PBCO PBCO Financial Corporation (PK)

People’s Bank of Commerce (OTCBB:PBCO) today reported earnings of $585,000 for the first nine months of 2013, down 13% compared to $676,000 for the same period last year. This resulted in earnings of $0.42 per share for the first nine months of 2013, compared to $0.55 per share reported the prior year. Net interest income, which comprises 72% of the Bank’s revenue, was up by 14% year-to-date the result of continued strong loan growth during 2013.

“Strong portfolio loan and deposit growth in the past 12 months continues in excess of 16% and 22%, respectively as local businesses turn to People’s Bank, the only locally-owned and managed community bank left in Southern Oregon. The opening of our new administrative offices, loan center and branch, on the corner of Barnett and Highland in Medford, in November of 2012 has assisted us greatly in our growth over the last year. We are also excited to report that we have opened a full service branch in Grants Pass, Oregon to help fill the need for community banking in that city,” stated Ken Trautman, Bank President and CEO.

Earnings for the third quarter of 2013 were $223,000, compared to $252,000 for the same period in 2012, a decrease of 12%. The Bank reported earnings of $0.14 per share for the three months ending September 30, 2013, compared to $0.20 per share in 2012. “Per share earnings in the third quarter were affected by the nearly 500,000 shares of common stock added during the quarter, the result of a successful capital campaign,” added Trautman. “Personnel expenses associated with our newest branch offices in Medford and Grants Pass have resulted in increased non-interest expenses reducing net income during the period.”

Mortgage lending income in the third quarter decreased 51%, compared to the same period in the prior year, the result of higher interest rates on home loans and reduced refinancing opportunities. Non-interest income, excluding mortgage income, was 39% higher than the same period in the prior year. Non-interest expenses showed an increase of 11% over the same period last year.

The Bank’s loan quality remains excellent with non-current loans to total loans at 0.25%, as of September 30, 2013, up from 0.09% last year. Non-performing assets to total assets compares loans past due 90 days and more, loans on non-accrual and other real estate owned to total assets. This ratio was 0.67% as of September 30, 2013, compared to 1.39% at the end of September 2012. Reserves totaled 1.64% of total loans at the end of the third quarter 2013, compared to 1.62% one year ago. The loan loss provision totaled $154,000 for the first nine months of 2013, compared to $242,000 for the first nine months of 2012. “At the end of the quarter, the Bank has only one foreclosed property on its books,” Trautman commented.

People’s Bank reported total assets of $170.5 million at the end of September 2013, up 24% from the prior year. The Bank has total shareholders’ equity of $20.1 million, up 39% in the past year, and a book value of $11.35 per share. Tier one capital to assets remains strong at 11.7%, considerably above regulatory guidelines for a well-capitalized bank. The Bank’s stock trades on the over-the-counter market under the symbol PBCO.

                         

2013

2012

Quarter ended September 30:

Net interest income $ 1,623,000 $ 1,437,000 Provision for Loan Losses 66,316 114,000 Noninterest income 606,000 699,000 Noninterest expense 1,827,000 1,646,000 Net income 223,000 252,000 EPS 0.14 0.20 **  

Year to Date

Net Interest income $ 4,674,000 $ 4,085,000 Provision for Loan Losses 154,000 242,000 Noninterest income 1,705,000 1,792,000 Noninterest expense 5,365,000 4,637,000 Net income 585,000 676,000 EPS 0.42 0.55 **  

At September 30:

Total Portfolio Loans $ 122,331,000 $ 105,104,000 Total Reserve for Loan Losses 2,010,000 1,750,000 Total Deposits 147,924,000 120,767,000 Total Assets 170,463,000 137,060,000 Total Shareholders' Equity 20,064,000 14,384,000 No. of shares outstanding 1,768,074 1,253,966 ** Book Value, per share 11.35 11.47 **   ** Retroactively adjusted for 2013 stock dividend  

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as People’s Bank or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar import. Similarly, statements herein that describe People’s Bank’s business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements.

People’s Bank of CommerceKen Trautman, 541-774-7654President and CEO