People’s Bank of Commerce 12-Month Earnings Per Share Increases 40%

People’s Bank of Commerce (OTCBB: PBCO) announced today its financial results for the first quarter of 2019. The bank reported net income of $839,000 or $0.28 per diluted share for the first quarter of 2019, compared to net income of $724,000 or $0.26 per diluted share in the same quarter of 2018. Earnings in the fourth quarter of 2018 totaled $882,000 or $0.30 per diluted share. Earnings per share for the trailing 12 months was $1.20 per share up from $0.86 per share the previous period, a 40% increase.

Highlights for the quarter compared to the first quarter of 2018:

• Net loans increased 17%
• Deposits increased 12%
• The bank’s total assets increased 13%
• Net interest income increased 21%
• Non-Interest income increased by less than 1%
• Non-interest expenses increased 15%

President’s Comments

"The strong loan and deposit growth we saw in 2018 continued through the first quarter of 2019. The flat yield curve has caused loan yields to remain stable while the cost of funds has been increasing. This condition is not expected to change significantly through the balance of 2019. The local economies we serve in Southern Oregon remain strong, and the bank is well positioned with our branch network to serve the needs of our communities. The net interest margin for the first quarter of 2019 was 4.33% compared to 4.35% for the same quarter of 2018,” said Ken Trautman, President and CEO.

Provision for Credit Losses

"Loan quality continues to be strong with no loans past due over 30 days or on Non-Accrual at the end of the first quarter of 2019. Total loans outstanding are growing at a year-to-date annualized rate of over 10%. This loan growth resulted in an increase to the allowance for loan losses of $59,000, compared to an increase in the allowance of $122,000 in the same quarter last year. The bank anticipates continued additions to the allowance for loan and lease losses during 2019 due to anticipated loan growth,” commented Mr. Trautman.

Non-Interest Income

Non-interest income for the first quarter of 2019 was $1,555,000 compared to $1,547,000 for the same quarter of 2018. The majority of this income was generated by the Bank’s Steelhead Finance Division, which provided $1,051,000 in revenue. Mortgage income for the first quarter of 2019 was up $34,000 when compared to the first quarter of 2018 on increased volume.

Non-Interest Expense

Non-interest expense for the first quarter of 2019 was $3,767,000 compared to $3,286,000 for the same quarter of 2018. Salary expense associated with the addition of a 3 person commercial loan team and other personnel that joined the bank in mid-2018 accounted for part of the increase. Occupancy and FF&E expenses increased with the completion of the new Biddle Road branch and administrative headquarters. The bank also completed a core processing conversion during the first quarter of 2019.

Capital

At March 31, 2019, shareholder equity totaled $36.5 million, compared to $32.0 million at March 31, 2018. The bank’s Tier 1 Capital ratio was 9.21% at the end of the first quarter 2019, compared to 9.18% one year ago. Tangible book value per share was $11.15 on March 31, 2019, compared to $10.48 on March 31, 2018, when adjusted for the 5% stock dividend received in May of 2018.

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.

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