8-K

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): April 26, 2016

PACIFIC CONTINENTAL CORPORATION

(Exact name of registrant as specified in its charter)

Oregon	000-30106	93-1269184
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

111 West 7th Avenue

Eugene, Oregon 97401

(Address of principal executive offices) (Zip Code)

Tel. (541) 686-8685

Registrant’s telephone number, including area code

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 (see General Instruction A.2. below):

x 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 Continental Corporation, Eugene, Oregon (“PCBK”) expects to make a presentation concerning its announced acquisition of Foundation Bancorp, Inc. on April 27, 2016, at 10:00 a.m. PT. PCBK intends to make presentation materials available to investors and post the presentation under the “Investor Relations” tab on its website, which is located at www.therightbank.com. A copy of the investor presentation materials is furnished herewith as Exhibit 99.2 to this Form 8-K. The information in the presentation shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 8.01. Other Events

On April 26, 2016, PCBK and its subsidiary, Pacific Continental Bank (“PCB”), announced that it had entered into a definitive agreement to acquire Bellevue, Washington, based Foundation Bancorp, Inc., and its wholly-owned subsidiary, Foundation Bank. Pursuant to the agreement, Foundation Bancorp, Inc., will merge with and into PCBK, with PCBK as the surviving corporation (the “Merger”), upon the terms and subject to the conditions in the agreement. In connection with the Merger, each Foundation Bancorp, Inc. shareholder will have the right to elect to receive, for each share of Foundation Bancorp, Inc. common stock owned by such shareholder, without interest, either (i) 0.7911 shares of PCBK common stock, or (ii) $12.50 in cash, subject to the payment of cash in lieu of fractional shares and customary adjustment, election and allocation procedures, if necessary to assure that the aggregate cash consideration paid is approximately $19.3 million, subject to potential adjustment. The Foundation Bancorp preferred stock outstanding immediately prior to the effective time of the Merger will be converted into the right to receive the Merger consideration with respect to 1,500,000 shares of Foundation Bancorp, Inc., common stock, together with cumulative cash dividends payable to such holders. The boards of directors of each company have unanimously approved this transaction. Completion of the transaction is subject to customary closing conditions, including receipt of bank regulatory approvals and the approval of Foundation Bancorp, Inc.’s common and preferred shareholders. The transaction is expected to close by the end of the third quarter of 2016.

A copy of the April 26, 2016, press release announcement is furnished herewith as Exhibit 99.1 to this Form 8-K.

Additional Information

This communication is being made in respect of the proposed merger transaction involving Pacific Continental and Foundation Bancorp. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities.

In connection with the proposed merger transaction, Pacific Continental will file with the Securities and Exchange Commission a Registration Statement on Form S-4 that will include a Proxy Statement of Foundation Bancorp, Inc., and a Prospectus of Pacific Continental, as well as other relevant documents concerning the proposed transaction. Shareholders are urged to read the Registration Statement and the Proxy Statement/Prospectus regarding the proposed merger when it becomes available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. A free copy of the Proxy Statement/Prospectus, as well as other filings containing information about Pacific Continental and Foundation Bancorp, may be obtained at the SEC’s Internet site (http://www.sec.gov). You will also be able to obtain these documents, free of charge, from Pacific Continental at www.therightbank.com under the tab “Investor Relations” and then under the heading “Financials – SEC Filings”, or from Pacific Continental’s Investor Relations, by calling 541-686-8685.

Pacific Continental and Foundation Bancorp and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Foundation Bancorp in connection with the proposed merger. Information about the directors and executive officers of Pacific Continental is set forth in the proxy statement for Pacific Continental’s 2016 annual meeting of shareholders, as filed with the SEC on Schedule 14A on March 15, 2016. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the Proxy Statement/Prospectus and other relevant documents regarding the proposed Merger filed with the SEC when they become available. Copies of these documents may be obtained free of charge from the sources described above.

Forward-Looking Statement Safe Harbor

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”). Such forward-looking statements include but are not limited to statements about the benefits of the business combination transaction involving Pacific Continental and Foundation Bancorp, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions, expectations regarding the timing of the closing of the transaction and its impact on Pacific Continental’s earnings, expectations regarding pro forma combined assets, loans and deposits and other statements that are not historical facts. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected, including but not limited to the following: the possibility that the merger does not close when expected or at all because required regulatory, shareholder or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all; the risk that the benefits from the transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which Pacific Continental Corporation and Foundation Bancorp operate; the ability to promptly and effectively integrate the businesses of Pacific Continental Bank and Foundation Bank; the reaction to the transaction of the companies’ customers, employees, and counterparties; and the diversion of management time on merger-related issues. Readers are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date on which they are made and reflect management’s current estimates, projections, expectations and beliefs. Pacific Continental Corporation undertakes no obligation to publicly revise or update the forward-looking statements to reflect events or circumstances that arise after the date of this release. This statement is included for the express purpose of invoking PSLRA’s safe harbor provisions.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1	Press Release Dated April 26, 2016
99.2	Investor Presentation Dated April 26, 2016

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 hereunto duly authorized.

Date: April 26, 2016

PACIFIC CONTINENTAL CORPORATION
By:	/s/ Richard R. Sawyer
	Richard R. Sawyer Executive Vice President Chief Financial Officer

EX-99.1

Exhibit 99.1

 

FOR MORE INFORMATION CONTACT: Michael Dunne, Public Information Officer

Pacific Continental Corporation

(541) 338-1428

Email: Michael.Dunne@therightbank.com

www.therightbank.com

Duane C. Woods, Vice Chair and Interim CEO

Foundation Bank

(425) 691-5013

Email: Duane.Woods@foundationbank.com

www.foundationbank.com

FOR IMMEDIATE RELEASE

PACIFIC CONTINENTAL CORPORATION ANNOUNCES PLAN TO ACQUIRE FOUNDATION BANCORP, INC.

Pacific Continental Will Significantly Expand Presence in the Attractive Seattle Metropolitan Area

BELLEVUE, Wash, April, 26, 2016 — Pacific Continental Corporation (NASDAQ: PCBK) (the “Company”), the holding company of Pacific Continental Bank, and Foundation Bancorp, Inc. (OTCPink: FDNB) (“Foundation”), the holding company of Foundation Bank, announced the signing of an agreement and plan of merger pursuant to which Foundation shall be merged with and into the Company. Foundation is headquartered in downtown Bellevue, Washington and had $422.4 million in total assets, $299.3 million in gross loans and $367.5 million in total deposits as of March 31, 2016.

On a pro forma combined basis, the Company would have total assets of $2.4 billion, total loans outstanding of $1.7 billion and total deposits of $2.1 billion as of March 31, 2016 (unaudited), including $443.8 million in loans and $561.9 million in deposits in the Seattle metropolitan area.

Under the terms of the agreement, which has been unanimously approved by the boards of directors of Pacific Continental Corporation, Pacific Continental Bank, Foundation Bancorp, Inc. and Foundation Bank, the shareholders of Foundation may elect to receive either 0.7911 shares of the Company’s common stock, $12.50 per share in cash or a combination thereof, for each share of Foundation common stock. The preferred stock of Foundation will become convertible into the right to receive the merger consideration with respect to 1,500,000 shares of Foundation Bancorp, Inc. common stock, together with cumulative cash dividends payable to such holders. Based on a $16.74 closing price of the Company’s common stock on April 26, 2016 the aggregate consideration for Foundation was approximately $67.1 million, or $13.02 per share. The number of shares of the Company’s common stock to be issued to Foundation shareholders is based on a fixed exchange ratio. The value of the stock portion of the consideration will fluctuate based on the value of the Company’s common stock. To the

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extent there are under or over subscriptions for cash election shares by Foundation shareholders, under the terms of the merger agreement there will be a re-allocation of the merger consideration for such Foundation shareholders such that the aggregate cash consideration shall equal approximately $19.3 million.

Roger Busse, chief executive officer of Pacific Continental Bank, commented, “The acquisition of Foundation should provide us with meaningful operational scale and momentum in the Seattle market and we are excited to welcome Foundation’s employees and clients into our bank.” Busse added, “The Seattle metropolitan area is an important market for us with attractive economic and demographic trends. Foundation has built an attractive business banking franchise and we believe the combined company will be better positioned to take advantage of growth opportunities and generate stronger returns for shareholders.”

“Pacific Continental Bank is one of the most successful and well-regarded community business banks in the Pacific Northwest,” said Duane Woods, vice chair and interim chief executive officer of Foundation Bank. “Our clients and employees should thrive within the culture and business environment created by Pacific Continental’s more than 40 years of excellent community and client service.”

Casey Hogan, chief operating officer of Pacific Continental Bank, commented, “Foundation has created an attractive franchise in the Seattle business community and we recognize the tremendous value of adding their business and employees to ours.” Hogan continued, “We will continue to provide superior client service, and we welcome the Foundation Bank employees and are honored to work with them as partners going forward.”

The Company expects that the transaction will be immediately accretive to earnings per share excluding non-recurring merger-related expenses.

The transaction is expected to close by the end of the third quarter of 2016, subject to satisfaction of customary conditions of closing including receipt of required regulatory approvals and approval by the common and preferred shareholders of Foundation. The Company will appoint two representatives from Foundation Bancorp, Inc. to serve on the Boards of Directors of each of Pacific Continental Corporation and Pacific Continental Bank, effective upon closing.

A conference call is scheduled for 10:00 a.m. PT / 1:00 p.m. ET on Wednesday, April 27, 2016 and can be accessed by calling: (855) 215-7498. Passcode: 1554389

Inquiries

For Pacific Continental Bank:

• Analyst and shareholder: Rick Sawyer, (541) 686-8685, rick.sawyer@therightbank.com

• Client: Mitch Hagstrom, (541) 686-8685, mitch.hagstrom@therightbank.com

• Media: Michael Dunne, (541) 338-1428, michael.dunne@therightbank.com

For Foundation Bank:

• Shareholder: Randy Cloes, (425) 691-5014, randy.cloes@foundationbank.com

• Client: Jocelyn Lane, (425) 691-5010, jocelyn.lane@foundationbank.com

• Media: Duane Woods, (425) 691-5013, duane.woods@foundationbank.com

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Additional Information

An investor presentation for this transaction can be accessed from Pacific Continental’s 8-K filing with the SEC or at http://www.therightbank.com.

Advisors

D.A. Davidson & Co. served as financial advisor and Pillsbury Winthrop Shaw Pittman LLP served as legal counsel to Pacific Continental. Keefe Bruyette & Woods, Inc. served as financial advisor and provided a fairness opinion to Foundation’s board of directors. Sidley Austin LLP served as legal counsel to Foundation.

About Foundation Bank

Foundation Bancorp, Inc. is a bank holding company based in Bellevue, Washington, that operates Foundation Bank, a locally owned, full service, state chartered commercial bank. Foundation Bank has been serving the greater Puget Sound region since 2000. Since its founding, Foundation has built its reputation on high-touch relationship banking serving the greater Puget Sound region.

About Pacific Continental Bank

Pacific Continental Bank, the operating subsidiary of Pacific Continental Corporation, delivers highly personalized services through 14 banking offices in Oregon and Washington. The Bank also operates loan production offices in Tacoma, Washington and Denver, Colorado. Pacific Continental, with $2.0 billion in assets, has established one of the most unique and attractive metropolitan branch networks in the Pacific Northwest with offices in three of the region’s largest markets including Seattle, Portland and Eugene. Pacific Continental targets the banking needs of community-based businesses, health care professionals, professional service providers and nonprofit organizations.

Since its founding in 1972, Pacific Continental Bank has been honored with numerous awards and recognitions from highly regarded third-party organizations including the Seattle Times, the Portland Business Journal, Seattle Business magazine and Oregon Business magazine. A complete list of the company’s awards and recognitions – as well as supplementary information about Pacific Continental Bank – can be found online at therightbank.com. Pacific Continental Corporation’s shares are listed on the Nasdaq Global Select Market under the symbol “PCBK” and are a component of the Russell 2000 Index.

Additional Information for Shareholders

This communication is being made in respect of the proposed merger transaction involving Pacific Continental and Foundation. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities.

In connection with the proposed merger transaction, Pacific Continental will file with the Securities and Exchange Commission a Registration Statement on Form S-4 that will include a Proxy Statement of Foundation, and a Prospectus of Foundation, as well as other relevant documents concerning the proposed transaction. Shareholders are urged to read the Registration Statement and the Proxy Statement/Prospectus regarding the proposed merger when it becomes available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. A free copy of the Proxy Statement/Prospectus, as well as other filings containing information about Pacific Continental and Foundation, may be obtained at the

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SEC’s Internet site (http://www.sec.gov). You will also be able to obtain these documents, free of charge, from Pacific Continental at www.therightbank.com under the tab “Investor Relations” and then under the heading “Financials – SEC Filings”, or from Pacific Continental’s Investor Relations, by calling 541-686-8685.

Pacific Continental and Foundation and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Foundation in connection with the proposed merger. Information about the directors and executive officers of Pacific Continental is set forth in the proxy statement for Pacific Continental’s 2015 annual meeting of shareholders, as filed with the SEC on Schedule 14A on March 15, 2016. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the Proxy Statement/Prospectus and other relevant documents regarding the proposed Merger filed with the SEC when they become available. Copies of these documents may be obtained free of charge from the sources described above.

Forward-Looking Statement Safe Harbor

This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”). Such forward-looking statements include but are not limited to statements about the benefits of the business combination transaction involving Pacific Continental and Foundation, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions, expectations regarding the timing of the closing of the transaction and its impact on Pacific Continental’s earnings, expectations regarding pro forma combined assets, loans and deposits and other statements that are not historical facts. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected, including but not limited to the following: the possibility that the merger does not close when expected or at all because required regulatory, shareholder or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all; the risk that the benefits from the transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which Pacific Continental Corporation and Foundation operate; the ability to promptly and effectively integrate the businesses of Pacific Continental Bank and Foundation; the reaction to the transaction of the companies’ customers, employees, and counterparties; and the diversion of management time on merger-related issues. Readers are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date on which they are made and reflect management’s current estimates, projections, expectations and beliefs. Pacific Continental Corporation undertakes no obligation to publicly revise or update the forward-looking statements to reflect events or circumstances that arise after the date of this release. This statement is included for the express purpose of invoking PSLRA’s safe harbor provisions.

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EX-99.2

Pacific Continental Corporation to Acquire Foundation Bancorp, Inc. Pacific Continental Corporation (NASDAQ: PCBK) Roger S. Busse President and Chief Executive Officer Investor Presentation April 26, 2016 Foundation Bancorp, Inc. (OTC Pink: FDNB) Duane C. Woods Vice Chairman and Interim Chief Executive Officer Expanding PCBK’s presence in the attractive Seattle metropolitan area Exhibit 99.2

Forward-Looking Statement This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). Such forward-looking statements include but are not limited to statements about the benefits of the business combination transaction involving Pacific Continental Corporation and Foundation Bancorp, Inc., including future financial and operating results, the combined company’s plans, objectives, market share, expectations and intentions, expectations regarding the timing of the closing of the transaction and its impact on Pacific Continental’s earnings, expectations regarding pro forma combined assets, loans and deposits and other statements that are not historical facts. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected, including but not limited to the following: the possibility that the merger does not close when expected or at all because required regulatory, shareholder or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all; the risk that the benefits from the transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which Pacific Continental Corporation and Foundation Bancorp, Inc. operate; the ability to promptly and effectively integrate the businesses of Pacific Continental and Foundation Bancorp, Inc.; the reaction to the transaction of the companies’ customers, employees, and counterparties; and the diversion of management time on merger-related issues. Readers are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date on which they are made and reflect management’s current estimates, projections, expectations and beliefs. Pacific Continental Corporation undertakes no obligation to publicly revise or update the forward-looking statements to reflect events or circumstances that arise after the date of this presentation. This statement is included for the express purpose of invoking PSLRA's safe harbor provisions.

Merger Rationale Financially attractive combination – effective use of capital will enhance returns and shareholder value Meaningfully accretive to EPS – double-digit EPS accretion when cost savings fully phased-in Attractive business banking franchise in the Seattle metropolitan area with $422.4 million in assets Foundation is one of the few independently-owned business banking franchises in the Seattle-Tacoma-Bellevue MSA PCBK allocating capital to the Seattle market – attractive geography given the growth prospects and economic trends Recognized as one of the best economies in the country, which presents important opportunities for a business banking franchise Provides PCBK with an enhanced platform in the Seattle metropolitan area Pro forma will have $561.9 million of deposits and $443.8 million of loans in the Seattle metropolitan area Larger size in Seattle will help PCBK attract and retain talented bankers Foundation’s key relationship bankers expected to be retained Meaningful cost savings opportunities, including branch consolidation – estimated cost savings in excess of 40.0% Enhances PCBK’s scarcity value as a bank with pro forma assets of $2.4 billion which is located in 3 of the Pacific Northwest’s largest metropolitan markets of Eugene, Portland and Seattle Well positioned for continued growth Supports PCBK’s strategic goal for quality organic growth and acquisitions Source: SNL Financial, PCBK earnings release and Foundation earnings release, as of 3/31/2016

Overview of Foundation Bancorp, Inc. 1 office location in downtown Bellevue, Washington Foundation was established in 2000 Traditional business banking loan portfolio 35.1% C&I loans and 18.5% owner-occupied CRE 16.0% loan growth in Q1 2016 (compared to Q4 2015) Attractive core deposit base with business focus 45.8% is non-interest bearing deposits and 97.8% is non-CDs 83% of total deposits from business customers Total cost of deposits is 0.18% Specialty niche in HOA and property management clients 81.4% loan/deposit ratio Financial results in Q1 2016 included net income of $743 thousand, ROAA of 0.68% and NIM of 3.58% Non-performing assets / total assets of 1.75%, including $7.4 million of non-accrual loans and $0 OREO Non-performing assets decreased 35.2% in Q1 2016 Source: SNL Financial, PCBK earnings release and Foundation earnings release, as of 3/31/2016 Note: All dollars in thousands Note: Non-performing assets exclude troubled debt restructurings

Transaction Overview Transaction Value Aggregate consideration of $67.1 million or $13.02 per share of Foundation common stock(1) Consideration mix approximately 70% stock and 30% cash Shareholders receive 2,855,093 shares of PCBK, or $47.8 million in stock(1) Shareholders receive $19.3 million in cash Foundation shareholders will have pro forma ownership of approximately 12.7% in PCBK Shareholders can elect to receive either 0.7911 PCBK shares per share of Foundation (fixed exchange ratio, no caps/collars) or $12.50 per share in cash, or a mix thereof Anticipated Timing Expected completion in Q3 2016 Required Approvals Customary regulatory approvals and approval from Foundation common shareholders and preferred shareholders Board of Directors 2 representatives from Foundation will be appointed to the PCBK board of directors at closing, including Thomas Ellison and Duane Woods (1) Based on PCBK stock price of $16.74 as of 4/26/2016. Transaction value will change based on fluctuation in PCBK’s stock price. Consideration includes restricted stock which will vest upon change in control and Foundation preferred stock on as-converted basis. Note, the exchange ratio was determined based on PCBK’s average 10-day stock price of $15.80 as of 3/24/2016 (2) Holders of Foundation preferred stock will also receive a cumulative cash dividend at closing which would be $4.0 million if the closing occurred at 3/31/2016 Preferred Stock Foundation has outstanding convertible preferred stock of $15.0 million which will receive the same consideration mix as the holders of common stock at closing, plus dividends(2) Voting Agreements Entered into voting agreements with Castle Creek Capital (holder of the Foundation preferred stock), Thomas Ellison, the Board of Directors and senior management, which represents 48.2% of shares outstanding

Assumptions and Financial Impact Valuation Multiples Aggregate consideration of $67.1 million or $13.02 per share of Foundation common stock(1) Price / book value of 143.5%(2) Price / earnings of 22.6x (annualized Q1 2016 earnings) Financially Compelling Pro Forma Results Immediately accretive to earnings(3) 6.5% earnings per share accretion in 2017 and 10.1% in 2018(3) Internal rate of return in excess of 15% Tangible book value per share dilution of 5.8% at closing Payback period of ~3 years based on incremental earnings per share method(4) Source: Foundation earnings release, as of 3/31/2016 (1) Based on PCBK stock price of $16.74 as of 4/26/2016 (2) Book value includes preferred stock on as-converted basis, prior to the impact from the cumulative cash dividend described on the previous page (3) PCBK average EPS estimates for 2016 and 2017 per SNL FactSet and growth rate in 2018. Excludes non‐recurring merger-related expenses (4) Number of years it takes to eliminate the tangible book value per share dilution with the estimated pro forma PCBK EPS accretion Cost Savings Estimated cost savings in excess of 40.0% of Foundation’s annual non-interest expense Cost savings are 75% phased-in for 2017 and 100% phased-in for 2018 Other Key Assumptions Fair value adjustment on loans of –3.70%, or approximately $11.1 million, including a credit mark of $9.0 million and interest rate mark of $2.1 million Fair value adjustment on TRUPs of -46.95%, or approximately $2.9 million Core deposit intangible asset of approximately $6.2 million (10-year accelerated amortization) Pre-tax non-recurring merger expenses of approximately $8.4 million No revenue synergies are assumed Performed significant due diligence, including credit review and 3rd party fair value review Due Diligence PCBK will remain well capitalized – pro forma leverage ratio of approximately 8.7% and risk based capital ratio greater than 11% Capital Ratios

Pro Forma Branch Footprint Pacific Continental Branch Foundation Branch Strengthens presence in the Seattle metropolitan area PCBK currently has a branch in Seattle and Bellevue Expects to consolidate PCBK’s existing branch in Bellevue into Foundation’s branch, subject to regulatory approval Average deposits per branch in Seattle of $281.0 million on a pro forma basis (compared to $112.9 million in Eugene and $129.8 million in Portland) Attractive geographic distribution for combined company in Seattle, Portland and Eugene Note: Loan and deposit information does not include PCBK’s national healthcare loans or deposits considered non-core Seattle: 2 branches $443.8 MM loans $561.9 MM deposits Portland: 5 branches $684.0 MM loans $649.1 MM deposits Eugene: 7 branches $372.1 MM loans $790.4 MM deposits 0.6 Miles Apart Increases average deposits per branch to $281.0 million in Seattle metropolitan area

Loan and Deposit Mix by Geography Seattle Market Loan Mix – Pro Forma Deposit Mix – Pro Forma Source: SNL Financial, PCBK earnings release and Foundation earnings release, as of 3/31/2016 Note: All dollars in millions PCBK will have a platform in Seattle for growth $561.9 million in deposits and $443.8 million in loans Seattle market will account for 25.6% of PCBK’s loan portfolio and 27.2% of PCBK’s deposit base, on a pro forma basis Increases PCBK’s Seattle franchise by 2x

Enhanced Market Position Would rank as the 5th largest company by market share in the combined cities of Seattle, WA and Bellevue, WA, for banks headquartered in the Pacific Northwest Source: SNL Financial, as of 6/30/2015 Note: All dollars in thousands

Attractive Economic Profile of Seattle Job Growth Thriving local economy with job growth in technology and aerospace Seattle ranked 4th among major U.S. cities for job growth in 2015 by adding 78,082 jobs. Three of the five most demanded jobs are in tech, particularly software engineering(1,2) Economic Profile 10 companies on the Fortune 500 list headquartered in Seattle-Tacoma-Bellevue MSA, including Amazon, Costco, Microsoft and Starbucks The Seattle-Tacoma-Bellevue MSA ranked 11th largest in the country by GDP in 2014, increasing 16.8% since 2010(3) Real median household income in Seattle was $71,273 in 2014, 16.1% higher than the Washington State average and 38.8% above the national average(4) Seattle had the highest income growth for households in the 95th percentile during 2013 – median income grew 15% to $278,084(5) Demographic Trends Seattle was the 3rd fastest growing city among the top-50 U.S. cities with 2.3% population growth in 2014. Bellevue population grew at 1.8%(6) 57% of adult residents in Seattle have a bachelor’s degree or higher, nearly 2.0x the national average(7) 37.2% of Seattle residents are between ages 25 and 44(4) Source: Puget Sound Business Journal Source: MYNorthwest News Source: U.S. Census Bureau Source: Bureau of Economic Analysis Brookings Institution Source: The Seattle Times Source: Seattle Economic Development Council

Loan Portfolio Mix – Diversified Portfolio PCBK Foundation Combined* Source: SNL Financial, PCBK earnings release and Foundation call report, as of 3/31/2016 Note: All dollars in thousands *Does not include purchase accounting adjustments Similarity of business banking loan mix with sizeable portfolios for C&I and owner occupied CRE PCBK’s dental loan portfolio will decrease from 24.5% of total loans to 20.3% on a pro forma basis Balance % of Total Balance % of Total Balance % of Total Construction & Development 105,723 $ 7.4% Construction & Development 19,519 $ 6.5% Construction & Development 125,242 $ 7.2% 1-4 Family 51,356 $ 3.6% 1-4 Family 16,096 $ 5.4% 1-4 Family 67,452 $ 3.9% Multi-Family 66,419 $ 4.6% Multi-Family 13,798 $ 4.6% Multi-Family 80,217 $ 4.6% Owner Occupied CRE 373,002 $ 26.1% Owner Occupied CRE 55,420 $ 18.5% Owner Occupied CRE 428,422 $ 24.7% Non-Owner Occupied CRE 320,485 $ 22.4% Non-Owner Occupied CRE 79,883 $ 26.6% Non-Owner Occupied CRE 400,368 $ 23.1% Commercial & Industrial 505,845 $ 35.3% Commercial & Industrial 105,327 $ 35.1% Commercial & Industrial 611,172 $ 35.3% Other 8,473 $ 0.6% Other 9,892 $ 3.3% Other 18,365 $ 1.1% Total Loans 1,431,303 $ 100.0% Total Loans 299,935 $ 100.0% Total Loans 1,731,238 $ 100.0% Less: Def. Loan Orig. Fees (1,569) $ Less: Def. Loan Orig. Fees (672) $ Less: Def. Loan Orig. Fees (2,241) $ Gross Loans 1,429,734 $ Gross Loans 299,263 $ Gross Loans 1,728,997 $ Commercial Real Estate 693,487 $ 48.5% Commercial Real Estate 135,303 $ 45.1% Commercial Real Estate 828,790 $ 47.9% Own. Occ. CRE + C&I 878,847 $ 61.4% Own. Occ. CRE + C&I 160,747 $ 53.6% Own. Occ. CRE + C&I 1,039,594 $ 60.0% Yield on Loans 4.99% Yield on Loans 4.80% Yield on Loans 4.96%

Deposit Mix – Attractive Core Deposits PCBK Foundation Combined* Source: SNL Financial, PCBK earnings release and Foundation earnings release, as of 3/31/2016 Note: All dollars in thousands *Does not include purchase accounting adjustments Accretive low-cost deposit franchise with 45.8% non-interest bearing demand deposits and 97.8% non-CDs Balance ($000s) % of Total Balance ($000s) % of Total Balance ($000s) % of Total Non-Interest Bearing Demand 675,296 $ 39.8% Non-Interest Bearing Demand 168,401 $ 45.8% Non-Interest Bearing Demand 843,697 $ 40.9% Savings and Interest Checking 887,873 $ 52.3% Savings and Interest Checking 191,017 $ 52.0% Savings and Interest Checking 1,078,890 $ 52.3% CDs 133,419 $ 7.9% CDs 8,111 $ 2.2% CDs 141,530 $ 6.9% Total Deposits 1,696,588 $ 100.0% Total Deposits 367,529 $ 100.0% Total Deposits 2,064,117 $ 100.0% Interest-Bearing Deposits 1,021,292 $ 60.2% Interest-Bearing Deposits 199,128 $ 54.2% Interest-Bearing Deposits 1,220,420 $ 59.1% Total CDs 133,419 $ 7.9% Total CDs 8,111 $ 2.2% Total CDs 141,530 $ 6.9% Non-CDs 1,563,169 $ 92.1% Non-CDs 359,418 $ 97.8% Non-CDs 1,922,587 $ 93.1% Cost of Total Deposits 0.21% Cost of Total Deposits 0.18% Cost of Total Deposits 0.21%

Concluding Thoughts Financially attractive combination – effective use of capital will enhance returns and shareholder value Allocating capital to Seattle, which is an attractive market due to demographic and economic trends Seattle has been a “priority” for PCBK’s strategic focus – this represents the ideal opportunity and timing for expanding PCBK’s franchise in this market Significant scarcity value for a business banking franchise in Seattle PCBK management knows the bank and management team and has followed the company for years The pro forma company will be well-positioned for continued growth in the Seattle marketplace PCBK has successful track record for merger integration, most recently with Capital Pacific Bank in Portland, OR