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8-K - 8-K - PACIFIC CONTINENTAL CORPd660196d8k.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
  www.therightbank.com
  Email: banking@therightbank.com

FOR IMMEDIATE RELEASE

Pacific Continental Corporation Reports Fourth Quarter and Full Year 2013 Results

Loan Growth and Acquisition Produce Record Net Income

EUGENE, Ore., January 22, 2014 – Pacific Continental Corporation (Nasdaq: PCBK), the holding company of Pacific Continental Bank, today reported financial results for the fourth quarter and full year 2013.

Recent highlights:

 

    Record net income of $13.8 million for the year 2013.

 

    Organic loan growth continued for the eighth consecutive quarter.

 

    Continued improvement in credit quality statistics.

 

    Declared first quarter 2014 regular quarterly cash dividend of $0.10 per share and special cash dividend of $0.10 per share.

 

    Total risk-based capital ratio of 16.15%, significantly above the 10.00% minimum for “well-capitalized” designation.

 

    Recognized as one of Oregon’s most admired companies by the Portland Business Journal for the fifth consecutive year.

Net income

Net income for fourth quarter 2013 was $3.7 million or $0.20 per diluted share compared to net income of $3.4 million or $0.19 per diluted share in fourth quarter 2012. Return on average assets, average book equity, and average tangible equity were 1.00%, 8.06%, and 9.28%, respectively, in fourth quarter 2013, compared to 0.99%, 7.33%, and 8.33% for the same quarter last year.

Net income for the full year 2013 was a record $13.8 million or $0.76 per diluted share compared to net income of $12.7 million or $0.69 per share for the year 2012. Included in 2013 full year results was $1.2 million of one-time merger related expenses related to the Century Bank acquisition, which reduced current year net income by $822 thousand or $0.05 per diluted share.

“We are certainly pleased with our 2013 results and the shareholder returns for the year both in terms of share appreciation and dividends,” said Hal Brown, chief executive officer. “Our strong capital position, liquidity and credit quality, together with the improving economic conditions, support our optimistic outlook as we begin 2014,” added Brown.

Loan growth

Outstanding gross loans at December 31, 2013, were $994.8 million, up $16.1 million over the prior quarter end and up $123.5 million from year-end 2012. Excluding the loans acquired in the Century Bank transaction, organic loan growth for 2013 was $80.5 million for an annualized growth rate of 9.24%. Loan growth for the fourth quarter and full year was primarily centered in owner-occupied commercial real estate, construction lending and commercial loans.


At December 31, 2013, loans to dental professionals totaled $307.3 million, representing 30.9% of the total loan portfolio. Outstanding loans to dental professionals grew by $36.5 million or 13.5% over December 31, 2012.

“Our sustained loan growth was attributable to an improving economy, our niche focus and a strong team of relationship bankers that successfully retained and added several client relationships during the year,” said Roger Busse, president and chief operating officer. “Our dental lending program continued to be very successful both in terms of growth and credit quality,” added Busse.

Core deposits

Period-end Company-defined core deposits were $990.3 million, an increase of $51.7 million or 5.5% over the prior year end. At period-end December 31, 2013, noninterest-bearing demand deposits totaled $366.9 million and represented 37.0% of core deposits.

Net interest margin

The fourth quarter 2013 net interest margin, on a tax equivalent basis, was 4.39%, representing an increase of 28 basis points over the 4.11% reported for the fourth quarter 2012. Included in the fourth quarter net interest margin was a $220 thousand prepayment penalty from an early payoff of a loan, which contributed 7 basis points to the current quarter’s margin. In addition, the accretion of the Century Bank loan fair value market adjustment positively impacted the net interest margin by 4 basis points.

The net interest margin for the full year 2013, on a tax equivalent basis, was 4.37%, an increase of 13 basis points over the 4.24% net interest margin reported for 2012. Earning asset yields remained relatively unchanged in 2013 when compared to 2012, primarily due to an increase in yield on the securities portfolio. Most of the improvement in the annual net interest margin was attributable to a lower cost of funds as the cost of interest-bearing liabilities was down 17 basis points in 2013 from 2012.

Classified assets, provisioning and loan statistics

At December 31, 2013, classified assets totaled $52.0 million and represented 29.02% of regulatory capital, compared to $56.1 million and 31.18% of regulatory capital at December 31, 2012. Classified asset levels increased by $5.8 million as a result of the Century Bank acquisition. Fourth quarter 2013 classified assets were lower than pre-acquisition levels.

Nonperforming assets, a subcategory of classified assets, totaled $21.0 million at December 31, 2013, or 1.45% of total assets, a decrease from the December 31, 2012 ratio of 1.92%. Nonperforming assets were comprised of $4.6 million in nonperforming loans, net of government guarantees, and $16.4 million in other real estate owned. Loans past-due 30-89 days were 0.23% of total loans at December 31, 2013, compared to 0.30% at December 31, 2012.

“This is the fourth consecutive year of improvement in our credit quality statistics and we are optimistic this trend will continue in 2014,” said Casey Hogan, executive vice president and chief credit officer.

The Company made no provision for loan losses during the fourth quarter 2013 and provisioned $250 thousand for the full year 2013. Net loan charge offs for the year 2013 were $678 thousand or 0.07% of average outstanding loans. The allowance for loan losses as a percentage of outstanding loans at December 31, 2013, was 1.60% compared to 1.88% at December 31, 2012. The allowance for loan losses as a percentage of total nonperforming loans, net of government guarantees, improved to 345.42% at December 31, 2013, from 193.29% 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 December 31, 2013, the Company’s Tier 1 leverage ratio, Tier 1 risk-based capital ratio, and Total risk-based capital ratios were 11.49%, 14.90% and 16.15%, respectively, as compared to 12.33%, 16.90% and 18.15% at December 31, 2012, reflecting improved capital leverage. The FDIC’s minimum “well-capitalized” ratios are 5.00%, 6.00% and 10.00%, respectively.

Noninterest income and expense

Noninterest income for the fourth quarter was $1.6 million, up $181 thousand over fourth quarter 2012. Noninterest expense in fourth quarter 2013 was up $1.1 million over fourth quarter 2012, with a portion of the increase centered in other real estate expense, primarily attributable to valuation write-downs. In addition, employee compensation was up, reflecting the addition of business development personnel who have increased calling efforts during 2013, resulting in part in the Bank’s loan growth during the period. The fourth quarter 2013 efficiency ratio was 62.97% compared to 64.26% for fourth 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 fourth quarter and full-year 2013 on Thursday, January 23, 2014, 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 position, liquidity, credit quality, 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     Twelve months ended  
     December 31,     December 31,     December 31,     December 31,  
     2013     2012     2013     2012  

Interest and dividend income

        

Loans

   $ 13,482      $ 12,002      $ 53,275      $ 48,091   

Taxable securities

     1,566        1,285        5,730        6,171   

Tax-exempt securities

     489        464        1,918        1,626   

Federal funds sold & interest-bearing deposits with banks

     2        2        10        6   
  

 

 

   

 

 

   

 

 

   

 

 

 
     15,539        13,753        60,933        55,894   
  

 

 

   

 

 

   

 

 

   

 

 

 

Interest expense

        

Deposits

     803        909        3,389        4,059   

Federal Home Loan Bank & Federal Reserve borrowings

     284        325        1,189        1,584   

Junior subordinated debentures

     60        35        200        151   

Federal funds purchased

     4        3        16        24   
  

 

 

   

 

 

   

 

 

   

 

 

 
     1,151        1,272        4,794        5,818   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

     14,388        12,481        56,139        50,076   

Provision for loan losses

     —          —          250        1,900   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income after provision for loan losses

     14,388        12,481        55,889        48,176   
  

 

 

   

 

 

   

 

 

   

 

 

 

Noninterest income

        

Service charges on deposit accounts

     490        468        1,926        1,827   

Other fee income, principally bankcard

     407        389        1,624        1,595   

Mortgage banking income

     —          —          —          72   

Bank-owned life insurance income

     128        152        515        583   

Loss on sale of investment securities

     —          —          (8     —     

Impairment losses on investment securities (OTTI)

     (7     —          (23     —     

Other noninterest income

     545        373        1,792        1,664   
  

 

 

   

 

 

   

 

 

   

 

 

 
     1,563        1,382        5,826        5,741   
  

 

 

   

 

 

   

 

 

   

 

 

 

Noninterest expense

        

Salaries and employee benefits

     5,776        4,855        22,120        19,576   

Premises and equipment

     938        820        3,684        3,373   

Data processing

     651        553        2,605        2,096   

Legal and professional fees

     407        357        1,867        1,735   

Business development

     430        470        1,805        1,558   

FDIC insurance assessment

     238        271        912        1,085   

Bankcard processing

     109        140        527        580   

Other real estate expense

     639        412        2,401        1,494   

Merger related expenses (1)

     —          203        1,246        203   

Other noninterest expense

     857        827        3,565        3,405   
  

 

 

   

 

 

   

 

 

   

 

 

 
     10,045        8,908        40,732        35,105   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before provision for income taxes

     5,906        4,955        20,983        18,812   

Provision for income taxes

     2,254        1,572        7,216        6,159   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 3,652      $ 3,383      $ 13,767      $ 12,653   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share:

        

Basic

   $ 0.20      $ 0.19      $ 0.77      $ 0.70   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.20      $ 0.19      $ 0.76      $ 0.69   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding:

        

Basic

     17,888,818        17,845,645        17,871,439        18,085,607   

Common stock equivalents attributable to stock-based awards

     237,455        152,564        188,484        152,553   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     18,126,273        17,998,209        18,059,923        18,238,160   
  

 

 

   

 

 

   

 

 

   

 

 

 

PERFORMANCE RATIOS

        

Return on average assets

     1.00     0.99     0.96     0.96

Return on average equity (book)

     8.06     7.33     7.61     6.97

Return on average equity (tangible) (2)

     9.28     8.33     8.75     7.94

Net interest margin (3)

     4.39     4.11     4.37     4.24

Efficiency ratio (4)

     62.97     64.26     65.73     62.89

 

(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)

 

     December 31,     December 31,  
     2013     2012  

ASSETS

    

Cash and due from banks

   $ 21,053      $ 28,607   

Interest-bearing deposits with banks

     55        94   
  

 

 

   

 

 

 

Total cash and cash equivalents

     21,108        28,701   

Securities available-for-sale

     347,386        389,885   

Loans, less allowance for loan losses and net deferred fees

     977,928        854,071   

Interest receivable

     4,703        4,520   

Federal Home Loan Bank stock

     10,425        10,462   

Property and equipment, net of accumulated depreciation

     18,836        19,238   

Goodwill and intangible assets

     23,616        22,031   

Deferred tax asset

     9,598        6,230   

Taxes receivable

     80        —     

Other real estate owned

     16,355        17,972   

Prepaid FDIC assessment

     —          1,746   

Bank-owned life insurance

     16,136        15,621   

Other assets

     3,555        3,010   
  

 

 

   

 

 

 

Total assets

   $ 1,449,726      $ 1,373,487   
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Deposits

    

Noninterest-bearing demand

   $ 366,891      $ 329,825   

Savings and interest-bearing checking

     559,632        554,693   

Time $100,000 and over

     79,081        73,610   

Other time

     85,377        88,026   
  

 

 

   

 

 

 

Total deposits

     1,090,981        1,046,154   

Federal funds and overnight funds purchased

     5,150        11,570   

Federal Home Loan Bank borrowings

     160,000        118,000   

Junior subordinated debentures

     8,248        8,248   

Accrued interest and other payables

     6,163        6,134   
  

 

 

   

 

 

 

Total liabilities

     1,270,542        1,190,106   
  

 

 

   

 

 

 

Shareholders’ equity

    

Common stock: 50,000,000 shares authorized. Shares issued and outstanding: 17,891,687 at December 31, 2013 and 17,835,088 at December 31, 2012

     133,835        133,017   

Retained earnings

     45,250        44,533   

Accumulated other comprehensive income

     99        5,831   
  

 

 

   

 

 

 
     179,184        183,381   
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 1,449,726      $ 1,373,487   
  

 

 

   

 

 

 

CAPITAL RATIOS

    

Total capital (to risk weighted assets)

     16.15     18.15

Tier I capital (to risk weighted assets)

     14.90     16.90

Tier I capital (to leverage assets)

     11.49     12.33

Tangible common equity (to tangible assets)(1)

     10.91     11.94

Tangible common equity (to risk-weighted assets)(1)

     14.18     16.67

OTHER FINANCIAL DATA

    

Shares outstanding at end of period

     17,891,687        17,835,088   

Tangible shareholders’ equity(1)

   $ 155,568      $ 161,350   

Book value per share

   $ 10.01      $ 10.28   

Tangible book value per share

   $ 8.69      $ 9.05   

 

(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)

 

     December 31,     December 31,  
     2013     2012  

LOANS BY TYPE

    

Real estate secured loans:

    

Permanent loans:

    

Multi-family residential

   $ 46,217      $ 45,212   

Residential 1-4 family

     46,438        51,437   

Owner-occupied commercial

     249,311        219,276   

Nonowner-occupied commercial

     158,786        145,315   
  

 

 

   

 

 

 

Total permanent real estate loans

     500,752        461,240   

Construction loans:

    

Multi-family residential

     23,419        17,022   

Residential 1-4 family

     26,512        20,390   

Commercial real estate

     30,516        23,235   

Commercial bare land and acquisition & development

     11,473        10,668   

Residential bare land and acquisition & development

     6,990        8,405   
  

 

 

   

 

 

 

Total construction real estate loans

     98,910        79,720   

Total real estate loans

     599,662        540,960   

Commercial loans

     390,301        325,604   

Consumer loans

     3,878        3,581   

Other loans

     928        1,112   
  

 

 

   

 

 

 

Gross loans

     994,769        871,257   

Deferred loan origination fees

     (924     (841
  

 

 

   

 

 

 
     993,845        870,416   

Allowance for loan losses

     (15,917     (16,345
  

 

 

   

 

 

 
   $ 977,928      $ 854,071   
  

 

 

   

 

 

 

 

     Three months ended     Twelve months ended  
     December 31,     December 31,     December 31,     December 31,  
     2013     2012     2013     2012  

ALLOWANCE FOR LOAN LOSSES

        

Balance at beginning of period

   $ 16,802      $ 16,283      $ 16,345      $ 14,941   

Provision for loan losses

     —          —          250        1,900   

Loan charge offs

     (1,039     (855     (2,088     (3,664

Loan recoveries

     154        917        1,410        3,168   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net recoveries (charge offs)

     (885     62        (678     (496
  

 

 

   

 

 

   

 

 

   

 

 

 

Balance at end of period

   $ 15,917      $ 16,345      $ 15,917      $ 16,345   
  

 

 

   

 

 

   

 

 

   

 

 

 


PACIFIC CONTINENTAL CORPORATION

Selected Other Financial Information and Ratios

(In thousands)

(Unaudited)

 

     Three months ended     Twelve months ended  
     December 31,     December 31,     December 31,     December 31,  
     2013     2012     2013     2012  

BALANCE SHEET AVERAGES

        

Loans(1)

   $ 990,566      $ 846,199      $ 959,873      $ 832,787   

Allowance for loan losses

     (16,709     (16,518     (16,492     (16,132
  

 

 

   

 

 

   

 

 

   

 

 

 

Loans, net of allowance

     973,857        829,681        943,381        816,655   

Securities and short-term deposits

     350,101        401,537        366,102        384,918   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earning assets

     1,323,958        1,231,218        1,309,483        1,201,573   

Noninterest-earning assets

     122,739        126,878        123,730        115,521   
  

 

 

   

 

 

   

 

 

   

 

 

 

Assets

   $ 1,446,697      $ 1,358,096      $ 1,433,213      $ 1,317,094   
  

 

 

   

 

 

   

 

 

   

 

 

 

Interest-bearing core deposits(2)

   $ 626,161      $ 583,339      $ 631,529      $ 579,828   

Noninterest-bearing core deposits(2)

     361,046        317,029        336,063        297,428   
  

 

 

   

 

 

   

 

 

   

 

 

 

Core deposits(2)

     987,207        900,368        967,592        877,256   

Noncore interest-bearing deposits

     101,263        103,851        106,574        95,598   
  

 

 

   

 

 

   

 

 

   

 

 

 

Deposits

     1,088,470        1,004,219        1,074,166        972,854   

Borrowings

     173,038        164,966        173,919        158,254   

Other noninterest-bearing liabilities

     5,342        5,281        4,271        4,511   
  

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities

     1,266,850        1,174,466        1,252,356        1,135,619   
  

 

 

   

 

 

   

 

 

   

 

 

 

Shareholders’ equity (book)

     179,847        183,630        180,857        181,475   
  

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities and equity

   $ 1,446,697      $ 1,358,096      $ 1,433,213      $ 1,317,094   
  

 

 

   

 

 

   

 

 

   

 

 

 

Shareholders’ equity (tangible)(3)

   $ 156,154      $ 161,586      $ 157,278      $ 159,349   
  

 

 

   

 

 

   

 

 

   

 

 

 

SELECTED MARKET DATA

        

Eugene market gross loans, period-end

   $ 334,511      $ 253,345       

Portland market gross loans, period-end

     391,295        383,616       

Seattle market gross loans, period-end

     132,488        154,229       

National health care gross loans, period-end (4)

     136,475        80,067       
  

 

 

   

 

 

     

Total gross loans, period-end

   $ 994,769      $ 871,257       
  

 

 

   

 

 

     

Eugene market core deposits, period-end(2)

   $ 588,158      $ 536,143       

Portland market core deposits, period-end(2)

     249,050        258,516       

Seattle market core deposits, period-end(2)

     153,107        143,970       
  

 

 

   

 

 

     

Total core deposits, period-end(2)

     990,315        938,629       

Other deposits, period-end

     100,666        107,525       
  

 

 

   

 

 

     

Total

   $ 1,090,981      $ 1,046,154       
  

 

 

   

 

 

     

Eugene market core deposits, average(2)

   $ 592,179      $ 518,487      $ 582,053      $ 508,856   

Portland market core deposits, average(2)

     242,855        241,585        244,997        236,200   

Seattle market core deposits, average(2)

     152,173        140,296        140,542        132,200   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total core deposits, average(2)

     987,207        900,368        967,592        877,256   

Other deposits, average

     101,263        103,851        106,574        95,598   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 1,088,470      $ 1,004,219      $ 1,074,166      $ 972,854   
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INTEREST MARGIN RECONCILIATION

        

Yield on average loans

     5.49     5.76     5.65     5.89

Yield on average securities(5)

     2.63     1.98     2.37     2.25
  

 

 

   

 

 

   

 

 

   

 

 

 

Yield on average earning assets(5)

     4.74     4.53     4.73     4.72

Rate on average interest-bearing core deposits

     0.32     0.41     0.34     0.47

Rate on average interest-bearing non-core deposits

     1.18     1.17     1.17     1.38
  

 

 

   

 

 

   

 

 

   

 

 

 

Rate on average interest-bearing deposits

     0.44     0.53     0.46     0.41

Rate on average borrowings

     0.80     0.88     0.81     1.11
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of interest-bearing funds

     0.51     0.59     0.53     0.70
  

 

 

   

 

 

   

 

 

   

 

 

 

Interest rate spread(5)

     4.23     3.93     4.21     4.03
  

 

 

   

 

 

   

 

 

   

 

 

 

Net interest margin(5)

     4.39     4.11     4.37     4.24
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(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 $236 for the three months ended December 31, 2013, and December 31, 2012, respectively, and $1,033 thousand and $875 thousand for the twelve months ended December 31, 2013, and December 31 , 2012, respectively.


PACIFIC CONTINENTAL CORPORATION

Nonperforming Assets and Asset Quality Ratios

(In thousands)

(Unaudited)

 

     December 31,     December 31,  
     2013     2012  

NONPERFORMING ASSETS

    

Non-accrual loans

    

Real estate secured loans:

    

Permanent loans:

    

Multi-family residential

   $ —        $ —     

Residential 1-4 family

     636        1,140   

Owner-occupied commercial

     1,685        3,805   

Nonowner-occupied commercial

     136        —     
  

 

 

   

 

 

 

Total permanent real estate loans

     2,457        4,945   

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   
  

 

 

   

 

 

 

Total construction real estate loans

     —          101   
  

 

 

   

 

 

 

Total real estate loans

     2,457        5,046   

Commercial loans

     2,886        4,315   
  

 

 

   

 

 

 

Total nonaccrual loans

     5,343        9,361   

90-days past due and accruing interest

     —          —     

Total nonperforming loans

     5,343        9,361   
  

 

 

   

 

 

 

Nonperforming loans guaranteed by government

     (735     (905

Net nonperforming loans

     4,608        8,456   
  

 

 

   

 

 

 

Other real estate owned

     16,355        17,972   
  

 

 

   

 

 

 

Total nonperforming assets, net of guaranteed loans

   $ 20,963      $ 26,428   
  

 

 

   

 

 

 

ASSET QUALITY RATIOS

    

Allowance for loan losses as a percentage of total loans outstanding

     1.60     1.88

Allowance for loan losses as a percentage of total nonperforming loans, net of government guarantees

     345.42     193.29

Net loan charge offs (recoveries) as a percentage of average loans, annualized

     0.07     0.06

Net nonperforming loans as a percentage of total loans

     0.46     0.97

Nonperforming assets as a percentage of total assets

     1.45     1.92

Consolidated classified asset ratio(1)

     29.02     31.18

Past due as a percentage of total loans (2)

     0.23     0.30

 

(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 December 31, 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

   $ —         $ —         $ —         $ —         $ —         $ 46,217       $ 46,217   

Residential 1-4 family

     137         —           —           636         773         45,665         46,438   

Owner-occupied commercial

     488         —           —           1,685         2,173         247,138         249,311   

Nonowner-occupied commercial

     1,188         —           —           136         1,324         157,462         158,786   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total real estate loans

     1,813         —           —           2,457         4,270         496,482         500,752   

Construction

                    

Multi-family residential

     —           —           —           —           —           23,419         23,419   

Residential 1-4 family

     —           —           —           —           —           26,512         26,512   

Commercial real estate

     —           —           —           —           —           30,516         30,516   

Commercial bare land and acquisition & development

     —           —           —           —           —           11,473         11,473   

Residential bare land and acquisition & development

     —           —           —           —           —           6,990         6,990   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total construction loans

     —           —           —           —           —           98,910         98,910   

Commercial and other

     436         —           —           2,886         3,322         387,907         391,229   

Consumer

     5         1         —           —           6         3,872         3,878   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 2,254       $ 1       $ —         $ 5,343       $ 7,598       $ 987,171       $ 994,769   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

PACIFIC CONTINENTAL CORPORATION

Aged Analysis of Loans Receivable (Unaudited)

(In thousands)

As of December 31, 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

   $ —         $ —         $ —         $ —         $ —         $ 45,212       $ 45,212   

Residential 1-4 family

     351         318         —           1,140         1,809         49,628         51,437   

Owner-occupied commercial

     —           —           —           3,805         3,805         215,471         219,276   

Nonowner-occupied commercial

     1,404         —           —           —           1,404         143,911         145,315   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total real estate loans

     1,755         318         —           4,945         7,018         454,222         461,240   

Construction

                    

Multi-family residential

     —           —           —           —           —           17,022         17,022   

Residential 1-4 family

     234         —           —           —           234         20,156         20,390   

Commercial real estate

     —           —           —           —           —           23,235         23,235   

Commercial bare land and acquisition & development

     —           —           —           —           —           10,668         10,668   

Residential bare land and acquisition & development

     —           —           —           101         101         8,304         8,405   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total construction loans

     234         —           —           101         335         79,385         79,720   

Commercial and other

     264         —           —           4,315         4,579         322,137         326,716   

Consumer

     8         —           —           —           8         3,573         3,581   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 2,261       $ 318       $ —         $ 9,361       $ 11,940       $ 859,317       $ 871,257   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 


PACIFIC CONTINENTAL CORPORATION

Credit Quality Indicators (Unaudited)

(In thousands)

As of December 31, 2013

 

     Loan Grade         
     Pass      Special Mention      Substandard      Doubtful      Total  

Real estate loans

              

Multi-family residential

   $ 44,677       $ —         $ 1,540       $ —         $ 46,217   

Residential 1-4 family

     37,831         —           8,607         —           46,438   

Owner-occupied commercial

     239,539         4,278         5,494         —           249,311   

Nonowner-occupied commercial

     153,055         —           5,731         —           158,786   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total real estate loans

     475,102         4,278         21,372         —           500,752   

Construction

              

Multi-family residential

     23,419         —           —           —           23,419   

Residential 1-4 family

     26,145         —           367         —           26,512   

Commercial real estate

     28,978         —           1,538         —           30,516   

Commercial bare land and acquisition & development

     11,223         —           250         —           11,473   

Residential bare land and acquisition & development

     4,346         —           2,644         —           6,990   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total construction loans

     94,111         —           4,799         —           98,910   

Commercial and other

     378,828         —           12,401         —           391,229   

Consumer

     3,856         —           22         —           3,878   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 951,897       $ 4,278       $ 38,594       $ —         $ 994,769   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

PACIFIC CONTINENTAL CORPORATION

Credit Quality Indicators (Unaudited)

(In thousands)

As of December 31, 2012

 

     Loan Grade         
     Pass      Special Mention      Substandard      Doubtful      Total  

Real estate loans

              

Multi-family residential

   $ 43,883       $ —         $ 1,329       $ —         $ 45,212   

Residential 1-4 family

     43,458         —           7,979         —           51,437   

Owner-occupied commercial

     208,713         —           10,563         —           219,276   

Nonowner-occupied commercial

     141,762         —           3,553         —           145,315   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total real estate loans

     437,816         —           23,424         —           461,240   

Construction

              

Multi-family residential

     17,022         —           —           —           17,022   

Residential 1-4 family

     20,278         —           112         —           20,390   

Commercial real estate

     21,646         —           1,589         —           23,235   

Commercial bare land and acquisition & development

     10,668         —           —           —           10,668   

Residential bare land and acquisition & development

     5,449         —           2,956         —           8,405   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total construction loans

     75,063         —           4,657         —           79,720   

Commercial and other

     317,250         —           9,466         —           326,716   

Consumer

     3,544         —           37         —           3,581   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 833,673       $ —         $ 37,584       $ —         $ 871,257