Exhibit 99.1
NEWS RELEASE
| FOR MORE INFORMATION CONTACT: | Michael Dunne | |
| Public Information Officer | ||
| 541-338-1428 | ||
| www.therightbank.com | ||
| Email: michael.dunne@therightbank.com | ||
FOR IMMEDIATE RELEASE
Pacific Continental Corporation Reports Fourth Quarter and Annual 2015 Results
Earnings driven by strong growth, expense control, successful acquisition, and solid credit quality.
EUGENE, Ore., January 20, 2016 – Pacific Continental Corporation (Nasdaq: PCBK), the holding company of Pacific Continental Bank, today reported financial results for the fourth quarter and year ended December 31, 2015.
Fourth Quarter highlights:
| • | Achieved record net income of $5.5 million, or $0.28 per diluted share. |
| • | Achieved a return on average assets of 1.16%. |
| • | Improved tax-equivalent net interest margin to 4.36%. |
| • | Efficiency ratio of 55.50%. |
| • | Declared first quarter 2016 regular quarterly cash dividend of $0.11 per share. |
| • | Recognized for the 16th consecutive year byOregon Business magazine and for the 5th consecutive year bySeattle Business magazine as one of the Top 100 Companies to Work For. |
| • | Recognized bySeattle Business magazine as the Business of the Year. |
Full Year 2015 Highlights:
| • | Asset growth of $405 million, or 26.93%. |
| • | Achieved annual net income of $18.8 million, or $0.97 per diluted share. |
| • | Achieved a return on assets of 1.05%. |
| • | Achieved a tax-equivalent net interest margin of 4.34%. |
| • | Achieved organic loan growth of $156.6 million. |
Net Income
Net income for fourth quarter 2015 was $5.5 million or $0.28 per diluted share compared to net income of $3.6 million or $0.20 per diluted share in fourth quarter 2014. Annualized returns on average assets, average equity and average tangible equity for fourth quarter 2015 were 1.16%, 10.10%, and 12.60%, respectively, compared to 0.97%, 7.85%, and 9.01% for fourth quarter 2014. In addition, the Company’s efficiency ratio improved to 55.50% for fourth quarter 2015 compared to 61.39% for the same quarter in 2014.
Net income for the full-year 2015 was $18.8 million, or $0.97 per diluted share, compared to net income of $16.0 million, or $0.89 per diluted share for the full year 2014. Return on average assets, average equity and average tangible equity for the full year 2015 were 1.05%, 8.99%, and 11.14%, respectively, compared to 1.09%, 8.83%, and 10.14% for the full year 2014. The Company’s efficiency ratio improved to 59.22% for full year 2015 compared to 59.41% for the full year 2014. Included in our 2015 expenses was $1.8 million in costs associated with the acquisition of Capital Pacific Bank, compared to $470 thousand in 2014.
“We are very proud of our outstanding results accomplished by our talented and dedicated team of community bankers and support teams for both the fourth quarter and full-year of 2015,” said Roger Busse, chief executive officer. “We continued to execute on our commitment to quality growth, as is reflected in reporting our third consecutive quarter of record earnings.”
Loans
Gross loans grew by $49 million in fourth quarter 2015, and totaled $1.41 billion at December 31, 2015. Organic loan growth during the fourth quarter 2015 was primarily attributable to increased commercial and industrial lending, funding of construction
loans, and local real estate lending. Loan growth during the quarter occurred in all three of the Company’s primary markets. Loans to dental professionals were flat from the previous quarter. At December 31, 2015, loans to dental practitioners totaled $340.2 million and represented 24.19% of the loan portfolio. The average tax-equivalent yield on the loan portfolio was 5.22% for the fourth quarter and 5.29% for the full-year 2015.
“Our loan growth was outstanding in 2015 and the fourth quarter was no exception with almost $50 million in organic loan growth,” said Casey Hogan, chief operating officer. “Our organic loan growth for the full year 2015 was approximately $157 million, which is on top of the $203 million in loans from the Capital Pacific acquisition. We further expanded existing relationships while growing in our markets with new clients and opportunities, and continue to be pleased with our strong pipelines as we head into the new year.”
Core Deposits
Period-end Company-defined core deposits at December 31, 2015, were $1.53 billion. Outstanding core deposits were up $68.4 million during the fourth quarter 2015. At December 31, 2015, noninterest-bearing demand deposits totaled $568.7 million and represented 37.07% of core deposits. Cost of funds on core deposits was 0.26% for both the fourth quarter and full-year 2015.
Credit Quality and Statistics
During the fourth quarter, the Company made a $520 thousand provision for loan losses and compared to $625 in the third quarter 2015. Fourth quarter 2015 provision for loan losses was primarily related to the loan growth experienced during the quarter, as credit quality statistics remained strong. As of December 31, 2015, the allowance for loan losses as a percentage of outstanding loans was 1.23%, approximately the same as it was as of September 30, 2015. With the acquisition of the Capital Pacific loan portfolio, the allowance for loan losses as a percentage of outstanding loans at December 31, 2015, declined to 1.23%, compared to 1.50% at December 31, 2014. This was a result of recording the Capital Pacific Bank acquired loans at their fair value, which included all credit risk adjustments. At December 31, 2015, the allowance for loan losses as a percentage of nonperforming loans, net of government guarantees, remained strong at 636.30%. During the fourth quarter 2015, the Company recorded net loan recoveries of $169 thousand. For the full-year 2015, the Company recorded $31 thousand in net loan charge-offs.
At December 31, 2015, nonperforming assets, net of government guarantees, totaled $14.5 million, or 0.76% of total assets, compared to $14.1 million, or 0.75% of total assets, and $15.4 million, or 1.02% of total assets, at September 30, 2015 and December 31, 2014, respectively. Nonperforming assets at December 31, 2015, were comprised of $2.7 million of nonperforming loans, net of government guarantees, and $11.7 million in other real estate owned. Loans past-due 30-89 days were 0.03% of total loans at December 31, 2015, compared to 0.14% of total loans at September 30, 2015 and 0.15% of total loans at December 31, 2014.
Net Interest Margin
The fourth quarter 2015 net interest margin averaged 4.36%, an increase of four basis points over third quarter 2015 net interest margin, and an 11 basis point improvement over fourth quarter 2014 net interest margin. The increase in the linked-quarter net interest margin was primarily due to accretion of acquired loan fair value marks. The net accretion added 15 basis points to the fourth quarter 2015 margin, compared to 13 basis points for third quarter 2015. During fourth quarter 2015, the net accretion of loan fair value marks was $671 thousand, compared to $616 thousand for third quarter 2015. Accretion of fair value marks related to both the Capital Pacific acquisition completed in March 2015 and the Century Bank acquisition completed in February 2013.
Noninterest Income and Expense
Fourth quarter 2015 noninterest income was $2.0 million, up $294 thousand from third quarter 2015, and up $690 thousand from fourth quarter 2014. The increase in linked-quarter noninterest income was primarily due to gains on sales of securities. During the fourth quarter 2015, the bank sold approximately $16.5 million of securities, realizing a gain on sale of $337 thousand. The proceeds will be reinvested with a minimal impact to the duration and yield of the portfolio. The year-over-year increase in noninterest income was due to increases in account and other service charges resulting from a combination of the Capital Pacific acquisition and organic growth and an increase in gain on sale of investment securities.
“We will continue to look for opportunities for gains when appropriate, however our strategy is to ensure that any proceeds can be reinvested to achieve a minimal change in our portfolio yield, while remaining within our duration policy guidelines,” said Rick Sawyer, chief financial officer.
Noninterest expense in fourth quarter 2015 was $11.7 million, an increase of $524 thousand from third quarter 2015. The increase relates primarily to the salaries and benefits category, which increased by $456 thousand due primarily to new staff, an adjustment to the valuation of our liability based equity awards due to an increase in our stock price, and additional bonus expense required to bring the year-end accrual up to date.
Capital Levels
The Company’s consolidated capital ratios continued to be above the minimum thresholds for the FDIC’s “well-capitalized” designation. At December 31, 2015, the Company’s Tier 1 leverage ratio, Common Equity Tier 1 risk-based capital ratio, Tier 1 risk-based capital ratio, and Total risk-based capital ratios were 9.93%, 10.97%, 11.47%, and 12.58%, respectively. These ratios reflect the effectiveness of the U.S. Basel III regulatory capital rules. The FDIC’s minimum thresholds for a “well-capitalized” designation for these metrics were 5.00%, 6.50%, 8.00% and 10.00%, respectively.
Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles (GAAP), this press release contains certain non-GAAP financial measures. The Company believes that such non-GAAP financial measures provide investors with information useful in understanding the Company’s financial performance; however, readers of this release are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported.
Financial measures such as tangible shareholders’ equity, and tangible assets, are considered non-GAAP measures. Management believes including non-GAAP measures along with GAAP measures provides investors with a broader understanding of capital adequacy, funding sources and revenue trends. Tangible shareholders’ equity is calculated as total shareholders’ equity less goodwill and core deposit intangible assets. Additionally, tangible assets are calculated as total assets less goodwill and core deposit intangible assets.
The following table presents a reconciliation of ending total shareholders’ equity (GAAP) to ending tangible shareholders’ equity (non-GAAP), and total assets (GAAP) to total tangible assets (non-GAAP)
| December 31, 2015 | September 30, 2015 | December 31, 2014 | ||||||||||
| (In thousands) | ||||||||||||
Total shareholders’ equity | $ | 218,491 | $ | 216,676 | $ | 184,161 | ||||||
Subtract: | ||||||||||||
Goodwill | 39,255 | 39,074 | 22,881 | |||||||||
Core deposit intangible assets | 3,904 | 4,028 | 614 | |||||||||
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Tangible shareholders’ equity (non-GAAP) | $ | 175,332 | $ | 173,574 | $ | 160,666 | ||||||
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Total assets | $ | 1,909,478 | $ | 1,878,283 | $ | 1,504,325 | ||||||
Subtract: | ||||||||||||
Goodwill | 39,255 | 39,074 | 22,881 | |||||||||
Core deposit intangible assets | 3,904 | 4,028 | 614 | |||||||||
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Total tangible assets (non-GAAP) | $ | 1,866,319 | $ | 1,835,181 | $ | 1,480,830 | ||||||
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Conference Call and Audio Webcast
Management will conduct a live conference call and audio webcast for interested parties relating to the Company’s results for the fourth quarter 2015 on Thursday, January 21, 2016, at 11:00 a.m. Pacific / 2:00 p.m. Eastern. To listen to the conference call, interested parties should call: (855) 215-7498 Passcode: 1554389. Following the formal remarks, a question and answer session will be open to all interested parties. The webcast will be available via Pacific Continental’s websitewww.therightbank.com. To listen to the live audio webcast, click on the webcast presentation link on the Company’s home page a few minutes before the presentation is scheduled to begin. An audio webcast replay is typically available within twenty-four hours following the live webcast and will be archived for one year on the Pacific Continental website. Any questions regarding the conference call presentation or webcast should be directed to Shannon Coffin, executive administrative assistant, at 541-686-8685.
About Pacific Continental Bank
Pacific Continental Bank, the operating subsidiary of Pacific Continental Corporation, delivers highly personalized services through fifteen banking offices in Oregon and Washington. The Bank also operates loan production offices in Tacoma, Washington, Denver, Colorado and San Francisco, California. Pacific Continental, with approximately $1.9 billion in assets, has established one of the most unique and attractive metropolitan branch networks in the Pacific Northwest with offices in three of the region’s largest markets, including Seattle, Portland and Eugene. Pacific Continental targets the banking needs of community-based businesses, health care professionals, professional service providers and nonprofit organizations.
Since its founding in 1972, Pacific Continental Bank has been honored with numerous awards and recognitions from highly regarded third-party organizations includingThe Seattle Times, thePortland Business Journal, theSeattle Business magazine andOregon Business magazine. A complete list of the company’s awards and recognitions – as well as supplementary information about Pacific Continental Bank – can be found online atwww.therightbank.com. Pacific Continental Corporation’s shares are listed on the Nasdaq Global Select Market under the symbol “PCBK” and are a component of the Russell 2000 Index.
Forward-Looking Statement Safe Harbor
This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”). These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “anticipates,” “targets,” “expects,” “estimates,” “intends,” “plans,” “goals,” “believes” and other similar expressions or future or conditional verbs such as “will,” “should,” “would” and “could.” The forward-looking statements made represent Pacific Continental’s current estimates, projections, expectations, plans or forecasts of its future results and revenues, including but not limited to statements about performance, loan or deposit growth, capital position, liquidity, credit quality, credit quality trends, competition, securities portfolio and economic conditions generally and the impact and effects of recent acquisitions. These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumptions that are difficult to predict and are often beyond Pacific Continental’s control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements. You should not place undue reliance on any forward-looking statement and should consider all of the following uncertainties and risks, as well as those more fully discussed under “Risk Factors”, “Business”, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Pacific Continental’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, and in any of Pacific Continental’s subsequent SEC filings, including the high concentration of loans of the Company’s banking subsidiary in commercial and residential real estate lending and in loans to dental professionals; adverse economic trends in the United States and the markets we serve affecting the Bank’s borrower base; continued erosion or sustained low levels of consumer confidence; changes in the Federal Reserve’s monetary policies and the regulatory environment and increases in associated costs, particularly ongoing compliance expenses and resource allocation needs; vendor quality and efficiency; the Company’s ability to control risks associated with rapidly changing technology both from an internal perspective as well as for external providers; operational systems or infrastructure failures; increased competition; fluctuating interest rates; a tightening of available credit; the potential adverse impact of legal or regulatory proceedings; and risks related to acquisitions, including integration, retention of key personnel and business, anticipated cost savings and results and performance of the acquired company or the combined entity. Pacific Continental Corporation undertakes no obligation to publicly revise or update any forward-looking statement to reflect the impact of events or circumstances that arise after the date of this release. This statement is included for the express purpose of invoking the PSLRA’s safe harbor provisions.
PACIFIC CONTINENTAL CORPORATION
Consolidated Income Statements
(In thousands, except share and per share amounts)
(Unaudited)
| Three months ended | Linked | Year over | ||||||||||||||||||
| December 31, | September 30, | December 31, | Quarter | Year | ||||||||||||||||
| 2015 | 2015 | 2014 | % Change | % Change | ||||||||||||||||
Interest and dividend income | ||||||||||||||||||||
Loans | $ | 17,674 | $ | 17,240 | $ | 13,464 | 2.52 | % | 31.27 | % | ||||||||||
Taxable securities | 1,707 | 1,713 | 1,499 | -0.35 | % | 13.88 | % | |||||||||||||
Tax-exempt securities | 485 | 490 | 500 | -1.02 | % | -3.00 | % | |||||||||||||
Federal funds sold & interest-bearing deposits with banks | 11 | 7 | 3 | 57.14 | % | 266.67 | % | |||||||||||||
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| 19,877 | 19,450 | 15,466 | 2.20 | % | 28.52 | % | ||||||||||||||
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Interest expense | ||||||||||||||||||||
Deposits | 805 | 854 | 782 | -5.74 | % | 2.94 | % | |||||||||||||
Federal Home Loan Bank & Federal Reserve borrowings | 191 | 227 | 251 | -15.86 | % | -23.90 | % | |||||||||||||
Junior subordinated debentures | 57 | 57 | 57 | 0.00 | % | 0.00 | % | |||||||||||||
Federal funds purchased | 2 | 4 | 2 | -50.00 | % | 0.00 | % | |||||||||||||
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| 1,055 | 1,142 | 1,092 | -7.62 | % | -3.39 | % | ||||||||||||||
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Net interest income | 18,822 | 18,308 | 14,374 | 2.81 | % | 30.94 | % | |||||||||||||
Provision for loan losses | 520 | 625 | — | -16.80 | % | NA | ||||||||||||||
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Net interest income after provision for loan losses | 18,302 | 17,683 | 14,374 | 3.50 | % | 27.33 | % | |||||||||||||
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Noninterest income | ||||||||||||||||||||
Service charges on deposit accounts | 705 | 703 | 552 | 0.28 | % | 27.72 | % | |||||||||||||
Bankcard income | 342 | 276 | 294 | 23.91 | % | 16.33 | % | |||||||||||||
Bank-owned life insurance income | 156 | 156 | 120 | 0.00 | % | 30.00 | % | |||||||||||||
Gain on sale of investment securities | 337 | 143 | — | 135.66 | % | NA | ||||||||||||||
Impairment losses on investment securities (OTTI) | (8 | ) | — | — | NA | NA | ||||||||||||||
Other noninterest income | 476 | 436 | 352 | 9.17 | % | 35.23 | % | |||||||||||||
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| 2,008 | 1,714 | 1,318 | 17.15 | % | 52.35 | % | ||||||||||||||
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Noninterest expense | ||||||||||||||||||||
Salaries and employee benefits | 7,278 | 6,822 | 5,704 | 6.68 | % | 27.59 | % | |||||||||||||
Premises and equipment | 1,126 | 1,148 | 910 | -1.92 | % | 23.74 | % | |||||||||||||
Data processing | 916 | 838 | 701 | 9.31 | % | 30.67 | % | |||||||||||||
Legal and professional fees | 538 | 496 | 364 | 8.47 | % | 47.80 | % | |||||||||||||
Business development | 507 | 369 | 472 | 37.40 | % | 7.42 | % | |||||||||||||
FDIC insurance assessment | 282 | 283 | 221 | -0.35 | % | 27.60 | % | |||||||||||||
Other real estate expense | 42 | 122 | 111 | -65.57 | % | -62.16 | % | |||||||||||||
Merger related expenses (1) | — | — | 470 | NA | -100.00 | % | ||||||||||||||
Other noninterest expense | 1,017 | 1,104 | 845 | -7.88 | % | 20.36 | % | |||||||||||||
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| 11,706 | 11,182 | 9,798 | 4.69 | % | 19.47 | % | ||||||||||||||
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Income before provision for income taxes | 8,604 | 8,215 | 5,894 | 4.74 | % | 45.98 | % | |||||||||||||
Provision for income taxes | 3,076 | 2,890 | 2,263 | 6.44 | % | 35.93 | % | |||||||||||||
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Net income | $ | 5,528 | $ | 5,325 | $ | 3,631 | 3.81 | % | 52.24 | % | ||||||||||
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Earnings per share: | ||||||||||||||||||||
Basic | $ | 0.28 | $ | 0.27 | $ | 0.20 | 3.70 | % | 40.00 | % | ||||||||||
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Diluted | $ | 0.28 | $ | 0.27 | $ | 0.20 | 3.70 | % | 40.00 | % | ||||||||||
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Weighted average shares outstanding: | ||||||||||||||||||||
Basic | 19,598,484 | 19,591,666 | 17,717,151 | |||||||||||||||||
Common stock equivalents attributable to stock-based awards | 167,614 | 225,104 | 222,482 | |||||||||||||||||
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Diluted | 19,766,098 | 19,816,770 | 17,939,633 | |||||||||||||||||
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PERFORMANCE RATIOS | ||||||||||||||||||||
Return on average assets | 1.16 | % | 1.14 | % | 0.97 | % | ||||||||||||||
Return on average equity (book) | 10.10 | % | 9.91 | % | 7.85 | % | ||||||||||||||
Return on average equity (tangible)(2) | 12.60 | % | 12.42 | % | 9.01 | % | ||||||||||||||
Net interest margin - fully tax-equivalent yield(3) | 4.36 | % | 4.32 | % | 4.25 | % | ||||||||||||||
Efficiency ratio(4) | 55.50 | % | 55.12 | % | 61.39 | % | ||||||||||||||
| (1) | Represents expenses associated with the acquisition of Capital Pacific Bank, completed during the first quarter 2015. |
| (2) | Tangible equity excludes goodwill and core deposit intangible assets related to acquisitions. |
| (3) | Net interest margin is reported on a tax-equivalent yield basis at a 35% tax rate. |
| (4) | Efficiency ratio is noninterest expense as a percent of net interest income (on a tax-equivalent basis) plus noninterest income. |
| NA | Not applicable |
PACIFIC CONTINENTAL CORPORATION
Year-to-Date Consolidated Income Statements
(In thousands, except share and per share amounts)
(Unaudited)
| Twelve months ended | Year over | |||||||||||
| December 31, | December 31, | Year | ||||||||||
| 2015 | 2014 | % Change | ||||||||||
Interest and dividend income | ||||||||||||
Loans | $ | 65,694 | $ | 53,855 | 21.98 | % | ||||||
Taxable securities | 6,532 | 6,191 | 5.51 | % | ||||||||
Tax-exempt securities | 1,976 | 1,971 | 0.25 | % | ||||||||
Federal funds sold & interest-bearing deposits with banks | 34 | 10 | 240.00 | % | ||||||||
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| 74,236 | 62,027 | 19.68 | % | |||||||||
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Interest expense | ||||||||||||
Deposits | 3,314 | 3,252 | 1.91 | % | ||||||||
Federal Home Loan Bank & Federal Reserve borrowings | 885 | 1,088 | -18.66 | % | ||||||||
Junior subordinated debentures | 226 | 225 | 0.44 | % | ||||||||
Federal funds purchased | 11 | 14 | -21.43 | % | ||||||||
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| 4,436 | 4,579 | -3.12 | % | |||||||||
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Net interest income | 69,800 | 57,448 | 21.50 | % | ||||||||
Provision for loan losses | 1,695 | — | NA | |||||||||
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Net interest income after provision for loan losses | 68,105 | 57,448 | 18.55 | % | ||||||||
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Noninterest income | ||||||||||||
Service charges on deposit accounts | 2,644 | 2,134 | 23.90 | % | ||||||||
Bankcard income | 1,029 | 951 | 8.20 | % | ||||||||
Bank-owned life insurance income | 592 | 473 | 25.16 | % | ||||||||
Gain (loss) on sale of investment securities | 672 | (34 | ) | 2076.47 | % | |||||||
Impairment losses on investment securities (OTTI) | (22 | ) | — | NA | ||||||||
Other noninterest income | 1,710 | 1,471 | 16.25 | % | ||||||||
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| 6,625 | 4,995 | 32.63 | % | |||||||||
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Noninterest expense | ||||||||||||
Salaries and employee benefits | 27,501 | 23,555 | 16.75 | % | ||||||||
Premises and equipment | 4,347 | 3,735 | 16.39 | % | ||||||||
Data processing | 3,259 | 2,720 | 19.82 | % | ||||||||
Legal and professional fees | 1,924 | 1,252 | 53.67 | % | ||||||||
Business development | 1,640 | 1,531 | 7.12 | % | ||||||||
FDIC insurance assessment | 1,051 | 868 | 21.08 | % | ||||||||
Other real estate expense | 346 | 449 | -22.94 | % | ||||||||
Merger related expense (1) | 1,836 | 470 | 290.64 | % | ||||||||
Other noninterest expense | 3,986 | 3,149 | 26.58 | % | ||||||||
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| 45,890 | 37,729 | 21.63 | % | |||||||||
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Income before provision for income taxes | 28,840 | 24,714 | 16.69 | % | ||||||||
Provision for income taxes | 10,089 | 8,672 | 16.34 | % | ||||||||
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Net income | $ | 18,751 | $ | 16,042 | 16.89 | % | ||||||
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Earnings per share: | ||||||||||||
Basic | $ | 0.97 | $ | 0.90 | 7.78 | % | ||||||
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Diluted | $ | 0.97 | $ | 0.89 | 8.99 | % | ||||||
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Weighted average shares outstanding: | ||||||||||||
Basic | 19,250,838 | 17,821,580 | ||||||||||
Common stock equivalents attributable to stock-based awards | 141,487 | 223,448 | ||||||||||
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Diluted | 19,392,325 | 18,045,028 | ||||||||||
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PERFORMANCE RATIOS | ||||||||||||
Return on average assets | 1.05 | % | 1.09 | % | ||||||||
Return on average equity (book) | 8.99 | % | 8.83 | % | ||||||||
Return on average equity (tangible)(2) | 11.14 | % | 10.14 | % | ||||||||
Net interest margin - fully tax-equivalent yield(3) | 4.34 | % | 4.30 | % | ||||||||
Efficiency ratio (4) | 59.22 | % | 59.41 | % | ||||||||
| (1) | Represents expenses associated with the acquisition of Capital Pacific Bank, completed during the first quarter 2015. |
| (2) | Tangible equity excludes goodwill and core deposit intangible assets related to acquisitions. |
| (3) | Net interest margin is reported on a tax-equivalent yield basis at a 35% tax rate. |
| (4) | Efficiency ratio is noninterest expense as a percent of net interest income (on a tax-equivalent basis) plus noninterest income. |
| NA | Not applicable |
PACIFIC CONTINENTAL CORPORATION
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
| Linked | Year over | |||||||||||||||||||
| December 31, | September 30, | December 31, | Quarter | Year | ||||||||||||||||
| 2015 | 2015 | 2014 | % Change | % Change | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and due from banks | $ | 23,819 | $ | 21,698 | $ | 20,929 | 9.78 | % | 13.81 | % | ||||||||||
Interest-bearing deposits with banks | 12,856 | 11,293 | 4,858 | 13.84 | % | 164.64 | % | |||||||||||||
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Total cash and cash equivalents | 36,675 | 32,991 | 25,787 | 11.17 | % | 42.22 | % | |||||||||||||
Securities available-for-sale | 366,598 | 387,073 | 351,946 | -5.29 | % | 4.16 | % | |||||||||||||
Loans, net of deferred fees | 1,404,482 | 1,355,807 | 1,045,021 | 3.59 | % | 34.40 | % | |||||||||||||
Allowance for loan losses | (17,301 | ) | (16,612 | ) | (15,637 | ) | 4.15 | % | 10.64 | % | ||||||||||
Interest receivable | 5,721 | 5,688 | 4,773 | 0.58 | % | 19.86 | % | |||||||||||||
Federal Home Loan Bank stock | 5,208 | 6,768 | 10,019 | -23.05 | % | -48.02 | % | |||||||||||||
Property and equipment, net of accumulated depreciation | 18,014 | 17,708 | 17,820 | 1.73 | % | 1.09 | % | |||||||||||||
Goodwill and intangible assets | 43,159 | 43,102 | 23,495 | 0.13 | % | 83.69 | % | |||||||||||||
Deferred tax asset | 5,670 | 5,319 | 4,464 | 6.60 | % | 27.02 | % | |||||||||||||
Other real estate owned | 11,747 | 11,854 | 13,374 | -0.90 | % | -12.17 | % | |||||||||||||
Bank-owned life insurance | 22,884 | 22,727 | 16,609 | 0.69 | % | 37.78 | % | |||||||||||||
Other assets | 6,621 | 5,858 | 6,654 | 13.02 | % | -0.50 | % | |||||||||||||
|
|
|
|
|
| |||||||||||||||
Total assets | $ | 1,909,478 | $ | 1,878,283 | $ | 1,504,325 | 1.66 | % | 26.93 | % | ||||||||||
|
|
|
|
|
| |||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
Deposits | ||||||||||||||||||||
Noninterest-bearing demand | $ | 568,688 | $ | 544,009 | $ | 407,311 | 4.54 | % | 39.62 | % | ||||||||||
Savings and interest-bearing checking | 889,802 | 831,933 | 646,101 | 6.96 | % | 37.72 | % | |||||||||||||
Core time deposits | 75,452 | 89,605 | 57,449 | -15.79 | % | 31.34 | % | |||||||||||||
|
|
|
|
|
| |||||||||||||||
Total core deposits(2) | 1,533,942 | 1,465,547 | 1,110,861 | 4.67 | % | 38.09 | % | |||||||||||||
Non-core time deposits | 63,151 | 59,407 | 98,232 | 6.30 | % | -35.71 | % | |||||||||||||
|
|
|
|
|
| |||||||||||||||
Total deposits | 1,597,093 | 1,524,954 | 1,209,093 | 4.73 | % | 32.09 | % | |||||||||||||
Securities sold under agreements to repurchase | 71 | 302 | 93 | -76.49 | % | -23.66 | % | |||||||||||||
Federal funds and overnight funds purchased | — | 5,000 | — | -100.00 | % | NA | ||||||||||||||
Federal Home Loan Bank borrowings | 77,500 | 116,500 | 96,000 | -33.48 | % | -19.27 | % | |||||||||||||
Junior subordinated debentures | 8,248 | 8,248 | 8,248 | 0.00 | % | 0.00 | % | |||||||||||||
Accrued interest and other payables | 8,075 | 6,603 | 6,730 | 22.29 | % | 19.99 | % | |||||||||||||
|
|
|
|
|
| |||||||||||||||
Total liabilities | 1,690,987 | 1,661,607 | 1,320,164 | 1.77 | % | 28.09 | % | |||||||||||||
|
|
|
|
|
| |||||||||||||||
Shareholders’ equity | ||||||||||||||||||||
Common stock: 50,000,000 shares authorized. Shares issued and outstanding: 19,604,192 at December 31, 2015, 19,591,703 at September 30, 2015 and 17,716,776 at December 31, 2014 | 156,099 | 155,695 | 131,375 | 0.26 | % | 18.82 | % | |||||||||||||
Retained earnings | 59,693 | 56,320 | 48,984 | 5.99 | % | 21.86 | % | |||||||||||||
Accumulated other comprehensive income | 2,699 | 4,661 | 3,802 | -42.09 | % | -29.01 | % | |||||||||||||
|
|
|
|
|
| |||||||||||||||
| 218,491 | 216,676 | 184,161 | 0.84 | % | 18.64 | % | ||||||||||||||
|
|
|
|
|
| |||||||||||||||
Total liabilities and shareholders’ equity | $ | 1,909,478 | $ | 1,878,283 | $ | 1,504,325 | 1.66 | % | 26.93 | % | ||||||||||
|
|
|
|
|
| |||||||||||||||
CAPITAL RATIOS | ||||||||||||||||||||
Total capital (to risk weighted assets)(3) | 12.58 | % | 12.58 | % | 15.73 | % | ||||||||||||||
Tier I capital (to risk weighted assets) (3) | 11.47 | % | 11.49 | % | 14.48 | % | ||||||||||||||
Common equity tier 1 capital (to risk weighted assets) (3) | 10.97 | % | 11.00 | % | NA | |||||||||||||||
Tier I capital (to leverage assets)(3) | 9.93 | % | 9.88 | % | 11.33 | % | ||||||||||||||
Tangible common equity (to tangible assets)(1) | 9.39 | % | 9.46 | % | 10.85 | % | ||||||||||||||
Tangible common equity (to risk-weighted assets)(1) | 10.96 | % | 11.08 | % | 14.11 | % | ||||||||||||||
OTHER FINANCIAL DATA | ||||||||||||||||||||
Shares outstanding at end of period | 19,604,192 | 19,591,703 | 17,716,776 | |||||||||||||||||
Tangible shareholders’ equity(1) | $ | 175,332 | $ | 173,574 | $ | 160,666 | ||||||||||||||
Book value per share | $ | 11.15 | $ | 11.06 | $ | 10.39 | ||||||||||||||
Tangible book value per share | $ | 8.94 | $ | 8.86 | $ | 9.07 | ||||||||||||||
| (1) | Tangible common equity excludes goodwill and core deposit intangible assets related to acquisitions. |
| (2) | Core deposits include demand, interest checking, money market, savings, and local time deposits, including local nonpublic time deposits in excess of $100 thousand. |
| (3) | In first quarter 2015, the U.S. Basel III capital framework methodology was implemented for all banks. The 2015 capital ratios have been presented based on the new methodology. Capital ratios prior to 2015 have not been restated in conformity with the new methodology. |
PACIFIC CONTINENTAL CORPORATION
Loans by Type
(In thousands)
(Unaudited)
| Linked | Year over | |||||||||||||||||||
| December 31, | September 30, | December 31, | Quarter | Year | ||||||||||||||||
| 2015 | 2015 | 2014 | % Change | % Change | ||||||||||||||||
LOANS BY TYPE | ||||||||||||||||||||
Real estate secured loans: | ||||||||||||||||||||
Permanent loans: | ||||||||||||||||||||
Multi-family residential | $ | 66,445 | $ | 64,083 | $ | 51,586 | 3.69 | % | 28.80 | % | ||||||||||
Residential 1-4 family | 53,776 | 58,313 | 47,222 | -7.78 | % | 13.88 | % | |||||||||||||
Owner-occupied commercial | 364,742 | 353,255 | 259,805 | 3.25 | % | 40.39 | % | |||||||||||||
Nonowner-occupied commercial | 300,774 | 288,539 | 201,558 | 4.24 | % | 49.22 | % | |||||||||||||
|
|
|
|
|
| |||||||||||||||
Total permanent real estate loans | 785,737 | 764,190 | 560,171 | 2.82 | % | 40.27 | % | |||||||||||||
Construction loans: | ||||||||||||||||||||
Multi-family residential | 7,027 | 9,340 | 8,472 | -24.76 | % | -17.06 | % | |||||||||||||
Residential 1-4 family | 30,856 | 30,834 | 28,109 | 0.07 | % | 9.77 | % | |||||||||||||
Commercial real estate | 42,680 | 39,259 | 18,595 | 8.71 | % | 129.52 | % | |||||||||||||
Commercial bare land and acquisition & development | 20,537 | 16,947 | 12,159 | 21.18 | % | 68.90 | % | |||||||||||||
Residential bare land and acquisition & development | 7,268 | 7,602 | 6,632 | -4.39 | % | 9.59 | % | |||||||||||||
|
|
|
|
|
| |||||||||||||||
Total construction real estate loans | 108,368 | 103,982 | 73,967 | 4.22 | % | 46.51 | % | |||||||||||||
|
|
|
|
|
| |||||||||||||||
Total real estate loans | 894,105 | 868,172 | 634,138 | 2.99 | % | 41.00 | % | |||||||||||||
Commercial loans | 501,976 | 479,018 | 406,568 | 4.79 | % | 23.47 | % | |||||||||||||
Consumer loans | 3,351 | 3,575 | 3,862 | -6.27 | % | -13.23 | % | |||||||||||||
Other loans | 6,580 | 6,280 | 1,443 | 4.78 | % | 355.99 | % | |||||||||||||
|
|
|
|
|
| |||||||||||||||
Gross loans | 1,406,012 | 1,357,045 | 1,046,011 | 3.61 | % | 34.42 | % | |||||||||||||
Deferred loan origination fees | (1,530 | ) | (1,238 | ) | (990 | ) | 23.59 | % | 54.55 | % | ||||||||||
|
|
|
|
|
| |||||||||||||||
| 1,404,482 | 1,355,807 | 1,045,021 | 3.59 | % | 34.40 | % | ||||||||||||||
Allowance for loan losses | (17,301 | ) | (16,612 | ) | (15,637 | ) | 4.15 | % | 10.64 | % | ||||||||||
|
|
|
|
|
| |||||||||||||||
| $ | 1,387,181 | $ | 1,339,195 | $ | 1,029,384 | 3.58 | % | 34.76 | % | |||||||||||
|
|
|
|
|
| |||||||||||||||
SELECTED MARKET LOAN DATA | ||||||||||||||||||||
Eugene market gross loans, period-end | $ | 379,048 | $ | 368,666 | $ | 363,953 | 2.82 | % | 4.15 | % | ||||||||||
Portland market gross loans, period-end | 667,995 | 647,527 | 407,466 | 3.16 | % | 63.94 | % | |||||||||||||
Seattle market gross loans, period-end | 142,104 | 137,830 | 119,095 | 3.10 | % | 19.32 | % | |||||||||||||
National health care gross loans, period-end(1) | 216,865 | 203,022 | 155,497 | 6.82 | % | 39.47 | % | |||||||||||||
|
|
|
|
|
| |||||||||||||||
Total gross loans, period-end | $ | 1,406,012 | $ | 1,357,045 | $ | 1,046,011 | 3.61 | % | 34.42 | % | ||||||||||
|
|
|
|
|
| |||||||||||||||
DENTAL LOAN DATA(2) | ||||||||||||||||||||
Local Dental gross loans, period-end | $ | 145,817 | $ | 155,137 | $ | 159,427 | -6.01 | % | -8.54 | % | ||||||||||
National Dental gross loans, period-end | 194,345 | 185,161 | 146,965 | 4.96 | % | 32.24 | % | |||||||||||||
|
|
|
|
|
| |||||||||||||||
Total gross dental loans, period-end | $ | 340,162 | $ | 340,298 | $ | 306,392 | -0.04 | % | 11.02 | % | ||||||||||
|
|
|
|
|
| |||||||||||||||
| (1) | National health care loans include loans to health care professionals, primarily dental practitioners, operating outside of Pacific Continental Bank’s market area. The market area is defined as Oregon and Washington, West of the Cascade Mountain Range. |
| (2) | Dental loans include loans to dental professionals for the purpose of practice expansion, acquisition or other purpose, supported by the cash flows of a dental practice. |
PACIFIC CONTINENTAL CORPORATION
Selected Other Financial Information and Ratios
(In thousands)
(Unaudited)
| Three months ended | Twelve months ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2015 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||
BALANCE SHEET AVERAGES | ||||||||||||||||||||
Loans, net of deferred fees | $ | 1,374,281 | $ | 1,335,897 | $ | 1,028,724 | $ | 1,270,129 | $ | 1,025,889 | ||||||||||
Allowance for loan losses | (16,820 | ) | (16,275 | ) | (15,675 | ) | (16,142 | ) | (15,707 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Loans, net of allowance | 1,357,461 | 1,319,622 | 1,013,049 | 1,253,987 | 1,010,182 | |||||||||||||||
Securities and short-term deposits | 396,852 | 400,428 | 356,389 | 391,888 | 351,975 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Earning assets | 1,754,313 | 1,720,050 | 1,369,438 | 1,645,875 | 1,362,157 | |||||||||||||||
Noninterest-earning assets | 138,949 | 139,368 | 115,104 | 136,957 | 114,903 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Assets | $ | 1,893,262 | $ | 1,859,418 | $ | 1,484,542 | $ | 1,782,832 | $ | 1,477,060 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Interest-bearing core deposits(1) | $ | 942,360 | $ | 944,216 | $ | 678,381 | $ | 887,901 | $ | 654,965 | ||||||||||
Noninterest-bearing core deposits(1) | 584,445 | 538,768 | 404,569 | 518,267 | 376,175 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Core deposits(1) | 1,526,805 | 1,482,984 | 1,082,950 | 1,406,168 | 1,031,140 | |||||||||||||||
Noncore interest-bearing deposits | 59,986 | 62,481 | 93,988 | 69,647 | 101,288 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Deposits | 1,586,791 | 1,545,465 | 1,176,938 | 1,475,815 | 1,132,428 | |||||||||||||||
Borrowings | 81,872 | 93,211 | 116,567 | 91,700 | 156,765 | |||||||||||||||
Other noninterest-bearing liabilities | 7,501 | 7,512 | 7,580 | 6,817 | 6,105 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Liabilities | 1,676,164 | 1,646,188 | 1,301,085 | 1,574,332 | 1,295,298 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Shareholders’ equity (book) | 217,098 | 213,230 | 183,457 | 208,500 | 181,762 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Liabilities and equity | $ | 1,893,262 | $ | 1,859,418 | $ | 1,484,542 | $ | 1,782,832 | $ | 1,477,060 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Shareholders’ equity (tangible)(2) | $ | 174,051 | $ | 170,062 | $ | 159,947 | $ | 168,317 | $ | 158,206 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Period-end earning assets | $ | 1,766,635 | $ | 1,737,561 | $ | 1,386,188 | ||||||||||||||
|
|
|
|
|
| |||||||||||||||
SELECTED MARKET DEPOSIT DATA | ||||||||||||||||||||
Eugene market core deposits, period-end(1) | $ | 787,521 | $ | 747,298 | $ | 672,527 | ||||||||||||||
Portland market core deposits, period-end(1) | 552,283 | 549,113 | 276,453 | |||||||||||||||||
Seattle market core deposits, period-end(1) | 194,138 | 169,136 | 161,881 | |||||||||||||||||
|
|
|
|
|
| |||||||||||||||
Total core deposits, period-end(1) | 1,533,942 | 1,465,547 | 1,110,861 | |||||||||||||||||
Other deposits, period-end | 63,151 | 59,407 | 98,232 | |||||||||||||||||
|
|
|
|
|
| |||||||||||||||
Total | $ | 1,597,093 | $ | 1,524,954 | $ | 1,209,093 | ||||||||||||||
|
|
|
|
|
| |||||||||||||||
Eugene market core deposits, average(1) | $ | 783,391 | $ | 776,755 | $ | 668,927 | ||||||||||||||
Portland market core deposits, average(1) | 562,026 | 537,911 | 263,757 | |||||||||||||||||
Seattle market core deposits, average(1) | 181,388 | 168,318 | 150,266 | |||||||||||||||||
|
|
|
|
|
| |||||||||||||||
Total core deposits, average(1) | 1,526,805 | 1,482,984 | 1,082,950 | |||||||||||||||||
Other deposits, average | 59,986 | 62,481 | 93,988 | |||||||||||||||||
|
|
|
|
|
| |||||||||||||||
Total | $ | 1,586,791 | $ | 1,545,465 | $ | 1,176,938 | ||||||||||||||
|
|
|
|
|
| |||||||||||||||
NET INTEREST MARGIN RECONCILIATION | ||||||||||||||||||||
Yield on average loans(3) | 5.22 | % | 5.24 | % | 5.27 | % | 5.29 | % | 5.33 | % | ||||||||||
Yield on average securities(4) | 2.55 | % | 2.52 | % | 2.53 | % | 2.53 | % | 2.62 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Yield on average earning assets(4) | 4.60 | % | 4.59 | % | 4.56 | % | 4.61 | % | 4.63 | % | ||||||||||
Rate on average interest-bearing core deposits | 0.26 | % | 0.25 | % | 0.28 | % | 0.26 | % | 0.29 | % | ||||||||||
Rate on average interest-bearing non-core deposits | 1.30 | % | 1.58 | % | 1.29 | % | 1.40 | % | 1.35 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Rate on average interest-bearing deposits | 0.32 | % | 0.34 | % | 0.40 | % | 0.35 | % | 0.43 | % | ||||||||||
Rate on average borrowings | 1.21 | % | 1.23 | % | 1.06 | % | 1.22 | % | 0.85 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Cost of interest-bearing funds | 0.39 | % | 0.41 | % | 0.49 | % | 0.42 | % | 0.50 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Interest rate spread(4) | 4.21 | % | 4.17 | % | 4.07 | % | 4.19 | % | 4.13 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net interest margin- fully tax equivalent yield(4) | 4.36 | % | 4.32 | % | 4.25 | % | 4.34 | % | 4.30 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Acquiredloan fair value accretion impact to net interest margin(5) | 0.15 | % | 0.13 | % | 0.03 | % | 0.14 | % | 0.04 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
| (1) | Core deposits include demand, interest checking, money market, savings, and local time deposits, including local nonpublic time deposits in excess of $100 thousand. |
| (2) | Tangible equity excludes goodwill and core deposit intangible assets related to acquisitions. |
| (3) | Interest income includes recognized loan origination fees of $223, $152, and $149 for the three months ended December 31, 2015, September 30, 2015, and December 31, 2014, respectively, and $702 and $574 for the twelve months ended December 31, 2015 and 2014, respectively. |
| (4) | Tax-exempt income has been adjusted to a tax-equivalent basis at a 35% tax rate. The tax equivalent yield adjustment to interest earned on loans was $198, $173 and $29 for the three months ended December 31, 2015, September 30, 2015, and December 31, 2014 , respectively, and $612 and $123 for the twelve months ended December 31, 2015 and 2014, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $261, $264 and $269 for the three months ended December 31, 2015, September 30, 2015, and December 31, 2014 , respectively, and $1,064 and $1,061 for the twelve months ended December 31, 2015 and 2014, respectively. |
| (5) | During the three months ended December 31, 2015, September 30, 2015, and December 31, 2014, accretion of the fair value adjustment on acquired loans contributed to interest income was $671, $616, and $90, respectively, and $2,291 and $526 for the twelve months ended December 31, 2015 and 2014, respectively. |
PACIFIC CONTINENTAL CORPORATION
Nonperforming Assets, Asset Quality Ratios and Allowance for Loan Losses
(Dollars in thousands)
(Unaudited)
| December 31, | September 30, | December 31, | ||||||||||
| 2015 | 2015 | 2014 | ||||||||||
| NONPERFORMING ASSETS | ||||||||||||
Non-accrual loans | ||||||||||||
Real estate secured loans: | ||||||||||||
Permanent loans: | ||||||||||||
Multi-family residential | $ | — | $ | — | $ | — | ||||||
Residential 1-4 family | 733 | 569 | 321 | |||||||||
Owner-occupied commercial | 2,369 | 2,371 | 599 | |||||||||
Nonowner-occupied commercial | 790 | 829 | 906 | |||||||||
|
|
|
|
|
| |||||||
Total permanent real estate loans | 3,892 | 3,769 | 1,826 | |||||||||
Construction loans: | ||||||||||||
Multi-family residential | — | — | — | |||||||||
Residential 1-4 family | 53 | 53 | — | |||||||||
Commercial real estate | — | — | — | |||||||||
Commercial bare land and acquisition & development | — | — | — | |||||||||
Residential bare land and acquisition & development | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Total construction real estate loans | 53 | 53 | — | |||||||||
|
|
|
|
|
| |||||||
Total real estate loans | 3,945 | 3,822 | 1,826 | |||||||||
Commercial loans | 1,564 | 983 | 869 | |||||||||
|
|
|
|
|
| |||||||
Total nonaccrual loans | 5,509 | 4,805 | 2,695 | |||||||||
90-days past due and accruing interest | — | — | — | |||||||||
Total nonperforming loans | 5,509 | 4,805 | 2,695 | |||||||||
|
|
|
|
|
| |||||||
Nonperforming loans guaranteed by government | (2,790 | ) | (2,574 | ) | (706 | ) | ||||||
Net nonperforming loans | 2,719 | 2,231 | 1,989 | |||||||||
|
|
|
|
|
| |||||||
Other real estate owned | 11,747 | 11,854 | 13,374 | |||||||||
|
|
|
|
|
| |||||||
Total nonperforming assets, net of guaranteed loans | $ | 14,466 | $ | 14,085 | $ | 15,363 | ||||||
|
|
|
|
|
| |||||||
ASSET QUALITY RATIOS | ||||||||||||
Allowance for loan losses as a percentage of total loans outstanding | 1.23 | % | 1.22 | % | 1.50 | % | ||||||
Allowance for loan losses as a percentage of total nonperforming loans, net of government guarantees | 636.30 | % | 744.60 | % | 786.17 | % | ||||||
Quarter-to-date net loan charge offs (recoveries) as a percentage of average loans, annualized | -0.02 | % | 0.00 | % | 0.03 | % | ||||||
Net nonperforming loans as a percentage of total loans | 0.19 | % | 0.16 | % | 0.19 | % | ||||||
Nonperforming assets as a percentage of total assets | 0.76 | % | 0.75 | % | 1.02 | % | ||||||
Consolidated classified asset ratio(1) | 23.03 | % | 25.14 | % | 24.54 | % | ||||||
Past due as a percentage of total loans (2) | 0.03 | % | 0.14 | % | 0.15 | % | ||||||
| Three months ended | Twelve months ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2015 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||
ALLOWANCE FOR LOAN LOSSES | ||||||||||||||||||||
Balance at beginning of period | $ | 16,612 | $ | 16,013 | $ | 15,722 | $ | 15,637 | $ | 15,917 | ||||||||||
Provision for loan losses | 520 | 625 | — | 1,695 | — | |||||||||||||||
Loan charge-offs | (69 | ) | (105 | ) | (181 | ) | (700 | ) | (835 | ) | ||||||||||
Loan recoveries | 238 | 79 | 96 | 669 | 555 | |||||||||||||||
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Net recoveries (charge-offs) | 169 | (26 | ) | (85 | ) | (31 | ) | (280 | ) | |||||||||||
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Balance at end of period | $ | 17,301 | $ | 16,612 | $ | 15,637 | $ | 17,301 | $ | 15,637 | ||||||||||
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| (1) | Consolidated classified asset ratio is defined as the sum of all loan-related contingent liabilities and loans internally graded substandard or worse, impaired loans (net of government guarantees), adversely classified securities, and other real estate owned, divided by total consolidated Tier 1 capital plus the allowance for loan losses. |
| (2) | Defined as loans past due more than 30 days and still accruing interest, as a percentage of total loans, net of deferred fees. |
PACIFIC CONTINENTAL CORPORATION
Consolidated Financial Highlights
(Dollars in thousands, except share and per share data)
(Unaudited)
| 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | ||||||||||||||||
| 2015 | 2015 | 2015 | 2015 | 2014 | ||||||||||||||||
EARNINGS | ||||||||||||||||||||
Net interest income | $ | 18,822 | $ | 18,308 | $ | 17,696 | $ | 14,972 | $ | 14,374 | ||||||||||
Provision for loan loss | $ | 520 | $ | 625 | $ | 550 | $ | — | $ | — | ||||||||||
Noninterest income | $ | 2,008 | $ | 1,714 | $ | 1,627 | $ | 1,276 | $ | 1,318 | ||||||||||
Noninterest expense | $ | 11,706 | $ | 11,182 | $ | 11,030 | $ | 11,972 | $ | 9,798 | ||||||||||
Net income | $ | 5,528 | $ | 5,325 | $ | 5,095 | $ | 2,802 | $ | 3,631 | ||||||||||
Basic earnings per share | $ | 0.28 | $ | 0.27 | $ | 0.26 | $ | 0.15 | $ | 0.20 | ||||||||||
Diluted earnings per share | $ | 0.28 | $ | 0.27 | $ | 0.26 | $ | 0.15 | $ | 0.20 | ||||||||||
Average shares outstanding | 19,598,484 | 19,591,666 | 19,562,363 | 18,232,076 | 17,717,270 | |||||||||||||||
Average diluted shares outstanding | 19,766,098 | 19,816,770 | 19,788,884 | 18,444,971 | 17,939,752 | |||||||||||||||
PERFORMANCE RATIOS | ||||||||||||||||||||
Return on average assets | 1.16 | % | 1.14 | % | 1.14 | % | 0.72 | % | 0.97 | % | ||||||||||
Return on average equity (book) | 10.10 | % | 9.91 | % | 9.68 | % | 5.91 | % | 7.85 | % | ||||||||||
Return on average equity (tangible) (1) | 12.60 | % | 12.42 | % | 12.18 | % | 7.05 | % | 9.01 | % | ||||||||||
Net interest margin - fully tax equivalent yield(2) | 4.36 | % | 4.32 | % | 4.39 | % | 4.29 | % | 4.25 | % | ||||||||||
Efficiency ratio (tax equivalent)(3) | 55.50 | % | 55.12 | % | 56.30 | % | 72.47 | % | 61.39 | % | ||||||||||
Full-time equivalent employees | 322 | 321 | 322 | 317 | 288 | |||||||||||||||
CAPITAL | ||||||||||||||||||||
Tier 1 leverage ratio(4) | 9.93 | % | 9.88 | % | 10.01 | % | 11.31 | % | 11.33 | % | ||||||||||
Common Equity tier 1 ratio (4) | 10.97 | % | 11.00 | % | 11.27 | % | 11.41 | % | NA | |||||||||||
Tier 1 risk based ratio (4) | 11.47 | % | 11.49 | % | 11.78 | % | 11.97 | % | 14.48 | % | ||||||||||
Total risk based ratio (4) | 12.58 | % | 12.58 | % | 12.88 | % | 13.08 | % | 15.73 | % | ||||||||||
Book value per share | $ | 11.15 | $ | 11.06 | $ | 10.82 | $ | 10.80 | $ | 10.39 | ||||||||||
Regular cash dividend per share | $ | 0.11 | $ | 0.11 | $ | 0.10 | $ | 0.10 | $ | 0.10 | ||||||||||
Special cash dividend per share | NA | NA | NA | NA | $ | 0.05 | ||||||||||||||
ASSET QUALITY | ||||||||||||||||||||
Allowance for loan losses (ALL) | $ | 17,301 | $ | 16,612 | $ | 16,013 | $ | 15,724 | $ | 15,637 | ||||||||||
Non performing loans (NPLs) net of government guarantees | $ | 2,719 | $ | 2,231 | $ | 2,258 | $ | 2,635 | $ | 1,989 | ||||||||||
Non performing assets (NPAs) net of government guarantees | $ | 14,466 | $ | 14,085 | $ | 14,924 | $ | 16,802 | $ | 15,363 | ||||||||||
Net loan (recoveries) charge offs | $ | (169 | ) | $ | 26 | $ | 261 | $ | (87 | ) | $ | 85 | ||||||||
ALL as a percentage of gross loans | 1.23 | % | 1.23 | % | 1.23 | % | 1.25 | % | 1.50 | % | ||||||||||
ALL as a % NPLs, net of government guarantees | 636.30 | % | 744.60 | % | 709.17 | % | 596.74 | % | 786.17 | % | ||||||||||
Net loan charge offs (recoveries) to average loans | -0.02 | % | 0.00 | % | 0.05 | % | -0.03 | % | 0.03 | % | ||||||||||
Net NPLs as a percentage of total loans | 0.19 | % | 0.16 | % | 0.17 | % | 0.21 | % | 0.19 | % | ||||||||||
Nonperforming assets as a percentage of total assets | 0.76 | % | 0.75 | % | 0.82 | % | 0.94 | % | 1.02 | % | ||||||||||
Consolidated classified asset ratio(5) | 23.03 | % | 25.14 | % | 26.52 | % | 27.60 | % | 24.54 | % | ||||||||||
Past due as a percentage of total loans (6) | 0.03 | % | 0.14 | % | 0.19 | % | 0.35 | % | 0.15 | % | ||||||||||
END OF PERIOD BALANCES | ||||||||||||||||||||
Total securities and short term deposits | $ | 379,454 | $ | 398,366 | $ | 393,408 | $ | 391,988 | $ | 356,804 | ||||||||||
Total loans net of allowance | $ | 1,387,181 | $ | 1,339,195 | $ | 1,288,919 | $ | 1,238,982 | $ | 1,029,384 | ||||||||||
Total earning assets | $ | 1,766,635 | $ | 1,737,561 | $ | 1,682,327 | $ | 1,630,970 | $ | 1,386,188 | ||||||||||
Total assets | $ | 1,909,478 | $ | 1,878,283 | $ | 1,830,942 | $ | 1,780,849 | $ | 1,504,325 | ||||||||||
Total non-interest bearing deposits | $ | 568,688 | $ | 544,009 | $ | 531,697 | $ | 503,735 | $ | 407,311 | ||||||||||
Core deposits (7) | $ | 1,533,942 | $ | 1,465,547 | $ | 1,445,218 | $ | 1,417,397 | $ | 1,110,861 | ||||||||||
Total deposits | $ | 1,597,093 | $ | 1,524,954 | $ | 1,514,181 | $ | 1,496,747 | $ | 1,209,093 | ||||||||||
AVERAGE BALANCES | ||||||||||||||||||||
Total securities and short term deposits | $ | 396,852 | $ | 400,428 | $ | 398,836 | $ | 371,061 | $ | 356,389 | ||||||||||
Total loans net of allowance | $ | 1,357,461 | $ | 1,319,622 | $ | 1,257,366 | $ | 1,077,706 | $ | 1,013,049 | ||||||||||
Total earning assets | $ | 1,754,313 | $ | 1,720,050 | $ | 1,656,202 | $ | 1,448,767 | $ | 1,369,438 | ||||||||||
Total assets | $ | 1,893,262 | $ | 1,859,418 | $ | 1,800,527 | $ | 1,573,767 | $ | 1,484,542 | ||||||||||
Total non-interest bearing deposits | $ | 584,445 | $ | 538,768 | $ | 508,259 | $ | 439,780 | $ | 404,569 | ||||||||||
Core deposits (7) | $ | 1,526,805 | $ | 1,482,984 | $ | 1,409,836 | $ | 1,200,618 | $ | 1,082,950 | ||||||||||
Total deposits | $ | 1,586,791 | $ | 1,545,465 | $ | 1,483,305 | $ | 1,283,604 | $ | 1,176,938 | ||||||||||
| (1) | Tangible equity excludes goodwill and core deposit intangible assets related to acquisitions. |
| (2) | Net interest margin is reported on a tax-equivalent yield basis at a 35% tax rate. |
| (3) | Efficiency ratio is noninterest expense as a percent of net interest income (on a tax-equivalent basis) plus noninterest income. |
| (4) | In first quarter 2015, the U.S. Basel III capital framework methodology was implemented for all banks. The 2015 capital ratios have been presented based on the new methodology. Capital ratios prior to 2015 have not been restated in conformity with the new methodology. |
| (5) | The sum of all loan-related contingent liabilities and loans internally graded substandard or worse, impaired loans (net of government guarantees), adversely classified securities, and other real estate owned, divided by total consolidated Tier 1 capital plus the allowance for loan losses. |
| (6) | Defined as loans past due more than 30 days and still accruing interest, as a percentage of total loans, net of deferred fees. |
| (7) | Core deposits include demand, interest checking, money market, savings, and local time deposits, including local nonpublic time deposits in excess of $100 thousand. |
| NA | Not applicable |