Pacific Continental Corporation Reports Third Quarter 2013 Results
Loan Growth and Interest Recoveries Drive Earnings
EUGENE, Ore., Oct. 16, 2013 /PRNewswire/ -- Pacific Continental Corporation (Nasdaq: PCBK), the holding company of Pacific Continental Bank, today reported financial results for the third quarter 2013.
Recent highlights:
- Net income $3.9 million or $0.22 per diluted share.
- Organic loan growth continued for seventh consecutive quarter.
- Period-end core deposits totaled $1 billion.
- Net loan recoveries recorded during the quarter.
- Declared fourth quarter 2013 quarterly cash dividend of $0.10 per share, an increase of $0.01 over the prior quarter, and special cash dividend of $0.12 per share.
- Total risk-based capital ratio of 16.42%, significantly above the 10.00% minimum for "well-capitalized" designation.
- Recognized by the Nonprofit Network of Southwest Washington with the Nonprofit Excellence in Corporate Community Support Award.
Net income
Net income for third quarter 2013 was $3.9 million or $0.22 per diluted share compared to net income of $3.4 million or $0.19 per diluted share in third quarter 2012. Included in the period were loan recoveries and interest recoveries, on two loans, totaling $613 thousand and $982 thousand, respectively. Also included in the period was a $728 thousand write down on a commercial land development property held in other real estate. Return on average assets, average book equity, and average tangible equity were 1.09%, 8.77%, and 10.12%, respectively, in third quarter 2013, compared to 1.03%, 7.52%, and 8.56% for the same quarter last year.
"We are pleased with the recent quarter and year-to-date results that reflect the excellent work of all departments within the bank," said Hal Brown, chief executive officer. "Loan and deposit growth strongly supported the board's decision to increase our regular dividend," added Brown.
Loan growth
Outstanding gross loans at September 30, 2013, were $978.7 million, up $18.2 million over the prior quarter end and up $141.7 million from third quarter 2012. After removing the loans acquired in the Century Bank transaction, organic loan growth for the first nine months of 2013 was $59.7 million representing an annualized growth rate of 9.15%. Loan growth for the third quarter was primarily centered in construction lending and commercial loans. At September 30, 2013, loans to dental professionals totaled $303.9 million representing 31.05% of the total loan portfolio. Outstanding loans to dental professionals grew 12.23% during the first nine months of 2013 and 23.74% over September 30, 2012. National dental lending at September 30, 2013, totaled $122.5 million, up $20.2 million during the third quarter.
"We are pleased to report that the sustained loan growth has been attributable to long standing commercial clients who are now taking advantage of the improving economy, combined with our strong health care referral network and concerted calling efforts on the part of our bankers," said Roger Busse, president and chief operating officer. "While competition for loans continues, we anticipate that our strong loan pipelines should lead to continued growth," added Busse.
Core deposit growth accelerates
Period-end Company-defined core deposits at September 30, 2013, were $1.0 billion and represented an increase of $56.9 million from the prior quarter end, reflecting the typical seasonal growth pattern during the last half of the year. At period-end September 30, 2013, noninterest-bearing demand deposits totaled $379.6 million and represented 37.37% of core deposits. Century Bank core deposit retention remained strong with September 30, 2013 balances at 94.31% of the February 1, 2013 acquisition total.
Net interest margin
The third quarter 2013 net interest margin, on a tax equivalent basis, was 4.58%, representing a linked-quarter increase of 38 basis points from second quarter 2013, and an increase of 42 basis points from third quarter 2012. Included in the third quarter net interest margin was $982 thousand of interest recoveries, which contributed 30 basis points to the third quarter margin. In addition, the accretion of the Century Bank loan fair value market adjustment positively impacted the net interest margin by 5 basis points.
Classified assets, provisioning and loan statistics
At September 30, 2013, classified assets totaled $54.5 million and represented 30.25% of regulatory capital, compared to $56.1 million and 31.18% of regulatory capital at December 31, 2012. Classified asset levels were temporarily increased by $5.8 million as a result of the Century Bank acquisition. Third quarter 2013 classified assets were lower than pre-acquisition levels.
Nonperforming assets, a subcategory of classified assets, totaled $21.8 million at September 30, 2013, or 1.50% of total assets, a decrease from December 31, 2012, and September 30, 2012, ratios of 1.92% and 2.14%, respectively. Nonperforming assets were comprised of $5.2 million of nonperforming loans, net of government guarantees, and $16.6 million in other real estate owned. Loans past-due 30-89 days were 0.37% of total loans at September 30, 2013, compared to 0.30% at December 31, 2012. This is the seventeenth consecutive quarter in which this ratio was near or below one percent.
Classified dental loans totaled 2.16% of total dental loans with net charge offs of $377 thousand through September 30, 2013. National dental lending statistics remain positive with no loans past due, and 0.60% of the national dental lending portfolio considered classified.
"Principal and interest recoveries of more than $1.7 million during the quarter reflected the successful efforts of our legal and special assets teams who diligently work on problem loan collection well after loan charge offs occurred," said Casey Hogan, executive vice president and chief credit officer.
The Company made no provision for loan losses during the third quarter 2013, with quarter to date net recoveries of $499 thousand. The allowance for loan losses as a percentage of outstanding loans at September 30, 2013, was 1.72% compared to 1.88% at December 31, 2012, and 1.95% at September 30, 2012. The allowance for loan losses as a percentage of total nonperforming loans, net of government guarantees, improved to 325.94% at September 30, 2013, from 167.87% reported one year ago, reflecting both a reduction in nonperforming loans and an overall general improvement in the quality of the loan portfolio.
Capital levels
The Company's capital ratios continued to be well above the minimum FDIC "well-capitalized" designated levels. At September 30, 2013, the Company's Tier 1 leverage ratio, Tier 1 risk-based capital ratio, and Total risk-based capital ratios were 11.56%, 15.16% and 16.42%, respectively, as compared to 12.53%, 17.37% and 18.62% at September 30, 2012, reflecting improved capital leverage. The FDIC's minimum "well-capitalized" ratios are 5.00%, 6.00% and 10.00%, respectively.
In February 2013, the Company's board of directors authorized a stock repurchase plan. The plan authorizes the repurchase up to 892,000 shares or five percent of the Company's outstanding shares. The plan commenced on April 1, 2013, with purchases to occur over a 12-month period. No shares were repurchased under the plan.
Noninterest income and expense
Noninterest income for the third quarter was $1.4 million, up $32 thousand over third quarter 2012, reflecting a small increase in both service charge and bankcard income. Noninterest expense in third quarter 2013 was up $1.7 million over third quarter 2012, with a portion of the increase centered in other real estate expense, which includes the effects of the $728 thousand third quarter other real estate write down. In addition, compensation and business development expenses were up, reflecting the addition of business development personnel who have increased calling efforts during 2013 as evidenced by the Bank's loan growth. The third quarter efficiency ratio was 63.82% compared to 62.70% for third quarter 2012.
Conference call and audio webcast
Management will conduct a live conference call and audio webcast for interested parties relating to the Company's results for the third quarter 2013 on Thursday, October 17, 2013, at 11:00 a.m. Pacific / 2:00 p.m. Eastern. To listen to the conference call, interested parties should call 866-292-1418. Following the formal remarks, a question and answer session will be open to all interested parties. The webcast will be available via Pacific Continental's website www.therightbank.com. To listen to the live audio webcast, click on the webcast presentation link on the Company's home page a few minutes before the presentation is scheduled to begin. An audio webcast replay is typically available within twenty-four hours following the live webcast and will be archived for one year on the Pacific Continental website. Any questions regarding the conference call presentation or webcast should be directed to Shannon Coffin, executive administrative assistant, at 541-686-8685.
About Pacific Continental Bank
Pacific Continental Bank, the operating subsidiary of Pacific Continental Corporation, delivers highly personalized services through fourteen banking offices in Oregon and Washington. The Bank also operates loan production offices in Tacoma, Washington and Denver, Colorado. Pacific Continental, with $1.4 billion in assets, has established one of the most unique and attractive metropolitan branch networks in the Pacific Northwest with offices in three of the region's largest markets including Seattle, Portland and Eugene. Pacific Continental targets the banking needs of community-based businesses, health care professionals, professional service providers and nonprofit organizations.
Since its founding in 1972, Pacific Continental Bank has been honored with numerous awards and recognitions from highly regarded third-party organizations including The Seattle Times, the Portland Business Journal, the Seattle Business magazine and Oregon Business magazine. A complete list of the company's awards and recognitions – as well as supplementary information about Pacific Continental Bank – can be found online at www.therightbank.com. Pacific Continental Corporation's shares are listed on the Nasdaq Global Select Market under the symbol "PCBK" and are a component of the Russell 2000 Index.
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" "anticipates" and other similar expressions or future or conditional verbs such as "will," "should," "would" and "could." The forward-looking statements made represent Pacific Continental's current estimates, projections, expectations, plans or forecasts of its future results and revenues, including but not limited to statements about performance, loan growth, capital strategy, future classified and problem asset migration and credit quality trends and economic conditions generally. 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 Pacific Continental'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, as well as those more fully discussed under "Risk Factors", "Business", and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Pacific Continental's most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, and in any of Pacific Continental's subsequent SEC filings, including the high concentration of loans of the Company's banking subsidiary in commercial and residential real estate lending and our significant concentration in loans to dental professionals; adverse economic trends in the United States and the markets we serve affecting the Bank's borrower base; a continued decline in the housing and real estate market; a continued increase in unemployment or sustained high levels of unemployment; continued erosion or sustained low levels of consumer confidence; changes in the Federal Reserve's monetary policies and the regulatory environment and increases in associated costs, particularly ongoing compliance expenses and resource allocation needs; vendor quality and efficiency; the Company's ability to control risks associated with rapidly changing technology both from an internal perspective as well as for external providers operational systems or infrastructure failures; increased competition; fluctuating interest rates; a tightening of available credit; the potential adverse impact of legal or regulatory proceedings; and risks related to acquisitions, including integration, retention of key personnel and business, anticipated cost savings and results and performance of the acquired company or the combined entity. Pacific Continental Corporation 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 PSLRA's safe harbor provisions.
| PACIFIC CONTINENTAL CORPORATION |
||||||||
| Consolidated Income Statements |
||||||||
| (In thousands, except share and per share amounts) |
||||||||
| (Unaudited) |
||||||||
| Three months ended |
Nine months ended |
|||||||
| September 30, |
September 30, |
September 30, |
September 30, |
|||||
| 2013 |
2012 |
2013 |
2012 |
|||||
| Interest and dividend income |
||||||||
| Loans |
$ 14,028 |
$ 11,971 |
$ 39,793 |
$ 36,089 |
||||
| Taxable securities |
1,489 |
1,490 |
4,164 |
4,886 |
||||
| Tax-exempt securities |
488 |
420 |
1,430 |
1,162 |
||||
| Federal funds sold & interest-bearing deposits with banks |
2 |
2 |
7 |
4 |
||||
| 16,007 |
13,883 |
45,394 |
42,141 |
|||||
| Interest expense |
||||||||
| Deposits |
801 |
992 |
2,586 |
3,149 |
||||
| Federal Home Loan Bank & Federal Reserve borrowings |
292 |
364 |
905 |
1,259 |
||||
| Junior subordinated debentures |
51 |
38 |
140 |
116 |
||||
| Federal funds purchased |
5 |
4 |
12 |
20 |
||||
| 1,149 |
1,398 |
3,643 |
4,544 |
|||||
| Net interest income |
14,858 |
12,485 |
41,751 |
37,597 |
||||
| Provision for loan losses |
- |
- |
250 |
1,900 |
||||
| Net interest income after provision for loan losses |
14,858 |
12,485 |
41,501 |
35,697 |
||||
| Noninterest income |
||||||||
| Service charges on deposit accounts |
487 |
463 |
1,436 |
1,359 |
||||
| Other fee income, principally bankcard |
432 |
408 |
1,217 |
1,205 |
||||
| Mortgage banking income |
- |
- |
- |
72 |
||||
| Bank-owned life insurance income |
131 |
157 |
387 |
432 |
||||
| Loss on sale of investment securities |
- |
- |
(8) |
- |
||||
| Impairment losses on investment securities (OTTI) |
- |
- |
(16) |
- |
||||
| Other noninterest income |
397 |
387 |
1,248 |
1,290 |
||||
| 1,447 |
1,415 |
4,264 |
4,358 |
|||||
| Noninterest expense |
||||||||
| Salaries and employee benefits |
5,541 |
4,720 |
16,344 |
14,721 |
||||
| Premises and equipment |
919 |
838 |
2,746 |
2,553 |
||||
| Data processing |
659 |
538 |
1,954 |
1,543 |
||||
| Legal and professional fees |
421 |
435 |
1,460 |
1,378 |
||||
| Business development |
421 |
376 |
1,375 |
1,088 |
||||
| FDIC insurance assessment |
231 |
285 |
674 |
814 |
||||
| Bankcard processing |
150 |
147 |
418 |
440 |
||||
| Other real estate expense |
1,185 |
466 |
1,762 |
1,082 |
||||
| Merger related expenses(1) |
- |
- |
1,246 |
- |
||||
| Other noninterest expense |
879 |
910 |
2,708 |
2,579 |
||||
| 10,406 |
8,715 |
30,687 |
26,198 |
|||||
| Income before provision for income taxes |
5,899 |
5,185 |
15,078 |
13,857 |
||||
| Provision for income taxes |
1,959 |
1,747 |
4,963 |
4,587 |
||||
| Net income |
$ 3,940 |
$ 3,438 |
$ 10,115 |
$ 9,270 |
||||
| Earnings per share: |
||||||||
| Basic |
$ 0.22 |
$ 0.19 |
$ 0.57 |
$ 0.51 |
||||
| Diluted |
$ 0.22 |
$ 0.19 |
$ 0.56 |
$ 0.51 |
||||
| Weighted average shares outstanding: |
||||||||
| Basic |
17,888,182 |
17,978,081 |
17,865,582 |
18,166,377 |
||||
| Common stock equivalents attributable to stock-based awards |
221,100 |
152,964 |
191,046 |
152,957 |
||||
| Diluted |
18,109,282 |
18,131,045 |
18,056,628 |
18,319,334 |
||||
| PERFORMANCE RATIOS |
||||||||
| Return on average assets |
1.09% |
1.03% |
0.95% |
0.95% |
||||
| Return on average equity (book) |
8.77% |
7.52% |
7.46% |
6.85% |
||||
| Return on average equity (tangible) (2) |
10.12% |
8.56% |
8.58% |
7.81% |
||||
| Net interest margin (3) |
4.58% |
4.16% |
4.36% |
4.28% |
||||
| Efficiency ratio (4) |
63.82% |
62.70% |
66.69% |
62.44% |
||||
| (1) |
Represents expenses associated with the acquisition of Century Bank. |
| (2) |
Tangible equity excludes goodwill and core deposit intangible assets related to acquisitions. |
| (3) |
Net interest margin is reported on a tax-equivalent yield basis at a 35% tax rate. |
| (4) |
Efficiency ratio is noninterest expense divided by operating revenues. Operating revenues are net interest income plus noninterest income. |
| PACIFIC CONTINENTAL CORPORATION |
||||||
| Consolidated Balance Sheets |
||||||
| (In thousands, except share amounts) |
||||||
| (Unaudited) |
||||||
| September 30, |
December 31, |
September 30, |
||||
| 2013 |
2012 |
2012 |
||||
| ASSETS |
||||||
| Cash and due from banks |
$ 42,555 |
$ 28,607 |
$ 20,840 |
|||
| Interest-bearing deposits with banks |
54 |
94 |
53 |
|||
| Total cash and cash equivalents |
42,609 |
28,701 |
20,893 |
|||
| Securities available-for-sale |
347,506 |
389,885 |
406,175 |
|||
| Loans, less allowance for loan losses and net deferred fees |
960,916 |
854,071 |
819,922 |
|||
| Interest receivable |
4,608 |
4,520 |
4,861 |
|||
| Federal Home Loan Bank stock |
10,523 |
10,462 |
10,557 |
|||
| Property and equipment, net of accumulated depreciation |
19,116 |
19,238 |
19,478 |
|||
| Goodwill and intangible assets |
23,710 |
22,031 |
22,068 |
|||
| Deferred tax asset |
9,438 |
6,230 |
6,803 |
|||
| Taxes receivable |
130 |
- |
- |
|||
| Other real estate owned |
16,602 |
17,972 |
19,235 |
|||
| Prepaid FDIC assessment |
- |
1,746 |
1,998 |
|||
| Bank-owned life insurance |
16,008 |
15,621 |
15,469 |
|||
| Other assets |
3,712 |
3,010 |
2,963 |
|||
| Total assets |
$ 1,454,878 |
$ 1,373,487 |
$ 1,350,422 |
|||
| LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||
| Deposits |
||||||
| Noninterest-bearing demand |
$ 379,598 |
$ 329,825 |
$ 304,016 |
|||
| Savings and interest-bearing checking |
565,204 |
554,693 |
520,218 |
|||
| Time $100,000 and over |
81,569 |
73,610 |
77,790 |
|||
| Other time |
91,158 |
88,026 |
78,138 |
|||
| Total deposits |
1,117,529 |
1,046,154 |
980,162 |
|||
| Federal funds and overnight funds purchased |
- |
11,570 |
9,385 |
|||
| Federal Home Loan Bank borrowings |
145,000 |
118,000 |
165,000 |
|||
| Junior subordinated debentures |
8,248 |
8,248 |
8,248 |
|||
| Accrued interest and other payables |
4,423 |
6,134 |
4,848 |
|||
| Total liabilities |
1,275,200 |
1,190,106 |
1,167,643 |
|||
| Shareholders' equity |
||||||
| Common stock: 50,000,000 shares authorized. Shares issued and outstanding: 17,888,251 at September 30, 2013, 17,835,088 at December 31, 2012 and 17,900,188 at September 30, 2012 |
133,597 |
133,017 |
133,385 |
|||
| Retained earnings |
45,533 |
44,533 |
43,113 |
|||
| Accumulated other comprehensive income |
548 |
5,831 |
6,281 |
|||
| 179,678 |
183,381 |
182,779 |
||||
| Total liabilities and shareholders' equity |
$ 1,454,878 |
$ 1,373,487 |
$ 1,350,422 |
|||
| CAPITAL RATIOS |
||||||
| Total capital (to risk weighted assets) |
16.42% |
18.15% |
18.62% |
|||
| Tier I capital (to risk weighted assets) |
15.16% |
16.90% |
17.37% |
|||
| Tier I capital (to leverage assets) |
11.56% |
12.33% |
12.53% |
|||
| Tangible common equity (to tangible assets)(1) |
10.90% |
11.94% |
12.10% |
|||
| Tangible common equity (to risk-weighted assets)(1) |
14.47% |
16.67% |
17.18% |
|||
| OTHER FINANCIAL DATA |
||||||
| Shares outstanding at end of period |
17,888,251 |
17,835,088 |
17,900,188 |
|||
| Tangible shareholders' equity(1) |
$ 155,968 |
$ 161,350 |
$ 160,711 |
|||
| Book value per share |
$ 10.04 |
$ 10.28 |
$ 10.21 |
|||
| Tangible book value per share |
$ 8.72 |
$ 9.05 |
$ 8.98 |
|||
| (1) |
Tangible common equity excludes goodwill and core deposit intangible assets related to acquisitions. |
| PACIFIC CONTINENTAL CORPORATION |
||||||||
| Loans by Type and Allowance for Loan Losses |
||||||||
| (In thousands) |
||||||||
| (Unaudited) |
||||||||
| September 30, |
December 31, |
September 30, |
||||||
| 2013 |
2012 |
2012 |
||||||
| LOANS BY TYPE |
||||||||
| Real estate secured loans: |
||||||||
| Permanent loans: |
||||||||
| Multi-family residential |
$ 47,795 |
$ 45,212 |
$ 43,080 |
|||||
| Residential 1-4 family |
49,206 |
51,437 |
53,556 |
|||||
| Owner-occupied commercial |
244,828 |
219,276 |
222,374 |
|||||
| Nonowner-occupied commercial |
164,708 |
145,315 |
140,104 |
|||||
| Total permanent real estate loans |
506,537 |
461,240 |
459,114 |
|||||
| Construction loans: |
||||||||
| Multi-family residential |
22,929 |
17,022 |
12,794 |
|||||
| Residential 1-4 family |
29,880 |
20,390 |
18,108 |
|||||
| Commercial real estate |
24,106 |
23,235 |
15,817 |
|||||
| Commercial bare land and acquisition & development |
11,191 |
10,668 |
9,887 |
|||||
| Residential bare land and acquisition & development |
7,053 |
8,405 |
9,108 |
|||||
| Total construction real estate loans |
95,159 |
79,720 |
65,714 |
|||||
| Total real estate loans |
601,696 |
540,960 |
524,828 |
|||||
| Commercial loans |
372,129 |
325,604 |
306,870 |
|||||
| Consumer loans |
3,660 |
3,581 |
3,941 |
|||||
| Other loans |
1,188 |
1,112 |
1,334 |
|||||
| Gross loans |
978,673 |
871,257 |
836,973 |
|||||
| Deferred loan origination fees |
(955) |
(841) |
(768) |
|||||
| 977,718 |
870,416 |
836,205 |
||||||
| Allowance for loan losses |
(16,802) |
(16,345) |
(16,283) |
|||||
| $ 960,916 |
$ 854,071 |
$ 819,922 |
||||||
| Three months ended |
Nine months ended |
|||||||
| September 30, |
September 30, |
September 30, |
September 30, |
|||||
| ALLOWANCE FOR LOAN LOSSES |
2013 |
2012 |
2013 |
2012 |
||||
| Balance at beginning of period |
$ 16,303 |
$ 16,175 |
$ 16,346 |
$ 14,941 |
||||
| Provision for loan losses |
- |
- |
250 |
1,900 |
||||
| Loan charge offs |
(221) |
(1,140) |
(1,049) |
(2,809) |
||||
| Loan recoveries |
720 |
1,248 |
1,255 |
2,251 |
||||
| Net recoveries (charge offs) |
499 |
108 |
206 |
(558) |
||||
| Balance at end of period |
$ 16,802 |
$ 16,283 |
$ 16,802 |
$ 16,283 |
||||
| PACIFIC CONTINENTAL CORPORATION |
||||||||
| Selected Other Financial Information and Ratios |
||||||||
| (In thousands) |
||||||||
| (Unaudited) |
||||||||
| Three months ended |
Nine months ended |
|||||||
| September 30, |
September 30, |
September 30, |
September 30, |
|||||
| 2013 |
2012 |
2013 |
2012 |
|||||
| BALANCE SHEET AVERAGES |
||||||||
| Loans(1) |
$ 974,775 |
$ 832,845 |
$ 949,531 |
$ 828,283 |
||||
| Allowance for loan losses |
(16,403) |
(16,151) |
(16,419) |
(16,002) |
||||
| Loans, net of allowance |
958,372 |
816,694 |
933,112 |
812,281 |
||||
| Securities and short-term deposits |
351,536 |
399,224 |
371,495 |
379,338 |
||||
| Earning assets |
1,309,908 |
1,215,918 |
1,304,607 |
1,191,619 |
||||
| Noninterest-earning assets |
125,349 |
111,159 |
124,062 |
111,707 |
||||
| Assets |
$ 1,435,257 |
$ 1,327,077 |
$ 1,428,669 |
$ 1,303,326 |
||||
| Interest-bearing core deposits(2) |
$ 625,795 |
$ 579,469 |
$ 633,338 |
$ 578,648 |
||||
| Noninterest-bearing core deposits(2) |
346,692 |
300,091 |
327,643 |
290,847 |
||||
| Core deposits(2) |
972,487 |
879,560 |
960,981 |
869,495 |
||||
| Noncore interest-bearing deposits |
105,408 |
99,852 |
108,363 |
92,827 |
||||
| Deposits |
1,077,895 |
979,412 |
1,069,344 |
962,322 |
||||
| Borrowings |
174,973 |
161,215 |
174,217 |
156,001 |
||||
| Other noninterest-bearing liabilities |
4,144 |
4,606 |
3,911 |
4,252 |
||||
| Liabilities |
1,257,012 |
1,145,233 |
1,247,472 |
1,122,575 |
||||
| Shareholders' equity (book) |
178,245 |
181,844 |
181,197 |
180,751 |
||||
| Liabilities and equity |
$ 1,435,257 |
$ 1,327,077 |
$ 1,428,669 |
$ 1,303,326 |
||||
| Shareholders' equity (tangible)(3) |
$ 154,519 |
$ 159,756 |
$ 157,657 |
$ 158,598 |
||||
| SELECTED MARKET DATA |
||||||||
| Eugene market gross loans, period-end |
$ 324,320 |
$ 240,013 |
||||||
| Portland market gross loans, period-end |
390,014 |
375,234 |
||||||
| Seattle market gross loans, period-end |
136,178 |
151,745 |
||||||
| National health care gross loans, period-end (4) |
128,161 |
69,981 |
||||||
| Total gross loans, period-end |
$ 978,673 |
$ 836,973 |
||||||
| Eugene market core deposits, period-end(2) |
$ 596,403 |
$ 512,842 |
||||||
| Portland market core deposits, period-end(2) |
256,710 |
226,576 |
||||||
| Seattle market core deposits, period-end(2) |
162,538 |
143,196 |
||||||
| Total core deposits, period-end(2) |
1,015,651 |
882,614 |
||||||
| Other deposits, period-end |
101,878 |
97,548 |
||||||
| Total |
$ 1,117,529 |
$ 980,162 |
||||||
| Eugene market core deposits, average(2) |
$ 589,123 |
$ 508,927 |
||||||
| Portland market core deposits, average(2) |
240,612 |
229,913 |
||||||
| Seattle market core deposits, average(2) |
142,752 |
140,720 |
||||||
| Total core deposits, average(2) |
972,487 |
879,560 |
||||||
| Other deposits, average |
105,408 |
99,852 |
||||||
| Total |
$ 1,077,895 |
$ 979,412 |
||||||
| NET INTEREST MARGIN RECONCILIATION |
||||||||
| Yield on average loans |
5.81% |
5.83% |
5.70% |
5.93% |
||||
| Yield on average securities(5) |
2.53% |
2.13% |
2.29% |
2.35% |
||||
| Yield on average earning assets(5) |
4.93% |
4.62% |
4.73% |
4.79% |
||||
| Rate on average interest-bearing core deposits |
0.33% |
0.45% |
0.35% |
0.49% |
||||
| Rate on average interest-bearing non-core deposits |
1.08% |
1.34% |
1.16% |
1.46% |
||||
| Rate on average interest-bearing deposits |
0.43% |
0.58% |
0.47% |
0.63% |
||||
| Rate on average borrowings |
0.79% |
1.00% |
0.81% |
1.19% |
||||
| Cost of interest-bearing funds |
0.50% |
0.66% |
0.53% |
0.73% |
||||
| Interest rate spread(5) |
4.42% |
3.96% |
4.20% |
4.06% |
||||
| Net interest margin(5) |
4.58% |
4.16% |
4.36% |
4.28% |
||||
| (1) |
Includes loans held-for-sale. |
| (2) |
Core deposits include demand, interest checking, money market, savings, and local time deposits, including local nonpublic time deposits in excess of $100 thousand. |
| (3) |
Tangible equity excludes goodwill and core deposit intangible assets related to acquisitions. |
| (4) |
National health care loans include loans to heath care professionals, primarily dental practitioners, operating outside of Pacific Continental Bank's market area. The market area is defined as Oregon and Washington West of the Cascade Mountain Range. |
| (5) |
Tax-exempt income has been adjusted to a tax-equivalent basis at a 35% tax rate. The amount of such adjustment was an addition to recorded income of approximately $263 and $266 for the three months ended September 30, 2013, and September 30, 2012, respectively and $770 thousand, and $625 thousand for the nine months ended September 30, 2013, and September 30, 2012, respectively. |
| PACIFIC CONTINENTAL CORPORATION |
||||||||||||
| Nonperforming Assets and Asset Quality Ratios |
||||||||||||
| (In thousands) |
||||||||||||
| (Unaudited) |
||||||||||||
| September 30, |
December 31, |
September 30, |
||||||||||
| 2013 |
2012 |
2012 |
||||||||||
| NONPERFORMING ASSETS |
||||||||||||
| Non-accrual loans |
||||||||||||
| Real estate secured loans: |
||||||||||||
| Permanent loans: |
||||||||||||
| Multi-family residential |
$ - |
$ - |
$ - |
|||||||||
| Residential 1-4 family |
1,206 |
1,140 |
2,517 |
|||||||||
| Owner-occupied commercial |
2,235 |
3,805 |
3,624 |
|||||||||
| Nonowner-occupied commercial |
139 |
- |
- |
|||||||||
| Total permanent real estate loans |
3,580 |
4,945 |
6,141 |
|||||||||
| Construction loans: |
||||||||||||
| Multi-family residential |
- |
- |
- |
|||||||||
| Residential 1-4 family |
- |
- |
- |
|||||||||
| Commercial real estate |
- |
- |
- |
|||||||||
| Commercial bare land and acquisition & development |
- |
- |
- |
|||||||||
| Residential bare land and acquisition & development |
- |
101 |
104 |
|||||||||
| Total construction real estate loans |
- |
101 |
104 |
|||||||||
| Total real estate loans |
3,580 |
5,046 |
6,245 |
|||||||||
| Commercial loans |
2,361 |
4,315 |
4,578 |
|||||||||
| Total nonaccrual loans |
5,941 |
9,361 |
10,823 |
|||||||||
| 90-days past due and accruing interest |
- |
- |
- |
|||||||||
| Total nonperforming loans |
5,941 |
9,361 |
10,823 |
|||||||||
| Nonperforming loans guaranteed by government |
(786) |
(905) |
(1,123) |
|||||||||
| Net nonperforming loans |
5,155 |
8,456 |
9,700 |
|||||||||
| Other real estate owned |
16,602 |
17,972 |
19,235 |
|||||||||
| Total nonperforming assets, net of guaranteed loans |
$ 21,757 |
$ 26,428 |
$ 28,935 |
|||||||||
| ASSET QUALITY RATIOS |
||||||||||||
| Allowance for loan losses as a percentage of total loans outstanding |
1.72% |
1.88% |
1.95% |
|||||||||
| Allowance for loan losses as a percentage of total nonperforming loans, net of government guarantees |
325.94% |
193.29% |
167.87% |
|||||||||
| Net loan charge offs (recoveries) as a percentage of average loans, annualized |
-0.03% |
0.06% |
0.09% |
|||||||||
| Net nonperforming loans as a percentage of total loans |
0.53% |
0.97% |
1.16% |
|||||||||
| Nonperforming assets as a percentage of total assets |
1.50% |
1.92% |
2.14% |
|||||||||
| Consolidated classified asset ratio(1) |
30.25% |
31.18% |
32.43% |
|||||||||
| Past due as a percentage of total loans(2) |
0.37% |
0.30% |
0.47% |
|||||||||
| (1) |
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 total consolidated Tier 1 capital plus the allowance for loan losses. |
|||||||||
| (2) |
Defined as loans past due more than 30 days and still accruing interest, as a percentage of total loans, net of deferred fees. |
|||||||||
| PACIFIC CONTINENTAL CORPORATION |
||||||||||||||||
| Aged Analysis of Loans Receivable (Unaudited) |
||||||||||||||||
| (In thousands) |
||||||||||||||||
| As of September 30, 2013 |
||||||||||||||||
| Greater |
||||||||||||||||
| 30-59 Days |
60-89 Days |
Than 90 Days |
Total Past |
|||||||||||||
| Past Due |
Past Due |
Past Due |
Due and |
Total |
Total Loans |
|||||||||||
| Still Accruing |
Still Accruing |
Still Accruing |
Nonaccrual |
Nonaccrual |
Current |
Receivable |
||||||||||
| Real estate loans |
||||||||||||||||
| Multi-family residential |
$ - |
$ - |
$ - |
$ - |
$ - |
$ 47,795 |
$ 47,795 |
|||||||||
| Residential 1-4 family |
- |
- |
- |
1,206 |
1,206 |
48,000 |
49,206 |
|||||||||
| Owner-occupied commercial |
166 |
166 |
- |
2,235 |
2,567 |
242,261 |
244,828 |
|||||||||
| Nonowner-occupied commercial |
1,096 |
559 |
- |
139 |
1,794 |
162,914 |
164,708 |
|||||||||
| Total real estate loans |
1,262 |
725 |
- |
3,580 |
5,567 |
500,970 |
506,537 |
|||||||||
| Construction |
||||||||||||||||
| Multi-family residential |
- |
- |
- |
- |
- |
22,929 |
22,929 |
|||||||||
| Residential 1-4 family |
- |
- |
- |
- |
- |
29,880 |
29,880 |
|||||||||
| Commercial real estate |
- |
- |
- |
- |
- |
24,106 |
24,106 |
|||||||||
| Commercial bare land and acquisition & development |
- |
- |
- |
- |
- |
11,191 |
11,191 |
|||||||||
| Residential bare land and acquisition & development |
- |
- |
- |
- |
- |
7,053 |
7,053 |
|||||||||
| Total construction loans |
- |
- |
- |
- |
- |
95,159 |
95,159 |
|||||||||
| Commercial and other |
1,292 |
325 |
- |
2,361 |
3,978 |
369,339 |
373,317 |
|||||||||
| Consumer |
5 |
- |
- |
- |
5 |
3,655 |
3,660 |
|||||||||
| Total |
$ 2,559 |
$ 1,050 |
$ - |
$ 5,941 |
$ 9,550 |
$ 969,123 |
$ 978,673 |
|||||||||
| PACIFIC CONTINENTAL CORPORATION |
||||||||||||||||
| Aged Analysis of Loans Receivable (Unaudited) |
||||||||||||||||
| (In thousands) |
||||||||||||||||
| As of September 30, 2012 |
||||||||||||||||
| Greater |
||||||||||||||||
| 30-59 Days |
60-89 Days |
Than 90 Days |
Total Past |
|||||||||||||
| Past Due |
Past Due |
Past Due |
Due and |
Total |
Total Loans |
|||||||||||
| Still Accruing |
Still Accruing |
Still Accruing |
Nonaccrual |
Nonaccrual |
Current |
Receivables |
||||||||||
| Real estate loans |
||||||||||||||||
| Multi-family residential |
$ - |
$ - |
$ - |
$ - |
$ - |
$ 43,080 |
$ 43,080 |
|||||||||
| Residential 1-4 family |
208 |
- |
- |
2,517 |
2,725 |
50,831 |
53,556 |
|||||||||
| Owner-occupied commercial |
- |
340 |
- |
3,624 |
3,964 |
218,410 |
222,374 |
|||||||||
| Nonowner-occupied commercial |
92 |
- |
- |
- |
92 |
140,012 |
140,104 |
|||||||||
| Total real estate loans |
300 |
340 |
- |
6,141 |
6,781 |
452,333 |
459,114 |
|||||||||
| Construction |
||||||||||||||||
| Multi-family residential |
- |
- |
- |
- |
- |
12,794 |
12,794 |
|||||||||
| Residential 1-4 family |
192 |
- |
- |
- |
192 |
17,916 |
18,108 |
|||||||||
| Commercial real estate |
1,598 |
- |
- |
- |
1,598 |
14,219 |
15,817 |
|||||||||
| Commercial bare land and acquisition & development |
- |
- |
- |
- |
- |
9,887 |
9,887 |
|||||||||
| Residential bare land and acquisition & development |
- |
- |
- |
104 |
104 |
9,004 |
9,108 |
|||||||||
| Total construction loans |
1,790 |
- |
- |
104 |
1,894 |
63,820 |
65,714 |
|||||||||
| Commercial and other |
1,508 |
- |
- |
4,578 |
6,086 |
302,118 |
308,204 |
|||||||||
| Consumer |
5 |
- |
- |
- |
5 |
3,936 |
3,941 |
|||||||||
| Total |
$ 3,603 |
$ 340 |
$ - |
$ 10,823 |
$ 14,766 |
$ 822,207 |
$ 836,973 |
|||||||||
| PACIFIC CONTINENTAL CORPORATION |
|||||||||||
| Credit Quality Indicators (Unaudited) |
|||||||||||
| (In thousands) |
|||||||||||
| As of September 30, 2013 |
|||||||||||
| Loan Grade |
|||||||||||
| Pass |
Special Mention |
Substandard |
Doubtful |
Total |
|||||||
| Real estate loans |
|||||||||||
| Multi-family residential |
$ 46,487 |
$ - |
$ 1,308 |
$ - |
$ 47,795 |
||||||
| Residential 1-4 family |
40,181 |
- |
9,025 |
- |
49,206 |
||||||
| Owner-occupied commercial |
239,091 |
- |
5,737 |
- |
244,828 |
||||||
| Nonowner-occupied commercial |
158,944 |
- |
5,764 |
- |
164,708 |
||||||
| Total real estate loans |
484,703 |
- |
21,834 |
- |
506,537 |
||||||
| Construction |
|||||||||||
| Multi-family residential |
22,929 |
- |
- |
- |
22,929 |
||||||
| Residential 1-4 family |
29,683 |
- |
197 |
- |
29,880 |
||||||
| Commercial real estate |
22,548 |
- |
1,558 |
- |
24,106 |
||||||
| Commercial bare land and acquisition & development |
10,980 |
- |
211 |
- |
11,191 |
||||||
| Residential bare land and acquisition & development |
4,475 |
- |
2,578 |
- |
7,053 |
||||||
| Total construction loans |
90,615 |
- |
4,544 |
- |
95,159 |
||||||
| Commercial and other |
360,749 |
- |
12,551 |
17 |
373,317 |
||||||
| Consumer |
3,630 |
- |
30 |
- |
3,660 |
||||||
| Total |
$ 939,697 |
$ - |
$ 38,959 |
$ 17 |
$ 978,673 |
||||||
| PACIFIC CONTINENTAL CORPORATION |
|||||||||||
| Credit Quality Indicators (Unaudited) |
|||||||||||
| (In thousands) |
|||||||||||
| As of September 30, 2012 |
|||||||||||
| Loan Grade |
|||||||||||
| Pass |
Special Mention |
Substandard |
Doubtful |
Total |
|||||||
| Real estate loans |
|||||||||||
| Multi-family residential |
$ 41,744 |
$ - |
$ 1,336 |
$ - |
$ 43,080 |
||||||
| Residential 1-4 family |
44,899 |
- |
8,657 |
- |
53,556 |
||||||
| Owner-occupied commercial |
212,243 |
- |
10,131 |
- |
222,374 |
||||||
| Nonowner-occupied commercial |
136,518 |
- |
3,586 |
- |
140,104 |
||||||
| Total real estate loans |
435,404 |
- |
23,710 |
- |
459,114 |
||||||
| Construction |
|||||||||||
| Multi-family residential |
12,794 |
- |
- |
- |
12,794 |
||||||
| Residential 1-4 family |
17,916 |
- |
192 |
- |
18,108 |
||||||
| Commercial real estate |
14,219 |
- |
1,598 |
- |
15,817 |
||||||
| Commercial bare land and acquisition & development |
9,887 |
- |
- |
- |
9,887 |
||||||
| Residential bare land and acquisition & development |
6,096 |
- |
3,012 |
- |
9,108 |
||||||
| Total construction loans |
60,912 |
- |
4,802 |
- |
65,714 |
||||||
| Commercial and other |
298,136 |
- |
10,068 |
- |
308,204 |
||||||
| Consumer |
3,874 |
- |
67 |
- |
3,941 |
||||||
| Total |
$ 798,326 |
$ - |
$ 38,647 |
$ - |
$ 836,973 |
||||||
SOURCE Pacific Continental Corporation
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