Westamerica Bancorporation Reports First Quarter 2022 Financial Results

Westamerica Bancorporation

SAN RAFAEL, Calif., April 21, 2022 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the first quarter 2022 of $22.6 million and diluted earnings per common share ("EPS") of $0.84. First quarter 2022 results compare to net income of $21.7 million and EPS of $0.81 for the fourth quarter 2021.

"Westamerica is well positioned for rising interest rates. The Company’s interest-earning assets include meaningful amounts of instruments with variable interest rates, and average checking and savings deposits represented ninety-eight percent of the Company’s deposit base for the first quarter 2022, demonstrating minimal reliance on higher-costing time deposits. Operating expenses remained well managed in the first quarter 2022, delivering fifty-five percent of revenue to pre-tax income. Credit quality remained solid with nonperforming loans of $915 thousand at March 31, 2022,” said Chairman, President and CEO David Payne. “First quarter 2022 results generated an annualized 11.8 percent return on average common equity. Shareholders were paid a $0.42 per common share dividend during the first quarter 2022, representing fifty percent of diluted earnings per share,” concluded Payne.

Net interest income on a fully-taxable equivalent (FTE) basis was $43.8 million for the first quarter 2022, compared to $43.1 million for the fourth quarter 2021. Interest income on Paycheck Protection Program (“PPP”) loans was $849 thousand for the first quarter 2022, compared to $1.2 million for the fourth quarter 2021.

Interest-earning assets with variable interest rates at March 31, 2022 included $1.6 billion in collateralized loan obligations for which interest rates reset quarterly, and $922 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 March 31, 2022, nonperforming loans totaled $915 thousand and the allowance for credit losses on loans was $22.9 million.

Noninterest income for the first quarter 2022 totaled $11.6 million, compared to noninterest income for the fourth quarter 2021 of $10.8 million. Noninterest income for the first quarter 2022 included a $1.2 million reconciling payment from a payments network.

Noninterest expenses for the first quarter 2022 was $24.9 million compared to $23.9 million for the fourth quarter 2021; the higher first quarter noninterest expenses were primarily the seasonal increase in payroll taxes, wage and salary adjustments to comply with California minimum wage laws, and higher estimated operating losses on limited partnership investments in low-income housing properties.

The fully-tax equivalent (FTE) tax rate for the first quarter 2022 was 25.9 percent, compared to 27.7 percent for the fourth quarter 2021; the lower first quarter tax rate is primarily attributable to higher estimated tax credits from limited partnership investments in low-income housing properties.

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 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 April 21, 2022
WESTAMERICA BANCORPORATION
FINANCIAL HIGHLIGHTS
March 31, 2022
1. Net Income Summary.
		(in thousands except per-share amounts)
								%
		Q1'2022			Q1'2021			Change		Q4'2021
	Net Interest and Fee Income (FTE)	$43,807			$42,583			2.9	%	$43,117
	Provision for Credit Losses		-			-		n/m			-
	Noninterest Income(1)		11,576			10,189		13.6	%		10,842
	Noninterest Expense		24,875			24,906		-0.1	%		23,912
	Income Before Taxes (FTE)		30,508			27,866		9.5	%		30,047
	Income Tax Provision (FTE)		7,892			7,719		2.2	%		8,327
	Net Income	$22,616			$20,147			12.3	%	$21,720
	Average Common Shares Outstanding		26,870			26,821		0.2	%		26,866
	Diluted Average Common Shares		26,885			26,842		0.2	%		26,875
	Operating Ratios:
	Basic Earnings Per Common Share	$0.84			$0.75			12.0	%	$0.81
	Diluted Earnings Per Common Share		0.84			0.75		12.0	%		0.81
	Return On Assets (a)		1.24	%		1.23	%				1.17	%
	Return On Common Equity (a)		11.8	%		11.1	%				11.2	%
	Net Interest Margin (FTE) (a)		2.51	%		2.74	%				2.49	%
	Efficiency Ratio (FTE)		44.9	%		47.2	%				44.3	%
	Dividends Paid Per Common Share	$0.42			$0.41			2.4	%	$0.42
	Common Dividend Payout Ratio		50	%		55	%				52	%
2. Net Interest Income.
		(dollars in thousands)
								%
		Q1'2022			Q1'2021			Change		Q4'2021
	Interest and Fee Income (FTE)	$44,287			$43,058			2.9	%	$43,621
	Interest Expense		480			475		1.1	%		504
	Net Interest and Fee Income (FTE)	$43,807			$42,583			2.9	%	$43,117
	Average Earning Assets	$6,998,234			$6,244,622			12.1	%	$6,919,528
	Average Interest-
	Bearing Liabilities		3,546,146			3,130,227		13.3	%		3,468,111
	Yield on Earning Assets (FTE) (a)		2.54	%		2.77	%				2.52	%
	Cost of Funds (a)		0.03	%		0.03	%				0.03	%
	Net Interest Margin (FTE) (a)		2.51	%		2.74	%				2.49	%
	Interest Expense/
	Interest-Bearing Liabilities (a)		0.05	%		0.06	%				0.06	%
	Net Interest Spread (FTE) (a)		2.49	%		2.71	%				2.46	%
3. Loans & Other Earning Assets.
		(average volume, dollars in thousands)
								%
		Q1'2022			Q1'2021			Change		Q4'2021
	Total Assets	$7,406,321			$6,650,164			11.4	%	$7,334,977
	Total Earning Assets		6,998,234			6,244,622		12.1	%		6,919,528
	Total Loans		1,029,724			1,251,540		-17.7	%		1,097,698
	Total Commercial Loans		207,901			395,473		-47.4	%		259,007
	Paycheck Protection Program (PPP) Loans		35,871			188,971		-81.0	%		68,870
	Commercial Loans		172,030			206,502		-16.7	%		190,137
	Commercial RE Loans		524,040			559,191		-6.3	%		538,177
	Consumer Loans		297,783			296,876		0.3	%		300,514
	Total Investment Securities		4,947,846			4,440,621		11.4	%		4,866,476
	Debt Securities Available For Sale		4,655,983			3,947,549		17.9	%		4,533,494
	Debt Securities Held To Maturity		291,863			493,072		-40.8	%		332,982
	Total Interest-Bearing Cash		1,020,664			552,461		84.7	%		955,354
	Loans/Deposits		16.1	%		21.8	%				17.3	%
4. Deposits, Other Interest-Bearing Liabilities & Equity.
		(average volume, dollars in thousands)
								%
		Q1'2022			Q1'2021			Change		Q4'2021
	Total Deposits	$6,393,458			$5,748,070			11.2	%	$6,349,137
	Noninterest Demand		3,005,065			2,713,632		10.7	%		3,022,787
	Interest-Bearing Transaction		1,265,100			1,130,760		11.9	%		1,245,385
	Savings		1,980,092			1,746,815		13.4	%		1,934,220
	Time greater than $100K		64,172			71,241		-9.9	%		65,920
	Time less than $100K		79,029			85,622		-7.7	%		80,825
	Total Short-Term Borrowings		157,753			95,575		65.1	%		141,761
	Other Borrowed Funds		-			214		-100.0	%		-
	Shareholders' Equity		776,225			735,496		5.5	%		766,358
	Demand Deposits/
	Total Deposits		47.0	%		47.2	%				47.6	%
	Transaction & Savings
	Deposits / Total Deposits		97.8	%		97.3	%				97.7	%
5. Interest Yields Earned & Rates Paid.
		(dollars in thousands)
		Q1'2022
		Average			Income/			Yield (a) /
		Volume			Expense			Rate (a)
	Interest & Fee Income Earned
	Total Earning Assets (FTE)	$6,998,234			$44,287			2.54	%
	Total Loans (FTE)		1,029,724			13,038		5.14	%
	Total Commercial Loans (FTE)		207,901			2,843		5.55	%
	PPP Loans		35,871			849		9.60	%
	Commercial Loans (FTE)		172,030			1,994		4.70	%
	Commercial RE Loans		524,040			6,731		5.21	%
	Consumer Loans		297,783			3,464		4.72	%
	Total Investments (FTE)		4,947,846			30,770		2.49	%
	Total Debt Securities Available For Sale (FTE)		4,655,983			28,862		2.48	%
	Corporate Securities		2,701,476			18,488		2.74	%
	Collateralized Loan Obligations		1,464,266			7,045		1.92	%
	Agency Mortgage Backed Securities		385,900			2,256		2.34	%
	Obligations of States and Political Subdivisions (FTE)		89,998			694		3.08	%
	Other Debt Securities Available For Sale (FTE)		14,343			379		10.56	%
	Total Debt Securities Held To Maturity (FTE)		291,863			1,908		2.61	%
	Agency Mortgage Backed Securities		141,733			646		1.82	%
	Obligations of States and Political Subdivisions (FTE)		150,130			1,262		3.36	%
	Total Interest-Bearing Cash		1,020,664			479		0.19	%
	Interest Expense Paid
	Total Earning Assets		6,998,234			480		0.03	%
	Total Interest-Bearing Liabilities		3,546,146			480		0.05	%
	Total Interest-Bearing Deposits		3,388,393			452		0.05	%
	Interest-Bearing Transaction		1,265,100			88		0.03	%
	Savings		1,980,092			283		0.06	%
	Time less than $100K		79,029			40		0.21	%
	Time greater than $100K		64,172			41		0.26	%
	Total Short-Term Borrowings		157,753			28		0.07	%
	Net Interest Income and
	Margin (FTE)				$43,807			2.51	%
		(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 Debt Securities Available For Sale (FTE)		3,947,549			25,190		2.55	%
	Corporate Securities		2,028,885			15,417		3.04	%
	Collateralized Loan Obligations		1,187,138			6,171		2.08	%
	Agency Mortgage Backed Securities		599,690			2,409		1.61	%
	Obligations of States and Political Subdivisions (FTE)		102,742			824		3.21	%
	Other Debt Securities Available For Sale (FTE)		29,094			369		5.07	%
	Total Debt Securities Held To Maturity (FTE)		493,072			3,046		2.47	%
	Agency Mortgage Backed Securities		228,768			900		1.57	%
	Obligations of States and Political Subdivisions (FTE)		264,304			2,146		3.25	%
	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	%
6. Noninterest Income.
		(dollars in thousands except per-share amounts)
								%
		Q1'2022			Q1'2021			Change		Q4'2021
	Service Charges on Deposits	$3,582			$3,304			8.4	%	$3,580
	Merchant Processing Services		2,623			2,560		2.5	%		3,000
	Debit Card Fees(1)		2,872			1,601		79.4	%		1,727
	Trust Fees		843			801		5.2	%		844
	ATM Processing Fees		451			601		-25.0	%		488
	Other Service Fees		449			469		-4.2	%		449
	Financial Services Commissions		117			70		67.1	%		96
	Other Noninterest Income		639			783		-18.4	%		658
	Total Noninterest Income	$11,576			$10,189			13.6	%	$10,842
	Total Revenue (FTE)	$55,383			$52,772			4.9	%	$53,959
	Noninterest Income/Revenue (FTE)		20.9	%		19.3	%				20.1	%
	Service Charges/Avg. Deposits (a)		0.23	%		0.23	%				0.22	%
	Total Revenues (FTE) Per Avg.
	Common Share (a)	$8.36			$7.98			4.8	%	$7.97
7. Noninterest Expense.
		(dollars in thousands)
								%
		Q1'2022			Q1'2021			Change		Q4'2021
	Salaries & Benefits	$11,920			$12,665			-5.9	%	$11,436
	Occupancy and Equipment		4,746			4,880		-2.7	%		4,692
	Outsourced Data Processing		2,437			2,390		2.0	%		2,357
	Professional Fees		736			942		-21.9	%		757
	Courier Service		582			504		15.5	%		572
	Amortization of
	Identifiable Intangibles		64			69		-7.2	%		65
	Other Noninterest Expense		4,390			3,456		27.0	%		4,033
	Total Noninterest Expense	$24,875			$24,906			-0.1	%	$23,912
	Noninterest Expense/
	Avg. Earning Assets (a)		1.44	%		1.62	%				1.37	%
	Noninterest Expense/Revenues (FTE)		44.9	%		47.2	%				44.3	%
8. Allowance for Credit Losses.
		(dollars in thousands)
								%
		Q1'2022			Q1'2021			Change		Q4'2021
	Average Total Loans	$1,029,724			$1,251,540			-17.7	%	$1,097,698
	Beginning of Period Allowance for
	Credit Losses on Loans (ACLL)	$23,514			$23,854			-1.4	%	$23,882
	Provision for Credit Losses		-			-		n/m			-
	Net ACLL (Losses)		(589	)		(371	)	58.8	%		(368	)
	End of Period ACLL	$22,925			$23,483			-2.4	%	$23,514
	Gross ACLL Recoveries /
	Gross ACLL Losses		51	%		60	%				64	%
	Net ACLL Losses /
	Avg. Total Loans (a)		0.23	%		0.12	%				0.13	%
		(dollars in thousands)
								%
		3/31/22			3/31/21			Change		12/31/21
	Allowance for Credit Losses on Loans	$22,925			$23,483			-2.4	%	$23,514
	Allowance for Credit Losses on
	HTM Securities(2)		7			9		-22.3	%		7
	Total Allowance for Credit Losses	$22,932			$23,492			-2.4	%	$23,521
	Allowance for Unfunded
	Credit Commitments	$201			$101			99.3	%	$201
9. Credit Quality.
		(dollars in thousands)
								%
		3/31/22			3/31/21			Change		12/31/21
	Nonperforming Loans:
	Nonperforming Nonaccrual	$63			$402			-84.3	%	$265
	Performing Nonaccrual		421			3,569		-88.2	%		427
	Total Nonaccrual Loans		484			3,971		-87.8	%		692
	90+ Days Past Due Accruing Loans		431			132		226.5	%		339
	Total Nonaccrual Loans	$915			$4,103			-77.7	%	$1,031
	Total Loans Outstanding	$1,002,514			$1,293,756			-22.5	%	$1,068,126
	Total Assets		7,306,417			6,912,481		5.7	%		7,461,026
	Loans:
	Allowance for Credit Losses on Loans	$22,925			$23,483			-2.4	%	$23,514
	Allowance for Credit Losses on Loans /
	Loans		2.29	%		1.82	%				2.20	%
	Nonperforming Loans/Total Loans		0.09	%		0.32	%				0.10	%
10. Capital.
		(in thousands, except per-share amounts)
								%
		3/31/22			3/31/21			Change		12/31/21
	Shareholders' Equity	$701,744			$812,132			-13.6	%	$827,102
	Total Assets		7,306,417			6,912,481		5.7	%		7,461,026
	Shareholders' Equity/
	Total Assets		9.60	%		11.75	%				11.09	%
	Shareholders' Equity/
	Total Loans		70.00	%		62.77	%				77.43	%
	Tangible Common Equity Ratio		8.06	%		10.15	%				9.60	%
	Common Shares Outstanding		26,883			26,864		0.1	%		26,866
	Common Equity Per Share	$26.10			$30.23			-13.7	%	$30.79
	Market Value Per Common Share		60.50			62.78		-3.6	%		57.73
		(shares in thousands)
								%
		Q1'2022			Q1'2021			Change		Q4'2021
	Share Repurchase Programs:
	Total Shares Repurchased		3			4		n/m			-
	Average Repurchase Price	$58.66			$61.09			n/m		$	-
	Net Shares (Issued)		(17	)		(57	)	n/m			-
11. Period-End Balance Sheets.
		(unaudited, dollars in thousands)
								%
		3/31/22			3/31/21			Change		12/31/21
	Assets:
	Cash and Due from Banks	$1,037,593			$866,457			19.8	%	$1,132,085
	Debt Securities Available For Sale:
	Corporate Securities		2,547,118			2,149,366		18.5	%		2,746,735
	Collateralized Loan Obligations		1,616,584			1,157,452		39.7	%		1,386,355
	Agency Mortgage Backed Securities		363,181			577,490		-37.1	%		411,726
	Obligations of States and Political Subdivisions (FTE)		89,595			106,117		-15.6	%		93,920
	Other Debt Securities Available For Sale (FTE)		110			145		-24.0	%		119
	Total Debt Securities Available For Sale		4,616,588			3,990,570		15.7	%		4,638,855
	Debt Securities Held To Maturity:
	Agency Mortgage Backed Securities		133,754			213,730		-37.4	%		148,390
	Obligations of States and Political Subdivisions (FTE)(2)		146,766			255,539		-42.6	%		158,006
	Total Debt Securities Held To Maturity(2)		280,520			469,259		-40.2	%		306,396
	Loans		1,002,514			1,293,756		-22.5	%		1,068,126
	Allowance For Credit Losses on Loans		(22,925	)		(23,483	)	-2.4	%		(23,514	)
	Total Loans, net		979,589			1,270,273		-22.9	%		1,044,612
	Premises and Equipment, net		30,626			32,216		-4.9	%		31,155
	Identifiable Intangibles, net		771			1,035		-25.5	%		835
	Goodwill		121,673			121,673		0.0	%		121,673
	Other Assets		239,057			160,998		48.5	%		185,415
	Total Assets	$7,306,417			$6,912,481			5.7	%	$7,461,026
	Liabilities and Shareholders' Equity:
	Deposits:
	Noninterest-Bearing	$3,000,268			$2,798,542			7.2	%	$3,069,080
	Interest-Bearing Transaction		1,279,165			1,179,484		8.5	%		1,260,869
	Savings		1,984,719			1,791,636		10.8	%		1,940,395
	Time		141,722			154,171		-8.1	%		143,612
	Total Deposits		6,405,874			5,923,833		8.1	%		6,413,956
	Short-Term Borrowed Funds		124,442			95,479		30.3	%		146,246
	Other Borrowed Funds		-			1,681		-100.0	%		-
	Other Liabilities		74,357			79,356		-6.3	%		73,722
	Total Liabilities		6,604,673			6,100,349		8.3	%		6,633,924
	Shareholders' Equity:
	Common Equity:
	Paid-In Capital		472,470			469,885		0.6	%		471,043
	Accumulated Other
	Comprehensive Income		(88,300	)		68,901		n/m			49,664
	Retained Earnings		317,574			273,346		16.2	%		306,395
	Total Shareholders' Equity		701,744			812,132		-13.6	%		827,102
	Total Liabilities and
	Shareholders' Equity	$7,306,417			$6,912,481			5.7	%	$7,461,026
12. Income Statements.
		(unaudited, in thousands except per-share amounts)
								%
		Q1'2022			Q1'2021			Change		Q4'2021
	Interest & Fee Income:
	Loans	$12,942			$14,581			-11.2	%	$13,124
	Equity Securities		128			110		16.4	%		129
	Debt Securities Available For Sale		28,566			24,889		14.8	%		27,598
	Debt Securities Held To Maturity		1,644			2,598		-36.7	%		1,824
	Interest-Bearing Cash		479			138		247.1	%		366
	Total Interest & Fee Income		43,759			42,316		3.4	%		43,041
	Interest Expense:
	Transaction Deposits		88			89		-1.1	%		95
	Savings Deposits		283			250		13.2	%		282
	Time Deposits		81			120		-32.5	%		102
	Short-Term Borrowed Funds		28			16		75.0	%		25
	Total Interest Expense		480			475		1.0	%		504
	Net Interest Income		43,279			41,841		3.4	%		42,537
	Provision for Credit Losses		-			-		n/m			-
	Noninterest Income:
	Service Charges		3,582			3,304		8.4	%		3,580
	Merchant Processing Services		2,623			2,560		2.5	%		3,000
	Debit Card Fees(1)		2,872			1,601		79.4	%		1,727
	Trust Fees		843			801		5.2	%		844
	ATM Processing Fees		451			601		-25.0	%		488
	Other Service Fees		449			469		-4.2	%		449
	Financial Services Commissions		117			70		67.1	%		96
	Other Noninterest Income		639			783		-18.4	%		658
	Total Noninterest Income		11,576			10,189		13.6	%		10,842
	Noninterest Expense:
	Salaries and Benefits		11,920			12,665		-5.9	%		11,436
	Occupancy and Equipment		4,746			4,880		-2.7	%		4,692
	Outsourced Data Processing		2,437			2,390		2.0	%		2,357
	Professional Fees		736			942		-21.9	%		757
	Courier Service		582			504		15.5	%		572
	Amortization of Identifiable Intangibles		64			69		-7.2	%		65
	Other Noninterest Expense		4,390			3,456		27.0	%		4,033
	Total Noninterest Expense		24,875			24,906		-0.1	%		23,912
	Income Before Income Taxes		29,980			27,124		10.5	%		29,467
	Income Tax Provision		7,364			6,977		5.5	%		7,747
	Net Income	$22,616			$20,147			12.3	%	$21,720
	Average Common Shares Outstanding		26,870			26,821		0.2	%		26,866
	Diluted Common Shares Outstanding		26,885			26,842		0.2	%		26,875
	Per Common Share Data:
	Basic Earnings	$0.84			$0.75			12.0	%	$0.81
	Diluted Earnings		0.84			0.75		12.0	%		0.81
	Dividends Paid		0.42			0.41		2.4	%		0.42
	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 March 31, 2022 and December 31, 2021 and $9 thousand at March 31, 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