Pacific Financial and Bank of the Pacific continue to exceed regulatory well-capitalized requirements. At June 30, 2025, Pacific Financial’s estimated leverage ratio was 10.9% and its estimated total risk-based capital ratio was 16.9%.

Shareholder equity increased $2.0 million during the quarter largely due to net income and lower accumulated other comprehensive loss marks on the available-for-sale investment portfolio, partially offset by dividend payments. The tangible book value per share was $10.53 at June 30, 2025, an increase from $9.82 at June 30, 2024.

Non-performing assets to total assets ratio declined to 0.04%, or $468,000 for the current quarter end compared to 0.10% and $1.2 million three months earlier. Substandard loans decreased $1.0 million to $1.6 million at June 30, 2025 and special mention assets declined $494,000 to $9.6 million at June 30, 2025.

Total deposits decreased $3.8 million to $1.07 billion at June 30, 2025 compared to the previous quarter and increased $85.2 million, or 9%, from one year earlier. Non-interest-bearing deposits were at 40% of total deposits at June 30, 2025 and support a lower cost core deposits portfolio. Core deposits were 88% of total deposits at June 30, 2025.

Provision for credit losses increased to $387,000 for the second quarter ended June 30, 2025 due to loan growth, compared to $83,000 for the preceding quarter and $304,000 in the second quarter a year ago.

Net interest income was $11.9 million, compared to $11.3 million for the first quarter of 2025, and $10.8 million for the second quarter of 2024.

Return on average equity (“ROAE”) was 9.14%, compared to 8.48% from the preceding quarter, and 7.47% from the second quarter a year earlier.

Return on average assets (“ROAA”) improved to 0.89%, compared to 0.81% for the first quarter 2025, and 0.76% for the second quarter 2024.

“Asset quality continues to remain pristine with non-performing assets totaling only 0.04% of total assets, or less than $500,000. We remain focused on delivering strong returns to our shareholders through our operations and managing our capital to support growth and enhance shareholder value,” said Portmann.

“We are pleased with the strategic execution of loan growth initiatives throughout our network. Loan balances grew 6% in the second quarter, enabling us to convert cash into higher yielding loans. Loan demand improved compared to the first quarter, which had been tempered by economic uncertainty. This loan growth during the current quarter combined with a continued decrease in our deposit cost of funds resulted in an 11 basis point increase in our net interest margin. Our funding base continues to benefit from a large balance of non-interest bearing deposits which account for 40% of total deposits,” said Denise Portmann, President and Chief Executive Officer.

The Board of Directors of Pacific Financial declared a quarterly cash dividend of $0.14 per share on July 16, 2025. The dividend will be payable on August 22, 2025 to shareholders of record on August 8, 2025.

ABERDEEN, Wash., July 25, 2025 (GLOBE NEWSWIRE) — Pacific Financial Corporation (OTCQX: PFLC), (“Pacific Financial”) or (the “Company”), the holding company for Bank of the Pacific (the “Bank”), reported net income of $2.7 million, or $0.27 per diluted share for the second quarter of 2025, compared to $2.4 million, or $0.24 per diluted share for the first quarter of 2025, and $2.1 million, or $0.21 per diluted share for the second quarter of 2024. The current quarter’s net income relative to the prior quarter reflects an increase in net interest income and higher non-interest income, partially offset by an increase in non-interest expenses. Except for year-end December 31, 2024 financials, all results are unaudited.

Story Continues

Balance Sheet Review

Total assets remained at $1.22 billion at June 30, 2025, and increased slightly from $1.12 billion at June 30, 2024.

Cash and interest earning deposits decreased $45.0 million to $98.8 million at June 30, 2025 from $143.8 million at March 31, 2025, and increased $22.9 million from $75.9 million one year earlier. The decrease compared to the prior quarter largely relates to funds used to support loan growth during the current quarter.

Liquidity metrics continue to be strong and are managed to ensure adequate funding resources are available to meet customer demand. At June 30, 2025, the Company’s on and off-balance sheet sources totaled $516.7 million. This represents a coverage ratio of short-term funds available to uninsured and uncollateralized deposits of 190%. Included in available sources are collateralized credit lines the Company has established with the Federal Home Loan Bank of Des Moines (FHLB) and the Federal Reserve Bank of San Francisco, as well as unsecured borrowing lines from various correspondent banks. There was no balance outstanding on any of these facilities at quarter-end. Uninsured or uncollateralized deposits were 25% of total deposits at June 30, 2025.

Investment securities increased $2.4 million to $307.8 million, compared to $305.4 million at March 31, 2025 and increased $29.1 million compared to a year ago. The largest investment category was collateralized mortgage obligations, which accounted for 52% of the investment portfolio at June 30, 2025, compared to 51% at March 31, 2025 and 46% one year earlier. The yield on the investment portfolio decreased 2 basis points during the current quarter to 3.58% from 3.60%, and increased 12 basis points from 3.46% the second quarter a year ago. The adjusted duration of the portfolio was 4.6 years at June 30, 2025 compared to 4.3 years at June 30, 2024.

Gross loans balances increased $39.4 million, to $746.5 million at June 30, 2025, compared to $707.0 million at March 31, 2025. During the second quarter of 2025, growth occurred in commercial and agricultural, owner and non-owner occupied commercial real estate, multi-family and residential 1-4 family loans, with owner and non-owner occupied commercial real estate increasing $16.3 million and $17.8 million, respectively. Year-over-year gross loan growth was 6%, or $42.5 million, with the largest increases in multi-family loans, and owner and non-owner occupied commercial real estate loans.

The Bank originated $63.9 million in portfolio credit commitments in the 2nd quarter of 2025 and $104.0 million during the first half of 2025. The loan pipeline continues to be supported by sustained business development activity of its commercial lending teams including our newest office in Lake Oswego, OR that opened in late 2024.

The Company continues to manage concentration limits that establish maximum exposure levels by certain industry segments, loan product types, geography and single borrower limits. In addition, the loan portfolio continues to be well-diversified and is collateralized with assets predominantly within the Company’s Western Washington and Oregon markets. Loans classified as commercial real estate for regulatory concentration purposes totaled $283.5 million at June 30, 2025, or 201% of total risk-based capital.

Credit quality: Nonperforming assets declined from the previous quarter and remain minimal at $468,000, or 0.04% of total assets at June 30, 2025, compared to $1.2 million, or 0.10% at March 31, 2025. Accruing loans past due more than 30 days represent only 0.02% of total loans. Total loans designated as special mention decreased $494,000 to $9.6 million at June 30, 2025 compared to $10.1 million at March 31, 2025. The Company has zero other real estate owned as of June 30, 2025.

Allowance for credit losses (“ACL”): ACL-loans increased $332,000 to $9.2 million, or 1.24% of gross loans at June 30, 2025. A provision for credit losses of $387,000 was recorded in the current quarter resulting from loan growth and net charge-offs. This compares to a provision for credit losses of $83,000 in the first quarter of 2025 and $304,000 for the second quarter one year earlier.

Total deposits decreased $3.8 million to $1.07 billion at June 30, 2025 compared to the previous quarter and increased $85.2 million from $985.6 million one year earlier. The company’s strong core deposit base continues to positively impact the Bank’s net interest margin and operating results. Core deposits represented 88% of total deposits at quarter end, including non-interest-bearing deposits of 40% of deposits, and interest-bearing demand and money market deposits each representing 19% of total deposits. CDs as a percentage of deposits remained at 12% of total deposits.

Shareholders’ equity was $118.9 million at June 30, 2025, compared to $116.9 million at March 31, 2025, and $114.9 million at June 30, 2024. The increase in shareholders’ equity during the current quarter was primarily due to $2.7 million in net income and a $704,000 decrease in unrealized losses on available-for-sale securities partially offset by $1.4 million in dividends to shareholders. Net unrealized losses (after-tax) included in shareholders’ equity on available-for-sale securities were $13.5 million at June 30, 2025 compared to $14.2 million at March 31, 2025 and $17.1 million at June 30, 2024.

Book value per common share was $11.87 at June 30, 2025, compared to $11.67 at March 31, 2025, and $11.12 at June 30, 2024. Tangible book value per common share was $10.53 at June 30, 2025 compared to $10.33 at March 31, 2025 and $9.82 at June 30, 2024. The Company’s tangible common equity ratio increased to 8.8% at June 30, 2025 relative to 8.6% the prior quarter and decreased from 9.1% at June 30, 2024. Regulatory capital ratios of both the Company and the Bank continue to exceed well-capitalized regulatory thresholds, with the Company’s leverage ratio at 10.9% and total risk-based capital ratio at 16.9% as of June 30, 2025. These regulatory capital ratios are estimates, pending completion and filing of regulatory reports.

Income Statement Review

Net interest income increased $625,000 to $11.9 million for the second quarter of 2025, compared to $11.3 million for the first quarter of 2025, and increased $1.1 million compared to $10.8 million for the second quarter a year ago. The change in the current quarter compared to the preceding quarter reflects the impact of higher loan yields and lower deposit and borrowing costs. For the six months ended June 30, 2025, net interest income increased to $23.2 million compared to $22.2 million for the like period a year ago.

The Bank’s net interest margin improved to 4.23% for the quarter ended June 30, 2025 from 4.12% the prior quarter and from 4.15% in the second quarter a year ago. During the quarter, $45.3 million in interest-earning cash was re-deployed into higher yielding loans. This change in balance sheet composition, combined with an increase in loan yield, decrease in costs of funds which were partially offset by a decrease in investment yields positively impacted the Bank’s net interest margin for the quarter. For the current quarter compared to the like quarter a year ago, net interest margin was also positively impacted by an increase in loan and investment yields and a decrease in cost of funds which were partially offset by the 100 basis decrease in yield on interest-earning cash.

Yields on loans increased 5 basis points to 6.02% for the second quarter of 2025 compared to 5.97% for the prior quarter and increased 22 basis points from 5.80% in the like quarter a year ago. Loan yields improved as longer term fixed and variable rate loans (originated in a lower rate environment) were renewed at higher rates. In addition, average loan yields on new originations were at higher yields than the current loan portfolio yield.

The Bank continues to actively monitor and manage its costs of funds and for the current quarter the Bank’s total cost of funds decreased 7 basis points to 1.03%, compared to 1.10% for the preceding quarter, and 1.05% for the second quarter 2024. The high percentage of non-interest-bearing deposits at 40% continues to help reduce volatility in deposit costs.

Noninterest income increased to $1.5 million for the current quarter, compared to $1.2 million for the linked quarter and decreased compared to $2.0 million for the second quarter a year earlier. The increase compared to the linked quarter was primarily the result of no losses realized on the sale of investment securities in the current quarter compared to a loss of $165,000 during the prior quarter as well as a $100,000 contract signing incentive recorded during the current quarter. Relative to the second quarter one year earlier, noninterest income decreased $476,000 due primarily to the loss of revenue associated with the mortgage banking division which was closed in late 2024. Fee and service charge income increased in the second quarter of 2025 to $1.3 million compared to $1.1 million in the previous quarter and $1.2 million in the second quarter of 2024. Total non-interest income was $2.6 million for the six months ended June 30, 2025 compared to $3.4 million for the same period a year ago.

Noninterest expenses increased to $9.7 million for the second quarter of 2025 compared to $9.4 million for the prior quarter and decreased compared to $9.8 million for the second quarter of 2024. The current quarter increases compared to the prior quarter were primarily related to an increase in salary and benefit expenses associated with increased health insurance claims and accruals, normal salary and wage increases and higher technology costs, partially offset by decreased professional services for the quarter.

For the six months ended June 30, 2025, total non-interest expense was $19.2 million, compared to $19.4 million for the six months ended June 30, 2024. The decrease in non-interest expense for first half of 2025 compared to the same period a year ago primarily relates to the closure of the mortgage banking division in the fourth quarter of 2024, as the first half of 2024 includes operating costs of that mortgage banking division. Offsetting the reduction in mortgage banking costs were increased salary and benefit expenses associated with increased health insurance claims and accruals, normal salary and wage increases, higher technology costs, and occupancy costs. The Bank’s efficiency ratio was 72.47% for the second quarter of 2025, compared to 75.86% in the preceding quarter and 77.34% in the same quarter a year ago.

Income tax expense: Federal and Oregon state income tax expenses totaled $633,000 for the current quarter, and $544,000 for the preceding quarter, resulting in effective tax rates of 19.2% and 18.6%, respectively. These income tax expenses reflect the benefits of tax exempt income on tax-exempt loans and investments, affordable housing tax credit financing, and investments in bank-owned life insurance.

FINANCIAL HIGHLIGHTS (unaudited) Quarter Ended

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Six Months Ended

Change

(In 000s, except per share data) Jun 30, Mar 31, Jun 30, Mar 31, 2025 Jun 30, 2024 Jun 30, Jun 30, 2025 2025 2024 $ % $ % 2025 2024 $ % Earnings Ratios & Data Net Income $ 2,669 $ 2,377 $ 2,126 $ 292 12% $ 543 26% $ 5,049 $ 4,776 $ 273 6% Return on average assets 0.89% 0.81% 0.76% 0.08% 0.13% 0.85% 0.85% 0.00% Return on average equity 9.14% 8.48% 7.47% 0.66% 1.67% 8.82% 8.40% 0.42% Efficiency ratio(1) 72.47% 75.86% 77.34% -3.39% -4.87% 74.09% 75.77% -1.68% Net-interest margin %(2) 4.23% 4.12% 4.15% 0.11% 0.08% 4.18% 4.27% -0.09% Share Ratios & Data Basic earnings per share $ 0.27 $ 0.24 $ 0.21 $ 0.03 13% $ 0.06 29% $ 0.50 $ 0.46 $ 0.04 Diluted earning per share $ 0.27 $ 0.24 $ 0.21 $ 0.03 13% $ 0.06 29% $ 0.50 $ 0.46 $ 0.04 Book value per share(3) $ 11.87 $ 11.67 $ 11.12 $ 0.20 2% $ 0.75 7% Tangible book value per share(4) $ 10.53 $ 10.33 $ 9.82 $ 0.20 2% $ 0.71 7% Common shares outstanding 10,020 10,020 10,336 – 0% (316 ) -3% PFLC stock price $ 10.69 $ 10.90 $ 9.76 $ (0.21 ) -2% $ 0.93 10% Dividends paid per share $ 0.14 $ 0.14 $ 0.14 $ – 0% $ – 0% $ 0.28 $ 0.28 $ – 0% Balance Sheet Data Assets $ 1,215,468 $ 1,218,969 $ 1,124,295 $ (3,501 ) 0% $ 91,173 8% Portfolio Loans $ 746,475 $ 707,034 $ 703,977 $ 39,441 6% $ 42,498 6% Deposits $ 1,070,831 $ 1,074,646 $ 985,627 $ (3,815 ) 0% $ 85,204 9% Investments $ 307,790 $ 305,377 $ 278,728 $ 2,413 1% $ 29,062 10% Shareholders equity $ 118,937 $ 116,949 $ 114,923 $ 1,988 2% $ 4,014 3% Liquidity Ratios Short-term funding to uninsured and uncollateralized deposits 190% 212% 229% -22% -39% Uninsured and uncollateralized deposits to total deposits 25% 24% 24% 1% 1% Portfolio loans to deposits ratio 70% 66% 71% 4% -1% Asset Quality Ratios Non-performing assets to assets 0.04% 0.10% 0.12% -0.06% -0.08% Non-accrual loans to portfolio loans 0.06% 0.17% 0.19% -0.11% -0.13% Loan losses to avg portfolio loans 0.04% 0.04% 0.03% 0.00% 0.01% 0.04% 0.03% 0.01% ACL-loans to portfolio loans 1.24% 1.26% 1.26% -0.02% -0.02% Capital Ratios (PFC) Total risk-based capital ratio 16.9% 17.4% 17.6% -0.5% -0.7% Tier 1 risk-based capital ratio 15.7% 16.3% 16.4% -0.6% -0.7% Common equity tier 1 ratio 14.2% 14.7% 14.8% -0.5% -0.6% Leverage ratio 10.9% 10.9% 11.7% 0.0% -0.8% Tangible common equity ratio 8.8% 8.6% 9.1% 0.2% -0.3% (1)Non-interest expense divided by net interest income plus noninterest income. (2)Tax-exempt income has been adjusted to a tax equivalent basis at a rate of 21%. (3)Book value per share is calculated as the total common shareholders’ equity divided by the period ending number of common stock shares outstanding. (4)Tangible book value per share is calculated as the total common shareholders’ equity less total intangible assets and liabilities, divided by the period ending number of common stock shares outstanding. INCOME STATEMENT (unaudited) Quarter Ended

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Change

($ in 000s) Jun 30, Mar 31, Jun 30, Mar 31, 2025 Jun 30, 2024 Jun 30, Jun 30, 2025 2025 2024 $ % $ % 2025 2024 $ % Interest Income Loan interest & fee income $ 10,840 $ 10,304 $ 10,109 $ 536 5% $ 731 7% $ 21,144 $ 20,333 $ 811 4% Interest earning cash income 1,124 1,208 847 (84 ) -7% 277 33% 2,332 1,782 550 31% Investment income 2,728 2,678 2,410 50 2% 318 13% 5,407 4,885 522 11% Interest Income 14,692 14,190 13,366 502 4% 1,326 10% 28,883 27,000 1,883 7% Interest Expense Deposits interest expense 2,571 2,694 2,358 (123 ) -5% 213 9% 5,265 4,349 916 21% Other borrowings interest expense 206 206 242 – 0% (36 ) -15% 412 484 (72 ) -15% Interest Expense 2,777 2,900 2,600 (123 ) -4% 177 7% 5,677 4,833 844 17% Net Interest Income 11,915 11,290 10,766 625 6% 1,149 11% 23,206 22,167 1,039 5% Provision(recapture) for credit losses 387 83 304 304 366% 83 27% 470 337 133 39% Net Interest Income after provision 11,528 11,207 10,462 321 3% 1,066 10% 22,736 21,830 906 4% Non-Interest Income Fees and service charges 1,293 1,117 1,198 176 16% 95 8% 2,410 2,299 111 5% Gain on sale of investments, net – (165 ) 121 165 -100% (121 ) -100% (165 ) 121 (286 ) -236% Gain on sale of loans, net – (2 ) 445 2 -100% (445 ) -100% (2 ) 597 (599 ) -100% Income on bank-owned insurance 191 191 182 – 0% 9 5% 383 362 21 6% Other non-interest income 3 12 17 (9 ) -75% (14 ) -82% 15 27 (12 ) -44% Non-Interest Income 1,487 1,153 1,963 334 29% (476 ) -24% 2,641 3,406 (765 ) -22% Non-Interest Expense Salaries and employee benefits 6,103 5,969 6,321 134 2% (218 ) -3% 12,072 12,315 (243 ) -2% Occupancy 618 592 564 26 4% 54 10% 1,209 1,205 4 0% Furniture, Fixtures & Equipment 305 302 267 3 1% 38 14% 606 551 55 10% Marketing & donations 157 153 176 4 3% (19 ) -11% 310 329 (19 ) -6% Professional services 254 299 327 (45 ) -15% (73 ) -22% 553 663 (110 ) -17% Data Processing & IT 1,250 1,218 1,165 32 3% 85 7% 2,468 2,356 112 5% Other 1,026 906 1,025 120 13% 1 0% 1,932 1,958 (26 ) -1% Non-Interest Expense 9,713 9,439 9,845 274 3% (132 ) -1% 19,150 19,377 (227 ) -1% Income before income taxes 3,302 2,921 2,580 381 13% 722 28% 6,227 5,859 368 6% Provision for income taxes 633 544 454 89 16% 179 39% 1,178 1,083 95 9% Net Income $ 2,669 $ 2,377 $ 2,126 $ 292 12% 543 26% $ 5,049 $ 4,776 $ 273 6% Effective tax rate 19.2% 18.6% 17.6% 0.6% 1.6% 18.9% 18.5% 0.4%

BALANCE SHEET (unaudited) Period Ended

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% of Total

($ in 000s) Jun 30, Mar 31, Jun 30, Mar 31, 2025 Jun 30, 2024 Jun 30, Mar 31, Jun 30, 2025 2025 2024 $ % $ % 2025 2025 2024 Assets Cash on hand and in banks $ 19,305 $ 18,975 $ 17,362 $ 330 2 % $ 1,943 11 % 2 % 2 % 2 % Interest earning deposits 79,520 124,854 58,586 (45,334 ) -36 % 20,934 36 % 7 % 10 % 5 % Investment securities 307,790 305,377 278,728 2,413 1 % 29,062 10 % 25 % 25 % 25 % Loans held-for-sale – – 4,051 – -100 % (4,051 ) -100 % 0 % 0 % 0 % Portfolio Loans, net of deferred fees 745,834 706,439 703,322 39,395 6 % 42,512 6 % 61 % 58 % 63 % Allowance for credit losses (9,222 ) (8,890 ) (8,859 ) (332 ) 4 % (363 ) 4 % -1 % -1 % -1 % Net loans 736,612 697,549 694,463 39,063 6 % 42,149 6 % 61 % 57 % 62 % Premises & equipment 16,494 16,702 15,571 (208 ) -1 % 923 6 % 1 % 1 % 2 % Goodwill & Other Intangibles 13,435 13,435 13,435 – 0 % – 0 % 1 % 1 % 1 % Bank-owned life Insurance 28,395 28,204 27,860 191 1 % 535 2 % 2 % 2 % 2 % Other assets 13,917 13,873 14,239 44 0 % (322 ) -2 % 2 % 2 % 1 % Total Assets $ 1,215,468 $ 1,218,969 $ 1,124,295 $ (3,501 ) 0 % $ 91,173 8 % 100 % 100 % 100 % Liabilities & Shareholders’ Equity Deposits $ 1,070,831 $ 1,074,646 $ 985,627 $ (3,815 ) 0 % $ 85,204 9 % 88 % 88 % 88 % Borrowings 13,403 13,403 13,403 – 0 % – 0 % 1 % 1 % 1 % Other liabilities 12,297 13,971 10,342 (1,674 ) -12 % 1,955 19 % 1 % 1 % 1 % Shareholders’ equity 118,937 116,949 114,923 1,988 2 % 4,014 3 % 10 % 10 % 10 % Liabilities & Shareholders’ Equity $ 1,215,468 $ 1,218,969 $ 1,124,295 $ (3,501 ) 0 % $ 91,173 8 % 100 % 100 % 100 %

INVESTMENT COMPOSITION &

CONCENTRATIONS (unaudited)

Period Ended

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% of Total

($ in 000s) Jun 30, Mar 31, Jun 30, Mar 31, 2025 Jun 30, 2024 Jun 30, Mar 31, Jun 30, 2025 2025 2024 $ % $ % 2025 2025 2024 Investment Securities Collateralized mortgage obligations $ 159,386 $ 156,105 $ 125,937 $ 3,281 2 % $ 33,449 27 % 52 % 51 % 46 % Mortgage backed securities 47,094 40,396 37,159 6,698 17 % 9,935 27 % 15 % 13 % 13 % U.S. Government and agency securities 58,668 68,392 72,504 (9,724 ) -14 % (13,836 ) -19 % 19 % 22 % 26 % Municipal securities 42,642 40,484 43,128 2,158 5 % (486 ) -1 % 14 % 14 % 15 % Investment Securities $ 307,790 $ 305,377 $ 278,728 $ 2,413 1 % $ 29,062 10 % 100 % 100 % 100 % Held to maturity securities $ 29,950 $ 40,718 $ 43,244 $ (10,768 ) -26 % $ (13,294 ) -31 % 10 % 13 % 16 % Available for sale securities $ 277,840 $ 264,659 $ 235,484 $ 13,181 5 % $ 42,356 18 % 90 % 87 % 84 % Government & Agency securities $ 265,122 $ 264,866 $ 235,570 $ 256 0 % $ 29,552 13 % 86 % 87 % 85 % AAA, AA, A rated securities $ 41,979 $ 39,822 $ 42,471 $ 2,157 5 % $ (492 ) -1 % 14 % 13 % 15 % Non-rated securities $ 689 $ 689 $ 687 $ – 0 % $ 2 0 % 0 % 0 % 0 % AFS Unrealized Gain (Loss) $ (17,375 ) $ (18,284 ) $ (21,978 ) $ 909 -5 % $ 4,603 -21 % -6 % -6 % -8 %

LIQUIDITY (unaudited) Period Ended

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% of Deposits

($ in 000s) Jun 30, Mar 31, Jun 30, Mar 31, 2025 Jun 30, 2024 Jun 30, Mar 31, Jun 30, 2025 2025 2024 $ % $ % 2025 2025 2024 Short-term Funding Cash and cash equivalents $ 84,957 $ 129,616 $ 63,183 $ (44,659 ) -34 % $ 21,774 34 % 8 % 12 % 6 % Unencumbered AFS Securities 114,077 104,237 139,581 9,840 9 % (25,504 ) -18 % 11 % 10 % 14 % Secured lines of Credit (FHLB, FRB) 317,651 315,876 332,674 1,775 1 % (15,023 ) -5 % 30 % 29 % 34 % Short-term Funding $ 516,685 $ 549,729 $ 535,438 $ (33,044 ) -6 % $ (18,753 ) -4 % 49 % 51 % 54 %

PORTFOLIO LOAN COMPOSITION &

CONCENTRATIONS (unaudited) Period Ended

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% of Total

($ in 000s) Jun 30, Mar 31, Jun 30, Mar 31, 2025 Jun 30, 2024 Jun 30, Mar 31, Jun 30, 2025 2025 2024 $ % $ % 2025 2025 2024 Portfolio Loans Commercial & agriculture $ 74,831 $ 70,209 $ 74,952 $ 4,622 7 % $ (121 ) 0 % 10 % 10 % 11 % Real estate: Construction and development 30,869 34,669 47,856 (3,800 ) -11 % (16,987 ) -35 % 4 % 5 % 7 % Residential 1-4 family 103,233 101,810 105,807 1,423 1 % (2,574 ) -2 % 14 % 14 % 15 % Multi-family 78,409 72,313 58,003 6,096 8 % 20,406 35 % 10 % 10 % 8 % CRE — owner occupied 193,127 176,850 169,491 16,277 9 % 23,636 14 % 26 % 25 % 24 % CRE — non owner occupied 177,860 160,022 157,591 17,838 11 % 20,269 13 % 24 % 23 % 22 % Farmland 27,202 27,411 27,195 (209 ) -1 % 7 0 % 4 % 4 % 4 % Consumer 60,944 63,750 63,082 (2,806 ) -4 % (2,138 ) -3 % 8 % 9 % 9 % Portfolio Loans 746,475 707,034 703,977 $ 39,441 6 % $ 42,498 6 % 100 % 100 % 100 % Less: ACL (9,222 ) (8,890 ) (8,859 ) Less: deferred fees (641 ) (595 ) (655 ) Net loans $ 736,612 $ 697,549 $ 694,463 Regulatory Commercial Real Estate $ 283,527 $ 263,424 $ 260,068 $ 20,103 8 % $ 23,459 9 % 38 % 37 % 37 % Total Risk Based Capital(1) $ 140,987 $ 139,133 $ 140,176 $ 1,854 1 % $ 811 1 % CRE to Risk Based Capital(1) 201% 189% 186% 12 % 15 % CRE–MULTI-FAMILY & NON OWNER

OCCUPIED COMPOSITION (unaudited) Period Ended

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% of Total

($ in 000s) Jun 30, Mar 31, Jun 30, Mar 31, 2025 Jun 30, 2024 Jun 30, Mar 31, Jun 30, 2025 2025 2024 $ % $ % 2025 2025 2024 Collateral Composition(2) Multifamily $ 78,760 $ 76,421 $ 63,243 $ 2,339 3 % $ 15,517 25 % 30 % 31 % 27 % Retail 36,384 36,616 36,074 (232 ) -1 % 310 1 % 14 % 15 % 16 % Hospitality 32,573 31,772 30,248 801 3 % 2,325 8 % 12 % 13 % 13 % Office 26,034 23,975 23,266 2,059 9 % 2,768 12 % 10 % 10 % 10 % Mixed Use 24,480 22,706 23,520 1,774 8 % 960 4 % 9 % 9 % 10 % Mini Storage 22,488 22,654 23,619 (166 ) -1 % (1,131 ) -5 % 8 % 9 % 11 % Special Purpose 17,342 6,874 7,014 10,468 152 % 10,328 147 % 7 % 3 % 3 % Industrial 14,430 15,230 13,691 (800 ) -5 % 739 5 % 5 % 6 % 6 % Warehouse 10,394 8,146 7,631 2,248 28 % 2,763 36 % 4 % 3 % 3 % Other 2,620 2,648 3,213 (28 ) -1 % (593 ) -18 % 1 % 1 % 1 % Total $ 265,505 $ 247,042 $ 231,519 $ 18,463 7 % $ 33,986 15 % 100 % 100 % 100 % (1)Bank of the Pacific (2)Includes loans in process of construction

CREDIT QUALITY (unaudited) Period Ended

Change from

($ in 000s) Jun 30, Mar 31, Jun 30, Mar 31, 2025 Jun 30, 2024 2025 2025 2024 $ % $ % Risk Rating Distribution Pass $ 735,200 $ 694,240 $ 694,272 $ 40,960 6 % $ 40,928 6 % Special Mention 9,637 10,131 4,731 (494 ) -5 % 4,906 104 % Substandard 1,638 2,663 4,974 (1,025 ) -38 % (3,336 ) -67 % Portfolio Loans $ 746,475 $ 707,034 $ 703,977 $ 39,441 6 % $ 42,498 6 % Nonperforming Assets Nonaccruing loans 468 1,225 1,370 $ (757 ) -62 % (902 ) -66 % Other real estate owned – – – – 0 % – 0 % Nonperforming Assets $ 468 $ 1,225 $ 1,370 $ (757 ) -62 % (902 ) -66 % Credit Metrics Classified loans1 to portfolio loans 0.22% 0.38% 0.71% -0.16% -0.49% ACL to classified loans1 563.00% 333.83% 178.11% 229.17% 384.89% Loans past due 30+ days to portfolio loans2 0.02% 0.04% 0.04% -0.02% -0.02% Nonperforming assets to total assets 0.04% 0.10% 0.12% -0.06% -0.08% Nonaccruing loans to portfolio loans 0.06% 0.17% 0.19% -0.11% -0.13% (1) Classified loans include loans rated substandard or worse and are defined as loans having a well-defined weakness or weaknesses related to the borrower’s financial capacity or to pledged collateral that may jeopardize the repayment of the debt. They are characterized by the possibility that the Bank may sustain some loss if the deficiencies giving rise to the substandard classification are not corrected. (2) Excludes non-accrual loans

DEPOSIT COMPOSITION & CONCENTRATIONS

(unaudited) Period Ended

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% of Total

($ in 000s) Jun 30, Mar 31, Jun 30, Mar 31, 2025 Jun 30, 2024 Jun 30, Mar 31, Jun 30, 2025 2025 2024 $ % $ % 2025 2025 2024 Deposits Interest-bearing demand $ 207,208 $ 243,363 $ 179,278 $ (36,155 ) -15 % $ 27,930 16 % 19 % 23 % 18 % Money market 200,251 197,184 180,727 3,067 2 % 19,524 11 % 19 % 18 % 18 % Savings 111,577 117,130 121,851 (5,553 ) -5 % (10,274 ) -8 % 10 % 11 % 12 % Time deposits (CDs) 131,729 134,226 125,560 (2,497 ) -2 % 6,169 5 % 12 % 12 % 13 % Total interest-bearing deposits 650,765 691,903 607,416 (41,138 ) -6 % 43,349 7 % 60 % 64 % 61 % Non-interest bearing demand 420,066 382,743 378,211 37,323 10 % 41,855 11 % 40 % 36 % 39 % Total deposits $ 1,070,831 $ 1,074,646 $ 985,627 $ (3,815 ) 0 % $ 85,204 9 % 100 % 100 % 100 % Insured Deposits $ 618,964 $ 630,940 $ 632,923 $ (11,976 ) -2 % $ (360,455 ) -57 % 58 % 59 % 64 % Collateralized Deposits 179,399 183,842 118,966 (4,443 ) -2 % 60,433 51 % 17 % 17 % 12 % Uninsured Deposits 272,468 259,864 233,738 12,604 5 % 385,226 165 % 25 % 24 % 24 % Total Deposits $ 1,070,831 $ 1,074,646 $ 985,627 $ (3,815 ) 0 % $ 85,204 9 % 100 % 100 % 100 % Consumer Deposits $ 462,889 $ 472,839 $ 458,249 $ (9,950 ) -2 % $ 4,640 1 % 43 % 44 % 47 % Business Deposits 417,675 407,974 398,719 9,701 2 % 18,956 5 % 39 % 38 % 40 % Public Deposits 190,267 193,833 128,659 (3,566 ) -2 % 61,608 48 % 18 % 18 % 13 % Total Deposits $ 1,070,831 $ 1,074,646 $ 985,627 $ (3,815 ) 0 % $ 85,204 9 % 100 % 100 % 100 %

NET INTEREST MARGIN (unaudited) Quarter Ended

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Six Months Ended

Change

($ in 000s) Jun 30, Mar 31, Jun 30, Mar 31, 2025 Jun 30, 2024 Jun 30, Jun 30, 2025 2025 2024 $ % $ % 2025 2024 $ % Average Interest Bearing Balances Portfolio loans $ 723,472 $ 701,071 $ 699,404 $ 22,401 3 % $ 24,068 3 % $ 712,334 $ 694,161 $ 18,173 3 % Loans held for sale $ – $ – $ 1,593 $ – -100 % $ (1,593 ) -100 % $ – $ 1,094 $ (1,094 ) -100 % Investment securities $ 308,774 $ 305,074 $ 283,637 $ 3,700 1 % $ 25,137 9 % $ 306,934 $ 288,006 $ 18,928 7 % Interest earning cash $ 101,170 $ 110,007 $ 62,494 $ (8,837 ) -8 % $ 38,676 62 % $ 105,563 $ 65,684 $ 39,879 61 % Total interest-earning assets $ 1,133,416 $ 1,116,152 $ 1,047,128 $ 17,264 2 % $ 86,288 8 % $ 1,124,831 $ 1,048,945 $ 75,886 7 % Non-interest bearing deposits $ 389,453 $ 378,470 $ 387,740 $ 10,983 3 % $ 1,713 0 % $ 383,992 $ 391,372 $ (7,380 ) -2 % Interest-bearing deposits $ 677,660 $ 675,122 $ 596,121 $ 2,538 0 % $ 81,539 14 % $ 676,398 $ 593,266 $ 83,132 14 % Total Deposits $ 1,067,113 $ 1,053,592 $ 983,861 $ 13,521 1 % $ 83,252 8 % $ 1,060,390 $ 984,638 $ 75,752 8 % Borrowings $ 13,403 $ 13,403 $ 13,404 $ – 0 % $ (1 ) 0 % $ 13,403 $ 13,401 $ 2 0 % Total interest-bearing liabilities $ 691,063 $ 688,525 $ 609,525 $ 2,538 0 % $ 81,538 13 % $ 689,801 $ 606,667 $ 83,134 14 % Yield / Cost $(1) Portfolio loans $ 10,854 $ 10,316 $ 10,092 $ 538 5 % $ 762 8 % $ 21,170 $ 20,325 $ 845 4 % Loans held for sale $ – $ – $ 28 $ – -100 % $ (28 ) -100 % $ – $ 33 $ (33 ) -100 % Investment securities $ 2,755 $ 2,710 $ 2,442 $ 45 2 % $ 313 13 % $ 5,465 $ 4,951 $ 514 10 % Interest-bearing cash $ 1,124 $ 1,208 $ 847 $ (84 ) -7 % $ 277 33 % $ 2,332 $ 1,782 $ 550 31 % Total interest-earning assets $ 14,733 $ 14,234 $ 13,410 $ 499 4 % $ 1,323 10 % $ 28,966 $ 27,092 $ 1,874 7 % Interest-bearing deposits $ 2,571 $ 2,694 $ 2,358 $ (123 ) -5 % $ 213 9 % $ 5,265 $ 4,349 $ 916 21 % Borrowings $ 206 $ 206 $ 242 $ – 0 % $ (36 ) -15 % $ 412 $ 484 $ (72 ) -15 % Total interest-bearing liabilities $ 2,777 $ 2,900 $ 2,600 $ (123 ) -4 % $ 177 7 % $ 5,677 $ 4,833 $ 844 17 % Net interest income $ 11,956 $ 11,334 $ 10,810 $ 622 5 % $ 1,146 11 % $ 23,289 $ 22,259 $ 1,030 5 % Yield / Cost %(1) Yield on portfolio loans 6.02% 5.97% 5.80% 0.05% 0.22% 5.99% 5.89% 0.10% Yield on investment securities 3.58% 3.60% 3.46% -0.02% 0.12% 3.59% 3.46% 0.13% Yield on interest-bearing cash 4.46% 4.45% 5.46% 0.01% -1.00% 4.45% 5.46% -1.01% Cost of interest-bearing deposits 1.52% 1.62% 1.59% -0.10% -0.07% 1.57% 1.47% 0.10% Cost of borrowings 6.16% 6.23% 7.26% -0.07% -1.10% 6.20% 7.26% -1.06% Cost of deposits and borrowings 1.03% 1.10% 1.05% -0.07% -0.02% 1.07% 0.97% 0.10% Yield on interest-earning assets 5.21% 5.17% 5.15% 0.04% 0.06% 5.19% 5.19% 0.00% Cost of interest-bearing liabilities 1.61% 1.71% 1.72% -0.10% -0.11% 1.66% 1.60% 0.06% Net interest spread 3.60% 3.46% 3.43% 0.14% 0.17% 3.53% 3.59% -0.06% Net interest margin 4.23% 4.12% 4.15% 0.11% 0.08% 4.18% 4.27% -0.09% (1) Tax-exempt income has been adjusted to a tax equivalent basis at a rate of 21%.

ALLOWANCE FOR CREDIT LOSSES

(ACL) (unaudited) Quarter Ended

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Six Months Ended

Change

($ in 000s) Jun 30, Mar 31, Jun 30, Mar 31, 2025 Jun 30, 2024 Jun 30, Jun 30, 2025 2025 2024 $ % $ % 2025 2024 $ % ACL-Loans Beginning of period balance $ 8,890 $ 8,851 $ 8,580 $ 39 0 % $ 310 4 % $ 8,851 $ 8,530 $ 321 4 % Charge-offs (76 ) (75 ) (57 ) (1 ) 1 % (19 ) 33 % (151 ) (92 ) (59 ) 64 % Recoveries 1 – 1 1 100 % – 0 % 1 3 (2 ) -67 % Net (charge-off) recovery (75 ) (75 ) (56 ) – 0 % (19 ) 34 % (150 ) (89 ) (61 ) 69 % Provision (recapture) 407 114 335 293 257 % 72 21 % 521 418 103 25 % End of period balance $ 9,222 $ 8,890 $ 8,859 $ 332 4 % $ 363 4 % $ 9,222 $ 8,859 $ 363 4 % Net charge-off (recovery) to average portfolio loans 0.04% 0.04% 0.03% 0.00% 0.01% 0.04% 0.03% 0.01% ACL-loans to portfolio loans 1.24% 1.26% 1.26% -0.02% -0.02% 1.24% 1.26% -0.02% ACL-Unfunded Loans Commitments Beginning of period balance $ 509 $ 540 $ 648 $ (31 ) -6 % $ (139 ) -21 % $ 540 $ 698 $ (158 ) -23 % Provision (recapture) (20 ) (31 ) (31 ) 11 -35 % 11 -35 % (51 ) (81 ) 30 -37 % End of period balance $ 489 $ 509 $ 617 $ (20 ) -4 % $ (128 ) -21 % $ 489 $ 617 $ (128 ) -21 %

ABOUT PACIFIC FINANCIAL CORPORATION

Pacific Financial Corporation of Aberdeen, Washington, is the bank holding company for Bank of the Pacific, a state chartered and federally insured commercial bank. Bank of the Pacific offers banking products and services to small-to-medium sized businesses and professionals in western Washington and Oregon. At June 30, 2025, the Company had total assets of $1.22 billion and operated fifteen branches in the communities of Grays Harbor, Pacific, Thurston, Whatcom, Skagit, Clark and Wahkiakum counties in the State of Washington, and three branches in the communities of Clatsop and Clackamas counties in Oregon. The Company also operated loan production offices in the communities of Burlington, Washington and Salem, Oregon. Visit the Company’s website at www.bankofthepacific.com . Member FDIC.

Cautions Concerning Forward-Looking Statements

This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other laws, including all statements in this release that are not historical facts or that relate to future plans or events or projected results of Pacific Financial Corporation and its wholly-owned subsidiary, Bank of the Pacific. Such statements are based on information available at the time of communication and are based on current beliefs and expectations of the Company’s management and are subject to risks and uncertainties, many of which are beyond our control, which could cause actual events or results to differ materially from those projected, anticipated or implied, and could negatively impact the Company’s operating and stock price performance. These risks and uncertainties include various risks associated with growing the Bank and expanding the services it provides, development of new business lines and markets, competition in the marketplace, general economic conditions, changes in interest rates, extensive and evolving regulation of the banking industry, and many other risks. Any forward-looking statements in this communication are based on information at the time the statement is made. We undertake no obligation to update or revise any forward-looking statement. Readers of this release are cautioned not to put undue reliance on forward-looking statements.

CONTACTS:

DENISE PORTMANN, PRESIDENT & CEO

CARLA TUCKER, EVP & CFO

360.533.8873