Westamerica Bancorporation(US:WABC)2023-11-08 18:44Financial Performance - Net income for the three months ended September 30, 2023 was $41,601 thousand, up from $34,760 thousand in the same period of 2022, reflecting an increase of approximately 19.1%[18]. - Net income for the nine months ended September 30, 2023, was $122.3 million, an increase of 47.9% compared to $82.69 million for the same period in 2022[27]. - Basic earnings per common share for the three months ended September 30, 2023, were $1.56, compared to $1.29 for the same period in 2022, reflecting a year-over-year increase of 21.0%[127]. - Diluted earnings per common share for the nine months ended September 30, 2023, were $4.58, up from $3.07 in the same period of 2022, marking an increase of 49.0%[127]. - Total revenue for the company decreased to $885,850,000 in September 2023 from $958,488,000 in December 2022, representing a decline of approximately 7.6%[71]. Asset and Liability Changes - Total assets decreased from $6,950,317 thousand at December 31, 2022 to $6,567,288 thousand at September 30, 2023, a decline of approximately 5.5%[16]. - Total liabilities decreased from $6,348,207 thousand at December 31, 2022 to $5,918,865 thousand at September 30, 2023, a decline of about 6.8%[16]. - The company's total shareholders' equity increased from $602,110 thousand at December 31, 2022 to $648,423 thousand at September 30, 2023, an increase of approximately 7.7%[16]. - Total deposits decreased from $6,225,290 thousand at December 31, 2022 to $5,699,013 thousand at September 30, 2023, a reduction of about 8.4%[16]. Income and Expense Analysis - Net interest and loan fee income increased to $71,715 thousand for the three months ended September 30, 2023, compared to $60,315 thousand for the same period in 2022, representing a growth of about 18.9%[18]. - Noninterest income for the nine months ended September 30, 2023 was $32,530 thousand, down from $34,658 thousand in the same period of 2022, a decrease of approximately 6.1%[18]. - Total noninterest expense increased to $25,650,000 in Q3 2023, up from $24,767,000 in Q3 2022, representing a rise of 3.6%[18]. - The provision for credit losses was $400 thousand for the three months ended September 30, 2023, compared to a reversal of provision of $0 for the same period in 2022[18]. Credit Quality and Loan Portfolio - The allowance for credit losses at the end of September 2023 was $17,744,000, down from $20,284,000 at the beginning of the period, indicating a reduction of about 12.5%[72]. - The company reported charge-offs of $1,827,000 for the three months ended September 30, 2023, compared to $2,089,000 for the same period in 2022, reflecting a decrease of approximately 12.5%[71]. - The total loans by delinquency status indicate $877.90 million in current and accruing loans, with $5.46 million past due and $1.26 million in nonaccrual status[74]. - The company reported no allowance for credit losses allocated to loans on nonaccrual status as of September 30, 2023[77]. - The company maintains a Loan Review Department that conducts independent evaluations of loans, ensuring compliance with regulatory standards[73]. Investment Securities and Market Conditions - The total amortized cost of debt securities available for sale is $4,311,861 thousand, with a fair value of $3,906,233 thousand, resulting in unrealized losses of $406,959 thousand[54]. - The total amortized cost of debt securities held to maturity is $888,857 thousand, with a fair value of $818,395 thousand, leading to unrealized losses of $70,475 thousand[54]. - The company reported gross unrealized losses on debt securities available for sale amounting to $394,107 thousand, with 450 investment positions affected[57]. - The unrealized losses on debt securities were primarily attributed to increasing risk-free interest rates, which have negatively impacted bond values[59]. - The company continues to monitor interest rate changes, risk premium spreads, and credit ratings to manage its investment portfolio effectively[59]. Dividends and Shareholder Returns - The company paid dividends of $0.44 per share for the three months ended September 30, 2023, compared to $0.42 per share in the same period of 2022, an increase of approximately 4.8%[18]. - Total dividends paid for the nine months ended September 30, 2023, amounted to $34.22 million, compared to $33.88 million in the same period of 2022[27]. Regulatory and Compliance Matters - The Company adopted FASB ASU 2022-02 effective January 1, 2023, which eliminates recognition and measurement guidance for troubled debt restructurings and requires enhanced disclosures[49]. - The company does not expect any material impact on its consolidated financial statements from the recently issued FASB ASU 2020-04 regarding reference rate reform[50]. - The company evaluated debt securities for credit losses on a quarterly basis, indicating a proactive approach to risk management[111].