People’s Bank Reports Earnings

People’s Bank of Commerce (OTCBB: PBCO) announced today its financial results for the third quarter and year-to-date 2019. The bank reported net income of $947,000 or $0.30 per basic and diluted share for the third quarter of 2019, compared to net income of $948,000 or $0.31 per share in the same quarter of 2018. Earnings for the first nine months of 2019 totaled $2,719,000 or $0.89 per share compared to $2,516,000 or $0.85 per share during the first three quarters of 2018. Earnings per share for the trailing 12 months ending September 30, 2019 were $1.19 per share compared to $0.94 per diluted share during the same period one year earlier.

Balance Sheet September 30, 2019 vs. September 30, 2018:

• Total Loans increased 13%
• Total Deposits increased 7%
• Total Assets increased 8%
• Total Equity increased 14%

Income Statement year-to-date September 30, 2019 vs. September 30, 2018:

• Net-interest Income increased 16%
• Pre-tax income increased 11%
• Non-interest Income decreased 4%
• Non-interest Expense increased 9%

President’s Comments

“Total loans continue to show good growth over the past 9 months,” stated Ken Trautman, bank President and CEO. “The bank’s factoring division, Steelhead Finance, has seen a softening in income in 2019 which follows the trucking industry’s reduced activity. The bank retooled its residential mortgage department in 2019, which is now starting to pay dividends, with an increase in income for the first nine months of 2019 over 2018 of 64%,” commented Trautman. “2019 has been a year of change for the bank, which included a core processing conversion as well as staff reductions in our branch system allowed by improved technology and processing centralization,” added Trautman.

Provision for Credit Losses

The bank’s YTD provision for loan and lease losses was $211 thousand compared a provision of $293 thousand during the same period last year. Credit quality remains strong with no loans past due over 90 days or on non-accrual at the end of September 2019 and September 2018. At the end of the third quarter 2019, the loan loss reserve was 1.117% of loans held for investment compared to 1.124% at the end of the third quarter 2018.

Non-Interest Income

For the quarter ending September 30, 2019, non-interest income was $1.70 million compared to $1.74 million in the same quarter one year earlier. For the first three quarters of 2019, non-interest income was lower than the previous year with $4.9 million compared to $5.1 million year-to-date in 2018. Steelhead Finance, the bank’s factoring division, generated $3.2 million in non-interest income during the three quarters of 2019.

Non-Interest Expense

For the quarter ending September 30, 2019, non-interest expense was $3.9 million compared to $3.6 million in the same quarter of 2018. Year-to-date non-interest expense totaled $11.4 million through September 30, 2019, compared to $10.5 million in the same period the prior year.

Capital

As of September 30, 2019, shareholder’s equity totaled $38.8 million, compared to $34.0 million at September 30, 2018. The bank’s Tier 1 capital ratio was 9.73% at the end of the third quarter 2019, compared to 9.28% one year ago. Tangible Book value per share was $11.23 on September 30, 2019, compared to $10.10 on September 30, 2018, when adjusted for the 5% stock dividend received in May of 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)		9/30/2019		6/30/2019		3/31/2019		12/31/2018		9/30/2018
Assets
Cash and due from banks		2,798		3,747		4,736		9,382		3,928
Federal funds sold
Interest-bearing deposits		16,004		18,694		30,152		17,127		21,381
Investment securities		23,212		22,585		20,031		25,878		24,462
Loans held for sale		3,909		2,013		1,157		2,084		215
Loans held for investment, net of unearned income		271,635		261,835		256,389		249,949		240,093
Allowance for loan and lease losses		(3,033)		(2,920)		(2,880)		(2,812)		(2,701)
Loans, net		268,602		258,915		254,666		247,137		237,392
Premises and equipment, net		20,529		20,736		21,086		16,807		16,387
Other assets		28,818		31,185		30,894		31,110		32,730
Total assets		363,872		357,875		361,565		349,525		336,495
Liabilities
Deposits
Demand noninterest-bearing		140,458		136,211		128,937		124,866		120,679
Demand interest-bearing		47,020		46,690		56,175		48,813		44,661
Money market and savings		108,614		105,310		110,237		117,714		112,728
Time deposits of less than $250,000		15,419		17,915		16,750		15,300		15,017
Time deposits of more than $250,000		2,949		2,682		1,873		1,317		2,081
Total deposits		314,460		308,808		313,972		308,010		295,166
Other liabilities		10,611		11,308		11,137		6,062		7,290
Total liabilities		325,071		320,116		325,109		314,072		302,456
Capital
Common stock, surplus, retained earnings		38,879		37,913		36,863		36,011		34,920
Accumulated other comprehensive income (loss)		249		212		(2)		(113)		(319)
Unearned ESOP Shares		(327)		(366)		(405)		(445)		(562)
Total shareholders' equity		38,801		37,759		36,456		35,453		34,039
Total Liabilities and Equity		363,872		357,875		361,565		349,525		336,495
memo:
Total intangible assets and goodwill		3,486		3,486		3,486		3,486		3,468
Current shares outstanding		3,122,591		3,122,155		2,955,964		2,953,464		2,913,752

People's Bank of Commerce
Income Statement (unaudited)
		Three Months Ended						Twelve Months Ended
(dollars in thousands)		9/30/2019		6/30/2019		9/30/2018		9/30/2019		9/30/2018
Interest Income
Loans		3,672		3,543		3,152		14,032		11,527
Investments		160		130		152		608		660
Federal funds sold and due from banks		136		92		182		498		449
Total interest income		3,968		3,765		3,487		15,138		12,636
Interest Expense
Deposits		354		350		241		1,328		701
Other		5		6		77		91		221
Total interest expense		359		356		318		1,419		922
Net interest income		3,609		3,409		3,169		13,719		11,714
Provision for credit losses		113		39		69		323		365
Net Interest Income after provision for credit losses		3,496		3,370		3,100		13,395		11,349
Non-Interest Income
Service charges on deposit accounts		84		78		76		307		304
Mortgage lending income		294		261		130		914		656
Steelhead Finance income		1,044		1,062		1,339		4,337		4,808
Gain (loss) on other real estate		-		-		-				113
Other non-interest income		273		274		199		892		736
Total non-interest income		1,695		1,675		1,744		6,450		6,617
Non-Interest Expense
Salary and Benefits		2,434		2,425		2,297		9,585		8,563
Premises and fixed assets		544		547		460		2,194		1,742
Other		883		844		827		3,391		3,248
Total non-interest expense		3,861		3,816		3,585		15,170		13,553
Net income before taxes		1,330		1,229		1,259		4,676		4,413
Income taxes		383		296		311		1,075		1,584
Net income		947		933		948		3,601		2,829
Basic earnings per share		0.30		0.30		0.31		1.19		0.96
Diluted earnings per share		0.30		0.30		0.31		1.19		0.94
Average common shares outstanding		3,122,591		3,110,261		3,055,384		3,028,945		2,948,101
Performance Measures
Return on average assets		1.02%		1.06%		1.11%		1.04%		0.88%
Return on average equity		9.88%		10.09%		11.43%		9.73%		8.62%
Net interest margin		4.54%		4.60%		4.05%		4.27%		4.21%
Efficiency ratio		72.79%		75.06%		72.97%		75.21%		73.93%

 

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