Oregon Pacific Bancorp Announces Third Quarter 2026 Earnings Results

Highlights:

• Third-quarter net income was $2.75 million, or $0.38 per diluted share, sustaining strong earnings.
• Loan production of $46.4 million drove $2.8 million in net growth and improved earning-asset yields.
• Deposits grew $19.3 million, led by a $19.0 million increase in noninterest-bearing balances; deposit costs fell to 1.16%.
• Asset quality improved as classified assets fell $4.6 million, past-due loans declined to 0.25%, and two nonaccrual loans paid off in the quarter.
• The Company retired $15.0 million of subordinated debt, executing prudent capital allocation.
• Successfully built-out a talented Commercial Lending Team within the Portland/Metro market.

FLORENCE, Ore.--(BUSINESS WIRE)--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.