Westamerica (WABC) in San Rafael, Calif., reported that its second-quarter earnings fell slightly after loans and fee income declined.

The $5 billion-asset company reported Monday that its quarterly results fell more than 1% from a year earlier, to $21 million. Its earnings per share of 75 cents fell short of analysts' expectations by a penny, according to Thomson Reuters.

The company's second-quarter net interest income fell almost 10% from a year earlier, to $50.3 million. This decrease was largely related to reductions in yields on loans and investment securities, which fell because of low interest rates. Total loans fell by roughly 15% from a year earlier, to $2.4 billion.

Loan originations have been hurt by competitive pricing, causing the company's management to look elsewhere for potential earnings, Westamerica said in a press release. To offset the decline in interest income, the company reduced rates paid on interest-bearing deposits and borrowings to minimize interest expense.

The company's noninterest income fell almost 12% from a year earlier, to $13.5 million, because of a $1.3 million loss from the sale of a collateralized mortgage obligation bond.

Credit quality improved. Nonperforming assets declined roughly 36% from a year earlier, to $79.3 million. The loan-loss provision was unchanged from a year earlier, at $2.8 million.

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