Pacific Continental Corporation Reports Second Quarter 2013 Results

Loan Growth and Successful Integration of Acquisition Drive Increased Profitability

17 Jul, 2013, 16:30 ET from Pacific Continental Corporation

EUGENE, Ore., July 17, 2013 /PRNewswire/ -- Pacific Continental Corporation (Nasdaq: PCBK), the holding company of Pacific Continental Bank, today reported financial results for the second quarter 2013.

Recent highlights:

  • Net income $3.7 million or $0.21 per diluted share.
  • Organic loan growth continued for sixth consecutive quarter.
  • Declared third quarter 2013 quarterly cash dividend of $0.09 per share and special cash dividend of $0.12 per share.   
  • Total risk-based capital ratio of 16.56%, significantly above the 10.00% minimum for "well-capitalized" designation.
  • Successfully converted Century Bank core systems.
  • Recognized by the U.S. Small Business Administration (SBA) Portland District Office as a Lending All-Star.
  • Recognized by Seattle Business magazine as one of Washington's 100 Best Companies to Work for in 2013 in "Companies Headquartered Outside Washington" category.

Net income Net income for second quarter 2013 was $3.7 million or $0.21 per diluted share compared to net income of $3.1 million or $0.17 per diluted share in second quarter 2012. Return on average assets, average book equity, and average tangible equity were 1.04%, 8.19%, and 9.42%, respectively, in second quarter 2013, compared to 0.97%, 6.94%, and 7.92% for the same quarter last year.

"We are pleased with the successful integration of our recent acquisition and can report a high level of client retention following conversion of systems," said Hal Brown, chief executive officer. "We also enjoyed our sixth consecutive quarter of organic loan growth, and we believe that our future performance outlook supports the board's decision to reward our shareholders by once again declaring a special cash dividend," added Brown.

Loan activity continues Outstanding gross loans at June 30, 2013, were $960.4 million, up $9.6 million over the prior quarter end and up $89.2 million from year-end 2012. Excluding loans acquired in the Century Bank transaction, organic loan growth for the first six months of 2013 was $35.6 million and represents an annualized growth rate of 8.20%.  Loan growth for the second quarter was primarily centered in permanent real estate lending and residential construction.  The Bank continued to expand its lending to health care professionals; at June 30, 2013, loans to dental practitioners totaled $290.5 million representing 30.25% of the total loan portfolio.  Outstanding loans to dental professionals grew 7.30% during the first six months of 2013 and 24.69% over June 30, 2012.  National dental lending at June 30, 2013, totaled $102.3 million, up $12.1 million during the second quarter and up $41.8 million over June 30, 2012.

"We've now seen loan growth for the sixth consecutive quarter which reflects the good work of our bankers as well as the improving economic conditions in the Pacific Northwest," said Roger Busse, president and chief operating officer. "Both our local and national pipelines are strong, suggesting organic loan growth should  continue throughout 2013," added Busse.

Capital levels The Company's capital ratios continue to be well above the minimum FDIC "well-capitalized" designated levels. At June 30, 2013, the Company's Tier 1 leverage ratio, Tier 1 risk-based capital ratio, and Total risk-based capital ratios were 11.58%, 15.30% and 16.56%, respectively, as compared to 12.70%, 17.73% and 18.99% at June 30, 2012, reflecting incrementally improved capital leverage. The FDIC's minimum "well-capitalized" ratios are 5.00%, 6.00% and 10.00%, respectively.

In February 2013, the Company's board of directors authorized a stock repurchase plan. The plan is authorized to repurchase up to 892,000 shares or five percent of the Company's outstanding shares. The plan commenced on April 1, 2013, with the purchases to occur over a 12-month period. No shares were repurchased during the first or second quarter of 2013.

Classified assets, provisioning and loan statistics At June 30, 2013, classified assets totaled $60.6 million and represented 33.82% of regulatory capital, compared to $56.1 million and 31.18% of regulatory capital at December 31, 2012.  The increase in classified assets was primarily due to classified loans acquired through the Century Bank acquisition, net of the fair value credit adjustment, totaling approximately $5.8 million.

Nonperforming assets, a subcategory of classified assets, totaled $24.2 million at June 30, 2013, or 1.69% of total assets, a decrease from December 31, 2012, and June 30, 2012, ratios of 1.92% and 2.30%, respectively. Nonperforming assets were comprised of $6.4 million of nonperforming loans, net of government guarantees, and $17.8 million in other real estate owned.

Loans past-due 30-89 days were 0.11% of total loans at June 30, 2013, compared to 0.30% at December 31, 2012. This is the sixteenth consecutive quarter in which this ratio was near or below one percent.

The dental loan portfolio continued to perform well with no loans past-due in the 30-89 days category. Classified dental loans totaled 2.21% of total dental loans with net charge offs of $397 thousand for the first half of 2013. National dental lending statistics continued to be very strong with no loans past due, and 0.89% of the national dental lending portfolio considered classified. 

"Our expectation is that we will see further reductions in the level of classified and problem assets throughout 2013 based on current pending resolutions," said Casey Hogan, executive vice president and chief credit officer.

The Company made no provision for loan losses during the second quarter 2013, compared to $250 thousand in provision for first quarter 2013 and a provision of $600 thousand in second quarter 2012.  During the second quarter 2013, net loan charge offs totaled only $9 thousand.  For the first six months of 2013, net loan charge offs totaled $293 thousand, compared to $666 thousand for the same period last year.

The allowance for loan losses as a percentage of outstanding loans at June 30, 2013, was 1.70% compared to 1.88% at December 31, 2012, and 1.96% at June 30, 2012. The decrease was partially attributable to the Century Bank acquired loans included at their fair value, net of credit risk adjustments. The allowance for loan losses as a percentage of total nonperforming loans, net of government guarantees, has improved to 254.62% at June 30, 2013, from the 67.70% reported one year ago, reflecting both a reduction in nonperforming loans and an overall general improvement in the quality of the loan portfolio.

Core deposit growth slows Period-end Company-defined core deposits at June 30, 2013, were $958.7 million, relatively unchanged from the prior quarter end. This is a typical seasonal pattern where outstanding core deposits are relatively flat or decline during the first six months of the year, with growth historically occurring during the last half of the year. Average core deposits, a calculation that eliminates daily volatility of outstanding balances, for the second quarter 2013 were $966.8 million, up $23.5 million over the prior quarter end. A portion of the increase was attributable to the acquisition of Century Bank core deposits. At period-end June 30, 2013, noninterest-bearing demand deposits totaled $341.2 million and represented 35.59% of core deposits.

Net interest margin The second quarter 2013 net interest margin, on a tax equivalent basis, was 4.20%, representing a linked-quarter decline of 9 basis points from first quarter 2013, and a decline of 11 basis points from second quarter 2012. The decline in the linked-quarter net interest margin was attributable to a 10 basis point reduction on earning assets, while the cost of interest-bearing funds was unchanged.  The accretion of the Century Bank loan fair value market adjustment during the second quarter 2013 positively impacted the net interest margin by 11 basis points in second quarter 2013 compared to 7 basis points in first quarter 2013.

Noninterest income and expense Second quarter noninterest income was $1.5 million, up $42 thousand over second quarter 2012. On a linked-quarter basis, second quarter 2013 noninterest income was up $255 thousand over first quarter 2013.  The linked-quarter increase in noninterest income was due to seasonal improvement in merchant bankcard revenues, increased service charges attributable to the accounts acquired in the Century Bank acquisition and approximately $100 thousand of rental income received on other real estate owned. 

Noninterest expense in second quarter 2013 was up $743 thousand over second quarter 2012, with increases in compensation, premises, data processing and business development, partially offset by a reduction in FDIC assessments and other real estate expense.  When first quarter merger-related expenses of $1.2 million are excluded from first quarter 2013, linked-quarter noninterest expense was relatively unchanged at $9.5 million

The second quarter efficiency ratio was 63.17% compared to 62.64% for second quarter 2012. For the first six months of 2013, excluding merger expenses, the efficiency ratio was 64.07% compared to 62.32% for the same period in 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 second quarter 2013 on Thursday, July 18, 2013, at 11:00 a.m. Pacific / 2:00 p.m. Eastern. To listen to the conference call, interested parties should call 866-292-1418. Following the formal remarks, a question and answer session will be open to all interested parties. The webcast will be available via Pacific Continental's website www.therightbank.com. To listen to the live audio webcast, click on the webcast presentation link on the Company's home page a few minutes before the presentation is scheduled to begin. An audio webcast replay is typically available within twenty-four hours following the live webcast and will be archived for one year on the Pacific Continental website. Any questions regarding the conference call presentation or webcast should be directed to Shannon Coffin, executive administrative assistant, at 541-686-8685.

About Pacific Continental Bank Pacific Continental Bank, the operating subsidiary of Pacific Continental Corporation, delivers highly personalized services through fourteen banking offices in Oregon and Washington. The Bank also operates a loan production office in Tacoma, Washington. Pacific Continental, with $1.4 billion in assets, has established one of the most unique and attractive metropolitan branch networks in the Pacific Northwest with offices in three of the region's largest markets including Seattle, Portland and Eugene. Pacific Continental targets the banking needs of community-based businesses, health care professionals, professional service providers and nonprofit organizations.

Since its founding in 1972, Pacific Continental Bank has been honored with numerous awards and recognitions from highly regarded third-party organizations including The Seattle Times, the Portland Business Journal, the Seattle Business magazine and Oregon Business magazine. A complete list of the company's awards and recognitions – as well as supplementary information about Pacific Continental Bank – can be found online at www.therightbank.com. Pacific Continental Corporation's shares are listed on the Nasdaq Global Select Market under the symbol "PCBK" and are a component of the Russell 2000 Index.

Forward-Looking Statement Safe Harbor This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as "anticipates," "targets," "expects," "estimates," "intends," "plans," "goals," "believes" "anticipates" and other similar expressions or future or conditional verbs such as "will," "should," "would" and "could." The forward-looking statements made represent Pacific Continental's current estimates, projections, expectations, plans or forecasts of its future results and revenues, including but not limited to statements about performance, loan  growth, capital strategy, future classified and problem asset migration and credit quality trends and economic conditions generally. These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumptions that are difficult to predict and are often beyond Pacific Continental's control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements. You should not place undue reliance on any forward-looking statement and should consider all of the following uncertainties and risks, as well as those more fully discussed under "Risk Factors", "Business", and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Pacific Continental's most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, and in any of Pacific Continental's subsequent SEC filings, including the high concentration of loans of the Company's banking subsidiary in commercial and residential real estate lending and our significant concentration in loans to dental professionals; adverse economic trends in the United States and the markets we serve affecting the Bank's borrower base; a continued decline in the housing and real estate market; a continued increase in unemployment or sustained high levels of unemployment; continued erosion or sustained low levels of consumer confidence; changes in the Federal Reserve's monetary policies and the regulatory environment and increases in associated costs, particularly ongoing compliance expenses and resource allocation needs; vendor quality and efficiency; the Company's ability to control risks associated with rapidly changing technology both from an internal perspective as well as for external providers operational systems or infrastructure failures; increased competition; fluctuating interest rates; a tightening of available credit; 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

Six months ended

June 30, 

June 30, 

June 30, 

June 30, 

2013

2012

2013

2012

Interest and dividend income

Loans

$      13,066

$      11,997

$      25,765

$      24,118

Taxable securities

1,237

1,596

2,674

3,395

Tax-exempt securities

474

397

941

742

Federal funds sold & interest-bearing deposits with banks

2

1

5

2

14,779

13,991

29,385

28,257

Interest expense

Deposits

900

1,018

1,785

2,157

Federal Home Loan Bank & Federal Reserve borrowings

305

426

613

895

Junior subordinated debentures

55

38

89

78

Federal funds purchased

3

10

7

16

1,263

1,492

2,494

3,146

  Net interest income

13,516

12,499

26,891

25,111

Provision for loan losses

-

600

250

1,900

  Net interest income after provision for loan losses

13,516

11,899

26,641

23,211

Noninterest income

Service charges on deposit accounts

489

457

949

897

Other fee income, principally bankcard

412

410

784

797

Mortgage banking income

-

-

-

72

Bank-owned life insurance income

130

148

256

275

Loss on sale of investment securities

-

-

(8)

-

  Impairment losses on investment securities (OTTI)

-

-

(16)

-

Other noninterest income

504

478

850

904

1,535

1,493

2,815

2,945

Noninterest expense

Salaries and employee benefits

5,324

5,088

10,803

10,002

Premises and equipment

937

852

1,827

1,715

Data processing

672

512

1,295

1,005

Legal and professional fees

581

397

1,039

943

Business development

528

347

1,024

770

FDIC insurance assessment

221

290

443

529

Bankcard processing

141

152

268

293

Other real estate expense

153

238

577

616

Merger related expenses(1)

-

-

1,246

-

Other noninterest expense

951

889

1,756

1,611

9,508

8,765

20,278

17,484

Income before provision for income taxes

5,543

4,627

9,178

8,672

Provision for income taxes

1,819

1,510

3,004

2,840

  Net income

$        3,724

$        3,117

$        6,174

$        5,832

Earnings per share:

Basic

$          0.21

$          0.17

$          0.35

$          0.32

Diluted

$          0.21

$          0.17

$          0.34

$          0.32

Weighted average shares outstanding:

Basic

17,872,378

18,147,729

17,854,094

18,262,658

Common stock equivalents

attributable to stock-based awards

187,703

208,345

187,689

206,513

Diluted

18,060,081

18,356,074

18,041,783

18,469,171

PERFORMANCE RATIOS

Return on average assets 

1.04%

0.97%

0.87%

0.91%

Return on average equity (book) 

8.19%

6.94%

6.81%

6.51%

Return on average equity (tangible) (2)

9.42%

7.92%

7.82%

7.42%

Net interest margin (3)

4.20%

4.31%

4.24%

4.35%

Efficiency ratio (4)

63.17%

62.64%

68.26%

62.32%

(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)

June 30, 

December 31,

June 30, 

2013

2012

2012

ASSETS

Cash and due from banks

$      24,193

$      28,607

$      19,768

Interest-bearing deposits with banks

69

94

60

  Total cash and cash equivalents

24,262

28,701

19,828

Securities available-for-sale

357,394

389,885

387,378

Loans, less allowance for loan losses and net deferred fees

943,255

854,071

809,870

Interest receivable

5,101

4,520

4,761

Federal Home Loan Bank stock

10,620

10,462

10,652

Property and equipment, net of accumulated depreciation

19,310

19,238

19,760

Goodwill and intangible assets

23,740

22,031

22,123

Deferred tax asset

9,845

6,230

6,323

Taxes receivable

130

-

1,671

Other real estate owned

17,823

17,972

6,966

Prepaid FDIC assessment

-

1,746

2,265

Bank-owned life insurance

15,877

15,621

15,313

Other assets

3,717

3,010

3,174

  Total assets

$ 1,431,074

$ 1,373,487

$ 1,310,084

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits

 Noninterest-bearing demand

$    341,218

$    329,825

$    288,061

 Savings and interest-bearing checking

545,749

554,693

504,561

 Time $100,000 and over

82,418

73,610

76,679

 Other time

101,243

88,026

80,649

  Total deposits

1,070,628

1,046,154

949,950

Federal funds and overnight funds purchased

7,660

11,570

8,580

Federal Home Loan Bank borrowings

162,000

118,000

158,000

Junior subordinated debentures

8,248

8,248

8,248

Accrued interest and other payables

3,609

6,134

4,717

  Total liabilities

1,252,145

1,190,106

1,129,495

Shareholders' equity

Common stock: 50,000,000 shares authorized.  Shares issued

and outstanding:  17,887,945 at June 30, 2013, 17,835,088

at December 31, 2012 and 18,062,633 at June 30, 2012

133,331

133,017

134,665

Retained earnings

45,349

44,533

41,296

Accumulated other comprehensive income

249

5,831

4,628

178,929

183,381

180,589

  Total liabilities and shareholders' equity

$ 1,431,074

$ 1,373,487

$ 1,310,084

CAPITAL RATIOS

Total capital (to risk weighted assets)

16.56%

18.15%

18.99%

Tier I capital (to risk weighted assets)

15.30%

16.90%

17.73%

Tier I capital (to leverage assets)

11.58%

12.33%

12.70%

Tangible common equity (to tangible assets)(1)

11.03%

11.94%

12.30%

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

14.58%

16.67%

17.55%

OTHER FINANCIAL DATA

Shares outstanding at end of period

17,887,945

17,835,088

18,062,633

Tangible shareholders' equity(1)

$    155,189

$    161,350

$    158,466

Book value per share

$        10.00

$        10.28

$        10.00

Tangible book value per share

$          8.68

$          9.05

$          8.77

(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)

June 30, 

December 31,

June 30, 

2013

2012

2012

LOANS BY TYPE

Real estate secured loans:

Permanent loans:

 Multi-family residential

$   45,142

$   45,212

$   46,539

 Residential 1-4 family

51,312

51,437

58,071

 Owner-occupied commercial

238,332

219,276

220,814

 Nonowner-occupied commercial

172,159

145,315

136,612

  Total permanent real estate loans

506,945

461,240

462,036

Construction loans:

 Multi-family residential

23,925

17,022

7,503

 Residential 1-4 family

26,277

20,390

17,158

 Commercial real estate

20,317

23,235

13,095

 Commercial bare land and acquisition & development

10,664

10,668

18,522

 Residential bare land and acquisition & development

8,087

8,405

9,634

  Total construction real estate loans

89,270

79,720

65,912

    Total real estate loans

596,215

540,960

527,948

Commercial loans

359,397

325,604

293,282

Consumer loans

3,922

3,581

4,095

Other loans

899

1,112

1,463

 Gross loans

960,433

871,257

826,788

Deferred loan origination fees

(875)

(841)

(743)

959,558

870,416

826,045

Allowance for loan losses

(16,303)

(16,345)

(16,175)

$ 943,255

$ 854,071

$ 809,870

Three months ended

Six months ended

June 30, 

June 30,

June 30,

June 30,

ALLOWANCE FOR LOAN LOSSES

2013

2012

2013

2012

  Balance at beginning of period

$   16,312

$   15,829

$   16,345

$ 14,941

   Provision for loan losses

-

600

250

1,900

   Loan charge offs

(230)

(1,147)

(828)

(1,669)

   Loan recoveries

221

893

536

1,003

     Net charge offs

(9)

(254)

(292)

(666)

  Balance at end of period

$   16,303

$   16,175

$   16,303

$ 16,175

 

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, 

2013

2012

2013

2012

BALANCE SHEET AVERAGES

  Loans(1)

$    955,717

$    825,689

$    936,699

$    825,977

  Allowance for loan losses

(16,465)

(16,428)

(16,426)

(15,928)

    Loans, net of allowance

939,252

809,261

920,273

810,049

  Securities and short-term deposits

376,031

377,631

381,641

369,285

   Earning assets

1,315,283

1,186,892

1,301,914

1,179,334

  Noninterest-earning assets

123,220

111,122

123,405

111,987

        Assets

$ 1,438,503

$ 1,298,014

$ 1,425,319

$ 1,291,321

  Interest-bearing core deposits(2)

$    638,195

$    570,314

$    637,173

$    578,234

  Noninterest-bearing core deposits(2)

328,627

288,405

317,961

286,174

    Core deposits(2)

966,822

858,719

955,134

864,408

  Noncore interest-bearing deposits

108,804

99,770

109,865

89,275

    Deposits

1,075,626

958,489

1,064,999

953,683

  Borrowings

177,319

154,903

173,833

153,366

  Other noninterest-bearing liabilities

3,174

4,108

3,790

4,073

       Liabilities

1,256,119

1,117,500

1,242,622

1,111,122

  Shareholders' equity (book)

182,384

180,514

182,697

180,199

       Liabilities and equity

$ 1,438,503

$ 1,298,014

$ 1,425,319

$ 1,291,321

  Shareholders' equity (tangible)(3)

$    158,630

$    158,361

$    159,251

$    158,018

SELECTED MARKET DATA

  Eugene market gross loans, period-end

$    325,373

$    240,366

  Portland market gross loans, period-end

391,822

366,713

  Seattle market gross loans, period-end

140,137

159,134

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

103,101

60,575

    Total gross loans, period-end

$    960,433

$    826,788

  Eugene market core deposits, period-end(2)

$    578,829

$    498,987

  Portland market core deposits, period-end(2)

240,582

224,586

  Seattle market core deposits, period-end(2)

139,330

128,208

    Total core deposits, period-end(2)

958,741

851,781

  Other deposits, period-end

111,887

98,169

      Total

$ 1,070,628

$    949,950

  Eugene market core deposits, average(2)

$    589,647

$    505,175

  Portland market core deposits, average(2)

242,668

228,058

  Seattle market core deposits, average(2)

134,508

125,486

    Total core deposits, average(2)

966,823

858,719

  Other deposits, average

108,803

99,770

      Total

$ 1,075,626

$    958,489

NET INTEREST MARGIN RECONCILIATION

  Yield on average loans

5.58%

5.96%

5.65%

5.99%

  Yield on average securities(5)

2.10%

2.35%

2.18%

2.47%

    Yield on average earning assets(5)

4.58%

4.81%

4.63%

4.89%

  Rate on average interest-bearing core deposits

0.35%

0.49%

0.36%

0.51%

  Rate on average interest-bearing non-core deposits

1.25%

1.30%

1.20%

1.53%

    Rate on average interest-bearing deposits

0.48%

0.61%

0.30%

0.65%

  Rate on average borrowings

0.82%

1.23%

0.82%

1.30%

    Cost of interest-bearing funds

0.55%

0.73%

0.55%

0.77%

    Interest rate spread(5)

4.04%

4.09%

4.08%

4.12%

       Net interest margin(5)

4.20%

4.31%

4.24%

4.35%

(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 Healthcare loans include loan 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 $255 thousand, and $214 thousand for the six months ended June 30, 2013, and June 30, 2012, respectively.

 

PACIFIC CONTINENTAL CORPORATION

Nonperforming Assets and Asset Quality Ratios

(In thousands)

(Unaudited)

June 30, 

December 31,

June 30,

2013

2012

2012

NONPERFORMING ASSETS

Non-accrual loans

Real estate secured loans:

Permanent loans:

Multi-family residential

$         -

$           -

$         -

Residential 1-4 family

1,243

1,140

3,435

Owner-occupied commercial

3,097

3,805

3,952

Nonowner-occupied commercial

-

-

-

Total permanent real estate loans

4,340

4,945

7,387

Construction loans:

Multi-family residential

-

-

-

Residential 1-4 family

-

-

2,637

Commercial real estate

-

-

933

Commercial bare land and acquisition & development

-

-

8,491

Residential bare land and acquisition & development

101

101

1,157

Total construction real estate loans

101

101

13,218

Total real estate loans

4,441

5,046

20,605

Commercial loans

2,890

4,315

3,089

Total nonaccrual loans

7,331

9,361

23,694

90-days past due and accruing interest

-

-

-

Total nonperforming loans

7,331

9,361

23,694

Nonperforming loans guaranteed by government

(928)

(905)

(486)

Net nonperforming loans

6,403

8,456

23,208

Other real estate owned

17,823

17,972

6,966

Total nonperforming assets, net of guaranteed loans

$ 24,226

$ 26,428

$ 30,174

ASSET QUALITY RATIOS

Allowance for loan losses as a percentage of total loans outstanding

1.70%

1.88%

1.96%

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

254.62%

193.29%

69.70%

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

0.06%

0.06%

0.16%

Net nonperforming loans as a percentage of total loans

0.67%

0.97%

2.81%

Nonperforming assets as a percentage of total assets

1.69%

1.92%

2.30%

Consolidated classified asset ratio(1)

33.82%

31.18%

33.98%

Past due as a percentage of total loans(2)

0.11%

0.30%

1.04%

(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 June 30, 2013

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

Multi-family residential

$       -

$       -

$   -

$         -

$         -

$   45,142

$   45,142

Residential 1-4 family

198

-

-

1,243

1,441

49,871

51,312

Owner-occupied commercial

151

-

-

3,097

3,248

235,084

238,332

Nonowner-occupied commercial

558

-

-

-

558

171,601

172,159

Total real estate loans

907

-

-

4,340

5,247

501,698

506,945

Construction

  Multi-family residential

-

-

-

-

-

23,925

23,925

  Residential 1-4 family

-

-

-

-

-

26,277

26,277

  Commercial real estate

38

-

-

-

38

20,279

20,317

  Commercial bare land and acquisition & development

-

-

-

-

-

10,664

10,664

  Residential bare land and acquisition & development

-

-

-

101

101

7,986

8,087

  Total  construction loans

38

-

-

101

139

89,131

89,270

Commercial and other

74

-

-

2,890

2,964

357,332

360,296

Consumer

2

-

-

-

2

3,920

3,922

Total

$ 1,021

$       -

$   -

$   7,331

$   8,352

$ 952,081

$ 960,433

PACIFIC CONTINENTAL CORPORATION

Aged Analysis of Loans Receivable (Unaudited)

(In thousands)

As of  June 30, 2012

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

Receivables

Real estate loans

Multi-family residential

$       -

$       -

$   -

$         -

$         -

$   46,539

$   46,539

Residential 1-4 family

557

5,652

-

3,435

9,644

48,427

58,071

Owner-occupied commercial

186

341

-

3,952

4,479

216,335

220,814

Nonowner-occupied commercial

94

-

-

-

94

136,518

136,612

Total real estate loans

837

5,993

-

7,387

14,217

447,819

462,036

Construction

    Multi-family residential

-

-

-

-

-

7,503

7,503

    Residential 1-4 family

-

-

-

2,637

2,637

14,521

17,158

    Commercial real estate

1,611

-

-

933

2,544

10,551

13,095

    Commercial bare land and acquisition & development

-

-

-

8,491

8,491

10,031

18,522

    Residential bare land and acquisition & development

-

-

-

1,157

1,157

8,477

9,634

Total construction loans

1,611

-

-

13,218

14,829

51,083

65,912

Commercial and other

178

-

-

3,089

3,267

291,478

294,745

Consumer

9

3

-

-

12

4,083

4,095

Total

$ 2,635

$ 5,996

$   -

$ 23,694

$ 32,325

$ 794,463

$ 826,788

 

PACIFIC CONTINENTAL CORPORATION

Credit Quality Indicators (Unaudited)

(In thousands)

As of June 30, 2013

Loan Grade

Pass

Special Mention

Substandard

Doubtful

Total

Real estate loans

Multi-family residential

$   43,827

$   -

$   1,315

$      -

$   45,142

Residential 1-4 family

41,817

-

9,495

-

51,312

Owner-occupied commercial

227,870

-

10,462

-

238,332

Nonowner-occupied commercial

166,940

-

5,219

-

172,159

Total real estate loans

480,454

-

26,491

-

506,945

Construction

  Multi-family residential

23,925

-

-

-

23,925

  Residential 1-4 family

26,171

-

106

-

26,277

  Commercial real estate

18,741

-

1,576

-

20,317

  Commercial bare land and acquisition & development

10,472

-

192

-

10,664

  Residential bare land and acquisition & development

4,780

-

3,307

-

8,087

  Total  construction loans

84,089

-

5,181

-

89,270

Commercial and other

349,598

-

10,698

-

360,296

Consumer

3,888

-

34

-

3,922

Total

$ 918,029

$   -

$ 42,404

$      -

$ 960,433

PACIFIC CONTINENTAL CORPORATION

Credit Quality Indicators (Unaudited)

(In thousands)

As of June 30, 2012

Loan Grade

Pass

Special Mention

Substandard

Doubtful

Total

Real estate loans

Multi-family residential

$   45,202

$   -

$   1,337

$      -

46,539

Residential 1-4 family

48,311

-

9,760

-

58,071

Owner-occupied commercial

210,833

-

9,981

-

220,814

Nonowner-occupied commercial

133,016

-

3,596

-

136,612

Total real estate loans

437,362

-

24,674

-

462,036

Construction

  Multi-family residential

7,503

-

-

-

7,503

  Residential 1-4 family

14,343

-

2,815

-

17,158

  Commercial real estate

10,551

-

2,544

-

13,095

  Commercial bare land and acquisition & development

10,031

-

8,491

-

18,522

  Residential bare land and acquisition & development

5,417

-

4,217

-

9,634

  Total  construction loans

47,845

-

18,067

-

65,912

Commercial and other

284,667

-

10,003

75

294,745

Consumer

4,023

-

72

-

4,095

Total

$ 773,897

$   -

$ 52,816

$     75

$ 826,788

  

SOURCE Pacific Continental Corporation



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