MEDFORD, Ore., July 17, 2024--(BUSINESS WIRE)--PBCO Financial Corporation (OTCPK: "PBCO"), the holding company (Company) of People’s Bank of Commerce (Bank), today reported net income of $1.8 million and earnings per diluted share of $0.33 for the quarter ended June 30, 2024, compared to income of $1.7 million and $0.31 per diluted share for the quarter ended March 31, 2024.
Highlights
Net interest margin of 3.49% which expanded by 18 basis points compared to prior quarter and represents the third consecutive quarter of margin expansion
5.1% increase in non-interest bearing deposits and 2.1% increase in total deposits compared to prior quarter-end
Loan portfolio increased by 6.8% year-to-date
Tangible book value per share increased to $14.56, compared to $14.05 in the prior quarter
"I am pleased with the Bank’s performance year-to-date with continued improvement in our net interest margin, and growth in both loans and deposits," reported Julia Beattie, President & CEO. "The operating environment remains challenging, but we have been focused on expense management to improve profitability and risk management to protect our balance sheet. Our team of bankers continue to focus on serving clients and taking advantage of growth opportunities in the markets we serve," added Beattie.
Total deposits grew 2.1% during second quarter and 3.0% since December 31, 2023. The increase in deposits during the second quarter was almost entirely in non-interest bearing accounts. "The bank remains focused on retaining core deposit relationships while looking for opportunities to grow new relationships, recognizing that deposit funding costs continue to rise due to competitive pressure," noted Beattie.
The investment portfolio decreased 2.9% to $144.3 million during the second quarter of 2024 from $148.6 million at the end of the first quarter of 2024. The decrease is the result of monthly principal reductions on the MBS portfolio and matured investments. The bank re-deployed these matured balances into higher yielding loans during the quarter. The average life of the portfolio was 4.0 years at the end of the second quarter, consistent with the prior quarter-end. Securities income was $0.58 million during the quarter, with a yield of 1.61%, versus $0.62 million, and a yield of 1.64% for the first quarter of 2024.
Non-interest income was $2.0 million in the second quarter, flat from the first quarter of 2024. Factoring revenue was down slightly by $21 thousand from the prior quarter.
Non-interest expenses totaled $5.7 million in the second quarter, up $313 thousand from the previous quarter. The increase in non-interest expense during the quarter is partially attributed to expenses incurred on other real estate owned (OREO). During the quarter, the bank sold the last remaining parcel of OREO, having written the property down by $66 thousand during the quarter and booking a loss-on-sale of $5 thousand. The balance of the increase was distributed across remaining expense categories.
As of June 30th, the Tier 1 Capital Ratio for PBCO Financial Corporation was 11.62% with total shareholder equity of $81.0 million, versus a Tier 1 Capital Ratio of 11.38% and total shareholder equity of $78.6 million as of March 31, 2024. The increase in the capital ratio is attributed to net income generated in the quarter, while assets remained flat from the prior quarter. The Tier 1 Capital Ratio for the Bank was 13.44% at quarter-end, up from 13.18% as of March 31, 2024. Tangible Capital was $77.3 million, or 9.80% as of June 30, 2024, versus first quarter of 2024 at $74.9 million, or 9.49%. Ms. Beattie commented, "Our strong capital position allows us to pursue growth, protect shareholder value and continue to serve our communities."
About PBCO Financial Corporation
PBCO Financial Corporation’s stock trades on the over-the-counter market under the symbol PBCO. Additional information about the Company is available in the investor section of the Company’s website at: www.peoplesbank.bank.
Founded in 1998, People’s Bank of Commerce is a full-service, commercial bank headquartered in Medford, Oregon with branches in Albany, Ashland, Central Point, Eugene, Grants Pass, Jacksonville, Klamath Falls, Lebanon, Medford, and Salem.
"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.
Consolidated Balance Sheets
(Dollars in 000's)
6/30/2024
3/31/2024
12/31/2023
9/30/2023
6/30/2023
BALANCE SHEET
ASSETS
Cash and due from banks
$
4,679
$
5,592
$
6,926
$
4,502
$
6,021
Federal funds sold
-
-
-
-
-
Interest bearing deposits
16,125
13,303
13,127
15,732
20,469
Investment securities
144,321
148,601
154,228
200,941
220,430
Loans held for sale
-
-
-
449
1,863
Loans held for investment, net of unearned income
552,014
547,229
516,697
511,374
490,378
Total Loans, net of deferred fees and costs
552,014
547,229
516,697
511,823
492,241
Allowance for loan losses
(6,066
)
(6,029
)
(5,863
)
(5,656
)
(5,424
)
Premises and equipment, net
27,752
29,727
30,001
30,334
27,352
Bank owned life insurance
16,911
16,777
16,637
16,479
16,322
Other Assets
32,301
33,550
31,524
36,961
35,470
Total assets
$
788,037
$
788,750
$
763,277
$
811,116
$
812,881
LIABILITIES
Deposits
Demand - non-interest bearing
$
269,634
$
256,558
$
272,945
$
292,230
$
291,981
Demand - interest bearing
167,421
165,547
142,043
131,603
115,844
Money market and savings
195,359
187,329
186,875
187,952
213,715
Time deposits of less than $250,000
10,282
16,697
16,771
20,530
21,017
Time deposits of more than $250,000
5,991
9,420
11,147
9,685
8,078
Total deposits
$
648,687
$
635,551
$
629,781
$
642,000
$
650,635
Borrowed funds
50,426
67,517
49,756
86,190
79,276
Other liabilities
7,929
7,067
6,151
11,545
10,349
Total liabilities
$
707,042
$
710,135
$
685,688
$
739,735
$
740,260
STOCKHOLDERS' EQUITY
Common stock, surplus & retained earnings
$
94,837
$
93,076
$
91,399
$
95,516
$
93,959
Accumulated other comprehensive income, net of tax
(13,842
)
(14,461
)
(13,810
)
(24,135
)
(21,338
)
Total stockholders' equity
$
80,995
$
78,615
$
77,589
$
71,381
$
72,621
Total liabilities & stockholders' equity
$
788,037
$
788,750
$
763,277
$
811,116
$
812,881
Consolidated Statements of Income
(Dollars in 000's)
2nd Quarter 2024
1st Quarter 2024
4th Quarter 2023
3rd Quarter 2023
2nd Quarter 2023
INCOME STATEMENT
INTEREST INCOME
Loans
$
8,271
$
7,907
$
7,399
$
7,071
$
6,757
Investments
584
621
766
880
970
Federal funds sold and due from banks
181
133
195
312
113
Total interest income
9,036
8,661
8,360
8,263
7,840
INTEREST EXPENSE
Deposits
2,276
2,121
1,885
1,580
1,418
Borrowed funds
575
676
794
997
520
Total interest expense
2,851
2,797
2,679
2,577
1,938
NET INTEREST INCOME
6,185
5,864
5,681
5,686
5,902
Provision for loan losses
52
175
286
252
(86
)
Net interest income after provision for loan losses
6,133
5,689
5,395
5,434
5,988
NONINTEREST INCOME
Service charges
118
124
115
119
124
Mortgage lending income
-
-
183
252
275
Steelhead finance income
1,181
1,202
1,192
1,224
1,291
BOLI Income
134
134
155
124
112
Other non-interest income
517
503
633
523
558
Total noninterest income
1,950
1,963
2,278
2,242
2,360
NONINTEREST EXPENSE
Salaries and employee benefits
3,374
3,374
3,804
3,332
3,990
Occupancy & equipment expense
906
881
899
902
875
Advertising expense
118
86
115
118
121
Professional expenses
260
234
206
194
205
Data processing expense
338
316
355
322
317
Loss on sale of investments
-
-
6,814
-
-
Other operating expenses
701
493
724
706
614
Total noninterest expense
5,697
5,384
12,917
5,574
6,122
Income before taxes
2,386
2,268
(5,244
)
2,102
2,226
Provision for income taxes
625
590
(1,338
)
544
571
NET INCOME
$
1,761
$
1,678
$
(3,906
)
$
1,558
$
1,655
Shares Outstanding End of Quarter
5,307,057
5,328,535
5,327,035
5,325,535
5,325,535
Average shares outstanding
5,321,376
5,328,035
5,326,035
5,325,535
5,325,368
Earnings per share
$
0.33
$
0.31
$
(0.73
)
$
0.29
$
0.31
(Dollars in 000's)
6/30/2024
3/31/2024
12/31/2023
9/30/2023
6/30/2023
Financial Highlights
Total portfolio loans
$
552,014
$
547,229
$
516,697
$
511,374
$
490,378
Total deposits
$
648,687
$
635,551
$
629,781
$
642,000
$
650,635
Total assets
$
788,037
$
788,750
$
763,277
$
811,116
$
812,881
Net income
$
1,761
$
1,678
$
(3,906
)
$
1,558
$
1,655
Performance Ratios
Return on average assets
0.90
%
0.85
%
-1.97
%
0.76
%
0.82
%
Return on average equity
8.90
%
8.60
%
-22.02
%
8.53
%
9.06
%
Net interest margin
3.49
%
3.31
%
3.19
%
3.07
%
3.22
%
Yield on loans
6.05
%
5.83
%
5.68
%
5.55
%
5.46
%
Cost of deposits
1.41
%
1.33
%
1.16
%
0.96
%
0.84
%
Efficiency ratio
70.03
%
68.79
%
162.29
%
70.31
%
74.10
%
Efficiency ratio excluding non-recurring expenses
70.03
%
68.79
%
72.40
%
70.31
%
74.10
%
Full-time equivalent employees
132
132
132
148
142
Capital
Tier 1 Capital Ratio
11.62
%
11.38
%
11.54
%
11.36
%
11.15
%
Community Bank Leverage Ratio(1)
13.44
%
13.18
%
13.39
%
13.01
%
12.78
%
Book value per share
$
15.26
$
14.75
$
14.57
$
13.40
$
13.64
Tangible book value per share
$
14.56
$
14.05
$
13.86
$
12.70
$
12.93
Asset Quality
Allowance for loan losses (ALLL)
$
6,066
$
6,029
$
5,782
$
4,873
$
5,424
Nonperforming loans (NPLs)
$
1,127
$
412
$
733
$
427
$
677
Nonperforming assets (NPAs)
$
1,127
$
618
$
939
$
713
$
963
Classified assets(2)
$
8,775
$
6,442
$
6,549
$
5,800
$
5,964
ALLL as a percentage of net loans
1.10
%
1.10
%
1.12
%
0.95
%
1.10
%
ALLL as a percentage of NPLs
538
%
1463
%
789
%
1141
%
801
%
Net charge offs (recoveries) to average loans
0.00
%
0.00
%
0.01
%
0.01
%
0.00
%
Net NPLs as a percentage of total loans
0.21
%
0.08
%
0.14
%
0.08
%
0.14
%
Nonperforming assets as a percentage of total assets
0.14
%
0.08
%
0.12
%
0.09
%
0.12
%
Classified Asset Ratio(3)
10.08
%
7.61
%
7.85
%
7.53
%
7.64
%
Past due as a percentage of total loans
0.46
%
0.55
%
0.14
%
0.08
%
0.14
%
End of period balances
Total securities and short term deposits
$
160,446
$
161,904
$
167,355
$
216,673
$
240,899
Total loans, net of allowance
$
545,948
$
541,200
$
510,834
$
506,167
$
486,817
Total earning assets
$
712,460
$
709,133
$
684,052
$
728,496
$
733,140
Intangible Assets
$
3,729
$
3,741
$
3,753
$
3,766
$
3,778
Total assets
$
788,037
$
788,750
$
763,277
$
811,116
$
812,881
Total noninterest bearing deposits
$
269,634
$
256,558
$
272,945
$
292,230
$
291,981
Total deposits
$
648,687
$
635,551
$
629,781
$
642,000
$
650,635
Average balances
Total securities and short term deposits
$
159,413
$
165,584
$
201,788
$
241,049
$
242,315
Total loans, net of allowance
$
547,139
$
536,255
$
504,002
$
493,314
$
489,624
Total earning assets
$
706,552
$
701,839
$
705,790
$
734,363
$
731,939
Total assets
$
785,232
$
787,127
$
794,196
$
821,162
$
811,697
Total noninterest bearing deposits
$
254,771
$
255,204
$
273,413
$
291,470
$
293,331
Total deposits
$
647,351
$
642,420
$
643,015
$
657,331
$
675,579
(1) Effective March 31, 2020, People's Bank of Commerce opted into the Community Bank Leverage Ratio and is no longer calculating risk based capital ratios.
(2) Classified assets are defined as the sum of all loan-related contingent liabilities and loans internally graded substandard or worse, impaired loans (net of government guarantees), adversely classified securities, and other real estate owned.
(3) Classified asset ratio is defined as the sum of all loan related contingent liabilities and loans internally graded substandard or worse, impaired loans (net of government guarantees), adversely classified securities, and other real estate owned, divided by bank Tier 1 capital, plus the allowance for loan losses.
