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 FIRST QUARTER 2005 OPERATING EARNINGS
O OPERATING EARNINGS CONTINUE TO MEET ANALYST EXPECTATIONS
O OVER 15% GROWTH IN OPERATING EARNINGS PER DILUTED SHARE IN FIRST QUARTER 2005
O COMMERCIAL LOAN GROWTH OF 39% FROM MARCH 31, 2004 O CREDIT QUALITY REMAINS
SOLID
Lake Oswego, OR - April 19, 2005 - West Coast Bancorp (NASDAQ: WCBO) today
announced record quarterly operating earnings of $5.8 million or $0.38 per
diluted share for the first quarter of 2005, compared to operating earnings of
$5.2 million or $0.33 per diluted share in the first quarter of 2004.* This
represents more than a 15% increase in operating earnings per diluted share from
the same quarter in 2004. Net income was $5.0 million or $0.33 per diluted share
for the first quarter of 2005, compared to net income of $5.2 million or $0.33
per diluted share in the first quarter of 2004.
Operating earnings is a non-GAAP (Generally Accepted Accounting Principles)
financial measure that is derived by adjusting the Company's net income to
exclude the April 4, 2005, announced first quarter recording of an
other-than-temporary, non-cash impairment charge of approximately $.8 million
after tax or $.05 per diluted share related to its $5 million investment in
Freddie Mac preferred stock. This security, which was purchased in November
1999, resets its coupon to the five-year treasury note rate every five years.
The following table reconciles net income to operating earnings, including
per-share figures:
(Dollars in thousands, except per share data) Three months ended March 31,
- --------------------------------------------- ----------------------------
2005 2004
---------- ---------
Net income $ 5,030 $ 5,171
Add back: Impairment charge on
securities,
net of tax 803 --
---------- ---------
Operating earnings $ 5,833 $ 5,171
========== =========
Earnings per Diluted Share
Net income $ 0.33 $ 0.33
Operating earnings $ 0.38 $ 0.33
Return on Average Equity
Net income 13.8% 14.8%
Operating earnings 16.0% 14.8%
$ 9.97 $ 9.52
Book Value per Share
$1,432,446 $1,260,771
Total Period End Loans
$1,509,288 $1,380,120
Total Period End Deposits
*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 earnings as compared to prior periods.
WEST COAST BANCORP REPORTS FIRST QUARTER 2005 EARNINGS
APRIL 19, 2005
Page 2 of 7
"The Company's record operating earnings for the first quarter of 2005 continue
to meet analyst consensus expectations consistent with the trend of the past
several years," said Robert D. Sznewajs, President and CEO. "Strong
year-over-year loan and deposit growth, combined with an improving net interest
margin and solid credit quality contributed to the record operating earnings
performance for the quarter."
Financial Results:
Resulting from the Company's strategy, sales efforts, and the loan purchase from
Washington Mutual in the fourth quarter of 2004, period end total loans
increased 14% over the same period last year. Commercial loan balances expanded
39% from March 31, 2004. Excluding commercial real estate loans, period end
loans grew a solid 22% since March 31, 2004. (See reconciliation to GAAP
financial measures, page 5.)
First quarter 2005 total average loans climbed $182 million or nearly 15%
compared to the first quarter of 2004, and total average deposits increased by
$118 million or almost 9% over the same time period. The Company generated
excellent growth in average non-interest bearing demand deposits, which in the
most recent quarter grew $78 million or over 25% since the same quarter last
year.
For the quarter ended March 31, 2005, net interest income was $19.9 million, an
increase of 9% or $1.6 million compared with the first quarter of 2004. Higher
loan balances outstanding, augmented by improved earning asset and deposit
mixes, contributed to the higher net interest income. The net interest margin
widened slightly to 4.84% from 4.78% in the first quarter of 2004, mainly due to
a shift in earning asset mix towards loans and higher loan volume indexed to the
prime rate.
With net loan recovery and stable asset quality measures, there was no provision
for loan losses in the first quarter 2005 compared to $.9 million the same
quarter last year.
First quarter 2005 total non-interest income of $5.6 million, excluding the
before mentioned impairment charge, increased 1% or $.1 million from the same
quarter last year. (See reconciliation to GAAP financial measures, page 5.)
Strong growth in payment system, merchant bankcard, trust, and investment sales
revenues, which increased a combined $.5 million from the same quarter last
year, offset the 25% or $.2 million decline in gain on sales of mortgages and
the $.3 million decline in other non-interest income from the same quarter of
2004.
Total non-interest expense increased $1.5 million or 10% in the first quarter of
2005 from the same quarter in 2004. Personnel expense grew $0.8 million, with
substantially all of the increase caused by three branch openings in
Portland-Vancouver, plus one in Bend and one in Salem, and the hiring of
additional commercial lenders. The remaining non-interest expense growth was
concentrated in legal and accounting fees, which increased a combined $.7
million from first quarter 2004.
Annualized net recoveries were 0.01% of average loans in the first quarter 2005,
down from annualized net charge-offs of 0.11% in the same period a year ago. At
March 31, 2005, the allowance for loan losses was 1.33% of total loans compared
to 1.48% for the same time last year. Non-performing assets at March 31, 2005,
were $4.4 million or 0.24% of total assets, down from $5.2 million or 0.31% a
year ago. The allowance for loan losses was 434% of total non-performing assets
at March 31, 2005, versus 363% at the same time last year.
During the first quarter of 2005, consistent with its capital plan, the Company
repurchased approximately 146,000 shares at an average cost of $24.05 per share.
At March 31, 2005, approximately 691,000 shares remained available for future
repurchases under its corporate repurchase program.
Other:
The Company will hold a webcast conference call Wednesday, April 20, 2005, at
8:30 a.m. Pacific Time, during which the Company will discuss first quarter 2005
results, review its strategic progress, and provide management's current
earnings expectations for the full year 2005. 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.
WEST COAST BANCORP REPORTS FIRST QUARTER 2005 EARNINGS
APRIL 19, 2005
Page 3 of 7
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 is a Northwest bank holding company with $1.8 billion in
assets, operating 52 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, which 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; create revenue growth from investments in new team members and
branches, 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.
WEST COAST BANCORP REPORTS FIRST QUARTER 2005 EARNINGS
APRIL 19, 2005
Page 4 of 7
West Coast Bancorp
Consolidated Income Statements
---------------------------------------------------------
Three months ended Twelve months ended
(Unaudited) ---------------------------------------------------------
(Dollars and shares in thousands) March 31, December 31, December 31,
- ----------------------------------- 2005 2004 2004 2004 2003
-------- -------- -------- -------- --------
Net interest income
Interest and fees on loans $ 22,471 $ 18,936 $ 21,710 $ 79,903 $ 77,321
Interest on investment securities 2,692 3,482 2,926 12,889 12,148
Other interest income 39 14 75 196 209
-------- -------- -------- -------- --------
Total interest income 25,202 22,432 24,711 92,988 89,678
Interest expense on deposit accounts 3,761 2,751 3,093 11,214 15,131
Interest on borrowings including subordinated debentures 1,567 1,444 2,136 6,901 5,508
-------- -------- -------- -------- --------
Total interest expense 5,328 4,195 5,229 18,115 20,639
-------- -------- -------- -------- --------
Net interest income 19,874 18,237 19,482 74,873 69,039
Provision for loan loss -- 900 135 2,260 3,800
Non-interest income
Service charges on deposit accounts 1,891 1,855 1,861 7,474 6,960
Other service charges, commissions and fees 2,085 1,706 1,929 7,515 6,577
Trust revenues 567 500 602 2,184 1,776
Gains on sales of loans 775 913 913 3,906 5,124
Other 270 534 292 1,404 1,417
Loss on impairment of securities (1,316) -- -- -- --
Gains (losses) on sales of securities -- -- (95) (20) 192
-------- -------- -------- -------- --------
Total non-interest income 4,272 5,508 5,502 22,463 22,046
Non-interest expense
Salaries and employee benefits 9,674 8,920 9,352 36,297 32,487
Equipment 1,253 1,301 1,457 5,442 5,139
Occupancy 1,539 1,573 1,368 5,722 4,901
Check and other transaction processing 758 629 719 2,671 2,778
Professional fees 1,099 414 883 2,314 2,314
Postage, printing and office supplies 629 642 667 2,616 2,590
Marketing 601 492 638 2,402 2,047
Communications 272 290 314 1,182 1,166
Other non-interest expense 849 927 1,342 4,725 4,728
-------- -------- -------- -------- --------
Total non-interest expense 16,674 15,188 16,740 63,371 58,150
-------- -------- -------- -------- --------
Income before income taxes 7,472 7,657 8,109 31,705 29,135
Provision for income taxes 2,442 2,486 2,266 9,697 9,338
-------- -------- -------- -------- --------
Net income $ 5,030 $ 5,171 $ 5,843 $ 22,008 $ 19,797
======== ======== ======== ======== =========
Basic earnings per share $ 0.34 $ 0.35 $ 0.40 $ 1.48 $ 1.31
Diluted earnings per share $ 0.33 $ 0.33 $ 0.38 $ 1.42 $ 1.26
Weighted average common shares 14,726 14,943 14,768 14,849 15,077
Weighted average diluted shares 15,422 15,642 15,476 15,526 15,674
Tax equivalent net interest income $ 20,238 $ 18,655 $ 19,887 $ 76,526 $ 70,793
WEST COAST BANCORP REPORTS FIRST QUARTER 2005 EARNINGS
APRIL 19, 2005
Page 5 of 7
West Coast Bancorp
Consolidated Balance Sheets
---------------------------
March 31, March 31, December 31,
(Dollars and shares in thousands, unaudited) 2005 2004 2004
- -------------------------------------------- ---------- ---------- ----------
Assets:
Cash and cash equivalents 58,968 51,382 40,854
Investments 258,181 316,410 266,262
Total loans 1,432,446 1,260,771 1,427,994
Allowance for loan losses (18,997) (18,685) (18,971)
Loans, net
Other assets 1,413,449 1,242,086 1,409,023
75,704 74,123 74,780
---------- ---------- ----------
Total assets $1,806,302 $1,684,001 $1,790,919
========== ========== ==========
Liabilities and Stockholders' Equity:
Demand $ 395,323 $ 325,513 $ 391,746
Savings and interest bearing demand 758,783 734,337 738,402
Certificates of deposits 355,182 320,270 342,561
---------- ---------- ----------
Total deposits 1,509,288 1,380,120 1,472,709
Borrowings and subordinated debentures 135,142 148,739 153,282
Other liabilities 14,528 12,028 17,074
---------- ---------- ----------
Total liabilities 1,658,958 1,540,887 1,643,065
Stockholders' equity 147,344 143,114 147,854
---------- ---------- ----------
Total liabilities and stockholders' equity $1,806,302 $1,684,001 $1,790,919
========== ========== ==========
Common shares outstanding period end 14,775 15,025 14,872
Book value per common share $ 9.97 $ 9.52 $ 9.94
Tangible book value per common share $ 9.94 $ 9.47 $ 9.91
West Coast Bancorp
Period End Loan Portfolio By Category
March 31, March 31, Change December 31,
(Dollars in thousands unaudited) 2005 2004 Amount % 2004
---------- ---------- ---------- --- ----------
Commercial loans $ 357,505 256,989 100,516 39% 357,776
Real estate construction loans 125,959 120,253 5,706 5% 116,974
Real estate mortgage loans 215,580 185,656 29,924 16% 212,959
Real estate commercial loans 698,864 660,065 38,799 6% 704,390
Installment and other consumer loans 34,538 37,808 (3,270) -9% 35,895
---------- ---------- ---------- --- ----------
Total loans $1,432,446 $1,260,771 $ 171,675 14% $1,427,994
========== ========== ========== === ==========
(Reconciliation to GAAP financial measures)*
Total loans excluding real estate commercial loans 733,582 600,706 132,876 22% 723,604
Real estate commercial loans 698,864 660,065 38,799 6% 704,390
---------- ---------- ---------- ---
Total loans $1,432,446 1,260,771 171,675 14% $1,427,994
========== ========== ========== === ==========
Total non-interest income $ 4,272 $ 5,508 $ (1,236) -22% $ 5,502
Add back: Impairment charge on securities, pre-tax 1,316 -- 1,316 --
Total operating non-interest income $ 5,588 $ 5,508 $ 80 1% $ 5,502
========== ========== ========== === ==========
*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.
WEST COAST BANCORP REPORTS FIRST QUARTER 2005 EARNINGS
APRIL 19, 2005
Page 6 of 7
West Coast Bancorp
Financial Information
--------------------------------------------------------------
First First Fourth
(Dollars in thousands except for per share data, audited) Quarter Quarter Quarter Full year Full year
(all rates have been annualized where appropriate) 2005 2004 2004 2004 2003
- --------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
PERFORMANCE RATIOS
- Return on average assets 1.14% 1.25% 1.31% 1.28% 1.24%
- Return on average common equity 13.78% 14.79% 15.90% 15.45% 14.52%
- Non-interest income to average assets 0.97% 1.33% 1.23% 1.31% 1.39%
- Non-interest expense to average assets 3.77% 3.68% 3.75% 3.69% 3.66%
- Efficiency ratio, tax equivalent 64.6% 62.9% 65.7% 64.0% 62.8%
NET INTEREST MARGIN
- Yield on interest-earning assets 6.12% 5.86% 5.95% 5.84% 6.08%
- Rate on interest-bearing liabilities 1.73% 1.40% 1.71% 1.50% 1.78%
- Net interest spread 4.39% 4.46% 4.24% 4.34% 4.29%
- Net interest margin 4.84% 4.78% 4.71% 4.72% 4.70%
AVERAGE ASSETS
- Investment securities $ 264,062 $ 317,741 $ 283,748 $ 302,200 $ 280,028
- Commercial loans $ 352,067 $ 246,461 $ 321,152 $ 277,882 $ 234,720
- Real estate construction loans 118,194 117,368 112,230 117,413 116,820
- Real estate mortgage loans 213,969 182,234 210,072 196,698 163,505
- Real estate commercial loans 702,705 656,030 695,326 672,295 640,349
- Installment and other consumer loans 35,359 38,560 36,637 37,159 41,568
========== ========== ========== ========== ==========
- Total loans $1,422,294 $1,240,653 $1,375,419 $1,301,447 $1,196,962
- Total interest earning assets $1,695,109 $1,568,364 $1,679,300 $1,621,683 $1,504,949
- Other assets 99,299 91,563 98,445 95,999 85,293
========== ========== ========== ========== ==========
- Total assets $1,794,408 $1,659,927 $1,777,745 $1,717,682 $1,590,242
AVERAGE LIABILITIES & EQUITY
- Demand deposits $ 378,054 $ 300,358 $ 396,102 $ 351,432 $ 283,504
- Interest bearing demand,
savings, and money market 755,550 734,022 745,705 737,409 669,689
- Certificates of deposits 347,852 329,418 343,068 336,623 371,534
========== ========== ========== ========== ==========
- Total deposits $1,481,456 $1,363,798 $1,484,875 $1,425,464 $1,324,727
- Borrowings and subordinated debentures $ 148,118 $ 141,389 $ 130,244 $ 136,259 $ 117,533
- Total interest bearing liabilities $1,251,519 $1,204,829 $1,219,017 $1,210,290 $1,158,755
- Other liabilities 394,842 314,476 412,484 364,965 295,170
========== ========== ========== ========== ==========
- Total liabilities $1,646,361 $1,519,305 $1,631,501 $1,575,255 $1,453,925
- Average common equity 148,047 140,622 146,244 142,427 136,317
========== ========== ========== ========== ==========
- Total average liabilities and common equity $1,794,408 $1,659,927 $1,777,745 $1,717,682 $1,590,242
AVERAGE ASSET/LIABILITY RATIOS
- Average stockholders' equity to average assets 8.25% 8.47% 8.23% 8.29% 8.57%
- Average int. earning assets to int. bearing liabilities 135.4% 130.2% 137.8% 134.0% 129.9%
- Average loans to average assets 79.3% 74.7% 77.4% 75.8% 75.3%
- Interest bearing deposits to assets 61.5% 64.1% 61.2% 62.5% 65.5%
WEST COAST BANCORP REPORTS FIRST QUARTER 2005 EARNINGS
APRIL 19, 2005
Page 7 of 7
West Coast Bancorp
Allowance For Loan Losses and Net Charge-offs
---------------------------------------------
Quarter ended Quarter ended Quarter ended
March 31, March 31, December 31,
(Dollars in thousands, unaudited) 2005 2004 2004
- --------------------------------- ------- ------- -------
Allowance for loan losses, beginning of period $18,971 $18,131 $19,421
Provision for loan loss -- 900 135
Charge-offs 195 570 784
Recoveries 221 224 199
------- ------- -------
Net (recoveries) charge-offs (26) 346 585
------- ------- -------
Total allowance for loan losses $18,997 $18,685 $18,971
======= ======= =======
Net loan charge-offs to average loans (annualized) -0.01% 0.11% 0.17%
Full year Full year
December 31, December 31,
(Dollars in thousands, unaudited) 2004 2003
- --------------------------------- ------- -------
Allowance for loan losses, beginning of period $18,131 $ 16,838
Provision for loan loss 2,260 3,800
Charge-offs 2,374 3,098
Recoveries 954 591
------- -------
Net Charge-offs 1,420 2,507
------- -------
Total allowance for loan losses $18,971 $18,131
======= =======
Net loan charge-offs to average loans 0.11% 0.21%
West Coast Bancorp
Non-performing Assets
---------------------
March 31, March 31, December 31,
(Dollars in thousands, unaudited) 2005 2004 2004
- --------------------------------- ------- ------- -------
Non-accruing loans $ 3,695 $ 3,560 $ 1,803
90 day delinquencies 301 9 -
------- ------- -------
Total non-performing loans 3,996 3,569 1,803
Other real estate owned 384 1,582 384
------- ------- -------
Total non-performing assets $ 4,380 $ 5,151 $ 2,187
======= ======= =======
Allowance for loan losses to total loans 1.33% 1.48% 1.33%
Non-performing loans to total loans 0.28% 0.28% 0.13%
Allowance for loan losses to non-performing loans 475% 524% 1052%
Non-performing assets to total assets 0.24% 0.31% 0.12%
Allowance for loan losses to non-performing assets 434% 363% 867%