Westamerica - Commonly Asked Questions

Commonly Asked Questions

What’s causing all the problems at banks?

High-risk loans, such as sub-prime mortgages, are causing some banks to take large losses. These large losses are reducing these banks’ capital levels to very low levels, capital which provides a “cushion” to absorb any future losses. Sub-prime mortgages were the primary weakness at many troubled financial institutions.

Does Westamerica have sub-prime mortgages?

No. We are primarily a commercial bank lending to businesses. But we do have some residential mortgages, which we approved using “prime” standards. At August 31, 2008, only one one-hundredth of one percent (0.01%) of our residential mortgages were delinquent, a testament to the high quality of our loan portfolio.

Is my money safe at Westamerica Bank?

Yes. Westamerica is widely recognized as having one of the highest quality loan portfolios in the country. Westamerica’s loan losses in the first six months of 2008 were approximately one-third the level of the banking industry average. Also, our capital has consistently exceeded the highest “well capitalized” level defined by regulators.

Does Westamerica have a credit rating on its deposits?

Yes. Fitch Ratings is one of the three leading independent third-party firms assigning ratings on the safety of bank deposits. Westamerica Bank’s short-term deposit rating is F1, the highest possible rating; and our long-term deposit rating is A, also a very high rating.

How can I get an independent opinion on the health of Westamerica Bank?

Westamerica is a public company traded on the stock market with ticker symbol WABC. The banking “crisis” started about one year ago, and the stock market has expressed an independent opinion on which banks are healthy, and which banks are weak. The stock market votes every day, and banks that are weak lose stock market value quickly in today’s environment. The stock price change for Westamerica and the KBW Bank Index of bank stocks for the 12-months ended September 30, 2008 are:

Westamerica	(WABC)	+15.5%
KBW Bank Index	(BKX)	-36.1%

Should I spread my money around many banks?

Westamerica is a safe and sound bank, which is of primary importance to our deposit customers. We feel our customers do not need to inconvenience themselves by spreading their money around more than one bank, losing their control and flexibility over their deposits by having multiple accounts at different banks. Comfort comes from being able to deal with people you know in your local bank branch.

What is “CDARS” (Certificate of Deposit Account Registry Service)?

CDARS is a group of banks through out the country which broker customer certificates of deposit (CDs) in a manner to achieve FDIC insurance on the CDs. A member bank transfers a customer’s CD money, which exceeds the FDIC insurance limit, to another bank in the country so that the transferred deposits receive FDIC insurance at the other bank. The drawback for the customer is not knowing much about the bank which receives the transferred CDs, and not having that bank close to home.

Why doesn’t Westamerica participate in CDARS?

Westamerica has a very strong financial condition. We offer safety and soundness to our customers as a low-risk depository for their money. We can not guarantee the safety and soundness of all the banks which are members of CDARS, but we are highly confident in Westamerica. We think our customers feel better about their banking relationship because they know us and know our financial position is strong.