People’s Bank Reports 2021 Earnings

Rhea-AI Summary

People's Bank of Commerce (OTC PINK: PBCO) reported strong financial results for the 4th quarter and year-ended 2021. The bank achieved a quarterly net income of $3.0 million ($0.59 per diluted share) and a year-to-date net income of $11.5 million ($2.44 per diluted share), marking an 87.1% increase from 2020. Non-PPP loan growth was 68.8% year-to-date. The bank's tax equivalent net interest margin was 3.46%. Deposits grew by $308 million in 2021, a 67.7% increase. However, non-interest income decreased by $351 thousand compared to Q4 2020.

Positive

• Q4 net income increased 76.5% YoY, reaching $3.0 million.
• Year-to-date net income rose by 87.1% to $11.5 million.
• Non-PPP loan growth rate of 68.8% for the year.
• Tax equivalent net interest margin improved to 3.46%.
• Deposits increased by $308 million, or 67.7%, in 2021.
• Steelhead Finance revenue surged 60.1% YoY.

Negative

• Non-interest income declined by $351 thousand from Q4 2020.
• Mortgage income dropped by $1.1 million, or 71.1% from Q4 2020.

MEDFORD, Ore.--(BUSINESS WIRE)-- People’s Bank of Commerce (OTC PINK: PBCO) announced today its financial results for the 4^th quarter and year-ended 2021.

Highlights

• Fourth quarter net income of $3.0 million, or $0.59 per diluted share
• Year-to-date net income of $11.5 million, or $2.44 per diluted share
• Quarterly non-PPP loan growth rate of 13.1%, year-to-date loan growth of 68.8%
• Fourth quarter tax equivalent net interest margin of 3.46%, excluding factoring revenue
• Steelhead factoring revenue increased 60.1% over Q4 2020

People’s Bank reported quarterly net income of $3.0 million, or $0.59 per diluted share, for the 4th quarter of 2021 compared to net income of $1.7 million, or $0.45 per diluted share, in the same quarter of 2020. The bank recognized year-to-date net income of $11.5 million versus $6.1 million for the twelve months of 2020, an 87.1% increase from the prior year. Earnings per share for the trailing 12 months were $2.44 per share, up from $1.72 per share for the same period of 2020, a 41.9% increase. Fourth quarter income continued to be positively impacted by PPP fee income due to pro-ration of the remaining unamortized origination processing fees at payoff with $637 thousand in PPP fee income recognized during the quarter. Steelhead Finance also demonstrated solid revenue of $2.0 million during the quarter, versus $1.2 million in 4^th quarter 2020. During the quarter, the bank made a provision for loan losses of $139 thousand. As anticipated with the bank’s recent acquisition of Willamette Community Bank (WMCB) in the 1^st quarter 2021, the bank was able to achieve higher earnings per share than in previous periods.

During the quarter, deposits increased $13.6 million, or an annualized 7.2% growth rate. On an annual basis, deposits grew by $308 million, a 67.7% increase from December 31, 2020. Deposit growth during the year was attributed to several factors, including the bank’s acquisition of WMCB in the first quarter, the bank’s participation in the PPP loan program, and organic growth in all deposit markets. “We continue to see deposit growth, although at a slower pace than previous quarter. Our focus on building and sustaining relationships forged during the PPP push has allowed us to not only grow but retain core deposits,” commented Joan Reukauf, Chief Operating Officer.

The Bank continued to deploy excess liquidity to the investment portfolio as an alternative to deposits at the Federal Reserve Bank. Through the end of the quarter, the bank increased its investment portfolio by $37.7 million, an 18.5% increase from the prior quarter.

Core portfolio loan growth, excluding PPP, totaled $14.3 million during the 4^th quarter of 2021, representing an annualized growth rate of 13.1%. For the year 2021, the bank grew portfolio loans, excluding PPP, by $183.7 million, an overall annual growth rate of 68.8% when the impact of the WMCB merger is included. “During 2021, the bank achieved double-digit loan growth, in spite of the continued economic volatility from the COVID-19 pandemic and focus on the Willamette merger,” commented Julia Beattie, President.

The bank’s active role in the Paycheck Protection Program (PPP) beginning in April 2020 resulted in 1,204 PPP loans in Round I, totaling $121.2 million, with all but 1 of the loans from Round I having been forgiven by December 31, 2021 (includes loans funded by WMCB prior to the bank merger with People’s Bank). Similarly, the bank funded 629 loans in Round II of the Paycheck Protection Program, representing $48.6 million in loan volume. By December 31, 2021, only $6.6 million in Round II loans had yet to be forgiven.

PPP Loan Activity To Date
			As of				As of				As of				As of
	(dollars in thousands)		12/31/2021*				9/30/2021*				6/30/2021*				3/31/2021*
			#		$$$		#		$$$		#		$$$		#		$$$
PPP Loans Funded
	Round One (2020 - Phase I & II)		1,204		$121,199		1,204		$121,199		1,204		$121,199		1,204		$121,199
	Round Two (2021)		629		$ 48,588		629		$ 48,588		629		$ 48,588		534		$45,993
PPP Loans Forgiven
	Round One (2020 - Phase I & II)		1203		$121,069		1196		$120,871		1139		$112,136		437		$65,540
	Round Two (2021)		607		$ 42,168		465		$ 25,377		73		$3,190		-		$0
Net PPP Loans Outstanding
	Round One (2020 - Phase I & II)		1		$130		8		$328		65		$9,063		767		$55,659
	Round Two (2021)		22		$6,420		164		$23,211		557		$45,398		534		$45,993
	Total Actual Balances outstanding		23		$6,550		172		$23,539		622		$54,461		1,301		$101,652

* Includes PPP activity of Willamette Community Bank

During the quarter, the bank experienced a decrease in classified assets. This was the result of a reduction of Other Real Estate Owned. Total loans past due or on non-accrual were flat from the prior quarter at 0.15%. During the 4^th quarter, the Allowance for Loan and Lease Losses (ALLL) was updated based on new loan growth achieved during the quarter and updated economic expectations, which were factored into the bank’s analysis. As of December 31, 2021, the ALLL was 0.92% of portfolio loans excluding PPP and the unallocated reserve stood at $0.6 million or 14.6% of the allowance.

As of December 31, 2021, the bank’s Tier 1 Leverage Ratio was 8.99% versus 9.36% as of the same date in 2020, with total shareholder equity of $79.1 million. During the quarter, the bank was able to augment capital through earnings while assets also increased with our growth in deposits.

Fourth quarter 2021 non-interest income totaled $2.9 million, a decrease of $351 thousand from the 4^th quarter of 2020. During the quarter, Steelhead Finance factoring revenue increased $745 thousand, a 60.1% increase over the same quarter of 2020. Conversely, mortgage income decreased $1.1 million, or a 71.1% from the 4^th quarter of 2020. “The 4^th quarter was the strongest on record for Steelhead Finance, we are extremely pleased with the division’s results during 2021,” commented Ken Trautman, CEO. “Residential Mortgage lending was soft in the 4^th quarter, but we have increased our focus in the Willamette region to continue diversifying our revenue streams bank-wide,” added Trautman. During the year, the bank also updated its bargain purchase gain from the WMCB merger of $2.3 million to reflect the anticipated tax consequences, resulting in a reduction to other non-interest income of $317 thousand in both the third and fourth quarter of 2021.

Non-interest expense totaled $5.4 million in the 4^th quarter, down $434 thousand from the 3^rd quarter of 2021. During the 4^th quarter, the bank reversed $425 thousand in one-time expense accruals from our recent merger, primarily the result of lower-than-expected deconversion costs from Willamette’s former data processing vendor. Included in 2021 non-interest expense is the final quarterly accrual of $250,000 for the bank’s $1 million donation to fire relief to assist with intermediate and long-term housing needs as our Southern Oregon community rebuilds. This is a non-recurring item for 2021. For the twelve months ending December 31, 2021, excluding one-time merger adjustments, earnings per share would have been $2.57, versus $1.72 for the same period ended December 31, 2020.

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, commercial bank headquartered in Medford, Oregon with branches in Albany, Medford, Ashland, Central Point, Grants Pass, Klamath Falls, Lebanon, 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.

	(Dollars in 000's)		12/31/2021				9/30/2021				6/30/2021				12/31/2020
BALANCE SHEET
ASSETS
Cash and due from banks			$	5,194			$	4,561			$	4,752			$	2,819
Federal funds sold				-				-				-				-
Interest bearing deposits				77,643				100,429				148,554				91,103
Investment securities				241,564				203,913				104,155				25,894
Loans held for sale				1,408				2,802				901				3,407
Loans held for investment, net of unearned income				457,224				459,883				474,909				346,198
	Total Loans, net of deferred fees and costs			458,632				462,685				475,810				349,605
Allowance for loan losses				(4,376	)			(4,302	)			(4,076	)			(4,453	)
Premises and equipment, net				27,304				27,567				26,878				21,624
Bank owned life insurance				13,759				13,689				13,585				7,476
Other Assets				39,877				37,070				36,316				29,263
	Total assets		$	859,597			$	845,612			$	805,973			$	523,331
LIABILITIES
Deposits
	Demand - non-interest bearing		$	350,424			$	358,013			$	317,837			$	231,095
	Demand - interest bearing			113,154				100,341				112,945				54,806
	Money market and savings			276,264				266,004				250,326				147,481
	Time deposits of less than $250,000			21,140				22,670				20,613				19,149
	Time deposits of more than $250,000			3,247				3,645				11,259				3,216
	Total deposits		$	764,229			$	750,673			$	712,979			$	455,747
Borrowed funds				7,437				7,529				6,817				6,924
Other liabilities				8,866				9,887				11,107				7,824
	Total liabilities		$	780,532			$	768,089			$	730,904			$	470,495
STOCKHOLDERS' EQUITY
Common stock			$	61,340			$	60,879			$	57,104			$	40,379
Retained earnings				19,465				16,489				17,620				11,775
Accumulated other comprehensive income,
	net of tax			(1,740	)			155				345				682
	Total stockholders' equity		$	79,065			$	77,523			$	75,069			$	52,836
	Total liabilities & stockholders' equity		$	859,597			$	845,612			$	805,973			$	523,331

	(Dollars in 000's)		4th Quarter 2021				3rd Quarter 2021				2nd Quarter 2021				4th Quarter 2020
INCOME STATEMENT
INTEREST INCOME
Loans			$	5,974			$	6,632			$	6,673			$	4,308
Investments				724				544				218				155
Federal funds sold and due from banks				44				58				50				30
	Total interest income			6,742				7,234				6,941				4,493
INTEREST EXPENSE
Deposits				197				218				264				176
Borrowed funds				15				15				15				26
	Total interest expense			212				233				279				202
NET INTEREST INCOME				6,530				7,001				6,662				4,291
Provision for loan losses				139				347				(249	)			182
Net interest income after provision for
	loan losses			6,391				6,654				6,911				4,109
NONINTEREST INCOME
Service charges				117				106				108				57
Mortgage lending income				472				615				697				1,634
Steelhead finance income				1,984				1,785				1,587				1,239
Bargain purchase gain				(316	)			(316	)			-				-
BOLI Income				72				73				66				37
Other non-interest income				585				474				480				298
	Total noninterest income			2,914				2,737				2,938				3,265
NONINTEREST EXPENSE
Salaries and employee benefits				3,416				3,354				3,389				3,186
Occupancy & equipment expense				924				893				800				590
Advertising expense				295				396				392				277
Professional expenses				213				561				353				406
Data processing expense				(197	)			324				333				242
Other operating expenses				699				256				682				356
	Total noninterest expense			5,350				5,784				5,948				5,057
Income before taxes				3,955				3,608				3,901				2,317
Provision for income taxes				978				958				948				619
NET INCOME			$	2,977			$	2,650			$	2,953			$	1,698
	Shares Outstanding End of Quarter			5,057,211				5,042,704				5,043,127				3,736,510
	Average shares outstanding*			5,047,540				4,962,936				5,043,127				3,738,101
	Earnings per share		$	0.59			$	0.53			$	0.59			$	0.45
	*Adjusted for stock dividend 9/22/21

	(Dollars in 000's)		12/31/2021				9/30/2021				6/30/2021				12/31/2020
Financial Highlights
	Total loans		$	458,632			$	462,685			$	475,810			$	349,605
	Total deposits		$	764,229			$	750,673			$	712,979			$	455,747
	Total assets		$	859,597			$	845,612			$	805,973			$	523,331
	Net income		$	2,977			$	2,650			$	2,953			$	1,698
	Steelhead Finance contribution, pre-tax		$	1,116			$	1,089			$	970			$	531
	Mortgage contribution, pre-tax		$	(8	)		$	212			$	308			$	751
Performance Ratios
	Return on average assets			1.40	%			1.27	%			1.46	%			1.31	%
	Return on average equity			15.32	%			13.79	%			16.05	%			13.10	%
	Net interest margin			3.46	%			3.70	%			3.68	%			3.75	%
	Yield on loans			5.15	%			5.53	%			5.39	%			4.66	%
	Cost of deposits			0.10	%			0.12	%			0.15	%			0.16	%
	Efficiency ratio			56.65	%			59.39	%			61.96	%			66.93	%
	Full-time equivalent employees			140				140				138				106
Capital
	Leverage ratio			8.99	%			8.73	%			8.83	%			9.36	%
	Common equity tier 1 ratio		N/A(1)				N/A(1)				N/A(1)				N/A(1)
	Tier 1 risk based ratio		N/A(1)				N/A(1)				N/A(1)				N/A(1)
	Total risk based ratio		N/A(1)				N/A(1)				N/A(1)				N/A(1)
	Book value per share		$	15.63			$	15.37			$	14.89			$	14.14
	Tangible book value per share		$	14.87			$	14.61			$	14.11			$	13.21
Asset Quality
	Allowance for loan losses (ALLL)		$	4,376			$	4,302			$	5,782			$	4,453
	Nonperforming loans (NPLs)		$	703			$	665			$	876			$	191
	Nonperforming assets (NPAs)		$	1,245			$	1,443			$	1,845			$	1,220
	Classified assets(2)		$	2,949			$	3,275			$	3,138			$	2,550
	ALLL as a percentage of net loans			0.96	%			0.94	%			1.23	%			1.29	%
	ALLL as a percentage of NPLs			622	%			647	%			660	%			2327	%
	Net charge offs (recoveries) to average loans			-0.15	%			0.03	%			0.00	%			0.00	%
	Net NPLs as a percentage of total loans			0.15	%			0.15	%			0.19	%			0.06	%
	Nonperforming assets as a percentage of total assets			0.14	%			0.17	%			0.23	%			0.23	%
	Classified Asset Ratio(3)			3.53	%			4.00	%			3.96	%			4.45	%
	Past due as a percentage of total loans			0.15	%			0.18	%			0.18	%			0.05	%
End of period balances
	Total securities and short term deposits		$	319,207			$	304,342			$	252,709			$	116,997
	Total loans, net of allowance		$	454,256			$	458,383			$	471,734			$	345,152
	Total earning assets		$	777,839			$	767,027			$	728,520			$	466,602
	Total assets		$	3,854			$	3,872			$	3,901			$	3,485
	Total noninterest bearing deposits		$	859,597			$	845,612			$	805,973			$	523,331
	Total deposits		$	350,424			$	358,013			$	317,837			$	231,095
				764,229				750,673				712,979				455,747
Average balances
	Total securities and short term deposits
	Total loans, net of allowance		$	301,297			$	278,310			$	228,874			$	98,223
	Total earning assets		$	449,826			$	465,410			$	489,813			$	361,982
	Total assets		$	751,123			$	743,719			$	718,687			$	460,205
	Total noninterest bearing deposits		$	848,239			$	834,485			$	809,623			$	517,187
	Total deposits		$	356,832			$	336,375			$	320,986			$	227,689
				752,255				739,372				717,147				448,225

(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 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.
(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.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220119006117/en/

Ken Trautman, CEO

(541) 774-7654, ken@peoplesbank.bank

Source: People’s Bank of Commerce

FAQ

What were the earnings results for People's Bank of Commerce in Q4 2021?

People's Bank of Commerce reported a net income of $3.0 million for Q4 2021, translating to $0.59 per diluted share.

How much did People's Bank of Commerce grow its deposits in 2021?

The bank increased its deposits by $308 million in 2021, representing a 67.7% growth rate.

What was the non-PPP loan growth rate for People's Bank of Commerce in 2021?

The bank reported a non-PPP loan growth rate of 68.8% for the year.

What is the tax equivalent net interest margin for Q4 2021?

The tax equivalent net interest margin for Q4 2021 was reported at 3.46%.

How did Steelhead Finance perform in Q4 2021?

Steelhead Finance reported revenue of $2.0 million in Q4 2021, a 60.1% increase compared to Q4 2020.