Oregon Pacific Bancorp (ORPB), the holding company of Oregon Pacific Bank, today reported net income of $2.75 million, or $0.38 per diluted share, for the quarter ended September 30, 2026, compared to $2.76 million or $0.38 per diluted share for the quarter ended June 30, 2026.

“Our strong capital position enabled us to retire $15 million in subordinated debt,” said Amber White, President and CEO. “The retirement will reduce future borrowing costs and will allow more resources to support organic growth and long-term shareholder returns.”

In September 2021, $15.0 million of subordinated debt was issued at a fixed rate of 3.375% to strengthen capital and preserve flexibility for strategic opportunities. The Tier 1 leverage ratio was 9.70% immediately after issuance on September 30, 2021, and had increased to 10.74% as of September 30, 2026. With the debt scheduled to reprice at quarter end to three-month SOFR plus 2.66% (approximately 6.34%), management elected to retire the obligation based upon a strong capital position and capacity to support future growth via retained earnings. The retirement of subordinated debt avoids an estimated adverse impact of $505 thousand in additional annual interest expense and approximately $0.04 to $0.05 per diluted share. Funds to retire the subordinated debt came from the Bank’s net income previously transferred to the holding company beginning in April 2025. Accordingly, the September 30, 2026, transaction had no further impact on the Bank’s regulatory capital ratios and is expected to support future capital and earnings growth.

Period-end deposits totaled $728.0 million, reflecting quarterly growth of $19.3 million. Noninterest-bearing demand accounts increased $19.0 million, representing essentially all the quarterly net deposit growth. Money market balances increased $5.5 million in the third quarter and were offset by declines in interest bearing checking and certificate accounts of $3.9 million and $2.1 million, respectively. This improved deposit balance mix as of September 30, 2026, contributed to cost of deposits falling from 1.19% to 1.16% quarter over quarter. Total interest expense for the third quarter was $2.44 million versus prior quarter of $2.38 million, reflecting a 2.35% increase in expense accompanied by 2.72% growth in total period-ending deposits for the quarter.

Classified assets on September 30, 2026, totaled $14.9 million, and reflected a decrease of $4.6 million from the second quarter of 2026. Classified assets are defined as loans and loan contingent liabilities internally graded substandard or worse, impaired loans, adversely classified securities and other real estate owned. The decrease in classified assets was attributable to an upgrade of a $2.7 million owner-occupied nonprofit relationship, two nonaccrual loans that paid off totaling $2.1 million, and $384 thousand of reduced exposure on a $7.0 million multi-family construction project. The multi-family construction project is approximately 90% complete but has experienced significant delays and overages that remain under active credit administration review. This relationship was moved to nonaccrual during the quarter, accompanied by a $194 thousand interest income reversal. Potential resolutions for this relationship include foreclosure, receivership, or external refinance as the situation continues to be closely monitored.

The Bank’s third quarter net interest margin was essentially flat, decreasing slightly from 4.19% to 4.18% quarter over quarter. The reversal of $194 thousand in interest income related to a loan migrated to nonaccrual was responsible for 9 bps of adverse impact in the quarter, indicating continued quarterly net interest margin expansion on a normalized basis. Quarterly loan production for new and renewed loans totaled $46.4 million, with a weighted average repricing life of 1.78 years as compared to $36.7 million and 2.08 years, respectively, for the prior quarter. Strong loan production outpaced $20.2 million in loan payoffs, resulting in outstanding loan growth of $2.8 million in the third quarter. New and renewed loans had a weighted average effective yield of 7.15% versus loan payoffs at 6.24%. The quarter over quarter yield on loans improved from 5.89% to 5.93% despite the noted interest reversal, indicating a continuation of positive trends within earning assets as the yield on new loan originations outperform that of principal reductions.

The two loans within classified assets that paid off during the third quarter represented $1.6 million and $500 thousand of nonaccrual asset backed and owner-occupied commercial real estate balances as of June 30, 2026, respectively. The payoff of the asset backed loan resulted in a $153 thousand recovery of previous charge off, while the payoff on the owner-occupied commercial real estate loan offset all principal and interest due. Past due loans as of September 30, 2026, were 0.25% of the total loan portfolio which represents a material decrease from 1.30% in the prior quarter. As of September 30, 2026, past due totals remain at a modest level and are consistent with historical trends.

In the third quarter of 2026, noninterest expense totaled $7.0 million, reflecting an increase of $304 thousand compared to the previous quarter. The largest expense fluctuation occurred within the salaries and employee benefits category, which increased $171 thousand from the prior quarter, followed by $106 thousand and $75 thousand quarter over quarter increases in outside services and other operating expenses, respectively. The increase in salaries was $135 thousand and primarily reflected strategic hiring for previously vacant positions, including the successful build-out of a Portland/Metro production team led by Portland Market President Katherine Ledson. Subsequent to Katherine’s hiring, the Bank also welcomed three additional commercial lenders in the Portland Market, Callum Auer, Anthony Tomashek, and Evan Harris, each bringing outstanding experience and robust knowledge to the Portland Market. Vicki Gray, who has been with OPB since 2018, also joined the Executive Leadership Team as Lane County Market President, strengthening local leadership and advancing the Bank’s commitment to delivering exceptional service and building lasting customer relationships. Related to the broader staffing additions completed during the quarter, outside services included $121 thousand in one-time recruiter fees.

CONSOLIDATED BALANCE SHEETS

Unaudited (dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

June 30,

 

September 30,

 

 

 

2026

 

 

 

2026

 

 

 

2025

 
ASSETS
Cash and due from banks

$

3,009

 

$

11,998

 

$

9,713

 
Interest bearing deposits

 

53,713

 

 

32,862

 

 

42,274

 
Securities

 

131,406

 

 

141,523

 

 

162,012

 
Loans, net of deferred fees and costs

 

612,513

 

 

609,720

 

 

594,695

 
Allowance for credit losses

 

(8,406

)

 

(8,048

)

 

(7,891

)
Premises and equipment, net

 

13,740

 

 

13,718

 

 

13,156

 
Bank owned life insurance

 

10,725

 

 

10,639

 

 

10,388

 
Other real estate owned

 

157

 

 

157

 

 

157

 
Deferred tax asset

 

5,398

 

 

4,538

 

 

4,271

 
Other assets

 

8,380

 

 

8,462

 

 

8,866

 
 
Total assets

$

830,635

 

$

825,569

 

$

837,641

 
 
 
LIABILITIES
Deposits
Demand – non-interest bearing

$

178,510

 

$

159,517

 

$

167,010

 
Demand – interest bearing

 

301,891

 

 

305,790

 

 

298,089

 
Money market

 

134,985

 

 

129,524

 

 

139,513

 
Savings

 

66,693

 

 

65,829

 

 

66,901

 
Certificates of deposit

 

45,967

 

 

48,086

 

 

46,882

 
Brokered deposits

 

–

 

 

–

 

 

10,001

 
Total deposits

 

728,046

 

 

708,746

 

 

728,396

 
FHLB borrowings

 

7,500

 

 

7,500

 

 

7,500

 
Junior subordinated debenture

 

4,124

 

 

4,124

 

 

4,124

 
Subordinated debenture

 

–

 

 

14,977

 

 

14,902

 
Other liabilities

 

7,866

 

 

7,654

 

 

8,280

 
 
Total liabilities

 

747,536

 

 

743,001

 

 

763,202

 
 
STOCKHOLDERS’ EQUITY
Common stock

 

22,063

 

 

21,954

 

 

21,809

 
Retained earnings

 

68,063

 

 

65,318

 

 

57,508

 
Accumulated other comprehensive
income, net of tax

 

(7,027

)

 

(4,704

)

 

(4,878

)
 
Total stockholders’ equity

 

83,099

 

 

82,568

 

 

74,439

 
 
Total liabilities &
stockholders’ equity

$

830,635

 

$

825,569

 

$

837,641

 

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,

 

2026

 

2026

 

2025

 

 

2026

 

2025
INTEREST INCOME
Loans

$

9,057

$

8,849

$

8,552

$

26,698

$

24,697
Securities

 

1,325

 

1,369

 

1,353

 

4,054

 

3,895
Other interest income

 

639

 

314

 

500

 

1,226

 

959
Total interest income

 

11,021

 

10,532

 

10,405

 

31,978

 

29,551
 
INTEREST EXPENSE
Deposits

 

2,138

 

2,083

 

2,377

 

6,385

 

6,911
Borrowed funds

 

302

 

301

 

308

 

902

 

938
Total interest expense

 

2,440

 

2,384

 

2,685

 

7,287

 

7,849
 
NET INTEREST INCOME

 

8,581

 

8,148

 

7,720

 

24,691

 

21,702
Provision for credit losses on loans

 

200

 

–

 

505

 

237

 

669
Provision (credit) for unfunded commitments

 

13

 

–

 

123

 

43

 

123
Net interest income after
provision for credit losses

 

8,368

 

8,148

 

7,092

 

24,411

 

20,910
 
NONINTEREST INCOME
Trust fee income

 

1,224

 

1,221

 

1,137

 

3,525

 

3,428
Service charges

 

425

 

412

 

394

 

1,235

 

1,157
Mortgage loan sales

 

–

 

–

 

1

 

1

 

9
Merchant card services

 

154

 

140

 

172

 

419

 

412
Oregon Pacific Wealth Management income

 

370

 

333

 

366

 

1,048

 

1,062
Other income

 

116

 

120

 

115

 

357

 

348
Total noninterest income

 

2,289

 

2,226

 

2,185

 

6,585

 

6,416
 
NONINTEREST EXPENSE
Salaries and employee benefits

 

3,968

 

3,797

 

3,701

 

11,683

 

11,546
Outside services

 

870

 

764

 

709

 

2,438

 

2,202
Occupancy & equipment

 

547

 

539

 

533

 

1,644

 

1,539
Trust expense

 

785

 

823

 

686

 

2,322

 

2,109
Loan and collection, OREO expense

 

9

 

24

 

18

 

52

 

46
Advertising

 

113

 

118

 

102

 

338

 

318
Supplies and postage

 

66

 

64

 

70

 

200

 

206
Other operating expenses

 

609

 

534

 

494

 

1,732

 

1,536
Total noninterest expense

 

6,967

 

6,663

 

6,313

 

20,409

 

19,502
 
Income before taxes

 

3,690

 

3,711

 

2,964

 

10,587

 

7,824
Provision for income taxes

 

945

 

947

 

752

 

2,700

 

1,919
 
NET INCOME

$

2,745

$

2,764

$

2,212

$

7,887

$

5,905

Quarterly Highlights

 

3rd Quarter

 

2nd Quarter

 

1st Quarter

 

4th Quarter

 

3rd Quarter

 

 

2026

 

 

 

2026

 

 

 

2026

 

 

 

2025

 

 

 

2025

 
 
Earnings
Interest income

$

11,021

 

$

10,532

 

$

10,425

 

$

10,531

 

$

10,405

 
Interest expense

 

2,440

 

 

2,384

 

 

2,465

 

 

2,598

 

 

2,685

 
Net interest income

$

8,581

 

$

8,148

 

$

7,960

 

$

7,933

 

$

7,720

 
Provision for credit losses on loans

 

200

 

 

–

 

 

37

 

 

346

 

 

505

 
Provision (credit) for unfunded commitments

 

13

 

 

–

 

 

30

 

 

(15

)

 

123

 
Noninterest income

 

2,289

 

 

2,226

 

 

2,070

 

 

2,291

 

 

2,185

 
Noninterest expense

 

6,967

 

 

6,663

 

 

6,777

 

 

6,306

 

 

6,313

 
Provision for income taxes

 

945

 

 

947

 

 

808

 

 

921

 

 

752

 
Net income

$

2,745

 

$

2,764

 

$

2,378

 

$

2,666

 

$

2,212

 
 
Average shares outstanding

 

7,179,876

 

 

7,179,876

 

 

7,171,523

 

 

7,163,160

 

 

7,163,503

 
Average diluted shares outstanding

 

7,201,765

 

 

7,201,765

 

 

7,196,169

 

 

7,188,902

 

 

7,189,245

 
Period end shares outstanding

 

7,179,876

 

 

7,179,876

 

 

7,179,876

 

 

7,162,985

 

 

7,163,503

 
Period end diluted shares outstanding

 

7,201,765

 

 

7,201,765

 

 

7,203,449

 

 

7,188,727

 

 

7,189,245

 
Earnings per share

$

0.38

 

$

0.38

 

$

0.33

 

$

0.37

 

$

0.31

 
Diluted earnings per share

$

0.38

 

$

0.38

 

$

0.33

 

$

0.37

 

$

0.31

 
 
Performance Ratios
Return on average assets

 

1.28

%

 

1.36

%

 

1.18

%

 

1.27

%

 

1.06

%
Return on average equity

 

14.20

%

 

14.29

%

 

12.65

%

 

14.90

%

 

12.58

%
Net interest margin – tax equivalent

 

4.18

%

 

4.19

%

 

4.13

%

 

3.96

%

 

3.88

%
Yield on loans

 

5.93

%

 

5.89

%

 

5.96

%

 

5.80

%

 

5.73

%
Yield on securities

 

3.72

%

 

3.68

%

 

3.59

%

 

3.46

%

 

3.45

%
Cost of deposits

 

1.16

%

 

1.19

%

 

1.25

%

 

1.26

%

 

1.31

%
Cost of interest-bearing liabilities

 

1.65

%

 

1.67

%

 

1.73

%

 

1.76

%

 

1.83

%
Efficiency ratio

 

64.09

%

 

64.24

%

 

67.57

%

 

61.68

%

 

63.73

%
Full-time equivalent employees

 

146

 

 

144

 

 

144

 

 

149

 

 

146

 
 
Capital
Tier 1 capital

$

92,027

 

$

91,847

 

$

91,689

 

$

91,828

 

$

91,563

 
Leverage ratio

 

10.74

%

 

11.18

%

 

11.16

%

 

10.96

%

 

10.99

%
Common equity tier 1 ratio

 

14.31

%

 

14.42

%

 

14.65

%

 

14.69

%

 

14.65

%
Tier 1 risk based ratio

 

14.31

%

 

14.42

%

 

14.65

%

 

14.69

%

 

14.65

%
Total risk based ratio

 

15.57

%

 

15.67

%

 

15.90

%

 

15.94

%

 

15.91

%
Book value per share

$

11.57

 

$

11.50

 

$

11.13

 

$

10.86

 

$

10.39

 

Quarterly Highlights

 

3rd Quarter

 

2nd Quarter

 

1st Quarter

 

4th Quarter

 

3rd Quarter

 

 

2026

 

 

 

2026

 

 

 

2026

 

 

 

2025

 

 

 

2025

 
 
Asset quality
Allowance for credit losses (ACL)

$

8,406

 

$

8,048

 

$

8,028

 

$

8,237

 

$

7,891

 
Nonperforming loans (NPLs)

$

7,286

 

$

2,092

 

$

2,092

 

$

2,338

 

$

495

 
Nonperforming assets (NPAs)

$

7,442

 

$

2,248

 

$

2,248

 

$

2,494

 

$

652

 
Classified Assets (1)

$

14,945

 

$

19,505

 

$

10,635

 

$

13,119

 

$

14,391

 
Net loan charge offs (recoveries)

$

(158

)

$

(19

)

$

246

 

$

–

 

$

1

 
ACL as a percentage of net loans

 

1.37

%

 

1.32

%

 

1.32

%

 

1.37

%

 

1.33

%
ACL as a percentage of NPLs

 

115.38

%

 

384.77

%

 

383.81

%

 

352.31

%

 

1594.14

%
Net charge offs (recoveries)
to average loans

 

-0.03

%

 

0.00

%

 

0.04

%

 

0.00

%

 

0.00

%
Net NPLs as a percentage of
net loans less ACL

 

1.21

%

 

0.35

%

 

0.35

%

 

0.40

%

 

0.08

%
Nonperforming assets as a
percentage of total assets

 

0.90

%

 

0.27

%

 

0.27

%

 

0.31

%

 

0.08

%
Classified Asset Ratio (2)

 

14.88

%

 

19.53

%

 

10.67

%

 

13.11

%

 

14.47

%
Past due as a percentage of
total loans

 

0.25

%

 

1.30

%

 

0.13

%

 

0.17

%

 

0.12

%
 
Off-balance sheet figures
Unused credit commitments

$

87,050

 

$

94,499

 

$

96,198

 

$

98,660

 

$

108,753

 
Trust assets under management (AUM)

$

282,663

 

$

302,182

 

$

307,597

 

$

297,701

 

$

281,281

 
Oregon Pacific Wealth Management AUM

$

164,705

 

$

162,550

 

$

148,443

 

$

154,137

 

$

181,349

 
 
End of period balances
Total securities

$

131,406

 

$

141,523

 

$

145,679

 

$

155,159

 

$

162,012

 
Total short term deposits

$

53,713

 

$

32,862

 

$

39,074

 

$

16,663

 

$

42,274

 
Total loans net of allowance

$

604,107

 

$

601,672

 

$

590,628

 

$

591,399

 

$

586,804

 
Total earning assets

$

799,609

 

$

786,078

 

$

785,385

 

$

773,409

 

$

800,930

 
Total assets

$

830,635

 

$

825,569

 

$

821,260

 

$

812,216

 

$

837,641

 
Total noninterest bearing deposits

$

178,510

 

$

159,517

 

$

154,248

 

$

152,937

 

$

167,010

 
Total brokered deposits

$

–

 

$

–

 

$

–

 

$

10,001

 

$

10,001

 
Total core deposits

$

728,046

 

$

708,746

 

$

706,660

 

$

689,350

 

$

718,395

 
Total deposits

$

728,046

 

$

708,746

 

$

706,660

 

$

699,351

 

$

728,396

 
 
Average balances
Total securities

$

139,638

 

$

143,819

 

$

151,912

 

$

159,462

 

$

153,603

 
Total short term deposits

$

68,731

 

$

33,393

 

$

30,441

 

$

40,352

 

$

44,423

 
Total loans net of allowance

$

597,898

 

$

594,094

 

$

590,420

 

$

587,209

 

$

584,102

 
Total earning assets

$

816,417

 

$

781,321

 

$

782,984

 

$

796,948

 

$

791,637

 
Total assets

$

852,049

 

$

816,865

 

$

817,928

 

$

833,972

 

$

827,823

 
Total noninterest bearing deposits

$

173,278

 

$

156,537

 

$

152,699

 

$

164,736

 

$

166,857

 
Total brokered deposits

$

–

 

$

–

 

$

9,445

 

$

10,001

 

$

10,001

 
Total core deposits

$

733,716

 

$

701,368

 

$

694,145

 

$

712,607

 

$

710,376

 
Total deposits

$

733,716

 

$

701,368

 

$

703,590

 

$

722,608

 

$

720,377

 

(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.

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 herein 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.

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