Westamerica Bank

July 19, 2005

For Immediate Release


San Rafael, CA: The Board of Directors of Westamerica Bancorporation (NASDAQ: WABC), parent company of Westamerica Bank, today reported record quarterly net income for the second quarter of 2005 of $27.9 million, or $0.84 diluted earnings per share, compared to net income of $24.6 million, or $0.76 diluted earnings per share for the second quarter of 2004. Second quarter 2005 results include a property sale gain, which increased diluted earnings per share $0.03. Return on assets was 2.17 percent and return on equity was 26.0 percent for the second quarter of 2005. The second quarter of 2005 represents the first full quarter of operations following the March 1, 2005 acquisition of Redwood Empire Bancorp.

Non-interest revenue growth following the Redwood acquisition is diversifying our revenues. Merchant credit card income increased $1.1 million during the second quarter of 2005 compared to the first quarter, and deposit service charges increased $615 thousand. "The integration of Redwood's systems and branches is complete, and our retention of Redwood employees and customers is ahead of our expectations," said Chairman, President and CEO David Payne. "We are proud to be growing diluted earnings per share and delivering 26 percent return on equity for our shareholders," Payne added.

Net interest income on a taxable equivalent basis was $57.0 million for the second quarter of 2005, $2.7 million higher than the $54.3 million reported for the second quarter of 2004. The increased net interest income is attributable to a higher earning asset base, offset in part by a reduced net interest margin. Average earning assets were $542 million higher in the second quarter 2005 compared to the year ago quarter, primarily due to the Redwood Empire Bancorp acquisition. The second quarter 2005 net interest margin on a taxable equivalent basis was 4.84 percent, compared to 4.90 percent for the prior quarter and 5.21 percent for the second quarter of 2004. The reduced net interest margin primarily resulted from time deposit and wholesale funding costs rising more than earning asset yields.

The provision for loan losses was $300 thousand for the second quarter of 2005 unchanged from the prior quarter and down from $750 thousand for the second quarter of 2004. Net charge-offs for the second quarter of 2005 totaled $297 thousand, or 0.04 percent (annualized) of average loans compared to 0.11 percent (annualized) of average loans for the second quarter of 2004. Non-performing loans and repossessed loan collateral at June 30, 2005 totaled $7.8 million, down from $8.4 million at March 31, 2005.

Noninterest income for the second quarter of 2005 was $15.5 million, compared to $7.2 million for the previous quarter and $11.7 million for the second quarter of 2004. Of the $8.3 million increase over the first quarter:

• $1.8 million is attributable to higher operating revenues, including merchant credit card income primarily from the acquired Redwood Empire Bancorp ($1.1 million increase), higher service charges on deposit accounts primarily due to the higher post-acquisition deposit base ($615 thousand increase), and higher debit card income ($114 thousand increase).
• $1.3 million is attributable to the property sale gain in the second quarter 2005, and
• $4.9 million is attributable to securities losses realized in the first quarter to manage the Company's interest rate risk position taking into consideration the acquisition of Redwood Empire Bancorp.
• The $3.8 million increase in noninterest income over the second quarter 2004 is attributable to higher revenues from merchant credit card income ($1.5 million increase), higher service charges on deposit accounts ($182 thousand increase), higher debit card income ($173 thousand increase), and the property sale gain ($1.3 million).

Noninterest expense for the second quarter of 2005 totaled $26.8 million, increased from $25.1 million for the first quarter, and up from $25.0 million for the second quarter of 2004. Comparing the second quarter of 2005 to the first quarter, higher personnel costs, amortization of intangible assets, and occupancy and equipment expense were offset in part by lower professional fees. Comparing the second quarter of 2005 to the second quarter of 2004, the increase in noninterest expense was primarily due to higher personnel costs, amortization of intangible assets, and occupancy and equipment expense. The second quarter 2005 efficiency ratio (expenses divided by revenues) was 36.9 percent, compared to 40.4 percent for the prior quarter and 37.9 percent for the second quarter of 2004.

Shareholders' equity at June 30, 2005 was $440 million, slightly increased from $438 million at March 31, 2005. The Company's total regulatory capital ratio increased to 10.4 percent at June 30, 2005 from 10.3 percent at March 31, 2005; both measurements exceed the "well-capitalized" level of 10 percent under regulatory requirements.

Westamerica Bancorporation, through its wholly owned subsidiary Westamerica Bank, operates 89 branches throughout 21 Northern and Central California counties. At June 30, 2005, the Company's total assets and total loans outstanding were $5.2 billion and $2.7 billion, respectively.

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 March 31, 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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