Pacific Financial Corp Reports Fourth Quarter 2025 Earnings of $3.1 Million, or $0.31 per Diluted Share; Declares Quarterly Cash Dividend of $0.15 per Share

Rhea-AI Summary

Pacific Financial (OTCQX: PFLC) reported Q4 2025 net income of $3.1 million ($0.31 diluted), and full-year 2025 net income up 22% to $11.6 million ($1.16 diluted). The Board declared a quarterly cash dividend of $0.15 per share payable Feb 28, 2026.

Key metrics: gross loans $775.9M (+10% YoY), deposits $1.12B (+11% YoY), tangible book value per share $11.27 (+13% YoY), ROAE ~9.77% for 2025, and capital ratios above well-capitalized thresholds (leverage ~10.8%).

Positive

• Full-year net income +22% to $11.6 million in 2025
• Gross loans +10% year-over-year to $775.9 million
• Total deposits +11% year-over-year to $1.12 billion
• Tangible book value per share +13% to $11.27
• Estimated total risk-based capital ratio of 17.3%

Negative

• Quarterly net income declined from $3.5M to $3.1M QoQ
• Provision for credit losses $120,000 versus prior quarter recapture
• Net interest margin decreased to 4.11% QoQ
• Efficiency ratio worsened to 71.21% in Q4
• Noninterest income YTD declined due to mortgage banking closure

ABERDEEN, Wash., Jan. 30, 2026 (GLOBE NEWSWIRE) -- Pacific Financial Corporation (OTCQX: PFLC), (“Pacific Financial”) or (the “Company”), the holding company for Bank of the Pacific (the “Bank”), reported net income of $3.1 million, or $0.31 per diluted share for the fourth quarter of 2025, compared to $3.5 million, or $0.35 per diluted share for the third quarter of 2025, and $2.2 million, or $0.21 per diluted share for the fourth quarter of 2024. The current quarter’s net income relative to the prior quarter reflects an increase in net interest income and non-interest income offset by a provision for credit losses versus a recapture for credit losses in the prior quarter and higher non-interest expenses.

For the year ended December 31, 2025, net income increased 22% to $11.6 million, or $1.16 per diluted share, compared to $9.5 million, or $0.92 per diluted share in 2024. Except for year-end December 31, 2024 financials, all results are unaudited.

The Board of Directors of Pacific Financial declared a quarterly cash dividend of $0.15 per share on January 28, 2026. The dividend will be payable on February 28, 2026 to shareholders of record on February 13, 2026. This is an increase from $0.14 per share in the prior quarter.

“Loan and deposit growth continue to reflect positive trends as our banking teams develop new relationships and expand existing ones. This growth has contributed to increasing net interest income throughout the fourth quarter and fiscal 2025,” said Denise Portmann, President and Chief Executive Officer. “Looking ahead to 2026, we remain encouraged by the resilience of our local economy, the caliber of our management teams, the soundness of our strategic direction and the strength of the Company’s financial position.”

“Our strong net interest margin, deposit base and credit quality metrics remain core operating principals for the Company which allows us to deliver a solid return on average equity, which was 9.77% in 2025, and payments of dividends to shareholders, which totaled $0.56 per share in 2025,” said Portmann.

Fourth Quarter 2025 Financial Highlights:

• Return on average assets (“ROAA”) was 0.98% in the fourth quarter 2025, compared to 1.12% for the third quarter 2025, and 0.74% for the fourth quarter 2024.
• Return on average equity (“ROAE”) was 9.84%, compared to 11.50% the preceding quarter, and 7.27% the fourth quarter a year earlier.
• Net interest income increased slightly to $12.3 million in the fourth quarter, compared to the prior quarter, and increased $1.5 million from $10.9 million in the fourth quarter of 2024.
• Net interest margin (“NIM”) decreased to 4.11%, compared to 4.25% the preceding quarter, and increased from 3.99% for the fourth quarter a year ago.
• A provision for credit losses of $120,000 was recognized in the fourth quarter ended December 31, 2025, compared to a recapture of $49,000 in the preceding quarter and a recapture of $103,000 in the fourth quarter a year ago.
• Gross portfolio loan balances increased slightly to $775.9 million at December 31, 2025, compared to $772.2 million at September 30, 2025, and increased 10%, or $71.0 million, from $704.9 million one year earlier.
• Total deposits increased $8.9 million to $1.12 billion at December 31, 2025, compared to the previous quarter and increased $108.2 million, or 11%, from one year earlier.
• Non-performing assets to total assets ratio declined to 0.01%, or $124,000 for the current quarter ended December 31, 2025. Substandard loans increased $794,000 to $2.0 million and special mention assets increased $6.6 million to $16.2 million at December 31, 2025 compared to the previous quarter.
• Shareholder equity increased $3.1 million during the quarter largely due to net income and lower accumulated other comprehensive loss marks on the available-for-sale investment portfolio, partially offset by dividend payments. Tangible book value per share was $11.27 at December 31, 2025, an increase of $1.34 from $9.93 at December 31, 2024, representing growth in tangible book value per share of 13%. Total dividends paid to shareholders over the past year totaled $0.56 per share.
• Pacific Financial and Bank of the Pacific continue to exceed regulatory well-capitalized requirements. At December 31, 2025, Pacific Financial’s estimated leverage ratio was 10.8% and its estimated total risk-based capital ratio was 17.3%.

Balance Sheet Review

Total assets increased to $1.28 billion at December 31, 2025 from $1.26 billion one quarter earlier, and $1.15 billion at December 31, 2024.

Cash and interest earning deposits decreased $9.5 million to $114.8 million at December 31, 2025, from $124.3 million at September 30, 2025, and increased $34.7 million from $80.2 million one year earlier. The decrease in cash and interest earning deposits in the current quarter largely relates to funding higher yielding loan originations and investment purchases.

During the fourth quarter of 2025 liquidity metrics continued to be strong. At December 31, 2025, the Company’s short-term funding sources totaled $617.2 million. This represents a coverage ratio of short-term funds available to uninsured and uncollateralized deposits of 193%. Included in available sources are collateralized credit lines the Company has established with the Federal Home Loan Bank of Des Moines (FHLB) and the Federal Reserve Bank of San Francisco. Additionally, the Bank has $60.0 million of unsecured borrowing lines from various correspondent banks. There was no balance outstanding on any of these facilities at quarter-end. Uninsured or uncollateralized deposits were 29% of total deposits at December 31, 2025.

Investment securities increased $18.8 million to $322.6 million at December 31, 2025, compared to $303.8 million at September 30, 2025, and increased $18.1 million compared to a year ago. The increase in investment securities was funded from deposit growth and a reallocation of interest earning cash deposits. The largest investment category was collateralized mortgage obligations, which accounted for 54% of the investment portfolio at December 31, 2025 compared to 52% at September 30, 2025 and 48% at December 31, 2024. The yield on the investment portfolio decreased 11 basis points during the current quarter to 3.50% from 3.61% the prior quarter and increased 5 basis points from 3.45% the fourth quarter a year ago. The current quarter decline was related to the decrease in yield as floating rate securities repriced downwards as prime and SOFR index rates declined during the quarter. Partially offsetting that decline in yield was purchases of $23.1 million with an average yield of 4.80%. The adjusted duration of the portfolio was 4.2 years at December 31, 2025.

Gross loans balances increased $3.6 million, to $775.9 million at December 31, 2025, compared to $772.2 million at September 30, 2025. Year-over-year gross loan growth was 10%, or $71.0 million as the Company originated $217.8 million in loans in 2025. Loan originations for the year included $30 million in SBA commercial loan purchases during the third quarter. The largest categories of growth were in commercial and agriculture, multi-family, and commercial real estate, both owner-occupied and non-owner occupied. The loan pipeline continues to be supported by sustained business development activity of the Company’s commercial lending teams.

The Company manages concentration limits that establish maximum exposure levels by certain industry segments, loan product types, geography and single borrower limits. In addition, the loan portfolio continues to be well-diversified and is collateralized with assets predominantly within the Company’s Western Washington and Oregon markets. Loans classified as commercial real estate for regulatory concentration purposes totaled $291.3 million at December 31, 2025, or 201% of total risk-based capital.

Credit quality: Nonperforming assets remain minimal at $124,000, or 0.01% of total assets at December 31, 2025. While the total of loans designated as special mention increased $6.6 million to $16.2 million during the quarter, the ratio to total loans remained relatively low at 2.09%. The increase was primarily due to a single owner-occupied CRE loan with a balance of $5.9 million that was downgraded in November 2025. The Company has zero other real estate owned as of December 31, 2025.

Allowance for credit losses (“ACL”): ACL-loans increased $235,000 to $9.3 million, or 1.20% of total portfolio loans at December 31, 2025, compared to 1.17% at September 30, 2025. The ratio of ACL to non-government guaranteed loans was 1.26% at December 31, 2025. During the quarter, gross recoveries of $182,000 was recorded to the ACL.

A provision for credit losses of $120,000 was recorded in the current quarter largely reflecting new originations and economic variables compared to a benefit for credit losses of $49,000 in the prior quarter.

Total deposits increased $8.9 million to $1.12 billion at December 31, 2025, compared to the previous quarter and increased $108.2 million from $1.01 billion one year earlier. A majority of the increase for the current quarter was due to increased money-market balances and time deposits, which were partially offset by decreases in interest-bearing demand balances. Year-over-year growth was primarily a result of increased money-market balances and non-interest-bearing accounts.

Core deposits represented 87% of total deposits at quarter end, including non-interest-bearing deposits of 36% of deposits, and interest-bearing demand, money market, and savings deposits representing 18%, 23%, and 10% of total deposits, respectively. CDs as a percentage of deposits increased slightly to 13% of total deposits compared to the prior quarter. The high percentage of non-interest-bearing deposits supports a lower cost core deposits portfolio.

Shareholders’ equity was $126.4 million at December 31, 2025, compared to $123.3 million at September 30, 2025, and $113.9 million at December 31, 2024. The increase in shareholders’ equity during the current quarter was primarily due to $3.1 million in net income and a $1.3 million decrease in unrealized losses (after-tax) on available-for-sale securities partially offset by $1.4 million in dividends to shareholders. Net unrealized losses (after-tax) included in shareholders’ equity on available-for-sale securities were $9.7 million at December 31, 2025, compared to $11.0 million at September 30, 2025, and $17.3 million at December 31, 2024.

Book value per common share was $12.61 at December 31, 2025, compared to $12.31 at September 30, 2025, and $11.26 at December 31, 2024. Tangible book value per common share was $11.27 at December 31, 2025, compared to $10.97 at September 30, 2025, and $9.93 at December 31, 2024. The Company’s tangible common equity ratio was 9.0% at December 31, 2025, compared to 8.8% the prior quarter and one year earlier.

Regulatory capital ratios of both the Company and the Bank continue to exceed well-capitalized regulatory thresholds, with the Company’s leverage ratio at 10.8% and total risk-based capital ratio at 17.3% as of December 31, 2025. These regulatory capital ratios are estimates, pending completion and filing of regulatory reports.

Income Statement Review

Net interest income remained relatively unchanged, increasing slightly by $22,000, to $12.3 million for the fourth quarter of 2025, and increased $1.5 million compared to $10.9 million for the fourth quarter a year ago. The marginal change in the current quarter compared to the preceding quarter reflects increased interest income from larger average loan and investment security balances, partially offset by decreased yields on interest earning assets and increased deposit interest expense.

The Company’s net interest margin decreased 14 basis points to 4.11% for the quarter ended December 31, 2025, from 4.25% the prior quarter and increased from 3.99% in the fourth quarter a year ago. During the current quarter, the FOMC decreased the federal funds rate twice; totaling 50 basis points. During the quarter, yields on interest-earning assets indexed to the federal funds rate, SOFR or prime rate were impacted by the 50 basis point decrease. The impact was partially offset by repricing of lower-yielding loans and investment purchases during the quarter.

Yields on portfolio loans decreased 5 basis points during the fourth quarter to 5.96% from 6.01% the preceding quarter, while yields on investment securities decreased 11 basis points to 3.50% from 3.61% over the same time period and yields on interest-earning deposits decreased 45 basis points. The Company continues to actively monitor and manage its cost of funds. For the current quarter, the Company’s total cost of funds increased slightly to 1.08% compared to 1.05% for the preceding quarter, primarily as a result of higher balances of money-market accounts and time-deposit during the quarter, and decreased from 1.17% for the fourth quarter of 2024. The high percentage of non-interest-bearing deposits at 36% continues to help reduce volatility in deposit costs.

For the twelve months ended December 31, 2025, net interest income increased $3.6 million to $47.8 million compared to $44.2 million for the like period a year ago. The increase year-over-year was primarily the result of growth in total interest-earning assets including increased balances in loans and investments. For the twelve months ended December 31, 2025, the net interest margin remained at 4.18%. Over the past year, the FOMC has decreased the federal funds target rate 75 basis points while an additional 100 basis points decrease was implemented in the second half of 2024.

Noninterest income increased to $1.7 million for the current quarter and decreased slightly compared to $1.8 million for the fourth quarter a year earlier. The decrease compared to one year earlier was primarily due to the loss of revenue associated with the mortgage banking division which was closed in late 2024. Fee and service charge income increased to $1.5 million in the current quarter compared to $1.3 million the previous quarter and $1.3 million in the fourth quarter of 2024. For the year ended December 31, 2025, non-interest income was $5.8 million compared to $6.9 million for the same period a year ago, with the decrease primarily due to the loss of gross revenue associated with the mortgage banking division which closed in late 2024.

Noninterest expenses increased to $10.0 million for the fourth quarter of 2025 compared to $9.4 million for the prior quarter and decreased from $10.1 million for the fourth quarter of 2024. The increase in the current quarter compared to the prior quarter was primarily related to increases in incentive and payroll accruals, and state taxes. The decrease from the fourth quarter of 2024 was primarily due to decreased expenses associated with the mortgage banking division which was closed in late 2024.

For the twelve months ended December 31, 2025, total non-interest expenses were $38.5 million, compared to $39.2 million for the twelve months ended December 31, 2024. The Company’s efficiency ratio was to 71.21% for the fourth quarter of 2025, compared to 68.47% in the preceding quarter and 79.80% in the same quarter a year ago.

Income tax expense: Federal and Oregon state income tax expenses totaled $792,000 for the current quarter, and $904,000 for the preceding quarter, resulting in effective tax rates of 20.3% and 20.6%, respectively. These income tax expenses reflect the benefits of tax-exempt income on tax-exempt loans and investments, affordable housing tax credit financing, and investments in bank-owned life insurance.

FINANCIAL HIGHLIGHTS (unaudited) (In 000s, except per share data)	Quarter Ended										Change From											Twelve Months Ended						Change
		Dec 31,			Sep 30,			Dec 31,				Sep 30, 2025					Dec 31, 2024					Dec 31,			Dec 31,
		2025			2025			2024				$		%			$		%			2025			2024				$		%
Earnings Ratios & Data
Net Income	$	3,119		$	3,478		$	2,162			$	(359	)	-10	%	$	957		44	%	$	11,645		$	9,532			$	2,113		22	%
Return on average assets		0.98	%		1.12	%		0.74	%			-0.14	%				0.24	%				0.95	%		0.84	%			0.11	%
Return on average equity		9.84	%		11.50	%		7.27	%			-1.66	%				2.57	%				9.77	%		8.20	%			1.57	%
Efficiency ratio(1)		71.21	%		68.47	%		79.80	%			2.74	%				-8.59	%				71.90	%		76.69	%			-4.79	%
Net-interest margin %(2)		4.11	%		4.25	%		3.99	%			-0.14	%				0.12	%				4.18	%		4.18	%			0.00	%
Share Ratios & Data
Basic earnings per share	$	0.31		$	0.35		$	0.21			$	(0.04	)	-11	%	$	0.10		48	%	$	1.16		$	0.93			$	0.23
Diluted earning per share	$	0.31		$	0.35		$	0.21			$	(0.04	)	-11	%	$	0.10		48	%	$	1.16		$	0.92			$	0.24
Book value per share(3)	$	12.61		$	12.31		$	11.26			$	0.30		2	%	$	1.35		12	%
Tangible book value per share(4)	$	11.27		$	10.97		$	9.93			$	0.30		3	%	$	1.34		13	%
Common shares outstanding		10,020			10,020			10,110				-		0	%		(90	)	-1	%
PFLC stock price	$	12.75		$	11.59		$	12.45			$	1.16		10	%	$	0.30		2	%
Dividends paid per share	$	0.14		$	0.14		$	0.14			$	-		0	%	$	-		0	%	$	0.56		$	0.56			$	-		0	%
Balance Sheet Data
Assets	$	1,275,116		$	1,263,138		$	1,153,563			$	11,978		1	%	$	121,553		11	%
Portfolio Loans	$	775,852		$	772,220		$	704,865			$	3,632		0	%	$	70,987		10	%
Deposits	$	1,122,935		$	1,114,040		$	1,014,731			$	8,895		1	%	$	108,204		11	%
Investments	$	322,555		$	303,804		$	304,502			$	18,751		6	%	$	18,053		6	%
Shareholders equity	$	126,390		$	123,329		$	113,856			$	3,061		2	%	$	12,534		11	%
Liquidity Ratios
Short-term funding to uninsured
and uncollateralized deposits		193	%		187	%		217	%			6	%				-24	%
Uninsured and uncollateralized
deposits to total deposits		29	%		28	%		25	%			1	%				4	%
Portfolio loans to deposits ratio		69	%		69	%		69	%			0	%				0	%
Asset Quality Ratios
Non-performing assets to assets		0.01	%		0.03	%		0.09	%			-0.02	%				-0.08	%
Non-accrual loans to portfolio loans		0.02	%		0.05	%		0.16	%			-0.03	%				-0.14	%
Loan losses to avg portfolio loans		-0.07	%		0.03	%		-0.04	%			-0.10	%				-0.03	%				0.01	%		0.00	%			0.01	%
ACL-loans to portfolio loans		1.20	%		1.17	%		1.26	%			0.03	%				-0.06	%
Capital Ratios (PFC)
Total risk-based capital ratio		17.3	%		17.1	%		17.5	%			0.2	%				-0.2	%
Tier 1 risk-based capital ratio		16.1	%		15.9	%		16.3	%			0.2	%				-0.2	%
Common equity tier 1 ratio		14.6	%		14.4	%		14.7	%			0.2	%				-0.1	%
Leverage ratio		10.8	%		10.9	%		11.3	%			-0.1	%				-0.5	%
Tangible common equity ratio		9.0	%		8.8	%		8.8	%			0.2	%				0.2	%
(1) Non-interest expense divided by net interest income plus noninterest income.
(2) Tax-exempt income has been adjusted to a tax equivalent basis at a rate of 21%.
(3) Book value per share is calculated as the total common shareholders' equity divided by the period ending number of common stock shares outstanding.
(4) Tangible book value per 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 (unaudited) ($ in 000s)	Quarter Ended										Change From											Twelve Months Ended						Change
		Dec 31,			Sep 30,			Dec 31,				Sep 30, 2025					Dec 31, 2024					Dec 31,			Dec 31,
		2025			2025			2024				$		%			$		%			2025			2024				$		%
Interest Income
Loan interest & fee income	$	11,561		$	11,469		$	10,340			$	92		1	%	$	1,221		12	%	$	44,174		$	41,192			$	2,982		7	%
Interest earning cash income		1,029			957			942				72		8	%		87		9	%		4,318			3,833				485		13	%
Investment income		2,778			2,760			2,590				18		1	%		188		7	%		10,944			9,978				966		10	%
Interest Income		15,368			15,186			13,872				182		1	%		1,496		11	%		59,436			55,003				4,433		8	%
Interest Expense
Deposits interest expense		2,865			2,695			2,796				170		6	%		69		2	%		10,825			9,829				996		10	%
Other borrowings interest expense		198			208			225				(10	)	-5	%		(27	)	-12	%		818			951				(133	)	-14	%
Interest Expense		3,063			2,903			3,021				160		6	%		42		1	%		11,643			10,780				863		8	%
Net Interest Income		12,305			12,283			10,851				22		0	%		1,454		13	%		47,793			44,223				3,570		8	%
Provision (recapture) for credit losses		120			(49	)		(103	)			169		-345	%		223		-217	%		542			168				374		223	%
Net Interest Income after provision		12,185			12,332			10,954				(147	)	-1	%		1,231		11	%		47,251			44,055				3,196		7	%
Non-Interest Income
Fees and service charges		1,492			1,255			1,267				237		19	%		225		18	%		5,157			4,791				366		8	%
Gain on sale of investments, net		-			-			-				-		0	%		-		0	%		(165	)		121				(286	)	-236	%
Gain on sale of loans, net		-			-			267				-		0	%		(267	)	-100	%		(2	)		1,132				(1,134	)	-100	%
Income on bank-owned insurance		198			195			250				3		2	%		(52	)	-21	%		775			800				(25	)	-3	%
Other non-interest income		5			9			(9	)			(4	)	-44	%		14		-156	%		30			25				5		20	%
Non-Interest Income		1,695			1,459			1,775				236		16	%		(80	)	-5	%		5,795			6,869				(1,074	)	-16	%
Non-Interest Expense
Salaries and employee benefits		6,336			5,851			6,288				485		8	%		48		1	%		24,260			24,944				(684	)	-3	%
Occupancy		600			566			768				34		6	%		(168	)	-22	%		2,375			2,574				(199	)	-8	%
Furniture, Fixtures & Equipment		320			318			289				2		1	%		31		11	%		1,244			1,127				117		10	%
Marketing & donations		177			135			149				42		31	%		28		19	%		623			680				(57	)	-8	%
Professional services		247			278			267				(31	)	-11	%		(20	)	-7	%		1,077			1,163				(86	)	-7	%
Data Processing & IT		1,221			1,245			1,380				(24	)	-2	%		(159	)	-12	%		4,933			4,921				12		0	%
Other		1,068			1,016			934				52		5	%		134		14	%		4,016			3,775				241		6	%
Non-Interest Expense		9,969			9,409			10,075				560		6	%		(106	)	-1	%		38,528			39,184				(656	)	-2	%
Income before income taxes		3,911			4,382			2,654				(471	)	-11	%		1,257		47	%		14,518			11,740				2,778		24	%
Provision for income taxes		792			904			492				(112	)	-12	%		300		61	%		2,873			2,208				665		30	%
Net Income	$	3,119		$	3,478		$	2,162			$	(359	)	-10	%		957		44	%	$	11,645		$	9,532			$	2,113		22	%
Effective tax rate		20.3	%		20.6	%		18.5	%			-0.3	%				1.8	%				19.8	%		18.8	%			1.0	%

 

BALANCE SHEET (unaudited)	Period Ended										Change from											% of Total
($ in 000s)
		Dec 31,			Sep 30,			Dec 31,				Sep 30, 2025					Dec 31, 2024					Dec 31,		Sep 30,		Dec 31,
		2025			2025			2024				$		%			$		%			2025		2025		2024
Assets
Cash on hand and in banks	$	14,769		$	17,650		$	18,136			$	(2,881	)	-16	%	$	(3,367	)	-19	%		1	%	1	%	2	%
Interest earning deposits		100,037			106,637			62,015				(6,600	)	-6	%		38,022		61	%		8	%	9	%	6	%
Investment securities		322,555			303,804			304,502				18,751		6	%		18,053		6	%		25	%	24	%	26	%
Portfolio Loans, net of deferred fees		775,266			771,526			704,248				3,740		0	%		71,018		10	%		61	%	61	%	61	%
Allowance for credit losses		(9,292	)		(9,057	)		(8,851	)			(235	)	3	%		(441	)	5	%		-1	%	-1	%	-1	%
Net loans		765,974			762,469			695,397				3,505		0	%		70,577		10	%		60	%	60	%	60	%
Premises & equipment		16,133			16,412			16,952				(279	)	-2	%		(819	)	-5	%		1	%	1	%	1	%
Goodwill & Other Intangibles		13,435			13,435			13,435				-		0	%		-		0	%		1	%	1	%	1	%
Bank-owned life Insurance		28,824			28,626			28,333				198		1	%		491		2	%		2	%	2	%	2	%
Other assets		13,389			14,105			14,793				(716	)	-5	%		(1,404	)	-9	%		2	%	2	%	2	%
Total Assets	$	1,275,116		$	1,263,138		$	1,153,563			$	11,978		1	%	$	121,553		11	%		100	%	100	%	100	%
Liabilities & Shareholders' Equity
Deposits	$	1,122,935		$	1,114,040		$	1,014,731			$	8,895		1	%	$	108,204		11	%		88	%	88	%	88	%
Borrowings		13,403			13,403			13,403				-		0	%		-		0	%		1	%	1	%	1	%
Other liabilities		12,388			12,366			11,573				22		0	%		815		7	%		1	%	1	%	1	%
Common Stock & Retained Earnings		136,105			134,357			131,160				1,748		1	%		4,945		4	%		11	%	11	%	11	%
Accumulated Other Comprehensive Loss		(9,715	)		(11,028	)		(17,304	)			1,313		-12	%		7,589		-44	%		-1	%	-1	%	-1	%
Shareholders' equity		126,390			123,329			113,856				3,061		2	%		12,534		11	%		10	%	10	%	10	%
Liabilities & Shareholders' Equity	$	1,275,116		$	1,263,138		$	1,153,563			$	11,978		1	%	$	121,553		11	%		100	%	100	%	100	%

INVESTMENT COMPOSITION & CONCENTRATIONS (unaudited) ($ in 000s)	Period Ended										Change from											% of Total
		Dec 31,			Sep 30,			Dec 31,				Sep 30, 2025					Dec 31, 2024					Dec 31,		Sep 30,		Dec 31,
		2025			2025			2024				$		%			$		%			2025		2025		2024
Investment Securities
Collateralized mortgage obligations	$	173,544		$	156,667		$	147,262			$	16,877		11	%	$	26,282		18	%		54	%	52	%	48	%
Mortgage backed securities		46,751			44,927			46,112				1,824		4	%		639		1	%		14	%	15	%	15	%
U.S. Government and agency securities		58,830			58,770			67,716				60		0	%		(8,886	)	-13	%		18	%	19	%	22	%
Municipal securities		43,430			43,440			43,412				(10	)	0	%		18		0	%		14	%	14	%	15	%
Investment Securities	$	322,555		$	303,804		$	304,502			$	18,751		6	%	$	18,053		6	%		100	%	100	%	100	%
Held to maturity securities	$	28,382		$	29,028		$	41,442			$	(646	)	-2	%	$	(13,060	)	-32	%		9	%	10	%	14	%
Available for sale securities	$	294,173		$	274,776		$	263,060			$	19,397		7	%	$	31,113		12	%		91	%	90	%	86	%
Government & Agency securities	$	279,101		$	260,339		$	261,063			$	18,762		7	%	$	18,038		7	%		87	%	86	%	86	%
AAA, AA, A rated securities	$	42,768		$	42,780		$	42,773			$	(12	)	0	%	$	(5	)	0	%		13	%	14	%	14	%
Non-rated securities	$	686		$	685		$	666			$	1		0	%	$	20		3	%		0	%	0	%	0	%
AFS Unrealized Gain (Loss)	$	(12,613	)	$	(14,404	)	$	(22,437	)		$	1,791		-12	%	$	9,824		-44	%		-4	%	-5	%	-7	%

 
 

LIQUIDITY (unaudited)	Period Ended							Change from											% of Deposits
($ in 000s)
		Dec 31,		Sep 30,		Dec 31,			Sep 30, 2025					Dec 31, 2024					Dec 31,		Sep 30,		Dec 31,
		2025		2025		2024			$		%			$		%			2025		2025		2024
Short-term Funding
Cash and cash equivalents	$	106,558	$	112,645	$	67,951		$	(6,087	)	-5	%	$	38,607		57	%		9	%	10	%	7	%
Unencumbered AFS Securities		142,377		122,817		158,472			19,560		16	%		(16,095	)	-10	%		13	%	11	%	16	%
Secured lines of Credit (FHLB, FRB)		368,249		345,066		324,187			23,183		7	%		44,062		14	%		33	%	31	%	32	%
Short-term Funding	$	617,184	$	580,528	$	550,610		$	36,656		6	%	$	66,574		12	%		55	%	52	%	55	%

 
 

PORTFOLIO LOAN COMPOSITION & CONCENTRATIONS (unaudited) ($ in 000s)	Period Ended										Change from											% of Total
		Dec 31,			Sep 30,			Dec 31,				Sep 30, 2025					Dec 31, 2024					Dec 31,		Sep 30,		Dec 31,
		2025			2025			2024				$		%			$		%			2025		2025		2024
Portfolio Loans
Commercial & agriculture	$	106,694		$	99,469		$	75,240			$	7,225		7	%	$	31,454		42	%		14	%	14	%	10	%
Real estate:
Construction and development		35,716			34,574			42,725				1,142		3	%		(7,009	)	-16	%		5	%	4	%	6	%
Residential 1-4 family		103,341			102,588			103,489				753		1	%		(148	)	0	%		13	%	13	%	15	%
Multi-family		81,327			82,342			68,978				(1,015	)	-1	%		12,349		18	%		10	%	11	%	10	%
CRE -- owner occupied		188,387			188,814			165,120				(427	)	0	%		23,267		14	%		24	%	24	%	23	%
CRE -- non owner occupied		177,167			177,384			159,582				(217	)	0	%		17,585		11	%		23	%	23	%	23	%
Farmland		28,537			29,692			26,864				(1,155	)	-4	%		1,673		6	%		4	%	4	%	4	%
Consumer		54,683			57,357			62,867				(2,674	)	-5	%		(8,184	)	-13	%		7	%	7	%	9	%
Portfolio Loans		775,852			772,220			704,865			$	3,632		0	%	$	70,987		10	%		100	%	100	%	100	%
Less: ACL		(9,292	)		(9,057	)		(8,851	)
Less: deferred fees		(586	)		(694	)		(617	)
Net loans	$	765,974		$	762,469		$	695,397
Regulatory Commercial Real Estate	$	291,305		$	291,421		$	267,857			$	(116	)	0	%	$	23,448		9	%		38	%	38	%	38	%
Total Risk Based Capital(1)	$	144,884		$	142,676		$	139,458			$	2,208		2	%	$	5,426		4	%
CRE to Risk Based Capital(1)		201	%		204	%		192	%					-3	%				9	%

 
 

CRE--MULTI-FAMILY & NON OWNER OCCUPIED COMPOSITION (unaudited) ($ in 000s)	Period Ended							Change from											% of Total
		Dec 31,		Sep 30,		Dec 31,			Sep 30, 2025					Dec 31, 2024					Dec 31,		Sep 30,		Dec 31,
		2025		2025		2024			$		%			$		%			2025		2025		2024
Collateral Composition(2)
Multifamily	$	83,239	$	83,463	$	73,575		$	(224	)	0	%	$	9,664		13	%		31	%	31	%	30	%
Hospitality		32,165		31,961		31,369			204		1	%		796		3	%		12	%	12	%	13	%
Retail		31,572		31,901		36,813			(329	)	-1	%		(5,241	)	-14	%		12	%	12	%	15	%
Mixed Use		29,366		28,906		22,662			460		2	%		6,704		30	%		11	%	11	%	9	%
Mini Storage		23,847		22,828		25,028			1,019		4	%		(1,181	)	-5	%		9	%	9	%	10	%
Office		21,212		21,405		23,921			(193	)	-1	%		(2,709	)	-11	%		8	%	8	%	10	%
Industrial		17,313		17,251		14,723			62		0	%		2,590		18	%		6	%	6	%	6	%
Special Purpose		17,312		17,234		6,921			78		0	%		10,391		150	%		6	%	6	%	3	%
Warehouse		10,063		10,230		7,531			(167	)	-2	%		2,532		34	%		4	%	4	%	3	%
Other		2,146		2,591		3,155			(445	)	-17	%		(1,009	)	-32	%		1	%	1	%	1	%
Total	$	268,235	$	267,770	$	245,698		$	465		0	%	$	22,537		9	%		100	%	100	%	100	%
(1) Bank of the Pacific
(2) Includes loans in process of construction

 
  

CREDIT QUALITY (unaudited) ($ in 000s)	Period Ended										Change from
		Dec 31,			Sep 30,			Dec 31,				Sep 30, 2025					Dec 31, 2024
		2025			2025			2024				$		%			$		%
Risk Rating Distribution
Pass	$	757,625		$	761,416		$	691,350			$	(3,791	)	0	%	$	66,275		10	%
Special Mention		16,205			9,576			10,811				6,629		69	%		5,394		50	%
Substandard		2,022			1,228			2,704				794		65	%		(682	)	-25	%
Portfolio Loans	$	775,852		$	772,220		$	704,865			$	3,632		0	%	$	70,987		10	%
Nonperforming Assets
Nonaccruing loans		124			365			1,094			$	(241	)	-66	%		(970	)	-89	%
Other real estate owned		-			-			-				-		0	%		-		0	%
Nonperforming Assets	$	124		$	365		$	1,094			$	(241	)	-66	%		(970	)	-89	%
Credit Metrics
Classified loans1to portfolio loans		0.26	%		0.16	%		0.38	%			0.10	%				-0.12	%
ACL to classified loans1		459.55	%		737.54	%		327.33	%			-277.99	%				132.22	%
Loans past due 30+ days to portfolio loans2		0.16	%		0.04	%		0.14	%			0.12	%				0.02	%
Nonperforming assets to total assets		0.01	%		0.03	%		0.09	%			-0.02	%				-0.08	%
Nonaccruing loans to portfolio loans		0.02	%		0.05	%		0.16	%			-0.03	%				-0.14	%
(1) Classified loans include loans rated substandard or worse and 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. (2) Excludes non-accrual loans.

 
 

DEPOSIT COMPOSITION & CONCENTRATIONS (unaudited) ($ in 000s)	Period Ended							Change from											% of Total
		Dec 31,		Sep 30,		Dec 31,			Sep 30, 2025					Dec 31, 2024					Dec 31,		Sep 30,		Dec 31,
		2025		2025		2024			$		%			$		%			2025		2025		2024
Deposits
Interest-bearing demand	$	198,049	$	196,236	$	194,526		$	1,813		1	%	$	3,523		2	%		18	%	18	%	19	%
Money market		255,825		244,546		193,324			11,279		5	%		62,501		32	%		23	%	22	%	19	%
Savings		112,658		112,056		115,520			602		1	%		(2,862	)	-2	%		10	%	10	%	11	%
Time deposits (CDs)		150,492		139,238		135,485			11,254		8	%		15,007		11	%		13	%	12	%	13	%
Total interest-bearing deposits		717,024		692,076		638,855			24,948		4	%		78,169		12	%		64	%	62	%	62	%
Non-interest bearing demand		405,911		421,964		375,876			(16,053	)	-4	%		30,035		8	%		36	%	38	%	38	%
Total deposits	$	1,122,935	$	1,114,040	$	1,014,731		$	8,895		1	%	$	108,204		11	%		100	%	100	%	100	%
Insured Deposits	$	628,621	$	627,746	$	629,600		$	875		0	%	$	(979	)	0	%		56	%	56	%	62	%
Collateralized Deposits		174,023		175,802		131,327			(1,779	)	-1	%		42,696		33	%		15	%	16	%	13	%
Uninsured Deposits		320,291		310,492		253,804			9,799		3	%		66,487		26	%		29	%	28	%	25	%
Total Deposits	$	1,122,935	$	1,114,040	$	1,014,731		$	8,895		1	%	$	108,204		11	%		100	%	100	%	100	%
Consumer Deposits	$	518,554	$	487,753	$	466,826		$	30,801		6	%	$	51,728		11	%		47	%	44	%	46	%
Business Deposits		419,780		439,480		406,308			(19,700	)	-4	%		13,472		3	%		37	%	39	%	40	%
Public Deposits		184,601		186,807		141,597			(2,206	)	-1	%		43,004		30	%		16	%	17	%	14	%
Total Deposits	$	1,122,935	$	1,114,040	$	1,014,731		$	8,895		1	%	$	108,204		11	%		100	%	100	%	100	%

NET INTEREST MARGIN (unaudited) ($ in 000s)	Quarter Ended										Change From											Twelve Months Ended						Change
		Dec 31,			Sep 30,			Dec 31,				Sep 30, 2025					Dec 31, 2024					Dec 31,			Dec 31,
		2025			2025			2024				$		%			$		%			2025			2024				$		%
Average Interest Bearing Balances
Portfolio loans	$	770,436		$	758,282		$	703,811			$	12,154		2	%	$	66,625		9	%	$	738,560		$	697,527			$	41,033		6	%
Loans held for sale	$	-		$	-		$	1,033			$	-		0	%	$	(1,033	)	-100	%	$	-		$	1,125			$	(1,125	)	-100	%
Investment securities	$	318,025		$	306,286		$	302,501			$	11,739		4	%	$	15,524		5	%	$	309,566		$	291,133			$	18,433		6	%
Interest earning cash	$	102,834		$	85,895		$	78,296			$	16,939		20	%	$	24,538		31	%	$	99,918		$	72,893			$	27,025		37	%
Total interest-earning assets	$	1,191,295		$	1,150,463		$	1,085,641			$	40,832		4	%	$	105,654		10	%	$	1,148,044		$	1,062,678			$	85,366		8	%
Non-interest bearing deposits	$	420,140		$	418,092		$	388,227			$	2,048		0	%	$	31,913		8	%	$	401,698		$	388,561			$	13,137		3	%
Interest-bearing deposits	$	695,293		$	662,796		$	628,475			$	32,497		5	%	$	66,818		11	%	$	677,732		$	607,678			$	70,054		12	%
Total Deposits	$	1,115,433		$	1,080,888		$	1,016,702			$	34,545		3	%	$	98,731		10	%	$	1,079,430		$	996,239			$	83,191		8	%
Borrowings	$	13,457		$	13,403		$	13,403			$	54		0	%	$	54		0	%	$	13,417		$	13,403			$	14		0	%
Total interest-bearing liabilities	$	708,750		$	676,199		$	641,878			$	32,551		5	%	$	66,872		10	%	$	691,149		$	621,081			$	70,068		11	%
Yield / Cost $(1)
Portfolio loans	$	11,577		$	11,485		$	10,336			$	92		1	%	$	1,241		12	%	$	44,231		$	41,169			$	3,062		7	%
Loans held for sale	$	-		$	-		$	16			$	-		0	%	$	(16	)	-100	%	$	-		$	71			$	(71	)	-100	%
Investment securities	$	2,805		$	2,787		$	2,622			$	18		1	%	$	183		7	%	$	11,057		$	10,107			$	950		9	%
Interest-bearing cash	$	1,029		$	957		$	942			$	72		8	%	$	87		9	%	$	4,318		$	3,833			$	485		13	%
Total interest-earning assets	$	15,411		$	15,229		$	13,916			$	182		1	%	$	1,495		11	%	$	59,606		$	55,180			$	4,426		8	%
Interest-bearing deposits	$	2,865		$	2,695		$	2,796			$	170		6	%	$	69		2	%	$	10,825		$	9,829			$	996		10	%
Borrowings	$	198		$	208		$	225			$	(10	)	-5	%	$	(27	)	-12	%	$	818		$	951			$	(133	)	-14	%
Total interest-bearing liabilities	$	3,063		$	2,903		$	3,021			$	160		6	%	$	42		1	%	$	11,643		$	10,780			$	863		8	%
Net interest income	$	12,348		$	12,326		$	10,895			$	22		0	%	$	1,453		13	%	$	47,963		$	44,400			$	3,563		8	%
Yield / Cost %(1)
Yield on portfolio loans		5.96	%		6.01	%		5.84	%			-0.05	%				0.12	%				5.99	%		5.90	%			0.09	%
Yield on investment securities		3.50	%		3.61	%		3.45	%			-0.11	%				0.05	%				3.57	%		3.47	%			0.10	%
Yield on interest-bearing cash		3.97	%		4.42	%		4.79	%			-0.45	%				-0.82	%				4.32	%		5.26	%			-0.94	%
Cost of interest-bearing deposits		1.63	%		1.61	%		1.77	%			0.02	%				-0.14	%				1.60	%		1.62	%			-0.02	%
Cost of borrowings		5.84	%		6.16	%		6.68	%			-0.32	%				-0.84	%				6.10	%		7.10	%			-1.00	%
Cost of deposits and borrowings		1.08	%		1.05	%		1.17	%			0.03	%				-0.09	%				1.07	%		1.07	%			0.00	%
Yield on interest-earning assets		5.13	%		5.25	%		5.10	%			-0.12	%				0.03	%				5.19	%		5.19	%			0.00	%
Cost of interest-bearing liabilities		1.71	%		1.70	%		1.87	%			0.01	%				-0.16	%				1.68	%		1.74	%			-0.06	%
Net interest spread		3.42	%		3.55	%		3.23	%			-0.13	%				0.19	%				3.51	%		3.45	%			0.06	%
Net interest margin		4.11	%		4.25	%		3.99	%			-0.14	%				0.12	%				4.18	%		4.18	%			0.00	%
(1) Tax-exempt income has been adjusted to a tax equivalent basis at a rate of 21%.

ALLOWANCE FOR CREDIT LOSSES (ACL) (unaudited) ($ in 000s)	Quarter Ended										Change From											Twelve Months Ended						Change
		Dec 31,			Sep 30,			Dec 31,				Sep 30, 2025					Dec 31, 2024					Dec 31,			Dec 31,
		2025			2025			2024				$		%			$		%			2025			2024				$		%
ACL-Loans
Beginning of period balance	$	9,057		$	9,222		$	8,897			$	(165	)	-2	%	$	160		2	%	$	8,851		$	8,530			$	321		4	%
Charge-offs		(50	)		(59	)		(32	)			9		-15	%		(18	)	56	%		(261	)		(129	)			(132	)	102	%
Recoveries		182			5			105				177		3540	%		77		73	%		188			124				64		52	%
Net (charge-off) recovery		132			(54	)		73				186		-344	%		59		81	%		(73	)		(5	)			(68	)	1360	%
Provision (recapture)		103			(111	)		(119	)			214		-193	%		222		-187	%		514			326				188		58	%
End of period balance	$	9,292		$	9,057		$	8,851			$	235		3	%	$	441		5	%	$	9,292		$	8,851			$	441		5	%
Net charge-off (recovery) to
average portfolio loans		-0.07	%		0.03	%		-0.04	%			-0.10	%				-0.03	%				0.01	%		0.00	%			0.01	%
ACL-loans to portfolio loans		1.20	%		1.17	%		1.26	%			0.03	%				-0.06	%				1.20	%		1.26	%			-0.06	%
ACL-Unfunded Loans Commitments
Beginning of period balance	$	551		$	489		$	524			$	62		13	%	$	27		5	%	$	540		$	698			$	(158	)	-23	%
Provision (recapture)		17			62			16				(45	)	-73	%		1		6	%		28			(158	)			186		-118	%
End of period balance	$	568		$	551		$	540			$	17		3	%	$	28		5	%	$	568		$	540			$	28		5	%

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 December 31, 2025, the Company had total assets of $1.28 billion and operated fifteen branches in the communities of Grays Harbor, Pacific, Thurston, Whatcom, Skagit, Clark and Wahkiakum counties in the State of Washington, and three branches in the communities of Clatsop and Clackamas counties in Oregon. The Company also operated loan production offices in the communities of Burlington, Washington and Salem, Oregon. Visit the Company’s website at www.bankofthepacific.com. Member FDIC.

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. Such statements are based on information available at the time of communication and are based on current beliefs and expectations of the Company’s management and are subject to risks and uncertainties, many of which are beyond our control, which 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, changes in interest rates, extensive and evolving regulation of the banking industry, and many other risks. Any forward-looking statements in this communication are based on information at the time the statement is made. 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.

CONTACTS:
DENISE PORTMANN, PRESIDENT & CEO
CARLA TUCKER, EVP & CFO
360.533.8873

FAQ

What did Pacific Financial (PFLC) report for Q4 2025 earnings and EPS?

Pacific Financial reported Q4 2025 net income of $3.1 million, or $0.31 per diluted share. According to the company, this compares to $3.5 million ($0.35) in Q3 2025 and $2.2 million ($0.21) in Q4 2024.

How did Pacific Financial's loan and deposit growth perform in 2025 (PFLC)?

Pacific Financial grew gross loans about 10% year-over-year to $775.9M. According to the company, total deposits rose 11% YoY to $1.12B, driven by money-market and non-interest-bearing accounts.

What dividend did PFLC declare and when is the payment date?

The Board declared a quarterly cash dividend of $0.15 per share, payable Feb 28, 2026. According to the company, shareholders of record on Feb 13, 2026 will receive the dividend.

Are Pacific Financial's capital ratios and regulatory status safe for shareholders (PFLC)?

Pacific Financial remains above well-capitalized regulatory thresholds with an estimated leverage ratio of 10.8%. According to the company, its estimated total risk-based capital ratio was 17.3% at Dec 31, 2025.

What drove PFLC's year-over-year profitability improvement in 2025?

Year-over-year net income rose to $11.6M in 2025 largely from higher net interest income and loan growth. According to the company, growth in interest-earning assets and expanded customer relationships supported the improvement.