WEST COAST BANCORP /NEW/OR/ - 10-Q Quarterly Report

[X] Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, No Par Value
(Title of Class)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes [X] No [ ]

The number of shares of Registrant’s Common Stock outstanding on October 31, 2003 was 15,141,669.


Item 1.	Financial Statements (unaudited)		Page

		Consolidated Balance Sheets - September 30, 2003 and December 31, 2002		3
		Consolidated Statements of Income - Three and nine months ended September 30, 2003 and 2002		4
		Consolidated Statements of Cash Flows - Nine months ended September 30, 2003 and 2002		5
		Consolidated Statements of Changes in Stockholders’ Equity - Nine months ended September 30, 2003 and year ended December 31, 2002		6
		Notes to Consolidated Financial Statements		7
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		28
Item 4.		Controls and Procedures		28
PART II. Other Information
Item 1.		Legal Proceedings		28
Item 6.		Exhibits and Reports on Form 8-K		28
Signatures				29


				September 30,			December 31,
(Dollars and shares in thousands)				2003			2002

ASSETS:
Cash and cash equivalents:
		Cash and due from banks		$	43,597		$	55,026
		Interest-bearing deposits in other banks			25,569			2,316
		Federal funds sold			52,616			391

			Total cash and cash equivalents		121,782			57,733
Trading assets					915			967
Investment securities available for sale, at fair value (amortized cost: $287,149 and $257,954)					291,638			266,407
Loans held for sale					3,542			10,924
Loans					1,199,434			1,159,915
Allowance for loan losses					(18,049	)		(16,838	)

			Loans, net		1,181,385			1,143,077
Premises and equipment, net					27,113			26,609
Intangible assets, net					953			1,218
Bank owned life insurance					18,289			1,757
Other assets					23,426			23,635

			Total assets	$	1,669,043		$	1,532,327

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
		Demand		$	336,135		$	275,724
		Savings and interest-bearing demand			702,164			619,502
		Certificates of deposit			366,624			371,227

			Total deposits		1,404,923			1,266,453
Short-term borrowings					5,075			9,902
Long-term borrowings					83,000			98,000
Mandatorily redeemable trust preferred securities					20,000			12,500
Other liabilities					18,588			12,085

			Total liabilities		1,531,586			1,398,940
Commitments and contingent liabilities (note 8)

STOCKHOLDERS’ EQUITY:
Preferred stock: no par value, none issued; 10,000,000 shares authorized					—			—
Common stock: no par value, 55,000,000 shares authorized; 15,146 and 15,326 shares issued and outstanding, respectively					18,933			19,158
Additional paid-in capital					68,512			72,279
Retained earnings					49,169			38,047
Unearned compensation					(1,347	)		(671	)
Accumulated other comprehensive income					2,190			4,574

	Total stockholders’ equity				137,457			133,387

			Total liabilities and stockholders’ equity	$	1,669,043		$	1,532,327


(Dollars and shares in thousands			Three months ended September 30,				Nine months ended September 30,
except per share data)			2003		2002		2003		2002

INTEREST INCOME:
Interest and fees on loans			$	19,219	$	21,628	$	58,406	$	62,663
Interest on taxable investment securities				2,076		2,286		6,269		6,922
Interest on nontaxable investment securities				813		880		2,463		2,672
Interest on deposits in other banks				40		26		52		60
Interest on federal funds sold				61		62		90		83

		Total interest income		22,209		24,882		67,280		72,400
INTEREST EXPENSE:
Savings and interest-bearing demand				1,055		1,815		3,548		5,544
Certificates of deposit				2,584		3,445		8,284		11,051
Short-term borrowings				16		64		262		265
Long-term borrowings				932		1,906		3,106		4,754
Mandatorily redeemable trust preferred securities				287		274		812		503

	Total interest expense			4,874		7,504		16,012		22,117

NET INTEREST INCOME				17,335		17,378		51,268		50,283
Provision for loan losses				875		1,467		2,575		3,787

Net interest income after provision for loan losses				16,460		15,911		48,693		46,496
NONINTEREST INCOME:
Service charges on deposit accounts				1,740		1,563		5,189		4,675
Other service charges, commissions and fees				1,749		1,300		4,853		3,841
Trust revenue				439		394		1,299		1,301
Gain on sales of loans				1,533		899		4,246		2,971
Bank owned life insurance				226		—		532		—
Gain on sales of securities				—		—		192		—
Other				107		108		305		1,201

		Total noninterest income		5,794		4,264		16,616		13,989
NONINTEREST EXPENSE:
Salaries and employee benefits				8,318		7,421		24,211		22,136
Equipment				1,263		1,337		3,724		3,834
Occupancy				1,261		1,135		3,616		3,445
Check and other transaction processing				746		643		2,138		1,906
Professional fees				587		491		1,729		1,276
Courier and postage				503		501		1,531		1,463
Marketing				510		535		1,478		1,424
Other loan expense				423		169		1,310		862
Communications				291		297		888		891
Other taxes and insurance				185		189		547		571
Printing and office supplies				153		160		489		521
Other noninterest expense				607		305		1,697		1,905

	Total noninterest expense			14,847		13,183		43,358		40,234

INCOME BEFORE INCOME TAXES				7,407		6,992		21,951		20,251
PROVISION FOR INCOME TAXES				2,362		2,339		7,188		6,831

NET INCOME			$	5,045	$	4,653	$	14,763	$	13,420

	Basic earnings per share		$	0.33	$	0.30	$	0.98	$	0.86
	Diluted earnings per share		$	0.32	$	0.29	$	0.94	$	0.83
	Weighted average common shares			15,066		15,493		15,096		15,663
	Weighted average diluted shares			15,705		16,017		15,641		16,154


				Nine months ended
				September 30,

(Dollars in thousands)				2003			2002

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income				$	14,763		$	13,420
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of premises and equipment					2,097			2,486
Deferred income tax benefit					(357	)		(66	)
Write-down of premises and equipment					—			613
Amortization of intangibles					265			269
Provision for loan losses					2,575			3,787
Increase in interest receivable					(372	)		(170	)
Decrease in other assets					938			2,155
Gain on sale of available for sale securities					(192	)		—
Gain on sales of loans					4,246			2,971
Origination of loans held for sale					(60,232	)		(45,836	)
Proceeds from sales of loans held for sale					63,369			46,091
Decrease in interest payable					(228	)		(74	)
Increase in other liabilities					6,731			3,888
Increase in cash surrender value of bank owned life insurance					(532	)		—
Stock based compensation expense					506			406
Tax benefit associated with stock options					644			260
Decrease in trading assets					52			109

			Net cash provided by operating activities		34,273			30,309
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of available for sale securities					87,040			44,120
Proceeds from sales of available for sale securities					4,158			—
Purchase of available for sale securities					(118,621	)		(59,915	)
Purchase of bank owned life insurance					(16,000	)		—
Loans made to customers greater than principal collected on loans					(40,884	)		(55,867	)
Net capital expenditures					(2,601	)		(1,425	)

			Net cash used in investing activities		(86,908	)		(73,087	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in demand, savings and interest bearing transaction accounts					143,073			82,948
Net increase (decrease) in certificates of deposit					(4,603	)		28,340
Proceeds from issuance of trust preferred securities					7,500			7,500
Proceeds from issuance of long-term borrowings					—			50,000
Repayment of long-term borrowings					(15,000	)		(47,500	)
Net decrease in short-term borrowings					(4,827	)		(16,786	)
Redemption and repurchase of common stock					(7,714	)		(9,971	)
Net proceeds from issuance of common stock					1,896			850
Dividends paid and cash paid for fractional shares					(3,641	)		(3,506	)

			Net cash provided by financing activities		116,684			91,875

NET INCREASE IN CASH AND CASH EQUIVALENTS					64,049			49,097
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD					57,733			52,961

CASH AND CASH EQUIVALENTS AT END OF PERIOD				$	121,782		$	102,058

Supplemental cash flow information:
	Cash paid in the period for:
		Interest		$	16,240		$	22,191
		Income taxes		$	6,950		$	1,627

WEST COAST BANCORP
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)


Oregon (State or other jurisdiction of incorporation or organization)		93-0810577 (I.R.S. Employer Identification No.)

5335 Meadows Road — Suite 201 Lake Oswego, Oregon (Address of principal executive offices)		97035 (Zip Code)


PART I. Financial Information
	Item 1. Financial Statements
		CONSOLIDATED BALANCE SHEETS
		CONSOLIDATED STATEMENTS OF INCOME
		CONSOLIDATED STATEMENTS OF CASH FLOWS
		CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
	Item 4. Controls and Procedures
PART II. Other Information
	Item 1. Legal Proceedings.
Signatures
EXHIBT 31.1
EXHIBT 31.2
EXHIBT 32

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