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. | |||||||||||||||||||
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