Westamerica Bancorporation Reports Second Quarter 2010 Results

Westamerica Bancorporation ( NASDAQ:WABC), parent company of Westamerica Bank, today reported second quarter 2010 net income applicable to common equity of $23.6 million, or $0.80 diluted earnings per share (“EPS”), compared to $23.6 million, or $0.80 EPS in the prior quarter and $22.1 million, or $0.75 EPS in the second quarter 2009. Second quarter 2009 results include the operations of the former County Bank, which Westamerica acquired from the Federal Deposit Insurance Corporation (FDIC) on February 6, 2009. Second quarter 2010 net income applicable to common equity represents an 18.2 percent annualized return on average common equity.

“Westamerica’s net interest margin rose to 5.62 percent in the second quarter 2010 from 5.60 percent in the prior quarter. We continue to apply our long-held practice of focusing on checking and savings deposits which now represent 78 percent of our deposit base. The annualized cost of funding our loan and investment portfolios was only 0.31 percent in the second quarter 2010,” said Chairman, President and CEO David Payne. “Our credit quality remains stable with second quarter net loan losses totaling 0.64 percent (annualized) of our non-FDIC indemnifed loan portfolio, and our loan loss reserve represents 1.87 percent of non-indeminfied loans at quarter-end. Common shareholders’ equity grew to $528 million at June 30, 2010 resulting in a total regulatory capital ratio of 15.7,” Payne added.

Net interest income on a fully taxable equivalent basis (FTE) was $56.6 million for the second quarter 2010, compared to $57.0 million (FTE) for the prior quarter and $62.3 million (FTE) for the second quarter 2009. The second quarter 2010 annualized net interest margin was 5.62 percent (FTE), compared to 5.60 percent (FTE) for the prior quarter and 5.34 percent (FTE) for the second quarter 2009. The decline in net interest income is attributable to lower levels of interest-earning assets. Weak economic conditions and deleveraging by businesses and individuals have impacted loan volumes.