- Return on Average Assets Was 1.01% in the Second
Quarter 2012, an Improvement From .76% in the Same Quarter Last
Year.
- Net Income for the Six Month Period Ended, June 30,
2012 Was $11.8 Million, an Increase of 21% From the Same Period in
2011.
- The Written Agreement Between the Holding Company and
Certain Regulators Was Terminated on June 27, 2012.
- Second Quarter 2012 Total Noninterest Expense Declined
6%, or $1.5 Million, From the Same Period in 2011.
- The Efficiency Ratio Improved to 70.3% in First Half of
2012 From 75.1% in the Same Period in 2011.
West Coast Bancorp (Nasdaq:WCBO) ("Bancorp" or
"Company"), the parent company of West Coast Bank ("Bank") and West
Coast Trust Company, Inc., today announced second quarter 2012 net
income of $6.0 million or $.28 per diluted share compared to net
income of $4.6 million or $.22 per diluted share in the same
quarter of 2011. Net income for the first six months of 2012 was
$11.8 million or $.55 per diluted share compared to net income of
$9.7 million or $.45 per diluted share in the same period of
2011.
"Net income reached $11.8 million for the first half of 2012 and
grew 21% or $2.1 million from the same period a year ago," said
Robert D. Sznewajs, President and Chief Executive Officer. "The
continued reduction in credit-related costs and ongoing
improvements in expense management were the primary contributors to
the improved operating results. The Company's return on average
assets for the first half of 2012 reached 1.00% compared to .80% in
the same period in 2011."
Table 1 below shows summary financial information for the
quarters ended June 30, 2012, and 2011, and March 31, 2012.
|
Table 1 |
|
|
|
|
|
SUMMARY FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
Qtr. ended |
Qtr. ended |
|
Qtr. ended |
|
|
June 30, |
June 30, |
|
March 31, |
|
(Dollars and shares in thousands) |
2012 |
2011 |
Change |
2012 |
Change |
Net income |
$ 6,034 |
$ 4,634 |
$ 1,400 |
$ 5,789 |
$ 245 |
Net income available to common stockholders
1 |
$ 5,639 |
$ 4,312 |
$ 1,327 |
$ 5,393 |
246 |
|
|
|
|
|
|
Selective quarterly performance
ratios |
|
|
|
|
|
Return on average assets, annualized |
1.01% |
0.76% |
0.25 |
0.98% |
0.03% |
Return on average equity, annualized |
7.50% |
6.58% |
0.92 |
7.34% |
0.16% |
Efficiency ratio2 |
70.85% |
76.05% |
(5.20) |
69.76% |
1.09% |
|
|
|
|
|
|
Share and Per Share
Figures-Actual |
|
|
|
|
|
Common shares outstanding at period end |
19,295 |
19,316 |
(21) |
19,295 |
-- |
Weighted average diluted shares3 |
21,547 |
21,326 |
221 |
21,348 |
199 |
Weighted average diluted shares-two class
method 4 |
20,256 |
20,025 |
231 |
20,054 |
202 |
Net income per diluted share |
$ 0.28 |
$ 0.22 |
$ 0.06 |
$ 0.27 |
$ 0.01 |
Book value per common share |
$ 15.91 |
$ 13.69 |
$ 2.22 |
$ 15.54 |
$ 0.37 |
|
|
|
|
|
|
1 Adjusted for the impact of
allocating net income to participating instruments, which include
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
(1,148), options (26), and restricted stock (78). |
4 Reflects the calculation
of diluted shares under the two-class method which includes average
common (19,082), options (26), and warrants (1,148). |
|
Balance Sheet Overview
Total loans at June 30, 2012, increased $25 million or 2% from
March 31, 2012, with growth occurring in the commercial real estate
term and construction portfolios. Second quarter 2012 average total
loan balances of $1.48 billion declined $44 million or 3% from the
same quarter of 2011. The decline was primarily a result of lower
average commercial, mortgage, and home equity balances. Home equity
loan and line production continues to reflect the effects of
residential real estate market conditions. The yield on the loan
portfolio of 5.08% in the most recent quarter declined 25 basis
points compared to the second quarter last year as higher yielding
loans paid off and new loans were originated at lower yields
reflecting prevailing market interest rates. The yield on loans
contracted 12 basis points in the second quarter of 2012 from the
first quarter of 2012.
|
Table 2 |
|
|
|
|
|
|
|
|
AVERAGE LOANS FOR THE
QUARTER |
(Dollars in thousands) |
June 30, |
% of |
June 30, |
% of |
Change |
March 31, |
% of |
|
2012 |
Total |
2011 |
total |
Amount |
% |
2012 |
Total |
Commercial loans |
$ 284,473 |
19% |
$ 301,436 |
20% |
$ (16,963) |
-6% |
$ 288,395 |
19% |
Commercial real estate construction |
23,200 |
2% |
19,029 |
1% |
4,171 |
22% |
18,547 |
1% |
Residential real estate construction |
11,283 |
1% |
17,223 |
1% |
(5,940) |
-34% |
12,680 |
1% |
Total real estate construction loans |
34,483 |
3% |
36,252 |
2% |
(1,769) |
-5% |
31,227 |
2% |
Mortgage |
62,610 |
4% |
73,303 |
5% |
(10,693) |
-15% |
66,125 |
5% |
Home equity |
252,014 |
17% |
266,221 |
17% |
(14,207) |
-5% |
254,883 |
17% |
Total real estate mortgage |
314,624 |
21% |
339,524 |
22% |
(24,900) |
-7% |
321,008 |
22% |
Commercial real estate loans |
832,870 |
56% |
831,738 |
55% |
1,132 |
0% |
828,681 |
56% |
Installment and other consumer loans |
12,776 |
1% |
14,220 |
1% |
(1,444) |
-10% |
13,211 |
1% |
Total loans |
$ 1,479,226 |
|
$ 1,523,170 |
|
$ (43,944) |
-3% |
$ 1,482,522 |
|
|
|
|
|
|
|
|
|
|
Yield on loans |
5.08% |
|
5.33% |
|
(0.25) |
|
5.20% |
|
|
The 2012 second quarter average balance of total cash
equivalents and investment securities of $775 million remained
relatively unchanged over the past twelve months. The Company
reduced its average cash equivalents balance by $50 million in the
most recent quarter from the second quarter of 2011 while
increasing its investment securities portfolio by $29 million. The
shift towards the investment portfolio reflected efforts to improve
net interest income and margin in a period where market interest
rates are expected to remain low for some time. Over the past year,
the Company has increased its investments in U.S. government agency
and municipal securities. During this time purchases consisted
principally of U.S. government agency securities with 3-5-year
maturities as well as 10-year and 15-year fully amortizing U.S.
government agency mortgage-backed securities. The expected duration
of the investment portfolio was approximately 2.8 years at June 30,
2012, compared to approximately 3.0 years a year ago.
The 2012 second quarter yield on total cash equivalents and
investment securities balances was 2.29%, a decline of 31 basis
points from the corresponding quarter of 2011, and down 7 basis
points from the first quarter of 2012. This reflected continued
investment securities purchases with yields lower than those that
matured or were called in the portfolio.
|
Table 3 |
|
|
|
|
|
AVERAGE CASH
EQUIVALENTS AND INVESTMENT SECURITIES FOR THE QUARTER |
(Dollars in thousands) |
June 30, |
June 30, |
Change |
March 31, |
|
2012 |
2011 |
Amount |
% |
2012 |
Cash equivalents: |
|
|
|
|
|
Federal funds sold |
$ 2,555 |
$ 4,790 |
$ (2,235) |
-47% |
$ 2,601 |
Interest-bearing deposits in other
banks |
45,260 |
93,225 |
(47,965) |
-51% |
35,334 |
Total cash equivalents |
47,815 |
98,015 |
(50,200) |
-51% |
37,935 |
|
|
|
|
|
|
Investment securities: |
|
|
|
|
|
U.S. Treasury securities |
200 |
4,261 |
(4,061) |
-95% |
202 |
U.S. Government agency securities |
230,509 |
183,601 |
46,908 |
26% |
213,035 |
Corporate securities |
8,516 |
9,846 |
(1,330) |
-14% |
8,507 |
Mortgage-backed securities |
407,011 |
427,944 |
(20,933) |
-5% |
414,198 |
Obligations of state and political
sub. |
67,882 |
59,850 |
8,032 |
13% |
61,337 |
Equity investments and other
securities |
12,735 |
12,614 |
121 |
1% |
12,721 |
Total investment securities |
726,853 |
698,116 |
28,737 |
4% |
710,000 |
|
|
|
|
|
|
Total cash equivalents and investment
securities |
$ 774,668 |
$ 796,131 |
$ (21,463) |
-3% |
$ 747,935 |
|
|
|
|
|
|
Tax equivalent yield on cash equivalents and
investment securities |
2.29% |
2.60% |
(0.31) |
|
2.36% |
|
Average total deposits of $1.87 billion in the second quarter
2012 declined 3% or $62 million from the same period in 2011 and
were substantially unchanged from the prior quarter. Consistent
with past trends, the Company continued to reduce its time deposit
balances, which declined $74 million or 33% from the corresponding
quarter in 2011. Time deposits represented 8% of the Company's
average total deposits in the most recent quarter compared to 12%
during the same quarter of 2011.
|
Table 4 |
|
|
|
|
|
|
|
|
AVERAGE DEPOSITS,
BORROWINGS AND SUBORDINATED DEBENTURES FOR THE
QUARTER |
(Dollars in thousands) |
Q2 |
% of |
Q2 |
% of |
Change |
Q1 |
% of |
|
2012 |
Total |
2011 |
Total |
Amount |
% |
2012 |
Total |
Demand deposits |
$ 621,547 |
33% |
$ 578,562 |
29% |
$ 42,985 |
7% |
$ 585,749 |
31% |
Interest-bearing demand |
374,579 |
20% |
365,407 |
19% |
9,172 |
3% |
366,635 |
20% |
Total checking deposits |
996,126 |
53% |
943,969 |
48% |
52,157 |
6% |
952,384 |
51% |
Savings |
127,930 |
7% |
110,683 |
6% |
17,247 |
16% |
123,725 |
7% |
Money market |
596,949 |
32% |
654,668 |
34% |
(57,719) |
-9% |
623,111 |
33% |
Total non-time deposits |
1,721,005 |
92% |
1,709,320 |
88% |
11,685 |
1% |
1,699,220 |
91% |
Time deposits |
151,085 |
8% |
224,674 |
12% |
(73,589) |
-33% |
167,418 |
9% |
Total deposits |
$ 1,872,090 |
100% |
$ 1,933,994 |
100% |
$ (61,904) |
-3% |
$ 1,866,638 |
100% |
|
|
|
|
|
|
|
|
|
Average rate on total deposits |
0.09% |
|
0.31% |
|
(0.22) |
|
0.12% |
|
|
|
|
|
|
|
|
|
|
Average borrowings and subordinated
debentures |
$ 178,241 |
|
$ 219,599 |
|
$ (41,358) |
-19% |
$ 171,505 |
|
|
|
|
|
|
|
|
|
|
Rate on borrowings and subordinated
debentures |
1.44% |
|
3.04% |
|
(1.60) |
|
1.46% |
|
|
Second quarter 2012 average total checking balances of $996
million grew $52 million or 6% from second quarter 2011 and
represented 53% of the Company's average total deposits in the
quarter. The lower market interest rates and continuing shift in
the mix of deposit balances from time deposits to non-time deposits
over the past year reduced the average rate paid on total deposits
to 9 basis points in the most recent quarter, a decline of 22 basis
points from the corresponding quarter in 2011 and a decline of 3
basis points for sequential quarters.
Capital Position
As shown in Table 5 below, the Company improved its June 30,
2012, capital position compared to June 30, 2011. This was
primarily due to continued profitability.
On June 27, 2012, the Written Agreement between the Federal
Reserve Bank of San Francisco, the State of Oregon, Division of
Finance and Corporate Securities ("DFCS"), and the Company was
terminated. This agreement precluded Bancorp from paying cash
dividends to shareholders as well as requiring Bancorp to maintain
risk-based capital ratios in excess of that required for well
capitalized status. The Memorandum of Understanding between the
Federal Deposit Insurance Corporation ("FDIC"), DFCS and West Coast
Bank remains in place and restricts payments of dividends from the
Bank to Bancorp.
|
Table 5 |
|
|
|
|
|
CAPITAL
RATIOS |
|
|
|
|
|
|
|
June 30, |
June 30, |
|
March 31, |
|
|
2012 |
2011 |
Change |
2012 |
Change |
West Coast Bancorp |
|
|
|
|
|
Tier 1 risk-based capital ratio |
20.33% |
17.99% |
2.34 |
20.36% |
(0.03) |
Total risk-based capital ratio |
21.50% |
19.25% |
2.25 |
21.53% |
(0.03) |
Leverage ratio |
15.55% |
13.55% |
2.00 |
15.41% |
0.14 |
|
|
|
|
|
|
West Coast Bank |
|
|
|
|
|
Tier 1 risk-based capital ratio |
19.62% |
17.30% |
2.32 |
19.62% |
-- |
Total risk-based capital ratio |
20.88% |
18.56% |
2.32 |
20.88% |
-- |
Leverage ratio |
15.02% |
13.04% |
1.98 |
14.85% |
0.17 |
|
Operating Results
As shown in Table 6 below, pre-tax income in the second quarter
of 2012 was $9.3 million, an increase of $5.6 million or 155% from
the corresponding quarter in 2011, and a $.4 million or 4%
improvement from the first quarter of 2012. The improvement was
principally the result of declines in the provision for credit
losses and total noninterest expense. Net income of $6.0 million in
the second quarter of 2012 increased $1.4 million or 30% from the
corresponding quarter last year, and $.2 million or 4% from the
first quarter of 2012.
|
Table 6 |
|
|
|
|
|
|
|
SUMMARY INCOME
STATEMENT |
(Dollars in thousands) |
Q2 |
Q2 |
Change |
Q1 |
Change |
|
2012 |
2011 |
$ |
% |
2012 |
$ |
% |
|
|
|
|
|
|
|
|
Net interest income |
$ 21,773 |
$ 21,961 |
$ (188) |
-1% |
$ 22,133 |
$ (360) |
-2% |
Provision (benefit) for credit losses |
(492) |
3,426 |
(3,918) |
-114% |
89 |
(581) |
-653% |
Noninterest income |
8,494 |
8,070 |
424 |
5% |
7,887 |
607 |
8% |
Noninterest expense |
21,476 |
22,958 |
(1,482) |
-6% |
21,025 |
451 |
2% |
Income before income taxes |
9,283 |
3,647 |
5,636 |
155% |
8,906 |
377 |
4% |
Provision (benefit) for income taxes |
3,249 |
(987) |
4,236 |
429% |
3,117 |
132 |
4% |
Net income |
$ 6,034 |
$ 4,634 |
$ 1,400 |
30% |
$ 5,789 |
$ 245 |
4% |
|
Second quarter 2012 net interest income of $21.8 million
declined $.2 million from the same quarter in 2011. This was
primarily a result of lower average earning asset balances and a
declining yield on those earning assets more than offsetting the
lower cost of FHLB borrowings and interest-bearing deposits. The
second quarter 2012 net interest margin of 3.93% increased 8 basis
points from the corresponding quarter last year largely due to
lower volume and cost of interest-bearing liabilities. For the
sequential quarters, the net interest margin contracted 11 basis
points mainly as a result of declining yield on the loan
portfolio.
|
Table 7 |
|
|
|
|
|
NET INTEREST SPREAD AND
MARGIN |
(Annualized, tax-equivalent basis) |
Q2 |
Q2 |
|
Q1 |
|
|
2012 |
2011 |
Change |
2012 |
Change |
Yield on average interest-earning assets |
4.12% |
4.39% |
(0.27) |
4.25% |
(0.13) |
Rate on average interest-bearing
liabilities |
0.30% |
0.80% |
(0.50) |
0.33% |
(0.03) |
Net interest spread |
3.82% |
3.59% |
0.23 |
3.92% |
(0.10) |
Net interest margin |
3.93% |
3.85% |
0.08 |
4.04% |
(0.11) |
|
As shown in Table 8 below, second quarter 2012 total noninterest
income of $8.5 million increased $.4 million or 5% from the same
quarter in 2011. The increase can be attributed to a rise in sales
of Small Business Administration and residential mortgage loans,
along with an increase in trust and investment services revenues.
These increases were partly offset by a $.4 million or 10% decline
in deposit service charges. Total noninterest income increased 8%
or $.6 million from the first quarter of 2012, in large part due to
growth in deposit service charges, which increased $.4 million or
14% as a result of repricing actions taken in the second
quarter.
The total net loss on OREO of $1.0 million in the quarter ended
June 30, 2012, increased slightly from a $.9 million net loss in
the same quarter of 2011, and from $.6 million on a linked-quarter
basis. Excluding the total net loss on OREO, the Company's second
quarter noninterest income grew both on a year-over-year and
sequential quarter basis.
|
Table 8 |
|
|
|
|
|
|
|
NONINTEREST
INCOME |
(Dollars in thousands) |
Q2 |
Q2 |
Change |
Q1 |
Change |
|
2012 |
2011 |
$ |
% |
2012 |
$ |
% |
Noninterest income |
|
|
|
|
|
|
|
Service charges on deposit accounts |
$ 3,212 |
$ 3,575 |
$ (363) |
-10% |
$ 2,818 |
$ 394 |
14% |
Payment systems-related revenue |
3,084 |
3,169 |
(85) |
-3% |
3,073 |
11 |
0% |
Trust and investment services
revenues |
1,457 |
1,208 |
249 |
21% |
935 |
522 |
56% |
Gains on sales of loans |
722 |
300 |
422 |
141% |
735 |
(13) |
-2% |
Gains on sales of securities |
228 |
130 |
98 |
75% |
147 |
81 |
55% |
Other-than-temporary impairment
losses |
-- |
(179) |
179 |
0% |
(49) |
49 |
0% |
Other |
821 |
777 |
44 |
6% |
802 |
19 |
2% |
Total |
9,524 |
8,980 |
544 |
6% |
8,461 |
1,063 |
13% |
|
|
|
|
|
|
|
|
OREO gains (losses) on sale |
183 |
645 |
(462) |
-72% |
(53) |
236 |
445% |
OREO valuation adjustments |
(1,213) |
(1,555) |
342 |
22% |
(521) |
(692) |
-133% |
Total net loss on OREO |
(1,030) |
(910) |
(120) |
-13% |
(574) |
(456) |
-79% |
|
|
|
|
|
|
|
|
Total noninterest income |
$ 8,494 |
$ 8,070 |
$ 424 |
5% |
$ 7,887 |
$ 607 |
8% |
|
As shown in Table 9 below, the Company's total noninterest
expense of $21.5 million in the second quarter of 2012 declined by
$1.5 million or 6% from the same quarter in 2011. The efficiency
ratio declined to 70.9% from 76.1% during the same periods. As a
result of cost savings initiatives and product changes implemented
over the past year, marketing, payment system, occupancy and other
noninterest expense declined. Comparing the second quarter of 2012
to the corresponding quarter in 2011, lower salary expenses were
offset by higher employee benefit costs. The year-over-year second
quarter reduction in marketing expense of $.6 million was related
to the Company's introduction of a new consumer deposit product
marketing strategy in 2012. Additionally, the other noninterest
expense category declined $.5 million in the most recent quarter of
2012 compared to the same period a year ago, with $.2 million of
the decline resulting from a lower FDIC deposit insurance premium
assessment. The increase in total noninterest expense in the second
quarter of 2012 compared to the first quarter of 2012 was primarily
attributable to the increase in employee benefit costs.
|
Table 9 |
|
|
|
|
|
|
|
NONINTEREST
EXPENSE |
(Dollars in thousands) |
Q2 |
Q2 |
Change |
Q1 |
Change |
|
2012 |
2011 |
$ |
% |
2012 |
$ |
% |
Noninterest expense |
|
|
|
|
|
|
|
Salaries and employee benefits |
$ 12,081 |
$ 12,119 |
$ (38) |
0% |
$ 11,478 |
$ 603 |
5% |
Equipment |
1,584 |
1,564 |
20 |
1% |
1,662 |
(78) |
-5% |
Occupancy |
2,119 |
2,232 |
(113) |
-5% |
2,075 |
44 |
2% |
Payment systems-related
expense |
1,075 |
1,350 |
(275) |
-20% |
1,119 |
(44) |
-4% |
Professional fees |
1,060 |
976 |
84 |
9% |
1,111 |
(51) |
-5% |
Postage, printing and office
supplies |
729 |
862 |
(133) |
-15% |
819 |
(90) |
-11% |
Marketing |
255 |
831 |
(576) |
-69% |
312 |
(57) |
-18% |
Communications |
419 |
389 |
30 |
8% |
380 |
39 |
10% |
Other noninterest expense |
2,154 |
2,635 |
(481) |
-18% |
2,069 |
85 |
4% |
Total noninterest expense |
$ 21,476 |
$ 22,958 |
$ (1,482) |
-6% |
$ 21,025 |
$ 451 |
2% |
|
Income Taxes
Second quarter 2012 provision for income taxes was $3.2 million
compared to a benefit for income taxes of $1.0 million in the same
quarter of 2011. The second 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 second quarter last year reflected
the impact of the Company's deferred tax asset valuation allowance
maintained at that time, which was subsequently fully reversed in
the fourth quarter of 2011.
Credit Quality
The Company recorded a benefit for credit losses of $.5 million
in the second quarter of 2012, a significant improvement compared
to a provision for credit losses of $3.4 million in the second
quarter of 2011 and $.1 million in the previous quarter of 2012.
Second quarter 2012 net charge-offs of $.2 million, or .07% of
average loans on an annualized basis, declined from 1.22% in the
corresponding quarter in 2011 and .39% on a linked-quarter basis.
The net charge off and benefit for credit losses in the second
quarter of 2012 were heavily influenced by a recovery of $1.1
million related to a commercial real estate loan. As shown in the
table below, net charge-offs declined in every loan category from
the second quarter last year.
|
Table 10 |
|
|
|
|
|
|
ALLOWANCE FOR CREDIT
LOSSES AND NET CHARGEOFFS |
|
|
Charge-offs as |
|
Charge-offs as |
|
Charge-offs as |
|
|
a % of average |
|
a % of average |
|
a % of average |
(Dollars in thousands) |
Q2 |
loan balance |
Q2 |
loan balance |
Q1 |
loan balance |
|
2012 |
annualized |
2011 |
annualized |
2012 |
annualized |
Allowance for credit losses, beginning of
period |
$ 34,634 |
|
$ 40,429 |
|
$ 35,983 |
|
Total provision (benefit) for credit
losses |
(492) |
|
3,426 |
|
89 |
|
Loan net charge-offs: |
|
|
|
|
|
|
Commercial |
223 |
0.32% |
321 |
0.43% |
(5) |
-0.01% |
Commercial real estate construction |
-- |
0.00% |
648 |
13.66% |
-- |
0.00% |
Residential real estate construction |
(29) |
-1.03% |
213 |
4.96% |
1 |
0.03% |
Total real estate construction |
(29) |
-0.34% |
861 |
9.53% |
1 |
0.01% |
Mortgage |
92 |
0.59% |
222 |
1.21% |
534 |
3.28% |
Home equity |
336 |
0.54% |
2,291 |
3.45% |
542 |
0.86% |
Total real estate mortgage |
428 |
0.55% |
2,513 |
2.97% |
1,076 |
1.36% |
Commercial real estate |
(580) |
-0.28% |
561 |
0.27% |
41 |
0.02% |
Installment and consumer |
57 |
1.79% |
185 |
5.22% |
165 |
5.08% |
Overdraft |
143 |
0.00% |
183 |
0.00% |
160 |
0.00% |
Total loan net charge-offs |
242 |
0.07% |
4,624 |
1.22% |
1,438 |
0.39% |
|
|
|
|
|
|
|
Total allowance for credit losses |
$ 33,900 |
|
$ 39,231 |
|
$ 34,634 |
|
Components of allowance for credit
losses: |
|
|
|
|
|
|
Allowance for loan losses |
$ 33,132 |
|
$ 38,422 |
|
$ 33,854 |
|
Reserve for unfunded commitments |
768 |
|
809 |
|
780 |
|
Total allowance for credit losses |
$ 33,900 |
|
$ 39,231 |
|
$ 34,634 |
|
|
|
|
|
|
|
|
Net loan charge-offs to average loans
(annualized) |
0.07% |
|
1.22% |
|
0.39% |
|
Allowance for loan losses to total loans |
2.22% |
|
2.53% |
|
2.30% |
|
Allowance for credit losses to total
loans |
2.27% |
|
2.58% |
|
2.35% |
|
Allowance for loan losses to nonperforming
loans |
99% |
|
76% |
|
80% |
|
Allowance for credit losses to nonperforming
loans |
101% |
|
78% |
|
82% |
|
|
The allowance for credit losses was $33.9 million or 2.27% of
total loans at June 30, 2012, compared to an allowance for credit
losses of $39.2 million or 2.58% of total loans a year earlier and
$34.6 million or 2.35% of total loans at March 31, 2012. The
decline in the allowance for credit losses and the allowance
relative to total loans reflected the improving trend in the
overall risk profile of the loan portfolio. Other factors that
reduced reserve requirements and the allowance for credit losses
year-over-year included lower loan balances and adjustments made to
the reserve percentages. The allowance for credit losses relative
to nonperforming loans increased from 78% a year ago to 101% at
June 30, 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 June 30, 2012, were $59.3 million
or 2.46% of total assets, and represented a 31% reduction from
$86.0 million or 3.49% of total assets a year ago, and a decline of
15% from $69.7 million or 2.89% as of March 31, 2012.
Over the past twelve months, total nonaccrual loans declined
$17.1 million or 34% to $33.6 million at June 30, 2012, with
declines in all loan categories.
|
Table 11 |
|
|
|
|
|
NONPERFORMING
ASSETS |
(Dollars in thousands) |
June 30, |
Mar. 31, |
Dec. 31, |
Sept. 30, |
June 30, |
|
2012 |
2012 |
2011 |
2011 |
2011 |
Loans on nonaccrual status: |
|
|
|
|
|
Commercial |
$ 6,199 |
$ 6,482 |
$ 7,750 |
$ 9,987 |
$ 9,280 |
Real estate construction: |
|
|
|
|
|
Commercial real estate construction |
3,750 |
3,749 |
3,750 |
3,886 |
4,357 |
Residential real estate construction |
1,936 |
1,981 |
2,073 |
3,311 |
3,439 |
Total real estate construction |
5,686 |
5,730 |
5,823 |
7,197 |
7,796 |
Real estate mortgage: |
|
|
|
|
|
Mortgage |
7,044 |
10,744 |
9,624 |
10,877 |
11,527 |
Home equity |
2,239 |
2,528 |
2,325 |
3,285 |
2,755 |
Total real estate mortgage |
9,283 |
13,272 |
11,949 |
14,162 |
14,282 |
Commercial real estate |
12,384 |
16,648 |
15,070 |
21,513 |
19,263 |
Installment and consumer |
-- |
1 |
5 |
6 |
1 |
Total nonaccrual loans |
33,552 |
42,133 |
40,597 |
52,865 |
50,622 |
90 days past due not on nonaccrual |
-- |
-- |
-- |
-- |
-- |
Total nonperforming loans |
33,552 |
42,133 |
40,597 |
52,865 |
50,622 |
|
|
|
|
|
|
Other real estate owned |
25,726 |
27,525 |
30,823 |
30,234 |
35,374 |
Total nonperforming assets |
$ 59,278 |
$ 69,658 |
$ 71,420 |
$ 83,099 |
$ 85,996 |
|
|
|
|
|
|
Nonperforming loans to total loans |
2.24% |
2.86% |
2.70% |
3.52% |
3.33% |
Nonperforming assets to total assets |
2.46% |
2.89% |
2.94% |
3.30% |
3.49% |
|
|
|
|
|
|
Total delinquent loans 30-89 days past
due |
$ 3,422 |
$ 4,095 |
$ 4,273 |
$ 5,556 |
$ 9,961 |
Delinquent loans to total loans |
0.23% |
0.28% |
0.28% |
0.37% |
0.65% |
|
As indicated in Table 12 below, during the most recent quarter
the Company disposed of 30 OREO properties with a book value of
$3.9 million while acquiring 28 properties with a book value of
$3.3 million and recording OREO valuation adjustments totaling $1.2
million. The combination of these transactions resulted in a $1.8
million or 7% net reduction in total OREO during the second quarter
of 2012 to $25.7 million at June 30, 2012. The OREO balance
reflected write-downs of 55% from original loan principal. The
largest balance in the OREO portfolio at June 30, 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) |
Q2 2012 |
|
Q2 2011 |
|
Q1 2012 |
|
|
Amount |
# |
Amount |
# |
Amount |
# |
Beginning balance |
$ 27,525 |
246 |
$ 39,329 |
399 |
$ 30,823 |
264 |
Additions to OREO |
3,304 |
28 |
4,270 |
18 |
810 |
9 |
Dispositions of OREO |
(3,890) |
(30) |
(6,670) |
(51) |
(3,587) |
(27) |
OREO valuation adjustment |
(1,213) |
-- |
(1,555) |
-- |
(521) |
-- |
Ending balance |
$ 25,726 |
244 |
$ 35,374 |
366 |
$ 27,525 |
246 |
|
|
Table 13 |
|
|
|
|
|
|
OTHER REAL ESTATE OWNED
BY PROPERTY TYPE |
(Dollars in thousands) |
June 30, |
# of |
June 30, |
# of |
Mar. 31, |
# of |
|
2012 |
properties |
2011 |
properties |
2012 |
properties |
Income-producing properties |
$ 8,106 |
13 |
$ 9,237 |
14 |
$ 9,352 |
15 |
Homes |
5,539 |
20 |
10,108 |
43 |
5,228 |
16 |
Land |
4,780 |
15 |
4,052 |
11 |
4,710 |
14 |
Residential site developments |
3,104 |
126 |
5,912 |
215 |
3,367 |
136 |
Lots |
1,999 |
42 |
3,126 |
52 |
2,453 |
49 |
Multifamily |
1,570 |
20 |
673 |
11 |
408 |
4 |
Condominiums |
325 |
2 |
1,900 |
14 |
1,641 |
6 |
Commercial site developments |
303 |
6 |
366 |
6 |
366 |
6 |
Total |
$ 25,726 |
244 |
$ 35,374 |
366 |
$ 27,525 |
246 |
|
Other
The Company will hold a Webcast conference call Monday, July 23,
2012, at 1:00 p.m. Pacific Time, during which the Company will
discuss second 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 "2nd Quarter 2012 Earnings
Conference Call" tab. The conference call may also be accessed by
dialing (866) 394-3464, Conference ID#: 92767115 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 58 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=13726
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, and (iii) 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 and shares in thousands) |
Q2 |
Q2 |
Change |
Q1 |
Year to date |
|
2012 |
2011 |
$ |
% |
2012 |
2012 |
2011 |
Net interest income |
|
|
|
|
|
|
|
Interest and fees on loans |
$ 18,699 |
$ 20,231 |
$ (1,532) |
-8% |
$ 19,209 |
$ 37,908 |
$ 40,530 |
Interest on investment securities |
4,110 |
4,811 |
(701) |
-15% |
4,099 |
8,209 |
9,359 |
Other interest income |
32 |
62 |
(30) |
-48% |
25 |
57 |
133 |
Total interest income |
22,841 |
25,104 |
(2,263) |
-9% |
23,333 |
46,174 |
50,022 |
Interest expense on deposit accounts |
431 |
1,476 |
(1,045) |
-71% |
577 |
1,008 |
3,285 |
Interest on borrowings and subordinated
deb. |
637 |
1,667 |
(1,030) |
-62% |
623 |
1,260 |
3,264 |
Total interest expense |
1,068 |
3,143 |
(2,075) |
-66% |
1,200 |
2,268 |
6,549 |
Net interest income |
21,773 |
21,961 |
(188) |
-1% |
22,133 |
43,906 |
43,473 |
|
|
|
|
|
|
|
|
Provision (benefit) for credit
losses |
(492) |
3,426 |
(3,918) |
-114% |
89 |
(403) |
5,502 |
|
|
|
|
|
|
|
|
Noninterest income |
|
|
|
|
|
|
|
Service charges on deposit accounts |
3,212 |
3,575 |
(363) |
-10% |
2,818 |
6,030 |
7,219 |
Payment systems related revenue |
3,084 |
3,169 |
(85) |
-3% |
3,073 |
6,157 |
6,099 |
Trust and investment services
revenues |
1,457 |
1,208 |
249 |
21% |
935 |
2,392 |
2,356 |
Gains on sales of loans |
722 |
300 |
422 |
141% |
735 |
1,457 |
813 |
Net OREO valuation adjustments and gains
(losses) on sales |
(1,030) |
(910) |
(120) |
-13% |
(574) |
(1,604) |
(1,244) |
Other-than-temporary impairment
losses |
-- |
(179) |
179 |
-- |
(49) |
(49) |
(179) |
Gain on sales of securities |
228 |
130 |
98 |
75% |
147 |
375 |
397 |
Other |
821 |
777 |
44 |
6% |
802 |
1,623 |
1,525 |
Total noninterest income |
8,494 |
8,070 |
424 |
5% |
7,887 |
16,381 |
16,986 |
Noninterest expense |
|
|
|
|
|
|
|
Salaries and employee benefits |
12,081 |
12,119 |
(38) |
0% |
11,478 |
23,559 |
23,996 |
Equipment |
1,584 |
1,564 |
20 |
1% |
1,662 |
3,246 |
3,092 |
Occupancy |
2,119 |
2,232 |
(113) |
-5% |
2,075 |
4,194 |
4,397 |
Payment systems related expense |
1,075 |
1,350 |
(275) |
-20% |
1,119 |
2,194 |
2,597 |
Professional fees |
1,060 |
976 |
84 |
9% |
1,111 |
2,171 |
1,958 |
Postage, printing and office
supplies |
729 |
862 |
(133) |
-15% |
819 |
1,548 |
1,672 |
Marketing |
255 |
831 |
(576) |
-69% |
312 |
567 |
1,482 |
Communications |
419 |
389 |
30 |
8% |
380 |
799 |
767 |
Other noninterest expense |
2,154 |
2,635 |
(481) |
-18% |
2,069 |
4,223 |
5,550 |
Total noninterest expense |
21,476 |
22,958 |
(1,482) |
-6% |
21,025 |
42,501 |
45,511 |
Income before income taxes |
9,283 |
3,647 |
5,636 |
155% |
8,906 |
18,189 |
9,446 |
Provision (benefit) for income taxes |
3,249 |
(987) |
4,236 |
429% |
3,117 |
6,366 |
(293) |
Net income |
$ 6,034 |
$ 4,634 |
$ 1,400 |
30% |
$ 5,789 |
$ 11,823 |
$ 9,739 |
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
|
Basic |
$ 0.29 |
$ 0.23 |
$ 0.06 |
|
$ 0.28 |
$ 0.58 |
$ 0.48 |
Diluted |
$ 0.28 |
$ 0.22 |
$ 0.06 |
|
$ 0.27 |
$ 0.55 |
$ 0.45 |
|
|
|
|
|
|
|
|
Weighted average common shares |
19,082 |
19,006 |
76 |
|
19,038 |
19,060 |
18,983 |
Weighted average diluted shares |
20,256 |
20,025 |
231 |
|
20,054 |
20,161 |
19,982 |
|
|
|
|
|
|
|
|
Tax equivalent net interest income |
$ 22,046 |
$ 22,249 |
$ (203) |
|
$ 22,398 |
$ 44,444 |
$ 44,019 |
|
|
|
Table 15 |
|
|
|
|
|
BALANCE
SHEETS |
(Dollars in thousands) |
June 30, |
June 30, |
Change |
Mar. 31, |
|
2012 |
2011 |
$ |
% |
2012 |
Assets: |
|
|
|
|
|
Cash and due from banks |
$ 55,332 |
$ 54,296 |
$ 1,036 |
2% |
$ 59,146 |
Federal funds sold |
2,740 |
2,367 |
373 |
16% |
1,803 |
Interest-bearing deposits in other banks |
52,815 |
33,583 |
19,232 |
57% |
108,735 |
Total cash and cash equivalents |
110,887 |
90,246 |
20,641 |
23% |
169,684 |
Investment securities |
708,884 |
760,704 |
(51,820) |
-7% |
670,534 |
Loans |
1,495,797 |
1,521,147 |
(25,350) |
-2% |
1,470,848 |
Allowance for loan losses |
(33,132) |
(38,422) |
5,290 |
14% |
(33,854) |
Loans, net |
1,462,665 |
1,482,725 |
(20,060) |
-1% |
1,436,994 |
Total interest earning assets |
2,261,029 |
2,319,332 |
(58,303) |
-3% |
2,254,019 |
OREO, net |
25,726 |
35,374 |
(9,648) |
-27% |
27,525 |
Other assets |
100,277 |
93,507 |
6,770 |
7% |
104,550 |
Total assets |
$ 2,408,439 |
$ 2,462,556 |
$ (54,117) |
-2% |
$ 2,409,287 |
|
|
|
|
|
|
Liabilities and Stockholders' Equity: |
|
|
|
|
|
Demand |
$ 648,819 |
$ 599,020 |
$ 49,799 |
8% |
$ 620,015 |
Savings and interest-bearing demand |
497,135 |
465,779 |
31,356 |
7% |
503,829 |
Money market |
585,421 |
658,185 |
(72,764) |
-11% |
614,831 |
Time deposits |
145,510 |
208,013 |
(62,503) |
-30% |
155,830 |
Total deposits |
1,876,885 |
1,930,997 |
(54,112) |
-3% |
1,894,505 |
Borrowings and subordinated debentures |
178,900 |
219,599 |
(40,699) |
-19% |
171,000 |
Reserve for unfunded commitments |
768 |
809 |
(41) |
-5% |
780 |
Other liabilities |
23,869 |
25,582 |
(1,713) |
-7% |
22,020 |
Total liabilities |
2,080,422 |
2,176,987 |
(96,565) |
-4% |
2,088,305 |
Stockholders' equity |
328,017 |
285,569 |
42,448 |
15% |
320,982 |
Total liabilities and stockholders'
equity |
$ 2,408,439 |
$ 2,462,556 |
$ (54,117) |
-2% |
$ 2,409,287 |
|
|
|
Table 16 |
|
|
|
|
|
|
|
|
PERIOD END
LOANS |
(Dollars in thousands) |
June 30, |
% of |
June 30, |
% of |
Change |
Mar. 31, |
% of |
|
2012 |
Total |
2011 |
total |
Amount |
% |
2012 |
Total |
Commercial loans |
$ 292,643 |
19% |
$ 297,817 |
20% |
$ (5,174) |
-2% |
$ 278,195 |
19% |
Commercial real estate construction |
33,477 |
2% |
17,024 |
1% |
16,453 |
97% |
19,839 |
1% |
Residential real estate construction |
10,549 |
1% |
15,410 |
1% |
(4,861) |
-32% |
12,082 |
1% |
Total real estate construction loans |
44,026 |
3% |
32,434 |
2% |
11,592 |
36% |
31,921 |
2% |
Mortgage |
59,970 |
4% |
72,708 |
5% |
(12,738) |
-18% |
65,063 |
5% |
Home equity |
248,921 |
17% |
264,016 |
17% |
(15,095) |
-6% |
252,990 |
17% |
Total real estate mortgage |
308,891 |
21% |
336,724 |
22% |
(27,833) |
-8% |
318,053 |
22% |
Commercial real estate loans |
837,415 |
56% |
839,665 |
55% |
(2,250) |
0% |
830,053 |
56% |
Installment and other consumer loans |
12,822 |
1% |
14,507 |
1% |
(1,685) |
-12% |
12,626 |
1% |
Total loans |
$ 1,495,797 |
|
$ 1,521,147 |
|
$ (25,350) |
-2% |
$ 1,470,848 |
|
|
|
|
Table 17 |
|
|
|
|
|
AVERAGE BALANCE
SHEETS |
(Dollars in thousands) |
Q2 |
Q2 |
Q1 |
Year to date |
|
2012 |
2011 |
2012 |
2012 |
2011 |
Cash and due from banks |
$ 51,903 |
$ 52,273 |
$ 50,017 |
$ 50,960 |
$ 50,495 |
Federal funds sold |
2,555 |
4,790 |
2,601 |
2,578 |
4,371 |
Interest-bearing deposits in other banks |
45,260 |
93,225 |
35,334 |
40,297 |
99,972 |
Total cash and cash equivalents |
99,718 |
150,288 |
87,952 |
93,835 |
154,838 |
Investment securities |
726,853 |
698,116 |
710,000 |
718,426 |
685,850 |
Total loans |
1,479,226 |
1,523,170 |
1,482,522 |
1,480,874 |
1,526,213 |
Allowance for loan losses |
(33,699) |
(38,944) |
(35,249) |
(34,474) |
(39,616) |
Loans, net |
1,445,527 |
1,484,226 |
1,447,273 |
1,446,400 |
1,486,597 |
Total interest earning assets |
2,254,192 |
2,319,980 |
2,232,288 |
2,243,240 |
2,317,311 |
Other assets |
123,179 |
127,895 |
132,951 |
127,984 |
128,438 |
Total assets |
$ 2,395,277 |
$ 2,460,525 |
$ 2,378,176 |
$ 2,386,645 |
$ 2,455,723 |
|
|
|
|
|
|
Demand |
$ 621,547 |
$ 578,562 |
$ 585,749 |
$ 603,647 |
$ 565,468 |
Savings and interest-bearing demand |
502,509 |
476,090 |
490,361 |
496,436 |
463,316 |
Money market |
596,949 |
654,668 |
623,111 |
610,030 |
657,653 |
Time deposits |
151,085 |
224,674 |
167,417 |
159,251 |
246,733 |
Total deposits |
1,872,090 |
1,933,994 |
1,866,638 |
1,869,364 |
1,933,170 |
Borrowings and subordinated debentures |
178,241 |
219,599 |
171,505 |
174,873 |
219,599 |
Total interest bearing liabilities |
1,428,784 |
1,575,031 |
1,452,394 |
1,440,590 |
1,587,301 |
Other liabilities |
21,550 |
24,331 |
22,782 |
22,085 |
24,656 |
Stockholders' equity |
323,396 |
282,601 |
317,251 |
320,323 |
278,298 |
Total liabilities and stockholders'
equity |
$ 2,395,277 |
$ 2,460,525 |
$ 2,378,176 |
$ 2,386,645 |
$ 2,455,723 |
|
CONTACT: Robert D. Sznewajs
President & CEO
(503) 598-3243
Anders Giltvedt
Executive Vice President & CFO
(503) 598-3250
West Coast Bancorp (MM) (NASDAQ:WCBO)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
West Coast Bancorp (MM) (NASDAQ:WCBO)
Historical Stock Chart
Von Jul 2023 bis Jul 2024