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Hal Brown, Chief Executive Officer

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Credit Quality: Stable, no negative migration ... Superior Credit Practices. Proven 'Industry Best Practices' Diversified by Market and Industry ... – PowerPoint PPT presentation

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Title: Hal Brown, Chief Executive Officer


1
Hal Brown, Chief Executive Officer Roger Busse,
President and COO
13th Annual Bank Conference Chicago, August
2008
2
Special Note Regarding Forward-Looking
Information
Certain statements and estimates included in
this presentation may constitute forward-looking
statements which may involve significant risks
and uncertainties. Actual results may differ
materially from the results discussed. Factors
that might cause such a difference include, but
are not limited to, those discussed in the
Companys current Report on Form 10-Q, 10-K or
8-K as filed with the Securities and Exchange
Commission, to which report reference is hereby
made.
3
PCBK Company Profile
Established in 1972 36 years June 30 Assets
1.036 billion Market Capitalization 154
million (August 11, 2008) Number of Employees
280 FTE NW Regional Bank Operating in only
large Pacific Northwest commercial
markets Business Bank Specialized
Expertise Core Principle Quality
Profitability - Growth
4
2008, Whats Happening Now?
Earnings ROA 1.24, ROTE 14.11,
YTD, EPS down 2 year-over-year Cre
dit Quality Stable, no negative
migration NPAs 0.74, consistent with Q1
and Q4 conference call guidance Credit
losses YTD annualized losses at 0.07 YTD
Margin Stable at 5.24, equal to YTD
07 Loan growth YTD growth of 75.1 MM, up
18 annualized Core deposits Average core
deposit growth 32 MM up 6 year-over-year
5
Strategic Differentiation
  • Operating in Large Commercial Markets
  • 3 of the 4 largest Northwest markets
  • Small market share leads to big opportunity
  • Exclusively a Business Bank
  • Specialized segmentation
  • Niche expertise
  • Proven funding strategy
  • Third party recognized culture
  • Attract and Retain the best talent

6
Excellent Markets
Operating in 3 of the 4 largest Northwest
Markets
Seattle
Washington
Portland
Eugene
Oregon
7
Market Diversity June 30, 2008
Loans (period end totals) Eugene 224 Portland
413 Seattle 260
Core Deposits (Average for the
quarter) Eugene 397 Portland 111 Seattle
87
Seattle
Seattle
Portland
Portland
Eugene
Eugene
8
Portland Success
Compounded 4-year Growth Rate 28
413
385
379
294
240
YTD 2008
2004
2005
2006
2007
Period-end Loans
9
Seattle Success
Growth Rate 2007 - 37 2008 - 44
(annualized )
260
YTD 2008
Period-end Loans
10
Market Growth Opportunities
Metro Portland 5th regional office opened in
Vancouver, WA Relocation of Tualatin office to
high-profile I5 Non-profit funding Medical
dental endorsements Construction financing
Metro Eugene 450 million healthcare campus for
PeaceHealth Medical Systems Opportunity to work
with businesses related to this expansive
project Opportunity to expand medical segments
medical dental endorsements
Metro Seattle Introduce PCBK success to dental
practices non-profit businesses Increased
legal lending limit will aid PCBK
bankers Recognized company culture will help
recruit additional impact bankers
11
Specialized Business Segments
  • Community-Based Businesses
  • Consultative relationships with the business
    owner
  • Sweet spot credit facilities of 5 million and
    less
  • Professional Service Providers
  • Dental, Medical, Legal, Financial
  • Nonprofit Organizations
  • Sector growth of 33 over last decade
  • Private Banking
  • Business Owners Key Employees

12
Funding StrategyJune 30, 2008 ( in millions)
Loans
Core Deposits
60
28
95
147
251
118
662
140
13
3rd Party Recognition of The PCB Way
14
Drivers of Financial Performance
  • Net Interest Margin
  • Loan Portfolio Practices
  • Quality Credit Statistics
  • Granular Loan and Real Estate Portfolio

15
Net Interest Margin 2007 Margin of 5.22
Exceeds Peer by 120 Basis Points
Source 09-30-07 / FDIC Uniform Bank Performance
Report
16
Interest Margin Consistent and Holding Steady
November 30, 2005 NWBF Acquisition
5.30
4.27
5.22
5.66
PCBK 2006
NWBF 2005
PCBK 2007
PCBK 2005
Excludes Q3 06 non recurring item
17
Interest Margin The Drivers of Success
Systemic Advantage
YTD 2008 Drivers
  • Asset Mix Loans represent 87 of total assets
  • Demand deposits 30 of core deposits fund 18
    of total assets
  • Net borrower provides funding options
  • Wholesale funding was liability sensitive
  • Activation of floors on over 100 MM of
    prime-based loans
  • Very few term CDs
  • Image cash letter presentations

18
Portfolio Management Best Practices
  • Quality, Profitability, Growth
  • Accurate Timely Risk Ratings
  • Loan Watch Meetings
  • Up or Out Strategy
  • Regular Stress Testing
  • Granular Portfolio Exposure

19
Quality Loan Portfolio
Q2 08 Q1 08 Q4 07 NPAs as a of total
assets 0.74 0.60 0.43 Excluding
Special Program 0.11 0.01
0.01 Allowance as a of total loans 1.10
1.06 1.05 Unallocated Reserves 9.06
8.02 9.20 Annualized net charge-offs as
a of average loans 0.07 0.05
0.04 Special Program 31,675 36,457 42,417
Program Loans 177 204 249
Investor Loans 42 60
82 Watch Loans 19 34
41 NPAs 6,533 5,890 4,031 Note
20 Cash Deposit Builder Guarantee
20
Granular Real Estate Exposure(Percent of 897
Million Loan Portfolio)
  • 20.7 - CRE Perm Owner-Occupied
  • 18.8 - CRE Perm Non-Owner Occupied
  • 13.0 -CRE Construction
  • 4.2- CRE Acquisition Development
  • 3.9 - Res Acquisition Development
  • 5.0 - Res Speculative Construction
  • 2.8 - Res Pre-Sold
  • 3.5 - Res Special
  • 8.6 -Other CRE (CI)

21
Why Invest in PCBK?
  • Proven Business Model
  • Large Commercial Markets
  • Silos of expertise
  • Rational Funding Strategy
  • Superior Credit Practices
  • Proven Industry Best Practices
  • Diversified by Market and Industry
  • Granular R/E Exposure
  • Growth Opportunities
  • Dental and Nonprofit Silos
  • Good Local Economies
  • Portland and Seattle Market Share
  • Strong Brand Culture
  • Recruit and Retain
  • Consultative Client Relationships
  • 3rd Party Recognized

22
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