8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

January 20, 2009

PACIFIC CONTINENTAL CORPORATION

(Exact name of registrant as specified in its charter)

Oregon

(State or other jurisdiction of incorporation)

	0001084717		93-1269184
(Commission File Number)		IRS Employer Identification No.

111 West 7th Avenue

Eugene, Oregon 97401

(Address of principal executive offices)  (zip code)

Registrant's telephone number, including area code: (541) 686-8685

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

  Section 2 – Financial Information

Item 2.02 Results of Operations and Financial Condition

On January 20, 2009, Pacific Continental Corporation (the “Company”) issued a press release announcing earnings for the fourth quarter and year ended December 31, 2008.  A copy of the press release is attached as Exhibit 99.1 and is incorporated herein by reference in its entirety.

The information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filings or document

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

(a)           Not applicable

(b)           Not applicable

(c)           Exhibits

99.1 Press Release dated January 20, 2009, announcing earnings for the fourth quarter and year ended December 31, 2008.

1

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:                      January 20, 2009

PACIFIC CONTINENTAL CORPORATION

By:  /s/ Michael A. Reynolds

       Michael A. Reynolds

       Executive Vice President

       Chief Financial Officer

2

EX-99.1

NEWS RELEASE

FOR MORE INFORMATION CONTACT:	Hal Brown	Michael A. Reynolds
	CEO	Executive Vice President/CFO
	541 686-8685	541 686-8685
	http://www.therightbank.com
	E-mail:  banking@therightbank.com

FOR IMMEDIATE RELEASE

PACIFIC CONTINENTAL REPORTS FOURTH QUARTER AND FULL YEAR 2008 RESULTS

Solid credit quality, strong net interest margin and continued loan growth drive operating gains

EUGENE, Ore., January 20, 2009 - ---Pacific Continental Corporation (NASDAQ: PCBK), the bank holding company for Pacific Continental Bank, today reported financial results for the fourth quarter and full year 2008.

Net income for the fourth quarter 2008 was $3.8 million, a 15.9% increase over net income of $3.3 million reported for the fourth quarter 2007.  Earnings per diluted share were $0.32 in the current quarter, a 14.3% increase over the $0.28 per share for the same quarter last year.  Return on average assets, return on average equity, and return on average tangible equity for the fourth quarter 2008 were 1.43%, 13.26%, and 16.57%, respectively, compared to 1.41%, 12.22%, and 15.58% for the same quarter last year.

Operating revenue, which consists of net interest income plus noninterest income, was $14.2 million during the fourth quarter 2008, up $886 thousand or 6.6% on a linked-quarter basis, and up $2.0 million or 16.5% over fourth quarter 2007. Contributing to the improvement in operating revenue was a better than expected net interest margin, continued low levels of nonperforming assets, and excellent growth in loans.  Also contributing to fourth quarter results was a tax benefit of approximately $237 thousand from the purchase of business energy tax credits which added approximately $0.02 per diluted share to earnings in the quarter.

These results were achieved while making provisions to the allowance for loan losses to support the loan growth and prudently maintaining unallocated reserves. The Company’s capital ratios improved during the quarter strengthening its “well capitalized” position.  At December 31, 2008, the Bank’s risk-weighted capital ratio was 11.11% compared to 10.81% and 10.96% at September 30, 2008 and December 31, 2007. In addition, on January 7, 2009, the Company announced a capital raise of approximately $9.6 million through the issuance of new common stock.  The new capital will strengthen the risk based capital ratio to more than 12%.

“The results achieved by Pacific Continental during these recessionary times are in sharp contrast to most of our peers,” said Hal Brown, chief executive officer. “Our disciplined credit practices and strong capital position have allowed Pacific Continental to continue as an active lender in all of our markets.  In addition, our ability to raise private equity capital during these difficult times is further testimony to the Company’s financial strength.”

Fourth quarter 2008, core deposits averaged $618.9 million, an increase of $7.4 million or 1.2% over fourth quarter 2007 average core deposits, but down $7.6 million from the average core deposits reported for the third quarter 2008.  The Bank’s commercial core deposit base has been negatively affected by the current economic conditions resulting in decreased activity and balances in existing client accounts.  At December 31, 2008, period end loans, including loans held for sale, totaled $956.8 million, an increase of $134.4 million or 16.3% over outstanding loans of $822.3 million at December 31, 2007, and up $32.2 million during the fourth quarter 2008.

The fourth quarter 2008 net interest margin was 5.28%, the highest quarterly margin reported for the year.  The net interest margin improved by 20 basis points over the third quarter 2008 margin of 5.08%, and was up 13 basis points over the 5.15% reported for fourth quarter 2007. The net interest margin for the full year 2008 was 5.21%, down one basis point from the 5.22% reported for last year. The improved margin in the fourth quarter was primarily due to the activation of interest rate floors on variable rate loans, which stabilized loan yields, combined with historically low alternative funding costs.

Nonperforming assets at December 31, 2008, were $7.7 million, an increase of $1.4 million from September 30, 2008, levels, and represent 0.71% of period-end assets compared to 0.60% at September 30, 2008. The increase in nonperforming assets was attributable to the addition of five loans associated with the consumer residential construction loan portfolio which migrated to a non-performing status or other real estate owned and three single-family residential construction loans associated with Portland-area builders. Nonperforming assets at December 31, 2008, consist of $3.9 million of loans on non-accrual status, net of government guarantees, and $3.8 million in other real estate owned. The $3.9 million of non-accrual loans consist of seven consumer residential construction loans totaling approximately $1.1 million, four commercial residential construction loans totaling $900 thousand, one commercial real estate loan for $1.7 million, and three business loans totaling $200 thousand. The $3.8 million in other real estate owned consists of 17 completed consumer construction residential properties totaling $3.3 million and seven individual residential building lots totaling $469 thousand. The consumer residential construction loan portfolio continues to be supported by a cash-secured 20% principal guarantee.  This guarantee has been, and will continue to be, effective in minimizing losses within this consumer residential construction loan portfolio.

For the fourth quarter 2008, the Bank provided $1.05 million to the allowance for loan losses, the same amount provided during the third quarter 2008 and up $775 thousand over the provision provided during the fourth quarter 2007. Year-to-date provisions to the allowance for loan loss totaled $3.6 million and $725 thousand for the years 2008 and 2007, respectively. The increase in the provision for loan losses during the fourth quarter and the year 2008 were primarily to support the $134.4 million in loan growth and, in light of the current economic conditions, to provide prudent additions to the Bank’s allowance for loan losses. At December 31, 2008, unallocated reserves were 9.8% of the total allowance for loan losses and at the high end of the approved range. At December 31, 2008, the ratio of the allowance for loan losses to total loans was 1.15%, compared to 1.05% at December 31, 2007. For the fourth quarter and full year 2008, the Bank had net charge offs of $742 thousand and $1.3 million, respectively. Based on the analysis of classified loan migration trends and independent third-party reviews of the loan portfolio, management believes that its calculation of the adequacy of the allowance for loan losses has accurately captured the inherent risk in the Bank’s portfolio.

“In line with our cautionary comments described in our third quarter conference call, our total nonperforming assets increased slightly during the fourth quarter 2008. We are continuing to dispose of our foreclosed properties in an orderly and efficient fashion with no significant impact on the Bank’s earnings,” stated Casey Hogan, executive vice president and chief credit officer. “Nevertheless, considering the continuing deterioration in economic conditions, we determined it was prudent to continue to add to the allowance to maintain an appropriate unallocated reserve level.” added Hogan.

Growth in noninterest expense abated during fourth quarter.  Noninterest expense of $7.4 million in fourth quarter 2008 was down $62 thousand from expenses reported for third quarter 2008.

Net income for the full year 2008 was $12.9 million, an increase of $4.0 thousand over net income reported for the full year 2007. Earnings per diluted share were $1.08, the same as reported for the full year 2007.  Return on average assets for years 2008 and 2007 were 1.27% and 1.43%, respectively. Return on average equity and return on average tangible equity were 11.57% and 14.56% for 2008, respectively, compared to 12.55% and 16.23%, respectively, for the year 2007.

Fourth Quarter 2008 Highlights:

·   Through disciplined credit practices reported nonperforming assets to total assets of 0.71%.

·   Excellent loan growth of $32.2 million for the quarter and $134.4 million for the year.

·   Continued payment of the $0.10 per share quarterly dividend that when annualized represents a 14.3% increase over 2007 cash dividends.

·   Achieved strong net interest margin of 5.28% for the fourth quarter 2008 and 5.21% for the year 2008.

·   Recognized as one of Oregon’s most admired financial companies by the Portland Business Journal.

·   Included in FIG Partners Dandy Dozen list for 2009.

Conference Call and Audio Webcast:

Pacific Continental Corporation will conduct a live conference call and audio Webcast for interested parties relating to its results for the fourth quarter and full year 2008, on Wednesday, January 21st at 2:00 p.m. Eastern Time / 11:00 a.m. Pacific Time. To listen to the conference call, interested parties should call (866) 292-1418 and provide the pass code: “Pacific Continental fourth quarter earnings.” The Webcast will be available via the Internet at 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 will be available within twenty-four hours following the live Webcast and archived for one year on the Pacific Continental Web site. Any questions regarding the conference call presentation or Webcast should be directed to Michael Reynolds 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. Pacific Continental 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 metropolitan areas including Seattle, Portland, and Eugene. Pacific Continental targets the banking needs of community-based businesses, professional service providers, and nonprofit organizations; and provides private banking services for business owners and executives. Pacific Continental has rewarded its shareholders with consecutive cash dividends for twenty-four years.

Since its founding in 1972 Pacific Continental Bank has been honored with numerous awards from business and community organizations: in June 2008 – for the seventh consecutive year - the Seattle Times named Pacific Continental to its  “Northwest 100” ranking of top publicly rated companies in the Pacific Northwest; in February 2008, Oregon Business magazine recognized Pacific Continental as the top ranked financial institution to work for in the state, marking the eighth consecutive year Pacific Continental has been recognized as one of the Top 100 Companies to Work for In Oregon; and in 2007, The Portland Business Journal recognized Pacific Continental as One of the Ten Most Admired Companies in Oregon.

Pacific Continental Corporation's shares are listed on the NASDAQ Global Select Market under the symbol "PCBK”; additionally, PCBK is listed in the Russell 2000 Index. Supplementary information about Pacific Continental can be found online at www.therightbank.com.

Pacific Continental Safe Harbor

This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected, including but not limited to the following: the concentration of loans of the company's banking subsidiary, particularly with respect to commercial and residential real estate lending; professional and dental practitioners; a continued decline in the housing and real estate market; changes in the regulatory environment and increases in associated costs, particularly ongoing compliance expenses and resource allocation needs; vendor quality and efficiency; employee recruitment and retention, specifically in the Bank's Portland and Seattle markets; the company's ability to control risks associated with rapidly changing technology both from an internal perspective as well as for external providers; increased competition among financial institutions; fluctuating interest rate environments; a tightening of available credit, and similar matters. Readers are cautioned not to place undue reliance on the forward-looking statements. Pacific Continental Corporation undertakes no obligation to publicly revise or update the forward-looking statements to reflect events or circumstances that arise after the date of this release. Readers should carefully review any risk factors described in Pacific Continental’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents, including any Current Reports on Form 8-K furnished to or filed from time to time with the Securities Exchange Commission. This statement is included for the express purpose of invoking PSLRA's safe harbor provisions.

###

PACIFIC CONTINENTAL CORPORATION

CONSOLIDATED INCOME STATEMENTS

Amounts in $ 000's, Except for Per Share Data

(Unaudited)

	Three months ended December 31,						Twelve months ended December 31,
	2008			2007			2008			2007
Interest and dividend income
Loans	$	15,866		$	16,669		$	63,047		$	67,122
Securities		717			664			2,787			1,973
Dividends on Federal Home Loan Bank stock		(41	)		7			91			21
Federal funds sold & Interest-bearing deposits with banks		2			10			20			50
		16,544			17,350			65,945			69,166
Interest expense
Deposits		2,298			4,222			10,142			18,572
Federal Home Loan Bank & Federal Reserve borrowings		904			1,611			5,456			6,160
Junior subordinated debentures		125			128			498			508
Federal funds purchased		23			196			578			500
		3,350			6,157			16,674			25,740
Net interest income		13,194			11,193			49,271			43,426
Provision for loan losses		1,050			275			3,600			725
Net interest income after provision for loan losses		12,144			10,918			45,671			42,701
Noninterest income
Service charges on deposit accounts		459			377			1,676			1,409
Other fee income, principally bankcard		445			424			1,823			1,630
Loan servicing fees		17			25			85			99
Mortgage banking income		64			91			355			370
Other noninterest income		57			113			330			417
		1,042			1,030			4,269			3,925
Noninterest expense
Salaries and employee benefits		4,384			3,894			18,089			15,667
Premises and equipment		1,023			950			3,990			3,281
Bankcard processing		125			127			546			524
Business development		481			357			1,447			1,487
Other noninterest expense		1,422			1,263			5,490			4,902
		7,435			6,591			29,562			25,861
Income before provision for income taxes		5,751			5,357			20,378			20,765
Provision for income taxes		1,918			2,050			7,439			7,830
Net income	$	3,833		$	3,307		$	12,939		$	12,935
Earnings per share
Basic	$	0.32		$	0.28		$	1.08		$	1.09
Diluted	$	0.32		$	0.28		$	1.08		$	1.08
Weighted average shares outstanding
Basic		12,039			11,896			11,980			11,830
Common stock equivalents
attributable to stock-based awards		56			99			48			111
Diluted		12,095			11,995			12,028			11,941
PERFORMANCE RATIOS
Return on average assets		1.43	%		1.41	%		1.27	%		1.43	%
Return on average equity (book)		13.26	%		12.22	%		11.57	%		12.55	%
Return on average equity (tangible) (1)		16.57	%		15.58	%		14.56	%		16.23	%
Net interest margin		5.28	%		5.15	%		5.21	%		5.22	%
Efficiency ratio (2)		52.23	%		53.92	%		55.21	%		54.62	%

PACIFIC CONTINENTAL CORPORATION

CONSOLIDATED BALANCE SHEETS

Amounts in $  000’s

(Unaudited)

	December 31,			December 31,
	2008			2007
ASSETS
Cash and due from banks	$	20,172		$	23,809
Federal funds sold		69			1,857
Interest-bearing deposits with banks		214			410
Total cash and cash equivalents		20,455			26,076
Securities available-for-sale		54,933			53,994
Loans held for sale		410			-
Loans, less allowance for loan losses		945,377			813,647
Interest receivable		4,021			3,652
Federal Home Loan Bank stock		10,652			3,795
Property, net of accumulated depreciation		20,763			20,876
Goodwill and other intangible assets		22,904			23,127
Other assets		11,328			4,104
Total assets	$	1,090,843		$	949,271
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing demand	$	178,957		$	175,941
Savings and interest-bearing checking		392,935			401,714
Time $100,000 and over		67,095			31,856
Other time		83,450			34,913
Total deposits		722,437			644,424
Federal funds purchased		24,000			5,360
Federal Home Loan Bank and Federal Reserve borrowings		214,500			179,500
Junior subordinated debentures		8,248			8,248
Accrued interest and other payables		5,493			4,230
Total liabilities		974,678			841,762
Stockholders' equity
Common stock, 25,000,000 shares authorized		80,019			77,909
Retained earnings		37,764			29,622
Accumulated other comprehensive loss		(1,618	)		(22	)
		116,165			107,509
Total liabilities and stockholders’ equity	$	1,090,843		$	949,271
OTHER FINANCIAL DATA
Shares outstanding at end of period		12,079,691			11,934,866
Stockholder's equity (tangible) (1)	$	93,261		$	84,382
Book value	$	9.62		$	9.01
Tangible book value	$	7.72		$	7.07

PACIFIC CONTINENTAL CORPORATION

SELECTED OTHER FINANCIAL INFORMATION AND RATIOS

Amounts in $  000’s

(Unaudited)

	Quarters Ended						Years Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
LOANS BY TYPE (net of fees)
Real estate secured loans:
Multifamily residential	$	55,648		$	39,925
Residential 1-4 family		79,162			51,959
Residential 1-4 family construction		74,745			96,918
Other construction		147,929			126,809
Commercial real estate		354,668			306,161
Other		4,675			3,999
Total real estate loans		716,827			625,771
Commercial loans		225,828			186,619
Consumer loans		7,483			8,225
Other loans		6,219			1,707
Total Loans	$	956,357		$	822,322
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period	$	10,672		$	8,734		$	8,675		$	8,284
Provision for loan losses		1,050			275			3,600			725
Loan charge offs		(754	)		(335	)		(1,477	)		(396	)
Loan recoveries		12			1			182			62
Net (charge offs) recoveries		(742	)		(334	)		(1,295	)		(334	)
Balance at end of period	$	10,980		$	8,675		$	10,980		$	8,675
NONPERFORMING ASSETS
Non-accrual loans	$	4,137		$	4,122
90-day past due loans		-			-
Gross nonperforming loans		4,137			4,122
Government guarantees on non-accrual and 90-day
past due loans		(239	)		(451	)
Nonperforming loans, net of government guarantees		3,898			3,671
Other real estate owned		3,806			423
Nonperforming assets, net of government guarantees	$	7,704		$	4,094
LOAN QUALITY RATIOS
Allowance for loan losses as a percentage of total loans
outstanding, net of loans held for sale		1.15	%		1.05	%
Allowance for loan losses as a percentage of total
nonperforming loans, net of government guarantees		281.68	%		236.31	%
Net loan charge offs (recoveries) as a percentage of
average loans, annualized		0.31	%		0.16	%		0.15	%		0.04	%
Nonperforming loans as a percentage of total loans		0.43	%		0.50	%
Nonperforming assets as a percentage of total assets		0.71	%		0.43	%

PACIFIC CONTINENTAL CORPORATION

SELECTED OTHER FINANCIAL INFORMATION AND RATIOS (Continued)

Amounts in $  000’s

	Quarters Ended						Years Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
BALANCE SHEET AVERAGES
Loans	$	940,307		$	812,870		$	892,532		$	793,756
Allowance for loan losses		(10,785	)		(8,871	)		(9,790	)		(8,624	)
Loans, net of allowance		929,522			803,999			882,742			785,132
Securities and short-term deposits		63,656			58,812			63,114			47,319
Earning assets		993,178			862,811			945,856			832,451
Non-interest-earning assets		76,600			70,563			73,184			71,481
Assets	$	1,069,778		$	933,374		$	1,019,040		$	903,932
Interest-bearing core deposits (3)	$	447,978		$	437,808		$	443,452		$	421,678
Non-interest-bearing core deposits (3)		170,897			173,706			169,792			169,035
Core deposits (3)		618,875			611,514			613,244			590,713
Non-core interest-bearing deposits		72,052			49,588			56,380			63,918
Deposits		690,927			661,102			669,624			654,631
Borrowings		256,852			160,575			232,634			141,973
Non-interest-bearing liabilities		7,040			4,326			4,914			4,239
Liabilities		954,819			826,003			907,172			800,843
Stockholders' equity (book)		114,959			107,371			111,868			103,089
Liabilities and equity	$	1,069,778		$	933,374		$	1,019,040		$	903,932
Stockholders' equity (tangible) (1)	$	92,024		$	84,212		$	88,850		$	79,713
SELECTED MARKET DATA
Eugene market loans, net of fees	$	237,604		$	217,962
Portland market loans, net of fees		432,961			389,053
Seattle market loans, net of fees		285,792			215,307
Total loans, net of fees	$	956,357		$	822,322
Eugene market core deposits (3)	$	406,098		$	405,351
Portland market core deposits (3)		110,287			109,698
Seattle market core deposits (3)		99,447			100,843
Total core deposits (3)		615,832			615,892
Other deposits		106,605			28,532
Total	$	722,437		$	644,424
Eugene market core deposits, average (3)	$	402,125		$	393,030		$	402,129		$	385,411
Portland market core deposits, average (3)		115,234			121,687			113,834			119,872
Seattle market core deposits, average  (3)		101,516			96,797			97,281			85,430
Total core deposits, average  (3)		618,875			611,514			613,244			590,713
Other deposits, average		72,052			49,588			56,380			63,918
Total	$	690,927		$	661,102		$	669,624		$	654,631
NET INTEREST MARGIN RECONCILIATION
Yield on average loans		6.79	%		8.23	%		7.14	%		8.55	%
Yield on average securities		4.24	%		4.59	%		4.59	%		4.32	%
Yield on average earning assets		6.63	%		7.98	%		6.97	%		8.31	%
Rate on average interest-bearing core deposits		1.56	%		3.24	%		1.85	%		3.61	%
Rate on average interest-bearing non-core deposits		2.96	%		5.21	%		3.46	%		5.24	%
Rate on average interest-bearing deposits		1.76	%		3.44	%		3.72	%		1.62	%
Rate on average borrowings		1.63	%		4.78	%		2.81	%		5.05	%
Cost of interest-bearing funds		1.72	%		3.77	%		2.28	%		4.10	%
Interest rate spread		4.91	%		4.21	%		4.70	%		4.21	%
Net interest margin		5.28	%		5.15	%		5.21	%		5.22	%
(1) Tangible equity excludes goodwill and core deposit intangible related to acquisitions.
(2) Efficiency ratio is noninterest expense divided by operating revenues. Operating revenues are net interest income plus noninterest income.
(3) Core deposits include all demand, savings, & interest checking accounts, plus all local time deposits including local time deposits in excess of $100,000.