Westamerica BancorporationWABC

Morningstar Rating

Stock Research and Analysis

by Michael Kon, CFA

WestAmerica has carved out a very profitable niche in the crowded California market, resulting in industry-leading returns to its owners.

WestAmerica provides commercial and retail banking services through a network of branches in Northern and Central Read more

Bulls Say

WestAmerica's loss reserves and conservative lending philosophy more than offset the risk associated with a real-estate-intensive loan portfolio.

WestAmerica's profitability margins are far superior to its banking peers', and we credit management for successful implementation of its strategy.

The bank's low-cost approach results in a rock-solid competitive advantage. Read more

Bears Say

WestAmerica lacks the ability or desire to expand its niche beyond its current footprint, thus reducing growth opportunities.

The California real estate market is frothy, and WestAmerica's business is largely linked with the health of the region's economy.

Given a long record of low charge-offs, WestAmerica's large reserves are a poor use of shareholders' capital. Read more

Strategy

WestAmerica seeks to be the bank of choice for small and midsize businesses in Northern and Central California. The bank focuses its efforts on minimizing overhead, credit losses, and funding costs in Read more

Management

With their explicitly stated strategy and impressive record, chairman and CEO David Payne and his management team deserve most of the credit for WestAmerica's performance. We see consistency in the bank's cost-cutting strategy with regard to management Read more

Profile

Based in San Rafael, Calif., WestAmerica focuses its lending activities on small business and commercial real estate. The bank offers commercial lending, mortgage banking, Read more

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