In This Article:
ABERDEEN, Wash., April 26, 2024 (GLOBE NEWSWIRE) -- Pacific Financial Corporation (OTCQX: PFLC), (“Pacific Financial”) or the (“Company”), the holding company for Bank of the Pacific (the “Bank”), reported net income of $2.7 million, or $0.26 per diluted share for the first quarter of 2024, compared to $2.9 million, or $0.28 per diluted share for the fourth quarter of 2023, and $4.1 million, or $0.39 per diluted share for the first quarter of 2023. All results are unaudited.
The board of directors of Pacific Financial declared a quarterly cash dividend of $0.14 per share on April 24, 2024. The dividend will be payable on May 24, 2024 to shareholders of record on May 10, 2024.
“We are pleased with our first quarter results, which is a good start to the year; operating earnings were solid, loan growth outpaced deposit growth during the quarter, our net interest margin expanded, and asset quality remained strong,” said Denise Portmann, President and Chief Executive Officer. “Although net interest income declined quarter-over-quarter, primarily as a result of decreased interest earning deposit balances, our net interest margin remains strong and continued to expand as growth in earning asset yields outpaced increases in deposit cost of funds. This expansion in net interest margin was fueled by higher rates on loan production resulting in a loan yield of 5.97%, a 17 basis points improvement from the prior quarter, while cost of funds increased only 7 basis points to 0.90%, despite continued rate pressure.”
“Our lending team continues to successfully meet the credit needs of our customers and new clients while employing strong underwriting practices. Loan origination volumes remained steady and net loans receivable increased by $8.9 million during the quarter. While the possibility of a slowing economy and a continued higher interest rate environment still exist, we remain optimistic regarding the overall strength of our loan portfolio and the economic opportunities for growth in our markets,” said Portmann. “Our team continues to work diligently and we are focused on making progress on our strategic initiatives.”
First Quarter 2024 Financial Highlights:
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Return on average assets (“ROAA”) was 0.95%, compared to 1.02% for the fourth quarter 2023, and 1.33% for the first quarter 2023.
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Return on average equity (“ROAE”) was 9.32%, compared to 10.88% from the preceding quarter, and 15.63% from the first quarter a year earlier.
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Net interest income was $11.4 million, compared to $11.7 million for the fourth quarter of 2023, and $13.1 million for the first quarter 2023.
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Net interest margin (“NIM”) expanded 4 basis points to 4.38%, compared to 4.34% from the preceding quarter, and contracted 13 basis points from 4.51% for the first quarter a year ago.
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Provision for credit losses was $33,000 compared to $111,000 for the preceding quarter and $157,000 in the first quarter a year ago.
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Gross loans balances grew by $8.9 million, or 1%, to $694.2 million at March 31, 2024, compared to $685.3 million at December 31, 2023, and increased by $48.6 million, or 8%, from $645.6 million at March 31, 2023.
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Total deposits declined $13.5 million to $995.8 million, compared to $1.01 billion at December 31, 2023, and declined 10% from $1.11 billion at March 31, 2023. Core deposits represented 88% of total deposits, with non-interest bearing deposits representing 41% of total deposits at March 31, 2024.
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Coverage of short-term funds available to uninsured and uncollateralized deposits was 251% at March 31, 2024 compared to 243% at December 31, 2023. Uninsured or uncollateralized deposits were 22% of total deposits at March 31, 2024 and 23% at December 31, 2023.
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Asset quality remains solid with nonperforming assets to total assets at 0.13%, compared to nonperforming assets to total assets at 0.06% for the preceding quarter, and 0.08% at March 31, 2023.
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At March 31, 2024, Pacific Financial continued to exceed regulatory well-capitalized requirements with a leverage ratio of 11.6% and a total risk-based capital ratio of 17.6%.
Income Statement Review
Net interest income decreased $251,000 to $11.4 million for the first quarter of 2024, compared to $11.7 million for the fourth quarter of 2023, and decreased $1.7 million compared to $13.1 million for the first quarter a year ago. The decrease in net interest income compared to the preceding quarter and the year ago quarter reflects the increase in funding costs, with interest income remaining relatively flat reflecting lower interest earning deposit balances offset by increased loan interest income.
Net interest margin (NIM) expanded 4 basis points to 4.38% for the first quarter of 2024, compared to 4.34% for the fourth quarter of 2023 and contracted 13 basis points compared to 4.51% for the first quarter of 2023. During the current quarter compared to the preceding quarter increases in asset yields outpaced the growth in cost of funds. Yield on interest earning assets increased 10 basis points to 5.24% for the first quarter of 2024 compared to 5.14% for the prior quarter and 4.72% in the like quarter a year ago. These increases on interest earning assets resulted mainly from increased loan yields.
Average loan yields increased 17 basis points to 5.97% during the current quarter, compared to 5.80% for the preceding quarter and increased 53 basis points from 5.44% for the first quarter 2023, as rates on new loan originations and variable rate loans have priced in a higher interest rate environment. The yield on Fed funds sold and interest-bearing bank deposits was 5.45% for the current quarter, compared to 5.42% for the preceding quarter, and 4.61% for the first quarter of 2023.
The Bank’s total cost of funds increased to 0.90% for the current quarter, compared to 0.83% for the preceding quarter, and 0.21% for the first quarter 2023. The increase in the costs of deposits was due to a change in deposit mix, as customers continued to look for yield by transferring balances from non-maturity deposits to higher rate certificates of deposit and increases in deposit rates, primarily money market and certificate of deposits rates.
Noninterest income declined 5% to $1.4 million for the current quarter, compared to $1.5 million for the linked quarter and increased 12% from $1.3 million a year earlier. The decrease compared to the linked quarter was primarily due to decreased debit card revenue related to lower transaction account volume for the current quarter which was partially offset by higher gain-on-sale of loans during the current quarter. The increase year over year was a result of increased gain-on-sale of loans as well as no loss on securities compared to the like quarter a year ago.
Mortgage banking loan production increased during the current quarter compared to the prior quarter and the like quarter a year ago, this was despite ongoing market challenges, including the higher interest rate environment and limited inventory levels in the Bank’s markets. This higher production resulted in higher gains-on-sale of loans at $152,000 for the current quarter compared to $95,000 for the prior quarter and $111,000 for the like quarter a year ago.
Noninterest expenses were $9.5 million for both the first quarter of 2024 and the prior quarter, increasing $0.3 million compared to $9.2 million for the first quarter of 2023. Within the total, for the current quarter compared to the prior quarter, salaries and employee benefits increased $207,000 reflecting higher staffing levels from the implementation of strategic initiatives including the opening of a new commercial banking center of seven seasoned commercial bankers in December 2023. The increase in non-interest expense for the current quarter compared to the same quarter a year ago also reflects increases in salaries and employee benefits as well as occupancy expenses, and marketing expenses partially offset by decreases in state and local taxes, FDIC insurance premiums and professional services. The company’s efficiency ratio was 74.21% for the first quarter of 2024, compared to 72.22% in the preceding quarter and 63.91% in the same quarter a year ago.
Income Tax Expense: Federal and Oregon state income tax expense was $630,000 for the current quarter, and $608,000 for the preceding quarter, resulting in effective tax rates of 19.2% and 17.1%, respectively. These income tax expenses reflect the benefits of tax exempt income and credits on tax-exempt loans and investments, affordable housing tax credit financing, and investments in bank owned life insurance.
Balance Sheet Review
Total Assets declined by 1% to $1.13 billion at March 31, 2024, compared to $1.15 billion at December 31, 2023, and decreased 9% from $1.24 billion at March 31, 2023.
Liquidity metrics continued to remain strong with total liquidity sources, both on and off balance sheet sources, at $556.7 million as of March 31, 2024. The Bank has established collateralized credit lines with borrowing capacity from the Federal Home Loan Bank of Des Moines (FHLB) and from the Federal Reserve Bank of San Francisco, as well as $60.0 million in unsecured borrowing lines from various correspondent banks. There was no balance outstanding on any of these facilities at quarter-end.
The following table summarize the Bank’s available liquidity:
| Liquidity | |||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||
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|
|
| Mar 31, |
| % of |
| Dec 31, |
| % of |
| $ |
| % |
| Mar 31, |
| % of |
| $ |
| % |
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| (Dollars in thousands) | |||||||||||||||||||||||||
| Cash and cash equivalents | $ | 80,052 |
| 8% |
| $ | 95,781 |
|
| 9% |
| $ | (15,729) |
|
| -16% | $ | 237,704 |
| 21% |
| $ | (157,652) |
|
| -66% |
| ||
| Unencumbered AFS Securities |
| 139,144 |
| 14% |
|
| 140,049 |
|
| 14% |
|
| (905) |
|
| -1% |
| 116,886 |
| 11% |
|
| 22,258 |
|
| 19% |
| ||
| Secured lines of Credit (FHLB, FRB) |
| 337,553 |
| 34% |
|
| 327,264 |
|
| 32% |
|
| 10,289 |
|
| 3% |
| 318,179 |
| 29% |
|
| 19,374 |
|
| 6% |
| ||
|
| Total short-term funds available | $ | 556,749 |
| 56% |
| $ | 563,094 |
|
| 55% |
| $ | (6,345) |
|
| -1% | $ | 672,769 |
| 61% |
| $ | (116,020) |
|
| -17% |
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| Mar 31, |
| Dec 31, |
| Mar 31, |
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| Short-term funds available to uninsured/uncollateralized deposits |
| 251% |
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| 243% |
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| 259% |
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| Uninsured/uncollateralized deposits to total deposits |
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| 22% |
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| 23% |
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| 23% |
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| Gross loans to deposits ratio |
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| 69% |
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| 67% |
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| 57% |
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Investment Securities decreased 2% to $288.4 million at March 31, 2024, compared to $293.6 million at December 31, 2023, and increased 1% from $285.9 million at March 31, 2023. During the quarter, new purchases totaled $5.0 million at an average yield of 4.8%, with payments, maturities, and fair value changes of $10.2 million. The average adjusted duration of the investment securities portfolio was 4.3 at March 31, 2024.
Gross loans balances increased $8.9 million, or 1%, to $694.2 million at March 31, 2024, compared to $685.3 million at December 31, 2023. Year-over-year loan growth was 8%, or $48.6 million, with loan growth occurring in most categories. The largest year-over-year increases were in construction and development, residential 1-4 family and multi-family which increased $17.1 million, $14.4 million and $13.5 million, respectively. In addition, commercial real estate both owner and non-owner occupied increased during the same time period, while commercial and consumer loans both decreased.
The Company manages new loan origination volume and the portfolio using concentration limits that establish maximum exposure levels by certain industry segments, loan product types, geography and single borrower limits. The loan pipeline continues to be supported by sustained business development activity of its commercial lending teams. In addition, the loan portfolio continues to be well-diversified and is originated predominantly within the Company’s Western Washington and Oregon markets.
Credit Quality: Non-performing assets remain minimal although increasing to $1.5 million, or 0.13% of total assets at March 31, 2024, compared to $664,000, or 0.06% at December 31, 2023, and $961,000, or 0.08% at March 31, 2023. The increase was primarily due to a single well secured farmland loan transferring to non-accrual status during the quarter.
Allowance for Credit Losses (“ACL”) for loans was $8.6 million, or 1.24% of gross loans at March 31, 2024, and at December 31, 2023, compared to $8.2 million at March 31, 2023. The total provision for credit losses, which includes a provision for credit losses on loans as well as a provision for credit losses for unfunded loan commitments, was $33,000 in the first quarter of 2024, compared to $111,000 in the fourth quarter of 2023 and a provision of $157,000 for the first quarter of 2023. The provision during the current quarter primarily reflected net loan growth which was partially offset by an improved 12 month forecast for national unemployment used in the allowance forecast model. Minimal charge-offs during the quarter and ongoing strong loan quality metrics during the quarter in large part mitigated additional reserves associated with the loan growth. Net charge offs for the current quarter totaled $33,000, compared to net recoveries of $21,000 for the preceding quarter and net recoveries of $1,000 for the first quarter a year ago.
Total Deposits were $995.8 million at March 31, 2024, compared to $1.01 billion at December 31, 2023 and $1.11 billion at March 31, 2023. During the current quarter, the deposit mix continued to change with some customers transferring a portion of their excess deposit funds into higher yield certificate of deposits. The decline in deposits from a year ago was also primarily due to interest rate sensitive clients shifting a portion of their non-operating deposit balances to higher yielding investments.
Certificate of deposit balances increased $13.8 million from the linked quarter and $49.4 million from the same quarter a year ago and represent 12%, 10%, and 6%, of total deposits, at March 31, 2024, December 31, 2023, and March 31, 2023, respectively. Non-interest-bearing account balances decreased 1% to $404.5 million at March 31, 2024, compared to $409.3 million at December 31, 2023 and decreased 16% compared to $480.5 million at March 31, 2023. At 41%, non-interest bearing demand deposits continues to represent a high percentage of total deposits. Additionally, we continue to benefit from a strong core deposit base, with core deposits representing 88% of total deposits at quarter end.
Shareholder’s Equity remained flat at $114.7 million at March 31, 2024, compared to December 31, 2023, and increased $5.8 million compared to $108.9 million at March 31, 2023. Net unrealized losses on available-for-sale securities increased during the quarter and was $21.5 million at March 31, 2024 compared to $20.8 million at December 31, 2023, and $20.5 million at March 31, 2023. This increase in net unrealized losses reflects the increases in longer-term market interest rates during the quarter. Also impacting shareholder’s equity was the repurchase of $670,000 or 62,317 shares under our current stock repurchase program during the quarter and $1.07 million or 100,817 shares since the inception of the current program.
Book value per common share was $11.10 at March 31, 2024, compared to $11.04 at December 31, 2023, and $10.45 at March 31, 2023. Regulatory capital ratios of both the Company and the Bank continue to exceed the well-capitalized regulatory thresholds, with the company’s leverage ratio at 11.6% and total risk-based capital ratio at 17.6% as of March 31, 2024.
| Financial Performance Overview | |||||||||||||||
| (Unaudited) | |||||||||||||||
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| For the Three Months Ended | |||||||||||||
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| Mar 31, |
| Dec 31, |
| Change |
| Mar 31, |
| Change | |||||
| Performance Ratios |
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| ||||||
| Return on average assets, annualized | 0.95% |
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| 1.02% |
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| (0.07) |
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| 1.33% |
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| (0.38) |
| |
| Return on average equity, annualized | 9.32% |
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| 10.88% |
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| (1.56) |
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| 15.63% |
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| (6.31) |
| |
| Efficiency ratio (1) | 74.21% |
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| 72.22% |
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| 1.99 |
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| 63.91% |
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| 10.30 |
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| (1) Non-interest expense divided by net interest income plus noninterest income. |
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| Balance Sheet Overview | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
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| Mar 31, |
| Dec 31, |
| $ |
| % |
| Mar 31, |
| $ |
| % | |||||||
| Assets: |
| (Dollars in thousands, except per share data) | ||||||||||||||||||||
|
| Cash on hand and in banks | $ | 15,597 |
| $ | 16,716 |
| $ | (1,119) |
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| -7% |
| $ | 16,593 |
| $ | (996) |
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| -6% |
|
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| Interest bearing deposits |
| 75,705 |
|
| 91,355 |
|
| (15,650) |
|
| -17% |
|
| 235,958 |
|
| (160,253) |
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| -68% |
|
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| Investment securities |
| 288,439 |
|
| 293,579 |
|
| (5,140) |
|
| -2% |
|
| 285,925 |
|
| 2,514 |
|
| 1% |
|
|
| Loans held-for-sale |
| - |
|
| 1,103 |
|
| (1,103) |
|
| -100% |
|
| 249 |
|
| (249) |
|
| -100% |
|
|
| Loans, net of deferred fees |
| 693,461 |
|
| 684,554 |
|
| 8,907 |
|
| 1% |
|
| 644,901 |
|
| 48,560 |
|
| 8% |
|
|
| Allowance for loan losses |
| (8,580) |
|
| (8,530) |
|
| (50) |
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| 1% |
|
| (8,231) |
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| (349) |
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| 4% |
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| Net loans |
| 684,881 |
|
| 676,024 |
|
| 8,857 |
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| 1% |
|
| 636,670 |
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| 48,211 |
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| 8% |
|
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| Federal Home Loan Bank and Pacific Coast Bankers' Bank stock, at cost |
| 1,689 |
|
| 1,783 |
|
| (94) |
|
| -5% |
|
| 2,567 |
|
| (878) |
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| -34% |
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| Other assets |
| 68,275 |
|
| 68,339 |
|
| (64) |
|
| 0% |
|
| 65,572 |
|
| 2,703 |
|
| 4% |
|
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| Total assets | $ | 1,134,586 |
| $ | 1,148,899 |
| $ | (14,313) |
|
| -1% |
| $ | 1,243,534 |
| $ | (108,948) |
|
| -9% |
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| Liabilities and Shareholders' Equity: |
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| ||||||||
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| Total deposits | $ | 995,756 |
| $ | 1,009,292 |
| $ | (13,536) |
|
| -1% |
| $ | 1,110,368 |
| $ | (114,612) |
|
| -10% |
|
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| Borrowings |
| 13,403 |
|
| 13,403 |
|
| - |
|
| 0% |
|
| 13,403 |
|
| - |
|
| 0% |
|
|
| Accrued interest payable and other liabilities |
| 10,702 |
|
| 11,513 |
|
| (811) |
|
| -7% |
|
| 10,848 |
|
| (146) |
|
| -1% |
|
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| Shareholders' equity |
| 114,725 |
|
| 114,691 |
|
| 34 |
|
| 0% |
|
| 108,915 |
|
| 5,810 |
|
| 5% |
|
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| Total liabilities and shareholders' equity | $ | 1,134,586 |
| $ | 1,148,899 |
| $ | (14,313) |
|
| -1% |
| $ | 1,243,534 |
| $ | (108,948) |
|
| -9% |
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| |||||||
| Common Shares Outstanding |
| 10,335,557 |
|
| 10,388,724 |
|
| (53,167) |
|
| -1% |
|
| 10,424,294 |
|
| (88,737) |
|
| -1% |
| |
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| |||||||
| Book value per common share (1) | $ | 11.10 |
| $ | 11.04 |
| $ | 0.06 |
|
| 1% |
| $ | 10.45 |
| $ | 0.65 |
|
| 6% |
| |
| Tangible book value per common share (2) | $ | 9.80 |
| $ | 9.75 |
| $ | 0.05 |
|
| 1% |
| $ | 9.16 |
| $ | 0.64 |
|
| 7% |
| |
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| (1) Book value per common share is calculated as the total common shareholders' equity divided by the period ending number of common stock shares outstanding. | ||||||||||||||||||||||
| (2) Tangible book value per common share is calculated as the total common shareholders' equity less total intangible assets and liabilities, divided by the period ending number of common stock shares outstanding. | ||||||||||||||||||||||
| Income Statement Overview | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
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| |||||||
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| For the Three Months Ended, | |||||||||||||||||||
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|
|
| Mar 31, |
| Dec 31, |
| $ |
| % |
| Mar 31, |
| $ |
| % | |||||||
|
|
|
| (Dollars in thousands, except per share data) | |||||||||||||||||||
| Interest and dividend income | $ | 13,634 |
| $ | 13,813 |
| $ | (179) |
|
| -1% |
| $ | 13,690 |
| $ | (56) |
|
| 0% |
| |
| Interest expense |
| 2,233 |
|
| 2,161 |
|
| 72 |
|
| 3% |
|
| 593 |
|
| 1,640 |
|
| 277% |
| |
|
| Net interest income |
| 11,401 |
|
| 11,652 |
|
| (251) |
|
| -2% |
|
| 13,097 |
|
| (1,696) |
|
| -13% |
|
| Provision for credit losses |
| 33 |
|
| 111 |
|
| (78) |
|
| -70% |
|
| 157 |
|
| (124) |
|
| -79% |
| |
| Noninterest income |
| 1,444 |
|
| 1,528 |
|
| (84) |
|
| -5% |
|
| 1,287 |
|
| 157 |
|
| 12% |
| |
| Noninterest expense |
| 9,532 |
|
| 9,519 |
|
| 13 |
|
| 0% |
|
| 9,187 |
|
| 345 |
|
| 4% |
| |
| Income before income taxes |
| 3,280 |
|
| 3,550 |
|
| (270) |
|
| -8% |
|
| 5,040 |
|
| (1,760) |
|
| -35% |
| |
| Income tax expense |
| 630 |
|
| 608 |
|
| 22 |
|
| 4% |
|
| 930 |
|
| (300) |
|
| -32% |
| |
|
| Net Income | $ | 2,650 |
| $ | 2,942 |
| $ | (292) |
|
| -10% |
| $ | 4,110 |
| $ | (1,460) |
|
| -36% |
|
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| |||||||
| Average common shares outstanding - basic |
| 10,350,830 |
|
| 10,411,812 |
|
| (60,982) |
|
| -1% |
|
| 10,418,292 |
|
| (67,462) |
|
| -1% |
| |
| Average common shares outstanding - diluted |
| 10,363,460 |
|
| 10,420,337 |
|
| (56,877) |
|
| -1% |
|
| 10,432,245 |
|
| (68,785) |
|
| -1% |
| |
|
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|
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|
|
|
|
|
|
| |||||||
| Income per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
| Basic | $ | 0.26 |
| $ | 0.28 |
| $ | (0.02) |
|
| -7% |
| $ | 0.39 |
| $ | (0.13) |
|
| -33% |
|
|
| Diluted | $ | 0.26 |
| $ | 0.28 |
| $ | (0.02) |
|
| -7% |
| $ | 0.39 |
| $ | (0.13) |
|
| -33% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| Effective tax rate |
| 19.2% |
|
| 17.1% |
|
| 2.1% |
|
|
|
| 18.5% |
|
| 0.7% |
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| Noninterest Income | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
|
|
|
| For the Three Months Ended, | |||||||||||||||||
|
|
|
| Mar 31, |
| Dec 31, |
| $ |
| % |
| Mar 31, |
| $ |
| % | |||||
|
|
|
| (Dollars in thousands) | |||||||||||||||||
| Service charges on deposits | $ | 475 | $ | 478 | $ | (3) |
|
| -1% |
| $ | 473 |
| $ | 2 |
|
| 0% |
| |
| Gain on sale of loans, net |
| 152 |
| 95 |
| 57 |
|
| 60% |
|
| 111 |
|
| 41 |
|
| 37% |
| |
| Gain on sale of securities available for sale, net |
| - |
| - |
| - |
|
| 0% |
|
| (154) |
|
| 154 |
|
| 0% |
| |
| Earnings on bank owned life insurance |
| 180 |
| 176 |
| 4 |
|
| 2% |
|
| 164 |
|
| 16 |
|
| 10% |
| |
| Other noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
| Fee income |
| 626 |
| 764 |
| (138) |
|
| -18% |
|
| 705 |
|
| (79) |
|
| -11% |
|
|
| Other |
| 11 |
| 15 |
| (4) |
|
| -27% |
|
| (12) |
|
| 23 |
|
| -192% |
|
| Total noninterest income | $ | 1,444 | $ | 1,528 | $ | (84) |
|
| -5% |
| $ | 1,287 |
| $ | 157 |
|
| 12% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| Noninterest Expense | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
| For the Three Months Ended, | ||||||||||||||||
|
|
|
| Mar 31, |
| Dec 31, |
| $ |
| % |
| Mar 31, |
| $ |
| % | ||||
|
|
|
| (Dollars in thousands) | ||||||||||||||||
| Salaries and employee benefits | $ | 5,994 | $ | 5,787 | $ | 207 |
|
| 4% | % | $ | 5,785 | $ | 209 |
|
| 4% |
| |
| Occupancy |
| 641 |
| 679 |
| (38) |
|
| -6 | % |
| 531 |
| 110 |
|
| 21% |
| |
| Equipment |
| 284 |
| 301 |
| (17) |
|
| -6 | % |
| 287 |
| (3) |
|
| -1% |
| |
| Data processing |
| 950 |
| 971 |
| (21) |
|
| -2 | % |
| 951 |
| (1) |
|
| 0% |
| |
| Professional services |
| 210 |
| 238 |
| (28) |
|
| -12 | % |
| 241 |
| (31) |
|
| -13% |
| |
| State and local taxes |
| 150 |
| 187 |
| (37) |
|
| -20 | % |
| 178 |
| (28) |
|
| -16% |
| |
| FDIC and State assessments |
| 134 |
| 144 |
| (10) |
|
| -7 | % |
| 154 |
| (20) |
|
| -13% |
| |
| Other noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
| Director fees |
| 88 |
| 82 |
| 6 |
|
| 7% | % |
| 71 |
| 17 |
|
| 24% |
|
|
| Communication |
| 67 |
| 73 |
| (6) |
|
| -8 | % |
| 59 |
| 8 |
|
| 14% |
|
|
| Advertising |
| 104 |
| 114 |
| (10) |
|
| -9 | % |
| 60 |
| 44 |
|
| 73% |
|
|
| Professional liability insurance |
| 72 |
| 79 |
| (7) |
|
| -9 | % |
| 67 |
| 5 |
|
| 7% |
|
|
| Amortization |
| 45 |
| 43 |
| 2 |
|
| 5% | % |
| 44 |
| 1 |
|
| 2% |
|
|
| Other |
| 793 |
| 821 |
| (28) |
|
| -3 | % |
| 759 |
| 34 |
|
| 4% |
|
| Total noninterest expense | $ | 9,532 | $ | 9,519 | $ | 13 |
|
| 0% | % | $ | 9,187 | $ | 345 |
|
| 4% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Investment Securities | ||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||
|
|
|
|
| Mar 31, |
| % of |
| Dec 31, |
| % of |
| $ |
| % |
| Mar 31, |
| % of |
| $ |
| % | ||||||||||
|
|
|
|
| (Dollars in thousands) | ||||||||||||||||||||||||||||
| Investment securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
|
| Collateralized mortgage obligations | $ | 129,213 |
|
| 45% |
| $ | 126,949 |
|
| 43% |
| $ | 2,264 |
|
| 2% |
| $ | 122,992 |
|
| 43% |
| $ | 6,221 |
|
| 5% |
| |
|
| Mortgage backed securities |
| 37,753 |
|
| 13% |
|
| 38,103 |
|
| 13% |
|
| (350) |
|
| -1% |
|
| 32,294 |
|
| 11% |
|
| 5,459 |
|
| 17% |
| |
|
| U.S. Government and agency securities |
| 77,826 |
|
| 27% |
|
| 83,748 |
|
| 29% |
|
| (5,922) |
|
| -7% |
|
| 84,814 |
|
| 30% |
|
| (6,988) |
|
| -8% |
| |
|
| Municipal securities |
| 43,647 |
|
| 15% |
|
| 44,779 |
|
| 15% |
|
| (1,132) |
|
| -3% |
|
| 44,827 |
|
| 16% |
|
| (1,180) |
|
| -3% |
| |
|
| Corporate debt securities |
| - |
|
| 0% |
|
| - |
|
| 0% |
|
| - |
|
| 0% |
|
| 998 |
|
| 0% |
|
| (998) |
|
| -100% |
| |
|
|
| Total | $ | 288,439 |
|
| 100% |
| $ | 293,579 |
|
| 100% |
| $ | (5,140) |
|
| -2% |
| $ | 285,925 |
|
| 100% |
| $ | 2,514 |
|
| 1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
| Held to maturity securities | $ | 49,132 |
|
| 17% |
| $ | 55,454 |
|
| 19% |
| $ | (6,322) |
|
| -11% |
| $ | 58,595 |
|
| 20% |
| $ | (9,463) |
|
| -16% |
| |
|
| Available for sale securities | $ | 239,307 |
|
| 83% |
| $ | 238,125 |
|
| 81% |
| $ | 1,182 |
|
| 0% |
| $ | 227,330 |
|
| 80% |
| $ | 11,977 |
|
| 5% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
| Government & Agency securities | $ | 244,762 |
|
| 85% |
| $ | 248,768 |
|
| 85% |
| $ | (4,006) |
|
| -2% |
| $ | 240,061 |
|
| 84% |
| $ | 4,701 |
|
| 2% |
| |
|
| AAA, AA, A rated securities | $ | 43,008 |
|
| 15% |
| $ | 43,687 |
|
| 15% |
| $ | (679) |
|
| -2% |
| $ | 44,614 |
|
| 16% |
| $ | (1,606) |
|
| -4% |
| |
|
| Non-rated securities | $ | 669 |
|
| 0% |
| $ | 1,124 |
|
| 0% |
| $ | (455) |
|
| -40% |
| $ | 1,250 |
|
| 0% |
| $ | (581) |
|
| -46% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
| AFS Unrealized Gain (Loss) | $ | (21,464) |
|
| -7% |
| $ | (20,808) |
|
| -7% |
| $ | (656) |
|
| 0% |
| $ | (20,518) |
|
| -7% |
| $ | (946) |
|
| 0% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Loans by Category | ||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
| Mar 31, |
| % of |
| Dec 31, |
| % of |
| $ |
| % |
| Mar 31, |
| % of |
| $ |
| % | ||||||||||
|
| Commercial: |
| (Dollars in thousands) | |||||||||||||||||||||||||||||
|
|
| Commercial and agricultural | $ | 71,212 |
|
| 10 | % | $ | 75,322 |
|
| 11 | % | $ | (4,110 | ) |
| -5 | % | $ | 75,279 |
|
| 12 | % | $ | (4,067 | ) |
| -5 | % |
|
|
| PPP |
| 108 |
|
| 0 | % |
| 122 |
|
| 0 | % |
| (14 | ) |
| -11 | % |
| 405 |
|
| 0 | % |
| (297 | ) |
| -73 | % |
|
| Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
|
| Construction and development |
| 51,978 |
|
| 7 | % |
| 48,720 |
|
| 7 | % |
| 3,258 |
|
| 7 | % |
| 34,918 |
|
| 5 | % |
| 17,060 |
|
| 49 | % | |
|
| Residential 1-4 family |
| 99,808 |
|
| 14 | % |
| 96,301 |
|
| 14 | % |
| 3,507 |
|
| 4 | % |
| 85,380 |
|
| 13 | % |
| 14,428 |
|
| 17 | % | |
|
| Multi-family |
| 54,430 |
|
| 8 | % |
| 51,025 |
|
| 7 | % |
| 3,405 |
|
| 7 | % |
| 40,882 |
|
| 6 | % |
| 13,548 |
|
| 33 | % | |
|
| Commercial real estate -- owner occupied |
| 167,631 |
|
| 24 | % |
| 164,443 |
|
| 24 | % |
| 3,188 |
|
| 2 | % |
| 160,534 |
|
| 25 | % |
| 7,097 |
|
| 4 | % | |
|
| Commercial real estate -- non owner occupied |
| 157,322 |
|
| 23 | % |
| 155,280 |
|
| 23 | % |
| 2,042 |
|
| 1 | % |
| 151,923 |
|
| 24 | % |
| 5,399 |
|
| 4 | % | |
|
| Farmland |
| 26,752 |
|
| 4 | % |
| 27,273 |
|
| 4 | % |
| (521 | ) |
| -2 | % |
| 26,451 |
|
| 4 | % |
| 301 |
|
| 1 | % | |
|
| Consumer |
| 64,988 |
|
| 10 | % |
| 66,863 |
|
| 10 | % |
| (1,875 | ) |
| -3 | % |
| 69,867 |
|
| 11 | % |
| (4,879 | ) |
| -7 | % | |
|
|
| Gross Loans |
| 694,229 |
|
| 100 | % |
| 685,349 |
|
| 100 | % |
| 8,880 |
|
| 1 | % |
| 645,639 |
|
| 100 | % |
| 48,590 |
|
| 8 | % |
|
|
| Less: allowance for loan losses |
| (8,580 | ) |
|
|
| (8,530 | ) |
|
|
| (50 | ) |
|
|
| (8,231 | ) |
|
|
| (349 | ) |
|
| |||||
|
|
| Less: deferred fees |
| (768 | ) |
|
|
| (795 | ) |
|
|
| 27 |
|
|
|
| (738 | ) |
|
|
| (30 | ) |
|
| |||||
|
|
| Net loans | $ | 684,881 |
|
|
| $ | 676,024 |
|
|
| $ | 8,857 |
|
|
| $ | 636,670 |
|
|
| $ | 48,211 |
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Loan Concentration | ||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||
|
|
|
|
| Mar 31, |
| % of Risk |
| Dec 31, |
| % of Risk |
| Change |
| Mar 31, |
| % of Risk |
| Change |
|
|
|
| ||||||||||
|
| Commercial: |
| (Dollars in thousands) |
|
|
|
| |||||||||||||||||||||||||
|
|
| Commercial and agricultural | $ | 71,212 |
|
| 51 | % | $ | 75,322 |
|
| 54 | % |
| -3 | % | $ | 75,279 |
|
| 57 | % |
| -6 | % |
|
|
|
| ||
|
|
| PPP |
| 108 |
|
| 0 | % |
| 122 |
|
| 0 | % |
| 0 | % |
| 405 |
|
| 0 | % |
| 0 | % |
|
|
|
| ||
|
| Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
|
| Construction and development |
| 51,978 |
|
| 37 | % |
| 48,720 |
|
| 35 | % |
| 2 | % |
| 34,918 |
|
| 26 | % |
| 11 | % |
|
|
|
| |||
|
| Residential 1-4 family |
| 99,808 |
|
| 72 | % |
| 96,301 |
|
| 70 | % |
| 2 | % |
| 85,380 |
|
| 64 | % |
| 8 | % |
|
|
|
| |||
|
| Multi-family |
| 54,430 |
|
| 39 | % |
| 51,025 |
|
| 37 | % |
| 2 | % |
| 40,882 |
|
| 31 | % |
| 8 | % |
|
|
|
| |||
|
| Commercial real estate -- owner occupied |
| 167,631 |
|
| 120 | % |
| 164,443 |
|
| 119 | % |
| 1 | % |
| 160,534 |
|
| 121 | % |
| -1 | % |
|
|
|
| |||
|
| Commercial real estate -- non owner occupied |
| 157,322 |
|
| 113 | % |
| 155,280 |
|
| 112 | % |
| 1 | % |
| 151,923 |
|
| 115 | % |
| -2 | % |
|
|
|
| |||
|
| Farmland |
| 26,752 |
|
| 19 | % |
| 27,273 |
|
| 20 | % |
| -1 | % |
| 26,451 |
|
| 20 | % |
| -1 | % |
|
|
|
| |||
|
| Consumer |
| 64,988 |
|
| 47 | % |
| 66,863 |
|
| 48 | % |
| -1 | % |
| 69,867 |
|
| 53 | % |
| -6 | % |
|
|
|
| |||
|
|
| Gross Loans | $ | 694,229 |
|
|
| $ | 685,349 |
|
|
|
|
| $ | 645,639 |
|
|
|
|
|
|
|
|
| |||||||
|
| Regulatory Commercial Real Estate | $ | 261,155 |
|
| 188 | % | $ | 252,493 |
|
| 182 | % |
| 6 | % | $ | 225,163 |
|
| 170 | % |
| 18 | % |
|
|
|
| |||
|
| Total Risk Based Capital* | $ | 139,255 |
|
|
| $ | 138,449 |
|
|
|
|
| $ | 132,579 |
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
| *Bank of the Pacific |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
| ||||||||||||||||||||||||||||||||
| The following table presents the Commercial real estate – non owner occupied loan balances, including loans in the process of construction and development, by collateral type: | ||||||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||
| Non-Owner Occupied Commercial Real Estate Composition* | ||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
| Mar 31, |
| % of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
| Multifamily | $ | 61,085 |
|
| 27 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
| Retail |
| 36,192 |
|
| 16 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
| Hospitality |
| 32,468 |
|
| 14 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
| Office |
| 23,730 |
|
| 10 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
| Mini Storage |
| 23,438 |
|
| 10 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
| Mixed Use |
| 22,204 |
|
| 10 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
| Industrial |
| 13,348 |
|
| 6 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
| Warehouse |
| 7,483 |
|
| 3 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
| Special Purpose |
| 7,058 |
|
| 3 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
| Other |
| 3,259 |
|
| 0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
| Total | $ | 230,265 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
| *Includes loans in the process of construction and development | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Deposits by Category | |||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
| Mar 31, |
| % of |
| Dec 31, |
| % of |
| $ |
| % |
| Mar 31, |
| % of |
| $ |
| % | |||||||
|
|
| (Dollars in thousands) | |||||||||||||||||||||||||
| Interest-bearing demand | $ | 177,735 |
| 17 | % | $ | 183,436 |
| 18 | % | $ | (5,701 | ) |
| -3 | % | $ | 215,853 |
| 20 | % | $ | (38,118 | ) |
| -18 | % |
| Money market |
| 169,095 |
| 17 | % |
| 179,344 |
| 17 | % |
| (10,249 | ) |
| -6 | % |
| 183,066 |
| 16 | % |
| (13,971 | ) |
| -8 | % |
| Savings |
| 129,796 |
| 13 | % |
| 136,408 |
| 14 | % |
| (6,612 | ) |
| -5 | % |
| 165,694 |
| 15 | % |
| (35,898 | ) |
| -22 | % |
| Time deposits (CDs) |
| 114,644 |
| 12 | % |
| 100,832 |
| 10 | % |
| 13,812 |
|
| 14 | % |
| 65,231 |
| 6 | % |
| 49,413 |
|
| 76 | % |
| Total interest-bearing deposits |
| 591,270 |
| 59 | % |
| 600,020 |
| 59 | % |
| (8,750 | ) |
| -1 | % |
| 629,844 |
| 57 | % |
| (38,574 | ) |
| -6 | % |
| Non-interest bearing demand |
| 404,486 |
| 41 | % |
| 409,272 |
| 41 | % |
| (4,786 | ) |
| -1 | % |
| 480,524 |
| 43 | % |
| (76,038 | ) |
| -16 | % |
| Total deposits | $ | 995,756 |
| 100 | % | $ | 1,009,292 |
| 100 | % | $ | (13,536 | ) |
| -1 | % | $ | 1,110,368 |
| 100 | % | $ | (114,612 | ) |
| -10 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| Insured Deposits | $ | 645,784 |
| 65 | % | $ | 647,330 |
| 64 | % | $ | (1,546 | ) |
| 0 | % | $ | 700,960 |
| 64 | % | $ | (55,176 | ) |
| -8 | % |
| Collaterialized Deposits |
| 127,733 |
| 13 | % |
| 129,895 |
| 13 | % |
| (2,162 | ) |
| -2 | % |
| 149,856 |
| 13 | % |
| (22,123 | ) |
| -15 | % |
| Uninsured Deposits |
| 222,239 |
| 22 | % |
| 232,067 |
| 23 | % |
| (9,828 | ) |
| -4 | % |
| 259,552 |
| 23 | % |
| (37,313 | ) |
| -14 | % |
| Total Deposits | $ | 995,756 |
| 100 | % | $ | 1,009,292 |
| 100 | % | $ | (13,536 | ) |
| -1 | % | $ | 1,110,368 |
| 100 | % | $ | (114,612 | ) |
| -10 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| Consumer Deposits | $ | 470,442 |
| 47 | % | $ | 470,425 |
| 46 | % | $ | 17 |
|
| 0 | % | $ | 502,430 |
| 45 | % | $ | (31,988 | ) |
| -6 | % |
| Business Deposits |
| 387,917 |
| 39 | % |
| 398,977 |
| 40 | % |
| (11,060 | ) |
| -3 | % |
| 447,778 |
| 40 | % |
| (59,861 | ) |
| -13 | % |
| Public Deposits |
| 137,397 |
| 14 | % |
| 139,890 |
| 14 | % |
| (2,493 | ) |
| -2 | % |
| 160,160 |
| 15 | % |
| (22,763 | ) |
| -14 | % |
| Total Deposits | $ | 995,756 |
| 100 | % | $ | 1,009,292 |
| 100 | % | $ | (13,536 | ) |
| -1 | % | $ | 1,110,368 |
| 100 | % | $ | (114,612 | ) |
| -10 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
The following table summarizes the capital measures of the Company and the Bank respectively, at the dates listed below.
| Capital Measures | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
|
| ||||||||||||||||||
|
| Mar 31, |
| Dec 31, |
| Change |
| Mar 31, |
| Change |
|
| Well |
| |||||
| Pacific Financial Corporation |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| Total risk-based capital ratio | 17.6 | % |
| 17.7 | % |
| (0.1 | ) |
| 17.5 | % |
| 0.1 |
|
| N/A |
| |
| Tier 1 risk-based capital ratio | 16.5 | % |
| 16.5 | % |
| - |
|
| 16.3 | % |
| 0.2 |
|
| N/A |
| |
| Common equity tier 1 ratio | 14.8 | % |
| 14.9 | % |
| (0.1 | ) |
| 14.6 | % |
| 0.2 |
|
| N/A |
| |
| Leverage ratio | 11.6 | % |
| 11.3 | % |
| 0.3 |
|
| 9.9 | % |
| 1.7 |
|
| N/A |
| |
| Tangible common equity ratio | 9.0 | % |
| 8.9 | % |
| 0.1 |
|
| 7.8 | % |
| 1.2 |
|
| N/A |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| Bank of the Pacific |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| Total risk-based capital ratio | 17.6 | % |
| 17.6 | % |
| - |
|
| 17.4 | % |
| 0.2 |
|
| 10.5 | % |
|
| Tier 1 risk-based capital ratio | 16.4 | % |
| 16.4 | % |
| - |
|
| 16.2 | % |
| 0.2 |
|
| 8.5 | % |
|
| Common equity tier 1 ratio | 16.4 | % |
| 16.4 | % |
| - |
|
| 16.2 | % |
| 0.2 |
|
| 7.0 | % |
|
| Leverage ratio | 11.5 | % |
| 11.2 | % |
| 0.3 |
|
| 9.8 | % |
| 1.7 |
|
| 7.5 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
The following tables set forth information regarding average balances of interest-earning assets and interest-bearing liabilities and the resultant yields or cost, and the net interest margin on a tax equivalent basis. Loans held for sale and non-accrual loans are included in total loans.
| Net Interest Margin | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
| (Annualized, tax-equivalent basis) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
|
| For the Three Months Ended, | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
|
| Mar 31, |
| Dec 31, |
| $ |
| % |
| Mar 31, |
| $ |
| % | |||||||
| Average Balances |
| (Dollars in thousands) | ||||||||||||||||||||
| Gross loans | $ | 688,918 |
| $ | 675,622 |
| $ | 13,296 |
|
| 2 | % | $ | 643,851 |
| $ | 45,067 |
|
| 7 | % | |
| Loans held for sale | $ | 595 |
| $ | 709 |
| $ | (114 | ) |
| -16 | % | $ | 584 |
| $ | 11 |
|
| 2 | % | |
| Investment securities | $ | 292,375 |
| $ | 289,245 |
| $ | 3,130 |
|
| 1 | % | $ | 287,714 |
| $ | 4,661 |
|
| 2 | % | |
| Federal funds sold & interest bearing deposits in banks | $ | 68,873 |
| $ | 105,177 |
| $ | (36,304 | ) |
| -35 | % | $ | 251,118 |
| $ | (182,245 | ) |
| -73 | % | |
| Total interest-earning assets | $ | 1,050,761 |
| $ | 1,070,753 |
| $ | (19,992 | ) |
| -2 | % | $ | 1,183,267 |
| $ | (132,506 | ) |
| -11 | % | |
| Non-interest bearing demand deposits | $ | 395,004 |
| $ | 419,994 |
| $ | (24,990 | ) |
| -6 | % | $ | 483,135 |
| $ | (88,131 | ) |
| -18 | % | |
| Interest bearing deposits | $ | 590,410 |
| $ | 593,464 |
| $ | (3,054 | ) |
| -1 | % | $ | 643,972 |
| $ | (53,562 | ) |
| -8 | % | |
| Total Deposits | $ | 985,414 |
| $ | 1,013,458 |
| $ | (28,044 | ) |
| -3 | % | $ | 1,127,107 |
| $ | (141,693 | ) |
| -13 | % | |
| Borrowings | $ | 13,403 |
| $ | 13,403 |
| $ | - |
|
| 0 | % | $ | 13,403 |
| $ | - |
|
| 0 | % | |
| Total interest-bearing liabilities | $ | 603,813 |
| $ | 606,867 |
| $ | (3,054 | ) |
| -1 | % | $ | 657,375 |
| $ | (53,562 | ) |
| -8 | % | |
| Total Equity | $ | 114,309 |
| $ | 107,251 |
| $ | 7,058 |
|
| 7 | % | $ | 106,612 |
| $ | 7,697 |
|
| 7 | % | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
|
| For the Three Months Ended, |
|
|
|
| |||||||||||||||
|
|
|
| Mar 31, |
| Dec 31, |
| Change |
| Mar 31, |
| Change |
|
|
|
| |||||||
| Yield on average gross loans (1) |
| 5.97 | % |
| 5.80 | % |
| 0.17 |
|
| 5.44 | % |
| 0.53 |
|
|
|
|
| |||
| Yield on average investment securities (1) |
| 3.45 | % |
| 3.48 | % |
| (0.03 | ) |
| 3.20 | % |
| 0.25 |
|
|
|
|
| |||
| Yield on Fed funds sold & interest bearing deposits in banks |
| 5.45 | % |
| 5.42 | % |
| 0.03 |
|
| 4.61 | % |
| 0.84 |
|
|
|
|
| |||
| Cost of average interest bearing deposits |
| 1.36 | % |
| 1.28 | % |
| 0.08 |
|
| 0.24 | % |
| 1.12 |
|
|
|
|
| |||
| Cost of average borrowings |
| 7.26 | % |
| 7.31 | % |
| (0.05 | ) |
| 6.45 | % |
| 0.81 |
|
|
|
|
| |||
| Cost of average total deposits and borrowings |
| 0.90 | % |
| 0.83 | % |
| 0.07 |
|
| 0.21 | % |
| 0.69 |
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| Yield on average interest-earning assets |
| 5.24 | % |
| 5.14 | % |
| 0.10 |
|
| 4.72 | % |
| 0.52 |
|
|
|
|
| |||
| Cost of average interest-bearing liabilities |
| 1.49 | % |
| 1.41 | % |
| 0.08 |
|
| 0.37 | % |
| 1.12 |
|
|
|
|
| |||
| Net interest spread |
| 3.75 | % |
| 3.73 | % |
| 0.02 |
|
| 4.35 | % |
| (0.60 | ) |
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| Net interest margin (1) |
| 4.38 | % |
| 4.34 | % |
| 0.04 |
|
| 4.51 | % |
| (0.13 | ) |
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| (1) Tax-exempt income has been adjusted to a tax equivalent basis at a rate of 21%. | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| Credit Quality | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
| Mar 31, |
| Dec 31, |
| $ |
| % |
| Mar 31, |
| $ |
| % | |||||||
| Risk rating: |
| (Dollars in thousands) | |||||||||||||||||||
| Pass | $ | 684,779 |
| $ | 674,993 |
| $ | 9,786 |
|
| 1 | % | $ | 635,187 |
| $ | 49,592 |
|
| 8 | % |
| Special Mention |
| 4,771 |
|
| 4,669 |
|
| 102 |
|
| 2 | % |
| 4,736 |
|
| 35 |
|
| 1 | % |
| Substandard |
| 4,679 |
|
| 5,687 |
|
| (1,008 | ) |
| -18 | % |
| 5,716 |
|
| (1,037 | ) |
| -18 | % |
| Gross Loans | $ | 694,229 |
| $ | 685,349 |
| $ | 8,880 |
|
| 1 | % | $ | 645,639 |
| $ | 48,590 |
|
| 8 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| Classified loans1 to gross loans |
| 0.67 | % |
| 0.83 | % |
|
|
|
|
| 0.89 | % |
|
|
|
| ||||
| ACL as a percentage of classified loans1 |
| 183.37 | % |
| 149.94 | % |
|
|
|
|
| 144.00 | % |
|
|
|
| ||||
| Delinquent loans 30-90 days, not in nonaccrual status, to gross loans |
| 0.10 | % |
| 0.08 | % |
|
|
|
|
| 0.03 | % |
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| ¹Classified loans include loans rated substandard or worse and are defined as loans having a well-defined weakness or weaknesses related to the borrower's financial capacity or to pledged collateral that may jeopardize the repayment of the debt. They are characterized by the possibility that the Bank may sustain some loss if the deficiencies giving rise to the substandard classification are not corrected. | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Nonperforming Assets | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
| Mar 31, |
| Dec 31, |
| $ |
| % |
| Mar 31, |
| $ |
| % | |||||||
|
|
| (Dollars in thousands) | |||||||||||||||||||
| Total nonaccrual loans, beginning of three month period | $ | 664 |
| $ | 1,219 |
| $ | (555 | ) |
| -46 | % | $ | 869 |
| $ | (205 | ) |
| -24 | % |
| Transfer to performing loans |
| - |
|
| (478 | ) |
| 478 |
|
| -100 | % |
| (21 | ) |
| 21 |
|
| -100 | % |
| Addition of nonaccrual loans |
| 1,089 |
|
| - |
|
| 1,089 |
|
| 100 | % |
| 241 |
|
| 848 |
|
| 352 | % |
| Moved to other assets owned |
| - |
|
| - |
|
| - |
|
| 0 | % |
| - |
|
| - |
|
| 0 | % |
| Principal payments, net |
| (227 | ) |
| (77 | ) |
| (150 | ) |
| 195 | % |
| (128 | ) |
| (99 | ) |
| 77 | % |
| Charge-offs, net |
| - |
|
| - |
|
| - |
|
| 0 | % |
| - |
|
| - |
|
| 0 | % |
| Total nonaccrual loans, end of three month period | $ | 1,526 |
| $ | 664 |
| $ | 862 |
|
| 130 | % | $ | 961 |
| $ | 565 |
|
| 59 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| Other real estate owned and foreclosed assets |
| - |
|
| - |
|
| - |
|
| 0 | % |
| - |
|
| - |
|
| 0 | % |
| Total nonperforming assets | $ | 1,526 |
| $ | 664 |
| $ | 862 |
|
| 130 | % | $ | 961 |
| $ | 565 |
|
| 59 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| Accruing loans past due 90 days or more | $ | - |
| $ | - |
| $ | - |
|
| 0 | % | $ | - |
| $ | - |
|
| 0 | % |
| Percentage of nonperforming assets to total assets |
| 0.13 | % |
| 0.06 | % |
|
|
|
|
| 0.08 | % |
|
|
|
| ||||
| Nonperforming loans to total loans |
| 0.22 | % |
| 0.10 | % |
|
|
|
|
| 0.15 | % |
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| Allowance for Credit Losses | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
| For the Three Months Ended, | |||||||||||||||||||
|
|
| Mar 31, 2024 |
| Dec 31, 2023 |
| $ Change |
| % Change |
| Mar 31, 2023 |
| $ Change |
| % Change | |||||||
| Loans: |
| (Dollars in thousands) | |||||||||||||||||||
| Gross loans outstanding at end of period | $ | 694,229 |
| $ | 685,349 |
| $ | 8,880 |
|
| 1 | % | $ | 645,639 |
| $ | 48,590 |
|
| 8 | % |
| Average loans outstanding, gross | $ | 688,918 |
| $ | 675,622 |
| $ | 13,296 |
|
| 2 | % | $ | 643,851 |
| $ | 45,067 |
|
| 7 | % |
| Allowance for credit losses, beginning of period | $ | 8,530 |
| $ | 8,347 |
| $ | 183 |
|
| 2 | % | $ | 8,236 |
| $ | 294 |
|
| 4 | % |
| Impact of CECL Adoption (ASC 326) |
| - |
|
| - |
|
| - |
|
| 0 | % |
| (157 | ) |
| 157 |
|
| -100 | % |
| Commercial |
| (3 | ) |
| - |
|
| (3 | ) |
| -100 | % |
| - |
|
| (3 | ) |
| -100 | % |
| Commercial Real Estate |
| - |
|
| - |
|
| - |
|
| 0 | % |
| - |
|
| - |
|
| 0 | % |
| Residential Real Estate |
| (2 | ) |
| - |
|
| (2 | ) |
| -100 | % |
| - |
|
| (2 | ) |
| -100 | % |
| Consumer |
| (30 | ) |
| (20 | ) |
| (10 | ) |
| 50 | % |
| (39 | ) |
| 9 |
|
| -23 | % |
| Total charge-offs |
| (35 | ) |
| (20 | ) |
| (15 | ) |
| 75 | % |
| (39 | ) |
| 4 |
|
| -10 | % |
| Commercial |
| - |
|
| 40 |
|
| (40 | ) |
| -100 | % |
| 27 |
|
| (27 | ) |
| -100 | % |
| Commercial Real Estate |
| - |
|
| - |
|
| - |
|
| 0 | % |
| - |
|
| - |
|
| 0 | % |
| Residential Real Estate |
| - |
|
| - |
|
| - |
|
| 0 | % |
| - |
|
| - |
|
| 0 | % |
| Consumer |
| 2 |
|
| 1 |
|
| 1 |
|
| 100 | % |
| 13 |
|
| (11 | ) |
| -85 | % |
| Total recoveries |
| 2 |
|
| 41 |
|
| (39 | ) |
| -95 | % |
| 40 |
|
| (38 | ) |
| -95 | % |
| Net recoveries/(charge-offs) |
| (33 | ) |
| 21 |
|
| (54 | ) |
| -257 | % |
| 1 |
|
| (34 | ) |
| -3400 | % |
| Provision (benefit) to income |
| 83 |
|
| 162 |
|
| (79 | ) |
| -49 | % |
| 151 |
|
| (68 | ) |
| -45 | % |
| Allowance for credit losses, end of period | $ | 8,580 |
| $ | 8,530 |
| $ | 50 |
|
| 1 | % | $ | 8,231 |
| $ | 349 |
|
| 4 | % |
| Ratio of net loans charged-off to average |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| gross loans outstanding, annualized |
| 0.02 | % |
| -0.01 | % |
| 0.03 | % |
|
|
| 0.00 | % |
| 0.02 | % |
|
| ||
| Ratio of allowance for credit losses to |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| gross loans outstanding |
| 1.24 | % |
| 1.24 | % |
| 0.00 | % |
|
|
| 1.27 | % |
| -0.03 | % |
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| Unfunded Loan Commitments: |
|
| |||||||||||||||||||
| Allowance for credit losses, beginning of period | $ | 698 |
| $ | 749 |
| $ | (51 | ) |
| -7 | % | $ | 203 |
| $ | 495 |
|
| 244 | % |
| Impact of CECL Adoption (ASC 326) |
| - |
|
| - |
|
| - |
|
| 0 | % |
| 609 |
|
| (609 | ) |
| -100 | % |
| Provision (benefit) to income |
| (50 | ) |
| (51 | ) |
| 1 |
|
| -2 | % |
| 5 |
|
| (55 | ) |
| -1100 | % |
| Allowance for credit losses, end of period | $ | 648 |
| $ | 698 |
| $ | (50 | ) |
| -7 | % | $ | 817 |
| $ | (169 | ) |
| -21 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
ABOUT PACIFIC FINANCIAL CORPORATION
Pacific Financial Corporation of Aberdeen, Washington, is the bank holding company for Bank of the Pacific, a state chartered and federally insured commercial bank. Bank of the Pacific offers banking products and services to small-to-medium sized businesses and professionals in western Washington and Oregon. At March 31, 2024, the Company had total assets of $1.13 billion and operated fifteen branches in the communities of Grays Harbor, Pacific, Thurston, Whatcom, Skagit, Clark and Wahkiakum counties in the State of Washington, and two branches in Clatsop County, Oregon. The Company also operated loan production offices in the communities of Burlington, Washington, Salem, Oregon and Lake Oswego, Oregon. Visit the Company’s website at www.bankofthepacific.com. Member FDIC.
Cautions Concerning Forward-Looking Statements
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other laws, including all statements in this release that are not historical facts or that relate to future plans or events or projected results of Pacific Financial Corporation and its wholly-owned subsidiary, Bank of the Pacific. Such statements are based on information available at the time of communication and are based on current beliefs and expectations of the Company’s management and are subject to risks and uncertainties, many of which are beyond our control, which could cause actual events or results to differ materially from those projected, anticipated or implied, and could negatively impact the Company’s operating and stock price performance. These risks and uncertainties include various risks associated with growing the Bank and expanding the services it provides, development of new business lines and markets, competition in the marketplace, general economic conditions, including the COVID-19 pandemic and government responses thereto, changes in interest rates, extensive and evolving regulation of the banking industry, and many other risks. Any forward-looking statements in this communication are based on information at the time the statement is made. We undertake no obligation to update or revise any forward-looking statement. Readers of this release are cautioned not to put undue reliance on forward-looking statements.