Westamerica Bank

October 19, 2004

For Immediate Release


San Rafael, CA: Westamerica Bancorporation (NASDAQ: WABC), parent company of Westamerica Bank, today reported record net income of $25.1 million for the third quarter of 2004, up from $24.1 million for the third quarter of 2003. Third quarter 2004 diluted earnings per share increased 7.2 percent to $0.78 from $0.72 for the third quarter of 2003. Return on average common equity (ROE) for the third quarter of 2004 was 30.1 percent and return on assets (ROA) was 2.19 percent, compared to 29.2 percent and 2.18 percent, respectively, in the third quarter of 2003.

For the first nine months of 2004, net income totaled $74.1 million, an increase of $3.3 million compared to $70.8 million for the same period in 2003. Diluted earnings per share were $2.28 for the first nine months of 2004, an increase of 7.9 percent compared to $2.12 for the same period in 2003. ROE and ROA were 30.6 percent and 2.20 percent, respectively, for the first nine months of 2004, compared to 29.4 percent and 2.20 percent, respectively, for the same period in 2003.

"The third quarter of 2004 benefited from higher fee income, efficiency, and improving credit quality," said Chairman, President and CEO David Payne. "New deposit service products fueled a $775 thousand increase in fee income over the third quarter of last year. This improvement in revenue, combined with our efficient cost structure resulted in an efficiency ratio of 36.9 percent in the third quarter of 2004. Our year-to-date annualized net charge-offs to average loans declined to 0.10 percent through September 30, 2004 compared to 0.15 percent in 2003," added Payne.

Net interest income on a fully taxable equivalent basis was $54.5 million in the third quarter of 2004 compared to $54.3 million in the prior quarter and $54.3 million in the third quarter of 2003. The third quarter of 2004 net interest margin was 5.11 percent, down from 5.21 percent in the prior quarter and 5.31 percent in the third quarter of 2003. A reduction in commercial real estate loans combined with a sustained period of low interest rates have resulted in an operating environment with declining net interest margins.

Noninterest income in the third quarter of 2004 totaled $11.8 million, compared to $11.7 million in the prior quarter and $11.0 million in the third quarter of 2003. In comparison to both the prior quarter and third quarter of 2003, the third quarter of 2004 benefited from higher service charges on deposit accounts and financial services fees offset in part by lower merchant credit card income and mortgage banking income.

Noninterest expense for the third quarter of 2004 was $24.5 million, a reduction of $500 thousand from the prior quarter. The decrease is due to lower expenses for personnel, equipment, professional fees, and postage offset in part by higher occupancy costs. Compared to the third quarter of 2003, noninterest expense decreased $1 million in the third quarter of 2004. The decrease is due to lower expenses for personnel, equipment, and professional fees.

The efficiency ratio for the third quarter of 2004 was 36.9 percent, compared to the prior quarter at 37.9 percent and the third quarter of 2003 at 39.1 percent.

The provision for loan losses was $600 thousand for the third quarter of 2004, reduced from $750 thousand in both the previous quarter and third quarter of 2003. The reduced provision for loan losses reflects management's assessment of credit risk for the loan portfolio.

Shareholders' equity was $352 million at September 30, 2004, which represents an increase of $22 million from $330 at June 30, 2004. The increase is attributable to retained earnings, net of shareholder dividends, of $16 million and other comprehensive income of $10 million related to unrealized appreciation in available for sale investment securities, reduced by purchase and retirement of company common stock of $4 million, net of stock option proceeds. Net repurchases of the Company's common stock in the third quarter 2004 totaled 68 thousand shares.

As announced August 25, 2004, Westamerica signed a definitive agreement to acquire Redwood Empire Bancorp, parent company of National Bank of the Redwoods. The transaction is valued at approximately $148 million, of which, approximately $57 million will be paid in cash and the remainder by issuance of Westamerica common stock. Within this earlier announcement, Westamerica stated its intention to reduce the allocation of its operating cash flow toward the repurchase and retirement of its common stock in order to meet the approximate $57 million cash payment for this transaction.

Westamerica Bancorporation, through its wholly owned subsidiary Westamerica Bank, operates 87 branches throughout 22 Northern and Central California counties. At September 30, 2004, the company had total assets outstanding of $4.6 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, 2004 and Form 10-K for the year ended December 31, 2003, 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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