Westamerica Bancorporation Reports Annual Earnings

Westamerica Bancorporation (NASDAQ:WABC), parent company of Westamerica Bank, today reported net income for the year ended December 31, 2007 of $89.8 million, compared to $98.8 million for 2006. Diluted earnings per share (EPS) for 2007 were $2.98, compared to $3.11 for the year 2006. Return on shareholders’ equity for the year 2007 was 22.1 percent and return on assets was 1.93 percent, compared to 23.4 percent and 2.01 percent, respectively, for the year 2006. Net income for the fourth quarter 2007 totaled $21.8 million, or EPS of $0.74, compared to net income of $22.0 million and EPS of $0.74 for the third quarter 2007, and net income of $24.0 million and EPS of $0.77 for the fourth quarter 2006. Fourth quarter 2007 results include a $2.3 million litigation expense for Westamerica’s proportionate share of Visa’s litigation exposure for which Visa's members are responsible. Management currently anticipates that the Company’s proportional share of the proceeds of the planned initial public offering by Visa will more than offset any liabilities related to Visa litigation. Fourth quarter 2007 results also include a $700 thousand income tax refund, derived from an amended 2003 tax return, which reduced income tax expense. The expense for Visa litigation and the income tax refund combined to reduce net income by $590 thousand, or diluted earnings per share by $0.02. "Our net interest margin increased to 4.53 percent in the fourth quarter 2007, compared to 4.34 percent in the third quarter 2007. The margin improvement was in large part due to declining short-term interest rates, which allowed us to reduce our cost of funds. Our consistent application of traditional, conservative loan underwriting practices over the last several years has helped maintain relatively steady loan quality. Our total non-performing assets were $5.8 million at December 31, 2007, compared to $5.7 million at September 30, 2007, $5.2 million at December 31, 2006 and $6.5 million at December 31, 2005," said Chairman, President and CEO David Payne. "Throughout 2007, we also focused on improving our fee income, which increased seven percent over 2006, and reducing our ongoing operating expenses, which fell two percent from 2006. We are proud to have generated a 22 percent return on our shareholders' equity in 2007," continued Payne. Net interest income on a fully taxable equivalent basis was $46.8 million in the fourth quarter of 2007 compared to $45.6 million in the prior quarter and $49.0 million in the same quarter a year ago. The fourth quarter 2007 net interest margin on a fully taxable equivalent basis was 4.53 percent, compared to 4.34 percent for the previous quarter and 4.49 percent for the fourth quarter of 2006. For the full year 2007, net interest income and the net interest margin on a fully taxable equivalent basis were $185.3 million and 4.40 percent, compared to $204.7 million and 4.57 percent, respectively, for 2006. The provision for credit losses was $475 thousand for the fourth quarter of 2007, compared to $75 thousand for the previous quarter and $70 thousand for the year ago quarter. The increase in the provision for credit losses in the fourth quarter 2007 reflects Management’s assessment of credit risk for the Company. In addition to increasing the provision for credit losses, Management reduced the reserve for unfunded credit commitments by $400 thousand during the fourth quarter 2007 to reflect a reduction in unfunded construction loan commitments. As discussed below, the reduction in the reserve for unfunded credit commitments was recorded in other expenses. Noninterest income in the fourth quarter of 2007 totaled $14.7 million, unchanged from the prior quarter and compared to $13.7 million reported for the year ago quarter. The increase from the year ago quarter is due to higher deposit service charges and merchant card processing fees. For the full year 2007, noninterest income increased to $59.3 million from $55.3 million for 2006. The $4.0 million annual increase is primarily attributable to higher deposit service charges, merchant card processing fees, debit card fees, and $822 thousand company owned life insurance proceeds recognized in 2007. Noninterest expense for the fourth quarter of 2007 totaled $27.2 million compared to $24.9 million in the prior quarter and $24.5 million in the year ago quarter. The increase from the prior quarter is primarily attributable to: A $402 thousand increase in data processing costs, A $221 thousand reduction in personnel expenses, A $149 thousand reduction in equipment costs, Lower other expenses primarily attributable to a $400 thousand reduction in the reserve for unfunded credit commitments, and The $2.3 million Visa litigation charge. The higher data processing expenses and lower personnel and equipment costs are primarily due to conversion of the Company's item processing function to an outside vendor. This conversion occurred during the third quarter 2007 and is not expected to change overall expenses by a meaningful amount. The increase in noninterest expense from the year ago quarter is primarily attributable to higher data processing expenses and the Visa litigation, offset in part by the reduction in the reserve for unfunded credit commitments, all of which are described above. For the full year 2007, noninterest expense was $101.4 million, down from $101.7 million for 2006. The decrease is primarily attributable to: A $2.2 million reduction in personnel costs, A $647 thousand reduction in equipment costs, A $548 thousand reduction in professional fees, $434 thousand lower intangible asset amortization, A $1.0 million increase in data processing costs, A $299 increase in occupancy costs, The $400 thousand reduction in the reserve for unfunded credit commitments, and The $2.3 million Visa litigation charge. Shareholders' equity was $395 million at December 31, 2007, and the equity-to-asset ratio was 8.7 percent. At December 31, 2007, there were approximately 1.4 million shares remaining to purchase under the Company’s existing share repurchase program. At December 31, 2007, the Company's assets totaled $4.6 billion and loans outstanding totaled $2.5 billion. Westamerica Bancorporation, through its wholly owned subsidiary Westamerica Bank, operates 86 branches throughout 21 Northern and Central California counties. Westamerica Bancorporation Web Address: www.westamerica.com For additional information contact: Westamerica BancorporationRobert A. Thorson - SVP & Chief Financial Officer707-863-6840 FORWARD-LOOKING INFORMATION: The following appears in accordance with the Private Securities Litigation Reform Act of 1995: This press release may contain forward-looking statements about the Company, including descriptions of plans or objectives of its management for future operations, products or services, and forecasts of its revenues, earnings or other measures of economic performance. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements, by their nature, are subject to risks and uncertainties. A number of factors - many of which are beyond the Company's control - could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. The Company's most recent annual and quarterly reports filed with the Securities and Exchange Commission, including the Company's Form 10-Q for the quarter ended September 30, 2007 and Form 10-K for the year ended December 31, 2006, describe some of these factors, including certain credit, market, operational, liquidity and interest rate risks associated with the Company's business and operations. Other factors described in these reports include changes in business and economic conditions, competition, fiscal and monetary policies, disintermediation, legislation including the Sarbanes-Oxley Act of 2002 and the Gramm-Leach-Bliley Act of 1999, and mergers and acquisitions. Forward-looking statements speak only as of the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date forward looking statements are made. WESTAMERICA BANCORPORATION FINANCIAL HIGHLIGHTS December 31, 2007   1. Net Income Summary.   (dollars in thousands except per-share amounts) Q4'07   Q4'06   %Change   Q3'07       Net Interest Income (FTE) $46,812 $49,029 -4.5% $45,563 Provision for Credit Losses 475 70 578.6% 75 Noninterest Income: Life insurance gains 0 0 n/m 0 Other 14,657   13,747 6.6% 14,644 Total Noninterest Income 14,657 13,747 6.6% 14,644 Noninterest Expense: VISA Litigation 2,338 0 n/m 0 Other 24,868   24,492 1.5% 24,853 Total Noninterest Expense 27,206   24,492 11.1% 24,853 Income Before Taxes (FTE) 33,788 38,214 35,279 Income Tax Provision (FTE) 11,956   14,256 -16.1% 13,257 Net Income $21,832   $23,958 -8.9% $22,022 Average Shares Outstanding 29,213 30,699 -4.8% 29,532 Diluted Average Shares 29,575 31,204 -5.2% 29,915   Operating Ratios: Basic Earnings Per Share $0.75 $0.78 -4.2% $0.75 Diluted Earnings Per Share 0.74 0.77 -3.9% 0.74 Return On Assets 1.90% 1.98% 1.89% Return On Equity 21.7% 22.8% 21.7% Net Interest Margin (FTE) 4.53% 4.49% 4.34% Efficiency Ratio (FTE) 44.3% 39.0% 41.3%   Dividends Paid Per Share $0.34 $0.34 0.0% $0.34 Dividend Payout Ratio 46% 44% 46%   12/31'07YTD   12/31'06YTD   %Change   Net Interest Income (FTE) $185,348 $204,703 -9.5% Provision for Credit Losses 700 445 57.3% Noninterest Income: Life insurance gains 822 0 n/m Other 58,456   55,347 5.6% Total Noninterest Income 59,278 55,347 7.1% Noninterest Expense: VISA Litigation 2,338 0 n/m Other 99,090   101,724 -2.6% Total Noninterest Expense 101,428   101,724 -0.3% Income Before Taxes (FTE) 142,498 157,881 Income Tax Provision (FTE) 52,722   59,075 -10.8% Net Income $89,776   $98,806 -9.1% Average Shares Outstanding 29,753 31,202 -4.6% Diluted Average Shares 30,165 31,739 -5.0%   Operating Ratios: Basic Earnings Per Share $3.02 $3.17 -4.7% Diluted Earnings Per Share 2.98 3.11 -4.4% Return On Assets 1.93% 2.01% Return On Equity 22.1% 23.4% Net Interest Margin (FTE) 4.40% 4.57% Efficiency Ratio (FTE) 41.5% 39.1% Dividends Paid Per Share $1.36 $1.30 4.6% Dividend Payout Ratio 46% 42%   2. Net Interest Income.   (dollars in thousands) Q4'07     Q4'06     %Change     Q3'07             Interest and Fee Income (FTE) $63,295 $66,512 -4.8% $64,708 Interest Expense 16,483     17,483 -5.7% 19,145 Net Interest Income (FTE) $46,812     $49,029 -4.5% $45,563 Average Earning Assets $4,124,196 $4,366,675 -5.6% $4,198,859 Average Interest- Bearing Liabilities 2,830,235 2,975,221 -4.9% 2,905,457   Yield on Earning Assets (FTE) 6.11% 6.07% 6.14% Cost of Funds 1.58% 1.58% 1.80% Net Interest Margin (FTE) 4.53% 4.49% 4.34% Interest Expense/ Interest-Bearing Liabilities 2.30% 2.32% 2.60% Net Interest Spread (FTE) 3.81% 3.75% 3.54%   12/31'07YTD     12/31'06YTD     %Change   Interest and Fee Income (FTE) $257,903 $269,971 -4.5% Interest Expense 72,555     65,268 11.2% Net Interest Income (FTE) $185,348     $204,703 -9.5% Average Earning Assets $4,213,511 $4,477,047 -5.9% Average Interest- Bearing Liabilities 2,905,370 3,091,231 -6.0%   Yield on Earning Assets (FTE) 6.12% 6.03% Cost of Funds 1.72% 1.46% Net Interest Margin (FTE) 4.40% 4.57% Interest Expense/ Interest-Bearing Liabilities 2.50% 2.11% Net Interest Spread (FTE) 3.62% 3.92%   3. Loans & Other Earning Assets.   (average volume, dollars in thousands) Q4'07     Q4'06     %Change     Q3'07             Total Assets $4,556,715 $4,793,700 -4.9% $4,628,728 Total Earning Assets 4,124,196 4,366,675 -5.6% 4,198,859 Total Loans 2,496,403 2,547,524 -2.0% 2,514,685 Commercial Loans 615,093 637,194 -3.5% 625,490 Commercial RE Loans 864,464 915,577 -5.6% 871,225 Consumer Loans 1,016,846 994,753 2.2% 1,017,970 Total Investment Securities 1,627,793 1,819,151 -10.5% 1,684,174 Available For Sale (Market) 569,832 630,826 -9.7% 590,749 Held To Maturity 1,057,961 1,188,325 -11.0% 1,093,425 Unrealized Gain (Loss) 4,134 (9,356) n/m (4,974)   Loans/Deposits 75.1% 71.7% 74.9%   12/31'07YTD     12/31'06YTD     %Change   Total Assets $4,641,460 $4,910,671 -5.5% Total Earning Assets 4,213,511 4,477,047 -5.9% Total Loans 2,511,763 2,576,791 -2.5% Commercial Loans 620,841 665,414 -6.7% Commercial RE Loans 879,952 916,677 -4.0% Consumer Loans 1,010,970 994,700 1.6% Total Investment Securities 1,701,748 1,900,256 -10.4% Available For Sale (Market) 593,898 645,853 -8.0% Held To Maturity 1,107,850 1,254,403 -11.7% Unrealized Gain (Loss) 4,134 (9,356) n/m   Loans/Deposits 74.5% 70.6%   4. Deposits & Other Interest-Bearing Liabilities.   (average volume, dollars in thousands) Q4'07     Q4'06     %Change     Q3'07             Total Deposits $3,325,154 $3,553,379 -6.4% $3,358,163 Noninterest Demand 1,258,496 1,332,213 -5.5% 1,254,530 Interest Checking 546,485 593,236 -7.9% 566,556 Other Low-Cost 805,321 896,538 -10.2% 810,213 Time greater than $100K 512,610 505,390 1.4% 519,488 Time less than $100K 202,242 226,002 -10.5% 207,376 Total Short-Term Borrowings 726,783 717,114 1.3% 764,992 Fed Funds Purchased 544,640 517,913 5.2% 621,165 Other Short-Term Funds 182,143 199,201 -8.6% 143,827 Long-Term Debt 36,794 36,941 -0.4% 36,832 Shareholders' Equity 398,703 417,597 -4.5% 402,016   Demand Deposits/ Total Deposits 37.8% 37.5% 37.4% Transaction & Savings Deposits / Total Deposits 78.5% 79.4% 78.4%   12/31'07YTD     12/31'06YTD     %Change   Total Deposits $3,371,853 $3,648,103 -7.6% Noninterest Demand 1,262,723 1,329,107 -5.0% Interest Checking 569,286 617,956 -7.9% Other Low-Cost 826,336 956,699 -13.6% Time greater than $100K 503,469 504,980 -0.3% Time less than $100K 210,039 239,361 -12.3% Total Short-Term Borrowings 759,390 734,970 3.3% Fed Funds Purchased 596,711 525,068 13.6% Other Short-Term Funds 162,679 209,902 -22.5% Long-Term Debt 36,850 37,265 -1.1% Shareholders' Equity 406,028 422,541 -3.9%   Demand Deposits/ Total Deposits 37.4% 36.4% Transaction & Savings Deposits / Total Deposits 78.8% 79.6%   5. Interest Yields Earned & Rates Paid.           (dollars in thousands) Q4'07 AverageVolume     Income/Expense     Yield/Rate   Interest Income Earned Total Earning Assets (FTE) $4,124,196 $63,295 6.11% Total Loans (FTE) 2,496,403 41,389 6.58% Commercial Loans (FTE) 615,093 11,986 7.73% Commercial RE Loans 864,464 15,492 7.11% Consumer Loans 1,016,846 13,911 5.43% Total Investments (FTE) 1,627,793 21,906 5.38%   Interest Expense Paid Total Earning Assets 4,124,196 16,483 1.58% Total Interest-Bearing Liabilities 2,830,235 16,483 2.30% Total Interest-Bearing Deposits 2,066,658 9,126 1.75% Interest-Bearing Transaction 546,485 515 0.37% Savings 805,321 1,636 0.81% Time less than $100K 202,242 1,716 3.37% Time greater than $100K 512,610 5,259 4.07% Total Short-Term Borrowings 726,783 6,779 3.65% Fed Funds Purchased 544,640 6,341 4.56% Other Short-Term Funds 182,143 438 0.95% Long-Term Debt 36,794 578 6.29%   Net Interest Margin (FTE) $46,812 4.53%   Q4'06 AverageVolume     Income/Expense     Yield/Rate   Interest Income Earned Total Earning Assets (FTE) $4,366,675 $66,512 6.07% Total Loans (FTE) 2,547,524 42,450 6.61% Commercial Loans (FTE) 637,194 12,810 7.98% Commercial RE Loans 915,577 16,361 7.09% Consumer Loans 994,753 13,279 5.30% Total Investments (FTE) 1,819,151 24,062 5.29%   Interest Expense Paid Total Earning Assets 4,366,675 17,483 1.58% Total Interest-Bearing Liabilities 2,975,221 17,483 2.32% Total Interest-Bearing Deposits 2,221,166 9,283 1.66% Interest-Bearing Transaction 593,236 486 0.33% Savings 896,538 1,203 0.53% Time less than $100K 226,002 1,773 3.11% Time greater than $100K 505,390 5,821 4.57% Total Short-Term Borrowings 717,114 7,622 4.16% Fed Funds Purchased 517,913 6,936 5.24% Other Short-Term Funds 199,201 686 1.37% Long-Term Debt 36,941 578 6.26%   Net Interest Margin (FTE) $49,029 4.49%   6. Noninterest Income.   (dollars in thousands except per-share amounts) Q4'07   Q4'06   %Change   Q3'07       Service Charges on Deposits $7,422 $6,990 6.2% $7,569 Merchant Credit Card Income 2,817 2,652 6.2% 2,808 ATM Fees & Interchange 709 676 4.9% 723 Debit Card Fees 972 902 7.8% 969 Financial Services Commissions 265 331 -19.9% 383 Mortgage Banking Income 32 45 -28.9% 29 Trust Fees 303 311 -2.6% 337 Other Income 2,137   1,840 16.2% 1,826 Sub-total 14,657 13,747 6.6% 14,644 Life Insurance Gains 0   0 n/m 0 Total Noninterest Income $14,657   $13,747 6.6% $14,644   Total Revenue (FTE) $61,469 $62,776 -2.1% $60,207 Noninterest Income/Revenue 23.8% 21.9% 24.3% Service Charges/Deposits (a) 0.89% 0.78% 0.89% Total Revenues Per Share (a) $8.35 $8.11 2.9% $8.09   12/31'07YTD   12/31'06YTD   %Change Service Charges on Deposits $30,235 $28,414 6.4% Merchant Credit Card Income 10,841 9,860 9.9% ATM Fees & Interchange 2,824 2,824 0.0% Debit Card Fees 3,797 3,489 8.8% Financial Services Commissions 1,321 1,368 -3.4% Mortgage Banking Income 124 179 -30.6% Trust Fees 1,281 1,178 8.7% Other Income 8,033   8,035 0.0% Sub-total 58,456 55,347 5.6% Life Insurance Gains 822   0 n/m Total Noninterest Income $59,278   $55,347 7.1%   Total Revenue (FTE) $244,626 $260,050 -5.9% Noninterest Income/Revenue 24.2% 21.3% Service Charges/Deposits (a) 0.90% 0.78% Total Revenues Per Share (a) $8.22 $8.33 -1.3%   (a) Annualized   7. Noninterest Expense.               (dollars in thousands) Q4'07     Q4'06     %Change     Q3'07 Salaries & Benefits $12,366 $12,405 -0.3% $12,587 Occupancy 3,386 3,227 4.9% 3,327 Equipment 934 1,174 -20.4% 1,083 Data Processing 2,202 1,529 44.0% 1,800 Courier 845 891 -5.2% 854 Postage 391 431 -9.3% 404 Telephone 343 365 -6.0% 342 Professional Fees 534 614 -13.0% 451 Stationery & Supplies 365 314 16.2% 323 Loan Expense 195 199 -2.0% 217 Operational Losses 234 320 -26.9% 228 Amortization of Identifiable Intangibles 893 1,016 -12.1% 893 Other Operating 2,180     2,007 8.6% 2,344 Sub-total 24,868 24,492 1.5% 24,853 VISA Litigation 2,338     0 n/m 0 Total Noninterest Expense $27,206     $24,492 11.1% $24,853   FTE Staff 868 891 -2.6% 876   Average Assets per FTE Staff $5,250 $5,380 -2.4% $5,284 Revenues per FTE Staff (a) $281 $280 0.5% $273 Noninterest Expense/ Earning Assets (a) 2.62% 2.23% 2.35% Noninterest Expense/Revenues 44.3% 39.0% 41.3%   12/31'07YTD     12/31'06YTD     %Change   Salaries & Benefits $50,142 $52,302 -4.1% Occupancy 13,346 13,047 2.3% Equipment 4,302 4,949 -13.1% Data Processing 7,069 6,097 15.9% Courier 3,404 3,627 -6.1% Postage 1,602 1,648 -2.8% Telephone 1,398 1,634 -14.4% Professional Fees 1,889 2,437 -22.5% Stationery & Supplies 1,271 1,163 9.3% Loan Expense 750 882 -14.9% Operational Losses 793 892 -11.1% Amortization of Identifiable Intangibles 3,653 4,087 -10.6% Other Operating 9,471     8,959 5.7% Sub-total 99,090 101,724 -2.6% VISA Litigation 2,338     0 n/m Total Noninterest Expense $101,428     $101,724 -0.3%   FTE Staff 887 909 -2.4%   Average Assets per FTE Staff $5,233 $5,402 -3.1% Revenues per FTE Staff (a) $276 $286 -3.6% Noninterest Expense/ Earning Assets (a) 2.41% 2.27% Noninterest Expense/Revenues 41.5% 39.1%   (a) Annualized   8. Provision for Credit Losses.       (dollars in thousands) Q4'07     Q4'06     %Change     Q3'07         Provision for Credit Losses $475 $70 578.6% $75 Gross Loan Losses 1,162 848 37.1% 1,031 Net Loan Losses 906 78 1063.2% 610 Recoveries/Gross Losses 22% 91% 41% Average Total Loans $2,496,403 $2,547,524 -2.0% $2,514,685 Net Loan Losses/Loans (a) 0.14% 0.01% 0.10% Provision for Credit Losses/Loans (a) 0.08% 0.01% 0.01% Provision for Credit Losses/ Net Loan Losses 52.4% 89.9% 12.3%   12/31'07YTD     12/31'06YTD     %Change   Provision for Credit Losses $700 $445 57.3% Gross Loan Losses 5,681 3,622 56.8% Net Loan Losses 3,524 964 265.6% Recoveries/Gross Losses 38% 73% Average Total Loans $2,511,763 $2,576,791 -2.5% Net Loan Losses/Loans (a) 0.14% 0.04% Provision for Credit Losses/Loans (a) 0.03% 0.02% Provision for Credit Losses/ Net Loan Losses 19.9% 46.2%   (a) Annualized   9. Credit Quality.       (dollars in thousands) 12/31/07     12/31/06     %Change     9/30/07         Nonaccrual Loans: Nonperforming $3,164 $61 n/m $3,132 Performing 1,688     4,404 -61.7% 1,695 Total Nonaccrual Loans 4,852 4,465 8.7% 4,827 Past Due Accruing Loans 297     65 356.9% 251 Total Nonperforming Loans 5,149 4,530 13.7% 5,078 Repossessed Collateral 613     647 -5.3% 613 Total Nonperforming Loans & Repossessed Collateral $5,762     $5,177 11.3% $5,691   Classified Loans $24,419     $20,180 21.0% $21,403 Allowance for Loan Losses $52,506 $55,330 -5.1% $52,938 Total Loans Outstanding 2,502,976 2,531,734 -1.1% 2,511,374 Total Assets 4,558,959 4,769,335 -4.4% 4,657,016   Allowance for Loan Losses/ Total Loans 2.10% 2.19% 2.11% Nonperforming Loans/ Total Loans 0.21% 0.18% 0.20% Nonperforming Loans & Repos- sessed Collateral/Total Assets 0.13% 0.11% 0.12% Allowance for Loan Losses/ Nonperforming Loans 1020% 1221% 1042% Allowance for Loan Losses/ Classified Loans 215% 274% 247% Classified Loans/ (Equity + Allowance for Loan Losses) 5.5% 4.2% 4.7%   10. Capital.     (dollars in thousands, except per-share amounts) 12/31/07   12/31/06   %Change   9/30/07       Shareholders' Equity $394,603 $424,235 -7.0% $403,651 Tier I Regulatory Capital 278,970 298,576 -6.6% 283,015 Total Regulatory Capital 318,089 339,114 -6.2% 322,598 Total Assets 4,558,959 4,769,335 -4.4% 4,657,016 Risk-Adjusted Assets 2,986,737 3,057,054 -2.3% 3,017,668   Shareholders' Equity/ Total Assets 8.66% 8.90% 8.67% Shareholders' Equity/ Total Loans 15.77% 16.76% 16.07% Tier I Capital/Total Assets 6.12% 6.26% 6.08% Tier I Capital/ Risk-Adjusted Assets 9.34% 9.77% 9.38% Total Capital/ Risk-Adjusted Assets 10.65% 11.09% 10.69% Shares Outstanding 29,018 30,547 -5.0% 29,378 Book Value Per Share $13.60 $13.89 -2.1% $13.74 Market Value Per Share $44.55 $50.63 -12.0% $49.81   Share Repurchase Programs (shares in thousands) % Q4'07   Q4'06   Change   Q3'07   Total Shares Repurchased 491 410 19.5% 492 Average Repurchase Price $44.88 $49.49 -9.3% $43.90 Net Shares Repurchased 360 363 -0.8% 354   12/31'07YTD   12/31'06YTD   %Change   Total Shares Repurchased 1,886 1,767 6.8% Average Repurchase Price $46.18 $50.40 -8.4% Net Shares Repurchased 1,529 1,335 14.5%   11. Period-End Balance Sheets. (Unaudited)     (dollars in thousands) 12/31/07     12/31/06     %Change     9/30/07 Assets:             Cash and Money Market Assets $210,097 $185,009 13.6% $219,960 Investment Securities: Available For Sale 532,821 615,525 -13.4% 570,086 Held to Maturity 1,045,288 1,165,092 -10.3% 1,081,009   Loans, gross 2,502,976 2,531,734 -1.1% 2,511,374 Allowance For Loan Losses (52,506)     (55,330) -5.1% (52,938) Loans, net 2,450,470     2,476,404 -1.0% 2,458,436   Premises and Equipment 28,380 30,188 -6.0% 28,666 Identifiable Intangibles 18,429 22,082 -16.5% 19,322 Goodwill 121,719 121,719 0.0% 121,719 Interest Receivable and Other 151,755     153,316 -1.0% 157,818   Total Assets $4,558,959     $4,769,335 -4.4% $4,657,016 Liabilities and Shareholders' Equity: Deposits: Noninterest Bearing $1,245,500 $1,341,019 -7.1% $1,251,572 Interest-Bearing Transaction 544,411 588,668 -7.5% 549,263 Savings 760,006 865,268 -12.2% 806,797 Time 714,873     721,779 -1.0% 732,582 Total Deposits 3,264,790     3,516,734 -7.2% 3,340,214   Short-Term Borrowed Funds 798,599 731,977 9.1% 815,101 Debt Financing and Notes 36,773 36,920 -0.4% 36,809 Interest Payable and Other 64,194     59,469 7.9% 61,241 Total Liabilities 4,164,356     4,345,100 -4.2% 4,253,365   Shareholders' Equity: Paid-In Capital 337,201 344,263 -2.1% 337,627 Accumulated Other Comprehensive (Loss) Income (4,520) 1,850 -344.3% (412) Retained Earnings 61,922     78,122 -20.7% 66,436 Total Shareholders' Equity 394,603     424,235 -7.0% 403,651   Total Liabilities and Shareholders' Equity $4,558,959     $4,769,335 -4.4% $4,657,016   12. Income Statements. (Unaudited)   (dollars in thousands except per-share amounts) Q4'07   Q4'06   %Change   Q3'07 Interest Income:       Loans $40,214 $41,198 -2.4% $41,134 Money Market Assets 3 2 n/m 2 Investment Securities: Available for Sale 6,528 7,185 -9.1% 6,713 Held to Maturity 11,116   12,421 -10.5% 11,448 Total Interest Income 57,861   60,806 -4.8% 59,297   Interest Expense: Transaction Deposits 515 486 6.0% 526 Savings Deposits 1,636 1,203 36.0% 1,649 Time Deposits 6,975 7,594 -8.2% 7,791 Short-Term Borrowed Funds 6,779 7,622 -11.1% 8,601 Debt Financing and Notes 578   578 0.0% 578 Total Interest Expense 16,483   17,483 -5.7% 19,145   Net Interest Income 41,378   43,323 -4.5% 40,152   Provision for Credit Losses 475   70 578.6% 75   Noninterest Income: Service Charges 7,422 6,990 6.2% 7,569 Merchant Credit Card 2,817 2,652 6.2% 2,808 ATM Fees & Interchange 709 676 4.9% 723 Debit Card Fees 972 902 7.8% 969 Financial Services Commissions 265 331 -19.9% 383 Mortgage Banking 32 45 -28.9% 29 Trust Fees 303 311 -2.6% 337 Life Insurance Gains 0 0 n/m 0 Other 2,137   1,840 16.2% 1,826 Total Noninterest Income 14,657   13,747 6.6% 14,644 Noninterest Expense: Salaries and Benefits 12,366 12,405 -0.3% 12,587 Occupancy 3,386 3,227 4.9% 3,327 Equipment 934 1,174 -20.4% 1,083 Data Processing 2,202 1,529 44.0% 1,800 Professional Fees 534 614 -13.0% 451 VISA Litigation 2,338 0 n/m 0 Other 5,446   5,543 -1.7% 5,605 Total Noninterest Expense 27,206   24,492 11.1% 24,853   Income Before Income Taxes 28,354 32,508 -12.8% 29,868 Provision for Income Taxes 6,522   8,550 -23.7% 7,846 Net Income $21,832   $23,958 -8.9% $22,022   Average Shares Outstanding 29,213 30,699 -4.8% 29,532 Diluted Shares Outstanding 29,575 31,204 -5.2% 29,915   Per Share Data: Basic Earnings $0.75 $0.78 -4.2% $0.75 Diluted Earnings 0.74 0.77 -3.9% 0.74 Dividends Paid 0.34 0.34 0.0% 0.34   12/31'07YTD   12/31'06YTD   %Change Interest Income: Loans $162,242 $164,756 -1.5% Money Market assets 7 5 n/m Investment Securities: Available for Sale 27,205 29,363 -7.4% Held to Maturity 46,418   52,391 -11.4% Total Interest Income 235,872   246,515 -4.3%   Interest Expense: Transaction Deposits 2,093 1,771 18.2% Savings Deposits 6,144 4,198 46.4% Time Deposits 29,612 27,578 7.4% Short-Term Borrowed Funds 32,393 29,389 10.2% Debt Financing and Notes 2,313   2,332 -0.8% Total Interest Expense 72,555   65,268 11.2%   Net Interest Income 163,317   181,247 -9.9%   Provision for Credit Losses 700   445 57.3%   Noninterest Income: Service Charges 30,235 28,414 6.4% Merchant Credit Card 10,841 9,860 9.9% ATM Fees & Interchange 2,824 2,824 0.0% Debit Card Fees 3,797 3,489 8.8% Financial Services Commissions 1,321 1,368 -3.4% Mortgage Banking 124 179 -30.6% Trust Fees 1,281 1,178 8.7% Life Insurance Gains 822 0 n/m Other 8,033   8,035 0.0% Total Noninterest Income 59,278   55,347 7.1% Noninterest Expense: Salaries and Benefits 50,142 52,302 -4.1% Occupancy 13,346 13,047 2.3% Equipment 4,302 4,949 -13.1% Data Processing 7,069 6,097 15.9% Professional Fees 1,889 2,437 -22.5% VISA Litigation 2,338 0 n/m Other 22,342   22,892 -2.4% Total Noninterest Expense 101,428   101,724 -0.3%   Income Before Income Taxes 120,467 134,425 -10.4% Provision for Income Taxes 30,691   35,619 -13.8% Net Income $89,776   $98,806 -9.1%   Average Shares Outstanding 29,753 31,202 -4.6% Diluted Shares Outstanding 30,165 31,739 -5.0%   Per Share Data: Basic Earnings $3.02 $3.17 -4.7% Diluted Earnings 2.98 3.11 -4.4% Dividends Paid 1.36 1.30 4.6%