SAN RAFAEL -- Citing challenges of a low-interest-rate environment, Westamerica Bancorporation (NASDAQ: WABC), parent company of Westamerica Bank, today reported that 2012 net income slipped 7.7 percent from 2011.

"Westamerica continues to deliver relatively high levels of profitability in a difficult operating environment," said Chairman and CEO David Payne in the announcement. "We are focused on controlling costs while banking industry revenues are pressured by low interest rates and aggressive competition Westamerica's capital ratios continue to exceed the highest regulatory guidelines."

Year-end earnings of $81.13 million represented $2.93 per common share, down 4.6 percent. The bank announced it held $4.95 billion in assets at year-end, down 1 percent from the end of 2011. The bank's loan-to-deposit ratio was 54.9 percent, compared with 65.6 percent in 2011.

Average earning assets were essentially flat, at $4.1 billion. The bank saw total returns on assets of 1.64 percent, down from 1.78 percent in 2011. The net interest margin for 2012 was 4.79 percent, down from 5.32 percent in 2011.

The bank's efficiency ratio notched upward to 4.6 percent, rising from 4.58 percent amid concerted effort to reduced expenses. The provision for loan losses -- $11.2 million -- remained the same as in 2011.

The bank increased the volume of investment securities in its portfolio by 30 percent to $1.8 billion. Total loans fell 15.4 percent to $2.3 billion.

Westamerica's loan quality improved during the year. Average nonperforming assets totaled $21.5 million, a 33.7 percent decline from 2011. Problem loans and repossessed collateral declined $41.8 million for the year.

The bank announced an average tier 1 capital ratio of 8.27 percent -- up from 8.1 percent in 2011 -- and a total regulatory and risk-adjusted capital ratio of 16.33 percent.

Shares in Westamerica were $44.38 at the close of trading Thursday, down 34 cents. The bancorp paid a 37 cent-a-share dividend to shareholders in the fourth quarter of 2012.