UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant¨                            Filed by a Party other than the Registrant¨

Check the appropriate box:

Westamerica Bancorporation

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

1108 Fifth Avenue

San Rafael, California 94901

March 20, 200619, 2007

To Our Shareholders:

You are cordially invited to attend the Annual Meeting of Shareholders of Westamerica Bancorporation. It will be held at11:00 a.m. Pacific Time on Thursday, April 27, 2006,26, 2007, at the Fairfield Center for Creative Arts, 1035 West Texas Street, Fairfield, Californiaas stated in the formal notice accompanying this letter. We hope you will plan to attend.

At the Annual Meeting, the Shareholders will be asked to elect directorsDirectors and to conduct any other business that properly comes before the Annual Meeting.

In order to ensure your shares are voted at the Annual Meeting, you can vote through the Internet, by telephone or by mail. Instructions regarding Internet and telephone voting are included on the Proxy Card. If you elect to vote by mail, please sign, date and return the Proxy Card in the accompanying postage-paid envelope. The Proxy Statement explains more about voting. If you attend the Annual Meeting, you may vote in person even though you previously voted your proxy.

We look forward to seeing you at the Annual Meeting on Thursday, April 27, 2006,26, 2007, at the Fairfield Center for Creative Arts.

Sincerely,

DAVID L. PAYNE

Chairman of the Board, President and Chief Executive Officer

WESTAMERICA BANCORPORATION

1108 Fifth Avenue

San Rafael, California 94901

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

Date and Time

Thursday, April 27, 2006,26, 2007, at 11:00 a.m. Pacific Time

Place

Fairfield Center for Creative Arts, 1035 West Texas Street, Fairfield, California

Items of Business

1. To elect ten directorsnine Directors to serve until the 20072008 Annual Meeting of Shareholders; and

2. To transact such other business as may properly come before the Annual Meeting and any adjournments or postponements.

Who Can Vote?

Shareholders of record at the close of business on February 27, 200626, 2007 are entitled to notice of and to vote at the Annual Meeting or any postponement or adjournment thereof.

Admission to the Meeting

Admission to the Meeting will require a ticket. If you are a Shareholder of record and plan to attend, please check the appropriate box on the Proxy Card and an admission ticket will be mailed to you. If you are a Shareholder whose shares are held through an intermediary, such as a bank or broker, and you plan to attend, please request a ticket by writing to the Shareholder Relations Department A-2B, Westamerica Bancorporation, P.O. Box 1250, Suisun City, California 94585-1250. Evidence of your ownership, which you can obtain from your bank, broker or other intermediary, must accompany your letter.

Annual Report

Westamerica Bancorporation’s Annual Report to Shareholders for the fiscal year ended December 31, 20052006 is enclosed. The Annual Report contains financial and other information about the activities of Westamerica Bancorporation, but does not constitute a part of the proxy soliciting materials.

BY ORDER OF THE BOARD OF DIRECTORS

Kris Irvine

VP/Corporate Secretary

Dated: March 20, 200619, 2007

YOUR VOTE IS IMPORTANT

YOU ARE URGED TO COMPLETE, SIGN, DATE AND PROMPTLY RETURN YOUR PROXY, OR VOTE BY TELEPHONE OR THE INTERNET USING THE PROCEDURES DESCRIBED IN THE PROXY STATEMENT, SO THAT YOUR SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES.

TABLE OF CONTENTS

WESTAMERICA BANCORPORATION

1108 Fifth Avenue

San Rafael, California 94901

PROXY STATEMENT

March 20, 200619, 2007

GENERAL

This Proxy Statement and the accompanying Proxy Card are being mailed to Shareholders of Westamerica Bancorporation (“Westamerica” or the “Corporation”) beginning on or about March 20, 2006.19, 2007. The Westamerica Board of Directors is soliciting proxies to be used at the 20062007 Annual Meeting of Westamerica Shareholders, which will be held at 11:00 a.m. Pacific Time, Thursday, April 27, 2006,26, 2007, or at any adjournment or postponement of the Meeting. Proxies are solicited to give all Shareholders of record (“Record Holder”) an opportunity to vote on matters to be presented at the Annual Meeting. In the following pages of this Proxy Statement, you will find information on matters to be voted on at the Annual Meeting.

Voting Information

Who Can Vote.You are entitled to vote if you were a Record Holder of Westamerica common stock as of the close of business on February 27, 2006.26, 2007. Your shares can be voted at the Meeting only if you are present or represented by a valid proxy. If your shares of common stock are held by a bank, broker or other nominee in “street name,”you are a “beneficial owner” and will receive voting instructions from the record holderbank, broker or other nominee (including instructions, if any, on how to vote by telephone or through the Internet). You must follow these instructions in order to have your shares voted by proxy.voted. To be able to vote in person at the Annual Meeting, beneficial owners must obtain and bring to the Annual Meeting a proxy from the institution that holds your shares, indicating that you were the beneficial owner of the shares on February 27, 2006,26, 2007, the record dateRecord Date for voting.

Proxy Card.The Board has designated Arthur C. Latno, Jr., Ronald A. Nelson and Edward B. Sylvester to serve as Proxies for the Annual Meeting. As Proxies, they will vote the shares represented by proxies at the Annual Meeting. If you sign, date and return your Proxy Card but do not specify how to vote your shares, they will be voted by the Proxies in favor of the election of all of the directorDirector nominees. The Proxies will also have discretionary authority to vote in accordance with their judgment on any other matter that may properly come before the Meeting that we did not have notice of by February 6, 2006.3, 2007.

Quorum and Shares Outstanding.A quorum, which is a majority of the toataltotal shares outstanding as of the Record Date, must be present to hold the Meeting. A quorum is calculated based on the number of shares represented by Shareholders attending in person or by proxy. On February 27, 2006, 31,648,83826, 2007, 30,321,619 shares of Westamerica common stock were outstanding. We also count broker non-votes, which we describe below, as shares present or represented at the Meeting for the purpose of determining whether a quorum exists.

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Required Votes – Election of Director Nominees.Each share is entitled to one vote, except in the election of directorsDirectors where a Shareholder may cumulate votes as to candidates nominated prior to voting, but only

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when a Shareholder gives notice of intent to cumulate votes prior to the voting at the Meeting. If any Shareholder gives such notice, all Shareholders may cumulate their votes for nominees. Under cumulative voting, each share carries as many votes as the number of directorsDirectors to be elected, and the Shareholder may cast all of such votes for a single nominee or distribute them in any manner among as many nominees as desired. In the election of directors,Directors, the tennine nominees receiving the highest number of votes will be elected. If your proxy is marked “Withhold” with regard to the election of any nominee, your shares will be counted toward a quorum but they will not be voted for or against the election of that nominee.

OtherMatters.Approval of any other matter considered at the Meeting will require the affirmative vote of a majority of the shares present or represented by proxy and entitled to votevoting at the Meeting.

Broker Non-Votes.Broker non-votes will be included as “present” for the purpose of determining the presence of a quorum. A broker non-vote occurs under the stock exchange rules when a broker is not permitted to vote on a matter without instructions from the beneficial owner of the shares and no instruction is given on a timely basis. Brokers may vote at their discretion on routine matters, such as the election of directors,Directors, but not on non-routine matters.

How You Can Vote.Record Holders may vote by proxy or in person at the Meeting. To vote by proxy, you may select one of the following options:

Vote by Telephone.You can vote your shares by telephone by calling the toll-free telephone number shown on your Proxy card.Card. Telephone voting is available 24 hours a day, seven days a week. Easy-to-follow voice prompts allow you to vote your shares and confirm that your instructions have been properly recorded. Our telephone voting procedures are designed to authenticate the Shareholder by using individual control numbers, which you will find on your Proxy Card. If you vote by telephone, you shouldNOTreturn your Proxy Card.

Vote by Internet.You can choose to vote on the Internet. The web sitewebsite for Internet voting is shown on your Proxy your Card. Internet voting is available 24 hours a day, seven days a week. You will be given the opportunity to confirm that your instructions have been properly recorded. Our Internet voting procedures are designed to authenticate the Shareholder by using individual control numbers, which you will find on your Proxy Card. If you vote on the Internet, you shouldNOTreturn your Proxy Card.

If you vote by telephone or Internet, your vote must be received by 1:00 a.m., Central Time, on April 27, 200626, 2007 to ensure that your vote is counted. For Westamerica Bancorporation Tax Deferred Savings/Retirement Plan (ESOP) participants, your vote must be received by 1:00 a.m., Central Time, on April 25, 2006.24, 2007.

Vote by Mail.If you choose to vote by mail, simply mark your Proxy Card, date and sign it, and return it in the postage-paid envelope provided.

We have been advised by counsel that these telephone and Internet voting procedures comply with California law.

Revocation of Proxy.Record Holders who vote by proxy, whether by telephone, Internet or mail, may revoke that proxy at any time before it is voted at the Meeting. You may do this by: (a) signing another Proxy Card with a later date and delivering it to us prior to the Meeting or sending a notice of revocation

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to the Corporate Secretary of Westamerica at 1108 Fifth Avenue, San Rafael, CA 94901; (b) voting at

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a later time by telephone or on the Internet prior to 1:00 a.m. Central Time, on April 27, 2006;26, 2007 (April 24, 2007 for ESOP participants); or (c) attending the Meeting in person and casting a ballot. If you hold shares in street name, you may change your vote by submitting new voting instructions to your broker or other nominee.

Additional Information

Householding.As permitted by the Securities Exchange Act of 1934 (the “Exchange Act”) only one copy of the Annual Report and the Proxy Statement is being delivered to shareholdersShareholders residing at the same address, unless such shareholdersShareholders have notified their bank, broker, Computershare Investor Services or other holder of record that they wish to receive separate mailings. If you are a beneficial holder and own your shares in street name, contact your broker, bank or other holder of record to discontinue householding and receive your own separate copy of Proxy Statements and Annual Reports in future years. If you are a registered holder and own your shares through Computershare Investor Services, contact Computershare toll-free at 877-588-4258 or in writing directed to Computershare Investor Services, 2 North LaSalle250 Royall Street, Chicago, IL 60602Mail Stop 1A, Canton, MA 02021 to discontinue householding and receive multiple Annual Reports and Proxy Statements in future years. To receive an additional Annual Report or Proxy Statement this year, contact Shareholder Relations at 707-863-6992.

At least one account at your address must continue to receive an Annual Report, unless you elect to receive future Annual Reports and Proxy Statements over the Internet. Mailing of dividends, dividend reinvestment statements, and special notices will not be affected by your election to discontinue duplicate mailings of the Annual Report and Proxy Statement. Regardless of householding, each shareholderShareholder will continue to receive a separate Proxy Card and return envelope.

Electronic Access to Proxy Materials and Annual Reports.This Proxy Statement and the 20052006 Annual Report are available on the Corporation’s Internet site atwww.westamerica.com/investor_relations/index.html.index.html. If you hold your Westamerica common stock in street name through a broker, a bank or other nominee, you may have the option of securing your Proxy Statement and Annual Report over the Internet. If you vote this year’s proxy electronically, you may also be able to elect to receive future Proxy Statements, Annual Reports and other materials electronically by following the instructions given by your bank, broker, or other holder of record when you vote.

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Stock Ownership

Security Ownership of Certain Beneficial Owners. The Corporation does not know of any person or group thatBased on Schedule 13G filings, Shareholders beneficially ownedholding more than 5% of itsWestamerica common stock on February 27,outstanding as of December 31, 2006, except asin addition to those disclosed below.in the Security Ownership of Directors and Management below, were:

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Security Ownership of Directors and Management.The following table shows the number of common shares and the percentage of the common shares beneficially owned (as defined below) by each of the current directors,Directors, by the Chief Executive Officer (“CEO”), by the fourChief Financial Officer (“CFO”), and by the three other most highly compensated executive officers during 2005 (plus one additional officer who was no longer in office at the end of 2005),2006, and by all directorsDirectors and executive officersOfficers of the Corporation as a group as of February 27, 2006.26, 2007. For the purpose of the disclosure of ownership of shares by directorsDirectors and managementOfficers below, shares are considered to be “beneficially” owned if a person, directly or indirectly, has or shares the power to vote or direct the voting of the shares, the power to dispose of or direct the disposition of the shares, or the right to acquire beneficial ownership of shares within 60 days of February 27, 2006.26, 2007.

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Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Corporation’s directorsDirectors and executive officersExecutive Officers and persons who own more than 10% of a registered class of the Corporation’s equity securities to file with the SecuritiesSEC and Exchange Commission (the “SEC”) and NASDAQNASDAQ initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Corporation, and to send a copy to the Corporation.

To the Corporation’s knowledge except as disclosed below, and based solely on a review of the copies of reports furnished to the Corporation and written representations that no other reports were required, during the fiscal year ended December 31, 2005,2006, all Section 16(a) filing requirements were timely complied with by Westamerica’s officers directors and 10% Shareholders, except for a Form 4 report by Mr. Payne with respect to the gifting of 750 shares on November 9, 2004. Mr. Payne advised representatives of the Corporation prior to the transfer of the gift; however, the Corporation inadvertently failed to file a Form 5 in 2005 to report the gift. In October 2005, the omission was discovered and a report that included the gift was filed on October 26, 2005.Directors.

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PROPOSAL 1–ELECTIONBOARD OF DIRECTORS

Ten directorsProposal 1 – Election Of Directors

Nine Directors have been nominated for election at the Meeting to hold office for the ensuing year and until their successors are elected and qualified. The Proxies will vote for the tennine nominees named below unless you give different voting instructions on your Proxy Card. Each nominee is presently a directorDirector of the Corporation and has consented to serve a new term. The Board does not anticipate that any of the nominees will be unableunavailable to serve as a director,Director, but if that should occur before the Meeting, the Board reserves the right to substitute another person as nominee. The Proxies will vote for any substitute nominated by the Board of Directors. The Proxies may use their discretion to cumulate votes for election of directorsDirectors and cast all of such votes for any one or more of the nominees, to the exclusion of the others, and in such order of preference as they may determine at their discretion.

Nominees

The nominees for election as directorsDirectors are named and certain information with respect to them is given below. The information has been furnished to the Corporation by the respective nominees. All of the nominees have engaged in their indicated principal occupation for more than five years, unless otherwise indicated.

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THE BOARD RECOMMENDS ELECTION OF ALL NOMINEES.

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Board of Directors and Committees

Director Independence

The Board of Directors has considered whether any relationships or transactions related to a director wereinconsistentDirector were inconsistent with a determination that a director is independent.Director’s independence. Based on this review, the Board affirmativelyhas determined that E. Allen, L. E.L.E. Bartolini, E. J.E.J. Bowler, A. C.A.C. Latno, Jr., P. D.P.D. Lynch, C. C.C.C. MacMillan, R. A.R.A. Nelson, C. R.C.R. Otto⁽¹⁾, and E. B.E.B. Sylvester are “independent directors,Directors,” as that term is defined by applicable rules of NASDAQ.in NASDAQ’S rules.

Meetings

The Corporation expects all Boardboard members to attend all meetings, including the Annual Meeting of Shareholders, except for reasons of health or special circumstances. Last year all ten directorsDirectors attended the Annual Meeting. The Board held a total of 11 meetings during 2005.2006. Every directorDirector attended at least 75% of the aggregate of: (i) the 11 Board meetings or that number of Board meetingsMeetings held during thethat period in which they served; and (ii) the total number of meetings of any Committee of the Board on which such directorthe Director served.

Committees of the Board

Executive Committee:

Members:D. L.D.L. Payne, Chairman; A. C.A.C. Latno, Jr., P. D.P.D. Lynch and E. B.E.B. Sylvester.

Number of Meetings in 2005:2006:Ten

Functions:The Board delegates to the Executive Committee subject to the limitations of the California General Corporation Law, any powers and authority of the Board in the management of the business and affairs of the Corporation.Corporation, which the Board is allowed to delegate under California law.

Audit Committee:

Members:R. A.R.A. Nelson, Chairman; L. E.L.E. Bartolini, C. C.C.C. MacMillan and C. R. Otto. E.J. Bowler.

The Board of Directors has determined that all members are independent, as that term is defined by applicable rules of NASDAQ.NASDAQ. The Board has also designated Mr. Nelson as the “audit committee“Audit Committee financial expert” as defined by the rules of the SEC and is “financially sophisticated” under NASDAQNASDAQ rules. In concluding that Mr. Nelson is an audit committeethe Audit Committee financial expert, the boardBoard determined that he has:

Designation of a person as an audit committeeAudit Committee financial expert does not result in the person being deemed an expert for any purpose, including under Section 11 of the Securities Act of 1933. The designation does not impose on the person any duties, obligations or liability greater than those imposed on any other Audit Committee member or any other directorDirector and does not affect the duties, obligations or liability of any other member of the Audit Committee or Board of Directors.

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Number of Meetings in 2005:2006:Five

Functions:The Audit Committee provides independent, objective oversight of the integrity of the Corporation’s financial statements, the Corporation’s compliance with legal and regulatory requirements, the independence and performance of the Corporation’s independent auditor as it performs audit, review or attest services, and the Corporation’s internal audit and control function. It selects and retains the independent auditors, reviews the plan and the results of the auditing engagement and acts pursuant to a written charter that was amended by the Board on January 21, 200425, 2007 and filed with our 2004 Proxy Statement.is attached as Exhibit A. The Audit Committee Report that follows below more fully describes the responsibilities and the activities of the Audit Committee.

Employee Benefits and Compensation Committee:

Members:P. D.P.D. Lynch, Chairman; E. Allen, A.C. Latno, Jr., and R. A.R.A. Nelson.

The Employee Benefits and Compensation Committee of the Board of Directors (the “Compensation Committee”) is comprised solely of Directors who are not current or former employees of Westamerica or any of its affiliates. They are independent as defined by NASDAQ rules.

Number of Meetings in 2006:Five

Functions:The Compensation Committee administers the Corporation’s stock option plan, the tax deferred savings and retirement plan and the profit sharing plan. It administers the Corporation’s compensation and reviews and reports to the Board the compensation level for executive officers, including the CEO, of the Corporation and its subsidiaries.

The Compensation Committee determines annual corporate performance objectives for equity compensation and cash bonuses and their related corporate, divisional and individual targets. Based on the CEO’s assessment of the extent, to which each executive officer met those objectives and targets, the Committee determines each executive officer’s annual equity compensation and cash bonus. The Compensation Committee also establishes the individual goals and targets for the CEO. All compensation recommendations of the Compensation Committee must be reviewed by the full Board of Directors. The role of the Compensation Committee is described in greater detail under the section entitled “Compensation Discussion and Analysis.”

The Compensation Committee does not have a charter, as it is not required by NASDAQ rules. The Compensation Committee has the authority to seek assistance from officers and employees of the Corporation as well as external legal, accounting and other advisors. It has not retained outside consultants for compensation advice, but can request assistance on an as needed basis. It does not delegate authority to anyone outside of the Compensation Committee. The Human Resources Department supports the Compensation Committee by fulfilling certain administrative duties regarding the compensation programs.

Nominating Committee:

Members:A.C. Latno, Jr., Chairman; P.D. Lynch, and E.B. Sylvester.

The Board of Directors has determined that all members are independent, as that term is defined by applicablein the rules of NASDAQ.NASDAQ.

Number of Meetings in 2005:Five

Functions:The Employee Benefits and Compensation Committee administers and carries out the terms of the Corporation’s employee stock option plans as well as the tax deferred savings and retirement plan and the profit-sharing plan. The Employee Benefits and Compensation Committee administers the Corporation’s compensation programs and reviews and recommends to the Board the compensation level for the executive officers of the Corporation and its subsidiaries. The Employee Benefits and Compensation Committee also reviews the performance of and recommends promotions for the executive officers of the Corporation.

Nominating Committee:

Members:A. C. Latno, Jr., Chairman; P. D. Lynch, and E. B. Sylvester. The Board of Directors has determined that all members are independent, as that term is defined by applicable rules of NASDAQ.

Number of Meetings in 2005:2006:One

Functions:The Nominating Committee is governed by a written charter which was adopted February 24, 2004amended January 25, 2007 and is attached to our 2004 Proxy Statement.as Exhibit B.

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The Nominating Committee is responsible for screeningscreens and recommendingrecommends qualified candidates for Board membership. TheThis Committee will annually recommendrecommends a slate of nominees to be submitted for election at each Annual Meeting. As part of that process, it will evaluateevaluates and considerconsiders all candidates submitted by Shareholders in accordance with the Corporation’s bylaws, and will considerconsiders each existing Board member’s contributions to evaluate his or her experience as a Director prior to recommending the Board member for renomination each year.contributions. The Committee will applyapplies the same evaluation standards to evaluate candidates whether the candidate was recommended by a Shareholder or otherwise. The minimum criteria set for all nominees is found below.

Nominating Directors:For the Annual Meeting to be held in 2007, theThe Nominating Committee will consider Shareholder nominations for election to the Board submitted in accordance with Section 2.14 of the Bylaws of the Corporation, whichCorporation. That section requires, among other things, that nominations be submitted in writing and must be received by the Corporate Secretary at least 45 days before the anniversary of the date on which the Corporation first mailed its proxy materials for the prior year’s Annual Meeting of Shareholders. In the eventIf the date for the current year’s Annual Meeting has changedchanges more than 30 days from the date

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on which the prior year’s meeting was held, thenthe Corporation must receive notice must be received a reasonable time before the Corporation mails its proxy materials for the current year.

Any written nomination shouldNominations must include the following information:

The Committee has specified the following minimum qualifications it believes must be met by a nominee for a position on the Board:

Loan and Investment Committee:

Members:E. B.E.B. Sylvester, Chairman; E. Allen, E. J. Bowler, A. C.C.R. Otto⁽¹⁾, A.C. Latno, Jr. and C. C.C.C. MacMillan.

Number of Meetings in 2005:2006:ElevenTen

Functions:The Loan and InvestmentThis Committee is responsible for reviewingreviews major loans and investment policies and for monitoring the activities related tomonitors the Community Reinvestment Act.Act compliance.

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Compensation of Nonemployee DirectorsEXECUTIVE COMPENSATION

During 2005, nonemployee directorsCompensation Discussion & Analysis

The Compensation Committee governs the executive compensation program that combines three compensation elements: base salary, annual non-equity cash incentives, and long-term stock grants.

Several compensation philosophies and practices underlie this program:

The size of stock grants is determined by Westamerica’s corporate performance. Specific criteria for each corporate objective are established for “threshold,” “target,” and “outstanding” performance. The level of performance determines the size of incentive compensation awards.

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Establishing Incentive Levels, Determining Objectives and Measuring Performance

In administering the executive compensation program, the Compensation Committee determines “target” incentives for each position annually, expressed as a percentage of base pay. The Compensation Committee exercises discretion in establishing “target” incentives in an effort to provide competitive pay practices while motivating and rewarding performance that benefits the Corporation’s long-term financial performance and Shareholder interests.

At the beginning of each calendar year, the Compensation Committee establishes annual corporate performance objectives. In establishing corporate performance objectives, the Compensation Committee takes into consideration the current operating environment for the commercial banking industry as well as internal management policies and practices which would, in the Compensation Committee’s opinion, benefit the long-term interests of the Corporation and its Shareholders. The Compensation Committee monitors the banking industry’s operating environment throughout the ensuing year, and may exercise discretion in adjusting corporate performance objectives during the year.

The operating environment for the commercial banking industry is impacted by a myriad of factors including, but not limited to, local, national and global economic conditions, interest rate levels and trends, monetary policies of the Federal Reserve Board and its counterparts in other countries, fiscal policies of the United States government and other global political conditions, liquidity in capital markets, the demand for capital by commercial enterprises and consumers, new financial products, competitive response to changing conditions within the industry, trade balances, the changing values of real estate, currencies, commodities, and other assets, and other factors.

Management policies and practices the Board considers in establishing corporate performance objectives include, but are not limited to, management of the Corporation’s balance sheet and product pricing in a manner which will provide consistent growth in long-term financial results for Shareholders, growth in financial products offered by the Corporation’s, adherence to internal controls, management of the credit risk of Corporation’s loan portfolio, the results of internal, regulatory and external audits, service quality delivered to the Corporation’s customers, service quality of “back office” support departments provided to those offices and departments directly delivering products and services to the Corporation’s customers, maintenance of operating policies and procedures which remain appropriate for risk management in a dynamic environment, timely and efficient integration of acquired companies, operational efficiencies, and capital management practices.

RPS shares represent awards of Westamerica’s common stock subject to achievement of performance objectives established by the Compensation Committee. The Amended and Restated Plan of 1995 (“Amended Stock Option Plan”) defines the performance factors the Board must use in administering RPS grants as one or more of the following: earnings, diluted earnings per share, revenue and revenue per diluted share, expenses, share price, return on equity, return on equity relative to the average return on equity for similarly sized institutions, return on assets, return on assets relative to the average return on assets for similarly sized institutions, efficiency ratio (operating expenses divided by operating revenues), net loan losses as a percentage of average loans outstanding, nonperforming assets, and nonperforming assets as a percentage of total assets.

In addition to establishing corporate performance objectives, the Compensation Committee also establishes individual goals for the CEO. In regard to the other executives named in the accompanying tables, the CEO recommends divisional and individual performance objectives to the Compensation Committee, which considers, discusses, adjusts as necessary, and adopts such performance objectives.

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At the beginning of each calendar year, the Compensation Committee reviews corporate, divisional, and individual performance against the performance objectives for the year just completed. After thorough review and deliberation, the Compensation Committee determines the recommended amount of individual cash incentives and stock-based incentive awards. The Compensation Committee reports such incentives to the Board of Directors. Meetings of the Compensation Committee and Board of Directors routinely occur in January, immediately following the closure of the calendar year for which performance is measured for incentive compensation purposes.

Stock Grants

Long-term stock grants may only be awarded under Shareholder approved stock-based incentive compensation plans. The Amended Stock Option Plan was approved by Shareholders on April 24, 2003. The Amended Stock Option Plan amended the Corporation’s Stock Option Plan of 1995, which was previously approved by Shareholders on April 25, 1995. The Corporation’s Proxy Statement dated March 17, 2003, as filed with the Securities and Exchange Commission (the “SEC”) on that date, summarizes the Amended Stock Option Plan’s changes from the predecessor plan. Such changes included:

The Amended Stock Option Plan allows four types of stock-based compensation awards:

Incentive Stock Options(“ISO”) allow the optionee to buy a certain number of shares of Westamerica common stock at a fixed price which is established on the date of the option grant. ISOs are intended to meet the requirements of Section 422 of the Internal Revenue Code which provide advantages if certain conditions are met. If the optionee holds the acquired stock for the designated holding period, the optionee defers the timing of recognizing taxable income related to exercising the ISO. If the optionee complies with the ISO requirements, the Corporation does not receive a corporate tax deduction related to the shares issued.

Nonqualified Stock Options(“NQSO”) also give the optionee the option to buy a certain number of shares of Westamerica common stock at a fixed price which is established on the date of grant. Unlike ISOs, NQSO do not allow deferral of taxable income for the optionee. At the time NQSO are exercised, the optionee incurs taxable income equal to the spread between the exercise price and the market price of the stock, and the Corporation receives a corporate tax deduction in the same amount.

Stock Appreciation Rights(“SAR”) provide the holder a cash payment equal to the difference between the fair market value of the Corporation’s common stock on the date the SAR is surrendered and the fair market value of the Corporation’s common stock on the date the SAR was granted. The optionee incurs taxable income at the time the SAR is settled and the Corporation gets a corporate tax deduction in the same amount.

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Restricted Performance Share Grants(“RPS”), as noted above, awards of the Corporation’s common stock is subject to the achievement of performance objectives. Award recipients receive shares at the end of the performance measurement period only if performance objectives are achieved. The number of shares received is subject to the level of performance achieved. The award recipient incurs taxable income at the time any RPS vests and the Corporation receives a corporate tax deduction in the same amount.

Determination of Awards to Grant

In determining which type of stock-based compensation awards to grant, the Compensation Committee considers the attributes of each form of incentive. For example, the ability to motivate management to make decisions based on the long-term interests of Shareholders, the desire to compensate with shares rather than cash, and the tax consequences of each type of award. The Compensation Committee retains the latitude to utilize all forms of incentives provided under the Amended Stock Option Plan. In the current and preceding years, the Compensation Committee has utilized NQSO and RPS based on the motivational aspects of stock price appreciation, the settlement in shares rather than cash, and the preservation of tax deductions for the Corporation. At February 26, 2007, the Corporation had no ISO or SAR awards outstanding.

Determination of Option Exercise Price

The Amended Stock Option Plan also requires the exercise price of each NQSO or ISO to be no less than one hundred percent (100%) of the fair market value of the Corporation’s common stock on the date of grant. As described above, the Amended Stock Option Plan does not allow re-pricing stock options for poor stock performance.

Stock-based compensation awards are submitted by the Compensation Committee to the full Board of Directors for review. As described above, these meetings have routinely occurred in the January immediately following the closure of the calendar year for which performance is measured for incentive compensation purposes. The Compensation Committee meeting has routinely been held during the same week as the related Board of Directors meeting. These January meetings follow by no more than ten business days, the Corporation’s public disclosure of its financial earnings results for the preceding year. As a result, stock option grants are awarded, and the exercise price of such grants are determined, at a time when the Corporation has broadly disseminated its financial condition and current operating results to the public. The Corporation’s outstanding stock option grants are dated, and related stock option exercise prices are determined, on the January dates the Compensation Committee and Board of Directors meet approve such grants.⁽¹⁾

Long-Term Incentive Attributes

The Board of Directors has designated the Compensation Committee as the administrator of the Amended Stock Option Plan. The Compensation Committee reports to the Board the terms and conditions of stock option awards. In carrying out this responsibility, the Compensation Committee designs such awards as long-term incentives. The terms and conditions of currently outstanding awards include:

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Nonqualified Deferred Compensation Programs

The Corporation maintains nonqualified deferred compensation programs to provide senior and mid-level executives facilities to defer compensation in excess of the annual limits imposed on the Corporation’s “401(k)” plan. The Corporation believes these tax deferral programs enhance loyalty and motivate retention of executives. These programs allow executives to defer cash pay and RPS shares upon vesting. The programs also allow Directors to defer Director fees.

Compensation in the Event of a Change in Control

The banking industry has significant merger and acquisition activity. To promote retention of senior executives, unvested NQSO and RPS grants contain “change in control” provisions, which trigger full vesting upon a change in control.

The Corporation also maintains a Severance Payment Plan covering all employees to promote employee retention. The Severance Payment Plan provides salary continuation benefits for employees in the event of a change in control. The amount of salary continuation benefits is based on years of service and corporate title, but in no event exceed the equivalent of one times annual retainersalary. All named executive officers are eligible for one year’s salary under the plan.

Employment Contracts

None of $14,000. Each nonemployee director received $1,000the executives named in the accompanying tables have employment contracts with the Corporation.

Other

Internal Revenue Code (“IRC”) Section 162(m) places a limit of $1,000,000 on the amount of compensation that may be deducted by the Corporation in any year with respect to certain of the Corporation’s highest-paid executives. Certain “performance-based compensation” is not counted toward this limit. The Corporation intends generally to qualify compensation paid to executive officers for each meetingdeductibility under the IRC, including Section 162(m), but reserves the right to pay compensation that is not deductible under Section 162(m).

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Board Compensation Committee Report

We, the Compensation Committee of the Board of Directors of the Corporation, have reviewed and discussed the Compensation Discussion and Analysis with management. Based on that hereview and discussion, we have recommended to the Board of Directors inclusion of the Compensation Discussion and Analysis in this Proxy Statement and the Company’s Annual Report on Form 10-K for the year ended December, 31, 2006.

Submitted by the Employee Benefits and Compensation Committee

Patrick D. Lynch, Chairman

Etta Allen

Arthur C. Latno, Jr.

Ronald A. Nelson

Compensation Committee Interlocks And Insider Participation

No member of the Compensation Committee is a current or she attended.former officer or employee of the Corporation or any of its subsidiaries, or entered into (or agreed to enter into) any transaction or series of transactions with the Corporation or any of its subsidiaries with a value in excess of $120,000. None of the executive officers of the Corporation has served on the Board of Directors or on the Compensation Committee of any other entity, where one of that entity’s executive officers served either on the Board of Directors or on the Compensation Committee of the Corporation.

During 2005,

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2006 Summary Compensation Table

The following table sets forth summary compensation information for the year ended December 31, 2006 for the chief executive officer, chief financial officer and each nonemployee director received $500of the other three most highly compensated executive officers as of the end of the last fiscal year. These persons are referred to as named executive officers elsewhere in this proxy statement.

SUMMARY COMPENSATION TABLE FOR FISCAL YEAR 2006

Based on the compensation disclosed in the Summary Compensation Table, approximately 24% of total compensation comes from base salaries. See Compensation Analysis and Discussion for more details.

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Grants Of Plan-Based Awards Table for Fiscal Year 2006

The material terms of the NQSO’s listed in the table are as follows:

The material terms of the RPS grants are as follows:

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Outstanding Equity Awards Table at Fiscal Year-End 2006

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Option Exercises And Stock Vested Table for each Committee meeting attended. All outside directors are reimbursedFiscal Year 2006

Pension BenefitsTable⁽¹⁾

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Nonqualified Deferred Compensation Table for expenses incurred in attending Board and Committee meetings. The ChairmanFiscal Year 2006⁽¹⁾

Under the Board, D. L. Payne, is compensated as an employee and did not receive an annual retainer or director’s fees.

The Westamerica Bancorporation and Subsidiaries Deferred Compensation Plan (the “Deferred Compensation Plan”) allows nonemployee directors, officers and Directors may defer up to defer some 100% of their Director’s compensation, salary and/or non-equity incentive compensation (cash bonus) into a nonqualified, unfunded deferred compensation program. The interest rate paid during 2006 was 7.5%. The interest rate may be changed annually. Interest is compounded semi-monthly. Participants chose from the following distribution commencement dates: termination of employment, January 1 following termination of employment, or a specific date at least five years from date of deferral. Payment is made in a lump sum unless the participant chooses a four-year, five-year, or ten-year annual installment.

Under the Deferral Plan, 100% of vested RPS shares may be deferred. Dividends paid on such issued and outstanding shares are paid in cash to the deferral participants, and are paid at the same rate as is paid to all other Shareholders. The distribution of deferred shares occurs at least two years after deferral, one month following termination, or the January 1 immediately following termination as elected by the participant at the time of deferral.

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Potential Payments Upon Termination or Change In Control

Payments to be made to the named executive officers in the event of termination of employment or change in control are described below.

Termination

Vested options may be exercised within 90 days of termination and within one year of death or disability.

Deferred compensation account balances are distributed upon termination, the January 1 following termination, or a specific date at least five years from the date of deferral. Payment is made in a lump sum or in annual payments for four, five or ten years as elected by the participant at the time of deferral. RPS deferrals are delivered two years from date of deferral, one month following termination, or the January 1 immediately following termination as elected by the participant at the time of deferral.

Change in Control

A change in control is defined under the Amended Stock Option Plan as Shareholder approval of a dissolution or liquidation of the Corporation or a sale of substantially all of their directorthe Corporation’s assets to another corporation, or a tender offer for 5% or more of the Corporation’s outstanding common stock.

In the event of a change in control, unvested NQSOs and RPS immediately vest. The value of in-the-money options and RPS subject to accelerated vesting for each of the named executive officers is as follows: Ms. Finger: $398,264; Messrs. Payne: $85,000, Thorson: $289,235, Zbacnik: $323,236, and Hansen: $106,274. The value is computed by multiplying the difference between the market value on December 29, 2006, the last business day of 2006, and the exercise price of each option by the number of shares subject to accelerated vesting.

Under the Company’s Severance Payment Plan executive officers receive six weeks pay for every year or partial year of service up to a maximum of one year’s base salary (see Summary Compensation Table for Fiscal Year 2006 for annual base salary for all named executive officers). All named executive officers have met the service requirement for one year’s base salary. Severance pay is paid on a semi-monthly basis, but a lump sum may be paid at the discretion of the Corporation.

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Director Compensation Table for Fiscal Year 2006

Westamerica Bancorporation does not have a charitable donations program for Directors nor does it make donations on behalf of any Director(s). The Corporation may make a nominal donation through its Community Relations program to non-profit organizations where a Director(s) may have an affiliation.

CorporationCertain Relationships and Related Party Transactions

In accordance with Directorsthe Audit Committee Charter, the Audit Committee is responsible for reviewing and Managementapproving or disapproving all related party transactions required to be disclosed by Item 404 of Regulation S-K for potential conflicts of interest. Additionally, the Corporation’s Code of Conduct and Ethics provides rules that restrict transactions with affiliated persons.

Certain of the directors,Directors, executive officers and their associates have had banking transactions with subsidiaries of the Corporation in the ordinary course of business. With the exception of the Corporation’s Employee Loan Program, all outstanding loans and commitments included in such transactions were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons, did not involve more than a normal risk of collectibility, and did not present other favorable features. As part of the Employee Loan Program, all employees, including corporateexecutive officers, are eligible to receive mortgage loans at one percent (1%) below Westamerica Bank’s prevailing interest rate at the time of loan origination. All loans to corporateexecutive officers under the Employee Loan Program are made by Westamerica Bank in compliance with the applicable restrictions of sectionSection 22(h) of the Federal Reserve Act.

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Board Compensation Committee Report

The material in the Compensation Committee Report and the investment performance graph included elsewhere in this proxy statement is not “soliciting material,” is not deemed filed with the Securities and Exchange Commission, and is not to be incorporated by reference in any of the Corporation’s filings under the Securities Act of 1933, as amended, or the Exchange Act, as amended, whether made before or after the date of this Proxy Statement and irrespective of any general incorporation language therein.

Overview.The Employee Benefits and Compensation Committee of the Board of Directors (the “Committee”) is comprised solely of directors who are not current or former employees of Westamerica Bancorporation and are independent, as that term is defined by applicable rules of NASDAQ. The Committee oversees the executive compensation program and recommends compensation for the CEO and other executive officers to the board. The CEO does not participate nor is he present when the Compensation Committee evaluates his performance and compensation. This executive compensation program and annual evaluation process establishes a competitive base salary for each executive and offers incentive compensation which can provide additional compensation if established performance measures are achieved.

Compensation Objectives and Policies.The Committee seeks to ensure that:

Over time, the Committee intends to limit base salary increases, creating an increasing reliance on incentives (in the form of annual cash bonuses and stock-based awards) to achieve targeted total compensation, thus increasing the percentage of total compensation dependent upon meeting specific performance objectives.

In determining total compensation, the Committee obtains competitive market data, comparing the Corporation’s compensation practices to those of a peer group of companies. The peer group is comprised of companies in the banking industry with which the Corporation competes for executive talent and which are generally comparable with respect to business activities. The companies in the peer group may or may not be included in the NASDAQ Bank Index (an index included in Westamerica’s “Performance Graph” below).

Base Salary and Bonus.Each executive officer named in the Summary Compensation Table receives a monthly base salary and is eligible to receive an annual cash bonus. Corporate performance measures are established each year based on the Corporation’s business objectives. Specific criteria for each corporate objective are established for “Threshold,” “Target,” and “Outstanding” performance. Achievement of these annual corporate-level performance measures determines between 55% and 80% of the annual cash bonuses to be paid to each named executive, with the remaining percentage of the annual cash bonus determined by individual and division-level performance. This furthers the Committee’s goal of linking management compensation to shareholder interests.

All employees, including corporate officers, are eligible to receive severance pay benefits in the event of a Change in Control, as defined in the Corporation’s Severance Payment Plan (“Severance Payment Plan”).

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Benefits under the Severance Payment Plan vary based on years of service, corporate title, and salary, but are limited to a maximum benefit equal to one year’s annual salary.

Stock Option and Restricted Performance Shares. Westamerica grants stock options and restricted performance shares to encourage key employees to remain with the Corporation by providing them with a long-term interest in the Corporation’s overall performance and an incentive to manage with a view toward maximizing long-term shareholder value. Each named executive officer may be awarded an annual grant of stock options if one-year corporate-level goals are achieved. Stock options are priced at 100% of fair market value on the date of grant and generally vest over three years. Options generally expire ten years after grant. All named executive officers are also eligible to receive an annual grant of restricted performance shares. Restricted performance shares generally vest three years after grant but only if three-year corporate-level performance goals are met.

Performance Criteria. Specific criteria for each corporate objective are established for “Threshold,” “Target,” and “Outstanding” performance. During 2005, corporate performance measures for cash bonuses and stockoption grants included meeting predetermined target levels for:

Additional corporate performance objectives for a three-year period are established by the Committee to accompany each grant of restricted performance shares. Each grant vests at the end of a three-year period subject to achievement of pre-established, three-year performance objectives which may include one or more of the following:

Compensation of Chief Executive Officer. Mr. Payne’s 2005 base salary was $371,000 and his annual cash bonus was $450,000. His 2005 bonus (included in the Summary Compensation below) wasrelated 80% to the achievement of the corporate goals listed above and 20% to the achievement of individual management goals. Individual management goals achieved in 2005 included satisfactory results from integration of the acquired Redwood Empire Bancorp, regulatory examinations, satisfactory compliance with internal control requirements, satisfactory progress on management succession and development plans, and satisfactory improvements in operational efficiency. Pursuant to the 1995 Stock

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Option Plan, Mr. Payne was granted 250,000 nonqualified stock options in January 2005 which was related to achievement of the 2004 performance measures. Compared to the corporate objectives, the Corporation:

Other.Internal Revenue Code (“IRC”) Section 162(m) places a limit of $1,000,000 on the amount of compensation that may be deducted by the Corporation in any year with respect to certain of the Corporation’s highest-paid executives. Certain “performance-based compensation” is not counted toward this limit. The Corporation intends generally to qualify compensation paid to executive officers for deductibility under the IRC, including Section 162(m), but reserves the right to pay compensation that is not deductible under Section 162(m).

The Committee believes that the foregoing compensation programs and policies provide competitive levels of compensation, encourage long-term performance and promote management retention, while further aligning shareholder and management interests in the performance of the Corporation and the Corporation’s common stock.

The Employee Benefits and Compensation Committee

Compensation Committee Interlocks and Insider Participation

No member of the Compensation Committee is a current or former officer or employee of the Corporation or any of its subsidiaries, or entered into (or agreed to enter into) any transaction or series of transactions with the Corporation or any of its subsidiaries with a value in excess of $60,000. None of the executive officers of the Corporation has served on the board of directors or on the compensation committee of any other entity, where one of that entity’s executive officers served either on the Board of Directors or on the Compensation Committee of the Corporation.

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EXECUTIVE COMPENSATION

The following Summary Compensation Table sets forth the compensation of the Corporation’s Chief Executive Officer, the four other most highly compensated executive officers (plus one additional officer who was no longer in office at the end of 2005) for services in all capacities to the Corporation, Westamerica Bank and other subsidiaries during 2005, 2004, and 2003:

Summary Compensation Table

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The following table sets forth the restricted performance share grants that were made on the following dates to the named individuals:

Includes 2005 contributions made by the Corporation under the Profit Sharing Plan for the following accounts in the amounts of: Messrs. Payne—$7,485; Thorson—$6,963; Zbacnik—$4,347; Hansen—$6,110; and Ms. Finger—$4,654;

Includes 2005 group life insurance premiums paid by the Corporation for the following accounts in the amounts of: Messrs. Payne—$1,910; Thorson—$354; Zbacnik—$990; Hansen—$1,373; Tjian–$3,133; and Ms. Finger—$580.

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Stock Options

The following table describes stock options that were granted shareholder approved Amended and Restated Westamerica Bancorporation 1995 Stock Option Plan (the “1995 Stock Option Plan”) to the Corporation’s Chief Executive Officer and the four other most highly compensated executive officers (plus one additional officer who was no longer in office at the end of 2005) in the fiscal year ended December 31, 2005. All of these grants were made on January 26, 2005, based on achievement of 2004 corporate performance objectives.

Option Grants in Last Fiscal Year

The following table sets forth the stock options exercised in 2005 and the December 31, 2005 unexercised value of both vested and unvested stock options for the Corporation’s Chief Executive Officer and the four other most highly compensated executive officers (plus one additional officer who was no longer in office at the end of 2005).

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Aggregated Option Exercises in Last Fiscal Year and December 31, 2005 Option Values

Other Compensation Arrangements

Certain Employment Contracts

Hans T. Y. Tjian accepted a position with Westamerica as Senior Vice President and Manager of Operations and Systems Administration under the terms set forth in a letter agreement dated April 14, 1989. Under the terms of this agreement, Mr. Tjian was entitled to: (1) receive an annual salary of $130,008; (2) receive a car allowance of $1,000 per month; (3) participate in Westamerica’s executive bonus plan; (4) participate in the Corporation’s Stock Option Plan; and (5) vacation leave. In addition, Mr. Tjian was entitled to receive severance pay equal to his annual base salary for one year, if his position was eliminated as a result of a Change of Control (as defined in the agreement). Mr. Tjian passed away on August 5, 2005.

Pension Agreement

During 1997, the Corporation entered into a nonqualified pension agreement (“Pension Agreement”) with Mr. Payne in consideration of Mr. Payne’s agreement that restricted performance shares granted in 1995, 1996 and 1997 would be canceled. In January 2000, the Employee Benefits and Compensation Committee (the “Committee”), based on the Corporation’s achievement of certain performance goals which had first been established for Mr. Payne’s 1995, 1996, and 1997 restricted performance shares, determined Mr. Payne’s annual pension will be $511,950. The vested portion of the pension will be paid to Mr. Payne as a 20-year certain pension commencing at age 55. Mr. Payne became fully vested in the pension on December 31, 2002.

As part of the Pension Agreement, if Mr. Payne becomes subject to an excise tax as a result of the accelerated vesting of the pension in connection with a Change of Control (as defined in the Pension Agreement), Mr. Payne will also receive a cash payment equal to the sum of (1) the portion of any excise tax due attributable to the vested pension in excess of the portion of any excise tax that would be due if Mr. Payne’s restricted performance shares had not been canceled, and (2) the amount necessary to restore Mr. Payne to the same after-tax position as if no such excise tax had been imposed.

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Deferred Compensation Agreement

In December 1998, the Corporation entered into a deferred compensation agreement with Mr. Payne for additional discretionary deferred compensation to provide an incentive to remain with the Corporation. The deferred compensation was to be delivered in the form of discretionary monthly company contributions to be deposited in a nonqualified deferred compensation plan. The Committee was to periodically review the accumulated deferred compensation balance, including investment performance, to determine if the additional discretionary company contributions were necessary to provide Mr. Payne with an appropriate level of benefits. The amount of such additional company contributions was to be determined quarterly by the Committee and be based on Mr. Payne’s attainment of certain performance goals to include, but not be limited to, Shareholder returns, overall financial performance, merger and acquisition activities, loan review examinations, asset quality and related reserves, and revenue growth.

In 2002, the Committee and Mr. Payne mutually agreed that monthly contributions be temporarily suspended. As a result no contributions were made in 2003. Mr. Payne’s deferred compensation award of $456,430 was paid in a lump sum on January 1, 2004 pursuant to the provision that he be continuously employed through that date.

INVESTMENT PERFORMANCE

Comparison of Five-Year Cumulative Total Return⁽¹⁾

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INVESTMENT PERFORMANCE

Comparison of Ten-Year Cumulative Total Return⁽²⁾

INDEPENDENT AUDITORS

The Audit Committee intends to appoint KPMG LLP (“KPMG”) as the Corporation’s independent auditors for the 20062007 fiscal year. KPMG has served as auditors of the Corporation since 1987. In making the determination to reappoint KPMG as the Corporation’s independent auditors, the Audit Committee will considerconsidered whether the providing of services by KPMG, other than audit services, is compatible with maintaining the independence of the outside auditors.

The Corporation expects representatives of KPMG to attend the Annual Meeting of Shareholders. TheyKPMG will respond to appropriate questions from Shareholders and have the opportunity to make a statement if they desire to do so.

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Audit Fees

The aggregate fees billed to the Corporation by KPMG LLP with respect to services performed for fiscal 20052006 and 20042005 are as follows:

PreapprovalPre-Approval Policies and Procedures

The Audit Committee is responsible for the appointment, compensation, retention and oversight of the work of any public accounting firm engaged by the Corporation for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Corporation. Any accounting firm appointed by the Corporation reports directly to the Audit Committee.

The Audit Committee must preapprovepre-approve all auditing services and permitted nonauditnon-audit services by its independent auditors and the fees to be paid by the Corporation for these services, except for those fees qualifying for the “de minimis exception” which provides that the preapprovalpre-approval requirement for certain non-audit services may be waived if certain expressed standards and requirements are satisfied prior to completion of the audit. During fiscal year 2005,2006, there were no nonauditnon-audit services that were approved using this exception.

The Audit Committee may delegate to one or more members of the committee the authority to grant preapprovalspre-approvals of nonauditnon-audit services and fees. In such event, the decisions of the member or members of the committee regarding preapprovalspre-approvals are presented to the full Audit Committee at its next meeting. The Audit Committee preapprovedpre-approved 100% of all services performed on behalf of the Corporation by KPMG during fiscal year 2005.2006.

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AUDIT COMMITTEE REPORT

The material in this report is not “solicitingsoliciting material” and is not deemed filed with the Securities and Exchange Commission, andSEC. It is not to be incorporated by reference in any of the Corporation’s filings under the Securities Act of 1933 as amended, or the Exchange Act, as amended, whether made beforein the past or afterin the datefuture even if any of this proxy statement and irrespective ofthose filings contain any general incorporation language therein.language.

The Audit Committee is composed of four Directors who are neither officers nor employees of the Company,Corporation, and who meet the NASDAQ independence requirements for Audit Committee members of NASDAQ.members. The Audit Committee selects, appoints and retains the Corporation’s independent auditors and is responsible for their compensation and oversight.

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In performing its functions, the Audit Committee acts only in an oversight capacity and necessarily relies on the work and assurances of the Corporation’s management, which has the primary responsibility for financial statements and reports, and of the independent auditors. The auditors who, as part of their examination, express an opinion on the conformity of the Corporation’s annual financial statements to generally accepted accounting principles. In fulfilling its oversight responsibilities, the Audit Committee reviewed the audited consolidated financial statements for the fiscal year 20052006 and discussed such statementsthem with management and with KPMG, LLP, the Corporation’s independent auditors.

Management represented to the Audit Committee that the Corporation’s consolidated financial statements were prepared in accordance with generally accepted accounting principles. Management also represented that it performed an assessment of the effectiveness of internal control over financial reporting as of December 31, 2005,2006, and that adequate internal control over financial reporting for the Corporation was maintained.effective. The Audit Committee discussed with the independent auditors matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees) as amended, including the auditor’sauditors’ judgment about the quality as well as the acceptability of the Corporation’s accounting principles, as applied in its financial reporting.

The Corporation’s independent auditors also provided to the Audit Committee the written disclosures and the letter from the independent auditors required by the Independence Standards Board Standard No. 1 (Independence Discussions with the Audit Committees). The Audit Committee discussed with the independent auditors the firm’s independence.

Based on the Audit Committee’s discussion with management and the independent auditors, the Audit Committee’s review of the representations of management and the report of the independent auditors to the Audit Committee, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2005,2006, for filing with the SEC.

Submitted by the Audit Committee

Ronald A. Nelson, Chairman

Louis E. Bartolini                                             E.J. Bowler                                Catherine C. MacMillan

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SHAREHOLDER PROPOSAL GUIDELINES

To be considered for inclusion in the Corporation’s Proxy Statement and form of proxy for next year’s Annual Meeting, Shareholder proposals must be delivered to the Corporate Secretary of the Corporation, 1108 Fifth Avenue, San Rafael, CA 94901, no later than 5:00 p.m. on November 20, 2006.2007. However, if the date of next year’s Annual Meeting is changed by more than 30 days from the date of this year’s Meeting, the notice must be received by the Corporate Secretary a reasonable time before we begin to print and mail our Proxy Statement. All such proposals must meet the requirements of Rule 14a-8 under the Exchange Act.

In order for business, other than a Shareholder proposal included insubmitted for the Corporation’s Proxy Statement, to be properly brought before next year’s Annual Meeting by a Shareholder, the Shareholder must give timely written notice to the Secretary of the Corporation. To be timely, written notice must be received by the Secretary of the Corporation at least 45 days before the dateanniversary of the day our Proxy Statement iswas mailed to Shareholders in connection with the previous year’s Annual Meeting. If the date of the current year’s Annual Meeting has been changed by more than 30 days, the deadline is a reasonable time before we begin to mail our Proxy Statement. A Shareholder’s notice must set forth a brief description of the proposed business, desired to be brought

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before the Meeting, the name and residence address of the Shareholder, proposing such business, the number of shares of the Corporation’s common stock that are owned by the Shareholder owns and any material interest of the Shareholder has in suchthe proposed business.

Westamerica reserves the right to reject, to rule out of order, or to take other appropriate action with respect to any proposal that does not comply with these and other applicable legal requirements.

SHAREHOLDER COMMUNICATION TO BOARD OF DIRECTORS

TheShareholders and other interested parties who wish to communicate with the Board encourages that written communication from Shareholders be sentmay do so by writing to: Kris Irvine, VP/Corporate Secretary, Westamerica Bancorporation 1108 Fifth Avenue, San Rafael,A-2M, P.O. Box 1200, Suisun City, CA 94901. You should include your name94534. The Directors have established procedures for the handling of communications from Shareholders and addressother interested parties and have directed the Corporate Secretary to act as their agent in the writtenprocessing any communications and indicate whether you are a Shareholder.received. All communications will be reviewed and processed bythat relate to matters that are within the Corporate Secretary. Correspondence requesting corporate information or asking questions that can more efficiently be addressed by management or a particular department willresponsibility of one of the Board Committees are to be forwarded to the Chair of the appropriate managerCommittee. Communications that relate to ordinary business matters that are not within the scope of the Board’s responsibilities, such as customer complaints, are to be sent to management. Solicitations, junk mail and obviously frivolous or department for response. However, Shareholderinappropriate communications regarding employee fraud, financial reporting issues, internal control/risk issues, corporate governance/oversight issues, or other matters appropriately handled by the Boardare not to be forwarded, but will be forwardedmade available to the Board, a Committee of the Board, or the appropriate Board member. The Corporate Secretary may summarize lengthy, repetitive or duplicate communications.any Director who wishes to review them.

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OTHER MATTERS

ManagementThe Board of the CorporationDirectors does not know of any matters to be presented at the Annual Meeting other than those specifically referred to herein.in this proxy statement. If any other matters should properly come before the Meeting or any postponement or adjournment thereof,of the meeting, the persons named in the enclosed proxy intend to vote thereon in accordance with their best business judgment. If a nominee for director becomes unavailable to serve as a Director, the proxies will vote for any substitute nominated by the Board of Directors.

The Corporation will pay the cost of the solicitation of proxies in the accompanying form will be borne by the Corporation.proxy solicitation. The Corporation has retained the services of Georgeson Shareholder to assist in the proxy distribution at a cost not to exceed $2,000 plus reasonable out-of-pocket expenses. The Corporation will reimburse banks, brokers and others holding stock in their names or names of nominees or otherwise, for reasonable out-of-pocket expenses incurred in sending proxies and proxy materials to the beneficial owners of such stock.

BY ORDER OF THE BOARD OF DIRECTORS

Kris Irvine VP/Corporate Secretary

Dated:

Dated : March 20, 200619, 2007

2327

EXHIBIT A

WESTAMERICA BANCORPORATION

AUDIT COMMITTEE CHARTER

(Revised January, 2007)

The Audit Committee is appointed by the Board to assist the Board in monitoring (1) the integrity of the Corporation’s financial statements, (2) the compliance by the Corporation with legal and regulatory requirements, (3) the independence, qualifications and performance of the Corporation’s registered public accounting firms performing audit, review or attest services and (4) the Corporation’s internal audit and control function. The Audit Committee shall prepare the report that the Securities and Exchange Commission (“SEC”) rules require be included in the Corporation’s annual proxy statement.

While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits, or to determine that the Corporation’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles. This is the responsibility of management and the independent auditor.

The function of the Audit Committee is oversight. Management is responsible for the preparation and integrity of the Corporation’s financial statements. Management is responsible for maintaining appropriate accounting and financial reporting policies, and an appropriate internal control environment. Subject to appointment, review and oversight by the Audit Committee, the independent auditor is responsible for planning and conducting a proper audit of the Corporation’s internal control environment, annual financial statements, reviewing the Corporation’s quarterly financial statements prior to the filing of each quarterly report on Form 10-Q, and other procedures.

The members of the Audit Committee shall meet the independence requirements of the NASDAQ and the rules and regulations of the SEC and no member shall be an affiliated person (as defined in relevant SEC rules) of the Corporation or any of its subsidiaries, have participated at any time in the preparation of financial statements of the Corporation or any current subsidiary during the prior three years. Each member shall be able to read and understand fundamental financial statements, including the Corporation’s balance sheet, income statement and cash flow statement and at least one member must have the additional financial sophistication as required by and as defined in the NASDAQ rules. The members of the Audit Committee shall be appointed by the Board on the recommendation of the Chairman of the Board. The Audit Committee shall have no fewer than three members.

The Audit Committee, in its capacity as a committee of the Board, shall be directly responsible for the appointment, compensation, retention and oversight of the work of any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Corporation (“independent auditor” or “independent auditors”), and each such registered public accounting firm must report directly to the Audit Committee. The Audit Committee shall be directly responsible for the resolution of disagreements between management and the independent auditor regarding financial reporting.