Pacific Continental (PCBK) Reports Increased Loan Loss Provisions; Sees Q2 Loss of $0.70/Share
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Pacific Continental Corporation (Nasdaq: PCBK) today reported an increase in the level of loan loss provisioning, which will be recognized in the second quarter 2009. The increase in loan loss provision is the result of continuing weakness in the Pacific Northwest residential real estate markets. The increased expense is primarily isolated to the residential construction portfolio and is particularly associated with three credits: two lot development projects in the Seattle and Portland markets, both of which were discussed in the Company's first quarter conference call, and a recently completed office building also in Seattle. The remaining credit portfolios, including commercial loans, loans related to dental professionals as well as investor and owner-occupied commercial real estate portfolios, continue to perform well with few exceptions as reported in previous conference calls.
In combination with the FDIC special assessment accrual of $500 thousand and write-downs on other real estate owned of approximately $436 thousand, the second quarter loan loss provision of approximately $19.2 million suggests a second quarter loss of approximately $9.0 million, or ($0.70) per diluted share, and a year-to-date loss of approximately $6.1 million, or ($0.47) per diluted share. The Company's June 30 risk-based capital ratio, a regulator defined indicator of strength, will be approximately 11.40%, which exceeds the "well-capitalized" designation of 10.0%.
Bank management acted to recognize approximately $11.7 million in loan write downs during the second quarter. The bank's June 30, 2009 nonperforming assets, including other real estate owned, are expected to range between $31.5 million to $32.5 million and result in a nonperforming assets to total assets ratio of 2.80% to 2.90%, a ratio in line with management's expectations expressed in the April 18, 2009 first quarter conference call that suggested non-performing assets would range between 2.9% and 3.5%. The June 30, 2009 reserve for loan loss as a percent of loans is expected to approximate 1.95%.
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