02/13/2018: Oregon Pacific Bank Announces 2017 Quarter End Statement of Condition
Oregon Pacific Bank Announces Quarter End Statement of Condition
To our Shareholders, Friends and the Communities we serve:
Oregon Pacific Bancorp and its wholly-owned subsidiary, Oregon Pacific Bank, reported a net operating income of $1,421,808 for the 12 months ending December 31, 2017, compared to $1,135,082 for the same period in 2016. This represents a 25.3% increase over the prior year and equates to $0.31 earnings per share as compared to $0.26 for the same period in 2016. The Tax Cuts and Jobs Act enacted in December of 2017 will significantly decrease the corporate tax rate for the organization, which required the Bank to write down the value of its deferred tax asset by $508,029 in December. Most banks were afflicted by this one-time accounting adjustment and Oregon Pacific Bank expects to earn this back in one year due to reduction in the corporate federal income tax rate. Had the tax rate not changed and the deferred tax asset not required a write down, earnings per share for the year would have been $0.42. We are very pleased with the significant year over year improvement in earnings and overall value to our shareholders.
Net loans for the year grew 20.8%, as our commercial relationships in all markets strengthened. Our focus continues to be on working with small businesses and key professional industries. Deposits experienced a 12.5% growth in 2017. Local businesses and consumers continue to see the value of banking local and allowing us to reinvest their deposits back into our communities.
Our Trust and Wealth Management divisions had a strong year with growth in all markets. The ability to provide fiduciary and wealth advisory services continues to be a valuable asset for our organization.
Since the recession of 2008, the number of banks headquartered in Lane County has been reduced from 6 to 2. As the oldest operating bank headquartered in Lane County, Oregon Pacific Bank believes the opportunity to best serve our communities and clients has never been greater. In November of 2017, we completed a private placement of additional capital. After issuing 2,508,750 new common shares and paying the costs of the raise, the net new capital to the Bank was $10.8 million. This capital enhancement will create an initial dilution of earnings per share but we are working diligently to hire the best bankers and expand our community bank presence in the Eugene area. We have publicly stated that our goal is to lend $125 million new dollars to small businesses, professionals, consumers and real estate investors. Although we will continue to focus on our roots in Western Lane, Coos and Douglas counties, we expect most of this growth to come from the Eugene market.
As we look to the future, our goal is to be the best community bank in the markets we serve and to provide significant shareholder value. We are very well positioned to meet these objectives. Management is focused on staff recruiting from all markets we serve and we are committing to a material technology investment over the next two years to ensure our banking systems and delivery channels are meeting the ever-changing needs of consumers and businesses. As always, please feel free to reach out to me if you would like to discuss the Bank and our plans going forward. My direct telephone number is (541) 999-1908 and my email address is email@example.com.
With warmest regards and appreciation,
Ron Green, President & Chief Executive Officer