GlobeNewswire Inc | Jan 20, 2022 11:08AM EST

January 20, 2022

SAN RAFAEL, Calif., Jan. 20, 2022 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the fourth quarter 2021 of $21.7 million and diluted earnings per common share ("EPS") of $0.81. Fourth quarter 2021 results compare to net income of $22.1 million and EPS of $0.82 for the third quarter 2021, which included make-whole interest income on corporate bonds redeemed before maturity, which increased EPS $0.02.

"Westamericas operating expenses remained well managed in the fourth quarter 2021, delivering fifty-six percent of revenue to pre-tax income. Checking and savings deposits represented ninety-eight percent of the Companys average deposit base during the fourth quarter 2021, placing limited reliance on higher-costing time deposits. Credit quality remained solid with nonperforming loans of $1.0 million at December 30, 2021, said Chairman, President and CEO David Payne. Fourth quarter 2021 results generated an annualized 11.2 percent return on average common equity. Shareholders were paid a $0.42 per common share dividend during the fourth quarter 2021, representing fifty-two percent of diluted earnings per share, concluded Payne.

Net interest income on a fully-taxable equivalent (FTE) basis was $43.1 million for the fourth quarter 2021, compared to $44.0 million for the third quarter 2021, which included make-whole interest income on corporate bonds redeemed prior to maturity of $732 thousand. Interest income on Paycheck Protection Program (PPP) loans was $1.2 million for the fourth quarter 2021, compared to $1.9 million for the third quarter 2021. Average PPP loan balances declined to $69 million for the fourth quarter 2021 from $145 million for the third quarter 2021; at December 31, 2021 PPP loans totaled $46 million. Checking and savings deposits represented ninety-eight percent of the Companys average deposit base during the fourth quarter 2021, generating a low 0.03 percent annualized cost of funding interest-earning assets.

At December 31, 2021, nonperforming loans totaled $1.0 million and the allowance for credit losses on loans was $23.5 million. The Company continues to work with loan customers requesting loan payment deferrals due to economic weakness caused by the pandemic. At December 31, 2021, loans with deferred payments totaled $84 thousand, all of which were consumer automobile loans.

Noninterest income for the fourth quarter 2021 totaled $10.8 million, compared to noninterest income for the third quarter 2021 of $11.3 million.

Noninterest expense for the fourth quarter 2021 was $23.9 million compared to $24.7 million for the third quarter 2021; the lower fourth quarter operating expenses were primarily personnel benefit costs and other expenses.

Westamerica Bancorporations 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 Bancorporation1108 Fifth Avenue, San Rafael, CA 94901Robert A. Thorson ? SVP & Treasurer707-863-6840investments@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, 2020 filed on Form 10-K and quarterly report for the quarter ended September 30, 2021 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 20, 2022WESTAMERICA BANCORPORATION FINANCIAL HIGHLIGHTS December 31, 2021 1. Net Income Summary. (in thousands except per-share amounts) % Q4'2021 Q4'2020 Change Q3'2021 Net Interest and Fee $43,117 $43,292 -0.4 % $43,952 Income (FTE) Provision for Credit - - n/m - Losses Noninterest Income 10,842 13,959 -22.3 % 11,282 Noninterest Expense 23,912 24,545 -2.6 % 24,697 Income Before Taxes 30,047 32,706 -8.1 % 30,537 (FTE) Income Tax Provision 8,327 8,868 -6.1 % 8,474 (FTE) Net Income $21,720 $23,838 -8.9 % $22,063 Average Common Shares 26,866 26,838 0.1 % 26,866 Outstanding Diluted Average Common 26,875 26,849 0.1 % 26,875 Shares Operating Ratios: Basic Earnings Per $0.81 $0.89 -9.0 % $0.82 Common Share Diluted Earnings Per 0.81 0.89 -9.0 % 0.82 Common Share Return On Assets (a) 1.17 % 1.44 % 1.22 % Return On Common Equity 11.2 % 13.2 % 11.6 % (a) Net Interest Margin 2.49 % 2.81 % 2.60 % (FTE) (a) Efficiency Ratio (FTE) 44.3 % 42.9 % 44.7 % Dividends Paid Per $0.42 $0.41 2.4 % $0.41 Common Share Common Dividend Payout 52 % 46 % 50 % Ratio % 12/31'21YTD 12/31'20YTD Change Net Interest and Fee $174,151 $167,682 3.9 % Income (FTE) Provision for Credit - 4,300 n/m Losses Noninterest Income 43,345 45,637 -5.0 % Noninterest Expense 97,806 98,566 -0.8 % Income Before Taxes 119,690 110,453 8.4 % (FTE) Income Tax Provision 33,181 30,040 10.5 % (FTE) Net Income $86,509 $80,413 7.6 % Average Common Shares 26,855 26,942 -0.3 % Outstanding Diluted Average Common 26,870 26,960 -0.3 % Shares Operating Ratios: Basic Earnings Per $3.22 $2.98 8.1 % Common Share Diluted Earnings Per 3.22 2.98 8.1 % Common Share Return On Assets 1.23 % 1.30 % Return On Common Equity 11.5 % 11.3 % Net Interest Margin 2.62 % 2.91 % (FTE) Efficiency Ratio (FTE) 45.0 % 46.2 % Dividends Paid Per $1.65 $1.64 0.6 % Common Share Common Dividend Payout 51 % 55 % Ratio 2. Net Interest Income. (dollars in thousands) % Q4'2021 Q4'2020 Change Q3'2021 Interest and Fee Income $43,621 $43,773 -0.3 % $44,444 (FTE) Interest Expense 504 481 4.8 % 492 Net Interest and Fee $43,117 $43,292 -0.4 % $43,952 Income (FTE) Average Earning Assets $6,919,528 $6,156,749 12.4 % $6,754,281 Average Interest- Bearing Liabilities 3,468,111 3,034,240 14.3 % 3,370,840 Yield on Earning Assets 2.52 % 2.84 % 2.63 % (FTE) (a) Cost of Funds (a) 0.03 % 0.03 % 0.03 % Net Interest Margin 2.49 % 2.81 % 2.60 % (FTE) (a) Interest Expense/ Interest-Bearing 0.06 % 0.06 % 0.06 % Liabilities (a) Net Interest Spread 2.46 % 2.78 % 2.57 % (FTE) (a) % 12/31'21YTD 12/31'20YTD Change Interest and Fee Income $176,106 $169,506 3.9 % (FTE) Interest Expense 1,955 1,824 7.2 % Net Interest and Fee $174,151 $167,682 3.9 % Income (FTE) Average Earning Assets $6,632,632 $5,760,548 15.1 % Average Interest- Bearing Liabilities 3,317,924 2,847,988 16.5 % Yield on Earning Assets 2.65 % 2.94 % (FTE) Cost of Funds 0.03 % 0.03 % Net Interest Margin 2.62 % 2.91 % (FTE) Interest Expense/ Interest-Bearing 0.06 % 0.06 % Liabilities Net Interest Spread 2.59 % 2.88 % (FTE) 3. Loans & Other Earning Assets. (average volume, dollars in thousands) % Q4'2021 Q4'2020 Change Q3'2021 Total Assets $7,334,977 $6,562,753 11.8 % $7,158,462 Total Earning Assets 6,919,528 6,156,749 12.4 % 6,754,281 Total Loans 1,097,698 1,286,480 -14.7 % 1,176,114 Total Commercial Loans 259,007 426,564 -39.3 % 333,327 Paycheck Protection 68,870 227,828 -69.8 % 144,641 Program (PPP) Loans Commercial Loans 190,137 198,736 -4.3 % 188,686 Commercial RE Loans 538,177 561,394 -4.1 % 543,429 Consumer Loans 300,514 298,522 0.7 % 299,358 Total Investment 4,866,476 4,430,592 9.8 % 4,615,540 Securities Debt Securities 4,533,494 3,884,451 16.7 % 4,235,141 Available For Sale Debt Securities Held 332,982 546,141 -39.0 % 380,399 To Maturity Total Interest-Bearing 955,354 439,677 117.3 % 962,627 Cash Loans/Deposits 17.3 % 22.7 % 18.9 % % 12/31'21YTD 12/31'20YTD Change Total Assets $7,039,284 $6,174,470 14.0 % Total Earning Assets 6,632,632 5,760,548 15.1 % Total Loans 1,195,135 1,239,144 -3.6 % Total Commercial Loans 349,981 359,937 -2.8 % PPP Loans 152,149 151,320 0.5 % Commercial Loans 197,832 208,617 -5.2 % Commercial RE Loans 546,750 571,543 -4.3 % Consumer Loans 298,404 307,664 -3.0 % Total Investment 4,580,468 4,149,960 10.4 % Securities Debt Securities 4,169,091 3,517,633 18.5 % Available For Sale Debt Securities Held 411,377 632,327 -34.9 % To Maturity Total Interest-Bearing 857,029 371,444 130.7 % Cash Loans/Deposits 19.6 % 23.4 % 4. Deposits, Other Interest-Bearing Liabilities & Equity. (average volume, dollars in thousands) % Q4'2021 Q4'2020 Change Q3'2021 Total Deposits $6,349,137 $5,655,768 12.3 % $6,223,500 Noninterest Demand 3,022,787 2,736,348 10.5 % 2,960,207 Interest-Bearing 1,245,385 1,071,576 16.2 % 1,246,667 Transaction Savings 1,934,220 1,688,031 14.6 % 1,864,401 Time greater than 65,920 71,306 -7.6 % 68,811 $100K Time less than $100K 80,825 88,507 -8.7 % 83,414 Total Short-Term 141,761 114,820 23.5 % 107,547 Borrowings Shareholders' Equity 766,358 720,473 6.4 % 755,682 Demand Deposits/ Total Deposits 47.6 % 48.4 % 47.6 % Transaction & Savings Deposits / Total 97.7 % 97.2 % 97.6 % Deposits % 12/31'21YTD 12/31'20YTD Change Total Deposits $6,100,848 $5,306,177 15.0 % Noninterest Demand 2,897,244 2,538,819 14.1 % Interest-Bearing 1,208,269 1,008,758 19.8 % Transaction Savings 1,842,590 1,594,718 15.5 % Time greater than 69,165 72,363 -4.4 % $100K Time less than $100K 83,580 91,519 -8.7 % Total Short-Term 114,267 80,456 42.0 % Borrowings Other Borrowed Funds 53 174 -69.6 % Shareholders' Equity 750,669 711,554 5.5 % Demand Deposits/ Total Deposits 47.5 % 47.8 % Transaction & Savings Deposits / Total 97.5 % 96.9 % Deposits 5. Interest Yields Earned & Rates Paid. (dollars in thousands) Q4'2021 Average Income/ Yield (a) / Volume Expense Rate (a) Interest & Fee Income Earned Total Earning Assets $6,919,528 $43,621 2.52 % (FTE) Total Loans (FTE) 1,097,698 13,223 4.78 % Total Commercial 259,007 3,187 4.88 % Loans (FTE) PPP Loans 68,870 1,208 6.96 % Commercial Loans 190,137 1,979 4.13 % (FTE) Commercial RE Loans 538,177 6,492 4.79 % Consumer Loans 300,514 3,544 4.68 % Total Investments 4,866,476 30,032 2.47 % (FTE) Total Interest-Bearing 955,354 366 0.15 % Cash Interest Expense Paid Total Earning Assets 6,919,528 504 0.03 % Total Interest-Bearing 3,468,111 504 0.06 % Liabilities Total Interest-Bearing 3,326,350 479 0.06 % Deposits Interest-Bearing 1,245,385 95 0.03 % Transaction Savings 1,934,220 282 0.06 % Time less than $100K 80,825 41 0.20 % Time greater than 65,920 61 0.37 % $100K Total Short-Term 141,761 25 0.07 % Borrowings Net Interest Income and Margin (FTE) $43,117 2.49 % Q4'2020 Average Income/ Yield (a) / Volume Expense Rate (a) Interest & Fee Income Earned Total Earning Assets $6,156,749 $43,773 2.84 % (FTE) Total Loans (FTE) 1,286,480 15,103 4.67 % Total Commercial 426,564 4,459 4.16 % Loans (FTE) PPP Loans 227,828 2,342 4.08 % Commercial Loans 198,736 2,117 4.24 % (FTE) Commercial RE Loans 561,394 7,288 5.16 % Consumer Loans 298,522 3,356 4.47 % Total Investments 4,430,592 28,558 2.58 % (FTE) Total Interest-Bearing 439,677 112 0.10 % Cash Interest Expense Paid Total Earning Assets 6,156,749 481 0.03 % Total Interest-Bearing 3,034,240 481 0.06 % Liabilities Total Interest-Bearing 2,919,420 462 0.06 % Deposits Interest-Bearing 1,071,576 90 0.03 % Transaction Savings 1,688,031 246 0.06 % Time less than $100K 88,507 45 0.20 % Time greater than 71,306 81 0.45 % $100K Total Short-Term 114,820 19 0.07 % Borrowings Net Interest Income and Margin (FTE) $43,292 2.81 % 6. Noninterest Income. (dollars in thousands except per-share amounts) % Q4'2021 Q4'2020 Change Q3'2021 Service Charges on $3,580 $3,452 3.7 % $3,578 Deposits Merchant Processing 3,000 2,713 10.6 % 3,159 Services Debit Card Fees 1,727 1,643 5.1 % 1,740 Trust Fees 844 765 10.3 % 839 ATM Processing Fees 488 570 -14.4 % 573 Other Service Fees 449 457 -1.8 % 475 Financial Services 96 66 45.5 % 95 Commissions Gains on Sales of Real - 3,536 n/m - Property Other Noninterest Income 658 757 -13.1 % 823 Total Noninterest Income $10,842 $13,959 -22.3 % $11,282 Total Revenue (FTE) $53,959 $57,251 -5.8 % $55,234 Noninterest Income/ 20.1 % 24.4 % 20.4 % Revenue (FTE) Service Charges/Avg. 0.22 % 0.24 % 0.23 % Deposits (a) Total Revenues (FTE) Per Avg. Common Share (a) $7.97 $8.49 -6.1 % $8.16 % 12/31'21YTD 12/31'20YTD Change Service Charges on $13,697 $14,149 -3.2 % Deposits Merchant Processing 11,998 10,208 17.5 % Services Debit Card Fees 6,859 6,181 11.0 % Trust Fees 3,311 3,012 9.9 % ATM Processing Fees 2,280 2,273 0.3 % Other Service Fees 1,884 1,837 2.6 % Financial Services 356 372 -4.3 % Commissions Gains on Sales of Real - 3,536 -100.0 % Property Securities Gains 34 71 n/m Other Noninterest Income 2,926 3,998 -26.8 % Total Noninterest Income $43,345 $45,637 -5.0 % Total Revenue (FTE) $217,496 $213,319 2.0 % Noninterest Income/ 19.9 % 21.4 % Revenue (FTE) Service Charges/Avg. 0.22 % 0.27 % Deposits Total Revenues (FTE) Per Avg./ Common Share $8.10 $7.92 2.3 % 7. Noninterest Expense. (dollars in thousands) % Q4'2021 Q4'2020 Change Q3'2021 Salaries & Benefits $11,436 $12,291 -7.0 % $11,813 Occupancy and Equipment 4,692 4,900 -4.2 % 4,759 Outsourced Data 2,357 2,359 -0.1 % 2,429 Processing Professional Fees 757 722 4.8 % 724 Courier Service 572 502 13.9 % 534 Amortization of Identifiable 65 69 -5.8 % 67 Intangibles Other Noninterest 4,033 3,702 8.9 % 4,371 Expense Total Noninterest $23,912 $24,545 -2.6 % $24,697 Expense Noninterest Expense/ Avg. Earning Assets 1.37 % 1.59 % 1.45 % (a) Noninterest Expense/ 44.3 % 42.9 % 44.7 % Revenues (FTE) % 12/31'21YTD 12/31'20YTD Change Salaries & Benefits $48,011 $50,749 -5.4 % Occupancy and Equipment 19,139 19,637 -2.5 % Outsourced Data 9,601 9,426 1.9 % Processing Professional Fees 3,253 2,423 34.3 % Courier Service 2,177 2,001 8.8 % Amortization of Identifiable 269 287 -6.3 % Intangibles Other Noninterest 15,356 14,043 9.3 % Expense Total Noninterest $97,806 $98,566 -0.8 % Expense Noninterest Expense/ Avg. Earning Assets 1.47 % 1.71 % Noninterest Expense/ 45.0 % 46.2 % Revenues (FTE) 8. Allowance for Credit Losses. (dollars in thousands) % Q4'2021 Q4'2020 Change Q3'2021 Average Total Loans $1,097,698 $1,286,480 -14.7 % $1,176,114 Beginning of Period Allowance for Credit Losses on Loans $23,882 $24,142 -1.1 % $23,737 (ACLL) Provision for Credit - 7 n/m 2 Losses Net ACLL (Losses) (368 ) (295 ) 24.7 % 143 Recoveries End of Period ACLL $23,514 $23,854 -1.4 % $23,882 Gross ACLL Recoveries / Gross ACLL Losses 64 % 69 % 115 % Net ACLL Losses (Recoveries) / Avg. Total Loans (a) 0.13 % 0.09 % -0.05 % % 12/31'21YTD 12/31'20YTD Change Average Total Loans $1,195,135 $1,239,144 -3.6 % Prior Period ACLL $23,854 $19,484 22.4 % Adoption of ASU 2016-13 - 2,017 n/m (1) Beginning of Period ACLL 23,854 21,501 10.9 % Provision for Credit 2 4,307 n/m Losses Net ACLL Losses (342 ) (1,954 ) -82.5 % End of Period ACLL $23,514 $23,854 -1.4 % Gross ACLL Recoveries / Gross ACLL Losses 89 % 53 % Net ACLL Losses / Avg. Total Loans 0.03 % 0.16 % (dollars in thousands) % 12/31/21 12/31/20 Change 9/30/21 Allowance for Credit $23,514 $23,854 -1.4 % $23,882 Losses on Loans Allowance for Credit Losses on HTM Securities (2) 7 9 -22.3 % 7 Total Allowance for $23,521 $23,863 -1.4 % $23,889 Credit Losses Allowance for Unfunded Credit Commitments $201 $101 99.3 % $101 9. Credit Quality. (dollars in thousands) % 12/31/21 12/31/20 Change 9/30/21 Nonperforming Loans: Nonperforming $265 $526 -49.6 % $801 Nonaccrual Performing Nonaccrual 427 3,803 -88.8 % 436 Total Nonaccrual Loans 692 4,329 -84.0 % 1,237 90+ Days Past Due 339 450 -24.7 % 537 Accruing Loans Total $1,031 $4,779 -78.4 % $1,774 Total Loans Outstanding $1,068,126 $1,256,243 -15.0 % $1,132,472 Total Assets 7,461,026 6,747,931 10.6 % 7,403,573 Loans: Allowance for Credit $23,514 $23,854 -1.4 % $23,882 Losses on Loans Allowance for Credit Losses on Loans / Loans 2.20 % 1.90 % 2.11 % Nonperforming Loans/ 0.10 % 0.38 % 0.16 % Total Loans 10. Capital. (in thousands, except per-share amounts) % 12/31/21 12/31/20 Change 9/30/21 Shareholders' Equity $827,102 $844,809 -2.1 % $837,953 Total Assets 7,461,026 6,747,931 10.6 % 7,403,573 Shareholders' Equity/ Total Assets 11.09 % 12.52 % 11.32 % Shareholders' Equity/ Total Loans 77.43 % 67.25 % 73.99 % Tangible Common Equity 9.60 % 10.90 % 9.83 % Ratio Common Shares 26,866 26,807 0.2 % 26,866 Outstanding Common Equity Per Share $30.79 $31.51 -2.3 % $31.19 Market Value Per Common 57.73 55.29 4.4 % 56.26 Share (shares in thousands) % Q4'2021 Q4'2020 Change Q3'2021 Share Repurchase Programs: Total Shares - 91 n/m - Repurchased Average Repurchase $- $52.22 n/m $- Price Net Shares Repurchased - 91 n/m (1 ) (Issued) % 12/31'21YTD 12/31'20YTD Change Total Shares 4 319 n/m Repurchased Average Repurchase $61.09 $51.63 n/m Price Net Shares (Issued) (59 ) 255 n/m Repurchased 11. Period-End Balance Sheets. (unaudited, dollars in thousands) % 12/31/21 12/31/20 Change 9/30/21 Assets: Cash and Due from $1,132,085 $621,275 82.2 % $1,011,048 Banks Debt Securities 4,638,855 4,063,185 14.2 % 4,602,706 Available For Sale Debt Securities Held 306,396 515,589 -40.6 % 356,106 To Maturity (3) Loans 1,068,126 1,256,243 -15.0 % 1,132,472 Allowance For Credit (23,514 ) (23,854 ) -1.4 % (23,882 ) Losses on Loans Total Loans, net 1,044,612 1,232,389 -15.2 % 1,108,590 Premises and 31,155 32,813 -5.1 % 31,603 Equipment, net Identifiable 835 1,104 -24.3 % 900 Intangibles, net Goodwill 121,673 121,673 0.0 % 121,673 Other Assets 185,415 159,903 16.0 % 170,947 Total Assets $7,461,026 $6,747,931 10.6 % $7,403,573 Liabilities and Shareholders' Equity: Deposits: Noninterest-Bearing $3,069,080 $2,725,177 12.6 % $2,988,329 Interest-Bearing 1,260,869 1,102,601 14.4 % 1,257,460 Transaction Savings 1,940,395 1,703,812 13.9 % 1,894,290 Time 143,612 156,389 -8.2 % 148,882 Total Deposits 6,413,956 5,687,979 12.8 % 6,288,961 Short-Term Borrowed 146,246 102,545 42.6 % 119,102 Funds Other Liabilities 73,722 112,598 -34.5 % 157,557 Total Liabilities 6,633,924 5,903,122 12.4 % 6,565,620 Shareholders' Equity: Common Equity: Paid-In Capital 471,043 466,041 1.1 % 470,711 Accumulated Other Comprehensive 49,664 114,412 n/m 71,284 Income Retained Earnings 306,395 264,356 15.9 % 295,958 Total Shareholders' 827,102 844,809 -2.1 % 837,953 Equity Total Liabilities and Shareholders' Equity $7,461,026 $6,747,931 10.6 % $7,403,573 12. Income Statements. (unaudited, in thousands except per-share amounts) % Q4'2021 Q4'2020 Change Q3'2021 Interest & Fee Income: Loans $13,124 $14,999 -12.5 % $14,789 Equity Securities 129 110 17.3 % 109 Debt Securities 27,598 24,947 10.6 % 26,452 Available For Sale (4) Debt Securities Held To 1,824 2,793 -34.7 % 2,091 Maturity Interest-Bearing Cash 366 112 226.8 % 369 Total Interest & Fee 43,041 42,961 0.2 % 43,810 Income Interest Expense: Transaction Deposits 95 90 5.6 % 101 Savings Deposits 282 246 14.6 % 272 Time Deposits 102 126 -19.0 % 100 Short-Term Borrowed 25 19 31.5 % 19 Funds Total Interest Expense 504 481 4.8 % 492 Net Interest Income 42,537 42,480 0.1 % 43,318 Provision for Credit - - n/m - Losses Noninterest Income: Service Charges 3,580 3,452 3.7 % 3,578 Merchant Processing 3,000 2,713 10.6 % 3,159 Services Debit Card Fees 1,727 1,643 5.1 % 1,740 Trust Fees 844 765 10.3 % 839 ATM Processing Fees 488 570 -14.4 % 573 Other Service Fees 449 457 -1.8 % 475 Financial Services 96 66 45.5 % 95 Commissions Gains on Sales of Real - 3,536 n/m - Property Other Noninterest 658 757 -13.1 % 823 Income Total Noninterest Income 10,842 13,959 -22.3 % 11,282 Noninterest Expense: Salaries and Benefits 11,436 12,291 -7.0 % 11,813 Occupancy and 4,692 4,900 -4.2 % 4,759 Equipment Outsourced Data 2,357 2,359 -0.1 % 2,429 Processing Professional Fees 757 722 4.8 % 724 Courier Service 572 502 13.9 % 534 Amortization of 65 69 -5.8 % 67 Identifiable Intangibles Other Noninterest 4,033 3,702 8.9 % 4,371 Expense Total Noninterest 23,912 24,545 -2.6 % 24,697 Expense Income Before Income 29,467 31,894 -7.6 % 29,903 Taxes Income Tax Provision 7,747 8,056 -3.8 % 7,840 Net Income $21,720 $23,838 -8.9 % $22,063 Average Common Shares 26,866 26,838 0.1 % 26,866 Outstanding Diluted Common Shares 26,875 26,849 0.1 % 26,875 Outstanding Per Common Share Data: Basic Earnings $0.81 $0.89 -9.0 % $0.82 Diluted Earnings 0.81 0.89 -9.0 % 0.82 Dividends Paid 0.42 0.41 2.4 % 0.41 % 12/31'21YTD 12/31'20YTD Change Interest & Fee Income: Loans $57,558 $59,377 -3.1 % Equity Securities 458 419 9.3 % Debt Securities 105,420 91,343 15.4 % Available For Sale (4) Debt Securities Held To 8,875 13,552 -34.5 % Maturity Interest-Bearing Cash 1,132 1,165 -2.8 % Total Interest & Fee 173,443 165,856 4.6 % Income Interest Expense: Transaction Deposits 378 333 13.5 % Savings Deposits 1,067 925 15.4 % Time Deposits 432 512 -15.6 % Short-Term Borrowed 78 53 47.2 % Funds Other Borrowed Funds - 1 -100.0 % Total Interest Expense 1,955 1,824 7.2 % Net Interest Income 171,488 164,032 4.5 % Provision for Credit - 4,300 n/m Losses Noninterest Income: Service Charges 13,697 14,149 -3.2 % Merchant Processing 11,998 10,208 17.5 % Services Debit Card Fees 6,859 6,181 11.0 % Trust Fees 3,311 3,012 9.9 % ATM Processing Fees 2,280 2,273 0.3 % Other Service Fees 1,884 1,837 2.6 % Financial Services 356 372 -4.3 % Commissions Gains on Sales of Real - 3,536 n/m Property Securities Gains 34 71 n/m Other Operating 2,926 3,998 -26.8 % Total Noninterest Income 43,345 45,637 -5.0 % Noninterest Expense: Salaries and Benefits 48,011 50,749 -5.4 % Occupancy and 19,139 19,637 -2.5 % Equipment Outsourced Data 9,601 9,426 1.9 % Processing Professional Fees 3,253 2,423 34.3 % Courier Service 2,177 2,001 8.8 % Amortization of 269 287 -6.3 % Identifiable Intangibles Other Operating 15,356 14,043 9.3 % Total Noninterest 97,806 98,566 -0.8 % Expense Income Before Income 117,027 106,803 9.6 % Taxes Income Tax Provision 30,518 26,390 15.6 % Net Income $86,509 $80,413 7.6 % Average Common Shares 26,855 26,942 -0.3 % Outstanding Diluted Common Shares 26,870 26,960 -0.3 % Outstanding Per Common Share Data: Basic Earnings $3.22 $2.98 8.1 % Diluted Earnings 3.22 2.98 8.1 % Dividends Paid 1.65 1.64 0.6 % Footnotes and Abbreviations: (1) 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. (2) In the third quarter 2021, the Company recorded a $2 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 $9 thousand at June 30, 2021 to $7 thousand at September 30, 2021. (3) The Company adopted ASU 2016-13, effective January 1, 2020. Debt Securities Held To Maturity of $306,396 thousand at December 31, 2021, $356,106 thousand at September 30, 2021 and $515,589 thousand at December 31, 2020 are net of related reserve for expected credit losses of $7 thousand, $7 thousand and $9 thousand, respectively. (4) Interest income on Debt Securities Available For Sale included make-whole interest income on called corporate bonds of $732 thousand in the third quarter 2021, $1.4 million in the second quarter 2021 and $700 thousand in the first quarter 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