Westamerica Bancorp.'s profits fell again in the first quarter as a result of management's decision to shrink its loan portfolio and load up on lower-yielding investment securities

The San Rafael, Calif., company said Wednesday that net income declined by nearly 3% from the same period last year, to $14.6 million, while earnings per share fell by a penny, to 57 cents. Revenue, interest income and noninterest income all fell by at least 5% year over year, the $5 billion-asset company reported.

With interest rates still at historic lows, Westamerica has been consciously letting loans run off in recent years and has instead been investing in shorter-duration, low-yielding securities. Its loan-to-deposit ratio was at 38.2% at March 31, down from 43.3% a year earlier and roughly 75% five years ago.

For the quarter, total loans were down 7.6% year over year, to $1.7 billion, while its total securities portfolio increased 17.1%, to $2.7 billion. However, its net interest margin declined by only 10 basis points, to 3.43%, due primarily to the company's low funding costs.

Westamerica's shares were trading at $44.08 midday Wednesday, up 1% from Tuesday's close.

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