People’s Bank Reports 50% Increase In Fourth Quarter Earnings

People’s Bank of Commerce (OTCBB:PBCO) reported fourth quarter earnings for 2013 were $301,000 or $0.17 per share, compared to $199,000 or $0.16 per share for the same quarter in 2012. “Fourth quarter earnings gained one cent per share even though the Bank sold over 500,000 new shares of common stock during the 3 rd and 4 th quarters of 2013,” said Ken Trautman, President and CEO. Net interest income for the fourth quarter of 2013 was up 17 percent, when compared to the same quarter in the prior year, due to strong loan growth.

Earnings for the year ended December 31, 2013, were $886,000 or $0.59 per share, compared to earnings of $875,000 or $0.71 per share during 2012. Net interest income for the year of $6.4 million was up 15 percent from $5.5 million in 2012. At December 31, 2013, the Bank reported a 25 percent increase in total assets to $181.1 million, a 26 percent increase in deposits to $158.3 million, and a 12 percent increase in portfolio loans to $125.7 million, when compared to the prior year.

Non-interest expenses were up 13 percent in 2013 primarily the result of increased overhead expenses associated with People’s Bank opening two new branches in the last fourteen months; the new headquarters branch on Barnett Road in Medford and a new branch in Grants Pass, Oregon. “Both of these new branches will play an important part in People’s Bank fulfilling its mission of increasing its presence in the Southern Oregon markets it serves,” commented Trautman.

Non-interest income for the current year was down 11% from the last year, the direct result of mortgage lending income dropping 34 percent from the prior year’s level. “Following the rest of the industry, People’s Bank’s volume of home loans dropped significantly during 2013 as interest rates on 30 year home loans increased to 4.50 percent in the fourth quarter of 2013, up from 3.35 percent in the fourth quarter of 2012. The good news is that the local residential real estate market continues to show improvement even though inventory levels remain historically low and the increase in interest rates has slowed the refinance market,” Trautman said.

The provision for loan loss expense of $104,000 in 2013, compared to $361,000 in 2012, resulted in reserves to total portfolio loans of 1.56 percent, compared to 1.63 percent in 2012.

Non-current loans (past due 90 days or more or non-accruing) at December 31, 2013, were 0.00 percent of total loans, compared to 0.04 percent in 2012. Non-performing assets to total loans, a ratio that adds other real estate owned to non-performing loans, was 1.13 percent at December 31, 2013, compared to 1.52 percent in 2012.

“The continued improvement in loan quality, the maturing of the branch network, and the continued disruption in the local market area caused by past and pending bank mergers assisted the Bank greatly in 2013 and positions it well for the future,” commented Trautman. “Tier 1 Capital is strong at 11.5 percent, which allowed the Bank the opportunity to expand its branch network to better serve the Southern Oregon community,” Trautman added.

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

People’s Bank has total shareholders’ equity of $20.9 million and a book value of $11.51 per share. The stock trades in the over-the-counter market under the symbol "PBCO."

At December 31:
2013 2012
Total Loans, excl. loans held for sale $ 125,674,000 $ 112,132,000
Reserve for Loan Losses 1,961,000 1,833,000
Total Deposits 158,267,000 125,721,000
Total Shareholder’s Equity 20,935,000 14,680,000
Total Assets 181,085,000 144,542,000
Shares outstanding 1,818,902 1,270,241 *

Year ended December 31:
Net interest income $ 6,377,000 $ 5,536,000
Provision (credit) for loan losses 104,000 361,000
Mortgage revenue 910,000 1,376,000
Net income (loss) 886,000 875,000
Earnings (loss) per share 0.59 0.71 *
Average shares outstanding 1,493,587 1,230,943 *

Quarter ended December 31:
Net interest income $ 1,702,000 $ 1,451,000
Provision (credit) for loan losses (50,000 ) 120,000
Mortgage revenue 198,000 375,000
Net income 301,000 199,000
Earnings per share 0.17 0.16 *
Average shares outstanding 1,818,902 1,259,391 *

Quarter ended September 30:
Net interest income $ 1,623,000 $ 1,437,000
Provision (credit) for loan losses 66,000 114,000
Mortgage revenue 203,000 413,000
Net income 223,000 252,000
Earnings per share 0.14 0.20 *
Average shares outstanding 1,595,211 1,253,966 *
* Retroactively adjusted for 2013 stock dividend

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