) second quarter 2012 earnings were in line with the Zacks
Consensus Estimate. Results were adversely impacted by lower
revenue. Reduced non-interest expenses, improving credit quality
and stable capital ratios were the positives.
Due to challenging economic environment, net interest margin (NIM)
in the second quarter declined to 4.89% from 5.38% in the
prior-year period. We believe that the slow economic recovery and
the Federal Reserve s decision to keep short-term interest rates
low will keep NIM under pressure in the upcoming quarters.
Our six-month target price of $43.00 equates to about 14.3x the
Zacks Consensus Estimate for 2012. Combined with the $1.48 per
share annual dividend, this price target implies an expected
negative return of 7.0% over that period, which is consistent with
our long-term Underperform recommendation.
WESTAMER BANCP (WABC): Free Stock Analysis
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