Westamerica Q3 earnings rise 9% to $22 million

Westamerica Bancorp (Nasdaq: WABC), parent company of Westamerica Bank, on Thursday reported net income increased 9.9% in its third quarter from a year ago and down 2.2% from its fiscal mid-year.

The San Rafael-based bank said it had earnings of $22.1 million, or 82 cents per share, in the quarter ended Sept. 30, compared with $20.1 million, or 74 cents a share, a year before, and $22.6 million, or 84 cents a share, at the middle of its fiscal year.

The holding company for Westamerica Bank posted revenue of $55.1 million in the period. Its revenue net of interest expense was $54.6 million, beating Street forecasts.

“Westamerica’s valuable deposit base generated a very low 0.03 percent annualized cost of funding our loan and bond portfolios during the third quarter 2021. Operating expenses remained well managed in the third quarter 2021, delivering fifty-five percent of revenue to pre-tax income. Credit quality remained solid with nonperforming loans of $1.8 million at September 30, 2021,” said Chairman, President and CEO David Payne in the financial-results announcement. “Third quarter 2021 results generated an annualized 11.6 percent return on average common equity, and shareholders were paid a $0.41 per common share dividend during the quarter,” concluded Payne.

Average balances of pandemic-relief loans to businesses under the U.S. Small Business Administration’s Paycheck Protection Program declined to $145 million in the fiscal third quarter, from $208 million in the middle of the fiscal year. As of Sept. 30, PPP loans totaled $103 million.

Troubled loans also improved in the quarter, the institution reported. Nonperforming loans declined to $1.8 million after the full payoff of a $3.1 million non-accrual loan in the quarter. The allowance for credit losses on loans was $23.9 million at September 30, 2021.

Loan payment deferrals due to economic weakness caused by the pandemic totaled $1.0 million as of Sept. 30, a for consumer automobile loans.

A year before, consumer loans granted loan deferrals totaled $5.0 million. Commercial real estate loans with deferred payments totaled $19.1 million, primarily for hospitality, restaurant and retail properties, “seasoned with low loan-to-value ratios.” Commercial loans with deferred payments had totaled $209,000.