WCBO West Coast Bancorp (MM)

- West Coast Bank's total capital ratio increased to 10.93% at December 31, 2008 from 10.54% at year end 2007. West Coast Bank continues to be well capitalized. LAKE OSWEGO, Ore., Jan. 19 /PRNewswire-FirstCall/ -- West Coast Bancorp (NASDAQ:WCBO) today announced a quarterly loss of $8.2 million or $.53 per diluted share for the fourth quarter of 2008, compared to a fourth quarter 2007 loss of $7.5 million or $.48 per diluted share. For the full year 2008 the Company reported a loss of $5.8 million or $.38 per diluted share, compared to net income of $16.8 million or $1.05 per diluted share for the same period in 2007. (Dollars in thousands, except per GAAP CORE* share data, December 31, December 31, unaudited) 2008 2007 Change 2008 2007 Change For the three months ended: Net loss $(8,197) $(7,487) -9% $(8,197) $(7,487) -9% Net loss per diluted share ($0.53) ($0.48) -10% ($0.53) ($0.48) -10% Return on average equity -16.3% -13.5% -2.8% -16.3% -13.5% -2.8% For the twelve months ended: Net income (loss) $(5,829) $16,842 -135% $(1,709) $16,842 -110% Net income (loss) per diluted share ($0.38) $1.05 -136% ($0.11) $1.05 -110% West Coast Bancorp Tier 1 capital ratio 9.95% 9.88% 0.07% West Coast Bancorp Total capital ratio 11.20% 11.15% 0.05% West Coast Bank Tier 1 capital ratio 9.68% 9.28% 0.40% West Coast Bank Total capital ratio 10.93% 10.54% 0.39% Total period end loans $2,064,796 $2,172,669 -5% Total period end deposits $2,024,379 $2,094,832 -3% *Core net income (loss) for the periods shown, and numbers derived using core net income (loss), including core earnings (loss) per diluted share, and core return on average equity, are non-GAAP (Generally Accepted Accounting Principles) financial measures derived by adjusting the Company's GAAP net income (loss) to remove the negative impact of third quarter 2008 impairment charges of approximately $4.1 million, after tax, or $.27 per diluted share. 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.See financial tables 1 and 2 below for a reconciliation to the GAAP measure. "Despite a very challenging environment, West Coast Bank improved its total capital ratio to approximately 10.93% at December 31, 2008, and remained well capitalized for regulatory purposes despite incurring an operating loss in the fourth quarter of 2008," said Robert D. Sznewajs, President and CEO. "Careful management of risk-weighted assets during the year coupled with a fourth quarter $9.8 million capital contribution from Bancorp to the Bank related to an inter-company tax settlement enabled our Bank to build this important ratio throughout 2008. In response to the current situation, many cost-saving initiatives were put in place during the last half of 2008 to reduce the Bank's operating expenses and to offset some of the additional expenses associated with operating in this environment. The annual benefit associated with these cost-saving initiatives is expected to be in excess of $10 million in 2009. The recession has had a dramatic impact on the residential housing market and affected our residential construction loan portfolio, including two-step and non-standard mortgages. However, the credit quality in the remaining $1.84 billion loan portfolio, which represents 89% of total loans, has performed relatively well in these difficult economic conditions. The ratio of non-performing assets to total assets was only 1.09% in the remainder of the portfolio at year end 2008." Financial Results: The year end 2008 total loan balance of $2.065 billion declined $108 million or 5% from December 31, 2007. Excluding the $210 million or 80% reduction in two-step loan balances, year-over-year loan growth was 5% or $102 million, with expansion centered in the commercial real estate and residential mortgage loan categories. At year end 2008, the remaining two-step loan balance of $53 million represented less than 3% of total loans, down from $263 million or 12%, respectively, a year ago. Fourth quarter 2008 average total deposits of $2.027 billion declined 4% from the final quarter of 2007, with lower average per account demand deposit and money market balances causing the majority of the decline. The fourth quarter average loan to average deposit ratio of 103% remained consistent with the ratio in the same quarter of 2007. Fourth quarter 2008 net interest income declined $7.1 million to $21.1 million from the fourth quarter last year predominantly due to the 92 basis point compression in the net interest margin to 3.70% and from lower earning assets. The net interest margin contracted as a result of the declining benefit from non-interest bearing demand deposits, and a 52 basis point contraction in the net interest spread. Lower real estate construction loan fees and higher interest reversals negatively impacted the net interest margin by 18 and 14 basis points, respectively, in the final quarter of 2008 relative to the same quarter in 2007. The remaining net interest margin contraction resulted from an inability to match the larger than anticipated decline in the Federal Funds rate with a corresponding reduction in funding costs due to market conditions. Full year 2008 net interest income decreased $23 million, primarily due to a 96 basis point decline in the net interest margin and also from a lower earning asset base. Total non-interest income of $4.3 million in the fourth quarter 2008 declined $4.3 million from the same period in 2007. OREO valuation adjustments totaling $3.7 million were recorded during the most recent quarter compared to no such charges in the final quarter of 2007. Re-appraisal of two-step OREO properties accounted for $3.2 million of this amount. We also recognized a $.3 million OREO loss upon disposition of 28 two-step OREO properties. Including 13 short sales, we disposed of a total of 41 two-step related properties during the fourth quarter with total proceeds of $11.9 million. During the second and third quarters of 2008 we sold 23 and 31 properties, respectively. At year end 2008 there were 251 properties in the two-step OREO portfolio. (See table 8 for details.) As a result of the 6% growth in the number of consumer and business deposit transaction accounts over the past 12 months, fourth quarter 2008 total deposit service charge and payment system revenues improved 4% and 1%, respectively, from the same quarter in 2007. Likely related to the slowing economy, the transaction volumes per account declined in the most recent quarter. The uncertainty surrounding the economy and equity markets contributed to a $.5 million reduction in trust and investment revenues year- over-year fourth quarter. Gain on sales of loans declined $.2 million in the most recent quarter primarily from the secondary market for SBA loans effectively being shut down. Fourth quarter 2008 total non-interest expense of $21.8 million increased $1.7 million or 8% from the same period of 2007. Personnel expense fell 6% or $.7 million from lower salary, incentive and benefit costs despite a $.6 million decline in deferred construction loan origination costs. The primary negative year-over-year fourth quarter non-interest expense variances included a $.5 million increase in FDIC insurance premium expense and a $1.2 million increase in two-step property collection and disposition expenses during the most recent quarter. There were no such two-step expenses in the final quarter of 2007. The fourth quarter of 2007 also included a reversal of an accrued contingent legal liability of $1.4 million, which reduced other non-interest expense in that period. Capital: West Coast Bank continued to be well capitalized for regulatory purposes. West Coast Bank's total capital ratios ended 2008 at 10.93% up from 10.78% at the end of the third quarter of 2008 and up from 10.54% at December 31, 2007. West Coast Bank's tier 1 capital ratio at 9.68% and leverage ratio of 9.19% also improved during 2008 and were significantly above the well capitalized regulatory threshold at year end 2008. The enhanced Bank capital ratios were primarily accomplished by reducing the Bank's loan portfolio and management of risk-weighted assets throughout 2008. In the fourth quarter of 2008, Bancorp also made a capital contribution to the Bank of $9.8 million associated with an inter-company tax settlement related to current and prior periods, which also helped improve the Bank capital ratios. The following table shows the Company's capital ratios for the indicated periods. Risk based capital ratios Capital Ratios (Unaudited) 12/31/08 12/31/07 09/30/08 Excess over Well well capitalized capitalized West Coast Bancorp Ratio minimum minimum Ratio Ratio Tier 1 capital ratio 9.95% 6.00% 3.95% 9.88% 10.16% Total capital ratio 11.20% 10.00% 1.20% 11.15% 11.42% Leverage ratio 9.45% 5.00% 4.45% 9.41% 9.56% Tangible common equity to tangible assets 7.35% 7.36% West Coast Bank Tier 1 capital ratio 9.68% 6.00% 3.68% 9.28% 9.52% Total capital ratio 10.93% 10.00% 0.93% 10.54% 10.78% Leverage ratio 9.19% 5.00% 4.19% 8.83% 8.91% Credit Quality: The Company recorded a fourth quarter 2008 total provision for credit losses of $16.5 million, compared to $30.0 million in the same quarter of 2007, and $9.1 million in the third quarter of 2008. The provision related to the two-step portfolio was $4.8 million in the final quarter of 2008 compared to $27.7 million in the fourth quarter of 2007, and $2.0 million in the third quarter of 2008. The probability of default and severity of loss upon default for two-step loans were impacted by the current weak economic environment and declining real estate values in our market areas. There was only $3.1 million in accruing two-step loans at year end 2008. The future provision requirements and OREO valuation adjustments associated with two-step loans will be driven by future re-appraisals of properties. Each two-step property is re-appraised within 45 days of its expected foreclosure date. The provision for credit losses associated with loans other than two-step loans was $11.7 million in the fourth quarter compared to $2.2 million in the same quarter of 2007 and $7.1 million in the third quarter of 2008. The combination of negative risk rating changes and higher net charge-offs during the most recent quarter increased the quarterly provision requirement in our allowance model. At December 31, 2008, total non two-step residential land and construction loans measured $160 million. This portfolio consisted of $23 million in land, $65 million in site development, and $71 million in construction of residences (vertical construction). Delinquent but accruing non two-step residential land and construction loans at year end 2008 amounted to $.9 million or .54% of such loans, a decline from $7.7 million and 4.56%, respectively, at September 30, 2008. Year end 2008 nonaccrual non two-step residential land and construction loans increased to $42.6 million or 26.7% of the related residential construction loans from $26.3 million or 15.6% at the end of the third quarter. Loans to borrowers involved in residential site development exhibited the most deterioration in credit quality. At December 31, 2008, accruing residential site development loans were $37.2 million, representing less than 2% of our total loan portfolio. Nonaccrual non two-step residential construction loans are largely located in Clark County in the state of Washington, and in Marion and Deschutes counties in the state of Oregon. Total loan net charge-offs in fourth quarter 2008 were $21.0 million, of which $5.9 million related to the two-step portfolio. The net charge-offs for loans other than two-step loans were $15.1 million compared to $1.7 million in the final quarter of 2007 and $6.0 million in the third quarter of 2008. The higher level of net charge-off activity for loans other than two-step loans was mainly associated with residential construction loans, and to a lesser extent, nonstandard residential mortgage loans and commercial loans. For the full year 2008, the provision for credit losses for other than two-step loans measured $30.9 million and exceeded 2008 loan net charge-offs of $25.2 million. In 2007 such provision and net charge-offs amounted to $8.0 million and $4.5 million, respectively. The following table summarizes key trends in the two-step loan portfolio and its allowance for credit losses. Additional information regarding the two-step loan portfolio (Dollars in thousands, unaudited) Total Total Nonaccrual Accruing accruing two-step two-step two-step two-step loan Period ended loans loans loans commitments 12/31/2007 $262,952 $20,545 $242,407 $320,991 3/31/2008 211,406 88,784 122,622 156,823 6/30/2008 145,703 98,728 46,975 59,603 9/30/2008 97,894 82,990 14,904 16,943 12/31/2008 53,084 49,960 3,124 3,276 Allowance for credit Allowance losses on for credit two-step losses on loans as a % Allowance two-step of total for credit loans as a % accruing losses on of accruing two-step loan Period ended two-step loans two-step loans commitments 12/31/2007 $31,065 12.8% 9.7% 3/31/2008 11,812 9.6% 7.5% 6/30/2008 5,280 11.2% 8.9% 9/30/2008 1,502 10.1% 8.9% 12/31/2008 421 13.5% 12.9% The allowance for credit losses associated with loans other than two-step loans was $29.5 million or 1.47% of such outstanding loan balances at year end 2008 compared to $32.9 million or 1.64% at September 30, 2008 and $23.8 million or 1.25% at December 31, 2007. Charge-offs during fourth quarter 2008 of loans with a specific reserve at September 30, 2008 substantially explain the decline in the allowance percentage during the fourth quarter. Total non-performing assets were $198 million or 7.9% of total assets at December 31, 2008, up from $183 million and 7.1%, respectively, as of September 30, 2008 and $30 million and 1.1% at year end 2007. Non-performing assets related to the two-step loan portfolio were $110 million or 4.4% of total assets at December 31, 2008, a decrease of $18 million from the end of third quarter 2008. The $110 million balance of nonperforming two-step assets at December 31, 2008 reflected prior write-downs of approximately 23% from the original balance of these loans. During the fourth quarter the nonaccrual two- step loan balance declined by $33 million to $50 million while the two-step OREO balance increased from $45 million at September 30, 2008 to $60 million at year end 2008, in line with our expectations. Two-step nonperforming assets are anticipated to continue to decline in future periods. Nonperforming assets, excluding the two-step portfolio, increased by $32 million to $88 million or 3.49% of total assets at December 31, 2008, from $56 million and 2.16% at September 30, 2008, and $6 million and .22% at year end 2007. The fourth quarter 2008 $25 million increase in nonaccrual non two-step loans was largely linked to the $20 million growth in non accrual loans to residential builders and developers and the $3 million increase in nonaccrual nonstandard mortgage loans. Nearly 40% of the $15 million in nonstandard mortgage loans on nonaccrual status were not delinquent at year end. The loan portfolio, excluding residential construction loans (which includes all two-step loans) and nonstandard mortgage loans, continued to perform satisfactorily at year end 2008, considering the economic situation. This portfolio, which includes the commercial, commercial real estate, commercial construction, standard mortgage, home equity, and consumer portfolios, totaled $1.84 billion and represented 89% of total loans at December 31, 2008. The nonperforming assets to total assets ratio for these loans measured 1.09% at year end 2008, as compared to .86% and .16% at September 30, 2008 and December 31, 2007, respectively. At December 31, 2008, all nonaccrual loans, including all non two-step loans, had been measured for impairment and written down to the appraised fair value, less expected selling costs, of the underlying collateral. At year end 2008 the total non two-step delinquent loans were $6.9 million or .34% of total non two-step loans, down from $10.9 million and .54% at September 30, 2008, and from $7.7 million and .40% at year end 2007. The decline in delinquent non two-step loans in the most recent quarter was primarily due to lower delinquencies in residential construction loans to builders and developers and was partly offset by higher commercial loan delinquencies. For more detailed credit quality information, see tables 4 through 14. Other: The Company will hold a Webcast conference call Tuesday, January 20, 2009, at 8:00 a.m. Pacific Time, during which the Company will discuss fourth quarter 2008 results and key activities. To access the conference call via a live Webcast, go to http://www.wcb.com/ and click on Investor Relations and the "4th Quarter 2008 Earnings Conference Call" tab. The conference call may also be accessed by dialing (877) 811-4715 Conference ID#: 76229771 a few minutes prior to 8:00 a.m. PDT. The call will be available for replay by accessing the Company's website at http://www.wcb.com/ and 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 $2.5 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 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, "Risk Factors," all as updated in our Quarterly Report on Form 10-Q. West Coast Bancorp Consolidated Statements of Income (Loss) (Unaudited) (Dollars and shares in thousands, except per Three months ended Twelve months ended share data) December 31, Sept. 30, December 31, 2008 2007 2008 2008 2007 Net interest income Interest and fees on loans $29,605 $42,115 $32,013 $129,517 $169,180 Interest on investment securities 2,388 3,178 2,686 10,951 13,446 Other interest income 24 235 73 378 564 Total interest income 32,017 45,528 34,772 140,846 183,190 Interest expense on deposit accounts 8,562 14,020 8,310 37,549 55,036 Interest on borrowings and subordinated debentures 2,318 3,233 2,739 11,147 13,434 Total interest expense 10,880 17,253 11,049 48,696 68,470 Net interest income 21,137 28,275 23,723 92,150 114,720 Provision for credit losses 16,517 29,956 9,125 40,367 38,956 Non-interest income Service charges on deposit accounts 3,853 3,698 4,176 15,547 12,932 Payment systems related revenue 2,225 2,197 2,337 9,033 8,009 Trust and investment services revenues 1,053 1,587 1,241 5,413 6,390 Gains on sales of loans 244 443 455 2,328 3,364 OREO valuation adjustments and gain (loss) on sale (3,701) - (1,422) (5,386) 27 Other 633 690 621 3,252 2,843 Loss on impairment of debt and equity securities - - (6,338) (6,338) - Gain (loss) on sales of securities 3 - - 780 (67) Total non-interest income 4,310 8,615 1,070 24,629 33,498 Non-interest expense Salaries and employee benefits 10,763 11,418 11,017 46,780 49,787 Equipment 1,808 1,852 1,793 7,117 6,544 Occupancy 2,414 2,242 2,354 9,440 8,548 Payment systems related expense 935 810 952 3,622 3,143 Professional fees 1,235 621 1,334 4,317 2,072 Postage, printing and office supplies 877 1,079 991 3,834 3,896 Marketing 773 1,233 1,009 3,583 4,524 Communications 456 421 437 1,722 1,624 Other non-interest expense 2,554 484 2,334 9,188 5,161 Total non-interest expense 21,815 20,160 22,221 89,603 85,299 Income (loss) before income taxes (12,885) (13,226) (6,553) (13,191) 23,963 Provision (benefit) for income taxes (4,688) (5,739) (4,237) (7,362) 7,121 Net income (loss) $(8,197) $(7,487) $(2,316) $(5,829) $16,842 Earnings (loss) per share: Basic $(0.53) $(0.48) $(0.15) $(0.38) $1.09 Diluted $(0.53) $(0.48) $(0.15) $(0.38) $1.05 Weighted average common shares 15,489 15,445 15,487 15,472 15,507 Weighted average diluted shares 15,489 15,445 15,487 15,472 16,045 Tax equivalent net interest income $21,558 $28,732 $24,154 $93,901 $116,361 West Coast Bancorp Consolidated Balance Sheets (Dollars and shares in thousands, December 31, December 31, September 30, unaudited) 2008 2007 2008 Assets: Cash and cash equivalents $64,778 $113,802 $101,614 Investments 198,515 269,425 205,987 Total loans 2,064,796 2,172,669 2,109,517 Allowance for loan losses (28,920) (46,917) (33,498) Loans, net 2,035,876 2,125,752 2,076,019 OREO, net 70,110 3,255 48,121 Goodwill and other intangibles 14,054 14,491 14,153 Other assets 132,571 119,889 127,152 Total assets $2,515,904 $2,646,614 $2,573,046 Liabilities and Stockholders' Equity: Demand $478,292 $501,506 $486,540 Savings and interest-bearing demand 346,206 364,971 337,472 Money market 615,588 678,090 672,690 Time deposits 584,293 550,265 564,717 Total deposits 2,024,379 2,094,832 2,061,419 Borrowings and subordinated debentures 274,059 301,100 282,059 Reserve for unfunded commitments 1,014 7,986 946 Other liabilities 18,501 34,455 24,400 Total liabilities 2,317,953 2,438,373 2,368,824 Stockholders' equity 197,951 208,241 204,222 Total liabilities and stockholders' equity $2,515,904 $2,646,614 $2,573,046 Common shares outstanding period end 15,696 15,593 15,702 Book value per common share $12.61 $13.35 $13.01 Tangible book value per common share $11.72 $12.42 $12.10 West Coast Bancorp Summary Financial Information (Dollars in thousands except for per share data, unaudited) Fourth Fourth Third (all rates have been annualized where Quarter Quarter Quarter appropriate) 2008 2007 2008 PERFORMANCE RATIOS - Return on average assets (1.30%) (1.14%) (0.36%) - Return on average common equity (16.25%) (13.51%) (4.47%) - Return on average tangible equity (17.34%) (14.31%) (4.66%) - Non-interest income to average assets 0.68% 1.31% 0.17% - Non-interest expense to average assets 3.46% 3.06% 3.45% - Efficiency ratio, tax equivalent 84.4% 54.0% 70.4% NET INTEREST MARGIN - Yield on average interest-earning assets 5.57% 7.39% 5.85% - Rate on average interest-bearing liabilities 2.36% 3.66% 2.36% - Net interest spread 3.21% 3.73% 3.49% - Net interest margin 3.70% 4.62% 4.02% AVERAGE ASSETS - Investment securities $212,900 $273,328 $228,382 - Commercial loans 491,663 504,330 502,781 - Real estate construction loans 311,117 525,110 371,687 - Real estate mortgage loans 392,570 314,497 383,214 - Commercial real estate loans 875,211 804,585 851,849 - Installment and other consumer loans 22,364 23,320 23,220 - Total loans 2,092,925 2,171,842 2,132,751 - Total interest earning assets 2,318,140 2,468,863 2,393,207 - Other assets 190,705 140,963 170,466 - Total assets $2,508,845 $2,609,826 $2,563,673 AVERAGE LIABILITIES & EQUITY - Demand deposits $467,768 $492,636 $482,780 - Savings and Interest bearing demand 338,584 367,359 348,008 - Money market 636,013 676,908 672,051 - Time deposits 584,137 573,967 543,451 - Total deposits 2,026,502 2,110,870 2,046,290 - Borrowings and subordinated debentures 276,336 251,868 300,258 - Total interest bearing liabilities 1,835,069 1,870,103 1,863,768 - Other liabilities 473,061 519,833 493,545 - Total liabilities 2,308,130 2,389,936 2,357,313 - Common equity 200,715 219,890 206,360 - Total average liabilities and common equity $2,508,845 $2,609,826 $2,563,673 AVERAGE ASSET/LIABILITY RATIOS - Stockholders' equity to total assets 8.00% 8.43% 8.05% - Interest earning assets to interest bearing liabilities 126.3% 137.4% 128.4% - Total loans to total assets 83.4% 83.2% 83.2% - Interest bearing deposits to total assets 62.1% 59.2% 61.0% West Coast Bancorp Summary Financial Information (Dollars in thousands except for per share data, unaudited) (all rates have been annualized where Year to date Year to date appropriate) 2008 2007 PERFORMANCE RATIOS - Return on average assets (0.23%) 0.66% - Return on average common equity (2.82%) 7.93% - Return on average tangible equity (2.88%) 8.69% - Non-interest income to average assets 0.96% 1.32% - Non-interest expense to average assets 3.49% 3.36% - Efficiency ratio, tax equivalent 72.2% 56.9% NET INTEREST MARGIN - Yield on average interest-earning assets 5.92% 7.72% - Rate on average interest-bearing liabilities 2.60% 3.76% - Net interest spread 3.32% 3.96% - Net interest margin 3.90% 4.86% AVERAGE ASSETS - Investment securities $229,478 $284,582 - Commercial loans 507,641 497,975 - Real estate construction loans 403,823 477,055 - Real estate mortgage loans 371,365 296,859 - Commercial real estate loans 840,496 798,383 - Installment and other consumer loans 23,545 24,705 - Total loans 2,146,870 2,094,977 - Total interest earning assets 2,409,896 2,394,958 - Other assets 159,723 142,760 - Total assets $2,569,619 $2,537,718 AVERAGE LIABILITIES & EQUITY - Demand deposits $470,601 $479,311 - Savings and Interest bearing demand 350,769 351,521 - Money market 658,360 665,037 - Time deposits 566,195 554,263 - Total deposits 2,045,925 2,050,132 - Borrowings and subordinated debentures 300,759 250,478 - Total interest bearing liabilities 1,876,083 1,821,299 - Other liabilities 487,010 504,070 - Total liabilities 2,363,093 2,325,369 - Common equity 206,526 212,349 - Total average liabilities and common equity $2,569,619 $2,537,718 AVERAGE ASSET/LIABILITY RATIOS - Stockholders' equity to total assets 8.04% 8.37% - Interest earning assets to interest bearing liabilities 128.5% 131.5% - Total loans to total assets 83.6% 82.6% - Interest bearing deposits to total assets 61.3% 59.0% The following table reconciles GAAP net income to core earnings, including per-share figures. Table 1 West Coast Bancorp GAAP net income (loss) to core earnings reconciliation For the three For the twelve (Dollars in thousands, months ended Dec. 31, months ended Dec. 31, unaudited) 2008 2007 2008 2007 Net income (loss) $(8,197) $(7,487) $(5,829) $16,842 Add: impairment charge on securities, net of tax* - - 4,120 - Core earnings (loss) $(8,197) $(7,487) $(1,709) $16,842 *Federal income tax provision applied at 35%. Earnings (loss) per diluted share GAAP $(0.53) $(0.48) $(0.38) $1.05 Core $(0.53) $(0.48) $(0.11) $1.05 The following table reconciles return on average equity to return on average equity, tangible. Table 2 West Coast Bancorp Return on average equity tangible reconciliation(1) For the three months For the twelve months ended Dec. 31, ended Dec. 31, (Dollars in thousands, unaudited) 2008 2007 2008 2007 Net income (loss) $(8,197) $(7,487) $(5,829) $16,842 Add: intangible asset amortization, net of tax* 64 77 284 351 Net income (loss), tangible $(8,133) $(7,410) $(5,545) $17,193 Average shareholders' equity $200,715 $219,890 $206,526 $212,349 Less: average intangibles (14,102) (14,549) (14,259) (14,740) Average shareholders' equity, tangible $186,613 $205,341 $192,267 $197,609 *Federal income tax provision applied at 35%. Return on average equity -16.2% -13.5% -2.8% 7.9% Return on average equity, tangible -17.3% -14.3% -2.9% 8.7% (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 presents information with respect to the Company's loan portfolio. Table 3 West Coast Bancorp Period End Loan Portfolio By Category Dec. 31, % of Dec. 31, % of (Dollars in thousands, unaudited) 2008 loans 2007 loans Commercial loans $482,405 23% $504,101 23% Commercial real estate construction 92,414 4% 90,671 4% Residential real estate construction 192,735 9% 427,317 20% Total real estate construction loans 285,149 14% 517,988 24% Standard mortgages 87,628 4% 86,901 4% Nonstandard mortgages 32,597 2% 7,495 0% Home equity 272,983 13% 236,407 11% Total real estate mortgage 393,208 19% 330,803 15% Commercial real estate loans 882,092 43% 796,622 37% Installment and other consumer loans 21,942 1% 23,155 1% Total loans $2,064,796 $2,172,669 Two-step residential construction loans $53,084 3% $262,952 12% Total loans other than two-step loans 2,011,712 97% 1,909,717 88% Total loans $2,064,796 100% $2,172,669 100% Change Sept. 30, % of (Dollars in thousands, unaudited) Amount % 2008 loans Commercial loans $(21,696) -4% $498,715 24% Commercial real estate construction 1,743 2% 88,717 4% Residential real estate construction (234,582) -55% 242,116 11% Total real estate construction loans (232,839) -45% 330,833 16% Standard mortgages 727 1% 89,348 4% Nonstandard mortgages 25,102 335% 33,820 2% Home equity 36,576 15% 266,385 13% Total real estate mortgage 62,405 19% 389,553 18% Commercial real estate loans 85,470 11% 867,902 41% Installment and other consumer loans (1,213) -5% 22,514 1% Total loans $(107,873) -5% $2,109,517 Two-step residential construction loans $(209,868) -80% $97,894 5% Total loans other than two-step loans 101,995 5% 2,011,623 95% Total loans $(107,873) -5% $2,109,517 100% The following tables present information with respect to the change in the Company's total allowance for credit losses. Table 4 West Coast Bancorp Total Loan Portfolio Allowance For Credit Losses and Net Charge-offs Quarter Quarter Quarter ended ended ended December 31, December 31, September 30, (Dollars in thousands, unaudited) 2008 2007 2008 Allowance for credit losses, beginning of period $34,444 $28,506 $37,045 Provision for credit losses 16,517 29,956 9,125 Loan charge-offs: Commercial 3,208 1,332 515 Commercial real estate construction 1,422 - - Residential real estate construction 11,475 1,867 10,691 Total real estate construction 12,897 1,867 10,691 Standard mortgages 1,640 - 76 Nonstandard mortgages 2,495 - 405 Home equity 121 64 100 Total real estate mortgage 4,256 64 581 Commercial real estate 782 - 44 Installment and consumer 29 72 383 Overdraft 401 302 322 Total loan charge-offs 21,573 3,637 12,536 Loan recoveries: Commercial 122 1 49 Commercial real estate construction - - - Residential real estate construction 319 - 715 Total real estate construction 319 - 715 Standard mortgages - - - Nonstandard mortgages 38 - - Home equity 2 - (22) Total real estate mortgage 40 - (22) Commercial real estate - - - Installment and consumer 15 23 9 Overdraft 50 54 59 Total loan recoveries 546 78 810 Net charge-offs 21,027 3,559 11,726 Total allowance for credit losses $29,934 $54,903 $34,444 Components of allowance for credit losses: Allowance for loan losses $28,920 $46,917 $33,498 Reserve for unfunded commitments 1,014 7,986 946 Total allowance for credit losses $29,934 $54,903 $34,444 Net loan charge-offs to average loans (annualized) 4.00% 0.65% 2.19% Allowance for loan losses to total loans 1.40% 2.16% 1.59% Allowance for credit losses to total loans 1.45% 2.53% 1.63% Allowance for loan losses to nonperforming loans 23% 178% 25% Allowance for credit losses to nonperforming loans 23% 208% 25% Table 5 West Coast Bancorp Total Loan Portfolio Allowance For Credit Losses and Net Charge-offs Year ended Year ended December 31, December 31, (Dollars in thousands, unaudited) 2008 2007 Allowance for credit losses, beginning of period $54,903 $23,017 Provision for credit losses 40,367 38,956 Loan charge-offs: Commercial 6,464 3,798 Commercial real estate construction 1,422 - Residential real estate construction 52,588 2,540 Total real estate construction 54,010 2,540 Standard mortgages 1,811 - Nonstandard mortgages 3,036 - Home equity 249 71 Total real estate mortgage 5,096 71 Commercial real estate 826 - Installment and consumer 531 254 Overdraft 1,328 1,050 Total loan charge-offs 68,255 7,713 Loan recoveries: Commercial 203 269 Commercial real estate construction - - Residential real estate construction 2,339 7 Total real estate construction 2,339 7 Standard mortgages - - Nonstandard mortgages 38 - Home equity 32 33 Total real estate mortgage 70 33 Commercial real estate - 2 Installment and consumer 78 112 Overdraft 229 220 Total loan recoveries 2,919 643 Net charge-offs 65,336 7,070 Total allowance for credit losses $29,934 $54,903 Components of allowance for credit losses: Allowance for loan losses $28,920 $46,917 Reserve for unfunded commitments 1,014 7,986 Total allowance for credit losses $29,934 $54,903 Net loan charge-offs to average loans 3.04% 0.34% Allowance for loan losses to total loans 1.40% 2.16% Allowance for credit losses to total loans 1.45% 2.53% Allowance for loan losses to nonperforming loans 23% 178% Allowance for credit losses to nonperforming loans 23% 208% The following table presents information about the Company's total nonperforming assets and delinquent loans. Table 6 West Coast Bancorp Total Loan Portfolio Nonperforming Assets and Delinquencies December 31, December 31, September 30, (Dollars in thousands, unaudited) 2008 2007 2008 Loans on nonaccrual status: Commercial $6,250 $2,401 $6,650 Real estate construction: Commercial real estate construction 2,922 - - Residential real estate construction 90,712 22,121 104,015 Total real estate construction 93,634 22,121 104,015 Real estate mortgage: Standard mortgage 8,283 552 6,384 Nonstandard mortgage 15,229 - 11,834 Home equity 1,043 - 644 Total real estate mortgage 24,555 552 18,862 Commercial real estate 3,145 1,353 5,636 Installment and consumer 6 - 14 Total nonaccrual loans 127,590 26,427 135,177 90 days past due not on nonaccrual - - - Total non-performing loans 127,590 26,427 135,177 Other real estate owned 70,110 3,255 48,121 Total non-performing assets $197,700 $29,682 $183,298 Non-performing loans to total loans 6.18% 1.22% 6.41% Non-performing assets to total assets 7.86% 1.12% 7.12% Total Loan Portfolio Delinquent loans 30-89 days past due as a % of loan category December December September 31, 31, 30, (Dollars in thousands, unaudited) 2008 2007 2008 Commercial loans 0.58% 1.21% 0.06% Real estate construction loans 0.68% 7.13% 3.69% Real estate mortgage loans 0.49% 0.16% 0.53% Commercial real estate loans 0.15% 0.10% 0.04% Installment and other consumer loans 0.36% 0.58% 0.49% Delinquent loans 30-89 days past due: Two-step residential construction loans $1,242 $36,778 $4,089 Total loans other than two-step loans 6,850 7,706 10,919 Total delinquent loans 30-89 days past due, not in nonaccrual status $8,092 $44,484 $15,008 The following table presents information about the Company's activity in other real estate owned. Table 7 West Coast Bancorp Other real estate owned ("OREO") activity Three Three Three months months months ended Number ended Number ended Number (Dollars in thousands, Dec. 31 of Dec. 31 of Sept. 30 of unaudited) 2008 properties 2007 properties 2008 properties Beginning balance $48,121 189 $1,183 6 $27,892 108 Additions to OREO(1) 34,066 129 2,072 9 26,965 103 Disposition of OREO (8,655) (30) - - (5,618) (22) Valuation adjustments to OREO (3,422) - (1,118) Ending balance $70,110 288 $3,255 15 $48,121 189 OREO activity related to two-step loans Three Three Three months months months ended Number ended Number ended Number (Dollars in thousands, Dec. 31 of Dec. 31 of Sept. 30 of unaudited) 2008 properties 2007 properties 2008 properties Beginning balance $44,675 173 $1,183 5 $26,460 101 Additions to OREO(1) 26,541 106 2,072 9 24,200 91 Disposition of OREO (8,271) (28) - - (4,867) (19) Valuation adjustments to OREO (2,923) - (1,118) Ending balance $60,022 251 $3,255 14 $44,675 173 OREO activity related to loans other than two-step loans Three Three Three months months months ended Number ended Number ended Number (Dollars in thousands, Dec. 31 of Dec. 31 of Sept. 30 of unaudited) 2008 properties 2007 properties 2008 properties Beginning balance $3,446 16 $- 1 $1,432 7 Additions to OREO(1) 7,525 23 - - 2,765 12 Disposition of OREO (384) (2) - - (751) (3) Valuation adjustments to OREO (499) - - - Ending balance $10,088 37 $- 1 $3,446 16 (1) Includes capitalized cost of OREO. The following table presents information with respect to two-step residential construction related OREO activity and two-step short sales. Table 8 Total two-step Two-step OREO property related OREO Two-step short sales and short (Dollars in thousands) activity sales sales Quarterly 2008: Amount Number Amount Number Amount Number Beginning balance January 1 $3,255 14 Additions to OREO 2,461 10 Capitalized improvements 246 Valuation adjustments - Disposition of OREO properties and short sales (274) (1) $(286) (1) $(560) (2) Ending balance March 31 $5,688 23 Additions to OREO 23,546 87 Capitalized improvements 188 Valuation adjustments (245) Disposition of OREO properties and short sales (2,717) (9) $(4,368) (14) $(7,085) (23) Ending balance June 30 $26,460 101 Additions to OREO 24,025 91 Capitalized improvements 175 Valuation adjustments (1,118) Disposition of OREO properties and short sales (4,867) (19) $(3,200) (12) $(8,067) (31) Ending balance September 30 $44,675 173 Additions to OREO 25,831 106 Capitalized improvements 710 Valuation adjustments (2,923) Disposition of OREO properties and short sales (8,271) (28) $(3,594) (13)$(11,865) (41) Ending balance December 31 $60,022 251 Full year 2008: Beginning balance January 1 $3,255 14 Additions to OREO 75,863 294 Capitalized improvements 1,319 Valuation adjustments (4,286) Disposition of OREO properties and short sales (16,129) (57)$(11,448) (40)$(27,577) (97) Ending balance December 31 $60,022 251 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. Table 9 West Coast Bancorp Two-Step Loan Portfolio Allowance For Credit Losses and Net Charge-offs Two-Step Portfolio Quarter ended Quarter ended Quarter ended December 31, December 31, September 30, (Dollars in thousands, unaudited) 2008 2007 2008 Allowance for credit losses, beginning of period $1,502 $5,196 $5,280 Provision for credit losses 4,776 27,736 1,997 Charge-offs 6,176 1,867 6,490 Recoveries 319 - 715 Net charge-offs 5,857 1,867 5,775 Total allowance for credit losses $421 $31,065 $1,502 Components of allowance for credit losses Allowance for loan losses $420 $23,917 $1,472 Reserve for unfunded commitments 1 7,148 30 Total allowance for credit losses $421 $31,065 $1,502 Net loan charge-offs to average total loans (annualized) 1.11% 0.34% 1.08% Allowance for two-step loan losses to nonperforming two-step loans(1) 0.84% 116.41% 1.77% Allowance for two-step credit losses to total two-step loans 0.79% 11.81% 1.53% Allowance for two-step loan losses to total two-step loans 0.79% 9.10% 1.50% (1) Two-step nonaccrual loans are net of chargeoffs previously taken against the balance. Year to date Year to date December 31, December 31, (Dollars in thousands, unaudited) 2008 2007 Allowance for credit losses, beginning of period $31,065 $2,618 Provision for credit losses 9,500 30,980 Charge-offs 42,483 2,540 Recoveries 2,339 7 Net Charge-offs 40,144 2,533 Total allowance for credit losses $421 $31,065 Components of allowance for credit losses Allowance for loan losses $420 $23,917 Reserve for unfunded commitments 1 7,148 Total allowance for credit losses $421 $31,065 Net loan charge-offs to average total loans 1.87% 0.12% The following table presents information about the Company's nonperforming assets and delinquencies in the two-step residential construction loan portfolio. Table 10 West Coast Bancorp Two-Step Residential Construction Loans Nonperforming Assets and Delinquencies December 31, December 31, September 30, (Dollars in thousands, unaudited) 2008 2007 2008 Nonaccrual two-step loans $49,960 $20,545 $82,990 90 day past due and accruing interest - - - Total nonperforming two-step loans 49,960 20,545 82,990 Other real estate owned two-step 60,022 3,255 44,675 Total nonperforming two-step assets $109,982 $23,800 $127,665 Delinquent two-step loans 30-89 days past due, not in nonaccrual status $1,242 $36,778 $4,089 Nonperforming two-step loans to total two-step loans 94.11% 7.81% 84.78% Nonperforming two-step assets to total assets 4.37% 0.90% 4.96% Delinquent two-step loans to total two-step loans 2.34% 13.99% 4.18% 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. Table 11 West Coast Bancorp Other than two-step loan portfolio Allowance For Credit Losses and Net Charge-offs other than two-step loans Quarter Quarter Quarter ended ended ended December 31, December 31, September 30, (Dollars in thousands, unaudited) 2008 2007 2008 Allowance for credit losses, beginning of period $32,942 $23,310 $31,765 Provision for credit losses 11,741 2,220 7,128 Loan charge-offs: Commercial 3,208 1,332 515 Commercial real estate construction 1,422 - - Residential real estate construction 5,299 - 4,201 Total real estate construction 6,721 - 4,201 Standard mortgages 1,640 - 76 Nonstandard mortgages 2,495 - 405 Home equity 121 64 100 Total real estate mortgage 4,256 64 581 Commercial real estate 782 - 44 Installment and consumer 29 72 383 Overdraft 401 302 322 Total loan charge-offs 15,397 1,770 6,046 Loan recoveries: Commercial 122 1 49 Commercial real estate construction - - - Residential real estate construction - - - Total real estate construction - - - Standard mortgages - - - Nonstandard mortgages 38 - - Home equity 2 - (22) Total real estate mortgage 40 - (22) Commercial real estate - - - Installment and consumer 15 23 9 Overdraft 50 54 59 Total loan recoveries 227 78 95 Net charge-offs 15,170 1,692 5,951 Total allowance for credit losses $29,513 $23,838 $32,942 Components of allowance for credit losses: Allowance for loan losses $28,500 $23,000 $32,026 Reserve for unfunded commitments 1,013 838 916 Total allowance for credit losses $29,513 $23,838 $32,942 Net loan charge-offs to average loans (annualized) 2.88% 0.31% 1.11% Allowance for loan losses to total loans 1.42% 1.20% 1.59% Allowance for credit losses to total loans 1.47% 1.25% 1.64% Allowance for loan losses to nonperforming loans 37% 391% 61% Allowance for credit losses to nonperforming loans 38% 405% 63% Table 12 West Coast Bancorp Other than two-step loan portfolio Allowance For Credit Losses and Net Charge-offs other than two-step loans Year ended Year ended December 31, December 31, (Dollars in thousands, unaudited) 2008 2007 Allowance for credit losses, beginning of period $23,838 $20,399 Provision for credit losses 30,867 7,976 Loan charge-offs: Commercial 6,464 3,798 Commercial real estate construction 1,422 - Residential real estate construction 10,105 - Total real estate construction 11,527 - Standard mortgages 1,811 - Nonstandard mortgages 3,036 - Home equity 249 71 Total real estate mortgage 5,096 71 Commercial real estate 826 - Installment and consumer 531 254 Overdraft 1,328 1,050 Total loan charge-offs 25,772 5,173 Loan recoveries: Commercial 203 269 Commercial real estate construction - - Residential real estate construction - - Total real estate construction - - Standard mortgages - - Nonstandard mortgages 38 - Home equity 32 33 Total real estate mortgage 70 33 Commercial real estate - 2 Installment and consumer 78 112 Overdraft 229 220 Total loan recoveries 580 636 Net charge-offs 25,192 4,537 Total allowance for credit losses $29,513 $23,838 Components of allowance for credit losses: Allowance for loan losses $28,500 $23,000 Reserve for unfunded commitments 1,013 838 Total allowance for credit losses $29,513 $23,838 Net loan charge-offs to average loans 1.17% 0.22% Allowance for loan losses to total loans 1.42% 1.20% Allowance for credit losses to total loans 1.47% 1.25% Allowance for loan losses to nonperforming loans 37% 391% Allowance for credit losses to nonperforming loans 38% 405% The following table presents information about the Company's nonperforming assets and delinquencies in the loan portfolio excluding two-step residential construction loans. Table 13 West Coast Bancorp Loans Other than Two-Step Loans Nonperforming Assets and Delinquencies December 31, December 31, September 30, (Dollars in thousands, unaudited) 2008 2007 2008 Loans on nonaccrual status: Commercial $6,250 $2,401 $6,650 Real estate construction: Commercial real estate construction 2,922 - - Residential real estate construction 40,752 1,576 21,025 Total real estate construction 43,674 1,576 21,025 Real estate mortgage: Standard mortgage 8,283 552 6,384 Nonstandard mortgage 15,229 - 11,834 Home equity 1,043 - 644 Total real estate mortgage 24,555 552 18,862 Commercial real estate 3,145 1,353 5,636 Installment and consumer 6 - 14 Total nonaccrual loans 77,630 5,882 52,187 90 days past due not on nonaccrual - - - Total non-performing loans 77,630 5,882 52,187 Other real estate owned 10,088 - 3,446 Total non-performing assets $87,718 $5,882 $55,633 Delinquent non two-step loans 30-89 days past due, not in nonaccrual status $6,850 $7,706 $10,919 Nonperforming non two-step loans to total non two-step loans 3.86% 0.31% 2.59% Nonperforming non two-step assets to total assets 3.49% 0.22% 2.16% Delinquent non two-step loans to total non two-step loans 0.34% 0.40% 0.54% The following table shows the components of our construction and land loans outside the two-step portfolio as of the dates shown: Table 14 West Coast Bancorp Construction and land loans outside the two-step portfolio (Dollars in thousands, December 31, December 31, September 30, unaudited) 2008 2007 2008 Amount Percent(2) Amount Percent(2) Amount Percent(2) Land loans(1) $46,286 17% $44,508 15% $44,805 16% Residential construction loans other than two-step loans 136,024 49% 165,359 55% 144,517 52% Commercial construction loans 92,616 34% 90,671 30% 88,630 32% Total construction and land loans other than two-step loans $274,926 100% $300,538 100% $277,952 100% Components of residential construction and land loans other than two-step loans: Land loans(1) $23,495 15% $23,461 12% $24,038 14% Site development 64,728 40% 84,620 45% 71,125 42% Vertical construction 71,296 45% 80,739 43% 73,392 44% Total residential construction and land loans other than two-step loans $159,519 100% 188,820 100% $168,555 100% Components of commercial construction and land loans: Land loans(1) $22,791 20% $21,047 19% $20,767 19% Site development 607 1% - 0% 77 0% Vertical construction 92,009 79% 90,671 81% 88,553 81% Total commercial construction and land loans $115,407 100% $111,718 100% $109,397 100% Components of total construction and land loans other than two-step loans: Land loans(1) $46,286 17% $44,508 15% $44,805 16% Site development 65,335 24% 84,620 28% 71,202 26% Vertical construction 163,305 59% 171,410 57% 161,945 58% Total construction and land loans other than two-step loans $274,926 100% $300,538 100% $277,952 100% (1) Land loans represent balances that are carried in the Company's residential real estate mortgage commercial real estate loan portfolios. (2) Calculations have been based on more detailed information and therefore may not recompute exactly due to rounding. The following table shows the components of our nonaccrual construction and land loans outside the two-step portfolio as of the dates shown. Table 15 West Coast Bancorp Nonaccrual construction and land loans oustide the two-step portfolio (Dollars in thousands, December 31, December 31, September 30, unaudited) 2008 2007 2008 Percent Percent Percent of loan of loan of loan category category category Amount (2) Amount (2) Amount (2) Land loans(1) $5,794 2.11% $306 0.10% $5,308 1.91% Residential construction loans other than two- step loans 36,994 13.46% 1,576 0.52% 21,025 7.56% Commercial construction loans 2,922 1.06% - 0.00% - 0.00% Total nonaccrual construction and land loans other than two- step loans $45,710 16.63% $1,882 0.63% $26,333 9.47% Components of nonaccrual residential construction and land loans other than two-step loans: Land loans(1) $5,608 3.52% $306 0.16% $5,308 3.15% Site development 27,291 17.11% - 0.00% 13,731 8.15% Vertical construction 9,703 6.08% 1,576 0.83% 7,294 4.33% Total nonaccrual residential construction and land loans other than two- step loans $42,602 26.71% $1,882 1.00% $26,333 15.63% Components of nonaccrual commercial construction and land loans: Land loans(1) 186 0.16% - 0.00% - 0.00% Site development - 0.00% - 0.00% - 0.00% Vertical construction 2,922 2.53% - 0.00% - 0.00% Total nonaccrual commercial construction and land loans $3,108 2.69% $- 0.00% $- 0.00% Components of total nonaccrual construction and land loans other than two-step loans: Land loans(1) $5,794 2.11% $306 0.10% $5,308 1.91% Site development 27,291 9.93% - 0.00% 13,731 4.94% Vertical construction 12,625 4.59% 1,576 0.52% 7,294 2.62% Total nonaccrual construction and land loans other than two- step loans $45,710 16.63% $1,882 0.63% $26,333 9.47% (1) Land loans represent balances that are carried in the Company's residential real estate mortgage and commercial real estate loan portfolios. (2) Calculations have been based on more detailed information and therefore may not recompute exactly due to rounding. The following table shows the components of our delinquent construction and land loans outside the two-step portfolio as of the dates shown. Table 16 West Coast Bancorp Delinquent construction and land loans outside the two-step loan portfolio (Dollars in thousands, December 31, December 31, September 30, unaudited) 2008 2007 2008 Percent Percent Percent of loan of loan of loan category category category Amount (2) Amount (2) Amount (2) Land loans(1) $638 0.23% $487 0.16% $461 0.17% Residential construction loans other than two-step loans 698 0.50% 163 0.06% 7,241 2.61% Commercial construction loans - 0.00% - 0.00% 807 0.29% Total 30-89 days past due construction loans other than two-step loans $1,336 0.49% $650 0.22% $8,509 3.07% Components of 30-89 days past due residential construction and land loans other than two- step loans: Land loans(1) $165 0.10% $487 0.26% $461 0.27% Site development 131 0.08% - 0.00% 5,586 3.31% Vertical construction 567 0.36% 163 0.09% 1,655 0.98% Total 30-89 days past due residential construction and land loans other than two- step loans $863 0.54% $650 0.34% $7,702 4.56% Components of 30-89 days past due commercial construction and land loans: Land loans(1) $473 0.41% $- 0.00% $- 0.00% Site development - 0.00% - 0.00% - 0.00% Vertical construction - 0.00% - 0.00% 807 0.74% Total 30-89 days past due commercial construction and land loans $473 0.41% $- 0.00% $807 0.74% Components of total 30-89 days past due construction and land loans other than two-step loans: Land loans(1) $638 0.23% $487 0.16% $461 0.17% Site development 131 0.05% - 0.00% 5,586 2.01% Vertical construction 567 0.21% 163 0.05% 2,462 0.89% Total 30-89 days past due construction and land loans other than two-step loans $1,336 0.49% $650 0.22% $8,509 3.07% (1) Land loans represent balances that are carried in the Company's residential real estate mortgage and commercial real estate loan portfolios. (2) Calculations have been based on more detailed information and therefore may not recompute exactly due to rounding. 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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