Westamerica Bancorporation (NASDAQ:WABC) Posts Better-Than-Expected Sales In Q4 CY2025

What Happened?

Shares of regional bank Westamerica Bancorporation jumped 2.6% in the afternoon session after comments from a key Federal Reserve official boosted hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.

The shares closed the day at $47.64, up 2.5% from previous close.

Is now the time to buy Westamerica Bancorporation? Access our full analysis report here.

What Is The Market Telling Us

Westamerica Bancorporation’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock gained 4.1% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.

Westamerica Bancorporation is down 7.6% since the beginning of the year, and at $47.65 per share, it is trading 18.2% below its 52-week high of $58.23 from November 2024. Investors who bought $1,000 worth of Westamerica Bancorporation’s shares 5 years ago would now be looking at an investment worth $825.74.

As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the regional banks industry, including Westamerica Bancorporation and its peers.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

The 94 regional banks stocks we track reported a satisfactory Q3. As a group, revenues missed analysts’ consensus estimates by 1.1%.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

Westamerica Bancorporation

Founded in 1884 and serving communities from Mendocino County in the north to Kern County in the south, Westamerica Bancorporation provides banking services to individuals and small businesses throughout Northern and Central California.

Westamerica Bancorporation reported revenues of $63.74 million, down 14% year on year. This print exceeded analysts’ expectations by 2%. Overall, it was a strong quarter for the company with a solid beat of analysts’ net interest income estimates and a decent beat of analysts’ revenue estimates.

"Westamerica’s third quarter 2025 results benefited from the Company’s low-cost operating principles. The annualized cost of funding interest-earning loans, bonds and cash was 0.26 percent for the third quarter 2025. The Company recognized no provision for credit losses in the third quarter 2025. At September 30, 2025, nonperforming assets were $2.6 million and the allowance for credit losses on loans was $11.9 million. Westamerica operated efficiently, spending 40 percent of its revenue on operating costs in the third quarter 2025,” said Chairman, President and CEO David Payne.

Interestingly, the stock is up 3.3% since reporting and currently trades at $47.99.

Is now the time to buy Westamerica Bancorporation? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: Customers Bancorp

Originally founded with a "high-tech, high-touch" branch-light banking strategy, Customers Bancorp is a bank holding company that provides commercial and consumer banking services through its Customers Bank subsidiary, with a focus on business lending and digital banking.

Customers Bancorp reported revenues of $232.1 million, up 38.5% year on year, outperforming analysts’ expectations by 7%. The business had a stunning quarter with an impressive beat of analysts’ net interest income estimates and a solid beat of analysts’ revenue estimates.

The market seems content with the results as the stock is up 2% since reporting. It currently trades at $66.83.

Is now the time to buy Customers Bancorp? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: The Bancorp

Operating behind the scenes of many popular fintech apps and prepaid cards you might use daily, The Bancorp is a bank holding company that specializes in providing banking services to fintech companies and offering specialty lending products.

The Bancorp reported revenues of $174.6 million, up 38.8% year on year, falling short of analysts’ expectations by 10%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue and net interest income estimates.

As expected, the stock is down 20.3% since the results and currently trades at $61.55.

Read our full analysis of The Bancorp’s results here.

TriCo Bancshares

Founded in 1975 and headquartered in Chico, California, TriCo Bancshares operates Tri Counties Bank, providing personal, small business, and commercial banking services through branches across California.

TriCo Bancshares reported revenues of $107.6 million, up 8.6% year on year. This number beat analysts’ expectations by 1.2%. Overall, it was a strong quarter as it also produced a beat of analysts’ EPS and tangible book value per share estimates.

The stock is up 7.5% since reporting and currently trades at $45.74.

Read our full, actionable report on TriCo Bancshares here, it’s free for active Edge members.

SouthState

With roots dating back to the Great Depression era of 1933, SouthState is a financial holding company that provides banking services, wealth management, and correspondent banking services across six southeastern states.

SouthState reported revenues of $698.8 million, up 63.9% year on year. This result topped analysts’ expectations by 6.5%. It was a stunning quarter as it also put up an impressive beat of analysts’ net interest income estimates and a solid beat of analysts’ revenue estimates.

The stock is down 5.3% since reporting and currently trades at $88.88.

Read our full, actionable report on SouthState here, it’s free for active Edge members.

Regional bank Westamerica Bancorporation reported revenue ahead of Wall Street’s expectations in Q3 CY2025, but sales fell by 13.6% year on year to $64 million. Its GAAP profit of $1.12 per share was 4.2% above analysts’ consensus estimates.

Is now the time to buy Westamerica Bancorporation? Find out by accessing our full research report, it’s free for active Edge members.

Westamerica Bancorporation (WABC) Q3 CY2025 Highlights:

• Net Interest Income: $53.85 million vs analyst estimates of $52.79 million (13.4% year-on-year decline, 2% beat)
• Net Interest Margin: 3.8% vs analyst estimates of 3.8% (in line)
• Revenue: $64 million vs analyst estimates of $62.51 million (13.6% year-on-year decline, 2.4% beat)
• Efficiency Ratio: 40.3% vs analyst estimates of 39.8% (50 basis point miss)
• EPS (GAAP): $1.12 vs analyst estimates of $1.08 (4.2% beat)
• Market Capitalization: $1.18 billion

"Westamerica’s third quarter 2025 results benefited from the Company’s low-cost operating principles. The annualized cost of funding interest-earning loans, bonds and cash was 0.26 percent for the third quarter 2025. The Company recognized no provision for credit losses in the third quarter 2025. At September 30, 2025, nonperforming assets were $2.6 million and the allowance for credit losses on loans was $11.9 million. Westamerica operated efficiently, spending 40 percent of its revenue on operating costs in the third quarter 2025,” said Chairman, President and CEO David Payne.

Company Overview

Founded in 1884 and serving communities from Mendocino County in the north to Kern County in the south, Westamerica Bancorporation provides banking services to individuals and small businesses throughout Northern and Central California.

Sales Growth

In general, banks make money from two primary sources. The first is net interest income, which is interest earned on loans, mortgages, and investments in securities minus interest paid out on deposits. The second source is non-interest income, which can come from bank account, credit card, wealth management, investing banking, and trading fees. Thankfully, Westamerica Bancorporation’s 5.3% annualized revenue growth over the last five years was decent. Its growth was slightly above the average banking company and shows its offerings resonate with customers.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Westamerica Bancorporation’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 9.4% over the last two years.

This quarter, Westamerica Bancorporation’s revenue fell by 13.6% year on year to $64 million but beat Wall Street’s estimates by 2.4%.

Net interest income made up 83.3% of the company’s total revenue during the last five years, meaning Westamerica Bancorporation barely relies on non-interest income to drive its overall growth.

Our experience and research show the market cares primarily about a bank’s net interest income growth as non-interest income is considered a lower-quality and non-recurring revenue source.

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Key Takeaways from Westamerica Bancorporation’s Q3 Results

It was encouraging to see Westamerica Bancorporation beat analysts’ revenue and EPS expectations this quarter. We were also happy its net interest income outperformed Wall Street’s estimates. On the other hand, net interest margin was just in line and efficiency ratio missed slightly. Overall, this print was still solid. The stock remained flat at $45.80 immediately after reporting.

Big picture, is Westamerica Bancorporation a buy here and now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.