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Westamerica Bancorporation Reports Fourth Quarter 2020 Financial Results
Source: Nasdaq GlobeNewswire / 21 Jan 2021 10:54:19 America/New_York
SAN RAFAEL, Calif., Jan. 21, 2021 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the fourth quarter 2020 of $23.8 million and diluted earnings per common share ("EPS") of $0.89. Fourth quarter 2020 results include a gain on sale of a closed branch building, make-whole interest income on corporate bonds redeemed prior to maturity, and a customary adjustment to the tax provision for the filed 2019 tax returns which increased EPS $0.15. These results compare to net income of $20.1 million and EPS of $0.74 for the third quarter 2020 and net income of $20.7 million and EPS of $0.77 for the fourth quarter 2019.
"Westamerica remains focused on maintaining superior customer service during the pandemic. In keeping all our branches open, we are following all health orders affecting our business to provide a safe environment for our customers and employees. Operating expenses were $24.5 million for the fourth quarter 2020, representing only 43 percent of revenues on a fully-taxable equivalent basis. Westamerica’s revenues continue to reflect current operating conditions, including reduced demand for certain bank products and services due to the pandemic, and low market interest rates. Credit quality remained stable with nonperforming loans of $4.8 million at December 31, 2020,” said Chairman, President and CEO David Payne. “Fourth quarter 2020 results generated an annualized 13.2 percent return on average common equity, and shareholders were paid a $0.41 per common share dividend during the quarter,” concluded Payne.
Net interest income on a fully-taxable equivalent (FTE) basis was $43.3 million for the fourth quarter 2020, including make-whole interest income on called corporate bonds of $1.9 million. Fourth quarter 2020 net interest income (FTE) compares to $41.8 million for the third quarter 2020 and $40.5 million for the fourth quarter 2019. Average total deposits grew $123 million from the third quarter 2020 to the fourth quarter 2020. Checking and savings deposits represented ninety-seven percent of the Company’s average deposit base during the fourth quarter 2020 generating a 0.03 percent annualized cost of funding interest-earning assets.
At December 31, 2020, nonperforming loans totaled $4.8 million and the allowance for credit losses on loans was $23.9 million. The Company continues to work with loan customers requesting deferral of loan payments due to economic weakness caused by the pandemic. At December 31, 2020, consumer loans granted loan deferrals totaled $2.5 million, commercial real estate loans with deferred payments totaled $7.8 million, primarily for hospitality, restaurant and retail properties, and commercial loans with deferred payments totaled $33 thousand. The commercial real estate loans with deferred payments are seasoned with low loan-to-value ratios.
Noninterest income for the fourth quarter 2020 totaled $14.0 million, including a $3.5 million gain on sale of a closed branch building. Noninterest income was $10.5 million and $11.7 million for the third quarter 2020 and fourth quarter 2019, respectively.
Noninterest expense for the fourth quarter 2020 was $24.5 million compared to $24.6 million for the third quarter 2020 and $24.2 million for the fourth quarter 2019.
The tax rate (FTE) applied to pre-tax income (FTE) was 27.1 percent for the fourth quarter 2020 compared to 27.5 percent for the third quarter 2020 and 26.0 percent for the fourth quarter 2019. The fourth quarter 2020 tax provision was reduced by $250 thousand resulting from a customary adjustment to true-up the Company’s 2019 estimated tax provision to the filed 2019 tax return.
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.comFORWARD-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, 2019 filed on Form 10-K and quarterly report for the quarter ended September 30, 2020 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.
Public Information January 21, 2021 WESTAMERICA BANCORPORATION FINANCIAL HIGHLIGHTS December 31, 2020 1. Net Income Summary. (in thousands except per-share amounts) % Q4'2020 Q4'2019 Change Q3'2020 Net Interest and Fee Income (FTE) $43,292 $40,481 6.9 % $41,780 Provision for Credit Losses - - n/m - Noninterest Income 13,959 11,732 19.0 % 10,476 Noninterest Expense 24,545 24,209 1.4 % 24,603 Income Before Taxes (FTE) 32,706 28,004 16.8 % 27,653 Income Tax Provision (FTE) 8,868 7,276 21.9 % 7,602 Net Income $23,838 $20,728 15.0 % $20,051 Average Common Shares Outstanding 26,838 27,050 -0.8 % 26,930 Diluted Average Common Shares 26,849 27,094 -0.9 % 26,946 Operating Ratios: Basic Earnings Per Common Share $0.89 $0.77 15.6 % $0.74 Diluted Earnings Per Common Share 0.89 0.77 15.6 % 0.74 Return On Assets (a) 1.44 % 1.46 % 1.24 % Return On Common Equity (a) 13.2 % 11.8 % 11.2 % Net Interest Margin (FTE) (a) 2.81 % 3.08 % 2.78 % Efficiency Ratio (FTE) 42.9 % 46.4 % 47.1 % Dividends Paid Per Common Share $0.41 $0.41 0.0 % $0.41 Common Dividend Payout Ratio 46 % 54 % 55 % % 12/31'20YTD 12/31'19YTD Change Net Interest and Fee Income (FTE) $167,682 $161,406 3.9 % Provision for Credit Losses 4,300 - n/m Noninterest Income 45,637 47,408 -3.7 % Noninterest Expense 98,566 98,986 -0.4 % Income Before Taxes (FTE) 110,453 109,828 0.6 % Income Tax Provision (FTE) 30,040 29,439 2.0 % Net Income $80,413 $80,389 0.0 % Average Common Shares Outstanding 26,942 26,956 0.0 % Diluted Average Common Shares 26,960 27,006 -0.2 % Operating Ratios: Basic Earnings Per Common Share $2.98 $2.98 0.0 % Diluted Earnings Per Common Share 2.98 2.98 0.0 % Return On Assets 1.30 % 1.44 % Return On Common Equity 11.3 % 11.9 % Net Interest Margin (FTE) 2.91 % 3.11 % Efficiency Ratio (FTE) 46.2 % 47.4 % Dividends Paid Per Common Share $1.64 $1.63 0.6 % Common Dividend Payout Ratio 55 % 55 % 2. Net Interest Income. (dollars in thousands) % Q4'2020 Q4'2019 Change Q3'2020 Interest and Fee Income (FTE) $43,773 $40,932 6.9 % $42,246 Interest Expense 481 451 6.7 % 466 Net Interest and Fee Income (FTE) $43,292 $40,481 6.9 % $41,780 Average Earning Assets $6,156,749 $5,243,783 17.4 % $6,001,287 Average Interest- Bearing Liabilities 3,034,240 2,599,703 16.7 % 2,931,717 Yield on Earning Assets (FTE) (a) 2.84 % 3.11 % 2.81 % Cost of Funds (a) 0.03 % 0.03 % 0.03 % Net Interest Margin (FTE) (a) 2.81 % 3.08 % 2.78 % Interest Expense/ Interest-Bearing Liabilities (a) 0.06 % 0.07 % 0.06 % Net Interest Spread (FTE) (a) 2.78 % 3.04 % 2.75 % % 12/31'20YTD 12/31'19YTD Change Interest and Fee Income (FTE) $169,506 $163,294 3.8 % Interest Expense 1,824 1,888 -3.4 % Net Interest and Fee Income (FTE) $167,682 $161,406 3.9 % Average Earning Assets $5,760,548 $5,191,276 11.0 % Average Interest- Bearing Liabilities 2,847,988 2,630,370 8.3 % Yield on Earning Assets (FTE) 2.94 % 3.14 % Cost of Funds 0.03 % 0.03 % Net Interest Margin (FTE) 2.91 % 3.11 % Interest Expense/ Interest-Bearing Liabilities 0.06 % 0.07 % Net Interest Spread (FTE) 2.88 % 3.07 % 3. Loans & Other Earning Assets. (average volume, dollars in thousands) % Q4'2020 Q4'2019 Change Q3'2020 Total Assets $6,562,753 $5,645,013 16.3 % $6,414,399 Total Earning Assets 6,156,749 5,243,783 17.4 % 6,001,287 Total Loans 1,286,480 1,116,446 15.2 % 1,312,758 Total Commercial Loans 426,564 219,710 94.1 % 444,091 Paycheck Protection Program (PPP) Loans 227,828 - n/m 243,104 Commercial Loans 198,736 219,710 -9.5 % 200,987 Commercial RE Loans 561,394 568,892 -1.3 % 566,626 Consumer Loans 298,522 327,844 -8.9 % 302,041 Total Investment Securities 4,430,592 3,792,781 16.8 % 4,360,119 Debt Securities Available For Sale 3,884,451 3,027,461 28.3 % 3,750,737 Debt Securities Held To Maturity 546,141 765,320 -28.6 % 609,382 Total Interest-Bearing Cash 439,677 334,556 31.4 % 328,410 Loans/Deposits 22.7 % 23.1 % 23.7 % % 12/31'20YTD 12/31'19YTD Change Total Assets $6,174,470 $5,597,109 10.3 % Total Earning Assets 5,760,548 5,191,276 11.0 % Total Loans 1,239,144 1,161,779 6.7 % Total Commercial Loans 359,937 248,586 44.8 % PPP Loans 151,320 - n/m Commercial Loans 208,617 248,586 -16.1 % Commercial RE Loans 571,543 577,539 -1.0 % Consumer Loans 307,664 335,654 -8.3 % Total Investment Securities 4,149,960 3,704,764 12.0 % Equity Securities - 961 n/m Debt Securities Available For Sale 3,517,633 2,844,542 23.7 % Debt Securities Held To Maturity 632,327 859,261 -26.4 % Total Interest-Bearing Cash 371,444 324,733 14.4 % Loans/Deposits 23.4 % 24.2 % 4. Deposits, Other Interest-Bearing Liabilities & Equity. (average volume, dollars in thousands) % Q4'2020 Q4'2019 Change Q3'2020 Total Deposits $5,655,768 $4,839,552 16.9 % $5,533,144 Noninterest Demand 2,736,348 2,279,615 20.0 % 2,695,458 Interest-Bearing Transaction 1,071,576 922,772 16.1 % 1,039,833 Savings 1,688,031 1,464,206 15.3 % 1,634,814 Time greater than $100K 71,306 75,314 -5.3 % 72,045 Time less than $100K 88,507 97,645 -9.4 % 90,994 Total Short-Term Borrowings 114,820 39,766 188.7 % 94,031 Shareholders' Equity 720,473 694,709 3.7 % 714,400 Demand Deposits/ Total Deposits 48.4 % 47.1 % 48.7 % Transaction & Savings Deposits / Total Deposits 97.2 % 96.4 % 97.1 % % 12/31'20YTD 12/31'19YTD Change Total Deposits $5,306,177 $4,801,804 10.5 % Noninterest Demand 2,538,819 2,222,876 14.2 % Interest-Bearing Transaction 1,008,758 932,524 8.2 % Savings 1,594,718 1,464,080 8.9 % Time greater than $100K 72,363 78,925 -8.3 % Time less than $100K 91,519 103,399 -11.5 % Total Short-Term Borrowings 80,456 51,442 56.4 % Other Borrowed Funds 174 - n/m Shareholders' Equity 711,554 675,512 5.3 % Demand Deposits/ Total Deposits 47.8 % 46.3 % Transaction & Savings Deposits / Total Deposits 96.9 % 96.2 % 5. Interest Yields Earned & Rates Paid. (dollars in thousands) Q4'2020 Average Income/ Yield (a) / Volume Expense Rate (a) Interest & Fee Income Earned Total Earning Assets (FTE) $6,156,749 $43,773 2.84 % Total Loans (FTE) 1,286,480 15,103 4.67 % Total Commercial Loans (FTE) 426,564 4,459 4.16 % PPP Loans 227,828 2,342 4.08 % Commercial Loans (FTE) 198,736 2,117 4.24 % Commercial RE Loans 561,394 7,288 5.16 % Consumer Loans 298,522 3,356 4.47 % Total Investments (FTE) 4,430,592 28,558 2.58 % Total Interest-Bearing Cash 439,677 112 0.10 % Interest Expense Paid Total Earning Assets 6,156,749 481 0.03 % Total Interest-Bearing Liabilities 3,034,240 481 0.06 % Total Interest-Bearing Deposits 2,919,420 462 0.06 % Interest-Bearing Transaction 1,071,576 90 0.03 % Savings 1,688,031 246 0.06 % Time less than $100K 88,507 45 0.20 % Time greater than $100K 71,306 81 0.45 % Total Short-Term Borrowings 114,820 19 0.07 % Net Interest Income and Margin (FTE) $43,292 2.81 % Q4'2019 Average Income/ Yield (a) / Volume Expense Rate (a) Interest & Fee Income Earned Total Earning Assets (FTE) $5,243,783 $40,932 3.11 % Total Loans (FTE) 1,116,446 14,206 5.05 % Commercial Loans (FTE) 219,710 2,821 5.09 % Commercial RE Loans 568,892 7,748 5.40 % Consumer Loans 327,844 3,637 4.41 % Total Investments (FTE) 3,792,781 25,330 2.67 % Total Interest-Bearing Cash 334,556 1,396 1.63 % Interest Expense Paid Total Earning Assets 5,243,783 451 0.03 % Total Interest-Bearing Liabilities 2,599,703 451 0.07 % Total Interest-Bearing Deposits 2,559,937 444 0.07 % Interest-Bearing Transaction 922,772 89 0.04 % Savings 1,464,206 215 0.06 % Time less than $100K 97,645 60 0.24 % Time greater than $100K 75,314 80 0.42 % Total Short-Term Borrowings 39,766 7 0.08 % Net Interest Income and Margin (FTE) $40,481 3.08 % 6. Noninterest Income. (dollars in thousands except per-share amounts) % Q4'2020 Q4'2019 Change Q3'2020 Service Charges on Deposits $3,452 $4,374 -21.1 % $3,298 Merchant Processing Services 2,713 2,424 11.9 % 2,860 Debit Card Fees 1,643 1,568 4.8 % 1,611 Trust Fees 765 764 0.1 % 756 ATM Processing Fees 570 696 -18.1 % 606 Other Service Fees 457 513 -10.9 % 454 Financial Services Commissions 66 122 -45.9 % 58 Gains on Sales of Real Property 3,536 - n/m - Securities Gains - 167 n/m - Other Operating 757 1,104 -31.4 % 833 Total Noninterest Income $13,959 $11,732 19.0 % $10,476 Total Revenue (FTE) $57,251 $52,213 9.6 % $52,256 Noninterest Income/Revenue (FTE) 24.4 % 22.5 % 20.0 % Service Charges/Avg. Deposits (a) 0.24 % 0.36 % 0.24 % Total Revenues (FTE) Per Avg. Common Share (a) $8.49 $7.66 10.9 % $7.72 % 12/31'20YTD 12/31'19YTD Change Service Charges on Deposits $14,149 $17,882 -20.9 % Merchant Processing Services 10,208 10,132 0.8 % Debit Card Fees 6,181 6,357 -2.8 % Trust Fees 3,012 2,963 1.6 % ATM Processing Fees 2,273 2,776 -18.1 % Other Service Fees 1,837 2,255 -18.5 % Financial Services Commissions 372 392 -5.1 % Gains on Sales of Real Property 3,536 - n/m Life Insurance Gains - 433 n/m Securities Gains 71 217 n/m Other Operating (6) 3,998 4,001 -0.1 % Total Noninterest Income $45,637 $47,408 -3.7 % Total Revenue (FTE) $213,319 $208,814 2.2 % Noninterest Income/Revenue (FTE) 21.4 % 22.7 % Service Charges/Avg. Deposits 0.27 % 0.37 % Total Revenues (FTE) Per Avg./ Common Share $7.92 $7.75 2.2 % 7. Noninterest Expense. (dollars in thousands) % Q4'2020 Q4'2019 Change Q3'2020 Salaries & Benefits $12,291 $12,297 0.0 % $12,540 Occupancy and Equipment 4,900 5,077 -3.5 % 5,014 Outsourced Data Processing 2,359 2,361 -0.1 % 2,338 Professional Fees 722 674 7.1 % 669 Courier Service 502 529 -5.1 % 500 Amortization of Identifiable Intangibles 69 73 -5.5 % 72 Other Operating 3,702 3,198 15.8 % 3,470 Total Noninterest Expense $24,545 $24,209 1.4 % $24,603 Noninterest Expense/ Avg. Earning Assets (a) 1.59 % 1.83 % 1.63 % Noninterest Expense/Revenues (FTE) 42.9 % 46.4 % 47.1 % % 12/31'20YTD 12/31'19YTD Change Salaries & Benefits $50,749 $51,054 -0.6 % Occupancy and Equipment 19,637 20,240 -3.0 % Outsourced Data Processing 9,426 9,471 -0.5 % Professional Fees 2,423 2,465 -1.7 % Courier Service 2,001 1,878 6.5 % Amortization of Identifiable Intangibles 287 538 -46.7 % Loss Contingency (1) - 553 n/m Other Operating 14,043 12,787 9.8 % Total Noninterest Expense $98,566 $98,986 -0.4 % Noninterest Expense/ Avg. Earning Assets 1.71 % 1.91 % Noninterest Expense/Revenues (FTE) 46.2 % 47.4 % 8. Allowance for Credit Losses. (dollars in thousands) % Q4'2020 Q4'2019 Change Q3'2020 Average Total Loans $1,286,480 $1,116,446 15.2 % $1,312,758 Beginning of Period Allowance for Credit Losses on Loans (ACLL) $24,142 $19,828 21.8 % $24,529 Provision for Credit Losses 7 - n/m - Net ACLL Losses (295 ) (344 ) -14.2 % (387 ) End of Period ACLL $23,854 $19,484 22.4 % $24,142 Gross ACLL Recoveries / Gross ACLL Losses 69 % 71 % 56 % Net ACLL Losses / Avg. Total Loans (a) 0.09 % 0.12 % 0.12 % % 12/31'20YTD 12/31'19YTD Change Average Total Loans $1,239,144 $1,161,779 6.7 % Prior Period Allowance for Credit Losses on Loans (ACLL) $19,484 $21,351 -8.7 % Adoption of ASU 2016-13(2) 2,017 - n/m Beginning of Period ACLL 21,501 21,351 0.7 % Provision for Credit Losses 4,307 - n/m Net ACLL Losses (1,954 ) (1,867 ) 4.7 % End of Period ACLL $23,854 $19,484 22.4 % Gross ACLL Recoveries / Gross ACLL Losses 53 % 59 % Net ACLL Losses / Avg. Total Loans 0.16 % 0.16 % (dollars in thousands) % 12/31/20 12/31/19 Change 9/30/20 Allowance for Credit Losses on Loans $23,854 $19,484 22.4 % $24,142 Allowance for Credit Losses on HTM Securities (3) 9 - n/m 16 Total Allowance for Credit Losses $23,863 $19,484 22.5 % $24,158 Allowance for Unfunded Credit Commitments 101 2,160 -95.3 % 53 9. Credit Quality. (dollars in thousands) % 12/31/20 12/31/19 Change 9/30/20 Nonperforming Loans: Nonperforming Nonaccrual $526 $659 -20.2 % $409 Performing Nonaccrual 3,803 3,781 0.6 % 3,971 Total Nonaccrual Loans 4,329 4,440 -2.5 % 4,380 90+ Days Past Due Accruing Loans 450 440 2.3 % 360 Total 4,779 4,880 -2.1 % 4,740 Repossessed Loan Collateral - 43 -100.0 % 43 Total Nonperforming Assets $4,779 $4,923 -2.9 % $4,783 Total Loans Outstanding $1,256,243 $1,126,664 11.5 % $1,310,009 Total Assets $6,747,931 $5,619,555 20.1 % $6,563,215 Loans: Allowance for Credit Losses on Loans $23,854 $19,484 22.4 % $24,142 Allowance for Credit Losses on Loans / Loans 1.90 % 1.73 % 1.84 % Nonperforming Loans/Total Loans 0.38 % 0.43 % 0.36 % 10. Capital. (in thousands, except per-share amounts) % 12/31/20 12/31/19 Change 9/30/20 Shareholders' Equity $844,809 $731,417 15.5 % $825,576 Total Assets 6,747,931 5,619,555 20.1 % 6,563,215 Shareholders' Equity/ Total Assets 12.52 % 13.02 % 12.58 % Shareholders' Equity/ Total Loans 67.25 % 64.92 % 63.02 % Tangible Common Equity Ratio 10.90 % 11.07 % 10.91 % Common Shares Outstanding 26,807 27,062 -0.9 % 26,898 Common Equity Per Share $31.51 $27.03 16.6 % $30.69 Market Value Per Common Share 55.29 67.77 -18.4 % 54.35 Share Repurchase Programs (shares in thousands) % Q4'2020 Q4'2019 Change Q3'2020 Total Shares Repurchased 91 - n/m 35 Average Repurchase Price $ 52.22 $- n/m $52.42 Net Shares Repurchased (Issued) 91 (48 ) n/m 35 % 12/31'20YTD 12/31'19YTD Change Total Shares Repurchased 319 8 n/m Average Repurchase Price $51.63 $61.98 n/m Net Shares Repurchased ( Issued) 255 (332 ) n/m 11. Period-End Balance Sheets. (unaudited, dollars in thousands) % 12/31/20 12/31/19 Change 9/30/20 Assets: Cash and Due from Banks $621,275 $373,421 66.4 % $398,964 Investment Securities: Debt Securities Available For Sale 4,063,185 3,078,846 32.0 % 3,983,994 Debt Securities Held To Maturity (4) 515,589 738,072 -30.1 % 577,795 Loans 1,256,243 1,126,664 11.5 % 1,310,009 Allowance For Credit Losses on Loans (23,854 ) (19,484 ) 22.4 % (24,142 ) Total Loans, net 1,232,389 1,107,180 11.3 % 1,285,867 Other Real Estate Owned - 43 -100.0 % 43 Premises and Equipment, net 32,813 34,597 -5.2 % 33,437 Identifiable Intangibles, net 1,104 1,391 -20.6 % 1,173 Goodwill 121,673 121,673 0.0 % 121,673 Other Assets 159,903 164,332 -2.7 % 160,269 Total Assets $6,747,931 $5,619,555 20.1 % $6,563,215 Liabilities and Shareholders' Equity: Deposits: Noninterest-Bearing $2,725,177 $2,240,112 21.7 % $2,684,028 Interest-Bearing Transaction 1,102,601 931,888 18.3 % 1,040,712 Savings 1,703,812 1,471,284 15.8 % 1,653,000 Time 156,389 169,337 -7.6 % 161,450 Total Deposits 5,687,979 4,812,621 18.2 % 5,539,190 Short-Term Borrowed Funds 102,545 30,928 231.6 % 107,973 Other Liabilities 112,598 44,589 152.5 % 90,476 Total Liabilities 5,903,122 4,888,138 20.8 % 5,737,639 Shareholders' Equity: Common Equity: Paid-In Capital 466,041 466,231 0.0 % 467,236 Accumulated Other Comprehensive Income 114,412 26,051 n/m 103,623 Retained Earnings 264,356 239,135 10.5 % 254,717 Total Shareholders' Equity 844,809 731,417 15.5 % 825,576 Total Liabilities and Shareholders' Equity $6,747,931 $5,619,555 20.1 % $6,563,215 12. Income Statements. (unaudited, in thousands except per-share amounts) % Q4'2020 Q4'2019 Change Q3'2020 Interest & Fee Income: Loans $14,999 $14,103 6.4 % $15,291 Investment Securities: Equity Securities 110 103 6.9 % 103 Debt Securities Available For Sale (5) 24,947 20,067 24.3 % 22,652 Debt Securities Held To Maturity 2,793 4,209 -33.6 % 3,235 Interest-Bearing Cash 112 1,396 -92.0 % 84 Total Interest & Fee Income 42,961 39,878 7.7 % 41,365 Interest Expense: Transaction Deposits 90 89 1.3 % 85 Savings Deposits 246 215 14.5 % 238 Time Deposits 126 140 -10.1 % 127 Short-Term Borrowed Funds 19 7 170.9 % 16 Total Interest Expense 481 451 6.7 % 466 Net Interest Income 42,480 39,427 7.7 % 40,899 Provision for Credit Losses - - n/m - Noninterest Income: Service Charges 3,452 4,374 -21.1 % 3,298 Merchant Processing Services 2,713 2,424 11.9 % 2,860 Debit Card Fees 1,643 1,568 4.7 % 1,611 Trust Fees 765 764 0.0 % 756 ATM Processing Fees 570 696 -18.1 % 606 Other Service Fees 457 513 -10.9 % 454 Financial Services Commissions 66 122 -45.9 % 58 Gains on Sales of Real Property 3,536 - n/m - Securities Gains - 167 n/m - Other Operating 757 1,104 -31.4 % 833 Total Noninterest Income 13,959 11,732 19.0 % 10,476 Noninterest Expense: Salaries and Benefits 12,291 12,297 0.0 % 12,540 Occupancy and Equipment 4,900 5,077 -3.5 % 5,014 Outsourced Data Processing 2,359 2,361 -0.1 % 2,338 Professional Fees 722 674 7.1 % 669 Courier Service 502 529 -5.1 % 500 Amortization of Identifiable Intangibles 69 73 -5.5 % 72 Other Operating 3,702 3,198 15.8 % 3,470 Total Noninterest Expense 24,545 24,209 1.4 % 24,603 Income Before Income Taxes 31,894 26,950 18.3 % 26,772 Income Tax Provision 8,056 6,222 29.5 % 6,721 Net Income $23,838 $20,728 15.0 % $20,051 Average Common Shares Outstanding 26,838 27,050 -0.8 % 26,930 Diluted Common Shares Outstanding 26,849 27,094 -0.9 % 26,946 Per Common Share Data: Basic Earnings $0.89 $0.77 15.6 % $0.74 Diluted Earnings 0.89 0.77 15.6 % 0.74 Dividends Paid 0.41 0.41 0.0 % 0.41 % 12/31'20YTD 12/31'19YTD Change Interest & Fee Income: Loans $59,377 $58,153 2.1 % Investment Securities: Equity Securities 419 392 6.9 % Debt Securities Available For Sale (5) 91,343 74,147 23.2 % Debt Securities Held To Maturity 13,552 18,997 -28.7 % Interest-Bearing Cash 1,165 6,993 -83.3 % Total Interest & Fee Income 165,856 158,682 4.5 % Interest Expense: Transaction Deposits 333 422 -21.1 % Savings Deposits 925 852 8.5 % Time Deposits 512 580 -11.8 % Short-Term Borrowed Funds 53 34 55.9 % Other Borrowed Funds 1 - n/m Total Interest Expense 1,824 1,888 -3.4 % Net Interest Income 164,032 156,794 4.6 % Provision for Credit Losses 4,300 - n/m Noninterest Income: Service Charges 14,149 17,882 -20.9 % Merchant Processing Services 10,208 10,132 0.8 % Debit Card Fees 6,181 6,357 -2.8 % Trust Fees 3,012 2,963 1.6 % ATM Processing Fees 2,273 2,776 -18.1 % Other Service Fees 1,837 2,255 -18.5 % Financial Services Commissions 372 392 -5.1 % Gains on Sales of Real Property 3,536 - n/m Life Insurance Gains - 433 n/m Securities Gains 71 217 n/m Other Operating (6) 3,998 4,001 -0.1 % Total Noninterest Income 45,637 47,408 -3.7 % Noninterest Expense: Salaries and Benefits 50,749 51,054 -0.6 % Occupancy and Equipment 19,637 20,240 -3.0 % Outsourced Data Processing 9,426 9,471 -0.5 % Professional Fees 2,423 2,465 -1.7 % Courier Service 2,001 1,878 6.5 % Amortization of Identifiable Intangibles 287 538 -46.7 % Loss Contingency (1) - 553 n/m Other Operating 14,043 12,787 9.8 % Total Noninterest Expense 98,566 98,986 -0.4 % Income Before Income Taxes 106,803 105,216 1.5 % Income Tax Provision 26,390 24,827 6.3 % Net Income $80,413 $80,389 0.0 % Average Common Shares Outstanding 26,942 26,956 0.0 % Diluted Common Shares Outstanding 26,960 27,006 -0.2 % Per Common Share Data: Basic Earnings $2.98 $2.98 0.0 % Diluted Earnings 2.98 2.98 0.0 % Dividends Paid 1.64 1.63 0.6 % Footnotes and Abbreviations: (1) In 2019, the Company recorded a $301 thousand increase in estimated customer refunds of revenue recognized prior to 2018 and a $252 thousand loss settlement to dismiss a lawsuit. (2) Effective January 1, 2020, the Company adopted Accounting Standards Update (ASU) 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments ("CECL"), resulting in a period opening adjustment to the allowance for credit losses for loans and held-to-maturity debt securities, other liabilities, deferred tax assets, and shareholders' equity. (3) In the fourth quarter 2020, the Company recorded a $7 thousand reversal of provision for credit losses on Debt Securities Held To Maturity and the balance of the allowance for credit losses on Debt Securities Held To Maturity was reduced from $16 thousand at September 30, 2020 to $9 thousand at December 31, 2020. (4) The Company adopted ASU 2016-13, effective January 1, 2020. Debt Securities Held To Maturity of $515,589 thousand at December 31, 2020 and $577,795 thousand at September 30, 2020 are net of related reserve for expected credit losses of $9 thousand and $16 thousand, respectively. (5) Interest income on Debt Securities Available For Sale included make-whole interest income on called corporate bonds of $1.9 million in the fourth quarter 2020. (6) The Company received $603 thousand in excess of amounts charged-off in prior periods on a purchased loan during the first quarter 2020, representing the recovery of a purchased loan credit-risk discount. (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. 