Oregon Pacific Bancorp (ORPB), the holding company of Oregon
Pacific Bank, today reported financial results for the second
quarter ended, June 30, 2024.
Highlights:
- Second quarter net income of $1.9 million; $0.26 per diluted
share.
- Quarterly tax equivalent net interest margin of 3.65%.
- Quarterly cost of funds of 1.30%.
- Quarterly loan growth of $12.1 million or 8.80%
annualized.
Net income for the quarter ended June 30, 2024, was $1.9
million, or $0.26 per diluted share compared to $1.6 million or
$0.22 per diluted share for the quarter ended March 31, 2024. “We
are pleased with the growth in our core earnings,” said Ron Green,
President and Chief Executive Officer. “Expansion of our net
interest margin coupled with growth in noninterest income centered
around our trust, Oregon Pacific Wealth Management investment
advisory services and mortgage income continue to trend positively.
We remain uniquely positioned to offer these additional services
and are optimistic about future opportunities for the Bank to
attract clients who desire the traditional community banking
model.”
During the quarter the Bank’s net interest margin expanded to
3.65%, up from 3.59% in the first quarter. The expansion was
primarily driven by an increase in the asset yields, which grew
from 4.88% in the first quarter of 2024 to 5.03% in the second
quarter of 2024. This occurred in part due to the shift in asset
mix as investment securities matured and shifted into higher
yielding loans and fed funds, with that increase more than
offsetting the growth in the cost of interest-bearing
liabilities.
Period-end loans, net of deferred loan origination fees, totaled
$563 million, representing quarterly growth of $12.1 million, or
8.80% annualized. The second quarter loan yield grew to 5.43%,
representing an increase of 0.13% over the prior quarter as new
loan production continued to occur at a rate higher than the
existing portfolio yield. Quarterly loan production for new and
renewed loans totaled $31.6 million, with a weighted average
effective rate of 7.50% and a weighted-average repricing life of
4.22 years.
During the second quarter ended June 30, 2024, the bank
experienced an increase in classified assets, defined as loans and
loan contingent liabilities internally graded substandard or worse,
impaired loans, adversely classified securities and other real
estate owned, totaling $2 million. This occurred primarily due to
the downgrade of one commercial and industrial lending
relationship, totaling $2 million, into substandard classification.
The company is a manufacturer that has been impacted by a slowdown
in the RV industry but is shifting focus onto non-RV related
industries while working to reduce expenses. The relationship is
comprised of three loans secured by business assets and is
monitored monthly. All three loans continue to pay as agreed and no
losses are currently anticipated.
During the quarter, the Bank recorded a recovery of $91
thousand, attributable to a residential real estate loan which was
charged off in 2011. In addition to the recovery, the Bank also
recorded a $141 thousand provision for credit losses, which
resulted in a quarterly increase in the allowance for credit losses
of $232 thousand. The increase was primarily attributable to
quarterly loan growth.
Period-end deposits totaled $677.5 million and represented
quarterly contraction of $18.0 million. While the balances
contracted on a quarterly basis, total deposits still reflect
growth of $17.0 million since December 31, 2023. The Bank’s cost of
funds experienced a small increase to 1.30%, up from 1.20% in the
first quarter. The Bank is continuing to evaluate deposit pricing
and will likely see quarterly increases in cost of funds based on
competitive rate pressures to retain deposits.
Noninterest income totaled $2.0 million during the second
quarter 2024 and represented growth of $171 thousand from first
quarter 2024. The largest increase occurred in the trust fee income
category, which grew $37 thousand from the prior quarter. This
increase was primarily tied to growth in Assets Under Management,
which increased $12.2 million as the Bank continues to onboard new
trust clients. The Bank also experienced growth of $63 thousand in
the other income category compared to the first quarter 2024. This
growth was partially attributable to a one-time incentive payment
of $34 thousand through Visa associated with our debit card
processing. This payment is not anticipated to be received in
future periods. During the second quarter 2024 noninterest expense
totaled $6.1 million, representing a decrease of $130 thousand from
the quarter ended March 31, 2024. The largest expense fluctuation
occurred in the outside services category as the cost of the
financial statement audit in the first quarter of $69 thousand was
not repeated during the second quarter.
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 Oregon Pacific Bank’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, loan
prepayments, investment purchases, investment yields, strategic
focus, capital position, liquidity, credit quality, special asset
liquidation, noninterest income, noninterest expense and credit
quality trends. 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
Oregon Pacific Bank’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. Oregon Pacific Bancorp
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.
CONSOLIDATED BALANCE SHEETS Unaudited (dollars in thousands)
June 30, March 31, December 31,
June 30,
2024
2024
2023
2023
ASSETS Cash and due from banks
$
6,505
$
10,464
$
8,106
$
10,951
Interest bearing deposits
10,559
25,851
6,246
22,967
Securities
162,483
170,740
177,599
181,530
Loans, net of deferred fees and costs
563,002
550,945
536,662
510,264
Allowance for credit losses
(7,250
)
(7,018
)
(6,975
)
(6,887
)
Premises and equipment, net
13,403
13,346
13,470
11,708
Bank owned life insurance
9,002
8,933
8,866
8,738
Deferred tax asset
5,784
5,742
5,758
5,978
Other assets
8,354
8,432
11,254
7,555
Total assets
$
771,842
$
787,435
$
760,986
$
752,804
LIABILITIES Deposits Demand - non-interest bearing
$
154,226
$
155,038
$
155,693
$
159,184
Demand - interest bearing
285,802
297,288
272,968
265,550
Money market
119,863
129,154
129,543
152,046
Savings
64,458
63,230
66,254
75,196
Certificates of deposit
53,126
50,735
35,991
25,696
Total deposits
677,475
695,445
660,449
677,672
FHLB borrowings
7,500
7,500
17,000
-
Junior subordinated debenture
4,124
4,124
4,124
4,124
Subordinated debenture
14,777
14,752
14,727
14,677
Other liabilities
8,101
7,611
8,304
6,482
Total liabilities
711,977
729,432
704,604
702,955
STOCKHOLDERS' EQUITY Common stock
21,388
21,280
21,291
21,135
Retained earnings
47,538
45,672
44,083
39,516
Accumulated other comprehensive income, net of tax
(9,061
)
(8,949
)
(8,992
)
(10,802
)
Total stockholders' equity
59,865
58,003
56,382
49,849
Total liabilities & stockholders' equity
$
771,842
$
787,435
$
760,986
$
752,804
CONSOLIDATED STATEMENTS OF INCOME Unaudited (dollars in
thousands, except per share data)
THREE MONTHS ENDED SIX
MONTHS ENDED June 30, March 31, June 30,
June 30, June 30,
2024
2024
2023
2024
2023
INTEREST INCOME Loans
$
7,548
$
7,143
$
6,249
$
14,691
$
12,073
Securities
1,515
1,539
1,641
3,054
3,328
Other interest income
224
198
316
422
717
Total interest income
9,287
8,880
8,206
18,167
16,118
INTEREST EXPENSE Deposits
2,214
1,999
1,311
4,213
2,169
Borrowed funds
335
372
229
707
455
Total interest expense
2,549
2,371
1,540
4,920
2,624
NET INTEREST INCOME
6,738
6,509
6,666
13,247
13,494
Provision (credit) for credit losses on loans
141
40
121
181
70
Provision (credit) for unfunded commitments
10
(40
)
(107
)
(30
)
(107
)
Net interest income after provision (credit) for credit losses
6,587
6,509
6,652
13,096
13,531
NONINTEREST INCOME Trust fee income
937
900
943
1,837
1,827
Service charges
361
347
342
708
667
Mortgage loan sales
61
32
28
93
66
Merchant card services
125
112
122
237
225
Oregon Pacific Wealth Management income
316
301
275
617
527
Other income
160
97
82
257
181
Total noninterest income
1,960
1,789
1,792
3,749
3,493
NONINTEREST EXPENSE Salaries and employee benefits
3,634
3,633
3,082
7,267
6,211
Outside services
639
718
588
1,357
1,140
Occupancy & equipment
478
510
451
988
899
Trust expense
635
617
533
1,252
1,014
Loan and collection, OREO expense
20
14
27
34
51
Advertising
96
55
145
151
247
Supplies and postage
68
79
79
147
167
Other operating expenses
516
590
537
1,106
1,026
Total noninterest expense
6,086
6,216
5,442
12,302
10,755
Income before taxes
2,461
2,082
3,002
4,543
6,269
Provision for income taxes
595
492
771
1,087
1,605
NET INCOME
$
1,866
$
1,590
$
2,231
$
3,456
$
4,664
Quarterly Highlights 2nd Quarter 1st
Quarter 4th Quarter 3rd Quarter 2nd
Quarter
2024
2024
2023
2023
2023
Earnings Interest income
$
9,287
$
8,880
$
8,651
$
8,528
$
8,206
Interest expense
2,549
2,371
2,056
1,714
1,540
Net interest income
$
6,738
$
6,509
$
6,595
$
6,814
$
6,666
Provision (credit) for credit losses on loans
141
40
80
-
121
Provision (credit) for unfunded commitments
10
(40
)
(150
)
(123
)
(107
)
Noninterest income
1,960
1,789
1,857
1,805
1,792
Noninterest expense
6,086
6,216
5,683
5,575
5,442
Provision for income taxes
595
492
614
820
771
Net income
$
1,866
$
1,590
$
2,225
$
2,347
$
2,231
Average shares outstanding
7,135,227
7,115,125
7,094,180
7,094,180
7,097,866
Average diluted shares outstanding
7,154,631
7,128,148
7,100,680
7,100,680
7,104,366
Period end shares outstanding
7,135,227
7,135,615
7,094,180
7,094,180
7,094,562
Period end diluted shares outstanding
7,154,631
7,155,019
7,100,680
7,100,680
7,101,062
Earnings per share
$
0.26
$
0.22
$
0.31
$
0.33
$
0.31
Diluted earnings per share
$
0.26
$
0.22
$
0.31
$
0.33
$
0.31
Performance Ratios Return on average assets
0.96
%
0.83
%
1.17
%
1.22
%
1.19
%
Return on average equity
13.01
%
11.43
%
17.45
%
18.65
%
18.12
%
Net interest margin - tax equivalent
3.65
%
3.59
%
3.64
%
3.74
%
3.72
%
Yield on loans
5.43
%
5.30
%
5.15
%
5.07
%
4.96
%
Yield on securities
3.62
%
3.54
%
3.53
%
3.43
%
3.37
%
Cost of deposits
1.30
%
1.20
%
1.00
%
0.86
%
0.78
%
Cost of interest-bearing liabilities
1.83
%
1.74
%
1.52
%
1.26
%
1.15
%
Efficiency ratio
70.00
%
74.91
%
67.25
%
64.73
%
64.34
%
Full-time equivalent employees
143
142
134
131
128
Capital Tier 1 capital
$
85,416
$
83,699
$
82,278
$
80,082
$
77,917
Leverage ratio
10.82
%
10.78
%
10.70
%
10.40
%
10.24
%
Common equity tier 1 ratio
14.36
%
14.33
%
14.28
%
14.34
%
14.18
%
Tier 1 risk based ratio
14.36
%
14.33
%
14.28
%
14.34
%
14.18
%
Total risk based ratio
15.61
%
15.58
%
15.53
%
15.59
%
15.43
%
Book value per share
$
8.39
$
8.13
$
7.95
$
7.13
$
7.03
Quarterly Highlights 2nd Quarter 1st
Quarter 4th Quarter 3rd Quarter 2nd
Quarter
2024
2024
2023
2023
2023
Asset quality Allowance for credit losses (ACL)
$
7,250
$
7,018
$
6,975
$
6,892
$
6,887
Nonperforming loans (NPLs)
$
275
$
113
$
443
$
456
$
178
Nonperforming assets (NPAs)
$
275
$
113
$
443
$
456
$
178
Classified Assets (1)
$
11,778
$
9,668
$
9,186
$
4,252
$
3,750
Net loan charge offs (recoveries)
$
(91
)
$
(3
)
$
(3
)
$
(6
)
$
(3
)
ACL as a percentage of net loans
1.29
%
1.27
%
1.30
%
1.31
%
1.35
%
ACL as a percentage of NPLs
2636.36
%
6210.62
%
1574.49
%
1511.40
%
3869.10
%
Net charge offs (recoveries) to average loans
-0.02
%
0.00
%
0.00
%
0.00
%
0.00
%
Net NPLs as a percentage of total loans
0.05
%
0.02
%
0.08
%
0.09
%
0.03
%
Nonperforming assets as a percentage of total assets
0.04
%
0.01
%
0.06
%
0.06
%
0.02
%
Classified Asset Ratio (2)
12.63
%
10.66
%
10.29
%
4.89
%
4.42
%
Past due as a percentage of total loans
0.19
%
0.29
%
0.15
%
0.12
%
0.12
%
Off-balance sheet figures Unused credit commitments
$
97,763
$
99,498
$
105,900
$
103,163
$
97,111
Trust assets under management (AUM)
$
254,380
$
242,222
$
226,695
$
219,268
$
222,880
Oregon Pacific Wealth Management AUM
$
159,201
$
153,228
$
147,159
$
140,153
$
141,990
End of period balances Total securities
$
162,483
$
170,740
$
177,599
$
176,593
$
181,530
Total short term deposits
$
10,559
$
25,851
$
6,246
$
11,216
$
22,967
Total loans net of allowance
$
555,752
$
543,927
$
529,687
$
518,339
$
503,377
Total earning assets
$
737,936
$
749,463
$
722,855
$
715,273
$
716,793
Total assets
$
771,842
$
787,435
$
760,986
$
752,488
$
752,804
Total noninterest bearing deposits
$
154,226
$
155,038
$
155,693
$
160,272
$
159,184
Total deposits
$
677,475
$
695,445
$
660,449
$
669,917
$
677,672
Average balances Total securities
$
166,077
$
172,769
$
176,066
$
180,344
$
190,818
Total short term deposits
$
16,430
$
14,663
$
12,637
$
27,510
$
24,616
Total loans net of allowance
$
552,490
$
535,251
$
522,432
$
508,385
$
498,069
Total earning assets
$
744,050
$
731,735
$
720,383
$
725,179
$
722,420
Total assets
$
780,003
$
767,409
$
756,740
$
759,592
$
751,845
Total noninterest bearing deposits
$
156,858
$
156,513
$
156,729
$
163,669
$
154,949
Total deposits
$
685,983
$
672,409
$
668,296
$
681,749
$
675,954
(1) Classified assets 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.
(2) 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 bank Tier 1 capital, plus the
allowance for credit losses.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240718981482/en/
Editorial Contact: Ron Green, President & Chief Executive
Officer ron.green@opbc.com (541) 902-9800