023, the Company had pledged $964,139 thousand in debt securities at the Federal Reserve Bank. During the nine months ended September 30, 2023, the Company’s average borrowings from the Federal Reserve Bank and other correspondent banks were $-0- thousand, and at September 30, 2023, the Company’s borrowings from the Federal Reserve Bank and other correspondent banks were $-0- thousand. At September 30, 2023, the Company’s estimated unpledged collateral qualifying debt securities totaled $1,930,927 thousand. Debt securities eligible as collateral are shown at market value unless otherwise noted.
      
     (in thousands)
     9/30/23
 Debt Securities Eligible as Collateral:    
 Corporate Securities   $2,480,972 
 Collateralized Loan Obligations rated AAA    540,315 
 Obligations of States and Political Subdivisions   145,246 
 Agency Mortgage Backed Securities    317,357 
 Securities of U.S. Government Sponsored Entities (Par Value)  326,833 
     Total Debt Securities Eligible as Collateral   $3,810,723 
      
 Debt Securities Pledged as Collateral:    
 Deposits by Public Entities   ($680,735)
 Short-Term Borrowed Funds (Deposit Sweep)   (229,278)
 Other    (5,644)
     Total Debt Securities Pledged as Collateral   ($915,657)
      
 Debt Securities Pledged at the Federal Reserve Bank  ($964,139)
      
 Estimated Debt Securities Available to Pledge   $1,930,927 
      
11. Capital.    
  (in thousands, except per-share amounts)
    % 
  9/30/239/30/22Change6/30/23
      
 Shareholders’ Equity$648,423 $538,988 20.3%$651,862 
 Total Assets 6,567,288  7,177,025 -8.5% 6,582,740 
 Shareholders’ Equity/    
    Total Assets 9.87% 7.51%  9.90%
 Shareholders’ Equity/    
    Total Loans 73.20% 55.05%  70.89%
 Tangible Common Equity Ratio 8.17% 5.91%  8.20%
 Common Shares Outstanding 26,649  26,911 -1.0% 26,648 
 Common Equity Per Share$24.33 $20.03 21.5%$24.46 
 Market Value Per Common Share 43.25  52.29 -17.3% 38.30 
      
  (shares in thousands)
    % 
  Q3’2023Q3’2022ChangeQ2’2023
 Share Repurchase Programs:    
   Total Shares Repurchased / Canceled -  - n/m - 
   Average Repurchase Price$- $- n/m$- 
   Net Shares Issued (1) (15)n/m - 
      
    % 
  9/30’23YTD9/30’22YTDChange 
      
   Total Shares Repurchased 274  3 n/m 
   Average Repurchase Price$50.11 $58.66 n/m 
   Net Shares Repurchased (Issued) 264  (45)n/m 
      
12. Period-End Balance Sheets.    
  (unaudited, dollars in thousands)
    % 
  9/30/239/30/22Change6/30/23
 Assets:    
   Cash and Due from Banks$420,550 $413,665 1.7%$266,187 
      
   Debt Securities Available for Sale    
     Corporate Securities 1,814,424  2,138,508 -15.2% 1,901,504 
     Collateralized Loan Obligations 1,503,078  1,587,622 -5.3% 1,514,962 
     Agency Mortgage Backed Securities 239,728  296,689 -19.2% 259,190 
     Securities of U.S. Government sponsored    
       entities 279,364  272,525 2.5% 291,402 
     Obligations of States and Political    
       Subdivisions 69,639  80,987 -14.0% 79,400 
       Total Debt Securities Available for Sale 3,906,233  4,376,331 -10.7% 4,046,458 
      
   Debt Securities Held to Maturity    
     Agency Mortgage Backed Securities 84,347  112,371 -24.9% 91,141 
     Corporate Securities 726,951  720,154 0.9% 725,252 
     Obligations of States and Political    
       Subdivisions (3) 77,558  103,742 -25.2% 83,963 
       Total Debt Securities Held to Maturity (3) 888,856  936,267 -5.1% 900,356 
      
   Loans 885,850  979,033 -9.5% 919,583 
   Allowance For Credit Losses on Loans (17,744) (21,218)-16.4% (18,480)
     Total Loans, net 868,106  957,815 -9.4% 901,103 
      
   Premises and Equipment, net 27,490  29,756 -7.6% 27,908 
   Identifiable Intangibles, net 404  644 -37.3% 463 
   Goodwill  121,673  121,673 0.0% 121,673 
   Other Assets 333,976  340,874 -2.0% 318,592 
      
       Total Assets$6,567,288 $7,177,025 -8.5%$6,582,740 
      
 Liabilities and Shareholders’ Equity:    
   Deposits:    
     Noninterest-Bearing$2,723,403 $3,069,907 -11.3%$2,721,046 
     Interest-Bearing Transaction 1,138,220  1,338,855 -15.0% 1,133,006 
     Savings 1,732,849  1,949,711 -11.1% 1,735,083 
     Time 104,541  136,783 -23.6% 116,792 
       Total Deposits 5,699,013  6,495,256 -12.3% 5,705,927 
      
   Short-Term Borrowed Funds 115,341  76,886 50.0% 138,005 
   Other Liabilities 104,511  65,895 58.6% 86,946 
       Total Liabilities 5,918,865  6,638,037 -10.8% 5,930,878 
      
 Shareholders’ Equity:    
   Common Equity:    
     Paid-In Capital 471,862  474,732 -0.6% 471,510 
     Accumulated Other    
       Comprehensive Loss (285,709) (290,797)-1.7% (252,043)
     Retained Earnings 462,270  355,053 30.2% 432,395 
       Total Shareholders’ Equity 648,423  538,988 20.3% 651,862 
      
       Total Liabilities and     
        Shareholders’ Equity$6,567,288 $7,177,025 -8.5%$6,582,740 
      
13. Income Statements.    
  (unaudited, in thousands except per-share amounts)
    % 
  Q3’2023Q3’2022ChangeQ2’2023
 Interest & Fee Income:    
 Loans$11,925 $12,208 -2.3%$11,845 
 Equity Securities 152  127 19.7% 152 
 Debt Securities Available for Sale 47,994  39,100 22.7% 47,452 
 Debt Securities Held to Maturity 8,848  6,625 33.5% 8,930 
 Interest-Bearing Cash 3,929  2,742 43.3% 2,110 
     Total Interest & Fee Income 72,848  60,802 19.8% 70,489 
      
 Interest Expense:    
   Transaction Deposits 131  94 39.4% 104 
   Savings Deposits 886  290 205.5% 396 
   Time Deposits 78  86 -9.3% 82 
   Short-Term Borrowed Funds 38  17 123.5% 25 
     Total Interest Expense 1,133  487 132.6% 607 
      
 Net Interest Income 71,715  60,315 18.9% 69,882 
      
 Provision for Credit Losses 400  - n/m - 
      
 Noninterest Income:    
   Service Charges on Deposit Accounts 3,705  3,737 -0.9% 3,459 
   Merchant Processing Services 2,911  2,925 -0.5% 2,869 
   Debit Card Fees 1,717  1,594 7.7% 1,759 
   Trust Fees 783  810 -3.3% 810 
   ATM Processing Fees 640  594 7.7% 702 
   Other Service Fees 463  463 0.1% 458 
   Financial Services Commissions 78  79 -1.3% 103 
   Life Insurance Gains 278  923 n/m - 
   Securities Losses -  - n/m (125)
   Other Noninterest Income 706  693 1.9% 665 
     Total Noninterest Income 11,281  11,818 -4.5% 10,700 
      
 Noninterest Expense:    
   Salaries and Related Benefits 11,820  11,311 4.5% 11,828 
   Occupancy and Equipment 5,065  5,064 0.0% 5,012 
   Outsourced Data Processing 2,473  2,434 1.6% 2,488 
   Limited Partnership Operating Losses 1,440  1,431 0.6% 1,440 
   Professional Fees 401  582 -31.1% 485 
   Courier Service 745  671 11.0% 611 
   Other Noninterest Expense 3,706  3,274 13.2% 3,975 
     Total Noninterest Expense 25,650  24,767 3.6% 25,839 
      
 Income Before Income Taxes 56,946  47,366 20.2% 54,743 
 Income Tax Provision 15,345  12,606 21.7% 14,495 
 Net Income$41,601 $34,760 19.7%$40,248 
      
 Average Common Shares Outstanding 26,648  26,906 -1.0% 26,648 
 Diluted Average Common Shares Outstanding 26,650  26,916 -1.0% 26,648 
      
 Per Common Share Data:    
   Basic Earnings$1.56 $1.29 20.9%$1.51 
   Diluted Earnings 1.56  1.29 20.9% 1.51 
   Dividends Paid 0.44  0.42 4.8% 0.42 
      
    % 
  9/30’23YTD9/30’22YTDChange 
 Interest & Fee Income:    
 Loans$35,510 $37,481 -5.3% 
 Equity Securities 456  384 18.8% 
 Debt Securities Available for Sale 142,256  99,430 43.1% 
 Debt Securities Held to Maturity 26,758  10,040 166.5% 
 Interest-Bearing Cash 7,981  5,223 52.8% 
     Total Interest & Fee Income 212,961  152,558 39.6% 
      
 Interest Expense:    
   Transaction Deposits 329  273 20.5% 
   Savings Deposits 1,562  861 81.4% 
   Time Deposits 244  249 -2.0% 
   Short-Term Borrowed Funds 76  67 13.4% 
     Total Interest Expense 2,211  1,450 52.5% 
      
 Net Interest Income 210,750  151,108 39.5% 
      
 Reversal of Provision for Credit Losses (2) (1,150) - n/m 
      
 Noninterest Income:    
   Service Charges on Deposit Accounts 10,629  11,006 -3.4% 
   Merchant Processing Services 8,417  8,922 -5.7% 
   Debit Card Fees (1) 5,118  6,175 -17.1% 
   Trust Fees 2,358  2,462 -4.2% 
   ATM Processing Fees 1,996  1,514 31.8% 
   Other Service Fees 1,320  1,392 -5.2% 
   Financial Services Commissions 270  314 -14.0% 
   Life Insurance Gains 278  923 n/m 
   Securities Losses (125) - n/m 
   Other Operating 2,269  1,950 16.4% 
     Total Noninterest Income 32,530  34,658 -6.1% 
      
 Noninterest Expense:    
   Salaries and Related Benefits 35,715  34,643 3.1% 
   Occupancy and Equipment 15,562  14,666 6.1% 
   Outsourced Data Processing 7,405  7,294 1.5% 
   Limited Partnership Operating Losses 4,314  4,293 0.5% 
   Professional Fees 1,362  2,054 -33.7% 
   Courier Service 1,971  1,914 3.0% 
   Other Operating 11,370  9,407 20.9% 
     Total Noninterest Expense 77,699  74,271 4.6% 
      
 Income Before Income Taxes 166,731  111,495 49.5% 
 Income Tax Provision 44,431  28,805 54.2% 
 Net Income$122,300 $82,690 47.9% 
      
 Average Common Shares Outstanding 26,718  26,889 -0.6% 
 Diluted Average Common Shares Outstanding 26,721  26,901 -0.7% 
      
 Per Common Share Data:    
 Basic Earnings$4.58 $3.08 48.7% 
 Diluted Earnings 4.58  3.07 49.2% 
 Dividends Paid 1.28  1.26 1.6% 
      
 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 September 30, 2023 and June 30, 2023, and $7 thousand at September 30, 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