Title
of Each Class of
Securities
to be Registered
|
Amount
to be
Registered
|
Proposed
Maximum
Offering
Price
Per
Share(3)
|
Proposed
Maximum
Aggregate
Offering
Price(3)
|
Amount
of
Registration
Fee
|
|||||||||||
Common
Stock, $1.00 par value
|
695,000
shares
|
(1) (2) | $ | 5.10 | $ | 3,544,500 | $ | 197.80 |
(1)
|
Includes
139,000 shares issuable upon exercise of warrants acquired by the selling
shareholder. The exercise price of the warrants is $6.50 per
share.
|
(2)
|
Pursuant
to Rule 416 under the Securities Act, this registration statement also
covers an indeterminate number of shares that may be issued upon stock
splits, stock dividends or similar
transactions.
|
(3)
|
Estimated
in accordance with Rule 457(c) under the Securities Act of 1933, as
amended, solely for the purpose of calculating the registration fee, based
on the average of the high and low prices of shares of Pacific Financial
Corporation Common Stock reported on the OTC Bulletin Board on September
29, 2009.
|
Page
|
|
PROSPECTUS
SUMMARY
|
3
|
RISK
FACTORS
|
4
|
INCORPORATION
BY REFERENCE
|
9
|
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
|
10
|
SELECTED
FINANCIAL DATA
|
11
|
DESCRIPTION
OF COMMON STOCK
|
12
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
14
|
MARKET
AND SHARE PRICE INFORMATION
|
15
|
SELLING
SHAREHOLDER
|
16
|
PLAN
OF DISTRIBUTION
|
16
|
USE
OF PROCEEDS
|
19
|
WHERE
YOU CAN FIND MORE INFORMATION
|
19
|
INDEMNIFICATION
|
20
|
LEGAL
MATTERS
|
20
|
EXPERTS
|
20
|
695,000
shares of common stock
|
|
Selling
Shareholder
|
Ithan
Creek. We are not selling any shares in this
offering.
|
Use
of Proceeds
|
We
will not receive any proceeds from the resale of shares by the selling
shareholder.
|
See
“Plan of Distribution” for a discussion of the methods that may be used by
the selling shareholder in its offer and sale of our
shares.
|
|
Risk
Factors
|
See
“Risk Factors” for a discussion of certain factors you should consider
before investing in our shares.
|
|
·
|
Continued
and extended losses on a quarterly and annual
basis;
|
|
·
|
An
increase in loan delinquencies, problem assets and
foreclosures;
|
|
·
|
A
decrease in the demand for loans and other products and services;
or
|
|
·
|
A
decrease in the value of loan collateral, especially real estate, which in
turn may reduce a customer's borrowing power and significantly increase
our exposure to particular
loans.
|
|
·
|
Our
Annual Report on Form 10-K for the fiscal year ended
December 31, 2008;
|
|
·
|
Our
definitive proxy statement for our 2009 Annual Meeting of Shareholders,
filed with the SEC on March 27,
2009;
|
|
·
|
Our
Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31, 2009 and June 30, 2009;
and
|
|
·
|
Our
Current Reports on Form 8-K filed July 2, 2009, July 27,
2009, August 20, 2009, and August 28,
2009.
|
(unaudited)
|
||||||||||||||||||||||||||||
(Dollars in thousands, except
|
June 30,
|
December 31,
|
||||||||||||||||||||||||||
per share information)
|
2009
|
2008
|
2008
|
2007
|
2006
|
2005
|
2004
|
|||||||||||||||||||||
Income
Statement
|
||||||||||||||||||||||||||||
Net
interest income
|
$ | 10,618 | $ | 10,947 | $ | 21,715 | $ | 24,503 | $ | 23,867 | $ | 22,284 | $ | 19,520 | ||||||||||||||
Provision
for credit losses
|
5,374 | 2,354 | 4,791 | 482 | 625 | 1,100 | 970 | |||||||||||||||||||||
Non-interest
income
|
4,529 | 2,502 | 5,057 | 4,475 | 4,176 | 4,081 | 3,162 | |||||||||||||||||||||
Non-interest
expense
|
14,752 | 10,662 | 21,591 | 20,379 | 18,118 | 16,566 | 13,555 | |||||||||||||||||||||
Income
taxes (benefit) expense
|
(2,400 | ) | 58 | (561 | ) | 2,086 | 2,749 | 2,653 | 2,450 | |||||||||||||||||||
Net
income (loss)
|
$ | (2,579 | ) | $ | 375 | $ | 951 | $ | 6,031 | $ | 6,551 | $ | 6,046 | $ | 5,707 | |||||||||||||
Earnings
(loss) per share:
|
||||||||||||||||||||||||||||
Basic(1)
|
$ | (0.35 | ) | $ | 0.05 | $ | 0.13 | $ | 0.83 | $ | 0.92 | $ | 0.86 | $ | 0.85 | |||||||||||||
Diluted(1)
|
$ | (0.35 | ) | $ | 0.05 | $ | 0.13 | $ | 0.82 | $ | 0.90 | $ | 0.84 | $ | 0.83 | |||||||||||||
Dividends
declared
|
— | — | 333 | 4,955 | 4,893 | 4,719 | 4,624 | |||||||||||||||||||||
Dividends
declared per share(1)
|
— | — | 0.05 | 0.75 | 0.75 | 0.73 | 0.72 | |||||||||||||||||||||
Dividend
payout ratio
|
— | — | 35 | % | 82 | % | 75 | % | 78 | % | 81 | % | ||||||||||||||||
Performance
Ratios
|
||||||||||||||||||||||||||||
Interest
rate spread
|
3.71 | % | 4.37 | % | 4.21 | % | 4.92 | % | 5.13 | % | 5.34 | % | 5.37 | % | ||||||||||||||
Net
interest margin(2)
|
3.58 | % | 4.26 | % | 4.10 | % | 4.82 | % | 5.04 | % | 5.25 | % | 5.25 | % | ||||||||||||||
Efficiency
ratio(3)
|
97.39 | % | 79.28 | % | 80.65 | % | 70.33 | % | 64.61 | % | 62.83 | % | 59.76 | % | ||||||||||||||
Return
on average assets
|
(.40 | )% | .07 | % | .16 | % | 1.08 | % | 1.26 | % | 1.31 | % | 1.41 | % | ||||||||||||||
Return
on average equity
|
(5.16 | )% | .72 | % | 1.83 | % | 11.46 | % | 13.16 | % | 12.70 | % | 14.21 | % | ||||||||||||||
Balance
Sheet
|
||||||||||||||||||||||||||||
Total
assets
|
$ | 669,026 | $ | 583,067 | $ | 625,835 | $ | 565,587 | $ | 562,384 | $ | 489,409 | $ | 441,791 | ||||||||||||||
Total
loans, net
|
471,107 | 449,135 | 478,695 | 433,904 | 420,768 | 393,574 | 341,671 | |||||||||||||||||||||
Total
deposits
|
566,344 | 468,291 | 511,307 | 467,336 | 466,841 | 399,726 | 363,501 | |||||||||||||||||||||
Other
borrowings
|
45,904 | 60,321 | 60,757 | 37,446 | 36,809 | 35,790 | 25,233 | |||||||||||||||||||||
Total
shareholders' equity
|
53,223 | 51,229 | 50,074 | 50,699 | 48,984 | 46,600 | 45,303 | |||||||||||||||||||||
Book
value per share(1)
(4)
|
6.31 | 7.00 | 6.84 | 6.98 | 6.83 | 6.55 | 6.42 | |||||||||||||||||||||
Equity
to assets ratio
|
7.96 | % | 8.79 | % | 8.00 | % | 8.96 | % | 8.71 | % | 9.52 | % | 10.25 | % | ||||||||||||||
Asset
quality ratios
|
||||||||||||||||||||||||||||
Nonperforming
loans to loans
|
3.94 | % | 1.86 | % | 3.49 | % | 1.46 | % | 1.82 | % | 1.69 | % | .14 | % | ||||||||||||||
Allowance
for loan losses to loans
|
2.12 | % | 1.46 | % | 1.57 | % | 1.14 | % | 0.95 | % | 1.33 | % | 1.22 | % | ||||||||||||||
Allowance
for loan losses to nonperforming
loans
|
53.84 | % | 78.42 | % | 44.97 | % | 78.10 | % | 52.30 | % | 78.67 | % | 901.28 | % | ||||||||||||||
Nonperforming
assets to total assets
|
4.47 | % | 1.50 | % | 3.80 | % | 1.13 | % | 1.37 | % | 1.38 | % | .12 | % |
(1)
|
Retroactively
adjusted for a 1.1-for-1 stock split effective January 13, 2009 and also
for a 2-for-1 stock split effective April 4,
2005.
|
(2)
|
Net
interest income divided by average earning
assets.
|
(3)
|
Non-interest
expense divided by the sum of net interest income and non-interest
income.
|
(4)
|
Shareholder
equity divided by shares
outstanding.
|
Name
|
Number of Shares
Beneficially Owned (1)
|
Percent of
Shares Outstanding
|
||||||
Directors:
|
||||||||
G.
Dennis Archer
|
99,816 |
(3)
|
* | |||||
John
R. Ferlin
|
128,724 |
(4)
|
1.3 | % | ||||
Gary
C. Forcum
|
159,262 | 1.6 | % | |||||
Susan
C. Freese
|
38,770 | * | ||||||
Edwin
Ketel
|
52,611 | * | ||||||
Randy
W. Rognlin
|
416,422 | 4.1 | % | |||||
Randy
Rust
|
113,103 | 1.1 | % | |||||
Douglas
M. Schermer
|
117,431 | 1.2 | % | |||||
Executive
Officers:
|
||||||||
Dennis
A. Long (2)
|
266,256 |
(5)
|
2.6 | % | ||||
Bruce
D. MacNaughton
|
98,180 | * | ||||||
Denise
Portmann
|
37,800 | * | ||||||
John
Van Dijk
|
91,850 | * | ||||||
Executive
Officers and Directors as a Group (12 persons)
|
1,620,225 | 15.4 | % | |||||
5%
or Greater Shareholders:
|
||||||||
Ithan
Creek Master Investers (Cayman) L.P
|
695,000 |
(6)
|
6.4 | % |
*
|
Less
than 1% of shares outstanding.
|
|
(1)
|
The
amounts shown include the following amounts of common stock each
individual has the right to acquire within 60 days of September 30,
2009, through the exercise of stock options granted pursuant to the
company's stock option plans and warrants to acquire common stock as
follows: Mr. Long, 134,517 shares (130,350 options and 4,167
warrants); Mr. MacNaughton, 75,956 shares (70,400 options and 5,556
warrants); Ms. Portmann, 29,450 shares (28,050 options and 1,400
warrants); Mr. Van Dijk, 36,850 shares (34,100 options and
2,750 warrants); Mr. Archer, 13,834 shares (5,500 options and 8,334
warrants); Mr. Ferlin, 19,389 shares (5,500 options and 13,889
warrants); Mr. Rust, 16,612 shares (5,500 options and 11,112 warrants);
Ms. Freese, 6,633 shares (3,300 options and 3,333 warrants); Mr.
Forcum, 14,825 shares (1,100 options and 13,725 warrants); Mr. Ketel,
7,350 shares (1,100 options and 6,250 warrants); Mr. Rognlin, 56,656
shares (1,100 options and 55,556 warrants); and Mr. Schermer, 13,600
shares (1,100 options and 12,500 warrants); and all executive officers and
directors as a group, 425,672 shares (287,100 options and 138,572
warrants).
|
|
(2)
|
Mr. Long
is also a director.
|
|
(3)
|
Includes
972 shares owned in a profit sharing
trust.
|
|
(4)
|
Includes
2,835 shares held by Mr. Ferlin's spouse as trustee for family
trusts.
|
|
(5)
|
Includes
60,000 shares pledged as security in connection with a margin account with
a securities broker.
|
|
(6)
|
Includes
139,000 shares that may be acquired upon exercise of outstanding
warrants. Wellington Hedge Management, LLC, is the sole general
partner of the listed shareholder. In its capacity as such, it
is deemed to share beneficial ownership of the listed
shares. Wellington Management Company, LLP (“Wellington Management”)
is an investment adviser registered under the Investment Advisers Act of
1940, as amended. Wellington Management, in such capacity, may be deemed
to share beneficial ownership of the shares owned by the listed
shareholder. The address for the listed shareholder is c/o
Wellington Management Company, LLP, 75 State Street, Boston,
MA 02109.
|
High
|
Low
|
|||||||
Year Ending December 31,
2009
|
||||||||
First
quarter
|
$ | 7.50 | $ | 5.50 | ||||
Second
quarter
|
$ | 6.25 | $ | 4.50 | ||||
Third
quarter (through September 15, 2009)
|
$ | 5.60 | $ | 4.10 | ||||
Year Ending December 31,
2008
|
||||||||
First
quarter
|
$ | 14.72 | $ | 10.50 | ||||
Second
quarter
|
$ | 14.50 | $ | 11.10 | ||||
Third
quarter
|
$ | 12.70 | $ | 8.50 | ||||
Fourth
quarter
|
$ | 10.00 | $ | 5.75 | ||||
Year Ending December 31,
2007
|
||||||||
Third
quarter
|
$ | 16.20 | $ | 14.50 | ||||
Fourth
quarter
|
$ | 15.25 | $ | 12.05 |
Name of Selling
Shareholder
|
Number of
shares of
Common
Stock owned
before the
offering
|
Number of
shares of
Common
Stock being
registered
|
Percentage of
Common Stock
owned before
the offering
|
Number of
shares of
Common
Stock owned
after the
offering
|
Percentage
of Common
Stock owned
after the
offering
|
|||||||||||||||
Ithan
Creek Master Investors (Cayman) L.P.
(1)
|
556,000 |
(2)
|
695,000 | 5.49 | % (3) | — | — |
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;
|
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
·
|
privately
negotiated transactions;
|
|
·
|
settlement
of short sales entered into after the effective date of the registration
statement of which this prospectus is a
part;
|
|
·
|
broker-dealers
may agree with the selling shareholder to sell a specified number of such
shares at a stipulated price per
share;
|
|
·
|
through
the writing or settlement of options or other hedging transactions,
whether such options are listed on an options exchange or
otherwise;
|
|
·
|
a
combination of any such methods of sale;
and
|
|
·
|
any
other method permitted pursuant to applicable
law.
|
SEC
registration fee
|
$ | 200 | ||
Blue
sky fees
|
$ | 1,000 | ||
Legal
fees and expenses
|
$ | 25,000 | ||
Accounting
fees and expenses
|
$ | 10,000 | ||
Printing
|
$ | 2,000 | ||
Miscellaneous
|
$ | 3,000 | ||
Total
|
$ | 41,200 |
|
(a)
|
The
registrant hereby undertakes:
|
|
(1)
|
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration
Statement:
|
|
(i)
|
To
include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933 ("Securities Act").
|
|
(ii)
|
To
reflect in the prospectus any facts or events arising after the effective
date of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration
Statement.
|
|
(iii)
|
To
include any material information with respect to the plan of distribution
not previously disclosed in the Registration Statement or any material
change to such information in the Registration
Statement.
|
|
(2)
|
That,
for the purpose of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
|
|
(3)
|
To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
|
|
(5)
|
That,
for the purpose of determining liability under the Securities Act to any
purchaser, each prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in
reliance on Rule 430A, shall be deemed to be part of and included in the
registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of
the registration statement will, as to a purchaser with a time of contract
of sale prior to such first use, supersede or modify any statement that
was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to
such date of first use.
|
|
(h)
|
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such
issue.
|
PACIFIC
FINANCIAL CORPORATION
|
|
By
|
/s/ Dennis A. Long
|
Dennis
A. Long
|
|
President
and Chief Executive Officer
|
Signature
|
Title
|
||
Principal
Executive Officer and Director:
|
|||
/s/Dennis A. Long |
President,
Chief Executive Officer,
|
||
Dennis
A. Long
|
and
Director
|
||
Principal
Financial and Accounting Officer:
|
/s/Denise Portmann
|
|
||
Denise
Portmann
|
Chief
Financial
Officer
|
A
majority of the Board of Directors:
|
||
*GARY
C. FORCUM
|
Director
(Chairman of the Board)
|
|
*G.
DENNIS ARCHER
|
Director
|
|
*JOHN
R. FERLIN
|
Director
|
|
*SUSAN
C. FREESE
|
Director
|
|
*EDWIN
KETEL
|
Director
|
|
*RANDY
W. ROGNLIN
|
Director
|
|
*RANDY
RUST
|
Director
|
|
*DOUGLAS
M. SCHERMER
|
Director
|
*By:
|
/s/ Denise Portmann
|
Denise
Portmann, as
attorney-in-fact
|
Exhibit No.
|
Exhibit
|
|
3(i)
|
Restated
Articles of Incorporation. Incorporated by reference to Exhibit
3.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2000.
|
|
3(ii)
|
Bylaws. Incorporated
by reference to Exhibit 2b to Form 8-A filed by the Company and declared
effective on March 7, 2000 (Registration
No. 000-29329).
|
|
4
|
Form
of Warrant. Incorporated by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K dated August 28, 2009 (the "August
2009 8-K").
|
|
5
|
Opinion
of Miller Nash LLP.
|
|
10.1
|
Amended
and Restated Employment Agreement with Dennis A. Long dated December 29,
2008. Incorporated by reference to Exhibit 10.1 to the
Company’s Annual Report on Form 10-K for the year ended December 31, 2008
(the “2008 10-K”).*
|
|
10.2
|
Amended
and Restated Employment Agreement with John Van Dijk dated December 29,
2008. Incorporated by reference to Exhibit 10.2 to the 2008
10-K.*
|
|
10.3
|
Amended
and Restated Employment Agreement with Bruce D. MacNaughton dated December
29, 2008. Incorporated by reference to Exhibit 10.3 to the 2008
10-K.*
|
|
10.4
|
Amended
and Restated Employment Agreement with Denise Portmann dated December 29,
2008. Incorporated by reference to Exhibit 10.4 to the 2008
10-K.*
|
|
10.5
|
Bank
of the Pacific Incentive Stock Option Plan. Incorporated by
reference to Exhibit 10.7 to the Company’s Annual Report on Form 10-K for
the year ended December 31, 1999 (the “1999 10-K”).*
|
|
10.6
|
The
Bank of Grays Harbor Incentive Stock Option Plan. Incorporated
by reference to Exhibit 10.8 of the 1999 10-K.*
|
|
10.7
|
2000
Stock Incentive Compensation Plan, as amended (the “2000
Plan”). Incorporated by reference to Exhibit 10.1 to the
Company’s Quarterly Report on Form 10-Q for the quarter ended March 31,
2007 (the “March 2007 10-Q”).*
|
|
10.8
|
Forms
of stock option agreements under the 2000 Plan. Incorporated by
reference to Exhibits 10.2 and 10.3 to the March 2007
10-Q.*
|
|
10.9
|
The
Bank of Grays Harbor Employee Deferred Compensation
Plan. Incorporated by reference to Exhibit 10.10 to the
Company’s Annual Report on Form 10-K for the year ended December 31,
2000.*
|
|
10.10
|
Supplemental
Executive Retirement Plan effective January 1,
2007. Incorporated by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K dated March 13, 2008 (the “March 2008
8-K”).*
|
|
10.11
|
Individual
Participation Agreement (SERP) dated March 13, 2008, between the Company
and Dennis A. Long. Incorporated by reference to Exhibit 10.2
to the March 2008
8-K.*
|
Exhibit No.
|
Exhibit
|
|
10.12
|
Individual
Participation Agreement (SERP) dated March 13, 2008, between the Company
and John Van Dijk. Incorporated by reference to Exhibit 10.3 to
the March 2008 8-K.*
|
|
10.13
|
Individual
Participation Agreement (SERP) dated March 13, 2008, between the Company
and Bruce MacNaughton. Incorporated by reference to Exhibit
10.4 to the March 2008 8-K.*
|
|
10.14
|
Individual
Participation Agreement (SERP) dated March 13, 2008, between the Company
and Denise Portmann. Incorporated by reference to Exhibit 10.5
to the March 2008 8-K.*
|
|
10.15
|
Securities
Purchase Agreement dated August 25, 2009, between the Company and the
selling shareholder. Incorporated by reference to Exhibit 10.1
to the August 2009 8-K.
|
|
10.16
|
Registration
Rights Agreement dated August 25, 2009, between the Company and the
selling shareholder. Incorporated by reference to Exhibit 10.2
to the August 2009 8-K.
|
|
10.17
|
Subsidiaries
of the Company. Bank of the Pacific, organized under Washington
law.
|
|
23.1
|
Consent
of Deloitte & Touche LLP, Independent Registered Public Accounting
Firm.
|
|
23.2
|
Consent
of Miller Nash LLP (included in Exhibit 5).
|
|
24
|
Power
of attorney.
|