Item 6

Adverse effects of changes in banking or other laws and regulations or governmental fiscal or monetary policies could adversely affect the Company.[Reserved]

Item 7

The Company is subject to significant federal and state regulation and supervision, which is primarily for the benefit and protection of the Company’s customers and not for the benefit of investors. In the past, the Company’s business has been materially affected by these regulations.

Laws, regulations or policies, including accounting standards and interpretations currently affecting the Company and the Company’s subsidiaries, may change at any time. Regulatory authorities may also change their interpretation of these statutes and regulations. Therefore, the Company’s business may be adversely affected by any future changes in laws, regulations, policies or interpretations or regulatory approaches to compliance and enforcement including future acts of terrorism, major U.S. corporate bankruptcies and reports of accounting irregularities at U.S. public companies.

Additionally, the Company’s business is affected significantly by the fiscal and monetary policies ofthe federal government and its agencies. The Company is particularly affected by the policies of the FRB, which regulates the supply of money and credit in the United States of America. Among the instruments of monetary policy available to the FRB are (a) conducting open market operations in U.S. government securities, (b) changing the discount rates of borrowings by depository institutions, (c) changing interest rates paid on balances financial institutions deposit with the FRB, and (d) imposing or changing reserve requirements against certain borrowings by banks and their affiliates. These methods are used in varying degrees and combinations to directly affect the availability of bank loans and deposits, as well as the interest rates charged on loans and paid on deposits. The policies of the FRB may have a material effect on the Company’s business, results of operations and financial condition. Under long- standing policy of the FRB, a BHC is expected to act as a source of financial strength for its subsidiary banks. As a result of that policy, the Company may be required to commit financial and other resources to its subsidiary bank in circumstances where the Company might not otherwise do so.

Federal and state governments could pass legislation detrimental to the Company’s performance.

As an example, the Company could experience higher credit losses because of federal or state legislation or regulatory action that reduces the amount the Bank's borrowers are otherwise contractually required to pay under existing loan contracts. Also, the Company could experience higher credit losses because of federal or state legislation or regulatory action that limits or delays the Bank's ability to foreclose on property or other collateral or makes foreclosure less economically feasible. Federal, state and local governments could pass tax legislation causing the Company to pay higher levels of taxes.

The FDIC insures deposits at insured financial institutions up to certain limits. The FDIC charges insured financial institutions premiums to maintain the Deposit Insurance Fund. The FDIC may increase premium assessments to maintain adequate funding of the Deposit Insurance Fund.

The behavior of depositors in regard to the level of FDIC insurance could cause our existing customers to reduce the amount of deposits held at the Bank, and could cause new customers to open deposit accounts at the Bank. The level and composition of the Bank's deposit portfolio directly impacts the Bank's funding cost and net interest margin.

Systems, Accounting and Internal Control Risks

The accuracy of the Company’s judgments and estimates about financial and accounting matters will impact operating results and financial condition.

The discussion under “Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical

Item 7A

Quantitative and Qualitative Disclosures About Market Risk

Item 8

Financial Statements and Supplementary Data

Item 9

Changes in and Disagreements with Accountants on Accounting Policies”and Financial Disclosure

Item 9A

Controls and Procedures

Item 9B

Other Information

Item 9C

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

PART III

Item 10

Directors, Executive Officers and Corporate Governance

Item 11

Executive Compensation

Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13

Certain Relationships, Related Transactions and Director Independence

Item 14

Principal Accountant Fees and Services

PART IV

Item 15

Exhibits, Financial Statement Schedules

Item 16

Form 10-K Summary

Signatures

FORWARD-LOOKING STATEMENTS

This Report on Form 10-K contains forward-looking statements about Westamerica Bancorporation for which it claims the protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, future credit quality and performance, the appropriateness of the allowance for credit losses, loan growth or reduction, mitigation of risk in the Company’s loan and investment securities portfolios, income or loss, earnings or loss per share, the payment or nonpayment of dividends, stock repurchases, capital structure and other financial items; (ii) statements of plans, objectives and expectations of the Company or its management or board of directors, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as "believes", "anticipates", "expects", “estimates”, "intends", "targeted", "projected", “forecast”, "continue", "remain", "will", "should", "may" and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

These forward-looking statements are based on the current knowledge and belief of the management (“Management”) of Westamerica Bancorporation (the “Company”) and include information concerning the Company’s possible or assumed future financial condition and results of operations. A number of factors, some of which are beyond the Company’s ability to predict or control, could cause future results to differ materially from those contemplated.

These factors include but are not limited to (1) the length and severity of any difficulties in the global, national and California economies and the effects of government efforts to address those difficulties; (2) liquidity levels in capital markets; (3) fluctuations in asset prices including, but not limited to stocks, bonds, real estate, and commodities; (4) the effect of acquisitions and integration of acquired businesses; (5) economic uncertainty created by riots, terrorist threats and attacks on the United States, the actions taken in response, and the uncertain effect of these events on the local, regional and national economies; (6) changes in the interest rate environment and monetary policy; (7) changes in the regulatory environment; (8) competitive pressure in the banking industry; (9) operational risks including a failure or breach in data processing or security systems or those of third party vendors and other service providers, including as a result of cyber attacks or fraud; (10) volatility of interest rate sensitive loans, deposits and investments, particularly the impact of rising interest rates on the Company’s securities portfolio; (11) asset/liability management risks; (12) liquidity risks including the impact of recent adverse developments in the banking industry; (13) the effect of climate change, natural disasters, including earthquakes, hurricanes, fire, flood, drought, and other disasters, on the uninsured value of the Company’s assets and of loan collateral, the financial condition of debtors and issuers of investment securities, the economic conditions affecting the Company’s market place, and commodities and asset values; (14) changes in the securities markets; (15) the duration and severity of pandemics and governmental and customer responses; (16) inflation and (17) the outcome of contingencies, such as legal proceedings. However, the reader should not consider the above-mentioned factors to be a complete set of all potential risks or uncertainties.

Forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to update any forward-looking statements in this report to reflect circumstances or events that occur after the date forward looking statements are made, except as may be required by law. The reader is directed to Part II – Item 1A “Risk Factors” of this report and other risk factors discussed elsewhere in this report, for further discussion of factors which could affect the Company's business and cause actual results to differ materially from those expressed in any forward-looking statement made in this report.

PART I

ITEM 1. BUSINESS

Westamerica Bancorporation (the “Company”) is a bank holding company registered under the Bank Holding Company Act of 1956, as amended (“BHCA”). Its legal headquarters are located at 1108 Fifth Avenue, San Rafael, California 94901. Its principal administrative offices are located at 4550 Mangels Boulevard, Fairfield, California 94534, its telephone number is (707) 863-6000 and its website address is www.westamerica.com. The Company provides a full range of banking services to individual and commercial customers in Northern and Central California through its subsidiary bank, Westamerica Bank (the “Bank”). The Bank is a California-chartered commercial bank whose deposit are insured by the Federal Deposit Insurance Corporation (the “FDIC”) up to applicable limits. The principal communities served are located in Northern and Central California, from Mendocino, Lake and Nevada Counties in the north to Kern County in the south. The Company’s strategic focus is on the banking needs of small businesses. In addition, the Bank owns 100% of the capital stock of Community Banker Services Corporation (“CBSC”), a company engaged in providing the Company and its subsidiaries with data processing services and other support functions.

The Company was incorporated under the laws of the State of California in 1972 as “Independent Bankshares Corporation” pursuant to a plan of reorganization among three previously unaffiliated Northern California banks. The Company operated as a multi-bank holding company until mid-1983, at which time the then six subsidiary banks were merged into a single bank named Westamerica Bank and the name of the holding company was changed to Westamerica Bancorporation.

The Company acquired five banks within its immediate market area during the early to mid 1990’s. In April 1997, the Company acquired ValliCorp Holdings, Inc., parent company of ValliWide Bank, the largest independent bank holding company headquartered in Central California. Under the terms of all of the merger agreements, the Company issued shares of its common stock in exchange for all of the outstanding shares of the acquired institutions. The subsidiary banks acquired were merged with and into the Bank. These six aforementioned business combinations were accounted for as poolings-of-interests.

During the period 2000 through 2005, the Company acquired three additional banks. These acquisitions were accounted for using the purchase accounting method.

In 2009 and 2010, the Bank acquired the banking operations of two failed banks, the former County Bank and Sonoma Valley Bank, from the Federal Deposit Insurance Corporation (“FDIC”). The acquired assets and assumed liabilities from the FDIC were measured at estimated fair values, as required by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations.

At December 31, 2023, the Company had consolidated assets of approximately $6.4 billion, deposits of approximately $5.5 billion and shareholders’ equity of approximately $773 million.

The Company assesses and is careful to address potential health, safety, and environmental risks. The Company cares for the environment and works to mitigate pollution and the potential risks related to climate change by implementing practices such as recycling and reusing materials, and controlling energy usage.

The Company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports as well as beneficial ownership reports on Forms 3, 4 and 5 are available through the SEC’s website (https://www.sec.gov). Such documents as well as the Company’s director, officer and employee Code of Conduct and Ethics are also available free of charge from the Company by request to:

Westamerica Bancorporation

Corporate Secretary A-2M

Post Office Box 1200

Suisun City, California 94585-1200

Human Capital Resources

The Company and its subsidiaries employed 641 full-time equivalent staff or 669 employees as of December 31, 2023. The employees are not represented by a collective bargaining unit, and the Company believes its relationship with its employees is good.

The Company’s ability to attract and retain employees is a key to its success. Employees receive a comprehensive benefits package that includes paid time off, sick time, company contributions of up to 6% to qualified retirement plans, discretionary profit-sharing retirement plan contributions, and other health and wellness benefits including participation in Company paid or subsidized medical, dental, term-life, accidental death and dismemberment (AD&D), long-term disability, and employee assistance programs. Certain employees participate in one of the Company’s performance-based incentive programs, which may include additional bonus and incentive compensation, company contributions to supplemental retirement plans, and equity-based awards. Certain benefits are subject to eligibility, vesting, and performance requirements. Employee performance is measured at least quarterly and formal performance evaluations are conducted at least annually.

The Company’s code of ethics prohibits discrimination or harassment. The Company requires all employees to agree to the code of ethics and participate in harassment prevention training annually.

Supervision and Regulation

The following is not intended to be an exhaustive description of the statutes and regulations applicable to the Company’s or the Bank’s business. The description of statutory and regulatory provisions is qualified in its entirety by reference to the particular statutory or regulatory provisions. Moreover, major new legislation and other regulatory changes affecting the Company, the Bank, and the financial services industry in general have occurred in the last several years and can be expected to occur in the future. The nature, timing and impact of new and amended laws and regulations cannot be accurately predicted.

Regulation and Supervision of Bank Holding Companies

The Company is a bank holding company that is subject to the BHCA. The Company files reports with and is subject to examination and supervision by the Board of Governors of the Federal Reserve System (“FRB”). The FRB also has the authority to examine the Company’s subsidiaries. The Company is a bank holding company within the meaning of Section 3700 of the California Financial Code. As such, the Company and the Bank are subject to examination by, and may be required to file reports with, the Commissioner of the California Department of Financial Protection and Innovation (the “Commissioner”).

The FRB has significant supervisory and regulatory authority over the Company and its affiliates. Among other things, the FRB requires the Company to maintain certain levels of capital. See “Capital Standards.” The FRB also has the authority to take enforcement action against any bank holding company that commits any unsafe or unsound practice, or violates certain laws, regulations or conditions imposed in writing by the FRB. Under the BHCA, the Company is required to obtain the prior approval of the FRB before it acquires, merges or consolidates with any bank or bank holding company. Any company seeking to acquire control of or to merge or consolidate with the Company also would be required to obtain the prior approval of the FRB.

The Company is generally prohibited under the BHCA from acquiring ownership or control of more than 5% of any class of voting shares of any company that is not a bank or bank holding company and from engaging directly or indirectly in activities other than banking, managing banks, or providing services to affiliates of the holding company. However, a bank holding company, with the approval of the FRB, may engage, or acquire the voting shares of companies engaged, in activities that the FRB has determined to be closely related to banking or managing or controlling banks. A bank holding company must demonstrate that the benefits to the public of the proposed activity will outweigh the possible adverse effects associated with such activity.

The FRB generally prohibits a bank holding company from declaring or paying a cash dividend that would impose undue pressure on the capital of subsidiary banks or would be funded only through borrowing or other arrangements which might adversely affect a bank holding company’s financial position. Under the FRB policy, a bank holding company should not continue its existing rate of cash dividends on its common stock unless its net income is sufficient to fully fund each dividend and its prospective rate of earnings retention appears consistent with its capital needs, asset quality and overall financial condition. See the section entitled “Restrictions on Dividends and Other Distributions” for additional restrictions on the ability of the Company and the Bank to pay dividends.

Transactions between the Company and the Bank are restricted under the FRB’s Regulation W and Sections 23A and 23B of the Federal Reserve Act. In general, subject to certain specified exemptions, a bank or its subsidiaries are limited in their ability to engage in “covered transactions” with affiliates: (a) to an amount equal to 10% of the bank’s capital and surplus, in the case of covered transactions with any one affiliate; and (b) to an amount equal to 20% of the bank’s capital and surplus, in the case of covered transactions with all affiliates. The Company is considered to be an affiliate of the Bank. A “covered transaction” includes, among other things, a loan or extension of credit to an affiliate; a purchase of securities issued by an affiliate; a purchase of assets from an affiliate, with some exceptions; and the issuance of a guarantee, acceptance or letter of credit on behalf of an affiliate.

Federal regulations governing bank holding companies and change in bank control (Regulation Y) provide for a streamlined and expedited review process for bank acquisition proposals submitted by well-run bank holding companies. These provisions of Regulation Y are subject to numerous qualifications, limitations and restrictions. In order for a bank holding company to qualify as “well-run,” both it and the insured depository institutions which it controls must meet the “well capitalized” and “well managed” criteria set forth in Regulation Y.

The Gramm-Leach-Bliley Act (the “GLBA”), or the Financial Services Act of 1999, repealed provisions of the Glass-Steagall Act, which had prohibited commercial banks and securities firms from affiliating with each other and engaging in each other’s businesses. Thus, many of the barriers prohibiting affiliations between commercial banks and securities firms have been eliminated.

The BHCA was also amended by the GLBA to allow new “financial holding companies” (“FHCs”) to offer banking, insurance, securities and other financial products to consumers. Specifically, the GLBA amended section 4 of the BHCA in order to provide for a framework for the engagement in new financial activities. A bank holding company (“BHC”) may elect to become an FHC if all its subsidiary depository institutions are well capitalized and well managed. If these requirements are met, a BHC may file a certification to that effect with the FRB and declare that it elects to become an FHC. After the certification and declaration is filed, the FHC may engage either de novo or through an acquisition in any activity that has been determined by the FRB to be financial in nature or incidental to such financial activity. BHCs may engage in financial activities without prior notice to the FRB if those activities qualify under the list of permissible activities in section 4(k) of the BHCA. However, notice must be given to the FRB within 30 days after an FHC has commenced one or more of the financial activities. The Company has not elected to become an FHC.

Regulation and Supervision of Banks

The Bank is a California state-chartered Federal Reserve member bank and its deposits are insured by the FDIC. The Bank is subject to regulation, supervision and regular examination by the California Department of Financial Protection and Innovation and the FRB. The regulations of these agencies affect most aspects of the Bank’s business and prescribe permissible types of loans and investments, the amount of required reserves, requirements for branch offices, the permissible scope of its activities and various other requirements.

In addition to federal banking law, the Bank is also subject to applicable provisions of California law. Under California law, the Bank is subject to various restrictions on, and requirements regarding, its operations and administration including the maintenance of branch offices and automated teller machines, capital requirements, deposits and borrowings, and investment and lending activities.

In addition, the Federal Deposit Insurance Corporation Improvement Act (“FDICIA”) imposes limitations on the activities and equity investments of state chartered, federally insured banks. FDICIA also prohibits a state bank from making an investment or engaging in any activity as a principal that is not permissible for a national bank, unless the Bank is adequately capitalized and the FDIC approves the investment or activity after determining that such investment or activity does not pose a significant risk to the deposit insurance fund.

On July 21, 2010, financial regulatory reform legislation entitled the "Dodd-Frank Wall Street Reform and Consumer Protection Act" (the "Dodd-Frank Act") was signed into law. The Dodd-Frank Act implemented far-reaching changes across the financial regulatory landscape, including provisions that, among other things:

Provisions in the legislation that affect the payment of interest on demand deposits and interchange fees may increase the costs associated with deposits as well as place limitations on certain revenues those deposits may generate.

Capital Standards

The federal banking agencies have adopted pursuant the Dodd-Frank Act, which are risk-based capital adequacy guidelines intended to provide a measure of capital adequacy that reflects the degree of risk associated with a banking organization’s operations for both transactions resulting in assets being recognized on the balance sheet as assets, and the extension of credit facilities such as letters of credit and recourse arrangements, which are recorded as off balance sheet items. Under these guidelines, nominal dollar amounts of assets and credit equivalent amounts of off balance sheet items are multiplied by one of several risk adjustment percentages, which range from 0% for assets with low credit risk, such as certain U.S. government securities, to 1250% for assets with relatively higher credit risk, such as certain securitizations. A banking organization’s risk-based capital ratios are obtained by dividing its qualifying capital by its total risk-adjusted assets and off balance sheet items.

The federal banking agencies take into consideration concentrations of credit risk and risks from nontraditional activities, as well as an institution’s ability to manage those risks, when determining the adequacy of an institution’s capital. This evaluation is made as a part of the institution’s regular safety and soundness examination. The federal banking agencies also consider interest rate risk (related to the interest rate sensitivity of an institution’s assets and liabilities, and its off balance sheet financial instruments) in the evaluation of a bank’s capital adequacy.

On July 2, 2013, the Federal Reserve Board approved a final rule that implements changes to the regulatory capital framework for all banking organizations over a transitional period 2015 through 2018. As of December 31, 2023, the Company’s and the Bank’s respective regulatory capital ratios exceeded applicable regulatory minimum capital requirements. See Note 9 to the consolidated financial statements included in this Report for capital ratios of the Company and the Bank, compared to minimum capital requirements and for the Bank the standards for well capitalized depository institutions.

In November 2019, the federal banking regulators published final rules implementing community bank leverage ratio, which is a simplified measure of capital adequacy for certain banking organizations that have less than $10 billion in total consolidated assets. A qualifying community banking organization that elects to use the community bank leverage ratio framework and that maintains a leverage ratio of greater than 9% is considered to have satisfied the generally applicable risk-based and leverage capital requirements and, if applicable, is considered to have met the “well capitalized” ratio requirements for purposes of its primary federal regulator’s prompt corrective action rules, discussed below. The Company does not have any immediate plans to elect to use the community bank leverage ratio framework but may make such an election in the future.

See the sections entitled “Capital Resources and Capital to Risk-Adjusted Assets” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information.

Prompt Corrective Action and Other Enforcement Mechanisms

FDICIA requires each federal banking agency to take prompt corrective action to resolve the problems of insured depository institutions, including but not limited to those that fall below one or more prescribed minimum capital ratios.

An institution that, based upon its capital levels, is classified as “well capitalized,” “adequately capitalized” or “undercapitalized” may be treated as though it were in the next lower capital category if the appropriate federal banking agency, after notice and opportunity for hearing, determines that an unsafe or unsound condition or an unsafe or unsound practice warrants such treatment. At each successive lower capital category, an insured depository institution is subject to more restrictions. In addition to measures taken under the prompt corrective action provisions, commercial banking organizations may be subject to potential enforcement actions by the federal banking agencies for unsafe or unsound practices in conducting their businesses or for violations of any law, rule, regulation or any condition imposed in writing by the agency or any written agreement with the agency.

Safety and Soundness Standards

FDICIA has implemented certain specific restrictions on transactions and required federal banking regulators to adopt overall safety and soundness standards for depository institutions related to internal control, loan underwriting and documentation, and asset growth. Among other things, FDICIA limits the interest rates paid on deposits by undercapitalized institutions, restricts the use of brokered deposits, limits the aggregate extensions of credit by a depository institution to an executive officer, director, principal shareholder or related interest, and reduces deposit insurance coverage for deposits offered by undercapitalized institutions for deposits by certain employee benefits accounts. The federal banking agencies may require an institution to submit an acceptable compliance plan as well as have the flexibility to pursue other more appropriate or effective courses of action given the specific circumstances and severity of an institution’s noncompliance with one or more standards.

Federal banking agencies require banks to maintain adequate valuation allowances for potential credit losses. The Company has an internal staff that continually reviews loan quality and reports to the Board of Directors. This analysis includes a detailed review of the classification and categorization of problem loans, assessment of the overall quality and collectability of the loan portfolio, consideration of loan loss experience, trends in problem loans, concentration of credit risk, and current economic conditions, particularly in the Bank’s market areas. Based on this analysis, Management, with the review and approval of the Board, determines the adequate level of allowance required. The allowance is allocated to different segments of the loan portfolio, but the entire allowance is available for the loan portfolio in its entirety.

Restrictions on Dividends and Other Distributions

The Company’s ability to pay dividends to its shareholders is subject to the restrictions set forth in the California General Corporation Law (“CGCL”). The CGCL provides that a corporation may make a distribution to its shareholders if (i) the corporation’s retained earnings equal or exceed the amount of the proposed distribution plus unpaid accrued dividends (if any) on securities with a dividend preference, or (ii) immediately after the dividend, the corporation’s total assets equal or exceed total liabilities plus unpaid accrued dividends (if any) on securities with a dividend preference.

The Company’s ability to pay dividends depends in part on the Bank’s ability to pay cash dividends to the Company. The power of the board of directors of an insured depository institution to declare a cash dividend or other distribution with respect to capital is subject to statutory and regulatory restrictions which limit the amount available for such distribution depending upon the earnings, financial condition and cash needs of the institution, as well as general business conditions. FDICIA prohibits insured depository institutions from paying management fees to any controlling persons or, with certain limited exceptions, making capital distributions, including dividends, if, after such transaction, the institution would be undercapitalized.

In addition to the restrictions imposed under federal law, banks chartered under California law generally may only pay cash dividends to the extent such payments do not exceed the lesser of retained earnings of the bank or the bank’s net income for its last three fiscal years (less any distributions to shareholders during this period). In the event a bank desires to pay cash dividends in excess of such amount, the bank may pay a cash dividend with the prior approval of the Commissioner in an amount not exceeding the greatest of the bank’s retained earnings, the bank’s net income for its last fiscal year or the bank’s net income for its current fiscal year.

The federal banking agencies also have the authority to prohibit a depository institution or its holding company from engaging in business practices which are considered to be unsafe or unsound, possibly including payment of dividends or other payments under certain circumstances even if such payments are not expressly prohibited by statute. The Federal Reserve Board has issued guidance indicating its expectations that a bank holding company will inform and consult with Federal Reserve supervisory staff sufficiently in advance of (i) declaring and paying a dividend that could raise safety and soundness concerns (e.g., declaring and paying a dividend that exceeds earnings for the period for which the dividend is being paid); (ii) redeeming or repurchasing regulatory capital instruments when the bank holding company is experiencing financial weaknesses; or (iii) redeeming or repurchasing common stock or perpetual preferred stock that would result in a net reduction as of the end of the quarter in the amount of such equity instruments outstanding compared with the beginning of the quarter in which the redemption or repurchase occurred.

Premiums for Deposit Insurance and FDIC Regulation

Substantially all of the deposits of the Bank are insured up to applicable limits by the FDIC’s Deposit Insurance Fund (“DIF”) and are subject to deposit insurance assessments to maintain the DIF. The FDIC utilizes a risk-based assessment system that imposes insurance premiums based upon a risk matrix that takes into account a bank's capital level, asset quality and supervisory rating.

In July 2010, Congress in the Dodd-Frank Act increased the minimum for the DIF reserve ratio, the ratio of the amount in the fund to insured deposits, from 1.15% to 1.35% and required that the ratio reach that level by September 30, 2020. Further, the Dodd-Frank Act made banks with $10 billion or more in assets responsible for the increase from 1.15% to 1.35%, among other provisions.

Extraordinary growth in insured deposits during the first and second quarters of 2020 caused the DIF reserve ratio to decline below the statutory minimum of 1.35%. The Federal Deposit Insurance Act (the “FDI Act”) requires that the FDIC’s Board of Directors adopt a restoration plan when the DIF reserve ratio falls below 1.35% or is expected to within 6 months. Under the FDI Act, the restoration plan must restore the reserve ratio to at least 1.35% within 8 years of establishing the Plan, absent extraordinary circumstances. The FDIC established the following Restoration Plan (the “Plan”) on September 15, 2020.

The Plan was amended in June 2022, to restore the DIF reserve ratio to at least 1.35% by September 30, 2028. On October 18, 2022 the FDIC adopted a final rule to increase initial base deposit insurance assessment rates for insured depository institutions by 2 basis points, beginning with the first quarterly assessment period of 2023. The increased assessment rate schedules will remain in effect unless and until the reserve ratio of the DIF meets or exceeds 2%. A significant increase in DIF insurance premiums would have an adverse effect on the operating expenses and results of operations of the Bank. The Company cannot provide any assurance as to the effect of any future changes in its deposit insurance premium rates.

While the FDIC is not Bank's primary federal regulator, as the insurer of the Bank's deposits, the FDIC is authorized to conduct examinations of and to require reporting by FDIC-insured institutions. It also may prohibit any FDIC-insured institution from engaging in any activity the FDIC determines by regulation or order poses a serious risk to the DIF. The FDIC also has authority to initiate enforcement actions against any FDIC-insured institution after giving its primary federal regulator the opportunity to take such action, and may seek to terminate the deposit insurance if it determines that the institution has engaged in unsafe or unsound practices or is in an unsafe or unsound condition. Finally, the FDIC may terminate deposit insurance upon a finding that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order, or condition imposed by the FDIC.

Economic Growth, Regulatory Relief and Consumer Protection Act

On May 24, 2018, President Trump signed into law the first major financial services reform bill since the enactment of the Dodd-Frank Act. The Economic Growth, Regulatory Relief, and Consumer Protection Act (the “Relief Act”) modifies or eliminates certain requirements on community and regional banks and nonbank financial institutions.  For instance, under the Relief Act and related rule making:

Community Reinvestment Act and Fair Lending Laws

The Bank is subject to certain fair lending requirements and reporting obligations involving home mortgage lending operations and Community Reinvestment Act (“CRA”) activities. The CRA generally requires the federal banking agencies to evaluate the record of financial institutions in meeting the credit needs of their local communities, including low and moderate income neighborhoods. In addition to substantive penalties and corrective measures that may be required for a violation of certain fair lending laws, the federal banking agencies may take compliance with such laws and CRA into account when regulating and supervising other activities including merger applications. In May 2022, the federal banking agencies released for public comment proposed rules to modernize CRA regulations. The Company continues to evaluate the impact of any changes to the CRA regulations.

Financial Privacy Legislation and Customer Information Security

The GLBA, in addition to the previously described changes in permissible nonbanking activities permitted to banks, BHCs and FHCs, also required the federal banking agencies, among other federal regulatory agencies, to adopt regulations governing the privacy of consumer financial information. The Bank is subject to the FRB’s regulations in this area. The federal bank regulatory agencies have established standards for safeguarding nonpublic personal information about customers that implement provisions of the GLBA (the “Guidelines”). Among other things, the Guidelines require each financial institution, under the supervision and ongoing oversight of its Board of Directors or an appropriate committee thereof, to develop, implement and maintain a comprehensive written information security program designed to ensure the security and confidentiality of customer information, to protect against any anticipated threats or hazards to the security or integrity of such information, and to protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer.

Anti-Money Laundering Laws

The Bank Secrecy Act, as amended by the USA PATRIOT Act, gives the federal government powers to address money laundering and terrorist threats through enhanced domestic security measures, expanded surveillance powers and mandatory transaction reporting obligations. The Bank Secrecy Act and related regulations require financial institutions to report currency transactions that exceed certain thresholds and transactions determined to be suspicious, establish due diligence requirements for accounts and take certain steps to verify customer identification when accounts are opened. The Bank Secrecy Act also requires financial institutions to develop and maintain a program reasonably designed to ensure and monitor compliance with its requirements, to train employees to comply with and to test the effectiveness of the program. Any failure to meet the requirements of the Bank Secrecy Act can result in the imposition of substantial penalties and in adverse regulatory action against the offending bank.

The Anti-Money Laundering Act of 2020 (“AMLA”), which amends the Bank Secrecy Act, was enacted in January 2021. The AMLA is a comprehensive reform and modernization to U.S. bank secrecy and anti-money laundering laws. Among other things, it codifies a risk-based approach to anti-money laundering compliance for financial institutions; requires the development of standards for evaluating technology and internal processes for Bank Secrecy Act compliance; expands enforcement and investigative authority, including increasing available sanctions for certain Bank Secrecy Act violations and instituting Bank Secrecy Act whistleblower incentives and protections.

Programs To Mitigate Identity Theft

In November 2007, federal banking agencies together with the National Credit Union Administration and Federal Trade Commission adopted regulations under the Fair and Accurate Credit Transactions Act of 2003 to require financial institutions and other creditors to develop and implement a written identity theft prevention program to detect, prevent and mitigate identity theft in connection with certain new and existing accounts. Covered accounts generally include consumer accounts and other accounts that present a reasonably foreseeable risk of identity theft. Each institution’s program must include policies and procedures. The Company maintains controls and procedures to mitigate against risks such as processing system failures and errors, and customer or employee fraud, and maintains insurance coverage for certain of these risks. Any system of controls and procedures, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met. Events could occur which are not prevented or detected by the Company’s internal controls or are not insured against or are in excess of the Company’s insurance limits or insurance underwriters’ financial capacity. Any failure or circumvention of the Company’s controls and procedures or failure to comply with regulations related to controls and procedures designed to: (i) identify indicators, or “red flags,” of possible risk of identity theft; (ii) detect the occurrence of red flags; (iii) respond appropriately to red flags that are detected; and (iv) ensure that the program is updated periodically as appropriate to address changing circumstances. The regulations include guidelines that each institution must consider and, to the extent appropriate, include in its program.

Pending Legislation

Changes to state laws and regulations (including changes in interpretation or enforcement) can affect the operating environment of BHCs and their subsidiaries in substantial and unpredictable ways. From time to time, various legislative and regulatory proposals are introduced. These proposals, if codified, may change banking statutes and regulations and the Company’s operating environment in substantial and unpredictable ways. If codified, these proposals could increase or decrease the cost of doing business, limit or expand permissible activities or affect the competitive balance among banks, savings associations, credit unions and other financial institutions. The Company cannot accurately predict whether those changes in laws and regulations will occur, and, if those changes occur, the ultimate effect they would have upon its financial condition or results of operations. It is likely, however, that the current level of enforcement and compliance-related activities of federal and state authorities will continue and potentially increase.

Competition

The Bank’s principal competitors for deposits and loans are major banks and smaller community banks, savings and loan associations and credit unions. To a lesser extent, competitors include thrift and loans, mortgage brokerage companies and insurance companies. Other institutions, such as brokerage houses, mutual fund companies, credit card companies, and certain retail establishments offer investment vehicles that also compete with banks for deposit business. Federal legislation in recent years has encouraged competition between different types of financial institutions and fostered new entrants into the financial services market.

Legislative changes, as well as technological and economic factors, can be expected to have an ongoing impact on competitive conditions within the financial services industry. While the future impact of regulatory and legislative changes cannot be predicted with certainty, the business of banking will remain highly competitive.

ITEM 1A. RISK FACTORS

Readers and prospective investors in the Company’s securities should carefully consider the following risk factors as well as the other information contained or incorporated by reference in this Report.

The risks and uncertainties described below are not the only ones facing the Company. Additional risks and uncertainties that Management is not aware of or focused on or that Management currently deems immaterial may also impair the Company’s business operations. This Report is qualified in its entirety by these risk factors.

If any of the following risks actually occur, the Company’s financial condition and results of operations could be materially and adversely affected. If this were to happen, the value of the company’s securities could decline significantly, and investors could lose all or part of their investment in the Company’s common stock.

Market and Interest Rate Risk

Changes in interest rates could reduce income and cash flow.

The Company’s income and cash flow depend to a great extent on the difference between the interest earned on loans and investment securities and the interest paid on deposits and other borrowings, and the Company’s success in competing for loans and deposits. The Company cannot control or prevent changes in the level of interest rates which fluctuate in response to general economic conditions, the policies of various governmental and regulatory agencies, in particular, the Federal Open Market Committee of the Federal Reserve Board (the” FOMC”), and pricing practices of the Company’s competitors. Changes in monetary policy, including changes in interest rates, will influence the origination of loans, the purchase of investments, the generation of deposits and other borrowings, and the rates received on loans and investment securities and paid on deposits and other liabilities. The discussion in this Report under “Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations – Asset, Liability and Market Risk Management” and “- Liquidity and Funding” and “Item 7A, Quantitative and Qualitative Disclosures About Market Risk” is incorporated by reference in this paragraph.

The Company could realize losses if it were required to sell securities in its held-to-maturity securities portfolio to meet liquidity needs.

As a result of increases in interest rates over the last year, the market value of previously issued government and other debt securities has declined significantly, resulting in unrealized losses in the held-to-maturity portion of the Company’s securities portfolios. While the Company does not currently expect or intend to sell these securities, if the Company were required to sell such securities to meet liquidity needs, it may incur losses, which could impair the Company’s capital financial condition and results of operations. Further, while the Company has taken actions to maximize its funding sources, there is no guarantee that such funding sources will be available or sufficient in the event of sudden liquidity needs.

Changes in capital market conditions could reduce asset valuations.

Capital market conditions, including interest rates, liquidity, investor confidence, bond issuer credit worthiness, perceived counter-party risk, the supply of and demand for financial instruments, the financial strength of market participants, and other factors can materially impact the value of the Company’s assets. An impairment in the value of the Company’s assets could result in asset write-downs, reducing the Company’s asset values, earnings, and equity.

The value of securities in the Company’s investment securities portfolio may be negatively affected by disruptions in securities markets.

The market for some of the investment securities held in the Company’s portfolio can be extremely volatile. Volatile market conditions may detrimentally affect the value of these securities, such as through reduced valuations due to the perception of heightened credit and liquidity risks. There can be no assurance that the declines in market value will not result in other than temporary impairments of these assets, which would lead to loss recognition that could have a material adverse effect on the Company’s net income and capital levels.

Negative developments affecting the banking industry, such as bank failures, may have a material adverse effect on the Company.

The banking industry could experience significant volatility with multiple bank failures during 2023. Industrywide concerns could develop related to liquidity, deposit outflows and unrealized losses on investment debt securities. While the Company cannot predict with certainty whether or how these developments may affect the banking industry, the Company faces the risks of increased FDIC deposit insurance premium expenses; increased regulation or supervisory scrutiny; and decreased confidence in banks among depositors and investors, any of which could, adversely affect the trading price of the Company’s common stock, its ability to manage its liquidity or its ability to effectively fund its operations. Any one or a combination of such risk factors, or other factors, could materially adversely affect the Company's business, financial condition, results of operations and prospects.

The weakness of other financial institutions could adversely affect the Company.

Financial services institutions are interrelated as a result of trading, clearing, counterparty, or other relationships. The Company routinely executes transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, and other institutional clients. Many of these transactions expose the Company to credit risk in the event of default of the Company’s counterparty or client. In addition, the Company’s credit risk may be increased when the collateral the Company holds cannot be realized or is liquidated at prices not sufficient to recover the full amount of the secured obligation. There is no assurance that any such losses would not materially and adversely affect the Company’s results of operations or earnings.

Shares of Company common stock eligible for future sale or grant of stock options and other equity awards could have a dilutive effect on the market for Company common stock and could adversely affect the market price.

The Articles of Incorporation of the Company authorize the issuance of 150 million shares of common stock (and two additional classes of 1 million shares each, denominated “Class B Common Stock” and “Preferred Stock”, respectively) of which approximately 26.7 million shares of common stock were outstanding at December 31, 2023. Pursuant to its stock option plans, at December 31, 2023, the Company had outstanding options for 973 thousand shares of common stock, of which 614 thousand were currently exercisable. As of December 31, 2023, 705 thousand shares of Company common stock remained available for grants under the Company’s equity incentive plans. Sales of substantial amounts of Company common stock in the public market could adversely affect the market price of its common stock.

The Company could repurchase shares of its common stock at price levels considered excessive.

The Company may repurchase and retire its common stock in accordance with Board of Directors-approved share repurchase programs from time to time. The Company has been active in repurchasing and retiring shares of its common stock when alternative uses of excess capital, such as acquisitions, have been limited. The Company could repurchase shares of its common stock at price levels considered excessive, thereby spending more cash on such repurchases as deemed reasonable and effectively retiring fewer shares than would be retired if repurchases were effected at lower prices.

Risks Related to the Nature and Geographical Location of the Company’s Business

The Company invests in loans that contain inherent credit risks that may cause the Company to incur losses.

The risk that borrowers may not pay interest or repay their loans as agreed is an inherent risk of the banking business. The Company strives to mitigate this risk by adhering to sound and proven underwriting practices, managed by experienced and knowledgeable credit professionals. Nonetheless, the Company may incur losses on loans that meet its underwriting criteria, and these losses may exceed the amounts set aside as reserves. The Company can provide no assurance that the credit quality of the loan portfolio will not deteriorate in the future and that such deterioration will not adversely affect the Company or its results of operations.

The Company’s operations are concentrated geographically in California, and poor economic conditions may cause the Company to incur losses.

Substantially all of the Company’s business is located in California. A portion of the loan portfolio of the Company is dependent on real estate. At December 31, 2023, real estate served as the principal source of collateral with respect to approximately 59% of the Company’s loan portfolio. The Company’s financial condition and operating results will be subject to changes in economic conditions in California. Much of the California real estate market could experience a decline in values of varying degrees. This decline could have an adverse impact on the business of some of the Company’s borrowers and on the value of the collateral for many of the Company’s loans. Generally, the counties surrounding and near San Francisco Bay could recover more soundly from the recession than counties in the California “Central Valley,” from Sacramento in the north to Bakersfield in the south, where many of the Bank’s customers are located . Approximately 25% of the Company’s loans were to borrowers in the California “Central Valley” as of December 31, 2023. Economic conditions in California’s diverse geographic markets can be vastly different and are subject to various uncertainties, including the condition of the construction and real estate sectors, the effect of drought on the agricultural sector and its infrastructure, and the California state and municipal governments’ budgetary and fiscal conditions. The Company can provide no assurance that conditions in any sector or geographic market of the California economy will not deteriorate in the future and that such deterioration will not adversely affect the Company.

The markets in which the Company operates are subject to the risk of earthquakes, fires, storms and other natural disasters.

All of the properties of the Company are located in California. Also, most of the real and personal properties which currently secure a majority of the Company’s loans are located in California. Further, the Company invests in securities issued by companies and municipalities operating throughout the United States, and in mortgage-backed securities collateralized by real property located throughout the United States. California and other regions of the United States are prone to earthquakes, brush and wildfires, flooding, drought and other natural disasters. In addition to possibly sustaining uninsured damage to its own properties, if there is a major earthquake, flood, drought, fire or other natural disaster, the Company faces the risk that many of its debtors may experience uninsured property losses, or sustained business or employment interruption and/or loss which may materially impair their ability to meet the terms of their debt obligations. A major earthquake, flood, prolonged drought, fire or other natural disaster in California or other regions of the United States could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows.

Adverse changes in general business or economic conditions, including inflation, could have a material adverse effect on the Company’s financial condition and results of operations.

A sustained or continuing weakness or weakening in business and economic conditions generally or specifically in the principal markets in which the Company does business could have one or more of the following adverse impacts on the Company’s business:

The 2008 - 2009 financial crisis led to the failure or merger of a number of financial institutions. Financial institution failures can result in further losses as a consequence of defaults on securities issued by them and defaults under contracts entered into with such entities as counterparties. The failure of institutions with FDIC insured deposits can cause the DIF reserve ratio to decline, resulting in increased deposit insurance assessments on surviving FDIC insured institutions. Weak economic conditions can significantly weaken the strength and liquidity of financial institutions.

The Company’s financial performance generally, and in particular the ability of borrowers to pay interest on and repay principal of outstanding loans and the value of collateral securing those loans, is highly dependent upon the business environment in the markets where the Company operates, in the State of California and in the United States as a whole. A favorable business environment is generally characterized by, among other factors, economic growth, healthy labor markets, efficient capital markets, low inflation, high business and investor confidence, and strong business earnings. Unfavorable or uncertain economic and market conditions can be caused by: declines in economic growth, high rates of unemployment, deflation, pandemics, declines in business activity or consumer, investor or business confidence; limitations on the availability of or increases in the cost of credit and capital; increases in inflation; natural disasters; or a combination of these or other factors.

Such business conditions could adversely affect the credit quality of the Company’s loans, the demand for loans, loan volumes and related revenue, securities valuations, amounts of deposits, availability of funding, results of operations and financial condition.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None

ITEM 2. PROPERTIES

Branch Offices and Facilities

Westamerica Bank is engaged in the banking business through 79branch offices in 21 counties in Northern and Central California. WAB believes all of its offices are constructed and equipped to meet prescribed security requirements.

The Company owns 29 banking office locations and one centralized administrative service center facility and leases 56 facilities. Most of the leases contain renewal options and provisions for rental increases, principally for changes in the cost of living index, and for changes in other operating costs such as property taxes and maintenance.

ITEM 3. LEGAL PROCEEDINGS

Due to the nature of its business, the Company is subject to various threatened or filed legal cases. Neither the Company nor any of its subsidiaries is a party to any material pending legal proceeding, nor is their property the subject of any material pending legal proceeding, other than ordinary routine legal proceedings arising in the ordinary course of the Company’s business. Based on the advice of legal counsel, the Company does not expect such cases will have a material, adverse effect on its business, financial position or results of operations. Legal liabilities are accrued when obligations become probable and the amount can be reasonably estimated.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable

PART II

Item 5

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS ANDISSUER PURCHASES OF EQUITY SECURITIES

The Company’s common stock is traded on the NASDAQ Stock Market (“NASDAQ”) under the symbol “WABC”. Asfor Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of January 31, 2021, there were approximately 5,100 shareholdersEquity Securities

Item 6

[Reserved]

Item 7

Management’s Discussion and Analysis of recordFinancial Condition and Results of the Company’s common stock.Operations

Item 7A

The Company has paid cash dividends on its common stock in every quarter since its formation in 1972. See Quantitative and Qualitative Disclosures About Market Risk

Item 8

Financial Statements and Supplementary Data Note 19

Item 9

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A

Controls and Procedures

Item 9B

Other Information

Item 9C

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

PART III

Item 10

Directors, Executive Officers and Corporate Governance

Item 11

Executive Compensation

Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13

Certain Relationships, Related Transactions and Director Independence

Item 14

Principal Accountant Fees and Services

PART IV

Item 15

Exhibits, Financial Statement Schedules

Item 16

Form 10-K Summary

Signatures

FORWARD-LOOKING STATEMENTS

This Report on Form 10-K contains forward-looking statements about Westamerica Bancorporation for which it claims the protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, future credit quality and performance, the appropriateness of the allowance for credit losses, loan growth or reduction, mitigation of risk in the Company’s loan and investment securities portfolios, income or loss, earnings or loss per share, the payment or nonpayment of dividends, stock repurchases, capital structure and other financial items; (ii) statements of plans, objectives and expectations of the Company or its management or board of directors, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as "believes", "anticipates", "expects", “estimates”, "intends", "targeted", "projected", “forecast”, "continue", "remain", "will", "should", "may" and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

These forward-looking statements are based on the current knowledge and belief of the management (“Management”) of Westamerica Bancorporation (the “Company”) and include information concerning the Company’s possible or assumed future financial condition and results of operations. A number of factors, some of which are beyond the Company’s ability to predict or control, could cause future results to differ materially from those contemplated.

These factors include but are not limited to (1) the length and severity of any difficulties in the global, national and California economies and the effects of government efforts to address those difficulties; (2) liquidity levels in capital markets; (3) fluctuations in asset prices including, but not limited to stocks, bonds, real estate, and commodities; (4) the effect of acquisitions and integration of acquired businesses; (5) economic uncertainty created by riots, terrorist threats and attacks on the United States, the actions taken in response, and the uncertain effect of these events on the local, regional and national economies; (6) changes in the interest rate environment and monetary policy; (7) changes in the regulatory environment; (8) competitive pressure in the banking industry; (9) operational risks including a failure or breach in data processing or security systems or those of third party vendors and other service providers, including as a result of cyber attacks or fraud; (10) volatility of interest rate sensitive loans, deposits and investments, particularly the impact of rising interest rates on the Company’s securities portfolio; (11) asset/liability management risks; (12) liquidity risks including the impact of recent adverse developments in the banking industry; (13) the effect of climate change, natural disasters, including earthquakes, hurricanes, fire, flood, drought, and other disasters, on the uninsured value of the Company’s assets and of loan collateral, the financial condition of debtors and issuers of investment securities, the economic conditions affecting the Company’s market place, and commodities and asset values; (14) changes in the securities markets; (15) the duration and severity of pandemics and governmental and customer responses; (16) inflation and (17) the outcome of contingencies, such as legal proceedings. However, the reader should not consider the above-mentioned factors to be a complete set of all potential risks or uncertainties.

Forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to update any forward-looking statements in this report to reflect circumstances or events that occur after the date forward looking statements are made, except as may be required by law. The reader is directed to Part II – Item 1A “Risk Factors” of this report and other risk factors discussed elsewhere in this report, for further discussion of factors which could affect the Company's business and cause actual results to differ materially from those expressed in any forward-looking statement made in this report.

PART I

ITEM 1. BUSINESS

Westamerica Bancorporation (the “Company”) is a bank holding company registered under the Bank Holding Company Act of 1956, as amended (“BHCA”). Its legal headquarters are located at 1108 Fifth Avenue, San Rafael, California 94901. Its principal administrative offices are located at 4550 Mangels Boulevard, Fairfield, California 94534, its telephone number is (707) 863-6000 and its website address is www.westamerica.com. The Company provides a full range of banking services to individual and commercial customers in Northern and Central California through its subsidiary bank, Westamerica Bank (the “Bank”). The Bank is a California-chartered commercial bank whose deposit are insured by the Federal Deposit Insurance Corporation (the “FDIC”) up to applicable limits. The principal communities served are located in Northern and Central California, from Mendocino, Lake and Nevada Counties in the north to Kern County in the south. The Company’s strategic focus is on the banking needs of small businesses. In addition, the Bank owns 100% of the capital stock of Community Banker Services Corporation (“CBSC”), a company engaged in providing the Company and its subsidiaries with data processing services and other support functions.

The Company was incorporated under the laws of the State of California in 1972 as “Independent Bankshares Corporation” pursuant to a plan of reorganization among three previously unaffiliated Northern California banks. The Company operated as a multi-bank holding company until mid-1983, at which time the then six subsidiary banks were merged into a single bank named Westamerica Bank and the name of the holding company was changed to Westamerica Bancorporation.

The Company acquired five banks within its immediate market area during the early to mid 1990’s. In April 1997, the Company acquired ValliCorp Holdings, Inc., parent company of ValliWide Bank, the largest independent bank holding company headquartered in Central California. Under the terms of all of the merger agreements, the Company issued shares of its common stock in exchange for all of the outstanding shares of the acquired institutions. The subsidiary banks acquired were merged with and into the Bank. These six aforementioned business combinations were accounted for as poolings-of-interests.

During the period 2000 through 2005, the Company acquired three additional banks. These acquisitions were accounted for using the purchase accounting method.

In 2009 and 2010, the Bank acquired the banking operations of two failed banks, the former County Bank and Sonoma Valley Bank, from the Federal Deposit Insurance Corporation (“FDIC”). The acquired assets and assumed liabilities from the FDIC were measured at estimated fair values, as required by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations.

At December 31, 2023, the Company had consolidated assets of approximately $6.4 billion, deposits of approximately $5.5 billion and shareholders’ equity of approximately $773 million.

The Company assesses and is careful to address potential health, safety, and environmental risks. The Company cares for the environment and works to mitigate pollution and the potential risks related to climate change by implementing practices such as recycling and reusing materials, and controlling energy usage.

The Company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports as well as beneficial ownership reports on Forms 3, 4 and 5 are available through the SEC’s website (https://www.sec.gov). Such documents as well as the Company’s director, officer and employee Code of Conduct and Ethics are also available free of charge from the Company by request to:

Westamerica Bancorporation

Corporate Secretary A-2M

Post Office Box 1200

Suisun City, California 94585-1200

Human Capital Resources

The Company and its subsidiaries employed 641 full-time equivalent staff or 669 employees as of December 31, 2023. The employees are not represented by a collective bargaining unit, and the Company believes its relationship with its employees is good.

The Company’s ability to attract and retain employees is a key to its success. Employees receive a comprehensive benefits package that includes paid time off, sick time, company contributions of up to 6% to qualified retirement plans, discretionary profit-sharing retirement plan contributions, and other health and wellness benefits including participation in Company paid or subsidized medical, dental, term-life, accidental death and dismemberment (AD&D), long-term disability, and employee assistance programs. Certain employees participate in one of the Company’s performance-based incentive programs, which may include additional bonus and incentive compensation, company contributions to supplemental retirement plans, and equity-based awards. Certain benefits are subject to eligibility, vesting, and performance requirements. Employee performance is measured at least quarterly and formal performance evaluations are conducted at least annually.

The Company’s code of ethics prohibits discrimination or harassment. The Company requires all employees to agree to the code of ethics and participate in harassment prevention training annually.

Supervision and Regulation

The following is not intended to be an exhaustive description of the statutes and regulations applicable to the Company’s or the Bank’s business. The description of statutory and regulatory provisions is qualified in its entirety by reference to the particular statutory or regulatory provisions. Moreover, major new legislation and other regulatory changes affecting the Company, the Bank, and the financial services industry in general have occurred in the last several years and can be expected to occur in the future. The nature, timing and impact of new and amended laws and regulations cannot be accurately predicted.

Regulation and Supervision of Bank Holding Companies

The Company is a bank holding company that is subject to the BHCA. The Company files reports with and is subject to examination and supervision by the Board of Governors of the Federal Reserve System (“FRB”). The FRB also has the authority to examine the Company’s subsidiaries. The Company is a bank holding company within the meaning of Section 3700 of the California Financial Code. As such, the Company and the Bank are subject to examination by, and may be required to file reports with, the Commissioner of the California Department of Financial Protection and Innovation (the “Commissioner”).

The FRB has significant supervisory and regulatory authority over the Company and its affiliates. Among other things, the FRB requires the Company to maintain certain levels of capital. See “Capital Standards.” The FRB also has the authority to take enforcement action against any bank holding company that commits any unsafe or unsound practice, or violates certain laws, regulations or conditions imposed in writing by the FRB. Under the BHCA, the Company is required to obtain the prior approval of the FRB before it acquires, merges or consolidates with any bank or bank holding company. Any company seeking to acquire control of or to merge or consolidate with the Company also would be required to obtain the prior approval of the FRB.

The Company is generally prohibited under the BHCA from acquiring ownership or control of more than 5% of any class of voting shares of any company that is not a bank or bank holding company and from engaging directly or indirectly in activities other than banking, managing banks, or providing services to affiliates of the holding company. However, a bank holding company, with the approval of the FRB, may engage, or acquire the voting shares of companies engaged, in activities that the FRB has determined to be closely related to banking or managing or controlling banks. A bank holding company must demonstrate that the benefits to the public of the proposed activity will outweigh the possible adverse effects associated with such activity.

The FRB generally prohibits a bank holding company from declaring or paying a cash dividend that would impose undue pressure on the capital of subsidiary banks or would be funded only through borrowing or other arrangements which might adversely affect a bank holding company’s financial position. Under the FRB policy, a bank holding company should not continue its existing rate of cash dividends on its common stock unless its net income is sufficient to fully fund each dividend and its prospective rate of earnings retention appears consistent with its capital needs, asset quality and overall financial condition. See the section entitled “Restrictions on Dividends and Other Distributions” for additional restrictions on the ability of the Company and the Bank to pay dividends.

Transactions between the Company and the Bank are restricted under the FRB’s Regulation W and Sections 23A and 23B of the Federal Reserve Act. In general, subject to certain specified exemptions, a bank or its subsidiaries are limited in their ability to engage in “covered transactions” with affiliates: (a) to an amount equal to 10% of the bank’s capital and surplus, in the case of covered transactions with any one affiliate; and (b) to an amount equal to 20% of the bank’s capital and surplus, in the case of covered transactions with all affiliates. The Company is considered to be an affiliate of the Bank. A “covered transaction” includes, among other things, a loan or extension of credit to an affiliate; a purchase of securities issued by an affiliate; a purchase of assets from an affiliate, with some exceptions; and the issuance of a guarantee, acceptance or letter of credit on behalf of an affiliate.

Federal regulations governing bank holding companies and change in bank control (Regulation Y) provide for a streamlined and expedited review process for bank acquisition proposals submitted by well-run bank holding companies. These provisions of Regulation Y are subject to numerous qualifications, limitations and restrictions. In order for a bank holding company to qualify as “well-run,” both it and the insured depository institutions which it controls must meet the “well capitalized” and “well managed” criteria set forth in Regulation Y.

The Gramm-Leach-Bliley Act (the “GLBA”), or the Financial Services Act of 1999, repealed provisions of the Glass-Steagall Act, which had prohibited commercial banks and securities firms from affiliating with each other and engaging in each other’s businesses. Thus, many of the barriers prohibiting affiliations between commercial banks and securities firms have been eliminated.

The BHCA was also amended by the GLBA to allow new “financial holding companies” (“FHCs”) to offer banking, insurance, securities and other financial products to consumers. Specifically, the GLBA amended section 4 of the BHCA in order to provide for a framework for the engagement in new financial activities. A bank holding company (“BHC”) may elect to become an FHC if all its subsidiary depository institutions are well capitalized and well managed. If these requirements are met, a BHC may file a certification to that effect with the FRB and declare that it elects to become an FHC. After the certification and declaration is filed, the FHC may engage either de novo or through an acquisition in any activity that has been determined by the FRB to be financial in nature or incidental to such financial activity. BHCs may engage in financial activities without prior notice to the FRB if those activities qualify under the list of permissible activities in section 4(k) of the BHCA. However, notice must be given to the FRB within 30 days after an FHC has commenced one or more of the financial activities. The Company has not elected to become an FHC.

Regulation and Supervision of Banks

The Bank is a California state-chartered Federal Reserve member bank and its deposits are insured by the FDIC. The Bank is subject to regulation, supervision and regular examination by the California Department of Financial Protection and Innovation and the FRB. The regulations of these agencies affect most aspects of the Bank’s business and prescribe permissible types of loans and investments, the amount of required reserves, requirements for branch offices, the permissible scope of its activities and various other requirements.

In addition to federal banking law, the Bank is also subject to applicable provisions of California law. Under California law, the Bank is subject to various restrictions on, and requirements regarding, its operations and administration including the maintenance of branch offices and automated teller machines, capital requirements, deposits and borrowings, and investment and lending activities.

In addition, the Federal Deposit Insurance Corporation Improvement Act (“FDICIA”) imposes limitations on the activities and equity investments of state chartered, federally insured banks. FDICIA also prohibits a state bank from making an investment or engaging in any activity as a principal that is not permissible for a national bank, unless the Bank is adequately capitalized and the FDIC approves the investment or activity after determining that such investment or activity does not pose a significant risk to the deposit insurance fund.

On July 21, 2010, financial regulatory reform legislation entitled the "Dodd-Frank Wall Street Reform and Consumer Protection Act" (the "Dodd-Frank Act") was signed into law. The Dodd-Frank Act implemented far-reaching changes across the financial regulatory landscape, including provisions that, among other things:

Provisions in the legislation that affect the payment of interest on demand deposits and interchange fees may increase the costs associated with deposits as well as place limitations on certain revenues those deposits may generate.

Capital Standards

The federal banking agencies have adopted pursuant the Dodd-Frank Act, which are risk-based capital adequacy guidelines intended to provide a measure of capital adequacy that reflects the degree of risk associated with a banking organization’s operations for both transactions resulting in assets being recognized on the balance sheet as assets, and the extension of credit facilities such as letters of credit and recourse arrangements, which are recorded as off balance sheet items. Under these guidelines, nominal dollar amounts of assets and credit equivalent amounts of off balance sheet items are multiplied by one of several risk adjustment percentages, which range from 0% for assets with low credit risk, such as certain U.S. government securities, to 1250% for assets with relatively higher credit risk, such as certain securitizations. A banking organization’s risk-based capital ratios are obtained by dividing its qualifying capital by its total risk-adjusted assets and off balance sheet items.

The federal banking agencies take into consideration concentrations of credit risk and risks from nontraditional activities, as well as an institution’s ability to manage those risks, when determining the adequacy of an institution’s capital. This evaluation is made as a part of the institution’s regular safety and soundness examination. The federal banking agencies also consider interest rate risk (related to the interest rate sensitivity of an institution’s assets and liabilities, and its off balance sheet financial instruments) in the evaluation of a bank’s capital adequacy.

On July 2, 2013, the Federal Reserve Board approved a final rule that implements changes to the regulatory capital framework for all banking organizations over a transitional period 2015 through 2018. As of December 31, 2023, the Company’s and the Bank’s respective regulatory capital ratios exceeded applicable regulatory minimum capital requirements. See Note 9 to the consolidated financial statements included in this Report for capital ratios of the Company and the Bank, compared to minimum capital requirements and for the Bank the standards for well capitalized depository institutions.

In November 2019, the federal banking regulators published final rules implementing community bank leverage ratio, which is a simplified measure of capital adequacy for certain banking organizations that have less than $10 billion in total consolidated assets. A qualifying community banking organization that elects to use the community bank leverage ratio framework and that maintains a leverage ratio of greater than 9% is considered to have satisfied the generally applicable risk-based and leverage capital requirements and, if applicable, is considered to have met the “well capitalized” ratio requirements for purposes of its primary federal regulator’s prompt corrective action rules, discussed below. The Company does not have any immediate plans to elect to use the community bank leverage ratio framework but may make such an election in the future.

See the sections entitled “Capital Resources and Capital to Risk-Adjusted Assets” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information.

Prompt Corrective Action and Other Enforcement Mechanisms

FDICIA requires each federal banking agency to take prompt corrective action to resolve the problems of insured depository institutions, including but not limited to those that fall below one or more prescribed minimum capital ratios.

An institution that, based upon its capital levels, is classified as “well capitalized,” “adequately capitalized” or “undercapitalized” may be treated as though it were in the next lower capital category if the appropriate federal banking agency, after notice and opportunity for hearing, determines that an unsafe or unsound condition or an unsafe or unsound practice warrants such treatment. At each successive lower capital category, an insured depository institution is subject to more restrictions. In addition to measures taken under the prompt corrective action provisions, commercial banking organizations may be subject to potential enforcement actions by the federal banking agencies for unsafe or unsound practices in conducting their businesses or for violations of any law, rule, regulation or any condition imposed in writing by the agency or any written agreement with the agency.

Safety and Soundness Standards

FDICIA has implemented certain specific restrictions on transactions and required federal banking regulators to adopt overall safety and soundness standards for depository institutions related to internal control, loan underwriting and documentation, and asset growth. Among other things, FDICIA limits the interest rates paid on deposits by undercapitalized institutions, restricts the use of brokered deposits, limits the aggregate extensions of credit by a depository institution to an executive officer, director, principal shareholder or related interest, and reduces deposit insurance coverage for deposits offered by undercapitalized institutions for deposits by certain employee benefits accounts. The federal banking agencies may require an institution to submit an acceptable compliance plan as well as have the flexibility to pursue other more appropriate or effective courses of action given the specific circumstances and severity of an institution’s noncompliance with one or more standards.

Federal banking agencies require banks to maintain adequate valuation allowances for potential credit losses. The Company has an internal staff that continually reviews loan quality and reports to the Board of Directors. This analysis includes a detailed review of the classification and categorization of problem loans, assessment of the overall quality and collectability of the loan portfolio, consideration of loan loss experience, trends in problem loans, concentration of credit risk, and current economic conditions, particularly in the Bank’s market areas. Based on this analysis, Management, with the review and approval of the Board, determines the adequate level of allowance required. The allowance is allocated to different segments of the loan portfolio, but the entire allowance is available for the loan portfolio in its entirety.

Restrictions on Dividends and Other Distributions

The Company’s ability to pay dividends to its shareholders is subject to the restrictions set forth in the California General Corporation Law (“CGCL”). The CGCL provides that a corporation may make a distribution to its shareholders if (i) the corporation’s retained earnings equal or exceed the amount of the proposed distribution plus unpaid accrued dividends (if any) on securities with a dividend preference, or (ii) immediately after the dividend, the corporation’s total assets equal or exceed total liabilities plus unpaid accrued dividends (if any) on securities with a dividend preference.

The Company’s ability to pay dividends depends in part on the Bank’s ability to pay cash dividends to the Company. The power of the board of directors of an insured depository institution to declare a cash dividend or other distribution with respect to capital is subject to statutory and regulatory restrictions which limit the amount available for such distribution depending upon the earnings, financial condition and cash needs of the institution, as well as general business conditions. FDICIA prohibits insured depository institutions from paying management fees to any controlling persons or, with certain limited exceptions, making capital distributions, including dividends, if, after such transaction, the institution would be undercapitalized.

In addition to the restrictions imposed under federal law, banks chartered under California law generally may only pay cash dividends to the extent such payments do not exceed the lesser of retained earnings of the bank or the bank’s net income for its last three fiscal years (less any distributions to shareholders during this period). In the event a bank desires to pay cash dividends in excess of such amount, the bank may pay a cash dividend with the prior approval of the Commissioner in an amount not exceeding the greatest of the bank’s retained earnings, the bank’s net income for its last fiscal year or the bank’s net income for its current fiscal year.

The federal banking agencies also have the authority to prohibit a depository institution or its holding company from engaging in business practices which are considered to be unsafe or unsound, possibly including payment of dividends or other payments under certain circumstances even if such payments are not expressly prohibited by statute. The Federal Reserve Board has issued guidance indicating its expectations that a bank holding company will inform and consult with Federal Reserve supervisory staff sufficiently in advance of (i) declaring and paying a dividend that could raise safety and soundness concerns (e.g., declaring and paying a dividend that exceeds earnings for the period for which the dividend is being paid); (ii) redeeming or repurchasing regulatory capital instruments when the bank holding company is experiencing financial weaknesses; or (iii) redeeming or repurchasing common stock or perpetual preferred stock that would result in a net reduction as of the end of the quarter in the amount of such equity instruments outstanding compared with the beginning of the quarter in which the redemption or repurchase occurred.

Premiums for Deposit Insurance and FDIC Regulation

Substantially all of the deposits of the Bank are insured up to applicable limits by the FDIC’s Deposit Insurance Fund (“DIF”) and are subject to deposit insurance assessments to maintain the DIF. The FDIC utilizes a risk-based assessment system that imposes insurance premiums based upon a risk matrix that takes into account a bank's capital level, asset quality and supervisory rating.

In July 2010, Congress in the Dodd-Frank Act increased the minimum for the DIF reserve ratio, the ratio of the amount in the fund to insured deposits, from 1.15% to 1.35% and required that the ratio reach that level by September 30, 2020. Further, the Dodd-Frank Act made banks with $10 billion or more in assets responsible for the increase from 1.15% to 1.35%, among other provisions.

Extraordinary growth in insured deposits during the first and second quarters of 2020 caused the DIF reserve ratio to decline below the statutory minimum of 1.35%. The Federal Deposit Insurance Act (the “FDI Act”) requires that the FDIC’s Board of Directors adopt a restoration plan when the DIF reserve ratio falls below 1.35% or is expected to within 6 months. Under the FDI Act, the restoration plan must restore the reserve ratio to at least 1.35% within 8 years of establishing the Plan, absent extraordinary circumstances. The FDIC established the following Restoration Plan (the “Plan”) on September 15, 2020.

The Plan was amended in June 2022, to restore the DIF reserve ratio to at least 1.35% by September 30, 2028. On October 18, 2022 the FDIC adopted a final rule to increase initial base deposit insurance assessment rates for insured depository institutions by 2 basis points, beginning with the first quarterly assessment period of 2023. The increased assessment rate schedules will remain in effect unless and until the reserve ratio of the DIF meets or exceeds 2%. A significant increase in DIF insurance premiums would have an adverse effect on the operating expenses and results of operations of the Bank. The Company cannot provide any assurance as to the effect of any future changes in its deposit insurance premium rates.

While the FDIC is not Bank's primary federal regulator, as the insurer of the Bank's deposits, the FDIC is authorized to conduct examinations of and to require reporting by FDIC-insured institutions. It also may prohibit any FDIC-insured institution from engaging in any activity the FDIC determines by regulation or order poses a serious risk to the DIF. The FDIC also has authority to initiate enforcement actions against any FDIC-insured institution after giving its primary federal regulator the opportunity to take such action, and may seek to terminate the deposit insurance if it determines that the institution has engaged in unsafe or unsound practices or is in an unsafe or unsound condition. Finally, the FDIC may terminate deposit insurance upon a finding that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order, or condition imposed by the FDIC.

Economic Growth, Regulatory Relief and Consumer Protection Act

On May 24, 2018, President Trump signed into law the first major financial services reform bill since the enactment of the Dodd-Frank Act. The Economic Growth, Regulatory Relief, and Consumer Protection Act (the “Relief Act”) modifies or eliminates certain requirements on community and regional banks and nonbank financial institutions.  For instance, under the Relief Act and related rule making:

Community Reinvestment Act and Fair Lending Laws

The Bank is subject to certain fair lending requirements and reporting obligations involving home mortgage lending operations and Community Reinvestment Act (“CRA”) activities. The CRA generally requires the federal banking agencies to evaluate the record of financial institutions in meeting the credit needs of their local communities, including low and moderate income neighborhoods. In addition to substantive penalties and corrective measures that may be required for a violation of certain fair lending laws, the federal banking agencies may take compliance with such laws and CRA into account when regulating and supervising other activities including merger applications. In May 2022, the federal banking agencies released for public comment proposed rules to modernize CRA regulations. The Company continues to evaluate the impact of any changes to the CRA regulations.

Financial Privacy Legislation and Customer Information Security

The GLBA, in addition to the previously described changes in permissible nonbanking activities permitted to banks, BHCs and FHCs, also required the federal banking agencies, among other federal regulatory agencies, to adopt regulations governing the privacy of consumer financial information. The Bank is subject to the FRB’s regulations in this area. The federal bank regulatory agencies have established standards for safeguarding nonpublic personal information about customers that implement provisions of the GLBA (the “Guidelines”). Among other things, the Guidelines require each financial institution, under the supervision and ongoing oversight of its Board of Directors or an appropriate committee thereof, to develop, implement and maintain a comprehensive written information security program designed to ensure the security and confidentiality of customer information, to protect against any anticipated threats or hazards to the security or integrity of such information, and to protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer.

Anti-Money Laundering Laws

The Bank Secrecy Act, as amended by the USA PATRIOT Act, gives the federal government powers to address money laundering and terrorist threats through enhanced domestic security measures, expanded surveillance powers and mandatory transaction reporting obligations. The Bank Secrecy Act and related regulations require financial institutions to report currency transactions that exceed certain thresholds and transactions determined to be suspicious, establish due diligence requirements for accounts and take certain steps to verify customer identification when accounts are opened. The Bank Secrecy Act also requires financial institutions to develop and maintain a program reasonably designed to ensure and monitor compliance with its requirements, to train employees to comply with and to test the effectiveness of the program. Any failure to meet the requirements of the Bank Secrecy Act can result in the imposition of substantial penalties and in adverse regulatory action against the offending bank.

The Anti-Money Laundering Act of 2020 (“AMLA”), which amends the Bank Secrecy Act, was enacted in January 2021. The AMLA is a comprehensive reform and modernization to U.S. bank secrecy and anti-money laundering laws. Among other things, it codifies a risk-based approach to anti-money laundering compliance for financial institutions; requires the development of standards for evaluating technology and internal processes for Bank Secrecy Act compliance; expands enforcement and investigative authority, including increasing available sanctions for certain Bank Secrecy Act violations and instituting Bank Secrecy Act whistleblower incentives and protections.

Programs To Mitigate Identity Theft

In November 2007, federal banking agencies together with the National Credit Union Administration and Federal Trade Commission adopted regulations under the Fair and Accurate Credit Transactions Act of 2003 to require financial institutions and other creditors to develop and implement a written identity theft prevention program to detect, prevent and mitigate identity theft in connection with certain new and existing accounts. Covered accounts generally include consumer accounts and other accounts that present a reasonably foreseeable risk of identity theft. Each institution’s program must include policies and procedures designed to: (i) identify indicators, or “red flags,” of possible risk of identity theft; (ii) detect the occurrence of red flags; (iii) respond appropriately to red flags that are detected; and (iv) ensure that the program is updated periodically as appropriate to address changing circumstances. The regulations include guidelines that each institution must consider and, to the extent appropriate, include in its program.

Pending Legislation

Changes to state laws and regulations (including changes in interpretation or enforcement) can affect the operating environment of BHCs and their subsidiaries in substantial and unpredictable ways. From time to time, various legislative and regulatory proposals are introduced. These proposals, if codified, may change banking statutes and regulations and the Company’s operating environment in substantial and unpredictable ways. If codified, these proposals could increase or decrease the cost of doing business, limit or expand permissible activities or affect the competitive balance among banks, savings associations, credit unions and other financial institutions. The Company cannot accurately predict whether those changes in laws and regulations will occur, and, if those changes occur, the ultimate effect they would have upon its financial condition or results of operations. It is likely, however, that the current level of enforcement and compliance-related activities of federal and state authorities will continue and potentially increase.

Competition

The Bank’s principal competitors for deposits and loans are major banks and smaller community banks, savings and loan associations and credit unions. To a lesser extent, competitors include thrift and loans, mortgage brokerage companies and insurance companies. Other institutions, such as brokerage houses, mutual fund companies, credit card companies, and certain retail establishments offer investment vehicles that also compete with banks for deposit business. Federal legislation in recent years has encouraged competition between different types of financial institutions and fostered new entrants into the financial services market.

Legislative changes, as well as technological and economic factors, can be expected to have an ongoing impact on competitive conditions within the financial services industry. While the future impact of regulatory and legislative changes cannot be predicted with certainty, the business of banking will remain highly competitive.

ITEM 1A. RISK FACTORS

Readers and prospective investors in the Company’s securities should carefully consider the following risk factors as well as the other information contained or incorporated by reference in this Report.

The risks and uncertainties described below are not the only ones facing the Company. Additional risks and uncertainties that Management is not aware of or focused on or that Management currently deems immaterial may also impair the Company’s business operations. This Report is qualified in its entirety by these risk factors.

If any of the following risks actually occur, the Company’s financial condition and results of operations could be materially and adversely affected. If this were to happen, the value of the company’s securities could decline significantly, and investors could lose all or part of their investment in the Company’s common stock.

Market and Interest Rate Risk

Changes in interest rates could reduce income and cash flow.

The Company’s income and cash flow depend to a great extent on the difference between the interest earned on loans and investment securities and the interest paid on deposits and other borrowings, and the Company’s success in competing for loans and deposits. The Company cannot control or prevent changes in the level of interest rates which fluctuate in response to general economic conditions, the policies of various governmental and regulatory agencies, in particular, the Federal Open Market Committee of the Federal Reserve Board (the” FOMC”), and pricing practices of the Company’s competitors. Changes in monetary policy, including changes in interest rates, will influence the origination of loans, the purchase of investments, the generation of deposits and other borrowings, and the rates received on loans and investment securities and paid on deposits and other liabilities. The discussion in this Report under “Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations – Asset, Liability and Market Risk Management” and “- Liquidity and Funding” and “Item 7A, Quantitative and Qualitative Disclosures About Market Risk” is incorporated by reference in this paragraph.

The Company could realize losses if it were required to sell securities in its held-to-maturity securities portfolio to meet liquidity needs.

As a result of increases in interest rates over the last year, the market value of previously issued government and other debt securities has declined significantly, resulting in unrealized losses in the held-to-maturity portion of the Company’s securities portfolios. While the Company does not currently expect or intend to sell these securities, if the Company were required to sell such securities to meet liquidity needs, it may incur losses, which could impair the Company’s capital financial condition and results of operations. Further, while the Company has taken actions to maximize its funding sources, there is no guarantee that such funding sources will be available or sufficient in the event of sudden liquidity needs.

Changes in capital market conditions could reduce asset valuations.

Capital market conditions, including interest rates, liquidity, investor confidence, bond issuer credit worthiness, perceived counter-party risk, the supply of and demand for financial instruments, the financial strength of market participants, and other factors can materially impact the value of the Company’s assets. An impairment in the value of the Company’s assets could result in asset write-downs, reducing the Company’s asset values, earnings, and equity.

The value of securities in the Company’s investment securities portfolio may be negatively affected by disruptions in securities markets.

The market for some of the investment securities held in the Company’s portfolio can be extremely volatile. Volatile market conditions may detrimentally affect the value of these securities, such as through reduced valuations due to the perception of heightened credit and liquidity risks. There can be no assurance that the declines in market value will not result in other than temporary impairments of these assets, which would lead to loss recognition that could have a material adverse effect on the Company’s net income and capital levels.

Negative developments affecting the banking industry, such as bank failures, may have a material adverse effect on the Company.

The banking industry could experience significant volatility with multiple bank failures during 2023. Industrywide concerns could develop related to liquidity, deposit outflows and unrealized losses on investment debt securities. While the Company cannot predict with certainty whether or how these developments may affect the banking industry, the Company faces the risks of increased FDIC deposit insurance premium expenses; increased regulation or supervisory scrutiny; and decreased confidence in banks among depositors and investors, any of which could, adversely affect the trading price of the Company’s common stock, its ability to manage its liquidity or its ability to effectively fund its operations. Any one or a combination of such risk factors, or other factors, could materially adversely affect the Company's business, financial condition, results of operations and prospects.

The weakness of other financial institutions could adversely affect the Company.

Financial services institutions are interrelated as a result of trading, clearing, counterparty, or other relationships. The Company routinely executes transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, and other institutional clients. Many of these transactions expose the Company to credit risk in the event of default of the Company’s counterparty or client. In addition, the Company’s credit risk may be increased when the collateral the Company holds cannot be realized or is liquidated at prices not sufficient to recover the full amount of the secured obligation. There is no assurance that any such losses would not materially and adversely affect the Company’s results of operations or earnings.

Shares of Company common stock eligible for future sale or grant of stock options and other equity awards could have a dilutive effect on the market for Company common stock and could adversely affect the market price.

The Articles of Incorporation of the Company authorize the issuance of 150 million shares of common stock (and two additional classes of 1 million shares each, denominated “Class B Common Stock” and “Preferred Stock”, respectively) of which approximately 26.7 million shares of common stock were outstanding at December 31, 2023. Pursuant to its stock option plans, at December 31, 2023, the Company had outstanding options for 973 thousand shares of common stock, of which 614 thousand were currently exercisable. As of December 31, 2023, 705 thousand shares of Company common stock remained available for grants under the Company’s equity incentive plans. Sales of substantial amounts of Company common stock in the public market could adversely affect the market price of its common stock.

The Company could repurchase shares of its common stock at price levels considered excessive.

The Company may repurchase and retire its common stock in accordance with Board of Directors-approved share repurchase programs from time to time. The Company has been active in repurchasing and retiring shares of its common stock when alternative uses of excess capital, such as acquisitions, have been limited. The Company could repurchase shares of its common stock at price levels considered excessive, thereby spending more cash on such repurchases as deemed reasonable and effectively retiring fewer shares than would be retired if repurchases were effected at lower prices.

Risks Related to the Nature and Geographical Location of the Company’s Business

The Company invests in loans that contain inherent credit risks that may cause the Company to incur losses.

The risk that borrowers may not pay interest or repay their loans as agreed is an inherent risk of the banking business. The Company strives to mitigate this risk by adhering to sound and proven underwriting practices, managed by experienced and knowledgeable credit professionals. Nonetheless, the Company may incur losses on loans that meet its underwriting criteria, and these losses may exceed the amounts set aside as reserves. The Company can provide no assurance that the credit quality of the loan portfolio will not deteriorate in the future and that such deterioration will not adversely affect the Company or its results of operations.

The Company’s operations are concentrated geographically in California, and poor economic conditions may cause the Company to incur losses.

Substantially all of the Company’s business is located in California. A portion of the loan portfolio of the Company is dependent on real estate. At December 31, 2023, real estate served as the principal source of collateral with respect to approximately 59% of the Company’s loan portfolio. The Company’s financial condition and operating results will be subject to changes in economic conditions in California. Much of the California real estate market could experience a decline in values of varying degrees. This decline could have an adverse impact on the business of some of the Company’s borrowers and on the value of the collateral for many of the Company’s loans. Generally, the counties surrounding and near San Francisco Bay could recover more soundly from the recession than counties in the California “Central Valley,” from Sacramento in the north to Bakersfield in the south, where many of the Bank’s customers are located . Approximately 25% of the Company’s loans were to borrowers in the California “Central Valley” as of December 31, 2023. Economic conditions in California’s diverse geographic markets can be vastly different and are subject to various uncertainties, including the condition of the construction and real estate sectors, the effect of drought on the agricultural sector and its infrastructure, and the California state and municipal governments’ budgetary and fiscal conditions. The Company can provide no assurance that conditions in any sector or geographic market of the California economy will not deteriorate in the future and that such deterioration will not adversely affect the Company.

The markets in which the Company operates are subject to the risk of earthquakes, fires, storms and other natural disasters.

All of the properties of the Company are located in California. Also, most of the real and personal properties which currently secure a majority of the Company’s loans are located in California. Further, the Company invests in securities issued by companies and municipalities operating throughout the United States, and in mortgage-backed securities collateralized by real property located throughout the United States. California and other regions of the United States are prone to earthquakes, brush and wildfires, flooding, drought and other natural disasters. In addition to possibly sustaining uninsured damage to its own properties, if there is a major earthquake, flood, drought, fire or other natural disaster, the Company faces the risk that many of its debtors may experience uninsured property losses, or sustained business or employment interruption and/or loss which may materially impair their ability to meet the terms of their debt obligations. A major earthquake, flood, prolonged drought, fire or other natural disaster in California or other regions of the United States could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows.

Adverse changes in general business or economic conditions, including inflation, could have a material adverse effect on the Company’s financial condition and results of operations.

A sustained or continuing weakness or weakening in business and economic conditions generally or specifically in the principal markets in which the Company does business could have one or more of the following adverse impacts on the Company’s business:

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[The remainder of this page intentionally left blank] -16- Stock performance The following chart compares the cumulative return on the Company’s stock during the ten years ended December 31, 2020 with the cumulative return on the S&P 500 composite stock index and NASDAQ’S Bank Index. The comparison assumes $100 invested in each on December 31, 2010 and reinvestment of all dividends.     December 31,       2010     2011     2012     2013     2014     2015   Westamerica Bancorporation (WABC)   $ 100.00     $ 81.60     $ 81.79     $ 111.85     $ 100.16     $ 98.76   S&P 500 (SPX)     100.00       102.00       118.11       156.27       177.48       179.86   NASDAQ Bank Index (CBNK)     100.00       89.41       105.72       149.93       157.21       170.95       December 31,       2016     2017     2018     2019     2020   Westamerica Bancorporation (WABC)   $ 137.06     $ 133.42     $ 128.10     $ 160.01     $ 134.27   S&P 500 (SPX)     201.33       245.20       234.33       307.86       364.73   NASDAQ Bank Index (CBNK)     235.58       248.14       207.67       257.94       238.55   [The remainder of this page intentionally left blank] -17- The following chart compares the cumulative return on the Company’s stock during the five years ended December 31, 2020 with the cumulative return on the S&P 500 composite stock index and NASDAQ’S Bank Index. The comparison assumes $100 invested in each on December 31, 2015 and reinvestment of all dividends.     December 31,       2015     2016     2017     2018     2019     2020   Westamerica Bancorporation (WABC)   $ 100.00     $ 138.78     $ 135.09     $ 129.70     $ 162.01     $ 135.95   S&P 500 (SPX)     100.00       111.93       136.32       130.28       171.16       202.78   NASDAQ Bank Index (CBNK)     100.00       137.80       145.15       121.48       150.88       139.54   ISSUER PURCHASES OF EQUITY SECURITIES The table below sets forth the information with respect to purchases made by or on behalf of Westamerica Bancorporation or any “affiliated purchaser”, as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of common stock during the quarter ended December 31, 2020 (in thousands, except per share data).     2020   Period   (a) Total Number of shares Purchased     (b) Average Price Paid per Share     (c) Number of Shares Purchased as Part of Publicly Announced Plans or Programs     (d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs       (In thousands, except exercise price)   October 1 through October 31     29     $ 52.26       29       1,686   November 1 through November 30     62       52.21       62       1,624   December 1 through December 31     -       -       -       1,624   Total     91     $ 52.22       91       1,624   The Company repurchases shares of its common stockan impairment in the open market to optimizevalue of investment securities;

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ITEM 6. SELECTED FINANCIAL DATA         The following financial information for the five years ended December 31, 2020 has been derived from the Company’s audited consolidated financial statements. This information should be readan increase in conjunction with those statements, notes and other information included elsewhere herein. WESTAMERICA BANCORPORATION   FINANCIAL SUMMARY                                                 For the Years Ended December 31,       2020     2019     2018     2017     2016       (In thousands, except per share data and ratios)   Interest and loan fee income   $ 165,856     $ 158,682     $ 151,723     $ 138,312     $ 135,919   Interest expense     1,824       1,888       1,959       1,900       2,116   Net interest and loan fee income     164,032       156,794       149,764       136,412       133,803   Provision (reversal) for credit losses     4,300       -       -       (1,900 )     (3,200 ) Noninterest income:                                         Gains on sales of property     3,536       -       216       332       -   Securities gains (losses)     71       217       (52 )     7,955       -   Other noninterest income     42,030       47,191       47,985       48,341       46,574   Total noninterest income     45,637       47,408       48,149       56,628       46,574   Noninterest expense:                                         Loss contingency     -       553       3,500       5,542       3   Other noninterest expense     98,566       98,433       103,416       102,226       103,617   Total noninterest expense     98,566       98,986       106,916       107,768       103,620   Income before income taxes     106,803       105,216       90,997       87,172       79,957   Income tax provision     26,390       24,827       19,433       37,147       21,104   Net income   $ 80,413     $ 80,389     $ 71,564     $ 50,025     $ 58,853                                             Average common shares outstanding     26,942       26,956       26,649       26,291       25,612   Average diluted common shares outstanding     26,960       27,006       26,756       26,419       25,678   Common shares outstanding at December 31,     26,807       27,062       26,730       26,425       25,907                                             Per common share:                                         Basic earnings   $ 2.98     $ 2.98     $ 2.69     $ 1.90     $ 2.30   Diluted earnings     2.98       2.98       2.67       1.89       2.29   Book value at December 31,     31.51       27.03       23.03       22.34       21.67                                             Financial ratios:                                         Return on assets     1.30 %     1.44 %     1.27 %     0.92 %     1.12 % Return on common equity     11.30 %     11.90 %     11.35 %     8.39 %     10.85 % Net interest margin (FTE)(1)     2.91 %     3.11 %     2.98 %     2.95 %     3.03 % Net loan losses to average loans     0.16 %     0.16 %     0.14 %     0.08 %     0.04 % Efficiency ratio(2)     46.2 %     47.4 %     52.52 %     52.51 %     53.55 % Equity to assets     12.52 %     13.02 %     11.05 %     10.71 %     10.46 %                                           Period end balances:                                         Assets   $ 6,747,931     $ 5,619,555     $ 5,568,526     $ 5,513,046     $ 5,366,083   Loans     1,256,243       1,126,664       1,207,202       1,287,982       1,352,711   Allowance for credit losses     23,854       19,484       21,351       23,009       25,954   Investment securities     4,578,783       3,816,918       3,641,026       3,352,371       3,237,070   Deposits     5,687,979       4,812,621       4,866,839       4,827,613       4,704,741   Identifiable intangible assets and goodwill     122,777       123,064       123,602       125,523       128,600   Short-term borrowed funds     102,545       30,928       51,247       58,471       59,078   Shareholders' equity     844,809       731,417       615,591       590,239       561,367                                             Capital ratios at period end:                                         Total risk based capital     16.68 %     16.83 %     17.03 %     16.17 %     15.95 % Tangible equity to tangible assets     10.90 %     11.07 %     9.04 %     8.63 %     8.26 %                                           Dividends paid per common share   $ 1.64     $ 1.63     $ 1.60     $ 1.57     $ 1.56   Common dividend payout ratio     55 %     55 %     60 %     83 %     68 % (1) Yields on securities and certain loans have been adjusted upward to a "fully taxable equivalent" ("FTE") basis in order to reflect the effect of income which is exempt from federal income taxation at the current statutory tax rate.operating costs   (2) The efficiency ratio is defined as noninterest expense divided by total revenue (net interest income on an FTE basis and noninterest income). -19- ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOF OPERATIONS The following discussion addresses information pertaining to the financial condition and results of operations of Westamerica Bancorporation and subsidiaries (the “Company”) that may not be otherwise apparent from a review of the consolidated financial statements and related footnotes. It should be read in conjunction with those statements and notes found on pages 50 through 92, The 2008 - 2009 financial crisis led to the failure or merger of a number of financial institutions. Financial institution failures can result in further losses as a consequence of defaults on securities issued by them and defaults under contracts entered into with such entities as counterparties. The failure of institutions with FDIC insured deposits can cause the DIF reserve ratio to decline, resulting in increased deposit insurance assessments on surviving FDIC insured institutions. Weak economic conditions can significantly weaken the strength and liquidity of financial institutions. The Company’s financial performance generally, and in particular the ability of borrowers to pay interest on and repay principal of outstanding loans and the value of collateral securing those loans, is highly dependent upon the business environment in the markets where the Company operates, in the State of California and in the United States as a whole. A favorable business environment is generally characterized by, among other factors, economic growth, healthy labor markets, efficient capital markets, low inflation, high business and investor confidence, and strong business earnings. Unfavorable or uncertain economic and market conditions can be caused by: declines in economic growth, high rates of unemployment, deflation, pandemics, declines in business activity or consumer, investor or business confidence; limitations on the availability of or increases in the cost of credit and capital; increases in inflation; natural disasters; or a combination of these or other factors. Such business conditions could adversely affect the credit quality of the Company’s loans, the demand for loans, loan volumes and related revenue, securities valuations, amounts of deposits, availability of funding, results of operations and financial condition. Regulatory Risks Restrictions on dividends and other distributions could limit amounts payable to the Company. As a holding company, a substantial portion of the Company’s cash flow typically comes from dividends paid by the Bank. Various statutory provisions restrict the amount of dividends the Company’s subsidiaries can pay to the Company without regulatory approval. A reduction in subsidiary dividends paid to the Company could limit the capacity of the Company to pay dividends. In addition, if any of the Company’s subsidiaries were to liquidate, that subsidiary’s creditors will be entitled to receive distributions from the assets of that subsidiary to satisfy their claims against it before the Company, as a holder of an equity interest in the subsidiary, will be entitled to receive any of the assets of the subsidiary. -12- The Company’s payment of dividends on common stock could be eliminated or reduced. Holders of the Company’s common stock are entitled to receive dividends only when, as, and if declared by the Company’s Board of Directors. The Company’s ability to pay dividends is limited by banking and corporate laws, and depends, among other things, on the Company’s regulatory capital levels and earnings prospects, as well as the Bank’s ability to pay cash dividends to the Company. Although the Company has historically paid cash dividends on the Company’s common stock, the Company is not required to do so and the Company’s Board of Directors could reduce or eliminate the Company’s common stock dividend in the future. Adverse effects of changes in banking or other laws and regulations or governmental fiscal or monetary policies could adversely affect the Company. The Company is subject to significant federal and state regulation and supervision, which is primarily for the benefit and protection of the Company’s customers and not for the benefit of investors. In the past, the Company’s business has been materially affected by these regulations. Laws, regulations or policies, including accounting standards and interpretations currently affecting the Company and the Company’s subsidiaries, may change at any time. Regulatory authorities may also change their interpretation of these statutes and regulations. Therefore, the Company’s business may be adversely affected by any future changes in laws, regulations, policies or interpretations or regulatory approaches to compliance and enforcement including future acts of terrorism, major U.S. corporate bankruptcies and reports of accounting irregularities at U.S. public companies. Additionally, the Company’s business is affected significantly by the fiscal and monetary policies ofthe federal government and its agencies. The Company is particularly affected by the policies of the FRB, which regulates the supply of money and credit in the United States of America. Among the instruments of monetary policy available to the FRB are (a) conducting open market operations in U.S. government securities, (b) changing the discount rates of borrowings by depository institutions, (c) changing interest rates paid on balances financial institutions deposit with the FRB, and (d) imposing or changing reserve requirements against certain borrowings by banks and their affiliates. These methods are used in varying degrees and combinations to directly affect the availability of bank loans and deposits, as well as the interest rates charged on loans and paid on deposits. The policies of the FRB may have a material effect on the Company’s business, results of operations and financial condition. Under long- standing policy of the FRB, a BHC is expected to act as a source of financial strength for its subsidiary banks. As a result of that policy, the Company may be required to commit financial and other resources to its subsidiary bank in circumstances where the Company might not otherwise do so. Federal and state governments could pass legislation detrimental to the Company’s performance. As an example, the Company could experience higher credit losses because of federal or state legislation or regulatory action that reduces the amount the Bank's borrowers are otherwise contractually required to pay under existing loan contracts. Also, the Company could experience higher credit losses because of federal or state legislation or regulatory action that limits or delays the Bank's ability to foreclose on property or other collateral or makes foreclosure less economically feasible. Federal, state and local governments could pass tax legislation causing the Company to pay higher levels of taxes. The FDIC insures deposits at insured financial institutions up to certain limits. The FDIC charges insured financial institutions premiums to maintain the Deposit Insurance Fund. The FDIC may increase premium assessments to maintain adequate funding of the Deposit Insurance Fund. The behavior of depositors in regard to the level of FDIC insurance could cause the Bank’s existing customers to reduce the amount of deposits held at the Bank, and could cause new customers to open deposit accounts at the Bank. The level and composition of the Bank's deposit portfolio directly impacts the Bank's funding cost and net interest margin. -13- Systems, Accounting and Internal Control Risks The accuracy of the Company’s judgments and estimates about financial and accounting matters will impact operating results and financial condition. The Company makes certain estimates and judgments in preparing its financial statements. For example, the Company maintains a reserve for potential loan defaults and non-performance. There is no precise method of predicting loans losses and determining the adequacy of the reserve requires the Company’s management to make a number of estimates and judgments. If the estimates or judgments prove to be incorrect, the Company could be required to increase its provisions for credit losses, which could reduce its income or could cause it to incur operating losses in the future. The Company also uses models to estimate the effects of changing interest rates, which are based on estimates and assumptions that may prove to be inaccurate, particularly in times of market stress or unforeseen circumstances. Therefore, the quality and accuracy of management’s estimates and judgments will have an impact on the Company’s operating results and financial condition. For additional information, please see the discussion under “Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies” in this Report, which is incorporated by reference in this paragraph. The Company’s information systems or those of its vendors may experience an interruption or breach in security. The Company relies heavily on communications and information systems, including those of third party vendors and other service providers, to conduct its business. Any failure, interruption or breach in security of these systems could result in failures or disruptions in the Company’s data processing, accounting, customer relationship management and other systems. Communication and information systems failures can result from a variety of risks including, but not limited to, events that are wholly or partially out of the Company’s control, such as telecommunication line integrity, weather, terrorist acts, natural disasters, accidental disasters, unauthorized breaches of security systems, energy delivery systems, cybersecurity incidents, and other events. Although the Company devotes significant resources to maintain and regularly upgrade its systems and processes that are designed to protect the security of the Company’s computer systems, software, networks and other technology assets and the confidentiality, integrity and availability of information belonging to the Company and its customers, there is no assurance that any such failures, interruptions or security breaches will not occur or, if they do occur, that they will be adequately corrected by the Company or its vendors. The occurrence of any such failures, interruptions or security breaches could result in the loss or theft of customer or employee data, damage the Company’s reputation, impair or disrupt the Company’s business operations, result in a loss of customer business, subject the Company to additional regulatory scrutiny, or expose the Company to litigation and possible financial liability, any of which could have a material adverse effect on the Company’s financial condition and results of operations. For example, during the second quarter 2023, the Company was notified that there may have been a compromise of a specific set of files processed by a third party vendor that could have affected a limited number of customers. This incident did not occur on a Company system and the Company does not use the software that may have been compromised. The Company has implemented data security safeguards with its third party vendors designed to quickly identify and contain improper access to sensitive information. The Company notified the affected customers as required by law. As of December 31, 2023, to the Company’s knowledge, there is no indication that any information has been subject to misuse as a result of the incident. The Company’s controls and procedures may fail or be circumvented. Management regularly reviews and updates the Company’s internal control over financial reporting, disclosure controls and procedures, and corporate governance policies and procedures. The Company maintains controls and procedures to mitigate against risks such as processing system failures and errors, and customer or employee fraud, and maintains insurance coverage for certain of these risks. Any system of controls and procedures, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met. Events could occur which are not prevented or detected by the Company’s internal controls or are not insured against or are in excess of the Company’s insurance limits or insurance underwriters’ financial capacity. Any failure or circumvention of the Company’s controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on the Company’s business, results of operations and financial condition. [The remainder of this page intentionally left blank] -14- Operational Risks Climate change and the transition to renewable energy and a net zero emissions economy pose operational, commercial and regulatory risks. Climate change may increase the frequency or severity of extreme weather events, and if the Company is not adequately resilient to deal with acute climate events, its operations may be impacted. Extreme weather events could also impact the activities of its customers or third-party vendors. The physical commodities and assets underlying some of its markets or investments may also be impacted by climate change. Our risk management practices incorporate the challenges brought about by climate change. The operations conducted in our centralized facilities and branch locations can be disrupted by acute physical risks such as flooding and windstorms, and by chronic physical risks such as rising sea levels, sustained higher temperatures, drought, and increased wildfires. Over the intermediate and longer-term, the Company can be subject to transition risks such as market demand, and policy and law changes. None of the Company’s physical locations are located near sea level, and only a limited number of branches are located in flood zones. Our principal electricity supplier reports a Power Content Label of 100% greenhouse gas free using the California Energy Commission’s methodology. Our principal information technology vendor’s goal is to achieve 100 percent carbon neutrality for Scope 1 and 2 greenhouse gas emissions by 2025. The Company and its critical vendors maintain property and casualty insurance, and maintain and regularly test disaster recovery plans, which include redundant operational locations and power sources. The Company’s operations do not use a significant amount of water in producing our products and services. The Company monitors the climate risks of our loan customers. Borrowers with real estate loan collateral located in flood zones must carry flood insurance under the loans’ terms. The Company has $18 million in loans to agricultural borrowers; Management continuously monitors these customers’ access to adequate water sources as well as their ability to sustain low crop yields without encountering financial hardship. The Company makes automobile loans; changes in consumer demand, or governmental laws or policies, regarding gasoline, electric and hybrid vehicles is not considered a risk to the Company’s automobile lending practices. The Company considers climate risk in its underwriting of corporate bonds, and avoids purchasing bonds of issuers, which, in Management’s judgement, have elevated climate risk. In addition, the transition to renewable energy and a net zero emissions economy involves changes to consumer and institutional preferences for energy consumption, and other products and services, and the possible failure of its services to facilitate the needs of customers during the transition to renewable energy and changes in customer preferences could adversely impact its business and revenues. Changing preferences could also have an adverse impact on the operations or financial condition of its customers, which could result in reduced revenues from those customers. The Company is also subject to risks relating to new or heightened climate change-related regulations or legislation, which could impact its customers. The risks associated with climate change and the transition to renewable energy and a net zero emissions economy continue to evolve rapidly, and climate change-related risks may change or increase over time. The effects of pandemics and their impact are highly unpredictable and could be significant, and could harm the Company’s business, financial condition, and operating results. The Company’s business, operations and financial performance may be affected by the macroeconomic impacts resulting from pandemics, and the Company’s financial results in future periods could differ significantly from the Company’s historical results. The extent to which the Company’s business will be affected will depend on a variety of factors, many of which are outside of the Company’s control, including the persistence of the pandemic, the actions of governmental authorities, changes in customer preferences, impacts on economic activity, and the possibility of recession or financial market instability. If the Company loses the services of any of our key management personnel, its business could suffer. Our future success significantly depends on the continued service and performance of our key management personnel. Our senior management team has significant industry experience and would be difficult to replace. In particular, David L. Payne, our Chairman, President and Chief Executive Officer, has led the Company for over 30 years. Competition for these employees is intense and we may not be able to attract and retain key personnel. If we are unable to attract or retain appropriately qualified personnel, we may not be successful in originating loans and servicing our customers, which could have a materially adverse effect on our business, financial condition and results of operations. -15- The Company competes with many banks and other traditional, non-traditional, brick and mortar and online financial service providers. Competition among providers of financial services in markets, particularly within California, is intense. The Company competes with other financial and bank holding companies, state and national commercial banks, savings and loan associations, consumer finance companies, credit unions, securities brokerages, insurance companies, mortgage banking companies, money market mutual funds, asset-based non-bank lenders, government sponsored or subsidized lenders and other financial services providers. Many of these competitors have substantially greater financial resources, lending limits and technological resources than the Company and are able to offer a broader range of products and services. Many competitors offer lower interest rates and more liberal loan terms that appeal to borrowers but adversely affect net interest margin and assurance of repayment. The Company is increasingly faced with competition in many of its products and services by non-bank providers who may have competitive advantages of size, access to potential customers and fewer regulatory requirements, such as “fintech” lenders. Failure to compete effectively for deposit, loan and other banking customers in any of the lines of business could cause the Company to lose market share, slow or reverse growth rate or suffer adverse effects on financial condition, results of operations or profitability. The Company must continue to attract, retain and develop key personnel. The Company’s success depends to a significant extent upon its ability to attract, develop and retain experienced personnel in each of its lines of business and markets including managers in operational areas, compliance and other support areas to build and maintain the infrastructure and controls required to support continuing growth. Competition for the best people in the industry can be intense, and there is no assurance that the Company will continue to attract or retain talent or develop personnel. Factors that affect its ability to attract, develop and retain key employees include compensation and benefits programs, profitability, ability to establish appropriate succession plans for key talent, reputation for rewarding and promoting qualified employees and market competition for employees with certain skills, including information systems development and security. The cost of employee compensation is a significant portion of operating expenses and can materially impact results of operations or profitability, especially during periods of wage inflation. The unanticipated loss of the services of key personnel could have an adverse effect on the business. The Company is subject to environmental liability risk associated with lending activities. A significant portion of our loan portfolio is secured by real property. During the ordinary course of business, we foreclose on and take title to properties securing certain loans. In doing so, there is a risk that hazardous or toxic substances could be found on these properties. If hazardous or toxic substances are found, we may be liable for remediation costs, as well as for personal injury and property damage. Environmental laws may require us to incur substantial expenses and may materially reduce the affected property’s value or limit our ability to use or ability to sell the affected property. Environmental reviews of real property before initiating foreclosure actions may not be sufficient to detect all potential environmental hazards. The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on our business, financial condition and results of operations. ITEM 1B. UNRESOLVED STAFF COMMENTS None ITEM 1C. CYBERSECURITY The Company has developed and implemented an Information Security Program based on the Cybersecurity Framework (CSF) best practices and recommendations from the National Institute of Standards and Technology (NIST), applicable regulatory guidance, and other industry standards. Components of the program include a risk assessment program to identify, assess, and mitigate cybersecurity risk; a vendor management program to address third-party cybersecurity risk; and an incident response program documenting cybersecurity incident response and notification procedures. The Company's Information Security Officer (ISO) oversees the programs and reports on their statuses to management committees including the Information Security Review Committee (ISRC) and the Information Systems Steering Committee (ISSC). The ISO has several years of professional experience in cybersecurity and vendor management, and holds multiple relevant professional certifications. The ISO provides an update to the Board of Directors on a quarterly basis. The Information Security Program is approved by the Board annually. The ISO maintains risk assessments for key IT systems. A third party cybersecurity risk assessment tool, as well as the FFIEC's Cybersecurity Assessment Tool (CAT) are also used annually to assess cybersecurity risk. -16- Third parties are assessed and categorized according to service type, compliance risk, financial risk, operational risk, and security risk. The level of due diligence and ongoing monitoring that is performed is based on inherent risk as well as specifics such as if the vendor hosts data in the cloud or has access to consumer information. The Company uses a training system to educate new and existing employees on cybersecurity risks. In addition to this training program, simulated phishing attempts are sent to employees on a regular basis to evaluate their understanding of these risks. The Company uses data loss prevention and web filtering software to ensure malicious data does not enter the Company's network, and sensitive information does not leave the network unless properly secured. Penetration tests and vulnerability scanning are performed on a regular basis. All Company networks are secured behind firewalls. Additionally, Security Information and Event Management (SIEM) technology, an Intrusion Detection System (IDS), and an Intrusion Prevention System (IPS) are used. Access to data on the Company's networks is granted only if needed for job functions. Data Security Analysts review changes to access to ensure they are authorized and appropriate. An Incident Response Committee that includes representatives from key areas of the Company meets in the event of cybersecurity incidents. The Committee ensures the proper notifications are made in order to comply with all relevant laws, rules and regulations. During the year ended December 31, 2023, there were no cybersecurity incidents that materially affected or are reasonably likely to materially affect the Company. For discussion of the risks from cybersecurity threats, including potential impact to the Company’s business strategy, results of operations, and financial condition, refer to “Item 1A – Risk Factors – The Company’s information systems may experience an interruption or breach in security” in this Report, which is incorporated by reference in this paragraph. ITEM 2. PROPERTIES Branch Offices and Facilities The Bank is engaged in the banking business through 77 branch offices in 20 counties in Northern and Central California. The Bank believes all of its offices are constructed and equipped to meet prescribed security requirements. The Company owns 28 banking office locations and one centralized administrative service center facility and leases 55 facilities. Most of the leases contain renewal options and provisions for rental increases, principally for changes in the cost of living index, and for changes in other operating costs such as property taxes and maintenance. ITEM 3. LEGAL PROCEEDINGS Due to the nature of its business, the Company is subject to various threatened or filed legal cases. Neither the Company nor any of its subsidiaries is a party to any material pending legal proceeding, nor is their property the subject of any material pending legal proceeding, other than ordinary routine legal proceedings arising in the ordinary course of the Company’s business. Based on the advice of legal counsel, the Company does not expect such cases will have a material, adverse effect on its business, financial position or results of operations. Legal liabilities are accrued when obligations become probable and the amount can be reasonably estimated. ITEM 4. MINE SAFETY DISCLOSURES Not applicable PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS ANDISSUER PURCHASES OF EQUITY SECURITIES The Company’s common stock is traded on the NASDAQ Stock Market (“NASDAQ”) under the symbol “WABC”. As of January 31, 2024, there were approximately 4,700 shareholders of record of the Company’s common stock. The Company has paid cash dividends on its common stock in every quarter since its formation in 1972. See Item 8, Financial Statements and Supplementary Data, Note 19 to the consolidated financial statements for recent quarterly dividend information. It is currently the intention of the Board of Directors of the Company to continue payment of cash dividends on a quarterly basis. There is no assurance, however, that any dividends will be paid since they are dependent upon earnings, cash balances, financial condition and capital requirements of the Company and its subsidiaries as well as policies of the FRB pursuant to the BHCA. See Item 1, “Business - Supervision and Regulation.” -17- The notes to the consolidated financial statements included in this Report contain additional information regarding the Company’s capital levels, capital structure, regulations affecting subsidiary bank dividends paid to the Company, the Company’s earnings, financial condition and cash flows, and cash dividends declared and paid on common stock. Stock performance The following chart compares the cumulative return on the Company’s stock during the ten years ended December 31, 2023 with the cumulative return on the S&P 500 composite stock index and NASDAQ’S Bank Index. The comparison assumes $100 invested in each on December 31, 2013 and reinvestment of all dividends.     December 31,       2013     2014     2015     2016     2017     2018   Westamerica Bancorporation (WABC)   $ 100.00     $ 89.54     $ 88.30     $ 122.54     $ 119.28     $ 114.52   S&P 500 (SPX)     100.00       113.57       115.09       128.83       156.90       149.95   NASDAQ Bank Index (CBNK)     100.00       104.86       114.02       157.13       165.51       138.51       December 31,       2019     2020     2021     2022     2023   Westamerica Bancorporation (WABC)   $ 143.05     $ 120.04     $ 128.93     $ 135.57     $ 134.51   S&P 500 (SPX)     197.00       233.39       300.27       245.75       310.24   NASDAQ Bank Index (CBNK)     172.04       159.11       227.27       190.13       183.55   [The remainder of this page intentionally left blank] -18- The following chart compares the cumulative return on the Company’s stock during the five years ended December 31, 2023 with the cumulative return on the S&P 500 composite stock index and NASDAQ’S Bank Index. The comparison assumes $100 invested in each on December 31, 2018 and reinvestment of all dividends.     December 31,       2018     2019     2020     2021     2022     2023   Westamerica Bancorporation (WABC)   $ 100.00     $ 124.91     $ 104.82     $ 112.58     $ 118.38     $ 117.45   S&P 500 (SPX)     100.00       131.38       155.65       200.25       163.89       206.90   NASDAQ Bank Index (CBNK)     100.00       124.21       114.87       164.08       137.27       132.52   ISSUER PURCHASES OF EQUITY SECURITIES The Company repurchases shares of its common stock in the open market to optimize the Company’s use of equity capital and enhance shareholder value and with the intention of lessening the dilutive impact of issuing new shares under stock option plans, and other ongoing requirements. The repurchase plan approved July 28, 2022 expired September 1, 2023. There is no replacement plan in place currently. No shares were repurchased during the period from October 1, 2023 through December 31, 2023. ITEM 6. [RESERVED] [The remainder of this page intentionally left blank] -19- ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOF OPERATIONS The following financial information for the three years ended December 31, 2023 has been derived from the Company’s audited consolidated financial statements. This information should be read in conjunction with those statements, notes and other information included elsewhere herein. WESTAMERICA BANCORPORATION FINANCIAL SUMMARY     For the Years Ended December 31,       2023     2022     2021       (In thousands, except per share data and ratios)   Interest and loan fee income   $ 284,013     $ 221,756     $ 173,443   Interest expense     3,890       1,925       1,955   Net interest and loan fee income     280,123       219,831       171,488   Reversal of provision for credit losses     (1,150 )     -       -   Noninterest income:                         Life insurance gains     279       930       -   Securities (losses) gains     (125 )     -       34   Other noninterest income     43,368       44,191       43,311   Total noninterest income     43,522       45,121       43,345   Noninterest expense     103,216       99,361       97,806   Income before income taxes     221,579       165,591       117,027   Income tax provision     59,811       43,557       30,518   Net income   $ 161,768     $ 122,034     $ 86,509                             Average common shares outstanding     26,703       26,895       26,855   Average diluted common shares outstanding     26,706       26,907       26,870   Common shares outstanding at December 31,     26,671       26,913       26,866                             Per common share:                         Basic earnings   $ 6.06     $ 4.54     $ 3.22   Diluted earnings     6.06       4.54       3.22   Book value at December 31,     28.98       22.37       30.79                             Financial ratios:                         Return on assets     2.35 %     1.65 %     1.23 % Return on common equity     18.08 %     15.21 %     11.52 % Net interest margin (FTE)(1)     4.37 %     3.17 %     2.62 % Net loan losses to average loans     0.25 %     0.32 %     0.03 % Efficiency ratio(2)     31.7 %     37.2 %     45.0 % Equity to assets     12.14 %     8.66 %     11.09 %                           Period end balances:                         Assets   $ 6,364,592     $ 6,950,317     $ 7,461,026   Loans     866,602       958,488       1,068,126   Allowance for credit losses     16,867       20,284       23,514   Investment securities     4,878,198       5,247,657       4,945,258   Deposits     5,474,267       6,225,290       6,413,956   Identifiable intangible assets and goodwill     122,020       122,256       122,508   Short-term borrowed funds     58,162       57,792       146,246   Shareholders' equity     772,894       602,110       827,102                             Capital ratios at period end:                         Total risk based capital     19.15 %     15.64 %     15.47 % Tangible equity to tangible assets     10.43 %     7.03 %     9.60 %                           Dividends paid per common share   $ 1.72     $ 1.68     $ 1.65   Common dividend payout ratio     28 %     37 %     51 % (1) Yields on securities and certain loans have been adjusted upward to a "fully taxable equivalent" ("FTE") basis in order to reflect the effect of income which is exempt from federal income taxation at the current statutory tax rate. (2) The efficiency ratio is defined as noninterest expense divided by total revenue (net interest income on an FTE basis and noninterest income). -20- The following discussion addresses information pertaining to the financial condition and results of operations of Westamerica Bancorporation and subsidiaries (the “Company”) that may not be otherwise apparent from a review of the consolidated financial statements and related footnotes. It should be read in conjunction with those statements and notes found on pages 52 through 89, as well as with the other information presented throughout this Report.   Critical Accounting Policies   The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and follow general practices within the banking industry. Application of these principles requires the Company to make certain estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available as of the date of the financial statements; accordingly, as this information changes, the financial statements could reflect different estimates, assumptions, and judgments. Certain accounting policies inherently have a greater reliance on the use of estimates, assumptions and judgments and as such have a greater possibility of producing results that could be materially different than originally reported. Estimates, assumptions and judgments are necessary when assets and liabilities are required to be recorded at fair value, when a decline in the value of an asset not carried on the financial statements at fair value warrants an impairment writedown or valuation reserve to be established, or when an asset or liability needs to be recorded contingent upon a future event. Carrying assets and liabilities at fair value inherently results in more financial statement volatility. The fair values and the information used to record valuation adjustments for certain assets and liabilities are based either on quoted market prices or are provided by other third-party sources, when available.   The most significant accounting policies followed by the Company are presented in Note 1 to the consolidated financial statements. These policies, along with the disclosures presented in the other financial statement notes and in this discussion, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined. Based on the valuation techniques used and the sensitivity of financial statement amounts to the methods, assumptions, and estimates underlying those amounts, Management has identified the allowance for credit losses on loans accounting to be a critical accounting estimate. The accounting for the accounting area requiringallowance for credit losses on loans requires the most subjective or complex judgments, and as such could be most subject to revision as new information becomes available. AThe methodology, significant inputs and assumptions for the allowance for credit losses on loans are discussed in the section “Allowance for Credit Losses on Loans” below. Additional discussion of the factors affecting accounting for the allowance for credit losses and purchasedon loans is included in the “Loan Portfolio Credit Risk” discussion below. The Company’s allowance for credit losses on loans is established to provide for expected losses based on the available estimates at that point in time. Changes in economic conditions could significantly impact the estimated losses and could materially affect the Company’s operating results.   Financial Overview   Westamerica Bancorporation and subsidiaries’ (collectively, the “Company”)The Company reported net income of $80.4$161.8 million or $2.98$6.06 diluted earnings per common share (“EPS”) in 2020. The COVID-19 coronavirus pandemic began2023 compared with net income of $122.0 million or $4.54 EPS in the United States2022 and Californianet income of $86.5 million or $3.22 EPS in the first quarter 2020 and continued to cause escalating infections in the United States through the fourth quarter 2020. In response to the pandemic, the Company’s primary and wholly-owned subsidiary bank, Westamerica Bank (the “Bank”), funded $249 million Paycheck Protection Program (“PPP”) loans for the Bank’s customers during the second quarter 2020. PPP loans meaningfully increased interest-earning assets and related interest and fee income. The Bank continues to work with loan customers requesting deferral of loan payments due to economic weakness caused by the pandemic. At December 31, 2020, consumer loans granted loan deferrals totaled $2.5 million, commercial real estate loans with deferred payments totaled $7.8 million, primarily for hospitality and retail properties, and commercial loans with deferred payments totaled $33 thousand. The2021. 2023 results for 2020 included a $1.2 million reversal of provision for credit losses, of $4.3 million, which reduced EPS $0.11, representing Management’s estimate of additional reserves needed over the remaining life of its loans due to increased credit-risk from deteriorating economic conditions caused by the COVID-19 pandemic. Results for 2020 include a $3.5 million gain on salesnet of a closed branch building which increased EPS $0.13. These results compare to net income of $80.4 million or $2.98 diluted earnings per common share$400 thousand provision for 2019. Results for 2019 includecredit losses, a tax-exempt life insurance gain of $433$279 thousand and $553 thousand in loss contingencies. The loss contingencies include a $301 thousand increase in estimated customer refunds of revenue recognized prior to 2018 and a $252 thousand settlement to dismiss a lawsuit. During the year ended December 31, 2020, the Company paid $4,410 thousand of obligations accrued in prior years to customers eligible for refunds. The remaining obligations at December 31, 2020 was $1,433 thousand, included in other liabilities. The tax-exempt life insurance gain and loss contingencies did not have a significant impact$492 thousand increase to reconcile the 2022 income tax provision to the filed  2022 tax returns. 2022 results included a $1.2 million reconciling payment from a payments network and a $930 thousand life insurance gain equivalent to combined EPS of $0.07. 2021 results included “make-whole” interest income on the EPS for 2019.corporate bonds redeemed prior to maturity of $2.8 million.   Regions and states of the United States of America, including California implemented varying degrees of “stay at home” directives in an effort to prevent the spread of the virus in the first quarter of 2020. These directives have significantly reduced economic activity in the United States and the State of California. In the second and third quarters 2020 the “stay at home” directives were gradually lifted in varying stages in counties of the State of California. Counties with high infection rates delayed reopening and restrictions on certain economic activity remained. When infections increased in the fourth quarter restrictions were re-imposed to some degree. California-based claims for unemployment rose and remained elevated during 2020. The California “stay at home” directive excludes essential businesses including banks. The Bank remains open and fully operational. -20- In response to the pandemic, the Federal Reserve has engaged significant levels of monetary policy to provide liquidity and credit facilities to the financial markets. On March 15, 2020, the Federal Open Market Committee of the Federal Reserve Board (“FOMC”) reducedhas tightened monetary policy through increases to the overnight federal funds interest rate starting in March 2022. On January 31, 2024, the FOMC decided to maintain the target range for the federal funds rate at the range of 5.25% to 05.50%. The January 31, 2024 Federal Reserve press release stated, “Recent indicators suggest that economic activity has been expanding at a solid pace. Job gains have moderated since early last year but remain strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated. The Committee seeks to 0.25 percent; relatedly,achieve maximum employment and inflation at the FOMC reducedrate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals are moving into better balance. The economic outlook is uncertain, and Committee remains highly attentive to inflation risks. In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 5.25% to 5.50%. In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent… The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.” The interest rate paid on depositreserve balances to 0.10 percent effective March 16, 2020.at the Federal Reserve Bank remained at 5.40%. The Bank maintains depositreserve balances at the Federal Reserve Bank; the amount that earns interest is identified in the Company’s financial statements as “interest-bearing cash”.   -21- Management continues to evaluate the impacts of inflation, the Federal Reserve’s monetary policy and climate changes on the Company’s business and its customers. Recently, the banking industry experienced significant volatility with several regional bank failures in the first half of 2023. Industrywide concerns remained related to liquidity, deposit outflows and unrealized losses on debt securities. These events could adversely affect the Company’s funding of its operations. The extent of the spread of the coronavirus and its ultimate containment are uncertain at this time. The effectiveness of the Federal Reserve Bank’s monetary policies and the federal government’s fiscal policies in stimulating the United States economy is uncertain at this time. Management expects the Company’s net interest margin and non-interest income to decline and credit-related losses to increase for an uncertain period given the decline in economic activity occurring due to the coronavirus. The amount of impact on the Company’s results of operations, cash flow liquidity, and financial results is uncertain. Please referperformance, as well as the Company’s ability to Part II, Item 1A “Risk factors” in this reportexecute near- and long-term business strategies and initiatives, will depend on Form 10-K.numerous evolving factors and future developments, which are uncertain and cannot be reasonably predicted.   The Company presents its net interest margin and net interest income on a fully taxable equivalent (“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 an FTE basis.   The Company’s significant accounting policies (see Note 1 “Summary of Significant Accounting Policies” to the Consolidated Financial Statements below) are fundamental to understanding the Company’s results of operations and financial condition. The Company adopted the following new accounting guidance:   FASB ASU 2016-13,2022-02, Financial Instruments – - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,Troubled Debt Restructurings and Vintage Disclosures was, issued on June 16, 2016.March 2022, eliminates the recognition and measurement guidance for troubled debt restructurings and requires enhanced disclosures about loan modifications for borrowers experiencing financial difficulty. This ASU also requires enhanced disclosure for loans that have been charged off. The ASU significantly changed estimates for credit losses related to financial assets measured at amortized cost and certain other contracts. For estimating credit losses, the FASB replaced the incurred loss model with the current expected credit loss (CECL) model, which accelerated recognition of credit losses.  Additionally, credit losses relating to debt securities available-for-sale are recorded through an allowance for credit losses under the new standard. The Company is also required to provide additional disclosures related to the financial assets within the scope of the new standard. The Company adopted the ASU provisions on January 1, 2020. Management evaluated available data, defined portfolio segments of loans with similar attributes, and selected loss estimate models for each identified loan portfolio segment. Management measured historical loss rates for each portfolio segment. Management also segmented debt securities held to maturity, selected methods to estimate losses for each segment, and measured a loss estimate. Agency mortgage-backed securities were assigned no credit loss allowance due to the perceived backing of government sponsored entities. Municipal securities were evaluated for risk of default based on credit rating and remaining term to maturity using Moody’s risk of default factors; Moody’s loss upon default factors were applied to the assumed defaulted principal amounts to estimate the amount for credit loss allowance. The adjustment to the allowance for credit losses was recorded through an offsetting after-tax adjustment to shareholders’ equity. The implementing entry increased allowance for credit losses on loans by $2,017 thousand, reduced allowance for unfunded credit commitments by $2,107 thousand and increased retained earnings by $52 thousand.                                                FASB ASU 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, was issued August 2018.  The ASU is part of the disclosure framework project, where the primary focus is to improve the effectiveness of disclosures in the financial statements. The ASU removes, modifies and adds disclosure requirements related to Fair Value Measurements. The provisions of the ASU werebecame effective January 1, 2020 with the option to early adopt any removed or modified disclosures upon issuance of the ASU.2023 under a prospective approach. The Company early adopted the provisions to remove the recognition and measurement guidance for troubled debt restructurings and/or modify relevant disclosures in the “Fair Value Measurements”“Loans” note to the unaudited consolidated financial statements. The requirement to include additional disclosures was adopted by the Company January 1, 2020.2023.  The additional disclosures did not affect the financial results upon adoption.   FASB Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, was issued December 2019.  The ASU is intended to simplify various aspects related to accounting for income taxes, eliminates certain exceptions to the general principles in ASC Topic 740 related to intra-period tax allocation, simplifies when companies recognize deferred taxes in an interim period, and clarifies certain aspects of the current guidance to promote consistent application. This guidance was effective for public entities for fiscal years beginning after December 15, 2020, and for interim period within those fiscal years, with early adoption permitted. The Company adopted the ASU provisions on January 1, 2021 and the adoption of the ASU provisions did not have a significant impact on the Company’s consolidated financial statements. [The remainder of this page intentionally left blank] -21--22-     Net Income   Following is a summary of the components of net income for the periods indicated:     For the Years Ended December 31,     For the Years Ended December 31,     2020     2019     2018     2023     2022     2021     ($ in thousands, except per share data)     ($ in thousands, except per share data)   Net interest and loan fee income   $ 164,032     $ 156,794     $ 149,764     $ 280,123     $ 219,831     $ 171,488   FTE adjustment     3,650       4,612       5,646       1,550       1,944       2,663   Net interest and loan fee income (FTE)   167,682     161,406     155,410     281,673     221,775     174,151   Provision for credit losses   (4,300 )   -     -   Reversal of provision for credit losses   1,150     -     -   Noninterest income   45,637     47,408     48,149     43,522     45,121     43,345   Noninterest expense     (98,566 )     (98,986 )     (106,916 )     (103,216 )     (99,361 )     (97,806 ) Income before income taxes (FTE)   110,453     109,828     96,643     223,129     167,535     119,690   Income taxes (FTE)     (30,040 )     (29,439 )     (25,079 )     (61,361 )     (45,501 )     (33,181 ) Net income   $ 80,413     $ 80,389     $ 71,564     $ 161,768     $ 122,034     $ 86,509       Net income per average fully-diluted common share   $ 2.98     $ 2.98     $ 2.67     $ 6.06     $ 4.54     $ 3.22   Net income as a percentage of average shareholders' equity   11.30 %   11.90 %   11.35 %   18.08 %   15.21 %   11.52 % Net income as a percentage of average total assets   1.30 %   1.44 %   1.27 %   2.35 %   1.65 %   1.23 %   Net income remained at the same level in 2020 and 2019.for 2023 increased $39.7 million compared with 2022. Net interest and loan fee income (FTE) income increased $6.3$59.9 million in 2023 compared with 2022 due to higher yield on interest-earning assets and higher average balances of investments and average balances of $151 million of PPP loans,investment debt securities, partially offset by lower yield on interest-bearing earning assets and lower average balances of other loans. Resultsloans and interest-bearing cash and higher rate on interest-bearing liabilities. The Company recorded a $1.2 million reversal of provision for 2020 includecredit losses in 2023, reflecting a $2.2 million recovery on a previously charged off loan in the first quarter 2023 and a $400 thousand credit loss provision, based on the results of the Company’s current expected credit loss (“CECL”) model and Management’s estimate of credit losses of $4.3 million, representing Management estimate of additional reserves needed over the remaining life of its loans dueand debt securities held to credit-risk from economic weakness caused bymaturity. The Company provided no provision for credit losses in 2022, based on Management’s estimate of credit losses over the COVID-19 pandemic.remaining life of its loans and debt securities held to maturity. Noninterest income in 2023 decreased $1.8$1.6 million compared with 20192022 primarily because 2022 included a $1.2 million reconciling payment from a payments network and higher gains on life insurance. Noninterest expense in 2023 increased $3.9 million compared with 2022 primarily due to lower income from activity based fees due to reduced economic activity related to the COVID-19 pandemic. Additionally, the results for 2019 included a life insurance gain of $433 thousand. The decreaseincreases in noninterest income from 2019 to 2020 was partially offset by $3.5 million in gains on sales of a closed branch building in 2020. In 2020 noninterest expense decreased $420 thousand compared with lower salaries and benefits, occupancy and equipment expenses, and lower amortization of intangible assets, and because the resultsincreased FDIC insurance assessments for 2019 included $553 thousand of loss contingency. The decrease wasall insured depository institutions. Lower professional fees partially offset by higher FDIC assessments (includedthe increases in “other noninterest expense”)expense in 2020 because FDIC assessments in 2019 were reduced by application of the Bank’s FDIC assessment credit described in Part 1, Item 1, “Premiums for Deposit Insurance”.2023 compared with 2022. The effective tax ratesrate (FTE) was 27.5% in 2023 and 27.2% in 2022. 2023 tax provision included a $492 thousand increase to reconcile the 2022 income tax provision to the filed  2022 tax returns. Net income for 20202022 increased $35.5 million compared with 26.8% for 2019. Comparing 2019 with 2018, net income increased $8.8 million.2021. Net interest and loan fee income (FTE) income increased $6.0$47.6 million in 2022 compared with 2021 due to a higher net yield on earning assets and higher average balances of investments,investment debt securities and higher yield on interest-earning assets, partially offset by lower average balances of interest-bearing cash and loans. The provision for loancredit losses remainedwas zero for 2022 and 2021, reflecting Management's evaluationestimate of credit losses inherentover the remaining life of its loans and investment debt securities. Noninterest income in the loan portfolio. In 2019, noninterest income decreased $741 thousand2022 increased $1.8 million compared with 20182021 primarily due to lowera $1.2 million reconciling payment from a payments network, a $930 thousand life insurance gain and higher fee income from service charges on deposit accounts, other service charges and debit card fees,accounts. The increases in 2022 compared 2021 was partially offset in part by an increasedecreases in merchant processing servicesservice income and securities gainsother noninterest income. Noninterest expense in 2019. In 2019 noninterest expense decreased $7.92022 increased $1.6 million compared with 20182021. Limited partnership operating losses increased $3.1 million due to higher estimated operating losses on limited partnership investments in low-income housing and occupancy and equipment expense increased primarily due to decreasessoftware upgrades. The increase in loss contingencies,2022 compared with 2021 was partially offset by a decrease in salaries and related benefits FDIC insurance assessments,resulting from attrition and intangible amortization.lower professional fees. The effective tax ratesrate (FTE) was 26.8% for 201927.2% in 2022 compared with 26.0% for 2018.27.7% in 2021.   [The remainder of this page intentionally left blank]         -22--23-     Net Interest and Loan Fee Income (FTE)   The Company's primary source of revenue is net interest income, or the difference between interest income earned on loans and investment securities and interest expense paid on interest-bearing deposits and other borrowings.   Components of Net Interest and Loan Fee Income (FTE)     For the Years Ended December 31,     For the Years Ended December 31,     2020     2019     2018     2023     2022     2021     ($ in thousands)     ($ in thousands)   Interest and loan fee income   $ 165,856     $ 158,682     $ 151,723     $ 284,013     $ 221,756     $ 173,443   FTE adjustment     3,650       4,612       5,646       1,550       1,944       2,663   Net interest and loan fee income (FTE)   169,506     163,294     157,369   Interest and loan fee income (FTE)   285,563     223,700     176,106   Interest expense     (1,824 )     (1,888 )     (1,959 )     (3,890 )     (1,925 )     (1,955 ) Net interest and loan fee income (FTE)   $ 167,682     $ 161,406     $ 155,410     $ 281,673     $ 221,775     $ 174,151       Net interest margin (FTE)   2.91 %   3.11 %   2.98 %   4.37 %   3.17 %   2.62 %   Net interest and loan fee income (FTE) increased $6.3$59.9 million in 20202023 compared with 20192022 due to higher average balances of investments (up $445 million) and average balances of $151 million of PPP loans, partially offset by lower yield on interest-bearing earning assets (down 0.20%) and lower average balances of other loans (down $74 million). Comparing 2019 with 2018, net interest and loan fee income (FTE) increased $6.0 million due to a higher net yield on earninginterest-earning assets (up 0.12%1.23%) and higher average balances of investmentsinvestment debt securities (up $127$31 million), partially offset by lower average balances of loans (down $86 million) and interest-bearing cash (down $101$486 million) and higher rate on interest-bearing liabilities (up 0.07%). Net interest and loan fee income (FTE) increased $47.6 million in 2022 compared with 2021 due to higher average balances of investment securities (up $723 million) and higher yield on interest-earning assets (up 0.55%), partially offset by lower average balances of loans (down $47$197 million).   The net interest margin (FTE) was 2.91%4.37% in 2020, 3.11%2023, 3.17% in 20192022 and 2.98%2.62% in 2018.2021. The yield on earning assets (FTE) was 2.94%4.43% in 2020, 3.14%2023, 3.20% in 20192022 and 3.02%2.65% in 2018. Market interest rates declined in 2020 compared with 2019. Additionally, investments, which generally carry lower yield than loans, made up a higher percentage of total earning assets in 2020 than in prior periods. (72.0% in 2020 compared with 71.4% in 2019 and 68.6% in 2018).2021.   The Company’s funding costs were 0.06% in 2023, compared with 0.03% in 20202022 and 2019 compared with 0.04%2021. Noninterest bearing deposits represented 47% of average deposits in 2018.2023 and 2022, while higher-cost time deposits represented 2% for both periods. Average balances of time deposits in 20202023 declined $18$24 million from 2019. Average balances of lower-cost checking and savings deposits grew 11% from 2019 to 2020.2022. Average balances of checking and saving deposits accounted for 96.9%98.0% of average total deposits in 20202023 compared with 96.2%97.8% in 20192022. The customer deposits and 95.6% in 2018.shareholders’ equity fully funded the Company’s interest earning assets for 2023 and 2022; there was no borrowing from the Federal Reserve Bank or correspondent banks.   Net Interest Margin (FTE)   The following summarizes the components of the Company's net interest margin (FTE) for the periods indicated.     For the Years Ended December 31,     For the Years Ended December 31,     2020     2019     2018     2023     2022     2021       Yield on earning assets (FTE)   2.94 %   3.14 %   3.02 %   4.43 %   3.20 %   2.65 % Rate paid on interest-bearing liabilities     0.06 %     0.07 %     0.07 %     0.12 %     0.05 %     0.06 % Net interest spread (FTE)   2.88 %   3.07 %   2.95 %   4.31 %   3.15 %   2.59 % Impact of noninterest-bearing demand deposits     0.03 %     0.04 %     0.03 % Benefit of noninterest-bearing demand deposits     0.06 %     0.02 %     0.03 % Net interest margin (FTE)     2.91 %     3.11 %     2.98 %     4.37 %     3.17 %     2.62 %   [The remainderincrease in the Company’s yield on earning assets has been generated primarily by collateralized loan obligations (CLOs), held in debt securities available for sale portfolio, and interest-bearing cash. The CLOs have interest coupons that change once every three months by the amount of this page intentionally left blank]change in the three-month SOFR base rates. The average balances and yields of CLOs for 2023 and 2022 was $1,543 million yielding 6.99% and $1,567 million yielding 3.62%, respectively. The interest-bearing cash yield changes by the amount of change in the overnight federal funds rate on the effective date declared by the FOMC. The average balance and yields of interest-bearing cash for 2023 and 2022 was $205 million yielding 5.21% and $691 million yielding 1.13%, respectively. The Company has other earning assets with variable yields such as commercial loans and lines of credit, consumer lines of credit and adjustable rate residential real estate loans, which are included in “other taxable loans” in the following “Summary of Average Balances, Yields/Rates and Interest Differential.”   -23--24-     Summary of Average Balances, Yields/Rates and Interest Differential   The following tables present information regarding the consolidated average assets, liabilities and shareholders’ equity, the amounts of interest income earned from average interest earning assets and the resulting yields, and the amounts of interest expense incurred on average interest-bearing liabilities and the resulting rates. Average loan balances include nonperforming loans. Interest income includes reversal of previously accrued interest on loans placed on non-accrual status during the period and proceeds from loans on nonaccrual status only to the extent cash payments have been received and applied as interest income and accretion of purchased loan discounts. Yields on tax-exempt securities and loans have been adjusted upward to reflect the effect of income exempt from federal income taxation at the federal statutory tax rate of 21 percent.   Distribution of Assets, Liabilities & Shareholders’ Equity and Yields, Rates & Interest Margin     For the Year Ended December 31, 2020     For the Year Ended December 31, 2023         Interest             Interest         Average   Income/   Yields/     Average   Income/   Yields/     Balance     Expense     Rates     Balance     Expense     Rates     ($ in thousands)     ($ in thousands)   Assets                 Investment securities:                 Taxable   $ 3,689,769     $ 93,163     2.52 %   $ 5,176,278     $ 221,742     4.28 % Tax-exempt (1)     460,191       15,395     3.35 %     158,433       5,668     3.58 % Total investments (1)   4,149,960     108,558     2.62 %   5,334,711     227,410     4.26 % Loans:                 Taxable:               PPP loans   151,320     6,516     4.31 % Other     1,039,724       51,336     4.94 % Total taxable   1,191,044     57,852     4.86 % Taxable   868,255     45,739     5.27 % Tax-exempt (1)     48,100       1,931     4.01 %     44,061       1,743     3.96 % Total loans (1)   1,239,144     59,783     4.82 %   912,316     47,482     5.20 % Total interest-bearing cash     371,444       1,165     0.31 %     204,794       10,671     5.21 % Total Interest-earning assets (1)   5,760,548     169,506     2.94 %   6,451,821     285,563     4.43 % Other assets     413,922                 419,545             Total assets   $ 6,174,470               $ 6,871,366                 Liabilities and shareholders' equity                 Noninterest-bearing demand   $ 2,538,819     $ -     - %   $ 2,748,544     $ -     - % Savings and interest-bearing transaction   2,603,476     1,258     0.05 %   2,922,909     3,450     0.12 % Time less than $100,000   91,519     193     0.21 %   67,832     204     0.30 % Time $100,000 or more     72,363       319     0.44 %     48,076       116     0.24 % Total interest-bearing deposits   2,767,358     1,770     0.06 %   3,038,817     3,770     0.12 % Short-term borrowed funds   80,456     53     0.07 %     89,298       120     0.13 % Other borrowed funds     174       1     0.35 % Total interest-bearing liabilities   2,847,988     1,824     0.06 %   3,128,115     3,890     0.12 % Other liabilities   76,109                 100,097             Shareholders' equity     711,554               894,610             Total liabilities and shareholders' equity   $ 6,174,470               $ 6,871,366             Net interest spread (1) (2)             2.88 %             4.31 % Net interest and fee income and interest margin (1) (3)         $ 167,682     2.91 %         $ 281,673     4.37 %   (1) Amounts calculated on an FTE basis using the current statutory federal tax rate. (2) Net interest spread represents the average yield earned on interest-earning assets less the average rate incurred on interest-bearing liabilities. (3) (1) Amounts calculated on an FTE basis using the current statutory federal tax rate. (2) Net interest spread represents the average yield earned on interest-earning assets less the average rate incurred on interest-bearing liabilities. (3)Net interest margin is computed by calculating the difference between interest income and expense, divided by the average balance of interest-earning assets. The net interest margin is greater than the net interest spread due to the benefit of noninterest-bearing demand deposits.   -24--25-     Distribution of Assets, Liabilities & Shareholders’ Equity and Yields, Rates & Interest Margin       For the Year Ended December 31, 2022               Interest               Average     Income/     Yields/       Balance     Expense     Rates       ($ in thousands)   Assets                         Investment securities:                         Taxable   $ 5,093,921     $ 158,465       3.11 % Tax-exempt (1)     209,725       7,390       3.52 % Total investments (1)     5,303,646       165,855       3.13 % Loans:                         Taxable     951,516       48,274       5.07 % Tax-exempt (1)     46,448       1,781       3.83 % Total loans (1)     997,964       50,055       5.02 % Total interest-bearing cash     691,086       7,790       1.13 % Total Interest-earning assets (1)     6,992,696       223,700       3.20 % Other assets     420,312                   Total assets   $ 7,413,008                                             Liabilities and shareholders' equity                         Noninterest-bearing demand   $ 3,018,350     $ -       - % Savings and interest-bearing transaction     3,257,858       1,510       0.05 % Time less than $100,000     77,007       180       0.23 % Time $100,000 or more     62,411       156       0.25 % Total interest-bearing deposits     3,397,276       1,846       0.05 % Short-term borrowed funds     109,283       79       0.07 % Total interest-bearing liabilities     3,506,559       1,925       0.05 % Other liabilities     85,610                   Shareholders' equity     802,489                   Total liabilities and shareholders' equity   $ 7,413,008                   Net interest spread (1) (2)                     3.15 % Net interest and fee income and interest margin (1) (3)           $ 221,775       3.17 %       For the Year Ended December 31, 2019               Interest               Average     Income/     Yields/       Balance     Expense     Rates       ($ in thousands)   Assets                         Investment securities:                         Taxable   $ 3,089,099     $ 77,800       2.52 % Tax-exempt (1)     615,665       19,923       3.24 % Total investments (1)     3,704,764       97,723       2.64 % Loans:                         Taxable     1,112,250       56,550       5.08 % Tax-exempt (1)     49,529       2,028       4.10 % Total loans (1)     1,161,779       58,578       5.04 % Total interest bearing cash     324,733       6,993       2.15 % Total interest-earning assets(1)     5,191,276       163,294       3.14 % Other assets     405,833                   Total assets   $ 5,597,109                                             Liabilities and shareholders' equity                         Noninterest-bearing demand   $ 2,222,876     $ -       - % Savings and interest-bearing transaction     2,396,604       1,274       0.05 % Time less than $100,000     103,399       254       0.25 % Time $100,000 or more     78,925       326       0.41 % Total interest-bearing deposits     2,578,928       1,854       0.07 % Short-term borrowed funds     51,442       34       0.07 % Total interest-bearing liabilities     2,630,370       1,888       0.07 % Other liabilities     68,351                   Shareholders' equity     675,512                   Total liabilities and shareholders' equity   $ 5,597,109                   Net interest spread (1) (2)                     3.07 % Net interest and fee income and interest margin (1) (3)           $ 161,406       3.11 % (1) Amounts calculated on an FTE basis using the current statutory federal tax rate. (1) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate. (2) Net interest spread represents the average yield earned on interest-earning assets less the average rate incurred on interest-bearing liabilities. (3) (2) Net interest spread represents the average yield earned on interest-earning assets less the average rate incurred on interest-bearing liabilities. (3)Net interest margin is computed by calculating the difference between interest income and expense, divided by the average balance of interest-earning assets. The net interest margin is greater than the net interest spread due to the benefit of noninterest-bearing demand deposits.   [The remainder of this page intentionally left blank]   -25--26-     Distribution of Assets, Liabilities & Shareholders’ Equity and Yields, Rates & Interest Margin     For the Year Ended December 31, 2018     For the Year Ended December 31, 2021         Interest             Interest         Average   Income/   Yields/     Average   Income/   Yields/     Balance     Expense     Rates     Balance     Expense     Rates     ($ in thousands)     ($ in thousands)   Assets                 Investment securities:                 Taxable   $ 2,830,075     $ 65,330     2.31 %   $ 4,267,522     $ 106,329     2.49 % Tax-exempt (1)     747,522       24,610     3.29 %     312,946       10,677     3.41 % Total investments (1)   3,577,597     89,940     2.51 %   4,580,468     117,006     2.55 % Loans:                 Taxable   1,153,549     57,240     4.96 %   1,144,603     56,015     4.89 % Tax-exempt (1)     55,618       2,264     4.07 %     50,532       1,953     3.87 % Total loans (1)   1,209,167     59,504     4.92 %   1,195,135     57,968     4.85 % Total interest bearing cash     425,871       7,925     1.86 % Total interest-earning assets(1)   5,212,635     157,369     3.02 % Total interest-bearing cash     857,029       1,132     0.13 % Total Interest-earning assets (1)   6,632,632     176,106     2.65 % Other assets     407,983                 406,652             Total assets   $ 5,620,618               $ 7,039,284                 Liabilities and shareholders' equity                 Noninterest-bearing demand   $ 2,209,924     $ -     - %   $ 2,897,244     $ -     - % Savings and interest-bearing transaction   2,447,652     1,275     0.05 %   3,050,859     1,445     0.05 % Time less than $100,000   119,586     279     0.23 %   83,580     167     0.20 % Time $100,000 or more     94,919       368     0.39 %     69,165       265     0.38 % Total interest-bearing deposits   2,662,157     1,922     0.07 %   3,203,604     1,877     0.06 % Short-term borrowed funds     59,992       37     0.06 %     114,320       78     0.07 % Total interest-bearing liabilities   2,722,149     1,959     0.07 %   3,317,924     1,955     0.06 % Other liabilities   57,848               73,447             Shareholders' equity     630,697                 750,669             Total liabilities and shareholders' equity   $ 5,620,618               $ 7,039,284             Net interest spread (1) (2)             2.95 %             2.59 % Net interest and fee income and interest margin (1) (3)         $ 155,410     2.98 %         $ 174,151     2.62 %   (1) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate. (2) Net interest spread represents the average yield earned on interest-earning assets less the average rate incurred on interest-bearing liabilities. (3) (1) Amounts calculated on an FTE basis using the current statutory federal tax rate. (2) Net interest spread represents the average yield earned on interest-earning assets less the average rate incurred on interest-bearing liabilities. (3)Net interest margin is computed by calculating the difference between interest income and expense, divided by the average balance of interest-earning assets. The net interest margin is greater than the net interest spread due to the benefit of noninterest-bearing demand deposits.   [The remainder of this page intentionally left blank]   -26--27-     Summary of Changes in Interest Income and Expense due to Changes in Average Asset & Liability Balances and Yields Earned & Rates Paid   The following tables set forth a summary of the changes in interest income and interest expense due to changes in average assets and liability balances (volume) and changes in average interest yields/rates for the periods indicated. Changes not solely attributable to volume or yields/rates have been allocated in proportion to the respective volume and yield/rate components.   Summary of Changes in Interest Income and Expense        For the Year Ended December 31, 2020       Compared with       For the Year Ended December 31, 2019       Volume     Yield/Rate     Total       (In thousands)   Increase (decrease) in interest and loan fee income:                         Investment securities:                         Taxable   $ 15,128     $ 235     $ 15,363   Tax-exempt (1)     (5,031 )     503       (4,528 ) Total investments (1)     10,097       738       10,835   Loans:                         Taxable:                         PPP loans     6,516       -       6,516   Other     (3,687 )     (1,527 )     (5,214 ) Total taxable     2,829       (1,527 )     1,302   Tax-exempt (1)     (59 )     (38 )     (97 ) Total loans (1)     2,770       (1,565 )     1,205   Total interest-bearing cash     1,006       (6,834 )     (5,828 ) Total increase (decrease) in interest and loan fee income (1)     13,873       (7,661 )     6,212   Increase (decrease) in interest expense:                         Deposits:                         Savings and interest-bearing transaction     110       (126 )     (16 ) Time less than $100,000     (29 )     (32 )     (61 ) Time $100,000 or more     (27 )     20       (7 ) Total interest-bearing deposits     54       (138 )     (84 ) Short-term borrowed funds     19       -       19   Other borrowed funds     1       -       1   Total increase (decrease) in interest expense     74       (138 )     (64 ) Increase (decrease) in net interest and loan fee income (1)   $ 13,799     $ (7,523 )   $ 6,276       For the Year Ended December 31, 2023       Compared with       For the Year Ended December 31, 2022       Volume     Yield/Rate     Total       (In thousands)   Increase (decrease) in interest and loan fee income:                         Investment securities:                         Taxable   $ 2,562     $ 60,715     $ 63,277   Tax-exempt (1)     (1,807 )     85       (1,722 ) Total investments (1)     755       60,800       61,555   Loans:                         Taxable     (4,224 )     1,689       (2,535 ) Tax-exempt (1)     (92 )     54       (38 ) Total loans (1)     (4,316 )     1,743       (2,573 ) Total interest-bearing cash     (5,482 )     8,363       2,881   Total (decrease) increase in interest and loan fee income (1)     (9,043 )     70,906       61,863   (Decrease) increase in interest expense:                         Deposits:                         Savings and interest-bearing transaction     (155 )     2,095       1,940   Time less than $100,000     (21 )     45       24   Time $100,000 or more     (36 )     (4 )     (40 ) Total interest-bearing deposits     (212 )     2,136       1,924   Short-term borrowed funds     (14 )     55       41   Total (decrease) increase in interest expense     (226 )     2,191       1,965   (Decrease) increase in net interest and loan fee income (1)   $ (8,817 )   $ 68,715     $ 59,898     (1) Amounts calculated on an FTE basis using the current statutory federal tax rate.   [The remainder of this page intentionally left blank]   -27--28-     Summary of Changes in Interest Income and Expense        For the Year Ended December 31, 2019       Compared with       For the Year Ended December 31, 2018       Volume     Yield/Rate     Total       (In thousands)   Increase (decrease) in interest and loan fee income:                         Investment securities:                         Taxable   $ 5,979     $ 6,491     $ 12,470   Tax-exempt (1)     (4,341 )     (346 )     (4,687 ) Total investments (1)     1,638       6,145       7,783   Loans:                         Taxable     (2,049 )     1,359       (690 ) Tax-exempt (1)     (248 )     12       (236 ) Total loans (1)     (2,297 )     1,371       (926 ) Total interest bearing cash     (1,882 )     950       (932 ) Total (decrease) in interest and loan fee income (1)     (2,541 )     8,466       5,925   Increase (decrease) in interest expense:                         Deposits:                         Savings and interest-bearing transaction     (27 )     26       (1 ) Time less than $100,000     (38 )     13       (25 ) Time $100,000 or more     (62 )     20       (42 ) Total interest-bearing deposits     (127 )     59       (68 ) Short-term borrowed funds     (7 )     4       (3 ) Total (decrease) increase in interest expense     (134 )     63       (71 ) (Decrease) increase in net interest and loan fee income (1)   $ (2,407 )   $ 8,403     $ 5,996     (1) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.     For the Year Ended December 31, 2022       Compared with       For the Year Ended December 31, 2021       Volume     Yield/Rate     Total       (In thousands)   Increase (decrease) in interest and loan fee income:                         Investment securities:                         Taxable   $ 20,590     $ 31,546     $ 52,136   Tax-exempt (1)     (3,522 )     235       (3,287 ) Total investments (1)     17,068       31,781       48,849   Loans:                         Taxable     (21,464 )     13,723       (7,741 ) Tax-exempt (1)     (158 )     (14 )     (172 ) Total loans (1)     (21,622 )     13,709       (7,913 ) Total interest-bearing cash     (219 )     6,877       6,658   Total (decrease) increase in interest and loan fee income (1)     (4,773 )     52,367       47,594   Increase (decrease) in interest expense:                         Deposits:                         Savings and interest-bearing transaction     98       (33 )     65   Time less than $100,000     (13 )     26       13   Time $100,000 or more     (26 )     (83 )     (109 ) Total interest-bearing deposits     59       (90 )     (31 ) Short-term borrowed funds     (3 )     4       1   Total increase (decrease) in interest expense     56       (86 )     (30 ) (Decrease) increase in net interest and loan fee income (1)   $ (4,829 )   $ 52,453     $ 47,624                             (1) Amounts calculated on an FTE basis using the current statutory federal tax rate.                     Provision for Credit Losses   The Company manages credit costs by consistently enforcing conservative underwriting and administration procedures and aggressively pursuing collection efforts with debtors experiencing financial difficulties. The provision for credit losses reflects Management's assessment of credit risk in the loan portfolio and debt securities held to maturity during each of the periods presented.   The Company’s providedCompany recorded a $1.2 million reversal of provision for credit losses in 2023 which reflected a $2.2 million recovery in the first quarter 2023 on a previously charged off loan and a $400 thousand provision for credit losses in the third quarter of 2023, based on the results of the CECL model and Management’s estimate of credit losses over the remaining life of $4.3 million recordedits loans and debt securities held to maturity. The Company provided no provision for credit losses in 2020. The provision represents2022 and 2021 based on Management’s estimate of additional reserves needed over the remaining life of its loans due to credit-risk from weakened economic conditions caused by the COVID-19 pandemic. The Company provided no provision for loan losses in 2019 and 2018. Classified loans declined $3.8 million in 2019. Nonaccrual loans were $4 million at December 31, 2019 compared with $5 million at December 31, 2018. These factors were reflected in Management’s evaluation of credit quality, the level of the provision for loan losses in 2019, and the adequacy of the allowance for loan losses at December 31, 2019.investments. For further information regarding credit risk, net credit losses and the allowance for credit losses, see the “Loan Portfolio Credit Risk” and “Allowance for Credit Losses” sections of this Report.   [The remainder of this page intentionally left blank]     -28--29-     Noninterest Income   Components of Noninterest Income     For the Years Ended December 31,     For the Years Ended December 31,     2020     2019     2018     2023     2022     2021     (In thousands)     (In thousands)   Service charges on deposit accounts   $ 14,149     $ 17,882     $ 18,508     $ 14,169     $ 14,490     $ 13,697   Merchant processing services   10,208     10,132     9,630     11,280     11,623     11,998   Debit card fees   6,181     6,357     6,643     7,185     7,879     6,859   Trust fees   3,012     2,963     2,938     3,122     3,216     3,311   ATM processing fees   2,273     2,776     2,752     2,618     2,160     2,280   Other service fees   1,837     2,255     2,567     1,765     1,808     1,884   Financial services commissions   372     392     499     336     417     356   Gains on sales of real property   3,536     -     -   Life insurance gains   -     433     585     279     930     -   Securities gains (losses)   71     217     (52 ) Securities (losses) gains   (125 )   -     34   Other noninterest income     3,998       4,001       4,079       2,893       2,598       2,926   Total Noninterest Income   $ 45,637     $ 47,408     $ 48,149     $ 43,522     $ 45,121     $ 43,345     In 2020, noninterestNoninterest income in 2023 decreased $1.8$1.6 million compared with 20192022 primarily due to lower incomegains on life insurance and because debit card fees in 2022 included a $1.2 million reconciling payment from activity baseda payments network. Merchant processing service fees decreased in 2023 compared with 2022 primarily due to reduced economic activity related to the COVID-19 pandemic. Additionally, the results for 2019 included a life insurance gain of $433 thousand. The decrease was partially offset by $3.5 million in gains on sale of a closed branch building in 2020. In 2019, noninterest income decreased $741 thousand compared with 2018. Income from servicelower transaction volumes and increased lower-margin transactions. Service charges on deposit accounts decreased in 2023 compared with 2022 primarily due to lower overdraftfee income on analyzed deposit accounts, partially offset by fees generated from time deposits redeemed before maturity. ATM processing fee income increased in 2019. Other service charges decreased2023 compared with 2022 primarily due to lower income from internet banking. Debit card fees and financial services commissions decreased in 2019. Merchant processing services increased due to successful sales efforts and higher transaction volumes and partially offset the decrease involumes. Other noninterest income in 20192023 included higher recoveries of interest and fees on previously charged off loans compared 2022. Noninterest income in 2022 increased $1.8 million compared with 2018.2021 primarily due to a $1.2 million reconciling payment from a payments network, a $930 thousand life insurance gain and higher fee income on deposit accounts. Higher fee income on deposit accounts in 2022 compared with 2021 was primarily attributable to increased fee income from overdrawn deposit accounts. The increases in 2022 compared 2021 were partially offset by decreases in merchant processing service income and other noninterest income.   Noninterest Expense   Components of Noninterest Expense     For the Years Ended December 31,     For the Years Ended December 31,     2020     2019     2018     2023     2022     2021     (In thousands)     (In thousands)   Salaries and related benefits   $ 50,749     $ 51,054     $ 53,007     $ 47,871     $ 46,125     $ 48,011   Occupancy and equipment   19,637     20,240     19,679     20,520     19,884     19,139   Outsourced data processing services   9,426     9,471     9,229     9,846     9,684     9,601   Limited partnership operating losses   5,754     5,724     2,620   Professional fees   2,423     2,465     2,842     1,751     2,628     3,253   Courier service   2,001     1,878     1,779     2,652     2,614     2,177   Amortization of identifiable intangibles   287     538     1,921   Loss Contingency   -     553     3,500   Other noninterest expense     14,043       12,787       14,959       14,822       12,702       13,005   Total Noninterest Expense   $ 98,566     $ 98,986     $ 106,916     $ 103,216     $ 99,361     $ 97,806     In 2020,Noninterest expense in 2023 increased $3.9 million compared with 2022. Salaries and benefits increased in 2023 compared with 2022 due to increased staff, annual merit increases and higher group health insurance costs for the employees. Occupancy and equipment expenses increased in 2023 compared with 2022 primarily due to increases in repair and maintenance. Other noninterest expense decreased $420 thousandincreased in 2023 compared with 20192022 primarily due to higher FDIC insurance assessments for all insured depository institutions and losses on unauthorized transactions of customer debit and ATM cards. Professional fees decreased in 2023 compared with 2022 primarily due to lower salaries, occupancylegal fees. Noninterest expense in 2022 increased $1.6 million compared with 2021. Limited partnership operating losses increased $3.1 million due to higher estimated operating losses on limited partnership investments in low-income housing. Occupancy and equipment expenses, and lower amortization of intangible assets, and because the results for 2019 included $553 thousand of loss contingency.expense in 2022 increased primarily due to computer software upgrades. The decreaseincrease in 2022 compared with 2021 was partially offset by higher FDIC assessments (includeda decrease in “other noninterest expense”) in 2020 because FDIC assessments in 2019 were reduced by application of the Bank’s FDIC assessment credit described in Part 1, Item 1, “Premiums for Deposit Insurance”. In 2019, noninterest expense decreased $7.9 million compared with 2018 primarily due to decreases in loss contingencies, salaries and related benefits FDIC insurance assessments, and intangible amortization. The 2019 loss contingencies include a $301 thousand increaseresulting from attrition. Professional fees decreased in estimated customer refunds of revenue recognized prior to 2018 and a $252 thousand settlement to dismiss a lawsuit. Although loss contingencies represent estimated liabilities, which are subject to revision, the Company does not anticipate additional losses for either of these matters. Salaries and related benefits decreased $1.9 million primarily2022 compared with 2021 due to employee attrition and lower incentives and employee benefit costs. Amortization of intangibles decreased $1.4 million as assets are amortized on a declining balance method. FDIC insurance assessments (included in “other noninterest expense”) decreased primarily due to application of the Bank’s assessment credit described in Part 1, Item 1, “Premiums for Deposit Insurance”.legal fees.   -29--30-     Provision for Income Tax   The Company’s income tax provision (FTE) was $30.0$61.4 million in 20202023 compared with $29.4$45.5 million in 20192022 and $25.1$33.2 million in 2018.2021. The 2023 income tax provision included a $492 thousand increase to reconcile the 2022 income tax provision to the filed 2022 tax returns. The effective tax rates (FTE) were 27.5% in 2023 compared with 27.2% in 2020 compared with 26.8%2022 and 27.7% in 2019 and 26.0% in 2018. The higher effective tax rate (FTE) in 2020 compared with 2019 and 2018 is due2021. See Note 10 to lower levels of tax-exempt interest income and stock compensation tax deductions in 2020. The tax provisions (FTE)the consolidated financial statements for 2020, 2019 and 2018 include tax benefits of $87 thousand, $435 thousand and $737 thousand, respectively, for tax deductions from the exercise of employee stock options which exceed related compensation expenses recognized in the financial statements. In 2019, the Company decreased unrecognized tax benefits by $909 thousandadditional information related to settlements with taxing authorities. The settlements incorporated amended tax returns for which the Company had recognized a deferred tax asset in the amount of $1,003 thousand.income taxes.   Investment Securities Portfolio   The Company maintains an investment securities portfolio consisting of securities issued by U.S. Government sponsored entities, agency and non-agency mortgage backed securities, state and political subdivisions, corporations, collateralized loan obligations commercial paper and otheragency mortgage-backed securities. The Company had no marketable equity securities at December 31, 2023 and December 31, 2022.   Management managedmanages the investment securities portfolio in response to anticipated changes in interest rates, and changes in deposit and loan volumes. The carrying value of the Company’s investment securities portfolio was $4.6$4.9 billion at December 31, 20202023 and $3.8$5.2 billion at December 31, 2019.2022. The following table indicates the carrying values of investmentlists debt securities in the Company’s portfolio by type as of the indicated dates. The Company adopted ASU 2016-13 effective January 1, 2020.dates indicated. Debt securities held to maturity of $515,598 thousandare listed at December 31, 2020, is amortized cost before related reserve for expected credit losses of $9 thousand.$1 thousand at December 31, 2023 and December 31, 2022. Debt securities available for sale are listed at fair value.     At December 31, 2020     At December 31, 2019     At December 31, 2023     At December 31, 2022     Carrying Value     As a percent of total investment securities     Carrying Value     As a percent of total investment securities     Carrying Value     As a percent of total investment securities     Carrying Value     As a percent of total investment securities     ($ in thousands)     ($ in thousands)   Agency mortgage-backed securities   $ 893,284     20 %   $ 1,297,395     34 % Securities of U.S. Government sponsored entities   $ 294,919     6 %   $ 290,853     6 % Agency residential mortgage-backed securities ("MBS")   318,019     7 %   390,900     7 % Obligations of states and political subdivisions   384,932     8 %   544,920     14 %   142,465     3 %   171,212     3 % Corporate securities   2,117,978     46 %   1,833,783     48 %   2,638,198     54 %   2,821,809     54 % Commercial paper   24,990     1 %   -     - % Collateralized loan obligations   1,156,101     25 %   6,755     - %     1,484,597       30 %     1,572,883       30 % U.S. Treasury securities and securities of U.S. Government sponsored entities   -     - %   131,167     4 % Other     1,498       - %     2,898       - % Total   $ 4,578,783       100 %   $ 3,816,918       100 %   $ 4,878,198       100 %   $ 5,247,657       100 %     Debt securities available for sale   $ 4,063,185           $ 3,078,846           $ 3,999,801           $ 4,331,743         Debt securities held to maturity     515,598             738,072             878,397             915,914         Total   $ 4,578,783           $ 3,816,918           $ 4,878,198           $ 5,247,657           Management continually evaluates the Company’s investment securities portfolio in response to established asset/liability management objectives, changing market conditions that could affect profitability, liquidity, and the level of interest rate risk to which the Company is exposed. These evaluations may cause Management to change the level of funds the Company deploys into investment securities and change the composition of the Company’s investment securities portfolio.   At December 31, 2020,2023, substantially all of the Company’s investment securities continue to bewere investment grade as rated by one or more major rating agencies.agency. In addition to monitoring credit rating agency evaluations, Management performs its own evaluations regarding the credit worthiness of the issuer or the securitized assets underlying asset-backed securities. The Company’s procedures for evaluating investments in securities are in accordance with guidance issued by the Board of Governors of the Federal Reserve System, “Investing in Securities without Reliance on Nationally Recognized Statistical Rating Agencies” (SR 12-15) and other regulatory guidance. There have been no significant differences in the Company’s internal analyses compared with the ratings assigned by the third party credit rating agencies.   -30--31-   The Company had no marketable equity securities at December 31, 2020 and December 31, 2019. All of the marketable equity securities were sold with no gains or losses from the sale during the third quarter 2019. The market value of the marketable equity securities was $1,747 thousand at December 31, 2018. The Company recognized gross unrealized holding gains of $50 thousand in earnings in 2019.   The following table shows the fair value carrying amount of the Company’s equity securities and debt securities available for sale as of the dates indicated:       At December 31,       2020     2019     2018       (In thousands)   Equity securities:                         Mutual funds   $ -     $ -     $ 1,747   Total equity securities     -       -       1,747   Debt securities available for sale:                         U.S. Treasury securities     -       20,000       139,574   Securities of U.S. Government sponsored entities     -       111,167       164,018   Agency residential mortgage-backed securities (MBS)     652,952       939,750       853,871   Non-agency residential MBS     -       -       114   Agency commercial MBS     -       3,708       1,842   Securities of U.S. Government entities     154       544       1,119   Obligations of states and political subdivisions     111,010       163,139       179,091   Corporate securities     2,117,978       1,833,783       1,315,041   Commercial paper     24,990       -       -   Collateralized Loan Obligations     1,156,101       6,755       -   Total debt securities available for sale     4,063,185       3,078,846       2,654,670   Total   $ 4,063,185     $ 3,078,846     $ 2,656,417   [The remainder of this page intentionally left blank] -31-     At December 31,       2023     2022     2021       (In thousands)   Debt securities available for sale:                         Securities of U.S. Government sponsored entities   $ 294,919     $ 290,853     $ -   Agency residential MBS     239,454       286,048       411,726   Securities of U.S. Government entities     -       -       119   Obligations of states and political subdivisions     71,283       82,004       93,920   Corporate securities     1,909,548       2,099,955       2,746,735   Collateralized loan obligations     1,484,597       1,572,883       1,386,355   Total debt securities available for sale   $ 3,999,801     $ 4,331,743     $ 4,638,855     The following table sets forth the relative maturities and contractual yields of the Company’s debt securities available for sale (stated at fair value) at December 31, 2020.2023. Yields on state and political subdivision securities have been calculated on a fully taxable equivalent basis using the current federal statutory rate. Mortgage-backedCollateralized loan obligations and mortgage-backed securities are shown separately because they are typically paid in quarterly and monthly installments, respectively, over a number of years.   Debt Securities Available for Sale Maturity Distribution      At December 31, 2020     At December 31, 2023     Within one year     After one but within five years     After five but within ten years     After ten years     Mortgage- backed     Total     Within one year     After one but within five years     After five but within ten years     CLO and Mortgage- backed     Total     ($ in thousands)     ($ in thousands)   Securities of U.S. Government entities   $ -     $ 154     $ -     $ -     $ -     $ 154   Securities of U.S. Government sponsored entities   $ -     $ 16,654     $ 278,265     $ -     $ 294,919   Interest rate   - %   2.60 %   - %   - %   - %   2.60 %   - %   4.12 %   3.48 %   - %   3.60 % Obligations of states and political subdivisions   6,349     43,784     35,740     25,137     -     111,010     7,244     28,602     35,437     -     71,283   Interest rate   3.23 %   3.91 %   2.97 %   3.00 %   - %   3.38 %   2.92 %   3.12 %   2.99 %   - %   3.04 % Corporate securities   182,376     930,500     1,005,102     -     -     2,117,978     45,113     675,923     1,188,512     -     1,909,548   Interest rate   2.96 %   3.96 %   3.07 %   - %   - %   3.45 %     4.02 %     3.26 %     2.49 %     - %     2.76 % Commercial paper   24,990     -     -     -     -     24,990   Subtotal   52,357     721,179     1,502,214     -     2,275,750   Interest rate   0.47 %   - %   - %   - %   - %   0.47 %   3.87 %   3.27 %   2.69 %   - %   2.88 % Collaterized loan obligations   -     -     810,342     345,759     -     1,156,101   Interest rate     - %     - %     1.76 %     1.86 %     - %     1.76 % Subtotal   213,715     974,438     1,851,184     370,896     -     3,410,233   Collaterized loan obligations (CLO)   -     -     -     1,484,597     1,484,597   Interest rate   2.67 %   3.96 %   2.49 %   1.94 %   - %   2.85 %   - %   - %   - %   7.28 %   7.28 % MBS   -     -     -     -     652,952     652,952     -     -     -     239,454     239,454   Interest rate     - %     - %     - %     - %     1.47 %     1.47 %     - %     - %     - %     2.45 %     2.45 % Total   $ 213,715     $ 974,438     $ 1,851,184     $ 370,896     $ 652,952     $ 4,063,185     $ 52,357     $ 721,179     $ 1,502,214     $ 1,724,051     $ 3,999,801   Interest rate   2.67 %   3.96 %   2.49 %   1.94 %   1.47 %   2.82 %   3.87 %   3.27 %   2.69 %   6.60 %   4.40 %   The following table shows the amortized cost carrying amount and fair value before related reserve for expected credit losses of $1 thousand at December 31, 2023 and December 31, 2022, and $7 thousand at December 31, 2021, of the Company’s debt securities held to maturity as of the dates indicated:     At December 31,     At December 31,     2020     2019     2018     2023     2022     2021     (In thousands)     (In thousands)   Agency residential MBS   $ 240,332     $ 353,937     $ 447,332     $ 78,565     $ 104,852     $ 148,390   Non-agency residential MBS   1,344     2,354     3,387   Obligations of states and political subdivisions     273,922       381,781       533,890     71,182     89,208     158,013   Corporate securities     728,650       721,854       -   Total   $ 515,598     $ 738,072     $ 984,609     $ 878,397     $ 915,914     $ 306,403   Fair value   $ 529,687     $ 744,296     $ 971,445     $ 849,562     $ 873,511     $ 312,562   -32-   The following table sets forth the relative maturities and contractual yields of the Company’s debt securities held to maturity at December 31, 2020.2023. Yields on state and political subdivision securities have been calculated on a fully taxable equivalent basis using the current federal statutory rate. Mortgage-backed securities are shown separately because they are typically paid in monthly installments over a number of years.                 Debt Securities Held to Maturity Maturity Distribution      At December 31, 2020     At December 31, 2023     Within one year     After one but within five years     After five but within ten years     After ten years     Mortgage- backed     Total     Within one year     After one but within five years     After five but within ten years     After ten years     Mortgage- backed     Total     ($ in thousands)     ($ in thousands)   Obligations of states and political subdivisions   $ 54,526     $ 129,786     $ 89,610     $ -     $ -     $ 273,922     $ 15,117     $ 55,359     $ 706     $ -     $ -     $ 71,182   Interest rate   2.36 %   3.37 %   3.52 %   - %   - %   3.20 %   3.57 %   3.51 %   4.08 %   - %   - %   3.54 % Corporate securities   -     257,488     471,162     -     -     728,650   Interest rate     - %     4.17 %     4.32 %     - %     - %     4.29 % Subtotal   15,117     312,847     471,868     -     -     799,832   Interest rate   3.57 %   4.05 %   4.32 %   - %   - %   4.22 % MBS   -     -     -     -     241,676     241,676     -     -     -     -     78,565     78,565   Interest rate     - %     - %     - %     - %     1.46 %     1.46 %     - %     - %     - %     - %     2.25 %     2.25 % Total   $ 54,526     $ 129,786     $ 89,610     $ -     $ 241,676     $ 515,598     $ 15,117     $ 312,847     $ 471,868     $ -     $ 78,565     $ 878,397   Interest rate   2.36 %   3.37 %   3.52 %   - %   1.46 %   2.38 %   3.57 %   4.05 %   4.32 %   - %   2.25 %   4.04 %   -32- The Company had corporate securities as shown below at the dates indicated:     Corporate securities       At December 31, 2023     At December 31, 2022       Amortized     Fair     Amortized     Fair       Cost     Value     Cost     Value       (In thousands)   Debt securities available for sale   $ 2,129,103     $ 1,909,548     $ 2,406,566     $ 2,099,955   Debt securities held to maturity     728,650       705,356       721,854       687,406   Total corporate securities   $ 2,857,753     $ 2,614,904     $ 3,128,420     $ 2,787,361     The following table summarizes total corporate securities by credit rating:     At December 31, 2020     At December 31, 2019     At December 31, 2023     At December 31, 2022     Market value     As a percent of total corporate securities     Market value     As a percent of total corporate securities     Fair value     As a percent of total corporate securities     Fair value     As a percent of total corporate securities     ($ in thousands)     ($ in thousands)   AAA   $ 21,905     1 %   $ 26,148     1 %   $ -     - %   $ 20,667     1 % AA+   20,979     1 %   45,697     2 %   -     - %   19,840     1 % AA   41,232     2 %   19,776     1 %   -     - %   19,234     1 % AA-   46,969     2 %   46,099     3 %   73,016     3 %   110,552     4 % A+   153,917     7 %   179,217     10 %   250,322     9 %   255,381     9 % A   374,155     18 %   439,017     24 %   380,257     14 %   503,437     18 % A-   385,642     18 %   351,909     19 %   825,882     32 %   695,865     25 % BBB+   489,677     23 %   384,788     21 %   723,767     28 %   821,102     29 % BBB   486,108     23 %   314,868     17 %   361,660     14 %   304,957     11 % BBB-     82,431       4 %     11,737       1 %     -       - %     36,326       1 % Investment grade   2,103,015     99 %   1,819,256     99 % Below investment grade     14,963       1 %     14,527       1 % Total Corporate securities   $ 2,117,978       100 %   $ 1,833,783       100 % Total corporate securities   $ 2,614,904       100 %   $ 2,787,361       100 %   [The Company’s $14.96 million corporate bond rated BB- at December 31, 2020 and $14.53 million corporate bond rated BB at December 31, 2019, represents a bondremainder of one pharmaceutical company which develops, manufactures and markets generic and branded human pharmaceuticals, as well as active pharmaceutical ingredients, to customers worldwide. The bond matures in July 2021.this page intentionally left blank] -33-   The following table summarizes total corporate securities by the industry sector in which the issuing companies operate:     At December 31, 2020     At December 31, 2019     At December 31, 2023     At December 31, 2022     Market value     As a percent of total corporate securities     Market value     As a percent of total corporate securities     Fair value     As a percent of total corporate securities     Fair value     As a percent of total corporate securities     ($ in thousands)     ($ in thousands)   Financial   $ 938,222     44 %   $ 772,852     42 %   $ 1,516,147     58 %   $ 1,539,361     55 % Utilities   274,929     10 %   285,016     10 % Industrial   188,803     9 %   177,051     10 %   215,428     8 %   237,554     9 % Utilities   185,486     9 %   222,951     12 % Consumer, Non-cyclical   184,069     9 %   185,784     10 %   170,423     7 %   173,736     6 % Communications   173,483     8 %   128,635     7 %   158,495     6 %   162,270     6 % Technology   130,725     6 %   107,632     6 % Basic Materials   120,811     6 %   76,434     4 %   100,693     4 %   98,072     3 % Energy   103,049     5 %   86,883     5 %   69,331     3 %   86,431     3 % Technology   63,185     2 %   101,255     4 % Consumer, Cyclical     93,330       4 %     75,561       4 %     46,273       2 %     103,666       4 % Total Corporate securities   $ 2,117,978       100 %   $ 1,833,783       100 % Total corporate securities   $ 2,614,904       100 %   $ 2,787,361       100 %   [The remainderfollowing table summarizes total corporate securities by the location of this page intentionally left blank]the issuers’ headquarters; all the bonds are denominated in United States dollars:       At December 31, 2023     At December 31, 2022       Fair value     As a percent of total corporate securities     Fair value     As a percent of total corporate securities       ($ in thousands)   United States of America   $ 1,811,463       69 %   $ 1,997,328       72 % Canada     195,979       7 %     192,475       7 % Japan     164,948       6 %     161,804       6 % United Kingdom     162,794       6 %     171,819       6 % Switzerland     93,898       4 %     86,396       3 % France     91,726       4 %     87,781       3 % Netherlands     35,381       1 %     33,216       1 % Australia     24,800       1 %     23,870       1 % Belgium     20,894       1 %     20,243       1 % Germany     13,021       1 %     12,429       - % Total corporate securities   $ 2,614,904       100 %   $ 2,787,361       100 %   The following table summarizes the above corporate securities with issuer’s headquarters located outside of the United States of America by the industry sector in which the issuing companies operate; all the bonds are denominated in United States dollars:       At December 31, 2023     At December 31, 2022       Fair value     As a percent of total foreign corporate securities     Fair value     As a percent of total foreign corporate securities       ($ in thousands)   Financial   $ 702,892       87 %   $ 680,956       86 % Energy     31,970       4 %     30,600       4 % Basic materials     24,800       3 %     23,870       3 % Consumer, Non-cyclical     20,895       3 %     32,684       4 % Consumer, Cyclical     13,021       2 %     12,429       2 % Utilities     9,863       1 %     9,494       1 % Total foreign corporate securities   $ 803,441       100 %   $ 790,033       100 %   -33--34-     The following table summarizes total consumer, cyclical by sub-sector:     At December 31, 2020       Market value       ($ in thousands)   Hotels   $ -   Restaurants     21,127   Department Stores     -   Casinos     -   Airlines     -   Other     72,203   Total Consumer, Cyclical   $ 93,330   The Company’s $21.1 million in corporate bonds to issuers operating in the consumer cyclical – restaurant subsector represent bonds of one company which retails, roasts and provides its own brand of specialty coffee and other complementary products through retail locations worldwide and sells coffee through several distribution channels. The bonds mature in 2023. At December 31, 2020, the bonds were rated BBB and priced with an unrealized gain of $1.1 million.     At December 31, 2020       Amortized     Fair       Cost     Value       (In thousands)                     Energy   $ 95,646     $ 103,049   Industrial     179,459       188,803   Total   $ 275,105     $ 291,852   The $103.0 million (fair value) in corporate bonds in the energy sector are issued by 4 issuers at December 31, 2020. The $188.8 million (fair value) in corporate bonds in the industrial sector are issued by 10 issuers at December 31, 2020. The Company’s $1.2$1.5 billion (fair value) in collateralized loan obligations at December 31, 2020, include2023, consist of investments in 141142 issues that are within the senior tranches of their respective fund securitization structures. All of the Company’sThe following table summarizes total collateralized loan obligation investments are rated AAA or AAobligations by credit rating:     At December 31, 2023       Amortized     Fair       Cost     Value       (In thousands)   AAA   $ 536,185     $ 532,729   AA     965,063       951,868   Total   $ 1,501,248     $ 1,484,597   The Company’s $1.6 billion (fair value) in collateralized loan obligations at December 31, 2020. 2022, consist of investments in 169 issues that are within the senior tranches of their respective fund securitization structures. The following table summarizes total collateralized loan obligations by credit rating:   [The remainder of this page intentionally left blank] -34-     At December 31, 2022       Amortized     Fair       Cost     Value       (In thousands)   AAA   $ 559,239     $ 553,673   AA     1,028,087       1,019,210   Total   $ 1,587,326     $ 1,572,883     The following tables summarize the total general obligation and revenue bonds issued by states and political subdivisions held in the Company’s investment securities portfolios as of the dates indicated, identifying the state in which the issuing government municipality or agency operates.     At December 31, 2020,2023, the Company’s investment securities portfolios included securities issued by 317123 state and local government municipalities and agencies located within 4031 states. The largest exposure to any one municipality or agency was $8.2$4.8 million (fair value) represented by sixtwo general obligation bonds.       At December 31, 2020       Amortized     Fair       Cost     Value       (In thousands)   Obligations of states and political subdivisions:                 General obligation bonds:                 California   $ 67,386     $ 70,075   Texas   $ 20,644     $ 21,283   New Jersey     17,403       17,629   Washington     16,226       17,000   Other (32 states)     159,019       164,764   Total general obligation bonds   $ 280,678     $ 290,751                     Revenue bonds:                 California   $ 17,587     $ 18,054   Kentucky     10,822       11,210   Indiana     9,350       9,565   Virginia     7,604       8,019   Colorado     6,302       6,519   Washington     6,225       6,358   Maryland     5,972       6,043   Other (19 states)     35,061       35,656   Total revenue bonds   $ 98,923     $ 101,424   Total obligations of states and political subdivisions   $ 379,601     $ 392,175   [The remainder of this page intentionally left blank]     At December 31, 2023       Amortized     Fair       Cost     Value       (In thousands)   Obligations of states and political subdivisions:                 General obligation bonds:                 California   $ 23,713     $ 23,562   Washington     10,999       10,937   Texas     8,129       8,016   Massachusetts     7,883       7,826   Michigan     7,047       6,961   Other (22 states)     56,020       55,067   Total general obligation bonds   $ 113,791     $ 112,369                     Revenue bonds:                 California   $ 9,947     $ 9,777   Kentucky     5,054       5,039   Virginia     3,651       3,614   Colorado     3,157       3,150   Other (8 states)     8,261       8,228   Total revenue bonds   $ 30,070     $ 29,808   Total obligations of states and political subdivisions   $ 143,861     $ 142,177     -35-     At December 31, 2019,2022, the Company’s investment securities portfolios included securities issued by 451142 state and local government municipalities and agencies located within 4232 states. The largest exposure to any one municipality or agency was $9.0$4.8 million (fair value) represented by onethree general obligation bond.bonds.     At December 31, 2019     At December 31, 2022     Amortized   Fair     Amortized   Fair     Cost     Value     Cost     Value     (In thousands)     (In thousands)   Obligations of states and political subdivisions:             General obligation bonds:             California   $ 83,984     $ 86,527     $ 34,621     $ 34,252   Washington   11,445     11,332   Texas   36,396     36,815     8,561     8,405   New Jersey   29,347     29,688   Washington   23,862     24,516   Minnesota   20,624     20,871   Other (33 states)     189,286       193,302   Massachusetts   8,214     8,073   Michigan   7,126     7,017   Other (23 states)     63,818       62,679   Total general obligation bonds   $ 383,499     $ 391,719     $ 133,785     $ 131,758       Revenue bonds:             California   $ 31,829     $ 32,278     $ 13,917     $ 13,620   Kentucky   16,384     16,680     7,605     7,556   Virginia   3,684     3,618   Colorado   12,176     12,479     3,155     3,124   Washington   11,208     11,509     2,070     2,068   Indiana   9,935     10,145   Virginia   8,027     8,328   Arizona   7,912     8,106   Other (25 states)     60,338       61,347   Other (8 states)     9,016       9,003   Total revenue bonds   $ 157,809     $ 160,872     $ 39,447     $ 38,989   Total obligations of states and political subdivisions   $ 541,308     $ 552,591     $ 173,232     $ 170,747     At December 31, 20202023 and December 31, 2019,2022, the revenue bonds in the Company’s investment securities portfolios were issued by state and local government municipalities and agencies to fund public services such as water utility, sewer utility, recreational and school facilities, and general public and economic improvements. The revenue bonds were payable from 1911 revenue sources at December 31, 20202023 and 20 revenue sources at December 31, 2019.2022. The revenue sources that represent 5% or more individually of the total revenue bonds are summarized in the following tables.       At December 31, 2020       Amortized     Fair       Cost     Value       (In thousands)   Revenue bonds by revenue source:                 Water   $ 22,731     $ 23,095   Sewer     12,447       12,989   Sales tax     10,738       11,013   Lease (renewal)     9,209       9,545   Lease (abatement)     8,483       8,674   Other (14 sources)     35,315       36,108   Total revenue bonds by revenue source   $ 98,923     $ 101,424       At December 31, 2023       Amortized     Fair       Cost     Value       (In thousands)   Revenue bonds by revenue source:                 Sewer   $ 4,840     $ 4,828   Lease (appropriation)     4,553       4,544   Water     4,028       4,025   Special Assessment     3,695       3,516   Lease (renewal)     2,865       2,844   Lease (abatement)     2,389       2,386   Appropriations     1,984       1,954   Lease (non-terminable)     1,930       1,926   Other (3 sources)     3,786       3,785   Total revenue bonds by revenue source   $ 30,070     $ 29,808     [The remainder of this page intentionally left blank]   -36-       At December 31, 2019     At December 31, 2022     Amortized   Fair     Amortized   Fair     Cost     Value     Cost     Value     (In thousands)     (In thousands)   Revenue bonds by revenue source:             Water   $ 36,960     $ 37,699     $ 6,105     $ 6,115   Lease (renewal)   5,590     5,536   Sewer   19,039     19,545     5,523     5,480   Lease (appropriation)   4,556     4,518   Special Assessment   4,080     3,788   Lease (abatement)   3,702     3,694   Sales tax   15,695     16,101     3,185     3,187   Lease (renewal)   15,230     15,539   Lease (abatement)   10,913     11,160   Other (15 sources)     59,972       60,828   Other (4 sources)     6,706       6,671   Total revenue bonds by revenue source   $ 157,809     $ 160,872     $ 39,447     $ 38,989     See Note 2 to the consolidated financial statements for additional information related to the investment securities.   Loan Portfolio                  The Company originates loans with the intent to hold such assets until principal is repaid. Management follows written loan underwriting policies and procedures which are approved by the Bank’s Board of Directors. Loans are underwritten following approved underwriting standards and lending authorities within a formalized organizational structure. The Board of Directors also approves independent real estate appraisers to be used in obtaining estimated values for real property serving as loan collateral. Prevailing economic trends and conditions are also taken into consideration in loan underwriting practices.   All loan applications must be for clearly defined legitimate purposes with a determinable primary source of repayment, and as appropriate, secondary sources of repayment. All loans are supported by appropriate documentation such as current financial statements, tax returns, credit reports, collateral information, guarantor asset verification, title reports, appraisals, and other relevant documentation.   TheDuring 2020 and the first six months of 2021, the Bank processed customer PPPPayment Protection Program (“PPP”) loan applications as established by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The United States Small Business Administration guarantees PPP loans; given this guarantee, the PPP loans are not considered to have default risk. The Company funded $249 million PPP loans in the second quarter 2020. PPP loans, net of deferred fees and costs, were $187$586 thousand at December 31, 2022 and $46 million at December 31, 2020.2021.   Commercial loans represent term loans used to acquire durable business assets or revolving lines of credit used to finance working capital. Underwriting practices evaluate each borrower’s cash flow as the principal source of loan repayment. Commercial loans are generally secured by the borrower’s business assets as a secondary source of repayment. Commercial loans are evaluated for credit-worthiness based on prior loan performance and borrower financial information including cash flow, borrower net worth and aggregate debt. PPP loans are included in commercial loans.   Commercial real estate loans represent term loans used to acquire or refinance real estate to be operated by the borrower in a commercial capacity. Underwriting practices evaluate each borrower’s global cash flow as the principal source of loan repayment, independent appraisal of value of the property, and other relevant factors. Commercial real estate loans are generally secured by a first lien on the property as a secondary source of repayment.   Real estate construction loans represent the financing of real estate development. Loan principal disbursements are controlled through the use of project budgets, and disbursements are approved based on construction progress, which is validated by project site inspections. A first lien on the real estate serves as collateral to secure the loan.   Residential real estate loans generally represent first lien mortgages used by the borrower to purchase or refinance a principal residence. For interest-rate risk purposes, the Company offers only fully-amortizing, adjustable-rate mortgages. In underwriting first lien mortgages, the Company evaluates each borrower’s ability to repay the loan, an independent appraisal of the value of the property, and other relevant factors. The Company does not offer riskier mortgage products, such as non-amortizing “interest-only” mortgages and “negative amortization” mortgages.   For loans secured by real estate, the Bank requires title insurance to insure the status of its lien and each borrower is obligated to insure the real estate collateral, naming the Company as loss payee, in an amount sufficient to repay the principal amount outstanding in the event of a property casualty loss.   -37- Consumer installment and other loans are predominantly comprised of indirect automobile loans with underwriting based on credit history and scores, personal income, debt service capacity, and collateral values.   -37- Excluding PPP, loanLoan volumes have declined due to payoffs and problem loan workout activities, particularly with purchased loans, and reduced volumes of loan originations. The Company did not take an aggressive posture relative to loan portfolio growth during the post-recession period of historically low interest rates. Management increased investment securities as loan volumes declined.   The following table shows the composition of the loan portfolio of the Company by type of loan and type of borrower, on the dates indicated:   Loan Portfolio     At December 31,     At December 31,     2020     2019     2018     2017     2016     2023     2022     2021     2020     2019     (In thousands)     (In thousands)   PPP loans   $ 186,945     $ -     $ -     $ -     $ -   Other     207,861       222,085       275,080       335,996       354,697   Total commercial   394,806     222,085     275,080     335,996     354,697   Commercial   $ 136,550     $ 169,617     $ 233,090     $ 394,806     $ 222,085   Commercial real estate   564,300     578,758     580,480     568,584     542,171     487,523     491,107     535,261     564,300     578,758   Construction   129     1,618     3,982     5,649     2,555     5,063     3,088     48     129     1,618   Residential real estate   23,471     32,748     44,866     65,183     87,724     9,935     13,834     18,133     23,471     32,748   Consumer installment and other     273,537       291,455       302,794       312,570       365,564       227,531       280,842       281,594       273,537       291,455   Total loans     1,256,243       1,126,664       1,207,202       1,287,982       1,352,711     $ 866,602     $ 958,488     $ 1,068,126     $ 1,256,243     $ 1,126,664     The following table shows the maturity distribution and interest rate sensitivity of commercial, commercial real estate, and construction loans at December 31, 2020. Balances exclude residential real estate2023. There were no loans and consumer installment and other loans totaling $297.0 million. These typeswith a remaining maturity of loans are typically paid in monthly installments over a numberfifteen years as of years.December 31, 2023.   Loan Maturity Distribution     At December 31, 2020     At December 31, 2023     Within One Year     One to Five Years     After Five Years     Total     Within One Year     One to Five Years     Five to Fifteen Years     Total     (In thousands)     (In thousands)   Commercial and Commercial real estate   $ 213,817     $ 237,597     $ 507,692     $ 959,106   Commercial   $ 42,122     $ 65,815     $ 28,613     $ 136,550   Commercial real estate   99,789     229,763     157,971     487,523   Construction     129       -       -       129     5,063     -     -     5,063   Residential real estate   3,202     4,109     2,624     9,935   Consumer and other installment     67,778       152,413       7,340       227,531   Total   $ 213,946     $ 237,597     $ 507,692     $ 959,235     $ 217,954     $ 452,100     $ 196,548     $ 866,602   Loans with fixed interest rates   $ 187,462     $ 137,419     $ 36,859     $ 361,740     138,085     209,073     7,160     354,318   Loans with floating or adjustable interest rates     26,484       100,178       470,833       597,495       79,869       243,027       189,388       512,284   Total   $ 213,946     $ 237,597     $ 507,692     $ 959,235     $ 217,954     $ 452,100     $ 196,548     $ 866,602     Commitments and Letters of Credit   The Company issues formal commitments on lines of credit to well-established and financially responsible commercial enterprises. Such commitments can be either secured or unsecured and are typically in the form of revolving lines of credit for seasonal working capital needs. Occasionally, such commitments are in the form of letters of credit to facilitate the customers’ particular business transactions. Commitment fees are generally charged for commitments and letters of credit. Commitments on lines of credit and letters of credit typically mature within one year. For further information, see the accompanying notes to the consolidated financial statements.   [The remainder of this page intentionally left blank] -38- Loan Portfolio Credit Risk   The Company extends loans to commercial and consumer customers which expose the Company to the risk that the borrowers will default, causing loan losses.loss. The Company’s lending activities are exposed to various qualitative risks. All loan segments are exposed to risks inherent in the economy and market conditions. Significant risk characteristics related to the commercial loan segment include the borrowers’ business performance and financial condition, and the value of collateral for secured loans. Significant risk characteristics related to the commercial real estate segment include the borrowers’ business performance and the value of properties collateralizing the loans. Significant risk characteristics related to the construction loan segment include the borrowers’ performance in successfully developing the real estate into the intended purpose and the value of the property collateralizing the loans. Significant risk characteristics related to the residential real estate segment include the borrowers’ financial wherewithal to service the mortgages and the value of the property collateralizing the loans. Significant risk characteristics related to the consumer loan segment include the financial condition of the borrowers and the value of collateral securing the loans.   -38- The Bank processed customer PPP loan applications as established by the CARES Act. The United States Small Business Administration guarantees PPP loans; given this guarantee, the PPP loans are not considered to have default risk. The Company funded $249 million PPP loans in the second quarter 2020. PPP loans, net of deferred fees and costs, were $187 million at December 31, 2020. On April 7, 2020, the U.S. banking agencies issued an Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (Revised). The statement describes accounting for COVID-19-related loan modifications, including clarifying the interaction between current accounting rules and the temporary relief provided by the CARES Act. The Bank has been actively working with consumer and commercial borrowers requesting deferral of loan payments, granting deferrals of principal and interest payments for 90 days. At December 31, 2020, consumer loans granted loan deferrals totaled $2.5 million, commercial real estate loans with deferred payments totaled $7.8 million, primarily for hospitality and retail properties, and five commercial loans with deferred payments totaled $33 thousand. The preparation of the financial statements requires Management to estimate the amount of expected losses in the loan portfolio and establish an allowance for credit losses. The allowance for credit losses is maintained by assessing or reversing a provision for credit losses through the Company’s earnings. In estimating credit losses, Management must exercise judgment in evaluating information deemed relevant, such as financial information regarding individual borrowers, overall loan loss experience, the amount of past due, nonperforming and classified loans, recommendations of regulatory authorities, prevailing economic conditions and other information. The amount of ultimate losses on the loan portfolio can vary from the estimated amounts. Management follows a systematic methodology to estimate loss potential in an effort to reduce the differences between estimated and actual losses. The Company closely monitors the markets in which it conducts its lending operations and follows a strategy to control exposure to loans with high credit risk. The Bank’s organizationorganizational structure separates the functions of business development and loan underwriting; Management believes this segregation of duties avoids inherent conflicts of combining business development and loan approval functions. In measuring and managing credit risk, the Company adheres to the following practices.practices:     ● The Bank maintains a Loan Review Department which reports directly to the audit committee of the Board of Directors. The Loan Review Department performs independent evaluations of loans to challenge the credit risk grades assigned by Management, using grading standards employed by bank regulatory agencies. Those loans judged to carry higher risk attributes are referred to as “classified loans.” Classified loans receive elevated Management attention in order to maximize collection.   ● The Bank maintains two loan administration offices whose sole responsibility is to manage and collect classified loans.   Classified loans with higher levels of credit risk are further designated as “nonaccrual loans.” Management places classified loans on nonaccrual status when full collection of contractual interest and principal payments is in doubt. Uncollected interest previously accrued on loans placed on nonaccrual status is reversed as a charge against interest income. The Company does not accrue interest income on loans following placement on nonaccrual status. Interest payments received on nonaccrual loans are applied to reduce the carrying amount of the loan unless the carrying amount is well secured by loan collateral. “Nonperforming assets” include nonaccrual loans, loans 90 or more days past due and still accruing, and repossessed loan collateral (commonly referred to as “Other Real Estate Owned”).   [The remainder of this page intentionally left blank]Nonperforming Loans   -39- Nonperforming Assets   At December 31,     At December 31,     2020     2019     2018     2017     2016     2023     2022     2021     2020     2019     (In thousands)     (In thousands)       Nonperforming nonaccrual loans   $ 526     $ 659     $ 998     $ 1,641     $ 3,956     $ 401     $ 146     $ 265     $ 526     $ 659   Performing nonaccrual loans     3,803       3,781       3,870       4,285       4,429       2       -       427       3,803       3,781   Total nonaccrual loans   4,329     4,440     4,868     5,926     8,385     403     146     692     4,329     4,440   Accruing loans 90 or more days past due     450       440       551       531       497       388       628       339       450       440   Total nonperforming loans   4,779     4,880     5,419     6,457     8,882     791     774     1,031     4,779     4,880   Other real estate owned     -       43       350       1,426       3,095       -       -       -       -       43   Total nonperforming assets   $ 4,779     $ 4,923     $ 5,769     $ 7,883     $ 11,977     $ 791     $ 774     $ 1,031     $ 4,779     $ 4,923     At December 31, 2020, one loan secured by commercial real estate with a balance of $3.4 million was on nonaccrual status. The remaining seven2023, nonaccrual loans held at December 31, 2020 hadconsisted of four loans with an average carrying value of $130$101 thousand and the largest carrying value was $192 thousand.   Management believes the overall credit quality of the loan portfolio is reasonably stable; however, classified and nonperforming assets could fluctuate from period to period. The performance of any individual loan can be affected by external factors such as the interest rate environment, economic conditions, pandemics, and collateral values or factors particular to the borrower. No assurance can be given that additional increases in nonaccrual and delinquent loans will not occur in the future.   -39- Allowance for Credit Losses   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”). The following table summarizes allowance for credit losses at the dates indicated:       At December 31,       2020     2019       (In thousands)                             Allowance for Credit Losses on Loans   $ 23,854     $ 19,484   Allowance for Credit Losses on Held to Maturity Debt Securities     9       -   Total Allowance for Credit Losses   $ 23,863     $ 19,484                     Allowance for unfunded credit commitments     101       2,160       At December 31,       2023     2022       (In thousands)                     Allowance for credit losses on loans   $ 16,867     $ 20,284   Allowance for credit losses on held to maturity debt securities     1       1   Total allowance for credit losses   $ 16,868     $ 20,285                     Allowance for unfunded credit commitments   $ 201     $ 201     Allowance for Credit Losses on Debt Securities Held to Maturity   Management segmented debt securities held to maturity, selected methods to estimate losses for each segment, and measured a loss estimate. Agency mortgage-backed securities were assigned no credit loss allowance due to the perceived backing of government sponsored entities. Corporate securities held to maturity were individually evaluated for expected credit loss by evaluating the issuer’s financial condition, profitability, cash flows, and credit ratings. The Company has evaluated each issuer’s historical financial performance and ability to service debt payments throughout and following the 2008-2009 recession. The Company has an expectation that nonpayment of the amortized cost basis continues to be zero. At December 31, 2023, no credit loss allowance was assigned to corporate securities held to maturity based on evaluation of each individual issuer’s historical financial performance throughout full business cycles. Municipal securities were evaluated for risk of default based on credit rating and remaining term to maturity using Moody’s risk of default factors; Moody’s loss upon default factors were applied to the assumed defaulted principal amounts to estimate the amount for credit loss allowance. The adoption of the ASU resulted in establishment of allowanceAllowance for credit losses related to debt securities held to maturity of $16 thousand. It was reduced$1 thousand related to $9 thousandmunicipal securities at December 31, 2020 to reflect2023 and December 31, 2022, reflecting the expected credit losses on debt securities held to maturity.   Allowance for Credit Losses on Loans   The Company’s allowance for credit losses on loans represents Management’s estimate of forecasted credit losses in the loan portfolio based on the current expected credit loss (CECL) model. In evaluating credit risk for loans, Management measures the loss potential of the carrying value of loans. As described above, payments received on nonaccrual loans may be applied against the principal balance of the loans until such time as full collection of the remaining recorded balance is expected. The preparation of the financial statements requires Management to estimate the amount of expected losses over the expected contractual life of the Bank’s existing loan portfolio and establish an allowance for credit losses. Loan agreements generally include a maturity date, and the Company considers the contractual life of a loan agreement to extend from the date of origination to the contractual maturity date. In estimating credit losses, Management must exercise significant judgment in evaluating information deemed relevant. The amount of ultimate losses on the loan portfolio can vary from the estimated amounts. Management follows a systematic methodology to estimate loss potential in an effort to reduce the differences between estimated and actual losses. The allowance for credit losses is established through provisions for credit losses charged to income. Losses on loans are charged to the allowance for credit losses when all or a portion of the recorded amount of a loan is deemed to be uncollectible. Recoveries of loans previously charged off are credited to the allowance when realized. The Company’s allowance for credit losses is maintained at a level considered adequate to provide for expected losses based on historical loss rates adjusted for current and expected conditions over a forecast period. These include conditions unique to individual borrowers, as well as overall credit loss experience, the amount of past due, nonperforming and classified loans, recommendations of regulatory authorities, prevailing economic conditions, or credit protection agreements and other factors. Loans that share common risk characteristics are segregated into pools based on common characteristics, which is primarily determined by loan, borrower, or collateral type. Historical loss rates are determined for each pool. For consumer installment loans, primarily secured by automobiles, historical loss rates are determined using a vintage methodology, which tracks losses based on period of origination. For commercial, construction, and commercial real estate, historical loss rates are determined using an open pool methodology where losses are tracked over time for all loans included in the pool at the historical measurement date. Historical loss rates are adjusted for factors that are not reflected in the historical loss rates that are attributable to national or local economic or industry trends which have occurred but have not yet been recognized in past loan charge-off history, estimated losses based on management’s reasonable and supportable expectation of economic trends over a forecast horizon of up to two years, and other factors that impact credit loss expectations that are not reflected in the historical loss rates. Other factors include, but are not limited to, the effectiveness of the Company’s loan review system, adequacy of lending Management and staff, loan policies and procedures, problem loan trends, and concentrations of credit. At the end of the two-year forecast period loss rates revert immediately to the historical loss rates. The results of this analysis are applied to the amortized cost of the loans included within each pool.    -40-   Loans that do not share risk characteristics with other loans in the pools are evaluated individually. A loan is considered ‘collateral-dependent’ when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. A credit loss reserve for collateral-dependent loans is established at the difference between the amortized cost basis in the loan and the fair value of the underlying collateral adjusted for costs to sell. For other individually evaluated loans that are not collateral dependent, a credit loss reserve is established at the difference between the amortized cost basis in the loan and the present value of expected future cash flows discounted at the loan’s effective interest rate. The impact of an expected modification to be made to loans to borrowers experiencing financial difficulty is included in the allowance for credit losses when management determines such modification is likely. Accrued interest is recorded in other assets and is excluded from the estimation of expected credit loss.  Accrued interest is reversed through interest income when amounts are determined to be uncollectible, which generally occurs when the underlying receivable is placed on nonaccrual status or charged off.   The following table summarizes the allowance for credit losses, chargeoffs and recoveries for the periods indicated.     At and For the Years Ended December 31,       2023     2022     2021     2020     2019       ($ in thousands)   Analysis of the Allowance for Credit Losses                                         Balance, end of prior period   $ 20,284     $ 23,514     $ 23,854     $ 19,484     $ 21,351   Adoption of ASU 2016-13     -       -       -       2,017       -   Balance, beginning of period     20,284       23,514       23,854       21,501       21,351   Provision for (reversal of) credit losses on loans     (1,150 )     6       2       4,307       -   Loans charged off:                                         Commercial     (410 )     (20 )     (56 )     (236 )     (97 ) Commercial real estate     (45 )     -       -       -       -   Consumer and other installment     (7,499 )     (6,205 )     (3,192 )     (3,963 )     (4,473 ) Total chargeoffs     (7,954 )     (6,225 )     (3,248 )     (4,199 )     (4,570 ) Recoveries of loans previously charged off:                                         Commercial     2,359       376       228       351       768   Commercial real estate     71       62       743       49       196   Consumer and other installment     3,257       2,551       1,935       1,845       1,739   Total recoveries     5,687       2,989       2,906       2,245       2,703   Net loan losses     (2,267 )     (3,236 )     (342 )     (1,954 )     (1,867 ) Balance, end of period   $ 16,867     $ 20,284     $ 23,514     $ 23,854     $ 19,484                                             Net loan losses as a percentage of average loans     0.25 %     0.32 %     0.03 %     0.16 %     0.16 %                                           Selected financial data: (at period end)                                         Loans   $ 866,602     $ 958,488     $ 1,068,126     $ 1,256,243     $ 1,126,664   Nonaccrual loans     403       146       692       4,329       4,440   Allowance for credit losses as a percentage of loans     1.95 %     2.12 %     2.20 %     1.90 %     1.73 % Nonaccrual loans as a percentage of loans     0.05 %     0.02 %     0.06 %     0.34 %     0.39 % Allowance for credit losses to nonaccrual loans     4185.36 %     13893.15 %     3397.98 %     551.03 %     438.83 % The following table summarizes net (chargeoffs) recoveries and the ratio of net charge-offs (recoveries) to average loans for the periods indicated:       For the Years Ended December 31,       2020     2019     2018     2017     2016       ($ in thousands)   Analysis of the Allowance for Credit Losses   ��                                     Balance, end of prior period   $ 19,484     $ 21,351     $ 23,009     $ 25,954     $ 29,771   Adoption of ASU 2016-13     2,017       -       -       -       -   Balance, beginning of period     21,501       21,351       23,009       25,954       29,771   Provision for (reversal of) credit losses on loans     4,307       -       -       (1,900 )     (3,200 ) Loans charged off:                                         Commercial     (236 )     (97 )     (513 )     (961 )     (2,023 ) Commercial real estate     -       -       (240 )     -       -   Construction     -       -       -       -       -   Residential real estate     -       -       -       -       -   Consumer and other installment     (3,963 )     (4,473 )     (4,124 )     (4,957 )     (4,749 ) Total chargeoffs     (4,199 )     (4,570 )     (4,877 )     (5,918 )     (6,772 ) Recoveries of loans previously charged off:                                         Commercial     351       768       1,447       762       4,028   Commercial real estate     49       196       -       88       554   Construction     -       -       -       1,899       -   Consumer and other installment     1,845       1,739       1,772       2,124       1,573   Total recoveries     2,245       2,703       3,219       4,873       6,155   Net loan losses     (1,954 )     (1,867 )     (1,658 )     (1,045 )     (617 ) Balance, end of period   $ 23,854     $ 19,484     $ 21,351     $ 23,009     $ 25,954                                             Net loan losses as a percentage of average loans     0.16 %     0.16 %     0.14 %     0.08 %     0.04 %     For the Year Ended December 31,       2023     2022     2021                       As a percentage                     As a percentage                     As a percentage               Average     of Net chargeoffs             Average     of Net chargeoffs             Average     of Net chargeoffs       Net (chargeoffs)     Loan     (recoveries)     Net (chargeoffs)     Loan     (recoveries)     Net (chargeoffs)     Loan     (recoveries)       Recoveries     Balances     to Average loans     Recoveries     Balances     to Average loans     Recoveries     Balances     to Average loans       ($ in thousands)                                                                             Commercial   $ 1,949     $ 149,137       (1.31 )%   $ 356     $ 191,805       (0.19 )%   $ 172     $ 349,882       (0.05 )% Commercial real estate     26       492,183       (0.01 )%     62       504,713       (0.01 )%     743       546,750       (0.14 )% Construction     -       4,362       - %     -       1,676       - %     -       98       - % Residential real estate     -       12,080       - %     -       15,694       - %     -       20,337       - % Consumer and other installment     (4,242 )     254,554       1.67 %     (3,654 )     284,076       1.29 %     (1,257 )     278,067       0.45 % Total   $ (2,267 )   $ 912,316       0.25 %   $ (3,236 )   $ 997,964       0.32 %   $ (342 )   $ 1,195,135       0.03 %   The Company's allowance for credit losses on loans is maintained at a level considered adequate to provide for expected losses based on historical loss rates adjusted for current and expected conditions over a forecast period. These include conditions unique to individual borrowers, as well as overall loan loss experience, the amount of past due, nonperforming and classified loans, recommendations of regulatory authorities, prevailing and forecasted economic conditions, or credit protection agreements and other factors. Loans that share common risk characteristics are segregated into pools based on common characteristics, which isare primarily determined by loan, borrower, or collateral type. Historical loss rates are determined for each pool. Loans that do not share risk characteristics with other loans in the pools are evaluated individually. See Note 1 to the consolidated financial statements for additional information.   -41- The following table presents the allocation of the allowance for credit losses as of December 31 for the years indicated:periods indicated. The allowance for loan losses for 2019 is shown under legacy GAAP.     At December 31,     At December 31,     2020     2019     2018     2017     2016     2023     2022     2021             2020             2019             Allocation of the Allowance Balance     Loans as Percent of Total Loans     Allocation of the Allowance Balance     Loans as Percent of Total Loans     Allocation of the Allowance Balance     Loans as Percent of Total Loans     Allocation of the Allowance Balance     Loans as Percent of Total Loans     Allocation of the Allowance Balance     Loans as Percent of Total Loans     Allocation of the Allowance Balance     Loans as Percent of Total Loans     Allocation of the Allowance Balance     Loans as Percent of Total Loans     Allocation of the Allowance Balance     Loans as Percent of Total Loans     Allocation of the Allowance Balance     Loans as Percent of Total Loans     Allocation of the Allowance Balance     Loans as Percent of Total Loans     ($ in thousands)     ($ in thousands)   Commercial   $ 9,205     31 %   $ 4,959     20 %   $ 6,311     23 %   $ 7,746     26 %   $ 8,327     26 %   $ 4,216     16 %   $ 6,138     18 %   $ 6,966     22 %   $ 9,205     31 %   $ 4,959     20 % Commercial real estate   5,660     45 %   4,064     51 %   3,884     48 %   3,849     44 %   3,330     40 %   5,925     56 %   5,888     51 %   6,529     50 %   5,660     45 %   4,064     51 % Construction   6     - %   109     - %   1,465     - %   335     1 %   152     - %   245     1 %   150     - %   2     - %   6     - %   109     - % Residential real estate   47     2 %   206     3 %   869     4 %   995     5 %   1,330     7 %   26     1 %   32     2 %   45     2 %   47     2 %   206     3 % Consumer installment and other   8,936     22 %   6,445     26 %   5,645     25 %   6,418     24 %   7,980     27 %   6,455     26 %   8,076     29 %   9,972     26 %   8,936     22 %   6,445     26 % Unallocated portion     -       - %     3,701       - %     3,177       - %     3,666       - %     4,835       - %     -       - %     -       - %     -       - %     -       - %     3,701       - % Total   $ 23,854       100 %   $ 19,484       100 %   $ 21,351       100 %   $ 23,009       100 %   $ 25,954       100 %   $ 16,867       100 %   $ 20,284       100 %   $ 23,514       100 %   $ 23,854       100 %   $ 19,484       100 %   [The remainder of this page intentionally left blank] -41-   Allowance for Credit Losses     Allowance for Credit Losses     For the Year Ended December 31, 2020     For the Year Ended December 31, 2023                     Consumer                             Consumer             Commercial       Residential   Installment                 Commercial       Residential   Installment         Commercial     Real Estate     Construction     Real Estate     and Other     Unallocated     Total     Commercial     Real Estate     Construction     Real Estate     and Other     Total     (In thousands)     (In thousands)   Allowance for credit losses:                                                         Balance at beginning of period, prior to adoption of ASU 2016-13   $ 4,959     $ 4,064     $ 109     $ 206     $ 6,445     $ 3,701     $ 19,484   Impact of adopting ASU 2016-13     3,385       618       (31 )     (132 )     1,878       (3,701 )     2,017   Adjusted beginning balance   8,344     4,682     78     74     8,323     -     21,501   Provision (reversal)   746     929     (72 )   (27 )   2,731     -     4,307   Balance at beginning of period   $ 6,138     $ 5,888     $ 150     $ 32     $ 8,076     $ 20,284   (Reversal) provision   (3,871 )   11     95     (6 )   2,621     (1,150 ) Chargeoffs   (236 )   -     -     -     (3,963 )   -     (4,199 )   (410 )   (45 )   -     -     (7,499 )   (7,954 ) Recoveries     351       49       -       -       1,845       -       2,245       2,359       71       -       -       3,257       5,687   Total allowance for credit losses   $ 9,205     $ 5,660     $ 6     $ 47     $ 8,936     $ -     $ 23,854     $ 4,216     $ 5,925     $ 245     $ 26     $ 6,455     $ 16,867     Management considers the $23.9$16.9 million allowance for credit losses on loans to be adequate as a reserve against current expected credit losses in the loan portfolio as of December 31, 2020.2023.   See Note 3 to the consolidated financial statements for additional information related to the loan portfolio, loan portfolio credit risk, and allowance for credit losses. Climate-Related Financial Risk Climate change presents risk to the Company, our critical vendors and our customers. Our risk management practices incorporate the challenges brought about by climate change. The operations conducted in our centralized facilities and branch locations can be disrupted by acute physical risks such as flooding and windstorms, and by chronic physical risks such as rising sea levels, sustained higher temperatures, drought, and increased wildfires. Over the intermediate and longer-term, the Company can be subject to transition risks such as market demand, and policy and law changes. None of the Company’s physical locations are located near sea level, and only a limited number of branches are located in flood zones. Our principal electricity supplier reports a Power Content Label of 100% greenhouse gas free using the California Energy Commission’s methodology. Our principal information technology vendor’s goal is to achieve 100 percent carbon neutrality for Scope 1 and 2 greenhouse gas emissions by 2025. The Company and its critical vendors maintain property and casualty insurance, and maintain and regularly test disaster recovery plans, which include redundant operational locations and power sources. The Company’s operations do not use a significant amount of water in producing our products and services. The Company monitors the climate risks of our loan customers. Borrowers with real estate loan collateral located in flood zones must carry flood insurance under the loans’ terms. At December 31, 2023, the Company had $18  million in loans to agricultural borrowers; Management continuously monitors these customers’ access to adequate water sources as well as their ability to sustain low crop yields without encountering financial hardship. The Company makes automobile loans; changes in consumer demand, or governmental laws or policies, regarding gasoline, electric and hybrid vehicles are not considered to be material risks to the Company’s automobile lending practices. The Company considers climate risk in its underwriting of corporate bonds, and avoids purchasing bonds of issuers, which, in Management’s judgement, have elevated climate risk. -42- While the Company follows risk management practices related to climate risk, the Company may experience financial losses due to climate risk despite these precautions.   Asset/Liability and Market Risk Management   Asset/liability management involves the evaluation, monitoring and management of interest rate risk, market risk, liquidity and funding. The fundamental objective of the Company's management of assets and liabilities is to maximize its economic value while maintaining adequate liquidity and a conservative level of interest rate risk.   Interest Rate Risk   Interest rate risk is a significant market risk affecting the Company. Many factors affect the Company’s exposure to interest rates, such as general economic and financial conditions, customer preferences, historical pricing relationships, and re-pricing characteristics of financial instruments. Financial instruments may mature or re-price at different times. Financial instruments may re-price at the same time but by different amounts. Short-term and long-term market interest rates may change by different amounts. The timing and amount of cash flows of various financial instruments may change as interest rates change. In addition, the changing levels of interest rates may have an impact on bond portfolio volumes, accumulated other comprehensive (loss) income, loan demand and demand for various deposit products.   The Company’s earnings are affected not only by general economic conditions, but also by the monetary and fiscal policies of the United States government and its agencies, particularly the FOMC. The monetary policies of the FOMC can influence the overall demand for loans and growth of loans, investment securities, and deposits and the level of interest rates earned on loans and investment securities and paid for deposits and other borrowings. The nature and impact of future changes in monetary policies are generally not predictable.   Management attempts to manage interest rate risk while enhancing the net interest margin and net interest income. At times, depending on expected increases or decreases in market interest rates, the relationship between long and short-term interest rates, market conditions and competitive factors, Management may adjust the Company's interest rate risk position. The Company's results of operations and net portfolio values remain subject to changes in interest rates and to fluctuations in the difference between long, intermediate, and short-term interest rates.   Management monitors the Company’s interest rate risk using a purchased simulation model, which is periodically validatedassessed using supervisory guidance issued by the Board of Governors of the Federal Reserve System, SR 11-7 “Guidance on Model Risk Management.” Management measures its exposure to interest rate risk using both a static and dynamic composition of financial instruments. Within thesimulation and static composition simulation, cash flows are assumed redeployed into like financial instruments at prevailing rates and yields, except cash flows from PPP loans are reinvested into interest-bearing cash.simulation. Within the dynamic composition simulation, Management makes assumptions regarding the expected change in the volume of financial instruments given the assumed change in market interest rates. Within the static simulation, cash flows are assumed redeployed into like financial instruments at prevailing rates and yields. Both simulations are used to measure expected changes in net interest income assuming various levels of change in market interest rates.   The Company’s asset and liability position was slightlygenerally “asset sensitive” at December 31, 2020, depending2023, based on the interest rate assumptions applied to eachthe simulation model. An “asset sensitive” position results in a slightly larger change in interest income than in interest expense resulting from application of assumed interest rate changes. However, in the dynamic simulation, an assumed decline in interest rates is expected to result in improved deposit balances funding higher earning asset levels. Further, in the dynamic simulation, no change in interest rates is expected to result in a decline in net interest income as asset yields remain stable and deposit costs rise as the Bank negotiates deposit rates with customers in the current environment. -42-   At December 31, 2020,2023, Management’s most recent measurements of estimated changes in net interest income were:   Static Simulation (balance sheet composition unchanged): Assumed Immediate Parallel Shift in Interest Rates +1.00% First Year Change in Net Interest Income +12.96% Dynamic Simulation (balance sheet composition changes): Assumed Change in Interest Rates Over 1 Year +1.00% First Year Change in Net Interest Income +6.90% Dynamic simulation (balance sheet composition changes):                                         Assumed change in interest rates over 1 year     -2.00 %     -1.00 %     0.00 %     +1.00 %     +2.00 % First year change in net interest income     -2.20 %     -0.40 %     -0.80 %     +1.80 %     +3.20 %                                           Static simulation (balance sheet composition unchanged):                                         Assumed immediate change in interest rates     -2.00 %     -1.00 %     0.00 %     +1.00 %     +2.00 % First year change in net interest income     -11.50 %     -5.60 %     0.00 %     +5.70 %     +11.00 % -43-   Simulation estimates depend on, and will change with, the size and mix of the actual and projected composition of financial instruments at the time of each simulation. Assumptions made in the simulation may not materialize and unanticipated events and circumstances may occur. In addition, the simulation does not take into account any future actions Management may undertake to mitigate the impact of interest rate changes, loan prepayment estimates and spread relationships, which may change regularly.   The Company does not currently engage in trading activities or use derivative instruments to manage interest rate risk, even though such activities may be permitted with the approval of the Company's Board of Directors.   Market Risk - Equity Markets   Equity price risk can affect the Company. Preferred or common stock holdings, as permitted by banking regulations, can fluctuate in value. Changes in value of preferred or common stock holdings are recognized in the Company's income statement.   Fluctuations in the Company's common stock price can impact the Company's financial results in several ways. First, the Company has at times repurchased and retired its common stock; the market price paid to retire the Company's common stock affects the level of the Company's shareholders' equity, cash flows and shares outstanding. Second, the Company's common stock price impacts the number of dilutive equivalent shares used to compute diluted earnings per share. Third, fluctuations in the Company's common stock price can motivate holders of options to purchase Company common stock through the exercise of such options thereby increasing the number of shares outstanding and potentially adding volatility to the book tax provision. Finally, the amount of compensation expense and tax deductions associated with share based compensation fluctuates with changes in and the volatility of the Company's common stock price.   Market Risk - Other   Market values of loan collateral can directly impact the level of loan chargeoffs and the provision for credit losses. The financial condition and liquidity of debtors issuing bonds and debtors whose mortgages or other obligations are securitized can directly impact the credit quality of the Company’s investment securities portfolio requiring the Company to establish or increase reserves for expected credit losses. Other types of market risk, such as foreign currency exchange risk, are not significant in the normal course of the Company's business activities.   Liquidity and Funding   The objective of liquidity management is to manage cash flow and liquidity reserves so that they are adequate to fund the Company'sBank's operations and meet obligations and other commitments on a timely basis and at a reasonable cost. The CompanyBank achieves this objective through the selection of asset and liability maturity mixes that it believes best meet its needs. The Company'sBank's liquidity position is enhanced by its ability to raise additional funds as needed by borrowing from correspondent banks or in the wholesale markets, or by selling debt securities available-for-sale or borrowing in the wholesale markets.available for sale.   In recent years, the Company'sBank's deposit base has provided the majority of the Company'sBank's funding requirements. This relatively stable and low-cost source of funds, along with shareholders' equity, provided 97% of funding for average total assets in the year ended December 31, 20202023 and 98% in the year ended December 31, 2019.2022, respectively. The stability of the Company’sBank’s funding from customer deposits is in part reliant on the confidence clients have in the Company.Bank. The CompanyBank places a very high priority in maintaining this confidence through conservative credit risk and capital management practices and by maintaining an appropriate level of liquidity. Total deposits were $5,474 million at December 31, 2023 and $6,225 million at December 31, 2022. Total time deposits were $97 million at December 31, 2023 and $131 million at December 31, 2022. The Company has no foreign time deposits. The standard FDIC deposit insurance amount is $250,000 per depositor, for each account ownership category. At December 31, 2023, estimated federally uninsured deposits and time deposits were $2,544 million and $4 million, respectively. Banking industry deposits, including for Westamerica Bank, grew rapidly in 2020 and 2021 due to the injection of fiscal stimulus into the United States economy, including Paycheck Protection Program loans, and an easing of Federal Reserve monetary policy, both in response to the COVID pandemic. Federal Reserve monetary policy easing included reduction in the federal funds rate to a range of 0.00% to 0.25% and net purchases of Treasury securities and agency mortgage-backed securities, which increase the money supply and aggregate bank deposits. Subsequently, inflation rose considerably while employment conditions remained strong. In 2022 and 2023, the Federal Reserve’s monetary policy reversed to tightening, in an effort to reduce inflation. The monetary policy tightening included increasing and keeping the federal funds rate to a range of 5.25% to 5.50% and net reductions of Treasury securities and agency mortgage-backed securities, which reduce the money supply and aggregate bank deposits. Westamerica Bank’s deposit totals are subject to both the fiscal policies of the United States government and monetary policies of the Federal Reserve; the 2023 decline in Westamerica Bank deposits is influenced by these fiscal and monetary policies. In addition, the Internal Revenue Service (“IRS”) declared every county in which Westamerica Bank operates as Natural Disaster Areas due to 2022-2023 winter storms; the IRS and California Franchise Tax Board extended the 2022 tax filing deadline and 2023 tax installment payment due dates to November 16, 2023. As Westamerica Bank management expected this deferment of tax payment deadlines impacted deposit totals in the fourth quarter 2023 as customers paid their federal and California tax obligations. -44- The following table shows the time remaining to maturity of the Company’s estimated amounts of uninsured time deposits with a balance greater than $250,000 per depositor per category:     At December 31, 2023       (In thousands)   Three months or less   $ 1,926   Over three through six months     309   Over six through twelve months     1,947   Over twelve months     163   Total   $ 4,345     Liquidity is further provided by assets such as balances held at the Federal Reserve Bank, investment securities, and amortizing loans. The Company's investmentAt 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 portfolio provides a substantial secondary source of liquidity. The Company held $4.6 billion in total investment securitiesas collateral for borrowing purposes; at December 31, 2020. Under2023, 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 deposit,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 year ended December 31, 2023, the Company’s average borrowings from the Federal Reserve Bank and other arrangements,correspondent banks were $-0- thousand, respectively, and at December 31, 2023, the Company must holdCompany’s borrowings from the Federal Reserve Bank and pledge investment securities as collateral.other correspondent banks were $-0- thousand. At December 31, 2020, such2023, the Company’s estimated unpledged collateral requirementsqualifying debt securities totaled approximately $889 million. The Bank funded $249 million in PPP loans by crediting loan proceeds to$1,945,176 thousand based on the borrower’s deposit accounts. PPP loans, net of deferred fees and costs, were $187 million at December 31, 2020. The Federal Reserve Bank establishedborrowing programs. On January 24, 2024, the Paycheck Protection Program Liquidity Facility (“PPPLF”) to provide funding for eligible firms extending PPP loans. Under the PPPLF,Federal Reserve Board announced the Bank must pledge PPPTerm Funding Program would cease making new loans as scheduled on March 11, 2024. Debt securities eligible as collateral for PPPLF borrowings. Principal reductions on the pledged PPP loans must immediately result in principal reduction of the PPPLF borrowing.  are shown at market value unless otherwise noted:   -43-     At December 31, 2023       (in thousands)   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     Liquidity risk can result from the mismatching of asset and liability cash flows, or from disruptions in the financial markets. The CompanyBank performs liquidity stress tests on a periodic basis to evaluate the sustainability of its liquidity. Under the stress testing, the CompanyBank assumes outflows of funds increase beyond expected levels. Measurement of such heightened outflows considers the composition of the Company’sBank’s deposit base, including any concentration of deposits, non-deposit funding such as short-term borrowings, and unfunded lending commitments. The Companycomposition of the Bank’s deposits is considered including the broad industry and geographic diversification in the Bank’s market area. The Bank evaluates its stock of highly liquid assets to meet the assumed higher levels of outflows. Highly liquid assets include cash and amounts due from other banks from daily transaction settlements, reduced by branch cash needs and any Federal Reserve Bank reserve requirements, and investment securities based on regulatory risk-weighting guidelines. Based on the results of the most recent liquidity stress test, Management is satisfied with the liquidity condition of the Bank and the Company.Bank. However, no assurance can be given the Bank or Company will not experience a period of reduced liquidity.   -45- Management continually monitors the Company’sBank’s cash levels. Loan demand from credit worthy borrowers will be dictated by economic and competitive conditions. The CompanyBank aggressively solicits non-interest bearing demand deposits and money market checking deposits, which are the least sensitive to changes in interest rates. The growth of these deposit balances is subject to heightened competition, the success of the Company'sBank's sales efforts, delivery of superior customer service, new regulations and market conditions. The CompanyBank does not aggressively solicit higher-costing time deposits. Changes in interest rates, most notably rising interest rates or increased consumer spending, could impact deposit volumes. Depending on economic conditions, interest rate levels, liquidity management and a variety of other conditions, any deposit growth may be used to fund loans or purchase investment securities. However, due to possible volatility in economic conditions, competition and political uncertainty, loan demand and levels of customer deposits are not certain. Shareholder dividends are expected to continue subject to the Board's discretion and continuing evaluation of capital levels, earnings, asset quality and other factors.   Westamerica Bancorporation ("Parent Company") is a separate entity apart from the Bank and must provide for its own liquidity. In addition to its operating expenses, the Parent Company is responsible for the payment of dividends declared for its shareholders, and interest and principal on any outstanding debt. The Parent Company currently hashad no debt.debt as of December 31, 2023. Substantially all of the Parent Company's revenues are obtained from subsidiary dividends and service fees.   The Bank’s dividends paid to the Parent Company, proceeds from the exercise of stock options, and Parent Company cash balances provided adequate cash for the Parent Company to pay shareholder dividends of $44$46 million each in the year ended December 31, 20202023 and $45 million in the year ended December 31, 20192022 and retire common stock in the amountamounts of $16$14 million and $488$218 thousand, respectively. Payment of dividends to the Parent Company by the Bank is limited under California and Federal laws. The Company believes these regulatory dividend restrictions will not have an impact on the Parent Company's ability to meet its ongoing cash obligations. The Parent Company’s cash balance was $155 million at December 31, 2023 and $99 million at December 31, 2022.   Capital Resources   The Company has historically generated high levels of earnings, which provide a means of accumulating capital. The Company's net income as a percentage of average shareholders' equity (“return on equity” or “ROE”) has been 11.3% inwas 18.1% for the year ended December 31, 20202023 and 11.9% in15.2% for the year ended December 31, 2019.2022. The Company also raises capital as employees exercise stock options. Capital raised through the exercise of stock options was $2.8 million$950 thousand in the year ended December 31, 20202023 and $14$2.3 million in the year ended December 31, 2019.2022.   The Company paid common dividends totaling $44$46 million each in the year ended December 31, 20202023 and $45 million in the year ended December 31, 2019,2022, which represent dividends per common share of $1.64$1.72 and $1.63,$1.68, respectively. The Company's earnings have historically exceeded dividends paid to shareholders. The amount of earnings in excess of dividends provides the Company resources to finance growth and maintain appropriate levels of shareholders' equity. In the absence of profitable growth opportunities, the Company has at times repurchased and retired its common stock as another means to return earningscapital to shareholders. The Company repurchased and retired 319274 thousand shares valued at $16$14 million in the year ended December 31, 20202023 and 83 thousand shares valued at $488$218 thousand in the year ended December 31, 2019.2022.   The Company's primary capital resource is shareholders' equity, which was $845$773 million at December 31, 20202023 compared with $731$602 million at December 31, 2019.2022. The Company's ratio of equity to total assets was 12.5%12.14% at December 31, 20202023 and 13.0%8.7% at December 31, 2019.2022.   The Company performs capital stress tests on a periodic basis to evaluate the sustainability of its capital. Under the stress testing, the Company assumes various scenarios such as deteriorating economic and operating conditions, and unanticipated asset devaluations, and significant operational lapses.devaluations. The Company measures the impact of these scenarios on its earnings and capital. Based on the results of the most recent stress tests, Management is satisfied with the capital condition of the Bank and the Company. However, no assurance can be given the Bank or Company will not experience a period of reduced earnings or a reduction in capital from unanticipated events and circumstances.   -44--46-     Capital to Risk-Adjusted Assets   The capital ratios for the Company and the Bank under current regulatory capital standards are presented in the tables below, on the dates indicated. For Common Equity Tier I Capital, Tier 1 Capital and Total Capital, the minimum percentage required for regulatory capital adequacy purposes include a 2.5% “capital conservation buffer.”                 To Be                 To Be                 Well-capitalized                 Well-capitalized             Required for   Under Prompt             Required for   Under Prompt     At December 31, 2020     Capital Adequacy   Corrective Action     At December 31, 2023     Capital Adequacy   Corrective Action     Company     Bank     Purposes     Regulations (Bank)     Company     Bank     Purposes     Regulations (Bank)       Common Equity Tier I Capital   16.04 %   13.00 %   7.00 %   6.50 %   18.76 %   14.46 %   7.00 %   6.50 % Tier I Capital   16.04 %   13.00 %   8.50 %   8.00 %   18.76 %   14.46 %   8.50 %   8.00 % Total Capital   16.68 %   13.80 %   10.50 %   10.00 %   19.15 %   14.98 %   10.50 %   10.00 % Leverage Ratio   9.40 %   7.58 %   4.00 %   5.00 %   12.86 %   9.88 %   4.00 %   5.00 %                               To Be                               Well-capitalized                       Required for     Under Prompt       At December 31, 2019     Capital Adequacy     Corrective Action       Company     Bank     Purposes     Regulations (Bank)                                     Common Equity Tier I Capital     16.22 %     11.80 %     7.00 %     6.50 % Tier I Capital     16.22 %     11.80 %     8.50 %     8.00 % Total Capital     16.83 %     12.58 %     10.50 %     10.00 % Leverage Ratio     10.50 %     7.60 %     4.00 %     5.00 % In June 2016, the Financial Accounting Standards Board issued an update to the accounting standards for credit losses known as the "Current Expected Credit Losses" (CECL) methodology, which replaced the existing incurred loss methodology for certain financial assets. The Company adopted the CECL methodology effective January 1, 2020, which involved an implementing accounting entry to retained earnings on a net-of-tax basis. The adoption of the CECL methodology did not have a material adverse day-one impact to capital ratios and the Company did not adopt the phase in regulatory capital relief. See Note 1 to consolidated financial statements, “Recently Adopted Accounting Standards” for more information on the CECL methodology. PPP loans are zero percent risk weighted for regulatory capital purposes; average PPP loans of $228 million did not affect regulatory capital ratios. The Leverage ratio would have been approximately 0.3% higher for both the Company and the Bank without PPP loans. To the extent funding of PPP loans is through excess cash balances or PPPLF borrowings, the Leverage ratio is unaffected. However, PPP loans funded by increased non-PPPLF borrowings reduces the leverage ratio.                             To Be                               Well-capitalized                       Required for     Under Prompt       At December 31, 2022     Capital Adequacy     Corrective Action       Company     Bank     Purposes     Regulations (Bank)                                     Common Equity Tier I Capital     15.22 %     12.37 %     7.00 %     6.50 % Tier I Capital     15.22 %     12.37 %     8.50 %     8.00 % Total Capital     15.64 %     12.93 %     10.50 %     10.00 % Leverage Ratio     10.18 %     8.26 %     4.00 %     5.00 %   The Company and the Bank routinely project capital levels by analyzing forecasted earnings, credit quality, shareholder dividends, asset volumes, share repurchase activity, stock option exercise proceeds, and other factors. Based on current capital projections, the Company and the Bank expectexpects to maintain regulatory capital levels in excess of the minimum required to be considered well-capitalized under the prompt corrective action framework while continuingframework. The Company expects to paycontinue paying quarterly dividends to shareholders. No assurance can be given that changes in capital management plans will not occur.   Deposit Categories   The Company primarily attracts deposits from local businesses and professionals, as well as through retail savings and checking accounts, and, to a more limited extent, certificates of deposit. -45- The following table summarizes the Company’s average daily amount of deposits and the rates paid for the periods indicated:   Deposit Distribution and Average Rates Paid        For the Years Ended December 31,     For the Years Ended December 31,     2020     2019     2018     2023     2022     2021     Average Balance     Percentage of Total Deposits     Rate     Average Balance     Percentage of Total Deposits     Rate     Average Balance     Percentage of Total Deposits     Rate     Average Balance     Percentage of Total Deposits     Rate     Average Balance     Percentage of Total Deposits     Rate     Average Balance     Percentage of Total Deposits     Rate     ($ In thousands)     ($ In thousands)                                           Noninterest-bearing demand   $ 2,538,819     47.8 %   - %   $ 2,222,876     46.3 %   - %   $ 2,209,924     45.4 %   - %   $ 2,748,544     47.5 %   - %   $ 3,018,350     47.0 %   - %   $ 2,897,244     47.5 %   - % Interest bearing:                                                                             Transaction   1,008,758     19.0 %   0.03 %   932,524     19.4 %   0.05 %   928,277     19.0 %   0.04 %   1,156,684     20.0 %   0.04 %   1,289,956     20.1 %   0.03 %   1,208,269     19.8 %   0.03 % Savings   1,594,718     30.1 %   0.06 %   1,464,080     30.5 %   0.06 %   1,519,375     31.2 %   0.06 %   1,766,225     30.5 %   0.17 %   1,967,902     30.7 %   0.06 %   1,842,590     30.2 %   0.06 % Time less than $100 thousand   91,519     1.7 %   0.21 %   103,399     2.2 %   0.25 %   119,586     2.5 %   0.23 %   67,832     1.2 %   0.30 %   77,007     1.2 %   0.23 %   83,580     1.4 %   0.20 % Time $100 thousand or more     72,363       1.4 %     0.44 %     78,925       1.6 %     0.41 %     94,919       1.9 %     0.39 %     48,076       0.8 %     0.24 %     62,411       1.0 %     0.25 %     69,165       1.1 %     0.38 % Total (1)   $ 5,306,177       100.0 %     0.06 %   $ 4,801,804       100.0 %     0.07 %   $ 4,872,081       100.0 %     0.04 %   $ 5,787,361       100.0 %     0.12 %   $ 6,415,626       100.0 %     0.05 %   $ 6,100,848       100.0 %     0.06 %   (1) The rates for total deposits reflectwere calculated using the valueaverage balances of noninterest-bearinginterest-bearing deposits. -47-   The Company’s strategy includes building the value of its deposit base by building balances of lower-costing deposits and avoiding reliance on higher-costing time deposits. Average balances of higher costing time deposits declined 24% to $164$116 million from 20182021 to 2020.2023. The Company’s average balances of checking and savings accounts represented 97%98% of average balances of total deposits in 2020 compared with 96%2023, 98% in 20192022 and 2018.97% in 2021.   Total time deposits were $156$97 million and $169$131 million at December 31, 20202023 and 2019,December 31, 2022, respectively. The following table sets forth, by time remaining to maturity, the Company’s total domestic time deposits. The Company has no foreign time deposits.   Time Deposits Maturity Distribution          At December 31, 2020       (In thousands)   2021   $ 115,544   2022     17,556   2023     8,398   2024     9,727   2025     5,138   Thereafter     26   Total   $ 156,389   The following sets forth, by time remaining to maturity, the Company’s domestic time deposits in amounts of $100 thousand or more: Time Deposits $100,000 or more Maturity Distribution     At December 31, 2020       (In thousands)   Three months or less   $ 24,323   Over three through six months     11,882   Over six through twelve months     20,222   Over twelve months     20,137   Total   $ 76,564   -46-     At December 31, 2023       (In thousands)   2024   $ 77,625   2025     10,606   2026     3,347   2027     2,526   2028     2,653   Thereafter     45   Total   $ 96,802     Short-term Borrowings   The following table sets forth the short-term borrowings of the Company:   Short-Term Borrowings Distribution            At December 31,       2020     2019     2018       (In thousands)   Securities sold under agreements to repurchase the securities   $ 102,545     $ 30,928     $ 51,247   Total short-term borrowings   $ 102,545     $ 30,928     $ 51,247       At December 31,       2023     2022     2021       (In thousands)   Securities sold under agreements to repurchase the securities   $ 58,162     $ 57,792     $ 146,246   Total short-term borrowings   $ 58,162     $ 57,792     $ 146,246     Further detail of federal funds purchased and other borrowed funds is as follows:       For the Years Ended December 31,     For the Years Ended December 31,     2020     2019     2018     2023     2022     2021     ($ in thousands)     ($ in thousands)   Federal funds purchased balances and rates paid on outstanding amount:                 Average balance for the year   $ 1     $ 1     $ 1     $ -     $ 1     $ 1   Maximum month-end balance during the year   -     -     -     -     -     -   Average interest rate for the year   0.88 %   1.98 %   2.56 %   - %   4.68 %   0.87 % Average interest rate at period end   - %   - %   - %   - %   - %   - % Securities sold under agreements to repurchase the securities balances and rates paid on outstanding amount:                 Average balance for the year   $ 80,455     $ 51,441     $ 59,991     $ 89,298     $ 109,282     $ 114,266   Maximum month-end balance during the year   110,846     61,411     68,894     138,005     257,560     146,552   Average interest rate for the year   0.07 %   0.07 %   0.06 %   0.13 %   0.07 %   0.07 % Average interest rate at period end   0.07 %   0.06 %   0.06 %   0.31 %   0.06 %   0.07 % PPPLF balances and rates paid on outstanding amount:                 Average balance for the year   $ 1     $ -     $ -     $ -     $ -     $ 53   Maximum month-end balance during the year   -     -     -     -     -     -   Average interest rate for the year   0.35 %   - %   - %   - %   - %   0.35 % Average interest rate at period end   - %   - %   - %   - %   - %   - % -48-   Financial Ratios                                                             The following table shows key financial ratios for the periods indicated:        At and For the Years Ended December 31,       2020     2019     2018   Return on average total assets     1.30 %     1.44 %     1.27 % Return on average common shareholders' equity     11.30 %     11.90 %     11.35 % Average shareholders' equity as a percentage of:                         Average total assets     11.52 %     12.07 %     11.22 % Average total loans     57.42 %     58.14 %     52.16 % Average total deposits     13.41 %     14.07 %     12.95 % Common dividend payout ratio     55 %     55 %     60 %     At and For the Years Ended December 31,       2023     2022     2021   Return on average total assets     2.35 %     1.65 %     1.23 % Return on average common shareholders' equity     18.08 %     15.21 %     11.52 % Average shareholders' equity as a percentage of:                         Average total assets     13.02 %     10.83 %     10.66 % Average total loans     98.06 %     80.41 %     62.81 % Average total deposits     15.46 %     12.51 %     12.30 % Common dividend payout ratio     28 %     37 %     51 %   [The remainder of this page intentionally left blank]       -47--49-     ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   The Company does not currently engage in trading activities or use derivative instruments to control interest rate risk, even though such activities may be permitted with the approval of the Company’s Board of Directors.   Credit risk and interest rate risk are the most significant market risks affecting the Company, and equity price risk can also affect the Company’s financial results. These risks are described in the preceding sections regarding “Loan Portfolio Credit Risk,” and “Asset/Liability and Market Risk Management.” Other types of market risk, such as foreign currency exchange risk and commodity price risk, are not significant in the normal course of the Company’s business activities.   Operational risk is the risk to current or projected financial condition and resilience arising from inadequate or failed internal processes or systems, people (including human errors or misconduct), or adverse external events, including the risk of loss resulting from breaches in data security. Operational risk can also include the risk of loss due to failures by third parties with which the Company does business. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA   INDEX TO FINANCIAL STATEMENTS     Page Management’s Report on Internal Control Over Financial Reporting 4951 Consolidated Balance Sheets as of December 31, 20202023 and 20192022 5052 Consolidated Statements of Income for the years ended December 31, 2020, 20192023, 2022 and 20182021 5153 Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2020, 20192023, 2022 and 20182021 5254 Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2020, 20192023, 2022 and 20182021 5355 Consolidated Statements of Cash Flows for the years ended December 31, 2020, 20192023, 2022 and 20182021 5456 Notes to the Consolidated Financial Statements 5557 Report of Independent Registered Public Accounting Firm (PCAOB ID 173) 9390     -48--50-     MANAGEMENT’SMANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING   Management of Westamerica Bancorporation and subsidiaries (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting, and for performing an assessment of the effectiveness of internal control over financial reporting as of December 31, 2020.2023. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s system of internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of Management and Directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.   Management performed an assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 20202023 based upon criteria in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this assessment, Management determined that the Company’s internal control over financial reporting was effective as of December 31, 20202023 based on the criteria in Internal Control - Integrated Framework (2013) issued by COSO.   The Company’s independent registered public accounting firm has issued an attestation report on the Company’s internal control over financial reporting. Their opinion and attestation on internal control over financial reporting appear on page 93.90.   Dated: February 25, 2021 28, 2024           -49--51-     WESTAMERICA BANCORPORATION CONSOLIDATED BALANCE SHEETS WESTAMERICA BANCORPORATION   CONSOLIDATED BALANCE SHEETS       At December 31,     At December 31,     2020     2019     2023     2022     (In thousands)     (In thousands)   Assets:                         Cash and due from banks   $ 621,275     $ 373,421     $ 190,314     $ 294,236   Debt securities available for sale   4,063,185     3,078,846     3,999,801     4,331,743   Debt securities held to maturity, net of allowance for credit losses of $9 at December 31, 2020 and $ - at December 31, 2019 (Fair value of $529,678 at December 31, 2020 and $744,296 at December 31, 2019)   515,589     738,072   Debt securities held to maturity, net of allowance for credit losses of $1 at December 31, 2023 and $1 at December 31, 2022 (Fair value of $849,562 at December 31, 2023 and $873,511 at December 31, 2022)   878,396     915,913   Loans   1,256,243     1,126,664     866,602     958,488   Allowance for credit losses on loans     (23,854 )     (19,484 )     (16,867 )     (20,284 ) Loans, net of allowance for credit losses on loans   1,232,389     1,107,180     849,735     938,204   Other real estate owned   0     43   Premises and equipment, net   32,813     34,597     27,016     28,819   Identifiable intangibles, net   1,104     1,391     347     583   Goodwill   121,673     121,673     121,673     121,673   Other assets     159,903       164,332       297,310       319,146   Total Assets   $ 6,747,931     $ 5,619,555     $ 6,364,592     $ 6,950,317       Liabilities:                         Noninterest-bearing deposits   $ 2,725,177     $ 2,240,112     $ 2,605,844     $ 2,947,277   Interest-bearing deposits     2,962,802       2,572,509       2,868,423       3,278,013   Total deposits   5,687,979     4,812,621     5,474,267     6,225,290   Short-term borrowed funds   102,545     30,928     58,162     57,792   Other liabilities     112,598       44,589       59,269       65,125   Total Liabilities     5,903,122       4,888,138       5,591,698       6,348,207       Contingencies (Note 10)                  Contingencies (Note 12)                       Shareholders' Equity:                         Common stock (no par value), authorized - 150,000 shares Issued and outstanding: 26,807 at December 31, 2020 and 27,062 at December 31, 2019   466,006     465,460   Common stock (no par value), authorized - 150,000 shares Issued and outstanding: 26,671 at December 31, 2023 and 26,913 at December 31, 2022   473,136     475,086   Deferred compensation   35     771     35     35   Accumulated other comprehensive income   114,412     26,051   Accumulated other comprehensive loss   (190,282 )   (256,105 ) Retained earnings     264,356       239,135       490,005       383,094   Total Shareholders' Equity     844,809       731,417       772,894       602,110   Total Liabilities and Shareholders' Equity   $ 6,747,931     $ 5,619,555     $ 6,364,592     $ 6,950,317     See accompanying notes to consolidated financial statements. -50--52-     WESTAMERICA BANCORPORATION   CONSOLIDATED STATEMENTS OF INCOME                                 For the Years Ended December 31,       2020     2019     2018       (In thousands, except per share data)   Interest and Loan Fee Income:                         Loans   $ 59,377     $ 58,153     $ 59,030   Equity securities     419       392       354   Debt securities available for sale     91,343       74,147       60,383   Debt securities held to maturity     13,552       18,997       24,031   Interest-bearing cash     1,165       6,993       7,925   Total Interest and Loan Fee Income     165,856       158,682       151,723   Interest Expense:                         Deposits     1,770       1,854       1,922   Short-term borrowed funds     53       34       37   Other borrowed funds     1       0       0   Total Interest Expense     1,824       1,888       1,959   Net Interest and Loan Fee Income     164,032       156,794       149,764   Provision for Credit Losses     4,300       0       0   Net Interest and Loan Fee Income After Provision For Credit Losses     159,732       156,794       149,764   Noninterest Income:                         Service charges on deposit accounts     14,149       17,882       18,508   Merchant processing services     10,208       10,132       9,630   Debit card fees     6,181       6,357       6,643   Trust fees     3,012       2,963       2,938   ATM processing fees     2,273       2,776       2,752   Other service fees     1,837       2,255       2,567   Financial services commissions     372       392       499   Gains on sales of real property     3,536       0       0   Life insurance gains     0       433       585   Securities gains (losses)     71       217       (52 ) Other noninterest income     3,998       4,001       4,079   Total Noninterest Income     45,637       47,408       48,149   Noninterest Expense:                         Salaries and related benefits     50,749       51,054       53,007   Occupancy and equipment     19,637       20,240       19,679   Outsourced data processing services     9,426       9,471       9,229   Professional fees     2,423       2,465       2,842   Courier service     2,001       1,878       1,779   Loss contingency     0       553       3,500   Amortization of identifiable intangibles     287       538       1,921   Other noninterest expense     14,043       12,787       14,959   Total Noninterest Expense     98,566       98,986       106,916   Income Before Income Taxes     106,803       105,216       90,997   Provision for income taxes     26,390       24,827       19,433   Net Income   $ 80,413     $ 80,389     $ 71,564                             Average Common Shares Outstanding     26,942       26,956       26,649   Diluted Average Common Shares Outstanding     26,960       27,006       26,756   Per Common Share Data:                         Basic earnings   $ 2.98     $ 2.98     $ 2.69   Diluted earnings     2.98       2.98       2.67   Dividends paid     1.64       1.63       1.60     See accompanying notes to consolidated financial statements.WESTAMERICA BANCORPORATION CONSOLIDATED STATEMENTS OF INCOME -51- WESTAMERICA BANCORPORATION   CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME                                                           For the Years Ended December 31,       2020     2019     2018       (In thousands)   Net Income   $ 80,413     $ 80,389     $ 71,564   Other comprehensive income (loss):                         Changes in net unrealized gains (losses) on debt securities available for sale     125,519       93,936       (27,939 ) Deferred tax (expense) benefit     (37,108 )     (27,771 )     8,258   Reclassification of gains included in net income     (71 )     (167 )     0   Deferred tax expense on gains included in net income     21       49       0   Changes in unrealized gains (losses) on debt securities available for sale, net of tax     88,361       66,047       (19,681 ) Total Comprehensive Income   $ 168,774     $ 146,436     $ 51,883   See accompanying notes to consolidated financial statements. -52- WESTAMERICA BANCORPORATION   CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY                                                                                 Accumulated                       Common                     Other                       Shares     Common     Deferred     Comprehensive     Retained               Outstanding     Stock     Compensation     Income (Loss)     Earnings     Total       (In thousands, except per share data)                                                     Balance, December 31, 2017     26,425     $ 431,734     $ 1,533     $ (16,832 )   $ 173,804     $ 590,239   Cumulative effect of equity securities losses reclassified                             142       (142 )     -   Adjusted Balance, January 1, 2018     26,425       431,734       1,533       (16,690 )     173,662       590,239   Reclass stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017                             (3,625 )     3,625       -   Net income for the year 2018                                     71,564       71,564   Other comprehensive loss                             (19,681 )             (19,681 ) Exercise of stock options     292       13,373                               13,373   Restricted stock activity     20       1,281       (138 )                     1,143   Stock based compensation             1,988                               1,988   Stock awarded to employees     2       124                               124   Retirement of common stock     (9 )     (149 )                     (375 )     (524 ) Dividends ($1.60 per share)                                     (42,635 )     (42,635 ) Balance, December 31, 2018     26,730       448,351       1,395       (39,996 )     205,841       615,591   Cumulative effect of bond premium amortization adjustment, net of tax                                     (2,801 )     (2,801 ) Adjusted Balance, January 1, 2019     26,730       448,351       1,395       (39,996 )     203,040       612,790   Net income for the year 2019                                     80,389       80,389   Other comprehensive income                             66,047               66,047   Shares issued from stock warrant exercise, net of repurchase     51       -                               -   Exercise of stock options     269       13,699                               13,699   Restricted stock activity     18       1,697       (624 )                     1,073   Stock based compensation     -       1,744                               1,744   Stock awarded to employees     2       105                               105   Retirement of common stock     (8 )     (136 )                     (352 )     (488 ) Dividends ($1.63 per share)                                     (43,942 )     (43,942 ) Balance, December 31, 2019     27,062       465,460       771       26,051       239,135       731,417   Adoption of ASU 2016-13                                     52       52   Adjusted Balance, January 1, 2020     27,062       465,460       771       26,051       239,187       731,469   Net income for the year 2020                                     80,413       80,413   Other comprehensive income                             88,361               88,361   Exercise of stock options     52       2,838                               2,838   Restricted stock activity     10       1,270       (736 )                     534   Stock based compensation     -       1,875                               1,875   Stock awarded to employees     2       100                               100   Retirement of common stock     (319 )     (5,537 )                     (10,959 )     (16,496 ) Dividends ($1.64 per share)                                     (44,285 )     (44,285 ) Balance, December 31, 2020     26,807     $ 466,006     $ 35     $ 114,412     $ 264,356     $ 844,809       For the Years Ended December 31,       2023     2022     2021       (In thousands, except per share data)   Interest and Loan Fee Income:                         Loans   $ 47,116     $ 49,682     $ 57,558   Nonmarketable equity securities     630       537       458   Debt securities available for sale     190,039       144,646       105,420   Debt securities held to maturity     35,557       19,101       8,875   Interest-bearing cash     10,671       7,790       1,132   Total Interest and Loan Fee Income     284,013       221,756       173,443   Interest Expense:                         Deposits     3,770       1,846       1,877   Short-term borrowed funds     120       79       78   Total Interest Expense     3,890       1,925       1,955   Net Interest and Loan Fee Income     280,123       219,831       171,488   Reversal of Provision for Credit Losses     (1,150 )     -       -   Net Interest and Loan Fee Income After Provision For Credit Losses     281,273       219,831       171,488   Noninterest Income:                         Service charges on deposit accounts     14,169       14,490       13,697   Merchant processing services     11,280       11,623       11,998   Debit card fees     7,185       7,879       6,859   Trust fees     3,122       3,216       3,311   ATM processing fees     2,618       2,160       2,280   Other service fees     1,765       1,808       1,884   Financial services commissions     336       417       356   Life insurance gains     279       930       -   Securities (losses) gains     (125 )     -       34   Other noninterest income     2,893       2,598       2,926   Total Noninterest Income     43,522       45,121       43,345   Noninterest Expense:                         Salaries and related benefits     47,871       46,125       48,011   Occupancy and equipment     20,520       19,884       19,139   Outsourced data processing services     9,846       9,684       9,601   Limited partnership operating losses     5,754       5,724       2,620   Courier service     2,652       2,614       2,177   Professional fees     1,751       2,628       3,253   Other noninterest expense     14,822       12,702       13,005   Total Noninterest Expense     103,216       99,361       97,806   Income Before Income Taxes     221,579       165,591       117,027   Provision for income taxes     59,811       43,557       30,518   Net Income   $ 161,768     $ 122,034     $ 86,509                             Average Common Shares Outstanding     26,703       26,895       26,855   Diluted Average Common Shares Outstanding     26,706       26,907       26,870   Per Common Share Data:                         Basic earnings   $ 6.06     $ 4.54     $ 3.22   Diluted earnings     6.06       4.54       3.22   Dividends paid     1.72       1.68       1.65     See accompanying notes to consolidated financial statements.   -53-   WESTAMERICA BANCORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)   WESTAMERICA BANCORPORATION   CONSOLIDATED STATEMENTS OF CASH FLOWS                                 For the Years Ended December 31,       2020     2019     2018   Operating Activities:   (In thousands)   Net income   $ 80,413     $ 80,389     $ 71,564   Adjustments to reconcile net income to net cash provided by operating activities:                         Depreciation and amortization/accretion     22,647       20,626       24,402   Provision for credit losses     4,300       0       0   Net amortization of deferred loan fees     (4,442 )     (260 )     (203 ) Increase in interest income receivable     (4,225 )     (2,963 )     (2,277 ) (Increase) decrease in net deferred tax asset     (246 )     3,662       (943 ) Increase in other assets     (3,528 )     (14,806 )     (4,017 ) Stock option compensation expense     1,875       1,744       1,988   Increase (decrease) in income taxes payable     353       (1,733 )     7,554   Decrease in interest expense payable     (5 )     (9 )     (27 ) Increase (decrease) in other liabilities     14,280       (5,298 )     (580 ) Life insurance gains     0       (433 )     (585 ) Securities (gains) losses     (71 )     (217 )     52   Gains on sales of premises and equipment     (3,536 )     0       0   Gain on disposal of premises and equipment     (71 )     0       (216 ) Net gain on sale of or write-down of foreclosed assets     0       0       (83 ) Net Cash Provided by Operating Activities     107,744       80,702       96,629   Investing Activities:                         Net (disbursements) repayments of loans     (126,682 )     79,396       80,985   Proceeds from life insurance policies     0       1,273       1,169   Purchases of debt securities available for sale     (2,102,983 )     (970,542 )     (854,555 ) Proceeds from sale/maturity/calls of debt securities available for sale     1,260,846       631,016       353,327   Proceeds from maturity/calls of debt securities held to maturity     218,164       238,450       167,029   Proceeds from sale of equity securities     0       1,797       0   Purchases of premises and equipment     (2,200 )     (3,994 )     (3,123 ) Proceeds from sale of premises and equipment     3,819       0       446   Proceeds from sale of foreclosed assets     114       307       1,159   Net Cash Used in Investing Activities     (748,922 )     (22,297 )     (253,563 ) Financing Activities:                         Net change in deposits     875,358       (54,218 )     39,226   Net change in short-term borrowings     71,617       (20,319 )     (7,224 ) Exercise of stock options     2,838       13,699       13,373   Retirement of common stock     (16,496 )     (488 )     (524 ) Common stock dividends paid     (44,285 )     (43,942 )     (42,635 ) Net Cash Provided by (Used in) Financing Activities     889,032       (105,268 )     2,216   Net Change In Cash and Due from Banks     247,854       (46,863 )     (154,718 ) Cash and Due from Banks at Beginning of Period     373,421       420,284       575,002   Cash and Due from Banks at End of Period   $ 621,275     $ 373,421     $ 420,284   Supplemental Cash Flow Disclosures:                         Supplemental disclosure of noncash activities:                         Right-of-use assets acquired in exchange for operating lease liabilities   $ 7,697     $ 23,587     $ 0   Amount recognized upon initial adoption of ASU 2016-02     0       15,325       0   Securities purchases pending settlement     29,000       0       0   Supplemental disclosure of cash flow activities:                         Cash paid for amounts included in operating lease liabilities     6,516       5,123       0   Interest paid for the period     1,830       1,898       1,932   Income tax payments for the period     26,462       24,491       13,627       For the Years Ended December 31,       2023     2022     2021       (In thousands)   Net Income   $ 161,768     $ 122,034     $ 86,509   Other comprehensive income (loss):                         Changes in net unrealized losses/gains on debt securities available for sale     93,326       (434,107 )     (91,891 ) Deferred tax (expense) benefit     (27,591 )     128,338       27,167   Reclassification of losses (gains) included in net income     125       -       (34 ) Deferred tax (benefit on losses) expense on gains included in net income     (37 )     -       10   Changes in unrealized losses/gains on debt securities available for sale, net of tax     65,823       (305,769 )     (64,748 ) Total Comprehensive Income (Loss)   $ 227,591     $ (183,735 )   $ 21,761     See accompanying notes to consolidated financial statements.   -54- WESTAMERICA BANCORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY                             Accumulated                       Common                     Other                       Shares     Common     Deferred     Comprehensive     Retained               Outstanding     Stock     Compensation     Income (Loss)     Earnings     Total       (In thousands, except per share data)                                                     Balance, December 31, 2020     26,807     $ 466,006     $ 35     $ 114,412     $ 264,356     $ 844,809   Net income for the year 2021                               86,509       86,509   Other comprehensive loss                             (64,748 )             (64,748 ) Exercise of stock options     53       3,017                               3,017   Restricted stock activity     9       526                               526   Stock based compensation     -       1,419                               1,419   Stock awarded to employees     1       106                               106   Retirement of common stock     (4 )     (66 )                     (166 )     (232 ) Dividends ($1.65 per share)                                     (44,304 )     (44,304 ) Balance, December 31, 2021     26,866       471,008       35       49,664       306,395       827,102   Net income for the year 2022                               122,034       122,034   Other comprehensive loss                             (305,769 )             (305,769 ) Exercise of stock options     40       2,255                               2,255   Restricted stock activity     8       492                               492   Stock based compensation     -       1,309                               1,309   Stock awarded to employees     2       87                               87   Retirement of common stock     (3 )     (65 )                     (153 )     (218 ) Dividends ($1.68 per share)                                     (45,182 )     (45,182 ) Balance, December 31, 2022     26,913       475,086       35       (256,105 )     383,094       602,110   Net income for the year 2023                               161,768       161,768   Other comprehensive income                         65,823             65,823   Exercise of stock options     22       950                         950   Restricted stock activity     9       508                         508   Stock based compensation     -       1,356                               1,356   Stock awarded to employees     1       80                               80   Retirement of common stock     (274 )     (4,844 )                 (8,903 )     (13,747 ) Dividends ($1.72 per share)                                     (45,954 )     (45,954 ) Balance, December 31, 2023     26,671     $ 473,136     $ 35     $ (190,282 )   $ 490,005     $ 772,894   See accompanying notes to consolidated financial statements. -55- WESTAMERICA BANCORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS     For the Years Ended December 31,       2023     2022     2021   Operating Activities:   (In thousands)   Net income   $ 161,768     $ 122,034     $ 86,509   Adjustments to reconcile net income to net cash provided by operating activities:                         Depreciation and amortization/accretion     11,774       16,565       16,617   Reversal of Provision for credit losses     (1,150 )     -       -   Net amortization of deferred loan fees     (573 )     (1,704 )     (5,576 ) Stock option compensation expense     1,356       1,309       1,419   Life insurance gains     (279 )     (930 )     -   Securities losses (gains)     125       -       (34 ) Net changes in:                         Interest income receivable     (1,010 )     (18,037 )     (2,499 ) Net deferred taxes     (1,995 )     697       3,899   Other assets     (3,443 )     (2,415 )     (3,534 ) Income taxes payable     (869 )     3,020       (1,054 ) Interest expense payable     (12 )     (10 )     (72 ) Other liabilities     (7,484 )     (6,827 )     (6,940 ) Net Cash Provided by Operating Activities     158,208       113,702       88,735   Investing Activities:                         Net repayments of loans     90,192       108,107       193,755   Proceeds from life insurance policies     604       3,041       -   Purchases of debt securities available for sale     -       (636,228 )     (1,909,370 ) Proceeds from sale/maturity/calls of debt securities available for sale     416,447       500,160       1,204,455   Purchases of debt securities held to maturity     -       (718,940 )     -   Proceeds from maturity/calls of debt securities held to maturity     43,518       111,059       206,400   Purchase of Federal Reserve Bank stock     (2,326 )     -       -   Proceeds from redemption of Federal Reserve Bank stock     -       2,326       -   Purchases of premises and equipment     (1,161 )     (811 )     (1,324 ) Net Cash Provided by (Used in) Investing Activities     547,274       (631,286 )     (306,084 ) Financing Activities:                         Net change in deposits     (751,023 )     (188,666 )     725,977   Net change in short-term borrowings     370       (88,454 )     43,701   Exercise of stock options     950       2,255       3,017   Retirement of common stock     (13,747 )     (218 )     (232 ) Common stock dividends paid     (45,954 )     (45,182 )     (44,304 ) Net Cash (Used in) Provided by Financing Activities     (809,404 )     (320,265 )     728,159   Net Change In Cash and Due from Banks     (103,922 )     (837,849 )     510,810   Cash and Due from Banks at Beginning of Period     294,236       1,132,085       621,275   Cash and Due from Banks at End of Period   $ 190,314     $ 294,236     $ 1,132,085   Supplemental Cash Flow Disclosures:                         Supplemental disclosure of noncash activities:                         Right-of-use assets acquired in exchange for operating lease liabilities   $ 8,866     $ 3,533     $ 5,105   Supplemental disclosure of cash flow activities:                         Cash paid for amounts included in operating lease liabilities     6,217       6,037       6,309   Interest paid for the period     3,902       1,935       2,027   Income tax payments for the period     64,017       39,840       27,673   See accompanying notes to consolidated financial statements. -56-     WESTAMERICA BANCORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   Note 1: Business and Accounting Policies   Westamerica Bancorporation, a registered bank holding company (the “Company”), provides a full range of banking services to corporate and individual customers in Northern and Central California through its wholly-owned subsidiary bank, Westamerica Bank (the “Bank”). The Bank is subject to competition from both financial and nonfinancial institutions and to the regulations of certain agencies and undergoes periodic examinations by those regulatory authorities. All of the financial service operations are considered by management to be aggregated in 1one reportable operating segment.   The Company has evaluated events and transactions subsequent to the balance sheet date. Based on this evaluation, the Company is not aware of any events or transactions that occurred subsequent to the balance sheet date but prior to filing that would require recognition or disclosure in its consolidated financial statements. Certain amounts in prior periods have been reclassified to conform to the current presentation.   Management continues to actively evaluate the impacts of inflation, the Federal Reserve’s monetary policy and climate changes on the Company’s business. During the first half of 2023, the banking industry experienced significant volatility with several bank failures. Industrywide concerns developed related to liquidity, deposit outflows and unrealized losses on investment debt securities. These events could adversely affect the Company’s ability to effectively fund its operations. Any one or a combination of such risk factors, or other factors, could materially adversely affect the Company's business, financial condition, results of operations and prospects. The extent of the impact on the Company’s results of operations, cash flow, liquidity, and financial performance, as well as the Company’s ability to execute near- and long-term business strategies and initiatives, will depend on numerous evolving factors and future developments, which are highly uncertain and cannot be reasonably predicted. Summary of Significant Accounting Policies   The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The accounting policies, along with the disclosures presented in the other financial statement notes and in this discussion, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined. Based on the valuation techniques used and the sensitivity of financial statement amounts to the methods, assumptions, and estimates underlying those amounts, it is reasonably possible conditions could change materially affecting results of operations and financial conditions. The following is a summary of significant policies used in the preparation of the accompanying financial statements.   Accounting Estimates. Certain accounting policies underlying the preparation of these financial statements require Management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available as of the date of the financial statements; accordingly, as this information changes, the financial statements could reflect different estimates, assumptions, and judgments and as such have a greater possibility of producing results that could be materially different than originally reported. Estimates, assumptions, and judgments are necessary when assets and liabilities are required to be recorded at fair value, when a decline in fair value of an asset not carried on the financial statements at fair value warrants an impairment writedown or valuation reserve to be established, or when an asset or liability needs to be recorded contingent upon a future event.  The allowance for credit losses accounting is an area requiring the most subjective or complex judgments, and as such could be most subject to revision as new information becomes available.  A discussion of the factors affecting the accounting for the allowance for credit losses on loans is included in the following “Loans” and “Allowance for Credit Losses” sections. Carrying assets and liabilities at fair value inherently results in financial statement volatility.  The fair values and the information used to record valuation adjustments for certain assets and liabilities are based either on quoted market prices or are provided by other third party sources, when available.  The “Securities” section discusses the factors that may affect the valuation of the Company’s securities. Although the estimates contemplate current conditions actual results can change.   Principles of Consolidation. The consolidated financial statements include the accounts of the Company and all the Company’s subsidiaries. Significant intercompany transactions have been eliminated in consolidation. The Company does not maintain or conduct transactions with any unconsolidated special purpose entities.   Cash. Cash includes Due From Banks balances which are readily convertible to known amounts of cash and are generally 90 days or less from maturity at the time of initiation, presenting insignificant risk of changes in value due to interest rate changes.   Equity Securities. Equity securities consist of marketable equity securities and mutual funds which are recorded at fair value. Unrealized gains and losses are included in net income. There were no equity securities at December 31, 2023 and December 31, 2022.   - 57- Debt Securities. Debt securities consist of the U.S. Treasury, securities of government sponsored entities, states, counties, municipalities, corporations, agency and non-agency mortgage-backed securities, collateralized loan obligations and commercial paper. Securities transactions are recorded on a trade date basis. The Company classifies its debt securities in one of three categories: trading, available for sale or held to maturity. Trading securities are bought and held principally for the purpose of selling them in the near term. Trading securities are recorded at fair value with unrealized gains and losses included in net income. Held to maturity debt securities are those securities which the Company has the ability and intent to hold until maturity. Held to maturity debt securities are recorded at cost, adjusted for the amortization of premiums or accretion of discounts. Securities not included in trading or held to maturity are classified as available for sale debt securities. Available for sale debt securities are recorded at fair value. Unrealized gains and losses, net of the related tax effect, on available for sale debt securities are included in accumulated other comprehensive income. Accrued interest is recorded within other assets and reversed against interest income if it is not received.    - 55- The Company utilizes third-party sources to value its investment securities; securities individually valued using quoted prices in active markets are classified as Level 1 assets in the fair value hierarchy, and securities valued using quoted prices in active markets for similar securities (commonly referred to as “matrix” pricing) are classified as Level 2 assets in the fair value hierarchy. The Company validates the reliability of third-party provided values by comparing individual security pricing for securities between more than one third-party source. When third-party information is not available, valuation adjustments are estimated in good faith by Management and classified as Level 3 in the fair value hierarchy.   The Company follows the guidance issued by the Board of Governors of the Federal Reserve System, “Investing in Securities without Reliance on Nationally Recognized Statistical Rating Agencies” (SR 12-15) and other regulatory guidance when performing investment security pre-purchase analysis or evaluating investment securities for credit loss. Credit ratings issued by recognized rating agencies are considered in the Company’s analysis only as a guide to the historical default rate associated with similarly-rated bonds.   To the extent that debt securities in the held-to-maturity portfolio share common risk characteristics, estimated expected credit losses are calculated in a manner like that used for loans held for investment. That is, for pools of such securities with common risk characteristics, the historical lifetime probability of default and severity of loss in the event of default is derived or obtained from external sources and adjusted for the expected effects of reasonable and supportable forecasts over the expected lives of the securities on those historical credit losses. Expected credit loss on each security in the held-to-maturity portfolio that do not share common risk characteristics with any of the pools of debt securities is individually evaluated and a reserve for credit losses is established at the difference between the discounted value of the expected future cash flows, based on the original effective interest rate, and the recorded amortized cost basis of the security. For certain classes of debt securities, the bank considers the history of credit losses, current conditions and reasonable and supportable forecasts, which may indicate that the expectation that nonpayment of the amortized cost basis is or continues to be zero. Therefore, for those securities, the bank does not record expected credit losses.   Available for sale debt securities in unrealized loss positions are evaluated for credit related loss at least quarterly. For available for sale debt securities, a decline in fair value due to credit loss results in recording an allowance for credit losses to the extent the fair value is less than the amortized cost basis. Declines in fair value that have not been recorded through an allowance for credit losses, such as declines due to changes in market interest rates, are recorded through other comprehensive income, net of applicable taxes. Although these evaluations involve significant judgment, an unrealized loss in the fair value of a debt security is generally considered to not be related to credit when the fair value of the security is below the carrying value primarily due to changes in risk-free interest rates, there has not been significant deterioration in the financial condition of the issuer, and the Company does not intend to sell nor does it believe it will be required to sell the security before the recovery of its cost basis.    If the Company intends to sell a debt security or more likely than not will be required to sell the security before recovery of its amortized cost basis, the debt security is written down to its fair value and the write down is charged against the allowance for credit losses with any incremental loss reported in earnings.   Purchase premiums are amortized to the earliest call date and purchase discounts are amortized to maturity as an adjustment to yield using the effective interest method. Unamortized premiums, unaccreted discounts, and early payment premiums are recognized as a component of gain or loss on sale upon disposition of the related security. Interest and dividend income are recognized when earned. Realized gains and losses from the sale of available for sale debt securities are included in earnings using the specific identification method. - 58- Nonmarketable Equity Securities. Nonmarketable equity securities include securities that are not publicly traded, such as Visa Class B common stock, and securities acquired to meet regulatory requirements, such as Federal Reserve Bank stock, which are restricted. These restricted securities are accounted for under the cost method and are included in other assets. The Company reviews those assets accounted for under the cost method at least quarterly. The Company’s review typically includes an analysis of the facts and circumstances of each investment, the expectations for the investment’s cash flows and capital needs, the viability of its business model and any exit strategy. When the review indicates that impairment exists the asset value is reduced to fair value. The Company recognizes the estimated loss in noninterest income.   Loans. Loans are stated at the principal amount outstanding, net of unearned discount and unamortized deferred fees and costs. Interest is accrued daily on the outstanding principal balances and included in other assets. Loans which are more than 90 days delinquent with respect to interest or principal, unless they are well secured and in the process of collection, and other loans on which full recovery of principal or interest is in doubt, are placed on nonaccrual status. Interest previously accrued on loans placed on nonaccrual status is charged against interest income. In addition, some loans secured by real estate and commercial loans to borrowers experiencing financial difficulties are placed on nonaccrual status even though the borrowers continue to repay the loans as scheduled. When the ability to fully collect nonaccrual loan principal is in doubt, payments received are applied against the principal balance of the loans on a cost-recovery method until such time as full collection of the remaining recorded balance is expected. Any additional interest payments received after that time are recorded as interest income on a cash basis. Nonaccrual loans are reinstated to accrual status when none of the loan’s principal and interest is past due and improvements in credit quality eliminate doubt as to the full collectability of both principal and interest, or the loan otherwise becomes well secured and in the process of collection. Certain consumer loans or auto receivables are charged off against the allowance for credit losses when they become 120 days past due.   - 56- A troubled debt restructuring (“TDR”) occurs when the Company, for reasons related to a borrower’s financial difficulties, grants a concession to the borrower it would not otherwise consider. The Company follows its general nonaccrual policy for TDRs. Performing TDRs are reinstated to accrual status when improvements in credit quality eliminate the doubt as to full collectability of both principal and interest. Under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), banks may elect to deem that loan modifications do not result in TDRs if they are (1) related to the novel coronavirus disease; (2) executed on a loan that was not more than 30 days past due as of December 31, 2019; and (3) executed between March 1, 2020, and the earlier of (A) 60 days after the date of termination of the National Emergency or (B) December 31, 2020.The Consolidated Appropriations Act, 2021, extended the period during which banks may elect to deem that qualified loan modifications do not result in TDR classification through January 1, 2022.    Allowance for Credit Losses. The Company extends loans to commercial and consumer customers primarily in Northern and Central California. These lending activities expose the Company to the risk borrowers will default, causing loan losses. The Company’s lending activities are exposed to various qualitative risks. All loan segments are exposed to risks inherent in the economy and market conditions. Significant risk characteristics related to the commercial loan segment include the borrowers’ business performance and financial condition, and the value of collateral for secured loans. Significant risk characteristics related to the commercial real estate segment include the borrowers’ business performance and the value of properties collateralizing the loans. Significant risk characteristics related to the construction loan segment include the borrowers’ performance in successfully developing the real estate into the intended purpose and the value of the property collateralizing the loans. Significant risk characteristics related to the residential real estate segment include the borrowers’ financial wherewithal to service the mortgages and the value of the property collateralizing the loans. Significant risk characteristics related to the consumer loan segment include the financial condition of the borrowers and the value of collateral securing the loans.   The preparation of these financial statements requires Management to estimate the amount of expected losses over the expected contractual life of ourthe Bank’s existing loan portfolio and establish an allowance for credit losses. Loan agreements generally include a maturity date, and the Company considers the contractual life of a loan agreement to extend from the date of origination to the contractual maturity date. In estimating credit losses, Management must exercise significant judgment in evaluating information deemed relevant. The amount of ultimate losses on the loan portfolio can vary from the estimated amounts. Management follows a systematic methodology to estimate loss potential in an effort to reduce the differences between estimated and actual losses.   The allowance for credit losses is established through provisions for credit losses charged to income. Losses on loans are charged to the allowance for credit losses when all or a portion of the recorded amount of a loan is deemed to be uncollectible. Recoveries of loans previously charged off are credited to the allowance when realized. The Company’s allowance for credit losses is maintained at a level considered adequate to provide for expected losses based on historical loss rates adjusted for current and expected conditions over a forecast period. These include conditions unique to individual borrowers, as well as overall credit loss experience, the amount of past due, nonperforming and classified loans, recommendations of regulatory authorities, prevailing economic conditions, or credit protection agreements and other factors.   Loans that share common risk characteristics are segregated into pools based on common characteristics, which is primarily determined by loan, borrower, or collateral type. Historical loss rates are determined for each pool. For consumer installment loans, primarily secured by automobiles, historical loss rates are determined using a vintage methodology, which tracks losses based on period of origination. For commercial, construction, and commercial real estate, historical loss rates are determined using an open pool methodology where losses are tracked over time for all loans included in the pool at the historical measurement date. Historical loss rates are adjusted for factors that are not reflected in the historical loss rates that are attributable to national or local economic or industry trends which have occurred but have not yet been recognized in past loan charge-off history, estimated losses based on management’s reasonable and supportable expectation of economic trends over a forecast horizon of up to two years, and other factors that impact credit loss expectations that are not reflected in the historical loss rates. Other factors include, but are not limited to, the effectiveness of the Company’s loan review system, adequacy of lending Management and staff, loan policies and procedures, problem loan trends, and concentrations of credit. At the end of the two-year forecast period loss rates revert immediately to the historical loss rates. The results of this analysis are applied to the amortized cost of the loans included within each pool.   - 59- Loans that do not share risk characteristics with other loans in the pools are evaluated individually. A loan is considered ‘collateral-dependent’ when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. A credit loss reserve for collateral-dependent loans is established at the difference between the amortized cost basis in the loan and the fair value of the underlying collateral adjusted for costs to sell. For other individually evaluated loans that are not collateral dependent, a credit loss reserve is established at the difference between the amortized cost basis in the loan and the present value of expected future cash flows discounted at the loan’s effective interest rate. The impact of an expected TDR modification to be made to loans to borrowers experiencing financial difficulty is included in the allowance for credit losses when management determines a TDRsuch modification is likely.   - 57- Accrued interest is recorded in other assets and is excluded from the estimation of expected credit loss.  Accrued interest is reversed through interest income when amounts are determined to be uncollectible, which generally occurs when the underlying receivable is placed on nonaccrual status or charged off. Liability for Off-Balance Sheet Credit Exposures. Off-balance sheet credit exposures relate to letters of credit and unfunded loan commitments for commercial, construction and consumer loans. The Company maintains a separate allowance for credit losses from off-balance-sheet credit exposures, which is included within other liabilities on the consolidated statements of financial condition. Increases or reductions to the Company’s allowance for credit losses from off-balance sheet credit exposures are recorded in other expenses. Management estimates the amount of expected losses by estimating expected usage exposures that are not unconditionally cancellable by the Company and applying the loss factors used in the allowance for credit loss methodology to estimate the liability for credit losses related to unfunded commitments. No credit loss estimate is reported for off-balance-sheet credit exposures that are unconditionally cancellable by the Company or for undrawn amounts under such arrangements that may be drawn prior to the cancellation of the arrangement.   Nonrefundable fees and certain costs associated with originating or acquiring loans are deferred and amortized as an adjustment to interest income over the contractual loan lives. Upon prepayment, unamortized loan fees, net of costs, are immediately recognized in interest income. Other fees, including those collected upon principal prepayments, are included in interest income when received. Loans held for sale are identified upon origination and are reported at the lower of cost or market value on an aggregate loan basis. Other Real Estate Owned. Other real estate owned is comprised of property acquired through foreclosure proceedings, acceptances of deeds-in-lieu of foreclosure and, if applicable, vacated bank properties. Losses recognized at the time of acquiring property in full or partial satisfaction of debt are charged against the allowance for credit losses. Other real estate owned is recorded at the fair value of the collateral, generally based upon an independent property appraisal, less estimated disposition costs. Losses incurred subsequent to acquisition due to any decline in annual independent property appraisals are recognized as noninterest expense. Routine holding costs, such as property taxes, insurance and maintenance, and losses from sales and dispositions, are recognized as noninterest expense.   Premises and Equipment. Premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed substantially on the straight-line method over the estimated useful life of each type of asset. Estimated useful lives of premises and equipment range from 20 to 50 years and from 3 to 20 years, respectively. Leasehold improvements are amortized over the terms of the lease or their estimated useful life, whichever is shorter.   Revenue Recognition.  The Company recognizes revenue as it is earned based on contractual terms, as transactions occur, or as services are provided and collectability is reasonably assured. In certain circumstances, noninterest income is reported net of associated expenses that are directly related to variable volume-based sales or revenue sharing arrangements or when the Company acts on an agency basis for others.   Life Insurance Cash Surrender Value.  The Company has purchased life insurance policies on certain directors and officers as well as acquired such assets as part of the acquisition of other banks. Company owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.  These assets are included in other assets on the consolidated balance sheets.   Intangible Assets. Intangible assets are comprised of goodwill, core deposit intangibles and other identifiable intangibles acquired in business combinations. Intangible assets with finite useful lives are amortized on an accelerated basis over their respective estimated useful lives not exceeding 15 years. Intangible assets with a finite useful life are reviewed at least annually for impairment. Any goodwill and any intangible asset acquired in a business combination determined to have an indefinite useful life is not amortized and is reviewed at least annually for impairment. If management determines, based on a qualitative review of events and circumstances, that it is more likely than not that the carrying value of the intangible asset will not be realized, an impairment test is performed to determine whether the asset’s fair value is less than the carrying amount of the asset.      - 60- Impairment of Long-Lived Assets. The Company reviews its long-lived and certain intangible assets for impairment whenever events or changes indicate that the carrying amount of an asset may not be recoverable. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.   - 58- Income Taxes. The Company and its subsidiaries file consolidated tax returns. The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes, resulting in two components of income tax expense: current and deferred. Current income tax expense approximates taxes to be paid or refunded for the current period. The Company determines deferred income taxes using the balance sheet method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and recognizes enacted changes in tax rates and laws in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized subject to Management’s judgment that realization is more likely than not. A tax position that meets the more likely than not recognition threshold is measured to determine the amount of benefit to recognize. The tax position is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon settlement. Interest and penalties are recognized as a component of income tax expense.   Stock-based Stock-Based Compensation. The Company applies FASB ASC 718 – Compensation – Stock Compensation, to account for stock based awards granted to employees using the fair value method. The Company recognizes compensation expense for restricted performance share grants over the relevant attribution period. Restricted performance share grants have no exercise price, therefore, the intrinsic value is measured using an estimated per share price at the vesting date for each restricted performance share. The estimated per share price is adjusted during the attribution period to reflect actual stock price performance. The Company’s obligation for unvested outstanding restricted performance share grants is classified as a liability until the vesting date due to a cash settlement feature, at which time the issued shares become classified as shareholders’ equity.   Other. Securities and other property held by the Bank in a fiduciary or agency capacity are not included in the financial statements since such items are not assets of the Company or its subsidiaries.   Recently Adopted Accounting Standards   In the year ended 2020,December 31, 2021, the Company adopted the following new accounting guidance:   FASB ASU 20162019-13,12, Financial Instruments – Credit LossesIncome Taxes (Topic 326740): Measurement of Credit Losses on Financial Instruments,Simplifying the Accounting for Income Taxes, was issued on June 16, 2016.December 2019.  The ASU significantly changed estimates for credit lossesis intended to simplify various aspects related to financial assets measured at amortized costaccounting for income taxes, eliminates certain exceptions to the general principles in ASC Topic 740 related to intra-period tax allocation, simplifies when companies recognize deferred taxes in an interim period, and clarifies certain other contracts. For estimating credit losses, the FASB replaced the incurred loss model withaspects of the current expected credit loss (CECL) model, which accelerated recognition of credit losses.  Additionally, credit losses relatingguidance to debt securities available-for-sale are recorded through an allowancepromote consistent application. This guidance effective for credit losses under the new standard. The Company is also required to provide additional disclosures related to the financial assetspublic entities for fiscal years beginning after December 15, 2020, and for interim period within the scope of the new standard. those fiscal years, with early adoption permitted. The Company adopted the ASU provisions on a modified retrospective basis on January 1, 2020.2021 Management evaluated available data, defined portfolio segmentsand the adoption of loans with similar attributes, and selected loss estimate models for each identified loan portfolio segment. Management measured historical loss rates for each portfolio segment. Management also segmented debt securities held to maturity, selected methods to estimate losses for each segment, and measuredthe ASU provisions did not have a loss estimate. Agency mortgage-backed securities were assigned no credit loss allowance due tosignificant impact on the perceived backing of government sponsored entities. Municipal securities were evaluated for risk of default based on credit rating and remaining term to maturity using Moody’s risk of default factors; Moody’s loss upon default factors were applied to the assumed defaulted principal amounts to estimate the amount for credit loss allowance. The adjustment to the allowance for credit losses was recorded through an offsetting after-tax adjustment to shareholders’ equity. The implementing entry increased allowance for credit losses by $2,017 thousand, reduced allowance for credit losses for unfunded credit commitments by $2,107 thousand and increased retained earnings by $52 thousand.Company’s consolidated financial statements.   [The remainder of this page intentionally left blank] -In the year ended 59December 31, 2023, - Thethe Company adopted the following table summarizes the impact of adoption of ASU 2016-13.new accounting guidance:     January 1, 2020       Balance,     Impact of     As reported       prior to adoption     adoption of     under       of ASU 2016-13     ASU 2016-13     ASU 2016-13       (In thousands)   Assets:                         Allowance for credit losses on loans:                         Commercial   $ 4,959     $ 3,385     $ 8,344   Commercial real estate     4,064       618       4,682   Construction     109       (31 )     78   Residential real estate     206       (132 )     74   Consumer and other installment loans     6,445       1,878       8,323   Unallocated     3,701       (3,701 )     0   Allowance for credit losses on loans:   $ 19,484     $ 2,017     $ 21,501                             Allowance for credit losses on debt securities held to maturity     0       16       16                             Liabilities:                         Allowance for credit losses for unfunded commitments     2,160       (2,107 )     53     FASB ASU 20182022-1302, Financial Instruments - Fair Value MeasurementsCredit Losses (Topic 820326): Disclosure Framework - Changes toTroubled Debt Restructurings and Vintage Disclosures, issued March 2022, eliminates the Disclosure Requirementsrecognition and measurement guidance for Fair Value Measurement, was issued August 2018.  troubled debt restructurings and requires enhanced disclosures about loan modifications for borrowers experiencing financial difficulty. This ASU also requires enhanced disclosure for loans that have been charged off. The ASU is part of the disclosure framework project, where the primary focus is to improve the effectiveness of disclosures in the financial statements.  The ASU removes, modifies and adds disclosure requirements related to Fair Value Measurements. The provisions of the ASU werebecame effective January 1, 20202023 with the option to early adopt any removed or modified disclosures upon issuance of the ASU.under a prospective approach. The Company early adopted the provisions to remove the recognition and measurement guidance for troubled debt restructurings and/or modify relevant disclosures in the “Fair Value Measurements”“Loans” note to the unaudited consolidated financial statements. The requirement to include additional disclosures was adopted by the Company January 1, 2020.2023.  The additional disclosures did not affect the financial results upon adoption.   Recently Issued Accounting Standards FASB ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, was issued December 2019.  The ASU is intended to simplify various aspects related to accounting for income taxes, eliminates certain exceptions to the general principles in ASC Topic 740 related to intra-period tax allocation, simplifies when companies recognize deferred taxes in an interim period, and clarifies certain aspects of the current guidance to promote consistent application. This guidance effective for public entities for fiscal years beginning after December 15, 2020, and for interim period within those fiscal years, with early adoption permitted. This guidance is applicable to the Company’s fiscal year beginning January 1, 2021 and is not expected to have a significant impact on the Company’s consolidated financial statements.   FASB ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, was issued March 2020. The ASU provides optional expedients and exceptions for applying GAAP to loan and lease agreements, derivative contracts, and other transactions affected by the anticipated transition away from LIBOR toward new interest rate benchmarks. For transactions that are modified because of reference rate reform and that meet certain scope guidance (i) modifications of loan agreements should be accounted for by prospectively adjusting the effective interest rate and the modification will be considered "minor" so that any existing unamortized origination fees/costs would carry forward and continue to be amortized and (ii) modifications of lease agreements should be accounted for as a continuation of the existing agreement with no reassessments of the lease classification and the discount rate or remeasurements of lease payments that otherwise would be required for modifications not accounted for as separate contracts. ASU 2020-04 also provides numerous optional expedients for derivative accounting. In December 2022, the FASB issued ASU 2022-06,Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848.” The ASU 2022-06 deferred the sunset date of ASU 2020-04 is effective March 12, 2020 throughto December 31, 2022.2024. An entity may elect to apply ASU 2020-04 for contract modifications as of January 1, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a Topic or an Industry Subtopic within the Codification, the amendments in this ASU must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic. The Company does not expect any material impact on its consolidated financial statements since the Company has an insignificant number of financial instruments applicable to this ASU. statements.   - 6061-     FASB ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, was issued June 2022. The ASU clarifies the guidance in Topic 820 when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security. Additionally, the ASU requires specific disclosures related to equity securities that are subject to contractual sale restrictions. The required disclosures include (1) the fair value of such equity securities reflected in the balance sheet, (2) the nature and remaining duration of the corresponding restrictions, and (3) any circumstances that could cause a lapse in the restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. FASB ASU 2023-02, Investments – Equity Method and Joint Ventures (Topic 323):Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, was issued March 2023. The ASU expands the use of the proportional amortization method of accounting, currently only available to investments in low-income housing tax credit structures, to equity investments in other tax credit structures that meet certain criteria. The ASU also requires additional disclosures for any tax credit program where the proportional amortization method is elected. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.   Note 2: Investment Securities The Company’s marketable equity securities were sold in the third quarter 2019. During the year ended December 31, 2019, the Company recognized gross unrealized holding gains of $50 thousand in earnings. The Company had 0 marketable equity securities at December 31, 2020 and December 31, 2019. Effective January 1, 2020, the Company adopted FASB ASU 2016-13,Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Upon adoption of the ASU the Company recorded allowance for credit losses for debt securities held to maturity of $16 thousand. During the fourth quarter ended December 31, 2020, the Company recorded $7 thousand of reversal of provision for credit loss on debt securities held to maturity, resulting in the balance of $9 thousand allowance for credit losses for debt securities held to maturity.   An analysis of the amortized cost and fair value by major categories of debt securities available for sale, which are carried at fair value with net unrealized gains (losses) reported on an after-tax basis as a component of cumulativeaccumulated other comprehensive income, and debt securities held to maturity, which are carried at amortized cost, before allowance for credit losses of $1 thousand at $9December 31, 2023 and December 31, 2022, follows. In accordance with GAAP, unrealized gains and losses on held to maturity securities have not thousand, follows:been recognized in the Company’s financial statements.       At December 31, 2020               Gross     Gross               Amortized     Unrealized     Unrealized     Fair       Cost     Gains     Losses     Value       (In thousands)   Debt securities available for sale                                 Agency residential mortgage-backed securities ("MBS")   $ 630,174     $ 22,779     $ (1 )   $ 652,952   Securities of U.S. Government entities     154       0       0       154   Obligations of states and political subdivisions     105,679       5,332       (1 )     111,010   Corporate securities     1,986,995       131,025       (42 )     2,117,978   Commercial paper     24,983       7       0       24,990   Collateralized loan obligations     1,152,766       4,433       (1,098 )     1,156,101   Total debt securities available for sale     3,900,751       163,576       (1,142 )     4,063,185   Debt securities held to maturity                                 Agency residential MBS     240,332       6,852       (32 )     247,152   Non-agency residential MBS     1,344       26       0       1,370   Obligations of states and political subdivisions     273,922       7,243       0       281,165   Total debt securities held to maturity     515,598       14,121       (32 )     529,687   Total   $ 4,416,349     $ 177,697     $ (1,174 )   $ 4,592,872   [The remainder of this page intentionally left blank]     At December 31, 2023               Gross     Gross               Amortized     Unrealized     Unrealized     Fair       Cost     Gains     Losses     Value       (In thousands)   Debt securities available for sale:                                 Agency residential mortgage-backed securities ("MBS")   $ 258,150     $ 6     $ (18,702 )   $ 239,454   Securities of U.S. Government sponsored entities     308,768       2       (13,851 )     294,919   Obligations of states and political subdivisions     72,679       42       (1,438 )     71,283   Corporate securities     2,129,103       480       (220,035 )     1,909,548   Collateralized loan obligations     1,501,248       830       (17,481 )     1,484,597   Total debt securities available for sale     4,269,948       1,360       (271,507 )     3,999,801   Debt securities held to maturity:                                 Agency residential MBS     78,565       17       (5,270 )     73,312   Obligations of states and political subdivisions     71,182       47       (335 )     70,894   Corporate securities     728,650       84       (23,378 )     705,356   Total debt securities held to maturity     878,397       148       (28,983 )     849,562   Total   $ 5,148,345     $ 1,508     $ (300,490 )   $ 4,849,363       - 6162-       At December 31, 2019     At December 31, 2022         Gross   Gross             Gross   Gross         Amortized   Unrealized   Unrealized   Fair     Amortized   Unrealized   Unrealized   Fair     Cost     Gains     Losses     Value     Cost     Gains     Losses     Value     (In thousands)     (In thousands)   Debt securities available for sale                   U.S. Treasury securities   $ 19,999     $ 1     $ 0     $ 20,000   Debt securities available for sale:   Agency residential MBS   $ 311,089     $ 4     $ (25,045 )   $ 286,048   Securities of U.S. Government sponsored entities   111,251     14     (98 )   111,167     306,336     3     (15,486 )   290,853   Agency residential MBS   934,592     10,996     (5,838 )   939,750   Agency commercial MBS   3,711     0     (3 )   3,708   Securities of U.S. Government entities   553     0     (9 )   544   Obligations of states and political subdivisions   159,527     3,656     (44 )   163,139     84,024     59     (2,079 )   82,004   Corporate securities   1,805,479     29,183     (879 )   1,833,783     2,406,566     1,032     (307,643 )   2,099,955   Collateralized loan obligations     6,748       7       0       6,755       1,587,326       527       (14,970 )     1,572,883   Total debt securities available for sale     3,041,860       43,857       (6,871 )     3,078,846       4,695,341       1,625       (365,223 )     4,331,743   Debt securities held to maturity                   Debt securities held to maturity:   Agency residential MBS   353,937     766     (2,235 )   352,468     104,852     13     (7,503 )   97,362   Non-agency residential MBS   2,354     22     0     2,376   Obligations of states and political subdivisions     381,781       7,672       (1 )     389,452     89,208     73     (538 )   88,743   Corporate securities     721,854       -       (34,448 )     687,406   Total debt securities held to maturity     738,072       8,460       (2,236 )     744,296       915,914       86       (42,489 )     873,511   Total   $ 3,779,932     $ 52,317     $ (9,107 )   $ 3,823,142     $ 5,611,255     $ 1,711     $ (407,712 )   $ 5,205,254     The amortized cost and fair value of debt securities by contractual maturity are shown in the following tablestable s at the dates indicated:     At December 31, 2020     At December 31, 2023     Debt Securities Available   Debt Securities Held     Debt Securities Available   Debt Securities Held     for Sale     to Maturity     for Sale     to Maturity     Amortized   Fair   Amortized   Fair     Amortized   Fair   Amortized   Fair     Cost     Value     Cost     Value     Cost     Value     Cost     Value     (In thousands)     (In thousands)   Maturity in years:                     1 year or less   $ 212,140     $ 213,715     $ 54,526     $ 54,927     $ 52,703     $ 52,357     $ 15,117     $ 15,095   Over 1 to 5 years   922,170     974,438     129,786     133,195     756,658     721,179     312,847     307,557   Over 5 to 10 years   1,767,747     1,851,184     89,610     93,043       1,701,189       1,502,214       471,868       453,598   Over 10 years     368,520       370,896       0       0   Subtotal   3,270,577     3,410,233     273,922     281,165     2,510,550     2,275,750     799,832     776,250   MBS     630,174       652,952       241,676       248,522   Collateralized loan obligations   1,501,248     1,484,597     -     -   Agency residential MBS     258,150       239,454       78,565       73,312   Total   $ 3,900,751     $ 4,063,185     $ 515,598     $ 529,687     $ 4,269,948     $ 3,999,801     $ 878,397     $ 849,562         At December 31, 2022       Debt Securities Available     Debt Securities Held       for Sale     to Maturity       Amortized     Fair     Amortized     Fair       Cost     Value     Cost     Value       (In thousands)   Maturity in years:                                 1 year or less   $ 251,578     $ 250,317     $ 12,676     $ 12,659   Over 1 to 5 years     578,886       548,787       161,653       158,409   Over 5 to 10 years     1,966,462       1,673,708       636,733       605,081   Subtotal     2,796,926       2,472,812       811,062       776,149   Collateralized loan obligations     1,587,326       1,572,883       -       -   Agency residential MBS     311,089       286,048       104,852       97,362   Total   $ 4,695,341     $ 4,331,743     $ 915,914     $ 873,511         At December 31, 2019       Debt Securities Available     Debt Securities Held       for Sale     to Maturity       Amortized     Fair     Amortized     Fair       Cost     Value     Cost     Value       (In thousands)   Maturity in years:                                 1 year or less   $ 294,698     $ 295,255     $ 70,378     $ 70,602   Over 1 to 5 years     1,104,775       1,122,391       161,911       165,126   Over 5 to 10 years     670,595     �� 683,277       149,492       153,724   Over 10 years     33,489       34,465       0       0   Subtotal     2,103,557       2,135,388       381,781       389,452   MBS     938,303       943,458       356,291       354,844   Total   $ 3,041,860     $ 3,078,846     $ 738,072     $ 744,296   - 62- Expected maturities of mortgage-related securities can differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties. In addition, such factors as prepayments and interest rates may affect the yield on the carrying value of mortgage-related securities. At December 31, 2020 and December 31, 2019, the Company had 0 high-risk collateralized mortgage obligations as defined by regulatory guidelines.   - 63- An analysis of the gross unrealized losses of the debt securities available for sale portfolio follows:     Debt Securities Available for Sale     Debt Securities Available for Sale     At December 31, 2020     At December 31, 2023     No. of   Less than 12 months     No. of   12 months or longer     No. of   Total     No. of   Less than 12 months     No. of   12 months or longer     No. of   Total     Investment       Unrealized   Investment       Unrealized   Investment       Unrealized     Investment       Unrealized   Investment       Unrealized   Investment       Unrealized     Positions     Fair Value     Losses     Positions     Fair Value     Losses     Positions     Fair Value     Losses     Positions     Fair Value     Losses     Positions     Fair Value     Losses     Positions     Fair Value     Losses     ($ in thousands)     ($ in thousands)   Agency residential MBS   1     $ 96     $ (1 )   1     $ 17     $ 0     2     $ 113     $ (1 )   1     $ 115     $ (2 )   107     $ 238,642     $ (18,700 )   108     $ 238,757     $ (18,702 ) Securities of U.S. Government entities   1     154     0     0     0     0     1     154     0   Securities of U.S. Government sponsored entities   2     9,746     (15 )   19     278,265     (13,836 )   21     288,011     (13,851 ) Obligations of states and political subdivisions   2     692     (1 )   0     0     0     2     692     (1 )   2     2,280     (15 )   50     57,614     (1,423 )   52     59,894     (1,438 ) Corporate securities   0     0     0     1     14,963     (42 )   1     14,963     (42 )   -     -     -     151     1,894,602     (220,035 )   151     1,894,602     (220,035 ) Collateralized loan obligations     36       268,584       (1,098 )     0       0       0       36       268,584       (1,098 )     34       428,363       (8,914 )     67       578,643       (8,567 )     101       1,007,006       (17,481 ) Total     40     $ 269,526     $ (1,100 )     2     $ 14,980     $ (42 )     42     $ 284,506     $ (1,142 )     39     $ 440,504     $ (8,946 )     394     $ 3,047,766     $ (262,561 )     433     $ 3,488,270     $ (271,507 )   An analysis of gross unrecognized losses of the debt securities held to maturity portfolio follows:       Debt Securities Held to Maturity       At December 31, 2020       No. of     Less than 12 months     No. of     12 months or longer     No. of     Total       Investment             Unrecognized     Investment             Unrecognized     Investment             Unrecognized       Positions     Fair Value     Losses     Positions     Fair Value     Losses     Positions     Fair Value     Losses       ($ in thousands)   Agency residential MBS     3     $ 377     $ (1 )     3     $ 788     $ (31 )     6     $ 1,165     $ (32 )     Debt Securities Held to Maturity       At December 31, 2023       No. of     Less than 12 months     No. of     12 months or longer     No. of     Total       Investment             Unrecognized     Investment             Unrecognized     Investment             Unrecognized       Positions     Fair Value     Losses     Positions     Fair Value     Losses     Positions     Fair Value     Losses       ($ in thousands)   Agency residential MBS     1     $ -     $ -       93     $ 72,376     $ (5,270 )     94     $ 72,376     $ (5,270 ) Obligations of states and political subdivisions     23       18,599       (90 )     26       25,466       (245 )     49       44,065       (335 ) Corporate securities     3       26,567       (1,184 )     46       641,598       (22,194 )     49       668,165       (23,378 ) Total     27     $ 45,166     $ (1,274 )     165     $ 739,440     $ (27,709 )     192     $ 784,606     $ (28,983 )   Based upon the most recent Company’s December 31, 2023 evaluation, the unrealized losses on the Company’s debt securities available for sale were most likely caused by market conditions for these types of investments, particularly changes insecurities. Increasing risk-free interest rates and/orhave caused large declines in bond values generally. Additionally, market bid-ask spreads. rates for non-Treasury bonds are determined by the risk-free interest rate plus a risk premium spread; such spreads for investment grade, fixed rate, taxable corporate bonds have increased, also broadly reducing corporate bond values. The Company continually monitors interest rate changes, risk premium spread changes, credit rating changes for issuers of bonds owned, collateralized loan obligations’ collateral levels, and corporate bond issuers’ common stock price changes. All collateralized loan obligations and corporate securities were investment grade rated at December 31, 2023. The Company does not intend to sell any debt securities available for sale with an unrealized loss and has concluded that it is more likely than not that it will not be required to sell the debt securities prior to recovery of the amortized cost basis. Therefore, The Company evaluates held to maturity corporate securities individually, monitoring each issuer’s financial condition, profitability, cash flows and credit rating agency conclusions. The Company has evaluated each issuer’s historical financial performance and ability to service debt payments throughout and following the 2008-2009 recession. The Company does not consider these debt securitieshas an expectation that nonpayment of the amortized cost basis continues to have credit related loss as of December 31, 2020.be zero.   The fair values of debt securities available for sale could decline in the future if interest rates increase, the general economy deteriorates, inflation increases, credit ratings decline, the issuer’sissuers’ financial condition deteriorates, or the liquidity for debt securities declines. As a result, significant credit losslosses on debt securities available for sale may occur in the future.   As of December 31, 20202023 and December 31, 2019,2022, the Company hadCompany’s debt securities pledged to secure public deposits, Federal Reserve Bank borrowings and short-term borrowed funds had a carrying amount of $888,577$2,034,706 thousand and $760,365$1,180,010 thousand, respectively.   [The remainder of this page intentionally left blank] - 6364-     An analysis of the gross unrealized losses of the debt securities available for sale portfolio follows:       Debt Securities Available for Sale       At December 31, 2019       No. of     Less than 12 months     No. of     12 months or longer     No. of     Total       Investment             Unrealized     Investment             Unrealized     Investment             Unrealized       Positions     Fair Value     Losses     Positions     Fair Value     Losses     Positions     Fair Value     Losses       ($ in thousands)   Securities of U.S. Government sponsored entities     1     $ 9,951     $ (49 )     3     $ 45,877     $ (49 )     4     $ 55,828     $ (98 ) Agency residential MBS     6       11,674       (100 )     47       347,384       (5,738 )     53       359,058       (5,838 ) Agency commercial MBS     1       3,708       (3 )     0       0       0       1       3,708       (3 ) Securities of U.S. Government entities     0       0       0       2       544       (9 )     2       544       (9 ) Obligations of states and political subdivisions     0       0       0       7       4,163       (44 )     7       4,163       (44 ) Corporate securities     8       71,577       (162 )     11       64,380       (717 )     19       135,957       (879 ) Total     16     $ 96,910     $ (314 )     70     $ 462,348     $ (6,557 )     86     $ 559,258     $ (6,871 )     Debt Securities Available for Sale       At December 31, 2022       No. of     Less than 12 months     No. of     12 months or longer     No. of     Total       Investment             Unrealized     Investment             Unrealized     Investment             Unrealized       Positions     Fair Value     Losses     Positions     Fair Value     Losses     Positions     Fair Value     Losses       ($ in thousands)   Agency residential MBS     107     $ 279,139     $ (24,222 )     9     $ 6,110     $ (823 )     116     $ 285,249     $ (25,045 ) Securities of U.S. Government sponsored entities     22       289,067       (15,486 )     -       -       -       22       289,067       (15,486 ) Obligations of states and political subdivisions     56       65,633       (1,902 )     8       3,265       (177 )     64       68,898       (2,079 ) Corporate securities     133       1,521,294       (170,453 )     56       555,727       (137,190 )     189       2,077,021       (307,643 ) Collateralized loan obligations     58       518,074       (13,772 )     20       192,692       (1,198 )     78       710,766       (14,970 ) Total     376     $ 2,673,207     $ (225,835 )     93     $ 757,794     $ (139,388 )     469     $ 3,431,001     $ (365,223 )   An analysis of gross unrecognized losses of the debt securities held to maturity portfolio follows:       Debt Securities Held to Maturity       At December 31, 2019       No. of     Less than 12 months     No. of     12 months or longer     No. of     Total       Investment             Unrecognized     Investment             Unrecognized     Investment             Unrecognized       Positions     Fair Value     Losses     Positions     Fair Value     Losses     Positions     Fair Value     Losses       ($ in thousands)   Agency residential MBS     6     $ 12,098     $ (87 )     54     $ 277,203     $ (2,148 )     60     $ 289,301     $ (2,235 ) Obligations of states and political subdivisions     0       0       0       1       251       (1 )     1       251       (1 ) Total     6     $ 12,098     $ (87 )     55     $ 277,454     $ (2,149 )     61     $ 289,552     $ (2,236 )     Debt Securities Held to Maturity       At December 31, 2022       No. of     Less than 12 months     No. of     12 months or longer     No. of     Total       Investment             Unrecognized     Investment             Unrecognized     Investment             Unrecognized       Positions     Fair Value     Losses     Positions     Fair Value     Losses     Positions     Fair Value     Losses       ($ in thousands)   Agency residential MBS     97     $ 95,814     $ (7,404 )     2     $ 682     $ (99 )     99     $ 96,496     $ (7,503 ) Obligations of states and political subdivisions     54       53,536       (538 )     -       -       -       54       53,536       (538 ) Corporate securities     49       672,406       (34,448 )     -       -       -       49       672,406       (34,448 ) Total     200     $ 821,756     $ (42,390 )     2     $ 682     $ (99 )     202     $ 822,438     $ (42,489 )   The Company evaluates debt securities on a quarterly basis including changes in security ratings issued by rating agencies, changes in the financial condition of the issuer, and, for mortgage-backed and asset-backed securities, collateral levels, delinquency and loss information with respect to the underlying collateral, changes in the levels of subordination for the Company’s particular position within the repayment structure and remaining credit enhancement as compared to expected credit losses of the security. Substantially all of these securities continue to be investment grade rated by a major rating agency. One corporate bond with an amortized cost of $15.0 million and a fair value of $14.96 million at December 31, 2020, is rated below investment grade. The $14.96 million corporate bond was issued by a pharmaceutical company which develops, manufactures and markets generic and branded human pharmaceuticals, as well as active pharmaceutical ingredients, to customers worldwide. The bond matures in July 2021, and the issuing Company has refinanced much of its debt obligations beyond the maturity date. In addition to monitoring credit rating agency evaluations, Management performs its own evaluations regarding the credit worthiness of the issuer or the securitized assets underlying asset backed securities.   The following table presents the activity in the allowance for credit losses for debt securities held to maturity:     For the Year     Ended December 31,     For the Years Ended December 31,     2020     2023     2022     2021     (In thousands)     (In thousands)   Allowance for credit losses:         Beginning balance, prior to adoption of ASU 2016-13   $ 0   Impact of adopting ASU 2016-13   16   Reversal   (7 ) Beginning balance   $ 1     $ 7     $ 9   Reversal of provision for credit losses   -     (6 )   (2 ) Chargeoffs   0     -     -     -   Recoveries     0       -       -       -   Total ending balance   $ 9     $ 1     $ 1     $ 7     Agency mortgage-backed securities were assigned no credit loss allowance due to the perceived backing of government sponsored entities. Municipal securities were evaluated for risk of default based on credit rating and remaining term to maturity using Moody’s risk of default factors; Moody’s loss upon default factors were applied to the assumed defaulted principal amounts to estimate the amount for credit loss allowance. Corporate securities held to maturity were individually evaluated for expected credit loss by evaluating the issuer’s financial condition, profitability, cash flows, and credit ratings. At December 31, 2023, no credit loss allowance was assigned to corporate securities held to maturity.   - 6465-     The following table summarizes the amortized cost of debt securities held to maturity at December 31, 2020,2023, aggregated by credit rating:     Credit Risk Profile by Credit Rating     At December 31, 2020     Credit Risk Profile by Credit Rating     AAA/AA/A     BBB     BB/B     Total     At December 31, 2023     (In thousands)     AAA/AA/A     BBB+     Not Rated     Total       (In thousands)   Agency residential MBS   $ 240,332     $ 0     $ 0     $ 240,332     $ 78,092     $ -     $ 473     $ 78,565   Non-agency residential MBS   331     0     1,013     1,344   Obligations of states and political subdivisions     243,999       25,844       4,079       273,922     71,002     -     180     71,182   Corporate securities     506,508       222,142       -       728,650   Total   $ 484,662     $ 25,844     $ 5,092     $ 515,598     $ 655,602     $ 222,142     $ 653     $ 878,397     There were 0no debt securities held to maturity on nonaccrual status or past due 30 days or more as of December 31, 2020.2023.   The following table provides information about the amount of interest income earned on investment securities which is fully taxable and which is exempt from federal income tax:     For the Years Ended December 31,     For the Years Ended December 31,     2020     2019     2018     2023     2022     2021     (In thousands)     (In thousands)       Taxable   $ 93,163     $ 77,800     $ 65,330     $ 221,742     $ 158,465     $ 106,329   Tax-exempt from regular federal income tax     12,151       15,736       19,438       4,484       5,819       8,424   Total interest income from investment securities   $ 105,314     $ 93,536     $ 84,768     $ 226,226     $ 164,284     $ 114,753       Note 3: Loans and Allowance for Credit Losses   A summary of the major categories of loans outstanding is shown in the following tables at the dates indicated.indicated:       At December 31,       2020     2019       (In thousands)   Commercial:                 Paycheck Protection Program ("PPP") loans   $ 186,945     $ 0   Other     207,861       222,085   Total commercial     394,806       222,085   Commercial Real Estate     564,300       578,758   Construction     129       1,618   Residential Real Estate     23,471       32,748   Consumer Installment & Other     273,537       291,455   Total   $ 1,256,243     $ 1,126,664       At December 31,     At December 31,       2023     2022       (In thousands)                     Commercial   $ 136,550     $ 169,617   Commercial real estate     487,523       491,107   Construction     5,063       3,088   Residential real estate     9,935       13,834   Consumer installment & other     227,531       280,842   Total   $ 866,602     $ 958,488     The following summarizes activity in the allowance for credit losses:     Allowance for Credit Losses       For the Year Ended December 31, 2023                                       Consumer                       Commercial             Residential     Installment               Commercial     Real Estate     Construction     Real Estate     and Other     Total       (In thousands)   Allowance for credit losses:                                                 Balance at beginning of period   $ 6,138     $ 5,888     $ 150     $ 32     $ 8,076     $ 20,284   (Reversal) provision     (3,871 )     11       95       (6 )     2,621       (1,150 ) Chargeoffs     (410 )     (45 )     -       -       (7,499 )     (7,954 ) Recoveries     2,359       71       -       -       3,257       5,687   Total allowance for credit losses   $ 4,216     $ 5,925     $ 245     $ 26     $ 6,455     $ 16,867   [The remainder of this page intentionally left blank]   - 6566-     The following summarizes activity in the allowance for loan losses/credit losses:     Allowance for Credit Losses       For the Year Ended December 31, 2022                                       Consumer                       Commercial             Residential     Installment               Commercial     Real Estate     Construction     Real Estate     and Other     Total       (In thousands)   Allowance for credit losses:                                                 Balance at beginning of period   $ 6,966     $ 6,529     $ 2     $ 45     $ 9,972     $ 23,514   (Reversal) provision     (1,184 )     (703 )     148       (13 )     1,758       6   Chargeoffs     (20 )     -       -       -       (6,205 )     (6,225 ) Recoveries     376       62       -       -       2,551       2,989   Total allowance for credit losses   $ 6,138     $ 5,888     $ 150     $ 32     $ 8,076     $ 20,284         Allowance for Credit Losses       For the Year Ended December 31, 2020                                       Consumer                               Commercial             Residential     Installment                       Commercial     Real Estate     Construction     Real Estate     and Other     Unallocated     Total       (In thousands)   Allowance for credit losses:                                                         Balance at beginning of period, prior to adoption of ASU 2016-13   $ 4,959     $ 4,064     $ 109     $ 206     $ 6,445     $ 3,701     $ 19,484   Impact of adopting ASU 2016-13     3,385       618       (31 )     (132 )     1,878       (3,701 )     2,017   Adjusted beginning balance     8,344       4,682       78       74       8,323       0       21,501   Provision (reversal)     746       929       (72 )     (27 )     2,731       0       4,307   Chargeoffs     (236 )     0       0       0       (3,963 )     0       (4,199 ) Recoveries     351       49       0       0       1,845       0       2,245   Total allowance for credit losses   $ 9,205     $ 5,660     $ 6     $ 47     $ 8,936     $ 0     $ 23,854   The growth in commercial loan balances was due to originations of PPP loans which are 100% guaranteed by the Small Business Administration (“SBA”). PPP loan proceeds used for eligible payroll and certain other operating costs are to be forgiven with repayment of loan principal and accrued interest made by the SBA. Management does not expect credit losses on PPP loans.     Allowance for Loan Losses       For the Twelve Months Ended December 31, 2019                                       Consumer                               Commercial             Residential     Installment                       Commercial     Real Estate     Construction     Real Estate     and Other     Unallocated     Total       (In thousands)   Allowance for loan losses:                                                         Balance at beginning of period   $ 6,311     $ 3,884     $ 1,465     $ 869     $ 5,645     $ 3,177     $ 21,351   (Reversal) provision     (2,023 )     (16 )     (1,356 )     (663 )     3,534       524       0   Chargeoffs     (97 )     0       0       0       (4,473 )     0       (4,570 ) Recoveries     768       196       0       0       1,739       0       2,703   Total allowance for loan losses   $ 4,959     $ 4,064     $ 109     $ 206     $ 6,445     $ 3,701     $ 19,484       Allowance for Loan Losses       For the Twelve Months Ended December 31, 2018                                       Consumer                               Commercial             Residential     Installment                       Commercial     Real Estate     Construction     Real Estate     and Other     Unallocated     Total       (In thousands)   Allowance for loan losses:                                                         Balance at beginning of period   $ 7,746     $ 3,849     $ 335     $ 995     $ 6,418     $ 3,666     $ 23,009   (Reversal) provision     (2,369 )     275       1,130       (126 )     1,579       (489 )     0   Chargeoffs     (513 )     (240 )     0       0       (4,124 )     0       (4,877 ) Recoveries     1,447       0       0       0       1,772       0       3,219   Total allowance for loan losses   $ 6,311     $ 3,884     $ 1,465     $ 869     $ 5,645     $ 3,177     $ 21,351   The allowance for loan losses and recorded investment in loans evaluated for impairment were as follows:     Allowance for Loan Losses and Recorded Investment in Loans Evaluated for Impairment       At December 31, 2019       Commercial     Commercial Real Estate     Construction     Residential Real Estate     Consumer Installment and Other     Unallocated     Total       (In thousands)   Allowance for loan losses:                                                         Individually evaluated for impairment   $ 2,413     $ 0     $ 0     $ 0     $ 0     $ 0     $ 2,413   Collectively evaluated for impairment     2,546       4,064       109       206       6,445       3,701       17,071   Total   $ 4,959     $ 4,064     $ 109     $ 206     $ 6,445     $ 3,701     $ 19,484   Carrying value of loans:                                                         Individually evaluated for impairment   $ 8,182     $ 7,409     $ 0     $ 190     $ 43     $ 0     $ 15,824   Collectively evaluated for impairment     213,903       571,349       1,618       32,558       291,412       0       1,110,840   Total   $ 222,085     $ 578,758     $ 1,618     $ 32,748     $ 291,455     $ 0     $ 1,126,664       Allowance for Credit Losses       For the Year Ended December 31, 2021                                       Consumer                       Commercial             Residential     Installment               Commercial     Real Estate     Construction     Real Estate     and Other     Total       (In thousands)   Allowance for credit losses:                                                 Balance at beginning of period   $ 9,205     $ 5,660     $ 6     $ 47     $ 8,936     $ 23,854   (Reversal) provision     (2,411 )     126       (4 )     (2 )     2,293       2   Chargeoffs     (56 )     -       -       -       (3,192 )     (3,248 ) Recoveries     228       743       -       -       1,935       2,906   Total allowance for credit losses   $ 6,966     $ 6,529     $ 2     $ 45     $ 9,972     $ 23,514     The Company’s customers are primarily small businesses, professionals and consumers. Given the scale of these borrowers, corporate credit rating agencies do not evaluate the borrowers’ financial condition. The Company’s subsidiary, Westamerica Bank (the “Bank”) maintains a Loan Review Department which reports directly to the Audit Committee of the Board of Directors. The Loan Review Department performs independent evaluations of loans and validates management assigned credit risk grades on evaluated loans using grading standards employed by bank regulatory agencies. Loans judged to carry lower-risk attributes are assigned a “pass” grade, with a minimal likelihood of loss. Loans judged to carry higher-risk attributes are referred to as “classified loans,” and are further disaggregated, with increasing expectations for loss recognition, as “substandard,” “doubtful,” and “loss.” The Loan Review Department performs continuous evaluations throughout the year. If the Bank becomes aware of deterioration in a borrower’s performance or financial condition between Loan Review Department examinations, assigned risk grades are re-evaluated promptly. Credit risk grades assigned by management and validated by the Loan Review Department are subject to review by the Bank’s regulatory authorities during regulatory examinations.   - 66- The following summarizes the credit risk profile by internally assigned grade:     Credit Risk Profile by Internally Assigned Grade     Credit Risk Profile by Internally Assigned Grade     At December 31, 2020     At December 31, 2023     Commercial     Commercial Real Estate     Construction     Residential Real Estate     Consumer Installment and Other     Total     Commercial     Commercial Real Estate     Construction     Residential Real Estate     Consumer Installment and Other     Total     (In thousands)     (In thousands)   Grade:     Pass   $ 386,144     $ 545,398     $ 129     $ 22,105     $ 270,925     $ 1,224,701     $ 130,001     $ 475,870     $ 5,063     $ 9,606     $ 225,089     $ 845,629   Substandard   8,662     18,902     0     1,366     1,498     30,428     6,549     11,653     -     329     377     18,908   Doubtful   0     0     0     0     543     543     -     -     -     -     1,479     1,479   Loss     0       0       0       0       571       571       -       -       -       -       586       586   Total   $ 394,806     $ 564,300     $ 129     $ 23,471     $ 273,537     $ 1,256,243     $ 136,550     $ 487,523     $ 5,063     $ 9,935     $ 227,531     $ 866,602       Credit Risk Profile by Internally Assigned Grade     Credit Risk Profile by Internally Assigned Grade     At December 31, 2019     At December 31, 2022     Commercial     Commercial Real Estate     Construction     Residential Real Estate     Consumer Installment and Other     Total     Commercial     Commercial Real Estate     Construction     Residential Real Estate     Consumer Installment and Other     Total     (In thousands)     (In thousands)   Grade:                             Pass   $ 213,542     $ 567,525     $ 1,618     $ 31,055     $ 289,424     $ 1,103,164     $ 169,040     $ 477,842     $ 3,088     $ 13,457     $ 278,223     $ 941,650   Substandard   8,543     11,233     0     1,693     1,329     22,798     577     13,265     -     377     1,079     15,298   Doubtful   0     0     0     0     308     308     -     -     -     -     752     752   Loss     0       0       0       0       394       394       -       -       -       -       788       788   Total   $ 222,085     $ 578,758     $ 1,618     $ 32,748     $ 291,455     $ 1,126,664     $ 169,617     $ 491,107     $ 3,088     $ 13,834     $ 280,842     $ 958,488     - 67- The following tables summarize loans by delinquency and nonaccrual status:       Summary of Loans by Delinquency and Nonaccrual Status       At December 31, 2020       Current and Accruing     30-59 Days Past Due and Accruing     60-89 Days Past Due and Accruing     Past Due 90 Days or More and Accruing     Nonaccrual     Total Loans       (In thousands)   Commercial     394,004     $ 713     $ 6     $ 0     $ 83     $ 394,806   Commercial real estate     560,580       0       0       0       3,720       564,300   Construction     129       0       0       0       0       129   Residential real estate     22,269       770       271       0       161       23,471   Consumer installment and other     270,240       2,010       472       450       365       273,537   Total   $ 1,247,222     $ 3,493     $ 749     $ 450     $ 4,329     $ 1,256,243       Summary of Loans by Delinquency and Nonaccrual Status     Summary of Loans by Delinquency and Nonaccrual Status     At December 31, 2019     At December 31, 2023     Current and Accruing     30-59 Days Past Due and Accruing     60-89 Days Past Due and Accruing     Past Due 90 Days or More and Accruing     Nonaccrual     Total Loans     Current and Accruing     30-59 Days Past Due and Accruing     60-89 Days Past Due and Accruing     Past Due 90 Days or More and Accruing     Nonaccrual     Total Loans     (In thousands)     (In thousands)   Commercial   $ 221,199     $ 531     $ 158     $ 0     $ 197     $ 222,085     $ 136,421     $ 58     $ -     $ -     $ 71     $ 136,550   Commercial real estate   573,809     432     421     0     4,096     578,758     485,476     951     766     -     330     487,523   Construction   1,618     0     0     0     0     1,618     5,063     -     -     -     -     5,063   Residential real estate   31,934     274     540     0     0     32,748     9,933     -     -     -     2     9,935   Consumer installment and other     286,391       2,960       1,517       440       147       291,455       220,357       5,544       1,242       388       -       227,531   Total   $ 1,114,951     $ 4,197     $ 2,636     $ 440     $ 4,440     $ 1,126,664     $ 857,250     $ 6,553     $ 2,008     $ 388     $ 403     $ 866,602         Summary of Loans by Delinquency and Nonaccrual Status       At December 31, 2022       Current and Accruing     30-59 Days Past Due and Accruing     60-89 Days Past Due and Accruing     Past Due 90 Days or More and Accruing     Nonaccrual     Total Loans       (In thousands)   Commercial   $ 169,337     $ 172     $ 58     $ -     $ 50     $ 169,617   Commercial real estate     490,354       508       192       -       53       491,107   Construction     3,088       -       -       -       -       3,088   Residential real estate     13,430       377       -       -       27       13,834   Consumer installment and other     273,247       5,101       1,850       628       16       280,842   Total   $ 949,456     $ 6,158     $ 2,100     $ 628     $ 146     $ 958,488     - 67- There was 0no allowance for credit losses allocated to loans on nonaccrual status as of December 31, 2020.2023 or December 31, 2022. There were 0no commitments to lend additional funds to borrowers whose loans were on nonaccrual status at December 31, 20202023 andor December 31, 2019.2022.   The following summarizes impaired loans as of December 31, 2019:     Impaired Loans       At December 31,       2019               Unpaid               Recorded     Principal     Related       Investment     Balance     Allowance       (In thousands)   With no related allowance recorded:                         Commercial   $ 21     $ 21     $ -   Commercial real estate     7,408       8,856       -   Residential real estate     190       220       -   Consumer installment and other     43       43       -   Total with no related allowance recorded     7,662       9,140       -                             With an allowance recorded:                         Commercial     8,160       8,160       2,413   Total with an allowance recorded     8,160       8,160       2,413   Total   $ 15,822     $ 17,300     $ 2,413   Impaired loans at December 31, 2019, included $6,713 thousand of restructured loans, $3,670 thousand of whichThere were on nonaccrual status.     Impaired Loans       For the Twelve Months Ended December 31,       2019     2018       Average     Recognized     Average     Recognized       Recorded     Interest     Recorded     Interest       Investment     Income     Investment     Income       (In thousands)   Commercial   $ 8,412     $ 140     $ 10,532     $ 667   Commercial real estate     7,428       139       11,703       758   Residential real estate     191       3       269       19   Consumer installment and other     44       1       254       14   Total   $ 16,075     $ 283     $ 22,758     $ 1,458   The following tables provide information on troubled debt restructurings (TDRs):     Troubled Debt Restructurings       At December 31, 2020                               Period-End                               Individual       Number of     Pre-Modification     Period-End     Credit Loss       Contracts     Carrying Value     Carrying Value     Allowance       ($ in thousands)   Commercial real estate     6     $ 8,367     $ 6,040     $ 0   Residential real estate     1       241       181       0   Total     7     $ 8,608     $ 6,221     $ 0   - 68-       Troubled Debt Restructurings       At December 31, 2019                               Period-End                               Individual       Number of     Pre-Modification     Period-End     Impairment       Contracts     Carrying Value     Carrying Value     Allowance       ($ in thousands)   Commercial     2     $ 278     $ 32     $ 11   Commercial real estate     6       8,367       6,492       0   Residential real estate     1       241       189       0   Total     9     $ 8,886     $ 6,713     $ 11   During the year ended December 31, 2020, the Company did not modify any loans that were considered TDRs for accounting purposes. Section 4013 of the CARES Act allowed certainno loan modifications formade to borrowers impacted by the COVID-19 pandemic to be excluded from TDR accounting. During the year ended December 31, 2020, the Company modified loans under Section 4013 of the CARES Act, granting 90 day deferrals of principal and interest payments. As of December 31, 2020, commercial real estate loans with deferred payments totaled $7.8 million, primarily for hospitality and retail properties. As of December 31, 2020, consumer and commercial loan deferrals were $2.5 million and $33 thousand, respectively. During the year ended December 31, 2019, the Company did not modify any loans that were considered TDRs. There were 0 chargeoffs related to troubled debt restructurings madeexperiencing financial difficulty during the year ended December 31, 20202023 and 2019. During the year ended December 31, 2020 2022.and 2019, 0 troubled debt restructured loans defaulted within 12 months of the modification date. A TDR is considered to be in default when payments are ninety days or more past due.   TDRs of $6,221 thousand included loans of $3,420 thousand on nonaccrual status at December 31, 2020. NaN allowance for credit losses was allocated to one commercial real estate loan secured by real property with a balance of $3,420 thousand, which was considered collateral-dependent at December 31, 2020. Four other commercial real estate loans totaling $7.6 million were secured by real property and considered collateral-dependent at December 31, 2020. At December 31, 2020, $446 thousand of indirect consumer installment loans secured by personal property were past due 90 days or more and considered collateral-dependent and two residential real estate loans totaling $346 thousand secured by real property were considered collateral-dependent. There were no other collateral-dependent loans at December 31, 2020. A loan is considered collateral-dependentcollateral dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. Loans that were considered collateral dependent at December 31, 2023 included the following: nine commercial real estate loans totaling $10.9 million secured by real property and $377 thousand of indirect consumer installment loans secured by personal property. There were no other collateral dependent loans at December 31, 2023. Loans that were considered collateral dependent at December 31, 2022 included the following: five commercial real estate loans totaling $8.1 million secured by real property, and $625 thousand of indirect consumer installment loans secured by personal property. There were no other collateral dependent loans at December 31, 2022.   Based on the most recent analysis performed, the risk category of loans by class of loans is as follows:     At December 31, 2020     At December 31, 2023                                 Revolving                                     Line of       ��                               Loans                                     Credit         Term Loans Amortized Cost Basis by Origination Year     Total   Amortized         Term Loans Amortized Cost Basis by Origination Year     Total   Amortized         Prior     2016     2017     2018     2019     2020     Term Loans     Cost Basis     Total     Prior     2019     2020     2021     2022     2023     Term Loans     Cost Basis     Total     (In thousands)     (In thousands)   Commercial loans by grade                                       Commercial loans by grade:                                       Pass   $ 24,998     $ 25,041     $ 10,669     $ 19,307     $ 41,672     $ 219,521     $ 341,208     $ 44,936     $ 386,144     $ 20,554     $ 4,471     $ 12,601     $ 31,770     $ 22,146     $ 13,112     $ 104,654     $ 25,347     $ 130,001   Substandard   82     0     0     13     0     7,584     7,679     983     8,662     12     2,492     -     2,835     -     -     5,339     1,210     6,549   Doubtful   0     0     0     0     0     0     0     0     0     -     -     -     -     -     -     -     -     -   Loss     0       0       0       0       0       0       0       0       0       -       -       -       -       -       -       -       -       -   Total   $ 25,080     $ 25,041     $ 10,669     $ 19,320     $ 41,672     $ 227,105     $ 348,887     $ 45,919     $ 394,806     $ 20,566     $ 6,963     $ 12,601     $ 34,605     $ 22,146     $ 13,112     $ 109,993     $ 26,557     $ 136,550                                         Current gross chargeoffs on commercial loans: Current gross chargeoffs on commercial loans:                                   For the year ended December 31, 2023 For the year ended December 31, 2023                                     $ -     $ -     $ 3     $ 135     $ -     $ -     $ 138     $ 272     $ 410         At Decmber 31, 2020                                                               Revolving                                                                       Loans               Term Loans Amortized Cost Basis by Origination Year     Total     Amortized               Prior     2016     2017     2018     2019     2020     Term Loans     Cost Basis     Total       (In thousands)   Commercial real estate loans by grade                                                                         Pass   $ 125,696     $ 42,237     $ 100,617     $ 93,243     $ 90,219     $ 93,386     $ 545,398     $ 0     $ 545,398   Substandard     6,009       9,905       105       0       2,043       840       18,902       0       18,902   Doubtful     0       0       0       0       0       0       0       0       0   Loss     0       0       0       0       0       0       0       0       0   Total   $ 131,705     $ 52,142     $ 100,722     $ 93,243     $ 92,262     $ 94,226     $ 564,300     $ 0     $ 564,300   - 68-       At December 31, 2022                                                               Line of                                                                       Credit               Term Loans Amortized Cost Basis by Origination Year     Total     Amortized               Prior     2018     2019     2020     2021     2022     Term Loans     Cost Basis     Total       (In thousands)   Commercial loans by grade:                                                                         Pass   $ 23,891     $ 5,549     $ 12,557     $ 17,293     $ 53,928     $ 23,966     $ 137,184     $ 31,856     $ 169,040   Substandard     12       -       -       -       -       -       12       565       577   Doubtful     -       -       -       -       -       -       -       -       -   Loss     -       -       -       -       -       -       -       -       -   Total   $ 23,903     $ 5,549     $ 12,557     $ 17,293     $ 53,928     $ 23,966     $ 137,196     $ 32,421     $ 169,617       At December 31, 2023                                                               Line of                                                                       Credit               Term Loans Amortized Cost Basis by Origination Year     Total     Amortized               Prior     2019     2020     2021     2022     2023     Term Loans     Cost Basis     Total       (In thousands)   Commercial real estate loans by grade:                                                                   Pass   $ 172,925     $ 68,156     $ 69,324     $ 68,891     $ 50,899     $ 45,675     $ 475,870     $ -     $ 475,870   Substandard     10,056       811       786       -       -       -       11,653       -       11,653   Doubtful     -       -       -       -       -       -       -       -       -   Loss     -       -       -       -       -       -       -       -       -   Total   $ 182,981     $ 68,967     $ 70,110     $ 68,891     $ 50,899     $ 45,675     $ 487,523     $ -     $ 487,523                                                                             Current gross chargeoffs on commercial real estate loans:                                                           For the year ended December 31, 2023                                                                       $ 45     $ -     $ -     $ -     $ -     $ -     $ 45     $ -     $ 45       At December 31, 2022                                                               Line of                                                                       Credit               Term Loans Amortized Cost Basis by Origination Year     Total     Amortized               Prior     2018     2019     2020     2021     2022     Term Loans     Cost Basis     Total       (In thousands)   Commercial real estate loans by grade:                                                                   Pass   $ 146,588     $ 58,473     $ 71,440     $ 74,016     $ 71,618     $ 55,707     $ 477,842     $ -     $ 477,842   Substandard     8,083       -       2,112       806       -       2,264       13,265       -       13,265   Doubtful     -       -       -       -       -       -       -       -       -   Loss     -       -       -       -       -       -       -       -       -   Total   $ 154,671     $ 58,473     $ 73,552     $ 74,822     $ 71,618     $ 57,971     $ 491,107     $ -     $ 491,107       At December 31, 2023                                                               Line of                                                                       Credit               Term Loans Amortized Cost Basis by Origination Year     Total     Amortized               Prior     2019     2020     2021     2022     2023     Term Loans     Cost Basis     Total       (In thousands)   Residential real estate loans by grade:                                                                   Pass   $ 9,606     $ -     $ -     $ -     $ -     $ -     $ 9,606     $ -     $ 9,606   Substandard     329       -       -       -       -       -       329       -       329   Doubtful     -       -       -       -       -       -       -       -       -   Loss     -       -       -       -       -       -       -       -       -   Total   $ 9,935     $ -     $ -     $ -     $ -     $ -     $ 9,935     $ -     $ 9,935                                                                             Current gross chargeoffs on residential real estate loans:                                                           For the year ended December 31, 2023                                                                       $ -     $ -     $ -     $ -     $ -     $ -     $ -     $ -     $ -       At December 31, 2022                                                               Line of                                                                       Credit               Term Loans Amortized Cost Basis by Origination Year     Total     Amortized               Prior     2018     2019     2020     2021     2022     Term Loans     Cost Basis     Total       (In thousands)   Residential real estate loans by grade:                                                                   Pass   $ 13,457     $ -     $ -     $ -     $ -     $ -     $ 13,457     $ -     $ 13,457   Substandard     377       -       -       -       -       -       377       -       377   Doubtful     -       -       -       -       -       -       -       -       -   Loss     -       -       -       -       -       -       -       -       -   Total   $ 13,834     $ -     $ -     $ -     $ -     $ -     $ 13,834     $ -     $ 13,834   [The remainder of this page intentionally left blank]   - 69-       At December 31, 2020     At December 31, 2023                                 Revolving                                     Line of                                     Loans                                     Credit         Term Loans Amortized Cost Basis by Origination Year     Total   Amortized         Term Loans Amortized Cost Basis by Origination Year     Total   Amortized         Prior     2016     2017     2018     2019     2020     Term Loans     Cost Basis     Total     Prior     2019     2020     2021     2022     2023     Term Loans     Cost Basis     Total     (In thousands)     (In thousands)   Construction loans by grade                                       Construction loans by grade:                                       Pass   $ 0     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0     $ 129     $ 129     $ -     $ -     $ -     $ -     $ -     $ -     $ -     $ 5,063     $ 5,063   Substandard   0     0     0     0     0     0     0     0     0     -     -     -     -     -     -     -     -     -   Doubtful   0     0     0     0     0     0     0     0     0     -     -     -     -     -     -     -     -     -   Loss     0       0       0       0       0       0       0       0       0       -       -       -       -       -       -       -       -       -   Total   $ 0     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0     $ 129     $ 129     $ -     $ -     $ -     $ -     $ -     $ -     $ -     $ 5,063     $ 5,063                                         Current gross chargeoffs on construction loans: Current gross chargeoffs on construction loans:                                   For the year ended December 31, 2023 For the year ended December 31, 2023                                     $ -     $ -     $ -     $ -     $ -     $ -     $ -     $ -     $ -       At December 31, 2020     At December 31, 2022                                 Revolving                                     Line of                                     Loans                                     Credit         Term Loans Amortized Cost Basis by Origination Year     Total   Amortized         Term Loans Amortized Cost Basis by Origination Year     Total   Amortized         Prior     2016     2017     2018     2019     2020     Term Loans     Cost Basis     Total     Prior     2018     2019     2020     2021     2022     Term Loans     Cost Basis     Total     (In thousands)     (In thousands)   Residential Real Estate loans by grade                                       Construction loans by grade:                                       Pass   $ 22,105     $ 0     $ 0     $ 0     $ 0     $ 0     $ 22,105     $ 0     $ 22,105     $ -     $ -     $ -     $ -     $ -     $ -     $ -     $ 3,088     $ 3,088   Substandard   1,366     0     0     0     0     0     1,366     0     1,366     -     -     -     -     -     -     -     -     -   Doubtful   0     0     0     0     0     0     0     0     0     -     -     -     -     -     -     -     -     -   Loss     0       0       0       0       0       0       0       0       0       -       -       -       -       -       -       -       -       -   Total   $ 23,471     $ 0     $ 0     $ 0     $ 0     $ 0     $ 23,471     $ 0     $ 23,471     $ -     $ -     $ -     $ -     $ -     $ -     $ -     $ 3,088     $ 3,088     The Company considers the delinquency and nonaccrual status of the consumer loan portfolio and its impact on the allowance for credit losses. The following table presents the amortized cost in consumer installment and other loans based on delinquency and nonaccrual status:     At December 31, 2020     At December 31, 2023                                 Revolving                                     Line of                                     Loans                                     Credit         Term Loans Amortized Cost Basis by Origination Year     Total   Amortized         Term Loans Amortized Cost Basis by Origination Year     Total   Amortized         Prior     2016     2017     2018     2019     2020     Term Loans     Cost Basis     Total     Prior     2019     2020     2021     2022     2023     Term Loans     Cost Basis     Total     (In thousands)     (In thousands)       Consumer installment and other loans by delinquency and nonaccrual status                   Consumer installment and other loans by delinquency and nonaccrual status: Consumer installment and other loans by delinquency and nonaccrual status:                           Current   $ 8,657     $ 15,766     $ 21,167     $ 47,359     $ 62,271     $ 86,953     $ 242,173     $ 28,067     $ 270,240     $ 6,545     $ 12,144     $ 22,700     $ 51,055     $ 71,388     $ 38,699     $ 202,531     $ 17,826     $ 220,357   30-59 days past due   125     86     200     620     519     428     1,978     32     2,010     160     277     600     2,345     1,733     332     5,447     97     5,544   60-89 days past due   40     19     115     40     165     76     455     17     472     31     51     153     410     430     122     1,197     45     1,242   Past due 90 days or more   33     49     50     131     142     43     448     2     450     -     8     88     143     138     -     377     11     388   Nonaccrual     0       0       0       0       0       0       0       365       365       -       -       -       -       -       -       -       -       -   Total   $ 8,855     $ 15,920     $ 21,532     $ 48,150     $ 63,097     $ 87,500     $ 245,054     $ 28,483     $ 273,537     $ 6,736     $ 12,480     $ 23,541     $ 53,953     $ 73,689     $ 39,153     $ 209,552     $ 17,979     $ 227,531                                         Current gross chargeoffs on consumer installment and other loans: Current gross chargeoffs on consumer installment and other loans:                               For the year ended December 31, 2023 For the year ended December 31, 2023                                     $ 246     $ 161     $ 843     $ 2,329     $ 3,191     $ 453     $ 7,223     $ 276     $ 7,499       At December 31, 2022                                                               Line of                                                                       Credit               Term Loans Amortized Cost Basis by Origination Year     Total     Amortized               Prior     2018     2019     2020     2021     2022     Term Loans     Cost Basis     Total       (In thousands)           Consumer installment and other loans by delinquency and nonaccrual status:                                                   Current   $ 6,017     $ 13,147     $ 22,330     $ 35,783     $ 76,126     $ 99,414     $ 252,817     $ 20,430     $ 273,247   30-59 days past due     117       268       572       1,014       1,709       1,359       5,039       62       5,101   60-89 days past due     42       65       67       275       635       750       1,834       16       1,850   Past due 90 days or more     3       20       16       61       284       241       625       3       628   Nonaccrual     -       -       -       -       -       -       -       16       16   Total   $ 6,179     $ 13,500     $ 22,985     $ 37,133     $ 78,754     $ 101,764     $ 260,315     $ 20,527     $ 280,842     There were 0no loans held for sale at December 31, 20202023 and December 31, 2019.2022.   The Company held 0no other real estate owned (OREO) at December 31, 20202023 compared with $43 thousand atand December 31, 2019.2022. There was 0 reserve applied against OREO atAt December 31, 2019.2023 There were 0 foreclosed residential real estate properties atand December 31, 2019.2022, The amount ofthere were no consumer mortgage loans outstanding secured by residential real estate properties for which formal foreclosure proceedings were in process was $346 thousand at December 31, 2020 and $124 thousand at December 31, 2019.process.   [The remainder of this page intentionally left blank] - 70-   Note 4: Concentration of Credit Risk   Under the California Financial Code, credit extended to any one person owing to a commercial bank at any one time shall not exceed the following limitations: (a) unsecured loanscredits shall not exceed 15 percent of the sum of the shareholders'Bank’s shareholders’ equity, allowance for creditloan losses, capital notes, and debentures, of the bank, or (b) secured and unsecured loanscredits in all shall not exceed 25 percent of the sum of the shareholders'Bank’s shareholders’ equity, allowance for creditloan losses, capital notes, and debentures of the bank.debentures. At December 31, 2020,2023, the Bank did not have credit extended to any one entity exceeding these limits. At December 31, 2020,2023, the Bank had 3425 lending relationships each with aggregate amounts of $5 million or more. The Company has significant credit arrangements that are secured by real estate collateral. In addition to real estate loans outstanding as disclosed in Note 3, the Company had loan commitments related to real estate loans of $37,456$30,888 thousand and $43,129$34,790 thousand at December 31, 20202023 and December 31, 2019,2022, respectively. The Company requires collateral on all real estate loans with loan-to-value ratios at origination generally no greater than 75% on commercial real estate loans and no greater than 80% on residential real estate loans. At December 31, 2020,2023, the Bank held corporate bonds in 93107 issuing entities and commercial paper in 1 issuing entity that exceeded $5 million for each issuer.   - 70-   Note 5: Premises, Equipment, Other Assets and Other Liabilities   Premises and equipment consisted of the following:     At December 31,     At December 31,     Cost     Accumulated Depreciation and Amortization     Net Book Value     Cost     Accumulated Depreciation and Amortization     Net Book Value     (In thousands)     (In thousands)   2020               2023   Land   $ 11,453     $ 0     $ 11,453     $ 11,453     $ -     $ 11,453   Building and improvements   42,960     (28,922 )   14,038     43,185     (31,742 )   11,443   Leasehold improvements   6,944     (5,528 )   1,416     7,622     (6,550 )   1,072   Furniture and equipment     26,227       (20,321 )     5,906       26,586       (23,538 )     3,048   Total   $ 87,584     $ (54,771 )   $ 32,813     $ 88,846     $ (61,830 )   $ 27,016   2019               2022   Land   $ 11,691     $ 0     $ 11,691     $ 11,453     $ -     $ 11,453   Building and improvements   42,529     (28,353 )   14,176     42,528     (30,601 )   11,927   Leasehold improvements   6,219     (5,405 )   814     8,157     (6,897 )   1,260   Furniture and equipment     26,793       (18,877 )     7,916       26,766       (22,587 )     4,179   Total   $ 87,232     $ (52,635 )   $ 34,597     $ 88,904     $ (60,085 )   $ 28,819     Depreciation and amortization of premises and equipment included in noninterest expense amounted to $3,683$2,942 thousand in 2020,2023, $3,879$2,899 thousand in 20192022, and $3,677$2,978 thousand in 2018.2021.   [The remainder of this page intentionally left blank] - 71- Other assets consisted of the following:     At December 31,     At December 31,   At December 31,     2020     2019     2023     2022     (In thousands)     (In thousands)   Cost method equity investments:             Federal Reserve Bank stock (1)   $ 14,069     $ 14,069     $ 14,069     $ 11,743   Other investments     158       158       158       158   Total cost method equity investments   14,227     14,227     14,227     11,901   Life insurance cash surrender value   60,444     57,810     66,611     63,816   Net deferred tax asset   0     11,085     99,507     125,140   Right-of-use asset   18,832     17,136     18,814     15,746   Limited partnership investments   18,335     20,773     28,667     34,421   Interest receivable   33,022     28,797     54,568     53,558   Prepaid assets   4,572     3,737     5,200     4,894   Other assets     10,471       10,767       9,716       9,670   Total other assets   $ 159,903     $ 164,332     $ 297,310     $ 319,146     (1) A bank applying for membership in the Federal Reserve System is required to subscribe to stock in the Federal Reserve Bank (FRB) in its district in a sum equal to six) A bank applying for membership in the Federal Reserve System is required to subscribe to stock in the Federal Reserve Bank (FRB) in its district in a sum equal to six percent of the bank’s paid-up capital stock and surplus. One-half of the amount of the bank's subscription shall be paid to the FRB and the remaining half will be subject to call when deemed necessary by the Board of Governors of the Federal Reserve System.   The Company owns 211 thousand shares of Visa Inc. (“Visa”) class B common stock which have transfer restrictions; the carrying value is $-0- thousand. On September 30, 2019, Visa Inc. announceddisclosed a revised conversion rate applicable to its class B common stock resulting fromin its Form September 27, 2019 8deposit of funds into its litigation escrow account. This funding reduced the-K dated October 2, 2023. The conversion rate of class B common stock into class A common stock, which is unrestricted and trades actively on the New York Stock Exchange, was reduced from 1.62981.5902 to 1.62281.5875 per share, effective as of September 27, 2019.28, 2023. Visa Inc. class A common stock had a closing price of $218.73$260.35 per share on December 31, 2020,29, 2023, the last day of stock market trading for the fourth quarter 2020.2023. The ultimate value of the Company’s Visa Inc. class B shares is subject to the extent of Visa Inc.’s future litigation escrow fundings, the resulting conversion rate to class A common stock, and current and future trading restrictions on the class B common stock. At its Annual Meeting held January 23, 2024, Visa proposed a Class B Exchange Offer Program authorizing Visa to conduct one or more exchange offers that would allow Class B stockholders to exchange portions of their Class B common stock into freely tradable shares. The proposal was approved by Visa stockholders. Under an initial exchange offer, current Class B shares will be exchanged into Class B-1 shares. In potential exchange offers, a Class B-1 stockholder can elect to exchange a portion of its Class B-1 shares for Class C common stock which is transferable and convertible to Class A common stock. Any exchange of Class B-1 shares into Class C common stock requires the stockholder to execute an indemnification agreement with Visa for Visa’s related unresolved litigation.   The Company invests in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for low-income housing tax credits. At December 31, 2020,2023, this investmentthese investments totaled $18,335$28,667 thousand and $12,202$15,561 thousand of this amount represents outstanding equity capital commitments that are included in other liabilities. At December 31, 2019,2022, this investmentthese investments totaled $20,773$34,421 thousand and $16,231$22,647 thousand of this amount represents outstanding equity capital commitments that are included in other liabilities. At December 31, 2020,2023, the $12,202$15,561 thousand of outstanding equity capital commitments are expected to be paid as follows, $3,060 thousand in 2021, $4,908 thousand in 2022, $3,485 thousand in 2023, $96follows: $14,077 thousand in 2024, $81$600 thousand in 2025, $74$145 thousand in 2026, and $498$189 thousand in 2027, $550 thousand in 2028or thereafter.   - 71- The amounts recognized in net income for these investments include:     For the Years Ended December 31,     For the Years Ended December 31,     2020     2019     2018     2023     2022     2021     (In thousands)     (In thousands)   Investment loss included in pre-tax income   $ 2,440     $ 2,400     $ 2,900     $ 5,754     $ 5,724     $ 2,620   Tax credits recognized in provision for income taxes   900     875     1,121     3,435     3,250     2,300     [The remainder of this page intentionally left blank] - 72- Other liabilities consisted of the following:       At December 31,       2020     2019       (In thousands)   Net deferred tax liability   $ 25,778     $ 0   Operating lease liability     18,832       17,136   Securities purchases pending settlement     29,000       0   Other liabilities     38,988       27,453   Total other liabilities   $ 112,598     $ 44,589   The deferred tax liability at December 31, 2020 of $25,778 thousand, net of deferred tax benefits of $22,805 thousand, included deferred tax obligations of $48,021 thousand related to unrealized gains of $162,434 thousand on available for sale debt securities. The net deferred tax asset at December 31, 2019 of $11,085 thousand was net of deferred tax obligations of $10,934 thousand related to available for sale debt securities unrealized gains.     At December 31,     At December 31,       2023     2022       (In thousands)   Operating lease liability   $ 18,814     $ 15,746   Other liabilities     40,455       49,379   Total other liabilities   $ 59,269     $ 65,125     The Company has entered into leases for most branch locations and certain other offices that were classified as operating leases primarily with original terms of five years. Certain lease arrangements contain extension options, which can be exercised at the Company’s option, for one or more additional five year terms. Unexercised extension options are not considered reasonably certain of exercise and have not been included in the lease term used to determine the lease liability or right-of-use asset. The Company did not have any finance leases as of December 31, 2020.2023.   As of December 31, 2020,2023, the Company recorded aCompany’s lease liability of $18,832 thousand and a right-of-use asset of $18,832were $18,814 thousand. The weighted average remaining life of operating leases and weighted average discount rate used to determine operating lease liabilities were 4.73.7 years and 2.12%2.94%, respectively, at December 31, 2020.2023.  The Company did not have any material lease incentives, unamortized initial direct costs, prepaid lease expense, or accrued lease expense as of December 31, 2020.2023.   Total lease costs of $6,604 thousand, $6,575 thousand and $6,581 thousand, during the year ended December 31, 20202023, 2022and December 31, 2019, 2021,of $6,699 thousand and $6,880 thousand, respectively, were recorded within occupancy and equipment expense. The Company did not have any material short-term or variable leases costs or sublease income during the year ended December 31, 20202023, 2022and December 31, 2019.    2021. [The remainder of this page intentionally left blank] - 72-   The following table summarizes the remaining lease payments of operating lease liabilities:     Minimum future lease payments     Minimum future lease payments     At December 31,     At December 31,     2020     2023     (In thousands)     (In thousands)   2021   $ 5,615   2022   4,691   2023   3,960   2024   2,337     $ 6,067   2025   1,089     5,178   2026   3,518   2027   2,621   2028   1,865   Thereafter     1,968       818   Total minimum lease payments     19,660     20,067   Less: discount     (828 )     (1,253 ) Present value of lease liability   $ 18,832     $ 18,814   See Note 10 to the consolidated financial statements for additional information related to the net deferred tax asset.     Note 6: Goodwill and Identifiable Intangible Assets   The Company has recorded goodwill and other identifiable intangibles associated with purchase business combinations. Goodwill is not amortized, but is evaluated for impairment at least annually. The Company did not recognize impairment during the year ended December 31, 20202023 and December 31, 2019.2022, as no triggering events occurred during such periods. Identifiable intangibles are amortized to their estimated residual values over their expected useful lives. Such lives and residual values are also periodically reassessed to determine if any amortization period adjustments are indicated. During the year ended December 31, 20202023 and December 31, 20192022, no such adjustments were recorded.   [The remainder of this page intentionally left blank] - 73- The carrying values of goodwill were:       At December 31, 2020     At December 31, 2019       (In thousands)   Goodwill   $ 121,673     $ 121,673       At December 31, 2023     At December 31, 2022       (In thousands)   Goodwill   $ 121,673     $ 121,673     The gross carrying amount of identifiable intangible assets and accumulated amortization was:were:       At December 31, 2020     At December 31, 2019       Gross             Gross               Carrying     Accumulated     Carrying     Accumulated       Amount     Amortization     Amount     Amortization       (In thousands)   Core deposit intangibles   $ 56,808     $ (55,704 )   $ 56,808     $ (55,417 )     At December 31, 2023     At December 31, 2022       Gross             Gross               Carrying     Accumulated     Carrying     Accumulated       Amount     Amortization     Amount     Amortization       (In thousands)   Core deposit intangibles   $ 56,808     $ (56,461 )   $ 56,808     $ (56,225 )   As of December 31, 2020,2023, the current period and estimated future amortization expense for identifiable intangible assets, to be fully amortized in 2025, was:       Total       Core       Deposit       Intangibles       (In thousands)   For the year ended December 31, 2020 (actual)   $ 287   Estimate for year ending December 31, 2021     269   2022     252   2023     236   2024     222   2025     125       Total       Core       Deposit       Intangibles       (In thousands)   For the year ended December 31, 2023 (actual)   $ 236   2024     222   2025     125     - 73-   Note 7: Deposits and Borrowed Funds   The following table provides additional detail regarding deposits.     Deposits     Deposits     At December 31,     At December 31,   At December 31,     2020     2019     2023     2022     (In thousands)     (In thousands)   Noninterest-bearing   $ 2,725,177     $ 2,240,112     $ 2,605,844     $ 2,947,277   Interest-bearing:             Transaction   1,102,601     931,888     1,072,233     1,273,143   Savings   1,703,812     1,471,284     1,699,388     1,874,115   Time deposits less than $100 thousand   79,825     88,355     56,100     65,962   Time deposits $100 thousand through $250 thousand   49,323     54,874     31,107     42,733   Time deposits more than $250 thousand     27,241       26,108       9,595       22,060   Total deposits   $ 5,687,979     $ 4,812,621     $ 5,474,267     $ 6,225,290     Demand deposit overdrafts of $682$620 thousand and $1,055 thousand$995thousand were included as loan balances at December 31, 20202023 and December 31, 2019,2022, respectively. Interest expense for aggregate time deposits with individual account balances in excess of $100 thousand was $319$116 thousand in 2020,2023, $326$156 thousand in 20192022, and $368$265 thousand in 2018.2021. [The remainder of this page intentionally left blank] - 74- The following table provides additional detail regarding short-term borrowed funds.     Repurchase Agreements (Sweep) Accounted for as Secured Borrowings       Remaining Contractual Maturity of the Agreements       Overnight and Continuous       At December 31,     At December 31,       2023     2022   Repurchase agreements:   (In thousands)   Collateral securing borrowings:                 Agency residential MBS   $ 25,669     $ 30,108   Corporate securities     233,947       203,774   Total collateral carrying value   $ 259,616     $ 233,882   Total short-term borrowed funds   $ 58,162     $ 57,792     The following table provides additional detail regarding short-term borrowed funds.       Repurchase Agreements (Sweep) Accounted for as Secured Borrowings       Remaining Contractual Maturity of the Agreements       Overnight and Continuous       At December 31,       2020     2019   Repurchase agreements:   (In thousands)   Collateral securing borrowings:                 Securities of U.S. Government sponsored entities   $ 0     $ 65,833   Agency residential MBS     67,019       52,485   Corporate securities     188,195       146,253   Total collateral carrying value   $ 255,214     $ 264,571   Total short-term borrowed funds   $ 102,545     $ 30,928       For the Years Ended December 31,       2020     2019       Highest Balance at Any Month-end       (In thousands)   Securities sold under repurchase agreements   $ 110,846     $ 61,411       For the Years Ended December 31,       2023     2022       Highest Balance at Any Month-end       (In thousands)   Securities sold under repurchase agreements   $ 138,005     $ 257,560     [The remainderAt December 31, 2023, the Company had uncommitted lines of this page intentionally left blank]credit for overnight borrowings from correspondent banks totaling $100 million. Additionally, the Company had access to borrowing from the Federal Reserve up to $996,935 thousand based on the collateral pledged at December 31, 2023. There were no outstanding amounts under the above-mentioned borrowings at December 31, 2023. For the year ended December 31, 2023, the average balances of the above-mentioned borrowings were $-0- thousand. At December 31, 2023, the Company’s estimated unpledged debt securities collateral qualifying for Federal Reserve borrowing totaled $1,945,176 thousand.   - 74-   Note 8: Shareholders’Shareholders’ Equity   The Company grants stock options and restricted performance shares to employees in exchange for employee services, pursuant to the shareholder-approved 2019 Omnibus Equity Incentive Plan. Prior to shareholder approval of the 2019 Omnibus Equity Incentive Plan on April 25, 2019, the Company granted stock options and restricted performance shares under its 1995 Stock Option Plan, which was last amended and restated in 2012. Nonqualified stock option grants (“NQSO”) are granted with an exercise price equal to the fair market value of the related common stock on the grant date. NQSO generally become exercisable in equal annual installments over a three-year period with each installment vesting on the anniversary date of the grant. Each NQSO has a maximum ten-year term. A restricted performance share grant becomes vested after three years of being awarded, provided the Company has attained its performance goals for such three-year period.   [The remainder of this page intentionally left blank] - 75- The following table summarizes information about stock options granted under the PlanPlans as of December 31, 2020.2023. The intrinsic value is calculated as the difference between the market valuevolume weighted average price as of December 31, 20202023 and the exercise price of the shares. The market value as of December 31, 202029, 2023, the last day of stock market trading for the fourth quarter 2023,was $55.29$56.41 as reported by the NASDAQ Global Select Market:            Options Outstanding     Options Exercisable           At December 31, 2020     For the Year Ended December 31, 2020     At December 31, 2020     For the Year Ended December 31, 2020   Range of Exercise Price   Number Outstanding     Aggregate Intrinsic Value     Weighted Average Remaining Contractual Life     Weighted Average Exercise Price     Number Exercisable     Aggregate Intrinsic Value     Weighted Average Remaining Contractual Life     Weighted Average Exercise Price           (In thousands)     (Years)             (In thousands)     (Years)           $40 - 45     46     $ 586       4.6     $ 43       46     $ 586       4.6     $ 43    45 - 50     0       0       -       -       0       0       -       0    50 - 55     19       36       3.1       53       19       36       3.1       53    55 - 60     90       0       6.1       57       90       0       6.1       57    60 - 65     353       0       7.6       62       165       0       7.4       62    65 - 70     185       0       9.1       66       0       0       -       0   $40 - 70     693     $ 622       7.5       61       320     $ 622       6.4       58           Options Outstanding     Options Exercisable           At December 31, 2023     For the Year Ended December 31, 2023     At December 31, 2023     For the Year Ended December 31, 2023   Range of Exercise Price     Number Outstanding     Aggregate Intrinsic Value     Weighted Average Remaining Contractual Life     Weighted Average Exercise Price     Number Exercisable     Aggregate Intrinsic Value     Weighted Average Remaining Contractual Life     Weighted Average Exercise Price           (In thousands)     (Years)             (In thousands)     (Years)           $ 40 - 45       12     $ 149       1.9     $ 42       12     $ 149       1.9     $ 42     45 - 50       -       -       -       -       -       -       -       -     50 - 55       4       8       0.1       53       4       8       0.1       53     55 - 60       572       -       7.6       57       213       -       6.1       58     60 - 65       247       -       4.6       62       247       -       4.6       62     65 - 70       138       -       6.1       66       138       -       6.1       66   $ 40 - 70       973     $ 157       6.5       60       614     $ 157       5.4       61     The Company applies the Roll-Geske option pricing model (Modified Roll) to determine grant date fair value of stock option grants. This model modifies the Black-Scholes Model to take into account dividends and American options. During the year ended December 31, 2020,2023, 20192022 and 2018,2021, the Company granted 184225 thousand, 250229 thousand, and 249193 thousand stock options, respectively. The following weighted average assumptions were used in the option pricing to value stock options granted in the periods indicated:     For the Years Ended December 31,     For the Years Ended December 31,     2020     2019     2018     2023     2022     2021   Expected volatility (1)   20 %   20 %   20 %   20 %   19 %   20 % Expected life in years (2)   3.5     4.7     4.8     4.7     4.6     4.7   Risk-free interest rate (3)   1.52 %   2.67 %   2.50 %   3.60 %   1.73 %   0.46 % Expected dividend yield   2.59 %   2.55 %   2.65 %   3.66 %   3.02 %   2.79 % Fair value per award   $ 8.64     $ 10.19     $ 9.98     $ 8.50     $ 7.90     $ 7.50     (1) Measured using daily price changes of Company’s stock over respective expected term of the option and the implied volatility derived from the market prices of the Company’s stock and traded options. (1) Measured using daily price changes of Company’s stock over respective expected term of the option and the implied volatility derived from the market prices of the Company’s stock and traded options. (2) The number of years that the Company estimates that the options will be outstanding prior to exercise. (2) The number of years that the Company estimates that the options will be outstanding prior to exercise. (3) (3)The risk-free rate over the expected life based on the US Treasury yield curve in effect at the time of the grant.   Employee stock option grants are being expensed by the Company over the grants’ three year vesting period. The Company issues new shares upon the exercise of options. The number of shares authorized to be issued for options at December 31, 20202023 is 1,131705 thousand. [The remainder of this page intentionally left blank]   - 7576-     A summary of option activity during the year ended December 31, 20202023 is presented below:     Shares     Weighted Average Exercise Price     Weighted Average Remaining Contractual Term     Shares     Weighted Average Exercise Price     Weighted Average Remaining Contractual Term     (In thousands)       (Years)     (In thousands)       (Years)   Outstanding at January 1, 2020   561     $ 58.75         Outstanding at January 1, 2023   854     $ 60.02         Granted   184     66.41           225     55.47         Exercised   (52 )   52.92           (22 )   43.30         Forfeited or expired     0     0             (84 )   55.26         Outstanding at December 31, 2020     693     61.25     7.5   Exercisable at December 31, 2020     320     57.51     6.4   Outstanding at December 31, 2023     973     59.50     6.5   Exercisable at December 31, 2023     614     61.17     5.4     A summary of the Company’s nonvested option activity during the year ended December 31, 20202023 is presented below:     Shares     Weighted Average Grant Date Fair Value     Shares     Weighted Average Grant Date Fair Value     (In thousands)         (In thousands)       Nonvested at January 1, 2020   372     $ 9.81   Nonvested at January 1, 2023   346     $ 7.88   Granted   184     8.64     225     8.50   Vested   (183 )   9.50     (164 )   7.99   Forfeited     0     0       (48 )   8.18   Nonvested at December 31, 2020     373     $ 9.39   Nonvested at December 31, 2023     359     $ 8.18     The weighted average estimated grant date fair value for options granted under the Company’s stock option plan during the twelve months ended December 31, 2020,2023, 20192022 and 20182021 was $8.64, $10.19$8.50, $7.90 and $9.98$7.50 per share, respectively. The total remaining unrecognized compensation cost related to nonvested awards as of December 31, 20202023 is $2,587$1,581 thousand and the weighted average period over which the cost is expected to be recognized is 1.7 years.   The total intrinsic value of options exercised during the twelve monthsyear ended December 31, 2020,2023, 20192022 and 20182021 was $693$113 thousand, $3,398$165 thousand and $4,264$454 thousand, respectively. The total fair value of Restricted Performance Shares (“RPSs”) that vested during the twelve monthsyear ended December 31, 2020,2023, 20192022 and 20182021 was $534$508 thousand, $1,073$492 thousand and $1,143$527 thousand, respectively. The total fair value of options vested during the twelve monthsyear ended December 31, 2020,2023, 20192022 and 20182021 was $1,735$1,309 thousand, $1,980$1,464 thousand and $1,835$1,783 thousand, respectively. During the year ended twelveDecember 31, 2023, months of 2020, 5222 thousand shares were issued due to the exercise of nonqualified stock options resulting in a tax deduction exceedingless than the related share based compensation expense by $295$16 thousand. During the year ended twelveDecember 31, 2022, months of 2019, 51640 thousand shares were issued due to the exercise of nonqualified stock options resulting in a tax deduction exceedingless than the related share based compensation expense by $1,485$143 thousand. The lesser deduction in 2022 resulted in a $30 thousand increase in tax provision. During the year ended twelveDecember 31, 2021, months of 2018, 29253 thousand shares were issued due to the exercise of nonqualified stock options resulting in a tax deduction exceedingequal to the related share based compensation by $2,516 thousand.expense. The excesslessor deductions resulting from the exercise of nonqualified stock options reducedincreased the income tax provision by $87$5 thousand in 2020, $435 thousand in 2019 and $737 thousand in 2018.2023.   A summary of the status of the Company’s restricted performance shares as of December 31, 20202023 and 20192022 and changes during the twelve monthsyears ended on those dates, follows:         2020     2019       (In thousands)   Outstanding at January 1,     27       39   Granted     10       10   Issued upon vesting     (9 )     (17 ) Forfeited     0       (5 ) Outstanding at December 31,     28       27       2023     2022       (In thousands)   Outstanding at January 1,     31       30   Granted     12       12   Issued upon vesting     (9 )     (8 ) Forfeited     (2 )     (3 ) Outstanding at December 31,     32       31     - 7677-     As of December 31, 20202023 and 2019,2022, the restricted performance shares had a weighted-average contractual life of 1.31.2 years, and 1.0 year, respectively. The compensation cost that was charged against income for the Company’s restricted performance shares granted was $533$250 thousand, $758$525 thousand and $660$610 thousand for the year ended December 31, 2020,2023, 20192022 and 2018,2021, respectively. There were 0no stock appreciation rights or incentive stock options granted in the year ended December 31, 20202023, 2022and 2019.2021.   On February 13, 2009, theThe Company issued a warrant to purchase 246,640repurchases shares of its common stock in the open market to optimize the Company’s commonuse of equity capital and enhance shareholder value and with the intention of lessening the dilutive impact of issuing new shares under stock at an exercise price of $50.92 per share. The warrants may be exercised in a manner wherein the Company withholds shares of common stock issuable upon exercise of the warrant equal in value to the aggregate exercise price, in which case the warrant holder would not deliver cash for the aggregate exercise priceoption plans, and the Company would issue a number of shares equal to the intrinsic value on the exercise date. On January 29, 2019, the warrants were exercised in a cashless transaction resulting in the issuance of 50,788 shares of the Company’s common stock. other ongoing requirements. The Company repurchases and retires its common stock in accordance with Board of Directors approved share repurchase programs. AtThe repurchase plan approved December 31, 2020,July 28, 2022 approximately 1,624 thousand shares remained available to repurchase under such plans.expired September 1, 2023. There is no replacement plan in place currently.   Shareholders haveThe Company’s articles of incorporation authorized 2two additional classes of stock of one million shares each, to be denominated “Class B Common Stock” and “Preferred Stock,” respectively, in addition to the 150 million shares of common stock presently authorized. At December 31, 2020,2023, 0no shares of Class B Common Stock or Preferred Stock were outstanding.     Note 9: Regulatory Capital   Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can result in regulatory action. The Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (Basel III rules) require the Company to maintain a capital conservation buffer of 2.5% above the adequately capitalized risk-based capital ratios to avoid restrictions on dividends and equity repurchases and other payments such as discretionary bonuses to executive officers. The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital. Management believes as of December 31, 20202023 and December 31, 2019,2022, the Company and Bank met all capital adequacy requirements to which they are subject.   Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At year-end 20202023 and 2019,2022, the most recent regulatory notifications categorizedBank met the Bank ascapital requirements to be well capitalized under the regulatory framework for prompt corrective action. ThereManagement believes that there are no conditions or events since that notification that management believes have changedwould change the institution’s category.category since December 31, 2023.   The capital ratios for the Company and the Bank as of the dates indicated are presented in the table below. For Common Equity Tier 1 Capital, Tier 1 Capital and Total Capital, the required percentages for capital adequacy purposes include the 2.5% capital conservation buffer.       At December 31, 2020     Required for Capital Adequacy Purposes     To Be Well-capitalized Under Prompt Corrective Action Regulations       Amount     Ratio     Amount     Ratio     Amount     Ratio       ($ in thousands)   Common Equity Tier 1 Capital                                                 Company   $ 604,833       16.04 %   $ 263,903       7.00 %     N/A       N/A   Bank     484,270       13.00 %     260,755       7.00 %   $ 242,130       6.50 % Tier 1 Capital                                                 Company     604,833       16.04 %     320,454       8.50 %     N/A       N/A   Bank     484,270       13.00 %     316,632       8.50 %     298,006       8.00 % Total Capital                                                 Company     628,797       16.68 %     395,855       10.50 %     N/A       N/A   Bank     514,234       13.80 %     391,133       10.50 %     372,508       10.00 % Leverage Ratio (1)                                                 Company     604,833       9.40 %     257,488       4.00 %     N/A       N/A   Bank     484,270       7.58 %     255,560       4.00 %     319,451       5.00 %   (1)     At December 31, 2023     Required for Capital Adequacy Purposes     To Be Well-capitalized Under Prompt Corrective Action Regulations       Amount     Ratio     Amount     Ratio     Amount     Ratio       ($ in thousands)   Common Equity Tier 1 Capital                                                 Company   $ 841,611       18.76 %   $ 313,959       7.00 %     N/A       N/A   Bank     641,252       14.46 %     310,362       7.00 %   $ 288,193       6.50 % Tier 1 Capital                                                 Company     841,611       18.76 %     381,236       8.50 %     N/A       N/A   Bank     641,252       14.46 %     376,868       8.50 %     354,700       8.00 % Total Capital                                                 Company     858,680       19.15 %     470,939       10.50 %     N/A       N/A   Bank     664,321       14.98 %     465,543       10.50 %     443,375       10.00 % Leverage Ratio (1)                                                 Company     841,611       12.86 %     261,739       4.00 %     N/A       N/A   Bank     641,252       9.88 %     259,617       4.00 %     324,521       5.00 % (1) The leverage ratio consists of Tier 1capital divided by the most recent quarterly average total assets, excluding certain intangible assets. [The remainder of this page intentionally left blank] - 78-       At December 31, 2022     Required for Capital Adequacy Purposes     To Be Well-capitalized Under Prompt Corrective Action Regulations       Amount     Ratio     Amount     Ratio     Amount     Ratio       ($ in thousands)   Common Equity Tier 1 Capital                                                 Company   $ 736,414       15.22 %   $ 338,748       7.00 %     N/A       N/A   Bank     592,804       12.37 %     335,351       7.00 %   $ 311,397       6.50 % Tier 1 Capital                                                 Company     736,414       15.22 %     411,337       8.50 %     N/A       N/A   Bank     592,804       12.37 %     407,212       8.50 %     383,258       8.00 % Total Capital                                                 Company     756,900       15.64 %     508,123       10.50 %     N/A       N/A   Bank     619,290       12.93 %     503,026       10.50 %     479,073       10.00 % Leverage Ratio (1)                                                 Company     736,414       10.18 %     289,259       4.00 %     N/A       N/A   Bank     592,804       8.26 %     287,229       4.00 %     359,036       5.00 % (1)The leverage ratio consists of Tier 1capital divided by the most recent quarterly average total assets, excluding certain intangible assets. - 77-       At December 31, 2019     Required for Capital Adequacy Purposes     To Be Well-capitalized Under Prompt Corrective Action Regulations       Amount     Ratio     Amount     Ratio     Amount     Ratio       ($ in thousands)   Common Equity Tier 1 Capital                                                 Company   $ 579,216       16.22 %   $ 249,976       7.00 %     N/A       N/A   Bank     415,730       11.80 %     246,671       7.00 %   $ 229,052       6.50 % Tier 1 Capital                                                 Company     579,216       16.22 %     303,542       8.50 %     N/A       N/A   Bank     415,730       11.80 %     299,529       8.50 %     281,910       8.00 % Total Capital                                                 Company     600,860       16.83 %     374,964       10.50 %     N/A       N/A   Bank     443,374       12.58 %     370,007       10.50 %     352,388       10.00 % Leverage Ratio (1)                                                 Company     579,216       10.50 %     220,755       4.00 %     N/A       N/A   Bank     415,730       7.60 %     218,851       4.00 %     273,564       5.00 % (1) The leverage ratio consists of Tier 1capital divided by the most recent quarterly average total assets, excluding certain intangible assets.     Note 10: Income Taxes   Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the amounts reported in the financial statements of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Amounts for the current year are based upon estimates and assumptions as of the date of these financial statements and could vary significantly from amounts shown on the tax returns as filed. Net deferred tax assets are included with other assets in the consolidated balance sheets.   The components of the net deferred tax asset areis as follows:       At December 31,     At December 31,     2020     2019     2023     2022     (In thousands)     (In thousands)   Deferred tax asset             Allowance for credit losses   $ 6,789     $ 6,326     $ 4,853     $ 5,858   Securities available for sale   79,865     107,493   State franchise taxes   2,262     1,948     4,816     3,805   Deferred compensation   4,789     5,118     3,828     4,091   Real estate owned   0     400   Purchased assets and assumed liabilities   552     406     321     229   Post-retirement benefits   480     517     367     405   Employee benefit accruals   2,353     1,875     3,454     3,096   VISA Class B shares   284     263     343     507   Limited partnership investments   1,066     1,228   Impaired capital assets   2,429     2,875   Accrued liabilities   416     1,606     1,172     840   Premises and equipment   585     261     1,175     1,193   Lease liability   5,413     4,548   Other     800       377       69       99   Sub total deferred tax asset     22,805       23,200   Tax valuation     0       (269 ) Total deferred tax asset     22,805       22,931       105,676       132,164   Deferred tax liability             Net deferred loan fees   106     239   Securities available for sale   48,021     10,934   Net deferred loan costs   -     193   Right-of-use asset   5,413     4,548   Intangible assets     456       673     451     453   Limited partnership investments     305       1,830   Total deferred tax liability     48,583       11,846       6,169       7,024   Net deferred tax asset (liability)   $ (25,778 )   $ 11,085   Net deferred tax asset   $ 99,507     $ 125,140     AtBased on Management’s judgment, a valuation allowance is December 31, 2020 notand December 31, 2019, needed to reduce the Company had $2,429 thousand and $2,875 thousand, respectively,gross deferred tax asset related to California capital loss carryforwards whichbecause it is more likely than not that the gross deferred tax asset will expire if unutilized within five years ofbe realized through recoverable taxes or future taxable income. Net deferred tax assets are included with other assets in the year incurred. At December 31, 2020 and December 31, 2019, a valuation allowance recorded for the portion of the tax benefit that was expected to expire was $-0- and $269 thousand, respectively. consolidated balance sheets.   - 7879-     The provision for federal and state income taxes consists of amounts currently payable and amounts deferred are as follows:     For the Years Ended December 31,     For the Years Ended December 31,     2020     2019     2018     2023     2022     2021     (In thousands)     (In thousands)   Current income tax expense:                 Federal   $ 15,982     $ 11,570     $ 10,560     $ 38,075     $ 26,785     $ 15,299   State     10,654       9,595       9,816       23,731       16,075       11,320   Total current     26,636       21,165       20,376       61,806       42,860       26,619   Deferred income tax (benefit) expense:                 Federal   (538 )   2,340     (206 )   (1,197 )   (1,349 )   1,281   State     292       1,322       (737 )     (798 )     2,046       842   Total deferred     (246 )     3,662       (943 )     (1,995 )     697       2,123   Provision for income taxes   $ 26,390     $ 24,827     $ 19,433     Federal   -     -     (472 ) State     -       -       2,248   Total change in valuation reserve     -       -       1,776   Provision for income taxes   $ 59,811     $ 43,557     $ 30,518     The provision for income taxes differs from the provision computed by applying the statutory federal income tax rate to income before taxes, as follows:       For the Years Ended December 31,     For the Years Ended December 31,     2020     2019     2018     2023     2022     2021     (In thousands)     (In thousands)   Federal income taxes due at statutory rate   $ 22,429     $ 22,095     $ 19,109     $ 46,532     $ 34,774     $ 24,576   Additions (reductions) in income taxes resulting from:               (Reductions) additions in income taxes resulting from:   Interest on state and municipal securities and loans not taxable for federal income tax purposes   (2,808 )   (3,584 )   (4,375 )   (1,188 )   (1,484 )   (2,070 ) State franchise taxes, net of federal income tax benefit   8,647     8,625     7,173     18,117     14,315     9,757   Stock compensation deduction in excess of book expense   (62 )   (312 )   (528 ) Change in valuation reserve   -     -     1,776   Stock compensation deduction less than (in excess of) book expense   3     30     -   Tax credits   (1,061 )   (1,040 )   (1,291 )   (2,943 )   (3,439 )   (2,621 ) Dividend received deduction   (44 )   (38 )   (32 )   (66 )   (56 )   (48 ) Cash value life insurance   (383 )   (464 )   (490 )   (597 )   (421 )   (389 ) Other     (328 )     (455 )     (133 )     (47 )     (162 )     (463 ) Provision for income taxes   $ 26,390     $ 24,827     $ 19,433     $ 59,811     $ 43,557     $ 30,518     A reconciliation of the beginning and ending amounts of unrecognized tax benefits follow:     2020     2019       (In thousands)                     Balance at January 1,   $ 0     $ 909   Additions for tax positions taken in the current period     0       0   Reductions for tax positions taken in the current period     0       0   Additions for tax positions taken in prior years     0       0   Reductions for tax positions taken in prior years     0       0   Decrease related to settlements with taxing authorities     0       (909 ) Decrease as a result of a lapse in statute of limitations     0       0   Balance at December 31,   $ 0     $ 0   In the second quarter 2019, the Company decreased unrecognized tax benefits by $909 thousand related to settlements with taxing authorities. The settlements incorporated amended tax returns for which the Company had recognized a deferred tax asset in the amount of $1,003 thousand. At December 31, 20202023 and December 31, 2019,2022, the Company had 0no uncertain tax positions related to previous years’ tax returns which were under examination.   The Company classifies interest and penalties as a component of the provision for income taxes. For tax years 20202023 and 2019,2022, 0no interest or penalties were recognized as a component of the provision for income taxes. At December 31, 2020,2023, the tax years ended December 31, 2019,2022, 20182021 and 20172020 remain subject to examination by the Internal Revenue Service and the tax years ended December 31, 2019,2022, 2018,2021, 2017,2020 and 20162019 remain subject to examination by the California Franchise Tax Board.   - 79-   Note 11: Fair Value Measurements   The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Debt securities available for sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as other real estate owned, loans individually evaluated for credit loss, certain loans held for investment, debt securities held to maturity, and other assets.  These nonrecurring fair value adjustments typically involve the lower-of-cost or fair-value accounting of individual assets.   In accordance with the Fair Value Measurement and Disclosure topic of the FASB Accounting Standards Codification, the Company bases its fair values on the price that would be received to sell an asset or paid to transfer a liability in the principal market or most advantageous market for an asset or liability in an orderly transaction between market participants on the measurement date under current market conditions. A fair value measurement reflects all of the assumptions that market participants would use in pricing the asset or liability, including assumptions about the risk inherent in a particular valuation technique, the effect of a restriction on the sale or use of an asset, and the risk of nonperformance.   - 80- The Company groups its assets and liabilities measured at fair value into a three-level hierarchy, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. When the valuation assumptions used to measure the fair value of the asset or liability are categorized within different levels of the fair value hierarchy, the asset or liability is categorized in its entirety within the lowest level of the hierarchy. These levels are:   Level 1 – Valuation is based upon quoted prices for identical instruments traded in active exchange markets, such as the New York Stock Exchange. Level 1 includes U.S. Treasury and equity securities, which are traded by dealers or brokers in active markets. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.   Level 2 – Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level 2 includes mutual funds, federal agency securities, mortgage-backed securities, corporate securities, commercial paper, collateralized loan obligations, municipal bonds and securities of U.S government entities and U.S. government sponsored entities.   Level 3 – Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect the Company’s estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.   The Company relies on independent vendor pricing services to measure fair value for equity securities, debt securities available for sale and debt securities held to maturity. The Company employs three pricing services. To validate the pricing of these vendors, the Company compares vendors’ pricing for each of the securities for consistency; significant pricing differences, if any, are evaluated using all available independent quotes with the quote most closely reflecting the market generally used as the fair value estimate. In addition, the Company evaluates debt securities for credit losslosses on a quarterly basis. As with any valuation technique used to estimate fair value, changes in underlying assumptions used could significantly affect the results of current and future values. Accordingly, these fair value estimates may not be realized in an actual sale of the securities.   The Company regularly reviews the valuation techniques and assumptions used by its vendors and determines which valuation techniques are utilized based on observable market inputs for the type of securities being measured. The Company uses the information to determine the placement in the fair value hierarchy as level 1, 2 or 3.   [The remainder of this page intentionally left blank] - 80- Assets Recorded at Fair Value on a Recurring Basis   The tables below present assets measured at fair value on a recurring basis on the dates indicated.       At December 31, 2020       Fair Value     Quoted Prices in Active Markets for Identical Assets (Level 1)     Significant Other Observable Inputs (Level 2)     Significant Unobservable Inputs (Level 3) (1)       (In thousands)   Debt securities available for sale                                 Agency residential mortgage-backed securities (MBS)   $ 652,952     $ 0     $ 652,952     $ 0   Securities of U.S. Government entities     154       0       154       0   Obligations of states and political subdivisions     111,010       0       111,010       0   Corporate securities     2,117,978       0       2,117,978       0   Commercial paper     24,990       0       24,990       0   Collateralized loan obligations     1,156,101       0       1,156,101       0   Total debt securities available for sale   $ 4,063,185     $ 0     $ 4,063,185     $ 0   (1) There were no transfers in to or out of level 3 during the year ended December 31, 2020.   At December 31, 2019     At December 31, 2023     Fair Value     Quoted Prices in Active Markets for Identical Assets (Level 1)     Significant Other Observable Inputs (Level 2)     Significant Unobservable Inputs (Level 3) (1)     Fair Value     Quoted Prices in Active Markets for Identical Assets (Level 1)     Significant Other Observable Inputs (Level 2)     Significant Unobservable Inputs (Level 3) (1)     (In thousands)     (In thousands)   Debt securities available for sale                   U.S. Treasury securities   $ 20,000     $ 20,000     $ 0     $ 0   Debt securities available for sale:   Agency residential MBS   $ 239,454     $ -     $ 239,454     $ -   Securities of U.S. Government sponsored entities   111,167     0     111,167     0     294,919     -     294,919     -   Agency residential MBS   939,750     0     939,750     0   Agency commercial MBS   3,708     0     3,708     0   Securities of U.S. Government entities   544     0     544     0   Obligations of states and political subdivisions   163,139     0     163,139     0     71,283     -     71,283     -   Corporate securities   1,833,783     0     1,833,783     0     1,909,548     -     1,909,548     -   Collateralized loan obligations     6,755       0       6,755       0       1,484,597       -       1,484,597       -   Total debt securities available for sale   $ 3,078,846     $ 20,000     $ 3,058,846     $ 0     $ 3,999,801     $ -     $ 3,999,801     $ -     (1) There were no transfers in to or out of level 3 during the year ended December 31, 2019. [The remainder of this page intentionally left blank]level 3 during the year ended December 31, 2023.   - 81-       At December 31, 2022       Fair Value     Quoted Prices in Active Markets for Identical Assets (Level 1)     Significant Other Observable Inputs (Level 2)     Significant Unobservable Inputs (Level 3) (1)       (In thousands)   Debt securities available for sale:                                 Agency residential MBS   $ 286,048     $ -     $ 286,048     $ -   Securities of U.S. Government sponsored entities     290,853       -       290,853       -   Obligations of states and political subdivisions     82,004       -       82,004       -   Corporate securities     2,099,955       -       2,099,955       -   Collateralized loan obligations     1,572,883       -       1,572,883       -   Total debt securities available for sale   $ 4,331,743     $ -     $ 4,331,743     $ -     (1)There were no transfers in to or out of level 3 during the year ended December 31, 2022. Assets Recorded at Fair Value on a Nonrecurring Basis   The Company may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from the application of lower of costlower-of-cost or fair valuefair-value accounting of individual assets. For assets measured at fair value on a nonrecurring basis that were recorded in the balance sheet at December 31, 20202023 and December 31, 2019,2022, the following tables provide the level of valuation assumptions used to determine each adjustment and the carrying value of the related assets at period end.                                       For the                                       Year Ended       At December 31, 2020     December 31, 2020       Carrying Value     Level 1     Level 2     Level 3     Total Losses       (In thousands)   Other real estate owned   $ 0     $ 0     $ 0     $ 0     $ 0   Loans:                                         Commercial     5,270       0       0       5,270       0   Commercial real estate     3,710       0       0       3,710       0   Residential real estate     181       0       0       181       0   Total assets measured at fair value on a nonrecurring basis   $ 9,161     $ 0     $ 0     $ 9,161     $ 0                                         For the                                       Year Ended       At December 31, 2023     December 31, 2023       Carrying Value     Level 1     Level 2     Level 3     Total Losses       (In thousands)   Loans:                                         Commercial real estate   $ 110     $ -     $ -     $ 110     $ -   Total assets measured at fair value on a nonrecurring basis   $ 110     $ -     $ -     $ 110     $ -                                         For the                                       Year Ended       At December 31, 2019     December 31, 2019       Carrying Value     Level 1     Level 2     Level 3     Total Losses       (In thousands)   Other real estate owned   $ 43     $ 0     $ 0     $ 43     $ 0   Impaired loans:                                         Commercial     5,747       0       0       5,747       0   Commercial real estate     4,091       0       0       4,091       0   Residential real estate     190       0       0       190       0   Total assets measured at fair value on a nonrecurring basis   $ 10,071     $ 0     $ 0     $ 10,071     $ 0                                       For the                                       Year Ended       At December 31, 2022     December 31, 2022       Carrying Value     Level 1     Level 2     Level 3     Total Losses       (In thousands)   Loans:                                         Commercial real estate   $ 225     $ -     $ -     $ 225     $ -   Total assets measured at fair value on a nonrecurring basis   $ 225     $ -     $ -     $ 225     $ -     Level 3 – Valuation is based upon present value of expected future cash flows, independent market prices, estimated liquidation values of loan collateral or appraised value of the collateral as determined by third-party independent appraisers, less 10% for selling costs, generally. Level 3 includes other real estate owned that has been measured at fair value upon transfer to foreclosed assets and loans collateralized by real property and other business asset collateral individually evaluated for credit loss where a specific reserve has been established or a chargeoff has been recorded. Losses on other real estate owned represent losses recognized in earnings during the period subsequent to its initial classification as foreclosed assets. The unobservable inputs and qualitative information about the unobservable inputs are not presented as the inputs were not developed by the Company.   Disclosures about Fair Value of Financial Instruments   The tables below are a summary of fair value estimates for financial instruments and the level of the fair value hierarchy within which the fair value measurements are categorized, excluding financial instruments recorded at fair value on a recurring basis. The values assigned do not necessarily represent amounts which ultimately may be realized for assets or paid to settle liabilities. In addition, these values do not give effect to adjustments to fair value which may occur when financial instruments are sold or settled in larger quantities.  The carrying amounts in the following tables are recorded in the balance sheet under the indicated captions.   The Company has not included assets and liabilities that are not financial instruments such as goodwill, long-term relationships with deposit, merchant processing and trust customers, other purchased intangibles, premises and equipment, deferred taxes, and other assets and liabilities. The total estimated fair values do not represent, and should not be construed to represent, the underlying value of the Company.    [The remainder of this page intentionally left blank] - 82-         At December 31, 2020       Carrying Amount     Estimated Fair Value     Quoted Prices in Active Markets for Identical Assets (Level 1)     Significant Other Observable Inputs (Level 2 )     Significant Unobservable Inputs (Level 3 )   Financial Assets:   (In thousands)   Cash and due from banks   $ 621,275     $ 621,275     $ 621,275     $ 0     $ 0   Debt securities held to maturity     515,589       529,678       0       529,678       0   Loans     1,232,389       1,290,938       0       0       1,290,938                                             Financial Liabilities:                                         Deposits   $ 5,687,979     $ 5,688,049     $ 0     $ 5,531,590     $ 156,459   Short-term borrowed funds     102,545       102,545       0       102,545       0       At December 31, 2019     At December 31, 2023     Carrying Amount     Estimated Fair Value     Quoted Prices in Active Markets for Identical Assets (Level 1)     Significant Other Observable Inputs (Level 2 )     Significant Unobservable Inputs (Level 3 )     Carrying Amount     Estimated Fair Value     Quoted Prices in Active Markets for Identical Assets (Level 1)     Significant Other Observable Inputs (Level 2 )     Significant Unobservable Inputs (Level 3 )   Financial Assets:   (In thousands)     (In thousands)   Cash and due from banks   $ 373,421     $ 373,421     $ 373,421     $ 0     $ 0     $ 190,314     $ 190,314     $ 190,314     $ -     $ -   Debt securities held to maturity   738,072     744,296     0     744,296     0     878,396     849,562     -     849,562     -   Loans   1,107,180     1,152,949     0     0     1,152,949     849,735     847,031     -     -     847,031       Financial Liabilities:                                                             Deposits   $ 4,812,621     $ 4,810,934     $ 0     $ 4,643,284     $ 167,650     $ 5,474,267     $ 5,474,012     $ -     $ 5,377,465     $ 96,547   Short-term borrowed funds   30,928     30,928     0     30,928     0     58,162     58,162     -     58,162     -         At December 31, 2022       Carrying Amount     Estimated Fair Value     Quoted Prices in Active Markets for Identical Assets (Level 1)     Significant Other Observable Inputs (Level 2 )     Significant Unobservable Inputs (Level 3 )   Financial Assets:   (In thousands)   Cash and due from banks   $ 294,236     $ 294,236     $ 294,236     $ -     $ -   Debt securities held to maturity     915,913       873,511       -       873,511       -   Loans     938,204       905,720       -       -       905,720                                             Financial Liabilities:                                         Deposits   $ 6,225,290     $ 6,224,791     $ -     $ 6,094,535     $ 130,256   Short-term borrowed funds     57,792       57,792       -       57,792       -     The majority of the Company’s standby letters of credit and other commitments to extend credit carry current market interest rates if converted to loans. No premium or discount was ascribed to these commitments because virtually all funding would be at current market rates.     Note 12: Commitments and Contingent Liabilities   Loan commitments are agreements to lend to a customer provided there is no violation of any condition established in the agreement. Certain agreements provide the Company the right to cancel or reduce its obligations to lend to customers. The portions that are not unconditionally cancellable unconditionally by the Company aggregated $37,456$29,958 thousand at December 31, 2020.2023 and $31,889 thousand at December 31, 2022. Commitments generally have fixed expiration dates or other termination clauses. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future funding requirements. Loan commitments are subject to the Company’s normal credit policies and collateral requirements. Unfunded loan commitments were $277,878$206,028 thousand at December 31, 20202023 and $265,311$202,696 thousand at December 31, 2019.2022. Standby letters of credit commit the Company to make payments on behalf of customers when certain specified future events occur. Standby letters of credit are primarily issued to support customers’ short-term financing requirements and must meet the Company’s normal credit policies and collateral requirements. Financial and performance standby letters of credit outstanding totaled $2,357$2,044 thousand at December 31, 20202023 and $3,099$1,948 thousand at December 31, 2019.2022. The Company had 0 commitments outstandingCommitments for commercial and similar letters of credit totaled $95 thousand at December 31, 20202023 and$95 thousand at December 31, 2019.2022. The Company had $580 thousand and $550$1,000 thousand in outstanding full recourse guarantees to a 3thirdrd party credit card company at December 31, 20202023 and $950 thousand at December 31, 2019, respectively. The Company adopted the ASU 2016-13 provisions on a modified retrospective basis on January 1, 2020.2022. At December 31, 2020,2023, the Company had a reserve for unfunded commitments of $101$201 thousand for the above-mentioned loan commitments of $37,456$29,958 thousand that are not unconditionally cancellable unconditionally by the Company. The Company’s reserve for unfunded commitments was $2,160$201 thousand at December 31, 2019.2022. The reserve for unfunded commitments is included in other liabilities.   The Company determined that it will be obligated to provide refunds of revenue recognized in years prior to 2018 to some customers. The Company initially estimated the probable amount of these obligations to be $5,542 thousand and accrued a liability for such amount in 2017; based on additional information received in the second quarter 2019, the Company increased such liability to $5,843 thousand by recognizing an expense of $301 thousand. During the year ended December 31, 2020, the Company paid $4,410 thousand to customers eligible for refunds. The remaining obligations at December 31, 2020 was $1,433 thousand, included in other liabilities. - 83- Due to the nature of its business, the Company is subject to various threatened or filed legal cases. Based on the advice of legal counsel, the Company does not expect such cases will have a material, adverse effect on its financial position or results of operations. Legal liabilities are accrued when obligations become probable and the amount can be reasonably estimated.   - 83-   Note 13: Retirement Benefit Plans   The Company sponsors a qualified defined contribution Deferred Profit-Sharing Plan covering substantially all of its salaried employees with one or more years of service. The costs charged to noninterest expense related to discretionary Company contributions to the Deferred Profit-Sharing Plan were $917$1,090 thousand in 2020,2023, $1,000$1,030 thousand in 20192022, and $1,057$1,028 thousand in 2018.2021.   The Company also sponsors a qualified defined contribution Tax Deferred Savings/Retirement Plan (ESOP) covering salaried employees who become eligible to participate upon completion of a 90-day introductory period. The Tax Deferred Savings/ Retirement Plan (ESOP) allows employees to defer, on a pretax or after-tax basis, a portion of their salaries as contributions to this Plan. Participants may invest in several funds, including one fund that invests primarily in Westamerica Bancorporation common stock. The Company funds contributions to match participating employees’ contributions, subject to certain limits. The matching contributions charged to compensation expense were $995$873 thousand in 2020,2023, $986$921 thousand in 20192022, and $1,052$972 thousand in 2018.2021.   The Company offers a continuation of group insurance coverage to eligible employees electing early retirement, for the period from the date of retirement until age 65. For eligible employees the Company pays a portion of these early retirees’ group insurance premiums. The Company also reimburses a portion of Medicare Part B premiums for all qualifying retirees over age 65 and, if eligible, their spouses. Eligibility for post-retirement medical benefits is based on age and years of service, and restricted to employees hired prior to February 1, 2006 who elect early retirement prior to January 1, 2021.2024. The Company uses an actuarial-based accrual method of accounting for post-retirement benefits. The Company used a December 31 measurement date for determining post-retirement medical benefit calculations.   The following tables set forth the net periodic post-retirement benefit cost and the change in the benefit obligation for the year ended December 31 and the funded status of the post-retirement benefit plan as of December 31:   Net Periodic Benefit Cost          At December 31,       2020     2019     2018       (In thousands)   Service ( benefit) cost   $ (35 )   $ (57 )   $ 24   Interest cost     52       72       72   Amortization of unrecognized transition obligation     0       0       0   Net periodic cost (benefit)   $ 17     $ 15     $ 96       At December 31,       2023     2022     2021       (In thousands)   Service benefit   $ (56 )   $ (19 )   $ (15 ) Interest cost     70       38       30   Net periodic cost   $ 14     $ 19     $ 15     Other Changes in Benefit ObligationsRecognized in Other ComprehensiveIncome  Obligation and Funded Status     Amortization of unrecognized transition obligation, net of tax     0       0       0   Total recognized in net periodic cost (benefit) and accumulated other comprehensive income   $ 17     $ 15     $ 96       At December 31,       2023     2022     2021   Change in benefit obligation   (In thousands)   Benefit obligation at beginning of year   $ 1,401     $ 1,527     $ 1,654   Service benefit     (56 )     (19 )     (15 ) Interest cost     70       38       30   Benefits paid     (139 )     (145 )     (142 ) Benefit obligation at end of year   $ 1,276     $ 1,401     $ 1,527   Accumulated post-retirement benefit obligation attributable to:                         Retirees   $ 1,276     $ 1,401     $ 1,527   Other     -       -       -   Total   $ 1,276     $ 1,401     $ 1,527   Fair value of plan assets     -       -       -   Accumulated post-retirement benefit obligation in excess of plan assets   $ 1,276     $ 1,401     $ 1,527     The transition obligation for this post-retirement benefit plan became fully amortized during the year ended December 31, 2017. [The remainder of this page intentionally left blank]   - 84-     Obligation and Funded Status  Additional Information       At December 31,       2020     2019     2018   Change in benefit obligation   (In thousands)   Benefit obligation at beginning of year   $ 1,782     $ 1,913     $ 1,958   Service (benefit) cost     (35 )     (57 )     24   Interest cost     52       72       72   Benefits paid     (145 )     (146 )     (141 ) Benefit obligation at end of year   $ 1,654     $ 1,782     $ 1,913   Accumulated post-retirement benefit obligation attributable to:                         Retirees   $ 1,654     $ 1,782     $ 1,913   Other     0       0       0   Total   $ 1,654     $ 1,782     $ 1,913   Fair value of plan assets     0       0       0   Accumulated post-retirement benefit obligation in excess of plan assets   $ 1,654     $ 1,782     $ 1,913   Additional Information Assumptions     At December 31,     At December 31,     2020     2019     2018     2023     2022     2021       Weighted-average assumptions used to determine benefit obligations                 Discount rate   1.80 %   2.90 %   3.76 %   4.75 %   5.01 %   2.46 % Weighted-average assumptions used to determine net periodic benefit cost                 Discount rate   2.90 %   3.76 %   3.70 %   5.01 %   2.46 %   1.80 %   The above discount rate is based on the expected return of a portfolio of Corporate Aa debt, the term of which approximates the term of the benefit obligations. The Company reserves the right to terminate or alter post-employment health benefits. Post-retirement medical benefits are currently fixed amounts without provision for future increases; as a result, the assumed annual average rate of inflation used to measure the expected cost of benefits covered by this program is zero percent for 20212024 and beyond.       Estimated future benefit payments       (In thousands)   2021   $ 153   2022     153   2023     153   2024     151   2025     146   Years 2026-2030     589   [The remainder of this page intentionally left blank] - 85-     Estimated future benefit payments       (In thousands)   2024   $ 133   2025     133   2026     133   2027     127   2028     118   Years 2029-2033     424       Note 14: Related Party Transactions   Certain of the Directors, executive officers and their associates have had banking transactions with subsidiaries of the Company in the ordinary course of business. The table below reflects information concerning loans to certain directors and executive officers and/or family members during 20202023 and 2019:2022:      2020     2019     2023     2022     (In thousands)     ($ in thousands)       Balance at January 1,   $ 533     $ 577     $ 400     $ 454   Originations   0   ��   0     -     -   Principal reductions     (34 )     (44 )     (51 )     (54 ) Balance at December 31,   $ 499     $ 533     $ 349     $ 400   Percent of total loans outstanding.   0.04 %   0.05 %   0.04 %   0.04 %     Note 15: Regulatory Matters   Payment of dividends to the Company by the Bank is limited under regulations for state chartered banks. The amount that can be paid in any calendar year, without prior approval from regulatory agencies, cannot exceed the net profits (as defined) for the preceding three calendar years less dividends paid. The Company consistently has paid quarterly dividends to its shareholders since its formation in 1972.   [The remainder of this page intentionally left blank] - 85-   Note 16: Other Comprehensive Income (loss)   The components of other comprehensive income (loss) and other related tax effects were:     2020     2023     Before tax     Tax effect     Net of tax     Before tax     Tax effect     Net of tax     (In thousands)     (In thousands)   Debt securities available for sale:                 Net unrealized gains arising during the year   $ 125,519     $ (37,108 )   $ 88,411   Reclassification of gains included in net income     (71 )     21       (50 ) Changes in net unrealized losses arising during the year   $ 93,326     $ (27,591 )   $ 65,735   Reclassification of losses included in net income     125       (37 )     88   Other comprehensive income   $ 125,448     $ (37,087 )   $ 88,361     $ 93,451     $ (27,628 )   $ 65,823       2022       Before tax     Tax effect     Net of tax       (In thousands)   Debt securities available for sale:                         Changes in net unrealized losses/gains arising during the year   $ (434,107 )   $ 128,338     $ (305,769 ) Other comprehensive loss   $ (434,107 )   $ 128,338     $ (305,769 )     2021       Before tax     Tax effect     Net of tax       (In thousands)   Debt securities available for sale:                         Changes in net unrealized gains arising during the year   $ (91,891 )   $ 27,167     $ (64,724 ) Reclassification of gains included in net income     (34 )     10       (24 ) Other comprehensive loss   $ (91,925 )   $ 27,177     $ (64,748 )       2019       Before tax     Tax effect     Net of tax       (In thousands)   Debt securities available for sale:                         Net unrealized gains arising during the year   $ 93,936     $ (27,771 )   $ 66,165   Reclassification of gains included in net income     (167 )     49       (118 ) Other comprehensive income   $ 93,769     $ (27,722 )   $ 66,047   Accumulated other comprehensive income (loss) balances were:       2018       Before tax     Tax effect     Net of tax       (In thousands)   Debt securities available for sale:                         Net unrealized losses arising during the year   $ (27,939 )   $ 8,258     $ (19,681 ) Reclassification of losses included in net income     0       0       0   Other comprehensive loss   $ (27,939 )   $ 8,258     $ (19,681 )     Accumulated Other Comprehensive Income (Loss)       (In thousands)   Balance, December 31, 2020   $ 114,412   Changes in unrealized gains on debt securities available for sale, net of tax     (64,748 ) Balance, December 31, 2021     49,664   Changes in unrealized losses/gains on debt securities available for sale, net of tax     (305,769 ) Balance, December 31, 2022     (256,105 ) Changes in unrealized losses on debt securities available for sale, net of tax     65,823   Balance, December 31, 2023   $ (190,282 )   [The remainder of this page intentionally left blank]   - 86-     Accumulated other comprehensive income (loss) balances were:     Accumulated Other Comprehensive (Loss) Income             Balance, December 31, 2017   $ (16,832 ) Cumulative effect of equity securities losses reclassified     142   Adjusted Balance, January 1, 2018     (16,690 ) Reclass stranded tax effects resulting from the Tax Cuts and Jobs Act of2017     (3,625 ) Changes in unrealized gains (losses) on debt securities available for sale, net of tax     (19,681 ) Balance, December 31, 2018     (39,996 ) Changes in unrealized gains (losses) on debt securities available for sale, net of tax     66,047   Balance, December 31, 2019     26,051   Changes in unrealized gains (losses) on debt securities available for sale, net of tax     88,361   Balance, December 31, 2020     114,412     Note 17: Earnings Per Common Share   The table below shows earnings per common share and diluted earnings per common share. Basic earnings per common share are computed by dividing net income by the average number of common shares outstanding during the period. Diluted earnings per common share are computed by dividing net income by the average number of common shares outstanding during the period plus the impact of common stock equivalents.     For the Years Ended December 31,     For the Years Ended December 31,     2020     2019     2018     2023     2022     2021     (In thousands, except per share data)     (In thousands, except per share data)   Net income (numerator)   $ 80,413     $ 80,389     $ 71,564     $ 161,768     $ 122,034     $ 86,509   Basic earnings per common share                                     Weighted average number of common shares outstanding - basic (denominator)     26,942       26,956       26,649       26,703       26,895       26,855   Basic earnings per common share   $ 2.98     $ 2.98     $ 2.69     $ 6.06     $ 4.54     $ 3.22   Diluted earnings per common share                                     Weighted average number of common shares outstanding - basic   26,942     26,956     26,649     26,703     26,895     26,855   Add common stock equivalents for options     18       50       107       3       12       15   Weighted average number of common shares outstanding - diluted (denominator)     26,960       27,006       26,756       26,706       26,907       26,870   Diluted earnings per common share   $ 2.98     $ 2.98     $ 2.67     $ 6.06     $ 4.54     $ 3.22     For the years ended December 31, 2020,2023, 20192022 and 2018,2021, options to purchase 577983 thousand, 382787 thousand and 423649 thousand shares of common stock, respectively, were outstanding but not included in the computation of diluted earnings per common share because the option exercise price exceeded the fair value of the stock such that their inclusion would have had an anti-dilutive effect.   [The remainder of this page intentionally left blank] - 87-   Note 18: Westamerica Bancorporation (Parent Company Only Condensed Financial Information)   Statements of Income and Comprehensive Income     For the Years Ended December 31,     For the Years Ended December 31,     2020     2019     2018     2023     2022     2021     (In thousands)     (In thousands)   Dividends from subsidiaries   $ 10,783     $ 80,067     $ 43,892     $ 110,769     $ 70,267     $ 29,279   Interest income   56     54     33     57     49     44   Other income     11,438       8,778       9,447       11,935       11,386       11,608   Total income     22,277       88,899       53,372       122,761       81,702       40,931   Salaries and benefits   7,107     6,978     7,575     5,710     5,832     6,612   Other expense     2,206       3,729       3,181       2,315       2,609       2,279   Total expense     9,313       10,707       10,756       8,025       8,441       8,891   Income before taxes and equity in undistributed income of subsidiaries   12,964     78,192     42,616     114,736     73,261     32,040   Income tax (expense) benefit   (454 )   636     919   Income tax expense   (1,179 )   (881 )   (645 ) Earnings of subsidiaries greater than subsidiary dividends     67,903       1,561       28,029       48,211       49,654       55,114   Net income     80,413       80,389       71,564       161,768       122,034       86,509   Other comprehensive income (loss), net of tax     88,361       66,047       (19,681 )     65,823       (305,769 )     (64,748 ) Comprehensive income   $ 168,774     $ 146,436     $ 51,883   Comprehensive income (loss)   $ 227,591     $ (183,735 )   $ 21,761     Balance Sheets     At December 31,       2020     2019       (In thousands)   Assets                 Cash   $ 78,364     $ 122,663   Investment in Westamerica Bank     730,248       573,931   Investment in non-bank subsidiaries     455       455   Premises and equipment, net     10,459       11,006   Accounts receivable from Westamerica Bank     257       231   Other assets     40,852       37,645   Total assets   $ 860,635     $ 745,931   Liabilities                 Accounts payable to Westamerica Bank   $ 29     $ 33   Other liabilities     15,797       14,481   Total liabilities     15,826       14,514   Shareholders' equity     844,809       731,417   Total liabilities and shareholders' equity   $ 860,635     $ 745,931   [The remainder of this page intentionally left blank]   - 8887-     Balance Sheets     At December 31,       2023     2022       (In thousands)   Assets                 Cash   $ 154,999     $ 99,478   Investment in Westamerica Bank     578,535       464,500   Investment in non-bank subsidiaries     451       453   Premises and equipment, net     9,123       9,411   Accounts receivable from Westamerica Bank     341       245   Other assets     45,694       44,831   Total assets   $ 789,143     $ 618,918   Liabilities                 Accounts payable to Westamerica Bank   $ 71     $ 40   Other liabilities     16,178       16,768   Total liabilities     16,249       16,808   Shareholders' equity     772,894       602,110   Total liabilities and shareholders' equity   $ 789,143     $ 618,918   Statements of Cash Flows     For the Years Ended December 31,     For the Years Ended December 31,     2020     2019     2018     2023     2022     2021     (In thousands)     (In thousands)   Operating Activities                                     Net income   $ 80,413     $ 80,389     $ 71,564     $ 161,768     $ 122,034     $ 86,509   Adjustments to reconcile net income to net cash provided by operating activities:                 Depreciation and amortization   608     449     361     539     563     569   (Increase) decrease in accounts receivable from affiliates   (150 )   80     (43 ) Decrease (increase) in accounts receivable from affiliates   1,224     (771 )   117   Increase in other assets   (2,421 )   (71 )   (2,638 )   (2,048 )   (1,639 )   (1,223 ) Stock option compensation expense   1,875     1,744     1,988     1,356     1,309     1,419   Provision (benefit) for deferred income tax   428     (315 )   5,028   Increase in other liabilities   855     856     978   Provision for deferred income tax   1,179     881     645   (Decrease) increase in other liabilities   (1,326 )   (38 )   254   Earnings of subsidiaries greater than subsidiary dividends   (67,903 )   (1,561 )   (28,029 )     (48,211 )     (49,654 )     (55,114 ) Life insurance gains   0     0     (585 ) Gain on disposal of premises and equipment     (61 )     (1,055 )     (538 ) Net Cash Provided by Operating Activities     13,644       80,516       48,086       114,481       72,685       33,176   Investing Activities                                     Proceeds from life insurance policies     0       0       1,169   Net Cash Provided by Investing Activities     0       0       1,169   Purchases of equipment     (209 )     (5 )     (78 ) Net Cash Used in Investing Activities     (209 )     (5 )     (78 ) Financing Activities                                     Exercise of stock options   2,838     13,699     13,373     950     2,255     3,017   Retirement of common stock   (16,496 )   (488 )   (524 )   (13,747 )   (218 )   (232 ) Common stock dividends paid     (44,285 )     (43,942 )     (42,635 )     (45,954 )     (45,182 )     (44,304 ) Net Cash Used in Financing Activities     (57,943 )     (30,731 )     (29,786 )     (58,751 )     (43,145 )     (41,519 ) Net change in cash and due from banks   (44,299 )   49,785     19,469     55,521     29,535     (8,421 ) Cash and due from banks at beginning of period     122,663       72,878       53,409       99,478       69,943       78,364   Cash and due from banks at end of period   $ 78,364     $ 122,663     $ 72,878     $ 154,999     $ 99,478     $ 69,943   Supplemental Cash Flow Disclosures:                 Supplemental disclosure of cash flow activities:                 Interest paid for the period   $ 0     $ 0     $ 0   Income tax payments for the period   26,462     24,491     13,627     $ 64,017     39,840     27,673     [The remainder of this page intentionally left blank] - 88- Note 19: Quarterly Financial Information (Unaudited)     For the Three Months Ended       March 31,     June 30,     September 30,     December 31,       (In thousands, except per share data and       price range of common stock)   2023                                 Interest and loan fee income   $ 69,624     $ 70,489     $ 72,848     $ 71,052   Net interest income     69,153       69,882       71,715       69,373   (Reversal of ) provision for loan losses     (1,550 )     -       400       -   Noninterest income     10,549       10,700       11,281       10,992   Noninterest expense     26,210       25,839       25,650       25,517   Income before taxes     55,042       54,743       56,946       54,848   Net income     40,451       40,248       41,601       39,468   Basic earnings per common share     1.51       1.51       1.56       1.48   Diluted earnings per common share     1.51       1.51       1.56       1.48   Dividends paid per common share     0.42       0.42       0.44       0.44   Price range, common stock     44.04 - 58.34       36.85 - 43.50       38.87 - 49.87       42.59 - 57.21   2022                                 Interest and loan fee income   $ 43,759     $ 47,997     $ 60,802     $ 69,198   Net interest income     43,279       47,514       60,315       68,723   Provision for loan losses     -       -       -       -   Noninterest income     11,576       11,264       11,818       10,463   Noninterest expense     24,875       24,629       24,767       25,090   Income before taxes     29,980       34,149       47,366       54,096   Net income     22,616       25,314       34,760       39,344   Basic earnings per common share     0.84       0.94       1.29       1.46   Diluted earnings per common share     0.84       0.94       1.29       1.46   Dividends paid per common share     0.42       0.42       0.42       0.42   Price range, common stock     57.54 - 62.76       55.66 - 61.30       52.29 - 61.52       52.22 - 63.39   2021                                 Interest and loan fee income   $ 42,316     $ 44,276     $ 43,810     $ 43,041   Net interest income     41,841       43,792       43,318       42,537   Provision for loan losses     -       -       -       -   Noninterest income     10,189       11,032       11,282       10,842   Noninterest expense     24,906       24,291       24,697       23,912   Income before taxes     27,124       30,533       29,903       29,467   Net income     20,147       22,579       22,063       21,720   Basic earnings per common share     0.75       0.84       0.82       0.81   Diluted earnings per common share     0.75       0.84       0.82       0.81   Dividends paid per common share     0.41       0.41       0.41       0.42   Price range, common stock     55.82 - 66.43       57.67 - 64.80       54.03 - 58.55       53.78 - 58.00   [The remainder of this page intentionally left blank]       - 89-     Note 19: Quarterly Financial Information (Unaudited)     For the Three Months Ended       March 31,     June 30,     September 30,     December 31,       (In thousands, except per share data and       price range of common stock)   2020                                 Interest and loan fee income   $ 39,991     $ 41,539     $ 41,365     $ 42,961   Net interest income     39,549       41,104       40,899       42,480   Provision for loan losses     4,300       0       0       0   Noninterest income     11,648       9,554       10,476       13,959   Noninterest expense     24,664       24,754       24,603       24,545   Income before taxes     22,233       25,904       26,772       31,894   Net income     16,962       19,562       20,051       23,838   Basic earnings per common share     0.63       0.72       0.74       0.89   Diluted earnings per common share     0.63       0.72       0.74       0.89   Dividends paid per common share     0.41       0.41       0.41       0.41   Price range, common stock   47.37 - 68.01     53.40 - 64.86     51.84 - 63.58     51.49 - 59.70   2019                                 Interest and loan fee income   $ 39,483     $ 39,626     $ 39,695     $ 39,878   Net interest income     38,989       39,139       39,240       39,427   Provision for loan losses     0       0       0       0   Noninterest income     11,579       12,288       11,809       11,732   Noninterest expense     25,183       25,561       24,033       24,209   Income before taxes     25,385       25,866       27,016       26,950   Net income     19,646       19,625       20,390       20,728   Basic earnings per common share     0.73       0.73       0.76       0.77   Diluted earnings per common share     0.73       0.73       0.75       0.77   Dividends paid per common share     0.40       0.41       0.41       0.41   Price range, common stock   56.82 - 64.48     59.51 - 64.82     59.26 - 64.56     60.65 - 68.58   2018                                 Interest and loan fee income   $ 36,315     $ 37,346     $ 38,614     $ 39,448   Net interest income     35,856       36,887       38,087       38,934   Provision for loan losses     0       0       0       0   Noninterest income     11,955       11,769       12,528       11,897   Noninterest expense     26,022       25,741       29,366       25,787   Income before taxes     21,789       22,915       21,249       25,044   Net income     17,506       18,010       16,993       19,055   Basic earnings per common share     0.66       0.68       0.64       0.71   Diluted earnings per common share     0.66       0.67       0.63       0.71   Dividends paid per common share     0.40       0.40       0.40       0.40   Price range, common stock   55.72 - 62.52     55.81 - 60.68     57.56 - 64.52     52.75 - 63.20   [The remainder of this page intentionally left blank] - 90- Note 20: Impact of COVID-19 The COVID-19 Coronavirus Pandemic Will Have an Uncertain Impact on the Company's Financial Condition and Results of Operations The COVID-19 coronavirus pandemic caused escalating infections in the United States beginning in the first quarter of 2020 that continued through the fourth quarter of 2020 and may continue for some time. The spread of the outbreak has disrupted the United States economy including banking and other financial activity in the market areas in which the Company and the Bank operate.  Regions and states of the United States of America have implemented varying degrees of "stay at home" directives in an effort to prevent the spread of the virus. On March 19, 2020, the Governor of the State of California ordered all individuals living in the State of California to stay within their residence to prevent the spread of the novel coronavirus and many businesses have suspended or reduced business activities. The California "stay at home" directive excludes essential businesses, including banks, and the Bank remains open and fully operational. These "stay at home" directives have, however, significantly reduced economic activity in the United States and the State of California. In the second and third quarters of 2020 the “stay at home” directives were gradually lifted in varying stages in counties of the State of California. Counties with high infection rates delayed reopening and restrictions on certain economic activity remained. When infections increased in the fourth quarter 2020 restrictions were re-imposed to some degree. California-based claims for unemployment rose and remained elevated during 2020. The Bank's deposits are exclusively sourced within California and its loans are primarily to borrowers domiciled within California. Demand for the Bank's products and services, such as loans and deposits, could be affected as a result of the decline in economic activity within the state.  The Bank's investment portfolio contains bonds for which the source of repayment is domestic mortgage repayments, domestic municipalities throughout the United States, and domestic and global corporations. The value of the Bank's investment portfolio may decline if, for example, the general economy deteriorates, inflation increases, credit ratings decline, the issuers’ financial condition deteriorates or the liquidity for debt securities declines. In response to the pandemic, the Federal Reserve has engaged significant levels of monetary policy to provide liquidity and credit facilities to the financial markets. On March 15, 2020, the Federal Open Market Committee ("FOMC") reduced the target range for the federal funds rate to 0 to 0.25 percent; relatedly, the FOMC reduced the interest rate paid on deposit balances to 0.10 percent effective March 16, 2020, all of which may negatively impact net interest income. The Bank maintains deposit balances at the Federal Reserve Bank; the amount that earns interest is identified in the Company's financial statements as "interest-bearing cash". In response to the pandemic, the United States federal government enacted the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") on March 27, 2020, providing an estimated $2 trillion fiscal stimulus to the United States economy.  The CARES Act established the Paycheck Protection Program (PPP) with $350 billion to provide businesses with federally guaranteed loans to support payroll and certain operating expenses. The loans were guaranteed by the United States Small Business Administration (“SBA”) and funded through banks.  In April 2020, the PPP program was expanded with an additional $310 billion. During 2020, the Bank funded $249 million in government guaranteed PPP loans which meaningfully increased interest-earning assets and related interest and fee income. PPP loans, net of deferred fees and costs, were $187 million at December 31, 2020. On April 7, 2020, the U.S. banking agencies issued an Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (Revised). The statement describes accounting for COVID-19-related loan modifications, including clarifying the interaction between current accounting rules and the temporary relief provided by the CARES Act. The Bank continues to work with loan customers requesting deferral of loan payments due to economic weakness caused by the pandemic. At December 31, 2020, consumer loans granted loan deferrals totaled $2.5 million, commercial real estate loans with deferred payments totaled $7.8 million, primarily for hospitality and retail properties, and commercial loans with deferred payments totaled $33 thousand. On December 27, 2020, the United States federal government enacted the Consolidated Appropriations Act, 2020 (CAA), which provided $900 billion in additional federal stimulus. Among other provisions, the CAA provided $284 billion for the PPP program and allowed businesses to apply for a second PPP loan. The extent of the spread of the coronavirus, its ultimate containment and its continuing effects on the economy and the Company are uncertain at this time. The effectiveness of the Federal Reserve Board's monetary policies and the federal government's fiscal policies in stimulating the United States economy is uncertain at this time. - 91- Management expects the Company's net interest margin and non-interest income to decline and credit-related losses to increase for an uncertain period given the decline in economic activity occurring due to the coronavirus. The amount of impact on the Company's financial results is uncertain. In addition, the Company's future success and profitability substantially depends upon the skills and experience of its executive officers and directors, many of whom have held positions with the Company for many years. The unanticipated loss or unavailability of key employees due to the outbreak could adversely affect the Company's ability to operate its business or execute its business strategy. There are no comparable recent events that provide guidance as to the effect the spread of the COVID-19 pandemic may have, and, as a result, the Company cannot accurate predict the full extent of the impacts on the Company’s business, operations or the economy as a whole. However, the effects could have a material impact on the Company’s results of operations and heighten many of the other risks factors described in this Report. Any one or a combination of the factors identified above, or other factors, could materially adversely affect the Company's business, financial condition, results of operations and prospects. Declines in Oil Prices Could Have an Impact on the Company's Financial Condition and Results of Operations Declines in oil prices could negatively affect the financial results of industrial sector-based and energy sector-based corporate issuers of corporate bonds owned by the Company. The Company’s corporate debt securities include 14 issuers in industrial and energy sectors with aggregate amortized cost of $275.1 million and fair value of $291.9 million at December 31, 2020. These securities continue to be investment grade rated by a major rating agency. The Company’s participation in the SBA PPP loan program exposes it to risks of noncompliance with the PPP and litigation, which could have a material adverse impact on the Company’s business, financial condition and results of operations. The Company is a participating lender in the PPP. The SBA guarantees 100% of loans funded under the PPP. Loan proceeds used for eligible payroll and certain other operating costs are forgiven with repayment of loan principal and accrued interest made by the SBA. There is some ambiguity in the laws, rules and guidance regarding the operation of the PPP, which exposes the Company to potential risks relating to noncompliance with the PPP. Any financial liability, litigation costs or reputational damage related to the PPP or related litigation or regulatory enforcement actions could have a material adverse impact on the Company’s business, financial condition and results of operations. In addition, the Company may be exposed to credit risk on PPP loans if the SBA determines that there is a deficiency in the manner in which the loan was originated, funded, or serviced. If the SBA identifies a deficiency, it could deny its liability under the guaranty, reduce the amount of the guaranty, or, if it has already paid under the guaranty, seek recovery of any loss related to the deficiency from the Company. [The remainder of this page intentionally left blank] -92- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   Shareholders and the Board of Directors of Westamerica Bancorporation San Rafael, California   Opinions on the Financial Statements and Internal Control over Financial Reporting   We have audited the accompanying consolidated balance sheets of Westamerica Bancorporation (the "Company") as of December 31, 20202023 and 2019,2022, the related consolidated statements of income, comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2020,2023, and the related notes (collectively referred to as the "financial statements"). We also have audited the Company’s internal control over financial reporting as of December 31, 2020,2023, based on criteria established in Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).   In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 20202023 and 2019,2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 20202023 in conformity with accounting principles generally accepted in the United States of America.  Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020,2023, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO.   Change in Accounting Principle As discussed in Note 1 to the financial statements, the Company has changed its method of accounting for credit losses effective January 1, 2020 due to the adoption of Financial Accounting Standard Board (FASB) Accounting Standards Codification No. 326, Financial Instruments – Credit Losses (ASC 326). The Company adopted the new credit loss standard using the modified retrospective method provided in Accounting Standards Update No. 2016-13 such that prior period amounts are not adjusted and continue to be reported in accordance with previously applicable generally accepted accounting principles. The adoption of the new credit loss standard and its subsequent application is also communicated as a critical audit matter below.  Basis for Opinions   The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting.  Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.   We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.   Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances.  We believe that our audits provide a reasonable basis for our opinions.   (Continued) -93--90-     Definition and Limitations of Internal Control Over Financial Reporting   A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.   Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.   Critical Audit Matter   The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.  The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.   Allowance for Credit Losses on Loans – Reasonable and Supportable Forecasts - Refer to Notes 1 and 3 to the financial statements (also see change in accounting principle explanatory paragraph above)   The Company adopted ASC 326, Financial Instruments – Credit Losses, on January 1, 2020, using the modified retrospective method. The allowance for credit losses on loans is an accounting estimate of expected credit losses over the estimated life of financial assets carried at amortized cost and off-balance-sheet credit exposures.loans. ASC 326, Financial Instruments – Credit Losses, requires a financial asset (or a group of financial assets), including the Company's loan portfolio, measured at amortized cost, to be presented at the net amount expected to be collected. The Company disclosed the impact of the adoption of this standard on January 1, 2020, with an increase to the allowance for credit losses on loans of $2,017,000. The provision for credit losses on loans for the year ended December 31, 2020 was $4,307,000 and the allowance for credit losses on loans as of December 31, 20202023 was $23,854,000.$16,867,000.   The Company estimates the amount of expected losses over the life of its existing loan portfolio and establishes an allowance for credit losses. Loans that share common risk characteristics are segregated into pools based on those characteristics. Historical loss rates are determined for each pool. Historical loss rates are adjusted for estimated losses based on current conditions and management’s reasonable and supportable forecasts of economic trends over a forecast horizon of up to two years. Significant management judgments are required in the development and application of reasonable and supportable forecasts.   We identified the development and application of reasonable and supportable forecasts used in the implementation and subsequent application of ASC 326 as a critical audit matter because of the significant auditor judgment and audit effort to evaluate the subject judgments made by management, including the need to involve more experienced audit personnel and valuation specialists.personnel.   The primary procedures we performed to address this critical audit matter included:   ● Testing the effectiveness of controls over the development and application of reasonable and supportable forecasts, including controls addressing: -91-   o The conceptual design of the reasonable and supportable forecasts methodology,   o Significant judgments and assumptions in the reasonable and supportable forecasts methodology, including the selection and application of economic variables, and   o The accuracy of the reasonable and supportable forecasts calculation, including the completeness, accuracy and relevance of underlying data.calculation.   (Continued) -94- ● Substantively testing management’s process for the development and application of reasonable and supportable forecasts, including:   o Evaluation of the conceptual design of the reasonable and supportable forecasts methodology,   o Evaluation of significant judgments and assumptions in the reasonable and supportable forecasts methodology, including the selection and application of economic variables, and   o Evaluation of the accuracy of the reasonable and supportable forecasts calculation, including the completeness, accuracy and relevance of underlying data.calculation.   /s/ Crowe LLP                                                                      Crowe LLP   We have served as the Company's auditor since 2015.   Sacramento, California February 25, 202128, 2024                 -95--92-     ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE   None.   ITEM 9A. CONTROLS AND PROCEDURES   The Company’s principal executive officer and principal financial officer have evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended, as of December 31, 2020.2023.   Based upon their evaluation, the principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are effective to ensure that material information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported as and when required and that such information is communicated to the Company’s management, including the principal executive officer and the principal financial officer, to allow for timely decisions regarding required disclosures. The evaluation did not identify any change in the Company’s internal control over financial reporting that occurred during the quarter ended December 31, 20202023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Management’s Report on Internal Control Over Financial Reporting and the attestation Report of Independent Registered Public Accounting Firm are found on pages 4951 and 93,90, respectively.   ITEM 9B. OTHER INFORMATION   None.Rule 10b5-1 Trading Plans During the quarter ended December 31, 2023, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement” as defined in Item 408 of Regulation S-K. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable.   PART III   ITEM 10. DIRECTORS, EXECUTIVE OFFICERS OF THE REGISTRANT AND CORPORATE GOVERNANCE   The information required by this Item 10 of this Annual Report on Form 10-K is incorporated by reference from the information contained in the Company’s Proxy Statement for its 20212024 Annual Meeting of Shareholders which will be filed pursuant to Regulation 14A of the Exchange Act. The executive officers of the Company and Westamerica Bank serve at the pleasure of the Board of Directors and are subject to annual appointment by the Board at its first meeting following the Annual Meeting of Shareholders. It is anticipated that each of the executive officers listed in the Company’s Proxy Statement for its 2021 Annual Meeting of Shareholders will be reappointed to serve in such capacities at that meeting.   The Company has adopted a Code of Ethics (as defined in Item 406 of Regulation S-K of the Securities Act of 1933) that is applicable to its senior financial officers including its chief executive officer, chief financial officer, and principal accounting officer.   ITEM 11. EXECUTIVE COMPENSATION   The information required by this Item 11 of this Annual Report on Form 10-K is incorporated by reference from the information contained in the Company’s Proxy Statement for its 20212024 Annual Meeting of Shareholders which will be filed pursuant to Regulation 14A of the Exchange Act.   [The remainder of this page intentionally left blank] -96--93-     ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS   The information required by this Item 12 of this Annual Report on Form 10-K is incorporated by reference from the information contained in the Company’s Proxy Statement for its 20212024 Annual Meeting of Shareholders which will be filed pursuant to Regulation 14A of the Exchange Act.   Securities Authorized for Issuance Under Equity Compensation Plans   The following table summarizes the status of the Company’s equity compensation plans as of December 31, 2020:2023:        At December 31, 2020   Plan category   Number of securities to be issued upon exercise of outstanding options, warrants and rights     Weighted-average exercise price of outstanding options, warrants and rights     Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))       (In thousands, except exercise price)       (a)     (b)     (c)   Equity compensation plans approved by security holders     693     $ 61       1,131   Equity compensation plans not approved by security holders     -       N/A       -   Total     693     $ 61       1,131       At December 31, 2023   Plan category   Number of securities to be issued upon exercise of outstanding options, warrants and rights     Weighted-average exercise price of outstanding options, warrants and rights     Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))       (In thousands, except exercise price)       (a)     (b)     (c)   Equity compensation plans approved by security holders     973     $ 60       705   Equity compensation plans not approved by security holders     -       N/A       -   Total     973     $ 60       705     ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE   The information required by this Item 13 of this Annual Report on Form 10-K is incorporated by reference from the information contained in the Company’s Proxy Statement for its 20212024 Annual Meeting of Shareholders, which will be filed pursuant to Regulation 14A of the Exchange Act.   ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES   The information required by this Item 14 of this Annual Report on Form 10-K is incorporated by reference from the information contained in the Company’s Proxy Statement for its 20212024 Annual Meeting of Shareholders which will be filed pursuant to Regulation 14A of the Exchange Act.   PART IV   ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES   (a) 1. Financial Statements:   See Index to Financial Statements on page 48.50. The consolidated financial statements included in Item 8 are filed as part of this Report. (a) 2. Financial statement schedules required. No financial statement schedules are filed as part of this Report since the required information is included in the consolidated financial statements, including the notes thereto, or the circumstances requiring inclusion of such schedules are not present. (a) 3. Exhibits: The following documents are included or incorporated by reference in this Annual Report on Form 10-K.10‑K.   -97--94-     Exhibit Number 3(a) Restated Articles of Incorporation (composite copy), incorporated by reference to Exhibit 3(a) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997, filed with the Securities and Exchange Commission on March 30, 1998. 3(b) By-laws, as amended (composite copy), incorporated by reference to Exhibit 3.2 to the Registrant’s Form 8-K, filed with the Securities and Exchange Commission on March 26, 2018.April 28, 2023. 3(c) Certificate of Determination of Fixed Rate Cumulative Perpetual Preferred Stock, Series A of Westamerica Bancorporation dated February 10, 2009, incorporated by reference to Exhibit 99.1 to the Registrant’s Form 8-K, filed with the Securities and Exchange Commission on February 13, 2009. 4.1 Description of registered securities, incorporated by reference to Exhibit 4.1 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the Securities and Exchange Commission on February 28, 2020. 10(a)* Amended and Restated Stock Option Plan of 1995, incorporated by reference to Exhibit A to the Registrant’s definitive Proxy Statement pursuant to Regulation 14(a) filed with the Securities and Exchange Commission on March 17, 2003. 10(d)* Westamerica Bancorporation Chief Executive Officer Deferred Compensation Agreement by and between Westamerica Bancorporation and David L. Payne, dated December 18, 1998 incorporated by reference to Exhibit 10(e) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999, filed with the Securities and Exchange Commission on March 29, 2000. 10(e)* Description of Executive Cash Bonus Program incorporated by reference to Exhibit 10(e) to Exhibit 2.1 of Registrant’s Form 8-K filed with the Securities and Exchange Commission on March 14, 2005. 10(f)* Non-Qualified Annuity Performance Agreement with David L. Payne dated November 19, 1997 incorporated by reference to Exhibit 10(f) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004, filed with the Securities and Exchange Commission on March 15, 2005. 10(g)* Amended and Restated Westamerica Bancorporation Stock Option Plan of 1995 Nonstatutory Stock Option Agreement Form incorporated by reference to Exhibit 10(g) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004, filed with the Securities and Exchange Commission on March 15, 2005. 10(h)* Amended and Restated Westamerica Bancorporation Stock Option Plan of 1995 Restricted Performance Share Grant Agreement Form incorporated by reference to Exhibit 10(h) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004, filed with the Securities and Exchange Commission on March 15, 2005. 10(i)* Amended Westamerica Bancorporation and Subsidiaries Deferred Compensation Plan (As restated effective January 1, 2005) dated December 31, 2008 incorporated by reference to Exhibit 10(i) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008, filed with the Securities and Exchange Commission on February 27, 2009. 10(j)* Amended and Restated Westamerica Bancorporation Deferral Plan (Adopted October 26, 1995) dated December 31, 2008 incorporated by reference to Exhibit 10(j) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008, filed with the Securities and Exchange Commission on February 27, 2009. 10(k)* Form of Restricted Performance Share Deferral Election pursuant to the Westamerica Bancorporation Deferral Plan incorporated by reference to Exhibit 10(i) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005, filed with the Securities and Exchange Commission on March 10, 2006. 10(l) Purchase and Assumption Agreement by and between Federal Deposit Insurance Corporation and Westamerica Bank dated February 6, 2009, incorporated by reference to Exhibit 99.2 to the Registrant’s Form 8-K, filed with the Securities and Exchange Commission on February 11, 2009. 10(s)* Amended and Restated Stock Option Plan of 1995, incorporated by reference to Exhibit A to the Registrant’s definitive Proxy Statement pursuant to Regulation 14(a) filed with the Securities and Exchange Commission on March 13, 2012. 10(t) Data Processing Agreement by and between Fidelity Information Services and Westamerica Bancorporation incorporated by reference to Exhibit 10(t) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the Securities and Exchange Commission on February 28, 2017. -98- 10(u)* Westamerica Bancorporation 2019 Omnibus Equity Incentive Plan, incorporated by reference to Exhibit 4 to the Registrant’s Form S-8, filed with the Securities and Exchange Commission on September 27, 2019. 10(v)* Westamerica Bancorporation 2019 Omnibus Equity Incentive Plan Stock Option Agreement Form, incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q, filed with the Securities and Exchange Commission on November 4, 2019. 10(w)* Westamerica Bancorporation 2019 Omnibus Equity Incentive Plan Restricted Stock Unit Award Agreement Form, incorporated by reference to Exhibit 10.2 to the Registrant’s Form 10-Q, filed with the Securities and Exchange Commission on November 4, 2019. 10(x) Form of Indemnification Agreement between Westamerica Bancorporation and its directors, incorporated by reference to the Exhibit 10.1 to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on June 28, 2019. 10(y) Form of Indemnification Agreement between Westamerica Bank and its directors, incorporated by reference to the Exhibit 10.2 to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on June 28, 2019.   -95- 11.1 Statement re computation of per share earnings incorporated by reference to Note 17 of the notes to the consolidated financial statements of this Report. 14 Code of Ethics incorporated by reference to Exhibit 14 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003, filed with the Securities and Exchange Commission on March 10, 2004. 21 Subsidiaries of the registrant. 23.1 Consent of Crowe LLP 31.1 Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a) 31.2 Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a) 32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 97 Incentive-Based Compensation Recovery Policy 101.INS Inline XBRL Instance Document – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definitions Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 The Cover page of Westamerica Bancorporation’s Annual Report on Form 10-K for the year ended December 31, 2020,2023, formatted in Inline XBRL (contained in Exhibit 101) ____________   *       Indicates management contract or compensatory plan or arrangement.   The exhibits listed above are available through the SEC’s website (https://www.sec.gov). Alternatively, the Company will furnish to shareholders a copy of any exhibit listed above, but not contained herein, upon written request to the Office of the Corporate Secretary A-2M, Westamerica Bancorporation, P.O. Box 1200, Suisun City, California 94585-1200, and payment to the Company of $.25 per page.page, provided that a copy of the Code of Ethics will be provided without charge.   Item16.FORM10-K SUMMARY.   None   [The remainder of this page intentionally left blank]         -99--96-     SIGNATURES SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.   WESTAMERICA BANCORPORATION                                                                                                                                     /s/ Jesse LeavittJohn “Robert” Thorson                                                 Jesse LeavittJohn “Robert” Thorson Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)   Date: February 25, 202128, 2024   Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.   Signature   Title   Date           /s/ David L. Payne Chairman of the Board and Directors February 28, 2024 David L. Payne   Chairman of the Board and Directors President and Chief Executive Officer (Principal Executive Officer)   February 25, 2021           /s/ Jesse Leavitt                                           Jesse LeavittJohn “Robert” Thorson   Senior Vice President and Chief Financial Officer February 28, 2024 John “Robert” Thorson (Principal Financial and Accounting Officer)   February 25, 2021           /s/ Etta Allen                                                Etta AllenAlisa Belew                                               Director   February 25, 202128, 2024 Alisa Belew           /s/ Louis E. Bartolini                                   Louis E. BartoliniJoseph Bowler   Director   February 25, 202128, 2024 E. Joseph Bowler Director February 28, 2024 Martin Camsey           /s/ E. Joseph Bowler                                    E. Joseph BowlerMelanie Martella Chiesa                        Director   February 25, 202128, 2024 Melanie Martella Chiesa           /s/ Melanie Martella Chiesa                      Melanie Martella ChiesaMichele Hassid                                         Director   February 25, 202128, 2024 Michele Hassid           /s/ Michele Hassid                                       Michele HassidEdward B. Sylvester                                Lead Independent Director   February 25, 202128, 2024 Edward B. Sylvester           /s/ Catherine C. MacMillan                       Catherine C. MacMillanInez Wondeh                                             Director   February 25, 202128, 2024 Inez Wondeh         /s/ Ronald A. Nelson                                   Ronald A. Nelson Director February 25, 2021 /s/ Edward B. Sylvester                              Edward B. Sylvester Lead Independent Director February 25, 2021     -100--97-