charters, West Coast Bancorp of Lake Oswego, Ore., is prime takeover bait.
Analysts said several factors are fueling speculation that West Coast -- Oregon's largest independent bank, with $1.2 billion of assets and 42 branches that stretch into Washington is on the block. The bank's chief executive officer, Victor L. Bartruff, resigned suddenly, and no successor has been named. And the bank's stock price has been languishing.
"If a $25-per-share offer was put on the table, the board would be hard-pressed not to take it," said Thomas J. Carley, a bank analyst at D.A. Davidson & Co. in Portland, Ore.
R. Jay Tejera, an analyst with Seattle-based Ragen MacKenzie, agreed. He said that if the company wants to remain independent, "time is not their friend right now."
West Coast officials downplayed any susceptibility to being acquired.
Without elaborating, acting CEO Ronald DeLude said the bank intends to expand into new markets and grow internally. The specifics of that strategy are expected to be detailed next month.
"We're looking to run this enterprise," Mr. DeLude said. He added that the search for a permanent CEO is expected to end by December.
What also concerns analysts is West Coast's ability to increase its revenues and loans. The bank's second-quarter revenues grew by 4% over the same period in 1998, and its loans, 10%. This was over a period when West Coast eliminated 73 jobs, pared 50 board seats to 11, and folded four loan service centers into one.
Analysts have trimmed their 1999 earnings-per-share estimates to $1.37, from $1.45, citing slower-than-expected loan and earnings asset growth.
"The bank clearly needs to find a new revenue driver," Mr. Tejera said.
Mr. Bartruff, who stepped down as CEO July 19 for what were said to be personal reasons and who is now a consultant to the bank, said he has faith in West Coast.
"There is still a bright future for the company," he said.
Mr. Bartruff said his surprising departure had nothing to do with the long-term prospects of the company. Rather, as West Coast grew larger, he said he found himself dealing less with customers and employees.
"It wasn't as much fun as it once was," Mr. Bartruff said.
For West Coast - which purchased three banks from 1995 to 1998 growth via acquisition is probably not an option right now. Its stock has fallen about 24% this year and has hovered between $17 and $18 per share since June, making it one of cheapest community bank stocks in the Pacific Northwest. The stock is trading at 11.2 times next year's projected earnings, compared with 13.5 for its regional peers.
Beth Ruckwardt, an analyst with Pacific Crest Securities in Portland, said that having an interim-status CEO "could inhibit West Coast from making acquisitions in the near term." ?
