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Westamerica Bancorporation Reports Second Quarter 2022 Financial Results
Source: Nasdaq GlobeNewswire / 21 Jul 2022 09:47:24 America/Chicago
SAN RAFAEL, Calif., July 21, 2022 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the second quarter 2022 of $25.3 million and diluted earnings per common share (“EPS”) of $0.94. Second quarter 2022 results compare to net income of $22.6 million and EPS of $0.84 for the first quarter 2022.
“Westamerica’s second quarter 2022 results benefited from the Company’s variable-rate bonds, cash and loans, a valuable deposit base with ninety-eight percent of deposits represented by checking and savings deposits, and well controlled operating expenses. Credit quality remained solid with nonperforming loans of $861 thousand at June 30, 2022,” said Chairman, President and CEO David Payne. “Second quarter 2022 results generated an annualized 12.9% return on average common equity. Shareholders were paid a $0.42 per common share dividend during the second quarter 2022,” concluded Payne.
Net interest income on a fully-taxable equivalent (FTE) basis was $48.0 million for the second quarter 2022, compared to $43.8 million for the first quarter 2022. Interest income on Paycheck Protection Program (“PPP”) loans was $645 thousand for the second quarter 2022, compared to $849 thousand first quarter 2022.
Variable rate assets at June 30, 2022 included $1.6 billion in collateralized loan obligations for which interest rates reset quarterly, and $640 million in interest-bearing cash balances for which the interest rate changes concurrently with Federal Open Market Committee adjustments to the federal funds rate.
At June 30, 2022, nonperforming loans totaled $861 thousand and the allowance for credit losses on loans was $22.3 million.
Noninterest income for the second quarter 2022 totaled $11.3 million, compared to noninterest income for the first quarter 2022 of $11.6 million. Noninterest income for the first quarter 2022 included a $1.2 million reconciling payment from a payments network. Merchant card processing fees increased $751 thousand from the first quarter 2022 to the second quarter 2022.
Noninterest expenses for the second quarter 2022 were $24.6 million compared to $24.9 million for the first quarter 2022; the decline in noninterest expenses was primarily due to lower personnel salaries and benefits.
The fully-tax equivalent (FTE) tax rate for the second quarter 2022 was 27.0%, compared to 25.9% for the first quarter 2022; the higher second quarter tax rate is attributable to the increase in income before taxes without a proportional increase in tax preference items such as tax-exempt interest and tax credits.
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 March 31, 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.
Public Information July 21, 2022 WESTAMERICA BANCORPORATION FINANCIAL HIGHLIGHTS June 30, 2022 1. Net Income Summary. (in thousands except per-share amounts) % Q2'2022 Q2'2021 Change Q1'2022 Net Interest and Fee Income (FTE) $ 48,033 $ 44,499 7.9 % $ 43,807 Provision for Credit Losses - - n/m - Noninterest Income (1) 11,264 11,032 2.1 % 11,576 Noninterest Expense 24,629 24,291 1.4 % 24,875 Income Before Taxes (FTE) 34,668 31,240 11.0 % 30,508 Income Tax Provision (FTE) 9,354 8,661 8.0 % 7,892 Net Income $ 25,314 $ 22,579 12.1 % $ 22,616 Average Common Shares Outstanding 26,889 26,865 0.1 % 26,870 Diluted Average Common Shares 26,901 26,887 0.1 % 26,885 Operating Ratios: Basic Earnings Per Common Share $ 0.94 $ 0.84 11.9 % $ 0.84 Diluted Earnings Per Common Share 0.94 0.84 11.9 % 0.84 Return On Assets (a) 1.37 % 1.29 % 1.24 % Return On Common Equity (a) 12.9 % 12.2 % 11.8 % Net Interest Margin (FTE) (a) 2.74 % 2.70 % 2.51 % Efficiency Ratio (FTE) 41.5 % 43.7 % 44.9 % Dividends Paid Per Common Share $ 0.42 $ 0.41 2.4 % $ 0.42 Common Dividend Payout Ratio 45 % 49 % 50 % % 6/30'22YTD 6/30'21YTD Change Net Interest and Fee Income (FTE) $ 91,840 $ 87,082 5.5 % Provision for Credit Losses - - n/m Noninterest Income (1) 22,840 21,221 7.6 % Noninterest Expense 49,504 49,197 0.6 % Income Before Taxes (FTE) 65,176 59,106 10.3 % Income Tax Provision (FTE) 17,246 16,380 5.3 % Net Income $ 47,930 $ 42,726 12.2 % Average Common Shares Outstanding 26,880 26,843 0.1 % Diluted Average Common Shares 26,893 26,865 0.1 % Operating Ratios: Basic Earnings Per Common Share $ 1.78 $ 1.59 11.9 % Diluted Earnings Per Common Share 1.78 1.59 11.9 % Return On Assets 1.30 % 1.26 % Return On Common Equity 12.4 % 11.6 % Net Interest Margin (FTE) 2.63 % 2.72 % Efficiency Ratio (FTE) 43.2 % 45.4 % Dividends Paid Per Common Share $ 0.84 $ 0.82 2.4 % Common Dividend Payout Ratio 47 % 52 % 2. Net Interest Income. (dollars in thousands) % Q2'2022 Q2'2021 Change Q1'2022 Interest and Fee Income (FTE) $ 48,516 $ 44,983 7.9 % $ 44,287 Interest Expense 483 484 -0.2 % 480 Net Interest and Fee Income (FTE) $ 48,033 $ 44,499 7.9 % $ 43,807 Average Earning Assets $ 7,000,862 $ 6,603,343 6.0 % $ 6,998,234 Average Interest- Bearing Liabilities 3,549,140 3,298,221 7.6 % 3,546,146 Yield on Earning Assets (FTE) (a) 2.77 % 2.73 % 2.54 % Cost of Funds (a) 0.03 % 0.03 % 0.03 % Net Interest Margin (FTE) (a) 2.74 % 2.70 % 2.51 % Interest Expense/ Interest-Bearing Liabilities (a) 0.05 % 0.06 % 0.05 % Net Interest Spread (FTE) (a) 2.72 % 2.67 % 2.49 % % 6/30'22YTD 6/30'21YTD Change Interest and Fee Income (FTE) $ 92,803 $ 88,041 5.4 % Interest Expense 963 959 0.4 % Net Interest and Fee Income (FTE) $ 91,840 $ 87,082 5.5 % Average Earning Assets $ 6,999,556 $ 6,424,973 8.9 % Average Interest- Bearing Liabilities 3,547,651 3,214,688 10.4 % Yield on Earning Assets (FTE) 2.66 % 2.75 % Cost of Funds 0.03 % 0.03 % Net Interest Margin (FTE) 2.63 % 2.72 % Interest Expense/ Interest-Bearing Liabilities 0.05 % 0.06 % Net Interest Spread (FTE) 2.61 % 2.69 % 3. Loans & Other Earning Assets. (average volume, dollars in thousands) % Q2'2022 Q2'2021 Change Q1'2022 Total Assets $ 7,420,069 $ 7,004,695 5.9 % $ 7,406,321 Total Earning Assets 7,000,862 6,603,343 6.0 % 6,998,234 Total Loans 1,009,633 1,257,087 -19.7 % 1,029,724 Total Commercial Loans 202,585 413,797 -51.0 % 207,901 Paycheck Protection Program (PPP) Loans 20,997 207,515 -89.9 % 35,871 Commercial Loans 181,588 206,282 -12.0 % 172,030 Commercial RE Loans 508,003 546,470 -7.0 % 524,040 Consumer Loans 299,045 296,820 0.7 % 297,783 Total Investment Securities 5,008,929 4,394,169 14.0 % 4,947,846 Debt Securities Available For Sale 4,721,083 3,953,016 19.4 % 4,655,983 Debt Securities Held To Maturity 287,846 441,153 -34.8 % 291,863 Total Interest-Bearing Cash 982,300 952,087 3.2 % 1,020,664 Loans/Deposits 15.7 % 20.7 % 16.1 % % 6/30'22YTD 6/30'21YTD Change Total Assets $ 7,413,233 $ 6,828,409 8.6 % Total Earning Assets 6,999,556 6,424,973 8.9 % Total Loans 1,019,623 1,254,328 -18.7 % Total Commercial Loans 205,228 404,685 -49.3 % PPP Loans 28,393 198,294 -85.7 % Commercial Loans 176,835 206,391 -14.3 % Commercial RE Loans 515,977 552,795 -6.7 % Consumer Loans 298,418 296,848 0.5 % Total Investment Securities 4,978,557 4,417,267 12.7 % Debt Securities Available For Sale 4,688,714 3,950,298 18.7 % Debt Securities Held To Maturity 289,843 466,969 -37.9 % Total Interest-Bearing Cash 1,001,376 753,378 32.9 % Loans/Deposits 15.9 % 21.2 % 4. Deposits, Other Interest-Bearing Liabilities & Equity. (average volume, dollars in thousands) % Q2'2022 Q2'2021 Change Q1'2022 Total Deposits $ 6,424,202 $ 6,074,730 5.8 % $ 6,393,458 Noninterest Demand 2,998,360 2,888,259 3.8 % 3,005,065 Interest-Bearing Transaction 1,298,665 1,208,584 7.5 % 1,265,100 Savings 1,985,325 1,822,625 8.9 % 1,980,092 Time greater than $100K 63,790 70,750 -9.8 % 64,172 Time less than $100K 78,062 84,512 -7.6 % 79,029 Total Short-Term Borrowings 123,298 111,750 10.3 % 157,753 Shareholders' Equity 788,078 744,746 5.8 % 776,225 Demand Deposits/ Total Deposits 46.7 % 47.5 % 47.0 % Transaction & Savings Deposits / Total Deposits 97.8 % 97.4 % 97.8 % % 6/30'22YTD 6/30'21YTD Change Total Deposits $ 6,408,915 $ 5,912,303 8.4 % Noninterest Demand 3,001,694 2,801,428 7.1 % Interest-Bearing Transaction 1,281,975 1,169,888 9.6 % Savings 1,982,723 1,784,929 11.1 % Time greater than $100K 63,980 70,994 -9.9 % Time less than $100K 78,543 85,064 -7.7 % Total Short-Term Borrowings 140,430 103,707 35.4 % Other Borrowed Funds - 106 -100.0 % Shareholders' Equity 782,184 740,147 5.7 % Demand Deposits/ Total Deposits 46.8 % 47.4 % Transaction & Savings Deposits / Total Deposits 97.8 % 97.4 % 5. Interest Yields Earned & Rates Paid. (dollars in thousands) Q2'2022 Average Income/ Yield (a) / Volume Expense Rate (a) Interest & Fee Income Earned Total Earning Assets (FTE) $ 7,000,862 $ 48,516 2.77 % Total Loans (FTE) 1,009,633 12,426 4.94 % Total Commercial Loans (FTE) 202,585 2,716 5.38 % PPP Loans 20,997 645 12.32 % Commercial Loans (FTE) 181,588 2,071 4.57 % Commercial RE Loans 508,003 6,192 4.89 % Consumer Loans 299,045 3,518 4.72 % Total Investments (FTE) 5,008,929 34,088 2.72 % Total Debt Securities Available For Sale (FTE) 4,721,083 32,059 2.72 % Corporate Securities 2,589,490 17,857 2.76 % Collateralized Loan Obligations 1,610,811 10,572 2.60 % Agency Mortgage Backed Securities 357,727 2,049 2.29 % Securities OF U.S. Government sponsored entities 59,892 533 3.56 % Obligations of States and Political Subdivisions (FTE) 88,829 682 3.07 % Other Debt Securities Available For Sale (FTE) 14,334 366 10.23 % Total Debt Securities Held To Maturity (FTE) 287,846 2,029 2.82 % Agency Mortgage Backed Securities 128,319 595 1.85 % Corporate Securities 17,749 202 4.56 % Obligations of States and Political Subdivisions (FTE) 141,778 1,232 3.48 % Total Interest-Bearing Cash 982,300 2,002 0.81 % Interest Expense Paid Total Earning Assets 7,000,862 483 0.03 % Total Interest-Bearing Liabilities 3,549,140 483 0.05 % Total Interest-Bearing Deposits 3,425,842 461 0.05 % Interest-Bearing Transaction 1,298,665 91 0.03 % Savings 1,985,325 288 0.06 % Time less than $100K 78,062 42 0.22 % Time greater than $100K 63,790 40 0.25 % Total Short-Term Borrowings 123,298 22 0.07 % Net Interest Income and Margin (FTE) $ 48,033 2.74 % Q2'2021 Average Income/ Yield (a) / Volume Expense Rate (a) Interest & Fee Income Earned Total Earning Assets (FTE) $ 6,603,343 $ 44,983 2.73 % Total Loans (FTE) 1,257,087 15,168 4.84 % Total Commercial Loans (FTE) 413,797 4,763 4.62 % PPP Loans 207,515 2,713 5.25 % Commercial Loans (FTE) 206,282 2,050 3.98 % Commercial RE Loans 546,470 6,994 5.13 % Consumer Loans 296,820 3,411 4.61 % Total Investments (FTE) 4,394,169 29,556 2.69 % Total Debt Securities Available For Sale (FTE) 3,953,016 26,779 2.71 % Corporate Securities 2,289,882 17,564 3.07 % Collateralized Loan Obligations 1,020,187 5,646 2.19 % Agency Mortgage Backed Securities 526,958 2,409 1.83 % Securities OF U.S. Government sponsored entities 0 0 0.00 % Obligations of States and Political Subdivisions (FTE) 101,619 812 3.19 % Other Debt Securities Available For Sale (FTE) 14,370 348 9.70 % Total Debt Securities Held To Maturity (FTE) 441,153 2,777 2.52 % Agency Mortgage Backed Securities 201,703 793 1.57 % Corporate Securities 0 0 0.00 % Obligations of States and Political Subdivisions (FTE) 239,450 1,984 3.32 % Total Interest-Bearing Cash 952,087 259 0.11 % Interest Expense Paid Total Earning Assets 6,603,343 484 0.03 % Total Interest-Bearing Liabilities 3,298,221 484 0.06 % Total Interest-Bearing Deposits 3,186,471 466 0.06 % Interest-Bearing Transaction 1,208,584 93 0.03 % Savings 1,822,625 263 0.06 % Time less than $100K 84,512 42 0.20 % Time greater than $100K 70,750 68 0.39 % Total Short-Term Borrowings 111,750 18 0.07 % Net Interest Income and Margin (FTE) $ 44,499 2.70 % 6. Noninterest Income. (dollars in thousands except per-share amounts) % Q2'2022 Q2'2021 Change Q1'2022 Service Charges on Deposits $ 3,687 $ 3,235 14.0 % $ 3,582 Merchant Processing Services 3,374 3,279 2.9 % 2,623 Debit Card Fees (1) 1,709 1,791 -4.6 % 2,872 Trust Fees 809 827 -2.2 % 843 ATM Processing Fees 469 618 -24.1 % 451 Other Service Fees 480 491 -2.3 % 449 Financial Services Commissions 118 95 24.2 % 117 Securities Gains - 34 n/m - Other Noninterest Income 618 662 -6.6 % 639 Total Noninterest Income $ 11,264 $ 11,032 2.1 % $ 11,576 Total Revenue (FTE) $ 59,297 $ 55,531 6.8 % $ 55,383 Noninterest Income/Revenue (FTE) 19.0 % 19.9 % 20.9 % Service Charges/Avg. Deposits (a) 0.23 % 0.21 % 0.23 % Total Revenues (FTE) Per Avg. Common Share (a) $ 8.85 $ 8.29 6.7 % $ 8.36 Life Insurance Gains % 6/30'22YTD 6/30'21YTD Change Service Charges on Deposits $ 7,269 $ 6,539 11.2 % Merchant Processing Services 5,997 5,839 2.7 % Debit Card Fees (1) 4,581 3,392 35.1 % Trust Fees 1,652 1,628 1.5 % ATM Processing Fees 920 1,219 -24.6 % Other Service Fees 929 960 -3.2 % Financial Services Commissions 235 165 42.4 % Securities Gains - 34 n/m Other Noninterest Income 1,257 1,445 -13.0 % Total Noninterest Income $ 22,840 $ 21,221 7.6 % Total Revenue (FTE) $ 114,680 $ 108,303 5.9 % Noninterest Income/Revenue (FTE) 19.9 % 19.6 % Service Charges/Avg. Deposits 0.23 % 0.22 % Total Revenues (FTE) Per Avg./ Common Share $ 8.60 $ 8.14 5.7 % 7. Noninterest Expense. (dollars in thousands) % Q2'2022 Q2'2021 Change Q1'2022 Salaries & Benefits $ 11,412 $ 12,097 -5.7 % $ 11,920 Occupancy and Equipment 4,856 4,808 1.0 % 4,746 Outsourced Data Processing 2,423 2,425 -0.1 % 2,437 Professional Fees 736 830 -11.3 % 736 Courier Service 661 567 16.6 % 582 Amortization of Identifiable Intangibles 64 68 -5.9 % 64 Other Noninterest Expense 4,477 3,496 28.1 % 4,390 Total Noninterest Expense $ 24,629 $ 24,291 1.4 % $ 24,875 Noninterest Expense/ Avg. Earning Assets (a) 1.41 % 1.48 % 1.44 % Noninterest Expense/Revenues (FTE) 41.5 % 43.7 % 44.9 % % 6/30'22YTD 6/30'21YTD Change Salaries & Benefits $ 23,332 $ 24,762 -5.8 % Occupancy and Equipment 9,602 9,688 -0.9 % Outsourced Data Processing 4,860 4,815 0.9 % Professional Fees 1,472 1,772 -16.9 % Courier Service 1,243 1,071 16.1 % Amortization of Identifiable Intangibles 128 137 -6.6 % Other Noninterest Expense 8,867 6,952 27.5 % Total Noninterest Expense $ 49,504 $ 49,197 0.6 % Noninterest Expense/ Avg. Earning Assets 1.43 % 1.54 % Noninterest Expense/Revenues (FTE) 43.2 % 45.4 % 8. Allowance for Credit Losses. (dollars in thousands) % Q2'2022 Q2'2021 Change Q1'2022 Average Total Loans $ 1,009,633 $ 1,257,087 -19.7 % $ 1,029,724 Beginning of Period Allowance for Credit Losses on Loans (ACLL) $ 22,925 $ 23,483 -2.4 % $ 23,514 Provision for Credit Losses - - n/m - Net ACLL (Losses) Recoveries (612 ) 254 -340.9 % (589 ) End of Period ACLL $ 22,313 $ 23,737 -6.0 % $ 22,925 Gross ACLL Recoveries / Gross ACLL Losses 57 % 176 % 51 % Net ACLL Losses (Recoveries) / Avg. Total Loans (a) 0.24 % -0.08 % 0.23 % % 6/30'22YTD 6/30'21YTD Change Average Total Loans $ 1,019,623 $ 1,254,328 -18.7 % Beginning of Period ACLL $ 23,514 $ 23,854 -1.4 % Provision for Credit Losses - - n/m Net ACLL Losses (1,201 ) (117 ) 926.5 % End of Period ACLL $ 22,313 $ 23,737 -6.0 % Gross ACLL Recoveries / Gross ACLL Losses 54 % 91 % Net ACLL Losses / Avg. Total Loans 0.24 % 0.02 % (dollars in thousands) % 6/30/22 6/30/21 Change 3/31/22 Allowance for Credit Losses on Loans $ 22,313 $ 23,737 -6.0 % $ 22,925 Allowance for Credit Losses on HTM Securities 7 9 -22.3 % 7 Total Allowance for Credit Losses $ 22,320 $ 23,746 -6.0 % $ 22,932 Allowance for Unfunded Credit Commitments $ 201 $ 101 99.3 % $ 201 9. Credit Quality. (dollars in thousands) % 6/30/22 6/30/21 Change 3/31/22 Nonperforming Loans: Nonperforming Nonaccrual $ 12 $ 652 -98.2 % $ 63 Performing Nonaccrual 235 3,564 -93.4 % 421 Total Nonaccrual Loans 247 4,216 -94.1 % 484 90+ Days Past Due Accruing Loans 614 167 267.7 % 431 Total Nonperforming Loans $ 861 $ 4,383 -80.4 % $ 915 Total Loans Outstanding $ 999,768 $ 1,194,834 -16.3 % $ 1,002,514 Total Assets 7,222,405 7,147,779 1.0 % 7,306,417 Loans: Allowance for Credit Losses on Loans $ 22,313 $ 23,737 -6.0 % $ 22,925 Allowance for Credit Losses on Loans / Loans 2.23 % 1.99 % 2.29 % Nonperforming Loans/Total Loans 0.09 % 0.37 % 0.09 % 10. Capital. (in thousands, except per-share amounts) % 6/30/22 6/30/21 Change 3/31/22 Shareholders' Equity $ 617,126 $ 842,196 -26.7 % $ 701,744 Total Assets 7,222,405 7,147,779 1.0 % 7,306,417 Shareholders' Equity/ Total Assets 8.54 % 11.78 % 9.60 % Shareholders' Equity/ Total Loans 61.73 % 70.49 % 70.00 % Tangible Common Equity Ratio 6.97 % 10.24 % 8.06 % Common Shares Outstanding 26,896 26,865 0.1 % 26,883 Common Equity Per Share $ 22.94 $ 31.35 -26.8 % $ 26.10 Market Value Per Common Share 55.66 58.03 -4.1 % 60.50 (shares in thousands) % Q2'2022 Q2'2021 Change Q1'2022 Share Repurchase Programs: Total Shares Repurchased - - n/m 3 Average Repurchase Price $ - $ - n/m $ 58.66 Net Shares (Issued) (13 ) (1 ) n/m (17 ) % 6/30'22YTD 6/30'21YTD Change Total Shares Repurchased 3 4 n/m Average Repurchase Price $ 58.66 $ 61.09 n/m Net Shares (Issued) (30 ) (58 ) n/m 11. Period-End Balance Sheets. (unaudited, dollars in thousands) % 6/30/22 6/30/21 Change 3/31/22 Assets: Cash and Due from Banks $ 753,293 $ 939,929 -19.9 % $ 1,037,593 Equity Securities - - n/m - Debt Securities Available For Sale Corporate Securities 2,296,853 2,596,850 -11.6 % 2,547,118 Collateralized Loan Obligations 1,601,333 1,092,112 46.6 % 1,616,584 Agency Mortgage Backed Securities 331,425 510,460 -35.1 % 363,181 Securities OF U.S. Government sponsored entities 290,725 - n/m - Obligations of States and Political Subdivisions 86,676 104,603 -17.1 % 89,595 Other Debt Securities Available For Sale 102 137 -25.6 % 110 Total Debt Securities Available For Sale 4,607,114 4,304,162 7.0 % 4,616,588 Debt Securities Held To Maturity Agency Mortgage Backed Securities 121,810 187,901 -35.2 % 133,754 Corporate Securities 181,316 - n/m - Obligations of States and Political Subdivisions (2) 139,228 226,512 -38.5 % 146,766 Total Debt Securities Held To Maturity (2) 442,354 414,413 6.7 % 280,520 Loans 999,768 1,194,834 -16.3 % 1,002,514 Allowance For Credit Losses on Loans (22,313 ) (23,737 ) -6.0 % (22,925 ) Total Loans, net 977,455 1,171,097 -16.5 % 979,589 Premises and Equipment, net 30,309 32,080 -5.5 % 30,626 Identifiable Intangibles, net 707 967 -26.9 % 771 Goodwill 121,673 121,673 0.0 % 121,673 Other Assets 289,500 163,458 77.1 % 239,057 Total Assets $ 7,222,405 $ 7,147,779 1.0 % $ 7,306,417 Liabilities and Shareholders' Equity: Deposits: Noninterest-Bearing $ 2,987,725 $ 2,872,920 4.0 % $ 3,000,268 Interest-Bearing Transaction 1,303,700 1,200,634 8.6 % 1,279,165 Savings 1,983,713 1,849,258 7.3 % 1,984,719 Time 140,453 153,577 -8.5 % 141,722 Total Deposits 6,415,591 6,076,389 5.6 % 6,405,874 Short-Term Borrowed Funds 118,167 90,043 31.2 % 124,442 Other Liabilities 71,521 139,151 -48.6 % 74,357 Total Liabilities 6,605,279 6,305,583 4.8 % 6,604,673 Shareholders' Equity: Common Equity: Paid-In Capital 473,555 470,365 0.7 % 472,470 Accumulated Other Comprehensive (Loss) Income (188,025 ) 86,921 n/m (88,300 ) Retained Earnings 331,596 284,910 16.4 % 317,574 Total Shareholders' Equity 617,126 842,196 -26.7 % 701,744 Total Liabilities and Shareholders' Equity $ 7,222,405 $ 7,147,779 1.0 % $ 7,306,417 12. Income Statements. (unaudited, in thousands except per-share amounts) % Q2'2022 Q2'2021 Change Q1'2022 Interest & Fee Income: Loans $ 12,331 $ 15,064 -18.1 % $ 12,942 Equity Securities 129 110 17.3 % 128 Debt Securities Available For Sale 31,764 26,481 19.9 % 28,566 Debt Securities Held To Maturity 1,771 2,362 -25.0 % 1,644 Interest-Bearing Cash 2,002 259 673.0 % 479 Total Interest & Fee Income 47,997 44,276 8.4 % 43,759 Interest Expense: Transaction Deposits 91 93 -2.2 % 88 Savings Deposits 288 263 9.5 % 283 Time Deposits 82 110 -25.5 % 81 Short-Term Borrowed Funds 22 18 22.2 % 28 Other Borrowed Funds - - n/m - Total Interest Expense 483 484 -0.2 % 480 Net Interest Income 47,514 43,792 8.5 % 43,279 Provision for Credit Losses - - n/m - Noninterest Income: Service Charges 3,687 3,235 14.0 % 3,582 Merchant Processing Services 3,374 3,279 2.9 % 2,623 Debit Card Fees (1) 1,709 1,791 -4.6 % 2,872 Trust Fees 809 827 -2.2 % 843 ATM Processing Fees 469 618 -24.1 % 451 Other Service Fees 480 491 -2.3 % 449 Financial Services Commissions 118 95 24.2 % 117 Securities Gains - 34 n/m - Other Noninterest Income 618 662 -6.6 % 639 Total Noninterest Income 11,264 11,032 2.1 % 11,576 Noninterest Expense: Salaries and Benefits 11,412 12,097 -5.7 % 11,920 Occupancy and Equipment 4,856 4,808 1.0 % 4,746 Outsourced Data Processing 2,423 2,425 -0.1 % 2,437 Professional Fees 736 830 -11.3 % 736 Courier Service 661 567 16.6 % 582 Amortization of Identifiable Intangibles 64 68 -5.9 % 64 Other Noninterest Expense 4,477 3,496 28.1 % 4,390 Total Noninterest Expense 24,629 24,291 1.4 % 24,875 Income Before Income Taxes 34,149 30,533 11.8 % 29,980 Income Tax Provision 8,835 7,954 11.1 % 7,364 Net Income $ 25,314 $ 22,579 12.1 % $ 22,616 Average Common Shares Outstanding 26,889 26,865 0.1 % 26,870 Diluted Common Shares Outstanding 26,901 26,887 0.1 % 26,885 Per Common Share Data: Basic Earnings $ 0.94 $ 0.84 11.9 % $ 0.84 Diluted Earnings 0.94 0.84 11.9 % 0.84 Dividends Paid 0.42 0.41 2.4 % 0.42 % 6/30'22YTD 6/30'21YTD Change Interest & Fee Income: Loans $ 25,273 $ 29,645 -14.7 % Equity Securities 257 220 16.8 % Debt Securities Available For Sale 60,330 51,370 17.4 % Debt Securities Held To Maturity 3,415 4,960 -31.2 % Interest-Bearing Cash 2,481 397 524.9 % Total Interest & Fee Income 91,756 86,592 6.0 % Interest Expense: Transaction Deposits 179 182 -1.6 % Savings Deposits 571 513 11.3 % Time Deposits 163 230 -29.1 % Short-Term Borrowed Funds 50 34 47.1 % Total Interest Expense 963 959 0.4 % Net Interest Income 90,793 85,633 6.0 % Provision for Credit Losses - - n/m Noninterest Income: Service Charges 7,269 6,539 11.2 % Merchant Processing Services 5,997 5,839 2.7 % Debit Card Fees (1) 4,581 3,392 35.1 % Trust Fees 1,652 1,628 1.5 % ATM Processing Fees 920 1,219 -24.6 % Other Service Fees 929 960 -3.2 % Financial Services Commissions 235 165 42.4 % Securities Gains - 34 n/m Other Operating 1,257 1,445 -13.0 % Total Noninterest Income 22,840 21,221 7.6 % Noninterest Expense: Salaries and Benefits 23,332 24,762 -5.8 % Occupancy and Equipment 9,602 9,688 -0.9 % Outsourced Data Processing 4,860 4,815 0.9 % Professional Fees 1,472 1,772 -16.9 % Courier Service 1,243 1,071 16.1 % Amortization of Identifiable Intangibles 128 137 -6.6 % Other Operating 8,867 6,952 27.5 % Total Noninterest Expense 49,504 49,197 0.6 % Income Before Income Taxes 64,129 57,657 11.2 % Income Tax Provision 16,199 14,931 8.5 % Net Income $ 47,930 $ 42,726 12.2 % Average Common Shares Outstanding 26,880 26,843 0.1 % Diluted Common Shares Outstanding 26,893 26,865 0.1 % Per Common Share Data: Basic Earnings $ 1.78 $ 1.59 11.9 % Diluted Earnings 1.78 1.59 11.9 % Dividends Paid 0.84 0.82 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 June 30, 2022 and March 31, 2022, and $9 thousand at June 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. 
