10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark one)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2013

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM              TO             

COMMISSION FILE NUMBER 0-30106

PACIFIC CONTINENTAL CORPORATION

(Exact name of registrant as specified in its charter)

OREGON	93-1269184
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No)
111 West 7th Avenue
Eugene, Oregon	97401
(Address of principal executive offices)	(zip code)

(541) 686-8685

(Registrant’s telephone number, including area code)

Securities registered pursuant to section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, No par value per share	NASDAQ Global Select Market

Securities registered pursuant to section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one)

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨	Smaller Reporting Company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant at June 30, 2013 (the last business day of the most recently completed second quarter) was $201,800,909 based on the closing price as quoted on the NASDAQ Global Select Market on that date.

The number of shares outstanding of the registrant’s common stock, no par value, as of February 28, 2014, was 17,895,114.

DOCUMENTS INCORPORATED BY REFERENCE

All or a portion of Items 10 through 14 in Part III of this Form 10-K are incorporated by reference to the Registrant’s definitive proxy statement on Schedule 14A, which will be filed within 120 days after the close of the fiscal year covered by this report on Form 10-K, or if the Registrant’s Schedule 14A is not filed within such period, will be included in an amendment to this Report on Form 10-K which will be filed within such 120 day period.

PACIFIC CONTINENTAL CORPORATION

FORM 10-K

ANNUAL REPORT

TABLE OF CONTENTS

		Page
PART I			3
ITEM 1	Business		3
ITEM 1A	Risk Factors		21
ITEM 1B	Unresolved Staff Comments		29
ITEM 2	Properties		29
ITEM 3	Legal Proceedings		29
ITEM 4	Mine Safety Disclosure		30
PART II			30
ITEM 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		30
ITEM 6	Selected Financial Data		33
ITEM 7	Management’s Discussion and Analysis of Financial Condition and Results of Operation		34
ITEM 7A	Quantitative and Qualitative Disclosures About Market Risk		51
ITEM 8	Financial Statements and Supplementary Data		53
ITEM 9	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		104
ITEM 9A	Controls and Procedures		104
ITEM 9B	Other Information		104
PART III			104
ITEM 10	Directors, Executive Officers and Corporate Governance		104
ITEM 11	Executive Compensation		104
ITEM 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		105
ITEM 13	Certain Relationships and Related Transactions and Director Independence		106
ITEM 14	Principal Accountant Fees and Services		106
PART IV			106
ITEM 15	Exhibits and Financial Statement Schedules		106
SIGNATURES			108

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PART I

ITEM 1 Business

In addition to historical information, this report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding projected results for 2014, the expected interest rate environment, 2014 provision for loan losses, management’s plans, objectives, expectations and intentions that are not historical facts, and other statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “should,” “projects,” “seeks,” “estimates” or words of similar meaning. These forward-looking statements are based on current beliefs and expectations of management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations in the forward-looking statements, including those set forth in this report, or the documents incorporated by reference:

• Local and national economic conditions could be less favorable than expected or could have a more direct and pronounced effect on us than expected and adversely affect our ability to continue growth at historical rates and maintain the quality of our earning assets.

• The local housing or real estate market could continue to decline.

• The risks presented by an economic recession, which could adversely affect credit quality, collateral values, including real estate collateral, investment values, liquidity and loan originations and loan portfolio delinquency rates.

• Our concentration in loans to dental professionals exposes us to the risks affecting dental practices in general, including Medicaid and Medicare reimbursement programs and changes due to the Affordable Care Act.

• Interest rate changes could significantly reduce net interest income and negatively affect funding sources.

• Projected business increases following any future strategic expansion or opening of new branches could be lower than expected.

• Competition among financial institutions could increase significantly.

• The goodwill we have recorded in connection with acquisitions could become impaired, which may have an adverse impact on our earnings and capital.

• The reputation of the financial services industry could deteriorate, which could adversely affect our ability to access markets for funding and to acquire and retain customers.

• The efficiencies we may expect to receive from any investments in personnel, acquisitions and infrastructure may not be realized.

• The level of nonperforming assets and charge-offs or changes in the estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements may increase.

• Changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, executive compensation and insurance) could have a material adverse effect on our business, financial condition and results of operations.

• Acts of war or terrorism, or natural disasters, such as the effects of pandemic flu, may adversely impact our business.

• The timely development and acceptance of new banking products and services and perceived overall value of these products and services by users may adversely impact our ability to increase market share and control expenses.

• Changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters may impact the results of our operations.

• The costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews may adversely impact our ability to increase market share and control expenses.

• Our success at managing the risks involved in the foregoing items will have a significant impact on our results of operations and future prospects.

Additional factors that could cause actual results to differ materially from those expressed in any forward-looking statements are discussed in Risk Factors in this Form 10-K. Please take into account that forward-looking statements speak only as of the date of this report or documents incorporated by reference. The Company does not undertake any obligation to publicly correct or update any forward-looking statement whether as a result of new information, future events or otherwise.

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General

Pacific Continental Corporation (the “Company” or the “Registrant”) is an Oregon corporation and registered bank holding company headquartered in Eugene, Oregon. The Company was organized on June 7, 1999, pursuant to a holding company reorganization of Pacific Continental Bank, its wholly owned subsidiary (the “Bank”).

The Company’s principal business activities are conducted through the Bank, an Oregon state-chartered bank with deposits insured by the Federal Deposit Insurance Corporation (the “FDIC”). The Bank has no active subsidiaries.

Results and Financial Data

All dollar amounts in the following sections are in thousands except per share amounts or where otherwise indicated.

For the year ended December 31, 2013, the consolidated net income of the Company was $13,767 or $0.76 per diluted share. At December 31, 2013, the consolidated shareholders’ equity of the Company was $179,184 with 17,891,687 shares outstanding and a book value of $10.01 per share. Total assets were $1,449,726. Loans net of allowance for loan losses and unearned fees were $977,928 at December 31, 2013, and represented 67.46% of total assets. Deposits totaled $1,090,981 at year-end 2013, with Company-defined core deposits representing $990,315 or 90.77% of total deposits. Core deposits are defined as all demand, interest checking, money market, savings and local non-public time deposits, including local non-public time deposits in excess of $100. At December 31, 2013, the Company had a Tier 1 leverage capital ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratio, of 11.49%, 14.90% and 16.15%, respectively, all of which are significantly above the minimum “well-capitalized” level for all capital ratios under FDIC guidelines of 5.00%, 6.00% and 10.00%, respectively.

On October 23, 2012, the Company announced the acquisition of Eugene-based Century Bank total with assets of approximately $80,000 for $13,400 in cash, subject to regulatory approval. On February 1, 2013, the Company completed the acquisition of Century Bank.

For more information regarding the Company’s financial condition and results of operations, see Management’s Discussion and Analysis of Financial Condition and Results of Operations and Financial Statements and Supplementary Data in Items 7 and 8 of this Form 10-K.

THE BANK

General

The Bank commenced operations on August 15, 1972. The Bank operates in three primary markets: Portland, Oregon / Southwest Washington, Seattle, Washington, and Eugene, Oregon. At December 31, 2013, the Bank operated fourteen full-service offices in Oregon and Washington and two loan production offices in Washington and Colorado. The primary business strategy of the Bank is to operate in large commercial markets and to provide comprehensive banking and related services tailored to community-based businesses, nonprofit organizations, professional service providers, and banking services for business owners and executives. The Bank emphasizes the diversity of its product lines, high levels of personal service and convenient access through technology typically associated with larger financial institutions, while maintaining local decision-making authority and market knowledge, typical of a community bank. The Bank has developed expertise in lending to dental professionals, and during 2013 further expanded a national dental lending program. More information on the Bank and its banking services can be found on its website (therightbank.com). Information contained on the Bank’s website is not part of this Form 10-K. The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge upon request on the Bank’s website. The reports are also available on the SEC’s website at www.sec.gov. The Bank operates under the banking laws of the State of Oregon, and the rules and regulations of the FDIC. In addition, operations at its branches and other offices in the State of Washington are subject to various consumer protection and other laws of that state.

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THE COMPANY

Primary Market Area

The Company’s primary markets consist of metropolitan Portland, which includes Southwest Washington, and metropolitan Eugene in the State of Oregon and metropolitan Seattle in the State of Washington. During 2013, the Company further expanded its lending to dental professionals, and now has loans to dental professionals in 30 states. The Company has five full-service banking offices in the metropolitan Portland and Southwest Washington area, seven full-service banking offices in the metropolitan Eugene area, and two full-service offices in the metropolitan Seattle area. It also operates loan production offices in Tacoma, Washington and Denver, Colorado. The Company has its headquarters and administrative office in Eugene, Oregon.

Overall, national economic conditions improved during 2013. Historically, the Pacific Northwest, which encompasses all three of the Company’s primary markets, enters a recession late and exits a recession late when compared to other areas of the country. This is particularly true for the Eugene, Oregon market. During 2013, in general, economic conditions improved in all of the Company’s primary markets in line with national general economic conditions; however, certain areas of the Pacific Northwest have fared better than others. In particular, larger metropolitan areas, such as Portland and Seattle have seen more improvement in general economic conditions and job growth than rural areas of Oregon and Washington. As is typical, the economic conditions in the Eugene market have improved, but not at the levels realized in Portland and Seattle.

The unemployment rate for the state of Oregon at December 31, 2013, was 7.30% as compared to 6.70% nationally and has been slowly trending downward since early 2009. Portland area unemployment stood at 6.70% for this same time period, slightly under the state average, and equal to the national average. For Lane County, Oregon (the Eugene market), the unemployment rate was 7.20%, lower than the state average, but above the national average. However, as is true for the national unemployment rate, much of the decline in Lane County is attributable to individuals leaving the work force rather than net growth in jobs. Historically, Lane County unemployment exceeds the state and national averages. On a monthly basis, the University of Oregon, located in Eugene, Oregon, produces the Oregon Index of Economic Indicators using the year 1997 as its beginning base of 100. This index attempts to measure various components of the state of Oregon economy, including labor markets, capital goods orders, and consumer confidence, in order to determine if economic conditions in the state are improving or deteriorating, and provides the probability of a recession. This index indicated that economic activity for the state of Oregon fell to its lowest level during the first quarter 2009 when the index reached 85.0 and then generally trended upward until the second quarter 2012 when it began trending downward, thus suggesting economic activity in the state had declined during the last half of 2012. During 2013, the index slowly trended upward on a quarterly basis, and for December 2013 was at 96.2, an improvement of 3.7% over the prior year-end. The December 2013 index forecasts the probability of a recession in Oregon at 70%.

The unemployment rate for the State of Washington at December 31, 2013, was 6.80%, slightly above the national average and trending downward on a quarterly basis since early 2009. In King County, Washington, which includes the metropolitan Seattle area, the unemployment rate at year-end 2013 was 5.00%, below the state and national averages. The Seattle market in particular demonstrates more economic diversity than the other primary markets in which the Company operates.

At December 31, 2013, approximately 60.00% of the Company’s loan portfolio was secured by real estate, thus the condition and valuation trends of commercial and residential real estate markets in the Pacific Northwest have had a significant impact on the overall credit quality of the Company’s primary assets in that, in the event of default, the value of real estate collateral and its salability is typically the primary source of repayment. Approximately $99,000, or 10.00% of the Company’s loan portfolio, is categorized as residential and commercial construction loans, which also includes land development and acquisition loans. During 2013, the Company experienced an increase in construction lending, primarily commercial real estate construction and multifamily construction.

Real estate markets in the Pacific Northwest were weak during the economic recession and sluggish recovery. During 2013, some signs of improvement or stabilization were noted, particularly in commercial real estate markets. Commercial real estate prices have firmed and appear to be improving based on recent appraisals received by the Company. In all three of the Company’s primary markets, Eugene, Portland, and Seattle, commercial real estate vacancy rates have improved. In addition, a recent study performed by the Company’s in-house appraisal review department noted that Cap Rates on commercial properties in all three markets had declined from their peak in 2009 and appeared to have stabilized. However, the value of commercial bare land and partially developed commercial land in all three markets has been quite weak due to weak demand and continues to be subject to declines in appraised values depending on their location. There is very little demand for new commercial developments due to the economic conditions in the Pacific Northwest, thus there are relatively few comparable sales available to use to assess the value of certain commercial land development properties.

5

Residential housing prices in all three of the Company’s primary markets have stabilized or improved. Small pockets of new residential construction are evident in the Portland and Seattle markets. The value of residential bare land and partially developed residential land in all three markets is similar to commercial real estate values. With somewhat weak demand for large parcels of new residential land development properties, there are fewer comparable sales available, thus these properties may show a significant decline in appraised values.

Competition

Commercial banking in the states of Oregon and Washington is highly competitive. The Company competes with other banks, as well as with savings and loan associations, savings banks, credit unions, mortgage companies, investment banks, insurance companies, and other financial institutions. Banking in Oregon and Washington is dominated by several large banking institutions including U.S. Bank, Wells Fargo Bank, Bank of America, Key Bank and Chase. Together these banks account for a majority of the total commercial and savings bank deposits in Oregon and Washington. These competitors have significantly greater financial resources and offer a much greater number of branch locations. The Company offsets the advantage of the larger competitors by focusing on certain market segments, providing high levels of customization and personal service, and tailoring its technology, products and services to the specific market segments that the Company serves.

In addition to larger institutions, numerous “community” banks and credit unions operated, expanded or moved into the Company’s three primary markets and have developed a similar focus to that of the Company. These institutions have further increased competition in all three of the Company’s primary markets. This number of similar financial institutions and an increased focus by larger institutions in the Company’s primary markets has led to intensified competition in all aspects of the Company’s business, particularly in the area of loan and deposit pricing.

The adoption of the Gramm-Leach-Bliley Act of 1999 (the “GLB Act”) led to further intensification of competition in the financial services industry. The GLB Act eliminated many of the barriers to affiliation among providers of various types of financial services and has permitted business combinations among financial service providers such as banks, insurance companies, securities or brokerage firms and other financial service providers. Additionally, the rapid adoption of financial services through the Internet has reduced or even eliminated many barriers to entry by financial service providers physically located outside our market areas. For example, remote deposit services allow depository companies physically located in other geographical markets to service local businesses with minimal cost of entry. Although the Company has been able to compete effectively in the financial services business in its markets to date, it may not be able to continue to do so in the future.

The financial services industry has experienced widespread consolidation over the last decade. Between 2009 and 2011, 23 banks in Oregon and Washington were closed by the regulators; however only one regulatory closure occurred in the last two years. In 2012 and 2013 consolidation continued in the form of bank acquisitions throughout the Northwest including the recent announcement of the merger between Umpqua Bank and Sterling Bank which is expected to close during the first half of 2014. The Company anticipates consolidation among financial institutions in its market areas will continue. In addition, with the recent passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), smaller financial institutions may find it difficult to continue to operate due to higher anticipated regulatory costs. This may create pressure on these institutions to seek partnerships or mergers with larger companies. The Company seeks acquisition opportunities from time-to-time, including FDIC-assisted transactions, in its existing markets and in new markets of strategic importance. However, other financial institutions aggressively compete against the Company in the acquisition market. Some of these institutions may have greater access to capital markets, larger cash reserves, and stock that is more liquid and more highly valued by the market for use in acquisitions. The Dodd-Frank Act also authorized nationwide de novo branching by national and state banks and certain foreign banks operating in the U.S., which could also result in new entrants to the markets served by the Bank.

In addition, the Company anticipates more competitive pressure for new loans in its markets. While the Bank’s loan demand has improved throughout 2013, healthy banks with ample capital and liquidity are expected to aggressively seek new loan customers. This may cause pressure on loan pricing and make it more difficult to retain existing loan customers or attract new ones and may create compression in the Company’s net interest margin.

6

Services Provided

The Company offers a wide array of financial service products to meet the banking needs of its targeted segments in the market areas served. The Company regularly reviews the profitability and desirability of various product offerings, particularly new product offerings, to assure ongoing viability.

Deposit Services

The Company offers a wide range of deposit services that are typically available in most banks and other financial institutions including checking, savings, money market accounts and time deposits. The transaction accounts and time deposits are tailored to the Company’s primary markets and market segments at rates competitive with those offered in the area. Additional deposits are generated through national networks for institutional deposits. All deposit accounts are insured by the FDIC to the maximum amount permitted by law, currently $250,000 per depositor. The Company provides online cash management, remote deposit capture and banking services to businesses and consumers. The Company also allows 24-hour customer access to deposit and loan information via telephone and online cash management products.

Lending Activities

The Company emphasizes specific areas of lending within its primary markets. Commercial loans are made primarily to professionals, community-based businesses and nonprofit organizations. These loans are available for general operating purposes, acquisition of fixed assets, purchases of equipment and machinery, financing of inventory and accounts receivable and other business purposes. The Company also originates U.S. Small Business Administration (“SBA”) loans and is a national SBA preferred lender.

Within its primary markets, the Company also originates permanent and construction loans financing commercial facilities and pre-sold, custom and speculative home construction. The major thrust of residential construction lending is smaller in-fill construction projects consisting of single-family residences. However, due to the rapid deterioration in the national and regional housing market, the Company severely restricted lending on speculative home construction and significantly reduced its exposure to residential construction lending in 2009. At the same time, due to the economic recession and softness in commercial real estate markets, the Company took steps to reduce its exposure to commercial real estate loans both for construction of new facilities and permanent loans for commercial facilities, particularly investor-owned facilities. During 2013, as commercial real estate prices stabilized, the Company expanded construction financing activity in commercial real estate and multifamily residential construction financing.

Due to the Company’s concentration in real estate secured loans, the Company strategically focuses on increasing its commercial and industrial (“C & I”) loan lending. In particular, the Company has developed a specialty in C & I lending to dental professionals. Loans to dental professionals include loans for such purposes as starting up a practice, acquisition of a practice, equipment financing, owner-occupied facilities, and working capital. Loans for dental office startups are typically SBA loans as these loans represent additional risk. During 2013, the Company further expanded its national dental lending program and now has active loans in 30 states. During 2013 national lending was limited to loans to dental professionals for acquisition of practices by experienced dental professionals, owner-occupied commercial real estate or seasoned practice refinance loans.

The Company makes secured and unsecured loans to individuals for various purposes, including purchases of automobiles, mobile homes, boats, and other recreational vehicles, home improvements, education, and personal investment.

Inter-agency guidelines adopted by federal bank regulators mandate that financial institutions establish real estate lending policies with maximum allowable real estate loan-to-value limits, subject to an allowable amount of non-conforming loans as a percentage of capital. The Board of Directors has approved specific lending policies and procedures for the Company, and management is responsible for implementation of these policies. The lending policies and procedures include guidelines for loan term, loan-to-value ratios that are within established federal banking guidelines, collateral appraisals, and cash flow coverage. The loan policies also vest varying levels of loan authority in management, the Company’s Loan Committee and the Board of Directors. Company management monitors lending activities through management meetings, loan committee meetings, monthly reporting, and periodic review of loans by third-party contractors.

7

Merchant and Card Services

In December 2013, the Company entered into an agreement with Vantiv, a third-party provider of merchant services, to outsource all merchant processing for the Bank’s clients. The agreement provides for a portion of the revenue generated from existing and new clients to be shared with the Company. Through the agreement, the Company’s existing merchant portfolio will be converted onto the Vantiv platform, with the conversion expected to take approximately six months. In addition, the customer service function will be performed by Vantiv, resulting in full-time equivalent employee (“FTE”) savings for the Bank. Overall merchant pre-tax income in 2014 is expected to remain unchanged from the prior year, but the Company does have potential for increased pre-tax income if certain new production goals are met during the year.

Other Services

The Company provides other traditional commercial and consumer banking services, including cash management products for businesses, online banking, safe deposit services, debit and automated teller machine (“ATM”) cards, automated clearing house (“ACH”) transactions, cashier’s checks, notary services and others. The Company is a member of numerous ATM networks and utilizes an outside processor for the processing of these automated transactions. The Company has an agreement with MoneyPass, an ATM provider, which permits Company customers to use MoneyPass ATMs located throughout the country at no charge to the customer.

Employees

At December 31, 2013, the Company employed 290 FTE employees with 23 FTEs in the Seattle market, 57 FTEs in the Portland market, and 76 FTEs in the Eugene market as well as 134 FTEs in administrative functions primarily located in Eugene, Oregon. None of these employees are represented by labor unions, and management believes that the Company’s relationship with its employees is good. The Company emphasizes a positive work environment for its employees, which is validated by recognition from independent third-parties.

During 2013, the Company was recognized for the fourteenth consecutive year by Oregon Business magazine as one of the 100 Best Companies to Work For in Oregon, jumping two places to rank 23rd in the large-company category. Also, the Company was recognized by Seattle Business magazine as one of Washington’s “100 Best Companies to Work For.” The Company ranked 12th in the Companies Headquartered Outside Washington category, the Bank was the only bank to place in the “banking and financial services” segment of this category. Additionally, Portland Business Journal named the Company as one of Oregon’s most admired companies. This was the fifth time the Company was recognized as a top-ten company in the “Financial Services” classification.

Management continually strives to retain and attract top talent as well as provide career development opportunities to enhance skill levels. A number of benefit programs are available to eligible employees, including group medical plans, paid sick leave, paid vacation, group life insurance, 401(k) plans, and equity compensation plans.

Supervision and Regulation

General

The following discussion provides an overview of certain elements of the extensive bank regulatory framework applicable to the Company and the Bank. This regulatory framework is primarily designed for the protection of depositors and other customers of banks, the federal deposit insurance fund and the banking system as a whole, rather than specifically for the protection of shareholders or other investors in the securities of banking organizations in the United States due to the breadth and growth of this regulatory framework, our costs of compliance continue to increase in order to monitor and satisfy these requirements.

To the extent that this section describes statutory and regulatory provisions, it is qualified by reference to those provisions. These statutes and regulations, as well as related policies, are subject to change by Congress, state legislatures and federal and state regulators. Changes in statutes, regulations or regulatory policies applicable to us, including the interpretation or implementation thereof, could have a material adverse effect on our business and operations. In light of the financial crisis, which began in 2008 and 2009, numerous changes to the statutes, regulations or regulatory policies applicable to us and other banks generally have been made or proposed. The full extent to which these changes will impact our business is not yet known. However, our continued efforts to monitor and comply with new regulatory requirements add to the complexity and cost of our business.

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Federal Bank Holding Company Regulation

General. The Company is a bank holding company as defined in the Bank Holding Company Act of 1956, as amended (“BHCA”), and is therefore subject to regulation, supervision and examination by the Federal Reserve. In general, the BHCA limits the business of bank holding companies to owning or controlling banks and engaging in other activities closely related to banking. The Company must file reports with and provide to the Federal Reserve such additional information as it may require. Under the GLB Act, a bank holding company may apply to the Federal Reserve to become a financial holding company, and thereby engage (directly or through a subsidiary) in certain expanded activities deemed financial in nature, such as securities and insurance underwriting. The Company has not applied to the Federal Reserve to become a financial holding company and has no plans to do so.

Holding Company Bank Ownership. The BHCA requires every bank holding company to obtain the prior approval of the Federal Reserve before (i) acquiring, directly or indirectly, ownership or control of any voting shares of another bank or bank holding company if, after such acquisition, it would own or control more than 5 percent of such shares; (ii) acquiring all or substantially all of the assets of another bank or bank holding company; or (iii) merging or consolidating with another bank holding company.

Holding Company Control of Non-Banks. With some exceptions, the BHCA also prohibits a bank holding company from acquiring or retaining direct or indirect ownership or control of more than 5 percent of the voting shares of any company which is not a bank or bank holding company, or from engaging directly or indirectly in activities other than those of banking, managing or controlling banks, or providing services for its subsidiaries. The principal exceptions to these prohibitions involve certain non-bank activities that, by statute or by Federal Reserve regulation or order, have been identified as activities closely related to the business of banking or of managing or controlling banks.

Transactions with Affiliates. Subsidiary banks of a bank holding company are subject to restrictions imposed by the Federal Reserve Act on extensions of credit to the holding company or its subsidiaries, on investments in their securities, and on the use of their securities as collateral for loans to any borrower. These restrictions prevent the Company from borrowing from the Bank unless the loans are secured by marketable obligations of designated amounts. Further, such secured loans and investments by the Bank to or in the Company are limited individually to 10 percent of the Bank’s capital stock and surplus and in the aggregate to 20 percent of the Bank’s capital stock and surplus. The Federal Reserve Act also provides that extensions of credit and other transactions between the Bank and the Company must be on terms and conditions, including credit standards, that are substantially the same or at least as favorable to the Bank as those prevailing at the time for comparable transactions involving other non-affiliated companies, or, in the absence of comparable transactions, on terms and conditions, including credit standards, that in good faith would be offered to, or would apply to, non-affiliated companies. These regulations and restrictions may limit the Company’s ability to obtain funds from the Bank for its cash needs, including funds for payment of dividends, interest and operational expenses.

Tying Arrangements. The Company is prohibited from engaging in certain tie-in arrangements in connection with any extension of credit, sale or lease of property or furnishing of services. For example, with certain exceptions, neither the Company nor its subsidiaries may condition an extension of credit to a customer on either (i) a requirement that the customer obtain additional services provided by us; or (ii) an agreement by the customer to refrain from obtaining other services from a competitor.

Support of Subsidiary Banks. Under Federal Reserve policy and the Dodd-Frank Act, the Company is required to act as a source of financial and managerial strength to the Bank. This means that the Company is required to commit, as necessary, resources to support the Bank. However, the contribution of additional capital to an under-capitalized subsidiary bank may be required at times when a bank holding company may not have the resources to provide such support. Any capital loans a bank holding company makes to its subsidiary banks are subordinate to deposits and to certain other indebtedness of those subsidiary banks.

State Law Restrictions. As an Oregon corporation, the Company is subject to certain limitations and restrictions under applicable Oregon corporate law. For example, state law restrictions and limitations in Oregon include indemnification of directors, distributions to shareholders, transactions involving directors, officers or interested shareholders, maintenance of books, records and minutes, and observance of certain corporate formalities.

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Federal and State Regulation of Pacific Continental Bank

General. The Bank is an Oregon commercial bank operating in Oregon and Washington with deposits insured by the FDIC. As an Oregon state bank that is not a member of the Federal Reserve System, the Bank is subject to supervision and regulation by the Oregon Department of Consumer and Business Services (the “Oregon Department”) and the FDIC. These agencies have the authority to prohibit banks from engaging in what they believe constitute unsafe or unsound banking practices. Additionally, the Bank’s branches in Washington are subject to supervision and regulation by the Washington Department of Financial Institutions and must comply with applicable Washington laws regarding community reinvestment, consumer protection, fair lending, and intrastate branching.

Consumer Protection. The Bank is subject to a variety of federal and state consumer protection laws and regulations that govern its relationship with consumers including laws and regulations that mandate certain disclosure requirements and regulate the manner in which we take deposits, make and collect loans, and provide other services. Failure to comply with these laws and regulations can subject the Bank to various penalties, including but not limited to, enforcement actions, injunctions, fines, civil liability, criminal penalties, punitive damages, and the loss of certain contractual rights.

Community Reinvestment. The Community Reinvestment Act of 1977 (“CRA”) requires that, in connection with examinations of financial institutions within their jurisdiction, the FDIC evaluate the record of the financial institution in meeting the credit needs of its local communities, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the institution. In addition to substantial penalties and corrective measures that may be required for a violation of certain fair lending laws, the federal banking agencies may take compliance with such laws and the CRA into account when regulating and supervising other activities, and in evaluating whether to approve applications for permission to engage in new activities or for acquisitions of other banks or companies or de novo branching. An unsatisfactory CRA rating may be the basis for denying the application. In the most current CRA examination report dated August 1, 2011, the Bank’s compliance with CRA was rated “Satisfactory”.

Insider Credit Transactions. Banks are also subject to certain restrictions imposed by the Federal Reserve Act and the regulations of the Federal Reserve on extensions of credit to executive officers, directors, principal shareholders or any related interests of such persons. Extensions of credit (i) must be made on substantially the same terms, including interest rates and collateral, and follow credit underwriting procedures that are at least as stringent as those prevailing at the time for comparable transactions with persons not covered above and who are not employees; and (ii) must not involve more than the normal risk of repayment or present other unfavorable features. Banks are also subject to certain lending limits and restrictions on overdrafts to insiders. A violation of these restrictions may result in the assessment of substantial civil monetary penalties, regulatory enforcement actions, and other regulatory sanctions.

Regulation of Management. Federal law (i) sets forth circumstances under which officers or directors of a bank may be removed by the institution’s federal supervisory agency; (ii) places restraints on lending by a bank to its executive officers, directors, principal shareholders and their related interests; and (iii) generally prohibits management personnel of a bank from serving as a director or in other management positions of another financial institution whose assets exceed a specified amount or which has an office within a specified geographic area.

Safety and Soundness Standards. Certain non-capital safety and soundness standards are also imposed upon banks. These standards cover internal controls, information systems and internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, compensation, fees and benefits, such other operational and managerial standards as the agency determines to be appropriate, and standards for asset quality, earnings and stock valuation. An institution that fails to meet these standards may be subject to regulatory sanctions.

Interstate Banking and Branching

The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (“Interstate Act”), together with the Dodd-Frank Act, relaxed prior interstate branching restrictions under federal law by permitting, subject to regulatory approval, state and federally chartered commercial banks to establish branches in states where the laws permit banks chartered in such states to establish branches. The Interstate Act requires regulators to consult with community organizations before permitting an interstate institution to close a branch in a low-income area. Federal banking agency regulations prohibit banks from using their interstate branches primarily for deposit production, and the federal banking agencies have implemented a loan-to-deposit ratio screen to ensure compliance with this prohibition. The Dodd-Frank Act also authorized nationwide de novo branching by national and state banks and certain foreign banks operating in the U.S., which could also result in new entrants to the markets served by the Bank.

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Dividends

The principal source of the Company’s cash is from dividends received from the Bank, which are subject to government regulation and limitations. In addition, capital raises provide another source of cash. Regulatory authorities may prohibit banks and bank holding companies from paying dividends in a manner that would constitute an unsafe or unsound banking practice or would reduce the amount of its capital below that necessary to meet minimum applicable regulatory capital requirements. The Oregon Bank Act and the Federal Deposit Insurance Corporation Improvement Act of 1991 also limit a bank’s ability to pay cash dividends to its parent company. A bank may not pay cash dividends if that payment would reduce the amount of its capital below that necessary to meet minimum applicable regulatory capital requirements. In addition, under the Oregon Bank Act, the amount of the dividend paid by the Bank may not be greater than net unreserved retained earnings, after first deducting to the extent not already charged against earnings or reflected in a reserve, all bad debts, which are debts on which interest is unpaid and past due at least six months unless the debt is fully secured and in the process of collection; all other assets charged-off as required by Oregon bank regulators or a state or federal examiner; and all accrued expenses, interest and taxes of the Bank. The Federal Reserve has issued a policy statement on the payment of cash dividends by bank holding companies, which expresses the Federal Reserve’s view that a bank holding company should pay cash dividends only to the extent that its net income for the past year is sufficient to cover both the cash dividends and a rate of earnings retention that is consistent with the holding company’s capital needs, asset quality and overall financial condition. Payment of cash dividends by the Company and the Bank will depend on sufficient earnings to support them and adherence to bank regulatory requirements.

Capital Adequacy

Regulatory Capital Guidelines. Federal bank regulatory agencies use capital adequacy guidelines in the examination and regulation of bank holding companies and banks. The guidelines are “risk-based,” meaning that they are designed to make capital requirements more sensitive to differences in risk profiles among banks and bank holding companies.

Tier 1 and Tier 2 Capital. Under the guidelines, an institution’s capital is divided into two broad categories, Tier 1 capital and Tier 2 capital. Tier 1 capital generally consists of common stockholders’ equity (including surplus and undivided profits), qualifying non-cumulative perpetual preferred stock, and qualified minority interests in the equity accounts of consolidated subsidiaries. Tier 2 capital generally consists of the allowance for loan losses, hybrid capital instruments, and qualifying subordinated debt. The sum of Tier 1 capital and Tier 2 capital represents an institution’s total capital. The guidelines require that at least 50 percent of an institution’s total capital consist of Tier 1 capital.

Risk-based Capital Ratios. The adequacy of an institution’s capital is gauged primarily with reference to the institution’s risk-weighted assets. The guidelines assign risk weightings to an institution’s assets in an effort to quantify the relative risk of each asset and to determine the minimum capital required to support that risk. An institution’s risk-weighted assets are then compared with its Tier 1 capital and total capital to arrive at a Tier 1 risk-based ratio and a total risk-based ratio, respectively. The guidelines provide that an institution must have a minimum Tier 1 risk-based ratio of 4 percent and a minimum total risk-based ratio of 8 percent.

Leverage Ratio. The guidelines also employ a leverage ratio, which is Tier 1 capital as a percentage of average total assets, less goodwill and intangible assets. The principal objective of the leverage ratio is to constrain the maximum degree to which an institution may leverage its equity capital base. The minimum leverage ratio is 3 percent; however, for all but the most highly rated institutions and for institutions seeking to expand, regulators expect an additional cushion of at least 1 percent to 2 percent.

Prompt Corrective Action. Under the guidelines, an institution is assigned to one of five capital categories depending on its total risk-based capital ratio, Tier 1 risk-based capital ratio, and leverage ratio, together with certain subjective factors. The categories range from “well-capitalized” to “critically under-capitalized.” Institutions that are “under-capitalized” or lower are subject to certain mandatory supervisory corrective actions. At each successively lower capital category, an insured bank is subject to increased restrictions on its operations. During these challenging economic times, the federal banking regulators have actively enforced these provisions.

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At December 31, 2013, the Company and the Bank each exceeded the required risk-based capital ratios for classification as “well capitalized” as well as the required minimum leverage ratios for the Bank. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Capital Resources” in this Form 10-K.

Regulatory Capital Framework; Recent Rule-Making by U.S. Bank Regulatory Agencies. Until recently the U.S. federal bank regulatory agencies’ risk-based capital guidelines were based upon the 1988 capital accord (“Basel I”) of the Basel Committee on Banking Supervision (the “Basel Committee). The Basel Committee is a committee of banking supervisory authorities from major countries in the global financial system which formulates broad supervisory standards and guidelines relating to financial institutions for implementation on a country-by-country basis.

In July 2013, the Federal Reserve Board and the other U.S. federal banking agencies adopted final rules making significant changes to the U.S. regulatory capital framework for U.S. banking organizations and to conform this framework to the Basel Committee’s current international regulatory capital accord (Basel III). These rules replace the federal banking agencies’ general risk-based capital rules, advanced approaches rule, market-risk rule, and leverage rules, in accordance with certain transition provisions. Banks, such as Pacific Continental Bank, will become subject to the new rules on January 1, 2015. The new rules establish more restrictive capital definitions, create additional categories and higher risk-weightings for certain asset classes and off-balance sheet exposures, higher leverage ratios and capital conservation buffers that will be added to the minimum capital requirements and must be met for banking organizations to avoid being subject to certain limitations on dividends and discretionary bonus payments to executive officers. The new rules also implement higher minimum capital requirements, include a new common equity Tier 1 capital requirement, and establish criteria that instruments must meet in order to be considered common equity Tier 1 capital, additional Tier 1 capital, or Tier 2 capital. When fully phased in, the final rules will provide for increased minimum capital ratios as follows: (a) a common equity Tier 1 capital ratio of 4.5%; (b) a Tier 1 capital ratio of 6% (which is an increase from 4.0%); (c) a total capital ratio of 8%; and (d) a Tier 1 leverage ratio to average consolidated assets of 4%. While earlier proposals would have required that our trust preferred securities (TruPS) be phased out of Tier 1 capital, the new rules exempt depository institution holding companies with less than $15 billion in total consolidated assets as of December 31, 2009, such as the Company, from this requirement. These capital instruments, if issued prior to May 19, 2010, and currently in Tier 1 capital, are grandfathered in Tier 1 capital, subject to certain limits. Under the new rules, in order to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers, a banking organization must hold a capital conservation buffer composed of common equity Tier 1 capital above its minimum risk-based capital requirements (equal to 2.5% of total risk-weighted assets). The phase-in of the capital conservation buffer will begin January 1, 2016, and be completed by January 1, 2019. The new rules also provide for various adjustments and deductions to the definitions of regulatory capital that will phase in from January 1, 2014 to December 31, 2017. The implementation of these new rules could have an adverse impact on our financial position and future earnings due to the inclusion of Tier 1 capital as a core capital component and because of the heightened minimum capital requirements. The newly adopted capital rules could restrict our ability to grow during favorable market conditions, or require us to raise additional capital and liquidity, generally increase our cost of doing business, and impose other restrictions on our operations. The application of more stringent capital requirements would, among other things, result in lower returns on invested capital and result in regulatory sanctions if we were unable to comply with these requirements. As a result, our business, results of operations, financial condition or prospects could be adversely affected. We are currently evaluating the impact of the new capital rules on our regulatory capital position; however, we expect that we will be able to satisfy the minimum capital requirements adopted by the Federal Reserve and the other U.S. banking agencies within the prescribed implementation timelines. For additional information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Capital Resources” in this Form 10-K.

Regulatory Oversight and Examination

The Federal Reserve conducts periodic inspections of bank holding companies, which are performed both onsite and offsite. The supervisory objectives of the inspection program are to ascertain whether the financial strength of the bank holding company is being maintained on an ongoing basis and to determine the effects or consequences of transactions between a holding company or its non-banking subsidiaries and its subsidiary banks. For holding companies under $10 billion in assets, the inspection type and frequency varies depending on asset size, complexity of the organization and the holding company’s rating at its last inspection.

The Federal Reserve Board also has extensive enforcement authority over all bank holding companies, such as the Company. Such enforcement powers include the power to assess civil money penalties against any bank holding company violating any provision of the BHCA or any regulation or order of the Federal Reserve Board under the BHCA and the power to order termination of activities or ownership of nonbank subsidiaries of the holding company if it determines that there is reasonable

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cause to believe that the activities or ownership of the non-bank subsidiaries constitutes a serious risk to the financial safety, soundness or stability of banks owned by the bank holding company. Knowing violations of the BHCA or regulations or orders of the Federal Reserve Board can also result in criminal penalties for the company and any individuals participating in such conduct.

Banks are subject to periodic examinations by their primary regulators. Bank examinations have evolved from reliance on transaction testing in assessing a bank’s condition to a risk-focused approach. These examinations are extensive and cover the entire breadth of operations of the Bank. Generally, safety and soundness examinations occur on an 18-month cycle for banks under $500 million in total assets that are well-capitalized and without regulatory issues, and on a 12-month cycle otherwise. Examinations alternate between the federal and state bank regulatory agency and may occur on a combined schedule. The frequency of consumer compliance and CRA examinations is linked to the size of the institution and its compliance and CRA ratings at its most recent examinations. However, the examination authority of the FDIC allows it to examine supervised banks as frequently as deemed necessary based on the condition of the Bank or as a result of certain triggering events. Neither the Company nor the Bank is party to a formal or informal agreement with the FDIC, the Federal Reserve or the Oregon Department of Consumer and Business Services.

Corporate Governance and Accounting

Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act of 2002 (the “Act”) addresses, among other things, corporate governance, auditing and accounting, enhanced and timely disclosure of corporate information, and penalties for non-compliance. Generally, the Act (i) requires chief executive officers and chief financial officers to certify to the accuracy of periodic reports filed with the Securities and Exchange Commission (the “SEC”), (ii) imposes specific and enhanced corporate disclosure requirements, (iii) accelerates the time frame for reporting of insider transactions and periodic disclosures by public companies, (iv) requires companies to adopt and disclose information about corporate governance practices, including whether or not they have adopted a code of ethics for senior financial officers and whether the audit committee includes at least one “audit committee financial expert,” and (v) requires the SEC, based on certain enumerated factors, to regularly and systematically review corporate filings.

As a publicly reporting company, we are subject to the requirements of the Act and related rules and regulations issued by the SEC and NASDAQ. After enactment, we updated our policies and procedures to comply with the Act’s requirements and have found that such compliance, including compliance with Section 404 of the Act relating to internal control over financial reporting, has resulted in significant additional expense for the Company. We anticipate that we will continue to incur such additional expense in our ongoing compliance.

Anti-terrorism and Anti-Money Laundering

USA Patriot Act of 2001. The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, intended to combat terrorism, was renewed with certain amendments in 2006 (the “Patriot Act”). Certain provisions of the Patriot Act were made permanent and other sections were made subject to extended “sunset” provisions. The Patriot Act, in relevant part, (i) prohibits banks from providing correspondent accounts directly to foreign shell banks; (ii) imposes due diligence requirements on banks opening or holding accounts for foreign financial institutions or wealthy foreign individuals; (iii) requires financial institutions to establish an anti-money-laundering compliance program; and (iv) eliminates civil liability for persons who file suspicious activity reports.

Financial Services Modernization

The Gramm-Leach-Bailey Act, which became law in 1999, brought about significant changes to the laws affecting banks and bank holding companies. Generally, the GLB Act (i) repeals historical restrictions on preventing banks from affiliating with securities firms; (ii) provides a uniform framework for the activities of banks, savings institutions and their holding companies; (iii) broadens the activities that may be conducted by national banks and banking subsidiaries of bank holding companies; (iv) provides an enhanced framework for protecting the privacy of consumer information and requires notification to consumers of bank privacy policies; and (v) addresses a variety of other legal and regulatory issues affecting both day-to-day operations and long-term activities of financial institutions. Bank holding companies that qualify and elect to become financial holding companies can engage in a wider variety of financial activities than permitted under previous law, particularly with respect to insurance and securities underwriting activities.

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Deposit Insurance

The Bank’s deposits are insured under the Federal Deposit Insurance Act, up to the maximum applicable limits, and are subject to deposit insurance assessments designed to tie what banks pay for deposit insurance more closely to the risks they pose. The Dodd-Frank Act required the FDIC to amend its regulations to redefine the assessment base used for calculating deposit insurance assessments. As a result, assessments are now based on a financial institution’s average consolidated total assets less average tangible equity. The rules revised the assessment rate schedule and adopted additional rate schedules that will go into effect when the Deposit Insurance Fund reserve ratio reaches various milestones. The Dodd-Frank Act required the FDIC to increase the reserve ratio of the Deposit Insurance Fund from 1.15 percent to 1.35 percent of insured deposits by 2020 and eliminated the requirement that the FDIC pay dividends to insured depository institutions when the reserve ratio exceeds certain thresholds. In October 2010, the FDIC adopted a comprehensive, long-range “restoration” plan for the Deposit Insurance Fund to ensure that the ratio of the fund’s reserves to insured deposits reaches 1.35 percent by 2020, as required by the Dodd-Frank Act. The fund’s designated reserve ratio for 2014 was set at 2.0 percent. The final rule adopts progressively lower assessment rate schedules as the fund reaches specified reserve levels. There can be no assurance that the FDIC will not impose special assessments or increase annual assessments in the future.

The FDIC may terminate the deposit insurance of any insured depository institution if it determines that the institution has engaged in or is engaging in unsafe and unsound banking practices, is in an unsafe or unsound condition or has violated any applicable law, regulation or order or any condition imposed in writing by, or pursuant to, any written agreement with the FDIC. The termination of deposit insurance for the Bank could have a material adverse effect on our financial condition and results of operations due to the fact that the Bank’s liquidity position would likely be affected by deposit withdrawal activity.

Other Legislation

Dodd-Frank Wall Street Reform and Consumer Protection Act. As a result of the financial crises beginning in 2008-2009, on July 21, 2010, the Dodd-Frank Act was signed into law. The Dodd-Frank Act has had, and is expected to continue to have, a broad impact on the financial services industry, including significant regulatory and compliance changes and changes to corporate governance matters affecting public companies. Various of the law’s provisions have been implemented by rules and regulations of the federal banking agencies, but certain provisions of the law are yet to be implemented. As a result, the full scope and impact of the law on banking institutions generally and on our business and operations cannot be determined at this time. However, the Dodd-Frank Act is expected to have a significant impact on our business operations as its provisions continue to take effect. Some of the provisions of the Dodd-Frank Act that may impact our business are summarized below.

Corporate Governance. The Dodd-Frank Act requires publicly traded companies to provide their shareholders with (1) a non-binding shareholder vote on executive compensation, (2) a non-binding shareholder vote on the frequency of such vote, (3) disclosure of “golden parachute” arrangements in connection with specified change in control transactions, and (4) a non-binding shareholder vote on golden parachute arrangements in connection with these change in control transactions. Except with respect to “smaller reporting companies” and participants in the Troubled Asset Relief Program (“TARP”), the new rules applied to proxy statements relating to annual meetings of shareholders to be held after January 20, 2011.

Prohibition Against Charter Conversions of Troubled Institutions. The Dodd-Frank Act generally prohibits a depository institution from converting from a state to federal charter, or vice versa, while subject to an enforcement action, unless the bank seeks prior approval from its regulator and complies with specified procedures to ensure compliance with the enforcement action.

Overdraft and Interchange Fees. In November 2009, the Federal Reserve adopted amendments under its Regulation E that imposed new restrictions on banks’ abilities to charge overdraft services and fees. The rule prohibits financial institutions from charging fees for paying overdrafts on ATM and one-time debit card transactions, unless a consumer consents, or opts in, to the overdraft service for those types of transactions. The opt-in provision established requirements for clear disclosure of fees and terms of overdraft services for ATM and one-time debit card transactions. Since a percentage of the Bank’s service charges on deposits are in the form of overdraft fees on point-of-sale transactions, this has had an adverse impact on our noninterest income.

The Dodd-Frank Act, through a provision known as the Durbin Amendment, required the Federal Reserve to establish standards for interchange fees that are “reasonable and proportional” to the cost of processing the debit card transaction and imposes other requirements on card networks. Under the final rule, effective in October 2011, the maximum permissible interchange fee that a bank may receive is the sum of $0.21 per transaction and five basis points multiplied by the

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value of the transaction, with an additional upward adjustment of no more than $0.01 per transaction if a bank develops and implements policies and procedures reasonably designed to achieve fraud-prevention standards set by regulation. In July 2013, a Federal district court held that this regulation was not valid under the Act’s standard that the fee be “reasonable and proportional” to the cost of processing the debit card transaction; the court held that the Federal Reserve’s regulation improperly included certain categories of costs in applying the statutory standard. It also held that the regulation improperly failed to give merchants the ability to choose from among multiple networks to process debit card transactions. The Federal Reserve has appealed this decision, and the court has stayed its ruling until there has been a ruling on the appeal. This decision, upon its effectiveness, which would be after the resolution of the appeal, could further reduce the fee revenues that banks receive from the business of processing debit card transactions. While the restrictions on interchange fees do not apply to banks that, together with their affiliates, have assets of less than $10 billion, the rule could affect the competitiveness of debit cards issued by smaller banks.

Consumer Financial Protection Bureau. The Dodd-Frank Act created a new, independent federal agency called the Consumer Financial Protection Bureau (“CFPB”). The CFPB has broad rulemaking, supervision and enforcement authority for a wide range of consumer protection laws for banks and thrifts with greater than $10 billion in assets. Among the CFPB’s responsibilities are implementing and enforcing federal consumer financial protection laws, reviewing the business practices of financial services providers for legal compliance, monitoring the marketplace for transparency on behalf of consumers and receiving complaints and questions from consumers about consumer financial products and services. The Dodd-Frank Act added prohibitions on unfair, deceptive or abusive acts and practices to the scope of consumer protection regulations overseen and enforced by the CFPB. Institutions with less than $10 billion in assets, such as the Company, are subject to rules promulgated by the CFPB but will continue to be examined and supervised by their federal banking regulators for compliance purposes.

Repeal of Demand Deposit Interest Prohibition. The Dodd-Frank Act repeals the federal prohibitions on the payment of interest on demand deposits, thereby permitting depository institutions to pay interest on business transaction and other accounts.

Proposed Legislation

Proposed legislation that may affect the Company and the Bank is introduced in almost every legislative session, both federal and state. Certain of such legislation could dramatically affect the regulation of the banking industry. We cannot predict if any such legislation will be adopted or, if it is adopted, how it would affect the business of the Bank or the Company. Past history has demonstrated that new legislation or changes to existing laws or regulations usually results in a greater compliance burden and therefore generally increases the cost of doing business.

Effects of Government Monetary Policy

Our earnings and growth are affected not only by general economic conditions, but also by the fiscal and monetary policies of the federal government, particularly the Federal Reserve. The Federal Reserve implements national monetary policy for such purposes as curbing inflation and combating recession. Its open market operations in U.S. government securities, control of the discount rate applicable to borrowings from the Federal Reserve, and establishment of reserve requirements against certain deposits, influence the growth of bank loans, investments and deposits, and also affect interest rates charged on loans or paid on deposits. For the past several years in response to the financial crisis which began in 2008 and the ensuing recession, the Federal Reserve has pursued a variety of monetary measures aimed at sustaining a very low interest rate environment in the U.S. in order to stimulate economic growth, including purchases of long-term U.S. Treasury and federal agency backed securities and maintaining a very low target range for the federal funds rate. In December 2013, the Federal Reserve announced that in light of the improving outlook for labor market conditions and other economic indicators, the Federal Reserve would begin in January 2014 reducing the rate at which it would acquire U.S. Treasury and federal agency backed securities. However, the agency noted that the pace of such asset purchases in the future would be contingent on the agency’s outlook for the labor market and inflation and other factors.

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Statistical Information

All dollar amounts in the following sections, except per common share data, are in thousands of dollars, except where otherwise indicated.

Selected Quarterly Information

The following chart contains data for the last eight quarters ended December 31, 2013.

YEAR	2013								2012
QUARTER	Fourth		Third		Second		First		Fourth		Third		Second		First
Interest income	$	15,539	$	16,007	$	14,779	$	14,608	$	13,753	$	13,883	$	13,991	$	14,267
Interest expense		1,151		1,149		1,263		1,231		1,272		1,398		1,493		1,655
Net interest income		14,388		14,858		13,516		13,377		12,481		12,485		12,498		12,612
Provision for loan loss		—		—		—		250		—		—		600		1,300
Noninterest income		1,563		1,447		1,535		1,281		1,382		1,415		1,493		1,451
Noninterest expense		10,045		10,406		9,508		10,773		8,908		8,715		8,764		8,718
Net income		3,652		3,940		3,724		2,451		3,383		3,438		3,117		2,715
PER COMMON SHARE DATA
Net income- (basic)	$	0.20	$	0.22	$	0.21	$	0.14	$	0.19	$	0.19	$	0.17	$	0.15
Net income- (diluted)	$	0.20	$	0.22	$	0.21	$	0.13	$	0.19	$	0.19	$	0.17	$	0.14
Regular cash dividends	$	0.10	$	0.09	$	0.09	$	0.08	$	0.07	$	0.06	$	0.06	$	0.05
Special cash dividends	$	0.12	$	0.12	$	0.05	$	0.08	$	0.04	$	0.03	$	—	$	—
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic		17,888,818		17,888,182		17,872,378		17,835,088		18,085,607		18,166,377		18,062,633		18,195,415
Diluted		18,126,273		18,109,282		18,060,081		17,986,519		18,238,160		18,319,334		18,221,099		18,352,796

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Investment Portfolio

The following chart contains information regarding the Company’s investment portfolio. All of the Company’s investment securities are accounted for as available-for-sale and are reported at estimated fair value. Temporary differences between estimated fair value and amortized cost, net of deferred taxes, are recorded as a separate component of shareholders’ equity. Credit-related other-than-temporary impairment is recognized against earnings as a realized loss in the period in which it is identified.

INVESTMENT PORTFOLIO

ESTIMATED FAIR VALUE

	December 31,
	2013		2012		2011
	(dollars in thousands)
Obligations of U.S. government agencies	$	30,847	$	17,844	$	12,958
Obligations of states and political subdivisions		78,795		81,501		49,576
Private label mortgage-backed securities		5,314		8,600		11,927
Mortgage-backed securities		223,720		281,940		272,081
SBA variable rate pools		8,710		—		—
Total	$	347,386	$	389,885	$	346,542

The following chart presents the fair value of each investment category by maturity date and includes a weighted average yield for each period. Mortgage-backed securities have been classified based on their December 31, 2013, projected average lives.

SECURITIES AVAILABLE-FOR-SALE

	One Year or Less					After One Year Through Five Years					After Five Years Through Ten Years					After Ten Years
	Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield
	(dollars in thousands)
Obligations of U.S. government agencies	$	—		—		$	18,905		1.68	%	$	11,942		2.24	%	$	—		—
Obligations of states and political subdivisions		403		3.49	%		4,248		3.72	%		30,435		2.94	%		43,709		2.81	%
Private label mortgage-backed securities		—		—			4,110		5.67	%		1,204		5.62	%		—		—
Mortgage-backed securities		18,468		1.09	%		186,775		2.46	%		18,477		2.32	%		—		—
SBA variable rate pools		—		—			5,337		1.04	%		3,373		0.43	%		—		—
Total	$	18,871		1.14	%	$	219,375		2.44	%	$	65,431		2.56	%	$	43,709		2.81	%

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Loan Portfolio

Average balances and average rates paid by category of loan for the fourth quarter and full year 2013 are included in the Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-K. The following table contains period-end information related to the Company’s loan portfolio for the five years ended December 31, 2013.

LOAN PORTFOLIO

	December 31,
	2013			2012			2011			2010			2009
	(dollars in thousands)
Commercial and other loans	$	391,229		$	326,716		$	274,156		$	244,764		$	239,450
Real estate loans		500,752			461,240			478,466			522,849			538,197
Construction loans		98,910			79,720			63,638			83,455			161,342
Consumer loans		3,878			3,581			4,569			5,900			6,763
		994,769			871,257			820,829			856,968			945,752
Deferred loan origination fees, net		(924	)		(841	)		(677	)		(583	)		(1,388	)
		993,845			870,416			820,152			856,385			944,364
Allowance for loan losses		(15,917	)		(16,345	)		(14,941	)		(16,570	)		(13,367	)
	$	977,928		$	854,071		$	805,211		$	839,815		$	930,997

The following table presents loan portfolio information by loan category related to maturity and repricing sensitivity. Variable rate loans are included in the time frame in which the interest rate on the loan could be first adjusted. At December 31, 2013, the Company had approximately $346,708 of variable rate loans at their floors that are included in the analysis below. These loans are included in the category of their next available repricing date.

MATURITY AND REPRICING DATA FOR LOANS

	Commercial and Other		Real Estate		Construction		Consumer		Total
	(dollars in thousands)
Three months or less	$	52,656	$	28,682	$	60,858	$	2,906	$	145,102
Over three months through 12 months		8,773		47,173		20,685		152		76,783
Over 1 year through 3 years		24,741		103,477		7,247		187		135,652
Over 3 years through 5 years		68,482		237,994		5,885		376		312,737
Over 5 years through 15 years		236,577		79,156		4,235		257		320,225
Thereafter		—		4,270		—		—		4,270
Total loans	$	391,229	$	500,752	$	98,910	$	3,878	$	994,769

Loan Concentrations

At December 31, 2013, loans to dental professionals totaled $307,268 and represented approximately 30.89% of outstanding loans. Approximately 60.38% of the Company’s loans are secured by real estate.

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Nonperforming Assets

The following table presents period-end nonperforming loans and assets for the five-year periods ended December 31, 2013:

NONPERFORMING ASSETS

	December 31,
	2013			2012			2011			2010			2009
	(dollars in thousands)
Nonaccrual loans	$	5,343		$	9,361		$	26,594		$	33,026		$	32,793
90 or more days past due and still accruing		—			—			—			—			—
Total nonperforming loans		5,343			9,361			26,594			33,026			32,793
Government guarantees		(735	)		(905	)		(495	)		(1,056	)		(447	)
Net nonperforming loans		4,608			8,456			26,099			31,970			32,346
Other real estate owned		16,355			17,972			11,000			14,293			4,224
Total nonperforming assets	$	20,963		$	26,428		$	37,099		$	46,263		$	36,570
Nonperforming assets as a percentage of total assets		1.45	%		1.92	%		2.92	%		3.82	%		3.05	%

If interest on nonaccrual loans had been accrued, such income would have been approximately $421, $708, and $1,934, respectively, for the years 2013, 2012, and 2011.

Allowance for Loan Losses

The following chart presents information about the Company’s allowance for loan losses. Management and the Board of Directors evaluate the allowance monthly and consider the amount to be adequate to absorb possible loan losses.

ALLOWANCE FOR LOAN LOSSES

	December 31,
	2013			2012			2011			2010			2009
	(dollars in thousands)
Balance at beginning of year	$	16,345		$	14,941		$	16,570		$	13,367		$	10,980
Charges to the allowance
Commercial and other loans		(1,658	)		(1,401	)		(1,403	)		(4,521	)		(8,234	)
Real estate loans		(407	)		(1,190	)		(5,555	)		(5,913	)		(4,303	)
Construction loans		—			(1,054	)		(8,792	)		(4,949	)		(21,146	)
Consumer loans		(23	)		(19	)		(54	)		(131	)		(198	)
Total charges to the allowance		(2,088	)		(3,664	)		(15,804	)		(15,514	)		(33,881	)
Recoveries against the allowance
Commercial and other loans		982			1,917			581			1,158			56
Real estate loans		360			55			176			2,043			196
Construction loans		60			1,188			498			509			7
Consumer loans		8			8			20			7			9
Total recoveries against the allowance		1,410			3,168			1,275			3,717			268
Provisions		250			1,900			12,900			15,000			36,000
Balance at end of the year	$	15,917		$	16,345		$	14,941		$	16,570		$	13,367
Net charge offs as a percentage of total average loans		0.07	%		0.06	%		1.74	%		1.30	%		3.50	%

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The following table sets forth the allowance for loan losses allocated by loan type for the five years ended December 31, 2013:

	2013					2012					2011					2010					2009
	Amount		Percent of loans in each category to total loans			Amount		Percent of loans in each category to total loans			Amount		Percent of loans in each category to total loans			Amount		Percent of loans in each category to total loans			Amount		Percent of loans in each category to total loans
Commercial and other loans	$	5,113		39.3	%	$	3,846		37.5	%	$	2,776		33.5	%	$	2,230		28.6	%	$	2,557		25.3	%
Real estate loans		7,668		50.4	%		9,456		53.0	%		8,267		58.2	%		4,520		61.0	%		4,182		56.9	%
Construction loans		1,493		10.0	%		1,987		9.1	%		2,104		7.7	%		8,562		9.7	%		4,478		17.1	%
Consumer loans		68		0.3	%		70		0.4	%		87		0.6	%		64		0.7	%		66		0.7	%
Unallocated		1,575		N/A			986		N/A			1,707		N/A			1,194		N/A			2,084		N/A
Allowance for loan losses	$	15,917		100.0	%	$	16,345		100.0	%	$	14,941		100.0	%	$	16,570		100.0	%	$	13,367		100.0	%

During 2013, the Company recorded a provision for loan losses of $250 compared to $1,900 for the year 2012. At December 31, 2013, the Company’s recorded investment in nonperforming loans, net of government guarantees, was $8,705, with a specific allowance of $57 provided for in the ending allowance for loan losses.

While the Company saw improvement with regard to the overall credit quality of the loan portfolio in 2013, management cannot predict the level of the provision for loan losses, the level of the allowance for loan losses, nor the level of nonperforming assets in future quarters as a result of continuing uncertain economic conditions. At December 31, 2013, and as shown above, the Company’s unallocated reserves were $1,575 or 9.90% of the total allowance for loan losses at year-end. Management believes that the allowance for loan losses at December 31, 2013, is adequate and that this level of unallocated reserves was prudent in light of the economic conditions and uncertainty that exists in the Northwest markets that the Company serves and the increasing concentration in loans to dental professionals. See Note 4 in this Form 10-K for additional information on the dental loan portfolio.

Deposits

Average balances and average rates paid by category of deposit are included in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Form 10-K. The chart below details period-end information related to the Company’s time deposits at December 31, 2013. The Company does not have any foreign deposits. Variable rate deposits are listed by first repricing opportunity.

TIME DEPOSITS

	Time Deposits of $100 or more		Time Deposits of less than $100		Total Time Deposits
	(dollars in thousands)
<3 Month	$	38,389	$	11,951	$	50,340
3-6 Months		4,736		10,987		15,723
6-12 Months		12,198		8,561		20,759
>12 Months		23,758		53,878		77,636
	$	79,081	$	85,377	$	164,458

Borrowings

The Company uses short-term borrowings to fund fluctuations in deposits and loan demand. The Bank has access to both secured and unsecured overnight borrowing lines. The secured borrowing lines are collateralized by loans. At December 31, 2013, the Company had secured borrowing lines with the Federal Home Loan Bank of Seattle (the “FHLB”) and the Federal Reserve Bank of San Francisco (the “FRB”). At December 31, 2013, the FHLB borrowing line was limited by the amount of collateral pledged which limited total borrowings to $229,547. The borrowing line with the FRB is limited by the value of discounted collateral pledged, which at December 31, 2013, was $92,579. At December 31, 2013, the Company also had unsecured borrowing lines with various correspondent banks totaling $129,000. At December 31, 2013, the Company had $5,150 in overnight borrowings outstanding on its unsecured borrowing lines. At December 31, 2013, there was $285,776 available on secured and unsecured borrowing lines with the FHLB, the FRB, and various correspondent banks.

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SHORT-TERM BORROWINGS

	2013			2012			2011
	(dollars in thousands)
Federal funds purchased, FHLB CMA, FRB, & short-term advances
Average interest rate
At year end		0.25	%		0.38	%		0.29	%
For the year		0.32	%		0.53	%		0.53	%
Average amount outstanding for the year	$	124,671		$	102,614		$	32,124
Maximum amount outstanding at any month end	$	158,740		$	129,385		$	78,050
Amount outstanding at year end	$	124,150		$	86,570		$	56,800

At December 31, 2013, the Company had FHLB borrowings totaling $160,000 with a weighted average interest rate of 0.67% and a remaining average maturity of approximately 0.71 years. More information on long-term borrowings can be found in Note 10 in the Notes to Consolidated Financial Statements in the Form 10-K.

The Company’s other long-term borrowings consisted of $8,248 in junior subordinated debentures originated on November 28, 2005, and due on January 7, 2036. The interest rate on the debentures was 6.265% until January 2012 after which it was converted to a floating rate of three-month LIBOR plus 135 basis points. During April 2013, the Company entered into a swap agreement with a third party, which fixed the rate on its $8,000 of trust preferred securities at 2.73% for seven years.

ITEM 1A Risk Factors

We are subject to numerous risks and uncertainties, including but not limited to the following information:

Industry Factors

The continued challenges in the U.S. and our region’s economies could have a material adverse effect on our future results of operations or market price of our stock; there can be no assurance that U.S. governmental measures responding to these challenges will successfully address these circumstances; the U.S. government continues to face significant fiscal and budgetary challenges which, if not resolved, may further exacerbate U.S. economic conditions.

The national economy and the financial services sector in particular are still facing challenges. A large percentage of our loans are to businesses in western Washington and Oregon, markets facing many of the same challenges as the national economy, including elevated unemployment and weakness in commercial and residential real estate values. Although some economic indicators are improving both nationally and in the markets we serve, unemployment remains high and there remains uncertainty regarding the strength of the economic recovery. A continued slow economic recovery could result in the following consequences, any of which could have an adverse impact, which may be material, on our business, financial condition, results of operations and prospects, and could also cause the market price of our stock to decline:

• Economic conditions may not stabilize, increasing the likelihood of credit defaults by borrowers.

• Loan collateral values, especially as they relate to commercial and residential real estate, may decline, thereby increasing the severity of loss in the event of loan defaults.

• Demand for banking products and services may decline, including loan products and services for low cost and noninterest-bearing deposits.

• Changes and volatility in interest rates may negatively impact the yields on earning assets and the cost of interest-bearing liabilities.

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Our earnings and growth are affected not only by general economic conditions, but also by the fiscal and monetary policies of the federal government, particularly the Federal Reserve. Refer to “Supervision and Regulation” in Item 1 of this Form 10-K for discussion of certain of these measures. In response to the adverse financial and economic developments that have, since 2008, impacted the U.S. and global economies and financial markets, and presented challenges for the banking and financial services industry, various significant economic and monetary stimulus measures were implemented by the U.S. Congress. It cannot be predicted whether these or other U.S. governmental actions will result in lasting improvement in financial and economic conditions affecting the U.S. banking industry and the U.S. economy. It also cannot be predicted whether and to what extent the efforts of the U.S. government to combat the mixed economic conditions will continue. If, notwithstanding the government’s fiscal and monetary measures, the U.S. economy were to deteriorate, this would present significant challenges for the U.S. banking and financial services industry and for our Company.

The challenges to the level of economic activity in the U.S., and, therefore, to the banking industry, have also been exacerbated by the extensive political disagreements regarding the statutory debt limit on U.S. federal government obligations and measures to address the substantial federal deficits. Following enactment of federal legislation in August 2011 which averted a default by the U.S. federal government on its sovereign obligations by raising the statutory debt limit and which established a process whereby cuts in federal spending may be accomplished, Standard & Poor’s Ratings Services (“Standard & Poor’s”) lowered its long-term sovereign credit rating on the U.S. to “AA+” from “AAA” while affirming its highest rating on short-term U.S. obligations. Standard & Poor’s also stated at the time that its outlook on the long-term rating remained negative; however, in June 2013, Standard & Poor’s revised its outlook on the U.S. credit rating to stable from negative. At the present time, both Fitch Ratings and Moody’s have reaffirmed the U.S.’s “AAA” credit rating; however, Fitch Ratings has stated that its outlook on the U.S. is negative, while, in July 2013, Moody’s revised its outlook on the U.S. credit rating to stable from negative. In February 2014, the U.S. Congress passed legislation to increase the statutory debt limit through March 2015. The U.S. Congress will need to pass additional legislation prior to March 2015 to further increase the statutory debt limit in order for the government to continue to make payments to its creditors. These statutory debt limit and budget deficit concerns have increased the possibility of the credit rating agencies further downgrading the U.S. credit rating. Although it is not possible to predict the long-term impact of these developments on the U.S. economy in general and the banking industry in particular, the downgrade by Standard & Poor’s and any further downgrades by it or other rating agencies could increase over time the U.S. federal government’s cost of borrowing which may worsen its fiscal challenges, as well as generating upward pressure on interest rates generally in the U.S. which could, in turn, have adverse consequences for borrowers and the level of business activity.

The outcome and impact of these developments cannot be predicted with any certainty, but could have further adverse consequences for the credit ratings of U.S. debt and also present additional challenges for the U.S. economy and for the U.S. banking industry in general and for our business prospects as well. Any of the foregoing developments could generate further uncertainties and challenges for the U.S. economy which, in turn, could adversely affect the prospects of the banking industry in the U.S. and our business.

Tightening of credit markets and liquidity risk could adversely affect our business, financial condition and results of operations.

A tightening of the credit markets or any inability to obtain adequate funds at an acceptable cost for continued loan growth could adversely affect our asset growth and liquidity position and, therefore, our earnings capability. In addition to core deposit growth, maturity of investment securities, and loan payments, the Company also relies on wholesale funding sources including unsecured borrowing lines with correspondent banks, secured borrowing lines with the Federal Home Loan Bank of Seattle and the Federal Reserve Bank of San Francisco, public time certificates of deposits, and out-of-area and brokered time certificates of deposit. Our ability to access these funding sources could be impaired by deterioration in our financial condition as well as factors that are not specific to us, such as a disruption in the financial markets or negative views and expectations for the financial services industry or serious dislocation in the general credit markets. In the event such disruption should occur, our ability to access these funding sources could be adversely affected, both as to price and availability, which would limit, or potentially raise the cost of, the funds available to the Company.

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The FDIC has increased insurance premiums to rebuild and maintain the federal deposit insurance fund and there may be additional future premium increases and special assessments which would adversely affect our results of operations.

The Bank’s deposits are insured under the Federal Deposit Insurance Act, up to the maximum applicable limits, and are subject to deposit insurance assessments designed to tie what banks pay for deposit insurance more closely to the risks they pose. The Dodd-Frank Act broadened the base for FDIC insurance assessments. Assessments are now based on the average consolidated total assets less average tangible equity of a financial institution. In addition, the Dodd-Frank Act required the FDIC to increase the designated reserve ratio (the FDIC is required to set the reserve ratio each year) of the Deposit Insurance Fund from 1.15% to 1.35% of insured deposits; required that the fund meet that minimum ratio of insured deposits by 2020; and eliminated the requirement that the FDIC pay dividends to insured depository institutions when the reserve ratio exceeds certain thresholds. See “Supervision and Regulation- Deposit Insurance” in this Form 10-K.

Despite the FDIC’s actions to restore the deposit insurance fund, the fund may suffer additional losses in the future due to failures of insured institutions. There may be additional significant deposit insurance premium increases, special assessments or prepayments in order to restore the insurance fund’s reserve ratio. Any significant premium increases or special assessments could have a material adverse effect on the Company’s financial condition and results of operations.

Recent levels of market volatility were unprecedented and we cannot predict whether they will return.

From time-to-time over the last few years, the capital and credit markets have experienced volatility and disruption at unprecedented levels. In some cases, the markets have produced downward pressure on stock prices and credit availability for certain issuers without regard to those issuers’ underlying financial strength. If similar levels of market disruption and volatility return, we could experience an adverse effect, which may be material, on our ability to access capital and funding and on our business, financial condition and results of operations.

We operate in a highly regulated environment and the effects of recent and pending federal legislation or of changes in, or supervisory enforcement of, banking or other laws and regulations could adversely affect us.

As discussed more fully in the section entitled “Supervision and Regulation” in this Form 10-K, we are subject to extensive regulation, supervision and examination by federal and state banking authorities. In addition, as a publicly traded company, we are subject to regulation by the Securities and Exchange Commission. Any change in applicable regulations or federal, state or local legislation could have a substantial impact on us and our operations. Additional legislation and regulations that could significantly affect our powers, authority and operations may be enacted or adopted in the future, which could have a material adverse effect on our financial condition and results of operations.

In that regard, sweeping financial regulatory reform legislation in the form of the Dodd-Frank Act was enacted in July 2010. Among other provisions, the legislation (i) created a new Bureau of Consumer Financial Protection with broad powers to regulate consumer financial products such as credit cards and mortgages, (ii) created a Financial Stability Oversight Council comprised of the heads of other regulatory agencies, (iii) has led to new capital requirements from federal banking agencies, (iv) placed new limits on electronic debit card interchange fees, and (v) required the Securities and Exchange Commission and national stock exchanges to adopt significant new corporate governance and executive compensation reforms. The new legislation and regulations are likely to increase the overall costs of regulatory compliance and, in many ways, have increased, or may increase in the future, the cost of doing business and present other challenges to the financial services industry.

In July 2013, the Federal Reserve Board and the other U.S. federal banking agencies adopted final rules making significant changes to the U.S. regulatory capital framework for U.S. banking organizations and to conform this framework to the Basel Committee’s current international regulatory capital accord (Basel III). These rules, upon their effectiveness, will replace the federal banking agencies’ general risk-based capital rules, advanced approaches rule, market-risk rule, and leverage rules, in accordance with certain transition provisions. Banks, such as Pacific Continental Bank, will become subject to the new rules on January 1, 2015. The new rules establish more restrictive capital definitions, create additional categories and higher risk-weightings for certain asset classes and off-balance sheet exposures, higher leverage ratios and capital conservation buffers that will be added to the minimum capital requirements and must be met for banking organizations to avoid being subject to certain limitations on dividends and discretionary bonus payments to executive officers. The new rules also implement higher minimum capital requirements, include a new common equity Tier 1 capital requirement, and establish criteria that instruments must meet in order to be considered common equity Tier 1 capital, additional Tier 1 capital, or Tier 2 capital. When fully phased in, the final rules will provide for increased minimum capital ratios as follows: (a) a common equity Tier 1 capital ratio of 4.50%; (b) a Tier 1 capital ratio of 6.00% (which is an increase from 4.00%); (c) a total capital ratio of 8.00%; and (d) a Tier 1 leverage ratio to average consolidated assets of 4.00%. While earlier proposals would have required that our trust preferred securities (TruPS) be phased out of Tier 1 capital, the new rules exempt depository institution holding companies with less than $15 billion in total consolidated assets as of December 31, 2009, such as the Company, from this requirement. These capital instruments, if issued prior to May 19, 2010, and currently in Tier 1 capital, are grandfathered in Tier 1 capital, subject to certain limits. Under the new rules, in order to avoid limitations on capital distributions, including

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dividend payments and certain discretionary bonus payments to executive officers, a banking organization must hold a capital conservation buffer composed of common equity Tier 1 capital above its minimum risk-based capital requirements (equal to 2.50% of total risk-weighted assets). The phase-in of the capital conservation buffer will begin January 1, 2016, and be completed by January 1, 2019. The new rules also provide for various adjustments and deductions to the definitions of regulatory capital that will phase in from January 1, 2014 to December 31, 2017.

On January 12, 2014, the Basel Committee issued its near final version of its leverage ratio and disclosure guidance (the “Basel III Leverage Ratio”). The Basel III Leverage Ratio will be subject to further calibration until 2017, with final implementation expected by January 18, 2018. The Basel III Leverage Ratio makes a number of significant changes to the Basel Committee’s June 2013 consultative paper (“Consultative Paper”) by easing the approach to measuring the exposures of off-balance sheet items. These changes address the financial services industry’s concern that the Consultative Paper’s definition of exposure was too expansive, i.e., that the leverage ratio’s denominator was too large. The changes eliminate many, but not all, differences between the Basel III Leverage Ratio and the U.S. supplemental leverage ratio (“SLR”), which is currently set at a minimum of three percent and applies to U.S. firms with over $250 billion in assets.

We are currently evaluating the potential impact of the new capital rules on our regulatory capital position. The implementation of these new rules could have an adverse impact on our financial position and future earnings due to the inclusion of Tier 1 capital as a core capital component and because of the heightened minimum capital requirements. The newly adopted capital rules, as described above, as well as various proposed regulations, if adopted, could restrict our ability to grow during favorable market conditions, or require us to raise additional capital and liquidity, generally increase our cost of doing business, and impose other restrictions on our operations. The application of more stringent capital requirements would, among other things, result in lower returns on invested capital and result in regulatory sanctions if we were unable to comply with these requirements. As a result, our business, results of operations, financial condition or prospects could be adversely affected.

In recent months, the federal bank regulators have announced regulatory enforcement actions against a number of large bank holding companies and banks arising from deficiencies in processes, procedures and controls involving anti-money laundering measures and compliance with the economic sanctions that affect transactions with designated foreign countries, nationals and others as provided for in the regulations of the Office of Foreign Assets Control of the U.S. Treasury Department. These actions evidence an intensification of the U.S. government’s expectations for compliance with these regulatory regimes on the part of banks operating in the U.S., including Pacific Continental Bank, and may result in increased compliance costs and increased risks of regulatory sanctions.

Regulators have significant discretion and authority to prevent or remedy unsafe or unsound practices or violations of laws or regulations by financial institutions and bank holding companies in the performance of their supervisory and enforcement duties. In recent years, these powers have been utilized more frequently due to the serious national, regional and local economic conditions we are facing. The exercise of regulatory authority may have a negative impact on our financial condition and results of operations.

We cannot accurately predict the ultimate effects of recent legislation or the various governmental, regulatory, monetary and fiscal initiatives which have been and may be enacted on the financial markets, on the Company and on the Bank. The terms and costs of these activities, or the failure of these actions to help stabilize the financial markets, asset prices, market liquidity and a continuation or worsening of current financial market and economic conditions, could materially and adversely affect our business, financial condition, results of operations and the trading price of our common stock.

Fluctuating interest rates could adversely affect our profitability.

As is the case with many banks, our profitability is dependent to a large extent upon our net interest income, which is the difference between the interest earned on loans, securities and other interest-earning assets and interest paid on deposits, borrowings, and other interest-bearing liabilities. Because of the differences in maturities and repricing characteristics of our interest-earning assets and interest-bearing liabilities, changes in interest rates do not produce equivalent changes in interest income earned on interest-earning assets and interest paid on interest-bearing liabilities. Accordingly, fluctuations in interest rates could adversely affect, and has in past years, impacted, our net interest margin, and, in turn, our profitability. This impact could result in a decrease in our interest income relative to interest expense. Increases in interest rates may also adversely impact the value of our securities investment portfolio. At December 31, 2013, our balance sheet was liability sensitive, and an increase in interest rates could cause our net interest margin and our net interest income to decline. For the past several years, the banking industry has operated in an extremely low interest rate environment relative to historical averages, and the Federal Reserve has pursued highly accommodative monetary policies (including a very low Federal funds

24

rate and substantial purchases of long-term U.S. Treasury and agency securities) in an effort to facilitate growth in the U.S. economy and a reduction in levels of unemployment. This environment has placed downward pressure on the net interest margins of U.S. banks, including Pacific Continental Bank. We cannot predict with any certainty whether or to what extent these Federal Reserve policies will continue.

Company Factors

Our allowance for loan losses may not be adequate to cover actual loan losses, which could adversely affect our earnings.

We maintain an allowance for loan losses in an amount that we believe is adequate to provide for losses inherent in our loan portfolio. While we strive to carefully manage and monitor credit quality and to identify loans that may be deteriorating, at any time there are loans included in the portfolio that may result in losses, but that have not yet been identified as potential problem loans. Through established credit practices, we attempt to identify deteriorating loans and adjust the loan loss reserve accordingly. However, because future events are uncertain, there may be loans that deteriorate in an accelerated time frame. As a result, future additions to the allowance at elevated levels may be necessary. Because the loan portfolio contains a number of commercial real estate loans with relatively large balances, deterioration in the credit quality of one or more of these loans may require a significant increase to the allowance for loan losses. Future additions to the allowance may also be required based on changes in the financial condition of borrowers, such as have resulted due to the current, and potentially worsening, economic conditions. Additionally, federal banking regulators, as an integral part of their supervisory function, periodically review our allowance for loan losses. These regulatory agencies may require us to recognize further loan loss provisions or charge-offs based upon their judgments, which may be different from ours. Any increase in the allowance for loan losses would have an adverse effect, which may be material, on our financial condition and results of operations.

Concentration in real estate loans and further deterioration in the real estate markets we serve could require material increases in our allowance for loan losses and adversely affect our financial condition and results of operations.

We have a high degree of concentration in loans secured by real estate (see Note 3 in the Notes to Consolidated Financial Statements included in this Form 10-K). Further deterioration in the local economies we serve could have a material adverse effect on our business, financial condition and results of operations due to a weakening of our borrowers’ ability to repay these loans, higher default rates, and a decline in the value of the collateral securing these loans. In light of the continuing effects of the economic downturn, real estate values have been adversely affected. As we have experienced, significant declines in real estate collateral can occur quite suddenly as new appraisals are performed in the normal course of monitoring the credit quality of the loan. Significant declines in the value of real estate collateral due to new appraisals can occur due to declines in the real estate market, changes in methodology applied by the appraiser, and/or using a different appraiser than was used for the prior appraisal. Our ability to recover on these loans by selling or disposing of the underlying real estate collateral is adversely impacted by declining real estate values which increases the likelihood we will suffer losses on defaulted loans secured by real estate beyond the amounts provided for in the allowance for loan losses. This, in turn, could require material increases in our allowance for loan losses and adversely affect our financial condition and results of operations, perhaps materially.

We have a significant concentration in loans to dental professionals, and loan concentrations within one industry may create additional risk.

Bank regulatory authorities and investors generally view significant loan concentrations within any particular industry as carrying higher inherent risk than a loan portfolio without any significant concentration in one industry. We have a significant concentration of loans to dental professionals which represented 30.89% in principal amount of our total loan portfolio at December 31, 2013 (see Note 4 in the Notes to Consolidated Financial Statements included in this From 10-K). While we apply credit practices which we believe to be prudent to these loans as well as all the other loans in our portfolio, due to our concentration in dental lending we are exposed to the general risks of industry concentration, which include adverse market factors impacting that industry alone or disproportionately to other industries. In addition, bank regulatory authorities may in the future require us to limit additional lending in the dental industry if they have concerns that our concentration in that industry creates significant risks, which in turn could limit our ability to pursue new loans in an area where we believe we currently have a competitive advantage.

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Nonperforming assets take significant time to resolve and adversely affect our results of operations and financial condition.

At December 31, 2013, our nonperforming loans (which include all nonaccrual loans, net of government guarantees) were 0.46% of the loan portfolio. At December 31, 2013, our nonperforming assets (which include foreclosed real estate) were 1.45% of total assets. Nonperforming loans and assets adversely affect our net income in various ways. Until economic and market conditions improve, we expect to continue to incur losses relating to nonperforming assets. We generally do not record interest income on nonperforming loans or other real estate owned, thereby adversely affecting our income and increasing our loan administration costs. When we take collateral in foreclosures and similar proceedings, we are required to mark the related asset to the then fair market value of the collateral, less estimated selling expenses, which may ultimately result in a loss. An increase in the level of nonperforming assets increases our risk profile and may impact the capital levels our regulators believe are appropriate in light of the ensuing risk profile. While we reduce problem assets through loan sales, workouts, and restructurings and otherwise, decreases in the value of the underlying collateral, or in these borrowers’ performance or financial condition, whether or not due to economic and market conditions beyond our control, could adversely affect our business, results of operations and financial condition, perhaps materially. In addition, the resolution of nonperforming assets requires significant commitments of time from management and our directors which can be detrimental to the performance of their other responsibilities. Any significant future increase in nonperforming assets could have a material adverse effect on our business, financial condition and results of operations.

We may not have the ability to continue paying dividends on our common stock at current or historic levels.

On January 22, 2014, we announced a quarterly cash dividend of $0.10 per share, payable to shareholders of record on February 3, 2014, and declared a special cash dividend of $0.10 per share. For the year ended December 31, 2013, the Company paid $0.73 per share in dividends. Our ability to pay dividends on our common stock depends on a variety of factors. It is possible in the future that we may not be able to continue paying quarterly dividends commensurate with historic levels, if at all. As a holding company, a substantial portion of our cash flow typically comes from dividends our bank subsidiary pays to us. Cash dividends will depend on sufficient earnings to support them and adherence to bank regulatory requirements. If the Bank is not able to pay dividends to the Company, the Company may not be able to pay dividends on its common stock. Consequently, the inability to receive dividends from the Bank could adversely affect the Company’s financial condition, results of operations and prospects.

We may be required, in the future, to recognize impairment with respect to investment securities, including the FHLB stock we hold.

Our securities portfolio contains whole loan private mortgage-backed securities and municipal securities and currently includes securities with unrecognized losses. We may continue to observe volatility in the fair market value of these securities. We evaluate the securities portfolio for any other than temporary impairment (“OTTI”) each reporting period, as required by GAAP. Future evaluations of the securities portfolio could require us to recognize impairment charges. The credit quality of securities issued by certain municipalities has deteriorated in recent quarters. Although management does not believe the credit quality of the Company’s municipal securities has similarly deteriorated, such deterioration could occur in the future. For example, it is possible that government-sponsored programs to allow mortgages to be refinanced to lower rates could materially adversely impact the yield on our portfolio of mortgage-backed securities, since a significant portion of our investment portfolio is composed of such securities.

In addition, as a condition to membership in the FHLB, we are required to purchase and hold a certain amount of FHLB stock. Our stock purchase requirement is based, in part, upon the outstanding principal balance of advances from the FHLB. At December 31, 2013, we had stock in the FHLB totaling $10,425. The FHLB stock held by us is carried at cost and is subject to recoverability testing under applicable accounting standards. As of December 31, 2013, we did not recognize an impairment charge related to our FHLB stock holdings. Future negative changes to the financial condition of the FHLB could require us to recognize an impairment charge with respect to such holdings.

If the goodwill we have recorded in connection with acquisitions becomes impaired, it could have an adverse impact on our reported earnings.

At December 31, 2013, we had $22,881 of goodwill on our balance sheet. In accordance with GAAP, our goodwill is not amortized but rather evaluated for impairment on an annual basis or more frequently if events or circumstances indicate that a potential impairment exists. Such evaluation is based on a variety of qualitative and quantitative factors, including

26

macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, and other relevant entity-specific events. The last impairment test was performed at December 31, 2013. At December 31, 2013, we did not recognize an impairment charge related to our goodwill. Future evaluations of goodwill may result in findings of impairment and write downs, which would impact our operating results and could be material.

We face strong competition from financial services companies and other companies that offer banking services.

Our three major markets are in Oregon and Washington. The banking and financial services businesses in our market area are highly competitive and increased competition may adversely impact the level of our loans and deposits. Ultimately, we may not be able to compete successfully against current and future competitors. These competitors include national banks, foreign banks, regional banks and other community banks. We also face competition from many other types of financial institutions, including savings and loan associations, finance companies, brokerage firms, insurance companies, credit unions, mortgage banks and other financial intermediaries. In particular, our competitors include major financial companies whose greater resources may afford them a marketplace advantage by enabling them to maintain numerous locations and mount extensive promotional and advertising campaigns. Areas of competition include interest rates for loans and deposits, efforts to obtain loan and deposit customers and a range in quality of products and services provided, including new technology-driven products and services. If we are unable to attract and retain banking customers, we may be unable to develop loan growth or maintain our current level of deposits, which could adversely affect our business, financial condition and results of operations.

A failure in our operational systems or infrastructure, or those of third-parties, could impair our liquidity, disrupt our businesses, result in the unauthorized disclosure of confidential information, damage our reputation and cause financial losses.

We are dependent on third-parties and their ability to process and monitor, on a daily basis, a large number of transactions, many of which are highly complex, across numerous and diverse markets. These transactions, as well as the information technology services we provide to clients, often must adhere to client-specific guidelines, as well as legal and regulatory standards. Due to the breadth of our client base and our geographical reach, developing and maintaining our operational systems and infrastructure is challenging, particularly as a result of rapidly evolving legal and regulatory requirements and technological shifts. Our financial, accounting, data processing or other operating systems and facilities may fail to operate properly or become disabled as a result of events that are wholly or partially beyond our control, such as electrical, internet or telecommunications outages, a spike in transaction volume, a cyber-security attack or other unforeseen catastrophic events, which may adversely affect our ability to process these transactions or provide services.

In addition, our operations rely on the secure processing, storage and transmission of confidential and other information on our computer systems and networks. Although we take numerous protective measures to maintain the confidentiality, integrity and availability of our and our clients’ information across all geographic and product lines, and endeavor to modify these protective measures as circumstances warrant, the nature of the threats continues to evolve. As a result, our computer systems, software and networks may be vulnerable to unauthorized access, loss or destruction of data (including confidential client information), account takeovers, unavailability of service, computer viruses or other malicious code, cyber-security attacks and other events that could have an adverse security impact. Despite the defensive measures we take to manage our internal technological and operational infrastructure, these threats may originate externally from third-parties, such as foreign governments, organized crime and other hackers, and outsource or infrastructure-support providers and application developers, or the threats may originate from within our organization. These events could result in litigation or financial losses that are either not insured against or not fully covered by insurance, regulatory consequences or reputational harm, any of which could harm our competitive position, operating results and financial condition. These types of incidents can remain undetected for extended periods of time thereby increasing the associated risks. We may also be required to expend significant resources to modify our protective measures or to investigate and remediate vulnerabilities or exposures arising from cyber-security risks.

We also face the risk of operational disruption, failure, termination or capacity constraints of any of the third-parties that facilitate our business activities, including exchanges, clearing agents, clearing houses or other financial intermediaries. Such parties could also be the source of an attack on, or breach of, our operational systems, data or infrastructure. In addition, as interconnectivity with our clients grows, we increasingly face the risk of operational failure with respect to our clients’ systems.

To date we have not experienced any material losses relating to a cyber-security incident or other information security breaches, but there can be no assurance that we will not suffer such losses or information security breaches in the future. If one or more of these events occurs, it could potentially jeopardize the confidential, proprietary and other information

27

processed and stored in, and transmitted through, our computer systems and networks, or otherwise cause interruptions or malfunctions in our, as well as our clients’ or other third-parties’ operations, which could result in damage to our reputation, substantial costs, regulatory penalties and/or client dissatisfaction or loss. Potential costs of a cyber-security incident may include, but would not be limited to, remediation costs, increased protection costs, lost revenue from the unauthorized use of proprietary information or the loss of current and/or future customers, and litigation.

A recent data security breach at a large U.S. retailer recently resulted in the compromise of data related to credit and debit cards of large numbers of customers requiring many banks to reissue their customer’s credit and debit cards and reimburse customers for losses sustained. Proposals have been advanced to replace the magnetic-stripe cards commonly used in the U.S. with more secure smart-chip technology to reduce the risk of such data breaches. The costs of such a conversion could be considerable and it remains unclear at this time how much of such costs would be borne by retailers, card issuers and the banking industry.

We maintain an insurance policy which we believe provides sufficient coverage at a manageable expense for an institution of our size and scope with similar technological systems. However, we cannot assure that this policy would be sufficient to cover all financial losses, damages, penalties, including lost revenues, should we experience any one or more of our or a third-party’s systems failing or experiencing attack.

Our business and financial results could be impacted materially by adverse results in legal or regulatory proceedings.

As is the case with other banking institutions, we are from time to time subject to claims and proceedings related to our present or previous operations. In addition, we may be the subject of governmental investigations and other forms of regulatory inquiry from time to time. The results of these legal proceedings and governmental investigations and inquiries could lead to significant monetary damages or penalties, restrictions on the way in which we conduct our business, or reputational harm, and could involve significant defense or other costs. Although we establish accruals for legal proceedings when information related to the loss contingencies represented by those matters indicates both that a loss is probable and that the amount of loss can be reasonably estimated, we do not have accruals for all legal proceedings where we face a risk of loss. In addition, amounts accrued may not represent the ultimate loss to us from the legal proceedings in question. Thus, our ultimate losses may be higher or lower, and possibly significantly so, than the amounts accrued for legal loss contingencies. To mitigate the cost of some of these claims, we maintain insurance coverage in amounts and with deductibles that we believe are appropriate for our operations. However, our insurance coverage does not cover any civil money penalties or fines imposed by government authorities and may not cover all other claims that have been or might be brought against us, or continue to be available to us at a reasonable cost. As a result, we may be exposed to substantial uninsured liabilities, which could adversely affect our business, prospects, results of operations and financial condition.

Risks associated with potential acquisitions and expansion activities or divestitures may disrupt our business and adversely affect our operating results.

We regularly evaluate potential acquisitions and expansion opportunities. We have in the past, and may in the future, seek to expand our business by acquiring other businesses which we believe will enhance our business. We cannot predict the frequency, size or timing of our acquisitions, as this will depend on the availability of prospective target opportunities at valuation levels we find attractive and the competition for such opportunities from other parties. There can be no assurance that our acquisitions will have the anticipated positive results, including results related to: the total cost of integration; the retention of key personnel; the time required to complete the integration; the amount of longer-term cost savings; continued growth; or the overall performance of the acquired company or combined entity. We also may encounter difficulties in obtaining required regulatory approvals and unexpected contingent liabilities can arise from the businesses we acquire. Further, the asset quality or other financial characteristics of a business or assets we may acquire may deteriorate after an acquisition agreement is signed or after an acquisition closes, which could result in impairment or other expenses and charges which would reduce our operating results. Integration of an acquired business can be complex and costly. If we are not able to integrate successfully past or future acquisitions, there is a risk that results of operations could be adversely affected. To the extent that we grow through acquisitions, there is a risk that we will not be able to adequately or profitably manage this growth. In addition, we may sell or restructure portions of our business. Any divestitures or restructuring may result in significant expenses and write-offs, which would have a material adverse effect on our business, results of operations and financial condition, and may involve additional risks.

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We may pursue additional capital in the future, which could dilute the holders of our outstanding common stock and may adversely affect the market price of our common stock.

From time to time, particularly in the current uncertain economic environment, we may consider alternatives for raising capital when opportunities present themselves, in order to further strengthen our capital and/or better position ourselves to take advantage of identified or potential opportunities that may arise in the future. Such alternatives may include issuance and sale of common or preferred stock, or borrowings by the Company, with proceeds contributed to the Bank. Any such capital raising alternatives could dilute the holders of our outstanding common stock and may adversely affect the market price of our common stock.

Anti-takeover provisions in our amended and restated articles of incorporation and bylaws and Oregon law could make a third-party acquisition of us difficult.

Our amended and restated articles of incorporation contain provisions that could make it more difficult for a third-party to acquire us (even if doing so would be beneficial to our shareholders) and for holders of our common stock to receive any related takeover premium for their common stock. We are also subject to certain provisions of Oregon law that could delay, deter or prevent a change in control of us. These provisions could limit the price that investors might be willing to pay in the future for shares of our common stock.

ITEM 1B Unresolved Staff Comments

None

ITEM 2 Properties

The principal properties of the Company are comprised of the banking facilities owned by the Bank. The Bank operates fourteen full-service facilities and two loan production offices. The Bank owns a total of eight buildings and, with the exception of two buildings, owns the land on which these buildings are situated. Significant properties owned by the Bank are as follows:

1) Three-story building and land with approximately 30,000 square feet located on Olive Street in Eugene, Oregon.

2) Building with approximately 4,000 square feet located on West 11^th Avenue in Eugene, Oregon. The building is on leased land.

3) Building and land with approximately 8,000 square feet located on High Street in Eugene, Oregon.

4) Three-story building and land with approximately 31,000 square feet located in Springfield, Oregon. The Company occupies approximately 5,500 square feet of the first floor and approximately 10,763 square feet on the second floor and leases, or is seeking to lease, the remaining space.

5) Building and land with approximately 3,500 square feet located in Beaverton, Oregon.

6) Building and land with approximately 2,000 square feet located in Junction City, Oregon.

7) Building and land with approximately 5,000 square feet located near the Convention Center in Portland, Oregon.

8) Building with approximately 6,800 square feet located at the Nyberg Shopping Center in Tualatin, Oregon. The building is on leased land.

The Bank leases facilities for branch offices in Eugene, Oregon, Portland, Oregon, Seattle, Washington, Bellevue, Washington, and Vancouver, Washington. The Company also leases facilities for a loan production office in Tacoma, Washington. In addition, the Company leases a portion of an adjoining building to the High Street office for administrative and training functions. Management considers all owned and leased facilities adequate for current use.

ITEM 3 Legal Proceedings

On August 23, 2013, a putative class action lawsuit was filed in the Circuit Court of the State of Oregon for the County of Multnomah on behalf of individuals who placed money with Berjac of Oregon and Berjac of Portland, both currently in Chapter 11 bankruptcy. The lawsuit, which alleges violations of state securities laws and aiding breach of fiduciary duty, names Pacific Continental Bank, along with Holcomb Family Limited Partnership, Fred “Jack” W. Holcomb, Holcomb Family Trust, Jones & Roth, P.C. and Umpqua Bank, as defendants. Claimants seek the return of the money placed with Berjac of Oregon and Berjac of Portland, plus interest, and costs and attorneys’ fees, which are claimed to be in excess of $10 million.

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We may from time to time be involved in claims, proceedings and litigation arising from our business and property ownership. We believe, based on currently available information, that the results of such proceedings, including the above-described proceeding, in the aggregate, will not have a material adverse effect on our financial condition.

ITEM 4 Mine Safety Disclosures

Not applicable.

PART II

ITEM 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information and Shareholders

The Company’s common stock is traded on the NASDAQ Global Select Market under the symbol PCBK. At February 28, 2014, the Company had 17,895,114 shares of common stock outstanding held by approximately 2,581 shareholders of record.

The high, low and closing sales prices (based on daily closing price) for the last eight quarters are shown in the table below.

YEAR	2013								2012
QUARTER	Fourth		Third		Second		First		Fourth		Third		Second		First
Market value:
High	$	16.27	$	13.69	$	11.80	$	11.51	$	9.75	$	9.45	$	9.71	$	9.81
Low		12.54		11.79		10.10		9.61		8.92		8.86		8.42		8.34
Close		15.94		13.11		11.80		11.17		9.73		8.93		8.87		9.42

Dividends

The Company has generally paid cash dividends on a quarterly basis. Cash dividends, when and if declared, will be declared and announced simultaneously with the Company’s quarterly earnings releases in January, April, July, and October each year with dividends to be paid in February, May, August, and November. The Board of Directors considers the dividend amount quarterly and takes a broad perspective in its dividend deliberations, including a review of recent operating performance, capital levels, and concentrations of loans as a percentage of capital, as well as growth projections. The Board also considers dividend payout ratios, dividend yield, and other financial metrics in setting the quarterly dividend. Regulatory authorities may prohibit the Company from paying dividends in a manner that would constitute an unsafe or unsound banking practice or would reduce the amount of its capital below that necessary to meet minimum applicable regulatory capital requirements. Current guidance from the Federal Reserve provides, among other things, that dividends per share generally should not exceed earnings per share, measured over the previous four fiscal quarters.

YEAR	2013								2012
QUARTER	Fourth		Third		Second		First		Fourth		Third		Second		First
Regular cash dividend	$	0.10	$	0.09	$	0.09	$	0.08	$	0.07	$	0.06	$	0.05	$	0.05
Special cash dividend		0.12		0.12		0.05		0.08		0.04		0.03		—		—
Total dividend	$	0.22	$	0.21	$	0.14	$	0.16	$	0.11	$	0.09	$	0.05	$	0.05

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Equity Compensation Plan Information

	Year Ended December 31, 2013
	Number of shares to be issued upon exercise of outstanding options, warrants and rights (2)		Weighted-average exercise price of outstanding options, warrants and rights (2) (3)		Number of shares remaining available for future issuance under equity compensation plans (2)
Equity compensation plans approved by security holders(1)		1,005,360	$	14.01		551,967
Equity compensation plans not approved by security holders		—		—		—
Total		1,005,360	$	14.01		551,967

⁽¹⁾  Under the Company’s respective equity compensation plans, the Company may grant incentive stock options and non-qualified stock options, restricted stock, restricted stock units and stock appreciation rights to its employees and directors; however, only employees may receive incentive stock options.

⁽²⁾  All amounts have been adjusted to reflect subsequent stock splits and stock dividends.

⁽³⁾ Weighted average exercise price is based solely on equity grants with an exercise price.

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Performance Graph

The information contained in the following chart entitled “Total Return Performance” is not considered to be “soliciting material,” or “filed,” or incorporated by reference in any past or future filing by the Company under the Securities Exchange Act of 1934 or the Securities Act of 1933 unless and only to the extent that the Company specifically incorporates it by reference.

The above graph and following table compares the total cumulative shareholder return on the Company’s Common Stock, based on reinvestment of all dividends, to the cumulative total returns of the Russell 2000 Index and SNL Securities $1 Billion to $5 Billion Bank Asset Size Index. The graph assumes $100 invested on December 31, 2008, in the Company’s Common Stock and each of the indices.

	Period Ending
Index	12/31/08		12/31/09		12/31/10		12/31/11		12/31/12		12/31/13
Pacific Continental Corporation		100.00		78.08		68.96		61.35		69.79		121.37
Russell 2000		100.00		127.17		161.32		154.59		179.86		249.69
SNL Bank $1B-$5B		100.00		71.68		81.25		74.10		91.37		132.87

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ITEM 6 Selected Financial Data

Selected financial data for the past five years is shown in the table below.

(Dollars in thousands, except for per share data)

	2013			2012			2011			2010			2009
For the year
Net interest income	$	56,139		$	50,076		$	51,169		$	51,261		$	54,039
Provision for loan losses		250			1,900			12,900			15,000			36,000
Noninterest income		5,826			5,741			5,866			4,649			4,405
Noninterest expense		40,732			35,105			37,076			33,094			31,162
Income tax expense (benefit)		7,216			6,159			1,718			2,724			(3,839	)
Net income (loss)		13,767			12,653			5,341			5,092			(4,879	)
Cash dividends		13,050			5,588			1,842			736			3,272
Per common share data
Net income (loss):
Basic	$	0.77		$	0.70		$	0.29		$	0.28		$	(0.35	)
Diluted		0.76			0.69			0.29			0.28			(0.35	)
Regular cash dividends	$	0.36		$	0.24		$	0.10		$	0.04		$	0.25
Special cash dividends		0.37			0.07			—			—			—
Total dividends	$	0.73		$	0.31		$	0.10		$	0.04		$	0.25
Book value	$	10.01		$	10.28		$	9.70		$	9.35		$	9.01
Tangible book value(3)		8.69			9.05			8.50			8.13			7.77
Market value, end of year		15.94			9.73			8.85			10.06			11.44
At year end
Assets	$	1,449,726		$	1,373,487		$	1,270,232		$	1,210,176		$	1,199,113
Loans, less allowance for loan loss (1)		977,928			854,071			806,269			841,931			930,997
Available-for-sale securities		347,386			389,885			346,542			253,907			167,618
Core deposits (2)		990,315			938,629			885,843			895,838			771,986
Total deposits		1,090,981			1,046,154			965,254			958,959			827,918
Shareholders’ equity		179,184			183,381			178,866			172,238			165,662
Tangible equity (3)		155,568			161,350			156,631			149,780			142,981
Average for the year
Assets	$	1,433,213		$	1,317,094		$	1,226,715		$	1,189,289		$	1,129,971
Earning assets		1,309,483			1,201,573			1,122,535			1,086,677			1,051,315
Loans, less allowance for loan loss (1)		943,381			816,655			817,915			887,594			943,788
Available-for-sale securities		365,889			384,810			304,424			198,507			96,549
Core deposits (2)		967,592			877,256			879,779			827,082			703,894
Total deposits		1,074,166			972,854			945,187			904,169			782,835
Interest-paying liabilities		912,022			833,680			781,925			799,638			810,380
Shareholders’ equity		180,857			181,475			177,256			170,758			135,470
Financial ratios
Return on average:
Assets		0.96	%		0.96	%		0.44	%		0.43	%		-0.43	%
Equity		7.61	%		6.97	%		3.01	%		2.98	%		-3.60	%
Tangible equity (3)		8.75	%		7.94	%		3.45	%		3.44	%		-4.33	%
Avg shareholders’ equity / avg assets		12.62	%		13.78	%		14.45	%		14.36	%		11.99	%
Dividend payout ratio		94.79	%		44.16	%		34.49	%		14.45	%		NM
Risk-based capital:
Tier I capital		14.90	%		16.90	%		17.97	%		15.86	%		14.38	%
Total capital		16.15	%		18.15	%		19.22	%		17.10	%		15.63	%

⁽¹⁾  Outstanding loans include loans held-for-sale and net deferred fees.

⁽²⁾  Core deposits include all demand, interest checking, money market, savings and local non-public time deposits, including local non-public time deposits in excess of $100.

⁽³⁾  Tangible book value per share and tangible equity exclude goodwill and core deposit intangibles related to acquisitions. See Management’s Discussion and Analysis of Financial Condition and Results of Operations—“Results of Operations Overview” in the Form 10-K for a reconciliation of non-GAAP financial measures.

NM—Not meaningful

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ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operation

The following discussion is intended to provide a more comprehensive review of the Company’s operating results and financial condition than can be obtained from reading the Consolidated Financial Statements alone. The discussion should be read in conjunction with the audited financial statements and the notes included later in this Form 10-K. All dollar amounts, except per share data, are expressed in thousands of dollars.

HIGHLIGHTS

	2013			2012			% Change 2013 vs. 2012			2011			% Change 2012 vs. 2011
Net income	$	13,767		$	12,653			8.8	%	$	5,341			136.9	%
Operating revenue (1)		61,965			55,817			11.0	%		57,035			-2.1	%
Earnings per share
Basic	$	0.77		$	0.70			10.0	%	$	0.29			141.4	%
Diluted	$	0.76		$	0.69			10.1	%	$	0.29			137.9	%
Assets, period-end	$	1,449,726		$	1,373,487			5.6	%	$	1,270,232			8.1	%
Gross loans, period-end (2)		994,769			871,257			14.2	%		820,829			6.1	%
Core deposits, period-end (3)		990,315			938,629			5.5	%		885,843			6.0	%
Deposits, period-end		1,090,981			1,046,154			4.3	%		965,254			8.4	%
Return on average assets		0.96	%		0.96	%					0.44	%
Return on average equity		7.61	%		6.97	%					3.01	%
Return on average tangible equity (4)		8.75	%		7.94	%					3.45	%
Avg shareholders’ equity / avg assets		12.62	%		13.78	%					14.45	%
Dividend payout ratio		94.79	%		44.16	%					34.49	%
Net interest margin (5)		4.37	%		4.24	%					4.61	%
Efficiency ratio		65.73	%		62.89	%					65.01	%

⁽¹⁾  Operating revenue is defined as net interest income plus noninterest income.

⁽²⁾  Excludes loans held-for-sale, net deferred fees and allowance for loan losses.

⁽³⁾  Defined by the Company as demand, interest checking, money market, savings and local non-public time deposits, including local non-public time deposits in excess of $100.

⁽⁴⁾  Tangible equity excludes goodwill and core deposit intangibles related to acquisitions.

⁽⁵⁾  Presentation of net interest margin for all periods reported has been adjusted to a tax- equivalent basis using a 35% tax rate.

Results of Operations—Overview

The Company recorded net income of $13,767 for the year 2013, an improvement of $1,114 or 8.80% over the prior year. The results for 2013 included $1,246 in merger related expenses associated with the acquisition of Century Bank during the first quarter 2013. Improvement in 2013 net income over 2012 was due to increased revenues, specifically net interest income and a lower provision for loan losses, which more than offset an increase in noninterest expense. The increase in net interest income was attributable to an increase in loans, both loans acquired in the Century Bank transaction and organic loan growth, combined with an improvement in the net interest margin. The provision for loan losses in 2013 was $250, down $1,650 from 2012. This decline was primarily due to reductions in classified assets, nonperforming loans and recoveries booked during the year. A portion of the improvement in net interest income and the provision for loan losses was offset by higher noninterest expenses, primarily personnel expense, other real estate expense, and merger related expenses.

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The Company recorded net income of $12,653 for 2012 compared to net income of $5,341 in 2011. The improvement in 2012 net income over the prior year was largely due to a lower provision for loan losses and a decrease in noninterest expense. The provision for loan losses in 2012 was $1,900, down $11,000 from the $12,900 recorded in 2011. This decline in the provision for loan losses was due to significantly lower net loan charge offs, a reduction in classified assets, and reductions in nonperforming assets. Noninterest expense for the year 2012 was $35,105, a $1,971 or 5.32% decrease from 2011. The decline in noninterest expense was due to lower FDIC insurance assessments, reduced costs associated with problem assets, specifically legal fees and collection costs related to problem loans, and other real estate expenses, particularly valuation write downs on other real estate owned.

Year-end assets at December 31, 2013, were $1,449,726, up $76,239 or 5.55% from December 31, 2012, asset totals. Growth in assets was due to an increase in outstanding net loans of $123,857, which included loans acquired in the Century Bank transaction. Growth in outstanding loans was partially offset by a $42,499 decline in the Company’s securities portfolio. The Company experienced a more typical seasonal core deposit pattern with deposit outflows occurring during the first half of the year followed by growth in core deposits during the second half of the year. Outstanding core deposits were $990,315 at December 31, 2013, up $51,686 or 5.51% over the prior year-end. Growth in the Company’s demand deposits accounted for $37,066 of the increase in core deposits and which were up 11.24% over December 31, 2012, outstanding demand deposits.

Average assets for the year 2013 were $1,433,213, up $116,119 or 8.82% over 2012, due to growth in average outstanding loans. Growth in average loans in 2013 over the prior year was partially funded by a decline in the average balance of the securities portfolio. Average core deposits for the year 2013 were $967,592, up $90,336 or 10.30% over average core deposits in 2012. Average core deposits in 2013 include core deposits acquired in the Century Bank transaction.

During 2014, the Company believes the following factors could impact our financial results:

• Changes and volatility in interest rates could negatively impact yields on earning assets and the cost of interest-bearing liabilities, thus negatively affecting the Company’s net interest margin and net interest income.

• The availability of low-cost wholesale funding sources due to disruption in the financial and capital markets.

• The ability to manage noninterest expense growth in light of anticipated increases in regulatory compliance cost.

• Potential expenses related to other real estate owned, specifically valuation write downs.

• The ability to attract and retain qualified and experienced bankers in our markets.

• The possible reduction in federal, state and local government spending that could affect national, regional, and local economies as well as negatively affect loan demand, the credit quality of existing clients with lending relationships, unemployment rates, and vacancy rates of commercial real estate properties.

Reconciliation of non-GAAP financial information

Management utilizes certain non-GAAP financial measures to monitor the Company’s performance. While we believe the presentation of non-GAAP financial measures provides additional insight into our operating performance, readers of this report are urged to review the GAAP results as presented in the Financial Statements and Supplementary Data in this Form 10-K.

The Company presents a computation of tangible equity along with tangible book value and return on average tangible equity. The Company defines tangible equity as total shareholders’ equity before goodwill and core deposit intangible assets. Tangible book value is calculated as tangible equity divided by total shares outstanding. Return on average tangible equity is calculated as net income divided by average tangible equity. We believe that tangible equity and certain tangible equity ratios are meaningful measures of capital adequacy which may be used when making period-to-period and company-to-company comparisons. Tangible equity and tangible equity ratios are considered to be non-GAAP financial measures and should be viewed in conjunction with total shareholders’ equity, book value and return on average equity. The following table presents a reconciliation of total shareholders’ equity to tangible equity.

35

	2013			2012			2011
Total shareholders’ equity	$	179,184		$	183,381		$	178,866
Subtract:
Goodwill		(22,881	)		(22,031	)		(22,031	)
Core deposit intangibles		(735	)		—			(204	)
Tangible shareholders’ equity (non-GAAP)	$	155,568		$	161,350		$	156,631
Book value	$	10.01		$	10.28		$	9.70
Tangible book value (non-GAAP)	$	8.69		$	9.05		$	8.50
	2013			2012			2011
Average Total shareholders’ equity	$	180,856		$	181,475		$	177,256
Subtract:
Average Goodwill		(22,667	)		(22,031	)		(22,031	)
Average Core deposit intangibles		(724	)		(95	)		(317	)
Average Tangible shareholders’ equity (non-GAAP)	$	157,465		$	159,349		$	154,908
Return on average equity		7.61	%		6.97	%		3.01	%
Return on average tangible equity (non-GAAP)		8.75	%		7.94	%		3.45	%

Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although we believe these non-GAAP financial measure are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools, and should not be considered in isolation or as a substitute for analyses of results as reported under GAAP.

SUMMARY OF CRITICAL ACCOUNTING POLICIES

We follow accounting standards set by the Financial Accounting Standards Board, commonly referred to as the “FASB.” The FASB sets generally accepted accounting principles (“GAAP”) that we follow to ensure we consistently report our financial condition, results of operations, and cash flows. References to GAAP issued by the FASB in this report are to the “FASB Accounting Standards Codification”, sometimes referred to as the “Codification,” or “ASC.” The FASB finalized the Codification effective for periods ending on or after September 15, 2009. Prior FASB Statements, Interpretations, Positions, EITF consensuses, and AICPA Statements of Position are no longer being issued by the FASB. The Codification does not change how the Company accounts for its transactions or the nature of related disclosures made. However, when referring to guidance issued by the FASB, the Company refers to topics in the ASC rather than the specific FASB statement. We have updated references to GAAP in this report to reflect the guidance in the Codification.

The SEC defines “critical accounting policies” as those that require the application of management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in future periods. Significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements for the year ended December 31, 2013, in this Form 10-K. Management believes that the following policies and those disclosed in the Notes to Consolidated Financial Statements should be considered critical under the SEC definition:

Nonaccrual Loans

Accrual of interest is discontinued on contractually delinquent loans when management believes that, after considering economic and business conditions and collection efforts, the borrower’s financial condition is such that collection of principal or interest is doubtful. At a minimum, loans that are past due as to maturity or payment of principal or interest by 90 days or more are placed on nonaccrual status, unless such loans are well-secured and in the process of collection. Interest income is subsequently recognized only to the extent cash payments are received satisfying all delinquent principal and interest amounts, and the prospects for future payments in accordance with the loan agreement appear relatively certain. In accordance with GAAP, payments received on nonaccrual loans are applied to the principal balance and no interest income is recognized.

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Allowance for Loan Losses and Reserve for Unfunded Commitments

The allowance for loan losses on outstanding loans is classified as a contra-asset account offsetting outstanding loans, and the allowance for unfunded commitments is classified as an “other” liability on the balance sheet. The allowance for loan losses is established through a provision for loan losses charged against earnings. The balances of the allowance for loan losses for outstanding loans and unfunded commitments are maintained at an amount management believes will be adequate to absorb known and inherent losses in the loan portfolio and commitments to loan funds. The appropriate balance of the allowance for loan losses is determined by applying loss factors to the credit exposure from outstanding loans and unfunded loan commitments. Estimated loss factors are based on subjective measurements including management’s assessment of the internal risk classifications, changes in the nature of the loan portfolios, industry concentrations, and the impact of current local, regional, and national economic factors on the quality of the loan portfolio. Changes in these estimates and assumptions are reasonably possible and may have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

Troubled Debt Restructurings

In the normal course of business, the Company may modify the terms of certain loans, attempting to protect as much of its investment as possible. Management evaluates the circumstances surrounding each modification to determine whether it is a troubled debt restructuring (“TDR”). TDRs exist when 1) the restructuring constitutes a concession, and 2) the debtor is experiencing financial difficulties. Additional information regarding the Company’s troubled debt restructurings can be found in Note 3 of the Notes to Consolidated Financial Statements in this Form 10-K.

Goodwill and Intangible Assets

At December 31, 2013, the Company had a recorded balance of $22,881 in goodwill from the November 30, 2005, acquisition of Northwest Business Financial Corporation (“NWBF”) and the February 1, 2013, acquisition of Century Bank. In addition, at December 31, 2013, the Company had $735 of core deposit intangible assets resulting from the acquisition of Century Bank. The Century Bank core deposit intangible was determined to have an expected life of seven years, and is being amortized over that period using the straight-line method. The Century Bank core deposit intangible will be fully amortized in January 2020. In accordance with GAAP, the Company does not amortize goodwill or other intangible assets with indefinite lives but instead periodically tests these assets for impairment. Management performs an impairment analysis of the intangible assets with indefinite lives at least annually, but more frequently if an impairment triggering event is deemed to have occurred. The last impairment test was performed at December 31, 2013, at which time no impairment was determined to exist.

Share-based Compensation

Consistent with the provisions of FASB ASC 718, Stock Compensation, a revision to the previously issued guidance on accounting for stock options and other forms of equity-based compensation, we recognize expense for the grant-date fair value of stock options and other equity-based forms of compensation issued to employees over the employees’ requisite service period (generally the vesting period). The requisite service period may be subject to performance conditions. The fair value of each option grant is estimated as of the grant date using the Black-Scholes option-pricing model. Management assumptions utilized at the time of grant impact the fair value of the option calculated under the Black-Scholes methodology, and ultimately, the expense that will be recognized over the service period of the option. Additional information is included in Note 1 of the Notes to Consolidated Financial Statements in this Form 10-K.

Fair Value Measurements

Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820, Fair Value Measurements, establishes a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable. Observable inputs reflect market-derived or market-based information obtained from independent sources while unobservable inputs reflect our estimates about market data. In general, fair values determined by Level 1 inputs utilize quoted prices for identical assets or liabilities traded in active markets that the Company has the

37

ability to access. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Recent Accounting Pronouncements

Recent accounting pronouncements are discussed in Note 1 of the Notes to Consolidated Financial Statements for the year ended December 31, 2013, in this Form 10-K. None of these pronouncements are expected to have a significant effect on the Company’s financial condition or results of operations.

RESULTS OF OPERATIONS

Net Interest Income

The largest component of the Company’s earnings is net interest income. Net interest income is the difference between interest income derived from earning assets, principally loans, and the interest expense associated with interest-bearing liabilities, principally deposits. The volume and mix of earning assets and funding sources, market rates of interest, demand for loans, and the availability of deposits affect net interest income.

Two tables follow which analyze the changes in net interest income for the years 2013, 2012 and 2011. Table I, “Average Balance Analysis of Net Interest Income,” provides information with regard to average balances of assets and liabilities as well as associated dollar amounts of interest income and interest expense, relevant average yields or rates, and net interest income as a percent of average earning assets. Net interest income and the net interest margin for all periods reported have been adjusted to a tax-equivalent basis using a 35.00% tax rate. Table II, “Analysis of Changes in Interest Income and Interest Expense,” shows the increase (decrease) in the dollar amount of interest income and interest expense and the differences attributable to changes in either volume or rates.

2013 Compared to 2012

The net interest margin for the year 2013 was 4.37%, an improvement of 13 basis points over the 4.24% net interest margin reported for 2012. Most of the improvement in the 2013 net interest margin over the prior year was due to a lower cost of funds as earning asset yields were relatively stable. Table I shows that earning asset yields improved by 1 basis point to 4.73% in 2013 from 4.72% in 2012. However, the yield on earning assets was positively affected by two nonrecurring items: 1) collection of $982 of interest income on loans previously on nonaccrual status during third quarter 2013; and 2) $220 in interest income due to a prepayment penalty collected on an early loan pay off during fourth quarter 2013. These two nonrecurring items added 9 basis points to the 2013 net interest margin. In addition, the company recorded $913 in interest income during 2013 in accretion of the fair value loan marks related to the Century Bank transaction, which added another 7 basis points to the 2013 net interest margin. Excluding the nonrecurring items and accretion of loan fair value marks, the core net interest margin for 2013 was 4.20%, or a decline of 4 basis points from the prior year.

While earning asset yields remained relatively stable, the cost of interest-bearing liabilities in 2013 dropped 17 basis points from 0.70% in 2012 to 0.53% in the current year. Much of the decline was attributable to the cost of interest-bearing core deposits, which were down 13 basis points in 2013 from 2012 levels. In addition, all categories of interest-bearing wholesale funding showed declines in 2013 from the previous year with the exception of the rate paid on trust preferred securities, which increased from 1.83% in 2012 to 2.42% in 2013. During April 2013, the Company entered into a swap agreement with a third party, which fixed the rate on its $8,000 of trust preferred securities at 2.73% for seven years. Prior to the swap agreement, the Company paid a variable rate on its trust preferred securities based on three-month LIBOR plus 135 basis points. In addition to a lower cost of interest-bearing liabilities, the Company’s net interest margin benefitted from free funding in the form of average non-interest bearing demand deposits for the year 2013, which increased $38,635, or 12.99% over the prior year.

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The year-to-date December 31, 2013, rate/volume analysis in Table II shows that interest income including loan fees increased by $5,197 over 2012. Higher volume, specifically higher loan volume, resulted in an increase of $7,369 in interest income, which was partially offset by a $2,172 decline in interest income due to lower rates on loans. The rate/volume analysis shows that interest expense for the year 2013 decreased by $1,024 from 2012 with interest expense on core deposits and wholesale funding declining by $590 and $434, respectively. Overall, higher volumes or changes in volume mix increased interest expense by $626, while lower rates on interest-bearing liabilities decreased interest expense by $1,650.

2012 Compared to 2011

The net interest margin for the full year 2012 was 4.24%, a decline of 37 basis points from the 4.61% net interest margin for the year 2011. Table I shows that earning asset yields declined by 65 basis points to 4.72% for the year 2012 when compared to 5.37% for 2011. The decline in earning assets yields was primarily due to the following factors: 1) a decline in yields on securities available-for-sale due to lower reinvestment rates available on new security purchases, 2) a decline in yields on loans resulting from new loan production booked at rates lower than the portfolio average, and 3) a change in the mix of earning assets as average lower yielding securities represented 32.03% of total average earning assets for the year 2012 compared to 27.12% in 2011.

Table I also shows that the overall cost of interest-bearing liabilities for the year 2012 was down 40 basis points from 1.10% in 2011 to 0.70% in 2012 and partially offset the decline in earning asset yields. The cost of both interest-bearing core deposits and interest-bearing wholesale funding fell in 2012 when compared to the prior year. The cost of interest-bearing core deposits dropped by 39 basis points in 2012 from 2011, while the cost of interest-bearing wholesale funding also moved down 79 basis points from 2.00% in 2011 to 1.21% in 2012. In 2012, the Company increased its usage of wholesale funding, specifically short-term non-core time deposits and short-term FHLB advances, to fund asset growth.

The year-to-date December 31, 2012, rate/volume analysis in Table II shows that interest income including loan fees decreased by $3,544 from 2011. Higher volume, specifically higher taxable and tax-exempt securities volume, resulted in an increase of $2,849 in interest income, which was more than offset by a $6,393 decline in interest income due to lower rates on both securities and loans. The rate/volume analysis shows that interest expense for the year 2012 decreased by $2,797 from 2011. Overall, changes in volumes or changes in volume mix increased interest expense by $1,444, while lower rates on interest-bearing liabilities decreased interest expense by $4,241.

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Table I

Average Balance Analysis of Net Interest Income

(dollars in thousands)

	Twelve Months Ended December 31, 2013								Twelve Months Ended December 31, 2012								Twelve Months Ended December 31, 2011
	Average Balance		Interest Income or (Expense)			Average Yields or Rates			Average Balance		Interest Income or (Expense)			Average Yields or Rates			Average Balance		Interest Income or (Expense)			Average Yields or Rates
Interest-earning assets
Federal funds sold and interest-bearing deposits	$	213	$	10			4.69	%	$	108	$	6			5.56	%	$	196	$	6			3.06	%
Securities available-for-sale:
Taxable		296,574		5,730			1.93	%		326,159		6,171			1.89	%		273,884		8,043			2.94	%
Tax-exempt (1)		69,315		2,951			4.26	%		58,651		2,500			4.26	%		30,540		1,511			4.95	%
Loans held-for-sale		—		—			0.00	%		190		7			3.68	%		496		25			5.04	%
Loans, net of deferred fees and allowance (2)		943,381		53,275			5.65	%		816,465		48,085			5.89	%		817,419		50,728			6.21	%
Total interest-earning assets (1)		1,309,483		61,966			4.73	%		1,201,573		56,769			4.72	%		1,122,535		60,313			5.37	%
Non earning assets
Cash and due from banks		21,784								20,393								19,914
Premises and equipment		19,223								19,710								20,531
Goodwill & intangible assets		23,579								22,126								22,348
Interest receivable and other		59,144								53,292								41,387
Total nonearning assets		123,730								115,521								104,180
Total assets	$	1,433,213							$	1,317,094							$	1,226,715
Interest-bearing liabilities
Money market and NOW accounts	$	518,031	$	(1,586	)		-0.31	%	$	483,110	$	(2,011	)		-0.42	%	$	505,558	$	(3,635	)		-0.72	%
Savings deposits		41,930		(52	)		-0.12	%		37,994		(59	)		-0.16	%		35,368		(150	)		-0.42	%
Time deposits—core		71,568		(509	)		-0.71	%		58,724		(667	)		-1.14	%		74,938		(1,511	)		-2.02	%
Total interest-bearing core deposits (3)		631,529		(2,147	)		-0.34	%		579,828		(2,737	)		-0.47	%		615,864		(5,296	)		-0.86	%
Time deposits—non-core		106,574		(1,242	)		-1.17	%		95,598		(1,322	)		-1.38	%		65,408		(1,248	)		-1.91	%
Federal funds purchased		3,369		(16	)		-0.47	%		4,497		(24	)		-0.53	%		7,771		(41	)		-0.53	%
FHLB & FRB borrowings		162,302		(1,189	)		-0.73	%		145,509		(1,584	)		-1.09	%		84,634		(1,894	)		-2.24	%
Trust preferred		8,248		(200	)		-2.42	%		8,248		(151	)		-1.83	%		8,248		(136	)		-1.65	%
Total interest-bearing wholesale funding		280,493		(2,647	)		-0.94	%		253,852		(3,081	)		-1.21	%		166,061		(3,319	)		-2.00	%
Total interest-bearing liabilities		912,022		(4,794	)		-0.53	%		833,680		(5,818	)		-0.70	%		781,925		(8,615	)		-1.10	%
Noninterest-bearing liabilities
Demand deposits		336,063								297,428								263,915
Interest payable and other		4,271								4,511								3,619
Total noninterest liabilities		340,334								301,939								267,534
Total liabilities		1,252,356								1,135,619								1,049,459
Shareholders’ equity		180,857								181,475								177,256
Total liabilities and shareholders’ equity	$	1,433,213							$	1,317,094							$	1,226,715
Net interest income			$	57,172							$	50,951							$	51,698
Net interest margin (1)				4.37	%							4.24	%							4.61	%

⁽¹⁾ 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 $1,033, $875, and $529 for the twelve months ended December 31, 2013, 2012, and 2011, respectively. Net interest margin was positively impacted by 8, 7, and 5 basis points, respectively.

⁽²⁾ Interest income includes recognized loan origination fees of $523, $243, and $102 for the twelve months ended December 31, 2013, 2012, and 2011, respectively.

⁽³⁾ Defined by the Company as interest checking, money market, savings and local non-public time deposits, including local non-public time deposits in excess of $100.

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Table II

Analysis of Changes in Interest Income and Interest Expense

(dollars in thousands)

	2013 compared to 2012 Increase (decrease) due to									2012 compared to 2011 Increase (decrease) due to
	Volume			Rate			Net			Volume			Rate			Net
Interest earned on:
Federal funds sold and interest-bearing deposits	$	6		$	(2	)	$	4		$	(3	)	$	3		$	—
Securities available-for-sale:
Taxable		(560	)		119			(441	)		1,535			(3,407	)		(1,872	)
Tax-exempt (1)		455			(4	)		451			1,391			(402	)		989
Loans held-for-sale		(7	)		—			(7	)		(15	)		(3	)		(18	)
Loans, net of deferred fees and allowance		7,475			(2,285	)		5,190			(59	)		(2,584	)		(2,643	)
Total interest-earning assets (1)		7,369			(2,172	)		5,197			2,849			(6,393	)		(3,544	)
Interest paid on:
Money market and NOW accounts		145			(570	)		(425	)		(161	)		(1,463	)		(1,624	)
Savings deposits		6			(13	)		(7	)		11			(102	)		(91	)
Time deposits—core (2)		146			(304	)		(158	)		(327	)		(517	)		(844	)
Total interest-bearing core deposits		297			(887	)		(590	)		(477	)		(2,082	)		(2,559	)
Time deposits—non-core		152			(232	)		(80	)		576			(502	)		74
Federal funds purchased		(6	)		(2	)		(8	)		(17	)		—			(17	)
FHLB & FRB borrowings		183			(578	)		(395	)		1,362			(1,672	)		(310	)
Trust preferred		—			49			49			—			15			15
Total interest-bearing wholesale funding		329			(763	)		(434	)		1,921			(2,159	)		(238	)
Total interest-bearing liabilities		626			(1,650	)		(1,024	)		1,444			(4,241	)		(2,797	)
Net interest income (1)	$	6,743		$	(522	)	$	6,221		$	1,405		$	(2,152	)	$	(747	)

⁽¹⁾ 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 $1,033, $875 and $529 for the twelve months ended December 31, 2013, 2012, and 2011, respectively.

⁽²⁾ Defined by the Company as interest checking, money market, savings and local non-public time deposits, including local non-public time deposits in excess of $100.

Provision for Loan Losses

Management provides for possible loan losses by maintaining an allowance. The level of the allowance is determined based upon judgments regarding the size and nature of the loan portfolio, historical loss experience, the financial condition of borrowers, the level of nonperforming loans, and current general economic conditions. Additions to the allowance are charged to expense. Loans are charged against the allowance when management believes the collection of principal is unlikely.

The provision for loan losses was $250 in 2013 compared to $1,900 for the year 2012. The decrease in the 2013 provision for loan losses when compared to 2012 was primarily due to reductions in the levels of classified and nonperforming assets and recoveries booked during the year. Net charge offs for the year 2013 were $678 or 0.07% of average loans compared to $496 of net charge offs or 0.06% of average loans in 2012. Classified assets at December 31, 2013, were $52,050, down $4,032 from classified assets of $56,082 at December 31, 2012. Classified assets as a percentage of regulatory capital were 29.37% at December 31, 2013, compared to 31.92% at December 31, 2012. Nonperforming assets, net of government guaranteed loans at December 31, 2013, were $20,963, down $5,465 from the prior year-end.

The provision for loan losses was $1,900 in 2012 compared to $12,900 for the year 2011. The decrease in the 2012 provision for loan losses when compared to 2011 was primarily due to lower net loan charge offs, combined with reductions in the levels of classified and nonperforming assets. Net charge offs for the year 2012 were $496 or 0.06% of average loans compared to $14,529 of net charge offs or 1.78% of average loans in 2011. Classified assets at December 31, 2012, were $56,082, down $12,411 from classified assets of $68,493 at December 31, 2011. Classified assets as a percentage of regulatory capital were 31.92% at December 31, 2012, compared to 39.74% at December 31, 2011. Nonperforming assets at December 31, 2012, were $26,428, down $10,672 or 28.77% from the prior year-end.

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Nonperforming Assets

At December 31, 2013, the Company had $20,963 in nonperforming assets, net of government guarantees, or 1.45% of total assets, compared to $26,428 or 1.92% of total assets, at December 31, 2012. The schedule below provides a more detailed breakdown of nonperforming assets by loan type at December 31, 2013, and December 31, 2012:

NONPERFORMING ASSETS

	December 31, 2012			December 31, 2013
Nonaccrual loans
Real estate secured loans:
Permanent loans:
Multi-family residential	$	—		$	—
Residential 1-4 family		636			1,140
Owner-occupied commercial		1,685			3,805
Nonowner-occupied commercial		136			—
Total permanent real estate loans		2,457			4,945
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
Total real estate construction loans		—			101
Total real estate loans		2,457			5,046
Commercial loans		2,886			4,315
Consumer loans		—			—
Total nonaccrual loans		5,343			9,361
90 days past due and accruing interest		—			—
Total nonperforming loans		5,343			9,361
Nonperforming loans guaranteed by government		(735	)		(905	)
Net nonperforming loans		4,608			8,456
Other real estate owned		16,355			17,972
Total nonperforming assets, net of guaranteed loans	$	20,963		$	26,428
Nonperforming loans to outstanding loans		0.46	%		0.97	%
Nonperforming assets to total assets		1.45	%		1.92	%

Nonperforming assets at December 31, 2013, consisted of $4,608 of nonaccrual loans (net of $735 in government guarantees) and $16,355 of other real estate owned. Total nonperforming assets at December 31, 2012, were down $5,465 from nonperforming assets at December 31, 2012, as the Company resolved problem loans and disposed of other real estate owned, a trend that is expected to continue in 2014. At December 31, 2014 dental nonperforming assets totaled $2,400, down $99 from the $2,499 reported at December 31, 2012. Other real estate owned at December 31, 2013, consisted of nine properties. Two properties, a commercial land development loan, which contains two separate parcels, and a retail strip mall, valued at $10,040 and $3,478, respectively, make up 82.65% of total other real estate owned at such date. While the Company is actively marketing both properties, the location and type of these two properties make them susceptible to possible valuation write-downs as new appraisals become available.

The allowance for loan losses at December 31, 2013, was $15,917 (1.60% of gross outstanding loans) compared to $16,345 (1.88% of loans) and $14,941 (1.82% of loans) at the years ended 2012 and 2011, respectively. The reduction in the allowance for loan losses to total loans ratio in 2013 compared to 2012 was primarily due to loans acquired in the Century Bank transaction, which were booked net of fair value adjustments, including the fair value adjustment for credit and potential losses. At December 31, 2013, the Company had also reserved $226 for possible losses on unfunded loan commitments, which was classified in other liabilities. The 2013 ending allowance included $57 in specific allowance for $8,476 in impaired loans (net of government guarantees). At December 31, 2012, the Company had $9,493 in impaired loans with a specific allowance of $2 assigned.

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The dental allowance for loan losses at December 31, 2013, was $3,730 or 1.21% of dental loans. This is an increase from the $2,683 or 0.99% of dental loans at December 31, 2012. Management has raised the allowance as a percentage of outstanding loans over the prior year due to the increase in the dental portfolio concentration and an increased presence in national lending. To date the national dental portfolio has demonstrated similar performance to the local dental portfolio however the portfolio is not seasoned and may incur losses with time. For additional information on the dental portfolio statistics please see Note 4 of the Consolidated Financial Statement in this Form 10-K.

While the Company saw some positive trends in 2013 with its resolution of classified assets and nonperforming assets, management cannot predict with certainty the level of the provision for loan losses, the level of the allowance for loans losses, nor the level of nonperforming assets in future quarters. At December 31, 2013, and as shown in this Form 10-K under Note 3 of the Notes to Consolidated Financial Statements, the Company’s unallocated reserves were $1,575 of the total allowance for loan losses, at year-end 2013. Management believes that the allowance for loan losses at December 31, 2013, is adequate and this level of unallocated reserves was prudent in light of the economic conditions that exist in the Northwest markets the Company serves.

Noninterest Income

Noninterest income is derived from sources other than fees and interest on earning assets. The Company’s primary sources of noninterest income are service charge fees on deposit accounts, merchant bankcard activity, and business credit card interchange fees.

2013 Compared to 2012

Noninterest income for the year 2013 was $5,826, an increase of $85 or 1.48% over 2012. Increases in service charges on deposit accounts, other fee income, principally bankcard, and the other noninterest income category were partially offset by declines in mortgage banking income and bank-owned-life-insurance (“BOLI”) revenue. The increase in service charges on deposit accounts was primarily due to the implementation of a new fee structure for analyzed business accounts. The increase in other fee income, principally bankcard was due to higher sales transaction volume in merchant bankcard. The increase in the other income category of noninterest income was primarily due to the outsourcing of the Company’s merchant bankcard processing portfolio in December 2013, which resulted in upfront net fees of $124. The decline in mortgage banking income was due to the closure of this division of the Company following first quarter 2012. BOLI revenue declined due to a lower return on investments, resulting in a slightly lower yield on the BOLI investment. In addition contributing to the low growth in noninterest revenue was $23 in other-than-temporary-impairment charge related to two private-label mortgage-backed securities.

2012 Compared to 2011

For the year 2012, noninterest income was $5,741, down $125 or 2.13% from the same period last year. The 2011 noninterest income included $884 of revenue from the gain on the sale of securities, while in 2012 there were no sales of securities. Excluding this gain on sale of securities in 2011, noninterest income in 2012 was up $759 or 15.23% over the same period last year. The increase in 2012 noninterest income when compared to last year was primarily attributable to an increase in BOLI income of $545 and a $293 increase in the other income category, which was primarily generated from rental income on other real estate owned properties.

Noninterest Expense

Noninterest expense represents all expenses other than the provision for loan losses and interest costs associated with deposits and other interest-bearing liabilities. It incorporates personnel, premises and equipment, data processing and other operating expenses.

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2013 Compared to 2012

For the year 2013, noninterest expense was $40,732, up $5,627 or 16.03% over 2012. The year 2013 noninterest expense included $1,246 of merger expense related to the acquisition of Century Bank compared to merger expense of $203 in 2012. Excluding merger expense in both 2013 and 2012, noninterest expense increased $4,584 or 13.13% in 2013 over 2012. All categories of non-merger related noninterest expense with the exception of FDIC assessments and bankcard processing were up in 2013 when compared to 2012. The most significant increases in noninterest expense were in salaries and employee benefits, data processing, business development, and other real estate expense. Salaries and employee benefits were up $2,544 or 13.00%, primarily attributable to the full year impact of relationship bankers added to staff during 2012 and additional relationship bankers added during 2013, including relationship bankers included in the acquisition of Century Bank. Data processing expense in 2013 was up $509 or 24.28% primarily due to an increase in software maintenance expense, which is assessed by various third parties based on asset size of the institution. Business development expense was up $247 or 15.85% as the Company increased marketing and sales efforts in all of its primary markets, including the national healthcare lending market. Other real estate expense for the year 2013 increased $907 or 60.71%, primarily due to valuation write downs on two properties.

2012 Compared to 2011

For the year 2012, noninterest expense was $35,105, down $1,971 or 5.32% from 2011. The year 2012 noninterest expense included $203 of merger expense related to the acquisition of Century Bank. The decline in 2012 noninterest expense was primarily due to a decrease in FDIC assessments, other real estate expense, and the other expense category, that was partially offset by an increase in salaries and employee benefits. FDIC assessments in 2012 were $1,085, down $607 or 35.87% from the same period last year. The decline in FDIC assessments was primarily due to a change in assessment methodology based on net tangible assets versus deposits that became effective in second quarter 2011. Other real estate expense was $1,494 in 2012, down $1,813 or 54.82% from last year, reflecting a lower level of valuation write-downs in the current year when compared to last year. The other expense category in 2012 was $3,405, down $138 or 3.90% from the same period in 2011. The drop in the other expense category was primarily due to a decrease in legal fees related to problem assets. Offsetting a portion of these declines in noninterest expense was a $701 or 3.71% increase in personnel expense. Within the personnel expense category, base salaries, equity-based compensation, bonus expense and group insurance increased $400, $277, $201, and $114, respectively. The $400 increase in base salary expense was a 2.67% increase over the prior year same period. The increase in these areas was partially offset by increased loan origination costs of $668, which were booked as a reduction of salary expense.

BALANCE SHEET

Securities Available-for-Sale

At December 31, 2013, the balance of securities available-for-sale was $347,386, down $42,499 from December 31, 2012. At December 31, 2013, the portfolio had an unrealized taxable loss of $242 compared to an unrealized taxable gain of $9,431, at December 31, 2012. The decline in the unrealized gain or market value of the securities portfolio was primarily due to an increase of approximately 100 basis points in longer-term interest rates. At December 31, 2013, $25,912 of these securities were pledged as collateral for public deposits in Oregon and Washington and for repurchase accounts. During 2013, the Company purchased $75,340 in new securities, while receiving $101,079 in cash flow from maturities, sales and pay downs on mortgage-backed securities. Purchases during the year 2013 were high-quality shorter-term agency mortgage-backed securities, variable rate SBA pools, and five- to seven-year bullet agencies. These purchases were part of a strategy to hedge the balance sheet against an increasing rate scenario due to the Company’s liability sensitive position and reduce the market value volatility of the portfolio in a rising rate environment. The portfolio is structured to generate sufficient cash flow to allow reinvestment at higher rates should interest rates move up or to fund loan growth as was the case in 2013. In a stable rate environment, approximately $53,600 in cash flow is anticipated during 2014. Going forward, purchases will be dependent upon core deposit growth, loan growth, and the Company’s interest rate risk position. During the first half of 2014, purchases of new securities are expected to be somewhat limited as cash flow from the portfolio is expected to fund new loan growth and an anticipated seasonal decline in core deposits.

At year-end 2013, $5,314 or 1.53% of the total securities portfolio was composed of private-label mortgage-backed securities. Management reviews monthly all available information, including current and projected default rates and current and projected loss severities, related to the collectability of its potentially impaired investment securities and determined an additional OTTI of $23 was required during 2013. Recognition of additional OTTI on the private-label mortgage-backed portion of the portfolio is possible in future quarters depending upon economic conditions, default rates on home mortgages, loss severities on foreclosed homes, unemployment levels, and home values.

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In management’s opinion, the remaining securities in the portfolio in an unrealized loss position are considered only temporarily impaired. The Company has no intent, nor is it more likely than not, that it will be required to sell its impaired securities before their recovery. The impairment is due to changes in market interest rates or the widening of market spreads subsequent to the initial purchase of the securities, and not due to concerns regarding the underlying credit of the issuers or the underlying collateral. The decline in value of these securities has resulted from current economic conditions. Although yields on these securities may be below market rates during the period, no loss of principal is expected.

Loans

At December 31, 2013, outstanding gross loans were $994,769, up $123,512 over outstanding loans of $871,257 at December 31, 2012. Loans acquired in the Century Bank transaction in February 2013 are included in the Eugene market totals. A summary of outstanding loans by market, including national health care loans, for the years ended December 31, 2013, and December 31, 2012, follows:

					2013 vs. 2012
Loans	Balance December 31, 2013		Balance December 31, 2012		$ Increase (Decrease)			% Increase (Decrease)
Eugene market gross loans, period-end	$	334,511	$	253,345	$	81,166			32.0	%
Portland market gross loans, period-end		391,295		383,616		7,679			2.0	%
Seattle market gross loans, period-end		132,488		154,229		(21,741	)		-14.1	%
National health care gross loans, period end		136,475		80,067		56,408			70.5	%
Total gross loans, period-end	$	994,769	$	871,257	$	123,512			14.2	%

During 2013, all of the Company’s markets, with the exception of Seattle, showed growth in outstanding loans over the prior year. Growth in National healthcare loans accounted for $56,408, or approximately 70%, of the organic loan growth recorded during 2013. The Company now has national healthcare loans in 30 states. The Company defines National healthcare loans as loans to healthcare professionals, primarily dentists located outside of the Company’s primary market area. The Company’s defined market area is within the states of Oregon and Washington west of the Cascade Mountain Range. This area is serviced by branch locations in Eugene, Oregon; Portland, Oregon; and Seattle, Washington. National health care loans, loans east of the Cascade Mountain Range and outside Oregon and Washington, are maintained and serviced by personnel primarily located in the Portland market.

Outstanding loans to dental professionals, which are comprised of both local and national loans, at December 31, 2013, totaled $307,268, or 30.89% of the loan portfolio, compared to $270,782, or 31.08% of the loan portfolio, at December 31, 2012. Growth in national loans accounted for all of the total increase in outstanding dental loans during 2013 as dental loans in the Company’s three primary markets contracted. At December 31, 2013, $16,470, or 5.36%, of the outstanding dental loans were supported by government guarantees. Loans to dental professionals include loans for such purposes as starting up a practice, acquisition of a practice, equipment financing, owner-occupied facilities, and working capital. National dental loans are limited to acquisition financing and owner-occupied facilities. Additional data on the Company’s dental loan portfolio and the credit quality of this portfolio can be found in Note 4 of the Notes to Consolidated Financial Statements in this report. Additional information regarding loan concentrations is included in Part II, Item 1A “Risk Factors” of this report under the heading “Loan concentrations within one industry may create additional risk, and we have a significant concentration in loans to dental professionals.”

Detailed credit quality data on the entire loan portfolio can be found in Note 3 and Note 4 of the Notes to Consolidated Financial Statements in this report.

Goodwill

At December 31, 2013, the Company had a recorded balance of $22,881 in goodwill from the November 30, 2005, acquisition of NWB Financial Corporation and its wholly owned subsidiary, Northwest Business Bank (“NWBF”) and the February 1, 2013 acquisition of Century Bank. In accordance with GAAP, the Company does not amortize goodwill or other intangible assets with indefinite lives, but instead periodically tests these assets for impairment. Management performed an impairment analysis at December 31, 2013, and determined there was no impairment of the goodwill at the time of the analysis.

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Deferred Tax Assets

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. At December 31, 2013, the Company had a net deferred tax asset of $9,598. Deferred tax assets are reviewed for recoverability and valuation allowances are provided, when necessary, to reduce deferred tax assets to the amounts expected to be realized. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefit, or that future deductibility is uncertain. In light of the Company’s performance, management anticipates that the deferred tax assets will be fully utilized to offset future income taxes and that no valuation allowance is required. Additional disclosures regarding the components of the net deferred tax asset are included in Note 13 of the Notes to Consolidated Financial Statements in this Form 10-K.

Deposits

Outstanding deposits at December 31, 2013, were $1,090,981, an increase of $44,827 over outstanding deposits of $1,046,154 at December 31, 2012. Core deposits, which are defined by the Company as demand, interest checking, money market, savings, and local non-public time deposits, including local non-public time deposits in excess of $100, were $990,315, up $51,686 or 5.5% over outstanding core deposits of $938,629 at December 31, 2012. At December 31, 2013, and 2012, core deposits represented 90.77% and 89.72%, respectively, of total deposits. Year-to-date December 31, 2013, average core deposits, a measurement that removes daily volatility, were $967,592, an increase of $90,336 or 10.3% over average core deposits of $877,256 for the year 2012.

A summary of outstanding deposits by market for the years 2013 and 2012 follows:

					2013 vs. 2012
Deposits	Balance December 31, 2013		Balance December 31, 2012		$ Increase (Decrease)			% Increase (Decrease)
Eugene market core deposits, period-end	$	588,158	$	536,143	$	52,015			9.7	%
Portland market core deposits, period-end		249,050		258,516		(9,466	)		-3.7	%
Seattle market core deposits, period-end		153,107		143,970		9,137			6.3	%
Total core deposits, period-end		990,315		938,629		51,686			5.5	%
Public and brokered deposits, period-end		100,666		107,525		(6,859	)		-6.4	%
Total deposits, period-end	$	1,090,981	$	1,046,154	$	44,827			4.3	%

The Eugene and Seattle markets experienced growth in outstanding core deposits, while the Portland market outstanding core deposits declined. The increase in the Eugene market core deposits was primarily due to the core deposits acquired in the Century Bank transaction during 2013. The Seattle market was successful in acquiring new deposit relationships and deepening existing relationships with existing clients, primarily in the nonprofit sector. The decline in the Portland core deposit based was primarily due to lower balances in its large depositor base at December 31, 2013, compared to the prior year end. Because of its strategic focus on business banking and banking for nonprofits, the Company attracts a number of large depositors that account for a relatively significant portion of the core deposit base. Large depositor balances are subject to significant daily volatility. At December 31, 2013, large depositors, generally defined as relationships with $1,000 or more in deposits, accounted for $369,718 of the Company’s total core deposit base and represented 37.33% of outstanding core deposits. For more information on the Company’s large depositors and management of these relationships, see the “Liquidity and Cash Flows” Section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-K. Additional information on deposits may also be found in Note 8 of the Notes to Consolidated Financial Statements in this Form 10-K.

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Public and Brokered Deposits

The Company uses public and brokered deposits to provide short-term and long-term funding sources. The Company defines short-term as having a contractual maturity of less than one year. The Company uses brokered deposits to help mitigate interest rate risk in a rising rate environment. All long-term brokered deposits have a call feature, which provides the Company the option to redeem the deposits on a quarterly basis, allowing the Company to refinance long-term funding at lower rates should market rates fall. Below is a schedule detailing public and brokered deposits by type, including weighted average rate (“WAR”) and weighted average maturity (“WAM”).

Non-Core Deposit Summary

	Balance December 31, 2013		WAR			WAM
Short-Term Public Time Deposits	$	35,518		0.20	%		32 days
Long-Term Public Time Deposits		30		0.88	%		8.12 years
	$	35,548
Short-Term Brokered Time Deposits	$	18,500		0.21	%		141 days
Long-Term Brokered Time Deposits		50,152		2.02	%		5.68 years
	$	68,652

Borrowings

The Company has both secured and unsecured borrowing lines with the Federal Home Loan Bank, Federal Reserve Bank and various correspondent Banks. The Federal Reserve and correspondent borrowings are generally short-term, with a maturity of less than 30 days. The Federal Home Loan Bank borrowings can be either short-term or long-term in nature. See Note 10 of the Notes to Consolidated Financial Statements in item 8 of this report for a full maturity and interest rate schedule for the Federal Home Loan Bank borrowings.

Junior Subordinated Debentures

The Company had $8,248 in junior subordinated debentures outstanding at December 31, 2013, which were issued in conjunction with the 2005 acquisition of NWBF. The junior subordinated debentures had an interest rate of 6.27% that was fixed through January 2011. In January 2011, the rate on the junior subordinated debentures changed to three-month LIBOR plus 135 basis points. On April 22, 2013, the Bank entered into a cash flow hedge on $8,000 of the trust preferred payment, swapping the variable interest rate for a fixed rate of 2.73% for a seven-year period. At December 31, 2013, the fair value of the interest rate swap on the Company’s subordinated debentures was $405. At December 31, 2013, the $8,000 of the junior subordinated debentures qualified as Tier 1 capital under regulatory capital guidelines.

In July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) was signed into law which, among other things, limits the ability of certain bank holding companies to treat trust preferred security debt issuances, such as the Company’s junior subordinated debentures, as Tier 1 capital. Under final rules, recently adopted by the Federal Reserve Board and the other U.S. federal banking agencies, our trust preferred securities would remain as Tier 1 capital since total assets of the Company are less than $15,000,000. Additional information regarding these final capital rules is included in in Part I, Item 1A “Risk Factors” of the report under the heading “We operate in a highly regulated environment and the effects of recent and pending federal legislation or of changes in, or supervisory enforcement of, banking or other laws and regulations could adversely affect us.”

Additional information regarding the terms of the cash flow hedge is included in Note 12 of the Notes to Consolidated Financial Statements in item 8 of this report.

CAPITAL RESOURCES

Capital is the shareholders’ investment in the Company. Capital grows through the retention of earnings and the issuance of new stock or other equity securities whether through stock offerings or through the exercise of equity awards. Capital formation allows the Company to grow assets and provides flexibility in times of adversity. Shareholders’ equity at December 31, 2013, was $179,184, down $4,197 from December 31, 2012. The decline in shareholders’ equity was entirely due to the drop in the market value of the Company’s securities available-for-sale, which negatively impacted accumulated other comprehensive income.

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In March 2013, the Company’s Board of Directors authorized the repurchase of up to 5.00% of the Company’s outstanding common shares, or approximately 892,000 shares, with the purchases to take place over the next 12 months, with the plan commencing on April 1, 2013. The Company did not repurchase any shares during 2013. Over the last seven quarters, the Company has used a combination of regular dividends, special dividends, and share repurchases to maintain capital levels comparable with year-end December 31, 2011, capital levels. For additional details regarding the changes in equity, review the Consolidated Statements of Changes in Shareholders’ Equity in Item 8 of this report.

The Federal Reserve Board and the FDIC have in place guidelines for risk-based capital requirements applicable to U.S. bank holding companies and banks. These risk-based capital guidelines take into consideration risk factors, as defined by regulation, associated with various categories of assets, both on and off-balance sheet. Under the guidelines, capital strength is measured in three ways, first by measuring Tier 1 capital to leverage assets, followed by capital measurement in two tiers, which are used in conjunction with risk-adjusted assets to determine the risk-based capital ratios. These guidelines require a minimum of 4.00% Tier 1 capital to leverage assets, 4.00% Tier 1 capital to risk-weighted assets, and 8.00% total capital to risk-weighted assets. In order to be classified as “well-capitalized,” the highest capital rating by the Federal Reserve and the FDIC, these three ratios must be in excess of 5.00%, 6.00%, and 10.00%, respectively. The Company’s leverage capital ratio, Tier 1 risk-based capital ratio, and Total risk-based capital ratio were 11.49%, 14.90%, and 16.15%, respectively, at December 31, 2013, all ratios being well above the minimum “well-capitalized” designation.

In July 2013, the Federal Reserve Board and the other U.S. federal banking agencies adopted final rules making significant changes to the U.S. regulatory capital framework for U.S. banking organizations and to conform this framework to the Basel Committee’s current international regulatory capital accord (Basel III). These rules, upon their effectiveness, will replace the federal banking agencies’ general risk-based capital rules, advanced approaches rule, market-risk rule, and leverage rules, in accordance with certain transition provisions. Banks, such as Pacific Continental Bank, will become subject to the new rules on January 1, 2015. The new rules establish more restrictive capital definitions, create additional categories and higher risk-weightings for certain asset classes and off-balance sheet exposures, higher leverage ratios and capital conservation buffers that will be added to the minimum capital requirements and must be met for banking organizations to avoid being subject to certain limitations on dividends and discretionary bonus payments to executive officers. The new rules also implement higher minimum capital requirements, include a new common equity Tier 1 capital requirement, and establish criteria that instruments must meet in order to be considered common equity Tier 1 capital, additional Tier 1 capital, or Tier 2 capital. When fully phased in, the final rules will provide for increased minimum capital ratios as follows: (a) a common equity Tier 1 capital ratio of 4.50%; (b) a Tier 1 capital ratio of 6.00% (which is an increase from 4.00%); (c) a total capital ratio of 8.00%; and (d) a Tier 1 leverage ratio to average consolidated assets of 4.00%. While earlier proposals would have required that our trust preferred securities (TruPS) be phased out of Tier 1 capital, the new rules exempt depository institution holding companies with less than $15 billion in total consolidated assets as of December 31, 2009, such as the Company, from this requirement. These capital instruments, if issued prior to May 19, 2010, and currently in Tier 1 capital, are grandfathered in Tier 1 capital, subject to certain limits. Under the new rules, in order to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers, a banking organization must hold a capital conservation buffer composed of common equity Tier 1 capital above its minimum risk-based capital requirements (equal to 2.50% of total risk-weighted assets). The phase-in of the capital conservation buffer will begin January 1, 2016, and be completed by January 1, 2019. The new rules also provide for various adjustments and deductions to the definitions of regulatory capital that will phase in from January 1, 2014 to December 31, 2017. We are currently evaluating the impact of these changes on our regulatory capital.

On January 12, 2014, the Basel Committee issued its near final version of its leverage ratio and disclosure guidance (the “Basel III Leverage Ratio”). The Basel III Leverage Ratio will be subject to further calibration until 2017, with final implementation expected by January 18, 2018. The Basel III Leverage Ratio makes a number of significant changes to the Basel Committee’s June 2013 consultative paper (“Consultative Paper”) by easing the approach to measuring the exposures of off-balance sheet items. These changes address the financial services industry’s concern that the Consultative Paper’s definition of exposure was too expansive, i.e., that the leverage ratio’s denominator was too large. The changes eliminate many, but not all, differences between the Basel III Leverage Ratio and the U.S. supplemental leverage ratio (“SLR”), which is currently set at a minimum of three percent and applies to U.S. firms with over $250 billion in assets.

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The Company has regularly paid cash dividends on a quarterly basis, typically in February, May, August and November of each year. The Board of Directors considers the dividend amount quarterly and takes a broad perspective in its dividend deliberations including a review of recent operating performance, capital levels, and concentrations of loans as a percentage of capital, and growth projections. The Board also considers dividend payout ratios, dividend yield, and other financial metrics in setting the quarterly dividend. There can be no assurance that dividends will be paid in the future.

During 2013, the Company paid total cash dividends of $0.73 to shareholders consisting of regular cash dividends of $0.36 per share and special cash dividends of $0.37 per share. Subsequent to year-end, on January 21, 2014, the Board of Directors maintained the regular quarterly cash dividend of $0.10 per share and declared a special cash dividend of $0.10 per share, payable to shareholders of record on February 3, 2014.

OFF-BALANCE SHEET ARRANGEMENTS AND COMMITMENTS

In the normal course of business, the Company commits to extensions of credit and issues letters of credit. The Company uses the same credit policies in making commitments to lend funds and conditional obligations as it does for other credit products. In the event of nonperformance by the customer, the Company’s exposure to credit loss is represented by the contractual amount of the instruments. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established by the contract. Since some commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. At December 31, 2013, the Company had $167,374 in commitments to extend credit.

Letters of credit written are conditional commitments issued by the Company to guarantee performance of a customer to a third-party. The credit risk involved is essentially the same as that involved in extending loan facilities to customers. At December 31, 2013, the Company had $1,304 in letters of credit and financial guarantees written.

The Company has certain other financial commitments. These future financial commitments at December 31, 2013, are outlined below:

Contractual Obligations (dollars in thousands)	Total		Less than One Year		1 - 3 Years		3 - 5 Years		More than 5 Years
Junior subordinated debentures	$	8,248	$	—	$	—	$	—	$	8,248
FHLB borrowings		160,000		119,000		36,000		3,000		2,000
Overnight Fed Funds Borrowed		5,150		5,150
Time deposits		164,458		86,822		28,932		23,201		25,503
Operating lease obligations		4,872		1,111		1,065		668		2,028
Employment contracts		704		—		704		—		—
	$	343,432	$	212,083	$	66,701	$	26,869	$	37,779

LIQUIDITY AND CASH FLOWS

Liquidity is the term used to define the Company’s ability to meet its financial commitments. The Company maintains sufficient liquidity to ensure funds are available for both lending needs and the withdrawal of deposit funds. The Company derives liquidity through core deposit growth, maturity of investment securities, and loan payments. Core deposits include demand, interest checking, money market, savings, and local time deposits, including local non-public time deposits in excess of $100. Additional liquidity and funding sources are provided through the sale of loans, sales of securities, access to national time deposits markets, and both secured and unsecured borrowings. The Company uses a number of measurements to monitor its liquidity position on a daily, weekly, and monthly basis, which includes its ability to meet both short-term and long-term obligations, and requires the Company to maintain a certain amount of liquidity on the asset side of its balance sheet. The Company also prepares quarterly projections of its liquidity position 30 days, 90 days, 180 days, and one year into the future. In addition, the Company prepares a Liquidity Contingency Plan at least semi-annually that is strategic in nature and forward-looking to test the ability of the Company to fund a liquidity shortfall arising from various escalating events. The Liquidity Contingency Plan is presented and reviewed by the Company’s Asset and Liability Committee (ALCO).

Core deposits at December 31, 2013, were $990,315 and represented 90.77% of total deposits. Core deposits at December 31, 2013, were up $51,686, or 5.51% over December 31, 2012. During 2013, the Company experienced its typical seasonal core deposit pattern, where outflows historically occur during the first six months of the year followed by growth during the second half of the year. During 2013, core deposits acquired in the Century Bank transaction contributed to the growth in outstanding core deposits. The Company experienced an increase in outstanding loans during the year 2013 which was funded through core deposit growth, cash flow from the securities portfolio, and the use of wholesale funds.

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The Company has significant liquidity on the asset side of the balance sheet in the securities portfolio. The securities portfolio represented 23.96% of total assets at December 31, 2013. At December 31, 2013, $25,912 of the securities portfolio was pledged to support public deposits and repurchase accounts, leaving $321,474 of the securities portfolio unencumbered and available-for-sale. The securities portfolio is also available to fund loan growth as $53,600 in cash flows are projected from the portfolio over the next 12 months assuming market interest rates are unchanged. In addition, at December 31, 2013, the Company had $37,467 of government guaranteed loans that could be sold [within 30 days] in the secondary market to support the Company’s liquidity position.

Due to its strategic focus to market to specific segments, the Company has been successful in developing deposit relationships with several large clients, which are generally defined as deposit relationships of $1,000 or more, which are closely monitored by management and Company officers. At December 31, 2013, 57 large deposit relationships with the Company accounted for $369,718, or 37.33% of total outstanding core deposits. The single largest client represented 4.79% of outstanding core deposits at December 31, 2013. The loss of this deposit relationship or other large deposit relationships could cause an adverse effect on short-term liquidity. The Company uses a 10-point risk-rating system to evaluate each of its large depositors in order to assist management in its daily monitoring of the volatility of this portion of its core deposit base. The risk-rating system attempts to determine the stability of the deposits of each large depositor, evaluating, among other things, the length of time the depositor has been with the Company and the likelihood of loss of individual large depositor relationships. Risk ratings on large depositors are reviewed at least quarterly and adjusted if necessary. Company management and officers maintain close relationships and hold regular meetings with the Company’s large depositors to assist in management of these relationships. The Company expects to maintain these relationships, believes it has sufficient sources of liquidity to mitigate the loss of one or more of these clients and regularly tests its ability to mitigate the loss of multiple large depositor relationships in its Liquidity Contingency Plan.

At December 31, 2013, the Company had secured borrowing lines with the FHLB and the FRB, along with unsecured borrowing lines with various correspondent banks, totaling $450,926. The Company’s secured lines with the FHLB and the FRB were limited by the amount of collateral pledged. At December 31, 2013, the Company had pledged $229,547 in discounted collateral value in commercial real estate loans, first and second lien single-family residential loans, and multi-family loans, to the FHLB. Additionally, certain commercial and commercial real estate loans with a discounted value of $92,379 were pledged to the FRB under the Company’s Borrower-In-Custody program. The Company’s unsecured correspondent bank lines were $129,000. At December 31, 2013, the Company had $160,000 in borrowings outstanding from the FHLB, $0 outstanding with the FRB, and $5,150 outstanding on its overnight correspondent bank lines, leaving a total of $285,776 available on its secured and unsecured borrowing lines at such date.

As disclosed in the Consolidated Statements of Cash Flows in the Consolidated Financial Statement in this Form 10-K, net cash provided by operating activities was $27,288 for the year 2013. The difference between cash provided by operating activities and net income largely consisted of depreciation and amortization of $8,596. Net cash of $38,709 was used in investing activities for the year 2013, consisting principally of net loan originations of $61,604 and securities purchases of $75,340, which was partially offset by proceeds from maturities of investment securities of $101,079. Cash provided by financing activities was $3,828 for the year 2013.

INFLATION

Substantially all of the assets and liabilities of the Company are monetary. Therefore, inflation has a less significant impact on the Company than does fluctuation in market interest rates. Inflation can lead to accelerated growth in noninterest expenses, which could impact net earnings. During the last several years, inflation, as measured by the Consumer Price Index, did not change significantly. The effects of inflation have not had a material impact on the Company.

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ITEM 7A Quantitative and Qualitative Disclosures About Market Risk

The Company’s results of operations are largely dependent upon its ability to manage market risks. Changes in interest rates can have a significant effect on the Company’s financial condition and results of operations. Although permitted by its funds management policy, the Company does not presently use derivatives, such as forward and futures contracts, options or interest rate swaps, to manage interest rate risk. Other types of market risk, such as foreign currency exchange rate risk and commodity price risk, do not arise in the normal course of the Company’s business activities.

Interest rate risk generally arises when the maturity or repricing structure of the Company’s assets and liabilities differ significantly. Asset and liability management, which among other things addresses such risk, is the process of developing, testing and implementing strategies that seek to maximize net interest income while maintaining sufficient liquidity. This process includes monitoring contractual maturity and prepayment expectations together with expected repricing of assets and liabilities under different interest rate scenarios. Generally, the Company seeks a structure that insulates net interest income from large deviations attributable to changes in market rates.

Interest rate risk is managed through the monitoring of the Company’s balance sheet by subjecting various asset and liability categories to interest rate shocks and gradual interest rate movements over a one,two, and three-year period of time. Interest rate shocks use an instantaneous adjustment in market rates of large magnitudes on a static balance sheet to determine the effect such a change in interest rates would have on the Company’s net interest income and capital for the succeeding twelve-month period. Such an extreme change in interest rates and the assumption that management would take no steps to restructure the balance sheet does limit the usefulness of this type of analysis. This type of analysis tends to provide a best-case or worst-case scenario. In addition to the interest rate shock analysis, the Company also prepares net interest income simulations, which includes a three-year forecast of the balance sheet and income statement using a flat rate scenario, i.e., rates unchanged and a most-likely rate scenario where rates are projected to change based on management’s analysis of expected economic conditions and interest rate environment. This analysis takes into account growth in loans and deposits and management strategies that could be employed to maximize the net interest margin and net interest income.

The Company utilizes in-house asset/liability modeling software, ProfitStar, to determine the effect changes in interest rates have on net interest income. Interest rate shock scenarios are modeled in a parallel shift of the yield curve in 100 basis point increments (plus or minus) in the federal funds rate. The Company shocks the balance sheet at one, two and three years into the future to provide management with both short-term and long-term interest rate risk information. Although certain assets and liabilities may have similar repricing characteristics, they may not react correspondingly to changes in market interest rates. In the event of a change in interest rates, prepayment of loans and early withdrawal of time deposits would likely deviate from those previously assumed. Increases in market rates may also affect the ability of certain borrowers to make scheduled principal payments.

The model attempts to account for such limitations by imposing weights on the differences between repricing assets and repricing liabilities within each time segment. These weights are based on the ratio between the amount of rate change of each category of asset or liability and the amount of change in the federal funds rate. Certain non-maturing liabilities, such as checking accounts and money market deposit accounts, are allocated among the various repricing time segments to meet local competitive conditions and management’s strategies.

At December 31, 2013, the Company was liability sensitive, meaning that in a rising rate environment, the net interest margin and net interest income would decline. The Company’s interest rate risk position was primarily due to three factors: 1) active floors on variable rate loans; and 2) the composition of the Company’s core deposit base, which consists primarily of non-maturing deposits subject to immediate repricing.

There are numerous critical assumptions in the modeling of interest rate sensitivity, including the deposit decay rate or the rate at which non-maturing deposits run off over time and the beta factor or the projected change in rates paid on non-maturing deposits for every 100 basis point increase or decrease in market interest rates. Critical assumptions are based on historical behaviors and current market conditions. Due to the critical nature of these assumptions on the overall calculated interest rate risk position, actual results and changes in net interest income and the net interest margin in the event of an increase or decrease of market interest rates may be materially different from projections.

51

The following table shows the estimated impact on net interest income at one year of interest rate changes plus 400 basis points and minus 100 basis points in 100 basis point increments. The base figure of $56,139 used in the analysis represents the actual net interest income for the year 2013. Due to the various assumptions used for this modeling and potential balance sheet strategies management may implement to mitigate interest rate risk, no assurance can be given that projections will reflect actual results.

Interest Rate Shock Analysis

Net Interest Income and Market Value Performance

($ in thousands)

Projected Interest Rate Change	$ Estimated Value		Net Interest Income $ Change From Base			Change From Base
400	$	46,023		(10,116	)		-18.02	%
300		48,519		(7,620	)		-13.57	%
200		51,105		(5,034	)		-8.97	%
100		53,863		(2,276	)		-4.05	%
Base		56,139		—			—
-100		55,010		(1,129	)		-2.01	%

52

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

Pacific Continental Corporation and Subsidiary

We have audited the accompanying consolidated balance sheets of Pacific Continental Corporation and Subsidiary (the “Company”) as of December 31, 2013 and 2012, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2013. We also have audited the Company’s internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control—Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these consolidated financial statements and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall consolidated financial statements presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Pacific Continental Corporation and Subsidiary as of December 31, 2013 and 2012, and the consolidated results of their operations and their cash flows for each of the three years in the

53

period ended December 31, 2013, in conformity with generally accepted accounting principles in the United States of America. Also in our opinion, Pacific Continental Corporation and Subsidiary maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013 based on criteria established in Internal Control—Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

/s/ Moss Adams LLP

Portland, Oregon

March 14, 2014

54

Pacific Continental Corporation and Subsidiary

Consolidated Balance Sheets

(In thousands, except share amounts)

	December 31, 2013		December 31, 2012
ASSETS
Cash and due from banks	$	21,053	$	28,607
Interest-bearing deposits with banks		55		94
Total cash and cash equivalents		21,108		28,701
Securities available-for-sale		347,386		389,885
Loans, less allowance for loan losses and net deferred fees		977,928		854,071
Interest receivable		4,703		4,520
Federal Home Loan Bank stock		10,425		10,462
Property and equipment, net of accumulated depreciation		18,836		19,238
Goodwill and intangible assets		23,616		22,031
Deferred tax asset		9,598		6,230
Other real estate owned		16,355		17,972
Prepaid FDIC assessment		—		1,746
Bank-owned life insurance		16,136		15,621
Other assets		3,635		3,010
Total assets	$	1,449,726	$	1,373,487
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Noninterest-bearing demand	$	366,891	$	329,825
Savings and interest-bearing checking		559,632		554,693
Time $100,000 and over		79,081		73,610
Other time		85,377		88,026
Total deposits		1,090,981		1,046,154
Federal funds and overnight funds purchased		5,150		11,570
Federal Home Loan Bank borrowings		160,000		118,000
Junior subordinated debentures		8,248		8,248
Accrued interest and other payables		6,163		6,134
Total liabilities		1,270,542		1,190,106
Commitments and Contingencies (Note 17)
Shareholders’ equity
Common stock, no par value, shares authorized: 50,000,000; shares issued and outstanding: 17,891,687 at December 31, 2013, and 17,835,088 at December 31, 2012		133,835		133,017
Retained earnings		45,250		44,533
Accumulated other comprehensive income		99		5,831
		179,184		183,381
Total liabilities and shareholders’ equity	$	1,449,726	$	1,373,487

See accompanying notes.

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Pacific Continental Corporation and Subsidiary

Consolidated Statements of Operations

(In thousands, except per share amounts)

	Years Ended December 31,
	2013			2012		2011
Interest and dividend income
Loans	$	53,275		$	48,091	$	50,753
Taxable securities		5,730			6,171		8,043
Tax-exempt securities		1,918			1,626		982
Federal funds sold & interest-bearing deposits with banks		10			6		6
		60,933			55,894		59,784
Interest expense
Deposits		3,389			4,059		6,544
Federal Home Loan Bank & Federal Reserve borrowings		1,189			1,584		1,894
Junior subordinated debentures		200			151		136
Federal funds purchased		16			24		41
		4,794			5,818		8,615
Net interest income		56,139			50,076		51,169
Provision for loan losses		250			1,900		12,900
Net interest income after provision for loan losses		55,889			48,176		38,269
Noninterest income
Service charges on deposit accounts		1,926			1,827		1,816
Other fee income, principally bankcard		1,624			1,595		1,576
Mortgage banking income		—			72		191
Bank-owned life insurance income		515			583		38
Net (loss) gain on sale of investment securities		(8	)		—		884
Impairment losses on investment securities (OTTI)		(23	)		—		(10	)
Other noninterest income		1,792			1,664		1,371
		5,826			5,741		5,866
Noninterest expense
Salaries and employee benefits		22,120			19,576		18,875
Premises and equipment		3,684			3,373		3,444
Data processing		2,605			2,096		1,872
Legal and professional services		1,867			1,735		2,316
Business development		1,805			1,558		1,409
FDIC insurance assessment		912			1,085		1,692
Bankcard processing		527			580		618
Other real estate expense		2,401			1,494		3,307
Merger related expense		1,246			203		—
Other noninterest expense		3,565			3,405		3,543
		40,732			35,105		37,076
Income before income tax provision		20,983			18,812		7,059
Income tax provision		7,216			6,159		1,718
Net income	$	13,767		$	12,653	$	5,341
Earnings per share
Basic	$	0.77		$	0.70	$	0.29
Diluted	$	0.76		$	0.69	$	0.29

See accompanying notes.

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Pacific Continental Corporation and Subsidiary

Consolidated Statements of Comprehensive Income

(In thousands, except per share amounts)

	Years Ended December 31,
	2013			2012			2011
Net income	$	13,767		$	12,653		$	5,341
Other comprehensive income (loss):
Available-for-sale securities:
Unrealized (loss) gain arising during the year		(9,833	)		3,733			4,678
Reclassification adjustment for losses (gains) realized in net income		8			—			(884	)
Other than temporary impairment		23			—			10
Income tax benefit (expense)		3,823			(1,456	)		(1,457	)
Derivative agreements—cash flow hedge
Unrealized gain arising during the year		405			—			—
Income tax expense		(158	)		—			—
Total other comprehensive (loss) income, net of tax		(5,732	)		2,277			2,347
Total comprehensive income	$	8,035		$	14,930		$	7,688

See accompanying notes.

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Pacific Continental Corporation and Subsidiary

Consolidated Statements of Changes in Shareholders’ Equity

For the Years Ended December 31, 2013, 2012, and 2011

(In thousands, except share amounts)

	Number of Shares			Common Stock			Retained Earnings			Accumulated Other Comprehensive Income			Total
Balance, December 31, 2010		18,415,132		$	137,062		$	33,969		$	1,207		$	172,238
Net income								5,341						5,341
Other comprehensive income, net of tax											2,347			2,347
Comprehensive income														7,688
Director Stock issuance		5,952			56									56
Stock options exercised and related tax benefit		14,000			103									103
Share-based compensation					623									623
Cash dividends								(1,842	)					(1,842	)
Balance, December 31, 2011		18,435,084		$	137,844		$	37,468		$	3,554		$	178,866
Net income								12,653						12,653
Other comprehensive income, net of tax											2,277			2,277
Comprehensive income														14,930
Director Stock issuance		7,987			70									70
Stock options exercised and related tax benefit		10,666			78									78
Stock options exercised (Note 15)		18,333			130									130
Shares exchanged in payment of option exercise consideration (Note 15)		(14,166	)		(129	)								(129	)
Stock repurchased		(641,637	)		(5,676	)								(5,676	)
Share based compensation net of vested RSUs surrendered to cover tax consequences		18,821			700									700
Cash dividends								(5,588	)					(5,588	)
Balance, December 31, 2012		17,835,088		$	133,017		$	44,533		$	5,831		$	183,381
Net income								13,767						13,767
Other comprehensive loss, net of tax											(5,732	)		(5,732	)
Comprehensive income														8,035
Director Stock issuance		10,179			110									110
Share based compensation net of vested RSUs and SARs surrendered to cover tax consequences		46,420			708									708
Cash dividends								(13,050	)					(13,050	)
Balance, December 31, 2013		17,891,687		$	133,835		$	45,250		$	99		$	179,184

See accompanying notes.

58

Pacific Continental Corporation and Subsidiary

Consolidated Statements of Cash Flows

(In thousands)

	Years Ended December 31,
	2013			2012			2011
Cash flows from operating activities:
Net income	$	13,767		$	12,653		$	5,341
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization, net of accretion		8,596			9,950			6,028
Valuation adjustment on foreclosed assets		1,948			1,416			2,759
Capitalized other real estate owned costs		(67	)		(140	)		(780	)
(Gain) loss on sale of other real estate owned		—			(130	)		127
Provision for loan losses		250			1,900			12,900
Deferred income taxes		743			(314	)		1,423
Increase in cash surrender value of bank-owned life insurance		(515	)		(583	)		(38	)
Share-based compensation		1,196			875			603
Excess tax benefit of stock options exercised		—			(10	)		(14	)
Production of mortgage loans held-for-sale		—			(2,259	)		(8,153	)
Proceeds from the sale of mortgage loans held-for-sale		—			3,317			9,211
Other than temporary impairment on investment securities		23			—			10
Loss (gain) on sale of investment securities		8			—			(884	)
Change in:
Interest receivable		67			205			(354	)
Deferred loan fees		83			163			94
Accrued interest payable and other liabilities		259			2,092			422
Income taxes (receivable) payable		792			1,671			(1,671	)
Other assets		138			—			1,014
Net cash provided by operating activities		27,288			30,806			28,038
Cash flows from investing activities:
Proceeds from maturities and paydowns available-for-sale investment securities		99,228			100,657			64,325
Proceeds from sales of available-for-sale securities		1,851			—			35,541
Purchase of available-for-sale investment securities		(75,340	)		(148,614	)		(192,365	)
Net loan principal collections (originations)		(61,604	)		(64,169	)		12,581
Purchase of property and equipment		(897	)		(522	)		(524	)
Proceeds on sale of foreclosed assets		489			5,128			10,216
Purchase of energy tax credits		—			(14	)		—
Purchase of bank-owned life insurance		—			—			(15,000	)
Redemption of FHLB stock		391			190			—
Cash consideration paid, net of cash acquired in merger		(2,827	)		—			—
Net cash used by investing activities		(38,709	)		(107,344	)		(85,226	)
Cash flows from financing activities:
(Decrease) increase in deposits		(18,384	)		80,900			6,295
Increase (decrease) in federal funds purchased and FHLB short-term borrowings		37,580			29,770			56,800
Proceeds from FHLB term advances originated		—			39,000			—
FHLB advances paid-off		(2,000	)		(53,000	)		(10,000	)
Proceeds from stock options exercised		—			69			89
Excess tax benefit of stock options exercised		—			10			14
Dividends paid		(13,050	)		(5,588	)		(1,842	)
Repurchase of common stock		—			(5,676	)		—
Vested RSUs surrendered by employees to cover tax consequence		(318	)		(105	)		—
Net cash provided by financing activities		3,828			85,380			51,356
Net increase (decrease) in cash and cash equivalents		(7,593	)		8,842			(5,832	)
Cash and cash equivalents, beginning of year		28,701			19,859			25,691
Cash and cash equivalents, end of year	$	21,108		$	28,701		$	19,859
Supplemental information:
Noncash investing and financing activities:
Transfers of loans to other real estate owned	$	753		$	13,246		$	9,029
Change in fair value of securities, net of deferred income taxes	$	(5,979	)	$	2,277		$	2,347
Cash paid during the year for:
Income taxes	$	6,906		$	4,187		$	1,694
Interest	$	4,641		$	5,710		$	8,292

See accompanying notes.

59

Pacific Continental Corporation and Subsidiary

Notes to Consolidated Financial Statements

In preparing these consolidated financial statements, the Company has evaluated events and transactions subsequent to the balance sheet date for potential recognition or disclosure. All dollar amounts in the following notes are expressed in thousands, except per share data.

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation – The consolidated financial statements include the accounts of Pacific Continental Corporation (the “Company”), a bank holding company, and its wholly owned subsidiary, Pacific Continental Bank (the “Bank”) and the Bank’s wholly owned subsidiaries, PCB Service Corporation (which previously owned and operated bank-related real estate but is currently inactive) and PCB Loan Services Corporation (which previously owned and operated certain repossessed or foreclosed collateral but is currently inactive). The Bank provides commercial banking, financing, mortgage lending and other services through fourteen offices located in Western Oregon and Western Washington. The Bank also operates two loan production offices in Tacoma, Washington and Denver, Colorado. All significant intercompany accounts and transactions have been eliminated in consolidation.

In November 2005, the Company formed a wholly owned Delaware statutory business trust subsidiary, Pacific Continental Corporation Capital Trust (the “Trust”) which issued $8,248 of guaranteed undivided beneficial interests in the Pacific Continental’s Junior Subordinated Deferrable Interest Debentures (“Trust Preferred Securities”). Pacific Continental has not consolidated the accounts of the Trust in its consolidated financial statements in accordance with generally accepted accounting principles, (“GAAP”). As a result, the junior subordinated debentures issued by Pacific Continental to the issuer trust, totaling $8,248, are reflected on Pacific Continental’s consolidated balance sheet at December 31, 2013, under the caption “Junior Subordinated Debentures.” Pacific Continental also recognized its $248 investment in the Trust, which is recorded among “Other Assets” in its consolidated balance sheet at December 31, 2013.

Use of Estimates – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimations made by management involve fair value calculations pertaining to financial assets and liabilities, the calculation of the allowance for loan losses, and the impairment assessment for goodwill.

Cash and Cash Equivalents – For purposes of reporting cash flows, cash and cash equivalents includes cash on hand, amounts due from or deposited with banks, interest-bearing balances due from banks, and federal funds sold. Generally, federal funds are sold for one-day periods.

The Company is required to maintain certain reserves with the Federal Reserve Bank as defined by regulation. Such reserves totaling $1,430 and $1,061 were maintained within the Company’s cash balances at December 31, 2013, and 2012, respectively.

Securities Available-for-Sale – Securities available-for-sale are held for indefinite periods of time and may be sold in response to movements in market interest rates, changes in the maturity or mix of Company assets and liabilities or demand for liquidity. Management determines the appropriate classification of securities at the time of purchase. The Company classified all of its securities as available-for-sale throughout 2013 and 2012.

Securities classified as available-for-sale are reported at estimated fair value based on available market prices. Net unrealized gains and losses are included in other comprehensive income or loss on an after-tax basis. Impaired securities are assessed quarterly for the presence of other-than-temporary impairment (“OTTI”). OTTI is considered to have occurred, (1) if we intend to sell the security, (2) if it is “more likely than not” we will be required to sell the security before recovery of its amortized cost basis, or (3) the present value of expected cash flows is not sufficient to recover the entire amortized cost basis. The “more likely than not” criteria is a lower threshold than the “probable” criteria used under previous guidance.

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When OTTI is identified, the amount of the impairment is bifurcated into two components: the amount representing credit loss and the amount related to all other factors. The amount representing credit loss is recognized against earnings as a realized loss and the amount representing all other factors is recognized in other comprehensive income as an unrealized loss. Gains and losses on the sale of available-for-sale securities are determined using the specific-identification method. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Interest income on securities available-for-sale is included in income using the level yield method.

Loans Held-for-Sale and Mortgage Banking Activities – The Company historically originated residential mortgage loans for resale in the secondary market. Sales were without recourse and the Company generally did not retain mortgage servicing rights. During first quarter 2012 the company closed the mortgage division and no additional loans held-for-sale were generated during the remainder of 2012 and 2013.

Loans, Income Recognition, and the Allowance for Loan Losses – Loans are stated at the amount of unpaid principal net of loan premiums or discounts for purchased loans, net deferred loan origination fees, discounts associated with retained portions of loans sold, and an allowance for loan losses. Interest on loans is calculated using the simple-interest method on daily balances of the principal amount outstanding. Loan origination fees, net of origination costs and discounts, are amortized over the lives of the loans as adjustments to yield.

Nonaccrual Loans

Accrual of interest is discontinued on contractually delinquent loans when management believes that, after considering economic and business conditions and collection efforts, the borrower’s financial condition is such that collection of principal or interest is doubtful. At a minimum, loans that are past due as to maturity or payment of principal or interest by 90 days or more are placed on nonaccrual status, unless such loans are well-secured and in the process of collection. Interest income is subsequently recognized only to the extent cash payments are received satisfying all delinquent principal and interest amounts, and the prospects for future payments in accordance with the loan agreement appear relatively certain. In accordance with GAAP, payments received on nonaccrual loans are applied to the principal balance and no interest income is recognized.

Allowance for Loan Losses Methodology

Management provides for possible loan losses by maintaining an allowance. The allowance for loan losses is established through a provision for loan losses charged to expense. Loans are charged against the allowance when management believes the collection of principal or interest is unlikely. The allowance is an amount that management considers adequate to absorb possible losses on existing loans based on its evaluation of the collectability of those loans and prior loss experience. Management’s evaluations take into consideration such factors as changes in the size and nature of the loan portfolio, the overall portfolio quality, the financial condition of borrowers, the level of nonperforming loans, the Company’s historical loss experience, the estimated value of underlying collateral, and current economic conditions that may affect the borrower’s ability to pay. This evaluation is inherently subjective as it requires estimates that are susceptible to significant subsequent revision as more information becomes available.

The allowance consists of general, specific and unallocated components. The general component covers all loans not specifically identified for impairment testing. The specific component relates to loans that are individually assessed for impairment. The combined general and specific components of the allowance constitute the Company’s allocated allowance for loan losses. An unallocated allowance may be maintained to provide for credit losses inherent in the loan portfolio that may not have been contemplated in the general risk factors or the specific allowance analysis.

The Company performs regular credit reviews of the loan portfolio to determine the credit quality of the portfolio and the Company’s adherence to underwriting standards. When loans are originated, they are assigned a risk rating that is reassessed periodically during the terms of the loans through the credit review process. The risk rating categories constitute a primary factor in determining an appropriate amount for the general allowance for loan losses. The general allowance is calculated by applying risk factors to pools of outstanding loans. Risk factors are assigned based on management’s evaluation of the losses inherent within each identified loan category. Loan categories with greater risk of loss are therefore assigned a higher risk factor. The Company’s Asset and Liability Committee (“ALCO”) and Board of Directors are responsible for, among other things, regularly reviewing the allowance for loan losses methodology, including loss factors, and ensuring that it is designed and applied in accordance with generally accepted accounting principles.

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Regular credit reviews of the portfolio are performed to identify loans that are considered potentially impaired. Potentially impaired loans are referred to the ALCO Committee which reviews loans recommended for impairment. A loan is considered impaired when, based on current information and events, the Company is unlikely to collect all principal and interest due according to the terms of the loan agreement. When a loan is deemed to be impaired, the amount of the impairment is measured using discounted cash flows except when the sole remaining source of the repayment is the liquidation of the collateral. In these cases, the current fair value of the collateral, less selling costs is used. Impairment is recognized as a specific component within the allowance for loan losses if the value of the impaired loan is less than the recorded investment in the loan. When the amount of the impairment represents a confirmed loss, it is charged off against the allowance for loan losses. Loans specifically reviewed for impairment are excluded from the general allowance calculation to prevent double-counting the loss exposure. The Company’s ALCO Committee reviews loans recommended for impaired status and those recommended to be removed from impaired status. The Company’s ALCO Committee and Board provide oversight of the allowance for loan losses process and review and approve the allowance methodology on a quarterly basis.

There have been no significant changes to the Company’s loan loss allowance methodology or policies in the periods presented.

Charge off Methodology

When it becomes evident that a loan has a probable loss and is deemed uncollectable, regardless of delinquent status, the loan is charged off. A partial charge-off will occur to the extent of the portion of the loan that is not well secured and is in the process of collection. Additionally, a partial charge-off will occur to the extent of the portion of the loan that is not guaranteed by a federal or state government agency and is in the process of collection. In circumstances whereby it is evident that a government guarantee will not be honored, the loan will be charged-off to the extent of the portion of the loan/lease that is not well secured. Commercial overdrafts will be charged-off within the month the delinquent checking account becomes 90 days delinquent.

Troubled Debt Restructuring

Loans are reported as a troubled debt restructuring when the Company grants a concession to a borrower experiencing financial difficulties that it would not otherwise consider. Examples of such concessions include a reduction in the loan rate, forgiveness of principal or accrued interest, extending the maturity date, or providing a lower interest rate than would be normally available for a transaction of similar risk. The Company will undertake a restructuring only when it occurs in ways which improve the likelihood that the credit will be repaid in full under the modified terms and in accordance with a reasonable repayment schedule.

Off-Balance Sheet Credit Exposure – A reserve for unfunded commitments is maintained at a level that, in the opinion of management, is adequate to absorb probable losses associated with the Company’s commitment to lend funds under existing agreements such as letters or lines of credit. Management determines the adequacy of the reserve for unfunded commitments based upon reviews of individual credit facilities, current economic conditions, the risk characteristics of the various categories of commitments and other relevant factors. These factors include the quality of the current loan portfolio: the trend in the loan portfolio’s risk ratings, current economic conditions, loan concentrations, loan growth rates, past-due and nonperforming trends, evaluation of specific loss estimates for all significant problem loans, historical charge-off and recovery experience, and other pertinent information. The reserve is based on estimates and ultimate losses may vary from the current estimates. These estimates are evaluated on a regular basis and, as adjustments become necessary, they are reported in earnings in the periods in which they become known. Draws on unfunded commitments that are considered uncollectible at the time funds are advanced are charged to the allowance. Provisions for unfunded commitment losses and recoveries on loans commitments previously charged-off are added to the reserve for unfunded commitments, which is included in the Other Liabilities section of the consolidated balance sheets. At December 31, 2013, the reserve for unfunded loan commitments totaled $226 compared to $170 at December 31, 2012.

Foreclosed Assets – Assets acquired through foreclosure, or deeds in lieu of foreclosure, are initially recorded at fair value less the estimated cost of disposal, at the date of foreclosure. Any excess of the loan’s balance over the fair value of the foreclosed collateral is charged to the allowance for loan losses.

Improvements to foreclosed assets are capitalized to the extent that the improvements increase the fair value of the assets. Expenditures for routine maintenance and repairs of foreclosed assets are charged to expense as incurred. Management performs periodic valuations of foreclosed assets and may adjust the values to the lower of carrying amount or fair value less the estimated costs to sell. Write downs to net realizable value, if any, and disposition gains or losses are included in noninterest income or expense.

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Federal Home Loan Bank Stock – The investment in Federal Home Loan Bank (“FHLB”) stock is carried at par value, which approximates its fair value. As a member of the FHLB system, the Company is required to maintain a minimum level of investment in FHLB stock based on specific percentages of its outstanding mortgages, total assets or FHLB advances.

FHLB stock is generally viewed as long-term investment. Accordingly, when evaluating FHLB stock for impairment its value is determined based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. The determination of whether the decline affects the ultimate recoverability is influenced by criteria such as the following:

• The significance of the decline in net assets of the FHLBs as compared to the capital stock amount for the FHLBs and the length of time this situation has persisted.

• Commitments by the FHLBs to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLBs.

• The impact of legislative and regulatory changes on the institution and, accordingly, on the customer base of the FHLBs.

• The liquidity position of the FHLBs.

Property, Plant and Equipment – Property is stated at cost, net of accumulated depreciation and amortization. Additions, betterments and replacements of major units are capitalized. Expenditures for normal maintenance, repairs and replacements of minor units are charged to expense as incurred. Gains or losses realized from sales or retirements are reflected in operations currently.

Depreciation and amortization is computed by the straight-line method over the estimated useful lives of the assets. Estimated useful lives are 30 to 40 years for buildings, 3 to 10 years for furniture and equipment, and up to the lesser of the useful life or lease term for leasehold improvements.

Goodwill and Intangible Assets – Intangible assets are comprised of goodwill and other intangibles acquired in business combinations. Goodwill and intangible assets with indefinite useful lives are not amortized. Intangible assets with definite useful lives are amortized to their estimated residual values over their respective estimated useful lives, and also reviewed for impairment. The Company performs a goodwill impairment analysis on an annual basis as of December 31. Additionally, the Company performs a goodwill impairment evaluation on an interim basis when events or circumstances indicate impairment potentially exists. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others, a significant decline in our expected future cash flows; a sustained, significant decline in our stock price and market capitalization; a significant adverse change in legal factors or in the business climate; adverse action or assessment by a regulator; and unanticipated competition.

Bank-owned Life Insurance – Bank-owned life insurance is recorded at the estimated cash-surrender value of the policies. Increases in the cash-surrender value are recorded as noninterest income.

Advertising – Advertising costs are charged to expense during the year in which they are incurred. Advertising expenses were $894, $779, and $720, for the years ended December 31, 2013, 2012 and 2011, respectively.

Income Taxes – Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are calculated using tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established to reduce the net carrying amount of deferred tax assets if it is determined to be more likely than not that all or some of the potential deferred tax asset will not be realized.

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The Company follows the provisions of the Financial Accounting Standards Boards’ (“FASB”) ASC 740, “Income Taxes,” relating to accounting for uncertain tax positions. Uncertain tax positions may arise when the Company takes or expects to take a tax position that is ultimately disallowed by the relevant taxing authority. The Company files income tax returns with the Internal Revenue Service and any states in which it has identified that it has nexus. Tax returns for the years subsequent to 2009 remain open to examination by the taxing jurisdictions. Management reviews the Company’s balance sheet, income statement, income tax provision and income tax returns as well as the permanent and temporary adjustments affecting current and deferred income taxes quarterly and assesses whether uncertain tax positions exist. At December 31, 2013, management does not believe that any uncertain tax positions exist, that are not more-likely-than-not, sustainable upon examination. The Company’s policy with respect to interest and penalties ensuing from income tax settlements is to recognize them as noninterest expense.

Earnings Per Share – Basic earnings per share are computed by dividing net income by the weighted average number of shares outstanding during the period. Diluted earnings per share include the effect of common stock equivalents that would arise from the exercise of stock options discussed in Note 15. Weighted shares outstanding are adjusted retroactively for the effect of stock dividends.

Weighted average shares outstanding at December 31, are as follows:

	2013		2012		2011
Basic		17,871,439		18,085,607		18,427,657
Common stock equivalents attributable to stock-based compensation plans		188,484		152,553		91,890
Diluted		18,059,923		18,238,160		18,519,547

Equity grants, including options and Stock Appreciation Rights, for 368,705, 452,480 and 266,859 shares of common stock were excluded from the diluted earnings per share calculation in 2013, 2012 and 2011, respectively, due to their anti-dilutive effect.

Share-Based Payment Plans – Financial accounting standards require companies to measure and recognize compensation expense for all share-based payments at the grant date based on the fair value of the award, as defined in FASB ASC 718, “Stock Compensation,” and include such costs as an expense in their income statements over the requisite service (vesting) period. The Company estimates the impact of forfeitures based on historical experience with previously granted share-based compensation awards, and considers the impact of the forfeitures when determining the amount of expense to record. The Company generally issues new shares of common stock to satisfy stock option exercises. The Company uses the Black-Scholes option pricing model to measure fair value. No options or Stock Appreciation Rights (“SARs”) were granted in 2012 or 2013. ISOs, nonqualified stock options, restricted stock, restricted stock units, and stock-settled SARs are recognized as equity-based awards and compensation expense is recorded to the income statement over the requisite vesting period based on the grant-date fair value. SARs settled in cash are recognized on the balance sheet as liability-based awards. The grant-date fair value of liability-based awards vesting in the current period, along with the change in fair value of the awards during the period, are recognized as compensation expense and as an adjustment to the recorded liability.

Fair Value Measurements – Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820, “Fair Value Measurements,” establishes a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable. Observable inputs reflect market-derived or market-based information obtained from independent sources while unobservable inputs reflect our estimates about market data. In general, fair values determined by Level 1 inputs utilize quoted prices for identical assets or liabilities traded in active markets that the Company has the ability to access. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure

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fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Recently Issued Accounting Pronouncements –

In July 2012, the FASB issued ASU No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment. With this update, a company testing indefinite-lived intangibles for impairment now has the option to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount in accordance with current guidance. An entity also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. An entity will be able to resume performing the qualitative assessment in any subsequent period. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after September 15, 2012. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The Update requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component and to present either on the face of the statement where net income is presented, or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required to be reclassified to net income in its entirety in the same reporting period. The amendments are effective for annual and interim reporting periods beginning on or after December 15, 2013. The Company is currently in the process of evaluating the ASU but does not expect it will have a material impact on the Company’s consolidated financial statements.

In July 2013, the FASB issued ASU No. 2013-10, Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes . ASU No. 2013-10 permits the use of the Fed Funds Effective Swap Rate (OIS) to be used as a U.S. benchmark interest rate for hedge account purposes. The amendment is effective prospectively for qualifying new or redesiginated hedging relationships entered into on or after July 17, 2013. The adoption of ASU No. 2013-10 did not have a material impact on the Company’s consolidated financial statements.

In July 2013, the FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU No. 2013-11 requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. No new recurring disclosures are required. The amendments are effective for annual and interim reporting periods beginning on or after December 15, 2013 and are to be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The adoption of ASU No. 2013-11 is not expected to have a material impact on the Company’s consolidated financial statements.

In January 2014, the FASB issued ASU No. 2014-01, Accounting for Investments in Qualified Affordable Housing Projects. ASU 2014-04 permit an entity to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognize the net investment performance in the income statement as a component of income tax expense (benefit). The amendments are effective for annual and interim reporting periods beginning on or after December 15, 2014 and should be applied prospectively. The Company is currently reviewing the requirements of ASU No. 2014-01, but does not expect the ASU to have a material impact on the Company’s consolidated financial statements.

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In January 2014, the FASB issued ASU No. 2014-04, Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon foreclosure. ASU 2014-04 clarifies that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments are effective for annual and interim reporting periods beginning on or after December 15, 2014 and can be applied with a modified retrospective transition method or prospectively. The adoption of ASU No. 2014-04 is not expected to have a material impact on the Company’s consolidated financial statements.

Subsequent events – The Company has evaluated events and transactions subsequent to December 31, 2013 for potential recognition or disclosure.

Reclassifications – Certain amounts contained in the 2012 and 2011 consolidated financial statements have been reclassified where appropriate to conform to the financial statement presentation used in 2013. These reclassifications had no effect on previously reported net income.

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NOTE 2—SECURITIES AVAILABLE-FOR-SALE:

The amortized cost and estimated fair values of securities available-for-sale at December 31, 2013, are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Securities in Continuous Unrealized Loss Position For Less Than 12 Months		Securities in Continuous Unrealized Loss Position For 12 Months or Longer
Unrealized Loss Positions
Obligations of U.S. government agencies	$	17,268	$	—	$	(276	)	$	16,992	$	16,992	$	—
Obligations of states and political subdivisions:		40,408		—		(2,180	)		38,228		36,873		1,356
Private-label mortgage-backed securities		2,679		—		(245	)		2,434		1,256		1,178
Mortgage-backed securities		103,851		—		(1,928	)		101,923		68,647		33,275
SBA variable vate pools		3,722		—		(44	)		3,678		3,678		—
	$	167,928	$	—	$	(4,673	)	$	163,255	$	127,446	$	35,809
Unrealized Gain Positions
Obligations of U.S. government agencies	$	13,515	$	340	$	—		$	13,855
Obligations of states and political subdivisions		39,210		1,357		—			40,567
Private-label mortgage-backed securities		2,790		90		—			2,880
Mortgage-backed securities		119,181		2,616		—			121,797
SBA variable rate pools		5,004		28		—			5,032
		179,700		4,431		—			184,131
	$	347,628	$	4,431	$	(4,673	)	$	347,386

At December 31, 2013, unrealized losses exist on certain securities classified as obligations of states and political subdivisions, mortgage-backed securities, and private-label mortgage-backed securities. The unrealized losses on securities that are obligations of states and political subdivision are deemed to be temporary. Additionally, the unrealized losses on agency mortgage-backed securities are deemed to be temporary, as they continue to perform adequately and are backed by various government-sponsored enterprises (“GSEs”). These decreases in fair value are associated with the changes in market interest rates or the widening of market spreads subsequent to the initial purchase of the securities, and not due to concerns regarding the underlying credit of the issuers or the underlying collateral. The decline in value of these securities has resulted from current economic conditions. Although yields on these securities may be below market rates during the period, no loss of principal is expected.

At December 31, 2013, of the 445 investment securities held, there were 187 investment securities in unrealized loss positions. The unrealized loss associated with the investments of $35,809 in a continuous unrealized loss position for twelve months or longer was $947, of which $201 is related to private-label mortgage-backed securities, and $619 is related to mortgage-backed securities. The Company has no current intent, nor is it more likely than not, that it will be required to sell these securities before the recovery of carrying value.

During the fourth quarter 2013 management reviewed all of its private-label mortgage-backed securities for the presence of other-than-temporary impairment (“OTTI”). Management’s evaluation included the use of independently-generated third-party credit surveillance reports that analyze the loans underlying each security. These reports include estimates of default rates and severities, life collateral loss rates, and static voluntary prepayment assumptions to generate estimated cash flows at the individual security level. Additionally, management considered factors such as downgraded credit ratings, severity and duration of the impairments, the stability of the issuers, and any discounts paid when the securities were purchased. During the fourth quarter 2013, management booked an impairment of $8 on one of its private-label mortgage-backed securities. Management has considered all available information related to the collectability of the impaired investment securities and believes that the estimated credit loss is appropriate.

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Following is a tabular roll-forward of the amount of credit-related OTTI recognized in earnings during 2013, 2012 and 2011:

	December 31,
	2013		2012		2011
Balance, beginning of period:	$	204	$	204	$	226
Additions:
OTTI credit loss recorded		23		—		10
Less:
OTTI reduction from sale or maturity		—		—		(32	)
Balance, end of period:	$	227	$	204	$	204

At December 31, 2013, seven of the Company’s private-label mortgage-backed securities with an amortized cost of $2,593 were classified as substandard as their ratings were below investment grade. Securities with an amortized cost of $3,281 and $3,644 were classified as substandard at December 31, 2012, and December 31, 2011, respectively.

The projected average life of the securities portfolio is 4.2 years and its modified duration is 3.8 years.

The amortized cost and estimated fair values of securities available-for-sale at December 31, 2012, are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Securities in Continuous Unrealized Loss Position For Less Than 12 Months		Securities in Continuous Unrealized Loss Position For 12 Months or Longer
Unrealized Loss Positions
Obligations of U.S. government agencies	$	—	$	—	$	—		$	—	$	—	$	—
Obligations of states and political subdivisions:		12,540		—		(137	)		12,403		12,403		—
Private-label mortgage-backed securities		3,130		—		(435	)		2,695		—		2,696
Mortgage-backed securities		95,803		—		(850	)		94,953		77,797		17,155
SBA variable rate pools		—		—		—			—		—		—
	$	111,473	$	—	$	(1,422	)	$	110,051	$	90,200	$	19,851
Unrealized Gain Positions
Obligations of U.S. government agencies	$	17,175	$	669	$	—		$	17,844
Obligations of states and political subdivisions		64,845		4,253		—			69,098
Private-label mortgage-backed securities		5,704		201		—			5,905
Mortgage-backed securities		181,257		5,730		—			186,987
SBA variable rate pools		—		—		—			—
		268,981		10,853		—			279,834
	$	380,454	$	10,853	$	(1,422	)	$	389,885

At December 31, 2012, of the 450 investment securities held, there were 20 investment securities in unrealized loss positions. The unrealized loss associated with the investments of $19,851 in a continuous unrealized loss position for twelve months or longer was $604, of which $435 was related to private-label mortgage backed securities, and $169 was related to mortgage-backed securities.

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The amortized cost and estimated fair value of securities at December 31, 2013, and 2012, are shown below by maturity or projected average life, depending on the type of security. Obligations of U.S. government agencies and states and political subdivisions are shown by contractual maturity. Mortgage-backed securities are shown by projected average life.

	December 31, 2013				December 31, 2012
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	18,707	$	18,870	$	55,559	$	55,690
Due after one year through 5 years		217,713		219,375		182,156		185,857
Due after 5 years through 10 years		66,103		65,432		138,243		143,698
Due after 10 years		45,105		43,709		4,496		4,640
	$	347,628	$	347,386	$	380,454	$	389,885

During 2013 four investment securities were sold resulting in proceeds of $1,843, and losses on sales of $8. The specific identification method was used to determine the cost of the securities sold. No securities were sold during 2012.

At December 31, 2013, securities with amortized costs of $23,597 (estimated market values of $23,311) were pledged to secure public deposits, as required by law. At December 31, 2013, securities with an aggregate amortized cost of $2,501 (estimated aggregate market value of $2,601) were pledged for repurchase accounts. At December 31, 2013, there were no balances outstanding on any repurchase agreements.

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NOTE 3—LOANS, ALLOWANCE FOR LOAN LOSSES, AND CREDIT QUALITY INDICATORS

Loans are stated at the amount of unpaid principal net of loan premiums or discounts for purchased loans, net deferred loan origination fees, discounts associated with retained portions of loans sold, and an allowance for loan losses. Interest on loans is calculated using the simple-interest method on daily balances of the principal amount outstanding. Loan origination fees, net of origination costs and discounts, are amortized over the lives of the loans as adjustments to yield.

Major classifications of loans, including loans held-for-sale, at December 31 are as follows:

	December 31,			% of gross			December 31,			% of gross
	2013			loans			2012			loans
Real estate secured loans:
Permanent Loans:
Multi-family residential	$	46,217			4.6	%	$	45,212			5.2	%
Residential 1-4 family		46,438			4.7	%		51,437			5.9	%
Owner-occupied commercial		249,311			25.1	%		219,276			25.2	%
Nonowner-occupied commercial		158,786			16.0	%		145,315			16.7	%
Total permanent real estate loans		500,752			50.4	%		461,240			53.0	%
Construction Loans:
Multi-family residential		23,419			2.4	%		17,022			2.0	%
Residential 1-4 family		26,512			2.7	%		20,390			2.3	%
Commercial real estate		30,516			3.1	%		23,235			2.7	%
Commercial bare land and acquisition & development		11,473			1.2	%		10,668			1.2	%
Residential bare land and acquisition & development		6,990			0.6	%		8,405			0.9	%
Total construction real estate loans		98,910			10.0	%		79,720			9.1	%
Total real estate loans		599,662			60.4	%		540,960			62.1	%
Commercial loans		390,301			39.2	%		325,604			37.4	%
Consumer loans		3,878			0.3	%		3,581			0.4	%
Other loans		928			0.1	%		1,112			0.1	%
Gross loans		994,769			100.0	%		871,257			100.0	%
Deferred loan origination fees		(924	)					(841	)
		993,845						870,416
Allowance for loan losses		(15,917	)					(16,345	)
Total loans, net of allowance for loan losses and net deferred fees	$	977,928					$	854,071

At December 31, 2013, outstanding loans to dental professionals totaled $307,268 and represented 30.89% of total outstanding loans compared to dental professional loans of $270,782 or 31.08% of total loans at December 31, 2012. Additional information about the Company’s dental portfolio can be found in Item 8, Note 4 of the Notes to Consolidated Financial Statements. There are no other industry concentrations in excess of 10.00% of the total loan portfolio. However, as of December 31, 2013, approximately 60.38% of the Company’s loan portfolio was collateralized by real estate and is, therefore, susceptible to changes in local market conditions. While appropriate action is taken to manage identified concentration risks, management believes that the loan portfolio is well diversified by geographic location and among industry groups.

70

Acquired Loans

On February 1, 2013, the Bank acquired all of the assets and liabilities of Century Bank of Eugene, Oregon. The transaction has been accounted for under the acquisition method of accounting for cash consideration of $13,398, which included the consideration paid for all common shares and outstanding warrants and options. The assets and liabilities were recorded at their estimated fair values as of the acquisition date. The fair value estimates are considered provisional and are subject to change for up to one year after the closing date of the acquisition.

Acquired loans presented below at December 31, 2013, and the acquisition date:

	December 31, 2013			February 1, 2013
Contractually required principal payments	$	44,358		$	65,532
Purchase adjustment for credit and interest rate		(1,341	)		(2,193	)
Balance of acquired loans	$	43,017		$	63,339

The acquisition of Century Bank is not considered significant to the Company’s financial statements, therefore pro forma financial information is not presented.

Allowance for Loan Losses

A summary of the activity in the allowance for loan losses is as follows for the years ended 2013, 2012, and 2011:

	Twelve months ended December 31,
	2013			2012			2011
Balance, beginning of period	$	16,345		$	14,941		$	16,570
Provision charged to income		250			1,900			12,900
Loans charged against allowance		(2,088	)		(3,664	)		(15,804	)
Recoveries credited to allowance		1,410			3,168			1,275
Balance, end of period	$	15,917		$	16,345		$	14,941

The allowance for loan losses is established as an amount that management considers adequate to absorb possible losses on existing loans within the portfolio. The allowance consists of general, specific, and unallocated components. The general component is based upon all loans collectively evaluated for impairment. The specific component is based upon all loans individually evaluated for impairment. The unallocated component represents credit losses inherent in the loan portfolio that may not have been contemplated in the general risk factors or the specific allowance analysis. Loans are charged against the allowance when management believes the collection of principal and interest is unlikely.

The Company performs regular credit reviews of the loan portfolio to determine the credit quality and adherence to underwriting standards. When loans are originated, they are assigned a risk rating that is reassessed periodically during the term of the loan through the credit review process. The Company’s internal risk rating methodology assigns risk ratings ranging from one to ten, where a higher rating represents higher risk. The ten-point risk rating categories are a primary factor in determining an appropriate amount for the allowance for loan losses.

Estimated credit losses reflect consideration of all significant factors that affect the collectability of the loan portfolio. The historical loss rate for each group of loans with similar risk characteristics is determined based on the Company’s own loss experience in that group. Historical loss experience and recent trends in losses provides a reasonable starting point for analysis, however they do not by themselves form a sufficient basis to determine the appropriate level for the allowance for loan losses. Qualitative or environmental factors that are likely to cause estimated credit losses to differ from historical losses are also considered including but not limited to:

• Changes in international, regional, and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments,

• Changes in the nature and volume of the portfolio and in the terms of loans,

• Changes in the experience, ability, and depth of lending management and other relevant staff,

71

• Changes in the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans,

• Changes in the quality of the institution’s loan review system,

• Changes in the value of underlying collateral for collateral-dependent loans,

• The existence and effect of any concentrations of credit, and changes in the level of such concentrations,

• The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the institution’s existing portfolio,

• Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses.

• Changes in the current and future US political environment, including debt ceiling negotiations, government shutdown and healthcare reform that may affect national, regional and local economic conditions, taxation, or disruption of national or global financial markets.

The adequacy of the allowance for loan losses and the reserve for unfunded commitments is determined using a consistent, systematic methodology and is monitored regularly based on management’s evaluation of numerous factors. For each portfolio segment, these factors include:

• The quality of the current loan portfolio,

• The trend in the migration of the loan portfolio’s risk ratings,

• The velocity of migration of losses and potential losses,

• Current economic conditions,

• Loan concentrations,

• Loan growth rates,

• Past-due and nonperforming trends,

• Evaluation of specific loss estimates for all significant problem loans,

• Recovery experience,

• Peer comparison loss rates.

During second quarter 2013, after several months of evaluation, the Company changed to full migration analysis from the method of probability of default and loss given default, to determine the appropriate amount of general reserves. The Company believes the change provides a more granular analysis accounting for changes in the composition of the portfolio and credit quality deterioration. This method of analysis involves tracking the loss experience on a rolling population of loans over a period of several quarters and the collection and analysis of historical data to determine what rate of loss the Bank has incurred on similarly criticized loans and how the current portfolio could migrate to loss. The change in methodology did not have a material impact on the allowance for loan losses calculation.

72

A summary of the activity in the allowance for loan losses by major loan classification follows:

	For the year ended December 31, 2013
	Commercial and Other			Real Estate			Construction			Consumer			Unallocated			Total
Beginning balance	$	3,846		$	9,456		$	1,987		$	70		$	986		$	16,345
Charge-offs		(1,658	)		(407	)		—			(23	)		—			(2,088	)
Recoveries		982			360			60			8			—			1,410
Provision (reclassification)		1,943			(1,741	)		(554	)		13			589			250
Ending balance	$	5,113		$	7,668		$	1,493		$	68		$	1,575		$	15,917
	Balances as of December 31, 2013
	Commercial and Other			Real Estate			Construction			Consumer			Unallocated			Total
Ending allowance: collectively evaluated for impairment	$	5,095		$	7,667		$	1,455		$	68		$	1,575		$	15,860
Ending allowance: individually evaluated for impairment		18			1			38			—			—			57
Total ending allowance	$	5,113		$	7,668		$	1,493		$	68		$	1,575		$	15,917
Ending loan balance: collectively evaluated for impairment	$	386,332		$	495,924		$	98,627		$	3,878		$	—		$	984,761
Ending loan balance: individually evaluated for impairment		4,897			4,828			283			—			—			10,008
Total ending loan balance	$	391,229		$	500,752		$	98,910		$	3,878		$	—		$	994,769
	For the year ended December 31, 2012
	Commercial and Other			Real Estate			Construction			Consumer			Unallocated			Total
Beginning balance	$	2,776		$	8,267		$	2,104		$	87		$	1,707		$	14,941
Charge-offs		(1,401	)		(1,190	)		(1,054	)		(19	)		—			(3,664	)
Recoveries		1,917			55			1,188			8			—			3,168
Provision (reclassification)		554			2,324			(251	)		(6	)		(721	)		1,900
Ending balance	$	3,846		$	9,456		$	1,987		$	70		$	986		$	16,345
	Balances as of December 31, 2012
	Commercial and Other			Real Estate			Construction			Consumer			Unallocated			Total
Ending allowance: collectively evaluated for impairment	$	3,844		$	9,456		$	1,987		$	70		$	986		$	16,343
Ending allowance: individually evaluated for impairment		2			—			—			—			—			2
Total ending allowance	$	3,846		$	9,456		$	1,987		$	70		$	986		$	16,345
Ending loan balance: collectively evaluated for impairment	$	322,677		$	455,206		$	79,619		$	3,581		$	—		$	861,083
Ending loan balance: individually evaluated for impairment		4,039			6,034			101			—			—			10,174
Total ending loan balance	$	326,716		$	461,240		$	79,720		$	3,581		$	—		$	871,257
	For the year ended December 31, 2011
	Commercial and Other			Real Estate			Construction			Consumer			Unallocated			Total
Beginning balance	$	2,230		$	10,042		$	3,040		$	64		$	1,194		$	16,570
Charge-offs		(1,403	)		(5,555	)		(8,792	)		(54	)		—			(15,804	)
Recoveries		581			176			498			20			—			1,275
Provision (reclassification)		1,368			3,604			7,358			57			513			12,900
Ending balance	$	2,776		$	8,267		$	2,104		$	87		$	1,707		$	14,941

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The 2013 ending allowance includes $57 in specific allowance for $10,008 of impaired loans ($8,705 net of government guarantees). At December 31, 2012, the Company had $10,174 of impaired loans ($9,493 net of government guarantees) with a specific allowance of $2 assigned. Management believes that the allowance for loan losses was adequate as of December 31, 2013. However, future loan losses may exceed the levels provided for in the allowance for loan losses and could possibly result in additional charges to the provision for loan losses.

Credit Quality Indicators

The Company uses the following loan grades, which are also often used by regulators when assessing the credit quality of a loan portfolio.

Pass – Credit exposure in this category range between the highest credit quality to average credit quality. Primary repayment sources generate satisfactory debt service coverage under normal conditions. Cash flow from recurring sources is expected to continue to produce adequate debt service capacity. There are many levels of credit quality contained in the pass definition, but none of the loans contained in this category rise to the level of special mention.

Special Mention – A special mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. The Bank strictly and carefully employs the FDIC definition in assessing assets that may apply to this category. It is apparent that in many cases asset weaknesses relevant to this definition either, (1) better fit a definition of a “well-defined weakness,” or (2) in our experience ultimately migrate to worse risk grade categories, such as Substandard and Doubtful. Consequently, management elects to downgrade most potential Special Mention credits to Substandard or Doubtful, and therefore adopts a conservative risk grade process in the use of the Special Mention risk grade.

Substandard – A substandard asset is inadequately protected by the current sound worth and paying capacity of the Borrower or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Loans in this category are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified substandard.

Doubtful – An asset classified doubtful has all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Management strives to consistently apply these definitions when allocating its loans by loan grade. The loan portfolio is continuously monitored for changes in credit quality and management takes appropriate action to update the loan risk ratings accordingly. Management has not changed the Company’s policy towards its use of credit quality indicators during the periods reported.

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The following tables present the Company’s loan portfolio information by loan type and credit grade at December 31, 2013, and December 31, 2012:

Credit Quality Indicators

As of December 31, 2013

	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals
Real estate loans
Multi-family residential	$	44,677	$	—	$	1,540	$	—	$	46,217
Residential 1-4 family		37,831		—		8,607		—		46,438
Owner-occupied commercial		239,539		4,278		5,494		—		249,311
Nonowner-occupied commercial		153,055		—		5,731		—		158,786
Total real estate loans		475,102		4,278		21,372		—		500,752
Construction
Multi-family residential		23,419		—		—		—		23,419
Residential 1-4 family		26,145		—		367		—		26,512
Commercial real estate		28,978		—		1,538		—		30,516
Commercial bare land and acquisition & development		11,223		—		250		—		11,473
Residential bare land and acquisition & development		4,346		—		2,644		—		6,990
Total construction loans		94,111		—		4,799		—		98,910
Commercial and other		378,828		—		12,401		—		391,229
Consumer		3,856		—		22		—		3,878
Totals	$	951,897	$	4,278	$	38,594	$	—	$	994,769

Credit Quality Indicators

As of December 31, 2012

	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals
Real estate loans
Multi-family residential	$	43,883	$	—	$	1,329	$	—	$	45,212
Residential 1-4 family		43,458		—		7,979		—		51,437
Owner-occupied commercial		208,713		—		10,563		—		219,276
Nonowner-occupied commercial		141,762		—		3,553		—		145,315
Total real estate loans		437,816		—		23,424		—		461,240
Construction
Multi-family residential		17,022		—		—		—		17,022
Residential 1-4 family		20,278		—		112		—		20,390
Commercial real estate		21,646		—		1,589		—		23,235
Commercial bare land and acquisition & development		10,668		—		—		—		10,668
Residential bare land and acquisition & development		5,449		—		2,956		—		8,405
Total construction loans		75,063		—		4,657		—		79,720
Commercial and other		317,250		—		9,466		—		326,716
Consumer		3,544		—		37		—		3,581
Totals	$	833,673	$	—	$	37,584	$	—	$	871,257

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Past Due and Nonaccrual Loans

The Company uses the terms “past due” and “delinquent” interchangeably. Amortizing loans are considered past due or delinquent based upon the number of contractually required payments not made. Delinquency status for all contractually matured loans, commercial and commercial real estate loans with non-monthly amortization, and all other extensions of credit is determined based upon the number of calendar months past due.

The following tables present an aged analysis of past due and nonaccrual loans at December 31, 2013, and December 31, 2012:

Aged Analysis of Loans Receivable

As of December 31, 2013

	30-59 Days Past Due Still Accruing		60-89 Days Past Due Still Accruing		Greater Than 90 Days Still Accruing		Nonaccrual		Total Past Due and Nonaccrual		Total Current		Total Loans Receivable
Real estate loans
Multi-family residential	$	—	$	—	$	—	$	—	$	—	$	46,217	$	46,217
Residential 1-4 family		137		—		—		636		773		45,665		46,438
Owner-occupied commercial		488		—		—		1,685		2,173		247,138		249,311
Nonowner-occupied commercial		1,188		—		—		136		1,324		157,462		158,786
Total real estate loans		1,813		—		—		2,457		4,270		496,482		500,752
Construction
Multi-family residential		—		—		—		—		—		23,419		23,419
Residential 1-4 family		—		—		—		—		—		26,512		26,512
Commercial real estate		—		—		—		—		—		30,516		30,516
Commercial bare land and acquisition & development		—		—		—		—		—		11,473		11,473
Residential bare land and acquisition & development		—		—		—		—		—		6,990		6,990
Total construction loans		—		—		—		—		—		98,910		98,910
Commercial and other		436		—		—		2,886		3,322		387,907		391,229
Consumer		5		1		—		—		6		3,872		3,878
Total	$	2,254	$	1	$	—	$	5,343	$	7,598	$	987,171	$	994,769

Aged Analysis of Loans Receivable

As of December 31, 2012

	30-59 Days Past Due Still Accruing		60-89 Days Past Due Still Accruing		Greater Than 90 Days Still Accruing		Nonaccrual		Total Past Due and Nonaccrual		Total Current		Total Loans Receivable
Real estate loans
Multi-family residential	$	—	$	—	$	—	$	—	$	—	$	45,212	$	45,212
Residential 1-4 family		351		318		—		1,140		1,809		49,628		51,437
Owner-occupied commercial		—		—		—		3,805		3,805		215,471		219,276
Nonowner-occupied commercial		1,404		—		—		—		1,404		143,911		145,315
Total real estate loans		1,755		318		—		4,945		7,018		454,222		461,240
Construction
Multi-family residential		—		—		—		—		—		17,022		17,022
Residential 1-4 family		234		—		—		—		234		20,156		20,390
Commercial real estate		—		—		—		—		—		23,235		23,235
Commercial bare land and acquisition & development		—		—		—		—		—		10,668		10,668
Residential bare land and acquisition & development		—		—		—		101		101		8,304		8,405
Total construction loans		234		—		—		101		335		79,385		79,720
Commercial and other		264		—		—		4,315		4,579		322,137		326,716
Consumer		8		—		—		—		8		3,573		3,581
Total	$	2,261	$	318	$	—	$	9,361	$	11,940	$	859,317	$	871,257

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Impaired Loans

Regular credit reviews of the portfolio are performed to identify loans that are considered potentially impaired. Potentially impaired loans are referred to the ALCO Committee for review and are included in the specific calculation of allowance for loan losses. A loan is considered impaired when, based on current information and events, the Company is unlikely to collect all principal and interest due according to the terms of the loan agreement. When the amount of the impairment represents a confirmed loss it is charged off against the allowance for loan losses. Impaired loans are often reported net of government guarantees to the extent that the guarantees are expected to be collected. Impaired loans generally include all loans classified as nonaccrual and troubled debt restructurings.

Accrual of interest is discontinued on impaired loans when management believes that, after considering economic and business conditions and collection efforts, the borrower’s financial condition is such that collection of principal or interest is doubtful. Accrued, but uncollected interest is generally reversed when loans are placed on nonaccrual status. Interest income is subsequently recognized only to the extent cash payments are received satisfying all delinquent principal and interest amounts, and the prospects for future payments in accordance with the loan agreement appear relatively certain. In accordance with GAAP, payments received on nonaccrual loans are applied to the principal balance and no interest income is recognized. Interest income may be recognized on impaired loans that are not on nonaccrual status.

77

The following tables display an analysis of the Company’s impaired loans at December 31, 2013, and 2012:

Impaired Loan Analysis

As of December 31, 2013

	Recorded Investment With No Specific Allowance Valuation		Recorded Investment With Specific Allowance Valuation		Recorded Investment		Unpaid Principal Balance		Average Recorded Investment		Related Specific Allowance Valuation
Real estate
Multi-family residential		—		—		—		—		—		—
Residential 1-4 family		912		317		1,229		1,633		2,229		1
Owner-occupied commercial		2,767		—		2,767		3,000		3,359		—
Nonowner-occupied commercial		832		—		832		835		799		—
Total real estate loans		4,511		317		4,828		5,468		6,387		1
Construction
Multi-family residential		—		—		—		—		—		—
Residential 1-4 family		—		—		—		—		—		—
Commercial real estate		—		—		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—		133		—
Residential bare land and acquisition & development		—		283		283		373		413		38
Total construction loans		—		283		283		373		546		38
Commercial and other		4,368		529		4,897		10,627		4,100		18
Consumer		—		—		—		—		—		—
Total impaired loans	$	8,879	$	1,129	$	10,008	$	16,468	$	11,033	$	57

Impaired Loan Analysis

As of December 31, 2012

	Recorded Investment With No Specific Allowance Valuation		Recorded Investment With Specific Allowance Valuation		Recorded Investment		Unpaid Principal Balance		Average Recorded Investment		Related Specific Allowance Valuation
Real estate
Multi-family residential		—		—		—		—		—		—
Residential 1-4 family		1,447		—		1,447		2,032		3,086		—
Owner-occupied commercial		4,229		—		4,229		5,069		4,838		—
Nonowner-occupied commercial		358		—		358		358		165		—
Total real estate loans		6,034		—		6,034		7,459		8,089		—
Construction
Multi-family residential		—		—		—		—		—		—
Residential 1-4 family		—		—		—		—		544		—
Commercial real estate		—		—		—		—		1,219		—
Commercial bare land and acquisition & development		—		—		—		—		5,621		—
Residential bare land and acquisition & development		101		—		101		173		1,024		—
Total construction loans		101		—		101		173		8,408		—
Commercial and other		3,921		118		4,039		9,546		5,204		2
Consumer		—		—		—		—		—		—
Total impaired loans	$	10,056	$	118	$	10,174	$	17,178	$	21,701	$	2

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The impaired balances reported above are not adjusted for government guarantees of $1,532 and $681 at December 31, 2013, and December 31, 2012, respectively. The recorded investment in impaired loans, net of government guarantees totaled $8,476 and $9,493 at December 31, 2013, and December 31, 2012, respectively.

Troubled Debt Restructurings

In the normal course of business, the Company may modify the terms of certain loans, attempting to protect as much of its investment as possible. Management evaluates the circumstances surrounding each modification to determine whether it is a troubled debt restructuring (“TDR”). TDRs exist when 1) the restructuring constitutes a concession, and 2) the debtor is experiencing financial difficulties. The Company adopted the amendments of Accounting Standards Update No. 2012-02, “Receivables – A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring” during the third quarter 2012. The Update requires retrospective application to the beginning of the annual period of adoption.

The following table displays the Company’s TDRs by class at December 31, 2013, and 2012:

	Troubled Debt Restructurings as of
	December 31, 2013				December 31, 2012
	Number of Contracts		Outstanding Recorded Investment		Number of Contracts		Outstanding Recorded Investment
Real estate
Multifamily residential		—	$	—		—	$	—
Residential 1-4 family		7		819		8		565
Owner-occupied commercial		5		1,949		5		2,095
Non owner-occupied commercial		2		714		1		140
Total real estate loans		14		3,482		14		2,800
Construction
Multifamily residential		—		—		—		—
Residential 1-4 family		—		—		—		—
Commercial real estate		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—
Residential bare land and acquisition & development		—		—		5		101
Total construction loans		—		—		5		101
Commercial and other		10		2,379		8		589
Consumer		—		—		—		—
		24	$	5,861		27	$	3,490

The recorded investment in TDRs in nonaccrual status totaled $1,597 and $2,336 at December 31, 2013, and December 31, 2012, respectively. The Bank’s policy is that loans placed on non-accrual will typically remain on non-accrual status until all principal and interest payments are brought current and the prospect for future payment in accordance with the loan agreement appear relatively certain. The Bank’s policy generally refers to six months of payment performance as sufficient to warrant a return to accrual status.

For the twelve months ended December 31, 2013, the Company identified 10 TDRs that are newly considered impaired for which impairment was previously measured under the Company’s general loan loss allowance methodology. The total recorded investment in such receivables was $3,130, and the associated allowance for loan losses was $19 at December 31, 2013.

The types of modifications offered can generally be described in the following categories:

Rate Modification—A modification in which the interest rate is modified.

Term Modification—A modification in which the maturity date, timing of payments, or frequency of payments is changed.

Interest Only Modification—A modification in which the loan is converted to interest only payments for a period of time.

Combination Modification—Any other type of modification, including the use of multiple types of modifications.

79

The following tables present newly non-covered restructured loans that occurred during the twelve months ended December 31, 2013, and 2012, respectively:

	Troubled Debt Restructurings
	Identified during the twelve months ended December 31, 2013
	Rate Modification		Term Modification		Interest Only Modification		Combination Modification
Real estate
Multifamily residential	$	—	$	—	$	—	$	—
Residential 1-4 family		317		—		—		—
Owner-occupied commercial		—		—		—		—
Non owner-occupied commercial		578		—		—		—
Total real estate loans		895		—		—		—
Construction
Multifamily residential		—		—		—		—
Residential 1-4 family		—		—		—		—
Commercial real estate		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—
Residential bare land and acquisition & development		—		—		—		—
Total construction loans		—		—		—		—
Commercial and other		—		773		524		674
Consumer		—		—		—		—
	$	895	$	773	$	524	$	674

	Troubled Debt Restructurings
	Identified during the twelve months ended December 31, 2012
	Rate Modification		Term Modification		Interest Only Modification		Combination Modification
Real estate
Multifamily residential	$	—	$	—	$	—	$	—
Residential 1-4 family		—		—		121		—
Owner-occupied commercial		—		112		—		303
Non owner-occupied commercial		—		—		—		—
Total real estate loans		—		112		121		303
Construction
Multifamily residential		—		—		—		—
Residential 1-4 family		—		—		—		—
Commercial real estate		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—
Residential bare land and acquisition & development		—		127		—		—
Total construction loans		—		127		—		—
Commercial and other		—		228		230		69
Consumer		—		—		—		—
	$	—	$	467	$	351	$	372

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Subsequent to a loan being classified as a TDR, a borrower may become unwilling or unable to abide by the terms of the modified agreement. In such cases of default, the Company takes appropriate action to secure additional payments including the use of foreclosure proceedings. The following table presents loans receivable modified as troubled debt restructurings that subsequently defaulted within twelve months during the period:

	Troubled Debt Restructurings
	That Subsequently Defaulted within the
	12 Month Period Ended December 31,
	2013				2012
	Number of Contracts		Recorded Investment		Number of Contracts		Recorded Investment
Real estate
Multifamily residential		—	$	—		—	$	—
Residential 1-4 family		—		—		2		340
Owner-occupied commercial		1		303		1		411
Non owner-occupied commercial		1		136		—		—
Total real estate loans		2		439		3		751
Construction
Multifamily residential		—		—		—		—
Residential 1-4 family		—		—		—		—
Commercial real estate		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—
Residential bare land and acquisition & development		—		—		—		—
Total construction loans		—		—		—		—
Commercial and other		3		144		1		194
Consumer		—		—		—		—
		5	$	583		4	$	945

At December 31, 2013, and December 31, 2012, the Company had no commitments to lend additional funds on loans restructured as TDRs.

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NOTE 4 – DENTAL LOAN PORTFOLIO:

To assist in understanding the concentrations and risks associated with the Bank’s loan portfolio, the following Note has been included to provide additional information relating to the Bank’s dental lending portfolio. At December 31, 2013, and 2012, loans to dental professionals totaled $307,268 and $270,782, respectively and represented 30.89% and 31.08% of outstanding loans. As of December 31, 2013, and 2012, dental loans supported by government guarantees totaled $16,470 and $18,834. This represented 5.36% and 6.96% of the outstanding dental loan balances.

The Company defines a “dental loan” as loan to dental professionals for the purpose of practice expansion, acquisition or other purpose, supported by the cash flows of a dental practice.

Loan Classification

Major classifications of Dental Loans, at December 31, 2013, and 2012, are as follows:

	December 31,
	2013		2012
Real estate secured loans:
Owner-occupied commercial	$	59,279	$	59,327
Other dental real estate loans		1,967		3,103
Total permanent real estate loans		61,246		62,430
Dental construction loans		5,810		2,093
Total real estate loans		67,056		64,523
Commercial loans		240,212		206,259
Gross loans	$	307,268	$	270,782

Market Area

The Bank’s defined “market area” is within the states of Oregon and Washington west of the Cascade Mountain Range. This area is serviced by branch locations in Eugene, Portland and Seattle. The Company also makes national dental loans throughout the United States. National loan relationships are maintained and serviced by Bank personnel primarily located in Portland.

The following table represents the dental lending by borrower location:

	December 31,
	2013		2012
Local	$	178,673	$	191,908
National		128,595		78,874
Total	$	307,268	$	270,782

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Allowance

The allowance for loan losses identified for the Dental Loan Portfolio is established as an amount that management considers adequate to absorb possible losses on existing loans within the Dental Portfolio. The allowance related to the Dental Loan Portfolio consists of general and specific components. The general component is based upon all Dental Loans collectively evaluated for impairment, including qualitative conditions associated with; loan type, out-of-market location, start-up financing, practice acquisition financing and specialty practice financing. The specific component is based upon Dental Loans individually evaluated for impairment.

	Twelve months ended December 31,
	2013			2012
Balance, beginning of period	$	2,683		$	1,824
Provision charged to income		2,208			1,315
Loans charged against allowance		(1,232	)		(488	)
Recoveries credited to allowance		71			32
Balance, end of period	$	3,730		$	2,683

Credit Quality

Please refer to Note 3 for additional information on the definitions of the credit quality indicators.

The following tables present the Company’s dental loan portfolio information by market and credit grade at December 31, 2013, and 2012:

Dental Credit Quality Indicators As of December 31, 2013
	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals
Local	$	172,708	$	—	$	5,965	$	—	$	178,673
National		127,842		—		753		—		128,595
Total	$	300,550	$	—	$	6,718	$	—	$	307,268
As of December 31, 2012
	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals
Local	$	184,872	$	—	$	7,036	$	—	$	191,908
National		78,480		—		394		—		78,874
Total	$	263,352	$	—	$	7,430	$	—	$	270,782

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Past Due and Nonaccrual Loans

Please refer to Note 3 for additional information on the definitions of “past due.”

The following tables present an aged analysis of the dental loans by market, including nonaccrual loans at December 31, 2013, and 2012:

Aged Analysis of Dental Loans Receivable

As of December 31, 2013

	30-59 Days Past Due Still Accruing		60-89 Days Past Due Still Accruing		Greater Than 90 Days Still Accruing		Nonaccrual		Total Past Due and Nonaccrual		Total Current		Total Loans Receivable
Local	$	—	$	—	$	—	$	2,176	$	2,176	$	176,497	$	178,673
National		—		—		—		224		224		128,371		128,595
Total	$	—	$	—	$	—	$	2,400	$	2,400	$	304,868	$	307,268

Aged Analysis of Dental Loans Receivable

As of December 31, 2012

	30-59 Days Past Due Still Accruing		60-89 Days Past Due Still Accruing		Greater Than 90 Days Still Accruing		Nonaccrual		Total Past Due and Nonaccrual		Total Current		Total Loans Receivable
Local	$	—	$	—	$	—	$	2,499	$	2,499	$	189,409	$	191,908
National		—		—		—		—		—		78,874		78,874
Total	$	—	$	—	$	—	$	2,499	$	2,499	$	268,283	$	270,782

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NOTE 5 – LOAN PARTICIPATIONS AND SERVICING:

In the normal course of business the Company may sell portions of loans to other institutions for cash in order to extend its lending capacity or to mitigate risk. These sales are commonly referred to as loan participations. Loan participations are performed without recourse and the participant’s interest is ratably concurrent with that retained by the Company. Cash flows are shared proportionately and neither the Company’s nor the participant’s interest is subordinated. The Company retains servicing rights and manages the client relationships for a reasonable servicing fee. The participated portion of these loans is not included in the accompanying consolidated balance sheets and the servicing component of these transactions are not material to the consolidated financial statements. The Company’s exposure to loss is limited to its retained interest in the loans.

The following table reflects the amounts of loans participated.

	December 31,
	2013			2012
Total principal amount outstanding	$	25,179		$	42,020
less: principal amount derecognized		(13,268	)		(20,901	)
Principal amount included in loans on the balance sheet	$	11,911		$	21,119

NOTE 6 – PROPERTY AND EQUIPMENT:

The balance of property and equipment net of accumulated depreciation and amortization at December 31, 2013, and 2012 consists of the following:

	December 31,
	2013			2012
Land	$	3,831		$	3,831
Buildings and improvements		19,039			18,702
Furniture and equipment		12,424			11,794
		35,294			34,327
less: accumulated depreciation & amortization		(16,458	)		(15,089	)
Net property and equipment	$	18,836		$	19,238

Depreciation expense was $1,495, $1,482, and $1,486, for the years ended December 31, 2013, and 2012, and 2011, respectively.

The Company leases certain facilities for office locations under non-cancelable operating lease agreements expiring through 2027. Rent expense related to these leases totaled $1,381, $1,141, and $1,152, in 2013, 2012, and 2011, respectively. The Company leases approximately 26.0% of its Springfield Gateway building to others under non-cancelable operating lease agreements extending through 2016.

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Future minimum payments required and anticipated lease revenues under these leases are:

	Lease Commitments		Property Leased to Others
2014	$	1,111	$	341
2015		663		247
2016		402		227
2017		398		—
2018		270		—
Thereafter		2,028		—
	$	4,872	$	815

NOTE 7 – GOODWILL AND INTANGIBLE ASSETS:

The following table summarizes the changes in the Company’s goodwill and core deposit intangible asset for the three years ended December 31:

	December 31,
	2013			2012			2011
Goodwill	$	22,881		$	22,031		$	22,031
Core deposit intangible asset		845			204			427
Amortization		(110	)		(204	)		(223	)
Total goodwill and intangible assets	$	23,616		$	22,031		$	22,235

At December 31, 2013, the Company had a recorded balance of $22,881 in goodwill from the November 30, 2005, acquisition of Northwest Business Financial Corporation (“NWBF”) and the February 1, 2013, acquisition of Century Bank. In addition, the Company had $735 of core deposit intangible assets resulting from the acquisition of Century Bank. The Century Bank core deposit intangible was determined to have an expected life of seven years, and is being amortized over that period using the straight-line method. The Century Bank core deposit intangible will be fully amortized in January 2020.

NOTE 8 – DEPOSITS:

Scheduled maturities or repricing of time deposits at December 31, are as follows:

	December 31,
	2013		2012
2013	$	—	$	94,974
2014		86,821		8,862
2015		13,501		14,282
2016		15,431		13,480
2017		14,609		5,792
2018		8,592		4,050
Thereafter		25,504		20,196
	$	164,458	$	161,636

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NOTE 9 – FEDERAL FUNDS AND OVERNIGHT FUNDS PURCHASED:

The Company has unsecured federal funds borrowing lines with various correspondent banks totaling $129,000. At December 31, 2013, and December 31, 2012 there was $5,150 and $11,570 outstanding on these lines, respectively.

The Company also has a secured overnight borrowing line available from the Federal Reserve Bank that totaled $92,579 and $87,740 at December 31, 2013, and December 31, 2012, respectively. The Federal Reserve Bank borrowing line is secured through the pledging of approximately $139,166 of commercial loans under the Company’s Borrower-In-Custody program. At December 31, 2013, and December 31, 2012, there were no outstanding borrowings on this line.

NOTE 10 – FEDERAL HOME LOAN BANK BORROWINGS:

The Company has a borrowing limit with the FHLB equal to 30.00% of total assets, subject to discounted collateral. The Company does have the ability to access the FHLB excess stock pool, thus borrowing is not limited by FHLB stock held. At December 31, 2013, the maximum borrowing line was $434,963; however, the FHLB borrowing line was limited by the discounted value of collateral pledged. The Company had pledged $436,744 in real estate loans to the FHLB that had a discounted value of $229,547. There was $160,000 borrowed on this line at December 31, 2013.

At December 31, 2012, the maximum FHLB borrowing line was $412,046, and the Company had pledged real estate loans and securities to the FHLB with a discounted value of $226,278. There was $118,000 borrowed on this line at December 31, 2012.

Federal Home Loan Bank borrowings by year of maturity and applicable interest rate are summarized as follows as of December 31:

	Current			December 31,
	Rates			2013		2012
Cash management advance		—		$	—	$	—
2013		NA			—		77,000
2014		0.22% - 0.24	%		119,000		—
2015		0.60% - 1.60	%		13,500		13,500
2016		1.84% - 2.36	%		22,500		22,500
2017		2.28	%		3,000		3,000
2018		—			—		—
Thereafter		3.85	%		2,000		2,000
				$	160,000	$	118,000

NOTE 11 – JUNIOR SUBORDINATED DEBENTURES:

In connection with the November 2005 acquisition of NWB Financial Corporation, the Company formed a wholly owned Delaware statutory business trust subsidiary, Pacific Continental Corporation Capital Trust (the “Trust”), which issued $8,248 of guaranteed undivided beneficial interests in the Company’s Junior Subordinated Deferrable Interest Debentures (“Trust Preferred Securities”). These debentures qualify as Tier 1 capital under Federal Reserve Board guidelines. All of the common securities of the Trust are owned by the Company. The proceeds from the issuance of the common securities and the Trust Preferred Securities were used by the Trust to purchase $8,248 of junior subordinated debentures of the Company. The debentures, which represent the sole asset of the Trust, accrued and paid distributions quarterly at a fixed rate of 6.265% per annum of the stated liquidation value of $1 per capital security. At January 7, 2012, the interest rate changed to a variable rate of three-month LIBOR plus 135 basis points. See note 12 for additional information regarding the interest rate SWAP agreement executed on the debenture in 2013.

The Company has entered into contractual arrangements which, taken collectively, fully and unconditionally guarantee payment of (1) accrued and unpaid distributions required to be paid on the Trust Preferred Securities, (2) the redemption price with respect to any Trust Preferred Securities called for redemption by the Trust, and (3) payments due upon a voluntary or involuntary dissolution, winding up, or liquidation of the Trust. The Trust Preferred Securities are

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mandatorily redeemable upon maturity of the debentures on January 7, 2036, or upon earlier redemption as provided in the indenture. The Company has the right to redeem the debentures purchased by the Trust in whole or in part, on or after, January 7, 2012. As specified in the indenture, if the debentures are redeemed prior to maturity, the redemption price will be the principal amount and any accrued interest. For the years ended December 31, 2013, 2012, and 2011, the Company recognized net interest expense of $200, $151, and $136, respectively, related to the Trust Preferred Securities.

NOTE 12 – DERIVATIVE INSTRUMENTS:

Derivative instruments are entered into primarily as a risk management tool of the Company to help manage its interest rate risk position. Financial derivatives are recorded at fair value as other assets and other liabilities. The accounting for changes in the fair value of a derivative depends on whether it has been designated and qualifies as part of a hedging relationship. For a fair value hedge, changes in the fair value of the derivative instrument and changes in the fair value of the hedged asset or liability are recognized currently in earnings. For a cash flow hedge, changes in the fair value of the derivative instrument, to the extent that it is effective, are recorded in accumulated other comprehensive income and subsequently reclassified to earnings as the hedged transaction impacts net income. Any ineffective portion of a cash flow hedge is recognized currently in earnings.

During the second quarter 2013, the Company entered into an interest rate swap agreement with an $8,000 notional amount to convert its variable-rate Junior Subordinated Debenture debt into a fixed rate for a term of approximately 7 years at a rate of 2.73%. The derivative is designated as a cash flow hedge. The hedge meets the definition of highly effective and the Company expects the hedge to be highly effective throughout the remaining term of the swap. The fair value of the derivative instrument at December 31, 2013, was a $405 unrealized gain, which is recorded in the other asset section of the balance sheet, net of the tax effect. No gain or loss was recognized in earnings for the twelve months ended December 31, 2013, related to interest rate swaps.

The Company maintains written documentation for the hedge. This documentation identifies the hedging objective and strategy, the hedging instrument, the instrument being hedged, the reasoning behind the assertion that the hedge is highly effective and the methodology for measuring ongoing hedge effectiveness and ineffectiveness. The Company pledged $400 under collateral arrangements as of April 22, 2013, to satisfy collateral requirements associated with the interest rate swap contract.

NOTE 13 – INCOME TAXES:

The provision for income taxes for the years ended December 31 consists of the following:

	2013			2012			2011
Currently payable:
Federal	$	6,682		$	6,423		$	245
State		(209	)		50			50
		6,473			6,473			295
Deferred:
Federal		(496	)		(1,152	)		713
State		1,239			838			710
		743			(314	)		1,423
Total income tax provision	$	7,216		$	6,159		$	1,718

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The provision (benefit) for income taxes results in effective tax rates which are different than the federal income tax statutory rate. The nature of the differences for the years ended December 31 was as follows:

	2013					2012					2011
Expected federal income tax provision	$	7,344		35.00	%	$	6,584		35.00	%	$	2,471		35.00	%
State income tax, net of federal income tax effect		908		4.33	%		775		4.12	%		298		4.22	%
Municipal securities tax benefit		(735	)	-3.50	%		(631	)	-3.35	%		(422	)	-5.98	%
Equity-based compensation		27		0.13	%		25		0.13	%		68		0.96	%
Benefit of purchased tax credits		(150	)	-0.71	%		(181	)	-0.96	%		(289	)	-4.09	%
Low-income housing tax credits		(142	)	-0.68	%		(142	)	-0.75	%		(142	)	-2.01	%
Bank Owned Life Insurance		(201	)	-0.96	%		(228	)	-1.21	%		—		—
Acquisition Costs—Century Bank		106		0.51	%		—		—			—		—
Deferred tax rate adjustments and other		59		0.28	%		(43	)	-0.24	%		(266	)	-3.77	%
Income tax provision	$	7,216		34.40	%	$	6,159		32.74	%	$	1,718		24.33	%

The excess tax benefit associated with stock option plans reduced taxes payable by $0, $10, and $14, at December 31, 2013, 2012, and 2011, respectively. Such benefit is credited to common stock.

The components of deferred tax assets and liabilities at December 31 are as follows:

	2013		2012
Assets:
Allowance for loan losses	$	6,916	$	6,508
Basis adjustments on loans		2,252		1,720
Reserve for self-funded insurance		180		183
Oregon purchased tax credits		1,669		2,951
Nonqualified stock options		1,278		957
Accrued compensation		724		647
OTTI credit impairment		89		80
Nonaccrual loan interest		52		21
Net unrealized loss on securities		95		—
Other		61		47
Total deferred tax assets		13,316		13,114
Liabilities:
Federal Home Loan Bank stock dividends		593		595
Excess tax over book depreciation		1,299		1,446
Prepaid expenses		345		362
NWBF acquisition adjustments		225		—
Loan origination fees		1,046		881
Net unrealized gains on Swap		158		—
Net unrealized gains on securities		52		3,600
Total deferred tax liabilities		3,718		6,884
Net deferred tax assets	$	9,598	$	6,230

Purchased tax credits of $1,669 will be utilized to offset future state income taxes. These credits are recognized over a five-year period beginning in the year of purchase and have an eight year carry forward period. If unused the credits will expire in the following years: $218 in 2019, $664 in 2020, $521 in 2021, $261 in 2022, $3 in 2023 and $3 in 2024. It is anticipated that all credits and other deferred asset items will be fully utilized in the normal course of operations and, accordingly, management has not reduced deferred tax assets by a valuation allowance.

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NOTE 14 – RETIREMENT PLAN:

The Company has a 401(k) profit sharing plan covering substantially all employees. The plan provides for employee and employer contributions. The total plan expenses, including employer contributions, were $673, $617, and $240 in 2013, 2012, and 2011, respectively.

NOTE 15 – SHARE-BASED COMPENSATION:

The Company’s 2006 Stock Option and Equity Compensation Plan (the “2006 SOEC Plan”) authorizes the award of up to 1,550,000 shares in stock-based awards. The awards granted under this plan are service-based and are subject to vesting. The Compensation Committee of the Board of Directors may impose any terms or conditions on the vesting of an award that it determines to be appropriate. Awards granted generally vest over four years and have a maximum life of ten years. Awards may be granted at exercise prices of not less than 100.00% of the fair market value of the Company’s common stock at the grant date.

Pursuant to the 2006 SOEC Plan, incentive stock options (“ISOs”), nonqualified stock options, restricted stock, restricted stock units (“RSUs”), or stock appreciation rights (“SARs”) may be awarded to attract and retain the best available personnel to the Corporation and its subsidiaries. SARs may be settled in common stock or cash as determined at the date of issuance. Liability-based awards (including all cash-settled SARs) have no impact on the number of shares available to be issued within the plan. Additionally, non-qualified option awards and restricted stock awards may be granted to directors under the terms of this plan.

Prior to April 2006, incentive stock option (“ISO”) and non-qualified option awards were granted to employees and directors under the Company’s 1999 Employees’ Stock Option Plan and the Company’s 1999 Directors’ Stock Option Plan. The Company has stock options outstanding under both of these plans. Subsequent to the annual shareholders’ meeting in April 2006 all shares available under these plans were deregistered and are no longer available for future grants.

The following tables identify the compensation expenses recorded and tax benefits received by the Company in conjunction with its share-based compensation plans for the years ended December 31, 2013, 2012, and 2011:

	2013				2012				2011
	Compensation Expense		Tax Benefit		Compensation Expense		Tax Benefit (Expense)		Compensation Expense (Benefit)			Tax Benefit
Equity-based awards:
Director restricted stock	$	110	$	39	$	70	$	25	$	56		$	20
Director stock options		—		—		—		—		1			—
Employee stock options		70		—		122		—		173			—
Employee stock SARs		126		44		193		68		248			87
Employee RSUs		830		291		490		172		195			68
Liability-based awards:
Employee cash SARs		60		21		—		—		(70	)		(25	)
	$	1,196	$	395	$	875	$	265	$	603		$	150

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Prior to 2012, the Company granted stock options to selected employees and directors. The following table summarizes information about stock option activity under all plans for the years ended December 31, 2013, 2012, and 2011:

	2013				2012					2011
	Options Outstanding		Weighted Average Exercise Price		Options Outstanding			Weighted Average Exercise Price		Options Outstanding			Weighted Average Exercise Price
Balance, beginning of year		367,906	$	14.15		412,943		$	13.74		447,693		$	13.61
Granted		—		—		—			—		—			—
Exercised		—		—		(28,999	)		6.83		(14,000	)		6.38
Forfeited or expired		—		—		(16,038	)		16.86		(20,750	)		15.81
Balance, end of year		367,906	$	14.15		367,906		$	14.15		412,943		$	13.74
Options exercisable, end of year		353,197	$	14.27		312,020		$	14.60		295,168		$	14.36

A summary of non-vested stock option activity during the current fiscal year is presented below:

	Non-vested Options			Weighted Average Grant Date Fair Value
Balance, beginning of year		55,886		$	3.58
Granted		—			—
Vested		(41,177	)		3.33
Forfeited, expired, or exercised		—			—
Balance, end of year		14,709		$	4.30

The total intrinsic value (which is the amount by which the stock price exceeds the exercise price) of both options outstanding as of December 31, 2013, was $807. The weighted average remaining contractual term of options exercisable was 4.41 years as of December 31, 2013. The total intrinsic value of options exercised was $0, $29, and $35, in the years ended December 31, 2013, 2012, and 2011, respectively. During the years ended December 31, 2013, 2012, and 2011, the amount of cash received from the exercise of stock options was $0, $69, and $89, respectively. As of December 31, 2013, there was $13 of total unrecognized compensation cost related to non-vested stock options which is expected to be recognized over a weighted average period of 0.3 years.

Prior to 2011, the Company granted SARs settled in stock to selected employees. The following table summarizes information about activity on SARs settled in stock for the years ended December 31, 2013, 2012, and 2011:

	2013					2012					2011
	Stock-settled SARs Outstanding			Weighted Average Exercise Price		Stock-settled SARs Outstanding			Weighted Average Exercise Price		Stock-settled SARs Outstanding			Weighted Average Exercise Price
Balance, beginning of year		387,072		$	13.74		405,340		$	13.71		460,915		$	13.75
Granted		—			—		—			—		—			—
Exercised		(30,422	)		12.08		—			—		—			—
Forfeited or expired		(18,891	)		14.73		(18,268	)		13.07		(55,575	)		14.06
Balance, end of year		337,759		$	—		387,072		$	13.74		405,340		$	13.71
Stock-settled SARs exercisable, end of year		313,010		$	14.05		309,980		$	14.28		247,930		$	14.80

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A summary of non-vested stock-settled SARs activity during the current fiscal year is presented below:

	Non-vested Stock-settled SARs			Weighted Average Grant Date Fair Value
Balance, beginning of year		77,091		$	3.64
Granted		—			—
Vested		(50,992	)		3.43
Forfeited, expired, or exercised		(1,350	)		4.05
Balance, end of year		24,749		$	4.06

The total intrinsic value (which is the amount by which the stock price exceeds the exercise price) of stock-settled SARs as of December 31, 2013, was $839. The weighted average remaining contractual term of exercisable stock-settled SARs was 4.65 years as of December 31, 2013. As of December 31, 2013, there was $26 of total unrecognized compensation cost related to non-vested stock-settled SARs which is expected to be recognized over a weighted average period of 0.30 years.

During the period ended December 31, 2013, 30,422 Employee Stock SARs, with a weighted average exercise price of $12.08, were exercised. The exercise resulted in a net issuance to employees of 3,742 shares of stock, with an intrinsic value of $57.

Prior to 2010, the Company granted SARs settled in cash to selected employees. The following table summarizes information about activity on SARs settled in cash for the years ended December 31, 2013, 2012, and 2011:

	2013					2012					2011
	Cash-settled SARs Outstanding			Weighted Average Exercise Price		Cash-settled SARs Outstanding			Weighted Average Exercise Price		Cash-settled SARs Outstanding			Weighted Average Exercise Price
Balance, beginning of year		206,763		$	14.84		230,607		$	14.81		250,229		$	14.78
Granted		—			—		—			—		—			—
Exercised		(8,353	)		12.55		—			—		—			—
Forfeited or expired		(11,418	)		14.73		(23,844	)		14.50		(19,622	)		14.45
Balance, end of year		186,992		$	14.95		206,763		$	14.84		230,607		$	14.81
Cash-settled SARs exercisable, end of year		186,992		$	14.95		190,236		$	15.09		176,446		$	15.43

A summary of non-vested stock-settled SARs activity during the current fiscal year is presented below:

	Non-vested Cash-settled SARs			Weighted Average Grant Date Fair Value
Balance, beginning of year		16,527		$	2.76
Granted		—			—
Vested		(16,527	)		2.76
Forfeited, expired, or exercised		—			—
Balance, end of year		—		$	—

As of December 31, 2013 there was an intrinsic value of $296 on the Company’s outstanding cash-settled SARs.

During the period ended December 31, 2013, 8,353 Employee Cash SARs, with a weighted average exercise price of $12.55, were exercised. The exercise resulted in a cash payment, net of income taxes, to employees of $12. The weighted average remaining contractual term of exercisable cash-settled SARs was 3.98 years as of December 31, 2013.

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In 2011, the Company began granting RSUs to selected employees. The RSUs vest equally over 4 years. The Company’s RSUs do not accrue dividends and the grantees do not have voting rights. No RSUs were granted prior to 2011.

The following table provides information regarding RSU activity during 2013, 2012 and 2011:

	2013					2012					2011
	Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value		Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value		Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value
Balance, beginning of year		251,329		$	8.99		125,888		$	9.40		—		$	—
Granted		145,420			8.76		164,519			8.76		127,192			9.40
Vested shares issued		(42,678	)		9.03		(18,821	)		9.40		—			—
Vested shares forfeited for taxes		(26,580	)		9.03		(11,517	)		9.40		—			—
Forfeited or expired		(27,795	)		9.66		(8,740	)		9.20		(1,304	)		9.40
Balance, end of year		299,696		$	9.79		251,329		$	8.99		125,888		$	9.40

Under the terms of the 2006 SOEC Plan, shares of Pacific Continental Corporation common stock are to be issued as soon as is practicable upon vesting of RSUs.

NOTE 16 – TRANSACTIONS WITH RELATED PARTIES:

The Company has granted loans to officers and directors and to companies with which they are associated. Such loans are made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated parties. Activity with respect to these loans during the year ended December 31 was as follows:

	2013			2012			2011
Balance, beginning of year	$	133		$	994		$	993
Additions or renewals		68			49			204
Amounts collected		(101	)		(16	)		(203	)
No longer related party		—			(894	)		—
Balance, end of year	$	100		$	133		$	994

In addition, there were $12 in commitments to extend credit to directors and officers at December 31, 2013, which are included among loan commitments, disclosed in Note 17.

NOTE 17 – COMMITMENTS AND CONTINGENCIES:

In the normal course of business under the provisions of the Company’s investment policy, additional investment securities may be purchased from time to time. Commitments to purchase securities are generally settled within a month and are not associated with repurchase agreements.

In order to meet the financing needs of its clients, the Company commits to extensions of credit and issues letters of credit. The Company uses the same credit policies in making commitments and conditional obligations as it does for other products. In the event of nonperformance by the client, the Company’s exposure to credit loss is represented by the contractual amount of the instruments. The Company’s collateral policies related to financial instruments with off-balance sheet risk conform to its general underwriting guidelines.

Commitments to extend credit are agreements to lend to a client as long as there is no violation of any condition established in the contract. Commitments generally have expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

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Letters of credit written are conditional commitments issued by the Company to guarantee the performance of a client to a third-party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to clients.

Off-balance sheet instruments at December 31 consist of the following:

	2013		2012
Commitments to purchase securities	$	1,490	$	216
Commitments to extend credit (principally variable rate)	$	167,374	$	168,073
Letters of credit and financial guarantees written	$	1,304	$	832

The Company has entered into Executive Employment Agreements with two key executive officers. The employment agreements provide for minimum aggregate annual base salaries of $704, plus performance adjustments, life insurance coverage, and other perquisites commonly found in such agreements. The two employment agreements expire in 2014 unless extended or terminated earlier.

Legal contingencies arise from time-to-time in the normal course of business. Based upon analysis of management and in consultation with the Company’s legal counsel there are no current legal matters which are expected to have a material effect on the Company’s consolidated financial position.

NOTE 18 – FAIR VALUE:

The following disclosures about fair value of financial instruments are made in accordance with provisions of ASC 825 “Financial Instruments.” The use of different assumptions and estimation methods could have a significant effect on fair value amounts. Accordingly, the estimates of fair value herein are not necessarily indicative of the amounts that might be realized in a current market exchange.

The estimated fair values of the financial instruments at December 31 are as follows:

	2013				2012
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
Financial assets:
Cash and cash equivalents	$	21,108	$	21,108	$	28,701	$	28,701
Securities available-for-sale		347,386		347,386		389,885		389,885
Accrued interest receivable		4,703		4,703		4,520		4,520
Loans, net of deferred fees		993,845		980,334		870,416		871,802
Federal Home Loan Bank stock		10,425		10,425		10,462		10,462
Bank-owned life insurance		16,136		16,136		15,621		15,621
Swap Derivative		405		405		—		—
Financial liabilities:
Deposits	$	1,090,981	$	1,091,355	$	1,046,154	$	1,046,165
Federal funds and overnight funds purchased		5,150		5,150		11,570		11,570
Federal Home Loan Bank borrowings		160,000		160,984		118,000		119,517
Junior subordinated debentures		8,248		2,265		8,248		2,193
Accrued interest payable		193		193		218		218

Cash and Cash Equivalents – The carrying amount approximates fair value.

Securities available-for-sale – Fair value is based on quoted market prices. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities.

Accrued Interest receivable – The carrying amounts of accrued interest receivable approximate their fair value.

Loans – For variable rate loans that reprice frequently and have no significant change in credit risk, fair value is based on carrying values. Fair value of fixed rate loans is estimated by discounting the future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Fair values for impaired loans are estimated using discounted cash flow analyses or underlying collateral values, where applicable, and consider credit risk.

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Federal Home Loan Bank stock – The carrying amount approximates fair value.

Bank-owned life insurance – The carrying amount approximates fair value.

Swap Derivative – Fair value is based on quoted market prices.

Deposits – Fair value of demand, interest bearing demand and savings deposits is the amount payable on demand at the reporting date. Fair value of time deposits is estimated using the interest rates currently offered for deposits of similar remaining maturities.

Federal Funds and Overnight Funds Purchased – The carrying amount is a reasonable estimate of fair value because of the short-term nature of these borrowings.

Federal Home Loan Bank Borrowings – Fair value of Federal Home Loan Bank borrowings is estimated by discounting future cash flows at rates currently available for debt with similar terms and remaining maturities.

Junior Subordinated Debentures – Fair value of Junior Subordinated Debentures is estimated by discounting future cash flows at rates currently available for debt with similar credit risk, terms and remaining maturities.

Accrued Interest payable – The carrying amounts of accrued interest payable approximate their fair value

Off-Balance Sheet Financial Instruments – The carrying amount and fair value are based on fees charged for similar commitments and are not material.

The Company also adheres to the FASB guidance with regards to ASC 820, “Fair Value Measures.” This guidance defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The statement requires fair value measurement disclosure of all assets and liabilities that are carried at fair value on either a recurring or nonrecurring basis. The Company determines fair value based upon quoted prices when available or through the use of alternative approaches, such as matrix or model pricing, when market quotes are not readily accessible or available. The valuation techniques used are based on observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy:

Level 1 – Quoted prices for identical instruments in active markets.

Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active or model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 – Unobservable inputs are used to measure fair value to the extent that observable inputs are not available. The Company’s own data used to develop unobservable inputs is adjusted for market consideration when reasonably available.

Financial instruments, measured at fair value, are broken down in the tables below by recurring or nonrecurring measurement status. Recurring assets are initially measured at fair value and are required to be remeasured at fair value in the financial statements at each reporting date. Assets measured on a nonrecurring basis are assets that, due to an event or circumstance, were required to be remeasured at fair value after initial recognition in the financial statements at some time during the reporting period.

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The following table presents information about the level in the fair value hierarchy for the Company’s assets and liabilities not measured at fair value as of December 31, 2013 and 2012:

	Carrying Amount		Fair Value at December 31, 2013
			Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	21,108	$	21,108	$	—	$	—
Loans		994,769		—		980,334		—
Accrued interest receivable		4,703		4,703		—		—
Federal Home Loan Bank stock		10,425		10,425		—		—
Bank-owned life insurance		16,136		16,136		—		—
Swap Derivative		405		405		—		—
Financial liabilities:
Deposits	$	1,090,981	$	—	$	1,091,355	$	—
Federal funds and overnight funds purchased		5,150		5,150		—		—
Federal Home Loan Bank borrowings		160,000		—		160,984		—
Junior subordinated debentures		8,248		—		2,265		—
Accrued interest payable		193		193		—		—
	Carrying Amount		Fair Value at December 31, 2012
			Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	28,701	$	28,701	$	—	$	—
Loans		870,416		—		871,802		—
Accrued interest receivable		4,520		4,520		—		—
Federal Home Loan Bank stock		10,462		10,462		—		—
Bank-owned life insurance		15,621		15,621		—		—
Financial liabilities:
Deposits	$	1,046,154	$	—	$	1,046,165	$	—
Federal funds and overnight funds purchased		11,570		11,570		—		—
Federal Home Loan Bank borrowings		118,000		—		119,517		—
Junior subordinated debentures		8,248		—		2,193		—
Accrued interest payable		218		218		—		—

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The tables below show assets measured at fair value on a recurring basis as of December 31, 2013, and December 31, 2012:

	Carrying Value		Fair Value Measurements Using
December 31, 2013			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available-for-sale securities
Obligations of U.S government agencies	$	30,847	$	—	$	30,847	$	—
Obligation of states and political subdivisions		78,795		—		78,795		—
Agency mortgage-backed securities		223,720		—		223,720		—
Private-label mortgage-backed securities		5,314		—		3,528		1,786
SBA variable vate pools		8,710		—		8,710		—
Swap Derivative		405		405		—		—
Total assets measured on a recurring basis	$	347,791	$	405	$	345,600	$	1,786
	Carrying Value		Fair Value Measurements Using
December 31, 2012			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available-for-sale securities
Obligations of U.S government agencies	$	17,844	$	—	$	17,844	$	—
Obligation of states and political subdivisions		81,501		—		81,501		—
Agency mortgage-backed securities		281,940		—		281,940		—
Private-label mortgage-backed securities		8,600		—		6,918		1,682
Total assets measured on a recurring basis	$	389,885	$	—	$	388,203	$	1,682

During 2013 there was a transfer of one security from a level 2 measurement to a level 3 as OTTI was recorded for the first time.

The following is a description of the inputs and valuation methodologies used for assets recorded at fair value on a recurring basis. Fair value for all classes of available-for-sale securities is estimated by obtaining quoted market prices for identical assets, where available. If such prices are not available, fair value is based on independent asset pricing services and models, the inputs of which are market-based or independently sourced market parameters, including, but not limited to, yield curves, interest rates, prepayments, defaults, cumulative loss projections, and cash flows. There have been no significant changes in the valuation techniques during the periods reported.

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The following table provides a reconciliation of assets measured at fair value on a recurring basis using unobservable inputs (Level 3) from December 31, 2012, to December 31, 2013:

	Private-label Mortgage- backed Securities			Private-label Mortgage- backed Securities
Beginning balance	$	1,682		$	1,719
Transfers into Level 3		332			—
Transfers out of Level 3		—			—
Total gains or losses
Included in earnings		—			—
Included in other comprehensive income		80			320
Paydowns		(308	)		(357	)
Purchases, issuances, sales, and settlements
Purchases		—			—
Issuances		—			—
Sales		—			—
Settlements		—			—
Ending Balance	$	1,786		$	1,682

Fair value for all classes of available-for-sale securities is estimated by obtaining quoted market prices for identical assets, where available. If such prices are not available, fair value is based on quoted prices for similar instruments or model-derived valuations whose inputs are observable or whose significant value drivers are observable. In instances where quoted prices for identical or similar instruments and observable inputs are not available, unobservable inputs, including the Company’s own data, are used.

The Company utilizes FTN Financial as an independent third-party asset pricing service to estimate fair value on all of its available-for-sale securities. The inputs used to value all securities include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research, market indicators, and industry and economic trends. Additional inputs specific to each asset type are as follows:

• Obligations of U.S. government agencies – TRACE reported trades.

• Obligations of states and political subdivisions – MSRB reported trades, material event notices, and Municipal Market Data (MMD) benchmark yields.

• Private-label mortgage-backed securities – new issue data, monthly payment information, and collateral performance (whole loan collateral).

• Mortgage-backed securities – TBA prices and monthly payment information.

Inputs may be prioritized differently on any given day for any security and not all inputs listed are available for use in the evaluation process on any given day for each security evaluation.

The valuation methodology used by asset type includes:

• Obligations of U.S. government agencies – security characteristics, defined sector break-down, benchmark yields, applied base spread, yield to maturity (bullet structures), corporate action adjustment, and evaluations based on T+3 settlement.

• Obligations of states and political subdivisions – security characteristics, benchmark yields, applied base spread, yield to worst or market convention, ratings updates, prepayment schedules (housing bonds), material event notice adjustments, and evaluations based on T+3 settlement.

• Private-label mortgage-backed securities – security characteristics, prepayment speeds, cash flows, TBA, Treasury and swap curves, IO/PO strips or floating indexes, applied base spread, spread adjustments, yield to worst or market convention, ratings updates (whole-loan collateral), and evaluations based on T+0 settlement.

• Mortgage-backed securities – security characteristics, TBA, Treasury, or floating index benchmarks, spread to TBA levels, prepayment speeds, applied spreads, and evaluations based on T+0 settlement.

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The third-party pricing service follows multiple review processes to assess the available market, credit and deal-level information to support its valuation estimates. If sufficient objectively verifiable information is not available to support a security’s valuation, an alternate independent evaluation source will be used.

The Company’s securities portfolio was valued through its independent third-party pricing service using evaluated pricing models and quoted prices based on market data. For further assurance, the Company’s estimate of fair value was compared to an additional independent third-party estimate at July 31, 2013, and the Company obtained key inputs for a sample of securities across sectors and evaluated those inputs for reasonableness. This analysis was performed at the individual security level and no material variances were noted.

There have been no significant changes in the valuation techniques during the periods reported.

The tables below show assets measured at fair value on a nonrecurring basis as of December 31, 2013, and December 31, 2012:

			Fair Value Measurements Using
December 31, 2013	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Twelve Months Ended December 31, 2013 Total Loss
Loans measured for impairment (net of guarantees and specific reserve)	$	5,749	$	—	$	—	$	5,749	$	—
Other real estate owned		16,355		—		—		16,355		—
	$	22,104	$	—	$	—	$	22,104	$	—
			Fair Value Measurements Using
December 31, 2012	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Twelve Months Ended December 31, 2012 Total Loss
Loans measured for impairment (net of guarantees and specific reserve)	$	5,877	$	—	$	—	$	5,877	$	2
Other real estate owned		17,972		—		—		17,972		1,416
	$	23,849	$	—	$	—	$	23,849	$	1,418

No transfers to or from Level 3 occurred during 2013 or 2012 on assets measured at fair value on a nonrecurring basis.

The following is a description of the inputs and valuation methodologies used for assets recorded at fair value on a nonrecurring basis.

Loans measured for impairment (net of government guarantees and specific reserves) include the estimated fair value of collateral-dependent loans, less collectible government guarantees, as well as certain noncollateral-dependent loans measured for impairment with an allocated specific reserve. When a collateral-dependent loan is identified as impaired, the value of the loan is measured using the current fair value of the collateral less selling costs. The fair value of collateral is generally estimated by obtaining external appraisals which are usually updated every 6 to 12 months based on the nature of the impaired loans. Certain noncollateral-dependent loans measured for impairment with an allocated specific reserve are valued based upon the estimated net realizable value of the loan. If the estimated fair value of the impaired loan, less collectible government guarantees, is less than the recorded investment in the loan, impairment is recognized as a charge-off through the allowance for loan losses. The carrying value of the loan is adjusted to the estimated fair value. The carrying value of loans fully charged off is zero.

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Other real estate owned represents real estate which the Company has taken control of in partial or full satisfaction of loans. At the time of foreclosure, other real estate owned is recorded at the lower of the carrying amount of the loan or fair value less costs to sell, which becomes the property’s new basis. Any write downs based on the asset’s fair value at the date of acquisition are charged to the allowance for loan losses. After foreclosure, management periodically orders appraisals or performs valuations to ensure that the real estate is carried at the lower of its new cost basis or fair value, net of estimated costs to sell. Appraisals are generally updated every 6 to 12 months on other real estate owned. Fair value adjustments on other real estate owned are recognized within net loss on real estate owned. The loss represents impairments on other real estate owned for fair value adjustments based on the fair value of the real estate.

There have been no significant changes in the valuation techniques during the periods reported.

NOTE 19 – REGULATORY MATTERS:

The Company and the Bank are subject to the regulations of certain federal and state agencies and receive periodic examinations by those regulatory authorities. In addition, they are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory – and possibly additional discretionary – actions by regulators that, if undertaken, could have a direct material effect on the consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company and the Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios of Total and Tier 1 capital to risk-weighted assets and of Tier 1 capital to leverage assets. Management believes that, as of December 31, 2013, the Company and the Bank meet all capital adequacy requirements to which they are subject.

As of December 31, 2013, according to FDIC guidelines, the Bank is considered to be well-capitalized. To be categorized as well-capitalized, the Bank must maintain minimum Total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the following table.

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The Company’s and the Bank’s actual capital amounts and ratios are presented in the table below:

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2013:
Total capital (to risk weighted assets)
Bank:	$	174,311		15.89	%	$	87,744		8	%	$	109,680		10	%
Company:	$	177,209		16.15	%		NA					NA		10	%
Tier 1 capital (to risk weighted assets)
Bank:	$	160,572		14.64	%	$	43,872		4	%	$	65,808		6	%
Company:	$	163,470		14.90	%		NA					NA
Tier 1 capital (to leverage assets)
Bank:	$	160,572		11.29	%	$	56,887		4	%	$	71,109		5	%
Company:	$	163,470		11.49	%		NA					NA
As of December 31, 2012:
Total capital (to risk weighted assets)
Bank:	$	173,225		17.90	%	$	77,426		8	%	$	96,783		10	%
Company:	$	175,671		18.15	%		NA					NA
Tier 1 capital (to risk weighted assets)
Bank:	$	161,073		16.64	%	$	38,713		4	%	$	58,070		6	%
Company:	$	163,519		16.90	%		NA					NA
Tier 1 capital (to leverage assets)
Bank:	$	161,073		12.15	%	$	53,019		4	%	$	66,273		5	%
Company:	$	163,519		12.33	%		NA					NA

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On July 2, 2013, the federal banking regulators approved the final proposed rules that revise the regulatory capital rules to incorporate certain revisions by the Basel Committee on Banking Supervision to the Basel capital framework (“Basel III”). The phase-in period for the final rules will begin for the Company on January 1, 2015, with full compliance with the final rules entire requirement phased in on January 1, 2019.

The final rules, among other things, include a new common equity Tier 1 capital (“CET1”) to risk-weighted assets ratio, including a capital conservation buffer, which will gradually increase from 4.50% on January 1, 2015 to 7.00% on January 1, 2019. The final rules also raise the minimum ratio of Tier 1 capital to risk-weighted assets from 4.00% to 6.00% on January 1, 2015 to 8.50% on January 1, 2019, as well as require a minimum leverage ratio of 4.00%.

Also, under the final rules, trust preferred security debt issuances will be phased out of Tier 1 capital into Tier 2 capital over a 10 year period, except for bank holding companies with less than $15 billion assets as of December 31, 2009 will be allowed to continue to include these issuances in Tier 1 capital, subject to certain restrictions. As the Company had less than $15 billion in assets at December 31, 2009, the Company will be able to continue to include its existing trust preferred securities, less the common stock of the Trusts, in the Company’s Tier 1 capital.

NOTE 20 – PARENT COMPANY FINANCIAL INFORMATION:

Financial information for Pacific Continental Corporation (Parent Company only) is presented below:

BALANCE SHEETS

	December 31,
	2013			2012		2011
Assets:
Cash deposited with the Bank	$	2,941		$	2,465	$	7,273
Deferred tax asset		(158	)		—		—
Prepaid expenses		14			16		11
Equity in Trust		248			248		248
Swap unrealized gain		405			—		—
Investment in the Bank		184,039			188,935		179,618
	$	187,489		$	191,664	$	187,150
Liabilities and shareholders’ equity:
Liabilities	$	57		$	35	$	36
Junior subordinated debentures		8,248			8,248		8,248
Shareholders’ equity		179,184			183,381		178,866
	$	187,489		$	191,664	$	187,150

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STATEMENTS OF OPERATIONS

For the Years Ended December 31

	2013		2012		2011
Income:
Cash dividends from the Bank	$	13,995	$	6,755	$	15
		13,995		6,755		15
Expenses:
Interest expense		200		151		136
Investor relations		123		124		112
Legal, registration expense, and other		177		128		55
Personnel costs paid to Bank		152		151		140
		652		554		443
Income (loss) before income tax expense and equity in undistributed earnings (loss) from the Bank		13,343		6,201		(428	)
Income tax benefit		159		193		162
Equity in undistributed earnings of the Bank		265		6,259		5,607
Net income	$	13,767	$	12,653	$	5,341

STATEMENTS OF CASH FLOWS

For the Years Ended December 31

	2013			2012			2011
Cash flows from operating activities:
Net income	$	13,767		$	12,653		$	5,341
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings from the Bank		(265	)		(6,259	)		(5,607	)
Excess tax benefit of stock options exercised		—			(10	)		(14	)
Other, net		342			98			(141	)
Net cash used in operating activities		13,844			6,482			(421	)
Cash flows from financing activities:
Proceeds from stock options exercised		—			69			89
Income tax benefit for stock options exercised		—			10			14
Repurchase of common stock		—			(5,676	)		—
Dividends paid		(13,050	)		(5,588	)		(1,842	)
Vested RSUs surrendered to cover tax consequences		(318	)		(105	)		—
Net cash provided by (used in) financing activities		(13,368	)		(11,290	)		(1,739	)
Net increase (decrease) in cash		476			(4,808	)		(2,160	)
Cash, beginning of period		2,465			7,273			9,433
Cash, end of period	$	2,941		$	2,465		$	7,273

103

ITEM 9 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None

ITEM 9A Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation was carried out under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”). Based on that evaluation, the CEO and CFO have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and timely reported as provided in the SEC rules and forms. There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the three months ended December 31, 2013, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. This internal control system has been designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of the Company’s published financial statements.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

The management of the Company has assessed the effectiveness of its internal control over financial reporting at December 31, 2013. To make this assessment, the Company used the criteria for effective internal control over financial reporting described in Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, at December 31, 2013, management has determined that internal controls over financial reporting were effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statement in accordance with US. Generally accepted accounting principles.

ITEM 9B Other Information

None

PART III

ITEM 10 Directors, Executive Officers and Corporate Governance

This Item is incorporated by reference to our definitive proxy statement on Schedule 14A, which will be filed within 120 days after the close of the fiscal year covered by this report on Form 10-K, or if our proxy statement is not filed by that date, will be included in an amendment to this Report on Form 10-K.

ITEM 11 Executive Compensation

This Item is incorporated by reference to our definitive proxy statement on Schedule 14A, which will be filed within 120 days after the close of the fiscal year covered by this report on Form 10-K, or if our proxy statement is not filed by that date, will be included in an amendment to this Report on Form 10-K.

104

ITEM 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

This Item is incorporated by reference to our definitive proxy statement on Schedule 14A, which will be filed within 120 days after the close of the fiscal year covered by this report on Form 10-K, or if our proxy statement is not filed by that date, will be included in an amendment to this Report on Form 10-K.

105

ITEM 13 Certain Relationships and Related Transactions and Director Independence

This Item is incorporated by reference to our definitive proxy statement on Schedule 14A, which will be filed within 120 days after the close of the fiscal year covered by this report on Form 10-K, or if our proxy statement is not filed by that date, will be included in an amendment to this Report on Form 10-K.

ITEM 14 Principal Accountant Fees and Services

This Item is incorporated by reference to our definitive proxy statement on Schedule 14A, which will be filed within 120 days after the close of the fiscal year covered by this report on Form 10-K, or if our proxy statement is not filed by that date, will be included in an amendment to this Report on Form 10-K.

PART IV

ITEM 15 Exhibits and Financial Statement Schedules

(a)(1)(2) See Index to Consolidated Financial Statements filed under Item 8 of this Form 10-K.

All other schedules to the financial statements required by Regulation S-X are omitted because they are not applicable, not material, or because the information is included in the financial statements or related notes.

(a)(3) Exhibit Index

Exhibit
3.1	Second Amended and Restated Articles of Incorporation (1)
3.2	Amended and Restated Bylaws(2)
4.1	Form of Indenture relating to the issuance of debentures, notes, bonds or other evidences of indebtedness (3)
10.1*	1999 Employee Stock Option Plan (4)
10.2*	1999 Director’s Stock Option Plan (4)
10.3*	Amended 2006 Stock Option and Equity Compensation Plan (5)
10.4*	Form of Restricted Stock Award Agreement (6)
10.5*	Form of Stock Option Award Agreement (6)
10.6*	Form of Restricted Stock Unit Agreement (6)
10.7*	Form of Stock Appreciation Rights Agreement (6)
10.8*	Form of Executive Restricted Stock Unit Award Agreement (6)
10.9*	Form of Change in Control Agreement with executive officers (7)
10.10*	Amended and Restated Employment Agreement for Roger Busse dated January 31, 2013 (7)
10.11*	Amended and Restated Employment Agreement for Hal M. Brown dated January 31, 2013 (7)
10.12*	NWB Financial Corporation Employee Stock Option Plan (8)
10.13*	NWB Financial Corporation Director Stock Option Plan (8)
10.14*	Director Fee Schedule, Effective January 1, 2013 (9)
10.15*	Director Stock Trading Plan (10)
14.1	Code of Ethics for Senior Financial Officers and Principal Executive Officer (10)
23.1+	Consent of Moss Adams LLP
24.1+	Power of Attorney (included on signature page to this Form 10-K)
31.1+	302 Certification, Hal M. Brown, Chief Executive Officer
31.2+	302 Certification, Michael A. Reynolds, Executive Vice President and Chief Financial Officer
32+	Certifications Pursuant to 18 U.S.C. Section 1350
101+	The following financial information from Pacific Continental Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013, is formatted in XBRL; (i) the Audited Consolidated Balance Sheets, (ii) the Audited Consolidated Statements of Operations, (iii) the Audited Consolidated Statements of Comprehensive Income , (iv) the Audited Consolidated Statements of Changes in Shareholders’ Equity, (v) the Audited Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements, tagged as blocks of text. As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Section 18 of the Securities Exchange Act of 1934 and is not otherwise subject to liability under those sections.

106

(1) Incorporated by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q for the Quarter ended March 31, 2010.

(2) Incorporated by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q for the Quarter ended September 30, 2008.

(3) Incorporated by reference to Exhibit 4.1 of the Company’s Form S-3 Registration Statement, filed March 29, 2013.

(4) Incorporated by reference to Exhibits 99.1 and 99.2 of the Company’s S-8 Registration Statement (File No. 333-109501) filed October 6, 2003.

(5) Incorporated by reference to Exhibit 10.3 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

(6) Incorporated by reference to Exhibits 99.1 to 99.5 of the Company’s Form S-8 Registration Statement (File No. 333-181826) filed on June 1, 2012.

(7) Incorporated by reference to Exhibits 10.1, 10.2 and 10.3 of the Company’s Current Report on Form 8-K filed February 2, 2013

(8) Incorporated by reference to Exhibits 99.1 and 99.2 of the Company’s Form S-8 Registration Statement (File No. 333-130886) filed January 1, 2006.

(9) Incorporated by reference to Exhibit 10.15 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

(10) Incorporated by reference to Exhibits 10.14 and 14 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007.

* Executive Contract, Compensatory Plan or Arrangement

+ Filed Herewith

107

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PACIFIC CONTINENTAL CORPORATION (Registrant)
By:	/s/ Hal M. Brown
	Hal M. Brown
	Chief Executive Officer
Date: March 14, 2014

Power of Attorney

Know all persons by these presents, that each person whose signature appears below constitutes and appoints Hal M. Brown and Michael A. Reynolds, and each of them, as such person’s true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for such person and in such person’s name, place and stead, in any and all capacities, to sign any and all amendments to the Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in connection therewith, as fully to all intents and purposes as such person might or could do in person, hereby, ratifying and confirming that all said attorneys-in-fact and agents, or any of them or their or such person’s substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on the 14th day of March 2014.

Principal Executive Officer

By	/s/ Hal M. Brown	Chief Executive Officer
	Hal M. Brown	and Director

Principal Financial and Accounting Officer

By	/s/ Michael A. Reynolds	Executive Vice President and
	Michael A. Reynolds	Chief Financial Officer

Remaining Directors

By	/s/ Robert A. Ballin	Chairman	By	/s/ Michael Heijer	Director
	Robert A. Ballin			Michael Heijer

By	/s/ Donald G. Montgomery	Vice Chairman	By	/s/ Michael D. Holzgang	Director
	Donald G. Montgomery			Michael D. Holzgang

By	/s/ John H. Rickman	Director	By	/s/ Donald L. Krahmer, Jr.	Director
	John H. Rickman			Donald L. Krahmer, Jr.

By	/s/ Jeffrey Pineo	Director	By	/s/ Judith Johansen	Director
	Jeffrey Pineo			Judith Johansen

108

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements of Pacific Continental Corporation of our report dated March 14, 2014, with respect to the consolidated balance sheets of Pacific Continental Corporation and Subsidiary (the “Company”) as of December 31, 2013 and 2012, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2013, and the effectiveness of the Company’s internal control over financial reporting as of December 31, 2013, included in this Annual Report (Form 10-K) for the year ended December 31, 2013.

• Registration Statement on Form S-3 (No. 333-187635) pertaining to the Company’s shelf registration statement; and

• Registration Statement on Form S-8 (No. 333-181826) pertaining to the Amended and Restated 2006 Stock Option and Equity Compensation Plan of Pacific Continental Corporation; and

• Registration Statement on Form S-3 (No. 333-165688) pertaining to the Company’s shelf registration statement; and

• Registration Statement on Form S-8 (No. 333-161703) pertaining to the Amended 2006 Stock Option and Equity Compensation Plan of Pacific Continental Corporation; and

• Registration Statement on Form S-8 (No. 333-134702) pertaining to the 2006 Stock Option and Equity Compensation Plan of Pacific Continental Corporation; and

• Registration Statement on Form S-8 (No. 333-130886) pertaining to the NWB Financial Corporation Stock Option Plans.

• Registration Statement on Form S-8 (No. 333-109501) pertaining to the Amended 1999 Employee Stock Option Plan and 1999 Director Stock Option Plan

/s/ Moss Adams LLP

Portland, Oregon

March 14, 2014

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Hal M. Brown, certify that:

1. I have reviewed this Form 10-K of Pacific Continental Corporation (the “Registrant”).

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report.

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: March 14, 2014	/s/ Hal M. Brown
	Hal M. Brown, Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Michael A. Reynolds, certify that:

1. I have reviewed this Form 10-K of Pacific Continental Corporation (the “Registrant”).

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report.

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: March 14, 2014	/s/ Michael A. Reynolds
	Michael A. Reynolds, Executive Vice President & Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Pacific Continental Corporation (the “Company”) on Form 10-K for the year ended December 31, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Hal M. Brown, Chief Executive Officer, and Michael A. Reynolds, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to our knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Hal M. Brown	/s/ Michael A. Reynolds
Hal M. Brown	Michael A. Reynolds
Chief Executive Officer	Chief Financial Officer

Dated: March 14, 2014

XML

Share Based Compensation (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of Compensation Expenses and Tax Benefits

The following tables identify the compensation expenses recorded and tax benefits received by the Company in conjunction with its share-based compensation plans for the years ended December 31, 2013, 2012, and 2011:

	2013				2012				2011
	Compensation Expense		Tax Benefit		Compensation Expense		Tax Benefit (Expense)		Compensation Expense (Benefit)			Tax Benefit
Equity-based awards:
Director restricted stock	$	110	$	39	$	70	$	25	$	56		$	20
Director stock options		—		—		—		—		1			—
Employee stock options		70		—		122		—		173			—
Employee stock SARs		126		44		193		68		248			87
Employee RSUs		830		291		490		172		195			68
Liability-based awards:
Employee cash SARs		60		21		—		—		(70	)		(25	)
	$	1,196	$	395	$	875	$	265	$	603		$	150

Summary of Stock Option Activity

The following table summarizes information about stock option activity under all plans for the years ended December 31, 2013, 2012, and 2011:

	2013				2012					2011
	Options Outstanding		Weighted Average Exercise Price		Options Outstanding			Weighted Average Exercise Price		Options Outstanding			Weighted Average Exercise Price
Balance, beginning of year		367,906	$	14.15		412,943		$	13.74		447,693		$	13.61
Granted		—		—		—			—		—			—
Exercised		—		—		(28,999	)		6.83		(14,000	)		6.38
Forfeited or expired		—		—		(16,038	)		16.86		(20,750	)		15.81
Balance, end of year		367,906	$	14.15		367,906		$	14.15		412,943		$	13.74
Options exercisable, end of year		353,197	$	14.27		312,020		$	14.60		295,168		$	14.36

Summary of Non-Vested Stock Option Activity

A summary of non-vested stock option activity during the current fiscal year is presented below:

	Non-vested Options			Weighted Average Grant Date Fair Value
Balance, beginning of year		55,886		$	3.58
Granted		—			—
Vested		(41,177	)		3.33
Forfeited, expired, or exercised		—			—
Balance, end of year		14,709		$	4.30

Summary of RSU Activity

The following table provides information regarding RSU activity during 2013, 2012 and 2011:

	2013					2012					2011
	Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value		Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value		Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value
Balance, beginning of year		251,329		$	8.99		125,888		$	9.40		—		$	—
Granted		145,420			8.76		164,519			8.76		127,192			9.40
Vested shares issued		(42,678	)		9.03		(18,821	)		9.40		—			—
Vested shares forfeited for taxes		(26,580	)		9.03		(11,517	)		9.40		—			—
Forfeited or expired		(27,795	)		9.66		(8,740	)		9.20		(1,304	)		9.40
Balance, end of year		299,696		$	9.79		251,329		$	8.99		125,888		$	9.40

Stock-settled SARs activity [Member]

Summary of Non-Vested Stock Option Activity

A summary of non-vested stock-settled SARs activity during the current fiscal year is presented below:

	Non-vested Stock-settled SARs			Weighted Average Grant Date Fair Value
Balance, beginning of year		77,091		$	3.64
Granted		—			—
Vested		(50,992	)		3.43
Forfeited, expired, or exercised		(1,350	)		4.05
Balance, end of year		24,749		$	4.06

Summary of Information on Activity on SARs Settled

The following table summarizes information about activity on SARs settled in stock for the years ended December 31, 2013, 2012, and 2011:

	2013					2012					2011
	Stock-settled SARs Outstanding			Weighted Average Exercise Price		Stock-settled SARs Outstanding			Weighted Average Exercise Price		Stock-settled SARs Outstanding			Weighted Average Exercise Price
Balance, beginning of year		387,072		$	13.74		405,340		$	13.71		460,915		$	13.75
Granted		—			—		—			—		—			—
Exercised		(30,422	)		12.08		—			—		—			—
Forfeited or expired		(18,891	)		14.73		(18,268	)		13.07		(55,575	)		14.06
Balance, end of year		337,759		$	—		387,072		$	13.74		405,340		$	13.71
Stock-settled SARs exercisable, end of year		313,010		$	14.05		309,980		$	14.28		247,930		$	14.80

Cash-settled SARs [Member]

Summary of Non-Vested Stock Option Activity

A summary of non-vested stock-settled SARs activity during the current fiscal year is presented below:

	Non-vested Cash-settled SARs			Weighted Average Grant Date Fair Value
Balance, beginning of year		16,527		$	2.76
Granted		—			—
Vested		(16,527	)		2.76
Forfeited, expired, or exercised		—			—
Balance, end of year		—		$	—

Summary of Information on Activity on SARs Settled

The following table summarizes information about activity on SARs settled in cash for the years ended December 31, 2013, 2012, and 2011:

	2013					2012					2011
	Cash-settled SARs Outstanding			Weighted Average Exercise Price		Cash-settled SARs Outstanding			Weighted Average Exercise Price		Cash-settled SARs Outstanding			Weighted Average Exercise Price
Balance, beginning of year		206,763		$	14.84		230,607		$	14.81		250,229		$	14.78
Granted		—			—		—			—		—			—
Exercised		(8,353	)		12.55		—			—		—			—
Forfeited or expired		(11,418	)		14.73		(23,844	)		14.50		(19,622	)		14.45
Balance, end of year		186,992		$	14.95		206,763		$	14.84		230,607		$	14.81
Cash-settled SARs exercisable, end of year		186,992		$	14.95		190,236		$	15.09		176,446		$	15.43

XML

Loans, Allowance for Loan Losses, and Credit Quality Indicators - Summary of Allowance for Loan Losses Activity (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Receivables [Abstract]
Balance, beginning of period	$ 16,345	$ 14,941	$ 16,570
Provision charged to income	250	1,900	12,900
Loans charged against allowance	(2,088)	(3,664)	(15,804)
Recoveries credited to allowance	1,410	3,168	1,275
Balance, end of period	$ 15,917	$ 16,345	$ 14,941

XML

Securities Available-for-Sale - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended										3 Months Ended
	Dec. 31, 2013 Securities	Dec. 31, 2012 Securities	Dec. 31, 2011	Dec. 31, 2013 Securities pledged as collateral [Member]	Dec. 31, 2013 Repurchase accounts [Member]	Dec. 31, 2013 Substandard [Member]	Dec. 31, 2012 Substandard [Member]	Dec. 31, 2011 Substandard [Member]	Dec. 31, 2013 Unrealized Loss Positions [Member] Securities	Dec. 31, 2012 Unrealized Loss Positions [Member] Securities	Dec. 31, 2013 Private-label mortgage-backed securities [Member] Securities	Dec. 31, 2013 Private-label mortgage-backed securities [Member] Substandard [Member] Securities	Dec. 31, 2013 Private-label mortgage-backed securities [Member] Unrealized Loss Positions [Member]	Dec. 31, 2012 Private-label mortgage-backed securities [Member] Unrealized Loss Positions [Member]	Dec. 31, 2013 Mortgage-backed securities [Member] Unrealized Loss Positions [Member]	Dec. 31, 2012 Mortgage-backed securities [Member] Unrealized Loss Positions [Member]
Schedule of Available-for-sale Securities [Line Items]
Investment securities in unrealized loss positions, number of positions									187	20
Available for sale securities number of securities	445	450
Securities in Continuous Unrealized Loss Position For 12 Months or Longer									$ 35,809	$ 19,851			$ 1,178	$ 2,696	$ 33,275	$ 17,155
Available for sale securities in continuous loss positions for twelve months or longer, number of positions									947	604			201	435	619	169
Management booked impairment of private-label mortgage-backed securities	23		10								8
Number of private-label mortgage-backed securities											1	7
Amortized Cost	347,628	380,454		23,597	2,501	2,593	3,281	3,644	167,928	111,473			2,679	3,130	103,851	95,803
Projected average life of securities portfolio	4 years 2 months 12 days
Projected average life of portfolio modified duration	3 years 9 months 18 days
Number of investment securities sold	4	0
Proceeds from sale of investment securities	1,843
Gross realized losses from investment securities sold	8
Estimated market value of pledged securities				$ 23,311	$ 2,601

XML

Property and Equipment - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 1,495	$ 1,482	$ 1,486
Operating lease agreements expiring date	2027
Rent expense related to leases	$ 1,381	$ 1,141	$ 1,152
Percentage of property leased	26.00%
Springfield [Member]
Property, Plant and Equipment [Line Items]
Operating lease agreements expiring date	2016

XML

Loans, Allowance for Loan Losses, and Credit Quality Indicators - Summary of Allowance for Credit Losses Activity by Loan Segment (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning of period	$ 16,345	$ 14,941	$ 16,570
Charge-offs	(2,088)	(3,664)	(15,804)
Recoveries	1,410	3,168	1,275
Provision (reclassification)	250	1,900	12,900
Balance, end of period	15,917	16,345	14,941
Ending allowance: collectively evaluated for impairment	15,860	16,343
Ending allowance: individually evaluated for impairment	57	2
Total Loans Receivable	15,917	16,345
Ending loan balance: collectively evaluated for impairment	984,761	861,083
Ending loan balance: individually evaluated for impairment	10,008	10,174
Total Loans Receivable	994,769	871,257
Commercial and Other [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning of period	3,846	2,776	2,230
Charge-offs	(1,658)	(1,401)	(1,403)
Recoveries	982	1,917	581
Provision (reclassification)	1,943	554	1,368
Balance, end of period	5,113	3,846	2,776
Ending allowance: collectively evaluated for impairment	5,095	3,844
Ending allowance: individually evaluated for impairment	18	2
Total Loans Receivable	5,113	3,846
Ending loan balance: collectively evaluated for impairment	386,332	322,677
Ending loan balance: individually evaluated for impairment	4,897	4,039
Total Loans Receivable	391,229	326,716
Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning of period	9,456	8,267	10,042
Charge-offs	(407)	(1,190)	(5,555)
Recoveries	360	55	176
Provision (reclassification)	(1,741)	2,324	3,604
Balance, end of period	7,668	9,456	8,267
Ending allowance: collectively evaluated for impairment	7,667	9,456
Ending allowance: individually evaluated for impairment	1
Total Loans Receivable	7,668	9,456
Ending loan balance: collectively evaluated for impairment	495,924	455,206
Ending loan balance: individually evaluated for impairment	4,828	6,034
Total Loans Receivable	500,752	461,240
Construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning of period	1,987	2,104	3,040
Charge-offs		(1,054)	(8,792)
Recoveries	60	1,188	498
Provision (reclassification)	(554)	(251)	7,358
Balance, end of period	1,493	1,987	2,104
Ending allowance: collectively evaluated for impairment	1,455	1,987
Ending allowance: individually evaluated for impairment	38
Total Loans Receivable	1,493	1,987
Ending loan balance: collectively evaluated for impairment	98,627	79,619
Ending loan balance: individually evaluated for impairment	283	101
Total Loans Receivable	98,910	79,720
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning of period	70	87	64
Charge-offs	(23)	(19)	(54)
Recoveries	8	8	20
Provision (reclassification)	13	(6)	57
Balance, end of period	68	70	87
Ending allowance: collectively evaluated for impairment	68	70
Ending allowance: individually evaluated for impairment
Total Loans Receivable	68	70
Ending loan balance: collectively evaluated for impairment	3,878	3,581
Ending loan balance: individually evaluated for impairment
Total Loans Receivable	3,878	3,581
Unallocated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning of period	986	1,707	1,194
Charge-offs
Recoveries
Provision (reclassification)	589	(721)	513
Balance, end of period	1,575	986	1,707
Ending allowance: collectively evaluated for impairment	1,575	986
Ending allowance: individually evaluated for impairment
Total Loans Receivable	1,575	986
Ending loan balance: collectively evaluated for impairment
Ending loan balance: individually evaluated for impairment
Total Loans Receivable

XML

Junior Subordinated Debentures - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Debt Instrument [Line Items]
Junior subordinated debentures	$ 8,248	$ 8,248
Debenture interest accrued and paid	6.265%
Stated liquidation value of Trust Preferred Securities	1
Variable rate of securities	LIBOR plus 135 basis points
Debentures, maturity date	Jan. 07, 2036
Interest expense	$ 200	$ 151	$ 136
London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Variable rate of securities	1.35%

XML

Parent Company Financial Information - Schedule of Parent Company Statements of Operations (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Condensed Income Statements, Captions [Line Items]
Interest expense	$ 4,794	$ 5,818	$ 8,615
Income before income tax provision	20,983	18,812	7,059
Income tax provision	(7,216)	(6,159)	(1,718)
Net income	13,767	12,653	5,341
Pacific Continental Corporation [Member]
Condensed Income Statements, Captions [Line Items]
Cash dividends from the Bank	13,995	6,755	15
Total income	13,995	6,755	15
Interest expense	200	151	136
Investor relations	123	124	112
Legal, registration expense, and other	177	128	55
Personnel costs paid to Bank	152	151	140
Total expenses	652	554	443
Income before income tax provision	13,343	6,201	(428)
Income tax provision	159	193	162
Equity in undistributed earnings of the Bank	265	6,259	5,607
Net income	$ 13,767	$ 12,653	$ 5,341

XML

Summary of Significant Accounting Policies - Schedule of Weighted Average Shares Outstanding (Detail)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Weighted Average Number Of Shares Outstanding Diluted Disclosure Items [Abstract]
Basic	17,871,439	18,085,607	18,427,657
Common stock equivalents attributable to stock-based compensation plans	188,484	152,553	91,890
Diluted	18,059,923	18,238,160	18,519,547

XML

Loan Participations and Servicing (Tables)

12 Months Ended

Dec. 31, 2013

Text Block [Abstract]

Amounts of Loans Participated

The following table reflects the amounts of loans participated.

	December 31,
	2013			2012
Total principal amount outstanding	$	25,179		$	42,020
less: principal amount derecognized		(13,268	)		(20,901	)
Principal amount included in loans on the balance sheet	$	11,911		$	21,119

XML

Derivative Instruments - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Apr. 22, 2013
Derivatives, Fair Value [Line Items]
Interest rate swap agreement notional amount	$ 8,000
Debt instrument interest rate	6.265%
Unrealized gain on fair value of derivative instrument	405
Pledging under collateral arrangements		$ 400
Junior Subordinated Debentures [Member]
Derivatives, Fair Value [Line Items]
Debt instrument maturity term	7 years
Debt instrument interest rate	2.73%

XML

Goodwill and Intangible Assets - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013 Y	Dec. 31, 2012	Dec. 31, 2011
Business Acquisition [Line Items]
Goodwill	$ 22,881	$ 22,031	$ 22,031
Core deposit intangible asset	845	204	427
Amortization of core deposit intangible	7
Northwest Business Financial Corporation [Member]
Business Acquisition [Line Items]
Goodwill	22,881
Century Bank [Member]
Business Acquisition [Line Items]
Core deposit intangible asset	$ 735

XML

Share Based Compensation - Summary of Nonvested Stock Option Activity SARs (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013
Stock-settled SARs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested Options, Balance, beginning of year	77,091
Non-vested Options, Granted
Non-vested Options, Vested	(50,992)
Non-vested Options, Forfeited, expired, or exercised	(1,350)
Non-vested Options, Balance, end of year	24,749
Weighted Average Grant Date Fair Value, Balance, beginning of year	$ 3.64
Weighted Average Grant Date Fair Value, Granted
Weighted Average Grant Date Fair Value, Vested	$ 3.43
Weighted Average Grant Date Fair Value, Forfeited, expired, or exercised	$ 4.05
Weighted Average Grant Date Fair Value, Balance, end of year	$ 4.06
Cash-settled SARs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested Options, Balance, beginning of year	16,527
Non-vested Options, Granted
Non-vested Options, Vested	(16,527)
Non-vested Options, Forfeited, expired, or exercised
Non-vested Options, Balance, end of year
Weighted Average Grant Date Fair Value, Balance, beginning of year	$ 2.76
Weighted Average Grant Date Fair Value, Granted
Weighted Average Grant Date Fair Value, Vested	$ 2.76
Weighted Average Grant Date Fair Value, Forfeited, expired, or exercised
Weighted Average Grant Date Fair Value, Balance, end of year

XML

Loans, Allowance for Loan Losses, and Credit Quality Indicators - Aged Analysis of Dental Loans Receivable (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due Still Accruing	$ 2,254	$ 2,261
60-89 Days Past Due Still Accruing	1	318
Greater Than 90 Days Still Accruing
Nonaccrual	5,343	9,361
Total Past Due and Nonaccrual	7,598	11,940
Total Current	987,171	859,317
Total Loans Receivable	994,769	871,257
Commercial and other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due Still Accruing	436	264
60-89 Days Past Due Still Accruing
Greater Than 90 Days Still Accruing
Nonaccrual	2,886	4,315
Total Past Due and Nonaccrual	3,322	4,579
Total Current	387,907	322,137
Total Loans Receivable	391,229	326,716
Consumer loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due Still Accruing	5	8
60-89 Days Past Due Still Accruing	1
Greater Than 90 Days Still Accruing
Nonaccrual
Total Past Due and Nonaccrual	6	8
Total Current	3,872	3,573
Total Loans Receivable	3,878	3,581
Real estate loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due Still Accruing	1,813	1,755
60-89 Days Past Due Still Accruing		318
Greater Than 90 Days Still Accruing
Nonaccrual	2,457	4,945
Total Past Due and Nonaccrual	4,270	7,018
Total Current	496,482	454,222
Total Loans Receivable	500,752	461,240
Real estate loans [Member] | Multi-family residential [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due Still Accruing
60-89 Days Past Due Still Accruing
Greater Than 90 Days Still Accruing
Nonaccrual
Total Past Due and Nonaccrual
Total Current	46,217	45,212
Total Loans Receivable	46,217	45,212
Real estate loans [Member] | Residential 1-4 family [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due Still Accruing	137	351
60-89 Days Past Due Still Accruing		318
Greater Than 90 Days Still Accruing
Nonaccrual	636	1,140
Total Past Due and Nonaccrual	773	1,809
Total Current	45,665	49,628
Total Loans Receivable	46,438	51,437
Real estate loans [Member] | Owner-occupied commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due Still Accruing	488
60-89 Days Past Due Still Accruing
Greater Than 90 Days Still Accruing
Nonaccrual	1,685	3,805
Total Past Due and Nonaccrual	2,173	3,805
Total Current	247,138	215,471
Total Loans Receivable	249,311	219,276
Real estate loans [Member] | Nonowner-occupied commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due Still Accruing	1,188	1,404
60-89 Days Past Due Still Accruing
Greater Than 90 Days Still Accruing
Nonaccrual	136
Total Past Due and Nonaccrual	1,324	1,404
Total Current	157,462	143,911
Total Loans Receivable	158,786	145,315
Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due Still Accruing		234
60-89 Days Past Due Still Accruing
Greater Than 90 Days Still Accruing
Nonaccrual		101
Total Past Due and Nonaccrual		335
Total Current	98,910	79,385
Total Loans Receivable	98,910	79,720
Construction [Member] | Multi-family residential [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due Still Accruing
60-89 Days Past Due Still Accruing
Greater Than 90 Days Still Accruing
Nonaccrual
Total Past Due and Nonaccrual
Total Current	23,419	17,022
Total Loans Receivable	23,419	17,022
Construction [Member] | Residential 1-4 family [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due Still Accruing		234
60-89 Days Past Due Still Accruing
Greater Than 90 Days Still Accruing
Nonaccrual
Total Past Due and Nonaccrual		234
Total Current	26,512	20,156
Total Loans Receivable	26,512	20,390
Construction [Member] | Aged Analysis of Loans Receivable [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due Still Accruing
60-89 Days Past Due Still Accruing
Greater Than 90 Days Still Accruing
Nonaccrual
Total Past Due and Nonaccrual
Total Current	30,516	23,235
Total Loans Receivable	30,516	23,235
Construction [Member] | Commercial bare land and acquisition & development [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due Still Accruing
60-89 Days Past Due Still Accruing
Greater Than 90 Days Still Accruing
Nonaccrual
Total Past Due and Nonaccrual
Total Current	11,473	10,668
Total Loans Receivable	11,473	10,668
Construction [Member] | Residential bare land and acquisition & development [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due Still Accruing
60-89 Days Past Due Still Accruing
Greater Than 90 Days Still Accruing
Nonaccrual		101
Total Past Due and Nonaccrual		101
Total Current	6,990	8,304
Total Loans Receivable	$ 6,990	$ 8,405

XML

Federal Home Loan Bank Borrowings - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Banking And Thrift [Abstract]
Percentage of Federal Home Loan Bank borrowings	30.00%
FHLB maximum borrowing line	$ 434,963	$ 412,046
Pledged real estate loans and securities	436,744
Discounted value on pledged real estate loans and securities	229,547	226,278
Federal Home Loan Bank borrowings	$ 160,000	$ 118,000

XML

Share Based Compensation - Schedule of Compensation Expenses and Tax Benefits (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation Expense (Benefit)	$ 1,196	$ 875	$ 603
Tax Benefit (Expense)	395	265	150
Director Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation Expense (Benefit)	110	70	56
Tax Benefit (Expense)	39	25	20
Director Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation Expense (Benefit)			1
Tax Benefit (Expense)
Employee Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation Expense (Benefit)	70	122	173
Tax Benefit (Expense)
Employee Stock SARs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation Expense (Benefit)	126	193	248
Tax Benefit (Expense)	44	68	87
Employee RSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation Expense (Benefit)	830	490	195
Tax Benefit (Expense)	291	172	68
Employee Cash SARs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation Expense (Benefit)	60		(70)
Tax Benefit (Expense)	$ 21		$ (25)

XML

Income Taxes - Provision (Benefit) for Income Taxes Results in Effective Tax Rates (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Tax Disclosure [Abstract]
Expected federal income tax provision	$ 7,344	$ 6,584	$ 2,471
State income tax, net of federal income tax effect	908	775	298
Municipal securities tax benefit	(735)	(631)	(422)
Equity-based compensation	27	25	68
Benefit of purchased tax credits	(150)	(181)	(289)
Low-income housing tax credits	(142)	(142)	(142)
Bank Owned Life Insurance	(201)	(228)
Acquisition Costs-Century Bank	106
Deferred tax rate adjustments and other	59	(43)	(266)
Income tax provision	$ 7,216	$ 6,159	$ 1,718
Percentage of expected federal income tax provision	35.00%	35.00%	35.00%
Percentage of state income tax, net of federal income tax effect	4.33%	4.12%	4.22%
Percentage of municipal securities tax benefit	(3.50%)	(3.35%)	(5.98%)
Percentage of equity-based compensation	0.13%	0.13%	0.96%
Percentage of benefit of purchased tax credits	(0.71%)	(0.96%)	(4.09%)
Percentage of low-income housing tax credits	(0.68%)	(0.75%)	(2.01%)
Percentage of Bank Owned Life Insurance	(0.96%)	(1.21%)
Percentage of Acquisition Costs-Century Bank	0.51%
Percentage of deferred tax rate adjustments and other	0.28%	(0.24%)	(3.77%)
Percentage of income tax provision	34.40%	32.74%	24.33%

XML

Share Based Compensation - Summary of Stock Option Activity (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding, Balance, beginning of year	367,906	412,943	447,693
Outstanding, Granted
Outstanding, Exercised		(28,999)	(14,000)
Outstanding, Forfeited or expired		(16,038)	(20,750)
Options Outstanding, Balance, end of year	367,906	367,906	412,943
Outstanding, Options exercisable, end of year	353,197	312,020	295,168
Outstanding, Options exercisable, end of year	353,197	312,020	295,168
Weighted Average Exercise Price, Balance, beginning of year	$ 14.15	$ 13.74	$ 13.61
Weighted Average Exercise Price, Granted
Weighted Average Exercise Price, Exercised		$ 6.83	$ 6.38
Weighted Average Exercise Price, Forfeited or expired		$ 16.86	$ 15.81
Weighted Average Exercise Price, Balance, end of year	$ 14.15	$ 14.15	$ 13.74
Weighted Average Exercise Price, Option exercisable, end of year	$ 14.27	$ 14.60	$ 14.36
Stock Distribution [Member] | Stock-settled SARs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding, Balance, beginning of year	387,072	405,340	460,915
Outstanding, Granted
Outstanding, Exercised	(30,422)
Outstanding, Forfeited or expired	(18,891)	(18,268)	(55,575)
Options Outstanding, Balance, end of year	337,759	387,072	405,340
Outstanding, Options exercisable, end of year	313,010	309,980	247,930
Outstanding, Options exercisable, end of year	313,010	309,980	247,930
Weighted Average Exercise Price, Balance, beginning of year	$ 13.74	$ 13.71	$ 13.75
Weighted Average Exercise Price, Granted
Weighted Average Exercise Price, Exercised	$ 12.08
Weighted Average Exercise Price, Forfeited or expired	$ 14.73	$ 13.07	$ 14.06
Weighted Average Exercise Price, Balance, end of year		$ 13.74	$ 13.71
Weighted Average Exercise Price, Option exercisable, end of year	$ 14.05	$ 14.28	$ 14.80
Cash Distribution [Member] | Employee stock SARs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding, Balance, beginning of year	206,763	230,607	250,229
Outstanding, Granted
Outstanding, Exercised	(8,353)
Outstanding, Forfeited or expired	(11,418)	(23,844)	(19,622)
Options Outstanding, Balance, end of year	186,992	206,763	230,607
Outstanding, Options exercisable, end of year	186,992	190,236	176,446
Outstanding, Options exercisable, end of year	186,992	190,236	176,446
Weighted Average Exercise Price, Balance, beginning of year	$ 14.84	$ 14.81	$ 14.78
Weighted Average Exercise Price, Granted
Weighted Average Exercise Price, Exercised	$ 12.55
Weighted Average Exercise Price, Forfeited or expired	$ 14.73	$ 14.50	$ 14.45
Weighted Average Exercise Price, Balance, end of year	$ 14.95	$ 14.84	$ 14.81
Weighted Average Exercise Price, Option exercisable, end of year	$ 14.95	$ 15.09	$ 15.43

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Federal Home Loan Bank Borrowings - Federal Home Loan Bank Borrowings by Year of Maturity and Applicable Interest Rate (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Federal Home Loan Bank borrowings	$ 160,000	$ 118,000
Cash management advance [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Federal Home Loan Bank borrowings
2013 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
FHLB borrowings, maturity date	2013
Federal Home Loan Bank borrowings		77,000
2014 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
FHLB borrowings, maturity date	2014
Federal Home Loan Bank borrowings	119,000
2015 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
FHLB borrowings, maturity date	2015
Federal Home Loan Bank borrowings	13,500	13,500
2016 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
FHLB borrowings, maturity date	2016
Federal Home Loan Bank borrowings	22,500	22,500
2017 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
FHLB borrowings, maturity date	2017
Current Rates	2.28
Federal Home Loan Bank borrowings	3,000	3,000
2018 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
FHLB borrowings, maturity date	2018
Federal Home Loan Bank borrowings
Thereafter [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Current Rates	3.85
Federal Home Loan Bank borrowings	$ 2,000	$ 2,000
Minimum [Member] | 2014 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Current Rates	0.22
Minimum [Member] | 2015 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Current Rates	0.60
Minimum [Member] | 2016 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Current Rates	1.84
Maximum [Member] | Cash management advance [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Current Rates
Maximum [Member] | 2013 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Current Rates	NA
Maximum [Member] | 2014 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Current Rates	0.24
Maximum [Member] | 2015 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Current Rates	1.6
Maximum [Member] | 2016 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Current Rates	2.36

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Property and Equipment - Summary of Future Minimum Payments Required and Anticipated Lease Revenues (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013
Leases [Abstract]
Lease Commitments, 2014	$ 1,111
Lease Commitments, 2015	663
Lease Commitments, 2016	402
Lease Commitments, 2017	398
Lease Commitments, 2018	270
Lease Commitments, Thereafter	2,028
Lease Commitments, Total	4,872
Property Leased to Others, 2014	341
Property Leased to Others, 2015	247
Property Leased to Others, 2016	227
Property Leased to Others, 2017
Property Leased to Others, 2018
Property Leased to Others, Thereafter
Property Leased to Others, Total	$ 815

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Fair Value

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Fair Value

NOTE 18 – FAIR VALUE:

The following disclosures about fair value of financial instruments are made in accordance with provisions of ASC 825 “Financial Instruments.” The use of different assumptions and estimation methods could have a significant effect on fair value amounts. Accordingly, the estimates of fair value herein are not necessarily indicative of the amounts that might be realized in a current market exchange.

The estimated fair values of the financial instruments at December 31 are as follows:

	2013				2012
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
Financial assets:
Cash and cash equivalents	$	21,108	$	21,108	$	28,701	$	28,701
Securities available-for-sale		347,386		347,386		389,885		389,885
Accrued interest receivable		4,703		4,703		4,520		4,520
Loans, net of deferred fees		993,845		980,334		870,416		871,802
Federal Home Loan Bank stock		10,425		10,425		10,462		10,462
Bank-owned life insurance		16,136		16,136		15,621		15,621
Swap Derivative		405		405		—		—
Financial liabilities:
Deposits	$	1,090,981	$	1,091,355	$	1,046,154	$	1,046,165
Federal funds and overnight funds purchased		5,150		5,150		11,570		11,570
Federal Home Loan Bank borrowings		160,000		160,984		118,000		119,517
Junior subordinated debentures		8,248		2,265		8,248		2,193
Accrued interest payable		193		193		218		218

Cash and Cash Equivalents – The carrying amount approximates fair value.

Securities available-for-sale – Fair value is based on quoted market prices. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities.

Accrued Interest receivable – The carrying amounts of accrued interest receivable approximate their fair value.

Loans – For variable rate loans that reprice frequently and have no significant change in credit risk, fair value is based on carrying values. Fair value of fixed rate loans is estimated by discounting the future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Fair values for impaired loans are estimated using discounted cash flow analyses or underlying collateral values, where applicable, and consider credit risk.

Federal Home Loan Bank stock – The carrying amount approximates fair value.

Bank-owned life insurance – The carrying amount approximates fair value.

Swap Derivative – Fair value is based on quoted market prices.

Deposits – Fair value of demand, interest bearing demand and savings deposits is the amount payable on demand at the reporting date. Fair value of time deposits is estimated using the interest rates currently offered for deposits of similar remaining maturities.

Federal Funds and Overnight Funds Purchased – The carrying amount is a reasonable estimate of fair value because of the short-term nature of these borrowings.

Federal Home Loan Bank Borrowings – Fair value of Federal Home Loan Bank borrowings is estimated by discounting future cash flows at rates currently available for debt with similar terms and remaining maturities.

Junior Subordinated Debentures – Fair value of Junior Subordinated Debentures is estimated by discounting future cash flows at rates currently available for debt with similar credit risk, terms and remaining maturities.

Accrued Interest payable – The carrying amounts of accrued interest payable approximate their fair value

Off-Balance Sheet Financial Instruments – The carrying amount and fair value are based on fees charged for similar commitments and are not material.

The Company also adheres to the FASB guidance with regards to ASC 820, “Fair Value Measures.” This guidance defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The statement requires fair value measurement disclosure of all assets and liabilities that are carried at fair value on either a recurring or nonrecurring basis. The Company determines fair value based upon quoted prices when available or through the use of alternative approaches, such as matrix or model pricing, when market quotes are not readily accessible or available. The valuation techniques used are based on observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy:

Level 1 – Quoted prices for identical instruments in active markets.

Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active or model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 – Unobservable inputs are used to measure fair value to the extent that observable inputs are not available. The Company’s own data used to develop unobservable inputs is adjusted for market consideration when reasonably available.

Financial instruments, measured at fair value, are broken down in the tables below by recurring or nonrecurring measurement status. Recurring assets are initially measured at fair value and are required to be remeasured at fair value in the financial statements at each reporting date. Assets measured on a nonrecurring basis are assets that, due to an event or circumstance, were required to be remeasured at fair value after initial recognition in the financial statements at some time during the reporting period.

The following table presents information about the level in the fair value hierarchy for the Company’s assets and liabilities not measured at fair value as of December 31, 2013 and 2012:

	Carrying Amount		Fair Value at December 31, 2013
			Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	21,108	$	21,108	$	—	$	—
Loans		994,769		—		980,334		—
Accrued interest receivable		4,703		4,703		—		—
Federal Home Loan Bank stock		10,425		10,425		—		—
Bank-owned life insurance		16,136		16,136		—		—
Swap Derivative		405		405		—		—
Financial liabilities:
Deposits	$	1,090,981	$	—	$	1,091,355	$	—
Federal funds and overnight funds purchased		5,150		5,150		—		—
Federal Home Loan Bank borrowings		160,000		—		160,984		—
Junior subordinated debentures		8,248		—		2,265		—
Accrued interest payable		193		193		—		—
	Carrying Amount		Fair Value at December 31, 2012
			Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	28,701	$	28,701	$	—	$	—
Loans		870,416		—		871,802		—
Accrued interest receivable		4,520		4,520		—		—
Federal Home Loan Bank stock		10,462		10,462		—		—
Bank-owned life insurance		15,621		15,621		—		—
Financial liabilities:
Deposits	$	1,046,154	$	—	$	1,046,165	$	—
Federal funds and overnight funds purchased		11,570		11,570		—		—
Federal Home Loan Bank borrowings		118,000		—		119,517		—
Junior subordinated debentures		8,248		—		2,193		—
Accrued interest payable		218		218		—		—

The tables below show assets measured at fair value on a recurring basis as of December 31, 2013, and December 31, 2012:

	Carrying Value		Fair Value Measurements Using
December 31, 2013			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available-for-sale securities
Obligations of U.S government agencies	$	30,847	$	—	$	30,847	$	—
Obligation of states and political subdivisions		78,795		—		78,795		—
Agency mortgage-backed securities		223,720		—		223,720		—
Private-label mortgage-backed securities		5,314		—		3,528		1,786
SBA variable vate pools		8,710		—		8,710		—
Swap Derivative		405		405		—		—
Total assets measured on a recurring basis	$	347,791	$	405	$	345,600	$	1,786
	Carrying Value		Fair Value Measurements Using
December 31, 2012			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available-for-sale securities
Obligations of U.S government agencies	$	17,844	$	—	$	17,844	$	—
Obligation of states and political subdivisions		81,501		—		81,501		—
Agency mortgage-backed securities		281,940		—		281,940		—
Private-label mortgage-backed securities		8,600		—		6,918		1,682
Total assets measured on a recurring basis	$	389,885	$	—	$	388,203	$	1,682

During 2013 there was a transfer of one security from a level 2 measurement to a level 3 as OTTI was recorded for the first time.

The following is a description of the inputs and valuation methodologies used for assets recorded at fair value on a recurring basis. Fair value for all classes of available-for-sale securities is estimated by obtaining quoted market prices for identical assets, where available. If such prices are not available, fair value is based on independent asset pricing services and models, the inputs of which are market-based or independently sourced market parameters, including, but not limited to, yield curves, interest rates, prepayments, defaults, cumulative loss projections, and cash flows. There have been no significant changes in the valuation techniques during the periods reported.

The following table provides a reconciliation of assets measured at fair value on a recurring basis using unobservable inputs (Level 3) from December 31, 2012, to December 31, 2013:

	Private-label Mortgage- backed Securities			Private-label Mortgage- backed Securities
Beginning balance	$	1,682		$	1,719
Transfers into Level 3		332			—
Transfers out of Level 3		—			—
Total gains or losses
Included in earnings		—			—
Included in other comprehensive income		80			320
Paydowns		(308	)		(357	)
Purchases, issuances, sales, and settlements
Purchases		—			—
Issuances		—			—
Sales		—			—
Settlements		—			—
Ending Balance	$	1,786		$	1,682

Fair value for all classes of available-for-sale securities is estimated by obtaining quoted market prices for identical assets, where available. If such prices are not available, fair value is based on quoted prices for similar instruments or model-derived valuations whose inputs are observable or whose significant value drivers are observable. In instances where quoted prices for identical or similar instruments and observable inputs are not available, unobservable inputs, including the Company’s own data, are used.

The Company utilizes FTN Financial as an independent third-party asset pricing service to estimate fair value on all of its available-for-sale securities. The inputs used to value all securities include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research, market indicators, and industry and economic trends. Additional inputs specific to each asset type are as follows:

• Obligations of U.S. government agencies – TRACE reported trades.

• Obligations of states and political subdivisions – MSRB reported trades, material event notices, and Municipal Market Data (MMD) benchmark yields.

• Private-label mortgage-backed securities – new issue data, monthly payment information, and collateral performance (whole loan collateral).

• Mortgage-backed securities – TBA prices and monthly payment information.

Inputs may be prioritized differently on any given day for any security and not all inputs listed are available for use in the evaluation process on any given day for each security evaluation.

The valuation methodology used by asset type includes:

• Obligations of U.S. government agencies – security characteristics, defined sector break-down, benchmark yields, applied base spread, yield to maturity (bullet structures), corporate action adjustment, and evaluations based on T+3 settlement.

• Obligations of states and political subdivisions – security characteristics, benchmark yields, applied base spread, yield to worst or market convention, ratings updates, prepayment schedules (housing bonds), material event notice adjustments, and evaluations based on T+3 settlement.

• Private-label mortgage-backed securities – security characteristics, prepayment speeds, cash flows, TBA, Treasury and swap curves, IO/PO strips or floating indexes, applied base spread, spread adjustments, yield to worst or market convention, ratings updates (whole-loan collateral), and evaluations based on T+0 settlement.

• Mortgage-backed securities – security characteristics, TBA, Treasury, or floating index benchmarks, spread to TBA levels, prepayment speeds, applied spreads, and evaluations based on T+0 settlement.

The third-party pricing service follows multiple review processes to assess the available market, credit and deal-level information to support its valuation estimates. If sufficient objectively verifiable information is not available to support a security’s valuation, an alternate independent evaluation source will be used.

The Company’s securities portfolio was valued through its independent third-party pricing service using evaluated pricing models and quoted prices based on market data. For further assurance, the Company’s estimate of fair value was compared to an additional independent third-party estimate at July 31, 2013, and the Company obtained key inputs for a sample of securities across sectors and evaluated those inputs for reasonableness. This analysis was performed at the individual security level and no material variances were noted.

There have been no significant changes in the valuation techniques during the periods reported.

The tables below show assets measured at fair value on a nonrecurring basis as of December 31, 2013, and December 31, 2012:

			Fair Value Measurements Using
December 31, 2013	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Twelve Months Ended December 31, 2013 Total Loss
Loans measured for impairment (net of guarantees and specific reserve)	$	5,749	$	—	$	—	$	5,749	$	—
Other real estate owned		16,355		—		—		16,355		—
	$	22,104	$	—	$	—	$	22,104	$	—
			Fair Value Measurements Using
December 31, 2012	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Twelve Months Ended December 31, 2012 Total Loss
Loans measured for impairment (net of guarantees and specific reserve)	$	5,877	$	—	$	—	$	5,877	$	2
Other real estate owned		17,972		—		—		17,972		1,416
	$	23,849	$	—	$	—	$	23,849	$	1,418

No transfers to or from Level 3 occurred during 2013 or 2012 on assets measured at fair value on a nonrecurring basis.

The following is a description of the inputs and valuation methodologies used for assets recorded at fair value on a nonrecurring basis.

Loans measured for impairment (net of government guarantees and specific reserves) include the estimated fair value of collateral-dependent loans, less collectible government guarantees, as well as certain noncollateral-dependent loans measured for impairment with an allocated specific reserve. When a collateral-dependent loan is identified as impaired, the value of the loan is measured using the current fair value of the collateral less selling costs. The fair value of collateral is generally estimated by obtaining external appraisals which are usually updated every 6 to 12 months based on the nature of the impaired loans. Certain noncollateral-dependent loans measured for impairment with an allocated specific reserve are valued based upon the estimated net realizable value of the loan. If the estimated fair value of the impaired loan, less collectible government guarantees, is less than the recorded investment in the loan, impairment is recognized as a charge-off through the allowance for loan losses. The carrying value of the loan is adjusted to the estimated fair value. The carrying value of loans fully charged off is zero.

Other real estate owned represents real estate which the Company has taken control of in partial or full satisfaction of loans. At the time of foreclosure, other real estate owned is recorded at the lower of the carrying amount of the loan or fair value less costs to sell, which becomes the property’s new basis. Any write downs based on the asset’s fair value at the date of acquisition are charged to the allowance for loan losses. After foreclosure, management periodically orders appraisals or performs valuations to ensure that the real estate is carried at the lower of its new cost basis or fair value, net of estimated costs to sell. Appraisals are generally updated every 6 to 12 months on other real estate owned. Fair value adjustments on other real estate owned are recognized within net loss on real estate owned. The loss represents impairments on other real estate owned for fair value adjustments based on the fair value of the real estate.

There have been no significant changes in the valuation techniques during the periods reported.

XML

Securities Available-for-Sale - Schedule of Amortized Cost and Fair Value of Securities Available-for-Sale (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Investments Debt And Equity Securities [Abstract]
Due in one year or less, Amortized Cost	$ 18,707	$ 55,559
Due after one year through 5 years, Amortized Cost	217,713	182,156
Due after 5 years through 10 years, Amortized Cost	66,103	138,243
Due after 10 years, Amortized Cost	45,105	4,496
Amortized Cost	347,628	380,454
Due in one year or less, Estimated Fair Value	18,870	55,690
Due after one year through 5 years, Estimated Fair Value	219,375	185,857
Due after 5 years through 10 years, Estimated Fair Value	65,432	143,698
Due after 10 years, Estimated Fair Value	43,709	4,640
Estimated Fair Value	$ 347,386	$ 389,885

XML

Fair Value (Tables)

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Estimated Fair Values of Financial Instruments

The estimated fair values of the financial instruments at December 31 are as follows:

	2013				2012
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
Financial assets:
Cash and cash equivalents	$	21,108	$	21,108	$	28,701	$	28,701
Securities available-for-sale		347,386		347,386		389,885		389,885
Accrued interest receivable		4,703		4,703		4,520		4,520
Loans, net of deferred fees		993,845		980,334		870,416		871,802
Federal Home Loan Bank stock		10,425		10,425		10,462		10,462
Bank-owned life insurance		16,136		16,136		15,621		15,621
Swap Derivative		405		405		—		—
Financial liabilities:
Deposits	$	1,090,981	$	1,091,355	$	1,046,154	$	1,046,165
Federal funds and overnight funds purchased		5,150		5,150		11,570		11,570
Federal Home Loan Bank borrowings		160,000		160,984		118,000		119,517
Junior subordinated debentures		8,248		2,265		8,248		2,193
Accrued interest payable		193		193		218		218

Fair Value Hierarchy for Assets and Liabilities Not Measured at Fair Value

The following table presents information about the level in the fair value hierarchy for the Company’s assets and liabilities not measured at fair value as of December 31, 2013 and 2012:

	Carrying Amount		Fair Value at December 31, 2013
			Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	21,108	$	21,108	$	—	$	—
Loans		994,769		—		980,334		—
Accrued interest receivable		4,703		4,703		—		—
Federal Home Loan Bank stock		10,425		10,425		—		—
Bank-owned life insurance		16,136		16,136		—		—
Swap Derivative		405		405		—		—
Financial liabilities:
Deposits	$	1,090,981	$	—	$	1,091,355	$	—
Federal funds and overnight funds purchased		5,150		5,150		—		—
Federal Home Loan Bank borrowings		160,000		—		160,984		—
Junior subordinated debentures		8,248		—		2,265		—
Accrued interest payable		193		193		—		—
	Carrying Amount		Fair Value at December 31, 2012
			Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	28,701	$	28,701	$	—	$	—
Loans		870,416		—		871,802		—
Accrued interest receivable		4,520		4,520		—		—
Federal Home Loan Bank stock		10,462		10,462		—		—
Bank-owned life insurance		15,621		15,621		—		—
Financial liabilities:
Deposits	$	1,046,154	$	—	$	1,046,165	$	—
Federal funds and overnight funds purchased		11,570		11,570		—		—
Federal Home Loan Bank borrowings		118,000		—		119,517		—
Junior subordinated debentures		8,248		—		2,193		—
Accrued interest payable		218		218		—		—

Assets Measured at Fair Value on Recurring Basis

The tables below show assets measured at fair value on a recurring basis as of December 31, 2013, and December 31, 2012:

	Carrying Value		Fair Value Measurements Using
December 31, 2013			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available-for-sale securities
Obligations of U.S government agencies	$	30,847	$	—	$	30,847	$	—
Obligation of states and political subdivisions		78,795		—		78,795		—
Agency mortgage-backed securities		223,720		—		223,720		—
Private-label mortgage-backed securities		5,314		—		3,528		1,786
SBA variable vate pools		8,710		—		8,710		—
Swap Derivative		405		405		—		—
Total assets measured on a recurring basis	$	347,791	$	405	$	345,600	$	1,786
	Carrying Value		Fair Value Measurements Using
December 31, 2012			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available-for-sale securities
Obligations of U.S government agencies	$	17,844	$	—	$	17,844	$	—
Obligation of states and political subdivisions		81,501		—		81,501		—
Agency mortgage-backed securities		281,940		—		281,940		—
Private-label mortgage-backed securities		8,600		—		6,918		1,682
Total assets measured on a recurring basis	$	389,885	$	—	$	388,203	$	1,682

Reconciliation of Assets Measured at Fair Value on Recurring Basis

The following table provides a reconciliation of assets measured at fair value on a recurring basis using unobservable inputs (Level 3) from December 31, 2012, to December 31, 2013:

	Private-label Mortgage- backed Securities			Private-label Mortgage- backed Securities
Beginning balance	$	1,682		$	1,719
Transfers into Level 3		332			—
Transfers out of Level 3		—			—
Total gains or losses
Included in earnings		—			—
Included in other comprehensive income		80			320
Paydowns		(308	)		(357	)
Purchases, issuances, sales, and settlements
Purchases		—			—
Issuances		—			—
Sales		—			—
Settlements		—			—
Ending Balance	$	1,786		$	1,682

Assets Measured at Fair Value on Nonrecurring Basis

The tables below show assets measured at fair value on a nonrecurring basis as of December 31, 2013, and December 31, 2012:

			Fair Value Measurements Using
December 31, 2013	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Twelve Months Ended December 31, 2013 Total Loss
Loans measured for impairment (net of guarantees and specific reserve)	$	5,749	$	—	$	—	$	5,749	$	—
Other real estate owned		16,355		—		—		16,355		—
	$	22,104	$	—	$	—	$	22,104	$	—
			Fair Value Measurements Using
December 31, 2012	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Twelve Months Ended December 31, 2012 Total Loss
Loans measured for impairment (net of guarantees and specific reserve)	$	5,877	$	—	$	—	$	5,877	$	2
Other real estate owned		17,972		—		—		17,972		1,416
	$	23,849	$	—	$	—	$	23,849	$	1,418

XML

Federal Funds and Overnight Funds Purchased - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Federal Home Loan Banks [Abstract]
Unsecured federal funds borrowing lines	$ 129,000
Unsecured federal funds borrowing lines outstanding	5,150	11,570
Secured overnight borrowing line from Federal Reserve Bank	92,579	87,740
Commercial loans pledged for Federal Reserve Bank borrowing line	139,166
Outstanding borrowings	$ 0	$ 0

XML

Fair Value - Assets Measured at Fair Value on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	$ 347,386	$ 389,885
Obligations of U.S. government agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	30,847	17,844
Obligations of states and political subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	78,795	81,501
Mortgage-backed securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	223,720	281,940
Private-label mortgage-backed securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	5,314	8,600
SBA variable rate pools [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	8,710
Swap Derivative [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	405
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	405
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Obligations of U.S. government agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Obligations of states and political subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Mortgage-backed securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Private-label mortgage-backed securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | SBA variable rate pools [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Swap Derivative [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	405
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	345,600	388,203
Significant Other Observable Inputs (Level 2) [Member] | Obligations of U.S. government agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	30,847	17,844
Significant Other Observable Inputs (Level 2) [Member] | Obligations of states and political subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	78,795	81,501
Significant Other Observable Inputs (Level 2) [Member] | Mortgage-backed securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	223,720	281,940
Significant Other Observable Inputs (Level 2) [Member] | Private-label mortgage-backed securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	3,528	6,918
Significant Other Observable Inputs (Level 2) [Member] | SBA variable rate pools [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	8,710
Significant Other Observable Inputs (Level 2) [Member] | Swap Derivative [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	1,786	1,682
Significant Unobservable Inputs (Level 3) [Member] | Obligations of U.S. government agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities
Significant Unobservable Inputs (Level 3) [Member] | Obligations of states and political subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities
Significant Unobservable Inputs (Level 3) [Member] | Mortgage-backed securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities
Significant Unobservable Inputs (Level 3) [Member] | Private-label mortgage-backed securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	1,786	1,682
Significant Unobservable Inputs (Level 3) [Member] | Swap Derivative [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities

XML

Federal Home Loan Bank Borrowings (Tables)

12 Months Ended

Dec. 31, 2013

Banking And Thrift [Abstract]

Federal Home Loan Bank Borrowings by Year of Maturity and Applicable Interest Rate

Federal Home Loan Bank borrowings by year of maturity and applicable interest rate are summarized as follows as of December 31:

	Current			December 31,
	Rates			2013		2012
Cash management advance		—		$	—	$	—
2013		NA			—		77,000
2014		0.22% - 0.24	%		119,000		—
2015		0.60% - 1.60	%		13,500		13,500
2016		1.84% - 2.36	%		22,500		22,500
2017		2.28	%		3,000		3,000
2018		—			—		—
Thereafter		3.85	%		2,000		2,000
				$	160,000	$	118,000

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Loans, Allowance for Loan Losses, and Credit Quality Indicators - Additional Information (Detail) (USD $)	12 Months Ended				0 Months Ended
	Dec. 31, 2013 TDRs	Dec. 31, 2012	Dec. 31, 2013 Troubled Debt Restructurings [Member]	Dec. 31, 2012 Troubled Debt Restructurings [Member]	Feb. 01, 2013 Century Bank [Member]	Dec. 31, 2013 Allowance for loan losses [Member]	Dec. 31, 2012 Allowance for loan losses [Member]	Dec. 31, 2013 Minimum [Member] RiskRating	Dec. 31, 2013 Maximum [Member] RiskRating
Guarantor Obligations [Line Items]
Outstanding loans to dental professionals	$ 307,268,000	$ 270,782,000
Percentage of total outstanding loans	30.89%	31.08%
Percentage of total loan portfolio	10.00%
Percentage of loan portfolio collateralized by real estate	60.38%
Cash consideration paid for acquisition					13,398,000
Internal risk rating								1	10
Valuation allowance for impaired loans	57,000	2,000				10,008,000	10,174,000
Recorded investment in impaired loans, net of government guarantees	8,705,000	9,493,000
Interest income recognized in the period	0
Government guarantees	1,532,000	681,000
Recorded investment in nonaccrual status	5,343,000	9,361,000	1,597,000	2,336,000
Identified TDRs newly considered for impairment	10
Total recorded investment in receivables	3,130,000
Associated allowance for loan losses	19,000
Commitments to lend additional funds on loans restructured as TDRs	$ 0	$ 0

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Dental Loan Portfolio - Aged Analysis of Dental Loans Receivable (Detail) (Dental Loan [Member], USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due Still Accruing
60-89 Days Past Due Still Accruing
Greater Than 90 Days Still Accruing
Nonaccrual	2,400	2,499
Total Past Due and Nonaccrual	2,400	2,499
Total Current	304,868	268,283
Total Loans Receivable	307,268	270,782
Local [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due Still Accruing
60-89 Days Past Due Still Accruing
Greater Than 90 Days Still Accruing
Nonaccrual	2,176	2,499
Total Past Due and Nonaccrual	2,176	2,499
Total Current	176,497	189,409
Total Loans Receivable	178,673	191,908
National [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due Still Accruing
60-89 Days Past Due Still Accruing
Greater Than 90 Days Still Accruing
Nonaccrual	224
Total Past Due and Nonaccrual	224
Total Current	128,371	78,874
Total Loans Receivable	$ 128,595	$ 78,874

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Loans, Allowance for Loan Losses, and Credit Quality Indicators - Schedule of Troubled Debt Restructurings that Subsequently Defaulted (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013 Contract	Dec. 31, 2012 Contract
Financing Receivable, Modifications [Line Items]
Number of Contracts	5	4
Recorded Investment	$ 583	$ 945
Commercial and other [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	3	1
Recorded Investment	144	194
Consumer loans [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts
Recorded Investment
Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	2	3
Recorded Investment	439	751
Real Estate [Member] | Multi-family residential [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts
Recorded Investment
Real Estate [Member] | Residential 1-4 family [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts		2
Recorded Investment		340
Real Estate [Member] | Owner-occupied commercial [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	1	1
Recorded Investment	303	411
Real Estate [Member] | Nonowner-occupied commercial [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	1
Recorded Investment	136
Construction [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts
Recorded Investment
Construction [Member] | Multi-family residential [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts
Recorded Investment
Construction [Member] | Residential 1-4 family [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts
Recorded Investment
Construction [Member] | Aged Analysis of Loans Receivable [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts
Recorded Investment
Construction [Member] | Commercial bare land and acquisition & development [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts
Recorded Investment
Construction [Member] | Residential bare land and acquisition & development [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts
Recorded Investment

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Securities Available-for-Sale - Schedule of Amortized Cost, Gross Unrealized Gains, Gross Unrealized Losses and Estimated Fair Values of Securities Available-for-Sale (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 347,628	$ 380,454
Gross Unrealized Gains	4,431	10,853
Gross Unrealized Losses	(4,673)	(1,422)
Estimated Fair Value	347,386	389,885
Unrealized Loss Positions [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	167,928	111,473
Gross Unrealized Gains
Gross Unrealized Losses	(4,673)	(1,422)
Estimated Fair Value	163,255	110,051
Securities in Continuous Unrealized Loss Position For Less Than 12 Months	127,446	90,200
Securities in Continuous Unrealized Loss Position For 12 Months or Longer	35,809	19,851
Unrealized Loss Positions [Member] | Obligations of U.S. government agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	17,268
Gross Unrealized Gains
Gross Unrealized Losses	(276)
Estimated Fair Value	16,992
Securities in Continuous Unrealized Loss Position For Less Than 12 Months	16,992
Securities in Continuous Unrealized Loss Position For 12 Months or Longer
Unrealized Loss Positions [Member] | Obligations of states and political subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	40,408	12,540
Gross Unrealized Gains
Gross Unrealized Losses	(2,180)	(137)
Estimated Fair Value	38,228	12,403
Securities in Continuous Unrealized Loss Position For Less Than 12 Months	36,873	12,403
Securities in Continuous Unrealized Loss Position For 12 Months or Longer	1,356
Unrealized Loss Positions [Member] | Private-label mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	2,679	3,130
Gross Unrealized Gains
Gross Unrealized Losses	(245)	(435)
Estimated Fair Value	2,434	2,695
Securities in Continuous Unrealized Loss Position For Less Than 12 Months	1,256
Securities in Continuous Unrealized Loss Position For 12 Months or Longer	1,178	2,696
Unrealized Loss Positions [Member] | Mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	103,851	95,803
Gross Unrealized Gains
Gross Unrealized Losses	(1,928)	(850)
Estimated Fair Value	101,923	94,953
Securities in Continuous Unrealized Loss Position For Less Than 12 Months	68,647	77,797
Securities in Continuous Unrealized Loss Position For 12 Months or Longer	33,275	17,155
Unrealized Loss Positions [Member] | SBA variable rate pools [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	3,722
Gross Unrealized Gains
Gross Unrealized Losses	(44)
Estimated Fair Value	3,678
Securities in Continuous Unrealized Loss Position For Less Than 12 Months	3,678
Securities in Continuous Unrealized Loss Position For 12 Months or Longer
Unrealized Gain Positions [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	179,700	268,981
Gross Unrealized Gains	4,431	10,853
Gross Unrealized Losses
Estimated Fair Value	184,131	279,834
Unrealized Gain Positions [Member] | Obligations of U.S. government agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	13,515	17,175
Gross Unrealized Gains	340	669
Gross Unrealized Losses
Estimated Fair Value	13,855	17,844
Unrealized Gain Positions [Member] | Obligations of states and political subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	39,210	64,845
Gross Unrealized Gains	1,357	4,253
Gross Unrealized Losses
Estimated Fair Value	40,567	69,098
Unrealized Gain Positions [Member] | Private-label mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	2,790	5,704
Gross Unrealized Gains	90	201
Gross Unrealized Losses
Estimated Fair Value	2,880	5,905
Unrealized Gain Positions [Member] | Mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	119,181	181,257
Gross Unrealized Gains	2,616	5,730
Gross Unrealized Losses
Estimated Fair Value	121,797	186,987
Unrealized Gain Positions [Member] | SBA variable rate pools [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	5,004
Gross Unrealized Gains	28
Gross Unrealized Losses
Estimated Fair Value	$ 5,032

XML

Securities Available-for-Sale

12 Months Ended

Dec. 31, 2013

Investments Debt And Equity Securities [Abstract]

Securities Available-for-Sale

NOTE 2—SECURITIES AVAILABLE-FOR-SALE:

The amortized cost and estimated fair values of securities available-for-sale at December 31, 2013, are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Securities in Continuous Unrealized Loss Position For Less Than 12 Months		Securities in Continuous Unrealized Loss Position For 12 Months or Longer
Unrealized Loss Positions
Obligations of U.S. government agencies	$	17,268	$	—	$	(276	)	$	16,992	$	16,992	$	—
Obligations of states and political subdivisions:		40,408		—		(2,180	)		38,228		36,873		1,356
Private-label mortgage-backed securities		2,679		—		(245	)		2,434		1,256		1,178
Mortgage-backed securities		103,851		—		(1,928	)		101,923		68,647		33,275
SBA variable vate pools		3,722		—		(44	)		3,678		3,678		—
	$	167,928	$	—	$	(4,673	)	$	163,255	$	127,446	$	35,809
Unrealized Gain Positions
Obligations of U.S. government agencies	$	13,515	$	340	$	—		$	13,855
Obligations of states and political subdivisions		39,210		1,357		—			40,567
Private-label mortgage-backed securities		2,790		90		—			2,880
Mortgage-backed securities		119,181		2,616		—			121,797
SBA variable rate pools		5,004		28		—			5,032
		179,700		4,431		—			184,131
	$	347,628	$	4,431	$	(4,673	)	$	347,386

At December 31, 2013, unrealized losses exist on certain securities classified as obligations of states and political subdivisions, mortgage-backed securities, and private-label mortgage-backed securities. The unrealized losses on securities that are obligations of states and political subdivision are deemed to be temporary. Additionally, the unrealized losses on agency mortgage-backed securities are deemed to be temporary, as they continue to perform adequately and are backed by various government-sponsored enterprises (“GSEs”). These decreases in fair value are associated with the changes in market interest rates or the widening of market spreads subsequent to the initial purchase of the securities, and not due to concerns regarding the underlying credit of the issuers or the underlying collateral. The decline in value of these securities has resulted from current economic conditions. Although yields on these securities may be below market rates during the period, no loss of principal is expected.

At December 31, 2013, of the 445 investment securities held, there were 187 investment securities in unrealized loss positions. The unrealized loss associated with the investments of $35,809 in a continuous unrealized loss position for twelve months or longer was $947, of which $201 is related to private-label mortgage-backed securities, and $619 is related to mortgage-backed securities. The Company has no current intent, nor is it more likely than not, that it will be required to sell these securities before the recovery of carrying value.

During the fourth quarter 2013 management reviewed all of its private-label mortgage-backed securities for the presence of other-than-temporary impairment (“OTTI”). Management’s evaluation included the use of independently-generated third-party credit surveillance reports that analyze the loans underlying each security. These reports include estimates of default rates and severities, life collateral loss rates, and static voluntary prepayment assumptions to generate estimated cash flows at the individual security level. Additionally, management considered factors such as downgraded credit ratings, severity and duration of the impairments, the stability of the issuers, and any discounts paid when the securities were purchased. During the fourth quarter 2013, management booked an impairment of $8 on one of its private-label mortgage-backed securities. Management has considered all available information related to the collectability of the impaired investment securities and believes that the estimated credit loss is appropriate.

Following is a tabular roll-forward of the amount of credit-related OTTI recognized in earnings during 2013, 2012 and 2011:

	December 31,
	2013		2012		2011
Balance, beginning of period:	$	204	$	204	$	226
Additions:
OTTI credit loss recorded		23		—		10
Less:
OTTI reduction from sale or maturity		—		—		(32	)
Balance, end of period:	$	227	$	204	$	204

At December 31, 2013, seven of the Company’s private-label mortgage-backed securities with an amortized cost of $2,593 were classified as substandard as their ratings were below investment grade. Securities with an amortized cost of $3,281 and $3,644 were classified as substandard at December 31, 2012, and December 31, 2011, respectively.

The projected average life of the securities portfolio is 4.2 years and its modified duration is 3.8 years.

The amortized cost and estimated fair values of securities available-for-sale at December 31, 2012, are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Securities in Continuous Unrealized Loss Position For Less Than 12 Months		Securities in Continuous Unrealized Loss Position For 12 Months or Longer
Unrealized Loss Positions
Obligations of U.S. government agencies	$	—	$	—	$	—		$	—	$	—	$	—
Obligations of states and political subdivisions:		12,540		—		(137	)		12,403		12,403		—
Private-label mortgage-backed securities		3,130		—		(435	)		2,695		—		2,696
Mortgage-backed securities		95,803		—		(850	)		94,953		77,797		17,155
SBA variable rate pools		—		—		—			—		—		—
	$	111,473	$	—	$	(1,422	)	$	110,051	$	90,200	$	19,851
Unrealized Gain Positions
Obligations of U.S. government agencies	$	17,175	$	669	$	—		$	17,844
Obligations of states and political subdivisions		64,845		4,253		—			69,098
Private-label mortgage-backed securities		5,704		201		—			5,905
Mortgage-backed securities		181,257		5,730		—			186,987
SBA variable rate pools		—		—		—			—
		268,981		10,853		—			279,834
	$	380,454	$	10,853	$	(1,422	)	$	389,885

At December 31, 2012, of the 450 investment securities held, there were 20 investment securities in unrealized loss positions. The unrealized loss associated with the investments of $19,851 in a continuous unrealized loss position for twelve months or longer was $604, of which $435 was related to private-label mortgage backed securities, and $169 was related to mortgage-backed securities.

The amortized cost and estimated fair value of securities at December 31, 2013, and 2012, are shown below by maturity or projected average life, depending on the type of security. Obligations of U.S. government agencies and states and political subdivisions are shown by contractual maturity. Mortgage-backed securities are shown by projected average life.

	December 31, 2013				December 31, 2012
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	18,707	$	18,870	$	55,559	$	55,690
Due after one year through 5 years		217,713		219,375		182,156		185,857
Due after 5 years through 10 years		66,103		65,432		138,243		143,698
Due after 10 years		45,105		43,709		4,496		4,640
	$	347,628	$	347,386	$	380,454	$	389,885

During 2013 four investment securities were sold resulting in proceeds of $1,843, and losses on sales of $8. The specific identification method was used to determine the cost of the securities sold. No securities were sold during 2012.

At December 31, 2013, securities with amortized costs of $23,597 (estimated market values of $23,311) were pledged to secure public deposits, as required by law. At December 31, 2013, securities with an aggregate amortized cost of $2,501 (estimated aggregate market value of $2,601) were pledged for repurchase accounts. At December 31, 2013, there were no balances outstanding on any repurchase agreements.

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Dental Loan Portfolio - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Receivables [Abstract]
Loans to dental professionals	$ 307,268	$ 270,782
Percentage of total outstanding loans	30.89%	31.08%
Government guarantees	$ 16,470	$ 18,834
Percentage of outstanding dental loan	5.36%	6.96%

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Regulatory Matters (Tables)

12 Months Ended

Dec. 31, 2013

Banking And Thrift [Abstract]

Schedule of Compliance with Regulatory Capital Requirements

The Company’s and the Bank’s actual capital amounts and ratios are presented in the table below:

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2013:
Total capital (to risk weighted assets)
Bank:	$	174,311		15.89	%	$	87,744		8	%	$	109,680		10	%
Company:	$	177,209		16.15	%		NA					NA		10	%
Tier 1 capital (to risk weighted assets)
Bank:	$	160,572		14.64	%	$	43,872		4	%	$	65,808		6	%
Company:	$	163,470		14.90	%		NA					NA
Tier 1 capital (to leverage assets)
Bank:	$	160,572		11.29	%	$	56,887		4	%	$	71,109		5	%
Company:	$	163,470		11.49	%		NA					NA
As of December 31, 2012:
Total capital (to risk weighted assets)
Bank:	$	173,225		17.90	%	$	77,426		8	%	$	96,783		10	%
Company:	$	175,671		18.15	%		NA					NA
Tier 1 capital (to risk weighted assets)
Bank:	$	161,073		16.64	%	$	38,713		4	%	$	58,070		6	%
Company:	$	163,519		16.90	%		NA					NA
Tier 1 capital (to leverage assets)
Bank:	$	161,073		12.15	%	$	53,019		4	%	$	66,273		5	%
Company:	$	163,519		12.33	%		NA					NA

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Schedule of Weighted Average Shares Outstanding

Weighted average shares outstanding at December 31, are as follows:

	2013		2012		2011
Basic		17,871,439		18,085,607		18,427,657
Common stock equivalents attributable to stock-based compensation plans		188,484		152,553		91,890
Diluted		18,059,923		18,238,160		18,519,547

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation – The consolidated financial statements include the accounts of Pacific Continental Corporation (the “Company”), a bank holding company, and its wholly owned subsidiary, Pacific Continental Bank (the “Bank”) and the Bank’s wholly owned subsidiaries, PCB Service Corporation (which previously owned and operated bank-related real estate but is currently inactive) and PCB Loan Services Corporation (which previously owned and operated certain repossessed or foreclosed collateral but is currently inactive). The Bank provides commercial banking, financing, mortgage lending and other services through fourteen offices located in Western Oregon and Western Washington. The Bank also operates two loan production offices in Tacoma, Washington and Denver, Colorado. All significant intercompany accounts and transactions have been eliminated in consolidation.

In November 2005, the Company formed a wholly owned Delaware statutory business trust subsidiary, Pacific Continental Corporation Capital Trust (the “Trust”) which issued $8,248 of guaranteed undivided beneficial interests in the Pacific Continental’s Junior Subordinated Deferrable Interest Debentures (“Trust Preferred Securities”). Pacific Continental has not consolidated the accounts of the Trust in its consolidated financial statements in accordance with generally accepted accounting principles, (“GAAP”). As a result, the junior subordinated debentures issued by Pacific Continental to the issuer trust, totaling $8,248, are reflected on Pacific Continental’s consolidated balance sheet at December 31, 2013, under the caption “Junior Subordinated Debentures.” Pacific Continental also recognized its $248 investment in the Trust, which is recorded among “Other Assets” in its consolidated balance sheet at December 31, 2013.

Use of Estimates

Use of Estimates – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimations made by management involve fair value calculations pertaining to financial assets and liabilities, the calculation of the allowance for loan losses, and the impairment assessment for goodwill.

Cash and Cash Equivalents

Cash and Cash Equivalents – For purposes of reporting cash flows, cash and cash equivalents includes cash on hand, amounts due from or deposited with banks, interest-bearing balances due from banks, and federal funds sold. Generally, federal funds are sold for one-day periods.

The Company is required to maintain certain reserves with the Federal Reserve Bank as defined by regulation. Such reserves totaling $1,430 and $1,061 were maintained within the Company’s cash balances at December 31, 2013, and 2012, respectively.

Securities Available-for-Sale

Securities Available-for-Sale – Securities available-for-sale are held for indefinite periods of time and may be sold in response to movements in market interest rates, changes in the maturity or mix of Company assets and liabilities or demand for liquidity. Management determines the appropriate classification of securities at the time of purchase. The Company classified all of its securities as available-for-sale throughout 2013 and 2012.

Securities classified as available-for-sale are reported at estimated fair value based on available market prices. Net unrealized gains and losses are included in other comprehensive income or loss on an after-tax basis. Impaired securities are assessed quarterly for the presence of other-than-temporary impairment (“OTTI”). OTTI is considered to have occurred, (1) if we intend to sell the security, (2) if it is “more likely than not” we will be required to sell the security before recovery of its amortized cost basis, or (3) the present value of expected cash flows is not sufficient to recover the entire amortized cost basis. The “more likely than not” criteria is a lower threshold than the “probable” criteria used under previous guidance.

When OTTI is identified, the amount of the impairment is bifurcated into two components: the amount representing credit loss and the amount related to all other factors. The amount representing credit loss is recognized against earnings as a realized loss and the amount representing all other factors is recognized in other comprehensive income as an unrealized loss. Gains and losses on the sale of available-for-sale securities are determined using the specific-identification method. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Interest income on securities available-for-sale is included in income using the level yield method.

Loans Held-for-Sale and Mortgage Banking Activities

Loans Held-for-Sale and Mortgage Banking Activities – The Company historically originated residential mortgage loans for resale in the secondary market. Sales were without recourse and the Company generally did not retain mortgage servicing rights. During first quarter 2012 the company closed the mortgage division and no additional loans held-for-sale were generated during the remainder of 2012 and 2013.

Loans, Income Recognition, and the Allowance for Loan Losses

Loans, Income Recognition, and the Allowance for Loan Losses – Loans are stated at the amount of unpaid principal net of loan premiums or discounts for purchased loans, net deferred loan origination fees, discounts associated with retained portions of loans sold, and an allowance for loan losses. Interest on loans is calculated using the simple-interest method on daily balances of the principal amount outstanding. Loan origination fees, net of origination costs and discounts, are amortized over the lives of the loans as adjustments to yield.

Nonaccrual Loans

Accrual of interest is discontinued on contractually delinquent loans when management believes that, after considering economic and business conditions and collection efforts, the borrower’s financial condition is such that collection of principal or interest is doubtful. At a minimum, loans that are past due as to maturity or payment of principal or interest by 90 days or more are placed on nonaccrual status, unless such loans are well-secured and in the process of collection. Interest income is subsequently recognized only to the extent cash payments are received satisfying all delinquent principal and interest amounts, and the prospects for future payments in accordance with the loan agreement appear relatively certain. In accordance with GAAP, payments received on nonaccrual loans are applied to the principal balance and no interest income is recognized.

Allowance for Loan Losses Methodology

Management provides for possible loan losses by maintaining an allowance. The allowance for loan losses is established through a provision for loan losses charged to expense. Loans are charged against the allowance when management believes the collection of principal or interest is unlikely. The allowance is an amount that management considers adequate to absorb possible losses on existing loans based on its evaluation of the collectability of those loans and prior loss experience. Management’s evaluations take into consideration such factors as changes in the size and nature of the loan portfolio, the overall portfolio quality, the financial condition of borrowers, the level of nonperforming loans, the Company’s historical loss experience, the estimated value of underlying collateral, and current economic conditions that may affect the borrower’s ability to pay. This evaluation is inherently subjective as it requires estimates that are susceptible to significant subsequent revision as more information becomes available.

The allowance consists of general, specific and unallocated components. The general component covers all loans not specifically identified for impairment testing. The specific component relates to loans that are individually assessed for impairment. The combined general and specific components of the allowance constitute the Company’s allocated allowance for loan losses. An unallocated allowance may be maintained to provide for credit losses inherent in the loan portfolio that may not have been contemplated in the general risk factors or the specific allowance analysis.

The Company performs regular credit reviews of the loan portfolio to determine the credit quality of the portfolio and the Company’s adherence to underwriting standards. When loans are originated, they are assigned a risk rating that is reassessed periodically during the terms of the loans through the credit review process. The risk rating categories constitute a primary factor in determining an appropriate amount for the general allowance for loan losses. The general allowance is calculated by applying risk factors to pools of outstanding loans. Risk factors are assigned based on management’s evaluation of the losses inherent within each identified loan category. Loan categories with greater risk of loss are therefore assigned a higher risk factor. The Company’s Asset and Liability Committee (“ALCO”) and Board of Directors are responsible for, among other things, regularly reviewing the allowance for loan losses methodology, including loss factors, and ensuring that it is designed and applied in accordance with generally accepted accounting principles.

Regular credit reviews of the portfolio are performed to identify loans that are considered potentially impaired. Potentially impaired loans are referred to the ALCO Committee which reviews loans recommended for impairment. A loan is considered impaired when, based on current information and events, the Company is unlikely to collect all principal and interest due according to the terms of the loan agreement. When a loan is deemed to be impaired, the amount of the impairment is measured using discounted cash flows except when the sole remaining source of the repayment is the liquidation of the collateral. In these cases, the current fair value of the collateral, less selling costs is used. Impairment is recognized as a specific component within the allowance for loan losses if the value of the impaired loan is less than the recorded investment in the loan. When the amount of the impairment represents a confirmed loss, it is charged off against the allowance for loan losses. Loans specifically reviewed for impairment are excluded from the general allowance calculation to prevent double-counting the loss exposure. The Company’s ALCO Committee reviews loans recommended for impaired status and those recommended to be removed from impaired status. The Company’s ALCO Committee and Board provide oversight of the allowance for loan losses process and review and approve the allowance methodology on a quarterly basis.

There have been no significant changes to the Company’s loan loss allowance methodology or policies in the periods presented.

Charge off Methodology

When it becomes evident that a loan has a probable loss and is deemed uncollectable, regardless of delinquent status, the loan is charged off. A partial charge-off will occur to the extent of the portion of the loan that is not well secured and is in the process of collection. Additionally, a partial charge-off will occur to the extent of the portion of the loan that is not guaranteed by a federal or state government agency and is in the process of collection. In circumstances whereby it is evident that a government guarantee will not be honored, the loan will be charged-off to the extent of the portion of the loan/lease that is not well secured. Commercial overdrafts will be charged-off within the month the delinquent checking account becomes 90 days delinquent.

Troubled Debt Restructuring

Loans are reported as a troubled debt restructuring when the Company grants a concession to a borrower experiencing financial difficulties that it would not otherwise consider. Examples of such concessions include a reduction in the loan rate, forgiveness of principal or accrued interest, extending the maturity date, or providing a lower interest rate than would be normally available for a transaction of similar risk. The Company will undertake a restructuring only when it occurs in ways which improve the likelihood that the credit will be repaid in full under the modified terms and in accordance with a reasonable repayment schedule.

Off-Balance Sheet Credit Exposure

Off-Balance Sheet Credit Exposure – A reserve for unfunded commitments is maintained at a level that, in the opinion of management, is adequate to absorb probable losses associated with the Company’s commitment to lend funds under existing agreements such as letters or lines of credit. Management determines the adequacy of the reserve for unfunded commitments based upon reviews of individual credit facilities, current economic conditions, the risk characteristics of the various categories of commitments and other relevant factors. These factors include the quality of the current loan portfolio: the trend in the loan portfolio’s risk ratings, current economic conditions, loan concentrations, loan growth rates, past-due and nonperforming trends, evaluation of specific loss estimates for all significant problem loans, historical charge-off and recovery experience, and other pertinent information. The reserve is based on estimates and ultimate losses may vary from the current estimates. These estimates are evaluated on a regular basis and, as adjustments become necessary, they are reported in earnings in the periods in which they become known. Draws on unfunded commitments that are considered uncollectible at the time funds are advanced are charged to the allowance. Provisions for unfunded commitment losses and recoveries on loans commitments previously charged-off are added to the reserve for unfunded commitments, which is included in the Other Liabilities section of the consolidated balance sheets. At December 31, 2013, the reserve for unfunded loan commitments totaled $226 compared to $170 at December 31, 2012.

Foreclosed Assets

Foreclosed Assets – Assets acquired through foreclosure, or deeds in lieu of foreclosure, are initially recorded at fair value less the estimated cost of disposal, at the date of foreclosure. Any excess of the loan’s balance over the fair value of the foreclosed collateral is charged to the allowance for loan losses.

Improvements to foreclosed assets are capitalized to the extent that the improvements increase the fair value of the assets. Expenditures for routine maintenance and repairs of foreclosed assets are charged to expense as incurred. Management performs periodic valuations of foreclosed assets and may adjust the values to the lower of carrying amount or fair value less the estimated costs to sell. Write downs to net realizable value, if any, and disposition gains or losses are included in noninterest income or expense.

Federal Home Loan Bank Stock

Federal Home Loan Bank Stock – The investment in Federal Home Loan Bank (“FHLB”) stock is carried at par value, which approximates its fair value. As a member of the FHLB system, the Company is required to maintain a minimum level of investment in FHLB stock based on specific percentages of its outstanding mortgages, total assets or FHLB advances.

FHLB stock is generally viewed as long-term investment. Accordingly, when evaluating FHLB stock for impairment its value is determined based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. The determination of whether the decline affects the ultimate recoverability is influenced by criteria such as the following:

• The significance of the decline in net assets of the FHLBs as compared to the capital stock amount for the FHLBs and the length of time this situation has persisted.

• Commitments by the FHLBs to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLBs.

• The impact of legislative and regulatory changes on the institution and, accordingly, on the customer base of the FHLBs.

• The liquidity position of the FHLBs.

Property, Plant and Equipment

Property, Plant and Equipment – Property is stated at cost, net of accumulated depreciation and amortization. Additions, betterments and replacements of major units are capitalized. Expenditures for normal maintenance, repairs and replacements of minor units are charged to expense as incurred. Gains or losses realized from sales or retirements are reflected in operations currently.

Depreciation and amortization is computed by the straight-line method over the estimated useful lives of the assets. Estimated useful lives are 30 to 40 years for buildings, 3 to 10 years for furniture and equipment, and up to the lesser of the useful life or lease term for leasehold improvements.

Goodwill and Intangible Assets

Goodwill and Intangible Assets – Intangible assets are comprised of goodwill and other intangibles acquired in business combinations. Goodwill and intangible assets with indefinite useful lives are not amortized. Intangible assets with definite useful lives are amortized to their estimated residual values over their respective estimated useful lives, and also reviewed for impairment. The Company performs a goodwill impairment analysis on an annual basis as of December 31. Additionally, the Company performs a goodwill impairment evaluation on an interim basis when events or circumstances indicate impairment potentially exists. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others, a significant decline in our expected future cash flows; a sustained, significant decline in our stock price and market capitalization; a significant adverse change in legal factors or in the business climate; adverse action or assessment by a regulator; and unanticipated competition.

Bank-owned Life Insurance

Bank-owned Life Insurance – Bank-owned life insurance is recorded at the estimated cash-surrender value of the policies. Increases in the cash-surrender value are recorded as noninterest income.

Advertising

Advertising – Advertising costs are charged to expense during the year in which they are incurred. Advertising expenses were $894, $779, and $720, for the years ended December 31, 2013, 2012 and 2011, respectively.

Income Taxes

Income Taxes – Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are calculated using tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established to reduce the net carrying amount of deferred tax assets if it is determined to be more likely than not that all or some of the potential deferred tax asset will not be realized.

The Company follows the provisions of the Financial Accounting Standards Boards’ (“FASB”) ASC 740, “Income Taxes,” relating to accounting for uncertain tax positions. Uncertain tax positions may arise when the Company takes or expects to take a tax position that is ultimately disallowed by the relevant taxing authority. The Company files income tax returns with the Internal Revenue Service and any states in which it has identified that it has nexus. Tax returns for the years subsequent to 2009 remain open to examination by the taxing jurisdictions. Management reviews the Company’s balance sheet, income statement, income tax provision and income tax returns as well as the permanent and temporary adjustments affecting current and deferred income taxes quarterly and assesses whether uncertain tax positions exist. At December 31, 2013, management does not believe that any uncertain tax positions exist, that are not more-likely-than-not, sustainable upon examination. The Company’s policy with respect to interest and penalties ensuing from income tax settlements is to recognize them as noninterest expense.

Earnings Per Share

Earnings Per Share – Basic earnings per share are computed by dividing net income by the weighted average number of shares outstanding during the period. Diluted earnings per share include the effect of common stock equivalents that would arise from the exercise of stock options discussed in Note 15. Weighted shares outstanding are adjusted retroactively for the effect of stock dividends.

Weighted average shares outstanding at December 31, are as follows:

	2013		2012		2011
Basic		17,871,439		18,085,607		18,427,657
Common stock equivalents attributable to stock-based compensation plans		188,484		152,553		91,890
Diluted		18,059,923		18,238,160		18,519,547

Equity grants, including options and Stock Appreciation Rights, for 368,705, 452,480 and 266,859 shares of common stock were excluded from the diluted earnings per share calculation in 2013, 2012 and 2011, respectively, due to their anti-dilutive effect.

Share-Based Payment Plans

Share-Based Payment Plans – Financial accounting standards require companies to measure and recognize compensation expense for all share-based payments at the grant date based on the fair value of the award, as defined in FASB ASC 718, “Stock Compensation,” and include such costs as an expense in their income statements over the requisite service (vesting) period. The Company estimates the impact of forfeitures based on historical experience with previously granted share-based compensation awards, and considers the impact of the forfeitures when determining the amount of expense to record. The Company generally issues new shares of common stock to satisfy stock option exercises. The Company uses the Black-Scholes option pricing model to measure fair value. No options or Stock Appreciation Rights (“SARs”) were granted in 2012 or 2013. ISOs, nonqualified stock options, restricted stock, restricted stock units, and stock-settled SARs are recognized as equity-based awards and compensation expense is recorded to the income statement over the requisite vesting period based on the grant-date fair value. SARs settled in cash are recognized on the balance sheet as liability-based awards. The grant-date fair value of liability-based awards vesting in the current period, along with the change in fair value of the awards during the period, are recognized as compensation expense and as an adjustment to the recorded liability.

Fair Value Measurements

Fair Value Measurements – Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820, “Fair Value Measurements,” establishes a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable. Observable inputs reflect market-derived or market-based information obtained from independent sources while unobservable inputs reflect our estimates about market data. In general, fair values determined by Level 1 inputs utilize quoted prices for identical assets or liabilities traded in active markets that the Company has the ability to access. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements –

In July 2012, the FASB issued ASU No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment. With this update, a company testing indefinite-lived intangibles for impairment now has the option to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount in accordance with current guidance. An entity also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. An entity will be able to resume performing the qualitative assessment in any subsequent period. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after September 15, 2012. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The Update requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component and to present either on the face of the statement where net income is presented, or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required to be reclassified to net income in its entirety in the same reporting period. The amendments are effective for annual and interim reporting periods beginning on or after December 15, 2013. The Company is currently in the process of evaluating the ASU but does not expect it will have a material impact on the Company’s consolidated financial statements.

In July 2013, the FASB issued ASU No. 2013-10, Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes . ASU No. 2013-10 permits the use of the Fed Funds Effective Swap Rate (OIS) to be used as a U.S. benchmark interest rate for hedge account purposes. The amendment is effective prospectively for qualifying new or redesiginated hedging relationships entered into on or after July 17, 2013. The adoption of ASU No. 2013-10 did not have a material impact on the Company’s consolidated financial statements.

In July 2013, the FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU No. 2013-11 requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. No new recurring disclosures are required. The amendments are effective for annual and interim reporting periods beginning on or after December 15, 2013 and are to be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The adoption of ASU No. 2013-11 is not expected to have a material impact on the Company’s consolidated financial statements.

In January 2014, the FASB issued ASU No. 2014-01, Accounting for Investments in Qualified Affordable Housing Projects. ASU 2014-04 permit an entity to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognize the net investment performance in the income statement as a component of income tax expense (benefit). The amendments are effective for annual and interim reporting periods beginning on or after December 15, 2014 and should be applied prospectively. The Company is currently reviewing the requirements of ASU No. 2014-01, but does not expect the ASU to have a material impact on the Company’s consolidated financial statements.

In January 2014, the FASB issued ASU No. 2014-04, Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon foreclosure. ASU 2014-04 clarifies that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments are effective for annual and interim reporting periods beginning on or after December 15, 2014 and can be applied with a modified retrospective transition method or prospectively. The adoption of ASU No. 2014-04 is not expected to have a material impact on the Company’s consolidated financial statements.

Subsequent events

Subsequent events – The Company has evaluated events and transactions subsequent to December 31, 2013 for potential recognition or disclosure.

Reclassifications

Reclassifications – Certain amounts contained in the 2012 and 2011 consolidated financial statements have been reclassified where appropriate to conform to the financial statement presentation used in 2013. These reclassifications had no effect on previously reported net income.

XML

Fair Value - Assets Measured at Fair Value on Nonrecurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans measured for impairment (net of guarantees and specific reserve)	$ 5,749	$ 5,877
Other real estate owned	16,355	17,972
Assets, Fair Value Disclosure, Nonrecurring, Total	22,104	23,849
Loans measured for impairment (net of guarantees and specific reserve), Total Loss		2
Other real estate owned, Total Loss		1,416
Assets at fair value on a nonrecurring basis, Total Loss		1,418
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans measured for impairment (net of guarantees and specific reserve)
Other real estate owned
Assets, Fair Value Disclosure, Nonrecurring, Total
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans measured for impairment (net of guarantees and specific reserve)
Other real estate owned
Assets, Fair Value Disclosure, Nonrecurring, Total
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans measured for impairment (net of guarantees and specific reserve)	5,749	5,877
Other real estate owned	16,355	17,972
Assets, Fair Value Disclosure, Nonrecurring, Total	$ 22,104	$ 23,849

XML

Loans, Allowance for Loan Losses, and Credit Quality Indicators - Credit Quality Indicators (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	$ 994,769	$ 871,257
Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	500,752	461,240
Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	98,910	79,720
Multi-family residential [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	46,217	45,212
Multi-family residential [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	23,419	17,022
Residential 1-4 family [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	46,438	51,437
Residential 1-4 family [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	26,512	20,390
Owner-occupied commercial [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	249,311	219,276
Nonowner-occupied commercial [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	158,786	145,315
Aged Analysis of Loans Receivable [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	30,516	23,235
Commercial bare land and acquisition & development [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	11,473	10,668
Residential bare land and acquisition & development [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	6,990	8,405
Commercial and other [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	391,229	326,716
Consumer loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	3,878	3,581
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	951,897	833,673
Pass [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	475,102	437,816
Pass [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	94,111	75,063
Pass [Member] | Multi-family residential [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	44,677	43,883
Pass [Member] | Multi-family residential [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	23,419	17,022
Pass [Member] | Residential 1-4 family [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	37,831	43,458
Pass [Member] | Residential 1-4 family [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	26,145	20,278
Pass [Member] | Owner-occupied commercial [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	239,539	208,713
Pass [Member] | Nonowner-occupied commercial [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	153,055	141,762
Pass [Member] | Aged Analysis of Loans Receivable [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	28,978	21,646
Pass [Member] | Commercial bare land and acquisition & development [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	11,223	10,668
Pass [Member] | Residential bare land and acquisition & development [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	4,346	5,449
Pass [Member] | Commercial and other [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	378,828	317,250
Pass [Member] | Consumer loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	3,856	3,544
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	4,278
Special Mention [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	4,278
Special Mention [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Special Mention [Member] | Multi-family residential [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Special Mention [Member] | Multi-family residential [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Special Mention [Member] | Residential 1-4 family [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Special Mention [Member] | Residential 1-4 family [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Special Mention [Member] | Owner-occupied commercial [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	4,278
Special Mention [Member] | Nonowner-occupied commercial [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Special Mention [Member] | Aged Analysis of Loans Receivable [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Special Mention [Member] | Commercial bare land and acquisition & development [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Special Mention [Member] | Residential bare land and acquisition & development [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Special Mention [Member] | Commercial and other [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Special Mention [Member] | Consumer loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	38,594	37,584
Substandard [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	21,372	23,424
Substandard [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	4,799	4,657
Substandard [Member] | Multi-family residential [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	1,540	1,329
Substandard [Member] | Multi-family residential [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Substandard [Member] | Residential 1-4 family [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	8,607	7,979
Substandard [Member] | Residential 1-4 family [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	367	112
Substandard [Member] | Owner-occupied commercial [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	5,494	10,563
Substandard [Member] | Nonowner-occupied commercial [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	5,731	3,553
Substandard [Member] | Aged Analysis of Loans Receivable [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	1,538	1,589
Substandard [Member] | Commercial bare land and acquisition & development [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	250
Substandard [Member] | Residential bare land and acquisition & development [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	2,644	2,956
Substandard [Member] | Commercial and other [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	12,401	9,466
Substandard [Member] | Consumer loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade	22	37
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Doubtful [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Doubtful [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Doubtful [Member] | Multi-family residential [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Doubtful [Member] | Multi-family residential [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Doubtful [Member] | Residential 1-4 family [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Doubtful [Member] | Residential 1-4 family [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Doubtful [Member] | Owner-occupied commercial [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Doubtful [Member] | Nonowner-occupied commercial [Member] | Real estate loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Doubtful [Member] | Aged Analysis of Loans Receivable [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Doubtful [Member] | Commercial bare land and acquisition & development [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Doubtful [Member] | Residential bare land and acquisition & development [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Doubtful [Member] | Commercial and other [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade
Doubtful [Member] | Consumer loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loan Grade

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Parent Company Financial Information (Tables)

12 Months Ended

Dec. 31, 2013

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Schedule of Parent Company Balance Sheets

Financial information for Pacific Continental Corporation (Parent Company only) is presented below:

BALANCE SHEETS

	December 31,
	2013			2012		2011
Assets:
Cash deposited with the Bank	$	2,941		$	2,465	$	7,273
Deferred tax asset		(158	)		—		—
Prepaid expenses		14			16		11
Equity in Trust		248			248		248
Swap unrealized gain		405			—		—
Investment in the Bank		184,039			188,935		179,618
	$	187,489		$	191,664	$	187,150
Liabilities and shareholders’ equity:
Liabilities	$	57		$	35	$	36
Junior subordinated debentures		8,248			8,248		8,248
Shareholders’ equity		179,184			183,381		178,866
	$	187,489		$	191,664	$	187,150

Schedule of Parent Company Statements of Operations

STATEMENTS OF OPERATIONS

For the Years Ended December 31

	2013		2012		2011
Income:
Cash dividends from the Bank	$	13,995	$	6,755	$	15
		13,995		6,755		15
Expenses:
Interest expense		200		151		136
Investor relations		123		124		112
Legal, registration expense, and other		177		128		55
Personnel costs paid to Bank		152		151		140
		652		554		443
Income (loss) before income tax expense and equity in undistributed earnings (loss) from the Bank		13,343		6,201		(428	)
Income tax benefit		159		193		162
Equity in undistributed earnings of the Bank		265		6,259		5,607
Net income	$	13,767	$	12,653	$	5,341

Schedule of Parent Company Statements of Cash Flows

STATEMENTS OF CASH FLOWS

For the Years Ended December 31

	2013			2012			2011
Cash flows from operating activities:
Net income	$	13,767		$	12,653		$	5,341
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings from the Bank		(265	)		(6,259	)		(5,607	)
Excess tax benefit of stock options exercised		—			(10	)		(14	)
Other, net		342			98			(141	)
Net cash used in operating activities		13,844			6,482			(421	)
Cash flows from financing activities:
Proceeds from stock options exercised		—			69			89
Income tax benefit for stock options exercised		—			10			14
Repurchase of common stock		—			(5,676	)		—
Dividends paid		(13,050	)		(5,588	)		(1,842	)
Vested RSUs surrendered to cover tax consequences		(318	)		(105	)		—
Net cash provided by (used in) financing activities		(13,368	)		(11,290	)		(1,739	)
Net increase (decrease) in cash		476			(4,808	)		(2,160	)
Cash, beginning of period		2,465			7,273			9,433
Cash, end of period	$	2,941		$	2,465		$	7,273

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Securities Available-for-Sale (Tables)

12 Months Ended

Dec. 31, 2013

Investments Debt And Equity Securities [Abstract]

Schedule of Amortized Cost, Gross Unrealized Gains, Gross Unrealized Losses and Estimated Fair Values of Securities Available-for-Sale

The amortized cost and estimated fair values of securities available-for-sale at December 31, 2013, are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Securities in Continuous Unrealized Loss Position For Less Than 12 Months		Securities in Continuous Unrealized Loss Position For 12 Months or Longer
Unrealized Loss Positions
Obligations of U.S. government agencies	$	17,268	$	—	$	(276	)	$	16,992	$	16,992	$	—
Obligations of states and political subdivisions:		40,408		—		(2,180	)		38,228		36,873		1,356
Private-label mortgage-backed securities		2,679		—		(245	)		2,434		1,256		1,178
Mortgage-backed securities		103,851		—		(1,928	)		101,923		68,647		33,275
SBA variable vate pools		3,722		—		(44	)		3,678		3,678		—
	$	167,928	$	—	$	(4,673	)	$	163,255	$	127,446	$	35,809
Unrealized Gain Positions
Obligations of U.S. government agencies	$	13,515	$	340	$	—		$	13,855
Obligations of states and political subdivisions		39,210		1,357		—			40,567
Private-label mortgage-backed securities		2,790		90		—			2,880
Mortgage-backed securities		119,181		2,616		—			121,797
SBA variable rate pools		5,004		28		—			5,032
		179,700		4,431		—			184,131
	$	347,628	$	4,431	$	(4,673	)	$	347,386

The amortized cost and estimated fair values of securities available-for-sale at December 31, 2012, are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Securities in Continuous Unrealized Loss Position For Less Than 12 Months		Securities in Continuous Unrealized Loss Position For 12 Months or Longer
Unrealized Loss Positions
Obligations of U.S. government agencies	$	—	$	—	$	—		$	—	$	—	$	—
Obligations of states and political subdivisions:		12,540		—		(137	)		12,403		12,403		—
Private-label mortgage-backed securities		3,130		—		(435	)		2,695		—		2,696
Mortgage-backed securities		95,803		—		(850	)		94,953		77,797		17,155
SBA variable rate pools		—		—		—			—		—		—
	$	111,473	$	—	$	(1,422	)	$	110,051	$	90,200	$	19,851
Unrealized Gain Positions
Obligations of U.S. government agencies	$	17,175	$	669	$	—		$	17,844
Obligations of states and political subdivisions		64,845		4,253		—			69,098
Private-label mortgage-backed securities		5,704		201		—			5,905
Mortgage-backed securities		181,257		5,730		—			186,987
SBA variable rate pools		—		—		—			—
		268,981		10,853		—			279,834
	$	380,454	$	10,853	$	(1,422	)	$	389,885

Schedule of Roll-Forward Amount of Credit-Related OTTI

Following is a tabular roll-forward of the amount of credit-related OTTI recognized in earnings during 2013, 2012 and 2011:

	December 31,
	2013		2012		2011
Balance, beginning of period:	$	204	$	204	$	226
Additions:
OTTI credit loss recorded		23		—		10
Less:
OTTI reduction from sale or maturity		—		—		(32	)
Balance, end of period:	$	227	$	204	$	204

Schedule of Amortized Cost and Fair Value of Securities Available-for-Sale

The amortized cost and estimated fair value of securities at December 31, 2013, and 2012, are shown below by maturity or projected average life, depending on the type of security. Obligations of U.S. government agencies and states and political subdivisions are shown by contractual maturity. Mortgage-backed securities are shown by projected average life.

	December 31, 2013				December 31, 2012
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	18,707	$	18,870	$	55,559	$	55,690
Due after one year through 5 years		217,713		219,375		182,156		185,857
Due after 5 years through 10 years		66,103		65,432		138,243		143,698
Due after 10 years		45,105		43,709		4,496		4,640
	$	347,628	$	347,386	$	380,454	$	389,885

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Loans, Allowance for Loan Losses, and Credit Quality Indicators (Tables)

12 Months Ended

Dec. 31, 2013

Summary of Loan Classifications

Major classifications of loans, including loans held-for-sale, at December 31 are as follows:

	December 31,			% of gross			December 31,			% of gross
	2013			loans			2012			loans
Real estate secured loans:
Permanent Loans:
Multi-family residential	$	46,217			4.6	%	$	45,212			5.2	%
Residential 1-4 family		46,438			4.7	%		51,437			5.9	%
Owner-occupied commercial		249,311			25.1	%		219,276			25.2	%
Nonowner-occupied commercial		158,786			16.0	%		145,315			16.7	%
Total permanent real estate loans		500,752			50.4	%		461,240			53.0	%
Construction Loans:
Multi-family residential		23,419			2.4	%		17,022			2.0	%
Residential 1-4 family		26,512			2.7	%		20,390			2.3	%
Commercial real estate		30,516			3.1	%		23,235			2.7	%
Commercial bare land and acquisition & development		11,473			1.2	%		10,668			1.2	%
Residential bare land and acquisition & development		6,990			0.6	%		8,405			0.9	%
Total construction real estate loans		98,910			10.0	%		79,720			9.1	%
Total real estate loans		599,662			60.4	%		540,960			62.1	%
Commercial loans		390,301			39.2	%		325,604			37.4	%
Consumer loans		3,878			0.3	%		3,581			0.4	%
Other loans		928			0.1	%		1,112			0.1	%
Gross loans		994,769			100.0	%		871,257			100.0	%
Deferred loan origination fees		(924	)					(841	)
		993,845						870,416
Allowance for loan losses		(15,917	)					(16,345	)
Total loans, net of allowance for loan losses and net deferred fees	$	977,928					$	854,071

Summary of Acquired Loans at Acquisition Date

Acquired loans presented below at December 31, 2013, and the acquisition date:

	December 31, 2013			February 1, 2013
Contractually required principal payments	$	44,358		$	65,532
Purchase adjustment for credit and interest rate		(1,341	)		(2,193	)
Balance of acquired loans	$	43,017		$	63,339

Summary of Allowance for Loan Losses Activity

A summary of the activity in the allowance for loan losses is as follows for the years ended 2013, 2012, and 2011:

	Twelve months ended December 31,
	2013			2012			2011
Balance, beginning of period	$	16,345		$	14,941		$	16,570
Provision charged to income		250			1,900			12,900
Loans charged against allowance		(2,088	)		(3,664	)		(15,804	)
Recoveries credited to allowance		1,410			3,168			1,275
Balance, end of period	$	15,917		$	16,345		$	14,941

Summary of Allowance for Credit Losses Activity by Loan Segment

A summary of the activity in the allowance for loan losses by major loan classification follows:

	For the year ended December 31, 2013
	Commercial and Other			Real Estate			Construction			Consumer			Unallocated			Total
Beginning balance	$	3,846		$	9,456		$	1,987		$	70		$	986		$	16,345
Charge-offs		(1,658	)		(407	)		—			(23	)		—			(2,088	)
Recoveries		982			360			60			8			—			1,410
Provision (reclassification)		1,943			(1,741	)		(554	)		13			589			250
Ending balance	$	5,113		$	7,668		$	1,493		$	68		$	1,575		$	15,917
	Balances as of December 31, 2013
	Commercial and Other			Real Estate			Construction			Consumer			Unallocated			Total
Ending allowance: collectively evaluated for impairment	$	5,095		$	7,667		$	1,455		$	68		$	1,575		$	15,860
Ending allowance: individually evaluated for impairment		18			1			38			—			—			57
Total ending allowance	$	5,113		$	7,668		$	1,493		$	68		$	1,575		$	15,917
Ending loan balance: collectively evaluated for impairment	$	386,332		$	495,924		$	98,627		$	3,878		$	—		$	984,761
Ending loan balance: individually evaluated for impairment		4,897			4,828			283			—			—			10,008
Total ending loan balance	$	391,229		$	500,752		$	98,910		$	3,878		$	—		$	994,769
	For the year ended December 31, 2012
	Commercial and Other			Real Estate			Construction			Consumer			Unallocated			Total
Beginning balance	$	2,776		$	8,267		$	2,104		$	87		$	1,707		$	14,941
Charge-offs		(1,401	)		(1,190	)		(1,054	)		(19	)		—			(3,664	)
Recoveries		1,917			55			1,188			8			—			3,168
Provision (reclassification)		554			2,324			(251	)		(6	)		(721	)		1,900
Ending balance	$	3,846		$	9,456		$	1,987		$	70		$	986		$	16,345
	Balances as of December 31, 2012
	Commercial and Other			Real Estate			Construction			Consumer			Unallocated			Total
Ending allowance: collectively evaluated for impairment	$	3,844		$	9,456		$	1,987		$	70		$	986		$	16,343
Ending allowance: individually evaluated for impairment		2			—			—			—			—			2
Total ending allowance	$	3,846		$	9,456		$	1,987		$	70		$	986		$	16,345
Ending loan balance: collectively evaluated for impairment	$	322,677		$	455,206		$	79,619		$	3,581		$	—		$	861,083
Ending loan balance: individually evaluated for impairment		4,039			6,034			101			—			—			10,174
Total ending loan balance	$	326,716		$	461,240		$	79,720		$	3,581		$	—		$	871,257
	For the year ended December 31, 2011
	Commercial and Other			Real Estate			Construction			Consumer			Unallocated			Total
Beginning balance	$	2,230		$	10,042		$	3,040		$	64		$	1,194		$	16,570
Charge-offs		(1,403	)		(5,555	)		(8,792	)		(54	)		—			(15,804	)
Recoveries		581			176			498			20			—			1,275
Provision (reclassification)		1,368			3,604			7,358			57			513			12,900
Ending balance	$	2,776		$	8,267		$	2,104		$	87		$	1,707		$	14,941

Credit Quality Indicators

The following tables present the Company’s loan portfolio information by loan type and credit grade at December 31, 2013, and December 31, 2012:

Credit Quality Indicators

As of December 31, 2013

	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals
Real estate loans
Multi-family residential	$	44,677	$	—	$	1,540	$	—	$	46,217
Residential 1-4 family		37,831		—		8,607		—		46,438
Owner-occupied commercial		239,539		4,278		5,494		—		249,311
Nonowner-occupied commercial		153,055		—		5,731		—		158,786
Total real estate loans		475,102		4,278		21,372		—		500,752
Construction
Multi-family residential		23,419		—		—		—		23,419
Residential 1-4 family		26,145		—		367		—		26,512
Commercial real estate		28,978		—		1,538		—		30,516
Commercial bare land and acquisition & development		11,223		—		250		—		11,473
Residential bare land and acquisition & development		4,346		—		2,644		—		6,990
Total construction loans		94,111		—		4,799		—		98,910
Commercial and other		378,828		—		12,401		—		391,229
Consumer		3,856		—		22		—		3,878
Totals	$	951,897	$	4,278	$	38,594	$	—	$	994,769

Credit Quality Indicators

As of December 31, 2012

	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals
Real estate loans
Multi-family residential	$	43,883	$	—	$	1,329	$	—	$	45,212
Residential 1-4 family		43,458		—		7,979		—		51,437
Owner-occupied commercial		208,713		—		10,563		—		219,276
Nonowner-occupied commercial		141,762		—		3,553		—		145,315
Total real estate loans		437,816		—		23,424		—		461,240
Construction
Multi-family residential		17,022		—		—		—		17,022
Residential 1-4 family		20,278		—		112		—		20,390
Commercial real estate		21,646		—		1,589		—		23,235
Commercial bare land and acquisition & development		10,668		—		—		—		10,668
Residential bare land and acquisition & development		5,449		—		2,956		—		8,405
Total construction loans		75,063		—		4,657		—		79,720
Commercial and other		317,250		—		9,466		—		326,716
Consumer		3,544		—		37		—		3,581
Totals	$	833,673	$	—	$	37,584	$	—	$	871,257

Aged Analysis of Dental Loans Receivable

The following tables present an aged analysis of past due and nonaccrual loans at December 31, 2013, and December 31, 2012:

Aged Analysis of Loans Receivable

As of December 31, 2013

	30-59 Days Past Due Still Accruing		60-89 Days Past Due Still Accruing		Greater Than 90 Days Still Accruing		Nonaccrual		Total Past Due and Nonaccrual		Total Current		Total Loans Receivable
Real estate loans
Multi-family residential	$	—	$	—	$	—	$	—	$	—	$	46,217	$	46,217
Residential 1-4 family		137		—		—		636		773		45,665		46,438
Owner-occupied commercial		488		—		—		1,685		2,173		247,138		249,311
Nonowner-occupied commercial		1,188		—		—		136		1,324		157,462		158,786
Total real estate loans		1,813		—		—		2,457		4,270		496,482		500,752
Construction
Multi-family residential		—		—		—		—		—		23,419		23,419
Residential 1-4 family		—		—		—		—		—		26,512		26,512
Commercial real estate		—		—		—		—		—		30,516		30,516
Commercial bare land and acquisition & development		—		—		—		—		—		11,473		11,473
Residential bare land and acquisition & development		—		—		—		—		—		6,990		6,990
Total construction loans		—		—		—		—		—		98,910		98,910
Commercial and other		436		—		—		2,886		3,322		387,907		391,229
Consumer		5		1		—		—		6		3,872		3,878
Total	$	2,254	$	1	$	—	$	5,343	$	7,598	$	987,171	$	994,769

Aged Analysis of Loans Receivable

As of December 31, 2012

	30-59 Days Past Due Still Accruing		60-89 Days Past Due Still Accruing		Greater Than 90 Days Still Accruing		Nonaccrual		Total Past Due and Nonaccrual		Total Current		Total Loans Receivable
Real estate loans
Multi-family residential	$	—	$	—	$	—	$	—	$	—	$	45,212	$	45,212
Residential 1-4 family		351		318		—		1,140		1,809		49,628		51,437
Owner-occupied commercial		—		—		—		3,805		3,805		215,471		219,276
Nonowner-occupied commercial		1,404		—		—		—		1,404		143,911		145,315
Total real estate loans		1,755		318		—		4,945		7,018		454,222		461,240
Construction
Multi-family residential		—		—		—		—		—		17,022		17,022
Residential 1-4 family		234		—		—		—		234		20,156		20,390
Commercial real estate		—		—		—		—		—		23,235		23,235
Commercial bare land and acquisition & development		—		—		—		—		—		10,668		10,668
Residential bare land and acquisition & development		—		—		—		101		101		8,304		8,405
Total construction loans		234		—		—		101		335		79,385		79,720
Commercial and other		264		—		—		4,315		4,579		322,137		326,716
Consumer		8		—		—		—		8		3,573		3,581
Total	$	2,261	$	318	$	—	$	9,361	$	11,940	$	859,317	$	871,257

Analysis of Impaired Loans

The following tables display an analysis of the Company’s impaired loans at December 31, 2013, and 2012:

Impaired Loan Analysis

As of December 31, 2013

	Recorded Investment With No Specific Allowance Valuation		Recorded Investment With Specific Allowance Valuation		Recorded Investment		Unpaid Principal Balance		Average Recorded Investment		Related Specific Allowance Valuation
Real estate
Multi-family residential		—		—		—		—		—		—
Residential 1-4 family		912		317		1,229		1,633		2,229		1
Owner-occupied commercial		2,767		—		2,767		3,000		3,359		—
Nonowner-occupied commercial		832		—		832		835		799		—
Total real estate loans		4,511		317		4,828		5,468		6,387		1
Construction
Multi-family residential		—		—		—		—		—		—
Residential 1-4 family		—		—		—		—		—		—
Commercial real estate		—		—		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—		133		—
Residential bare land and acquisition & development		—		283		283		373		413		38
Total construction loans		—		283		283		373		546		38
Commercial and other		4,368		529		4,897		10,627		4,100		18
Consumer		—		—		—		—		—		—
Total impaired loans	$	8,879	$	1,129	$	10,008	$	16,468	$	11,033	$	57

Impaired Loan Analysis

As of December 31, 2012

	Recorded Investment With No Specific Allowance Valuation		Recorded Investment With Specific Allowance Valuation		Recorded Investment		Unpaid Principal Balance		Average Recorded Investment		Related Specific Allowance Valuation
Real estate
Multi-family residential		—		—		—		—		—		—
Residential 1-4 family		1,447		—		1,447		2,032		3,086		—
Owner-occupied commercial		4,229		—		4,229		5,069		4,838		—
Nonowner-occupied commercial		358		—		358		358		165		—
Total real estate loans		6,034		—		6,034		7,459		8,089		—
Construction
Multi-family residential		—		—		—		—		—		—
Residential 1-4 family		—		—		—		—		544		—
Commercial real estate		—		—		—		—		1,219		—
Commercial bare land and acquisition & development		—		—		—		—		5,621		—
Residential bare land and acquisition & development		101		—		101		173		1,024		—
Total construction loans		101		—		101		173		8,408		—
Commercial and other		3,921		118		4,039		9,546		5,204		2
Consumer		—		—		—		—		—		—
Total impaired loans	$	10,056	$	118	$	10,174	$	17,178	$	21,701	$	2

Schedule of Troubled Debt Restructurings by Class

The following table displays the Company’s TDRs by class at December 31, 2013, and 2012:

	Troubled Debt Restructurings as of
	December 31, 2013				December 31, 2012
	Number of Contracts		Outstanding Recorded Investment		Number of Contracts		Outstanding Recorded Investment
Real estate
Multifamily residential		—	$	—		—	$	—
Residential 1-4 family		7		819		8		565
Owner-occupied commercial		5		1,949		5		2,095
Non owner-occupied commercial		2		714		1		140
Total real estate loans		14		3,482		14		2,800
Construction
Multifamily residential		—		—		—		—
Residential 1-4 family		—		—		—		—
Commercial real estate		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—
Residential bare land and acquisition & development		—		—		5		101
Total construction loans		—		—		5		101
Commercial and other		10		2,379		8		589
Consumer		—		—		—		—
		24	$	5,861		27	$	3,490

Schedule of Non-Covered Restructured Loans

The following tables present newly non-covered restructured loans that occurred during the twelve months ended December 31, 2013, and 2012, respectively:

	Troubled Debt Restructurings
	Identified during the twelve months ended December 31, 2013
	Rate Modification		Term Modification		Interest Only Modification		Combination Modification
Real estate
Multifamily residential	$	—	$	—	$	—	$	—
Residential 1-4 family		317		—		—		—
Owner-occupied commercial		—		—		—		—
Non owner-occupied commercial		578		—		—		—
Total real estate loans		895		—		—		—
Construction
Multifamily residential		—		—		—		—
Residential 1-4 family		—		—		—		—
Commercial real estate		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—
Residential bare land and acquisition & development		—		—		—		—
Total construction loans		—		—		—		—
Commercial and other		—		773		524		674
Consumer		—		—		—		—
	$	895	$	773	$	524	$	674
	Troubled Debt Restructurings
	Identified during the twelve months ended December 31, 2012
	Rate Modification		Term Modification		Interest Only Modification		Combination Modification
Real estate
Multifamily residential	$	—	$	—	$	—	$	—
Residential 1-4 family		—		—		121		—
Owner-occupied commercial		—		112		—		303
Non owner-occupied commercial		—		—		—		—
Total real estate loans		—		112		121		303
Construction
Multifamily residential		—		—		—		—
Residential 1-4 family		—		—		—		—
Commercial real estate		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—
Residential bare land and acquisition & development		—		127		—		—
Total construction loans		—		127		—		—
Commercial and other		—		228		230		69
Consumer		—		—		—		—
	$	—	$	467	$	351	$	372

Schedule of Troubled Debt Restructurings that Subsequently Defaulted

The following table presents loans receivable modified as troubled debt restructurings that subsequently defaulted within twelve months during the period:

	Troubled Debt Restructurings
	That Subsequently Defaulted within the
	12 Month Period Ended December 31,
	2013				2012
	Number of Contracts		Recorded Investment		Number of Contracts		Recorded Investment
Real estate
Multifamily residential		—	$	—		—	$	—
Residential 1-4 family		—		—		2		340
Owner-occupied commercial		1		303		1		411
Non owner-occupied commercial		1		136		—		—
Total real estate loans		2		439		3		751
Construction
Multifamily residential		—		—		—		—
Residential 1-4 family		—		—		—		—
Commercial real estate		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—
Residential bare land and acquisition & development		—		—		—		—
Total construction loans		—		—		—		—
Commercial and other		3		144		1		194
Consumer		—		—		—		—
		5	$	583		4	$	945

Dental Loan [Member]

Credit Quality Indicators

The following tables present the Company’s dental loan portfolio information by market and credit grade at December 31, 2013, and 2012:

Dental Credit Quality Indicators As of December 31, 2013
	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals
Local	$	172,708	$	—	$	5,965	$	—	$	178,673
National		127,842		—		753		—		128,595
Total	$	300,550	$	—	$	6,718	$	—	$	307,268
As of December 31, 2012
	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals
Local	$	184,872	$	—	$	7,036	$	—	$	191,908
National		78,480		—		394		—		78,874
Total	$	263,352	$	—	$	7,430	$	—	$	270,782

Aged Analysis of Dental Loans Receivable

The following tables present an aged analysis of the dental loans by market, including nonaccrual loans at December 31, 2013, and 2012:

Aged Analysis of Dental Loans Receivable

As of December 31, 2013

	30-59 Days Past Due Still Accruing		60-89 Days Past Due Still Accruing		Greater Than 90 Days Still Accruing		Nonaccrual		Total Past Due and Nonaccrual		Total Current		Total Loans Receivable
Local	$	—	$	—	$	—	$	2,176	$	2,176	$	176,497	$	178,673
National		—		—		—		224		224		128,371		128,595
Total	$	—	$	—	$	—	$	2,400	$	2,400	$	304,868	$	307,268

Aged Analysis of Dental Loans Receivable

As of December 31, 2012

	30-59 Days Past Due Still Accruing		60-89 Days Past Due Still Accruing		Greater Than 90 Days Still Accruing		Nonaccrual		Total Past Due and Nonaccrual		Total Current		Total Loans Receivable
Local	$	—	$	—	$	—	$	2,499	$	2,499	$	189,409	$	191,908
National		—		—		—		—		—		78,874		78,874
Total	$	—	$	—	$	—	$	2,499	$	2,499	$	268,283	$	270,782

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation – The consolidated financial statements include the accounts of Pacific Continental Corporation (the “Company”), a bank holding company, and its wholly owned subsidiary, Pacific Continental Bank (the “Bank”) and the Bank’s wholly owned subsidiaries, PCB Service Corporation (which previously owned and operated bank-related real estate but is currently inactive) and PCB Loan Services Corporation (which previously owned and operated certain repossessed or foreclosed collateral but is currently inactive). The Bank provides commercial banking, financing, mortgage lending and other services through fourteen offices located in Western Oregon and Western Washington. The Bank also operates two loan production offices in Tacoma, Washington and Denver, Colorado. All significant intercompany accounts and transactions have been eliminated in consolidation.

In November 2005, the Company formed a wholly owned Delaware statutory business trust subsidiary, Pacific Continental Corporation Capital Trust (the “Trust”) which issued $8,248 of guaranteed undivided beneficial interests in the Pacific Continental’s Junior Subordinated Deferrable Interest Debentures (“Trust Preferred Securities”). Pacific Continental has not consolidated the accounts of the Trust in its consolidated financial statements in accordance with generally accepted accounting principles, (“GAAP”). As a result, the junior subordinated debentures issued by Pacific Continental to the issuer trust, totaling $8,248, are reflected on Pacific Continental’s consolidated balance sheet at December 31, 2013, under the caption “Junior Subordinated Debentures.” Pacific Continental also recognized its $248 investment in the Trust, which is recorded among “Other Assets” in its consolidated balance sheet at December 31, 2013.

Use of Estimates – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimations made by management involve fair value calculations pertaining to financial assets and liabilities, the calculation of the allowance for loan losses, and the impairment assessment for goodwill.

Cash and Cash Equivalents – For purposes of reporting cash flows, cash and cash equivalents includes cash on hand, amounts due from or deposited with banks, interest-bearing balances due from banks, and federal funds sold. Generally, federal funds are sold for one-day periods.

The Company is required to maintain certain reserves with the Federal Reserve Bank as defined by regulation. Such reserves totaling $1,430 and $1,061 were maintained within the Company’s cash balances at December 31, 2013, and 2012, respectively.

Securities Available-for-Sale – Securities available-for-sale are held for indefinite periods of time and may be sold in response to movements in market interest rates, changes in the maturity or mix of Company assets and liabilities or demand for liquidity. Management determines the appropriate classification of securities at the time of purchase. The Company classified all of its securities as available-for-sale throughout 2013 and 2012.

Securities classified as available-for-sale are reported at estimated fair value based on available market prices. Net unrealized gains and losses are included in other comprehensive income or loss on an after-tax basis. Impaired securities are assessed quarterly for the presence of other-than-temporary impairment (“OTTI”). OTTI is considered to have occurred, (1) if we intend to sell the security, (2) if it is “more likely than not” we will be required to sell the security before recovery of its amortized cost basis, or (3) the present value of expected cash flows is not sufficient to recover the entire amortized cost basis. The “more likely than not” criteria is a lower threshold than the “probable” criteria used under previous guidance.

When OTTI is identified, the amount of the impairment is bifurcated into two components: the amount representing credit loss and the amount related to all other factors. The amount representing credit loss is recognized against earnings as a realized loss and the amount representing all other factors is recognized in other comprehensive income as an unrealized loss. Gains and losses on the sale of available-for-sale securities are determined using the specific-identification method. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Interest income on securities available-for-sale is included in income using the level yield method.

Loans Held-for-Sale and Mortgage Banking Activities – The Company historically originated residential mortgage loans for resale in the secondary market. Sales were without recourse and the Company generally did not retain mortgage servicing rights. During first quarter 2012 the company closed the mortgage division and no additional loans held-for-sale were generated during the remainder of 2012 and 2013.

Loans, Income Recognition, and the Allowance for Loan Losses – Loans are stated at the amount of unpaid principal net of loan premiums or discounts for purchased loans, net deferred loan origination fees, discounts associated with retained portions of loans sold, and an allowance for loan losses. Interest on loans is calculated using the simple-interest method on daily balances of the principal amount outstanding. Loan origination fees, net of origination costs and discounts, are amortized over the lives of the loans as adjustments to yield.

Nonaccrual Loans

Accrual of interest is discontinued on contractually delinquent loans when management believes that, after considering economic and business conditions and collection efforts, the borrower’s financial condition is such that collection of principal or interest is doubtful. At a minimum, loans that are past due as to maturity or payment of principal or interest by 90 days or more are placed on nonaccrual status, unless such loans are well-secured and in the process of collection. Interest income is subsequently recognized only to the extent cash payments are received satisfying all delinquent principal and interest amounts, and the prospects for future payments in accordance with the loan agreement appear relatively certain. In accordance with GAAP, payments received on nonaccrual loans are applied to the principal balance and no interest income is recognized.

Allowance for Loan Losses Methodology

Management provides for possible loan losses by maintaining an allowance. The allowance for loan losses is established through a provision for loan losses charged to expense. Loans are charged against the allowance when management believes the collection of principal or interest is unlikely. The allowance is an amount that management considers adequate to absorb possible losses on existing loans based on its evaluation of the collectability of those loans and prior loss experience. Management’s evaluations take into consideration such factors as changes in the size and nature of the loan portfolio, the overall portfolio quality, the financial condition of borrowers, the level of nonperforming loans, the Company’s historical loss experience, the estimated value of underlying collateral, and current economic conditions that may affect the borrower’s ability to pay. This evaluation is inherently subjective as it requires estimates that are susceptible to significant subsequent revision as more information becomes available.

The allowance consists of general, specific and unallocated components. The general component covers all loans not specifically identified for impairment testing. The specific component relates to loans that are individually assessed for impairment. The combined general and specific components of the allowance constitute the Company’s allocated allowance for loan losses. An unallocated allowance may be maintained to provide for credit losses inherent in the loan portfolio that may not have been contemplated in the general risk factors or the specific allowance analysis.

The Company performs regular credit reviews of the loan portfolio to determine the credit quality of the portfolio and the Company’s adherence to underwriting standards. When loans are originated, they are assigned a risk rating that is reassessed periodically during the terms of the loans through the credit review process. The risk rating categories constitute a primary factor in determining an appropriate amount for the general allowance for loan losses. The general allowance is calculated by applying risk factors to pools of outstanding loans. Risk factors are assigned based on management’s evaluation of the losses inherent within each identified loan category. Loan categories with greater risk of loss are therefore assigned a higher risk factor. The Company’s Asset and Liability Committee (“ALCO”) and Board of Directors are responsible for, among other things, regularly reviewing the allowance for loan losses methodology, including loss factors, and ensuring that it is designed and applied in accordance with generally accepted accounting principles.

Regular credit reviews of the portfolio are performed to identify loans that are considered potentially impaired. Potentially impaired loans are referred to the ALCO Committee which reviews loans recommended for impairment. A loan is considered impaired when, based on current information and events, the Company is unlikely to collect all principal and interest due according to the terms of the loan agreement. When a loan is deemed to be impaired, the amount of the impairment is measured using discounted cash flows except when the sole remaining source of the repayment is the liquidation of the collateral. In these cases, the current fair value of the collateral, less selling costs is used. Impairment is recognized as a specific component within the allowance for loan losses if the value of the impaired loan is less than the recorded investment in the loan. When the amount of the impairment represents a confirmed loss, it is charged off against the allowance for loan losses. Loans specifically reviewed for impairment are excluded from the general allowance calculation to prevent double-counting the loss exposure. The Company’s ALCO Committee reviews loans recommended for impaired status and those recommended to be removed from impaired status. The Company’s ALCO Committee and Board provide oversight of the allowance for loan losses process and review and approve the allowance methodology on a quarterly basis.

There have been no significant changes to the Company’s loan loss allowance methodology or policies in the periods presented.

Charge off Methodology

When it becomes evident that a loan has a probable loss and is deemed uncollectable, regardless of delinquent status, the loan is charged off. A partial charge-off will occur to the extent of the portion of the loan that is not well secured and is in the process of collection. Additionally, a partial charge-off will occur to the extent of the portion of the loan that is not guaranteed by a federal or state government agency and is in the process of collection. In circumstances whereby it is evident that a government guarantee will not be honored, the loan will be charged-off to the extent of the portion of the loan/lease that is not well secured. Commercial overdrafts will be charged-off within the month the delinquent checking account becomes 90 days delinquent.

Troubled Debt Restructuring

Loans are reported as a troubled debt restructuring when the Company grants a concession to a borrower experiencing financial difficulties that it would not otherwise consider. Examples of such concessions include a reduction in the loan rate, forgiveness of principal or accrued interest, extending the maturity date, or providing a lower interest rate than would be normally available for a transaction of similar risk. The Company will undertake a restructuring only when it occurs in ways which improve the likelihood that the credit will be repaid in full under the modified terms and in accordance with a reasonable repayment schedule.

Off-Balance Sheet Credit Exposure – A reserve for unfunded commitments is maintained at a level that, in the opinion of management, is adequate to absorb probable losses associated with the Company’s commitment to lend funds under existing agreements such as letters or lines of credit. Management determines the adequacy of the reserve for unfunded commitments based upon reviews of individual credit facilities, current economic conditions, the risk characteristics of the various categories of commitments and other relevant factors. These factors include the quality of the current loan portfolio: the trend in the loan portfolio’s risk ratings, current economic conditions, loan concentrations, loan growth rates, past-due and nonperforming trends, evaluation of specific loss estimates for all significant problem loans, historical charge-off and recovery experience, and other pertinent information. The reserve is based on estimates and ultimate losses may vary from the current estimates. These estimates are evaluated on a regular basis and, as adjustments become necessary, they are reported in earnings in the periods in which they become known. Draws on unfunded commitments that are considered uncollectible at the time funds are advanced are charged to the allowance. Provisions for unfunded commitment losses and recoveries on loans commitments previously charged-off are added to the reserve for unfunded commitments, which is included in the Other Liabilities section of the consolidated balance sheets. At December 31, 2013, the reserve for unfunded loan commitments totaled $226 compared to $170 at December 31, 2012.

Foreclosed Assets – Assets acquired through foreclosure, or deeds in lieu of foreclosure, are initially recorded at fair value less the estimated cost of disposal, at the date of foreclosure. Any excess of the loan’s balance over the fair value of the foreclosed collateral is charged to the allowance for loan losses.

Improvements to foreclosed assets are capitalized to the extent that the improvements increase the fair value of the assets. Expenditures for routine maintenance and repairs of foreclosed assets are charged to expense as incurred. Management performs periodic valuations of foreclosed assets and may adjust the values to the lower of carrying amount or fair value less the estimated costs to sell. Write downs to net realizable value, if any, and disposition gains or losses are included in noninterest income or expense.

Federal Home Loan Bank Stock – The investment in Federal Home Loan Bank (“FHLB”) stock is carried at par value, which approximates its fair value. As a member of the FHLB system, the Company is required to maintain a minimum level of investment in FHLB stock based on specific percentages of its outstanding mortgages, total assets or FHLB advances.

FHLB stock is generally viewed as long-term investment. Accordingly, when evaluating FHLB stock for impairment its value is determined based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. The determination of whether the decline affects the ultimate recoverability is influenced by criteria such as the following:

• The significance of the decline in net assets of the FHLBs as compared to the capital stock amount for the FHLBs and the length of time this situation has persisted.

• Commitments by the FHLBs to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLBs.

• The impact of legislative and regulatory changes on the institution and, accordingly, on the customer base of the FHLBs.

• The liquidity position of the FHLBs.

Property, Plant and Equipment – Property is stated at cost, net of accumulated depreciation and amortization. Additions, betterments and replacements of major units are capitalized. Expenditures for normal maintenance, repairs and replacements of minor units are charged to expense as incurred. Gains or losses realized from sales or retirements are reflected in operations currently.

Depreciation and amortization is computed by the straight-line method over the estimated useful lives of the assets. Estimated useful lives are 30 to 40 years for buildings, 3 to 10 years for furniture and equipment, and up to the lesser of the useful life or lease term for leasehold improvements.

Goodwill and Intangible Assets – Intangible assets are comprised of goodwill and other intangibles acquired in business combinations. Goodwill and intangible assets with indefinite useful lives are not amortized. Intangible assets with definite useful lives are amortized to their estimated residual values over their respective estimated useful lives, and also reviewed for impairment. The Company performs a goodwill impairment analysis on an annual basis as of December 31. Additionally, the Company performs a goodwill impairment evaluation on an interim basis when events or circumstances indicate impairment potentially exists. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others, a significant decline in our expected future cash flows; a sustained, significant decline in our stock price and market capitalization; a significant adverse change in legal factors or in the business climate; adverse action or assessment by a regulator; and unanticipated competition.

Bank-owned Life Insurance – Bank-owned life insurance is recorded at the estimated cash-surrender value of the policies. Increases in the cash-surrender value are recorded as noninterest income.

Advertising – Advertising costs are charged to expense during the year in which they are incurred. Advertising expenses were $894, $779, and $720, for the years ended December 31, 2013, 2012 and 2011, respectively.

Income Taxes – Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are calculated using tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established to reduce the net carrying amount of deferred tax assets if it is determined to be more likely than not that all or some of the potential deferred tax asset will not be realized.

The Company follows the provisions of the Financial Accounting Standards Boards’ (“FASB”) ASC 740, “Income Taxes,” relating to accounting for uncertain tax positions. Uncertain tax positions may arise when the Company takes or expects to take a tax position that is ultimately disallowed by the relevant taxing authority. The Company files income tax returns with the Internal Revenue Service and any states in which it has identified that it has nexus. Tax returns for the years subsequent to 2009 remain open to examination by the taxing jurisdictions. Management reviews the Company’s balance sheet, income statement, income tax provision and income tax returns as well as the permanent and temporary adjustments affecting current and deferred income taxes quarterly and assesses whether uncertain tax positions exist. At December 31, 2013, management does not believe that any uncertain tax positions exist, that are not more-likely-than-not, sustainable upon examination. The Company’s policy with respect to interest and penalties ensuing from income tax settlements is to recognize them as noninterest expense.

Earnings Per Share – Basic earnings per share are computed by dividing net income by the weighted average number of shares outstanding during the period. Diluted earnings per share include the effect of common stock equivalents that would arise from the exercise of stock options discussed in Note 15. Weighted shares outstanding are adjusted retroactively for the effect of stock dividends.

Weighted average shares outstanding at December 31, are as follows:

	2013		2012		2011
Basic		17,871,439		18,085,607		18,427,657
Common stock equivalents attributable to stock-based compensation plans		188,484		152,553		91,890
Diluted		18,059,923		18,238,160		18,519,547

Equity grants, including options and Stock Appreciation Rights, for 368,705, 452,480 and 266,859 shares of common stock were excluded from the diluted earnings per share calculation in 2013, 2012 and 2011, respectively, due to their anti-dilutive effect.

Share-Based Payment Plans – Financial accounting standards require companies to measure and recognize compensation expense for all share-based payments at the grant date based on the fair value of the award, as defined in FASB ASC 718, “Stock Compensation,” and include such costs as an expense in their income statements over the requisite service (vesting) period. The Company estimates the impact of forfeitures based on historical experience with previously granted share-based compensation awards, and considers the impact of the forfeitures when determining the amount of expense to record. The Company generally issues new shares of common stock to satisfy stock option exercises. The Company uses the Black-Scholes option pricing model to measure fair value. No options or Stock Appreciation Rights (“SARs”) were granted in 2012 or 2013. ISOs, nonqualified stock options, restricted stock, restricted stock units, and stock-settled SARs are recognized as equity-based awards and compensation expense is recorded to the income statement over the requisite vesting period based on the grant-date fair value. SARs settled in cash are recognized on the balance sheet as liability-based awards. The grant-date fair value of liability-based awards vesting in the current period, along with the change in fair value of the awards during the period, are recognized as compensation expense and as an adjustment to the recorded liability.

Fair Value Measurements – Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820, “Fair Value Measurements,” establishes a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable. Observable inputs reflect market-derived or market-based information obtained from independent sources while unobservable inputs reflect our estimates about market data. In general, fair values determined by Level 1 inputs utilize quoted prices for identical assets or liabilities traded in active markets that the Company has the ability to access. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Recently Issued Accounting Pronouncements –

In July 2012, the FASB issued ASU No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment. With this update, a company testing indefinite-lived intangibles for impairment now has the option to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount in accordance with current guidance. An entity also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. An entity will be able to resume performing the qualitative assessment in any subsequent period. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after September 15, 2012. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The Update requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component and to present either on the face of the statement where net income is presented, or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required to be reclassified to net income in its entirety in the same reporting period. The amendments are effective for annual and interim reporting periods beginning on or after December 15, 2013. The Company is currently in the process of evaluating the ASU but does not expect it will have a material impact on the Company’s consolidated financial statements.

In July 2013, the FASB issued ASU No. 2013-10, Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes . ASU No. 2013-10 permits the use of the Fed Funds Effective Swap Rate (OIS) to be used as a U.S. benchmark interest rate for hedge account purposes. The amendment is effective prospectively for qualifying new or redesiginated hedging relationships entered into on or after July 17, 2013. The adoption of ASU No. 2013-10 did not have a material impact on the Company’s consolidated financial statements.

In July 2013, the FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU No. 2013-11 requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. No new recurring disclosures are required. The amendments are effective for annual and interim reporting periods beginning on or after December 15, 2013 and are to be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The adoption of ASU No. 2013-11 is not expected to have a material impact on the Company’s consolidated financial statements.

In January 2014, the FASB issued ASU No. 2014-01, Accounting for Investments in Qualified Affordable Housing Projects. ASU 2014-04 permit an entity to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognize the net investment performance in the income statement as a component of income tax expense (benefit). The amendments are effective for annual and interim reporting periods beginning on or after December 15, 2014 and should be applied prospectively. The Company is currently reviewing the requirements of ASU No. 2014-01, but does not expect the ASU to have a material impact on the Company’s consolidated financial statements.

In January 2014, the FASB issued ASU No. 2014-04, Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon foreclosure. ASU 2014-04 clarifies that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments are effective for annual and interim reporting periods beginning on or after December 15, 2014 and can be applied with a modified retrospective transition method or prospectively. The adoption of ASU No. 2014-04 is not expected to have a material impact on the Company’s consolidated financial statements.

Subsequent events – The Company has evaluated events and transactions subsequent to December 31, 2013 for potential recognition or disclosure.

Reclassifications – Certain amounts contained in the 2012 and 2011 consolidated financial statements have been reclassified where appropriate to conform to the financial statement presentation used in 2013. These reclassifications had no effect on previously reported net income.

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Dental Loan Portfolio (Tables)

12 Months Ended

Dec. 31, 2013

Text Block [Abstract]

Major Classifications of Dental Loans

Major classifications of Dental Loans, at December 31, 2013, and 2012, are as follows:

	December 31,
	2013		2012
Real estate secured loans:
Owner-occupied commercial	$	59,279	$	59,327
Other dental real estate loans		1,967		3,103
Total permanent real estate loans		61,246		62,430
Dental construction loans		5,810		2,093
Total real estate loans		67,056		64,523
Commercial loans		240,212		206,259
Gross loans	$	307,268	$	270,782

Dental Loan Total by Market

The following table represents the dental lending by borrower location:

	December 31,
	2013		2012
Local	$	178,673	$	191,908
National		128,595		78,874
Total	$	307,268	$	270,782

Dental Portfolio Allowance Activity

The specific component is based upon Dental Loans individually evaluated for impairment.

	Twelve months ended December 31,
	2013			2012
Balance, beginning of period	$	2,683		$	1,824
Provision charged to income		2,208			1,315
Loans charged against allowance		(1,232	)		(488	)
Recoveries credited to allowance		71			32
Balance, end of period	$	3,730		$	2,683

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Income Taxes - Components of Deferred Tax Assets and Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Income Tax Disclosure [Abstract]
Allowance for loan losses	$ 6,916	$ 6,508
Basis adjustments on loans	2,252	1,720
Reserve for self-funded insurance	180	183
Oregon purchased tax credits	1,669	2,951
Nonqualified stock options	1,278	957
Accrued compensation	724	647
OTTI credit impairment	89	80
Nonaccrual loan interest	52	21
Net unrealized loss on securities	95
Other	61	47
Total deferred tax assets	13,316	13,114
Federal Home Loan Bank stock dividends	593	595
Excess tax over book depreciation	1,299	1,446
Prepaid expenses	345	362
NWBF acquisition adjustments	225
Loan origination fees	1,046	881
Net unrealized gains on Swap	158
Net unrealized gains on securities	52	3,600
Total deferred tax liabilities	3,718	6,884
Net deferred tax assets	$ 9,598	$ 6,230

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Transactions with Related Parties (Tables)

12 Months Ended

Dec. 31, 2013

Related Party Transactions [Abstract]

Schedule of Activities in Related Party Loans

Activity with respect to these loans during the year ended December 31 was as follows:

	2013			2012			2011
Balance, beginning of year	$	133		$	994		$	993
Additions or renewals		68			49			204
Amounts collected		(101	)		(16	)		(203	)
No longer related party		—			(894	)		—
Balance, end of year	$	100		$	133		$	994

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Loans, Allowance for Loan Losses, and Credit Quality Indicators - Summary of Acquired Loans at Acquisition Date (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Feb. 01, 2013
Receivables [Abstract]
Contractually required principal payments	$ 44,358	$ 65,532
Purchase adjustment for credit and interest rate	(1,341)	(2,193)
Balance of acquired loans	$ 43,017	$ 63,339

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Goodwill and Intangible Assets - Summary of Changes in Goodwill and Core Deposit Intangible Asset (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill	$ 22,881	$ 22,031	$ 22,031
Core deposit intangible asset	845	204	427
Amortization	(110)	(204)	(223)
Total goodwill and intangible assets	$ 23,616	$ 22,031	$ 22,235

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
ASSETS
Cash and due from banks	$ 21,053	$ 28,607
Interest-bearing deposits with banks	55	94
Total cash and cash equivalents	21,108	28,701
Securities available-for-sale	347,386	389,885
Loans, less allowance for loan losses and net deferred fees	977,928	854,071
Interest receivable	4,703	4,520
Federal Home Loan Bank stock	10,425	10,462
Property and equipment, net of accumulated depreciation	18,836	19,238
Goodwill and intangible assets	23,616	22,031
Deferred tax asset	9,598	6,230
Other real estate owned	16,355	17,972
Prepaid FDIC assessment		1,746
Bank-owned life insurance	16,136	15,621
Other assets	3,635	3,010
Total assets	1,449,726	1,373,487
Deposits
Noninterest-bearing demand	366,891	329,825
Savings and interest-bearing checking	559,632	554,693
Time $100,000 and over	79,081	73,610
Other time	85,377	88,026
Total deposits	1,090,981	1,046,154
Federal funds and overnight funds purchased	5,150	11,570
Federal Home Loan Bank borrowings	160,000	118,000
Junior subordinated debentures	8,248	8,248
Accrued interest and other payables	6,163	6,134
Total liabilities	1,270,542	1,190,106
Commitments and Contingencies (Note 17)
Shareholders' equity
Common stock, no par value, shares authorized: 50,000,000; shares issued and outstanding: 17,891,687 at December 31, 2013, and 17,835,088 at December 31, 2012	133,835	133,017
Retained earnings	45,250	44,533
Accumulated other comprehensive income	99	5,831
Total shareholders' equity	179,184	183,381
Total liabilities and shareholders' equity	$ 1,449,726	$ 1,373,487

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Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013 Branch_office	Dec. 31, 2012	Dec. 31, 2011
Property, Plant and Equipment [Line Items]
Number of offices in Western Oregon and Western Washington	14
Number of offices loan production offices in Tacoma, Washington and Denver, Colorado	2
Junior subordinated debentures	$ 8,248	$ 8,248
Investment in the Trust	248
Reserves with Federal Reserve Bank	1,430	1,061
Past due loans, nonaccrual period	90 days
Commercial overdrafts charge-off period	90 days
Reserve for unfunded loan commitments	226	170
Advertising expenses	$ 894	$ 779	$ 720
Common stock were excluded from diluted earnings per share, anti-dilutive effect	368,705	452,480	266,859
Minimum [Member] | Buildings [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	30 years
Minimum [Member] | Furniture and equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	3 years
Maximum [Member] | Buildings [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	40 years
Maximum [Member] | Furniture and equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	10 years

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Fair Value - Fair Value Hierarchy for Assets and Liabilities Not Measured at Fair Value (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Financial assets:
Cash and cash equivalents	$ 21,108	$ 28,701
Loans	994,769	870,416
Accrued interest receivable	4,703	4,520
Federal Home Loan Bank stock	10,425	10,462
Bank-owned life insurance	16,136	15,621
Swap Derivative	405
Financial liabilities:
Deposits	1,090,981	1,046,154
Federal funds and overnight funds purchased	5,150	11,570
Federal Home Loan Bank borrowings	160,000	118,000
Junior subordinated debentures	8,248	8,248
Accrued interest payable	193	218
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Financial assets:
Cash and cash equivalents	21,108	28,701
Loans
Accrued interest receivable	4,703	4,520
Federal Home Loan Bank stock	10,425	10,462
Bank-owned life insurance	16,136	15,621
Swap Derivative	405
Financial liabilities:
Deposits
Federal funds and overnight funds purchased	5,150	11,570
Federal Home Loan Bank borrowings
Junior subordinated debentures
Accrued interest payable	193	218
Significant Other Observable Inputs (Level 2) [Member]
Financial assets:
Cash and cash equivalents
Loans	980,334	871,802
Accrued interest receivable
Federal Home Loan Bank stock
Bank-owned life insurance
Swap Derivative
Financial liabilities:
Deposits	1,091,355	1,046,165
Federal funds and overnight funds purchased
Federal Home Loan Bank borrowings	160,984	119,517
Junior subordinated debentures	2,265	2,193
Accrued interest payable
Significant Unobservable Inputs (Level 3) [Member]
Financial assets:
Cash and cash equivalents
Loans
Accrued interest receivable
Federal Home Loan Bank stock
Bank-owned life insurance
Swap Derivative
Financial liabilities:
Deposits
Federal funds and overnight funds purchased
Federal Home Loan Bank borrowings
Junior subordinated debentures
Accrued interest payable

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Consolidated Statements of Changes in Shareholders' Equity (USD $) In Thousands, except Share data	Total	Common Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]
Balance at Dec. 31, 2010	$ 172,238	$ 137,062	$ 33,969	$ 1,207
Balance, shares at Dec. 31, 2010		18,415,132
Net income	5,341		5,341
Other comprehensive income (loss), net of tax	2,347			2,347
Comprehensive income	7,688
Director Stock issuance	56	56
Director Stock issuance, shares		5,952
Stock options exercised and related tax benefit	103	103
Stock options exercised and related tax benefit, shares		14,000
Stock options exercised, shares	14,000
Net share-based compensation	623	623
Cash dividends	(1,842)		(1,842)
Balance at Dec. 31, 2011	178,866	137,844	37,468	3,554
Balance, shares at Dec. 31, 2011		18,435,084
Net income	12,653		12,653
Other comprehensive income (loss), net of tax	2,277			2,277
Comprehensive income	14,930
Director Stock issuance	70	70
Director Stock issuance, shares		7,987
Stock options exercised and related tax benefit	78	78
Stock options exercised and related tax benefit, shares		10,666
Stock options exercised	130	130
Stock options exercised, shares	28,999	18,333
Shares exchanged in payment of option exercise consideration	(129)	(129)
Shares exchanged in payment of option exercise consideration, shares		(14,166)
Stock repurchased	(5,676)	(5,676)
Stock repurchased, shares		(641,637)
Net share-based compensation	700	700
Share based compensation net of vested RSUs and SARs surrendered to cover tax consequences, shares		18,821
Cash dividends	(5,588)		(5,588)
Balance at Dec. 31, 2012	183,381	133,017	44,533	5,831
Balance, shares at Dec. 31, 2012		17,835,088
Net income	13,767		13,767
Other comprehensive income (loss), net of tax	(5,732)			(5,732)
Comprehensive income	8,035
Director Stock issuance	110	110
Director Stock issuance, shares		10,179
Stock options exercised, shares
Net share-based compensation	708	708
Share based compensation net of vested RSUs and SARs surrendered to cover tax consequences, shares		46,420
Cash dividends	(13,050)		(13,050)
Balance at Dec. 31, 2013	$ 179,184	$ 133,835	$ 45,250	$ 99
Balance, shares at Dec. 31, 2013		17,891,687

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Commitments and Contingencies - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013 Officers
Commitments And Contingencies Disclosure [Abstract]
Number of key executive officers in Executive Employment Agreements	2
Minimum aggregate annual base salaries under Executive Employment Agreements	$ 704,000
Number of Executive Employment Agreements with key executive officers	2
Employment agreements expiration date	2014

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Loans, Allowance for Loan Losses, and Credit Quality Indicators - Schedule of Troubled Debt Restructurings by Class (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013 Contract	Dec. 31, 2012 Contract
Financing Receivable, Modifications [Line Items]
Number of Contracts	24	27
Outstanding Recorded Investment	$ 5,861	$ 3,490
Commercial and other [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	10	8
Outstanding Recorded Investment	2,379	589
Consumer loans [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts
Outstanding Recorded Investment
Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	14	14
Outstanding Recorded Investment	3,482	2,800
Real Estate [Member] | Multi-family residential [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts
Outstanding Recorded Investment
Real Estate [Member] | Residential 1-4 family [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	7	8
Outstanding Recorded Investment	819	565
Real Estate [Member] | Owner-occupied commercial [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	5	5
Outstanding Recorded Investment	1,949	2,095
Real Estate [Member] | Nonowner-occupied commercial [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	2	1
Outstanding Recorded Investment	714	140
Construction [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts		5
Outstanding Recorded Investment		101
Construction [Member] | Multi-family residential [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts
Outstanding Recorded Investment
Construction [Member] | Residential 1-4 family [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts
Outstanding Recorded Investment
Construction [Member] | Aged Analysis of Loans Receivable [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts
Outstanding Recorded Investment
Construction [Member] | Commercial bare land and acquisition & development [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts
Outstanding Recorded Investment
Construction [Member] | Residential bare land and acquisition & development [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts		5
Outstanding Recorded Investment		$ 101

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Fair Value - Reconciliation of Assets Measured at Fair Value on Recurring Basis (Detail) (Private-label mortgage-backed securities [Member], Significant Unobservable Inputs (Level 3) [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Private-label mortgage-backed securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning Balance	$ 1,682	$ 1,719
Transfers into Level 3	332
Transfers out of Level 3
Included in earnings
Included in other comprehensive income	80	320
Paydowns	(308)	(357)
Purchases, issuances, sales, and settlements
Purchases
Issuances
Sales
Settlements
Ending Balance	$ 1,786	$ 1,682

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Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Changes in Goodwill and Core Deposit Intangible Asset

The following table summarizes the changes in the Company’s goodwill and core deposit intangible asset for the three years ended December 31:

	December 31,
	2013			2012			2011
Goodwill	$	22,881		$	22,031		$	22,031
Core deposit intangible asset		845			204			427
Amortization		(110	)		(204	)		(223	)
Total goodwill and intangible assets	$	23,616		$	22,031		$	22,235

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Dental Loan Portfolio - Dental Portfolio Allowance Activity (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning of period	$ 16,345	$ 14,941	$ 16,570
Provision charged to income	250	1,900	12,900
Loans charged against allowance	(2,088)	(3,664)	(15,804)
Recoveries credited to allowance	1,410	3,168	1,275
Balance, end of period	15,917	16,345	14,941
Dental Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning of period	2,683	1,824
Provision charged to income	2,208	1,315
Loans charged against allowance	(1,232)	(488)
Recoveries credited to allowance	71	32
Balance, end of period	$ 3,730	$ 2,683

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Share Based Compensation

12 Months Ended

Dec. 31, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Share Based Compensation

NOTE 15 – SHARE-BASED COMPENSATION:

The Company’s 2006 Stock Option and Equity Compensation Plan (the “2006 SOEC Plan”) authorizes the award of up to 1,550,000 shares in stock-based awards. The awards granted under this plan are service-based and are subject to vesting. The Compensation Committee of the Board of Directors may impose any terms or conditions on the vesting of an award that it determines to be appropriate. Awards granted generally vest over four years and have a maximum life of ten years. Awards may be granted at exercise prices of not less than 100.00% of the fair market value of the Company’s common stock at the grant date.

Pursuant to the 2006 SOEC Plan, incentive stock options (“ISOs”), nonqualified stock options, restricted stock, restricted stock units (“RSUs”), or stock appreciation rights (“SARs”) may be awarded to attract and retain the best available personnel to the Corporation and its subsidiaries. SARs may be settled in common stock or cash as determined at the date of issuance. Liability-based awards (including all cash-settled SARs) have no impact on the number of shares available to be issued within the plan. Additionally, non-qualified option awards and restricted stock awards may be granted to directors under the terms of this plan.

Prior to April 2006, incentive stock option (“ISO”) and non-qualified option awards were granted to employees and directors under the Company’s 1999 Employees’ Stock Option Plan and the Company’s 1999 Directors’ Stock Option Plan. The Company has stock options outstanding under both of these plans. Subsequent to the annual shareholders’ meeting in April 2006 all shares available under these plans were deregistered and are no longer available for future grants.

The following tables identify the compensation expenses recorded and tax benefits received by the Company in conjunction with its share-based compensation plans for the years ended December 31, 2013, 2012, and 2011:

	2013				2012				2011
	Compensation Expense		Tax Benefit		Compensation Expense		Tax Benefit (Expense)		Compensation Expense (Benefit)			Tax Benefit
Equity-based awards:
Director restricted stock	$	110	$	39	$	70	$	25	$	56		$	20
Director stock options		—		—		—		—		1			—
Employee stock options		70		—		122		—		173			—
Employee stock SARs		126		44		193		68		248			87
Employee RSUs		830		291		490		172		195			68
Liability-based awards:
Employee cash SARs		60		21		—		—		(70	)		(25	)
	$	1,196	$	395	$	875	$	265	$	603		$	150

Prior to 2012, the Company granted stock options to selected employees and directors. The following table summarizes information about stock option activity under all plans for the years ended December 31, 2013, 2012, and 2011:

	2013				2012					2011
	Options Outstanding		Weighted Average Exercise Price		Options Outstanding			Weighted Average Exercise Price		Options Outstanding			Weighted Average Exercise Price
Balance, beginning of year		367,906	$	14.15		412,943		$	13.74		447,693		$	13.61
Granted		—		—		—			—		—			—
Exercised		—		—		(28,999	)		6.83		(14,000	)		6.38
Forfeited or expired		—		—		(16,038	)		16.86		(20,750	)		15.81
Balance, end of year		367,906	$	14.15		367,906		$	14.15		412,943		$	13.74
Options exercisable, end of year		353,197	$	14.27		312,020		$	14.60		295,168		$	14.36

A summary of non-vested stock option activity during the current fiscal year is presented below:

	Non-vested Options			Weighted Average Grant Date Fair Value
Balance, beginning of year		55,886		$	3.58
Granted		—			—
Vested		(41,177	)		3.33
Forfeited, expired, or exercised		—			—
Balance, end of year		14,709		$	4.30

The total intrinsic value (which is the amount by which the stock price exceeds the exercise price) of both options outstanding as of December 31, 2013, was $807. The weighted average remaining contractual term of options exercisable was 4.41 years as of December 31, 2013. The total intrinsic value of options exercised was $0, $29, and $35, in the years ended December 31, 2013, 2012, and 2011, respectively. During the years ended December 31, 2013, 2012, and 2011, the amount of cash received from the exercise of stock options was $0, $69, and $89, respectively. As of December 31, 2013, there was $13 of total unrecognized compensation cost related to non-vested stock options which is expected to be recognized over a weighted average period of 0.3 years.

Prior to 2011, the Company granted SARs settled in stock to selected employees. The following table summarizes information about activity on SARs settled in stock for the years ended December 31, 2013, 2012, and 2011:

	2013					2012					2011
	Stock-settled SARs Outstanding			Weighted Average Exercise Price		Stock-settled SARs Outstanding			Weighted Average Exercise Price		Stock-settled SARs Outstanding			Weighted Average Exercise Price
Balance, beginning of year		387,072		$	13.74		405,340		$	13.71		460,915		$	13.75
Granted		—			—		—			—		—			—
Exercised		(30,422	)		12.08		—			—		—			—
Forfeited or expired		(18,891	)		14.73		(18,268	)		13.07		(55,575	)		14.06
Balance, end of year		337,759		$	—		387,072		$	13.74		405,340		$	13.71
Stock-settled SARs exercisable, end of year		313,010		$	14.05		309,980		$	14.28		247,930		$	14.80

A summary of non-vested stock-settled SARs activity during the current fiscal year is presented below:

	Non-vested Stock-settled SARs			Weighted Average Grant Date Fair Value
Balance, beginning of year		77,091		$	3.64
Granted		—			—
Vested		(50,992	)		3.43
Forfeited, expired, or exercised		(1,350	)		4.05
Balance, end of year		24,749		$	4.06

The total intrinsic value (which is the amount by which the stock price exceeds the exercise price) of stock-settled SARs as of December 31, 2013, was $839. The weighted average remaining contractual term of exercisable stock-settled SARs was 4.65 years as of December 31, 2013. As of December 31, 2013, there was $26 of total unrecognized compensation cost related to non-vested stock-settled SARs which is expected to be recognized over a weighted average period of 0.30 years.

During the period ended December 31, 2013, 30,422 Employee Stock SARs, with a weighted average exercise price of $12.08, were exercised. The exercise resulted in a net issuance to employees of 3,742 shares of stock, with an intrinsic value of $57.

Prior to 2010, the Company granted SARs settled in cash to selected employees. The following table summarizes information about activity on SARs settled in cash for the years ended December 31, 2013, 2012, and 2011:

	2013					2012					2011
	Cash-settled SARs Outstanding			Weighted Average Exercise Price		Cash-settled SARs Outstanding			Weighted Average Exercise Price		Cash-settled SARs Outstanding			Weighted Average Exercise Price
Balance, beginning of year		206,763		$	14.84		230,607		$	14.81		250,229		$	14.78
Granted		—			—		—			—		—			—
Exercised		(8,353	)		12.55		—			—		—			—
Forfeited or expired		(11,418	)		14.73		(23,844	)		14.50		(19,622	)		14.45
Balance, end of year		186,992		$	14.95		206,763		$	14.84		230,607		$	14.81
Cash-settled SARs exercisable, end of year		186,992		$	14.95		190,236		$	15.09		176,446		$	15.43

A summary of non-vested stock-settled SARs activity during the current fiscal year is presented below:

	Non-vested Cash-settled SARs			Weighted Average Grant Date Fair Value
Balance, beginning of year		16,527		$	2.76
Granted		—			—
Vested		(16,527	)		2.76
Forfeited, expired, or exercised		—			—
Balance, end of year		—		$	—

As of December 31, 2013 there was an intrinsic value of $296 on the Company’s outstanding cash-settled SARs.

During the period ended December 31, 2013, 8,353 Employee Cash SARs, with a weighted average exercise price of $12.55, were exercised. The exercise resulted in a cash payment, net of income taxes, to employees of $12. The weighted average remaining contractual term of exercisable cash-settled SARs was 3.98 years as of December 31, 2013.

In 2011, the Company began granting RSUs to selected employees. The RSUs vest equally over 4 years. The Company’s RSUs do not accrue dividends and the grantees do not have voting rights. No RSUs were granted prior to 2011.

The following table provides information regarding RSU activity during 2013, 2012 and 2011:

	2013					2012					2011
	Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value		Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value		Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value
Balance, beginning of year		251,329		$	8.99		125,888		$	9.40		—		$	—
Granted		145,420			8.76		164,519			8.76		127,192			9.40
Vested shares issued		(42,678	)		9.03		(18,821	)		9.40		—			—
Vested shares forfeited for taxes		(26,580	)		9.03		(11,517	)		9.40		—			—
Forfeited or expired		(27,795	)		9.66		(8,740	)		9.20		(1,304	)		9.40
Balance, end of year		299,696		$	9.79		251,329		$	8.99		125,888		$	9.40

Under the terms of the 2006 SOEC Plan, shares of Pacific Continental Corporation common stock are to be issued as soon as is practicable upon vesting of RSUs.

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Deposits (Tables)

12 Months Ended

Dec. 31, 2013

Banking And Thrift [Abstract]

Scheduled Maturities or Repricing of Time Deposits

Scheduled maturities or repricing of time deposits at December 31, are as follows:

	December 31,
	2013		2012
2013	$	—	$	94,974
2014		86,821		8,862
2015		13,501		14,282
2016		15,431		13,480
2017		14,609		5,792
2018		8,592		4,050
Thereafter		25,504		20,196
	$	164,458	$	161,636

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Fair Value - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Transfer of security from level 2 to level 3	1
Carrying value of loans fully charged off	$ 0
Fair Value, Measurements, Nonrecurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Transfers to or from Level 3	$ 0	$ 0
Other Real Estate Owned [Member] | Impaired Loans [Member] | Minimum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Term period for external appraisals	6 months
Other Real Estate Owned [Member] | Impaired Loans [Member] | Maximum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Term period for external appraisals	12 months

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2013

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 17 – COMMITMENTS AND CONTINGENCIES:

In the normal course of business under the provisions of the Company’s investment policy, additional investment securities may be purchased from time to time. Commitments to purchase securities are generally settled within a month and are not associated with repurchase agreements.

In order to meet the financing needs of its clients, the Company commits to extensions of credit and issues letters of credit. The Company uses the same credit policies in making commitments and conditional obligations as it does for other products. In the event of nonperformance by the client, the Company’s exposure to credit loss is represented by the contractual amount of the instruments. The Company’s collateral policies related to financial instruments with off-balance sheet risk conform to its general underwriting guidelines.

Commitments to extend credit are agreements to lend to a client as long as there is no violation of any condition established in the contract. Commitments generally have expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

Letters of credit written are conditional commitments issued by the Company to guarantee the performance of a client to a third-party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to clients.

Off-balance sheet instruments at December 31 consist of the following:

	2013		2012
Commitments to purchase securities	$	1,490	$	216
Commitments to extend credit (principally variable rate)	$	167,374	$	168,073
Letters of credit and financial guarantees written	$	1,304	$	832

The Company has entered into Executive Employment Agreements with two key executive officers. The employment agreements provide for minimum aggregate annual base salaries of $704, plus performance adjustments, life insurance coverage, and other perquisites commonly found in such agreements. The two employment agreements expire in 2014 unless extended or terminated earlier.

Legal contingencies arise from time-to-time in the normal course of business. Based upon analysis of management and in consultation with the Company’s legal counsel there are no current legal matters which are expected to have a material effect on the Company’s consolidated financial position.

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Loan Participations and Servicing - Amounts of Loans Participated (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Receivables [Abstract]
Total principal amount outstanding	$ 25,179	$ 42,020
less: principal amount derecognized	(13,268)	(20,901)
Principal amount included in loans on the balance sheet	$ 11,911	$ 21,119

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Cash flows from operating activities:
Net income	$ 13,767	$ 12,653	$ 5,341
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization, net of accretion	8,596	9,950	6,028
Valuation adjustment on foreclosed assets	1,948	1,416	2,759
Capitalized other real estate owned costs	(67)	(140)	(780)
(Gain) loss on sale of other real estate owned		(130)	127
Provision for loan losses	250	1,900	12,900
Deferred income taxes	743	(314)	1,423
Increase in cash surrender value of bank-owned life insurance	(515)	(583)	(38)
Share-based compensation	1,196	875	603
Excess tax benefit of stock options exercised		(10)	(14)
Production of mortgage loans held-for-sale		(2,259)	(8,153)
Proceeds from the sale of mortgage loans held-for-sale		3,317	9,211
Other than temporary impairment on investment securities	23		10
Loss (gain) on sale of investment securities	8		(884)
Change in:
Interest receivable	67	205	(354)
Deferred loan fees	83	163	94
Accrued interest payable and other liabilities	259	2,092	422
Income taxes (receivable) payable	792	1,671	(1,671)
Other assets	138		1,014
Net cash provided by operating activities	27,288	30,806	28,038
Cash flows from investing activities:
Proceeds from maturities and paydowns available-for-sale investment securities	99,228	100,657	64,325
Proceeds from sales of available-for-sale securities	1,851		35,541
Purchase of available-for-sale investment securities	(75,340)	(148,614)	(192,365)
Net loan principal collections (originations)	(61,604)	(64,169)	12,581
Purchase of property and equipment	(897)	(522)	(524)
Proceeds on sale of foreclosed assets	489	5,128	10,216
Purchase of energy tax credits		(14)
Purchase of bank-owned life insurance			(15,000)
Redemption of FHLB stock	391	190
Cash consideration paid, net of cash acquired in merger	(2,827)
Net cash used by investing activities	(38,709)	(107,344)	(85,226)
Cash flows from financing activities:
(Decrease) increase in deposits	(18,384)	80,900	6,295
Increase (decrease) in federal funds purchased and FHLB short-term borrowings	37,580	29,770	56,800
Proceeds from FHLB term advances originated		39,000
FHLB advances paid-off	(2,000)	(53,000)	(10,000)
Proceeds from stock options exercised		69	89
Excess tax benefit of stock options exercised		10	14
Dividends paid	(13,050)	(5,588)	(1,842)
Repurchase of common stock		(5,676)
Vested RSUs surrendered by employees to cover tax consequence	(318)	(105)
Net cash provided by (used in) financing activities	3,828	85,380	51,356
Net increase (decrease) in cash	(7,593)	8,842	(5,832)
Cash and cash equivalents, beginning of year	28,701	19,859	25,691
Cash and cash equivalents, end of year	21,108	28,701	19,859
Noncash investing and financing activities:
Transfers of loans to other real estate owned	753	13,246	9,029
Change in fair value of securities, net of deferred income taxes	(5,979)	2,277	2,347
Cash paid during the year for:
Income taxes	6,906	4,187	1,694
Interest	$ 4,641	$ 5,710	$ 8,292

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Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Statement Of Financial Position [Abstract]
Common stock, par value
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	17,891,687	17,835,088
Common stock, shares outstanding	17,891,687	17,835,088

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Federal Home Loan Bank Borrowings

12 Months Ended

Dec. 31, 2013

Banking And Thrift [Abstract]

Federal Home Loan Bank Borrowings

NOTE 10 – FEDERAL HOME LOAN BANK BORROWINGS:

The Company has a borrowing limit with the FHLB equal to 30.00% of total assets, subject to discounted collateral. The

Company does have the ability to access the FHLB excess stock pool, thus borrowing is not limited by FHLB stock held.

At December 31, 2013, the maximum borrowing line was $434,963; however, the FHLB borrowing line was limited by the discounted value of collateral pledged. The Company had pledged $436,744 in real estate loans to the FHLB that had a discounted value of $229,547. There was $160,000 borrowed on this line at December 31, 2013.

At December 31, 2012, the maximum FHLB borrowing line was $412,046, and the Company had pledged real estate loans and securities to the FHLB with a discounted value of $226,278. There was $118,000 borrowed on this line at December 31, 2012.

Federal Home Loan Bank borrowings by year of maturity and applicable interest rate are summarized as follows as of December 31:

	Current			December 31,
	Rates			2013		2012
Cash management advance		—		$	—	$	—
2013		NA			—		77,000
2014		0.22% - 0.24	%		119,000		—
2015		0.60% - 1.60	%		13,500		13,500
2016		1.84% - 2.36	%		22,500		22,500
2017		2.28	%		3,000		3,000
2018		—			—		—
Thereafter		3.85	%		2,000		2,000
				$	160,000	$	118,000

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Parent Company Financial Information - Schedule of Parent Company Balance Sheets (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Assets:
Cash deposited with the Bank	$ 21,053	$ 28,607
Deferred tax asset	9,598	6,230
Total assets	1,449,726	1,373,487
Liabilities and shareholders' equity:
Liabilities	1,270,542	1,190,106
Junior subordinated debentures	8,248	8,248
Shareholders' equity	179,184	183,381	178,866	172,238
Total liabilities and shareholders' equity	1,449,726	1,373,487
Pacific Continental Corporation [Member]
Assets:
Cash deposited with the Bank	2,941	2,465	7,273
Deferred tax asset	(158)
Prepaid expenses	14	16	11
Equity in Trust	248	248	248
Swap unrealized gain	405
Investment in the Bank	184,039	188,935	179,618
Total assets	187,489	191,664	187,150
Liabilities and shareholders' equity:
Liabilities	57	35	36
Junior subordinated debentures	8,248	8,248	8,248
Shareholders' equity	179,184	183,381	178,866
Total liabilities and shareholders' equity	$ 187,489	$ 191,664	$ 187,150

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Commitments and Contingencies - Schedule of Off-Balance Sheet Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Commitments And Contingencies Disclosure [Abstract]
Commitments to purchase securities	$ 1,490	$ 216
Commitments to extend credit (principally variable rate)	167,374	168,073
Letters of credit and financial guarantees written	$ 1,304	$ 832

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Transactions with Related Parties - Schedule of Activities in Related Party Loans (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Related Party Transactions [Abstract]
Balance, beginning of year	$ 133	$ 994	$ 993
Additions or renewals	68	49	204
Amounts collected	(101)	(16)	(203)
No longer related party		(894)
Balance, end of year	$ 100	$ 133	$ 994

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2013	Feb. 28, 2014	Jun. 30, 2013
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY
Trading Symbol	PCBK
Entity Registrant Name	PACIFIC CONTINENTAL CORP
Entity Central Index Key	0001084717
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		17,895,114
Entity Public Float			$ 201,800,909

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Junior Subordinated Debentures

12 Months Ended

Dec. 31, 2013

Text Block [Abstract]

Junior Subordinated Debentures

NOTE 11 – JUNIOR SUBORDINATED DEBENTURES:

In connection with the November 2005 acquisition of NWB Financial Corporation, the Company formed a wholly owned Delaware statutory business trust subsidiary, Pacific Continental Corporation Capital Trust (the “Trust”), which issued $8,248 of guaranteed undivided beneficial interests in the Company’s Junior Subordinated Deferrable Interest Debentures (“Trust Preferred Securities”). These debentures qualify as Tier 1 capital under Federal Reserve Board guidelines. All of the common securities of the Trust are owned by the Company. The proceeds from the issuance of the common securities and the Trust Preferred Securities were used by the Trust to purchase $8,248 of junior subordinated debentures of the Company. The debentures, which represent the sole asset of the Trust, accrued and paid distributions quarterly at a fixed rate of 6.265% per annum of the stated liquidation value of $1 per capital security. At January 7, 2012, the interest rate changed to a variable rate of three-month LIBOR plus 135 basis points. See note 12 for additional information regarding the interest rate SWAP agreement executed on the debenture in 2013.

The Company has entered into contractual arrangements which, taken collectively, fully and unconditionally guarantee payment of (1) accrued and unpaid distributions required to be paid on the Trust Preferred Securities, (2) the redemption price with respect to any Trust Preferred Securities called for redemption by the Trust, and (3) payments due upon a voluntary or involuntary dissolution, winding up, or liquidation of the Trust. The Trust Preferred Securities are mandatorily redeemable upon maturity of the debentures on January 7, 2036, or upon earlier redemption as provided in the indenture. The Company has the right to redeem the debentures purchased by the Trust in whole or in part, on or after, January 7, 2012. As specified in the indenture, if the debentures are redeemed prior to maturity, the redemption price will be the principal amount and any accrued interest. For the years ended December 31, 2013, 2012, and 2011, the Company recognized net interest expense of $200, $151, and $136, respectively, related to the Trust Preferred Securities.

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Income Taxes - Provision for Income Taxes (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Tax Disclosure [Abstract]
Federal, Currently payable	$ 6,682	$ 6,423	$ 245
State, Currently payable	(209)	50	50
Total current income tax expense benefit	6,473	6,473	295
Federal, Deferred	(496)	(1,152)	713
State, Deferred	1,239	838	710
Total deferred income tax expense benefit	743	(314)	1,423
Income tax provision	$ 7,216	$ 6,159	$ 1,718

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Share Based Compensation - Summary of RSU Activity (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding, Balance, beginning of year	367,906	412,943	447,693
Options Outstanding, Granted
Options Outstanding, Forfeited or expired		(16,038)	(20,750)
Options Outstanding, Balance, end of year	367,906	367,906	412,943
Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding, Balance, beginning of year	251,329	125,888
Options Outstanding, Granted	145,420	164,519	127,192
Options Outstanding, Vested Shares issued	(42,678)	(18,821)
Options Outstanding, Vested shares forfeited for taxes	(26,580)	(11,517)
Options Outstanding, Forfeited or expired	(27,795)	(8,740)	(1,304)
Options Outstanding, Balance, end of year	299,696	251,329	125,888
Weighted Average Grant Date Fair Value, Balance, beginning of year	$ 8.99	$ 9.40
Weighted Average Grant Date Fair Value, Granted	$ 8.76	$ 8.76	$ 9.40
Weighted Average Grant Date Fair Value, Vested Shares issued	$ 9.03	$ 9.40
Weighted Average Grant Date Fair Value, Vested Shares forfeited for taxes	$ 9.03	$ 9.40
Weighted Average Grant Date Fair Value, Forfeited or expired	$ 9.66	$ 9.20	$ 9.40
Weighted Average Grant Date Fair Value, Balance, end of year	$ 9.79	$ 8.99	$ 9.40

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Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Interest and dividend income
Loans	$ 53,275	$ 48,091	$ 50,753
Taxable securities	5,730	6,171	8,043
Tax-exempt securities	1,918	1,626	982
Federal funds sold & interest-bearing deposits with banks	10	6	6
Total interest and dividend income	60,933	55,894	59,784
Interest expense
Deposits	3,389	4,059	6,544
Federal Home Loan Bank & Federal Reserve borrowings	1,189	1,584	1,894
Junior subordinated debentures	200	151	136
Federal funds purchased	16	24	41
Total interest expense	4,794	5,818	8,615
Net interest income	56,139	50,076	51,169
Provision for loan losses	250	1,900	12,900
Net interest income after provision for loan losses	55,889	48,176	38,269
Noninterest income
Service charges on deposit accounts	1,926	1,827	1,816
Other fee income, principally bankcard	1,624	1,595	1,576
Mortgage banking income		72	191
Bank-owned life insurance income	515	583	38
Net (loss) gain on sale of investment securities	(8)		884
Impairment losses on investment securities (OTTI)	(23)		(10)
Other noninterest income	1,792	1,664	1,371
Total noninterest income	5,826	5,741	5,866
Noninterest expense
Salaries and employee benefits	22,120	19,576	18,875
Premises and equipment	3,684	3,373	3,444
Data processing	2,605	2,096	1,872
Legal and professional services	1,867	1,735	2,316
Business development	1,805	1,558	1,409
FDIC insurance assessment	912	1,085	1,692
Bankcard processing	527	580	618
Other real estate expense	2,401	1,494	3,307
Merger related expense	1,246	203
Other noninterest expense	3,565	3,405	3,543
Total noninterest expense	40,732	35,105	37,076
Income before income tax provision	20,983	18,812	7,059
Income tax provision	7,216	6,159	1,718
Net income	$ 13,767	$ 12,653	$ 5,341
Earnings per share
Basic	$ 0.77	$ 0.70	$ 0.29
Diluted	$ 0.76	$ 0.69	$ 0.29

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Loan Participations and Servicing

12 Months Ended

Dec. 31, 2013

Text Block [Abstract]

Loan Participations and Servicing

NOTE 5 – LOAN PARTICIPATIONS AND SERVICING:

In the normal course of business the Company may sell portions of loans to other institutions for cash in order to extend its lending capacity or to mitigate risk. These sales are commonly referred to as loan participations. Loan participations are performed without recourse and the participant’s interest is ratably concurrent with that retained by the Company. Cash flows are shared proportionately and neither the Company’s nor the participant’s interest is subordinated. The Company retains servicing rights and manages the client relationships for a reasonable servicing fee. The participated portion of these loans is not included in the accompanying consolidated balance sheets and the servicing component of these transactions are not material to the consolidated financial statements. The Company’s exposure to loss is limited to its retained interest in the loans.

The following table reflects the amounts of loans participated.

	December 31,
	2013			2012
Total principal amount outstanding	$	25,179		$	42,020
less: principal amount derecognized		(13,268	)		(20,901	)
Principal amount included in loans on the balance sheet	$	11,911		$	21,119

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Dental Loan Portfolio

12 Months Ended

Dec. 31, 2013

Text Block [Abstract]

Dental Loan Portfolio

NOTE 4 – DENTAL LOAN PORTFOLIO:

To assist in understanding the concentrations and risks associated with the Bank’s loan portfolio, the following Note has been included to provide additional information relating to the Bank’s dental lending portfolio. At December 31, 2013, and 2012, loans to dental professionals totaled $307,268 and $270,782, respectively and represented 30.89% and 31.08% of outstanding loans. As of December 31, 2013, and 2012, dental loans supported by government guarantees totaled $16,470 and $18,834. This represented 5.36% and 6.96% of the outstanding dental loan balances.

The Company defines a “dental loan” as loan to dental professionals for the purpose of practice expansion, acquisition or other purpose, supported by the cash flows of a dental practice.

Loan Classification

Major classifications of Dental Loans, at December 31, 2013, and 2012, are as follows:

	December 31,
	2013		2012
Real estate secured loans:
Owner-occupied commercial	$	59,279	$	59,327
Other dental real estate loans		1,967		3,103
Total permanent real estate loans		61,246		62,430
Dental construction loans		5,810		2,093
Total real estate loans		67,056		64,523
Commercial loans		240,212		206,259
Gross loans	$	307,268	$	270,782

Market Area

The Bank’s defined “market area” is within the states of Oregon and Washington west of the Cascade Mountain Range. This area is serviced by branch locations in Eugene, Portland and Seattle. The Company also makes national dental loans throughout the United States. National loan relationships are maintained and serviced by Bank personnel primarily located in Portland.

The following table represents the dental lending by borrower location:

	December 31,
	2013		2012
Local	$	178,673	$	191,908
National		128,595		78,874
Total	$	307,268	$	270,782

Allowance

The allowance for loan losses identified for the Dental Loan Portfolio is established as an amount that management considers adequate to absorb possible losses on existing loans within the Dental Portfolio. The allowance related to the Dental Loan Portfolio consists of general and specific components. The general component is based upon all Dental Loans collectively evaluated for impairment, including qualitative conditions associated with; loan type, out-of-market location, start-up financing, practice acquisition financing and specialty practice financing. The specific component is based upon Dental Loans individually evaluated for impairment.

	Twelve months ended December 31,
	2013			2012
Balance, beginning of period	$	2,683		$	1,824
Provision charged to income		2,208			1,315
Loans charged against allowance		(1,232	)		(488	)
Recoveries credited to allowance		71			32
Balance, end of period	$	3,730		$	2,683

Credit Quality

Please refer to Note 3 for additional information on the definitions of the credit quality indicators.

The following tables present the Company’s dental loan portfolio information by market and credit grade at December 31, 2013, and 2012:

Dental Credit Quality Indicators As of December 31, 2013
	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals
Local	$	172,708	$	—	$	5,965	$	—	$	178,673
National		127,842		—		753		—		128,595
Total	$	300,550	$	—	$	6,718	$	—	$	307,268
As of December 31, 2012
	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals
Local	$	184,872	$	—	$	7,036	$	—	$	191,908
National		78,480		—		394		—		78,874
Total	$	263,352	$	—	$	7,430	$	—	$	270,782

Past Due and Nonaccrual Loans

Please refer to Note 3 for additional information on the definitions of “past due.”

The following tables present an aged analysis of the dental loans by market, including nonaccrual loans at December 31, 2013, and 2012:

Aged Analysis of Dental Loans Receivable

As of December 31, 2013

	30-59 Days Past Due Still Accruing		60-89 Days Past Due Still Accruing		Greater Than 90 Days Still Accruing		Nonaccrual		Total Past Due and Nonaccrual		Total Current		Total Loans Receivable
Local	$	—	$	—	$	—	$	2,176	$	2,176	$	176,497	$	178,673
National		—		—		—		224		224		128,371		128,595
Total	$	—	$	—	$	—	$	2,400	$	2,400	$	304,868	$	307,268

Aged Analysis of Dental Loans Receivable

As of December 31, 2012

	30-59 Days Past Due Still Accruing		60-89 Days Past Due Still Accruing		Greater Than 90 Days Still Accruing		Nonaccrual		Total Past Due and Nonaccrual		Total Current		Total Loans Receivable
Local	$	—	$	—	$	—	$	2,499	$	2,499	$	189,409	$	191,908
National		—		—		—		—		—		78,874		78,874
Total	$	—	$	—	$	—	$	2,499	$	2,499	$	268,283	$	270,782

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Transactions with Related Parties

12 Months Ended

Dec. 31, 2013

Related Party Transactions [Abstract]

Transactions with Related Parties

NOTE 16 – TRANSACTIONS WITH RELATED PARTIES:

The Company has granted loans to officers and directors and to companies with which they are associated. Such loans are made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated parties. Activity with respect to these loans during the year ended December 31 was as follows:

	2013			2012			2011
Balance, beginning of year	$	133		$	994		$	993
Additions or renewals		68			49			204
Amounts collected		(101	)		(16	)		(203	)
No longer related party		—			(894	)		—
Balance, end of year	$	100		$	133		$	994

In addition, there were $12 in commitments to extend credit to directors and officers at December 31, 2013, which are included among loan commitments, disclosed in Note 17.

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Derivative Instruments

12 Months Ended

Dec. 31, 2013

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Instruments

NOTE 12 – DERIVATIVE INSTRUMENTS:

Derivative instruments are entered into primarily as a risk management tool of the Company to help manage its interest rate risk position. Financial derivatives are recorded at fair value as other assets and other liabilities. The accounting for changes in the fair value of a derivative depends on whether it has been designated and qualifies as part of a hedging relationship. For a fair value hedge, changes in the fair value of the derivative instrument and changes in the fair value of the hedged asset or liability are recognized currently in earnings. For a cash flow hedge, changes in the fair value of the derivative instrument, to the extent that it is effective, are recorded in accumulated other comprehensive income and subsequently reclassified to earnings as the hedged transaction impacts net income. Any ineffective portion of a cash flow hedge is recognized currently in earnings.

During the second quarter 2013, the Company entered into an interest rate swap agreement with an $8,000 notional amount to convert its variable-rate Junior Subordinated Debenture debt into a fixed rate for a term of approximately 7 years at a rate of 2.73%. The derivative is designated as a cash flow hedge. The hedge meets the definition of highly effective and the Company expects the hedge to be highly effective throughout the remaining term of the swap. The fair value of the derivative instrument at December 31, 2013, was a $405 unrealized gain, which is recorded in the other asset section of the balance sheet, net of the tax effect. No gain or loss was recognized in earnings for the twelve months ended December 31, 2013, related to interest rate swaps.

The Company maintains written documentation for the hedge. This documentation identifies the hedging objective and strategy, the hedging instrument, the instrument being hedged, the reasoning behind the assertion that the hedge is highly effective and the methodology for measuring ongoing hedge effectiveness and ineffectiveness. The Company pledged $400 under collateral arrangements as of April 22, 2013, to satisfy collateral requirements associated with the interest rate swap contract.

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Retirement Plan - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Compensation And Retirement Disclosure [Abstract]
Total plan expenses	$ 673	$ 617	$ 240

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Deposits

12 Months Ended

Dec. 31, 2013

Banking And Thrift [Abstract]

Deposits

NOTE 8 – DEPOSITS:

Scheduled maturities or repricing of time deposits at December 31, are as follows:

	December 31,
	2013		2012
2013	$	—	$	94,974
2014		86,821		8,862
2015		13,501		14,282
2016		15,431		13,480
2017		14,609		5,792
2018		8,592		4,050
Thereafter		25,504		20,196
	$	164,458	$	161,636

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Loans, Allowance for Loan Losses, and Credit Quality Indicators - Schedule of Non-Covered Restructured Loans (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Financing Receivable, Modifications [Line Items]
Rate Modification	$ 895
Term Modification	773	467
Interest Only Modification	524	351
Combination Modification	674	372
Commercial and other [Member]
Financing Receivable, Modifications [Line Items]
Rate Modification
Term Modification	773	228
Interest Only Modification	524	230
Combination Modification	674	69
Consumer loans [Member]
Financing Receivable, Modifications [Line Items]
Rate Modification
Term Modification
Interest Only Modification
Combination Modification
Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Rate Modification	895
Term Modification		112
Interest Only Modification		121
Combination Modification		303
Real Estate [Member] | Multi-family residential [Member]
Financing Receivable, Modifications [Line Items]
Rate Modification
Term Modification
Interest Only Modification
Combination Modification
Real Estate [Member] | Residential 1-4 family [Member]
Financing Receivable, Modifications [Line Items]
Rate Modification	317
Term Modification
Interest Only Modification		121
Combination Modification
Real Estate [Member] | Owner-occupied commercial [Member]
Financing Receivable, Modifications [Line Items]
Rate Modification
Term Modification		112
Interest Only Modification
Combination Modification		303
Real Estate [Member] | Nonowner-occupied commercial [Member]
Financing Receivable, Modifications [Line Items]
Rate Modification	578
Term Modification
Interest Only Modification
Combination Modification
Construction [Member]
Financing Receivable, Modifications [Line Items]
Rate Modification
Term Modification		127
Interest Only Modification
Combination Modification
Construction [Member] | Multi-family residential [Member]
Financing Receivable, Modifications [Line Items]
Rate Modification
Term Modification
Interest Only Modification
Combination Modification
Construction [Member] | Residential 1-4 family [Member]
Financing Receivable, Modifications [Line Items]
Rate Modification
Term Modification
Interest Only Modification
Combination Modification
Construction [Member] | Aged Analysis of Loans Receivable [Member]
Financing Receivable, Modifications [Line Items]
Rate Modification
Term Modification
Interest Only Modification
Combination Modification
Construction [Member] | Commercial bare land and acquisition & development [Member]
Financing Receivable, Modifications [Line Items]
Rate Modification
Term Modification
Interest Only Modification
Combination Modification
Construction [Member] | Residential bare land and acquisition & development [Member]
Financing Receivable, Modifications [Line Items]
Rate Modification
Term Modification		127
Interest Only Modification
Combination Modification

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Property and Equipment

12 Months Ended

Dec. 31, 2013

Property Plant And Equipment [Abstract]

Property and Equipment

NOTE 6 – PROPERTY AND EQUIPMENT:

The balance of property and equipment net of accumulated depreciation and amortization at December 31, 2013, and 2012 consists of the following:

	December 31,
	2013			2012
Land	$	3,831		$	3,831
Buildings and improvements		19,039			18,702
Furniture and equipment		12,424			11,794
		35,294			34,327
less: accumulated depreciation & amortization		(16,458	)		(15,089	)
Net property and equipment	$	18,836		$	19,238

Depreciation expense was $1,495, $1,482, and $1,486, for the years ended December 31, 2013, and 2012, and 2011, respectively.

The Company leases certain facilities for office locations under non-cancelable operating lease agreements expiring through 2027. Rent expense related to these leases totaled $1,381, $1,141, and $1,152, in 2013, 2012, and 2011, respectively. The Company leases approximately 26.0% of its Springfield Gateway building to others under non-cancelable operating lease agreements extending through 2016.

Future minimum payments required and anticipated lease revenues under these leases are:

	Lease Commitments		Property Leased to Others
2014	$	1,111	$	341
2015		663		247
2016		402		227
2017		398		—
2018		270		—
Thereafter		2,028		—
	$	4,872	$	815

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Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

NOTE 7 – GOODWILL AND INTANGIBLE ASSETS:

The following table summarizes the changes in the Company’s goodwill and core deposit intangible asset for the three years ended December 31:

	December 31,
	2013			2012			2011
Goodwill	$	22,881		$	22,031		$	22,031
Core deposit intangible asset		845			204			427
Amortization		(110	)		(204	)		(223	)
Total goodwill and intangible assets	$	23,616		$	22,031		$	22,235

At December 31, 2013, the Company had a recorded balance of $22,881 in goodwill from the November 30, 2005, acquisition of Northwest Business Financial Corporation (“NWBF”) and the February 1, 2013, acquisition of Century Bank. In addition, the Company had $735 of core deposit intangible assets resulting from the acquisition of Century Bank. The Century Bank core deposit intangible was determined to have an expected life of seven years, and is being amortized over that period using the straight-line method. The Century Bank core deposit intangible will be fully amortized in January 2020.

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Federal Funds and Overnight Funds Purchased

12 Months Ended

Dec. 31, 2013

Text Block [Abstract]

Federal Funds and Overnight Funds Purchased

NOTE 9 – FEDERAL FUNDS AND OVERNIGHT FUNDS PURCHASED:

The Company has unsecured federal funds borrowing lines with various correspondent banks totaling $129,000. At December 31, 2013, and December 31, 2012 there was $5,150 and $11,570 outstanding on these lines, respectively.

The Company also has a secured overnight borrowing line available from the Federal Reserve Bank that totaled $92,579 and $87,740 at December 31, 2013, and December 31, 2012, respectively. The Federal Reserve Bank borrowing line is secured through the pledging of approximately $139,166 of commercial loans under the Company’s Borrower-In-Custody program. At December 31, 2013, and December 31, 2012, there were no outstanding borrowings on this line.

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Dental Loan Portfolio - Dental Loan Total by Market (Detail) (Dental Loan [Member], USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Receivable	$ 307,268	$ 270,782
Local [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Receivable	178,673	191,908
National [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Receivable	$ 128,595	$ 78,874

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Share Based Compensation - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation, authorized shares	1,550,000
Maximum percentage of awards to be granted at exercise prices	100.00%
Total intrinsic value of options outstanding	$ 807
Weighted average remaining contractual term	4 years 4 months 28 days
Total intrinsic value of options exercised	0	29	35
Cash received from exercise of stock options	0	69	89
Unrecognized compensation expense	13
Non-vested stock options, Weighted average period to recognize	3 months 18 days
Weighted average fair value of cash settled stock appreciation rights outstanding	296
Options exercisable number	353,197	312,020	295,168
Weighted Average Exercise Price, Options exercisable	$ 14.27	$ 14.60	$ 14.36
Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, award vesting period			4 years
Employee Stock Options [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, award vesting period	4 years
Employee Stock Options [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, award vesting period	10 years
Stock-settled SARs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average remaining contractual term	4 years 7 months 24 days
Unrecognized compensation expense	26
Non-vested stock options, Weighted average period to recognize	3 months 18 days
The total intrinsic value of stock-settled SARs	839
Employee stock SARs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options exercisable, number	30,422
Weighted average exercise price	$ 12.08
Options, exercises in period	3,742
Options, exercises in period, intrinsic value	57
Cash-settled SARs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average remaining contractual term	3 years 11 months 23 days
Options exercisable number	8,353
Weighted Average Exercise Price, Options exercisable	$ 12.55
Allocated Share-based Compensation Expense, Net of Tax	$ 12

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Dental Loan Portfolio - Credit Quality Indicators (Detail) (Dental Loan [Member], USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment [Line Items]
Total Loans Receivable	$ 307,268	$ 270,782
Local [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans Receivable	178,673	191,908
National [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans Receivable	128,595	78,874
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans Receivable	300,550	263,352
Pass [Member] | Local [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans Receivable	172,708	184,872
Pass [Member] | National [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans Receivable	127,842	78,480
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans Receivable
Special Mention [Member] | Local [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans Receivable
Special Mention [Member] | National [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans Receivable
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans Receivable	6,718	7,430
Substandard [Member] | Local [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans Receivable	5,965	7,036
Substandard [Member] | National [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans Receivable	753	394
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans Receivable
Doubtful [Member] | Local [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans Receivable
Doubtful [Member] | National [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans Receivable

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Regulatory Matters - Additional Information (Detail) (USD $) In Billions, unless otherwise specified	12 Months Ended
	Dec. 31, 2009	Dec. 31, 2013
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Minimum leverage ratio		4.00%
Amount of minimum value of assets	$ 15
Trust preferred security debt phased out of Tier 1 capital to Tier 2 capital period	10 years
January 1, 2015 [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Percentage of capital conservation		4.50%
January 1, 2015 [Member] | Minimum [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Minimum ratio of risk-weighted assets		4.00%
January 1, 2015 [Member] | Maximum [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Minimum ratio of risk-weighted assets		6.00%
January 1, 2019 [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Percentage of capital conservation		7.00%
Minimum ratio of risk-weighted assets		8.50%

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Dental Loan Portfolio - Major Classifications of Dental Loans (Detail) (Dental Loan [Member], USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans Receivable	$ 307,268	$ 270,782
Commercial and Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans Receivable	240,212	206,259
Real estate secured loans [Member] | Residential portfolio segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans Receivable	67,056	64,523
Real estate secured loans [Member] | Residential portfolio segment [Member] | Owner-occupied commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans Receivable	59,279	59,327
Real estate secured loans [Member] | Residential portfolio segment [Member] | Other dental real estate loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans Receivable	1,967	3,103
Real estate secured loans [Member] | Residential portfolio segment [Member] | Dental construction loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans Receivable	5,810	2,093
Real estate secured loans [Member] | Real estate loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans Receivable	$ 61,246	$ 62,430

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Transactions with Related Parties - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Related Party Transaction [Line Items]
Commitments to extend credit to directors and officers	$ 167,374	$ 168,073
Directors and officers [Member]
Related Party Transaction [Line Items]
Commitments to extend credit to directors and officers	$ 12

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Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2013

Property Plant And Equipment [Abstract]

Schedule of Property and Equipment Net

The balance of property and equipment net of accumulated depreciation and amortization at December 31, 2013, and 2012 consists of the following:

	December 31,
	2013			2012
Land	$	3,831		$	3,831
Buildings and improvements		19,039			18,702
Furniture and equipment		12,424			11,794
		35,294			34,327
less: accumulated depreciation & amortization		(16,458	)		(15,089	)
Net property and equipment	$	18,836		$	19,238

Summary of Future Minimum Payments Required and Anticipated Lease Revenues

Future minimum payments required and anticipated lease revenues under these leases are:

	Lease Commitments		Property Leased to Others
2014	$	1,111	$	341
2015		663		247
2016		402		227
2017		398		—
2018		270		—
Thereafter		2,028		—
	$	4,872	$	815

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Loans, Allowance for Loan Losses, and Credit Quality Indicators - Summary of Loan Classifications (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	$ 994,769	$ 871,257
Deferred loan origination fees	(924)	(841)
Gross loans, net of deferred income	993,845	870,416
Allowance for loan losses	(15,917)	(16,345)
Total loans, net of allowance for loan losses and net deferred fees	977,928	854,071
Percentage of gross loans	100.00%	100.00%
Commercial loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	390,301	325,604
Percentage of gross loans	39.20%	37.40%
Consumer loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	3,878	3,581
Percentage of gross loans	0.30%	0.40%
Other loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	928	1,112
Percentage of gross loans	0.10%	0.10%
Real estate loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	500,752	461,240
Real estate loans [Member] | Multi-family residential [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	46,217	45,212
Real estate loans [Member] | Residential 1-4 family [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	46,438	51,437
Real estate loans [Member] | Owner-occupied commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	249,311	219,276
Real estate loans [Member] | Nonowner-occupied commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	158,786	145,315
Real estate secured loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	599,662	540,960
Percentage of gross loans	60.40%	62.10%
Real estate secured loans [Member] | Real estate loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	500,752	461,240
Percentage of gross loans	50.40%	53.00%
Real estate secured loans [Member] | Real estate loans [Member] | Multi-family residential [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	46,217	45,212
Percentage of gross loans	4.60%	5.20%
Real estate secured loans [Member] | Real estate loans [Member] | Residential 1-4 family [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	46,438	51,437
Percentage of gross loans	4.70%	5.90%
Real estate secured loans [Member] | Real estate loans [Member] | Owner-occupied commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	249,311	219,276
Percentage of gross loans	25.10%	25.20%
Real estate secured loans [Member] | Real estate loans [Member] | Nonowner-occupied commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	158,786	145,315
Percentage of gross loans	16.00%	16.70%
Real estate secured loans [Member] | Construction Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	98,910	79,720
Percentage of gross loans	10.00%	9.10%
Real estate secured loans [Member] | Construction Loans [Member] | Multi-family residential [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	23,419	17,022
Percentage of gross loans	2.40%	2.00%
Real estate secured loans [Member] | Construction Loans [Member] | Residential 1-4 family [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	26,512	20,390
Percentage of gross loans	2.70%	2.30%
Real estate secured loans [Member] | Construction Loans [Member] | Aged Analysis of Loans Receivable [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	30,516	23,235
Percentage of gross loans	3.10%	2.70%
Real estate secured loans [Member] | Construction Loans [Member] | Commercial bare land and acquisition & development [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	11,473	10,668
Percentage of gross loans	1.20%	1.20%
Real estate secured loans [Member] | Construction Loans [Member] | Residential bare land and acquisition & development [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Gross loans	$ 6,990	$ 8,405
Percentage of gross loans	0.60%	0.90%

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Retirement Plan

12 Months Ended

Dec. 31, 2013

Postemployment Benefits [Abstract]

Retirement Plan

NOTE 14 – RETIREMENT PLAN:

The Company has a 401(k) profit sharing plan covering substantially all employees. The plan provides for employee and employer contributions. The total plan expenses, including employer contributions, were $673, $617, and $240 in 2013, 2012, and 2011, respectively.

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Regulatory Matters

12 Months Ended

Dec. 31, 2013

Banking And Thrift [Abstract]

Regulatory Matters

NOTE 19 – REGULATORY MATTERS:

The Company and the Bank are subject to the regulations of certain federal and state agencies and receive periodic examinations by those regulatory authorities. In addition, they are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory – and possibly additional discretionary – actions by regulators that, if undertaken, could have a direct material effect on the consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company and the Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios of Total and Tier 1 capital to risk-weighted assets and of Tier 1 capital to leverage assets. Management believes that, as of December 31, 2013, the Company and the Bank meet all capital adequacy requirements to which they are subject.

As of December 31, 2013, according to FDIC guidelines, the Bank is considered to be well-capitalized. To be categorized as well-capitalized, the Bank must maintain minimum Total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the following table.

The Company’s and the Bank’s actual capital amounts and ratios are presented in the table below:

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2013:
Total capital (to risk weighted assets)
Bank:	$	174,311		15.89	%	$	87,744		8	%	$	109,680		10	%
Company:	$	177,209		16.15	%		NA					NA		10	%
Tier 1 capital (to risk weighted assets)
Bank:	$	160,572		14.64	%	$	43,872		4	%	$	65,808		6	%
Company:	$	163,470		14.90	%		NA					NA
Tier 1 capital (to leverage assets)
Bank:	$	160,572		11.29	%	$	56,887		4	%	$	71,109		5	%
Company:	$	163,470		11.49	%		NA					NA
As of December 31, 2012:
Total capital (to risk weighted assets)
Bank:	$	173,225		17.90	%	$	77,426		8	%	$	96,783		10	%
Company:	$	175,671		18.15	%		NA					NA
Tier 1 capital (to risk weighted assets)
Bank:	$	161,073		16.64	%	$	38,713		4	%	$	58,070		6	%
Company:	$	163,519		16.90	%		NA					NA
Tier 1 capital (to leverage assets)
Bank:	$	161,073		12.15	%	$	53,019		4	%	$	66,273		5	%
Company:	$	163,519		12.33	%		NA					NA

On July 2, 2013, the federal banking regulators approved the final proposed rules that revise the regulatory capital rules to incorporate certain revisions by the Basel Committee on Banking Supervision to the Basel capital framework (“Basel III”). The phase-in period for the final rules will begin for the Company on January 1, 2015, with full compliance with the final rules entire requirement phased in on January 1, 2019.

The final rules, among other things, include a new common equity Tier 1 capital (“CET1”) to risk-weighted assets ratio, including a capital conservation buffer, which will gradually increase from 4.50% on January 1, 2015 to 7.00% on January 1, 2019. The final rules also raise the minimum ratio of Tier 1 capital to risk-weighted assets from 4.00% to 6.00% on January 1, 2015 to 8.50% on January 1, 2019, as well as require a minimum leverage ratio of 4.00%.

Also, under the final rules, trust preferred security debt issuances will be phased out of Tier 1 capital into Tier 2 capital over a 10 year period, except for bank holding companies with less than $15 billion assets as of December 31, 2009 will be allowed to continue to include these issuances in Tier 1 capital, subject to certain restrictions. As the Company had less than $15 billion in assets at December 31, 2009, the Company will be able to continue to include its existing trust preferred securities, less the common stock of the Trusts, in the Company’s Tier 1 capital.

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Fair Value - Estimated Fair Values of Financial Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Financial assets:
Cash and cash equivalents	$ 21,108	$ 28,701
Securities available-for-sale	347,386	389,885
Accrued interest receivable	4,703	4,520
Bank-owned life insurance	16,136	15,621
Swap Derivative	405
Financial liabilities:
Deposits	1,090,981	1,046,154
Federal funds and overnight funds purchased	5,150	11,570
Federal Home Loan Bank borrowings	160,000	118,000
Junior subordinated debentures	8,248	8,248
Carrying Amount [Member]
Financial assets:
Cash and cash equivalents	21,108	28,701
Securities available-for-sale	347,386	389,885
Accrued interest receivable	4,703	4,520
Loans, net of deferred fees	993,845	870,416
Federal Home Loan Bank stock	10,425	10,462
Bank-owned life insurance	16,136	15,621
Swap Derivative	405
Financial liabilities:
Deposits	1,090,981	1,046,154
Federal funds and overnight funds purchased	5,150	11,570
Federal Home Loan Bank borrowings	160,000	118,000
Junior subordinated debentures	8,248	8,248
Accrued interest payable	193	218
Fair Value [Member]
Financial assets:
Cash and cash equivalents	21,108	28,701
Securities available-for-sale	347,386	389,885
Accrued interest receivable	4,703	4,520
Loans, net of deferred fees	980,334	871,802
Federal Home Loan Bank stock	10,425	10,462
Bank-owned life insurance	16,136	15,621
Swap Derivative	405
Financial liabilities:
Deposits	1,091,355	1,046,165
Federal funds and overnight funds purchased	5,150	11,570
Federal Home Loan Bank borrowings	160,984	119,517
Junior subordinated debentures	2,265	2,193
Accrued interest payable	$ 193	$ 218

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Securities Available-for-Sale - Schedule of Roll-Forward Amount of Credit-Related OTTI (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Investments Debt And Equity Securities [Abstract]
Balance, beginning of period:	$ 204	$ 204	$ 226
OTTI credit loss recorded	23		10
OTTI reduction from sale or maturity			(32)
Balance, end of period:	$ 227	$ 204	$ 204

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Parent Company Financial Information - Schedule of Parent Company Statements of Cash Flows (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Cash flows from operating activities:
Net income	$ 13,767	$ 12,653	$ 5,341
Adjustments to reconcile net income to net cash provided by operating activities:
Excess tax benefit of stock options exercised		(10)	(14)
Net cash provided by operating activities	27,288	30,806	28,038
Cash flows from financing activities:
Proceeds from stock options exercised		69	89
Repurchase of common stock		(5,676)
Dividends paid	(13,050)	(5,588)	(1,842)
Vested RSUs surrendered to cover tax consequences	(318)	(105)
Net cash provided by (used in) financing activities	3,828	85,380	51,356
Net increase (decrease) in cash	(7,593)	8,842	(5,832)
Cash and cash equivalents, beginning of year	28,701	19,859	25,691
Cash and cash equivalents, end of year	21,108	28,701	19,859
Pacific Continental Corporation [Member]
Cash flows from operating activities:
Net income	13,767	12,653	5,341
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed (earnings) from the Bank	(265)	(6,259)	(5,607)
Excess tax benefit of stock options exercised		(10)	(14)
Other, net	342	98	(141)
Net cash provided by operating activities	13,844	6,482	(421)
Cash flows from financing activities:
Proceeds from stock options exercised		69	89
Income tax benefit for stock options exercised		10	14
Repurchase of common stock		(5,676)
Dividends paid	(13,050)	(5,588)	(1,842)
Vested RSUs surrendered to cover tax consequences	(318)	(105)
Net cash provided by (used in) financing activities	(13,368)	(11,290)	(1,739)
Net increase (decrease) in cash	476	(4,808)	(2,160)
Cash and cash equivalents, beginning of year	2,465	7,273	9,433
Cash and cash equivalents, end of year	$ 2,941	$ 2,465	$ 7,273

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2013

Commitments And Contingencies Disclosure [Abstract]

Schedule of Off-Balance Sheet Instruments

Off-balance sheet instruments at December 31 consist of the following:

	2013		2012
Commitments to purchase securities	$	1,490	$	216
Commitments to extend credit (principally variable rate)	$	167,374	$	168,073
Letters of credit and financial guarantees written	$	1,304	$	832

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 13,767	$ 12,653	$ 5,341
Available-for-sale securities:
Unrealized (loss) gain arising during the year	(9,833)	3,733	4,678
Reclassification adjustment for losses (gains) realized in net income	8		(884)
Other than temporary impairment	23		10
Income tax benefit (expense)	3,823	(1,456)	(1,457)
Derivative agreements-cash flow hedge
Unrealized gain arising during the year	405
Income tax expense	(158)
Total other comprehensive (loss) income, net of tax	(5,732)	2,277	2,347
Total comprehensive income	$ 8,035	$ 14,930	$ 7,688

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Share Based Compensation - Summary of Nonvested Stock Option Activity (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Non-vested Options, Balance, beginning of year	55,886
Non-vested Options, Granted
Non-vested Options, Vested	(41,177)
Non-vested Options, Forfeited, expired, or exercised
Non-vested Options, Balance, end of year	14,709
Non-vested Options, Weighted Average Grant Date Fair Value, Balance, beginning of year	$ 3.58
Non-vested Options, Weighted Average Grant Date Fair Value, Granted
Non-vested Options, Weighted Average Grant Date Fair Value, Vested	$ 3.33
Non-vested Options, Weighted Average Grant Date Fair Value, Forfeited, expired, or exercised
Non-vested Options, Weighted Average Grant Date Fair Value, Balance, end of year	$ 4.30

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Loans, Allowance for Loan Losses, and Credit Quality Indicators

12 Months Ended

Dec. 31, 2013

Receivables [Abstract]

Loans, Allowance for Loan Losses, and Credit Quality Indicators

NOTE 3—LOANS, ALLOWANCE FOR LOAN LOSSES, AND CREDIT QUALITY INDICATORS

Loans are stated at the amount of unpaid principal net of loan premiums or discounts for purchased loans, net deferred loan origination fees, discounts associated with retained portions of loans sold, and an allowance for loan losses. Interest on loans is calculated using the simple-interest method on daily balances of the principal amount outstanding. Loan origination fees, net of origination costs and discounts, are amortized over the lives of the loans as adjustments to yield.

Major classifications of loans, including loans held-for-sale, at December 31 are as follows:

	December 31,			% of gross			December 31,			% of gross
	2013			loans			2012			loans
Real estate secured loans:
Permanent Loans:
Multi-family residential	$	46,217			4.6	%	$	45,212			5.2	%
Residential 1-4 family		46,438			4.7	%		51,437			5.9	%
Owner-occupied commercial		249,311			25.1	%		219,276			25.2	%
Nonowner-occupied commercial		158,786			16.0	%		145,315			16.7	%
Total permanent real estate loans		500,752			50.4	%		461,240			53.0	%
Construction Loans:
Multi-family residential		23,419			2.4	%		17,022			2.0	%
Residential 1-4 family		26,512			2.7	%		20,390			2.3	%
Commercial real estate		30,516			3.1	%		23,235			2.7	%
Commercial bare land and acquisition & development		11,473			1.2	%		10,668			1.2	%
Residential bare land and acquisition & development		6,990			0.6	%		8,405			0.9	%
Total construction real estate loans		98,910			10.0	%		79,720			9.1	%
Total real estate loans		599,662			60.4	%		540,960			62.1	%
Commercial loans		390,301			39.2	%		325,604			37.4	%
Consumer loans		3,878			0.3	%		3,581			0.4	%
Other loans		928			0.1	%		1,112			0.1	%
Gross loans		994,769			100.0	%		871,257			100.0	%
Deferred loan origination fees		(924	)					(841	)
		993,845						870,416
Allowance for loan losses		(15,917	)					(16,345	)
Total loans, net of allowance for loan losses and net deferred fees	$	977,928					$	854,071

At December 31, 2013, outstanding loans to dental professionals totaled $307,268 and represented 30.89% of total outstanding loans compared to dental professional loans of $270,782 or 31.08% of total loans at December 31, 2012. Additional information about the Company’s dental portfolio can be found in Item 8, Note 4 of the Notes to Consolidated Financial Statements. There are no other industry concentrations in excess of 10.00% of the total loan portfolio. However, as of December 31, 2013, approximately 60.38% of the Company’s loan portfolio was collateralized by real estate and is, therefore, susceptible to changes in local market conditions. While appropriate action is taken to manage identified concentration risks, management believes that the loan portfolio is well diversified by geographic location and among industry groups.

Acquired Loans

On February 1, 2013, the Bank acquired all of the assets and liabilities of Century Bank of Eugene, Oregon. The transaction has been accounted for under the acquisition method of accounting for cash consideration of $13,398, which included the consideration paid for all common shares and outstanding warrants and options. The assets and liabilities were recorded at their estimated fair values as of the acquisition date. The fair value estimates are considered provisional and are subject to change for up to one year after the closing date of the acquisition.

Acquired loans presented below at December 31, 2013, and the acquisition date:

	December 31, 2013			February 1, 2013
Contractually required principal payments	$	44,358		$	65,532
Purchase adjustment for credit and interest rate		(1,341	)		(2,193	)
Balance of acquired loans	$	43,017		$	63,339

The acquisition of Century Bank is not considered significant to the Company’s financial statements, therefore pro forma financial information is not presented.

Allowance for Loan Losses

A summary of the activity in the allowance for loan losses is as follows for the years ended 2013, 2012, and 2011:

	Twelve months ended December 31,
	2013			2012			2011
Balance, beginning of period	$	16,345		$	14,941		$	16,570
Provision charged to income		250			1,900			12,900
Loans charged against allowance		(2,088	)		(3,664	)		(15,804	)
Recoveries credited to allowance		1,410			3,168			1,275
Balance, end of period	$	15,917		$	16,345		$	14,941

The allowance for loan losses is established as an amount that management considers adequate to absorb possible losses on existing loans within the portfolio. The allowance consists of general, specific, and unallocated components. The general component is based upon all loans collectively evaluated for impairment. The specific component is based upon all loans individually evaluated for impairment. The unallocated component represents credit losses inherent in the loan portfolio that may not have been contemplated in the general risk factors or the specific allowance analysis. Loans are charged against the allowance when management believes the collection of principal and interest is unlikely.

The Company performs regular credit reviews of the loan portfolio to determine the credit quality and adherence to underwriting standards. When loans are originated, they are assigned a risk rating that is reassessed periodically during the term of the loan through the credit review process. The Company’s internal risk rating methodology assigns risk ratings ranging from one to ten, where a higher rating represents higher risk. The ten-point risk rating categories are a primary factor in determining an appropriate amount for the allowance for loan losses.

Estimated credit losses reflect consideration of all significant factors that affect the collectability of the loan portfolio. The historical loss rate for each group of loans with similar risk characteristics is determined based on the Company’s own loss experience in that group. Historical loss experience and recent trends in losses provides a reasonable starting point for analysis, however they do not by themselves form a sufficient basis to determine the appropriate level for the allowance for loan losses. Qualitative or environmental factors that are likely to cause estimated credit losses to differ from historical losses are also considered including but not limited to:

• Changes in international, regional, and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments,

• Changes in the nature and volume of the portfolio and in the terms of loans,

• Changes in the experience, ability, and depth of lending management and other relevant staff,

• Changes in the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans,

• Changes in the quality of the institution’s loan review system,

• Changes in the value of underlying collateral for collateral-dependent loans,

• The existence and effect of any concentrations of credit, and changes in the level of such concentrations,

• The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the institution’s existing portfolio,

• Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses.

• Changes in the current and future US political environment, including debt ceiling negotiations, government shutdown and healthcare reform that may affect national, regional and local economic conditions, taxation, or disruption of national or global financial markets.

The adequacy of the allowance for loan losses and the reserve for unfunded commitments is determined using a consistent, systematic methodology and is monitored regularly based on management’s evaluation of numerous factors. For each portfolio segment, these factors include:

• The quality of the current loan portfolio,

• The trend in the migration of the loan portfolio’s risk ratings,

• The velocity of migration of losses and potential losses,

• Current economic conditions,

• Loan concentrations,

• Loan growth rates,

• Past-due and nonperforming trends,

• Evaluation of specific loss estimates for all significant problem loans,

• Recovery experience,

• Peer comparison loss rates.

During second quarter 2013, after several months of evaluation, the Company changed to full migration analysis from the method of probability of default and loss given default, to determine the appropriate amount of general reserves. The Company believes the change provides a more granular analysis accounting for changes in the composition of the portfolio and credit quality deterioration. This method of analysis involves tracking the loss experience on a rolling population of loans over a period of several quarters and the collection and analysis of historical data to determine what rate of loss the Bank has incurred on similarly criticized loans and how the current portfolio could migrate to loss. The change in methodology did not have a material impact on the allowance for loan losses calculation.

A summary of the activity in the allowance for loan losses by major loan classification follows:

	For the year ended December 31, 2013
	Commercial and Other			Real Estate			Construction			Consumer			Unallocated			Total
Beginning balance	$	3,846		$	9,456		$	1,987		$	70		$	986		$	16,345
Charge-offs		(1,658	)		(407	)		—			(23	)		—			(2,088	)
Recoveries		982			360			60			8			—			1,410
Provision (reclassification)		1,943			(1,741	)		(554	)		13			589			250
Ending balance	$	5,113		$	7,668		$	1,493		$	68		$	1,575		$	15,917
	Balances as of December 31, 2013
	Commercial and Other			Real Estate			Construction			Consumer			Unallocated			Total
Ending allowance: collectively evaluated for impairment	$	5,095		$	7,667		$	1,455		$	68		$	1,575		$	15,860
Ending allowance: individually evaluated for impairment		18			1			38			—			—			57
Total ending allowance	$	5,113		$	7,668		$	1,493		$	68		$	1,575		$	15,917
Ending loan balance: collectively evaluated for impairment	$	386,332		$	495,924		$	98,627		$	3,878		$	—		$	984,761
Ending loan balance: individually evaluated for impairment		4,897			4,828			283			—			—			10,008
Total ending loan balance	$	391,229		$	500,752		$	98,910		$	3,878		$	—		$	994,769
	For the year ended December 31, 2012
	Commercial and Other			Real Estate			Construction			Consumer			Unallocated			Total
Beginning balance	$	2,776		$	8,267		$	2,104		$	87		$	1,707		$	14,941
Charge-offs		(1,401	)		(1,190	)		(1,054	)		(19	)		—			(3,664	)
Recoveries		1,917			55			1,188			8			—			3,168
Provision (reclassification)		554			2,324			(251	)		(6	)		(721	)		1,900
Ending balance	$	3,846		$	9,456		$	1,987		$	70		$	986		$	16,345
	Balances as of December 31, 2012
	Commercial and Other			Real Estate			Construction			Consumer			Unallocated			Total
Ending allowance: collectively evaluated for impairment	$	3,844		$	9,456		$	1,987		$	70		$	986		$	16,343
Ending allowance: individually evaluated for impairment		2			—			—			—			—			2
Total ending allowance	$	3,846		$	9,456		$	1,987		$	70		$	986		$	16,345
Ending loan balance: collectively evaluated for impairment	$	322,677		$	455,206		$	79,619		$	3,581		$	—		$	861,083
Ending loan balance: individually evaluated for impairment		4,039			6,034			101			—			—			10,174
Total ending loan balance	$	326,716		$	461,240		$	79,720		$	3,581		$	—		$	871,257
	For the year ended December 31, 2011
	Commercial and Other			Real Estate			Construction			Consumer			Unallocated			Total
Beginning balance	$	2,230		$	10,042		$	3,040		$	64		$	1,194		$	16,570
Charge-offs		(1,403	)		(5,555	)		(8,792	)		(54	)		—			(15,804	)
Recoveries		581			176			498			20			—			1,275
Provision (reclassification)		1,368			3,604			7,358			57			513			12,900
Ending balance	$	2,776		$	8,267		$	2,104		$	87		$	1,707		$	14,941

The 2013 ending allowance includes $57 in specific allowance for $10,008 of impaired loans ($8,705 net of government guarantees). At December 31, 2012, the Company had $10,174 of impaired loans ($9,493 net of government guarantees) with a specific allowance of $2 assigned. Management believes that the allowance for loan losses was adequate as of December 31, 2013. However, future loan losses may exceed the levels provided for in the allowance for loan losses and could possibly result in additional charges to the provision for loan losses.

Credit Quality Indicators

The Company uses the following loan grades, which are also often used by regulators when assessing the credit quality of a loan portfolio.

Pass – Credit exposure in this category range between the highest credit quality to average credit quality. Primary repayment sources generate satisfactory debt service coverage under normal conditions. Cash flow from recurring sources is expected to continue to produce adequate debt service capacity. There are many levels of credit quality contained in the pass definition, but none of the loans contained in this category rise to the level of special mention.

Special Mention – A special mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. The Bank strictly and carefully employs the FDIC definition in assessing assets that may apply to this category. It is apparent that in many cases asset weaknesses relevant to this definition either, (1) better fit a definition of a “well-defined weakness,” or (2) in our experience ultimately migrate to worse risk grade categories, such as Substandard and Doubtful. Consequently, management elects to downgrade most potential Special Mention credits to Substandard or Doubtful, and therefore adopts a conservative risk grade process in the use of the Special Mention risk grade.

Substandard – A substandard asset is inadequately protected by the current sound worth and paying capacity of the Borrower or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Loans in this category are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified substandard.

Doubtful – An asset classified doubtful has all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Management strives to consistently apply these definitions when allocating its loans by loan grade. The loan portfolio is continuously monitored for changes in credit quality and management takes appropriate action to update the loan risk ratings accordingly. Management has not changed the Company’s policy towards its use of credit quality indicators during the periods reported.

The following tables present the Company’s loan portfolio information by loan type and credit grade at December 31, 2013, and December 31, 2012:

Credit Quality Indicators

As of December 31, 2013

	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals
Real estate loans
Multi-family residential	$	44,677	$	—	$	1,540	$	—	$	46,217
Residential 1-4 family		37,831		—		8,607		—		46,438
Owner-occupied commercial		239,539		4,278		5,494		—		249,311
Nonowner-occupied commercial		153,055		—		5,731		—		158,786
Total real estate loans		475,102		4,278		21,372		—		500,752
Construction
Multi-family residential		23,419		—		—		—		23,419
Residential 1-4 family		26,145		—		367		—		26,512
Commercial real estate		28,978		—		1,538		—		30,516
Commercial bare land and acquisition & development		11,223		—		250		—		11,473
Residential bare land and acquisition & development		4,346		—		2,644		—		6,990
Total construction loans		94,111		—		4,799		—		98,910
Commercial and other		378,828		—		12,401		—		391,229
Consumer		3,856		—		22		—		3,878
Totals	$	951,897	$	4,278	$	38,594	$	—	$	994,769

Credit Quality Indicators

As of December 31, 2012

	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals
Real estate loans
Multi-family residential	$	43,883	$	—	$	1,329	$	—	$	45,212
Residential 1-4 family		43,458		—		7,979		—		51,437
Owner-occupied commercial		208,713		—		10,563		—		219,276
Nonowner-occupied commercial		141,762		—		3,553		—		145,315
Total real estate loans		437,816		—		23,424		—		461,240
Construction
Multi-family residential		17,022		—		—		—		17,022
Residential 1-4 family		20,278		—		112		—		20,390
Commercial real estate		21,646		—		1,589		—		23,235
Commercial bare land and acquisition & development		10,668		—		—		—		10,668
Residential bare land and acquisition & development		5,449		—		2,956		—		8,405
Total construction loans		75,063		—		4,657		—		79,720
Commercial and other		317,250		—		9,466		—		326,716
Consumer		3,544		—		37		—		3,581
Totals	$	833,673	$	—	$	37,584	$	—	$	871,257

Past Due and Nonaccrual Loans

The Company uses the terms “past due” and “delinquent” interchangeably. Amortizing loans are considered past due or delinquent based upon the number of contractually required payments not made. Delinquency status for all contractually matured loans, commercial and commercial real estate loans with non-monthly amortization, and all other extensions of credit is determined based upon the number of calendar months past due.

The following tables present an aged analysis of past due and nonaccrual loans at December 31, 2013, and December 31, 2012:

Aged Analysis of Loans Receivable

As of December 31, 2013

	30-59 Days Past Due Still Accruing		60-89 Days Past Due Still Accruing		Greater Than 90 Days Still Accruing		Nonaccrual		Total Past Due and Nonaccrual		Total Current		Total Loans Receivable
Real estate loans
Multi-family residential	$	—	$	—	$	—	$	—	$	—	$	46,217	$	46,217
Residential 1-4 family		137		—		—		636		773		45,665		46,438
Owner-occupied commercial		488		—		—		1,685		2,173		247,138		249,311
Nonowner-occupied commercial		1,188		—		—		136		1,324		157,462		158,786
Total real estate loans		1,813		—		—		2,457		4,270		496,482		500,752
Construction
Multi-family residential		—		—		—		—		—		23,419		23,419
Residential 1-4 family		—		—		—		—		—		26,512		26,512
Commercial real estate		—		—		—		—		—		30,516		30,516
Commercial bare land and acquisition & development		—		—		—		—		—		11,473		11,473
Residential bare land and acquisition & development		—		—		—		—		—		6,990		6,990
Total construction loans		—		—		—		—		—		98,910		98,910
Commercial and other		436		—		—		2,886		3,322		387,907		391,229
Consumer		5		1		—		—		6		3,872		3,878
Total	$	2,254	$	1	$	—	$	5,343	$	7,598	$	987,171	$	994,769

Aged Analysis of Loans Receivable

As of December 31, 2012

	30-59 Days Past Due Still Accruing		60-89 Days Past Due Still Accruing		Greater Than 90 Days Still Accruing		Nonaccrual		Total Past Due and Nonaccrual		Total Current		Total Loans Receivable
Real estate loans
Multi-family residential	$	—	$	—	$	—	$	—	$	—	$	45,212	$	45,212
Residential 1-4 family		351		318		—		1,140		1,809		49,628		51,437
Owner-occupied commercial		—		—		—		3,805		3,805		215,471		219,276
Nonowner-occupied commercial		1,404		—		—		—		1,404		143,911		145,315
Total real estate loans		1,755		318		—		4,945		7,018		454,222		461,240
Construction
Multi-family residential		—		—		—		—		—		17,022		17,022
Residential 1-4 family		234		—		—		—		234		20,156		20,390
Commercial real estate		—		—		—		—		—		23,235		23,235
Commercial bare land and acquisition & development		—		—		—		—		—		10,668		10,668
Residential bare land and acquisition & development		—		—		—		101		101		8,304		8,405
Total construction loans		234		—		—		101		335		79,385		79,720
Commercial and other		264		—		—		4,315		4,579		322,137		326,716
Consumer		8		—		—		—		8		3,573		3,581
Total	$	2,261	$	318	$	—	$	9,361	$	11,940	$	859,317	$	871,257

Impaired Loans

Regular credit reviews of the portfolio are performed to identify loans that are considered potentially impaired. Potentially impaired loans are referred to the ALCO Committee for review and are included in the specific calculation of allowance for loan losses. A loan is considered impaired when, based on current information and events, the Company is unlikely to collect all principal and interest due according to the terms of the loan agreement. When the amount of the impairment represents a confirmed loss it is charged off against the allowance for loan losses. Impaired loans are often reported net of government guarantees to the extent that the guarantees are expected to be collected. Impaired loans generally include all loans classified as nonaccrual and troubled debt restructurings.

Accrual of interest is discontinued on impaired loans when management believes that, after considering economic and business conditions and collection efforts, the borrower’s financial condition is such that collection of principal or interest is doubtful. Accrued, but uncollected interest is generally reversed when loans are placed on nonaccrual status. Interest income is subsequently recognized only to the extent cash payments are received satisfying all delinquent principal and interest amounts, and the prospects for future payments in accordance with the loan agreement appear relatively certain. In accordance with GAAP, payments received on nonaccrual loans are applied to the principal balance and no interest income is recognized. Interest income may be recognized on impaired loans that are not on nonaccrual status.

The following tables display an analysis of the Company’s impaired loans at December 31, 2013, and 2012:

Impaired Loan Analysis

As of December 31, 2013

	Recorded Investment With No Specific Allowance Valuation		Recorded Investment With Specific Allowance Valuation		Recorded Investment		Unpaid Principal Balance		Average Recorded Investment		Related Specific Allowance Valuation
Real estate
Multi-family residential		—		—		—		—		—		—
Residential 1-4 family		912		317		1,229		1,633		2,229		1
Owner-occupied commercial		2,767		—		2,767		3,000		3,359		—
Nonowner-occupied commercial		832		—		832		835		799		—
Total real estate loans		4,511		317		4,828		5,468		6,387		1
Construction
Multi-family residential		—		—		—		—		—		—
Residential 1-4 family		—		—		—		—		—		—
Commercial real estate		—		—		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—		133		—
Residential bare land and acquisition & development		—		283		283		373		413		38
Total construction loans		—		283		283		373		546		38
Commercial and other		4,368		529		4,897		10,627		4,100		18
Consumer		—		—		—		—		—		—
Total impaired loans	$	8,879	$	1,129	$	10,008	$	16,468	$	11,033	$	57

Impaired Loan Analysis

As of December 31, 2012

	Recorded Investment With No Specific Allowance Valuation		Recorded Investment With Specific Allowance Valuation		Recorded Investment		Unpaid Principal Balance		Average Recorded Investment		Related Specific Allowance Valuation
Real estate
Multi-family residential		—		—		—		—		—		—
Residential 1-4 family		1,447		—		1,447		2,032		3,086		—
Owner-occupied commercial		4,229		—		4,229		5,069		4,838		—
Nonowner-occupied commercial		358		—		358		358		165		—
Total real estate loans		6,034		—		6,034		7,459		8,089		—
Construction
Multi-family residential		—		—		—		—		—		—
Residential 1-4 family		—		—		—		—		544		—
Commercial real estate		—		—		—		—		1,219		—
Commercial bare land and acquisition & development		—		—		—		—		5,621		—
Residential bare land and acquisition & development		101		—		101		173		1,024		—
Total construction loans		101		—		101		173		8,408		—
Commercial and other		3,921		118		4,039		9,546		5,204		2
Consumer		—		—		—		—		—		—
Total impaired loans	$	10,056	$	118	$	10,174	$	17,178	$	21,701	$	2

The impaired balances reported above are not adjusted for government guarantees of $1,532 and $681 at December 31, 2013, and December 31, 2012, respectively. The recorded investment in impaired loans, net of government guarantees totaled $8,476 and $9,493 at December 31, 2013, and December 31, 2012, respectively.

Troubled Debt Restructurings

In the normal course of business, the Company may modify the terms of certain loans, attempting to protect as much of its investment as possible. Management evaluates the circumstances surrounding each modification to determine whether it is a troubled debt restructuring (“TDR”). TDRs exist when 1) the restructuring constitutes a concession, and 2) the debtor is experiencing financial difficulties. The Company adopted the amendments of Accounting Standards Update No. 2012-02, “Receivables – A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring” during the third quarter 2012. The Update requires retrospective application to the beginning of the annual period of adoption.

The following table displays the Company’s TDRs by class at December 31, 2013, and 2012:

	Troubled Debt Restructurings as of
	December 31, 2013				December 31, 2012
	Number of Contracts		Outstanding Recorded Investment		Number of Contracts		Outstanding Recorded Investment
Real estate
Multifamily residential		—	$	—		—	$	—
Residential 1-4 family		7		819		8		565
Owner-occupied commercial		5		1,949		5		2,095
Non owner-occupied commercial		2		714		1		140
Total real estate loans		14		3,482		14		2,800
Construction
Multifamily residential		—		—		—		—
Residential 1-4 family		—		—		—		—
Commercial real estate		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—
Residential bare land and acquisition & development		—		—		5		101
Total construction loans		—		—		5		101
Commercial and other		10		2,379		8		589
Consumer		—		—		—		—
		24	$	5,861		27	$	3,490

The recorded investment in TDRs in nonaccrual status totaled $1,597 and $2,336 at December 31, 2013, and December 31, 2012, respectively. The Bank’s policy is that loans placed on non-accrual will typically remain on non-accrual status until all principal and interest payments are brought current and the prospect for future payment in accordance with the loan agreement appear relatively certain. The Bank’s policy generally refers to six months of payment performance as sufficient to warrant a return to accrual status.

For the twelve months ended December 31, 2013, the Company identified 10 TDRs that are newly considered impaired for which impairment was previously measured under the Company’s general loan loss allowance methodology. The total recorded investment in such receivables was $3,130, and the associated allowance for loan losses was $19 at December 31, 2013.

The types of modifications offered can generally be described in the following categories:

Rate Modification—A modification in which the interest rate is modified.

Term Modification—A modification in which the maturity date, timing of payments, or frequency of payments is changed.

Interest Only Modification—A modification in which the loan is converted to interest only payments for a period of time.

Combination Modification—Any other type of modification, including the use of multiple types of modifications.

The following tables present newly non-covered restructured loans that occurred during the twelve months ended December 31, 2013, and 2012, respectively:

	Troubled Debt Restructurings
	Identified during the twelve months ended December 31, 2013
	Rate Modification		Term Modification		Interest Only Modification		Combination Modification
Real estate
Multifamily residential	$	—	$	—	$	—	$	—
Residential 1-4 family		317		—		—		—
Owner-occupied commercial		—		—		—		—
Non owner-occupied commercial		578		—		—		—
Total real estate loans		895		—		—		—
Construction
Multifamily residential		—		—		—		—
Residential 1-4 family		—		—		—		—
Commercial real estate		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—
Residential bare land and acquisition & development		—		—		—		—
Total construction loans		—		—		—		—
Commercial and other		—		773		524		674
Consumer		—		—		—		—
	$	895	$	773	$	524	$	674

	Troubled Debt Restructurings
	Identified during the twelve months ended December 31, 2012
	Rate Modification		Term Modification		Interest Only Modification		Combination Modification
Real estate
Multifamily residential	$	—	$	—	$	—	$	—
Residential 1-4 family		—		—		121		—
Owner-occupied commercial		—		112		—		303
Non owner-occupied commercial		—		—		—		—
Total real estate loans		—		112		121		303
Construction
Multifamily residential		—		—		—		—
Residential 1-4 family		—		—		—		—
Commercial real estate		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—
Residential bare land and acquisition & development		—		127		—		—
Total construction loans		—		127		—		—
Commercial and other		—		228		230		69
Consumer		—		—		—		—
	$	—	$	467	$	351	$	372

Subsequent to a loan being classified as a TDR, a borrower may become unwilling or unable to abide by the terms of the modified agreement. In such cases of default, the Company takes appropriate action to secure additional payments including the use of foreclosure proceedings. The following table presents loans receivable modified as troubled debt restructurings that subsequently defaulted within twelve months during the period:

	Troubled Debt Restructurings
	That Subsequently Defaulted within the
	12 Month Period Ended December 31,
	2013				2012
	Number of Contracts		Recorded Investment		Number of Contracts		Recorded Investment
Real estate
Multifamily residential		—	$	—		—	$	—
Residential 1-4 family		—		—		2		340
Owner-occupied commercial		1		303		1		411
Non owner-occupied commercial		1		136		—		—
Total real estate loans		2		439		3		751
Construction
Multifamily residential		—		—		—		—
Residential 1-4 family		—		—		—		—
Commercial real estate		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—
Residential bare land and acquisition & development		—		—		—		—
Total construction loans		—		—		—		—
Commercial and other		3		144		1		194
Consumer		—		—		—		—
		5	$	583		4	$	945

At December 31, 2013, and December 31, 2012, the Company had no commitments to lend additional funds on loans restructured as TDRs.

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Loans, Allowance for Loan Losses, and Credit Quality Indicators - Analysis of Impaired Loans (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Specific Allowance Valuation	$ 8,879	$ 10,056
Recorded Investment With Specific Allowance Valuation	1,129	118
Recorded Investment	10,008	10,174
Unpaid Principal Balance	16,468	17,178
Average Recorded Investment	11,033	21,701
Related Specific Allowance Valuation	57	2
Commercial and other [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Specific Allowance Valuation	4,368	3,921
Recorded Investment With Specific Allowance Valuation	529	118
Recorded Investment	4,897	4,039
Unpaid Principal Balance	10,627	9,546
Average Recorded Investment	4,100	5,204
Related Specific Allowance Valuation	18	2
Consumer loans [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Specific Allowance Valuation
Recorded Investment With Specific Allowance Valuation
Recorded Investment
Unpaid Principal Balance
Average Recorded Investment
Related Specific Allowance Valuation
Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Specific Allowance Valuation	4,511	101
Recorded Investment With Specific Allowance Valuation	317
Recorded Investment	4,828	101
Unpaid Principal Balance	5,468	173
Average Recorded Investment	6,387	8,408
Related Specific Allowance Valuation	1
Real Estate [Member] | Multi-family residential [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Specific Allowance Valuation
Recorded Investment With Specific Allowance Valuation
Recorded Investment
Unpaid Principal Balance
Average Recorded Investment
Related Specific Allowance Valuation
Real Estate [Member] | Residential 1-4 family [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Specific Allowance Valuation	912
Recorded Investment With Specific Allowance Valuation	317
Recorded Investment	1,229
Unpaid Principal Balance	1,633
Average Recorded Investment	2,229	544
Related Specific Allowance Valuation	1
Real Estate [Member] | Owner-occupied commercial [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Specific Allowance Valuation	2,767
Recorded Investment With Specific Allowance Valuation
Recorded Investment	2,767
Unpaid Principal Balance	3,000
Average Recorded Investment	3,359
Related Specific Allowance Valuation
Real Estate [Member] | Nonowner-occupied commercial [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Specific Allowance Valuation	832
Recorded Investment With Specific Allowance Valuation
Recorded Investment	832
Unpaid Principal Balance	835
Average Recorded Investment	799
Related Specific Allowance Valuation
Real Estate [Member] | Aged Analysis of Loans Receivable [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Specific Allowance Valuation
Recorded Investment With Specific Allowance Valuation
Recorded Investment
Unpaid Principal Balance
Average Recorded Investment		1,219
Related Specific Allowance Valuation
Real Estate [Member] | Commercial bare land and acquisition & development [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Specific Allowance Valuation
Recorded Investment With Specific Allowance Valuation
Recorded Investment
Unpaid Principal Balance
Average Recorded Investment		5,621
Related Specific Allowance Valuation
Real Estate [Member] | Residential bare land and acquisition & development [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Specific Allowance Valuation		101
Recorded Investment With Specific Allowance Valuation
Recorded Investment		101
Unpaid Principal Balance		173
Average Recorded Investment		1,024
Related Specific Allowance Valuation
Construction [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Specific Allowance Valuation		6,034
Recorded Investment With Specific Allowance Valuation	283
Recorded Investment	283	6,034
Unpaid Principal Balance	373	7,459
Average Recorded Investment	546	8,089
Related Specific Allowance Valuation	38
Construction [Member] | Multi-family residential [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Specific Allowance Valuation
Recorded Investment With Specific Allowance Valuation
Recorded Investment
Unpaid Principal Balance
Average Recorded Investment
Related Specific Allowance Valuation
Construction [Member] | Residential 1-4 family [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Specific Allowance Valuation		1,447
Recorded Investment With Specific Allowance Valuation
Recorded Investment		1,447
Unpaid Principal Balance		2,032
Average Recorded Investment		3,086
Related Specific Allowance Valuation
Construction [Member] | Owner-occupied commercial [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Specific Allowance Valuation		4,229
Recorded Investment With Specific Allowance Valuation
Recorded Investment		4,229
Unpaid Principal Balance		5,069
Average Recorded Investment		4,838
Related Specific Allowance Valuation
Construction [Member] | Nonowner-occupied commercial [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Specific Allowance Valuation		358
Recorded Investment With Specific Allowance Valuation
Recorded Investment		358
Unpaid Principal Balance		358
Average Recorded Investment		165
Related Specific Allowance Valuation
Construction [Member] | Aged Analysis of Loans Receivable [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Specific Allowance Valuation
Recorded Investment With Specific Allowance Valuation
Recorded Investment
Unpaid Principal Balance
Average Recorded Investment
Related Specific Allowance Valuation
Construction [Member] | Commercial bare land and acquisition & development [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Specific Allowance Valuation
Recorded Investment With Specific Allowance Valuation
Recorded Investment
Unpaid Principal Balance
Average Recorded Investment	133
Related Specific Allowance Valuation
Construction [Member] | Residential bare land and acquisition & development [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Specific Allowance Valuation
Recorded Investment With Specific Allowance Valuation	283
Recorded Investment	283
Unpaid Principal Balance	373
Average Recorded Investment	413
Related Specific Allowance Valuation	$ 38

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Income Taxes - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Tax Credit Carryforward [Line Items]
Reduction in taxes payable	$ 0	$ 10	$ 14
Purchased tax credits	1,669
2019 [Member]
Tax Credit Carryforward [Line Items]
Unused tax credits expiration amount	218
2020 [Member]
Tax Credit Carryforward [Line Items]
Unused tax credits expiration amount	664
2021 [Member]
Tax Credit Carryforward [Line Items]
Unused tax credits expiration amount	521
2022 [Member]
Tax Credit Carryforward [Line Items]
Unused tax credits expiration amount	261
2023 [Member]
Tax Credit Carryforward [Line Items]
Unused tax credits expiration amount	3
2024 [Member]
Tax Credit Carryforward [Line Items]
Unused tax credits expiration amount	$ 3
Minimum [Member]
Tax Credit Carryforward [Line Items]
Purchase tax credits recognized period	5 years
Maximum [Member]
Tax Credit Carryforward [Line Items]
Purchase tax credits recognized period	8 years

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Property and Equipment - Schedule of Property and Equipment Net (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 35,294	$ 34,327
less: accumulated depreciation & amortization	(16,458)	(15,089)
Net property and equipment	18,836	19,238
Land [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	3,831	3,831
Buildings and improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	19,039	18,702
Furniture and equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 12,424	$ 11,794

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Parent Company Financial Information

12 Months Ended

Dec. 31, 2013

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Parent Company Financial Information

NOTE 20 – PARENT COMPANY FINANCIAL INFORMATION:

Financial information for Pacific Continental Corporation (Parent Company only) is presented below:

BALANCE SHEETS

	December 31,
	2013			2012		2011
Assets:
Cash deposited with the Bank	$	2,941		$	2,465	$	7,273
Deferred tax asset		(158	)		—		—
Prepaid expenses		14			16		11
Equity in Trust		248			248		248
Swap unrealized gain		405			—		—
Investment in the Bank		184,039			188,935		179,618
	$	187,489		$	191,664	$	187,150
Liabilities and shareholders’ equity:
Liabilities	$	57		$	35	$	36
Junior subordinated debentures		8,248			8,248		8,248
Shareholders’ equity		179,184			183,381		178,866
	$	187,489		$	191,664	$	187,150

STATEMENTS OF OPERATIONS

For the Years Ended December 31

	2013		2012		2011
Income:
Cash dividends from the Bank	$	13,995	$	6,755	$	15
		13,995		6,755		15
Expenses:
Interest expense		200		151		136
Investor relations		123		124		112
Legal, registration expense, and other		177		128		55
Personnel costs paid to Bank		152		151		140
		652		554		443
Income (loss) before income tax expense and equity in undistributed earnings (loss) from the Bank		13,343		6,201		(428	)
Income tax benefit		159		193		162
Equity in undistributed earnings of the Bank		265		6,259		5,607
Net income	$	13,767	$	12,653	$	5,341

STATEMENTS OF CASH FLOWS

For the Years Ended December 31

	2013			2012			2011
Cash flows from operating activities:
Net income	$	13,767		$	12,653		$	5,341
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings from the Bank		(265	)		(6,259	)		(5,607	)
Excess tax benefit of stock options exercised		—			(10	)		(14	)
Other, net		342			98			(141	)
Net cash used in operating activities		13,844			6,482			(421	)
Cash flows from financing activities:
Proceeds from stock options exercised		—			69			89
Income tax benefit for stock options exercised		—			10			14
Repurchase of common stock		—			(5,676	)		—
Dividends paid		(13,050	)		(5,588	)		(1,842	)
Vested RSUs surrendered to cover tax consequences		(318	)		(105	)		—
Net cash provided by (used in) financing activities		(13,368	)		(11,290	)		(1,739	)
Net increase (decrease) in cash		476			(4,808	)		(2,160	)
Cash, beginning of period		2,465			7,273			9,433
Cash, end of period	$	2,941		$	2,465		$	7,273

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Deposits - Scheduled Maturities or Repricing of Time Deposits (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Time Deposits [Abstract]
2013		$ 94,974
2014	86,821	8,862
2015	13,501	14,282
2016	15,431	13,480
2017	14,609	5,792
2018	8,592	4,050
Thereafter	25,504	20,196
Total maturities or repricing of time deposits	$ 164,458	$ 161,636

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Provision for Income Taxes

The provision for income taxes for the years ended December 31 consists of the following:

	2013			2012			2011
Currently payable:
Federal	$	6,682		$	6,423		$	245
State		(209	)		50			50
		6,473			6,473			295
Deferred:
Federal		(496	)		(1,152	)		713
State		1,239			838			710
		743			(314	)		1,423
Total income tax provision	$	7,216		$	6,159		$	1,718

Provision (Benefit) for Income Taxes Results in Effective Tax Rates

The provision (benefit) for income taxes results in effective tax rates which are different than the federal income tax statutory rate. The nature of the differences for the years ended December 31 was as follows:

	2013					2012					2011
Expected federal income tax provision	$	7,344		35.00	%	$	6,584		35.00	%	$	2,471		35.00	%
State income tax, net of federal income tax effect		908		4.33	%		775		4.12	%		298		4.22	%
Municipal securities tax benefit		(735	)	-3.50	%		(631	)	-3.35	%		(422	)	-5.98	%
Equity-based compensation		27		0.13	%		25		0.13	%		68		0.96	%
Benefit of purchased tax credits		(150	)	-0.71	%		(181	)	-0.96	%		(289	)	-4.09	%
Low-income housing tax credits		(142	)	-0.68	%		(142	)	-0.75	%		(142	)	-2.01	%
Bank Owned Life Insurance		(201	)	-0.96	%		(228	)	-1.21	%		—		—
Acquisition Costs—Century Bank		106		0.51	%		—		—			—		—
Deferred tax rate adjustments and other		59		0.28	%		(43	)	-0.24	%		(266	)	-3.77	%
Income tax provision	$	7,216		34.40	%	$	6,159		32.74	%	$	1,718		24.33	%

Components of Deferred Tax Assets and Liabilities

The components of deferred tax assets and liabilities at December 31 are as follows:

	2013		2012
Assets:
Allowance for loan losses	$	6,916	$	6,508
Basis adjustments on loans		2,252		1,720
Reserve for self-funded insurance		180		183
Oregon purchased tax credits		1,669		2,951
Nonqualified stock options		1,278		957
Accrued compensation		724		647
OTTI credit impairment		89		80
Nonaccrual loan interest		52		21
Net unrealized loss on securities		95		—
Other		61		47
Total deferred tax assets		13,316		13,114
Liabilities:
Federal Home Loan Bank stock dividends		593		595
Excess tax over book depreciation		1,299		1,446
Prepaid expenses		345		362
NWBF acquisition adjustments		225		—
Loan origination fees		1,046		881
Net unrealized gains on Swap		158		—
Net unrealized gains on securities		52		3,600
Total deferred tax liabilities		3,718		6,884
Net deferred tax assets	$	9,598	$	6,230

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Income Taxes

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 13 – INCOME TAXES:

The provision for income taxes for the years ended December 31 consists of the following:

	2013			2012			2011
Currently payable:
Federal	$	6,682		$	6,423		$	245
State		(209	)		50			50
		6,473			6,473			295
Deferred:
Federal		(496	)		(1,152	)		713
State		1,239			838			710
		743			(314	)		1,423
Total income tax provision	$	7,216		$	6,159		$	1,718

The provision (benefit) for income taxes results in effective tax rates which are different than the federal income tax statutory rate. The nature of the differences for the years ended December 31 was as follows:

	2013					2012					2011
Expected federal income tax provision	$	7,344		35.00	%	$	6,584		35.00	%	$	2,471		35.00	%
State income tax, net of federal income tax effect		908		4.33	%		775		4.12	%		298		4.22	%
Municipal securities tax benefit		(735	)	-3.50	%		(631	)	-3.35	%		(422	)	-5.98	%
Equity-based compensation		27		0.13	%		25		0.13	%		68		0.96	%
Benefit of purchased tax credits		(150	)	-0.71	%		(181	)	-0.96	%		(289	)	-4.09	%
Low-income housing tax credits		(142	)	-0.68	%		(142	)	-0.75	%		(142	)	-2.01	%
Bank Owned Life Insurance		(201	)	-0.96	%		(228	)	-1.21	%		—		—
Acquisition Costs—Century Bank		106		0.51	%		—		—			—		—
Deferred tax rate adjustments and other		59		0.28	%		(43	)	-0.24	%		(266	)	-3.77	%
Income tax provision	$	7,216		34.40	%	$	6,159		32.74	%	$	1,718		24.33	%

The excess tax benefit associated with stock option plans reduced taxes payable by $0, $10, and $14, at December 31, 2013, 2012, and 2011, respectively. Such benefit is credited to common stock.

The components of deferred tax assets and liabilities at December 31 are as follows:

	2013		2012
Assets:
Allowance for loan losses	$	6,916	$	6,508
Basis adjustments on loans		2,252		1,720
Reserve for self-funded insurance		180		183
Oregon purchased tax credits		1,669		2,951
Nonqualified stock options		1,278		957
Accrued compensation		724		647
OTTI credit impairment		89		80
Nonaccrual loan interest		52		21
Net unrealized loss on securities		95		—
Other		61		47
Total deferred tax assets		13,316		13,114
Liabilities:
Federal Home Loan Bank stock dividends		593		595
Excess tax over book depreciation		1,299		1,446
Prepaid expenses		345		362
NWBF acquisition adjustments		225		—
Loan origination fees		1,046		881
Net unrealized gains on Swap		158		—
Net unrealized gains on securities		52		3,600
Total deferred tax liabilities		3,718		6,884
Net deferred tax assets	$	9,598	$	6,230

Purchased tax credits of $1,669 will be utilized to offset future state income taxes. These credits are recognized over a five-year period beginning in the year of purchase and have an eight year carry forward period. If unused the credits will expire in the following years: $218 in 2019, $664 in 2020, $521 in 2021, $261 in 2022, $3 in 2023 and $3 in 2024. It is anticipated that all credits and other deferred asset items will be fully utilized in the normal course of operations and, accordingly, management has not reduced deferred tax assets by a valuation allowance.

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Regulatory Matters - Schedule of Compliance with Regulatory Capital Requirements (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Tier 1 capital (to leverage assets), Actual Ratio	4.00%
Bank [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total capital (to risk weighted assets), Actual Amount	$ 174,311	$ 173,225
Total capital (to risk weighted assets), Actual Ratio	15.89%	17.90%
Tier 1 capital (to risk weighted assets), Actual Amount	160,572	161,073
Tier 1 capital (to risk weighted assets), Actual Ratio	14.64%	16.64%
Tier 1 capital (to leverage assets), Actual Amount	160,572	161,073
Tier 1 capital (to leverage assets), Actual Ratio	11.29%	12.15%
Total capital (to risk weighted assets), For Capital Adequacy Purposes Amount	87,744	77,426
Tier 1 capital (to risk weighted assets), For Capital Adequacy Purposes Amount	43,872	38,713
Tier 1 capital (to leverage assets), For Capital Adequacy Purposes Amount	56,887	53,019
Total capital (to risk weighted assets), For Capital Adequacy Purposes Ratio	8.00%	8.00%
Tier 1 capital (to risk weighted assets), For Capital Adequacy Purposes Ratio	4.00%	4.00%
Tier 1 capital (to leverage assets), For Capital Adequacy Purposes Ratio	4.00%	4.00%
Total capital (to risk weighted assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	109,680	96,783
Tier 1 capital (to risk weighted assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	65,808	58,070
Tier 1 capital (to leverage assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	71,109	66,273
Total capital (to risk weighted assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	10.00%	10.00%
Tier 1 capital (to risk weighted assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	6.00%	6.00%
Tier 1 capital (to leverage assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	5.00%	5.00%
Company [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total capital (to risk weighted assets), Actual Amount	177,209	175,671
Total capital (to risk weighted assets), Actual Ratio	16.15%	18.15%
Tier 1 capital (to risk weighted assets), Actual Amount	163,470	163,519
Tier 1 capital (to risk weighted assets), Actual Ratio	14.90%	16.90%
Tier 1 capital (to leverage assets), Actual Amount	$ 163,470	$ 163,519
Tier 1 capital (to leverage assets), Actual Ratio	11.49%	12.33%
Total capital (to risk weighted assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	10.00%