We issued an updated research report on
) on Jun 19, 2014. A still low interest rate scenario continues to
weigh on the company's net interest margin (NIM). Nevertheless,
declining expenses amid the subdued economic environment pose as
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
However, Westamerica witnesses a consistent decline in expenses.
Also, the management remains focused on checking expenses in the
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.
CVB Financial Corp.
). 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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