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FORM 10-Q

UNITED STATES
FEDERAL RESERVE BOARD
Washington, D.C. 20551

(Mark one)

|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

  For the quarterly period ended March 31, 2004

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

  For the transition period from ____________ to ____________

OREGON PACIFIC BANCORP
(Exact name of small business issuer as specified in its charter)

Oregon   71-0918151
(State or other jurisdiction of
incorporation or organization)		 (I.R.S. Employer
Identification No.)

1355 Highway 101
Florence, Oregon 97439
(Address of principal executive offices)

(541) 997-7121
(Issuer’s telephone number)

        Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.        Yes |X|        No |_|

        The number of shares outstanding of the issuer’s Common Stock, no par value, as of April 30, 2004, was 2,178,038.

OREGON PACIFIC BANCORP

INDEX

Part I Financial Information  

  Item 1. Financial statements  

    Consolidated balance sheets 3
    Consolidated statements of income and comprehensive income 4-5
    Consolidated statements of changes in stockholders’ equity 6
    Consolidated statements of cash flows 7-8
    Notes to consolidated financial statements 9-11

  Item 2. Management’s Discussion and Analysis or Plan of Operation 11-14

  Item 3. Quantitive and Qualitive Disclosures about Market Risk 14-15

  Item 4. Controls and Procedures 15-16

Part II. Other Information 16-17
  Signatures 18
  Certifications of Chief Executive Officer and Chief Financial Officer 19-22

2

PART 1. FINANCIAL INFORMATION

Item 1. Financial statements

OREGON PACIFIC BANCORP
CONSOLIDATED BALANCE SHEETS

 
Unaudited

MARCH 31,
2004
 
Audited

DECEMBER 31,
2003
 
ASSETS                
 
Cash and due from banks     $ 4,109,603   $ 4,916,985  
Interest-bearing deposits in banks       12,850,397     4,764,248  
Available-for-sale securities, at fair value       11,754,632     16,845,288  
Restricted equity securities       1,006,300     999,100  
Loans held for sale       4,496,527     4,057,664  
Loans, net of allowance for loan    
   losses and unearned income       87,920,179     82,722,328  
Premises & equipment, net       5,146,157     4,811,107  
Other real estate owned       9,746     9,746  
Accrued interest and other assets       1,673,432     1,549,826  
 
 
 
         Total assets     $ 128,966,973   $ 120,676,292  
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY    
 
Deposits    
   Demand deposits     $ 24,849,185   $ 21,990,360  
   Interest-bearing demand deposits       42,191,712     39,165,421  
   Savings deposits       17,867,641     16,207,129  
   Time certificate accounts:    
      $100,000 or more       7,794,804     7,102,978  
      Other time certificate accounts       12,590,491     12,998,516  
 
 
 
         Total deposits       105,293,833     97,464,404  
 
 
 
Other liabilities    
   Federal Home Loan Bank borrowings       8,909,056     7,922,806  
   Floating rate Junior Subordinated Deferrable Interest    
      Debentures (Trust Preferred Securities)       4,124,000     4,000,000  
   Deferred compensation liability       1,022,757     884,235  
   Accrued interest and other liabilities       726,237     1,769,289  
 
 
 
         Total liabilities       120,075,883     112,040,734  
 
 
 
Stockholders’ equity                
   Common stock, no par value, 10,000,000 shares                
      authorized with 2,178,038 and 2,173,592 issued                
      and outstanding at March 31, 2004 and                
      December 31, 2003, respectively       4,924,945     4,894,536  
   Undivided profits       3,611,079     3,331,170  
   Accumulated other comprehensive                
      income, net of tax       355,066     409,852  
 
 
 
         Total stockholders’ equity       8,891,090     8,635,558  
 
 
 
         Total liabilities and stockholders’ equity     $ 128,966,973   $ 120,676,292  
 
 
 

See accompanying notes.

3

OREGON PACIFIC BANCORP
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(Unaudited)

 
Three Months Ended March 31,
 
 
2004
 
2003
 
INTEREST INCOME            
   Interest and fees on loans     $ 1,653,009   $ 1,530,299  
   Interest on investment securities:                
      U.S. Teasuries and agencies       49,362     29,169  
      State and political subdivisions       79,210     88,996  
      Corporate and other investments       91,770     62,267  
   Interest on deposits in banks       18,142     22,871  
 
 
 
                 
      Total interest income       1,891,493     1,733,602  
 
 
 
INTEREST EXPENSE    
   Interest-bearing demand deposits       86,054     161,553  
   Savings deposits       30,713     39,805  
   Time deposits       109,829     146,635  
   Other borrowings       119,884     92,159  
 
 
 
     
      Total interest expense       346,480     440,152  
 
 
 
                 
      Net interest income       1,545,013     1,293,450  
                 
PROVISION (BENEFIT) FOR LOAN LOSSES       (360,000 )   50,000  
 
 
 
     
      Net interest income after provision (benefit) for loan losses       1,905,013     1,243,450  
 
 
 
NONINTEREST INCOME                
   Mortgage loan sales and servicing fees       141,453     386,714  
   Service charges and fees       165,007     102,055  
   Trust fee income       143,062     102,162  
   Investment sales commissions       41,736     25,496  
   Other income       19,213     15,978  
 
 
 
     
      Total noninterest income       510,471     632,405  
 
 
 

4

OREGON PACIFIC BANCORP
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(Unaudited)
(continued)

 
Three Months Ended March 31,
 
 
2004
 
2003
 
NONINTEREST EXPENSE            
   Salaries and benefits       1,210,438     1,002,829  
   Occupancy       191,881     156,827  
   Supplies       63,029     50,461  
   Postage and freight       17,501     22,891  
   Outside services       140,988     155,322  
   Advertising       51,622     36,036  
   Loan collection expense       31,838     39,538  
   Securities and trust department expenses       33,095     33,207  
   Other expenses       117,732     117,358  
 
 
 
     
      Total noninterest expense       1,858,124     1,614,469  
 
 
 
                 
INCOME BEFORE INCOME TAXES       557,360     261,386  
                 
PROVISION FOR INCOME TAXES       190,508     73,000  
 
 
 
     
NET INCOME       366,852     188,386  
     
OTHER COMPREHENSIVE INCOME                
      Unrealized holding loss arising during the period       (54,786 )   (1,955 )
 
 
 
     
COMPREHENSIVE INCOME     $ 312,066   $ 186,431  
 
 
 
                 
EARNINGS PER SHARE OF COMMON STOCK    
   Basic earnings per share     $ 0.17   $ 0.09  
 
 
 
   Diluted earnings per share     $ 0.17   $ 0.09  
 
 
 
                 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING    
   Basic earnings per share       2,175,888     2,138,196  
 
 
 
   Diluted earnings per share       2,177,848     2,152,012  
 
 
 

See accompanying notes.

5

OREGON PACIFIC BANCORP
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

 
Common Stock
 
 
 
Undivided
 
Accumulated
Other
Comprehensive
 
Total
Stockholders’
 
 
Shares
 
Amount
 
Surplus
 
Profits
 
Income
 
Equity
 
Balance, December 31, 2002 (Audited)       2,135,244   $ 939,507   $ 3,730,019   $ 2,735,032   $ 488,364   $ 7,892,922  
                                         
Change in capitalization as a result of    
   holding company formation       —     3,730,019     (3,730,019 )   —     —     —  
     
Exercise of stock options       20,000     100,000