Westamerica Bancorporation(WABC) - 2020 Q2 - Quarterly Report

Financial Performance - Net income for the three months ended June 30, 2020, was $19,562 thousand, slightly down from $19,625 thousand in the same period of 2019, a decrease of 0.3%[16] - Net income for the six months ended June 30, 2020, was $36,524,000, compared to $39,271,000 for the same period in 2019, representing a decrease of approximately 7%[23] - Average diluted earnings per share for the six months ended June 30, 2020, was $1.35, down from $1.46 in 2019, a decrease of 7.5%[16] - Basic earnings per common share for the three months ended June 30, 2020, was $0.72, a decrease from $0.73 in the same period of 2019[128] - Total comprehensive income for the three months ended June 30, 2020, was $113,123,000, significantly up from $43,998,000 in 2019, reflecting an increase of 156.4%[18] Assets and Liabilities - Total assets increased to $6,463,889 thousand as of June 30, 2020, up from $5,619,555 thousand at December 31, 2019, representing a growth of 15%[14] - Total liabilities increased to $5,655,813 thousand as of June 30, 2020, from $4,888,138 thousand at December 31, 2019, an increase of 15.6%[14] - Shareholders' equity rose to $808,076 thousand as of June 30, 2020, compared to $731,417 thousand at December 31, 2019, reflecting an increase of 10.5%[14] Deposits - Total deposits rose to $5,468,412 thousand as of June 30, 2020, compared to $4,812,621 thousand at December 31, 2019, marking an increase of 13.6%[14] - Noninterest-bearing deposits rose to $2,702,885 thousand at June 30, 2020, compared to $2,240,112 thousand at December 31, 2019, reflecting an increase of about 20.7%[101] - Interest-bearing transaction deposits grew to $997,593 thousand at June 30, 2020, from $931,888 thousand at December 31, 2019, marking a rise of approximately 7.1%[101] Income and Expenses - Net interest and loan fee income after provision for credit losses was $76,353 thousand for the six months ended June 30, 2020, compared to $78,128 thousand for the same period in 2019, a decrease of 2.3%[16] - Noninterest income decreased to $21,202 thousand for the six months ended June 30, 2020, down from $23,867 thousand in 2019, a decline of 11%[16] - Noninterest expense totaled $49,418 thousand for the six months ended June 30, 2020, compared to $50,744 thousand in the same period of 2019, showing a reduction of approximately 2.6%[16] Credit Losses - The provision for credit losses was $4,300 thousand for the six months ended June 30, 2020, compared to no provision in the same period of 2019[16] - The allowance for credit losses increased to $24,529,000 as of June 30, 2020, reflecting the impact of expected credit losses due to the COVID-19 pandemic[74] - The significant increase in the allowance for credit losses for consumer installment and other loans was attributed to forecasted unemployment due to the pandemic[74] Cash Flow - Total cash provided by operating activities for the six months ended June 30, 2020, was $65,923,000, an increase from $39,541,000 in 2019, indicating a growth of approximately 67%[24] - The company reported a net cash used in investing activities of $(620,310,000) for the six months ended June 30, 2020, compared to $105,968,000 provided in 2019[24] Loans - The total outstanding loans as of June 30, 2020, amounted to $1,316,359,000, up from $1,126,664,000 at the end of 2019, indicating a growth of approximately 16.8%[74] - The company originated $240,815,000 in Paycheck Protection Program (PPP) loans, which are 100% guaranteed by the Small Business Administration[75] - The credit risk profile showed that as of June 30, 2020, the total loans classified as "Pass" amounted to $1,292,824 thousand, while "Substandard" loans totaled $22,725 thousand[78] Securities - As of June 30, 2020, the total debt securities available for sale amounted to $3,708,370 thousand, with gross unrealized gains of $152,626 thousand and unrealized losses of $1,460 thousand[60] - The total amortized cost of debt securities held to maturity was $638,297 thousand, with a fair value of $656,390 thousand as of June 30, 2020[61] - The company had no provision for credit loss on debt securities held to maturity during the quarter ended June 30, 2020[60] Accounting Standards - The Company adopted the new accounting standard ASU 2016-13 on January 1, 2020, which changed the credit loss estimation model from incurred loss to current expected credit loss (CECL) model[32] - The company is currently evaluating the potential effects of FASB ASU 2019-12 on its consolidated financial statements, which simplifies accounting for income taxes[55] - The company early adopted provisions of FASB ASU 2018-13 related to Fair Value Measurements, effective January 1, 2020, without affecting financial results[54] Dividends - The company declared dividends of $0.41 per share for both the three months ended June 30, 2020, and 2019, maintaining the same level[16] - The company paid dividends of $22,220,000 for the six months ended June 30, 2020, compared to $21,786,000 in 2019, reflecting a slight increase in shareholder returns[24]