Westamerica Bancorporation — Third Quarter 2026 Earnings Summary

Financial Performance

• Net income for Q3 2026 was $28.2 million, compared to $27.4 million in Q2 2026 and $28.3 million in Q3 2025.
• Diluted earnings per share (EPS) were $1.22 for Q3 2026, up from $1.17 in Q2 2026 and $1.12 in Q3 2025.
• Net interest income on a fully-taxable equivalent (FTE) basis was $53.5 million for Q3 2026, compared to $52.7 million in Q2 2026 and $53.8 million in Q3 2025.
• Noninterest income totaled $10.7 million for Q3 2026, an increase from $10.3 million in Q2 2026 and $10.2 million in Q3 2025.
• Noninterest expense was $26.2 million for Q3 2026, compared to $26.0 million in Q2 2026 and $25.8 million in Q3 2025.
• The efficiency ratio (FTE) was 41% for Q3 2026, compared to 41.3% in Q2 2026 and 40.3% in Q3 2025.
• Return on average common equity was 11.5% for Q3 2026, compared to 11.3% in Q2 2026 and 10.9% in Q3 2025.
• Return on assets was 1.86% for Q3 2026, compared to 1.84% in Q2 2026 and 1.86% in Q3 2025.
• Net interest margin (FTE) was 3.81% for Q3 2026, a 4 basis point increase from 3.77% in Q2 2026 and 3.80% in Q3 2025.
• The annualized yield on earning assets was 4.07% for Q3 2026, compared to 4.01% in Q2 2026 and 4.06% in Q3 2025.
• The annualized cost of funds was 0.26% for Q3 2026, compared to 0.24% in Q2 2026 and 0.26% in Q3 2025.
• No provision for credit losses was recognized in Q3 2026, compared to zero in Q2 2026 and zero in Q3 2025.
• Nonperforming assets were $476 thousand as of September 30, 2026.
• The allowance for credit losses on loans was $10.5 million as of September 30, 2026.
• Total assets averaged $5,992.6 million in Q3 2026, down 0.4% from Q3 2025 and up 0.4% from Q2 2026.
• Total loans averaged $661.3 million in Q3 2026, down 11.1% from Q3 2025 and down 3.2% from Q2 2026.
• Total investment securities averaged $4,655.9 million in Q3 2026, up 11.5% from Q3 2025 and up 1.9% from Q2 2026.
• Total deposits averaged $4,813.8 million in Q3 2026, up 0.2% from Q3 2025 and up 0.4% from Q2 2026.
• Shareholders' equity averaged $973.8 million in Q3 2026, down 5.1% from Q3 2025 and up 0.2% from Q2 2026.
• For the nine months ended September 30, 2026, net income was $82.9 million, down 6.2% from $88.4 million in the same period in 2025.
• Diluted EPS for the nine months ended September 30, 2026, was $3.52, up 3.5% from $3.40 in 2025.

Guidance and Future Outlook

• No specific forward guidance or future growth targets were provided in the press release.
• Management noted that capital ratios remain at historically high levels exceeding the highest regulatory guidelines.

Business Segments and Product Lines

• Westamerica Bank operates commercial banking and trust offices throughout Northern and Central California.
• Noninterest income growth was driven by higher merchant processing services fee income, including a one-time termination fee, and increased transaction volumes.
• Noninterest expense increases were primarily due to higher occupancy and equipment expenses and professional fees, partially offset by lower salaries and benefits.
• Total loans decreased 11.1% year-over-year, with Commercial Loans down 8.7%, Commercial Real Estate Loans down 5.9%, and Consumer Loans down 30.5%.
• Total investment securities increased 11.5% year-over-year, with Debt Securities Available for Sale up 15.3% and Debt Securities Held to Maturity down 3.3%.
• Total interest-bearing cash decreased 60.6% year-over-year.
• Demand deposits as a percentage of total deposits were 45.1% in Q3 2026, compared to 45.8% in Q3 2025.

Market and Competitive Landscape

• No specific market share data or competitive landscape analysis was included in the press release.
• The press release mentions general factors that could affect the business, including changes in business and economic conditions, competition, and fiscal and monetary policies, but provides no specific market data.

Risks and Challenges

• Forward-looking statements are subject to risks and uncertainties, including credit, interest rate, operational, liquidity, and market risks.
• Potential risks include changes in business and economic conditions, competition, fiscal and monetary policies, disintermediation, cyber security risks, and legislative changes (Dodd-Frank, Sarbanes-Oxley, Gramm-Leach-Bliley).
• The company notes that actual results could differ significantly from forward-looking statements due to factors beyond its control.

Management Commentary and Tone

• Chairman, President, and CEO David Payne stated that Q3 2026 results continued to benefit from the Company's low-cost operating principles.
• Payne highlighted the efficient operation of the company, noting an efficiency ratio of 41% and an annualized return on average common equity of 11.5%.
• The tone was positive, emphasizing stable deposit balances, high capital ratios, and the ability to invest excess cash in higher interest-earning securities.

Analyst Questions and Answers

• No analyst questions or answers were included in the press release.

Other Key Points

• The Company paid a dividend of $0.48 per common share during Q3 2026, an increase from $0.46 in Q3 2025.
• The common dividend payout ratio was 39% in Q3 2026, compared to 41% in Q2 2026 and 41% in Q3 2025.
• The Company retired 51,000 common shares using its share repurchase plan during Q3 2026.
• Average common shares outstanding were 23,084 thousand in Q3 2026, down 8.9% from 25,341 thousand in Q3 2025.
• The Company operates as the parent company of Westamerica Bank.