Attached files
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| 8-K - 8-K CURRENT REPORT - WEST COAST BANCORP /NEW/OR/ | v238421_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 Reports Net Income of $6.3 Million in third Quarter 2011 and $16.0 million for nine months ending september 30, 2011
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·
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year-to-date net income increased $14.7 million over the same period in 2010.
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Return on average assets, annualized, was 1.00% in the third quarter and .87% year-to-date 2011.
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Third quarter 2011 pre-tax income of $4.0 million included a $2.8 million prepayment charge in connection with prepayment of $88 million term Federal Home Loan Bank (“FHLB”) borrowings during the third quarter.
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Along with restructuring of FHLB borrowings, the Company initiated several cost reduction initiatives during the third quarter of 2011 which are expected to improve pre-tax income in 2012.
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Nonperforming assets were $83.1 million, or 3.30% of total assets at September 30, 2011, continuing their decline for the tenth consecutive quarter.
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Lake Oswego, OR – October 28, 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 $6.3 million or $.29 per diluted share for the third quarter of 2011 compared to net income for the third quarter of 2010 of $6.1 million or $.29 per diluted share. Net income for the nine months ending September 30, 2011 was $16.0 million or $.75 per diluted share, up from net income of $1.3 million or $.06 per diluted share in the same period of 2010.
“Net income was $16.0 million for the nine months ended September 30, 2011 compared to $1.3 million for the same period a year ago, continuing the favorable trends in the operating performance of the Company over the past eighteen months”, said Robert D. Sznewajs, President and Chief Executive Officer. “The Company’s return on average assets continues to improve, reaching 1.00% in the third quarter of 2011 and .87% for the nine months ended September 30, 2011. In addition, we have taken steps in the third quarter to reduce our operating costs, including the closure of certain branches in the fourth quarter, and the prepayment of a portion of our term debt with the FHLB in the third quarter. These actions, combined with others, are expected to improve the Company’s pre-tax income in future periods.”
WEST COAST BANCORP REPORTS THIRD QUARTER 2011 RESULTS
October 28, 2011
Page 2 of 17
As shown in Table 1 below, the Company incurred approximately $3.1 million in expenses associated with our ongoing cost reduction initiatives in the quarter ended September 30, 2011. These actions, all else remaining constant, are projected to improve pre-tax income by $4.1 to $4.3 million on an annualized basis.
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Table 1
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IMPACT OF BRANCH CLOSURE AND FHLB PREPAYMENT
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(Dollars in thousands)
Corporate action:
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Q3 expense associated
with initiatives
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Estimated Q4
(benefit) expense
associated with initiatives
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Estimated annual
pretax income benefit
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Branch closure and personnel reduction
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$ 309 | $ 1,096 |
$2.6-$2.8 million
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FHLB borrowings prepayment
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2,775 | (591) |
$1.5 million
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Total
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$ 3,084 | $ 505 |
$4.1 - 4.3 million
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Table 2 below shows summary financial information for the quarters ended September 30, 2011 and 2010, and year-to-date ended September 30, 2011 and 2010.
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Table 2
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SUMMARY FINANCIAL INFORMATION
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Qtr. ended
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Qtr. ended
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Year-to-date
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Year-to-date
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|||||||||||||||||||||
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Sept. 30,
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Sept. 30,
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Sept. 30,
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Sept. 30,
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(Dollars and shares in thousands)
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2011
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2010
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Change
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2011
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2010
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Change
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Net income
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$ | 6,276 | $ | 6,050 | $ | 226 | $ | 16,015 | $ | 1,313 | $ | 14,702 | ||||||||||||
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Net income available to common stockholders 1
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$ | 5,836 | $ | 5,605 | $ | 231 | $ | 14,888 | $ | 1,131 | $ | 13,757 | ||||||||||||
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Selective quarterly performance ratios
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Return on average assets, annualized
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1.00 | % | 0.96 | % | 0.04 | 0.87 | % | 0.07 | % | 0.80 | ||||||||||||||
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Return on average equity, annualized
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8.55 | % | 8.84 | % | (0.29 | ) | 7.58 | % | 0.67 | % | 6.91 | |||||||||||||
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Efficiency ratio
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81.03 | % | 76.09 | % | 4.94 | 76.96 | % | 78.39 | % | (1.43 | ) | |||||||||||||
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Share and Per Share Figures-Actual
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Common shares outstanding at period end
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19,303 | 19,285 | 18 | 19,303 | 19,285 | 18 | ||||||||||||||||||
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Weighted average diluted shares
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21,124 | 20,629 | 495 | 21,254 | 20,200 | 1,054 | ||||||||||||||||||
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Weighted average diluted shares-two class method 2
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19,880 | 19,401 | 479 | 19,951 | 17,556 | 2,395 | ||||||||||||||||||
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Net income per diluted share
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$ | 0.29 | $ | 0.29 | $ | - | $ | 0.75 | $ | 0.06 | $ | 0.69 | ||||||||||||
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Book value per common share
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$ | 14.28 | $ | 13.15 | $ | 1.13 | $ | 14.28 | $ | 13.15 | $ | 1.13 | ||||||||||||
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1 Adjusted for the impact of allocating net income to participating instruments, restricted stock and preferred Series B stock.
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2 Adjusted for the impact of calculating earnings per share under the two-class method.
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Please see Table 21 for additional information regarding outstanding shares and the possible dilutive effects of presently outstanding securities.
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WEST COAST BANCORP REPORTS THIRD QUARTER 2011 RESULTS
October 28, 2011
Page 3 of 17
Balance Sheet Overview
Third quarter 2011 average total loan balances of $1.52 billion were virtually unchanged from the second quarter of 2011. This was mainly attributable to growth in new loan originations in 2011 and lower loan balances moving from nonaccrual status to other real estate owned (“OREO”). The third quarter average loan balances declined $72 million or 5% from the same quarter of 2010. The reduction in average loan balances year-over-year third quarter was primarily in residential real estate construction, real estate mortgage, and commercial loan categories. Third quarter average total real estate construction loan balances contracted $38 million or 55% from the same period in 2010 due to the continued soft market for new development and uncertain economic conditions.
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Table 3
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AVERAGE LOANS FOR THE QUARTER
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(Dollars in thousands)
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September 30,
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% of
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September 30,
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% of
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Change
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June 30,
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% of
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2011
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Total
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2010
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total
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Amount
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%
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2011
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Total
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Commercial loans
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$ | 297,354 | 20% | $ | 310,064 | 20% | $ | (12,710 | ) | -4% | $ | 301,436 | 20% | |||||||||||||||||||
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Commercial real estate construction
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15,764 | 1% | 21,476 | 1% | (5,712 | ) | -27% | 19,029 | 1% | |||||||||||||||||||||||
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Residential real estate construction
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15,146 | 1% | 47,801 | 3% | (32,655 | ) | -68% | 17,223 | 1% | |||||||||||||||||||||||
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Total real estate construction loans
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30,910 | 2% | 69,277 | 4% | (38,367 | ) | -55% | 36,252 | 2% | |||||||||||||||||||||||
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Mortgage
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60,123 | 4% | 71,710 | 5% | (11,587 | ) | -16% | 62,778 | 4% | |||||||||||||||||||||||
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Nonstandard mortgage
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10,020 | 1% | 14,342 | 1% | (4,322 | ) | -30% | 10,525 | 1% | |||||||||||||||||||||||
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Home equity
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263,873 | 17% | 272,497 | 17% | (8,624 | ) | -3% | 266,221 | 17% | |||||||||||||||||||||||
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Total real estate mortgage
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334,016 | 22% | 358,549 | 23% | (24,533 | ) | -7% | 339,524 | 22% | |||||||||||||||||||||||
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Commercial real estate loans
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838,887 | 55% | 832,888 | 52% | 5,999 | 1% | 831,738 | 55% | ||||||||||||||||||||||||
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Installment and other consumer loans
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13,924 | 1% | 16,071 | 1% | (2,147 | ) | -13% | 14,220 | 1% | |||||||||||||||||||||||
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Total loans
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$ | 1,515,091 | $ | 1,586,849 | $ | (71,758 | ) | -5% | $ | 1,523,170 | ||||||||||||||||||||||
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Yield on loans
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5.25 | % | 5.44 | % | (0.19 | ) | 5.33 | % | ||||||||||||||||||||||||
The Company’s liquidity position remains strong as evidenced by combined cash equivalents and investment securities balance of $873 million or 37% of earning assets at September 30, 2011, an increase from $758 million and 32%, respectively, twelve months earlier. In an effort to support its net interest income and margin, the Company reduced its cash equivalents balance by $68 million while increasing its investment securities portfolio by $183 million since September 30, 2010. Over the past year, the Company increased its U.S. government agency and government guaranteed mortgage-backed securities portfolios by $56 million and $136 million, respectively. The purchases were primarily of U.S. government agency securities with 3 to 5-year maturities and 10 and 15-year fully amortizing U.S. agency mortgage-backed securities, for which we expect to have limited extension risk. The expected duration of the investment portfolio was 2.3 years at September 30, 2011, compared to 1.7 years a year earlier and 3.0 years at June 30, 2011.
WEST COAST BANCORP REPORTS THIRD QUARTER 2011 RESULTS
October 28, 2011
Page 4 of 17
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Table 4
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PERIOD END CASH EQUIVALENTS AND INVESTMENT SECURITIES
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(Dollars in thousands)
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September 30,
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September 30,
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Change
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June 30,
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2011
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2010
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Amount
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%
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2011
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Cash equivalents:
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Federal funds sold
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$ | 2,102 | $ | 4,605 | $ | (2,503 | ) | -54% | $ | 2,367 | ||||||||||
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Interest-bearing deposits in other banks
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47,734 | 113,144 | (65,410 | ) | -58% | 33,583 | ||||||||||||||
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Total cash equivalents
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49,836 | 117,749 | (67,913 | ) | -58% | 35,950 | ||||||||||||||
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Investment securities:
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U.S. Treasury securities
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205 | 14,551 | (14,346 | ) | -99% | 4,237 | ||||||||||||||
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U.S. Government Agency securities
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277,669 | 221,450 | 56,219 | 25% | 221,958 | |||||||||||||||
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Corporate securities
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8,858 | 9,014 | (156 | ) | -2% | 9,506 | ||||||||||||||
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Mortgage-backed securities
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460,927 | 324,563 | 136,364 | 42% | 454,029 | |||||||||||||||
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Obligations of state and political sub.
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63,761 | 58,206 | 5,555 | 10% | 59,122 | |||||||||||||||
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Equity investments and other securities
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12,038 | 12,290 | (252 | ) | -2% | 11,852 | ||||||||||||||
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Total investment securities
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823,458 | 640,074 | 183,384 | 29% | 760,704 | |||||||||||||||
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Total cash equivalents and investment securities
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$ | 873,294 | $ | 757,823 | $ | 115,471 | 15% | $ | 796,654 | |||||||||||
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Tax equivalent yield on cash equivalents and investment securities
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2.35 | % | 2.30 | % | 0.05 | 2.60 | % | |||||||||||||
Third quarter 2011 average total deposits of $1.95 billion declined 2% or $46 million from the same quarter in 2010. With excess balance sheet liquidity, the Company continued to reduce higher cost time deposit balances. As a result, average time deposit balances declined $140 million or 42% year-over-year in the third quarter. Time deposits represented less than 10% of the Company’s average total deposits in the most recent quarter compared to 17% during third quarter last year.
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Table 5
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QUARTERLY AVERAGE DEPOSITS BY CATEGORY
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(Dollars in thousands)
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Q3 |
% of
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Q3 |
% of
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Change
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Q2 |
% of
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| 2011 |
Total
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2010 |
Total
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Amount
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%
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2011 |
Total
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Demand deposits
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$ | 615,956 | 31% | $ | 550,695 | 28% | $ | 65,261 | 12% | $ | 578,562 | 29% | ||||||||||||||||||||
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Interest bearing demand
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363,554 | 19% | 337,214 | 17% | 26,340 | 8% | 365,407 | 19% | ||||||||||||||||||||||||
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Total checking deposits
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979,510 | 50% | 887,909 | 45% | 91,601 | 10% | 943,969 | 48% | ||||||||||||||||||||||||
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Savings
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114,779 | 6% | 106,768 | 5% | 8,011 | 8% | 110,683 | 6% | ||||||||||||||||||||||||
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Money market
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661,871 | 34% | 667,150 | 33% | (5,279 | ) | -1% | 654,668 | 34% | |||||||||||||||||||||||
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Total non-time deposits
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1,756,160 | 90% | 1,661,827 | 83% | 94,333 | 6% | 1,709,320 | 88% | ||||||||||||||||||||||||
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Time deposits
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196,807 | 10% | 336,678 | 17% | (139,871 | ) | -42% | 224,674 | 12% | |||||||||||||||||||||||
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Total deposits
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$ | 1,952,967 | 100% | $ | 1,998,505 | 100% | $ | (45,538 | ) | -2% | $ | 1,933,994 | 100% | |||||||||||||||||||
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Average rate on total deposits
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0.20 | % | 0.51 | % | (0.31 | ) | 0.31 | % | ||||||||||||||||||||||||
WEST COAST BANCORP REPORTS THIRD QUARTER 2011 RESULTS
October 28, 2011
Page 5 of 17
Third quarter average checking account balances of $980 million grew $92 million or 10% year-over-year and represented 50% of the Company’s average total deposits in the quarter. The continuing shift in the mix of deposit balances from time deposits to non-time deposits together with the Company’s deposit pricing strategies, contributed in the reduction in the average rate paid on total deposits to .20% in the most recent quarter, a decline of 31 basis points from .51% in the third quarter last year and down 11 basis points on a sequential quarter basis.
Concurrently with its prepayment of $88 million in term FHLB borrowings, the Company elected to enter into $50 million in new term borrowings with the FHLB in order to maintain its balance sheet interest rate sensitivity position. The rate on the new term borrowings is .85%, a reduction from 3.14% on the amount prepaid. The duration of the new term borrowings is approximately two years, an increase from approximately one year for the $88 million paid off. As a result of these actions, the net reduction in interest expense is estimated to be approximately $1.5 million in 2012 and approximately $.6 million in the fourth quarter of 2011.
Capital Position
The Company’s profitability over the past four quarters continued to boost its capital position. As shown in Table 6 below, at September 30, 2011, the Company’s tier 1 and total risk-based capital ratios measured 18.43% and 19.69%, respectively, while its leverage ratio was 13.72%.
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Table 6
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CAPITAL RATIOS
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September 30,
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September 30,
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June 30,
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2011
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2010
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Change
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2011
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Change
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West Coast Bancorp
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Tier 1 risk based capital ratio
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18.43 | % | 16.96 | % | 1.47 | 17.99 | % | 0.44 | ||||||||||||
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Total risk based capital ratio
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19.69 | % | 18.23 | % | 1.46 | 19.25 | % | 0.44 | ||||||||||||
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Leverage ratio
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13.72 | % | 12.84 | % | 0.88 | 13.55 | % | 0.17 | ||||||||||||
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West Coast Bank
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Tier 1 risk based capital ratio
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17.74 | % | 16.30 | % | 1.44 | 17.30 | % | 0.44 | ||||||||||||
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Total risk based capital ratio
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19.00 | % | 17.56 | % | 1.44 | 18.56 | % | 0.44 | ||||||||||||
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Leverage ratio
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13.20 | % | 12.34 | % | 0.86 | 13.04 | % | 0.16 | ||||||||||||
WEST COAST BANCORP REPORTS THIRD QUARTER 2011 RESULTS
October 28, 2011
Page 6 of 17
Operating Results Improved from the Third Quarter of 2010
As shown in Table 7 below, third quarter 2011 net income of $6.3 million increased $.2 million compared to net income of $6.1 million in the corresponding quarter of 2010. The Company recorded a benefit for income taxes of $2.3 million in the most recent quarter, an increase of $1.6 million compared to the benefit of $.7 million in the same quarter last year. Third quarter 2011 pre-tax income was $4.0 million, a decline from $5.4 million in third quarter of 2010. Excluding the $2.8 million FHLB prepayment charge in the most recent quarter, pre-tax income increased $1.4 million or 26% from third quarter of 2010. See Table 7 for reconciliation to GAAP figures. This improvement resulted from an increase in net interest income (excluding the prepayment charge) and noninterest income, as well as lower provision for credit losses and noninterest expenses.
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Table 7
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SUMMARY INCOME STATEMENT
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(Dollars in thousands)
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Q3 | Q3 |
Change
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Q2 |
Change
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| 2011 | 2010 | $ | % | 2011 | $ | % | ||||||||||||||||||||||
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Net interest income
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$ | 19,341 | $ | 21,875 | $ | (2,534 | ) | -12 | % | $ | 21,961 | $ | (2,620 | ) | -12 | % | ||||||||||||
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Provision for credit losses
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1,132 | 1,567 | (435 | ) | -28 | % | 3,426 | (2,294 | ) | -67 | % | |||||||||||||||||
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Noninterest income
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8,414 | 8,069 | 345 | 4 | % | 8,070 | 344 | 4 | % | |||||||||||||||||||
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Noninterest expense
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22,620 | 23,003 | (383 | ) | -2 | % | 22,958 | (338 | ) | -1 | % | |||||||||||||||||
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Income before income taxes
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4,003 | 5,374 | (1,371 | ) | -26 | % | 3,647 | 356 | 10 | % | ||||||||||||||||||
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Benefit for income taxes
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(2,273 | ) | (676 | ) | (1,597 | ) | -236 | % | (987 | ) | (1,286 | ) | -130 | % | ||||||||||||||
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Net income
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$ | 6,276 | $ | 6,050 | $ | 226 | 4 | % | $ | 4,634 | $ | 1,642 | 35 | % | ||||||||||||||
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Reconciliation of income before income taxes adjusted for FHLB prepayment charge
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Income before income taxes
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$ | 4,003 | $ | 5,374 | $ | (1,371 | ) | -26 | % | $ | 3,647 | $ | 356 | 10 | % | |||||||||||||
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Less FHLB prepayment charge 1
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2,775 | - | 2,775 | - | 2,775 | |||||||||||||||||||||||
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Income before income taxes excluding FHLB prepayment charge 2
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$ | 6,778 | $ | 5,374 | $ | 1,404 | 26 | % | $ | 3,647 | $ | 3,131 | 86 | % | ||||||||||||||
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1 No tax benefit was applied for the FHLB prepayment charge.
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2 Management uses this non-GAAP information internally and has disclosed it to investors based on its belief that the information provides additional, valuable information relating to its operating performance as compared to prior periods.
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Third quarter 2011 net interest income of $19.3 million decreased $2.5 million from the same quarter in 2010, primarily as a result of the $2.8 million prepayment charge incurred in conjunction with the $88 million prepayment of FHLB borrowings. As shown in Table 8 below, adjusting for this prepayment charge, the third quarter 2011 net interest margin of 3.78% increased 7 basis points from the same quarter last year as the rate on interest bearing deposits declined more than the yield on earning assets. However, as a result of earning assets yield pressures caused by the sustained low market interest rates, the net interest margin contracted 7 basis points from the second quarter of 2011.
WEST COAST BANCORP REPORTS THIRD QUARTER 2011 RESULTS
October 28, 2011
Page 7 of 17
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Table 8
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NET INTEREST SPREAD AND MARGIN
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(Annualized, tax-equivalent basis)
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Q3 | Q3 | Q2 | |||||||||||||||||
| 2011 | 2010 |
Change
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2011 |
Change
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Yield on average interest-earning assets
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4.22 | % | 4.41 | % | (0.19 | ) | 4.39 | % | (0.17 | ) | ||||||||||
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Rate on average interest-bearing liabilities 1
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1.37 | % | 1.00 | % | 0.37 | 0.80 | % | 0.57 | ||||||||||||
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Net interest spread
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2.85 | % | 3.41 | % | (0.56 | ) | 3.59 | % | (0.74 | ) | ||||||||||
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Net interest margin
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3.31 | % | 3.71 | % | (0.40 | ) | 3.85 | % | (0.54 | ) | ||||||||||
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Impact of FHLB prepayment premium in Q3 2011
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-0.47 | % | 0.00 | % | (0.47 | ) | 0.00 | % | (0.47 | ) | ||||||||||
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Net interest margin excluding FHLB prepayment premium
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3.78 | % | 3.71 | % | 0.07 | 3.85 | % | (0.07 | ) | |||||||||||
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1 Third quarter 2011 rate on average interest-bearing liabilities includes 47 basis points of expense associated with the prepayment of $88 million in FHLB borrowings.
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As shown in Table 9 below, third quarter 2011 total noninterest income of $8.4 million increased $.3 million from both the same quarter last year and the second quarter of 2011. As a result of implementing the Federal Deposit Insurance Corporation’s (“FDIC”) guidance on overdraft payment programs late in the second quarter and early in the third quarter of 2011, the third quarter deposit service charges declined $1.0 million or 25% from the same quarter in 2010, and $.4 million linked quarters. On October 18, 2011, the Bank received an order from the FDIC relating to its overdraft practices. As part of the order, the Bank agreed to implement certain procedural improvements relating to compliance and its overdraft program. The procedural improvements required by the order have been completed or are under way. In addition, the Bank has paid a civil money penalty of $390,000, and will make restitution payments to certain customers in an amount, while yet to be finalized, we do not believe will be material. The Company established a reserve in prior periods to cover estimated restitution costs and civil money penalty.
While essentially unchanged from the prior quarter, payment systems-related revenues increased 7% or $.2 million over the third quarter in 2010 due to higher transaction volumes. The total net loss on OREO was minor in the third quarter of 2011, compared to a $.9 million loss in the third quarter of last year and $.9 million in the second quarter of 2011. Excluding the total net loss on OREO, the Company’s noninterest income decreased $.6 million from both year-over-year third quarter and the prior quarter. There was no other-than-temporary-impairment (“OTTI”) charge on our trust preferred securities held in the investment portfolio in the third quarter 2011, compared to a $.2 million such charge in the second quarter of 2011.
WEST COAST BANCORP REPORTS THIRD QUARTER 2011 RESULTS
October 28, 2011
Page 8 of 17
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Table 9
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NONINTEREST INCOME
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(Dollars in thousands)
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Q3 | Q3 |
Change
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Q2 |
Change
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| 2011 | 2010 | $ | % | 2011 | $ | % | ||||||||||||||||||||||
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Noninterest income
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Service charges on deposit accounts
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$ | 3,129 | $ | 4,145 | $ | (1,016 | ) | -25 | % | $ | 3,575 | $ | (446 | ) | -12 | % | ||||||||||||
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Payment systems related revenue
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3,201 | 2,998 | 203 | 7 | % | 3,169 | 32 | 1 | % | |||||||||||||||||||
|
Trust and investment services revenues
|
1,033 | 978 | 55 | 6 | % | 1,208 | (175 | ) | -14 | % | ||||||||||||||||||
|
Gains on sales of loans
|
222 | 182 | 40 | 22 | % | 300 | (78 | ) | -26 | % | ||||||||||||||||||
|
Gains (losses) on sales of securities
|
124 | - | 124 | - | 130 | (6 | ) | -5 | % | |||||||||||||||||||
|
Other-than-temporary impairment losses
|
- | - | - | - | (179 | ) | 179 | - | ||||||||||||||||||||
|
Other
|
716 | 728 | (12 | ) | -2 | % | 777 | (61 | ) | -8 | % | |||||||||||||||||
|
Total
|
8,425 | 9,031 | (606 | ) | -7 | % | 8,980 | (555 | ) | -6 | % | |||||||||||||||||
|
OREO gains (losses) on sale
|
685 | 549 | 136 | 25 | % | 645 | 40 | 6 | % | |||||||||||||||||||
|
OREO valuation adjustments
|
(696 | ) | (1,511 | ) | 815 | 54 | % | (1,555 | ) | 859 | 55 | % | ||||||||||||||||
|
Total net loss on OREO
|
(11 | ) | (962 | ) | 951 | 99 | % | (910 | ) | 899 | 99 | % | ||||||||||||||||
|
Total noninterest income
|
$ | 8,414 | $ | 8,069 | $ | 345 | 4 | % | $ | 8,070 | $ | 344 | 4 | % | ||||||||||||||
As shown in Table 10 below, third quarter 2011 total noninterest expense of $22.6 million declined slightly from both the same quarter in 2010 and the immediately preceding quarter. Noninterest expenses declined modestly across most areas on a linked quarter basis. As a result of the cost reduction initiatives underway, we expect total noninterest expense to be favorably impacted by at least $2.6 million in 2012, everything else being equal.
|
Table 10
|
||||||||||||||||||||||||||||
|
NONINTEREST EXPENSE
|
||||||||||||||||||||||||||||
|
(Dollars in thousands)
|
Q3 | Q3 |
Change
|
Q2 |
Change
|
|||||||||||||||||||||||
| 2011 | 2010 | $ | % | 2011 | $ | % | ||||||||||||||||||||||
|
Noninterest expense
|
||||||||||||||||||||||||||||
|
Salaries and employee benefits
|
$ | 11,977 | $ | 11,836 | $ | 141 | 1 | % | $ | 12,119 | $ | (142 | ) | -1 | % | |||||||||||||
|
Equipment
|
1,461 | 1,525 | (64 | ) | -4 | % | 1,564 | (103 | ) | -7 | % | |||||||||||||||||
|
Occupancy
|
2,115 | 2,216 | (101 | ) | -5 | % | 2,232 | (117 | ) | -5 | % | |||||||||||||||||
|
Payment systems related expense
|
1,279 | 1,214 | 65 | 5 | % | 1,350 | (71 | ) | -5 | % | ||||||||||||||||||
|
Professional fees
|
1,038 | 1,147 | (109 | ) | -10 | % | 976 | 62 | 6 | % | ||||||||||||||||||
|
Postage, printing and office supplies
|
772 | 791 | (19 | ) | -2 | % | 862 | (90 | ) | -10 | % | |||||||||||||||||
|
Marketing
|
862 | 861 | 1 | 0 | % | 831 | 31 | 4 | % | |||||||||||||||||||
|
Communications
|
387 | 374 | 13 | 3 | % | 389 | (2 | ) | -1 | % | ||||||||||||||||||
|
Other noninterest expense
|
2,729 | 3,039 | (310 | ) | -10 | % | 2,635 | 94 | 4 | % | ||||||||||||||||||
|
Total noninterest expense
|
$ | 22,620 | $ | 23,003 | $ | (383 | ) | -2 | % | $ | 22,958 | $ | (338 | ) | -1 | % | ||||||||||||
WEST COAST BANCORP REPORTS THIRD QUARTER 2011 RESULTS
October 28, 2011
Page 9 of 17
Income Taxes and Deferred Tax Asset Valuation Allowance
Third quarter 2011 benefit for income taxes was $2.3 million, compared to a benefit for income taxes of $.7 million in the same quarter of 2010. The benefit for income taxes in the most recent quarter was mainly the result of an increase in the estimated gross unrealized gain on the investment securities portfolio for the full year. While to a less extent, the income tax benefit in the third quarter of 2010, was also primarily the result of an increase in the full year estimated gross unrealized gain on our investment securities.
At September 30, 2011, the Company maintained a valuation allowance of $17.0 million against its deferred tax asset balance of $26.3 million for a net deferred tax asset of $9.3 million. Under certain assumptions regarding performance for the balance of this year and next, we continue to believe the deferred tax asset valuation allowance will be fully reversed in the fourth quarter 2011. The reversal of the deferred tax asset valuation allowance would decrease the Company’s income tax expense and increase net income in the period of such reversal.
|
Table 11
|
||||||||||||||||
|
BENEFIT FOR INCOME TAXES
|
||||||||||||||||
|
(Dollars in thousands)
|
Q3 | Q3 | Q2 | |||||||||||||
| 2011 | 2010 |
Change
|
2011 | |||||||||||||
|
Benefit for income taxes net of initial
|
||||||||||||||||
|
establishment of deferred tax asset valuation allowance
|
$ | - | $ | - | $ | - | $ | - | ||||||||
|
Benefit for income taxes from deferred
|
||||||||||||||||
|
tax asset valuation allowance:
|
||||||||||||||||
|
From estimated change in gross gain on securities
|
(2,273 | ) | (676 | ) | (1,597 | ) | (987 | ) | ||||||||
|
Total benefit for income taxes
|
$ | (2,273 | ) | $ | (676 | ) | $ | (1,597 | ) | $ | (987 | ) | ||||
Credit Quality
The Company recorded a third quarter 2011 provision for credit losses of $1.1 million, a decline from $1.6 million in the same quarter of 2010 and $3.4 million in the prior quarter. The third quarter 2011 net charge-offs of $3.3 million or .88% of average loans on an annualized basis were substantially unchanged from the corresponding quarter a year ago, but a decline from $4.6 million and 1.22%, respectively, in the second quarter of 2011. Sequential quarters, declines in real estate construction and home equity net charge-offs more than offset increases in commercial and commercial real estate loan net charge-offs. 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.
WEST COAST BANCORP REPORTS THIRD QUARTER 2011 RESULTS
October 28, 2011
Page 10 of 17
|
Table 12
|
||||||||||||||||||||
|
ALLOWANCE FOR CREDIT LOSSES AND NET CHARGEOFFS
|
||||||||||||||||||||
|
(Dollars in thousands)
|
Q3 | Q2 | Q1 | Q4 | Q3 | |||||||||||||||
| 2011 | 2011 | 2011 | 2010 | 2010 | ||||||||||||||||
|
Allowance for credit losses, beginning of period
|
$ | 39,231 | $ | 40,429 | $ | 41,067 | $ | 42,618 | $ | 44,347 | ||||||||||
|
Total provision for credit losses
|
1,132 | 3,426 | 2,076 | 1,693 | 1,567 | |||||||||||||||
|
Loan net charge-offs:
|
||||||||||||||||||||
|
Commercial
|
1,181 | 321 | 263 | 1,109 | 524 | |||||||||||||||
|
Commercial real estate construction
|
472 | 648 | 65 | 76 | - | |||||||||||||||
|
Residential real estate construction
|
(87 | ) | 213 | 311 | 89 | 813 | ||||||||||||||
|
Total real estate construction
|
385 | 861 | 376 | 165 | 813 | |||||||||||||||
|
Mortgage
|
185 | 139 | 205 | 347 | 449 | |||||||||||||||
|
Nonstandard mortgage
|
61 | 83 | 315 | 76 | 5 | |||||||||||||||
|
Home equity
|
516 | 2,291 | 853 | 570 | 568 | |||||||||||||||
|
Total real estate mortgage
|
762 | 2,513 | 1,373 | 993 | 1,022 | |||||||||||||||
|
Commercial real estate
|
779 | 561 | 326 | 584 | 339 | |||||||||||||||
|
Installment and consumer
|
6 | 185 | 168 | 59 | 272 | |||||||||||||||
|
Overdraft
|
234 | 183 | 208 | 334 | 326 | |||||||||||||||
|
Total loan net charge-offs
|
3,347 | 4,624 | 2,714 | 3,244 | 3,296 | |||||||||||||||
|
Total allowance for credit losses
|
$ | 37,016 | $ | 39,231 | $ | 40,429 | $ | 41,067 | $ | 42,618 | ||||||||||
|
Components of allowance for credit losses:
|
||||||||||||||||||||
|
Allowance for loan losses
|
$ | 36,314 | $ | 38,422 | $ | 39,692 | $ | 40,217 | $ | 41,753 | ||||||||||
|
Reserve for unfunded commitments
|
702 | 809 | 737 | 850 | 865 | |||||||||||||||
|
Total allowance for credit losses
|
$ | 37,016 | $ | 39,231 | $ | 40,429 | $ | 41,067 | $ | 42,618 | ||||||||||
|
Net loan charge-offs to average loans (annualized)
|
0.88 | % | 1.22 | % | 0.72 | % | 0.83 | % | 0.82 | % | ||||||||||
|
Allowance for loan losses to total loans
|
2.42 | % | 2.53 | % | 2.58 | % | 2.62 | % | 2.65 | % | ||||||||||
|
Allowance for credit losses to total loans
|
2.46 | % | 2.58 | % | 2.63 | % | 2.67 | % | 2.71 | % | ||||||||||
|
Allowance for loan losses to nonperforming loans
|
69 | % | 76 | % | 74 | % | 66 | % | 61 | % | ||||||||||
|
Allowance for credit losses to nonperforming loans
|
70 | % | 78 | % | 75 | % | 67 | % | 62 | % | ||||||||||
The allowance for credit losses was $37.0 million or 2.46% of total loans at September 30, 2011, compared to an allowance for credit losses of $42.6 million or 2.71% of total loans a year ago and $39.2 million or 2.58% of total loans at June 30, 2011. The lower allowance for credit losses relative to total loans reflected an improvement in the overall risk profile of the loan portfolio over both the past year and the previous quarter. Also, the allowance for credit losses relative to nonperforming loans increased from 62% a year ago to 70% at September 30, 2011, while declining from 78% at June 30, 2011. The decrease in the allowance for credit losses over the past twelve months was mostly due to a reduction in higher risk-rated loans outstanding, a lower volume of loans migrating to higher risk classifications, lower overall loan balances, and more impaired loans moving from being included in the general valuation allowance to being individually measured for impairment during the quarter. 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 were $83.1 million or 3.3% of total assets as of September 30, 2011, compared to $104.4 million and 4.2% of total assets a year ago and 3.5% of total assets at the end of the second quarter. The decline in total nonperforming assets of $2.9 million during the third quarter of 2011 represented the tenth consecutive quarterly reduction in nonperforming assets.
WEST COAST BANCORP REPORTS THIRD QUARTER 2011 RESULTS
October 28, 2011
Page 11 of 17
|
Table 13
|
||||||||||||||||||||
|
NONPERFORMING ASSETS
|
||||||||||||||||||||
|
(Dollars in thousands)
|
Sept. 30,
|
June 30,
|
Mar. 31,
|
Dec. 31,
|
Sept. 30,
|
|||||||||||||||
|
2011
|
2011
|
2011
|
2010
|
2010
|
||||||||||||||||
|
Loans on nonaccrual status:
|
||||||||||||||||||||
|
Commercial
|
$ | 9,987 | $ | 9,280 | $ | 12,803 | $ | 13,377 | $ | 13,319 | ||||||||||
|
Real estate construction:
|
||||||||||||||||||||
|
Commercial real estate construction
|
3,886 | 4,357 | 4,032 | 4,077 | 3,391 | |||||||||||||||
|
Residential real estate construction
|
3,311 | 3,439 | 4,093 | 6,615 | 13,316 | |||||||||||||||
|
Total real estate construction
|
7,197 | 7,796 | 8,125 | 10,692 | 16,707 | |||||||||||||||
|
Real estate mortgage:
|
||||||||||||||||||||
|
Mortgage
|
5,876 | 5,734 | 5,714 | 9,318 | 13,040 | |||||||||||||||
|
Nonstandard mortgage
|
5,001 | 5,793 | 6,451 | 5,223 | 5,150 | |||||||||||||||
|
Home equity
|
3,285 | 2,755 | 1,426 | 950 | 1,538 | |||||||||||||||
|
Total real estate mortgage
|
14,162 | 14,282 | 13,591 | 15,491 | 19,728 | |||||||||||||||
|
Commercial real estate
|
21,513 | 19,263 | 19,424 | 21,671 | 18,792 | |||||||||||||||
|
Installment and consumer
|
6 | 1 | - | - | - | |||||||||||||||
|
Total nonaccrual loans
|
52,865 | 50,622 | 53,943 | 61,231 | 68,546 | |||||||||||||||
|
90 days past due not on nonaccrual
|
- | - | - | - | - | |||||||||||||||
|
Total nonperforming loans
|
52,865 | 50,622 | 53,943 | 61,231 | 68,546 | |||||||||||||||
|
Other real estate owned
|
30,234 | 35,374 | 39,329 | 39,459 | 35,814 | |||||||||||||||
|
Total nonperforming assets
|
$ | 83,099 | $ | 85,996 | $ | 93,272 | $ | 100,690 | $ | 104,360 | ||||||||||
|
Nonperforming loans to total loans
|
3.52 | % | 3.33 | % | 3.51 | % | 3.99 | % | 4.35 | % | ||||||||||
|
Nonperforming assets to total assets
|
3.30 | % | 3.49 | % | 3.80 | % | 4.09 | % | 4.20 | % | ||||||||||
Over the past year, total nonaccrual loans declined $15.7 million or 23% to $52.9 million at September 30, 2011. During the most recent quarter nonaccrual loans increased $2.2 million as a result of modest increases in nonaccrual commercial and commercial real estate loan categories. Two loans largely accounted for the increase in the nonaccrual commercial real estate category, one of which in the amount of $1.2 million was paid off in early October.
WEST COAST BANCORP REPORTS THIRD QUARTER 2011 RESULTS
October 28, 2011
Page 12 of 17
As indicated in Table 14 below, the Company’s OREO property disposition activities continued at a steady pace in the third quarter of 2011, while the level of additional real estate properties taken into the OREO portfolio declined significantly from prior periods. During the third quarter 2011, the Company disposed of 74 OREO properties with a book value of $6.1 million while acquiring 16 properties with a book value of $1.7 million and recorded OREO valuation adjustments totaling $.7 million. The combination of these actions resulted in a $5.1 million decline in total OREO in the quarter. At September 30, 2011, the OREO portfolio consisted of 308 properties with a book value of $30.2 million. The OREO balance at September 30, 2011, reflected write-downs totaling 52% from original loan principal which was similar to a year ago. The largest balances in the OREO portfolio at third quarter end were attributable to income-producing properties followed by homes and residential site development projects, all of which are located within our footprint.
|
Table 14
|
||||||||||||||||||||||||||||||||||||||||
|
OTHER REAL ESTATE OWNED ACTIVITY
|
||||||||||||||||||||||||||||||||||||||||
|
(Dollars in thousands)
|
Q3 2011 | Q2 2011 | Q1 2011 | Q4 2010 | Q3 2010 | |||||||||||||||||||||||||||||||||||
|
Amount
|
# |
Amount
|
# |
Amount
|
# |
Amount
|
# |
Amount
|
# | |||||||||||||||||||||||||||||||
|
Beginning balance
|
$ | 35,374 | 366 | $ | 39,329 | 399 | $ | 39,459 | 402 | $ | 35,814 | 448 | $ | 37,578 | 446 | |||||||||||||||||||||||||
|
Additions to OREO
|
1,672 | 16 | 4,270 | 18 | 6,479 | 25 | 11,053 | 35 | 5,119 | 53 | ||||||||||||||||||||||||||||||
|
Dispositions of OREO
|
(6,116 | ) | (74 | ) | (6,670 | ) | (51 | ) | (5,952 | ) | (28 | ) | (5,886 | ) | (81 | ) | (5,372 | ) | (51 | ) | ||||||||||||||||||||
|
OREO valuation adj.
|
(696 | ) | - | (1,555 | ) | - | (657 | ) | - | (1,522 | ) | - | (1,511 | ) | - | |||||||||||||||||||||||||
|
Ending balance
|
$ | 30,234 | 308 | $ | 35,374 | 366 | $ | 39,329 | 399 | $ | 39,459 | 402 | $ | 35,814 | 448 | |||||||||||||||||||||||||
|
Table 15
|
||||||||||||||||||||||||
|
OTHER REAL ESTATE OWNED BY PROPERTY TYPE
|
||||||||||||||||||||||||
|
(Dollars in thousands)
|
Sept. 30,
|
# of
|
Sept. 30,
|
# of
|
June 30,
|
# of
|
||||||||||||||||||
|
2011
|
properties
|
2010
|
properties
|
2011
|
properties
|
|||||||||||||||||||
|
Income producing properties
|
$ | 8,139 | 14 | $ | 3,212 | 7 | $ | 9,237 | 14 | |||||||||||||||
|
Homes
|
6,329 | 27 | 15,341 | 66 | 10,108 | 43 | ||||||||||||||||||
|
Residential site developments
|
4,877 | 176 | 8,096 | 281 | 5,912 | 215 | ||||||||||||||||||
|
Land
|
3,762 | 10 | 3,525 | 10 | 4,052 | 11 | ||||||||||||||||||
|
Lots
|
3,175 | 54 | 4,062 | 61 | 3,126 | 52 | ||||||||||||||||||
|
Condominiums
|
3,131 | 17 | 881 | 12 | 1,900 | 14 | ||||||||||||||||||
|
Multifamily
|
455 | 4 | 697 | 11 | 673 | 11 | ||||||||||||||||||
|
Commercial site developments
|
366 | 6 | - | - | 366 | 6 | ||||||||||||||||||
|
Total
|
$ | 30,234 | 308 | $ | 35,814 | 448 | $ | 35,374 | 366 | |||||||||||||||
Other
The Company will hold a Webcast conference call Friday, October 28, 2011, at 11:00 a.m. Pacific Time, during which the Company will discuss third 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 “3rd Quarter 2011 Earnings Conference Call” tab. The conference call may also be accessed by dialing (877) 247-4281 Conference ID#: 15209345 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 THIRD QUARTER 2011 RESULTS
October 28, 2011
Page 13 of 17
West Coast Bancorp is a publicly held, Northwest bank holding company headquartered in Oregon with $2.5 billion in assets, and the parent company of West Coast Bank and West Coast Trust Company, Inc. West Coast Bank operates 65 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.
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, as well as (iii) 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 THIRD QUARTER 2011 RESULTS
October 28, 2011
Page 14 of 17
|
Table 16
|
||||||||||||||||||||||||||||
|
INCOME STATEMENT
|
||||||||||||||||||||||||||||
|
(Dollars in thousands)
|
Q3 | Q3 |
Change
|
Q2 |
Year-to-date
|
Year-to-date
|
||||||||||||||||||||||
| 2011 | 2010 | $ | % | 2011 | 2011 | 2010 | ||||||||||||||||||||||
|
Net interest income
|
||||||||||||||||||||||||||||
|
Interest and fees on loans
|
$ | 20,060 | $ | 21,800 | $ | (1,740 | ) | -8 | % | $ | 20,231 | $ | 60,590 | $ | 67,059 | |||||||||||||
|
Interest on investment securities
|
4,626 | 4,160 | 466 | 11 | % | 4,811 | 13,985 | 12,604 | ||||||||||||||||||||
|
Other interest income
|
35 | 93 | (58 | ) | -62 | % | 62 | 168 | 404 | |||||||||||||||||||
|
Total interest income
|
24,721 | 26,053 | (1,332 | ) | -5 | % | 25,104 | 74,743 | 80,067 | |||||||||||||||||||
|
Interest expense on deposit accounts
|
986 | 2,553 | (1,567 | ) | -61 | % | 1,476 | 4,271 | 10,121 | |||||||||||||||||||
|
Interest on borrowings and subordinated debentures
|
1,619 | 1,625 | (6 | ) | 0 | % | 1,667 | 4,883 | 6,202 | |||||||||||||||||||
|
Borrowings prepayment charge
|
2,775 | - | 2,775 | 100 | % | - | 2,775 | 2,326 | ||||||||||||||||||||
|
Total interest expense
|
5,380 | 4,178 | 1,202 | 29 | % | 3,143 | 11,929 | 18,649 | ||||||||||||||||||||
|
Net interest income
|
19,341 | 21,875 | (2,534 | ) | -12 | % | 21,961 | 62,814 | 61,418 | |||||||||||||||||||
|
Provision for credit losses
|
1,132 | 1,567 | (435 | ) | -28 | % | 3,426 | 6,634 | 16,959 | |||||||||||||||||||
|
Noninterest income
|
||||||||||||||||||||||||||||
|
Service charges on deposit accounts
|
3,129 | 4,145 | (1,016 | ) | -25 | % | 3,575 | 10,348 | 11,954 | |||||||||||||||||||
|
Payment systems related revenue
|
3,201 | 2,998 | 203 | 7 | % | 3,169 | 9,300 | 8,409 | ||||||||||||||||||||
|
Trust and investment services revenues
|
1,033 | 978 | 55 | 6 | % | 1,208 | 3,389 | 3,124 | ||||||||||||||||||||
|
Gains on sales of loans
|
222 | 182 | 40 | 22 | % | 300 | 1,035 | 629 | ||||||||||||||||||||
|
Net OREO valuation adjustments
|
||||||||||||||||||||||||||||
|
and gains (losses) on sales
|
(11 | ) | (962 | ) | 951 | 99 | % | (910 | ) | (1,255 | ) | (3,229 | ) | |||||||||||||||
|
Other-than-temporary impairment losses
|
- | - | - | - | (179 | ) | (179 | ) | - | |||||||||||||||||||
|
Gain on sales of securities
|
124 | - | 124 | 100 | % | 130 | 521 | 945 | ||||||||||||||||||||
|
Other
|
716 | 728 | (12 | ) | -2 | % | 777 | 2,241 | 2,270 | |||||||||||||||||||
|
Total noninterest income
|
8,414 | 8,069 | 345 | 4 | % | 8,070 | 25,400 | 24,102 | ||||||||||||||||||||
|
Noninterest expense
|
||||||||||||||||||||||||||||
|
Salaries and employee benefits
|
11,977 | 11,836 | 141 | 1 | % | 12,119 | 35,973 | 34,333 | ||||||||||||||||||||
|
Equipment
|
1,461 | 1,525 | (64 | ) | -4 | % | 1,564 | 4,553 | 4,707 | |||||||||||||||||||
|
Occupancy
|
2,115 | 2,216 | (101 | ) | -5 | % | 2,232 | 6,512 | 6,649 | |||||||||||||||||||
|
Payment systems related expense
|
1,279 | 1,214 | 65 | 5 | % | 1,350 | 3,876 | 3,430 | ||||||||||||||||||||
|
Professional fees
|
1,038 | 1,147 | (109 | ) | -10 | % | 976 | 2,996 | 3,169 | |||||||||||||||||||
|
Postage, printing and office supplies
|
772 | 791 | (19 | ) | -2 | % | 862 | 2,444 | 2,332 | |||||||||||||||||||
|
Marketing
|
862 | 861 | 1 | 0 | % | 831 | 2,344 | 2,286 | ||||||||||||||||||||
|
Communications
|
387 | 374 | 13 | 3 | % | 389 | 1,154 | 1,137 | ||||||||||||||||||||
|
Other noninterest expense
|
2,729 | 3,039 | (310 | ) | -10 | % | 2,635 | 8,279 | 8,964 | |||||||||||||||||||
|
Total noninterest expense
|
22,620 | 23,003 | (383 | ) | -2 | % | 22,958 | 68,131 | 67,007 | |||||||||||||||||||
|
Income before income taxes
|
4,003 | 5,374 | (1,371 | ) | 26 | % | 3,647 | 13,449 | 1,554 | |||||||||||||||||||
|
Benefit for income taxes
|
(2,273 | ) | (676 | ) | (1,597 | ) | 236 | % | (987 | ) | (2,566 | ) | 241 | |||||||||||||||
|
Net income
|
$ | 6,276 | $ | 6,050 | $ | 226 | -4 | % | $ | 4,634 | $ | 16,015 | $ | 1,313 | ||||||||||||||
|
Net income per share:
|
||||||||||||||||||||||||||||
|
Basic
|
$ | 0.31 | $ | 0.30 | $ | 0.01 | $ | 0.23 | $ | 0.78 | $ | 0.07 | ||||||||||||||||
|
Diluted
|
$ | 0.29 | $ | 0.29 | $ | - | $ | 0.22 | $ | 0.75 | $ | 0.06 | ||||||||||||||||
|
Weighted average common shares
|
19,029 | 18,955 | 74 | 19,006 | 18,999 | 16,955 | ||||||||||||||||||||||
|
Weighted average diluted shares
|
21,124 | 20,629 | 495 | 20,025 | 21,254 | 20,200 | ||||||||||||||||||||||
|
Tax equivalent net interest income
|
$ | 19,628 | $ | 22,163 | $ | (2,535 | ) | $ | 22,249 | $ | 63,647 | $ | 62,322 | |||||||||||||||
WEST COAST BANCORP REPORTS THIRD QUARTER 2011 RESULTS
October 28, 2011
Page 15 of 17
|
Table 17
|
||||||||||||||||||||
|
BALANCE SHEETS
|
||||||||||||||||||||
|
(Dollars in thousands)
|
Sept. 30,
|
Sept. 30,
|
Change
|
June 30,
|
||||||||||||||||
|
2011
|
2010
|
$ | % | 2011 | ||||||||||||||||
|
Assets:
|
||||||||||||||||||||
|
Cash and due from banks
|
$ | 57,442 | $ | 57,216 | $ | 226 | 0 | % | $ | 54,296 | ||||||||||
|
Federal funds sold
|
2,102 | 4,605 | (2,503 | ) | -54 | % | 2,367 | |||||||||||||
|
Interest-bearing deposits in other banks
|
47,734 | 113,144 | (65,410 | ) | -58 | % | 33,583 | |||||||||||||
|
Total cash and cash equivalents
|
107,278 | 174,965 | (67,687 | ) | -39 | % | 90,246 | |||||||||||||
|
Investment securities
|
823,458 | 640,074 | 183,384 | 29 | % | 760,704 | ||||||||||||||
|
Total loans
|
1,503,624 | 1,575,451 | (71,827 | ) | -5 | % | 1,521,147 | |||||||||||||
|
Allowance for loan losses
|
(36,314 | ) | (41,753 | ) | 5,439 | 13 | % | (38,422 | ) | |||||||||||
|
Loans, net
|
1,467,310 | 1,533,698 | (66,388 | ) | -4 | % | 1,482,725 | |||||||||||||
|
Total interest earning assets
|
2,379,614 | 2,335,882 | 43,732 | 2 | % | 2,319,332 | ||||||||||||||
|
OREO, net
|
30,234 | 35,814 | (5,580 | ) | -16 | % | 35,374 | |||||||||||||
|
Other assets
|
92,967 | 101,828 | (8,861 | ) | -9 | % | 93,507 | |||||||||||||
|
Total assets
|
$ | 2,521,247 | $ | 2,486,379 | $ | 34,868 | 1 | % | $ | 2,462,556 | ||||||||||
|
Liabilities and Stockholders' Equity:
|
||||||||||||||||||||
|
Demand
|
$ | 649,326 | $ | 565,543 | $ | 83,783 | 15 | % | $ | 599,020 | ||||||||||
|
Savings and interest-bearing demand
|
502,586 | 442,892 | 59,694 | 13 | % | 465,779 | ||||||||||||||
|
Money market
|
651,904 | 675,402 | (23,498 | ) | -3 | % | 658,185 | |||||||||||||
|
Time deposits
|
186,962 | 291,218 | (104,256 | ) | -36 | % | 208,013 | |||||||||||||
|
Total deposits
|
1,990,778 | 1,975,055 | 15,723 | 1 | % | 1,930,997 | ||||||||||||||
|
Borrowings and subordinated debentures
|
209,099 | 215,199 | (6,100 | ) | -3 | % | 219,599 | |||||||||||||
|
Reserve for unfunded commitments
|
702 | 865 | (163 | ) | -19 | % | 809 | |||||||||||||
|
Other liabilities
|
23,801 | 20,553 | 3,248 | 16 | % | 25,582 | ||||||||||||||
|
Total liabilities
|
2,224,380 | 2,211,672 | 12,708 | 1 | % | 2,176,987 | ||||||||||||||
|
Stockholders' equity
|
296,867 | 274,707 | 22,160 | 8 | % | 285,569 | ||||||||||||||
|
Total liabilities and stockholders' equity
|
$ | 2,521,247 | $ | 2,486,379 | $ | 34,868 | 1 | % | $ | 2,462,556 | ||||||||||
WEST COAST BANCORP REPORTS THIRD QUARTER 2011 RESULTS
October 28, 2011
Page 16 of 17
|
Table 18
|
||||||||||||||||||||||||||||||||
|
PERIOD END LOANS
|
||||||||||||||||||||||||||||||||
|
(Dollars in thousands)
|
September 30,
|
% of
|
September 30,
|
% of
|
Change
|
June 30,
|
% of
|
|||||||||||||||||||||||||
|
2011
|
Total
|
2010
|
total
|
Amount
|
%
|
2011
|
Total
|
|||||||||||||||||||||||||
|
Commercial loans
|
$ | 296,335 | 19% | $ | 317,037 | 20% | $ | (20,702 | ) | -7% | $ | 297,817 | 20% | |||||||||||||||||||
|
Commercial real estate construction
|
12,859 | 1% | 17,933 | 1% | (5,074 | ) | -28% | 17,024 | 1% | |||||||||||||||||||||||
|
Residential real estate construction
|
13,167 | 1% | 39,955 | 3% | (26,788 | ) | -67% | 15,410 | 1% | |||||||||||||||||||||||
|
Total real estate construction loans
|
26,026 | 2% | 57,888 | 4% | (31,862 | ) | -55% | 32,434 | 2% | |||||||||||||||||||||||
|
Mortgage
|
59,388 | 4% | 71,446 | 5% | (12,058 | ) | -17% | 62,244 | 4% | |||||||||||||||||||||||
|
Nonstandard mortgage
|
9,945 | 1% | 13,294 | 1% | (3,349 | ) | -25% | 10,464 | 1% | |||||||||||||||||||||||
|
Home equity
|
261,457 | 17% | 272,132 | 17% | (10,675 | ) | -4% | 264,016 | 17% | |||||||||||||||||||||||
|
Total real estate mortgage
|
330,790 | 22% | 356,872 | 23% | (26,082 | ) | -7% | 336,724 | 22% | |||||||||||||||||||||||
|
Commercial real estate loans
|
836,752 | 56% | 827,668 | 52% | 9,084 | 1% | 839,665 | 55% | ||||||||||||||||||||||||
|
Installment and other consumer loans
|
13,721 | 1% | 15,986 | 1% | (2,265 | ) | -14% | 14,507 | 1% | |||||||||||||||||||||||
|
Total loans
|
$ | 1,503,624 | $ | 1,575,451 | $ | (71,827 | ) | -5% | $ | 1,521,147 | ||||||||||||||||||||||
|
Table 19
|
||||||||||||||||||||
|
AVERAGE BALANCE SHEETS
|
||||||||||||||||||||
|
(Dollars in thousands)
|
Q3 | Q3 | Q2 |
Year to date
|
Year to date
|
|||||||||||||||
| 2011 | 2010 | 2011 | 2011 | 2010 | ||||||||||||||||
|
Cash and due from banks
|
$ | 54,156 | $ | 50,087 | $ | 52,273 | $ | 51,729 | $ | 48,279 | ||||||||||
|
Federal funds sold
|
3,275 | 4,379 | 4,790 | 4,001 | 6,935 | |||||||||||||||
|
Interest-bearing deposits in other banks
|
49,918 | 138,503 | 93,225 | 83,104 | 204,604 | |||||||||||||||
|
Total cash and cash equivalents
|
107,349 | 192,969 | 150,288 | 138,834 | 259,818 | |||||||||||||||
|
Investment securities
|
782,324 | 640,216 | 698,116 | 718,362 | 592,391 | |||||||||||||||
|
Total loans
|
1,515,091 | 1,586,849 | 1,523,170 | 1,522,465 | 1,644,509 | |||||||||||||||
|
Allowance for loan losses
|
(38,529 | ) | (42,917 | ) | (38,944 | ) | (39,250 | ) | (41,934 | ) | ||||||||||
|
Loans, net
|
1,476,562 | 1,543,932 | 1,484,226 | 1,483,215 | 1,602,575 | |||||||||||||||
|
Total interest earning assets
|
2,351,828 | 2,372,072 | 2,319,980 | 2,328,943 | 2,449,722 | |||||||||||||||
|
Other assets
|
120,972 | 125,273 | 127,895 | 125,734 | 151,134 | |||||||||||||||
|
Total assets
|
$ | 2,487,207 | $ | 2,502,390 | $ | 2,460,525 | $ | 2,466,145 | $ | 2,605,918 | ||||||||||
|
Demand
|
$ | 615,956 | $ | 550,695 | $ | 578,562 | $ | 582,482 | $ | 531,276 | ||||||||||
|
Savings and interest-bearing demand
|
478,333 | 443,982 | 476,090 | 468,376 | 433,434 | |||||||||||||||
|
Money market
|
661,871 | 667,150 | 654,668 | 659,075 | 655,823 | |||||||||||||||
|
Time deposits
|
196,807 | 336,678 | 224,674 | 229,908 | 424,724 | |||||||||||||||
|
Total deposits
|
1,952,967 | 1,998,505 | 1,933,994 | 1,939,841 | 2,045,257 | |||||||||||||||
|
Borrowings and subordinated debentures
|
220,354 | 215,199 | 219,599 | 219,854 | 280,540 | |||||||||||||||
|
Total interest bearing liabilities
|
1,557,365 | 1,663,009 | 1,575,031 | 1,577,213 | 1,794,521 | |||||||||||||||
|
Other liabilities
|
22,779 | 17,164 | 24,331 | 23,835 | 17,839 | |||||||||||||||
|
Stockholders' equity
|
291,107 | 271,522 | 282,601 | 282,615 | 262,282 | |||||||||||||||
|
Total liabilities and stockholders' equity
|
$ | 2,487,207 | $ | 2,502,390 | $ | 2,460,525 | $ | 2,466,145 | $ | 2,605,918 | ||||||||||
WEST COAST BANCORP REPORTS THIRD QUARTER 2011 RESULTS
October 28, 2011
Page 17 of 17
The following table presents information about the Company’s total performing delinquent loans.
|
Table 20
|
||||||||||||
|
DELINQUENT LOANS 30-89 DAYS PAST DUE AS A % OF LOAN CATEGORY
|
||||||||||||
|
(Dollars in thousands)
|
September 30,
|
September 30,
|
June 30,
|
|||||||||
|
2011
|
2010
|
2011
|
||||||||||
|
Commercial loans
|
0.21 | % | 0.36 | % | 0.64 | % | ||||||
|
Real estate construction loans
|
0.00 | % | 0.00 | % | 0.00 | % | ||||||
|
Real estate mortgage loans
|
0.20 | % | 0.43 | % | 0.38 | % | ||||||
|
Commercial real estate loans
|
0.50 | % | 0.34 | % | 0.80 | % | ||||||
|
Installment and other consumer loans
|
0.64 | % | 0.25 | % | 0.05 | % | ||||||
|
Total delinquent loans 30-89 days past due
|
$ | 5,556 | $ | 5,502 | $ | 9,961 | ||||||
|
Delinquent loans to total loans
|
0.37 | % | 0.35 | % | 0.65 | % | ||||||
The following table presents information regarding common shares outstanding at September 30, 2011 on an actual and diluted basis.
|
Table 21
|
||||
|
COMMON SHARE AND DILUTIVE SHARE INFORMATION
|
||||
|
(Shares in thousands, restated for reverse stock split)
|
||||
|
Number
|
||||
|
of shares
|
||||
|
Common shares outstanding at September 30, 2011
|
19,303 | |||
|
Common shares issuable on conversion of series B preferred stock 1
|
1,213 | |||
|
Dilutive impact of warrants 2 3
|
833 | |||
|
Dilutive impact of stock options and restricted stock 3
|
49 | |||
|
Total potential dilutive shares 4
|
21,398 | |||
|
1 121,328 shares of series B preferred stock outstanding at September 30, 2011.
|
||||||
|
2 Warrants to purchase 240,000 common shares at a price of $100 per series B preferred share outstanding at September 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 $15.31 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.
|