Sustained by our values.

Transcription

1 2011 Annual Report

2 Sustained by our values. In today s challenging business climate, our core values sustain us. At a time when we are barraged by change rapidly evolving technology, a volatile economy, and challenges to long-held expectations we hold true to these principles: Integrity. Respect. Quality. Communication. Commitment. Since 1925, West Coast Bank has served the Northwest, helping to build businesses, homes and institutions. Serving our customers and helping them achieve their financial goals with sophisticated banking products. Over the years, West Coast Bank has been transformed through mergers, acquisitions and growth. We ve survived economic downturns and prospered in good times, enduring and evolving. And always staying true to our core values.

3 Letter to shareholders The U.S. economy appears to have stabilized in While residential property values still are declining, the downward trend clearly is slower than in previous years. Another sign of stabilization is the Pacific Northwest unemployment rate, which is showing a favorable trend for the first time in several years. The financial performance of the banking industry as a whole, as well as that of West Coast Bancorp, continued to improve in 2011 from the prior year. The Company reported a profit of $33.8 million for the year, compared to $3.2 million in The full-year earnings of 2011 reflect the reversal of the Company s deferred tax asset valuation allowance, which generated a 2011 benefit for income taxes of $20.2 million. The Company continues to reduce its level of nonperforming assets. At year-end 2011, total nonperforming assets equaled $71 million, a reduction of 29% from the prior year end. Total capital levels continue to grow and the total risk-based capital ratio reached 20.62% at the end of During 2011, the Company initiated several actions that we expect to improve our pre-tax operating results in 2012, including closing some branches, reducing staff and renegotiating contracts with vendors. We believe these actions, along with anticipated lower costs associated with nonperforming loans, will measurably reduce our operating expenses in 2012 and will position the Company favorably for the future. The Company s solid operating results are a direct result of the dedicated efforts of our people and their commitment to our customers. High quality customer service will remain the hallmark of West Coast Bancorp and its operating subsidiaries as we prepare for the future. We appreciate your ongoing trust and confidence as shareholders and customers. Yours very truly, Robert D. Sznewajs President and CEO Lloyd D. Ankeny Chairman of the Board

4 COMMERCIAL BANKING Don Wilson President Wilson Construction Wilson Construction Company President Don Wilson describes Wilson Construction Company as an electrical utility contractor. That s something of an understatement for a company with more than 500 employees, 1,200-plus pieces of equipment and clients across the U.S. Wilson Construction builds, rebuilds and maintains switch yards and substations, cross-country steel transmission towers, and overhead and underground electrical distribution systems from power sources to the meter at your home. It s an equipment-intensive business, said Wilson, and we ve grown a lot in the past few years. Our borrowing needs haven t gone up, but we ve requested some unusual letters of credit. Wilson Construction s West Coast Bank team includes vice president Mike McNulty as relationship manager, and senior vice president and commercial banking team leader Jeff Bertalotto. Wilson Construction has been a West Coast Bank customer for nine years, using services that include a business line of credit, checking and equipment financing. We previously were with a big national bank. There, we dealt with a corporate loan group, where it could take months to process a line of credit, Wilson said. What s different about the company s relationship with West Coast Bank? Wilson knows all of the West Coast Bank upper management, from the president to the loan officers. And they know us. They ve learned our business. They understand what we do. They re really flexible, and they re always looking ahead.

5 COMMERCIAL BANKING Pratum Co-op Troy Kuenzi President Pratum Co-op In 1946, farmers in the picturesque Marion County community of Pratum founded an agricultural co-op to process the premium seed that grows so well in the fertile Willamette Valley. Today, more than 50 years later, Pratum Co-op is a $65 million business with four divisions: fertilizer, chemicals, fuel and lube, and Mountain View Seeds. The co-op processes 14 million pounds of grass seed a year, with its Mountain View Seeds subsidiary shipping seed to Europe, South Africa, Israel, Japan and China, and throughout the U.S. You ll find Pratum s perennial rye grass on golf courses from Phoenix to Florida. In 2008, about the time of the economic downturn, Pratum president Troy Kuenzi found himself needing to build a new fertilizer plant. Fertilizer is corrosive, and the old plant was past its prime. Kuenzi went shopping for a $3 million loan. A lot of other banks were very skeptical, said Kuenzi, but West Coast Bank stepped up from the start, supporting the essential capital improvement even in tough times. With a strong commitment to the local agricultural community and a dedicated and knowledgeable agricultural lending team, West Coast vice president Bob Zell and senior vice president and team leader Dahr Fry worked with Kuenzi to secure the financing. Pratum cut the ribbon on its new 150,000 square foot Agronomy Center September 1, The facility stands right alongside a 1940s vintage warehouse and grain elevator that have been there since the co-op was founded. Pratum has been a West Coast Bank business customer for about 15 years. They ve always supported us, said Kuenzi. With local bankers who offer more hands-on service, West Coast has a strong commitment to agriculture and to this community, even in tough times.

6 TRUST Dennis Young Volunteer Marion-Polk Food Share Jan and Dennis Young Jan Young Volunteer Liberty Grade School When Jan and Dennis Young retired about 12 years ago, their daily routines changed, but they ve stayed just as busy. Jan Young was a registered nurse and care facility administrator before retirement, and her husband had a long career in commercial real estate. The Southern California transplants saw this new phase of their lives as an opportunity to participate in community activities that were of special interest to them. For Dennis Young, that s Marion-Polk Food Share, where he serves on the board and volunteers to help pack some of the 7.6 million pounds of food the organization processes in a year. Jan Young helps first and second grade students at Liberty Grade School learn to read. The Youngs met Tom McGirr, senior vice president and manager of West Coast Trust, at a charity event, and have served on boards with Ken Jundt, West Coast Bank coast/valley regional president. When their previous financial advisor retired, those personal relationships played a significant role in their decision to select West Coast Bank to provide trust services. I feel comfortable and secure with West Coast Trust, said Jan Young. Dennis Young adds that he particularly appreciates the depth of West Coast s investment research, and the highly educational quarterly meetings. Both are delighted to have peace of mind that their financial affairs are in good hands, allowing them time for community involvement, and an occasional round of golf together at nearby Illahe Hills Country Club.

7 WEST COAST BANK AND WEST COAST BANCORP: BOARD OF DIRECTORS Lloyd D. Ankeny Chair, Board of Directors Chair, Executive Committee Chair, Governance & Nominating Committee Chair, Risk Management Committee Personal Investments Lincoln City, Oregon David A. Dietzler Retired Partner KPMG LLP (elected 11/11, effective 1/12) Henchy R. Enden Equity Analyst MFP Investors, LLC New York, New York (elected 12/11, effective 1/12) Shmuel (Sam) Levinson Managing Director Levinson Capital Management, LLC New York, New York Duane C. McDougall Chair, Compensation & Personnel Committee Former President, CEO Willamette Industries Chairman, Boise Cascade, LLC Lake Oswego, Oregon (resigned effective 12/31/11) Steven J. Oliva President & CEO Hi-School Pharmacy, Inc. Officer, R & O Construction Real Estate Investments Vancouver, Washington John Pietrzak Principal Castle Creek Capital, LLC San Diego, California Steven N. Spence Chair, Loan, Investment & Asset/Liability Committee Spence Partners RBC Wealth Management Orcas Island, Washington Robert D. Sznewajs President & Chief Executive Officer West Coast Bancorp and West Coast Bank Lake Oswego, Oregon Dr. Nancy Wilgenbusch Chair, Audit & Compliance Committee President Emerita Marylhurst University WEST COAST BANK: OFFICERS Robert D. Sznewajs* President/Chief Executive Officer David C. Bouc* General Counsel Corporate Secretary James D. Bygland* Chief Information Officer Timothy P. Dowling Regional President Puget Sound Anders Giltvedt* Chief Financial Officer David S. Hansen Regional President Portland/Vancouver Kenneth L. Jundt Regional President Coast-Valley Xandra T. McKeown* Hadley S. Robbins* Chief Credit Officer Cynthia J. Sparacio* Human Resources and Administration Lisa K. Dow Credit Services Manager Dan Ebert Jill Faughender Human Resources Laurie Ferris Compensation and Benefits Dahr Fry Agricultural Banking David Green Coast District Manager Ann Higgins Retail Operations Don Kasinger Retail and Real Estate Lending Michael Kiyokawa Regional Credit Administrator David B. Martz Finance Steven J. Ryan Gregory B. Schumacher Corporate Risk Cara Thompson Corporate Compliance Richard M. Virkelyst Credit Review John Vogel Asset and Liability Investment Randal Wilhelmsen Investment Program Kenneth Wise Regional Credit Administrator *Also West Coast Bancorp Officers WEST COAST TRUST: BOARD OF DIRECTORS Dr. Nancy Wilgenbusch Chair, Trust Board President Emerita Marylhurst University Sandra C. Mico President West Coast Trust William R. Trout Chief Investment Officer West Coast Trust David Truitt Vice President, Owner Truitt Brothers, Inc. Salem, Oregon Jeffery A. Bertalotto Gerald Burns Government Guaranteed Lending Gary E. DesRochers Bob Dickie Regional Credit Administrator Kevin M. McClung* Controller Laura McKay Treasury Management Kristie L. Nockleby Sales Administration and Marketing Hugh Ross Regional Credit Administrator Steven J. Oliva President and CEO Hi-School Pharmacy, Inc. Officer, R & O Construction Real Estate Investments Vancouver, Washington WEST COAST TRUST: MANAGEMENT TEAM Sandra C. Mico President West Coast Trust B. Edward Duvall Vice President Trust Administration William R. Trout Chief Investment Officer David P. Bell Chief Operating Officer Tom McGirr Trust Team Leader

8 OREGON BRANCHES Airport Way and 122nd 5083 NE 122nd Avenue Hillsboro 310 SE Washington Street Hillsboro, Oregon Newberg 3500 Portland Road Newberg, Oregon Silverton 315 E Main Street Silverton, Oregon Beaverton 3600 SW Cedar Hills Boulevard Beaverton, Oregon Keizer 4260 River Road N Keizer, Oregon Newport Downtown 506 SW Coast Highway Newport, Oregon Stayton 1800 Wilco Road Stayton, Oregon Canby 1455 SE First Avenue Canby, Oregon Clackamas SE 82nd Avenue Cornelius Pass NW Imbrie Drive Hillsboro, Oregon Dallas 150 W Ellendale Dallas, Oregon Depoe Bay 541 NW Highway 101 Depoe Bay, Oregon Dundee 1410 N Highway 99 Dundee, Oregon Eugene North 1005 Green Acres Road Suite 101 Eugene, Oregon Eugene West 874 Seneca Road Eugene, Oregon Forest Grove 4110 Pacific Avenue Forest Grove, Oregon Gresham 473 NW Burnside Road Gresham, Oregon Happy Valley SE Happy Valley Town Center Drive Happy Valley, Oregon Keizer (Located in Willamette Lutheran) 7693 Wheatland Road N Keizer, Oregon Keizer (Located in Avamere Retirement Center) 5210 River Road N Keizer, Oregon King City SW Royalty Parkway King City, Oregon Lake Oswego 5000 Meadows Road, Suite 100 Lake Oswego, Oregon Lincoln City 4157 N Highway 101, Suite 135 Lincoln City, Oregon MLK and Main 1234 SE Martin Luther King Jr. Boulevard Mt. Angel 160 East Charles Street Mt. Angel, Oregon McMinnville 2214 McDonald Lane McMinnville, Oregon Molalla 401 E Main Street Molalla, Oregon Monmouth 200 E Main Street Monmouth, Oregon Newport North 2350 N Coast Highway Newport, Oregon North Plains NW Glencoe Road Suite A North Plains, Oregon Oregon City Molalla Avenue, Suite 139 Oregon City, Oregon Pearl District 1207 NW Glisan Portland Downtown 1000 SW Broadway, Suite Raleigh Hills 4805 SW 77th Avenue Salem Battle Creek 5686 Commercial Street SE Suite 110 Salem, Oregon Salem Downtown 550 Center Street NE Salem, Oregon Salem East 510 Lancaster Drive NE Salem, Oregon Salem South 3305 Commercial Street SE Salem, Oregon Salem West 1060 Wallace Road NW Salem, Oregon Sublimity (Located in Marian Estates) 390 Church Street SE Sublimity, Oregon Tigard SW Pacific Highway Tigard, Oregon Tualatin-Sherwood 8805 SW Tualatin-Sherwood Road Tualatin, Oregon Waldport 425 NW Hemlock Waldport, Oregon Wilsonville SW Town Center Loop West Wilsonville, Oregon Woodburn (Located in Country Meadows Village) 155 S Evergreen Woodburn, Oregon Woodburn East 1755 Mt. Hood Avenue Suite 120 Woodburn, Oregon Woodburn West 2540 Newberg Highway Woodburn, Oregon WASHINGTON BRANCHES Centralia 1100 Harrison Avenue Centralia, Washington Chehalis 290 NW Chehalis Avenue Chehalis, Washington Hawks Prairie 8140 Freedom Lane, Bldg. E Suite A Lacey, Washington Hoodsport N Highway 101 Hoodsport, Washington Lacey 665 Woodland Square Loop SE Lacey, Washington Olympia Downtown 303 Union Avenue SE Olympia, Washington Olympia West 2850 Harrison Avenue NW Olympia, Washington Orchards 7500 NE 117th Avenue Vancouver, Washington Shelton 2307 Olympic Highway N Shelton, Washington Tacoma Commercial Loan Office 717 Pacific Avenue Tacoma, Washington Vancouver Main 500 E Broadway, Suite 100 Vancouver, Washington Salmon Creek NE Highway 99 Suite 106 Vancouver, Washington Tukwila 400 Industry Drive, Suite 110 Tukwila, Washington

9 WEST COAST TRUST West Coast Trust services are available by appointment at all West Coast Bank branches. MAIN OFFICES: Salem 301 Church Street NE Salem, Oregon Portland 1000 SW Broadway, Suite Vancouver 500 E Broadway, Suite 100 Vancouver, Washington Toll free GOVERNMENT GUARANTEED LENDING GROUP 500 E Broadway, Suite 380 Vancouver, Washington Toll free WEST COAST INVESTMENT CENTER Investment Center services are available by appointment at all West Coast Bank branches. To place trades or to contact an Investment Representative near you, call toll free Securities provided by PrimeVest Financial Services, Inc., an independent registered broker/dealer. Member SIPC/NASD. Not FDIC insured; no bank guarantee; may lose value. WEST COAST BANCORP Corporate Office 5335 Meadows Road, Suite 201 Lake Oswego, Oregon Fax Human Resources 550 Center Street NE Salem, Oregon wcb.com NASDAQ: WCBO