Westamerica Bank

January 20, 2004

For Immediate Release


San Rafael, CA: Westamerica Bancorporation (NASDAQ: WABC), parent company of Westamerica Bank, today reported record net income for the fourth quarter of 2003 of $24.3 million, up from $23.3 million for the fourth quarter of 2002. Fourth quarter 2003 diluted earnings per share were $0.73, up from $0.68 for the fourth quarter of 2002. The return on average common equity (ROE) for the fourth quarter of 2003 was 29.4 percent, and the return on assets (ROA) was 2.17 percent, compared to 29.2 percent and 2.23 percent, respectively, for the fourth quarter of 2002.

Net income for the year ended December 31, 2003 was a record $95.1 million, up 9 percent from $87.1 million for 2002. Diluted earnings per share increased 12 percent to $2.85 for the year 2003, compared to $2.55 for the year 2002. The ROE for 2003 was 29.4 percent, while the ROA was 2.19 percent, compared to 28.7 percent and 2.17 percent, respectively, for 2002.

“Fourth quarter and full year 2003 profitability benefited from our focus on gathering low-cost deposits, expense control, and continuing superior credit quality," said Chairman, President and CEO David Payne. "During 2003, our low-cost deposits grew 7 percent, reducing our average cost of funds to 0.55 percent in the fourth quarter. Our noninterest expense declined 1.6 percent to $101.7 million for 2003 compared to $103.3 million for 2002. Net loan losses for 2003 were only 0.15 percent of average loans," continued Payne.

Net interest income on a fully taxable equivalent basis was $54.8 million in the fourth quarter of 2003 compared to $54.3 million in the prior quarter and $55.0 million in the same quarter a year ago. The fourth quarter 2003 net interest margin on a taxable equivalent basis was 5.26 percent, compared to 5.31 percent in the previous quarter and 5.71 percent in the fourth quarter of 2002. For the full year, net interest income and the net interest margin on a taxable equivalent basis were $217.4 million and 5.39 percent, compared to $215.7 million and 5.76 percent, respectively, for 2002.

Nonperforming loans and repossessed loan collateral were $7.6 million at December 31, 2003 down $1.0 million from the previous quarter-end and down $2.7 million from December 31, 2002. Nonperforming loans and OREO represented 0.17 percent of total assets at December 31, 2003. The provision for loan losses was $750,000 for the fourth quarter of 2003, unchanged from the previous quarter and down from $900,000 in the year ago quarter. Net charge-offs totaled $1.0 million or 0.18 percent of average loans (annualized) in the fourth quarter of 2003. For the year, net charge-offs were $3.6 million, or 0.15 percent of average loans, compared to the provision for loan losses of $3.3 million.

Noninterest income in the fourth quarter of 2003 totaled $10.5 million, compared to $11.0 million and $10.2 million, respectively, reported in the previous and year ago quarters. The decrease from the prior quarter is primarily attributable to lower service charges on deposit accounts, merchant credit card income, mortgage banking income, and ATM fees. The increase from the year ago quarter is primarily attributable to higher service charges on deposit accounts and other income partially offset by lower mortgage banking income.

Noninterest expense for the fourth quarter of 2003 totaled $25.2 million compared to $25.5 million in the prior quarter and $25.8 million in the year ago quarter. The 1.5 percent decrease from the prior quarter is primarily attributable to lower salaries and benefits, and merchant card expense offset in part by higher operational losses. The 2.3 percent decrease from the year ago quarter is primarily attributable to lower furniture expense, salaries and benefits, merchant card expense, and amortization of core deposit intangibles offset in part by higher telephone expense. For the full year, noninterest expense was $101.7 million, down 1.6 percent from $103.3 million for 2002. The decrease is primarily attributable to reduced salaries and benefits, equipment expense, merchant card expense, amortization of core deposit intangibles, and stationery and supplies offset in part by higher occupancy, and telephone expenses. The efficiency ratio (expenses divided by revenues) for the fourth quarter of 2003 was 38.6 percent compared with 39.1 percent in the previous quarter and 39.5 percent in the year ago quarter. For the year 2003, the efficiency ratio was 39.1 percent compared to 41.0 percent for 2002.

Shareholders' equity was $340 million at December 31, 2003, compared to $341 million at December 31, 2002. The equity-to-asset ratio was 7.4 percent at December 31, 2003, compared to 8.1 percent at December 31, 2002. Share repurchases of Company common stock, net of share issuances, approximated 436 thousand shares in the fourth quarter 2003. At December 31, 2003, there were approximately 1.5 million shares remaining to purchase under the existing share repurchase program.

At December 31, 2003, the Company had total assets and total loans outstanding of $4.6 billion and $2.3 billion, respectively.

Westamerica Bancorporation, through its wholly owned subsidiary Westamerica Bank, operates 88 branches throughout 22 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, 2003 and Form 10-K for the year ended December 31, 2002, 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 2003 and the Gramm-Leach-Bliley Act of 1999, the combination of the former Kerman State Bank 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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