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What changed in WESTAMERICA BANCORPORATION's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of WESTAMERICA BANCORPORATION's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+208 added−216 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-28)

Top changes in WESTAMERICA BANCORPORATION's 2025 10-K

208 paragraphs added · 216 removed · 178 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

25 edited+5 added−6 removed79 unchanged
Biggest changeFor instance, under the Relief Act and related rule making: • banks that have less than $10 billion in total consolidated assets and total trading assets and trading liabilities of less than five percent of total consolidated assets are exempt from Section 619 of the Dodd-Frank Act, known as the “Volcker Rule”, which prohibits “proprietary trading” and the ownership or sponsorship of private equity or hedge funds that are referred to as “covered funds”; and • a new “community bank leverage ratio” was adopted, which is applicable to certain banks and bank holding companies with total assets of less than $10 billion (as described above under “Capital Standards”).
Biggest changeThe Company has not elected to become an FHC. -4- The Economic Growth, Regulatory Relief, and Consumer Protection Act (the “Relief Act”), which was enacted in 2018, exemption banks with less than $10 billion in total consolidated assets and total trading assets and trading liabilities of less than five percent of total consolidated assets from Section 619 of the Dodd-Frank Act, known as the “Volcker Rule”, which prohibits “proprietary trading” and the ownership or sponsorship of private equity or hedge funds that are referred to as “covered funds. ” Regulation and Supervision of Banks The Bank is a California state-chartered Federal Reserve member bank and its deposits are insured by the FDIC.
A banking organization’s risk-based capital ratios are obtained by dividing its qualifying capital by its total risk-adjusted assets and off balance sheet items. The federal banking agencies take into consideration concentrations of credit risk and risks from nontraditional activities, as well as an institution’s ability to manage those risks, when determining the adequacy of an institution’s capital.
A banking organization’s risk-based capital ratios are obtained by dividing its qualifying capital by its total risk-adjusted assets and off balance sheet items. -5- The federal banking agencies take into consideration concentrations of credit risk and risks from nontraditional activities, as well as an institution’s ability to manage those risks, when determining the adequacy of an institution’s capital.
Legislative changes, as well as technological and economic factors, can be expected to have an ongoing impact on competitive conditions within the financial services industry. While the future impact of regulatory and legislative changes cannot be predicted with certainty, the business of banking will remain highly competitive. -9-
Legislative changes, as well as technological and economic factors, can be expected to have an ongoing impact on competitive conditions within the financial services industry. While the future impact of regulatory and legislative changes cannot be predicted with certainty, the business of banking will remain highly competitive.
Any failure to meet the requirements of the Bank Secrecy Act can result in the imposition of substantial penalties and in adverse regulatory action against the offending bank. The Anti-Money Laundering Act of 2020 (“AMLA”), which amends the Bank Secrecy Act, was enacted in January 2021.
Any failure to meet the requirements of the Bank Secrecy Act can result in the imposition of substantial penalties and in adverse regulatory action against the offending bank. -8- The Anti-Money Laundering Act of 2020 (“AMLA”), which amends the Bank Secrecy Act, was enacted in January 2021.
As of December 31, 2024, the Company’s and the Bank’s respective regulatory capital ratios exceeded applicable regulatory minimum capital requirements. See Note 9 to the consolidated financial statements included in this Report for capital ratios of the Company and the Bank, compared to minimum capital requirements and for the Bank the standards for well capitalized depository institutions.
As of December 31, 2025, the Company’s and the Bank’s respective regulatory capital ratios exceeded applicable regulatory minimum capital requirements. See Note 9 to the consolidated financial statements included in this Report for capital ratios of the Company and the Bank, compared to minimum capital requirements and for the Bank the standards for well capitalized depository institutions.
The allowance is allocated to different segments of the loan portfolio, but the entire allowance is available for the loan portfolio in its entirety. -6- Restrictions on Dividends and Other Distributions The Company’s ability to pay dividends to its shareholders is subject to the restrictions set forth in the California General Corporation Law (“CGCL”).
The allowance is allocated to different segments of the loan portfolio, but the entire allowance is available for the loan portfolio in its entirety. -6- Restrictions on Dividends and Other Distributions The Company’s ability to pay dividends to its shareholders is subject and repurchase its shares to the restrictions set forth in the California General Corporation Law (“CGCL”).
While the Company’s assets were less than $10 billion as of December 31, 2024, interchange fees charged by larger institutions may dictate the level of fees smaller institutions will be able to charge to remain competitive.
While the Company’s assets were less than $10 billion as of December 31, 2025, interchange fees charged by larger institutions may dictate the level of fees smaller institutions will be able to charge to remain competitive.
The Company does not have any immediate plans to elect to use the community bank leverage ratio framework but may make such an election in the future. See the sections entitled “Capital Resources and Capital to Risk-Adjusted Assets” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information.
The Company does not have any immediate plans to elect to use the community bank leverage ratio framework but may make such an election in the future. See the sections entitled “Capital Resources” and “Capital to Risk-Adjusted Assets” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information.
Capital Standards The federal banking agencies have adopted pursuant the Dodd-Frank Act, which are risk-based capital adequacy guidelines intended to provide a measure of capital adequacy that reflects the degree of risk associated with a banking organization’s operations for both transactions resulting in assets being recognized on the balance sheet as assets, and the extension of credit facilities such as letters of credit and recourse arrangements, which are recorded as off balance sheet items.
Capital Standards The federal banking agencies have adopted capital standards, which are risk-based capital adequacy guidelines intended to provide a measure of capital adequacy that reflects the degree of risk associated with a banking organization’s operations for both transactions resulting in assets being recognized on the balance sheet as assets, and the extension of credit facilities such as letters of credit and recourse arrangements, which are recorded as off balance sheet items.
Competition The Bank’s principal competitors for deposits and loans are major banks and smaller community banks, savings and loan associations and credit unions. To a lesser extent, competitors include thrift and loans, mortgage brokerage companies and insurance companies.
Competition The Bank’s principal competitors for deposits and loans are major banks and smaller community banks, savings and loan associations and credit unions. To a lesser extent, competitors include thrift and loans, mortgage brokerage companies, insurance companies and Internet-based “fintech” companies.
Such documents as well as the Company’s director, officer and employee Code of Conduct and Ethics are also available free of charge from the Company by request to: Westamerica Bancorporation Corporate Secretary A-2M Post Office Box 1200 Suisun City, California 94585-1200 Human Capital Resources The Company and its subsidiaries employed 642 employees (616 full-time equivalent staff) as of December 31, 2024.
Such documents as well as the Company’s director, officer and employee Code of Conduct and Ethics are also available free of charge from the Company by request to: Westamerica Bancorporation Corporate Secretary A-2M Post Office Box 1200 Suisun City, California 94585-1200 Human Capital Resources The Company and its subsidiaries employed 627 employees (608 full-time equivalent staff) as of December 31, 2025.
The CGCL provides that a corporation may make a distribution to its shareholders if (i) the corporation’s retained earnings equal or exceed the amount of the proposed distribution plus unpaid accrued dividends (if any) on securities with a dividend preference, or (ii) immediately after the dividend, the corporation’s total assets equal or exceed total liabilities plus unpaid accrued dividends (if any) on securities with a dividend preference.
The CGCL provides that a corporation may make a distribution to its shareholders, such as a cash dividend or share repurchase, to the extent that (i) the corporation’s retained earnings equal or exceed the amount of the proposed distribution plus unpaid accrued dividends (if any) on securities with a dividend preference, or (ii) immediately after the dividend, the corporation’s total assets equal or exceed total liabilities plus unpaid accrued dividends (if any) on securities with a dividend preference.
In addition to substantive penalties and corrective measures that may be required for a violation of certain fair lending laws, the federal banking agencies may take compliance with such laws and CRA into account when regulating and supervising other activities including merger applications. In 2024, the federal banking agencies issued a final rule to strengthen and modernize the CRA regulations.
In addition to substantive penalties and corrective measures that may be required for a violation of certain fair lending laws, the federal banking agencies may take compliance with such laws and CRA into account when regulating and supervising other activities including merger applications.
The FDIC established the following Restoration Plan (the “Plan”) on September 15, 2020. • The FDIC will monitor deposit balance trends, potential losses, and other factors that affect the reserve ratio; • The FDIC will maintain the current schedule of assessment rates for all insured depository institutions; and • At least semiannually, the FDIC will update its analysis and projections for the DIF and, if necessary, recommend any modifications to the Plan, such as increasing assessment rates.
The FDIC established the following Restoration Plan (the “Plan”) on September 15, 2020. • The FDIC will monitor deposit balance trends, potential losses, and other factors that affect the reserve ratio; • The FDIC will maintain the current schedule of assessment rates for all insured depository institutions; and • At least semiannually, the FDIC will update its analysis and projections for the DIF and, if necessary, recommend any modifications to the Plan, such as increasing assessment rates. -7- The Plan was amended in June 2022, to restore the DIF reserve ratio to at least 1.35% by September 30, 2028.
At December 31, 2024, the Company had consolidated assets of approximately $6.1 billion, deposits of approximately $5.0 billion and shareholders’ equity of approximately $890 million. The Company assesses and is careful to address potential health, safety, and environmental risks.
At December 31, 2025, the Company had consolidated assets of approximately $6.0 billion, deposits of approximately $4.8 billion and shareholders’ equity of approximately $934 million. The Company assesses and is careful to address potential health, safety, and environmental risks.
The Company’s ability to pay dividends depends in part on the Bank’s ability to pay cash dividends to the Company.
The Company’s ability to pay dividends and repurchase its shares depends in part on the Bank’s ability to pay cash dividends to the Company.
Among other things, the Guidelines require each financial institution, under the supervision and ongoing oversight of its Board of Directors or an appropriate committee thereof, to develop, implement and maintain a comprehensive written information security program designed to ensure the security and confidentiality of customer information, to protect against any anticipated threats or hazards to the security or integrity of such information, and to protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer. -8- Anti-Money Laundering Laws The Bank Secrecy Act, as amended by the USA PATRIOT Act, gives the federal government powers to address money laundering and terrorist threats through enhanced domestic security measures, expanded surveillance powers and mandatory transaction reporting obligations.
Among other things, the Guidelines require each financial institution, under the supervision and ongoing oversight of its Board of Directors or an appropriate committee thereof, to develop, implement and maintain a comprehensive written information security program designed to ensure the security and confidentiality of customer information, to protect against any anticipated threats or hazards to the security or integrity of such information, and to protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer.
ITEM 1. BUSINESS Westamerica Bancorporation (the “Company”) is a bank holding company registered under the Bank Holding Company Act of 1956, as amended (“BHCA”). Its legal headquarters are located at 1108 Fifth Avenue, San Rafael, California 94901.
ITEM 1. BUSINESS Westamerica Bancorporation is a bank holding company registered under the Bank Holding Company Act of 1956, as amended (“BHCA”). Its legal headquarters are located at 1108 Fifth Avenue, San Rafael, California 94901. Its principal administrative offices are located at 4550 Mangels Boulevard, Fairfield, California 94534, its telephone number is (707) 863-6000 and its website address is www.westamerica.com.
The Plan was amended in June 2022, to restore the DIF reserve ratio to at least 1.35% by September 30, 2028. On October 18, 2022 the FDIC adopted a final rule to increase initial base deposit insurance assessment rates for insured depository institutions by 2 basis points, beginning with the first quarterly assessment period of 2023.
On October 18, 2022 the FDIC adopted a final rule to increase initial base deposit insurance assessment rates for insured depository institutions by 2 basis points, beginning with the first quarterly assessment period of 2023. The increased assessment rate schedules will remain in effect unless and until the reserve ratio of the DIF meets or exceeds 2%.
It also may prohibit any FDIC-insured institution from engaging in any activity the FDIC determines by regulation or order poses a serious risk to the DIF.
While the FDIC is not the Bank's primary federal regulator, as the insurer of the Bank's deposits, the FDIC is authorized to conduct examinations of and to require reporting by FDIC-insured institutions. It also may prohibit any FDIC-insured institution from engaging in any activity the FDIC determines by regulation or order poses a serious risk to the DIF.
The Bank is a California-chartered commercial bank whose deposits are insured by the Federal Deposit Insurance Corporation (the “FDIC”) up to applicable limits. The principal communities served are located in Northern and Central California, from Mendocino, Lake and Nevada Counties in the north to Kern County in the south.
The Company provides a full range of banking services to individual and commercial customers in Northern and Central California through its subsidiary bank, Westamerica Bank (the “Bank”). The Bank is a California-chartered commercial bank whose deposits are insured by the Federal Deposit Insurance Corporation (the “FDIC”) up to applicable limits.
The federal banking agencies also consider interest rate risk (related to the interest rate sensitivity of an institution’s assets and liabilities, and its off balance sheet financial instruments) in the evaluation of a bank’s capital adequacy. -5- On July 2, 2013, the Federal Reserve Board approved a final rule that implements changes to the regulatory capital framework for all banking organizations over a transitional period 2015 through 2018.
This evaluation is made as a part of the institution’s regular safety and soundness examination. The federal banking agencies also consider interest rate risk (related to the interest rate sensitivity of an institution’s assets and liabilities, and its off balance sheet financial instruments) in the evaluation of a bank’s capital adequacy.
The Company has not elected to become an FHC. -4- Regulation and Supervision of Banks The Bank is a California state-chartered Federal Reserve member bank and its deposits are insured by the FDIC. The Bank is subject to regulation, supervision and regular examination by the California Department of Financial Protection and Innovation and the FRB.
The Bank is subject to regulation, supervision and regular examination by the California Department of Financial Protection and Innovation and the FRB.
The increased assessment rate schedules will remain in effect unless and until the reserve ratio of the DIF meets or exceeds 2%. A significant increase in DIF insurance premiums would have an adverse effect on the operating expenses and results of operations of the Bank.
A significant increase in DIF insurance premiums would have an adverse effect on the operating expenses and results of operations of the Bank. The Company cannot provide any assurance as to the effect of any future changes in its deposit insurance premium rates.
The Company’s strategic focus is on the banking needs of small businesses.
The principal communities served are located in Northern and Central California, from Mendocino, Lake and Nevada Counties in the north to Kern County in the south. The Company’s strategic focus is on the banking needs of small businesses.
Removed
Its principal administrative offices are located at 4550 Mangels Boulevard, Fairfield, California 94534, its telephone number is (707) 863-6000 and its website address is www.westamerica.com. The Company provides a full range of banking services to individual and commercial customers in Northern and Central California through its subsidiary bank, Westamerica Bank (the “Bank”).
Added
Consumer Laws and Regulations We are subject to consumer laws and regulations intended to protect consumers in transactions with depository institutions, as well as other laws or regulations affecting customers of financial institutions generally.
Removed
This evaluation is made as a part of the institution’s regular safety and soundness examination.
Added
These laws and regulations include, among others, the Truth in Lending Act, the Truth in Savings Act, the Electronic Funds Transfer Act, the Expedited Funds Availability Act, the Equal Credit Opportunity Act, the Fair Housing Act, the Real Estate Settlement and Procedures Act, the Fair Credit Reporting Act and the Federal Trade Commission Act, among others.
Removed
The Company cannot provide any assurance as to the effect of any future changes in its deposit insurance premium rates. -7- While the FDIC is not the Bank's primary federal regulator, as the insurer of the Bank's deposits, the FDIC is authorized to conduct examinations of and to require reporting by FDIC-insured institutions.
Added
These laws and regulations mandate certain disclosure requirements and regulate the manner in which financial institutions must deal with customers when taking deposits or making loans. The Dodd-Frank Act centralized responsibility for federal consumer financial protection including implementing, examining and enforcing compliance with federal consumer financial laws with the Consumer Financial Protection Bureau (the “CFPB”).
Removed
Economic Growth, Regulatory Relief and Consumer Protection Act On May 24, 2018, President Trump signed into law the first major financial services reform bill since the enactment of the Dodd-Frank Act. The Economic Growth, Regulatory Relief, and Consumer Protection Act (the “Relief Act”) modifies or eliminates certain requirements on community and regional banks and nonbank financial institutions.
Added
Depository institutions with less than $10 billion in assets, such as the Bank, are subject to rules promulgated by the CFPB but continue to be examined and supervised by federal banking regulators for consumer compliance purposes. The Dodd-Frank Act also gives state attorneys general the ability to enforce federal consumer protection laws.
Removed
Under the final rule, banks with assets of at least $2 billion as of December 31 in both of the prior two calendar years will be a “large bank.” The agencies will evaluate bank classified as large banks, such as the Bank, under four performance tests: the Retail Lending Test, the Retail Services and Products Test, the Community Development Financing Test, and the Community Development Services Test.
Added
Anti-Money Laundering Laws The Bank Secrecy Act, as amended by the USA PATRIOT Act, gives the federal government powers to address money laundering and terrorist threats through enhanced domestic security measures, expanded surveillance powers and mandatory transaction reporting obligations.
Removed
The applicability date for the majority of the provisions in the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1, 2027.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

32 edited+2 added−7 removed66 unchanged
Biggest changeFinancial institution failures can result in further losses as a consequence of defaults on securities issued by them and defaults under contracts entered into with such entities as counterparties. The failure of institutions with FDIC insured deposits can cause the DIF reserve ratio to decline, resulting in increased deposit insurance assessments on surviving FDIC insured institutions.
Biggest changeThe 2008 - 2009 financial crisis led to the failure or merger of a number of financial institutions. Financial institution failures can result in further losses as a consequence of defaults on securities issued by them and defaults under contracts entered into with such entities as counterparties.
The cost of employee compensation is a significant portion of operating expenses and can materially impact results of operations or profitability, especially during periods of wage inflation. The unanticipated loss of the services of key personnel could have an adverse effect on the business. The Company is subject to environmental liability risk associated with lending activities.
The cost of employee compensation is a significant portion of operating expenses and can materially impact results of operations or profitability, especially during periods of wage inflation. The unanticipated loss of the services of key personnel could have an adverse effect on the business. -15- The Company is subject to environmental liability risk associated with lending activities.
Any failure or circumvention of the Company’s controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on the Company’s business, results of operations and financial condition. -14- Operational Risks Climate change and the transition to renewable energy and a net zero emissions economy pose operational, commercial and regulatory risks.
Any failure or circumvention of the Company’s controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on the Company’s business, results of operations and financial condition. Operational Risks Climate change and the transition to renewable energy and a net zero emissions economy pose operational, commercial and regulatory risks.
Over the intermediate and longer-term, the Company can be subject to transition risks such as market demand, and policy and law changes. None of the Company’s physical locations are located near sea level, and only a limited number of branches are located in flood zones.
Over the intermediate and longer-term, the Company can be subject to transition risks such as market demand, and policy and law changes. -14- None of the Company’s physical locations are located near sea level, and only a limited number of branches are located in flood zones.
ITEM 1A. RISK FACTORS Readers and prospective investors in the Company’s securities should carefully consider the following risk factors as well as the other information contained or incorporated by reference in this Report. The risks and uncertainties described below are not the only ones facing the Company.
ITEM 1A. RISK FACTORS Readers and prospective investors in the Company’s securities should carefully consider the following risk factors as well as the other information contained or incorporated by reference in this Report. -9- The risks and uncertainties described below are not the only ones facing the Company.
Any one or a combination of such risk factors, or other factors, could materially adversely affect the Company's business, financial condition, results of operations and prospects. The weakness of other financial institutions could adversely affect the Company. Financial services institutions are interrelated as a result of trading, clearing, counterparty, or other relationships.
Any one or a combination of such risk factors, or other factors, could materially adversely affect the Company's business, financial condition, results of operations and prospects. -10- The weakness of other financial institutions could adversely affect the Company. Financial services institutions are interrelated as a result of trading, clearing, counterparty, or other relationships.
The Company competes with other financial and bank holding companies, state and national commercial banks, savings and loan associations, consumer finance companies, credit unions, securities brokerages, insurance companies, mortgage banking companies, money market mutual funds, asset-based non-bank lenders, government sponsored or subsidized lenders and other financial services providers.
The Company competes with other financial and bank holding companies, state and national commercial banks, savings and loan associations, consumer finance companies, credit unions, securities brokerages, insurance companies, mortgage banking companies, money market mutual funds, asset-based non-bank lenders, government sponsored or subsidized lenders, Internet-based “fintech” companies and other financial services providers.
While the Company does not currently expect or intend to sell these securities, if the Company were required to sell such securities to meet liquidity needs, it may incur losses, which could impair the Company’s capital financial condition and results of operations.
While the Company does not expect or intend to sell these securities, if the Company were required to sell such securities to meet liquidity needs, it could incur losses, which could impair the Company’s capital financial condition and results of operations.
A sustained or continuing weakness or weakening in business and economic conditions generally or specifically in the principal markets in which the Company does business could have one or more of the following adverse impacts on the Company’s business: ● a decrease in the demand for loans and other products and services offered by the Company; ● an increase or decrease in the usage of unfunded credit commitments; ● an increase or decrease in the amount of deposits; ● a decrease in non-depository funding available to the Company; ● an impairment of certain intangible assets, including goodwill; ● an increase in the number of clients and counterparties who become delinquent, file for protection under bankruptcy laws or default on their loans or other obligations to the Company, which could result in a higher level of nonperforming assets, net charge-offs, provision for credit losses, reduced interest revenue and cash flows, and valuation adjustments on assets; ● an impairment in the value of investment securities; ● an impairment in the value of life insurance policies owned by the Company; ● an impairment in the value of real estate owned by the Company; and ● an increase in operating costs The 2008 - 2009 financial crisis led to the failure or merger of a number of financial institutions.
A sustained or continuing weakness or weakening in business and economic conditions generally or specifically in the principal markets in which the Company does business could have one or more of the following adverse impacts on the Company’s business: ● a decrease in the demand for loans and other products and services offered by the Company; ● an increase or decrease in the usage of unfunded credit commitments; ● an increase or decrease in the amount of deposits; ● a decrease in non-depository funding available to the Company; ● an impairment of certain intangible assets, including goodwill; ● an increase in the number of clients and counterparties who become delinquent, file for protection under bankruptcy laws or default on their loans or other obligations to the Company, which could result in a higher level of nonperforming assets, net charge-offs, provision for credit losses, reduced interest revenue and cash flows, and valuation adjustments on assets; ● an impairment in the value of investment securities; ● an impairment in the value of life insurance policies owned by the Company; ● an impairment in the value of real estate owned by the Company; and ● an increase in operating costs.
Borrowers with real estate loan collateral located in flood zones must carry flood insurance under the loans’ terms. The Company had $5 million in loans to agricultural borrowers at December 31, 2024; Management continuously monitors these customers’ access to adequate water sources as well as their ability to sustain low crop yields without encountering financial hardship.
Borrowers with real estate loan collateral located in flood zones must carry flood insurance under the loans’ terms. The Company had $16 million in loans to agricultural borrowers at December 31, 2025; Management continuously monitors these customers’ access to adequate water sources as well as their ability to sustain low crop yields without encountering financial hardship.
Generally, the counties surrounding and near San Francisco Bay could recover more soundly from the recession than counties in the California “Central Valley,” from Sacramento in the north to Bakersfield in the south, where many of the Bank’s customers are located. Approximately 27% of the Company’s loans were to borrowers in the California “Central Valley” as of December 31, 2024.
Generally, the counties surrounding and near San Francisco Bay could recover more soundly from the recession than counties in the California “Central Valley,” from Sacramento in the north to Bakersfield in the south, where many of the Bank’s customers are located. Approximately 29% of the Company’s loans were to borrowers in the California “Central Valley” as of December 31, 2025.
Substantially all of the Company’s business is located in California. A portion of the loan portfolio of the Company is dependent on real estate. At December 31, 2024, real estate served as the principal source of collateral with respect to approximately 65% of the Company’s loan portfolio.
Substantially all of the Company’s business is located in California. A portion of the loan portfolio of the Company is dependent on real estate. At December 31, 2025, real estate served as the principal source of collateral with respect to approximately 68% of the Company’s loan portfolio.
The Articles of Incorporation of the Company authorize the issuance of 150 million shares of common stock (and two additional classes of 1 million shares each, denominated “Class B Common Stock” and “Preferred Stock”, respectively) of which approximately 26.7 million shares of common stock were outstanding at December 31, 2024.
The Articles of Incorporation of the Company authorize the issuance of 150 million shares of common stock (and two additional classes of 1 million shares each, denominated “Class B Common Stock” and “Preferred Stock”, respectively) of which approximately 24.6 million shares of common stock were outstanding at December 31, 2025.
Also, the Company could experience higher credit losses because of federal or state legislation or regulatory action that limits or delays the Bank's ability to foreclose on property or other collateral or makes foreclosure less economically feasible.
Also, the Company could experience higher credit losses because of federal or state legislation or regulatory action that limits or delays the Bank's ability to foreclose on property or other collateral or makes foreclosure less economically feasible. Federal, state and local governments could pass tax legislation causing the Company to pay higher levels of taxes.
Pursuant to its stock option plans, at December 31, 2024, the Company had outstanding options for 1,048 thousand shares of common stock, of which 656 thousand were currently exercisable. As of December 31, 2024, 589 thousand shares of Company common stock remained available for grants under the Company’s equity incentive plans.
Pursuant to its stock option plans, at December 31, 2025, the Company had outstanding options for 968 thousand shares of common stock, of which 615 thousand were currently exercisable. As of December 31, 2025, 750 thousand shares of Company common stock remained available for grants under the Company’s equity incentive plans.
There can be no assurance that the declines in market value will not result in other than temporary impairments of these assets, which would lead to loss recognition that could have a material adverse effect on the Company’s net income and capital levels. -10- Negative developments affecting the banking industry, such as bank failures, may have a material adverse effect on the Company.
There can be no assurance that the declines in market value will not result in other than temporary impairments of these assets, which would lead to loss recognition that could have a material adverse effect on the Company’s net income and capital levels.
The Company could realize losses if it were required to sell securities in its held-to-maturity securities portfolio to meet liquidity needs. As a result of increases in interest rates over the last year, the market value of previously issued government and other debt securities has declined significantly, resulting in unrealized losses in the held-to-maturity portion of the Company’s securities portfolios.
The Company could realize losses if it were required to sell securities in its held-to-maturity securities portfolio to meet liquidity needs. Interest rates could rise and cause the market value of previously issued government and other debt securities to decline significantly, resulting in unrealized losses in the held-to-maturity portion of the Company’s securities portfolios.
In addition, if any of the Company’s subsidiaries were to liquidate, that subsidiary’s creditors will be entitled to receive distributions from the assets of that subsidiary to satisfy their claims against it before the Company, as a holder of an equity interest in the subsidiary, will be entitled to receive any of the assets of the subsidiary.
In addition, if any of the Company’s subsidiaries were to liquidate, that subsidiary’s creditors will be entitled to receive distributions from the assets of that subsidiary to satisfy their claims against it before the Company, as a holder of an equity interest in the subsidiary, will be entitled to receive any of the assets of the subsidiary. -12- The Company ’ s payment of dividends on common stock could be eliminated or reduced.
The behavior of depositors in regard to the level of FDIC insurance could cause the Bank’s existing customers to reduce the amount of deposits held at the Bank, and could cause new customers to open deposit accounts at the Bank. The level and composition of the Bank's deposit portfolio directly impacts the Bank's funding cost and net interest margin.
The behavior of depositors in regard to the level of FDIC insurance could cause the Bank’s existing customers to reduce the amount of deposits held at the Bank, and could cause new customers to open deposit accounts at the Bank.
There is no precise method of predicting loan losses and determining the adequacy of the reserve requires the Company’s management to make a number of estimates and judgments.
For example, the Company maintains a reserve for potential loan defaults and non-performance. There is no precise method of predicting loan losses and determining the adequacy of the reserve requires the Company’s management to make a number of estimates and judgments.
Regulatory Risks Restrictions on dividends and other distributions could limit amounts payable to the Company. As a holding company, a substantial portion of the Company’s cash flow typically comes from dividends paid by the Bank. Various statutory provisions restrict the amount of dividends the Company’s subsidiaries can pay to the Company without regulatory approval.
As a holding company, a substantial portion of the Company’s cash flow typically comes from dividends paid by the Bank. Various statutory provisions restrict the amount of dividends the Company’s subsidiaries can pay to the Company without regulatory approval. A reduction in subsidiary dividends paid to the Company could limit the capacity of the Company to pay dividends.
The banking industry could experience significant volatility with multiple bank failures. Industrywide concerns could develop related to liquidity, deposit outflows and unrealized losses on investment debt securities.
Negative developments affecting the banking industry, such as bank failures, may have a material adverse effect on the Company. The banking industry could experience significant volatility with multiple bank failures. Industrywide concerns could develop related to liquidity, deposit outflows and unrealized losses on investment debt securities.
The Company ’ s payment of dividends on common stock could be eliminated or reduced. Holders of the Company’s common stock are entitled to receive dividends only when, as, and if declared by the Company’s Board of Directors.
Holders of the Company’s common stock are entitled to receive dividends only when, as, and if declared by the Company’s Board of Directors.
Management regularly reviews and updates the Company’s internal control over financial reporting, disclosure controls and procedures, and corporate governance policies and procedures. The Company maintains controls and procedures to mitigate against risks such as processing system failures and errors, and customer or employee fraud, and maintains insurance coverage for certain of these risks.
The Company maintains controls and procedures to mitigate against risks such as processing system failures and errors, and customer or employee fraud, and maintains insurance coverage for certain of these risks.
Unfavorable or uncertain economic and market conditions can be caused by: declines in economic growth, high rates of unemployment, deflation, pandemics, declines in business activity or consumer, investor or business confidence; limitations on the availability of or increases in the cost of credit and capital; increases in inflation; natural disasters; or a combination of these or other factors. -12- Such business conditions could adversely affect the credit quality of the Company’s loans, the demand for loans, loan volumes and related revenue, securities valuations, amounts of deposits, availability of funding, results of operations and financial condition.
Unfavorable or uncertain economic and market conditions can be caused by: declines in economic growth, high rates of unemployment, deflation, pandemics, declines in business activity or consumer, investor or business confidence; limitations on the availability of or increases in the cost of credit and capital; increases in inflation; natural disasters; or a combination of these or other factors.
If the Company loses the services of any of our key management personnel, its business could suffer. Our future success significantly depends on the continued service and performance of our key management personnel. Our senior management team has significant industry experience and would be difficult to replace. In particular, David L.
Our future success significantly depends on the continued service and performance of our key management personnel. Our senior management team has significant industry experience and would be difficult to replace. In particular, David L. Payne, our Chairman, President and Chief Executive Officer, has led the Company for over 30 years.
If we are unable to attract or retain appropriately qualified personnel, we may not be successful in originating loans and servicing our customers, which could have a materially adverse effect on our business, financial condition and results of operations. -15- The Company competes with many banks and other traditional, non-traditional, brick and mortar and online financial service providers .
Competition for these employees is intense and we may not be able to attract and retain key personnel. If we are unable to attract or retain appropriately qualified personnel, we may not be successful in originating loans and servicing our customers, which could have a materially adverse effect on our business, financial condition and results of operations.
Federal, state and local governments could pass tax legislation causing the Company to pay higher levels of taxes. -13- The FDIC insures deposits at insured financial institutions up to certain limits. The FDIC charges insured financial institutions premiums to maintain the Deposit Insurance Fund. The FDIC may increase premium assessments to maintain adequate funding of the Deposit Insurance Fund.
The FDIC insures deposits at insured financial institutions up to certain limits. The FDIC charges insured financial institutions premiums to maintain the Deposit Insurance Fund. The FDIC may increase premium assessments to maintain adequate funding of the Deposit Insurance Fund.
Systems, Accounting and Internal Control Risks The accuracy of the Company ’ s judgments and estimates about financial and accounting matters will impact operating results and financial condition. The Company makes certain estimates and judgments in preparing its financial statements. For example, the Company maintains a reserve for potential loan defaults and non-performance.
The level and composition of the Bank's deposit portfolio directly impacts the Bank's funding cost and net interest margin. -13- Systems, Accounting and Internal Control Risks The accuracy of the Company ’ s judgments and estimates about financial and accounting matters will impact operating results and financial condition. The Company makes certain estimates and judgments in preparing its financial statements.
The risks associated with climate change and the transition to renewable energy and a net zero emissions economy continue to evolve rapidly, and climate change-related risks may change or increase over time. The effects of pandemics and their impact are highly unpredictable and could be significant, and could harm the Company ’ s business, financial condition, and operating results.
The risks associated with climate change and the transition to renewable energy and a net zero emissions economy continue to evolve rapidly, and climate change-related risks may change or increase over time. If the Company loses the services of any of our key management personnel, its business could suffer.
Competition among providers of financial services in markets, particularly within California, is intense.
The Company competes with many banks and other traditional, non-traditional, brick and mortar and online financial service providers . Competition among providers of financial services in markets, particularly within California, is intense.
Weak economic conditions can significantly weaken the strength and liquidity of financial institutions.
The failure of institutions with FDIC insured deposits can cause the DIF reserve ratio to decline, resulting in increased deposit insurance assessments on surviving FDIC insured institutions. Weak economic conditions can significantly weaken the strength and liquidity of financial institutions.
Removed
A reduction in subsidiary dividends paid to the Company could limit the capacity of the Company to pay dividends.
Added
Such business conditions could adversely affect the credit quality of the Company’s loans, the demand for loans, loan volumes and related revenue, securities valuations, amounts of deposits, availability of funding, results of operations and financial condition. Regulatory Risks Restrictions on dividends and other distributions could limit amounts payable to the Company.
Removed
For example, during the second quarter 2023, the Company was notified that there may have been a compromise of a specific set of files processed by a third party vendor that could have affected a limited number of customers.
Added
The Company ’ s controls and procedures may fail or be circumvented . Management regularly reviews and updates the Company’s internal control over financial reporting, disclosure controls and procedures, and corporate governance policies and procedures.
Removed
This incident did not occur on a Company system and the Company does not use the software that may have been compromised. The Company has implemented data security safeguards with its third party vendors designed to quickly identify and contain improper access to sensitive information. The Company notified the affected customers as required by law.
Removed
As of December 31, 2024, to the Company’s knowledge, there is no indication that any information has been subject to misuse as a result of the incident. The Company ’ s controls and procedures may fail or be circumvented .
Removed
The Company’s business, operations and financial performance may be affected by the macroeconomic impacts resulting from pandemics, and the Company’s financial results in future periods could differ significantly from the Company’s historical results.
Removed
The extent to which the Company’s business will be affected will depend on a variety of factors, many of which are outside of the Company’s control, including the persistence of the pandemic, the actions of governmental authorities, changes in customer preferences, impacts on economic activity, and the possibility of recession or financial market instability.
Removed
Payne, our Chairman, President and Chief Executive Officer, has led the Company for over 30 years. Competition for these employees is intense and we may not be able to attract and retain key personnel.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Company uses data loss prevention, email filtering and web filtering software to ensure malicious data does not enter the Company's network, and sensitive information does not leave the network unless properly secured. Penetration tests and vulnerability scanning are performed on a regular basis. All Company networks are secured behind firewalls.
Biggest changeIn addition to this training program, simulated phishing attempts and remote social engineering attacks are performed on a regular basis to evaluate employees’ understanding of these risks. The Company uses data loss prevention, email filtering and web filtering software to ensure malicious data does not enter the Company's network, and sensitive information does not leave the network unless properly secured.
ITEM 1C. CYBERSECURITY The Company has developed and implemented an Information Security Program based on the Cybersecurity Framework (CSF) best practices and recommendations from the National Institute of Standards and Technology (NIST), applicable regulatory guidance, and other industry standards.
ITEM 1C. CYBERSECURITY The Company has developed and implemented an Information Security Program based on the Cybersecurity Framework 2.0 (CSF) best practices and recommendations from the National Institute of Standards and Technology (NIST), applicable regulatory guidance, and other industry standards.
During the year ended December 31, 2024, there were no cybersecurity incidents that materially affected or are reasonably likely to materially affect the Company.
During the year ended December 31, 2025, there were no cybersecurity incidents that materially affected or are reasonably likely to materially affect the Company.
An Incident Response Committee that includes representatives from key areas of the Company meets in the event of cybersecurity incidents. The Committee ensures the proper notifications are made in order to comply with all relevant laws, rules and regulations.
Data Security Analysts review changes to access to ensure they are authorized and appropriate. An Incident Response Committee that includes representatives from key areas of the Company meets in the event of cybersecurity incidents. The Committee ensures the proper notifications are made in order to comply with all relevant laws, rules and regulations.
The ISO provides an update to the Board of Directors on a quarterly basis. The Information Security Program is approved by the Board annually. -16- The ISO maintains risk assessments for key IT systems. A third party cybersecurity risk assessment tool, as well as the FFIEC's Cybersecurity Assessment Tool (CAT) are also used annually to assess cybersecurity risk.
The ISO provides an update to the Board of Directors on a quarterly basis. The Information Security Program is approved by the Board annually. The ISO maintains risk assessments for key IT systems.
Additionally, Security Information and Event Management (SIEM) technology, an Intrusion Detection System (IDS), and an Intrusion Prevention System (IPS) are used. Access to data on the Company's networks is granted only if needed for job functions. Data Security Analysts review changes to access to ensure they are authorized and appropriate.
Penetration tests and vulnerability scanning are performed on a regular basis. All Company networks are secured behind firewalls. Additionally, Security Information and Event Management (SIEM) technology, an Intrusion Detection System (IDS), and an Intrusion Prevention System (IPS) are used. -16- Access to data on the Company's networks is granted only if needed for job functions.
Third parties are assessed and categorized according to service type, compliance risk, financial risk, operational risk, and security risk. The level of due diligence and ongoing monitoring that is performed is based on inherent risk as well as specifics such as if the vendor hosts data in the cloud or has access to consumer information.
The level of due diligence and ongoing monitoring that is performed is based on inherent risk as well as specifics such as if the vendor hosts data in the cloud or has access to consumer information. The Company uses a training system to educate new and existing employees on cybersecurity risks.
Removed
The Company uses a training system to educate new and existing employees on cybersecurity risks. In addition to this training program, simulated phishing attempts and remote social engineering attacks are performed on a regular basis to evaluate employees’ understanding of these risks.
Added
A third-party cybersecurity risk assessment tool, assessments of NIST’s CSF and the Cybersecurity Infrastructure Security Agency’s (CISA) Cybersecurity Performance Goals (CPGs), and the Conference of State Bank Supervisors’ (CSBS) Ransomware Self-Assessment Tool (R-SAT) are used annually to assess cybersecurity risk. Third parties are assessed and categorized according to service type, compliance risk, financial risk, operational risk, and security risk.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeThe Company owns 27 banking office locations and one centralized administrative service center facility and leases 55 facilities. Most of the leases contain renewal options and provisions for rental increases, principally for changes in the cost of living index, and for changes in other operating costs such as property taxes and maintenance.
Biggest changeThe Company owns 26 banking office locations and one centralized administrative service center facility and leases 55 facilities. Most of the leases contain renewal options and provisions for rental increases, principally for changes in the cost of living index, and for changes in other operating costs such as property taxes and maintenance.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+3 added−1 removed2 unchanged
Biggest changeDecember 31, 2019 2020 2021 2022 2023 2024 Westamerica Bancorporation (WABC) $ 100.00 $ 83.91 $ 90.13 $ 94.77 $ 93.99 $ 90.49 S&P 500 (SPX) 100.00 118.47 152.41 124.75 157.49 160.04 NASDAQ Bank Index (CBNK) 100.00 92.48 132.06 110.47 106.65 110.32 ISSUER PURCHASES OF EQUITY SECURITIES The Company repurchases shares of its common stock in the open market to optimize the Company’s use of equity capital and enhance shareholder value and with the intention of lessening the dilutive impact of issuing new shares under stock option plans, and other ongoing requirements.
Biggest changeDecember 31, 2020 2021 2022 2023 2024 2025 Westamerica Bancorporation (WABC) $ 100.00 $ 107.41 $ 112.94 $ 112.06 $ 107.89 $ 102.03 S&P 500 (SPX) 100.00 128.66 105.30 132.92 166.11 195.73 NASDAQ Bank Index (CBNK) 100.00 142.84 119.50 115.36 139.02 149.11 ISSUER PURCHASES OF EQUITY SECURITIES The table below sets forth the information with respect to purchases made by or on behalf of Westamerica Bancorporation or any “affiliated purchaser”, as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of common stock during the three months ended December 31, 2025. 2025 Period (a) Total Number of Shares Purchased (b) Average Price Paid per Share (c) Number of Shares Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (In thousands, except price paid) October 1 through October 31 189 $ 48.07 189 194 November 1 through November 30 194 47.60 194 - December 1 through December 31 102 49.27 102 1,898 Total 485 $ 48.13 485 1,898 The Company repurchases shares of its common stock in the open market to optimize the Company’s use of equity capital and enhance shareholder value and with the intention of lessening the dilutive impact of issuing new shares under stock option plans, and other ongoing requirements.
The comparison assumes $100 invested in each on December 31, 2019 and reinvestment of all dividends.
The comparison assumes $100 invested in each on December 31, 2015 and reinvestment of all dividends.
ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s common stock is traded on the NASDAQ Stock Market (“NASDAQ”) under the symbol “WABC”. As of January 31, 2025, there were approximately 4,500 shareholders of record of the Company’s common stock.
ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s common stock is traded on The Nasdaq Stock Market LLC (“NASDAQ”) under the symbol “WABC”. As of January 31, 2026, there were approximately 4,300 shareholders of record of the Company’s common stock.
See Item 1, “Business - Supervision and Regulation.” The notes to the consolidated financial statements included in this Report contain additional information regarding the Company’s capital levels, capital structure, regulations affecting subsidiary bank dividends paid to the Company, the Company’s earnings, financial condition and cash flows, and cash dividends declared and paid on common stock.
See Item 1, “Business - Supervision and Regulation.” The notes to the consolidated financial statements included in this Report contain additional information regarding the Company’s capital levels, capital structure, regulations affecting subsidiary bank dividends paid to the Company, the Company’s earnings, financial condition and cash flows, and cash dividends declared and paid on common stock. -17- Stock performance The following chart compares the cumulative return on the Company’s stock during the ten years ended December 31, 2025 with the cumulative return on the S&P 500 composite stock index and NASDAQ’S Bank Index.
Stock performance The following chart compares the cumulative return on the Company’s stock during the ten years ended December 31, 2024 with the cumulative return on the S&P 500 composite stock index and NASDAQ’S Bank Index. The comparison assumes $100 invested in each on December 31, 2014 and reinvestment of all dividends.
The comparison assumes $100 invested in each on December 31, 2020 and reinvestment of all dividends.
December 31, 2014 2015 2016 2017 2018 2019 Westamerica Bancorporation (WABC) $ 100.00 $ 98.60 $ 136.84 $ 133.21 $ 127.89 $ 159.75 S&P 500 (SPX) 100.00 101.34 113.44 138.15 132.03 173.46 NASDAQ Bank Index (CBNK) 100.00 108.74 149.85 157.84 132.10 164.07 December 31, 2020 2021 2022 2023 2024 Westamerica Bancorporation (WABC) $ 134.05 $ 143.98 $ 151.39 $ 150.21 $ 144.62 S&P 500 (SPX) 205.50 264.39 216.40 273.19 277.61 NASDAQ Bank Index (CBNK) 151.74 216.73 181.31 175.04 181.05 -18- The following chart compares the cumulative return on the Company’s stock during the five years ended December 31, 2024 with the cumulative return on the S&P 500 composite stock index and NASDAQ’S Bank Index.
December 31, 2015 2016 2017 2018 2019 2020 Westamerica Bancorporation (WABC) $ 100.00 $ 138.78 $ 135.09 $ 129.70 $ 162.01 $ 135.95 S&P 500 (SPX) 100.00 111.93 136.32 130.28 171.16 202.78 NASDAQ Bank Index (CBNK) 100.00 137.80 145.15 121.48 150.88 139.54 December 31, 2021 2022 2023 2024 2025 Westamerica Bancorporation (WABC) $ 146.02 $ 153.54 $ 152.34 $ 146.92 $ 138.71 S&P 500 (SPX) 260.89 213.52 269.55 338.30 396.91 NASDAQ Bank Index (CBNK) 199.32 166.75 160.98 194.62 208.07 [The remainder of this page intentionally left blank] -18- The following chart compares the cumulative return on the Company’s stock during the five years ended December 31, 2025 with the cumulative return on the S&P 500 composite stock index and NASDAQ’S Bank Index.
Removed
The repurchase plan approved July 28, 2022 expired September 1, 2023. There is no replacement plan in place currently. No shares were repurchased during the period from October 1, 2024 through December 31, 2024.
Added
Shares were repurchased during the period from October 1 through November 18, 2025 pursuant to a program approved by the Board of Directors on February 27, 2025 authorizing the purchase of up to 2 million shares of common stock from time to time prior to March 31, 2026.
Added
No shares were repurchased during the period from November 19 through December 18, 2025.
Added
Shares were repurchased during the period from December 19 through December 31, 2025 pursuant to a replacement program approved by the Board of Directors on December 18, 2025 authorizing the purchase of up to 2 million shares of the Company’s common stock from time to time prior to December 31, 2026.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

107 edited+19 added−23 removed102 unchanged
Biggest changeAt and For the Years Ended December 31, 2024 2023 2022 2021 2020 ($ in thousands) Analysis of the Allowance for Credit Losses Balance, end of prior period $ 16,867 $ 20,284 $ 23,514 $ 23,854 $ 19,484 Adoption of ASU 2016-13 - - - - 2,017 Balance, beginning of period 16,867 20,284 23,514 23,854 21,501 Provision for (reversal of) credit losses on loans 300 (1,150 ) 6 2 4,307 Loans charged off: Commercial (283 ) (410 ) (20 ) (56 ) (236 ) Commercial real estate - (45 ) - - - Consumer and other installment (6,391 ) (7,499 ) (6,205 ) (3,192 ) (3,963 ) Total chargeoffs (6,674 ) (7,954 ) (6,225 ) (3,248 ) (4,199 ) Recoveries of loans previously charged off: Commercial 124 2,359 376 228 351 Commercial real estate 204 71 62 743 49 Consumer and other installment 3,959 3,257 2,551 1,935 1,845 Total recoveries 4,287 5,687 2,989 2,906 2,245 Net loan losses (2,387 ) (2,267 ) (3,236 ) (342 ) (1,954 ) Balance, end of period $ 14,780 $ 16,867 $ 20,284 $ 23,514 $ 23,854 Net loan losses as a percentage of average loans (0.29 )% (0.25 )% (0.32 )% (0.03 )% (0.16 )% Selected financial data: (at period end) Loans $ 820,300 $ 866,602 $ 958,488 $ 1,068,126 $ 1,256,243 Nonaccrual loans 201 403 146 692 4,329 Allowance for credit losses as a percentage of loans 1.80 % 1.95 % 2.12 % 2.20 % 1.90 % Nonaccrual loans as a percentage of loans 0.02 % 0.05 % 0.02 % 0.06 % 0.34 % Allowance for credit losses to nonaccrual loans 7353.23 % 4185.36 % 13893.15 % 3397.98 % 551.03 % The following table summarizes net (chargeoffs) recoveries and the ratio of net (charge-offs) recoveries to average loans for the periods indicated: For the Year Ended December 31, 2024 2023 2022 As a percentage As a percentage As a percentage Average of Net (chargeoffs) Average of Net (chargeoffs) Average of Net (chargeoffs) Net (chargeoffs) Loan recoveries Net (chargeoffs) Loan recoveries Net (chargeoffs) Loan recoveries Recoveries Balances to Average loans Recoveries Balances to Average loans Recoveries Balances to Average loans ($ in thousands) Commercial $ (159 ) $ 128,505 (0.12 )% $ 1,949 $ 149,137 1.31 % $ 356 $ 191,805 0.19 % Commercial real estate 204 493,282 0.04 % 26 492,183 0.01 % 62 504,713 0.01 % Construction - 5,064 - % - 4,362 - % - 1,676 - % Residential real estate - 9,197 - % - 12,080 - % - 15,694 - % Consumer and other installment (2,432 ) 200,088 (1.22 )% (4,242 ) 254,554 (1.67 )% (3,654 ) 284,076 (1.29 )% Total $ (2,387 ) $ 836,136 (0.29 )% $ (2,267 ) $ 912,316 (0.25 )% $ (3,236 ) $ 997,964 (0.32 )% The Company's allowance for credit losses on loans is maintained at a level considered adequate to provide for expected losses based on historical loss rates adjusted for current and expected conditions over a forecast period.
Biggest changeAt and For the Year Ended December 31, 2025 2024 2023 ($ in thousands) Analysis of the Allowance for Credit Losses Balance, beginning of period $ 14,780 $ 16,867 $ 20,284 Provision for (reversal of) credit losses on loans (550 ) 300 (1,150 ) Loans charged off: Commercial (1,597 ) (283 ) (410 ) Commercial real estate (191 ) - (45 ) Consumer and other installment (4,100 ) (6,391 ) (7,499 ) Total chargeoffs (5,888 ) (6,674 ) (7,954 ) Recoveries of loans previously charged off: Commercial 462 124 2,359 Commercial real estate 54 204 71 Consumer and other installment 2,715 3,959 3,257 Total recoveries 3,231 4,287 5,687 Net loan losses (2,657 ) (2,387 ) (2,267 ) Balance, end of period $ 11,573 $ 14,780 $ 16,867 Net loan losses as a percentage of average loans (0.35 )% (0.29 )% (0.25 )% Selected financial data: (at period end) Loans $ 726,482 $ 820,300 $ 866,602 Nonaccrual loans 1,474 201 403 Allowance for credit losses as a percentage of loans 1.59 % 1.80 % 1.95 % Nonaccrual loans as a percentage of loans 0.20 % 0.02 % 0.05 % Allowance for credit losses to nonaccrual loans 785.14 % 7353.23 % 4185.36 % The following table summarizes net (chargeoffs) recoveries and the ratio of net (chargeoffs) recoveries to average loans for the periods indicated: For the Year Ended December 31, 2025 2024 2023 As a percentage As a percentage As a percentage Average of Net (chargeoffs) Average of Net (chargeoffs) Average of Net (chargeoffs) Net (chargeoffs) Loan recoveries Net (chargeoffs) Loan recoveries Net (chargeoffs) Loan recoveries Recoveries Balances to Average loans Recoveries Balances to Average loans Recoveries Balances to Average loans ($ in thousands) Commercial $ (1,135 ) $ 113,770 (1.00 )% $ (159 ) $ 128,505 (0.12 )% $ 1,949 $ 149,137 1.31 % Commercial real estate (137 ) 488,758 (0.03 )% 204 493,282 0.04 % 26 492,183 0.01 % Construction - 1,748 - % - 5,064 - % - 4,362 - % Residential real estate - 7,787 - % - 9,197 - % - 12,080 - % Consumer and other installment (1,385 ) 143,668 (0.96 )% (2,432 ) 200,088 (1.22 )% (4,242 ) 254,554 (1.67 )% Total $ (2,657 ) $ 755,731 (0.35 )% $ (2,387 ) $ 836,136 (0.29 )% $ (2,267 ) $ 912,316 (0.25 )% The Company's allowance for credit losses on loans is maintained at a level considered adequate to provide for expected losses based on historical loss rates adjusted for current and expected conditions over a forecast period.
(2) Net interest spread represents the average yield earned on interest-earning assets less the average rate incurred on interest-bearing liabilities. (3) Net interest margin is computed by calculating the difference between interest income and expense, divided by the average balance of interest-earning assets.
(2) Net interest spread represents the average yield earned on interest-earning assets less the average rate incurred on interest-bearing liabilities. (3) Net interest margin is computed by calculating the difference between interest income and expense, divided by the average balance of interest-earning assets.
(2) Net interest spread represents the average yield earned on interest-earning assets less the average rate incurred on interest-bearing liabilities. (3) Net interest margin is computed by calculating the difference between interest income and expense, divided by the average balance of interest-earning assets.
(2) Net interest spread represents the average yield earned on interest-earning assets less the average rate incurred on interest-bearing liabilities. (3) Net interest margin is computed by calculating the difference between interest income and expense, divided by the average balance of interest-earning assets.
However, no assurance can be given the Bank or Company will not experience a period of reduced earnings or a reduction in capital from unanticipated events and circumstances. -45- Capital to Risk-Adjusted Assets The capital ratios for the Company and the Bank under current regulatory capital standards are presented in the tables below, on the dates indicated.
However, no assurance can be given the Bank or Company will not experience a period of reduced earnings or a reduction in capital from unanticipated events and circumstances. Capital to Risk-Adjusted Assets The capital ratios for the Company and the Bank under current regulatory capital standards are presented in the tables below, on the dates indicated.
Net interest and loan fee income (FTE) decreased $29.8 million in 2024 compared with 2023 due to lower average balances of investment debt securities and loans, higher average balances of Bank Term Funding Program borrowings and higher rates on interest-bearing liabilities, partially offset by higher yield on loans and higher average balances of interest-bearing cash.
Net interest and loan fee income (FTE) decreased $29.8 million in 2024 compared with 2023 due to lower average balances of investment securities and loans, higher average balances of Bank Term Funding Program borrowings and higher rates on interest-bearing liabilities, partially offset by higher yield on loans and higher average balances of interest-bearing cash.
The Company’s procedures for evaluating investments in securities are in accordance with guidance issued by the Board of Governors of the Federal Reserve System, “Investing in Securities without Reliance on Nationally Recognized Statistical Rating Agencies” (SR 12-15) and other regulatory guidance. [The remainder of this page intentionally left blank] -31- The following table shows the fair value carrying amount of the Company’s debt securities available for sale as of the dates indicated: At December 31, 2024 2023 2022 (In thousands) Debt securities available for sale: Securities of U.S.
The Company’s procedures for evaluating investments in securities are in accordance with guidance issued by the Board of Governors of the Federal Reserve System, “Investing in Securities without Reliance on Nationally Recognized Statistical Rating Agencies” (SR 12-15) and other regulatory guidance. [The remainder of this page intentionally left blank] -31- The following table shows the fair value carrying amount of the Company’s debt securities available for sale as of the dates indicated: At December 31, 2025 2024 2023 (In thousands) Debt securities available for sale: Securities of U.S.
Distribution of Assets, Liabilities & Shareholders’ Equity and Yields, Rates & Interest Margin For the Year Ended December 31, 2024 Interest Average Income/ Yields/ Balance Expense Rates ($ in thousands) Assets Investment securities: Taxable $ 4,705,641 $ 199,355 4.24 % Tax-exempt (1) 127,383 4,676 3.67 % Total investments (1) 4,833,024 204,031 4.22 % Loans: Taxable 795,943 43,974 5.52 % Tax-exempt (1) 40,193 1,655 4.12 % Total loans (1) 836,136 45,629 5.46 % Total interest-bearing cash 374,806 19,665 5.25 % Total interest-earning assets (1) 6,043,966 269,325 4.43 % Other assets 400,721 Total assets $ 6,444,687 Liabilities and shareholders' equity Noninterest-bearing demand $ 2,445,945 $ - - % Savings and interest-bearing transaction 2,638,139 10,658 0.40 % Time less than $100,000 57,064 187 0.33 % Time $100,000 or more 33,794 96 0.28 % Total interest-bearing deposits 2,728,997 10,941 0.40 % Bank term funding program borrowings 107,364 5,813 5.40 % Securities sold under repurchase agreements 89,381 665 0.74 % Total interest-bearing liabilities 2,925,742 17,419 0.60 % Other liabilities 69,758 Shareholders' equity 1,003,242 Total liabilities and shareholders' equity $ 6,444,687 Net interest spread (1) (2) 3.83 % Net interest and fee income and interest margin (1) (3) $ 251,906 4.14 % (1) Amounts calculated on an FTE basis using the current statutory federal tax rate.
The net interest margin is greater than the net interest spread due to the benefit of noninterest-bearing demand deposits. -25- Distribution of Assets, Liabilities & Shareholders’ Equity and Yields, Rates & Interest Margin For the Year Ended December 31, 2024 Interest Average Income/ Yields/ Balance Expense Rates ($ in thousands) Assets Investment securities: Taxable $ 4,705,641 $ 199,355 4.24 % Tax-exempt (1) 127,383 4,676 3.67 % Total investments (1) 4,833,024 204,031 4.22 % Loans: Taxable 795,943 43,974 5.52 % Tax-exempt (1) 40,193 1,655 4.12 % Total loans (1) 836,136 45,629 5.46 % Total interest-bearing cash 374,806 19,665 5.25 % Total interest-earning assets (1) 6,043,966 269,325 4.43 % Other assets 400,721 Total assets $ 6,444,687 Liabilities and shareholders' equity Noninterest-bearing demand $ 2,445,945 $ - - % Savings and interest-bearing transaction 2,638,139 10,658 0.40 % Time less than $100,000 57,064 187 0.33 % Time $100,000 or more 33,794 96 0.28 % Total interest-bearing deposits 2,728,997 10,941 0.40 % Bank term funding program borrowings 107,364 5,813 5.40 % Securities sold under repurchase agreements 89,381 665 0.74 % Total interest-bearing liabilities 2,925,742 17,419 0.60 % Other liabilities 69,758 Shareholders' equity 1,003,242 Total liabilities and shareholders' equity $ 6,444,687 Net interest spread (1) (2) 3.83 % Net interest and fee income and interest margin (1) (3) $ 251,906 4.14 % (1) Amounts calculated on an FTE basis using the current statutory federal tax rate.
While the Company follows risk management practices related to climate risk, the Company may experience financial losses due to climate risk despite these precautions. -41- Asset/Liability and Market Risk Management Asset/liability management involves the evaluation, monitoring and management of interest rate risk, market risk, liquidity and funding.
While the Company follows risk management practices related to climate risk, the Company may experience financial losses due to climate risk despite these precautions. Asset/Liability and Market Risk Management Asset/liability management involves the evaluation, monitoring and management of interest rate risk, market risk, liquidity and funding.
The fundamental objective of the Company's management of assets and liabilities is to maximize its economic value while maintaining adequate liquidity and a conservative level of interest rate risk. Interest Rate Risk Interest rate risk is a significant market risk affecting the Company.
The fundamental objective of the Company's management of assets and liabilities is to maximize its economic value while maintaining adequate liquidity and a conservative level of interest rate risk. -41- Interest Rate Risk Interest rate risk is a significant market risk affecting the Company.
ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following financial information for the three years ended December 31, 2024 has been derived from the Company’s audited consolidated financial statements. This information should be read in conjunction with those statements, notes and other information included elsewhere herein.
ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following financial information for the three years ended December 31, 2025 has been derived from the Company’s audited consolidated financial statements. This information should be read in conjunction with those statements, notes and other information included elsewhere herein.
Provision for Credit Losses The Company manages credit costs by consistently enforcing conservative underwriting and administration procedures and aggressively pursuing collection efforts with debtors experiencing financial difficulties. The provision for credit losses reflects Management's assessment of credit risk in the loan portfolio and debt securities held to maturity during each of the periods presented.
Provision for Credit Losses The Company manages credit risk by enforcing conservative underwriting and administration procedures and aggressively pursuing collection efforts with debtors experiencing financial difficulties. The provision for credit losses reflects Management's assessment of credit risk in the loan portfolio and debt securities held to maturity portfolio during each of the periods presented.
The following table lists debt securities in the Company’s portfolio by type as of the dates indicated. Debt securities held to maturity are listed at amortized cost before related reserve for expected credit losses of $1 thousand at December 31, 2024 and December 31, 2023. Debt securities available for sale are listed at fair value.
The following table lists debt securities in the Company’s portfolio by type as of the dates indicated. Debt securities held to maturity are listed at amortized cost before related reserve for expected credit losses of $1 thousand at December 31, 2025 and $1 thousand at December 31, 2024. Debt securities available for sale are listed at fair value.
Both simulations are used to measure expected changes in net interest income assuming various levels of change in market interest rates. The Company’s asset and liability position was generally “asset sensitive” at December 31, 2024, based on the interest rate assumptions applied to the simulation model.
Both simulations are used to measure expected changes in net interest income assuming various levels of change in market interest rates. The Company’s asset and liability position was generally “asset sensitive” at December 31, 2025, based on the interest rate assumptions applied to the simulation model.
The extent of the impact on the Company’s results of operations, liquidity, and financial performance, as well as the Company’s ability to execute near- and long-term business strategies and initiatives, will depend on numerous evolving factors and future developments, which are uncertain and cannot be reasonably predicted. -21- The Company presents its net interest margin and net interest income on a fully taxable equivalent (“FTE”) basis using the current statutory federal tax rate.
The extent of the impact on the Company’s results of operations, cash flow, liquidity, and financial performance, as well as the Company’s ability to execute near- and long-term business strategies and initiatives, will depend on numerous evolving factors and future developments, which are highly uncertain and cannot be reasonably predicted. -21- The Company presents its net interest margin and net interest income on a fully taxable equivalent (“FTE”) basis using the current statutory federal tax rate.
These evaluations may cause Management to change the level of funds the Company deploys into investment securities and change the composition of the Company’s investment securities portfolio. At December 31, 2024, substantially all of the Company’s investment securities were investment grade as rated by one or more major rating agencies.
These evaluations may cause Management to change the level of funds the Company deploys into investment securities and change the composition of the Company’s investment securities portfolio. At December 31, 2025, substantially all of the Company’s investment securities were investment grade as rated by one or more major rating agencies.
In recent years, the Bank's deposit base has provided the majority of the Bank's funding requirements. This low-cost source of funds, along with shareholders' equity, provided 96% of funding for average total assets for the year ended December 31, 2024 and 97% for the year ended December 31, 2023.
In recent years, the Bank's deposit base has provided the majority of the Bank's funding requirements. This low-cost source of funds, along with shareholders' equity, provided 97% of funding for average total assets for the year ended December 31, 2025 and 96% for the year ended December 31, 2024.
Debt Securities Available for Sale Maturity Distribution At December 31, 2024 Within one year After one but within five years After five but within ten years CLO and Mortgage- backed Total ($ in thousands) Securities of U.S.
Debt Securities Available for Sale Maturity Distribution At December 31, 2025 Within one year After one but within five years After five but within ten years CLO and Mortgage- backed Total ($ in thousands) Securities of U.S.
At December 31, 2024, no credit loss allowance was assigned to corporate securities held to maturity based on evaluation of each individual issuer’s historical financial performance throughout full business cycles.
At December 31, 2025, no credit loss allowance was assigned to corporate securities held to maturity based on evaluation of each individual issuer’s historical financial performance throughout full business cycles.
Borrowers with real estate loan collateral located in flood zones must carry flood insurance under the loans’ terms. At December 31, 2024, the Company had $5 million in loans to agricultural borrowers; Management continuously monitors these customers’ access to adequate water sources as well as their ability to sustain low crop yields and volatile commodity prices without encountering financial hardship.
Borrowers with real estate loan collateral located in flood zones must carry flood insurance under the loans’ terms. At December 31, 2025, the Company had $16 million in loans to agricultural borrowers; Management continuously monitors these customers’ access to adequate water sources as well as their ability to sustain low crop yields and volatile commodity prices without encountering financial hardship.
It should be read in conjunction with those statements and notes found on pages 51 through 87, as well as with the other information presented throughout this Report. Critical Accounting Policies The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and follow general practices within the banking industry.
It should be read in conjunction with those statements and notes found on pages 50 through 88, as well as with the other information presented throughout this Report. Critical Accounting Policies The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and follow general practices within the banking industry.
Allowance for credit losses related to debt securities held to maturity was $1 thousand related to municipal securities at December 31, 2024 and December 31, 2023, reflecting the expected credit losses on debt securities held to maturity.
Allowance for credit losses related to debt securities held to maturity was $1 thousand related to municipal securities at December 31, 2025 and December 31, 2024, reflecting the expected credit losses on debt securities held to maturity.
Management monitors the Company’s interest rate risk using a purchased simulation model, which is periodically assessed using supervisory guidance issued by the Board of Governors of the Federal Reserve System, SR 11-7 “Guidance on Model Risk Management.” Management measures its exposure to interest rate risk using a dynamic composition simulation and static simulation.
Management monitors the Company’s interest rate risk using a licensed third party simulation model, which is periodically assessed using supervisory guidance issued by the Board of Governors of the Federal Reserve System, SR 11-7 “Guidance on Model Risk Management.” Management measures its exposure to interest rate risk using a dynamic composition simulation and static simulation.
The net interest margin is greater than the net interest spread due to the benefit of noninterest-bearing demand deposits. -25- Distribution of Assets, Liabilities & Shareholders’ Equity and Yields, Rates & Interest Margin For the Year Ended December 31, 2023 Interest Average Income/ Yields/ Balance Expense Rates ($ in thousands) Assets Investment securities: Taxable $ 5,176,278 $ 221,742 4.28 % Tax-exempt (1) 158,433 5,668 3.58 % Total investments (1) 5,334,711 227,410 4.26 % Loans: Taxable 868,255 45,739 5.27 % Tax-exempt (1) 44,061 1,743 3.96 % Total loans (1) 912,316 47,482 5.20 % Total interest-bearing cash 204,794 10,671 5.21 % Total Interest-earning assets (1) 6,451,821 285,563 4.43 % Other assets 419,545 Total assets $ 6,871,366 Liabilities and shareholders' equity Noninterest-bearing demand $ 2,748,544 $ - - % Savings and interest-bearing transaction 2,922,909 3,450 0.12 % Time less than $100,000 67,832 204 0.30 % Time $100,000 or more 48,076 116 0.24 % Total interest-bearing deposits 3,038,817 3,770 0.12 % Short-term borrowed funds 89,298 120 0.13 % Total interest-bearing liabilities 3,128,115 3,890 0.12 % Other liabilities 100,097 Shareholders' equity 894,610 Total liabilities and shareholders' equity $ 6,871,366 Net interest spread (1) (2) 4.31 % Net interest and fee income and interest margin (1) (3) $ 281,673 4.37 % (1) Amounts calculated on an FTE basis using the current statutory federal tax rate.
The net interest margin is greater than the net interest spread due to the benefit of noninterest-bearing demand deposits. [The remainder of this page intentionally left blank] -26- Distribution of Assets, Liabilities & Shareholders’ Equity and Yields, Rates & Interest Margin For the Year Ended December 31, 2023 Interest Average Income/ Yields/ Balance Expense Rates ($ in thousands) Assets Investment securities: Taxable $ 5,176,278 $ 221,742 4.28 % Tax-exempt (1) 158,433 5,668 3.58 % Total investments (1) 5,334,711 227,410 4.26 % Loans: Taxable 868,255 45,739 5.27 % Tax-exempt (1) 44,061 1,743 3.96 % Total loans (1) 912,316 47,482 5.20 % Total interest-bearing cash 204,794 10,671 5.21 % Total Interest-earning assets (1) 6,451,821 285,563 4.43 % Other assets 419,545 Total assets $ 6,871,366 Liabilities and shareholders' equity Noninterest-bearing demand $ 2,748,544 $ - - % Savings and interest-bearing transaction 2,922,909 3,450 0.12 % Time less than $100,000 67,832 204 0.30 % Time $100,000 or more 48,076 116 0.24 % Total interest-bearing deposits 3,038,817 3,770 0.12 % Securities sold under repurchase agreements 89,298 120 0.13 % Total interest-bearing liabilities 3,128,115 3,890 0.12 % Other liabilities 100,097 Shareholders' equity 894,610 Total liabilities and shareholders' equity $ 6,871,366 Net interest spread (1) (2) 4.31 % Net interest and fee income and interest margin (1) (3) $ 281,673 4.37 % (1) Amounts calculated on an FTE basis using the current statutory federal tax rate.
The Company has other earning assets with variable yields such as commercial loans and lines of credit, consumer lines of credit and adjustable rate residential real estate loans, which are included in “other taxable loans” in the following “Summary of Average Balances, Yields/Rates and Interest Differential.” -24- Summary of Average Balances, Yields/Rates and Interest Differential The following tables present information regarding the consolidated average assets, liabilities and shareholders’ equity, the amounts of interest income earned from average interest earning assets and the resulting yields, and the amounts of interest expense incurred on average interest-bearing liabilities and the resulting rates.
The Company has other earning assets with variable yields such as commercial loans and lines of credit, consumer lines of credit and adjustable rate residential real estate loans, which are included in “other taxable loans” in the following “Summary of Average Balances, Yields/Rates and Interest Differential.” [The remainder of this page intentionally left blank] -24- Summary of Average Balances, Yields/Rates and Interest Differential The following tables present information regarding the consolidated average assets, liabilities and shareholders’ equity, the amounts of interest income earned from average interest earning assets and the resulting yields, and the amounts of interest expense incurred on average interest-bearing liabilities and the resulting rates.
At December 31, 2024 At December 31, 2023 Carrying Value As a percent of total investment securities Carrying Value As a percent of total investment securities ($ in thousands) Securities of U.S.
At December 31, 2025 At December 31, 2024 Carrying Value As a percent of total investment securities Carrying Value As a percent of total investment securities ($ in thousands) Securities of U.S.
The Company's ratio of equity to total assets was 14.65% at December 31, 2024 and 12.14% at December 31, 2023. The Company performs capital stress tests on a periodic basis to evaluate the sustainability of its capital. Under the stress testing, the Company assumes various scenarios such as deteriorating economic and operating conditions, and unanticipated asset devaluations.
The Company's ratio of equity to total assets was 15.66% at December 31, 2025 and 14.65% at December 31, 2024. The Company performs capital stress tests on a periodic basis to evaluate the sustainability of its capital. Under the stress testing, the Company assumes various scenarios such as deteriorating economic and operating conditions, and unanticipated asset devaluations.
(2) The efficiency ratio is defined as noninterest expense divided by total revenue (net interest income on an FTE basis and noninterest income). -20- The following discussion addresses information pertaining to the financial condition and results of operations of Westamerica Bancorporation and subsidiaries (the “Company”) that may not be otherwise apparent from a review of the consolidated financial statements and related footnotes.
(2) The efficiency ratio is defined as noninterest expense divided by total revenue (net interest income on an FTE basis and noninterest income). [The remainder of this page intentionally left blank] -20- The following discussion addresses information pertaining to the financial condition and results of operations of Westamerica Bancorporation and subsidiaries (the “Company”) that may not be otherwise apparent from a review of the consolidated financial statements and related footnotes.
There were no loans with a remaining maturity of over fifteen years as of December 31, 2024.
There were no loans with a remaining maturity of over fifteen years as of December 31, 2025.
During the year ended December 31, 2024, the Company’s average borrowings from the Federal Reserve Bank and other correspondent banks were $107,364 thousand and $-0- thousand, respectively, and at December 31, 2024, the Company had no borrowings from the Federal Reserve Bank or other correspondent banks.
During the year ended December 31, 2025, the Company’s average borrowings from the Federal Reserve Bank and other correspondent banks were $-0- thousand, respectively, and at December 31, 2025, the Company had no borrowings from the Federal Reserve Bank or other correspondent banks.
Allowance for Credit Losses The following table summarizes allowance for credit losses at the dates indicated: At December 31, 2024 2023 (In thousands) Allowance for credit losses on loans $ 14,780 $ 16,867 Allowance for credit losses on held to maturity debt securities 1 1 Total allowance for credit losses $ 14,781 $ 16,868 Allowance for unfunded credit commitments $ 201 $ 201 Allowance for Credit Losses on Debt Securities Held to Maturity Management segmented debt securities held to maturity, selected methods to estimate losses for each segment, and measured a loss estimate.
Allowance for Credit Losses The following table summarizes allowance for credit losses at the dates indicated: At December 31, At December 31, 2025 2024 (In thousands) Allowance for credit losses on loans $ 11,573 $ 14,780 Allowance for credit losses on held to maturity debt securities 1 1 Total allowance for credit losses $ 11,574 $ 14,781 Allowance for unfunded credit commitments $ 201 $ 201 Allowance for Credit Losses on Debt Securities Held to Maturity Management segmented debt securities held to maturity, selected methods to estimate losses for each segment, and measured a loss estimate.
In 2024, the Company provided $300 thousand for credit losses, which was recorded in the first quarter, based on the results of the CECL model and Management’s estimate of credit losses over the remaining life of its loans and debt securities held to maturity.
During 2024, the Company provided $300 thousand for credit losses, which was recorded in the first quarter 2024 based on the results of the CECL model and Management’s estimate of credit losses over the remaining life of its loans.
Market Risk - Equity Markets Equity price risk can affect the Company. Preferred or common stock holdings, as permitted by banking regulations, can fluctuate in value. Changes in value of preferred or common stock holdings are recognized in the Company's income statement. Fluctuations in the Company's common stock price can impact the Company's financial results in several ways.
Preferred or common stock holdings, as permitted by banking regulations, can fluctuate in value. Changes in value of preferred or common stock holdings are recognized in the Company's income statement. Fluctuations in the Company's common stock price can impact the Company's financial results in several ways.
Noninterest income for 2024 remained at the same level compared with 2023 primarily due to a $1.4 million gain on sale of other assets, offset by lower income from merchant processing services, ATM processing fees and debit card fees.
Noninterest income for 2024 was relatively unchanged compared with 2023 primarily due to a $1.4 million gain on sale of other assets, offset by lower income from merchant processing services, ATM processing fees and debit card fees.
The net interest margin (FTE) was 4.14% in 2024, 4.37% in 2023 and 3.17% in 2022. The yield on earning assets (FTE) was 4.43% in 2024, 4.43% in 2023 and 3.20% in 2022. The Company’s funding costs were 0.29% in 2024, compared with 0.06% in 2023 and 0.03% in 2022.
The net interest margin (FTE) was 3.82% in 2025, 4.14% in 2024, and 4.37% in 2023. The yield on earning assets (FTE) was 4.06% in 2025, 4.43% in 2024, and 4.43% in 2023. The Company’s funding costs were 0.24% in 2025, compared with 0.29% in 2024, and 0.06% in 2023.
See Note 1 to the consolidated financial statements for additional information. [The remainder of this page intentionally left blank] -40- The following table presents the allocation of the allowance for credit losses as of December 31 for the periods indicated.
See Note 1 “Business and Accounting Policies” to consolidated financial statements for additional information. [The remainder of this page intentionally left blank] -40- The following table presents the allocation of the allowance for credit losses for the periods indicated.
In the ordinary course of business, the Company pledges debt securities as collateral for borrowing from the Federal Reserve Bank; at December 31, 2024, the Company had pledged $766,606 thousand in debt securities at the Federal Reserve Bank.
In the ordinary course of business, the Company pledges debt securities as collateral for borrowing from the Federal Reserve Bank; at December 31, 2025, the Company had pledged $741,923 thousand in debt securities at the Federal Reserve Bank.
At December 31, 2024, estimated federally uninsured total deposits and time deposits were $2,491 million and $4 million, respectively.
At December 31, 2025, estimated federally uninsured total deposits and time deposits were $2,457 million and $4 million, respectively.
In the ordinary course of business, the Company pledges debt securities as collateral for certain depository customers; at December 31, 2024, the Company had pledged $726,784 thousand in debt securities for depository customers.
In the ordinary course of business, the Company pledges debt securities as collateral for certain depository customers; at December 31, 2025, the Company had pledged $710,092 thousand in debt securities for depository customers.
Noninterest bearing deposits represented 47% of average deposits in 2024 and 2023, respectively. Average balances of time deposits in 2024 declined $25 million from 2023. Average balances of checking and saving deposits accounted for 98.2% of average total deposits in 2024 compared with 98.0% in 2023.
Noninterest bearing deposits represented 46% of average deposits in 2025 and 47% in 2024, respectively. Average balances of time deposits in 2025 declined $16 million from 2024. Average balances of checking and saving deposits accounted for 98.5% of average total deposits in 2025 compared with 98.2% in 2024.
Total deposits were $5,012 million at December 31, 2024 and $5,474 million at December 31, 2023. Total time deposits were $82 million at December 31, 2024 and $97 million at December 31, 2023. The Company has no foreign time deposits. The standard FDIC deposit insurance amount is $250,000 per depositor, for each account ownership category.
Total deposits were $4,840 million at December 31, 2025 and $5,012 million at December 31, 2024. Total time deposits were $67 million at December 31, 2025 and $82 million at December 31, 2024. The Company has no foreign time deposits. FDIC deposit insurance is $250,000 per depositor, for each account ownership category.
For Common Equity Tier I Capital, Tier 1 Capital and Total Capital, the minimum percentage required for regulatory capital adequacy purposes include a 2.5% “capital conservation buffer.” To Be Well-capitalized Required for Under Prompt At December 31, 2024 Capital Adequacy Corrective Action Company Bank Purposes Regulations (Bank) Common Equity Tier I Capital 22.46 % 15.33 % 7.00 % 6.50 % Tier I Capital 22.46 % 15.33 % 8.50 % 8.00 % Total Capital 22.82 % 15.84 % 10.50 % 10.00 % Leverage Ratio 15.30 % 10.41 % 4.00 % 5.00 % To Be Well-capitalized Required for Under Prompt At December 31, 2023 Capital Adequacy Corrective Action Company Bank Purposes Regulations (Bank) Common Equity Tier I Capital 18.76 % 14.46 % 7.00 % 6.50 % Tier I Capital 18.76 % 14.46 % 8.50 % 8.00 % Total Capital 19.15 % 14.98 % 10.50 % 10.00 % Leverage Ratio 12.86 % 9.88 % 4.00 % 5.00 % The Company and the Bank routinely project capital levels by analyzing forecasted earnings, credit quality, shareholder dividends, asset volumes, share repurchase activity, stock option exercise proceeds, and other factors.
For Common Equity Tier I Capital, Tier 1 Capital and Total Capital, the minimum percentage required for regulatory capital adequacy purposes include a 2.5% “capital conservation buffer.” To Be Well-capitalized Required for Under Prompt At December 31, 2025 Capital Adequacy Corrective Action Company Bank Purposes Regulations (Bank) Common Equity Tier I Capital 22.75 % 15.14 % 7.00 % 6.50 % Tier I Capital 22.75 % 15.14 % 8.50 % 8.00 % Total Capital 23.05 % 15.59 % 10.50 % 10.00 % Leverage Ratio 15.22 % 10.09 % 4.00 % 5.00 % [The remainder of this page intentionally left blank] -45- To Be Well-capitalized Required for Under Prompt At December 31, 2024 Capital Adequacy Corrective Action Company Bank Purposes Regulations (Bank) Common Equity Tier I Capital 22.46 % 15.33 % 7.00 % 6.50 % Tier I Capital 22.46 % 15.33 % 8.50 % 8.00 % Total Capital 22.82 % 15.84 % 10.50 % 10.00 % Leverage Ratio 15.30 % 10.41 % 4.00 % 5.00 % The Company and the Bank routinely project capital levels by analyzing forecasted earnings, credit quality, shareholder dividends, asset volumes, share repurchase activity, stock option exercise proceeds, and other factors.
The Bank’s dividends paid to the Parent Company, proceeds from the exercise of stock options, and Parent Company cash balances provided adequate cash for the Parent Company to pay shareholder dividends of $47 million in the year ended December 31, 2024 and $46 million in the year ended December 31, 2023 and retire common stock in the amounts of $210 thousand in the year ended December 31, 2024 and $14 million in the year ended December 31, 2023.
The Bank’s dividends paid to the Parent Company and Parent Company cash balances provided adequate cash for the Parent Company to pay shareholder dividends of $47 million for the year ended December 31, 2025 and $47 million in the year ended December 31, 2024 and retire common stock in the amounts of $104 million in the year ended December 31, 2025 and $210 thousand in the year ended December 31, 2024.
The Company paid common dividends totaling $47 million in the year ended December 31, 2024 and $46 million in the year ended December 31, 2023, which represent dividends per common share of $1.76 and $1.72, respectively. The Company's earnings have historically exceeded dividends paid to shareholders.
The Company paid cash dividends on its common stock totaling $47 million in the year ended December 31, 2025 and $47 million in the year ended December 31, 2024, which represent dividends per common share of $1.82 and $1.76, respectively. The Company's earnings have historically exceeded dividends paid to shareholders.
The Company had no marketable equity securities at December 31, 2024 and December 31, 2023. Management manages the investment securities portfolio in response to anticipated changes in interest rates, and changes in deposit and loan volumes. The carrying value of the Company’s investment securities portfolio was $4.2 billion at December 31, 2024 and $4.9 billion at December 31, 2023.
Management manages the investment securities portfolio in response to anticipated changes in interest rates, and changes in deposit and loan volumes. The carrying value of the Company’s investment securities portfolio was $4.3 billion at December 31, 2025 and $4.2 billion at December 31, 2024.
The Company retired 4 thousand shares valued at $210 thousand in the year ended December 31, 2024 and 274 thousand shares valued at $14 million in the year ended December 31, 2023. The Company's primary capital resource is shareholders' equity, which was $890 million at December 31, 2024 compared with $773 million at December 31, 2023.
The Company retired approximately 2 million shares valued at $104 million in the year ended December 31, 2025 and 4 thousand shares valued at $210 thousand in the year ended December 31, 2024. The Company's primary capital resource is shareholders' equity, which was $934 million at December 31, 2025 compared with $890 million at December 31, 2024.
At December 31, 2023, Management’s most recent measurements of estimated changes in net interest income were: Dynamic simulation (balance sheet composition changes): Assumed change in interest rates over 1 year -2.00% -1.00% 0.00% +1.00% +2.00% First year change in net interest income -7.29% -1.76% -0.40% +2.55% +4.87% Static simulation (balance sheet composition unchanged): Assumed immediate change in interest rates -2.00% -1.00% 0.00% +1.00% +2.00% First year change in net interest income -14.60% -7.30% 0.00% +6.60% +13.30% Simulation estimates depend on, and will change with, the size and mix of the actual and projected composition of financial instruments at the time of each simulation.
At December 31, 2025, Management’s most recent measurements of estimated changes in net interest income were: Dynamic Simulation (1) Static Simulation (2) Change in Interest Rates First Year Change in Net Interest Income + 2.0% + 4.1% + 10.7% + 1.0% + 2.1% + 5.3% 0.0% - 2.2% 0.0% - 1.0% - 3.1% - 6.1% - 2.0% - 6.6% - 12.2% (1) Balance sheet composition changes; Assumed change in interest rates over 1 year (2) Balance sheet composition unchanged; Assumed immediate change in interest rates Simulation estimates depend on, and will change with, the size and mix of the actual and projected composition of financial instruments at the time of each simulation.
At December 31, 2024, the Company had $601,494 thousand in cash balances. During the twelve months ending December 31, 2025, the Company expects to receive $309,000 thousand in principal payments from its debt securities.
At December 31, 2025, the Company had $567,801 thousand in cash balances. During the twelve months ending December 31, 2026, the Company expects to receive $397,000 thousand in principal payments from its debt securities.
If additional operational liquidity is required, the Company can pledge debt securities as collateral for borrowing purposes; at December 31, 2024, the Company’s debt securities which qualify as collateral for borrowing totaled $3,534,099 thousand.
If additional operational liquidity is required, the Company can pledge debt securities as collateral for borrowing purposes; at December 31, 2025, the Company’s debt securities which qualify as collateral for borrowing totaled $4,013,502 thousand.
Payment of dividends to the Parent Company by the Bank is limited under California and Federal laws. The Company believes these regulatory dividend restrictions will not impact Parent Company's ability to meet its ongoing cash obligations. The Parent Company’s cash balance was $263 million at December 31, 2024 and $155 million at December 31, 2023.
Payment of dividends to the Parent Company by the Bank is limited under California and Federal laws. The Company believes these regulatory dividend restrictions will not impact Parent Company's ability to meet its ongoing cash obligations.
Treasury securities 4,955 - - Obligations of states and political subdivisions 62,186 71,283 82,004 Corporate securities 1,835,937 1,909,548 2,099,955 Collateralized loan obligations 982,589 1,484,597 1,572,883 Total debt securities available for sale $ 3,395,810 $ 3,999,801 $ 4,331,743 The following table sets forth the relative maturities and contractual yields of the Company’s debt securities available for sale (stated at fair value) at December 31, 2024.
Treasury securities - 4,955 - Obligations of states and political subdivisions 45,722 62,186 71,283 Corporate securities 1,804,080 1,835,937 1,909,548 Collateralized loan obligations 424,614 982,589 1,484,597 Total debt securities available for sale $ 3,468,734 $ 3,395,810 $ 3,999,801 The following table sets forth the relative maturities and contractual yields of the Company’s debt securities available for sale (stated at fair value) at December 31, 2025.
Financial Overview The Company reported net income of $138.6 million or $5.20 diluted earnings per common share (“EPS”) in 2024 compared with net income of $161.8 million or $6.06 EPS in 2023 and net income of $122.0 million or $4.54 EPS in 2022. 2024 results included a $202 thousand life insurance gain and a $1.4 million gain on sale of other assets, equivalent to combined EPS of $0.04. 2023 results included a $1.2 million reversal of provision for credit losses, net of a $400 thousand provision for credit losses and a $279 thousand life insurance gain, equivalent to combined EPS of $0.04. 2022 results included a $1.2 million reconciling payment from a payments network and a $930 thousand life insurance gain equivalent to combined EPS of $0.07.
Financial Overview The Company reported net income of $116.2 million or $4.52 diluted earnings per common share (“EPS”) in 2025 compared with net income of $138.6 million or $5.20 EPS in 2024 and net income of $161.8 million or $6.06 EPS in 2023. 2025 results included a $550 thousand reversal of provision for credit losses and a $208 thousand bank owned life insurance gain, which increased EPS $0.02. 2024 results included a $202 thousand bank owned life insurance gain and a $1.4 million gain on sale of other assets, equivalent to combined EPS of $0.04. 2023 results included a $1.2 million reversal of provision for credit losses, net of a $400 thousand provision for credit losses and a $279 thousand bank owned life insurance gain, equivalent to combined EPS of $0.04.
For loans secured by real estate, the Bank requires title insurance to insure the status of its lien and each borrower is obligated to insure the real estate collateral, naming the Company as loss payee, in an amount sufficient to repay the principal amount outstanding in the event of a property casualty loss.
The Company does not offer riskier mortgage products, such as non-amortizing “interest-only” mortgages and “negative amortization” mortgages. -35- For loans secured by real estate, the Bank requires title insurance to insure the status of its lien and each borrower is obligated to insure the real estate collateral, naming the Company as loss payee, in an amount sufficient to repay the principal amount outstanding in the event of a property casualty loss.
WESTAMERICA BANCORPORATION FINANCIAL SUMMARY For the Years Ended December 31, 2024 2023 2022 (In thousands, except per share data and ratios) Interest and loan fee income $ 268,014 $ 284,013 $ 221,756 Interest expense 17,419 3,890 1,925 Net interest and loan fee income 250,595 280,123 219,831 Provision (Reversal of provision) for credit losses 300 (1,150 ) - Noninterest income: Life insurance gains 202 279 930 Securities losses - (125 ) - Other noninterest income 42,953 43,368 44,191 Total noninterest income 43,155 43,522 45,121 Noninterest expense 104,391 103,216 99,361 Income before income taxes 189,059 221,579 165,591 Income tax provision 50,423 59,811 43,557 Net income $ 138,636 $ 161,768 $ 122,034 Average common shares outstanding 26,685 26,703 26,895 Average diluted common shares outstanding 26,686 26,706 26,907 Common shares outstanding at December 31, 26,708 26,671 26,913 Per common share: Basic earnings $ 5.20 $ 6.06 $ 4.54 Diluted earnings 5.20 6.06 4.54 Book value at December 31, 33.32 28.98 22.37 Financial ratios: Return on assets 2.15 % 2.35 % 1.65 % Return on common equity 13.82 % 18.08 % 15.21 % Net interest margin (FTE) (1) 4.14 % 4.37 % 3.17 % Net loan losses to average loans (0.29 )% (0.25 )% (0.32 )% Efficiency ratio (2) 35.4 % 31.7 % 37.2 % Equity to assets 14.65 % 12.14 % 8.66 % Period end balances: Assets $ 6,076,274 $ 6,364,592 $ 6,950,317 Loans 820,300 866,602 958,488 Allowance for credit losses 14,780 16,867 20,284 Investment securities 4,240,445 4,878,198 5,247,657 Deposits 5,011,850 5,474,267 6,225,290 Identifiable intangible assets and goodwill 121,798 122,020 122,256 Short-term borrowed funds 120,322 58,162 57,792 Shareholders' equity 889,957 772,894 602,110 Capital ratios at period end: Total risk based capital 22.82 % 19.15 % 15.64 % Tangible equity to tangible assets 12.90 % 10.43 % 7.03 % Dividends paid per common share $ 1.76 $ 1.72 $ 1.68 Common dividend payout ratio 34 % 28 % 37 % (1) Yields on securities and certain loans have been adjusted upward to a "fully taxable equivalent" ("FTE") basis in order to reflect the effect of income which is exempt from federal income taxation at the current statutory tax rate.
WESTAMERICA BANCORPORATION FINANCIAL SUMMARY For the Years Ended December 31, 2025 2024 2023 (In thousands, except per share data and ratios) Interest and loan fee income $ 230,980 $ 268,014 $ 284,013 Interest expense 13,712 17,419 3,890 Net interest and loan fee income 217,268 250,595 280,123 (Reversal of) provision for credit losses (550 ) 300 (1,150 ) Noninterest income: Bank owned life insurance gains 208 202 279 Losses on sale of securities - - (125 ) Other noninterest income 40,582 42,953 43,368 Total noninterest income 40,790 43,155 43,522 Noninterest expense 101,922 104,391 103,216 Income before income taxes 156,686 189,059 221,579 Income tax provision 40,513 50,423 59,811 Net income $ 116,173 $ 138,636 $ 161,768 Average common shares outstanding 25,674 26,685 26,703 Average diluted common shares outstanding 25,674 26,686 26,706 Common shares outstanding at December 31, 24,623 26,708 26,671 Per common share: Basic earnings $ 4.52 $ 5.20 $ 6.06 Diluted earnings 4.52 5.20 6.06 Book value at December 31, 37.91 33.32 28.98 Financial ratios: Return on assets 1.91 % 2.15 % 2.35 % Return on common equity 11.23 % 13.82 % 18.08 % Net interest margin (FTE) (1) 3.82 % 4.14 % 4.37 % Net loan losses to average loans (0.35 )% (0.29 )% (0.25 )% Efficiency ratio (2) 39.3 % 35.4 % 31.7 % Equity to assets 15.66 % 14.65 % 12.14 % Period end balances: Assets $ 5,960,180 $ 6,076,274 $ 6,364,592 Loans 726,482 820,300 866,602 Allowance for credit losses 11,573 14,780 16,867 Debt securities 4,288,309 4,240,445 4,878,198 Deposits 4,840,019 5,011,850 5,474,267 Identifiable intangible assets and goodwill 121,673 121,798 122,020 Short-term borrowed funds 137,298 120,322 58,162 Shareholders' equity 933,509 889,957 772,894 Capital ratios at period end: Total risk based capital 23.05 % 22.82 % 19.15 % Tangible equity to tangible assets 13.90 % 12.90 % 10.43 % Dividends paid per common share $ 1.82 $ 1.76 $ 1.72 Common dividend payout ratio 40 % 34 % 28 % (1) Yields on securities and certain loans have been adjusted upward to a "fully taxable equivalent" ("FTE") basis in order tor eflect the effect of income which is exempt from federal income taxation at the current statutory tax rate.
Time Deposits Maturity Distribution At December 31, 2024 (In thousands) 2025 $ 65,470 2026 7,800 2027 3,639 2028 2,603 2029 2,710 Thereafter 16 Total $ 82,238 Short-term Borrowings The following table sets forth the short-term borrowings of the Company: Short-Term Borrowings Distribution At December 31, 2024 2023 2022 (In thousands) Securities sold under agreements to repurchase the securities $ 120,322 $ 58,162 $ 57,792 Total short-term borrowings $ 120,322 $ 58,162 $ 57,792 Further detail of federal funds purchased and other borrowed funds is as follows: For the Years Ended December 31, 2024 2023 2022 ($ in thousands) Federal funds purchased balances and rates paid on outstanding amount: Average balance for the year $ - $ - $ 1 Maximum month-end balance during the year - - - Average interest rate for the year - % - % 4.68 % Average interest rate at period end - % - % - % Securities sold under agreements to repurchase the securities balances and rates paid on outstanding amount: Average balance for the year $ 89,381 $ 89,298 $ 109,282 Maximum month-end balance during the year 132,487 138,005 257,560 Average interest rate for the year 0.74 % 0.13 % 0.07 % Average interest rate at period end 0.62 % 0.31 % 0.06 % Bank Term Funding Program borrowings balances and rates paid on outstanding amount: Average balance for the year $ 107,364 $ - $ - Maximum month-end balance during the year 200,000 - - Average interest rate for the year 5.40 % - % - % Average interest rate at period end - % - % - % -47- Financial Ratios The following table shows key financial ratios for the periods indicated: At and For the Years Ended December 31, 2024 2023 2022 Return on average total assets 2.15 % 2.35 % 1.65 % Return on average common shareholders' equity 13.82 % 18.08 % 15.21 % Average shareholders' equity as a percentage of: Average total assets 15.57 % 13.02 % 10.83 % Average total loans 119.99 % 98.06 % 80.41 % Average total deposits 19.39 % 15.46 % 12.51 % Common dividend payout ratio 34 % 28 % 37 % [The remainder of this page intentionally left blank] -48-
The Company has no foreign time deposits. [The remainder of this page intentionally left blank] -46- Time Deposits Maturity Distribution At December 31, 2025 (In thousands) 2026 $ 52,526 2027 5,865 2028 4,045 2029 2,486 2030 2,080 Thereafter 19 Total $ 67,021 Short-term Borrowings The following table sets forth the short-term borrowings of the Company: Short-Term Borrowings Distribution At December 31, 2025 2024 2023 (In thousands) Securities sold under agreements to repurchase the securities $ 137,298 $ 120,322 $ 58,162 Total short-term borrowings $ 137,298 $ 120,322 $ 58,162 Further detail of other borrowed funds is as follows: For the Years Ended December 31, 2025 2024 2023 ($ in thousands) Securities sold under agreements to repurchase the securities balances and rates paid on outstanding amount: Average balance for the year $ 112,958 $ 89,381 $ 89,298 Maximum month-end balance during the year 137,298 132,487 138,005 Average interest rate for the year 0.62 % 0.74 % 0.13 % Average interest rate at period end 0.61 % 0.62 % 0.31 % Bank Term Funding Program borrowings balances and rates paid on outstanding amount: Average balance for the year $ - $ 107,364 $ - Maximum month-end balance during the year - 200,000 - Average interest rate for the year - % 5.40 % - % Average interest rate at period end - % - % - % Financial Ratios The following table shows key financial ratios for the periods indicated: At and For the Years Ended December 31, 2025 2024 2023 Return on average total assets 1.91 % 2.15 % 2.35 % Return on average common shareholders' equity 11.23 % 13.82 % 18.08 % Average shareholders' equity as a percentage of: Average total assets 17.03 % 15.57 % 13.02 % Average total loans 136.90 % 119.99 % 98.06 % Average total deposits 21.28 % 19.39 % 15.46 % Common dividend payout ratio 40 % 34 % 28 % -47-
Treasury securities 4,955 - % - - % Obligations of states and political subdivisions 113,447 3 % 142,465 3 % Corporate securities 2,571,384 61 % 2,638,198 54 % Collateralized loan obligations 982,589 23 % 1,484,597 30 % Total $ 4,240,445 100 % $ 4,878,198 100 % Debt securities available for sale $ 3,395,810 $ 3,999,801 Debt securities held to maturity 844,635 878,397 Total $ 4,240,445 $ 4,878,198 Management continually evaluates the Company’s investment securities portfolio in response to established asset/liability management objectives, changing market conditions that could affect profitability, liquidity, and the level of interest rate risk to which the Company is exposed.
Treasury securities - - % 4,955 - % Obligations of states and political subdivisions 79,319 2 % 113,447 3 % Corporate securities 2,546,324 60 % 2,571,384 61 % Collateralized loan obligations 424,614 10 % 982,589 23 % Total $ 4,288,309 100 % $ 4,240,445 100 % Debt securities available for sale $ 3,468,734 $ 3,395,810 Debt securities held to maturity 819,575 844,635 Total $ 4,288,309 $ 4,240,445 Management continually evaluates the Company’s investment securities portfolio in response to established asset/liability management objectives, changing market conditions that could affect profitability, liquidity, and the level of interest rate risk to which the Company is exposed.
Total deposits declined $462,417 thousand from December 31, 2023 to December 31, 2024 due to competitive financial product pricing. -43- The following table shows the time remaining to maturity of the Company’s estimated amounts of uninsured time deposits with a balance greater than $250,000 per depositor per category: At December 31, 2024 (In thousands) Three months or less $ 1,850 Over three through six months 453 Over six through twelve months 1,898 Over twelve months 84 Total $ 4,285 Liquidity is further provided by assets such as balances held at the Federal Reserve Bank, and principal and interest payments from debt securities and loans.
The following table shows the time remaining to maturity of the Company’s estimated amounts of uninsured time deposits with a balance greater than $250,000 per depositor per category: At December 31, 2025 (In thousands) Three months or less $ 1,466 Over three through six months 279 Over six through twelve months 1,901 Over twelve months 72 Total $ 3,718 Liquidity is further provided by assets such as balances held at the Federal Reserve Bank, and principal and interest payments from debt securities and loans.
For further information regarding credit risk, net credit losses and the allowance for credit losses, see the “Loan Portfolio Credit Risk” and “Allowance for Credit Losses” sections of this Report. [The remainder of this page intentionally left blank] -29- Noninterest Income Components of Noninterest Income For the Years Ended December 31, 2024 2023 2022 (In thousands) Service charges on deposit accounts $ 14,025 $ 14,169 $ 14,490 Merchant processing services 10,449 11,280 11,623 Debit card fees 6,853 7,185 7,879 Trust fees 3,318 3,122 3,216 ATM processing fees 2,170 2,618 2,160 Other service fees 1,770 1,765 1,808 Life insurance gains 202 279 930 Securities losses - (125 ) - Other noninterest income 4,368 3,229 3,015 Total Noninterest Income $ 43,155 $ 43,522 $ 45,121 Noninterest income in 2024 remained at the same level compared with 2023 primarily due to a $1.4 million gain on sale of other assets, offset by lower income from merchant processing services, ATM processing fees and debit card fees.
For further information regarding credit risk, net credit losses, and the allowance for credit losses, see the “Loan Portfolio Credit Risk” and “Allowance for Credit Losses” sections of this Report. [The remainder of this page intentionally left blank] -29- Noninterest Income Components of Noninterest Income For the Years Ended December 31, 2025 2024 2023 (In thousands) Service charges on deposit accounts $ 13,336 $ 14,025 $ 14,169 Merchant processing services 10,970 10,449 11,280 Debit card fees 6,346 6,853 7,185 Trust fees 3,584 3,318 3,122 ATM processing fees 1,912 2,170 2,618 Other service fees 1,753 1,770 1,765 Bank owned Life insurance gains 208 202 279 Losses on sale of securities - - (125 ) Unrealized losses on equity securities (60 ) - - Other noninterest income 2,741 4,368 3,229 Total Noninterest Income $ 40,790 $ 43,155 $ 43,522 Noninterest income in 2025 decreased $2.4 million compared with 2024 primarily because 2024 results included a $1.4 million gain on sale of other assets.
The additional disclosures did not affect the financial results upon adoption. -22- Net Income Following is a summary of the components of net income for the periods indicated: For the Years Ended December 31, 2024 2023 2022 ($ in thousands, except per share data) Net interest and loan fee income $ 250,595 $ 280,123 $ 219,831 FTE adjustment 1,311 1,550 1,944 Net interest and loan fee income (FTE) 251,906 281,673 221,775 (Provision) reversal of provision for credit losses (300 ) 1,150 - Noninterest income 43,155 43,522 45,121 Noninterest expense (104,391 ) (103,216 ) (99,361 ) Income before income taxes (FTE) 190,370 223,129 167,535 Income taxes (FTE) (51,734 ) (61,361 ) (45,501 ) Net income $ 138,636 $ 161,768 $ 122,034 Net income per average fully-diluted common share $ 5.20 $ 6.06 $ 4.54 Net income as a percentage of average shareholders' equity 13.82 % 18.08 % 15.21 % Net income as a percentage of average total assets 2.15 % 2.35 % 1.65 % Net income for 2024 decreased $23.1 million compared with 2023 primarily due to decreased net interest and loan fee income (FTE), partially offset by lower tax provision (FTE).
The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. -22- Net Income Following is a summary of the components of net income for the periods indicated: For the Years Ended December 31, 2025 2024 2023 ($ in thousands, except per share data) Net interest and loan fee income $ 217,268 $ 250,595 $ 280,123 FTE adjustment 1,079 1,311 1,550 Net interest and loan fee income (FTE) 218,347 251,906 281,673 (Provision) reversal of provision for credit losses 550 (300 ) 1,150 Noninterest income 40,790 43,155 43,522 Noninterest expense (101,922 ) (104,391 ) (103,216 ) Income before income taxes (FTE) 157,765 190,370 223,129 Income taxes (FTE) (41,592 ) (51,734 ) (61,361 ) Net income $ 116,173 $ 138,636 $ 161,768 Net income per average fully-diluted common share $ 4.52 $ 5.20 $ 6.06 Net income as a percentage of average shareholders' equity 11.23 % 13.82 % 18.08 % Net income as a percentage of average total assets 1.91 % 2.15 % 2.35 % Net income for 2025 decreased $22.5 million compared with 2024 primarily due to decreased net interest and loan fee income (FTE) and lower noninterest income, partially offset by a reversal of provision for credit losses, lower noninterest expense and lower tax provision (FTE).
Noninterest Expense Components of Noninterest Expense For the Years Ended December 31, 2024 2023 2022 (In thousands) Salaries and related benefits $ 50,292 $ 47,871 $ 46,125 Occupancy and equipment 20,673 20,520 19,884 Outsourced data processing services 10,271 9,846 9,684 Limited partnership operating losses 5,185 5,754 5,724 Courier service 2,709 2,652 2,614 Professional fees 1,470 1,751 2,628 Other noninterest expense 13,791 14,822 12,702 Total Noninterest Expense $ 104,391 $ 103,216 $ 99,361 Noninterest expense in 2024 increased $1.2 million compared with 2023.
Noninterest Expense Components of Noninterest Expense For the Years Ended December 31, 2025 2024 2023 (In thousands) Salaries and related benefits $ 48,687 $ 50,292 $ 47,871 Occupancy and equipment 20,871 20,673 20,520 Outsourced data processing services 10,829 10,271 9,846 Limited partnership operating losses 3,636 5,185 5,754 Courier service 2,956 2,709 2,652 Professional fees 1,964 1,470 1,751 Other noninterest expense 12,979 13,791 14,822 Total Noninterest Expense $ 101,922 $ 104,391 $ 103,216 Noninterest expense in 2025 decreased $2.5 million compared with 2024 primarily due to decreases in salaries and benefits and operating losses from limited partnership investments.
The interest-bearing cash yield changes by the amount of change in the overnight federal funds rate on the effective date declared by the FOMC. The average balance and yields of interest-bearing cash for 2023 and 2022 was $205 million yielding 5.21% and $691 million yielding 1.13%, respectively.
The interest-bearing cash yield changes by the amount of change in the overnight federal funds rate on the effective date declared by the FOMC. The average balances and yields of interest-bearing cash for 2025, 2024 and 2023 were $641 million yielding 4.34%, $375 million yielding 5.25%, and $205 million yielding 5.21%, respectively.
The following table summarizes the Company’s average daily amount of deposits and the rates paid for the periods indicated: Deposit Distribution and Average Rates Paid For the Years Ended December 31, 2024 2023 2022 Average Balance Percentage of Total Deposits Rate Average Balance Percentage of Total Deposits Rate Average Balance Percentage of Total Deposits Rate ($ In thousands) Noninterest-bearing demand $ 2,445,945 47.3 % - % $ 2,748,544 47.5 % - % $ 3,018,350 47.0 % - % Interest bearing: Transaction 977,912 18.9 % 0.03 % 1,156,684 20.0 % 0.04 % 1,289,956 20.1 % 0.03 % Savings 1,660,227 32.1 % 0.63 % 1,766,225 30.5 % 0.17 % 1,967,902 30.7 % 0.06 % Time less than $100 thousand 57,064 1.1 % 0.17 % 67,832 1.2 % 0.30 % 77,007 1.2 % 0.23 % Time $100 thousand or more 33,794 0.6 % 0.55 % 48,076 0.8 % 0.24 % 62,411 1.0 % 0.25 % Total (1) $ 5,174,942 100.0 % 0.40 % $ 5,787,361 100.0 % 0.12 % $ 6,415,626 100.0 % 0.05 % (1) The rates for total deposits were calculated using the average balances of interest-bearing deposits. -46- The Company’s strategy includes building the value of its deposit base by building balances of lower-costing deposits and avoiding reliance on higher-costing time deposits.
The following table summarizes the Company’s average daily amount of deposits and the rates paid for the periods indicated: Deposit Distribution and Average Rates Paid For the Years Ended December 31, 2025 2024 2023 Average Balance Percentage of Total Deposits Rate Average Balance Percentage of Total Deposits Rate Average Balance Percentage of Total Deposits Rate ($ In thousands) Noninterest-bearing demand $ 2,243,836 46.2 % - % $ 2,445,945 47.3 % - % $ 2,748,544 47.5 % - % Interest bearing: Transaction 908,290 18.7 % 0.02 % 977,912 18.9 % 0.03 % 1,156,684 20.0 % 0.04 % Savings 1,633,610 33.6 % 0.77 % 1,660,227 32.1 % 0.63 % 1,766,225 30.5 % 0.17 % Time less than $100 thousand 48,307 1.0 % 0.30 % 57,064 1.1 % 0.33 % 67,832 1.2 % 0.30 % Time $100 thousand or more 26,699 0.5 % 0.21 % 33,794 0.6 % 0.28 % 48,076 0.8 % 0.24 % Total (1) $ 4,860,742 100.0 % 0.50 % $ 5,174,942 100.0 % 0.40 % $ 5,787,361 100.0 % 0.12 % (1) The rates for total deposits were calculated using the average balances of interest-bearing deposits.
At December 31, 2024, the Company had access to borrowing from the Federal Reserve up to $766,606 thousand based on collateral pledged at December 31, 2024. At December 31, 2024, the Company’s estimated unpledged collateral qualifying debt securities totaled $1,597,486 thousand.
At December 31, 2025, the Company had access to borrowing from the Federal Reserve Bank up to $741,923 thousand based on collateral pledged at December 31, 2025. At December 31, 2025, the Company’s estimated unpledged collateral qualifying debt securities totaled $2,137,832 thousand.
Government sponsored entities $ 292,117 $ 294,919 $ 290,853 Agency residential MBS 211,060 239,454 286,048 Agency commercial MBS 6,966 - - U.S.
Government sponsored entities $ 302,412 $ 292,117 $ 294,919 Agency residential MBS 184,346 211,060 239,454 Agency commercial MBS 707,560 6,966 - U.S.
However, no assurance can be given the Bank will not experience a period of reduced liquidity. -44- Management continually monitors the Bank’s cash levels. Loan demand from credit worthy borrowers will be dictated by economic and competitive conditions.
However, no assurance can be given the Bank will not experience a period of reduced liquidity. Management continually monitors the Bank’s cash levels. Loan demand from credit worthy borrowers will be dictated by economic and competitive conditions. The Bank aggressively solicits non-interest bearing demand deposits and money market checking deposits, which are the least sensitive to changes in interest rates.
The CLOs have interest coupons that change once every three months by the amount of change in the three-month SOFR base rate. The average balances and yields of CLOs for 2023 and 2022 was $1,543 million yielding 6.99% and $1,567 million yielding 3.62%, respectively.
The CLOs have interest coupons that change once every three months by the amount of change in the three-month SOFR base rate. The average balances and yields of CLOs for 2025 and 2024 were $712 million yielding 6.19%, and $1,252 million yielding 7.11%, respectively.
The Company recorded a $1.2 million reversal of provision for credit losses in 2023 which reflected a $2.2 million recovery in the first quarter 2023 on a previously charged off loan and a $400 thousand provision for credit losses in the third quarter of 2023, based on the results of the CECL model and Management’s estimate of credit losses over the remaining life of its loans and debt securities held to maturity.
In 2023, the Company recorded a $1.2 million reversal of provision for credit losses which reflected a $2.2 million recovery in the first quarter 2023 on a previously charged off loan and a $400 thousand provision for credit losses in the third quarter of 2023.
The Bank aggressively solicits non-interest bearing demand deposits and money market checking deposits, which are the least sensitive to changes in interest rates. The growth of these deposit balances is subject to heightened competition, the success of the Bank's sales efforts, delivery of superior customer service, new regulations and market conditions. The Bank does not aggressively solicit higher-costing time deposits.
The growth of these deposit balances is subject to heightened competition, the success of the Bank's sales efforts, delivery of superior customer service, new regulations and market conditions. The Bank does not aggressively solicit higher-costing time deposits. Changes in interest rates, most notably rising or elevated interest rates, or increased consumer spending, could impact deposit volumes.
The Company also raises capital as employees exercise stock options. Capital raised through the exercise of stock options was $1.5 million in the year ended December 31, 2024 and $950 thousand in the year ended December 31, 2023.
The Company raised $376 thousand through the exercise of stock options in the year ended December 31, 2025 while $1.5 million was raised through the exercise of stock options in the year ended December 31, 2024.
For the Years Ended December 31, 2024 2023 2022 Yield on earning assets (FTE) 4.43 % 4.43 % 3.20 % Rate paid on interest-bearing liabilities 0.60 % 0.12 % 0.05 % Net interest spread (FTE) 3.83 % 4.31 % 3.15 % Benefit of noninterest-bearing demand deposits 0.31 % 0.06 % 0.02 % Net interest margin (FTE) 4.14 % 4.37 % 3.17 % The Company’s yield on net interest margin decreased in 2024 compared with 2023 affected by higher rate paid on interest-bearing liabilities primarily due to competitive financial product pricing and higher volume on Bank Term Funding Program borrowings.
For the Years Ended December 31, 2025 2024 2023 Yield on earning assets (FTE) 4.06 % 4.43 % 4.43 % Rate paid on interest-bearing liabilities 0.50 % 0.60 % 0.12 % Net interest spread (FTE) 3.56 % 3.83 % 4.31 % Benefit of noninterest-bearing demand deposits 0.26 % 0.31 % 0.06 % Net interest margin (FTE) 3.82 % 4.14 % 4.37 % The Company’s net interest margin decreased in 2025 compared with 2024 affected primarily by lower yield on earning assets due to declining interest rates in the market.
Government sponsored entities $ 292,117 7 % $ 294,919 6 % Agency residential mortgage-backed securities ("MBS") 268,987 6 % 318,019 7 % Agency commercial MBS 6,966 - % - - % U.S.
Government sponsored entities $ 302,412 7 % $ 292,117 7 % Agency residential mortgage-backed securities ("MBS") 228,080 5 % 268,987 6 % Agency commercial MBS 707,560 16 % 6,966 - % U.S.
“Nonperforming assets” include nonaccrual loans, loans 90 or more days past due and still accruing, and repossessed loan collateral (commonly referred to as “Other Real Estate Owned”). -37- Nonperforming Loans At December 31, 2024 2023 2022 2021 2020 (In thousands) Nonperforming nonaccrual loans $ 201 $ 401 $ 146 $ 265 $ 526 Performing nonaccrual loans - 2 - 427 3,803 Total nonaccrual loans 201 403 146 692 4,329 Accruing loans 90 or more days past due 534 388 628 339 450 Total nonperforming loans $ 735 $ 791 $ 774 $ 1,031 $ 4,779 Management believes the overall credit quality of the loan portfolio is reasonably stable; however, classified and nonperforming assets could fluctuate from period to period.
“Nonperforming assets” include nonaccrual loans, loans 90 or more days past due and still accruing, and repossessed loan collateral (commonly referred to as “Other Real Estate Owned”). [The remainder of this page intentionally left blank] -37- Nonperforming Loans At December 31, 2025 2024 (In thousands) Nonperforming nonaccrual loans $ 768 $ 201 Performing nonaccrual loans 706 - Total nonaccrual loans 1,474 201 Accruing loans 90 or more days past due 340 534 Total nonperforming loans $ 1,814 $ 735 Management believes the overall credit quality of the loan portfolio is reasonably stable; however, classified and nonperforming assets could fluctuate from period to period.
Noninterest expense for 2024 increased compared with 2023 primarily due to higher salaries related to annual merit increases and higher costs for group health insurance, retirement plans for employees and stock based compensation, partially offset by decreases in losses from unauthorized debit card use, legal fees, operating losses from limited partnership investments and FDIC insurance assessments.
Noninterest expense for 2024 increased compared with 2023 primarily due to higher salaries and benefits, partially offset by decreases in losses from unauthorized debit card use, legal fees, operating losses from limited partnership investments and FDIC insurance assessments. The tax rate (FTE) was 27.2% for 2024 and 27.5% for 2023.
Net Interest and Loan Fee Income (FTE) The Company's primary source of revenue is net interest income, or the difference between interest income earned on loans and investment securities and interest expense paid on interest-bearing deposits and other borrowings. -23- Components of Net Interest and Loan Fee Income (FTE) For the Years Ended December 31, 2024 2023 2022 ($ in thousands) Interest and loan fee income $ 268,014 $ 284,013 $ 221,756 FTE adjustment 1,311 1,550 1,944 Interest and loan fee income (FTE) 269,325 285,563 223,700 Interest expense (17,419 ) (3,890 ) (1,925 ) Net interest and loan fee income (FTE) $ 251,906 $ 281,673 $ 221,775 Net interest margin (FTE) 4.14 % 4.37 % 3.17 % Net interest and loan fee income (FTE) decreased $29.8 million in 2024 compared with 2023 due to lower average balances of investment debt securities (down $502 million) and loans (down $76 million), higher average balances of Bank Term Funding Program borrowings (up $107 million) and higher rates on interest-bearing liabilities (up 0.48%), partially offset by higher yield on loans (up 0.26%) and higher average balances of interest-bearing cash (up $170 million).
For the Years Ended December 31, 2025 2024 2023 ($ in thousands) Interest and loan fee income $ 230,980 $ 268,014 $ 284,013 FTE adjustment 1,079 1,311 1,550 Interest and loan fee income (FTE) 232,059 269,325 285,563 Interest expense (13,712 ) (17,419 ) (3,890 ) Net interest and loan fee income (FTE) $ 218,347 $ 251,906 $ 281,673 Net interest margin (FTE) 3.82 % 4.14 % 4.37 % Net interest and loan fee income (FTE) decreased $33.6 million in 2025 compared with 2024 due to lower average balances of investment securities (down $546 million) and loans (down $80 million), lower yield on investment securities (down 0.45%) and higher rates on interest-bearing deposits (up 0.10%), partially offset by higher average balances of interest-bearing cash (up $266 million) and lower average balances of Bank Term Funding Program borrowings (down $107 million).
Summary of Changes in Interest Income and Expense For the Year Ended December 31, 2024 Compared with For the Year Ended December 31, 2023 Volume Yield/Rate Total (In thousands) (Decrease) increase in interest and loan fee income: Investment securities: Taxable $ (20,161 ) $ (2,226 ) $ (22,387 ) Tax-exempt (1) (1,111 ) 119 (992 ) Total investments (1) (21,272 ) (2,107 ) (23,379 ) Loans: Taxable (3,809 ) 2,044 (1,765 ) Tax-exempt (1) (153 ) 65 (88 ) Total loans (1) (3,962 ) 2,109 (1,853 ) Total interest-bearing cash 8,859 135 8,994 Total (decrease) increase in interest and loan fee income (1) (16,375 ) 137 (16,238 ) (Decrease) increase in interest expense: Deposits: Savings and interest-bearing transaction (336 ) 7,544 7,208 Time less than $100,000 (32 ) 15 (17 ) Time $100,000 or more (34 ) 14 (20 ) Total interest-bearing deposits (402 ) 7,573 7,171 Bank term funding program borrowings 5,813 - 5,813 Securities sold under repurchase agreements - 545 545 Total increase in interest expense 5,411 8,118 13,529 Decrease in net interest and loan fee income (1) $ (21,786 ) $ (7,981 ) $ (29,767 ) (1) Amounts calculated on an FTE basis using the current statutory federal tax rate. [The remainder of this page intentionally left blank] -28- Summary of Changes in Interest Income and Expense For the Year Ended December 31, 2023 Compared with For the Year Ended December 31, 2022 Volume Yield/Rate Total (In thousands) Increase (decrease) in interest and loan fee income: Investment securities: Taxable $ 2,562 $ 60,715 $ 63,277 Tax-exempt (1) (1,807 ) 85 (1,722 ) Total investments (1) 755 60,800 61,555 Loans: Taxable (4,224 ) 1,689 (2,535 ) Tax-exempt (1) (92 ) 54 (38 ) Total loans (1) (4,316 ) 1,743 (2,573 ) Total interest-bearing cash (5,482 ) 8,363 2,881 Total (decrease) increase in interest and loan fee income (1) (9,043 ) 70,906 61,863 (Decrease) increase in interest expense: Deposits: Savings and interest-bearing transaction (155 ) 2,095 1,940 Time less than $100,000 (21 ) 45 24 Time $100,000 or more (36 ) (4 ) (40 ) Total interest-bearing deposits (212 ) 2,136 1,924 Short-term borrowed funds (14 ) 55 41 Total (decrease) increase in interest expense (226 ) 2,191 1,965 (Decrease) increase in net interest and loan fee income (1) $ (8,817 ) $ 68,715 $ 59,898 (1) Amounts calculated on an FTE basis using the current statutory federal tax rate.
Summary of Changes in Interest Income and Expense For the Year Ended December 31, 2025 Compared with For the Year Ended December 31, 2024 Volume Yield/Rate Total (In thousands) (Decrease) increase in interest and loan fee income: Investment securities: Taxable $ (22,009 ) $ (18,938 ) $ (40,947 ) Tax-exempt (1) (967 ) 187 (780 ) Total investments (1) (22,976 ) (18,751 ) (41,727 ) Loans: Taxable (3,949 ) 632 (3,317 ) Tax-exempt (1) (367 ) 6 (361 ) Total loans (1) (4,316 ) 638 (3,678 ) Total interest-bearing cash 13,944 (5,805 ) 8,139 Total decrease in interest and loan fee income (1) (13,348 ) (23,918 ) (37,266 ) (Decrease) increase in interest expense: Deposits: Savings and interest-bearing transaction (389 ) 2,545 2,156 Time less than $100,000 (29 ) (15 ) (44 ) Time $100,000 or more (20 ) (21 ) (41 ) Total interest-bearing deposits (438 ) 2,509 2,071 Bank term funding program borrowings (5,813 ) - (5,813 ) Securities sold under repurchase agreements 175 (140 ) 35 Total (decrease) increase in interest expense (6,076 ) 2,369 (3,707 ) Decrease in net interest and loan fee income (1) $ (7,272 ) $ (26,287 ) $ (33,559 ) (1) Amounts calculated on an FTE basis using the current statutory federal tax rate. [The remainder of this page intentionally left blank] -28- Summary of Changes in Interest Income and Expense For the Year Ended December 31, 2024 Compared with For the Year Ended December 31, 2023 Volume Yield/Rate Total (In thousands) (Decrease) increase in interest and loan fee income: Investment securities: Taxable $ (20,161 ) $ (2,226 ) $ (22,387 ) Tax-exempt (1) (1,111 ) 119 (992 ) Total investments (1) (21,272 ) (2,107 ) (23,379 ) Loans: Taxable (3,809 ) 2,044 (1,765 ) Tax-exempt (1) (153 ) 65 (88 ) Total loans (1) (3,962 ) 2,109 (1,853 ) Total interest-bearing cash 8,859 135 8,994 Total (decrease) increase in interest and loan fee income (1) (16,375 ) 137 (16,238 ) (Decrease) increase in interest expense: Deposits: Savings and interest-bearing transaction (336 ) 7,544 7,208 Time less than $100,000 (32 ) 15 (17 ) Time $100,000 or more (34 ) 14 (20 ) Total interest-bearing deposits (402 ) 7,573 7,171 Bank term funding program borrowings 5,813 - 5,813 Securities sold under repurchase agreements - 545 545 Total increase in interest expense 5,411 8,118 13,529 Decrease in net interest and loan fee income (1) $ (21,786 ) $ (7,981 ) $ (29,767 ) (1) Amounts calculated on an FTE basis using the current statutory federal tax rate.
Debt Securities Held to Maturity Maturity Distribution At December 31, 2024 Within one year After one but within five years After five but within ten years Mortgage- backed Total ($ in thousands) Obligations of states and political subdivisions $ 13,508 $ 37,753 $ - $ - $ 51,261 Interest rate 3.82 % 3.51 % - % - % 3.60 % Corporate securities - 309,813 425,634 - 735,447 Interest rate - % 4.16 % 4.28 % - % 4.25 % Subtotal 13,508 347,566 425,634 - 786,708 Interest rate 3.82 % 4.09 % 4.28 % - % 4.21 % MBS - - - 57,927 57,927 Interest rate - % - % - % 2.30 % 2.30 % Total $ 13,508 $ 347,566 $ 425,634 $ 57,927 $ 844,635 Interest rate 3.82 % 4.09 % 4.28 % 2.30 % 4.07 % The Company had corporate securities as shown below at the dates indicated: Corporate securities At December 31, 2024 At December 31, 2023 Amortized Fair Amortized Fair Cost Value Cost Value (In thousands) Debt securities available for sale $ 2,031,144 $ 1,835,937 $ 2,129,103 $ 1,909,548 Debt securities held to maturity 735,447 703,210 728,650 705,356 Total corporate securities $ 2,766,591 $ 2,539,147 $ 2,857,753 $ 2,614,904 The following table summarizes total corporate securities by credit rating: At December 31, 2024 At December 31, 2023 Fair value As a percent of total corporate securities Fair value As a percent of total corporate securities ($ in thousands) AA- $ 72,569 3 % $ 73,016 3 % A+ 256,906 10 % 250,322 9 % A 353,434 14 % 380,257 14 % A- 807,698 32 % 825,882 32 % BBB+ 634,118 25 % 723,767 28 % BBB 414,422 16 % 361,660 14 % Total corporate securities $ 2,539,147 100 % $ 2,614,904 100 % [The remainder of this page intentionally left blank] -33- The following table summarizes total corporate securities by the industry sector in which the issuing companies operate: At December 31, 2024 At December 31, 2023 Fair value As a percent of total corporate securities Fair value As a percent of total corporate securities ($ in thousands) Financial $ 1,450,675 57 % $ 1,516,147 58 % Utilities 275,551 11 % 274,929 10 % Industrial 212,587 8 % 215,428 8 % Consumer, Non-cyclical 169,311 7 % 170,423 7 % Communications 154,358 6 % 158,495 6 % Basic Materials 100,617 4 % 100,693 4 % Energy 69,320 3 % 69,331 3 % Technology 61,008 2 % 63,185 2 % Consumer, Cyclical 45,720 2 % 46,273 2 % Total corporate securities $ 2,539,147 100 % $ 2,614,904 100 % The following table summarizes total corporate securities by the location of the issuers’ headquarters; all the corporate securities are denominated in United States dollars: At December 31, 2024 At December 31, 2023 Fair value As a percent of total corporate securities Fair value As a percent of total corporate securities ($ in thousands) United States of America $ 1,767,669 70 % $ 1,811,463 69 % Canada 192,122 8 % 195,979 7 % Japan 167,624 7 % 164,948 6 % United Kingdom 139,648 5 % 162,794 6 % France 92,970 4 % 91,726 4 % Switzerland 73,424 3 % 93,898 4 % Netherlands 35,425 1 % 35,381 1 % Australia 24,700 1 % 24,800 1 % Belgium 19,726 1 % 20,894 1 % Jersey 12,948 - % - - % Germany 12,891 - % 13,021 1 % Total corporate securities $ 2,539,147 100 % $ 2,614,904 100 % The following table summarizes the above corporate securities with issuer’s headquarters located outside of the United States of America by the industry sector in which the issuing companies operate; all the corporate securities are denominated in United States dollars: At December 31, 2024 At December 31, 2023 Fair value As a percent of total foreign corporate securities Fair value As a percent of total foreign corporate securities ($ in thousands) Financial $ 659,403 86 % $ 702,892 87 % Energy 32,041 4 % 31,970 4 % Consumer, Cyclical 25,839 3 % 13,021 2 % Basic Materials 24,700 3 % 24,800 3 % Consumer, Non-cyclical 19,726 3 % 20,895 3 % Utilities 9,769 1 % 9,863 1 % Total foreign corporate securities $ 771,478 100 % $ 803,441 100 % -34- The Company’s $983 million (fair value) in collateralized loan obligations at December 31, 2024, consist of investments in 96 issues that are within the senior tranches of their respective fund securitization structures.
Debt Securities Held to Maturity Maturity Distribution At December 31, 2025 Within one year After one but within five years After five but within ten years Mortgage- backed Total ($ in thousands) Obligations of states and political subdivisions $ 28,363 $ 5,234 $ - $ - $ 33,597 Interest rate 3.56 % 3.80 % - % - % 3.63 % Corporate securities 4,963 420,153 317,128 - 742,244 Interest rate 4.15 % 4.24 % 4.17 % - % 4.21 % Subtotal 33,326 425,387 317,128 - 775,841 Interest rate 3.56 % 4.23 % 4.17 % - % 4.18 % MBS - - - 43,734 43,734 Interest rate - % - % - % 2.37 % 2.37 % Total $ 33,326 $ 425,387 $ 317,128 $ 43,734 $ 819,575 Interest rate 3.56 % 4.23 % 4.17 % 2.37 % 4.08 % The Company had corporate securities as shown below at the dates indicated: Corporate securities At December 31, 2025 At December 31, 2024 Amortized Fair Amortized Fair Cost Value Cost Value (In thousands) Debt securities available for sale $ 1,913,553 $ 1,804,080 $ 2,031,144 $ 1,835,937 Debt securities held to maturity 742,244 737,480 735,447 703,210 Total corporate securities $ 2,655,797 $ 2,541,560 $ 2,766,591 $ 2,539,147 The following table summarizes total corporate securities by credit rating: At December 31, 2025 At December 31, 2024 Fair value As a percent of total corporate securities Fair value As a percent of total corporate securities ($ in thousands) AA- $ 77,304 3 % $ 72,569 3 % A+ 272,496 11 % 256,906 10 % A 423,726 17 % 353,434 14 % A- 801,466 31 % 807,698 32 % BBB+ 624,557 25 % 634,118 25 % BBB 342,011 13 % 414,422 16 % Total corporate securities $ 2,541,560 100 % $ 2,539,147 100 % [The remainder of this page intentionally left blank] -33- The following table summarizes total corporate securities by the industry sector in which the issuing companies operate: At December 31, 2025 At December 31, 2024 Fair value As a percent of total corporate securities Fair value As a percent of total corporate securities ($ in thousands) Financial $ 1,448,196 57 % $ 1,450,675 57 % Utilities 288,995 11 % 275,551 11 % Industrial 214,154 8 % 212,587 8 % Consumer, Non-cyclical 174,853 7 % 169,311 7 % Communications 130,355 5 % 154,358 6 % Basic Materials 102,612 4 % 100,617 4 % Energy 71,815 3 % 69,320 3 % Technology 63,158 3 % 61,008 2 % Consumer, Cyclical 47,422 2 % 45,720 2 % Total corporate securities $ 2,541,560 100 % $ 2,539,147 100 % The following table summarizes total corporate securities by the location of the issuers’ headquarters; all the corporate securities are denominated in United States dollars: At December 31, 2025 At December 31, 2024 Fair value As a percent of total corporate securities Fair value As a percent of total corporate securities ($ in thousands) United States of America $ 1,815,106 71 % $ 1,767,669 70 % Canada 203,940 8 % 192,122 8 % Japan 159,249 6 % 167,624 7 % United Kingdom 112,636 4 % 139,648 5 % France 80,668 3 % 92,970 4 % Switzerland 76,127 3 % 73,424 3 % Netherlands 37,660 2 % 35,425 1 % Australia 25,305 1 % 24,700 1 % Belgium 17,211 1 % 19,726 1 % Germany 13,658 1 % 12,891 - % Jersey - - % 12,948 - % Total corporate securities $ 2,541,560 100 % $ 2,539,147 100 % The following table summarizes the above corporate securities with issuer’s headquarters located outside of the United States of America by the industry sector in which the issuing companies operate; all the corporate securities are denominated in United States dollars: At December 31, 2025 At December 31, 2024 Fair value As a percent of total foreign corporate securities Fair value As a percent of total foreign corporate securities ($ in thousands) Financial $ 626,661 86 % $ 659,403 86 % Energy 33,540 5 % 32,041 4 % Basic Materials 25,305 4 % 24,700 3 % Consumer, Non-cyclical 17,211 2 % 19,726 3 % Consumer, Cyclical 13,658 2 % 25,839 3 % Utilities 10,079 1 % 9,769 1 % Total foreign corporate securities $ 726,454 100 % $ 771,478 100 % -34- The Company’s $425 million (fair value) in collateralized loan obligations at December 31, 2025, consist of investments in 41 issues that are within the senior tranches of their respective fund securitization structures.
Debt securities eligible as collateral are shown at market value unless noted otherwise: At December 31, 2024 (in thousands) Debt Securities Eligible as Collateral: Corporate Securities $ 2,539,147 Collateralized Loan Obligations rated AAA 311,650 Obligations of States and Political Subdivisions 113,082 Agency Mortgage Backed Securities 273,148 Securities of U.S. Government Sponsored Entities 292,117 U.S.
Debt securities eligible as collateral are shown at market value unless noted otherwise: -43- At December 31, 2025 (in thousands) Debt Securities Eligible as Collateral: Corporate Securities $ 2,541,560 Collateralized Loan Obligations rated AAA 155,881 Obligations of States and Political Subdivisions 79,293 Agency Mortgage Backed Securities 934,356 Securities of U.S.
Average balances of higher costing time deposits declined 35% to $91 million from 2022 to 2024. The Company’s average balances of checking and savings accounts represented 98% of average balances of total deposits in 2024, 2023 and 2022. Total time deposits were $82 million and $97 million at December 31, 2024 and December 31, 2023, respectively.
The Company’s average balances of checking and savings accounts represented 98% of average balances of total deposits in 2025, 2024 and 2023. Total time deposits were $67 million and $82 million at December 31, 2025 and December 31, 2024, respectively. The following table sets forth, by time remaining to maturity, the Company’s total domestic time deposits.
The Company recorded a $1.2 million reversal of provision for credit losses in 2023, reflecting a $2.2 million recovery on a previously charged off loan in the first quarter 2023 and a $400 thousand credit loss provision, based on the results of the Company’s current expected credit loss (“CECL”) model and Management’s estimate of credit losses over the remaining life of its loans and debt securities held to maturity.
Based on Management’s estimate of credit losses over the remaining life of its loans and debt securities held to maturity, the Company recorded a $550 thousand reversal of provision for credit losses in 2025, which was recorded in the first quarter of 2025.
The following table summarizes total collateralized loan obligations by credit rating: At December 31, 2023 Amortized Fair Cost Value (In thousands) AAA $ 536,185 $ 532,729 AA 965,063 951,868 Total $ 1,501,248 $ 1,484,597 See Note 2 to the consolidated financial statements for additional information related to the investment securities.
The following table summarizes total collateralized loan obligations by credit rating: At December 31, 2024 Amortized Fair Cost Value (In thousands) AAA $ 312,710 $ 311,650 AA 674,445 670,939 Total $ 987,155 $ 982,589 See Note 2 to the consolidated financial statements for additional information related to the investment securities.
Net interest and loan fee income (FTE) increased $59.9 million in 2023 compared with 2022 due to higher yield on interest-earning assets and higher average balances of investment debt securities, partially offset by lower average balances of loans and interest-bearing cash and higher rate on interest-bearing liabilities.
Net interest and loan fee income (FTE) decreased $33.6 million in 2025 compared with 2024 due to lower average balances of investment securities and loans, lower yield on investment securities and higher rates on interest-bearing deposits, partially offset by higher average balances of interest-bearing cash and lower average balances of Bank Term Funding Program borrowings.

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