Pacific Financial Corp Earns $3.7 Million, or $0.36 per Diluted Share, for Second Quarter of 2021; Reports Increased Loan Demand and Declares Quarterly Cash Dividend of $0.13 per Share
ABERDEEN, Wash., July 29, 2021 (GLOBE NEWSWIRE) -- Pacific Financial Corporation (OTCQX: PFLC), (“Pacific Financial” or the “Company”), the holding company for Bank of the Pacific (the “Bank”), today reported net income of
The board of directors of Pacific Financial declared a quarterly cash dividend of
“Earnings increased
“Loan balances, excluding PPP, have started to grow, although market competition remains fierce. We are seeing positive trend lines with increased loan pipelines and an uptick in utilization rates on lines of credit. As the pandemic eases and communities more fully re-open, combined with our healthy capital and liquidity positions, we believe we are well positioned for loan growth and to take advantage of new opportunities as we head into the second half of the year,” commented Portmann. “Our front-line customer facing relationship officers and employees have been back in offices since late 2020 and continue to remain focused on delivering a high level of customer service. We expect a majority of other staff to return to our offices by early August.”
Second Quarter 2021 Financial Highlights (as of, or for the period ended June 30, 2021, except as noted):
- Net income was
$3.7 million , or$0.36 per diluted share, for the second quarter of 2021, compared to$2.4 million , or$0.23 per diluted share, for the second quarter a year ago, and$4.2 million , or$0.40 per diluted share, for the first quarter of 2021. - Return on average assets (ROAA) was
1.19% , compared to1.44% in the preceding quarter and0.93% in the second quarter a year ago. Year to date ROAA was1.31% compared to0.74% a year ago. - The Bank recorded into income a
$1.6 million recapture of loan loss provision during the current quarter compared to a loan loss provision of$1.0 million in the second quarter a year ago, and a recapture of$1.4 million of provision for loan losses in the first quarter of 2021. - Net interest margin (“NIM”) was
3.06% for the second quarter of 2021, compared to3.70% for the second quarter of 2020, and3.35% for the linked quarter. - Gain-on-sale of loans decreased
$453,000 t o$2.9 million , compared to$3.3 million for the second quarter a year ago and decreased$653,000 from$3.5 million for the linked quarter. - Gross loans excluding PPP, increased
2% or$9.9 million , compared to the linked quarter, and decreased5% or$32.6 million for the like quarter in 2020. - Core deposits (non-interest bearing and interest-bearing transaction and savings accounts) increased
17% to$1.08 billion at June 30, 2021, compared to$922.6 million at June 30, 2020, and increased by5% from$1.03 billion at March 31, 2021. Core deposits represented94% of total deposits, with non-interest-bearing deposits representing41% of total deposits at June 30, 2021. - Improved asset quality:
- Watch loans or other loans especially mentioned, decreased by
$86.0 million , or65% , to$46.7 million at June 30, 2021, compared to$132.8 million at June 30, 2020, and declined by$32.9 million from$79.6 million at March 31, 2021. Delinquent loans not on nonaccrual were negligible at0.01% of gross loans outstanding at June 30, 2021 - Non-performing assets as a percentage of total assets remain minimal at
0.16% at June 30, 2021, compared to0.20% at March 31, 2021 and0.13% at June 30, 2020.
- Watch loans or other loans especially mentioned, decreased by
- The Company’s consolidated capital ratios continue to exceed regulatory guidelines for a well-capitalized financial institution. The Company repurchased 8,400 shares of its common stock during the quarter.
Income Statement Review
Net income was
Net interest income, before the provision for loan losses, was
The net interest margin (“NIM”) on a tax equivalent basis was
Average loan yields including PPP loans for the current quarter increased 13 basis points to
Noninterest income decreased
Gain-on-sale of loans decreased
Noninterest expenses rose
Provision for Loan Losses: The recapture of provision for loan losses during the current quarter reflected management’s ongoing assessment of the credit quality of the company’s loan portfolio. During the quarter,
Income tax provision was
Balance Sheet Review
Total Assets increased
Investment Securities increased
Federal funds balances remained at higher than historical levels, primarily as a result of total deposit increases over the current quarter and over the last twelve months.
Gross Loans declined
Commercial real estate, which includes both owner occupied and non-owner occupied, comprised
On the consumer side, loans to finance luxury and classic cars encompass most of the consumer loan balances. Those loans increased to
Loans are predominately originated within our Western Washington and Oregon markets and the Company’s portfolio is well-diversified by collateral type and by industry with a prudent credit discipline. With the risks associated with the COVID-19 pandemic reducing in severity, earlier this year the Company made reasonable adjustments to incrementally relax certain underwriting guidance, that had been tightened earlier in the pandemic, for non-owner occupied commercial real estate lending. To manage risk, the Company oversees new loan origination volume and current loan balances using concentration limits that establish maximum exposure levels by designated industry segment, real estate product types, geography and single borrower limits.
SBA Paycheck Protection Program: SBA PPP was designed to provide crucial relief to small businesses to help sustain operations impacted by COVID-19. Under this program, Bank of the Pacific funded 748 loans totaling
Loan Payment Deferrals: Early in 2020, the Bank provided
Stressed Sectors as a Result of COVID-19: The Bank continues to identify several industries as being potentially more vulnerable to the economic and business impacts of the Coronavirus pandemic. Those industries include animal production (primarily dairy), restaurants, retail trade, and recreation and entertainment. Although these industries are potentially more directly impacted by COVID-19, the bank’s customer base within these sectors covers a wide range of clients, including those who operate under diversified business models reaching a broader range of clients, possess necessary financial resources, and are managed by experienced management teams who aid in working through these economic challenges. The accommodation industry (hospitality) is no longer included in the stressed sector list given generally positive performance during the pandemic and into the current year with strong demand for travel closer to home that has benefited operators in coastal markets in both Oregon and Washington. At June 30, 2021, the total of these industries was
Stressed Sectors (without PPP) | |||||||||
(Unaudited) | |||||||||
June 30, 2021 | % of Gross Loans (without PPP) | ||||||||
(Dollars in thousands) | |||||||||
Animal production | $ | 15,431 | 2 | % | |||||
Restaurants | 9,951 | 2 | % | ||||||
Recreation, arts and entertainment | 4,873 | 1 | % | ||||||
Retail trade | 16,112 | 3 | % | ||||||
Total stressed sectors | $ | 46,367 | 7 | % | |||||
Asset Quality – Balances related to loans graded watch or other loans especially mentioned, declined
The Allowance for Loan Losses (“ALL”) decreased to
Total Deposits continued to increase during the quarter, increasing
Shareholder’s Equity was
Balance Sheet Overview | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
June 30, 2021 | Mar 31, 2021 | $ Change | % Change | June 30, 2020 | $ Change | % Change | |||||||||||||||||
Assets: | (Dollars in thousands, except per share data) | ||||||||||||||||||||||
Cash on hand and in banks | $ | 20,128 | $ | 15,175 | $ | 4,953 | 33 | % | $ | 140,132 | $ | (120,004 | ) | -86 | % | ||||||||
Interest bearing deposits | 307,773 | 280,129 | 27,644 | 10 | % | 3,250 | 304,523 | 9370 | % | ||||||||||||||
Federal funds sold | 23,965 | 23,316 | 649 | 3 | % | 17,635 | 6,330 | 36 | % | ||||||||||||||
Investment securities | 158,379 | 137,454 | 20,925 | 15 | % | 118,078 | 40,301 | 34 | % | ||||||||||||||
Loans held-for-sale | 37,777 | 19,439 | 18,338 | 94 | % | 19,477 | 18,300 | 94 | % | ||||||||||||||
Loans, net of deferred fees | 690,607 | 719,182 | (28,575 | ) | -4 | % | 782,562 | (91,955 | ) | -12 | % | ||||||||||||
Allowance for loan losses | (9,078 | ) | (10,721 | ) | 1,643 | -15 | % | (11,507 | ) | 2,429 | -21 | % | |||||||||||
Net loans | 681,529 | 708,461 | (26,932 | ) | -4 | % | 771,055 | (89,526 | ) | -12 | % | ||||||||||||
Federal Home Loan Bank and Pacific Coast Bankers' Bank stock, at cost | 2,419 | 2,421 | (2 | ) | 0 | % | 2,140 | 279 | 13 | % | |||||||||||||
Other assets | 58,841 | 58,679 | 162 | 0 | % | 57,708 | 1,133 | 2 | % | ||||||||||||||
Total assets | $ | 1,290,811 | $ | 1,245,074 | $ | 45,737 | 4 | % | $ | 1,129,475 | $ | 161,336 | 14 | % | |||||||||
Liabilities and Shareholders' Equity: | |||||||||||||||||||||||
Total deposits | $ | 1,144,033 | $ | 1,099,287 | $ | 44,746 | 4 | % | $ | 994,960 | $ | 149,073 | 15 | % | |||||||||
Borrowings | 13,881 | 13,919 | (38 | ) | 0 | % | 14,031 | (150 | ) | -1 | % | ||||||||||||
Accrued interest payable and other liabilities | 14,884 | 16,772 | (1,888 | ) | -11 | % | 11,092 | 3,792 | 34 | % | |||||||||||||
Shareholders' equity | 118,013 | 115,096 | 2,917 | 3 | % | 109,392 | 8,621 | 8 | % | ||||||||||||||
Total liabilities and shareholders' equity | $ | 1,290,811 | $ | 1,245,074 | $ | 45,737 | 4 | % | $ | 1,129,475 | $ | 161,336 | 14 | % | |||||||||
Common Stock Shares Outstanding | 10,429,133 | 10,437,378 | (8,245 | ) | 0 | % | 10,607,617 | (178,484 | ) | -2 | % | ||||||||||||
Book value per common share (1) | $ | 11.32 | $ | 11.03 | $ | 0.29 | 3 | % | $ | 10.31 | $ | 1.01 | 10 | % | |||||||||
Tangible book value per common share (2) | $ | 10.03 | $ | 9.74 | $ | 0.29 | 3 | % | $ | 9.04 | $ | 0.99 | 11 | % | |||||||||
Gross loans to deposits ratio | 60.4 | % | 65.4 | % | -5.0 | % | 78.7 | % | -18.3 | % | |||||||||||||
(1) Book value per common share is calculated as the total common shareholders' equity divided by the period ending number of common stock shares outstanding. | |||||||||||||||||||||||
(2) Tangible book value per common share is calculated as the total common shareholders' equity less total intangible assets and liabilities, divided by the period ending number of common stock shares outstanding. |
Income Statement Overview | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
For the Three Months Ended, | ||||||||||||||||||||||
June 30, 2021 | Mar 31, 2021 | $ Change | % Change | June 30, 2020 | $ Change | % Change | ||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||
Interest and dividend income | $ | 9,318 | $ | 9,612 | $ | (294 | ) | -3 | % | $ | 9,608 | $ | (290 | ) | -3 | % | ||||||
Interest expense | 324 | 387 | (63 | ) | -16 | % | 625 | (301 | ) | -48 | % | |||||||||||
Net interest income | 8,994 | 9,225 | (231 | ) | -3 | % | 8,983 | 11 | 0 | % | ||||||||||||
Loan loss provision | (1,600 | ) | (1,400 | ) | (200 | ) | 14 | % | 1,000 | (2,600 | ) | -260 | % | |||||||||
Noninterest income | 4,616 | 5,164 | (548 | ) | -11 | % | 4,802 | (186 | ) | -4 | % | |||||||||||
Noninterest expense | 10,497 | 10,504 | (7 | ) | 0 | % | 9,810 | 687 | 7 | % | ||||||||||||
Income before income taxes | 4,713 | 5,285 | (572 | ) | -11 | % | 2,975 | 1,738 | 58 | % | ||||||||||||
Income tax expense | 977 | 1,057 | (80 | ) | -8 | % | 569 | 408 | 72 | % | ||||||||||||
Net Income | $ | 3,736 | $ | 4,228 | $ | (492 | ) | -12 | % | $ | 2,406 | $ | 1,330 | 55 | % | |||||||
Average common shares outstanding - basic | 10,429,181 | 10,432,040 | (2,859 | ) | 0 | % | 10,607,617 | (178,436 | ) | -2 | % | |||||||||||
Average common shares outstanding - diluted | 10,461,046 | 10,458,794 | 2,252 | 0 | % | 10,630,458 | (169,412 | ) | -2 | % | ||||||||||||
Income per common share | ||||||||||||||||||||||
Basic | $ | 0.36 | $ | 0.41 | $ | (0.05 | ) | -12 | % | $ | 0.23 | $ | 0.13 | 57 | % | |||||||
Diluted | $ | 0.36 | $ | 0.40 | $ | (0.04 | ) | -10 | % | $ | 0.23 | $ | 0.13 | 57 | % | |||||||
Effective tax rate | 20.7 | % | 20.0 | % | 0.7 | % | 19.1 | % | 1.6 | % | ||||||||||||
For the Six Months Ended, | ||||||||||||||||||||||
June 30, 2021 | June 30, 2020 | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||
Interest and dividend income | $ | 18,930 | $ | 19,391 | $ | (461 | ) | -2 | % | |||||||||||||
Interest expense | 711 | 1,326 | (615 | ) | -46 | % | ||||||||||||||||
Net interest income | 18,219 | 18,065 | 154 | 1 | % | |||||||||||||||||
Loan loss provision | (3,000 | ) | 3,000 | (6,000 | ) | -200 | % | |||||||||||||||
Noninterest income | 9,780 | 8,356 | 1,424 | 17 | % | |||||||||||||||||
Noninterest expense | 21,000 | 18,952 | 2,048 | 11 | % | |||||||||||||||||
Income before income taxes | 9,999 | 4,469 | 5,530 | 124 | % | |||||||||||||||||
Income tax expense | 2,035 | 864 | 1,171 | 136 | % | |||||||||||||||||
Net Income | $ | 7,964 | $ | 3,605 | $ | 4,359 | 121 | % | ||||||||||||||
Average common shares outstanding - basic | 10,430,602 | 10,617,389 | (186,787 | ) | -2 | % | ||||||||||||||||
Average common shares outstanding - diluted | 10,459,731 | 10,640,230 | (180,499 | ) | -2 | % | ||||||||||||||||
Income per common share | ||||||||||||||||||||||
Basic | $ | 0.76 | $ | 0.34 | $ | 0.42 | 124 | % | ||||||||||||||
Diluted | $ | 0.76 | $ | 0.34 | $ | 0.42 | 124 | % | ||||||||||||||
Effective tax rate | 20.4 | % | 19.3 | % | 1.1 | % |
Reconciliation of Non-GAAP Measure | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
For the Three Months Ended, | |||||||||||||||||||||||
June 30, 2021 | Mar 31, 2021 | $ Change | % Change | June 30, 2020 | $ Change | % Change | |||||||||||||||||
Non-GAAP Net Income | (Dollars in thousands) | ||||||||||||||||||||||
Net Income | $ | 3,736 | $ | 4,228 | $ | (492 | ) | -12 | % | $ | 2,406 | $ | 1,330 | 55 | % | ||||||||
Loan loss provision | (1,600 | ) | (1,400 | ) | (200 | ) | 14 | % | 1,000 | (2,600 | ) | -260 | % | ||||||||||
Income tax expense | 977 | 1,057 | (80 | ) | -8 | % | 569 | 408 | 72 | % | |||||||||||||
Pre-tax, pre-provision net income | $ | 3,113 | $ | 3,885 | $ | (772 | ) | -20 | % | $ | 3,975 | $ | (862 | ) | -22 | % | |||||||
Pre-tax, pre-provisions ROA, annualized | 0.99 | % | 1.32 | % | (0.33 | ) | 1.53 | % | (0.21 | ) | |||||||||||||
Pre-tax, pre-provisions ROE, annualized | 10.73 | % | 13.69 | % | (2.96 | ) | 14.70 | % | (1.01 | ) | |||||||||||||
For the Six Months Ended, | |||||||||||||||||||||||
June 30, 2021 | June 30, 2020 | $ Change | % Change | ||||||||||||||||||||
Non-GAAP Operating Income | (Dollars in thousands) | ||||||||||||||||||||||
Net Income | $ | 7,964 | $ | 3,605 | $ | 4,359 | 121 | % | |||||||||||||||
Loan loss provision | (3,000 | ) | 3,000 | (6,000 | ) | -200 | % | ||||||||||||||||
Income tax expense | 2,035 | 864 | 1,171 | 136 | % | ||||||||||||||||||
Pre-tax, pre-provision net income | $ | 6,999 | $ | 7,469 | $ | (470 | ) | -6 | % | ||||||||||||||
Pre-tax, pre-provisions ROA, annualized | 1.15 | % | 1.53 | % | (0.38 | ) | |||||||||||||||||
Pre-tax, pre-provisions ROE, annualized | 12.23 | % | 14.03 | % | (1.80 | ) |
Noninterest Income | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
For the Three Months Ended, | |||||||||||||||||||
June 30, 2021 | Mar 31, 2021 | $ Change | % Change | June 30, 2020 | $ Change | % Change | |||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Service charges on deposits | $ | 351 | $ | 342 | $ | 9 | 3 | % | $ | 315 | $ | 36 | 11 | % | |||||
Gain on sale of loans, net | 2,882 | 3,535 | (653 | ) | -18 | % | 3,335 | (453 | ) | -14 | % | ||||||||
Earnings on bank owned life insurance | 126 | 126 | - | 0 | % | 129 | (3 | ) | -2 | % | |||||||||
Other noninterest income | |||||||||||||||||||
Fee income | 1,248 | 1,133 | 115 | 10 | % | 992 | 256 | 26 | % | ||||||||||
Other | 9 | 28 | (19 | ) | -68 | % | 31 | (22 | ) | -71 | % | ||||||||
Total noninterest income | $ | 4,616 | $ | 5,164 | $ | (548 | ) | -11 | % | $ | 4,802 | $ | (186 | ) | -4 | % | |||
For the Six Months Ended, | |||||||||||||||||||
June 30, 2021 | June 30, 2020 | $ Change | % Change | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Service charges on deposits | $ | 693 | $ | 822 | $ | (129 | ) | -16 | % | ||||||||||
Gain on sale of loans, net | 6,417 | 5,325 | 1,092 | 21 | % | ||||||||||||||
Gain on sale of securities available for sale, net | - | - | - | - | |||||||||||||||
Earnings on bank owned life insurance | 253 | 243 | 10 | 4 | % | ||||||||||||||
Other noninterest income | |||||||||||||||||||
Fee income | 2,381 | 1,910 | 471 | 25 | % | ||||||||||||||
Other | 36 | 56 | (20 | ) | -36 | % | |||||||||||||
Total noninterest income | $ | 9,780 | $ | 8,356 | $ | 1,424 | 17 | % |
Noninterest Expense | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
For the Three Months Ended, | |||||||||||||||||||
June 30, 2021 | Mar 31, 2021 | $ Change | % Change | June 30, 2020 | $ Change | % Change | |||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Salaries and employee benefits | $ | 7,148 | $ | 7,333 | $ | (185 | ) | -3 | % | $ | 6,781 | $ | 367 | 5 | % | ||||
Occupancy | 481 | 511 | (30 | ) | -6 | % | 507 | (26 | ) | -5 | % | ||||||||
Equipment | 316 | 319 | (3 | ) | -1 | % | 294 | 22 | 7 | % | |||||||||
Data processing | 804 | 829 | (25 | ) | -3 | % | 803 | 1 | 0 | % | |||||||||
Professional services | 296 | 234 | 62 | 26 | % | 312 | (16 | ) | -5 | % | |||||||||
State and local taxes | 273 | 202 | 71 | 35 | % | 112 | 161 | 144 | % | ||||||||||
FDIC and State assessments | 82 | 81 | 1 | 1 | % | 8 | 74 | 925 | % | ||||||||||
Other noninterest expense: | |||||||||||||||||||
Director fees | 80 | 77 | 3 | 4 | % | 83 | (3 | ) | -4 | % | |||||||||
Communication | 72 | 71 | 1 | 1 | % | 76 | (4 | ) | -5 | % | |||||||||
Advertising | 59 | 29 | 30 | 103 | % | 33 | 26 | 79 | % | ||||||||||
Professional liability insurance | 60 | 59 | 1 | 2 | % | 57 | 3 | 5 | % | ||||||||||
Amortization | 110 | 105 | 5 | 5 | % | 101 | 9 | 9 | % | ||||||||||
Other | 716 | 654 | 62 | 9 | % | 643 | 73 | 11 | % | ||||||||||
Total noninterest expense | $ | 10,497 | $ | 10,504 | $ | (7 | ) | 0 | % | $ | 9,810 | $ | 687 | 7 | % | ||||
For the Six Months Ended, | |||||||||||||||||||
June 30, 2021 | June 30, 2020 | $ Change | % Change | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Salaries and employee benefits | $ | 14,481 | $ | 12,847 | $ | 1,634 | 13 | % | |||||||||||
Occupancy | 992 | 1,029 | (37 | ) | -4 | % | |||||||||||||
Equipment | 634 | 578 | 56 | 10 | % | ||||||||||||||
Data processing | 1,633 | 1,549 | 84 | 5 | % | ||||||||||||||
Professional services | 522 | 513 | 9 | 2 | % | ||||||||||||||
State and local taxes | 475 | 257 | 218 | 85 | % | ||||||||||||||
FDIC and State assessments | 163 | 16 | 147 | 919 | % | ||||||||||||||
Other noninterest expense: | |||||||||||||||||||
Director fees | 158 | 157 | 1 | 1 | % | ||||||||||||||
Communication | 144 | 144 | - | 0 | % | ||||||||||||||
Advertising | 87 | 81 | 6 | 7 | % | ||||||||||||||
Professional liability insurance | 119 | 112 | 7 | 6 | % | ||||||||||||||
Amortization | 215 | 198 | 17 | 9 | % | ||||||||||||||
Other | 1,377 | 1,471 | (94 | ) | -6 | % | |||||||||||||
Total noninterest expense | $ | 21,000 | $ | 18,952 | $ | 2,048 | 11 | % |
Financial Performance Overview | |||||||||||||||
(Unaudited) | |||||||||||||||
For the Three Months Ended | |||||||||||||||
June 30, 2021 | Mar 31, 2021 | Change | June 30, 2020 | Change | |||||||||||
Performance Ratios | |||||||||||||||
Return on average assets, annualized | 1.19 | % | 1.44 | % | (0.25 | ) | 0.93 | % | 0.26 | ||||||
Return on average equity, annualized | 12.87 | % | 14.90 | % | (2.03 | ) | 8.90 | % | 3.97 | ||||||
Efficiency ratio (1) | 77.13 | % | 73.00 | % | 4.13 | 71.16 | % | 5.97 | |||||||
(1) Non-interest expense divided by net interest income plus noninterest income. | |||||||||||||||
For the Six Months Ended, | |||||||||||||||
June 30, 2021 | June 30, 2020 | Change | |||||||||||||
Performance Ratios | |||||||||||||||
Return on average assets, annualized | 1.31 | % | 0.74 | % | 0.57 | ||||||||||
Return on average equity, annualized | 13.87 | % | 6.73 | % | 7.14 | ||||||||||
Efficiency ratio (1) | 75.00 | % | 71.73 | % | 3.27 | ||||||||||
(1) Non-interest expense divided by net interest income plus noninterest income. |
LIQUIDITY
Cash and Cash Equivalents and Investment Securities | ||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||
June 30, 2021 | % of Total | Mar 31, 2021 | % of Total | $ Change | % Change | June 30, 2020 | Total | $ Change | % Change | |||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||
Cash on hand and in banks | $ | 20,128 | 4 | % | $ | 15,175 | 3 | % | $ | 4,953 | 33 | % | $ | 15,227 | 5 | % | $ | 4,901 | 32 | % | ||||||||||
Interest bearing deposits | 304,523 | 60 | % | 276,879 | 62 | % | 27,644 | 10 | % | 124,905 | 45 | % | 179,618 | 144 | % | |||||||||||||||
Other interest earning deposits | 3,250 | 1 | % | 3,250 | 1 | % | - | 0 | % | 3,250 | 1 | % | - | 0 | % | |||||||||||||||
Federal funds sold | 23,965 | 5 | % | 23,316 | 5 | % | 649 | 3 | % | 17,635 | 6 | % | 6,330 | 36 | % | |||||||||||||||
Total | 351,866 | 70 | % | 318,620 | 71 | % | 33,246 | 10 | % | 161,017 | 57 | % | 190,849 | 119 | % | |||||||||||||||
Investment securities: | ||||||||||||||||||||||||||||||
Collateralized mortgage obligations | 65,102 | 12 | % | 47,870 | 10 | % | 17,232 | 36 | % | 44,242 | 16 | % | 20,860 | 47 | % | |||||||||||||||
Mortgage backed securities | 9,459 | 2 | % | 13,441 | 3 | % | (3,982 | ) | -30 | % | 15,366 | 6 | % | (5,907 | ) | -38 | % | |||||||||||||
U.S. Government and agency securities | 19,235 | 4 | % | 15,263 | 3 | % | 3,972 | 26 | % | 4,101 | 1 | % | 15,134 | 369 | % | |||||||||||||||
Municipal securities | 62,467 | 12 | % | 58,761 | 13 | % | 3,706 | 6 | % | 52,314 | 19 | % | 10,153 | 19 | % | |||||||||||||||
Corporate debt securities | 2,017 | 0 | % | 2,018 | 0 | % | (1 | ) | 0 | % | 1,991 | 1 | % | 26 | 1 | % | ||||||||||||||
Equity securities | 99 | 0 | % | 101 | 0 | % | (2 | ) | -2 | % | 64 | 0 | % | 35 | 55 | % | ||||||||||||||
Total | 158,379 | 30 | % | 137,454 | 29 | % | 20,925 | 15 | % | 118,078 | 43 | % | 40,301 | 34 | % | |||||||||||||||
Total cash equivalents and investment securities | $ | 510,245 | 100 | % | $ | 456,074 | 100 | % | $ | 54,171 | 12 | % | $ | 279,095 | 100 | % | $ | 231,150 | 83 | % | ||||||||||
Total cash equivalents and investment securities | ||||||||||||||||||||||||||||||
as a percent of total assets | 40 | % | 37 | % | 25 | % |
LOANS
Loans by Category | |||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||
June 30, 2021 | % of Gross Loans | Mar 31, 2021 | % of Gross Loans | $ Change | % Change | June 30, 2020 | % of Gross Loans | $ Change | % Change | ||||||||||||||||||||||||
Commercial: | (Dollars in thousands) | ||||||||||||||||||||||||||||||||
Commercial and agricultural | $ | 91,038 | 13 | % | $ | 83,675 | 12 | % | $ | 7,363 | 9 | % | $ | 111,094 | 14 | % | $ | (20,056 | ) | -18 | % | ||||||||||||
PPP | 69,621 | 10 | % | 108,377 | 15 | % | (38,756 | ) | -36 | % | 130,507 | 17 | % | (60,886 | ) | 100 | % | ||||||||||||||||
Real estate: | |||||||||||||||||||||||||||||||||
Construction and development | 31,429 | 5 | % | 20,936 | 3 | % | 10,493 | 50 | % | 40,462 | 5 | % | (9,033 | ) | -22 | % | |||||||||||||||||
Residential 1-4 family | 68,238 | 10 | % | 71,567 | 10 | % | (3,329 | ) | -5 | % | 82,154 | 10 | % | (13,916 | ) | -17 | % | ||||||||||||||||
Multi-family | 38,764 | 6 | % | 33,950 | 5 | % | 4,814 | 14 | % | 32,955 | 4 | % | 5,809 | 18 | % | ||||||||||||||||||
Commercial real estate -- owner occupied | 149,209 | 22 | % | 154,850 | 21 | % | (5,641 | ) | -4 | % | 150,626 | 19 | % | (1,417 | ) | -1 | % | ||||||||||||||||
Commercial real estate -- non owner occupied | 161,450 | 22 | % | 166,072 | 22 | % | (4,622 | ) | -3 | % | 156,712 | 20 | % | 4,738 | 3 | % | |||||||||||||||||
Farmland | 26,047 | 4 | % | 27,418 | 4 | % | (1,371 | ) | -5 | % | 31,054 | 4 | % | (5,007 | ) | -16 | % | ||||||||||||||||
Consumer | 58,092 | 8 | % | 55,868 | 8 | % | 2,224 | 4 | % | 51,772 | 7 | % | 6,320 | 12 | % | ||||||||||||||||||
Gross Loans | 693,888 | 100 | % | 722,713 | 100 | % | (28,825 | ) | -4 | % | 787,336 | 100 | % | (93,448 | ) | -12 | % | ||||||||||||||||
Less: allowance for loan losses | (9,078 | ) | (10,721 | ) | 1,643 | (11,507 | ) | 2,429 | |||||||||||||||||||||||||
Less: deferred fees | (3,281 | ) | (3,531 | ) | 250 | (4,774 | ) | 1,493 | |||||||||||||||||||||||||
Net loans | $ | 681,529 | $ | 708,461 | $ | (26,932 | ) | $ | 771,055 | $ | (89,526 | ) | |||||||||||||||||||||
Loan Concentration | |||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||
June 30, 2021 | % of Risk Based Capital | Mar 31, 2021 | % of Risk Based Capital | Change | June 30, 2020 | % of Risk Based Capital | Change | ||||||||||||||||||||||||||
Commercial: | (Dollars in thousands) | ||||||||||||||||||||||||||||||||
Commercial and agricultural | $ | 91,038 | 74 | % | $ | 83,675 | 69 | % | 5 | % | $ | 111,094 | 97 | % | -23 | % | |||||||||||||||||
PPP | 69,621 | 57 | % | 108,377 | 90 | % | -33 | % | 130,507 | 114 | % | -57 | % | ||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||||||||
Construction and development | 31,429 | 26 | % | 20,936 | 17 | % | 9 | % | 40,462 | 35 | % | -9 | % | ||||||||||||||||||||
Residential 1-4 family | 68,238 | 55 | % | 71,567 | 59 | % | -4 | % | 82,154 | 72 | % | -17 | % | ||||||||||||||||||||
Multi-family | 38,764 | 32 | % | 33,950 | 28 | % | 4 | % | 32,955 | 29 | % | 3 | % | ||||||||||||||||||||
Commercial real estate -- owner occupied | 149,209 | 121 | % | 154,850 | 128 | % | -7 | % | 150,626 | 132 | % | -11 | % | ||||||||||||||||||||
Commercial real estate -- non owner occupied | 161,450 | 131 | % | 166,072 | 137 | % | -6 | % | 156,712 | 137 | % | -6 | % | ||||||||||||||||||||
Farmland | 26,047 | 21 | % | 27,418 | 23 | % | -2 | % | 31,054 | 27 | % | -6 | % | ||||||||||||||||||||
Consumer | 58,092 | 47 | % | 55,868 | 46 | % | 1 | % | 51,772 | 45 | % | 2 | % | ||||||||||||||||||||
Gross Loans | $ | 693,888 | $ | 722,713 | $ | 787,336 | |||||||||||||||||||||||||||
Regulatory Commercial Real Estate | $ | 219,091 | 178 | % | $ | 216,687 | 179 | % | -1 | % | $ | 220,042 | 193 | % | -15 | % | |||||||||||||||||
Total Risk Based Capital* | $ | 123,048 | $ | 120,934 | $ | 114,216 | |||||||||||||||||||||||||||
*Bank of the Pacific |
DEPOSITS
Deposits by Category | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
June 30, 2021 | % of Total | Mar 31, 2021 | % of Total | $ Change | % Change | June 30, 2020 | % of Total | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Interest-bearing demand | $ | 264,470 | 22 | % | $ | 305,137 | 28 | % | $ | (40,667 | ) | -13 | % | $ | 288,274 | 30 | % | $ | (23,804 | ) | -8 | % | ||||||
Money market | 192,653 | 17 | % | 186,887 | 17 | % | 5,766 | 3 | % | 168,570 | 17 | % | 24,083 | 14 | % | |||||||||||||
Savings | 156,123 | 14 | % | 149,325 | 14 | % | 6,798 | 5 | % | 123,144 | 12 | % | 32,979 | 27 | % | |||||||||||||
Time deposits (CDs) | 64,269 | 6 | % | 67,861 | 6 | % | (3,592 | ) | -5 | % | 72,402 | 7 | % | (8,133 | ) | -11 | % | |||||||||||
Total interest-bearing deposits | 677,515 | 59 | % | 709,210 | 65 | % | (31,695 | ) | -4 | % | 652,390 | 66 | % | 25,125 | 4 | % | ||||||||||||
Non-interest bearing demand | 466,518 | 41 | % | 390,077 | 35 | % | 76,441 | 20 | % | 342,570 | 34 | % | 123,948 | 36 | % | |||||||||||||
Total deposits | $ | 1,144,033 | 100 | % | $ | 1,099,287 | 100 | % | $ | 44,746 | 4 | % | $ | 994,960 | 100 | % | $ | 149,073 | 15 | % |
The following table summarizes the capital measures of the Company and the Bank respectively, at the dates listed below.
Capital Measures | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
June 30, 2021 | Mar 31, 2021 | Change | June 30, 2020 | Change | Well Capitalized Under Prompt Correction Action Regulations | |||||||||||||||
Pacific Financial Corporation | ||||||||||||||||||||
Total risk-based capital ratio | 16.7 | % | 16.8 | % | (0.1 | ) | 15.1 | % | 1.6 | N/A | ||||||||||
Tier 1 risk-based capital ratio | 15.4 | % | 15.5 | % | (0.1 | ) | 13.9 | % | 1.5 | N/A | ||||||||||
Common equity tier 1 ratio | 13.7 | % | 13.7 | % | - | 12.1 | % | 1.6 | N/A | |||||||||||
Leverage ratio | 9.1 | % | 9.5 | % | (0.4 | ) | 10.2 | % | (1.1 | ) | N/A | |||||||||
Tangible common equity ratio | 8.2 | % | 8.3 | % | (0.1 | ) | 8.6 | % | (0.4 | ) | N/A | |||||||||
Bank of the Pacific | ||||||||||||||||||||
Total risk-based capital ratio | 16.6 | % | 16.7 | % | (0.1 | ) | 15.0 | % | 1.6 | |||||||||||
Tier 1 risk-based capital ratio | 15.4 | % | 15.4 | % | - | 13.8 | % | 1.6 | ||||||||||||
Common equity tier 1 ratio | 15.4 | % | 15.4 | % | - | 13.8 | % | 1.6 | ||||||||||||
Leverage ratio | 9.1 | % | 9.5 | % | (0.4 | ) | 10.1 | % | (1.0 | ) | ||||||||||
The following tables set forth information regarding average balances of interest-earning assets and interest-bearing liabilities and the resultant yields or cost, and the net interest margin on a tax equivalent basis. Loans held for sale and non-accrual loans are included in total loans.
Net Interest Margin | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
(Annualized, tax-equivalent basis) | ||||||||||||||||||||||
For the Three Months Ended, | ||||||||||||||||||||||
June 30, 2021 | Mar 31, 2021 | $ Change | % Change | June 30, 2020 | $ Change | % Change | ||||||||||||||||
Average Balances | (Dollars in thousands) | |||||||||||||||||||||
Gross loans | $ | 709,818 | $ | 724,259 | $ | (14,441 | ) | -2 | % | $ | 762,502 | $ | (52,684 | ) | -7 | % | ||||||
Gross loans without PPP | $ | 612,907 | $ | 620,808 | $ | (7,901 | ) | -1 | % | $ | 661,275 | $ | (48,368 | ) | -7 | % | ||||||
Loans held for sale | $ | 28,236 | $ | 27,203 | $ | 1,033 | 4 | % | $ | 18,287 | $ | 9,949 | 54 | % | ||||||||
Investment securities | $ | 144,927 | $ | 129,178 | $ | 15,749 | 12 | % | $ | 112,245 | $ | 32,682 | 29 | % | ||||||||
Federal funds sold & interest bearing deposits in banks | $ | 308,196 | $ | 248,252 | $ | 59,944 | 24 | % | $ | 89,941 | $ | 218,255 | 243 | % | ||||||||
Total interest-earning assets | $ | 1,191,177 | $ | 1,128,892 | $ | 62,285 | 6 | % | $ | 1,644,250 | $ | (453,073 | ) | -28 | % | |||||||
Non-interest bearing demand deposits | $ | 452,149 | $ | 360,175 | $ | 91,974 | 26 | % | $ | 307,802 | $ | 144,347 | 47 | % | ||||||||
Interest bearing deposits | $ | 662,573 | $ | 689,302 | $ | (26,729 | ) | -4 | % | $ | 601,443 | $ | 61,130 | 10 | % | |||||||
Total Deposits | $ | 1,114,722 | $ | 1,049,477 | $ | 65,245 | 6 | % | $ | 909,245 | $ | 205,477 | 23 | % | ||||||||
Borrowings | $ | 13,894 | $ | 13,931 | $ | (37 | ) | 0 | % | $ | 15,832 | $ | (1,938 | ) | -12 | % | ||||||
Total interest-bearing liabilities | $ | 676,467 | $ | 703,233 | $ | (26,766 | ) | -4 | % | $ | 617,275 | $ | 59,192 | 10 | % | |||||||
Total Equity | $ | 116,399 | $ | 115,095 | $ | 1,304 | 1 | % | $ | 108,455 | $ | 7,944 | 7 | % | ||||||||
For the Three Months Ended, | ||||||||||||||||||||||
June 30, 2021 | Mar 31, 2021 | Change | June 30, 2020 | Change | ||||||||||||||||||
Yield on average gross loans (1) | 4.72 | % | 4.87 | % | (0.15 | ) | 4.59 | % | 0.13 | |||||||||||||
Yield on average gross loans without PPP (1) | 4.58 | % | 4.63 | % | (0.05 | ) | 4.96 | % | (0.38 | ) | ||||||||||||
Yield on average investment securities (1) | 2.12 | % | 2.45 | % | (0.33 | ) | 2.71 | % | (0.59 | ) | ||||||||||||
Yield on Fed funds sold & interest bearing deposits in banks | 0.12 | % | 0.12 | % | - | 0.21 | % | (0.09 | ) | |||||||||||||
Cost of average interest bearing deposits | 0.16 | % | 0.19 | % | (0.03 | ) | 0.35 | % | (0.19 | ) | ||||||||||||
Cost of average borrowings | 1.76 | % | 1.83 | % | (0.07 | ) | 2.56 | % | (0.80 | ) | ||||||||||||
Cost of average total deposits and borrowings | 0.12 | % | 0.15 | % | (0.03 | ) | 0.27 | % | (0.15 | ) | ||||||||||||
Yield on average interest-earning assets | 3.17 | % | 3.49 | % | (0.32 | ) | 3.96 | % | (0.79 | ) | ||||||||||||
Cost of average interest-bearing liabilities | 0.19 | % | 0.22 | % | (0.03 | ) | 0.41 | % | (0.22 | ) | ||||||||||||
Net interest spread | 2.98 | % | 3.27 | % | (0.29 | ) | 3.55 | % | (0.57 | ) | ||||||||||||
Net interest spread without PPP | 2.76 | % | 2.98 | % | (0.22 | ) | 3.76 | % | (1.00 | ) | ||||||||||||
Net interest margin (1) | 3.06 | % | 3.35 | % | (0.29 | ) | 3.70 | % | (0.64 | ) | ||||||||||||
Net interest margin without PPP (1) | 2.83 | % | 3.05 | % | (0.22 | ) | 3.89 | % | (1.06 | ) | ||||||||||||
(1) Tax-exempt income has been adjusted to a tax equivalent basis at a rate of | ||||||||||||||||||||||
For the Six Months Ended, | ||||||||||||||||||||||
June 30, 2021 | June 30, 2020 | $ Change | % Change | |||||||||||||||||||
Average Balances | (Dollars in thousands) | |||||||||||||||||||||
Gross loans | $ | 716,999 | $ | 722,799 | $ | (5,800 | ) | -1 | % | |||||||||||||
Gross loans without PPP | $ | 617,957 | $ | 660,829 | $ | (42,872 | ) | -6 | % | |||||||||||||
Loans held for sale | $ | 27,722 | $ | 14,290 | $ | 13,432 | 94 | % | ||||||||||||||
Investment securities | $ | 137,096 | $ | 108,723 | $ | 28,373 | 26 | % | ||||||||||||||
Federal funds sold & interest bearing deposits in banks | $ | 278,390 | $ | 74,540 | $ | 203,850 | 273 | % | ||||||||||||||
Interest-earning assets | $ | 1,160,207 | $ | 1,581,181 | $ | (420,974 | ) | -27 | % | |||||||||||||
Non-interest bearing demand deposits | $ | 406,416 | $ | 273,541 | $ | 132,875 | 49 | % | ||||||||||||||
Interest bearing deposits | $ | 675,864 | $ | 575,106 | $ | 100,758 | 18 | % | ||||||||||||||
Total Deposits | $ | 1,082,280 | $ | 848,647 | $ | 233,633 | 28 | % | ||||||||||||||
Borrowings | $ | 13,910 | $ | 16,204 | $ | (2,294 | ) | -14 | % | |||||||||||||
Interest-bearing liabilities | $ | 689,774 | $ | 591,310 | $ | 98,464 | 17 | % | ||||||||||||||
Total Equity | $ | 115,751 | $ | 107,655 | $ | 8,096 | 8 | % | ||||||||||||||
Total Deposits excl. Brokered CDs | 1,078,747 | 842,117 | 236,630 | 28.1 | % | |||||||||||||||||
For the Six Months Ended, | ||||||||||||||||||||||
June 30, 2021 | June 30, 2020 | Change | ||||||||||||||||||||
Net Interest Margin | ||||||||||||||||||||||
Yield on average gross loans (1) | 4.80 | % | 4.86 | % | (0.06 | ) | ||||||||||||||||
Yield on average gross loans without PPP (1) | 4.60 | % | 5.15 | % | (0.55 | ) | ||||||||||||||||
Yield on average investment securities (1) | 2.28 | % | 2.86 | % | (0.58 | ) | ||||||||||||||||
Yield on Fed funds sold & interest bearing deposits in banks | 0.12 | % | 0.69 | % | (0.57 | ) | ||||||||||||||||
Cost of average interest bearing deposits | 0.18 | % | 0.38 | % | (0.20 | ) | ||||||||||||||||
Cost of average borrowings | 1.80 | % | 2.87 | % | (1.07 | ) | ||||||||||||||||
Cost of average total deposits and borrowings | 0.13 | % | 0.31 | % | (0.18 | ) | ||||||||||||||||
Yield on average interest-earning assets | 3.32 | % | 4.27 | % | (0.95 | ) | ||||||||||||||||
Cost of average interest-bearing liabilities | 0.21 | % | 0.45 | % | (0.24 | ) | ||||||||||||||||
Net interest spread | 3.11 | % | 3.82 | % | (0.71 | ) | ||||||||||||||||
Net interest spread without PPP | 2.86 | % | 4.01 | % | (1.15 | ) | ||||||||||||||||
Net interest margin (1) | 3.20 | % | 3.98 | % | (0.78 | ) | ||||||||||||||||
Net interest margin without PPP (1) | 2.93 | % | 4.15 | % | (1.22 | ) | ||||||||||||||||
(1) Tax-exempt income has been adjusted to a tax equivalent basis at a rate of |
Adversely Classified Loans and Securities | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
June 30, 2021 | Mar 31, 2021 | $ Change | % Change | June 30, 2020 | $ Change | % Change | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Rated substandard or worse, but not impaired, beginning of three month period | $ | 12,698 | $ | 14,200 | $ | (1,502 | ) | -11 | % | $ | 9,269 | $ | 3,429 | 37 | % | ||||||
Addition of previously classified pass graded loans | 589 | 304 | 285 | 94 | % | 126 | 463 | 367 | % | ||||||||||||
Upgrades to pass or other loans especially mentioned status | (4,605 | ) | - | (4,605 | ) | 100 | % | - | (4,605 | ) | -100 | % | |||||||||
Moved to nonaccrual | - | - | - | 0 | % | (219 | ) | 219 | -100 | % | |||||||||||
Principal payments, net | (644 | ) | (1,806 | ) | 1,162 | -64 | % | (1,032 | ) | 388 | -38 | % | |||||||||
Rated substandard or worse, but not impaired, end of three month period | $ | 8,038 | $ | 12,698 | $ | (4,660 | ) | -37 | % | $ | 8,144 | $ | (106 | ) | -1 | % | |||||
Impaired | 3,357 | 3,748 | (391 | ) | -10 | % | 1,606 | 1,751 | 109 | % | |||||||||||
Total adversely classified loans¹ | $ | 11,395 | $ | 16,446 | $ | (5,051 | ) | -31 | % | $ | 9,750 | $ | 1,645 | 17 | % | ||||||
Other loans especially mentioned or watch, but not impaired | $ | 46,723 | $ | 79,603 | $ | (32,880 | ) | -41 | % | $ | 132,761 | $ | (86,038 | ) | -65 | % | |||||
Gross loans (excluding deferred loan fees) | $ | 693,888 | $ | 722,713 | $ | (28,825 | ) | -4 | % | $ | 787,336 | $ | (93,448 | ) | -12 | % | |||||
Adversely classified loans to gross loans | 1.64 | % | 2.28 | % | 1.24 | % | |||||||||||||||
Adversely classified loans to gross loans without PPP | 1.83 | % | 2.68 | % | 1.48 | % | |||||||||||||||
Allowance for loan losses | $ | 9,078 | $ | 10,721 | $ | (1,643 | ) | -15 | % | $ | 11,507 | $ | (2,429 | ) | -21 | % | |||||
Allowance for loan losses as a percentage of adversely classified loans | 79.67 | % | 65.19 | % | 118.02 | % | |||||||||||||||
Allowance for loan losses to total impaired loans | 270.42 | % | 286.05 | % | 716.50 | % | |||||||||||||||
Adversely classified loans to total assets | 0.88 | % | 1.32 | % | 0.86 | % | |||||||||||||||
Delinquent loans to gross loans, not in nonaccrual status 2 | 0.01 | % | 0.21 | % | 0.02 | % | |||||||||||||||
Delinquent loans to gross loans without PPP, not in nonaccrual status | 0.01 | % | 0.24 | % | 0.03 | % | |||||||||||||||
¹Adversely classified loans are defined as loans having a well-defined weakness or weaknesses related to the borrower's financial capacity or to pledged collateral that may | |||||||||||||||||||||
jeopardize the repayment of the debt. They are characterized by the possibility that the Bank may sustain some loss if the deficiencies giving rise to the substandard | |||||||||||||||||||||
classification are not corrected. Note that any loans internally rated worse than substandard are included in the impaired loan totals. | |||||||||||||||||||||
2 Delinquent loans are defined as loans past due 30-90 days and still accruing |
Nonperforming Assets | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
June 30, 2021 | Mar 31, 2021 | $ Change | % Change | June 30, 2020 | $ Change | % Change | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||
Total nonaccrual loans, beginning of three month period | $ | 2,203 | $ | 2,392 | $ | (189 | ) | -8 | % | $ | 1,622 | $ | 581 | 36 | % | |||||||
Transfer to performing loans | (138 | ) | - | (138 | ) | -100 | % | - | (138 | ) | -100 | % | ||||||||||
Addition of nonaccrual loans | - | 202 | (202 | ) | -100 | % | 219 | (219 | ) | -100 | % | |||||||||||
Moved to other assets owned | - | (265 | ) | 265 | -100 | % | (169 | ) | 169 | -100 | % | |||||||||||
Principal payments, net | (246 | ) | (126 | ) | (120 | ) | 95 | % | (12 | ) | (234 | ) | 1950 | % | ||||||||
Charge-offs, net | - | - | - | 0 | % | (234 | ) | 234 | -100 | % | ||||||||||||
Total nonaccrual loans, end of three month period | $ | 1,819 | $ | 2,203 | $ | (384 | ) | -17 | % | $ | 1,426 | $ | 393 | 28 | % | |||||||
Other real estate owned and foreclosed assets | 241 | 265 | (24 | ) | -9 | % | - | 241 | 100 | % | ||||||||||||
Total nonperforming assets | $ | 2,060 | $ | 2,468 | $ | (408 | ) | -17 | % | $ | 1,426 | $ | 634 | 44 | % | |||||||
Total restructured performing loans, beginning of period | $ | 1,545 | $ | 168 | $ | 1,377 | 820 | % | $ | 278 | $ | 1,267 | 456 | % | ||||||||
Transfer to nonaccrual loans | - | - | - | 0 | % | - | - | 0 | % | |||||||||||||
Addition of restructured performing loans | - | 1,382 | (1,382 | ) | -100 | % | - | - | 0 | % | ||||||||||||
Principal payments, net | (7 | ) | (5 | ) | (2 | ) | 40 | % | (5 | ) | (2 | ) | 40 | % | ||||||||
Charge-offs, net | - | - | - | 0 | % | (93 | ) | 93 | -100 | % | ||||||||||||
Total restructured performing loans, end of period | $ | 1,538 | $ | 1,545 | $ | (7 | ) | 0 | % | $ | 180 | $ | 1,358 | 754 | % | |||||||
Accruing loans past due 90 days or more | $ | - | $ | - | $ | - | 0 | % | $ | - | $ | - | 0 | % | ||||||||
Percentage of nonperforming assets to total assets | 0.16 | % | 0.20 | % | 0.13 | % | ||||||||||||||||
Nonperforming loans to total loans | 0.26 | % | 0.30 | % | 0.18 | % | ||||||||||||||||
Nonperforming loans to total loans without PPP | 0.29 | % | 0.36 | % | 0.22 | % |
Allowance for Loan Losses | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
For the Three Months Ended, | |||||||||||||||||||||
June 30, 2021 | Mar 31, 2021 | $ Change | % Change | June 30, 2020 | $ Change | % Change | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Gross loans outstanding at end of period | $ | 693,888 | $ | 722,713 | $ | (28,825 | ) | -4 | % | $ | 787,336 | $ | (93,448 | ) | -12 | % | |||||
Average loans outstanding, gross | $ | 709,818 | $ | 724,259 | $ | (14,441 | ) | -2 | % | $ | 762,502 | $ | (52,684 | ) | -7 | % | |||||
Allowance for loan losses, beginning of period | $ | 10,721 | $ | 12,068 | $ | (1,347 | ) | -11 | % | $ | 10,786 | $ | (65 | ) | -1 | % | |||||
Commercial | - | - | - | 0 | % | (303 | ) | 303 | 100 | % | |||||||||||
Commercial Real Estate | - | - | - | 0 | % | - | - | 0 | % | ||||||||||||
Residential Real Estate | - | - | - | 0 | % | - | - | 0 | % | ||||||||||||
Consumer | (48 | ) | (46 | ) | (2 | ) | 4 | % | (51 | ) | 3 | -6 | % | ||||||||
Total charge-offs | (48 | ) | (46 | ) | (2 | ) | 4 | % | (354 | ) | 306 | -86 | % | ||||||||
Commercial | 4 | 38 | (34 | ) | -89 | % | - | 4 | 100 | % | |||||||||||
Commercial Real Estate | - | - | - | 0 | % | - | - | 0 | % | ||||||||||||
Residential Real Estate | - | 49 | (49 | ) | -100 | % | 72 | (72 | ) | -100 | % | ||||||||||
Consumer | 1 | 12 | (11 | ) | -92 | % | 3 | (2 | ) | -67 | % | ||||||||||
Total recoveries | 5 | 99 | (94 | ) | -95 | % | 75 | (70 | ) | -93 | % | ||||||||||
Net recoveries/(charge-offs) | (43 | ) | 53 | (96 | ) | -181 | % | (279 | ) | 236 | -85 | % | |||||||||
Provision to income | (1,600 | ) | (1,400 | ) | (200 | ) | 14 | % | 1,000 | (2,600 | ) | -260 | % | ||||||||
Allowance for loan losses, end of period | $ | 9,078 | $ | 10,721 | $ | (1,643 | ) | -15 | % | $ | 11,507 | $ | (2,429 | ) | -21 | % | |||||
Ratio of net loans charged-off to average | |||||||||||||||||||||
gross loans outstanding, annualized | 0.02 | % | -0.03 | % | 0.05 | % | 0.15 | % | -0.13 | % | |||||||||||
Ratio of net loans charged-off to average | |||||||||||||||||||||
gross loans outstanding without PPP, annualized | 0.03 | % | -0.03 | % | 0.06 | % | 0.17 | % | -0.14 | % | |||||||||||
Ratio of allowance for loan losses to | |||||||||||||||||||||
gross loans outstanding | 1.31 | % | 1.48 | % | -0.17 | % | 1.46 | % | -0.15 | % | |||||||||||
Ratio of allowance for loan losses to | |||||||||||||||||||||
gross loans without PPP outstanding | 1.45 | % | 1.75 | % | -0.30 | % | 1.75 | % | -0.30 | % | |||||||||||
For the Six Months Ended, | |||||||||||||||||||||
June 30, 2021 | June 30, 2020 | $ Change | % Change | ||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Gross loans outstanding at end of period | $ | 693,888 | $ | 787,336 | $ | (93,448 | ) | -12 | % | ||||||||||||
Average loans outstanding, gross | $ | 716,999 | $ | 722,799 | $ | (5,800 | ) | -1 | % | ||||||||||||
Allowance for loan losses, beginning of period | $ | 12,068 | $ | 8,993 | $ | 3,075 | 34 | % | |||||||||||||
Commercial | - | (433 | ) | 433 | -100 | % | |||||||||||||||
Commercial Real Estate | - | - | - | 0 | % | ||||||||||||||||
Residential Real Estate | - | - | - | 0 | % | ||||||||||||||||
Consumer | (95 | ) | (131 | ) | 36 | -27 | % | ||||||||||||||
Total charge-offs | (95 | ) | (564 | ) | 469 | -83 | % | ||||||||||||||
Commercial | 42 | 0 | 42 | 100 | % | ||||||||||||||||
Commercial Real Estate | - | - | - | 0 | % | ||||||||||||||||
Residential Real Estate | 50 | 72 | (22 | ) | -31 | % | |||||||||||||||
Consumer | 13 | 6 | 7 | 117 | % | ||||||||||||||||
Total recoveries | 105 | 78 | 27 | 35 | % | ||||||||||||||||
Net recoveries (charge-offs) | 10 | (486 | ) | 496 | -102 | % | |||||||||||||||
Provision charged to income | (3,000 | ) | 3,000 | (6,000 | ) | -200 | % | ||||||||||||||
Allowance for loan losses, end of period | $ | 9,078 | $ | 11,507 | $ | (2,429 | ) | -21 | % | ||||||||||||
Ratio of net loans charged-off to average | |||||||||||||||||||||
gross loans outstanding, annualized | 0.00 | % | 0.07 | % | -0.07 | % | |||||||||||||||
Ratio of net loans charged-off to average | |||||||||||||||||||||
gross loans outstanding without PPP, annualized | 0.00 | % | 0.07 | % | -0.07 | % | |||||||||||||||
Ratio of allowance for loan losses to | |||||||||||||||||||||
gross loans outstanding | 1.31 | % | 1.46 | % | -0.15 | % | |||||||||||||||
Ratio of allowance for loan losses to | |||||||||||||||||||||
gross loans without PPP outstanding | 1.45 | % | 1.75 | % | -0.30 | % | |||||||||||||||
ABOUT PACIFIC FINANCIAL CORPORATION
Pacific Financial Corporation of Aberdeen, Washington, is the bank holding company for Bank of the Pacific, a state chartered and federally insured commercial bank. Bank of the Pacific offers banking products and services to small-to-medium sized businesses and professionals in western Washington and Oregon. At June 30, 2021, the Company had total assets of
Cautions Concerning Forward-Looking Statements
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other laws, including all statements in this release that are not historical facts or that relate to future plans or events or projected results of Pacific Financial Corporation and its wholly-owned subsidiary, Bank of the Pacific. These forward-looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from those projected, anticipated or implied, and could negatively impact the Company’s operating and stock price performance. These risks and uncertainties include various risks associated with growing the Bank and expanding the services it provides, development of new business lines and markets, competition in the marketplace, general economic conditions, including the COVID-19 pandemic and government responses thereto, changes in interest rates, extensive and evolving regulation of the banking industry, and many other risks. We undertake no obligation to update or revise any forward-looking statement. Readers of this release are cautioned not to put undue reliance on forward-looking statements.