--- title: "Pacific Financial Corp Reports Second Quarter 2026 Earnings of $2.9 Million, or $0.29 per Diluted Share; Declares Quarterly Cash Dividend of $0.15 per Share | PFLC Stock News" type: "News" locale: "en" url: "https://longbridge.com/en/news/293759825.md" description: "Pacific Financial Corp reported Q2 2026 net income of $2.9 million ($0.29 diluted EPS), down from $3.1 million in Q1 but up from $2.7 million in Q2 2025. The company declared a quarterly cash dividend of $0.15 per share. Results reflect higher net interest income and non-interest income, offset by increased expenses related to the pending all-stock merger with Banner Corporation." datetime: "2026-07-24T04:30:00.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/293759825.md) - [en](https://longbridge.com/en/news/293759825.md) - [zh-HK](https://longbridge.com/zh-HK/news/293759825.md) generator: "portal-rs" --- # Pacific Financial Corp Reports Second Quarter 2026 Earnings of $2.9 Million, or $0.29 per Diluted Share; Declares Quarterly Cash Dividend of $0.15 per Share | PFLC Stock News See more from StockTitan in Google Search and AI answers.Adds StockTitan as a preferred source · opens Google Add on Google ABERDEEN, Wash., July 24, 2026 (GLOBE NEWSWIRE) -- **Pacific Financial Corporation (OTCQX: PFLC),** (“Pacific Financial”) or (the “Company”), the holding company for Bank of the Pacific (the “Bank”), reported net income of $2.9 million, or $0.29 per diluted share for the second quarter of 2026, compared to $3.1 million, or $0.30 per diluted share for the first quarter of 2026, and $2.7 million, or $0.27 per diluted share for the second quarter of 2025. The current quarter’s net income compared to the prior quarter reflects higher net interest income, lower recapture for credit losses, higher non-interest income and higher non-interest expenses. Non-interest expenses were higher in the current quarter due to expenses related to a pending merger with Banner Corporation. Banner Corporation, the holding company for Banner Bank, and Pacific Financial, the holding company for Bank of the Pacific, jointly announced on April 30, 2026 that they had entered into a definitive merger agreement under the terms of which Banner Corporation will acquire Pacific Financial in an all-stock transaction subject to the terms and conditions set forth in the agreement. Under the terms of the agreement, Pacific Financial shareholders will receive 0.2633 shares of Banner Corporation common stock in exchange for each share of Pacific Financial common stock. The Board of Directors of Pacific Financial declared a quarterly cash dividend of $0.15 per share on July 15, 2026. The dividend will be payable on August 14, 2026 to shareholders of record as of August 4, 2026. The cash dividend was unchanged from the prior quarter and an increase from $0.14 per share paid in the second quarter a year ago. “Our second quarter results demonstrate the resilience of our franchise and the commitment of our employees, who continue to deliver strong financial performance while providing the high level of service our customers expect," said Denise Portmann, President and Chief Executive Officer. "We are encouraged by our results and our disciplined execution of both our day-to-day operations and transition planning which reflects the professionalism of our team and our shared commitment to our customers, employees, shareholders and communities.” **Second Quarter 2026 Financial Highlights:** - Return on average assets (“ROAA”) was 0.92% in the second quarter 2026, compared to 0.97% for the first quarter 2026, and 0.89% for the second quarter 2025. - Return on average equity (“ROAE”) was 9.15%, compared to 9.69% the preceding quarter, and 9.14% the second quarter a year earlier. - Net interest income increased $287,000 to $12.3 million in the second quarter, compared to the prior quarter, and increased $355,000 from $11.9 million in the second quarter of 2025. - Net interest margin (“NIM”) increased to 4.16%, compared to 4.04% the preceding quarter, and decreased from 4.23% for the second quarter a year ago. The increase in the net interest margin in the current period relative to the prior period was related to higher yields on loans and investment securities and lower cost of deposits and borrowings. - A recapture for credit losses of $88,000 was recognized in the second quarter ended June 30, 2026, compared to a recapture of $300,000 in the preceding quarter and a provision of $387,000 in the second quarter a year ago. - Non-interest income increased $266,000 to $1.6 million for the quarter ended June 30, 2026 from $1.3 million the preceding quarter and increased $88,000 from $1.5 million in the second quarter of 2025. - Non-interest expenses increased by $403,000 to $10.2 million for the second quarter from $9.8 million the prior quarter and increased $518,000 from $9.7 million in the second quarter a year ago. The increase relates to increased professional fees and other costs associated with the announced merger with Banner Corporation. Merger related expenses were approximately $678,000 during the quarter ended June 30, 2026. - Gross portfolio loan balances decreased slightly to $770.5 million at June 30, 2026, compared to $771.1 million at March 31, 2026, and increased 3%, or $24.0 million, from $746.5 million one year earlier. - Total deposits decreased $25.8 million to $1.11 billion at June 30, 2026, compared to the end of the previous quarter and increased $42.1 million, or 4%, from one year earlier. - Non-performing assets decreased $380,000 to 0.02% of total assets at June 30, 2026 from 0.05% at the end of the prior quarter. Substandard loans increased $994,000 to $3.8 million while special mention assets decreased $1.3 million to $12.9 million at June 30, 2026 compared to the previous quarter. - Shareholders’ equity decreased $623,000 during the quarter largely due to higher accumulated other comprehensive loss marks on the available-for-sale investment portfolio and payments of dividends. Tangible book value per share was $11.27 at June 30, 2026, an increase of $0.74 per share from $10.53 at June 30, 2025, representing growth in tangible book value per share of 7%. Total dividends paid to shareholders over the past year totaled $0.58 per share. - Bank of the Pacific continues to exceed regulatory well-capitalized requirements. At June 30, 2026, Bank of the Pacific’s estimated leverage ratio was 11.0% and its estimated total risk-based capital ratio was 17.5%. **Balance Sheet Review** **Total assets** decreased $26.0 million to $1.26 billion at June 30, 2026 from $1.29 billion one quarter earlier and increased $49.2 million compared to $1.22 billion at June 30, 2025. **Cash and interest-earning cash** decreased $32.5 million to $94.3 million at June 30, 2026, from $126.9 million at March 31, 2026, and decreased $4.5 million from $98.8 million one year earlier. The decrease in cash and interest-earning cash in the current quarter largely relates to lower deposit funding and the purchase of investment securities. During the second quarter of 2026, liquidity metrics continued to be strong. At June 30, 2026, the Company’s short-term funding sources totaled $592.7 million. This represents a coverage ratio of short-term funds available to uninsured and uncollateralized deposits of 193%. Included in available sources are collateralized credit lines the Company has established with the Federal Home Loan Bank of Des Moines (FHLB) and the Federal Reserve Bank of San Francisco. Additionally, the Bank has $60 million of unsecured borrowing lines from various correspondent banks. There was no balance outstanding on any of these facilities at quarter-end. Uninsured or uncollateralized deposits were 28% of total deposits at June 30, 2026. **Investment securities** increased $5.2 million to $334.9 million at June 30, 2026, compared to $329.7 million at March 31, 2026, and increased $27.1 million compared to a year ago. The increase in investment securities was funded from interest earning cash as available funds were used to purchase higher yielding securities. The largest investment category was collateralized mortgage obligations, which accounted for 57% of the investment portfolio at June 30, 2026 compared to 55% at March 31, 2026 and 52% at June 30, 2025. The yield on the investment portfolio increased 12 basis points during the current quarter to 3.72% from 3.60% the prior quarter and 14 basis points from the same quarter a year ago. The adjusted duration of the investment securities portfolio was 4.1 years at June 30, 2026. **Gross loans balances** decreased $678,000, to $770.5 million at June 30, 2026, compared to $771.1 million at March 31, 2026. Despite the overall decrease in gross loans during the most recent quarter, commercial real estate owner-occupied and non-owner occupied loans increased a total of $15.5 million. Offsetting the increase in commercial reals estate loans were declines in construction, residential 1-4 family, multi-family and consumer loans totaling $17.1 million. The Company’s commercial lending teams remain active and are in discussion with borrowers about the prospects of larger loan limits subsequent to the proposed bank merger with Banner Corporation. The loan portfolio continues to be well-diversified and is collateralized with assets predominantly within the Company’s Western Washington and Oregon markets. Loans classified as commercial real estate for regulatory concentration purposes totaled $280.9 million at June 30, 2026, or 190% of total risk-based capital. **Credit quality:** Nonperforming assets decreased to $283,000, or 0.02% of total assets at June 30, 2026. Classified loans, which are defined as loans rated substandard or worse, totaled 0.49% of portfolio loans at June 30, 2026 compared to 0.36% the prior quarter and 0.22% one year earlier. Special mention decreased $1.3 million to $12.9 million during the quarter, or 1.68% of total loans compared to 1.84% the prior quarter. The Company had zero other real estate owned as of June 30, 2026. **Allowance for credit losses (“ACL”):** ACL-loans decreased $127,000 to $8.9 million, or 1.16% of total portfolio loans at June 30, 2026, compared to 1.17% at March 31, 2026. The ratio of ACL to non-government guaranteed loans was 1.21% at June 30, 2026. The recapture for credit losses of $88,000 recorded in the current quarter compared to a recapture for credit losses of $300,000 in the prior quarter, was largely due to lower loans outstanding, loan composition changes and lower unfunded loan commitments. **Total deposits** decreased $25.8 million to $1.11 billion at June 30, 2026, compared to the previous quarter and increased $42.1 million, or 4% from $1.07 billion one year earlier. The majority of the decrease for the current quarter was due to decreased non-interest-bearing deposits. The decrease in total deposits quarter over quarter reflects a combination of customer-specific events and the current interest rate environment. The current market interest rate environment continues to encourage some customers, including a few municipal customers, to seek higher-yielding short-term alternatives for excess liquidity, resulting in a decrease in traditional deposit accounts. Deposit balances also declined as several commercial customers who sold their businesses in recent periods withdrew excess liquidity from sale proceeds that had been deposited in previous quarters, reducing their ongoing deposit relationship balances. The Bank continues to maintain regular communication with customers and remains focused on maintaining its strong core deposit base through proactive customer outreach and relationship management supporting deposit retention and long-term franchise growth. Year-over-year deposit growth was $42.1 million and primarily reflected an increase in money-market balances. Core deposits represented 87% of total deposits at quarter end, including non-interest-bearing deposits of 37% of deposits, and interest-bearing demand, money market, and savings deposits representing 12%, 28%, and 10% of total deposits, respectively. CDs as a percentage of deposits remained at 13% of total deposits. The high percentage of non-interest-bearing deposits continues to support a lower cost core deposits portfolio. **Shareholders’ equity** was $126.5 million at June 30, 2026, compared to $127.1 million at March 31, 2026, and $118.9 million at June 30, 2025. The decrease in shareholders’ equity during the current quarter was primarily due to $2.1 million increase in unrealized losses (after-tax) on available-for-sale securities and $1.5 million in dividends to shareholders offset by earnings of $2.9 million. Net unrealized losses (after-tax) included in shareholders’ equity on available-for-sale securities were $12.7 million at June 30, 2026, compared to $10.6 million at March 31, 2026, and $13.3 million at June 30, 2025. Book value per common share was $12.61 at June 30, 2026, compared to $12.68 at March 31, 2026, and $11.87 at June 30, 2025. Tangible book value per common share was $11.27 at June 30, 2026, compared to $11.34 at March 31, 2026, and $10.53 at June 30, 2025. The Company’s tangible common equity ratio was 9.0% at June 30, 2026, compared to 8.9% in the prior quarter and 8.8% one year earlier. Regulatory capital ratios of the Bank continue to exceed well-capitalized regulatory thresholds, with the Bank’s leverage ratio at 11.0% and total risk-based capital ratio at 17.5% as of June 30, 2026. These regulatory capital ratios are estimates, pending completion and filing of regulatory reports. **Income Statement Review** **Net interest income** increased by $287,000, to $12.3 million for the second quarter of 2026, and increased $355,000 compared from $11.9 million for the second quarter a year ago. The increase in the current quarter compared to the preceding quarter reflects increased loan and investment yields as well as a decrease in deposit and borrowing costs. The Company’s NIM increased 12 basis points to 4.16% for the second quarter of 2026, from 4.04% the prior quarter and decreased from 4.23% in the second quarter a year ago. Yields on portfolio loans increased 9 basis points during the second quarter to 5.98% from 5.89% the preceding quarter, while yields on investment securities increased 12 basis points to 3.72% from 3.60% over the same time period. The Company continues to actively monitor and manage its cost-of-funds, which benefits from a large balance of non-interest deposits. For the current quarter, the Company’s total cost of funds decreased slightly to 1.08% compared to 1.09% for the preceding quarter. The cost of interest bearing deposits decreased 2 basis points to 1.62% for the current quarter from 1.64% for the preceding quarter and the cost of borrowings decreased 6 basis points to 5.51% for the second quarter ended June 30, 2026 from 5.57% the preceding quarter. **Noninterest income** was $1.6 million for the current quarter compared to $1.3 million the prior quarter and $1.5 million for the second quarter a year earlier. The $266,000 increase compared to the prior quarter was primarily due to the receipt of a death benefit payment of $159,000 related to Bank-owned life insurance. **Noninterest expenses** increased $403,000 to $10.2 million for the second quarter of 2026 compared to $9.8 million for the prior quarter and increased from $9.7 million for the second quarter of 2025. The increase in the current quarter compared to the prior quarter was primarily due to increases in professional fees and other costs associated with the pending merger. Merger related expenses totaled approximately $678,000 during the second quarter ended June 30, 2026. **Income tax expense:** Federal and Oregon state income tax expenses totaled $811,000 for the current quarter, and $714,000 for the preceding quarter, resulting in effective tax rates of 21.9% and 19.0%, respectively. These income tax expenses reflect the benefits of tax-exempt income on tax-exempt loans and investments, affordable housing tax credit financing, and investments in bank-owned life insurance. **FINANCIAL HIGHLIGHTS (unaudited)** **Quarter Ended** **Change From** **Six Months Ended** **Change** (In 000s, except per share data) Jun 30, Mar 31, June 30, Mar 31, 2026 Jun 30, 2025 Jun 30, Jun 30, 2026 2026 2025 $ % $ % 2026 2025 $ % Earnings Ratios & Data Net Income $ 2,891 $ 3,050 $ 2,669 $ (159 ) -5 % $ 222 8 % $ 5,940 $ 5,049 $ 891 18 % Return on average assets 0.92 % 0.97 % 0.89 % -0.05 % 0.03 % 0.94 % 0.85 % 0.09 % Return on average equity 9.15 % 9.69 % 9.14 % -0.54 % 0.01 % 9.41 % 8.82 % 0.59 % Efficiency ratio(1) 73.90 % 73.94 % 72.47 % -0.04 % 1.43 % 73.92 % 74.09 % -0.17 % Net-interest margin %(2) 4.16 % 4.04 % 4.23 % 0.12 % -0.07 % 4.10 % 4.18 % -0.08 % Share Ratios & Data Basic earnings per share $ 0.29 $ 0.30 $ 0.27 $ (0.01 ) -3 % $ 0.02 7 % $ 0.59 $ 0.50 $ 0.09 Diluted earning per share $ 0.29 $ 0.30 $ 0.27 $ (0.01 ) -3 % $ 0.02 7 % $ 0.59 $ 0.50 $ 0.09 Book value per share(3) $ 12.61 $ 12.68 $ 11.87 $ (0.07 ) -1 % $ 0.74 6 % Tangible book value per share(4) $ 11.27 $ 11.34 $ 10.53 $ (0.07 ) -1 % $ 0.74 7 % Common shares outstanding 10,025 10,024 10,020 1 0 % 5 0 % PFLC stock price $ 17.21 $ 12.98 $ 10.69 $ 4.23 33 % $ 6.52 61 % Dividends paid per share $ 0.15 $ 0.15 $ 0.14 $ - 0 % $ 0.01 7 % $ 0.30 $ 0.28 $ 0.02 7 % Balance Sheet Data Assets $ 1,264,628 $ 1,290,658 $ 1,215,468 $ (26,030 ) -2 % $ 49,160 4 % Portfolio Loans $ 770,464 $ 771,142 $ 746,475 $ (678 ) 0 % $ 23,989 3 % Deposits $ 1,112,886 $ 1,138,653 $ 1,070,831 $ (25,767 ) -2 % $ 42,055 4 % Investments $ 334,911 $ 329,742 $ 307,790 $ 5,169 2 % $ 27,121 9 % Shareholders equity $ 126,457 $ 127,080 $ 118,937 $ (623 ) 0 % $ 7,520 6 % Liquidity Ratios Short-term funding to uninsured and uncollateralized deposits 193 % 194 % 190 % -1 % 3 % Uninsured and uncollateralized deposits to total deposits 28 % 28 % 25 % 0 % 3 % Portfolio loans to deposits ratio 69 % 68 % 70 % 1 % -1 % Asset Quality Ratios Non-performing assets to assets 0.02 % 0.05 % 0.04 % -0.03 % -0.02 % Non-accrual loans to portfolio loans 0.04 % 0.09 % 0.06 % -0.05 % -0.02 % Loan losses to avg portfolio loans 0.04 % 0.00 % 0.04 % 0.04 % 0.00 % 0.02 % 0.04 % -0.02 % ACL-loans to portfolio loans 1.16 % 1.17 % 1.24 % -0.01 % -0.08 % Capital Ratios Total risk-based capital ratio (Bank) 17.5 % 17.4 % 16.9 % 0.1 % 0.6 % Tier 1 risk-based capital ratio (Bank) 16.4 % 16.2 % 15.7 % 0.2 % 0.7 % Common equity tier 1 ratio (Bank) 16.4 % 16.2 % 14.2 % 0.2 % 2.2 % Leverage ratio (Bank) 11.0 % 10.7 % 10.9 % 0.3 % 0.1 % Tangible common equity ratio 9.0 % 8.9 % 8.8 % 0.1 % 0.2 % (1)Non-interest expense divided by net interest income plus noninterest income. (2)Tax-exempt income has been adjusted to a tax equivalent basis at a rate of 21%. (3)Book value per share is calculated as the total common shareholders' equity divided by the period ending number of common stock shares outstanding. (4)Tangible book value per share is calculated as the total common shareholders' equity less total intangible assets and liabilities, divided by the period ending number of common stock shares outstanding. **INCOME STATEMENT (unaudited)** **Quarter Ended** **Change From** **Six Months Ended** **Change** ($ in 000s) Jun 30, Mar 31, June 30, Mar 31, 2026 Jun 30, 2025 Jun 30, Jun 30, 2026 2026 2025 $ % $ % 2026 2025 $ % Interest Income Loan interest & fee income $ 11,488 $ 11,200 $ 10,840 $ 288 3 % $ 648 6 % $ 22,688 $ 21,144 $ 1,544 7 % Interest earning cash income 697 933 1,124 (236 ) -25 % (427 ) -38 % 1,630 2,332 (702 ) -30 % Investment income 3,112 2,923 2,728 189 6 % 384 14 % 6,034 5,407 627 12 % Interest Income 15,297 15,056 14,692 241 2 % 605 4 % 30,352 28,883 1,469 5 % Interest Expense Deposits interest expense 2,843 2,889 2,571 (46 ) -2 % 272 11 % 5,732 5,265 467 9 % Other borrowings interest expense 184 184 206 - 0 % (22 ) -11 % 369 412 (43 ) -10 % Interest Expense 3,027 3,073 2,777 (46 ) -1 % 250 9 % 6,101 5,677 424 7 % Net Interest Income 12,270 11,983 11,915 287 2 % 355 3 % 24,251 23,206 1,045 5 % Provision (recapture) for credit losses (88 ) (300 ) 387 212 -71 % (475 ) -123 % (388 ) 470 (858 ) -183 % Net Interest Income after provision 12,358 12,283 11,528 75 1 % 830 7 % 24,639 22,736 1,903 8 % Non-Interest Income Fees and service charges 1,208 1,102 1,293 106 10 % (85 ) -7 % 2,310 2,410 (100 ) -4 % Gain on sale of investments, net - - - - 0 % - 0 % - (165 ) 165 -100 % Gain on sale of loans, net - - - - 0 % - 0 % - (2 ) 2 -100 % Income on bank-owned insurance 361 201 191 160 80 % 170 89 % 562 383 179 47 % Other non-interest income 6 6 3 - 0 % 3 100 % 11 15 (4 ) -27 % Non-Interest Income 1,575 1,309 1,487 266 20 % 88 6 % 2,883 2,641 242 9 % Non-Interest Expense Salaries and employee benefits 6,250 6,201 6,103 49 1 % 147 2 % 12,450 12,072 378 3 % Occupancy 583 624 618 (41 ) -7 % (35 ) -6 % 1,207 1,209 (2 ) 0 % Furniture, Fixtures & Equipment 307 323 305 (16 ) -5 % 2 1 % 630 606 24 4 % Marketing & donations 139 138 157 1 1 % (18 ) -11 % 277 310 (33 ) -11 % Professional services 697 297 254 400 135 % 443 174 % 993 553 440 80 % Data Processing & IT 1,179 1,258 1,250 (79 ) -6 % (71 ) -6 % 2,437 2,468 (31 ) -1 % Other 1,076 987 1,026 89 9 % 50 5 % 2,063 1,932 131 7 % Non-Interest Expense 10,231 9,828 9,713 403 4 % 518 5 % 20,057 19,150 907 5 % Income before income taxes 3,702 3,764 3,302 (62 ) -2 % 400 12 % 7,465 6,227 1,238 20 % Provision for income taxes 811 714 633 97 14 % 178 28 % 1,525 1,178 347 29 % Net Income $ 2,891 $ 3,050 $ 2,669 $ (159 ) -5 % 222 8 % $ 5,940 $ 5,049 $ 891 18 % Effective tax rate 21.9 % 19.0 % 19.2 % 2.9 % 2.7 % 20.4 % 18.9 % 1.5 % **BALANCE SHEET (unaudited)** **Period Ended** **Change from** **% of Total** ($ in 000s) Jun 30, Mar 31, Jun 30, Mar 31, 2026 Jun 30, 2025 Jun 30, Mar 31, Jun 30, 2026 2026 2025 $ % $ % 2026 2026 2025 Assets Cash on hand and in banks $ 14,689 $ 17,119 $ 19,305 $ (2,430 ) -14 % $ (4,616 ) -24 % 1 % 1 % 2 % Interest-earning cash 79,621 109,735 79,520 (30,114 ) -27 % 101 0 % 7 % 9 % 7 % Investment securities 334,911 329,742 307,790 5,169 2 % 27,121 9 % 26 % 26 % 25 % Portfolio Loans, net of deferred fees 769,943 770,605 745,834 (662 ) 0 % 24,109 3 % 61 % 60 % 61 % Allowance for credit losses (8,914 ) (9,041 ) (9,222 ) 127 -1 % 308 -3 % -1 % -1 % -1 % Net loans 761,029 761,564 736,612 (535 ) 0 % 24,417 3 % 60 % 59 % 61 % Premises & equipment 15,671 16,039 16,494 (368 ) -2 % (823 ) -5 % 1 % 1 % 1 % Goodwill & Other Intangibles 13,435 13,435 13,435 - 0 % - 0 % 1 % 1 % 1 % Bank-owned life Insurance 28,655 29,024 28,395 (369 ) -1 % 260 1 % 2 % 2 % 2 % Other assets 16,617 14,000 13,917 2,617 19 % 2,700 19 % 2 % 1 % 2 % Total Assets $ 1,264,628 $ 1,290,658 $ 1,215,468 $ (26,030 ) -2 % $ 49,160 4 % 100 % 100 % 100 % Liabilities & Shareholders' Equity Deposits $ 1,112,886 $ 1,138,653 $ 1,070,831 $ (25,767 ) -2 % $ 42,055 4 % 88 % 88 % 88 % Borrowings 13,403 13,403 13,403 - 0 % - 0 % 1 % 1 % 1 % Other liabilities 11,882 11,522 12,297 360 3 % (415 ) -3 % 1 % 1 % 1 % Common Stock & Retained Earnings 139,138 137,704 132,251 1,434 1 % 6,887 5 % 11 % 11 % 11 % Accumulated Other Comprehensive Loss (12,681 ) (10,624 ) (13,314 ) (2,057 ) 19 % 633 -5 % -1 % -1 % -1 % Shareholders' equity 126,457 127,080 118,937 (623 ) 0 % 7,520 6 % 10 % 10 % 10 % Liabilities & Shareholders' Equity $ 1,264,628 $ 1,290,658 $ 1,215,468 $ (26,030 ) -2 % $ 49,160 4 % 100 % 100 % 100 % **INVESTMENT COMPOSITION & CONCENTRATIONS (unaudited)** **Period Ended** **Change from** **% of Total** ($ in 000s) Jun 30, Mar 31, Jun 30, Mar 31, 2026 Jun 30, 2025 Jun 30, Mar 31, Jun 30, 2026 2026 2025 $ % $ % 2026 2026 2025 Investment Securities Collateralized mortgage obligations $ 189,605 $ 182,632 $ 159,386 $ 6,973 4 % $ 30,219 19 % 57 % 55 % 52 % Mortgage backed securities 44,010 45,402 47,094 (1,392 ) -3 % (3,084 ) -7 % 13 % 14 % 15 % U.S. Government and agency securities 58,199 58,502 58,668 (303 ) -1 % (469 ) -1 % 17 % 18 % 19 % Municipal securities 43,097 43,206 42,642 (109 ) 0 % 455 1 % 13 % 13 % 14 % Investment Securities $ 334,911 $ 329,742 $ 307,790 $ 5,169 2 % $ 27,121 9 % 100 % 100 % 100 % Held to maturity securities $ 26,645 $ 27,462 $ 29,950 $ (817 ) -3 % $ (3,305 ) -11 % 8 % 8 % 10 % Available for sale securities $ 308,266 $ 302,280 $ 277,840 $ 5,986 2 % $ 30,426 11 % 92 % 92 % 90 % Government & Agency securities $ 291,792 $ 286,513 $ 265,122 $ 5,279 2 % $ 26,670 10 % 87 % 87 % 86 % AAA, AA, A rated securities $ 42,456 $ 42,565 $ 41,979 $ (109 ) 0 % $ 477 1 % 13 % 13 % 14 % Non-rated securities $ 663 $ 664 $ 689 $ (1 ) 0 % $ (26 ) -4 % 0 % 0 % 0 % AFS Unrealized Gain (Loss) $ (16,335 ) $ (13,701 ) $ (17,375 ) $ (2,634 ) 19 % $ 1,040 -6 % -5 % -4 % -6 % **LIQUIDITY (unaudited)** **Period Ended** **Change from** **% of Deposits** ($ in 000s) Jun 30, Mar 31, Jun 30, Mar 31, 2026 Jun 30, 2025 Jun 30, Mar 31, Jun 30, 2026 2026 2025 $ % $ % 2026 2026 2025 Short-term Funding Cash and cash equivalents $ 85,897 $ 115,697 $ 84,957 $ (29,800 ) -26 % $ 940 1 % 8 % 10 % 8 % Unencumbered AFS Securities 147,986 145,295 114,077 2,691 2 % 33,909 30 % 13 % 13 % 11 % Secured lines of Credit (FHLB, FRB) 358,841 365,356 317,651 (6,515 ) -2 % 41,190 13 % 32 % 32 % 30 % Short-term Funding $ 592,724 $ 626,348 $ 516,685 $ (33,624 ) -5 % $ 76,039 15 % 53 % 55 % 49 % **PORTFOLIO LOAN COMPOSITION & CONCENTRATIONS (unaudited)** **Period Ended** **Change from** **% of Total** ($ in 000s) Jun 30, Mar 31, Jun 30, Mar 31, 2026 Jun 30, 2025 Jun 30, Mar 31, Jun 30, 2026 2026 2025 $ % $ % 2026 2026 2025 Portfolio Loans Commercial & agriculture $ 106,219 $ 106,019 $ 74,831 $ 200 0 % $ 31,388 42 % 14 % 14 % 10 % Real estate: Construction and development 28,781 34,563 30,869 (5,782 ) -17 % (2,088 ) -7 % 4 % 4 % 4 % Residential 1-4 family 103,114 105,301 103,233 (2,187 ) -2 % (119 ) 0 % 13 % 14 % 14 % Multi-family 74,853 80,628 78,409 (5,775 ) -7 % (3,556 ) -5 % 10 % 11 % 10 % CRE -- owner occupied 199,428 188,640 193,127 10,788 6 % 6,301 3 % 26 % 24 % 26 % CRE -- non owner occupied 180,518 175,789 177,860 4,729 3 % 2,658 1 % 23 % 23 % 24 % Farmland 31,034 30,292 27,202 742 2 % 3,832 14 % 4 % 4 % 4 % Consumer 46,517 49,910 60,944 (3,393 ) -7 % (14,427 ) -24 % 6 % 6 % 8 % Portfolio Loans 770,464 771,142 746,475 $ (678 ) 0 % $ 23,989 3 % 100 % 100 % 100 % Less: ACL (8,914 ) (9,041 ) (9,222 ) Less: deferred fees (521 ) (537 ) (641 ) Net loans $ 761,029 $ 761,564 $ 736,612 Regulatory Commercial Real Estate $ 280,875 $ 288,400 $ 283,527 $ (7,525 ) -3 % $ (2,652 ) -1 % 36 % 37 % 38 % Total Risk Based Capital(1) $ 147,503 $ 145,993 $ 140,987 $ 1,510 1 % $ 6,516 5 % CRE to Risk Based Capital(1) 190 % 198 % 201 % -8 % -11 % **CRE--MULTI-FAMILY & NON OWNER OCCUPIED COMPOSITION (unaudited)** **Period Ended** **Change from** **% of Total** ($ in 000s) Jun 30, Mar 31, Jun 30, Mar 31, 2026 Jun 30, 2025 Jun 30, Mar 31, Jun 30, 2026 2026 2025 $ % $ % 2026 2026 2025 Collateral Composition(2) Multifamily $ 74,819 $ 82,569 $ 78,760 $ (7,750 ) -9 % $ (3,941 ) -5 % 28 % 30 % 30 % Hospitality 32,149 32,927 32,573 (778 ) -2 % (424 ) -1 % 12 % 12 % 12 % Industrial 29,991 20,175 14,430 9,816 49 % 15,561 108 % 11 % 8 % 5 % Retail 29,367 31,582 36,384 (2,215 ) -7 % (7,017 ) -19 % 11 % 12 % 14 % Mixed Use 27,072 28,125 24,480 (1,053 ) -4 % 2,592 11 % 10 % 11 % 9 % Mini Storage 22,623 23,607 22,488 (984 ) -4 % 135 1 % 9 % 9 % 8 % Office 19,018 19,249 26,034 (231 ) -1 % (7,016 ) -27 % 7 % 7 % 10 % Special Purpose 17,167 17,202 17,342 (35 ) 0 % (175 ) -1 % 7 % 6 % 7 % Warehouse 9,225 9,403 10,394 (178 ) -2 % (1,169 ) -11 % 4 % 4 % 4 % Other 2,097 2,123 2,620 (26 ) -1 % (523 ) -20 % 1 % 1 % 1 % Total $ 263,528 $ 266,962 $ 265,505 $ (3,434 ) -1 % $ (1,977 ) -1 % 100 % 100 % 100 % (1)Bank of the Pacific (2)Includes loans in process of construction **CREDIT QUALITY (unaudited)** **Period Ended** **Change from** ($ in 000s) Jun 30, Mar 31, Jun 30, Mar 31, 2026 Jun 30, 2025 2026 2026 2025 $ % $ % Risk Rating Distribution Pass $ 753,791 $ 754,182 $ 735,200 $ (391 ) 0 % $ 18,591 3 % Special Mention 12,915 14,196 9,637 (1,281 ) -9 % 3,278 34 % Substandard 3,758 2,764 1,638 994 36 % 2,120 129 % Portfolio Loans $ 770,464 $ 771,142 $ 746,475 $ (678 ) 0 % $ 23,989 3 % Nonperforming Assets Nonaccruing loans 283 663 468 $ (380 ) -57 % (185 ) -40 % Other real estate owned - - - - 0 % - 0 % Nonperforming Assets $ 283 $ 663 $ 468 $ (380 ) -57 % (185 ) -40 % Credit Metrics Classified loans(1)to portfolio loans 0.49 % 0.36 % 0.22 % 0.13 % 0.27 % ACL to classified loans(1) 237.20 % 327.10 % 563.00 % -89.90 % -325.80 % Loans past due 30+ days to portfolio loans(2) 0.14 % 0.03 % 0.02 % 0.11 % 0.12 % Nonperforming assets to total assets 0.02 % 0.05 % 0.04 % -0.03 % -0.02 % Nonaccruing loans to portfolio loans 0.04 % 0.09 % 0.06 % -0.05 % -0.02 % (1)Classified loans include loans rated substandard or worse and are defined as loans having a well-defined weakness or weaknesses related to the borrower's financial capacity or to pledged collateral that may jeopardize the repayment of the debt. They are characterized by the possibility that the Bank may sustain some loss if the deficiencies giving rise to the substandard classification are not corrected. (2)Excludes non-accrual loans **DEPOSIT COMPOSITION & CONCENTRATIONS (unaudited)** **Period Ended** **Change from** **% of Total** ($ in 000s) Jun 30, Mar 31, Jun 30, Mar 31, 2026 Jun 30, 2025 Jun 30, Mar 31, Jun 30, 2026 2026 2025 $ % $ % 2026 2026 2025 Deposits Interest-bearing demand $ 132,289 $ 129,481 $ 207,208 $ 2,808 2 % $ (74,919 ) -36 % 12 % 11 % 19 % Money market 314,419 315,130 200,251 (711 ) 0 % 114,168 57 % 28 % 28 % 19 % Savings 106,887 113,036 111,577 (6,149 ) -5 % (4,690 ) -4 % 10 % 10 % 10 % Time deposits (CDs) 148,205 148,131 131,729 74 0 % 16,476 13 % 13 % 13 % 12 % Total interest-bearing deposits 701,800 705,778 650,765 (3,978 ) -1 % 51,035 8 % 63 % 62 % 60 % Non-interest bearing demand 411,086 432,875 420,066 (21,789 ) -5 % (8,980 ) -2 % 37 % 38 % 40 % Total deposits $ 1,112,886 $ 1,138,653 $ 1,070,831 $ (25,767 ) -2 % $ 42,055 4 % 100 % 100 % 100 % Insured Deposits $ 617,050 $ 634,395 $ 618,964 $ (17,345 ) -3 % $ (1,914 ) 0 % 55 % 56 % 58 % Collateralized Deposits 188,767 180,730 179,399 8,037 4 % 9,368 5 % 17 % 16 % 17 % Uninsured Deposits 307,069 323,528 272,468 (16,459 ) -5 % 34,601 13 % 28 % 28 % 25 % Total Deposits $ 1,112,886 $ 1,138,653 $ 1,070,831 $ (25,767 ) -2 % $ 42,055 4 % 100 % 100 % 100 % Consumer Deposits $ 497,095 $ 517,179 $ 462,889 $ (20,084 ) -4 % $ 34,206 7 % 45 % 45 % 43 % Business Deposits 416,562 430,072 417,675 (13,510 ) -3 % (1,113 ) 0 % 37 % 38 % 39 % Public Deposits 199,229 191,402 190,267 7,827 4 % 8,962 5 % 18 % 17 % 18 % Total Deposits $ 1,112,886 $ 1,138,653 $ 1,070,831 $ (25,767 ) -2 % $ 42,055 4 % 100 % 100 % 100 % **NET INTEREST MARGIN (unaudited)** **Quarter Ended** **Change From** **Six Months Ended** **Change** ($ in 000s) Jun 30, Mar 31, June 30, Mar 31, 2026 Jun 30, 2025 Jun 30, Jun 30, 2026 2026 2025 $ % $ % 2026 2025 $ % Average Interest Bearing Balances Portfolio loans $ 771,426 $ 772,754 $ 723,472 $ (1,328 ) 0 % $ 47,954 7 % $ 772,087 $ 712,334 $ 59,753 8 % Investment securities $ 338,569 $ 331,999 $ 308,774 $ 6,570 2 % $ 29,795 10 % $ 335,303 $ 306,934 $ 28,369 9 % Interest-earning cash $ 75,480 $ 102,289 $ 101,170 $ (26,809 ) -26 % $ (25,690 ) -25 % $ 88,811 $ 105,563 $ (16,752 ) -16 % Total interest-earning assets $ 1,185,475 $ 1,207,042 $ 1,133,416 $ (21,567 ) -2 % $ 52,059 5 % $ 1,196,201 $ 1,124,831 $ 71,370 6 % Non-interest bearing deposits $ 405,782 $ 413,375 $ 389,453 $ (7,593 ) -2 % $ 16,329 4 % $ 409,557 $ 383,992 $ 25,565 7 % Interest-bearing deposits $ 703,391 $ 714,456 $ 677,660 $ (11,065 ) -2 % $ 25,731 4 % $ 708,893 $ 676,398 $ 32,495 5 % Total Deposits $ 1,109,173 $ 1,127,831 $ 1,067,113 $ (18,658 ) -2 % $ 42,060 4 % $ 1,118,450 $ 1,060,390 $ 58,060 5 % Borrowings $ 13,403 $ 13,403 $ 13,403 $ - 0 % $ - 0 % $ 13,403 $ 13,403 $ - 0 % Total interest-bearing liabilities $ 716,794 $ 727,859 $ 691,063 $ (11,065 ) -2 % $ 25,731 4 % $ 722,296 $ 689,801 $ 32,495 5 % Yield / Cost $(1) Portfolio loans $ 11,495 $ 11,215 $ 10,854 $ 280 2 % $ 641 6 % $ 22,711 $ 21,170 $ 1,541 7 % Investment securities $ 3,138 $ 2,950 $ 2,755 $ 188 6 % $ 383 14 % $ 6,089 $ 5,465 $ 624 11 % Interest-earning cash $ 697 $ 933 $ 1,124 $ (236 ) -25 % $ (427 ) -38 % $ 1,630 $ 2,332 $ (702 ) -30 % Total interest-earning assets $ 15,330 $ 15,098 $ 14,733 $ 232 2 % $ 597 4 % $ 30,430 $ 28,966 $ 1,464 5 % Interest-bearing deposits $ 2,843 $ 2,889 $ 2,571 $ (46 ) -2 % $ 272 11 % $ 5,732 $ 5,265 $ 467 9 % Borrowings $ 184 $ 184 $ 206 $ - 0 % $ (22 ) -11 % $ 369 $ 412 $ (43 ) -10 % Total interest-bearing liabilities $ 3,027 $ 3,073 $ 2,777 $ (46 ) -1 % $ 250 9 % $ 6,101 $ 5,677 $ 424 7 % Net interest income $ 12,303 $ 12,025 $ 11,956 $ 278 2 % $ 347 3 % $ 24,329 $ 23,289 $ 1,040 4 % Yield / Cost %(1) Yield on portfolio loans 5.98 % 5.89 % 6.02 % 0.09 % -0.04 % 5.93 % 5.99 % -0.06 % Yield on investment securities 3.72 % 3.60 % 3.58 % 0.12 % 0.14 % 3.66 % 3.59 % 0.07 % Yield on interest-earning cash 3.70 % 3.70 % 4.46 % 0.00 % -0.76 % 3.70 % 4.45 % -0.75 % Cost of interest-bearing deposits 1.62 % 1.64 % 1.52 % -0.02 % 0.10 % 1.63 % 1.57 % 0.06 % Cost of borrowings 5.51 % 5.57 % 6.16 % -0.06 % -0.65 % 5.55 % 6.20 % -0.65 % Cost of deposits and borrowings 1.08 % 1.09 % 1.03 % -0.01 % 0.05 % 1.09 % 1.07 % 0.02 % Yield on interest-earning assets 5.19 % 5.07 % 5.21 % 0.12 % -0.02 % 5.13 % 5.19 % -0.06 % Cost of interest-bearing liabilities 1.69 % 1.71 % 1.61 % -0.02 % 0.08 % 1.70 % 1.66 % 0.04 % Net interest spread 3.50 % 3.36 % 3.60 % 0.14 % -0.10 % 3.43 % 3.53 % -0.10 % Net interest margin 4.16 % 4.04 % 4.23 % 0.12 % -0.07 % 4.10 % 4.18 % -0.08 % (1)Tax-exempt income has been adjusted to a tax equivalent basis at a rate of 21%. **ALLOWANCE FOR CREDIT LOSSES (ACL) (unaudited)** **Quarter Ended** **Change From** **Six Months Ended** **Change** ($ in 000s) Jun 30, Mar 31, June 30, Mar 31, 2026 Jun 30, 2025 Jun 30, Jun 30, 2026 2026 2025 $ % $ % 2026 2025 $ % ACL-Loans Beginning of period balance $ 9,041 $ 9,292 $ 8,890 $ (251 ) -3 % $ 151 2 % $ 9,292 $ 8,851 $ 441 5 % Charge-offs (71 ) (6 ) (76 ) (65 ) 1083 % 5 -7 % (77 ) (151 ) 74 -49 % Recoveries 1 5 1 (4 ) -80 % - 0 % 6 1 5 500 % Net (charge-off) recovery (70 ) (1 ) (75 ) (69 ) 6900 % 5 -7 % (71 ) (150 ) 79 -53 % Provision (recapture) (57 ) (250 ) 407 193 -77 % (464 ) -114 % (307 ) 521 (828 ) -159 % End of period balance $ 8,914 $ 9,041 $ 9,222 $ (127 ) -1 % $ (308 ) -3 % $ 8,914 $ 9,222 $ (308 ) -3 % Net charge-off (recovery) to average portfolio loans 0.04 % 0.00 % 0.04 % 0.04 % 0.00 % 0.02 % 0.04 % -0.02 % ACL-loans to portfolio loans 1.16 % 1.17 % 1.24 % -0.01 % -0.08 % 1.16 % 1.24 % -0.08 % ACL-Unfunded Loans Commitments Beginning of period balance $ 518 $ 568 $ 509 $ (50 ) -9 % $ 9 2 % $ 568 $ 540 $ 28 5 % Provision (recapture) (31 ) (50 ) (20 ) 19 -38 % (11 ) 55 % (81 ) (51 ) (30 ) 59 % End of period balance $ 487 $ 518 $ 489 $ (31 ) -6 % $ (2 ) 0 % $ 487 $ 489 $ (2 ) 0 % **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 June 30, 2026, the Company had total assets of $1.26 billion and operated fifteen branches in the communities of Grays Harbor, Pacific, Thurston, Whatcom, Skagit, Clark and Wahkiakum counties in the State of Washington, and three branches in the communities of Clatsop and Clackamas counties in Oregon. The Company also operated loan production offices in the communities of Burlington, Washington and Salem, Oregon. Visit the Company’s website at www.bankofthepacific.com. Member FDIC. ***Cautions Concerning Forward-Looking Statements*** *This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other laws, including all statements in this release that are not historical facts or that relate to future plans or events or projected results of Pacific Financial Corporation and its wholly-owned subsidiary, Bank of the Pacific. Such statements are based on information available at the time of communication and are based on current beliefs and expectations of the Company’s management and are subject to risks and uncertainties, many of which are beyond our control, which could cause actual events or results to differ materially from those projected, anticipated or implied, and could negatively impact the Company’s operating and stock price performance. These risks and uncertainties include various risks associated with growing the Bank and expanding the services it provides, development of new business lines and markets, competition in the marketplace, general economic conditions, changes in interest rates, extensive and evolving regulation of the banking industry, the pending merger with Banner Corporation, and many other risks. Any forward-looking statements in this communication are based on information at the time the statement is made. We undertake no obligation to update or revise any forward-looking statement. Readers of this release are cautioned not to put undue reliance on forward-looking statements.* **CONTACTS:* *DENISE PORTMANN, PRESIDENT & CEO CARLA TUCKER, EVP & CFO 360.533.8873** ### Related Stocks - [BANR.US](https://longbridge.com/en/quote/BANR.US.md) ## Related News & Research - [Commercial National Financial declares $0.15 dividend](https://longbridge.com/en/news/296590930.md) - [Cincinnati Financial declares $0.094 dividend](https://longbridge.com/en/news/296651808.md) - [US Financial 15 Split declares $0.08 monthly preferred share distribution](https://longbridge.com/en/news/296360227.md) - [Financial 15 Split declares monthly distribution of $0.13 per Class A share, $0.06 per preferred share](https://longbridge.com/en/news/296360149.md) - [Prudential Financial, Inc. to Participate in 2026 Barclays Global Financial Services Conference; Live Webcast Available | PRU Stock News](https://longbridge.com/en/news/296617633.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**