On Aug 23, 2016, we issued an updated research report on Westamerica Bancorp. (NASDAQ:WABC) . Strained revenue growth remains a major concern for the company. This has also impacted the company’s profitability.
Persistent low rate environment is taking a toll on Westamerica’s interest income and compressing its net interest margin (“NIM”). The company has been witnessing a consistent fall in NIM over the past several quarters.
Further, declining loan balances add to the company’s woes. Over the last six years (2010–2015), loans have dropped at a CAGR of 12.1%, with the trend continuing in the first half of 2016. Unless the rate environment improves, Westamerica is likely to continue facing this headwind.
Also, Westamerica has been witnessing a fall in non-interest income. Over the last six years (2010–2015), fee income has decreased at a CAGR of 4.9%, with the trend continuing in the first half of 2016. We believe that unless the company is able to ward off heightened competition, non-interest income will continue to experience a downward trend.
Therefore, overall revenue improvement seems elusive for Westamerica.
Driven by revenue growth concerns, analysts have lowered their estimates for Westamerica. Over the last 30 days, the Zacks Consensus Estimate for 2016 inched down a penny; while for 2017, it is down 2.4%.
Currently, Westamerica carries a Zacks Rank #4 (Sell).
Stocks That Warrant a Look
Better-ranked banking stocks include American River Bankshares (NASDAQ:AMRB) , First Republic Bank (NYSE:FRC) and Central Pacific Financial Corp. (NYSE:CPF) . All three stocks carry a Zacks Rank #2 (Buy).
WESTAMER BANCP (WABC): Free Stock Analysis Report
AMER RIVER BSH (AMRB): Free Stock Analysis Report
CENTRAL PAC FIN (CPF): Free Stock Analysis Report
FIRST REP BK SF (FRC): Free Stock Analysis Report
Original post
Zacks Investment Research
- English (UK)
- English (India)
- English (Canada)
- English (Australia)
- English (South Africa)
- English (Philippines)
- English (Nigeria)
- Deutsch
- Español (España)
- Español (México)
- Français
- Italiano
- Nederlands
- Português (Portugal)
- Polski
- Português (Brasil)
- Русский
- Türkçe
- العربية
- Ελληνικά
- Svenska
- Suomi
- עברית
- 日本語
- 한국어
- 简体中文
- 繁體中文
- Bahasa Indonesia
- Bahasa Melayu
- ไทย
- Tiếng Việt
- हिंदी
Westamerica's Revenue Woes Continue To Hurt Profitability
Published 08/24/2016, 06:38 AM
Updated 07/09/2023, 06:31 AM
Westamerica's Revenue Woes Continue To Hurt Profitability
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or
remove ads
.
Latest comments
Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.