Business Lending, Lower Costs Fuel Pacific Continental's 4Q

Pacific Continental (PCBK) in Eugene, Ore., took advantage of accelerated business lending and lower expenses to post another profitable quarter.

 

Lower credit losses also contributed to fourth-quarter earnings of $3.4 million for the $1.3 billion-asset company lost $852,000 a year earlier.

 

Noninterest income rose 5.3% from a year earlier, to $1.4 million, and included income from bank-owned life insurance and card fees.

 

Net interest income fell 4.5% from a year earlier, to $12.5 million. Loans rose 6% from the fourth quarter of 2011, to $854 million, because of more lending to health care professionals. The net interest margin compressed 48 basis points from a year earlier, to 4.11%, because of lower loan yields.

 

Noninterest expense fell 9% from a year earlier, to $8.9 million, from a year earlier, reflecting lower spending for legal fees and other costs tied to collecting troubled loans. Pacific's efficiency ratio improved to 64.26% from 67.50% a year earlier.

 

The company had $62,000 in recoveries in the fourth quarter, compared to $7.3 million in net chargeoffs a year earlier.

 

Pacific also said Wednesday that it would boost its cash dividend by a penny, to 8 cents a share. The company also declared a special dividend of 8 cents a share for holders of record on Jan. 31. "Accelerating loan and deposit growth, plus continued credit quality improvement suggest consistent and strengthening financial performance that supports the board's decision to increase the cash dividend," Hal Brown, Pacific's chief executive, said in a press release.