People’s Bank of Commerce Earnings Increase 37%

MEDFORD, Ore.--()--People’s Bank of Commerce (OTCBB: PBCO) announced today its financial results for the first quarter of 2018. The bank reported net income of $724,000 or $0.26 per diluted share for the first quarter of 2018, compared to net income of $528,000 or $0.23 per diluted share in the same quarter of 2017. Earnings in the fourth quarter of 2017 totaled $313,000 or $0.11 per diluted share. Earnings per share for the trailing 12 months, was $0.86 per share at the end of the first quarter 2018 from $0.93 per share for the prior period. Fourth quarter 2017 earnings were impacted by the one-time tax charge associated with the tax law revision of $413,000 or $0.15 per share.

“The bank anticipates continued additions to the allowance for loan and lease losses during 2018 due to anticipated loan growth”

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

  • Net loans increased 10%.
  • Deposits increased 16%
  • The bank’s total assets increased 17%.
  • Net interest income increased by 9%.
  • Non-Interest income increased 198%.
  • Non-interest expense increased 41%

President’s Comments

“The bank is seeing an increase in the number and size of requests for commercial loans, indicative of the strength of the local economy and the optimism of our business owners. This optimism was greatly assisted by the recently passed tax cuts that benefited a large majority of our customers. The net interest margin for the first quarter of 2018 was 4.35% compared to 4.33% for the same quarter of 2017. The efficiency ratio was 73.46% for the 12 months ending 3/31/18 from 72.28% for the 12 months ending 3/31/2017,” said Ken Trautman, President and CEO.

Provision for Credit Losses

Loan quality continues to be strong and loans outstanding are growing at a year-to-date annualized rate of over 20%. This growth resulted in an increase to the allowance for loan losses of $122,000, compared to a reduction in the allowance of $36,000 in the same quarter last year. The addition in 2018 was due to a 5% increase in loans outstanding during the quarter. “The bank anticipates continued additions to the allowance for loan and lease losses during 2018 due to anticipated loan growth,” commented Mr. Trautman.

Non-Interest Income

Non-interest income for the first quarter of 2018 was $1,547,000 compared to $519,000 for the same quarter of 2017, an increase of 198%. This increase was primarily driven by income generated by the Bank’s wholly owned subsidiary, Steelhead Finance, which provided $1,085,000 in revenue. Mortgage income for the 1st quarter of 2018 was down $64,000 when compared to the 1st quarter of 2017 on reduced volume.

Non-Interest Expense

Non-interest expense for the first quarter of 2018 was $3,286,000 compared to $2,330,000 for the same quarter of 2017, an increase of 41% driven primarily by salary and benefit increases associated with the Steelhead Finance purchase in September of 2017. The Bank also opened a full service branch in Klamath Falls during the first quarter of 2018 which increased non-interest expenses in all categories.

Capital

At March 31, 2018, shareholder equity totaled $32.0 million, compared to $26.6 million at March 31, 2017. The bank’s leverage ratio was 10.0% at the end of the first quarter 2018, compared to 9.8% one year ago. Book value per share was $11.65 on March 31, 2018, compared to $11.67 on March 31, 2017, when adjusted for the 5% stock dividend received in May of 2017.

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, 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              
Income Statement (unaudited)                
Three Months Ended Twelve Months Ended
(dollars in thousands) 3/31/2018     12/31/2017     3/31/2017   3/31/2018     3/31/2017  
Interest Income
Loans 2,741 2,678 2,484 10,625 9,649
Investments 173 164 176 700 772
Federal funds sold and due from banks 97   62   12   261   60  
Total interest income 3,011 2,904 2,672 11,586 10,481
 
Interest Expense
Deposits 143 130 93 485 435
Other 60   -   -   60   -  
Total interest expense 203 130 93 545 435
 
Net interest income 2,808 2,774 2,579 11,041 10,046
Provision for credit losses 122   72   (36 ) 211   237  

Net Interest Income after provision for credit losses

2,686 2,702 2,615 10,830 9,809
 
Non-Interest Income
Service charges on deposit accounts 75 74 78 287 289
Mortgage lending income 176 191 240 742 892
Steelhead Finance income 1,085 1,072 2,485
Gain (loss) on other real estate - - 22 22 62
Other non-interest income 211   150   179   742   906  
Total non-interest income 1,547 1,487 519 4,278 2,149
 
Non-Interest Expense
Bank salary and benefits 1,601 1,492 1,407 5,943 5,078
Steelhead Finance salary and benefits 495 462 957
Premises and fixed assets 389 419 335 1,530 1,340
Other 801   724   588   2,824   2,397  
Total non-interest expense 3,286 3,097 2,330 11,254 8,815
 
Net income before taxes 948 1,092 804 3,854 3,143
Income taxes 224   779   276   1,639   1,033  
Net income 724   313   528   2,215   2,110  
 
Basic earnings per share * 0.26 0.11 0.23 0.86 0.93
Diluted earnings per share * 0.26 0.11 0.23 0.85 0.93
Average common shares outstanding * 2,746,110 2,723,883 2,279,022 2,568,080 2,261,014
 
Performance Measures
Return on average assets 0.94 % 0.41 % 0.80 % 0.75 % 0.79 %
Return on average equity 8.93 % 3.87 % 7.97 % 8.23 % 6.41 %
Net interest margin 4.35 % 4.12 % 4.33 % 4.27 % 3.97 %
Efficiency ratio 75.45 % 72.68 % 75.21 % 73.46 % 72.28 %
* adjusted for 5% stock dividend May 2016, May 2017
 
People's Bank of Commerce          
Balance Sheet (unaudited)
(dollars in thousands) 3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017
Assets
Cash and due from banks 11,918 14,046 13,133 11,713 10,181
Federal funds sold -
Interest-bearing deposits 13,948 8,209 22,377 14,164 11,067
Investment securities 26,871 28,538 27,436 31,315 29,883
Loans held for sale 1,862 2,191 742 2,295 1,603

Loans held for investment, net of unearned income

219,359 208,657 202,165 202,891 199,990
Allowance for loan and lease losses (2,523 ) (2,400 ) (2,327 ) (2,339 ) (2,300 )
Loans, net 216,836 206,257 199,838 200,552 197,690
Premises and equipment, net 14,806 12,196 10,965 7,432 7,088
Other assets 32,581   31,004   26,601   13,947   13,966  
Total assets 318,822   302,441   301,092   281,418   271,478  
 
 
Liabilities
Deposits
Demand noninterest-bearing 126,424 118,948 117,755 113,979 106,171
Demand interest-bearing 27,188 26,218 25,717 23,882 22,858
Money market and savings 108,666 101,141 101,925 97,656 97,137
Time deposits of less than $100,000 16,483 16,555 17,087 8,406 8,501
Time deposits of more than $100,000 2,067   2,060   1,803   8,131   8,224  
Total deposits 280,828 264,922 264,287 252,054 242,891
Other liabilities 5,983   6,103   5,093   2,208   1,986  
Total liabilities 286,811 271,025 269,380 254,262 244,877
 
 
Shareholders' Equity
Common stock, surplus, retained earnings 32,901 32,152 31,671 27,067 26,578

Accumulated other comprehensive income (loss)

(249 ) (56 ) 41 89 23
Unearned ESOP shares (641 ) (680 ) -   -   -  
Total shareholders' equity 32,011 31,416 31,712 27,156 26,601
 
Total Liabilities and Equity 318,822 302,441 301,092 281,418 271,478

Contacts

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

Recent Stories

RSS feed for People’s Bank of Commerce

People’s Bank of Commerce