People’s Bank of Commerce Reports 30% Increase in Quarterly Net Income

MEDFORD, Ore.--()--People’s Bank of Commerce (OTCBB: PBCO) announced today its financial results for the third quarter and year-to-date 2016 operations. The bank reported net income of $614,000 or $0.27 per diluted share for the third quarter of 2016, compared to net income of $472,000 or $0.21 per diluted share in the same quarter of 2015. Net income through September 30, 2016 totaled $1,360,000 or $0.61 per share compared to $1,181,000 or $0.56 per share for the same period in 2015.

“Total loans for the first nine months of 2016 when compared to the prior year are up a strong 24%, which is both a factor of the continued improvement in our local economy and the migration of customers to the only remaining community bank in Southern Oregon”

Highlights for the quarter included:

  • Net loans increased $9.5 million during the third quarter of 2016 compared to $5.2 million during the third quarter of 2015.
  • Deposits increased $3.8 million over the past 3 months compared to increasing $9.8 million during the third quarter of 2015.
  • The bank’s total assets increased $4.5 million during the third quarter of 2016 compared to increasing $10.4 million during the same period in 2015.
  • Net interest income for the third quarter of 2016 totaled $2.5 million compared to $2.1 million in the third quarter of 2015, an increase of 18%.
  • Non-Interest income was $590 thousand in the third quarter of 2016 compared to $605 thousand the third quarter of 2015.
  • Non-interest expense was $2.1 million in the third quarter of 2016 or 0.79% of average quarterly assets compared to $2.0 million in the third quarter of 2015 or 0.89% of average quarterly assets.
  • One loan for $70 thousand was on non-accrual at the end of the third quarter 2016. No loans were past due 90 days or more or on nonaccrual at the end of the third quarter in 2015.
  • The bank’s year-to-date efficiency ratio was 73.31% at the end of the third quarter of 2016 compared to 79.09% for the same period in 2015.
  • ROE and ROA for the third quarter of 2016 were 9.59% and 0.92%, respectively, and 8.13% and 0.84%, respectively, for the third quarter of 2015.

Balance Sheet

“Total loans for the first nine months of 2016 when compared to the prior year are up a strong 24%, which is both a factor of the continued improvement in our local economy and the migration of customers to the only remaining community bank in Southern Oregon,” noted Ken Trautman, bank President and CEO. “This has allowed the bank’s net interest income to increase and when coupled with expense control, provides for the continued improvement in our efficiency ratio. Deposits and assets increased 14% in the last twelve months, providing the liquidity needed for continued loan growth.”

Provision for Credit Losses

Continued strong loan growth has prompted a provision expense of $103 thousand in the third quarter of 2016 following a provision of $134 thousand in the second quarter of 2016 compared to a provision of $69 thousand in the third quarter of 2015 and no provision in the second quarter of 2015. At the end of the third 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 third quarter 2015.

Capital

At September 30, 2016, shareholder equity totaled $25.7 million, compared to $23.7 million at September 30, 2015. The bank’s leverage ratio was 9.6% as of September 30, 2016, compared to 10.1% at September 30, 2015. As a result of strong loan growth, the bank’s estimated total risk-based capital ratio was 13.29% as of the end of the quarter, compared to 15.05% for the same quarter in 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 $11.27 at September 30, 2016, compared to $10.44 one year earlier.

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. 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) 9/30/2016     6/30/2016     9/30/2015 9/30/2016     9/30/2015
Interest Income
Loans 2,388 2,297 2,031 8,900 7,928
Investments 193 204 162 803 558
Federal funds sold and due from banks 18   23   14   73   62  
Total Interest Income 2,599 2,524 2,207 9,776 8,548
 
Interest Expense
Deposits 110 130 104 504 386
Other -   -   -   -   -  
Total Interest Expense 110 130 104 504 386
 
Net Interest Income 2,489 2,394 2,103 9,272 8,162
Provision for Credit Losses 103   134   69   330   176  

Net Interest Income after provision for credit losses

2,386 2,260 2,034 8,942 7,986
 
Non-Interest Income
Service charges on deposit accounts 74 70 72 271 268
Mortgage lending income 217 189 243 657 1,114
Gain (loss) on other real estate - - (111 ) (8 )
Other non-interest income 299   290   290   892   769  
Total non-interest income 590 549 605 1,709 2,143
 
Non-Interest Expense
Salary and benefits 1,196 1,189 1,183 4,849 4,824
Premises and fixed assets 334 328 291 1,287 1,069
Other 569   621   552   2,268   2,119  
Total non-interest expense 2,099 2,138 2,026 8,404 8,012
 
Net income before taxes 877 671 613 2,247 2,117
Income taxes 263   223   141   663   613  
Net income 614   448   472   1,584   1,504  
 
Basic Earnings per share * 0.27 0.20 0.21 0.71 0.70
Diluted Earnings per share * 0.27 0.20 0.21 0.71 0.70
Average common shares outstanding * 2,279,022 2,274,167 2,238,292 2,239,957 2,154,638
 
Performance Measures
Return on average assets 0.92 % 0.47 % 0.84 % 0.62 % 0.69 %
Return on average equity 9.59 % 4.88 % 8.13 % 6.41 % 6.67 %
Net interest margin 4.00 % 3.81 % 3.99 % 3.87 % 4.17 %
Efficiency ratio 68.17 %     72.65 %     74.82 % 76.53 %     77.75 %
* adjusted for 5% stock dividends in March 2015, August 2015 & May 2016
 
                     
People's Bank of Commerce
Balance Sheet (unaudited)
(dollars in thousands) 9/30/2016 6/30/2016 3/31/2016 12/31/2015 9/30/2015
Assets
Cash and due from banks 11,897 8,800 11,645 11,498 12,113
Federal funds sold

-

-

- - -
Interest-bearing deposits 4,510 11,896 25,365 13,950 12,445
Investment securities 37,242 37,423 41,020 44,927 35,520
Loans held for sale 615 473 716 2,393 1,458

Loans held for investment, net of unearned income

192,653 183,018 174,728 160,341 155,154
Allowance for loan and lease losses (2,303 ) (2,198 ) (2,058 ) (1,964 ) (1,957 )
Loans, Net 190,350 180,820 172,670 158,377 153,197
Premises and equipment, net 6,946 7,034 5,854 5,128 4,520
Other assets 13,000   13,622   13,813   13,786   13,675  
Total assets 264,560   260,068   271,083   250,059   232,928  
 
 
Liabilities
Deposits
Demand noninterest-bearing 97,223 89,761 87,079 86,745 82,237
Demand interest-bearing 21,637 22,127 18,421 18,498 15,789
Money market and savings 98,613 99,784 115,295 94,619 87,060
Time deposits of less than $100,000 8,550 10,729 12,369 12,515 12,142
Time deposits of more than $100,000 10,810   10,634   11,715   12,093   10,262  
Total Deposits 236,833 233,035 244,879 224,470 207,490
Other liabilities 2,042   1,879   1,676   1,562   1,703  
Total liabilities 238,875 234,914 246,555 226,032 209,192
 
 
Shareholders' Equity
Common Stock, surplus, retained earnings 25,359 24,745 24,258 23,956 23,515

Accumulated other comprehensive income (loss)

326   409   270   71   221  
Total shareholders' equity 25,685 25,154 24,528 24,027 23,736
 
Total Liabilities and Equity 264,560   260,068   271,083   250,059   232,928  

Contacts

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

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