PACIFIC CONTINENTAL CORP - FORM 8-K - EX-99.1 - PRESS RELEASE

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8-K - FORM 8-K - PACIFIC CONTINENTAL CORP	d336738d8k.htm

Exhibit 99.1

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 First Quarter 2012 Results

Loan Growth and Efficiency Drive First Quarter 2012 Profitability

EUGENE, Ore., April 18, 2012 — Pacific Continental Corporation (Nasdaq: PCBK), the holding company of Pacific Continental Bank, today reported financial results for the first quarter 2012.

Recent highlights:

•

Net income of $2.7 million, an increase of 87.4% over the prior year first quarter.

•

First quarter growth of 5.6% and 5.1% in owner-occupied and commercial loans, respectively.

•

Efficiency ratio declines to 61.99%.

•

Reductions in nonperforming and classified assets continue.

•

Declared quarterly cash dividend of $0.05 per share.

•

Announced share repurchase plan.

•

Total risk-based capital ratio of 19.02%, significantly above the 10.0% minimum for “well-capitalized” designation.

•

Recognized by the Oregon Business magazine as one of the 100 Best Companies to Work for in Oregon, marking the thirteenth consecutive year the Company was named as a 100 best company. Additionally, Pacific Continental was one of just ten inaugural members of its “Hall of Fame” – a distinction that recognizes companies with ten or more appearances in the 100 Best competitions.

Net Income

Net income for first quarter 2012 was $2.7 million, up 87.4% over first quarter 2011. Earnings per diluted share for the current quarter were $0.15 compared to $0.08 for the same quarter last year. Return on average assets and return on average tangible equity for first quarter 2012 were 0.85% and 6.93%, up from the 0.49% and 3.90% reported for first quarter 2011. The efficiency ratio for first quarter 2012 was 61.99%, a significant improvement over the 68.05% reported for first quarter 2011.

“I am pleased with the first quarter results,” said Hal Brown, chief executive officer. “Improvements in operating efficiencies combined with strong first quarter loan growth reflect the many positive activities of our professional bankers,” added Brown.

Loan activity strengthens

Outstanding gross loans at March 31, 2012, were $825.6 million, up $4.8 million from the year-end. Growth in owner-occupied real estate loans and commercial loans during the first quarter more than offset continued contraction in other categories of real estate loans. First quarter growth in these two categories was especially strong increasing 5.6% and 5.1%, respectively, and when compared to one year ago, owner-occupied commercial real estate loans and commercial loans respectively increased 6.2% and 12.9%. The bank continues to enjoy success in lending to health care professionals. Dental practice loans now represent 27.0% of the total loan portfolio and the credit quality of the dental portfolio remains very strong.

“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 and professional service providers,” said Roger Busse, president and chief operating officer. “We are seeing continued strengthening of our activity pipelines in all of our markets in what is still a volatile recovery,” added Busse.

Capital levels

In February 2012, the Company’s Board of Directors authorized the repurchase of up to five percent of the Company’s shares, or approximately 922,000 shares with the purchases to take place over the next 12 months. During the first quarter 2012, the Company repurchased 242,169 shares at a weighted average price of $8.62 per share. Share repurchases and cash dividend payments combined to keep capital levels relatively unchanged from year-end.

The Company’s capital ratios continue to be well above the minimum FDIC well-capitalized designated levels. At March 31, 2012, the Company’s Tier 1 leverage ratio, Tier 1 risk-based capital ratio, and Total risk-based capital ratio were 12.80%, 17.76% and 19.02% as compared to 13.09%, 17.97% and 19.22% at December 31, 2011. The FDIC’s minimum well-capitalized designation ratios are 5.00%, 6.00% and 10.00%, respectively.

Classified assets, provisioning and loan statistics

Classified assets continued a seven-quarter trend of decline, and at March 31, 2012, totaled $68.0 million, a decrease of $511 thousand from the end of the prior quarter and down $27.8 million from March 31, 2011. Nonperforming assets, a subcategory of classified assets, totaled $35.1 million at March 31, 2012, or 2.72% of total assets, a decrease from December 31, 2011, and March 31, 2011, ratios of 2.92% and 3.67%, respectively.

Loans past-due 30-89 days were 0.67% of total loans at March 31, 2012, compared to 0.41% at December 31, 2011. This is the eleventh consecutive quarter in which this ratio was near or below one percent, a trend that suggests stabilization in the migration of problem loans.

“Our expectation is we will continue to see a reduction in the level of classified and problem assets during 2012, albeit at a slower pace than the prior year,” said Casey Hogan, chief credit officer. “Our ability to continue this trend will shift more resources to business development and growth initiatives as the year progresses,” added Hogan.

The Company’s first quarter 2012 provision for loan losses totaled $1.3 million down from $7.0 million in fourth quarter 2011, and down from $2.2 million in first quarter 2011. The lower provision for loan losses reflects improving credit quality combined with significantly lower levels of net charge offs. During the first quarter 2012, net loan charge offs totaled $412 thousand compared to $7.3 million in fourth quarter 2011 and $3.5 million in first quarter 2011.

The allowance for loan losses as a percentage of outstanding loans at March 31, 2012 was 1.92% compared to 1.82% at December 31, 2011 and 1.81% at March 31, 2011.

Core deposit growth slows

Period-end Company defined core deposits at March 31, 2012, declined by $26.9 million from the end of fourth quarter 2011. The decline in core deposits resulted from temporary funds of approximately $20.0 million held at the bank at year-end 2011, combined with typical seasonal deposit outflows that historically have occurred during the first quarter. Average core deposits for the first quarter 2012 were relatively unchanged from year end 2011 and from March 31, 2011. At period-end March 31, 2012, noninterest-bearing demand deposits totaled $281.2 million and represent 29.5% of core deposits.

Net interest margin

The first quarter 2012 net interest margin averaged 4.39%, a decline of 20 and 31 basis points from the margins reported for fourth and first quarters 2011, respectively. The contraction in the net interest margin was primarily due to lower yields on the Company’s loan and securities portfolio. Loan yields contracted during the first quarter 2012 when compared to the prior quarter and prior year as new loan production in this historically low interest rate environment was booked at yields lower than the average yield on the existing portfolio. In addition, increased competitive pressure has resulted in a number of rate reductions on existing loans prior to contractual maturity or repricing date. The yield on the securities portfolio was negatively impacted by low long-term interest rates that accelerated prepayments on the agency mortgage-back segment of the portfolio, thus increasing the amortization of premiums and reducing the yield on this portion of the portfolio.

Noninterest income and expense

First quarter noninterest income was $1.5 million up $302 thousand from first quarter 2011. The improvement in noninterest income was primarily due to a $127 increase in revenues from an investment bank-owned-life-insurance (“BOLI”), combined with approximately $117 in rental income received during the quarter on other real estate owned properties. On a linked-quarter basis, first quarter 2012 noninterest income was up $135 thousand, primarily due to increased BOLI investment income.

Noninterest expense in first quarter 2012 declined by $626 thousand or 6.7% from first quarter 2011. The decrease in expenses was primarily due to a $269 thousand reduction in FDIC insurance assessments and a $577 thousand decline in other real estate expense. The reduction in FDIC assessments reflects changes in assessment methodology implemented in second quarter 2011. The lower other real estate expense represents a significant decline in valuation write downs in the current quarter when compared to last year. A portion of the decline in these two categories was offset by a modest increase in personnel expense. On a linked-quarter basis, noninterest expense was down $1.1 million primarily due to a $783 drop in other real estate expenses and a $185 decline in FDIC assessments.

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 first quarter 2012 on Thursday, April 19, 2012, 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. 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 (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 $1.3 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 future suggested problem loan migration, 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
	March 31, 2012			March 31, 2011
Interest and dividend income
Loans	$	12,122		$	12,999
Securities		2,144			2,041
Federal funds sold & interest-bearing deposits with banks		1			2

		14,267			15,042

Interest expense
Deposits		1,139			1,926
Federal Home Loan Bank & Federal Reserve borrowings		469			492
Junior subordinated debentures		40			31
Federal funds purchased		6			11

		1,654			2,460

Net interest income		12,613			12,582
Provision for loan losses		1,300			2,150

Net interest income after provision for loan losses		11,313			10,432

Noninterest income
Service charges on deposit accounts		440			430
Other fee income, principally bankcard		387			387
Loan servicing fees		18			28
Mortgage banking income		72			42
Bank-owned life insurance income		127			—
Loss on sale of investment securities		—			(9	)
Other noninterest income		408			272

		1,452			1,150

Noninterest expense
Salaries and employee benefits		4,913			4,667
Premises and equipment		863			858
Bankcard processing		141			157
Business development		423			382
FDIC insurance assessment		239			508
Other real estate expense		378			955
Other noninterest expense		1,762			1,818

		8,719			9,345

Income before provision for income taxes		4,046			2,237
Provision for income taxes		1,330			788

Net income	$	2,716		$	1,449

Earnings per share:
Basic	$	0.15		$	0.08

Diluted	$	0.15		$	0.08

Weighted average shares outstanding:
Basic		18,376,324			18,415,865
Common stock equivalents attributable to stock-based awards		141,996			28,539

Diluted		18,518,320			18,444,404

PERFORMANCE RATIOS
Return on average assets		0.85	%		0.49	%
Return on average equity (book)		6.07	%		3.40	%
Return on average equity (tangible) ⁽¹⁾		6.93	%		3.90	%
Net interest margin ⁽²⁾		4.39	%		4.70	%
Efficiency ratio ⁽³⁾		61.99	%		68.05	%

⁽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)


	March 31, 2012			December 31, 2011			March 31, 2011
ASSETS
Cash and due from banks	$	18,187		$	19,807		$	17,333
Interest-bearing deposits with banks		207			52			273

Total cash and cash equivalents		18,394			19,859			17,606
Securities available-for-sale		366,916			346,542			270,792
Loans held-for-sale		—			1,058			360
Loans, less allowance for loan losses and net deferred fees		809,031			805,211			826,466
Interest receivable		4,560			4,725			4,458
Federal Home Loan Bank stock		10,652			10,652			10,652
Property and equipment, net of accumulated depreciation		19,950			20,177			20,597
Goodwill and intangible assets		22,179			22,235			22,402
Deferred tax asset		6,648			7,308			9,869
Taxes receivable		1,671			1,671			—
Other real estate owned		10,102			11,000			13,740
Prepaid FDIC assessment		2,536			2,782			3,907
Bank-owned life insurance		15,165			15,038			—
Other assets		1,989			1,974			1,686

Total assets	$	1,289,793		$	1,270,232		$	1,202,535

LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Noninterest-bearing demand	$	281,282		$	278,576		$	247,223
Savings and interest-bearing checking		517,350			545,856			541,833
Time $100,000 and over		72,309			72,436			62,385
Other time		83,706			68,386			74,929

Total deposits		954,647			965,254			926,370
Federal funds and overnight funds purchased		—			12,300			—
Federal Home Loan Bank borrowings		143,500			101,500			91,500
Junior subordinated debentures		8,248			8,248			8,248
Accrued interest and other payables		3,838			4,064			2,667

Total liabilities		1,110,233			1,091,366			1,028,785

Shareholders’ equity
Common stock: 50,000,000 shares authorized. Shares issued and outstanding: 18,195,415 at March 31, 2012, 18,435,084 at December 31, 2011 and 18,421,132 at March 31 ,2011		135,920			137,844			137,221
Retained earnings		39,267			37,468			35,234
Accumulated other comprehensive income		4,373			3,554			1,295

		179,560			178,866			173,750

Total liabilities and shareholders’ equity	$	1,289,793		$	1,270,232		$	1,202,535

CAPITAL RATIOS
Total capital (to risk weighted assets)		19.02	%		19.22	%		18.18	%
Tier I capital (to risk weighted assets)		17.76	%		17.97	%		16.93	%
Tier I capital (to leverage assets)		12.08	%		13.09	%		13.42	%
Tangible common equity (to tangible assets)⁽¹⁾		12.42	%		12.55	%		12.82	%
Tangible common equity (to risk-weighted assets)⁽¹⁾		17.36	%		17.47	%		16.21	%
OTHER FINANCIAL DATA
Shares outstanding at end of period		18,195,415			18,435,084			18,421,132
Tangible shareholders’ equity⁽¹⁾	$	157,381		$	156,631		$	151,348
Book value per share	$	9.87		$	9.70		$	9.43
Tangible book value per share	$	8.65		$	8.50		$	8.22

⁽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)


	March 31, 2012			December 31, 2011			March 31, 2011
LOANS BY TYPE
Real estate secured loans:
Permanent loans:
Multifamily residential	$	51,102		$	51,897		$	48,111
Residential 1-4 family		59,642			61,717			72,926
Owner-occupied commercial		218,526			207,008			205,701
Nonowner-occupied commercial		140,142			157,844			178,885

Total permanent real estate loans		469,412			478,466			505,623
Construction loans:
Multifamily residential		4,906			2,574			1,114
Residential 1-4 family		16,590			17,960			21,774
Commercial real estate		12,546			10,901			12,332
Commercial bare land and acquisition & development		18,566			19,496			25,072
Residential bare land and acquisition & development		11,016			12,707			14,506

Total construction real estate loans		63,624			63,638			74,798
Total real estate loans		533,036			542,104			580,421
Commercial loans		286,543			272,600			253,810
Consumer loans		4,569			4,569			5,966
Other loans		1,439			1,556			2,119

Gross loans		825,587			820,829			842,316
Deferred loan origination fees		(727	)		(677	)		(623	)

		824,860			820,152			841,693
Allowance for loan losses		(15,829	)		(14,941	)		(15,227	)

	$	809,031		$	805,211		$	826,466

Real estate loans held-for-sale	$	—		$	1,058		$	360


	Three months ended
	March 31, 2012			December 31, 2011			March 31, 2011
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period	$	14,941		$	15,287		$	16,570
Provision for loan losses		1,300			7,000			2,150
Loan charge offs		(522	)		(7,720	)		(3,613	)
Loan recoveries		110			374			120

Net charge offs		(412	)		(7,346	)		(3,493	)

Balance at end of period	$	15,829		$	14,941		$	15,227

PACIFIC CONTINENTAL CORPORATION

Selected Other Financial Information and Ratios

(In thousands)

(Unaudited)


	Three months ended
	March 31, 2012			December 31, 2011			March 31, 2011
BALANCE SHEET AVERAGES
Loans⁽¹⁾	$	826,265		$	825,988		$	850,806
Allowance for loan losses		(15,427	)		(15,250	)		(17,189	)

Loans, net of allowance		810,838			810,738			833,617
Securities and short-term deposits		360,940			341,563			261,272

Earning assets		1,171,778			1,152,301			1,094,889
Noninterest-earning assets		112,849			105,416			106,368

Assets	$	1,284,627		$	1,257,717		$	1,201,257

Interest-bearing core deposits⁽²⁾	$	586,154		$	597,550		$	630,327
Noninterest-bearing core deposits⁽²⁾		283,943			275,212			246,882

Core deposits⁽²⁾		870,097			872,762			877,209
Noncore interest-bearing deposits		78,781			73,988			52,714

Deposits		948,878			946,750			929,923
Borrowings		151,828			124,775			94,832
Other noninterest-bearing liabilities		4,037			4,616			3,526

Liabilities		1,104,743			1,076,141			1,028,281

Shareholders’ equity (book)		179,884			181,576			172,976

Liabilities and equity	$	1,284,627		$	1,257,717		$	1,201,257

Shareholders’ equity (tangible)⁽³⁾	$	157,675		$	159,313		$	150,544

SELECTED MARKET DATA
Eugene market gross loans, period end	$	251,434		$	250,345		$	255,342
Portland market gross loans, period end		417,382			406,316			403,575
Seattle market gross loans, period end		156,771			164,168			183,399

Total gross loans, period end	$	825,587		$	820,829		$	842,316

Eugene market core deposits, period end⁽²⁾	$	502,710		$	526,928		$	509,572
Portland market core deposits, period end⁽²⁾		235,571			237,230			246,339
Seattle market core deposits, period end⁽²⁾		120,648			121,685			117,873

Total core deposits, period end⁽²⁾		858,929			885,843			873,784
Other deposits, period end		95,718			79,411			52,586

Total	$	954,647		$	965,254		$	926,370

Eugene market core deposits, average⁽²⁾	$	506,776		$	509,882		$	515,264
Portland market core deposits, average⁽²⁾		242,659			239,459			245,911
Seattle market core deposits, average⁽²⁾		120,662			123,421			116,034

Total core deposits, average⁽²⁾		870,097			872,762			877,209
Other deposits, average		78,781			73,988			52,714

Total	$	948,878		$	946,750		$	929,923

NET INTEREST MARGIN RECONCILIATION
Yield on average loans		6.01	%		6.17	%		6.32	%
Yield on average securities⁽⁴⁾		2.60	%		2.88	%		3.33	%

Yield on average earning assets⁽⁴⁾		4.96	%		5.19	%		5.61	%
Rate on average interest-bearing core deposits		0.53	%		0.58	%		1.08	%
Rate on average interest-bearing non-core deposits		1.85	%		1.81	%		1.85	%

Rate on average interest-bearing deposits		0.69	%		0.72	%		1.14	%
Rate on average borrowings		1.36	%		1.68	%		2.28	%

Cost of interest-bearing funds		0.81	%		0.87	%		1.28	%

Interest rate spread⁽⁴⁾		4.15	%		4.32	%		4.33	%

Net interest margin⁽⁴⁾		4.39	%		4.59	%		4.70	%

⁽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.

⁽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 $186 thousand, $162 thousand and $104 thousand for the three months ended March 31, 2012, December 31, 2011 and March 31, 2011, respectively

PACIFIC CONTINENTAL CORPORATION

Nonperforming Assets and Asset Quality Ratios

(In thousands)

(Unaudited)


	March 31, 2012			December 31, 2011			March 31, 2011
NONPERFORMING ASSETS
Non-accrual loans
Real estate secured loans:
Permanent loans:
Multifamily residential	$	—		$	—		$	64
Residential 1-4 family		3,344			3,426			6,503
Owner-occupied commercial		5,058			5,138			1,959
Nonowner-occupied commercial		—			575			9,622

Total permanent real estate loans		8,402			9,139			18,148
Construction loans:
Multifamily residential		—			—			232
Residential 1-4 family		15			757			1,972
Commercial real estate		933			933			1,500
Commercial bare land and acquisition & development		8,491			7,837			—
Residential bare land and acquisition & development		1,791			1,929			2,024

Total construction real estate loans		11,230			11,456			5,728

Total real estate loans		19,632			20,595			23,876
Commercial loans		5,899			5,999			7,275

Total nonaccrual loans		25,531			26,594			31,151
90-days past due and accruing interest		—			—			—
Total nonperforming loans		25,531			26,594			31,151

Nonperforming loans guaranteed by government		(492	)		(495	)		(761	)
Net nonperforming loans		25,039			26,099			30,390

Other real estate owned		10,102			11,000			13,740

Total nonperforming assets, net of guaranteed loans	$	35,141		$	37,099		$	44,130

ASSET QUALITY RATIOS
Allowance for loan losses as a percentage of total loans outstanding		1.92	%		1.82	%		1.81	%
Allowance for loan losses as a percentage of total nonperforming loans, net of government guarantees		63.22	%		57.25	%		50.11	%
Quarter to date net loan charge offs (recoveries) as a percentage of average loans, annualized		0.20	%		3.53	%		1.67	%
Net nonperforming loans as a percentage of total loans		3.04	%		3.18	%		3.61	%
Nonperforming assets as a percentage of total assets		2.72	%		2.92	%		3.67	%
Consolidated classified asset ratio⁽¹⁾		38.44	%		38.91	%		55.27	%
Past due as a percentage of total loans ⁽²⁾		0.67	%		0.41	%		1.02	%

⁽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

Nonperforming Loan Rollforward

(In thousands)

(Unaudited)


	Balance at December 31, 2011		Additions to Non-performing		Reclassification		Net Paydowns			Returns to Performing		Charge-offs			Transfers to OREO			Balance at March 31, 2012
Real estate loans
Multifamily residential	$	—	$	—	$	—	$	—		$	—	$	—		$	—		$	—
Residential 1-4 family		3,426		189		—		(50	)		—		(148	)		(73	)		3,344
Owner-occupied commercial		5,138		—		—		(80	)		—		—			—			5,058
Nonowner-occupied commercial		575		—		—		(565	)		—		(10	)		—			—

Total real estate loans		9,139		189		—		(695	)		—		(158	)		(73	)		8,402
Construction
Multifamily residential		—				—		—			—		—			—			—
Residential 1-4 family		757				—		(674	)		—		(68	)		—			15
Commercial real estate		933				—		—			—		—			—			933
Commercial bare land and acquisition & development		7,837		660		—		(6	)		—		—			—			8,491
Residential bare land and acquisition & development		1,929		143		—		(144	)		—		(137	)		—			1,791

Total construction loans		11,456		803		—		(824	)		—		(205	)		—			11,230
Commercial and other		5,999		—		—		(100	)		—		—			—			5,899
Consumer		—		—		—		—			—		—			—			—

Total	$	26,594	$	992	$	—	$	(1,619	)	$	—	$	(363	)	$	(73	)	$	25,531

PACIFIC CONTINENTAL CORPORATION

Other Real Estate Owned Rollforward

(In thousands)

(Unaudited)


	Balance at December 31, 2011		Additions to OREO		Capitalized Costs		Paydowns/ Sales			Writedowns/ Loss/Gain			Balance at March 31, 2012
Real estate
Multifamily residential	$	—	$	—	$	—	$	—		$	—		$	—
Residential 1-4 family		3,242		73		—		(382	)		(148	)		2,785
Owner-occupied commercial		469		—		—		—			(33	)		436
Nonowner-occupied commercial		4,769		—		—		(244	)		(163	)		4,362

Total real estate loans		8,480		73		—		(626	)		(344	)		7,583
Construction
Multifamily residential		—		—		—		—			—			—
Residential 1-4 family		234		—		—		—			—			234
Commercial real estate		1,425		—		—		—			—			1,425
Commercial bare land and acquisition & development		819		—		—		—			—			819
Residential bare land and acquisition & development		42		—		—		—			(1	)		41

Total construction loans		2,520		—		—		—			(1	)		2,519
Commercial and other		—		—		—		—			—			—
Consumer		—		—		—		—			—			—

Total	$	11,000	$	73	$	—	$	(626	)	$	(345	)	$	10,102

PACIFIC CONTINENTAL CORPORATION

Aged Analysis of Loans Receivable (Unaudited)

(In thousands)

As of March 31, 2012


	30-59 Days Past Due Still Accruing		60-89 Days Past Due Still Accruing		Greater Than 90 Days Still Accruing		Nonaccrual		Total Past Due and Nonaccrual		Total Current		Total Loans Receivable
Real estate loans
Multifamily residential	$	—	$	—	$	—	$	—	$	—	$	51,102	$	51,102
Residential 1-4 family		635		243		—		3,344		4,222		55,420		59,642
Owner-occupied commercial		—		732		—		5,058		5,790		212,736		218,526
Nonowner-occupied commercial		96		—		—		—		96		140,046		140,142

Total real estate loans		731		975		—		8,402		10,108		459,304		469,412
Construction
Multifamily residential		—		—		—		—		—		4,906		4,906
Residential 1-4 family		—		—		—		15		15		16,575		16,590
Commercial real estate		1,538		—		—		933		2,471		10,075		12,546
Commercial bare land and acquisition & development		—		—		—		8,491		8,491		10,075		18,566
Residential bare land and acquisition & development		—		—		—		1,791		1,791		9,225		11,016

Total construction loans		1,538		—		—		11,230		12,768		50,856		63,624
Commercial and other		1,340		951		—		5,899		8,190		279,792		287,982
Consumer		6		9		—		—		15		4,554		4,569

Totals	$	3,615	$	1,935	$	—	$	25,531	$	31,081	$	794,506	$	825,587

PACIFIC CONTINENTAL CORPORATION

Aged Analysis of Loans Receivable (Unaudited)

(In thousands)

As of March 31, 2011


	30-59 Days Past Due Still Accruing		60-89 Days Past Due Still Accruing		Greater Than 90 Days Still Accruing		Nonaccrual		Total Past Due and Nonaccrual		Total Current		Total Financing Receivables
Real estate loans
Multifamily residential	$	—	$	—	$	—	$	64	$	64	$	48,047	$	48,111
Residential 1-4 family		588		2,453		—		6,503		9,544		63,382		72,926
Owner-occupied commercial		2,694		—		—		1,959		4,653		201,048		205,701
Nonowner-occupied commercial		5		14		—		9,622		9,641		169,244		178,885

Total real estate loans		3,287		2,467		—		18,148		23,902		481,721		505,623
Construction
Multifamily residential		—		—		—		232		232		882		1,114
Residential 1-4 family		213		—		—		1,972		2,185		19,589		21,774
Commercial real estate		1,538		—		—		1,500		3,038		9,294		12,332
Commercial bare land and acquisition & development		660		—		—		—		660		24,412		25,072
Residential bare land and acquisition & development		—		—		—		2,024		2,024		12,482		14,506

Total construction loans		2,411		—		—		5,728		8,139		66,659		74,798
Commercial and other		452		—		—		7,275		7,727		248,202		255,929
Consumer		22		—		—		—		22		5,944		5,966

Total	$	6,172	$	2,467	$	—	$	31,151	$	39,790	$	802,526	$	842,316

PACIFIC CONTINENTAL CORPORATION

Credit Quality Indicators (Unaudited)

(In thousands)

As of March 31, 2012


	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals
Real estate loans
Multifamily residential	$	49,762	$	—	$	1,340	$	—	$	51,102
Residential 1-4 family		49,583		—		10,059		—		59,642
Owner-occupied commercial		205,878		—		11,083		1,565		218,526
Nonowner-occupied commercial		137,782		—		2,360		—		140,142

Total real estate loans		443,005		—		24,842		1,565		469,412
Construction
Multifamily residential		4,906		—		—		—		4,906
Residential 1-4 family		13,356		—		3,234		—		16,590
Commercial real estate		8,742		—		3,804		—		12,546
Commercial bare land and acquisition & development		10,074		—		8,492		—		18,566
Residential bare land and acquisition & development		6,164		—		4,852		—		11,016

Total construction loans		43,242		—		20,382		—		63,624
Commercial and other		277,913		—		9,993		76		287,982
Consumer		4,491		—		78		—		4,569

Totals	$	768,651	$	—	$	55,295	$	1,641	$	825,587

PACIFIC CONTINENTAL CORPORATION

Credit Quality Indicators (Unaudited)

(In thousands)

As of March 31, 2011


	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals
Real estate loans
Multifamily residential	$	44,121	$	—	$	3,990	$	—	$	48,111
Residential 1-4 family		57,194		—		15,248		484		72,926
Owner-occupied commercial		195,723		—		9,978		—		205,701
Nonowner-occupied commercial		166,729		—		12,156		—		178,885

Total real estate loans		463,767		—		41,372		484		505,623
Construction
Multifamily residential		882		—		232		—		1,114
Residential 1-4 family		18,524		—		3,250		—		21,774
Commercial real estate		7,893		—		4,439		—		12,332
Commercial bare land and acquisition & development		11,347		—		13,725		—		25,072
Residential bare land and acquisition & development		10,753		—		3,753		—		14,506

Total construction loans		49,399		—		25,399		—		74,798
Commercial and other		244,382		400		11,147		—		255,929
Consumer		5,909		—		57		—		5,966

Totals	$	763,457	$	400	$	77,975	$	484	$	842,316

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