Fitch Ratings Upgrades Westamerica Bancorporation.Business Editors NEW YORK--(BUSINESS WIRE)--June 30, 2003 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has raised the long-term rating of Westamerica Bancorporation, Inc. (WABC WABC Worldwide Association of Business Coaches WABC Westamerica Bancorporation (NASDAQ symbol) WABC World Aquatic Babies Congress WABC World Association of Business Coaches WABC World Aquatic Babies & Children ) to 'A' from 'A-'. The Rating Outlook remains Stable. The rating change largely reflects WABC's sound financial performance in terms of profitability and credit quality that have consistently outpaced its peers. The ratings are somewhat constrained by WABC's geographic and product limitations that potentially exposes the bank to a downturn in the regional economy in the Northern and Central Valley areas of California. Solid financial fundamentals remain intact, despite the current economic environment that has challenged the commercial sector, an important aspect of WABC's business-focused lending. Profitability measures, even while showing slightly declining trends, remain robust and exceed peers. Return measures are supported by steady growth in fee-based revenue, sound cost controls and strong asset quality. Like many of its banking brethren, WABC has seen a decline in its net interest margin (NIM nim 1 tr. & intr.v. nimmed, nim·ming, nims Archaic To steal; pilfer. [Middle English nimen, to take, from Old English niman; see ). However, the NIM remains robust at 5.58% for first-quarter 2003 (1Q03). The NIM pressure comes mostly from WABC's declining ability to further reduce its cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. , which was 0.8% for 1Q03. This fact, combined with WABC's conservative lending practices that will limit loan growth and, subsequently, top line revenue growth, will result in continued NIM pressure in the near term, especially in light of recent Fed easing. Still, we expect profitability and other key performance measures to remain sound. WABC continues to maintain a solid balance sheet that is supported by prudent capital and reserve levels. Ratings upgraded: Westamerica Bancorporation -- Long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. to 'A' from 'A-'. Westamerica Bank Westamerica Bank is a regional community-bank with 87 branches and two trust offices in 21 northern and central California counties. It is headquartered in San Rafael, California. Rated as one of California's strongest and healthiest banks, Westamerica has over $5. -- Long-term deposits to 'A+' from 'A'; -- Long-term debt to 'A' from 'A-'. Ratings affirmed Westamerica Bancorporation -- Short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. 'F1'; -- Individual 'A/B'; -- Support '5'. Westamerica Bank -- Short-term deposits 'F1'; -- Short-term debt 'F1'; -- Individual 'A/B'; -- Support '5'. |
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