EX-99.1 2 d137490dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

NEWS RELEASE

 

FOR MORE INFORMATION CONTACT:    Michael Dunne
   Public Information Officer
   541-338-1428
   www.therightbank.com
   Email: michael.dunne@therightbank.com

FOR IMMEDIATE RELEASE

Pacific Continental Corporation Reports Second Quarter Results

Record Loan Growth and Margin Stability Drive Quality Balance Sheet Expansion

EUGENE, Ore., July 20, 2016 – Pacific Continental Corporation (Nasdaq: PCBK), the holding company of Pacific Continental Bank, today reported financial results for the second quarter ended June 30, 2016.

Second Quarter highlights:

 

  •   Total assets surpassed $2.0 billion for the first time.

 

  •   Record quarterly loan growth of $54.8 million.

 

  •   Announced agreement on April 27, 2016 to acquire Foundation Bank, a $422 million bank in Bellevue, WA.

 

  •   Tax-equivalent net interest margin of 4.27%, compared to 4.27% for the first quarter 2016.

 

  •   Net income of $2.6 million, or $0.13 per diluted share.

 

  •   Completed an offering for $35 million of subordinated debt on June 27, 2016 with a coupon of 5.875%.

 

  •   Declared third quarter 2016 regular quarterly cash dividend of $0.11 per share.

 

  •   Grand opening of our new office in Vancouver, WA.

 

  •   Recognized by Seattle Business Magazine as one of the Top 100 Companies for the 6th consecutive year.

 

  •   Recognized by Smart Asset as the #7 best performing public company in Oregon.

Net Income Highlights

Net income for the second quarter 2016 of $2.6 million, or $0.13 per diluted share, included non-core costs associated with our pending acquisition of Foundation Bank, which were approximately $2.0 million, or $0.07 per diluted share. In addition, we reported in our first quarter 2016 10-Q that we had reached a tentative settlement on our pending litigation, subject to court approval, which we do not expect to have an material impact on our financial condition. Legal costs associated with the litigation were $195 thousand during the second quarter, or about $0.01 per diluted share. Additionally, we incurred unusually higher costs associated with our partially self-funded group insurance plan due to several large claims. Our healthcare costs during the second quarter 2016 were approximately $550 thousand higher than our actuarial forecast, which equates to approximately $0.02 per share. Lastly, our provision expense for the second quarter 2016 was higher than normal due to record loan growth, as well as provisions associated with minor charge-offs and primarily one downgrade. The provision expense related to the downgrade and charge-offs equated to approximately $1.3 million, or $0.04 per diluted share, of our $2.0 million of provision expense for the quarter.

Annualized returns on average assets, average equity and average tangible equity for second quarter 2016 were 0.53%, 4.67%, and 5.80%, respectively, compared to 1.12%, 9.92%, and 12.35% for first quarter 2016. Annualized returns on average assets, average equity, and average tangible equity for the six months ended June 30, 2016 were 0.82%, 7.28%, and 9.05%, respectively, compared to 0.94%, 7.89%, and 9.68% for the same time period in 2015.

“We are very proud of the many significant achievements that took place during the second quarter,” said Roger Busse, chief executive officer. “We have a talented team of management and staff that are uniformly focused on strategic growth and building future earnings strength and value.”

Second quarter 2016 noninterest income was $1.7 million, basically flat from the first quarter 2016. The minor decrease in linked-quarter noninterest income of $60 thousand was due to gains on sales of securities, which were $166 thousand lower than the first quarter 2016.

Noninterest expense for the second quarter 2016 was $14.9 million, an increase of $2.9 million from the first quarter of 2016. As discussed above, the increase resulted primarily from extraordinary items, including costs associated with the pending acquisition of Foundation Bank, legal costs related to litigation, and high claim activity on our partially self-funded insurance plan. We incurred approximately $240 thousand in expenses, reported in legal and professional fees, related to the annual stock grant to our board of directors.

Net Interest Margin

The second quarter 2016 net interest margin was 4.27%, equal to the net interest margin from the first quarter 2016.

Accretion income for the second quarter 2016 was $156 thousand compared to $409 thousand for the first quarter 2016. As outlined below, the core margin was 4.20% for the second quarter 2016 compared to 4.17% for the first quarter 2016.

 

     Second Quarter 2016     First Quarter 2016  
     Average
Balance		      Income
  (Expense)  		         Yield         Average
Balance		      Income
  (Expense)  		         Yield      

Federal funds sold and interest-bearing deposits

    $ 14,393       $ 19        0.53 %    $ 34,380       $ 45        0.53 % 

Federal Home Loan Bank stock

      7,004         20        1.15 %      4,058         28        2.78 % 

Securities available-for-sale(1)

      385,777         2,550        2.66 %      379,001         2,422        2.57 % 

Net loans(2)

      1,444,956         17,891        4.98 %      1,403,115         17,480        5.01 % 
  

 

 

     

 

 

      

 

 

     

 

 

    

Earning assets

      1,852,130         20,480        4.45 %      1,820,554         19,975        4.41 % 

Interest bearing liabilities

      1,121,088         (1,137 )      -0.41 %      1,110,173         (1,083 )      -0.39 % 

Core margin (non-GAAP)

      1,852,130         19,343        4.20 %      1,820,554         18,892        4.17 % 

Acquired loan accretion

         156        0.03 %         409        0.09 % 

Prepayment penalties on loans

         166        0.04 %         84        0.02 % 

Prepayment penalties on brokered deposits

         —          0.00 %         (61 )      -0.01 % 
  

 

 

     

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Net interest margin

    $ 1,852,130       $ 19,665        4.27 %    $ 1,820,554       $ 19,324        4.27 % 
  

 

 

     

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

 

(1)  Tax-exempt security 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 $256 and $257 for the three months ended June 30, 2016 and March 31, 2016, respectively. Net interest margin was positively impacted by 6 basis points in each period.
(2) Tax-exempt loan 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 $262 and $258 for the three months ended June 30, 2016 and March 31, 2016, respectively. Net interest margin was positively impacted by 6 basis points in each period.

Balance Sheet Highlights

Gross loans grew by $54.8 million in second quarter 2016, and totaled $1.49 billion at June 30, 2016. Second quarter loan growth marked the highest quarterly growth in our history. This loan growth came primarily from the non-owner occupied commercial real estate, real estate construction, and commercial loan categories. Net loan growth occurred in the Eugene, Portland, and National Health-care markets, with a slight contraction in the Seattle market due to normal amortizations and anticipated payoffs outpacing new loan production. Gross loan growth through the first six months of 2016 was $80.1 million, or 11.52% annualized. At June 30, 2016, loans to dental practitioners increased to $369.8 million and represented 24.88% of the loan portfolio. Loans to dental practitioners represented 24.52% of the loan portfolio at March 31, 2016.

Period-end Company-defined core deposits at June 30, 2016, were $1.51 billion, a decrease of $125.9 million from the first quarter 2016. Approximately 65% of the deposit decrease came from one client relationship. As we have disclosed in previous 10-Q filings, we had a large local client that was purchased by a national entity. Based on initial conversations with the buyer, we anticipated that the deposit funds would remain until sometime in 2017; however this client accelerated the withdrawal during the second quarter. We had already excluded this deposit relationship from our liquidity analysis and have contingency plans in place to replace the funds. Another 25% of the deposit decrease related to the withdrawal of excess funds held by a large client relationship which had placed a large deposit of sales proceeds into the Bank during the first quarter 2016. In the first half of 2016, this client has grown its deposit relationship by $15.2 million. The remainder of the deposit decrease relates to normal seasonal fluctuations, primarily from our large construction industry clients. At June 30, 2016, noninterest-bearing demand deposits totaled $624.1 million and represented 41.39% of Company-defined core deposits. Cost of funds on core interest-bearing deposits was 0.26% for

the second quarter 2016, unchanged from first quarter 2016. In the first half of 2016, core-deposits have decreased by $25.9 million and total deposits have increased by $3.0 million. Deposit run-off and earning asset growth were funded with a combination of overnight borrowings from the Federal Home Loan Bank of Des Moines (FHLB) and Brokered Certificates of Deposit (Brokered CD’s). The brokered CD’s totaled $28.8 million and were laddered into 2 – 4 year term buckets, with a blended rate of 1.25%.

“We are proud of our outstanding team of bankers as they produced record loan growth for the second quarter”, said Casey Hogan, chief operating officer. “While deposits declined, these decreases came from a very limited number of clients, and were mostly expected. We continue to focus on growing earning assets and driving future revenue.”

Asset Quality

As of June 30, 2016, the allowance for loan losses as a percentage of outstanding loans was 1.29%, an increase from the 1.23% reported at March 31, 2016. At June 30, 2016, the allowance for loan losses as a percentage of nonperforming loans, net of government guarantees, increased to 1,172.72% from 666.01% at March 31, 2016. During the second quarter 2016, the Company recorded net loan losses of $419 thousand, compared to net recoveries of $50 thousand during the first quarter 2016. During the second quarter, the Company made a $2.0 million provision for loan losses compared to $245 thousand in the first quarter 2016. Second quarter 2016 provision for loan losses was primarily related to the record loan growth experienced during the quarter, along with the impact of $419 thousand in net loan losses, and the impact of downgrading one lending relationship of $2.3 million.

At June 30, 2016, nonperforming assets, net of government guarantees, totaled $13.7 million, or 0.68% of total assets, compared to $14.4 million, or 0.73% of total assets at March 31, 2016. Nonperforming assets at June 30, 2016, were comprised of $1.6 million of nonperforming loans, net of government guarantees of $2.7 million, and $12.1 million in other real estate owned. Loans past-due 30-89 days were 0.02% of total loans at June 30, 2016, compared to 0.07% of total loans at March 31, 2016.

Capital Adequacy

The Company’s consolidated capital ratios continued to be above the minimum thresholds for the FDIC’s “well-capitalized” designation. At June 30, 2016, the Company’s capital ratios were as follows:

 

     June 30, 2016  

Minimum dollar requirements

    Pacific
Continental
Corporation		     Regulatory
Minimum
(Well-Capitalized)		           Excess        

Tier I capital (to leverage assets)

    $ 186,654      $ 97,038      $ 89,616   

Common equity tier 1 capital (to risk weighted assets)

    $ 178,654      $ 115,333      $ 63,321   

Tier I capital (to risk weighted assets)

    $ 186,654      $ 141,948      $ 44,706   

Total capital (to risk weighted assets)

    $ 240,233      $ 177,435      $ 62,798   

Minimum percentage requirements

    Pacific
Continental
Corporation		     Regulatory
Minimum
(Well-Capitalized)		        

Tier I capital (to leverage assets)

      9.62 %      5.00 %   

Common equity tier 1 capital (to risk weighted assets)

      10.07 %      6.50 %   

Tier I capital (to risk weighted assets)

      10.52 %      8.00 %   

Total capital (to risk weighted assets)

      13.54 %      10.00 %   

Non-GAAP Financial Measures

In addition to results presented in accordance with generally accepted accounting principles (GAAP), this press release contains certain non-GAAP financial measures. The Company believes that such non-GAAP financial measures provide investors with information useful in understanding the Company’s financial performance; however, readers of this release are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported.

Financial measures such as tangible shareholders’ equity, and tangible assets, are considered non-GAAP measures. Management believes including non-GAAP measures along with GAAP measures provides investors with a broader understanding of capital adequacy, funding sources and revenue trends. Tangible shareholders’ equity is calculated as total shareholders’ equity less goodwill and core deposit intangible assets. Additionally, tangible assets are calculated as total assets less goodwill and core deposit intangible assets.

The following table presents a reconciliation of ending total shareholders’ equity (GAAP) to ending tangible shareholders’ equity (non-GAAP), and total assets (GAAP) to total tangible assets (non-GAAP):

 

           June 30,                  March 31,                  June 30,        
     2016      2016      2015  
     (In thousands)  

Total shareholders’ equity

    $ 226,426       $ 224,879       $ 212,015   

Subtract:

         

Goodwill

      40,027         40,027         39,075   

Core deposit intangible assets

      3,657         3,781         4,150   
  

 

 

     

 

 

     

 

 

  

Tangible shareholders’ equity (non-GAAP)

    $ 182,742       $ 181,071       $ 168,790   
  

 

 

     

 

 

     

 

 

  

Total assets

    $ 2,025,410       $ 1,965,705       $ 1,830,942   

Subtract:

         

Goodwill

      40,027         40,027         39,075   

Core deposit intangible assets

      3,657         3,781         4,150   
  

 

 

     

 

 

     

 

 

  

Total tangible assets (non-GAAP)

    $ 1,981,726       $ 1,921,897       $ 1,787,717   
  

 

 

     

 

 

     

 

 

  

Conference Call and Audio Webcast

Management will conduct a live conference call and audio webcast for interested parties relating to the Company’s results for the second quarter 2016 on Thursday, July 21, 2016, at 11:00 a.m. Pacific / 2:00 p.m. Eastern. To listen to the conference call, interested parties should call: (855) 215-7498 Passcode: 1554389. Following the formal remarks, a question and answer session will be open to all interested parties. The webcast will be available via Pacific Continental’s website www.therightbank.com. To listen to the live audio webcast, click on the webcast presentation link on the Company’s home page a few minutes before the presentation is scheduled to begin. An audio webcast replay is typically available within twenty-four hours following the live webcast and will be archived for one year on the Pacific Continental website. Any questions regarding the conference call presentation or webcast should be directed to Shannon Coffin, executive administrative assistant, at 541-686-8685.

About Pacific Continental Bank

Pacific Continental Bank, the wholly-owned operating subsidiary of Pacific Continental Corporation, delivers highly personalized services through fourteen banking offices in Oregon and Washington. The Bank also operates loan production offices in Tacoma, Washington and Denver, Colorado. Pacific Continental, with slightly more than $2.0 billion in assets, has established one of the most unique and attractive metropolitan branch networks in the Pacific Northwest with offices in three of the region’s largest markets, including Seattle, Portland and Eugene. Pacific Continental targets the banking needs of community-based businesses, health care professionals, professional service providers and nonprofit organizations.

Since its founding in 1972, Pacific Continental Bank has been honored with numerous awards and recognitions from highly regarded third-party organizations including The Seattle Times, the Portland Business Journal, the Seattle Business magazine and Oregon Business magazine. A complete list of the company’s awards and recognitions – as well as supplementary information about Pacific Continental Bank – can be found online at www.therightbank.com. Pacific Continental Corporation’s shares are listed on the Nasdaq Global Select Market under the symbol “PCBK” and are a component of the Russell 2000 Index.

Forward-Looking Statement Safe Harbor

This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”). These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “anticipates,” “targets,” “expects,” “estimates,” “intends,” “plans,” “goals,” “believes” and other similar expressions or future or conditional verbs such as “will,” “should,” “would” and “could.” The forward-looking statements made represent Pacific Continental’s current estimates, projections, expectations, plans or forecasts of its future results and revenues, including but not limited to statements about performance, loan or deposit growth, contingency plans to replace deposit declines, strategic focus, capital position, liquidity, credit quality, credit quality trends, and the impact and effects of recent or pending acquisitions. These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumptions that are difficult to predict and are often beyond Pacific Continental’s control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements. You should not place undue reliance on any forward-looking statement and should consider all of the following uncertainties and risks, as well as those more fully discussed under “Risk Factors”, “Business”, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Pacific Continental’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, and in any of Pacific Continental’s subsequent SEC filings, including the high concentration of loans of the Company’s banking subsidiary in commercial and residential real estate lending and in loans to dental professionals; adverse economic trends in the United States and the markets we serve affecting the Bank’s borrower base; continued erosion or sustained low levels of consumer confidence;

changes in the Federal Reserve’s monetary policies and the regulatory environment and increases in associated costs, particularly ongoing compliance expenses and resource allocation needs; vendor quality and efficiency; the Company’s ability to control risks associated with rapidly changing technology both from an internal perspective as well as for external providers; operational systems or infrastructure failures; increased competition; fluctuating interest rates; a tightening of available credit; the potential adverse impact of legal or regulatory proceedings; and risks related to acquisitions, including integration, retention of key personnel and business, anticipated cost savings and results and performance of the acquired company or the combined entity. Pacific Continental Corporation undertakes no obligation to publicly revise or update any forward-looking statement to reflect the impact of events or circumstances that arise after the date of this release. This statement is included for the express purpose of invoking the PSLRA’s safe harbor provisions.

PACIFIC CONTINENTAL CORPORATION and subsidiary

Consolidated Income Statements

(In thousands, except share and per share amounts)

(Unaudited)

 

     Three months ended     Linked     Year over  
     June 30,     March 31,     June 30,     Quarter     Year  
     2016     2016     2015     % Change     % Change  

Interest and dividend income

           

Loans

    $ 17,951      $ 17,714      $ 16,594        1.34 %      8.18 % 

Taxable securities

      1,838        1,717        1,736        7.05 %      5.88 % 

Tax-exempt securities

      476        477        499        -0.21 %      -4.61 % 

Federal funds sold and interest-bearing deposits with banks

      19        45        11        -57.78 %      72.73 % 
  

 

 

    

 

 

    

 

 

      
     20,284        19,953        18,840        1.66 %      7.66 % 
  

 

 

    

 

 

    

 

 

      

Interest expense

           

Deposits

      797        897        845        -11.15 %      -5.68 % 

Federal Home Loan Bank & Federal Reserve borrowings

      282        189        239        49.21 %      17.99 % 

Junior subordinated debentures

      56        56        56        0.00 %      0.00 % 

Federal funds purchased

      2        2        4        0.00 %      -50.00 % 
  

 

 

    

 

 

    

 

 

      
     1,137        1,144        1,144        -0.61 %      -0.61 % 
  

 

 

    

 

 

    

 

 

      

Net interest income

      19,147        18,809        17,696        1.80 %      8.20 % 

Provision for loan losses

      1,950        245        550        695.92 %      254.55 % 
  

 

 

    

 

 

    

 

 

      

Net interest income after provision for loan losses

      17,197        18,564        17,146        -7.36 %      0.30 % 
  

 

 

    

 

 

    

 

 

      

Noninterest income

           

Service charges on deposit accounts

      688        693        661        -0.72 %      4.08 % 

Bankcard income

      294        290        214        1.38 %      37.38 % 

Bank-owned life insurance income

      145        146        170        -0.68 %      -14.71 % 

Gain on sale of investment securities

      71        237        139        -70.04 %      -48.92 % 

Impairment losses on investment securities (OTTI)

      —          (17 )      (13 )      -100.00 %      -100.00 % 

Other noninterest income

      549        458        456        19.87 %      20.39 % 
  

 

 

    

 

 

    

 

 

      
     1,747        1,807        1,627        -3.32 %      7.38 % 
  

 

 

    

 

 

    

 

 

      

Noninterest expense

           

Salaries and employee benefits

      8,005        7,559        6,744        5.90 %      18.70 % 

Premises and equipment

      1,087        1,115        1,094        -2.51 %      -0.64 % 

Data processing

      893        864        821        3.36 %      8.77 % 

Legal and professional fees

      1,140        611        739        86.58 %      54.26 % 

Business development

      516        516        411        0.00 %      25.55 % 

FDIC insurance assessment

      286        288        273        -0.69 %      4.76 % 

Other real estate (income) expense, net

      (113 )      10        (60 )      -1230.00 %      88.33 % 

Merger related expenses(1)

      1,978        —          —          NA        NA   

Other noninterest expense

      1,140        1,044        1,008        9.20 %      13.10 % 
  

 

 

    

 

 

    

 

 

      
     14,932        12,007        11,030        24.36 %      35.38 % 
  

 

 

    

 

 

    

 

 

      

Income before provision for income taxes

      4,012        8,364        7,743        -52.03 %      -48.19 % 

Provision for income taxes

      1,406        2,905        2,648        -51.60 %      -46.90 % 
  

 

 

    

 

 

    

 

 

      

Net income

    $ 2,606      $ 5,459      $ 5,095        -52.26 %      -48.85 % 
  

 

 

    

 

 

    

 

 

      

Earnings per share:

           

Basic

    $ 0.13      $ 0.28      $ 0.26        -53.57 %      -50.00 % 
  

 

 

    

 

 

    

 

 

      

Diluted

    $ 0.13      $ 0.28      $ 0.26        -53.57 %      -50.00 % 
  

 

 

    

 

 

    

 

 

      

Weighted average shares outstanding:

           

Basic

      19,697,314        19,607,106        19,562,363       

Common stock equivalents attributable to stock-based awards

      171,653        175,176        226,521       
  

 

 

    

 

 

    

 

 

      

Diluted

      19,868,967        19,782,282        19,788,884       
  

 

 

    

 

 

    

 

 

      

PERFORMANCE RATIOS

           

Return on average assets

      0.53 %      1.12 %      1.14 %     

Return on average equity (book)

      4.67 %      9.92 %      9.68 %     

Return on average equity (tangible)(2)

      5.80 %      12.35 %      12.18 %     

Net interest margin - fully tax-equivalent yield(3)

      4.27 %      4.27 %      4.37 %     

Efficiency ratio(4)

      70.60 %      57.52 %      56.30 %     

 

(1) Represents expenses associated with the pending acquisition of Foundation Bank.
(2) Tangible equity excludes goodwill and core deposit intangible assets related to acquisitions.
(3) Net interest margin is reported on a tax-equivalent yield basis at a 35% tax rate.
(4)  Efficiency ratio is noninterest expense as a percent of net interest income (on a tax-equivalent basis) plus noninterest income.
NA Not applicable

PACIFIC CONTINENTAL CORPORATION and subsidiary

Year-to-Date Consolidated Income Statements

(In thousands, except share and per share amounts)

(Unaudited)

 

     Six months ended     Year over  
     June 30,     Year  
     2016     2015     % Change  

Interest and dividend income

       

Loans

    $ 35,665      $ 30,780        15.87 % 

Taxable securities

      3,555        3,112        14.24 % 

Tax-exempt securities

      952        1,002        -4.99 % 

Federal funds sold and interest-bearing deposits with banks

      64        16        300.00 % 
  

 

 

    

 

 

    
     40,236        34,910        15.26 % 
  

 

 

    

 

 

    

Interest expense

       

Deposits

      1,694        1,655        2.36 % 

Federal Home Loan Bank and Federal Reserve borrowings

      471        468        0.64 % 

Junior subordinated debentures

      113        112        0.89 % 

Federal funds purchased

      4        5        -20.00 % 
  

 

 

    

 

 

    
     2,282        2,240        1.88 % 
  

 

 

    

 

 

    

Net interest income

      37,954        32,670        16.17 % 

Provision for loan losses

      2,195        550        299.09 % 
  

 

 

    

 

 

    

Net interest income after provision for loan losses

      35,759        32,120        11.33 % 
  

 

 

    

 

 

    

Noninterest income

       

Service charges on deposit accounts

      1,381        1,236        11.73 % 

Bankcard income

      585        411        42.34 % 

Bank-owned life insurance income

      291        279        4.30 % 

Gain on sale of investment securities

      309        192        -60.94 % 

Impairment losses on investment securities (OTTI)

      (17 )      (13 )      30.77 % 

Other noninterest income

      1,008        798        26.32 % 
  

 

 

    

 

 

    
     3,557        2,903        22.53 % 
  

 

 

    

 

 

    

Noninterest expense

       

Salaries and employee benefits

      15,564        13,153        18.33 % 

Premises and equipment

      2,202        2,073        6.22 % 

Data processing

      1,758        1,505        16.81 % 

Legal and professional fees

      1,752        1,138        53.95 % 

Business development

      1,032        765        34.90 % 

FDIC insurance assessment

      574        486        18.11 % 

Other real estate (income) expense, net

      (103 )      181        -156.91 % 

Merger related expense(1)

      1,978        1,836        7.73 % 

Other noninterest expense

      2,183        1,867        16.93 % 
  

 

 

    

 

 

    
     26,940        23,004        17.11 % 
  

 

 

    

 

 

    

Income before provision for income taxes

      12,376        12,019        2.97 % 

Provision for income taxes

      4,311        4,122        4.59 % 
  

 

 

    

 

 

    

Net income

    $ 8,065      $ 7,897        2.13 % 
  

 

 

    

 

 

    

Earnings per share:

       

Basic

    $ 0.41      $ 0.42        -2.38 % 
  

 

 

    

 

 

    

Diluted

    $ 0.41      $ 0.41        0.00 % 
  

 

 

    

 

 

    

Weighted average shares outstanding:

       

Basic

      19,652,231        18,900,895     

Common stock equivalents attributable to stock-based awards

      153,667        227,090     
  

 

 

    

 

 

    

Diluted

      19,805,898        19,127,985     
  

 

 

    

 

 

    

PERFORMANCE RATIOS

       

Return on average assets

      0.82 %      0.94 %   

Return on average equity (book)

      7.28 %      7.89 %   

Return on average equity (tangible)(2)

      9.05 %      9.68 %   

Net interest margin - fully tax-equivalent yield(3)

      4.27 %      4.34 %   

Efficiency ratio(4)

      64.11 %      63.70 %   

 

(1) Represents expenses associated with the pending acquisition of Foundation Bank

and the acquisition of Capital Pacific Bank, completed during the first quarter 2015.

(2) Tangible equity excludes goodwill and core deposit intangible assets related to acquisitions.
(3) Net interest margin is reported on a tax-equivalent yield basis at a 35% tax rate.
(4)  Efficiency ratio is noninterest expense as a percent of net interest income (on a tax-equivalent basis) plus noninterest income.

PACIFIC CONTINENTAL CORPORATION and subsidiary

Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)

 

           Linked     Year over  
     June 30,     March 31,     June 30,     Quarter     Year  
     2016     2016     2015     % Change     % Change  

ASSETS

           

Cash and due from banks

    $ 25,238      $ 24,628      $ 29,812        2.48 %      -15.34 % 

Interest-bearing deposits with banks

      18,151        29,831        9,790        -39.15 %      85.40 % 
  

 

 

    

 

 

    

 

 

      

Total cash and cash equivalents

      43,389        54,459        39,602        -20.33 %      9.56 % 

Securities available-for-sale

      396,230        383,442        383,618        3.34 %      3.29 % 

Loans, net of deferred fees

      1,484,152        1,429,734        1,304,932        3.81 %      13.73 % 

Allowance for loan losses

      (19,127 )      (17,596 )      (16,013 )      8.70 %      19.45 % 
  

 

 

    

 

 

    

 

 

      

Net Loans

      1,465,025        1,412,138        1,288,919       

Interest receivable

      6,334        6,003        5,833        5.51 %      8.59 % 

Federal Home Loan Bank stock

      8,351        3,511        5,468        137.85 %      52.72 % 

Property and equipment, net of accumulated depreciation

      19,086        18,900        17,854        0.98 %      6.90 % 

Goodwill and intangible assets, net

      43,684        43,808        43,225        -0.28 %      1.06 % 

Deferred tax asset

      2,797        3,523        6,036        -20.61 %      -53.66 % 

Other real estate owned

      12,108        11,747        12,666        3.07 %      -4.41 % 

Bank-owned life insurance

      23,174        23,030        22,571        0.63 %      2.67 % 

Other assets

      5,232        5,144        5,150        1.71 %      1.59 % 
  

 

 

    

 

 

    

 

 

      

Total assets

    $ 2,025,410      $ 1,965,705      $ 1,830,942        3.04 %      10.62 % 
  

 

 

    

 

 

    

 

 

      

LIABILITIES AND SHAREHOLDERS’ EQUITY

           

Deposits

           

Noninterest-bearing demand

    $ 624,146      $ 675,296      $ 531,697        -7.57 %      17.39 % 

Savings and interest-bearing checking

      826,854        887,873        825,858        -6.87 %      0.12 % 

Core time deposits

      57,019        70,772        87,663        -19.43 %      -34.96 % 
  

 

 

    

 

 

    

 

 

      

Total core deposits(2)

      1,508,019        1,633,941        1,445,218        -7.71 %      4.35 % 

Non-core time deposits

      92,113        62,647        68,963        47.03 %      33.57 % 
  

 

 

    

 

 

    

 

 

      

Total deposits

      1,600,132        1,696,588        1,514,181        -5.69 %      5.68 % 

Securities sold under agreements to repurchase

      1,029        478        368        115.27 %      179.62 % 

Federal funds and overnight funds purchased

      —          —          5,500        NA        -100.00 % 

Federal Home Loan Bank borrowings

      151,500        30,500        84,000        396.72 %      80.36 % 

Subordinated debentures

      34,092        —          —          NA        NA   

Junior subordinated debentures

      8,248        8,248        8,248        0.00 %      0.00 % 

Accrued interest and other payables

      3,983        5,012        6,630        -20.53 %      -39.92 % 
  

 

 

    

 

 

    

 

 

      

Total liabilities

      1,798,984        1,740,826        1,618,927        3.34 %      11.12 % 
  

 

 

    

 

 

    

 

 

      

Shareholders’ equity

           

Common stock: 50,000,000 shares authorized. Shares issued and outstanding: 19,731,925 at June 30, 2016, 19,621,625 at March 31, 2016 and 19,591,532 at June 30, 2015

      156,678        156,703        155,325        -0.02 %      0.87 % 

Retained earnings

      63,431        62,996        53,150        0.69 %      19.34 % 

Accumulated other comprehensive income

      6,317        5,180        3,540        21.95 %      78.45 % 
  

 

 

    

 

 

    

 

 

      
     226,426        224,879        212,015        0.69 %      6.80 % 
  

 

 

    

 

 

    

 

 

      

Total liabilities and shareholders’ equity

    $ 2,025,410      $ 1,965,705      $ 1,830,942        3.04 %      10.62 % 
  

 

 

    

 

 

    

 

 

      

CAPITAL RATIOS

           

Total capital (to risk weighted assets)

      13.54 %      12.46 %      12.88 %     

Tier I capital (to risk weighted assets)

      10.52 %      11.37 %      11.78 %     

Common equity tier 1 capital (to risk weighted assets)

      10.07 %      10.88 %      11.27 %     

Tier I capital (to leverage assets)

      9.62 %      9.75 %      10.01 %     

Tangible common equity (to tangible assets)(1)

      9.22 %      9.42 %      9.44 %     

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

      10.30 %      11.05 %      11.32 %     

OTHER FINANCIAL DATA

           

Shares outstanding at end of period

      19,731,925        19,621,625        19,591,532       

Tangible shareholders’ equity(1)

    $ 182,742      $ 181,071      $ 168,790       

Book value per share

    $ 11.48      $ 11.46      $ 10.82       

Tangible book value per share

    $ 9.26      $ 9.23      $ 8.62       

 

(1)  Tangible common equity excludes goodwill and core deposit intangible assets related to acquisitions.
(2)  Core deposits include demand, interest checking, money market, savings, and local time deposits, including local nonpublic time deposits in excess of $100 thousand.
NA Not applicable

PACIFIC CONTINENTAL CORPORATION and subsidiary

Loans by Type

(In thousands)

(Unaudited)

 

          Linked     Year over  
          June 30,                 March 31,                 June 30,           Quarter     Year  
    2016     2016     2015     % Change     % Change  

LOANS BY TYPE

          

Real estate secured loans:

          

Permanent loans:

          

Multi-family residential

   $ 66,403      $ 66,419      $ 68,289        -0.02 %      -2.76 % 

Residential 1-4 family

     51,652        51,356        57,112        0.58 %      -9.56 % 

Owner-occupied commercial

     375,911        373,002        346,065        0.78 %      8.62 % 

Nonowner-occupied commercial

     339,444        320,485        275,077        5.92 %      23.40 % 
 

 

 

    

 

 

    

 

 

      

Total permanent real estate loans

     833,410        811,262        746,543        2.73 %      11.64 % 

Construction loans:

          

Multi-family residential

     16,743        8,747        6,590        91.41 %      154.07 % 

Residential 1-4 family

     34,372        29,261        30,145        17.47 %      14.02 % 

Commercial real estate

     57,790        40,635        31,659        42.22 %      82.54 % 

Commercial bare land and acquisition and development

     10,551        20,518        15,870        -48.58 %      -33.52 % 

Residential bare land and acquisition and development

     6,658        6,562        7,074        1.46 %      -5.88 % 
 

 

 

    

 

 

    

 

 

      

Total construction real estate loans

     126,114        105,723        91,338        19.29 %      38.07 % 
 

 

 

    

 

 

    

 

 

      

Total real estate loans

     959,524        916,985        837,881        4.64 %      14.52 % 

Commercial loans

     518,529        505,845        459,458        2.51 %      12.86 % 

Consumer loans

     3,313        2,948        3,783        12.38 %      -12.42 % 

Other loans

     4,737        5,525        5,025        -14.26 %      -5.73 % 
 

 

 

    

 

 

    

 

 

      

Gross loans

     1,486,103        1,431,303        1,306,147        3.83 %      13.78 % 

Deferred loan origination fees

     (1,951 )      (1,569 )      (1,215 )      24.35 %      60.58 % 
 

 

 

    

 

 

    

 

 

      
    1,484,152        1,429,734        1,304,932        3.81 %      13.73 % 

Allowance for loan losses

     (19,127 )      (17,596 )      (16,013 )      8.70 %      19.45 % 
 

 

 

    

 

 

    

 

 

      
  $ 1,465,025      $ 1,412,138      $ 1,288,919        3.75 %      13.66 % 
 

 

 

    

 

 

    

 

 

      

SELECTED MARKET LOAN DATA

          

Eugene market gross loans, period-end

   $ 396,260      $ 372,137      $ 358,806        6.48 %      10.44 % 

Portland market gross loans, period-end

     697,664        684,025        631,420        1.99 %      10.49 % 

Seattle market gross loans, period-end

     141,788        144,524        134,341        -1.89 %      5.54 % 

National health care gross loans, period-end(1)

     250,391        230,617        181,580        8.57 %      37.90 % 
 

 

 

    

 

 

    

 

 

      

Total gross loans, period-end

   $ 1,486,103      $ 1,431,303      $ 1,306,147        3.83 %      13.78 % 
 

 

 

    

 

 

    

 

 

      

DENTAL LOAN DATA(2)

          

Local dental gross loans, period-end

   $ 152,109      $ 149,698      $ 156,315        1.61 %      -2.69 % 

National dental gross loans, period-end

     217,701        201,243        164,740        8.18 %      32.15 % 
 

 

 

    

 

 

    

 

 

      

Total gross dental loans, period-end

   $ 369,810      $ 350,941      $ 321,055        5.38 %      15.19 % 
 

 

 

    

 

 

    

 

 

      

 

(1) National health care loans include loans to health care professionals, including dental and veterinary practitioners, operating outside of Pacific Continental Bank’s market area. The market area is defined as Oregon and Washington, west of the Cascade Mountain Range.
(2)  Dental loans include loans to dental professionals for the purpose of practice expansion, acquisition or other purpose, supported by the cash flows of a dental practice.

PACIFIC CONTINENTAL CORPORATION and subsidiary

Selected Other Financial Information and Ratios

(In thousands)

(Unaudited)

 

     Three months ended     Six months ended  
     June 30,     March 31,     June 30,     June 30,     June 30,  
     2016     2016     2015     2016     2015  

BALANCE SHEET AVERAGES

           

Loans, net of deferred fees

    $ 1,463,112      $ 1,420,582      $ 1,273,148      $ 1,441,847      $ 1,183,761   

Allowance for loan losses

      (18,156 )      (17,467 )      (15,782 )      (17,812 )      (15,729 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Loans, net of allowance

      1,444,956        1,403,115        1,257,366        1,424,035        1,168,032   

Securities, short-term deposits and FHLB stock

      407,174        417,439        407,579        412,307        394,465   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Earning assets

      1,852,130        1,820,554        1,664,945        1,836,342        1,562,497   

Noninterest-earning assets

      136,855        135,858        135,582        136,357        125,276   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Assets

    $ 1,988,985      $ 1,956,412      $ 1,800,527      $ 1,972,699      $ 1,687,773   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Interest-bearing core deposits(1)

    $ 921,219      $ 988,876      $ 901,577      $ 955,048      $ 831,596   

Noninterest-bearing core deposits(1)

      637,987        617,672        508,259        627,830        474,209   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Core deposits(1)

      1,559,206        1,606,548        1,409,836        1,582,878        1,305,805   

Noncore interest-bearing deposits

      68,536        63,683        73,469        66,110        78,201   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Deposits

      1,627,742        1,670,231        1,483,305        1,648,988        1,384,006   

Borrowings

      130,681        57,570        100,747        94,125        95,925   

Other noninterest-bearing liabilities

      6,120        7,186        5,466        6,652        6,117   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Liabilities

      1,764,543        1,734,987        1,589,518        1,749,765        1,486,048   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Shareholders’ equity (book)

      224,442        221,425        211,009        222,934        201,725   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Liabilities and equity

    $ 1,988,985      $ 1,956,412      $ 1,800,527      $ 1,972,699      $ 1,687,773   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Shareholders’ equity (tangible)(2)

    $ 180,691      $ 177,814      $ 167,757      $ 179,253      $ 164,516   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Period-end earning assets

    $ 1,879,406      $ 1,825,411      $ 1,682,327       
  

 

 

    

 

 

    

 

 

      

SELECTED MARKET DEPOSIT DATA

           

Eugene market core deposits, period-end(1)

    $ 712,061      $ 790,435      $ 759,079       

Portland market core deposits, period-end(1)

      590,880        649,089        521,317       

Seattle market core deposits, period-end(1)

      205,078        194,417        164,822       
  

 

 

    

 

 

    

 

 

      

Total core deposits, period-end(1)

      1,508,019        1,633,941        1,445,218       

Other deposits, period-end

      92,113        62,647        68,963       
  

 

 

    

 

 

    

 

 

      

Total

    $ 1,600,132      $ 1,696,588      $ 1,514,181       
  

 

 

    

 

 

    

 

 

      

Eugene market core deposits, average(1)

    $ 738,435      $ 799,583      $ 742,252       

Portland market core deposits, average(1)

      624,490        615,929        508,547       

Seattle market core deposits, average(1)

      196,281        191,036        159,037       
  

 

 

    

 

 

    

 

 

      

Total core deposits, average(1)

      1,559,206        1,606,548        1,409,836       

Other deposits, average

      68,536        63,683        73,469       
  

 

 

    

 

 

    

 

 

      

Total

    $ 1,627,742      $ 1,670,231      $ 1,483,305       
  

 

 

    

 

 

    

 

 

      

NET INTEREST MARGIN RECONCILIATION

           

Yield on average loans(3)

      5.07 %      5.15 %      5.34 %      5.11 %      5.36 % 

Yield on average securities(4)

      2.66 %      2.57 %      2.61 %      2.61 %      2.52 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Yield on average earning assets(4)

      4.52 %      4.52 %      4.67 %      4.52 %      4.63 % 

Rate on average interest-bearing core deposits

      0.26 %      0.26 %      0.27 %      0.26 %      0.27 % 

Rate on average interest-bearing non-core deposits

      1.19 %      1.67 %      1.33 %      1.43 %      1.37 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Rate on average interest-bearing deposits

      0.32 %      0.34 %      0.35 %      0.33 %      0.37 % 

Rate on average borrowings

      1.06 %      1.73 %      1.19 %      1.27 %      1.23 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Cost of interest-bearing funds

      0.41 %      0.41 %      0.43 %      0.41 %      0.45 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Interest rate spread(4)

      4.11 %      4.11 %      4.24 %      4.11 %      4.19 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net interest margin- fully tax equivalent yield(4)

      4.27 %      4.27 %      4.37 %      4.27 %      4.32 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Acquired loan fair value accretion impact to net interest margin(5)

      0.03 %      0.09 %      0.16 %      0.07 %      0.13 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

(1)  Core deposits include demand, interest checking, money market, savings, and local time deposits, including local nonpublic time deposits in excess of $100 thousand.
(2)  Tangible equity excludes goodwill and core deposit intangible assets related to acquisitions.
(3) Interest income includes recognized loan origination fees of $231, $205, and $180 for the three months ended June 30, 2016, March 31, 2016, and June 30, 2015, respectively, and $436 and $327 for the six months ended June 30, 2016 and 2015, respectively.
(4)  Tax-exempt income has been adjusted to a tax-equivalent basis at a 35% tax rate. The tax equivalent yield adjustment to interest earned on loans was $262, $258 and $158 for the three months ended June 30, 2016, March 31, 2016, and June 30, 2015, respectively, and $521 and $241 for the six months ended June 30, 2016 and 2015, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $256, $257 and $268 for the three months ended June 30, 2016, March 31, 2016, and June 30, 2015 , respectively, and $513 and $539 for the six months ended June 30, 2016 and 2015, respectively.
(5)  During the three months ended June 30, 2016, March 31, 2016, and June 30, 2015, accretion of the fair value adjustment on acquired loans contributed to interest income was $156, $409, and $635, respectively, and $565 and $1,004 for the six months ended June 30, 2016 and 2015, respectively.

PACIFIC CONTINENTAL CORPORATION and subsidiary

Nonperforming Assets, Asset Quality Ratios and Allowance for Loan Losses

(Dollars in thousands)

(Unaudited)

 

         June 30,           March 31,           June 30,      
     2016     2016     2015  
NONPERFORMING ASSETS       

Non-accrual loans

       

Real estate secured loans:

       

Permanent loans:

       

Multi-family residential

    $ —        $ —        $ —     

Residential 1-4 family

      408        710        688   

Owner-occupied commercial

      1,662        2,309        1,117   

Nonowner-occupied commercial

      727        761        878   
  

 

 

    

 

 

    

 

 

  

Total permanent real estate loans

      2,797        3,780        2,683   

Construction loans:

       

Multi-family residential

      —          —          —     

Residential 1-4 family

      —          53        —     

Commercial real estate

      —          —          —     

Commercial bare land and acquisition & development

      —          —          —     

Residential bare land and acquisition & development

      —          —          —     
  

 

 

    

 

 

    

 

 

  

Total construction real estate loans

      —          53        —     
  

 

 

    

 

 

    

 

 

  

Total real estate loans

      2,797        3,833        2,683   

Commercial loans

      1,501        1,529        955   
  

 

 

    

 

 

    

 

 

  

Total nonaccrual loans

      4,298        5,362        3,638   

90-days past due and accruing interest

      —          —          —     

Total nonperforming loans

      4,298        5,362        3,638   
  

 

 

    

 

 

    

 

 

  

Nonperforming loans guaranteed by government

      (2,667 )      (2,720 )      (1,380 ) 

Net nonperforming loans

      1,631        2,642        2,258   
  

 

 

    

 

 

    

 

 

  

Other real estate owned

      12,108        11,747        12,666   
  

 

 

    

 

 

    

 

 

  

Total nonperforming assets, net of guaranteed loans

    $ 13,739      $ 14,389      $ 14,924   
  

 

 

    

 

 

    

 

 

  
ASSET QUALITY RATIOS       

Allowance for loan losses as a percentage of total loans outstanding

      1.29 %      1.23 %      1.23 % 

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

      1172.72 %      666.01 %      709.17 % 

Quarter-to-date net loan charge offs (recoveries) as a percentage of average loans, annualized

      0.12 %      -0.01 %      0.05 % 

Net nonperforming loans as a percentage of total loans

      0.11 %      0.18 %      0.17 % 

Nonperforming assets as a percentage of total assets

      0.68 %      0.73 %      0.82 % 

Consolidated classified asset ratio(1)

      20.81 %      20.96 %      26.52 % 

Past due as a percentage of total loans(2)

      0.02 %      0.07 %      0.19 % 

 

     Three months ended     Six months ended  
        June 30,          March 31,           June 30,           June 30,           June 30,     
     2016     2016      2015     2016     2015  

ALLOWANCE FOR LOAN LOSSES

            

Balance at beginning of period

    $ 17,596      $ 17,301       $ 15,724      $ 17,301      $ 15,637   

Provision for loan losses

      1,950        245         550        2,195        550   

Loan charge-offs

      (668 )      —           (454 )      (668 )      (527 ) 

Loan recoveries

      249        50         193        299        353   
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

Net (charge-offs) recoveries

      (419 )      50         (261 )      (369 )      (174 ) 
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

Balance at end of period

    $ 19,127      $ 17,596       $ 16,013      $ 19,127      $ 16,013   
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

 

(1) Consolidated classified asset ratio is defined as the sum of all loan-related contingent liabilities and loans internally graded substandard or worse, impaired loans (net of government guarantees), adversely classified securities, and other real estate owned, divided by total consolidated Tier 1 capital plus the allowance for loan losses.
(2)  Defined as loans past due more than 30 days and still accruing interest, as a percentage of total loans, net of deferred fees.

PACIFIC CONTINENTAL CORPORATION and subsidiary

Consolidated Financial Highlights

(Dollars in thousands, except share and per share data)

(Unaudited)

 

     2nd Quarter     1st Quarter     4th Quarter     3rd Quarter     2nd Quarter  
     2016     2016     2015     2015     2015  

EARNINGS

           

Net interest income

    $ 19,147      $ 18,809      $ 18,822      $ 18,308      $ 17,696   

Provision for loan loss

    $ 1,950      $ 245      $ 520      $ 625      $ 550   

Noninterest income

    $ 1,747      $ 1,807      $ 2,008      $ 1,714      $ 1,627   

Noninterest expense

    $ 14,932      $ 12,007      $ 11,706      $ 11,182      $ 11,030   

Net income

    $ 2,606      $ 5,459      $ 5,528      $ 5,325      $ 5,095   

Basic earnings per share

    $ 0.13      $ 0.28      $ 0.28      $ 0.27      $ 0.26   

Diluted earnings per share

    $ 0.13      $ 0.28      $ 0.28      $ 0.27      $ 0.26   

Average shares outstanding

      19,697,314        19,607,106        19,598,484        19,591,666        19,562,363   

Average diluted shares outstanding

      19,868,967        19,782,282        19,766,098        19,816,770        19,788,884   

PERFORMANCE RATIOS

           

Return on average assets

      0.53 %      1.12 %      1.16 %      1.14 %      1.14 % 

Return on average equity (book)

      4.67 %      9.92 %      10.10 %      9.91 %      9.68 % 

Return on average equity (tangible)(1)

      5.80 %      12.35 %      12.60 %      12.42 %      12.18 % 

Net interest margin - fully tax equivalent yield(2)

      4.27 %      4.27 %      4.35 %      4.31 %      4.37 % 

Efficiency ratio (tax equivalent)(3)

      70.60 %      57.52 %      55.50 %      55.12 %      56.30 % 

Full-time equivalent employees

      333        339        322        321        322   

CAPITAL

           

Tier 1 leverage ratio

      9.62 %      9.75 %      9.93 %      9.88 %      10.01 % 

Common Equity tier 1 ratio

      10.07 %      10.88 %      10.97 %      11.00 %      11.27 % 

Tier 1 risk based ratio

      10.52 %      11.37 %      11.47 %      11.49 %      11.78 % 

Total risk based ratio

      13.54 %      12.46 %      12.58 %      12.58 %      12.88 % 

Book value per share

    $ 11.48      $ 11.46      $ 11.15      $ 11.06      $ 10.82   

Regular cash dividend per share

    $ 0.11      $ 0.11      $ 0.11      $ 0.11      $ 0.10   

ASSET QUALITY

           

Allowance for loan losses (ALL)

    $ 19,127      $ 17,596      $ 17,301      $ 16,612      $ 16,013   

Non performing loans (NPLs) net of government guarantees

    $ 1,631      $ 2,642      $ 2,719      $ 2,231      $ 2,258   

Non performing assets (NPAs) net of government guarantees

    $ 13,739      $ 14,389      $ 14,466      $ 14,085      $ 14,924   

Net loan (recoveries) charge offs

    $ 419      $ (50 )    $ (169 )    $ 26      $ 261   

ALL as a percentage of gross loans

      1.29 %      1.23 %      1.23 %      1.23 %      1.23 % 

ALL as a % NPLs, net of government guarantees

      1172.72 %      666.01 %      636.30 %      744.60 %      709.17 % 

Net loan charge offs (recoveries) to average loans

      0.12 %      -0.01 %      -0.02 %      0.00 %      0.05 % 

Net NPLs as a percentage of total loans

      0.11 %      0.18 %      0.19 %      0.16 %      0.17 % 

Nonperforming assets as a percentage of total assets

      0.68 %      0.73 %      0.76 %      0.75 %      0.82 % 

Consolidated classified asset ratio(4)

      20.81 %      20.96 %      23.03 %      25.14 %      26.52 % 

Past due as a percentage of total loans(5)

      0.02 %      0.07 %      0.03 %      0.14 %      0.19 % 

END OF PERIOD BALANCES

           

Total securities and short term deposits

    $ 414,381      $ 413,273      $ 379,454      $ 398,366      $ 393,408   

Total loans net of allowance

    $ 1,465,025      $ 1,412,138      $ 1,387,181      $ 1,339,195      $ 1,288,919   

Total earning assets

    $ 1,887,757      $ 1,828,922      $ 1,771,843      $ 1,744,329      $ 1,687,795   

Total assets

    $ 2,025,410      $ 1,965,705      $ 1,909,478      $ 1,878,283      $ 1,830,942   

Total non-interest bearing deposits

    $ 624,146      $ 675,296      $ 568,688      $ 544,009      $ 531,697   

Core deposits(6)

    $ 1,508,019      $ 1,633,941      $ 1,533,942      $ 1,465,547      $ 1,445,218   

Total deposits

    $ 1,600,132      $ 1,696,588      $ 1,597,093      $ 1,524,954      $ 1,514,181   

AVERAGE BALANCES

           

Total securities and short term deposits

    $ 407,174      $ 417,439      $ 401,870      $ 405,776      $ 407,579   

Total loans net of allowance

    $ 1,444,956      $ 1,403,115      $ 1,357,461      $ 1,319,622      $ 1,257,366   

Total earning assets

    $ 1,852,130      $ 1,820,554      $ 1,759,331      $ 1,725,398      $ 1,664,945   

Total assets

    $ 1,988,985      $ 1,956,412      $ 1,893,262      $ 1,859,418      $ 1,800,527   

Total non-interest bearing deposits

    $ 637,987      $ 617,672      $ 584,445      $ 538,768      $ 508,259   

Core deposits(6)

    $ 1,559,206      $ 1,606,548      $ 1,526,805      $ 1,482,984      $ 1,409,836   

Total deposits

    $ 1,627,742      $ 1,670,231      $ 1,586,791      $ 1,545,465      $ 1,483,305   

 

(1) Tangible equity excludes goodwill and core deposit intangible assets related to acquisitions.
(2) Net interest margin is reported on a tax-equivalent yield basis at a 35% tax rate.
(3) Efficiency ratio is noninterest expense as a percent of net interest income (on a tax-equivalent basis) plus noninterest income.
(4)  The sum of all loan-related contingent liabilities and loans internally graded substandard or worse, impaired loans (net of government guarantees), adversely classified securities, and other real estate owned, divided by total consolidated Tier 1 capital plus the allowance for loan losses.
(5)  Defined as loans past due more than 30 days and still accruing interest, as a percentage of total loans, net of deferred fees.
(6)  Core deposits include demand, interest checking, money market, savings, and local time deposits, including local nonpublic time deposits in excess of $100 thousand.