People’s Bank Reports 64 Percent Increase in 1st Quarter Earnings

People’s Bank of Commerce (OTCBB: PBCO) reported today that its earnings for the first quarter of 2015 were $335,000 compared to $204,000 during the first quarter of 2014. The bank reported earnings of $0.17 per share for the three months ending March 31, 2015, compared to $0.11 per share in 2014. People’s Bank experienced a 20 percent increase in net interest income in the first quarter of 2015 when compared to the same period last year. Non-interest income was up 20 percent from the prior year during the first quarter of 2015, primarily due to an increase in mortgage loan and service charge income.

People’s Bank increased portfolio loans by 20 percent and deposits by 19 percent when compared to the prior year, resulting in total portfolio loans of $149.3 million and total deposits of $201.2 million. The bank reported total assets of $225.7 million at the end of March 2015, up 17 percent from one year ago. Ken Trautman, president and chief executive officer, notes, “The business climate in Southern Oregon continues to show steady improvement. When coupled with the ongoing disruption caused by recently completed mergers of regional banks, People’s Bank’s growth in both loans and deposits has increased at a brisk pace. This quality growth is exactly what is needed to provide the efficiencies necessary to improve bottom line profitability.”

People’s Bank’s quarterly average net interest margin remains higher than peer banks at 4.11 percent, down from 4.33 percent during the same period in 2014. A small provision for loan losses of $8,000 in the first quarter of 2015 provided a reserve-to-total portfolio loan ratio of 1.27 percent compared to a credit (lowering the reserve) of $65,000 in the first quarter of 2014 and a reserve-to-total portfolio loan ratio of 1.54%. “The small loan loss provision in the first quarter of 2015 was primarily the result of loan growth with steady improvement in loan quality. The bank had no loans past due more than 90 days or on nonaccrual status as of March 31, 2015 and 2014. We are pleased with the trend of low non-current loans, which signifies the continuing improvement in the loan portfolio and in the local economy,” says Trautman.

“Loan pricing has been impacted by the aggressive competition from regional and national banks. However, the bank has been able to increase non-interest income during the quarter. The bank’s Tier One Leverage Capital ratio of over 10 percent as of March 31, 2015 provides continued opportunity for quality growth in our markets,” explains Trautman.

At March 31, 2015, the bank had total shareholders’ equity of more than $22.9 million and a book value of $11.10 per share after adjusting for the 5% stock dividend paid April 15, 2015. The stock trades on the over-the-counter market under the symbol “PBCO”.

“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.