) third quarter earnings were on par with the Zacks Consensus
Estimate. Results were adversely impacted by lower net interest
income. We believe that a weak interest rate scenario and low
investment returns will restrict any significant bottom-line
improvement in the near term.
Westamerica's average interest earnings assets of $4.11 billion in
the first nine months of 2012 declined 0.4% from the prior-year
period. We don t expect any significant improvement in interest
earnings assets in the near term, given the weak interest rates and
low investment returns amid the ongoing sluggish economic recovery.
Our six-month target price of $40.00 equates to about 13.6x the
Zacks Consensus Estimate for 2012. Combined with the $1.48 per
share annual dividend, this price target implies an expected
negative total return of 7.6% over that period, which is consistent
with our long-term Underperform recommendation on the shares.
WESTAMER BANCP (WABC): Free Stock Analysis
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