People’s Bank of Commerce Earnings Increase 48%

MEDFORD, Ore.--()--People’s Bank of Commerce (OTCBB: PBCO) announced today its financial results for the first quarter of 2017. The bank reported net income of $528,000 or $0.23 per diluted share for the first quarter of 2017, compared to net income of $298,000 or $0.13 per diluted share in the same quarter of 2016. Earnings in the fourth quarter of 2016 totaled $520,000 or $0.23 per diluted share. Earnings per share for the trailing 12 months increased to $0.93 per share at the end of the first quarter 2017 from $0.63 per share one year ago, a 48% increase.

Highlights for the first quarter of 2017 compared to the first quarter of 2016:

  • Net loans increased 14%.
  • Deposits declined 1%.
  • The bank’s total assets increased less than 1%.
  • Net interest income increased by 14%.
  • Non-Interest income increased 57%.
  • Non-interest expense increased 12%.

Balance Sheet

“Beginning in the second quarter of 2016, in order to increase the bank’s net interest margin and efficiency, the bank decreased high cost deposits, such as brokered CDs, and decreased its investment in securities and overnight funds. At the same time, the bank continued to grow its loan portfolio, resulting in modest asset growth. The net interest margin for the first quarter of 2017 was 4.33% compared to 3.81% for the same quarter of 2016. Efficiency improved to 72.27% for the 12 months ending 3/31/17 from 80.34% for the preceding 12 months,” said Ken Trautman, President and CEO.

Provision for Credit Losses

Loan quality continues to increase and loans outstanding were fairly flat during the first quarter providing for a credit (decrease) to the allowance for loan losses of $36,000, compared to an addition of $93 thousand in the same quarter last year. The addition in 2016 was due to a 9% increase in loans outstanding during the quarter. “The bank anticipates continued additions to the allowance for loan and lease losses during 2017 due to anticipated loan growth,” commented Mr. Trautman.

Non-Interest Income

Mortgage banking income was 102% greater in the first quarter of 2017 compared to the first quarter of 2016. “This dramatic increase in revenue resulted from larger loan sizes and our commitment to rebuild our mortgage banking team that occurred during the beginning of 2016,” commented Steve Erb, Chief Banking Officer. Mr. Erb continued, “Many larger homes in the area have experienced long overdue price appreciation, allowing owners to refinance.”

Capital

At March 31, 2017, shareholder equity totaled $26.6 million, compared to $24.5 million at March 31, 2016. The bank’s leverage ratio was 9.8% at the end of the first quarter 2017, compared to 8.9% one year ago. Book value per share was $11.67 on March 31, 2017, compared to $11.33 on March 31, 2016, when adjusted for the 5% stock dividend received in May of 2016.

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. People’s Bank of Commerce is a full-service bank headquartered in Medford, Oregon with branches in Medford, Ashland, Central Point and Grants Pass.

"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)                
(dollars in thousands) Three Months Ended Twelve Months Ended
3/31/2017   12/31/2016   3/31/2016 3/31/2017   3/31/2016
Interest Income
Loans 2,484 2,479 2,159 9,649 8,238
Investments 176 199 215 772 723
Federal funds sold and due from banks 12   8   19   60   61  
Total Interest Income 2,672 2,686 2,393 10,481 9,022
 
Interest Expense
Deposits 93 102 137 435 462
Other -   -   -   -   -  
Total Interest Expense 93 102 137 435 462
 
Net Interest Income 2,579 2,584 2,256 10,046 8,560
Provision for Credit Losses (36 ) 36   93   237   162  

Net Interest Income after provision for credit losses

2,615 2,548 2,163 9,809 8,398
 
Non-Interest Income
Service charges on deposit accounts 78 68 63 290 271
Mortgage lending income 240 247 118 892 807
Gain (loss) on other real estate - - - - (111 )
Other non-interest income 201   169   149   960   743  
Total non-interest income 519 484 330 2,142 1,710
 
Non-Interest Expense
Salary and benefits 1,407 1,285 1,228 5,079 4,892
Premises and fixed assets 335 344 313 1,339 1,179
Other 588   613   534   2,390   2,180  
Total non-interest expense 2,330 2,242 2,075 8,808 8,251
 
Net income before taxes 804 790 418 3,143 1,857
Income taxes 276   270   120   1,033   488  
Net income 528   520   298   2,110   1,369  
 
Basic Earnings per share * 0.23 0.23 0.13 0.93 0.63
Diluted Earnings per share * 0.23 0.22 0.13 0.93 0.63
Average common shares outstanding * 2,279,022 2,279,022 2,274,467 2,269,003 2,160,232
 
Performance Measures
Return on average assets 0.80 % 0.78 % 0.37 % 0.79 % 0.58 %
Return on average equity 7.97 % 8.01 % 0.47 % 8.20 % 5.80 %
Net interest margin 4.33 % 4.17 % 3.81 % 3.95 % 4.10 %
Efficiency ratio 75.21 % 73.08 % 80.24 % 72.27 % 80.34 %
* adjusted for 5% stock dividend May 2016
 
People's Bank of Commerce                  
Balance Sheet (unaudited)
(dollars in thousands) 3/31/2017 12/31/2016 9/30/2016 6/30/2016 3/31/2016
Assets
Cash and due from banks 10,181 13,091 11,897 8,800 11,645
Federal funds sold - - - - -
Interest-bearing deposits 11,067 1,585 4,510 11,896 25,365
Investment securities 29,883 33,181 37,242 37,423 41,020
Loans held for sale 1,603 294 615 473 716

Loans held for investment, net of unearned income

199,990 199,337 192,653 183,018 174,728
Allowance for loan and lease losses (2,300 ) (2,342 ) (2,303 ) (2,198 ) (2,058 )
Loans, Net 197,690 196,995 190,350 180,820 172,670
Premises and equipment, net 7,088 6,970 6,946 7,034 5,854
Other assets 13,966   13,783   13,000   13,622   13,813  
Total assets 271,478   265,899   264,560   260,068   271,083  
 
 
Liabilities
Deposits
Demand noninterest-bearing 106,171 97,208 97,223 89,761 87,079
Demand interest-bearing 22,858 24,643 21,637 22,127 18,421
Money market and savings 97,137 98,838 98,613 99,784 115,295
Time deposits of less than $100,000 8,501 8,428 8,550 10,729 12,369
Time deposits of more than $100,000 8,224   9,020   10,810   10,634   11,715  
Total Deposits 242,891 238,137 236,833 233,035 244,879
Other liabilities 1,986   1,683   2,042   1,879   1,676  
Total liabilities 244,877 239,820 238,875 234,914 246,555
 
 
Shareholders' Equity
Common Stock, surplus, retained earnings 26,578 26,050 25,359 24,745 24,258

Accumulated other comprehensive income (loss)

23   29   326   409   270  
Total shareholders' equity 26,601 26,079 25,685 25,154 24,528
 
Total Liabilities and Equity 271,478   265,899   264,560   260,068   271,083  

Contacts

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

Contacts

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