First quarter net income of $1.7 million; $0.23 per diluted share.
Quarterly tax equivalent net interest margin of 3.67%, expansion of 0.01% over prior quarter.
Quarterly loan growth of $11.4 million or annualized 8.09%.
Quarterly deposit growth of $18.7 million or annualized 11.24%.
FLORENCE, Ore., April 22, 2025--(BUSINESS WIRE)--Oregon Pacific Bancorp (ORPB), the holding company of Oregon Pacific Bank, today reported net income of $1.7 million, or $0.23 per diluted share, during the quarter ended March 31, 2025, compared to $2.2 million or $0.31 per diluted share for the quarter ended December 31, 2024. "We are pleased to report strong performance in the first quarter," said Ron Green, CEO of Oregon Pacific Bank. "Our focus and commitment have resulted in notable growth in both loans and deposits, showcasing the trust our clients have with Oregon Pacific Bank. As we navigate these challenging times, we remain dedicated to providing exceptional service and supporting the financial well-being of our community. We are additionally mindful of the potential risks that exist in the current environment and shareholder value remains a preeminent focus for the board of directors and management."
Period-end deposits totaled $695.3 million, representing quarterly growth of $18.7 million, with growth primarily centered in non-interest bearing demand deposits. During the quarter the bank’s total cost of funds remained flat at 1.36%. Period-end loans, net of loan origination fees and costs grew to $582.9 million, representing quarterly growth of $11.4 million. Quarterly loan production for new and renewed loans totaled $32.7 million, with a weighted average effective rate of 6.79% and a weighted-average repricing life of 3.04 years. In addition to the loan and deposit growth the bank also experienced expansion in its linked quarter net interest margin, increasing to 3.67% in the first quarter of 2025, up from 3.66% reported in the fourth quarter of 2024. The small expansion was primarily attributable to a change in asset mix, as securities matured and transitioned into either loan growth or interest-bearing balances with the Federal Reserve.
During the first quarter of 2025, the bank reflected an increase in classified assets of $2.4 million, defined as loans and loan contingent liabilities internally graded substandard or worse, impaired loans, adversely classified securities and other real estate owned. The primary cause of the increase was the downgrade of two relationships, totaling $1.9 million and $500 thousand, respectively. The first relationship is comprised of a $1 million term loan and a $900 thousand line of credit, secured by owner occupied real estate with a combined loan to value of 48%. The borrower experienced a decline in financial performance but is working on a plan to increase profitability. The second relationship is an asset-backed line of credit that is adequately margined and secured by inventory. The borrowers experienced a decrease in financial performance but are seasoned owners who have weathered previous economic downturns, with no current losses anticipated.
Noninterest income totaled $2.1 million for the quarter ended March 31, 2025, and represented a small reduction of $12 thousand compared to the quarter ended December 31, 2024. On a linked quarter basis, the largest reduction occurred in Mortgage loan sales category, representing a decrease of $65 thousand from the prior quarter. During the quarter the bank continued to process the remaining mortgage applications, before the planned mortgage discontinuation in mid-2025. The reduction in mortgage fee income was offset by an increase in the trust fee income category, which grew $63 thousand from the prior quarter. This increase was partially attributable to extraordinary fee income, which is generally one-time fees associated with the sale of real estate, which totaled $209 thousand during the first quarter of 2025 compared to $16 thousand during the fourth quarter of 2024. The bank did experience a small reduction in traditional trust fee income, as assets under management contracted slightly during the quarter from $271 million at December 31, 2024, to $267 million at March 31, 2025. As the majority of trust fee income is calculated as a percentage of assets under management, fluctuations in the market values of the trust investments have the potential to impact trust revenue in future periods.
For the quarter ended March 31, 2025, noninterest expense totaled $6.7 million, representing an increase of $573 thousand from the quarter ended December 31, 2024. The largest expense fluctuation occurred in the salaries and employee benefits category, which grew $575 thousand from the prior quarter, accounting for all of the quarterly growth. Below is a summary of the quarterly salaries and benefits expense detail.
THREE MONTHS ENDED
March 31,
December 31,
2025
2024
Change
Employee salaries
$
2,713
$
2,685
$
28
Employee bonuses
374
141
233
Payroll Taxes
304
214
90
FAS91 Contra
(127
)
(200
)
73
Employee Benefits
729
578
151
$
3,993
$
3,418
$
575
The largest quarterly increase was attributable to bonus compensation expense, which is tied to projected year end performance and is adjusted quarterly based on the forecasted achievement. The strong loan and deposit growth experienced during the first quarter 2025, coupled with a reduction in the bonus accrual prior to the end of 2024, combined to reflect an increase of $233 thousand on a linked quarter basis. The bank also saw a large increase in employee benefits expenses, primarily attributable to an increase in the bank’s medical insurance, which increased $110 thousand over the prior quarter due to annual increases from the bank’s medical insurance provider. Lastly, the bank experienced a quarterly increase of $90 thousand in payroll tax expense. Payroll tax counters are generally reset on a calendar basis, so tax expense at the beginning of the year is typically higher, decreasing over the course of the year as employees reach wage caps.
Forward-Looking Statement Safe Harbor
This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as "anticipates," "targets," "expects," "estimates," "intends," "plans," "goals," "believes" and other similar expressions or future or conditional verbs such as "will," "should," "would" and "could." The forward-looking statements made represent Oregon Pacific Bank’s current estimates, projections, expectations, plans or forecasts of its future results and revenues, including but not limited to statements about performance, loan or deposit growth, loan prepayments, investment purchases, investment yields, strategic focus, capital position, liquidity, credit quality, special asset liquidation, noninterest income, noninterest expense and credit quality trends. These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumptions that are difficult to predict and are often beyond Oregon Pacific Bank’s control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements. You should not place undue reliance on any forward-looking statement and should consider all of the following uncertainties and risks. Oregon Pacific Bancorp undertakes no obligation to publicly revise or update any forward-looking statement to reflect the impact of events or circumstances that arise after the date of this release. This statement is included for the express purpose of invoking the PSLRA’s safe harbor provisions.
CONSOLIDATED BALANCE SHEETS
Unaudited (dollars in thousands)
March 31,
December 31,
March 31,
2025
2024
2024
ASSETS
Cash and due from banks
$
12,042
$
9,521
$
10,464
Interest bearing deposits
27,625
10,921
25,851
Securities
145,610
155,258
170,740
Loans, net of deferred fees and costs
582,939
571,565
550,945
Allowance for credit losses
(7,400
)
(7,400
)
(7,018
)
Premises and equipment, net
13,193
13,279
13,346
Bank owned life insurance
10,223
9,142
8,933
Deferred tax asset
4,911
5,398
5,742
Other assets
8,485
8,764
8,432
Total assets
$
797,628
$
776,448
$
787,435
LIABILITIES
Deposits
Demand - non-interest bearing
$
153,956
$
141,719
$
155,038
Demand - interest bearing
276,594
277,932
297,288
Money market
140,373
135,255
129,154
Savings
67,566
66,194
63,230
Certificates of deposit
46,825
45,516
32,774
Brokered deposits
10,001
10,001
17,961
Total deposits
695,315
676,617
695,445
FHLB borrowings
7,500
7,500
7,500
Junior subordinated debenture
4,124
4,124
4,124
Subordinated debenture
14,852
14,827
14,752
Other liabilities
7,544
8,090
7,611
Total liabilities
729,335
711,158
729,432
STOCKHOLDERS' EQUITY
Common stock
21,612
21,612
21,280
Retained earnings
53,287
51,603
45,672
Accumulated other comprehensive income, net of tax
(6,606
)
(7,925
)
(8,949
)
Total stockholders' equity
68,293
65,290
58,003
Total liabilities & stockholders' equity
$
797,628
$
776,448
$
787,435
CONSOLIDATED STATEMENTS OF INCOME
Unaudited (dollars in thousands, except per share data)
THREE MONTHS ENDED
March 31,
December 31,
March 31,
2025
2024
2024
INTEREST INCOME
Loans
$
7,859
$
7,941
$
7,143
Securities
1,279
1,376
1,539
Other interest income
261
282
198
Total interest income
9,399
9,599
8,880
INTEREST EXPENSE
Deposits
2,306
2,357
1,999
Borrowed funds
304
318
372
Total interest expense
2,610
2,675
2,371
NET INTEREST INCOME
6,789
6,924
6,509
Provision for credit losses on loans
-
-
40
Provision (credit) for unfunded commitments
-
(30
)
(40
)
Net interest income after provision (credit) for credit losses
6,789
6,954
6,509
NONINTEREST INCOME
Trust fee income
1,198
1,135
900
Service charges
373
378
347
Mortgage loan sales
7
72
32
Merchant card services
117
125
112
Oregon Pacific Wealth Management income
339
349
301
Other income
109
96
97
Total noninterest income
2,143
2,155
1,789
NONINTEREST EXPENSE
Salaries and employee benefits
3,993
3,418
3,633
Outside services
702
787
718
Occupancy & equipment
517
485
510
Trust expense
742
724
617
Loan and collection, OREO expense
14
16
14
Advertising
91
89
55
Supplies and postage
70
76
79
Other operating expenses
591
552
590
Total noninterest expense
6,720
6,147
6,216
Income before taxes
2,212
2,962
2,082
Provision for income taxes
528
744
492
NET INCOME
$
1,684
$
2,218
$
1,590
Quarterly Highlights
1st Quarter
4th Quarter
3rd Quarter
2nd Quarter
1st Quarter
2025
2024
2024
2024
2024
Earnings
Interest income
$
9,399
$
9,599
$
9,537
$
9,287
$
8,880
Interest expense
2,610
2,675
2,771
2,549
2,371
Net interest income
$
6,789
$
6,924
$
6,766
$
6,738
$
6,509
Provision for credit losses on loans
-
-
150
141
40
Provision (credit) for unfunded commitments
-
(30
)
35
10
(40
)
Noninterest income
2,143
2,155
2,038
1,960
1,789
Noninterest expense
6,720
6,147
6,179
6,086
6,216
Provision for income taxes
528
744
593
595
492
Net income
$
1,684
$
2,218
$
1,847
$
1,866
$
1,590
Average shares outstanding
7,151,365
7,136,389
7,134,259
7,135,227
7,115,125
Average diluted shares outstanding
7,170,304
7,154,126
7,153,663
7,154,631
7,128,148
Period end shares outstanding
7,164,470
7,138,259
7,134,259
7,135,227
7,135,615
Period end diluted shares outstanding
7,190,212
7,155,996
7,153,663
7,154,631
7,155,019
Earnings per share
$
0.24
$
0.31
$
0.26
$
0.26
$
0.22
Diluted earnings per share
$
0.23
$
0.31
$
0.26
$
0.26
$
0.22
Performance Ratios
Return on average assets
0.87
%
1.12
%
0.93
%
0.96
%
0.83
%
Return on average equity
10.42
%
14.01
%
12.12
%
13.01
%
11.43
%
Net interest margin - tax equivalent
3.67
%
3.66
%
3.59
%
3.65
%
3.59
%
Yield on loans
5.53
%
5.55
%
5.47
%
5.43
%
5.30
%
Yield on securities
3.41
%
3.31
%
3.48
%
3.62
%
3.54
%
Cost of deposits
1.36
%
1.36
%
1.41
%
1.30
%
1.20
%
Cost of interest-bearing liabilities
1.88
%
1.89
%
1.97
%
1.83
%
1.74
%
Efficiency ratio
75.24
%
67.71
%
70.20
%
70.00
%
74.91
%
Full-time equivalent employees
148
145
144
143
142
Capital
Tier 1 capital
$
90,548
$
89,133
$
87,101
$
85,416
$
83,699
Leverage ratio
11.40
%
11.19
%
10.96
%
10.82
%
10.78
%
Common equity tier 1 ratio
14.84
%
14.86
%
14.65
%
14.36
%
14.33
%
Tier 1 risk based ratio
14.84
%
14.86
%
14.65
%
14.36
%
14.33
%
Total risk based ratio
16.10
%
16.11
%
15.90
%
15.61
%
15.58
%
Book value per share
$
9.53
$
9.12
$
9.05
$
8.39
$
8.13
Quarterly Highlights
1st Quarter
4th Quarter
3rd Quarter
2nd Quarter
1st Quarter
2025
2024
2024
2024
2024
Asset quality
Allowance for credit losses (ACL)
$
7,400
$
7,400
$
7,400
$
7,250
$
7,018
Nonperforming loans (NPLs)
$
801
$
798
$
278
$
275
$
113
Nonperforming assets (NPAs)
$
801
$
798
$
278
$
275
$
113
Classified Assets (1)
$
10,550
$
8,132
$
10,363
$
11,778
$
9,668
Net loan charge offs (recoveries)
$
-
$
-
$
-
$
(91
)
$
(3
)
ACL as a percentage of net loans
1.27
%
1.29
%
1.31
%
1.29
%
1.27
%
ACL as a percentage of NPLs
923.85
%
927.32
%
2661.87
%
2636.36
%
6210.62
%
Net charge offs (recoveries) to average loans
0.00
%
0.00
%
0.00
%
-0.02
%
0.00
%
Net NPLs as a percentage of total loans
0.14
%
0.14
%
0.05
%
0.05
%
0.02
%
Nonperforming assets as a percentage of total assets
0.10
%
0.10
%
0.03
%
0.04
%
0.01
%
Classified Asset Ratio (2)
10.77
%
8.42
%
10.97
%
12.63
%
10.66
%
Past due as a percentage of
total loans
0.11
%
0.06
%
0.24
%
0.19
%
0.29
%
Off-balance sheet figures
Unused credit commitments
$
94,843
$
98,616
$
99,229
$
97,763
$
99,498
Trust assets under management (AUM)
$
267,359
$
271,046
$
267,061
$
254,380
$
242,222
Oregon Pacific Wealth Management AUM
$
172,729
$
165,045
$
167,025
$
159,201
$
153,228
End of period balances
Total securities
$
145,610
$
155,258
$
163,275
$
162,483
$
170,740
Total short term deposits
$
27,625
$
10,921
$
25,874
$
10,559
$
25,851
Total loans net of allowance
$
575,539
$
564,165
$
558,092
$
555,752
$
543,927
Total earning assets
$
758,119
$
739,677
$
756,571
$
737,936
$
749,463
Total assets
$
797,628
$
776,448
$
795,226
$
771,842
$
787,435
Total noninterest bearing deposits
$
153,956
$
141,719
$
156,296
$
154,226
$
155,038
Total brokered deposits
$
10,001
$
10,001
$
18,001
$
17,991
$
17,961
Total core deposits
$
685,314
$
666,616
$
677,587
$
659,484
$
677,484
Total deposits
$
695,315
$
676,617
$
695,588
$
677,475
$
695,445
Average balances
Total securities
$
150,197
$
159,587
$
162,918
$
166,077
$
172,769
Total short term deposits
$
23,766
$
23,654
$
22,887
$
16,430
$
14,663
Total loans net of allowance
$
568,635
$
561,601
$
556,336
$
552,490
$
535,251
Total earning assets
$
751,933
$
754,173
$
751,371
$
744,050
$
731,735
Total assets
$
787,201
$
789,333
$
787,072
$
780,003
$
767,409
Total noninterest bearing deposits
$
149,802
$
152,844
$
158,888
$
156,858
$
156,513
Total brokered deposits
$
10,001
$
12,610
$
17,999
$
17,975
$
14,854
Total core deposits
$
675,953
$
676,900
$
671,949
$
668,008
$
657,555
Total deposits
$
685,954
$
689,510
$
689,948
$
685,983
$
672,409
(1) Classified assets is defined as the sum of all loan-related contingent liabilities and loans internally graded substandard or worse, impaired loans (net of government guarantees), adversely classified securities, and other real estate owned.
(2) Classified asset ratio is defined as the sum of all loan-related contingent liabilities and loans internally graded substandard or worse, impaired loans (net of government guarantees), adversely classified securities, and other real estate owned, divided by bank Tier 1 capital, plus the allowance for credit losses.
