Westamerica Bank

january 15, 2009

For Immediate Release

San Rafael, CA: Westamerica Bancorporation (NASDAQ: WABC), parent company of Westamerica Bank, today reported net income for the fourth quarter 2008 of $20.8 million, or diluted earning per share (EPS) of $0.71. Fourth quarter 2008 results include “other than temporary impairment” securities losses of $1.9 million net of tax, which reduced EPS by $0.07. In the prior year’s fourth quarter, Westamerica reported net income of $21.8 million, or EPS of $0.74. Fourth quarter 2007 results include a $2.3 million litigation expense for Westamerica’s proportionate share of Visa’s litigation exposure and a $700 thousand income tax refund. The expense for Visa litigation and the income tax refund combined to reduce net income by $590 thousand, or EPS by $0.02.

“Our net interest margin increased to 5.44 percent in the fourth quarter 2008, compared to 5.19 percent in the third quarter 2008. The margin improvement was in large part due to declining short-term interest rates, which allowed us to reduce our cost of funds. Our credit quality remains relatively healthy in the recessionary economy. Our total non-performing assets were $14.3 million at December 31, 2008, compared to $13.4 million at September 30, 2008. Our $44.5 million reserve for loan losses at December 31, 2008 compares favorably to net loan losses of $10.7 million for all of 2008,“ said Chairman, President and CEO David Payne. “We are pleased to report a 21 percent annualized return on our shareholders’ equity for the fourth quarter 2008,” continued Payne.

Westamerica reported net income for the year ended December 31, 2008 of $59.8 million, or EPS of $2.04, compared to net income of $89.8 million and EPS of $2.98 for 2007. Results for 2008 include gains from the VISA initial public offering, securities losses on FHLMC and FNMA preferred stock, and a $1 million tax benefit from adjusting 2007 tax estimates to the filed tax return which combined to reduce net income by $30.7 million and EPS by $1.05. Results for 2007 include the $2.3 million expense for Visa litigation, the $700 thousand income tax refund, and life insurance proceeds of $822 thousand which combined to increase net income by $200 thousand.

Net interest income on a fully taxable equivalent basis was $49.9 million in the fourth quarter of 2008 compared to $48.7 million in the prior quarter and $46.8 million in the same quarter a year ago. The fourth quarter 2008 net interest margin on a fully taxable equivalent basis was 5.44 percent, compared to 5.19 percent for the previous quarter and 4.53 percent for the fourth quarter of 2007. For the full year 2008, net interest income and the net interest margin on a fully taxable equivalent basis were $196.3 million and 5.13 percent, compared to $185.3 million and 4.40 percent, respectively, for 2007.

The provision for credit losses was $900 thousand for the fourth quarter of 2008, compared to $600 thousand for the previous quarter and $475 thousand for the year ago quarter.  The increase in the provision for credit losses in the fourth quarter 2008 reflects Management’s assessment of credit risk for the Company.

Non-interest income in the fourth quarter of 2008 totaled $9.9 million, compared to $14.7 million for the year ago quarter. The reduction from the year ago quarter was due to $3.3 million in securities losses, lower merchant credit card fees, and lower official check fees.

Non-interest expense for the fourth quarter of 2008 totaled $26.2 million compared to $25.2 million in the prior quarter and $27.2 million in the year ago quarter.  The increase from the prior quarter is primarily attributable to higher professional fees and operational losses. The reduction in non-interest expense from the year ago quarter is primarily attributable to the Visa litigation charge recorded in the fourth quarter 2007, offset in part by higher personnel costs and professional fees in the fourth quarter 2008.

For the full year 2008, non-interest expense was $100.8 million compared to $101.4 million for 2007. Non-interest expense was increased $2.3 million in 2007 with the recognition of Westamerica’s proportionate share of Visa’s litigation exposure, and reduced $2.3 million in 2008 upon Visa’s funding of a litigation settlement escrow. Operating expenses increased approximately $4.0 million in 2008 compared to 2007 primarily due to higher personnel, data processing, and professional fees, offset in part by lower amortization of identifiable intangible assets.

Shareholders’ equity was $410 million at December 31, 2008 increased from $395 million at December 31, 2007. At December 31, 2008, the equity-to-asset ratio was 10.2 percent, increased from 8.7 percent at December 31, 2007. At December 31, 2008, the Company’s assets totaled $4.0 billion and loans outstanding totaled $2.4 billion.

Westamerica Bancorporation, through its wholly owned subsidiary Westamerica Bank, operates 86 branches throughout 21 Northern and Central California counties.

Quarterly Financial Highlights

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 September 30, 2008 and Form 10-K for the year ended December 31, 2007, 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.

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