People’s Bank Reports Earnings

MEDFORD, Ore.--()--People’s Bank of Commerce (OTCBB: PBCO) announced today its financial results for the third quarter and year-to-date 2020. The bank reported net income of $1,937,000 or $0.55 per basic and diluted share for the third quarter of 2020, compared to net income of $947,000 or $0.30 per share in the same quarter of 2019. Earnings for the first nine months of 2020 totaled $4,433,000 or $1.28 per share compared to $2,719,000 or $0.89 per share during the first three quarters of 2019. Earnings per share for the trailing 12 months ending September 30, 2020 were $1.71 per share compared to $1.19 during the same period one year earlier.

Balance sheet September 30, 2020 vs. September 30, 2019:

  • Total Loans increased 35%
  • Total Deposits increased 37%
  • Total Assets increased 37%
  • Total Equity increased 31%

Income statement year-to date September 30, 2020 vs. September 30, 2019:

  • Net-interest Income increased 10%
  • Pre-tax income increased 56%
  • Mortgage lending income up by 308%
  • Non-interest Income increased 44%
  • Non-interest Expense increased 1%

CEO’s Comments

“Over five years ago the bank created a strategic plan that focused on the development of non-interest income that would stabilize the bank’s earnings during periods of low interest rates. Today we are seeing the benefits of that strategy as interest rates are again at all-time lows. While low rates are detrimental to our overall net interest income after provision, up only 1% over the same period in 2019, they do enhance the income potential of our Home Lending Department. The bank’s factoring company, purchased in 2017, is also contributing good, consistent non-interest income, even considering the pandemic shutdown in April and May of this year. The Paycheck Protection Program (PPP) processing fee income also contributed to a very strong first nine months of 2020. Total loan growth, excluding PPP loans, has been very soft through the 3rd quarter of 2020, while deposits are up 37%, some of which can also be attributed to PPP,” stated Ken Trautman, People’s Bank CEO.

“Last year I said that 2019 had been a year of change for the bank, which included a core processing conversion as well as staff reductions in our branch system due to improved technology and processing centralization. The year 2020 has been a year of adaptation as we navigate through the COVID-19 reality, face devastating wildfires and wait for a return to normalcy,” added Trautman.

“The year’s unique circumstances of increased fee income due to the pandemic has enabled the bank and its employees to substantially contribute to the rebuilding of the Rogue Valley community after the tragic fires which displaced nearly 3,000 families,” commented Trautman. “Through a donation to the People’s Bank of Commerce Foundation of more than $1.2 million, the bank and its employees are proud to support the newly formed Southern Oregon Housing Initiative. This collaboration of community businesses and partners is diligently working to develop solutions for intermediate and long-term housing for fire victims.”

Provision for Credit Losses

The bank’s year-to-date provision for loan and lease losses was $1.2 million compared a provision of $211 thousand during the same period last year. This increase was a hedge against the unknown credit issues that could arise because of the COVID-19 pandemic. In spite of COVID-19, credit quality remains strong with no loans past due over 90 days or on non-accrual at September 30, 2020, consistent with the same time in 2019. At the end of the third quarter 2020, the loan loss reserve for portfolio loans, excluding PPP loans, was 1.56% compared to 1.12% at the end of the third quarter 2019.

Non-Interest Income

For the quarter ending September 30, 2020, non-interest income was $3.1 million compared to $1.70 million in the same quarter one year earlier. For the first three quarters of 2020, non-interest income was significantly higher than the previous year with $7.1 million compared to $4.9 million year-to-date in 2019. The bank’s home lending division generated $3.1 million in non-interest income while Steelhead Finance, the bank’s factoring division, generated $2.8 million during the three quarters of 2020.

Non-Interest Expense

For the quarter ending September 30, 2020, non-interest expense was $4.3 million compared to $3.9 million in the same quarter of 2019. Year-to-date non-interest expense totaled $11.6 million through September 30, 2020, compared to $11.4 million in the same period the prior year.

Capital

As of September 30, 2020, shareholder’s equity totaled $50.9 million, compared to $38.8 million at September 30, 2019. The bank’s Tier 1 capital ratio was 9.40% at the end of the third quarter 2020, compared to 9.73% one year ago. Tangible Book value per share was $13.25 on September 30, 2020, compared to $11.23 on September 30, 2019.

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.peoplesbank.bank.

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, Grants Pass and Klamath Falls.

"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
Balance Sheet (unaudited)
(dollars in thousands) 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019
Assets
Cash and due from banks

3,659

 

3,398

 

7,459

 

3,711

 

2,798

 

Federal funds sold
Interest-bearing deposits

49,336

 

57,717

 

14,899

 

11,936

 

16,004

 

Investment securities

22,910

 

23,597

 

27,172

 

27,734

 

23,212

 

Loans held for sale

17,386

 

8,106

 

6,648

 

2,474

 

3,909

 

Loans held for investment,

355,855

 

354,170

 

269,752

 

278,277

 

271,635

 

net of unearned income
Allowance for loan and lease losses

(4,271

)

(4,024

)

(3,378

)

(3,119

)

(3,033

)

Loans, net

351,584

 

350,146

 

266,374

 

275,158

 

268,602

 

Premises and equipment, net

20,664

 

20,469

 

20,170

 

20,306

 

20,529

 

Other assets

34,423

 

30,308

 

31,383

 

28,855

 

28,818

 

Total assets

499,963

 

493,742

 

374,105

 

370,174

 

363,872

 

 
 
Liabilities
Deposits
Demand noninterest-bearing

219,836

 

199,808

 

141,448

 

136,051

 

140,458

 

Demand interest-bearing

54,711

 

46,396

 

38,257

 

44,341

 

47,020

 

Money market and savings

134,053

 

125,023

 

112,238

 

107,985

 

108,614

 

Time deposits of less than $250,000

20,012

 

20,897

 

16,231

 

15,715

 

15,419

 

Time deposits of more than $250,000

3,282

 

2,318

 

2,578

 

2,701

 

2,949

 

Total deposits

431,894

 

394,442

 

310,752

 

306,793

 

314,460

 

Other liabilities

17,217

 

50,358

 

16,603

 

21,722

 

10,611

 

Total liabilities

449,111

 

444,800

 

327,355

 

328,515

 

325,071

 

 
Capital
Common stock, surplus, retained earnings

50,162

 

48,222

 

46,622

 

41,663

 

38,879

 

Accumulated other comprehensive

690

 

720

 

128

 

208

 

249

 

income (loss)
Unearned ESOP Shares

-

 

-

 

-

 

(212

)

(327

)

Total shareholders' equity

50,852

 

48,942

 

46,750

 

41,659

 

38,801

 

 
Total Liabilities and Equity

499,963

 

493,742

 

374,105

 

370,174

 

363,872

 

 
memo:
Total intangible assets and goodwill

3,486

 

3,486

 

3,486

 

3,486

 

3,486

 

 
Current shares outstanding

3,523,078

 

3,522,857

 

3,500,065

 

3,241,075

 

3,122,591

 

People's Bank of Commerce
Income Statement (unaudited)

Three Months Ended

 

Twelve Months Ended

(dollars in thousands)

9/30/2020

6/30/2020

9/30/2019

 

9/30/2020

9/30/2019

Interest Income
Loans

4,065

 

3,874

 

3,672

 

15,339

 

14,032

 

Investments

133

 

157

 

160

 

607

 

608

 

Federal funds sold and due from banks

28

 

26

 

136

 

190

 

498

 

Total interest income

4,226

 

4,057

 

3,968

 

16,136

 

15,138

 

 
Interest Expense
Deposits

177

 

181

 

354

 

951

 

1,328

 

Other

41

 

67

 

5

 

152

 

91

 

Total interest expense

218

 

248

 

359

 

1,103

 

1,419

 

 
Net interest income

4,008

 

3,809

 

3,609

 

15,033

 

13,719

 

Provision for credit losses

247

 

644

 

113

 

1,235

 

323

 

Net Interest Income after provision

3,761

 

3,165

 

3,496

 

13,798

 

13,395

 

for credit losses
 
Non-Interest Income
Service charges on deposit accounts

55

 

54

 

84

 

275

 

307

 

Mortgage lending income

1,604

 

960

 

294

 

3,571

 

914

 

Steelhead Finance income

1,074

 

808

 

1,044

 

3,737

 

4,337

 

Gain (loss) on other real estate

-

 

-

 

-

 

-

 

Other non-interest income

332

 

291

 

273

 

1,247

 

892

 

Total non-interest income

3,065

 

2,113

 

1,695

 

8,830

 

6,450

 

 
Non-Interest Expense
Salary and Benefits

2,779

 

2,116

 

2,434

 

9,548

 

9,585

 

Premises and fixed assets

556

 

543

 

544

 

2,235

 

2,194

 

Other

1,012

 

838

 

883

 

3,265

 

3,391

 

Total non-interest expense

4,347

 

3,497

 

3,861

 

15,048

 

15,170

 

 
Net income before taxes

2,479

 

1,781

 

1,330

 

7,580

 

4,676

 

Income taxes

542

 

396

 

383

 

1,797

 

1,075

 

Net income

1,937

 

1,385

 

947

 

5,783

 

3,601

 

 
Basic earnings per share

0.55

 

0.39

 

0.30

 

1.71

 

1.19

 

Diluted earnings per share

0.55

 

0.39

 

0.30

 

1.70

 

1.19

 

Average common shares outstanding

3,523,004

 

3,522,783

 

3,122,591

 

3,389,579

 

3,028,945

 

 
Performance Measures
Return on average assets

1.58

%

1.16

%

1.02

%

1.35

%

1.04

%

Return on average equity

15.55

%

11.53

%

9.88

%

12.75

%

9.73

%

Net interest margin

3.68

%

3.61

%

4.54

%

4.09

%

4.27

%

Efficiency ratio

61.46

%

59.05

%

72.79

%

63.06

%

75.21

%

 

Contacts

Ken Trautman, CEO
(541) 774-7654, ken@peoplesbank.bank

Contacts

Ken Trautman, CEO
(541) 774-7654, ken@peoplesbank.bank