Westamerica Bancorporation Reports Fourth Quarter 2018 Financial Results

SAN RAFAEL, Calif., Jan. 17, 2019 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the fourth quarter 2018 of $19.1 million and diluted earnings per common share ("EPS") of $0.71 compared to $17.0 million and EPS of $0.63 for the third quarter 2018. Third quarter 2018 results include a $585 thousand tax-exempt life insurance policy gain and a $3.5 million loss contingency settlement, which on an aggregate basis reduced EPS $0.07.

"Fourth quarter 2018 net interest income demonstrated continuing improvement as higher market interest rates benefit the yields on our interest-earning loans and securities. Our annualized funding costs were unchanged at 0.04 percent of interest-earning assets due to the predominance of low-cost checking and savings accounts in our deposit portfolio. The annualized net interest margin on a fully-taxable equivalent (“FTE”) basis rose from 3.00 percent for the third quarter 2018 to 3.06 percent for the fourth quarter 2018. Asset quality remains solid with nonperforming assets totaling only $5.8 million at December 31, 2018,” said Chairman, President and CEO David Payne. “Fourth quarter 2018 results generated an annualized 11.7 percent return on average common equity. These results allowed the Board of Directors to approve a $0.40 per share dividend in the fourth quarter 2018 for our shareholders,” concluded Payne.

Net interest income (FTE) was $40.3 million for the fourth quarter 2018, compared to $39.5 million for the third quarter 2018 and $37.9 million for the fourth quarter 2017. The annualized net interest margin (FTE) was 3.06 percent for the fourth quarter 2018, compared to 3.00 percent for the third quarter 2018 and 2.96 percent for the fourth quarter 2017. Checking and savings deposits, which are less sensitive to rising interest rates than time deposits, represented ninety-six percent of the Company’s average deposit base during the fourth quarter 2018.

The Company recognized no provision for loan losses for the fourth quarter 2018 given low levels of nonperforming loans and other credit quality attributes.

Noninterest income for the fourth quarter 2018 totaled $11.9 million, compared to $12.5 million for the third quarter 2018, and $20.3 million for the fourth quarter 2017. Noninterest income for the third quarter 2018 included a tax-exempt life insurance policy gain of $585 thousand. Noninterest income for the fourth quarter 2017 included an $8.0 million gain on the sale of equity securities.

Noninterest expense for the fourth quarter 2018 totaled $25.8 million, compared to $29.4 million for the third quarter 2018 and $31.4 million for the fourth quarter 2017. Noninterest expense for the third quarter 2018 included a $3.5 million loss contingency settlement to dismiss a lawsuit. Noninterest expense for the fourth quarter 2017 included a $5.5 million loss contingency to provide refunds of revenue to some customers. Loss contingencies represent estimated liabilities which are subject to revision.

The tax rate (FTE) applied to pre-tax income (FTE) was 27.8 percent for the fourth quarter 2018, compared to 25.0 percent for the third quarter 2018 and 84.5 percent for the fourth quarter 2017. The lower tax rates for 2018 compared to 2017 reflect a reduction in the federal corporate tax rate due to the Tax Cuts and Jobs Act of 2017 (the “Act”). The Act was signed into law in the fourth quarter 2017, requiring re-measurement of deferred tax assets which resulted in a $12.3 million charge to the fourth quarter 2017 book tax provision. The book tax provisions for the fourth quarter 2018 and third quarter 2018 include tax benefits of $7 thousand and $152 thousand, respectively, for tax deductions from the exercise of employee stock options which exceed related compensation expense recognized in the financial statements.

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 & Chief Financial Officer
     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, 2017 filed on Form 10-K and quarterly report for the quarter ended September 30, 2018 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, 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.

WESTAMERICA BANCORPORATION
FINANCIAL HIGHLIGHTS
December 31, 2018
1. Net Income Summary.
		(in thousands except per-share amounts)
								%
		Q4'18			Q4'17			Change		Q3'18
	Net Interest and Fee Income (FTE)	$	40,288		$	37,918		6.2	%	$	39,498
	Reversal of Provision for Loan Losses		-			-		n/m			-
	Noninterest Income		11,897			20,300		-41.4	%		12,528
	Noninterest Expense		25,787			31,441		-18.0	%		29,366
	Income Before Taxes (FTE)		26,398			26,777		-1.4	%		22,660
	Income Tax Provision (FTE)		7,343			22,617		n/m			5,667
	Net Income	$	19,055		$	4,160		n/m		$	16,993
	Average Common Shares Outstanding		26,729			26,384		1.3	%		26,701
	Diluted Average Common Shares		26,815			26,538		1.0	%		26,815
	Operating Ratios:
	Basic Earnings Per Common Share	$	0.71		$	0.16		n/m		$	0.64
	Diluted Earnings Per Common Share		0.71			0.16		n/m			0.63
	Return On Assets (a)		1.33	%		0.30	%				1.19	%
	Return On Common Equity (a)		11.7	%		2.7	%				10.6	%
	Net Interest Margin (FTE) (a)		3.06	%		2.96	%				3.00	%
	Efficiency Ratio (FTE)		49.4	%		54.0	%				56.4	%
	Dividends Paid Per Common Share	$	0.40		$	0.40		0.0	%	$	0.40
	Common Dividend Payout Ratio		56	%		250	%				63	%
								%
		12/31'18YTD			12/31'17YTD			Change
	Net Interest and Fee Income (FTE)	$	155,410		$	148,594		4.6	%
	Reversal of Provision for Loan Losses		-			(1,900	)	n/m
	Noninterest Income		48,149			56,628		-15.0	%
	Noninterest Expense		106,916			107,768		-0.8	%
	Income Before Taxes (FTE)		96,643			99,354		-2.7	%
	Income Tax Provision (FTE)		25,079			49,329		n/m
	Net Income	$	71,564		$	50,025		n/m
	Average Common Shares Outstanding		26,649			26,291		1.4	%
	Diluted Average Common Shares		26,756			26,419		1.3	%
	Operating Ratios:
	Basic Earnings Per Common Share	$	2.69		$	1.90		n/m
	Diluted Earnings Per Common Share		2.67			1.89		n/m
	Return On Assets		1.27	%		0.92	%
	Return On Common Equity		11.3	%		8.4	%
	Net Interest Margin (FTE)		2.98	%		2.95	%
	Efficiency Ratio (FTE)		52.5	%		52.5	%
	Dividends Paid Per Common Share	$	1.60		$	1.57		1.9	%
	Common Dividend Payout Ratio		60	%		83	%
2. Net Interest Income.
		(dollars in thousands)
								%
		Q4'18			Q4'17			Change		Q3'18
	Interest and Fee Income (FTE)	$	40,802		$	38,389		6.3	%	$	40,025
	Interest Expense		514			471		9.1	%		527
	Net Interest and Fee Income (FTE)	$	40,288		$	37,918		6.2	%	$	39,498
	Average Earning Assets	$	5,270,708		$	5,112,354		3.1	%	$	5,231,257
	Average Interest-
	Bearing Liabilities		2,691,370			2,701,190		-0.4	%		2,733,670
	Yield on Earning Assets (FTE) (a)		3.10	%		3.00	%				3.04	%
	Cost of Funds (a)		0.04	%		0.04	%				0.04	%
	Net Interest Margin (FTE) (a)		3.06	%		2.96	%				3.00	%
	Interest Expense/
	Interest-Bearing Liabilities (a)		0.08	%		0.07	%				0.08	%
	Net Interest Spread (FTE) (a)		3.02	%		2.93	%				2.96	%
								%
		12/31'18YTD			12/31'17YTD			Change
	Interest and Fee Income (FTE)	$	157,369		$	150,494		4.6	%
	Interest Expense		1,959			1,900		3.1	%
	Net Interest and Fee Income (FTE)	$	155,410		$	148,594		4.6	%
	Average Earning Assets	$	5,212,635		$	5,028,373		3.7	%
	Average Interest-
	Bearing Liabilities		2,722,149			2,696,399		1.0	%
	Yield on Earning Assets (FTE)		3.02	%		2.99	%
	Cost of Funds		0.04	%		0.04	%
	Net Interest Margin (FTE)		2.98	%		2.95	%
	Interest Expense/
	Interest-Bearing Liabilities		0.07	%		0.07	%
	Net Interest Spread (FTE)		2.95	%		2.92	%
3. Loans & Other Earning Assets.
		(average volume, dollars in thousands)
								%
		Q4'18			Q4'17			Change		Q3'18
	Total Assets	$	5,680,321		$	5,534,700		2.6	%	$	5,648,004
	Total Earning Assets		5,270,708			5,112,354		3.1	%		5,231,257
	Total Loans		1,189,744			1,285,748		-7.5	%		1,194,874
	Commercial Loans		271,165			327,790		-17.3	%		288,634
	Commercial RE Loans		570,059			575,984		-1.0	%		554,081
	Consumer Loans		348,520			381,974		-8.8	%		352,159
	Total Investment Securities		3,692,951			3,397,149		8.7	%		3,591,637
	Equity Securities		1,733			2,675		-35.2	%		1,749
	Debt Securities Available For Sale		2,684,431			2,213,379		21.3	%		2,538,837
	Debt Securities Held To Maturity		1,006,787			1,181,095		-14.8	%		1,051,051
	Total Interest Bearing Cash		388,013			429,457		-9.7	%		444,746
	Loans/Deposits		24.2	%		26.7	%				24.4	%
								%
		12/31'18YTD			12/31'17YTD			Change
	Total Assets	$	5,620,618		$	5,439,682		3.3	%
	Total Earning Assets		5,212,635			5,028,373		3.7	%
	Total Loans		1,209,167			1,315,202		-8.1	%
	Commercial Loans		292,893			339,234		-13.7	%
	Commercial RE Loans		557,679			567,006		-1.6	%
	Consumer Loans		358,595			408,962		-12.3	%
	Total Investment Securities		3,577,597			3,307,137		8.2	%
	Equity Securities		1,809			2,950		-38.7	%
	Debt Securities Available For Sale		2,503,356			2,049,506		22.1	%
	Debt Securities Held To Maturity		1,072,432			1,254,681		-14.5	%
	Total Interest Bearing Cash		425,871			406,034		4.9	%
	Loans/Deposits		24.8	%		27.9	%
4. Deposits, Other Interest-Bearing Liabilities & Equity.
		(average volume, dollars in thousands)
								%
		Q4'18			Q4'17			Change		Q3'18
	Total Deposits	$	4,917,901		$	4,811,035		2.2	%	$	4,893,859
	Noninterest Demand		2,280,174			2,172,678		4.9	%		2,223,678
	Interest Bearing Transaction		927,676			899,822		3.1	%		935,257
	Savings		1,510,358			1,501,872		0.6	%		1,526,100
	Time greater than $100K		86,141			106,746		-19.3	%		90,668
	Time less than $100K		113,552			129,917		-12.6	%		118,156
	Total Short-Term Borrowings		53,643			62,833		-14.6	%		63,489
	Shareholders' Equity		646,129			610,200		5.9	%		636,965
	Demand Deposits/
	Total Deposits		46.4	%		45.2	%				45.4	%
	Transaction & Savings
	Deposits / Total Deposits		95.9	%		95.1	%				95.7	%
								%
		12/31'18YTD			12/31'17YTD			Change
	Total Deposits	$	4,872,081		$	4,722,250		3.2	%
	Noninterest Demand		2,209,924			2,095,522		5.5	%
	Interest Bearing Transaction		928,277			888,116		4.5	%
	Savings		1,519,375			1,492,725		1.8	%
	Time greater than $100K		94,919			109,563		-13.4	%
	Time less than $100K		119,586			136,324		-12.3	%
	Total Short-Term Borrowings		59,992			69,671		-13.9	%
	Shareholders' Equity		630,697			596,356		5.8	%
	Demand Deposits/
	Total Deposits		45.4	%		44.4	%
	Transaction & Savings
	Deposits / Total Deposits		95.6	%		94.8	%
5. Interest Yields Earned & Rates Paid.
		(dollars in thousands)
		Q4'18
		Average			Income/			Yield (a) /
		Volume			Expense			Rate
	Interest & Fee Income Earned
	Total Earning Assets (FTE)	$	5,270,708		$	40,802		3.10	%
	Total Loans (FTE)		1,189,744			14,894		4.97	%
	Commercial Loans (FTE)		271,165			3,698		5.41	%
	Commercial RE Loans		570,059			7,607		5.29	%
	Consumer Loans		348,520			3,589		4.09	%
	Total Investments (FTE)		3,692,951			23,916		2.59	%
	Total Interest Bearing Cash		388,013			1,992		2.23	%
	Interest Expense Paid
	Total Earning Assets		5,270,708			514		0.04	%
	Total Interest-Bearing Liabilities		2,691,370			514		0.08	%
	Total Interest-Bearing Deposits		2,637,727			506		0.08	%
	Interest-Bearing Transaction		927,676			124		0.05	%
	Savings		1,510,358			227		0.06	%
	Time less than $100K		113,552			70		0.24	%
	Time greater than $100K		86,141			85		0.39	%
	Total Short-Term Borrowings		53,643			8		0.06	%
	Net Interest Income and
	Margin (FTE)				$	40,288		3.06	%
		Q4'17
		Average			Income/			Yield (a) /
		Volume			Expense			Rate
	Interest & Fee Income Earned
	Total Earning Assets (FTE)	$	5,112,354		$	38,389		3.00	%
	Total Loans (FTE)		1,285,748			15,671		4.84	%
	Commercial Loans (FTE)		327,790			4,168		5.05	%
	Commercial RE Loans		575,984			8,009		5.52	%
	Consumer Loans		381,974			3,494		3.63	%
	Total Investments (FTE)		3,397,149			21,444		2.52	%
	Total Interest Bearing Cash		429,457			1,274		1.29	%
	Interest Expense Paid
	Total Earning Assets		5,112,354			471		0.04	%
	Total Interest-Bearing Liabilities		2,701,190			471		0.07	%
	Total Interest-Bearing Deposits		2,638,357			461		0.07	%
	Interest-Bearing Transaction		899,822			60		0.03	%
	Savings		1,501,872			225		0.06	%
	Time less than $100K		129,917			75		0.23	%
	Time greater than $100K		106,746			101		0.38	%
	Total Short-Term Borrowings		62,833			10		0.06	%
	Net Interest Income and
	Margin (FTE)				$	37,918		2.96	%
6. Noninterest Income.
		(dollars in thousands except per-share amounts)
								%
		Q4'18			Q4'17			Change		Q3'18
	Service Charges on Deposits	$	4,496		$	4,756		-5.5	%	$	4,615
	Merchant Processing Services		2,440			2,346		4.0	%		2,464
	Debit Card Fees		1,685			1,569		7.3	%		1,656
	Other Service Fees		620			620		0.0	%		665
	ATM Processing Fees		703			696		1.0	%		687
	Trust Fees		737			739		-0.3	%		733
	Life Insurance Gains		-			-		n/m			585
	Financial Services Commissions		112			155		-28.0	%		132
	Equity Securities Gains (Losses)		14			7,955		n/m			(16	)
	Other Income		1,090			1,464		-25.5	%		1,007
	Total Noninterest Income	$	11,897		$	20,300		-41.4	%	$	12,528
	Total Revenue (FTE)	$	52,185		$	58,218		-10.4	%	$	52,026
	Noninterest Income/Revenue (FTE)		22.8	%		34.9	%				24.1	%
	Service Charges/Avg. Deposits (a)		0.36	%		0.39	%				0.37	%
	Total Revenues (FTE) Per Avg.
	Common Share (a)	$	7.75		$	8.75		-11.5	%	$	7.73
								%
		12/31'18YTD			12/31'17YTD			Change
	Service Charges on Deposits	$	18,508		$	19,612		-5.6	%
	Merchant Processing Services		9,630			8,426		14.3	%
	Debit Card Fees		6,643			6,421		3.5	%
	Other Service Fees		2,567			2,584		-0.7	%
	ATM Processing Fees		2,752			2,610		5.4	%
	Trust Fees		2,938			2,875		2.2	%
	Life Insurance Gains		585			-		n/m
	Financial Services Commissions		499			639		-21.9	%
	Equity Securities (Losses) Gains		(52	)		7,955		n/m
	Other Income		4,079			5,506		-25.9	%
	Total Noninterest Income	$	48,149		$	56,628		-15.0	%
	Total Revenue (FTE)	$	203,559		$	205,222		-0.8	%
	Noninterest Income/Revenue (FTE)		23.7	%		27.6	%
	Service Charges/Avg. Deposits		0.38	%		0.42	%
	Total Revenues (FTE) Per Avg.
	Common Share	$	7.64		$	7.81		-2.1	%
7. Noninterest Expense.
		(dollars in thousands)
								%
		Q4'18			Q4'17			Change		Q3'18
	Salaries & Benefits	$	13,055		$	12,652		3.2	%	$	13,415
	Occupancy and Equipment		5,314			4,860		9.3	%		4,809
	Loss Contingency (1)		-			5,542		n/m			3,500
	Outsourced Data Processing		2,299			2,325		-1.1	%		2,292
	Amortization of
	Identifiable Intangibles		447			755		-40.8	%		451
	Professional Fees		565			627		-9.9	%		621
	Impairment of Tax Credit Investments		-			625		n/m			-
	Courier Service		446			423		5.5	%		448
	Other Operating		3,661			3,632		0.8	%		3,830
	Total Noninterest Expense	$	25,787		$	31,441		-18.0	%	$	29,366
	Noninterest Expense/
	Avg. Earning Assets (a)		1.94	%		2.44	%				2.23	%
	Noninterest Expense/Revenues (FTE)		49.4	%		54.0	%				56.4	%
								%
		12/31'18YTD			12/31'17YTD			Change
	Salaries & Benefits	$	53,007		$	51,519		2.9	%
	Occupancy and Equipment		19,679			19,430		1.3	%
	Outsourced Data Processing		9,229			9,035		2.2	%
	Loss Contingency (1)		3,500			5,542		n/m
	Amortization of
	Identifiable Intangibles		1,921			3,077		-37.6	%
	Professional Fees		2,842			2,161		31.5	%
	Impairment of Tax Credit Investments		-			625		n/m
	Courier Service		1,779			1,732		2.7	%
	Other Operating		14,959			14,647		2.1	%
	Total Noninterest Expense	$	106,916		$	107,768		-0.8	%
	Noninterest Expense/
	Avg. Earning Assets		2.05	%		2.14	%
	Noninterest Expense/Revenues (FTE)		52.5	%		52.5	%
8. Allowance for Loan Losses.
		(dollars in thousands)
								%
		Q4'18			Q4'17			Change		Q3'18
	Average Total Loans	$	1,189,744		$	1,285,748		-7.5	%	$	1,194,874
	Allowance for Loan Loss (ALL)
	Beginning of Period	$	22,027		$	23,628		-6.8	%	$	23,040
	Reversal of Provision for Loan Losses		-			-		n/m			-
	Net ALL Losses		(676	)		(619	)	n/m			(1,013	)
	ALL End of Period	$	21,351		$	23,009		-7.2	%	$	22,027
	Net ALL Losses / Gross ALL Losses		44	%		47	%				31	%
	Net ALL Losses / Avg. Total Loans (a)		0.23	%		0.19	%				0.34	%
								%
		12/31'18YTD			12/31'17YTD			Change
	Average Total Loans	$	1,209,167		$	1,315,202		-8.1	%
	Allowance for Loan Loss (ALL)
	Beginning of Period	$	23,009		$	25,954		-11.3	%
	Reversal of Provision for Loan Losses		-			(1,900	)	n/m
	Net ALL Losses		(1,658	)		(1,045	)	n/m
	ALL End of Period	$	21,351		$	23,009		-7.2	%
	Net ALL Losses / Gross ALL Losses		66	%		82	%
	Net ALL Losses / Avg. Total Loans		0.14	%		0.08	%
9. Credit Quality.
		(dollars in thousands)
								%
		12/31/18			12/31/17			Change		9/30/18
	Nonperforming Loans:
	Nonperforming Nonaccrual	$	998		$	1,641		-39.2	%	$	1,611
	Performing Nonaccrual		3,870			4,285		-9.7	%		3,870
	Total Nonaccrual Loans		4,868			5,926		-17.9	%		5,481
	90+ Days Past Due Accruing Loans		551			531		3.8	%		361
	Total		5,419			6,457		-16.1	%		5,842
	Repossessed Loan Collateral		350			1,426		-75.5	%		620
	Total Nonperforming Assets	$	5,769		$	7,883		-26.8	%	$	6,462
	Total Loans Outstanding	$	1,207,202		$	1,287,982		-6.3	%	$	1,196,955
	Total Assets	$	5,568,526		$	5,513,046		1.0	%	$	5,529,463
	Loans:
	Allowance for Loan Losses	$	21,351		$	23,009		-7.2	%	$	22,027
	Allowance/Loans		1.77	%		1.79	%				1.84	%
	Nonperforming Loans/Total Loans		0.45	%		0.50	%				0.49	%
10. Capital.
		(in thousands, except per-share amounts)
								%
		12/31/18			12/31/17			Change		9/30/18
	Shareholders' Equity	$	615,591		$	590,239		4.3	%	$	592,591
	Total Assets		5,568,526			5,513,046		1.0	%		5,529,463
	Shareholders' Equity/
	Total Assets		11.05	%		10.71	%				10.72	%
	Shareholders' Equity/
	Total Loans		50.99	%		45.83	%				49.51	%
	Tangible Common Equity Ratio		9.04	%		8.63	%				8.67	%
	Common Shares Outstanding		26,730			26,425		1.2	%		26,727
	Common Equity Per Share	$	23.03		$	22.34		3.1	%	$	22.17
	Market Value Per Common Share	$	55.68		$	59.55		-6.5	%	$	60.16
	Share Repurchase Programs
		(shares in thousands)
								%
		Q4'18			Q4'17			Change		Q3'18
	Total Shares Repurchased		-			-		n/m			-
	Average Repurchase Price	$	-		$	-		n/m		$	-
	Net Shares Issued		(3	)		(106	)	n/m			(78	)
								%
		12/31'18YTD			12/31'17YTD			Change
	Total Shares Repurchased		9			6		n/m
	Average Repurchase Price	$	58.46		$	56.51		n/m
	Net Shares Issued		(305	)		(518	)	n/m
11. Period-End Balance Sheets.
		(unaudited, dollars in thousands)
								%
		12/31/18			12/31/17			Change		9/30/18
	Assets:
	Cash and Due from Banks	$	420,284		$	575,002		-26.9	%	$	522,660
	Investment Securities:
	Equity Securities		1,747			1,800		-2.9	%		1,734
	Debt Securities Available For Sale		2,654,670			2,191,707		21.1	%		2,478,908
	Debt Securities Held to Maturity		984,609			1,158,864		-15.0	%		1,025,699
	Loans		1,207,202			1,287,982		-6.3	%		1,196,955
	Allowance For Loan Losses		(21,351	)		(23,009	)	-7.2	%		(22,027	)
	Total Loans, net		1,185,851			1,264,973		-6.3	%		1,174,928
	Other Real Estate Owned		350			1,426		-75.5	%		620
	Premises and Equipment, net		34,507			35,301		-2.3	%		35,391
	Identifiable Intangibles, net		1,929			3,850		-49.9	%		2,376
	Goodwill		121,673			121,673		0.0	%		121,673
	Other Assets		162,906			158,450		2.8	%		165,474
	Total Assets	$	5,568,526		$	5,513,046		1.0	%	$	5,529,463
	Liabilities and Shareholders' Equity:
	Deposits:
	Noninterest Bearing	$	2,243,251		$	2,197,526		2.1	%	$	2,211,028
	Interest-Bearing Transaction		929,346			904,245		2.8	%		909,954
	Savings		1,498,991			1,494,024		0.3	%		1,510,015
	Time		195,251			231,818		-15.8	%		204,840
	Total Deposits		4,866,839			4,827,613		0.8	%		4,835,837
	Short-Term Borrowed Funds		51,247			58,471		-12.4	%		61,756
	Other Liabilities		34,849			36,723		-5.1	%		39,279
	Total Liabilities		4,952,935			4,922,807		0.6	%		4,936,872
	Shareholders' Equity:
	Common Equity:
	Paid-In Capital		449,746			433,267		3.8	%		449,180
	Accumulated Other
	Comprehensive Loss		(39,996	)		(16,832	)	n/m			(54,066	)
	Retained Earnings		205,841			173,804		18.4	%		197,477
	Total Shareholders' Equity		615,591			590,239		4.3	%		592,591
	Total Liabilities and
	Shareholders' Equity	$	5,568,526		$	5,513,046		1.0	%	$	5,529,463
12. Income Statements.
		(unaudited, in thousands except per-share amounts)
								%
		Q4'18			Q4'17			Change		Q3'18
	Interest & Fee Income:
	Loans	$	14,783		$	15,410		-4.1	%	$	14,593
	Investment Securities:
	Equity Securities		98			79		24.1	%		85
	Debt Securities Available for Sale		16,865			12,280		37.3	%		15,644
	Debt Securities Held to Maturity		5,710			6,435		-11.3	%		5,931
	Interest Bearing Cash		1,992			1,274		56.3	%		2,361
	Total Interest & Fee Income		39,448			35,478		11.2	%		38,614
	Interest Expense:
	Transaction Deposits		124			60		107.0	%		129
	Savings Deposits		227			225		1.0	%		229
	Time Deposits		155			176		-12.2	%		160
	Short-Term Borrowed Funds		8			10		-13.5	%		9
	Total Interest Expense		514			471		9.1	%		527
	Net Interest Income		38,934			35,007		11.2	%		38,087
	Reversal of Provision for Loan Losses		-			-		n/m			-
	Noninterest Income:
	Service Charges		4,496			4,756		-5.5	%		4,615
	Merchant Processing Services		2,440			2,346		4.0	%		2,464
	Debit Card Fees		1,685			1,569		7.3	%		1,656
	Other Service Fees		620			620		0.0	%		665
	ATM Processing Fees		703			696		1.0	%		687
	Trust Fees		737			739		-0.3	%		733
	Life Insurance Gains		-			-		n/m			585
	Financial Services Commissions		112			155		-28.0	%		132
	Equity Securities Gains (Losses)		14			7,955		n/m			(16	)
	Other		1,090			1,464		-25.5	%		1,007
	Total Noninterest Income		11,897			20,300		-41.4	%		12,528
	Noninterest Expense:
	Salaries and  Benefits		13,055			12,652		3.2	%		13,415
	Occupancy and Equipment		5,314			4,860		9.3	%		4,809
	Loss Contingency (1)		-			5,542		n/m			3,500
	Outsourced Data Processing		2,299			2,325		-1.1	%		2,292
	Amortization of Identifiable Intangibles		447			755		-40.8	%		451
	Professional Fees		565			627		-9.9	%		621
	Impairment of Tax Credit Investments		-			625		n/m			-
	Courier Service		446			423		5.5	%		448
	Other		3,661			3,632		0.8	%		3,830
	Total Noninterest Expense		25,787			31,441		-18.0	%		29,366
	Income Before Income Taxes		25,044			23,866		4.9	%		21,249
	Income Tax Provision		5,989			19,706		n/m			4,256
	Net Income	$	19,055		$	4,160		n/m		$	16,993
	Average Common Shares Outstanding		26,729			26,384		1.3	%		26,701
	Diluted Common Shares Outstanding		26,815			26,538		1.0	%		26,815
	Per Common Share Data:
	Basic Earnings	$	0.71		$	0.16		n/m		$	0.64
	Diluted Earnings		0.71			0.16		n/m			0.63
	Dividends Paid		0.40			0.40		0.0	%		0.40
								%
		12/31'18YTD			12/31'17YTD			Change
	Interest & Fee Income:
	Loans	$	59,030		$	61,740		-4.4	%
	Investment Securities:
	Equity Securities		354			293		20.6	%
	Debt Securities Available for Sale		60,383			44,371		36.1	%
	Debt Securities Held to Maturity		24,031			27,432		-12.4	%
	Interest Bearing Cash		7,925			4,476		77.0	%
	Total Interest & Fee Income		151,723			138,312		9.7	%
	Interest Expense:
	Transaction Deposits		373			233		59.8	%
	Savings Deposits		902			890		1.3	%
	Time Deposits		647			733		-11.6	%
	Short-Term Borrowed Funds		37			44		-16.5	%
	Total Interest Expense		1,959			1,900		3.1	%
	Net Interest Income		149,764			136,412		9.8	%
	Reversal of Provision for Loan Losses		-			(1,900	)	n/m
	Noninterest Income:
	Service Charges		18,508			19,612		-5.6	%
	Merchant Processing Services		9,630			8,426		14.3	%
	Debit Card Fees		6,643			6,421		3.5	%
	Other Service Fees		2,567			2,584		-0.7	%
	ATM Processing Fees		2,752			2,610		5.4	%
	Trust Fees		2,938			2,875		2.2	%
	Life Insurance Gains		585			-		n/m
	Financial Services Commissions		499			639		-21.9	%
	Equity Securities (Losses) Gains		(52	)		7,955		n/m
	Other		4,079			5,506		-25.9	%
	Total Noninterest Income		48,149			56,628		-15.0	%
	Noninterest Expense:
	Salaries and  Benefits		53,007			51,519		2.9	%
	Occupancy and Equipment		19,679			19,430		1.3	%
	Outsourced Data Processing		9,229			9,035		2.2	%
	Loss Contingency (1)		3,500			5,542		n/m
	Amortization of Identifiable Intangibles		1,921			3,077		-37.6	%
	Professional Fees		2,842			2,161		31.5	%
	Impairment of Tax Credit Investments		-			625		n/m
	Courier Service		1,779			1,732		2.7	%
	Other		14,959			14,647		2.1	%
	Total Noninterest Expense		106,916			107,768		-0.8	%
	Income Before Income Taxes		90,997			87,172		4.4	%
	Income Tax Provision		19,433			37,147		n/m
	Net Income	$	71,564		$	50,025		43.1	%
	Average Common Shares Outstanding		26,649			26,291		1.4	%
	Diluted Common Shares Outstanding		26,756			26,419		1.3	%
	Per Common Share Data:
	Basic Earnings	$	2.69		$	1.90		n/m
	Diluted Earnings		2.67			1.89		n/m
	Dividends Paid		1.60			1.57		1.9	%
	Footnotes and Abbreviations:
	(1) In 2018, the Company achieved a mediated settlement to dismiss a lawsuit and recorded an estimated loss contingency. In 2017, the amount recorded represents the Company's estimated refunds to customers of revenue recognized in prior years. The amount of these loss contingencies remains subject to revision until paid.
	Certain amounts in prior periods have been reclassified to conform to the current presentation.
	(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