PBCO PBCO Financial Corporation (PK)

People's Bank of Commerce (OTCBB: PBCO) today reported earnings for the second quarter of 2010 of $59,000, up 90% over those of the immediately preceding quarter, however, they were up even more significantly when compared to a loss of $513,000 in the same quarter in 2009. The bank reported earnings of $0.07 per share for the three months ending June 30, 2010 compared to ($0.56) per share, in 2009.

Earnings of $91,000 for the first six months of 2010 were up considerably when compared to the loss of $461,000 last year. Non-interest income was down 31%, during the first two quarters of 2010 compared to last year, primarily due to a 52% reduction in mortgage lending income, reflective of the continued softness in local home sales.

"I am pleased to report our fourth consecutive quarter of profitability, which is noteworthy considering Oregon's current economic condition," said Ken Trautman, President and CEO of People's Bank. "During this challenging time for banks and the economy, our positive net earnings reflect the underlying strength and fundamentally sound operating model of People's Bank. Improvement in our net interest income, careful management of expenses, and our moderate need to increase loan loss reserves has benefited the bank greatly during the last year."

The bank increased portfolio loans $8.4 million or 12% during the past 12 months and deposits increased $6.9 million or 8% during the same period. "These increases in loans reaffirm People's Bank's commitment to providing needed lending to local businesses," commented Trautman. "The increased regulatory environment that we face has pleasantly provided the bank new opportunities. As our competition works to improve their capital and non-performing asset levels, we have been actively looking for and making good loans to local businesses."

The quality of the bank's loan portfolio has improved over the prior year with the current level of non-current loans to total loans of 3.77%, down from 4.80% last year. At the end of the second quarter 2010, reserves totaled 1.79% of total loans, compared to 1.66% one year ago. The loan loss provision for the first six months of 2010 totaled $224,000 compared to the $1,039,000 credited last year.

People's Bank reported total assets, at the end of June 2010, of $104,063,000, up 7% from the prior year. The bank has total shareholders' equity of $11 million and a book value of $12.00 per share. The stock trades on the over-the-counter market under the symbol PBCO.

People's Bank of Commerce
Q2 2010 Earnings Release
July 19, 2010

                                            2010                       2009
                                   -------------              -------------
Quarter ended June 30:
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Net interest income                    1,033,000                   902,000
Provision for Loan Losses                139,000                   994,000
Noninterest income                       390,000                   583,000
Noninterest expense                    1,222,000                 1,348,000
Net income                                59,000                  (513,000)
EPS                                        $0.07                    ($0.56)

Year to Date
-----------------------------
Net Interest income                    2,018,000                 1,785,000
Provision for Loan Losses                224,000                 1,039,000
Noninterest income                       728,000                 1,048,000
Noninterest expense                    2,442,000                 2,597,000
Net income                                91,000                  (461,000)
EPS                                        $0.10                    ($0.51)

At June 30:
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Total Portfolio Loans                 81,463,000                73,021,000
Total Reserve for Loan Losses          1,487,000                 1,209,000
Total Deposits                        91,858,000                84,966,000
Total Assets                         104,063,000                96,909,000
Total Shareholders' Equity            11,004,000                10,736,000
No. of shares outstanding                917,317                   910,176
Book Value, per share                     $12.00                    $11.80

Contact: Ken Trautman President and CEO (541) 774-7654