[January 23, 2019] |
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People's Bank of Commerce Reports 47% Increase in Earnings Per Share
People's Bank of Commerce (OTCBB: PBCO) announced today its financial
results for the fourth quarter and full year 2018 operations. The bank
reported net income of $3,398,000 for the full year of 2018 compared to
$2,061,000 in 2017, a 65% increase. In 2018 earnings per diluted share
were $1.18 compared $0.80 per diluted share during 2017, a 47% increase.
Net income for the 4th quarter of 2018, totaled $882,000 or
$0.30 per diluted share compared to $313,000 or $0.11 per diluted share
for 2017.
When comparing the full year 2018 net income to 2017, several
significant items impact the comparison. First, the bank owned Steelhead
Finance for a full 12 months in 2018 compared to only 4 months in 2017,
contributing $0.48 of earning per share in 2018 compared to $0.14 per
share in 2017. Second, passage of the Tax Cuts and Jobs Act (Tax Reform)
for corporations resulted in a one-time, non-cash income tax expense of
$413,000 in the fourth quarter of 2017 while 2018 benefited from the
reduction in Federal Income tax rate from 34% to 21%. Additionally, the
bank was able to lower its tax expense in 2018 by over $100,000,
recovering taxes paid in earlier years by accelerating depreciation
expense. Examples of the other one-time events that affected bottom line
income include:
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The bank was able to provide a "tax reform bonus" to all
non-executives of $500 to $2,000 per employee based on time with the
company. Plus, the bank established a minimum wage of $14 per hour for
all bank employees.
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The bank opened a new 3-story headquarters building in April 2018.
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The bank established a full-service branch in Klamath Falls, Oregon in
January 2018
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The bank celebrated its 20th anniversary including "pay it
forward" gifts to the community.
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The bank increased outstanding loans by almost 20% resulting in an
increase to the loan and lease loss provision.
Highlights for the quarter and year included:
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Total loans increased $9.9 million or 4.1% during the fourth quarter
2018 and $41.3 million or 20% for the entire year.
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Deposits increased $12.8 million or 4.4% over the past 3 months and
increased $43.1 million or 16.3% for the entire year.
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The bank's total assets increased $13.0 million during the fourth
quarter and increased $47.1 million or 15.6% for the entire year.
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Net interest income for 2018 totaled $12.3 million dollars compared to
$10.8 million in 2017, a 13.3% increase.
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Non-Interest income totaled $6.7 million in 2018 versus $3.3 million
in 2017, a 104% increase. This increase was the result of activity
from the bank's factoring company, Steelhead Finance, which provided
$4.9 million of gross revenue during 2018.
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Non-interest expenses totaled $14.2 million in 2018 compared to $10.3
million in 2017, a 37.4% increase. $2.8 million of this increase was
the result of the purchase of Steelhead Financial with the balance
attributed to the bank.
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The bank's year-to-date efficiency ratio was 75% in 2018 and 73.23% in
2017.
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ROAE was 10.29% in 2018 and 7.18% in 2017.
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ROAA was 1.00% in 2018, 0.73% in 2017.
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EPS was $1.18 in 2018 compared to $0.80 in 2017.
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Loans on non-accrual or past due more than 90 days at the end 2018
were 0.16% of loans outstanding, compared to zero at the end of 2017.
President's Commentary
"As noted by the list of accomplishments above, 2018 was a year of
growth, both for the balance sheet as well as the bank's image in the
community," noted Ken Trautman, bank President and CEO. "Because many of
the expenses incurred in 2018 were one-time in nature, the bank is
positioned for strong performance in the next year and the years to
come. Expansion of the national and local economies has been a great
tailwind, but the level of service from our employees has been a real
driving force. Rising short-term interest rates and a flat yield curve
will be a challenge to all banks, as the cost of funds will rise more
than the yield on assets. Despite this, the bank has maintained a net
interest margin superior to our FDIC peer group. With many one-time
expenses behind us, the bank can continue to look for additional
opportunities to diversify its non-interest income and increase
efficiency."
Provision for Credit Losses
Strong loan growth and credit quality prompted a provision expense of
$406,000 in 2018 compared to $52,000 in 2017. At yearend 2018, the
allowance for loan and lease losses totaled 1.125% of loans held for
investment compared to 1.15% at the end of 2017. Net loan charge offs in
2018 were ($6,645) versus ($4,978) the prior year.
Capital
At December 31, 2018, tangible shareholder's equity totaled $32.08
million, compared to $28.00 million at December 31, 2017. The bank's
tangible leverage ratio was 9.27% at year-end 2018, compared to 9.37% at
December 31, 2017. The completion of the Steelhead acquisition resulted
in approximately $3.3 million in goodwill reflected above in the
tangible shareholder equity and leverage ratios. Tangible book value per
share was $10.86 at December 31, 2018, compared to $9.71 one year
earlier.
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.peoplesbankofcommerce.com.
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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People's Bank of Commerce
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Balance Sheet (unaudited)
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(dollars in thousands)
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12/31/2018
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9/30/2018
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6/30/2018
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3/31/2018
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12/31/2017
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Assets
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Cash and due from banks
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9,382
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3,928
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2,431
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11,918
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14,046
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Federal funds sold
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Interest-bearing deposits
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17,127
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21,381
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15,713
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13,948
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8,209
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Investment securities
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25,878
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24,462
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26,198
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26,871
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28,538
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Loans held for sale
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2,084
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215
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1,381
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1,862
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2,191
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Loans held for investment,
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249,949
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240,093
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233,600
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219,359
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208,657
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net of unearned income
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Allowance for loan and lease losses
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(2,812
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(2,701
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(2,631
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(2,523
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(2,400
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Loans, net
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247,137
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237,392
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230,969
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216,836
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206,257
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Premises and equipment, net
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16,807
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16,387
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16,165
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14,806
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12,196
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Other assets
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31,110
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32,730
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34,064
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32,581
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31,004
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Total assets
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349,525
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336,495
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326,921
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318,822
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302,441
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Liabilities
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Deposits
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Demand noninterest-bearing
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124,866
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120,679
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131,743
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126,424
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118,948
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Demand interest-bearing
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48,813
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44,661
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29,300
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27,188
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26,218
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Money market and savings
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117,714
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112,728
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107,634
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108,666
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101,141
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Time deposits of less than $250,000
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15,300
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15,017
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16,136
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16,483
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16,555
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Time deposits of more than $250,000
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1,317
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2,081
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2,074
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2,067
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2,060
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Total deposits
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308,010
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295,166
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286,887
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280,828
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264,922
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Other liabilities
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6,062
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7,290
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7,022
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5,983
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6,103
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Total liabilities
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314,072
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302,456
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293,909
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286,811
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271,025
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Capital
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Common stock, surplus, retained earnings
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36,011
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34,920
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33,891
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32,901
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32,152
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Accumulated other comprehensive
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(113
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(319
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(278
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(249
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(56
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income (loss)
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Unearned ESOP Shares
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(445
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(562
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(601
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(641
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(680
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Total shareholders' equity
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35,453
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34,039
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33,012
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32,011
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31,416
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Total Liabilities and Equity
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349,525
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336,495
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326,921
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318,822
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302,441
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memo:
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Total intangible assets and goodwill
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3,486
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3,468
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3,468
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3,468
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3,468
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Current shares outstanding
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2,953,434
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2,915,752
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2,902,164
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2,747,164
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2,745,758
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People's Bank of Commerce
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Income Statement (unaudited)
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Three Months Ended
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Twelve Months Ended
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(dollars in thousands)
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12/31/2018
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9/30/2018
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12/31/2017
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12/31/2018
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12/31/2017
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Interest Income
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Loans
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3,343
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3,152
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2,678
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12,193
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10,367
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Investments
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162
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152
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164
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658
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703
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Federal funds sold and due from banks
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161
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182
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61
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534
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175
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Total interest income
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3,666
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3,486
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2,903
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13,385
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11,245
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Interest Expense
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Deposits
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278
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241
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129
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850
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435
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Other
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75
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77
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-
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282
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-
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Total interest expense
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353
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318
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129
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1,132
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435
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Net interest income
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3,313
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3,169
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2,774
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12,253
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10,810
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Provision for credit losses
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112
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69
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72
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406
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52
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Net Interest Income after provision
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3,201
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3,100
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2,702
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11,847
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10,758
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for credit losses
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Non-Interest Income
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Service charges on deposit accounts
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78
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76
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73
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308
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290
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Mortgage lending income
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150
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130
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191
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615
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805
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Steelhead Finance income
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1,179
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1,339
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1,072
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4,915
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1,398
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Gain (loss) on other real estate
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-
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-
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-
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22
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Other non-interest income
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118
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199
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151
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817
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755
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Total non-interest income
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1,525
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1,744
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1,487
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6,655
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3,270
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Non-Interest Expense
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Salary and Benefits
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2,346
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2,297
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1,954
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8,955
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6,210
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Premises and fixed assets
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554
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460
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419
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1,877
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1,473
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Other
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825
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828
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724
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3,348
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2,634
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Total non-interest expense
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3,725
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3,585
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3,097
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14,180
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10,317
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Net income before taxes
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1,001
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1,259
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1,092
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4,322
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3,711
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Income taxes
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|
119
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|
311
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|
779
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|
924
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|
1,650
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Net income
|
|
882
|
|
948
|
|
313
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3,398
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|
2,061
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Basic earnings per share *
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0.30
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|
0.33
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0.11
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1.18
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0.80
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Diluted earnings per share *
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0.30
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|
0.32
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|
0.11
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1.18
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0.80
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Average common shares outstanding *
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2,926,964
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2,909,889
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2,725,925
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2,870,220
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2,570,472
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Performance Measures
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Return on average assets
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1.03%
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1.11%
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0.41%
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1.00%
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0.73%
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Return on average equity
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10.25%
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11.43%
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3.87%
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10.29%
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7.18%
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Net interest margin
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4.11%
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4.05%
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4.12%
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4.18%
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4.22%
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Efficiency ratio
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76.99%
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72.97%
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72.68%
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74.99%
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73.23%
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* adjusted for 5% stock dividend May 2017, May 2018
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View source version on businesswire.com: https://www.businesswire.com/news/home/20190123005892/en/
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