People’s Bank of Commerce Reports 20% Increase in Quarterly Net Income

MEDFORD, Ore.--()--People’s Bank of Commerce (OTCBB: PBCO) announced today it’s financial results for the second quarter and year-to-date 2016 operations. The bank reported net income of $448,000 or $0.20 per diluted share for the second quarter of 2016, compared to net income of $375,000 or $0.18 per diluted share in the same quarter of 2015. Net income through June 30, 2016 totaled $746,000 or $0.34 per share compared to $709,000 or $0.34 per share for the same period in 2015.

Highlights for the quarter included:

  • Net loans increased $8.2 million during the second quarter of 2016 compared to $0.6 million during the second quarter of 2015.
  • Deposits declined $11.8 million over the past 3 months compared to increasing $20.4 million during the second quarter of 2015. These deposits were a combination of temporary funds and deposits that the bank declined to pay premium rates to keep.
  • The bank’s total assets declined $11.0 million during the second quarter of 2016 compared to increasing $21.0 million during the same period in 2015. The decline in assets is a direct result of the deposit withdrawals mentioned above.
  • Net interest income for the second quarter of 2016 totaled $2.4 million compared to $2.1 million in the second quarter of 2015, an increase of 14%.
  • Non-Interest income was $549 thousand in the second quarter of 2016 compared to $534 thousand the second quarter of 2015.
  • Non-interest expense was $2.1 million in the second quarter of 2016 or 0.80% of average quarterly assets compared to $2.1 million in the second quarter of 2015 or 0.91% of average quarterly assets.
  • No loans were past due 90 days or on nonaccrual at the end of the second quarter in 2016 or 2015.
  • The bank’s efficiency ratio was 72.65% for the second quarter of 2016 compared to 79.02% for the second quarter of 2015.
  • ROE and ROA for the second quarter of 2016 were 7.26% and 0.67%, respectively, and 6.69% and 0.67%, respectively, for the second quarter of 2015.

Balance Sheet

“As noted above, deposits and total assets have decreased in the current quarter, a reversal of several previous quarters,” Ken Trautman, President and CEO of People’s Bank explained. “The bank has made a strategic decision to increase net interest income and improve efficiency by increasing its loans while letting higher cost deposits decline.”

Provision for Credit Losses

Continued strong loan growth has prompted a provision expense of $134 thousand in the second quarter of 2016 compared to no provision in the second quarter of 2015. At the end of the second quarter of 2016 the Allowance for Loan and Lease Losses to Loans Held for Investment totaled 1.20% compared to 1.26% at the end of the second quarter 2015.

Capital

At June 30, 2016, shareholder equity totaled $25.2 million, compared to $23.2 million at June 30, 2015. The bank’s leverage ratio was 9.5% as of June 30, 2016, compared to 10.4% at June 30, 2015. As a result of strong loan growth, the bank’s estimated total risk-based capital ratio was 13.48% as of June 30, 2016, compared to 15.23% for June 30, 2015. “These capital ratios continue to be above levels required for the bank to be considered “well-capitalized” according to regulatory standards,” commented Russ Milburn, Chief Financial Officer. Book value per share increased to $11.04 at June 30, 2016, compared to $10.72 at June 30, 2015.

About People’s Bank of Commerce

People’s Bank of Commerce’s stock trades on the over-the-counter market under the symbol PBCO. Additional information about the Bank is available in the investor section of the bank’s website at: www.peoplesbankofcommerce.com.

Founded in 1998, People’s Bank of Commerce is the only locally owned and managed community bank in Southern Oregon. We are proud to have built our business by developing relationships, meeting the needs of our customers through personal service and responding to their changing needs, while maintaining our commitment to quality products and service. People’s Bank of Commerce is a full service bank headquartered in Medford, Oregon with branches in Medford, Ashland, Central Point and Grants Pass. For more information, contact Brande Cowden, Marketing Officer, 541-774-7653.

"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.

People's Bank of Commerce
Income Statement (unaudited)        
Three Months Ended Twelve Months Ended
(dollars in thousands) 6/30/2016   3/31/2016   6/30/2015 6/30/2016   6/30/2015
Interest Income
Loans 2,297 2,159 1,994 8,542 7,814
Investments 204 215 154 773 501
Federal funds sold and due from banks 23   19   15 69   69
Total Interest Income 2,524 2,393 2,163 9,384 8,384
 
Interest Expense
Deposits 130 137 94 498 374
Other -   -   - -   -
Total Interest Expense 130 137 94 498 374
 
Net Interest Income 2,394 2,256 2,069 8,886 8,010
Provision for Credit Losses 134   93   - 296   107

Net Interest Income after provision for credit losses

2,260 2,163 2,069 8,590 7,903
 
Non-Interest Income
Service charges on deposit accounts 70 63 70 270 259
Mortgage lending income 189 118 312 684 1,095
Gain (loss) on other real estate - - - (111) (9)
Other non-interest income 290   149   152 993   632
Total non-interest income 549 330 534 1,836 1,977
 
Non-Interest Expense
Salary and benefits 1,189 1,228 1,245 4,836 4,803
Premises and fixed assets 328 313 263 1,244 1,034
Other 621   534   548 2,364   2,044
Total non-interest expense 2,138 2,075 2,056 8,444 7,881
 
Net income before taxes 671 418 547 1,982 1,999
Income taxes 223   120   172 539   601
Net income 448   298   375 1,443   1,398
 

Basic Earnings per share*

0.20 0.13 0.18 0.63 0.62

Diluted Earnings per share*

0.20 0.13 0.18 0.63 0.60

Average common shares outstanding*

2,238,946 2,274,167 2,131,883 2,274,515 2,260,430
 
Performance Measures
Return on average assets 0.67% 0.47% 0.67% 0.59% 0.65%
Return on average equity 7.26% 4.88% 6.69% 5.96% 6.29%
Net interest margin 3.90% 3.81% 4.22% 3.87% 4.25%
Efficiency ratio 72.65%   80.24%   78.99% 78.75%   78.91%
 
* adjusted for 5% stock dividends in March 2016, August 2015 & May 2016
People's Bank of Commerce          
Balance Sheet (unaudited)
(dollars in thousands) 6/30/2016 3/31/2016 12/31/2015 9/30/2015 6/30/2015
Assets
Cash and due from banks 8,800 11,645 11,498 12,113 13,620
Federal funds sold - - - - -
Interest-bearing deposits 11,896 25,365 13,950 12,445 6,965
Investment securities 37,423 41,020 44,927 35,520 33,228
Loans held for sale 473 716 2,393 1,458 2,905

Loans held for investment, net of unearned income

183,018 174,728 160,341 155,154 149,922
Allowance for loan and lease losses (2,198) (2,058) (1,964) (1,957) (1,887)
Loans, Net 180,820 172,670 158,377 153,197 148,035
Premises and equipment, net 7,034 5,854 5,128 4,520 4,064
Other assets 13,622 13,813 13,786 13,675 13,689
Total assets 260,068 271,083 250,059 232,928 222,506
 
 
Liabilities
Deposits
Demand noninterest-bearing 89,761 87,079 86,745 82,237 86,039
Demand interest-bearing 22,127 18,421 18,498 15,789 12,627
Money market and savings 99,784 115,295 94,619 87,060 82,134
Time deposits of less than $100,000 10,729 12,369 12,515 12,142 7,564
Time deposits of more than $100,000 10,634 11,715 12,093 10,262 9,322
Total Deposits 233,035 244,879 224,470 207,490 197,686
Other liabilities 1,879 1,676 1,562 1,703 1,597
Total liabilities 234,914 246,555 226,032 209,192 199,284
 
 
Shareholders' Equity
Common Stock, surplus, retained earnings 24,745 24,258 23,956 23,515 23,046

Accumulated other comprehensive income (loss)

409 270 71 221 176
Total shareholders' equity 25,154 24,528 24,027 23,736 23,222
 
Total Liabilities and Equity 260,068 271,083 250,059 232,928 222,506

Contacts

People’s Bank of Commerce
President and CEO
Ken Trautman, 541-774-7654
kent@peoplesbankofcommerce.com

Contacts

People’s Bank of Commerce
President and CEO
Ken Trautman, 541-774-7654
kent@peoplesbankofcommerce.com