Exhibit 99.1
For more information, contact:
Robert D. Sznewajs
President & CEO
(503) 598-3243
Anders Giltvedt
Executive Vice President & CFO
(503) 598-3250
WEST COAST BANCORP REPORTS RECORD SECOND QUARTER
AND SIX MONTHS EARNINGS
O EARNINGS PER DILUTED SHARE INCREASED BY 8% FOR THE FIRST SIX MONTHS OF 2004
O RETURN ON AVERAGE EQUITY EXCEEDS 15% FOR SECOND QUARTER OF 2004
O COMMERCIAL AND HOME EQUITY LOAN GROWTH OF 11% AND 26% RESPECTIVELY, FROM
JUNE 30, 2003
O THREE NEW BRANCH LOCATIONS EXPECTED TO OPEN IN VANCOUVER, PORTLAND AND SALEM
IN THE LAST HALF OF 2004
Lake Oswego, OR - July 13, 2004- West Coast Bancorp (NASDAQ: WCBO) today
announced quarterly earnings of $5.3 million or $0.34 per diluted share for the
second quarter of 2004, compared to earnings of $5.00 million or $0.32 per fully
diluted share in the second quarter of 2003. This represents a 6% increase in
net income and earnings per diluted share growth from the same quarter in 2003.
---------------------------------------------------------
Three Months Ended
June 30,
---------------------------------------------------------
(# in 000's except per share data) 2004 2003
---------------------------------------------------------
Earnings per Diluted Share $.34 $.32
---------------------------------------------------------
Net Income $5,282 $4,999
---------------------------------------------------------
Return on Average Equity 15.0% 14.8%
---------------------------------------------------------
Book Value per Share $9.38 $9.07
---------------------------------------------------------
Total Period End Loans $1,300,684 $1,211,778
---------------------------------------------------------
Total Period End Deposits $1,424,762 $1,324,562
---------------------------------------------------------
"I'm pleased to report net income of $10.5 million or $.67 per fully diluted
share for the first six months of 2004, representing an 8% increase from the
$9.7 million or $.62 per fully diluted share in the same period a year ago. In
addition, our return on average equity reached 14.9% for the first six months of
2004, as compared to 14.6% for the first six months in 2003. The Company
continues its pattern of strong growth in commercial and home equity loans",
said Robert D. Sznewajs, President and Chief Executive Officer.
"In addition, I am excited to announce two new branches which are expected to
open in the last half of 2004, along with the previously announced branch in
Vancouver, Washington. These two branches will be located in Gresham and Salem,
Oregon. Our new locations, along with existing locations, give West Coast Bank
the largest number of branches and the greatest deposit market share of any
community bank in the Portland/Vancouver and Salem market areas", said Sznewajs.
WEST COAST BANCORP REPORTS SECOND QUARTER 2004 EARNINGS
July 13, 2004
pAGE 2 OF 6
Financial Results:
Excluding commercial real estate loans, average loans for the second quarter of
2004 grew 10% over the same period a year ago (see reconciliations to GAAP
financial measure on page 6). Extending the trend and reflecting the Company's
strategy, average commercial and home equity loan balances expanded 11% and 26%,
respectively, from second quarter of 2003. Since the second quarter of 2003,
total average loans grew $82 million or 7%, while total average deposits
increased by $111 million or 9%. The Company has experienced excellent growth in
lower cost average demand and money market deposits which combined expanded $162
million or nearly 20% over the same time period in 2003.
For the quarter ended June 30, 2004, net interest income was $18.3 million, an
increase of $1.1 million compared with the second quarter of 2003. Higher
interest earning assets outstanding and an improved deposit mix contributed to
the increase in net interest income. The net interest margin declined to 4.68%
from 4.78% in the same quarter last year mainly due to lower loan yields,
particularly in the commercial real estate category.
Second quarter 2004 total non-interest income declined $.1 million from the same
period a year ago. This was due to a $.5 million or 29% reduction in gains on
sales of loans stemming from lower residential mortgage loan production.
Combined, all other fee income sources increased $.4 million or 9%, with
especially strong growth in trust, investment sales, and payment systems related
revenues, which rose 20%, 26%, and 23%, respectively.
Total non-interest expense increased $.5 million or 3% in the second quarter of
2004 from the second quarter of 2003. Personnel expense increased $.5 million
from higher salary and benefits costs, partly offset by lower commission payouts
and higher salary reimbursement related to strong loan originations in the most
recent quarter. Primarily due to branch and product expansion, equipment and
occupancy expenses increased $.2 million from the second quarter of 2003. All
other expenses declined $.2 million despite an increase of $.15 million in
expenses on foreclosed real estate properties.
Annualized net charge-offs for the second quarter 2004 were 0.18% of average
loans, compared to 0.08% in the same period last year. Net charge-offs were $.6
million in the second quarter ended June 30, 2004, up from $.3 million in the
second quarter of 2003. At June 30, 2004, the allowance for loan losses was
1.47% of total loans, unchanged from June 30, 2003. Non-performing assets at the
end of the second quarter 2004 were $6.6 million or .38% of total assets,
compared to $6.3 million or .40% at June 30, 2003. The allowance for loan losses
was 368% of total non-performing loans at June 30, 2004, versus 386% the same
time last year.
During the second quarter of 2004, and consistent with its capital plan and
pursuant to its corporate repurchase program, the Company repurchased 157,600
shares at an average cost of $21.97 per share. At June 30, 2004, approximately
1 million shares remained available for future repurchases under the program.
Other:
The Company will hold a webcast conference call Wednesday, July 14, 2004, at
8:30 a.m. Pacific Time, during which the Company will discuss second quarter
results, review its strategic progress, and provide management's current
earnings expectations for the full year 2004. To access the conference call via
a live webcast, go to www.wcb.com and click on Investor Relations/Conference
Call/West Coast Bancorp Webcast. The conference call may also be accessed by
dialing 877-604-2074 a few minutes prior to 8:30 a.m. PDT. The call will be
available for replay by accessing the Company's website at www.wcb.com and
clicking on Investor Relations/Conference Call/Archived Conference Call
(Replay).
WEST COAST BANCORP REPORTS SECOND QUARTER EARNINGS
July 13, 2004
Page 3 of 6
West Coast Bancorp is a Northwest bank holding company with $1.7 billion in
assets, operating 48 offices in Oregon and Washington. West Coast Bancorp, the
parent company of West Coast Bank and West Coast Trust, is headquartered in
Oregon. West Coast Bank 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.
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. Factors that could cause
results to differ from forward-looking statements include, among others: general
economic and banking business conditions; evolving banking industry standards;
competitive factors, including pricing pressures on Bancorp's loan yield and
rates paid on deposits; changing customer investment, deposit and lending
behaviors; changing interest rate environments, including the shape and the
level of the yield curve, that could decrease net interest income and fee
income, including lower gains on sales of loans; vendor service quality; changes
in laws and other legal developments; changes in government funding of Small
Business Administration ("SBA") loans; and changes in technology or required
investments in technology.
Furthermore, the forward-looking statements are subject to risks related to the
Company's ability to: attract and retain lending officers and other key
personnel; close loans in the pipeline; generate loan and deposit balances at
projected spreads; sustain fee generation; maintain asset quality; control the
level of net charge-offs; generate retail investments; retain customers of
greatest value; control expenses; monitor and manage the Company's internal
control environments, including disclosure and financial reporting controls, and
other matters.
Readers are cautioned not to place undue reliance on the forward-looking
statements which reflect management's analysis only as of the date of the
statements. Readers should carefully review the disclosures we file from time to
time with the Securities and Exchange Commission ("SEC"). Bancorp undertakes no
obligation to publicly review or update forward-looking statements to reflect
events or circumstances that arise after the date of this report.
FINANCIAL HIGHLIGHTS Three months ended Six months ended
(Unaudited) June 30, June 30,
(Dollars and shares in thousands) 2004 2003 2004 2003
- -------------------------------------------------------------------------------
Interest and fees on loans $19,170 $19,692 $38,106 $39,187
Interest on investment securities 3,284 2,803 6,766 5,844
Other interest income 18 28 32 40
-----------------------------------------
Total interest income 22,472 22,523 44,904 45,071
Interest expense on deposit accounts 2,636 4,006 5,387 8,193
Interest on borrowings including
subordinated debentures 1,544 1,283 2,988 2,946
-----------------------------------------
Total interest expense 4,180 5,289 8,375 11,139
-----------------------------------------
Net interest income 18,292 17,234 36,529 33,932
Provision for loan loss 1,000 850 1,900 1,700
Non-interest income
Service charges on deposit accounts 1,825 1,777 3,679 3,449
Other service charges, commissions
and fees 1,940 1,712 3,645 3,104
Trust revenues 537 445 1,037 860
Gains on sales of loans 1,117 1,572 2,030 2,714
Bank owned life insurance 188 196 411 305
Other 92 138 405 199
Gains on sales of securities 75 - 75 192
-----------------------------------------
Non-interest income 5,774 5,840 11,282 10,823
Non-interest expense
Salaries and employee benefits 8,580 8,063 17,501 15,893
Equipment 1,307 1,245 2,607 2,461
Occupancy 1,313 1,174 2,887 2,355
Check and other transaction processing 664 717 1,294 1,392
Professional fees 504 640 918 1,141
Courier and postage 473 519 939 1,028
Marketing 639 678 1,130 967
Other loan expense 578 440 767 887
Communications 277 310 567 597
Other taxes and insurance 180 181 370 363
Printing and office supplies 189 196 365 336
Other non-interest expense 597 664 1,144 1,090
-----------------------------------------
Non-interest expense 15,301 14,827 30,489 28,510
-----------------------------------------
Income before income taxes 7,765 7,397 15,422 14,545
Provision for income taxes 2,483 2,398 4,969 4,826
-----------------------------------------
Net income $5,282 $4,999 $10,453 $9,719
=========================================
Basic earnings per share $0.35 $0.33 $0.70 $0.64
Diluted earnings per share $0.34 $0.32 $0.67 $0.62
Weighted average common shares 14,890 15,076 14,917 15,111
Weighted average diluted shares 15,542 15,586 15,593 15,604
PERIOD END BALANCES Prior Qtr-to-Qtr
(Unaudited) Quarter ended Quarter ended Year-to-year Quarter ended %dchange
(000's except per share data Jun-04 Jun-03 % change Mar-04 annualized
- ------------------------------------------------------------------------------------------------------
Total assets $1,717,343 $1,593,544 7.8% $1,684,001 7.9%
Total investment securities $308,688 $253,130 21.9% $316,410 -9.8%
Total loans $1,300,684 $1,211,778 7.3% $1,260,771 12.7%
Allowance for loan losses $19,123 $17,843 7.2% $18,685 9.4%
Total deposits $1,424,762 $1,324,562 7.6% $1,380,120 12.9%
Total borrowings including
subordinated debentures $140,341 $113,072 24.1% $148,739 -22.6%
Stockholders' equity $140,334 $137,676 1.9% $143,114 -7.8%
Non-performing assets $6,583 $6,324 4.1% $5,151 111.2%
WEST COAST BANCORP (unaudited) Second Second First Year Year
(in thousands except for per share data) Quarter Quarter Quarter to date to date
(all rates have been annualized where 2004 2003 2004 2004 2003
appropriate)
- ---------------------------------------------------------------------------------------------------------
CAPITAL
- Stockholders' equity $140,334 $137,676 $143,114 $140,334 $137,676
- Shares outstanding period end 14,968 15,179 15,025 14,968 15,179
- Average stockholders' equity to ave asssets 8.30% 8.71% 8.47% 8.38% 8.73%
- Book value per common share $9.38 $9.07 $9.52 $9.38 $9.07
- Tangible book value per common share $9.33 $9.00 $9.47 $9.33 $9.00
PERFORMANCE RATIOS
- Return on average assets 1.25% 1.29% 1.25% 1.25% 1.27%
- Return on average equity 15.04% 14.76% 14.79% .92% 14.56%
- Non-interest income to average assets 1.36% 1.50% 1.33% 1.35% 1.41%
- Non-interest expense to average assets 3.62% 3.81% 3.68% 3.65% 3.73%
- Efficiency ratio, tax equivalent 62.69% 63.05% 62.86% 62.77% 62.73%
RATES
- Earned on interest-earning assets 5.73% 6.22% 5.86% 5.79% 6.33%
- Paid on interest-bearing liabilities 1.39% 1.85% 1.40% 1.39% 1.97%
- Net interest spread 4.34% 4.37% 4.46% 4.40% 4.36%
- Net interest margin 4.68% 4.78% 4.78% 4.73% 4.80%
- Tax equivalent net interest income $18,709 $17,675 $18,655 $37,364 $34,820
AVERAGE ASSETS
- Investment securities $310,021 $262,949 $317,741 $313,881 $263,431
- Commercial loans $265,072 $239,188 $246,461 $255,767 $228,162
- Real estate construction loans $122,769 $118,839 $117,368 $120,068 $117,545
- Real estate mortgage loans $191,269 $160,438 $182,234 $186,751 $156,890
- Real estate commercial loans $667,922 $642,014 $656,030 $661,976 $640,129
- Installment and other consumer loans $37,483 $41,870 $38,560 $38,022 $43,025
- Total loans $1,284,515 $1,202,349 $1,240,653 $1,262,584 $1,185,751
- Total interest earning assets $1,606,929 $1,481,671 $1,568,364 $1,587,646 $1,462,931
- Total assets $1,701,869 $1,559,660 $1,659,927 $1,681,173 $1,542,762
AVERAGE LIABILITIES
- Total demand deposits $335,647 $266,461 $300,358 $318,314 $258,112
- Total interest bearing demand,
savings, and money market $732,928 $641,650 $734,022 $733,475 $632,774
- Total certificates of deposits $332,552 $382,425 $329,418 $330,985 $376,608
- Total deposits $1,401,127 $1,290,536 $1,363,798 $1,382,774 $1,267,494
- Total borrowings including subordinated
debetures $147,943 $124,409 $141,389 $147,633 $130,800
- Total interest bearing liabilities $1,213,423 $1,148,485 $1,204,829 $1,212,093 $1,140,182
- Total liabilities $1,560,643 $1,423,791 $1,519,305 $1,540,286 $1,408,128
AVERAGE ASSET/LIABILITY RATIOS
- Average int. earning assets to
int. bearing liabilities 132.4% 129.0% 130.2% 131.0% 128.4%
- Loans to assets 75.5% 77.1% 74.7% 75.1% 76.9%
- Interest bearing deposits to assets 62.6% 65.7% 64.1% 63.3% 65.4%
ASSET QUALITY
- Non-accruing loans $5,201 $4,621 $3,560 $5,201 $4,621
- 90-day delinquencies - - $9 - -
- Total non-performing loans $5,201 $4,621 $3,569 $5,201 $4,621
- Real estate owned $1,382 $1,703 $1,582 $1,382 $1,703
- Total non-performing assets $6,583 $6,324 $5,151 $6,583 $6,324
ASSET QUALITY RATIOS
- Allowance for loan losses to total 1.47% 1.47% 1.48% 1.47% 1.47%
- Non-performing loans to total loans 0.40% 0.38% 0.28% 0.40% 0.38%
- Allowance for loan losses to Non-
performing loans 367.68% 386.07% 523.57% 367.68% 386.07%
- Non-performing assets to total assets 0.38% 0.40% 0.31% 0.38% 0.40%
- Allowance for loan losses to Non-
performing assets 290.49% 282.12% 362.76% 290.49% 282.12%
- Net loan charge-offs to average
loans (annualized) 0.18% 0.08% 0.11% 0.14% 0.12%
Trailing Four Quarters Second First Fourth Third Trailing
Financial Data and Ratios Quarter Quarter Quarter Quarter Four
(Unaudited) (dollars in thousands) 2004 2004 2003 2003 Quarters
- ---------------------------------------------------------------------------------------------------
Net income $5,282 $5,171 $5,034 $5,045 $20,532
Diluted earnings per share $0.34 $0.33 $0.32 $0.32 $1.31
Return on average assets 1.25% 1.25% 1.20% 1.24% 1.24%
Return on average equity 15.04% 14.79% 14.39% 14.59% 14.70%
Net interest margin 4.68% 4.78% 4.60% 4.63% 4.67%
Efficiency ratio, tax equivalent 62.69% 62.86% 62.60% 63.00% 62.79%
Non-interest income to Avg. Assets 1.36% 1.33% 1.30% 1.43% 1.36%
Non-interest expense to Avg. Assets 3.62% 3.68% 3.54% 3.66% 3.63%
NON GAAP FINANCIAL MEASURES BELOW
This press release includes information relating to the percentage change from
prior periods in average total loans, that is calculated on a non-GAAP basis.
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 results in light of its business
strategies.
The tables below include a reconciliation of these measures to comparable
measures calculated in accordance with GAAP.
Reconciliations to GAAP financial measures
(Unaudited) (dollars in thousands):
- -------------------------------------------
Quarter ended Quarter end Change
Jun-04 Jun-03 $ %
------------- ----------- -------- ------
Average total loans excluding
commercial real estate loans $616,593 $560,335 $56,258 10%
Average commercial real estate
loans 667,922 642,014 25,908 4%
------------ ---------- ------- -----
Average loans $1,284,515 $1,202,349 $82,166 7%
============ ========== ======== =====