Westamerica Bancorporation posts higher 2nd-quarter profit as bad loans decline

Westamerica posts 7 percent gain in 2nd-qtr profit

SAN RAFAEL, Calif. — Westamerica Bancorporation on Tuesday said its second-quarter net income rose 7 percent — despite lower lending and fee revenue — because its rate of uncollectable loans dropped.

The parent of Westamerica Bank posted net income applicable to common shareholders of $23.6.million, or 80 cents per share, in the period that ended June 30. That’s compared with $22.1 million, or 75 cents per share, a year earlier.

Analysts polled by Thomson Reuters, on average, expected profit of 80 cents per share.

Net interest income, or money earned from deposits and loans, slipped to $56.6 million, from $62.3 million last year.

The bank attributed the decline to lower levels of interest-earning assets, noting that the weak economy and efforts by businesses and individuals to trim debt have reduced loan volumes. Total loans fell 14 percent to $2.9 billion, and total deposits fell 7 percent to $3.9 billion.

The provision for loan losses, or money set aside to cover souring loans, increased 8 percent to $2.8 million for the second quarter, up from $2.6 million for the 2009 period.

Non-performing loans, or loans considered past due, dropped 32 percent to $20.7 million, from $30.2 million a year ago.

Non-interest income, or earnings from fees and charges, was $15.8 million, down 4 percent from $16.4 million last year.

In afternoon trading, Westamerica shares added 92 cents to $55. The stock has changed hands between $45.42 and $61.25 in the past 52 weeks.