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):

October 17, 2012

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 October 17, 2012, Pacific Continental Corporation (the “Company”) issued a press release announcing earnings for the third quarter ended September 30, 2012. 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 purposes 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) Not Applicable

(d) Exhibits

99.1 Press Release dated October 17, 2012, announcing earnings for the third quarter ended September 30, 2012

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: October 17, 2012

PACIFIC CONTINENTAL CORPORATION
By:	/s/ Michael A. Reynolds
	Michael A. Reynolds Executive Vice President Chief Financial Officer

2

EX-99.1

Exhibit 99.1

NEWS RELEASE

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

FOR IMMEDIATE RELEASE

Pacific Continental Corporation Reports Third Quarter 2012 Results

Loan Growth and Continued Credit Quality Improvement Drive Quarterly Results.

EUGENE, Ore., October 17, 2012 — Pacific Continental Corporation (Nasdaq: PCBK), the holding company of Pacific Continental Bank, today reported financial results for the third quarter 2012.

Recent highlights:

• Net income increased 32.8% over prior year third quarter.

• Loan growth continues for the third consecutive quarter.

• Nonperforming and classified assets continued their contraction.

• Net loan recoveries recorded during the quarter.

• Increased quarterly cash dividend to $0.07 per share and declared special cash dividend of $0.04 per share.

• Continued repurchase of shares with total of 166,612 shares repurchased during current quarter and 576,537 shares repurchased since the inception of the stock repurchase plan.

• Total risk-based capital ratio of 18.62%, significantly above the 10.0% minimum for “well-capitalized” designation.

Net Income

Net income for third quarter 2012 was $3.4 million, up 32.8% over third quarter 2011. Earnings per diluted share for the current quarter were $0.19 compared to $0.14 for the same quarter last year. Return on average assets and return on average tangible equity for third quarter 2012 were 1.03% and 8.56%, up from the 0.83% and 6.56% reported for third quarter 2011. The efficiency ratio for third quarter 2012 was 62.70%, relatively unchanged from third quarter 2011.

“Current quarter results reflect the success we have had in executing our strategic initiatives,” said Hal Brown, chief executive officer. “Accelerating loan growth, continued credit quality improvement and the incremental leveraging of our shareholder equity suggests strengthening performance and supports the board’s decision to increase the cash dividend,” added Brown.

Year-to-date September 30, 2012, net income was $9.3 million, up $3.1 million or 49.7% over the same period last year. Year-to-date earnings per diluted share were $0.51 for the current year compared to $0.34 for the same period last year, an increase of 50.0%.

Loan growth accelerates

Outstanding gross loans at September 30, 2012, were $837.0 million, up $10.2 million during the third quarter. Excluding the $13.2 million in loans transferred to other real estate during the quarter, gross loans increased $23.4 million or 3.2% during the third quarter. Growth in construction, owner-occupied commercial real estate and commercial loans during the third quarter more than offset contraction in multifamily and residential real estate loans. Growth in commercial loans was especially strong, increasing 4.6% during the quarter and 19.0% from third quarter 2011. The bank continued to enjoy success in lending to health care professionals. Dental practice loans, in particular, represented 29.3% of the total loan portfolio at September 30, 2012 and grew 5.4% during the third quarter and 25.2% since September 30, 2011.

“Our strong capital position and focused niche strategy have proven to be successful in an increasingly competitive market and still challenging economic environment,” said Roger Busse, president and chief operating officer. “Our loan and deposit pipelines continue to improve and we are optimistic for growth in future quarters,” added Busse.

Capital management

In February 2012, the Company’s board of directors authorized the repurchase of up to five percent of the Company’s shares issued and outstanding or approximately 922,000 shares, with the purchases to take place over 12 months. During the third quarter 2012, the Company repurchased 166,612 shares at a weighted average price of $9.00 per share. Since the inception of the repurchase plan, the Company repurchased 576,537 shares at a weighted average price of $8.82 per share. Share repurchases and cash dividends during the first three quarters of the year combined to keep capital levels relatively unchanged from prior year-end, a strategy that is expected to continue throughout the remainder of 2012.

The Company’s capital ratios continue to be well above the minimum FDIC “well-capitalized” designated levels. At September 30, 2012, the Company’s Tier 1 leverage ratio, Tier 1 risk-based capital ratio, and Total risk-based capital ratio were 12.53%, 17.37%, and 18.62% as compared to 13.09%, 17.97%, and 19.22% at December 31, 2011. The FDIC’s current minimum “well-capitalized” designation ratios are 5.00%, 6.00%, and 10.00%, respectively.

Classified assets, provisioning and loan statistics

Classified assets continued a two-year trend of decline and at September 30, 2012, totaled $58.0 million, a decrease of $2.3 million from the end of the prior quarter and down $10.5 million and $23.0 million from December 31, 2011, and September 30, 2011, respectively. Nonperforming assets, a subcategory of classified assets, totaled $28.9 million at September 30, 2012, or 2.14% of total assets, a decrease from December 31, 2011, and September 30, 2011, ratios of 2.92% and 3.56%, respectively.

Loans past-due 30-89 days were 0.47% of total loans at September 30, 2012, compared to 0.41% of total loans at December 31, 2011. This is the thirteenth consecutive quarter in which this ratio was near or below one percent.

“We are pleased with the continued reduction in our classified and nonperforming assets,” said Casey Hogan, chief credit officer. “Based on our pending resolutions and on-going collection activities, we remain optimistic this trend will continue throughout the remainder of 2012,” added Hogan.

The Company recorded no provision for loan losses in the third quarter 2012, compared to $600 thousand and $1.3 million recorded in first and second quarters of 2012, respectively. The lower provision for loan losses reflects improved credit quality and recoveries recorded during the quarter. During the third quarter 2012, the Company had net loan recoveries of $108 thousand compared to net loan charge offs of $412 thousand and $254 thousand in the first quarter and second quarter of 2012, respectively. For the first nine months of 2012, the Company recorded net loan charge offs of $558 thousand or annualized 0.09% of average loans.

The allowance for loan losses as a percentage of outstanding loans at September 30, 2012, was 1.95% compared to 1.85% and 1.82% at December 31, 2011, and September 30, 2011, respectively.

Core deposit activity

Period-end Company-defined core deposits at September 30, 2012, increased by $30.8 million from the end of second quarter 2012 and were relatively unchanged from December 31, 2011. The Company experienced a more typical seasonal core deposit pattern where outflows historically occurred during the first half of the year followed by growth during the second half of the year. At September 30, 2012, noninterest-bearing demand deposits totaled $304 million, an 8.7% increase from that of a year ago, and now represent 34.4% of core deposits. Average core deposits, a measure that eliminates daily volatility, for the third quarter 2012 were $879.6 million, up $20.8 million over second quarter 2012.

Net interest margin

The third quarter 2012 net interest margin was 4.16%, a decline of 15 and 40 basis points from the net interest margins reported for second quarter 2012 and third quarter 2011, respectively. The contraction in the net interest margin was due to lower yields on the Company’s loan and securities portfolio. Loan yields continued to contract during the third quarter 2012 when compared to the prior quarter and prior year as new loan production in this historically low interest rate environment was booked at yields lower than the average yield on the existing portfolio. The yield on the securities portfolio was negatively impacted by low long-term interest rates that accelerated prepayments on the agency mortgage-backed segment of the portfolio, thus increasing the amortization of premiums and reinvestment of cash flow from the portfolio at lower rates than the average yield on the portfolio.

Noninterest income and expense

Third quarter noninterest income was $1.4 million, relatively unchanged from the prior quarter and was down $316 thousand from the third quarter last year. The decline from last year was primarily due to $359 thousand of gains on the sale of securities that occurred during the third quarter 2011. Excluding the third quarter 2011 gain on the sale of securities, second quarter 2012 noninterest income was up slightly over the same quarter last year. Year-to-date noninterest income was $4.4 million, down $189 thousand or 4.27% over last year. The decline was the result of $825 thousand in gains on the sale of securities during the first nine months of last year. Excluding the 2011 gain on sale of securities, noninterest income for the first nine months of 2012 was up $636 thousand or 17.1% over the same period last year.

Noninterest expense in third quarter 2012 was relatively unchanged from the prior quarter and declined by $209 thousand or 2.3% from third quarter 2011. Year-to-date noninterest expense of $26.2 million was down $1.1 million or 4.0% from the same period last year. The decrease in noninterest expense compared to the prior year was due to reductions in FDIC insurance assessments, other real estate expense, and costs, such as legal fees related to collection of problem assets. A portion of the decline in these three categories was offset by an increase in personnel expense.

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 2012 on Thursday, October 18, 2012, at 11:00 a.m. Pacific Time / 2:00 p.m. Eastern Time. 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 $1.3 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” 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 and future suggested problem loan migration. 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: the high concentration of loans of the Company’s banking subsidiary in commercial and residential real estate lending; 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 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; increased competition among financial institutions; fluctuating interest rate environments; and a tightening of available credit. 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,
	2012			2011			2012			2011
Interest and dividend income
Loans	$	11,971		$	12,583		$	36,089		$	38,146
Securities		1,910			2,415			6,048			6,710
Federal funds sold & interest-bearing deposits with banks		2			1			4			5
		13,883			14,999			42,141			44,861
Interest expense
Deposits		992			1,628			3,149			5,325
Federal Home Loan Bank & Federal Reserve borrowings		364			459			1,259			1,412
Junior subordinated debentures		38			34			116			99
Federal funds purchased		4			11			20			32
		1,398			2,132			4,544			6,868
Net interest income		12,485			12,867			37,597			37,993
Provision for loan losses		—			1,750			1,900			5,900
Net interest income after provision for loan losses		12,485			11,117			35,697			32,093
Noninterest income
Service charges on deposit accounts		463			462			1,359			1,328
Other fee income, principally bankcard		408			402			1,205			1,207
Loan servicing fees		20			27			59			82
Mortgage banking income		—			50			72			124
Gain on sale of investment securities		—			359			—			825
Bank-owned life insurance income		157			—			432			—
Other noninterest income		367			431			1,231			981
		1,415			1,731			4,358			4,547
Noninterest expense
Salaries and employee benefits		4,720			4,691			14,721			14,136
Premises and equipment		838			861			2,553			2,605
Bankcard processing		147			155			440			472
Business development		411			350			1,181			1,132
FDIC insurance assessment		285			381			814			1,268
Other real estate expense		466			734			1,082			2,146
Other noninterest expense		1,848			1,752			5,407			5,531
		8,715			8,924			26,198			27,290
Income before provision for income taxes		5,185			3,924			13,857			9,350
Provision for income taxes		1,747			1,336			4,587			3,156
Net income	$	3,438		$	2,588		$	9,270		$	6,194
Earnings per share:
Basic	$	0.19		$	0.14		$	0.51		$	0.34
Diluted	$	0.19		$	0.14		$	0.51		$	0.34
Weighted average shares outstanding:
Basic		17,978,081			18,433,084			18,166,377			18,425,344
Common stock equivalents attributable to stock-based awards		152,964			15,871			152,957			18,637
Diluted		18,131,045			18,448,955			18,319,334			18,443,981
PERFORMANCE RATIOS
Return on average assets		1.03	%		0.83	%		0.95	%		0.68	%
Return on average equity (book)		7.52	%		5.74	%		6.85	%		4.71	%
Return on average equity (tangible) (1)		8.56	%		6.56	%		7.81	%		5.40	%
Net interest margin (2)		4.16	%		4.56	%		4.28	%		4.61	%
Efficiency ratio (3)		62.70	%		61.13	%		62.44	%		64.15	%

⁽¹⁾  Tangible equity excludes goodwill and core deposit intangible assets related to acquisitions.

⁽²⁾  Net interest margin is reported on a tax-equivalent yield basis at a 35% tax rate.

⁽³⁾  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,
	2012			2011			2011
ASSETS
Cash and due from banks	$	20,840		$	19,807		$	16,896
Interest-bearing deposits with banks		53			52			69
Total cash and cash equivalents		20,893			19,859			16,965
Securities available-for-sale		406,175			346,542			340,118
Loans held-for-sale		—			1,058			400
Loans, less allowance for loan losses and net deferred fees		819,922			805,211			812,525
Interest receivable		4,861			4,725			4,243
Federal Home Loan Bank stock		10,557			10,652			10,652
Property and equipment, net of accumulated depreciation		19,478			20,177			20,379
Goodwill and intangible assets		22,068			22,235			22,291
Deferred tax asset		6,803			7,308			7,428
Taxes receivable		—			1,671			—
Other real estate owned		19,235			11,000			11,663
Prepaid FDIC assessment		1,998			2,782			3,164
Bank-owned life insurance		15,469			15,038			—
Other assets		2,963			1,974			1,743
Total assets	$	1,350,422		$	1,270,232		$	1,251,571
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Noninterest-bearing demand	$	304,016		$	278,576		$	279,733
Savings and interest-bearing checking		520,218			545,856			537,009
Time $100,000 and over		77,790			72,436			68,330
Other time		78,138			68,386			66,545
Total deposits		980,162			965,254			951,617
Federal funds and overnight funds purchased		9,385			12,300			8,185
Federal Home Loan Bank borrowings		165,000			101,500			98,500
Junior subordinated debentures		8,248			8,248			8,248
Accrued interest and other payables		4,848			4,064			3,951
Total liabilities		1,167,643			1,091,366			1,070,501
Shareholders’ equity
Common stock: 50,000,000 shares authorized. Shares issued and outstanding: 17,900,188 at September 30, 2012, 18,435,084 at December 31, 2011 and 18,433,084 at September 30, 2011		133,385			137,844			137,660
Retained earnings		43,113			37,468			39,242
Accumulated other comprehensive income		6,281			3,554			4,168
		182,779			178,866			181,070
Total liabilities and shareholders’ equity	$	1,350,422		$	1,270,232		$	1,251,571
CAPITAL RATIOS
Total capital (to risk weighted assets)		18.62	%		19.22	%		18.89	%
Tier I capital (to risk weighted assets)		17.37	%		17.97	%		17.64	%
Tier I capital (to leverage assets)		12.53	%		13.09	%		13.48	%
Tangible common equity (to tangible assets)(1)		12.10	%		12.55	%		12.92	%
Tangible common equity (to risk-weighted assets)(1)		17.18	%		17.47	%		17.22	%
OTHER FINANCIAL DATA
Shares outstanding at end of period		17,900,188			18,435,084			18,433,084
Tangible shareholders’ equity(1)	$	160,711		$	156,631		$	158,779
Book value per share	$	10.21		$	9.70		$	9.82
Tangible book value per share	$	8.98		$	8.50		$	8.61

⁽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)

	September 30,			December 31,			September 30,
	2012			2011			2011
LOANS BY TYPE
Real estate secured loans:
Permanent loans:
Multifamily residential	$	43,080		$	51,897		$	54,029
Residential 1-4 family		53,556			61,717			62,726
Owner-occupied commercial		222,374			207,008			209,702
Nonowner-occupied commercial		140,104			157,844			166,969
Total permanent real estate loans		459,114			478,466			493,426
Construction loans:
Multifamily residential		12,794			2,574			1,158
Residential 1-4 family		18,108			17,960			17,865
Commercial real estate		15,817			10,901			13,368
Commercial bare land and acquisition & development		9,887			19,496			24,987
Residential bare land and acquisition & development		9,108			12,707			13,034
Total construction real estate loans		65,714			63,638			70,412
Total real estate loans		524,828			542,104			563,838
Commercial loans		306,870			272,600			257,889
Consumer loans		3,941			4,569			5,021
Other loans		1,334			1,556			1,762
Gross loans		836,973			820,829			828,510
Deferred loan origination fees		(768	)		(677	)		(698	)
		836,205			820,152			827,812
Allowance for loan losses		(16,283	)		(14,941	)		(15,287	)
	$	819,922		$	805,211		$	812,525
Real estate loans held-for-sale	$	—		$	1,058		$	400
	Three months ended						Nine months ended
	September 30,			September 30,			September 30,			September 30,
	2012			2011			2012			2011
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period	$	16,175		$	15,326		$	14,941		$	16,570
Provision for loan losses		—			1,750			1,900			5,900
Loan charge offs		(1,140	)		(2,208	)		(2,809	)		(8,085	)
Loan recoveries		1,248			419			2,251			902
Net (charge offs) recoveries		108			(1,789	)		(558	)		(7,183	)
Balance at end of period	$	16,283		$	15,287		$	16,283		$	15,287

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,
	2012			2011			2012			2011
BALANCE SHEET AVERAGES
Loans(1)	$	832,845		$	824,084		$	828,283		$	836,223
Allowance for loan losses		(16,151	)		(15,193	)		(16,002	)		(15,889	)
Loans, net of allowance		816,694			808,891			812,281			820,334
Securities and short-term deposits		399,224			323,996			379,338			292,171
Earning assets		1,215,918			1,132,887			1,191,619			1,112,505
Noninterest-earning assets		111,159			101,121			111,707			103,763
Assets	$	1,327,077		$	1,234,008		$	1,303,326		$	1,216,268
Interest-bearing core deposits(2)	$	579,469		$	612,576		$	578,648		$	622,038
Noninterest-bearing core deposits(2)		300,091			274,808			290,847			260,108
Core deposits(2)		879,560			887,384			869,495			882,146
Noncore interest-bearing deposits		99,852			71,940			92,827			62,517
Deposits		979,412			959,324			962,322			944,663
Borrowings		161,215			92,295			156,001			92,523
Other noninterest-bearing liabilities		4,606			3,493			4,252			3,281
Liabilities		1,145,233			1,055,112			1,122,575			1,040,467
Shareholders’ equity (book)		181,844			178,896			180,751			175,801
Liabilities and equity	$	1,327,077		$	1,234,008		$	1,303,326		$	1,216,268
Shareholders’ equity (tangible)(3)	$	159,756		$	156,575		$	158,598		$	153,425
SELECTED MARKET DATA
Eugene market gross loans, period end	$	239,245		$	248,525
Portland market gross loans, period end		375,234			374,322
Seattle market gross loans, period end		151,745			167,112
Out of market health care gross loans, period end		69,981			37,853
Total gross loans, period end	$	836,205		$	827,812
Eugene market core deposits, period end(2)	$	512,842		$	514,453
Portland market core deposits, period end(2)		226,576			242,341
Seattle market core deposits, period end(2)		143,196			123,933
Total core deposits, period end(2)		882,614			880,727
Other deposits, period end		97,548			70,890
Total	$	980,162		$	951,617
Eugene market core deposits, average(2)	$	508,927		$	507,644
Portland market core deposits, average(2)		229,913			252,903
Seattle market core deposits, average(2)		140,720			126,837
Total core deposits, average(2)		879,560			887,384
Other deposits, average		99,852			71,940
Total	$	979,412		$	959,324
NET INTEREST MARGIN RECONCILIATION
Yield on average loans		5.83	%		6.17	%		5.93	%		6.22	%
Yield on average securities(4)		2.13	%		3.13	%		2.35	%		3.24	%
Yield on average earning assets(4)		4.62	%		5.30	%		4.79	%		5.44	%
Rate on average interest-bearing core deposits		0.45	%		0.80	%		0.49	%		0.95	%
Rate on average interest-bearing non-core deposits		1.34	%		2.19	%		1.46	%		1.95	%
Rate on average interest-bearing deposits		0.58	%		0.94	%		0.42	%		1.04	%
Rate on average borrowings		1.00	%		2.17	%		1.19	%		2.23	%
Cost of interest-bearing funds		0.66	%		1.09	%		0.73	%		1.18	%
Interest rate spread(4)		3.96	%		4.21	%		4.06	%		4.25	%
Net interest margin(4)		4.16	%		4.56	%		4.28	%		4.61	%

⁽¹⁾  Includes loans held-for sale.

⁽²⁾  Core deposits include all demand, savings, and interest checking accounts plus all local time deposits including local time deposits in excess of $100.

⁽³⁾  Tangible shareholders’ 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 $226 thousand, and $143 thousand for the nine months ended September 30, 2012, and September 30, 2011, respectively.

PACIFIC CONTINENTAL CORPORATION

Nonperforming Assets and Asset Quality Ratios

(In thousands)

(Unaudited)

	September 30,			December 31,			September 30,
	2012			2011			2011
NONPERFORMING ASSETS
Non-accrual loans
Real estate secured loans:
Permanent loans:
Multifamily residential	$	—		$	—		$	—
Residential 1-4 family		2,517			3,426			3,393
Owner-occupied commercial		3,624			5,138			4,704
Nonowner-occupied commercial		—			575			1,313
Total permanent real estate loans		6,141			9,139			9,410
Construction loans:
Multifamily residential		—			—			—
Residential 1-4 family		—			757			1,596
Commercial real estate		—			933			1,500
Commercial bare land and acquisition & development		—			7,837			13,027
Residential bare land and acquisition & development		104			1,929			1,451
Total construction real estate loans		104			11,456			17,574
Total real estate loans		6,245			20,595			26,984
Commercial loans		4,578			5,999			6,732
Total nonaccrual loans		10,823			26,594			33,716
90-days past due and accruing interest		—			—			—
Total nonperforming loans		10,823			26,594			33,716
Nonperforming loans guaranteed by government		(1,123	)		(495	)		(851	)
Net nonperforming loans		9,700			26,099			32,865
Other real estate owned		19,235			11,000			11,663
Total nonperforming assets, net of guaranteed loans	$	28,935		$	37,099		$	44,528
ASSET QUALITY RATIOS
Allowance for loan losses as a percentage of total loans outstanding		1.95	%		1.82	%		1.85	%
Allowance for loan losses as a percentage of total nonperforming loans, net of government guarantees		167.87	%		57.25	%		46.51	%
Net loan charge offs (recoveries) as a percentage of average loans, annualized		-0.05	%		1.74	%		1.15	%
Net nonperforming loans as a percentage of total loans		1.16	%		3.18	%		3.97	%
Nonperforming assets as a percentage of total assets		2.14	%		2.92	%		3.56	%
Consolidated classified asset ratio(1)		32.43	%		38.91	%		45.51	%
Past due as a percentage of total loans (2)		0.47	%		0.41	%		0.59	%

⁽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

Nonperforming Loan Rollforward

(In thousands)

For the period June 30, 2012 Through September 30, 2012

(Unaudited)

	Balance at June 30, 2012		Additions to Non-performing		Net Paydowns			Returns to Performing		Charge-offs			Transfers to OREO			Balance at September 30, 2012
Real estate loans
Multifamily residential	$	—	$	—	$	—		$	—	$	—		$	—		$	—
Residential 1-4 family		3,435		223		(1,025	)		—		(23	)		(93	)		2,517
Owner-occupied commercial		3,952		33		(34	)		—		(31	)		(296	)		3,624
Nonowner-occupied commercial		—		—		—			—		—			—			—
Total real estate loans		7,387		256		(1,059	)		—		(54	)		(389	)		6,141
Construction
Multifamily residential		—		—		—			—		—			—			—
Residential 1-4 family		2,637		52		(2,653	)		—		(36	)		—			—
Commercial real estate		933		6		—			—		—			(939	)		—
Commercial bare land and acquisition & development		8,491		3,472		—			—		(81	)		(11,882	)		—
Residential bare land and acquisition & development		1,157		—		(1,021	)		—		—			(32	)		104
Total construction loans		13,218		3,530		(3,674	)		—		(117	)		(12,853	)		104
Commercial and other		3,089		1,973		(21	)		—		(463	)		—			4,578
Consumer		—		—		—			—		—			—			—
Total	$	23,694	$	5,759	$	(4,754	)	$	—	$	(634	)	$	(13,242	)	$	10,823

PACIFIC CONTINENTAL CORPORATION

Nonperforming Loan Rollforward

(In thousands)

For the period December 31, 2011 Through September 30, 2012

(Unaudited)

	Balance at December 31, 2011		Additions to Non-performing		Net Paydowns			Returns to Performing		Charge-offs			Transfers to OREO			Balance at September 30, 2012
Real estate loans
Multifamily residential	$	—	$	—	$	—		$	—	$	—					$	—
Residential 1-4 family		3,426		1,332		(1,772	)		—		(185	)		(284	)		2,517
Owner-occupied commercial		5,138		419		(1,106	)		—		(531	)		(296	)		3,624
Nonowner-occupied commercial		575		—		(565	)		—		(10	)					—
Total real estate loans		9,139		1,751		(3,443	)		—		(726	)		(580	)		6,141
Construction
Multifamily residential		—		—		—			—		—						—
Residential 1-4 family		757		2,688		(3,341	)		—		(104	)					—
Commercial real estate		933		6		—			—		—			(939	)		—
Commercial bare land and acquisition & development		7,836		4,132		(5	)		—		(81	)		(11,882	)		—
Residential bare land and acquisition & development		1,929		143		(1,773	)		—		(163	)		(32	)		104
Total construction loans		11,455		6,969		(5,119	)		—		(348	)		(12,853	)		104
Commercial and other		5,999		1,973	$	(2,931	)		—		(463	)					4,578
Consumer		—		—		—			—		—			—			—
Total	$	26,593	$	10,693	$	(11,493	)	$	—	$	(1,537	)	$	(13,433	)	$	10,823

PACIFIC CONTINENTAL CORPORATION

Other Real Estate Owned Rollforward

(In thousands)

For the Period June 30, 2012 through September 30, 2012

(Unaudited)

	Balance at June 30, 2012		Additions to OREO		Capitalized Costs		Paydowns/ Sales			Writedowns/ Loss/Gain			Balance at September 30, 2012
Real estate
Multifamily residential	$	—	$	—	$	—	$	—		$	—		$	—
Residential 1-4 family		363		93		—		(247	)		—			209
Owner-occupied commercial		230		296		—		(230	)		—			296
Nonowner-occupied commercial		4,362		—		—		—			—			4,362
Total real estate loans		4,955		389		—		(477	)		—			4,867
Construction
Multifamily residential		—		—		—		—			—			—
Residential 1-4 family		65		—		—		(65	)		—			—
Commercial real estate		1,425		939		—		—			—			2,364
Commercial bare land and acquisition & development		502		11,882		—		—			(399	)		11,985
Residential bare land and acquisition & development		19		32		—		(32	)		—			19
Total construction loans		2,011		12,853		—		(97	)		(399	)		14,368
Commercial and other		—		—		—		—			—			—
Consumer		—		—		—		—			—			—
Total	$	6,966	$	13,242	$	—	$	(574	)	$	(399	)	$	19,235

PACIFIC CONTINENTAL CORPORATION

Other Real Estate Owned Rollforward

(In thousands)

For the Period December 31, 2011 Through September 30, 2012

(Unaudited)

	Balance at		Additions to		Capitalized		Paydowns/			Writedowns/			Balance at
	December 31, 2011		OREO		Costs		Sales			Loss/Gain			September 30, 2012
Real estate
Multifamily residential	$	—	$	—	$	—	$	—		$	—		$	—
Residential 1-4 family		3,242		284		—		(3,169	)		(148	)		209
Owner-occupied commercial		469		296		—		(413	)		(56	)		296
Nonowner-occupied commercial		4,769		—		—		(244	)		(163	)		4,362
Total real estate loans		8,480		580		—		(3,826	)		(367	)		4,867
Construction
Multifamily residential		—		—		—		—			—			—
Residential 1-4 family		234		—		—		(225	)		(9	)		—
Commercial real estate		1,425		939		—		—			—			2,364
Commercial bare land and acquisition & development		819		11,882		—		—			(716	)		11,985
Residential bare land and acquisition & development		42		32		—		(54	)		(1	)		19
Total construction loans		2,520		12,853		—		(279	)		(726	)		14,368
Commercial and other		—		—		—		—			—			—
Consumer		—		—		—		—			—			—
Total	$	11,000	$	13,433	$	—	$	(4,105	)	$	(1,093	)	$	19,235

PACIFIC CONTINENTAL CORPORATION

Aged Analysis of Loans Receivable (Unaudited)

(In thousands)

As of September 30, 2012

					Greater
	30-59 Days		60-89 Days		Than				Total Past
	Past Due		Past Due		90 Days				Due and		Total		Total Loans
	Still Accruing		Still Accruing		Still Accruing		Nonaccrual		Nonaccrual		Current		Receivable
Real estate loans
Multifamily 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
Multifamily 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
Totals	$	3,603	$	340	$	—	$	10,823	$	14,766	$	822,207	$	836,973

PACIFIC CONTINENTAL CORPORATION

Aged Analysis of Loans Receivable (Unaudited)

(In thousands)

As of December 31, 2011

					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
Multifamily residential	$	—	$	—	$	—	$	—	$	—	$	51,897	$	51,897
Residential 1-4 family		251		210		—		3,426		3,887		57,830		61,717
Owner-occupied commercial		151		190		—		5,138		5,479		201,529		207,008
Nonowner-occupied commercial		—		—		—		575		575		157,269		157,844
Total real estate loans		402		400		—		9,139		9,941		468,525		478,466
Construction
Multifamily residential		—		—		—		—		—		2,574		2,574
Residential 1-4 family		67		—		—		757		824		17,136		17,960
Commercial real estate		1,635		—		—		933		2,568		8,333		10,901
Commercial bare land and acquisition & development		—		—		—		7,837		7,837		11,659		19,496
Residential bare land and acquisition & development		52		175		—		1,929		2,156		10,551		12,707
Total construction loans		1,754		175		—		11,456		13,385		50,253		63,638
Commercial and other		634		—				5,999		6,633		267,523		274,156
Consumer		—		—		—		—		—		4,569		4,569
Total	$	2,790	$	575	$	—	$	26,594	$	29,959	$	790,870	$	820,829

PACIFIC CONTINENTAL CORPORATION

Credit Quality Indicators (Unaudited)

(In thousands)

As of September 30, 2012

	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals
Real estate loans
Multifamily 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
Multifamily 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
Totals	$	798,326	$	—	$	38,647	$	—	$	836,973

PACIFIC CONTINENTAL CORPORATION

Credit Quality Indicators (Unaudited)

(In thousands)

As of December 31, 2011

	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals
Real estate loans
Multifamily residential	$	50,547	$	—	$	1,350	$	—	$	51,897
Residential 1-4 family		51,622		—		10,095		—		61,717
Owner-occupied commercial		194,250		—		11,143		1,615		207,008
Nonowner-occupied commercial		154,805		—		3,039		—		157,844
Total real estate loans		451,224		—		25,627		1,615		478,466
Construction
Multifamily residential		2,574		—		—		—		2,574
Residential 1-4 family		14,036		—		3,924		—		17,960
Commercial real estate		7,075		—		3,826		—		10,901
Commercial bare land and acquisition & development		11,000		—		8,496		—		19,496
Residential bare land and acquisition & development		9,929		—		2,778		—		12,707
Total construction loans		44,614		—		19,024		—		63,638
Commercial and other		264,415		—		9,663		78		274,156
Consumer		4,486		—		83		—		4,569
Totals	$	764,739	$	—	$	54,397	$	1,693	$	820,829