West Coast Bancorp Reports Second Quarter 2012 Net Income of $6.0 Million, a 30% Increase From the Same Quarter a Year Ago


  • Return on Average Assets Was 1.01% in the Second Quarter 2012, an Improvement From .76% in the Same Quarter Last Year.
  • Net Income for the Six Month Period Ended, June 30, 2012 Was $11.8 Million, an Increase of 21% From the Same Period in 2011.
  • The Written Agreement Between the Holding Company and Certain Regulators Was Terminated on June 27, 2012.
  • Second Quarter 2012 Total Noninterest Expense Declined 6%, or $1.5 Million, From the Same Period in 2011.
  • The Efficiency Ratio Improved to 70.3% in First Half of 2012 From 75.1% in the Same Period in 2011.

LAKE OSWEGO, Ore., July 23, 2012 (GLOBE NEWSWIRE) -- West Coast Bancorp (Nasdaq:WCBO) ("Bancorp" or "Company"), the parent company of West Coast Bank ("Bank") and West Coast Trust Company, Inc., today announced second quarter 2012 net income of $6.0 million or $.28 per diluted share compared to net income of $4.6 million or $.22 per diluted share in the same quarter of 2011. Net income for the first six months of 2012 was $11.8 million or $.55 per diluted share compared to net income of $9.7 million or $.45 per diluted share in the same period of 2011.

"Net income reached $11.8 million for the first half of 2012 and grew 21% or $2.1 million from the same period a year ago," said Robert D. Sznewajs, President and Chief Executive Officer. "The continued reduction in credit-related costs and ongoing improvements in expense management were the primary contributors to the improved operating results. The Company's return on average assets for the first half of 2012 reached 1.00% compared to .80% in the same period in 2011."

Table 1 below shows summary financial information for the quarters ended June 30, 2012, and 2011, and March 31, 2012.

 
Table 1          
SUMMARY FINANCIAL INFORMATION
           
  Qtr. ended Qtr. ended   Qtr. ended  
  June 30, June 30,   March 31,  
(Dollars and shares in thousands) 2012 2011 Change 2012 Change
Net income  $ 6,034  $ 4,634  $ 1,400  $ 5,789  $ 245
Net income available to common stockholders 1  $ 5,639  $ 4,312  $ 1,327  $ 5,393  246
           
Selective quarterly performance ratios          
Return on average assets, annualized 1.01% 0.76%  0.25 0.98% 0.03%
Return on average equity, annualized 7.50% 6.58%  0.92 7.34% 0.16%
Efficiency ratio2 70.85% 76.05%  (5.20) 69.76% 1.09%
           
Share and Per Share Figures-Actual          
Common shares outstanding at period end  19,295  19,316  (21)  19,295  -- 
Weighted average diluted shares3  21,547  21,326  221  21,348  199
Weighted average diluted shares-two class method 4  20,256  20,025  231  20,054  202
Net income per diluted share  $ 0.28  $ 0.22  $ 0.06  $ 0.27  $ 0.01
Book value per common share  $ 15.91  $ 13.69  $ 2.22  $ 15.54  $ 0.37
           
1 Adjusted for the impact of allocating net income to participating instruments, which include restricted stock and Series B preferred stock.
2 The efficiency ratio has been computed as noninterest expense divided by the sum of net interest income on a tax equivalent basis and noninterest income excluding gains/losses on sales of securities.
3 Reflects the average dilutive impacts of Series B preferred stock (1,213), warrants (1,148), options (26), and restricted stock (78).
4 Reflects the calculation of diluted shares under the two-class method which includes average common (19,082), options (26), and warrants (1,148).
 

Balance Sheet Overview

Total loans at June 30, 2012, increased $25 million or 2% from March 31, 2012, with growth occurring in the commercial real estate term and construction portfolios. Second quarter 2012 average total loan balances of $1.48 billion declined $44 million or 3% from the same quarter of 2011. The decline was primarily a result of lower average commercial, mortgage, and home equity balances. Home equity loan and line production continues to reflect the effects of residential real estate market conditions. The yield on the loan portfolio of 5.08% in the most recent quarter declined 25 basis points compared to the second quarter last year as higher yielding loans paid off and new loans were originated at lower yields reflecting prevailing market interest rates. The yield on loans contracted 12 basis points in the second quarter of 2012 from the first quarter of 2012.

 
Table 2                
AVERAGE LOANS FOR THE QUARTER
(Dollars in thousands) June 30, % of June 30, % of Change March 31, % of
  2012 Total 2011 total Amount % 2012 Total
Commercial loans  $ 284,473 19%  $ 301,436 20%  $ (16,963) -6%  $ 288,395 19%
Commercial real estate construction  23,200 2%  19,029 1%  4,171 22%  18,547 1%
Residential real estate construction  11,283 1%  17,223 1%  (5,940) -34%  12,680 1%
Total real estate construction loans  34,483 3%  36,252 2%   (1,769) -5%  31,227 2%
Mortgage  62,610 4%  73,303 5%  (10,693) -15%  66,125 5%
Home equity  252,014 17%   266,221 17%  (14,207) -5%  254,883 17%
Total real estate mortgage  314,624 21%  339,524 22%  (24,900) -7%  321,008 22%
Commercial real estate loans  832,870 56%  831,738 55%  1,132 0%  828,681 56%
Installment and other consumer loans  12,776 1%  14,220 1%   (1,444) -10%  13,211 1%
Total loans  $ 1,479,226    $ 1,523,170    $ (43,944) -3%  $ 1,482,522  
                 
Yield on loans 5.08%   5.33%    (0.25)   5.20%  
 

The 2012 second quarter average balance of total cash equivalents and investment securities of $775 million remained relatively unchanged over the past twelve months. The Company reduced its average cash equivalents balance by $50 million in the most recent quarter from the second quarter of 2011 while increasing its investment securities portfolio by $29 million. The shift towards the investment portfolio reflected efforts to improve net interest income and margin in a period where market interest rates are expected to remain low for some time. Over the past year, the Company has increased its investments in U.S. government agency and municipal securities. During this time purchases consisted principally of U.S. government agency securities with 3-5-year maturities as well as 10-year and 15-year fully amortizing U.S. government agency mortgage-backed securities. The expected duration of the investment portfolio was approximately 2.8 years at June 30, 2012, compared to approximately 3.0 years a year ago.

The 2012 second quarter yield on total cash equivalents and investment securities balances was 2.29%, a decline of 31 basis points from the corresponding quarter of 2011, and down 7 basis points from the first quarter of 2012. This reflected continued investment securities purchases with yields lower than those that matured or were called in the portfolio.

 
Table 3          
AVERAGE CASH EQUIVALENTS AND INVESTMENT SECURITIES FOR THE QUARTER
(Dollars in thousands) June 30, June 30, Change March 31,
  2012 2011 Amount % 2012
Cash equivalents:          
Federal funds sold  $ 2,555  $  4,790  $ (2,235) -47%  $ 2,601
Interest-bearing deposits in other banks  45,260  93,225  (47,965) -51%  35,334
Total cash equivalents  47,815  98,015  (50,200) -51%  37,935
           
Investment securities:          
U.S. Treasury securities  200   4,261  (4,061) -95%  202
U.S. Government agency securities  230,509  183,601  46,908 26%  213,035
Corporate securities   8,516  9,846  (1,330) -14%  8,507
Mortgage-backed securities  407,011  427,944  (20,933) -5%  414,198
Obligations of state and political sub.  67,882  59,850  8,032 13%  61,337
Equity investments and other securities  12,735  12,614   121 1%  12,721
Total investment securities  726,853  698,116  28,737 4%  710,000
           
Total cash equivalents and investment securities  $ 774,668  $ 796,131  $ (21,463) -3%  $ 747,935
           
Tax equivalent yield on cash equivalents and investment securities 2.29% 2.60%  (0.31)   2.36%
 

Average total deposits of $1.87 billion in the second quarter 2012 declined 3% or $62 million from the same period in 2011 and were substantially unchanged from the prior quarter. Consistent with past trends, the Company continued to reduce its time deposit balances, which declined $74 million or 33% from the corresponding quarter in 2011. Time deposits represented 8% of the Company's average total deposits in the most recent quarter compared to 12% during the same quarter of 2011.

 
Table 4                
AVERAGE DEPOSITS, BORROWINGS AND SUBORDINATED DEBENTURES FOR THE QUARTER
(Dollars in thousands) Q2 % of Q2 % of Change Q1 % of
  2012 Total 2011 Total Amount % 2012 Total
Demand deposits  $ 621,547 33%  $ 578,562 29%  $ 42,985 7%  $ 585,749 31%
Interest-bearing demand  374,579 20%  365,407 19%  9,172 3%  366,635 20%
Total checking deposits  996,126 53%  943,969 48%  52,157 6%  952,384 51%
Savings  127,930 7%   110,683 6%  17,247 16%  123,725 7%
Money market  596,949 32%  654,668 34%  (57,719) -9%  623,111 33%
Total non-time deposits  1,721,005 92%  1,709,320 88%  11,685 1%  1,699,220 91%
Time deposits  151,085 8%  224,674 12%  (73,589) -33%  167,418 9%
Total deposits  $ 1,872,090 100%  $ 1,933,994 100%  $ (61,904) -3%  $ 1,866,638 100%
                 
Average rate on total deposits 0.09%   0.31%    (0.22)   0.12%  
                 
Average borrowings and subordinated debentures  $ 178,241    $ 219,599    $ (41,358) -19%  $ 171,505  
                 
Rate on borrowings and subordinated debentures 1.44%   3.04%    (1.60)   1.46%  
 

Second quarter 2012 average total checking balances of $996 million grew $52 million or 6% from second quarter 2011 and represented 53% of the Company's average total deposits in the quarter. The lower market interest rates and continuing shift in the mix of deposit balances from time deposits to non-time deposits over the past year reduced the average rate paid on total deposits to 9 basis points in the most recent quarter, a decline of 22 basis points from the corresponding quarter in 2011 and a decline of 3 basis points for sequential quarters.

Capital Position

As shown in Table 5 below, the Company improved its June 30, 2012, capital position compared to June 30, 2011. This was primarily due to continued profitability.

On June 27, 2012, the Written Agreement between the Federal Reserve Bank of San Francisco, the State of Oregon, Division of Finance and Corporate Securities ("DFCS"), and the Company was terminated. This agreement precluded Bancorp from paying cash dividends to shareholders as well as requiring Bancorp to maintain risk-based capital ratios in excess of that required for well capitalized status. The Memorandum of Understanding between the Federal Deposit Insurance Corporation ("FDIC"), DFCS and West Coast Bank remains in place and restricts payments of dividends from the Bank to Bancorp.

 
Table 5          
CAPITAL RATIOS
           
  June 30, June 30,   March 31,  
  2012 2011 Change 2012  Change
West Coast Bancorp          
Tier 1 risk-based capital ratio 20.33% 17.99%  2.34 20.36%  (0.03)
Total risk-based capital ratio 21.50% 19.25%  2.25 21.53%  (0.03)
Leverage ratio 15.55% 13.55%   2.00 15.41%  0.14
           
West Coast Bank          
Tier 1 risk-based capital ratio 19.62% 17.30%  2.32 19.62%  -- 
Total risk-based capital ratio 20.88% 18.56%   2.32 20.88%  -- 
Leverage ratio 15.02% 13.04%  1.98 14.85%  0.17
 

Operating Results

As shown in Table 6 below, pre-tax income in the second quarter of 2012 was $9.3 million, an increase of $5.6 million or 155% from the corresponding quarter in 2011, and a $.4 million or 4% improvement from the first quarter of 2012. The improvement was principally the result of declines in the provision for credit losses and total noninterest expense. Net income of $6.0 million in the second quarter of 2012 increased $1.4 million or 30% from the corresponding quarter last year, and $.2 million or 4% from the first quarter of 2012.

 
Table 6              
SUMMARY INCOME STATEMENT
(Dollars in thousands) Q2 Q2 Change Q1 Change
  2012 2011 $ % 2012 $ %
               
Net interest income  $ 21,773  $ 21,961  $ (188) -1%  $ 22,133  $ (360) -2%
Provision (benefit) for credit losses  (492)  3,426  (3,918) -114%  89  (581) -653%
Noninterest income  8,494  8,070  424 5%  7,887  607 8%
Noninterest expense  21,476  22,958  (1,482) -6%  21,025  451 2%
Income before income taxes  9,283  3,647  5,636 155%  8,906  377 4%
Provision (benefit) for income taxes  3,249  (987)  4,236 429%  3,117  132 4%
Net income  $ 6,034  $ 4,634  $ 1,400 30%  $ 5,789  $ 245 4%
 

Second quarter 2012 net interest income of $21.8 million declined $.2 million from the same quarter in 2011. This was primarily a result of lower average earning asset balances and a declining yield on those earning assets more than offsetting the lower cost of FHLB borrowings and interest-bearing deposits. The second quarter 2012 net interest margin of 3.93% increased 8 basis points from the corresponding quarter last year largely due to lower volume and cost of interest-bearing liabilities. For the sequential quarters, the net interest margin contracted 11 basis points mainly as a result of declining yield on the loan portfolio.

 
Table 7          
NET INTEREST SPREAD AND MARGIN
(Annualized, tax-equivalent basis) Q2 Q2   Q1  
  2012 2011 Change 2012 Change
Yield on average interest-earning assets 4.12% 4.39%  (0.27) 4.25%   (0.13)
Rate on average interest-bearing liabilities 0.30% 0.80%  (0.50) 0.33%  (0.03)
Net interest spread 3.82% 3.59%  0.23 3.92%  (0.10)
Net interest margin 3.93% 3.85%  0.08 4.04%  (0.11)
 

As shown in Table 8 below, second quarter 2012 total noninterest income of $8.5 million increased $.4 million or 5% from the same quarter in 2011. The increase can be attributed to a rise in sales of Small Business Administration and residential mortgage loans, along with an increase in trust and investment services revenues. These increases were partly offset by a $.4 million or 10% decline in deposit service charges. Total noninterest income increased 8% or $.6 million from the first quarter of 2012, in large part due to growth in deposit service charges, which increased $.4 million or 14% as a result of repricing actions taken in the second quarter.

The total net loss on OREO of $1.0 million in the quarter ended June 30, 2012, increased slightly from a $.9 million net loss in the same quarter of 2011, and from $.6 million on a linked-quarter basis. Excluding the total net loss on OREO, the Company's second quarter noninterest income grew both on a year-over-year and sequential quarter basis.

 
Table 8              
NONINTEREST INCOME
(Dollars in thousands) Q2 Q2 Change Q1 Change
  2012 2011 $ % 2012 $ %
Noninterest income              
Service charges on deposit accounts  $ 3,212  $ 3,575  $ (363) -10%  $ 2,818  $ 394 14%
Payment systems-related revenue  3,084  3,169  (85) -3%  3,073  11 0%
Trust and investment services revenues  1,457  1,208  249 21%  935  522 56%
Gains on sales of loans  722  300  422 141%  735  (13) -2%
Gains on sales of securities   228  130  98 75%  147  81 55%
Other-than-temporary impairment losses  --   (179)  179 0%   (49)  49 0%
Other   821  777  44 6%  802  19 2%
Total  9,524  8,980  544 6%   8,461  1,063 13%
               
OREO gains (losses) on sale  183  645  (462) -72%  (53)  236 445%
OREO valuation adjustments   (1,213)  (1,555)  342 22%  (521)  (692) -133%
Total net loss on OREO  (1,030)  (910)  (120) -13%   (574)  (456) -79%
               
Total noninterest income  $ 8,494  $ 8,070  $ 424 5%  $ 7,887  $ 607 8%
 

As shown in Table 9 below, the Company's total noninterest expense of $21.5 million in the second quarter of 2012 declined by $1.5 million or 6% from the same quarter in 2011. The efficiency ratio declined to 70.9% from 76.1% during the same periods. As a result of cost savings initiatives and product changes implemented over the past year, marketing, payment system, occupancy and other noninterest expense declined. Comparing the second quarter of 2012 to the corresponding quarter in 2011, lower salary expenses were offset by higher employee benefit costs. The year-over-year second quarter reduction in marketing expense of $.6 million was related to the Company's introduction of a new consumer deposit product marketing strategy in 2012. Additionally, the other noninterest expense category declined $.5 million in the most recent quarter of 2012 compared to the same period a year ago, with $.2 million of the decline resulting from a lower FDIC deposit insurance premium assessment. The increase in total noninterest expense in the second quarter of 2012 compared to the first quarter of 2012 was primarily attributable to the increase in employee benefit costs.

 
Table 9              
NONINTEREST EXPENSE
(Dollars in thousands) Q2 Q2 Change Q1 Change
  2012 2011 $ % 2012 $ %
 Noninterest expense              
 Salaries and employee benefits  $ 12,081  $ 12,119  $ (38) 0%  $ 11,478  $ 603 5%
 Equipment  1,584  1,564  20 1%  1,662  (78) -5%
 Occupancy  2,119  2,232  (113) -5%  2,075  44 2%
 Payment systems-related expense  1,075  1,350  (275) -20%  1,119  (44) -4%
 Professional fees  1,060  976  84 9%  1,111  (51) -5%
 Postage, printing and office supplies   729  862  (133) -15%  819  (90) -11%
 Marketing  255  831  (576) -69%  312  (57) -18%
 Communications  419  389  30 8%  380  39 10%
 Other noninterest expense  2,154  2,635   (481) -18%  2,069  85 4%
 Total noninterest expense  $ 21,476  $ 22,958  $ (1,482) -6%  $ 21,025  $ 451 2%
 

Income Taxes

Second quarter 2012 provision for income taxes was $3.2 million compared to a benefit for income taxes of $1.0 million in the same quarter of 2011. The second quarter 2012 provision for income taxes is the result of an effective tax rate of 35% on pre-tax income. The provision for taxes in the second quarter last year reflected the impact of the Company's deferred tax asset valuation allowance maintained at that time, which was subsequently fully reversed in the fourth quarter of 2011.

Credit Quality

The Company recorded a benefit for credit losses of $.5 million in the second quarter of 2012, a significant improvement compared to a provision for credit losses of $3.4 million in the second quarter of 2011 and $.1 million in the previous quarter of 2012. Second quarter 2012 net charge-offs of $.2 million, or .07% of average loans on an annualized basis, declined from 1.22% in the corresponding quarter in 2011 and .39% on a linked-quarter basis. The net charge off and benefit for credit losses in the second quarter of 2012 were heavily influenced by a recovery of $1.1 million related to a commercial real estate loan. As shown in the table below, net charge-offs declined in every loan category from the second quarter last year.

 
Table 10            
ALLOWANCE FOR CREDIT LOSSES AND NET CHARGEOFFS
    Charge-offs as   Charge-offs as   Charge-offs as
    a % of average   a % of average   a % of average
(Dollars in thousands) Q2 loan balance Q2 loan balance Q1 loan balance
  2012 annualized 2011 annualized 2012 annualized
Allowance for credit losses, beginning of period  $ 34,634    $ 40,429    $ 35,983  
Total provision (benefit) for credit losses  (492)    3,426    89  
Loan net charge-offs:            
Commercial  223 0.32%  321 0.43%  (5) -0.01%
Commercial real estate construction  --  0.00%  648 13.66%  --  0.00%
Residential real estate construction  (29) -1.03%  213 4.96%  1 0.03%
Total real estate construction  (29) -0.34%  861 9.53%  1 0.01%
Mortgage  92 0.59%  222 1.21%  534 3.28%
Home equity   336 0.54%  2,291 3.45%  542 0.86%
Total real estate mortgage  428 0.55%  2,513 2.97%  1,076 1.36%
Commercial real estate  (580) -0.28%   561 0.27%  41 0.02%
Installment and consumer  57 1.79%  185 5.22%  165 5.08%
Overdraft  143 0.00%  183 0.00%  160 0.00%
Total loan net charge-offs  242 0.07%  4,624 1.22%  1,438 0.39%
             
Total allowance for credit losses  $ 33,900    $ 39,231    $ 34,634  
Components of allowance for credit losses:            
Allowance for loan losses  $ 33,132    $ 38,422    $ 33,854  
Reserve for unfunded commitments  768    809    780  
Total allowance for credit losses  $ 33,900    $ 39,231    $ 34,634  
             
Net loan charge-offs to average loans (annualized) 0.07%   1.22%   0.39%  
Allowance for loan losses to total loans 2.22%   2.53%   2.30%  
Allowance for credit losses to total loans 2.27%   2.58%   2.35%  
Allowance for loan losses to nonperforming loans 99%   76%   80%  
Allowance for credit losses to nonperforming loans 101%   78%   82%  
 

The allowance for credit losses was $33.9 million or 2.27% of total loans at June 30, 2012, compared to an allowance for credit losses of $39.2 million or 2.58% of total loans a year earlier and $34.6 million or 2.35% of total loans at March 31, 2012. The decline in the allowance for credit losses and the allowance relative to total loans reflected the improving trend in the overall risk profile of the loan portfolio. Other factors that reduced reserve requirements and the allowance for credit losses year-over-year included lower loan balances and adjustments made to the reserve percentages. The allowance for credit losses relative to nonperforming loans increased from 78% a year ago to 101% at June 30, 2012. The Company's estimate of an appropriate allowance for credit losses will continue to be closely related to the loan portfolio's credit quality performance trends and the region's economic conditions.

Total nonperforming assets at June 30, 2012, were $59.3 million or 2.46% of total assets, and represented a 31% reduction from $86.0 million or 3.49% of total assets a year ago, and a decline of 15% from $69.7 million or 2.89% as of March 31, 2012.

Over the past twelve months, total nonaccrual loans declined $17.1 million or 34% to $33.6 million at June 30, 2012, with declines in all loan categories.

 
Table 11          
NONPERFORMING ASSETS
(Dollars in thousands) June 30, Mar. 31, Dec. 31, Sept. 30, June 30,
  2012 2012 2011 2011 2011
Loans on nonaccrual status:          
Commercial  $ 6,199  $ 6,482  $ 7,750  $ 9,987  $ 9,280
Real estate construction:          
Commercial real estate construction   3,750  3,749  3,750  3,886  4,357
Residential real estate construction  1,936  1,981  2,073  3,311   3,439
Total real estate construction  5,686  5,730  5,823  7,197  7,796
Real estate mortgage:          
Mortgage  7,044   10,744  9,624  10,877  11,527
Home equity  2,239  2,528  2,325  3,285  2,755
Total real estate mortgage   9,283  13,272  11,949  14,162  14,282
Commercial real estate  12,384  16,648  15,070  21,513  19,263
Installment and consumer  --   1  5  6  1
Total nonaccrual loans  33,552  42,133  40,597   52,865  50,622
90 days past due not on nonaccrual  --   --   --   --   -- 
Total nonperforming loans   33,552  42,133  40,597  52,865  50,622
           
Other real estate owned  25,726  27,525  30,823  30,234  35,374
Total nonperforming assets  $ 59,278  $ 69,658  $ 71,420  $ 83,099  $ 85,996
           
Nonperforming loans to total loans 2.24% 2.86% 2.70% 3.52% 3.33%
Nonperforming assets to total assets 2.46% 2.89% 2.94% 3.30% 3.49%
           
Total delinquent loans 30-89 days past due  $ 3,422  $ 4,095  $ 4,273  $ 5,556  $ 9,961
Delinquent loans to total loans 0.23% 0.28% 0.28% 0.37% 0.65%
 

As indicated in Table 12 below, during the most recent quarter the Company disposed of 30 OREO properties with a book value of $3.9 million while acquiring 28 properties with a book value of $3.3 million and recording OREO valuation adjustments totaling $1.2 million. The combination of these transactions resulted in a $1.8 million or 7% net reduction in total OREO during the second quarter of 2012 to $25.7 million at June 30, 2012. The OREO balance reflected write-downs of 55% from original loan principal. The largest balance in the OREO portfolio at June 30, 2012, was in the income-producing properties category followed by homes and land, all of which are located within the Company's footprint.

 
Table 12            
OTHER REAL ESTATE OWNED ACTIVITY
(Dollars in thousands) Q2 2012   Q2 2011   Q1 2012  
  Amount  # Amount  # Amount  #
Beginning balance  $ 27,525  246  $ 39,329   399  $ 30,823  264
Additions to OREO  3,304  28  4,270  18  810  9
Dispositions of OREO  (3,890)  (30)  (6,670)  (51)  (3,587)  (27)
OREO valuation adjustment  (1,213)  --    (1,555)  --   (521)  -- 
Ending balance  $ 25,726  244  $ 35,374  366  $ 27,525  246
 
 
Table 13            
OTHER REAL ESTATE OWNED BY PROPERTY TYPE
(Dollars in thousands) June 30, # of June 30, # of Mar. 31, # of
  2012 properties 2011 properties 2012 properties
Income-producing properties  $ 8,106  13  $ 9,237  14  $ 9,352  15
Homes  5,539  20  10,108  43  5,228  16
Land  4,780  15  4,052   11  4,710  14
Residential site developments  3,104  126  5,912  215  3,367  136
Lots  1,999  42  3,126  52  2,453  49
Multifamily  1,570  20   673  11  408  4
Condominiums  325  2  1,900  14  1,641  6
Commercial site developments  303  6  366  6  366  6
Total  $ 25,726  244  $ 35,374  366  $ 27,525  246
 

Other

The Company will hold a Webcast conference call Monday, July 23, 2012, at 1:00 p.m. Pacific Time, during which the Company will discuss second quarter 2012 results and current activities. To access the conference call via a live Webcast, go to www.wcb.com and click on Investor Relations and the "2nd Quarter 2012 Earnings Conference Call" tab. The conference call may also be accessed by dialing (866) 394-3464, Conference ID#: 92767115 a few minutes prior to 1:00 p.m. Pacific Time. The call will be available for replay by accessing the Company's website at www.wcb.com and following the same instructions.

West Coast Bancorp is a publicly held, Northwest bank holding company headquartered in Oregon with $2.4 billion in assets, and the parent company of West Coast Bank and West Coast Trust Company, Inc. West Coast Bank operates 58 branches in Oregon and Washington. The Company serves clients who seek the resources, sophisticated products and expertise of larger financial institutions, along with the local decision-making, market knowledge, and customer service orientation of a community bank. The Company offers a broad range of banking, investment, fiduciary and trust services.  For more information, please visit the Company web site at www.wcb.com.

The West Coast Bancorp logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=13726

Forward Looking Statements

Statements in this release regarding future events, performance or results are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA") and are made pursuant to the safe harbors of the PSLRA. These statements can often be identified by words such as "expects," "believes," "projects," "anticipates," or "will," or other words of similar meaning, and specifically include in this release all statements regarding the expected future benefits of our ongoing cost-cutting initiatives. Actual results could be quite different from those expressed or implied by the forward-looking statements, which give our current expectations about the future and are not guarantees. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them to reflect changes that occur after that date.

A number of factors could cause results to differ significantly from our expectations, including, among others, the effects of (i) market conditions in our service areas on our efforts to continue to reduce our levels of nonperforming assets and increase loan originations, (ii) cost reduction initiatives, and (iii) risk factors identified in our Annual Report on Form 10-K for the year ended December 31, 2011, including under the heading "Forward Looking Statement Disclosure" and in the section "Risk Factors".

 
Table 14              
INCOME STATEMENT
(Dollars and shares in thousands) Q2 Q2 Change Q1 Year to date
  2012 2011 $ % 2012 2012 2011
Net interest income              
Interest and fees on loans  $ 18,699  $ 20,231  $ (1,532) -8%  $ 19,209  $ 37,908  $ 40,530
Interest on investment securities  4,110  4,811  (701) -15%  4,099  8,209  9,359
Other interest income   32  62  (30) -48%  25  57  133
Total interest income  22,841  25,104  (2,263) -9%  23,333   46,174  50,022
Interest expense on deposit accounts  431  1,476  (1,045) -71%  577  1,008  3,285
Interest on borrowings and subordinated deb.  637  1,667  (1,030) -62%  623  1,260  3,264
Total interest expense  1,068  3,143  (2,075) -66%  1,200  2,268  6,549
Net interest income  21,773  21,961  (188) -1%  22,133  43,906  43,473
               
Provision (benefit) for credit losses  (492)  3,426  (3,918) -114%  89  (403)  5,502
               
Noninterest income              
Service charges on deposit accounts  3,212  3,575  (363) -10%  2,818  6,030  7,219
Payment systems related revenue  3,084  3,169  (85) -3%  3,073  6,157  6,099
Trust and investment services revenues  1,457  1,208  249 21%  935  2,392  2,356
Gains on sales of loans  722  300  422 141%  735  1,457  813
Net OREO valuation adjustments and gains (losses) on sales  (1,030)  (910)  (120) -13%  (574)  (1,604)  (1,244)
Other-than-temporary impairment losses  --   (179)  179  --   (49)  (49)  (179)
Gain on sales of securities  228  130  98 75%  147  375  397
Other   821  777  44 6%  802  1,623  1,525
Total noninterest income  8,494  8,070  424 5%  7,887  16,381  16,986
Noninterest expense              
Salaries and employee benefits  12,081  12,119  (38) 0%  11,478  23,559  23,996
Equipment  1,584  1,564  20 1%   1,662  3,246  3,092
Occupancy  2,119  2,232  (113) -5%  2,075  4,194  4,397
Payment systems related expense  1,075  1,350  (275) -20%  1,119  2,194  2,597
Professional fees  1,060  976   84 9%  1,111  2,171  1,958
Postage, printing and office supplies  729  862  (133) -15%  819  1,548   1,672
Marketing  255  831  (576) -69%  312  567  1,482
Communications  419  389   30 8%  380  799  767
Other noninterest expense  2,154  2,635  (481) -18%  2,069  4,223  5,550
Total noninterest expense  21,476  22,958  (1,482) -6%  21,025  42,501  45,511
Income before income taxes  9,283  3,647   5,636 155%  8,906  18,189  9,446
Provision (benefit) for income taxes  3,249  (987)  4,236 429%  3,117  6,366   (293)
Net income  $ 6,034  $ 4,634  $ 1,400 30%  $ 5,789  $ 11,823  $ 9,739
               
Net income per share:              
Basic  $  0.29  $ 0.23  $ 0.06    $ 0.28  $ 0.58  $ 0.48
Diluted  $ 0.28  $ 0.22  $ 0.06    $ 0.27  $ 0.55  $ 0.45
               
Weighted average common shares  19,082  19,006  76    19,038  19,060  18,983
Weighted average diluted shares   20,256  20,025  231    20,054  20,161  19,982
               
Tax equivalent net interest income  $ 22,046  $ 22,249  $ (203)    $ 22,398  $ 44,444  $ 44,019
 
 
 
Table 15          
BALANCE SHEETS
(Dollars in thousands) June 30, June 30, Change Mar. 31,
  2012 2011 $ % 2012
Assets:          
Cash and due from banks  $ 55,332  $ 54,296  $ 1,036 2%  $ 59,146
Federal funds sold  2,740   2,367  373 16%  1,803
Interest-bearing deposits in other banks  52,815  33,583  19,232 57%  108,735
Total cash and cash equivalents  110,887  90,246  20,641 23%  169,684
Investment securities  708,884  760,704  (51,820) -7%  670,534
Loans  1,495,797  1,521,147  (25,350) -2%  1,470,848
Allowance for loan losses  (33,132)  (38,422)   5,290 14%  (33,854)
Loans, net  1,462,665  1,482,725  (20,060) -1%  1,436,994
Total interest earning assets  2,261,029  2,319,332  (58,303) -3%  2,254,019
OREO, net  25,726  35,374  (9,648) -27%  27,525
Other assets  100,277   93,507  6,770 7%  104,550
Total assets  $ 2,408,439  $ 2,462,556  $ (54,117) -2%  $ 2,409,287
           
Liabilities and Stockholders' Equity:          
Demand  $ 648,819  $ 599,020  $ 49,799 8%  $ 620,015
Savings and interest-bearing demand  497,135  465,779  31,356 7%  503,829
Money market  585,421  658,185  (72,764) -11%  614,831
Time deposits  145,510   208,013  (62,503) -30%  155,830
Total deposits  1,876,885  1,930,997  (54,112) -3%  1,894,505
Borrowings and subordinated debentures   178,900  219,599  (40,699) -19%  171,000
Reserve for unfunded commitments  768  809  (41) -5%   780
Other liabilities  23,869  25,582  (1,713) -7%  22,020
Total liabilities  2,080,422  2,176,987  (96,565) -4%  2,088,305
Stockholders' equity  328,017  285,569  42,448 15%  320,982
Total liabilities and stockholders' equity  $ 2,408,439  $ 2,462,556  $ (54,117) -2%  $ 2,409,287
 
 
 
Table 16                
PERIOD END LOANS
(Dollars in thousands) June 30, % of June 30, % of Change Mar. 31, % of
  2012 Total 2011 total Amount % 2012 Total
Commercial loans  $ 292,643 19%  $ 297,817 20%  $ (5,174) -2%  $ 278,195 19%
Commercial real estate construction  33,477 2%  17,024 1%  16,453 97%  19,839 1%
Residential real estate construction  10,549 1%   15,410 1%  (4,861) -32%  12,082 1%
Total real estate construction loans  44,026 3%  32,434 2%  11,592 36%  31,921 2%
Mortgage   59,970 4%  72,708 5%  (12,738) -18%  65,063 5%
Home equity  248,921 17%  264,016 17%  (15,095) -6%  252,990 17%
Total real estate mortgage  308,891 21%  336,724 22%  (27,833) -8%  318,053 22%
Commercial real estate loans  837,415 56%  839,665 55%   (2,250) 0%  830,053 56%
Installment and other consumer loans  12,822 1%  14,507 1%  (1,685) -12%  12,626 1%
Total loans  $ 1,495,797    $ 1,521,147    $ (25,350) -2%  $ 1,470,848  
 
 
 
Table 17          
 AVERAGE BALANCE SHEETS
(Dollars in thousands) Q2 Q2 Q1 Year to date
  2012 2011 2012 2012 2011
Cash and due from banks  $  51,903  $ 52,273  $ 50,017  $ 50,960  $ 50,495
Federal funds sold  2,555  4,790  2,601  2,578   4,371
Interest-bearing deposits in other banks  45,260  93,225  35,334  40,297  99,972
Total cash and cash equivalents  99,718   150,288  87,952  93,835  154,838
Investment securities  726,853  698,116  710,000  718,426  685,850
Total loans  1,479,226  1,523,170  1,482,522  1,480,874  1,526,213
Allowance for loan losses  (33,699)  (38,944)  (35,249)  (34,474)  (39,616)
Loans, net  1,445,527  1,484,226  1,447,273  1,446,400  1,486,597
Total interest earning assets  2,254,192  2,319,980   2,232,288  2,243,240  2,317,311
Other assets  123,179  127,895  132,951  127,984  128,438
Total assets  $ 2,395,277  $ 2,460,525  $ 2,378,176  $ 2,386,645  $ 2,455,723
           
Demand  $ 621,547  $ 578,562  $ 585,749  $ 603,647  $ 565,468
Savings and interest-bearing demand  502,509  476,090  490,361  496,436  463,316
Money market  596,949  654,668  623,111   610,030  657,653
Time deposits  151,085  224,674  167,417  159,251  246,733
Total deposits  1,872,090  1,933,994   1,866,638  1,869,364  1,933,170
Borrowings and subordinated debentures  178,241  219,599  171,505  174,873  219,599
Total interest bearing liabilities  1,428,784  1,575,031  1,452,394  1,440,590  1,587,301
Other liabilities  21,550  24,331  22,782   22,085  24,656
Stockholders' equity  323,396  282,601  317,251  320,323  278,298
Total liabilities and stockholders' equity  $  2,395,277  $ 2,460,525  $ 2,378,176  $ 2,386,645  $ 2,455,723
 

            

Coordonnées