West Coast Community Bancorp Announces Earnings and Dividend for the Fourth Quarter of 2025
SANTA CRUZ, Calif., Jan. 27, 2026 /PRNewswire/ -- West Coast Community Bancorp ((", Bancorp, ", OTCQX:WCCB), the parent company of West Coast Community Bank (the "Bank"), announced unaudited earnings for the quarter ended December 31, 2025 of $13.8 million, compared to $12.1 million in the prior quarter and an increase of $9.9 million, or 258.6%, from $3.8 million reported for the quarter ended December 31, 2024. Earnings for the year ended December 31, 2025 were $50.4 million, an increase of $20.9 million, or 70.5%, from $29.6 million reported for 2024. The year-over-year increase in earnings was largely driven by the merger with 1st Capital Bancorp that closed on October 1, 2024 (the "Merger"), reflecting a full year of merged operations, as well as a reduction in one-time merger-related expenses. Basic and diluted earnings per share ("EPS") for the quarter ended December 31, 2025, were $1.32 and $1.31, respectively, compared to $1.15 and $1.14 in the third quarter of 2025. Basic and diluted EPS increased $0.95 and $0.95, or 256.9% and 262.8%, respectively, from the same quarter last year. For the year ended December 31, 2025, basic and diluted EPS were $4.81 and $4.76, respectively, representing an increase of $1.49 and $1.48, or 44.8% and 45.0%, respectively, from 2024. The year-over-year increase in EPS was largely driven by the Merger, reflecting a full year of merged operations, as well as a reduction in one-time merger-related expenses.On January 22, 2026, the Bancorp Board of Directors declared a $0.01 increase in quarterly cash dividend to $0.23 per common share, payable on February 17, 2026, to shareholders of record at the close of business on February 10, 2026."Our strong fourth‐quarter and full‐year results underscore the continued momentum of our franchise and the disciplined execution of our strategic priorities throughout 2025," said Krista Snelling, Chairman and Chief Executive Officer of West Coast Community Bancorp. "In 2025, we expanded our assets by 7.6% to $2.9 billion and delivered record annual net income of $50.4 million through meaningful organic loan growth, sustained strength in our deposit base, successful integration of our merger activities earlier in the year and improved returns on both average assets and equity."The Board's decision to increase our quarterly dividend again reflects the strength of our capital position, the consistency of our earnings performance and our confidence in the long‐term outlook for the Bank," added Snelling. "We remain committed to balancing disciplined growth with prudent capital management and returning value to our shareholders continues to be a key priority."Financial HighlightsPerformance highlights as of and for the quarter and year ended December 31, 2025, include the following:Total deposits were $2.5 billion at December 31, 2025, which increased $41.0 million, or 1.7%, from September 30, 2025, and increased $166.6 million, or 7.2%, from December 31, 2024. The increase from September 30, 2025, is attributed to the seasonal inflows of deposits from large nonprofit organizations which brought in $60.8 million in new deposits in the fourth quarter. The increase from December 31, 2024, was driven by new banking relationships, which generated $134.0 million in new deposits by the end of 2025.Total loans were $2.2 billion at December 31, 2025, representing an increase of $45.3 million, or 2.1%, from September 30, 2025, and increased $127.2 million, or 6.2%, from December 31, 2024. Loan growth during the fourth quarter of 2025 occurred in revolving and asset-based lines of credit. In addition, we originated new loan commitments of $186.5 million during the fourth quarter of 2025. Growth in the fourth quarter was highest in Santa Cruz and Santa Clara counties, where $71.0 million and $48.6 million in new loan commitments were originated, respectively. Loan commitment growth in Santa Cruz and Santa Clara counties for 2025 was $187.6 million and $152.8.0 million, respectively. During 2025, we originated a total of $534.0 million in new loan commitments.Net income for the quarter ended December 31, 2025, increased $1.7 million, or 14.2%, from the third quarter of 2025 due to a $2.0 million decrease in the provision for credit losses, which was largely attributed to provisions for individually evaluated loans that were recorded in the third quarter of 2025. The increase of $9.9 million in net income over the quarter ended December 31, 2024, was mainly due to the Merger, organic growth, a reduction in merger-related expenses and the absence of the initial provision for credit losses associated with acquired loans recorded in the fourth quarter of 2024.Total assets were $2.9 billion at December 31, 2025, an increase from $2.8 billion at September 30, 2025, and $2.7 billion at December 31, 2024. The increase of $45.5 million, or 1.6%, over September 30, 2025, was primarily due to a $45.3 million increase in loans held for investment and a $47.3 million increase in cash and cash equivalents, partially offset by a decrease in available-for-sale ("AFS") debt securities of $43.4 million. The increase of $203.3 million, or 7.6%, over December 31, 2024, was largely the result of a $127.2 million increase in loans held for investment and a $106.0 million increase in cash and cash equivalents.Primary liquidity ratio, defined as cash and cash equivalents, deposits held in other banks and unpledged AFS securities as a percentage of total assets was 15.9%, 16.5% and 14.4% at December 31, 2025, September 30, 2025, and December 31, 2024, respectively.Taxable equivalent net interest margin was 4.99%, 5.28% and 5.38% for the quarters ended December 31, 2025, September 30, 2025, and December 31, 2024, respectively. The quarter-over-quarter decrease in the net interest margin is largely attributed to accelerated accretion of purchase discounts associated with the partial early redemption of $4.3 million of subordinated debt assumed in the Merger, accounting for approximately 12 basis points of the quarter-over-quarter decrease. Taxable equivalent net interest margin for the years ended December 31, 2025, and 2024 was 5.21% and 5.09%, respectively. The taxable equivalent net interest margin excluding the purchase discount accretion on the acquired loan portfolio and accelerated accretion on discount of partially redeemed subordinated debt (non-GAAP1) for the quarters ended December 31, 2025, and September 30, 2025, was 4.80% and 4.93%, respectively, and 4.87% and 4.88% for the years ended December 31, 2025, and 2024, respectively.The cost of funds was 1.46% in the fourth quarter of 2025 compared to 1.37% in the prior quarter and 1.37% in the fourth quarter of 2024. The cost of funds for the years ended December 31, 2025, and 2024 was 1.39% and 1.45%, respectively. The accelerated accretion of purchase discounts associated with the partial early redemption of subordinated debentures assumed in the Merger, which is discussed below, was unfavorable to the cost of funds by approximately 14 basis points during the fourth quarter of 2025. The decrease in the cost of funds for all of 2025 as compared to 2024 can be attributed in large part to higher average balances of noninterest-bearing deposits as a percentage of total average deposits throughout 2025, as well as discretionary rate cuts on money market deposit accounts during 2025 responding to the three 25 basis point interest rate cuts by the Federal Open Market Committee ("FOMC") in late 2025. For the years ended December 31, 2025 and 2024, average noninterest-bearing deposits as a percentage of total average deposits were 42.2% and 39.7%, respectively.For the quarters ended December 31, 2025, September 30, 2025, and December 31, 2024, return on average assets ("ROAA") was 1.88%, 1.73% and 0.57%, respectively, return on average equity ("ROAE") was 14.55%, 13.16% and 4.55%, respectively, and return on average tangible equity ("ROATE") was 18.46%, 17.05% and 6.85%, respectively. Excluding merger-related items and accelerated accretion on the partial early redemption of subordinated debentures for the quarters ended December 31, 2025, September 30, 2025, and December 31, 2024, adjusted ROAA (non-GAAP1) was 1.98%, 1.74% and 2.08%, respectively, adjusted ROAE (non-GAAP1) was 15.34%, 13.27% and 16.65%, respectively, and adjusted ROATE (non-GAAP1) was 19.41%, 17.20% and 22.07%, respectively.For the years ended December 31, 2025, and 2024, ROAA was 1.84% and 1.50%, respectively, ROAE was 14.06% and 11.11%, respectively, and ROATE was 18.25% and 13.35%, respectively. Excluding merger-related items and accelerated accretion on the partial early redemption of subordinated debentures for the years ended December 31, 2025, and 2024, adjusted ROAA (non-GAAP1) was 1.89% and 2.05%, respectively, adjusted ROAE (non-GAAP1) was 14.46% and 15.22%, respectively, and adjusted ROATE (non-GAAP1) was 18.73% and 18.14%, respectively.The efficiency ratio was 44.12% for the fourth quarter of 2025 compared to 43.13% in the prior quarter and 61.62% in the fourth quarter of 2024. The efficiency ratio for the years ended December 31, 2025, and 2024 was 44.69% and 50.62%, respectively. Excluding merger-related items and accelerated accretion on the partial early redemption of subordinated debentures, the adjusted efficiency ratio (non-GAAP1) was 42.54% for the fourth quarter of 2025, 42.71% for the third quarter of 2025 and 43.05% for the fourth quarter of 2024. The adjusted efficiency ratio (non-GAAP1) was 43.77% and 43.29% for the years ended December 31, 2025, and 2024, respectively.All capital ratios were above regulatory requirements for a well-capitalized institution with a total risk-based capital ratio of 14.46%, 14.65% and 14.00% at December 31, 2025, September 30, 2025, and December 31, 2024, respectively. Tangible common equity to tangible asset ratio was 11.10%, 10.95% and 10.14% at December 31, 2025, September 30, 2025, and December 31, 2024, respectively.Tangible book value per share was $29.85 at December 31, 2025, compared to $28.81 at September 30, 2025, and $25.09 at December 31, 2024. The increase in the fourth quarter of 2025 was driven by net income of $13.8 million combined with a decrease in the unrealized losses on the AFS debt securities portfolio.Merger with 1st Capital BancorpThe merger between West Coast Community Bancorp and 1st Capital Bancorp closed on October 1, 2024, with the core system conversion completed in December 2024. At the effective time of the closing, each share of 1st Capital Bancorp common stock was converted into the right to receive 0.36 shares of common stock of Bancorp. As a result, 2,071,483 Bancorp shares were issued as of October 1, 2024. The Merger added total assets of $994 million, which included $258 million in investments and $603.1 million in loans, net of fair value adjustment, as well as $27.7 million in core deposit intangibles and $14.3 million in goodwill. Additionally, the Merger added deposits of $893 million and subordinated debt of $11.5 million, net of fair value adjustments.Interest Income, Interest Expense and Net Interest MarginNet interest income of $34.4 million for the quarter ended December 31, 2025, decreased $190 thousand, or 0.5%, from $34.6 million from the quarter ended September 30, 2025, and increased $368 thousand, or 1.1%, from $34.1 million for the quarter ended December 31, 2024. The decrease in net interest income in the fourth quarter of 2025 was largely the result of higher interest expense attributed to a partial early redemption of higher cost subordinated debentures. While average interest-earning assets grew during the fourth quarter of 2025, the associated increase in interest income was more than offset by an increase in interest expense resulting from $864 thousand in accelerated accretion of purchase discounts on the partial early redemption of subordinated debentures. The increase in net interest income of $368 thousand for the fourth quarter of 2025, compared to the same period in 2024, is largely attributed to growth in average interest-earning assets during 2025, contributing to a $1.5 million year-over-year increase in interest income. This was partially offset by an increase in interest expense due largely to the subordinated debentures redeemed during 2025.Net interest income for the year ended December 31, 2025, was $134.2 million, an increase of $39.1 million, or 41.1%, from that reported for the same period in 2024. The year-over-year increase was mainly due to the Merger, which increased investments and loans, in addition to the effect of organic growth during 2025.The cost of funds increased nine basis points from 1.37% in the third quarter of 2025 to 1.46% in the fourth quarter of 2025. As previously mentioned, during the fourth quarter, $4.3 million in par value of Bancorp's subordinated debentures assumed in the Merger were redeemed early, resulting in $864 thousand additional interest expense from accelerated accretion of the associated fair value discount. The impact of the early redemption of subordinated debentures accounted for all of the quarter-over-quarter increase in the cost of funds. Absent the partial early redemption of subordinated debentures during the fourth quarter of 2025, the cost of funds decreased approximately five basis points from the third quarter of 2025, reflecting management's discretionary rate cuts on money market deposit accounts responding to three 25 basis point interest rate cuts by the FOMC in late 2025. The quarterly cost of funds increased year-over-year by nine basis points when compared to the 1.37% reported for the fourth quarter of 2024. The increase was driven by the accelerated accretion associated with the partial early redemption of subordinated debentures. Excluding the impact of the accelerated accretion, the cost of funds decreased approximately five basis points year-over-year, reflecting discretionary rate cuts on money market deposit accounts during 2025 as mentioned earlier. During 2025, the cost of funds decreased six basis points to 1.39% as the Bank benefited from the full-year effect of the lower-costing deposit franchise from 1st Capital Bancorp, including a higher composition of noninterest-bearing demand deposits in 2025 relative to 2024. Further, a higher proportion of lower-cost deposit balances in 2025 allowed the Bank to pay down higher-cost wholesale borrowings and brokered deposits. These benefits to the cost of funds in 2025 were partially offset by $1.0 million in accelerated accretion on the partial redemption of higher cost subordinated debentures previously discussed, which was unfavorable to the cost of funds by approximately four basis points during 2025.For the fourth quarter of 2025, taxable equivalent net interest margin was 4.99%, compared to 5.28% in the third quarter of 2025 and 5.38% for the fourth quarter of 2024. The decrease in the taxable equivalent net interest margin in the fourth quarter compared to the third quarter of 2025 was the result of an increase in the cost of funds, as previously discussed, as well as lower earning asset yields. The earning asset yield for the fourth quarter of 2025 decreased 22 basis points over the prior quarter. Average deposit inflows over the quarter outpaced the average growth in loan balances, resulting in an increase in the average balance of liquid assets such as investments and interest-earning due from banks; these lower-yielding assets thus represented a proportionally larger share of the average earning asset mix for the fourth quarter of 2025 compared to prior quarter, leading to decline in the overall earning asset yield. Slightly lower loan yields in the fourth quarter also contributed to the decrease in earning asset yields. Lower loan yields are attributed, in part, to slightly lower purchase discount accretion on acquired loans as well as the absence net favorable adjustments to interest income that occurred in the prior quarter, consisting of: $354 thousand of prepayment penalties related to early payoffs of commercial real estate credits, $126 thousand from an interest recovery upon the full payoff of a problem credit, partially offset by a $161 thousand in interest write-off related to the placement of a land development loan on nonaccrual status in the third quarter of 2025.For the year ended December 31, 2025, taxable equivalent net interest margin was 5.21% compared to 5.09% for 2024. The taxable equivalent net interest margin for 2025 increased due to a lower cost of funds, as previously discussed, as well as higher overall yield on interest earning assets. Earning asset yields during 2025 benefited from higher yields on investments, due in large part to the higher yielding investments acquired in the Merger. While loan yields decreased slightly during 2025, they benefited from a full year of purchase discount accretion on acquired loans, totaling approximately $9.8 million, and represented an increase of $6.0 million from that recorded in 2024. Excluding both the purchase discount accretion on the acquired loan portfolio and the acceleration of the discount related to the partial redemption of Bancorp's subordinated debentures, as previously discussed, the adjusted net interest margin (non-GAAP1) for the quarters ended December 31, 2025, September 30, 2025, and December 31, 2024 was to 4.80%, 4.93% and 4.79%, respectively, and 4.87% and 4.88% for the years ended December 31, 2025, and 2024, respectively.1Non-GAAP measure. See Non-GAAP Financial Measures table for reconciliation to GAAP financial measures below.The following tables compare interest income, average interest-earning assets, interest expense, average interest-bearing liabilities, net interest income, net interest margin and cost of funds for each period reported:For the Quarters EndedDecember 31, 2025September 30, 2025December 31, 2024(Dollars in thousands)AverageBalanceInterest Income/ ExpenseAvg Yield/ CostAverageBalanceInterestIncome/ ExpenseAvgYield/CostAverage BalanceInterest Income/ ExpenseAvg Yield/ CostASSETSInterest-earning due from banks$164,017$1,6303.94 %$116,056$1,2844.39 %$83,210$9284.44 %Investments*429,1253,9093.61 %385,2353,3743.47 %421,6813,5193.32 %Loans*2,154,45138,2407.04 %2,109,59338,3567.21 %2,023,90237,8457.44 %Total interest-earning assets2,747,59343,7796.32 %2,610,88443,0146.54 %2,528,79342,2926.65 %Noninterest-earning assets158,417161,773164,421Total assets$2,906,010$2,772,657$2,693,214LIABILITIESInterest checking deposits$247,6326040.97 %$248,6846661.06 %$356,5316290.70 %Money market deposits882,5506,0412.72 %785,5205,7872.92 %580,5264,8173.30 %Savings deposits178,5954230.94 %181,2564400.96 %183,2403530.77 %Time certificates of deposits149,6771,0572.80 %152,9921,1252.92 %180,3341,6433.62 %Brokered deposits——— %——— %28,2843805.34 %Short-term borrowings——— %——— %—44.90 %Subordinated debt10,4171,07741.02 %11,0522298.22 %11,5512378.16 %Total interest-bearing liabilities1,468,8719,2022.49 %1,379,5048,2472.37 %1,340,4668,0632.39 %Noninterest-bearing deposits1,039,1841,008,555994,214Noninterest-bearing liabilities22,38620,91322,827Total liabilities2,530,4412,408,9722,357,507EQUITY375,569363,685335,707Total liabilities and equity$2,906,010$2,772,657$2,693,214Net interest income/margin-taxable equivalent adjusted$34,5774.99 %$34,7675.28 %$34,2295.38 %GAAP net interest income$34,444$34,634$34,076Cost of funds1.46 %1.37 %1.37 %*Interest income on investments and loans is reported as tax equivalent basis. Prior period figures have been restated for comparability. For the Years EndedDecember 31, 2025December 31, 2024(Dollars in thousands)Average BalanceInterest Income/ ExpenseAvg Yield/CostAverageBalanceInterestIncome/ ExpenseAvg Yield/ CostASSETSInterest-earning due from banks$80,922$3,3644.16 %$45,809$2,0184.41 %Investments*393,86213,7283.49 %279,5576,4862.32 %Loans*2,111,331150,5947.13 %1,550,601111,4107.18 %Total interest-earning assets2,586,115167,6866.48 %1,875,967119,9146.39 %Noninterest-earning assets161,208100,139Total assets$2,747,323$1,976,106LIABILITIESInterest checking deposits$250,2912,5561.02 %$240,9992,1170.88 %Money market deposits773,33321,7012.81 %465,00313,7032.95 %Savings deposits175,6861,5490.88 %116,4917430.64 %Time certificates of deposits157,1114,7563.03 %148,7895,1853.48 %Brokered deposits——— %44,9612,3945.32 %Short-term borrowings9,2134124.47 %2,2101305.87 %Subordinated debt11,0721,93717.49 %2,9042378.16 %Total interest-bearing liabilities1,376,70632,9112.39 %1,021,35724,5092.40 %Noninterest-bearing deposits989,327669,753Noninterest-bearing liabilities22,67718,716Total liabilities2,388,7101,709,826EQUITY358,613266,280Total liabilities and equity$2,747,323$Full story available on Benzinga.com
