Westamerica Bancorp Earnings: Here’s Why Investors Don’t Like These Results

Westamerica Bancorp. (NASDAQ:WABC) delivered a profit and met Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 1.31%.

Westamerica Bancorp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 14.67% to $0.64 in the quarter versus EPS of $0.75 in the year-earlier quarter.

Revenue: Decreased 5.84% to $56.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Westamerica Bancorp. reported adjusted EPS income of $0.64 per share. By that measure, the company missed the mean analyst estimate of $0.64. It beat the average revenue estimate of $56.01 million.

Quoting Management: “Westamerica continues to deliver relatively high levels of profitability from a high-quality balance sheet. Our credit quality has continued to improve with nonperforming assets declining 36 percent in the last twelve months, and net loan charge-offs declining to $3.9 million in the six-months ended June 30, 2013 compared to $6.9 million in the six-months ended December 31, 2012. The sustained improvement in our credit quality resulted in a reduced provision for loan losses of $1.8 million for the second quarter 2013. Our annualized net interest margin was 4.12 percent for the second quarter 2013, which reflects continued pressure from low market interest rates and aggressive loan competition,” said Chairman, President and CEO David Payne. “We remain focused on controlling noninterest expenses, which declined $1.2 million in the second quarter 2013 compared to the second quarter 2012. Westamerica paid a $0.37 per common share dividend in the second quarter 2013, and retired 249 thousand common shares in the quarter using our share repurchase plan,” added Payne.

Key Stats (on next page)…

Revenue increased 3.95% from $54.74 million in the previous quarter. EPS decreased 0% from $0.64 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.64 and has not changed. For the current year, the average estimate is a profit of $2.56, which is the same with that ninety days ago.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)