Westamerica Bancorporation Reports Second Quarter 2009 Results

Westamerica Bancorporation (NASDAQ: WABC), parent company of Westamerica Bank, today reported second quarter 2009 net income applicable to common equity of $22.1 million, or $0.75 diluted earnings per common share (EPS), a return on average common equity of 19 percent (annualized). Second quarter 2009 results include FDIC insurance assessments of $3.2 million, compared to $157 thousand in the prior quarter. The increase in FDIC assessments was equivalent to $0.06 EPS. Second quarter 2009 results include the operations of the former County Bank, which was acquired from the Federal Deposit Insurance Corporation (FDIC) on February 6, 2009.

"The integration of the acquired County Bank is proceeding in accordance with our plans. We expect branch and systems integrations to be completed in the third quarter 2009. For the second quarter 2009, our net interest margin of 5.34 percent was stable with the prior quarter’s margin of 5.35 percent. Westamerica’s credit management practices remain conservative; our $43 million allowance for loan losses is equivalent to 143 percent of non-performing loans which are not covered by FDIC loss sharing agreements,” said Chairman, President and CEO David Payne. "Our common shareholders’ equity grew $22.5 million in the second quarter 2009. Westamerica intends to redeem a portion of the preferred stock issued to the United States Treasury this month, which will increase returns to common shareholders,” Payne added.

Second quarter 2009 results compare to first quarter of 2009 net income applicable to common equity of $52.2 million and EPS of $1.80. First quarter 2009 results include a gain recognized under Financial Accounting Standard 141R and a federal income tax refund which, combined, were equivalent to $1.00 EPS. The estimated fair value of County Bank assets purchased exceeded the estimated fair value of liabilities assumed, which resulted in the FAS 141R gain.

Net interest income on a fully taxable equivalent basis (FTE) was $62.3 million for the second quarter of 2009, compared to $59.4 million (FTE) for the prior quarter and $49.7 million (FTE) reported for the second quarter of 2008. The second quarter 2009 annualized net interest margin was 5.34 percent (FTE), compared to 5.35 percent (FTE) for the prior quarter and 5.16 percent (FTE) for the second quarter of 2008. Net interest income for the six months ended June 30, 2009 was $121.7 million (FTE) generating an annualized margin of 5.35 percent (FTE), compared to net interest income of $97.7 million (FTE) and an annualized margin of 4.97 percent (FTE) for the six months ended June 30, 2008. The improved net interest income is attributable to earning asset growth from the County Bank acquisition and a higher net interest margin. The net interest margin has increased in the first half of 2009 relative to the first half of 2008 as lower short-term interest rates caused funding costs to decline at a faster pace than earning asset yields.

The provision for loan losses was $4.4 million for the six months ended June 30, 2009 compared to $1.2 million for the six months ended June 30, 2008. Net loan charge-offs for the six months ended June 30, 2009 totaled $5.7 million, or 0.49 percent (annualized) of average non-covered loans, compared to $2.7 million, or 0.22 percent (annualized) of average non-covered loans for the six months ended June 30, 2008. Non-covered non-performing loans at June 30, 2009 totaled $30.2 million, increased from $11.7 million at March 31, 2009. The increase in non-covered non-performing loans is primarily due to one residential construction loan relationship with four single family properties ($6 million), seven consumer mortgages ($3.6 million), and one commercial real estate relationship ($3.4 million). Non-covered classified loans, which include loans graded "substandard," "doubtful" and "loss" using regulatory guidelines, totaled $53.4 million at June 30, 2009 compared to $41.5 million at March 31, 2009.

Noninterest income for the second quarter 2009 was $16.4 million, compared to $64.0 million in the first quarter 2009 which included the $48.8 million FAS 141R gain. Service charges on deposit accounts, ATM fees and debit card fees have increased following the assumption of County Bank deposit accounts.

Noninterest expense for the second quarter of 2009 totaled $38.7 million, compared to $34.1 million for the prior quarter and $26.3 million for the second quarter of 2008. The increase in expenses is primarily due to the acquisition of County Bank and higher FDIC insurance assessments. FDIC insurance assessments were $3.2 million, $157 thousand, and $133 thousand in the second quarter 2009, first quarter 2009, and second quarter 2008, respectively. Management anticipates quarterly FDIC insurance assessments of $1.5 million beginning in the third quarter, subject to changes in the assessment rate structure and any additional special assessments. Relative to the second quarter 2009, Management expects lower noninterest expenses, excluding FDIC insurance assessments, in the third and fourth quarters of 2009 as County Bank branch and systems integrations are completed in the third quarter 2009.

Shareholders' equity at June 30, 2009 was $559 million, increased from $537 million at March 31, 2009. The increase in shareholders’ equity is attributable to the retention of earnings in excess of shareholder dividends and the exercise of stock options. Westamerica paid a regular quarterly dividend of $0.35 per common share in May 2009, totaling $10.2 million. At June 30, 2009, Westamerica Bancorporation’s total regulatory capital ratio was 15.9 percent and Westamerica Bank’s total regulatory capital ratio was 15.1 percent; both measurements exceed the "well-capitalized" level of ten percent under regulatory requirements.

Westamerica Bancorporation, through its wholly owned subsidiary Westamerica Bank, operates commercial banking offices throughout Northern and Central California. At June 30, 2009, the Company's total assets and total loans outstanding were $5.2 billion and $3.4 billion, respectively.

Westamerica Bancorporation Web Address: www.westamerica.com

FORWARD-LOOKING INFORMATION:

This press release contains forward-looking statements about Westamerica Bancorporation for which it claims the protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of plans, objectives and expectations of the Company or its management or board of directors, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as "believes", "anticipates", "expects", "intends", "targeted", "projected", "continue", "remain", "will", "should", "may" and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

These forward-looking statements are based on Management’s current knowledge and belief and include information concerning the Company’s possible or assumed future financial condition and results of operations. A number of factors, some of which are beyond the Company’s ability to predict or control, could cause future results to differ materially from those contemplated. The Company’s most recent quarterly report for the quarter ended March 31, 2009 and annual report for the year ended December 31, 2008 filed with the Securities and Exchange Commission describe some of these factors. These factors include but are not limited to (1) the length and severity of current difficulties in the national and California economies and the effects of federal and state government efforts to address those difficulties; (2) continued low liquidity levels in capital markets; (3) fluctuations in asset prices including, but not limited to, stocks, bonds, real estate, and commodities; (4) the effect of acquisitions and integration of acquired businesses including the recently acquired County Bank; (5) economic uncertainty created by terrorist threats and attacks on the United States, the actions taken in response, and the uncertain effect of these events on the national and regional economies; (6) changes in the interest rate environment; (7) changes in the regulatory environment; (8) significantly increasing competitive pressure in the banking industry; (9) operational risks including data processing system failures or fraud; (10) volatility of rate sensitive loans, deposits and investments; (11) asset/liability management risks and liquidity risks; and (12) changes in the securities markets. The Company undertakes no obligation to update any forward-looking statements to reflect circumstances or events that occur after the date forward-looking statements are made.

Forward-looking statements speak only as of the date they are made.

		Public Information July 14, 2009
WESTAMERICA BANCORPORATION
FINANCIAL HIGHLIGHTS
June 30, 2009
1. Net Income Summary.
		(dollars in thousands except per-share amounts)
								%
		Q2'09			Q2'08			Change			Q1'09
	Net Interest Income (FTE)	$62,318			$49,731			25.3	%		$59,359
	Provision for Loan Losses	2,600			600			333.3	%		1,800
	Noninterest Income:
	Net Loss From Equity Securities	0			(18,178	)		n/m			0
	FAS 141R Gain	0			0			n/m			48,844
	Other	16,386			14,335			14.3	%		15,124
	Total Noninterest Income (Loss)	16,386			(3,843	)		n/m			63,968
	Noninterest Expense:
	VISA Litigation	0			0			n/m			0
	Other	38,666			26,337			46.8	%		34,123
	Total Noninterest Expense	38,666			26,337			46.8	%		34,123
	Income Before Taxes (FTE)	37,438			18,951			97.5	%		87,404
	Income Tax Provision (FTE)	14,255			6,749			111.2	%		34,579
	Net Income	23,183			12,202			90.0	%		52,825
	Preferred Stock Dividends and
	Discount Accretion	1,107			0			n/m			578
	Net Income Applicable to
	Common Equity	$22,076			$12,202			80.9	%		$52,247
	Average Common Shares Outstanding	29,126			28,916			0.7	%		28,876
	Diluted Average Common Shares	29,403			29,392			0.0	%		29,105
	Operating Ratios:
	Basic Earnings Per Common Share	$0.76			$0.42			81.0	%		$1.81
	Diluted Earnings Per Common Share	0.75			0.42			78.6	%		1.80
	Return On Assets (a)	1.68	%		1.15	%					4.24	%
	Return On Common Equity (a)	19.0	%		11.9	%					48.0	%
	Net Interest Margin (FTE) (a)	5.34	%		5.16	%					5.35	%
	Efficiency Ratio (FTE)	49.1	%		57.4	%					27.7	%
	Dividends Paid Per Common Share	$0.35			$0.35			0.0	%		$0.36
	Common Dividend Payout Ratio	47	%		83	%					20	%
	(a) Annualized
								%
		6/30'09YTD			6/30'08YTD			Change
	Net Interest Income (FTE)	$121,677			$97,713			24.5	%
	Provision for Loan Losses	4,400			1,200			266.7	%
	Noninterest Income:
	Net Loss From Equity Securities	0			(12,480	)		n/m
	FAS 141R Gain	48,844			0			n/m
	Other	31,510			28,015			12.5	%
	Total Noninterest Income	80,354			15,535			n/m
	Noninterest Expense:
	VISA Litigation	0			(2,338	)		n/m
	Other	72,789			51,731			40.7	%
	Total Noninterest Expense	72,789			49,393			47.4	%
	Income Before Taxes (FTE)	124,842			62,655			99.3	%
	Income Tax Provision (FTE)	48,834			23,675			106.3	%
	Net Income	76,008			38,980			95.0	%
	Preferred Stock Dividends and
	Discount Accretion	1,685			0			n/m
	Net Income Applicable to
	Common Equity	$74,323			$38,980			90.7	%
	Average Common Shares Outstanding	29,002			28,888			0.4	%
	Diluted Average Common Shares	29,254			29,301			-0.2	%
	Operating Ratios:
	Basic Earnings Per Common Share	$2.56			$1.35			89.6	%
	Diluted Earnings Per Common Share	2.54			1.33			91.0	%
	Return On Assets (a)	2.92	%		1.80	%
	Return On Common Equity (a)	33.1	%		19.4	%
	Net Interest Margin (FTE) (a)	5.35	%		4.97	%
	Efficiency Ratio (FTE)	36.0	%		43.6	%
	Dividends Paid Per Common Share	$0.71			$0.69			2.9	%
	Common Dividend Payout Ratio	28	%		52	%
	(a) Annualized

2. Net Interest Income.
		(dollars in thousands)
								%
		Q2'09			Q2'08			Change		Q1'09
	Interest and Fee Income (FTE)	$68,063			$58,117			17.1	%	$64,192
	Interest Expense	5,745			8,386			-31.5	%	4,833
	Net Interest Income (FTE)	$62,318			$49,731			25.3	%	$59,359
	Average Earning Assets	$4,678,615			$3,865,110			21.0	%	$4,475,371
	Average Interest-
	Bearing Liabilities	3,311,650			2,590,406			27.8	%	3,155,685
	Yield on Earning Assets (FTE) (a)	5.83	%		6.03	%				5.79	%
	Cost of Funds (a)	0.49	%		0.87	%				0.44	%
	Net Interest Margin (FTE) (a)	5.34	%		5.16	%				5.35	%
	Interest Expense/
	Interest-Bearing Liabilities (a)	0.70	%		1.30	%				0.62	%
	Net Interest Spread (FTE) (a)	5.13	%		4.73	%				5.17	%
								%
		6/30'09YTD			6/30'08YTD			Change
	Interest and Fee Income (FTE)	$132,255			$118,927			11.2	%
	Interest Expense	10,578			21,214			-50.1	%
	Net Interest Income (FTE)	$121,677			$97,713			24.5	%
	Average Earning Assets	$4,577,554			$3,946,665			16.0	%
	Average Interest-
	Bearing Liabilities	3,234,098			2,680,966			20.6	%
	Yield on Earning Assets (FTE) (a)	5.82	%		6.05	%
	Cost of Funds (a)	0.47	%		1.08	%
	Net Interest Margin (FTE) (a)	5.35	%		4.97	%
	Interest Expense/
	Interest-Bearing Liabilities (a)	0.66	%		1.58	%
	Net Interest Spread (FTE) (a)	5.16	%		4.47	%
	(a) Annualized

3. Loans & Other Earning Assets.
		(average volume, dollars in thousands)
								%
		Q2'09			Q2'08			Change			Q1'09
	Total Assets	$5,265,101			$4,257,325			23.7	%		$4,998,964
	Total Earning Assets	4,678,615			3,865,110			21.0	%		4,475,371
	Total Loans	3,383,654			2,439,062			38.7	%		3,135,944
	Commercial Loans	944,257			609,082			55.0	%		885,232
	Commercial RE Loans	1,361,420			843,793			61.3	%		1,191,260
	Consumer Loans	1,077,977			986,187			9.3	%		1,059,452
	Total Investment Securities	1,294,961			1,426,048			-9.2	%		1,339,427
	Available For Sale (Market)	433,065			433,190			0.0	%		399,824
	Held To Maturity	861,896			992,858			-13.2	%		939,603
	Unrealized Gain (Loss)	243			(3,053	)		n/m			1,768
	Loans/Deposits	80.5	%		76.6	%					81.2	%
								%
		6/30'09YTD			6/30'08YTD			Change
	Total Assets	$5,133,941			$4,345,630			18.1	%
	Total Earning Assets	4,577,554			3,946,665			16.0	%
	Total Loans	3,260,483			2,458,364			32.6	%
	Commercial Loans	914,907			613,037			49.2	%
	Commercial RE Loans	1,276,810			847,149			50.7	%
	Consumer Loans	1,068,766			998,178			7.1	%
	Total Investment Securities	1,317,071			1,488,301			-11.5	%
	Available For Sale (Market)	416,670			475,704			-12.4	%
	Held To Maturity	900,401			1,012,597			-11.1	%
	Unrealized Gain (Loss)	243			(3,053	)		n/m
	Loans/Deposits	80.8	%		76.9	%

4. Deposits & Other Interest-Bearing Liabilities.
		(average volume, dollars in thousands)
								%
		Q2'09			Q2'08			Change			Q1'09
	Total Deposits	$4,202,607			$3,183,812			32.0	%		$3,862,435
	Noninterest Demand	1,333,412			1,186,921			12.3	%		1,286,013
	Interest Checking	741,084			547,574			35.3	%		667,425
	Savings	968,048			763,575			26.8	%		877,729
	Time greater than $100K	629,646			492,932			27.7	%		664,474
	Time less than $100K	530,417			192,810			175.1	%		366,794
	Total Short-Term Borrowings	415,871			556,794			-25.3	%		552,645
	Fed Funds Purchased	119,837			414,632			-71.1	%		314,856
	Other Short-Term Funds	296,034			142,162			108.2	%		237,789
	Long-Term Debt	26,584			36,721			-27.6	%		26,618
	Shareholders' Equity	547,816			412,263			32.9	%		485,054
	Demand Deposits/
	Total Deposits	31.7	%		37.3	%					33.3	%
	Transaction & Savings
	Deposits / Total Deposits	72.4	%		78.5	%					73.3	%
								%
		6/30'09YTD			6/30'08YTD			Change
	Total Deposits	$4,033,461			$3,198,079			26.1	%
	Noninterest Demand	1,309,844			1,193,262			9.8	%
	Interest Checking	704,458			546,995			28.8	%
	Savings	923,138			766,009			20.5	%
	Time greater than $100K	642,747			496,934			29.3	%
	Time less than $100K	453,274			194,879			132.6	%
	Total Short-Term Borrowings	483,880			639,410			-24.3	%
	Fed Funds Purchased	216,807			490,024			-55.8	%
	Other Short-Term Funds	267,073			149,386			78.8	%
	Long-Term Debt	26,601			36,739			-27.6	%
	Shareholders' Equity	516,608			403,268			28.1	%
	Demand Deposits/
	Total Deposits	32.5	%		37.3	%
	Transaction & Savings
	Deposits / Total Deposits	72.8	%		78.4	%

5. Interest Yields Earned & Rates Paid.
		(dollars in thousands)
		Q2'09
		Average		Income/		Yield (a) /
		Volume		Expense		Rate
	Interest Income Earned
	Total Earning Assets (FTE)	$4,678,615		$68,063		5.83	%
	Total Loans (FTE)	3,383,654		50,611		6.00	%
	Commercial Loans (FTE)	944,257		13,327		5.66	%
	Commercial RE Loans	1,361,420		22,316		6.57	%
	Consumer Loans	1,077,977		14,968		5.57	%
	Total Investments (FTE)	1,294,961		17,452		5.39	%
	Interest Expense Paid
	Total Earning Assets	4,678,615		5,745		0.49	%
	Total Interest-Bearing Liabilities	3,311,650		5,745		0.70	%
	Total Interest-Bearing Deposits	2,869,195		4,468		0.62	%
	Interest-Bearing Transaction	741,084		293		0.16	%
	Savings	968,048		1,059		0.44	%
	Time less than $100K	530,417		1,381		1.04	%
	Time greater than $100K	629,646		1,735		1.11	%
	Total Short-Term Borrowings	415,871		856		0.83	%
	Fed Funds Purchased	119,837		47		0.15	%
	Other Short-Term Funds	296,034		809		1.10	%
	Long-Term Debt	26,584		421		6.35	%
	Net Interest Income and
	Margin (FTE)			$62,318		5.34	%
	(a) Annualized
		Q2'08
		Average		Income/		Yield (a) /
		Volume		Expense		Rate
	Interest Income Earned
	Total Earning Assets (FTE)	$3,865,110		$58,117		6.03	%
	Total Loans (FTE)	2,439,062		38,469		6.34	%
	Commercial Loans (FTE)	609,082		10,364		6.84	%
	Commercial RE Loans	843,793		14,972		7.14	%
	Consumer Loans	986,187		13,133		5.36	%
	Total Investments (FTE)	1,426,048		19,648		5.51	%
	Interest Expense Paid
	Total Earning Assets	3,865,110		8,386		0.87	%
	Total Interest-Bearing Liabilities	2,590,406		8,386		1.30	%
	Total Interest-Bearing Deposits	1,996,891		5,325		1.07	%
	Interest-Bearing Transaction	547,574		347		0.25	%
	Savings	763,575		1,105		0.58	%
	Time less than $100K	192,810		1,354		2.82	%
	Time greater than $100K	492,932		2,519		2.06	%
	Total Short-Term Borrowings	556,794		2,483		1.77	%
	Fed Funds Purchased	414,632		2,220		2.12	%
	Other Short-Term Funds	142,162		263		0.74	%
	Long-Term Debt	36,721		578		6.30	%
	Net Interest Income and
	Margin (FTE)			$49,731		5.16	%
	(a) Annualized

6. Noninterest Income.
		(dollars in thousands except per-share amounts)
								%
		Q2'09			Q2'08			Change		Q1'09
	Service Charges on Deposits	$9,116			$7,529			21.1	%	$8,422
	Merchant Credit Card Income	2,223			2,712			-18.0	%	2,432
	ATM Fees & Interchange	1,013			763			32.7	%	813
	Debit Card Fees	1,323			978			35.2	%	1,066
	Financial Services Commissions	137			274			-49.7	%	154
	Mortgage Banking Income	25			27			-7.5	%	17
	Trust Fees	373			377			-1.2	%	364
	Other Income	2,176			1,675			29.9	%	1,857
	Sub-total	16,386			14,335			14.3	%	15,124
	Net Loss From Equity Securities	0			(18,178	)		n/m		0
	FAS 141R Gain	0			0			n/m		48,844
	Total Noninterest Income (Loss)	$16,386			($3,843	)		n/m		$63,968
	Total Revenue (FTE)	$78,704			$45,888			71.5	%	$123,327
	Noninterest Income/Revenue (FTE)	20.8	%		-8.4	%				51.9	%
	Service Charges/Avg. Deposits (a)	0.87	%		0.95	%				0.88	%
	Total Revenues (FTE) Per Avg.
	Common Share (a)	$10.84			$6.38			69.8	%	$17.32
								%
		6/30'09YTD			6/30'08YTD			Change
	Service Charges on Deposits	$17,538			$14,825			18.3	%
	Merchant Credit Card Income	4,655			5,292			-12.0	%
	ATM Fees & Interchange	1,826			1,481			23.3	%
	Debit Card Fees	2,389			1,882			26.9	%
	Financial Services Commissions	291			504			-42.3	%
	Mortgage Banking Income	42			67			-37.3	%
	Trust Fees	737			680			8.3	%
	Other Income	4,032			3,284			22.8	%
	Sub-total	31,510			28,015			12.5	%
	Net Loss From Equity Securities	0			(12,480	)		n/m
	FAS 141R Gain	48,844			0			n/m
	Total Noninterest Income	$80,354			$15,535			n/m
	Total Revenue (FTE)	$202,031			$113,248			78.4	%
	Noninterest Income/Revenue (FTE)	39.8	%		13.7	%
	Service Charges/Avg. Deposits (a)	0.88	%		0.93	%
	Total Revenues (FTE) Per Avg.
	Common Share (a)	$14.05			$7.88			78.2	%
	(a) Annualized

7. Noninterest Expense.
		(dollars in thousands)
								%
		Q2'09			Q2'08			Change			Q1'09
	Salaries & Benefits	$17,448			$13,065			33.5	%		$16,371
	Occupancy	5,413			3,443			57.2	%		5,410
	Equipment	1,607			1,001			60.6	%		1,222
	Data Processing	2,378			2,105			13.0	%		2,104
	Courier	994			824			20.6	%		898
	Postage	531			390			36.2	%		462
	Telephone	478			346			38.2	%		387
	Professional Fees	779			683			14.0	%		888
	Stationery & Supplies	374			285			31.1	%		367
	Loan Expense	205			233			-12.1	%		994
	Operational Losses	221			196			12.9	%		195
	Amortization of
	Identifiable Intangibles	1,695			788			115.2	%		1,685
	FDIC Insurance Assessment	3,221			133			n/m			157
	Other Operating	3,322			2,845			16.8	%		2,983
	Sub-total	38,666			26,337			46.8	%		34,123
	VISA Litigation	0			0			n/m			0
	Total Noninterest Expense	$38,666			$26,337			46.8	%		$34,123
	Full Time Equivalent Staff	1,176			892			31.8	%		1,144
	Average Assets per FTE Staff	$4,477			$4,773			-6.2	%		$4,370
	Revenues (FTE) per FTE Staff (a)	268			207			29.5	%		437
	Noninterest Expense/
	Avg. Earning Assets (a)	3.31	%		2.74	%					3.09	%
	Noninterest Expense/Revenues (FTE)	49.1	%		57.4	%					27.7	%
	(a) Annualized
								%
		6/30'09YTD			6/30'08YTD			Change
	Salaries & Benefits	$33,819			$26,049			29.8	%
	Occupancy	10,823			6,833			58.4	%
	Equipment	2,829			1,922			47.2	%
	Data Processing	4,482			4,225			6.1	%
	Courier	1,892			1,653			14.4	%
	Postage	993			773			28.5	%
	Telephone	865			681			26.9	%
	Professional Fees	1,667			1,219			36.8	%
	Stationery & Supplies	741			564			31.4	%
	Loan Expense	1,199			403			197.7	%
	Operational Losses	416			380			9.5	%
	Amortization of
	Identifiable Intangibles	3,380			1,646			105.4	%
	FDIC Insurance Assessment	3,378			228			n/m
	Other Operating	6,305			5,155			22.3	%
	Sub-total	72,789			51,731			40.7	%
	VISA Litigation	0			(2,338	)		n/m
	Total Noninterest Expense	$72,789			$49,393			47.4	%
	Full Time Equivalent Staff	1,160			889			30.5	%
	Average Assets per FTE Staff	$4,426			$4,888			-9.5	%
	Revenues (FTE) per FTE Staff (a)	351			256			37.1	%
	Noninterest Expense/
	Avg. Earning Assets (a)	3.21	%		2.52	%
	Noninterest Expense/Revenues (FTE)	36.0	%		43.6	%
	(a) Annualized

8. Provision for Loan Losses.
		(dollars in thousands)
						%
		Q2'09		Q2'08		Change			Q1'09
	Average (Avg.) Total Loans	$3,383,654		$2,439,062		38.7	%		$3,135,944
	Avg. Total Covered Loans (1)	1,045,360		0		n/m			761,855
	Avg. Total Non-Covered Loans	2,338,294		2,439,062		-4.1	%		2,374,089
	Non-Covered Loans:
	Provision for Loan Losses	$2,600		$600		333.3	%		$1,800
	Gross Loan Losses	3,937		2,208		78.3	%		2,928
	Net Loan Losses	3,281		1,870		75.5	%		2,467
	Recoveries/Gross Losses	17	%	15	%				16	%
	Net Loan Losses/Avg.
	Non-Covered Loans (a)	0.56	%	0.31	%				0.42	%
	Provision for Loan Losses/Avg. Loans (a)	0.45	%	0.10	%				0.31	%
	Provision for Loan Losses/
	Net Loan Losses	79.2	%	32.1	%				73.0	%
						%
		6/30'09YTD		6/30'08YTD		Change
	Average (Avg.) Total Loans	$3,260,483		$2,458,364		32.6	%
	Avg. Total Covered Loans (1)	904,195		0		n/m
	Avg. Total Non-Covered Loans	2,356,288		2,458,364		-4.2	%
	Non-Covered Loans:
	Provision for Loan Losses	$4,400		$1,200		266.7	%
	Gross Loan Losses	6,865		3,745		83.3	%
	Net Loan Losses	5,748		2,742		109.6	%
	Recoveries/Gross Losses	16	%	27	%
	Net Loan Losses/Avg.
	Non-Covered Loans (a)	0.49	%	0.22	%
	Provision for Loan Losses/Avg. Loans (a)	0.38	%	0.10	%
	Provision for Loan Losses/
	Net Loan Losses	76.5	%	43.8	%
	(a) Annualized
	(1) Covered loans represent purchased loans on which losses are shared with the FDIC per a Loss Sharing Agreement. Covered loans were recorded at estimated fair value at the time of purchase.

9. Credit Quality.
		(dollars in thousands)
							%
		6/30/09			6/30/08		Change			3/31/09
	Non-Covered Nonperforming Loans:
	Nonperforming Nonaccrual	$29,603			$11,713		152.7	%		$10,943
	Performing Nonaccrual	26			28		-6.9	%		27
	Total Nonaccrual Loans	29,629			11,741		152.3	%		10,970
	Past Due Accruing Loans	614			254		141.7	%		777
	Total Non-Covered
	Nonperforming Loans	30,243			11,995		152.1	%		11,747
	Non-Covered Repossessed
	Loan Collateral	4,715			920		412.7	%		4,756
	Total Non-Covered
	Nonperforming Assets	34,958			12,915		170.7	%		16,503
	Covered Nonperforming Loans(1):
	Nonperforming Nonaccrual	65,910			0		n/m			34,437
	Performing Nonaccrual	16,901			0		n/m			3,632
	Total Nonaccrual Loans	82,811			0		n/m			38,069
	Past Due Accruing Loans	8,622			0		n/m			9,866
	Total Covered
	Nonperforming Loans (1)	91,433			0		n/m			47,935
	Covered Repossessed
	Loan Collateral (1)	13,691			0		n/m			13,391
	Total Covered Nonperforming
	Assets (1)	105,124			0		n/m			61,326
	Total Nonperforming Assets	$140,082			$12,915					$77,829
	Non-Covered Classified Loans	$53,359			$33,546		59.1	%		$41,453
	Covered Classified Loans	153,972			0		n/m			169,778
	Total Classified Loans	$207,331			$33,546		n/m			$211,231
	Total Non-Covered Loans Outstanding	$2,322,005			$2,431,011		-4.5	%		$2,356,237
	Total Covered Loans Outstanding (1)	1,031,643			0		n/m			1,089,071
	Total Loans Outstanding	$3,353,648			$2,431,011		38.0	%		$3,445,308
	Total Assets	$5,193,595			$4,188,868		24.0	%		$5,428,865
	(1) Covered loans and repossessed loan collateral represent purchased assets on which losses are shared with the FDIC per a Loss-Sharing Agreement. Covered assets were recorded at estimated fair value at the time of purchase.
	Non-Covered Loans:
	Allowance for Loan Losses	$43,122			$50,964		-15.4	%		$43,803
	Allowance/Non-Covered Loans	1.86	%		2.10	%				1.86	%
	Non-Covered Nonperforming Loans/
	Total Non-Covered Loans	1.30	%		0.49	%				0.50	%
	Non-Covered Nonperforming Assets/
	Total Assets	0.67	%		0.31	%				0.30	%
	Allowance/Non-Covered
	Nonperforming Loans	143	%		425	%				373	%
	Covered Loans (1):
	Fair Value Discount on Covered Loans	$114,276			n/a					$149,290
	Discount/Covered Loans	9.97	%		n/a					12.06	%
	Covered Nonperforming Assets/
	Total Assets	2.02	%		n/a					1.13	%
	Fair Value Discount on Repossessed
	Loan Collateral	$7			n/a					$11,178
	Discount/Covered Repossessed
	Loan Collateral	0.05	%		n/a					45.50	%
	(1) Covered loans and repossessed loan collateral represent purchased assets on which losses are shared with the FDIC per a Loss-Sharing Agreement. Covered assets were recorded at estimated fair value at the time of purchase.

10. Capital.
		(dollars in thousands, except per-share amounts)
						%
		6/30/09		6/30/08		Change		3/31/09
	Shareholders' Equity	$559,231		$410,445		36.2	%	$536,668
	Tier I Regulatory Capital	421,048		290,864		44.8	%	394,829
	Total Regulatory Capital	458,182		327,631		39.8	%	432,822
	Total Assets	5,193,595		4,188,868		24.0	%	5,428,865
	Risk-Adjusted Assets	2,890,291		2,845,553		1.6	%	2,993,229
	Shareholders' Equity/
	Total Assets	10.77	%	9.80	%			9.89	%
	Shareholders' Equity/
	Total Loans	16.68	%	16.88	%			15.58	%
	Tier I Capital/Total Assets	8.11	%	6.94	%			7.27	%
	Tier I Capital/
	Risk-Adjusted Assets	14.57	%	10.22	%			13.19	%
	Total Capital/
	Risk-Adjusted Assets	15.85	%	11.51	%			14.46	%
	Tangible Common Equity Ratio	6.26	%	6.71	%			5.52	%
	Common Shares Outstanding	29,214		28,889		1.1	%	28,874
	Book Value Per Common Share	$16.31		$14.21		14.8	%	$15.73
	Market Value Per Common Share	$49.61		$52.59		-5.7	%	$45.56
	Share Repurchase Programs
		(shares in thousands)
						%
		Q2'09		Q2'08		Change		Q1'09
	Total Shares Repurchased	6		172		-96.5	%	16
	Average Repurchase Price	$51.90		$54.89		-5.4	%	$41.58
	Net Shares (Issued) Repurchased	(340	)	(117	)	189.3	%	6
						%
		6/30'09YTD		6/30'08YTD		Change
	Total Shares Repurchased	22		596		-96.3	%
	Average Repurchase Price	$44.42		$49.76		-10.7	%
	Net Shares (Issued) Repurchased	(334	)	129		-359.1	%

11. Period-End Balance Sheets.
		(unaudited, dollars in thousands)
								%
		6/30/09			6/30/08			Change			3/31/09
	Assets:
	Cash and Money Market Assets	$169,291			$134,432			25.9	%		$149,566
	Investment Securities:
	Available For Sale	407,127			391,028			4.1	%		436,343
	Held to Maturity	830,618			978,298			-15.1	%		918,745
	Non-Covered Loans	2,322,005			2,431,011			-4.5	%		2,356,237
	Allowance For Loan Losses	(43,122	)		(50,964	)		-15.4	%		(43,803	)
	Non-Covered Loans, net	2,278,883			2,380,047			-4.3	%		2,312,434
	Covered Loans, net (1)	1,031,643			0			n/m			1,089,071
	Total Loans, net	3,310,526			2,380,047			39.1	%		3,401,505
	Non-Covered Other Real Estate Owned	4,715			920			n/m			4,756
	Covered Other Real Estate
	Owned, net (1)	13,691			0			n/m			13,391
	Premises and Equipment	26,490			27,460			-3.5	%		26,729
	Identifiable Intangibles	39,934			16,784			137.9	%		41,630
	Goodwill	121,699			121,719			0.0	%		121,699
	Interest Receivable and Other	269,504			138,180			95.0	%		314,501
	Total Assets	$5,193,595			$4,188,868			24.0	%		$5,428,865
	Liabilities and Shareholders' Equity:
	Deposits:
	Noninterest Bearing	$1,334,871			$1,195,004			11.7	%		$1,353,696
	Interest-Bearing Transaction	716,706			527,109			36.0	%		730,153
	Savings	968,408			754,677			28.3	%		968,411
	Time	1,137,152			686,702			65.6	%		1,204,021
	Total Deposits	4,157,137			3,163,492			31.4	%		4,256,281
	Short-Term Borrowed Funds	316,466			514,131			-38.4	%		441,418
	Federal Home Loan Bank Advances	86,338			0			n/m			86,772
	Debt Financing and Notes	26,564			36,699			-27.6	%		26,598
	Interest Payable and Other	47,859			64,101			-25.3	%		81,128
	Total Liabilities	4,634,364			3,778,423			22.7	%		4,892,197
	Shareholders' Equity:
	Preferred Stock	82,611			0			n/m			82,550
	Paid-In Capital	367,840			351,157			4.8	%		356,326
	Accumulated Other
	Comprehensive Income	1,747			1,074			62.7	%		2,274
	Retained Earnings	107,033			58,214			83.9	%		95,518
	Total Common Equity	476,620			410,445			16.1	%		454,118
	Total Shareholders' Equity	559,231			410,445			36.2	%		536,668
	Total Liabilities and
	Shareholders' Equity	$5,193,595			$4,188,868			24.0	%		$5,428,865
	(1) Covered loans and repossessed loan collateral represent purchased assets on which losses are shared with the FDIC per a Loss-Sharing Agreement. Covered assets were recorded at estimated fair value at the time of purchase.

12. Income Statements.
	(unaudited, dollars in thousands except per-share amounts)
							%
		Q2'09		Q2'08			Change			Q1'09
	Interest Income:
	Loans	$49,523		$37,274			32.9	%		$45,095
	Money Market Assets	1		1			n/m			1
	Investment Securities:
	Available for Sale	4,539		4,942			-8.1	%		3,739
	Held to Maturity	9,009		10,438			-13.7	%		10,350
	Total Interest Income	63,072		52,655			19.8	%		59,185
	Interest Expense:
	Transaction Deposits	293		347			-15.6	%		205
	Savings Deposits	1,059		1,105			-4.1	%		900
	Time Deposits	3,116		3,873			-19.5	%		2,679
	Short-Term Borrowed Funds	856		2,483			-65.5	%		626
	Debt Financing and Notes	421		578			-27.1	%		423
	Total Interest Expense	5,745		8,386			-31.5	%		4,833
	Net Interest Income	57,327		44,269			29.5	%		54,352
	Provision for Loan Losses	2,600		600			n/m			1,800
	Noninterest Income:
	Service Charges	9,116		7,529			21.1	%		8,422
	Merchant Credit Card	2,223		2,712			-18.0	%		2,432
	ATM Fees & Interchange	1,013		763			32.7	%		813
	Debit Card Fees	1,323		978			35.2	%		1,066
	Financial Services Commissions	137		274			-49.7	%		154
	Mortgage Banking	25		27			-7.5	%		17
	Trust Fees	373		377			-1.2	%		364
	Net Loss From Equity Securities	0		(18,178	)		n/m			0
	FAS 141R Gain	0		0			n/m			48,844
	Other	2,176		1,675			29.9	%		1,857
	Total Noninterest Income (Loss)	16,386		(3,843	)		n/m			63,968
	Noninterest Expense:
	Salaries and Benefits	17,448		13,065			33.5	%		16,371
	Occupancy	5,413		3,443			57.2	%		5,410
	Equipment	1,607		1,001			60.6	%		1,222
	Data Processing	2,378		2,105			13.0	%		2,104
	Professional Fees	779		683			14.0	%		888
	FDIC Insurance Assessment	3,221		133			n/m			157
	VISA Litigation	0		0			n/m			0
	Other	7,820		5,907			32.4	%		7,971
	Total Noninterest Expense	38,666		26,337			46.8	%		34,123
	Income Before Income Taxes	32,447		13,489			140.5	%		82,397
	Income Tax Provision	9,264		1,287			n/m			29,572
	Net Income	23,183		12,202			90.0	%		52,825
	Preferred Stock Dividends and
	Discount Accretion	1,107		0			n/m			578
	Net Income Applicable to
	Common Equity	$22,076		$12,202			80.9	%		$52,247
	Average Common Shares Outstanding	29,126		28,916			0.7	%		28,876
	Diluted Common Shares Outstanding	29,403		29,392			0.0	%		29,105
	Per Common Share Data:
	Basic Earnings	$0.76		$0.42			81.0	%		$1.81
	Diluted Earnings	0.75		0.42			78.6	%		1.80
	Dividends Paid	0.35		0.35			0.0	%		0.36
							%
		6/30'09YTD		6/30'08YTD			Change
	Interest Income:
	Loans	$94,618		$76,006			24.5	%
	Money Market Assets	2		2			n/m
	Investment Securities:
	Available for Sale	8,278		10,744			-22.9	%
	Held to Maturity	19,359		21,297			-9.1	%
	Total Interest Income	122,257		108,049			13.1	%
	Interest Expense:
	Transaction Deposits	498		799			-37.6	%
	Savings Deposits	1,959		2,435			-19.5	%
	Time Deposits	5,795		9,419			-38.5	%
	Short-Term Borrowed Funds	1,482		7,405			-80.0	%
	Debt Financing and Notes	844		1,156			-27.0	%
	Total Interest Expense	10,578		21,214			-50.1	%
	Net Interest Income	111,679		86,835			28.6	%
	Provision for Loan Losses	4,400		1,200			n/m
	Noninterest Income:
	Service Charges	17,538		14,825			18.3	%
	Merchant Credit Card	4,655		5,292			-12.0	%
	ATM Fees & Interchange	1,826		1,481			23.3	%
	Debit Card Fees	2,389		1,882			26.9	%
	Financial Services Commissions	291		504			-42.3	%
	Mortgage Banking	42		67			-37.3	%
	Trust Fees	737		680			8.3	%
	Net Loss From Equity Securities	0		(12,480	)		n/m
	FAS 141R Gain	48,844		0			n/m
	Other	4,032		3,284			22.8	%
	Total Noninterest Income	80,354		15,535			n/m
	Noninterest Expense:
	Salaries and Benefits	33,819		26,049			29.8	%
	Occupancy	10,823		6,833			58.4	%
	Equipment	2,829		1,922			47.2	%
	Data Processing	4,482		4,225			6.1	%
	Professional Fees	1,667		1,219			36.8	%
	VISA Litigation	0		(2,338	)		n/m
	FDIC Insurance Assessment	3,378		228			n/m
	Other	15,791		11,255			40.3	%
	Total Noninterest Expense	72,789		49,393			47.4	%
	Income Before Income Taxes	114,844		51,777			121.8	%
	Provision for Income Taxes	38,836		12,797			n/m
	Net Income	76,008		38,980			95.0	%
	Preferred Stock Dividends and
	Discount Accretion	1,685		0			n/m
	Net Income Applicable to
	Common Equity	$74,323		$38,980			90.7	%
	Average Common Shares Outstanding	29,002		28,888			0.4	%
	Diluted Common Shares Outstanding	29,254		29,301			-0.2	%
	Per Common Share Data:
	Basic Earnings	$2.56		$1.35			89.6	%
	Diluted Earnings	2.54		1.33			91.0	%
	Dividends Paid	0.71		0.69			2.9	%