Westamerica Bancorporation (WABC) has wrapped up FY 2025 with fourth quarter revenue of US$63.3 million and basic EPS of US$1.12, alongside net income of US$27.8 million, providing a clear snapshot of its latest run rate. The bank has seen quarterly revenue shift from US$73.9 million in Q3 2024 to US$63.3 million in Q4 2025, with basic EPS moving from US$1.31 to US$1.12 over the same stretch. Trailing twelve month revenue for Q4 2025 is US$258.4 million and EPS is US$4.52. In that context, Westamerica’s net profit margin profile and changes in quarterly performance focus attention on how stable those margins appear.

With the headline numbers on the table, the next step is to consider them alongside prevailing market and community narratives to see which views align with the latest margins and earnings trends and which ones are challenged by the new data.

Margins Stay High, Even With Softer TTM Numbers

• On a trailing basis, WABC is converting about US$258.4 million of revenue into US$116.2 million of net income, which lines up with the 45% net profit margin cited, compared with 47.3% a year earlier.
• What stands out for a bearish view that focuses on negative earnings growth is that margins are still high, even as the trailing EPS figure has moved from US$5.49 a year ago to US$4.52 now.
  • Bears point to earnings declining over the past year and forecasts of roughly 11.1% annual EPS declines, yet the 45% margin indicates the core franchise is still earning a sizeable spread on each dollar of revenue.
  • Critics highlight the margin slip from 47.3% to 45% alongside trailing revenue easing from US$304.0 million to US$258.4 million, which supports concerns about pressure on profitability even if the business remains solidly in the black.

To see how these strong margins fit into the broader long term story, including risks and valuation, check out the balanced narrative many investors are watching. 📊 Read the full Westamerica Bancorporation Consensus Narrative.

Loan Book And Asset Quality Move Around

• Total loans in the quarterly snapshots move from US$833.9 million in Q3 2024 to US$771.0 million in Q1 2025 and US$741.6 million in Q3 2025, while non performing loans vary from US$0.9 million in Q3 2024 to US$0.3 million in Q1 2025 and US$4.96 million in Q2 2025.
• What is interesting for a bearish argument around credit risk is that the swings in non performing loans do not run in a straight line with earnings, which are reported at US$35.1 million in Q3 2024, US$31.0 million in Q1 2025 and US$28.3 million in Q3 2025.
  • Critics highlight the jump in non performing loans to US$4.96 million in Q2 2025 from US$0.28 million in Q1 2025, contrasting it with net income remaining above US$29.0 million that quarter, which suggests credit issues alone do not fully explain the earnings pattern.
  • Bears also point to the smaller loan book in recent quarters, with loans at US$741.6 million in Q3 2025 versus US$833.9 million in Q3 2024, as another data point they link to the weaker trailing earnings trend.

Valuation, P/E Gap And Dividend Yield

• WABC trades on a trailing P/E of 10.6x against 12x for the US Banks industry and 14.7x for peers, with the current share price of US$49.86 sitting well below a DCF fair value of about US$114.87 and supported by a 3.69% dividend yield.
• For a bullish stance, the combination of a lower P/E multiple and the gap to the US$114.87 DCF fair value is often framed as potential upside, but it sits alongside forecasts calling for roughly 5% annual revenue declines and 11.1% annual EPS declines over the next three years.
  • Supporters argue that trading about 56.6% under the DCF fair value with a 3.69% yield reflects a market that is already factoring in weaker growth, which they see as creating room for the valuation to close part of that gap.
  • At the same time, the expectation of falling earnings and revenue, despite the 45% trailing net margin, is exactly what keeps others cautious about how long the 10.6x P/E and dividend yield can stay where they are.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Westamerica Bancorporation's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

Explore Alternatives

For all its high margins, WABC is working with softer trailing revenue, a smaller loan book and forecasts pointing to annual EPS declines.

If you want ideas that lean toward more consistent revenue and earnings instead of that kind of pressure, check out our stable growth stocks screener (2160 results) today and focus on companies built around steadier trajectories.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.