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8-K

Westamerica Bancorporation (WABC)

8-K 2021-04-15 For: 2021-04-15
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 8-K

_________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  April 15, 2021

_______________________________

WESTAMERICA BANCORPORATION

(Exact name of registrant as specified in its charter)

_______________________________

California 001-09383 94-2156203
(State or Other Jurisdiction of Incorporation) (Commission File Number) (I.R.S. Employer Identification No.)

1108 Fifth Avenue

San Rafael, California 94901

(Address of Principal Executive Offices) (Zip Code)

(707) 863-6000

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

_______________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, no par value WABC The Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On April 15, 2021, the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

Exhibit 99.1 Press Release dated April 15, 2021
Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

WESTAMERICA BANCORPORATION
Date: April 15, 2021 By: /s/ Jesse Leavitt
Jesse Leavitt
Senior Vice President and Chief Financial Officer

EdgarFiling EXHIBIT 99.1

Westamerica Bancorporation Reports First Quarter 2021 Financial Results

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<br>1108 Fifth Avenue, San Rafael, CA 94901<br>Robert A. Thorson – SVP & Treasurer<br>707-863-6840<br>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.
WESTAMERICA BANCORPORATION
FINANCIAL HIGHLIGHTS
March 31, 2021
1. Net Income Summary.
%
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.
%
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.
%
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.
%
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.
Income/ Yield (a) /
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 %
Income/ Yield (a) /
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.
%
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.
%
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.
%
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 %
%
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.
%
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.
%
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
%
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.
%
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.
%
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.

All values are in US Dollars.

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