PBCO PBCO Financial Corporation (PK)

People�s Bank of Commerce (OTCBB:PBCO), southern Oregon�s only locally owned community bank, remains the highest capitalized bank in southern Oregon with capital exceeding 13.5%, despite earnings challenges caused by the real estate and housing slowdown. The slowdown caused the bank to report only $3,500 net profit for the second quarter of 2008, compared to $138,000 in 2007. Earnings per share were less than 1 cent compared to $0.17 per share in the second quarter of 2007. Earnings of $79,000 for the first six months of 2008 were down 68 percent when compared to the $250,000 earned last year. On a per share basis, earnings in 2008 were $0.09 compared to $0.29 in 2007. Mike Sickels, chairman and chief executive office, said the bank booked $116,000 of provision for loss expense and charged off $263,000 of nonperforming loans for the first six months of 2008. Noncurrent loans to total loans were 3.63 percent at June 30, 2008, a significant improvement from 6.07 percent at the end of the first quarter. �While this is still substantially higher than in years past,� said Ken Trautman, President, he noted that he believes �all problem loans have been identified and appropriate reserves have been set aside.� The reserve for losses stood at 1.22 percent of total loans at June 30, 2008 compared to 1.18 percent of loans last year. Although total portfolio loans of $67.4 million at June 30, 2008 were up only 2 percent from last year, the current totals represent a significant change in the mix of loans. Real estate loans declined by 30 percent from 2007 to 2008 while commercial loans increased by 17 percent. Trautman noted that this change in mix reflected �a planned decrease in residential real estate exposure and a change in focus to commercial and consumer loans.� Trautman also noted that mortgage lending operations at People�s Bank remain quite active. Mortgage revenue for the six months ended June 30, 2008 was actually up 4 percent over that of last year. The in-house lending and underwriting staff at People�s represent a viable option for home purchasers or those interested in refinance. People�s Bank continues to expand its geographic presence with the opening of its Central Point Branch in June of this year. Although the start-up costs of a new branch are sizeable, as with any new business, the expansion will provide the bank with the opportunity to better serve our customers and provide an avenue for future growth. The bank also reported that it had declared its quarterly cash dividend of $0.10 per share. This dividend will be paid September 1, 2008 to shareholders of record August 15, 2008. The bank has total shareholders� equity of nearly $11.5 million and a book value of $13.24 per share. The stock trades on the over-the-counter market under the symbol PBCO. � 2008 � � � � 2007 � Quarter ended June 30: Net income $ 3,500 $ 138,100 EPS $ 0.004 $ 0.17 � Quarter ended March 31: Net income $ 75,600 $ 111,600 EPS $ 0.09 $ 0.13 � Six months end June 30: Net income $ 79,100 $ 249,700 EPS $ 0.08 $ 0.29 � At June 30: Total Portfolio Loans $ 67,412,000 $ 66,321,000 Total Reserve for Loan Losses 822,000 779,000 Total Deposits 68,103,000 69,560,000 Total Assets 84,573,000 81,494,000 Total Shareholders' Equity 11,487,000 11,465,000 No. of shares outstanding 867,701 866,720 Book Value, per share $ 13.24 $ 13.23 � � At March 31: Total Portfolio Loans $ 71,446,000 $ 59,900,000 Total Reserve for Loan Losses 983,000 708,000 Total Deposits 74,432,000 68,224,000 Total Assets 86,546,000 79,957,000 Total Shareholders' Equity 11,582,000 11,321,000 Book Value, per share $ 13.36 $ 13.18 � � � 2007 data adjusted retroactively for stock dividend paid 4/15/08.