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ABERDEEN, Wash. - Pacific Financial Corporation (OTCQX: PFLC), the holding company for Bank of the Pacific, announced an increase in net income for the third quarter of 2024. The unaudited financial results showed a net income of $2.6 million, or $0.25 per diluted share, compared to $2.1 million, or $0.21 per diluted share, in the second quarter of 2024.
This increase in earnings is attributed to a rise in net interest income as loan and investment yields outpaced the rise in deposit and borrowing costs. The company also reported a negative provision for credit losses due to lower provisions for unfunded loans. However, there was a decrease in non-interest income and a slight drop in non-interest expenses.
The third quarter saw a small decrease in total gross loans by 0.6%, but this was offset by an increase in the purchase of investment securities, with the balance of investment securities rising by $18.1 million or 6.5%. Total deposits increased by 2.6% to $1.0 billion, and shareholder equity also saw a rise by $6.2 million or 5.4%.
The board of directors declared a quarterly cash dividend of $0.14 per share, payable on November 22, 2024, to shareholders of record on November 8, 2024. Additionally, the board has authorized an additional $2.6 million toward future stock repurchases.
Denise Portmann, President and CEO, noted that core operations remain strong, with focused efforts on deposit retention and increased business relationships. The company plans to close its mortgage banking division in the fourth quarter, which is expected to improve operational efficiency and earnings, despite anticipated one-time charges.
Pacific Financial's return on average assets (ROAA) was 0.90%, up from 0.76% in the second quarter, and return on average equity (ROAE) increased to 8.77% from 7.47%. Net interest margin also improved to 4.19% from 4.15%. The company's asset quality remains solid, with nonperforming assets to total assets at 0.10%.
The company's regulatory capital ratios continue to exceed well-capitalized requirements, with an estimated leverage ratio of 11.6% and a total risk-based capital ratio of 17.9%.
This financial update is based on a press release statement from Pacific Financial Corporation.
InvestingPro Insights
Pacific Financial Corporation's (OTCQX: PFLC) recent financial performance aligns with several key metrics and trends highlighted by InvestingPro. The company's reported increase in net income and improved return ratios are reflected in InvestingPro's data, which shows that PFLC has been profitable over the last twelve months and has a P/E ratio of 9.39, indicating a relatively attractive valuation compared to earnings.
InvestingPro Tips reveal that PFLC has maintained dividend payments for 13 consecutive years, which is consistent with the company's recent declaration of a quarterly cash dividend. This commitment to shareholder returns is further supported by the current dividend yield of 4.67%, as reported by InvestingPro.
The company's stock performance has been notably strong, with InvestingPro data showing a 29.93% price total return over the past six months. This aligns with an InvestingPro Tip indicating that PFLC is trading near its 52-week high, which could be of interest to investors following the company's positive earnings report.
While the article mentions a small decrease in total gross loans, it's worth noting that according to InvestingPro, PFLC's revenue for the last twelve months as of Q2 2024 stood at $51.95 million. However, there was a revenue growth decline of 5.79% over the same period, which investors may want to monitor in light of the company's plans to close its mortgage banking division.
For those seeking a more comprehensive analysis, InvestingPro offers additional insights with 6 more tips available for PFLC, providing a deeper understanding of the company's financial health and market position.
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