PBCO PBCO Financial Corporation (PK)

People�s Bank of Commerce (OTCBB:PBCO) reported quarterly earnings of $101,000, or $0.12 per share, for the fourth quarter of 2007 compared to $243,000, or $0.30 per share, for the same quarter in 2006. At December 31, 2007, the bank reported a 24 percent increase in portfolio loans to $74 million, a 5 percent increase in total assets to $87 million, and a 4 percent increase in deposits to $74 million. The results for the fourth quarter were similar to the soft earnings previously reported during the three prior quarters and contributed to reduced full year earnings. Earnings for the year ended December 31, 2007, were $510,000, or $0.62 per share, compared to $1,213,000, or $1.50 per share, earned during 2006. Total loans increased during the last half of 2007 to $74.3 million at the end of the year compared to $59.8 million last year for a 24 percent increase. Net interest margin for the fourth quarter of 2007 was relatively stable at 5.21 percent compared to 5.38 percent during the same period in 2006. Although net interest income for the fourth quarter of 2007 was up 2 percent when compared to the same quarter in the prior year, it was not strong enough to cover softer results in earlier quarters. The result was that net interest income of $3.9 million for the entire year 2007 was down 12 percent from the $4.5 million of 2006. The provision for loan loss expense of $246,000 in 2007 compared to a credit recovery of $74,000 in 2006 reflects both the increased provision resulting from a $14.5 million growth in total loans and some evidence of a slight decline in the quality of a few real estate related credits. �With uncertainty as to the depth and duration of the current real estate slowdown and its economic effect on the Rogue Valley, we continue to carefully monitor real estate related credits,� Sickels commented. Non-performing loans (past due 90 days or more or non-accruing) did increase at December 31, 2007 to $775,000 compared to $19,000 in 2006, but the increase is represented by a single commercial real estate loan. The bank had a modest net loan recovery, not a loss, for the year 2007. �We were quite satisfied with the strong commercial loan growth during the latter half of 2007,� commented Mike Sickels, chairman and chief executive officer, �as we counted on such growth replacing declining real estate loan totals. We made the strategic decision during the spring of 2006 to reduce our exposure to real estate construction and development credits, but recognized the result would be a significant decline in loan totals, unless we successfully targeted the commercial sector. The soft real estate market also adversely affected home mortgage originations as such revenue in 2007 was $935,000 compared to $1,210,000 in 2006.� The bank has its main office in Medford, a branch office in Ashland, and is constructing an office in Central Point that should be open in June 2008. People�s Bank has total shareholders� equity of $11.6 million and a book value of $14.05 per share. The stock trades in the over-the-counter market under the symbol �PBCO�. SUMMARY OF FINANCIAL RESULTS � � 2007 2006 � At December 31: � Total Loans, excl. loans held for sale $ 74,273,000 $ 59,829,000 Reserve for Loan Losses 969,000 723,000 Total Deposits 73,989,000 71,038,000 Total Shareholder's Equity 11,598,000 11,237,000 Total Assets 87,106,000 82,946,000 Shares outstanding 825,669 � 811,736 � Year ended December 31: � Net interest income $ 3,937,000 $ 4,460,000 Provision (credit) for loan losses 246,000 (74,000 ) Mortgage revenue 935,000 1,210,000 Net income 510,000 1,213,000 Earnings per share � $0.62 � $1.50 Dividends paid 0.40 0.40 Average shares outstanding 822,281 � 809,577 � Quarter ended December 31: � Net interest income $ 1,023,000 $ 1,001,000 Provision (credit) for loan losses 85,000 (24,000 ) Mortgage revenue 158,000 315,000 Net income 101,000 243,000 Earnings per share � $0.12 � $0.30 Dividends paid 0.10 0.10 Average shares outstanding 825,669 � 811,649 � Quarter ended September 30: � Net interest income $ 1,023,000 $ 1,175,000 Provision (credit) for loan losses 104,000 (39,000 ) Mortgage revenue 316,000 268,000 Net income 158,000 339,000 Earnings per share � $0.19 � $0.42 Dividends paid 0.10 0.10 Average shares outstanding 825,330 � 811,007