Pacific Continental Corporation Reports Third Quarter 2013 Results

Loan Growth and Interest Recoveries Drive Earnings

News provided by

Pacific Continental Corporation

Oct 16, 2013, 04:30 ET

EUGENE, Ore., Oct. 16, 2013 /PRNewswire/ -- Pacific Continental Corporation (Nasdaq: PCBK), the holding company of Pacific Continental Bank, today reported financial results for the third quarter 2013.

Recent highlights:

  • Net income $3.9 million or $0.22 per diluted share.
  • Organic loan growth continued for seventh consecutive quarter.
  • Period-end core deposits totaled $1 billion.
  • Net loan recoveries recorded during the quarter.
  • Declared fourth quarter 2013 quarterly cash dividend of $0.10 per share, an increase of $0.01 over the prior quarter, and special cash dividend of $0.12 per share.
  • Total risk-based capital ratio of 16.42%, significantly above the 10.00% minimum for "well-capitalized" designation.
  • Recognized by the Nonprofit Network of Southwest Washington with the Nonprofit Excellence in Corporate Community Support Award.

Net income
Net income for third quarter 2013 was $3.9 million or $0.22 per diluted share compared to net income of $3.4 million or $0.19 per diluted share in third quarter 2012. Included in the period were loan recoveries and interest recoveries, on two loans, totaling $613 thousand and $982 thousand, respectively. Also included in the period was a $728 thousand write down on a commercial land development property held in other real estate. Return on average assets, average book equity, and average tangible equity were 1.09%, 8.77%, and 10.12%, respectively, in third quarter 2013, compared to 1.03%, 7.52%, and 8.56% for the same quarter last year.

"We are pleased with the recent quarter and year-to-date results that reflect the excellent work of all departments within the bank," said Hal Brown, chief executive officer. "Loan and deposit growth strongly supported the board's decision to increase our regular dividend," added Brown.

Loan growth
Outstanding gross loans at September 30, 2013, were $978.7 million, up $18.2 million over the prior quarter end and up $141.7 million from third quarter 2012. After removing the loans acquired in the Century Bank transaction, organic loan growth for the first nine months of 2013 was $59.7 million representing an annualized growth rate of 9.15%. Loan growth for the third quarter was primarily centered in construction lending and commercial loans. At September 30, 2013, loans to dental professionals totaled $303.9 million representing 31.05% of the total loan portfolio. Outstanding loans to dental professionals grew 12.23% during the first nine months of 2013 and 23.74% over September 30, 2012. National dental lending at September 30, 2013, totaled $122.5 million, up $20.2 million during the third quarter.

"We are pleased to report that the sustained loan growth has been attributable to long standing commercial clients who are now taking advantage of the improving economy, combined with our strong health care referral network and concerted calling efforts on the part of our bankers," said Roger Busse, president and chief operating officer. "While competition for loans continues, we anticipate that our strong loan pipelines should lead to continued growth," added Busse.

Core deposit growth accelerates
Period-end Company-defined core deposits at September 30, 2013, were $1.0 billion and represented an increase of $56.9 million from the prior quarter end, reflecting the typical seasonal growth pattern during the last half of the year.  At period-end September 30, 2013, noninterest-bearing demand deposits totaled $379.6 million and represented 37.37% of core deposits. Century Bank core deposit retention remained strong with September 30, 2013 balances at 94.31% of the February 1, 2013 acquisition total.

Net interest margin
The third quarter 2013 net interest margin, on a tax equivalent basis, was 4.58%, representing a linked-quarter increase of 38 basis points from second quarter 2013, and an increase of 42 basis points from third quarter 2012. Included in the third quarter net interest margin was $982 thousand of interest recoveries, which contributed 30 basis points to the third quarter margin. In addition, the accretion of the Century Bank loan fair value market adjustment positively impacted the net interest margin by 5 basis points.

Classified assets, provisioning and loan statistics
At September 30, 2013, classified assets totaled $54.5 million and represented 30.25% of regulatory capital, compared to $56.1 million and 31.18% of regulatory capital at December 31, 2012.  Classified asset levels were temporarily increased by $5.8 million as a result of the Century Bank acquisition. Third quarter 2013 classified assets were lower than pre-acquisition levels.

Nonperforming assets, a subcategory of classified assets, totaled $21.8 million at September 30, 2013, or 1.50% of total assets, a decrease from December 31, 2012, and September 30, 2012, ratios of 1.92% and 2.14%, respectively. Nonperforming assets were comprised of $5.2 million of nonperforming loans, net of government guarantees, and $16.6 million in other real estate owned. Loans past-due 30-89 days were 0.37% of total loans at September 30, 2013, compared to 0.30% at December 31, 2012. This is the seventeenth consecutive quarter in which this ratio was near or below one percent.

Classified dental loans totaled 2.16% of total dental loans with net charge offs of $377 thousand through September 30, 2013. National dental lending statistics remain positive with no loans past due, and 0.60% of the national dental lending portfolio considered classified. 

"Principal and interest recoveries of more than $1.7 million during the quarter reflected the successful efforts of our legal and special assets teams who diligently work on problem loan collection well after loan charge offs occurred," said Casey Hogan, executive vice president and chief credit officer.

The Company made no provision for loan losses during the third quarter 2013, with quarter to date net recoveries of $499 thousand. The allowance for loan losses as a percentage of outstanding loans at September 30, 2013, was 1.72% compared to 1.88% at December 31, 2012, and 1.95% at September 30, 2012. The allowance for loan losses as a percentage of total nonperforming loans, net of government guarantees, improved to 325.94% at September 30, 2013, from 167.87% 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 September 30, 2013, the Company's Tier 1 leverage ratio, Tier 1 risk-based capital ratio, and Total risk-based capital ratios were 11.56%, 15.16% and 16.42%, respectively, as compared to 12.53%, 17.37% and 18.62% at September 30, 2012, reflecting 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 authorizes the repurchase up to 892,000 shares or five percent of the Company's outstanding shares. The plan commenced on April 1, 2013, with purchases to occur over a 12-month period. No shares were repurchased under the plan. 

Noninterest income and expense
Noninterest income for the third quarter was $1.4 million, up $32 thousand over third quarter 2012, reflecting a small increase in both service charge and bankcard income. Noninterest expense in third quarter 2013 was up $1.7 million over third quarter 2012, with a portion of the increase centered in other real estate expense, which includes the effects of the $728 thousand third quarter other real estate write down. In addition, compensation and business development expenses were up, reflecting the addition of business development personnel who have increased calling efforts during 2013 as evidenced by the Bank's loan growth. The third quarter efficiency ratio was 63.82% compared to 62.70% for third 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 third quarter 2013 on Thursday, October 17, 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 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 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; 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

Nine months ended

September 30, 

September 30, 

September 30, 

September 30, 

2013

2012

2013

2012

Interest and dividend income







Loans

$             14,028

$             11,971

$             39,793

$             36,089

Taxable securities

1,489

1,490

4,164

4,886

Tax-exempt securities

488

420

1,430

1,162

Federal funds sold & interest-bearing deposits with banks

2

2

7

4

16,007

13,883

45,394

42,141







Interest expense







Deposits

801

992

2,586

3,149

Federal Home Loan Bank & Federal Reserve borrowings

292

364

905

1,259

Junior subordinated debentures

51

38

140

116

Federal funds purchased

5

4

12

20

1,149

1,398

3,643

4,544







     Net interest income

14,858

12,485

41,751

37,597







Provision for loan losses

-

-

250

1,900

     Net interest income after provision for loan losses

14,858

12,485

41,501

35,697







Noninterest income







Service charges on deposit accounts

487

463

1,436

1,359

Other fee income, principally bankcard

432

408

1,217

1,205

Mortgage banking income

-

-

-

72

Bank-owned life insurance income

131

157

387

432

Loss on sale of investment securities

-

-

(8)

-

  Impairment losses on investment securities (OTTI)

-

-

(16)

-

Other noninterest income

397

387

1,248

1,290

1,447

1,415

4,264

4,358







Noninterest expense







Salaries and employee benefits

5,541

4,720

16,344

14,721

Premises and equipment

919

838

2,746

2,553

Data processing

659

538

1,954

1,543

Legal and professional fees

421

435

1,460

1,378

Business development

421

376

1,375

1,088

FDIC insurance assessment

231

285

674

814

Bankcard processing

150

147

418

440

Other real estate expense

1,185

466

1,762

1,082

Merger related expenses(1)

-

-

1,246

-

Other noninterest expense

879

910

2,708

2,579

10,406

8,715

30,687

26,198







Income before provision for income taxes

5,899

5,185

15,078

13,857

Provision for income taxes

1,959

1,747

4,963

4,587







     Net income

$               3,940

$               3,438

$             10,115

$               9,270







Earnings per share:







Basic

$                 0.22

$                 0.19

$                 0.57

$                 0.51

Diluted

$                 0.22

$                 0.19

$                 0.56

$                 0.51







Weighted average shares outstanding:







Basic

17,888,182

17,978,081

17,865,582

18,166,377







Common stock equivalents attributable to stock-based awards

221,100

152,964

191,046

152,957

     Diluted

18,109,282

18,131,045

18,056,628

18,319,334







PERFORMANCE RATIOS







Return on average assets 

1.09%

1.03%

0.95%

0.95%

Return on average equity (book) 

8.77%

7.52%

7.46%

6.85%

Return on average equity (tangible) (2)

10.12%

8.56%

8.58%

7.81%

Net interest margin (3)

4.58%

4.16%

4.36%

4.28%

Efficiency ratio (4)

63.82%

62.70%

66.69%

62.44%

(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)







September 30,

December 31,

September 30,

2013

2012

2012

ASSETS





Cash and due from banks

$ 42,555

$ 28,607

$ 20,840

Interest-bearing deposits with banks

54

94

53

     Total cash and cash equivalents

42,609

28,701

20,893





Securities available-for-sale

347,506

389,885

406,175

Loans, less allowance for loan losses and net deferred fees

960,916

854,071

819,922

Interest receivable

4,608

4,520

4,861

Federal Home Loan Bank stock

10,523

10,462

10,557

Property and equipment, net of accumulated depreciation

19,116

19,238

19,478

Goodwill and intangible assets

23,710

22,031

22,068

Deferred tax asset

9,438

6,230

6,803

Taxes receivable

130

-

-

Other real estate owned

16,602

17,972

19,235

Prepaid FDIC assessment

-

1,746

1,998

Bank-owned life insurance

16,008

15,621

15,469

Other assets

3,712

3,010

2,963





     Total assets

$ 1,454,878

$ 1,373,487

$ 1,350,422





LIABILITIES AND SHAREHOLDERS' EQUITY





Deposits





     Noninterest-bearing demand

$ 379,598

$ 329,825

$ 304,016

     Savings and interest-bearing checking

565,204

554,693

520,218

     Time $100,000 and over

81,569

73,610

77,790

     Other time

91,158

88,026

78,138

          Total deposits

1,117,529

1,046,154

980,162





Federal funds and overnight funds purchased

-

11,570

9,385

Federal Home Loan Bank borrowings

145,000

118,000

165,000

Junior subordinated debentures

8,248

8,248

8,248

Accrued interest and other payables

4,423

6,134

4,848

          Total liabilities

1,275,200

1,190,106

1,167,643





Shareholders' equity





Common stock: 50,000,000 shares authorized. Shares issued and outstanding: 17,888,251 at September 30, 2013, 17,835,088 at December 31, 2012 and 17,900,188 at September 30, 2012

133,597

133,017

133,385

Retained earnings

45,533

44,533

43,113

Accumulated other comprehensive income

548

5,831

6,281

179,678

183,381

182,779





          Total liabilities and shareholders' equity

$ 1,454,878

$ 1,373,487

$ 1,350,422












CAPITAL RATIOS





Total capital (to risk weighted assets)

16.42%

18.15%

18.62%

Tier I capital (to risk weighted assets)

15.16%

16.90%

17.37%

Tier I capital (to leverage assets)

11.56%

12.33%

12.53%

Tangible common equity (to tangible assets)(1)

10.90%

11.94%

12.10%

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

14.47%

16.67%

17.18%





OTHER FINANCIAL DATA





Shares outstanding at end of period

17,888,251

17,835,088

17,900,188

Tangible shareholders' equity(1)

$ 155,968

$ 161,350

$ 160,711

Book value per share

$ 10.04

$ 10.28

$ 10.21

Tangible book value per share

$ 8.72

$ 9.05

$ 8.98

(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)


















September 30,


December 31,

September 30,





2013

2012

2012

LOANS BY TYPE







Real estate secured loans:







Permanent loans:







     Multi-family residential

$ 47,795

$ 45,212

$ 43,080

     Residential 1-4 family

49,206

51,437

53,556

     Owner-occupied commercial

244,828

219,276

222,374

     Nonowner-occupied commercial

164,708

145,315

140,104

          Total permanent real estate loans

506,537

461,240

459,114

Construction loans:







     Multi-family residential

22,929

17,022

12,794

     Residential 1-4 family

29,880

20,390

18,108

     Commercial real estate

24,106

23,235

15,817

     Commercial bare land and acquisition & development

11,191

10,668

9,887

     Residential bare land and acquisition & development

7,053

8,405

9,108

          Total construction real estate loans

95,159

79,720

65,714

               Total real estate loans

601,696

540,960

524,828

Commercial loans

372,129

325,604

306,870

Consumer loans

3,660

3,581

3,941

Other loans

1,188

1,112

1,334

     Gross loans

978,673

871,257

836,973

Deferred loan origination fees

(955)

(841)

(768)



977,718

870,416

836,205

Allowance for loan losses

(16,802)

(16,345)

(16,283)



$ 960,916

$ 854,071

$ 819,922





















Three months ended

Nine months ended

September 30,


September 30,


September 30,


September 30,

ALLOWANCE FOR LOAN LOSSES

2013

2012

2013

2012

 Balance at beginning of period

$ 16,303

$ 16,175

$ 16,346

$ 14,941

  Provision for loan losses

-

-

250

1,900

  Loan charge offs

(221)

(1,140)

(1,049)

(2,809)

  Loan recoveries

720

1,248

1,255

2,251

   Net recoveries (charge offs)

499

108

206

(558)

 Balance at end of period

$ 16,802

$ 16,283

$ 16,802

$ 16,283

PACIFIC CONTINENTAL CORPORATION

Selected Other Financial Information and Ratios

(In thousands)

(Unaudited)









Three months ended

Nine months ended



September 30,


September 30,


September 30,


September 30,



2013

2012

2013

2012

BALANCE SHEET AVERAGES







     Loans(1)

$ 974,775

$ 832,845

$ 949,531

$ 828,283

     Allowance for loan losses

(16,403)

(16,151)

(16,419)

(16,002)

          Loans, net of allowance

958,372

816,694

933,112

812,281

     Securities and short-term deposits

351,536

399,224

371,495

379,338

          Earning assets

1,309,908

1,215,918

1,304,607

1,191,619

     Noninterest-earning assets

125,349

111,159

124,062

111,707

               Assets

$ 1,435,257

$ 1,327,077

$ 1,428,669

$ 1,303,326







     Interest-bearing core deposits(2)

$ 625,795

$ 579,469

$ 633,338

$ 578,648

     Noninterest-bearing core deposits(2)

346,692

300,091

327,643

290,847

          Core deposits(2)

972,487

879,560

960,981

869,495

     Noncore interest-bearing deposits

105,408

99,852

108,363

92,827

          Deposits

1,077,895

979,412

1,069,344

962,322

     Borrowings

174,973

161,215

174,217

156,001

     Other noninterest-bearing liabilities

4,144

4,606

3,911

4,252

          Liabilities

1,257,012

1,145,233

1,247,472

1,122,575

     Shareholders' equity (book)

178,245

181,844

181,197

180,751

          Liabilities and equity

$ 1,435,257

$ 1,327,077

$ 1,428,669

$ 1,303,326







     Shareholders' equity (tangible)(3)

$ 154,519

$ 159,756

$ 157,657

$ 158,598







SELECTED MARKET DATA







     Eugene market gross loans, period-end

$ 324,320

$ 240,013



     Portland market gross loans, period-end

390,014

375,234



     Seattle market gross loans, period-end

136,178

151,745



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

128,161

69,981



          Total gross loans, period-end

$ 978,673

$ 836,973












     Eugene market core deposits, period-end(2)

$ 596,403

$ 512,842



     Portland market core deposits, period-end(2)

256,710

226,576



     Seattle market core deposits, period-end(2)

162,538

143,196



          Total core deposits, period-end(2)

1,015,651

882,614



     Other deposits, period-end

101,878

97,548



          Total

$ 1,117,529

$ 980,162












     Eugene market core deposits, average(2)

$ 589,123

$ 508,927



     Portland market core deposits, average(2)

240,612

229,913



     Seattle market core deposits, average(2)

142,752

140,720



          Total core deposits, average(2)

972,487

879,560



     Other deposits, average

105,408

99,852



          Total

$ 1,077,895

$ 979,412












NET INTEREST MARGIN RECONCILIATION







     Yield on average loans

5.81%

5.83%

5.70%

5.93%

     Yield on average securities(5)

2.53%

2.13%

2.29%

2.35%

          Yield on average earning assets(5)

4.93%

4.62%

4.73%

4.79%







     Rate on average interest-bearing core deposits

0.33%

0.45%

0.35%

0.49%

     Rate on average interest-bearing non-core deposits

1.08%

1.34%

1.16%

1.46%

          Rate on average interest-bearing deposits

0.43%

0.58%

0.47%

0.63%







     Rate on average borrowings

0.79%

1.00%

0.81%

1.19%

          Cost of interest-bearing funds

0.50%

0.66%

0.53%

0.73%







          Interest rate spread(5)

4.42%

3.96%

4.20%

4.06%







               Net interest margin(5)

4.58%

4.16%

4.36%

4.28%

(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 $266 for the three months ended September 30, 2013, and September 30, 2012, respectively and $770 thousand, and $625 thousand for the nine months ended September 30, 2013, and September 30, 2012, respectively.

PACIFIC CONTINENTAL CORPORATION

Nonperforming Assets and Asset Quality Ratios

(In thousands)

(Unaudited)

















September 30, 

December 31,

September 30, 





2013

2012

2012

NONPERFORMING ASSETS




Non-accrual loans





Real estate secured loans:






Permanent loans:







Multi-family residential

$                     -

$                   -

$                   -

Residential 1-4 family

1,206

1,140

2,517

Owner-occupied commercial

2,235

3,805

3,624

Nonowner-occupied commercial

139

-

-


Total permanent real estate loans

3,580

4,945

6,141

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

104


Total construction real estate loans

-

101

104



Total real estate loans

3,580

5,046

6,245

Commercial loans

2,361

4,315

4,578




Total nonaccrual loans

5,941

9,361

10,823

90-days past due and accruing interest

-

-

-

Total nonperforming loans

5,941

9,361

10,823

Nonperforming loans guaranteed by government

(786)

(905)

(1,123)

Net nonperforming loans

5,155

8,456

9,700

Other real estate owned

16,602

17,972

19,235

Total nonperforming assets, net of guaranteed loans

$           21,757

$         26,428

$           28,935













ASSET QUALITY RATIOS








Allowance for loan losses as a percentage of total loans outstanding

1.72%

1.88%

1.95%


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

325.94%

193.29%

167.87%


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

-0.03%

0.06%

0.09%


Net nonperforming loans as a percentage of total loans

0.53%

0.97%

1.16%


Nonperforming assets as a percentage of total assets

1.50%

1.92%

2.14%


Consolidated classified asset ratio(1)

30.25%

31.18%

32.43%


Past due as a percentage of total loans(2)

0.37%

0.30%

0.47%

(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 September 30, 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

$                 -

$                 -

$                  -

$             -

$             -

$   47,795

$       47,795

Residential 1-4 family

-

-

-

1,206

1,206

48,000

49,206

Owner-occupied commercial

166

166

-

2,235

2,567

242,261

244,828

Nonowner-occupied commercial

1,096

559

-

139

1,794

162,914

164,708

Total real estate loans

1,262

725

-

3,580

5,567

500,970

506,537















Construction












  Multi-family residential

-

-

-

-

-

22,929

22,929

  Residential 1-4 family

-

-

-

-

-

29,880

29,880

  Commercial real estate

-

-

-

-

-

24,106

24,106

  Commercial bare land and acquisition & development

-

-

-

-

-

11,191

11,191

  Residential bare land and acquisition & development

-

-

-

-

-

7,053

7,053

  Total  construction loans

-

-

-

-

-

95,159

95,159















Commercial and other

1,292

325

-

2,361

3,978

369,339

373,317















Consumer

5

-

-

-

5

3,655

3,660

















Total

$            2,559

$            1,050

$                  -

$        5,941

$        9,550

$ 969,123

$     978,673

















































PACIFIC CONTINENTAL CORPORATION

Aged Analysis of Loans Receivable (Unaudited)

(In thousands)

As of  September 30, 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

$                 -

$                 -

$                  -

$             -

$             -

$   43,080

$       43,080

Residential 1-4 family

208

-

-

2,517

2,725

50,831

53,556

Owner-occupied commercial

-

340

-

3,624

3,964

218,410

222,374

Nonowner-occupied commercial

92

-

-

-

92

140,012

140,104

Total real estate loans

300

340

-

6,141

6,781

452,333

459,114















Construction












    Multi-family residential

-

-

-

-

-

12,794

12,794

    Residential 1-4 family

192

-

-

-

192

17,916

18,108

    Commercial real estate

1,598

-

-

-

1,598

14,219

15,817

    Commercial bare land and acquisition & development

-

-

-

-

-

9,887

9,887

    Residential bare land and acquisition & development

-

-

-

104

104

9,004

9,108

Total construction loans

1,790

-

-

104

1,894

63,820

65,714















Commercial and other

1,508

-

-

4,578

6,086

302,118

308,204















Consumer

5

-

-

-

5

3,936

3,941


















Total

$            3,603

$               340

$                  -

$      10,823

$      14,766

$ 822,207

$     836,973

PACIFIC CONTINENTAL CORPORATION

Credit Quality Indicators (Unaudited)

(In thousands)

As of September 30, 2013













Loan Grade




Pass

Special Mention

Substandard

Doubtful

Total










Real estate loans








Multi-family residential

$   46,487

$                      -

$          1,308

$         -

$   47,795

Residential 1-4 family

40,181

-

9,025

-

49,206

Owner-occupied commercial

239,091

-

5,737

-

244,828

Nonowner-occupied commercial

158,944

-

5,764

-

164,708

Total real estate loans

484,703

-

21,834

-

506,537










Construction








  Multi-family residential

22,929

-

-

-

22,929

  Residential 1-4 family

29,683

-

197

-

29,880

  Commercial real estate

22,548

-

1,558

-

24,106

  Commercial bare land and acquisition & development

10,980

-

211

-

11,191

  Residential bare land and acquisition & development

4,475

-

2,578

-

7,053

  Total  construction loans

90,615

-

4,544

-

95,159










Commercial and other

360,749

-

12,551

17

373,317










Consumer

3,630

-

30

-

3,660












Total

$ 939,697

$                      -

$        38,959

$        17

$ 978,673
























PACIFIC CONTINENTAL CORPORATION

Credit Quality Indicators (Unaudited)

(In thousands)

As of September 30, 2012













Loan Grade




Pass

Special Mention

Substandard

Doubtful

Total






















Real estate loans








Multi-family residential

$   41,744

$                      -

$          1,336

$         -

$   43,080

Residential 1-4 family

44,899

-

8,657

-

53,556

Owner-occupied commercial

212,243

-

10,131

-

222,374

Nonowner-occupied commercial

136,518

-

3,586

-

140,104

Total real estate loans

435,404

-

23,710

-

459,114










Construction








  Multi-family residential

12,794

-

-

-

12,794

  Residential 1-4 family

17,916

-

192

-

18,108

  Commercial real estate

14,219

-

1,598

-

15,817

  Commercial bare land and acquisition & development

9,887

-

-

-

9,887

  Residential bare land and acquisition & development

6,096

-

3,012

-

9,108

  Total  construction loans

60,912

-

4,802

-

65,714










Commercial and other

298,136

-

10,068

-

308,204










Consumer

3,874

-

67

-

3,941












Total

$ 798,326

$                      -

$        38,647

$         -

$ 836,973

SOURCE Pacific Continental Corporation