Oregon Pacific Bancorp : 2022 – March 31st Statement of Condition

Oregon Pacific Bank is a wholly owned subsidiary of Oregon Pacific Bancorp. Stock is traded over-the-counter on the OTCBB under symbol ORPB.

FOR IMMEDIATE RELEASE Editorial Contact:

Ron Green, President & Chief Executive [e-mail] │ [phone]

Oregon Pacific Bank Announces First Quarter Earnings Results

Florence, Ore., April 19, 2022 - Oregon Pacific Bancorp (ORPB), the holding company of Oregon Pacific Bank, today reported financial results for the first quarter ended March 31, 2022.

Highlights:

• • First quarter net income of $1.4 million; $0.20 per diluted share

• • Non-PPP loan growth of $19.2 million or 20.08% annually

• • Deposit growth of $17.7 million or 11.61% annually

• • Trust assets under management growth of $20.1 million or 40.55% annually

Net income for the first quarter was $1.4 million, or $0.20 per diluted share, compared to $2.0 million, or $0.28 per diluted share for the quarter ended March 31, 2021. The Bank continued to see Paycheck Protection Program (PPP) forgiveness payments processed during the first quarter, but the PPP interest and fees decreased substantially to $205 thousand, down from $1.5 million recognized in first quarter 2021. During the quarter, the Bank saw outstanding PPP loans reduce to $4.8 million. As of March 31, 2022, unamortized PPP fee income totaled $141 thousand.

Period-end non-PPP loans, net of deferred loan origination fees, totaled $407.4 million, with growth of $19.2 million, which represented an annualized growth rate of 20.08%. The Bank continued to experience non-PPP loan demand, but pricing pressures remain strong. The first quarter effective yield on the non-PPP loan portfolio lowered to 4.37%, down from 4.47% in fourth quarter, primarily related to new production occurring at rates below the current effective yield of the portfolio.

"We are pleased to post strong quarterly earnings as we see the financial benefits of the PPP loan program lessen in relation to the Bank's overall profitability," said Ron Green, President and CEO. "Our board and management team have understood the temporary nature of the PPP fee income and have worked to enhance our noninterest income sources, primarily through Trust Services and Wealth Management."

During the quarter, the Bank saw a decrease in classified assets totaling $2.4 million. This decrease was primarily attributable to upgrades of two loan relationships and one loan payoff. The payoff was related to a commercial relationship that was downgraded in the prior fiscal year.

First quarter 2022 deposit growth totaled $17.7 million. While the Bank did not experience deposit contraction during the first quarter, the possibility of this will grow as depositors react to the changing interest rate environment. The Bank maintained first quarter cost of funds totaling 0.07% and did not make any rate adjustments following the change in the fed funds rate. The Bank also continues to maintain $116.2 million of additional off-balance sheet deposits in the IntraFi Network's Insured Cash Sweep (ICS) and CDARS products. The off-balance sheet deposits remain a source of liquidity, with the ICS deposits available on demand and the CDARs deposits with a maximum maturity of four weeks.

During first quarter 2022 the Bank continued to shift interest-bearing balances with the Federal Reserve into higher yielding securities to augment the net interest margin. First quarter securities purchases totaled $40.5

million with a weighted average maturity of 3.35 years and a weighted average yield of 1.76%. Securities purchases were offset by portfolio amortization and an increase in the unrealized loss on the securities portfolio. The March 31, 2022, unrealized loss on the securities portfolio grew to $6.3. million. This compared to an unrealized gain of $52 thousand on December 31, 2021. The Bank's securities portfolio is classified as available-for-sale and is marked to market monthly. The changing yield curve has caused many of the investments purchased during 2021 to be at rates below the current market rate for similar securities. The Bank will benefit from the variable rate securities in the portfolio in a rising rate environment. As of March 31, 2022, approximately 30% of the securities are subject to monthly of quarter rate resets, which will enhance the Bank's interest income moving forward.

First quarter 2022 noninterest income totaled $1.6 million, which represented a decrease of $117 thousand from fourth quarter 2021. The decrease in revenue is partially attributable to a reduction in mortgage loan sales. With increased mortgage rates, refinance activity decreased, leading to lower quarterly income. The Bank also saw a small reduction in income attributable to Oregon Pacific Wealth Management LLC, (OPWM) the wholly owned Registered Investment Advisory subsidiary of the Bank. Market fluctuations in assets contributed to a reduction in assets under management, which is directly tied to the fee income recognized through OPWM.

Noninterest expense in the first quarter totaled $4.5 million, up $208 thousand over fourth quarter 2021. The largest increase occurred in the salaries and employee benefits category, which was partially due to 401k/profit sharing expense, which was up $112 thousand over fourth quarter 2021. The Bank has a safe harbor 401k plan, and in 2022, the Bank implemented a new profit-sharing component, which is tied to overall Company profitability. The Bank is continuing to see pressure on wages due to competition for employees and will continue to evaluate overall compensation to ensure retention of key employees. Additionally, payroll tax expense was up $60 thousand over fourth quarter 2021 as payroll tax calculators are reset on an annual basis. The Bank currently anticipates this expense to decrease as the year progresses.

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, strategic focus, capital position, liquidity, credit quality, special asset liquidation, 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.

Oregon Pacific Bank at a Glance

Established on December 17, 1979 and headquartered in Florence, Oregon, we are proud to serve the communities of Coos Bay, Eugene, Florence, Medford, and Roseburg. Sta ed by local decision makers, we specialize in o ering holistic nancial services to our local families and business owners.

Board of Directors

J	T	| Chairman of the Board /Co-owner, KCST Radio Station
D	J	| Vice Chair of the Board /Owner, DJ Financial
J	B	| Owner, Benetti's Italian Fine Foods
T	C	| Partner/Owner, Campbell Commercial Real Estate
R	G	| President/CEO, Oregon Paci c Bank
K	| Owner/Loan Originator, Gallic & Johnson Financial
B	M	, OD | Co-owner, Florence Eye Clinic
S	P	| CEO, Palo Alto Software
R	W	| Owner, Siuslaw Broadband
R	Y	, CPA | Certi ed Public Accountant, Holloway and Associates CPAs

J

Bank Executive Officers

R	| President, Chief Executive O cer
A	W	| Executive Vice President, Chief Financial O cer
J	A	| Executive Vice President, Chief Credit O cer
J	R	| Executive Vice President, Chief Lending O cer

G

CONSOLIDATED BALANCE SHEETS Unaudited (dollars in thousands)

March 31, 2022

ASSETS

Cash and due from banks Interest bearing deposits Securities

Non PPP Loans, net of deferred fees and costsPPP Loans, net of deferred fees and costs

Total Loans, net of deferred fees and costs Allowance for loan losses

Premises and equipment, net Bank owned life insurance Deferred tax asset

Other assets

$

• 16,039 $

98,345

157,922

407,405

4,783

412,188

(5,959)

9,645

8,456

2,998

6,893

December 31, 2021

March 31, 2021

8,643 $ 9,925

143,192 161,446

123,076 50,543

388,187 322,451

9,968 78,745

398,155 401,196

(5,905) (6,020)

9,720 6,621

8,402 8,221

1,270 1,079

5,168 3,998

Total assets

LIABILITIES Deposits

Demand - non-interest bearing Demand - interest bearing Money market

Savings

Certificates of deposit

Total deposits

$

• 706,527 $

  $

• 178,367 $

187,276

167,681

83,477

19,583

636,384

691,721 $ 637,009

171,380 $ 171,750

181,885 183,537

164,742 139,350

80,856 70,276

19,816 20,394

618,679 585,307

Junior subordinated debenture Subordinated debenture Other liabilities

4,124 14,553 5,420

4,124 4,124

14,528

-5,130 3,695

Total liabilities

660,481

642,461 593,126

STOCKHOLDERS' EQUITY Common stock

Retained earnings

Accumulated other comprehensive income, net of tax

Total stockholders' equity

20,917 29,762

(4,633)

46,046

20,904 20,753

28,318 22,484

38 49,260

646 43,883

Total liabilities & stockholders' equity

$

706,527

$

• 691,721 $

637,009