West Coast Bancorp Reports Strong Third Quarter 2010 Earnings
- Third quarter 2010 net income was $6.1 million or $.06 per diluted share, representing a return on average assets of .96% annualized.
- West Coast Bank's total risk based capital ratio improved significantly over the past year to 17.56% at September 30, 2010.
- Nonperforming assets of $104.4 million at September 30, 2010, continued their steady decline from previous periods and were down 50% over the past twelve months.
- Allowance for credit losses was 2.71% of total loans and 62% of nonperforming loans.
- Third quarter 2010 net interest margin improved to 3.71%, up from 3.14% in the same quarter last year.
- Average non-time deposits grew 7% since the third quarter in 2009 due to solid core deposit account growth.
LAKE OSWEGO, Ore., Oct. 22 /PRNewswire-FirstCall/ -- 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 $6.1 million or $.06 per diluted share for third quarter 2010 compared to a net loss for third quarter 2009 of $12.4 million or $.79 per diluted share. Year-to-date the Company reported net income of $1.3 million or $.01 per diluted share, compared to a net loss of $42.3 million or $2.71 per diluted share for the same period in 2009. There were 103.1 million weighted average diluted shares outstanding in the most recent quarter compared to 15.5 million in the third quarter 2009.
"The favorable operating trends that the Company experienced in the first half of 2010 continued in the third quarter with lower provisioning for loan losses, continued reduction in non-performing assets, an improved net interest margin, and reduced OREO costs", said Robert D. Sznewajs, President and Chief Executive Officer. "These positive trends combined with low cost funding and a growing core deposit account base, contributed to third quarter and year-to-date profitability for the Company", says Sznewajs.
Capital
Table 1 below shows regulatory capital ratios for Bancorp and the Bank at September 30, 2010 and 2009, and at June 30, 2010, illustrating significant and continued improvement as a result of the Company's capital raising activities and continued reductions in risk-weighted assets over the past twelve months. Due to favorable operating trends and improved capital ratios, the Company terminated the discretionary equity issuance program on August 6, 2010 after raising aggregate gross sales proceeds of approximately $7.9 million.
Table 1 |
||||||||
SELECTED INFORMATION |
||||||||
Capital Ratios |
||||||||
September 30, |
September 30, |
June 30, |
||||||
2010 |
2009 |
Change |
2010 |
Change |
||||
West Coast Bancorp |
||||||||
Tier 1 capital ratio |
16.96% |
9.79% |
7.17 |
16.50% |
0.46 |
|||
Total capital ratio |
18.23% |
11.05% |
7.18 |
17.76% |
0.47 |
|||
Leverage ratio |
12.84% |
7.88% |
4.96 |
11.90% |
0.94 |
|||
West Coast Bank |
||||||||
Tier 1 capital ratio |
16.30% |
9.49% |
6.81 |
15.84% |
0.46 |
|||
Total capital ratio |
17.56% |
10.75% |
6.81 |
17.10% |
0.46 |
|||
Leverage ratio |
12.34% |
7.64% |
4.70 |
11.43% |
0.91 |
|||
Selective quarterly performance ratios |
||||||||
Return on average equity, annualized |
8.84% |
-29.39% |
38.23 |
-5.92% |
14.76 |
|||
Return on average assets, annualized |
0.96% |
-1.85% |
2.81 |
-0.58% |
1.54 |
|||
Efficiency ratio for the quarter to date |
76.09% |
95.97% |
(19.88) |
80.83% |
4.74 |
|||
Share and Per Share Figures |
||||||||
Quarter ended |
Quarter ended |
Quarter ended |
||||||
(Shares in thousands) |
September 30, 2010 |
September 30, 2009 |
Change |
June 30, 2010 |
Change |
|||
Common shares outstanding at period end |
96,424 |
15,647 |
80,777 |
96,421 |
3 |
|||
Weighted average diluted shares |
103,144 |
15,520 |
87,624 |
92,123 |
11,021 |
|||
Income (loss) per diluted share |
$ 0.06 |
$ (0.79) |
$ 0.85 |
$ (0.04) |
$ 0.10 |
|||
Book value per common share |
$ 2.63 |
$ 10.33 |
$ (7.70) |
$ 2.55 |
$ 0.08 |
|||
Please see table 21 for additional information regarding outstanding shares and the possible dilutive effects of presently outstanding securities. |
||||||||
Balance Sheet Overview
Total loan balances declined $247 million or 14% from September 30, 2009 to $1.58 billion at September 30, 2010. The decline primarily reflects continued soft loan demand, as well as the Company's strategy to reduce risk exposure in selective loan segments over the past year. As a result, the real estate construction loan portfolio contracted $92 million or 61% since September 30, 2009, and measured 4% of total loans at the most recent quarter end compared to 8% a year ago. The Company also continued to exit a number of higher risk rated commercial loans, which contributed to the $90 million or 22% contraction in the commercial loan category from September 30 a year ago. However, over the last few months the Company has seen an increase in commercial loan originations as a result of its marketing efforts.
Table 2 |
|||||||||||
PERIOD END LOANS |
|||||||||||
(Dollars in thousands) |
September 30, |
% of |
September 30, |
% of |
Change |
June 30, |
% of |
||||
2010 |
total |
2009 |
total |
Amount |
% |
2010 |
total |
||||
Commercial loans |
$ 317,037 |
20% |
$ 406,807 |
22% |
$ (89,770) |
-22% |
$ 312,170 |
19% |
|||
Commercial real estate construction |
17,933 |
1% |
43,944 |
2% |
(26,011) |
-59% |
22,096 |
1% |
|||
Residential real estate construction |
39,955 |
3% |
105,921 |
6% |
(65,966) |
-62% |
52,062 |
3% |
|||
Total real estate construction loans |
57,888 |
4% |
149,865 |
8% |
(91,977) |
-61% |
74,158 |
5% |
|||
Mortgage |
71,446 |
5% |
78,144 |
4% |
(6,698) |
-9% |
73,867 |
5% |
|||
Nonstandard mortgage |
13,294 |
1% |
21,952 |
1% |
(8,658) |
-39% |
14,348 |
1% |
|||
Home equity |
272,132 |
17% |
282,552 |
16% |
(10,420) |
-4% |
274,072 |
17% |
|||
Total real estate mortgage |
356,872 |
23% |
382,648 |
21% |
(25,776) |
-7% |
362,287 |
23% |
|||
Commercial real estate loans |
827,668 |
52% |
863,658 |
48% |
(35,990) |
-4% |
837,033 |
52% |
|||
Installment and other consumer loans |
15,986 |
1% |
19,023 |
1% |
(3,037) |
-16% |
16,384 |
1% |
|||
Total |
$ 1,575,451 |
$ 1,822,001 |
$ (246,550) |
-14% |
$ 1,602,032 |
||||||
Yield on loans |
5.44% |
5.21% |
0.23 |
5.46% |
|||||||
Over the past twelve months the Company's total cash equivalents and investment securities balances collectively grew $141 million to $758 million at September 30, 2010. Total cash equivalents, however, declined $87 million or 43% since September 30, 2009. This decline was largely a result of the second quarter 2010 prepayment of $99 million in Federal Home Loan Bank ("FHLB") term borrowings and reinvestment of excess cash in our investment portfolio over the past year. Total cash equivalents remained relatively unchanged from June 30, 2010.
Primarily due to the significant contraction in loan balances, the investment portfolio grew $228 million or 55% over the past twelve months. The majority of the growth occurred in U.S. Government Agency and mortgage-backed securities. At September 30, 2010, the expected duration of the investment securities portfolio, excluding FHLB stock, was 1.7 years.
Table 3 |
|||||||||||
PERIOD END CASH EQUIVALENTS AND INVESTMENT SECURITIES |
|||||||||||
(Dollars in thousands) |
September 30, |
% of |
September 30, |
% of |
Change |
June 30, |
% of |
||||
2010 |
total |
2009 |
total |
Amount |
% |
2010 |
total |
||||
Cash equivalents: |
|||||||||||
Federal funds sold |
$ 4,605 |
1% |
$ 3,287 |
1% |
$ 1,318 |
40% |
$ 13,431 |
2% |
|||
Interest-bearing deposits in other banks |
113,144 |
15% |
201,583 |
32% |
(88,439) |
-44% |
109,781 |
14% |
|||
Total cash equivalents |
117,749 |
16% |
204,870 |
33% |
(87,121) |
-43% |
123,212 |
16% |
|||
Investment securities: |
|||||||||||
U.S. Treasury securities |
14,551 |
2% |
45,197 |
7% |
(30,646) |
-68% |
14,688 |
2% |
|||
U.S. Government Agency securities |
221,450 |
28% |
39,603 |
6% |
181,847 |
459% |
250,848 |
32% |
|||
Corporate securities |
9,014 |
1% |
10,621 |
2% |
(1,607) |
-15% |
9,674 |
1% |
|||
Mortgage-backed securities |
324,563 |
43% |
233,206 |
38% |
91,357 |
39% |
300,485 |
39% |
|||
Obligations of state and political sub. |
58,206 |
8% |
73,903 |
12% |
(15,697) |
-21% |
58,564 |
8% |
|||
Equity investments and other securities |
12,290 |
2% |
9,454 |
2% |
2,836 |
30% |
11,972 |
2% |
|||
Total investment securities |
640,074 |
84% |
411,984 |
67% |
228,090 |
55% |
646,231 |
84% |
|||
Total cash equivalents and investment securities |
$ 757,823 |
100% |
$ 616,854 |
100% |
$ 140,969 |
23% |
$ 769,443 |
100% |
|||
Tax equivalent yield on cash equivalents and investment securities |
2.30% |
2.42% |
(0.12) |
2.27% |
|||||||
Third quarter 2010 average total deposits of $2.0 billion declined 7% or $162 million from the same quarter in 2009. However, average non-time deposits increased $113 million or 7% over the same period. With excess balance sheet liquidity, we elected to reduce higher cost time deposit balances, which declined $274 million or 45% from average time deposit balances in the third quarter last year. Time deposits represented just 17% of the Company's average total deposits in the most recent quarter compared to 28% in third quarter 2009. The combination of the Company's favorable deposit mix and deposit pricing strategies helped reduce the average rate paid on total deposits to .51% in third quarter 2010, a decline of 63 basis points from 1.14% in third quarter 2009.
Table 4 |
|||||||||||
QUARTERLY AVERAGE DEPOSITS BY CATEGORY |
|||||||||||
(Dollars in thousands) |
Q3 |
% of |
Q3 |
% of |
Change |
Q2 |
% of |
||||
2010 |
total |
2009 |
total |
Amount |
% |
2010 |
total |
||||
Demand deposits |
$ 550,695 |
28% |
$ 508,758 |
24% |
$ 41,937 |
8% |
$ 523,298 |
26% |
|||
Interest bearing demand |
337,214 |
17% |
311,319 |
15% |
25,895 |
8% |
332,850 |
16% |
|||
Savings |
106,768 |
5% |
93,611 |
4% |
13,157 |
14% |
104,052 |
5% |
|||
Money market |
667,150 |
33% |
635,511 |
29% |
31,639 |
5% |
657,454 |
32% |
|||
Total non-time deposit accounts |
1,661,827 |
83% |
1,549,199 |
72% |
112,628 |
7% |
1,617,654 |
79% |
|||
Time deposits |
336,678 |
17% |
610,907 |
28% |
(274,229) |
-45% |
431,669 |
21% |
|||
Total |
$ 1,998,505 |
100% |
$ 2,160,106 |
100% |
$ (161,601) |
-7% |
$ 2,049,323 |
100% |
|||
Average rate on total deposits |
0.51% |
1.14% |
(0.63) |
0.64% |
|||||||
The number of checking accounts, the foundation from which we build broader client relationships, grew by over 6,000 accounts or 6% over the past twelve months.
Table 5 |
||||||||||||
NUMBER OF DEPOSIT ACCOUNTS |
||||||||||||
(In thousands) |
Sept. 30, |
% of |
Sept. 30, |
% of |
Change |
June 30, |
% of |
Change |
||||
2010 |
total |
2009 |
total |
# |
% |
2010 |
total |
# |
% (1) |
|||
Demand deposits |
50,757 |
32% |
47,763 |
31% |
2,994 |
6% |
50,340 |
32% |
417 |
3% |
||
Interest bearing demand |
51,891 |
34% |
48,693 |
32% |
3,198 |
7% |
51,465 |
34% |
426 |
3% |
||
Total checking accounts |
102,648 |
66% |
96,456 |
63% |
6,192 |
6% |
101,805 |
66% |
843 |
3% |
||
Savings |
28,599 |
18% |
26,227 |
17% |
2,372 |
9% |
28,488 |
18% |
111 |
2% |
||
Money market |
14,499 |
9% |
15,044 |
10% |
(545) |
-4% |
14,575 |
9% |
(76) |
-2% |
||
Time deposits |
10,499 |
7% |
14,907 |
10% |
(4,408) |
-30% |
11,681 |
7% |
(1,182) |
-40% |
||
Total |
156,245 |
100% |
152,634 |
100% |
3,611 |
2% |
156,549 |
100% |
(304) |
-1% |
||
(1) Annualized. |
||||||||||||
Operating Results Improved Significantly from Third Quarter 2009
As shown in Table 6 below, third quarter 2010 net income of $6.1 million increased $18.5 million from a net loss of $12.4 million in the same quarter of 2009 and increased $9.9 million from a $3.8 million net loss in the second quarter 2010. The improved year-over-year third quarter was primarily a result of significantly lower credit costs, including an $18.7 million decrease in the provision for credit losses and a $3.0 million decline in Other Real Estate Owned ("OREO") valuation adjustments and losses upon OREO dispositions. Excluding a prepayment fee of $2.3 million associated with prepayment of $99 million in FHLB borrowings and effects of taxes, the Company's adjusted net income in the second quarter of 2010 would have been $.2 million. See reconciliation below.
Table 6 |
||||||||||
SUMMARY INCOME STATEMENT |
||||||||||
(Dollars in thousands) |
Q3 |
Q3 |
Change |
Q2 |
Change |
|||||
2010 |
2009 |
$ |
% |
2010 |
$ |
% |
||||
Net interest income |
$ 21,875 |
$ 19,145 |
$ 2,730 |
14% |
$ 18,910 |
$ 2,965 |
16% |
|||
Provision for credit losses |
1,567 |
20,300 |
18,733 |
92% |
7,758 |
6,191 |
80% |
|||
Noninterest income |
8,069 |
4,971 |
3,098 |
62% |
9,625 |
(1,556) |
-16% |
|||
Noninterest expense |
23,003 |
23,489 |
486 |
2% |
22,909 |
(94) |
0% |
|||
Income (loss) before income taxes |
5,374 |
(19,673) |
25,047 |
127% |
(2,132) |
7,506 |
352% |
|||
Provision (benefit) for income taxes |
(676) |
(7,265) |
(6,589) |
-91% |
1,717 |
2,393 |
139% |
|||
Net income (loss) |
$ 6,050 |
$ (12,408) |
$ 18,458 |
149% |
$ (3,849) |
$ 9,899 |
257% |
|||
Reconciliation of adjusted net income to GAAP |
||||||||||
Net income (loss) |
$ 6,050 |
$ (12,408) |
$ 18,458 |
149% |
$ (3,849) |
$ 9,899 |
257% |
|||
Less FHLB prepayment fee (1) |
- |
- |
- |
(2,326) |
2,326 |
|||||
Less: Impact of taxes: |
||||||||||
Unrealized gain on securities |
(676) |
- |
(676) |
(1,798) |
1,122 |
|||||
Increase in deferred tax assets-tax return adjustments |
- |
- |
- |
3,515 |
(3,515) |
|||||
Net income (loss) excluding FHLB prepayment fee and taxes (2) |
$ 5,374 |
$ (12,408) |
$ 17,782 |
143% |
$ 194 |
$ 5,180 |
2670% |
|||
(1) No tax benefit was recognized for FHLB prepayment fee. |
||||||||||
(2) Management uses this non-GAAP information internally and has disclosed it to investors based on its belief that the information provides additional , valuable information relating to its operating performance as compared to prior periods. |
||||||||||
Third quarter 2010 net interest income of $21.9 million increased $2.7 million or 14% from the same quarter in 2009. This increase was mainly due to a reduction in interest expense on deposits and borrowings as well as lower interest reversals on nonaccrual loans. The net interest margin of 3.71% in the most recent quarter expanded 57 basis points from third quarter 2009. Consistent with expectations, the net interest margin widened 23 basis points from 3.48% in second quarter 2010 excluding the impact of the FHLB prepayment fee in that quarter. See reconciliation to GAAP for second quarter 2010 net interest margin in Table 7 below. The spread between the yield earned on loans and rate paid on interest bearing deposits improved 102 basis points year-over-year in the third quarter notwithstanding a significant shift in average earning assets from higher yielding loan balances to cash equivalents and investment securities balances. Collectively, cash equivalents and investment securities earned 314 basis points less than the loan portfolio during the most recent quarter.
Table 7 |
||||||||
NET INTEREST SPREAD AND MARGIN |
||||||||
(Annualized, tax-equivalent basis) |
Q3 |
Q3 |
Q2 |
|||||
2010 |
2009 |
Change |
2010 |
Change |
||||
Yield on average interest-earning assets |
4.41% |
4.53% |
(0.12) |
4.39% |
0.02 |
|||
Rate on average interest-bearing liabilities |
1.00% |
1.73% |
(0.73) |
1.72% |
(0.72) |
|||
Net interest spread |
3.41% |
2.80% |
0.61 |
2.67% |
0.74 |
|||
Net interest margin |
3.71% |
3.14% |
0.57 |
3.11% |
0.60 |
|||
Impact of FHLB prepayment fee in Q2 2010 |
0.00% |
0.00% |
- |
-0.37% |
0.37 |
|||
Net interest margin excluding FHLB prepayment fee |
3.71% |
3.14% |
0.57 |
3.48% |
0.23 |
|||
As shown in Table 8 below, third quarter 2010 total noninterest income of $8.1 million increased $3.1 million or 62% from the same quarter last year. The increase was mainly due to a $3.0 million improvement in OREO valuation adjustments and gains or losses associated with OREO dispositions.
Excluding OREO valuation adjustments and gain or losses from both quarters, the Company's noninterest income was flat year-over-year third quarter. The $.5 million or 20% growth in payment system revenues and $.1 million increase in service charges on deposit accounts offset the declines in gains on sales of loans and trust and investment services revenues.
Table 8 |
||||||||||
NONINTEREST INCOME |
||||||||||
(Dollars in thousands) |
Q3 |
Q3 |
Change |
Q2 |
Change |
|||||
2010 |
2009 |
$ |
% |
2010 |
$ |
% |
||||
Noninterest income |
||||||||||
Service charges on deposit accounts |
$ 4,145 |
$ 4,038 |
$ 107 |
3% |
$ 4,213 |
$ (68) |
-2% |
|||
Payment systems related revenue |
2,998 |
2,501 |
497 |
20% |
2,875 |
123 |
4% |
|||
Trust and investment services revenues |
978 |
1,140 |
(162) |
-14% |
1,167 |
(189) |
-16% |
|||
Gains on sales of loans |
182 |
466 |
(284) |
-61% |
306 |
(124) |
-41% |
|||
Other |
728 |
824 |
(96) |
-12% |
785 |
(57) |
-7% |
|||
Gain on sales of securities |
- |
- |
- |
0% |
488 |
(488) |
-100% |
|||
Total |
9,031 |
8,969 |
62 |
1% |
9,834 |
(803) |
-8% |
|||
OREO gains (losses) on sale |
549 |
(201) |
750 |
373% |
1,048 |
(499) |
-48% |
|||
OREO valuation adjustments |
(1,511) |
(3,797) |
2,286 |
60% |
(1,257) |
(254) |
-20% |
|||
Total |
(962) |
(3,998) |
3,036 |
76% |
(209) |
(753) |
-360% |
|||
Total noninterest income |
$ 8,069 |
$ 4,971 |
$ 3,098 |
62% |
$ 9,625 |
$ (1,556) |
-16% |
|||
As presented in Table 9 below, third quarter 2010 total noninterest expense of $23.0 million decreased $.5 million from the same quarter in 2009 as declines in FDIC assessment and OREO related expenses were offset by higher salaries and employee benefits reflective of increased employee incentives and restricted stock expenses. The increase in payment system expense was directly associated with higher transaction volumes.
Table 9 |
||||||||||
NONINTEREST EXPENSE |
||||||||||
(Dollars in thousands) |
Q3 |
Q3 |
Change |
Q2 |
Change |
|||||
2010 |
2009 |
$ |
% |
2010 |
$ |
% |
||||
Noninterest expense |
||||||||||
Salaries and employee benefits |
$ 11,836 |
$ 10,753 |
$ (1,083) |
-10% |
$ 11,322 |
$ (514) |
-5% |
|||
Equipment |
1,525 |
1,758 |
233 |
13% |
1,606 |
81 |
5% |
|||
Occupancy |
2,216 |
2,247 |
31 |
1% |
2,249 |
33 |
1% |
|||
Payment systems related expense |
1,214 |
1,043 |
(171) |
-16% |
1,212 |
(2) |
0% |
|||
Professional fees |
1,147 |
1,091 |
(56) |
-5% |
1,161 |
14 |
1% |
|||
Postage, printing and office supplies |
791 |
799 |
8 |
1% |
737 |
(54) |
-7% |
|||
Marketing |
861 |
832 |
(29) |
-3% |
738 |
(123) |
-17% |
|||
Communications |
374 |
402 |
28 |
7% |
381 |
7 |
2% |
|||
Other noninterest expense |
3,039 |
4,564 |
1,525 |
33% |
3,503 |
464 |
13% |
|||
Total |
$ 23,003 |
$ 23,489 |
$ 486 |
2% |
$ 22,909 |
$ (94) |
0% |
|||
Income Taxes and Deferred Tax Asset Valuation Allowance
Third quarter 2010 income tax benefit was $.7 million compared to a benefit for income taxes of $7.3 million in the same quarter 2009. The benefit for income taxes for the third quarter 2010 was the result of an increase in the unrealized gain on our investment securities. Income taxes in third quarter 2010 reflected tax expense determined on pretax income which was offset by a corresponding income tax benefit resulting from a reduction in the deferred tax asset and its associated valuation allowance.
The Company maintained a valuation allowance of $22.0 million against the deferred tax asset balance of $27.6 million as of September 30, 2010, for a net deferred tax asset of $5.6 million. This represented a $.7 million increase from the June 30, 2010 net deferred tax asset balance of $4.9 million.
Table 10 |
||||||||
PROVISION (BENEFIT) FOR INCOME TAXES |
||||||||
(Dollars in thousands) |
Q3 |
Q3 |
Q2 |
|||||
2010 |
2009 |
Change |
2010 |
Change |
||||
Provision (benefit) for income taxes net of decrease |
||||||||
in deferred tax asset valuation allowance |
$ - |
$ (7,265) |
$ 7,265 |
$ - |
$ - |
|||
Provision (benefit) for income taxes from deferred |
||||||||
tax asset valuation allowance: |
||||||||
Unrealized gain on securities |
(676) |
- |
(676) |
(1,798) |
1,122 |
|||
Increase in deferred tax assets-tax return adjustments |
- |
- |
- |
3,515 |
(3,515) |
|||
Total provision (benefit) for income taxes |
$ (676) |
$ (7,265) |
$ 6,589 |
$ 1,717 |
$ (2,393) |
|||
Credit Quality
The Company recorded a third quarter 2010 provision for credit losses of $1.6 million, a decline from $20.3 million in the same quarter of 2009. Consistent with the first two quarters of 2010, the latest quarter marked a significant reduction in loan net charge-offs compared to the corresponding quarter a year ago. Third quarter 2010 net charge-offs of $3.3 million, or .82% of average loans on an annualized basis, declined $15.5 million from $18.8 million in the third quarter of 2009, and was at their lowest quarterly level in over two years. The reduction in net charge-offs from the same quarter in 2009 was primarily attributable to the commercial, residential real estate construction, and mortgage loan categories. The Company's future provisioning will continue to be heavily dependent on the local real estate market, level of market interest rates, and general economic conditions nationally and in the areas in which we do business.
Table 11 |
|||||||
ALLOWANCE FOR CREDIT LOSSES AND NET CHARGEOFFS |
|||||||
(Dollars in thousands) |
Q3 |
Q2 |
Q1 |
Q4 |
Q3 |
||
2010 |
2010 |
2010 |
2009 |
2009 |
|||
Allowance for credit losses, beginning of period |
$ 44,347 |
$ 41,299 |
$ 39,418 |
$ 40,036 |
$ 38,569 |
||
Total provision for credit losses |
1,567 |
7,758 |
7,634 |
35,233 |
20,300 |
||
Loan net charge-offs: |
|||||||
Commercial |
524 |
1,684 |
839 |
13,271 |
5,744 |
||
Commercial real estate construction |
- |
248 |
487 |
- |
324 |
||
Residential real estate construction |
813 |
432 |
734 |
10,538 |
8,536 |
||
Total real estate construction |
813 |
680 |
1,221 |
10,538 |
8,860 |
||
Mortgage |
449 |
478 |
909 |
4,734 |
3,018 |
||
Nonstandard mortgage |
5 |
641 |
1,497 |
692 |
725 |
||
Home equity |
568 |
627 |
914 |
1,346 |
203 |
||
Total real estate mortgage |
1,022 |
1,746 |
3,320 |
6,772 |
3,946 |
||
Commercial real estate |
339 |
275 |
95 |
4,733 |
(79) |
||
Installment and consumer |
272 |
146 |
137 |
285 |
128 |
||
Overdraft |
326 |
179 |
141 |
252 |
234 |
||
Total loan net charge-offs |
3,296 |
4,710 |
5,753 |
35,851 |
18,833 |
||
Total allowance for credit losses |
$ 42,618 |
$ 44,347 |
$ 41,299 |
$ 39,418 |
$ 40,036 |
||
Components of allowance for credit losses: |
|||||||
Allowance for loan losses |
$ 41,753 |
$ 43,329 |
$ 40,446 |
$ 38,490 |
$ 39,075 |
||
Reserve for unfunded commitments |
865 |
1,018 |
853 |
928 |
961 |
||
Total allowance for credit losses |
$ 42,618 |
$ 44,347 |
$ 41,299 |
$ 39,418 |
$ 40,036 |
||
Net loan charge-offs to average loans (annualized) |
0.82% |
1.15% |
1.37% |
7.94% |
4.01% |
||
Allowance for loan losses to total loans |
2.65% |
2.70% |
2.43% |
2.23% |
2.14% |
||
Allowance for credit losses to total loans |
2.71% |
2.77% |
2.48% |
2.29% |
2.20% |
||
Allowance for loan losses to nonperforming loans |
61% |
55% |
47% |
39% |
30% |
||
Allowance for credit losses to nonperforming loans |
62% |
56% |
48% |
40% |
30% |
||
The September 30, 2010 allowance for credit losses of $42.6 million or 2.71% of total loan balances increased from $40.0 million or 2.20% of total loan balances a year ago. The increase in the allowance for credit losses relative to total loan balances over the past twelve months was due to higher general valuation allowances and a larger unallocated allowance in the September 30, 2010 allowance model. At September 30, 2010, the unallocated portion of the allowance for loan losses amounted to $7.0 million or 16% of the total allowance for credit losses, an increase from $3.9 million or 10%, respectively, at the end of the third quarter 2009. As shown in Table 18, year-to-date provision for credit losses exceeded net charge-offs by $3.2 million. During the third quarter 2010, however, the net charge-offs exceeded the provision for credit losses by $1.7 million due to a slowdown in the unfavorable risk rating migration within the loan portfolio as well as a reduction in higher risk rated loan balances. These changes caused the September 30, 2010 allowance for credit losses as a percentage of total loans to decline slightly from 2.77% at June 30, 2010. The Company's estimate of appropriate reserve amounts will continue to be primarily dependent on the loan portfolio's credit quality performance trends, including net charge-offs, which will be heavily dependent on local economic conditions.
Total nonperforming assets were $104.4 million or 4.2% of total assets as of September 30, 2010, which represented the sixth consecutive quarterly decline. The balance of nonperforming loans has decreased 50% or $104.2 million from $208.6 million a year ago, at which time total nonperforming assets represented 7.9% of total assets. The balance of total nonperforming assets at quarter end reflected write-downs totaling $56.4 million or 36% from the original principal loan balance compared to write-downs of 29% twelve months ago. Total nonperforming assets fell $11.8 million or 10% during the most recent quarter. The allowance for credit losses represented 62% of nonperforming loans at September 30, 2010, an increase from 30% a year ago.
Table 12 |
||||||
NONPERFORMING ASSETS |
||||||
(Dollars in thousands) |
Sept. 30, |
June 30, |
March 31, |
Dec. 31, |
Sept. 30, |
|
2010 |
2010 |
2010 |
2009 |
2009 |
||
Loans on nonaccrual status: |
||||||
Commercial |
$ 13,319 |
$ 15,317 |
$ 24,856 |
$ 36,211 |
$ 49,871 |
|
Real estate construction: |
||||||
Commercial real estate construction |
3,391 |
3,391 |
3,939 |
1,488 |
2,449 |
|
Residential real estate construction |
13,316 |
19,465 |
19,776 |
22,373 |
42,277 |
|
Total real estate construction |
16,707 |
22,856 |
23,715 |
23,861 |
44,726 |
|
Real estate mortgage: |
||||||
Mortgage |
13,040 |
14,535 |
9,829 |
11,563 |
12,498 |
|
Nonstandard mortgage |
5,150 |
6,121 |
9,327 |
8,752 |
10,810 |
|
Home equity |
1,538 |
2,198 |
2,248 |
2,036 |
1,599 |
|
Total real estate mortgage |
19,728 |
22,854 |
21,404 |
22,351 |
24,907 |
|
Commercial real estate |
18,792 |
17,542 |
15,322 |
16,778 |
12,463 |
|
Installment and consumer |
- |
74 |
172 |
144 |
39 |
|
Total nonaccrual loans |
68,546 |
78,643 |
85,469 |
99,345 |
132,006 |
|
90 days past due not on nonaccrual |
- |
- |
- |
- |
- |
|
Total nonperforming loans |
68,546 |
78,643 |
85,469 |
99,345 |
132,006 |
|
Other real estate owned |
35,814 |
37,578 |
45,238 |
53,594 |
76,570 |
|
Total nonperforming assets |
$ 104,360 |
$ 116,221 |
$ 130,707 |
$ 152,939 |
$ 208,576 |
|
Nonperforming loans to total loans |
4.35% |
4.91% |
5.13% |
5.76% |
7.25% |
|
Nonperforming assets to total assets |
4.20% |
4.64% |
4.91% |
5.60% |
7.86% |
|
Over the past year total nonaccrual loans declined $63.5 million or 48% to $68.5 million at September 30, 2010. This reduction was largely due to the Company taking ownership of additional residential site development and construction properties related to loans which previously were on nonaccrual status, nonaccrual loan payoffs, and the disposition of certain large nonaccrual commercial loans. At September 30, 2010, the total nonaccrual loan portfolio had been written down 22% from the original principal balance compared to 24% at the end of the third quarter a year ago.
As indicated in Table 13 below, the Company remains focused on OREO property disposition activities. During the most recent quarter, the Company disposed of 51 OREO properties with a book value of $5.4 million. At September 30, 2010, the OREO portfolio consisted of 448 properties valued at $35.8 million. The quarter end OREO balance reflected write-downs totaling 53% from the original loan principal compared to 38% twelve months earlier. The largest balances in the OREO portfolio at September 30, 2010 were attributable to residential homes followed by residential site development projects. The site development projects remaining as of quarter end were primarily located in Vancouver and Washougal, Washington and in Salem, Oregon.
Table 13 |
||||||||||||
OTHER REAL ESTATE OWNED ACTIVITY |
||||||||||||
(Dollars in thousands) |
Q3 2010 |
Q2 2010 |
Q1 2010 |
Q4 2009 |
Q3 2009 |
|||||||
Amount |
# |
Amount |
# |
Amount |
# |
Amount |
# |
Amount |
# |
|||
Beginning balance |
$ 37,578 |
446 |
$ 45,238 |
596 |
$ 53,594 |
672 |
$ 76,570 |
301 |
$ 83,830 |
335 |
||
Additions to OREO |
5,119 |
53 |
7,209 |
20 |
5,003 |
15 |
26,293 |
536 |
12,064 |
36 |
||
Dispositions of OREO |
(5,372) |
(51) |
(13,612) |
(170) |
(11,000) |
(91) |
(42,329) |
(165) |
(15,527) |
(70) |
||
OREO valuation adjustments |
(1,511) |
- |
(1,257) |
- |
(2,359) |
- |
(6,940) |
- |
(3,797) |
- |
||
Ending balance |
$ 35,814 |
448 |
$ 37,578 |
446 |
$ 45,238 |
596 |
$ 53,594 |
672 |
$ 76,570 |
301 |
||
Table 14 |
||||||||
OTHER REAL ESTATE OWNED BY PROPERTY TYPE |
||||||||
(Dollars in thousands) |
Sept. 30, |
# of |
June 30, |
# of |
March 31, |
# of |
||
2010 |
properties |
2010 |
properties |
2010 |
properties |
|||
Homes |
$ 15,341 |
66 |
$ 17,254 |
75 |
$ 21,040 |
91 |
||
Residential site developments |
8,096 |
281 |
7,296 |
265 |
13,488 |
400 |
||
Lots |
4,062 |
61 |
4,750 |
67 |
5,114 |
71 |
||
Land |
3,525 |
10 |
3,474 |
10 |
2,682 |
7 |
||
Income producing properties |
3,212 |
7 |
2,996 |
6 |
1,094 |
4 |
||
Condominiums |
881 |
12 |
1,111 |
12 |
1,111 |
12 |
||
Multifamily |
697 |
11 |
697 |
11 |
709 |
11 |
||
Total |
$ 35,814 |
448 |
$ 37,578 |
446 |
$ 45,238 |
596 |
||
Other:
The Company will hold a Webcast conference call Friday, October 22, 2010, at 10:00 a.m. Pacific Time, during which the Company will discuss third quarter 2010 results and key activities. To access the conference call via a live Webcast, go to www.wcb.com and click on Investor Relations and the "3rd Quarter 2010 Earnings Conference Call" tab. The conference call may also be accessed by dialing (877) 247-4281 Conference ID#: 11014366 a few minutes prior to 10:00 a.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 Northwest bank holding company with $2.5 billion in assets and 65 offices in Oregon and Washington. The Company combines the sophisticated products and expertise of larger banks with the local decision making, market knowledge and customer service of a community bank. For more information, visit the Company's web site at 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. These statements can often be identified by words such as "expects," "believes," "anticipates," or "will," or other words of similar meaning. 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 as well as (ii) all risk factors identified in our Annual Report on Form 10-K for the year ended December 31, 2009, including under the headings "Forward Looking Statement Disclosure" and in the section "Risk Factors," and in our most recent Quarterly Report on Form 10-Q.
Table 15 |
||||||||||
INCOME STATEMENT |
||||||||||
(Dollars in thousands) |
Q3 |
Q3 |
Change |
Q2 |
Year to date |
Year to date |
||||
2010 |
2009 |
$ |
% |
2010 |
2010 |
2009 |
||||
Net interest income |
||||||||||
Interest and fees on loans |
$ 21,800 |
$ 24,535 |
$ (2,735) |
-11% |
$ 22,416 |
$ 67,059 |
$ 76,899 |
|||
Interest on investment securities |
4,160 |
3,063 |
1,097 |
36% |
4,237 |
12,604 |
8,113 |
|||
Other interest income |
93 |
127 |
(34) |
-27% |
163 |
404 |
190 |
|||
Total interest income |
26,053 |
27,725 |
(1,672) |
-6% |
26,816 |
80,067 |
85,202 |
|||
Interest expense on deposit accounts |
2,553 |
6,216 |
3,663 |
59% |
3,275 |
10,121 |
19,060 |
|||
Interest on borrowings and subordinated debentures |
1,625 |
2,364 |
739 |
31% |
4,631 |
8,528 |
6,653 |
|||
Total interest expense |
4,178 |
8,580 |
4,402 |
51% |
7,906 |
18,649 |
25,713 |
|||
Net interest income |
21,875 |
19,145 |
2,730 |
14% |
18,910 |
61,418 |
59,489 |
|||
Provision for credit losses |
1,567 |
20,300 |
18,733 |
92% |
7,758 |
16,959 |
54,824 |
|||
Noninterest income |
||||||||||
Service charges on deposit accounts |
4,145 |
4,038 |
107 |
3% |
4,213 |
11,954 |
11,976 |
|||
Payment systems related revenue |
2,998 |
2,501 |
497 |
20% |
2,875 |
8,409 |
6,997 |
|||
Trust and investment services revenues |
978 |
1,140 |
(162) |
-14% |
1,167 |
3,124 |
3,030 |
|||
Gains on sales of loans |
182 |
466 |
(284) |
-61% |
306 |
629 |
1,565 |
|||
Net OREO valuation adjustments and gains (losses) on sales |
(962) |
(3,998) |
3,036 |
76% |
(209) |
(3,229) |
(12,485) |
|||
Other |
728 |
824 |
(96) |
-12% |
785 |
2,270 |
3,553 |
|||
Other-than-temporary impairment losses |
- |
- |
- |
0% |
- |
- |
(192) |
|||
Gain on sales of securities |
- |
- |
- |
100% |
488 |
945 |
833 |
|||
Total noninterest income |
8,069 |
4,971 |
3,098 |
62% |
9,625 |
24,102 |
15,277 |
|||
Noninterest expense |
||||||||||
Salaries and employee benefits |
11,836 |
10,753 |
(1,083) |
-10% |
11,322 |
34,333 |
33,215 |
|||
Equipment |
1,525 |
1,758 |
233 |
13% |
1,606 |
4,707 |
5,500 |
|||
Occupancy |
2,216 |
2,247 |
31 |
1% |
2,249 |
6,649 |
6,908 |
|||
Payment systems related expense |
1,214 |
1,043 |
(171) |
-16% |
1,212 |
3,430 |
2,960 |
|||
Professional fees |
1,147 |
1,091 |
(56) |
-5% |
1,161 |
3,169 |
3,389 |
|||
Postage, printing and office supplies |
791 |
799 |
8 |
1% |
737 |
2,332 |
2,420 |
|||
Marketing |
861 |
832 |
(29) |
-3% |
738 |
2,286 |
2,158 |
|||
Communications |
374 |
402 |
28 |
7% |
381 |
1,137 |
1,199 |
|||
Goodwill impairment |
- |
- |
- |
0% |
- |
- |
13,059 |
|||
Other noninterest expense |
3,039 |
4,564 |
1,525 |
33% |
3,503 |
8,964 |
13,299 |
|||
Total noninterest expense |
23,003 |
23,489 |
486 |
2% |
22,909 |
67,007 |
84,107 |
|||
Net income (loss) before income taxes |
5,374 |
(19,673) |
25,047 |
127% |
(2,132) |
1,554 |
(64,165) |
|||
Provision (benefit) for income taxes |
(676) |
(7,265) |
(6,589) |
-91% |
1,717 |
241 |
(21,819) |
|||
Net income (loss) |
$ 6,050 |
$ (12,408) |
$ 18,458 |
149% |
$ (3,849) |
$ 1,313 |
$ (42,346) |
|||
Net income (loss) per share: |
||||||||||
Basic |
$ 0.06 |
$ (0.79) |
$ 0.85 |
$ (0.04) |
$ 0.01 |
$ (2.71) |
||||
Diluted |
$ 0.06 |
$ (0.79) |
$ 0.85 |
$ (0.04) |
$ 0.01 |
$ (2.71) |
||||
Weighted average common shares |
94,776 |
15,520 |
79,256 |
92,123 |
84,776 |
15,510 |
||||
Weighted average diluted shares |
103,144 |
15,520 |
87,624 |
92,123 |
101,002 |
15,510 |
||||
Tax equivalent net interest income |
$ 22,163 |
$ 19,505 |
$ 2,658 |
$ 19,205 |
$ 62,322 |
$ 60,630 |
||||
Table 16 |
|||||||
BALANCE SHEETS |
|||||||
(Dollars in thousands) |
Sept. 30, |
Sept. 30, |
June 30, |
Dec. 31, |
Dec. 31, |
||
2010 |
2009 |
2010 |
2009 |
2008 |
|||
Assets: |
|||||||
Cash and due from banks |
$ 57,216 |
$ 46,772 |
$ 45,685 |
$ 47,708 |
$ 58,046 |
||
Federal funds sold |
4,605 |
3,287 |
13,431 |
20,559 |
6,682 |
||
Interest-bearing deposits in other banks |
113,144 |
201,583 |
109,781 |
234,830 |
50 |
||
Total cash and cash equivalents |
174,965 |
251,642 |
168,897 |
303,097 |
64,778 |
||
Investment securities |
640,074 |
411,984 |
646,231 |
562,277 |
198,515 |
||
Total loans |
1,575,451 |
1,822,001 |
1,602,032 |
1,724,842 |
2,064,796 |
||
Allowance for loan losses |
(41,753) |
(39,075) |
(43,329) |
(38,490) |
(28,920) |
||
Loans, net |
1,533,698 |
1,782,926 |
1,558,703 |
1,686,352 |
2,035,876 |
||
OREO, net |
35,814 |
76,570 |
37,578 |
53,594 |
70,110 |
||
Goodwill and other intangibles |
418 |
716 |
477 |
637 |
14,054 |
||
Total interest earning assets |
2,335,882 |
2,440,506 |
2,374,787 |
2,544,415 |
2,274,448 |
||
Other assets |
101,410 |
129,519 |
93,600 |
127,590 |
132,807 |
||
Total assets |
$ 2,486,379 |
$ 2,653,357 |
$ 2,505,486 |
$ 2,733,547 |
$ 2,516,140 |
||
Liabilities and Stockholders' Equity: |
|||||||
Demand |
$ 565,543 |
$ 522,629 |
$ 533,865 |
$ 542,215 |
$ 478,292 |
||
Savings and interest-bearing demand |
442,892 |
401,256 |
433,001 |
422,838 |
346,206 |
||
Money market |
675,402 |
651,198 |
661,913 |
657,306 |
615,588 |
||
Time deposits |
291,218 |
580,743 |
375,321 |
524,525 |
584,293 |
||
Total deposits |
1,975,055 |
2,155,826 |
2,004,100 |
2,146,884 |
2,024,379 |
||
Borrowings and subordinated debentures |
215,199 |
314,299 |
215,199 |
314,299 |
274,059 |
||
Reserve for unfunded commitments |
865 |
961 |
1,018 |
928 |
1,014 |
||
Other liabilities |
20,553 |
20,588 |
17,757 |
22,378 |
18,501 |
||
Total liabilities |
2,211,672 |
2,491,674 |
2,238,074 |
2,484,489 |
2,317,953 |
||
Stockholders' equity |
274,707 |
161,683 |
267,412 |
249,058 |
198,187 |
||
Total liabilities and stockholders' equity |
$ 2,486,379 |
$ 2,653,357 |
$ 2,505,486 |
$ 2,733,547 |
$ 2,516,140 |
||
Table 17 |
|||||||
AVERAGE BALANCE SHEETS |
|||||||
(Dollars in thousands) |
QTD Sept. 30, |
QTD Sept. 30, |
QTD June 30, |
Year to date |
Year to date |
||
2010 |
2009 |
2010 |
2010 |
2009 |
|||
Cash and due from banks |
$ 50,087 |
$ 48,354 |
$ 48,232 |
$ 48,279 |
$ 46,914 |
||
Federal funds sold |
4,379 |
5,667 |
3,605 |
6,935 |
5,128 |
||
Interest-bearing deposits in other banks |
138,503 |
187,865 |
249,007 |
204,604 |
90,747 |
||
Total cash and cash equivalents |
192,969 |
241,886 |
300,844 |
259,818 |
142,789 |
||
Investment securities |
640,216 |
387,830 |
578,669 |
592,391 |
296,140 |
||
Total loans |
1,586,849 |
1,865,050 |
1,645,189 |
1,644,509 |
1,956,562 |
||
Allowance for loan losses |
(42,917) |
(39,336) |
(42,895) |
(41,934) |
(36,018) |
||
Loans, net |
1,543,932 |
1,825,714 |
1,602,294 |
1,602,575 |
1,920,544 |
||
Total interest earning assets |
2,372,072 |
2,460,793 |
2,477,349 |
2,449,722 |
2,363,608 |
||
Other assets |
125,273 |
206,485 |
158,604 |
151,134 |
212,298 |
||
Total assets |
$ 2,502,390 |
$ 2,661,915 |
$ 2,640,411 |
$ 2,605,918 |
$ 2,571,771 |
||
Demand |
$ 550,695 |
$ 508,758 |
$ 523,298 |
$ 531,276 |
$ 485,715 |
||
Savings and interest-bearing demand |
443,982 |
404,930 |
436,902 |
433,434 |
379,734 |
||
Money market |
667,150 |
635,511 |
657,454 |
655,823 |
609,830 |
||
Time deposits |
336,678 |
610,907 |
431,669 |
424,724 |
598,626 |
||
Total deposits |
1,998,505 |
2,160,106 |
2,049,323 |
2,045,257 |
2,073,905 |
||
Borrowings and subordinated debentures |
215,199 |
314,299 |
313,210 |
280,540 |
300,643 |
||
Total interest bearing liabilities |
1,663,009 |
1,965,647 |
1,839,235 |
1,794,521 |
1,888,833 |
||
Other liabilities |
17,164 |
20,035 |
17,118 |
17,839 |
17,774 |
||
Stockholders' equity |
271,522 |
167,475 |
260,760 |
262,282 |
179,449 |
||
Total liabilities and stockholders' equity |
$ 2,502,390 |
$ 2,661,915 |
$ 2,640,411 |
$ 2,605,918 |
$ 2,571,771 |
||
The following table presents information with respect to the Company's allowance for credit losses.
Table 18 |
||||
ALLOWANCE FOR CREDIT LOSSES |
||||
(Dollars in thousands) |
Year to date |
Year to date |
||
September 30, |
September 30, |
|||
2010 |
2009 |
|||
Allowance for credit losses, beginning of period |
$ 39,418 |
$ 29,934 |
||
Provision for credit losses loans other than two-step loans |
16,517 |
$ 48,607 |
||
Provision for credit losses two-step loans |
442 |
6,217 |
||
Total provision for credit losses |
16,959 |
54,824 |
||
Loan charge-offs: |
||||
Commercial |
3,961 |
8,869 |
||
Commercial real estate construction |
735 |
324 |
||
Residential real estate construction |
1,852 |
17,789 |
||
Two-step residential construction |
442 |
6,833 |
||
Total real estate construction |
3,029 |
24,946 |
||
Mortgage |
1,897 |
5,280 |
||
Nonstandard mortgage |
2,147 |
2,975 |
||
Home equity |
2,134 |
2,014 |
||
Total real estate mortgage |
6,178 |
10,269 |
||
Commercial real estate |
734 |
646 |
||
Installment and consumer |
637 |
545 |
||
Overdraft |
801 |
766 |
||
Total loan charge-offs |
15,340 |
46,041 |
||
Loan recoveries: |
||||
Commercial |
914 |
734 |
||
Commercial real estate construction |
- |
- |
||
Residential real estate construction |
315 |
- |
||
Two-step residential construction |
- |
195 |
||
Total real estate construction |
315 |
195 |
||
Mortgage |
61 |
3 |
||
Nonstandard mortgage |
4 |
1 |
||
Home equity |
25 |
1 |
||
Total real estate mortgage |
90 |
5 |
||
Commercial real estate |
25 |
147 |
||
Installment and consumer |
82 |
56 |
||
Overdraft |
155 |
182 |
||
Total loan recoveries |
1,581 |
1,319 |
||
Net charge-offs |
13,759 |
44,722 |
||
Total allowance for credit losses |
$ 42,618 |
$ 40,036 |
||
Components of allowance for credit losses: |
||||
Allowance for loan losses |
$ 41,753 |
$ 39,075 |
||
Reserve for unfunded commitments |
865 |
961 |
||
Total allowance for credit losses |
$ 42,618 |
$ 40,036 |
||
Net loan charge-offs to average loans |
1.12% |
3.06% |
||
The following table presents information about the Company's total delinquent loans.
Table 19 |
|||||
DELINQUENT LOANS 30-89 DAYS PAST DUE AS A % OF LOAN CATEGORY |
|||||
(Dollars in thousands) |
September 30, |
September 30, |
June 30, |
||
2010 |
2009 |
2010 |
|||
Commercial loans |
0.36% |
0.16% |
0.14% |
||
Real estate construction loans |
0.00% |
5.68% |
1.48% |
||
Real estate mortgage loans |
0.43% |
0.75% |
0.18% |
||
Commercial real estate loans |
0.34% |
0.14% |
0.04% |
||
Installment and other consumer loans |
0.25% |
0.09% |
1.27% |
||
Total delinquent loans 30-89 days past due |
$ 5,502 |
$ 13,136 |
$ 2,743 |
||
Delinquent loans to total loans |
0.35% |
0.72% |
0.17% |
||
The following table presents information about the Company's activity in other real estate owned.
Table 20 |
||||||||
OTHER REAL ESTATE OWNED ACTIVITY |
||||||||
(Dollars in thousands) |
||||||||
Two-step related OREO activity |
Non two-step related OREO activity |
Total OREO related activity |
||||||
Amount |
Number |
Amount |
Number |
Amount |
Number |
|||
Full year 2009: |
||||||||
Beginning balance January 1, 2009 |
$ 60,022 |
251 |
$ 10,088 |
37 |
$ 70,110 |
288 |
||
Additions to OREO |
34,724 |
114 |
39,450 |
585 |
74,174 |
699 |
||
Capitalized improvements |
4,650 |
283 |
4,933 |
|||||
Valuation adjustments |
(14,704) |
(3,858) |
(18,562) |
|||||
Disposition of OREO properties |
(59,030) |
(243) |
(18,031) |
(72) |
(77,061) |
(315) |
||
Ending balance Dec. 31, 2009 |
$ 25,662 |
122 |
$ 27,932 |
550 |
$ 53,594 |
672 |
||
Quarterly 2010 |
||||||||
Additions to OREO |
288 |
2 |
3,559 |
13 |
3,847 |
15 |
||
Capitalized improvements |
987 |
169 |
1,156 |
|||||
Valuation adjustments |
(1,846) |
(513) |
(2,359) |
|||||
Disposition of OREO properties |
(6,937) |
(27) |
(4,063) |
(64) |
(11,000) |
(91) |
||
Ending balance March 31, 2010 |
$ 18,154 |
97 |
$ 27,084 |
499 |
$ 45,238 |
596 |
||
Additions to OREO |
- |
1 |
5,924 |
19 |
5,924 |
20 |
||
Capitalized improvements |
497 |
788 |
1,285 |
|||||
Valuation adjustments |
(493) |
(764) |
(1,257) |
|||||
Disposition of OREO properties |
(5,197) |
(18) |
(8,415) |
(152) |
(13,612) |
(170) |
||
Ending balance June 30, 2010 |
$ 12,961 |
80 |
$ 24,617 |
366 |
$ 37,578 |
446 |
||
Additions to OREO |
- |
4,515 |
53 |
4,515 |
53 |
|||
Capitalized improvements |
377 |
227 |
604 |
|||||
Valuation adjustments |
(1,150) |
(361) |
(1,511) |
|||||
Disposition of OREO properties |
(1,999) |
(11) |
(3,373) |
(40) |
(5,372) |
(51) |
||
Ending balance September 30, 2010 |
$ 10,189 |
69 |
$ 25,625 |
379 |
$ 35,814 |
448 |
||
The following table presents information regarding common shares outstanding at September 30, 2010 on an actual and diluted basis.
Table 21 |
||||||
COMMON SHARE AND DILUTIVE SHARE INFORMATION |
||||||
(Shares in thousands) |
||||||
Number |
||||||
of shares |
||||||
Common shares outstanding at September 30, 2010 |
96,424 |
|||||
Common shares issuable on conversion of series B preferred stock (1) |
6,066 |
|||||
Dilutive impact of warrants (2,3) |
2,215 |
|||||
Dilutive impact of stock options and restricted stock (3) |
87 |
|||||
Total potential dilutive shares (4) |
104,792 |
|||||
(1) 121,328 shares of series B preferred stock outstanding at September 30, 2010. |
||||||
(2) Warrants to purchase 240,000 shares at a price of $100 per series B preferred share outstanding at September 30, 2010. |
||||||
(3) The estimated dilutive impact of warrants, options, and restricted stock is shown. These figures are calculated under the treasury method utilizing an average stock price of $2.45 for the period and do not reflect the number of common shares that would be issued if securities were exercised in full. |
||||||
(4) Potential dilutive shares is a non-GAAP figure and not the weighted average diluted shares calculated in accordance with GAAP. |
||||||
SOURCE West Coast Bancorp
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