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, 2003
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
Page 2
WESTAMERICA BANCORPORATION
TAX DEFERRED SAVINGS/RETIREMENT PLAN (ESOP)
FINANCIAL STATEMENTS
WITH SUPPLEMENTAL SCHEDULES
FOR THE YEARS ENDED DECEMBER 31, 2003, 2002
AND 2001
WITH
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, 2003, 2002 and 2001
TABLE OF CONTENTS
Page
----
Independent Registered Public Accounting Firm's Report 4
Financial Statements:
Statement of Net Assets Available for Plan Benefits 5
Statement of Changes in Net Assets Available for Plan Benefits 6
Notes to Financial Statements 7-12
Supplemental Schedules:
Schedule H, Line 4i - Schedule of Assets Held for
Investment Purposes 13-14
Schedule H, Line 4j - Schedule of Reportable Transactions 15
Signatures 16
Exhibit Index 17
Page 4
INDEPENDENT AUDITOR'S REPORT
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 plan benefits of the Westamerica Bancorporation Tax Deferred
Savings/Retirement Plan (ESOP) (the "Plan") as of December 31, 2003 and
2002, and the related statement of changes in net assets available for
benefits for the years ended December 31, 2003, 2002 and 2001. 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 auditing standards
generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
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 audit provides 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 Plan at December 31, 2003 and 2002, and the changes in net assets
available for benefits for the years ended December 31, 2003, 2002 and
2001, 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 for investment purposes and reportable transactions, as of
and for the year ended December 31, 2003, 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. The 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
-------------------
April 30, 2004
400 CAPITOL MALL, SUITE 1200, SACRAMENTO, CA 95814
916-441-1000 FAX 916-441-1110 URL WWW.perry-smith.com
Page 5
WESTAMERICA BANCORPORATION
TAX DEFERRED SAVINGS/RETIREMENT PLAN (ESOP)
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31, 2003 and 2002
2003 2002
----------- ------------
ASSETS
Cash $ 17,833 $ 16,904
Investments:
Westamerica common stock (Notes 3 and 4) 35,081,251 28,608,744
Shares of registered investment companies
(mutual funds) (Note 3) 17,268,494 12,695,029
Participant loans (Note 3) 1,154,771 980,609
------------ ------------
Total investments 53,504,516 42,284,382
------------ ------------
Receivables:
Participant contributions 0 79,557
Employer contributions 0 56,707
Interest 20 52
------------ ------------
Total receivables 20 136,316
------------ ------------
Total assets 53,522,369 42,437,602
------------ ------------
LIABILITIES
Accounts payable 0 1,869
Accrued trustee fees 12,782 11,122
------------ ------------
Total liabilities 12,782 12,991
------------ ------------
Net assets available for plan benefits $53,509,587 $42,424,611
============ ============
The accompanying notes are an integral
part of these financial statements
Page 6
WESTAMERICA BANCORPORATION
TAX DEFERRED SAVINGS/RETIREMENT PLAN (ESOP)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
For the Years Ended December 31, 2003, 2002 and 2001
2003 2002 2001
----------- ----------- -----------
ADDITIONS
Additions (deductions) to net assets attributed to:
Investment income:
Net appreciation (depreciation) in fair
value of investments (Note 3) $ 9,651,775 $(1,859,827) $(4,230,063)
Interest 249,478 267,035 352,175
Dividends 724,410 632,186 595,987
Interest on participant loans 68,278 71,718 85,022
----------- ----------- -----------
Total investment income (loss) 10,693,941 (888,888) (3,196,879)
----------- ----------- -----------
Contributions:
Participants 2,269,775 2,234,006 2,045,531
Employer 1,508,203 1,534,153 1,484,303
Participant rollovers 16,877 189,564 93,782
----------- ----------- -----------
Total contributions 3,794,855 3,957,723 3,623,616
----------- ----------- -----------
Total additions 14,488,796 3,068,835 426,737
----------- ----------- -----------
DEDUCTIONS
Deductions from net assets attributed to:
Benefits paid to participants 3,356,904 4,692,247 5,041,025
Administrative expenses (Note 7) 46,916 44,115 42,661
----------- ----------- -----------
Total deductions 3,403,820 4,736,362 5,083,686
Net increase (decrease) 11,084,976 (1,667,527) (4,656,949)
Net assets available for plan benefits:
Beginning of year 42,424,611 44,092,138 48,749,087
----------- ----------- -----------
End of year $53,509,587 $42,424,611 $44,092,138
=========== =========== ===========
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).
Eligibility
Employees of the bank 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.
Contributions
Each year, participants may make salary deferral contributions, through
payroll deduction, in any whole percentage up to 25 percent of pretax
annual compensation (not to exceed $12,000 in 2003 and $11,000 in 2002).
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. Participants may roll over amounts representing
distributions from other qualified defined benefit or contribution plans.
Participant Accounts
Each participant's account is credited with the participant's
contribution and the Company's matching contribution. Plan earnings
are allocated based on participant account balances, 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.
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WESTAMERICA BANCORPORATION
TAX DEFERRED SAVINGS/RETIREMENT PLAN (ESOP)
NOTES TO FINANCIAL STATEMENTS
(Continued)
1. DESCRIPTION OF PLAN (Continued)
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' 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.
Upon enrollment in the Plan, participants may direct employer and
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 International Growth Fund, which invests in stocks of
high-quality, seasoned companies based outside the United States.
Stocks are selected from more than 15 countries.
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.
Page 9
WESTAMERICA BANCORPORATION
TAX DEFERRED SAVINGS/RETIREMENT PLAN (ESOP)
NOTES TO FINANCIAL STATEMENTS
(Continued)
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.
Page 10
WESTAMERICA BANCORPORATION
TAX DEFERRED SAVINGS/RETIREMENT PLAN (ESOP)
NOTES TO FINANCIAL STATEMENTS
(Continued)
1. DESCRIPTION OF PLAN (Continued)
Loans to Participants
The Plan permits participants to borrow from their accounts and allows for
hardship withdrawals. 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. The loans bear interest
at rates that range from 5.00% to 9.75%, which are commensurate with local
prevailing rates. Loan terms range from 1 to 5 years.
Vesting
Participants are immediately vested in their salary-deferral
contributions, the Company's matching contribution and actual
earnings thereon.
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.
2. SUMMARY OF ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Plan are prepared under the accrual
method of accounting.
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. Loans to participants
are reported at cost which approximates fair value. Purchases and
sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis and dividends are
recorded on the ex-dividend date.
Investment gains and losses are determined based on revalued cost.
Revalued cost represents the market value of the assets at the
beginning of the plan year or historical cost if an investment
was acquired during the plan year.
Page 11
WESTAMERICA BANCORPORATION
TAX DEFERRED SAVINGS/RETIREMENT PLAN (ESOP)
NOTES TO FINANCIAL STATEMENTS
(Continued)
2. SUMMARY OF ACCOUNTING POLICIES (Continued)
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities
and changes therein, and disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.
Payment Benefits
Benefits are recorded when paid. There were no participants who elected
to withdraw from the Plan who had not received a distribution at
December 31, 2003 and 2002.
Administrative Expenses
Certain administrative functions are performed by officers or employees
of the Company. No such officers or employees receive compensation from
the Plan. The Company pays the Plan's annual account maintenance fees
for active employees and other administrative expenses.
3. INVESTMENTS
The Plan's investments, including investments bought, sold, and held
during the year, appreciated in value by $9,651,775 during 2003 and
depreciated in value by $1,859,827 and $4,230,063 during 2002 and 2001,
respectively, as follows:
2003 2002 2001
------------ ------------ ------------
Westamerica common stock $6,988,077 $ 483,400 $(2,629,813)
Mutual funds 2,663,698 (2,343,227) (1,600,250)
------------ ------------ ------------
$9,651,775 $(1,859,827) $(4,230,063)
============ ============ ============
The following table presents investments at fair value that represent
5% or more of the Plan's net assets as of December 31, 2003 and 2002:
2003 2002
------------ ------------
Westamerica Common Stock Fund $35,081,251 $28,608,744
Vanguard 500 Index Fund 4,851,183 3,899,771
Vanguard Prime Money Market Fund 2,712,196 2,550,168
Other investments 10,859,886 7,225,699
------------ ------------
$53,504,516 $42,284,382
============ ============
Page 12
WESTAMERICA BANCORPORATION
TAX DEFERRED SAVINGS/RETIREMENT PLAN (ESOP)
NOTES TO FINANCIAL STATEMENTS
(Continued)
4. INVESTMENT IN WESTAMERICA BANK COMMON STOCK
The Plan's investments at December 31, 2003 and 2002 in Westamerica Bank
common stock are as follows:
2003 2002
------------ ------------
Participant directed:
Number of shares 705,860 712,015
============ ============
Cost $15,200,542 $14,053,530
============ ============
Fair value $35,081,251 $28,608,744
============ ============
5. 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 Administrator
believes the Plan is designed and is being operated in compliance with
the applicable requirements of the Internal Revenue Code.
6. 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.
7. RELATED PARTY TRANSACTIONS
Plan investments are 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 trustee services in
connection with the Westamerica Common Stock Fund for the years ended
December 31, 2003, 2002 and 2001 amounted to $46,916, $44,115 and
$42,661, respectively.
Page 13
SUPPLEMENTAL SCHEDULE
WESTAMERICA BANCORPORATION
TAX DEFERRED SAVINGS/RETIREMENT PLAN (ESOP)
EMPLOYER IDENTIFICATION NUMBER: 94-2156203
PLAN NUMBER: 002
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 2003
(c)
(b) Description of Investment
Identity of Issuer, Including Maturity Date, (e)
Borrower, Lessor, Rate of Interest, Collateral, (d) Current
(a) or Similar Party Par or Maturity Value Cost Value
----- -------------------- ------------------------------ ----------- ----------
* Westamerica Common Mutual Fund
Stock Fund 705,860 shares $15,200,542 $35,081,251
* Vanguard 500 Index Fund Mutual Fund
47,250 shares 5,258,748 4,851,183
* Vanguard International Mutual Fund
Growth Fund 19 shares 223 300
* Vanguard LifeStrategy Mutual Fund
Conservative Growth Fund 60,532 shares 862,569 880,130
* Vanguard LifeStrategy Mutual Fund
Growth Fund 93,380 shares 1,711,475 1,695,782
* Vanguard LifeStrategy Mutual Fund
Income Fund 37,476 shares 481,985 494,684
* Vanguard LifeStrategy Mutual Fund
Moderate Growth Fund 93,642 shares 1,516,416 1,555,396
* Vanguard Morgan Growth Mutual Fund
Fund 163,352 shares 2,798,131 2,429,046
* Vanguard Prime Money Mutual Fund
Market Fund 2,712,196 shares 2,712,196 2,712,196
* Vanguard Total Bond Market Mutual Fund
Index Fund 77,507 shares 787,779 799,098
* Vanguard Total International Mutual Fund
Stock Index Fund 97,040 shares 897,585 1,032,504
* Vanguard Windsor II Fund Mutual Fund
18,980 shares 443,032 502,783
* Vanguard Extended Market Mutual Fund
Index Fund 7,524 shares 177,225 200,602
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WESTAMERICA BANCORPORATION
TAX DEFERRED SAVINGS/RETIREMENT PLAN (ESOP)
EMPLOYER IDENTIFICATION NUMBER: 94-2156203
PLAN NUMBER: 002
(Continued)
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 2003
(c)
(b) Description of Investment
Identity of Issuer, Including Maturity Date, (e)
Borrower, Lessor, Rate of Interest, Collateral, (d) Current
(a) or Similar Party Par or Maturity Value Cost Value
----- -------------------- ------------------------------ ----------- ----------
* Vanguard Short Term Mutual Fund
Federal Fund 10,850 shares $ 115,378 $ 114,790
* Participant Loans Interest rates ranging from
5.00% to 9.75% 1,154,771 1,154,771
----------- -----------
$34,118,055 $53,504,516
=========== ===========
* Party-in-interest to the Plan
Page 15
WESTAMERICA BANCORPORATION
TAX DEFERRED SAVINGS/RETIREMENT PLAN (ESOP)
EMPLOYER IDENTIFICATION NUMBER: 94-2156203
PLAN NUMBER: 002
SCHEDULE H, LINE 4j - SCHEDULE OF REPORTABLE TRANSACTIONS
For the Year Ended December 31, 2003
(h)
(f) Current
(a) Expense Value
Identity of (b) (c) (d) (e) Incurred (g) of Asset on (I)
Party Description Purchase Selling Lease With Cost of Transaction Net Gain
Involved of Asset Price Price Rental Transaction Asset Date or (Loss)
------------- ----------- ---------- ---------- ------ ----------- ---------- ---------- ----------
Category (I)
-------------
Purchases -
Series of
Transactions
-------------
Westamerica
Bancorporation:
Westamerica
Common Stock Common Stock $3,015,672 $3,015,672
Sales -
Series of
Transactions
-------------
Westamerica
Bancorporation:
Westamerica
Common Stock Common Stock $3,483,220 $1,881,458 $3,483,220 $1,601,762
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 21, 2004
-------------------------
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