Westamerica Bancorp in San Rafael, Calif., said Tuesday that its second-quarter earnings fell 45% from a year earlier, to $12.2 million, mainly as a result of a $18.2 million impairment charge related to its preferred shares of Freddie Mac and Fannie Mae.

The $4.2 billion-asset Westamerica said the charge reduced its net income by $10.5 million, or 35 cents a share.

Credit quality remained sound; Westamerica reported a second-quarter loan-loss provision of $600,000, compared with $75,000 a year earlier.

Its net interest margin rose 37 basis points from the first quarter and 80 basis points from a year earlier, to 5.16%.

By late Tuesday, Westamerica's stock price had increased 4.3% from Monday's close, to $44.26 a share.

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