People’s Bank Reports 66% Increase in Earnings in 2012

MEDFORD, Ore.--()--People’s Bank of Commerce (OTCBB: PBCO) reported earnings for the year ended December 31, 2012, of $875,000 or $0.74 per share, compared to earnings of $528,000 or $0.45 per share during 2011. Net interest income for the year of $5.5 million was up 14 percent from $4.8 million in 2011. At December 31, 2012, the bank reported a 20 percent increase in portfolio loans to $112.1 million, a 14 percent increase in total assets to $144.5 million, and a 14 percent increase in deposits to $125.7 million, when compared to the prior year.

Fourth quarter earnings for 2012 were $199,000 or $0.17 per share, compared to $213,000 or $0.18 per share for the same quarter in 2011. “Fourth quarter earnings were impacted by one-time expenses associated with our new branch headquarters, including costs related with moving the administrative offices to the Barnett Road location,” said Ken Trautman, President and CEO of People’s Bank. Net interest income for the fourth quarter of 2012 was up 11 percent, when compared to the same quarter in the prior year, due to increased loan totals and lower deposit interest expense.

The net interest margin for 2012 showed a slight reduction to 4.83 percent, compared to 4.94 percent in 2011. “This reduction in the net interest margin follows the bank’s strategic plan, which is to grow commercial loans of the highest credit quality available, in part, by implementing competitive pricing standards for strong borrowers,” commented Trautman.

Non-interest income for the current year was up 40% over last year, benefited greatly by a 103% increase in mortgage lending income. The strong commercial loan growth in 2012 supported a 30% increase in loan fees compared to 2011. “The improvement in the local real estate market in both purchases and new construction, coupled with strong refinance activity and bolstered by record low home loan rates, account for most of the growth in non-interest income,” Trautman said.

The provision for loan loss expense of $361,000 in 2012, compared to $411,000 in 2011, resulted in reserves to total portfolio loans of 1.63 percent, compared to 1.69 percent in 2011.

Non-current loans (past due 90 days or more or non-accruing) at December 31, 2012, were 0.04 percent of total loans, compared to 0.15 percent in 2011. Non-performing assets to total loans, a ratio that adds other real estate owned to non-performing loans, was 1.52 percent at December 31, 2012, compared to 2.81 percent in 2011.

“People’s Bank’s 20 percent growth in total commercial loans this past year, along with the 16 percent growth in 2011 is indicative of our commitment to supporting local business growth in the Rogue Valley,” commented Trautman. “Capital continues to be strong at 10 percent, which allowed us the opportunity to expand our branch network to better serve the Southern Oregon community,” Trautman added.

The newest branch on Barnett Road opened in November of 2012 and is People’s Bank’s fourth Southern Oregon branch and second location in Medford. The new bank building also houses its commercial lending center, home lending division and administrative offices, all of which were moved from the Biddle Road location.

People’s Bank of Commerce is locally headquartered at its Barnett Road branch in Medford, Oregon. It has other branch locations in Medford, Ashland and Central Point, Oregon.

People’s Bank has total shareholders’ equity of $14.7 million and a book value of $12.13 per share. The stock trades in the over-the-counter market under the symbol "PBCO."

At December 31:

2012 2011
Total Loans, excl. loans held for sale $ 112,132,000 $ 93,774,000
Reserve for Loan Losses 1,833,000 1,583,000
Total Deposits 125,721,000 110,547,000
Total Shareholder’s Equity 14,680,000 13,614,000
Total Assets 144,542,000 126,692,000
Shares outstanding 1,209,753 1,192,762 *


Year ended December 31:

Net interest income $ 5,536,000 $ 4,841,000
Provision (credit) for loan losses 361,000 411,000
Mortgage revenue 1,376,000 678,000
Net income (loss) 875,000 528,000
Earnings (loss) per share 0.74 0.45 *
Average shares outstanding 1,186,094 1,164,385 *

Quarter ended December 31:

Net interest income $ 1,451,000 $ 1,308,000
Provision (credit) for loan losses 120,000 152,000
Mortgage revenue 375,000 306,000
Net income 199,000 213,000
Earnings per share 0.17 0.18 *
Average shares outstanding 1,199,420 1,183,762 *


Quarter ended September 30:

Net interest income $ 1,437,000 $ 1,245,000
Provision (credit) for loan losses 114,000 163,000
Mortgage revenue 413,000 145,000
Net income 252,000 155,000
Earnings per share 0.21 0.13 *
Average shares outstanding 1,194,253 1,179,262 *
* Retroactively adjusted for 2012 stock dividend

"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
Ken Trautman, President and CEO, 541-774-7654


People’s Bank of Commerce
Ken Trautman, President and CEO, 541-774-7654