Westamerica Bancorporation (WABC) AI Stock Analysis

• Market Cap: $1.34B
• Dividend Yield: 3.58%
• Average Volume (3M): 128.34K
• Price to Earnings (P/E): 10.3
• Beta (1Y): 0.76
• Revenue Growth: -7.38%
• EPS Growth: -15.58%
• Country: US
• Employees: 616
• Sector: Financial
• Sector Strength: 82
• Industry: Banks - Regional
• EPS (TTM): 1.16
• Shares Outstanding: 26,180,676
• 10 Day Avg. Volume: 153,123
• 30 Day Avg. Volume: 128,343
• PEG Ratio: -2.40
• Price to Book (P/B): 1.33
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 9.30
• Enterprise Value/Market Cap: 0.46
• Enterprise Value/Revenue: 0.49
• Enterprise Value/Gross Profit: 2.16
• Enterprise Value/Ebitda: 0.75
• 1Y Price Target: $52.50
• Price Target Upside: 2.24% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

• Rating: 76 Outperform
• Price Target: $54.00 ▲(5.16%Upside)

The overall stock score is primarily driven by strong financial performance, marked by high profitability and solid cash flow management. Valuation metrics suggest the stock is attractively priced, supporting the score. However, mixed technical indicators imply cautious market sentiment, slightly offsetting the positive financial outlook.

Positive Factors

Credit Quality

WABC's credit quality remains very strong, with non-accrual loans equal to only 0.02% of total loans and a high level of reserve coverage.

Expense Management

WABC is regarded as an exceptional bank with pristine credit quality and excellent expense management.

Negative Factors

Net Interest Margin

The net interest margin has decreased.

Profitability

A slow but steady decline in profitability is expected in the coming quarters.

Westamerica Bancorporation Business Overview & Revenue Model

Company Description

Westamerica Bancorporation operates as a bank holding company for the Westamerica Bank that provides various banking products and services to individual and commercial customers. The company accepts various deposit products, including retail savings and checking accounts, as well as certificates of deposit. Its loan portfolio includes commercial, commercial and residential real estate, real estate construction, and consumer installment loans, as well as indirect automobile loans. It operates through 78 branch offices in 21 counties in Northern and Central California. The company was formerly known as Independent Bankshares Corporation and changed its name to Westamerica Bancorporation in 1983. The company was incorporated in 1972 and is headquartered in San Rafael, California.

How the Company Makes Money

Westamerica Bancorporation primarily generates revenue through interest income from its loan portfolio and investment securities. The company earns money by providing loans to individuals and businesses, charging interest on these loans, and collecting fees for various banking services. Additionally, Westamerica Bancorporation generates non-interest income through service charges on deposit accounts, fees for managing assets, and other financial services. The company's profitability is influenced by its ability to manage interest rate spreads, maintain low-cost deposits, and efficiently manage its operating expenses. Strategic partnerships, such as collaborations with financial service providers and community organizations, also contribute to its revenue streams.

Westamerica Bancorporation Financial Statement Overview

Summary

Westamerica Bancorporation showcases strong financial health across all statements. The income statement highlights high profitability despite a decline in revenue. The balance sheet reflects low leverage and effective equity utilization, while cash flow analysis indicates robust cash generation and management. The company's financial stability and profitability position it well within the regional banking industry, though attention to revenue growth remains important for future performance.

Income Statement

The income statement reflects strong profitability with a high gross profit margin of approximately 94.27% and a solid net profit margin of 44.09% for TTM (Trailing-Twelve-Months). Despite a decrease in total revenue by 8.99% compared to the previous annual report, the company maintains robust EBIT and EBITDA margins at 60.05% and 63.17%, respectively. The high margins indicate effective cost management, although the revenue decline suggests potential challenges in revenue generation.

Balance Sheet

The balance sheet demonstrates stability with a low debt-to-equity ratio of 0.14, indicating low leverage. The return on equity is strong at 14.44%, suggesting efficient use of shareholder funds. Additionally, the equity ratio stands at 15.47%, reflecting a conservative capital structure. The company's strong equity position and low debt levels contribute to its financial resilience, though the modest equity ratio highlights a smaller proportion of equity financing relative to total assets.

Cash Flow

Cash flow analysis shows strong operational performance with a high operating cash flow to net income ratio of 0.99 and a robust free cash flow to net income ratio of 0.97. The company exhibits a positive free cash flow growth rate of 15.11% compared to the previous annual report, indicating effective cash management and the ability to generate cash beyond operational needs. This strong cash flow performance enhances the company's financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	302.14M	311.17M	327.54M	266.88M	216.79M	207.96M
Gross Profit	284.87M	293.45M	324.80M	264.95M	214.83M	201.83M
EBITDA	190.91M	199.46M	233.35M	182.16M	133.64M	129.45M
Net Income	133.26M	138.64M	161.77M	122.03M	86.51M	80.41M
Balance Sheet
Total Assets	5.97B	6.08B	6.36B	6.95B	7.46B	6.75B
Cash, Cash Equivalents and Short-Term Investments	1.90B	1.94B	4.19B	4.63B	5.77B	4.68B
Total Debt	133.21M	138.31M	76.98M	73.54M	164.23M	121.38M
Total Liabilities	5.04B	5.19B	5.59B	6.35B	6.63B	5.90B
Stockholders Equity	923.14M	889.96M	772.89M	602.11M	827.10M	844.81M
Cash Flow
Free Cash Flow	129.93M	139.83M	157.05M	112.89M	87.41M	105.54M
Operating Cash Flow	131.75M	141.57M	158.21M	113.70M	88.73M	107.74M
Investing Cash Flow	843.12M	715.68M	547.27M	-631.29M	-306.08M	-748.92M
Financing Cash Flow	-681.79M	-446.07M	-809.40M	-320.26M	728.16M	889.03M

Westamerica Bancorporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 51.35
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WABC, the sentiment is Positive. The current price of 51.35 is above the 20-day moving average (MA) of 48.18, above the 50-day MA of 48.58, and above the 200-day MA of 50.10, indicating a bullish trend. The MACD of 0.50 indicates Negative momentum. The RSI at 69.30 is Neutral, neither overbought nor oversold. The STOCH value of 92.92 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WABC.

Westamerica Bancorporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WABC	76 Outperform	$1.34B	10.28	15.54%	3.58%	-7.38%	-15.58%
VBTX	76 Outperform	$1.50B	13.55	7.07%	3.19%	1.41%	19.00%
CCB	74 Outperform	$1.54B	30.33	12.78%	―	16.62%	18.72%
STEL	73 Outperform	$1.53B	13.66	7.40%	1.89%	-0.58%	-3.02%
HOPE	70 Outperform	$1.48B	14.76	4.44%	4.85%	-11.94%	-21.67%
TCBK	70 Outperform	$1.41B	12.56	9.38%	3.07%	3.01%	4.55%
Sector *	65 Neutral	kr119.76B	25.08	7.49%	4.19%	13.90%	-82.08%

Westamerica Bancorporation Corporate Events

Westamerica Bancorporation Announces Executive Leadership Transition

Westamerica Bancorporation has announced the retirement of John “Robert” A. Thorson from his role as Senior Vice President and Treasurer, effective January 24, 2025, after more than 35 years of service. John Sousa has been appointed as the new Senior Vice President and Treasurer, effective January 27, 2025, following his initial joining of the company in July 2024, bringing with him extensive experience in investment portfolio management and derivatives execution from Bank of the West.