Pacific Continental Corp. (PCBK, Financial) filed Quarterly Report for the period ended 2012-06-30.
Pacific Continental Corporation has a market cap of $166.2 million; its shares were traded at around $9.12 with a P/E ratio of 22.3 and P/S ratio of 2.5. The dividend yield of Pacific Continental Corporation stocks is 2.6%.
Table III shows that year-to-date earning asset yields declined by 61 basis points from the same period last year. This decline in earning asset yields was primarily attributable to: 1) a lower yield on both the loan and securities portfolio; and 2) a continued change in the earning asset mix 2012 when compared to last year as the lower yielding securities portfolio grew in proportion to total earning assets. For the first six months of 2012, average securities available-for sale with a weighted-average tax equivalent yield of 2.47% totaled $369,178 and represented 31% of total average earnings assets and loans yielding 5.99% represented 69% of total average earning assets. This compares to the first six months of 2011, when the average securities portfolio was $275,712 with a weighted average yield of 3.31% and represented 25% of total average earning assets, while loans yielding 6.24% represented 75% of total average earning assets. The decline in the yield on the securities portfolio was due to: 1) new purchases booked at rates lower than the average portfolio; and 2) accelerated prepayment speeds on agency mortgage-back securities accelerating the amortization of premiums. The decline in the yield on loans was primarily due to the following factors: 1) payoffs on higher yielding loans that occurred in the current year; 2) new loan production during the first six month 2012 booked at yields lower than the average portfolio; and 3) a significant increase in rate reductions on existing loans prior to maturity or repricing due to competitive pressure.
The year-to-date June 30, 2012, rate/volume analysis shows that net interest income increased by $163 from the same period last year. Interest income including loan fees through June 30, 2012, declined by $1,429 from last year as higher volumes of earning assets increased interest income by $1,284, which was more than offset by a $2,713 decline in interest income due to lower rates. Interest expense through June 30, 2012, was down $1,592 when compared to the same period last year. The rate/volume analysis shows interest expense on core deposits fell by $1,707 due to both lower volumes and lower rates. Interest expense on wholesale funding increased by $115 as higher volumes increased interest expense by $1,067, which was partially offset by a $952 reduction in interest expense due to lower rates.
Year-to-date June 30, 2012 noninterest income was $2,945, up $131 or 5% from the same period in 2011. The prior years noninterest income included $465 of revenue from the gain on the sale of securities. Excluding this gain on sale of securities, year-to-date June 30, 2012 noninterest income was up $596 or 25% over the same period last year. The increase in 2012 noninterest income when compared to last year was primarily attributable to the $275 in revenue from the BOLI investment and a $316 increase in the other income category, which was primarily generated from rental income on other real estate owned properties. In addition, account service charge revenues increased $31 or 4% over the same period last year.
At June 30, 2012, the securities available-for-sale totaled $387,378, up $20,462 over the prior quarter end, and up $40,836 over December 31, 2011. The securities portfolio represented 29.6% of our total assets at June 30, 2012, up from 25.0% at June 30, 2011. At June 30, 2012, the portfolio had an unrealized taxable gain of $7,501 compared to an unrealized taxable gain of $5,760 at December 31, 2011. During the first six months of 2012, the Company purchased $87,100 in new securities, while receiving $44,338 in cash flow from the portfolio. There were no securities sales during the first six months of 2012. Purchases through June 30, 2012 were high-quality U.S. government agencies, agency mortgage-backed securities and longer-term tax-exempt municipals. At June 30, 2012, taxable and tax-exempt municipal securities were $70,771 and comprised 18.3% of the total portfolio. Management has exercised caution in its purchases of municipals, relying on credit reports, demographic information, population growth, unemployment levels, changes in housing prices, and general fund and reserve balances. The Company does not have significant exposure to any single municipality. The 2012 purchases supported the Companys strategy of positioning the securities portfolio to provide earnings and hedge the balance sheet against a rates-up scenario due to the Companys liability sensitive position. In an unchanged rate environment, the portfolio is expected to produce annual cash flow of approximately $89,400, primarily from the mortgage-backed portion of the portfolio. At June 30, 2012, the portfolio had an average life of 4.0 years and duration of 3.5 years, relatively unchanged from the average life and duration at December 31, 2011. Going forward, the portfolio is expected to increase moderately and purchases will be dependent upon core deposit growth, loan growth, and the Companys interest rate risk position.
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Pacific Continental Corporation has a market cap of $166.2 million; its shares were traded at around $9.12 with a P/E ratio of 22.3 and P/S ratio of 2.5. The dividend yield of Pacific Continental Corporation stocks is 2.6%.
Highlight of Business Operations:
Table I shows that earning asset yields declined by 59 basis points in second quarter 2012 from second quarter 2011 from 5.40% to 4.81%. This decline in earning asset yields was primarily attributable to: 1) a lower yield on both the loan and securities portfolio; and 2) a continued change in the earning asset mix in second quarter 2012 when compared to the same quarter last year as the lower yielding securities portfolio grew in proportion to total earning assets. For the second quarter 2012, average securities available-for sale with a weighted-average yield of 2.35% totaled $377,510 and represented 32% of total average earnings assets and loans yielding 5.96% represented 68% of total average earning assets. This compares to second quarter 2011, when the average securities portfolio was $290,278 with a weighted average yield of 3.28% and represented 26% of total average earning assets, while loans yielding 6.16% represented 74% of total average earning assets.Table III shows that year-to-date earning asset yields declined by 61 basis points from the same period last year. This decline in earning asset yields was primarily attributable to: 1) a lower yield on both the loan and securities portfolio; and 2) a continued change in the earning asset mix 2012 when compared to last year as the lower yielding securities portfolio grew in proportion to total earning assets. For the first six months of 2012, average securities available-for sale with a weighted-average tax equivalent yield of 2.47% totaled $369,178 and represented 31% of total average earnings assets and loans yielding 5.99% represented 69% of total average earning assets. This compares to the first six months of 2011, when the average securities portfolio was $275,712 with a weighted average yield of 3.31% and represented 25% of total average earning assets, while loans yielding 6.24% represented 75% of total average earning assets. The decline in the yield on the securities portfolio was due to: 1) new purchases booked at rates lower than the average portfolio; and 2) accelerated prepayment speeds on agency mortgage-back securities accelerating the amortization of premiums. The decline in the yield on loans was primarily due to the following factors: 1) payoffs on higher yielding loans that occurred in the current year; 2) new loan production during the first six month 2012 booked at yields lower than the average portfolio; and 3) a significant increase in rate reductions on existing loans prior to maturity or repricing due to competitive pressure.
The year-to-date June 30, 2012, rate/volume analysis shows that net interest income increased by $163 from the same period last year. Interest income including loan fees through June 30, 2012, declined by $1,429 from last year as higher volumes of earning assets increased interest income by $1,284, which was more than offset by a $2,713 decline in interest income due to lower rates. Interest expense through June 30, 2012, was down $1,592 when compared to the same period last year. The rate/volume analysis shows interest expense on core deposits fell by $1,707 due to both lower volumes and lower rates. Interest expense on wholesale funding increased by $115 as higher volumes increased interest expense by $1,067, which was partially offset by a $952 reduction in interest expense due to lower rates.
Year-to-date June 30, 2012 noninterest income was $2,945, up $131 or 5% from the same period in 2011. The prior years noninterest income included $465 of revenue from the gain on the sale of securities. Excluding this gain on sale of securities, year-to-date June 30, 2012 noninterest income was up $596 or 25% over the same period last year. The increase in 2012 noninterest income when compared to last year was primarily attributable to the $275 in revenue from the BOLI investment and a $316 increase in the other income category, which was primarily generated from rental income on other real estate owned properties. In addition, account service charge revenues increased $31 or 4% over the same period last year.
At June 30, 2012, the securities available-for-sale totaled $387,378, up $20,462 over the prior quarter end, and up $40,836 over December 31, 2011. The securities portfolio represented 29.6% of our total assets at June 30, 2012, up from 25.0% at June 30, 2011. At June 30, 2012, the portfolio had an unrealized taxable gain of $7,501 compared to an unrealized taxable gain of $5,760 at December 31, 2011. During the first six months of 2012, the Company purchased $87,100 in new securities, while receiving $44,338 in cash flow from the portfolio. There were no securities sales during the first six months of 2012. Purchases through June 30, 2012 were high-quality U.S. government agencies, agency mortgage-backed securities and longer-term tax-exempt municipals. At June 30, 2012, taxable and tax-exempt municipal securities were $70,771 and comprised 18.3% of the total portfolio. Management has exercised caution in its purchases of municipals, relying on credit reports, demographic information, population growth, unemployment levels, changes in housing prices, and general fund and reserve balances. The Company does not have significant exposure to any single municipality. The 2012 purchases supported the Companys strategy of positioning the securities portfolio to provide earnings and hedge the balance sheet against a rates-up scenario due to the Companys liability sensitive position. In an unchanged rate environment, the portfolio is expected to produce annual cash flow of approximately $89,400, primarily from the mortgage-backed portion of the portfolio. At June 30, 2012, the portfolio had an average life of 4.0 years and duration of 3.5 years, relatively unchanged from the average life and duration at December 31, 2011. Going forward, the portfolio is expected to increase moderately and purchases will be dependent upon core deposit growth, loan growth, and the Companys interest rate risk position.
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