Westamerica Bank

October 18, 2005

For Immediate Release


San Rafael, CA: Westamerica Bancorporation (NASDAQ: WABC), parent company of Westamerica Bank, today reported record net income of $29.2 million for the third quarter of 2005, up from $25.1 million for the third quarter of 2004. Third quarter 2005 diluted earnings per share increased to $0.89 from $0.78 for the third quarter of 2004. Return on average common equity (ROE) for the third quarter of 2005 was 27.3 percent and return on assets (ROA) was 2.25 percent. Third quarter 2005 results include a gain on the sale of a facility vacated following the Redwood Empire Bancorp acquisition and recognition of company owned life insurance proceeds which, on a combined basis, account for $0.06 diluted earnings per share.

For the first nine months of 2005, net income totaled $79.8 million, compared to $74.1 million for the same period in 2004. Diluted earnings per share were $2.42 for the first nine months of 2005, compared to $2.28 for the same period in 2004. Results for the first nine months of 2005 include a first quarter realized loss on the sale of available-for-sale securities, a second quarter property sale gain, and third quarter gains from the sale of premises and company owned life insurance proceeds. On a combined basis, these items reduced net income by $100 thousand for the first nine months of 2005.

"Results for the third quarter of 2005 benefited from growth in merchant credit card and debit card income," said Chairman, President and CEO David Payne. "Our consistent focus on gathering noninterest bearing demand deposits and other low-cost deposits has maintained Westamerica's cost of funds at a relatively low level. Our funding cost was only 1.01 percent in the third quarter, which gives us a competitive advantage in the current operating environment," added Payne.

Net interest income on a fully taxable equivalent basis was $56.0 million in the third quarter of 2005 compared to $54.5 million in the third quarter of 2004. The third quarter of 2005 net interest margin was 4.76 percent, down from 5.11 percent in the third quarter of 2004. Rising short-term interest rates combined with limited change in intermediate interest rates and highly competitive loan pricing has resulted in an operating environment with declining net interest margins.

Noninterest income in the third quarter of 2005 totaled $17.4 million, compared to $11.8 million in the third quarter of 2004. In comparison to the third quarter of 2004, the third quarter of 2005 benefited from a $1.7 million increase in merchant credit card income, a $180 thousand increase in debit card fees, and $3.0 million combined from a gain on the sale of premises and company-owned life insurance proceeds.

Noninterest income for the first nine months of 2005 totaled $40.1 million, compared to $34.3 million in the first nine months of 2004. The $5.8 million increase is primarily due to:

• $3.7 million higher merchant credit card income attributable to the acquisition of Redwood Empire Bancorp on March 1, 2005.
• $670 thousand increase in debit card and ATM fees.
• $210 thousand increase in service charges on deposit accounts.
• $130 thousand increase in trust fees.

Noninterest expense for the third quarter of 2005 was $26.8 million, unchanged from the prior quarter. Compared to the third quarter of 2004, noninterest expense increased $2.3 million in the third quarter of 2005. The increase is due to higher personnel, occupancy, equipment, and intangible asset amortization costs following the acquisition of Redwood Empire Bancorp.

The efficiency ratio for the third quarter of 2005 was 36.5 percent, compared to 36.9 percent in both the prior quarter and the third quarter of 2004.

Nonperforming assets increased from $7.8 million at June 30, 2005 to $8.1 million at September 30, 2005. The increase is primarily due to a $1.3 million increase in loans 90 or more days past due and accruing, which is attributable to one commercial loan. Such loan, totaling $1.2 million, is 100 percent secured by Westamerica Bank certificates of deposit. The Bank has not exercised its right of offset as management expects full repayment upon the settlement of the borrower's estate.

The provision for loan losses was $150 thousand for the third quarter of 2005, reduced from $300 thousand for the previous quarter and $600 thousand for the third quarter of 2004. The reduced provision for loan losses reflects management's assessment of credit risk for the loan portfolio.

Shareholders' equity was $432 million at September 30, 2005. The Company's total regulatory capital ratio was 10.4 percent at September 30, 2005, which exceeds the "well-capitalized" level of 10 percent under regulatory requirements.

Westamerica Bancorporation, through its wholly owned subsidiary Westamerica Bank, operates 88 branches throughout 21 Northern and Central California counties. At September 30, 2005, the company had total assets outstanding of $5.2 billion.


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 June 30, 2005 and Form 10-K for the year ended December 31, 2004, 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, the combination of the former Redwood Empire Bancorp and other 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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