UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 8-K
CURRENT REPORT
Pursuant to
SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
_________________
Date of Report (Date of earliest event reported): July 10, 2006
PACIFIC FINANCIAL
CORPORATION
(Exact name of registrant as specified in its charter)
| Washington | 000-29829 | 91-1815009 |
| (State or other jurisdiction of incorporation or organization) |
(SEC File Number) | (IRS Employer Identification No.) |
1101 S. Boone Street
Aberdeen,
Washington 98520
(360) 533-8870
(Address, including zip code, and telephone number,
including area code, of Registrant’s principal executive offices)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 7.01. Regulation FD Disclosure
Pacific Financial Corporation (“Pacific”) is furnishing information in accordance with Regulation FD regarding its financial results for the six months ended June 30, 2006. This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or incorporated by reference into any filing under the Securities Act of 1933, except as may be expressly set forth by specific reference in any such filing.
Pacific’s net income for the six months ended June 30, 2006, was $3,335,000, a 20% increase compared to $2,785,000 for the six month period ended June 30, 2005. The increase is primarily related to the increase in interest income as a result of the rise in short-term interest rates and a decrease in loan loss provision of $600,000 compared to the same period for the prior year. Additionally, gain on sale of real estate loans was $886,000 for the six months ended June 30, 2006 compared to $697,000 for the same period of the prior year.
Net interest income for the six months ended June 30, 2006, increased $1,492,000 to $11,532,000 compared to the same period of the prior year. The increase is attributable primarily to a $3,024,000 increase in interest income, while interest expense increased $2,132,000.
Non-interest income increased $116,000 to $2,036,000 for the six months ended June 30, 2006, compared to the same period of the prior year, while non-interest expense increased $801,000 to $8,780,000. The increase in non-interest expense is primarily related to increased personnel benefit costs, occupancy costs and accounting fees.
The federal income tax provision for the six months ended June 30, 2006, was $1,452,000, compared to $1,195,000 for the six months ended June 30, 2005.
Pacific’s unaudited consolidated balance sheets at June 30, 2006 and June 30, 2005, and unaudited consolidated statements of operations and selected performance ratios for the six months ended June 30, 2006 and 2005, follow.
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Dollars in thousands
| 6-30-06 |
6-30-05 | |||||||
|---|---|---|---|---|---|---|---|---|
| Cash & due from banks | $ | 16,490 | $ | 19,794 | ||||
| Taxable securities | 22,810 | 24,632 | ||||||
| Non-taxable securities | 15,980 | 16,366 | ||||||
| Fed funds sold | 6,920 | 7,000 | ||||||
| Loans held for sale | 9,470 | 6,559 | ||||||
| Loans | 411,160 | 357,307 | ||||||
| Less: Loan loss reserve | 5,233 | 4,842 | ||||||
| Net loans | 415,397 | 359,024 | ||||||
| Premises and equipment - net | 11,242 | 7,719 | ||||||
| Goodwill & core deposit intangible | 13,224 | 12,098 | ||||||
| Foreclosed real estate | 22 | 40 | ||||||
| Cash surrender value life insurance | 9,556 | 9,216 | ||||||
| Other assets | 6,268 | 4,108 | ||||||
| TOTAL ASSETS | $ | 517,909 | $ | 459,997 | ||||
| DEPOSITS: | ||||||||
| Demand | $ | 81,852 | $ | 75,741 | ||||
| NOW, Savings & MMA | 194,123 | 199,840 | ||||||
| Time | 153,645 | 110,105 | ||||||
| Total deposits | 429,620 | 385,686 | ||||||
Long-term borrowings | 22,500 |
24,500 |
||||||
| Secured borrowings | 1,936 | 0 | ||||||
| Junior subordinated debentures | 13,155 | 0 | ||||||
| Other liabilities | 740 | 1,898 | ||||||
| Total liabilities | 467,951 | 412,084 | ||||||
| Common stock | 6,480 | 6,423 | ||||||
| Additional paid-in capital | 25,600 | 24,996 | ||||||
| Retained earnings | 18,431 | 16,556 | ||||||
| Acc. other comprehensive income | (553 | ) | (62 | ) | ||||
| Total equity | 49,958 | 47,913 | ||||||
| TOTAL LIABILITIES & EQUITY | $ | 517,909 | $ | 459,997 | ||||
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PACIFIC FINANCIAL
CORPORATION
Consolidated Statements of
Operations
(unaudited)
Dollars in thousands
| Six Months Ended June 30, | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2006 |
2005 | |||||||
| Interest and fees on loans | $ | 15,904 | $ | 12,724 | ||||
| Interest on investment securities | 744 | 964 | ||||||
| Interest on fed funds sold and | ||||||||
| deposits with banks | 166 | 102 | ||||||
| Total interest income | 16,814 | 13,790 | ||||||
Interest expense on deposits | 4,588 |
2,814 |
||||||
| Other interest expense | 694 | 336 | ||||||
| Total interest expense | 5,282 | 3,150 | ||||||
Net interest income | 11,532 |
10,640 |
||||||
| Less: Prov. for loan losses | 0 | 600 | ||||||
| Net int. income after prov. | 11,532 | 10,040 | ||||||
Service charges on deposits | 756 |
705 |
||||||
| Other charges & fees | 191 | 181 | ||||||
| Gain on sale of loans | 886 | 697 | ||||||
| Other income | 202 | 336 | ||||||
| Total non interest income | 2,035 | 1,919 | ||||||
Salaries and employee benefits | 5,151 |
4,931 |
||||||
| Occupancy and equipment | 1,152 | 949 | ||||||
| Other | 2,477 | 2,099 | ||||||
| Total operating expenses | 8,780 | 7,979 | ||||||
Income before taxes | 4,787 |
3,980 |
||||||
| Income taxes | 1,452 | 1,195 | ||||||
| NET INCOME | $ | 3,335 | $ | 2,785 | ||||
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PACIFIC FINANCIAL
CORPORATION
Selected Performance
Ratios
| Six Months Ended June 30, | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2006 |
2005 | |||||||
| Net interest margin | 5.16 | % | 5.28 | % | ||||
| Efficiency ratio | 63.81 | % | 62.58 | % | ||||
| Return on average assets | 1.35 | % | 1.26 | % | ||||
| Return on tangible equity | 16.79 | % | 16.76 | % | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| PACIFIC FINANCIAL CORPORATION | |
|---|---|
| DATED: July 10, 2006 | By: /s/ John Van Dijk |
| John Van Dijk Secretary |
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