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People’s Bank Year-to-date Earnings per Share Increase 24%

People’s Bank of Commerce (OTCBB: PBCO) announced today its financial results for the second quarter and year-to-date 2020. The bank reported net income of $1,385,000 or $0.39 per basic and diluted share for the second quarter of 2020, compared to net income of $933,000 or $0.30 per share in the same quarter of 2019. Earnings for the first six months of 2020 totaled $2,496,000 or $0.72 per share compared to $1,772,000 or $0.58 per share during the first half of 2019. Earnings per diluted share for the trailing 12 months ending June 30, 2020 were $1.46 per share compared to $1.21 one year earlier.

Balance Sheet June 30, 2020 versus June 30, 2019:

  • Total Loans increased 37%, PPP loans accounted for 94.8% of the total increase
  • Total Deposits increased 28%
  • Total Assets increased 38%
  • Total Equity increased 30%
  • Year to Date Return on Average Assets as of June 30, 2020 was 1.17%
  • Year to Date Return on Average Equity as of June 30, 2020 was 10.88%

Income Statement year-to date June 30, 2020 versus June 30, 2019:

  • Net-interest Income before the provision for losses increased 9%
  • Pre-tax income increased 40%
  • Non-interest Income increased 25%
  • Non-interest Expense decreased 4%

CEO’s Comments

"Total loans and deposits continued to grow through the first half of 2020, at 37% and 28% respectively, significantly aided by the Paycheck Protection Program (PPP)," stated Ken Trautman, bank CEO. "The Net Interest Margin experienced compression in second quarter, resulting from the bank’s portfolio of PPP loans originated during the quarter with a 1% fixed interest rate," explained Trautman. "The bank is also receiving strong income from our residential mortgage lending division. Residential mortgage opportunities are expected to continue throughout the balance of this year based on the continued low home loan rates."

Provision for Credit Losses

Mr. Trautman continued, "Credit quality remains strong with no loans past due over 90 days or on non-accrual at the end of June 2020. Although problem assets have not materialized as a result of the COVID-19 pandemic, the bank has used its strong earnings to build its loan loss reserve for portfolio loans (excluding PPP loans) to 1.46% at the end of the second quarter 2020, compared to 1.12% for the same period in 2019."

Non-Interest Income

For the quarter ending June 30, 2020, non-interest income was $2.1 million compared to $1.7 million in the same quarter one year earlier. For the first half of 2020, non-interest income was $4.0 million compared to $3.2 million year-to-date in 2019. The bank’s Steelhead Finance Division generated $1.8 million in non-interest income during the first half of 2020, compared to $2.1 million in the same period the prior year, a direct result of the economic slowdown caused by the COVID-19 pandemic. This reduction in Steelhead income was completely offset by the significant increase in income generated by our Residential Lending Division, which produced $1.5 million in income during the first half of 2020 compared to $471 thousand in income for the same period last year.

Non-Interest Expense

For the quarter ending June 30, 2020, non-interest expense was $3.5 million compared to $3.8 million in 2019. Year-to-date non-interest expense totaled $7.3 million through June 30, 2020, compared to $7.6 million in the same period the prior year. Mr. Trautman explained, "The most significant item impacting non-interest expense during 2020 was salary expense, which decreased 5%, the result of operating efficiencies gained by improved digital platforms and centralization of duties, as well as expense offsets recognized from PPP processing fees."

Capital

As of June 30, 2020, shareholder’s equity totaled $49 million, compared to $38 million at June 30, 2019. Five million of the increase in shareholder equity was the result of the capital campaign completed in the first quarter of 2020, the balance was supported by bank earnings. The bank’s modified Tier 1 Capital Ratio, which excludes Paycheck Protection Program Liquidity Facility (PPPLF) advances, was 9.82% at the end of the second quarter 2020, compared to 9.61% one year ago. Tangible Book value per share was $12.70 at June 30, 2020, compared to $10.91 on June 30, 2019.

About People’s Bank of Commerce

People’s Bank of Commerce’s stock trades on the over-the-counter market under the symbol PBCO. Additional information about the Bank is available in the investor section of the bank’s website at: www.peoplesbank.bank.

Founded in 1998, People’s Bank of Commerce is the only locally owned and managed community bank in Southern Oregon. People’s Bank of Commerce is a full service bank headquartered in Medford, Oregon with branches in Medford, Ashland, Central Point, Grants Pass and Klamath Falls.

"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 Commerce
Income Statement (unaudited)
Three Months Ended Twelve Months Ended
(dollars in thousands) 6/30/20203/31/20206/30/20196/30/20206/30/2019
Interest Income
Loans

3,874

 

3,671

 

3,543

 

14,945

 

13,513

 

Investments

157

 

160

 

130

 

634

 

600

 

Federal funds sold and due from banks

26

 

63

 

92

 

298

 

544

 

Total interest income

4,057

 

3,894

 

3,765

 

15,877

 

14,657

 

 
Interest Expense
Deposits

181

 

279

 

350

 

1,129

 

1,216

 

Other

67

 

30

 

6

 

115

 

162

 

Total interest expense

248

 

309

 

356

 

1,244

 

1,378

 

 
Net interest income

3,809

 

3,585

 

3,409

 

14,633

 

13,279

 

Provision for credit losses

644

 

260

 

39

 

1,101

 

280

 

Net Interest Income after provision

3,165

 

3,325

 

3,370

 

13,532

 

12,999

 

for credit losses
 
Non-Interest Income
Service charges on deposit accounts

54

 

82

 

78

 

304

 

299

 

Mortgage lending income

960

 

553

 

261

 

2,261

 

751

 

Steelhead Finance income

808

 

951

 

1,062

 

3,707

 

4,631

 

Gain (loss) on other real estate

-

 

-

 

-

 

-

 

-

 

Other non-interest income

291

 

341

 

274

 

1,188

 

818

 

Total non-interest income

2,113

 

1,927

 

1,675

 

7,460

 

6,499

 

 
Non-Interest Expense
Salary and Benefits

2,116

 

2,443

 

2,425

 

9,203

 

9,448

 

Premises and fixed assets

543

 

532

 

547

 

2,223

 

2,110

 

Other

838

 

786

 

844

 

3,135

 

3,336

 

Total non-interest expense

3,497

 

3,761

 

3,816

 

14,561

 

14,894

 

 
Net income before taxes

1,781

 

1,491

 

1,229

 

6,431

 

4,604

 

Income taxes

396

 

380

 

296

 

1,638

 

1,003

 

Net income

1,385

 

1,111

 

933

 

4,793

 

3,601

 

 
Basic earnings per share

0.39

 

0.33

 

0.30

 

1.46

 

1.21

 

Diluted earnings per share

0.39

 

0.33

 

0.30

 

1.31

 

1.21

 

Average common shares outstanding

3,522,783

 

3,342,993

 

3,110,261

 

3,289,476

 

2,975,770

 

 
Performance Measures
Return on average assets

1.16

%

1.18

%

0.94

%

1.20

%

1.04

%

Return on average equity

11.53

%

10.16

%

9.29

%

11.28

%

10.24

%

Net interest margin

3.61

%

4.43

%

4.33

%

4.31

%

4.27

%

Efficiency ratio

59.05

%

68.23

%

75.06

%

65.91

%

75.31

%

 
Balance Sheet (unaudited)
(dollars in thousands) 6/30/20203/31/202012/31/20199/30/20196/30/2019
Assets
Cash and due from banks

3,398

 

7,459

 

3,711

 

2,798

 

3,747

 

Federal funds sold
Interest-bearing deposits

57,717

 

14,899

 

11,936

 

16,004

 

18,694

 

Investment securities

23,597

 

27,172

 

27,734

 

23,212

 

22,585

 

Loans held for sale

8,106

 

6,648

 

2,474

 

3,909

 

2,013

 

Loans held for investment,

354,170

 

269,752

 

278,277

 

271,635

 

261,835

 

net of unearned income
Allowance for loan and lease losses

(4,024

)

(3,378

)

(3,119

)

(3,033

)

(2,920

)

Loans, net

350,146

 

266,374

 

275,158

 

268,602

 

258,915

 

Premises and equipment, net

20,469

 

20,170

 

20,306

 

20,529

 

20,736

 

Other assets

30,309

 

31,383

 

28,855

 

28,818

 

31,185

 

Total assets

493,742

 

374,105

 

370,174

 

363,872

 

357,875

 

 
 
Liabilities
Deposits
Demand noninterest-bearing

199,808

 

141,448

 

136,051

 

140,458

 

136,211

 

Demand interest-bearing

46,396

 

38,257

 

44,341

 

47,020

 

46,690

 

Money market and savings

125,023

 

112,238

 

107,985

 

108,614

 

105,310

 

Time deposits of less than $250,000

20,897

 

16,231

 

15,715

 

15,419

 

17,915

 

Time deposits of more than $250,000

2,318

 

2,578

 

2,701

 

2,949

 

2,682

 

Total deposits

394,442

 

310,752

 

306,793

 

314,460

 

308,808

 

Other liabilities

50,358

 

16,603

 

21,722

 

10,611

 

11,308

 

Total liabilities

444,800

 

327,355

 

328,515

 

325,071

 

320,116

 

 
Capital
Common stock, surplus, retained earnings

48,222

 

46,622

 

41,663

 

38,879

 

37,913

 

Accumulated other comprehensive

720

 

128

 

208

 

249

 

212

 

income (loss)
Unearned ESOP Shares

-

 

-

 

(212

)

(327

)

(366

)

Total shareholders' equity

48,942

 

46,750

 

41,659

 

38,801

 

37,759

 

 
Total Liabilities and Equity

493,742

 

374,105

 

370,174

 

363,872

 

357,875

 

 
memo:
Total intangible assets and goodwill

3,486

 

3,486

 

3,486

 

3,486

 

3,486

 

 
Current shares outstanding

3,522,857

 

3,500,065

 

3,241,075

 

3,122,591

 

3,122,155

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20200722005898/en/

Contacts

Ken Trautman, CEO
(541) 774-7654, ken@peoplesbank.bank