Exhibit 99.1

 

	For more information, contact
Final	Robert D. Sznewajs
	President & CEO
	(503) 598-3243
	Anders Giltvedt
	Executive Vice President & CFO
	(503) 598-3250

  

West Coast Bancorp First Quarter 2012 Net Income of $5.8 Million Increases by
13% From First Quarter of 2011

 

·

Return on average assets was .98% in the first quarter 2012, an increase from .84% in the same quarter last year.

 

·

Pre-tax income of $8.9 million in the first quarter 2012 increased 54% from $5.8 million in the same quarter last year.

 

·

Efficiency ratio improved to 69.7% in first quarter of 2012 from 74.1% in the same quarter of 2011.

 

·

Provision for credit losses of $ .1 million in the first quarter of 2012 declined from $2.1 million in the same quarter last year.

  

Lake Oswego, OR – April 23, 2012 – 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 $5.8 million or $.27 per diluted share for the first quarter of 2012 compared to net income of $5.1 million or $.24 per diluted share in the same quarter of 2011.

  

“Net income of $5.8 million for the quarter ended March 31, 2012, represented a 13% improvement from the same period a year ago,” said Robert D. Sznewajs, President and Chief Executive Officer. The improved operating results primarily reflect the impact of cost reduction actions taken in 2011 and the reduction in the provision for credit losses in the current period compared to first quarter of 2011. The Company’s return on average assets continues to improve, reaching .98 % in the first quarter of 2012 compared to .84 % in the same period in 2011.”

  

 

WEST COAST BANCORP REPORTS FIRST QUARTER 2012 RESULTS 

April 23, 2012

Page 2 of 16

 

Table 1 below shows summary financial information for the quarters ended March 31, 2012, and 2011, and December 31, 2011. Net income for the quarter ended December 31, 2011, reflected the benefit from the reversal of the Company’s deferred tax asset valuation allowance in the fourth quarter of 2011.

 

Table 1

SUMMARY FINANCIAL INFORMATION

 

		Qtr. ended				Qtr. ended								Qtr. ended
		March 31,				March 31,								Dec. 31,
(Dollars and shares in thousands)		2012				2011				Change				2011				Change
Net income		$	5,789			$	5,105			$	684			$	17,762			$	(11,973	)
Net income available to common stockholders 1		$	5,393			$	4,740			$	653			$	16,532				(11,139	)
Selective quarterly performance ratios
Return on average assets, annualized			0.98	%			0.84	%			0.14				2.88	%			-1.90	%
Return on average equity, annualized			7.34	%			7.56	%			(0.22	)			23.68	%			-16.34	%
Efficiency ratio2			69.76	%			74.14	%			(4.38	)			93.02	%			-23.26	%
Share and Per Share Figures-Actual
Common shares outstanding at period end			19,295				19,283				12				19,298				(3	)
Weighted average diluted shares3			21,348				21,246				102				21,175				173
Weighted average diluted shares-two class method 4			20,054				19,939				115				19,911				143
Net income per diluted share		$	0.27			$	0.24			$	0.03			$	0.83			$	(0.56	)
Book value per common share		$	15.54			$	13.27			$	2.27			$	15.20			$	0.34

 

1

Adjusted for the impact of allocating net income to participating instruments, restricted stock and Series B preferred stock.

2

The efficiency ratio has been computed as noninterest expense divided by the sum of net interest income on a tax equivalent basis and noninterest income excluding gains/losses on sales of securities.

3

Reflects the average dilutive impacts of Series B preferred stock (1,213), warrants (995), options (21), and restricted stock (81).

4

Reflects the calculation of diluted shares under the two-class method which includes average common (19,038), options (21), and warrants (995).

 

Balance Sheet Overview

 

First quarter 2012 average total loan balances of $1.48 billion declined $47 million or 3% from same quarter of 2011. The decline was principally as a result of continued loan payoffs prior to maturity, reflecting the effect of the current interest rate environment and economic conditions. Modest growth in the commercial real estate loan category was more than offset by declines in commercial, residential real estate construction and mortgage loan categories. Total average loans declined 1% or $16 million from fourth quarter 2011.

 

Yield on total loans of 5.20% declined 18 basis points year-over-year first quarter as higher yielding loans paid off and new loan originations were at lower yields reflecting current market interest rates. The yield on total average loans was nearly unchanged from the prior quarter.

 

 

WEST COAST BANCORP REPORTS FIRST QUARTER 2012 RESULTS 

April 23, 2012 

Page 3 of 16 

 

Table 2

AVERAGE LOANS FOR THE QUARTER 

 

(Dollars in thousands)		March 31,				% of				March 31,				% of				Change								December 31,				% of
		2012				Total				2011				total				Amount				%				2011				Total
Commercial loans		$	288,395				19	%		$	304,704				20	%		$	(16,309	)			-5	%		$	293,583				20	%
Commercial real estate construction			18,547				1	%			17,509				1	%			1,038				6	%			14,730				1	%
Residential real estate construction			12,680				1	%			22,698				1	%			(10,018	)			-44	%			13,613				1	%
Total real estate construction loans			31,227				2	%			40,207				2	%			(8,980	)			-22	%			28,343				2	%
Mortgage			66,125				5	%			78,366				5	%			(12,241	)			-16	%			67,579				5	%
Home equity			254,883				17	%			266,846				18	%			(11,963	)			-4	%			260,849				17	%
Total real estate mortgage			321,008				22	%			345,212				23	%			(24,204	)			-7	%			328,428				22	%
Commercial real estate loans			828,681				56	%			823,818				54	%			4,863				1	%			834,362				55	%
Installment and other consumer loans			13,211				1	%			15,349				1	%			(2,138	)			-14	%			13,721				1	%
Total loans		$	1,482,522							$	1,529,290							$	(46,768	)			-3	%		$	1,498,437
Yield on loans			5.20	%							5.38	%							(0.18	)							5.19	%

  

The 2012 first quarter average balance of total cash equivalents and investment securities of $748 million declined $36 million or 5% from the first quarter of 2011; however, the Company’s liquidity position remained solid. The Company reduced its average cash equivalents balance by $73 million in the first quarter of 2012 from the same quarter of 2011 while increasing its investment securities portfolio by $37 million in an effort to improve its net interest income and margin. Over the past year, the Company has increased its investments in U.S. government agency, U.S government agency mortgage-backed, and municipal securities. The purchases consisted principally of U.S. government agency securities with 3-5-year maturities and 10- and 15-year fully amortizing U.S. government agency mortgage-backed securities. The expected duration of the investment portfolio was approximately 2.6 years at March 31, 2012, compared to approximately 3.1 years at March 31, 2011.

  

The 2012 first quarter yield on total cash equivalents and investment securities balance was 2.36%, a decline of 16 basis points from the same quarter of 2011. This reflected the investment securities purchases over the past twelve months at yields lower than those in the existing portfolio. The yield did increase 12 basis points from the fourth quarter of 2011 due to lower accelerated premium amortization on mortgage-backed securities during the most recent quarter, offsetting the declining yield on the remaining investment portfolio.

 

 

WEST COAST BANCORP REPORTS FIRST QUARTER 2012 RESULTS 

April 23, 2012 

Page 4 of 16 

  

Table 3

AVERAGE CASH EQUIVALENTS AND INVESTMENT SECURITIES FOR THE QUARTER 

 

(Dollars in thousands)		March 31,				March 31,				Change								December 31,
		2012				2011				Amount				%				2011
Cash equivalents:
Federal funds sold		$	2,601			$	3,947			$	(1,346	)			-34	%		$	3,184
Interest-bearing deposits in other banks			35,334				106,794				(71,460	)			-67	%			20,530
Total cash equivalents			37,935				110,741				(72,806	)			-66	%			23,714
Investment securities:
U.S. Treasury securities			202				10,774				(10,572	)			-98	%			204
U.S. Government Agency securities			213,035				183,419				29,616				16	%			254,030
Corporate securities			8,507				9,397				(890	)			-9	%			8,854
Mortgage-backed securities			414,198				404,143				10,055				2	%			445,422
Obligations of state and political sub.			61,337				53,189				8,148				15	%			62,712
Equity investments and other securities			12,721				12,527				194				2	%			12,726
Total investment securities			710,000				673,449				36,551				5	%			783,948
Total cash equivalents and investment securities		$	747,935			$	784,190			$	(36,255	)			-5	%		$	807,662
Tax equivalent yield on cash equivalents and investment securities			2.36	%			2.52	%			(0.16	)							2.24	%

 

First quarter 2012 average total deposits of $1.87 billion declined 3% or $66 million from the same period in 2011. During the most recent quarter, the Company continued to reduce higher cost time deposit balances which declined $102 million or 38% from the corresponding quarter in 2011. Time deposits represented 9% of the Company’s average total deposits in the most recent quarter compared to 14% during the same quarter of 2011.

 

 

WEST COAST BANCORP REPORTS FIRST QUARTER 2012 RESULTS 

April 23, 2012 

Page 5 of 16 

  

Table 4

AVERAGE DEPOSITS, BORROWINGS AND SUBORDINATED DEBENTURES FOR THE QUARTER 

 

(Dollars in thousands)		Q1				% of				Q1				% of				Change								Q4				% of
		2012				Total				2011				Total				Amount				%				2011				Total
Demand deposits		$	585,749				31	%		$	552,229				28	%		$	33,520				6	%		$	622,741				33	%
Interest-bearing demand			366,635				20	%			344,090				18	%			22,545				7	%			375,922				19	%
Total checking deposits			952,384				51	%			896,319				46	%			56,065				6	%			998,663				52	%
Savings			123,725				7	%			106,309				6	%			17,416				16	%			117,619				6	%
Money market			623,111				33	%			660,672				34	%			(37,561	)			-6	%			640,247				33	%
Total non-time deposits			1,699,220				91	%			1,663,300				86	%			35,920				2	%			1,756,529				91	%
Time deposits			167,418				9	%			269,038				14	%			(101,620	)			-38	%			179,288				9	%
Total deposits		$	1,866,638				100	%		$	1,932,338				100	%		$	(65,700	)			-3	%		$	1,935,817				100	%
Average rate on total deposits			0.12	%							0.38	%							(0.26	)							0.14	%
Average borrowings and subordinated debentures		$	171,505							$	219,599							$	(48,094	)			-22	%		$	189,635
Rate on borrowings and subordinated debentures 1			1.46	%							2.95	%							(1.49	)							1.94	%

 

¹ Excludes the impact of FHLB prepayment in Q4 2011.

  

Total average checking balances of $952 million in the first quarter of 2012 grew $56 million or 6% from the first quarter of 2011 and represented 51% 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 over the past year helped reduce the average rate paid on total deposits to .12% in the most recent quarter, a decline of 26 basis points from the same quarter in 2011 and a decline of two basis points from the fourth quarter of 2011.

 

In the second half of 2011, the Company elected to prepay its Federal Home Loan Bank (“FHLB”) term borrowings of $169 million and to enter into $120 million in new term borrowings with the FHLB in order to maintain its interest rate sensitivity position. The rate on the new term borrowings is 1.05%, a reduction from 3.17% on the amount prepaid. At March 31, 2012, the average duration of the new term borrowings was 2.6 years.

 

 

WEST COAST BANCORP REPORTS FIRST QUARTER 2012 RESULTS 

April 23, 2012 

Page 6 of 16

  

Capital Position

 

The Company continued to improve its capital position as a result of profitability and slightly lower total assets. As shown in Table 5 below, at March 31, 2012, the Company’s tier 1 and total risk-based capital ratios measured 20.34% and 21.60%, respectively, while its leverage ratio was 15.41%.

 

Table 5

CAPITAL RATIOS 

 

		March 31,				March 31,								December 31,
		2012				2011				Change				2011				Change
West Coast Bancorp
Tier 1 risk-based capital ratio			20.34	%			17.72	%			2.62				19.36	%			0.98
Total risk-based capital ratio			21.60	%			18.98	%			2.62				20.62	%			0.98
Leverage ratio			15.41	%			13.40	%			2.01				14.61	%			0.80
West Coast Bank
Tier 1 risk-based capital ratio			19.62	%			17.02	%			2.60				18.66	%			0.96
Total risk-based capital ratio			20.88	%			18.28	%			2.60				19.92	%			0.96
Leverage ratio			14.85	%			12.87	%			1.98				14.09	%			0.76

 

WEST COAST BANCORP REPORTS FIRST QUARTER 2012 RESULTS 

April 23, 2012 

Page 7 of 16

 

Operating Results

 

Pre-tax income in the first quarter of 2012 was $8.9 million, an increase of $3.1 million or 54% from the first quarter 2011. The improvement was the result of the favorable impact from the declines in provision for credit losses and noninterest expenses, which were partly offset by lower noninterest income. The Company recorded a provision for income taxes of $3.1 million in the most recent quarter, up from $.7 million in the same quarter last year, when the Company maintained a deferred tax asset valuation allowance. As shown in Table 6 below, first quarter 2012 net income of $5.8 million increased $.7 million or 13% from $5.1 million in the corresponding quarter of 2011.

 

Table 6

SUMMARY INCOME STATEMENT 

 

(Dollars in thousands)		Q1				Q1				Change								Q4				Change
		2012				2011				$				%				2011				$				%
Net interest income		$	22,133			$	21,512			$	621				3	%		$	17,940			$	4,193				23	%
Provision for credit losses			89				2,076				(1,987	)			-96	%			1,499				(1,410	)			-94	%
Noninterest income			7,887				8,916				(1,029	)			-12	%			6,419				1,468				23	%
Noninterest expense			21,025				22,553				(1,528	)			-7	%			22,744				(1,719	)			-8	%
Income before income taxes			8,906				5,799				3,107				54	%			116				8,790				7578	%
Provision (benefit) for income taxes			3,117				694				2,423				349	%			(17,646	)			20,763				118	%
Net income		$	5,789			$	5,105			$	684				13	%		$	17,762			$	(11,973	)			-67	%

  

First quarter 2012 net interest income of $22.1 million increased $.6 million from the same quarter in 2011. This was a result of the combined favorable effect from FHLB prepayments in 2011 and lower rates on interest-bearing deposits in the most recent quarter more than offsetting the unfavorable impact of lower loan balances and declining yield on earning assets. For the same reasons, the first quarter 2012 net interest margin of 4.04% increased 23 basis points from the corresponding quarter last year.

  

Table 7

NET INTEREST SPREAD AND MARGIN 

 

(Annualized, tax-equivalent basis)		Q1				Q1								Q41
		2012				2011				Change				2011				Change
Yield on average interest-earning assets			4.25	%			4.41	%			(0.16	)			4.16	%			0.09
Rate on average interest-bearing liabilities 1			0.33	%			0.86	%			(0.53	)			1.58	%			(1.25	)
Net interest spread			3.92	%			3.55	%			0.37				2.58	%			1.34
Net interest margin			4.04	%			3.81	%			0.23				3.13	%			0.91

 

¹ Fourth quarter 2011 rate on average interest-bearing liabilities includes 75 basis points of expense associated with the prepayment of FHLB borrowings. 

 

 

WEST COAST BANCORP REPORTS FIRST QUARTER 2012 RESULTS 

April 23, 2012 

Page 8 of 16 

 

As shown in Table 8 below, first quarter 2012 total noninterest income of $7.9 million declined $1.0 million from the same quarter of 2011, primarily due to the 23% or $.8 million decline in deposit service charges. This reduction in deposit service charges was principally caused by the ongoing impact related to the implementation of Federal Deposit Insurance Corporation’s (“FDIC”) guidance on overdraft protection programs. Compared to the fourth quarter of 2011, deposit service charges decreased $.2 million or 6%.

 

While payment systems-related revenues increased $.1 million or 5% from the first quarter of 2011, trust and investment services revenues declined $.2 million or 19% over the same period. The total net loss on OREO of $.6 million in the quarter ended March 31, 2012, increased from a $.3 million net loss in the first quarter 2011, but declined from $2.0 million in the fourth quarter of 2011. Gains on sales of loans grew $.2 million year-over-year in the first quarter as a result of increased sales of Small Business Administration loans. Excluding the total net loss on OREO, the Company’s noninterest income was substantially unchanged over the last two quarters.

 

Table 8

NONINTEREST INCOME 

 

(Dollars in thousands)		Q1				Q1				Change								Q4				Change
		2012				2011				$				%				2011				$				%
Noninterest income
Service charges on deposit accounts		$	2,818			$	3,644			$	(826	)			-23	%		$	3,005			$	(187	)			-6	%
Payment systems-related revenue			3,073				2,930				143				5	%			3,081				(8	)			0	%
Trust and investment services revenues			935				1,148				(213	)			-19	%			1,114				(179	)			-16	%
Gains on sales of loans			735				513				222				43	%			300				435				145	%
Gains on sales of securities			147				267				(120	)			-45	%			192				(45	)			-23	%
Other-than-temporary impairment losses			(49	)			-				(49	)			0	%			-				(49	)			0	%
Other			802				748				54				7	%			708				94				13	%
Total			8,461				9,250				(789	)			-9	%			8,400				61				1	%
OREO gains (losses) on sale			(53	)			323				(376	)			-116	%			(57	)			4				-7	%
OREO valuation adjustments			(521	)			(657	)			136				21	%			(1,924	)			1,403				73	%
Total net loss on OREO			(574	)			(334	)			(240	)			-72	%			(1,981	)			1,407				71	%
Total noninterest income		$	7,887			$	8,916			$	(1,029	)			-12	%		$	6,419			$	1,468				23	%

  

 

WEST COAST BANCORP REPORTS FIRST QUARTER 2012 RESULTS 

April 23, 2012 

Page 9 of 16 

 

As shown in Table 9 below, the Company’s total noninterest expense of $21.0 million in the first quarter of 2012 declined by $1.5 million or 7% from the same quarter in 2011. The efficiency ratio declined to 69.8% from 74.1% in first quarter of 2011. As a result of cost savings initiatives implemented in 2011, salaries and employee benefits declined $.4 million or 3%. The first quarter 2012 reduction in marketing expense of $.3 million compared to the corresponding quarter in 2011 was related to the Company’s introduction of a new consumer deposit product marketing strategy in 2012. Additionally, the other noninterest expense category declined $.8 million the first quarter of 2012 compared to the same period a year ago, with $.5 million of the decline resulting from a lower FDIC deposit insurance premium assessment.

 

Table 9

NONINTEREST EXPENSE 

 

(Dollars in thousands)		Q1				Q1				Change								Q4				Change
		2012				2011				$				%				2011				$				%
Noninterest expense
Salaries and employee benefits		$	11,478			$	11,877			$	(399	)			-3	%		$	12,614			$	(1,136	)			-9	%
Equipment			1,662				1,528				134				9	%			1,560				102				7	%
Occupancy			2,075				2,165				(90	)			-4	%			2,162				(87	)			-4	%
Payment systems-related expense			1,119				1,247				(128	)			-10	%			1,265				(146	)			-12	%
Professional fees			1,111				982				129				13	%			1,122				(11	)			-1	%
Postage, printing and office supplies			819				810				9				1	%			821				(2	)			0	%
Marketing			312				651				(339	)			-52	%			659				(347	)			-53	%
Communications			380				378				2				1	%			395				(15	)			-4	%
Other noninterest expense			2,069				2,915				(846	)			-29	%			2,146				(77	)			-4	%
Total noninterest expense		$	21,025			$	22,553			$	(1,528	)			-7	%		$	22,744			$	(1,719	)			-8	%

  

 

WEST COAST BANCORP REPORTS FIRST QUARTER 2012 RESULTS 

April 23, 2012 

Page 10 of 16 

 

Income Taxes

 

First quarter 2012 provision for income taxes was $3.1 million, an increase of $2.4 million from $.7 million in the same quarter of 2011. The first quarter 2012 provision for income taxes is the result of an effective tax rate of 35% on pre-tax income. The provision for taxes in the first quarter last year reflected the impact of the Company’s deferred tax asset valuation allowance at that time, which was subsequently fully reversed in the fourth quarter of 2011.

  

Credit Quality

 

The Company recorded a first quarter 2012 provision for credit losses of $.1 million, a significant decline from $2.1 million in the first quarter 2011 and $1.5 million in the previous quarter. First quarter 2012 net charge-offs of $1.4 million, or .39% of average loans on an annualized basis, declined from the corresponding quarter in 2011 and on a linked-quarter basis. As shown in the table below, net charge-offs declined across nearly every category. Net charge-offs in dollars and as a percentage of average loans in the most recent quarter represented the lowest level of quarterly net charge-off activity since the third quarter of 2007.

 

Table 10

ALLOWANCE FOR CREDIT LOSSES AND NET CHARGEOFFS

 

						Charge-offs as								Charge-offs as								Charge-offs as
(Dollars in thousands)		Q1				a % of average				Q1				a % of average				Q4				a % of average
		2012				loan balance				2011				loan balance				2011				loan balance
Allowance for credit losses, beginning of period		$	35,983							$	41,067							$	37,016
Total provision for credit losses			89								2,076								1,499
Loan net charge-offs:
Commercial			(5	)			0.00	%			263				0.09	%			292				0.10	%
Commercial real estate construction			-				0.00	%			65				0.37	%			48				0.33	%
Residential real estate construction			1				0.00	%			311				1.37	%			140				1.03	%
Total real estate construction			1				0.00	%			376				0.94	%			188				0.66	%
Mortgage			534				0.81	%			520				0.66	%			177				0.26	%
Home equity			542				0.21	%			853				0.32	%			723				0.28	%
Total real estate mortgage			1,076				0.34	%			1,373				0.40	%			900				0.27	%
Commercial real estate			41				0.00	%			326				0.04	%			812				0.10	%
Installment and consumer			165				1.25	%			168				1.09	%			119				0.87	%
Overdraft			160				0.00	%			208				0.00	%			221				0.00	%
Total loan net charge-offs			1,438				0.10	%			2,714				0.18	%			2,532				0.17	%
Total allowance for credit losses		$	34,634							$	40,429							$	35,983
Components of allowance for credit losses:
Allowance for loan losses		$	33,854							$	39,692							$	35,212
Reserve for unfunded commitments			780								737								771
Total allowance for credit losses		$	34,634							$	40,429							$	35,983
Net loan charge-offs to average loans (annualized)			0.39	%							0.72	%							0.67	%
Allowance for loan losses to total loans			2.30	%							2.58	%							2.35	%
Allowance for credit losses to total loans			2.35	%							2.63	%							2.40	%
Allowance for loan losses to nonperforming loans			80	%							74	%							87	%
Allowance for credit losses to nonperforming loans			82	%							75	%							89	%

  

  

WEST COAST BANCORP REPORTS FIRST QUARTER 2012 RESULTS 

April 23, 2012 

Page 11 of 16 

 

The allowance for credit losses was $34.6 million or 2.35% of total loans at March 31, 2012, compared to an allowance for credit losses of $40.4 million or 2.63% of total loans a year earlier and $36.0 million or 2.40% of total loans at year end 2011. The decline in the allowance for credit losses relative to total loans reflected the improving trend in the overall risk profile of the loan portfolio. The allowance for credit losses declined largely due to lower overall loan balances as well as additional impaired loans moving from the general valuation allowance to individually being measured for impairment. The allowance for credit losses relative to nonperforming loans increased from 75% a year ago to 82% at March 31, 2012. The Company’s estimate of an appropriate allowance for credit losses will continue to be closely related to the loan portfolio’s credit quality performance trends and the region’s economic conditions.

 

Total nonperforming assets at March 31, 2012, were $69.7 million or 2.9% of total assets compared to $93.3 million or 3.8% of total assets a year ago and $71.4 million or 2.9% at year end 2011.

 

Table 11

NONPERFORMING ASSETS 

 

(Dollars in thousands)		Mar. 31,				Dec. 31,				Sept. 30,				June 30,				Mar. 31,
		2012				2011				2011				2011				2011
Loans on nonaccrual status:
Commercial		$	6,482			$	7,750			$	9,987			$	9,280			$	12,803
Real estate construction:
Commercial real estate construction			3,749				3,750				3,886				4,357				4,032
Residential real estate construction			1,981				2,073				3,311				3,439				4,093
Total real estate construction			5,730				5,823				7,197				7,796				8,125
Real estate mortgage:
Mortgage			10,744				9,624				10,877				11,527				12,165
Home equity			2,528				2,325				3,285				2,755				1,426
Total real estate mortgage			13,272				11,949				14,162				14,282				13,591
Commercial real estate			16,648				15,070				21,513				19,263				19,424
Installment and consumer			1				5				6				1				-
Total nonaccrual loans			42,133				40,597				52,865				50,622				53,943
90 days past due not on nonaccrual			-				-				-				-				-
Total nonperforming loans			42,133				40,597				52,865				50,622				53,943
Other real estate owned			27,525				30,823				30,234				35,374				39,329
Total nonperforming assets		$	69,658			$	71,420			$	83,099			$	85,996			$	93,272
Nonperforming loans to total loans			2.86	%			2.70	%			3.52	%			3.33	%			3.51	%
Nonperforming assets to total assets			2.89	%			2.94	%			3.30	%			3.49	%			3.80	%
Total delinquent loans 30-89 days past due		$	4,095			$	4,273			$	5,556			$	9,961			$	4,901
Delinquent loans to total loans			0.28	%			0.28	%			0.37	%			0.65	%			0.32	%

  

Over the past twelve months, total nonaccrual loans declined $11.8 million or 22% to $42.1 million at March 31, 2012, with declines centered in commercial, residential real estate construction, and commercial real estate categories. Home equity nonaccrual loans increased over the same period, reflecting the continued pressures on the residential real estate market over the past year and high level of unemployment.

 

 

WEST COAST BANCORP REPORTS FIRST QUARTER 2012 RESULTS 

April 23, 2012 

Page 12 of 16

 

As indicated in Table 12 below, during the quarter the Company disposed of 27 OREO properties with a book value of $3.6 million while acquiring 9 properties with a book value of less than $1 million and recording OREO valuation adjustments totaling $.5 million. The combination of these actions resulted in a $3.3 million or 11% net reduction in total OREO in first quarter of 2012 from year end 2011. The OREO balance reflected write-downs of 54% from original loan principal, an increase from 48% a year ago. The largest balance in the OREO portfolio at March 31, 2012, was in the income-producing properties category followed by homes and land, all of which are located within the Company’s footprint.

 

Table 12

OTHER REAL ESTATE OWNED ACTIVITY 

 

(Dollars in thousands)		Q1 2012								Q1 2011								Q4 2011
		Amount				#				Amount				#				Amount				#
Beginning balance		$	30,823				264			$	39,459				402			$	30,234				308
Additions to OREO			810				9				6,479				25				9,241				15
Dispositions of OREO			(3,587	)			(27	)			(5,952	)			(28	)			(6,728	)			(59	)
OREO valuation adjustment			(521	)			-				(657	)			-				(1,924	)			-
Ending balance		$	27,525				246			$	39,329				399			$	30,823				264

  

Table 13

OTHER REAL ESTATE OWNED BY PROPERTY TYPE 

 

(Dollars in thousands)		Mar. 31,				# of				Mar. 31,				# of				Dec. 31,				# of
		2012				properties				2011				properties				2011				properties
Income-producing properties		$	9,352				15			$	6,613				9			$	10,282				15
Homes			5,228				16				15,093				64				6,008				17
Land			4,710				14				4,427				11				5,049				16
Residential site developments			3,367				136				6,973				236				3,506				146
Lots			2,453				49				3,758				56				2,932				51
Condominiums			1,641				6				1,792				12				2,252				9
Multifamily			408				4				673				11				428				4
Commercial site developments			366				6				-				-				366				6
Total		$	27,525				246			$	39,329				399			$	30,823				264

  

 

WEST COAST BANCORP REPORTS FIRST QUARTER 2012 RESULTS 

April 23, 2012 

Page 13 of 16

 

Other

 

The Company will hold a Webcast conference call Monday, April 23, 2012, at 1:00 p.m. Pacific Time, during which the Company will discuss first quarter 2012 results and current activities. To access the conference call via a live Webcast, go to www.wcb.com and click on Investor Relations and the “1st Quarter 2012 Earnings Conference Call” tab. The conference call may also be accessed by dialing (866) 394-3464 Conference ID#: 66605108 a few minutes prior to 1:00 p.m. Pacific Time. The call will be available for replay by accessing the Company’s website at www.wcb.com and following the same instructions.

 

West Coast Bancorp is a publicly held, Northwest bank holding company headquartered in Oregon with $2.4 billion in assets, and the parent company of West Coast Bank and West Coast Trust Company, Inc. West Coast Bank operates 60 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, 2011, including under the heading "Forward Looking Statement Disclosure" and in the section "Risk Factors”.

 

 

WEST COAST BANCORP REPORTS FIRST QUARTER 2012 RESULTS 

April 23, 2012 

Page 14 of 16 

 

Table 14

INCOME STATEMENT 

 

(Dollars in thousands)		Q1				Q1				Change								Q4				Full year				Full year
		2012				2011				$				%				2011				2011				2010
Net interest income
Interest and fees on loans		$	19,209			$	20,299			$	(1,090	)			-5	%		$	19,647			$	80,237			$	88,409
Interest on investment securities			4,099				4,548				(449	)			-10	%			4,266				18,251				16,668
Other interest income			25				71				(46	)			-65	%			19				187				499
Total interest income			23,333				24,918				(1,585	)			-6	%			23,932				98,675				105,576
Interest expense on deposit accounts			577				1,809				(1,232	)			-68	%			702				4,973				12,130
Interest on borrowings and subordinated debentures			623				1,597				(974	)			-61	%			925				5,808				7,813
Borrowings prepayment charge			-				-				-				0	%			4,365				7,140				2,326
Total interest expense			1,200				3,406				(2,206	)			-65	%			5,992				17,921				22,269
Net interest income			22,133				21,512				621				3	%			17,940				80,754				83,307
Provision for credit losses			89				2,076				(1,987	)			-96	%			1,499				8,133				18,652
Noninterest income
Service charges on deposit accounts			2,818				3,644				(826	)			-23	%			3,005				13,353				15,690
Payment systems related revenue			3,073				2,930				143				5	%			3,081				12,381				11,393
Trust and investment services revenues			935				1,148				(213	)			-19	%			1,114				4,503				4,267
Gains on sales of loans			735				513				222				43	%			300				1,335				1,197
Net OREO valuation adjustments and gains (losses) on sales			(574	)			(334	)			(240	)			-72	%			(1,981	)			(3,236	)			(4,415	)
Other-than-temporary impairment losses			(49	)			-				(49	)			-				-				(179	)			-
Gain on sales of securities			147				267				(120	)			-45	%			192				713				1,562
Other			802				748				54				7	%			708				2,949				3,003
Total noninterest income			7,887				8,916				(1,029	)			-12	%			6,419				31,819				32,697
Noninterest expense
Salaries and employee benefits			11,478				11,877				(399	)			-3	%			12,614				48,587				45,854
Equipment			1,662				1,528				134				9	%			1,560				6,113				6,247
Occupancy			2,075				2,165				(90	)			-4	%			2,162				8,674				8,894
Payment systems related expense			1,119				1,247				(128	)			-10	%			1,265				5,141				4,727
Professional fees			1,111				982				129				13	%			1,122				4,118				3,991
Postage, printing and office supplies			819				810				9				1	%			821				3,265				3,148
Marketing			312				651				(339	)			-52	%			659				3,003				3,086
Communications			380				378				2				1	%			395				1,549				1,525
Other noninterest expense			2,069				2,915				(846	)			-29	%			2,146				10,425				12,865
Total noninterest expense			21,025				22,553				(1,528	)			-7	%			22,744				90,875				90,337
Income before income taxes			8,906				5,799				3,107				54	%			116				13,565				7,015
Provision (benefit) for income taxes			3,117				694				2,423				349	%			(17,646	)			(20,212	)			3,790
Net income		$	5,789			$	5,105			$	684				13	%		$	17,762			$	33,777			$	3,225
Net income per share:
Basic		$	0.28			$	0.25			$	0.03							$	0.87			$	1.65			$	0.16
Diluted		$	0.27			$	0.24			$	0.03							$	0.83			$	1.58			$	0.16
Weighted average common shares			19,038				18,960				78								19,032				19,007				17,460
Weighted average diluted shares			20,054				19,939				115								19,911				19,940				18,059
Tax equivalent net interest income		$	22,398			$	21,770			$	628							$	18,223			$	81,870			$	84,478

 

 

WEST COAST BANCORP REPORTS FIRST QUARTER 2012 RESULTS 

April 23, 2012 

Page 15 of 16 

 

Table 15

BALANCE SHEETS 

 

(Dollars in thousands)		Mar. 31,				Mar. 31,				Change								Dec. 31,
		2012				2011				$				%				2011
Assets:
Cash and due from banks		$	59,146			$	50,865			$	8,281				16	%		$	59,955
Federal funds sold			1,803				1,966				(163	)			-8	%			4,758
Interest-bearing deposits in other banks			108,735				122,224				(13,489	)			-11	%			27,514
Total cash and cash equivalents			169,684				175,055				(5,371	)			-3	%			92,227
Investment securities			670,534				643,705				26,829				4	%			729,844
Loans			1,470,848				1,535,700				(64,852	)			-4	%			1,501,301
Allowance for loan losses			(33,854	)			(39,692	)			5,838				15	%			(35,212	)
Loans, net			1,436,994				1,496,008				(59,014	)			-4	%			1,466,089
Total interest earning assets			2,254,019				2,305,780				(51,761	)			-2	%			2,267,446
OREO, net			27,525				39,329				(11,804	)			-30	%			30,823
Other assets			104,550				97,760				6,790				7	%			110,904
Total assets		$	2,409,287			$	2,451,857			$	(42,570	)			-2	%		$	2,429,887
Liabilities and Stockholders' Equity:
Demand		$	620,015			$	561,995			$	58,020				10	%		$	621,962
Savings and interest-bearing demand			503,829				461,542				42,287				9	%			495,117
Money market			614,831				661,327				(46,496	)			-7	%			625,373
Time deposits			155,830				243,567				(87,737	)			-36	%			173,117
Total deposits			1,894,505				1,928,431				(33,926	)			-2	%			1,915,569
Borrowings and subordinated debentures			171,000				219,599				(48,599	)			-22	%			171,000
Reserve for unfunded commitments			780				737				43				6	%			771
Other liabilities			22,020				26,102				(4,082	)			-16	%			28,068
Total liabilities			2,088,305				2,174,869				(86,564	)			-4	%			2,115,408
Stockholders' equity			320,982				276,988				43,994				16	%			314,479
Total liabilities and stockholders' equity		$	2,409,287			$	2,451,857			$	(42,570	)			-2	%		$	2,429,887

 

 

WEST COAST BANCORP REPORTS FIRST QUARTER 2012 RESULTS 

April 23, 2012 

Page 16 of 16 

 

Table 16

PERIOD END LOANS 

 

(Dollars in thousands)		Mar. 31,				% of				Mar. 31,				% of				Change								Dec. 31,				% of
		2012				Total				2011				total				Amount				%				2011				Total
Commercial loans		$	278,195				19	%		$	306,864				20	%		$	(28,669	)			-9	%		$	299,766				20	%
Commercial real estate construction			19,839				1	%			17,711				1	%			2,128				12	%			17,438				1	%
Residential real estate construction			12,082				1	%			19,896				1	%			(7,814	)			-39	%			12,724				1	%
Total real estate construction loans			31,921				2	%			37,607				2	%			(5,686	)			-15	%			30,162				2	%
Mortgage			65,063				5	%			74,920				5	%			(9,857	)			-13	%			66,610				5	%
Home equity			252,990				17	%			266,606				17	%			(13,616	)			-5	%			258,384				17	%
Total real estate mortgage			318,053				22	%			341,526				22	%			(23,473	)			-7	%			324,994				22	%
Commercial real estate loans			830,053				56	%			834,880				55	%			(4,827	)			-1	%			832,767				55	%
Installment and other consumer loans			12,626				1	%			14,823				1	%			(2,197	)			-15	%			13,612				1	%
Total loans		$	1,470,848							$	1,535,700							$	(64,852	)			-4	%		$	1,501,301

 

Table 17

AVERAGE BALANCE SHEETS 

 

(Dollars in thousands)		Q1				Q1				Q4				Full Year				Full Year
		2012				2011				2011				2011				2010
Cash and due from banks		$	50,017			$	48,698			$	53,829			$	52,258			$	48,976
Federal funds sold			2,601				3,947				3,184				3,796				6,194
Interest-bearing deposits in other banks			35,334				106,794				20,530				67,332				188,925
Total cash and cash equivalents			87,952				159,439				77,543				123,386				244,095
Investment securities			710,000				673,449				783,948				734,893				606,099
Total loans			1,482,522				1,529,290				1,498,437				1,516,409				1,622,445
Allowance for loan losses			(35,249	)			(40,296	)			(36,101	)			(38,456	)			(42,003	)
Loans, net			1,447,273				1,488,994				1,462,336				1,477,953				1,580,442
Total interest earning assets			2,232,288				2,314,612				2,309,396				2,324,016				2,425,073
Other assets			132,951				128,986				122,493				124,562				145,235
Total assets		$	2,378,176			$	2,450,868			$	2,446,320			$	2,460,794			$	2,575,871
Demand		$	585,749			$	552,229			$	622,741			$	592,630			$	540,280
Savings and interest-bearing demand			490,361				450,399				493,541				474,719				438,665
Money market			623,111				660,672				640,247				654,329				659,542
Time deposits			167,417				269,038				179,288				217,149				388,500
Total deposits			1,866,638				1,932,338				1,935,817				1,938,827				2,026,987
Borrowings and subordinated debentures			171,505				219,599				189,635				212,237				264,589
Total interest bearing liabilities			1,452,394				1,599,708				1,502,711				1,558,434				1,751,296
Other liabilities			22,782				24,983				23,245				23,332				18,486
Stockholders' equity			317,251				273,948				297,623				286,398				265,809
Total liabilities and stockholders' equity		$	2,378,176			$	2,450,868			$	2,446,320			$	2,460,794			$	2,575,871