Pacific Continental Corporation Reports First Quarter 2013 Results
Loan Growth and Successful Acquisition Drive First Quarter 2013 Profitability
EUGENE, Ore., April 24, 2013 /PRNewswire/ -- Pacific Continental Corporation (Nasdaq: PCBK), the holding company of Pacific Continental Bank, today reported financial results for the first quarter 2013.
Recent highlights:
- Completed acquisition of Century Bank and successfully converted systems following quarter end.
- Net income of $2.5 million, which includes $1.2 million of pre-tax merger related expense.
- Organic loan growth continued for fifth consecutive quarter.
- Second quarter 2013 quarterly cash dividend increased to $0.09 per share and special cash dividend of $0.05 per share declared.
- Announced reinstatement of stock repurchase plan.
- Total risk-based capital ratio of 16.62%, significantly above the 10.0% minimum for "well-capitalized" designation.
- Recognized by Oregon Business magazine as one of the 100 Best Companies to Work for in Oregon, marking it the fourteenth consecutive year Pacific Continental was named as a 100 Best company.
Century Bank acquisition
The Century Bank acquisition successfully closed on February 1, 2013. A summary of the assets and liabilities acquired through the transaction is provided in the financial tables accompanying this press release. System integration was successfully completed during the weekend of April 6, 2013.
Net income
Net income for first quarter 2013 was $2.5 million or $0.14 per diluted share compared to net income of $2.7 million or $0.15 per diluted share in first quarter 2012. Merger expenses related to the acquisition of Century Bank totaled $1.2 million in the first quarter and reduced net income by approximately $835 thousand or $0.05 per diluted share.
"Our first quarter results and completed acquisition of Century Bank demonstrate continued progress towards our strategic initiatives," said Hal Brown, chief executive officer. "In addition to the Century Bank transaction, we enjoyed our fifth consecutive quarter of organic loan growth which resulted in margin expansion. These results and our future performance outlook support the board's decision to once again increase the quarterly dividend," added Brown.
Loan activity continues
Outstanding gross loans at March 31, 2013, were $950.8 million, up $79.5 million from year-end 2012. Of the $63.3 loans acquired from Century Bank on February 1, 2013, $62.6 million was outstanding at quarter end. The remaining $16.9 million of loan growth was attributable to organic growth experienced during the quarter and represents an annualized growth rate of 7.8%. The bank continues to expand its lending to health care professionals. At March 31, 2013, loans to dental practitioners totaled $280.0 million and represented 29.4% of the total loan portfolio, a growth rate of 3.4% during the first quarter and 25.6% over March 31, 2012. Out-of-market dental loans at March 31, 2013, were $90.2 million, up $11.3 million during the quarter and up $40.2 million over March 31, 2012.
"Our business model and focused strategy continue to achieve excellent results," said Roger Busse, president and chief operating officer. "We are increasingly optimistic based on our strengthening pipelines in all markets that organic growth will continue throughout 2013," added Busse.
Capital levels
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 the next 12 months. No shares were repurchased during the first quarter.
The Company's capital ratios continue to be well above the minimum FDIC well-capitalized designated levels. At March 31, 2013, the Company's Tier 1 leverage ratio, Tier 1 risk-based capital ratio, and Total risk-based capital ratios were 11.71%, 15.38% and 16.62%, respectively, as compared to 12.33%, 16.90% and 18.15% at December 31, 2012. 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 saw a small increase during first quarter 2013, which was primarily attributable to assets acquired in the Century Bank transaction. At March 31, 2013, classified assets totaled $58.4 million, an increase of $2.3 million from the end of the prior quarter. Classified assets acquired through the Century Bank acquisition, net of the fair value adjustment, totaled $5.8 million at quarter end.
Nonperforming assets, a subcategory of classified assets, totaled $24.7 million at March 31, 2013, or 1.71% of total assets, a decrease from December 31, 2012, and March 31, 2012, ratios of 1.92% and 2.72%, respectively. Nonperforming assets were comprised of $7.0 million of nonperforming loans, net of government guarantees, and $17.7 million in other real estate owned.
Loans past-due 30-89 days were 0.20% of total loans at March 31, 2013, compared to 0.30% at December 31, 2012. This is the fifteenth consecutive quarter in which this ratio was near or below one percent, a figure that suggests stabilization in the migration of problem loans.
"With the Century Bank acquisition and system conversion behind us, our expectation is that we will see further reductions in the level of classified and problem assets throughout 2013," said Casey Hogan, executive vice president and chief credit officer. "This improvement should allow more resources for business development and growth initiatives as the year progresses," added Hogan.
The Company's first quarter 2013 provision for loan losses totaled $250 thousand compared to $1.3 million for first quarter 2012. The lower provision for loan losses reflects improving credit quality. During the first quarter 2013, net loan charge offs totaled $283 thousand compared to $62 thousand of net recoveries in fourth quarter 2012 and $412 thousand in net loan charge offs in first quarter 2012.
The allowance for loan losses as a percentage of outstanding loans at March 31, 2013, was 1.72% compared to 1.88% at December 31, 2012, and 1.92% at March 31, 2012. The decrease was partially attributable to the Century Bank acquired loans included at their fair value, net of any credit risk adjustments.
Core deposit growth slows
Period-end Company-defined core deposits at March 31, 2013, were $960.7 million and included $64.8 million of deposits acquired in the Century Bank transaction. Organically, outstanding core deposits declined during the first quarter 2013, which is a typical seasonal pattern for the first quarter. Average core deposits for the first quarter 2013 were $943.3 million compared to $900.4 million and $870.1 million at December 31, 2012, and March 31, 2012, respectively, with the increase primarily attributable to the acquisition of Century Bank core deposits. At period-end March 31, 2013, noninterest-bearing demand deposits totaled $314.8 million and represent 32.8% of core deposits.
Net interest margin
The first quarter 2013 net interest margin averaged 4.29%, a linked-quarter increase of 18 basis points over fourth quarter 2012, and a decline of 10 basis points from first quarter 2012. The increase in the linked-quarter net interest margin was attributable to three factors: 1) accretion of the Century Bank loan fair value mark which totaled $231 thousand; 2) reduction in the amortization of premiums on mortgage-backed securities due to lower levels of refinancing activity; and 3) improvement in asset mix as average loans increased to 65 percent of total average assets. The accretion of the Century Bank loan fair value mark during the first quarter 2013 positively impacted the net interest margin by 7 basis points. Consistent with previous quarter trends, the yield on loans and the cost of funds both continued to decline on a linked-quarter basis.
Noninterest income and expense
First quarter noninterest income was $1.3 million, down $172 thousand from first quarter 2012. The decline was primarily due to a drop in revenues from the origination of residential mortgages as this line of business was closed at the end of first quarter 2012. During the first quarter 2013, the Company also booked other-than-temporary-impairment expense of $16 thousand related to its holdings of private-label mortgage-backed securities.
Noninterest expense in first quarter 2013 was up $1.8 million and $2.1 million over fourth quarter 2012 and first quarter 2012, respectively. The majority of the increase in noininterest expense on a linked-quarter and year-over year basis was due to $1.2 million of merger related expenses in the Century Bank acquisition recorded during first quarter 2013. The Company also saw an increase in personnel expenses of $566 thousand, which was due to 2012 staff additions and personnel added in the Century Bank acquisition.
The first quarter efficiency ratio was 73.5%. Excluding first quarter merger related expenses, the efficiency ratio would have been 65.0%.
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 2013 on Thursday, April 25, 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 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 $1.4 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 and deposit growth, capital strategy, future problem asset migration and credit quality trends 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.
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PACIFIC CONTINENTAL CORPORATION |
||||
|
Consolidated Income Statements |
||||
|
(In thousands, except share and per share amounts) |
||||
|
(Unaudited) |
||||
|
Three months ended |
||||
|
March 31, |
March 31, |
|||
|
2013 |
2012 |
|||
|
Interest and dividend income |
||||
|
Loans |
$ 12,699 |
$ 12,122 |
||
|
Securities |
1,904 |
2,144 |
||
|
Federal funds sold & interest-bearing deposits with banks |
3 |
1 |
||
|
14,606 |
14,267 |
|||
|
Interest expense |
||||
|
Deposits |
885 |
1,139 |
||
|
Federal Home Loan Bank & Federal Reserve borrowings |
308 |
469 |
||
|
Junior subordinated debentures |
34 |
40 |
||
|
Federal funds purchased |
4 |
6 |
||
|
1,231 |
1,654 |
|||
|
Net interest income |
13,375 |
12,613 |
||
|
Provision for loan losses |
250 |
1,300 |
||
|
Net interest income after provision for loan losses |
13,125 |
11,313 |
||
|
Noninterest income |
||||
|
Service charges on deposit accounts |
460 |
440 |
||
|
Other fee income, principally bankcard |
372 |
387 |
||
|
Loan servicing fees |
17 |
18 |
||
|
Mortgage banking income |
- |
72 |
||
|
Bank-owned life insurance income |
126 |
127 |
||
|
Loss on sale of investment securities |
(8) |
- |
||
|
Impairment losses on investment securities (OTTI) |
(16) |
- |
||
|
Other noninterest income |
329 |
408 |
||
|
1,280 |
1,452 |
|||
|
Noninterest expense |
||||
|
Salaries and employee benefits |
5,479 |
4,913 |
||
|
Premises and equipment |
890 |
863 |
||
|
Bankcard processing |
126 |
141 |
||
|
Business development |
495 |
423 |
||
|
FDIC insurance assessment |
221 |
239 |
||
|
Other real estate expense |
424 |
378 |
||
|
Merger Related Expenses(1) |
1,246 |
- |
||
|
Other noninterest expense |
1,889 |
1,762 |
||
|
10,770 |
8,719 |
|||
|
Income before provision for income taxes |
3,635 |
4,046 |
||
|
Provision for income taxes |
1,185 |
1,330 |
||
|
Net income |
$ 2,450 |
$ 2,716 |
||
|
Earnings per share: |
||||
|
Basic |
$ 0.14 |
$ 0.15 |
||
|
Diluted |
$ 0.14 |
$ 0.15 |
||
|
Weighted average shares outstanding: |
||||
|
Basic |
17,835,088 |
18,376,324 |
||
|
Common stock equivalents attributable to stock-based awards |
151,431 |
141,996 |
||
|
Diluted |
17,986,519 |
18,518,320 |
||
|
PERFORMANCE RATIOS |
||||
|
Return on average assets |
0.70% |
0.85% |
||
|
Return on average equity (book) |
5.43% |
6.07% |
||
|
Return on average equity (tangible) (2) |
6.21% |
6.93% |
||
|
Net interest margin (3) |
4.29% |
4.39% |
||
|
Efficiency ratio (4) |
73.49% |
61.99% |
||
|
(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) |
||||||
|
March 31, |
December 31, |
March 31, |
||||
|
2013 |
2012 |
2012 |
||||
|
ASSETS |
||||||
|
Cash and due from banks |
$ 25,671 |
$ 28,607 |
$ 18,187 |
|||
|
Interest-bearing deposits with banks |
390 |
94 |
207 |
|||
|
Total cash and cash equivalents |
26,061 |
28,701 |
18,394 |
|||
|
Securities available-for-sale |
379,766 |
389,885 |
366,916 |
|||
|
Loans, less allowance for loan losses and net deferred fees |
933,771 |
854,071 |
809,031 |
|||
|
Interest receivable |
5,085 |
4,520 |
4,560 |
|||
|
Federal Home Loan Bank stock |
10,718 |
10,462 |
10,652 |
|||
|
Property and equipment, net of accumulated depreciation |
19,245 |
19,238 |
19,950 |
|||
|
Goodwill and intangible assets |
23,770 |
22,031 |
22,179 |
|||
|
Deferred tax asset |
7,015 |
6,230 |
6,648 |
|||
|
Taxes receivable |
- |
- |
1,671 |
|||
|
Other real estate owned |
17,772 |
17,972 |
10,102 |
|||
|
Prepaid FDIC assessment |
1,545 |
1,746 |
2,536 |
|||
|
Bank-owned life insurance |
15,747 |
15,621 |
15,165 |
|||
|
Other assets |
3,163 |
3,010 |
1,989 |
|||
|
Total assets |
$ 1,443,658 |
$ 1,373,487 |
$ 1,289,793 |
|||
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||
|
Deposits |
||||||
|
Noninterest-bearing demand |
$ 314,798 |
$ 329,825 |
$ 281,282 |
|||
|
Savings and interest-bearing checking |
566,555 |
554,693 |
517,350 |
|||
|
Time $100,000 and over |
82,041 |
73,610 |
72,309 |
|||
|
Other time |
104,301 |
88,026 |
83,706 |
|||
|
Total deposits |
1,067,695 |
1,046,154 |
954,647 |
|||
|
Federal funds and overnight funds purchased |
4,450 |
11,570 |
- |
|||
|
Federal Home Loan Bank borrowings |
178,000 |
118,000 |
143,500 |
|||
|
Junior subordinated debentures |
8,248 |
8,248 |
8,248 |
|||
|
Accrued interest and other payables |
2,807 |
6,134 |
3,838 |
|||
|
Total liabilities |
1,261,200 |
1,190,106 |
1,110,233 |
|||
|
Shareholders' equity |
||||||
|
Common stock: 50,000,000 shares authorized. Shares issued and outstanding: 17,835,088 at March 31, 2013 and at December 31, 2012 and 18,195,415 at March 31, 2012 |
133,236 |
133,017 |
135,920 |
|||
|
Retained earnings |
44,129 |
44,533 |
39,267 |
|||
|
Accumulated other comprehensive income |
5,093 |
5,831 |
4,373 |
|||
|
182,458 |
183,381 |
179,560 |
||||
|
Total liabilities and shareholders' equity |
$ 1,443,658 |
$ 1,373,487 |
$ 1,289,793 |
|||
|
CAPITAL RATIOS |
||||||
|
Total capital (to risk weighted assets) |
16.62% |
18.15% |
19.02% |
|||
|
Tier I capital (to risk weighted assets) |
15.38% |
16.90% |
17.76% |
|||
|
Tier I capital (to leverage assets) |
11.71% |
12.33% |
12.08% |
|||
|
Tangible common equity (to tangible assets)(1) |
11.18% |
11.94% |
12.42% |
|||
|
Tangible common equity (to risk-weighted assets)(1) |
15.10% |
16.67% |
17.36% |
|||
|
OTHER FINANCIAL DATA |
||||||
|
Shares outstanding at end of period |
17,835,088 |
17,835,088 |
18,195,415 |
|||
|
Tangible shareholders' equity(1) |
$ 158,688 |
$ 161,350 |
$ 157,381 |
|||
|
Book value per share |
$ 10.23 |
$ 10.28 |
$ 9.87 |
|||
|
Tangible book value per share |
$ 8.90 |
$ 9.05 |
$ 8.65 |
|||
|
(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, |
December 31, |
March 31, |
||||
|
2013 |
2012 |
2012 |
||||
|
LOANS BY TYPE |
||||||
|
Real estate secured loans: |
||||||
|
Permanent loans: |
||||||
|
Multi-family residential |
$ 43,805 |
$ 45,212 |
$ 51,102 |
|||
|
Residential 1-4 family |
54,615 |
51,437 |
59,642 |
|||
|
Owner-occupied commercial |
234,083 |
219,276 |
218,526 |
|||
|
Nonowner-occupied commercial |
164,725 |
145,315 |
140,142 |
|||
|
Total permanent real estate loans |
497,228 |
461,240 |
469,412 |
|||
|
Construction loans: |
||||||
|
Multi-family residential |
23,162 |
17,022 |
4,906 |
|||
|
Residential 1-4 family |
22,550 |
20,390 |
16,590 |
|||
|
Commercial real estate |
25,866 |
23,235 |
12,546 |
|||
|
Commercial bare land and acquisition & development |
10,874 |
10,668 |
18,566 |
|||
|
Residential bare land and acquisition & development |
9,000 |
8,405 |
11,016 |
|||
|
Total construction real estate loans |
91,452 |
79,720 |
63,624 |
|||
|
Total real estate loans |
588,680 |
540,960 |
533,036 |
|||
|
Commercial loans |
357,089 |
325,604 |
286,543 |
|||
|
Consumer loans |
4,020 |
3,581 |
4,569 |
|||
|
Other loans |
1,039 |
1,112 |
1,439 |
|||
|
Gross loans |
950,828 |
871,257 |
825,587 |
|||
|
Deferred loan origination fees |
(745) |
(841) |
(727) |
|||
|
950,083 |
870,416 |
824,860 |
||||
|
Allowance for loan losses |
(16,312) |
(16,345) |
(15,829) |
|||
|
$ 933,771 |
$ 854,071 |
$ 809,031 |
||||
|
Three months ended |
||||||
|
March 31, |
December 31, |
March 31, |
||||
|
ALLOWANCE FOR LOAN LOSSES |
2013 |
2012 |
2012 |
|||
|
Balance at beginning of period |
$ 16,345 |
$ 16,283 |
$ 14,941 |
|||
|
Provision for loan losses |
250 |
- |
1,300 |
|||
|
Loan charge offs |
(597) |
(855) |
(522) |
|||
|
Loan recoveries |
314 |
917 |
110 |
|||
|
Net charge offs |
(283) |
62 |
(412) |
|||
|
Balance at end of period |
$ 16,312 |
$ 16,345 |
$ 15,829 |
|||
|
PACIFIC CONTINENTAL CORPORATION |
||||||
|
Selected Other Financial Information and Ratios |
||||||
|
(In thousands) |
||||||
|
(Unaudited) |
||||||
|
Three months ended |
||||||
|
March 31, |
December 31, |
March 31, |
||||
|
2013 |
2012 |
2012 |
||||
|
BALANCE SHEET AVERAGES |
||||||
|
Loans(1) |
$ 917,469 |
$ 846,199 |
$ 826,265 |
|||
|
Allowance for loan losses |
(16,388) |
(16,518) |
(15,427) |
|||
|
Loans, net of allowance |
901,081 |
829,681 |
810,838 |
|||
|
Securities and short-term deposits |
387,312 |
401,537 |
360,940 |
|||
|
Earning assets |
1,288,393 |
1,231,218 |
1,171,778 |
|||
|
Noninterest-earning assets |
123,595 |
126,878 |
112,849 |
|||
|
Assets |
$ 1,411,988 |
$ 1,358,096 |
$ 1,284,627 |
|||
|
Interest-bearing core deposits(2) |
$ 636,138 |
$ 583,339 |
$ 586,154 |
|||
|
Noninterest-bearing core deposits(2) |
307,176 |
317,029 |
283,943 |
|||
|
Core deposits(2) |
943,314 |
900,368 |
870,097 |
|||
|
Noncore interest-bearing deposits |
110,939 |
103,851 |
78,781 |
|||
|
Deposits |
1,054,253 |
1,004,219 |
948,878 |
|||
|
Borrowings |
170,308 |
164,966 |
151,828 |
|||
|
Other noninterest-bearing liabilities |
4,413 |
5,281 |
4,037 |
|||
|
Liabilities |
1,228,974 |
1,174,466 |
1,104,743 |
|||
|
Shareholders' equity (book) |
183,014 |
183,630 |
179,884 |
|||
|
Liabilities and equity |
$ 1,411,988 |
$ 1,358,096 |
$ 1,284,627 |
|||
|
Shareholders' equity (tangible)(3) |
$ 159,879 |
$ 161,586 |
$ 157,675 |
|||
|
SELECTED MARKET DATA |
||||||
|
Eugene market gross loans, period-end |
$ 324,009 |
$ 253,345 |
$ 237,687 |
|||
|
Portland market gross loans, period-end |
388,979 |
383,616 |
384,550 |
|||
|
Seattle market gross loans, period-end |
146,860 |
154,229 |
153,340 |
|||
|
Out-of-market health care gross loans, period-end |
90,980 |
80,067 |
50,010 |
|||
|
Total gross loans, period-end |
$ 950,828 |
$ 871,257 |
$ 825,587 |
|||
|
Eugene market core deposits, period-end(2) |
$ 598,156 |
$ 536,143 |
$ 502,710 |
|||
|
Portland market core deposits, period-end(2) |
232,431 |
258,516 |
235,571 |
|||
|
Seattle market core deposits, period-end(2) |
130,156 |
143,970 |
120,648 |
|||
|
Total core deposits, period-end(2) |
960,743 |
938,629 |
858,929 |
|||
|
Other deposits, period-end |
106,951 |
107,525 |
95,718 |
|||
|
Total |
$ 1,067,694 |
$ 1,046,154 |
$ 954,647 |
|||
|
Eugene market core deposits, average(2) |
$ 569,331 |
$ 518,487 |
$ 506,776 |
|||
|
Portland market core deposits, average(2) |
241,491 |
241,585 |
242,659 |
|||
|
Seattle market core deposits, average(2) |
132,493 |
140,296 |
120,662 |
|||
|
Total core deposits, average(2) |
943,315 |
900,368 |
870,097 |
|||
|
Other deposits, average |
110,938 |
103,851 |
78,781 |
|||
|
Total |
$ 1,054,253 |
$ 1,004,219 |
$ 948,878 |
|||
|
NET INTEREST MARGIN RECONCILIATION |
||||||
|
Yield on average loans |
5.72% |
5.76% |
6.01% |
|||
|
Yield on average securities(4) |
2.26% |
1.98% |
2.60% |
|||
|
Yield on average earning assets(4) |
4.68% |
4.53% |
4.96% |
|||
|
Rate on average interest-bearing core deposits |
0.36% |
0.41% |
0.53% |
|||
|
Rate on average interest-bearing non-core deposits |
1.16% |
1.17% |
1.85% |
|||
|
Rate on average interest-bearing deposits |
0.48% |
0.53% |
0.69% |
|||
|
Rate on average borrowings |
0.82% |
0.88% |
1.36% |
|||
|
Cost of interest-bearing funds |
0.54% |
0.59% |
0.81% |
|||
|
Interest rate spread(4) |
4.14% |
3.94% |
4.15% |
|||
|
Net interest margin(4) |
4.29% |
4.11% |
4.39% |
|||
|
(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) |
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 $251 thousand, $250 thousand and $186 thousand for the three months ended March 31, 2013, December 31, 2012, and March 31, 2012, respectively |
|
PACIFIC CONTINENTAL CORPORATION |
|||||||||||
|
Nonperforming Assets and Asset Quality Ratios |
|||||||||||
|
(In thousands) |
|||||||||||
|
(Unaudited) |
|||||||||||
|
March 31, |
December 31, |
March 31, |
|||||||||
|
2013 |
2012 |
2012 |
|||||||||
|
NONPERFORMING ASSETS |
|||||||||||
|
Non-accrual loans |
|||||||||||
|
Real estate secured loans: |
|||||||||||
|
Permanent loans: |
|||||||||||
|
Multi-family residential |
$ - |
$ - |
$ - |
||||||||
|
Residential 1-4 family |
1,269 |
1,140 |
3,344 |
||||||||
|
Owner-occupied commercial |
3,148 |
3,805 |
5,058 |
||||||||
|
Nonowner-occupied commercial |
- |
- |
- |
||||||||
|
Total permanent real estate loans |
4,417 |
4,945 |
8,402 |
||||||||
|
Construction loans: |
|||||||||||
|
Multi-family residential |
- |
- |
- |
||||||||
|
Residential 1-4 family |
- |
- |
15 |
||||||||
|
Commercial real estate |
- |
- |
933 |
||||||||
|
Commercial bare land and acquisition & development |
- |
- |
8,491 |
||||||||
|
Residential bare land and acquisition & development |
101 |
101 |
1,791 |
||||||||
|
Total construction real estate loans |
101 |
101 |
11,230 |
||||||||
|
Total real estate loans |
4,518 |
5,046 |
19,632 |
||||||||
|
Commercial loans |
3,344 |
4,315 |
5,899 |
||||||||
|
Total nonaccrual loans |
7,862 |
9,361 |
25,531 |
||||||||
|
90-days past due and accruing interest |
- |
- |
- |
||||||||
|
Total nonperforming loans |
7,862 |
9,361 |
25,531 |
||||||||
|
Nonperforming loans guaranteed by government |
(878) |
(905) |
(492) |
||||||||
|
Net nonperforming loans |
6,984 |
8,456 |
25,039 |
||||||||
|
Other real estate owned |
17,772 |
17,972 |
10,102 |
||||||||
|
Total nonperforming assets, net of guaranteed loans |
$ 24,756 |
$ 26,428 |
$ 35,141 |
||||||||
|
ASSET QUALITY RATIOS |
|||||||||||
|
Allowance for loan losses as a percentage of total loans outstanding |
1.72% |
1.88% |
1.92% |
||||||||
|
Allowance for loan losses as a percentage of total nonperforming loans, net of government guarantees |
233.56% |
193.29% |
63.22% |
||||||||
|
Quarter to date net loan charge offs (recoveries) as a percentage of average loans, annualized |
0.13% |
-0.03% |
0.20% |
||||||||
|
Net nonperforming loans as a percentage of total loans |
0.74% |
0.97% |
3.04% |
||||||||
|
Nonperforming assets as a percentage of total assets |
1.71% |
1.92% |
2.72% |
||||||||
|
Consolidated classified asset ratio(1) |
32.83% |
31.18% |
38.44% |
||||||||
|
Past due as a percentage of total loans(2) |
0.20% |
0.30% |
0.67% |
||||||||
|
(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 March 31, 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 |
$ - |
$ - |
$ - |
$ - |
$ - |
$ 43,805 |
$ 43,805 |
|||||||||
|
Residential 1-4 family |
421 |
80 |
- |
1,269 |
1,770 |
52,845 |
54,615 |
|||||||||
|
Owner-occupied commercial |
- |
- |
- |
3,148 |
3,148 |
230,935 |
234,083 |
|||||||||
|
Nonowner-occupied commercial |
- |
- |
- |
- |
- |
164,725 |
164,725 |
|||||||||
|
Total real estate loans |
421 |
80 |
- |
4,417 |
4,918 |
492,310 |
497,228 |
|||||||||
|
Construction |
||||||||||||||||
|
Multi-family residential |
- |
- |
- |
- |
- |
23,162 |
23,162 |
|||||||||
|
Residential 1-4 family |
234 |
- |
- |
- |
234 |
22,316 |
22,550 |
|||||||||
|
Commercial real estate |
- |
- |
- |
- |
- |
25,866 |
25,866 |
|||||||||
|
Commercial bare land and acquisition & development |
- |
- |
- |
- |
- |
10,874 |
10,874 |
|||||||||
|
Residential bare land and acquisition & development |
- |
- |
- |
101 |
101 |
8,899 |
9,000 |
|||||||||
|
Total construction loans |
234 |
- |
- |
101 |
335 |
91,117 |
91,452 |
|||||||||
|
Commercial and other |
1,118 |
38 |
- |
3,344 |
4,500 |
353,628 |
358,128 |
|||||||||
|
Consumer |
6 |
5 |
- |
- |
11 |
4,009 |
4,020 |
|||||||||
|
Totals |
$ 1,779 |
$ 123 |
$ - |
$ 7,862 |
$ 9,764 |
$ 941,064 |
$ 950,828 |
|||||||||
|
PACIFIC CONTINENTAL CORPORATION |
||||||||||||||||
|
Aged Analysis of Loans Receivable (Unaudited) |
||||||||||||||||
|
(In thousands) |
||||||||||||||||
|
As of March 31, 2012 |
||||||||||||||||
|
Greater |
||||||||||||||||
|
30-59 Days |
60-89 Days |
Than |
Total Past |
|||||||||||||
|
Past Due |
Past Due |
90 Days |
Due and |
Total |
Total Financing |
|||||||||||
|
Still Accruing |
Still Accruing |
Still Accruing |
Nonaccrual |
Nonaccrual |
Current |
Receivables |
||||||||||
|
Real estate loans |
||||||||||||||||
|
Multi-family 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 |
||||||||||||||||
|
Multi-family 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 |
|||||||||
|
Total |
$ 3,615 |
$ 1,935 |
$ - |
$ 25,531 |
$ 31,081 |
$ 794,506 |
$ 825,587 |
|||||||||
|
PACIFIC CONTINENTAL CORPORATION |
|||||||||||
|
Credit Quality Indicators (Unaudited) |
|||||||||||
|
(In thousands) |
|||||||||||
|
As of March 31, 2013 |
|||||||||||
|
Loan Grade |
|||||||||||
|
Pass |
Special Mention |
Substandard |
Doubtful |
Totals |
|||||||
|
Real estate loans |
|||||||||||
|
Multi-family residential |
$ 42,483 |
$ - |
$ 1,322 |
$ - |
$ 43,805 |
||||||
|
Residential 1-4 family |
44,337 |
- |
10,278 |
- |
54,615 |
||||||
|
Owner-occupied commercial |
224,212 |
- |
9,871 |
- |
234,083 |
||||||
|
Nonowner-occupied commercial |
159,589 |
- |
5,136 |
- |
164,725 |
||||||
|
Total real estate loans |
470,621 |
- |
26,607 |
- |
497,228 |
||||||
|
Construction |
|||||||||||
|
Multi-family residential |
23,162 |
- |
- |
- |
23,162 |
||||||
|
Residential 1-4 family |
22,368 |
- |
182 |
- |
22,550 |
||||||
|
Commercial real estate |
24,286 |
- |
1,580 |
- |
25,866 |
||||||
|
Commercial bare land and acquisition & development |
10,682 |
- |
192 |
- |
10,874 |
||||||
|
Residential bare land and acquisition & development |
5,585 |
- |
3,415 |
- |
9,000 |
||||||
|
Total construction loans |
86,083 |
- |
5,369 |
- |
91,452 |
||||||
|
Commercial and other |
349,999 |
- |
8,129 |
- |
358,128 |
||||||
|
Consumer |
3,964 |
- |
56 |
- |
4,020 |
||||||
|
Totals |
$ 910,667 |
$ - |
$ 40,161 |
$ - |
$ 950,828 |
||||||
|
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 |
|||||||||||
|
Multi-family 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 |
|||||||||||
|
Multi-family 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 |
|
|
Summary of Century Bank Acquisition |
|
|
(In thousands) |
|
|
(Unaudited) |
|
|
Century Bank |
|
|
February 1, 2013 |
|
|
ASSETS ACQUIRED |
|
|
Securities available-for-sale |
$ 61 |
|
Loans |
63,339 |
|
Interest receivable |
250 |
|
Federal Home Loan Bank stock |
355 |
|
Property and equipment |
70 |
|
Goodwill |
915 |
|
Core deposit intangible |
845 |
|
Deferred tax asset |
633 |
|
Other assets |
16 |
|
Total assets acquired |
$ 66,484 |
|
LIABILITIES ASSUMED |
|
|
Deposits |
$ 63,211 |
|
Payable to Pacific Continental Bank for cash paid to shareholders |
2,891 |
|
Accrued interest and other payables |
382 |
|
Total liabilities acquired |
$ 66,484 |
SOURCE Pacific Continental Corporation
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