SAN RAFAEL -- Westamerica Bancorporation (Nasdaq: WABC), the parent of Westamerica Bank, reported third-quarter net income decreased 10.7 percent from a year before, a decline attributed to a low interest-rate environment.

Net income was $20 million in the third quarter, ended Sept. 30.  Quarterly net interest income on a tax-equivalent basis was $48.7 million, declining 11 percent over 12 months.

"Westamerica continues to deliver relatively high levels of profitability in a difficult operating environment," said David Payne, Westamerica chairman, president and chief executive officer. "We are focused on operating in a low-cost, efficient manner while banking industry revenues are pressured by low interest rates, increased regulation and aggressive competition."

Credit quality improved during the quarter. Current nonperforming assets were $71 million, representing a 33.7 percent decline in value from a year before. Those loans represent 1.45 percent of the bank's net assets, currently valued at $4.89 billion.

The bancorp's provision for loan losses was $2.8 million, equivalent to third quarter 2011.

In an effort to offset the impact of reductions to income from loans and investments, Westamerica has reduced rates paid on interest-bearing deposits and reduced the volume of higher-cost funding sources.

The bank's interest cost declined to 0.13 percent as of Sept. 30, versus 0.20 percent at the same point in 2011. The bank has also sought to reduce costs related to resolution of problem loans. Noninterest expense declined 6.7 percent over the 12-month period.

The bank reported a net interest margin of 4.67 percent at the end of the quarter, compared with 5.32 percent 12 months prior.

As of Sept. 30, Westamerica had $2.2 billion in loans outstanding and a risk-weighted capital ratio of 16.2 percent.

The company's board of directors declared a quarterly cash dividend of 37 cents per share of common stock. It's payable Nov. 16 to shareholders of record as of Nov. 5.

The price of Westamerica shares was $44.83 at the close of trading Thursday. That was down 6 cents, or about one-10th of a percentage point, from Wednesday.