Security Pacific and Westamerica discuss a deal.

Westamerica Bancorp, based in San Rafael, Calif., said it has agreed to drop its lawsuit against Security Pacific and hold talks with the Los Angeles-based bank company about a possible friendly merger. As part of the agreement, Security Pacific reportedly is withdrawing its application to the Federal Reserve Board for approval to acquire Westamerica, a Northern California bank holding company with $1.11 billion in assets. Separately, the board of directors of Nevada National Bancorp, parent of Nevada National Bank, approved a proposed merger with Security Pacific. The deal still requires shareholder and regulatory approvals.