PBCO PBCO Financial Corporation (PK)

People�s Bank of Commerce (OTCBB:PBCO) reported today that its earnings for the first quarter of 2009 were $52,000 compared to the first quarter of 2008 when the bank earned $76,000. The bank reported earnings of $0.06 per share, adjusted for a recent 5% stock dividend, for the three months ended March 31, 2009 compared to $0.09 per share, adjusted, in 2008. The major changes in the bank�s earnings were the costs associated with the addition of a new branch in Central Point, Oregon and the 450% increase in FDIC Insurance premiums.

The bank has, however, experienced modest growth in portfolio loans of about 1% but deposits are down 3% from the same time last year. Portfolio loans at March 31, 2009 were $72 million and total deposits on the same date were $72 million. The bank also reported $2 million in loans held for sale which were originated by the bank�s home mortgage division.

�During these turbulent times in the banking industry, we continue to review and monitor asset quality and are committed to taking appropriate action as warranted. Having strong capital ratios has allowed the bank to decline any government bailout funds. People�s Bank is a locally owned community bank and we maintain our commitment to only serving this community,� explained Ken Trautman, President & CEO.

Management is closely monitoring the quality of the loan portfolio. While the bank has no charge off loans year-to-date, the bank has increased the provision for losses during the first quarter of the year. For the first quarter of 2009 the bank provided for a $45,000 provision expense. At the end of the first quarter, the reserve for loan losses stood at 1.23 percent of total portfolio loans compared to 1.38 percent of portfolio loans at the same time in 2008.

Trautman noted that real estate mortgage originations during the first quarter of 2009 were stronger than those of a year ago, but cautioned that it is difficult to determine at this time if this will continue during the rest of the year.

At March 31, 2009, the bank has total shareholders� equity of more than $11.2 million and a book value of $12.39 per share, adjusted for a 5% stock dividend paid recently. The stock trades on the over-the-counter market under the symbol PBCO.

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2009

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2008

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Quarter ended March 31:

Net interest income $ 883,000 $ 930,000 Provision for (reduction of) Loan losses 45,000 20,000 Noninterest income 465,000 385,000 Noninterest expense 1,249,000 1,203,000 Net income 52,000 76,000 EPS $ 0.06 * $ 0.09 * �

At March 31:

Total Portfolio Loans $ 71,844,000 $ 71,446,000 Total Reserve for Loan Losses 882,000 983,000 Total Deposits 72,166,000 74,432,000 Total Assets 86,540,000 86,546,000 Total Shareholders' Equity 11,278,000 11,582,000 No. of shares outstanding 910,176 910,176 * Book Value, per share $ 12.39 $ 12.72 * � * adjusted retroactively for 5% stock dividend in 2009. �