Peopleas Bank Reports Strong Year-to-Date Earnings

MEDFORD, Ore.--([ BUSINESS WIRE ])--Peopleas Bank of Commerce (OTCBB:PBCO) today reported earnings of $315,000 for the first nine months of 2011, up 25% over the $253,000 for the same period last year. The Bank reported earnings of $0.28 per share for the first nine months of 2011, the same amount reported the prior year. Interest income continued to be flat year-to-date, the result of an historically low interest rate environment. The Bank's most significant improvements in earnings were due to a 46% decrease in interest expense and an 11% reduction in the loan loss provision, compared to the prior year. aThis represents our ninth consecutive quarter of profitability since the recession hit," said Ken Trautman, President and CEO of People's Bank.

"This represents our ninth consecutive quarter of profitability since the recession hit"

Earnings for the third quarter of 2011 were $155,000, compared to $162,000 for the same period in 2010, a decrease of 4%. The Bank reported earnings of $0.14 per share for the three months ending September 30, 2011, compared to $0.18 per share in 2010. The weighted average number of shares for the quarter ended September 30, 2011, was 1,124,046, compared to 917,317 during 2010; the increase is a result of a successful stock offering completed January 31, 2011.

Non-interest income was down 2% during the first three quarters of 2011, compared to last year, primarily due to a 39% reduction in mortgage lending income, reflective of the slow local residential real estate market. Mr. Trautman stated, "Although residential real estate activity continues to trail 2010, it is encouraging to note other lending activity is increasing over the prior year, a direct result of the Bankas commitment to our community. Annualized year-to-date loan growth in 2011 is over 18%, demonstrating the Bankas commitment to lend local deposits to local businesses.a Non-interest expense for the nine-month period ending September 30, 2011, was up 10% over the prior year, primarily the result of additions to the commercial lending staff needed to support the current and projected loan growth. aWe are proud to continue to serve the Bank's mission of providing needed financing to our area's local businesses,a said Trautman.

As of the end of the third quarter, the Bank increased portfolio loans 14% compared to the prior year. aA closer look at the loan growth detail for the nine-month period shows commercial loans are up 22%, consumer loans are up 24%, while real estate loans are down 12%. The real estate loan category is comprised of land, development and construction loans as well as portfolio real estate loans, areas in which the Bank has been trying to limit exposure. Year-over-year, deposits increased 9%, including a 43% increase in regular checking, a 17% increase in money market and a 30% increase in savings accounts. These low-cost deposits continue to replace higher-cost certificates of deposit, which were reduced by 20% during the same period,a Trautman said.

The Bankas loan quality continues to excel, with non-current loans to total loans at September 30, 2011, of 0.27%, down from 3.03% last year. Non-performing assets to total assets compares loans past due 90 days and more, loans on non-accrual and OREO properties to total assets. This ratio at the end of September 30, 2011, was 2.44%, compared to 3.38% one year ago. At the end of the third quarter 2011, reserves totaled 1.61% of total loans, compared to 1.77% one year ago. The loan loss provision for the first nine months of 2011 totaled $258, 000, compared to $290,000 for the first nine months of last year.

People's Bank reported total assets, at the end of September 2011, of $118.2 million, up 13% from the prior year. The Bank has total shareholdersa equity of $13.4 million and a book value of $11.88 per share. Tier one capital to average assets remains strong at 11.19%, considerably above regulatory guidelines for a well-capitalized bank. The Bankas stock trades on the over-the-counter market under the symbol PBCO.


		2011		2010
Quarter ended September 30:
Net interest income	$	1,245,000	$	1,075,000
Provision for Loan Losses		163,000		66,000
Non-interest income		514,000		491,000
Non-interest expense		1,380,000		1,271,000
Net income		155,000		162,000
EPS		0.14		0.18

Year to Date:
Net Interest income	$	3,534,000	$	3,093,000
Provision for Loan Losses		258,000		290,000
Non-interest income		1,194,000		1,219,000
Non-interest expense		4,075,000		3,713,000
Net income		315,000		253,000
EPS		0.28		0.28

At September 30:
Total Portfolio Loans	$	92,081,000	$	80,731,000
Total Reserve for Loan Losses		1,525,000		1,499,000
Total Deposits		100,141,000		91,800,000
Total Assets		118,199,000		104,177,000
Total Shareholders' Equity		13,352,000		11,227,000
No. of shares outstanding		1,124,046		917,317
Book Value, per share		11.88		12.24

"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 Peopleas Bank or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar import. Similarly, statements herein that describe Peopleas Bankas 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.

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Peopleas Bank Reports Strong Year-to-Date Earnings