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þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
CALIFORNIA | 94-2156203 | |
(State or Other Jurisdiction | (I.R.S. Employer | |
of Incorporation or Organization) | Identification Number) |
(Address of principal executive offices) (zip code)
Title of class: | Name of each exchange on which registered: | |
Common Stock, no par value | The NASDAQ Stock Market LLC |
Large accelerated filerþ | Accelerated filero | Non-accelerated filero | Smaller reporting companyo | |||
(Do not check if a smaller reporting company) |
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Exhibit 3(b) | ||||||||
Exhibit 21 | ||||||||
Exhibit 23(a) | ||||||||
Exhibit 31.1 | ||||||||
Exhibit 31.2 | ||||||||
Exhibit 32.1 | ||||||||
Exhibit 32.2 |
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ITEM 1. | BUSINESS |
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Corporate Secretary A-2M
Post Office Box 1200
Suisun City, California 94585-1200
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• | merging the DIF and SAIF deposit insurance funds; |
• | annually adjusting the minimum insurance fund reserve ratio between $1.15 and $1.50 per $100 of insured deposits; |
• | increasing deposit coverage for retirement accounts to $250,000, |
• | indexing the insurance level for inflation, with any increases approved by the FDIC and National Credit Union Administration (NCUA) on a five-year cycle beginning in 2010 after review of the state of the deposit insurance fund and related factors; |
• | credits of up to $4.7 billion to offset premiums for banks that capitalized the FDIC by 1996; and |
• | a historical basis concept for distributing credits and dividends to reflect past contributions to the insurance funds. |
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ITEM 1A. | RISK FACTORS |
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• | a decrease in the demand for loans and other products and services offered by the Company; |
• | an increase or decrease in the usage of unfunded commitments; |
• | an impairment of certain intangible assets, such as goodwill; |
• | an impairment of certain investment securities, such as state and local municipal securities; |
• | an impairment of life insurance policies owned by the Company; |
• | an increase in the number of clients and counterparties who become delinquent, file for protection under bankruptcy laws or default on their loans or other obligations to the Company. |
• | an increase in the number of delinquencies, bankruptcies or defaults could result in a higher level of nonperforming assets, net charge-offs, provision for loan losses, and valuation adjustments on loans held for sale. |
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ITEM 1B. | UNRESOLVED STAFF COMMENTS |
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ITEM 2. | PROPERTIES |
ITEM 3. | LEGAL PROCEEDINGS |
ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDERS MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
High | Low | |||||||
2009: | ||||||||
First quarter | $ | 51.29 | $ | 33.08 | ||||
Second quarter | 56.79 | 44.13 | ||||||
Third quarter | 54.70 | 45.42 | ||||||
Fourth quarter | 56.80 | 47.08 | ||||||
2008: | ||||||||
First quarter | $ | 56.49 | $ | 39.00 | ||||
Second quarter | 61.49 | 50.55 | ||||||
Third quarter | 69.00 | 35.50 | ||||||
Fourth quarter | 60.00 | 41.17 |
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Period ending | ||||||||||||||||||||||||
1999 | 2000 | 2001 | 2002 | 2003 | 2004 | |||||||||||||||||||
Westamerica Bancorporation (WABC) | $ | 100.00 | $ | 158.30 | $ | 148.88 | $ | 154.51 | $ | 195.77 | $ | 234.08 | ||||||||||||
S&P 500 (SPX) | 100.00 | 90.87 | 80.13 | 62.42 | 80.32 | 89.03 | ||||||||||||||||||
NASDAQ Bank Index (CBNK) | 100.00 | 117.79 | 132.49 | 141.69 | 188.51 | 214.20 |
Period ending | ||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | ||||||||||||||||
Westamerica Bancorporation (WABC) | $ | 217.94 | $ | 213.35 | $ | 193.42 | $ | 227.75 | $ | 253.64 | ||||||||||
S&P 500 (SPX) | 93.42 | 108.22 | 114.13 | 71.99 | 91.05 | |||||||||||||||
NASDAQ Bank Index (CBNK) | 210.05 | 239.16 | 191.78 | 150.57 | 126.02 |
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Period ending | ||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | 2009 | |||||||||||||||||||
Westamerica Bancorporation (WABC) | $ | 100.00 | $ | 93.10 | $ | 91.14 | $ | 82.63 | $ | 97.29 | $ | 108.36 | ||||||||||||
S&P 500 (SPX) | 100.00 | 104.92 | 121.54 | 128.18 | 80.86 | 102.26 | ||||||||||||||||||
NASDAQ Bank Index (CBNK) | 100.00 | 98.06 | 111.66 | 89.53 | 70.29 | 58.83 |
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(c) | (d) | |||||||||||||||
Total Number | Maximum | |||||||||||||||
of Shares | Number of | |||||||||||||||
(b) | Purchased | Shares that | ||||||||||||||
(a) | Average | as Part of | May Yet Be | |||||||||||||
Total | Price | Publicly | Purchased | |||||||||||||
Number of | Paid | Announced | Under the | |||||||||||||
Shares | per | Plans or | Plans or | |||||||||||||
Period | Purchased | Share | Programs* | Programs | ||||||||||||
October 1 through October 31 | 3 | $ | 50.65 | 3 | 1,995 | |||||||||||
November 1 through November 30 | 5 | 51.79 | 5 | 1,990 | ||||||||||||
December 1 through December 31 | 3 | 54.31 | 3 | 1,987 | ||||||||||||
Total | 11 | 52.16 | 11 | 1,987 | ||||||||||||
* | Includes 3 thousand, 5 thousand and 3 thousand shares purchased in October, November and December, respectively, by the Company in private transactions with the independent administrator of the Company’s Tax Deferred Savings/Retirement Plan (ESOP). The Company includes the shares purchased in such transactions within the total number of shares authorized for purchase pursuant to the currently existing publicly announced program. |
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ITEM 6. | SELECTED FINANCIAL DATA |
FINANCIAL SUMMARY
(In thousands, except per share data)
Year ended December 31: | 2009 | 2008 | 2007 | 2006 | 2005* | |||||||||||||||
Interest income | $ | 241,949 | $ | 208,469 | $ | 235,872 | $ | 246,515 | $ | 242,797 | ||||||||||
Interest expense | 19,380 | 33,243 | 72,555 | 65,268 | 43,649 | |||||||||||||||
Net interest income | 222,569 | 175,226 | 163,317 | 181,247 | 199,148 | |||||||||||||||
Provision for loan losses | 10,500 | 2,700 | 700 | 445 | 900 | |||||||||||||||
Noninterest income: | ||||||||||||||||||||
Net losses from securities | — | (56,955 | ) | — | — | (4,903 | ) | |||||||||||||
Gain on acquisition | 48,844 | — | — | — | — | |||||||||||||||
Deposit service charges and other | 63,167 | 54,899 | 59,278 | 55,347 | 59,443 | |||||||||||||||
Total noninterest income (loss) | 112,011 | (2,056 | ) | 59,278 | 55,347 | 54,540 | ||||||||||||||
Noninterest expense | ||||||||||||||||||||
Visa litigation | — | (2,338 | ) | 2,338 | — | — | ||||||||||||||
Other noninterest expense | 140,776 | 103,099 | 99,090 | 101,724 | 107,250 | |||||||||||||||
Total noninterest expense | 140,776 | 100,761 | 101,428 | 101,724 | 107,250 | |||||||||||||||
Income before income taxes | 183,304 | 69,709 | 120,467 | 134,425 | 145,538 | |||||||||||||||
Provision for income taxes | 57,878 | 9,874 | 30,691 | 35,619 | 39,497 | |||||||||||||||
Net income | 125,426 | 59,835 | 89,776 | 98,806 | 106,041 | |||||||||||||||
Preferred stock dividends and discount accretion | 3,963 | — | — | — | — | |||||||||||||||
Net income applicable to common equity | $ | 121,463 | $ | 59,835 | $ | 89,776 | $ | 98,806 | $ | 106,041 | ||||||||||
Earnings per share: | ||||||||||||||||||||
Basic | $ | 4.17 | $ | 2.07 | $ | 3.02 | $ | 3.17 | $ | 3.28 | ||||||||||
Diluted | 4.14 | 2.04 | 2.98 | 3.11 | 3.22 | |||||||||||||||
Per share: | ||||||||||||||||||||
Dividends paid | $ | 1.41 | $ | 1.39 | $ | 1.36 | $ | 1.30 | $ | 1.22 | ||||||||||
Book value at December 31 | 17.31 | 14.19 | 13.60 | 13.89 | 13.65 | |||||||||||||||
Average common shares outstanding | 29,105 | 28,892 | 29,753 | 31,202 | 32,291 | |||||||||||||||
Average diluted common shares outstanding | 29,353 | 29,273 | 30,165 | 31,739 | 32,897 | |||||||||||||||
Shares outstanding at December 31 | 29,208 | 28,880 | 29,018 | 30,547 | 31,882 | |||||||||||||||
At December 31: | ||||||||||||||||||||
Non-covered loans, net | $ | 2,160,045 | $ | 2,337,956 | $ | 2,450,470 | $ | 2,476,404 | $ | 2,616,372 | ||||||||||
Covered loans | 855,301 | — | — | — | — | |||||||||||||||
Investments | 1,111,143 | 1,237,779 | 1,578,109 | 1,780,617 | 1,999,604 | |||||||||||||||
Intangible assets and goodwill | 157,366 | 136,907 | 140,148 | 143,801 | 148,077 | |||||||||||||||
Total assets | 4,975,501 | 4,032,934 | 4,558,959 | 4,769,335 | 5,157,559 | |||||||||||||||
Total deposits | 4,060,208 | 3,095,054 | 3,264,790 | 3,516,734 | 3,846,101 | |||||||||||||||
Short-term borrowed funds | 227,178 | 457,275 | 798,599 | 731,977 | 775,173 | |||||||||||||||
Federal Home Loan Bank advances | 85,470 | — | — | — | — | |||||||||||||||
Debt financing and notes payable | 26,497 | 26,631 | 36,773 | 36,920 | 40,281 | |||||||||||||||
Shareholders’ equity | 505,448 | 409,852 | 394,603 | 424,235 | 435,064 | |||||||||||||||
Financial Ratios: | ||||||||||||||||||||
For the year: | ||||||||||||||||||||
Return on assets | 2.39 | % | 1.42 | % | 1.93 | % | 2.01 | % | 2.09 | % | ||||||||||
Return on common equity | 25.84 | % | 14.77 | % | 22.11 | % | 23.38 | % | 25.70 | % | ||||||||||
Net interest margin ** | 5.42 | % | 5.13 | % | 4.40 | % | 4.57 | % | 4.82 | % | ||||||||||
Net loan losses to average non-covered loans | 0.60 | % | 0.44 | % | 0.14 | % | 0.04 | % | 0.03 | % | ||||||||||
Efficiency ratio *** | 39.74 | % | 51.88 | % | 41.46 | % | 39.12 | % | 38.52 | % | ||||||||||
At December 31: | ||||||||||||||||||||
Equity to assets | 10.16 | % | 10.16 | % | 8.66 | % | 8.90 | % | 8.44 | % | ||||||||||
Total capital to risk-adjusted assets | 14.50 | % | 11.76 | % | 10.64 | % | 11.09 | % | 10.40 | % | ||||||||||
Allowance for loan losses to non-covered loans | 1.86 | % | 1.87 | % | 2.10 | % | 2.19 | % | 2.09 | % |
* | Adjusted to adopt the revised provisions for accounting for stock compensation. | |
** | Yields on securities and certain loans have been adjusted upward to a “fully taxable equivalent” (“FTE”) basis, which is a non-GAAP financial measure, in order to reflect the effect of income which is exempt from federal income taxation at the current statutory tax rate. | |
*** | The efficiency ratio is defined as noninterest expense divided by total revenue (net interest income on an FTE basis, which is a non-GAAP financial measure, and noninterest income). |
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ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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Year ended December 31, | ||||||||||||
($ in thousands except per share amounts) | 2009 | 2008 | 2007 | |||||||||
Net interest and fee income * | $ | 242,218 | $ | 196,257 | $ | 185,348 | ||||||
Provision for loan losses | (10,500 | ) | (2,700 | ) | (700 | ) | ||||||
Noninterest income (loss) | 112,011 | (2,056 | ) | 59,278 | ||||||||
Noninterest expense | (140,776 | ) | (100,761 | ) | (101,428 | ) | ||||||
Income before income taxes * | 202,953 | 90,740 | 142,498 | |||||||||
Taxes * | (77,527 | ) | (30,905 | ) | (52,722 | ) | ||||||
Net income | 125,426 | 59,835 | 89,776 | |||||||||
Preferred dividends and discount accretion | (3,963 | ) | — | — | ||||||||
Net income applicable to common equity | $ | 121,463 | $ | 59,835 | $ | 89,776 | ||||||
Net income applicable to common equity per average fully-diluted common share | $ | 4.14 | $ | 2.04 | $ | 2.98 | ||||||
Net income applicable to common equity as a percentage of average shareholders’ equity | 25.84 | % | 14.77 | % | 22.11 | % | ||||||
Net income applicable to common equity as a percentage of average total assets | 2.39 | % | 1.42 | % | 1.93 | % |
* | Fully taxable equivalent (FTE) |
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Year ended December 31, | ||||||||||||
(in thousands) | 2009 | 2008 | 2007 | |||||||||
Interest and fee income | $ | 241,949 | $ | 208,469 | $ | 235,872 | ||||||
Interest expense | (19,380 | ) | (33,243 | ) | (72,555 | ) | ||||||
FTE adjustment | 19,649 | 21,031 | 22,031 | |||||||||
Net interest income (FTE) | $ | 242,218 | $ | 196,257 | $ | 185,348 | ||||||
Net interest margin (FTE) | 5.42 | % | 5.13 | % | 4.40 | % | ||||||
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Year Ended December 31, 2009 | ||||||||||||
Interest | Rates | |||||||||||
Average | Income/ | Earned/ | ||||||||||
(dollars in thousands) | Balance | Expense | Paid | |||||||||
Assets | ||||||||||||
Money market assets and funds sold | $ | 841 | $ | 3 | 0.36 | % | ||||||
Investment securities: | ||||||||||||
Available for sale | ||||||||||||
Taxable | 240,829 | 9,002 | 3.74 | % | ||||||||
Tax-exempt (1) | 166,669 | 11,217 | 6.73 | % | ||||||||
Held to maturity | ||||||||||||
Taxable | 307,763 | 13,971 | 4.54 | % | ||||||||
Tax-exempt (1) | 529,597 | 33,334 | 6.29 | % | ||||||||
Loans: | ||||||||||||
Commercial | ||||||||||||
Taxable | 629,027 | 36,360 | 5.78 | % | ||||||||
Tax-exempt (1) | 186,295 | 12,362 | 6.64 | % | ||||||||
Commercial real estate | 1,283,114 | 84,473 | 6.58 | % | ||||||||
Real estate construction | 79,425 | 3,213 | 4.05 | % | ||||||||
Real estate residential | 431,931 | 20,640 | 4.73 | % | ||||||||
Consumer | 617,169 | 37,023 | 6.00 | % | ||||||||
Total Loans (1) | 3,226,961 | 194,071 | 6.01 | % | ||||||||
Earning assets (1) | 4,472,660 | 261,598 | 5.85 | % | ||||||||
Other assets | 613,977 | |||||||||||
Total assets | $ | 5,086,637 | ||||||||||
Liabilities and shareholders’ equity | ||||||||||||
Deposits: | ||||||||||||
Noninterest bearing demand | $ | 1,354,534 | — | — | ||||||||
Savings and interest-bearing transaction | 1,648,095 | 4,677 | 0.28 | % | ||||||||
Time less than $100,000 | 458,117 | 4,506 | 0.98 | % | ||||||||
Time $100,000 or more | 607,642 | 5,366 | 0.88 | % | ||||||||
Total interest-bearing deposits | 2,713,854 | 14,549 | 0.54 | % | ||||||||
Short-term borrowed funds | 395,723 | 3,142 | 0.79 | % | ||||||||
Debt financing and notes payable | 26,567 | 1,689 | 6.36 | % | ||||||||
Total interest-bearing liabilities | 3,136,144 | 19,380 | 0.62 | % | ||||||||
Other liabilities | 71,635 | |||||||||||
Shareholders’ equity | 524,324 | |||||||||||
Total liabilities and shareholders’ equity | $ | 5,086,637 | ||||||||||
Net interest spread (2) | 5.23 | % | ||||||||||
Net interest income and interest margin (1)(3) | $ | 242,218 | 5.42 | % | ||||||||
(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 paid on interest-bearing liabilities. | |
(3) | Net interest margin is computed by dividing net interest income by total average earning assets. |
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Year Ended December 31, 2008 | ||||||||||||
Interest | Rates | |||||||||||
Average | Income/ | Earned/ | ||||||||||
(dollars in thousands) | Balance | Expense | Paid | |||||||||
Assets | ||||||||||||
Money market assets and funds sold | $ | 817 | $ | 3 | 0.37 | % | ||||||
Investment securities: | ||||||||||||
Available for sale | ||||||||||||
Taxable | 205,138 | 8,854 | 4.32 | % | ||||||||
Tax-exempt (1) | 196,993 | 13,795 | 7.00 | % | ||||||||
Held to maturity | ||||||||||||
Taxable | 436,041 | 19,237 | 4.41 | % | ||||||||
Tax-exempt (1) | 551,120 | 34,328 | 6.23 | % | ||||||||
Loans: | ||||||||||||
Commercial | ||||||||||||
Taxable | 318,075 | 22,341 | 7.02 | % | ||||||||
Tax-exempt (1) | 208,155 | 13,575 | 6.52 | % | ||||||||
Commercial real estate | 835,925 | 58,913 | 7.05 | % | ||||||||
Real estate construction | 76,086 | 4,863 | 6.39 | % | ||||||||
Real estate residential | 468,140 | 22,683 | 4.85 | % | ||||||||
Consumer | 526,175 | 30,908 | 5.87 | % | ||||||||
Total Loans (1) | 2,432,556 | 153,283 | 6.30 | % | ||||||||
Earning assets (1) | 3,822,665 | 229,500 | 6.00 | % | ||||||||
Other assets | 397,098 | |||||||||||
Total assets | $ | 4,219,763 | ||||||||||
Liabilities and shareholders’ equity | ||||||||||||
Deposits: | ||||||||||||
Noninterest bearing demand | $ | 1,181,679 | — | — | ||||||||
Savings and interest-bearing transaction | 1,301,556 | 5,642 | 0.43 | % | ||||||||
Time less than $100,000 | 193,889 | 5,209 | 2.69 | % | ||||||||
Time $100,000 or more | 489,326 | 10,331 | 2.11 | % | ||||||||
Total interest-bearing deposits | 1,984,771 | 21,182 | 1.07 | % | ||||||||
Short-term borrowed funds | 549,438 | 9,958 | 1.81 | % | ||||||||
Debt financing and notes payable | 33,807 | 2,103 | 6.22 | % | ||||||||
Total interest-bearing liabilities | 2,568,016 | 33,243 | 1.29 | % | ||||||||
Other liabilities | 64,992 | |||||||||||
Shareholders’ equity | 405,076 | |||||||||||
Total liabilities and shareholders’ equity | $ | 4,219,763 | ||||||||||
Net interest spread (2) | 4.71 | % | ||||||||||
Net interest income and interest margin (1)(3) | $ | 196,257 | 5.13 | % | ||||||||
(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 paid on interest-bearing liabilities. | |
(3) | Net interest margin is computed by dividing net interest income by total average earning assets. |
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Year Ended December 31, 2007 | ||||||||||||
Interest | Rates | |||||||||||
Average | Income/ | Earned/ | ||||||||||
(dollars in thousands) | Balance | Expense | Paid | |||||||||
Assets | ||||||||||||
Money market assets and funds sold | $ | 671 | $ | 7 | 1.04 | % | ||||||
Investment securities: | ||||||||||||
Available for sale | ||||||||||||
Taxable | 361,851 | 15,639 | 4.32 | % | ||||||||
Tax-exempt (1) | 232,047 | 16,888 | 7.28 | % | ||||||||
Held to maturity | ||||||||||||
Taxable | 538,089 | 23,361 | 4.34 | % | ||||||||
Tax-exempt (1) | 569,090 | 34,973 | 6.15 | % | ||||||||
Loans: | ||||||||||||
Commercial | ||||||||||||
Taxable | 314,428 | 26,936 | 8.57 | % | ||||||||
Tax-exempt (1) | 225,320 | 14,469 | 6.42 | % | ||||||||
Commercial real estate | 879,952 | 62,833 | 7.14 | % | ||||||||
Real estate construction | 81,093 | 7,878 | 9.71 | % | ||||||||
Real estate residential | 493,126 | 23,422 | 4.75 | % | ||||||||
Consumer | 517,844 | 31,497 | 6.08 | % | ||||||||
Total Loans (1) | 2,511,763 | 167,035 | 6.65 | % | ||||||||
Earning assets (1) | 4,213,511 | 257,903 | 6.12 | % | ||||||||
Other assets | 427,949 | |||||||||||
Total assets | $ | 4,641,460 | ||||||||||
Liabilities and shareholders’ equity | ||||||||||||
Deposits: | ||||||||||||
Noninterest bearing demand | $ | 1,262,723 | — | — | ||||||||
Savings and interest-bearing transaction | 1,395,622 | 8,237 | 0.59 | % | ||||||||
Time less than $100,000 | 210,039 | 6,956 | 3.31 | % | ||||||||
Time $100,000 or more | 503,469 | 22,656 | 4.50 | % | ||||||||
Total interest-bearing deposits | 2,109,130 | 37,849 | 1.79 | % | ||||||||
Short-term borrowed funds | 759,390 | 32,393 | 4.27 | % | ||||||||
Debt financing and notes payable | 36,850 | 2,313 | 6.28 | % | ||||||||
Total interest-bearing liabilities | 2,905,370 | 72,555 | 2.50 | % | ||||||||
Other liabilities | 67,339 | |||||||||||
Shareholders’ equity | 406,028 | |||||||||||
Total liabilities and shareholders’ equity | $ | 4,641,460 | ||||||||||
Net interest spread (2) | 3.62 | % | ||||||||||
Net interest income and interest margin (1)(3) | $ | 185,348 | 4.40 | % | ||||||||
(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 paid on interest-bearing liabilities. | |
(3) | Net interest margin is computed by dividing net interest income by total average earning assets. |
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Years Ended December 31, | 2009 Compared with 2008 | |||||||||||
(dollars in thousands) | Volume | Rate | Total | |||||||||
Increase (decrease) in interest and fee income: | ||||||||||||
Money market assets and funds sold | $ | — | $ | — | $ | — | ||||||
Investment securities: | ||||||||||||
Available for sale Taxable | 1,412 | (1,264 | ) | 148 | ||||||||
Tax-exempt (1) | (2,063 | ) | (515 | ) | (2,578 | ) | ||||||
Held to maturity Taxable | (5,812 | ) | 546 | (5,266 | ) | |||||||
Tax-exempt (1) | (1,370 | ) | 376 | (994 | ) | |||||||
Loans: | ||||||||||||
Commercial: | ||||||||||||
Taxable | 18,549 | (4,530 | ) | 14,019 | ||||||||
Tax-exempt (1) | (1,452 | ) | 239 | (1,213 | ) | |||||||
Commercial real estate | 29,641 | (4,081 | ) | 25,560 | ||||||||
Real estate construction | 197 | (1,847 | ) | (1,650 | ) | |||||||
Real estate residential | (1,742 | ) | (301 | ) | (2,043 | ) | ||||||
Consumer | 5,435 | 680 | 6,115 | |||||||||
Total loans (1) | 50,628 | (9,840 | ) | 40,788 | ||||||||
Total increase (decrease) in interest and fee income (1) | 42,795 | (10,697 | ) | 32,098 | ||||||||
Increase (decrease) in interest expense: | ||||||||||||
Deposits: | ||||||||||||
Savings/ interest-bearing | 1,268 | (2,233 | ) | (965 | ) | |||||||
Time less than $100,000 | 4,022 | (4,725 | ) | (703 | ) | |||||||
Time $100,000 or more | 2,059 | (7,024 | ) | (4,965 | ) | |||||||
Total interest-bearing | 7,349 | (13,982 | ) | (6,633 | ) | |||||||
Short-term borrowed funds | (2,270 | ) | (4,546 | ) | (6,816 | ) | ||||||
Notes and mortgages payable | (460 | ) | 46 | (414 | ) | |||||||
Total increase (decrease) in interest expense | 4,619 | (18,482 | ) | (13,863 | ) | |||||||
Increase in net interest income (1) | $ | 38,176 | $ | 7,785 | $ | 45,961 | ||||||
(1) | Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate. |
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Years Ended December 31, | 2008 Compared with 2007 | |||||||||||
(dollars in thousands) | Volume | Rate | Total | |||||||||
Increase (decrease) in interest and fee income: | ||||||||||||
Money market assets and funds sold | $ | 1 | $ | (5 | ) | $ | (4 | ) | ||||
Investment securities: | ||||||||||||
Available for sale Taxable | (6,764 | ) | (21 | ) | (6,785 | ) | ||||||
Tax-exempt (1) | (2,466 | ) | (627 | ) | (3,093 | ) | ||||||
Held to maturity Taxable | (4,492 | ) | 368 | (4,124 | ) | |||||||
Tax-exempt (1) | (1,088 | ) | 443 | (645 | ) | |||||||
Loans: | ||||||||||||
Commercial: | ||||||||||||
Taxable | 365 | (4,960 | ) | (4,595 | ) | |||||||
Tax-exempt (1) | (1,110 | ) | 216 | (894 | ) | |||||||
Commercial real estate | (3,079 | ) | (841 | ) | (3,920 | ) | ||||||
Real estate construction | (449 | ) | (2,566 | ) | (3,015 | ) | ||||||
Real estate residential | (1,187 | ) | 448 | (739 | ) | |||||||
Consumer | 555 | (1,144 | ) | (589 | ) | |||||||
Total loans (1) | (4,905 | ) | (8,847 | ) | (13,752 | ) | ||||||
Total decrease in interest and fee income (1) | (19,714 | ) | (8,689 | ) | (28,403 | ) | ||||||
Decrease in interest expense: | ||||||||||||
Deposits: | ||||||||||||
Savings/ interest-bearing | (512 | ) | (2,083 | ) | (2,595 | ) | ||||||
Time less than $100,000 | (495 | ) | (1,252 | ) | (1,747 | ) | ||||||
Time $100,000 or more | (592 | ) | (11,733 | ) | (12,325 | ) | ||||||
Total interest-bearing | (1,599 | ) | (15,068 | ) | (16,667 | ) | ||||||
Short-term borrowed funds | (7,262 | ) | (15,173 | ) | (22,435 | ) | ||||||
Notes and mortgages payable | (189 | ) | (21 | ) | (210 | ) | ||||||
Total decrease in interest expense | (9,050 | ) | (30,262 | ) | (39,312 | ) | ||||||
(Decrease) increase in net interest income (1) | $ | (10,664 | ) | $ | 21,573 | $ | 10,909 | |||||
(1) | Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate. |
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Years Ended December 31, | ||||||||||||
(dollars in thousands) | 2009 | 2008 | 2007 | |||||||||
Service charges on deposit accounts | $ | 36,392 | $ | 29,762 | $ | 30,235 | ||||||
Merchant credit card fees | 9,068 | 10,525 | 10,841 | |||||||||
Debit card fees | 4,875 | 3,769 | 3,797 | |||||||||
ATM fees and interchange | 3,693 | 2,923 | 2,824 | |||||||||
Other service charges | 2,200 | 2,025 | 2,065 | |||||||||
Trust fees | 1,429 | 1,227 | 1,281 | |||||||||
Check sale income | 887 | 736 | 818 | |||||||||
Safe deposit rental | 697 | 593 | 624 | |||||||||
Financial services commissions | 583 | 830 | 1,321 | |||||||||
Official check sale income | 89 | 163 | 1,113 | |||||||||
Gain on acquisition | 48,844 | — | — | |||||||||
Life insurance proceeds | — | — | 822 | |||||||||
Gain on sales of real property | — | — | 230 | |||||||||
Securities losses and impairment | — | (62,653 | ) | — | ||||||||
Gain on sale of Visa common stock | — | 5,698 | — | |||||||||
Other noninterest income | 3,254 | 2,346 | 3,307 | |||||||||
Total | $ | 112,011 | $ | (2,056 | ) | $ | 59,278 | |||||
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Years Ended December 31, | ||||||||||||
(dollars in thousands) | 2009 | 2008 | 2007 | |||||||||
Salaries and related benefits | $ | 65,391 | $ | 51,492 | $ | 50,142 | ||||||
Occupancy | 18,748 | 13,703 | 13,346 | |||||||||
Outsourced data processing | 9,000 | 8,440 | 7,069 | |||||||||
Amortization of intangible assets | 6,697 | 3,221 | 3,653 | |||||||||
FDIC insurance assessments | 6,260 | 518 | 401 | |||||||||
Equipment | 5,859 | 3,801 | 4,302 | |||||||||
Courier Service | 3,808 | 3,322 | 3,404 | |||||||||
Professional fees | 3,583 | 2,624 | 1,889 | |||||||||
Postage | 2,110 | 1,487 | 1,602 | |||||||||
Loan expenses | 2,031 | 911 | 750 | |||||||||
Telephone | 1,977 | 1,368 | 1,398 | |||||||||
Stationery and supplies | 1,555 | 1,170 | 1,271 | |||||||||
In-house meetings | 1,177 | 837 | 749 | |||||||||
Correspondent service charges | 1,072 | 634 | 869 | |||||||||
Advertising and public relations | 995 | 843 | 834 | |||||||||
Operational losses | 953 | 845 | 793 | |||||||||
Customer checks | 749 | 920 | 939 | |||||||||
Visa litigation | — | (2,338 | ) | 2,338 | ||||||||
Other | 8,811 | 6,963 | 5,679 | |||||||||
Total | $ | 140,776 | $ | 100,761 | $ | 101,428 | ||||||
Noninterest expense to revenues (“efficiency ratio”)(FTE) | 39.7 | % | 51.9 | % | 41.5 | % | ||||||
Average full-time equivalent staff | 1,115 | 891 | 887 | |||||||||
Total average assets per full-time staff | $ | 4,562 | $ | 4,736 | $ | 5,233 | ||||||
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At December 31, | ||||||||||||
(dollars in thousands) | 2009 | 2008 | 2007 | |||||||||
U.S. Treasury securities | $ | 2,987 | $ | 3,082 | $ | — | ||||||
Securities of U.S. Government sponsored entities | 21,041 | 11,077 | 123,062 | |||||||||
Mortgage backed securities | 146,005 | 41,240 | 68,393 | |||||||||
Obligations of States and political subdivisions | 158,193 | 161,046 | 183,307 | |||||||||
Collateralized mortgage obligations | 41,410 | 59,851 | 90,986 | |||||||||
Asset-backed securities | 8,339 | 6,447 | 9,700 | |||||||||
FHLMC and FNMA stock | 1,573 | 821 | 49,671 | |||||||||
Other | 4,660 | 4,890 | 7,702 | |||||||||
Total | $ | 384,208 | $ | 288,454 | $ | 532,821 | ||||||
After one | After five | |||||||||||||||||||||||||||
At December 31, 2009, | Within | but within | but within | After ten | Mortgage- | |||||||||||||||||||||||
(Dollars in thousands) | one year | five years | ten years | years | backed | Other | Total | |||||||||||||||||||||
U.S. Treasury securities | $ | 2,987 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 2,987 | ||||||||||||||
Interest rate | 0.44 | % | — | % | — | % | — | % | — | % | — | % | 0.44 | % | ||||||||||||||
U.S. Government sponsored entities | — | 19,980 | 1,061 | — | — | — | 21,041 | |||||||||||||||||||||
Interest rate | — | 1.85 | % | 5.28 | % | — | — | — | 2.02 | % | ||||||||||||||||||
States and political subdivisions | 9,865 | 68,780 | 61,871 | 17,677 | — | — | 158,193 | |||||||||||||||||||||
Interest rate (FTE) | 7.11 | % | 7.06 | % | 6.88 | % | 6.46 | % | — | — | 6.98 | % | ||||||||||||||||
Asset-backed securities | — | — | — | 8,339 | — | — | 8,339 | |||||||||||||||||||||
Interest rate | — | — | — | 0.49 | % | — | — | 0.49 | % | |||||||||||||||||||
Subtotal | 12,852 | 88,760 | 62,932 | 26,016 | — | — | 190,560 | |||||||||||||||||||||
Interest rate | 5.56 | % | 5.89 | % | 6.85 | % | 4.55 | % | — | — | 6.05 | % | ||||||||||||||||
Mortgage backed securities and collateralized mortgage obligations | — | — | — | — | 187,415 | — | 187,415 | |||||||||||||||||||||
Interest rate | — | — | — | — | 4.28 | % | — | 4.28 | % | |||||||||||||||||||
Other without set maturities | — | — | — | — | — | 6,233 | 6,233 | |||||||||||||||||||||
Interest rate | — | — | — | — | — | 5.58 | % | 5.58 | % | |||||||||||||||||||
Total | $ | 12,852 | $ | 88,760 | $ | 62,932 | $ | 26,016 | $ | 187,415 | $ | 6,233 | $ | 384,208 | ||||||||||||||
Interest rate | 5.56 | % | 5.89 | % | 6.85 | % | 4.55 | % | 4.28 | % | 5.58 | % | 5.15 | % | ||||||||||||||
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At December 31, | ||||||||||||
(Dollars in thousands) | 2009 | 2008 | 2007 | |||||||||
Securities of U.S. Government sponsored entities | $ | — | $ | 110,000 | $ | 130,000 | ||||||
Mortgage backed securities | 61,893 | 85,676 | 107,162 | |||||||||
Obligations of States and political subdivisions | 516,596 | 545,237 | 566,351 | |||||||||
Collateralized mortgage obligations | 148,446 | 208,412 | 241,775 | |||||||||
Total | $ | 726,935 | $ | 949,325 | $ | 1,045,288 | ||||||
Fair value | $ | 736,270 | $ | 950,210 | $ | 1,049,442 | ||||||
After one | After five | |||||||||||||||||||||||
At December 31, 2009, | Within | but within | but within | After ten | Mortgage- | |||||||||||||||||||
(Dollars in thousands) | One year | five years | ten years | years | backed | Total | ||||||||||||||||||
States and political subdivisions | $ | 8,303 | $ | 58,111 | $ | 413,720 | $ | 36,462 | $ | — | $ | 516,596 | ||||||||||||
Interest rate (FTE) | 6.40 | % | 6.31 | % | 6.09 | % | 5.83 | % | — | 6.15 | % | |||||||||||||
Mortgage backed securities and collateralized mortgage obligations | — | — | — | — | 210,339 | 210,339 | ||||||||||||||||||
Interest rate | — | — | — | — | 4.54 | % | 4.54 | % | ||||||||||||||||
Total | $ | 8,303 | $ | 58,111 | $ | 413,720 | $ | 36,462 | $ | 210,339 | $ | 726,935 | ||||||||||||
Interest rate | 6.40 | % | 6.31 | % | 6.09 | % | 5.83 | % | 4.54 | % | 5.68 | % | ||||||||||||
At December 31, | ||||||||||||||||||||
(dollars in thousands) | 2009 | 2008 | 2007 | 2006 | 2005 | |||||||||||||||
Commercial and commercial real estate | $ | 1,299,602 | $ | 1,342,209 | $ | 1,389,213 | $ | 1,463,823 | $ | 1,594,925 | ||||||||||
Real estate construction | 32,156 | 52,664 | 97,464 | 70,650 | 72,095 | |||||||||||||||
Real estate residential | 371,197 | 458,447 | 484,549 | 507,553 | 508,174 | |||||||||||||||
Consumer | 498,133 | 529,106 | 531,732 | 489,708 | 497,027 | |||||||||||||||
Total loans | $ | 2,201,088 | $ | 2,382,426 | $ | 2,502,976 | $ | 2,531,734 | $ | 2,672,221 | ||||||||||
At December 31, | ||||
(dollars in thousands) | 2009 | |||
Commercial and commercial real estate | $ | 698,789 | ||
Real estate construction | 40,460 | |||
Real estate residential | 18,521 | |||
Consumer | 97,531 | |||
Total loans | $ | 855,301 | ||
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At December 31, 2009 | Within | One to | After | |||||||||||||
(dollars in thousands) | One Year | Five Years | Five Years | Total | ||||||||||||
Commercial and commercial real estate * | $ | 735,378 | $ | 983,331 | $ | 279,682 | $ | 1,998,391 | ||||||||
Real estate construction | 72,616 | — | — | 72,616 | ||||||||||||
Total | $ | 807,994 | $ | 983,331 | $ | 279,682 | $ | 2,071,007 | ||||||||
Loans with fixed interest rates | $ | 202,334 | $ | 274,034 | $ | 198,053 | $ | 674,421 | ||||||||
Loans with floating or adjustable interest rates | 605,660 | 709,297 | 81,629 | 1,396,586 | ||||||||||||
Total | $ | 807,994 | $ | 983,331 | $ | 279,682 | $ | 2,071,007 | ||||||||
* | Includes demand loans |
• | The Bank maintains a Loan Review Department which reports directly to the Board of Directors. The Loan Review Department performs independent evaluations of loans and assigns credit risk grades to evaluated loans 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’s attention to maximize collection. |
• | The Bank maintains two loan administration offices whose sole responsibility is to manage and collect classified loans. |
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First Tier Loss Coverage | $ | 269,000 | ||
Less: Recognized credit risk discount | 161,203 | |||
Exposure to under-estimated risk within FirstTier | 107,797 | |||
Bank loss-sharing percentage | 20 percent | |||
First Tier risk to Bank, pre-tax | $ | 21,559 | ||
First Tier risk to Bank, after-tax | $ | 12,494 | ||
At December 31, | ||||
2009 | ||||
(In thousands) | ||||
Covered Classified Assets | ||||
Classified loans | $ | 181,516 | ||
Repossessed loan collateral | 23,297 | |||
Total | $ | 204,813 | ||
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At December 31, | ||||
2009 | ||||
(In thousands) | ||||
Covered nonperforming assets | ||||
Nonperforming, nonaccrual loans | $ | 66,965 | ||
Performing, nonaccrual loans | 18,183 | |||
Total nonaccrual loans | 85,148 | |||
Loans 90 days past due and still accruing | 210 | |||
Total nonperforming loans | 85,358 | |||
Covered repossessed loan collateral | 23,297 | |||
Total | $ | 108,655 | ||
As a percentage of total covered loans and OREO | 12.37 | % |
At December 31, | ||||||||
2009 | 2008 | |||||||
(In thousands) | ||||||||
Non-covered Classified Assets | ||||||||
Classified loans | $ | 57,241 | $ | 34,028 | ||||
Repossessed loan collateral | 12,642 | 3,505 | ||||||
Total | $ | 69,883 | $ | 37,533 | ||||
Allowance for loan losses / non-covered classified loans | 72 | % | 131 | % |
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At December 31, | ||||||||
2009 | 2008 | |||||||
(In thousands) | ||||||||
Non-covered nonperforming assets | ||||||||
Nonperforming, nonaccrual loans | $ | 19,837 | $ | 8,883 | ||||
Performing, nonaccrual loans | 25 | 1,143 | ||||||
Total nonaccrual loans | 19,862 | 10,026 | ||||||
Loans 90 days past due and still accruing | 800 | 755 | ||||||
Total nonperforming loans | 20,662 | 10,781 | ||||||
Repossessed loan collateral | 12,642 | 3,505 | ||||||
Total | $ | 33,304 | $ | 14,286 | ||||
As a percentage of total non-covered loans and repossessed loan collateral | 1.50 | % | 0.60 | % |
At December 31, | ||||||||
2009 | 2008 | |||||||
(Dollars In thousands) | ||||||||
Non-covered commercial loans: | ||||||||
30-89 days delinquent: | ||||||||
Dollar amount | $ | 10,677 | $ | 3,559 | ||||
Percentage of total non-covered commercial loans | 2.14 | % | 0.70 | % | ||||
90 or more days delinquent: | ||||||||
Dollar amount | $ | — | $ | — | ||||
Percentage of total non-covered commercial loans | — | % | — | % | ||||
Non-covered construction loans: | ||||||||
30-89 days delinquent: | ||||||||
Dollar amount | $ | 149 | $ | 3,393 | ||||
Percentage of total non-covered construction loans | 0.46 | % | 6.44 | % | ||||
90 or more days delinquent: | ||||||||
Dollar amount | $ | — | $ | — | ||||
Percentage of total non-covered construction loans | — | % | — | % | ||||
Non-covered commercial real estate loans: | ||||||||
30-89 days delinquent: | ||||||||
Dollar amount | $ | 12,158 | $ | 5,993 | ||||
Percentage of total non-covered commercial real estate loans | 1.52 | % | 0.73 | % | ||||
90 or more days delinquent: | ||||||||
Dollar amount | $ | — | $ | — | ||||
Percentage of total non-covered commercial real estate loans | — | % | — | % |
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At December 31, | ||||||||
2009 | 2008 | |||||||
(Dollars In thousands) | ||||||||
Non-covered residential real estate loans: | ||||||||
30-89 days delinquent: | ||||||||
Dollar amount | $ | 3,064 | $ | 3,273 | ||||
Percentage of total non-covered residential real estate loans | 0.83 | % | 0.71 | % | ||||
90 or more days delinquent: | ||||||||
Dollar amount | $ | — | $ | — | ||||
Percentage of total non-covered residential real estate loans | — | % | — | % | ||||
Non-covered automobile loans: | ||||||||
30-89 days delinquent: | ||||||||
Dollar amount | $ | 6,506 | $ | 5,241 | ||||
Percentage of total automobile loans | 1.49 | % | 1.12 | % | ||||
90 or more days delinquent: | ||||||||
Dollar amount | $ | 723 | $ | 569 | ||||
Percentage of total automobile loans | 0.17 | % | 0.12 | % | ||||
Non-covered other consumer loans: | ||||||||
30-89 days delinquent: | ||||||||
Dollar amount | $ | 762 | $ | 896 | ||||
Percentage of total non-covered other consumer loans | 1.25 | % | 1.49 | % | ||||
90 or more days delinquent: | ||||||||
Dollar amount | $ | 77 | $ | 186 | ||||
Percentage of total non-covered other consumer loans | 0.13 | % | 0.31 | % |
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Year ended December 31, | ||||||||||||||||||||
(dollars in thousands) | 2009 | 2008 | 2007 | 2006 | 2005 | |||||||||||||||
Total non-covered loans outstanding | $ | 2,201,088 | $ | 2,382,426 | $ | 2,502,976 | $ | 2,531,734 | $ | 2,672,221 | ||||||||||
Average non-covered loans outstanding during the period | 2,329,019 | 2,432,556 | 2,511,763 | 2,576,791 | 2,576,363 | |||||||||||||||
Analysis of the Allowance Balance, beginning of period | $ | 47,563 | $ | 55,799 | $ | 59,023 | $ | 59,537 | $ | 54,152 | ||||||||||
Provision for loan losses | 10,500 | 2,700 | 700 | 445 | 900 | |||||||||||||||
Provision for unfunded credit commitments | (400 | ) | (200 | ) | (400 | ) | 5 | — | ||||||||||||
Allowance acquired through merger | — | — | — | — | 5,213 | |||||||||||||||
Loans charged off: | ||||||||||||||||||||
Commercial and commercial real estate | (6,066 | ) | (1,296 | ) | (1,648 | ) | (1,176 | ) | (673 | ) | ||||||||||
Real estate construction | (1,333 | ) | (5,348 | ) | — | — | — | |||||||||||||
Real estate residential | (506 | ) | (131 | ) | — | — | — | |||||||||||||
Consumer | (9,362 | ) | (5,638 | ) | (4,033 | ) | (2,446 | ) | (2,065 | ) | ||||||||||
Total chargeoffs | (17,267 | ) | (12,413 | ) | (5,681 | ) | (3,622 | ) | (2,738 | ) | ||||||||||
Recoveries of loans previously charged off: | ||||||||||||||||||||
Commercial and commercial real estate | 490 | 331 | 1,060 | 1,149 | 864 | |||||||||||||||
Real estate construction | 664 | — | — | — | — | |||||||||||||||
Real estate residential | — | — | — | — | — | |||||||||||||||
Consumer | 2,186 | 1,346 | 1,097 | 1,509 | 1,146 | |||||||||||||||
Total recoveries | 3,340 | 1,677 | 2,157 | 2,658 | 2,010 | |||||||||||||||
Net loan losses | (13,927 | ) | (10,736 | ) | (3,524 | ) | (964 | ) | (728 | ) | ||||||||||
Balance, end of period | $ | 43,736 | $ | 47,563 | $ | 55,799 | $ | 59,023 | $ | 59,537 | ||||||||||
Components: | ||||||||||||||||||||
Allowance for loan losses | $ | 41,043 | $ | 44,470 | $ | 52,506 | $ | 55,330 | $ | 55,849 | ||||||||||
Reserve for unfunded credit commitments | 2,693 | 3,093 | 3,293 | 3,693 | 3,688 | |||||||||||||||
Allowance for credit losses | $ | 43,736 | $ | 47,563 | $ | 55,799 | $ | 59,023 | $ | 59,537 | ||||||||||
Net loan losses to average non-covered loans | 0.60 | % | 0.44 | % | 0.14 | % | 0.04 | % | 0.03 | % | ||||||||||
Allowance for loan losses as a percentage of non-covered loans outstanding | 1.86 | % | 1.87 | % | 2.10 | % | 2.19 | % | 2.09 | % |
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2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||||||||||||||||||
Loans as | Loans as | Loans as | Loans as | Loans as | ||||||||||||||||||||||||||||||||||||
Percent | Percent | Percent | Percent | Percent | ||||||||||||||||||||||||||||||||||||
Allocation | of Total | Allocation | of Total | Allocation | of Total | Allocation | of Total | Allocation | of Total | |||||||||||||||||||||||||||||||
of the | Non- | of the | Non- | of the | Non- | of the | Non- | of the | Non- | |||||||||||||||||||||||||||||||
At December 31, | Allowance | covered | Allowance | covered | Allowance | covered | Allowance | covered | Allowance | covered | ||||||||||||||||||||||||||||||
(dollars in thousands) | Balance | Loans | Balance | Loans | Balance | Loans | Balance | Loans | Balance | Loans | ||||||||||||||||||||||||||||||
Commercial | $ | 19,108 | 59 | % | $ | 23,774 | 57 | % | $ | 27,233 | 56 | % | $ | 23,217 | 58 | % | $ | 30,438 | 60 | % | ||||||||||||||||||||
Real estate construction | 2,968 | 1 | % | 4,725 | 2 | % | 5,403 | 4 | % | 3,942 | 3 | % | 3,346 | 3 | % | |||||||||||||||||||||||||
Real estate residential | 1,529 | 17 | % | 367 | 19 | % | 388 | 19 | % | 1,219 | 20 | % | 1,230 | 19 | % | |||||||||||||||||||||||||
Consumer | 8,424 | 23 | % | 6,331 | 22 | % | 4,626 | 21 | % | 4,132 | 19 | % | 5,291 | 18 | % | |||||||||||||||||||||||||
Unallocated portion | 11,707 | — | 12,366 | — | 18,149 | — | 26,513 | — | 19,232 | — | ||||||||||||||||||||||||||||||
Total | $ | 43,736 | 100 | % | $ | 47,563 | 100 | % | $ | 55,799 | 100 | % | $ | 59,023 | 100 | % | $ | 59,537 | 100 | % | ||||||||||||||||||||
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At December 31, | ||||||||
(dollars in thousands) | 2009 | 2008 | ||||||
Total impaired loans | $ | 2,447 | $ | 6,849 | ||||
Specific reserves | $ | 617 | $ | 1,936 | ||||
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At December 31, 2009 | Within | Over One to | Over Three to | After | ||||||||||||||||
(dollars in thousands) | One Year | Three Years | Five Years | Five Years | Total | |||||||||||||||
Long-Term Debt Obligations | $ | — | $ | — | $ | 15,000 | $ | 10,000 | $ | 25,000 | ||||||||||
Federal Home Loan Bank advances | 75,080 | 10,390 | — | — | 85,470 | |||||||||||||||
Operating Lease Obligations | 6,756 | 11,051 | 6,060 | 499 | 24,366 | |||||||||||||||
Purchase Obligations | 8,472 | 8,472 | — | — | 16,944 | |||||||||||||||
Total | $ | 90,308 | $ | 29,913 | $ | 21,060 | $ | 10,499 | $ | 151,780 | ||||||||||
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Minimum | ||||||||||||||||
Regulatory | Well | |||||||||||||||
At December 31, | 2009 | 2008 | Requirement | Capitalized | ||||||||||||
Tier I Capital | 13.20 | % | 10.47 | % | 4.00 | % | 6.00 | % | ||||||||
Total Capital | 14.50 | % | 11.76 | % | 8.00 | % | 10.00 | % | ||||||||
Leverage ratio | 7.60 | % | 7.36 | % | 4.00 | % | 5.00 | % |
Minimum | ||||||||||||||||
Regulatory | Well | |||||||||||||||
At December 31, | 2009 | 2008 | Requirement | Capitalized | ||||||||||||
Tier I Capital | 13.39 | % | 9.31 | % | 4.00 | % | 6.00 | % | ||||||||
Total Capital | 14.88 | % | 10.78 | % | 8.00 | % | 10.00 | % | ||||||||
Leverage ratio | 7.67 | % | 6.52 | % | 4.00 | % | 5.00 | % |
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2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||||||
Percentage | Percentage | Percentage | ||||||||||||||||||||||||||||||||||
Years Ended December 31, | Average | of Total | Average | of Total | Average | of Total | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Balance | Deposits | Rate | Balance | Deposits | Rate | Balance | Deposits | Rate | |||||||||||||||||||||||||||
Noninterest bearing demand | $ | 1,354,534 | 33.3 | % | — | % | $ | 1,181,679 | 37.3 | % | — | % | $ | 1,262,723 | 37.5 | % | — | % | ||||||||||||||||||
Interest bearing: | ||||||||||||||||||||||||||||||||||||
Transaction | 696,638 | 17.1 | % | 0.14 | % | 541,727 | 17.1 | % | 0.26 | % | 569,286 | 16.9 | % | 0.37 | % | |||||||||||||||||||||
Savings | 951,457 | 23.4 | % | 0.39 | % | 759,829 | 24.0 | % | 0.56 | % | 826,336 | 24.5 | % | 0.74 | % | |||||||||||||||||||||
Time less than $100 thousand | 458,117 | 11.3 | % | 0.98 | % | 193,889 | 6.1 | % | 2.69 | % | 210,039 | 6.2 | % | 3.31 | % | |||||||||||||||||||||
Time $100 thousand or more | 607,642 | 14.9 | % | 0.88 | % | 489,326 | 15.5 | % | 2.11 | % | 503,469 | 14.9 | % | 4.50 | % | |||||||||||||||||||||
Total | $ | 4,068,388 | 100.0 | % | 0.54 | % | $ | 3,166,450 | 100.0 | % | 1.07 | % | $ | 3,371,853 | 100.0 | % | 1.79 | % | ||||||||||||||||||
December 31, | ||||
(In thousands) | 2009 | |||
2010 | $ | 920,827 | ||
2011 | 28,522 | |||
2012 | 18,096 | |||
2013 | 5,286 | |||
2014 | 13,358 | |||
Thereafter | 5,299 | |||
Total | $ | 991,388 | ||
Deposits Over $100,000 Maturity Distribution | December 31, | |||
(In thousands) | 2009 | |||
Three months or less | $ | 349,046 | ||
Over three through six months | 160,675 | |||
Over six through twelve months | 45,716 | |||
Over twelve months | 18,716 | |||
Total | $ | 574,153 | ||
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At December 31, | ||||||||||||
(In thousands) | 2009 | 2008 | 2007 | |||||||||
Federal funds purchased | $ | — | $ | 335,000 | $ | 621,000 | ||||||
Other borrowed funds: | ||||||||||||
Sweep accounts | 109,332 | 119,015 | 150,097 | |||||||||
Term repurchase agreements | 99,044 | — | — | |||||||||
Securities sold under repurchase agreements | 3,102 | 3,260 | 7,969 | |||||||||
Line of credit | 15,700 | — | 19,533 | |||||||||
Total short term borrowings | $ | 227,178 | $ | 457,275 | $ | 798,599 | ||||||
Years Ended December 31, | ||||||||||||
(dollars in thousands) | 2009 | 2008 | 2007 | |||||||||
Federal funds purchased balances and rates paid on outstanding amount: | ||||||||||||
Average balance for the year | $ | 107,732 | $ | 411,488 | $ | 596,711 | ||||||
Maximum month-end balance during the year | 365,000 | 665,000 | 705,000 | |||||||||
Average interest rate for the year | 0.18 | % | 2.17 | % | 5.13 | % | ||||||
Average interest rate at period end | — | % | 0.16 | % | 4.33 | % | ||||||
Sweep accounts and rates paid on outstanding amount: | ||||||||||||
Average balance for the year | $ | 113,167 | $ | 126,394 | $ | 132,146 | ||||||
Maximum month-end balance during the year | 124,557 | 134,610 | 185,449 | |||||||||
Average interest rate for the year | 0.41 | % | 0.57 | % | 0.31 | % | ||||||
Average interest rate at period end | 0.35 | % | 0.53 | % | 0.41 | % | ||||||
Term repurchase agreements balances and rates paid outstanding amount: | ||||||||||||
Average balance for the year | $ | 90,344 | $ | — | $ | — | ||||||
Maximum month-end balance during the year | 99,044 | — | — | |||||||||
Average interest rate for the year | 1.53 | % | — | % | — | % | ||||||
Average interest rate at period end | 1.55 | % | — | % | — | % |
At and for the years ended December 31, | 2009 | 2008 | 2007 | |||||||||
Return on average total assets | 2.39 | % | 1.42 | % | 1.93 | % | ||||||
Return on average common shareholders’ equity | 25.84 | % | 14.77 | % | 22.11 | % | ||||||
Average shareholders’ equity as a percentage of: | ||||||||||||
Average total assets | 10.31 | % | 9.60 | % | 8.75 | % | ||||||
Average total loans | 16.25 | % | 16.65 | % | 16.17 | % | ||||||
Average total deposits | 12.89 | % | 12.79 | % | 12.04 | % | ||||||
Common dividend payout ratio | 34 | % | 68 | % | 46 | % |
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ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
Page | ||||
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Westamerica Bancorporation:
February 26, 2010
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(In thousands)
December 31, | 2009 | 2008 | ||||||
Assets | ||||||||
Cash and cash equivalents | $ | 361,135 | $ | 138,883 | ||||
Money market assets | 442 | 341 | ||||||
Investment securities available for sale | 384,208 | 288,454 | ||||||
Investment securities held to maturity (fair values of $736,270 at December 31, 2009 and $950,210 at December 31, 2008) | 726,935 | 949,325 | ||||||
Non-covered loans | 2,201,088 | 2,382,426 | ||||||
Allowance for loan losses | (41,043 | ) | (44,470 | ) | ||||
Non-covered loans, net of allowance for loan losses | 2,160,045 | 2,337,956 | ||||||
Covered loans | 855,301 | — | ||||||
Total loans | 3,015,346 | 2,337,956 | ||||||
Non-covered other real estate owned | 12,642 | 3,505 | ||||||
Covered other real estate owned | 23,297 | — | ||||||
Premises and equipment, net | 38,098 | 27,351 | ||||||
Identifiable intangibles | 35,667 | 15,208 | ||||||
Goodwill | 121,699 | 121,699 | ||||||
Interest receivable and other assets | 256,032 | 150,212 | ||||||
Total Assets | $ | 4,975,501 | $ | 4,032,934 | ||||
Liabilities | ||||||||
Deposits: | ||||||||
Noninterest bearing | $ | 1,428,432 | $ | 1,158,632 | ||||
Interest bearing: | ||||||||
Transaction | 669,004 | 525,153 | ||||||
Savings | 971,384 | 745,496 | ||||||
Time | 991,388 | 665,773 | ||||||
Total deposits | 4,060,208 | 3,095,054 | ||||||
Short-term borrowed funds | 227,178 | 457,275 | ||||||
Federal Home Loan Bank advances | 85,470 | — | ||||||
Debt financing and notes payable | 26,497 | 26,631 | ||||||
Liability for interest, taxes and other expenses | 70,700 | 44,122 | ||||||
Total Liabilities | 4,470,053 | 3,623,082 | ||||||
Shareholders’ Equity | ||||||||
Common Stock (no par value) | ||||||||
Authorized - 150,000 shares | ||||||||
Issued and outstanding - 29,208 at December 31, 2009 and 28,880 at December 31, 2008 | 366,247 | 352,265 | ||||||
Deferred compensation | 2,485 | 2,409 | ||||||
Accumulated Other Comprehensive Income | 3,714 | 1,040 | ||||||
Retained earnings | 133,002 | 54,138 | ||||||
Total Shareholders’ Equity | 505,448 | 409,852 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 4,975,501 | $ | 4,032,934 | ||||
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(In thousands, except per share data)
For the years ended December 31, | 2009 | 2008 | 2007 | |||||||||
Interest and Fee Income | ||||||||||||
Loans | $ | 189,801 | $ | 148,659 | $ | 162,242 | ||||||
Money market assets and funds sold | 3 | 3 | 7 | |||||||||
Investment securities: | ||||||||||||
Available for sale | ||||||||||||
Taxable | 9,002 | 8,854 | 15,639 | |||||||||
Tax-exempt | 7,545 | 9,357 | 11,566 | |||||||||
Held to maturity | ||||||||||||
Taxable | 13,971 | 19,237 | 23,361 | |||||||||
Tax-exempt | 21,627 | 22,359 | 23,057 | |||||||||
Total Interest and Fee Income | 241,949 | 208,469 | 235,872 | |||||||||
Interest Expense | ||||||||||||
Transaction deposits | 999 | 1,397 | 2,093 | |||||||||
Savings deposits | 3,678 | 4,245 | 6,144 | |||||||||
Time deposits | 9,872 | 15,540 | 29,612 | |||||||||
Short-term borrowed funds | 2,132 | 9,958 | 32,393 | |||||||||
Federal Home Loan Bank advances | 1,010 | — | — | |||||||||
Debt financing and notes payable | 1,689 | 2,103 | 2,313 | |||||||||
Total Interest Expense | 19,380 | 33,243 | 72,555 | |||||||||
Net Interest Income | 222,569 | 175,226 | 163,317 | |||||||||
Provision for Loan Losses | 10,500 | 2,700 | 700 | |||||||||
Net Interest Income After Provision for Loan Losses | 212,069 | 172,526 | 162,617 | |||||||||
Noninterest Income | ||||||||||||
Service charges on deposit accounts | 36,392 | 29,762 | 30,235 | |||||||||
Merchant credit card income | 9,068 | 10,525 | 10,841 | |||||||||
Debit card income | 4,875 | 3,769 | 3,797 | |||||||||
ATM fees and interchange | 3,693 | 2,923 | 2,824 | |||||||||
Trust fees | 1,429 | 1,227 | 1,281 | |||||||||
Financial services commissions | 583 | 830 | 1,321 | |||||||||
Gain on acquisition | 48,844 | — | — | |||||||||
Net losses from equity securities | — | (56,955 | ) | — | ||||||||
Other | 7,127 | 5,863 | 8,979 | |||||||||
Total Noninterest Income (Loss) | 112,011 | (2,056 | ) | 59,278 | ||||||||
Noninterest Expense | ||||||||||||
Salaries and related benefits | 65,391 | 51,492 | 50,142 | |||||||||
Occupancy | 18,748 | 13,703 | 13,346 | |||||||||
Outsourced data processing services | 9,000 | 8,440 | 7,069 | |||||||||
Amortization of intangibles | 6,697 | 3,221 | 3,653 | |||||||||
FDIC insurance assessments | 6,260 | 518 | 401 | |||||||||
Furniture and equipment | 5,859 | 3,801 | 4,302 | |||||||||
Courier Service | 3,808 | 3,322 | 3,404 | |||||||||
Professional fees | 3,583 | 2,624 | 1,889 | |||||||||
Visa litigation | — | (2,338 | ) | 2,338 | ||||||||
Other | 21,430 | 15,978 | 14,884 | |||||||||
Total Noninterest Expense | 140,776 | 100,761 | 101,428 | |||||||||
Income Before Income Taxes | 183,304 | 69,709 | 120,467 | |||||||||
Provision for income taxes | 57,878 | 9,874 | 30,691 | |||||||||
Net Income | 125,426 | 59,835 | 89,776 | |||||||||
Preferred stock dividends and discount accretion | 3,963 | — | — | |||||||||
Net Income Applicable to Common Equity | $ | 121,463 | $ | 59,835 | $ | 89,776 | ||||||
Average Common Shares Outstanding | 29,105 | 28,892 | 29,753 | |||||||||
Diluted Average Common Shares Outstanding | 29,353 | 29,273 | 30,165 | |||||||||
Per Common Share Data | ||||||||||||
Basic earnings | $ | 4.17 | $ | 2.07 | $ | 3.02 | ||||||
Diluted earnings | 4.14 | 2.04 | 2.98 | |||||||||
Dividends paid | 1.41 | 1.39 | 1.36 |
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(In thousands)
Accumulated | ||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||
Preferred | Common | Deferred | Comprehensive | Retained | ||||||||||||||||||||||||
Shares | Stock | Stock | Compensation | Income (Loss) | Earnings | Total | ||||||||||||||||||||||
December 31, 2006 | 30,547 | $ | — | $ | 341,529 | $ | 2,734 | $ | 1,850 | $ | 78,122 | $ | 424,235 | |||||||||||||||
Comprehensive income | ||||||||||||||||||||||||||||
Net income for the year 2007 | 89,776 | 89,776 | ||||||||||||||||||||||||||
Other comprehensive income, net of tax: | ||||||||||||||||||||||||||||
Increase in net unrealized losses on securities available for sale | (6,406 | ) | (6,406 | ) | ||||||||||||||||||||||||
Post-retirement benefit transition obligation amortization | 36 | 36 | ||||||||||||||||||||||||||
Total comprehensive income | 83,406 | |||||||||||||||||||||||||||
Exercise of stock options | 342 | 11,908 | 11,908 | |||||||||||||||||||||||||
Stock option tax benefits | 306 | 306 | ||||||||||||||||||||||||||
Restricted stock activity | 12 | 302 | 256 | 558 | ||||||||||||||||||||||||
Stock based compensation | 1,779 | 1,779 | ||||||||||||||||||||||||||
Stock awarded to employees | 3 | 161 | 161 | |||||||||||||||||||||||||
Purchase and retirement of stock | (1,886 | ) | (21,774 | ) | (65,329 | ) | (87,103 | ) | ||||||||||||||||||||
Dividends | (40,647 | ) | (40,647 | ) | ||||||||||||||||||||||||
December 31, 2007 | 29,018 | — | 334,211 | 2,990 | (4,520 | ) | 61,922 | 394,603 | ||||||||||||||||||||
Comprehensive income | ||||||||||||||||||||||||||||
Net income for the year 2008 | 59,835 | 59,835 | ||||||||||||||||||||||||||
Other comprehensive income, net of tax: | ||||||||||||||||||||||||||||
Increase in net unrealized gains on securities available for sale | 5,524 | 5,524 | ||||||||||||||||||||||||||
Post-retirement benefit transition obligation amortization | 36 | 36 | ||||||||||||||||||||||||||
Total comprehensive income | 65,395 | |||||||||||||||||||||||||||
Exercise of stock options | 567 | 22,830 | 22,830 | |||||||||||||||||||||||||
Stock option tax benefits | 1,130 | 1,130 | ||||||||||||||||||||||||||
Restricted stock activity | 11 | 1,261 | (581 | ) | 680 | |||||||||||||||||||||||
Stock based compensation | 1,193 | 1,193 | ||||||||||||||||||||||||||
Stock awarded to employees | 3 | 171 | 171 | |||||||||||||||||||||||||
Purchase and retirement of stock | (719 | ) | (8,531 | ) | (27,383 | ) | (35,914 | ) | ||||||||||||||||||||
Dividends | (40,236 | ) | (40,236 | ) | ||||||||||||||||||||||||
December 31, 2008 | 28,880 | — | 352,265 | 2,409 | 1,040 | 54,138 | 409,852 | |||||||||||||||||||||
Comprehensive income | ||||||||||||||||||||||||||||
Net income for the year 2009 | 125,426 | 125,426 | ||||||||||||||||||||||||||
Other comprehensive income, net of tax: | ||||||||||||||||||||||||||||
Increase in net unrealized gains on securities available for sale | 2,638 | 2,638 | ||||||||||||||||||||||||||
Post-retirement benefit transition obligation amortization | 36 | 36 | ||||||||||||||||||||||||||
Total comprehensive income | 128,100 | |||||||||||||||||||||||||||
Issuance of preferred stock and related warrants | 82,519 | 1,207 | 83,726 | |||||||||||||||||||||||||
Redemption of preferred stock | (83,726 | ) | (83,726 | ) | ||||||||||||||||||||||||
Preferred stock dividends and discount accretion | 1,207 | (3,963 | ) | (2,756 | ) | |||||||||||||||||||||||
Exercise of stock options | 361 | 9,610 | 9,610 | |||||||||||||||||||||||||
Stock option tax benefits | 2,188 | 2,188 | ||||||||||||||||||||||||||
Restricted stock activity | 7 | 251 | 76 | 327 | ||||||||||||||||||||||||
Stock based compensation | 1,132 | 1,132 | ||||||||||||||||||||||||||
Stock awarded to employees | 2 | 102 | 102 | |||||||||||||||||||||||||
Purchase and retirement of stock | (42 | ) | (508 | ) | (1,538 | ) | (2,046 | ) | ||||||||||||||||||||
Dividends | (41,061 | ) | (41,061 | ) | ||||||||||||||||||||||||
December 31, 2009 | 29,208 | $ | — | $ | 366,247 | $ | 2,485 | $ | 3,714 | $ | 133,002 | $ | 505,448 | |||||||||||||||
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(In thousands)
For the years ended December 31, | 2009 | 2008 | 2007 | |||||||||
Operating Activities: | ||||||||||||
Net income | $ | 125,426 | $ | 59,835 | $ | 89,776 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization/accretion | 10,429 | 9,438 | 9,342 | |||||||||
Loan loss provision | 10,500 | 2,700 | 700 | |||||||||
Net amortization of deferred loan cost (fees) | 470 | 124 | (955 | ) | ||||||||
(Increase) decrease in interest income receivable | (1,900 | ) | 3,480 | 2,870 | ||||||||
Decrease (increase) in other assets | 29,880 | (17,633 | ) | (7,073 | ) | |||||||
Stock option compensation expense | 1,132 | 1,193 | 1,779 | |||||||||
Excess tax benefits from stock-based compensation | (2,188 | ) | (1,130 | ) | (306 | ) | ||||||
Increase in income taxes payable | 2,316 | 141 | 586 | |||||||||
Decrease in interest expense payable | (439 | ) | (3,527 | ) | (901 | ) | ||||||
Increase (decrease) increase in other liabilities | 21,830 | (18,677 | ) | 12,534 | ||||||||
Gain on acquisition | (48,844 | ) | — | — | ||||||||
Loss on sale and impairment of investment securities | — | 62,653 | — | |||||||||
Gain on sale of Visa common stock | — | (5,698 | ) | — | ||||||||
Gain on sale of real estate and other assets | — | — | (232 | ) | ||||||||
Gain on sale of branch | 79 | — | — | |||||||||
Net loss on sales/write-down of fixed assets | 40 | 12 | 51 | |||||||||
Originations of loans for resale | (68 | ) | (1,269 | ) | (516 | ) | ||||||
Net proceeds from sale of loans originated for resale | 70 | 1,283 | 521 | |||||||||
Net write-down/loss on sale of property acquired in satisfaction of debt | 375 | 195 | 34 | |||||||||
Net Cash Provided By Operating Activities | 149,108 | 93,120 | 108,210 | |||||||||
Investing Activities | ||||||||||||
Net repayments of loans | 447,277 | 106,279 | 26,184 | |||||||||
Proceeds from FDIC loss-sharing agreement | 43,176 | — | — | |||||||||
Net cash acquired from acquisition | 44,397 | — | — | |||||||||
Purchases of investment securities available for sale | (22,992 | ) | (6,430 | ) | (30,571 | ) | ||||||
Proceeds from maturity/calls of securities available for sale | 105,097 | 197,594 | 103,914 | |||||||||
Purchases of securities held to maturity | (522 | ) | — | — | ||||||||
Proceeds from maturity/calls of securities held to maturity | 225,913 | 95,962 | 119,805 | |||||||||
Purchases of property, plant and equipment | (14,179 | ) | (1,905 | ) | (1,562 | ) | ||||||
Proceeds from sale of property and equipment | — | — | 237 | |||||||||
Purchases of FRB/FHLB* securities | — | (147 | ) | (145 | ) | |||||||
Proceeds from sale of FRB/FHLB/FHLMC* securities | 1,502 | 11,887 | 108 | |||||||||
Proceeds from sale of Visa common stock | — | 5,698 | — | |||||||||
Proceeds from sale of property acquired in satisfaction of debt | 11,082 | 311 | — | |||||||||
Net Cash Provided By Investing Activities | 840,751 | 409,249 | 217,970 | |||||||||
Financing Activities | ||||||||||||
Net decrease in deposits | (261,968 | ) | (169,736 | ) | (251,944 | ) | ||||||
Net (decrease) increase in short-term borrowings | (471,574 | ) | (341,324 | ) | 66,622 | |||||||
Repayments of notes payable | — | (10,000 | ) | — | ||||||||
Proceeds from issuance of preferred stock and warrants | 83,726 | — | — | |||||||||
Redemption of preferred stock | (83,726 | ) | — | — | ||||||||
Preferred stock dividends | (2,756 | ) | — | — | ||||||||
Exercise of stock options/issuance of shares | 9,610 | 22,830 | 11,908 | |||||||||
Excess tax benefits from stock-based compensation | 2,188 | 1,130 | 306 | |||||||||
Retirement of common stock including repurchases | (2,046 | ) | (35,914 | ) | (87,103 | ) | ||||||
Common stock dividends paid | (41,061 | ) | (40,236 | ) | (40,647 | ) | ||||||
Net Cash Used In Financing Activities | (767,607 | ) | (573,250 | ) | (300,858 | ) | ||||||
Net Increase (Decrease) In Cash and Cash Equivalents | 222,252 | (70,881 | ) | 25,322 | ||||||||
Cash and Cash Equivalents at Beginning of Year | 138,883 | 209,764 | 184,442 | |||||||||
Cash and Cash Equivalents at End of Year | $ | 361,135 | $ | 138,883 | $ | 209,764 | ||||||
Supplemental Disclosures: | ||||||||||||
Supplemental disclosure of noncash activities: | ||||||||||||
Loans transferred to other real estate owned | $ | 38,185 | $ | 3,432 | $ | — | ||||||
Unrealized gain (loss) on securities available for sale, net of tax | 2,638 | 5,524 | (6,406 | ) | ||||||||
Supplemental disclosure of cash flow activity: | ||||||||||||
Interest paid for the period | 27,558 | 36,770 | 73,456 | |||||||||
Income tax payments for the period | 36,852 | 24,056 | 30,791 |
* | Federal Reserve Bank (“FRB”), Federal Home Loan Bank (“FHLB”) and Federal Home Loan Mortgage Corp. (“FHLMC”) |
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• | In circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value by using one or more following: a) the quoted price for the identical liability when traded as an asset; b) the quoted prices for similar liabilities or similar liabilities when traded as assets; c) the income approach, such as present value technique; and/or d) the market approach, such as a technique that is based on the amount at the measurement date that the reporting entity would pay to transfer the identical liability or would receive to enter into the identical liability. |
• | When estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. |
• | Both a quoted price in an active market for the identical liability at the measurement date and the quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. |
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At | ||||
February 6, 2009 | ||||
(In thousands) | ||||
Assets | ||||
Cash and cash equivalents | $ | 44,668 | ||
Federal funds sold | 12,760 | |||
Securities | 173,839 | |||
Loans | 1,174,353 | |||
Core deposit intangible | 28,107 | |||
Other real estate owned | 9,332 | |||
Other assets | 181,405 | |||
Total Assets | $ | 1,624,464 | ||
Liabilities | ||||
Deposits | 1,234,123 | |||
Federal funds purchased and securities sold under repurchase agreements | 153,169 | |||
Other borrowed funds | 187,252 | |||
Liabilities for interest and other expenses | 1,076 | |||
Total Liabilities | 1,575,620 | |||
Net assets acquired | $ | 48,844 | ||
At | ||||
February 6, 2009 | ||||
(In thousands) | ||||
County Bank tangible stockholder’s equity | $ | 58,623 | ||
Adjustments to reflect assets acquired and liabilities assumed at fair value: | ||||
Loans and leases, net | (150,326 | ) | ||
Other real estate owned | (5,470 | ) | ||
FDIC loss-sharing receivable (included in other assets) | 128,962 | |||
Core deposit intangible | 28,107 | |||
Deposits | (10,823 | ) | ||
Securities sold under repurchase agreements | (2,061 | ) | ||
Other borrowed funds | 1,832 | |||
“Bargain Purchase” gain | $ | 48,844 | ||
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Year ended December 31, 2009 | ||||||||||||||||
(In thousands except per share data) | ||||||||||||||||
Pro Forma | Pro Forma | |||||||||||||||
Westamerica | County Bank | Adjustments | Combined | |||||||||||||
Interest Income | $ | 199,915 | $ | 73,977 | $ | (4,603 | ) | $ | 269,289 | |||||||
Interest Expense | 8,751 | 18,848 | (9,042 | ) | 18,557 | |||||||||||
Net Interest Income | 191,164 | 55,129 | 4,439 | 250,732 | ||||||||||||
Provision for Credit Losses | 10,500 | 11,734 | — | 22,234 | ||||||||||||
Net Interest Income after Provision for Credit Losses | 180,664 | 43,395 | 4,439 | 228,498 | ||||||||||||
Noninterest Income | 53,560 | 14,122 | 48,844 | 116,526 | ||||||||||||
Noninterest Expense | 99,265 | 40,926 | 4,144 | 144,335 | ||||||||||||
Income Before Taxes | 134,959 | 16,591 | 49,139 | 200,689 | ||||||||||||
Income Tax Provision | 48,585 | 6,977 | 20,663 | 76,225 | ||||||||||||
Net Income | $ | 86,374 | $ | 9,614 | $ | 28,476 | $ | 124,464 | ||||||||
Preferred dividends and discount accretion | ||||||||||||||||
Net Income Applicable to Common Equity | $ | 82,411 | $ | 9,614 | $ | 28,476 | $ | 120,501 | ||||||||
Earnings Per Common Share | $ | 2.83 | $ | 0.33 | $ | 0.98 | $ | 4.14 | ||||||||
Diluted Earnings Per Common Share | 2.81 | 0.33 | 0.97 | 4.11 | ||||||||||||
Average Common Shares Outstanding | 29,105 | |||||||||||||||
Diluted Average Common Shares Outstanding | 29,353 |
Year ended December 31, 2008 | ||||||||||||||||
(In thousands except per share data) | ||||||||||||||||
Pro Forma | Pro Forma | |||||||||||||||
Westamerica | County Bank | Adjustments | Combined | |||||||||||||
Interest Income | $ | 208,469 | $ | 117,175 | $ | (4,477 | ) | $ | 321,167 | |||||||
Interest Expense | 33,243 | 40,462 | (9,717 | ) | 63,988 | |||||||||||
Net Interest Income | 175,226 | 76,713 | 5,240 | 257,179 | ||||||||||||
Provision for Credit Losses | 2,700 | 55,370 | — | 58,070 | ||||||||||||
Net Interest Income after Provision for Credit Losses | 172,526 | 21,343 | 5,240 | 199,109 | ||||||||||||
Noninterest (Loss) Income | (2,056 | ) | 5,775 | 48,844 | 52,563 | |||||||||||
Noninterest Expense | 100,761 | 115,774 | 5,989 | 222,524 | ||||||||||||
Income (Loss) Before Taxes | 69,709 | (88,656 | ) | 48,095 | 29,148 | |||||||||||
Income Tax Provision | 9,874 | 7,381 | 20,224 | 37,479 | ||||||||||||
Net Income (Loss) | $ | 59,835 | $ | (96,037 | ) | $ | 27,871 | $ | (8,331 | ) | ||||||
Net Income (Loss) Applicable to Common Equity | $ | 59,835 | $ | (96,037 | ) | $ | 27,871 | $ | (8,331 | ) | ||||||
Earnings (Loss) Per Common Share | $ | 2.07 | $ | (3.32 | ) | $ | 0.96 | $ | (0.29 | ) | ||||||
Diluted Earnings (Loss) Per Common Share | 2.04 | (3.28 | ) | 0.95 | (0.28 | ) | ||||||||||
Average Common Shares Outstanding | 28,892 | |||||||||||||||
Diluted Average Common Shares Outstanding | 29,273 |
Gross | Gross | Estimated | ||||||||||||||
Amortized | Unrealized | Unrealized | Market | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
(In thousands) | ||||||||||||||||
U.S. Treasury securities | $ | 2,987 | $ | — | $ | — | $ | 2,987 | ||||||||
Securities of U.S. Government sponsored entities | 21,018 | 48 | (25 | ) | 21,041 | |||||||||||
Mortgage backed securities | 143,625 | 2,504 | (124 | ) | 146,005 | |||||||||||
Obligations of States and political subdivisions | 155,093 | 4,077 | (977 | ) | 158,193 | |||||||||||
Collateralized mortgage obligations | 40,981 | 652 | (223 | ) | 41,410 | |||||||||||
Asset-backed securities | 10,000 | — | (1,661 | ) | 8,339 | |||||||||||
FHLMC and FNMA stock | 824 | 750 | (1 | ) | 1,573 | |||||||||||
Other securities | 2,778 | 1,926 | (44 | ) | 4,660 | |||||||||||
Total | $ | 377,306 | $ | 9,957 | $ | (3,055 | ) | $ | 384,208 | |||||||
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Gross | Gross | Estimated | ||||||||||||||
Amortized | Unrealized | Unrealized | Market | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
(In thousands) | ||||||||||||||||
Mortgage backed securities | $ | 61,893 | $ | 1,752 | $ | — | $ | 63,645 | ||||||||
Obligations of States and political subdivisions | 516,596 | 12,528 | (2,190 | ) | 526,934 | |||||||||||
Collateralized mortgage obligations | 148,446 | 3,352 | (6,107 | ) | 145,691 | |||||||||||
Total | $ | 726,935 | $ | 17,632 | $ | (8,297 | ) | $ | 736,270 | |||||||
Gross | Gross | Estimated | ||||||||||||||
Amortized | Unrealized | Unrealized | Market | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
(In thousands) | ||||||||||||||||
U.S. Treasury securities | $ | 3,014 | $ | 68 | $ | — | $ | 3,082 | ||||||||
Securities of U.S. Government sponsored entities | 11,019 | 71 | (13 | ) | 11,077 | |||||||||||
Mortgage backed securities | 40,302 | 941 | (3 | ) | 41,240 | |||||||||||
Obligations of States and political subdivisions | 156,602 | 5,042 | (598 | ) | 161,046 | |||||||||||
Collateralized mortgage obligations | 61,565 | 143 | (1,857 | ) | 59,851 | |||||||||||
Asset-backed securities | 9,999 | — | (3,552 | ) | 6,447 | |||||||||||
FHLMC and FNMA stock | 824 | — | (3 | ) | 821 | |||||||||||
Other securities | 2,778 | 2,222 | (110 | ) | 4,890 | |||||||||||
Total | $ | 286,103 | $ | 8,487 | $ | (6,136 | ) | $ | 288,454 | |||||||
Gross | Gross | Estimated | ||||||||||||||
Amortized | Unrealized | Unrealized | Market | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
(In thousands) | ||||||||||||||||
Securities of U.S. Government sponsored entities | $ | 110,000 | $ | 1,731 | $ | — | $ | 111,731 | ||||||||
Mortgage backed securities | 85,676 | 867 | (299 | ) | 86,244 | |||||||||||
Obligations of States and political subdivisions | 545,237 | 12,983 | (2,875 | ) | 555,345 | |||||||||||
Collateralized mortgage obligations | 208,412 | 1,744 | (13,266 | ) | 196,890 | |||||||||||
Total | $ | 949,325 | $ | 17,325 | $ | (16,440 | ) | $ | 950,210 | |||||||
Securities Available | Securities Held | |||||||||||||||
for Sale | to Maturity | |||||||||||||||
Estimated | Estimated | |||||||||||||||
Amortized | Market | Amortized | Market | |||||||||||||
Cost | Value | Cost | Value | |||||||||||||
(In thousands) | ||||||||||||||||
Maturity in years: | ||||||||||||||||
1 year or less | $ | 12,763 | $ | 12,852 | $ | 8,303 | $ | 8,389 | ||||||||
1 to 5 years | 86,757 | 88,759 | 58,111 | 60,075 | ||||||||||||
5 to 10 years | 61,532 | 62,933 | 413,720 | 421,955 | ||||||||||||
Over 10 years | 28,046 | 26,016 | 36,462 | 36,515 | ||||||||||||
Subtotal | 189,098 | 190,560 | 516,596 | 526,934 | ||||||||||||
Mortgage-backed securities and collateralized mortgage obligations | 184,606 | 187,415 | 210,339 | 209,336 | ||||||||||||
Other securities | 3,602 | 6,233 | — | — | ||||||||||||
Total | $ | 377,306 | $ | 384,208 | $ | 726,935 | $ | 736,270 | ||||||||
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Securities Available | Securities Held | |||||||||||||||
for Sale | to Maturity | |||||||||||||||
Estimated | Estimated | |||||||||||||||
Amortized | Market | Amortized | Market | |||||||||||||
Cost | Value | Cost | Value | |||||||||||||
(In thousands) | ||||||||||||||||
Maturity in years: | ||||||||||||||||
1 year or less | $ | 17,422 | $ | 17,528 | $ | 115,593 | $ | 117,375 | ||||||||
1 to 5 years | 69,815 | 71,664 | 39,972 | 40,674 | ||||||||||||
5 to 10 years | 72,482 | 75,431 | 396,275 | 405,283 | ||||||||||||
Over 10 years | 20,916 | 17,029 | 103,396 | 103,743 | ||||||||||||
Subtotal | 180,635 | 181,652 | 655,236 | 667,075 | ||||||||||||
Mortgage-backed | 101,866 | 101,091 | 294,089 | 283,135 | ||||||||||||
Other securities | 3,602 | 5,711 | — | — | ||||||||||||
Total | $ | 286,103 | $ | 288,454 | $ | 949,325 | $ | 950,210 | ||||||||
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||||||||||
Fair Value | Losses | Fair Value | Losses | Fair Value | Losses | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
U.S. Treasury securities | $ | 2,987 | $ | — | $ | — | $ | — | $ | 2,987 | $ | — | ||||||||||||
Securities of U.S. Government sponsored entities | 19,979 | (25 | ) | — | — | 19,979 | (25 | ) | ||||||||||||||||
Mortgage backed securities | 17,885 | (124 | ) | — | — | 17,885 | (124 | ) | ||||||||||||||||
Obligations of States and political subdivisions | 25,050 | (795 | ) | 3,866 | (182 | ) | 28,916 | (977 | ) | |||||||||||||||
Collateralized mortgage obligations | 9,896 | (37 | ) | 5,002 | (186 | ) | 14,898 | (223 | ) | |||||||||||||||
Asset-backed securities | — | — | 8,339 | (1,661 | ) | 8,339 | (1,661 | ) | ||||||||||||||||
FHLMC and FNMA stock | 4 | (1 | ) | — | — | 4 | (1 | ) | ||||||||||||||||
Other securities | — | — | 1,956 | (44 | ) | 1,956 | (44 | ) | ||||||||||||||||
Total | $ | 75,801 | $ | (982 | ) | $ | 19,163 | $ | (2,073 | ) | $ | 94,964 | $ | (3,055 | ) | |||||||||
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Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||||||||||
Fair Value | Losses | Fair Value | Losses | Fair Value | Losses | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Obligations of States and political subdivisions | $ | 46,111 | $ | (995 | ) | $ | 16,964 | $ | (1,195 | ) | $ | 63,075 | $ | (2,190 | ) | |||||||||
Collateralized mortgage obligations | 7,639 | (42 | ) | 30,674 | (6,065 | ) | 38,313 | (6,107 | ) | |||||||||||||||
Total | $ | 53,750 | $ | (1,037 | ) | $ | 47,638 | $ | (7,260 | ) | $ | 101,388 | $ | (8,297 | ) | |||||||||
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||||||||||
Fair Value | Losses | Fair Value | Losses | Fair Value | Losses | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Securities of U.S. Government sponsored entities | $ | 9,988 | $ | (13 | ) | $ | — | $ | — | $ | 9,988 | $ | (13 | ) | ||||||||||
Mortgage backed securities | — | — | 1,680 | (3 | ) | 1,680 | (3 | ) | ||||||||||||||||
Obligations of States and political subdivisions | 8,817 | (470 | ) | 2,171 | (128 | ) | 10,988 | (598 | ) | |||||||||||||||
Collateralized mortgage obligations | 11,527 | (595 | ) | 25,085 | (1,262 | ) | 36,612 | (1,857 | ) | |||||||||||||||
Asset-backed securities | — | — | 6,447 | (3,552 | ) | 6,447 | (3,552 | ) | ||||||||||||||||
FHLMC and FNMA stock | 3 | (3 | ) | — | — | 3 | (3 | ) | ||||||||||||||||
Other securities | — | — | 1,890 | (110 | ) | 1,890 | (110 | ) | ||||||||||||||||
Total | $ | 30,335 | $ | (1,081 | ) | $ | 37,273 | $ | (5,055 | ) | $ | 67,608 | $ | (6,136 | ) | |||||||||
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Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||||||||||
Fair Value | Losses | Fair Value | Losses | Fair Value | Losses | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Mortgage backed securities | $ | 22,401 | $ | (286 | ) | $ | 3,886 | $ | (13 | ) | $ | 26,287 | $ | (299 | ) | |||||||||
Obligations of States and political subdivisions | 73,205 | (2,846 | ) | 4,713 | (29 | ) | 77,918 | (2,875 | ) | |||||||||||||||
Collateralized mortgage obligations | 40,379 | (10,925 | ) | 24,037 | (2,341 | ) | 64,416 | (13,266 | ) | |||||||||||||||
Total | $ | 135,985 | $ | (14,057 | ) | $ | 32,636 | $ | (2,383 | ) | $ | 168,621 | $ | (16,440 | ) | |||||||||
At December 31, | At December 31, | |||||||
2009 | 2008 | |||||||
(In thousands) | ||||||||
Non-covered loans: | ||||||||
Commercial | $ | 498,594 | $ | 524,786 | ||||
Commercial real estate | 801,008 | 817,423 | ||||||
Construction | 32,156 | 52,664 | ||||||
Residential real estate | 371,197 | 458,447 | ||||||
Consumer installment & other | 498,133 | 529,106 | ||||||
Gross Loans | 2,201,088 | 2,382,426 | ||||||
Allowance for loan losses | (41,043 | ) | (44,470 | ) | ||||
Net Loans | $ | 2,160,045 | $ | 2,337,956 | ||||
Impaired | Non Impaired | Total Covered | ||||||||||
Purchased Loans | Purchased Loans | Loans | ||||||||||
(In thousands) | ||||||||||||
Covered loans: | ||||||||||||
Commercial | $ | 8,538 | $ | 244,811 | $ | 253,349 | ||||||
Commercial real estate | 19,870 | 425,570 | 445,440 | |||||||||
Construction | 14,378 | 26,082 | 40,460 | |||||||||
Residential real estate | 138 | 18,383 | 18,521 | |||||||||
Consumer installment & other | 272 | 97,259 | 97,531 | |||||||||
Total loans | $ | 43,196 | $ | 812,105 | $ | 855,301 | ||||||
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Gross contractual loan principal payment receivable | $ | 1,151,972 | ||
Estimate of contractual principal not expected to be collected | (72,625 | ) | ||
Fair value of non impaired purchased loans receivable | $ | 1,093,809 |
Contractually required payments receivable (including interest) | $ | 209,842 | ||
Nonaccretable difference | (129,298 | ) | ||
Cash flows expected to be collected | 80,544 | |||
Accretable difference | — | |||
Fair value of loans acquired | $ | 80,544 | ||
Carrying amount at the beginning of the period (refined) | $ | 80,544 | ||
Reductions during the period | (37,348 | ) | ||
Carrying amount at the end of the period | $ | 43,196 | ||
2009 | 2008 | 2007 | ||||||||||
Balance at January 1, | $ | 47,563 | $ | 55,799 | $ | 59,023 | ||||||
Provision for loan losses | 10,500 | 2,700 | 700 | |||||||||
Provision for unfunded credit commitment losses | (400 | ) | (200 | ) | (400 | ) | ||||||
Loans charged off | (17,267 | ) | (12,413 | ) | (5,681 | ) | ||||||
Recoveries of loans previously charged off | 3,340 | 1,677 | 2,157 | |||||||||
Balance as of December 31, | $ | 43,736 | $ | 47,563 | $ | 55,799 | ||||||
Components: | ||||||||||||
Allowance for loan losses | $ | 41,043 | $ | 44,470 | $ | 52,506 | ||||||
Reserve for unfunded credit commitments | 2,693 | 3,093 | 3,293 | |||||||||
Allowance for credit losses | $ | 43,736 | $ | 47,563 | $ | 55,799 | ||||||
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2009 | 2008 | 2007 | ||||||||||
(In thousands) | ||||||||||||
Interest income that would have been recognized had the loans performed in accordance with their original terms | $ | 5,195 | $ | 665 | $ | 428 | ||||||
Less: Interest income recognized on nonaccrual loans | (2,074 | ) | (511 | ) | (474 | ) | ||||||
Total reduction (addition) of interest income | $ | 3,121 | $ | 154 | $ | (46 | ) | |||||
Accumulated | ||||||||||||
Depreciation | ||||||||||||
and | Net Book | |||||||||||
Cost | Amortization | Value | ||||||||||
(In thousands) | ||||||||||||
2009 | ||||||||||||
Land | $ | 11,490 | $ | — | $ | 11,490 | ||||||
Buildings and improvements | 43,833 | (21,786 | ) | 22,047 | ||||||||
Leasehold improvements | 6,140 | (5,012 | ) | 1,128 | ||||||||
Furniture and equipment | 15,551 | (12,118 | ) | 3,433 | ||||||||
Total | $ | 77,014 | $ | (38,916 | ) | $ | 38,098 | |||||
2008 | ||||||||||||
Land | $ | 8,858 | $ | — | $ | 8,858 | ||||||
Buildings and improvements | 33,910 | (20,156 | ) | 13,754 | ||||||||
Leasehold improvements | 5,887 | (5,002 | ) | 885 | ||||||||
Furniture and equipment | 15,269 | (11,415 | ) | 3,854 | ||||||||
Total | $ | 63,924 | $ | (36,573 | ) | $ | 27,351 | |||||
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December 31, 2007 | $ | 121,719 | ||
Recognition of stock option tax benefits for the exercise of options converted upon merger | (20 | ) | ||
December 31, 2008 | $ | 121,699 | ||
December 31, 2009 | $ | 121,699 | ||
December 31, | ||||||||||||||||
2009 | 2008 | |||||||||||||||
Gross | Gross | |||||||||||||||
Carrying | Accumulated | Carrying | Accumulated | |||||||||||||
Amount | Amortization | Amount | Amortization | |||||||||||||
Core Deposit Intangibles | $ | 51,538 | $ | (19,160 | ) | $ | 24,383 | $ | (13,426 | ) | ||||||
Merchant Draft Processing Intangible | 10,300 | (7,011 | ) | 10,300 | (6,049 | ) | ||||||||||
Total Intangible Assets | $ | 61,838 | $ | (26,171 | ) | $ | 34,683 | $ | (19,475 | ) | ||||||
Merchant | ||||||||||||
Core | Draft | |||||||||||
Deposit | Processing | |||||||||||
Intangibles | Intangible | Total | ||||||||||
Twelve months ended December 31, 2009 (actual) | $ | 5,735 | $ | 962 | $ | 6,697 | ||||||
Estimate for year ended December 31, 2010 | 5,361 | 774 | 6,135 | |||||||||
2011 | 4,817 | 624 | 5,441 | |||||||||
2012 | 4,372 | 500 | 4,872 | |||||||||
2013 | 3,842 | 400 | 4,242 | |||||||||
2014 | 3,516 | 324 | 3,840 | |||||||||
2015 | 3,193 | 262 | 3,455 |
2009 | 2008 | |||||||
(In thousands) | ||||||||
Senior fixed-rate note(1) | $ | 15,000 | $ | 15,000 | ||||
Subordinated fixed-rate note(2) | 11,497 | 11,631 | ||||||
Total debt financing and notes payable — Parent | $ | 26,497 | $ | 26,631 | ||||
(1) | Senior note, issued by Westamerica Bancorporation, originated in October 2003 and maturing October 31, 2013. Interest of 5.31% per annum is payable semiannually on April 30 and October 31, with original principal payment due at maturity. | |
(2) | Subordinated debt, assumed by Westamerica Bancorporation March 1, 2005, originated February 22, 2001. Par amount $10 million, interest of 10.2% per annum, payable semiannually. Matures February 22, 2031, redeemable February 22, 2011 at a premium and February 22, 2021 at par. |
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2009 | 2008 | |||||||||||||||||||||||
Balance | Weighted | Balance | Weighted | |||||||||||||||||||||
At | Average | Average | At | Average | Average | |||||||||||||||||||
December 31, | Balance | Rate | December 31, | Balance | Rate | |||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||
Federal funds purchased | $ | — | $ | 107,732 | 0.18 | % | $ | 335,000 | $ | 411,488 | 2.17 | % | ||||||||||||
Sweep accounts | 109,332 | 113,167 | 0.41 | 119,015 | 126,394 | 0.57 | ||||||||||||||||||
Term repurchase agreements | 99,044 | 90,344 | 1.53 | — | — | — | ||||||||||||||||||
Federal Home Loan Bank advances | 85,470 | 79,417 | 1.25 | — | — | — | ||||||||||||||||||
Securities sold under repurchase agreements | 3,102 | 2,991 | 0.61 | 3,260 | 6,698 | 1.87 | ||||||||||||||||||
Line of credit | 15,700 | 2,071 | 3.13 | — | 4,858 | 3.47 | ||||||||||||||||||
Time deposits Over $100 thousand | 574,153 | 607,642 | 0.88 | 476,604 | 489,326 | 2.11 |
2009 | 2008 | |||||||
Highest | Highest | |||||||
Balance at | Balance at | |||||||
Any Month-end | Any Month-end | |||||||
(In thousands) | ||||||||
Federal funds purchased | $ | 365,000 | $ | 665,000 | ||||
Sweep accounts | 124,557 | 134,610 | ||||||
Term repurchase agreement | 98,964 | — | ||||||
Federal Home Loan Bank advances | 86,916 | — | ||||||
Securities sold under repurchase agreements | 3,567 | 8,644 | ||||||
Line of credit | 17,877 | 17,808 |
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Options Outstanding | Options Exercisable | |||||||||||||||||||||||||||||||
Number | Aggregate | Weighted | Aggregate | Weighted | ||||||||||||||||||||||||||||
Outstanding | Intrinsic | Average | Weighted | Intrinsic | Average | Weighted | ||||||||||||||||||||||||||
Range of | at 12/31/2009 | Value | Remaining | Average | Number | Value | Remaining | Average | ||||||||||||||||||||||||
Exercise | (in | (in | Contractual | Exercise | Exercisable | (in | Contractual | Exercise | ||||||||||||||||||||||||
Price | thousands) | thousands) | Life (yrs) | Price | at 12/31/2009 | thousands) | Life (yrs) | Price | ||||||||||||||||||||||||
20 - 25 | 1 | $ | 38 | 1.4 | $ | 24 | 1 | $ | 38 | 1.4 | $ | 24 | ||||||||||||||||||||
35 - 40 | 586 | 9,580 | 1.7 | 39 | 586 | 9,580 | 1.7 | 39 | ||||||||||||||||||||||||
40 - 45 | 565 | 7,731 | 5.6 | 42 | 331 | 4,834 | 3.1 | 41 | ||||||||||||||||||||||||
45 - 50 | 685 | 4,608 | 5.9 | 49 | 496 | 3,126 | 5.1 | 49 | ||||||||||||||||||||||||
50 - 55 | 726 | 2,452 | 6.6 | 52 | 726 | 2,452 | 6.6 | 52 | ||||||||||||||||||||||||
$20 - 55 | 2,563 | $ | 24,409 | 5.0 | 46 | 2,140 | $ | 20,030 | 4.4 | 46 | ||||||||||||||||||||||
For the twelve months ended December 31, | 2009 | 2008 | 2007 | |||||||||
Expected volatility*1 | 18 | % | 15 | % | 14 | % | ||||||
Expected life in years*2 | 4.0 | 4.0 | 4.0 | |||||||||
Risk-free interest rate*3 | 1.25 | % | 2.66 | % | 4.89 | % | ||||||
Expected dividend yield | 3.41 | % | 2.78 | % | 2.82 | % | ||||||
Fair value per award | $ | 4.51 | $ | 6.77 | $ | 6.02 |
*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. | |
*3 | The risk-free rate over the expected life based on the US Treasury yield curve in effect at the time of the grant. |
Weighted | ||||||||||||
Weighted | Average | |||||||||||
Shares | Average | Remaining | ||||||||||
(In | Exercise | Contractual | ||||||||||
Thousands) | Price | Term (years) | ||||||||||
Outstanding at January 1, 2009 | 2,469 | $ | 42.82 | |||||||||
Granted | 246 | 43.02 | ||||||||||
Warrants issued to U.S. Treasury | 247 | 50.92 | ||||||||||
Exercised | (361 | ) | 26.47 | |||||||||
Forfeited or expired | (38 | ) | 47.34 | |||||||||
Outstanding at December 31, 2009 | 2,563 | 45.84 | 5.0 | |||||||||
Exercisable at December 31, 2009 | 2,140 | 46.01 | 4.4 | |||||||||
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Weighted | ||||||||
Average | ||||||||
Shares | Grant | |||||||
(In | Date | |||||||
Thousands) | Fair Value | |||||||
Nonvested at January 1, 2009 | 391 | |||||||
Granted | 246 | |||||||
Vested | (184 | ) | ||||||
Forfeited | (30 | ) | ||||||
Nonvested at December 31, 2009 | 423 | $ | 5.42 | |||||
2009 | 2008 | |||||||
Outstanding at January 1, | 44 | 38 | ||||||
Granted | 19 | 28 | ||||||
Issued upon vesting | (9 | ) | (14 | ) | ||||
Forfeited | (5 | ) | (8 | ) | ||||
Outstanding at December 31, | 49 | 44 | ||||||
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To Be Well | ||||||||||||||||||||||||
Capitalized Under | ||||||||||||||||||||||||
the FDICIA | ||||||||||||||||||||||||
For Capital | Prompt Corrective | |||||||||||||||||||||||
Adequacy Purposes | Action Provisions | |||||||||||||||||||||||
December 31, 2009 | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Total Capital (to risk-weighted assets) | ||||||||||||||||||||||||
Consolidated Company | $ | 406,339 | 14.50 | % | $ | 224,241 | 8.00 | % | $ | 280,301 | 10.00 | % | ||||||||||||
Westamerica Bank | 411,310 | 14.88 | % | 221,177 | 8.00 | % | 276,471 | 10.00 | % | |||||||||||||||
Tier 1 Capital (to risk-weighted assets) | ||||||||||||||||||||||||
Consolidated Company | 370,011 | 13.20 | % | 112,120 | 4.00 | % | 168,180 | 6.00 | % | |||||||||||||||
Westamerica Bank | 370,321 | 13.39 | % | 110,588 | 4.00 | % | 165,882 | 6.00 | % | |||||||||||||||
Leverage Ratio * | ||||||||||||||||||||||||
Consolidated Company | 370,011 | 7.60 | % | 194,625 | 4.00 | % | 243,281 | 5.00 | % | |||||||||||||||
Westamerica Bank | 370,321 | 7.67 | % | 193,092 | 4.00 | % | 241,365 | 5.00 | % |
To Be Well | ||||||||||||||||||||||||
Capitalized Under | ||||||||||||||||||||||||
the FDICIA | ||||||||||||||||||||||||
For Capital | Prompt Corrective | |||||||||||||||||||||||
Adequacy Purposes | Action Provisions | |||||||||||||||||||||||
December 31, 2008 | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Total Capital (to risk-weighted assets) | ||||||||||||||||||||||||
Consolidated Company | $ | 324,455 | 11.76 | % | $ | 220,709 | 8.00 | % | $ | 275,887 | 10.00 | % | ||||||||||||
Westamerica Bank | 293,688 | 10.78 | % | 217,875 | 8.00 | % | 272,344 | 10.00 | % | |||||||||||||||
Tier 1 Capital (to risk-weighted assets) | ||||||||||||||||||||||||
Consolidated Company | 288,859 | 10.47 | % | 110,355 | 4.00 | % | 165,532 | 6.00 | % | |||||||||||||||
Westamerica Bank | 253,478 | 9.31 | % | 108,938 | 4.00 | % | 163,406 | 6.00 | % | |||||||||||||||
Leverage Ratio * | ||||||||||||||||||||||||
Consolidated Company | 288,859 | 7.36 | % | 156,934 | 4.00 | % | 196,167 | 5.00 | % | |||||||||||||||
Westamerica Bank | 253,478 | 6.52 | % | 155,408 | 4.00 | % | 194,260 | 5.00 | % |
* | The leverage ratio consists of Tier 1 capital divided by quarterly average assets excluding certain intangible assets. The minimum leverage ratio guideline is 3.00% for banking organizations that do not anticipate significant growth and that have well-diversified risk, excellent asset quality, high liquidity, good earnings and, in general, are considered top-rated, strong banking organizations. |
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2009 | 2008 | |||||||
(In thousands) | ||||||||
Deferred tax asset | ||||||||
Allowance for credit losses | $ | 18,363 | $ | 19,789 | ||||
State franchise taxes | 4,792 | 3,475 | ||||||
Deferred compensation | 13,888 | 14,535 | ||||||
Real estate owned | 97 | 97 | ||||||
Estimated loss on acquired assets | 32,408 | — | ||||||
Post retirement benefits | 1,379 | 1,530 | ||||||
Employee benefit accruals | 1,037 | 764 | ||||||
Limited partnership investments | 1,161 | 377 | ||||||
Impaired capital assets | 20,977 | 21,292 | ||||||
Capital loss carryforward | 794 | — | ||||||
Premises and equipment | 45 | — | ||||||
Other | 2,496 | 836 | ||||||
Subtotal deferred tax asset | 97,436 | 62,695 | ||||||
Valuation allowance | — | — | ||||||
Total deferred tax asset | 97,436 | 62,695 | ||||||
Deferred tax liability | ||||||||
Net deferred loan fees | 691 | 770 | ||||||
Premises and equipment | — | 236 | ||||||
Intangible assets | 15,643 | 6,958 | ||||||
Securities available for sale | 2,587 | 989 | ||||||
Leases | 994 | 439 | ||||||
Gain on acquired net assets | 5,358 | — | ||||||
FDIC indemnification receivable | 35,693 | — | ||||||
Other | 742 | 399 | ||||||
Total deferred tax liability | 61,708 | 9,791 | ||||||
Net deferred tax asset | $ | 35,728 | $ | 52,904 | ||||
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2009 | 2008 | 2007 | ||||||||||
(In thousands) | ||||||||||||
Current income tax expense: | ||||||||||||
Federal | $ | 27,595 | $ | 12,858 | $ | 19,548 | ||||||
State | 14,196 | 9,798 | 12,879 | |||||||||
Total current | 41,791 | 22,656 | 32,427 | |||||||||
Deferred income tax benefit: | ||||||||||||
Federal | 11,884 | (9,397 | ) | (1,335 | ) | |||||||
State | 4,203 | (3,385 | ) | (401 | ) | |||||||
Total deferred | 16,087 | (12,782 | ) | (1,736 | ) | |||||||
Provision for income taxes | $ | 57,878 | $ | 9,874 | $ | 30,691 | ||||||
2009 | 2008 | 2007 | ||||||||||
(In thousands) | ||||||||||||
Federal income taxes due at statutory rate | $ | 64,157 | $ | 24,398 | $ | 42,163 | ||||||
Reductions in income taxes resulting from: | ||||||||||||
Interest on state and municipal securities not taxable for federal income tax purposes | (12,742 | ) | (13,164 | ) | (13,518 | ) | ||||||
State franchise taxes, net of federal income tax benefit | 11,959 | 4,168 | 8,111 | |||||||||
Limited partnerships | (3,233 | ) | (3,100 | ) | (2,300 | ) | ||||||
Dividend received deduction | (32 | ) | (584 | ) | (946 | ) | ||||||
Cash value life insurance | (715 | ) | (783 | ) | (955 | ) | ||||||
Other | (1,516 | ) | (1,061 | ) | (1,864 | ) | ||||||
Provision for income taxes | $ | 57,878 | $ | 9,874 | $ | 30,691 | ||||||
2009 | 2008 | |||||||
(In thousands) | ||||||||
Balance at January 1, | $ | 803 | $ | 792 | ||||
Additions for tax positions taken in the current period | 48 | 103 | ||||||
Reductions for tax positions taken in the current period | — | — | ||||||
Additions for tax positions taken in prior years | 29 | 22 | ||||||
Reductions for tax positions taken in prior years | — | — | ||||||
Decreases related to settlements with taxing authorities | — | — | ||||||
Decreases as a result of a lapse in statue of limitations | (639 | ) | (114 | ) | ||||
Balance at December 31, | $ | 241 | $ | 803 | ||||
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• | 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 also includes U.S. Treasury and federal agency 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 mortgage-backed securities, municipal bonds and collateralized mortgage obligations as well as other real estate owned and impaired loans collateralized by real property where the fair value is generally based upon independent market prices or appraised values of the collateral. |
• | 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. Level 3 includes those impaired loans collateralized by other business assets where the expected cash flow has been used in determining the fair value. |
At December 31, 2009 | ||||||||||||||||
Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||
(In thousands) | ||||||||||||||||
U.S. Treasury securities | $ | 2,987 | $ | 2,987 | $ | — | $ | — | ||||||||
Securities of U.S. Government sponsored entities | 21,041 | 21,041 | — | — | ||||||||||||
Mortgage-backed securities | 146,005 | — | 146,005 | — | ||||||||||||
Obligations of states and political subdivisions | 158,193 | — | 158,193 | — | ||||||||||||
Collateralized mortgage obligations | 41,410 | — | 41,410 | — | ||||||||||||
Asset-backed securities | 8,339 | — | 8,339 | — | ||||||||||||
FHLMC and FNMA stock | 1,573 | 1,573 | — | — | ||||||||||||
Other securities | 4,660 | 2,703 | 1,957 | — | ||||||||||||
Total securities available for sale | $ | 384,208 | $ | 28,304 | $ | 355,904 | $ | — | ||||||||
At December 31, 2008 | ||||||||||||||||
Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||
(In thousands) | ||||||||||||||||
U.S. Treasury securities | $ | 3,082 | $ | 3,082 | $ | — | $ | — | ||||||||
Securities of U.S. Government sponsored entities | 11,077 | 11,077 | — | — | ||||||||||||
Mortgage-backed securities | 41,240 | — | 41,240 | — | ||||||||||||
Obligations of states and political subdivisions | 161,046 | — | 161,046 | — | ||||||||||||
Collateralized mortgage obligations | 59,851 | — | 59,851 | — | ||||||||||||
Asset-backed securities | 6,447 | — | 6,447 | — | ||||||||||||
FHLMC and FNMA stock | 821 | 821 | — | — | ||||||||||||
Other securities | 4,890 | 3,000 | 1,890 | — | ||||||||||||
Total securities available for sale | $ | 288,454 | $ | 17,980 | $ | 270,474 | $ | — | ||||||||
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At December 31, 2009 | ||||||||||||||||||||
Fair Value | Level 1 | Level 2 | Level 3 | Total losses | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Non-covered other real estate owned (1) | $ | 413 | $ | — | $ | 413 | $ | — | $ | (233 | ) | |||||||||
Non-covered impaired loans (2) | 2,447 | — | 2,447 | — | — | |||||||||||||||
Total assets measured at fair value on a nonrecurring basis | $ | 2,860 | $ | — | $ | 2,860 | $ | — | $ | (233 | ) | |||||||||
(1) | Represents the fair value of foreclosed real estate owned that was measured at fair value subsequent to their initial classification as foreclosed assets. | |
(2) | Represents carrying value of loans for which adjustments are predominantly based on the appraised value of the collateral and loans considered impaired under FASB ASC 310-10-35, Subsequent Measurement of Receivables, where a specific reserve has been established. |
2009 | 2008 | |||||||
(In thousands) | ||||||||
Cash and cash equivalents | $ | 361,135 | $ | 138,883 | ||||
Money market assets | 442 | 341 | ||||||
Interest and taxes receivable | 57,667 | 75,022 | ||||||
Noninterest bearing and interest-bearing transaction and savings deposits | 3,068,820 | 2,429,281 | ||||||
Short-term borrowed funds | 128,134 | 457,275 | ||||||
Interest payable | 1,801 | 2,239 |
2009 | 2008 | |||||||||||||||
Book Value | Fair Value | Book Value | Fair Value | |||||||||||||
(In thousands) | ||||||||||||||||
Investment securities available for sale | $ | 384,208 | $ | 384,208 | $ | 288,454 | $ | 288,454 | ||||||||
Investment securities held to maturity | 726,935 | 736,270 | 949,325 | 950,210 |
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2009 | 2008 | |||||||||||||||
Book Value | Fair Value | Book Value | Fair Value | |||||||||||||
(In thousands) | ||||||||||||||||
FHLB advances | $ | 85,470 | $ | 85,601 | $ | — | $ | — | ||||||||
Term repurchase agreements | 99,044 | 100,329 | — | — | ||||||||||||
Senior notes payable | 15,000 | 14,069 | 15,000 | 12,319 | ||||||||||||
Subordinated notes | 11,497 | 9,451 | 11,631 | 7,455 |
2009 | 2008 | |||||||||||||||
Book Value | Fair Value | Book Value | Fair Value | |||||||||||||
(In thousands) | ||||||||||||||||
Loans | $ | 3,015,346 | $ | 3,024,866 | $ | 2,337,956 | $ | 2,373,380 |
2009 | 2008 | |||||||||||||||
Book Value | Fair Value | Book Value | Fair Value | |||||||||||||
(In thousands) | ||||||||||||||||
FDIC receivables | $ | 85,787 | $ | 83,806 | $ | — | $ | — | ||||||||
Time deposits | 991,388 | 992,560 | 665,773 | 667,065 |
(In thousands) | ||||
2010 | $ | 6,756 | ||
2011 | 6,152 | |||
2012 | 4,899 | |||
2013 | 3,904 | |||
2014 | 2,156 | |||
Thereafter | 499 | |||
Total minimum lease payments | $ | 24,366 | ||
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(In thousands) | 2009 | 2008 | 2007 | |||||||||
Service cost | $ | (357 | ) | $ | (317 | ) | $ | (509 | ) | |||
Interest cost | 210 | 235 | 284 | |||||||||
Amortization of unrecognized transition obligation | 61 | 61 | 61 | |||||||||
Net periodic cost | (86 | ) | (21 | ) | (164 | ) | ||||||
Other Changes in Benefit Obligations Recognized in Other Comprehensive Income | ||||||||||||
Amortization of unrecognized transition obligation, net of tax | (36 | ) | (36 | ) | (36 | ) | ||||||
Total recognized in net periodic benefit cost and accumulated other comprehensive income | $ | (122 | ) | $ | (57 | ) | $ | (200 | ) | |||
(In thousands) | 2009 | 2008 | 2007 | |||||||||
Change in benefit obligation | ||||||||||||
Benefit obligation at beginning of year | $ | 3,813 | $ | 4,046 | $ | 4,430 | ||||||
Service cost | (357 | ) | (317 | ) | (509 | ) | ||||||
Interest cost | 210 | 235 | 284 | |||||||||
Benefits paid | (147 | ) | (151 | ) | (159 | ) | ||||||
Benefit obligation at end of year | $ | 3,519 | $ | 3,813 | $ | 4,046 | ||||||
Accumulated post retirement benefit obligation attributable to: | ||||||||||||
Retirees | $ | 2,241 | $ | 2,724 | $ | 2,929 | ||||||
Fully eligible participants | 1,044 | 895 | 899 | |||||||||
Other | 234 | 194 | 218 | |||||||||
Total | $ | 3,519 | $ | 3,813 | $ | 4,046 | ||||||
Fair value of plan assets | $ | — | $ | — | $ | — | ||||||
Accumulated post retirement benefit obligation in excess of plan assets | $ | 3,519 | $ | 3,813 | $ | 4,046 | ||||||
2009 | 2008 | 2007 | ||||||||||
Weighted-average assumptions used to determine benefit obligations as of December 31 | ||||||||||||
Discount rate | 5.50 | % | 5.80 | % | 6.50 | % | ||||||
Weighted-average assumptions used to determine net periodic benefit cost as of December 31 | ||||||||||||
Discount rate | 5.80 | % | 6.50 | % | 6.00 | % |
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One Percentage | One Percentage | |||||||
(in thousands) | Point Increase | Point Decrease | ||||||
Effect on total service and interest cost components | $ | 177 | $ | (149 | ) | |||
Effect on post-retirement benefit obligation | 462 | (382 | ) |
Estimated future benefit payments | ||||
(in thousands) | ||||
2010 | $ | 156 | ||
2011 | 162 | |||
2012 | 166 | |||
2013 | 166 | |||
2014 | 162 | |||
Years 2015-2019 | 665 |
2009 | 2008 | |||||||
(In thousands) | ||||||||
Beginning balance | $ | 1,291 | $ | 1,259 | ||||
Originations | 47 | 111 | ||||||
Payoffs/principal payments | (142 | ) | (79 | ) | ||||
At December 31, | $ | 1,196 | $ | 1,291 | ||||
Percent of total loans outstanding | 0.04 | % | 0.05 | % | ||||
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2007 | ||||||||||||
(in thousands) | Before tax | Tax effect | Net of tax | |||||||||
Securities available for sale: | ||||||||||||
Net unrealized losses arising during the year | $ | (11,054 | ) | $ | 4,648 | $ | (6,406 | ) | ||||
Reclassification of gains included in net income | — | — | — | |||||||||
Net unrealized losses arising during the year | (11,054 | ) | 4,648 | (6,406 | ) | |||||||
Post-retirement benefit obligation | 61 | (25 | ) | 36 | ||||||||
Other comprehensive loss | $ | (10,993 | ) | $ | 4,623 | $ | (6,370 | ) | ||||
2008 | ||||||||||||
Before tax | Tax effect | Net of tax | ||||||||||
Securities available for sale: | ||||||||||||
Net unrealized losses arising during the year | $ | (47,423 | ) | $ | 19,940 | $ | (27,483 | ) | ||||
Reclassification of losses included in net income | 56,955 | (23,948 | ) | 33,007 | ||||||||
Net unrealized gains arising during the year | 9,532 | (4,008 | ) | 5,524 | ||||||||
Post-retirement benefit obligation | 61 | (25 | ) | 36 | ||||||||
Other comprehensive income | $ | 9,593 | $ | (4,033 | ) | $ | 5,560 | |||||
2009 | ||||||||||||
Before tax | Tax effect | Net of tax | ||||||||||
Securities available for sale: | ||||||||||||
Net unrealized gains arising during the year | $ | 4,552 | $ | (1,914 | ) | $ | 2,638 | |||||
Reclassification of gains included in net income | — | — | — | |||||||||
Net unrealized gains arising during the year | 4,552 | (1,914 | ) | 2,638 | ||||||||
Post-retirement benefit obligation | 61 | (25 | ) | 36 | ||||||||
Other comprehensive income | $ | 4,613 | $ | (1,939 | ) | $ | 2,674 | |||||
Post- | Net | Cumulative | ||||||||||
retirement | Unrealized | Other | ||||||||||
Benefit | gains(losses) | Comprehensive | ||||||||||
(in thousands) | Obligation | on securities | Income | |||||||||
Balance, December 31, 2006 | $ | (394 | ) | $ | 2,244 | $ | 1,850 | |||||
Net change | 36 | (6,406 | ) | (6,370 | ) | |||||||
Balance, December 31, 2007 | (358 | ) | (4,162 | ) | (4,520 | ) | ||||||
Net change | 36 | 5,524 | 5,560 | |||||||||
Balance, December 31, 2008 | (322 | ) | 1,362 | 1,040 | ||||||||
Net change | 36 | 2,638 | 2,674 | |||||||||
Balance, December 31, 2009 | $ | (286 | ) | $ | 4,000 | $ | 3,714 | |||||
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(In thousands, except per share data) | 2009 | 2008 | 2007 | |||||||||
Weighted average number of common shares outstanding — basic | 29,105 | 28,892 | 29,753 | |||||||||
Add exercise of options reduced by the number of shares that could have been purchased with the proceeds of such exercise | 248 | 381 | 412 | |||||||||
Weighted average number of common shares outstanding — diluted | 29,353 | 29,273 | 30,165 | |||||||||
Net income applicable to common equity | $ | 121,463 | $ | 59,835 | $ | 89,776 | ||||||
Basic earnings per common share | 4.17 | 2.07 | 3.02 | |||||||||
Diluted earnings per common share | 4.14 | 2.04 | 2.98 |
For the years ended December 31, | 2009 | 2008 | 2007 | |||||||||
(In thousands) | ||||||||||||
Dividends from subsidiaries | $ | 92,785 | $ | 101,270 | $ | 113,448 | ||||||
Interest income | 180 | 263 | 219 | |||||||||
Other income | 6,979 | 5,543 | 8,976 | |||||||||
Total income | 99,944 | 107,076 | 122,643 | |||||||||
Interest on borrowings | 1,749 | 2,271 | 3,230 | |||||||||
Salaries and benefits | 7,182 | 6,487 | 6,785 | |||||||||
Other expense | 2,643 | 2,256 | 2,041 | |||||||||
Total expenses | 11,574 | 11,014 | 12,056 | |||||||||
Income before taxes and equity in undistributed income of subsidiaries | 88,370 | 96,062 | 110,587 | |||||||||
Income tax benefit | 2,279 | 2,074 | 2,187 | |||||||||
Earnings of subsidiaries greater (less) than subsidiary dividends | 34,777 | (38,301 | ) | (22,998 | ) | |||||||
Net income | 125,426 | 59,835 | 89,776 | |||||||||
Other comprehensive income (loss), net of tax | 2,674 | 5,560 | (6,370 | ) | ||||||||
Comprehensive income | $ | 128,100 | $ | 65,395 | $ | 83,406 | ||||||
Balances as of December 31, | 2009 | 2008 | ||||||
Assets | ||||||||
Cash and cash equivalents | $ | 1,200 | $ | 18,101 | ||||
Money market assets and investment securities available for sale | 2,703 | 2,999 | ||||||
Investment in subsidiaries | 521,414 | 390,066 | ||||||
Premises and equipment, net | 11,612 | 11,862 | ||||||
Accounts receivable from subsidiaries | 689 | 1,839 | ||||||
Other assets | 27,134 | 26,035 | ||||||
Total assets | $ | 564,752 | $ | 450,902 | ||||
Liabilities | ||||||||
Debt financing and notes payable | $ | 42,507 | $ | 26,941 | ||||
Other liabilities | 16,797 | 14,109 | ||||||
Total liabilities | 59,304 | 41,050 | ||||||
Shareholders’ equity | 505,448 | 409,852 | ||||||
Total liabilities and shareholders’ equity | $ | 564,752 | $ | 450,902 | ||||
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For the years ended December 31, | 2009 | 2008 | 2007 | |||||||||
(In thousands) | ||||||||||||
Operating Activities | ||||||||||||
Net income | $ | 125,426 | $ | 59,835 | $ | 89,776 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 186 | 204 | 236 | |||||||||
(Decrease) increase in accounts receivable from affiliates | 1,150 | (956 | ) | (135 | ) | |||||||
Increase in other assets | (1,191 | ) | (2,484 | ) | (942 | ) | ||||||
Stock option expense | 1,132 | 1,193 | 1,779 | |||||||||
Excess tax benefits from stock based compensation | (2,188 | ) | (1,130 | ) | (306 | ) | ||||||
Provision for deferred income tax | 3,758 | 2,801 | 207 | |||||||||
(Decrease) increase in other liabilities | 1,765 | (10 | ) | 2,038 | ||||||||
Earnings of subsidiaries (greater) less than subsidiary dividends | (34,777 | ) | 38,301 | 22,998 | ||||||||
Impairment and losses on sale of investment securities | — | 1,246 | — | |||||||||
Net cash provided by operating activities | 95,261 | 99,000 | 115,651 | |||||||||
Investing Activities | ||||||||||||
Investment in subsidiary bank | (93,726 | ) | — | — | ||||||||
Purchases of premises and equipment | (70 | ) | (204 | ) | (489 | ) | ||||||
Net (increase) decrease in short term investments | (1 | ) | (10 | ) | 234 | |||||||
Net cash used in investing activities | (93,797 | ) | (214 | ) | (255 | ) | ||||||
Financing Activities | ||||||||||||
Increase (decrease) in short-term debt | 15,700 | (19,532 | ) | (980 | ) | |||||||
Net reductions in notes payable and long-term borrowings | — | (10,000 | ) | — | ||||||||
Proceeds from issuance of preferred stock and warrants | 83,726 | — | — | |||||||||
Redemption of preferred stock | (83,726 | ) | — | — | ||||||||
Preferred stock dividends | (2,756 | ) | — | — | ||||||||
Exercise of stock options/issuance of shares | 9,610 | 22,830 | 11,908 | |||||||||
Excess tax benefits from stock based compensation | 2,188 | 1,130 | 306 | |||||||||
Retirement of common stock including repurchases | (2,046 | ) | (35,914 | ) | (87,103 | ) | ||||||
Dividends | (41,061 | ) | (40,236 | ) | (40,647 | ) | ||||||
Net cash used in financing activities | (18,365 | ) | (81,722 | ) | (116,516 | ) | ||||||
Net (decrease) increase in cash and cash equivalents | (16,901 | ) | 17,064 | (1,120 | ) | |||||||
Cash and cash equivalents at beginning of year | 18,101 | 1,037 | 2,157 | |||||||||
Cash and cash equivalents at end of year | $ | 1,200 | $ | 18,101 | $ | 1,037 | ||||||
Supplemental disclosure: | ||||||||||||
Unrealized gain (loss) on securities available for sale, net | $ | 2,638 | $ | 5,524 | $ | (6,406 | ) |
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March 31, | June 30, | September 30, | December 31, | |||||||||||||
(In thousands, except per share data and | ||||||||||||||||
price range of common stock) | ||||||||||||||||
2009 | ||||||||||||||||
Interest and fee income (FTE) | $ | 64,192 | $ | 68,063 | $ | 66,093 | $ | 63,250 | ||||||||
Net interest income (FTE) | 59,359 | 62,318 | 61,593 | 58,949 | ||||||||||||
Provision for credit losses | 1,800 | 2,600 | 2,800 | 3,300 | ||||||||||||
Noninterest income | 63,968 | 16,386 | 15,961 | 15,696 | ||||||||||||
Noninterest expense | 34,123 | 38,666 | 35,151 | 32,836 | ||||||||||||
Income before taxes (FTE) | 87,404 | 37,438 | 39,603 | 38,509 | ||||||||||||
Net income | 52,825 | 23,183 | 25,257 | 24,161 | ||||||||||||
Net income applicable to common equity | 52,247 | 22,076 | 23,791 | 23,349 | ||||||||||||
Basic earnings per common share | 1.81 | 0.76 | 0.81 | 0.80 | ||||||||||||
Diluted earnings per common share | 1.80 | 0.75 | 0.81 | 0.79 | ||||||||||||
Dividends paid per common share | 0.36 | 0.35 | 0.35 | 0.35 | ||||||||||||
Price range, common stock | 33.08-51.29 | 44.13-56.79 | 45.42-54.70 | 47.08-56.80 | ||||||||||||
2008 | ||||||||||||||||
Interest and fee income (FTE) | $ | 60,810 | $ | 58,117 | $ | 56,131 | $ | 54,442 | ||||||||
Net interest income (FTE) | 47,982 | 49,731 | 48,693 | 49,850 | ||||||||||||
Provision for credit losses | 600 | 600 | 600 | 900 | ||||||||||||
Noninterest income (loss) | 19,378 | (3,843 | ) | (27,499 | ) | 9,908 | ||||||||||
Noninterest expense | 23,056 | 26,337 | 25,203 | 26,166 | ||||||||||||
Income (loss) before taxes (FTE) | 43,704 | 18,951 | (4,609 | ) | 32,692 | |||||||||||
Net income | 26,778 | 12,202 | 44 | 20,810 | ||||||||||||
Basic earnings per share | 0.93 | 0.42 | 0.00 | 0.72 | ||||||||||||
Diluted earnings per share | 0.92 | 0.42 | 0.00 | 0.71 | ||||||||||||
Dividends paid per share | 0.34 | 0.35 | 0.35 | 0.35 | ||||||||||||
Price range, common stock | 39.00-56.49 | 50.55-61.49 | 35.50-69.00 | 41.17-60.00 | ||||||||||||
2007 | ||||||||||||||||
Interest and fee income (FTE) | $ | 65,025 | $ | 64,875 | $ | 64,708 | $ | 63,295 | ||||||||
Net interest income (FTE) | 46,914 | 46,059 | 45,563 | 46,812 | ||||||||||||
Provision for credit losses | 75 | 75 | 75 | 475 | ||||||||||||
Noninterest income | 15,277 | 14,700 | 14,644 | 14,657 | ||||||||||||
Noninterest expense | 24,664 | 24,706 | 24,853 | 27,206 | ||||||||||||
Income before taxes (FTE) | 37,452 | 35,978 | 35,279 | 33,788 | ||||||||||||
Net income | 23,570 | 22,351 | 22,022 | 21,832 | ||||||||||||
Basic earnings per share | 0.78 | 0.75 | 0.75 | 0.75 | ||||||||||||
Diluted earnings per share | 0.76 | 0.74 | 0.74 | 0.74 | ||||||||||||
Dividends paid per share | 0.34 | 0.34 | 0.34 | 0.34 | ||||||||||||
Price range, common stock | 46.43-51.47 | 44.23-48.61 | 39.77-50.49 | 42.11-53.29 |
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Westamerica Bancorporation:
/s/ KPMG LLP |
February 26, 2010
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ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
ITEM 9A. | CONTROLS AND PROCEDURES |
ITEM 9B. | OTHER INFORMATION |
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ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS OF THE REGISTRANT AND CORPORATE GOVERNANCE |
Held | ||||||
Name of Executive | Position | Since | ||||
David L. Payne | Mr. Payne, born in 1955, is the Chairman of the Board, President and Chief Executive Officer of the Company. Mr. Payne is President and Chief Executive Officer of Gibson Printing and Publishing Company and Gibson Radio and Publishing Company which are newspaper, commercial printing and real estate investment companies headquartered in Vallejo, California. | 1984 | ||||
John “Robert” Thorson | Mr. Thorson, born in 1960, is Senior Vice President and Chief Financial Officer for the Company. Mr. Thorson joined Westamerica Bancorporation in 1989, was Vice President and Manager of Human Resources from 1995 until 2001 and was Senior Vice President and Treasurer from 2002 until 2005. | 2005 | ||||
Jennifer J. Finger | Ms. Finger, born in 1954, is Senior Vice President and Treasurer for the Corporation. Ms. Finger joined Westamerica Bancorporation in 1997, was Senior Vice President and Chief Financial Officer until 2005. | 2005 | ||||
Dennis R. Hansen | Mr. Hansen, born in 1950, is Senior Vice President and Manager of the Operations and Systems Administration of Community Banker Services Corporation. Mr. Hansen joined Westamerica Bancorporation in 1978 and was Senior Vice President and Controller for the Company until 2005. | 2005 | ||||
David L. Robinson | Mr. Robinson, born in 1959, is Senior Vice President and Banking Division Manager of Westamerica Bank. Mr. Robinson joined Westamerica Bancorporation in 1993 and has held several banking positions, most recently, Senior Vice President and Southern Banking Division Manager until 2007. | 2007 | ||||
Russell W. Rizzardi | Mr. Rizzardi, born in 1955, is Senior Vice President and Chief Credit Administrator of Westamerica Bank. Mr. Rizzardi joined Westamerica Bank in 2007. He has been in the banking industry since 1979 and was previously with Wells Fargo Bank and U.S. Bank. | 2008 |
ITEM 11. | EXECUTIVE COMPENSATION |
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ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
Number of securities | ||||||||||||
remaining available for | ||||||||||||
Number of securities | future issuance under | |||||||||||
to be issued upon | Weighted-average | equity compensation | ||||||||||
exercise of outstanding | exercise price of | plans (excluding | ||||||||||
options, warrants | outstanding options, | securities reflected | ||||||||||
and rights | warrants and rights | in column (a)) | ||||||||||
Plan category | (a) | (b) | (c) | |||||||||
Equity compensation plans approved by security holders | 2,563 | $ | 46 | 3,408 | * | |||||||
Equity compensation plans not approved by security holders. | — | N/A | — | |||||||||
Total | 2,563 | $ | 46 | 3,408 | ||||||||
* | The Amended and Restated Stock Option Plan, Article III, provides that the number of shares reserved for Awards under the plan may increase on the first day of each fiscal year by an amount equal to the least of 1) 2% of the shares outstanding as of the last day of the prior fiscal year, 2) 675,000 shares, or 3) such lesser amount as determined by the Board. |
ITEM 13. | CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE |
ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
(a) | 1. | Financial Statements: | ||
See Index to Financial Statements on page 49. The 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 exhibit list required by this item is incorporated by reference to the Exhibit Index filed with this report. |
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WESTAMERICA BANCORPORATION | ||
/s/ John “Robert” Thorson | ||
Senior Vice President | ||
and Chief Financial Officer | ||
(Chief Financial and Accounting Officer) |
Signature | Title | Date | ||
/s/ David L. Payne | Chairman of the Board and Directors President and Chief Executive Officer (Principal Executive Officer) | February 26, 2010 | ||
/s/ John “Robert” Thorson | Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | February 26, 2010 | ||
/s/ Etta Allen | Director | February 26, 2010 | ||
/s/ Louis E. Bartolini | Director | February 26, 2010 | ||
/s/ E. Joseph Bowler | Director | February 26, 2010 | ||
/s/ Arthur C. Latno, Jr. | Director | February 26, 2010 | ||
/s/ Patrick D. Lynch | Director | February 26, 2010 | ||
/s/ Catherine C. MacMillan | Director | February 26, 2010 | ||
/s/ Ronald A. Nelson | Director | February 26, 2010 | ||
/s/ Edward B. Sylvester | Director | February 26, 2010 |
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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) | |
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(c) | Warrant to Purchase Common Stock pursuant to the Letter Agreement between the Company and the United States Department of the Treasury dated February 13, 2009 incorporated by reference to Exhibit 4.2 to the Registrant’s Form 8-K, filed with the Securities and Exchange Commission on February 19, 2009. | |
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(c) | Note Purchase Agreement by and between Westamerica Bancorporation and The Northwestern Mutual Life Insurance Company dated as of October 30, 2003, pursuant to which registrant issued its 5.31% Senior Notes due October 31, 2013 in the principal amount of $15 million and form of 5.31% Senior Note due October 31, 2013 incorporated by reference to Exhibit 4 of Registrant’s Quarterly Report on Form 10-Q for the third quarter ended September 30, 2003, filed with the Securities and Exchange Commission on November 13, 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 11, 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(m) | Letter Agreement between the Company and the United States Department of the Treasury dated February 13, 2009 incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, filed with the Securities and Exchange Commission on February 19, 2009. | |
10(n) | Additional Letter Agreement between the Company and the United States Department of the Treasury dated February 13, 2009 incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K, filed with the Securities and Exchange Commission on February 19, 2009. | |
10(o)* | Form of Waiver pursuant to the Letter Agreement between the Company and the United States Department of the Treasury dated February 13, 2009 incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8-K, filed with the Securities and Exchange Commission on February 19, 2009. | |
10(p)* | Form of Consent pursuant to the Letter Agreement between the Company and the United States Department of the Treasury dated February 13, 2009 incorporated by reference to Exhibit 10.4 to the Registrant’s Form 8-K, filed with the Securities and Exchange Commission on February 19, 2009. | |
10(q) | Resolutions of the Employee Benefits/Compensation Committee of Westamerica Bancorporation dated February 9, 2009 incorporated by reference to Exhibit 10.5 to the Registrant’s Form 8-K, filed with the Securities and Exchange Commission on February 19, 2009. | |
11.1 | Statement re computation of per share earnings incorporated by reference to Note 19 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(a) | Consent of KPMG 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 |
* | Indicates management contract or compensatory plan or arrangement. |
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