SOURCE: People's Bank of Commerce

July 20, 2011 07:00 ET

People's Bank Reports Significant Increase in Earnings

MEDFORD, OR--(Marketwire - Jul 20, 2011) - People's Bank of Commerce (OTCBB: PBCO) today reported earnings of $160,000 for the first six months of 2011 showing strong improvement over the $91,000 for the same period last year. The Bank reported earnings of $0.14 per share for the first six months of 2011, compared to $0.10 per share for the prior year. While interest income was relatively flat year-to-date, the Bank's significant improvement in earnings was due to a 48% decrease in interest expense and a 57% reduction in the loan loss provision, compared to the prior year. "This represents our eighth consecutive quarter of profitability," said Ken Trautman, President and CEO of People's Bank.

Earnings for the second quarter of 2011 were $63,000, up 7% over the second quarter 2010. The Bank reported earnings of $0.06 per share for the three months ending June 30, 2011, compared to $0.07 per share in 2010. The weighted average number of shares as of the quarter ended June 30, 2011, was 1,117,635 compared to 910,176 during 2010, primarily the result of the successful stock offering completed January 31, 2011.

Non-interest income was down 7% during the first two quarters of 2011, compared to last year, primarily due to a 28% reduction in mortgage lending income, reflective of the continued sluggish local residential real estate market. "The residential real estate activity continues to be dominated by the large amount of foreclosures still working their way through the system," said Trautman. It appears that investors are seeing real value at the lower price ranges with mid and upper-priced homes still adjusting. "Non-interest expenses of $2,695,000 for the six month period ending June 30, 2011 were up 10% over the prior year, primarily the result of employee additions to support projected loan growth in commercial lending."

The Bank increased portfolio loans 3% during the past 12 months and deposits increased 5% during the same period. "Year-to-date commercial loans are up 7% and we have a large pipeline of pending loans," commented Trautman. "We are seeing signs of improvement in the local business community as most businesses have improved efficiencies, doing more with less and exhibiting strong expense controls. We are proud to continue to serve the Bank's mission of providing needed financing to our area's local businesses."

Non-interest bearing demand deposits are up 44%, savings accounts are up 47%, and money market accounts are up 11%, compared to the same time in 2010. These low cost deposits replaced higher cost certificates of deposit, which were reduced by 23% during the same period. This shift in deposit mix contributed greatly towards the strong net interest margin of 4.99% year-to-date.

The Bank's loan quality continues to improve with non-current loans to total loans at June 30, 2011 of 0.61%, down from 3.77% last year. Non-performing assets to total assets compares loans past due 90 days and more, loans on non-accrual and OREO properties to total assets. This ratio at the end of June 30, 2011 was 2.39%, compared to 3.37% one year ago. At the end of the second quarter 2011, reserves totaled 1.63% of total loans, compared to 1.79% one year ago. The loan loss provision for the first six months of 2011 totaled $96,000, compared to $224,000 for the first six months of last year.

People's Bank reported total assets, at the end of June 2011, of $111.3 million, up 7% from the prior year. The Bank has total shareholders' equity of $13.2 million and a book value of $11.73 per share. Tier one leverage capital remains strong at 11.75%. The Bank stock trades on the over-the-counter market under the symbol PBCO.

2011 2010
Quarter ended June 30:
Net interest income 1,174,000 1,033,000
Provision for Loan Losses 38,000 139,000
Noninterest income 306,000 390,000
Noninterest expense 1,393,000 1,222,000
Net income 63,000 59,000
EPS $0.06 $0.07
Year to Date
Net Interest income 2,288,000 2,018,000
Provision for Loan Losses 96,000 224,000
Noninterest income 681,000 728,000
Noninterest expense 2,695,000 2,442,000
Net income 160,000 91,000
EPS $0.14 $0.10
At June 30:
Total Portfolio Loans 83,622,000 81,463,000
Total Reserve for Loan Losses 1,380,000 1,487,000
Total Deposits 96,481,000 91,858,000
Total Assets 111,275,000 104,063,000
Total Shareholders' Equity 13,190,000 11,004,000
No. of shares outstanding 1,124,046 917,317
Book Value, per share $11.73 $12.00

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as People's Bank or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar import. Similarly, statements herein that describe People's Bank's business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements.

Contact Information

  • Contact:
    Ken Trautman
    President and CEO
    (541) 774-7654