* Aggregate proceeds of $155.0 million, of which $134.2 million has
been contributed to West Coast Bank. * The capital raise increases
West Coast Bank's pro forma total risk-based capital ratio to
17.01% from the reported 10.75% at September 30, 2009. * West Coast
Bank announces regulatory agreement with its primary banking
regulators. * West Coast Bancorp announces an operating loss of
approximately $12.4 million for the third quarter 2009. * West
Coast Bancorp also announces adoption of tax benefit preservation
plan. LAKE OSWEGO, Ore., Oct. 26 /PRNewswire-FirstCall/ -- West
Coast Bancorp (NASDAQ:WCBO) ("WCB" or the "Company") today
announced that it has received capital investments with gross
aggregate proceeds in the amount of $155.0 million, $134.2 million
of which has been contributed to its wholly owned banking
subsidiary, West Coast Bank. "The capital raise enhances West Coast
Bank's capital position and increases its pro forma total
risk-based capital ratio to 17.01%, considerably above the level
required by bank regulators," said CEO and President Robert D.
Sznewajs. "This capital raise will also strengthen our liquidity
position and is an important reflection of the confidence that our
new investors have in West Coast Bank, its management and business
plan. Enhancing West Coast Bank's capital and liquidity positions
has been a key priority over the past year as we continue to work
through the challenges presented by the prolonged economic downturn
in our market areas. Additionally, the capital raise will allow
West Coast Bank to address future impacts of the weak economy and
will support the borrowing needs of our communities during these
tough economic times." The new, unaffiliated investors have been
issued shares of Series A Mandatorily Convertible Participating
Preferred Stock ("Series A Preferred Stock") and Series B
Convertible Participating Preferred Stock ("Series B Preferred
Stock"). The unaffiliated investors include, among others, MFP
Partners, L.P., a family investment partnership managed by Michael
F. Price; Castle Creek Capital; and GF Financial, LLC. The Series A
Preferred Stock will mandatorily convert into common stock upon
receipt of necessary shareholder approval. The Series B Mandatorily
Convertible Preferred Stock will convert into common stock only
following receipt of necessary shareholder approval and after being
sold to unaffiliated third parties in a widely dispersed offering
by its initial owner. The Company has agreed with the investors to
promptly seek shareholder approval for the transactions, which is
required, both to increase the authorized shares of common stock
available for issuance, and under applicable NASDAQ listing rules.
The Company intends to file a proxy statement with respect to these
shareholder approvals as soon as practicable. As part of the
transactions two of the investors are entitled to representation on
the Board of Directors of West Coast Bancorp and West Coast Bank
and two other investors are entitled to have board observers. In
the event the investors exercise their rights and subject to
receipt of necessary regulatory approvals, the Board expects to
appoint the board representatives in the near future and will
announce these appointments when made. In addition, the terms of
the investments permit the Board of Directors of West Coast
Bancorp, in its sole discretion, to conduct a rights offering of up
to $10 million in the near future in which the new investors would
not participate. The following table illustrates the pro forma
impact of the capital investment on the risk-based capital ratios
of West Coast Bancorp and West Coast Bank at September 30, 2009.
September 30, 2009 Pro forma Prior to Post Conversion of conversion
of preferred preferred stock to stock to common common Actual stock
(1,2) stock (2) West Coast Bank Tier 1 capital ratio 9.49% 15.75%
15.75% Total capital ratio 10.75% 17.01% 17.01% Leverage ratio
7.64% 12.08% 12.08% West Coast Bancorp Tier 1 capital ratio 9.79%
9.79% 16.28% Total capital ratio 11.05% 11.05% 17.54% Leverage
ratio 7.88% 7.88% 12.45% (1) Assumes $134.2 million capital
contribution to the Bank and Series A and Series B preferred stock
is not counted as capital at West Coast Bancorp prior to conversion
of preferred stock to common stock. (2) Direct costs of private
placement are based on best estimates. Terms of the West Coast
Bancorp Private Placements include: -- West Coast Bancorp issued
1.43 million shares of Series A Preferred Stock, mandatorily
convertible into an aggregate of 71.4 million shares of WCB common
stock at a 50x conversion rate and effective conversion price per
share of common stock of $2.00 upon obtaining the necessary
shareholder approval. In addition, West Coast Bancorp issued 0.12
million shares of Series B Preferred Stock, convertible into an
aggregate of 6.1 million shares of common stock at a 50x conversion
rate and an effective conversion price per share of common stock of
$2.00 upon obtaining the necessary shareholder approval and only
after being sold in a widely dispersed offering to unaffiliated
third-parties. -- The holders of the Preferred Stock will initially
receive the dividends and other distributions, if any, as declared
and paid by West Coast Bancorp to all holders of common stock; if
shareholder approval is not obtained before March 1, 2010, the
holders of the Preferred Stock will be entitled to receive
cumulative cash dividends at an annual rate of 15%. After
shareholder approval, holders of the Series B Preferred Stock will
only be entitled to receive dividends and other distributions as
declared and paid by West Coast Bancorp to all holders of common
stock. -- As part of the transactions, certain investors received
seven-year Class C Warrants exercisable for shares of Series B
Preferred Stock mandatorily convertible into an aggregate of 12
million shares of WCB common stock, at an effective conversion
price per share of common stock of $2.00 with conversion occurring
after receipt of shareholder approval but only if sold to
unaffiliated third parties in a widely dispersed offering. -- Also,
as part of the transactions, all investors received seven-year
warrants that will only become exercisable if shareholder approval
is not obtained before March 1, 2010 with an exercise price of
$0.50 per share of underlying common stock. For investors who
acquired Series A Preferred Stock that represents 9.9% of WCB's
common stock on an as-converted basis ("9.9% Investors") and bank
holding company investors, these warrants ("Class D Warrants") will
be exercisable for shares of Series B Preferred Stock that would be
convertible into an aggregate of 6.1 million shares of WCB common.
For other investors, the warrants ("Class B Warrants") will be
exercisable for shares of Series A Preferred Stock or Series B
Preferred Stock that would be convertible into 5.9 million shares
of WCB common stock. -- No investor will own, control or hold with
the power to vote more than 9.9% of WCB's voting securities, on an
as-converted/as-exercised basis for bank regulatory purposes.
Additional details on the terms of the private placements will be
described further in a forthcoming filing on Form 8-K with the
Securities and Exchange Commission, which may be accessed through
http://www.sec.gov/. Neither the Federal Reserve System nor any
other banking regulator has approved these securities or determined
that they constitute Tier 1 capital or regulatory capital for West
Coast Bancorp at the parent company level. West Coast Bank
Announces Formal Regulatory Agreement: West Coast Bank today also
announced that it had entered into an agreement with the Federal
Deposit Insurance Corporation ("FDIC") and the Oregon Division of
Finance and Corporate Securities, its primary banking regulators.
The agreement, termed a cease-and-desist order (the "Order"),
requires that West Coast Bank, among other things, increase
capital, maintain liquidity measurements, reduce problem assets,
and strengthen certain operating procedures and policies. Among
other requirements, West Coast Bank is required to maintain a Tier
1 capital to total assets leverage ratio at least equal to or
greater than 10%, a ratio of qualifying total capital to
risk-weighted assets at least equal to or greater than 12%. With
the completed capital raise, West Coast Bank's pro forma capital
ratios significantly exceed the requirements of the Order with
respect to Tier 1 and total risk-based capital on September 30,
2009. Other actions already completed include meeting the liquidity
ratios indicated in the Order, addressing certain operational
matters referenced in the Order and ensuring future compliance.
"The Board of Directors and Management have already adopted and
implemented an aggressive plan to address the items identified in
the regulatory agreement. With the capital investment, West Coast
Bank has positioned itself for a solid, long-term future that is
consistent with the strategic business plan and our commitment to
the communities we serve," said Lloyd Ankeny, Chairman of the
Board. Sznewajs added, "The Bank will continue to focus on its
well-defined client value proposition and is confident in our
existing strategic plan. As a community partner, we will continue
to work together to serve our local economy. We will continue our
84-year heritage of exceptional customer service. Our new investors
are committed to our existing strategic plan and the management
team." The additional capital greatly enhances the safety and
soundness of West Coast Bank, and, in addition, all West Coast Bank
deposit accounts continue to be fully-insured to the highest limits
permitted by the FDIC. West Coast Bank participates in the FDIC's
Transaction Account Guarantee Program which provides unlimited
coverage of low-interest bearing NOW accounts and non-interest
bearing checking accounts. It also provides the expanded $250,000
FDIC coverage for interest-bearing deposit accounts. West Coast
Bancorp Announces Financial Results for the Third Quarter 2009: In
addition, West Coast Bancorp today announced financial third
quarter 2009 financial results, including the following: -- A third
quarter 2009 net loss of $12.4 million, after tax. -- A provision
for credit losses of $20.3 million and net charge-offs of $18.8
million. As a result, the ratio of allowance for credit losses to
total loans was 2.20% at September 30, 2009, as compared to 2.01%
at June 30, 2009. The Company expects the provision and net
charge-offs to remain elevated for the remainder of the year. --
Total nonperforming assets of $208.6 million at September 30, 2009,
essentially unchanged from $210.6 million at June 30, 2009. --
September 30, 2009 total loan and deposit balances of $1.8 billion
and $2.2 billion, respectively. -- The net interest margin declined
to 3.14% in the most recent quarter, primarily due to the liquidity
position invested in short-term, low yielding investments. -- At
September 30, 2009, the Company had approximately $19 million in
net deferred tax assets. The Company may be required to establish a
valuation allowance against its net deferred tax assets in future
reporting periods. Such valuation allowance would result in a
charge to tax expense and consequently reduce the Company's
regulatory capital ratios. -- For additional financial information,
please see the financial tables later in this release. Tax Benefit
Preservation Plan Effective after the completion of the private
placements, West Coast Bancorp adopted a tax benefit preservation
plan designed to preserve its substantial tax assets. The plan is
similar to tax benefit preservation plans adopted by many other
public companies with significant tax attributes. The Company's
ability to use the tax attributes would be substantially limited if
there were an "ownership change" as defined under Section 382 of
the Internal Revenue Code and related Treasury Regulations. In
general, an ownership change would occur if "5-percent
shareholders" as defined under Section 382, collectively increase
their ownership in West Coast Bancorp by more than fifty percentage
points over a rolling three-year period. The tax benefit
preservation plan is designed to reduce the likelihood that the
Company experiences such an ownership change by discouraging any
person or group from becoming a 5-percent shareholder and
dissuading existing 5-percent shareholders from acquiring
additional stock without prior approval of West Coast Bancorp's
Board of Directors; such persons would experience significant
dilution in their ownership interests. As part of implementing the
plan, the Company declared a dividend to be distributed to
shareholders of records as of November 2, 2009, of one preferred
share purchase right for each outstanding share of common stock and
fifty such rights for each outstanding share of Preferred Stock.
These rights would only be activated (causing the dilution referred
to above) if triggered under the plan. Additional details on the
terms of the tax benefit preservation plan will be described
further in the forthcoming filing on Form 8-K described above.
Capital Raise Advisors Sandler O'Neill & Partners, L.P. served
as financial advisor and Wachtell, Lipton, Rosen & Katz acted
as legal advisor to the Company in connection with the
transactions. Sullivan & Cromwell LLP acted as legal advisor to
GF Financial, LLC. Other The Company will hold a Webcast conference
call, October 26, 2009, at 11:00 a.m. Pacific Time, during which
the Company will discuss the private placements, the regulatory
agreement and third quarter 2009 results. To access the conference
call via a live Webcast, go to http://www.wcb.com/ and click on
Investor Relations and the "3rd Quarter 2009 Earnings Conference
Call" tab. The conference call may also be accessed by dialing
(866) 395-2683, ID#:27709026 a few minutes prior to 11:00 a.m. PDT.
The conference call will not be archived or available for replay.
About the Company West Coast Bancorp (NASDAQ:WCBO) is a Northwest
bank holding company for West Coast Bank. With $2.7 billion in
assets, West Coast Bank operates through 65 locations in Oregon and
Washington. West Coast Bank 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, 2008, and Quarterly Report on Form
10-Q for the quarter ended June 30, 2009, including under the
headings "Forward Looking Statement Disclosure" and "Risk Factors."
Additional Information In connection with certain matters related
to the private placements, West Coast Bancorp intends to file with
the Securities and Exchange Commission (the "SEC") a proxy
statement. The Company will mail the definitive proxy statement,
when available, to its shareholders. Investors and security holders
are urged to read the proxy statement with regard to certain
matters related to the private placements when it becomes available
because it will contain important information. You may obtain a
free copy of the proxy statement (when available) and other related
documents filed by West Coast Bancorp with the SEC at the SEC's
website at http://www.sec.gov/ or from West Coast Bancorp's website
at http://www.wcb.com/. The Series A Preferred Stock, the Series B
Preferred Stock and the warrants issued in the private placements,
and the common stock issuable pursuant to those securities, have
not been registered under the Securities Act of 1933, as amended
(the "Securities Act"), or any state securities laws, and unless so
registered may not be offered or sold in the United States or to
U.S. persons except pursuant to an exemption from the registration
requirements of the Securities Act and applicable state securities
laws. This press release does not constitute an offer to sell or
the solicitation of an offer to buy, nor shall there be any sale of
securities of the Company in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any jurisdiction. West
Coast Bancorp and its directors, executive officers and certain
other members of management and employees may be soliciting proxies
from stockholders in favor of certain matters relating to the
private placements. You can find information about West Coast
Bancorp's executive officers and directors in the Company's
definitive proxy statement filed with the SEC on March 18, 2009.
You can obtain a free copy of this document from the Company's
website at http://www.wcb.com/. Investors may obtain additional
information regarding the interest of such participants by reading
the proxy statement regarding the matters related to the private
placements when it becomes available. Financial Tables The
following tables are the consolidated income statements and balance
sheets for the periods shown. West Coast Bancorp Consolidated
Statements of Income (Loss) (Unaudited) (Dollars and shares in
thousands, except per Three months ended Nine months ended share
data) September 30, June 30, September 30, 2009 2008 2009 2009 2008
Net interest income Interest and fees on loans $24,535 $32,013
$26,247 $76,899 $99,912 Interest on investment securities 3,063
2,686 2,572 8,113 8,563 Other interest income 127 73 50 190 354
Total interest income 27,725 34,772 28,869 85,202 108,829 Interest
expense on deposit accounts 6,216 8,310 6,359 19,060 28,987
Interest on borrowings and subordinated debentures 2,364 2,739
2,296 6,653 8,829 Total interest expense 8,580 11,049 8,655 25,713
37,816 Net interest income 19,145 23,723 20,214 59,489 71,013
Provision for credit losses 20,300 9,125 11,393 54,824 23,850
Noninterest income Service charges on deposit accounts 4,038 4,176
4,133 11,976 11,694 Payment systems related revenue 2,501 2,337
2,359 6,997 6,808 Trust and investment services revenues 1,140
1,241 971 3,030 4,360 Gains on sales of loans 466 455 756 1,565
2,084 OREO valuation adjustments and loss on sale (3,998) (1,422)
(3,683) (12,485) (1,685) Other 824 621 787 3,553 2,619
Other-than-temporary impairment losses - (6,338) - (192) (6,338)
Gain on sales of securities - - 635 833 777 Total noninterest
income 4,971 1,070 5,958 15,277 20,319 Noninterest expense Salaries
and employee benefits 10,753 11,017 11,267 33,215 36,017 Equipment
1,758 1,793 1,850 5,500 5,309 Occupancy 2,247 2,354 2,295 6,908
7,026 Payment systems related expense 1,043 952 998 2,960 2,687
Professional fees 1,091 1,334 1,371 3,389 3,082 Postage, printing
and office supplies 799 991 826 2,420 2,957 Marketing 832 1,009 696
2,158 2,810 Communications 402 437 404 1,199 1,266 Goodwill
impairment - - - 13,059 - Other noninterest expense 4,564 2,334
5,537 13,299 6,634 Total noninterest expense 23,489 22,221 25,244
84,107 67,788 Income (loss) before income taxes (19,673) (6,553)
(10,465) (64,165) (306) Provision (benefit) for income taxes
(7,265) (4,237) (4,126) (21,819) (2,674) Net income (loss)
$(12,408) $(2,316) $(6,339) $(42,346) $2,368 Earnings (loss) per
share: Basic $(0.79) $(0.15) $(0.41) $(2.71) $0.15 Diluted $(0.79)
$(0.15) $(0.41) $(2.71) $0.15 Weighted average common shares 15,520
15,487 15,522 15,510 15,467 Weighted average diluted shares 15,520
15,487 15,522 15,510 15,571 Tax equivalent net interest income
$19,505 $24,154 $20,580 $60,630 $72,343 West Coast Bancorp
Consolidated Balance Sheets (Dollars and shares in September 30,
September 30, June 30, thousands, unaudited) 2009 2008 2009 Assets:
Cash and cash equivalents $251,642 $101,614 $148,282 Investments
411,984 205,987 369,914 Total loans 1,822,001 2,109,517 1,917,028
Allowance for loan losses (39,075) (33,498) (37,700) Loans, net
1,782,926 2,076,019 1,879,328 OREO, net 76,570 48,121 83,830
Goodwill and other intangibles 716 14,153 796 Other assets 129,519
127,152 131,333 Total assets $2,653,357 $2,573,046 $2,613,483
Liabilities and Stockholders' Equity: Demand $522,629 $486,540
$483,397 Savings and interest-bearing demand 401,256 337,472
396,100 Money market 651,198 672,690 606,349 Time deposits 580,743
564,717 623,521 Total deposits 2,155,826 2,061,419 2,109,367
Borrowings and Subordinated debentures 314,299 282,059 314,299
Reserve for unfunded commitments 961 946 869 Other liabilities
20,588 24,400 20,282 Total liabilities 2,491,674 2,368,824
2,444,817 Stockholders' equity 161,683 204,222 168,666 Total
liabilities and stockholders' equity $2,653,357 $2,573,046
$2,613,483 Common shares outstanding period end 15,647 15,702
15,660 Book value per common share $10.33 $13.01 $10.77 Tangible
book value per common share $10.29 $12.10 $10.72 The following
table shows summary financial information for the periods shown.
West Coast Bancorp Summary Financial Information (Dollars in
thousands except for per share data, unaudited) Year Year (all
rates have Third Third Second to date to date been annualized
Quarter Quarter Quarter Sept. 30, Sept. 30, where appropriate) 2009
2008 2009 2009 2008 PERFORMANCE RATIOS - Return on average assets
-1.85% -0.36% -0.99% -2.20% 0.12% - Return on average common equity
-29.39% -4.47% -14.61% -31.55% 1.52% - Return on average tangible
equity -29.40% -4.66% -14.53% -32.33% 1.78% - Non-interest income
to average assets 0.74% 0.17% 0.93% 0.79% 1.05% - Non-interest
expense to average assets 3.50% 3.45% 3.94% 4.37% 3.50% -
Efficiency ratio, tax equivalent 96.0% 70.4% 97.5% 112.0% 69.0% NET
INTEREST MARGIN - Yield on average interest-earning assets 4.53%
5.85% 4.97% 4.88% 6.03% - Rate on average interest-bearing
liabilities 1.73% 2.36% 1.83% 1.82% 2.67% - Net interest spread
2.80% 3.49% 3.14% 3.06% 3.36% - Net interest margin 3.14% 4.02%
3.50% 3.43% 3.96% AVERAGE ASSETS - Investment securities $387,830
$228,382 $309,810 $296,140 $238,732 - Commercial loans 423,258
502,781 452,517 448,964 513,005 - Real estate construction loans
170,583 371,687 229,127 221,981 434,950 - Real estate mortgage
loans 386,462 383,214 391,993 390,278 364,245 - Commercial real
estate loans 865,107 851,849 877,405 874,978 828,841 - Installment
and other consumer loans 19,641 23,220 20,425 20,361 23,941 - Total
loans 1,865,051 2,132,751 1,971,467 1,956,562 2,164,982 - Total
interest earning assets 2,460,793 2,393,207 2,360,328 2,363,608
2,440,704 - Other assets 201,122 170,466 206,377 208,163 149,321 -
Total assets $2,661,915 $2,563,673 $2,566,705 $2,571,771 $2,590,025
AVERAGE LIABILITIES & EQUITY - Demand deposits $508,758
$482,780 $478,289 $485,715 $471,552 - Savings and Interest bearing
demand 404,930 348,008 385,636 379,734 354,862 - Money market
635,511 672,051 599,417 609,830 665,863 - Time deposits 610,907
543,451 614,472 598,626 560,170 - Total deposits 2,160,106
2,046,290 2,077,814 2,073,905 2,052,447 - Borrowings and
subordinated debentures 314,299 300,258 297,951 300,643 308,960 -
Total interest bearing liabilities 1,965,647 1,863,768 1,897,476
1,888,833 1,889,854 - Other liabilities 528,793 493,545 495,172
503,488 491,699 - Total liabilities 2,494,440 2,357,313 2,392,648
2,392,321 2,381,553 - Common equity 167,475 206,360 174,057 179,450
208,472 - Total average liabilities and common equity $2,661,915
$2,563,673 $2,566,705 $2,571,771 $2,590,025 AVERAGE ASSET/
LIABILITY RATIOS - Stockholders' equity to total assets 6.29% 8.05%
6.78% 6.98% 8.05% - Interest earning assets to interest bearing
liabilities 125.2% 128.4% 124.4% 125.1% 129.1% - Total loans to
total assets 70.1% 83.2% 76.8% 76.1% 83.6% - Interest bearing
deposits to total assets 62.0% 61.0% 62.3% 61.8% 61.0% The
following table reconciles GAAP financial measures to non-GAAP
financial measures. Table 1 West Coast Bancorp Reconciliation of
Operating earnings (loss) to GAAP net income For the three months
For the nine months (Dollars in thousands, ended Sept. 30, ended
Sept. 30, unaudited) 2009 2008 2009 2008 GAAP net income (loss)
$(12,408) $(2,316) $(42,346) $2,368 Add: impairment charge on
securities, net of tax - 4,120 - 4,120 Add: FDIC special assessment
charge, net of tax - - 777 - Add: Goodwill impairment charge, net
of tax - - 13,059 - Operating net income (loss) $(12,408) $1,804
$(28,510) $6,488 Diluted earnings (loss) per diluted share GAAP net
income (loss) $(0.79) $(0.15) $(2.71) $0.15 Operating net income
(loss) $(0.79) $0.12 $(1.81) $0.42 The following table presents
information with respect to the Company's loan portfolio. Table 2
West Coast Bancorp Period End Loan Portfolio By Category (Dollars
in thousands, Sept. 30, % of Sept. 30, % of Change June 30, % of
unaudited) 2009 loans 2008 loans Amount % 2009 loans Commercial
loans $406,807 22% $498,715 24% $ (91,908) -18% $428,852 22%
Commercial real estate constr- uction 43,944 2% 89,599 4% (45,655)
-51% 71,945 4% Residential real estate constr- uction 105,921 6%
241,234 11% (135,313) -56% 129,588 7% Total real estate constr-
uction loans 149,865 8% 330,833 16% (180,968) -55% 201,533 11%
Mortgage 78,144 4% 90,510 4% (12,366) -14% 83,941 4% Non- standard
mortgage 21,952 1% 32,658 2% (10,706) -33% 23,916 1% Home equity
282,552 16% 266,385 13% 16,167 6% 280,366 15% Total real estate
mortgage 382,648 21% 389,553 18% (6,905) -2% 388,223 20% Commercial
real estate loans 863,658 48% 867,902 41% (4,244) 0% 878,379 46%
Installment and other consumer loans 19,023 1% 22,514 1% (3,491)
-16% 20,041 1% Total loans $1,822,001 $2,109,517 $(287,516) -14%
$1,917,028 Two-step residential constr- uction loans $5,128 0% $
97,894 5% $ (92,766) -95% $10,348 1% Total loans other than
two-step loans 1,816,873 100% 2,011,623 95% (194,750) -10%
1,906,680 99% Total Loans $1,822,001 100% $2,109,517 100%
$(287,516) -14% $1,917,028 100% The following tables present
information with respect to the change in the Company's total
allowance for credit losses. Table 3 West Coast Bancorp Total Loan
Portfolio Allowance For Credit Losses and Net Charge-offs Quarter
Quarter Quarter ended ended ended Sept. 30, Sept. 30, June 30,
(Dollars in thousands, unaudited) 2009 2008 2009 Allowance for
credit losses, beginning of period $38,569 $37,045 $38,463
Provision for credit losses loans other than two-step loans 19,575
7,128 9,004 Provision for credit losses two-step loans 725 1,997
2,389 Total provision for credit losses 20,300 9,125 11,393 Loan
charge-offs: Commercial 5,869 516 1,725 Commercial real estate
construction 324 - - Residential real estate construction 7,797
4,201 4,891 Two-step residential construction 766 6,490 2,392 Total
real estate construction 8,887 10,691 7,283 Mortgage 3,018 481
1,244 Nonstandard mortgage 726 320 Home equity 204 99 529 Total
real estate mortgage 3,948 580 2,093 Commercial real estate 68 44
172 Installment and consumer 146 382 267 Overdraft 287 323 230
Total loan charge-offs 19,205 12,536 11,770 Loan recoveries:
Commercial 125 49 392 Commercial real estate construction - - -
Residential real estate construction (14) 675 14 Two-step
residential construction 41 41 3 Total real estate construction 27
716 17 Mortgage - (13) - Nonstandard mortgage 1 - - Home equity 1
(9) - Total real estate mortgage 2 (22) - Commercial real estate
147 - - Installment and consumer 18 18 16 Overdraft 53 49 58 Total
loan recoveries 372 810 483 Net charge-offs 18,833 11,726 11,287
Total allowance for credit losses $40,036 $34,444 $38,569
Components of allowance for credit losses: Allowance for loan
losses $39,075 $33,498 $37,700 Reserve for unfunded commitments 961
946 869 Total allowance for credit losses $40,036 $34,444 $38,569
Net loan charge-offs to average loans (annualized) 4.01% 2.19%
2.30% Allowance for loan losses to total loans 2.14% 1.59% 1.97%
Allowance for credit losses to total loans 2.20% 1.63% 2.01%
Allowance for loan losses to nonperforming loans 30% 25% 30%
Allowance for credit losses to nonperforming loans 30% 25% 30%
Table 4 West Coast Bancorp Total Loan Portfolio Allowance For
Credit Losses and Net Charge-offs Year to date Year to date
(Dollars in thousands, September 30, September 30, unaudited) 2009
2008 Allowance for credit losses, beginning of period $29,934
$54,903 Provision for credit losses loans other than two-step loans
$48,607 $19,126 Provision for credit losses two-step loans 6,217
4,724 Total provision for credit losses 54,824 23,850 Loan
charge-offs: Commercial 8,869 3,256 Commercial real estate
construction 324 - Residential real estate construction 17,789
4,806 Two-step residential construction 6,833 36,307 Total real
estate construction 24,946 41,113 Mortgage 5,280 713 Nonstandard
mortgage 2,975 - Home equity 2,014 127 Total real estate mortgage
10,269 840 Commercial real estate 646 44 Installment and consumer
545 502 Overdraft 766 927 Total loan charge-offs 46,041 46,682 Loan
recoveries: Commercial 734 81 Commercial real estate construction -
- Residential real estate construction - - Two-step residential
construction 195 2,020 Total real estate construction 195 2,020
Mortgage 3 - Nonstandard mortgage 1 - Home equity 1 30 - -- Total
real estate mortgage 5 30 Commercial real estate 147 - Installment
and consumer 56 63 Overdraft 182 179 Total loan recoveries 1,319
2,373 Net charge-offs 44,722 44,309 Total allowance for credit
losses $40,036 $34,444 Components of allowance for credit losses:
Allowance for loan losses $39,075 $33,498 Reserve for unfunded
commitments 961 946 Total allowance for credit losses $40,036
$34,444 Net loan charge-offs to average loans 3.06% 2.73% The
following tables present information about the Company's total
nonperforming assets and delinquent loans. Table 5 West Coast
Bancorp Total Loan Portfolio Nonperforming Assets and Delinquencies
(Dollars in thousands, September 30, September 30, June 30,
unaudited) 2009 2008 2009 Loans on nonaccrual status: Commercial
$49,871 $6,651 $34,396 Real estate construction: Commercial real
estate construction 2,449 - 2,922 Residential real estate
construction 42,277 104,014 56,507 Total real estate construction
44,726 104,014 59,429 Real estate mortgage: Mortgage 12,498 6,384
14,179 Nonstandard mortgage 10,810 11,834 10,486 Home equity 1,599
644 1,259 Total real estate mortgage 24,907 18,862 25,924
Commercial real estate 12,463 5,636 6,905 Installment and consumer
39 14 69 Total nonaccrual loans 132,006 135,177 126,723 90 days
past due not on nonaccrual - - - Total non-performing loans 132,006
135,177 126,723 Other real estate owned 76,570 48,121 83,830 Total
non-performing assets $208,576 $183,298 $210,553 Non-performing
loans to total loans 7.25% 6.41% 6.61% Non-performing assets to
total assets 7.86% 7.12% 8.06% Total Loan Portfolio Delinquent
loans 30-89 days past due as a % of loan category (Dollars in
thousands, September 30, September 30, June 30, unaudited) 2009
2008 2009 Commercial loans 0.16% 0.06% 0.42% Real estate
construction loans 5.68% 3.69% 2.93% Real estate mortgage loans
0.71% 0.53% 1.84% Commercial real estate loans 0.14% 0.04% 0.13%
Installment and other consumer loans 0.09% 0.49% 0.50% Delinquent
loans 30-89 days past due: Two-step residential construction loans
$- $4,089 $- Total loans Other than two-step loans 13,136 10,919
16,082 Total delinquent loans 30-89 days past due, not in
nonaccrual status $13,136 $15,008 $16,082 Delinquent loans to total
loans 0.72% 0.71% 0.84% The following table presents information
about the Company's activity in other real estate owned. Table 6
West Coast Bancorp Other real estate owned ("OREO") activity Three
months Three months (Dollars in ended Number ended Number
thousands, Sept. 30, of Sept. 30, of unaudited) 2009 properties
2008 properties Beginning balance $83,830 335 $27,892 108 Additions
to OREO(1) 12,064 36 26,965 103 Valuation adjustments to OREO
(3,797) - (1,118) - Disposition of OREO (15,527) (70) (5,618) (22)
Ending balance $76,570 301 $48,121 189 Three months ended June 30,
Number (Dollars in thousands, unaudited) 2009 of properties
Beginning balance $87,189 349 Additions to OREO(1) 14,819 48
Valuation adjustments to OREO (3,064) - Disposition of OREO
(15,114) (62) Ending balance $83,830 335 OREO activity related to
two-step loans Three months Three months (Dollars in ended Number
ended Number thousands, Sept. 30, of Sept. 30, of unaudited) 2009
properties 2008 properties Beginning balance $69,632 278 $26,460
101 Additions to OREO(1) 2,999 9 24,200 91 Valuation adjustments to
OREO (3,347) (1,118) Disposition of OREO (12,728) (54) (4,867) (19)
Ending balance $56,556 233 $44,675 173 Three months ended June 30,
Number (Dollars in thousands, unaudited) 2009 of properties
Beginning balance $73,319 296 Additions to OREO(1) 10,902 33
Valuation adjustments to OREO (2,320) Disposition of OREO (12,269)
(51) Ending balance $69,632 278 OREO activity related to loans
other than two-step loans Three months Three months (Dollars in
ended Number ended Number thousands, Sept. 30, of Sept. 30, of
unaudited) 2009 properties 2008 properties Beginning balance
$14,198 57 $1,432 7 Additions to OREO(1) 9,065 27 2,765 12
Valuation adjustments to OREO (450) - - Disposition of OREO (2,799)
(16) (751) (3) Ending balance $20,014 68 $3,446 16 Three months
ended June 30, Number (Dollars in thousands, unaudited) 2009 of
properties Beginning balance $13,870 53 Additions to OREO(1) 3,917
15 Valuation adjustments to OREO (744) Disposition of OREO (2,845)
(11) Ending balance $14,198 57 (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 7 Total two-step OREO Two-step related
OREO Two-step property sales activity short sales and short sales
(Dollars in thousands) Amount Number Amount Number Amount Number
Full year 2008: Beginning balance January 1, 2008 $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, 2008 $60,022 251 Quarterly 2009: Beginning
balance January 1, 2009 $60,022 251 Additions to OREO 20,635 62
Capitalized improvements 668 Valuation adjustments (4,110)
Disposition of OREO properties and short sales (3,896) (17)
$(2,502) (7) $(6,398) (24) Ending balance March 31, 2009 $73,319
296 Additions to OREO 9,822 33 Capitalized improvements 1,080
Valuation adjustments (2,320) Disposition of OREO properties and
short sales (12,269) (51) $(1,177) (3) $(13,446) (54) Ending
balance June 30, 2009 $69,632 278 Additions to OREO 2,130 9
Capitalized improvements 869 Valuation adjustments (3,347)
Disposition of OREO properties and short sales (12,728) (54) $
(644) (3) $(13,372) (57) Ending balance Sept. 30, 2009 $56,556 233
Full year 2009: Beginning balance January 1, 2009 $60,022 251
Additions to OREO 32,587 104 Capitalized improvements 2,617
Valuation adjustments (9,777) Disposition of OREO properties and
short sales (28,893) (122) $(4,323) (13) $(33,216) (135) Ending
balance Sept. 30, 2009 $56,556 233 The following table presents
information with respect to non two-step related OREO activity and
non two-step short sales. Table 8 Total non two-step OREO Non
two-step related Non two-step property sales OREO activity short
sales and short sales (Dollars in thousands) Amount Number Amount
Number Amount Number Full year 2008: Beginning balance January 1,
2008 $- 1 Additions to OREO 11,936 42 Capitalized improvements 10
Valuation adjustments (499) Disposition of OREO properties and
short sales (1,359) (6) $- - $(1,359) (6) Ending balance December
31, 2008 $10,088 37 Quarterly 2009: Beginning balance January 1,
2009 $10,088 37 Additions to OREO 4,614 17 Capitalized improvements
14 Valuation adjustments (651) Disposition of OREO properties and
short sales (195) (1) $(948) (4) $(1,143) (5) Ending balance March
31, 2009 $13,870 53 Additions to OREO 3,841 15 Capitalized
improvements 76 Valuation adjustments (744) Disposition of OREO
properties and short sales (2,845) (11) $(509) (2) $(3,354) (13)
Ending balance June 30, 2009 $14,198 57 Additions to OREO 8,979 27
Capitalized improvements 86 Valuation adjustments (450) Disposition
of OREO properties and short sales (2,799) (16) $(2,616) (11)
$(5,415) (27) Ending balance Sept. 30, 2009 $20,014 68 Full year
2009: Beginning balance January 1, 2009 $10,088 37 Additions to
OREO 17,434 59 Capitalized improvements 176 Valuation adjustments
(1,845) Disposition of OREO properties and short sales (5,839) (28)
$(4,073) (17) $(9,912) (45) Ending balance Sept. 30, 2009 $20,014
68 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 (Dollars in thousands, September 30, September 30, June 30,
unaudited) 2009 2008 2009 Allowance for credit losses, beginning of
period $- $5,280 $- Provision for credit losses 725 1,997 2,389
Charge-offs 766 6,490 2,392 Recoveries 41 715 3 Net charge-offs 725
5,775 2,389 Total allowance for credit losses $- $1,502 $-
Components of allowance for credit losses Allowance for loan losses
$- $1,472 $- Reserve for unfunded commitments - 30 - Total
allowance for credit losses $- $1,502 $- Year to date Year to date
(Dollars in thousands, September 30, September 30, unaudited) 2009
2008 Allowance for credit losses, beginning of period $421 $31,065
Provision for credit losses 6,217 4,724 Charge-offs 6,833 36,307
Recoveries 195 2,020 Net Charge-offs 6,638 34,287 Total allowance
for credit losses $- $1,502 Components of allowance for credit
losses Allowance for loan losses $- $1,472 Reserve for unfunded
commitments - 30 Total allowance for credit losses $- $1,502 Net
loan charge-offs to average total loans 0.45% 2.12% 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 (Dollars
in thousands, September 30, September 30, June 30, unaudited) 2009
2008 2009 Nonaccrual two-step loans $5,128 $82,990 $10,348 90 day
past due and accruing interest - - - Total nonperforming two-step
loans 5,128 82,990 10,348 Other real estate owned two-step 56,556
44,675 69,632 Total nonperforming two-step assets $61,684 $127,665
$79,980 Delinquent two-step loans 30-89 days past due, not in
nonaccrual status $- $4,089 $- Nonperforming two-step assets to
total assets 2.32% 4.96% 3.06% Delinquent two-step loans to total
two-step loans 0.00% 4.18% 0.00% The following table shows the
components of our construction and land loans outside the two-step
portfolio as of the dates shown: Table 11 West Coast Bancorp
Construction and land loans outside the two-step portfolio (Dollars
in thousands, unaudited) September 30, 2009 September 30, 2008 June
30, 2009 Amount Percent(2) Amount Percent(2) Amount Percent(2) Land
loans(1) $35,645 20% $44,805 16% $37,503 16% Residential
construction loans other than two-step loans 100,829 56% 144,517
52% 119,274 52% Commercial construction loans 43,991 24% 88,630 32%
72,045 32% Total construction and land loans other than two-step
loans $180,465 100% $277,952 100% $228,822 100% Components of
residential construction and land loans other than two-step loans:
Land loans(1) $14,783 13% $24,038 14% $17,910 13% Site development
45,566 39% 71,125 42% 56,997 42% Vertical construction 55,263 48%
73,392 44% 62,276 45% Total residential construction and land loans
other than two-step loans $115,612 100% $168,555 100% $137,183 100%
Components of commercial construction and land loans: Land loans(1)
$20,862 32% $20,767 19% $19,593 21% Site development 607 1% 77 0%
607 1% Vertical construction 43,384 67% 88,553 81% 71,439 78% Total
commercial construction and land loans $64,853 100% $109,397 100%
$91,639 100% Components of total construction and land loans other
than two-step loans: Land loans(1) $35,645 20% $44,805 16% $37,503
17% Site development 46,173 26% 71,202 26% 57,604 25% Vertical
construction 98,647 55% 161,945 58% 133,715 58% Total construction
and land loans other than two-step loans $180,465 100% $277,952
100% $228,822 100% (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 nonaccrual construction and land loans outside the two-step
portfolio as of the dates shown. Table 12 West Coast Bancorp
Nonaccrual construction and land loans outside the two-step
portfolio September 30, 2009 September 30, 2008 June 30, 2009
(Dollars Percent Percent Percent in thousands, of loan of loan of
loan unaudited) Amount category(2) Amount category(2) Amount
category(2) Land loans(1) $9,232 25.90% $5,308 1.91% $8,625 23.00%
Residential construction loans other than two-step loans 37,149
36.84% 21,025 7.56% 46,159 38.70% Commercial construction loans
2,449 5.57% - 0.00% 2,922 4.06% Total nonaccrual construction and
land loans other than two-step loans $48,830 27.06% $26,333 9.47%
$57,706 25.22% Components of nonaccrual residential construction
and land loans other than two-step loans: Land loans(1) $8,236
55.71% $5,308 3.15% $7,629 42.60% Site development 26,785 58.78%
13,731 8.15% 33,721 59.16% Vertical construction 10,364 18.75%
7,294 4.33% 12,438 19.97% Total nonaccrual residential construction
and land loans other than two-step loans $45,385 39.26% $26,333
15.63% $53,788 39.21% Components of nonaccrual commercial
construction and land loans: Land loans(1) 996 4.77% - 0.00% 996
5.08% Site development - 0.00% - 0.00% - 0.00% Vertical
construction 2,449 5.64% - 0.00% 2,922 4.09% Total nonaccrual
commercial construction and land loans other than two-step loans
$3,445 5.31% $- 0.00% $3,918 4.28% Components of total nonaccrual
construction and land loans other than two-step loans: Land
loans(1) $9,232 25.90% $5,308 1.91% $8,625 23.00% Site development
26,785 58.01% 13,731 4.94% 33,721 58.54% Vertical construction
12,813 12.99% 7,294 2.62% 15,360 11.49% Total nonaccrual
construction and land loans other than two-step loans $48,830
27.06% $26,333 9.47% $57,706 25.22% (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, EVP & Chief Financial
Officer, +1-503-598-3250 Web Site: http://www.wcb.com/
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