Highlights:

• Second quarter net income of $2.0 million; $0.28 per diluted share.
• Quarterly tax equivalent net interest margin of 3.85%, expansion of 0.18% over prior quarter.
• Quarterly loan growth of $8.9 million.
• Quarterly deposit growth of $4.4 million.
• Quarterly return on average assets of 1.02%.

Oregon Pacific Bancorp (ORPB), the holding company of Oregon Pacific Bank, today reported net income of $2.0 million, or $0.28 per diluted share, for the quarter ended June 30, 2025, compared to $1.7 million or $0.23 per diluted share for the quarter ended March 31, 2025.

“We are pleased to report second quarter operating results, which reflected loan and deposit growth and increased profitability,” said Ron Green, President and CEO. “Expansion of the margin, and focused noninterest expense savings, supported enhanced financial performance. The bank continues to be mindful of the current economic environment and believes our local focus will continue to drive results.”

The bank’s second quarter net interest margin increased to 3.85%, up from 3.67% reported in the first quarter of 2025. The expansion was attributable to both an increase in the yield on loans, which increased to 5.65%, up from 5.53% the prior quarter, and a decrease in the cost of funds, which was reduced to 1.31% compared to 1.36% in the prior quarter.

Period-end loans, net of loan origination fees and costs, grew to $591.8 million, representing quarterly growth of $8.9 million. Quarterly loan production for new and renewed loans totaled $40.7 million, with a weighted average effective rate of 7.03% and a weighted-average repricing life of 3.70 years. New production continues to occur at rates higher than the existing portfolio which has expanded the overall portfolio yield. Period-end deposits totaled $699.7 million, representing quarterly growth of $4.4 million, with growth primarily centered in non-interest-bearing demand deposits, which expanded $8.5 million.

During the second quarter, the bank recorded net charge offs totaling $176 thousand, which were attributable to two relationships, totaling $153 thousand and $23 thousand, respectively. The first relationship is a government guaranteed hospitality loan that originated in 2014. The second relationship is a smaller community-based business located in a coastal market.

Classified assets at June 30, 2025, reflected an increase of $721 thousand from the first 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. The primary cause of the increase was the downgrade of one relationship, totaling $2.2 million, for a manufacturer of wood products tied to the RV industry. The borrower is experiencing a cyclical decline in financial performance but remains profitable. This downgrade was partially offset by the upgrade of a owner-occupied nonprofit relationship totaling $1.9 million. Additionally, during the second quarter the bank transferred property to Other Real Estate Owned (OREO) totaling $157 thousand. This property is a vacant lot on nonaccrual status, which stopped payments following the death of a borrower. The bank anticipates selling the property in the third quarter, with minimal anticipated holding costs.

Second quarter 2025 noninterest income totaled $2.1 million, which represented a decrease of $57 thousand from the prior quarter, and an increase of $126 thousand over the second quarter 2024. During the quarter, the Bank recognized $1.1 million of trust fee income, a decrease of $105 thousand from the prior quarter. Trust revenue is comprised of two components: 1) trust management revenue, and 2) transactional revenue or “extraordinary” revenue. Trust management revenue has increased due to onboarding of new clients, with the Bank’s trust assets under management increasing $21.6 million since March 31, 2025. Transactional revenue is related to items outside the scope of standard trust administration. This is primarily comprised of fees for liquidation of real estate and is generally tied to the death of a trust client. As transactional revenue is event based, this can cause quarterly fluctuations. Below is a summary of the breakout of trust revenue.

For the quarter ended June 30, 2025, noninterest expense totaled $6.5 million, representing a decrease of $208 thousand from the prior quarter. The largest expense fluctuation occurred in the salaries and employee benefits category, which decreased $141 thousand. The largest fluctuation was attributable to payroll taxes, which decreased $61 thousand from the prior quarter. Payroll tax counters are generally reset on a calendar basis, so tax expense at the beginning of the year is typically higher, decreasing over the course of the year as employees reach wage caps.

Offsetting the decrease in salary expense was an increase in the outside services category. This fluctuation is primarily attributable to a change in the bank’s managed service provider, which occurred on June 30, 2025. In preparation for the conversion the bank incurred duplicated expense during the second quarter, totaling approximately $60 thousand. The duplicated services occurred to ensure no client or employee service disruptions and were discontinued effective June 30, 2025, which should result in third quarter outside services expense reduction.

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250724297845/en/

"The bank continues to be mindful of the current economic environment and believes our local focus will continue to drive results.”