Westamerica Bancorporation (WABC) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $35.5 million ($1.33 EPS), down 11.9% year-over-year and 2.6% sequentially; six-month net income was $71.9 million ($2.69 EPS), down from $80.7 million ($3.02 EPS) year-over-year.

• Annualized return on average common equity was 14.4% in Q2 2024, down from 18.4% in Q2 2023.

• Lower net interest and loan fee income, higher funding costs, and increased noninterest expense contributed to the decline in earnings.

• The company remains well-capitalized, with a strong equity-to-assets ratio and robust liquidity position.

• Shareholders received a $0.44 per share dividend, up 4.8% year-over-year.

Financial highlights

• Net interest and loan fee income (FTE) for Q2 2024 was $64.1 million, down 8.8% year-over-year and 3.0% sequentially; six-month total was $130.2 million, down from $139.8 million.

• Noninterest income for Q2 2024 was $10.5 million, down 1.9% year-over-year but up 4.0% sequentially; noninterest expense rose to $26.1 million, up 1.1% year-over-year and flat sequentially.

• Total assets at June 30, 2024 were $6.31 billion, down 4.1% year-over-year; total deposits were $5.13 billion, a 10.1% decrease year-over-year.

• Return on assets for Q2 2024 was 2.18% (2.21% for six months), and return on equity was 14.39% (14.77% for six months).

• Net interest margin (FTE) was 4.15% for Q2 2024, compared to 4.34% in Q2 2023 and 4.30% in Q1 2024.

Outlook and guidance

• Management expects continued pressure on net interest income due to competitive deposit pricing and higher funding costs.

• The company anticipates maintaining strong capital and liquidity positions, with ongoing quarterly dividends.

• Management emphasized continued focus on low-cost operations and efficient spending, with 35% of revenue spent on operating costs in Q2 2024.

• Economic uncertainty, interest rate changes, and regulatory developments remain key factors influencing future performance.