Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 001-9383
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
WESTAMERICA BANCORPORATION TAX DEFERRED
SAVINGS/RETIREMENT PLAN (ESOP)
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
Westamerica Bancorporation
1108 Fifth Avenue
San Rafael, California 94901
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WESTAMERICA BANCORPORATION
TAX DEFERRED SAVINGS/RETIREMENT PLAN (ESOP)
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2004 AND 2003 AND
FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
AND
SUPPLEMENTAL SCHEDULES
AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2004
AND
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Page 3
WESTAMERICA BANCORPORATION
TAX DEFERRED SAVINGS/RETIREMENT PLAN (ESOP)
FINANCIAL STATEMENTS
WITH SUPPLEMENTAL SCHEDULES
For the Years Ended December 31, 2004, 2003 and 2002
TABLE OF CONTENTS
Page
----
Report of Independent Registered Public Accounting Firm 4
Financial Statements:
Statement of Net Assets Available for Benefits as of
December 31, 2004 and 2003 5
Statement of Changes in Net Assets Available for Benefits
for the Years Ended December 31, 2004, 2003 and 2002 6
Notes to Financial Statements 7-13
Supplemental Schedules:
Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets
(Held at End of Year) as of December 31, 2004 14
Schedule H, Line 4j - Schedule of Reportable Transactions
for the Year Ended December 31, 2004 15
Signatures 16
Exhibit Index 17
All other schedules required by Section 2520.103.10 of the Department of
Labor's Rules and regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974 have been omitted because
they are not applicable.
Page 4
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
To the Employee Benefits and
Compensation Committee of the
Board of Directors of
Westamerica Bancorporation
We have audited the accompanying statement of net assets available for
benefits of the Westamerica Bancorporation Tax Deferred Savings/Retirement Plan
(ESOP) (the "Plan") as of December 31, 2004 and 2003, and the related statement
of changes in net assets available for benefits for the years ended December 31,
2004, 2003 and 2002. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Plan is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Plan's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the
Westamerica Bancorporation Tax Deferred Savings/Retirement Plan (ESOP) as of
December 31, 2004 and 2003, and the changes in net assets available for
benefits for the years ended December 31, 2004, 2003 and 2002, in conformity
with accounting principles generally accepted in the United States of America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
(held at end of year) and reportable transactions, as of and for the year ended
December 31, 2004, are presented for the purpose of additional analysis and are
not a required part of the basic financial statements, but are supplementary
information required by the United States Department of Labor Rules and
Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. These supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/S/ Perry-Smith LLP
-------------------
Sacramento, California
June 3, 2005
400 CAPITOL MALL, SUITE 1200, SACRAMENTO, CA 95814
916-441-1000 FAX 916-441-1110 URL www.perry-smith.com
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WESTAMERICA BANCORPORATION
TAX DEFERRED SAVINGS/RETIREMENT PLAN (ESOP)
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2004 and 2003
2004 2003
------------------------
ASSETS
Cash $ 7,084 $ 17,833
------------------------
Investments:
Westamerica common stock (Notes 3 and 4) 41,154,841 35,081,251
Shares of registered investment companies
(mutual funds) (Note 3) 19,446,407 17,268,494
Participant loans (Note 3) 1,143,215 1,154,771
------------------------
Total investments 61,744,463 53,504,516
------------------------
Receivables:
Interest 50 20
------------------------
Total assets 61,751,597 53,522,369
------------------------
LIABILITIES
Accrued trustee fees 14,013 12,782
------------------------
Net assets available for benefits $61,737,584 $53,509,587
=========== ===========
The accompanying notes are an integral
part of these financial statements.
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WESTAMERICA BANCORPORATION
TAX DEFERRED SAVINGS/RETIREMENT PLAN (ESOP)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the Years Ended December 31, 2004, 2003 and 2002
2004 2003 2002
-------------------------------------
ADDITIONS
Investment income:
Net appreciation (depreciation) in fair
value of investments (Note 3) $ 7,418,432 $ 9,651,775 $(1,859,827)
Interest 340,738 249,478 267,035
Dividends 764,818 724,410 632,186
Interest on participant loans 61,938 68,278 71,718
-------------------------------------
Total investment income (loss) 8,585,926 10,693,941 (888,888)
-------------------------------------
Contributions:
Participants 2,313,392 2,269,775 2,234,006
Employer 1,508,125 1,508,203 1,534,153
Participant rollovers 225,627 16,877 189,564
-------------------------------------
Total contributions 4,047,144 3,794,855 3,957,723
-------------------------------------
Total additions 12,633,070 14,488,796 3,068,835
-------------------------------------
DEDUCTIONS
Deductions from net assets attributed to:
Benefits paid to participants 4,353,746 3,356,904 4,692,247
Administrative expenses (Note 6) 51,327 46,916 44,115
-------------------------------------
Total deductions 4,405,073 3,403,820 4,736,362
-------------------------------------
Net increase (decrease) 8,227,997 11,084,976 (1,667,527)
-------------------------------------
Net assets available for plan benefits:
Beginning of year 53,509,587 42,424,611 44,092,138
-------------------------------------
End of year $ 61,737,584 $53,509,587 $42,424,611
=========== =========== ===========
The accompanying notes are an integral
part of these financial statements.
Page 7
WESTAMERICA BANCORPORATION
TAX DEFERRED SAVINGS/RETIREMENT PLAN (ESOP)
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF PLAN
The following description of the Westamerica Bancorporation (the
"Company") Tax Deferred Savings/Retirement Plan (ESOP) (the "Plan")
provides only general information. Participants should refer to the
Summary Plan Description and Plan Agreement for a more complete
description of the Plan's provisions.
General
- -------
The Plan, formerly called the Westamerica Bancorporation Supplemental
Retirement Plan, was established by the Company as a non-contributory
profit sharing plan. The Plan was amended to included a salary deferral
feature pursuant to section 401(k) of the Internal Revenue Code.
Concurrent with the amendment, all existing account balances were invested
in either common stock or certificates of deposit of the Company, and all
employee accounts were fully vested. The Plan was also amended and
restated as an Employee Stock Ownership Plan (ESOP). The Employee
Benefits and Compensation Committee of the Company's Board of Directors
(the "Committee") delegates to the Company's Pension Management Committee,
the administration of the Plan. The Committee has the responsibility for
the general operation of the Plan, including the resolution of any
questions arising under the Plan agreement. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Investments in the Plan are participant directed with the exception of
employer contributions which are invested in shares of Company common
stock. Vanguard Fiduciary Trust Company serves as Trustee of the Plan.
Eligibility
- -----------
Under the Plan, employees of the Company who are compensated on a salaried
basis become eligible to participate in the plan on the first day of the
calendar month coinciding with or following the date the employee
completes 90 consecutive days of service with the Company or completes
1,000 service hours in a 12-month consecutive period.
Vesting
- -------
Participants are immediately vested in their salary-deferral
contributions, the Company's discretionary and matching contributions,
plus actual earnings thereon.
Contributions
- -------------
Each year, participants may make salary deferral contributions, through
payroll deduction, in any whole percentage up to 25 percent of pretax
annual compensation subject to certain IRC limitations. The Company's
matching contribution is 100 percent of the participant's elective
contribution, up to a maximum of 6 percent of the participant's
compensation. Additional amounts may be contributed at the discretion of
the Company's Board of Directors. Participants may also contribute
amounts representing distributions from other qualified defined benefit or
contribution plans. For the years ended December 31, 2004, 2003 and 2002,
the Company made no discretionary contributions. Company contributions
are subject to certain IRC limitations.
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1. DESCRIPTION OF PLAN (Continued)
Participant Accounts
- --------------------
Individual accounts are maintained for each Plan participant. Each
Participant's account is credited with the participant's contribution, the
Company's discretionary and matching contributions and Plan earnings, and
charged with withdrawals, allocations of Plan losses and administrative
expenses. Allocations are based on participant earnings, as defined.
Certain administrative expenses associated with the Westamerica Common
Stock Fund are charged pro-rata based on a participant's holding in that
fund.
Participants' Investment Options
- --------------------------------
Company matching contributions are invested in the Westamerica Common
Stock Fund in accordance with the Plan Document. A participant who has
completed 10 Plan years of service and has attained age 55 may elect to
direct up to 25% of the Company matching contribution held in Company
stock to other investment fund options.
Participants direct participant contributions in whole or in part in any
of the following investment fund options:
The Westamerica Common Stock Fund, which is invested in the
Company's common stock and temporary interest-bearing money market
funds.
Vanguard 500 Index Fund, which invests in the 500 stocks that make
up the unmanaged Standard & Poor's 500 Composite Stock Price Index,
a widely recognized benchmark of U.S. stock market performance.
Vanguard LifeStrategy Conservative Growth Fund, which invests in
five Vanguard funds: a domestic stock fund, an international stock
fund, two bonds funds, and an asset allocation fund. The fund's
assets allocation ranges are expected to be 25%-50% stocks, 50%-75%
bonds, and 0%-25% cash investments.
Vanguard LifeStrategy Growth Fund, which invests in five Vanguard
funds: a domestic stock fund, an international stock fund, two bond
funds, and an asset allocation fund. The fund's assets allocation
ranges are expected to be 65%-90% stocks, 10%-35% bonds and 0%-25%
cash investments.
Vanguard LifeStrategy Income Fund, which invests in four Vanguard
funds: a stock fund, two bond funds, and an asset allocation fund.
The fund's assets allocation ranges are expected to be 5%-30%
stocks, 70%-95% bonds, and 0%-25% cash investments.
Vanguard Explorer Fund, which invests in a diversified group of
small-company stocks with prospects for above-average growth. The
fund may invest up to 20% in foreign securities and up to 15% in
restricted or illiquid securities.
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1. DESCRIPTION OF PLAN (Continued)
Participants' Investment Options (Continued)
- --------------------------------
Vanguard LifeStrategy Moderate Growth Fund, which invests in four
Vanguard funds: a domestic stock fund, an international stock fund,
a bond fund, and an asset allocation fund. The fund's assets
allocation ranges are expected to be 45%-70% stocks, 30%-55% bonds,
and 0%-25% cash investments.
Vanguard Morgan Growth Fund, which invests primarily in stocks of
large and mid-sized companies that have strong records of growth in
sales and earnings or that have performed well during certain market
cycles.
Vanguard Prime Money Market Fund, which invests in short-term, high-
quality money market instruments issued by financial institutions,
nonfinancial corporations, the U.S. government, and federal
agencies.
Vanguard Total Bond Market Index Fund, which invests in bonds that
attempt to match the performance of the unmanaged Lehman Brothers
Aggregate Bond Index, which is a widely recognized measure of the
taxable U.S. bond market.
Vanguard Total International Stock Index, which invests in three
Vanguard international index funds: a European fund, a Pacific fund,
and an emerging markets fund. These funds invest in the stock of
companies in more than 30 countries.
Vanguard Windsor II Fund, which invests in a diversified group of
out-of-favor stocks of large capitalization companies. The stocks
selected generally sell at prices below the market average compared
to their dividend income and future return potential.
Vanguard Extended Market Index Fund, which invests in a broadly
diversified portfolio of stocks of small and medium sized companies
that are regularly traded on the New York and American Stock
Exchanges and NASDAQ over-the-counter market. The portfolio is
designed to be representative of the Wilshire 4500 Index.
Vanguard Short-Term Federal Fund which invests primarily in short-
term securities issued by U.S. government agencies, but may also
invest in U.S. Treasury securities and in repurchase agreements
backed by U.S. Treasury or federal agency securities. To reduce
fluctuations in its share price, the fund will maintain an average
maturity of 1 to 3 years.
Participants may change their investment options at any time directly
through The Vanguard Group.
Page 10
1. DESCRIPTION OF PLAN (Continued)
Participant Loans
Participants may borrow a minimum of $1,000 up to a maximum equal to the
lesser of 50 percent of their account balance, 100 percent of participant
contributions, or $50,000. Loans are secured by the balance in the
participant's account and bear interest at prevailing market rates at the
time the funds are borrowed. Loan terms range from 1 to 5 years.
Principal and interest is paid ratably through payroll deductions.
Payment of Benefits
Upon termination of service for any reason, a participant may elect to
receive a lump-sum distribution equal to the value in his or her account.
Distributions for the value of a participant's account invested in the
Westamerica Common Stock Fund stock are made in the form of the Company's
common stock plus cash for any fractional shares or, if a participant
elects, in cash or an in-kind transfer, as provided by the Plan document.
Participants may also receive in-service distributions on account of
hardship or after attaining age 59 1/2. As of December 31, 2004 and 2003,
there were no benefits payable to participants that have elected to
withdraw from the Plan but have not yet been paid.
Voting Rights
Each participant is entitled to exercise voting rights attributable to the
shares allocated to his or her account and is notified by the Trustee
prior to the time that such rights are to be exercised. The Trustee is
not permitted to vote any allocated share for which instructions have not
been given by a participant.
Plan Termination
Although it has not expressed any interest to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan, subject to the provisions of ERISA.
Administrative Expenses
The Company provides bookkeeping and other administrative services for the
Plan at no charge. The Company pays the Plan's annual account maintenance
fees for active employees and other administrative expenses.
2. SUMMARY OF ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Plan have been prepared in accordance with
accounting principles generally accepted in the United States of America.
Page 11
2. SUMMARY OF ACCOUNTING POLICIES (Continued)
Use of Estimates
- ----------------
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires the
Plan's management to make estimates and assumptions that affect the
reported amounts of net assets available for benefits and changes therein
and disclosure of contingent assets and liabilities. Actual results could
differ from those estimates.
The Plan utilizes various investment instruments, including mutual funds.
Investment securities, in general, are exposed to various risks, such as
interest rate, credit and overall market volatility. Due to the level of
risk associated with certain investment securities, it is reasonably
possible that changes in the values of investment securities will occur in
the near term and that such changes could materially affect the amounts
reported in the financial statements.
Investment Valuation and Income Recognition
- -------------------------------------------
The Plan's investments are stated at fair value. Shares of registered
investment companies (mutual funds) are reported at fair value based on
the quoted market price of the fund, which represents the net asset value
of shares held by the Plan at year end. The Company's common stock is
valued at its quoted market price. Participant loans are valued at their
outstanding loan balances.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded
on the ex-dividend date. Net appreciation (depreciation) in fair value of
investments includes net unrealized market appreciation (depreciation) of
investments and net realized gains and losses on the sale of investments
during the period.
Management fees and operating expenses charged to the Plan for investments
in shares of registered investment companies (mutual funds) are deducted
from income earned on a daily basis and are not separately reflected.
Consequently, management fees and operating expenses are reflected as a
reduction of investment return for such investments.
Payment of Benefits
- -------------------
Benefits are recorded when paid.
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3. INVESTMENT INFORMATION
The Plan's investments, including investments bought, sold, and held
during the year, appreciated in value by $7,418,432 and $9,651,775 during
2004 and 2003, respectively, and depreciated in value by $1,859,827
during 2002, as follows:
2004 2003 2002
-----------------------------------
Westamerica common stock $ 6,047,876 $ 6,988,077 $ 483,400
Mutual funds 1,370,556 2,663,698 (2,343,227)
-----------------------------------
$ 7,418,432 $ 9,651,775 $(1,859,827)
=========== =========== ===========
The following table presents investments at fair value that represent
5% or more of the Plan's net assets as of December 31, 2004 and 2003:
2004 2003
-----------------------
Westamerica Common Stock Fund $41,154,841 $35,081,251
Vanguard 500 Index Fund 4,965,703 4,851,183
Vanguard Prime Money Market Fund 2,610,457 2,712,196
Other Investments 13,013,462 10,859,886
-----------------------
$61,744,463 $53,504,516
=========== ===========
4. INVESTMENT IN WESTAMERICA BANCORPORATION COMMON STOCK
The Plan's investments at December 31, 2004 and 2003 in Westamerica
Bancorporation common stock are as follows:
2004 2003
-----------------------
Participant directed:
Number of shares 705,553 705,860
=========== ===========
Cost $16,941,726 $15,200,542
=========== ===========
Fair value $41,154,841 $35,081,251
=========== ===========
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5. FEDERAL INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated December 12, 2001, that the Plan is qualified and the trust
established under the Plan is tax-exempt, under the appropriate sections
of the Internal Revenue Code. The Plan has been amended since receiving
the determination letter; however, the Plan's management and the Plan's
tax counsel believe that the Plan currently is designed and being operated
in compliance with the applicable requirements of the Internal Revenue
Code and the Plan continues to be tax exempt. Therefore, no provision for
income taxes has been included in the Plan's financial statements.
6. RELATED PARTY TRANSACTIONS
Plan investments include shares of mutual funds managed by an affiliate of
Vanguard Fiduciary Trust Company (VFTC). VFTC is the trustee as defined
by the Plan and, therefore, these transactions qualify as party-in-
interest transactions which are exempt from the prohibited transactions
rules. Fees paid by the Plan for investment management services were
included as a reduction of the return earned on each fund. Fees paid by
the Plan for trustee services in connection with the Westamerica Common
Stock Fund for the years ended December 31, 2004, 2003 and 2002 amounted
to $51,327, $46,916 and $44,115, respectively.
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WESTAMERICA BANCORPORATION
TAX DEFERRED SAVINGS/RETIREMENT PLAN (ESOP)
EMPLOYER IDENTIFICATION NUMBER: 94-2156203
PLAN NUMBER: 002
FORM 5500, SCHEDULE H, PART IV, LINE 4i
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2004
(c)
(b) Description of Investment
Identity of Issuer, Including Maturity Date, (e)
Borrower, Lessor Rate of Interest, Collate (d) Current
(a) or Similar Party Par or Maturity Value Cost Value
- ----------------------------------------------------------------------------------------
* Westamerica Common Mutual Fund
Stock Fund 705,553 shares $16,941,726 $ 41,154,841
* Vanguard 500 Index Fund Mutual Fund
44,480 shares 4,880,993 4,965,703
* Vanguard Explorer Fund Mutual Fund
2,453 shares 165,880 182,954
* Vanguard LifeStrategy Mutual Fund
Conservative Growth Fund 70,169 shares 1,009,813 1,070,778
* Vanguard LifeStrategy Mutual Fund
Growth Fund 97,549 shares 1,802,187 1,954,883
* Vanguard LifeStrategy Mutual Fund
Income Fund 38,361 shares 499,034 519,026
* Vanguard LifeStrategy Mutual Fund
Moderate Growth Fund 102,377 shares 1,672,032 1,833,580
* Vanguard Morgan Growth Mutual Fund
Fund 162,149 shares 2,764,208 2,646,273
* Vanguard Prime Money Mutual Fund
Market Fund 2,610,457 shares 2,610,457 2,610,457
* Vanguard Total Bond Market Mutual Fund
Index Fund 80,642 shares 821,097 828,198
* Vanguard Total International Mutual Fund
Stock Index Fund 110,467 shares 1,080,866 1,391,883
* Vanguard Windsor II Fund Mutual Fund
26,094 shares 653,502 800,945
* Vanguard Extended Market Mutual Fund
Index Fund 15,949 shares 424,659 500,169
* Vanguard Short Term Mutual Fund
Federal Fund 13,598 shares 143,799 141,558
* Participant loans Interest rates ranging 1,143,215 1,143,215
from 5.00% to 9.75% ---------------------------
$36,613,468 $ 61,744,463
============ ============
* Party-in-interest to the Plan.
Page 15
WESTAMERICA BANCORPORATION
TAX DEFERRED SAVINGS/RETIREMENT PLAN (ESOP)
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
EMPLOYER IDENTIFICATION NUMBER: 94-2156203
PLAN NUMBER: 002
SCHEDULE H, LINE 4j - SCHEDULE OF REPORTABLE TRANSACTIONS
For the Year Ended December 31, 2004
(h)
(f) Current Value
(a) (b) (c) (d) (e) Expense (g) of Asset on (i)
Identity of Description Purchase Selling Lease Incurred wit Cost of Transaction Net Gain
Party Involved of Asset Price Price Rental Transaction Asset Date or (Loss)
- --------------------------------------------------------------------------------------------------------------------------
Category (1)
- -------------------------------------------
Purchases -
Series of Transactions
- -------------------------------------------
Westamerica Bancorporation:
Westamerica Common Stock Common stock $ 3,312,479 $ 3,312,479
Sales -
Series of Transactions
- -------------------------------------------
Westamerica Bancorporation:
Westamerica Common Stock Common stock $ 3,250,680 $ 1,571,295 $ 3,250,880 $ 1,679,585
Page 16
Duly Authorized Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or the persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
WESTAMERICA BANCORPORATION
TAX DEFERRED SAVINGS/RETIREMENT PLAN (ESOP)
Date: June 29, 2005
-------------------------
By: /s/ Dennis R. Hansen
-------------------------
Dennis R. Hansen
Senior Vice President and Controller
and Member, Pension Management Committee
Page 17
Exhibit Index
Exhibit
Number Description
- -------- ------------------------------------------------
23 Independent Auditor's Consent
99 Certification pursuant to 18 U.S.C. Section 1350