Westamerica Bancorporation(US:WABC)2020-05-05 23:16Financial Performance - Net income for the three months ended March 31, 2020, was $16,962 thousand, a decrease of 13.6% from $19,646 thousand in the same period of 2019[17]. - Net income for the three months ended March 31, 2020, was $16,962 thousand, a decrease of 6.9% compared to $19,646 thousand for the same period in 2019[23]. - The company reported net income of $16,962 thousand for the three months ended March 31, 2020, down from $19,646 thousand in the same period of 2019, resulting in basic earnings per share of $0.63, compared to $0.73 in 2019[121]. - Total interest and fee income rose to $39,991 thousand for Q1 2020, compared to $39,483 thousand in Q1 2019, marking an increase of 1.3%[16]. - Total noninterest income remained stable at $11,648 thousand for Q1 2020, slightly up from $11,579 thousand in Q1 2019[16]. - Total noninterest expense decreased to $24,664 thousand in Q1 2020 from $25,183 thousand in Q1 2019, a reduction of 2.1%[16]. - The company declared dividends of $0.41 per share for Q1 2020, up from $0.40 per share in Q1 2019, representing a 2.5% increase[17]. - The company paid dividends of $11,104 thousand during the three months ended March 31, 2020, compared to $10,745 thousand for the same period in 2019[23]. Asset and Liability Management - Total assets increased to $5,628,126 thousand as of March 31, 2020, compared to $5,619,555 thousand at December 31, 2019, reflecting a slight growth of 0.2%[13]. - Total liabilities rose to $4,922,580 thousand as of March 31, 2020, compared to $4,888,138 thousand at December 31, 2019, indicating increased borrowing or deposit activity[14]. - Total shareholders' equity decreased to $705,546 thousand as of March 31, 2020, down from $731,417 thousand at December 31, 2019, a decline of 3.5%[14]. - Cash and due from banks at the end of the period was $304,628 thousand, down from $421,788 thousand at the end of the previous year[23]. - The company reported a net change in deposits of $(13,195) thousand for the three months ended March 31, 2020, compared to $(74,255) thousand for the same period in 2019[23]. - The company reported a credit loss provision of $4,300 thousand for the three months ended March 31, 2020, which was not present in the same period of the previous year[23]. - The company experienced a net change in short-term borrowings of $21,736 thousand, indicating an increase in short-term financing[23]. Credit Risk and Allowance for Losses - Provision for credit losses was $4,300 thousand for Q1 2020, compared to $0 in Q1 2019, indicating a proactive approach to potential credit risks[16]. - The allowance for credit losses on loans increased to $24,804 thousand as of March 31, 2020, compared to $19,484 thousand at December 31, 2019, indicating a rise of 27.5%[13]. - The total allowance for credit losses (loans) at the end of the reporting period was $24,804 thousand, with a significant increase in the allowance for consumer installment and other loans due to expected credit losses associated with forecasted unemployment[68]. - The company recognized an allowance for credit losses of $16 thousand for debt securities held to maturity as of March 31, 2020, following the adoption of ASU 2016-13[64]. - The company maintains a separate allowance for credit losses from off-balance-sheet credit exposures, which is included within other liabilities[48]. - The allowance for credit losses is maintained at a level considered adequate based on historical loss rates adjusted for current and expected conditions[45]. - The company has not recorded any allowance for credit loss during the quarter ended March 31, 2020[55]. Loan Portfolio and Performance - The company reported a total of $1,121,243 thousand in outstanding loans as of March 31, 2020, a slight decrease from $1,126,664 thousand as of December 31, 2019[68]. - The total loans by delinquency status amounted to $1,121,243,000, with $1,111,021,000 current and accruing[70]. - The company reported a provision for loan losses of $125,000 for the three months ended March 31, 2020[69]. - Total impaired loans amounted to $17,071 thousand with recognized interest income of $317 thousand for the three months ended March 31, 2019[72]. - The company maintained a Loan Review Department that performs continuous evaluations of loans throughout the year[69]. - The risk category of commercial loans showed a total of $213,241 thousand classified as "Pass" loans, representing a significant portion of the loan portfolio[75]. - The company reported no defaults on troubled debt restructured loans within 12 months of modification for both March 31, 2020, and March 31, 2019[73]. Investment Securities - The total fair value of debt securities available for sale was $3,210,689 thousand as of March 31, 2020, an increase from $3,078,846 thousand at December 31, 2019[107][109]. - The total interest income from investment securities for the three months ended March 31, 2020, was $25,326 thousand, compared to $22,948 thousand for the same period in 2019, reflecting an increase of approximately 10.0%[66]. - The total fair value of debt securities held to maturity was $695,860, with an amortized cost of $681,837, leading to unrealized losses of $155[57]. - The company holds $1,120,062 in corporate securities, with unrealized losses of $55,659, indicating significant exposure to market fluctuations[59]. - The company does not intend to sell any debt securities available for sale and believes it is unlikely to be required to sell them before recovering their amortized cost basis[59]. - The company reported gross unrealized losses on debt securities available for sale amounting to $55,897, primarily due to market conditions and changes in risk-free interest rates[59]. - The fair value of debt securities available for sale with maturities of 1 year or less was $250,551, while those over 1 to 5 years had a fair value of $1,074,112[58]. Economic and Market Conditions - The Company expects a decline in net interest income and non-interest income due to the economic impact of COVID-19, with an uncertain increase in credit-related losses[129]. - The Federal Reserve reduced the federal funds rate to a target range of 0 to 0.25 percent on March 15, 2020, which may negatively impact the Company's net interest income[126]. - The decline in oil prices in the first quarter of 2020 could negatively affect the financial results of corporate bond issuers in the industrial and energy sectors[132].