Westamerica Bancorporation Reports Quarterly Earnings for Third Quarter 2007

Westamerica Bancorporation (NASDAQ:WABC), parent company of Westamerica Bank, today reported net income of $22.0 million for the third quarter of 2007, compared to $22.4 million for the second quarter of 2007 and $24.2 million for the third quarter of 2006. Third quarter 2007 diluted earnings per share were $0.74, compared to $0.74 for the second quarter of 2007 and $0.77 for the third quarter of 2006. Return on average common equity (ROE) for the third quarter of 2007 was 21.7 percent and return on assets (ROA) was 1.89 percent. For the first nine months of 2007, net income totaled $67.9 million, compared to $74.8 million for the same period in 2006. Diluted earnings per share were $2.24 for the first nine months of 2007, compared to $2.34 for the same period in 2006. For the first nine months of 2007, ROE was 22.2 percent and ROA was 1.95 percent. "Our net interest margin was essentially stable in the third quarter of 2007, down only 0.02 percent from the prior quarter. We expect to begin realizing margin expansion as the September 2007 reduction in the federal funds rate causes interest rate re-pricing of our funding sources at a faster pace than our loans and investments,” said Chairman, President and CEO David Payne. "During the third quarter 2007, our credit quality remained stable in spite of the slowing economy. We have worked hard to achieve the seven percent increase in our non-interest revenues and four percent reduction in our expenses in the first nine months of 2007 compared to the same period last year,” added Payne. Net interest income on a fully taxable equivalent (FTE) basis was $45.6 million in the third quarter of 2007 compared to $46.1 million and $50.2 million in the second quarter of 2007 and the third quarter of 2006, respectively. The third quarter of 2007 net interest margin (FTE) was 4.34 percent, down from 4.36 percent and 4.54 percent in the second quarter of 2007 and the third quarter of 2006, respectively. Noninterest income for the first nine months of 2007 totaled $44.6 million, increased from $41.6 million in the first nine months of 2006. The $3.0 million increase is primarily due to: $1.4 million increase in service charges on deposit accounts. $800 thousand higher merchant credit card income. $200 thousand increase in debit card and ATM fees. $800 thousand gain from life insurance proceeds recognized in the first quarter of 2007. Noninterest expense for the first nine months of 2007 was $74.2 million, reduced from $77.2 million for the first nine months of 2006. The $3.0 million decline is primarily due to: $2.1 million lower personnel costs. $500 thousand reduction in professional fees. $300 thousand lower occupancy and equipment expense. $300 thousand decline in amortization of intangible assets. $300 thousand increase in data processing expenses. The higher data processing expenses and a portion of the lower personnel costs are due to conversion of the Company's item processing function to an outside vendor. This conversion is not expected to change overall expenses by a meaningful amount. The FTE efficiency ratio (expenses divided by revenues) for the first nine months of 2007 was 40.5 percent, compared to 39.1 percent for the first nine months of 2006. The provision for credit losses was $75 thousand for the third quarter of 2007, unchanged from the previous and year ago quarters. At September 30, 2007, shareholders' equity was $404 million and the Company's total regulatory capital ratio was 10.7 percent, which exceeds the "well-capitalized" level of 10 percent under regulatory requirements. During the third quarter 2007, shares repurchased, net of shares issued, totaled 354 thousand shares. At September 30, 2007, 1.8 million shares remain authorized under the Company's stock repurchase plan. Westamerica Bancorporation, through its wholly owned subsidiary Westamerica Bank, operates 87 branches throughout 21 Northern and Central California counties. At September 30, 2007, the company had total assets outstanding of $4.7 billion. Westamerica Bancorporation Web Address: www.westamerica.com FORWARD-LOOKING INFORMATION: The following appears in accordance with the Private Securities Litigation Reform Act of 1995: This press release may contain forward-looking statements about the Company, including descriptions of plans or objectives of its management for future operations, products or services, and forecasts of its revenues, earnings or other measures of economic performance. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements, by their nature, are subject to risks and uncertainties. A number of factors - many of which are beyond the Company's control - could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. The Company's most recent annual and quarterly reports filed with the Securities and Exchange Commission, including the Company's Form 10-Q for the quarter ended June 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.     Public Information October 16, 2007 WESTAMERICA BANCORPORATION       FINANCIAL HIGHLIGHTS September 30, 2007   1. Net Income Summary. (dollars in thousands except per-share amounts) % Q3'07 Q3'06 Change Q2'07   Net Interest Income (FTE) $45,563 $50,198 -9.2 % $46,059 Provision for Credit Losses 75 75 0.0 % 75 Noninterest Income: Life insurance gains 0 0 n/m 0 Other 14,644   13,899   5.4 % 14,700   Total Noninterest Income 14,644   13,899   5.4 % 14,700   Noninterest Expense 24,853   25,403   -2.2 % 24,706   Income Before Taxes (FTE) 35,279 38,619 35,978 Income Tax Provision (FTE) 13,257   14,382   -7.8 % 13,627   Net Income $22,022   $24,237   -9.1 % $22,351     Average Shares Outstanding 29,532 31,070 -5.0 % 29,938 Diluted Average Shares 29,915 31,558 -5.2 % 30,365   Operating Ratios: Basic Earnings Per Share $0.75 $0.78 -4.4 % $0.75 Diluted Earnings Per Share 0.74 0.77 -4.1 % 0.74 Return On Assets 1.89 % 1.98 % 1.92 % Return On Equity 21.7 % 22.7 % 21.9 % Net Interest Margin (FTE) 4.34 % 4.54 % 4.36 % Efficiency Ratio (FTE) 41.3 % 39.6 % 40.7 %   Dividends Paid Per Share $0.34 $0.32 6.3 % $0.34 Dividend Payout Ratio 46 % 42 % 46 % % 9/30'07YTD 9/30'06YTD Change   Net Interest Income (FTE) $138,536 $155,675 -11.0 % Provision for Credit Losses 225 375 -40.0 % Noninterest Income: Life insurance gains 822 0 n/m Other 43,799   41,600   5.3 % Total Noninterest Income 44,621   41,600   7.3 % Noninterest Expense 74,222   77,232   -3.9 % Income Before Taxes (FTE) 108,710 119,668 Income Tax Provision (FTE) 40,766   44,819   -9.0 % Net Income $67,944   $74,849   -9.2 %   Average Shares Outstanding 29,935 31,372 -4.6 % Diluted Average Shares 30,365 31,919 -4.9 %   Operating Ratios: Basic Earnings Per Share $2.27 $2.39 -4.9 % Diluted Earnings Per Share 2.24 2.34 -4.6 % Return On Assets 1.95 % 2.02 % Return On Equity 22.2 % 23.6 % Net Interest Margin (FTE) 4.37 % 4.61 % Efficiency Ratio (FTE) 40.5 % 39.1 % Dividends Paid Per Share $1.02 $0.96 6.3 % Dividend Payout Ratio 46 % 41 % 2. Net Interest Income.           (dollars in thousands) % Q3'07 Q3'06 Change Q2'07   Interest and Fee Income (FTE) $64,708 $67,186 -3.7 % $64,875 Interest Expense 19,145   16,988   12.7 % 18,816   Net Interest Income (FTE) $45,563   $50,198   -9.2 % $46,059     Average Earning Assets $4,198,859 $4,419,609 -5.0 % $4,245,342 Average Interest- Bearing Liabilities 2,905,457 3,045,282 -4.6 % 2,926,090   Yield on Earning Assets (FTE) 6.14 % 6.05 % 6.12 % Cost of Funds 1.80 % 1.51 % 1.76 % Net Interest Margin (FTE) 4.34 % 4.54 % 4.36 % Interest Expense/ Interest-Bearing Liabilities 2.60 % 2.20 % 2.56 % Net Interest Spread (FTE) 3.54 % 3.85 % 3.56 %   % 9/30'07YTD 9/30'06YTD Change   Interest and Fee Income (FTE) $194,608 $203,460 -4.4 % Interest Expense 56,072   47,785   17.3 % Net Interest Income (FTE) $138,536   $155,675   -11.0 %   Average Earning Assets $4,243,610 $4,513,838 -6.0 % Average Interest- Bearing Liabilities 2,930,690 3,129,901 -6.4 %   Yield on Earning Assets (FTE) 6.12 % 6.02 % Cost of Funds 1.75 % 1.41 % Net Interest Margin (FTE) 4.37 % 4.61 % Interest Expense/ Interest-Bearing Liabilities 2.54 % 2.03 % Net Interest Spread (FTE) 3.58 % 3.99 % 3. Loans & Other Earning Assets.     (average volume, dollars in thousands)     %   Q3'07 Q3'06 Change Q2'07   Total Assets $4,628,728 $4,846,286 -4.5 % $4,668,627 Total Earning Assets 4,198,859 4,419,609 -5.0 % 4,245,342 Total Loans 2,514,685 2,555,472 -1.6 % 2,516,114 Commercial Loans 625,490 654,179 -4.4 % 626,270 Commercial RE Loans 871,225 913,919 -4.7 % 883,942 Consumer Loans 1,017,970 987,374 3.1 % 1,005,902 Total Investment Securities 1,684,174 1,864,137 -9.7 % 1,729,228 Available For Sale (Market) 590,749 636,481 -7.2 % 602,667 Held To Maturity 1,093,425 1,227,656 -10.9 % 1,126,561 Unrealized (Loss) (4,974 ) (6,777 ) n/m (18,668 )   Loans/Deposits 74.9 % 70.9 % 74.5 %   % 9/30'07YTD 9/30'06YTD Change   Total Assets $4,670,019 $4,949,661 -5.6 % Total Earning Assets 4,243,610 4,513,838 -6.0 % Total Loans 2,516,939 2,586,547 -2.7 % Commercial Loans 622,778 674,821 -7.7 % Commercial RE Loans 885,172 917,044 -3.5 % Consumer Loans 1,008,989 994,682 1.4 % Total Investment Securities 1,726,671 1,927,291 -10.4 % Available For Sale (Market) 602,009 650,918 -7.5 % Held To Maturity 1,124,662 1,276,373 -11.9 % Unrealized (Loss) (4,974 ) (6,777 ) n/m   Loans/Deposits 74.3 % 70.3 % 4. Deposits & Other Interest-Bearing Liabilities.     (average volume, dollars in thousands)     %   Q3'07 Q3'06 Change Q2'07     Total Deposits $3,358,163 $3,602,566 -6.8 % $3,377,413 Noninterest Demand 1,254,530 1,311,786 -4.4 % 1,267,032 Interest Checking 566,556 602,996 -6.0 % 577,555 Other Low-Cost 810,213 943,396 -14.1 % 824,299 Time greater than $100K 519,488 509,741 1.9 % 496,338 Time less than $100K 207,376 234,647 -11.6 % 212,189 Total Short-Term Borrowings 764,992 717,524 6.6 % 778,841 Fed Funds Purchased 621,165 485,095 28.1 % 625,060 Other Short-Term Funds 143,827 232,429 -38.1 % 153,781 Long-Term Debt 36,832 36,978 -0.4 % 36,868 Shareholders' Equity 402,016 422,735 -4.9 % 408,564   Demand Deposits/ Total Deposits 37.4 % 36.4 % 37.5 % Transaction & Savings Deposits / Total Deposits 78.4 % 79.3 % 79.0 %   % 9/30'07YTD 9/30'06YTD Change   Total Deposits $3,387,591 $3,679,677 -7.9 % Noninterest Demand 1,264,147 1,328,071 -4.8 % Interest Checking 576,970 626,196 -7.9 % 577,555 Other Low-Cost 833,419 976,753 -14.7 % Time greater than $100K 500,389 504,843 -0.9 % Time less than $100K 212,666 243,814 -12.8 % Total Short-Term Borrowings 770,378 740,923 4.0 % Fed Funds Purchased 614,259 527,454 16.5 % Other Short-Term Funds 156,119 213,469 -26.9 % Long-Term Debt 36,868 37,372 -1.3 % Shareholders' Equity 408,497 424,189 -3.7 %   Demand Deposits/ Total Deposits 37.3 % 36.1 % Transaction & Savings Deposits / Total Deposits 79.0 % 79.7 % 5. Interest Yields Earned & Rates Paid.     (dollars in thousands)     Q3'07     Average Income/ Yield/ Volume Expense Rate   Interest Income Earned Total Earning Assets (FTE) $4,198,859 $64,708 6.14 % Total Loans (FTE) 2,514,685 42,310 6.68 % Commercial Loans (FTE) 625,490 12,719 8.07 % Commercial RE Loans 871,225 15,602 7.10 % Consumer Loans 1,017,970 13,989 5.45 % Total Investments (FTE) 1,684,174 22,398 5.32 %   Interest Expense Paid Total Earning Assets 4,198,859 19,145 1.80 % Total Interest-Bearing Liabilities 2,905,457 19,145 2.60 % Total Interest-Bearing Deposits 2,103,633 9,966 1.88 % Interest-Bearing Transaction 566,556 526 0.37 % Savings 810,213 1,649 0.81 % Time less than $100K 207,376 1,755 3.36 % Time greater than $100K 519,488 6,036 4.61 % Total Short-Term Borrowings 764,992 8,601 4.40 % Fed Funds Purchased 621,165 8,171 5.15 % Other Short-Term Funds 143,827 430 1.18 % Long-Term Debt 36,832 578 6.28 %   Net Interest Margin (FTE) $45,563 4.34 %     Q3'06   Average Income/ Yield/ Volume Expense Rate   Interest Income Earned Total Earning Assets (FTE) $4,419,609 $67,186 6.05 % Total Loans (FTE) 2,555,472 42,588 6.61 % Commercial Loans (FTE) 654,179 13,150 7.98 % Commercial RE Loans 913,919 16,396 7.12 % Consumer Loans 987,374 13,042 5.24 % Total Investments (FTE) 1,864,137 24,598 5.28 %   Interest Expense Paid Total Earning Assets 4,419,609 16,988 1.51 % Total Interest-Bearing Liabilities 3,045,282 16,988 2.20 % Total Interest-Bearing Deposits 2,290,780 9,011 1.56 % Interest-Bearing Transaction 602,996 430 0.28 % Savings 943,396 1,173 0.49 % Time less than $100K 234,647 1,722 2.91 % Time greater than $100K 509,741 5,686 4.43 % Total Short-Term Borrowings 717,524 7,399 4.04 % Fed Funds Purchased 485,095 6,508 5.25 % Other Short-Term Funds 232,429 891 1.52 % Long-Term Debt 36,978 578 6.25 %   Net Interest Margin (FTE) $50,198 4.54 % 6. Noninterest Income.   (dollars in thousands except per-share amounts)       %   Q3'07 Q3'06 Change Q2'07   Service Charges on Deposits $7,569 $7,155 5.8 % $7,716 Merchant Credit Card Income 2,808 2,430 15.5 % 2,768 ATM Fees & Interchange 723 753 -4.0 % 714 Debit Card Fees 969 883 9.8 % 960 Financial Services Fees 383 377 1.8 % 363 Mortgage Banking Income 29 36 -17.4 % 33 Trust Fees 337 298 13.2 % 304 Other Income 1,826   1,967   -7.2 % 1,842   Sub-total 14,644 13,899 5.4 % 14,700 Life Insurance Gains 0   0   n/m 0   Total Noninterest Income $14,644   $13,899   5.4 % $14,700     Total Revenue (FTE) $60,207 $64,097 -6.1 % $60,759 Noninterest Income/Revenue 24.3 % 21.7 % 24.2 % Service Charges/Deposits (a) 0.89 % 0.79 % 0.92 % Total Revenues Per Share (a) $8.09 $8.18 -1.2 % $8.14   % 9/30'07YTD 9/30'06YTD Change   Service Charges on Deposits $22,813 $21,424 6.5 % Merchant Credit Card Income 8,024 7,208 11.3 % ATM Fees & Interchange 2,114 2,148 -1.6 % Debit Card Fees 2,825 2,587 9.2 % Financial Services Fees 1,057 1,037 1.9 % Mortgage Banking Income 92 134 -31.7 % Trust Fees 978 867 12.8 % Other Income 5,896   6,195   -4.8 % Sub-total 43,799 41,600 5.3 % Life Insurance Gains 822   0   n/m Total Noninterest Income $44,621   $41,600   7.3 %   Total Revenue (FTE) $183,157 $197,275 -7.2 % Noninterest Income/Revenue 24.4 % 21.1 % Service Charges/Deposits (a) 0.90 % 0.78 % Total Revenues Per Share (a) $8.18 $8.41 -2.7 %   (a) Annualized 7. Noninterest Expense.     (dollars in thousands)     %   Q3'07 Q3'06 Change Q2'07   Salaries & Benefits $12,587 $13,080 -3.8 % $12,622 Occupancy 3,327 3,321 0.2 % 3,342 Equipment 1,083 1,194 -9.3 % 1,147 Data Processing 1,800 1,503 19.8 % 1,543 Courier 854 904 -5.6 % 857 Postage 404 410 -1.3 % 396 Telephone 342 371 -7.8 % 354 Professional Fees 451 532 -15.2 % 409 Stationery & Supplies 323 307 5.1 % 269 Loan Expense 217 253 -14.3 % 171 Operational Losses 228 129 76.4 % 171 Amortization of Identifiable Intangibles 893 1,016 -12.1 % 893 Other Operating 2,344   2,383   -1.7 % 2,532   Total Noninterest Expense $24,853   $25,403   -2.2 % $24,706     FTE Staff 876 901 -2.8 % 910   Average Assets per FTE Staff $5,284 $5,379 -1.8 % $5,130 Revenues per FTE Staff (a) $273 $282 -3.4 % $268 Noninterest Expense/ Earning Assets (a) 2.35 % 2.28 % 2.33 % Noninterest Expense/Revenues 41.3 % 39.6 % 40.7 %   % 9/30'07YTD 9/30'06YTD Change   Salaries & Benefits $37,776 $39,897 -5.3 % Occupancy 9,960 9,820 1.4 % Equipment 3,367 3,775 -10.8 % Data Processing 4,866 4,568 6.5 % Courier 2,559 2,736 -6.5 % Postage 1,211 1,217 -0.5 % Telephone 1,055 1,269 -16.8 % Professional Fees 1,355 1,823 -25.6 % Stationery & Supplies 906 849 6.8 % Loan Expense 555 683 -18.8 % Operational Losses 559 572 -2.4 % Amortization of Identifiable Intangibles 2,760 3,071 -10.1 % Other Operating 7,293   6,952   4.9 % Total Noninterest Expense $74,222   $77,232   -3.9 %   FTE Staff 893 915 -2.4 %   Average Assets per FTE Staff $5,230 $5,409 -3.3 % Revenues per FTE Staff (a) $274 $288 -4.9 % Noninterest Expense/ Earning Assets (a) 2.34 % 2.29 % Noninterest Expense/Revenues 40.5 % 39.1 %   (a) Annualized 8. Provision for Credit Losses.     (dollars in thousands)     %   Q3'07 Q3'06 Change Q2'07   Provision for Credit Losses $75 $75 0.0 % $75 Gross Loan Losses 1,031 1,011 1.9 % 2,244 Net Loan Losses 610 421 44.9 % 1,491 Recoveries/Gross Losses 41 % 58 % 34 % Average Total Loans $2,514,685 $2,555,472 -1.6 % $2,516,114 Net Loan Losses/Loans (a) 0.10 % 0.07 % 0.24 % Provision for Credit Losses/Loans (a) 0.01 % 0.01 % 0.01 % Provision for Credit Losses/ Net Loan Losses 12.3 % 17.8 % 5.0 %   % 9/30'07YTD 9/30'06YTD Change   Provision for Credit Losses $225 $375 -40.0 % Gross Loan Losses 4,519 2,775 62.9 % Net Loan Losses 2,617 886 195.6 % Recoveries/Gross Losses 42 % 68 % Average Total Loans $2,516,939 $2,586,547 -2.7 % Net Loan Losses/Loans (a) 0.14 % 0.05 % Provision for Credit Losses/Loans (a) 0.01 % 0.02 % Provision for Credit Losses/ Net Loan Losses 8.6 % 42.3 %   (a) Annualized 9. Credit Quality.     (dollars in thousands)     %   9/30/07   9/30/06   Change 6/30/07     Nonaccrual Loans: Nonperforming $3,132 $1,162 169.6 % $3,140 Performing 1,695   3,889   -56.4 % 1,898   Total Nonaccrual Loans 4,827 5,051 -4.4 % 5,038 Past Due Accruing Loans 251   252   -0.4 % 179   Total Nonperforming Loans 5,078 5,303 -4.2 % 5,217 Repossessed Collateral 613   656   -6.6 % 613   Total Nonperforming Loans & Repossessed Collateral $5,691   $5,959   -4.5 % $5,830     Classified Loans $21,403   $24,111   -11.2 % $22,498     Allowance for Loan Losses $52,938 $55,338 -4.3 % $53,473 Total Loans Outstanding 2,511,374 2,552,929 -1.6 % 2,521,738 Total Assets 4,657,016 4,844,116 -3.9 % 4,647,069   Allowance for Loan Losses/ Total Loans 2.11 % 2.18 % 2.12 % Nonperforming Loans/ Total Loans 0.20 % 0.21 % 0.21 % Nonperforming Loans & Repossessed Collateral/Total Assets 0.12 % 0.12 % 0.13 % Allowance for Loan Losses/ Nonperforming Loans 1042 % 1044 % 1025 % Allowance for Loan Losses/ Classified Loans 247 % 230 % 238 % Classified Loans/ (Equity + Allowance for Loan Losses) 4.7 % 5.0 % 4.9 % 10. Capital.   (dollars in thousands, except per-share amounts)       %   9/30/07   9/30/06   Change 6/30/07     Shareholders' Equity $403,651 $428,732 -5.9 % $407,982 Tier I Regulatory Capital 283,015 300,344 -5.8 % 286,818 Total Regulatory Capital 322,598 341,207 -5.5 % 326,582   Total Assets 4,657,016 4,844,116 -3.9 % 4,647,069 Risk-Adjusted Assets 3,017,668 3,094,942 -2.5 % 3,014,947   Shareholders' Equity/ Total Assets 8.67 % 8.85 % 8.78 % Shareholders' Equity/ Total Loans 16.07 % 16.79 % 16.18 % Tier I Capital/Total Assets 6.08 % 6.20 % 6.17 % Tier I Capital/ Risk-Adjusted Assets 9.38 % 9.70 % 9.51 % Total Capital/ Risk-Adjusted Assets 10.69 % 11.02 % 10.83 % Shares Outstanding 29,378 30,910 -5.0 % 29,732 Book Value Per Share $13.74 $13.87 -0.9 % $13.72 Market Value Per Share $49.81 $50.51 -1.4 % $44.24   Share Repurchase Programs (shares in thousands) % Q3'07 Q3'06 Change Q2'07   Total Shares Repurchased 492 436 13.0 % 456 Average Repurchase Price $43.90 $47.98 -8.5 % $46.77 Net Shares Repurchased 354 291 21.6 % 426   % 9/30'07YTD 9/30'06YTD Change   Total Shares Repurchased 1,396 1,356 2.9 % Average Repurchase Price $46.63 $50.67 -8.0 % Net Shares (Issued) Repurchased 1,169 972 20.3 % 11. Period-End Balance Sheets.     (dollars in thousands)     %   9/30/07   9/30/06   Change 6/30/07   Assets: Cash and Money Market Assets $219,960 $192,175 14.5 % $164,390   Investment Securities: Available For Sale 570,086 617,736 -7.7 % 582,959 Held to Maturity 1,081,009 1,211,589 -10.8 % 1,104,132   Loans, gross 2,511,374 2,552,929 -1.6 % 2,521,738 Allowance For Loan Losses (52,938 ) (55,338 ) -4.3 % (53,473 ) Loans, net 2,458,436   2,497,591   -1.6 % 2,468,265     Premises and Equipment 28,666 30,979 -7.5 % 29,169 Identifiable Intangibles 19,322 23,098 -16.3 % 20,215 Goodwill 121,719 121,719 0.0 % 121,719 Interest Receivable and Other 157,818   149,229   5.8 % 156,220     Total Assets $4,657,016   $4,844,116   -3.9 % $4,647,069     Liabilities and Shareholders' Equity: Deposits: Noninterest Bearing $1,251,572 $1,298,519 -3.6 % $1,266,941 Interest-Bearing Transaction 549,263 581,705 -5.6 % 554,036 Savings 806,797 926,262 -12.9 % 809,791 Time 732,582   744,645   -1.6 % 704,264   Total Deposits 3,340,214   3,551,131   -5.9 % 3,335,032     Short-Term Borrowed Funds 815,101 768,841 6.0 % 809,261 Debt Financing and Notes 36,809 36,956 -0.4 % 36,846 Interest Payable and Other 61,241   58,456   4.8 % 57,948   Total Liabilities 4,253,365   4,415,384   -3.7 % 4,239,087     Shareholders' Equity: Paid-In Capital 337,627 346,603 -2.6 % 338,290 Accumulated Other Comprehensive (Loss) Income (412 ) 1,805 n/m   (777 ) Retained Earnings 66,436   80,324   -17.3 % 70,469   Total Shareholders' Equity 403,651   428,732   -5.9 % 407,982     Total Liabilities and Shareholders' Equity $4,657,016   $4,844,116   -3.9 % $4,647,069   12. Income Statements.   (dollars in thousands except per-share amounts)       %   Q3'07 Q3'06 Change Q2'07 Interest Income: Loans $41,134 $41,292 -0.4 % $40,727 Money Market Assets 2 1 n/m 2 Investment Securities: Available for Sale 6,713 7,227 -7.1 % 6,841 Held to Maturity 11,448 12,845 -10.9 % 11,771 Total Interest Income 59,297 61,365 -3.4 % 59,341   Interest Expense: Transaction Deposits 526 430 22.4 % 528 Savings Deposits 1,649 1,173 40.6 % 1,452 Time Deposits 7,791 7,408 5.2 % 7,540 Short-Term Borrowed Funds 8,601 7,399 16.2 % 8,718 Debt Financing and Notes 578 578 0.0 % 578 Total Interest Expense 19,145 16,988 12.7 % 18,816   Net Interest Income 40,152 44,377 -9.5 % 40,525   Provision for Credit Losses 75 75 0.0 % 75   Noninterest Income: Service Charges 7,569 7,155 5.8 % 7,716 Merchant Credit Card 2,808 2,430 15.5 % 2,768 Financial Services 383 377 1.8 % 363 Mortgage Banking 29 36 -17.4 % 33 Trust Fees 337 298 13.2 % 304 Life Insurance Gains 0 0 n/m 0 Other 3,518 3,603 -2.4 % 3,516 Total Noninterest Income 14,644 13,899 5.4 % 14,700   Noninterest Expense: Salaries and Benefits 12,587 13,080 -3.8 % 12,622 Occupancy 3,327 3,321 0.2 % 3,342 Equipment 1,083 1,194 -9.3 % 1,147 Data Processing 1,800 1,503 19.8 % 1,543 Professional Fees 451 532 -15.2 % 409 Other 5,605 5,773 -2.9 % 5,643 Total Noninterest Expense 24,853 25,403 -2.2 % 24,706   Income Before Income Taxes 29,868 32,798 -8.9 % 30,444 Provision for Income Taxes 7,846 8,561 -8.3 % 8,093 Net Income $22,022 $24,237 -9.1 % $22,351   Average Shares Outstanding 29,532 31,070 -5.0 % 29,938 Diluted Shares Outstanding 29,915 31,558 -5.2 % 30,365   Per Share Data: Basic Earnings $0.75 $0.78 -4.4 % $0.75 Diluted Earnings 0.74 0.77 -4.1 % 0.74 Dividends Paid 0.34 0.32 6.3 % 0.34   % 9/30'07YTD 9/30'06YTD Change Interest Income: Loans $122,027 $123,558 -1.2 % Money Market assets 5 3 n/m Investment Securities: Available for Sale 20,676 22,179 -6.8 % Held to Maturity 35,303 39,970 -11.7 % Total Interest Income 178,011 185,710 -4.1 %   Interest Expense: Transaction Deposits 1,577 1,285 22.8 % Savings Deposits 4,509 2,995 50.6 % Time Deposits 22,637 19,985 13.3 % Short-Term Borrowed Funds 25,614 21,766 17.7 % Debt Financing and Notes 1,735 1,754 -1.1 % Total Interest Expense 56,072 47,785 17.3 %   Net Interest Income 121,939 137,925 -11.6 %   Provision for Credit Losses 225 375 -40.0 %   Noninterest Income: Service Charges 22,813 21,424 6.5 % Merchant Credit Card 8,024 7,208 11.3 % Financial Services 1,057 1,037 1.9 % Mortgage Banking 92 134 -31.7 % Trust Fees 978 867 12.8 % Life Insurance Gains 822 0 n/m Other 10,835 10,930 -0.9 % Total Noninterest Income 44,621 41,600 7.3 %   Noninterest Expense: Salaries and Benefits 37,776 39,897 -5.3 % Occupancy 9,960 9,820 1.4 % Equipment 3,367 3,775 -10.8 % Data Processing 4,866 4,568 6.5 % Professional Fees 1,355 1,823 -25.6 % Other 16,898 17,349 -2.6 % Total Noninterest Expense 74,222 77,232 -3.9 %   Income Before Income Taxes 92,113 101,918 -9.6 % Provision for Income Taxes 24,169 27,069 -10.7 % Net Income $67,944 $74,849 -9.2 %   Average Shares Outstanding 29,935 31,372 -4.6 % Diluted Shares Outstanding 30,365 31,919 -4.9 %   Per Share Data: Basic Earnings $2.27 $2.39 -4.9 % Diluted Earnings 2.24 2.34 -4.6 % Dividends Paid 1.02 0.96 6.3 %