Pacific Financial Corp Earns $2.1 Million, or $0.20 per Diluted Share, for Fourth Quarter of 2021; Earnings were $12.7 Million, or $1.22 per Diluted Share, for the Full Year 2021
Declares Quarterly Cash Dividend of $0.13 per Share
ABERDEEN, Wash., Jan. 28, 2022 (GLOBE NEWSWIRE) -- *Pacific Financial Corporation (OTCQX: PFLC), *(“Pacific Financial”) or the (“Company”), the holding company for Bank of the Pacific (the “Bank”), today reported net income of $2.1 million, or $0.20 per diluted share for the fourth quarter of 2021, compared to $3.8 million, or $0.37 per diluted share for the fourth quarter of 2020, and $2.6 million, or $0.25 per diluted share for the third quarter of 2021. Included in earnings for the current quarter was the recapture of $150,000 from the allowance for loan losses, compared to recording no provision for loan losses for the fourth quarter of 2020, and a recapture of $500,000 for the third quarter of 2021. For the year ended December 31, 2021, net income increased 12% to $12.7 million, or $1.22 per diluted share, compared to $11.4 million, or $1.07 per diluted share, for the year ended December 31, 2020. Included in earnings for the full year 2021 was the recapture of $3.7 million from the allowance for loan losses, compared to a provision for loan losses of $3.5 million for 2020. All results are unaudited.
The board of directors of Pacific Financial declared a quarterly cash dividend of $0.13 per share on January 26, 2022. The dividend will be payable on February 28, 2022, to shareholders of record on February 14, 2022.
“We are very pleased with our financial performance for 2021 with earnings for the full year representing one of the highest in our history,” said Denise Portmann, President and Chief Executive Officer. “Credit quality remains solid, aided by continued low levels of adversely classified and nonperforming loans. Non-impaired especially mention or watch loan balances decreased by $76.5 million from a year ago, and we recaptured a total of $3.7 million from the allowance for loans losses during the full year 2021. In addition, we continued to benefit from the Small Business Administration (‘SBA’) Paycheck Protection Program (‘PPP’) with total PPP interest and fee income of $1.0 million and $5.0 million recognized for the current quarter and during the year, respectively.”
“The loan portfolio declined during the fourth quarter, and year-over-year, primarily due to PPP forgiveness, pay downs, and lower loan line utilization on C&I Loans. Loan production was solid and we expect loan activity to continue to pick up in 2022. We are pleased with our entire team coming together and doing an outstanding job supporting our clients and servicing their financial needs,” said Portmann. “Total deposits increased 15% year-over-year with noninterest-bearing deposits representing 42% of total deposits at year end contributing to our strong balance sheet. As a result of our higher liquidity balances, we expect to continue to leverage excess liquidity over the coming periods.”
*Fourth Quarter 2021 Financial Highlights (as of, or for the period ended December 31, 2021, except as noted):*
· Net income was $2.1 million, or $0.20 per diluted share, for the fourth quarter of 2021, compared to $3.8 million, or $0.37 per diluted share, for the fourth quarter a year ago, and $2.6 million, or $0.25 per diluted share, for the third quarter of 2021.
· Return on average assets (“ROAA”) was 0.63% for the fourth quarter of 2021, compared to 1.31% in the fourth quarter a year ago and 0.79% for the third quarter of 2021. For the full year 2021, ROAA was 1.00% compared to 1.07% for 2020.
· The Bank recorded a $150,000 recapture from the allowance for loan losses during the current quarter, compared to no loan loss provision in the fourth quarter a year ago, and a recapture of $500,000 in the third quarter of 2021.
· Net interest margin (“NIM”) was 2.79% for the fourth quarter of 2021, compared to 3.53% for the fourth quarter of 2020, and 2.86% for the linked quarter.
· Net gain-on-sale of loans from mortgage banking activities declined $2.6 million to $1.5 million, compared to $4.0 million for the fourth quarter a year ago, and decreased $93,000 from $1.6 million for the third quarter of 2021.
· Gross loans totaled $629.8 million at December 31, 2021, compared to $732.0 million at December 31, 2020, and $665.6 million at September 30, 2021. Included in total loans at December 31, 2021, was $25.1 million of PPP loans compared to $96.1 million at December 31, 2020, and $45.6 million on a linked quarter basis.
· Core deposits (non-interest bearing and interest-bearing transaction and savings accounts) increased 16% to $1.12 billion at December 31, 2021, compared to $962.5 million at December 31, 2020, and declined 1% from $1.13 billion at September 30, 2021. Core deposits represented 95% of total deposits, with non-interest-bearing deposits representing 42% of total deposits at December 31, 2021.
· Asset quality:
· Non-impaired watch loans, or other loans especially mentioned, decreased $76.5 million, or 70%, to $32.8 million at December 31, 2021, compared to $109.3 million a year earlier, and increased $2.1 million, or 7%, from $30.8 million at September 30, 2021.
· Non-performing, assets as a percentage of total assets, remain minimal at 0.11% at December 31, 2021, compared 0.20% at December 31, 2020 and 0.15% at September 30, 2021.
· The Company’s consolidated capital ratios continue to exceed regulatory guidelines for a well-capitalized financial institution.
*Income Statement Review*
*Net income* was $2.1 million, or $0.20 per diluted share, for the fourth quarter of 2021, compared to $3.8 million, or $0.37 per diluted share, for the fourth quarter a year ago, and $2.6 million, or $0.25 per diluted share, for the third quarter of 2021. For the year ended December 31, 2021, net income increased 12% to $12.7 million, or $1.22 per diluted share, compared to $11.4 million, or $1.07 per diluted share for 2020.
*Net interest income*, before the provision for loan losses, was $8.8 million for the fourth quarter of 2021, compared to $9.7 million for the fourth quarter a year ago and $8.9 million for the third quarter of 2021. Amortized PPP fees and interest totaled $1.0 million, $1.6 million and $1.0 million, for the quarters ended December 31, 2021, December 31, 2020 and September 30, 2021, respectively. For the full year 2021, net interest income was $35.9 million, compared to $37.2 million for 2020, with amortized PPP fees and interest totaling $5.0 million and $3.3 million for 2021 and 2020, respectively.
Net interest margin (“NIM”) was 2.79% for the fourth quarter of 2021, compared to 3.53% for the fourth quarter of 2020, and 2.86% for the third quarter of 2021. For the full year 2021, the NIM was 3.00% compared to 3.73% for 2020. “Our NIM continued to be impacted by the low-interest rate environment as well as a change in the balance sheet composition with lower-yielding fed funds sold and securities comprising 46% of the balance sheet at year-end 2021 compared to 29% at year-end 2020 and 44% for the linked quarter”, said Carla Tucker, Executive Vice-President and Chief Financial Officer. “However, despite the continued pressure from the low-rate environment as interest rates move toward more normal levels, we expect our margin to benefit from repricing of existing loans and our high liquidity levels.“ The increased liquidity resulted from the continued growth in core deposit balances and PPP loan forgiveness payments.
Average loan yields, excluding PPP loans, for the current quarter was 4.45% compared to 4.70% for the fourth quarter of 2020 and 4.59% for the third quarter of 2021. Average loan yields, including PPP loans, for the current quarter decreased 6 basis points to 4.82% from 4.88% for the fourth quarter of 2020 and remained flat compared to the third quarter of 2021. For 2021, loan yields increased to 4.81%, compared to 4.80% for the full year 2020. Yields on average investment securities declined during the quarter and year-over-year as the company purchased additional balances of securities at yields lower than the previous portfolio.
The Bank’s total cost of funds continued to decrease, though at a slower pace than in 2020, and was 0.09% for the fourth quarter of 2021 compared to 0.19% a year earlier, and 0.10% for the linked quarter. For the full year 2021 compared to 2020, cost of funds declined 14 basis points. These reductions were primarily the result of the decreases in deposit market rates as well as a reduction in the borrowing rate on the Company’s junior subordinated debentures.
*Noninterest income* declined 48%, or $2.8 million, to $3.0 million for the fourth quarter of 2021, compared to $5.8 million for the fourth quarter of 2020, and declined 24%, or $953,000, from $4.0 million for the third quarter of 2021. For the year ended December 31, 2021, non-interest income was $16.7 million, compared to $20.1 million, for the year ended December 31, 2020. Gain-on-sale of loans decreased $2.6 million for the current quarter to $1.5 million, compared to the fourth quarter a year ago, and declined $93,000 from the preceding quarter. For the full year of 2021, gain-on-sale of loans decreased $4.3 million to $9.4 million from $13.7 million for the year 2020. During the quarter, refinance volume slowed and combined with lower gain on sale margins during 2021 resulted in the decreased gains year-over-year and on a linked quarter basis. Our customers’ use of digital channels has increased during the pandemic with transactions volumes and fees from debit card, credit card and ATM growing. Total fees from these digital channels increased $600,000 on a full year basis from 2020 to 2021 to $2.9 million.
*Noninterest expenses *decreased 12% to $9.3 million for the fourth quarter of 2021, compared to $10.6 million for the fourth quarter of 2020 and declined $1.1 million from $10.4 million for the third quarter of 2021. The decrease from the linked quarter and prior year like-quarter primarily reflects the decrease in lower variable commissions on mortgage banking due to the decline in loan originations during those time periods. For the full year 2021, total noninterest expense increased 3%, or $1.1 million, to $40.7 million compared to $39.6 million for 2020. This increase was attributable to higher FDIC assessments as available credits were fully used in 2020, increased state assessments and higher levels of professional services.
The Bank had $483,000 in income tax expense for the fourth quarter of 2021, down 51% from $991,000 for the fourth quarter of 2021 and up 31% from $368,000 from the preceding quarter. The effective tax rate for the fourth quarter of 2021 was 18.5%, compared to 20.5% for the fourth quarter a year ago, and 12.3% for the third quarter of 2021. Third quarter 2021 tax rate reflected the impact of the tax-exempt BOLI event. These income tax rates include federal corporate income tax and Oregon corporate income tax.
*Balance Sheet Review *
*Total Assets* increased 13% to $1.32 billion, at December 31, 2021, compared to $1.17 billion at December 31, 2020, and decreased 1% from $1.34 billion at September 30, 2021.
*Investment Securities* increased 87% to $233.9 million at December 31, 2021, compared to $125.2 million at December 31, 2020 and grew 5% from $223.6 million at September 30, 2021. The Bank continued to deploy a portion of its excess liquidity into investment securities during the quarter. This included $17.2 million in investment purchases, which was partially offset by $6.0 million in calls, maturities and payments. During 2021, the average adjusted duration of the investment securities portfolio increased from 4.2 to 4.8. At year-end, federal funds sold balances remained at higher than historical levels, primarily as a result of total deposit increases over the last year, as well as the receipt of PPP loan forgiveness payments.
*Gross loan balances* were $629.8 million at December 31, 2021, $732.0 million at December 31, 2020, and $665.6 million at September 30, 2021. Declines in balances were driven primarily by PPP forgiveness of $14.9 million for the current quarter, and $138.5 million during the 2021 as well as several large expected pay-offs from customers selling their businesses occurring at year-end 2021. Commercial real estate (“CRE”), which includes both owner occupied, non-owner occupied and multifamily, totaled 55%, or $343.5, of the loan portfolio, at December 31, 2021. CRE owner occupied decreased to $154.9 million at December 31, 2021, from $156.8 million a year earlier, and increased from $153.5 million at September 30, 2021, while non-owner occupied decreased during the like time-frames. Multi-family increased to $39.9 million at December 31, 2021, from $31.3 million a year earlier, and decreased $117,000 from $39.9 million at September 30, 2021. At December 31, 2021, CRE concentration percentages were 173% of total risk-based capital; well below the regulatory guidance limit of 300%. Commercial and agricultural loans, excluding PPP loans, decreased to $85.3 million compared to $100.8 million year-over-year, in part due to decreased lines of credit utilization, and from $88.8 million the previous quarter end. On the consumer side, loans to finance luxury and classic cars were $48.7 million at December 31, 2021, compared to $46.5 million and $49.7 million at December 31, 2020 and September 30, 2021, respectively. As of December 31, 2021, the luxury and classic car portfolio includes 824 loans with an average balance of $59,000. The portfolio continues to perform adequately, as delinquent and non-accrual loans were 0.11% of the total luxury and classic car portfolio at December 31, 2021.
Loans are predominately originated within the Western Washington and Oregon markets and the Bank’s portfolio is well-diversified by collateral type and by industry with a prudent credit discipline. With the risks associated with the COVID-19 pandemic reducing in severity, early in 2021 the Bank made reasonable adjustments to incrementally relax certain underwriting guidance that had been tightened earlier in the pandemic, for non-owner occupied commercial real estate lending. To manage risk, the Bank oversees new loan origination volume and current loan balances using concentration limits that establish maximum exposure levels by designated industry segment, real estate product types, geography and single borrower limits.
*Credit Quality*
Credit quality continues to remain strong, with nonperforming assets declining $971,000 to $1.4 million or 0.11% of total assets million at December 31, 2021 from $2.4 million or 0.20% of total assets at December 31, 2020, and down $573,000 from the linked quarter at $2.0 million or 0.15%. The decrease year over year was due to the combined results including transfer of credit to other assets, risk rating upgrades, loan payoffs, and loan pay-downs, while quarter over quarter was primarily related to the payoff of 2 loans totaling $540,000. Balances related to non-impaired loans graded watch or other loans especially mentioned, increased $2.1 million during the quarter to $32.8 million from the preceding quarter.
The Bank’s clients continue to successfully manage through the pandemic with only one loan under a COVID-19 payment deferral as of 12/31/2021 with a balance of $74,000. In addition, the Bank continues to monitor several industries that are potentially more vulnerable to the economic and business impacts of the Coronavirus pandemic. Those industries include restaurants, retail trade, and recreation and entertainment. Although these industries are potentially more directly impacted by COVID-19, the bank’s customer base within these sectors covers a wide range of clients, and are managed by experienced management teams who aid in working through these economic challenges. At December 31, 2021, total loans to these industries was $47.9 million, representing 8% of gross loans excluding PPP.
*Stressed Sectors (without PPP)* (Unaudited) Dec 31, 2021 % of Gross Loans (without PPP) (Dollars in thousands) Restaurants 14,482 2 % Recreation, arts and entertainment 5,936 1 % Retail trade 27,460 5 % Total stressed sectors $ 47,878 8 %
*The Allowance for Loan Losses* (“ALL”) was $8.3 million, or 1.37% of gross loans (excluding PPP) at December 31, 2021, compared to $12.1 million, or 2.01% of gross loans, at December 31, 2020, and $8.5 million, or 1.38%, at September 30, 2021. Net charge-offs totaled $80,000 for the fourth quarter of 2021, compared to a net recovery of $66,000 for the fourth quarter a year earlier, and net charge offs of $51,000 for the third quarter of 2021. The Bank reversed $150,000 of loan loss provision during the current quarter compared to a no provision for the like quarter a year ago and a recapture of $500,000 for the linked quarter. The reversal of provision for loan losses during 2021 reflects management’s ongoing assessment of the credit quality of the company’s loan portfolio.
*Total Deposits* increased $150.5 million, or 15%, to $1.2 billion at December 31, 2021, compared to $1.0 billion at December 31, 2020, and decreased $15.9 million, or 1%, from $1.2 billion at September 30, 2021. Increases compared to a year ago are primarily related to SBA PPP loan funds deposited into customer accounts as well as an increase in general client liquidity due to reduced business investment and consumer spending, elevated savings patterns and other stimulus related funds. Noninterest-bearing deposits increased 44%, or $149.4 million, to $492.2 million at December 31, 2021, compared to $342.7 million at December 31, 2020, and declined by $1.4 million from $493.6 million at September 30, 2021. Term deposits declined 11% to $58.7 million at December 31, 2021, from $65.9 million at December 31, 2020, and were down 5% from $61.8 million at September 30, 2021. Time deposits represented a small percentage of total deposits at 5% of deposits at December 31, 2021.
*Shareholder’s Equity *was $117.6 million at December 31, 2021 compared to $114.2 million at December 31, 2020 and $117.5 million at September 30, 2021. Regulatory* c*apital ratios of both the company and the Bank continue to exceed the well-capitalized regulatory thresholds, with the company’s leverage ratio at 8.8% and total risk-based capital ratio at 17.6% as of December 31, 2021. The total risk-based capital ratios of the Company include $13.4 million of junior subordinated debentures, all of which qualified as Tier 1 capital under guidance issued by the Federal Reserve. The company’s tangible book value per share was $10.03 compared to $9.65 a year ago.
*Balance Sheet Overview*
(Unaudited) Dec 31,
2021 Sept 30,
2021 $
Change %
Change Dec 31,
2020 $
Change %
Change
Assets: (Dollars in thousands, except per share data) Cash on hand and in banks $ 18,528 $ 20,003 $ (1,475 ) -7 % $ 12,960 $ 5,568 43 % Interest bearing deposits 320,207 328,717 (8,510 ) -3 % 182,889 137,318 75 % Federal funds sold 50,881 32,796 18,085 55 % 33,024 17,857 54 % Investment securities 233,859 223,610 10,249 5 % 125,184 108,675 87 % Loans held-for-sale 6,104 15,903 (9,799 ) -62 % 34,906 (28,802 ) -83 % Loans, net of deferred fees 628,333 663,219 (34,886 ) -5 % 729,398 (101,065 ) -14 % Allowance for loan losses (8,297 ) (8,527 ) 230 -3 % (12,068 ) 3,771 -31 % Net loans 620,036 654,692 (34,656 ) -5 % 717,330 (97,294 ) -14 % Federal Home Loan Bank and Pacific Coast Bankers' Bank stock, at cost 2,416 2,418 (2 ) % 2,137 279 13 % Other assets 67,935 58,470 9,465 16 % 58,863 9,072 15 % Total assets $ 1,319,966 $ 1,336,609 $ (16,643 ) -1 % $ 1,167,293 $ 152,673 13 %
Liabilities and Shareholders' Equity: Total deposits $ 1,178,940 $ 1,194,867 $ (15,927 ) -1 % $ 1,028,424 $ 150,516 15 % Borrowings 13,806 13,844 (38 ) % 13,956 (150 ) -1 % Accrued interest payable and other liabilities 9,578 10,408 (830 ) -8 % 10,728 (1,150 ) -11 % Shareholders' equity 117,642 117,490 152 % 114,185 3,457 3 % Total liabilities and shareholders' equity $ 1,319,966 $ 1,336,609 $ (16,643 ) -1 % $ 1,167,293 $ 152,673 13 %
Common Shares Outstanding 10,388,267 10,385,133 3,134 % 10,434,533 (46,266 ) %
Book value per common share ^(1) $ 11.32 $ 11.31 $ 0.01 % $ 10.94 $ 0.38 3 %
Tangible book value per common share ^(2) $ 10.03 $ 10.02 $ 0.01 % $ 9.65 $ 0.38 4 %
Gross loans to deposits ratio 53.3 % 55.5 % -2.2 % 70.9 % -17.6 %
^(1) Book value per common share is calculated as the total common shareholders' equity divided by the period ending number of common stock shares outstanding.
^(2) Tangible book value per common share is calculated as the total common shareholders' equity less total intangible assets and liabilities, divided by the period ending number of common stock shares outstanding.
*Income Statement Overview*
(Unaudited) For the Three Months Ended, Dec 31,
2021 Sept 30,
2021 $
Change %
Change Dec 31,
2020 $
Change %
Change (Dollars in thousands, except per share data)
Interest and dividend income $ 9,040 $ 9,188 $ (148 ) -2 % $ 10,219 $ (1,179 ) -12 %
Interest expense 259 284 (25 ) -9 % 492 (233 ) -47 % Net interest income 8,781 8,904 (123 ) -1 % 9,727 (946 ) -10 %
Loan loss provision (150 ) (500 ) 350 -70 % - (150 ) -100 %
Noninterest income 2,998 3,951 (953 ) -24 % 5,756 (2,758 ) -48 %
Noninterest expense 9,325 10,375 (1,050 ) -10 % 10,648 (1,323 ) -12 %
Income before income taxes 2,604 2,980 (376 ) -13 % 4,835 (2,231 ) -46 %
Income tax expense 483 368 115 31 % 991 (508 ) -51 % Net Income $ 2,121 $ 2,612 $ (491 ) -19 % $ 3,844 $ (1,723 ) -45 %
Average common shares outstanding - basic 10,385,414 10,405,340 (19,926 ) % 10,469,896 (84,482 ) -1 %
Average common shares outstanding - diluted 10,412,013 10,435,341 (23,328 ) % 10,496,840 (84,827 ) -1 %
Income per common share Basic $ 0.20 $ 0.25 $ (0.05 ) -20 % $ 0.37 $ (0.17 ) -46 % Diluted $ 0.20 $ 0.25 $ (0.05 ) -20 % $ 0.37 $ (0.17 ) -46 %
Effective tax rate 18.5 % 12.3 % 6.2 % 20.5 % -2.0 % For the Twelve Months Ended, Dec 31,
2021 Dec 31,
2020 $
Change %
Change (Dollars in thousands, except per share data)
Interest and dividend income $ 37,159 $ 39,574 $ (2,415 ) -6 %
Interest expense 1,254 2,380 (1,126 ) -47 % Net interest income 35,905 37,194 (1,289 ) -3 %
Loan loss provision (3,650 ) 3,500 (7,150 ) -204 %
Noninterest income 16,729 20,146 (3,417 ) -17 %
Noninterest expense 40,702 39,594 1,108 3 %
Income before income taxes 15,582 14,246 1,336 9 %
Income tax expense 2,885 2,862 23 1 % Net Income $ 12,697 $ 11,384 $ 1,313 12 %
Average common shares outstanding - basic 10,412,845 10,575,816 (162,971 ) -2 %
Average common shares outstanding - diluted 10,441,415 10,602,816 (161,401 ) -2 %
Income per common share Basic $ 1.22 $ 1.08 $ 0.14 13 % Diluted $ 1.22 $ 1.07 $ 0.15 14 %
Effective tax rate 18.5 % 20.1 % -1.6 %
*Noninterest Income*
(Unaudited) For the Three Months Ended, Dec 31,
2021 Sept 30,
2021 $
Change %
Change Dec 31,
2020 $
Change %
Change (Dollars in thousands)
Service charges on deposits $ 387 $ 365 $ 22 6 % $ 366 $ 21 6 %
Gain on sale of loans, net 1,469 1,562 (93 ) -6 % 4,020 (2,551 ) -63 %
Earnings on bank owned life insurance 129 1,003 (874 ) -87 % 125 4 3 %
Other noninterest income Fee income 1,007 995 12 1 % 1,117 (110 ) -10 % Other 6 26 (20 ) -77 % 128 (122 ) -95 %
Total noninterest income $ 2,998 $ 3,951 $ (953 ) -24 % $ 5,756 $ (2,758 ) -48 % For the Twelve Months Ended, Dec 31,
2021 Dec 31,
2020 $
Change %
Change (Dollars in thousands)
Service charges on deposits $ 1,446 $ 1,544 $ (98 ) -6 %
Gain on sale of loans, net 9,448 13,728 (4,280 ) -31 %
Gain on sale of securities available for sale, net - - - %
Earnings on bank owned life insurance 1,384 498 886 178 %
Other noninterest income Fee income 4,383 4,160 223 5 % Other 68 216 (148 ) -69 %
Total noninterest income $ 16,729 $ 20,146 $ (3,417 ) -17 %
*Noninterest Expense*
(Unaudited) For the Three Months Ended, Dec 31,
2021 Sept 30,
2021 $
Change %
Change Dec 31,
2020 $
Change %
Change (Dollars in thousands)
Salaries and employee benefits $ 6,057 $ 6,577 $ (520 ) -8 % $ 7,257 $ (1,200 ) -17 %
Occupancy 483 503 (20 ) -4 % 516 (33 ) -6 %
Equipment 295 315 (20 ) -6 % 315 (20 ) -6 %
Data processing 813 841 (28 ) -3 % 776 37 5 %
Professional services 171 251 (80 ) -32 % 221 (50 ) -23 %
State and local taxes 197 186 11 6 % 193 4 2 %
FDIC and State assessments 174 124 50 40 % 77 97 126 %
Other noninterest expense: Director fees 69 76 (7 ) -9 % 74 (5 ) -7 % Communication 75 69 6 9 % 76 (1 ) -1 % Advertising 22 31 (9 ) -29 % 58 (36 ) -62 % Professional liability insurance 59 60 (1 ) -2 % 55 4 7 % Amortization 41 48 (7 ) -15 % 122 (81 ) -66 % Other 869 1,294 (425 ) -33 % 908 (39 ) -4 %
Total noninterest expense $ 9,325 $ 10,375 $ (1,050 ) -10 % $ 10,648 $ (1,323 ) -12 % For the Twelve Months Ended, Dec 31,
2021 Dec 31,
2020 $
Change %
Change (Dollars in thousands)
Salaries and employee benefits $ 27,114 $ 27,043 $ 71 %
Occupancy 1,978 2,043 (65 ) -3 %
Equipment 1,244 1,186 58 5 %
Data processing 3,288 3,088 200 6 %
Professional services 952 897 55 6 %
State and local taxes 858 652 206 32 %
FDIC and State assessments 462 127 335 264 %
Other noninterest expense: Director fees 303 313 (10 ) -3 % Communication 288 328 (40 ) -12 % Advertising 141 173 (32 ) -18 % Professional liability insurance 238 220 18 8 % Amortization 304 411 (107 ) -26 % Other 3,532 3,113 419 13 %
Total noninterest expense $ 40,702 $ 39,594 $ 1,108 3 %
*Financial Performance Overview*
(Unaudited) For the Three Months Ended Dec 31,
2021 Sept 30,
2021 Change Dec 31,
2020 Change
*Performance Ratios*
Return on average assets, annualized 0.63 % 0.79 % (0.16 ) 1.31 % (0.68 )
Return on average equity, annualized 7.16 % 8.73 % (1.57 ) 13.46 % (6.30 )
Efficiency ratio ^(1) 79.17 % 80.71 % (1.54 ) 68.77 % 10.40
^(1) Non-interest expense divided by net interest income plus noninterest income. For the Twelve Months Ended, Dec 31,
2021 Dec 31,
2020 Change
*Performance Ratios*
Return on average assets, annualized 1.00 % 1.07 % (0.07 )
Return on average equity, annualized 10.85 % 10.33 % 0.52
Efficiency ratio ^(1) 77.33 % 69.05 % 8.28
^(1) Non-interest expense divided by net interest income plus noninterest income.
*LIQUIDITY**Cash and Cash Equivalents and Investment Securities*
(Unaudited) Dec 31,
2021 % of
Total Sept 30,
2021 % of
Total $
Change %
Change Dec 31,
2020 Total $
Change %
Change (Dollars in thousands)
Cash on hand and in banks $ 18,528 3 % $ 20,003 4 % $ (1,475 ) -7 % $ 12,960 5 % $ 5,568 43 %
Interest bearing deposits 316,957 51 % 325,467 60 % (8,510 ) -3 % 179,639 44 % 137,318 76 %
Other interest earning deposits 3,250 1 % 3,250 1 % - % 3,250 1 % - %
Federal funds sold 50,881 8 % 32,796 5 % 18,085 55 % 33,024 7 % 17,857 54 % Total 389,616 63 % 381,516 70 % 8,100 2 % 228,873 57 % 160,743 70 %
Investment securities: Collateralized mortgage obligations 79,614 13 % 84,530 12 % (4,916 ) -6 % 45,358 16 % 34,256 76 % Mortgage backed securities 20,612 3 % 16,013 2 % 4,599 29 % 11,366 4 % 9,246 81 % U.S. Government and agency securities 59,164 9 % 49,901 4 % 9,263 19 % 8,142 3 % 51,022 627 % Municipal securities 72,335 12 % 71,041 12 % 1,294 2 % 58,228 19 % 14,107 24 % Corporate debt securities 2,010 % 2,016 % (6 ) % 2,016 1 % (6 ) % Equity securities 124 % 109 % 15 14 % 74 % 50 68 % Total 233,859 37 % 223,610 30 % 10,249 5 % 125,184 43 % 108,675 87 %
Total cash equivalents and investment securities $ 623,475 100 % $ 605,126 100 % $ 18,349 3 % $ 354,057 100 % $ 269,418 76 %
Total cash equivalents and investment securities as a percent of total assets 47 % 45 % 30 %
*LOANS*
*Loans by Category*
(Unaudited) Dec 31,
2021 % of
Gross
Loans Sept 30,
2021 % of
Gross
Loans $
Change %
Change Dec 31,
2020 % of
Gross
Loans $
Change %
Change
Commercial: (Dollars in thousands) Commercial and agricultural $ 85,309 14 % $ 88,828 13 % $ (3,519 ) -4 % $ 100,802 14 % $ (15,493 ) -15 % PPP 25,081 4 % 45,558 7 % (20,477 ) -45 % 96,070 13 % (70,989 ) -74 %
Real estate:
Construction and development 28,318 3 % 35,052 5 % (6,734 ) -19 % 23,608 3 % 4,710 20 %
Residential 1-4 family 67,393 11 % 66,771 10 % 622 1 % 77,045 11 % (9,652 ) -13 %
Multi-family 39,854 6 % 39,971 6 % (117 ) % 31,311 4 % 8,543 27 %
Commercial real estate -- owner occupied 154,901 25 % 153,502 23 % 1,399 1 % 156,833 21 % (1,932 ) -1 %
Commercial real estate -- non owner occupied 148,730 24 % 153,641 23 % (4,911 ) -3 % 165,365 23 % (16,635 ) -10 %
Farmland 23,905 4 % 25,140 4 % (1,235 ) -5 % 28,516 4 % (4,611 ) -16 %
Consumer 56,269 9 % 57,112 9 % (843 ) -1 % 52,474 7 % 3,795 7 % Gross Loans 629,760 100 % 665,575 100 % (35,815 ) -5 % 732,024 100 % (102,264 ) -14 % Less: allowance for loan losses (8,297 ) (8,527 ) 230 (12,068 ) 3,771 Less: deferred fees (1,427 ) (2,356 ) 929 (2,626 ) 1,199 Net loans $ 620,036 $ 654,692 $ (34,656 ) $ 717,330 $ (97,294 )
*Loan Concentration*
(Unaudited) Dec 31,
2021 % of Risk
Based
Capital Sept 30,
2021 % of Risk
Based
Capital Change Dec 31,
2020 % of Risk
Based
Capital Change
Commercial: (Dollars in thousands) Commercial and agricultural $ 85,309 69 % $ 88,828 72 % -3 % $ 100,802 85 % -16 % PPP 25,081 20 % 45,558 37 % -17 % 96,070 81 % -61 %
Real estate:
Construction and development 28,318 23 % 35,052 28 % -5 % 23,608 20 % 3 %
Residential 1-4 family 67,393 54 % 66,771 54 % % 77,045 65 % -11 %
Multi-family 39,854 32 % 39,971 32 % % 31,311 27 % 5 %
Commercial real estate -- owner occupied 154,901 125 % 153,502 124 % 1 % 156,833 133 % -8 %
Commercial real estate -- non owner occupied 148,730 120 % 153,641 124 % -4 % 165,365 140 % -20 %
Farmland 23,905 19 % 25,140 20 % -1 % 28,516 24 % -5 %
Consumer 56,269 45 % 57,112 46 % -1 % 52,474 44 % 1 % Gross Loans $ 629,760 $ 665,575 $ 732,024
Regulatory Commercial Real Estate $ 214,910 173 % $ 214,212 173 % % $ 214,928 182 % -9 %
Total Risk Based Capital* $ 124,235 $ 123,472 $ 118,131
*Bank of the Pacific
*DEPOSITS*
*Deposits by Category*
(Unaudited) Dec 31,
2021 % of
Total Sept 30,
2021 % of
Total $
Change %
Change Dec 31,
2020 % of
Total $
Change %
Change (Dollars in thousands)
Interest-bearing demand $ 242,789 21 % $ 274,505 24 % $ (31,716 ) -12 % $ 292,031 29 % $ (49,242 ) -17 %
Money market 210,343 17 % 196,236 16 % 14,107 7 % 190,174 19 % 20,169 11 %
Savings 174,929 15 % 168,786 14 % 6,143 4 % 137,615 13 % 37,314 27 %
Time deposits (CDs) 58,724 5 % 61,786 5 % (3,062 ) -5 % 65,895 6 % (7,171 ) -11 %
Total interest-bearing deposits 686,785 58 % 701,313 59 % (14,528 ) -2 % 685,715 67 % 1,070 %
Non-interest bearing demand 492,155 42 % 493,554 41 % (1,399 ) % 342,709 33 % 149,446 44 %
Total deposits $ 1,178,940 100 % $ 1,194,867 100 % $ (15,927 ) -1 % $ 1,028,424 100 % $ 150,516 15 %
The following table summarizes the capital measures of the Company and the Bank respectively, at the dates listed below.
*Capital Measures*
(unaudited) Dec 31,
2021 Sept 30,
2021 Change Dec 31,
2020 Change Well
Capitalized
Under Prompt
Correction
Action
Regulations
*Pacific Financial Corporation*
Total risk-based capital ratio 17.6 % 17.3 % 0.4 16.0 % 1.6 N/A
Tier 1 risk-based capital ratio 16.4 % 16.1 % 0.4 14.7 % 1.7 N/A
Common equity tier 1 ratio 14.6 % 14.2 % 0.4 13.0 % 1.6 N/A
Leverage ratio 8.8 % 8.8 % - 9.5 % (0.7 ) N/A
Tangible common equity ratio 8.0 % 7.9 % 0.1 8.6 % (0.6 ) N/A
*Bank of the Pacific*
Total risk-based capital ratio 17.6 % 17.2 % 0.4 15.8 % 1.8 10.5 %
Tier 1 risk-based capital ratio 16.4 % 16.0 % 0.4 14.6 % 1.8 8.5 %
Common equity tier 1 ratio 16.4 % 16.0 % 0.4 14.6 % 1.8 7.0 %
Leverage ratio 8.8 % 8.7 % 0.1 9.5 % (0.7 ) 7.5 %
The following tables set forth information regarding average balances of interest-earning assets and interest-bearing liabilities and the resultant yields or cost, and the net interest margin on a tax equivalent basis. Loans held for sale and non-accrual loans are included in total loans.*Net Interest Margin*
(Unaudited)
(Annualized, tax-equivalent basis) For the Three Months Ended, Dec 31,
2021 Sept 30,
2021 $
Change %
Change Dec 31,
2020 $
Change %
Change
*Average Balances* (Dollars in thousands)
Gross loans $ 653,908 $ 670,061 $ (16,153 ) -2 % $ 758,801 $ (104,893 ) -14 %
Gross loans without PPP $ 617,857 $ 613,090 $ 4,767 1 % $ 651,127 $ (33,270 ) -5 %
Loans held for sale $ 12,142 $ 23,270 $ (11,128 ) -48 % $ 31,288 $ (19,146 ) -61 %
Investment securities $ 232,083 $ 188,997 $ 43,086 23 % $ 127,808 $ 104,275 82 %
Federal funds sold & interest bearing deposits in banks $ 363,643 $ 363,327 $ 316 % $ 185,531 $ 178,112 96 %
Total interest-earning assets $ 1,261,776 $ 1,245,655 $ 16,121 1 % $ 1,103,428 $ 158,348 14 %
Non-interest bearing demand deposits $ 501,686 $ 483,479 $ 18,207 4 % $ 353,686 $ 148,000 42 %
Interest bearing deposits $ 685,789 $ 685,650 $ 139 % $ 672,733 $ 13,056 2 %
Total Deposits $ 1,187,475 $ 1,169,129 $ 18,346 2 % $ 1,026,419 $ 161,056 16 %
Borrowings $ 13,819 $ 13,856 $ (37 ) % $ 13,969 $ (150 ) -1 %
Total interest-bearing liabilities $ 699,608 $ 699,506 $ 102 % $ 686,702 $ 12,906 2 %
Total Equity $ 117,600 $ 118,744 $ (1,144 ) -1 % $ 113,306 $ 4,294 4 % For the Three Months Ended, Dec 31,
2021 Sept 30,
2021 Change Dec 31,
2020 Change
Yield on average gross loans ^(1) 4.82 % 4.82 % - 4.88 % (0.06 )
Yield on average gross loans without PPP ^(1) 4.45 % 4.59 % (0.14 ) 4.70 % (0.25 )
Yield on average investment securities ^(1) 1.65 % 1.87 % (0.22 ) 2.31 % (0.66 )
Yield on Fed funds sold & interest bearing deposits in banks 0.16 % 0.16 % - 0.14 % 0.02
Cost of average interest bearing deposits 0.12 % 0.13 % (0.01 ) 0.25 % (0.13 )
Cost of average borrowings 1.69 % 1.72 % (0.03 ) 1.82 % (0.13 )
Cost of average total deposits and borrowings 0.09 % 0.10 % (0.01 ) 0.19 % (0.10 )
Yield on average interest-earning assets 2.87 % 2.96 % (0.09 ) 3.71 % (0.84 )
Cost of average interest-bearing liabilities 0.15 % 0.16 % (0.01 ) 0.28 % (0.13 )
Net interest spread 2.72 % 2.80 % (0.08 ) 3.43 % (0.71 )
Net interest spread without PPP 2.48 % 2.59 % (0.11 ) 3.18 % (0.70 )
Net interest margin ^(1) 2.79 % 2.86 % (0.07 ) 3.53 % (0.74 )
Net interest margin without PPP ^(1) 2.55 % 2.66 % (0.11 ) 3.27 % (0.72 )
^(1) Tax-exempt income has been adjusted to a tax equivalent basis at a rate of 21%. For the Twelve Months Ended, Dec 31,
2021 Dec 31,
2020 $
Change %
Change
*Average Balances* (Dollars in thousands)
Gross loans $ 689,265 $ 746,709 $ (57,444 ) -8 %
Gross loans without PPP $ 616,488 $ 662,875 $ (46,387 ) -7 %
Loans held for sale $ 22,673 $ 21,255 $ 1,418 7 %
Investment securities $ 174,120 $ 117,376 $ 56,744 48 %
Federal funds sold & interest bearing deposits in banks $ 321,287 $ 121,148 $ 200,139 165 %
Interest-earning assets $ 1,207,345 $ 1,006,488 $ 200,857 20 %
Non-interest bearing demand deposits $ 449,853 $ 312,847 $ 137,006 44 %
Interest bearing deposits $ 680,832 $ 619,967 $ 60,865 10 %
Total Deposits $ 1,130,685 $ 932,814 $ 197,871 21 %
Borrowings $ 13,873 $ 15,092 $ (1,219 ) -8 %
Interest-bearing liabilities $ 694,705 $ 635,059 $ 59,646 9 %
Total Equity $ 116,972 $ 110,228 $ 6,744 6 %
Total Deposits excl. Brokered CDs 1,128,343 927,609 200,734 21.6 % For the Twelve Months Ended, Dec 31,
2021 Dec 31,
2020 Change
*Net Interest Margin*
Yield on average gross loans ^(1) 4.81 % 4.80 % 0.01
Yield on average gross loans without PPP ^(1) 4.56 % 4.93 % (0.37 )
Yield on average investment securities ^(1) 1.95 % 2.60 % (0.65 )
Yield on Fed funds sold & interest bearing deposits in banks 0.14 % 0.31 % (0.17 )
Cost of average interest bearing deposits 0.15 % 0.33 % (0.18 )
Cost of average borrowings 1.75 % 2.41 % (0.66 )
Cost of average total deposits and borrowings 0.11 % 0.25 % (0.14 )
Yield on average interest-earning assets 3.11 % 3.97 % (0.86 )
Cost of average interest-bearing liabilities 0.18 % 0.37 % (0.19 )
Net interest spread 2.93 % 3.60 % (0.67 )
Net interest spread without PPP 2.68 % 3.61 % (0.93 )
Net interest margin ^(1) 3.00 % 3.73 % (0.73 )
Net interest margin without PPP ^(1) 2.75 % 3.73 % (0.98 )
^(1) Tax-exempt income has been adjusted to a tax equivalent basis at a rate of 21%.
*Adversely Classified Loans and Securities*
(Unaudited) Dec 31,
2021 Sept 30,
2021 $
Change %
Change Dec 31,
2020 $
Change %
Change (Dollars in thousands)
Rated substandard or worse, but not impaired, beginning of three month period $ 8,785 $ 8,038 $ 747 9 % $ 11,605 $ (2,820 ) -24 %
Addition of previously classified pass graded loans 363 1,379 (1,016 ) -74 % 4,219 (3,856 ) -91 %
Upgrades to pass or other loans especially mentioned status - (185 ) 185 100 % - - %
Moved to nonaccrual - - - % (616 ) 616 100 %
Principal payments, net (168 ) (447 ) 279 -62 % (1,008 ) 840 -83 %
Rated substandard or worse, but not impaired, end of three month period $ 8,980 $ 8,785 $ 195 2 % $ 14,200 $ (5,220 ) -37 %
Impaired 2,854 3,330 (476 ) -14 % 2,561 293 11 %
Total adversely classified loans¹ $ 11,834 $ 12,115 $ (281 ) -2 % $ 16,761 $ (4,927 ) -29 %
Other loans especially mentioned or watch, but not impaired $ 32,848 $ 30,770 $ 2,078 7 % $ 109,324 $ (76,476 ) -70 %
Gross loans (excluding deferred loan fees) $ 629,760 $ 665,575 $ (35,815 ) -5 % $ 732,024 $ (102,264 ) -14 %
Adversely classified loans to gross loans 1.88 % 1.82 % 2.29 %
Adversely classified loans to gross loans without PPP 1.96 % 1.95 % 2.64 %
Allowance for loan losses $ 8,297 $ 8,527 $ (230 ) -3 % $ 12,068 $ (3,771 ) -31 %
Allowance for loan losses as a percentage of adversely classified loans 70.11 % 70.38 % 72.00 %
Allowance for loan losses to total impaired loans 290.71 % 256.07 % 471.22 %
Adversely classified loans to total assets 0.90 % 0.91 % 1.44 %
Delinquent loans to gross loans, not in nonaccrual status ^2 0.01 % 0.02 % 0.06 %
Delinquent loans to gross loans without PPP, not in nonaccrual status 0.01 % 0.02 % 0.07 %
^1 Adversely classified loans are defined as loans having a well-defined weakness or weaknesses related to the borrower's financial capacity or to pledged collateral that may jeopardize the repayment of the debt. They are characterized by the possibility that the Bank may sustain some loss if the deficiencies giving rise to the substandard classification are not corrected. Note that any loans internally rated worse than substandard are included in the impaired loan totals.
^2 Delinquent loans are defined as loans past due 30-90 days and still accruing.
*Nonperforming Assets*
(Unaudited) Dec 31,
2021 Sept 30,
2021 $
Change %
Change Dec 31,
2020 $
Change %
Change (Dollars in thousands)
Total nonaccrual loans, beginning of three month period $ 1,800 $ 1,819 $ (19 ) -1 % $ 1,623 $ 177 11 %
Transfer to performing loans (113 ) - (113 ) -100 % - (113 ) -100 %
Addition of nonaccrual loans - 323 (323 ) -100 % 1,056 (1,056 ) -100 %
Moved to other assets owned - - - % - - %
Principal payments, net (466 ) (308 ) (158 ) 51 % (287 ) (179 ) 62 %
Charge-offs, net - (34 ) 34 100 % - - %
Total nonaccrual loans, end of three month period $ 1,221 $ 1,800 $ (579 ) -32 % $ 2,392 $ (1,171 ) -49 %
Other real estate owned and foreclosed assets 200 194 6 3 % - 200 100 %
Total nonperforming assets $ 1,421 $ 1,994 $ (573 ) -29 % $ 2,392 $ (971 ) -41 %
Total restructured performing loans, beginning of period $ 1,531 $ 1,538 $ (7 ) % $ 174 $ 1,357 780 %
Transfer to nonaccrual loans - - - % - - %
Addition of restructured performing loans 109 - 109 100 % - 109 100 %
Principal payments, net (7 ) (7 ) - % (6 ) (1 ) 17 %
Charge-offs, net - - - % - - %
Total restructured performing loans, end of period $ 1,633 $ 1,531 $ 102 7 % $ 168 $ 1,465 872 %
Accruing loans past due 90 days or more $ - $ - $ - % $ - $ - %
Percentage of nonperforming assets to total assets 0.11 % 0.15 % 0.20 %
Nonperforming loans to total loans 0.19 % 0.27 % 0.33 %
Nonperforming loans to total loans without PPP 0.20 % 0.29 % 0.38 %
*Allowance for Loan Losses*
(Unaudited) For the Three Months Ended, Dec 31,
2021 Sept 30,
2021 $
Change %
Change Dec 31,
2020 $
Change %
Change (Dollars in thousands)
Gross loans outstanding at end of period $ 629,760 $ 665,575 $ (35,815 ) -5 % $ 732,024 $ (102,264 ) -14 %
Average loans outstanding, gross $ 653,908 $ 670,061 $ (16,153 ) -2 % $ 758,801 $ (104,893 ) -14 %
Allowance for loan losses, beginning of period $ 8,527 $ 9,078 $ (551 ) -6 % $ 12,002 $ (3,475 ) -29 %
Commercial - (34 ) 34 -100 % - - %
Commercial Real Estate - - - % - - %
Residential Real Estate - - - % - - %
Consumer (81 ) (21 ) (60 ) 286 % (10 ) (71 ) 710 %
Total charge-offs (81 ) (55 ) (26 ) 47 % (10 ) (71 ) 710 %
Commercial - - - % 14 (14 ) -100 %
Commercial Real Estate - - - % - - %
Residential Real Estate - - - % 63 (63 ) -100 %
Consumer 1 4 (3 ) -75 % (1 ) 2 -200 %
Total recoveries 1 4 (3 ) -75 % 76 (75 ) -99 %
Net recoveries/(charge-offs) (80 ) (51 ) (29 ) 57 % 66 (146 ) -221 %
Provision (benefit) to income (150 ) (500 ) 350 -70 % - (150 ) -100 %
Allowance for loan losses, end of period $ 8,297 $ 8,527 $ (230 ) -3 % $ 12,068 $ (3,771 ) -31 %
Ratio of net loans charged-off to average gross loans outstanding, annualized 0.05 % 0.03 % 0.02 % -0.03 % 0.08 %
Ratio of net loans charged-off to average gross loans outstanding without PPP, annualized 0.05 % 0.03 % 0.02 % -0.04 % 0.09 %
Ratio of allowance for loan losses to gross loans outstanding 1.32 % 1.28 % 0.04 % 1.65 % -0.33 %
Ratio of allowance for loan losses to gross loans without PPP outstanding 1.37 % 1.38 % -0.01 % 2.01 % -0.64 % For the Twelve Months Ended, Dec 31,
2021 Dec 31,
2020 $
Change %
Change (Dollars in thousands)
Gross loans outstanding at end of period $ 629,760 $ 732,024 $ (102,264 ) -14 %
Average loans outstanding, gross $ 689,265 $ 746,709 $ (57,444 ) -8 %
Allowance for loan losses, beginning of period $ 12,068 $ 8,993 $ 3,075 34 %
Commercial (34 ) (433 ) 399 -92 %
Commercial Real Estate - - - %
Residential Real Estate - - - %
Consumer (196 ) (160 ) (36 ) 23 %
Total charge-offs (230 ) (593 ) 363 -61 %
Commercial 42 19 23 121 %
Commercial Real Estate - - - %
Residential Real Estate 49 135 (86 ) -64 %
Consumer 18 14 4 29 %
Total recoveries 109 168 (59 ) -35 %
Net recoveries (charge-offs) (121 ) (425 ) 304 -72 %
Provision (benefit) to income (3,650 ) 3,500 (7,150 ) -204 %
Allowance for loan losses, end of period $ 8,297 $ 12,068 $ (3,771 ) -31 %
Ratio of net loans charged-off to average gross loans outstanding, annualized 0.02 % 0.06 % -0.04 %
Ratio of net loans charged-off to average gross loans outstanding without PPP, annualized 0.02 % 0.06 % -0.04 %
Ratio of allowance for loan losses to gross loans outstanding 1.32 % 1.65 % -0.33 %
Ratio of allowance for loan losses to gross loans without PPP outstanding 1.37 % 2.01 % -0.64 %
*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, 2021, the Company had total assets of $1.32 billion and operated fourteen branches in the communities of Grays Harbor, Pacific, Whatcom, Skagit, Clark and Wahkiakum counties in the State of Washington, and two branches in Clatsop County, Oregon. The Company also operated loan production offices in the communities of Burlington, Washington and Salem and Eugene, 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. These forward-looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from those projected, anticipated or implied, and could negatively impact the Company’s operating and stock price performance. These risks and uncertainties include various risks associated with growing the Bank and expanding the services it provides, development of new business lines and markets, competition in the marketplace, general economic conditions, including the COVID-19 pandemic and government responses thereto, changes in interest rates, extensive and evolving regulation of the banking industry, and many other risks. We undertake no obligation to update or revise any forward-looking statement. Readers of this release are cautioned not to put undue reliance on forward-looking statements.
Contacts: Denise Portmann, President & CEO Carla Tucker, EVP & CFO 360.533.8873