Highlights:
Third quarter net income of $2.2 million; $0.31 per diluted share.
Quarterly deposit growth of $28.7 million.
Quarterly tax equivalent net interest margin of 3.88%, expansion of 0.03% over prior quarter.
Quarterly return on average assets of 1.06%.
FLORENCE, Ore., October 23, 2025--(BUSINESS WIRE)--Oregon Pacific Bancorp (ORPB), the holding company of Oregon Pacific Bank, today reported net income of $2.2 million, or $0.31 per diluted share, for the quarter ended September 30, 2025, compared to $2.0 million or $0.28 per diluted share for the quarter ended June 30, 2025.
"We’re excited to announce our third quarter results, highlighted by robust deposit growth and stronger profitability," said Ron Green, President and CEO. "Our expanded net interest margin, along with disciplined management of noninterest expenses, have contributed to improved financial performance. As we navigate the current economic landscape, we believe the strength of our community bank model—anchored in local relationships and tailored service—is essential for delivering lasting value to our customers and shareholders."
Period-end deposits expanded to $728.4 million, reflecting quarterly growth of $28.7 million, or 16.65%. A portion of this increase was due to deposit activity related to a terminating trust activity in the bank’s trust department. Trust Assets Under Management (AUM) are typically invested in securities or real estate and do not appear on the bank’s balance sheet. However, depending on beneficiaries’ cash requirements and the timing of final distributions, some trust assets may be held in cash. Currently, the cash portion of all trust client balances is held at Oregon Pacific Bank and protected by FDIC insurance through IntraFi’s Insured Cash Sweep (ICS) product. These cash balances are included in the bank’s total interest-bearing demand deposits. As of September 30, 2025, the new terminating trust held $9.0 million in cash. These funds are expected to leave the bank’s balance sheet during the fourth quarter as the trust department completes final distributions.
The bank’s third quarter net interest margin increased to 3.88%, up from 3.85% reported in the second quarter of 2025. The expansion was primarily attributable to an increase in the yield on loans and securities. Despite a 0.25% reduction in the prime rate, which occurred on September 18, 2025, the reduction in yield on variable loans and securities was more than offset by the increase in yield due to new loan production or securities purchases. Quarterly loan production for new and renewed loans totaled $32.1 million, with a weighted average effective rate of 6.99% and a weighted-average repricing life of 1.86 years.
During the third quarter, the bank’s securities portfolio increased by $19.7 million, bringing the total to $162.0 million. The bank purchased $22.1 million in securities during this period, with a weighted average life of 7.88 years and a weighted average yield of 4.89%. These purchases focused on low coupon mortgage-backed securities acquired at discounts, which carry a low risk of extension in a declining interest rate environment. This approach provides the bank with additional protection if rates fall. The purchases were prompted by higher liquidity, primarily resulting from quarterly deposit growth. Notably, this quarter marked the bank’s first securities purchases since the fourth quarter of 2022.
For the third quarter, the provision for credit losses was $505 thousand, while the provision for unfunded commitments was $123 thousand. The increase in provisions was primarily driven by the quarterly update of the economic forecasts used in the bank’s allowance for credit losses model. Due to a less favorable outlook for unemployment and GDP, the model indicated that additional reserves were necessary.
Classified assets on September 30, 2025, reflected an increase of $3.1 million from the second quarter of 2025, defined as loans and loan contingent liabilities internally graded substandard or worse, impaired loans, adversely classified securities and other real estate owned. During the quarter there were three relationships that migrated to substandard, totaling approximately $2.9 million. Two of the relationships are operating businesses experiencing cash flow challenges but are actively realigning expenses and revenues and are being monitored closely. One of the relationships is a $1.0 million asset-based line of credit that is appropriately margined with collateral and cash flow is seasonally associated with the construction industry. The other relationship is a business term loan and owner-occupied commercial real estate totaling approximately $1.0 million and is experiencing challenges with closing down a satellite office. Both relationships are being monitored closely with active plans for improvement, and no losses are anticipated. The third relationship is a nonowner-occupied real estate loan totaling approximately $900 thousand. The loan-to-value is strong at 63% but the property has experienced challenges with leasing a portion of the building. The property is expected to meet annual cash flow coverage requirements by year-end.
For the third quarter, noninterest income reached $2.2 million, reflecting a $99 thousand increase compared to the previous quarter. The most significant change was observed in merchant card services, driven by a seasonal uptick in tourism among the bank’s merchant clients in the coastal community of Florence, Oregon.
In the third quarter of 2025, noninterest expense totaled $6.3 million, reflecting a decrease of $177 thousand compared to the previous quarter. The most significant change occurred in salaries and employee benefits, which declined by $151 thousand. This reduction was primarily driven by a $75 thousand decrease in the officer bonus accrual, following a true-up process that aligned the accrual with updated year-end payout projections.
The bank also completed a true-up of its Health Reimbursement Account (HRA) during the quarter, as it continues to self-fund a portion of employees’ deductibles. With projected year-end utilization tracking below prior accrual levels, the quarterly accrual for the HRA was reduced by $39 thousand.
In addition, the bank saw a decrease in outside services expenses, largely attributable to a change in its managed service provider effective June 30, 2025. During the second quarter, the bank incurred approximately $60 thousand in duplicated expenses to ensure uninterrupted service for clients and employees in preparation for the conversion. These duplicated services were discontinued as of June 30, resulting in cost savings on a linked quarter basis.
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) | ||||||||||||
September 30, | June 30, | September 30, | ||||||||||
2025 | 2025 | 2024 | ||||||||||
ASSETS | ||||||||||||
Cash and due from banks | $ | 9,713 | $ | 11,156 | $ | 12,437 | ||||||
Interest bearing deposits | 42,274 | 30,348 | 25,874 | |||||||||
Securities | 162,012 | 142,357 | 163,275 | |||||||||
Loans, net of deferred fees and costs | 594,695 | 591,795 | 565,492 | |||||||||
Allowance for credit losses | (7,891 | ) | (7,388 | ) | (7,400 | ) | ||||||
Premises and equipment, net | 13,156 | 13,187 | 13,444 | |||||||||
Bank owned life insurance | 10,388 | 10,304 | 9,071 | |||||||||
Other real estate owned | 157 | 157 | - | |||||||||
Deferred tax asset | 4,271 | 4,636 | 4,754 | |||||||||
Other assets | 8,866 | 8,710 | 8,279 | |||||||||
Total assets | $ | 837,641 | $ | 805,262 | $ | 795,226 | ||||||
LIABILITIES | ||||||||||||
Deposits | ||||||||||||
Demand - non-interest bearing | $ | 167,010 | $ | 162,426 | $ | 156,296 | ||||||
Demand - interest bearing | 298,089 | 280,434 | 278,563 | |||||||||
Money market | 139,513 | 133,416 | 136,984 | |||||||||
Savings | 66,901 | 66,665 | 65,456 | |||||||||
Certificates of deposit | 46,882 | 46,799 | 40,288 | |||||||||
Brokered deposits | 10,001 | 10,001 | 18,001 | |||||||||
Total deposits | 728,396 | 699,741 | 695,588 | |||||||||
FHLB borrowings | 7,500 | 7,500 | 7,500 | |||||||||
Junior subordinated debenture | 4,124 | 4,124 | 4,124 | |||||||||
Subordinated debenture | 14,902 | 14,877 | 14,802 | |||||||||
Other liabilities | 8,280 | 7,857 | 8,612 | |||||||||
Total liabilities | 763,202 | 734,099 | 730,626 | |||||||||
STOCKHOLDERS' EQUITY | ||||||||||||
Common stock | 21,809 | 21,732 | 21,491 | |||||||||
Retained earnings | 57,508 | 55,296 | 49,385 | |||||||||
Accumulated other comprehensive | ||||||||||||
income, net of tax | (4,878 | ) | (5,865 | ) | (6,276 | ) | ||||||
Total stockholders' equity | 74,439 | 71,163 | 64,600 | |||||||||
Total liabilities & | ||||||||||||
stockholders' equity | $ | 837,641 | $ | 805,262 | $ | 795,226 | ||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||
Unaudited (dollars in thousands, except per share data) | |||||||||||||||||
THREE MONTHS ENDED | NINE MONTHS ENDED | ||||||||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||
2025 | 2025 | 2024 | 2025 | 2024 | |||||||||||||
INTEREST INCOME | |||||||||||||||||
Loans | $ | 8,552 | $ | 8,286 | $ | 7,746 | $ | 24,697 | $ | 22,437 | |||||||
Securities | 1,353 | 1,262 | 1,477 | 3,895 | 4,531 | ||||||||||||
Other interest income | 500 | 199 | 314 | 959 | 736 | ||||||||||||
Total interest income | 10,405 | 9,747 | 9,537 | 29,551 | 27,704 | ||||||||||||
INTEREST EXPENSE | |||||||||||||||||
Deposits | 2,377 | 2,228 | 2,452 | 6,911 | 6,665 | ||||||||||||
Borrowed funds | 308 | 325 | 319 | 938 | 1,027 | ||||||||||||
Total interest expense | 2,685 | 2,553 | 2,771 | 7,849 | 7,692 | ||||||||||||
NET INTEREST INCOME | 7,720 | 7,194 | 6,766 | 21,702 | 20,012 | ||||||||||||
Provision for credit losses on loans | 505 | 164 | 150 | 669 | 331 | ||||||||||||
Provision (credit) for unfunded commitments | 123 | - | 35 | 123 | 5 | ||||||||||||
Net interest income after | |||||||||||||||||
provision (credit) for credit losses | 7,092 | 7,030 | 6,581 | 20,910 | 19,676 | ||||||||||||
NONINTEREST INCOME | |||||||||||||||||
Trust fee income | 1,137 | 1,093 | 1,030 | 3,428 | 2,867 | ||||||||||||
Service charges | 394 | 390 | 371 | 1,157 | 1,079 | ||||||||||||
Mortgage loan sales | 1 | 1 | 39 | 9 | 132 | ||||||||||||
Merchant card services | 172 | 123 | 157 | 412 | 394 | ||||||||||||
Oregon Pacific Wealth Management income | 366 | 356 | 336 | 1,062 | 952 | ||||||||||||
Other income | 115 | 123 | 105 | 348 | 362 | ||||||||||||
Total noninterest income | 2,185 | 2,086 | 2,038 | 6,416 | 5,786 | ||||||||||||
NONINTEREST EXPENSE | |||||||||||||||||
Salaries and employee benefits | 3,701 | 3,852 | 3,651 | 11,546 | 10,918 | ||||||||||||
Outside services | 709 | 791 | 669 | 2,202 | 2,026 | ||||||||||||
Occupancy & equipment | 533 | 490 | 511 | 1,539 | 1,499 | ||||||||||||
Trust expense | 686 | 678 | 615 | 2,109 | 1,867 | ||||||||||||
Loan and collection, OREO expense | 18 | 18 | 21 | 46 | 55 | ||||||||||||
Advertising | 102 | 124 | 88 | 318 | 239 | ||||||||||||
Supplies and postage | 70 | 65 | 75 | 206 | 222 | ||||||||||||
Other operating expenses | 494 | 472 | 528 | 1,536 | 1,588 | ||||||||||||
Total noninterest expense | 6,313 | 6,490 | 6,158 | 19,502 | 18,414 | ||||||||||||
Income before taxes | 2,964 | 2,626 | 2,461 | 7,824 | 7,048 | ||||||||||||
Provision for income taxes | 752 | 617 | 614 | 1,919 | 1,745 | ||||||||||||
NET INCOME | $ | 2,212 | $ | 2,009 | $ | 1,847 | $ | 5,905 | $ | 5,303 | |||||||
Quarterly Highlights | |||||||||||||||||||
3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | 3rd Quarter | |||||||||||||||
2025 | 2025 | 2025 | 2024 | 2024 | |||||||||||||||
Earnings | |||||||||||||||||||
Interest income | $ | 10,405 | $ | 9,747 | $ | 9,399 | $ | 9,599 | $ | 9,537 | |||||||||
Interest expense | 2,685 | 2,553 | 2,610 | 2,675 | 2,771 | ||||||||||||||
Net interest income | $ | 7,720 | $ | 7,194 | $ | 6,789 | $ | 6,924 | $ | 6,766 | |||||||||
Provision for credit losses on loans | 505 | 164 | - | - | 150 | ||||||||||||||
Provision (credit) for unfunded commitments | 123 | - | - | (30 | ) | 35 | |||||||||||||
Noninterest income | 2,185 | 2,086 | 2,143 | 2,155 | 2,038 | ||||||||||||||
Noninterest expense | 6,313 | 6,490 | 6,698 | 6,147 | 6,158 | ||||||||||||||
Provision for income taxes | 752 | 617 | 550 | 744 | 614 | ||||||||||||||
Net income | $ | 2,212 | $ | 2,009 | $ | 1,684 | $ | 2,218 | $ | 1,847 | |||||||||
Average shares outstanding | 7,163,503 | 7,164,363 | 7,151,365 | 7,136,389 | 7,134,259 | ||||||||||||||
Average diluted shares outstanding | 7,189,245 | 7,190,105 | 7,170,304 | 7,154,126 | 7,153,663 | ||||||||||||||
Period end shares outstanding | 7,163,503 | 7,164,144 | 7,164,470 | 7,138,259 | 7,134,259 | ||||||||||||||
Period end diluted shares outstanding | 7,189,245 | 7,189,886 | 7,190,212 | 7,155,996 | 7,153,663 | ||||||||||||||
Earnings per share | $ | 0.31 | $ | 0.28 | $ | 0.24 | $ | 0.31 | $ | 0.26 | |||||||||
Diluted earnings per share | $ | 0.31 | $ | 0.28 | $ | 0.23 | $ | 0.31 | $ | 0.26 | |||||||||
Performance Ratios | |||||||||||||||||||
Return on average assets | 1.06 | % | 1.02 | % | 0.87 | % | 1.12 | % | 0.93 | % | |||||||||
Return on average equity | 12.58 | % | 11.85 | % | 10.42 | % | 14.01 | % | 12.12 | % | |||||||||
Net interest margin - tax equivalent | 3.88 | % | 3.85 | % | 3.67 | % | 3.66 | % | 3.59 | % | |||||||||
Yield on loans | 5.73 | % | 5.65 | % | 5.53 | % | 5.55 | % | 5.47 | % | |||||||||
Yield on securities | 3.45 | % | 3.39 | % | 3.41 | % | 3.31 | % | 3.48 | % | |||||||||
Cost of deposits | 1.31 | % | 1.31 | % | 1.36 | % | 1.36 | % | 1.41 | % | |||||||||
Cost of interest-bearing liabilities | 1.83 | % | 1.86 | % | 1.88 | % | 1.89 | % | 1.97 | % | |||||||||
Efficiency ratio | 63.73 | % | 69.94 | % | 75.24 | % | 67.71 | % | 70.20 | % | |||||||||
Full-time equivalent employees | 146 | 146 | 148 | 145 | 144 | ||||||||||||||
Capital | |||||||||||||||||||
Tier 1 capital | $ | 91,563 | $ | 91,437 | $ | 90,548 | $ | 89,133 | $ | 87,101 | |||||||||
Leverage ratio | 10.99 | % | 11.52 | % | 11.40 | % | 11.19 | % | 10.96 | % | |||||||||
Common equity tier 1 ratio | 14.65 | % | 14.82 | % | 14.84 | % | 14.86 | % | 14.65 | % | |||||||||
Tier 1 risk based ratio | 14.65 | % | 14.82 | % | 14.84 | % | 14.86 | % | 14.65 | % | |||||||||
Total risk based ratio | 15.91 | % | 16.07 | % | 16.10 | % | 16.11 | % | 15.90 | % | |||||||||
Book value per share | $ | 10.39 | $ | 9.93 | $ | 9.53 | $ | 9.12 | $ | 9.05 | |||||||||
Quarterly Highlights | |||||||||||||||||||
3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | 3rd Quarter | |||||||||||||||
2025 | 2025 | 2025 | 2024 | 2024 | |||||||||||||||
Asset quality | |||||||||||||||||||
Allowance for credit losses (ACL) | $ | 7,891 | $ | 7,388 | $ | 7,400 | $ | 7,400 | $ | 7,400 | |||||||||
Nonperforming loans (NPLs) | $ | 495 | $ | 495 | $ | 801 | $ | 798 | $ | 278 | |||||||||
Nonperforming assets (NPAs) | $ | 652 | $ | 652 | $ | 801 | $ | 798 | $ | 278 | |||||||||
Classified Assets (1) | $ | 14,391 | $ | 11,271 | $ | 10,550 | $ | 8,132 | $ | 10,363 | |||||||||
Net loan charge offs (recoveries) | $ | 1 | $ | 176 | $ | - | $ | - | $ | - | |||||||||
ACL as a percentage of net loans | 1.33 | % | 1.25 | % | 1.27 | % | 1.29 | % | 1.31 | % | |||||||||
ACL as a percentage of NPLs | 1594.14 | % | 1492.53 | % | 923.85 | % | 927.32 | % | 2661.87 | % | |||||||||
Net charge offs (recoveries) | |||||||||||||||||||
to average loans | 0.00 | % | 0.03 | % | 0.00 | % | 0.00 | % | 0.00 | % | |||||||||
Net NPLs as a percentage of | |||||||||||||||||||
total loans | 0.08 | % | 0.08 | % | 0.14 | % | 0.14 | % | 0.05 | % | |||||||||
Nonperforming assets as a | |||||||||||||||||||
percentage of total assets | 0.08 | % | 0.08 | % | 0.10 | % | 0.10 | % | 0.03 | % | |||||||||
Classified Asset Ratio (2) | 14.47 | % | 11.53 | % | 10.77 | % | 8.42 | % | 10.97 | % | |||||||||
Past due as a percentage of | |||||||||||||||||||
total loans | 0.12 | % | 0.08 | % | 0.11 | % | 0.06 | % | 0.24 | % | |||||||||
Off-balance sheet figures | |||||||||||||||||||
Unused credit commitments | $ | 108,753 | $ | 103,063 | $ | 94,843 | $ | 98,616 | $ | 99,229 | |||||||||
Trust assets under management (AUM) | $ | 281,281 | $ | 288,935 | $ | 267,359 | $ | 271,046 | $ | 267,061 | |||||||||
Oregon Pacific Wealth Management AUM | $ | 181,349 | $ | 174,724 | $ | 172,729 | $ | 165,045 | $ | 167,025 | |||||||||
End of period balances | |||||||||||||||||||
Total securities | $ | 162,012 | $ | 142,357 | $ | 145,610 | $ | 155,258 | $ | 163,275 | |||||||||
Total short term deposits | $ | 42,274 | $ | 30,348 | $ | 27,625 | $ | 10,921 | $ | 25,874 | |||||||||
Total loans net of allowance | $ | 586,804 | $ | 584,407 | $ | 575,539 | $ | 564,165 | $ | 558,092 | |||||||||
Total earning assets | $ | 800,930 | $ | 766,445 | $ | 758,119 | $ | 739,677 | $ | 756,571 | |||||||||
Total assets | $ | 837,641 | $ | 805,262 | $ | 797,628 | $ | 776,448 | $ | 795,226 | |||||||||
Total noninterest bearing deposits | $ | 167,010 | $ | 162,426 | $ | 153,956 | $ | 141,719 | $ | 156,296 | |||||||||
Total brokered deposits | $ | 10,001 | $ | 10,001 | $ | 10,001 | $ | 10,001 | $ | 18,001 | |||||||||
Total core deposits | $ | 718,395 | $ | 689,740 | $ | 685,314 | $ | 666,616 | $ | 677,587 | |||||||||
Total deposits | $ | 728,396 | $ | 699,741 | $ | 695,315 | $ | 676,617 | $ | 695,588 | |||||||||
Average balances | |||||||||||||||||||
Total securities | $ | 153,603 | $ | 143,627 | $ | 150,197 | $ | 159,587 | $ | 162,918 | |||||||||
Total short term deposits | $ | 44,423 | $ | 18,044 | $ | 23,766 | $ | 23,654 | $ | 22,887 | |||||||||
Total loans net of allowance | $ | 584,102 | $ | 580,377 | $ | 568,635 | $ | 561,601 | $ | 556,336 | |||||||||
Total earning assets | $ | 791,637 | $ | 751,538 | $ | 751,933 | $ | 754,173 | $ | 751,371 | |||||||||
Total assets | $ | 827,823 | $ | 787,506 | $ | 787,201 | $ | 789,333 | $ | 787,072 | |||||||||
Total noninterest bearing deposits | $ | 166,857 | $ | 158,985 | $ | 149,802 | $ | 152,844 | $ | 158,888 | |||||||||
Total brokered deposits | $ | 10,001 | $ | 10,001 | $ | 10,001 | $ | 12,610 | $ | 17,999 | |||||||||
Total core deposits | $ | 710,376 | $ | 672,711 | $ | 675,953 | $ | 676,900 | $ | 671,949 | |||||||||
Total deposits | $ | 720,377 | $ | 682,712 | $ | 685,954 | $ | 689,510 | $ | 689,948 | |||||||||
(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/20251023221148/en/
Contacts
Editorial Contact:
Ron Green, President & Chief Executive Officer
ron.green@opbc.com
(541) 902-9800