WCBO West Coast Bancorp (MM)

- Diluted earnings per share of $.13 declined from $.49 in the first quarter of 2007. LAKE OSWEGO, Ore., April 21 /PRNewswire-FirstCall/ -- West Coast Bancorp (NASDAQ:WCBO) today announced quarterly earnings of $2.0 million or $.13 per diluted share for the first quarter of 2008, compared to first quarter 2007 earnings of $7.9 million or $.49 per diluted share. (Dollars in millions, except per Three months ended March 31, share data) 2008 2007 % Change Diluted Earnings Per Share $0.13 $0.49 -73% Return On Average Equity 3.8% 15.7% Return On Average Equity, Tangible* 4.3% 17.1% Total Period End Loans $2,194 $2,021 9% Total Period End Deposits $2,062 $2,029 2% * Return on Average Equity, Tangible is a non-GAAP measure that we define and calculate as net income excluding intangible asset amortization, net of tax, divided by average equity less average intangible assets. See financial tables for a reconciliation to the GAAP measure. "The first quarter 2008 operating results were significantly impacted by current economic conditions in the residential real estate markets and are disappointing," said Robert D. Sznewajs, President and Chief Executive Officer. "In this challenging environment, the entire Company is focused on managing its resources prudently, while remaining committed to our long-term strategic plan. Positively, many of our core businesses are performing very well in this difficult operating environment." Financial Results: Total loan growth over the 12 months ended March 31, 2008 was $174 million or nearly 9%, with the majority of the growth in commercial loan and residential mortgage loan categories. Since year end 2007, the two-step loan balances declined $52 million or 20% while total two-step commitments fell $96 million or 28%. Average total deposits grew 4% or $71 million from the first quarter of 2007, with the majority of the increase in money market and certificate of deposit categories. First quarter 2008 net interest income of $23.6 million declined $4.3 million or 15% from first quarter last year. A positive loan volume variance was more than offset by the $4.2 million in interest reversals associated with two-step loans moved to nonaccrual status. As a result, the first quarter net interest margin fell 70 basis points to 3.92% from 4.62% in the fourth quarter of 2007. As shown in the following table, interest reversals in the most recent quarter and interest restitution expense in the fourth quarter 2007 each had a significant effect on the net interest margin. The following table reconciles the net interest margin for the periods shown to the net interest margin excluding those effects: West Coast Bancorp Net interest margin reconciliations(1) For the three months ended March 31, December 31, (Unaudited) 2008 2007 Change Net interest margin 3.92% 4.62% -0.70% Add: impact of two-step loan interest reversals 0.69% 0.08% 0.61% Net interest margin excluding impact of loan interest reversals 4.61% 4.70% -0.09% For the three months ended March 31, December 31, 2008 2007 Change Net interest margin 3.92% 4.62% -0.70% Add: impact of interest restitution - 0.18% -0.18% Net interest margin excluding impact of interest restitution 3.92% 4.80% -0.88% (1) Management uses this net interest margin data internally and has disclosed it to investors based on its belief it makes it easier to compare the Company's performance across the periods shown by highlighting the impact from material factors. As shown above, excluding the effects of interest reversals on two-step loans in both the first quarter of 2008 and in the fourth quarter of 2007, the net interest margin would have been 4.61% and 4.70% in those quarters, respectively. Excluding the effects of the interest restitution incurred in the fourth quarter 2007, that arose out of failure to comply with certain loan disclosure requirements, the net interest margin contracted 88 basis points in the current quarter. Interest reversals on two-step loans accounted for 61 basis points of this linked quarter decline. The lower value of non-interest bearing demand deposits and the lag in our reduction in funding costs relative to the decline in loan yields equally explains the remaining 27 basis points contraction in the net interest margin. The latter effects are largely due to the Federal Reserve's decision to aggressively decrease the Federal Funds Rate during the first quarter. First quarter non-interest income rose $2.2 million or 27% from the same quarter in 2007. Excluding a $.7 million gain from the VISA Initial Public Offering, total non-interest income expanded 19% with very solid growth across our fee income businesses. Compared to the same quarter in 2007, payment systems revenues increased $.5 million or 27% with excellent growth in card-related revenues. Total deposit service charge revenues also grew strongly, up 26% or $.8 million year-over-year first quarter primarily attributable to an 11% growth in both consumer and business transaction accounts, along with higher transaction volumes and lower earnings credit rates on business accounts over the same period. Gain on sales of loans declined 34% or $.4 million since the first quarter 2007 as a result of significantly lower residential mortgage market activity. We realized a $.6 million gain on sales of investment securities in the most recent quarter. Compared to the first quarter of 2007, total non-interest expense increased $1.2 million or 6% to $22.2 million in the most recent quarter. Personnel expense declined slightly as lower performance-related pay more than offset annual merit increases, additional team members, and materially lower deferred construction loan origination costs. Enhanced system and product capabilities along with new and relocated branches over the past 12 months explain the majority of the equipment and occupancy expense increases from the same quarter in 2007. The 27% or $.2 million increase in year-over-year fourth-quarter payment system expense was largely due to significantly higher transaction volumes across our payment systems product offerings. The Company recorded a first quarter 2008 total provision for credit losses of $8.7 million. Of that amount, the provision related to the two-step portfolio was a modest $.8 million in the quarter. The assumptions used in establishing the allowance for credit losses for the two-step portfolio at December 31, 2007, have generally proven sound based on current analysis but without significant data on sales of OREO property at this stage. The provision associated with all other loans was $7.9 million. During the first quarter, risk rating changes in our commercial residential construction and development portfolio and, to a lesser extent, in our commercial loan portfolio, resulted in increased provision expense. There is no immediate loss expected from these loans for which there was an adverse change in risk rating. Total net charge-offs in the first quarter were $21.2 million, of which $20.0 million related to the two-step portfolio. The charge-offs associated with the two-step portfolio in the first quarter were applied against the allowance for credit losses for the portfolio established at year end 2007, leaving approximately $11.8 million at March 31, 2008. The charge-offs and interest reversal amounts in the two-step portfolio during the first quarter reflect a modification in our loan policy regarding the timing of moving particular loans to nonaccrual status. The application of the modified loan policy caused us to recognize significant loan charge-offs and interest reversals associated with the loans put on nonaccrual status in the first quarter that otherwise would have been recognized in later periods. The first quarter 2008 annualized net charge-offs percentage for loans other than two-step was .21%, down from .28% in the first quarter of 2007. At March 31, 2008, the total allowance for credit losses was $42.5 million, or 1.93% of total loans, including $11.8 million associated with the two-step loan portfolio and $30.7 million related to the remainder of the loan portfolio. The allowance for two-step credit losses in the two-step portfolio at March 31, 2008, was 7.9% of total two-step commitments associated with performing loans as compared to 8.9% at year-end 2007. The allowance for credit losses associated with loans other than two-step loans was 1.55% of such outstanding loan balances at March 31, 2008, up from 1.25% at December 31, 2007, reflecting the above-mentioned risk rating changes. Total non-performing assets were $105 million or 4.0% of total assets at March 31, 2008, up from $30 million or 1.12%, respectively, as of December 31, 2007. The non-performing assets related to the two-step loan portfolio were $94 million or 3.60% of total assets, up from $24 million or .9% at year-end 2007. Of the $89 million in nonaccrual two-step loans at March 31, 2008, $14 million in balances were current on loan payments and $25 million were 30-89 days past due. At March 31, 2008, there were $10 million of non-performing loans outside the two-step portfolio or .39% of total assets, as compared to $6 million or .22% at December 31, 2007. For more information on non-performing loans and assets, see tables 4 through 9. The Company remains well capitalized. At March 31, 2008, the total capital ratio for West Coast Bank was approximately 10.55%, substantially unchanged from the 10.54% and 10.63% at December 31, 2007, and March 31, 2007, respectively. Other: The Company will hold a Webcast conference call Monday, April 21, 2008, at 11:00 a.m. Pacific Time, during which the Company will discuss first quarter 2008 results as well as management's expectations for the year. To access the conference call via a live Webcast, go to http://www.wcb.com/ and click on Investor Relations and the "1st Quarter 2008 Earnings Conference Call" tab. The conference call may also be accessed by dialing (877) 604-2074. Conference ID#: 39159253 a few minutes prior to 8:30 a.m. PDT. The call will be available for replay by accessing the Company's website at http://www.wcb.comand/ following the same instructions. West Coast Bancorp, one of Oregon Business Magazine's 100 Best Companies to Work For, is a Northwest bank holding company with $2.6 billion in assets, and 64 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 http://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. Actual results could be quite different from those expressed or implied by the forward-looking statements. Do not unduly rely on forward-looking statements. They give our 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, factors identified in our Annual Report on Form 10-K for the year ended December 31, 2007, including under the heading "Forward Looking Statement Disclosure" and in Item 1A. West Coast Bancorp Consolidated Statements of Income (Loss) (Unaudited) (Dollars and shares in thousands, except per Three months ended Twelve months ended share data) March 31, December 31, December 31, 2008 2007 2007 2007 2006 Net interest income Interest and fees on loans $35,073 $39,911 $42,115 $169,180 $136,193 Interest on investment securities 3,098 3,742 3,178 13,446 13,737 Other interest income 141 119 235 564 868 Total interest income 38,312 43,772 45,528 183,190 150,798 Interest expense on deposit accounts 11,613 12,988 14,020 55,036 40,927 Interest on borrowings and subordinated debentures 3,122 2,900 3,233 13,434 8,999 Total interest expense 14,735 15,888 17,253 68,470 49,926 Net interest income 23,577 27,884 28,275 114,720 100,872 Provision for credit losses 8,725 2,800 29,956 38,956 2,733 Non-interest income Service charges on deposit accounts 3,635 2,885 3,698 12,932 11,096 Payment systems related revenue 2,131 1,678 2,197 8,009 6,738 Trust and investment services revenues 1,585 1,492 1,587 6,390 5,480 Gains on sales of loans 860 1,304 443 3,364 2,962 Other 1,410 674 690 2,870 2,506 Gains (losses) on sales of securities 590 - - (67) (686) Total non-interest income 10,211 8,033 8,615 33,498 28,096 Non-interest expense Salaries and employee benefits 12,355 12,513 11,418 49,787 47,240 Equipment 1,751 1,525 1,852 6,544 5,477 Occupancy 2,375 2,049 2,242 8,548 7,048 Payment systems related expense 843 665 810 3,143 2,378 Professional fees 800 421 621 2,072 2,484 Postage, printing and office supplies 966 875 1,079 3,896 3,558 Marketing 795 1,123 1,233 4,524 4,967 Communications 402 434 421 1,624 1,370 Other non-interest expense 1,934 1,432 484 5,161 7,143 Total non-interest expense 22,221 21,037 20,160 85,299 81,665 Income (loss) before income taxes 2,842 12,080 (13,226) 23,963 44,570 Provision (benefit) for income taxes 842 4,216 (5,739) 7,121 15,310 Net income (loss) $2,000 $7,864 $(7,487) $16,842 $29,260 Basic earnings (loss) per share $0.13 $0.51 $(0.48) $1.09 $1.95 Diluted earnings (loss) per share $0.13 $0.49 $(0.48) $1.05 $1.86 Weighted average common shares 15,445 15,482 15,445 15,507 15,038 Weighted average diluted shares 15,589 16,127 15,445 16,045 15,730 Tax equivalent net interest income $24,027 $28,283 $28,732 $116,361 $102,432 West Coast Bancorp Consolidated Balance Sheets (Dollars and shares in thousands, March 31, March 31, December 31, unaudited) 2008 2007 2007 Assets: Cash and cash equivalents $88,205 $89,578 $113,802 Investments 242,163 288,005 269,425 Total loans 2,194,311 2,020,788 2,172,669 Allowance for loan losses (39,602) (24,464) (46,917) Loans, net 2,154,709 1,996,324 2,125,752 Goodwill and other intangibles 14,372 14,881 14,491 Other assets 121,203 97,176 123,144 Total assets $2,620,652 $2,485,964 $2,646,614 Liabilities and Stockholders' Equity: Demand $472,116 $471,767 $501,506 Savings and interest-bearing demand 366,267 369,350 364,971 Money market 652,559 640,530 678,090 Time deposits 570,905 547,719 550,265 Total deposits 2,061,847 2,029,366 2,094,832 Borrowings and subordinated debentures 306,052 211,500 301,100 Reserve for unfunded commitments 2,852 - 7,986 Other liabilities 42,206 37,037 34,455 Total liabilities 2,412,957 2,277,903 2,438,373 Stockholders' equity 207,695 208,061 208,241 Total liabilities and stockholders' equity $2,620,652 $2,485,964 $2,646,614 Common shares outstanding period end 15,580 15,630 15,593 Book value per common share $13.33 $13.31 $13.35 Tangible book value per common share $12.41 $12.36 $12.43 West Coast Bancorp Period End Loan Portfolio By Category (Dollars in thousands, March 31, March 31, Change December 31, unaudited) 2008 2007 Amount % 2007 % Commercial loans $529,519 $482,730 $46,789 10% $504,101 5% Real estate construction loans 1 464,028 440,391 23,637 5% 517,988 -10% Real estate mortgage loans 356,185 282,827 73,358 26% 330,803 8% Commercial real estate loans 819,586 788,964 30,622 4% 796,622 3% Installment and other consumer loans 24,993 25,876 (883) -3% 23,155 8% Total loans $2,194,311 $2,020,788 $173,523 9% $2,172,669 1% (1)Two-step residential construction loan balances 211,406 216,371 (4,965) -2% 262,952 -20% Total loans other than two-step loans 1,982,905 1,804,417 178,488 10% 1,909,717 4% Total loans $2,194,311 $2,020,788 $173,523 9% $2,172,669 1% The following table reconciles return on average equity to return on average equity tangible. West Coast Bancorp Return on average equity tangible reconciliation(1) For the three For the twelve months ended months ended March 31, Dec. 31, (Dollars in thousands, unaudited) 2008 2007 2007 2006 Net income $2,000 $7,864 $16,842 $29,260 Add: intangible asset amortization, net of tax* 77 98 351 283 Net income, tangible $2,077 $7,962 $17,193 $29,543 Average shareholders' equity $211,206 $203,391 $212,349 $177,648 Less: average intangibles (14,430) (14,955) (14,740) (8,039) Average shareholders' equity, tangible $196,776 $188,436 $197,609 $169,609 *Federal income tax provision applied at 35%. Return on average equity 3.8% 15.7% 7.9% 16.5% Return on average equity, tangible 4.3% 17.1% 8.7% 17.4% (1) Management uses return on equity, tangible internally and has disclosed it to investors based on its belief that the figure makes it easier to compare the Company's performance to other financial institutions that do not have merger-related intangible assets and is commonly used in the industry. Ratios have been annualized where appropriate. The following table reconciles non-interest income to non-interest income excluding the impact of the VISA IPO gain in the first quarter of 2008. West Coast Bancorp Non-interest income reconciliation(1) For the three months ended March 31, March 31, % 2008 2007 Change Change Non-interest income $10,211 $8,033 $2,178 27% Exclude: impact of VISA IPO gain 680 - 680 Non-interest income excluding the VISA IPO gain $9,531 $8,033 $1,498 19% (1) Management uses this non-interest income reconciliation internally and has disclosed it to investors based on its belief it makes it easier to compare the Company's performance to prior periods given the impact of certain unusual transactions. West Coast Bancorp Financial Information (Dollars in thousands except for per share data, unaudited) (all rates have been annualized First First Fourth Year to Year to where Quarter Quarter Quarter date date appropriate) 2008 2007 2007 2007 2006 PERFORMANCE RATIOS - Return on average assets 0.31% 1.31% (1.14%) 0.66% 1.33% - Return on average common equity 3.81% 15.68% (13.51%) 7.93% 16.47% - Return on average tangible equity 4.25% 17.13% (14.31%) 8.69% 17.42% - Non-interest income to average assets 1.58% 1.33% 1.31% 1.32% 1.28% - Non-interest expense to average assets 3.44% 3.49% 3.06% 3.36% 3.72% - Efficiency ratio, tax equivalent 66.0% 57.9% 54.0% 56.9% 62.2% NET INTEREST MARGIN - Yield on interest- earning assets 6.33% 7.79% 7.39% 7.72% 7.37% - Rate on interest- bearing liabilities 3.14% 3.68% 3.66% 3.76% 3.27% - Net interest spread 3.19% 4.11% 3.73% 3.96% 4.10% - Net interest margin 3.92% 4.99% 4.62% 4.86% 4.96% AVERAGE ASSETS - Investment securities $265,304 $312,780 $273,328 $284,582 $298,758 - Commercial loans 508,566 467,578 504,330 497,975 418,955 - Real estate construction loans 501,459 399,119 525,110 477,055 274,856 - Real estate mortgage loans 342,315 282,628 314,497 296,859 265,217 - Commercial real estate loans 800,350 799,576 804,585 798,383 759,023 - Installment and other consumer loans 24,245 25,772 23,320 24,705 27,726 - Total loans 2,176,935 1,974,673 2,171,842 2,094,977 1,745,777 - Total interest earning assets 2,464,280 2,300,764 2,468,863 2,394,958 2,066,217 - Other assets 132,456 142,069 140,963 142,760 127,412 - Total assets $2,596,736 $2,442,833 $2,609,826 $2,537,718 $2,193,629 AVERAGE LIABILITIES & EQUITY - Demand deposits $464,088 $463,226 $492,636 $479,310 $466,282 - Savings and Interest bearing demand 358,986 349,050 367,359 351,521 339,082 - Money market 662,508 642,858 676,908 665,037 558,735 - Time deposits 579,157 538,304 573,967 554,263 457,077 - Total deposits 2,064,739 1,993,438 2,110,870 2,050,131 1,821,176 - Borrowings and subordinated debentures 285,138 220,534 251,868 250,481 170,790 - Total interest bearing liabilities 1,885,789 1,750,746 1,870,103 1,821,299 1,525,683 - Other liabilities 499,741 488,696 519,833 504,070 490,298 - Total liabilities 2,385,530 2,239,442 2,389,936 2,325,369 2,015,981 - Average common equity 211,206 203,391 219,890 212,349 177,648 - Total average liabilities and common equity $2,596,736 $2,442,833 $2,609,826 $2,537,718 $2,193,629 AVERAGE ASSET/LIABILITY RATIOS - Average stockholders' equity to average assets 8.13% 8.33% 8.43% 8.37% 8.10% - Average int. earning assets to int. bearing liabilities 130.7% 131.4% 137.4% 131.5% 135.4% - Average loans to average assets 83.8% 80.8% 83.2% 82.6% 79.6% - Interest bearing deposits to assets 59.0% 62.6% 59.2% 59.0% 61.8% The following table presents information with respect to the change in the Company's total allowance for credit losses. West Coast Bancorp Total Loan Portfolio Allowance For Credit Losses and Net Charge-offs Quarter Quarter Quarter ended ended ended March 31, March 31, December 31, (Dollars in thousands, unaudited) 2008 2007 2007 Allowance for credit losses, beginning of period $54,903 $23,017 $28,506 Provision for credit losses 8,725 2,800 29,956 Charge-offs 21,393 1,520 3,636 Recoveries 219 167 77 Net charge-offs 21,174 1,353 3,559 Total allowance for credit losses $42,454 $24,464 $54,903 Components of allowance for credit losses Allowance for loan losses $39,602 $24,464 $46,917 Reserve for unfunded commitments 2,852 - 7,986 Total allowance for credit losses $42,454 $24,464 $54,903 Net loan charge-offs to average loans (annualized) 3.91% 0.28% 0.65% Allowance for loan losses to total loans 1.80% 1.21% 2.16% Allowance for credit losses to total loans 1.93% 1.21% 2.53% Allowance for loan losses to nonperforming loans 40% 644% 178% Allowance for loan losses to nonperforming assets 38% 644% 158% Year to date Year to date December 31, December 31, (Dollars in thousands, unaudited) 2007 2006 Allowance for credit losses, beginning of period $23,017 $20,469 Provision for credit losses 38,956 2,733 Charge-offs 7,713 1,921 Recoveries 643 849 Net Charge-offs 7,070 1,072 Allowance for loan losses, from acquisition - 887 Total allowance for loan losses $54,903 $23,017 Components of allowance for credit losses Allowance for loan losses $46,917 $23,017 Reserve for unfunded commitments 7,986 - Total allowance for credit losses $54,903 $23,017 Net loan charge-offs to average loans 0.34% 0.06% The following table presents information about the Company's total nonperforming assets and delinquent loans. West Coast Bancorp Total Loan Portfolio Non-performing Assets and Delinquencies March 31, March 31, December 31, (Dollars in thousands, unaudited) 2008 2007 2007 Non-accruing loans $99,038 $3,800 $26,427 90 day past and accruing interest - - - Total non-performing loans 99,038 3,800 26,427 Other real estate owned 5,688 - 3,255 Total non-performing assets $104,726 $3,800 $29,682 Delinquent loans 30-89 days past due, not in nonaccrual status $27,095 $8,707 $44,484 Non-performing loans to total loans 4.51% 0.19% 1.22% Non-performing assets to total assets 4.00% 0.15% 1.12% Delinquent loans to total loans 1.23% 0.43% 2.05% The following table presents information about the Company's activity in other real estate owned. West Coast Bancorp Other real estate owned ("OREO") activity Three Three Three months months months ended ended ended March 31, March 31, December 31, (Dollars in thousands, unaudited) 2008 2007 2007 Beginning balance $3,255 $- $1,183 Additions to other real estate owned including capitalized costs 2,707 340 2,412 Disposition of other real estate owned (274) (340) (340) Ending other real estate owned balance $5,688 $- $3,255 The following table presents information with respect to the change in the Company's allowance for credit losses in the two-step residential construction loan portfolio. West Coast Bancorp Two-Step Loan Portfolio Allowance For Credit Losses and Net Charge-offs Two-Step Portfolio Quarter Quarter Quarter ended ended ended March 31, March 31, December 31, (Dollars in thousands, unaudited) 2008 2007 2007 Allowance for credit losses, beginning of period $31,065 $2,618 $5,196 Provision for credit losses 780 624 27,736 Charge-offs 20,099 - 1,867 Recoveries 66 - - Net charge-offs 20,033 - 1,867 Total allowance for credit losses $11,812 $3,242 $31,065 Components of allowance for credit losses Allowance for loan losses $9,991 $3,242 $23,917 Reserve for unfunded commitments 1,821 - 7,148 Total allowance for credit losses $11,812 $3,242 $31,065 Net loan charge-offs to average total loans (annualized) 3.70% 0.00% 0.34% Allowance for two-step loan losses to nonperforming two-step loans 11% 405% 116% Allowance for two-step credit losses to total two-step loans 5.59% 1.50% 11.81% Allowance for two-step loan losses to total two-step loans 4.73% 1.50% 9.10% Allowance for two-step loan losses to nonperforming two-step assets 11% 405% 100% Year to date Year to date December 31, December 31, (Dollars in thousands, unaudited) 2007 2006 Allowance for credit losses, beginning of period $2,618 $1,166 Provision for credit losses 30,980 1,452 Charge-offs 2,540 - Recoveries 7 - Net Charge-offs 2,533 - Total allowance for credit losses $31,065 $2,618 Components of allowance for credit losses Allowance for loan losses $23,917 $2,618 Reserve for unfunded commitments 7,148 - Total allowance for credit losses $31,065 $2,618 Net loan charge-offs to average loans 0.12% 0.00% The following table presents information about the Company's nonperforming assets and delinquencies in the two-step residential construction loan portfolio. West Coast Bancorp Two-Step Residential Construction Loans Nonperforming Assets and Delinquencies March 31, March 31, December 31, (Dollars in thousands, unaudited) 2008 2007 2007 Nonaccrual two-step loans $88,784 $800 $20,545 90 day past due and accruing interest - - - Total nonperforming two-step loans 88,784 800 20,545 Other real estate owned two-step 5,688 - 3,255 Total nonperforming two-step assets $94,472 $800 $23,800 Delinquent two-step loans 30-89 days past due, not in nonaccrual status $14,269 $4,017 $36,778 Nonperforming two-step loans to total two-step loans 42.00% 0.37% 7.81% Nonperforming two-step assets to total assets 3.60% 0.03% 0.90% Delinquent two-step loans to total two-step loans 6.75% 1.86% 13.99% The following table presents information with respect to the change in the Company's allowance for credit losses for the loans other than two-step residential construction loans. West Coast Bancorp Loans Other than Two-Step Loans Allowance For Credit Losses and Net Charge-offs loans other than two-step loans Quarter Quarter Quarter ended ended ended March 31, March 31, December 31, (Dollars in thousands, unaudited) 2008 2007 2007 Allowance for credit losses, beginning of period $23,838 $20,399 $23,310 Provision for credit losses 7,945 2,176 2,220 Charge-offs 1,294 1,520 1,769 Recoveries 153 167 77 Net charge-offs 1,141 1,353 1,692 Total allowance for credit losses $30,642 $21,222 $23,838 Components of allowance for credit losses Allowance for loan losses $29,611 $21,222 $23,000 Reserve for unfunded commitments 1,031 - 838 Total allowance for credit losses $30,642 $21,222 $23,838 Net loan charge-offs to average total loans (annualized) 0.21% 0.28% 0.31% Allowance for non two-step loan losses to total non two-step loans 1.49% 1.18% 1.20% Allowance for non two-step credit losses to total non two-step loans 1.55% 1.18% 1.25% Allowance for non two-step loan losses to non-performing non two-step loans 289% 707% 391% Allowance for non two-step loan losses to non-performing non two-step assets 289% 707% 391% Year to date Year to date December 31, December 31, (Dollars in thousands, unaudited) 2007 2006 Allowance for credit losses, beginning of period $20,399 $19,303 Provision for credit losses 7,976 1,281 Charge-offs 5,173 1,921 Recoveries 636 849 Net Charge-offs 4,537 1,072 Allowance for loan losses, from acquisition - 887 Total allowance for credit losses $23,838 $20,399 Components of allowance for credit losses Allowance for loan losses $23,000 $20,399 Reserve for unfunded commitments 838 - Total allowance for credit losses $23,838 $20,399 Net loan charge-offs to average loans 0.22% 0.06% The following table presents information about the Company's nonperforming assets and delinquencies in the loan portfolio excluding two-step residential construction loans. West Coast Bancorp Loans Other than Two-Step Loans Nonperforming Assets and Delinquencies March 31, March 31, December 31, (Dollars in thousands, unaudited) 2008 2007 2007 Nonaccruing non two-step loans $10,254 $3,000 $5,882 90 day past and accruing interest - - - Total nonperforming non-step loans 10,254 3,000 5,882 Other real estate owned non two-step - - - Total nonperforming non two-step assets $10,254 $3,000 $5,882 Delinquent non two-step loans 30-89 days past due, not in nonaccrual status $12,826 $4,690 $7,706 Nonperforming non two-step loans to total non two-step loans 0.52% 0.17% 0.31% Nonperforming non two-step assets to total assets 0.39% 0.12% 0.22% Delinquent non two-step loans to total non two-step loans 0.65% 0.26% 0.40% DATASOURCE: West Coast Bancorp CONTACT: Robert D. Sznewajs, President & CEO, +1-503-598-3243, or Anders Giltvedt, Executive Vice President & CFO, +1-503-598-3250, both of West Coast Bancorp Web site: http://www.wcb.com/

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