PACIFIC CONTINENTAL CORP - FORM 8-K - EX-99.1 - PCBK 063011 EARNINGS PRESS RELEASE

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8-K - PCBK 8-K 063011 EARNINGS - PACIFIC CONTINENTAL CORP	pcbk8-k063011earnings.htm

NEWS RELEASE

FOR MORE INFORMATION CONTACT:	Hal Brown	Mick Reynolds
	CEO	Executive Vice President/CFO
	541 686-8685	541 686-8685

	http://www.therightbank.com
	Email: banking@therightbank.com

FOR IMMEDIATE RELEASE

Pacific Continental Corporation Reports Second Quarter 2011 Results

EUGENE, Ore., July 20, 2011 -- Pacific Continental Corporation (Nasdaq: PCBK), the holding company of Pacific Continental Bank, today reported financial results for the second quarter ended June 30, 2011.

Recent highlights:

·	Improved net income on both a year-over-year and linked-quarter basis and the eighth consecutive quarter of improved profitability.

·	Loan loss provisioning expense reduced for the eighth consecutive quarter.

·	Total risk-based capital ratio of 18.67%, significantly above the 10.0% minimum for “well-capitalized” designation.

·	Recognized by Oregon Ethics in Business, which honors Oregon-based organizations who have demonstrated ethical business practices, as a finalist in 2011.

·	Recognized by Seattle Business magazine as one of Washington’s “100 Best Companies to Work For” and the highest-rated bank in its size category.

Net income for the second quarter 2011 was $2.2 million, up 31% over net income of $1.6 million for the second quarter 2010; and on a linked-quarter basis, net income was up $708 thousand from the first quarter 2011. Earnings per diluted share were $0.12 for the second quarter 2011, compared to $0.09 and $0.08 for the second quarter 2010 and first quarter 2011, respectively.

“It is encouraging to see that our many initiatives are resulting in improved profitability,” said Hal Brown, chief executive officer. “I am particularly pleased with the growth in our commercial loan portfolio which demonstrates our commitment to meet the credit needs of community businesses; this growth, together with our many banker activities, suggests continued performance improvement in the quarters to come,” added Brown.

Classified assets, provisioning and loan statistics

Classified assets continued a four-quarter trend of decline, and at June 30, 2011, totaled $92.5 million, a decrease of $31.9 million from a year ago and a decline of $17.3 million from December 31, 2010. Nonperforming assets, a subcategory of classified assets, totaled $56.5 million at June 30, 2011, or 4.6% of total assets, an increase of $12.4 million for the quarter. The increase was primarily attributable to a single commercial development loan that, although previously classified during the third quarter 2010, was moved to nonaccrual status during the current quarter without any required impairment. Subsequent to the end of second quarter 2011, the Company had additional reductions in classified assets of $7.2 million, including the $5.8 million sale of its single largest property in other real estate owned with a small gain recorded on the sale.

“We are quite pleased with the continued progress in reducing the level of classified and problem assets,” said Roger Busse, president and chief operating officer. “In addition to the subsequent quarter-end sale of property, we have a number of other pending sales and resolutions that should accelerate our progress during the remainder of this year,” added Busse.

Loans past-due 30-89 days (excluding nonaccrual loans) were 0.51% of total loans at June 30, 2011; and for the eighth consecutive quarter were near or below one percent, a ratio that suggests credit stabilization.

The Company’s second quarter 2011 provision for loan losses was $2.0 million, down from $3.8 million a year ago and $2.2 million in the first quarter 2011. While the provision remains elevated when compared to pre-recession periods, it has been trending down over the past eight quarters. During the second quarter of 2011, the Company recognized net loan charge-offs of $1.9 million, down from the $3.5 million recorded in the first quarter 2011. The allowance for loan losses as a percentage of outstanding loans at June 30, 2011, was 1.85%, compared to 1.93% and 1.98% at December 31, 2010, and June 30, 2010, respectively.

Core deposit growth continues and commercial loan activity strengthens

During the second quarter 2011, the Company continued to experience growth in its company-defined core deposit base. Outstanding core deposits and quarterly average core deposit figures, a measure which reduces daily deposit volatility, showed increases of $18.2 million and $4.5 million, respectively over first quarter 2011. Second quarter 2011 average core deposits were up $70.2 million or 8.7% over second quarter 2010.

Outstanding commercial loans have increased $8.2 million or 3.4% during the first six months of 2011 and are up $14.8 million or 6.3% over outstanding loans at June 30, 2010. This growth continues to validate the Company’s business model and focused strategy on meeting the credit needs of community-based businesses, nonprofit organizations, health care professionals and professional service providers. However, weak real estate markets in the Northwest and the planned contraction in the real estate portfolio led to a net decline in period-end gross loans. Outstanding loans at June 30, 2011, were $830.4 million, down $12.0 million from the end of first quarter 2011 and down $73.6 million from that of a year ago. Contraction in the Company’s real estate loan portfolio continued during the second quarter 2011 declining $8.7 million from the end of first quarter 2011 and has declined $86.4 million over the past year.

Capital levels

The Company’s capital ratios continue to be well above the minimum FDIC well-capitalized designated levels. At June 30, 2011, the Company’s Tier 1 leverage ratio, Tier 1 risk-based capital ratio, and Total risk-based capital ratio were 13.49%, 17.41% and 18.67% as compared to 13.38%, 15.86% and 17.10% at December 31, 2010. The FDIC’s minimum well-capitalized designation ratios are 5.00%, 6.00% and 10.00%, respectively.

Net interest margin

The net interest margin for the current quarter was 4.58%, down 12 basis points from the 4.70% margin reported for first quarter 2011, and down 17 basis points from the 4.75% margin reported for second quarter 2010. The net interest margin for the current period and all prior periods has been adjusted to a tax-equivalent basis using a 35% tax rate. The linked-quarter decline in the net interest margin was primarily attributable to an increase in interest reversed on loans placed on nonaccrual status during the current quarter of $287 thousand which negatively impacted the net interest margin by 10 basis points.

The sustained growth in core deposits together with the net contraction in the loan portfolio continued to result in additions to the securities portfolio. The securities portfolio grew by $36.8 million during the second quarter 2011, and at June 30, 2011, represented 25% of total assets versus just 16% of total assets one year ago. This increase in the securities portfolio, which has significantly lower yields than loans, also contributes to the decline in the net interest margin. Loan pipelines in all three markets are increasing suggesting future growth in the loan portfolio and an improvement in the net interest margin.

Noninterest income and expense

Noninterest income in second quarter 2011 was up $743 thousand over the same quarter last year. Most of this increase was attributable to $474 thousand in gains on the sale of securities recorded during second quarter 2011 combined with the fact that second quarter 2010 noninterest income was reduced by $226 thousand due to an other-than-temporary-impairment charge related to a portion of the Company’s securities portfolio. Merchant bankcard fees continued to show strong year-over-year growth as evidenced by the 14% increase in this category. The increase in bankcard fees is reflective of both improving volumes and increased margins. On a linked-quarter basis and excluding gains or losses on the sale of securities, second quarter 2011 noninterest income showed a slight improvement over first quarter 2011, most of which was attributable to increases in merchant bankcard revenues.

Noninterest expense in second quarter 2011 was up $1.1 million over second quarter 2010. This increase was primarily attributable to increased personnel expense and other real estate expenses. Personnel expense increased $585 thousand primarily due to staff additions to line units that will poise the Company for growth in future quarters. Other real estate expenses totaled $457 thousand during the second quarter 2011 compared to $12 thousand during the second quarter 2010. On a linked-quarter basis, second quarter 2011 noninterest expense was down $327 thousand from first quarter 2011. This decrease was primarily due to declines in FDIC assessments as new assessment methodology was implemented in second quarter 2011 and a reduction in other real estate expense, specifically valuation write-downs.

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 second quarter 2011 on Thursday, July 21, 2011, at 11:00 a.m. Pacific Time / 2:00 p.m. Eastern Time. To listen to the conference call, interested parties should call (866) 292-1418. The webcast will be available via Pacific Continental’s website (http://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 Maecey Castle, vice president and director of corporate communications, 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 a loan production office in Tacoma, Washington. Pacific Continental, with $1.2 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 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"). Such forward-looking statements include but are not limited to statements about suggested future profitability, loan growth, and increasing net interest margin, and are subject to risks and uncertainties that may cause actual results to differ materially from those projected, including but not limited to the following: the high concentration of loans of the company's banking subsidiary in commercial and residential real estate lending; 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 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; increased competition among financial institutions; fluctuating interest rate environments; a tightening of available credit and other risks and uncertainties discussed in the sections titled “Risk Factors”, “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, as applicable, from Pacific Continental’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Readers are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date on which they are made and reflect management’s current estimates, projections, expectations and beliefs. Pacific Continental Corporation undertakes no obligation to publicly revise or update the forward-looking statements to reflect 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						Six months ended
	June 30,			June 30,			June 30,			June 30,
	2011			2010			2011			2010
Interest and dividend income
Loans	$	12,564		$	14,498		$	25,563		$	29,162
Securities		2,254			1,403			4,295			2,954
Federal funds sold & interest-bearing deposits with banks		2			1			4			3
		14,820			15,902			29,862			32,119

Interest expense
Deposits		1,771			2,341			3,697			4,673
Federal Home Loan Bank & Federal Reserve borrowings		462			589			954			1,224
Junior subordinated debentures		34			131			65			260
Federal funds purchased		11			14			22			25
		2,278			3,075			4,738			6,182

Net interest income		12,542			12,827			25,124			25,937

Provision for loan losses		2,000			3,750			4,150			8,000
Net interest income after provision for loan losses		10,542			9,077			20,974			17,937

Noninterest income
Service charges on deposit accounts		436			418			866			828
Other fee income, principally bankcard		418			367			805			693
Loan servicing fees		27			15			55			32
Mortgage banking income		32			40			74			75
Gain on sale of investment securities		474			45			465			45
Impairment losses on investment securities (OTTI)		-			(226	)		-			(226	)
Other noninterest income		278			263			549			520
		1,665			922			2,814			1,967

Noninterest expense
Salaries and employee benefits		4,779			4,194			9,446			8,983
Premises and equipment		886			828			1,744			1,671
Bankcard processing		161			157			318			294
Business development		400			390			782			705
FDIC insurance assessment		378			512			887			985
Other real estate expense		457			12			1,411			101
Other noninterest expense		1,957			1,808			3,774			3,376
		9,018			7,901			18,362			16,115

Income before provision for income taxes		3,189			2,098			5,426			3,789
Provision for income taxes		1,032			452			1,820			1,040

Net income	$	2,157		$	1,646		$	3,606		$	2,749

Earnings per share:
Basic	$	0.12		$	0.09		$	0.20		$	0.15
Diluted	$	0.12		$	0.09		$	0.20		$	0.15

Weighted average shares outstanding:
Basic		18,426,894			18,397,691			18,421,410			18,395,743

Common stock equivalents
attributable to stock-based awards		29,687			22,109			33,427			21,547
Diluted		18,456,581			18,419,800			18,454,837			18,417,290

PERFORMANCE RATIOS
Return on average assets		0.71	%		0.56	%		0.60	%		0.47	%
Return on average equity (book)		4.93	%		3.85	%		4.17	%		3.27	%
Return on average equity (tangible) (1)		5.65	%		4.43	%		4.79	%		3.77	%
Net interest margin (2)		4.58	%		4.75	%		4.64	%		4.80	%
Efficiency ratio (3)		63.48	%		57.47	%		65.72	%		57.75	%

(1)Tangible equity excludes goodwill and core deposit intangible assets related to acquisitions.
(2)Net interest margin is reported on a tax-equivalent yield basis at a 35% tax rate.
(3)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)

	June 30,			December 31,			June 30,
	2011			2010			2010
ASSETS
Cash and due from banks	$	21,190		$	25,424		$	16,908
Interest-bearing deposits with banks		167			267			967
Total cash and cash equivalents		21,357			25,691			17,875

Securities available-for-sale		307,533			253,907			188,193
Loans held-for-sale		653			2,116			1,090
Loans, less allowance for loan losses and net deferred fees		814,397			839,815			885,223
Interest receivable		4,406			4,371			4,212
Federal Home Loan Bank stock		10,652			10,652			10,652
Property and equipment, net of accumulated depreciation		20,625			20,883			21,275
Goodwill and intangible assets		22,346			22,458			22,569
Deferred tax asset		8,714			10,188			5,465
Taxes receivable		-			-			2,344
Other real estate owned		12,312			14,293			9,651
Prepaid FDIC assessment		3,534			4,387			5,339
Other assets		1,845			1,415			1,532

Total assets	$	1,228,374		$	1,210,176		$	1,175,420

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-bearing demand	$	257,570		$	234,331		$	238,436
Savings and interest-bearing checking		555,987			574,333			510,334
Time $100,000 and over		73,171			63,504			65,030
Other time		75,640			86,791			95,753
Total deposits		962,368			958,959			909,553

Federal funds and overnight funds purchased		18,000			-			13,885
Federal Home Loan Bank borrowings		59,500			67,000			70,500
Junior subordinated debentures		8,248			8,248			8,248
Accrued interest and other payables		2,832			3,731			2,476
Total liabilities		1,050,948			1,037,938			1,004,662

Shareholders' equity
Common stock, shares authorized: 50,000,000
shares issued and outstanding: 18,433,084 at
June 30, 2011, 18,415,132 at December 31, 2010,
and 18,398,725 at June 30, 2010		137,491			137,062			136,646
Retained earnings		37,206			33,969			31,994
Accumulated other comprehensive income		2,729			1,207			2,118
		177,426			172,238			170,758

Total liabilities and shareholders’ equity	$	1,228,374		$	1,210,176		$	1,175,420


CAPITAL RATIOS
Total capital (to risk weighted assets)		18.67	%		17.10	%		17.01	%
Tier I capital (to risk weighted assets)		17.41	%		15.86	%		15.75	%
Tier I capital (to leverage assets)		13.49	%		13.38	%		13.21	%
Tangible common equity (to tangible assets)(1)		12.86	%		12.61	%		12.85	%
Tangible common equity (to risk-weighted assets)(1)		16.84	%		15.18	%		15.15	%

OTHER FINANCIAL DATA
Shares outstanding at end of period		18,433,084			18,415,132			18,398,725
Tangible shareholders' equity(1)	$	155,080		$	149,780		$	148,189
Book value per share	$	9.63		$	9.35		$	9.28
Tangible book value per share	$	8.41		$	8.13		$	8.05

(1)Tangible shareholders' 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)


	June 30,			December 31,			June 30,
	2011			2010			2010
LOANS BY TYPE
Real estate secured loans:
Permanent loans:
Multifamily residential	$	48,013		$	57,850		$	59,150
Residential 1-4 family		70,039			76,692			87,881
Owner-occupied commercial		205,612			201,286			205,126
Non-owner-occupied commercial		155,786			163,071			152,422
Other loans secured by real estate		18,755			23,950			27,064
Total permanent real estate loans		498,205			522,849			531,643
Construction loans:
Multifamily residential		1,391			6,192			14,180
Residential 1-4 family		20,823			22,683			30,329
Commercial real estate		12,580			11,730			30,656
Commercial bare land and acquisition & development		25,049			25,587			24,804
Residential bare land and acquisition & development		13,680			17,263			26,477
Total construction real estate loans		73,523			83,455			126,446
Total real estate loans		571,728			606,304			658,089
Commercial loans		251,188			243,034			236,351
Consumer loans		5,840			5,900			7,283
Other loans		1,599			1,730			2,187
Gross loans		830,355			856,968			903,910
Deferred loan origination fees		(632	)		(583	)		(833	)
		829,723			856,385			903,077
Allowance for loan losses		(15,326	)		(16,570	)		(17,854	)
	$	814,397		$	839,815		$	885,223

Real estate loans held-for-sale	$	653		$	2,116		$	1,090


	Three months ended						Six months ended
	June 30,			June 30,			June 30,			June 30,
ALLOWANCE FOR LOAN LOSSES		2011			2010			2011		2010
Balance at beginning of period	$	15,227		$	14,857		$	16,570		$ 13,367
Provision for loan losses		2,000			3,750			4,150		8,000
Loan charge offs		(2,263	)		(1,038	)		(5,877	)	(5,949)
Loan recoveries		362			285			483		2,436
Net charge offs		(1,901	)		(753	)		(5,394	)	(3,513)
Balance at end of period	$	15,326		$	17,854		$	15,326		$ 17,854

PACIFIC CONTINENTAL CORPORATION
Selected Other Financial Information and Ratios
(In thousands)
(Unaudited)

	Three months ended						Six months ended
	June 30,			June 30,			June 30,			June 30,
	2011			2010			2011			2010
BALANCE SHEET AVERAGES
Loans(1)	$	834,071		$	916,289		$	842,393		$	927,510
Allowance for loan losses		(15,307	)		(16,412	)		(16,243	)		(16,093	)
Loans, net of allowance		818,764			899,877			826,150			911,417
Securities and short-term deposits		290,556			186,088			275,996			179,719
Earning assets		1,109,320			1,085,965			1,102,146			1,091,136
Non-interest-earning assets		103,860			102,919			105,105			97,826
Assets	$	1,213,180		$	1,188,884		$	1,207,251		$	1,188,962

Interest-bearing core deposits(2)	$	623,403		$	591,037		$	626,846		$	587,455
Non-interest-bearing core deposits(2)		258,326			220,505			252,636			207,647
Core deposits(2)		881,729			811,542			879,482			795,102
Non-core interest-bearing deposits		62,687			85,442			57,727			85,980
Deposits		944,416			896,984			937,209			881,082
Borrowings		90,470			117,022			92,641			137,058
Other non-interest-bearing liabilities		2,829			3,298			3,174			1,212
Liabilities		1,037,715			1,017,304			1,033,024			1,019,352
Shareholders' equity (book)		175,465			171,580			174,227			169,610
Liabilities and equity	$	1,213,180		$	1,188,884		$	1,207,251		$	1,188,962

Shareholders' equity (tangible)(3)	$	153,088		$	148,981		$	151,823		$	146,982

SELECTED MARKET DATA
Eugene market loans, net of fees, period end	$	252,271		$	265,211
Portland market loans, net of fees, period end		399,682			413,844
Seattle market loans, net of fees, period end		177,770			224,022
Total loans, net of fees, period end	$	829,723		$	903,077

Eugene market core deposits, period end(2)	$	530,662		$	532,813
Portland market core deposits, period end(2)		234,499			187,423
Seattle market core deposits, period end(2)		126,827			121,377
Total core deposits, period end(2)		891,988			841,613
Other deposits, period end		70,380			67,940
Total	$	962,368		$	909,553

Eugene market core deposits, average(2)	$	508,571		$	509,175
Portland market core deposits, average(2)		250,985			185,189
Seattle market core deposits, average(2)		122,173			117,178
Total core deposits, average(2)		881,729			811,542
Other deposits, average		62,687			85,442
Total	$	944,416		$	896,984

NET INTEREST MARGIN RECONCILIATION
Yield on average loans		6.15	%		6.46	%		6.24	%		6.45	%
Yield on average securities(4)		3.28	%		3.08	%		3.31	%		3.38	%
Yield on average earning assets(4)		5.40	%		5.88	%		5.50	%		5.95	%

Rate on average interest-bearing core deposits		0.96	%		1.35	%		1.02	%		1.36	%
Rate on average interest-bearing non-core deposits		1.74	%		1.66	%		1.80	%		1.69	%
Rate on average interest-bearing deposits		1.04	%		1.39	%		1.09	%		1.40	%

Rate on average borrowings		2.25	%		2.52	%		2.27	%		2.22	%
Cost of interest-bearing funds		1.18	%		1.55	%		1.23	%		1.54	%

Interest rate spread(4)		4.23	%		4.33	%		4.28	%		4.41	%

Net interest margin(4)		4.58	%		4.75	%		4.64	%		4.80	%

(1)Includes loans held-for sale.
(2)Core deposits include all demand, savings, and interest checking accounts plus all local time deposits including local
time deposits in excess of $100,000.
(3)Tangible equity excludes goodwill and core deposit intangible assets related to acquisitions.
(4)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 $120 thousand and $25 thousand for the three months ended
June 30, 2011 and 2010, respectively and $224 thousand and $33 thousand for the six months ended June 30. 2011
and 2010, respectively.

PACIFIC CONTINENTAL CORPORATION
Nonperforming Assets and Loan Quality Ratios
(In thousands)
(Unaudited)

	June 30,			December 31,			June 30,
	2011			2010			2010
NONPERFORMING ASSETS
Non-accrual loans
Real estate secured loans:
Permanent loans:
Multifamily residential	$	-		$	1,010		$	5,577
Residential 1-4 family		8,177			6,123			3,762
Owner-occupied commercial		3,575			1,622			3,213
Non-owner-occupied commercial		7,827			8,428			1,258
Other loans secured by real estate		922			538			1,051
Total permanent real estate loans		20,501			17,721			14,861
Construction loans:
Multifamily residential		-			1,985			441
Residential 1-4 family		1,699			2,493			3,563
Commercial real estate		1,500			1,671			3,491
Commercial bare land and acquisition & development		13,027			91			673
Residential bare land and acquisition & development		1,597			1,032			7,037
Other		-			-			-
Total construction real estate loans		17,823			7,272			15,205
Total real estate loans		38,324			24,993			30,066
Commercial loans		6,515			8,033			9,825
Consumer loans		-			-			-
Other loans		-			-			-
Total nonaccrual loans		44,839			33,026			39,891
90 days past due and accruing interest		-			-			-
Total nonperforming loans		44,839			33,026			39,891
Nonperforming loans guaranteed by government		(666	)		(1,056	)		(621	)
Net nonperforming loans		44,173			31,970			39,270
Other real estate owned		12,312			14,293			9,651
Total nonperforming assets, net of guaranteed loans	$	56,485		$	46,263		$	48,921

LOAN QUALITY RATIOS
Allowance for loan losses as a percentage of total loans
outstanding		1.85	%		1.93	%		1.98	%
Allowance for loan losses as a percentage of total
nonperforming loans, net of government guarantees		34.70	%		51.83	%		45.46	%
Net loan charge offs (recoveries) as a percentage of
average loans, annualized		1.29	%		1.30	%		0.76	%
Net nonperforming loans as a percentage of total loans		5.32	%		3.73	%		4.35	%
Nonperforming assets as a percentage of total assets		4.60	%		3.82	%		4.16	%
Consolidated classified asset ratio(1)		52.63	%		63.39	%		72.31	%
Past due (excluding nonaccrual) as a percentage of total loans		0.51	%		0.77	%		0.48	%

(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.

PACIFIC CONTINENTAL CORPORATION
Nonperforming Loan Rollforward
(In thousands)
(Unaudited)

	Balance at		Additions to					Net			Returns to						Transfers			Balance at
	March 31, 2011		Non-performing		Reclassification			Paydowns			Performing			Charge-offs			to OREO			June 30, 2011

Real estate loans
Multifamily residential	$	64	$	250	$	-		$	(314	)	$	-		$	-		$	-		$	-
Residential 1-4 family		6,503		2,318		-			(217	)		-			(164	)		(263	)		8,177
Owner-occupied commercial		1,959		2,309		-			(382	)		-			(11	)		(300	)		3,575
Non owner-occupied commercial		8,215		-		-			(62	)		-			(326	)		-			7,827
Other real estate loans		1,407		14		(499	)		-			-			-			-			922
Total real estate loans		18,148		4,891		(499	)		(975	)		-			(501	)		(563	)		20,501

Construction
Multifamily residential		232		-		-			(232	)		-			-			-			-
Residential 1-4 family		1,972		361		-			(410	)		-			(224	)		-			1,699
Commercial real estate		1,500		-		-			-			-			-			-			1,500
Commercial bare land and acquisition & development		-		13,027		-			-			-			-			-			13,027
Residential bare land and acquisition & development		2,024		-		-			(125	)		-			(302	)		-			1,597
Total construction loans		5,728		13,388		-			(767	)		-			(526	)		-			17,823

Commercial and other		7,275		350		499			(1,097	)		(461	)		(51	)		-			6,515

Consumer		-		-		-			-			-			-			-			-

Total	$	31,151	$	18,629	$	-		$	(2,839	)	$	(461	)	$	(1,078	)	$	(563	)	$	44,839



	Balance at		Additions to					Net			Returns to						Transfers			Balance at
	December 31, 2010		Non-performing		Reclassification			Paydowns			Performing			Charge-offs			to OREO			June 30, 2011

Real estate loans
Multifamily residential	$	1,010	$	250	$	-		$	(1,186	)	$	-		$	(74	)	$	-		$	-
Residential 1-4 family		6,123		3,985		-			(450	)		-			(956	)		(525	)		8,177
Owner-occupied commercial		1,622		2,665		-			(387	)		-			(25	)		(300	)		3,575
Non owner-occupied commercial		8,428		-		-			(138	)		-			(463	)		-			7,827
Other real estate loans		538		1,232		(499	)		(39	)		-			(310	)		-			922
Total real estate loans		17,721		8,132		(499	)		(2,200	)		-			(1,828	)		(825	)		20,501

Construction
Multifamily residential		1,985		-		-			(1,985	)		-			-			-			-
Residential 1-4 family		2,493		414		-			(724	)		-			(421	)		(63	)		1,699
Commercial real estate		1,671		-		-			-			-			(171	)		-			1,500
Commercial bare land and acquisition & development		91		13,027		-			-			-			(91	)		-			13,027
Residential bare land and acquisition & development		1,032		2,250		-			(144	)		-			(1,505	)		(36	)		1,597
Total construction loans		7,272		15,691		-			(2,853	)		-			(2,188	)		(99	)		17,823

Commercial and other		8,033		600		499			(1,490	)		(461	)		(666	)		-			6,515

Consumer		-		10		-			-			-			(10	)		-			-

Total	$	33,026	$	24,433	$	-		$	(6,543	)	$	(461	)	$	(4,692	)	$	(924	)	$	44,839

PACIFIC CONTINENTAL CORPORATION
Other Real Estate Owned Rollforward
(In thousands)
(Unaudited)

	Balance at		Additions to		Capitalized		Paydowns/			Writedowns/			Balance at
	March 31, 2011		REO		Costs		Sales			Loss/Gain			June 30, 2011


Real estate
Multifamily residential	$	-	$	-	$	-	$	-		$	-			-
Residential 1-4 family		1,624		263		-		(662	)		(24	)		1,201
Owner-occupied commercial		-		300		-		-			-			300
Non owner-occupied commercial		-		-		-		-			-			-
Other real estate loans		-		-		-		-			-			-
Total real estate loans		1,624		563		-		(662	)		(24	)		1,501

Construction
Multifamily residential		-		-		-		-			-			-
Residential 1-4 family		1,082		-		-		(939	)		(80	)		63
Commercial real estate		3,818		-		-		-			-			3,818
Commercial bare land and acquisition & development		1,013		-		-		-			(185	)		828
Residential bare land and acquisition & development		6,165		-		-		-			(63	)		6,102
Total construction loans		12,078		-		-		(939	)		(328	)		10,811

Commercial and other		38		-		-		(44	)		6			-

Consumer		-		-		-		-			-			-

Total	$	13,740	$	563	$	-	$	(1,645	)	$	(346	)	$	12,312



	Balance at		Additions to		Capitalized		Paydowns/			Writedowns/			Balance at
	December 31, 2010		REO		Costs		Sales			Loss/Gain			June 30, 2011


Real estate
Multifamily residential	$	-	$	-	$	-	$	-		$	-			-
Residential 1-4 family		1,374		525		-		(662	)		(36	)		1,201
Owner-occupied commercial		-		300		-		-			-			300
Non owner-occupied commercial		-		-		-		-			-			-
Other real estate loans		-		-		-		-			-			-
Total real estate loans		1,374		825		-		(662	)		(36	)		1,501

Construction
Multifamily residential		-		-		-		-			-			-
Residential 1-4 family		1,178		63		-		(953	)		(225	)		63
Commercial real estate		4,389		-		-		-			(571	)		3,818
Commercial bare land and acquisition & development		1,013		-		-		-			(185	)		828
Residential bare land and acquisition & development		6,301		36		-		-			(235	)		6,102
Total construction loans		12,881		99		-		(953	)		(1,216	)		10,811

Commercial and other		38		-		-		(44	)		6			-

Consumer		-		-		-		-			-			-

Total	$	14,293	$	924	$	-	$	(1,659	)	$	(1,246	)	$	12,312

PACIFIC CONTINENTAL CORPORATION
Age Analysis of Past Due Financing Receivables (Unaudited)
(In thousands)
As of June 30, 2011

					Greater
	30-59 Days		60-89 Days		Than				Total Past
	Past Due		Past Due		90 Days				Due and		Total		Total Loans
	Still Accruing		Still Accruing		Still Accruing		Nonaccrual		Nonaccrual		Current		Receivable



Real estate loans
Multifamily residential	$	-	$	-	$	-	$	-	$	-	$	48,013	$	48,013
Residential 1-4 family		415		-		-		8,177		8,592		61,447		70,039
Owner-occupied commercial		303		1,149		-		3,575		5,027		200,585		205,612
Nonowner-occupied commercial				-		-		7,827		7,827		147,959		155,786
Other real estate loans		167		-		-		922		1,089		17,666		18,755
Total real estate loans		885		1,149		-		20,501		22,535		475,670		498,205

Construction
Multifamily residential		-		-		-		-		-		1,391		1,391
Residential 1-4 family		601		229		-		1,699		2,529		18,294		20,823
Commercial real estate		-		-		-		1,500		1,500		11,080		12,580
Commercial bare land and acquisition & development		-		-		-		13,027		13,027		12,022		25,049
Residential bare land and acquisition & development		318		528		-		1,597		2,443		11,237		13,680
Total construction loans		919		757		-		17,823		19,499		54,024		73,523

Commercial and other		533		-		-		6,515		7,048		245,739		252,787

Consumer		18		-		-		-		18		5,822		5,840

Totals	$	2,355	$	1,906	$	-	$	44,839	$	49,100	$	781,255	$	830,355



PACIFIC CONTINENTAL CORPORATION
Age Analysis of Past Due Financing Receivables (Unaudited)
(In thousands)
As of December 31, 2010

					Greater
	30-59 Days		60-89 Days		Than				Total Past
	Past Due		Past Due		90 Days				Due and		Total		Total Financing
	Still Accruing		Still Accruing		Still Accruing		Nonaccrual		Nonaccrual		Current		Receivables


Real estate loans
Multifamily residential	$	2,549	$	-	$	-	$	1,010	$	3,559	$	54,291	$	57,850
Residential 1-4 family		110		366		-		6,123		6,599		70,093		76,692
Owner-occupied commercial		2,694		356		-		1,622		4,672		196,614		201,286
Non owner-occupied commercial		-		-		-		8,428		8,428		154,643		163,071
Other real estate loans		195		-		-		538		733		23,217		23,950
Total real estate loans		5,548		722		-		17,721		23,991		498,858		522,849

Construction
Multifamily residential		-		-		-		1,985		1,985		4,207		6,192
Residential 1-4 family		-		-		-		2,493		2,493		20,190		22,683
Commercial real estate		-		-		-		1,671		1,671		10,059		11,730
Commercial bare land and acquisition & development		-		-		-		91		91		25,496		25,587
Residential bare land and acquisition & development		175		-		-		1,032		1,207		16,056		17,263
Total construction loans		175		-		-		7,272		7,447		76,008		83,455

Commercial and other		102		32		-		8,033		8,167		236,597		244,764

Consumer		7		5		-		-		12		5,888		5,900

Total	$	5,832	$	759	$	-	$	33,026	$	39,617	$	817,351	$	856,968

PACIFIC CONTINENTAL CORPORATION
Credit Quality Indicators (Unaudited)
(In thousands)
As of June 30, 2011

	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals

Real estate loans
Multifamily residential	$	46,645	$	-	$	1,368	$	-	$	48,013
Residential 1-4 family		54,112		-		15,871		56		70,039
Owner-occupied commercial		196,075		-		9,537		-		205,612
Nonowner-occupied commercial		146,327		-		9,459		-		155,786
Other real estate loans		16,962		-		1,793		-		18,755
Total real estate loans		460,121		-		38,028		56		498,205

Construction
Multifamily residential		1,391		-		-		-		1,391
Residential 1-4 family		14,667		-		6,156		-		20,823
Commercial real estate		8,155		-		4,425		-		12,580
Commercial bare land and acquisition & development		11,362		-		13,687		-		25,049
Residential bare land and acquisition & development		10,104		-		3,576		-		13,680
Total construction loans		45,679		-		27,844		-		73,523

Commercial and other		241,236		-		8,792		2,759		252,787

Consumer		5,758		-		82		-		5,840

Totals	$	752,794	$	-	$	74,746	$	2,815	$	830,355




PACIFIC CONTINENTAL CORPORATION
Credit Quality Indicators (Unaudited)
(In thousands)
As of December 31, 2010

	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals


Real estate loans
Multifamily residential	$	55,105	$	-	$	2,745	$	-	$	57,850
Residential 1-4 family		60,544		-		15,658		490		76,692
Owner-occupied commercial		185,362		-		14,274		1,650		201,286
Nonowner-occupied commercial		153,088		-		9,983		-		163,071
Other real estate loans		20,343		-		3,607		-		23,950
Total real estate loans		474,442		-		46,267		2,140		522,849

Construction
Multifamily residential		4,206		-		1,986		-		6,192
Residential 1-4 family		19,532		-		3,151		-		22,683
Commercial real estate		7,114		-		4,616		-		11,730
Commercial bare land and acquisition & development		11,771		-		13,816		-		25,587
Residential bare land and acquisition & development		11,886		-		5,377		-		17,263
Total construction loans		54,509		-		28,946		-		83,455

Commercial and other		231,358		-		13,406		-		244,764

Consumer		5,860		-		-		40		5,900

Totals	$	766,169	$	-	$	88,619	$	2,180	$	856,968

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