Australia markets open in 3 hours 35 minutes
  • ALL ORDS

    7,281.10
    -50.50 (-0.69%)
     
  • AUD/USD

    0.7726
    -0.0117 (-1.50%)
     
  • ASX 200

    7,044.90
    -52.10 (-0.73%)
     
  • OIL

    65.82
    +0.54 (+0.83%)
     
  • GOLD

    1,817.70
    -18.40 (-1.00%)
     
  • BTC-AUD

    70,280.99
    -3,658.27 (-4.95%)
     
  • CMC Crypto 200

    1,464.16
    -99.67 (-6.37%)
     

Westamerica Bancorporation Reports First Quarter 2021 Financial Results

  • Oops!
    Something went wrong.
    Please try again later.
Westamerica Bancorporation
·19-min read
  • Oops!
    Something went wrong.
    Please try again later.

SAN RAFAEL, Calif., April 15, 2021 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the first quarter 2021 of $20.1 million and diluted earnings per common share ("EPS") of $0.75. First quarter 2021 results include “make-whole” interest income on corporate bonds redeemed prior to maturity, which increased EPS $0.02. These results compare to net income of $23.8 million and EPS of $0.89 for the fourth quarter 2020, which included a gain on sale of a closed branch building, “make-whole” interest income on corporate bonds redeemed before maturity, and a customary adjustment to the tax provision for filed 2019 tax returns, which increased EPS $0.15.

“Westamerica continues to support our customers during the pandemic. We have kept our branches open to continue providing full-service, and during the first quarter 2021, we originated $91 million in loans under the second round of the Paycheck Protection Program. Operating expenses have remained stable with first quarter 2020 pre-pandemic levels, and in the first quarter 2021 operating expenses represented only 47 percent of revenues on a fully-taxable equivalent basis. The predominance of checking and savings accounts within Westamerica’s deposit base resulted in a very low 0.03 percent annualized cost of funding our loan and bond portfolios during the first quarter 2021. Credit quality remained stable with nonperforming loans of $4.1 million at March 31, 2021,” said Chairman, President and CEO David Payne. “First quarter 2021 results generated an annualized 11.1 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 $42.6 million for the first quarter 2021, including “make-whole” interest income on corporate bonds redeemed prior to maturity of $700 thousand. First quarter 2021 net interest income (FTE) compares to $43.3 million for the fourth quarter 2020, which included “make-whole” interest income on corporate bonds redeemed prior to maturity of $1.9 million. Average total deposits grew $92 million from the fourth quarter 2020 to the first quarter 2021. Checking and savings deposits represented ninety-seven percent of the Company’s average deposit base during the first quarter 2021 resulting in a 0.03 percent annualized cost of funding interest-earning assets.

At March 31, 2021, nonperforming loans totaled $4.1 million and the allowance for credit losses on loans was $23.5 million. The Company continues to work with loan customers requesting deferral of loan payments due to economic weakness caused by the pandemic. At March 31, 2021, loans with deferred payments included consumer loans totaling $1.8 million and one hospitality industry commercial real estate loan totaling $2.3 million (the commercial real estate loan borrower re-commenced payments on April 1, 2021).

Noninterest income for the first quarter 2021 totaled $10.2 million, compared to noninterest income for the fourth quarter 2020 of $14.0 million, which included a $3.5 million gain on sale of a closed branch building.

Noninterest expense for the first quarter 2021 was $24.9 million compared to $24.5 million for the fourth quarter 2020, and $24.7 million for the first quarter 2020.

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, 2020 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 April 15, 2021

WESTAMERICA BANCORPORATION

FINANCIAL HIGHLIGHTS

March 31, 2021

1. Net Income Summary.

(in thousands except per-share amounts)

%

Q1'2021

Q1'2020

Change

Q4'2020

Net Interest and Fee Income (FTE)

$

42,583

$

40,547

5.0

%

$

43,292

Provision for Credit Losses

-

4,300

n/m

-

Noninterest Income

10,189

11,648

-12.5

%

13,959

Noninterest Expense

24,906

24,664

1.0

%

24,545

Income Before Taxes (FTE)

27,866

23,231

20.0

%

32,706

Income Tax Provision (FTE)

7,719

6,269

23.1

%

8,868

Net Income

$

20,147

$

16,962

18.8

%

$

23,838

Average Common Shares Outstanding

26,821

27,068

-0.9

%

26,838

Diluted Average Common Shares

26,842

27,139

-1.1

%

26,849

Operating Ratios:

Basic Earnings Per Common Share

$

0.75

$

0.63

19.0

%

$

0.89

Diluted Earnings Per Common Share

0.75

0.63

19.0

%

0.89

Return On Assets (a)

1.23

%

1.21

%

1.44

%

Return On Common Equity (a)

11.1

%

9.7

%

13.2

%

Net Interest Margin (FTE) (a)

2.74

%

3.10

%

2.81

%

Efficiency Ratio (FTE)

47.2

%

47.3

%

42.9

%

Dividends Paid Per Common Share

$

0.41

$

0.41

0.0

%

$

0.41

Common Dividend Payout Ratio

55

%

66

%

46

%

2. Net Interest Income.

(dollars in thousands)

%

Q1'2021

Q1'2020

Change

Q4'2020

Interest and Fee Income (FTE)

$

43,058

$

40,989

5.0

%

$

43,773

Interest Expense

475

442

7.5

%

481

Net Interest and Fee Income (FTE)

$

42,583

$

40,547

5.0

%

$

43,292

Average Earning Assets

$

6,244,622

$

5,242,142

19.1

%

$

6,156,749

Average Interest-

Bearing Liabilities

3,130,227

2,648,581

18.2

%

3,034,240

Yield on Earning Assets (FTE) (a)

2.77

%

3.13

%

2.84

%

Cost of Funds (a)

0.03

%

0.03

%

0.03

%

Net Interest Margin (FTE) (a)

2.74

%

3.10

%

2.81

%

Interest Expense/

Interest-Bearing Liabilities (a)

0.06

%

0.07

%

0.06

%

Net Interest Spread (FTE) (a)

2.71

%

3.06

%

2.78

%

3. Loans & Other Earning Assets.

(average volume, dollars in thousands)

%

Q1'2021

Q1'2020

Change

Q4'2020

Total Assets

$

6,650,164

$

5,655,460

17.6

%

$

6,562,753

Total Earning Assets

6,244,622

5,242,142

19.1

%

6,156,749

Total Loans

1,251,540

1,123,934

11.4

%

1,286,480

Total Commercial Loans

395,473

223,383

77.0

%

426,564

Paycheck Protection Program (PPP) Loans

188,971

-

n/m

227,828

Commercial Loans

206,502

223,383

-7.6

%

198,736

Commercial RE Loans

559,191

579,743

-3.5

%

561,394

Consumer Loans

296,876

320,808

-7.5

%

298,522

Total Investment Securities

4,440,621

3,845,885

15.5

%

4,430,592

Debt Securities Available For Sale

3,947,549

3,135,743

25.9

%

3,884,451

Debt Securities Held To Maturity

493,072

710,142

-30.6

%

546,141

Total Interest-Bearing Cash

552,461

272,323

102.9

%

439,677

Loans/Deposits

21.8

%

23.3

%

22.7

%

4. Deposits, Other Interest-Bearing Liabilities & Equity.

(average volume, dollars in thousands)

%

Q1'2021

Q1'2020

Change

Q4'2020

Total Deposits

$

5,748,070

$

4,828,988

19.0

%

$

5,655,768

Noninterest Demand

2,713,632

2,222,737

22.1

%

2,736,348

Interest-Bearing Transaction

1,130,760

941,720

20.1

%

1,071,576

Savings

1,746,815

1,496,362

16.7

%

1,688,031

Time greater than $100K

71,241

73,849

-3.5

%

71,306

Time less than $100K

85,622

94,320

-9.2

%

88,507

Total Short-Term Borrowings

95,575

42,330

125.8

%

114,820

Other Borrowed Funds

214

-

n/m

-

Shareholders' Equity

735,496

705,330

4.3

%

720,473

Demand Deposits/

Total Deposits

47.2

%

46.0

%

48.4

%

Transaction & Savings

Deposits / Total Deposits

97.3

%

96.5

%

97.2

%

5. Interest Yields Earned & Rates Paid.

(dollars in thousands)

Q1'2021

Average

Income/

Yield (a) /

Volume

Expense

Rate (a)

Interest & Fee Income Earned

Total Earning Assets (FTE)

$

6,244,622

$

43,058

2.77

%

Total Loans (FTE)

1,251,540

14,684

4.76

%

Total Commercial Loans (FTE)

395,473

4,005

4.11

%

PPP Loans

188,971

1,853

3.98

%

Commercial Loans (FTE)

206,502

2,152

4.23

%

Commercial RE Loans

559,191

7,341

5.32

%

Consumer Loans

296,876

3,338

4.56

%

Total Investments (FTE)

4,440,621

28,236

2.54

%

Total Interest-Bearing Cash

552,461

138

0.10

%

Interest Expense Paid

Total Earning Assets

6,244,622

475

0.03

%

Total Interest-Bearing Liabilities

3,130,227

475

0.06

%

Total Interest-Bearing Deposits

3,034,438

459

0.06

%

Interest-Bearing Transaction

1,130,760

89

0.03

%

Savings

1,746,815

250

0.06

%

Time less than $100K

85,622

42

0.20

%

Time greater than $100K

71,241

78

0.44

%

Total Short-Term Borrowings

95,575

16

0.07

%

Other Borrowed Funds

214

-

0.35

%

Net Interest Income and

Margin (FTE)

$

42,583

2.74

%

Q1'2020

Average

Income/

Yield (a) /

Volume

Expense

Rate (a)

Interest & Fee Income Earned

Total Earning Assets (FTE)

$

5,242,142

$

40,989

3.13

%

Total Loans (FTE)

1,123,934

13,910

4.98

%

Commercial Loans (FTE)

223,383

2,776

5.00

%

Commercial RE Loans

579,743

7,599

5.27

%

Consumer Loans

320,808

3,535

4.43

%

Total Investments (FTE)

3,845,885

26,223

2.73

%

Total Interest-Bearing Cash

272,323

856

1.24

%

Interest Expense Paid

Total Earning Assets

5,242,142

442

0.03

%

Total Interest-Bearing Liabilities

2,648,581

442

0.07

%

Total Interest-Bearing Deposits

2,606,251

434

0.07

%

Interest-Bearing Transaction

941,720

84

0.04

%

Savings

1,496,362

217

0.06

%

Time less than $100K

94,320

54

0.23

%

Time greater than $100K

73,849

79

0.43

%

Total Short-Term Borrowings

42,330

8

0.07

%

Net Interest Income and

Margin (FTE)

$

40,547

3.10

%

6. Noninterest Income.

(dollars in thousands except per-share amounts)

%

Q1'2021

Q1'2020

Change

Q4'2020

Service Charges on Deposits

$

3,304

$

4,248

-22.2

%

$

3,452

Merchant Processing Services

2,560

2,358

8.6

%

2,713

Debit Card Fees

1,601

1,468

9.0

%

1,643

Trust Fees

801

777

3.1

%

765

ATM Processing Fees

601

579

3.8

%

570

Other Service Fees

469

506

-7.2

%

457

Financial Services Commissions

70

125

-44.0

%

66

Gains on Sales of Real Property

-

-

n/m

3,536

Other Noninterest Income (5)

783

1,587

-50.7

%

757

Total Noninterest Income

$

10,189

$

11,648

-12.5

%

$

13,959

Total Revenue (FTE)

$

52,772

$

52,195

1.1

%

$

57,251

Noninterest Income/Revenue (FTE)

19.3

%

22.3

%

24.4

%

Service Charges/Avg. Deposits (a)

0.23

%

0.35

%

0.24

%

Total Revenues (FTE) Per Avg.

Common Share (a)

$

7.98

$

7.76

2.9

%

$

8.49

7. Noninterest Expense.

(dollars in thousands)

%

Q1'2021

Q1'2020

Change

Q4'2020

Salaries & Benefits

$

12,665

$

13,018

-2.7

%

$

12,291

Occupancy and Equipment

4,880

4,932

-1.1

%

4,900

Outsourced Data Processing

2,390

2,405

-0.6

%

2,359

Professional Fees

942

389

142.2

%

722

Courier Service

504

491

2.6

%

502

Amortization of

Identifiable Intangibles

69

73

-5.5

%

69

Other Noninterest Expense

3,456

3,356

3.0

%

3,702

Total Noninterest Expense

$

24,906

$

24,664

1.0

%

$

24,545

Noninterest Expense/

Avg. Earning Assets (a)

1.62

%

1.89

%

1.59

%

Noninterest Expense/Revenues (FTE)

47.2

%

47.3

%

42.9

%

8. Allowance for Credit Losses.

(dollars in thousands)

%

Q1'2021

Q1'2020

Change

Q4'2020

Average Total Loans

$

1,251,540

$

1,123,934

11.4

%

$

1,286,480

Beginning of Period Allowance for

Credit Losses on Loans (ACLL)

$

23,854

$

19,484

22.4

%

$

24,142

Adoption of ASU 2016-13(1)

-

2,017

n/m

-

Beginning of Period ACLL

23,854

21,501

10.9

%

24,142

Provision for Credit Losses

-

4,300

n/m

7

Net ACLL Losses

(371

)

(997

)

-62.8

%

(295

)

End of Period ACLL

$

23,483

$

24,804

-5.3

%

$

23,854

Gross ACLL Recoveries /

Gross ACLL Losses

60

%

37

%

69

%

Net ACLL Losses /

Avg. Total Loans (a)

0.12

%

0.36

%

0.09

%

(dollars in thousands)

%

3/31/21

3/31/20

Change

12/31/20

Allowance for Credit Losses on Loans

$

23,483

$

24,804

-5.3

%

$

23,854

Allowance for Credit Losses on

HTM Securities (2)

9

16

-44.6

%

9

Total Allowance for Credit Losses

$

23,492

$

24,820

-5.4

%

$

23,863

Allowance for Unfunded

Credit Commitments

101

53

90.0

%

101

9. Credit Quality.

(dollars in thousands)

%

3/31/21

3/31/20

Change

12/31/20

Nonperforming Loans:

Nonperforming Nonaccrual

$

402

$

419

-4.1

%

$

526

Performing Nonaccrual

3,569

3,933

-9.3

%

3,803

Total Nonaccrual Loans

3,971

4,352

-8.8

%

4,329

90+ Days Past Due Accruing Loans

132

178

-25.8

%

450

Total

4,103

4,530

-9.4

%

4,779

Repossessed Loan Collateral

-

43

n/m

-

Total Nonperforming Assets

$

4,103

$

4,573

-10.3

%

$

4,779

Total Loans Outstanding

$

1,293,756

$

1,121,243

15.4

%

$

1,256,243

Total Assets

6,912,481

5,628,126

22.8

%

6,747,931

Loans:

Allowance for Credit Losses on Loans

$

23,483

$

24,804

-5.3

%

$

23,854

Allowance for Credit Losses on Loans /

Loans

1.82

%

2.21

%

1.90

%

Nonperforming Loans/Total Loans

0.32

%

0.40

%

0.38

%

10. Capital.

(in thousands, except per-share amounts)

%

3/31/21

3/31/20

Change

12/31/20

Shareholders' Equity

$

812,132

$

705,546

15.1

%

$

844,809

Total Assets

6,912,481

5,628,126

22.8

%

6,747,931

Shareholders' Equity/

Total Assets

11.75

%

12.54

%

12.52

%

Shareholders' Equity/

Total Loans

62.77

%

62.93

%

67.25

%

Tangible Common Equity Ratio

10.15

%

10.58

%

10.90

%

Common Shares Outstanding

26,864

26,932

-0.3

%

26,807

Common Equity Per Share

$

30.23

$

26.20

15.4

%

$

31.51

Market Value Per Common Share

62.78

58.78

6.8

%

55.29

(shares in thousands)

%

Q1'2021

Q1'2020

Change

Q4'2020

Total Shares Repurchased

4

180

n/m

91

Average Repurchase Price

$

61.09

$

51.52

n/m

$

52.22

Net Shares (Issued) Repurchased

(57

)

130

n/m

91

11. Period-End Balance Sheets.

(unaudited, dollars in thousands)

%

3/31/21

3/31/20

Change

12/31/20

Assets:

Cash and Due from Banks

$

866,457

$

304,628

184.4

%

$

621,275

Investment Securities:

Debt Securities Available For Sale

3,990,570

3,210,689

24.3

%

4,063,185

Debt Securities Held To Maturity (3)

469,259

681,821

-31.2

%

515,589

Loans

1,293,756

1,121,243

15.4

%

1,256,243

Allowance For Credit Losses on Loans

(23,483

)

(24,804

)

-5.3

%

(23,854

)

Total Loans, net

1,270,273

1,096,439

15.9

%

1,232,389

Other Real Estate Owned

-

43

n/m

-

Premises and Equipment, net

32,216

35,403

-9.0

%

32,813

Identifiable Intangibles, net

1,035

1,318

-21.5

%

1,105

Goodwill

121,673

121,673

0.0

%

121,673

Other Assets

160,998

176,112

-8.6

%

159,903

Total Assets

$

6,912,481

$

5,628,126

22.8

%

$

6,747,931

Liabilities and Shareholders' Equity:

Deposits:

Noninterest-Bearing

$

2,798,542

$

2,183,283

28.2

%

$

2,725,177

Interest-Bearing Transaction

1,179,484

936,516

25.9

%

1,102,601

Savings

1,791,636

1,514,431

18.3

%

1,703,812

Time

154,171

165,196

-6.7

%

156,389

Total Deposits

5,923,833

4,799,426

23.4

%

5,687,979

Short-Term Borrowed Funds

95,479

52,664

81.3

%

102,545

Other Borrowed Funds

1,681

-

n/m

-

Other Liabilities

79,356

70,490

12.6

%

112,598

Total Liabilities

6,100,349

4,922,580

23.9

%

5,903,122

Shareholders' Equity:

Common Equity:

Paid-In Capital

469,885

466,472

0.7

%

466,041

Accumulated Other

Comprehensive Income

68,901

171

n/m

114,412

Retained Earnings

273,346

238,903

14.4

%

264,356

Total Shareholders' Equity

812,132

705,546

15.1

%

844,809

Total Liabilities and

Shareholders' Equity

$

6,912,481

$

5,628,126

22.8

%

$

6,747,931

12. Income Statements.

(unaudited, in thousands except per-share amounts)

%

Q1'2021

Q1'2020

Change

Q4'2020

Interest & Fee Income:

Loans

$

14,581

$

13,809

5.6

%

$

14,999

Investment Securities:

Equity Securities

110

103

6.9

%

110

Debt Securities Available For Sale (4)

24,889

21,315

16.8

%

24,947

Debt Securities Held To Maturity

2,598

3,908

-33.5

%

2,793

Interest-Bearing Cash

138

856

-83.9

%

112

Total Interest & Fee Income

42,316

39,991

5.8

%

42,961

Interest Expense:

Transaction Deposits

89

84

6.5

%

90

Savings Deposits

250

217

15.0

%

246

Time Deposits

120

133

-9.9

%

126

Short-Term Borrowed Funds

16

8

99.9

%

19

Total Interest Expense

475

442

7.4

%

481

Net Interest Income

41,841

39,549

5.8

%

42,480

Provision for Credit Losses

-

4,300

n/m

-

Noninterest Income:

Service Charges

3,304

4,248

-22.2

%

3,452

Merchant Processing Services

2,560

2,358

8.6

%

2,713

Debit Card Fees

1,601

1,468

9.0

%

1,643

Trust Fees

801

777

3.1

%

765

ATM Processing Fees

601

579

3.8

%

570

Other Service Fees

469

506

-7.2

%

457

Financial Services Commissions

70

125

-44.0

%

66

Gains on Sales of Real Property

-

-

n/m

3,536

Other Noninterest Income (5)

783

1,587

-50.7

%

757

Total Noninterest Income

10,189

11,648

-12.5

%

13,959

Noninterest Expense:

Salaries and Benefits

12,665

13,018

-2.7

%

12,291

Occupancy and Equipment

4,880

4,932

-1.1

%

4,900

Outsourced Data Processing

2,390

2,405

-0.6

%

2,359

Professional Fees

942

389

142.2

%

722

Courier Service

504

491

2.6

%

502

Amortization of Identifiable Intangibles

69

73

-5.5

%

69

Other Noninterest Expense

3,456

3,356

3.0

%

3,702

Total Noninterest Expense

24,906

24,664

1.0

%

24,545

Income Before Income Taxes

27,124

22,233

22.0

%

31,894

Income Tax Provision

6,977

5,271

32.4

%

8,056

Net Income

$

20,147

$

16,962

18.8

%

$

23,838

Average Common Shares Outstanding

26,821

27,068

-0.9

%

26,838

Diluted Common Shares Outstanding

26,842

27,139

-1.1

%

26,849

Per Common Share Data:

Basic Earnings

$

0.75

$

0.63

19.0

%

$

0.89

Diluted Earnings

0.75

0.63

19.0

%

0.89

Dividends Paid

0.41

0.41

0.0

%

0.41

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 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.

(3) The Company adopted ASU 2016-13, effective January 1, 2020. Debt Securities Held To Maturity of $469,259 thousand at March 31, 2021, $515,589 thousand at December 31, 2020 and $681,821 thousand at March 31, 2020 are net of related reserve for expected credit losses of $9 thousand, $9 thousand and $16 thousand, respectively.

(4) Interest income on Debt Securities Available For Sale included make-whole interest income on called corporate bonds of $700 thousand in the first quarter 2021 and $1.9 million in the fourth quarter 2020.

(5) 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.