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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
December 23, 2008
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WESTAMERICA BANCORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
CALIFORNIA
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(State or Other Jurisdiction of Incorporation)
001-9383 94-2156203
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(Commission File Number) (IRS Employer Identification No.)
1108 Fifth Avenue, San Rafael, California 94901
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(Address of Principal Executive Offices) (Zip Code)
(707) 863-6000
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(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
[] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
[] Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4c))
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Form 8-K
Item 2.02, Results of Operations and Financial Condition
Westamerica Bancorporation (NASDAQ: WABC) expects to release results of
operations for the fourth quarter 2008 and financial condition as of December
31, 2008 on January 15, 2009 at approximately 8:00 a.m. Pacific Time. The
following discussion provides an update of operating results given current
environmental and other conditions.
Westamerica expects to report a net interest margin of approximately 5.42
percent for the fourth quarter 2008. Recent monetary actions by the Federal Open
Market Committee of the Federal Reserve (FOMC) have lowered the target
range for the federal funds rate. Abundant liquidity has existed in the market
for federal funds throughout the fourth quarter 2008, causing effective
borrowing rates to be below the target rate set by the FOMC. The decline in
short-term rates has allowed Westamerica's Management to significantly reduce
its cost of borrowing funds. Westamerica expects its cost of funds to be
approximately 0.51 percent for the fourth quarter 2008.
Management expects net loan charge-offs of approximately $6.7 million in the
fourth quarter. The higher level of charge-offs is primarily due to two loan
relationships acquired in the 2005 acquisition of Redwood Empire Bancorp
(REBC). One of the lending relationships, initially disclosed in April 2008, has
loan collateral comprised of developed land and residential real estate
properties located north of Sacramento, California. At September 30, 2008, these
loans totaling $9.4 million were on non-accrual status. Management has commenced
loan collateral foreclosure proceedings and estimates loan charge-offs of $3.6
million in the fourth quarter 2008. The other REBC acquired lending
relationship is a $3.6 million construction loan relationship placed on non-
accrual status during the fourth quarter 2008. The loan collateral is comprised
of six substantially completed residences and nine developed lots in Petaluma,
California. Westamerica anticipates recording a $950 thousand charge-off on this
loan relationship in the fourth quarter 2008. The remaining estimated net
charge-offs of $2.1 million represent charge-offs of automobile, commercial and
other loans.
Management has reviewed forecasted levels of loan charge-offs and applied its
judgement in assessing the level of the allowance for loan losses. The Company
will record a $900 thousand provision for loan losses for the fourth quarter
2008. The allowance for loan losses at December 31, 2008 is expected to total
approximately $44.4 million. Management does not expect non-performing assets
(non-performing loans and foreclosed loan collateral) to exceed $17 million at
December 31, 2008, including the non-performing assets described above.
In the second and third quarters of 2008, Westamerica recognized securities
losses on FHLMC and FNMA preferred stock. The value of these securities has
continued to decline throughout the fourth quarter. Based on current values,
Westamerica expects to record "other than temporary impairment" of approximately
$1.9 million after tax due to declines in value of these preferred stocks and
other common stocks.
Excluding the "other than temporary impairment" charge referred to above, the
Company expects to report an annualized return on average shareholders' equity
of 22 percent for the fourth quarter 2008, and an efficiency ratio (operating
expenses / revenues) of 41 percent. The Company's share repurchase activity is
not expected to have a meaningful impact on the average number of shares
outstanding during the fourth quarter 2008.
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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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Signatures
Pursuant to the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly
authorized.
Westamerica Bancorporation
/s/ JOHN "ROBERT" THORSON
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John "Robert" Thorson
Senior Vice President and Chief Financial Officer
December 23, 2008