WABC · Westamerica Bancorporation

Westamerica Bancorporation’s first quarter 2026 results reflected stable profitability amidst a declining asset base. Net income of $27.4 million, or $1.13 per diluted share, represented a slight sequential decrease from $27.8 million but an increase in EPS from $1.12 in the fourth quarter of 2025. The sequential EPS improvement was aided by a $300,000 reversal of provision for credit losses, which contributed $0.01 per share, and a lower share count due to active repurchase activity. The company retired 997,000 shares during the quarter, significantly reducing the average diluted shares outstanding compared to the prior year period.

Net interest income on a fully-taxable equivalent basis declined to $52.7 million from $53.5 million in the prior quarter. This compression was primarily volume-driven, as average earning assets fell to $5.64 billion from $5.67 billion. However, the net interest margin remained relatively resilient at 3.74%, down only two basis points sequentially. Management highlighted the strategic benefit of its low-cost deposit franchise, noting that non-interest bearing checking accounts represented 46% of the deposit base, allowing the bank to maintain a cost of funds of just 0.24%. This funding advantage partially offset the decline in asset yields, which fell to 3.98% from 4.00%.

Noninterest income decreased to $9.6 million, largely due to lower debit card fees and $247,000 in unrealized securities losses. Noninterest expenses rose to $25.9 million, driven by seasonally higher payroll taxes and benefit costs, though the efficiency ratio remained strong at 41.6%. Credit quality continued to be a highlight, with nonperforming assets totaling just $1.4 million at quarter-end. Chairman and CEO David Payne emphasized the company’s stable credit quality and disciplined expense management, noting an annualized return on average common equity of 11.0%.