WEST COAST BANCORP /NEW/OR/ - FORM 8-K - EX-99.1 - PRESS RELEASE

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8-K - CURRENT REPORT - WEST COAST BANCORP /NEW/OR/	v230176_8k.htm

Exhibit 99.1

For more information, contact

Robert D. Sznewajs

President & CEO

(503) 598-3243

Anders Giltvedt

Executive Vice President & CFO

(503) 598-3250

West Coast Bancorp Net Income of $4.6 Million in Second Quarter 2011 – a Significant Increase From Same Quarter in 2010

·	Second quarter 2011 net income increased by $8.4 million over the same quarter a year ago while year-to-date net income increased by $14.4 million over the same period in 2010.

·	Return on average assets, annualized, was .76% in the second quarter and .80% year-to-date 2011, compared to net losses for the same periods in 2010.

·	Nonperforming assets of $86.0 million, or 3.5% of total assets at June 30, 2011, continued their decline from prior periods

Lake Oswego, OR – July 29, 2011 – West Coast Bancorp (NASDAQ: WCBO) (“Bancorp” or “Company”), the parent company of West Coast Bank (“Bank”) and West Coast Trust Company, Inc., today announced net income of $4.6 million or $.22 per diluted share for the second quarter of 2011 compared to a net loss for the second quarter of 2010 of $3.8 million or $.20 per diluted share. The Company also reported an annualized return on average assets of .76% in the most recent quarter.

Net income for the first six months of 2011 was $9.7 million or $.45 per diluted share compared to a net loss of $4.7 million or $.30 per diluted share in the same period of 2010.

“The net income of $9.7 million for the first half of 2011, representing an annualized return on average assets of .80% compared to a net loss of $ 4.7 million for the same period in 2010, is indicative of the significant improvement of the operating results of the Company from the same period a year ago,” said Robert D. Sznewajs, President and Chief Executive Officer. “While the economic environment continues to be very difficult, growth in new loan originations is beginning to stabilize total average loan balances outstanding.”

WEST COAST BANCORP REPORTS SECOND QUARTER 2011 RESULTS

July 29, 2011

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Table 1 below shows summary financial information for the quarters ended June 30, 2011 and 2010, and year to date ended June 30, 2011 and 2010.

Table 1
SUMMARY FINANCIAL INFORMATION

	Quarter ended			Quarter ended						Year to date			Year to date
	June 30,			June 30,						June 30,			June 30,
(Dollars and shares in thousands)	2011			2010			Change			2011			2010			Change
Net income (loss)	$	4,634		$	(3,849	)	$	8,483		$	9,739		$	(4,737	)	$	14,476

Selective quarterly performance ratios
Return on average assets, annualized		0.76	%		-0.58	%		1.34			0.80	%		-0.36	%		1.16
Return on average equity, annualized		6.58	%		-5.92	%		12.50			7.06	%		-3.71	%		10.77
Efficiency ratio for the quarter to date		76.05	%		80.83	%		(4.78	)		75.09	%		79.65	%		(4.56	)

Share and Per Share Figures-Actual
Common shares outstanding at period end		19,316			19,284			32			19,316			19,284			32
Weighted average diluted shares		20,025			18,425			1,600			19,982			15,939			4,043
Income (loss) per diluted share	$	0.22		$	(0.20	)	$	0.42		$	0.45		$	(0.30	)	$	0.75
Book value per common share	$	13.69		$	12.77		$	0.92		$	13.69		$	12.77		$	0.92

Please see Table 20 for additional information regarding outstanding shares and the possible dilutive effects of presently outstanding securities.

Balance Sheet Overview

Second quarter 2011 average total loan balances of $1.52 billion declined $122 million or 7% from the same quarter last year. The reduction in loan balances over the past year was centered in residential real estate construction, real estate mortgage, and commercial loan categories. Second quarter average total real estate construction loan balances contracted $43 million or 55% from the same period in 2010 due to current market and economic conditions. At June 30, 2011, total residential real estate construction loans represented $15 million or 1% of total loans compared to 3% a year ago. Also affected by market conditions, the second quarter 2011 average commercial loan and real estate mortgage portfolios contracted $33 million and $27 million, respectively, from the second quarter 2010.

However, average total loan balances were virtually unchanged from the first quarter of 2011. This is attributed to the growing volume of new loan originations in the first half of 2011 and fewer loans moving from nonaccrual status to other real estate owned (“OREO”).

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Table 2
AVERAGE LOANS FOR THE QUARTER
(Dollars in thousands)	June 30,			% of			June 30,			% of			Change						Mar. 31,			% of
	2011			Total			2010			total			Amount			%			2011			Total
Commercial loans	$	301,436			20	%	$	334,889			20	%	$	(33,453	)		-10	%	$	304,704			20	%
Commercial real estate construction		19,029			1	%		23,750			2	%		(4,721	)		-20	%		21,269			1	%
Residential real estate construction		17,223			1	%		55,947			3	%		(38,724	)		-69	%		18,938			1	%
Total real estate construction loans		36,252			2	%		79,697			5	%		(43,445	)		-55	%		40,207			2	%
Mortgage		62,778			4	%		74,855			5	%		(12,077	)		-16	%		64,485			4	%
Nonstandard mortgage		10,525			1	%		14,677			1	%		(4,152	)		-28	%		11,254			1	%
Home equity		266,221			17	%		277,406			17	%		(11,185	)		-4	%		269,473			18	%
Total real estate mortgage		339,524			22	%		366,938			23	%		(27,414	)		-7	%		345,212			23	%
Commercial real estate loans		831,738			55	%		847,192			51	%		(15,454	)		-2	%		823,818			54	%
Installment and other consumer loans		14,220			1	%		16,473			1	%		(2,253	)		-14	%		15,349			1	%
Total loans	$	1,523,170					$	1,645,189					$	(122,019	)		-7	%	$	1,529,290

Yield on loans		5.33	%					5.46	%					(0.13	)					5.38	%

Reflecting the Company’s strong liquidity position, the Company’s combined cash equivalents and investment securities balance was $797 million or 34% of earning assets at June 30, 2011. In an effort to support its net interest income and margin in an environment of declining loan balances, the Company reduced its cash equivalents balance by $88 million while increasing its investment securities portfolio by $117 million during the second quarter of 2011. The U.S. government agency and government guaranteed mortgage-backed securities portfolios expanded by $69 million and $48 million, respectively, during the most recent quarter. The purchases were primarily of U.S. government agency securities with 3 to 5 year maturities and 10 and 15 year fully amortizing U.S. agency mortgage-backed securities, for which we expect to have limited extension risk. The expected duration of the investment portfolio was 3.0 years at June 30, 2011, compared to 1.8 years at June 30, 2010, and 3.1 years at March 31, 2011.

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Table 3
PERIOD END CASH EQUIVALENTS AND INVESTMENT SECURITIES
(Dollars in thousands)	June 30,			% of			June 30,			% of			Change						Mar. 31,			% of
	2011			Total			2010			total			Amount			%			2011			Total
Cash equivalents:
Federal funds sold	$	2,367			0	%	$	13,431			2	%	$	(11,064	)		-82	%	$	1,966			0	%
Interest-bearing deposits in other banks		33,583			4	%		109,781			14	%		(76,198	)		-69	%		122,224			16	%
Total cash equivalents		35,950			4	%		123,212			16	%		(87,262	)		-71	%		124,190			16	%

Investment securities:
U.S. Treasury securities		4,237			1	%		14,688			2	%		(10,451	)		-71	%		4,282			1	%
U.S. Government Agency securities		221,958			28	%		250,848			32	%		(28,890	)		-12	%		153,017			19	%
Corporate securities		9,506			1	%		9,674			1	%		(168	)		-2	%		9,850			1	%
Mortgage-backed securities		454,029			57	%		300,485			39	%		153,544			51	%		405,740			53	%
Obligations of state and political sub.		59,122			7	%		58,564			8	%		558			1	%		59,136			8	%
Equity investments and other securities		11,852			2	%		11,972			2	%		(120	)		-1	%		11,680			2	%
Total investment securities		760,704			96	%		646,231			84	%		114,473			18	%		643,705			84	%

Total cash equivalents and investment securities	$	796,654			100	%	$	769,443			100	%	$	27,211			4	%	$	767,895			100	%

Tax equivalent yield on cash equivalents and investment securities		2.60	%					2.27	%					0.33						2.52	%

Second quarter 2011 average total deposits of $1.93 billion declined 6% or $115 million from the same quarter in 2010. With excess balance sheet liquidity, in large part caused by the year-over-year decline in loan balances, we elected to continue to reduce higher cost time deposit balances. As a result, average time deposit balances declined $207 million or 48% year over year in the second quarter. Time deposits represented a modest 12% of the Company’s average total deposits in the most recent quarter compared to 21% during second quarter 2010.

Table 4
QUARTERLY AVERAGE DEPOSITS BY CATEGORY
(Dollars in thousands)	Q2			% of			Q2			% of			Change						Q1			% of
	2011			Total			2010			Total			Amount			%			2011			Total
Demand deposits	$	578,562			29	%	$	523,298			26	%	$	55,264			11	%	$	552,229			28	%
Interest bearing demand		365,407			19	%		332,850			16	%		32,557			10	%		344,090			18	%
Total checking deposits		943,969			48	%		856,148			42	%		87,821			10	%		896,319			46	%
Savings		110,683			6	%		104,052			5	%		6,631			6	%		106,309			6	%
Money market		654,668			34	%		657,454			32	%		(2,786	)		0	%		660,672			34	%
Total non-time deposits		1,709,320			88	%		1,617,654			79	%		91,666			6	%		1,663,300			86	%
Time deposits		224,674			12	%		431,669			21	%		(206,995	)		-48	%		269,038			14	%
Total deposits	$	1,933,994			100	%	$	2,049,323			100	%	$	(115,329	)		-6	%	$	1,932,338			100	%

Average rate on total deposits		0.31	%					0.64	%					(0.33	)					0.38	%

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Second quarter average checking account balances of $944 million grew $88 million or 10% year-over-year. The continuing shift in the mix of deposit balances from time deposits to non-time deposits together with our deposit pricing strategies, helped reduce the rate paid on total deposits to .31% in the most recent quarter, a decline of 33 basis points from .64% in the second quarter last year and down 7 basis points on a linked quarter basis.

Capital Position

The combination of a return to profitability and a reduction in total assets continued to strengthen the Company’s capital position. As shown in Table 5 below, at June 30, 2011, the Company’s tier 1 and total risk-based capital ratios measured 17.99% and 19.25%, respectively, while its leverage ratio was 13.55%.

Table 5
CAPITAL RATIOS

	June 30,			June 30,					March 31,
	2011			2010			Change		2011			Change
West Coast Bancorp
Tier 1 risk based capital ratio		17.99	%		16.50	%		1.49		17.72	%		0.27
Total risk based capital ratio		19.25	%		17.76	%		1.49		18.98	%		0.27
Leverage ratio		13.55	%		11.90	%		1.65		13.40	%		0.15

West Coast Bank
Tier 1 risk based capital ratio		17.30	%		15.84	%		1.46		17.02	%		0.28
Total risk based capital ratio		18.56	%		17.10	%		1.46		18.28	%		0.28
Leverage ratio		13.04	%		11.43	%		1.61		12.87	%		0.17

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Operating Results Improved from the Second Quarter of 2010

As shown in Table 6 below, second quarter 2011 net income of $4.6 million increased $8.4 million compared to a net loss of $3.8 million in the same quarter of 2010. The year-over-year second quarter improvement in results was primarily reflective of a $4.3 million decline in provision for credit losses, a 3.1 million increase in net interest income, and a benefit for income taxes of $1.0 million compared to a tax provision of $1.7 million in the same quarter last year.

Second quarter 2011 net interest income of $22.0 million increased $3.1 million from the same quarter in 2010, and grew $.8 million or 3% adjusting for the $2.3 million FHLB prepayment expense in second quarter last year. As shown in Table 7 below, the net interest margin of 3.85% in the most recent quarter expanded 74 basis points from 3.11% in the second quarter 2010. Adjusting for the above-mentioned FHLB prepayment penalty, the net interest margin increased 37 basis points over the same period. The growth in both net interest income and net interest margin were attributable to a reduction in interest expense on deposits and borrowings, which more than offset a continued unfavorable earning assets mix shift from loans to investment securities and a reduced value of noninterest-bearing deposits compared to the second quarter 2010.

Table 6
SUMMARY INCOME STATEMENT
(Dollars in thousands)	Q2			Q2			Change						Q1		Change
	2011			2010			$			%			2011		$			%

Net interest income 1	$	21,961		$	18,910		$	3,051			16	%	$	21,512	$	449			2	%
Provision for credit losses		3,426			7,758			(4,332	)		-56	%		2,076		1,350			65	%
Noninterest income		8,070			9,625			(1,555	)		-16	%		8,916		(846	)		-9	%
Noninterest expense		22,958			22,909			49			0	%		22,553		405			2	%
Income (loss) before income taxes		3,647			(2,132	)		5,779			271	%		5,799		(2,152	)		-37	%
Provision (benefit) for income taxes 2		(987	)		1,717			(2,704	)		-157	%		694		(1,681	)		-242	%
Net income (loss)	$	4,634		$	(3,849	)	$	8,483			220	%	$	5,105	$	(471	)		-9	%

1 Second quarter 2010 net interest income includes a $2.3 million expense associated with the prepayment of $99 million in FHLB borrowings.
2 For more information on income taxes see table 10.

Table 7
NET INTEREST SPREAD AND MARGIN
(Annualized, tax-equivalent basis)	Q2		Q2					Q1
	2011		2010		Change			2011		Change
Yield on average interest-earning assets	4.39	%	4.39	%		-		4.41	%		(0.02	)
Rate on average interest-bearing liabilities 1	0.80	%	1.72	%		(0.92	)	0.86	%		(0.06	)
Net interest spread	3.59	%	2.67	%		0.92		3.55	%		0.04
Net interest margin	3.85	%	3.11	%		0.74		3.81	%		0.04

1 Second quarter 2010 rate on average interest-bearing liabilities includes 37 basis points of expense associated with the prepayment of $99 million in FHLB borrowings.

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As shown in Table 8 below, second quarter 2011 total noninterest income of $8.1 million decreased $1.5 million from the same quarter last year. Net loss on OREO was $.9 million in the most recent quarter and up from $.2 million in the second quarter of last year. Excluding the net loss on OREO, the Company’s noninterest income decreased $.9 million or 9%. This decrease was primarily a result of a $.6 million or 15% decline in service charges on deposit accounts, a $.4 million decline in gains on sales of investment securities, and a $.2 million credit related to an other-than-temporary-impairment (“OTTI”) loss on a trust preferred security in the investment portfolio. The year-over-year second quarter decline in deposit service charges was due to phasing in the Federal Deposit Insurance Corporation’s (“FDIC”) new guidance on overdraft programs, which became effective July 1, 2011. The final phase of our initiatives to comply with the new overdraft guidance will be implemented in the third quarter of 2011. Payment systems-related revenues increased $.3 million over the second quarter in 2010 as a result of higher transaction volumes.

Table 8
NONINTEREST INCOME
(Dollars in thousands)		Q2			Q2		Change						Q1		Change
		2011			2010		$			%			2011		$			%
Noninterest income
Service charges on deposit accounts	$	3,575		$	4,213		$	(638	)	-15	%	$	3,644		$	(69	)		-2	%
Payment systems related revenue		3,169			2,875			294		10	%		2,930			239			8	%
Trust and investment services revenues		1,208			1,167			41		4	%		1,148			60			5	%
Gains on sales of loans		300			306			(6	)	-2	%		513			(213	)		-42	%
Gains (losses) on sales of securities		130			488			(358	)	-73	%		267			(137	)		-51	%
Other-than-temporary impairment losses		(179	)		-			(179	)	-			-			(179	)		-
Other		777			785			(8	)	-1	%		748			29			4	%
Total		8,980			9,834			(854	)	-9	%		9,250			(270	)		-3	%

OREO gains (losses) on sale		645			1,048			(403	)	-38	%		323			322			100	%
OREO valuation adjustments		(1,555	)		(1,257	)		(298	)	-24	%		(657	)		(898	)		-137	%
Total net loss on OREO		(910	)		(209	)		(701	)	-335	%		(334	)		(576	)		-172	%

Total noninterest income	$	8,070		$	9,625		$	(1,555	)	-16	%	$	8,916		$	(846	)		-9	%

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As shown in Table 9 below, second quarter 2011 total noninterest expense of $23.0 million remained virtually unchanged from the second quarter of 2010. Salaries and employee benefits expense grew $.8 million in the second quarter of 2011 when compared to the same quarter a year ago. The continued increase in payment system expense was related to continued growth in customer transaction volumes. These increases were substantially offset by the $.9 million decline in other noninterest expenses, which was primarily due to a reduction in the Company’s FDIC insurance premium expense from the second quarter 2010.

Table 9
NONINTEREST EXPENSE
(Dollars in thousands)	Q2		Q2		Change						Q1		Change
	2011		2010		$			%			2011		$			%
Noninterest expense
Salaries and employee benefits	$	12,119	$	11,322	$	797			7	%	$	11,877	$	242			2	%
Equipment		1,564		1,606		(42	)		-3	%		1,528		36			2	%
Occupancy		2,232		2,249		(17	)		-1	%		2,165		67			3	%
Payment systems related expense		1,350		1,212		138			11	%		1,247		103			8	%
Professional fees		976		1,161		(185	)		-16	%		982		(6	)		-1	%
Postage, printing and office supplies		862		737		125			17	%		810		52			6	%
Marketing		831		738		93			13	%		651		180			28	%
Communications		389		381		8			2	%		378		11			3	%
Other noninterest expense		2,635		3,503		(868	)		-25	%		2,915		(280	)		-10	%
Total noninterest expense	$	22,958		22,909	$	49			0	%	$	22,553	$	405			2	%

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Income Taxes and Deferred Tax Asset Valuation Allowance

Second quarter 2011 benefit for income taxes was $1.0 million, compared to a provision for income taxes in the same quarter of 2010 of $1.7 million. The benefit for income taxes in the most recent quarter was the result of an increase in the estimated gross unrealized gains on the investment securities portfolio for the full year. The provision for income taxes for the second quarter 2010 was primarily the result of adjustments made to the Company’s 2009 tax estimates in conjunction with finalizing its 2009 income tax return, which increased the deferred tax asset valuation allowance by $3.5 million, partly offset by the effect of the change in gross unrealized gain on its investment security portfolio during that quarter.

At June 30, 2011, the Company maintained a valuation allowance of $18.0 million against the deferred tax asset balance of $24.1 million for a net deferred tax asset of $6.1 million. A future reversal of the deferred tax asset valuation allowance would decrease the Company’s income tax expense and increase net income.

Table 10
PROVISION (BENEFIT) FOR INCOME TAXES
(Dollars in thousands)	Q2			Q2						Q1
	2011			2010			Change			2011

Benefit for income taxes net of initial establishment of deferred tax asset valuation allowance	$	-		$	-		$	-		$	-
Provision (benefit) for income taxes from deferred tax asset valuation allowance:
From estimated change in gross (gain) loss on securities		(987	)		(1,798	)		811			694
Change in deferred tax assets-tax return adjustments		-			3,515			(3,515	)		-
Total provision (benefit) for income taxes	$	(987	)	$	1,717		$	(2,704	)	$	694

Credit Quality

The Company recorded a second quarter 2011 provision for credit losses of $3.4 million, a decline from $7.8 million in the same quarter of 2010. The second quarter 2011 net charge-offs of $4.6 million or 1.22% of average loans on an annualized basis were relatively unchanged from net charge-offs of $4.7 million or 1.15% of average loans in the corresponding quarter a year ago, but higher than $2.7 million and .72%, respectively, in the first quarter of 2011. The $1.4 million year-over-year second quarter decline in commercial loan net charge-offs and a $.6 million reduction in nonstandard mortgage loan net charge-offs was offset by a $1.7 million increase in home equity net charge-offs and more moderate increases in commercial real estate construction and term loans. The Company’s future provisioning will continue to be heavily dependent on the local real estate market, level of market interest rates, and general economic conditions nationally and in areas where the Company does business.

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Table 11
ALLOWANCE FOR CREDIT LOSSES AND NET CHARGEOFFS
(Dollars in thousands)	Q2			Q1			Q4			Q3			Q2
	2011			2011			2010			2010			2010
Allowance for credit losses, beginning of period	$	40,429		$	41,067		$	42,618		$	44,347		$	41,299
Total provision for credit losses		3,426			2,076			1,693			1,567			7,758
Loan net charge-offs:
Commercial		321			263			1,109			524			1,684
Commercial real estate construction		648			65			76			-			248
Residential real estate construction		213			311			89			813			432
Total real estate construction		861			376			165			813			680
Mortgage		139			205			347			449			478
Nonstandard mortgage		83			315			76			5			641
Home equity		2,291			853			570			568			627
Total real estate mortgage		2,513			1,373			993			1,022			1,746
Commercial real estate		561			326			584			339			275
Installment and consumer		185			168			59			272			146
Overdraft		183			208			334			326			179
Total loan net charge-offs		4,624			2,714			3,244			3,296			4,710

Total allowance for credit losses	$	39,231		$	40,429		$	41,067		$	42,618		$	44,347
Components of allowance for credit losses:
Allowance for loan losses	$	38,422		$	39,692		$	40,217		$	41,753		$	43,329
Reserve for unfunded commitments		809			737			850			865			1,018
Total allowance for credit losses	$	39,231		$	40,429		$	41,067		$	42,618		$	44,347

Net loan charge-offs to average loans (annualized)		1.22	%		0.72	%		0.83	%		0.82	%		1.15	%
Allowance for loan losses to total loans		2.53	%		2.58	%		2.62	%		2.65	%		2.70	%
Allowance for credit losses to total loans		2.58	%		2.63	%		2.67	%		2.71	%		2.77	%
Allowance for loan losses to nonperforming loans		76	%		74	%		66	%		61	%		55	%
Allowance for credit losses to nonperforming loans		78	%		75	%		67	%		62	%		56	%

The allowance for credit losses was $39.2 million or 2.58% of total loans at June 30, 2011, compared to an allowance for credit losses of $44.3 million or 2.77% of total loans a year ago as the overall risk in the loan portfolio has decreased over the past year. Also, the allowance for credit losses relative to nonperforming loans increased from 56% a year ago to 78% at June 30, 2011, and increased modestly from March 31, 2011, as well. The decrease in the required allowance for credit losses over the past twelve months was mostly due to a reduction in higher risk-rated outstanding loans, lower loan volume migrating to higher risk classifications, and more impaired loans moved from being included in the general valuation allowance to being individually measured for impairment during the quarter. The unallocated portion of the reserve was also reduced as a result of the declining overall risk profile of the loan portfolio. During second quarter 2011, net charge-offs exceeded the provision for credit losses by $1.2 million. A lower provision amount relative to net charge-offs in the most recent quarter was largely due to the same factors resulting in the reduction in the required allowance from a year ago. The June 30, 2011, allowance for credit losses at 2.58% of total loans declined from 2.63% at March 31, 2011. 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.

WEST COAST BANCORP REPORTS SECOND QUARTER 2011 RESULTS

July 29, 2011

Page 11 of 17

Total nonperforming assets were $86.0 million or 3.5% of total assets as of June 30, 2011, compared to $116.2 million and 4.6% of total assets a year ago and 3.8% of total assets at March 31, 2011. The decline in total nonperforming assets from $93.3 million at March 31, 2011, represents the ninth consecutive quarterly decline.

Table 12
NONPERFORMING ASSETS
(Dollars in thousands)	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
	2011			2011			2010			2010			2010
Loans on nonaccrual status:
Commercial	$	9,280		$	12,803		$	13,377		$	13,319		$	15,317
Real estate construction:
Commercial real estate construction		4,357			4,032			4,077			3,391			3,391
Residential real estate construction		3,439			4,093			6,615			13,316			19,465
Total real estate construction		7,796			8,125			10,692			16,707			22,856
Real estate mortgage:
Mortgage		5,734			5,714			9,318			13,040			14,535
Nonstandard mortgage		5,793			6,451			5,223			5,150			6,121
Home equity		2,755			1,426			950			1,538			2,198
Total real estate mortgage		14,282			13,591			15,491			19,728			22,854
Commercial real estate		19,263			19,424			21,671			18,792			17,542
Installment and consumer		1			-			-			-			74
Total nonaccrual loans		50,622			53,943			61,231			68,546			78,643
90 days past due not on nonaccrual		-			-			-			-			-
Total nonperforming loans		50,622			53,943			61,231			68,546			78,643

Other real estate owned		35,374			39,329			39,459			35,814			37,578
Total nonperforming assets	$	85,996		$	93,272		$	100,690		$	104,360		$	116,221

Nonperforming loans to total loans		3.33	%		3.51	%		3.99	%		4.35	%		4.91	%
Nonperforming assets to total assets		3.49	%		3.80	%		4.09	%		4.20	%		4.64	%

Over the past year, total nonaccrual loans declined $28.0 million or 36% to $50.6 million at June 30, 2011. Nonaccrual loans declined significantly in the commercial, residential real estate construction, and mortgage loan categories, while increasing modestly in commercial real estate construction, commercial real estate, and home equity loan categories.

WEST COAST BANCORP REPORTS SECOND QUARTER 2011 RESULTS

July 29, 2011

Page 12 of 17

As indicated in Table 13 below, the Company’s OREO property disposition activities continue. During the second quarter 2011, the Company disposed of 51 OREO properties with a book value of $6.7 million while acquiring 18 properties with a book value of $4.3 million. The Company continued to take ownership of additional real property related to loans which previously were on nonaccrual status, and this partly offset the Company’s OREO sales activities in the most recent quarter. At June 30, 2011, the OREO portfolio consisted of 366 properties with a book value of $35.4 million. The OREO balance at June 30, 2011, reflected write-downs totaling 50% from original loan principal compared to 52% twelve months earlier. The largest balances in the OREO portfolio at June 30, 2011, were attributable to homes followed by income-producing properties and residential site development projects, all of which are located within our footprint.

Table 13
OTHER REAL ESTATE OWNED ACTIVITY
(Dollars in thousands)	Q2 2011						Q1 2011						Q4 2010						Q3 2010						Q2 2010
	Amount			#			Amount			#			Amount			#			Amount			#			Amount			#
Beginning balance	$	39,329			399		$	39,459			402		$	35,814			448		$	37,578			446		$	45,238			596
Additions to OREO		4,270			18			6,479			25			11,053			35			5,119			53			7,209			20
Dispositions of OREO		(6,670	)		(51	)		(5,952	)		(28	)		(5,886	)		(81	)		(5,372	)		(51	)		(13,612	)		(170	)
OREO valuation adj.		(1,555	)		-			(657	)		-			(1,522	)		-			(1,511	)		-			(1,257	)		-
Ending balance	$	35,374			366		$	39,329			399		$	39,459			402		$	35,814			448		$	37,578			446

Table 14
OTHER REAL ESTATE OWNED BY PROPERTY TYPE
(Dollars in thousands)	June 30,		# of		June 30,		# of		Mar. 31,		# of
	2011		properties		2010		properties		2011		properties
Homes	$	10,108		43	$	17,254		75	$	15,093		64
Income producing properties		9,237		14		2,996		6		6,613		9
Residential site developments		5,912		215		7,296		265		6,973		236
Land		4,052		11		3,474		10		4,427		11
Lots		3,126		52		4,750		67		3,758		56
Condominiums		1,900		14		1,111		12		1,792		12
Multifamily		673		11		697		11		673		11
Commercial site developments		366		6		-		-		-		-
Total	$	35,374		366	$	37,578		446	$	39,329		399

Other:

The Company will hold a Webcast conference call Friday, July 29, 2011, at 11:00 a.m. Pacific Time, during which the Company will discuss second quarter 2011 results and key activities. To access the conference call via a live Webcast, go to www.wcb.com and click on Investor Relations and the “2nd Quarter 2011 Earnings Conference Call” tab. The conference call may also be accessed by dialing (877) 247-4281 Conference ID#: 77019985 a few minutes prior to 11:00 a.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 REPORTS SECOND QUARTER 2011 RESULTS

July 29, 2011

Page 13 of 17

West Coast Bancorp is a Northwest bank holding company with $2.5 billion in assets and 65 offices in Oregon and Washington. The Company combines the sophisticated products and expertise of larger banks with the local decision making, market knowledge and customer service of a community bank. For more information, visit the Company’s web site at www.wcb.com.

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," “anticipates,” or "will," or other words of similar meaning. 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 as well as (ii) all risk factors identified in our Annual Report on Form 10-K for the year ended December 31, 2010, including under the headings "Forward Looking Statement Disclosure" and in the section "Risk Factors,” and in our most recent Quarterly Report on Form 10-Q.

WEST COAST BANCORP REPORTS SECOND QUARTER 2011 RESULTS

July 29, 2011

Page 14 of 17

Table 15
INCOME STATEMENT
(Dollars in thousands)	Q2			Q2			Change						Q1			Year to date			Year to date
	2011			2010			$			%			2011			2011			2010
Net interest income
Interest and fees on loans	$	20,231		$	22,416		$	(2,185	)		-10	%	$	20,299		$	40,530		$	45,259
Interest on investment securities		4,811			4,237			574			14	%		4,548			9,359			8,444
Other interest income		62			163			(101	)		-62	%		71			133			311
Total interest income		25,104			26,816			(1,712	)		-6	%		24,918			50,022			54,014
Interest expense on deposit accounts		1,476			3,275			(1,799	)		-55	%		1,809			3,285			7,568
Interest on borrowings and subordinated debentures		1,667			4,631			(2,964	)		-64	%		1,597			3,264			6,903
Total interest expense		3,143			7,906			(4,763	)		-60	%		3,406			6,549			14,471
Net interest income		21,961			18,910			3,051			16	%		21,512			43,473			39,543

Provision for credit losses		3,426			7,758			(4,332	)		-56	%		2,076			5,502			15,392

Noninterest income
Service charges on deposit accounts		3,575			4,213			(638	)		-15	%		3,644			7,219			7,809
Payment systems related revenue		3,169			2,875			294			10	%		2,930			6,099			5,411
Trust and investment services revenues		1,208			1,167			41			4	%		1,148			2,356			2,146
Gains on sales of loans		300			306			(6	)		-2	%		513			813			447
Net OREO valuation adjustments and gains (losses) on sales		(910	)		(209	)		(701	)		-335	%		(334	)		(1,244	)		(2,267	)
Other-than-temporary impairment losses		(179	)		-			(179	)		-			-			(179	)		-
Gain on sales of securities		130			488			(358	)		-73	%		267			397			945
Other		777			785			(8	)		-1	%		748			1,525			1,542
Total noninterest income		8,070			9,625			(1,555	)		-16	%		8,916			16,986			16,033
Noninterest expense
Salaries and employee benefits		12,119			11,322			797			7	%		11,877			23,996			22,497
Equipment		1,564			1,606			(42	)		-3	%		1,528			3,092			3,182
Occupancy		2,232			2,249			(17	)		-1	%		2,165			4,397			4,433
Payment systems related expense		1,350			1,212			138			11	%		1,247			2,597			2,216
Professional fees		976			1,161			(185	)		-16	%		982			1,958			2,022
Postage, printing and office supplies		862			737			125			17	%		810			1,672			1,541
Marketing		831			738			93			13	%		651			1,482			1,425
Communications		389			381			8			2	%		378			767			763
Other noninterest expense		2,635			3,503			(868	)		-25	%		2,915			5,550			5,925
Total noninterest expense		22,958			22,909			49			0	%		22,553			45,511			44,004
Income (loss) before income taxes		3,647			(2,132	)		5,779			271	%		5,799			9,446			(3,820	)
Provision (benefit) for income taxes		(987	)		1,717			(2,704	)		-157	%		694			(293	)		917
Net income (loss)	$	4,634		$	(3,849	)	$	8,483			220	%	$	5,105		$	9,739		$	(4,737	)

Net income (loss) per share:
Basic	$	0.23		$	(0.20	)	$	0.43					$	0.25		$	0.48		$	(0.30	)
Diluted	$	0.22		$	(0.20	)	$	0.42					$	0.25		$	0.45		$	(0.30	)

Weighted average common shares		19,006			18,425			581						18,960			18,983			15,939
Weighted average diluted shares		20,025			18,425			1,600						19,939			19,982			15,939

Tax equivalent net interest income	$	22,249		$	19,205		$	3,044					$	21,770		$	44,019		$	40,159

WEST COAST BANCORP REPORTS SECOND QUARTER 2011 RESULTS

July 29, 2011

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Table 16
BALANCE SHEETS
(Dollars in thousands)	June 30,			June 30,			Change						Mar. 31,
	2011			2010			$			%			2011
Assets:
Cash and due from banks	$	54,296		$	45,685		$	8,611			19	%	$	50,865
Federal funds sold		2,367			13,431			(11,064	)		-82	%		1,966
Interest-bearing deposits in other banks		33,583			109,781			(76,198	)		-69	%		122,224
Total cash and cash equivalents		90,246			168,897			(78,651	)		-47	%		175,055
Investment securities		760,704			646,231			114,473			18	%		643,705
Total loans		1,521,147			1,602,032			(80,885	)		-5	%		1,535,700
Allowance for loan losses		(38,422	)		(43,329	)		4,907			11	%		(39,692	)
Loans, net		1,482,725			1,558,703			(75,978	)		-5	%		1,496,008
Total interest earning assets		2,319,332			2,374,787			(55,455	)		-2	%		2,305,780
OREO, net		35,374			37,578			(2,204	)		-6	%		39,329
Goodwill and other intangibles		239			477			(238	)		-50	%		298
Other assets		93,268			93,600			(332	)		0	%		97,462
Total assets	$	2,462,556		$	2,505,486		$	(42,930	)		-2	%	$	2,451,857

Liabilities and Stockholders' Equity:
Demand	$	599,020		$	533,865		$	65,155			12	%	$	561,995
Savings and interest-bearing demand		465,779			433,001			32,778			8	%		461,542
Money market		658,185			661,913			(3,728	)		-1	%		661,327
Time deposits		208,013			375,321			(167,308	)		-45	%		243,567
Total deposits		1,930,997			2,004,100			(73,103	)		-4	%		1,928,431
Borrowings and subordinated debentures		219,599			215,199			4,400			2	%		219,599
Reserve for unfunded commitments		809			1,018			(209	)		-21	%		737
Other liabilities		25,582			17,757			7,825			44	%		26,102
Total liabilities		2,176,987			2,238,074			(61,087	)		-3	%		2,174,869
Stockholders' equity		285,569			267,412			18,157			7	%		276,988
Total liabilities and stockholders' equity	$	2,462,556		$	2,505,486		$	(42,930	)		-2	%	$	2,451,857

WEST COAST BANCORP REPORTS SECOND QUARTER 2011 RESULTS

July 29, 2011

Page 16 of 17

Table 17
PERIOD END LOANS
(Dollars in thousands)	June 30,		% of			June 30,		% of			Change						Mar. 31,		% of
	2011		Total			2010		total			Amount			%			2011		Total
Commercial loans	$	297,817		20	%	$	312,170		19	%	$	(14,353	)		-5	%	$	306,864		20	%
Commercial real estate construction		17,024		1	%		22,096		2	%		(5,072	)		-23	%		17,711		1	%
Residential real estate construction		15,410		1	%		52,062		3	%		(36,652	)		-70	%		19,896		1	%
Total real estate construction loans		32,434		2	%		74,158		5	%		(41,724	)		-56	%		37,607		2	%
Mortgage		62,244		4	%		73,867		5	%		(11,623	)		-16	%		63,780		4	%
Nonstandard mortgage		10,464		1	%		14,348		1	%		(3,884	)		-27	%		11,140		1	%
Home equity		264,016		17	%		274,072		17	%		(10,056	)		-4	%		266,606		17	%
Total real estate mortgage		336,724		22	%		362,287		23	%		(25,563	)		-7	%		341,526		22	%
Commercial real estate loans		839,665		55	%		837,033		52	%		2,632			0	%		834,880		55	%
Installment and other consumer loans		14,507		1	%		16,384		1	%		(1,877	)		-11	%		14,823		1	%
Total loans	$	1,521,147				$	1,602,032				$	(80,885	)		-5	%	$	1,535,700

Table 18
AVERAGE BALANCE SHEETS
(Dollars in thousands)	Q2			Q2			Q1			Year to date			Year to date
	2011			2010			2011			2011			2010
Cash and due from banks	$	52,273		$	48,232		$	48,698		$	50,495		$	47,361
Federal funds sold		4,790			3,605			3,947			4,371			8,233
Interest-bearing deposits in other banks		93,225			249,007			106,794			99,972			238,203
Total cash and cash equivalents		150,288			300,844			159,439			154,838			293,797
Investment securities		698,116			578,669			673,449			685,850			568,082
Total loans		1,523,170			1,645,189			1,529,290			1,526,213			1,673,816
Allowance for loan losses		(38,944	)		(42,895	)		(40,296	)		(39,616	)		(41,434	)
Loans, net		1,484,226			1,602,294			1,488,994			1,486,597			1,632,382
Total interest earning assets		2,319,980			2,477,349			2,314,612			2,317,311			2,489,191
Other assets		127,895			158,604			128,986			128,438			164,279
Total assets	$	2,460,525			2,640,411		$	2,450,868		$	2,455,723			2,658,540

Demand	$	578,562		$	523,298		$	552,229		$	565,468		$	521,405
Savings and interest-bearing demand		476,090			436,902			450,399			463,316			428,073
Money market		654,668			657,454			660,672			657,653			650,065
Time deposits		224,674			431,669			269,038			246,733			469,477
Total deposits		1,933,994			2,049,323			1,932,338			1,933,170			2,069,020
Borrowings and subordinated debentures		219,599			313,210			219,599			219,599			313,752
Total interest bearing liabilities		1,575,031			1,839,235			1,599,708			1,587,301			1,861,367
Other liabilities		24,331			17,118			24,983			24,656			18,182
Stockholders' equity		282,601			260,760			273,948			278,298			257,586
Total liabilities and stockholders' equity	$	2,460,525		$	2,640,411		$	2,450,868		$	2,455,723		$	2,658,540

WEST COAST BANCORP REPORTS SECOND QUARTER 2011 RESULTS

July 29, 2011

Page 17 of 17

The following table presents information about the Company’s total performing delinquent loans.

Table 19
DELINQUENT LOANS 30-89 DAYS PAST DUE AS A % OF LOAN CATEGORY
(Dollars in thousands)	June 30,			June 30,			Mar. 31,
	2011			2010			2011
Commercial loans		0.64	%		0.14	%		0.26	%
Real estate construction loans		0.00	%		1.48	%		0.00	%
Real estate mortgage loans		0.38	%		0.18	%		0.28	%
Commercial real estate loans		0.80	%		0.04	%		0.36	%
Installment and other consumer loans		0.05	%		1.27	%		1.06	%

Total delinquent loans 30-89 days past due	$	9,961		$	2,742		$	4,901
Delinquent loans to total loans		0.65	%		0.17	%		0.32	%

The following table presents information regarding common shares outstanding at June 30, 2011 on an actual and diluted basis.

Table 20
COMMON SHARE AND DILUTIVE SHARE INFORMATION
(Shares in thousands, restated for reverse stock split)

	Number
	of shares
Common shares outstanding at June 30, 2011		19,316

Common shares issuable on conversion of series B preferred stock 1		1,213
Dilutive impact of warrants 2 3		995
Dilutive impact of stock options and restricted stock 3		112
Total potential dilutive shares 4		21,636


1 121,328 shares of series B preferred stock outstanding at June 30, 2011.

2 Warrants to purchase 240,000 common shares at a price of $100 per series B preferred share outstanding at June 30, 2011.

3 The estimated dilutive impact of warrants, options, and restricted stock is shown. These figures are calculated under the treasury method utilizing an average stock price of $16.85 for the period and do not reflect the number of common shares that would be issued if securities were exercised in full.

4 Potential dilutive shares is a non-GAAP figure and not the weighted average diluted shares calculated in accordance with GAAP.

Attached files

WEST COAST BANCORP /NEW/OR/ Reports

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