Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
October 17, 2006
----------------
WESTAMERICA BANCORPORATION
--------------------------
(Exact Name of Registrant as Specified in Its Charter)
CALIFORNIA
----------
(State or Other Jurisdiction of Incorporation)
001-9383 94-2156203
-------- ----------
(Commission File Number) (IRS Employer Identification No.)
1108 Fifth Avenue, San Rafael, California 94901
----------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(707) 863-6000
--------------
(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
[] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
[] Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4c))
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Exhibits
---------
99.1 Press release dated October 17, 2006
Item 2.02: Results of Operations and Financial Condition
----------------------------------------------------------
On October 17, 2006 Westamerica Bancorporation announced their
quarterly earnings for the third quarter of 2006. A copy of
the press release is attached as Exhibit 99.1 to this Form 8-K
and is incorporated herein by reference.
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Signatures
Pursuant to the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
Westamerica Bancorporation
/s/ JOHN "ROBERT" THORSON
-------------------------------------------------
John "Robert" Thorson
Senior Vice President and Chief Financial Officer
October 17, 2006
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INDEX TO EXHIBITS
-----------------
Sequentially
Exhibit No. Description Number Page
----------- ------------------------- -------------
(99.1) Press release dated 5-15
October 17, 2006
Page 5
FOR IMMEDIATE RELEASE
October 17, 2006
WESTAMERICA BANCORPORATION REPORTS QUARTERLY EARNINGS
FOR THIRD QUARTER 2006
San Rafael, CA: Westamerica Bancorporation (NASDAQ: WABC), parent company of
Westamerica Bank, today reported net income of $24.2 million for the third
quarter of 2006, compared to $24.5 million for the second quarter of 2006. Third
quarter 2006 diluted earnings per share were $0.77, unchanged from the second
quarter of 2006. Return on average common equity (ROE) for the third quarter of
2006 was 22.7 percent and return on assets (ROA) was 1.98 percent. Third quarter
2005 net income of $28.9 million, or $0.88 diluted earnings per share, includes
a gain on the sale of a facility vacated following the Redwood Empire Bancorp
acquisition and recognition of company owned life insurance proceeds which, on a
combined basis, account for $0.06 diluted earnings per share.
For the first nine months of 2006, net income totaled $74.9 million, compared to
$78.9 million for the same period in 2005. Diluted earnings per share were $2.34
for the first nine months of 2006, compared to $2.39 for the same period in
2005. Results for the first nine months of 2005 include a realized loss on sale
of securities, and gains from the sale of property, and company owned life
insurance proceeds, which, on a combined basis, reduced net income by $100
thousand.
"Results for the third quarter of 2006 include a stabilizing net interest margin
and controlled expense levels," said Chairman, President and CEO David Payne.
"Our 1.52 percent cost of funds reflects the value of our significant
noninterest bearing demand deposits and other low-cost deposits comprising 79
percent of Westamerica's deposit base. Our relatively low cost of funds
supported a 4.54 percent margin for the third quarter 2006. Cost consciousness
throughout the Company has helped reduce our noninterest expenses 3.8 percent in
the first nine months of 2006, compared to the same period last year," added
Payne.
Page 6
Net interest income on a fully taxable equivalent basis was $50.2 million in the
third quarter of 2006 compared to $51.5 million and $56.0 million in the second
quarter of 2006 and the third quarter of 2005, respectively. The third quarter
of 2006 net interest margin (fully taxable equivalent) was 4.54 percent, down
from 4.58 percent and 4.76 percent in the second quarter of 2006 and the third
quarter of 2005, respectively. Rising short-term interest rates combined with
limited change in intermediate interest rates and highly competitive loan and
deposit pricing has resulted in an operating environment with declining net
interest margins.
Noninterest income for the first nine months of 2006 totaled $41.6 million,
compared to $40.1 million in the first nine months of 2005. The $1.5 million
increase is primarily due to:
* $860 thousand higher merchant credit card income attributable to the
acquisition of Redwood Empire Bancorp on March 1, 2005.
* $335 thousand increase in debit card and ATM fees.
* $480 thousand decrease in service charges on deposit accounts,
primarily account analysis fees.
* $600 thousand increase due to $4.9 million in securities losses and
$4.3 million in gains from the sale of real estate and life insurance
proceeds recognized in 2005.
Noninterest expense for the third quarter of 2006 was $25.4 million, reduced
from $26.3 million for the prior quarter and $27.3 million for the third quarter
of 2005. The efficiency ratio for the third quarter of 2006 was 39.6 percent,
compared to 40.2 percent for the prior quarter and 37.2 percent for the third
quarter of 2005.
The provision for credit losses was $75 thousand for the third quarter of 2006,
reduced from $150 thousand for the previous quarter and for the third quarter of
2005. The reduced provision for credit losses reflects management's assessment
of credit risk for the loan portfolio.
Page 7
At September 30, 2006, shareholders' equity was $427 million and the Company's
total regulatory capital ratio was 11.0 percent, which exceeds the "well-
capitalized" level of 10 percent under regulatory requirements. During the third
quarter 2006, shares repurchased, net of shares issued, totaled 291 thousand
shares. At September 30, 2006, 1.9 million shares remain authorized under the
Company's stock repurchase plan.
Westamerica Bancorporation, through its wholly owned subsidiary Westamerica
Bank, operates 87 branches throughout 21 Northern and Central California
counties. At September 30, 2006, the company had total assets outstanding of
$4.8 billion.
Westamerica Bancorporation Web Address: www.westamerica.com
For additional information contact:
Westamerica Bancorporation
Robert A. Thorson - SVP & Chief Financial Officer
707-863-6840
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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 annual and quarterly reports filed with the Securities and
Exchange Commission, including the Company's Form 10-Q for the quarter ended
June 30, 2006 and Form 10-K for the year ended December 31, 2005, describe some
of these factors, including certain credit, market, operational, liquidity and
interest rate 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, legislation including 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.
####
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WESTAMERICA BANCORPORATION
FINANCIAL HIGHLIGHTS Public Information October 17, 2006
September 30, 2006
1. Net Income Summary.
(dollars in thousands except per-share data)
Q3'06 / Q3'06 / 9/30'06YTD/
Q3'06 Q3'05 Q3'05 Q2'06 Q2'06 9/30'06YTD 9/30'05YTD 9/30'05YTD
--------------------------------------------------------------------------------------
1 Net Interest Income $50,197 $55,993 -10.4% $51,503 -2.5% $155,674 $168,036 -7.4%
(Fully Taxable Equivalent)
2 Provision for Credit Losses 75 150 -50.0% 150 -50.0% 375 750 -50.0%
3 Noninterest Income:
4 Investment Securities 0 0 n/m 0 n/m 0 (4,903) n/m
(Loss/Impairment) Gains
5 Gains on Sales of 0 2,369 n/m 0 n/m 0 3,700 n/m
Real Property
6 Other 13,899 15,071 -7.8% 14,061 -1.2% 41,600 41,317 0.7%
----------------------- ------------ -----------------------
7 Total Noninterest Income 13,899 17,440 -20.3% 14,061 -1.2% 41,600 40,114 3.7%
----------------------- ------------ -----------------------
8 Noninterest Expense 25,403 27,319 -7.0% 26,345 -3.6% 77,232 80,272 -3.8%
9 Income Tax Provision (FTE) 14,381 17,079 -15.8% 14,575 -1.3% 44,818 48,212 -7.0%
----------------------- ------------ -----------------------
10 Net Income $24,237 $28,885 -16.1% $24,494 -1.0% $74,849 $78,916 -5.2%
======================= ============ =======================
11 Average Shares Outstanding 31,070 32,352 -4.0% 31,364 -0.9% 31,372 32,379 -3.1%
12 Diluted Average Shares 31,558 32,972 -4.3% 31,932 -1.2% 31,919 33,007 -3.3%
Outstanding
13 Operating Ratios:
14 Basic Earnings Per Share $0.78 $0.89 -12.6% $0.78 -0.1% $2.39 $2.44 -2.1%
15 Diluted Earnings Per Share 0.77 0.88 -12.3% 0.77 0.1% 2.34 2.39 -1.9%
16 Return On Assets 1.98% 2.23% 1.99% 2.02% 2.09%
17 Return On Equity 22.7% 27.0% 23.1% 23.6% 25.8%
18 Net Interest Margin (FTE) 4.54% 4.76% 4.58% 4.61% 4.84%
19 Efficiency Ratio (FTE) 39.6% 37.2% 40.2% 39.1% 38.6%
20 Dividends Paid Per Share $0.32 $0.30 6.7% $0.32 0.0% $0.96 $0.90 6.7%
21 Dividend Payout Ratio 42% 34% 42% 41% 38%
2. Net Interest Income.
(dollars in thousands)
Q3'06 / Q3'06 / 9/30'06YTD/
Q3'06 Q3'05 Q3'05 Q2'06 Q2'06 9/30'06YTD 9/30'05YTD 9/30'05YTD
--------------------------------------------------------------------------------------
1 Interest and Fee Income (FTE) $67,185 $68,021 -1.2% $67,788 -0.9% $203,459 $199,166 2.2%
2 Interest Expense 16,988 12,028 41.2% 16,285 4.3% 47,785 31,130 53.5%
----------------------- ------------ -----------------------
3 Net Interest Income (FTE) $50,197 $55,993 -10.3% $51,503 -2.5% $155,674 $168,036 -7.4%
======================= ============ =======================
4 Average Earning Assets $4,419,609 $4,695,342 -5.9%$4,515,728 -2.1%$4,513,838 $4,644,636 -2.8%
5 Average Interest-Bearing 3,045,282 3,266,697 -6.8% 3,139,054 -3.0% 3,129,901 3,234,627 -3.2%
Liabilities
6 Yield on Earning Assets (FTE) 6.05% 5.77% 6.01% 6.02% 5.73%
7 Cost of Funds 1.52% 1.01% 1.44% 1.41% 0.89%
8 Net Interest Margin (FTE) 4.54% 4.76% 4.58% 4.61% 4.84%
9 Interest Expense/Interest- 2.20% 1.45% 2.07% 2.03% 1.28%
Bearing Liabilities
10 Net Interest Spread (FTE) 3.85% 4.32% 3.94% 3.99% 4.45%
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3. Loans & Other Earning Assets.
(average volume, dollars in thousands)
Q3'06 / Q3'06 / 9/30'06YTD/
Q3'06 Q3'05 Q3'05 Q2'06 Q2'06 9/30'06YTD 9/30'05YTD 9/30'05YTD
--------------------------------------------------------------------------------------
1 Total Assets $4,846,286 $5,141,666 -5.7%$4,948,443 -2.1%$4,949,661 $5,058,776 -2.2%
2 Total Earning Assets 4,419,609 4,695,342 -5.9% 4,515,728 -2.1% 4,513,838 4,644,636 -2.8%
3 Total Loans 2,555,472 2,643,270 -3.3% 2,588,220 -1.3% 2,586,547 2,562,880 0.9%
4 Commercial Loans 654,179 711,329 -8.0% 679,512 -3.7% 674,821 692,824 -2.6%
5 Commercial Real Estate Loans 913,919 937,380 -2.5% 914,373 -0.0% 917,043 901,373 1.7%
6 Consumer Loans 987,373 994,560 -0.7% 994,336 -0.7% 994,682 968,684 2.7%
7 Total Investment Securities 1,864,137 2,052,073 -9.2% 1,927,508 -3.3% 1,927,291 2,081,755 -7.4%
8 Available For Sale 636,480 681,098 -6.6% 650,649 -2.2% 650,918 748,246 -13.0%
(Market Value)
9 Held To Maturity 1,227,657 1,370,975 -10.5% 1,276,859 -3.9% 1,276,374 1,333,509 -4.3%
10 HTM Unrealized (Loss) (6,777) (8,157) n/m (33,374) n/m (6,777) (8,157) n/m
at Period-End
11 Loans / Deposits 70.9% 68.3% 70.9% 70.3% 66.9%
4. Deposits & Other Interest-Bearing Liabilities.
(average volume, dollars in thousands)
Q3'06 / Q3'06 / 9/30'06YTD/
Q3'06 Q3'05 Q3'05 Q2'06 Q2'06 9/30'06YTD 9/30'05YTD 9/30'05YTD
--------------------------------------------------------------------------------------
1 Total Deposits $3,602,565 $3,872,414 -7.0%$3,652,030 -1.4%$3,679,677 $3,831,947 -4.0%
2 Noninterest Demand 1,311,786 1,400,272 -6.3% 1,316,927 -0.4% 1,328,071 1,367,580 -2.9%
3 Interest-Bearing Transaction 602,996 632,680 -4.7% 624,045 -3.4% 626,196 625,492 0.1%
4 Savings 943,396 1,104,237 -14.6% 964,776 -2.2% 976,753 1,116,228 -12.5%
5 Other Time >$100K 509,741 455,293 12.0% 503,488 1.2% 504,843 436,477 15.7%
6 Other Time < $100K 234,646 279,932 -16.2% 242,793 -3.4% 243,814 286,170 -14.8%
7 Total Short-Term Borrowings 717,524 754,215 -4.9% 766,936 -6.4% 740,923 734,394 0.9%
8 Fed Funds Purchased 485,095 585,156 -17.1% 548,770 -11.6% 527,453 573,814 -8.1%
9 Other Short-Term Funds 232,429 169,060 37.5% 218,166 6.5% 213,469 160,580 32.9%
10 Long-Term Debt 36,978 40,340 -8.3% 37,015 -0.1% 37,372 35,866 4.2%
11 Shareholders' Equity 422,735 424,277 -0.4% 424,999 -0.5% 424,189 409,567 3.6%
12 Demand Deposits / 36.4% 36.2% 36.1% 36.1% 35.7%
Total Deposits
13 Transaction & Savings 79.3% 81.0% 79.6% 79.7% 81.1%
Deposits / Total Deposits
5. Interest Yields Earned & Rates Paid.
(dollars in thousands)
Q3'06 Q2'06 Q3'05
---------------------------------- ----------------------------------
Average Income/ Yield/ Yield/ Average Income/ Yield/
Volume Expense Rate Rate Volume Expense Rate
---------------------------------------------------------------------------
1 Interest & Fees Income Earned
2 Total Earning Assets (FTE) $4,419,609 $67,185 6.05% 6.01%$4,695,342 $68,021 5.77%
3 Total Loans (FTE) 2,555,472 42,589 6.61% 6.58% 2,643,270 41,395 6.21%
4 Commercial Loans (FTE) 654,179 13,151 7.74% 7.57% 711,329 12,478 6.92%
5 Commercial Real Estate 913,919 16,396 7.12% 7.28% 937,380 16,818 7.12%
Loans
6 Consumer Loans 987,373 13,042 5.36% 5.25% 994,560 12,099 4.93%
7 Total Investment 1,864,137 24,596 5.28% 5.25% 2,052,073 26,626 5.19%
Securities (FTE)
8 Interest Expense Paid
9 Total Earning Assets 4,419,609 16,988 1.52% 1.44% 4,695,342 12,028 1.01%
10 Total Interest-Bearing 3,045,282 16,988 2.20% 2.07% 3,266,697 12,028 1.45%
Liabilities
11 Total Interest-Bearing 2,290,779 9,010 1.56% 1.38% 2,472,142 5,967 0.96%
Deposits
12 Interest-Bearing 602,996 430 0.28% 0.27% 632,680 401 0.25%
Transaction
13 Savings 943,396 1,173 0.49% 0.38% 1,104,237 956 0.34%
14 Other Time < $100K 234,646 1,722 2.91% 2.61% 279,932 1,463 2.07%
15 Other Time >$100K 509,741 5,686 4.43% 4.05% 455,293 3,147 2.74%
16 Total Short-Term Borrowings 717,524 7,399 4.04% 3.97% 754,215 5,421 2.81%
17 Fed Funds Purchased 485,095 6,508 5.25% 4.93% 585,156 5,164 3.45%
18 Other Short-Term Funds 232,429 891 1.52% 1.58% 169,060 257 0.60%
19 Long-Term Debt 36,978 578 6.25% 6.25% 40,340 640 6.35%
20 Net Interest Income and Margin (FTE) $50,197 4.54% 4.58% $55,993 4.76%
Page 11
6. Noninterest Income.
(dollars in thousands except per-share data)
Q3'06 / Q3'06 / 9/30'06YTD/
Q3'06 Q3'05 Q3'05 Q2'06 Q2'06 9/30'06YTD 9/30'05YTD 9/30'05YTD
--------------------------------------------------------------------------------------
1 Service Charges on Deposit $7,155 $7,436 -3.8% $7,186 -0.4% $21,424 $21,905 -2.2%
Accounts
2 Merchant Credit Card Income 2,430 2,631 -7.6% 2,392 1.6% 7,208 6,346 13.6%
3 ATM Fees & Interchange 753 725 3.8% 717 4.9% 2,148 2,058 4.4%
4 Debit Card Fees 883 834 5.9% 876 0.8% 2,587 2,343 10.4%
5 Financial Services Fees 377 388 -2.9% 363 3.7% 1,037 1,007 3.0%
6 Mortgage Banking Income 36 62 -42.8% 49 -27.9% 134 230 -41.4%
7 Trust Fees 298 323 -7.7% 287 3.9% 867 905 -4.3%
8 Other Income 1,967 2,672 -26.4% 2,191 -10.2% 6,195 6,523 -5.0%
----------------------- ------------ -----------------------
9 Sub-total 13,899 15,071 -7.8% 14,061 -1.2% 41,600 41,317 0.7%
10 Gains on Sales of Real 0 2,369 n/m 0 n/m 0 3,700 n/m
Property
11 Investment Securities 0 0 n/m 0 n/m 0 (4,903) n/m
Gains (Losses) ----------------------- ------------ -----------------------
12 Total Noninterest Income $13,899 $17,440 -20.3% $14,061 -1.2% $41,600 $40,114 3.7%
======================= ============ =======================
13 Operating Ratios:
14 Total Revenue (FTE) $64,096 $73,433 -12.7% $65,564 -2.2% $197,274 $208,150 -5.2%
15 Noninterest Income / 21.7% 23.7% 21.4% 21.1% 19.3%
Revenue (FTE)
16 Service Charges / 0.79% 0.76% 0.79% 0.78% 0.76%
Deposits (annualized)
17 Total Revenue Per Share $8.18 $9.01 -9.1% $8.38 -2.4% $8.41 $8.59 -2.2%
(annualized)
7. Noninterest Expense.
(dollars in thousands)
Q3'06 / Q3'06 / 9/30'06YTD/
Q3'06 Q3'05 Q3'05 Q2'06 Q2'06 9/30'06YTD 9/30'05YTD 9/30'05YTD
--------------------------------------------------------------------------------------
1 Salaries & Benefits $13,080 $14,149 -7.6% $13,559 -3.5% $39,897 $41,988 -5.0%
2 Occupancy 3,321 3,201 3.7% 3,267 1.6% 9,820 9,383 4.7%
3 Equipment 1,194 1,347 -11.4% 1,315 -9.2% 3,775 3,891 -3.0%
4 Data Processing 1,503 1,544 -2.7% 1,531 -1.8% 4,568 4,632 -1.4%
5 Courier 904 989 -8.5% 909 -0.6% 2,736 2,879 -5.0%
6 Postage 410 377 8.5% 397 3.2% 1,217 1,175 3.6%
7 Telephone 371 537 -31.0% 466 -20.4% 1,269 1,618 -21.6%
8 Professional Fees 532 497 7.1% 833 -36.1% 1,823 1,821 0.1%
9 Stationery & Supplies 307 298 3.2% 272 13.0% 849 950 -10.6%
10 Loan Expense 253 309 -18.3% 236 7.2% 683 745 -8.4%
11 Operational Losses 129 222 -41.9% 255 -49.3% 572 612 -6.5%
12 Amortization of 1,016 1,064 -4.5% 1,016 0.0% 3,071 2,561 19.9%
Identifiable Intangibles
13 Other Operating 2,383 2,785 -14.4% 2,289 4.1% 6,952 8,017 -13.3%
----------------------- ------------ -----------------------
14 Total Noninterest Expense $25,403 $27,319 -7.0% $26,345 -3.6% $77,232 $80,272 -3.8%
======================= ============ =======================
15 Full Time Equivalent Staff 901 956 -5.8% 904 -0.3% 915 964 -5.1%
16 Average Assets / Full Time $5,379 $5,378 0.0% $5,474 -1.7% $5,409 $5,248 3.1%
Equivalent Staff
17 Operating Ratios:
18 FTE Revenue / Full Time
Equivalent Staff
(annualized) $282 $305 -7.4% $291 -3.0% $288 $289 -0.1%
19 Noninterest Expense / 2.28% 2.31% 2.34% 2.29% 2.31%
Earning Assets
(annualized)
20 Noninterest Expense / 39.6% 37.2% 40.2% 39.1% 38.6%
Revenues
Page 12
8. Provision for Credit Losses.
(dollars in thousands)
Q3'06 / Q3'06 / 9/30'06YTD/
Q3'06 Q3'05 Q3'05 Q2'06 Q2'06 9/30'06YTD 9/30'05YTD 9/30'05YTD
--------------------------------------------------------------------------------------
1 Provision for Credit Losses $75 $150 -50.0% $150 -50.0% $375 $750 -50.0%
2 Gross Loan Losses 1,011 684 47.8% 645 56.8% 2,775 2,037 36.2%
3 Net Loan Losses 421 338 24.5% 234 80.0% 885 441 100.8%
4 Recoveries / Gross Loan Losses 58% 51% 64% 68% 78%
5 Average Total Loans $2,555,472 $2,643,270 -3.3%$2,588,220 -1.3%$2,586,547 $2,562,880 0.9%
6 Net Loan Losses / Loans 0.07% 0.05% 0.04% 0.05% 0.02%
(annualized)
7 Provision for Credit Losses / 0.01% 0.02% 0.02% 0.02% 0.04%
Loans (annualized)
8 Provision for Credit Losses / 17.8% 44.4% 64.2% 42.4% 170.1%
Net Loan Losses
9. Credit Quality.
(dollars in thousands)
9/30/06 / 9/30/06 /
9/30/06 9/30/05 9/30/05 6/30/06 6/30/06 3/31/06 12/31/05 6/30/05
--------------------------------------------------------------------------------------
1 Nonperforming Nonaccrual Loans $1,162 $2,292 -49.3% $1,613 -28.0% $2,993 $2,068 $1,560
2 Performing Nonaccrual Loans 3,889 4,514 -13.9% 3,899 -0.3% 3,232 4,256 6,072
----------------------- ------------ ----------------------------------
3 Total Nonaccrual Loans 5,051 6,806 -25.8% 5,512 -8.4% 6,225 6,324 7,632
4 Accruing Loans 90+ Days 252 1,334 114 n 29 162 84
Past Due ----------------------- ------------ ----------------------------------
5 Total Nonperforming Loans 5,303 8,140 -34.9% 5,626 -5.7% 6,254 6,486 7,716
6 Repossessed Collateral 656 0 656 n/m 0 0 40
7 Total Nonperforming Loans & ----------------------- ------------ ----------------------------------
8 Repossessed Collateral $5,959 $8,140 -26.8% $6,282 -5.1% $6,254 $6,486 $7,756
======================= ============ ==================================
9 Classified Loans $24,767 $36,656 -32.4% $25,681 -3.6% $28,878 $29,997 $37,615
======================= ============ ==================================
10 Allowance for Loan Losses $55,338 $59,674 -7.3% $55,684 -0.6% $55,768 $55,849 $59,862
11 Total Loans Outstanding 2,552,929 2,675,907 -4.6% 2,580,612 -1.1% 2,639,968 2,672,221 2,687,566
12 Total Assets 4,845,360 5,161,473 -6.1% 4,906,886 -1.3% 5,055,553 5,157,559 5,199,404
13 Allowance for Loan Losses / 2.17% 2.23% 2.16% 2.11% 2.09% 2.23%
Total Loans
14 Nonperforming Loans / 0.21% 0.30% 0.22% 0.24% 0.24% 0.29%
Total Loans
15 Nonperforming Loans & Repossessed
16 Collateral/Total Assets 0.12% 0.16% 0.13% 0.12% 0.13% 0.15%
17 Allowance/Nonperforming Loans 1044% 733% 990% 892% 861% 776%
18 Allowance for Loan Losses / 223% 163% 217% 193% 186% 159%
Classified Loans
19 Classified Loans /
20 (Equity + Allowance for 5.1% 7.3% 5.4% 6.0% 6.1% 7.4%
Loan Losses)
Page 13
10. Capital.
(dollars in thousands, except per-share amounts)
9/30/06 / 9/30/06 /
9/30/06 9/30/05 9/30/05 6/30/06 6/30/06 3/31/06 12/31/05 6/30/05
--------------------------------------------------------------------------------------
1 Shareholders' Equity $426,976 $440,406 -3.0% $421,731 1.2% $429,372 $435,064 $447,928
2 Tier I Regulatory Capital 300,344 297,896 0.8% 300,661 -0.1% 303,344 296,746 299,003
3 Total Regulatory Capital 341,207 341,147 0.0% 341,788 -0.2% 345,786 339,881 342,967
4 Total Assets 4,845,360 5,161,473 -6.1% 4,906,886 -1.3% 5,055,553 5,157,559 5,199,404
5 Risk-Adjusted Assets 3,094,942 3,275,611 -5.5% 3,127,641 -1.0% 3,222,355 3,267,226 3,307,055
6 Shareholders' Equity / 8.81% 8.53% 8.59% 8.49% 8.44% 8.61%
Total Assets
7 Shareholders' Equity / 16.72% 16.46% 16.34% 16.26% 16.28% 16.67%
Total Loans
8 Tier I Capital /Total Assets 6.20% 5.77% 6.13% 6.00% 5.75% 5.75%
9 Tier I Capital / 9.70% 9.09% 9.61% 9.41% 9.08% 9.04%
Risk-Adjusted Assets
10 Total Capital / 11.02% 10.41% 10.93% 10.73% 10.40% 10.37%
Risk-Adjusted Assets
11 Shares Outstanding 30,910 32,198 -4.0% 31,201 -0.9% 31,544 31,882 32,593
12 Book Value Per Share ($) $13.81 $13.68 1.0% $13.52 2.2% $13.61 $13.65 $13.74
13 Market Value Per Share ($) 50.51 51.65 -2.2% 48.97 3.1% 51.92 53.07 52.81
14 Share Repurchase Programs
(shares in thousands)
Q3'06 / Q3'06 / 9/30'06YTD/
Q3'06 Q3'05 Q3'05 Q2'06 Q2'06 9/30'06YTD 9/30'05YTD 9/30'05YTD
--------------------------------------------------------------------------------------
15 Total Shares Repurchased / 436 437 -0.3% 491 -11.3% 1,356 1,299 4.4%
Canceled
16 Average Repurchase Price $47.98 $53.60 -10.5% $50.47 -4.9% $50.67 $53.04 -4.5%
17 Net Shares Repurchased 291 395 -26.3% 343 -15.1% 972 (558) n/m
(Issued)
Page 14
11. Period-End Balance Sheets.
(dollars in thousands)
9/30/06 / 9/30/06 /
9/30/06 9/30/05 9/30/05 6/30/06 6/30/06 3/31/06 12/31/05 6/30/05
--------------------------------------------------------------------------------------
1 Assets:
2 Cash and Money Market Assets $192,175 $193,760 -0.8% $189,204 1.6% $188,481 $209,807 $195,289
3 Investment Securities 617,736 660,630 -6.5% 620,294 -0.4% 642,996 662,388 691,609
Available For Sale
4 Investment Securities 1,211,589 1,358,266 -10.8% 1,243,936 -2.6% 1,307,848 1,337,216 1,349,555
Held to Maturity
5 Loans, gross 2,552,929 2,675,907 -4.6% 2,580,612 -1.1% 2,639,968 2,672,221 2,687,566
6 Allowance For Loan Losses (55,338) (59,674) -7.3% (55,684) -0.6% (55,768) (55,849) (59,862)
----------------------- ------------ ----------------------------------
7 Loans, net 2,497,591 2,616,233 -4.5% 2,524,928 -1.1% 2,584,200 2,616,372 2,627,704
----------------------- ------------ ----------------------------------
8 Premises and Equipment 30,979 33,640 -7.9% 31,785 -2.5% 32,535 33,221 34,864
9 Identifiable Intangible 23,098 27,233 -15.2% 24,114 -4.2% 25,130 26,170 28,297
Assets
10 Goodwill 121,719 124,122 -1.9% 121,719 0.0% 121,719 121,907 124,122
11 Interest Receivable and 150,473 147,589 2.0% 150,906 -0.3% 152,644 150,478 147,964
Other Assets ----------------------- ------------ ----------------------------------
12 Total Assets $4,845,360 $5,161,473 -6.1%$4,906,886 -1.3%$5,055,553 $5,157,559 $5,199,404
======================= ============ ==================================
13 Liabilities and Shareholders' Equity:
14 Deposits:
15 Noninterest Bearing $1,298,519 $1,412,470 -8.1%$1,330,280 -2.4%$1,355,426 $1,419,313 $1,377,680
16 Interest-Bearing 581,705 635,019 -8.4% 606,633 -4.1% 641,264 658,667 614,246
Transaction
17 Savings 926,262 1,094,130 -15.3% 951,819 -2.7% 1,004,964 1,022,645 1,114,631
18 Time 744,645 732,316 1.7% 758,315 -1.8% 737,532 745,476 726,283
----------------------- ------------ ----------------------------------
19 Total Deposits 3,551,131 3,873,935 -8.3% 3,647,047 -2.6% 3,739,186 3,846,101 3,832,840
----------------------- ------------ ----------------------------------
20 Short-Term Borrowed Funds 768,841 764,143 0.6% 746,517 3.0% 784,639 775,173 828,280
21 Debt Financing and Notes 36,956 40,318 -8.3% 36,993 -0.1% 37,030 40,281 40,354
Payable
22 Liability For Interest, 61,456 42,671 44.0% 54,598 12.6% 65,326 60,940 50,002
Taxes and Other ----------------------- ------------ ----------------------------------
23 Total Liabilities 4,418,384 4,721,067 -6.4% 4,485,155 -1.5% 4,626,181 4,722,495 4,751,476
----------------------- ------------ ----------------------------------
24 Shareholders' Equity:
25 Paid-In Capital $346,603 $345,229 0.4% $346,224 0.1% $344,941 $345,458 $347,355
26 Unrealized Gain (Loss)
on Investment Securities
27 Available For Sale 1,805 2,762 n/m (4,771) n/m (830) 1,882 8,185
28 Retained Earnings 78,568 92,415 -15.0% 80,278 -2.1% 85,261 87,724 92,388
----------------------- ------------ ----------------------------------
29 Total Shareholders' Equity 426,976 440,406 -3.0% 421,731 1.2% 429,372 435,064 447,928
----------------------- ------------ ----------------------------------
30 Total Liabilities and $4,845,360 $5,161,473 -6.1%$4,906,886 -1.3%$5,055,553 $5,157,559 $5,199,404
Shareholders' Equity ======================= ============ ==================================
Page 15
12. Income Statements.
(dollars in thousands, except per-share amounts)
Q3'06 / Q3'06 / 9/30'06YTD/
Q3'06 Q3'05 Q3'05 Q2'06 Q2'06 9/30'06YTD 9/30'05YTD 9/30'05YTD
--------------------------------------------------------------------------------------
1 Interest and Fee Income:
2 Loans $41,292 $40,008 3.2% $41,160 0.3% $123,558 $114,882 7.6%
3 Money Market Assets and 1 1 n/m 2 n/m 3 2 n/m
Funds Sold
4 Investment Securities 7,227 7,705 -6.2% 7,377 -2.0% 22,179 25,248 -12.2%
Available For Sale
5 Investment Securities 12,845 14,090 -8.8% 13,338 -3.7% 39,970 40,431 -1.1%
Held to Maturity ----------------------- ------------ -----------------------
6 Total Interest Income 61,365 61,804 -0.7% 61,877 -0.8% 185,710 180,563 2.9%
----------------------- ------------ -----------------------
7 Interest Expense:
8 Transaction Deposits 430 401 7.1% 427 0.6% 1,285 1,004 28.0%
9 Savings Deposits 1,173 956 22.6% 924 26.9% 2,995 2,790 7.3%
10 Time Deposits 7,408 4,610 60.7% 6,661 11.2% 19,985 11,984 66.8%
11 Short-Term Borrowed Funds 7,399 5,421 36.5% 7,695 -3.8% 21,766 13,645 59.5%
12 Debt Financing and Notes 578 640 -9.7% 578 0.0% 1,754 1,707 2.7%
Payable
----------------------- ------------ -----------------------
13 Total Interest Expense 16,988 12,028 41.2% 16,285 4.3% 47,785 31,130 53.5%
----------------------- ------------ -----------------------
14 Net Interest Income 44,377 49,776 -10.8% 45,592 -2.7% 137,925 149,433 -7.7%
----------------------- ------------ -----------------------
15 Provision for Credit Losses 75 150 -50.0% 150 -50.0% 375 750 -50.0%
----------------------- ------------ -----------------------
16 Noninterest Income:
17 Service Charges on 7,155 7,436 -3.8% 7,186 -0.4% 21,424 21,905 -2.2%
Deposit Accounts
18 Merchant Credit Card 2,430 2,631 -7.6% 2,392 1.6% 7,208 6,346 13.6%
19 Financial Services 377 388 -2.9% 363 3.7% 1,037 1,007 3.0%
Commissions
20 Mortgage Banking 36 62 -42.8% 49 -27.9% 134 230 -41.4%
21 Trust Fees 298 323 -7.7% 287 3.9% 867 905 -4.3%
22 Gains on Sales of 0 2,369 n/m 0 n/m 0 3,700 n/m
Real Property
23 Securities Gains (Losses) 0 0 n/m 0 n/m 0 (4,903) n/m
24 Other 3,603 4,231 -14.8% 3,784 -4.8% 10,930 10,924 0.0%
----------------------- ------------ -----------------------
25 Total Noninterest Income 13,899 17,440 -20.3% 14,061 -1.2% 41,600 40,114 3.7%
----------------------- ------------ -----------------------
26 Noninterest Expense:
27 Salaries and Related Benefits 13,080 14,149 -7.6% 13,559 -3.5% 39,897 41,988 -5.0%
28 Occupancy 3,321 3,201 3.7% 3,267 1.6% 9,820 9,383 4.7%
29 Equipment 1,194 1,347 -11.4% 1,315 -9.2% 3,775 3,891 -3.0%
30 Data Processing 1,503 1,544 -2.7% 1,531 -1.8% 4,568 4,632 -1.4%
31 Professional Fees 532 497 7.1% 833 -36.1% 1,823 1,821 0.1%
32 Other 5,773 6,581 -12.3% 5,840 -1.1% 17,349 18,557 -6.5%
----------------------- ------------ -----------------------
33 Total Noninterest Expense 25,403 27,319 -7.0% 26,345 -3.6% 77,232 80,272 -3.8%
----------------------- ------------ -----------------------
34 Income Before Income Taxes 32,798 39,747 -17.5% 33,158 -1.1% 101,918 108,525 -6.1%
35 Provision for income taxes 8,561 10,862 -21.2% 8,664 -1.2% 27,069 29,609 -8.6%
----------------------- ------------ -----------------------
36 Net Income $24,237 $28,885 -16.1% $24,494 -1.0% $74,849 $78,916 -5.2%
======================= ============ =======================
37 Average Shares Outstanding 31,070 32,352 -4.0% 31,364 -0.9% 31,372 32,379 -3.1%
38 Diluted Average Shares 31,558 32,972 -4.3% 31,932 -1.2% 31,919 33,007 -3.3%
Outstanding
39 Per Share Data:
40 Basic Earnings $0.78 $0.89 -12.6% $0.78 -0.1% $2.39 $2.44 -2.1%
41 Diluted Earnings 0.77 0.88 -12.3% 0.77 0.1% 2.34 2.39 -1.9%
42 Dividends Paid 0.32 0.30 6.7% 0.32 0.0% 0.96 0.90 6.7%