Oregon Pacific Bancorp Announces Second Quarter 2025 Earnings Results

Highlights:

• Second quarter net income of $2.0 million; $0.28 per diluted share.
• Quarterly tax equivalent net interest margin of 3.85%, expansion of 0.18% over prior quarter.
• Quarterly loan growth of $8.9 million.
• Quarterly deposit growth of $4.4 million.
• Quarterly return on average assets of 1.02%.

FLORENCE, Ore.--(BUSINESS WIRE)-- Oregon Pacific Bancorp (ORPB), the holding company of Oregon Pacific Bank, today reported net income of $2.0 million, or $0.28 per diluted share, for the quarter ended June 30, 2025, compared to $1.7 million or $0.23 per diluted share for the quarter ended March 31, 2025.

“We are pleased to report second quarter operating results, which reflected loan and deposit growth and increased profitability,” said Ron Green, President and CEO. “Expansion of the margin, and focused noninterest expense savings, supported enhanced financial performance. The bank continues to be mindful of the current economic environment and believes our local focus will continue to drive results.”

The bank’s second quarter net interest margin increased to 3.85%, up from 3.67% reported in the first quarter of 2025. The expansion was attributable to both an increase in the yield on loans, which increased to 5.65%, up from 5.53% the prior quarter, and a decrease in the cost of funds, which was reduced to 1.31% compared to 1.36% in the prior quarter.

Period-end loans, net of loan origination fees and costs, grew to $591.8 million, representing quarterly growth of $8.9 million. Quarterly loan production for new and renewed loans totaled $40.7 million, with a weighted average effective rate of 7.03% and a weighted-average repricing life of 3.70 years. New production continues to occur at rates higher than the existing portfolio which has expanded the overall portfolio yield. Period-end deposits totaled $699.7 million, representing quarterly growth of $4.4 million, with growth primarily centered in non-interest-bearing demand deposits, which expanded $8.5 million.

During the second quarter, the bank recorded net charge offs totaling $176 thousand, which were attributable to two relationships, totaling $153 thousand and $23 thousand, respectively. The first relationship is a government guaranteed hospitality loan that originated in 2014. The second relationship is a smaller community-based business located in a coastal market.

Classified assets at June 30, 2025, reflected an increase of $721 thousand from the first quarter of 2025, defined as loans and loan contingent liabilities internally graded substandard or worse, impaired loans, adversely classified securities and other real estate owned. The primary cause of the increase was the downgrade of one relationship, totaling $2.2 million, for a manufacturer of wood products tied to the RV industry. The borrower is experiencing a cyclical decline in financial performance but remains profitable. This downgrade was partially offset by the upgrade of a owner-occupied nonprofit relationship totaling $1.9 million. Additionally, during the second quarter the bank transferred property to Other Real Estate Owned (OREO) totaling $157 thousand. This property is a vacant lot on nonaccrual status, which stopped payments following the death of a borrower. The bank anticipates selling the property in the third quarter, with minimal anticipated holding costs.

Second quarter 2025 noninterest income totaled $2.1 million, which represented a decrease of $57 thousand from the prior quarter, and an increase of $126 thousand over the second quarter 2024. During the quarter, the Bank recognized $1.1 million of trust fee income, a decrease of $105 thousand from the prior quarter. Trust revenue is comprised of two components: 1) trust management revenue, and 2) transactional revenue or “extraordinary” revenue. Trust management revenue has increased due to onboarding of new clients, with the Bank’s trust assets under management increasing $21.6 million since March 31, 2025. Transactional revenue is related to items outside the scope of standard trust administration. This is primarily comprised of fees for liquidation of real estate and is generally tied to the death of a trust client. As transactional revenue is event based, this can cause quarterly fluctuations. Below is a summary of the breakout of trust revenue.

	THREE MONTHS ENDED									SIX MONTHS ENDED
	June 30,			March 31,			June 30,			June 30,			June 30,
	2025			2025			2024			2025			2024
Trust management revenue	$	1,053		$	989		$	899		$	2,042		$	1,694
Transactional Revenue		40			209			38			249			143
Trust fee income	$	1,093		$	1,198		$	937		$	2,291		$	1,837

For the quarter ended June 30, 2025, noninterest expense totaled $6.5 million, representing a decrease of $208 thousand from the prior quarter. The largest expense fluctuation occurred in the salaries and employee benefits category, which decreased $141 thousand. The largest fluctuation was attributable to payroll taxes, which decreased $61 thousand from the prior quarter. Payroll tax counters are generally reset on a calendar basis, so tax expense at the beginning of the year is typically higher, decreasing over the course of the year as employees reach wage caps.

Offsetting the decrease in salary expense was an increase in the outside services category. This fluctuation is primarily attributable to a change in the bank’s managed service provider, which occurred on June 30, 2025. In preparation for the conversion the bank incurred duplicated expense during the second quarter, totaling approximately $60 thousand. The duplicated services occurred to ensure no client or employee service disruptions and were discontinued effective June 30, 2025, which should result in third quarter outside services expense reduction.

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 Oregon Pacific Bank’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, loan prepayments, investment purchases, investment yields, strategic focus, capital position, liquidity, credit quality, special asset liquidation, noninterest income, noninterest expense and credit quality trends. 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 Oregon Pacific Bank’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. Oregon Pacific Bancorp 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.

CONSOLIDATED BALANCE SHEETS
Unaudited (dollars in thousands)
		June 30,				March 31,				June 30,
		2025				2025				2024
ASSETS
Cash and due from banks		$	11,156			$	12,042			$	6,505
Interest bearing deposits			30,348				27,625				10,559
Securities			142,357				145,610				162,483
Loans, net of deferred fees and costs			591,795				582,939				563,002
Allowance for credit losses			(7,388	)			(7,400	)			(7,250	)
Premises and equipment, net			13,187				13,193				13,403
Bank owned life insurance			10,304				10,223				9,002
Other real estate owned			157				-				-
Deferred tax asset			4,636				4,911				5,784
Other assets			8,710				8,485				8,354
Total assets		$	805,262			$	797,628			$	771,842
LIABILITIES
Deposits
Demand - non-interest bearing		$	162,426			$	153,956			$	154,226
Demand - interest bearing			280,434				276,594				285,802
Money market			133,416				140,373				119,863
Savings			66,665				67,566				64,458
Certificates of deposit			46,799				46,825				35,135
Brokered deposits			10,001				10,001				17,991
Total deposits			699,741				695,315				677,475
FHLB borrowings			7,500				7,500				7,500
Junior subordinated debenture			4,124				4,124				4,124
Subordinated debenture			14,877				14,852				14,777
Other liabilities			7,857				7,544				8,101
Total liabilities			734,099				729,335				711,977
STOCKHOLDERS' EQUITY
Common stock			21,732				21,612				21,388
Retained earnings			55,296				53,287				47,538
Accumulated other comprehensive
income, net of tax			(5,865	)			(6,606	)			(9,061	)
Total stockholders' equity			71,163				68,293				59,865
Total liabilities & stockholders' equity		$	805,262			$	797,628			$	771,842

CONSOLIDATED STATEMENTS OF INCOME
Unaudited (dollars in thousands, except per share data)
		THREE MONTHS ENDED										SIX MONTHS ENDED
		June 30,		March 31,				June 30,				June 30,			June 30,
		2025			2025			2024				2025			2024
INTEREST INCOME
Loans		$	8,286		$	7,859		$	7,548			$	16,145		$	14,691
Securities			1,262			1,279			1,515				2,541			3,054
Other interest income			199			261			224				460			422
Total interest income			9,747			9,399			9,287				19,146			18,167
INTEREST EXPENSE
Deposits			2,228			2,306			2,214				4,534			4,213
Borrowed funds			325			304			335				629			707
Total interest expense			2,553			2,610			2,549				5,163			4,920
NET INTEREST INCOME			7,194			6,789			6,738				13,983			13,247
Provision for credit losses on loans			164			-			141				164			181
Provision (credit) for unfunded commitments			-			-			10				-			(30	)
Net interest income after provision (credit) for credit losses			7,030			6,789			6,587				13,819			13,096
NONINTEREST INCOME
Trust fee income			1,093			1,198			937				2,291			1,837
Service charges			390			373			361				763			708
Mortgage loan sales			1			7			61				8			93
Merchant card services			123			117			125				240			237
Oregon Pacific Wealth Management income			356			339			316				695			617
Other income			123			109			160				232			257
Total noninterest income			2,086			2,143			1,960				4,229			3,749
NONINTEREST EXPENSE
Salaries and employee benefits			3,852			3,993			3,634				7,845			7,267
Outside services			791			702			639				1,493			1,357
Occupancy & equipment			490			517			478				1,007			988
Trust expense			678			742			635				1,420			1,252
Loan and collection, OREO expense			18			14			20				32			34
Advertising			124			91			96				215			151
Supplies and postage			65			70			68				135			147
Other operating expenses			472			569			516				1,041			1,106
Total noninterest expense			6,490			6,698			6,086				13,188			12,302
Income before taxes			2,626			2,234			2,461				4,860			4,543
Provision for income taxes			617			550			595				1,167			1,087
NET INCOME		$	2,009		$	1,684		$	1,866			$	3,693		$	3,456

Quarterly Highlights
	2nd Quarter				1st Quarter				4th Quarter				3rd Quarter				2nd Quarter
	2025				2025				2024				2024				2024
Earnings
Interest income	$	9,747			$	9,399			$	9,599			$	9,537			$	9,287
Interest expense		2,553				2,610				2,675				2,771				2,549
Net interest income	$	7,194			$	6,789			$	6,924			$	6,766			$	6,738
Provision for credit losses on loans		164				-				-				150				141
Provision (credit) for unfunded commitments		-				-				(30	)			35				10
Noninterest income		2,086				2,143				2,155				2,038				1,960
Noninterest expense		6,490				6,698				6,147				6,179				6,086
Provision for income taxes		617				550				744				593				595
Net income	$	2,009			$	1,684			$	2,218			$	1,847			$	1,866
Average shares outstanding		7,164,363				7,151,365				7,136,389				7,134,259				7,135,227
Average diluted shares outstanding		7,190,105				7,170,304				7,154,126				7,153,663				7,154,631
Period end shares outstanding		7,164,144				7,164,470				7,138,259				7,134,259				7,135,227
Period end diluted shares outstanding		7,189,886				7,190,212				7,155,996				7,153,663				7,154,631
Earnings per share	$	0.28			$	0.24			$	0.31			$	0.26			$	0.26
Diluted earnings per share	$	0.28			$	0.23			$	0.31			$	0.26			$	0.26
Performance Ratios
Return on average assets		1.02	%			0.87	%			1.12	%			0.93	%			0.96	%
Return on average equity		11.85	%			10.42	%			14.01	%			12.12	%			13.01	%
Net interest margin - tax equivalent		3.85	%			3.67	%			3.66	%			3.59	%			3.65	%
Yield on loans		5.65	%			5.53	%			5.55	%			5.47	%			5.43	%
Yield on securities		3.39	%			3.41	%			3.31	%			3.48	%			3.62	%
Cost of deposits		1.31	%			1.36	%			1.36	%			1.41	%			1.30	%
Cost of interest-bearing liabilities		1.86	%			1.88	%			1.89	%			1.97	%			1.83	%
Efficiency ratio		69.94	%			75.24	%			67.71	%			70.20	%			70.00	%
Full-time equivalent employees		146				148				145				144				143
Capital
Tier 1 capital	$	91,437			$	90,548			$	89,133			$	87,101			$	85,416
Leverage ratio		11.52	%			11.40	%			11.19	%			10.96	%			10.82	%
Common equity tier 1 ratio		14.82	%			14.84	%			14.86	%			14.65	%			14.36	%
Tier 1 risk based ratio		14.82	%			14.84	%			14.86	%			14.65	%			14.36	%
Total risk based ratio		16.07	%			16.10	%			16.11	%			15.90	%			15.61	%
Book value per share	$	9.93			$	9.53			$	9.12			$	9.05			$	8.39

Quarterly Highlights
	2nd Quarter				1st Quarter				4th Quarter				3rd Quarter				2nd Quarter
	2025				2025				2024				2024				2024
Asset quality
Allowance for credit losses (ACL)	$	7,388			$	7,400			$	7,400			$	7,400			$	7,250
Nonperforming loans (NPLs)	$	495			$	801			$	798			$	278			$	275
Nonperforming assets (NPAs)	$	652			$	801			$	798			$	278			$	275
Classified Assets (1)	$	11,271			$	10,550			$	8,132			$	10,363			$	11,778
Net loan charge offs (recoveries)	$	176			$	-			$	-			$	-			$	(91	)
ACL as a percentage of net loans		1.25	%			1.27	%			1.29	%			1.31	%			1.29	%
ACL as a percentage of NPLs		1492.53	%			923.85	%			927.32	%			2661.87	%			2636.36	%
Net charge offs (recoveries) to average loans		0.03	%			0.00	%			0.00	%			0.00	%			-0.02	%
Net NPLs as a percentage of total loans		0.08	%			0.14	%			0.14	%			0.05	%			0.05	%
Nonperforming assets as a percentage of total assets		0.08	%			0.10	%			0.10	%			0.03	%			0.04	%
Classified Asset Ratio (2)		11.53	%			10.77	%			8.42	%			10.97	%			12.63	%
Past due as a percentage of total loans		0.08	%			0.11	%			0.06	%			0.24	%			0.19	%
Off-balance sheet figures
Unused credit commitments	$	103,063			$	94,843			$	98,616			$	99,229			$	97,763
Trust assets under management (AUM)	$	288,935			$	267,359			$	271,046			$	267,061			$	254,380
Oregon Pacific Wealth Management AUM	$	174,724			$	172,729			$	165,045			$	167,025			$	159,201
End of period balances
Total securities	$	142,357			$	145,610			$	155,258			$	163,275			$	162,483
Total short term deposits	$	30,348			$	27,625			$	10,921			$	25,874			$	10,559
Total loans net of allowance	$	584,407			$	575,539			$	564,165			$	558,092			$	555,752
Total earning assets	$	766,445			$	758,119			$	739,677			$	756,571			$	737,936
Total assets	$	805,262			$	797,628			$	776,448			$	795,226			$	771,842
Total noninterest bearing deposits	$	162,426			$	153,956			$	141,719			$	156,296			$	154,226
Total brokered deposits	$	10,001			$	10,001			$	10,001			$	18,001			$	17,991
Total core deposits	$	689,740			$	685,314			$	666,616			$	677,587			$	659,484
Total deposits	$	699,741			$	695,315			$	676,617			$	695,588			$	677,475
Average balances
Total securities	$	143,627			$	150,197			$	159,587			$	162,918			$	166,077
Total short term deposits	$	18,044			$	23,766			$	23,654			$	22,887			$	16,430
Total loans net of allowance	$	580,377			$	568,635			$	561,601			$	556,336			$	552,490
Total earning assets	$	751,538			$	751,933			$	754,173			$	751,371			$	744,050
Total assets	$	787,506			$	787,201			$	789,333			$	787,072			$	780,003
Total noninterest bearing deposits	$	158,985			$	149,802			$	152,844			$	158,888			$	156,858
Total brokered deposits	$	10,001			$	10,001			$	12,610			$	17,999			$	17,975
Total core deposits	$	672,711			$	675,953			$	676,900			$	671,949			$	668,008
Total deposits	$	682,712			$	685,954			$	689,510			$	689,948			$	685,983

(1)		Classified assets 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.
(2)		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 bank Tier 1 capital, plus the allowance for credit losses.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250724297845/en/

Editorial Contact:

Ron Green, President & Chief Executive Officer

ron.green@opbc.com

(541) 902-9800

Source: Oregon Pacific Bancorp