- Return on Average Assets Was .98% in the First Quarter 2012, an
Increase From .84% in the Same Quarter Last Year.
- Pre-Tax Income of $8.9 Million in the First Quarter 2012
Increased 54% From $5.8 Million in the Same Quarter Last Year.
- Efficiency Ratio Improved to 69.7% in First Quarter Of 2012
From 74.1% in the Same Quarter Of 2011.
- Provision for Credit Losses of $ .1 Million in the First
Quarter of 2012 Declined From $2.1 Million in the Same Quarter Last
Year.
West Coast Bancorp (Nasdaq:WCBO) ("Bancorp" or
"Company"), the parent company of West Coast Bank ("Bank") and West
Coast Trust Company, Inc., today announced net income of $5.8
million or $.27 per diluted share for the first quarter of 2012
compared to net income of $5.1 million or $.24 per diluted share in
the same quarter of 2011.
"Net income of $5.8 million for the quarter ended March 31,
2012, represented a 13% improvement from the same period a year
ago," said Robert D. Sznewajs, President and Chief Executive
Officer. The improved operating results primarily reflect the
impact of cost reduction actions taken in 2011 and the reduction in
the provision for credit losses in the current period compared to
first quarter of 2011. The Company's return on average assets
continues to improve, reaching .98 % in the first quarter of 2012
compared to .84 % in the same period in 2011."
Table 1 below shows summary financial information for the
quarters ended March 31, 2012, and 2011, and December 31, 2011. Net
income for the quarter ended December 31, 2011, reflected the
benefit from the reversal of the Company's deferred tax asset
valuation allowance in the fourth quarter of 2011.
Table 1 |
|
|
|
|
|
SUMMARY FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
Qtr. ended |
Qtr. ended |
|
Qtr. ended |
|
|
March 31, |
March 31, |
|
Dec. 31, |
|
(Dollars and shares in thousands) |
2012 |
2011 |
Change |
2011 |
Change |
Net income |
$ 5,789 |
$ 5,105 |
$ 684 |
$ 17,762 |
$ (11,973) |
Net income available to common stockholders
1 |
$ 5,393 |
$ 4,740 |
$ 653 |
$ 16,532 |
(11,139) |
|
|
|
|
|
|
Selective quarterly performance
ratios |
|
|
|
|
|
Return on average assets, annualized |
0.98% |
0.84% |
0.14 |
2.88% |
-1.90% |
Return on average equity, annualized |
7.34% |
7.56% |
(0.22) |
23.68% |
-16.34% |
Efficiency ratio2 |
69.76% |
74.14% |
(4.38) |
93.02% |
-23.26% |
|
|
|
|
|
|
Share and Per Share
Figures-Actual |
|
|
|
|
|
Common shares outstanding at period end |
19,295 |
19,283 |
12 |
19,298 |
(3) |
Weighted average diluted shares3 |
21,348 |
21,246 |
102 |
21,175 |
173 |
Weighted average diluted shares-two class
method 4 |
20,054 |
19,939 |
115 |
19,911 |
143 |
Net income per diluted share |
$ 0.27 |
$ 0.24 |
$ 0.03 |
$ 0.83 |
$ (0.56) |
Book value per common share |
$ 15.54 |
$ 13.27 |
$ 2.27 |
$ 15.20 |
$ 0.34 |
|
|
|
|
|
|
1 Adjusted for the impact of
allocating net income to participating instruments, restricted
stock and Series B preferred stock. |
2 The efficiency ratio has been
computed as noninterest expense divided by the sum of net interest
income on a tax equivalent basis and noninterest income excluding
gains/losses on sales of securities. |
3 Reflects the average
dilutive impacts of Series B preferred stock (1,213), warrants
(995), options (21), and restricted stock (81). |
4 Reflects the calculation
of diluted shares under the two-class method which includes average
common (19,038), options (21), and warrants (995). |
Balance Sheet Overview
First quarter 2012 average total loan balances of $1.48 billion
declined $47 million or 3% from same quarter of 2011. The decline
was principally as a result of continued loan payoffs prior to
maturity, reflecting the effect of the current interest rate
environment and economic conditions. Modest growth in the
commercial real estate loan category was more than offset by
declines in commercial, residential real estate construction and
mortgage loan categories. Total average loans declined 1% or $16
million from fourth quarter 2011.
Yield on total loans of 5.20% declined 18 basis points
year-over-year first quarter as higher yielding loans paid off and
new loan originations were at lower yields reflecting current
market interest rates. The yield on total average loans was nearly
unchanged from the prior quarter.
Table 2 |
|
|
|
|
|
|
|
|
AVERAGE LOANS FOR THE
QUARTER |
|
(Dollars in thousands) |
March 31, |
% of |
March 31, |
% of |
Change |
December 31, |
% of |
|
2012 |
Total |
2011 |
total |
Amount |
% |
2011 |
Total |
Commercial loans |
$ 288,395 |
19% |
$ 304,704 |
20% |
$ (16,309) |
-5% |
$ 293,583 |
20% |
Commercial real estate
construction |
18,547 |
1% |
17,509 |
1% |
1,038 |
6% |
14,730 |
1% |
Residential real estate
construction |
12,680 |
1% |
22,698 |
1% |
(10,018) |
-44% |
13,613 |
1% |
Total real estate construction loans |
31,227 |
2% |
40,207 |
2% |
(8,980) |
-22% |
28,343 |
2% |
Mortgage |
66,125 |
5% |
78,366 |
5% |
(12,241) |
-16% |
67,579 |
5% |
Home equity |
254,883 |
17% |
266,846 |
18% |
(11,963) |
-4% |
260,849 |
17% |
Total real estate mortgage |
321,008 |
22% |
345,212 |
23% |
(24,204) |
-7% |
328,428 |
22% |
Commercial real estate loans |
828,681 |
56% |
823,818 |
54% |
4,863 |
1% |
834,362 |
55% |
Installment and other consumer loans |
13,211 |
1% |
15,349 |
1% |
(2,138) |
-14% |
13,721 |
1% |
Total loans |
$ 1,482,522 |
|
$ 1,529,290 |
|
$ (46,768) |
-3% |
$ 1,498,437 |
|
|
|
|
|
|
|
|
|
|
Yield on loans |
5.20% |
|
5.38% |
|
(0.18) |
|
5.19% |
|
The 2012 first quarter average balance of total cash equivalents
and investment securities of $748 million declined $36 million or
5% from the first quarter of 2011; however, the Company's liquidity
position remained solid. The Company reduced its average cash
equivalents balance by $73 million in the first quarter of 2012
from the same quarter of 2011 while increasing its investment
securities portfolio by $37 million in an effort to improve its net
interest income and margin. Over the past year, the Company has
increased its investments in U.S. government agency, U.S government
agency mortgage-backed, and municipal securities. The purchases
consisted principally of U.S. government agency securities with
3-5-year maturities and 10- and 15-year fully amortizing U.S.
government agency mortgage-backed securities. The expected duration
of the investment portfolio was approximately 2.6 years at March
31, 2012, compared to approximately 3.1 years at March 31,
2011.
The 2012 first quarter yield on total cash equivalents and
investment securities balance was 2.36%, a decline of 16 basis
points from the same quarter of 2011. This reflected the investment
securities purchases over the past twelve months at yields lower
than those in the existing portfolio. The yield did increase
12 basis points from the fourth quarter of 2011 due to lower
accelerated premium amortization on mortgage-backed securities
during the most recent quarter, offsetting the declining yield on
the remaining investment portfolio.
Table 3 |
|
|
|
|
|
AVERAGE CASH
EQUIVALENTS AND INVESTMENT SECURITIES FOR THE QUARTER |
|
(Dollars in thousands) |
March 31, |
March 31, |
Change |
December 31, |
|
2012 |
2011 |
Amount |
% |
2011 |
Cash equivalents: |
|
|
|
|
|
Federal funds sold |
$ 2,601 |
$ 3,947 |
$ (1,346) |
-34% |
$ 3,184 |
Interest-bearing deposits
in other banks |
35,334 |
106,794 |
(71,460) |
-67% |
20,530 |
Total cash equivalents |
37,935 |
110,741 |
(72,806) |
-66% |
23,714 |
|
|
|
|
|
|
Investment securities: |
|
|
|
|
|
U.S. Treasury
securities |
202 |
10,774 |
(10,572) |
-98% |
204 |
U.S. Government Agency
securities |
213,035 |
183,419 |
29,616 |
16% |
254,030 |
Corporate securities |
8,507 |
9,397 |
(890) |
-9% |
8,854 |
Mortgage-backed
securities |
414,198 |
404,143 |
10,055 |
2% |
445,422 |
Obligations of state and
political sub. |
61,337 |
53,189 |
8,148 |
15% |
62,712 |
Equity investments and
other securities |
12,721 |
12,527 |
194 |
2% |
12,726 |
Total investment securities |
710,000 |
673,449 |
36,551 |
5% |
783,948 |
|
|
|
|
|
|
Total cash equivalents and investment
securities |
$ 747,935 |
$ 784,190 |
$ (36,255) |
-5% |
$ 807,662 |
|
|
|
|
|
|
Tax equivalent yield on cash equivalents and
investment securities |
2.36% |
2.52% |
(0.16) |
|
2.24% |
First quarter 2012 average total deposits of $1.87 billion
declined 3% or $66 million from the same period in 2011. During the
most recent quarter, the Company continued to reduce higher cost
time deposit balances which declined $102 million or 38% from the
corresponding quarter in 2011. Time deposits represented 9% of the
Company's average total deposits in the most recent quarter
compared to 14% during the same quarter of 2011.
Table 4 |
|
|
|
|
|
|
|
|
AVERAGE DEPOSITS,
BORROWINGS AND SUBORDINATED DEBENTURES FOR THE
QUARTER |
|
(Dollars in thousands) |
Q1 |
% of |
Q1 |
% of |
Change |
Q4 |
% of |
|
2012 |
Total |
2011 |
Total |
Amount |
% |
2011 |
Total |
Demand deposits |
$ 585,749 |
31% |
$ 552,229 |
28% |
$ 33,520 |
6% |
$ 622,741 |
33% |
Interest-bearing demand |
366,635 |
20% |
344,090 |
18% |
22,545 |
7% |
375,922 |
19% |
Total checking deposits |
952,384 |
51% |
896,319 |
46% |
56,065 |
6% |
998,663 |
52% |
Savings |
123,725 |
7% |
106,309 |
6% |
17,416 |
16% |
117,619 |
6% |
Money market |
623,111 |
33% |
660,672 |
34% |
(37,561) |
-6% |
640,247 |
33% |
Total non-time deposits |
1,699,220 |
91% |
1,663,300 |
86% |
35,920 |
2% |
1,756,529 |
91% |
Time deposits |
167,418 |
9% |
269,038 |
14% |
(101,620) |
-38% |
179,288 |
9% |
Total deposits |
$ 1,866,638 |
100% |
$ 1,932,338 |
100% |
$ (65,700) |
-3% |
$ 1,935,817 |
100% |
|
|
|
|
|
|
|
|
|
Average rate on total deposits |
0.12% |
|
0.38% |
|
(0.26) |
|
0.14% |
|
|
|
|
|
|
|
|
|
|
Average borrowings and subordinated
debentures |
$ 171,505 |
|
$ 219,599 |
|
$ (48,094) |
-22% |
$ 189,635 |
|
|
|
|
|
|
|
|
|
|
Rate on borrowings and subordinated
debentures 1 |
1.46% |
|
2.95% |
|
(1.49) |
|
1.94% |
|
|
|
|
|
|
|
|
|
|
1 Excludes the impact of
FHLB prepayment in Q4 2011. |
Total average checking balances of $952 million in the first
quarter of 2012 grew $56 million or 6% from the first quarter of
2011 and represented 51% of the Company's average total deposits in
the quarter. The continuing shift in the mix of deposit balances
from time deposits to non-time deposits over the past year helped
reduce the average rate paid on total deposits to .12% in the most
recent quarter, a decline of 26 basis points from the same quarter
in 2011 and a decline of two basis points from the fourth quarter
of 2011.
In the second half of 2011, the Company elected to prepay its
Federal Home Loan Bank ("FHLB") term borrowings of $169 million and
to enter into $120 million in new term borrowings with the FHLB in
order to maintain its interest rate sensitivity position. The rate
on the new term borrowings is 1.05%, a reduction from 3.17% on the
amount prepaid. At March 31, 2012, the average duration of the new
term borrowings was 2.6 years.
Capital Position
The Company continued to improve its capital position as a
result of profitability and slightly lower total assets. As shown
in Table 5 below, at March 31, 2012, the Company's tier 1 and total
risk-based capital ratios measured 20.34% and 21.60%, respectively,
while its leverage ratio was 15.41%.
Table 5 |
|
|
|
|
|
CAPITAL
RATIOS |
|
|
|
|
|
|
|
March 31, |
March 31, |
|
December 31, |
|
|
2012 |
2011 |
Change |
2011 |
Change |
West Coast Bancorp |
|
|
|
|
|
Tier 1 risk-based capital ratio |
20.34% |
17.72% |
2.62 |
19.36% |
0.98 |
Total risk-based capital ratio |
21.60% |
18.98% |
2.62 |
20.62% |
0.98 |
Leverage ratio |
15.41% |
13.40% |
2.01 |
14.61% |
0.80 |
|
|
|
|
|
|
West Coast Bank |
|
|
|
|
|
Tier 1 risk-based capital ratio |
19.62% |
17.02% |
2.60 |
18.66% |
0.96 |
Total risk-based capital ratio |
20.88% |
18.28% |
2.60 |
19.92% |
0.96 |
Leverage ratio |
14.85% |
12.87% |
1.98 |
14.09% |
0.76 |
Operating Results
Pre-tax income in the first quarter of 2012 was $8.9 million, an
increase of $3.1 million or 54% from the first quarter 2011. The
improvement was the result of the favorable impact from the
declines in provision for credit losses and noninterest expenses,
which were partly offset by lower noninterest income. The Company
recorded a provision for income taxes of $3.1 million in the most
recent quarter, up from $.7 million in the same quarter last year,
when the Company maintained a deferred tax asset valuation
allowance. As shown in Table 6 below, first quarter 2012 net income
of $5.8 million increased $.7 million or 13% from $5.1 million in
the corresponding quarter of 2011.
Table 6 |
|
|
|
|
|
|
|
SUMMARY INCOME
STATEMENT |
|
(Dollars in thousands) |
Q1 |
Q1 |
Change |
Q4 |
Change |
|
2012 |
2011 |
$ |
% |
2011 |
$ |
% |
|
|
|
|
|
|
|
|
Net interest income |
$ 22,133 |
$ 21,512 |
$ 621 |
3% |
$ 17,940 |
$ 4,193 |
23% |
Provision for credit losses |
89 |
2,076 |
(1,987) |
-96% |
1,499 |
(1,410) |
-94% |
Noninterest income |
7,887 |
8,916 |
(1,029) |
-12% |
6,419 |
1,468 |
23% |
Noninterest expense |
21,025 |
22,553 |
(1,528) |
-7% |
22,744 |
(1,719) |
-8% |
Income before income taxes |
8,906 |
5,799 |
3,107 |
54% |
116 |
8,790 |
7578% |
Provision (benefit) for income
taxes |
3,117 |
694 |
2,423 |
349% |
(17,646) |
20,763 |
118% |
Net income |
$ 5,789 |
$ 5,105 |
$ 684 |
13% |
$ 17,762 |
$ (11,973) |
-67% |
First quarter 2012 net interest income of $22.1 million
increased $.6 million from the same quarter in 2011. This was a
result of the combined favorable effect from FHLB prepayments in
2011 and lower rates on interest-bearing deposits in the most
recent quarter more than offsetting the unfavorable impact of lower
loan balances and declining yield on earning assets. For the same
reasons, the first quarter 2012 net interest margin of 4.04%
increased 23 basis points from the corresponding quarter last
year.
Table 7 |
|
|
|
|
|
NET INTEREST SPREAD AND
MARGIN |
|
(Annualized, tax-equivalent basis) |
Q1 |
Q1 |
|
Q41 |
|
|
2012 |
2011 |
Change |
2011 |
Change |
Yield on average interest-earning assets |
4.25% |
4.41% |
(0.16) |
4.16% |
0.09 |
Rate on average interest-bearing liabilities
1 |
0.33% |
0.86% |
(0.53) |
1.58% |
(1.25) |
Net interest spread |
3.92% |
3.55% |
0.37 |
2.58% |
1.34 |
Net interest margin |
4.04% |
3.81% |
0.23 |
3.13% |
0.91 |
|
|
|
|
|
|
1 Fourth quarter 2011 rate on
average interest-bearing liabilities includes 75 basis points of
expense associated with the prepayment of FHLB borrowings. |
As shown in Table 8 below, first quarter 2012 total noninterest
income of $7.9 million declined $1.0 million from the same quarter
of 2011, primarily due to the 23% or $.8 million decline in deposit
service charges. This reduction in deposit service charges was
principally caused by the ongoing impact related to the
implementation of Federal Deposit Insurance Corporation's ("FDIC")
guidance on overdraft protection programs. Compared to the fourth
quarter of 2011, deposit service charges decreased $.2 million or
6%.
While payment systems-related revenues increased $.1 million or
5% from the first quarter of 2011, trust and investment services
revenues declined $.2 million or 19% over the same period. The
total net loss on OREO of $.6 million in the quarter ended March
31, 2012, increased from a $.3 million net loss in the first
quarter 2011, but declined from $2.0 million in the fourth quarter
of 2011. Gains on sales of loans grew $.2 million year-over-year in
the first quarter as a result of increased sales of Small Business
Administration loans. Excluding the total net loss on OREO, the
Company's noninterest income was substantially unchanged over the
last two quarters.
Table 8 |
|
|
|
|
|
|
|
NONINTEREST
INCOME |
|
(Dollars in thousands) |
Q1 |
Q1 |
Change |
Q4 |
Change |
|
2012 |
2011 |
$ |
% |
2011 |
$ |
% |
Noninterest income |
|
|
|
|
|
|
|
Service charges on
deposit accounts |
$ 2,818 |
$ 3,644 |
$ (826) |
-23% |
$ 3,005 |
$ (187) |
-6% |
Payment systems-related
revenue |
3,073 |
2,930 |
143 |
5% |
3,081 |
(8) |
0% |
Trust and investment
services revenues |
935 |
1,148 |
(213) |
-19% |
1,114 |
(179) |
-16% |
Gains on sales of
loans |
735 |
513 |
222 |
43% |
300 |
435 |
145% |
Gains on sales of
securities |
147 |
267 |
(120) |
-45% |
192 |
(45) |
-23% |
Other-than-temporary
impairment losses |
(49) |
-- |
(49) |
0% |
-- |
(49) |
0% |
Other |
802 |
748 |
54 |
7% |
708 |
94 |
13% |
Total |
8,461 |
9,250 |
(789) |
-9% |
8,400 |
61 |
1% |
|
|
|
|
|
|
|
|
OREO gains (losses) on
sale |
(53) |
323 |
(376) |
-116% |
(57) |
4 |
-7% |
OREO valuation
adjustments |
(521) |
(657) |
136 |
21% |
(1,924) |
1,403 |
73% |
Total net loss on OREO |
(574) |
(334) |
(240) |
-72% |
(1,981) |
1,407 |
71% |
|
|
|
Total noninterest income |
$ 7,887 |
$ 8,916 |
$ (1,029) |
-12% |
$ 6,419 |
$ 1,468 |
23% |
As shown in Table 9 below, the Company's total noninterest
expense of $21.0 million in the first quarter of 2012 declined by
$1.5 million or 7% from the same quarter in 2011. The efficiency
ratio declined to 69.8% from 74.1% in first quarter of 2011. As a
result of cost savings initiatives implemented in 2011, salaries
and employee benefits declined $.4 million or 3%. The first quarter
2012 reduction in marketing expense of $.3 million compared to the
corresponding quarter in 2011 was related to the Company's
introduction of a new consumer deposit product marketing strategy
in 2012. Additionally, the other noninterest expense category
declined $.8 million the first quarter of 2012 compared to the same
period a year ago, with $.5 million of the decline resulting from a
lower FDIC deposit insurance premium assessment.
Table 9 |
|
|
|
|
|
|
|
NONINTEREST
EXPENSE |
|
(Dollars in thousands) |
Q1 |
Q1 |
Change |
Q4 |
Change |
|
2012 |
2011 |
$ |
% |
2011 |
$ |
% |
Noninterest expense |
|
|
|
|
|
|
|
Salaries and employee
benefits |
$ 11,478 |
$ 11,877 |
$ (399) |
-3% |
$ 12,614 |
$ (1,136) |
-9% |
Equipment |
1,662 |
1,528 |
134 |
9% |
1,560 |
102 |
7% |
Occupancy |
2,075 |
2,165 |
(90) |
-4% |
2,162 |
(87) |
-4% |
Payment systems-related
expense |
1,119 |
1,247 |
(128) |
-10% |
1,265 |
(146) |
-12% |
Professional
fees |
1,111 |
982 |
129 |
13% |
1,122 |
(11) |
-1% |
Postage, printing and
office supplies |
819 |
810 |
9 |
1% |
821 |
(2) |
0% |
Marketing |
312 |
651 |
(339) |
-52% |
659 |
(347) |
-53% |
Communications |
380 |
378 |
2 |
1% |
395 |
(15) |
-4% |
Other noninterest
expense |
2,069 |
2,915 |
(846) |
-29% |
2,146 |
(77) |
-4% |
Total noninterest expense |
$ 21,025 |
$ 22,553 |
$ (1,528) |
-7% |
$ 22,744 |
$ (1,719) |
-8% |
Income Taxes
First quarter 2012 provision for income taxes was $3.1 million,
an increase of $2.4 million from $.7 million in the same quarter of
2011. The first quarter 2012 provision for income taxes is the
result of an effective tax rate of 35% on pre-tax income. The
provision for taxes in the first quarter last year reflected the
impact of the Company's deferred tax asset valuation allowance at
that time, which was subsequently fully reversed in the fourth
quarter of 2011.
Credit Quality
The Company recorded a first quarter 2012 provision for credit
losses of $.1 million, a significant decline from $2.1 million in
the first quarter 2011 and $1.5 million in the previous quarter.
First quarter 2012 net charge-offs of $1.4 million, or .39% of
average loans on an annualized basis, declined from the
corresponding quarter in 2011 and on a linked-quarter basis. As
shown in the table below, net charge-offs declined across nearly
every category. Net charge-offs in dollars and as a percentage of
average loans in the most recent quarter represented the lowest
level of quarterly net charge-off activity since the third quarter
of 2007.
Table 10 |
|
|
|
|
|
|
ALLOWANCE FOR CREDIT
LOSSES AND NET CHARGEOFFS |
|
|
|
Charge-offs as |
|
Charge-offs as |
|
Charge-offs as |
(Dollars in thousands) |
Q1 |
a % of average |
Q1 |
a % of average |
Q4 |
a % of average |
|
2012 |
loan balance |
2011 |
loan balance |
2011 |
loan balance |
Allowance for credit losses, beginning of
period |
$ 35,983 |
|
$ 41,067 |
|
$ 37,016 |
|
Total provision for credit losses |
89 |
|
2,076 |
|
1,499 |
|
Loan net charge-offs: |
|
|
|
|
|
|
Commercial |
(5) |
0.00% |
263 |
0.09% |
292 |
0.10% |
Commercial real estate
construction |
-- |
0.00% |
65 |
0.37% |
48 |
0.33% |
Residential real estate
construction |
1 |
0.00% |
311 |
1.37% |
140 |
1.03% |
Total real estate
construction |
1 |
0.00% |
376 |
0.94% |
188 |
0.66% |
Mortgage |
534 |
0.81% |
520 |
0.66% |
177 |
0.26% |
Home equity |
542 |
0.21% |
853 |
0.32% |
723 |
0.28% |
Total real estate
mortgage |
1,076 |
0.34% |
1,373 |
0.40% |
900 |
0.27% |
Commercial real
estate |
41 |
0.00% |
326 |
0.04% |
812 |
0.10% |
Installment and
consumer |
165 |
1.25% |
168 |
1.09% |
119 |
0.87% |
Overdraft |
160 |
0.00% |
208 |
0.00% |
221 |
0.00% |
Total loan net
charge-offs |
1,438 |
0.10% |
2,714 |
0.18% |
2,532 |
0.17% |
|
|
Total allowance for credit losses |
$ 34,634 |
|
$ 40,429 |
|
$ 35,983 |
|
Components of allowance for credit
losses: |
|
|
|
|
|
|
Allowance for loan
losses |
$ 33,854 |
|
$ 39,692 |
|
$ 35,212 |
|
Reserve for unfunded
commitments |
780 |
|
737 |
|
771 |
|
Total allowance for credit losses |
$ 34,634 |
|
$ 40,429 |
|
$ 35,983 |
|
|
|
|
|
|
|
|
Net loan charge-offs to average loans
(annualized) |
0.39% |
|
0.72% |
|
0.67% |
|
Allowance for loan losses to total loans |
2.30% |
|
2.58% |
|
2.35% |
|
Allowance for credit losses to total
loans |
2.35% |
|
2.63% |
|
2.40% |
|
Allowance for loan losses to nonperforming
loans |
80% |
|
74% |
|
87% |
|
Allowance for credit losses to nonperforming
loans |
82% |
|
75% |
|
89% |
|
The allowance for credit losses was $34.6 million or 2.35% of
total loans at March 31, 2012, compared to an allowance for credit
losses of $40.4 million or 2.63% of total loans a year earlier and
$36.0 million or 2.40% of total loans at year end 2011. The decline
in the allowance for credit losses relative to total loans
reflected the improving trend in the overall risk profile of the
loan portfolio. The allowance for credit losses declined largely
due to lower overall loan balances as well as additional impaired
loans moving from the general valuation allowance to individually
being measured for impairment. The allowance for credit losses
relative to nonperforming loans increased from 75% a year ago to
82% at March 31, 2012. The Company's estimate of an appropriate
allowance for credit losses will continue to be closely related to
the loan portfolio's credit quality performance trends and the
region's economic conditions.
Total nonperforming assets at March 31, 2012, were $69.7 million
or 2.9% of total assets compared to $93.3 million or 3.8% of total
assets a year ago and $71.4 million or 2.9% at year end 2011.
Table 11 |
|
|
|
|
|
NONPERFORMING
ASSETS |
|
(Dollars in thousands) |
Mar. 31, |
Dec. 31, |
Sept. 30, |
June 30, |
Mar. 31, |
|
2012 |
2011 |
2011 |
2011 |
2011 |
Loans on nonaccrual status: |
|
|
|
|
|
Commercial |
$ 6,482 |
$ 7,750 |
$ 9,987 |
$ 9,280 |
$ 12,803 |
Real estate construction: |
|
|
|
|
|
Commercial real estate
construction |
3,749 |
3,750 |
3,886 |
4,357 |
4,032 |
Residential real estate
construction |
1,981 |
2,073 |
3,311 |
3,439 |
4,093 |
Total real estate construction |
5,730 |
5,823 |
7,197 |
7,796 |
8,125 |
Real estate mortgage: |
|
|
|
|
|
Mortgage |
10,744 |
9,624 |
10,877 |
11,527 |
12,165 |
Home equity |
2,528 |
2,325 |
3,285 |
2,755 |
1,426 |
Total real estate mortgage |
13,272 |
11,949 |
14,162 |
14,282 |
13,591 |
Commercial real estate |
16,648 |
15,070 |
21,513 |
19,263 |
19,424 |
Installment and consumer |
1 |
5 |
6 |
1 |
-- |
Total nonaccrual loans |
42,133 |
40,597 |
52,865 |
50,622 |
53,943 |
90 days past due not on nonaccrual |
-- |
-- |
-- |
-- |
-- |
Total nonperforming
loans |
42,133 |
40,597 |
52,865 |
50,622 |
53,943 |
|
|
|
|
|
|
Other real estate owned |
27,525 |
30,823 |
30,234 |
35,374 |
39,329 |
Total nonperforming assets |
$ 69,658 |
$ 71,420 |
$ 83,099 |
$ 85,996 |
$ 93,272 |
|
|
|
|
|
|
Nonperforming loans to total loans |
2.86% |
2.70% |
3.52% |
3.33% |
3.51% |
Nonperforming assets to total assets |
2.89% |
2.94% |
3.30% |
3.49% |
3.80% |
|
|
|
|
|
|
Total delinquent loans 30-89 days past
due |
$ 4,095 |
$ 4,273 |
$ 5,556 |
$ 9,961 |
$ 4,901 |
Delinquent loans to total loans |
0.28% |
0.28% |
0.37% |
0.65% |
0.32% |
Over the past twelve months, total nonaccrual loans declined
$11.8 million or 22% to $42.1 million at March 31, 2012, with
declines centered in commercial, residential real estate
construction, and commercial real estate categories. Home equity
nonaccrual loans increased over the same period, reflecting the
continued pressures on the residential real estate market over the
past year and high level of unemployment.
As indicated in Table 12 below, during the quarter the Company
disposed of 27 OREO properties with a book value of $3.6 million
while acquiring 9 properties with a book value of less than $1
million and recording OREO valuation adjustments totaling $.5
million. The combination of these actions resulted in a $3.3
million or 11% net reduction in total OREO in first quarter of 2012
from year end 2011. The OREO balance reflected write-downs of 54%
from original loan principal, an increase from 48% a year ago. The
largest balance in the OREO portfolio at March 31, 2012, was in the
income-producing properties category followed by homes and land,
all of which are located within the Company's footprint.
Table 12 |
|
|
|
|
|
|
OTHER REAL ESTATE OWNED
ACTIVITY |
|
(Dollars in thousands) |
Q1 2012 |
|
Q1 2011 |
|
Q4 2011 |
|
|
Amount |
# |
Amount |
# |
Amount |
# |
Beginning balance |
$ 30,823 |
264 |
$ 39,459 |
402 |
$ 30,234 |
308 |
Additions to OREO |
810 |
9 |
6,479 |
25 |
9,241 |
15 |
Dispositions of OREO |
(3,587) |
(27) |
(5,952) |
(28) |
(6,728) |
(59) |
OREO valuation
adjustment |
(521) |
-- |
(657) |
-- |
(1,924) |
-- |
Ending balance |
$ 27,525 |
246 |
$ 39,329 |
399 |
$ 30,823 |
264 |
|
|
|
|
|
|
|
Table 13 |
|
|
|
|
|
|
OTHER REAL ESTATE OWNED
BY PROPERTY TYPE |
|
(Dollars in thousands) |
Mar. 31, |
# of |
Mar. 31, |
# of |
Dec. 31, |
# of |
|
2012 |
properties |
2011 |
properties |
2011 |
properties |
Income-producing properties |
$ 9,352 |
15 |
$ 6,613 |
9 |
$ 10,282 |
15 |
Homes |
5,228 |
16 |
15,093 |
64 |
6,008 |
17 |
Land |
4,710 |
14 |
4,427 |
11 |
5,049 |
16 |
Residential site developments |
3,367 |
136 |
6,973 |
236 |
3,506 |
146 |
Lots |
2,453 |
49 |
3,758 |
56 |
2,932 |
51 |
Condominiums |
1,641 |
6 |
1,792 |
12 |
2,252 |
9 |
Multifamily |
408 |
4 |
673 |
11 |
428 |
4 |
Commercial site developments |
366 |
6 |
-- |
-- |
366 |
6 |
Total |
$ 27,525 |
246 |
$ 39,329 |
399 |
$ 30,823 |
264 |
Other
The Company will hold a Webcast conference call Monday, April
23, 2012, at 1:00 p.m. Pacific Time, during which the Company will
discuss first quarter 2012 results and current activities. To
access the conference call via a live Webcast, go to www.wcb.com
and click on Investor Relations and the "1st Quarter 2012 Earnings
Conference Call" tab. The conference call may also be accessed by
dialing (866) 394-3464 Conference ID#: 66605108 a few minutes prior
to 1:00 p.m. Pacific Time. The call will be available for replay by
accessing the Company's website at www.wcb.com and following the
same instructions.
West Coast Bancorp is a publicly held, Northwest bank holding
company headquartered in Oregon with $2.4 billion in assets, and
the parent company of West Coast Bank and West Coast Trust Company,
Inc. West Coast Bank operates 60 branches in Oregon and
Washington. The Company serves clients who seek the resources,
sophisticated products and expertise of larger financial
institutions, along with the local decision-making, market
knowledge, and customer service orientation of a community bank.
The Company offers a broad range of banking, investment, fiduciary
and trust services. For more information, please visit the
Company web site at www.wcb.com.
The West Coast Bancorp logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=12530
Forward Looking Statements
Statements in this release regarding future events, performance
or results are "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995 ("PSLRA") and
are made pursuant to the safe harbors of the PSLRA. These
statements can often be identified by words such as "expects,"
"believes," "projects," "anticipates," or "will," or other
words of similar meaning, and specifically include in this release
all statements regarding the expected future benefits of our
ongoing cost-cutting initiatives. Actual results could be quite
different from those expressed or implied by the forward-looking
statements, which give our current expectations about the future
and are not guarantees. Forward-looking statements speak only as of
the date they are made, and we do not undertake any obligation to
update them to reflect changes that occur after that date.
A number of factors could cause results to differ significantly
from our expectations, including, among others, the effects of (i)
market conditions in our service areas on our efforts to continue
to reduce our levels of nonperforming assets and increase loan
originations, (ii) cost reduction initiatives, as well as (iii) all
risk factors identified in our Annual Report on Form 10-K for the
year ended December 31, 2011, including under the heading "Forward
Looking Statement Disclosure" and in the section "Risk
Factors".
Table 14 |
|
|
|
|
|
|
|
INCOME
STATEMENT |
|
(Dollars in thousands) |
Q1 |
Q1 |
Change |
Q4 |
Full year |
Full year |
|
2012 |
2011 |
$ |
% |
2011 |
2011 |
2010 |
Net interest income |
|
|
|
|
|
|
|
Interest and fees on
loans |
$ 19,209 |
$ 20,299 |
$ (1,090) |
-5% |
$ 19,647 |
$ 80,237 |
$ 88,409 |
Interest on investment
securities |
4,099 |
4,548 |
(449) |
-10% |
4,266 |
18,251 |
16,668 |
Other interest
income |
25 |
71 |
(46) |
-65% |
19 |
187 |
499 |
Total interest income |
23,333 |
24,918 |
(1,585) |
-6% |
23,932 |
98,675 |
105,576 |
Interest expense on deposit
accounts |
577 |
1,809 |
(1,232) |
-68% |
702 |
4,973 |
12,130 |
Interest on borrowings and subordinated
debentures |
623 |
1,597 |
(974) |
-61% |
925 |
5,808 |
7,813 |
Borrowings prepayment charge |
-- |
-- |
-- |
0% |
4,365 |
7,140 |
2,326 |
Total interest expense |
1,200 |
3,406 |
(2,206) |
-65% |
5,992 |
17,921 |
22,269 |
Net interest
income |
22,133 |
21,512 |
621 |
3% |
17,940 |
80,754 |
83,307 |
|
|
|
|
|
|
|
|
Provision for credit losses |
89 |
2,076 |
(1,987) |
-96% |
1,499 |
8,133 |
18,652 |
|
|
|
|
|
|
|
|
Noninterest income |
|
|
|
|
|
|
|
Service charges on
deposit accounts |
2,818 |
3,644 |
(826) |
-23% |
3,005 |
13,353 |
15,690 |
Payment systems related
revenue |
3,073 |
2,930 |
143 |
5% |
3,081 |
12,381 |
11,393 |
Trust and investment
services revenues |
935 |
1,148 |
(213) |
-19% |
1,114 |
4,503 |
4,267 |
Gains on sales of
loans |
735 |
513 |
222 |
43% |
300 |
1,335 |
1,197 |
Net OREO valuation
adjustments and gains (losses) on sales |
(574) |
(334) |
(240) |
-72% |
(1,981) |
(3,236) |
(4,415) |
Other-than-temporary
impairment losses |
(49) |
-- |
(49) |
-- |
-- |
(179) |
-- |
Gain on sales of
securities |
147 |
267 |
(120) |
-45% |
192 |
713 |
1,562 |
Other |
802 |
748 |
54 |
7% |
708 |
2,949 |
3,003 |
Total noninterest income |
7,887 |
8,916 |
(1,029) |
-12% |
6,419 |
31,819 |
32,697 |
Noninterest expense |
|
|
|
|
|
|
|
Salaries and employee
benefits |
11,478 |
11,877 |
(399) |
-3% |
12,614 |
48,587 |
45,854 |
Equipment |
1,662 |
1,528 |
134 |
9% |
1,560 |
6,113 |
6,247 |
Occupancy |
2,075 |
2,165 |
(90) |
-4% |
2,162 |
8,674 |
8,894 |
Payment systems related
expense |
1,119 |
1,247 |
(128) |
-10% |
1,265 |
5,141 |
4,727 |
Professional
fees |
1,111 |
982 |
129 |
13% |
1,122 |
4,118 |
3,991 |
Postage, printing and
office supplies |
819 |
810 |
9 |
1% |
821 |
3,265 |
3,148 |
Marketing |
312 |
651 |
(339) |
-52% |
659 |
3,003 |
3,086 |
Communications |
380 |
378 |
2 |
1% |
395 |
1,549 |
1,525 |
Other noninterest
expense |
2,069 |
2,915 |
(846) |
-29% |
2,146 |
10,425 |
12,865 |
Total noninterest expense |
21,025 |
22,553 |
(1,528) |
-7% |
22,744 |
90,875 |
90,337 |
Income before income taxes |
8,906 |
5,799 |
3,107 |
54% |
116 |
13,565 |
7,015 |
Provision (benefit) for income
taxes |
3,117 |
694 |
2,423 |
349% |
(17,646) |
(20,212) |
3,790 |
Net income |
$ 5,789 |
$ 5,105 |
$ 684 |
13% |
$ 17,762 |
$ 33,777 |
$ 3,225 |
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
|
Basic |
$ 0.28 |
$ 0.25 |
$ 0.03 |
|
$ 0.87 |
$ 1.65 |
$ 0.16 |
Diluted |
$ 0.27 |
$ 0.24 |
$ 0.03 |
|
$ 0.83 |
$ 1.58 |
$ 0.16 |
|
|
|
|
|
|
|
|
Weighted average common
shares |
19,038 |
18,960 |
78 |
|
19,032 |
19,007 |
17,460 |
Weighted average diluted
shares |
20,054 |
19,939 |
115 |
|
19,911 |
19,940 |
18,059 |
|
|
|
|
|
|
|
|
Tax equivalent net interest
income |
$ 22,398 |
$ 21,770 |
$ 628 |
|
$ 18,223 |
$ 81,870 |
$ 84,478 |
|
|
|
|
|
|
Table 15 |
|
|
|
|
|
BALANCE
SHEETS |
|
(Dollars in thousands) |
Mar. 31, |
Mar. 31, |
Change |
Dec. 31, |
|
2012 |
2011 |
$ |
% |
2011 |
Assets: |
|
|
|
|
|
Cash and due from banks |
$ 59,146 |
$ 50,865 |
$ 8,281 |
16% |
$ 59,955 |
Federal funds sold |
1,803 |
1,966 |
(163) |
-8% |
4,758 |
Interest-bearing deposits in other banks |
108,735 |
122,224 |
(13,489) |
-11% |
27,514 |
Total cash and cash
equivalents |
169,684 |
175,055 |
(5,371) |
-3% |
92,227 |
Investment securities |
670,534 |
643,705 |
26,829 |
4% |
729,844 |
Loans |
1,470,848 |
1,535,700 |
(64,852) |
-4% |
1,501,301 |
Allowance for loan losses |
(33,854) |
(39,692) |
5,838 |
15% |
(35,212) |
Loans, net |
1,436,994 |
1,496,008 |
(59,014) |
-4% |
1,466,089 |
Total interest earning
assets |
2,254,019 |
2,305,780 |
(51,761) |
-2% |
2,267,446 |
OREO, net |
27,525 |
39,329 |
(11,804) |
-30% |
30,823 |
Other assets |
104,550 |
97,760 |
6,790 |
7% |
110,904 |
Total assets |
$ 2,409,287 |
$ 2,451,857 |
$ (42,570) |
-2% |
$ 2,429,887 |
|
|
|
|
|
|
Liabilities and Stockholders' Equity: |
|
|
|
|
|
Demand |
$ 620,015 |
$ 561,995 |
$ 58,020 |
10% |
$ 621,962 |
Savings and interest-bearing demand |
503,829 |
461,542 |
42,287 |
9% |
495,117 |
Money market |
614,831 |
661,327 |
(46,496) |
-7% |
625,373 |
Time deposits |
155,830 |
243,567 |
(87,737) |
-36% |
173,117 |
Total deposits |
1,894,505 |
1,928,431 |
(33,926) |
-2% |
1,915,569 |
Borrowings and subordinated debentures |
171,000 |
219,599 |
(48,599) |
-22% |
171,000 |
Reserve for unfunded commitments |
780 |
737 |
43 |
6% |
771 |
Other liabilities |
22,020 |
26,102 |
(4,082) |
-16% |
28,068 |
Total liabilities |
2,088,305 |
2,174,869 |
(86,564) |
-4% |
2,115,408 |
Stockholders' equity |
320,982 |
276,988 |
43,994 |
16% |
314,479 |
Total liabilities and
stockholders' equity |
$ 2,409,287 |
$ 2,451,857 |
$ (42,570) |
-2% |
$ 2,429,887 |
|
|
|
|
|
|
|
|
|
Table 16 |
|
|
|
|
|
|
|
|
PERIOD END
LOANS |
|
(Dollars in thousands) |
Mar. 31, |
% of |
Mar. 31, |
% of |
Change |
Dec. 31, |
% of |
|
2012 |
Total |
2011 |
total |
Amount |
% |
2011 |
Total |
Commercial loans |
$ 278,195 |
19% |
$ 306,864 |
20% |
$ (28,669) |
-9% |
$ 299,766 |
20% |
Commercial real estate
construction |
19,839 |
1% |
17,711 |
1% |
2,128 |
12% |
17,438 |
1% |
Residential real estate
construction |
12,082 |
1% |
19,896 |
1% |
(7,814) |
-39% |
12,724 |
1% |
Total real estate construction loans |
31,921 |
2% |
37,607 |
2% |
(5,686) |
-15% |
30,162 |
2% |
Mortgage |
65,063 |
5% |
74,920 |
5% |
(9,857) |
-13% |
66,610 |
5% |
Home equity |
252,990 |
17% |
266,606 |
17% |
(13,616) |
-5% |
258,384 |
17% |
Total real estate mortgage |
318,053 |
22% |
341,526 |
22% |
(23,473) |
-7% |
324,994 |
22% |
Commercial real estate loans |
830,053 |
56% |
834,880 |
55% |
(4,827) |
-1% |
832,767 |
55% |
Installment and other consumer loans |
12,626 |
1% |
14,823 |
1% |
(2,197) |
-15% |
13,612 |
1% |
Total loans |
$ 1,470,848 |
|
$ 1,535,700 |
|
$ (64,852) |
-4% |
$ 1,501,301 |
|
|
|
|
|
|
|
Table 17 |
|
|
|
|
|
AVERAGE BALANCE
SHEETS |
|
(Dollars in thousands) |
Q1 |
Q1 |
Q4 |
Full Year |
Full Year |
|
2012 |
2011 |
2011 |
2011 |
2010 |
Cash and due from banks |
$ 50,017 |
$ 48,698 |
$ 53,829 |
$ 52,258 |
$ 48,976 |
Federal funds sold |
2,601 |
3,947 |
3,184 |
3,796 |
6,194 |
Interest-bearing deposits in other banks |
35,334 |
106,794 |
20,530 |
67,332 |
188,925 |
Total cash and cash
equivalents |
87,952 |
159,439 |
77,543 |
123,386 |
244,095 |
Investment securities |
710,000 |
673,449 |
783,948 |
734,893 |
606,099 |
Total loans |
1,482,522 |
1,529,290 |
1,498,437 |
1,516,409 |
1,622,445 |
Allowance for loan losses |
(35,249) |
(40,296) |
(36,101) |
(38,456) |
(42,003) |
Loans, net |
1,447,273 |
1,488,994 |
1,462,336 |
1,477,953 |
1,580,442 |
Total interest earning assets |
2,232,288 |
2,314,612 |
2,309,396 |
2,324,016 |
2,425,073 |
Other assets |
132,951 |
128,986 |
122,493 |
124,562 |
145,235 |
Total assets |
$ 2,378,176 |
$ 2,450,868 |
$ 2,446,320 |
$ 2,460,794 |
$ 2,575,871 |
|
|
|
|
|
|
Demand |
$ 585,749 |
$ 552,229 |
$ 622,741 |
$ 592,630 |
$ 540,280 |
Savings and interest-bearing demand |
490,361 |
450,399 |
493,541 |
474,719 |
438,665 |
Money market |
623,111 |
660,672 |
640,247 |
654,329 |
659,542 |
Time deposits |
167,417 |
269,038 |
179,288 |
217,149 |
388,500 |
Total deposits |
1,866,638 |
1,932,338 |
1,935,817 |
1,938,827 |
2,026,987 |
Borrowings and subordinated debentures |
171,505 |
219,599 |
189,635 |
212,237 |
264,589 |
Total interest bearing liabilities |
1,452,394 |
1,599,708 |
1,502,711 |
1,558,434 |
1,751,296 |
Other liabilities |
22,782 |
24,983 |
23,245 |
23,332 |
18,486 |
Stockholders' equity |
317,251 |
273,948 |
297,623 |
286,398 |
265,809 |
Total liabilities and stockholders'
equity |
$ 2,378,176 |
$ 2,450,868 |
$ 2,446,320 |
$ 2,460,794 |
$ 2,575,871 |
CONTACT: Robert D. Sznewajs
President & CEO
(503) 598-3243
Anders Giltvedt
Executive Vice President & CFO
(503) 598-3250
West Coast Bancorp (MM) (NASDAQ:WCBO)
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