LAKE OSWEGO, Ore., Oct. 22 /PRNewswire-FirstCall/ -- 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 $6.1
million or $.06 per diluted
share for third quarter 2010 compared to a net loss for third
quarter 2009 of $12.4 million or
$.79 per diluted share. Year-to-date
the Company reported net income of $1.3
million or $.01 per diluted
share, compared to a net loss of $42.3
million or $2.71 per diluted
share for the same period in 2009. There were 103.1 million
weighted average diluted shares outstanding in the most recent
quarter compared to 15.5 million in the third quarter 2009.
"The favorable operating trends that the Company experienced in
the first half of 2010 continued in the third quarter with lower
provisioning for loan losses, continued reduction in non-performing
assets, an improved net interest margin, and reduced OREO costs",
said Robert D. Sznewajs, President
and Chief Executive Officer. "These positive trends combined with
low cost funding and a growing core deposit account base,
contributed to third quarter and year-to-date profitability for the
Company", says Sznewajs.
Capital
Table 1 below shows regulatory capital ratios for Bancorp
and the Bank at September 30, 2010
and 2009, and at June 30, 2010, illustrating significant and
continued improvement as a result of the Company's capital raising
activities and continued reductions in risk-weighted assets over
the past twelve months. Due to favorable operating trends and
improved capital ratios, the Company terminated the discretionary
equity issuance program on August 6,
2010 after raising aggregate gross sales proceeds of
approximately $7.9 million.
Table 1
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SELECTED
INFORMATION
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Capital Ratios
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September
30,
|
September
30,
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June
30,
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2010
|
2009
|
Change
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2010
|
Change
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West Coast Bancorp
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Tier 1 capital ratio
|
16.96%
|
9.79%
|
7.17
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16.50%
|
0.46
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Total capital ratio
|
18.23%
|
11.05%
|
7.18
|
|
17.76%
|
0.47
|
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Leverage ratio
|
12.84%
|
7.88%
|
4.96
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11.90%
|
0.94
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West Coast Bank
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Tier 1 capital ratio
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16.30%
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9.49%
|
6.81
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15.84%
|
0.46
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Total capital ratio
|
17.56%
|
10.75%
|
6.81
|
|
17.10%
|
0.46
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Leverage ratio
|
12.34%
|
7.64%
|
4.70
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|
11.43%
|
0.91
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Selective quarterly performance
ratios
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Return on average equity,
annualized
|
8.84%
|
-29.39%
|
38.23
|
|
-5.92%
|
14.76
|
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|
Return on average assets,
annualized
|
0.96%
|
-1.85%
|
2.81
|
|
-0.58%
|
1.54
|
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Efficiency ratio for the quarter
to date
|
76.09%
|
95.97%
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(19.88)
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80.83%
|
4.74
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Share and Per Share
Figures
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Quarter
ended
|
Quarter
ended
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Quarter
ended
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(Shares in thousands)
|
September
30, 2010
|
September
30, 2009
|
Change
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|
June 30,
2010
|
Change
|
|
|
Common shares outstanding at
period end
|
96,424
|
15,647
|
80,777
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|
96,421
|
3
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Weighted average diluted
shares
|
103,144
|
15,520
|
87,624
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92,123
|
11,021
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Income (loss) per diluted
share
|
$
0.06
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$
(0.79)
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$
0.85
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$
(0.04)
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$
0.10
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Book value per common
share
|
$
2.63
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$
10.33
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$
(7.70)
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$
2.55
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$
0.08
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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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Balance Sheet Overview
Total loan balances declined $247
million or 14% from September 30,
2009 to $1.58 billion at
September 30, 2010. The decline
primarily reflects continued soft loan demand, as well as the
Company's strategy to reduce risk exposure in selective loan
segments over the past year. As a result, the real estate
construction loan portfolio contracted $92
million or 61% since September 30,
2009, and measured 4% of total loans at the most recent
quarter end compared to 8% a year ago. The Company also continued
to exit a number of higher risk rated commercial loans, which
contributed to the $90 million or 22%
contraction in the commercial loan category from September 30 a year ago. However, over the last
few months the Company has seen an increase in commercial loan
originations as a result of its marketing efforts.
Table 2
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PERIOD END
LOANS
|
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(Dollars in
thousands)
|
September
30,
|
%
of
|
September
30,
|
%
of
|
Change
|
|
June
30,
|
%
of
|
|
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|
2010
|
total
|
2009
|
total
|
Amount
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%
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2010
|
total
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Commercial loans
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$
317,037
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20%
|
$
406,807
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22%
|
$
(89,770)
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-22%
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$
312,170
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19%
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Commercial real estate
construction
|
17,933
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1%
|
43,944
|
2%
|
(26,011)
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-59%
|
|
22,096
|
1%
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Residential real estate
construction
|
39,955
|
3%
|
105,921
|
6%
|
(65,966)
|
-62%
|
|
52,062
|
3%
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Total real estate construction
loans
|
57,888
|
4%
|
149,865
|
8%
|
(91,977)
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-61%
|
|
74,158
|
5%
|
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Mortgage
|
71,446
|
5%
|
78,144
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4%
|
(6,698)
|
-9%
|
|
73,867
|
5%
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|
Nonstandard
mortgage
|
13,294
|
1%
|
21,952
|
1%
|
(8,658)
|
-39%
|
|
14,348
|
1%
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|
Home
equity
|
272,132
|
17%
|
282,552
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16%
|
(10,420)
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-4%
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|
274,072
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17%
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Total real estate
mortgage
|
356,872
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23%
|
382,648
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21%
|
(25,776)
|
-7%
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|
362,287
|
23%
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|
Commercial real estate
loans
|
827,668
|
52%
|
863,658
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48%
|
(35,990)
|
-4%
|
|
837,033
|
52%
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|
Installment and other consumer
loans
|
15,986
|
1%
|
19,023
|
1%
|
(3,037)
|
-16%
|
|
16,384
|
1%
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Total
|
$
1,575,451
|
|
$
1,822,001
|
|
$
(246,550)
|
-14%
|
|
$
1,602,032
|
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Yield on loans
|
5.44%
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|
5.21%
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|
0.23
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|
5.46%
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Over the past twelve months the Company's total cash equivalents
and investment securities balances collectively grew $141 million to $758 million at September 30, 2010. Total cash equivalents,
however, declined $87 million or 43%
since September 30, 2009. This
decline was largely a result of the second quarter 2010 prepayment
of $99 million in Federal Home Loan
Bank ("FHLB") term borrowings and reinvestment of excess cash in
our investment portfolio over the past year. Total cash equivalents
remained relatively unchanged from June 30,
2010.
Primarily due to the significant contraction in loan balances,
the investment portfolio grew $228
million or 55% over the past twelve months. The majority of
the growth occurred in U.S. Government Agency and mortgage-backed
securities. At September 30, 2010,
the expected duration of the investment securities portfolio,
excluding FHLB stock, was 1.7 years.
Table 3
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PERIOD END
CASH EQUIVALENTS AND INVESTMENT SECURITIES
|
|
|
(Dollars in
thousands)
|
September
30,
|
%
of
|
September
30,
|
%
of
|
Change
|
|
June
30,
|
%
of
|
|
|
|
2010
|
total
|
2009
|
total
|
Amount
|
%
|
|
2010
|
total
|
|
|
Cash equivalents:
|
|
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|
|
|
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|
Federal funds
sold
|
$
4,605
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1%
|
$
3,287
|
1%
|
$
1,318
|
40%
|
|
$
13,431
|
2%
|
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|
Interest-bearing deposits
in other banks
|
113,144
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15%
|
201,583
|
32%
|
(88,439)
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-44%
|
|
109,781
|
14%
|
|
|
Total cash
equivalents
|
117,749
|
16%
|
204,870
|
33%
|
(87,121)
|
-43%
|
|
123,212
|
16%
|
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|
|
|
|
|
|
|
|
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|
|
Investment
securities:
|
|
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|
|
|
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|
U.S. Treasury
securities
|
14,551
|
2%
|
45,197
|
7%
|
(30,646)
|
-68%
|
|
14,688
|
2%
|
|
|
U.S. Government Agency
securities
|
221,450
|
28%
|
39,603
|
6%
|
181,847
|
459%
|
|
250,848
|
32%
|
|
|
Corporate
securities
|
9,014
|
1%
|
10,621
|
2%
|
(1,607)
|
-15%
|
|
9,674
|
1%
|
|
|
Mortgage-backed
securities
|
324,563
|
43%
|
233,206
|
38%
|
91,357
|
39%
|
|
300,485
|
39%
|
|
|
Obligations of state and
political sub.
|
58,206
|
8%
|
73,903
|
12%
|
(15,697)
|
-21%
|
|
58,564
|
8%
|
|
|
Equity investments and
other securities
|
12,290
|
2%
|
9,454
|
2%
|
2,836
|
30%
|
|
11,972
|
2%
|
|
|
Total investment
securities
|
640,074
|
84%
|
411,984
|
67%
|
228,090
|
55%
|
|
646,231
|
84%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash equivalents and
investment securities
|
$
757,823
|
100%
|
$
616,854
|
100%
|
$
140,969
|
23%
|
|
$
769,443
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax equivalent yield on cash
equivalents and investment securities
|
2.30%
|
|
2.42%
|
|
(0.12)
|
|
|
2.27%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third quarter 2010 average total deposits of $2.0 billion declined 7% or $162 million from the same quarter in 2009.
However, average non-time deposits increased $113 million or 7% over the same period. With
excess balance sheet liquidity, we elected to reduce higher cost
time deposit balances, which declined $274
million or 45% from average time deposit balances in the
third quarter last year. Time deposits represented just 17% of the
Company's average total deposits in the most recent quarter
compared to 28% in third quarter 2009. The combination of the
Company's favorable deposit mix and deposit pricing strategies
helped reduce the average rate paid on total deposits to .51% in
third quarter 2010, a decline of 63 basis points from 1.14% in
third quarter 2009.
Table 4
|
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|
|
|
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QUARTERLY
AVERAGE DEPOSITS BY CATEGORY
|
|
|
(Dollars in
thousands)
|
Q3
|
%
of
|
Q3
|
%
of
|
Change
|
|
Q2
|
%
of
|
|
|
|
2010
|
total
|
2009
|
total
|
Amount
|
%
|
|
2010
|
total
|
|
|
Demand deposits
|
$
550,695
|
28%
|
$
508,758
|
24%
|
$
41,937
|
8%
|
|
$
523,298
|
26%
|
|
|
Interest bearing
demand
|
337,214
|
17%
|
311,319
|
15%
|
25,895
|
8%
|
|
332,850
|
16%
|
|
|
Savings
|
106,768
|
5%
|
93,611
|
4%
|
13,157
|
14%
|
|
104,052
|
5%
|
|
|
Money market
|
667,150
|
33%
|
635,511
|
29%
|
31,639
|
5%
|
|
657,454
|
32%
|
|
|
Total non-time deposit
accounts
|
1,661,827
|
83%
|
1,549,199
|
72%
|
112,628
|
7%
|
|
1,617,654
|
79%
|
|
|
Time deposits
|
336,678
|
17%
|
610,907
|
28%
|
(274,229)
|
-45%
|
|
431,669
|
21%
|
|
|
Total
|
$
1,998,505
|
100%
|
$
2,160,106
|
100%
|
$
(161,601)
|
-7%
|
|
$
2,049,323
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average rate on total
deposits
|
0.51%
|
|
1.14%
|
|
(0.63)
|
|
|
0.64%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The number of checking accounts, the foundation from which we
build broader client relationships, grew by over 6,000 accounts or
6% over the past twelve months.
Table 5
|
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|
|
|
|
|
|
|
|
|
|
NUMBER OF
DEPOSIT ACCOUNTS
|
|
|
(In thousands)
|
Sept.
30,
|
%
of
|
Sept.
30,
|
%
of
|
Change
|
June
30,
|
%
of
|
Change
|
|
|
|
2010
|
total
|
2009
|
total
|
#
|
%
|
2010
|
total
|
#
|
% (1)
|
|
|
Demand deposits
|
50,757
|
32%
|
47,763
|
31%
|
2,994
|
6%
|
50,340
|
32%
|
417
|
3%
|
|
|
Interest bearing
demand
|
51,891
|
34%
|
48,693
|
32%
|
3,198
|
7%
|
51,465
|
34%
|
426
|
3%
|
|
|
Total checking
accounts
|
102,648
|
66%
|
96,456
|
63%
|
6,192
|
6%
|
101,805
|
66%
|
843
|
3%
|
|
|
Savings
|
28,599
|
18%
|
26,227
|
17%
|
2,372
|
9%
|
28,488
|
18%
|
111
|
2%
|
|
|
Money market
|
14,499
|
9%
|
15,044
|
10%
|
(545)
|
-4%
|
14,575
|
9%
|
(76)
|
-2%
|
|
|
Time deposits
|
10,499
|
7%
|
14,907
|
10%
|
(4,408)
|
-30%
|
11,681
|
7%
|
(1,182)
|
-40%
|
|
|
Total
|
156,245
|
100%
|
152,634
|
100%
|
3,611
|
2%
|
156,549
|
100%
|
(304)
|
-1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Annualized.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Results Improved Significantly from Third Quarter
2009
As shown in Table 6 below, third quarter 2010 net income of
$6.1 million increased $18.5 million from a net loss of $12.4 million in the same quarter of 2009 and
increased $9.9 million from a
$3.8 million net loss in the second
quarter 2010. The improved year-over-year third quarter was
primarily a result of significantly lower credit costs, including
an $18.7 million decrease in the
provision for credit losses and a $3.0
million decline in Other Real Estate Owned ("OREO")
valuation adjustments and losses upon OREO dispositions. Excluding
a prepayment fee of $2.3 million
associated with prepayment of $99
million in FHLB borrowings and effects of taxes, the
Company's adjusted net income in the second quarter of 2010 would
have been $.2 million. See
reconciliation below.
Table 6
|
|
|
|
|
|
|
|
|
|
|
SUMMARY
INCOME STATEMENT
|
|
|
(Dollars in
thousands)
|
Q3
|
Q3
|
Change
|
|
Q2
|
Change
|
|
|
|
2010
|
2009
|
$
|
%
|
|
2010
|
$
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
$
21,875
|
$
19,145
|
$ 2,730
|
14%
|
|
$
18,910
|
$ 2,965
|
16%
|
|
|
Provision for credit
losses
|
1,567
|
20,300
|
18,733
|
92%
|
|
7,758
|
6,191
|
80%
|
|
|
Noninterest income
|
8,069
|
4,971
|
3,098
|
62%
|
|
9,625
|
(1,556)
|
-16%
|
|
|
Noninterest expense
|
23,003
|
23,489
|
486
|
2%
|
|
22,909
|
(94)
|
0%
|
|
|
Income (loss) before income
taxes
|
5,374
|
(19,673)
|
25,047
|
127%
|
|
(2,132)
|
7,506
|
352%
|
|
|
Provision (benefit) for income
taxes
|
(676)
|
(7,265)
|
(6,589)
|
-91%
|
|
1,717
|
2,393
|
139%
|
|
|
Net income
(loss)
|
$
6,050
|
$ (12,408)
|
$ 18,458
|
149%
|
|
$
(3,849)
|
$ 9,899
|
257%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of adjusted net
income to GAAP
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
6,050
|
$ (12,408)
|
$ 18,458
|
149%
|
|
$
(3,849)
|
$ 9,899
|
257%
|
|
|
Less FHLB prepayment fee
(1)
|
-
|
-
|
-
|
|
|
(2,326)
|
2,326
|
|
|
|
Less: Impact of
taxes:
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain on
securities
|
(676)
|
-
|
(676)
|
|
|
(1,798)
|
1,122
|
|
|
|
Increase in deferred tax
assets-tax return adjustments
|
-
|
-
|
-
|
|
|
3,515
|
(3,515)
|
|
|
|
Net income (loss) excluding FHLB
prepayment fee and taxes (2)
|
$
5,374
|
$ (12,408)
|
$ 17,782
|
143%
|
|
$
194
|
$ 5,180
|
2670%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) No tax benefit was
recognized for FHLB prepayment fee.
|
|
|
(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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third quarter 2010 net interest income of $21.9 million increased $2.7 million or 14% from the same quarter in
2009. This increase was mainly due to a reduction in interest
expense on deposits and borrowings as well as lower interest
reversals on nonaccrual loans. The net interest margin of 3.71% in
the most recent quarter expanded 57 basis points from third quarter
2009. Consistent with expectations, the net interest margin widened
23 basis points from 3.48% in second quarter 2010 excluding the
impact of the FHLB prepayment fee in that quarter. See
reconciliation to GAAP for second quarter 2010 net interest margin
in Table 7 below. The spread between the yield earned on loans and
rate paid on interest bearing deposits improved 102 basis points
year-over-year in the third quarter notwithstanding a significant
shift in average earning assets from higher yielding loan balances
to cash equivalents and investment securities balances.
Collectively, cash equivalents and investment securities earned 314
basis points less than the loan portfolio during the most recent
quarter.
Table 7
|
|
|
|
|
|
|
|
|
NET INTEREST
SPREAD AND MARGIN
|
|
|
(Annualized, tax-equivalent
basis)
|
Q3
|
Q3
|
|
|
Q2
|
|
|
|
|
2010
|
2009
|
Change
|
|
2010
|
Change
|
|
|
Yield on average
interest-earning assets
|
4.41%
|
4.53%
|
(0.12)
|
|
4.39%
|
0.02
|
|
|
Rate on average interest-bearing
liabilities
|
1.00%
|
1.73%
|
(0.73)
|
|
1.72%
|
(0.72)
|
|
|
Net interest spread
|
3.41%
|
2.80%
|
0.61
|
|
2.67%
|
0.74
|
|
|
Net interest margin
|
3.71%
|
3.14%
|
0.57
|
|
3.11%
|
0.60
|
|
|
|
|
|
|
|
|
|
|
|
Impact of FHLB prepayment fee in
Q2 2010
|
0.00%
|
0.00%
|
-
|
|
-0.37%
|
0.37
|
|
|
Net interest margin excluding
FHLB prepayment fee
|
3.71%
|
3.14%
|
0.57
|
|
3.48%
|
0.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As shown in Table 8 below, third quarter 2010 total noninterest
income of $8.1 million increased
$3.1 million or 62% from the same
quarter last year. The increase was mainly due to a $3.0 million improvement in OREO valuation
adjustments and gains or losses associated with OREO
dispositions.
Excluding OREO valuation adjustments and gain or losses from
both quarters, the Company's noninterest income was flat
year-over-year third quarter. The $.5
million or 20% growth in payment system revenues and
$.1 million increase in service
charges on deposit accounts offset the declines in gains on sales
of loans and trust and investment services revenues.
Table 8
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST
INCOME
|
|
|
(Dollars in
thousands)
|
Q3
|
Q3
|
Change
|
|
Q2
|
Change
|
|
|
|
2010
|
2009
|
$
|
%
|
|
2010
|
$
|
%
|
|
|
Noninterest income
|
|
|
|
|
|
|
|
|
|
|
Service charges on
deposit accounts
|
$
4,145
|
$
4,038
|
$
107
|
3%
|
|
$
4,213
|
$
(68)
|
-2%
|
|
|
Payment systems related
revenue
|
2,998
|
2,501
|
497
|
20%
|
|
2,875
|
123
|
4%
|
|
|
Trust and investment
services revenues
|
978
|
1,140
|
(162)
|
-14%
|
|
1,167
|
(189)
|
-16%
|
|
|
Gains on sales of
loans
|
182
|
466
|
(284)
|
-61%
|
|
306
|
(124)
|
-41%
|
|
|
Other
|
728
|
824
|
(96)
|
-12%
|
|
785
|
(57)
|
-7%
|
|
|
Gain on sales of
securities
|
-
|
-
|
-
|
0%
|
|
488
|
(488)
|
-100%
|
|
|
Total
|
9,031
|
8,969
|
62
|
1%
|
|
9,834
|
(803)
|
-8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OREO gains (losses) on
sale
|
549
|
(201)
|
750
|
373%
|
|
1,048
|
(499)
|
-48%
|
|
|
OREO valuation
adjustments
|
(1,511)
|
(3,797)
|
2,286
|
60%
|
|
(1,257)
|
(254)
|
-20%
|
|
|
Total
|
(962)
|
(3,998)
|
3,036
|
76%
|
|
(209)
|
(753)
|
-360%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noninterest
income
|
$
8,069
|
$
4,971
|
$ 3,098
|
62%
|
|
$
9,625
|
$
(1,556)
|
-16%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As presented in Table 9 below, third quarter 2010 total
noninterest expense of $23.0 million
decreased $.5 million from the same
quarter in 2009 as declines in FDIC assessment and OREO related
expenses were offset by higher salaries and employee benefits
reflective of increased employee incentives and restricted stock
expenses. The increase in payment system expense was directly
associated with higher transaction volumes.
Table 9
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST
EXPENSE
|
|
|
(Dollars in
thousands)
|
Q3
|
Q3
|
Change
|
|
Q2
|
Change
|
|
|
|
2010
|
2009
|
$
|
%
|
|
2010
|
$
|
%
|
|
|
Noninterest expense
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
$
11,836
|
$
10,753
|
$
(1,083)
|
-10%
|
|
$
11,322
|
$
(514)
|
-5%
|
|
|
Equipment
|
1,525
|
1,758
|
233
|
13%
|
|
1,606
|
81
|
5%
|
|
|
Occupancy
|
2,216
|
2,247
|
31
|
1%
|
|
2,249
|
33
|
1%
|
|
|
Payment systems related
expense
|
1,214
|
1,043
|
(171)
|
-16%
|
|
1,212
|
(2)
|
0%
|
|
|
Professional
fees
|
1,147
|
1,091
|
(56)
|
-5%
|
|
1,161
|
14
|
1%
|
|
|
Postage, printing and
office supplies
|
791
|
799
|
8
|
1%
|
|
737
|
(54)
|
-7%
|
|
|
Marketing
|
861
|
832
|
(29)
|
-3%
|
|
738
|
(123)
|
-17%
|
|
|
Communications
|
374
|
402
|
28
|
7%
|
|
381
|
7
|
2%
|
|
|
Other noninterest
expense
|
3,039
|
4,564
|
1,525
|
33%
|
|
3,503
|
464
|
13%
|
|
|
Total
|
$
23,003
|
$
23,489
|
$
486
|
2%
|
|
$
22,909
|
$
(94)
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Taxes and Deferred Tax Asset Valuation
Allowance
Third quarter 2010 income tax benefit was $.7 million compared to a benefit for income
taxes of $7.3 million in the same
quarter 2009. The benefit for income taxes for the third
quarter 2010 was the result of an increase in the unrealized gain
on our investment securities. Income taxes in third quarter 2010
reflected tax expense determined on pretax income which was offset
by a corresponding income tax benefit resulting from a reduction in
the deferred tax asset and its associated valuation allowance.
The Company maintained a valuation allowance of $22.0 million against the deferred tax asset
balance of $27.6 million as of
September 30, 2010, for a net
deferred tax asset of $5.6 million.
This represented a $.7 million
increase from the June 30, 2010 net
deferred tax asset balance of $4.9
million.
Table 10
|
|
|
|
|
|
|
|
|
PROVISION
(BENEFIT) FOR INCOME TAXES
|
|
|
(Dollars in
thousands)
|
Q3
|
Q3
|
|
|
Q2
|
|
|
|
|
2010
|
2009
|
Change
|
|
2010
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for income
taxes net of decrease
|
|
|
|
|
|
|
|
|
in deferred tax asset
valuation allowance
|
$
-
|
$
(7,265)
|
$
7,265
|
|
$
-
|
$
-
|
|
|
Provision (benefit) for income
taxes from deferred
|
|
|
|
|
|
|
|
|
tax asset valuation
allowance:
|
|
|
|
|
|
|
|
|
Unrealized gain on
securities
|
(676)
|
-
|
(676)
|
|
(1,798)
|
1,122
|
|
|
Increase in
deferred tax assets-tax return adjustments
|
-
|
-
|
-
|
|
3,515
|
(3,515)
|
|
|
Total provision (benefit) for
income taxes
|
$
(676)
|
$
(7,265)
|
$
6,589
|
|
$
1,717
|
$
(2,393)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Quality
The Company recorded a third quarter 2010 provision for credit
losses of $1.6 million, a decline
from $20.3 million in the same
quarter of 2009. Consistent with the first two quarters of 2010,
the latest quarter marked a significant reduction in loan net
charge-offs compared to the corresponding quarter a year ago. Third
quarter 2010 net charge-offs of $3.3
million, or .82% of average loans on an annualized basis,
declined $15.5 million from
$18.8 million in the third quarter of
2009, and was at their lowest quarterly level in over two years.
The reduction in net charge-offs from the same quarter in 2009 was
primarily attributable to the commercial, residential real estate
construction, and mortgage loan categories. 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 the areas in which we do
business.
Table 11
|
|
|
|
|
|
|
|
ALLOWANCE
FOR CREDIT LOSSES AND NET CHARGEOFFS
|
|
|
(Dollars in
thousands)
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
|
|
|
2010
|
2010
|
2010
|
2009
|
2009
|
|
|
Allowance for credit losses,
beginning of period
|
$
44,347
|
$
41,299
|
$
39,418
|
$
40,036
|
$
38,569
|
|
|
Total provision for credit
losses
|
1,567
|
7,758
|
7,634
|
35,233
|
20,300
|
|
|
Loan net charge-offs:
|
|
|
|
|
|
|
|
Commercial
|
524
|
1,684
|
839
|
13,271
|
5,744
|
|
|
Commercial real
estate construction
|
-
|
248
|
487
|
-
|
324
|
|
|
Residential real
estate construction
|
813
|
432
|
734
|
10,538
|
8,536
|
|
|
Total real estate
construction
|
813
|
680
|
1,221
|
10,538
|
8,860
|
|
|
Mortgage
|
449
|
478
|
909
|
4,734
|
3,018
|
|
|
Nonstandard
mortgage
|
5
|
641
|
1,497
|
692
|
725
|
|
|
Home
equity
|
568
|
627
|
914
|
1,346
|
203
|
|
|
Total real estate
mortgage
|
1,022
|
1,746
|
3,320
|
6,772
|
3,946
|
|
|
Commercial real
estate
|
339
|
275
|
95
|
4,733
|
(79)
|
|
|
Installment and
consumer
|
272
|
146
|
137
|
285
|
128
|
|
|
Overdraft
|
326
|
179
|
141
|
252
|
234
|
|
|
Total loan net
charge-offs
|
3,296
|
4,710
|
5,753
|
35,851
|
18,833
|
|
|
|
|
|
|
|
|
|
|
Total allowance for credit
losses
|
$
42,618
|
$
44,347
|
$
41,299
|
$
39,418
|
$
40,036
|
|
|
Components of allowance for
credit losses:
|
|
|
|
|
|
|
|
Allowance for loan
losses
|
$
41,753
|
$
43,329
|
$
40,446
|
$
38,490
|
$
39,075
|
|
|
Reserve for unfunded
commitments
|
865
|
1,018
|
853
|
928
|
961
|
|
|
Total allowance for credit
losses
|
$
42,618
|
$
44,347
|
$
41,299
|
$
39,418
|
$
40,036
|
|
|
|
|
|
|
|
|
|
|
Net loan charge-offs to average
loans (annualized)
|
0.82%
|
1.15%
|
1.37%
|
7.94%
|
4.01%
|
|
|
Allowance for loan losses to
total loans
|
2.65%
|
2.70%
|
2.43%
|
2.23%
|
2.14%
|
|
|
Allowance for credit losses to
total loans
|
2.71%
|
2.77%
|
2.48%
|
2.29%
|
2.20%
|
|
|
Allowance for loan losses to
nonperforming loans
|
61%
|
55%
|
47%
|
39%
|
30%
|
|
|
Allowance for credit losses to
nonperforming loans
|
62%
|
56%
|
48%
|
40%
|
30%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The September 30, 2010 allowance
for credit losses of $42.6 million or
2.71% of total loan balances increased from $40.0 million or 2.20% of total loan balances a
year ago. The increase in the allowance for credit losses relative
to total loan balances over the past twelve months was due to
higher general valuation allowances and a larger unallocated
allowance in the September 30, 2010
allowance model. At September 30,
2010, the unallocated portion of the allowance for loan
losses amounted to $7.0 million or
16% of the total allowance for credit losses, an increase from
$3.9 million or 10%, respectively, at
the end of the third quarter 2009. As shown in Table 18,
year-to-date provision for credit losses exceeded net charge-offs
by $3.2 million. During the third
quarter 2010, however, the net charge-offs exceeded the provision
for credit losses by $1.7 million due
to a slowdown in the unfavorable risk rating migration within the
loan portfolio as well as a reduction in higher risk rated loan
balances. These changes caused the September
30, 2010 allowance for credit losses as a percentage of
total loans to decline slightly from 2.77% at June 30, 2010. The Company's estimate of
appropriate reserve amounts will continue to be primarily dependent
on the loan portfolio's credit quality performance trends,
including net charge-offs, which will be heavily dependent on local
economic conditions.
Total nonperforming assets were $104.4
million or 4.2% of total assets as of September 30, 2010, which represented the sixth
consecutive quarterly decline. The balance of nonperforming loans
has decreased 50% or $104.2 million
from $208.6 million a year ago, at
which time total nonperforming assets represented 7.9% of total
assets. The balance of total nonperforming assets at quarter end
reflected write-downs totaling $56.4
million or 36% from the original principal loan balance
compared to write-downs of 29% twelve months ago. Total
nonperforming assets fell $11.8
million or 10% during the most recent quarter. The allowance
for credit losses represented 62% of nonperforming loans at
September 30, 2010, an increase from
30% a year ago.
Table 12
|
|
|
|
|
|
|
NONPERFORMING
ASSETS
|
|
(Dollars in
thousands)
|
Sept.
30,
|
June
30,
|
March
31,
|
Dec.
31,
|
Sept.
30,
|
|
|
2010
|
2010
|
2010
|
2009
|
2009
|
|
Loans on nonaccrual
status:
|
|
|
|
|
|
|
Commercial
|
$
13,319
|
$
15,317
|
$
24,856
|
$
36,211
|
$
49,871
|
|
Real estate
construction:
|
|
|
|
|
|
|
Commercial real estate
construction
|
3,391
|
3,391
|
3,939
|
1,488
|
2,449
|
|
Residential real estate
construction
|
13,316
|
19,465
|
19,776
|
22,373
|
42,277
|
|
Total real estate
construction
|
16,707
|
22,856
|
23,715
|
23,861
|
44,726
|
|
Real estate mortgage:
|
|
|
|
|
|
|
Mortgage
|
13,040
|
14,535
|
9,829
|
11,563
|
12,498
|
|
Nonstandard
mortgage
|
5,150
|
6,121
|
9,327
|
8,752
|
10,810
|
|
Home equity
|
1,538
|
2,198
|
2,248
|
2,036
|
1,599
|
|
Total real estate
mortgage
|
19,728
|
22,854
|
21,404
|
22,351
|
24,907
|
|
Commercial real
estate
|
18,792
|
17,542
|
15,322
|
16,778
|
12,463
|
|
Installment and
consumer
|
-
|
74
|
172
|
144
|
39
|
|
Total nonaccrual
loans
|
68,546
|
78,643
|
85,469
|
99,345
|
132,006
|
|
90 days past due not on
nonaccrual
|
-
|
-
|
-
|
-
|
-
|
|
Total nonperforming
loans
|
68,546
|
78,643
|
85,469
|
99,345
|
132,006
|
|
|
|
|
|
|
|
|
Other real estate
owned
|
35,814
|
37,578
|
45,238
|
53,594
|
76,570
|
|
Total nonperforming
assets
|
$
104,360
|
$
116,221
|
$
130,707
|
$
152,939
|
$
208,576
|
|
|
|
|
|
|
|
|
Nonperforming loans to total
loans
|
4.35%
|
4.91%
|
5.13%
|
5.76%
|
7.25%
|
|
Nonperforming assets to total
assets
|
4.20%
|
4.64%
|
4.91%
|
5.60%
|
7.86%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over the past year total nonaccrual loans declined $63.5 million or 48% to $68.5 million at September
30, 2010. This reduction was largely due to the Company
taking ownership of additional residential site development and
construction properties related to loans which previously were on
nonaccrual status, nonaccrual loan payoffs, and the disposition of
certain large nonaccrual commercial loans. At September 30, 2010, the total nonaccrual loan
portfolio had been written down 22% from the original principal
balance compared to 24% at the end of the third quarter a year
ago.
As indicated in Table 13 below, the Company remains focused on
OREO property disposition activities. During the most recent
quarter, the Company disposed of 51 OREO properties with a book
value of $5.4 million. At
September 30, 2010, the OREO
portfolio consisted of 448 properties valued at $35.8 million. The quarter end OREO balance
reflected write-downs totaling 53% from the original loan principal
compared to 38% twelve months earlier. The largest balances in the
OREO portfolio at September 30, 2010
were attributable to residential homes followed by residential site
development projects. The site development projects remaining as of
quarter end were primarily located in Vancouver and Washougal, Washington and in Salem, Oregon.
Table 13
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER REAL
ESTATE OWNED ACTIVITY
|
|
|
(Dollars in
thousands)
|
Q3
2010
|
Q2
2010
|
Q1
2010
|
Q4
2009
|
Q3
2009
|
|
|
|
Amount
|
#
|
Amount
|
#
|
Amount
|
#
|
Amount
|
#
|
Amount
|
#
|
|
|
Beginning balance
|
$
37,578
|
446
|
$
45,238
|
596
|
$
53,594
|
672
|
$
76,570
|
301
|
$
83,830
|
335
|
|
|
Additions to
OREO
|
5,119
|
53
|
7,209
|
20
|
5,003
|
15
|
26,293
|
536
|
12,064
|
36
|
|
|
Dispositions of
OREO
|
(5,372)
|
(51)
|
(13,612)
|
(170)
|
(11,000)
|
(91)
|
(42,329)
|
(165)
|
(15,527)
|
(70)
|
|
|
OREO valuation
adjustments
|
(1,511)
|
-
|
(1,257)
|
-
|
(2,359)
|
-
|
(6,940)
|
-
|
(3,797)
|
-
|
|
|
Ending balance
|
$
35,814
|
448
|
$
37,578
|
446
|
$
45,238
|
596
|
$
53,594
|
672
|
$
76,570
|
301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 14
|
|
|
|
|
|
|
|
|
OTHER REAL
ESTATE OWNED BY PROPERTY TYPE
|
|
|
(Dollars in
thousands)
|
Sept.
30,
|
#
of
|
June
30,
|
#
of
|
March
31,
|
#
of
|
|
|
|
2010
|
properties
|
2010
|
properties
|
2010
|
properties
|
|
|
Homes
|
$
15,341
|
66
|
$
17,254
|
75
|
$
21,040
|
91
|
|
|
Residential site
developments
|
8,096
|
281
|
7,296
|
265
|
13,488
|
400
|
|
|
Lots
|
4,062
|
61
|
4,750
|
67
|
5,114
|
71
|
|
|
Land
|
3,525
|
10
|
3,474
|
10
|
2,682
|
7
|
|
|
Income producing
properties
|
3,212
|
7
|
2,996
|
6
|
1,094
|
4
|
|
|
Condominiums
|
881
|
12
|
1,111
|
12
|
1,111
|
12
|
|
|
Multifamily
|
697
|
11
|
697
|
11
|
709
|
11
|
|
|
Total
|
$
35,814
|
448
|
$
37,578
|
446
|
$
45,238
|
596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other:
The Company will hold a Webcast conference call Friday, October 22, 2010, at 10:00 a.m. Pacific Time, during which the Company
will discuss third quarter 2010 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 2010 Earnings
Conference Call" tab. The conference call may also be accessed by
dialing (877) 247-4281 Conference ID#: 11014366 a few minutes prior
to 10:00 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 is a Northwest bank holding company with
$2.5 billion in assets and 65 offices
in Oregon and Washington. The Company combines the
sophisticated products and expertise of larger banks with the local
decision making, market knowledge and customer service of a
community bank. For more information, visit the Company's web
site at www.wcb.com.
Forward Looking Statements:
Statements in this release regarding future events, performance
or results are "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995 ("PSLRA") and
are made pursuant to the safe harbors of the PSLRA. These
statements can often be identified by words such as "expects,"
"believes," "anticipates," or "will," or other words of
similar meaning. Actual results could be quite different from those
expressed or implied by the forward-looking statements, which give
our current expectations about the future and are not
guarantees. Forward-looking statements speak only as of the
date they are made, and we do not undertake any obligation to
update them to reflect changes that occur after that date.
A number of factors could cause results to differ significantly
from our expectations, including, among others, the effects of (i)
market conditions in our service areas on our efforts to continue
to reduce our levels of nonperforming assets and increase loan
originations as well as (ii) all risk factors identified in our
Annual Report on Form 10-K for the year ended December 31, 2009, 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.
Table 15
|
|
|
|
|
|
|
|
|
|
|
INCOME
STATEMENT
|
|
|
(Dollars in
thousands)
|
Q3
|
Q3
|
Change
|
Q2
|
|
Year to
date
|
Year to
date
|
|
|
|
2010
|
2009
|
$
|
%
|
2010
|
|
2010
|
2009
|
|
|
Net interest income
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
$
21,800
|
$
24,535
|
$
(2,735)
|
-11%
|
$
22,416
|
|
$
67,059
|
$
76,899
|
|
|
Interest on investment
securities
|
4,160
|
3,063
|
1,097
|
36%
|
4,237
|
|
12,604
|
8,113
|
|
|
Other interest
income
|
93
|
127
|
(34)
|
-27%
|
163
|
|
404
|
190
|
|
|
Total interest income
|
26,053
|
27,725
|
(1,672)
|
-6%
|
26,816
|
|
80,067
|
85,202
|
|
|
Interest expense on deposit
accounts
|
2,553
|
6,216
|
3,663
|
59%
|
3,275
|
|
10,121
|
19,060
|
|
|
Interest on borrowings and
subordinated debentures
|
1,625
|
2,364
|
739
|
31%
|
4,631
|
|
8,528
|
6,653
|
|
|
Total interest
expense
|
4,178
|
8,580
|
4,402
|
51%
|
7,906
|
|
18,649
|
25,713
|
|
|
Net interest
income
|
21,875
|
19,145
|
2,730
|
14%
|
18,910
|
|
61,418
|
59,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for credit
losses
|
1,567
|
20,300
|
18,733
|
92%
|
7,758
|
|
16,959
|
54,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income
|
|
|
|
|
|
|
|
|
|
|
Service charges on
deposit accounts
|
4,145
|
4,038
|
107
|
3%
|
4,213
|
|
11,954
|
11,976
|
|
|
Payment systems related
revenue
|
2,998
|
2,501
|
497
|
20%
|
2,875
|
|
8,409
|
6,997
|
|
|
Trust and investment
services revenues
|
978
|
1,140
|
(162)
|
-14%
|
1,167
|
|
3,124
|
3,030
|
|
|
Gains on sales of
loans
|
182
|
466
|
(284)
|
-61%
|
306
|
|
629
|
1,565
|
|
|
Net OREO valuation
adjustments and gains (losses) on sales
|
(962)
|
(3,998)
|
3,036
|
76%
|
(209)
|
|
(3,229)
|
(12,485)
|
|
|
Other
|
728
|
824
|
(96)
|
-12%
|
785
|
|
2,270
|
3,553
|
|
|
Other-than-temporary
impairment losses
|
-
|
-
|
-
|
0%
|
-
|
|
-
|
(192)
|
|
|
Gain on sales of
securities
|
-
|
-
|
-
|
100%
|
488
|
|
945
|
833
|
|
|
Total noninterest
income
|
8,069
|
4,971
|
3,098
|
62%
|
9,625
|
|
24,102
|
15,277
|
|
|
Noninterest expense
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
11,836
|
10,753
|
(1,083)
|
-10%
|
11,322
|
|
34,333
|
33,215
|
|
|
Equipment
|
1,525
|
1,758
|
233
|
13%
|
1,606
|
|
4,707
|
5,500
|
|
|
Occupancy
|
2,216
|
2,247
|
31
|
1%
|
2,249
|
|
6,649
|
6,908
|
|
|
Payment systems related
expense
|
1,214
|
1,043
|
(171)
|
-16%
|
1,212
|
|
3,430
|
2,960
|
|
|
Professional
fees
|
1,147
|
1,091
|
(56)
|
-5%
|
1,161
|
|
3,169
|
3,389
|
|
|
Postage, printing and
office supplies
|
791
|
799
|
8
|
1%
|
737
|
|
2,332
|
2,420
|
|
|
Marketing
|
861
|
832
|
(29)
|
-3%
|
738
|
|
2,286
|
2,158
|
|
|
Communications
|
374
|
402
|
28
|
7%
|
381
|
|
1,137
|
1,199
|
|
|
Goodwill
impairment
|
-
|
-
|
-
|
0%
|
-
|
|
-
|
13,059
|
|
|
Other noninterest
expense
|
3,039
|
4,564
|
1,525
|
33%
|
3,503
|
|
8,964
|
13,299
|
|
|
Total noninterest
expense
|
23,003
|
23,489
|
486
|
2%
|
22,909
|
|
67,007
|
84,107
|
|
|
Net income (loss) before income
taxes
|
5,374
|
(19,673)
|
25,047
|
127%
|
(2,132)
|
|
1,554
|
(64,165)
|
|
|
Provision (benefit) for income
taxes
|
(676)
|
(7,265)
|
(6,589)
|
-91%
|
1,717
|
|
241
|
(21,819)
|
|
|
Net income (loss)
|
$
6,050
|
$
(12,408)
|
$
18,458
|
149%
|
$
(3,849)
|
|
$
1,313
|
$
(42,346)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
0.06
|
$
(0.79)
|
$
0.85
|
|
$
(0.04)
|
|
$
0.01
|
$
(2.71)
|
|
|
Diluted
|
$
0.06
|
$
(0.79)
|
$
0.85
|
|
$
(0.04)
|
|
$
0.01
|
$
(2.71)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares
|
94,776
|
15,520
|
79,256
|
|
92,123
|
|
84,776
|
15,510
|
|
|
Weighted average diluted
shares
|
103,144
|
15,520
|
87,624
|
|
92,123
|
|
101,002
|
15,510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax equivalent net interest
income
|
$
22,163
|
$
19,505
|
$
2,658
|
|
$
19,205
|
|
$
62,322
|
$
60,630
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 16
|
|
|
|
|
|
|
|
BALANCE
SHEETS
|
|
|
(Dollars in
thousands)
|
Sept.
30,
|
Sept.
30,
|
June
30,
|
Dec.
31,
|
Dec.
31,
|
|
|
|
2010
|
2009
|
2010
|
2009
|
2008
|
|
|
Assets:
|
|
|
|
|
|
|
|
Cash and due from
banks
|
$
57,216
|
$
46,772
|
$
45,685
|
$
47,708
|
$
58,046
|
|
|
Federal funds sold
|
4,605
|
3,287
|
13,431
|
20,559
|
6,682
|
|
|
Interest-bearing deposits in
other banks
|
113,144
|
201,583
|
109,781
|
234,830
|
50
|
|
|
Total cash and cash
equivalents
|
174,965
|
251,642
|
168,897
|
303,097
|
64,778
|
|
|
Investment securities
|
640,074
|
411,984
|
646,231
|
562,277
|
198,515
|
|
|
Total loans
|
1,575,451
|
1,822,001
|
1,602,032
|
1,724,842
|
2,064,796
|
|
|
Allowance for loan
losses
|
(41,753)
|
(39,075)
|
(43,329)
|
(38,490)
|
(28,920)
|
|
|
Loans, net
|
1,533,698
|
1,782,926
|
1,558,703
|
1,686,352
|
2,035,876
|
|
|
OREO, net
|
35,814
|
76,570
|
37,578
|
53,594
|
70,110
|
|
|
Goodwill and other
intangibles
|
418
|
716
|
477
|
637
|
14,054
|
|
|
Total interest earning
assets
|
2,335,882
|
2,440,506
|
2,374,787
|
2,544,415
|
2,274,448
|
|
|
Other assets
|
101,410
|
129,519
|
93,600
|
127,590
|
132,807
|
|
|
Total
assets
|
$
2,486,379
|
$
2,653,357
|
$
2,505,486
|
$
2,733,547
|
$
2,516,140
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders'
Equity:
|
|
|
|
|
|
|
|
Demand
|
$
565,543
|
$
522,629
|
$
533,865
|
$
542,215
|
$
478,292
|
|
|
Savings and interest-bearing
demand
|
442,892
|
401,256
|
433,001
|
422,838
|
346,206
|
|
|
Money market
|
675,402
|
651,198
|
661,913
|
657,306
|
615,588
|
|
|
Time deposits
|
291,218
|
580,743
|
375,321
|
524,525
|
584,293
|
|
|
Total deposits
|
1,975,055
|
2,155,826
|
2,004,100
|
2,146,884
|
2,024,379
|
|
|
Borrowings and subordinated
debentures
|
215,199
|
314,299
|
215,199
|
314,299
|
274,059
|
|
|
Reserve for unfunded
commitments
|
865
|
961
|
1,018
|
928
|
1,014
|
|
|
Other liabilities
|
20,553
|
20,588
|
17,757
|
22,378
|
18,501
|
|
|
Total
liabilities
|
2,211,672
|
2,491,674
|
2,238,074
|
2,484,489
|
2,317,953
|
|
|
Stockholders' equity
|
274,707
|
161,683
|
267,412
|
249,058
|
198,187
|
|
|
Total liabilities
and stockholders' equity
|
$
2,486,379
|
$
2,653,357
|
$
2,505,486
|
$
2,733,547
|
$
2,516,140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 17
|
|
|
|
|
|
|
|
AVERAGE
BALANCE SHEETS
|
|
|
(Dollars in
thousands)
|
QTD Sept.
30,
|
QTD Sept.
30,
|
QTD June
30,
|
Year to
date
|
Year to
date
|
|
|
|
2010
|
2009
|
2010
|
2010
|
2009
|
|
|
Cash and due from
banks
|
$
50,087
|
$
48,354
|
$
48,232
|
$
48,279
|
$
46,914
|
|
|
Federal funds sold
|
4,379
|
5,667
|
3,605
|
6,935
|
5,128
|
|
|
Interest-bearing deposits in
other banks
|
138,503
|
187,865
|
249,007
|
204,604
|
90,747
|
|
|
Total cash and cash
equivalents
|
192,969
|
241,886
|
300,844
|
259,818
|
142,789
|
|
|
Investment securities
|
640,216
|
387,830
|
578,669
|
592,391
|
296,140
|
|
|
Total loans
|
1,586,849
|
1,865,050
|
1,645,189
|
1,644,509
|
1,956,562
|
|
|
Allowance for loan
losses
|
(42,917)
|
(39,336)
|
(42,895)
|
(41,934)
|
(36,018)
|
|
|
Loans, net
|
1,543,932
|
1,825,714
|
1,602,294
|
1,602,575
|
1,920,544
|
|
|
Total interest earning
assets
|
2,372,072
|
2,460,793
|
2,477,349
|
2,449,722
|
2,363,608
|
|
|
Other assets
|
125,273
|
206,485
|
158,604
|
151,134
|
212,298
|
|
|
Total
assets
|
$
2,502,390
|
$
2,661,915
|
$
2,640,411
|
$
2,605,918
|
$
2,571,771
|
|
|
|
|
|
|
|
|
|
|
Demand
|
$
550,695
|
$
508,758
|
$
523,298
|
$
531,276
|
$
485,715
|
|
|
Savings and interest-bearing
demand
|
443,982
|
404,930
|
436,902
|
433,434
|
379,734
|
|
|
Money market
|
667,150
|
635,511
|
657,454
|
655,823
|
609,830
|
|
|
Time deposits
|
336,678
|
610,907
|
431,669
|
424,724
|
598,626
|
|
|
Total deposits
|
1,998,505
|
2,160,106
|
2,049,323
|
2,045,257
|
2,073,905
|
|
|
Borrowings and subordinated
debentures
|
215,199
|
314,299
|
313,210
|
280,540
|
300,643
|
|
|
Total interest bearing
liabilities
|
1,663,009
|
1,965,647
|
1,839,235
|
1,794,521
|
1,888,833
|
|
|
Other liabilities
|
17,164
|
20,035
|
17,118
|
17,839
|
17,774
|
|
|
Stockholders' equity
|
271,522
|
167,475
|
260,760
|
262,282
|
179,449
|
|
|
Total liabilities
and stockholders' equity
|
$
2,502,390
|
$
2,661,915
|
$
2,640,411
|
$
2,605,918
|
$
2,571,771
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents information with respect to the
Company's allowance for credit losses.
Table 18
|
|
|
|
|
ALLOWANCE
FOR CREDIT LOSSES
|
|
|
(Dollars in
thousands)
|
Year to
date
|
Year to
date
|
|
|
|
September
30,
|
September
30,
|
|
|
|
2010
|
2009
|
|
|
Allowance for credit losses,
beginning of period
|
$
39,418
|
$
29,934
|
|
|
Provision for credit
losses loans other than two-step loans
|
16,517
|
$
48,607
|
|
|
Provision for credit
losses two-step loans
|
442
|
6,217
|
|
|
Total provision for credit
losses
|
16,959
|
54,824
|
|
|
Loan charge-offs:
|
|
|
|
|
Commercial
|
3,961
|
8,869
|
|
|
Commercial real
estate construction
|
735
|
324
|
|
|
Residential real
estate construction
|
1,852
|
17,789
|
|
|
Two-step
residential construction
|
442
|
6,833
|
|
|
Total real estate
construction
|
3,029
|
24,946
|
|
|
Mortgage
|
1,897
|
5,280
|
|
|
Nonstandard
mortgage
|
2,147
|
2,975
|
|
|
Home
equity
|
2,134
|
2,014
|
|
|
Total real estate
mortgage
|
6,178
|
10,269
|
|
|
Commercial real
estate
|
734
|
646
|
|
|
Installment and
consumer
|
637
|
545
|
|
|
Overdraft
|
801
|
766
|
|
|
Total loan
charge-offs
|
15,340
|
46,041
|
|
|
Loan recoveries:
|
|
|
|
|
Commercial
|
914
|
734
|
|
|
Commercial real
estate construction
|
-
|
-
|
|
|
Residential real
estate construction
|
315
|
-
|
|
|
Two-step
residential construction
|
-
|
195
|
|
|
Total real estate
construction
|
315
|
195
|
|
|
Mortgage
|
61
|
3
|
|
|
Nonstandard
mortgage
|
4
|
1
|
|
|
Home
equity
|
25
|
1
|
|
|
Total real estate
mortgage
|
90
|
5
|
|
|
Commercial real
estate
|
25
|
147
|
|
|
Installment and
consumer
|
82
|
56
|
|
|
Overdraft
|
155
|
182
|
|
|
Total loan
recoveries
|
1,581
|
1,319
|
|
|
Net
charge-offs
|
13,759
|
44,722
|
|
|
|
|
|
|
|
Total allowance for credit
losses
|
$
42,618
|
$
40,036
|
|
|
Components of allowance for
credit losses:
|
|
|
|
|
Allowance for loan
losses
|
$
41,753
|
$
39,075
|
|
|
Reserve for unfunded
commitments
|
865
|
961
|
|
|
Total allowance for credit
losses
|
$
42,618
|
$
40,036
|
|
|
|
|
|
|
|
Net loan charge-offs to average
loans
|
1.12%
|
3.06%
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents information about the Company's
total delinquent loans.
Table 19
|
|
|
|
|
|
DELINQUENT
LOANS 30-89 DAYS PAST DUE AS A % OF LOAN CATEGORY
|
|
|
(Dollars in
thousands)
|
September
30,
|
September
30,
|
June
30,
|
|
|
|
2010
|
2009
|
2010
|
|
|
Commercial loans
|
0.36%
|
0.16%
|
0.14%
|
|
|
Real estate construction
loans
|
0.00%
|
5.68%
|
1.48%
|
|
|
Real estate mortgage
loans
|
0.43%
|
0.75%
|
0.18%
|
|
|
Commercial real estate
loans
|
0.34%
|
0.14%
|
0.04%
|
|
|
Installment and other consumer
loans
|
0.25%
|
0.09%
|
1.27%
|
|
|
|
|
|
|
|
|
Total delinquent loans 30-89
days past due
|
$
5,502
|
$
13,136
|
$
2,743
|
|
|
Delinquent loans to total
loans
|
0.35%
|
0.72%
|
0.17%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents information about the Company's
activity in other real estate owned.
Table 20
|
|
|
|
|
|
|
|
|
OTHER REAL
ESTATE OWNED ACTIVITY
|
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
Two-step
related OREO activity
|
Non two-step
related OREO activity
|
Total OREO
related activity
|
|
|
|
Amount
|
Number
|
Amount
|
Number
|
Amount
|
Number
|
|
|
Full year 2009:
|
|
|
|
|
|
|
|
|
Beginning balance January 1,
2009
|
$
60,022
|
251
|
$
10,088
|
37
|
$
70,110
|
288
|
|
|
Additions to
OREO
|
34,724
|
114
|
39,450
|
585
|
74,174
|
699
|
|
|
Capitalized
improvements
|
4,650
|
|
283
|
|
4,933
|
|
|
|
Valuation
adjustments
|
(14,704)
|
|
(3,858)
|
|
(18,562)
|
|
|
|
Disposition of OREO
properties
|
(59,030)
|
(243)
|
(18,031)
|
(72)
|
(77,061)
|
(315)
|
|
|
Ending balance Dec. 31,
2009
|
$
25,662
|
122
|
$
27,932
|
550
|
$
53,594
|
672
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly 2010
|
|
|
|
|
|
|
|
|
Additions to
OREO
|
288
|
2
|
3,559
|
13
|
3,847
|
15
|
|
|
Capitalized
improvements
|
987
|
|
169
|
|
1,156
|
|
|
|
Valuation
adjustments
|
(1,846)
|
|
(513)
|
|
(2,359)
|
|
|
|
Disposition of OREO
properties
|
(6,937)
|
(27)
|
(4,063)
|
(64)
|
(11,000)
|
(91)
|
|
|
Ending balance March 31,
2010
|
$
18,154
|
97
|
$
27,084
|
499
|
$
45,238
|
596
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
OREO
|
-
|
1
|
5,924
|
19
|
5,924
|
20
|
|
|
Capitalized
improvements
|
497
|
|
788
|
|
1,285
|
|
|
|
Valuation
adjustments
|
(493)
|
|
(764)
|
|
(1,257)
|
|
|
|
Disposition of OREO
properties
|
(5,197)
|
(18)
|
(8,415)
|
(152)
|
(13,612)
|
(170)
|
|
|
Ending balance June 30,
2010
|
$
12,961
|
80
|
$
24,617
|
366
|
$
37,578
|
446
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
OREO
|
-
|
|
4,515
|
53
|
4,515
|
53
|
|
|
Capitalized
improvements
|
377
|
|
227
|
|
604
|
|
|
|
Valuation
adjustments
|
(1,150)
|
|
(361)
|
|
(1,511)
|
|
|
|
Disposition of OREO
properties
|
(1,999)
|
(11)
|
(3,373)
|
(40)
|
(5,372)
|
(51)
|
|
|
Ending balance September 30,
2010
|
$
10,189
|
69
|
$
25,625
|
379
|
$
35,814
|
448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents information regarding common shares
outstanding at September 30, 2010 on
an actual and diluted basis.
Table 21
|
|
|
|
|
|
|
COMMON SHARE
AND DILUTIVE SHARE INFORMATION
|
|
|
(Shares in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
|
|
|
|
of
shares
|
|
|
|
|
|
Common shares outstanding at
September 30, 2010
|
96,424
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issuable on
conversion of series B preferred stock (1)
|
6,066
|
|
|
|
|
|
Dilutive impact of warrants
(2,3)
|
2,215
|
|
|
|
|
|
Dilutive impact of stock options
and restricted stock (3)
|
87
|
|
|
|
|
|
Total potential dilutive
shares (4)
|
104,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) 121,328 shares of series B
preferred stock outstanding at September 30, 2010.
|
|
|
|
|
|
(2) Warrants to purchase 240,000
shares at a price of $100 per series B preferred share outstanding
at September 30, 2010.
|
|
|
(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 $2.45 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE West Coast Bancorp
Copyright . 22 PR Newswire