Westamerica Bank

October 14, 2009

For Immediate Release

San Rafael, CA: Westamerica Bancorporation (NASDAQ: WABC), earned net income applicable to common shareholders of $23.8 million, or $0.81 per diluted common share (“EPS”), for the three months ended September 30, 2009, compared to net income applicable to common shareholders of $22.1 million, or $0.75 EPS, for the three months ended June 30, 2009. During the third quarter 2009, Westamerica completed systems conversions and branch consolidations related to the purchase of assets and assumption of liabilities of the former County Bank, which resulted in reduced expense levels. During the third quarter 2009, Westamerica redeemed $42 million in preferred stock requiring accelerated discount accretion of $538 thousand, which reduced EPS $0.02. Also during the third quarter 2009, Westamerica eliminated $587 thousand in tax reserves due to a lapse in the statute of limitations, which reduced tax provisions and increased EPS $0.02. Third quarter 2009 results represents a 20 percent return on common shareholders’ equity.

“The County Bank integration was completed on time in August, and the efficiencies gained following the integration will continue to benefit future operating results. The cost of funding our loan and investment portfolio continued to decline due to our pricing practices and an improved mix of deposits. The third quarter 2009 cost of funds was 0.40 percent, which supported our 5.48 percent net interest margin. The risk profile of our loan portfolio is significantly reduced as loss-sharing agreements with the Federal Deposit Insurance Corporation cover 29 percent of our loan portfolio. The credit quality of the non-FDIC covered loans remained stable during the quarter,” said Chairman, President and CEO David Payne. “Our healthy profitability and 15.1 percent total regulatory capital ratio distinguishes Westamerica as a safe and sound bank during this troublesome period for our industry,” added Payne.

Westamerica generated net income applicable to common shareholders of $98 million, or $3.35 EPS, during the nine months ended September 30, 2009. Results for this period include a $28.3 million net of tax gain from the acquisition of assets and assumption of liabilities of the former County Bank.

Westamerica generated net income applicable to common shareholders of $39 million, or $1.33 EPS, during the nine months ended September 30, 2008. Results for this period include a $5.7 million gain on the sale of VISA common stock resulting from VISA’s initial public offering (“IPO”), and $2.3 million in reduced expenses as known litigation contingencies were satisfied as a part of the VISA IPO. EPS was increased $0.16 due to transactions recognized as a result of the VISA IPO. Results for this period also include $34 million in losses, net of tax, recognized as a result of the decline in value of FHLMC and FNMA preferred stock, which reduced EPS by $1.17. Also, the Company recorded a $1.0 million reduction in its tax provision primarily due to filing its 2007 tax return and adjusting 2007 tax estimates to actual amounts included in the filed tax return, which increased EPS by $0.03.

Net interest income on a fully-taxable equivalent basis (“FTE”) totaled $61.6 million in the third quarter 2009, compared to $62.3 million in the second quarter 2009, and $48.7 million in the third quarter 2008. For the nine month periods ended September 30, 2009 and 2008, net interest income (FTE) totaled $183.3 million and $146.4 million, respectively. Net interest income has increased in 2009 compared to 2008 due to acquired County Bank assets and a higher net interest margin. The net interest margin has improved due to a decline in interest rates paid on deposits and other borrowings used to fund loans and investment securities.

The provision for credit losses was $2.8 million for the third quarter 2009, increased from $2.6 million for the previous quarter.

Non-interest income for third quarter 2009 was $16.0 million compared to $16.4 million in the prior quarter. Service charges on deposit accounts, ATM fees and debit card fees are higher following the February 6, 2009 assumption of County Bank deposits. Merchant credit card income is lower in 2009 compared to 2008 due to reduced  consumer spending.

Non-interest expense for third quarter 2009 was $35.2 million compared to $38.7 million in the prior quarter, which included $1.8 million in higher FDIC insurance fund assessments. Personnel and facilities expenses (occupancy and equipment combined) have declined following County Bank systems integrations and branch consolidations.

Non-performing assets not covered by FDIC loss-sharing agreements were $36 million at September 30, 2009 compared to $35 million at June 30, 2009. Annualized net loan losses on non-FDIC covered loans as a percentage of average non-FDIC covered loans were 0.56 percent during both the third and second quarters of 2009. The reserve for loan losses to non-FDIC covered loans was 1.88 percent and 1.86 percent at September 30, 2009 and June 30, 2009, respectively.

Shareholders' equity was $536 million at September 30, 2009 compared to $559 million at June 30, 2009.  At September 30, 2009, total regulatory capital ratios for Westamerica Bancorporation and its subsidiary bank, Westamerica Bank, were 15.1 percent and 14.4 percent, respectively, exceeding the 10 percent requirement to be “well capitalized” under regulatory standards.

Westamerica Bancorporation, through its wholly owned subsidiary, Westamerica Bank, operates 99 branches and two trust offices throughout Northern and Central California counties.

Quarterly Financial Highlights

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 on Form 10-Q for the quarter ended June 30, 2009 and annual report on Form 10-K 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.

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For additional information contact:

Westamerica Bancorporation
Robert A. Thorson, Senior Vice President and Chief Financial Officer, (707) 863-6840
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