Westamerica Bancorp. in San Rafael, Calif., reported lower quarterly results as lower yields and a smaller loan book dragged down profit.

The $5 billion-asset company's net income fell 6% from a year earlier, to $15 million. Earnings of 58 cents a share were in line with the average estimate of analysts polled by Bloomberg.

Lower returns from loans squeezed earnings. Net interest income fell 6%, to $33.5 million. The loan portfolio shrunk by 7%, to $1.7 billion, while the net interest margin compressed by 39 basis points, to 3.53%. Westamerica reported declines in commercial real estate and consumer lending volume.

Credit quality improved. The company slashed its loan-loss provision by 88%, to $200,000. Nonperforming assets fell 30%, to $24 million.

Lower fee revenue also weighed down results. Noninterest income fell 11%, to $12.5 million, mainly because of lower service charges on deposit accounts and debit cards.

Noninterest expenses fell 6%, to $23.3 million, largely due to lower salary costs.

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