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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarter ended September 30, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 000-29829
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PACIFIC FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Washington 91-1815009
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
300 East Market Street
Aberdeen, Washington 98520-5244
(360) 533-8870
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days:
Yes X No
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Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Title of Class Outstanding at October 31, 2001
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Common Stock, par value $1.00 per share 2,478,849 shares
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1
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION 3
ITEM 1. FINANCIAL STATEMENTS 3
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2001 AND DECEMBER 31, 2000 3
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2001
AND 2000 4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTH PERIODS ENDED SEPTEMBER 30, 2001 AND 2000 5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
NINE MONTH PERIODS ENDED SEPTEMBER 30, 2001 AND 2000 7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 11
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK 14
PART II OTHER INFORMATION 15
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 15
SIGNATURES 15
2
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
(Dollars in Thousands)
Pacific Financial Corporation
September 30, 2001 and December 31, 2000
September 30, December 31,
2001 2000
Assets (Unaudited)
Cash and due from banks $8,344 $8,619
Interest bearing balances with banks 8,531 480
Federal funds sold 9,160 570
Investment securities available for sale 33,904 53,696
Investment securities held-to-maturity 1,974 1,376
Federal Home Loan Bank stock, at cost 3,747 3,562
Loans 170,929 177,168
Allowance for credit losses 1,828 2,026
-------- ---------
Loans, net 169,101 175,142
Premises and equipment 4,125 4,122
Foreclosed real estate 1,502 -0-
Accrued interest receivable 1,768 2,302
Cash surrender value of life insurance 2,525 2,435
Other assets 1,237 1,009
-------- --------
Total assets $245,918 $253,313
Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing $37,407 $32,510
Interest bearing 180,185 181,001
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Total deposits 217,592 213,511
Accrued interest payable 553 779
Short-term borrowings -0- 11,358
Other liabilities 1,863 4,922
--------- -------
Total liabilities 220,008 230,570
Stockholders' Equity
Common stock (par value $1); authorized:
25,000,000 shares; issued
September 30, 2001 - 2,478,849 shares;
December 31, 2000 - 2,503,130 shares 2,479 2,503
Surplus 9,373 9,859
Retained earnings 13,460 10,572
Accumulated other comprehensive
income (loss) 598 (191)
-------- -------
Total stockholders' equity 25,910 22,743
Total liabilities and stockholders' equity $245,918 $253,313
See notes to condensed consolidated financial statements.
3
Condensed Consolidated Statements of Income
(Dollars in thousands, except per share amounts) THREE MONTHS ENDED NINE MONTHS ENDED
(Unaudited) SEPTEMBER 30, SEPTEMBER 30,
2001 2000 2001 2000
INTEREST INCOME
Loans $3,690 $4,202 $11,717 $12,187
Securities held to maturity - tax exempt 23 24 68 74
Securities available for sale:
Taxable 407 682 1,523 2,225
Tax-exempt 138 207 414 507
Deposits with banks
and federal funds sold 143 18 335 88
------ ------ ------ ------
Total interest income 4,401 5,133 14,057 15,081
INTEREST EXPENSE
Deposits 1,478 2,074 5,266 5,772
Other borrowings 61 150 190 463
------ ------ ------ ------
Total interest expense 1,539 2,224 5,456 6,235
Net Interest Income 2,862 2,909 8,601 8,846
Provision for credit losses 98 98 298 203
------ ------ ------ ------
Net interest income after provision
for credit losses 2,764 2,811 8,303 8,643
NON-INTEREST INCOME
Service charges 203 181 582 557
Mortgage loan origination fees 13 0 27 1
Gain on sale of foreclosed real estate 0 0 0 31
Other operating income 226 123 493 376
---- ---- ----- ----
Total non-interest income 442 304 1,102 965
NON-INTEREST EXPENSE
Salaries and employee benefits 980 952 3,038 2,915
Occupancy and equipment 242 241 712 736
Other 539 530 1,578 1,556
----- ----- ----- -----
Total non-interest expense 1,761 1,723 5,328 5,207
Income before income taxes 1,445 1,392 4,077 4,401
Provision for income taxes 399 444 1,189 1,353
----- ----- ----- -----
Net Income $1,046 $948 $2,888 $3,048
Earnings per common share:
Basic $.42 $.38 (1) $1.16 $1.22 (1)
Diluted .42 .38 (1) 1.15 1.21 (1)
Average shares outstanding:
Basic 2,484,284 2,500,350 (1)2,495,047 2,489,390 (1)
Diluted 2,508,707 2,521,684 (1)2,519,843 2,514,268 (1)
(1)Restated to reflect the 5-for-1 stock split in July 2000.
See notes to condensed consolidated financial statements.
4
Condensed Consolidated Statements of Cash Flows
Nine months ended September 30, 2001 and 2000
(Dollars in thousands)
(Unaudited) 2001 2000
OPERATING ACTIVITIES
Net income $2,888 $3,048
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for credit losses 298 203
Depreciation and amortization 314 331
Stock dividends received (185) (164)
Loss on sale of premises and equipment 1 ----
Gain on sale of foreclosed real estate ---- (31)
(Increase) decrease in accrued interest receivable 534 (320)
Increase (decrease) in accrued interest payable (226) 113
Other (539) 15
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Net cash provided by operating activities 3,085 3,195
INVESTING ACTIVITIES
Net increase in federal funds sold (8,590) (645)
Increase in interest bearing
deposits with banks (8,051) (1,450)
Purchase of securities held to maturity (683) ----
Proceeds from maturities of investments held to maturity 85 137
Purchases of securities available for sale (15,273) (1,850)
Proceeds from maturities of securities available for sale 25,500 8,614
Proceeds from sales of securities available for sale 10,694 ----
Net decrease (increase) in loans 4,260 (22,774)
Additions to premises and equipment (327) (509)
Proceeds from sales of premises and equipment 16 ----
Proceeds from sales of foreclosed real estate ---- 182
------ -------
Net cash provided by (used in) investing activities 7,631 (18,708)
FINANCING ACTIVITIES
Net increase in deposits 4,081 18,671
Net decrease in short-term borrowings (11,358) (5,450)
Repurchase and retirement of common stock (510) ----
Payment of dividends (3,204) (3,105)
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Net cash provided by (used in) financing activities (10,991) 10,529
Net decrease in cash and due from banks (275) (4,984)
5
CASH AND DUE FROM BANKS
Beginning of period 8,619 13,080
End of period $8,344 $8,096
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for:
Interest $5,492 $6,122
Income Taxes 1,125 1,320
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES
Change in fair value of securities available
for sale, net of tax $789 $361
Foreclosed real estate acquired in settlement of loans (1,733) ----
Financed sale of foreclosed real estate 231 ----
Stock issued in five-for-one stock split ---- 1,988
Stock issued for land purchase ---- 413
See notes to condensed consolidated financial statements.
6
Condensed Consolidated Statements of Stockholders' Equity
Nine months ended September 30, 2001 and 2000
(Dollars in thousands) (Unaudited)
ACCUMULATED
OTHER
COMPREHENSIVE
COMMON RETAINED INCOME
STOCK SURPLUS EARNINGS (LOSS) TOTAL
Balance December 31, 1999 $ 497 $11,420 $10,473 $(952) $21,438
Other comprehensive income:
Net income 3,048 3,048
Change in unrealized loss
on securities available for sale, net 361 361
Comprehensive income 3,409
Five-for-one stock split 1,988 (1,988)
Issuance of common stock 16 397 413
----- ----- ------ ---- ------
Balance September 30, 2000 $2,501 $9,829 $13,521 $(591) $25,260
Balance December 31, 2000 $2,503 $9,859 $10,572 $(191) $22,743
Stock re-purchase (24) (486) (510)
Other comprehensive income:
Net income 2,888 2,888
Change in fair value of
securities available for sale, net 789 789
Comprehensive income 3,677
----- ----- ------ ---- ------
Balance September 30, 2001 $2,479 $9,373 $13,460 $598 $25,910
See notes to condensed consolidated financial statements.
7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared by Pacific Financial Corporation ("Pacific" or "Company") in accordance
with generally accepted accounting principles for interim financial information
and with instructions to Form 10Q. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the nine months ended
September 30, 2001, are not necessarily indicative of the results anticipated
for the year ending December 31, 2001.
The preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.
All dollar amounts in tables, except per share information, are stated in
thousands.
2. Investment Securities
Investment securities consist principally of short and intermediate term debt
instruments issued by the U.S. Treasury, other U.S. government agencies, State
and local government units, and other corporations. The Company is a stockholder
in the Federal Home Loan Bank of Seattle (FHLB).
SECURITIES HELD TO MATURITY AMORTIZED UNREALIZED FAIR
COST (LOSSES) VALUE
September 30, 2001
State and Municipal Securities $1,974 (8) $1,966
----- ----- -----
TOTAL $1,974 (8) $1,966
SECURITIES AVAILABLE FOR SALE AMORTIZED UNREALIZED FAIR
COST GAINS VALUE
September 30, 2001
U.S. Treasury Securities $ 500 $3 $503
U.S. Government Securities 5,295 182 5,477
State and Municipal Securities 12,179 489 12,668
Corporate Securities 11,004 223 11,227
Mutual Funds 4,021 8 4,029
------ ------ ------
TOTAL $ 32,999 $905 $33,904
8
3. Allowance for Credit Losses
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2001 2000 2001 2000
Balance at beginning of period $1,875 $2,031 $2,026 $1,930
Provision for possible credit losses 98 98 298 203
Charge-offs (147) (1) (503) (11)
Recoveries 2 16 7 22
Net recoveries (charge-offs) (145) 15 (496) 11
----- ----- ----- -----
Balance at end of period $1,828 $2,144 $1,828 $2,144
4. Computation of Basic Earnings per Share:
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2001 2000 (1) 2001 2000 (1)
Net Income $1,046,000 $948,000 $2,888,000 $3,048,000
Shares Outstanding,
Beginning of Period 2,498,849 2,500,350 2,503,130 2,483,850
Shares Issued During Period Times
Average Time Outstanding - - - 5,540
Shares Repurchased During Period Times
Average Time Outstanding (14,565) - (8,083) -
Average Shares Outstanding 2,484,284 2,500,350 2,495,047 2,489,390
Basic Earnings Per Share $.42 $.38 $1.16 $1.22
(1) Restated to reflect the five-for-one stock split in July 2000.
5. Computation of Diluted Earnings Per Share:
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2001 2000 (1) 2001 2000 (1)
Net Income $1,046,000 $948,000 $2,888,000 $3,048,000
Options Outstanding 168,300 77,300 168,300 77,300
Proceeds Were Options Exercised $3,327,865 $1,390,750 $3,327,865 $1,390,750
Average Share Price During Period $23.13 $24.85 $23.19 $26.53
Proceeds Divided By Average
Share Price 143,877 55,966 143,504 52,422
Incremental Shares 24,423 21,334 24,796 24,878
9
Average Shares Outstanding 2,484,284 2,500,350 2,495,047 2,489,390
Incremental Shares
Plus Outstanding Shares 2,508,707 2,521,684 2,519,843 2,514,268
Diluted Earnings Per Share $.42 $.38 $1.15 $1.21
(1) Restated to reflect the five-for-one stock split in July 2000.
10
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
A WARNING ABOUT FORWARD-LOOKING INFORMATION
We have made forward-looking statements in this document that are subject
to risks and uncertainties. These statements are based on the beliefs and
assumptions of our management, and on information currently available to them.
Forward-looking statements include the information concerning our possible or
assumed future results of operations set forth under "Management's Discussion
and Analysis of Financial Condition And Results of Operations" and statements
preceded by, followed by or that include the words "believes," "expects,"
"anticipates," "intends," "plans," "estimates" or similar expressions.
Any forward-looking statements in this document are subject to risks relating
to, among other things, the following:
1. competitive pressures among depository and other financial institutions
may increase significantly;
2. changes in the interest rate environment may reduce margins;
3. general economic or business conditions, either nationally or in the
state or regions in which we do business, may be less favorable than expected,
resulting in, among other things, a deterioration in credit quality, including
as a result of lower prices in the real estate market, or a reduced demand for
credit;
4. legislative or regulatory changes may adversely affect the businesses
in which we are engaged; and
5. the securities markets may continue to experience a downturn.
Our management believes the forward-looking statements are reasonable;
however, you should not place undue reliance on them. Forward-looking statements
are not guarantees of performance. They involve risks, uncertainties and
assumptions. Many of the factors that will determine our future results and
share value are beyond our ability to control or predict.
NET INCOME. For the nine months ended September 30, 2001, Pacific's net income
was $2,888,000 compared to $3,048,000 for the same period in 2000. The principal
factor contributing to the decrease was the decline in net interest income. Net
income for the three months ended September 30, 2001 was $1,046,000, compared to
$948,000 for the same period in 2000. The increase was attributable to an
increase in non-interest income.
NET INTEREST INCOME. Net interest income for the three months ended September
30, 2001 decreased $47,000 compared to the same period in 2000. Net interest
income for the nine months ended September 30, 2001 decreased $245,000 over the
comparable period in 2000.
Interest income for the three months ended September 30, 2001 decreased $732,000
or 14.2% compared to the comparable period in 2000, and for the nine months
ended September 30, 2001
11
decreased $1,024,000 or 6.8% over the same period in 2000. Decreases in the
prime rate of interest during the reporting periods were the primary reasons for
the negative variance in interest income from loans. Average loans outstanding
for the nine months ended September 30, 2001 and September 30, 2000 were
$172,600,000 and $166,255,000, respectively, or 3.8% higher in 2001. Securities
balances decreased during the three month and nine month periods ended September
30, 2001, as the result of call options being exercised by the issuer of the
securities due to the declining interest rate environment. This was the primary
reason for the decrease in taxable securities interest income. Concurrently,
interest bearing deposits with banks and federal funds sold increased during the
three and nine month periods ended September 30, 2001, resulting in increases of
$125,000 and $247,000, respectively, in interest income compared to the same
periods in 2000.
Interest expense for the three months ended September 30, 2001 decreased
$685,000 or 30.8% compared to the same period in 2000, and decreased $779,000 or
12.5% for the nine months ended September 30, 2001 from the comparable period in
2000. Average interest bearing deposits for the nine months ended September 30,
2001 and September 30, 2000 were $180,469,000 and 177,789,000, respectively,
while average short term borrowings and federal funds purchased for the periods
were $4,098,000 and $7,451,000, respectively, a decrease in 2001 of 45.0% over
the period in 2000.
PROVISION AND ALLOWANCE FOR CREDIT LOSSES. During the three months ended
September 30, 2001 and 2000, $98,000 was provided for credit losses. For the
nine months ended September 30, 2001, $298,000 was provided for possible credit
losses compared to $203,000 for the comparable period in 2000. For the nine
months ended September 30, 2001, net charge-offs were $496,000 compared to net
recoveries of $11,000 during the same period in 2000.
At September 30, 2001, the allowance for credit losses stood at $1,828,000
compared to $2,026,000 at December 31, 2000, and $2,144,000 at September 30,
2000. The ratio of the allowance to total loans outstanding was 1.07%, 1.14% and
1.22% at September 30, 2001, December 31, 2000, and September 30, 2000,
respectively. Management considers the allowance for credit losses to be
adequate for the periods indicated.
NON-PERFORMING ASSETS AND OTHER REAL ESTATE OWNED. Non-performing assets totaled
$2,825,000 at September 30, 2001. This represents 1.15% of total assets compared
to $3,420,000 or 1.35% at December 31, 2000, and $3,394,000 or 1.32% at
September 30, 2000. Non-accrual loans at September 30, 2001 totaled $981,000 of
which $363,000 are secured by real estate. Loans accruing which are past due 90
days or more totaled $342,000 at September 30, 2001. During the three months
ended September 30, 2001, three loans totaling $953,000 were transferred to
foreclosed real estate. Foreclosed properties consist of a commercial motel
which the Company is operating, a cranberry farm, of which certain parcels have
been sold, and two commercial real estate properties. All properties are
actively being marketed for sale. The balances reflect the estimated market
value of the subject properties less estimated selling costs.
12
ANALYSIS OF
NONPERFORMING ASSETS SEPTEMBER 30 DECEMBER 31 SEPTEMBER 30
(Dollars in thousands) 2001 2000 2000
Accruing loans past due 90 days
or more $342 $292 $1,663
Non-accrual loans 981 3,128 1,705
Foreclosed real estate 1,502 0 26
----- ----- -----
TOTAL $2,825 $3,420 $3,394
NON-INTEREST INCOME AND EXPENSE. Non-interest income for the three month period
ended September 30, 2001 increased $138,000 or 45.4% compared to the same period
in 2000, and increased $137,000 or 14.2% for the nine months ended September 30,
2001 compared to the same period in 2000. This is due primarily to an increase
in income from real estate owned.
Non-interest expense for the three and nine month periods ended September 30,
2001 increased $38,000 or 2.2%, and $121,000 or 2.3% respectively, compared to
the same periods in 2000. For the 2001 three-month period, salaries and benefits
increased $28,000, occupancy expense increased $1,000, and other expenses
increased $9,000 compared to the same period in 2000. The primary reasons for
the increase in non-interest expense for the nine months ended September 30,
2001 compared to the same period in 2000, were an increase in salaries and
benefits of $123,000. Occupancy expense decreased $24,000 and other expense
increased $22,000 compared to the nine months ended September 30, 2000.
INCOME TAXES. The federal income tax provision for the nine months ended
September 30, 2001 was $1,189,000, a decrease of $164,000 compared to the same
period in 2000. The effective tax rate for the 2001 period is 29.2% compared to
29.9% in 2000.
FINANCIAL CONDITION. Total assets were $245,918,000 at September 30, 2001, a
decrease of $7,395,000 or 2.9% over year-end 2000. Loans totaled $170,929,000 at
September 30, 2001, a decrease of $6,239,000 or 3.5% over year-end 2000. Total
deposits were $217,592,000 at September 30, 2001, an increase of $4,081,000 or
1.9% compared to the balance at December 31, 2000.
13
LOANS. Loan detail by category at September 30, 2001 and December 31, 2000 was
as follows:
(Dollars in thousands)
September 30, December 31,
2001 2000
Commercial and industrial $62,033 $60,617
Agricultural 9,992 8,115
Real estate mortgage 87,491 97,380
Real estate construction 6,581 6,118
Installment 3,893 3,661
Credit cards and other 939 1,277
------- -------
Total Loans 170,929 177,168
Allowance for credit losses (1,828) (2,026)
------- -------
Net Loans $169,101 $175,142
LIQUIDITY. Adequate liquidity is available to accommodate fluctuations in
deposit levels, fund operations, and provide for customer credit needs and meet
obligations and commitments on a timely basis. The Company has no brokered
deposits. The Company has credit availability from the Federal Home Loan Bank of
Seattle of $50 million.
STOCKHOLDERS' EQUITY. Total stockholders' equity was $25,910,000 at September
30, 2001, an increase of $3,167,000 or 13.9% compared to December 31, 2000. Book
value per share increased to $10.45 at September 30, 2001 compared to $9.09 at
December 31, 2000. Book value is calculated by dividing total equity capital by
total shares outstanding. Book value is impacted by net income less dividends
and changes in the fair value of the Bank's available for sale investment
portfolio.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest rate, credit, and operations risks are the most significant market
risks which affect the Company's performance. The Company relies on loan review,
prudent loan underwriting standards and an adequate allowance for credit losses
to mitigate credit risk.
An asset/liability management simulation model is used to measure interest rate
risk. The model produces regulatory oriented measurements of interest rate risk
exposure. The model quantifies interest rate risk through simulating forecasted
net interest income over a 12 month time period under various interest rate
scenarios, as well as monitoring the change in the present value of equity under
the same rate scenarios. The present value of equity is defined as the
difference between the market value of assets less current liabilities. By
measuring the change in the present value of equity under various rate
scenarios, management is able to identify interest rate risk that may not be
evident in changes in forecasted net interest income.
The Company is currently slightly liability sensitive, in a one year horizon,
meaning that interest bearing liabilities mature or reprice more quickly than
interest-bearing assets over a one year period.
14
Therefore, a significant increase in market rates of interest could adversely
affect net interest income. Conversely, a decreasing rate environment may
benefit net interest income.
It should be noted that the simulation model does not take into account future
management actions that could be undertaken should actual market rates change
during the year. An important point should be kept in mind; the model simulation
results are not exact measures of the Company's actual interest rate risk. They
are rather only indicators of rate risk exposure, based on assumptions produced
in a simplified modeling environment designed to heighten sensitivity to changes
in interest rates. The rate risk exposure results of the simulation model
typically are greater than the Company's actual rate risk. That is due to the
conservative modeling environment, which generally depicts a worst-case
situation. Management has assessed the results of the simulation reports as of
September 30, 2001, and believes that there has been no material change since
December 31, 2000.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
No exhibits are filed with this report.
(b) Reports on Form 8-K:
A report on Form 8-K was filed on September 6, 2001, to report under Item
4 a change in the registrant's certifying accountant to McGladrey &
Pullen, LLP, as a result of that firm's acquisition of the practice of the
registrant's former independent auditors.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PACIFIC FINANCIAL CORPORATION
DATED: November 12 , 2001 By: /s/ Dennis A. Long
--- --------------------------------
Dennis A. Long
President
By: /s/ John Van Dijk
--------------------------------
John Van Dijk
Treasurer
15