Westamerica Troubled by Margin Pressure - Analyst Blog

We issued an updated research report on Westamerica Bancorp. (NASDAQ: WABC) on Jun 19, 2014. A still low interest rate scenario continues to weigh on the company's net interest margin (NYSE: NIM). Nevertheless, declining expenses amid the subdued economic environment pose as its strength.

Westamerica has been witnessing persistent decline in NIM over the preceding years. The figure decreased to 4.08% in 2013 from 4.79% in 2012, 5.32% in 2011 and 5.54% in 2010. We do not foresee any respite in this front as interest rate scenario is not expected to change significantly in the near term.

Westamerica reported first-quarter 2014 results on Apr 15. Though earnings per share were in line with the Zacks Consensus Estimate, it declined 9.4% year over year. While the company recorded a steady descent in expenses, the positive impact of the same was offset by decline in both net interest income and fee income.

Further, following Westamerica's unimpressive first-quarter results, the Zacks Consensus Estimate for 2014 inched down 1.7% to $2.38 per share over the last 60 days. For 2015, the Zacks Consensus Estimate decreased 1.6% to $2.46 per share over the same time period.

However, Westamerica witnesses a consistent decline in expenses. Also, the management remains focused on checking expenses in the forthcoming quarters.

Currently, Westamerica has a Zacks Rank #4 (Sell).

Stocks That Warrant a Look

Some better-ranked banks in the same region include Central Pacific Financial Corp. (NYSE: CPF), CVB Financial Corp. (NASDAQ: CVBF) and Zions Bancorporation (NASDAQ: ZION). While Central Pacific Financial and CVB Financial Corp sport a Zacks Rank #1 (Strong Buy), Zions holds a Zacks Rank #2 (Buy).

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WESTAMER BANCP (NASDAQ: WABC): Free Stock Analysis Report
 
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