Westamerica Bancorporation Reports Third Quarter 2022 Financial Results

October 20, 2022 11:00 AM | 230 min read | Make a Comment
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SAN RAFAEL, Calif., Oct. 20, 2022 (GLOBE NEWSWIRE) -- Westamerica Bancorporation WABC, parent company of Westamerica Bank, generated net income for the third quarter 2022 of $34.8 million and diluted earnings per common share ("EPS") of $1.29, including a life insurance gain equivalent to EPS of $0.03. Third quarter 2022 net income was 37 percent higher than second quarter 2022 net income of $25.3 million and EPS of $0.94.

"Westamerica's third quarter 2022 results benefited from the Company's variable-rate bonds, cash and loans, as well as our valuable deposit base. With 47 percent of average deposits represented by non-interest bearing checking accounts and limited reliance on time deposits, the cost of funding our loan and bond portfolios was 0.03 percent in the third quarter 2022, unchanged from the prior quarter. Operating expenses were well controlled and credit quality remained solid," said Chairman, President and CEO David Payne. "Third quarter 2022 results generated an annualized 17.1 percent return on average common equity. Shareholders were paid a $0.42 per common share dividend during the third quarter 2022," concluded Payne.

Net interest income on a fully-taxable equivalent (FTE) basis was $60.8 million for the third quarter 2022, compared to $48.0 million for the second quarter 2022. The yield earned on loans and bonds for the third quarter 2022 was 3.47 percent, up from 2.77 percent for the second quarter 2022. The cost of funding the loan and bond portfolios was 0.03 percent for both the third quarter and second quarter of 2022. Variable rate assets at September 30, 2022 included $1.6 billion in collateralized loan obligations for which interest rates reset quarterly, and $304.1 million in interest-bearing cash balances for which the interest rate changes concurrently with Federal Open Market Committee adjustments to the federal funds rate.

Noninterest income for the third quarter 2022 totaled $11.8 million, including a $923 thousand life insurance gain. Noninterest income for the second quarter 2022 was $11.3 million.

Noninterest expenses for the third quarter 2022 were $24.8 million compared to $24.6 million for the second quarter 2022.

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 & Treasurer
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, 2021 filed on Form 10-K and quarterly report for the quarter ended June 30, 2022 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 2011, 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.

WESTAMERICA BANCORPORATION
FINANCIAL HIGHLIGHTS
September 30, 2022

1. Net Income Summary.    
  (in thousands except per-share amounts)
    % 
  Q3'2022Q3'2021ChangeQ2'2022
      
 Net Interest and Fee Income (FTE)$60,780  $43,952  38.3%$48,033  
 Provision for Credit Losses  -    -  n/m   -  
 Noninterest Income 11,818   11,282  4.8% 11,264  
 Noninterest Expense 24,767   24,697  0.3% 24,629  
 Income Before Taxes (FTE) 47,831   30,537  56.6% 34,668  
 Income Tax Provision (FTE) 13,071   8,474  54.2% 9,354  
 Net Income$34,760  $22,063  57.5%$25,314  
      
 Average Common Shares Outstanding 26,906   26,866  0.1% 26,889  
 Diluted Average Common Shares 26,916   26,875  0.2% 26,901  
      
 Operating Ratios:    
 Basic Earnings Per Common Share$1.29  $0.82  57.3%$0.94  
 Diluted Earnings Per Common Share 1.29   0.82  57.3% 0.94  
 Return On Assets (a) 1.85% 1.22%  1.37%
 Return On Common Equity (a) 17.1% 11.6%  12.9%
 Net Interest Margin (FTE) (a) 3.44% 2.60%  2.74%
 Efficiency Ratio (FTE) 34.1% 44.7%  41.5%
      
 Dividends Paid Per Common Share$0.42  $0.41  2.4%$0.42  
 Common Dividend Payout Ratio  33% 50%  45%
      
    % 
  9/30'22YTD9/30'21YTDChange 
      
 Net Interest and Fee Income (FTE)$152,620  $131,034  16.5% 
 Provision for Credit Losses  -    -  n/m  
 Noninterest Income (1) 34,658   32,503  6.6% 
 Noninterest Expense 74,271   73,894  0.5% 
 Income Before Taxes (FTE) 113,007   89,643  26.1% 
 Income Tax Provision (FTE) 30,317   24,854  22.0% 
 Net Income$82,690  $64,789  27.6% 
      
 Average Common Shares Outstanding 26,889   26,851  0.1% 
 Diluted Average Common Shares 26,901   26,868  0.1% 
      
 Operating Ratios:    
 Basic Earnings Per Common Share$3.08  $2.41  27.8% 
 Diluted Earnings Per Common Share 3.07   2.41  27.4% 
 Return On Assets (a) 1.49% 1.25%  
 Return On Common Equity (a) 14.0% 11.6%  
 Net Interest Margin (FTE) (a) 2.90% 2.67%  
 Efficiency Ratio (FTE) 39.7% 45.2%  
      
 Dividends Paid Per Common Share$1.26  $1.23  2.4% 
 Common Dividend Payout Ratio  41% 51%  
          


2. Net Interest Income.    
  (dollars in thousands)
    % 
  Q3'2022Q3'2021ChangeQ2'2022
      
 Interest and Fee Income (FTE)$61,267  $44,444  37.9%$48,516  
 Interest Expense 487   492  -1.0% 483  
 Net Interest and Fee Income (FTE)$60,780  $43,952  38.3%$48,033  
      
 Average Earning Assets$7,041,313  $6,754,281  4.2%$7,000,862  
  Average Interest-Bearing Liabilities 3,520,083   3,370,840  4.4% 3,549,140  
      
 Yield on Earning Assets (FTE) (a) 3.47% 2.63%  2.77%
 Cost of Funds (a) 0.03% 0.03%  0.03%
 Net Interest Margin (FTE) (a) 3.44% 2.60%  2.74%
  Interest Expense/Interest-Bearing Liabilities (a) 0.05% 0.06%  0.05%
 Net Interest Spread (FTE) (a) 3.42% 2.57%  2.72%
      
    % 
  9/30'22YTD9/30'21YTDChange 
      
 Interest and Fee Income (FTE)$154,070  $132,485  16.3% 
 Interest Expense 1,450   1,451  -0.1% 
 Net Interest and Fee Income (FTE)$152,620  $131,034  16.5% 
      
 Average Earning Assets$7,013,627  $6,535,949  7.3% 
  Average Interest-Bearing Liabilities 3,538,361   3,267,311  8.3% 
      
 Yield on Earning Assets (FTE) (a) 2.93% 2.70%  
 Cost of Funds (a) 0.03% 0.03%  
 Net Interest Margin (FTE) (a) 2.90% 2.67%  
  Interest Expense/Interest-Bearing Liabilities (a) 0.05% 0.06%  
 Net Interest Spread (FTE) (a) 2.88% 2.64%  
          


3. Loans & Other Earning Assets.    
  (average volume, dollars in thousands)
    % 
  Q3'2022Q3'2021ChangeQ2'2022
      
 Total Assets$7,472,304  $7,158,462  4.4%$7,420,069  
 Total Earning Assets 7,041,313   6,754,281  4.2% 7,000,862  
 Total Loans 989,033   1,176,114  -15.9% 1,009,633  
  Total Commercial Loans 190,325   333,327  -42.9% 202,585  
  Paycheck Protection Program (PPP) Loans  10,453    144,641  -92.8%  20,997  
  Commercial Loans 179,872   188,686  -4.7% 181,588  
  Commercial RE Loans  494,717   543,429  -9.0% 508,003  
  Consumer Loans 303,991   299,358  1.5% 299,045  
 Total Investment Securities 5,552,588   4,615,540  20.3% 5,008,929  
  Debt Securities Available For Sale 4,845,055   4,235,141  14.4% 4,721,083  
  Debt Securities Held To Maturity 707,533   380,399  86.0% 287,846  
 Total Interest-Bearing Cash 499,692   962,627  -48.1% 982,300  
      
 Loans/Deposits 15.2% 18.9%  15.7%
      
    % 
  9/30'22YTD9/30'21YTDChange 
      
 Total Assets$7,433,140  $6,939,636  7.1% 
 Total Earning Assets 7,013,627   6,535,949  7.3% 
 Total Loans 1,009,314   1,227,971  -17.8% 
  Total Commercial Loans 200,206   380,638  -47.4% 
  PPP Loans  22,347    180,214  -87.6% 
  Commercial Loans 177,859   200,424  -11.3% 
  Commercial RE Loans  508,812   549,639  -7.4% 
  Consumer Loans 300,296   297,694  0.9% 
 Total Investment Securities 5,172,003   4,484,084  15.3% 
  Debt Securities Available For Sale 4,741,400   4,046,289  17.2% 
  Debt Securities Held To Maturity 430,603   437,795  -1.6% 
 Total Interest-Bearing Cash 832,310   823,894  1.0% 
      
 Loans/Deposits 15.7% 20.4%  
          


4. Deposits, Other Interest-Bearing Liabilities & Equity.  
  (average volume, dollars in thousands)
    % 
  Q3'2022Q3'2021ChangeQ2'2022
      
 Total Deposits$6,495,051  $6,223,500  4.4%$6,424,202  
  Noninterest Demand  3,058,662   2,960,207  3.3% 2,998,360  
  Interest-Bearing Transaction 1,308,310   1,246,667  4.9% 1,298,665  
  Savings 1,989,275   1,864,401  6.7% 1,985,325  
  Time greater than $100K 62,014   68,811  -9.9% 63,790  
  Time less than $100K 76,790   83,414  -7.9% 78,062  
 Total Short-Term Borrowings 83,694   107,547  -22.2% 123,298  
 Shareholders' Equity 807,428   755,682  6.8% 788,078  
      
 Demand Deposits/    
  Total Deposits 47.1% 47.6%  46.7%
 Transaction & Savings     
  Deposits / Total Deposits 97.9% 97.6%  97.8%
      
    % 
  9/30'22YTD9/30'21YTDChange 
      
 Total Deposits$6,437,943  $6,017,175  7.0% 
  Noninterest Demand  3,020,892   2,854,936  5.8% 
  Interest-Bearing Transaction 1,290,850   1,195,762  8.0% 
  Savings 1,984,931   1,811,711  9.6% 
  Time greater than $100K 63,318   70,258  -9.9% 
  Time less than $100K 77,952   84,508  -7.8% 
 Total Short-Term Borrowings 121,310   105,001  15.5% 
 Other Borrowed Funds  -    71  n/m  
 Shareholders' Equity 790,691   745,382  6.1% 
      
 Demand Deposits/    
  Total Deposits 46.9% 47.4%  
 Transaction & Savings     
  Deposits / Total Deposits 97.8% 97.4%  
          


5. Interest Yields Earned & Rates Paid.   
  (dollars in thousands)
  Q3'2022
  AverageIncome/Yield (a) /
  VolumeExpenseRate (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%
  Total Commercial Loans (FTE) 190,325  2,843 5.93%
  PPP Loans  10,453   533 20.24%
  Commercial Loans (FTE) 179,872  2,310 5.10%
  Commercial RE 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  94 0.03%
  Savings 1,989,275  290 0.06%
  Time less than $100K 76,790  47 0.24%
  Time greater than $100K 62,014  39 0.25%
  Total Short-Term Borrowings  83,694  17 0.08%
     
 Net Interest Income and Margin (FTE) $60,780 3.44%
     
  Q3'2021
  AverageIncome/Yield (a) /
  VolumeExpenseRate (a)
 Interest & Fee Income Earned   
  Total Earning Assets (FTE)$6,754,281 $44,444 2.63%
  Total Loans (FTE) 1,176,114  14,893 5.02%
  Total Commercial Loans (FTE) 333,327  3,866 4.60%
  PPP Loans 144,641  1,865 5.12%
  Commercial Loans (FTE) 188,686  2,001 4.21%
  Commercial RE Loans  543,429  7,457 5.44%
  Consumer Loans 299,358  3,570 4.73%
  Total Investments (FTE) 4,615,540  29,182 2.53%
  Total Debt Securities Available For Sale (FTE) 4,235,141  26,736 2.51%
  Corporate Securities 2,506,856  17,974 2.87%
  Collateralized Loan Obligations 1,148,445  5,631 1.92%
  Agency Mortgage Backed Securities 470,250  2,022 1.72%
  Obligations of States and Political Subdivisions (FTE) 95,229  747 3.14%
  Other Debt Securities Available For Sale (FTE) 14,361  362 10.09%
  Total Debt Securities Held To Maturity (FTE) 380,399  2,446 2.57%
  Agency Mortgage Backed Securities 178,381  753 1.69%
  Obligations of States and Political Subdivisions (FTE) 202,018  1,693 3.35%
  Total Interest-Bearing Cash 962,627  369 0.15%
     
 Interest Expense Paid   
  Total Earning Assets  6,754,281  492 0.03%
  Total Interest-Bearing Liabilities 3,370,840  492 0.06%
  Total Interest-Bearing Deposits 3,263,293  473 0.06%
  Interest-Bearing Transaction 1,246,667  101 0.03%
  Savings 1,864,401  272 0.06%
  Time less than $100K 83,414  42 0.20%
  Time greater than $100K 68,811  58 0.33%
  Total Short-Term Borrowings  107,547  19 0.07%
     
 Net Interest Income and Margin (FTE) $43,952 2.60%
       
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6. Noninterest Income.    
  (dollars in thousands except per-share amounts)
    % 
  Q3'2022Q3'2021ChangeQ2'2022
      
 Service Charges on Deposits$3,737  $3,578  4.4%$3,687  
 Merchant Processing Services 2,925   3,159  -7.4% 3,374  
 Debit Card Fees 1,594   1,740  -8.4% 1,709  
 Trust Fees 810   839  -3.5% 809  
 ATM Processing Fees 594   573  3.7% 469  
 Other Service Fees 463   475  -2.6% 480  
 Financial Services Commissions 79   95  -16.8% 118  
 Life Insurance Gains  923    -  n/m   -  
 Other Noninterest Income 693   823  -15.8% 618  
 Total Noninterest Income$11,818  $11,282  4.8%$11,264  
      
  Total Revenue (FTE)$72,598  $55,234  31.4%$59,297  
  Noninterest Income/Revenue (FTE) 16.3% 20.4%  19.0%
  Service Charges/Avg. Deposits (a) 0.23% 0.23%  0.23%
 Total Revenue (FTE) Per Avg. Common Share (a)$10.70  $8.16  31.2%$8.85  
      
    % 
  9/30'22YTD9/30'21YTDChange 
      
 Service Charges on Deposits$11,006  $10,117  8.8% 
 Merchant Processing Services 8,922   8,998  -0.8% 
 Debit Card Fees (1) 6,175   5,132  20.3% 
 Trust Fees 2,462   2,467  -0.2% 
 ATM Processing Fees 1,514   1,792  -15.5% 
 Other Service Fees 1,392   1,435  -3.0% 
 Financial Services Commissions 314   260  20.8% 
 Life Insurance Gains  923    -  n/m  
 Securities Gains  -    34  n/m  
 Other Noninterest Income 1,950   2,268  -14.0% 
 Total Noninterest Income$34,658  $32,503  6.6% 
      
  Total Revenue (FTE)$187,278  $163,537  14.5% 
  Noninterest Income/Revenue (FTE) 18.5% 19.9%  
  Service Charges/Avg. Deposits (a) 0.23% 0.22%  
 Total Revenue (FTE) Per Avg./Common Share (a)$9.31  $8.14  14.4% 
           


7. Noninterest Expense.    
  (dollars in thousands)
    % 
  Q3'2022Q3'2021ChangeQ2'2022
      
 Salaries & Benefits$11,311  $11,813  -4.2%$11,412  
 Occupancy and Equipment 5,064   4,759  6.4% 4,856  
 Outsourced Data Processing 2,434   2,429  0.2% 2,423  
 Limited Partnership Operating Losses 1,431   620  130.8% 1,431  
 Professional Fees 582   724  -19.6% 736  
 Courier Service 671   534  25.7% 661  
 Other Noninterest Expense 3,274   3,818  -14.2% 3,110  
 Total Noninterest Expense$24,767  $24,697  0.3%$24,629  
      
  Noninterest Expense/Avg. Earning Assets (a) 1.40% 1.45%  1.41%
 Noninterest Expense/Revenues (FTE) 34.1% 44.7%  41.5%
      
    % 
  9/30'22YTD9/30'21YTDChange 
      
 Salaries & Benefits$34,643  $36,575  -5.3% 
 Occupancy and Equipment 14,666   14,447  1.5% 
 Outsourced Data Processing 7,294   7,244  0.7% 
 Limited Partnership Operating Losses 4,293   1,820  135.9% 
 Professional Fees 2,054   2,496  -17.7% 
 Courier Service 1,914   1,605  19.3% 
 Other Noninterest Expense 9,407   9,707  -3.1% 
 Total Noninterest Expense$74,271  $73,894  0.5% 
      
  Noninterest Expense/Avg. Earning Assets (a) 1.42% 1.51%  
 Noninterest Expense/Revenues (FTE) 39.7% 45.2%  
          


8. Allowance for Credit Losses.    
  (dollars in thousands)
    % 
  Q3'2022Q3'2021ChangeQ2'2022
      
 Average Total Loans$989,033  $1,176,114  -15.9%$1,009,633  
      
 Beginning of Period Allowance for Credit Losses on Loans (ACLL)$22,313  $23,737  -6.0%$22,925  
 Provision for Credit Losses   -    2  n/m   -  
 Net ACLL (Losses) Recoveries (1,095) 143  n/m  (612)
 End of Period ACLL$21,218  $23,882  -11.2%$22,313  
 Gross ACLL Recoveries / Gross ACLL Losses  43% 115%  57%
 Net ACLL Losses (Recoveries) / Avg. Total Loans (a)                         0.44% (0.05%)  0.24%
      
    % 
  9/30'22YTD9/30'21YTDChange 
      
 Average Total Loans$1,009,314  $1,227,971  -17.8% 
      
 Beginning of Period ACLL $23,514  $23,854  -1.4% 
 Provision for Credit Losses   -    2  n/m  
 Net ACLL (Losses) Recoveries (2,296) 26  n/m  
 End of Period ACLL$21,218  $23,882  -11.2% 
 Gross ACLL Recoveries / Gross ACLL Losses  49% 101%  
 Net ACLL Losses (Recoveries) / Avg. Total Loans (a)                         0.30% 0.00%  
      
  (dollars in thousands)
    % 
  9/30/229/30/21Change6/30/22
 Allowance for Credit Losses on Loans$21,218  $23,882  -11.2%$22,313  
 Allowance for Credit Losses on HTM Securities 7    7  0.0%  7  
 Total Allowance for Credit Losses$21,225  $23,889  -11.2%$22,320  
      
 Allowance for Unfunded Credit Commitments$201  $101  99.3%$201  
             


9. Credit Quality.    
  (dollars in thousands)
    % 
  9/30/229/30/21Change6/30/22
 Nonperforming Loans:    
  Nonperforming Nonaccrual$131  $801  -83.6%$12  
  Performing Nonaccrual  66    436  -84.9%  235  
 Total Nonaccrual Loans 197   1,237  -84.1% 247  
 90+ Days Past Due Accruing Loans 769   537  43.2% 614  
 Total Nonperforming Loans$966  $1,774  -45.5%$861  
      
 Total Loans Outstanding $979,033  $1,132,472  -13.5%$999,768  
      
 Total Assets  7,177,025   7,403,573  -3.1% 7,222,405  
      
 Loans:    
 Allowance for Credit Losses on Loans$21,218  $23,882  -11.2%$22,313  
 Allowance for Credit Losses on Loans / Loans 2.17% 2.11%  2.23%
 Nonperforming Loans/Total Loans 0.10% 0.16%  0.09%
            


10. Capital.    
  (in thousands, except per-share amounts)
    % 
  9/30/229/30/21Change6/30/22
      
 Shareholders' Equity$538,988  $837,953  -35.7%$617,126  
 Total Assets 7,177,025   7,403,573  -3.1% 7,222,405  
  Shareholders' Equity/Total Assets 7.51% 11.32%  8.54%
  Shareholders' Equity/Total Loans 55.05% 73.99%  61.73%
 Tangible Common Equity Ratio 5.91% 9.83%  6.97%
 Common Shares Outstanding 26,911   26,866  0.2% 26,896  
 Common Equity Per Share$20.03  $31.19  -35.8%$22.94  
 Market Value Per Common Share 52.29   56.26  -7.1% 55.66  
      
  (shares in thousands)
    % 
  Q3'2022Q3'2021ChangeQ2'2022
 Share Repurchase Programs:    
  Total Shares Repurchased  -    -  n/m   -  
  Average Repurchase Price$ -  $ -  n/m $ -  
  Net Shares Issued  (15) (1)n/m  (13)
      
    % 
  9/30'22YTD9/30'21YTDChange 
      
  Total Shares Repurchased  3    4  n/m  
  Average Repurchase Price$58.66  $61.09  n/m  
  Net Shares Issued (45) (59)n/m  
          


11. Period-End Balance Sheets.    
  (unaudited, dollars in thousands)
    % 
  9/30/229/30/21Change6/30/22
 Assets:    
  Cash and Due from Banks$413,665  $1,011,048  -59.1%$753,293  
      
  Debt Securities Available For Sale:    
  Corporate Securities 2,138,508   2,668,389  -19.9% 2,296,853  
  Collateralized Loan Obligations 1,587,622   1,379,533  15.1% 1,601,333  
  Agency Mortgage Backed Securities 296,689   458,053  -35.2% 331,425  
  Securities of U.S. Government sponsored entities 272,525    -  n/m   290,725  
  Obligations of States and Political Subdivisions 80,987   96,603  -16.2% 86,676  
  Other Debt Securities Available For Sale  -   128  n/m  102  
  Total Debt Securities Available For Sale 4,376,331   4,602,706  -4.9% 4,607,114  
      
  Debt Securities Held To Maturity:    
  Agency Mortgage Backed Securities 112,371   166,955  -32.7% 121,810  
  Corporate Securities 720,154    -  n/m   181,316  
  Obligations of States and Political Subdivisions (2) 103,742   189,151  -45.2% 139,228  
  Total Debt Securities Held To Maturity (2) 936,267   356,106  162.9% 442,354  
      
  Loans 979,033   1,132,472  -13.5% 999,768  
  Allowance For Credit Losses on Loans (21,218) (23,882)-11.2% (22,313)
  Total Loans, net 957,815   1,108,590  -13.6% 977,455  
      
  Premises and Equipment, net 29,756   31,603  -5.8% 30,309  
  Identifiable Intangibles, net 644   900  -28.4% 707  
  Goodwill  121,673   121,673  0.0% 121,673  
  Other Assets 340,874   170,947  99.4% 289,500  
      
 Total Assets$7,177,025  $7,403,573  -3.1%$7,222,405  
      
 Liabilities and Shareholders' Equity:    
  Deposits:    
  Noninterest-Bearing$3,069,907  $2,988,329  2.7%$2,987,725  
  Interest-Bearing Transaction 1,338,855   1,257,460  6.5% 1,303,700  
  Savings 1,949,711   1,894,290  2.9% 1,983,713  
  Time 136,783   148,882  -8.1% 140,453  
  Total Deposits 6,495,256   6,288,961  3.3% 6,415,591  
      
  Short-Term Borrowed Funds 76,886   119,102  -35.4% 118,167  
  Other Liabilities 65,895   157,557  -58.2% 71,521  
 Total Liabilities 6,638,037   6,565,620  1.1% 6,605,279  
      
 Shareholders' Equity:    
  Common Equity:    
  Paid-In Capital 474,732   470,711  0.9% 473,555  
  Accumulated Other Comprehensive (Loss) Income (290,797) 71,284  n/m  (188,025)
  Retained Earnings 355,053   295,958  20.0% 331,596  
 Total Shareholders' Equity 538,988   837,953  -35.7% 617,126  
      
  Total Liabilities and Shareholders' Equity$7,177,025  $7,403,573  -3.1%$7,222,405  
             


12. Income Statements.    
  (unaudited, in thousands except per-share amounts)
    % 
  Q3'2022Q3'2021ChangeQ2'2022
 Interest & Fee Income:    
 Loans$12,208 $14,789 -17.5%$12,331
 Equity Securities 127  109 16.5% 129
 Debt Securities Available For Sale 39,100  26,452 47.8% 31,764
 Debt Securities Held To Maturity 6,625  2,091 216.9% 1,771
 Interest-Bearing Cash 2,742  369 643.1% 2,002
 Total Interest & Fee Income 60,802  43,810 38.8% 47,997
      
 Interest Expense:    
  Transaction Deposits 94  101 -6.9% 91
  Savings Deposits 290  272 6.6% 288
  Time Deposits 86  100 -14.0% 82
  Short-Term Borrowed Funds 17  19 -10.5% 22
 Total Interest Expense 487  492 -1.0% 483
      
 Net Interest Income 60,315  43,318 39.2% 47,514
      
 Provision for Credit Losses  -   - n/m   -
      
 Noninterest Income:    
  Service Charges  3,737  3,578 4.4% 3,687
  Merchant Processing Services 2,925  3,159 -7.4% 3,374
 Debit Card Fees 1,594  1,740 -8.4% 1,709
  Trust Fees 810  839 -3.5% 809
  ATM Processing Fees 594  573 3.7% 469
  Other Service Fees 463  475 -2.6% 480
  Financial Services Commissions 79  95 -16.8% 118
  Life Insurance Gains  923   - n/m   -
  Other Noninterest Income 693  823 -15.8% 618
 Total Noninterest Income 11,818  11,282 4.8% 11,264
      
 Noninterest Expense:    
  Salaries and Benefits 11,311  11,813 -4.2% 11,412
  Occupancy and Equipment 5,064  4,759 6.4% 4,856
  Outsourced Data Processing 2,434  2,429 0.2% 2,423
  Limited Partnership Operating Losses 1,431  620 130.8% 1,431
  Professional Fees 582  724 -19.6% 736
  Courier Service 671  534 25.7% 661
  Other Noninterest Expense 3,274  3,818 -14.2% 3,110
 Total Noninterest Expense 24,767  24,697 0.3% 24,629
      
 Income Before Income Taxes 47,366  29,903 58.4% 34,149
 Income Tax Provision 12,606  7,840 60.8% 8,835
 Net Income$34,760 $22,063 57.5%$25,314
      
 Average Common Shares Outstanding 26,906  26,866 0.1% 26,889
 Diluted Common Shares Outstanding 26,916  26,875 0.2% 26,901
      
 Per Common Share Data:    
  Basic Earnings$1.29 $0.82 57.3%$0.94
  Diluted Earnings 1.29  0.82 57.3% 0.94
  Dividends Paid 0.42  0.41 2.4% 0.42
      
    % 
  9/30'22YTD9/30'21YTDChange 
 Interest & Fee Income:    
 Loans$37,481 $44,434 -15.6% 
 Equity Securities 384  329 16.7% 
 Debt Securities Available For Sale 99,430  77,822 27.8% 
 Debt Securities Held To Maturity 10,040  7,051 42.4% 
 Interest-Bearing Cash 5,223  766 581.9% 
 Total Interest & Fee Income 152,558  130,402 17.0% 
      
 Interest Expense:    
  Transaction Deposits 273  283 -3.5% 
  Savings Deposits 861  785 9.7% 
  Time Deposits 249  330 -24.5% 
  Short-Term Borrowed Funds 67  53 26.4% 
 Total Interest Expense 1,450  1,451 -0.1% 
      
 Net Interest Income 151,108  128,951 17.2% 
      
 Provision for Credit Losses  -   - n/m  
      
 Noninterest Income:    
  Service Charges  11,006  10,117 8.8% 
  Merchant Processing Services 8,922  8,998 -0.8% 
 Debit Card Fees (1) 6,175  5,132 20.3% 
  Trust Fees 2,462  2,467 -0.2% 
  ATM Processing Fees 1,514  1,792 -15.5% 
  Other Service Fees 1,392  1,435 -3.0% 
  Financial Services Commissions 314  260 20.8% 
  Life Insurance Gains  923   - n/m  
  Securities Gains  -   34 n/m  
  Other Operating 1,950  2,268 -14.0% 
 Total Noninterest Income 34,658  32,503 6.6% 
      
 Noninterest Expense:    
  Salaries and Benefits 34,643  36,575 -5.3% 
  Occupancy and Equipment 14,666  14,447 1.5% 
  Outsourced Data Processing 7,294  7,244 0.7% 
  Limited Partnership Operating Losses 4,293  1,820 135.9% 
  Professional Fees 2,054  2,496 -17.7% 
  Courier Service 1,914  1,605 19.3% 
  Other Operating 9,407  9,707 -3.1% 
 Total Noninterest Expense 74,271  73,894 0.5% 
      
 Income Before Income Taxes 111,495  87,560 27.3% 
 Income Tax Provision 28,805  22,771 26.5% 
 Net Income$82,690 $64,789 27.6% 
      
 Average Common Shares Outstanding 26,889  26,851 0.1% 
 Diluted Common Shares Outstanding 26,901  26,868 0.1% 
      
 Per Common Share Data:    
 Basic Earnings$3.08 $2.41 27.8% 
 Diluted Earnings 3.07  2.41 27.4% 
 Dividends Paid 1.26  1.23 2.4% 
         

Footnotes and Abbreviations:

(1) The Company received a $1.2 million reconciling payment from a payments network in the first quarter 2022.
 
(2) Debt Securities Held To Maturity and Obligations of States and Political Subdivisions are net of related reserve for expected credit losses of $7 thousand at September 30, 2022, June 30, 2022 and September 30, 2021.
 
(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 relatively large 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
 
Certain amounts in prior periods have been reclassified to conform to the current presentation.

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