SAN RAFAEL, Calif., Oct. 19, 2023 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (NASDAQ:WABC), parent company of Westamerica Bank, generated net income for the third quarter 2023 of $41.6 million and diluted earnings per common share ("EPS") of $1.56, which represent the highest third quarter results in Company history. Third quarter 2023 results include a life insurance gain which increased EPS $0.01. Third quarter 2023 results compare to second quarter 2023 net income of $40.2 million and EPS of $1.51.

"Westamerica's third quarter 2023 results benefited from the Company's valuable low-cost deposit base, of which 48 percent was represented by non-interest bearing checking accounts during the third quarter 2023. The annualized cost of funding our loan and bond portfolios was 0.07 percent in the third quarter 2023. The Company's customer deposits and shareholders' equity fully funded our interest earning assets during the third quarter 2023; the Company did not borrow from the Federal Reserve Bank or correspondent banks. Operating expenses remained well controlled. Nonperforming assets were a stable $1.2 million at September 30, 2023," said Chairman, President and CEO David Payne. "Third quarter 2023 results generated an annualized 18.3 percent return on average common equity. Shareholders were paid a $0.44 per common share dividend during the third quarter 2023," concluded Payne.

Net interest income on a fully-taxable equivalent (FTE) basis was $72.1 million for the third quarter 2023, compared to $70.3 million for the second quarter 2023. The annualized yield earned on loans, bonds and cash for the third quarter 2023 was 4.50 percent, up from 4.38 percent for the second quarter 2023. The annualized cost of funding the loan and bond portfolios was 0.07 percent for the third quarter 2023, compared to 0.04 percent for the second quarter 2023. Variable rate assets at September 30, 2023 included $1.5 billion in collateralized loan obligations on which interest rates reset quarterly.

The Company provided $400 thousand for credit losses on loans in the third quarter 2023. The Allowance for Credit Losses on Loans was $17.7 million at September 30, 2023.

Noninterest income for the third quarter 2023 totaled $11.3 million compared to $10.7 million for the second quarter 2023. Third quarter 2023 results include a $278 thousand life insurance gain.

Noninterest expenses for the third quarter 2023 were $25.7 million compared to $25.8 million for the second quarter 2023.

Westamerica Bancorporation's wholly owned subsidiary Westamerica Bank, operates commercial banking and trust offices throughout Northern and Central California.

Westamerica Bancorporation Web Address: www.westamerica.com

For additional information contact:
	Westamerica Bancorporation
	1108 Fifth Avenue, San Rafael, CA 94901
	Robert A. Thorson – SVP & Chief Financial Officer
	707-863-6840
	investments@westamerica.com

FORWARD-LOOKING INFORMATION:

The following appears in accordance with the Private Securities Litigation Reform Act of 1995:

This press release may contain forward-looking statements about the Company, including descriptions of plans or objectives of its management for future operations, products or services, and forecasts of its revenues, earnings or other measures of economic performance. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may."

Forward-looking statements, by their nature, are subject to risks and uncertainties. A number of factors — many of which are beyond the Company's control — could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. The Company's most recent reports filed with the Securities and Exchange Commission, including the annual report for the year ended December 31, 2022 filed on Form 10-K and quarterly report for the quarter ended June 30, 2023 filed on Form 10-Q, describe some of these factors, including certain credit, interest rate, operational, liquidity and market risks associated with the Company's business and operations. Other factors described in these reports include changes in business and economic conditions, competition, fiscal and monetary policies, disintermediation, cyber security risks, legislation including the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Sarbanes-Oxley Act of 2002 and the Gramm-Leach-Bliley Act of 1999, and mergers and acquisitions.

Forward-looking statements speak only as of the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date forward looking statements are made.

Public Information October 19, 2023

WESTAMERICA BANCORPORATION

FINANCIAL HIGHLIGHTS

September 30, 2023

1. Net Income Summary.

(in thousands except per-share amounts)

Q3'2023

Q3'2022

Change

Q2'2023

Net Interest and Fee Income (FTE)

72,092

60,780

18.6

70,281

Provision for Credit Losses

400

n/m

Noninterest Income

11,281

11,818

-4.5

10,700

Noninterest Expense

25,650

24,767

3.6

25,839

Income Before Taxes (FTE)

57,323

47,831

19.8

55,142

Income Tax Provision (FTE)

15,722

13,071

20.3

14,894

Net Income

41,601

34,760

19.7

40,248

Average Common Shares Outstanding

26,648

26,906

-1.0

26,648

Diluted Average Common Shares Outstanding

26,650

26,916

-1.0

26,648

Operating Ratios:

Basic Earnings Per Common Share

1.56

1.29

20.9

1.51

Diluted Earnings Per Common Share

1.56

1.29

20.9

1.51

Return On Assets (a)

2.41

1.85

2.35

Return On Common Equity (a)

18.3

17.1

18.4

Net Interest Margin (FTE) (a)

4.43

3.44

4.34

Efficiency Ratio (FTE)

30.8

34.1

31.9

Dividends Paid Per Common Share

0.44

0.42

4.8

0.42

Common Dividend Payout Ratio

9/30'23YTD

9/30'22YTD

Change

Net Interest and Fee Income (FTE)

211,935

152,620

38.9

Reversal of Provision for Credit Losses (2)

(1,150

)

n/m

Noninterest Income (1)

32,530

34,658

-6.1

Noninterest Expense

77,699

74,271

4.6

Income Before Taxes (FTE)

167,916

113,007

48.6

Income Tax Provision (FTE)

45,616

30,317

50.5

Net Income

122,300

82,690

47.9

Average Common Shares Outstanding

26,718

26,889

-0.6

Diluted Average Common Shares Outstanding

26,721

26,901

-0.7

Operating Ratios:

Basic Earnings Per Common Share

4.58

3.08

48.7

Diluted Earnings Per Common Share

4.58

3.07

49.2

Return On Assets (a)

2.36

1.49

Return On Common Equity (a)

18.6

14.0

Net Interest Margin (FTE) (a)

4.32

2.90

Efficiency Ratio (FTE)

31.8

39.7

Dividends Paid Per Common Share

1.28

1.26

1.6

Common Dividend Payout Ratio

2. Net Interest Income.

(dollars in thousands)

Q3'2023

Q3'2022

Change

Q2'2023

Interest and Fee Income (FTE)

73,225

61,267

19.5

70,888

Interest Expense

1,133

487

132.6

607

Net Interest and Fee Income (FTE)

72,092

60,780

18.6

70,281

Average Earning Assets

6,438,411

7,041,313

-8.6

6,457,270

Average Interest- Bearing Liabilities

3,118,632

3,520,083

-11.4

3,144,264

Yield on Earning Assets (FTE) (a)

4.50

3.47

4.38

Cost of Funds (a)

0.07

0.03

0.04

Net Interest Margin (FTE) (a)

4.43

3.44

4.34

Interest Expense/

Interest-Bearing Liabilities (a)

0.14

0.05

0.08

Net Interest Spread (FTE) (a)

4.36

3.42

4.30

9/30'23YTD

9/30'22YTD

Change

Interest and Fee Income (FTE)

214,146

154,070

39.0

Interest Expense

2,211

1,450

52.5

Net Interest and Fee Income (FTE)

211,935

152,620

38.9

Average Earning Assets

6,519,448

7,013,627

-7.0

Average Interest- Bearing Liabilities

3,182,734

3,538,361

-10.1

Yield on Earning Assets (FTE) (a)

4.36

2.93

Cost of Funds (a)

0.04

0.03

Net Interest Margin (FTE) (a)

4.32

2.90

Interest Expense/

Interest-Bearing Liabilities (a)

0.09

0.05

Net Interest Spread (FTE) (a)

4.27

2.88

3. Loans & Other Earning Assets.

(average volume, dollars in thousands)

Q3'2023

Q3'2022

Change

Q2'2023

Total Assets

6,847,691

7,472,304

-8.4

6,865,591

Total Earning Assets

6,438,411

7,041,313

-8.6

6,457,270

Total Loans

903,854

989,033

-8.6

926,795

Commercial Loans

151,431

190,325

-20.4

157,975

Commercial Real Estate Loans

493,072

494,717

-0.3

491,902

Consumer Loans

259,351

303,991

-14.7

276,918

Total Investment Securities

5,247,118

5,552,588

-5.5

5,365,377

Debt Securities Available for Sale

4,353,794

4,845,055

-10.1

4,460,339

Debt Securities Held to Maturity

893,324

707,533

26.3

905,038

Total Interest-Bearing Cash

287,439

499,692

-42.5

165,098

Loans/Deposits

15.8

15.2

16.0

9/30'23YTD

9/30'22YTD

Change

Total Assets

6,940,897

7,433,140

-6.6

Total Earning Assets

6,519,448

7,013,627

-7.0

Total Loans

925,351

1,009,314

-8.3

Commercial Loans

158,204

200,206

-21.0

Commercial Real Estate Loans

492,702

508,812

-3.2

Consumer Loans

274,445

300,296

-8.6

Total Investment Securities

5,385,986

5,172,003

4.1

Debt Securities Available for Sale

4,482,376

4,741,400

-5.5

Debt Securities Held to Maturity

903,610

430,603

109.8

Total Interest-Bearing Cash

208,111

832,310

-75.0

Loans/Deposits

15.8

15.7

4. Deposits, Other Interest-Bearing Liabilities & Equity.

(average volume, dollars in thousands)

Q3'2023

Q3'2022

Change

Q2'2023

Total Deposits

5,722,817

6,495,051

-11.9

5,797,504

Noninterest Demand

2,721,358

3,058,662

-11.0

2,751,319

Interest-Bearing Transaction

1,149,483

1,308,310

-12.1

1,159,653

Savings

1,741,994

1,989,275

-12.4

1,763,410

Time greater than $100K

43,073

62,014

-30.5

53,901

Time less than $100K

66,909

76,790

-12.9

69,221

Total Short-Term Borrowings

117,173

83,694

40.0

98,079

Shareholders' Equity

902,300

807,428

11.7

877,964

Demand Deposits/ Total Deposits

47.6

47.1

47.5

Transaction & Savings Deposits / Total Deposits

98.1

97.9

9/30'23YTD

9/30'22YTD

Change

Total Deposits

5,859,506

6,437,943

-9.0

Noninterest Demand

2,774,282

3,020,892

-8.2

Interest-Bearing Transaction

1,180,551

1,290,850

-8.5

Savings

1,783,891

1,984,931

-10.1

Time greater than $100K

51,481

63,318

-18.7

Time less than $100K

69,301

77,952

-11.1

Total Short-Term Borrowings

97,510

121,310

-19.6

Shareholders' Equity

879,740

790,691

11.3

Demand Deposits/ Total Deposits

47.3

46.9

Transaction & Savings Deposits / Total Deposits

97.9

97.8

5. Interest Yields Earned & Rates Paid.

(dollars in thousands)

Q3'2023

Average

Income/

Yield (a) /

Volume

Expense

Rate (a)

Interest & Fee Income Earned:

Total Earning Assets (FTE)

6,438,411

73,225

4.50

Total Loans (FTE)

903,854

12,016

5.27

Commercial Loans (FTE)

151,431

2,743

7.19

Commercial Real Estate Loans

493,072

5,914

4.76

Consumer Loans

259,351

3,359

5.14

Total Investments (FTE)

5,247,118

57,280

4.32

Total Debt Securities Available for Sale (FTE)

4,353,794

48,285

4.38

Corporate Securities

2,148,308

14,851

2.77

Collateralized Loan Obligations

1,530,992

28,023

7.16

Agency Mortgage Backed Securities

276,755

1,676

2.42

Securities of U.S. Government sponsored

entities

307,106

2,777

3.62

Obligations of States and Political

Subdivisions (FTE)

76,406

573

3.00

Other Debt Securities Available for Sale (FTE)

14,227

385

10.82

Total Debt Securities Held to Maturity (FTE)

893,324

8,995

4.03

Agency Mortgage Backed Securities

88,147

475

2.16

Corporate Securities

725,862

7,815

4.31

Obligations of States and Political

Subdivisions (FTE)

79,315

705

3.55

Total Interest-Bearing Cash

287,439

3,929

5.35

Interest Expense Paid:

Total Earning Assets

6,438,411

1,133

0.07

Total Interest-Bearing Liabilities

3,118,632

1,133

0.14

Total Interest-Bearing Deposits

3,001,459

1,095

0.14

Interest-Bearing Transaction

1,149,483

131

0.05

Savings

1,741,994

886

0.20

Time less than $100K

66,909

0.31

Time greater than $100K

43,073

0.24

Total Short-Term Borrowings

117,173

0.13

Net Interest Income and

Margin (FTE)

72,092

4.43

Q3'2022

Average

Income/

Yield (a) /

Volume

Expense

Rate (a)

Interest & Fee Income Earned:

Total Earning Assets (FTE)

7,041,313

61,267

3.47

Total Loans (FTE)

989,033

12,298

4.93

Commercial Loans (FTE)

190,325

2,843

5.93

Commercial Real Estate Loans

494,717

5,821

4.67

Consumer Loans

303,991

3,634

4.74

Total Investments (FTE)

5,552,588

46,227

3.33

Total Debt Securities Available for Sale (FTE)

4,845,055

39,388

3.22

Corporate Securities

2,518,870

17,404

2.76

Collateralized Loan Obligations

1,600,611

16,355

4.00

Agency Mortgage Backed Securities

336,392

2,001

2.38

Securities of U.S. Government sponsored

entities

288,538

2,604

3.61

Obligations of States and Political

Subdivisions (FTE)

86,357

660

3.06

Other Debt Securities Available for Sale (FTE)

14,287

364

10.18

Total Debt Securities Held to Maturity (FTE)

707,533

6,839

3.87

Agency Mortgage Backed Securities

117,606

586

1.99

Corporate Securities

477,881

5,230

4.38

Obligations of States and Political

Subdivisions (FTE)

112,046

1,023

3.65

Total Interest-Bearing Cash

499,692

2,742

2.15

Interest Expense Paid:

Total Earning Assets

7,041,313

487

0.03

Total Interest-Bearing Liabilities

3,520,083

487

0.05

Total Interest-Bearing Deposits

3,436,389

470

0.05

Interest-Bearing Transaction

1,308,310

0.03

Savings

1,989,275

290

0.06

Time less than $100K

76,790

0.24

Time greater than $100K

62,014

0.25

Total Short-Term Borrowings

83,694

0.08

Net Interest Income and

Margin (FTE)

60,780

3.44

6. Noninterest Income.

(dollars in thousands except per-share amounts)

Q3'2023

Q3'2022

Change

Q2'2023

Service Charges on Deposit Accounts

3,705

3,737

-0.9

3,459

Merchant Processing Services

2,911

2,925

-0.5

2,869

Debit Card Fees

1,717

1,594

7.7

1,759

Trust Fees

783

810

-3.3

810

ATM Processing Fees

640

594

7.7

702

Other Service Fees

463

0.1

458

Financial Services Commissions

-1.3

103

Life Insurance Gains

278

923

n/m

Securities Losses

n/m

(125

)

Other Noninterest Income

706

693

1.9

665

Total Noninterest Income

11,281

11,818

-4.5

10,700

Operating Ratios:

Total Revenue (FTE)

83,373

72,598

14.8

80,981

Noninterest Income/Revenue (FTE)

13.5

16.3

13.2

Service Charges/Avg. Deposits (a)

0.26

0.23

0.24

Total Revenue (FTE) Per Avg.

Common Share (a)

12.41

10.70

15.9

12.19

9/30'23YTD

9/30'22YTD

Change

Service Charges on Deposit Accounts

10,629

11,006

-3.4

Merchant Processing Services

8,417

8,922

-5.7

Debit Card Fees (1)

5,118

6,175

-17.1

Trust Fees

2,358

2,462

-4.2

ATM Processing Fees

1,996

1,514

31.8

Other Service Fees

1,320

1,392

-5.2

Financial Services Commissions

270

314

-14.0

Life Insurance Gains

278

923

n/m

Securities Losses

(125

)

n/m

Other Noninterest Income

2,269

1,950

16.4

Total Noninterest Income

32,530

34,658

-6.1

Operating Ratios:

Total Revenue (FTE)

244,465

187,278

30.5

Noninterest Income/Revenue (FTE)

13.3

18.5

Service Charges/Avg. Deposits (a)

0.24

0.23

Total Revenue (FTE) Per Avg.

Common Share (a)

12.23

9.31

31.4

7. Noninterest Expense.

(dollars in thousands)

Q3'2023

Q3'2022

Change

Q2'2023

Salaries & Benefits

11,820

11,311

4.5

11,828

Occupancy and Equipment

5,065

5,064

0.0

5,012

Outsourced Data Processing

2,473

2,434

1.6

2,488

Limited Partnership Operating Losses

1,440

1,431

0.6

1,440

Professional Fees

401

582

-31.1

485

Courier Service

745

671

11.0

611

Other Noninterest Expense

3,706

3,274

13.2

3,975

Total Noninterest Expense

25,650

24,767

3.6

25,839

Operating Ratios:

Noninterest Expense/ Avg. Earning Assets (a)

1.58

1.40

1.60

Noninterest Expense/Revenues (FTE)

30.8

34.1

31.9

9/30'23YTD

9/30'22YTD

Change

Salaries & Benefits

35,715

34,643

3.1

Occupancy and Equipment

15,562

14,666

6.1

Outsourced Data Processing

7,405

7,294

1.5

Limited Partnership Operating Losses

4,314

4,293

0.5

Professional Fees

1,362

2,054

-33.7

Courier Service

1,971

1,914

3.0

Other Noninterest Expense

11,370

9,407

20.9

Total Noninterest Expense

77,699

74,271

4.6

Operating Ratios:

Noninterest Expense/ Avg. Earning Assets (a)

1.59

1.42

Noninterest Expense/Revenues (FTE)

31.8

39.7

8. Allowance for Credit Losses.

(dollars in thousands)

Q3'2023

Q3'2022

Change

Q2'2023

Average Total Loans

903,854

989,033

-8.6

926,795

Beginning of Period Allowance for

Credit Losses on Loans (ACLL)

18,480

22,313

-17.2

19,509

Provision for Credit Losses

400

n/m

Net ACLL Losses

(1,136

)

(1,095

)

3.7

(1,029

)

End of Period ACLL

17,744

21,218

-16.4

18,480

Gross ACLL Recoveries / Gross ACLL Losses

Net ACLL Losses /

Avg. Total Loans (a)

0.50

0.44

0.45

9/30'23YTD

9/30'22YTD

Change

Average Total Loans

925,351

1,009,314

-8.3

Beginning of Period ACLL

20,284

23,514

-13.7

Reversal of Provision for Credit Losses (2)

(1,150

)

n/m

Net ACLL Losses

(1,390

)

(2,296

)

-39.5

End of Period ACLL

17,744

21,218

-16.4

Gross ACLL Recoveries / Gross ACLL Losses

Net ACLL Losses / Avg. Total Loans (a)

0.20

0.30

(dollars in thousands)

9/30/23

9/30/22

Change

6/30/23

Allowance for Credit Losses on Loans

17,744

21,218

-16.4

18,480

Allowance for Credit Losses on

Held to Maturity Securities

-85.5

Total Allowance for Credit Losses

17,745

21,225

-16.4

18,481

Allowance for Unfunded

Credit Commitments

201

0.0

201

9. Credit Quality.

(dollars in thousands)

9/30/23

9/30/22

Change

6/30/23

Nonperforming Loans:

Nonperforming Nonaccrual Loans

205

131

56.5

192

Performing Nonaccrual Loans

-93.9

Total Nonaccrual Loans

209

197

6.1

197

90+ Days Past Due Accruing Loans

1,029

769

33.8

656

Total Nonperforming Loans

1,238

966

28.2

853

Total Loans Outstanding

885,850

979,033

-9.5

919,583

Total Assets

6,567,288

7,177,025

-8.5

6,582,740

Loans:

Allowance for Credit Losses on Loans

17,744

21,218

-16.4

18,480

Allowance for Credit Losses on Loans /

Loans

2.00

2.17

2.01

Nonperforming Loans/Total Loans

0.14

0.10

0.09

10. Liquidity.

At September 30, 2023, the Company had $420,550 thousand in cash balances. During the twelve months ending September 30, 2024, the Company expects to receive $257,000 thousand in principal payments from its debt securities. If additional operational liquidity is required, the Company can pledge debt securities as collateral for borrowing purposes; at September 30, 2023, the Company's debt securities which qualify as collateral for borrowing totaled $3,810,723 thousand. In the ordinary course of business, the Company pledges debt securities as collateral for certain depository customers; at September 30, 2023, the Company had pledged $680,735 thousand in debt securities for depository customers. In the ordinary course of business, the Company pledges debt securities as collateral for borrowing from the Federal Reserve Bank; at September 30, 2023, the Company had pledged $964,139 thousand in debt securities at the Federal Reserve Bank. During the nine months ended September 30, 2023, the Company's average borrowings from the Federal Reserve Bank and other correspondent banks were $-0- thousand, and at September 30, 2023, the Company's borrowings from the Federal Reserve Bank and other correspondent banks were $-0- thousand. At September 30, 2023, the Company's estimated unpledged collateral qualifying debt securities totaled $1,930,927 thousand. Debt securities eligible as collateral are shown at market value unless otherwise noted.

(in thousands)

9/30/23

Debt Securities Eligible as Collateral:

Corporate Securities

2,480,972

Collateralized Loan Obligations rated AAA

540,315

Obligations of States and Political Subdivisions

145,246

Agency Mortgage Backed Securities

317,357

Securities of U.S. Government Sponsored Entities (Par Value)

326,833

Total Debt Securities Eligible as Collateral

3,810,723

Debt Securities Pledged as Collateral:

Deposits by Public Entities

680,735

)

Short-Term Borrowed Funds (Deposit Sweep)

(229,278

)

Other

(5,644

)

Total Debt Securities Pledged as Collateral

915,657

)

Debt Securities Pledged at the Federal Reserve Bank

964,139

)

Estimated Debt Securities Available to Pledge

1,930,927

11. Capital.

(in thousands, except per-share amounts)

9/30/23

9/30/22

Change

6/30/23

Shareholders' Equity

648,423

538,988

20.3

651,862

Total Assets

6,567,288

7,177,025

-8.5

6,582,740

Shareholders' Equity/

Total Assets

9.87

7.51

9.90

Shareholders' Equity/

Total Loans

73.20

55.05

70.89

Tangible Common Equity Ratio

8.17

5.91

8.20

Common Shares Outstanding

26,649

26,911

-1.0

26,648

Common Equity Per Share

24.33

20.03

21.5

24.46

Market Value Per Common Share

43.25

52.29

-17.3

38.30

(shares in thousands)

Q3'2023

Q3'2022

Change

Q2'2023

Share Repurchase Programs:

Total Shares Repurchased / Canceled

n/m

Average Repurchase Price

n/m

Net Shares Issued

)

(15

)

n/m

9/30'23YTD

9/30'22YTD

Change

Total Shares Repurchased

274

n/m

Average Repurchase Price

50.11

58.66

n/m

Net Shares Repurchased (Issued)

264

(45

)

n/m

12. Period-End Balance Sheets.

(unaudited, dollars in thousands)

9/30/23

9/30/22

Change

6/30/23

Assets:

Cash and Due from Banks

420,550

413,665

1.7

266,187

Debt Securities Available for Sale

Corporate Securities

1,814,424

2,138,508

-15.2

1,901,504

Collateralized Loan Obligations

1,503,078

1,587,622

-5.3

1,514,962

Agency Mortgage Backed Securities

239,728

296,689

-19.2

259,190

Securities of U.S. Government sponsored

entities

279,364

272,525

2.5

291,402

Obligations of States and Political

Subdivisions

69,639

80,987

-14.0

79,400

Total Debt Securities Available for Sale

3,906,233

4,376,331

-10.7

4,046,458

Debt Securities Held to Maturity

Agency Mortgage Backed Securities

84,347

112,371

-24.9

91,141

Corporate Securities

726,951

720,154

0.9

725,252

Obligations of States and Political

Subdivisions (3)

77,558

103,742

-25.2

83,963

Total Debt Securities Held to Maturity (3)

888,856

936,267

-5.1

900,356

Loans

885,850

979,033

-9.5

919,583

Allowance For Credit Losses on Loans

(17,744

)

(21,218

)

-16.4

(18,480

)

Total Loans, net

868,106

957,815

-9.4

901,103

Premises and Equipment, net

27,490

29,756

-7.6

27,908

Identifiable Intangibles, net

404

644

-37.3

463

Goodwill

121,673

0.0

121,673

Other Assets

333,976

340,874

-2.0

318,592

Total Assets

6,567,288

7,177,025

-8.5

6,582,740

Liabilities and Shareholders' Equity:

Deposits:

Noninterest-Bearing

2,723,403

3,069,907

-11.3

2,721,046

Interest-Bearing Transaction

1,138,220

1,338,855

-15.0

1,133,006

Savings

1,732,849

1,949,711

-11.1

1,735,083

Time

104,541

136,783

-23.6

116,792

Total Deposits

5,699,013

6,495,256

-12.3

5,705,927

Short-Term Borrowed Funds

115,341

76,886

50.0

138,005

Other Liabilities

104,511

65,895

58.6

86,946

Total Liabilities

5,918,865

6,638,037

-10.8

5,930,878

Shareholders' Equity:

Common Equity:

Paid-In Capital

471,862

474,732

-0.6

471,510

Accumulated Other

Comprehensive Loss

(285,709

)

(290,797

)

-1.7

(252,043

)

Retained Earnings

462,270

355,053

30.2

432,395

Total Shareholders' Equity

648,423

538,988

20.3

651,862

Total Liabilities and

Shareholders' Equity

6,567,288

7,177,025

-8.5

6,582,740

13. Income Statements.

(unaudited, in thousands except per-share amounts)

Q3'2023

Q3'2022

Change

Q2'2023

Interest & Fee Income:

Loans

11,925

12,208

-2.3

11,845

Equity Securities

152

127

19.7

152

Debt Securities Available for Sale

47,994

39,100

22.7

47,452

Debt Securities Held to Maturity

8,848

6,625

33.5

8,930

Interest-Bearing Cash

3,929

2,742

43.3

2,110

Total Interest & Fee Income

72,848

60,802

19.8

70,489

Interest Expense:

Transaction Deposits

131

39.4

104

Savings Deposits

886

290

205.5

396

Time Deposits

-9.3

Short-Term Borrowed Funds

123.5

Total Interest Expense

1,133

487

132.6

607

Net Interest Income

71,715

60,315

18.9

69,882

Provision for Credit Losses

400

n/m

Noninterest Income:

Service Charges on Deposit Accounts

3,705

3,737

-0.9

3,459

Merchant Processing Services

2,911

2,925

-0.5

2,869

Debit Card Fees

1,717

1,594

7.7

1,759

Trust Fees

783

810

-3.3

810

ATM Processing Fees

640

594

7.7

702

Other Service Fees

463

0.1

458

Financial Services Commissions

-1.3

103

Life Insurance Gains

278

923

n/m

Securities Losses

n/m

(125

)

Other Noninterest Income

706

693

1.9

665

Total Noninterest Income

11,281

11,818

-4.5

10,700

Noninterest Expense:

Salaries and Related Benefits

11,820

11,311

4.5

11,828

Occupancy and Equipment

5,065

5,064

0.0

5,012

Outsourced Data Processing

2,473

2,434

1.6

2,488

Limited Partnership Operating Losses

1,440

1,431

0.6

1,440

Professional Fees

401

582

-31.1

485

Courier Service

745

671

11.0

611

Other Noninterest Expense

3,706

3,274

13.2

3,975

Total Noninterest Expense

25,650

24,767

3.6

25,839

Income Before Income Taxes

56,946

47,366

20.2

54,743

Income Tax Provision

15,345

12,606

21.7

14,495

Net Income

41,601

34,760

19.7

40,248

Average Common Shares Outstanding

26,648

26,906

-1.0

26,648

Diluted Average Common Shares Outstanding

26,650

26,916

-1.0

26,648

Per Common Share Data:

Basic Earnings

1.56

1.29

20.9

1.51

Diluted Earnings

1.56

1.29

20.9

1.51

Dividends Paid

0.44

0.42

4.8

0.42

9/30'23YTD

9/30'22YTD

Change

Interest & Fee Income:

Loans

35,510

37,481

-5.3

Equity Securities

456

384

18.8

Debt Securities Available for Sale

142,256

99,430

43.1

Debt Securities Held to Maturity

26,758

10,040

166.5

Interest-Bearing Cash

7,981

5,223

52.8

Total Interest & Fee Income

212,961

152,558

39.6

Interest Expense:

Transaction Deposits

329

273

20.5

Savings Deposits

1,562

861

81.4

Time Deposits

244

249

-2.0

Short-Term Borrowed Funds

13.4

Total Interest Expense

2,211

1,450

52.5

Net Interest Income

210,750

151,108

39.5

Reversal of Provision for Credit Losses (2)

(1,150

)

n/m

Noninterest Income:

Service Charges on Deposit Accounts

10,629

11,006

-3.4

Merchant Processing Services

8,417

8,922

-5.7

Debit Card Fees (1)

5,118

6,175

-17.1

Trust Fees

2,358

2,462

-4.2

ATM Processing Fees

1,996

1,514

31.8

Other Service Fees

1,320

1,392

-5.2

Financial Services Commissions

270

314

-14.0

Life Insurance Gains

278

923

n/m

Securities Losses

(125

)

n/m

Other Operating

2,269

1,950

16.4

Total Noninterest Income

32,530

34,658

-6.1

Noninterest Expense:

Salaries and Related Benefits

35,715

34,643

3.1

Occupancy and Equipment

15,562

14,666

6.1

Outsourced Data Processing

7,405

7,294

1.5

Limited Partnership Operating Losses

4,314

4,293

0.5

Professional Fees

1,362

2,054

-33.7

Courier Service

1,971

1,914

3.0

Other Operating

11,370

9,407

20.9

Total Noninterest Expense

77,699

74,271

4.6

Income Before Income Taxes

166,731

111,495

49.5

Income Tax Provision

44,431

28,805

54.2

Net Income

122,300

82,690

47.9

Average Common Shares Outstanding

26,718

26,889

-0.6

Diluted Average Common Shares Outstanding

26,721

26,901

-0.7

Per Common Share Data:

Basic Earnings

4.58

3.08

48.7

Diluted Earnings

4.58

3.07

49.2

Dividends Paid

1.28

1.26

1.6

Footnotes and Abbreviations:

(1) The Company received a $1.2 million reconciling payment from a payments network in the first quarter 2022.

(2) A recovery of a previously charged off loan in the first quarter 2023 resulted in a $1,550 thousand reversal of the allowance for credit loss provision in the first quarter 2023.

(3) Debt Securities Held To Maturity and Obligations of States and Political Subdivisions are net of related reserve for expected credit losses of $1 thousand at September 30, 2023 and June 30, 2023, and $7 thousand at September 30, 2022.

(FTE) Fully Taxable Equivalent. The Company presents its net interest margin and net interest income on a FTE basis using the current statutory federal tax rate. Management believes the FTE basis is valuable to the reader because the Company's loan and investment securities portfolios contain a portion of municipal loans and securities that are federally tax exempt. The Company's tax exempt loans and securities composition may not be similar to that of other banks, therefore in order to reflect the impact of the federally tax exempt loans and securities on the net interest margin and net interest income for comparability with other banks, the Company presents its net interest margin and net interest income on a FTE basis.

(a) Annualized