PBCO Financial Corporation (OTCPK: “PBCO”), the holding company (Company) of People’s Bank of Commerce (Bank), today reported net income of $1.7 million and earnings per diluted share of $0.31 for the quarter ended March 31, 2024, compared to a loss of $3.90 million and -$0.73 per diluted share for the quarter ended December 31, 2023. Excluding one-time expenses in fourth quarter, EPS would have been $0.27 per share, resulting in an increase of $0.04 per share during first quarter when compared to core earnings from prior quarter.
Highlights
- Net interest margin increased to 3.31%, compared to 3.19% in the prior quarter
- Tangible book value per share increased to $14.05, compared to $13.86 in the prior quarter
- Loan portfolio increased by 5.91% compared to year-end 2023
- Deposits grew by 0.92% compared to year-end 2023
People’s Bank started the year strong with loan growth of $30.5 million, or 5.91%, over year-end. The new loans booked during the quarter assisted with improving the bank’s net interest margin versus the prior quarter. Credit quality remains strong, with classified assets remaining steady over the last two quarters. Nonperforming assets decreased slightly to 0.08% of total loans from 0.14% at year-end. “While the Bank has observed some weakness in the trucking industry during the first quarter, the balance of the portfolio is performing as expected,” reported Julia Beattie, President & CEO.
The first quarter was also significant as it was the first quarter with growth in deposits since Q4 2021, with deposits up $5.8 million, or 0.92%. “With the challenging rate environment over the past two years, our team has worked hard to retain and grow deposits,” noted Beattie. “Deposit growth has been one of our strategic initiatives and we are pleased to see a positive trend for the first quarter,” added Beattie.
The investment portfolio decreased 3.7% to $148.6 million during first quarter of 2024 from $154.2 million at the end of the fourth quarter of 2023. The decrease was driven by monthly principal reductions on the MBS portfolio and matured investments. The average life of the portfolio was 4.0 years at the end of the first quarter, versus 4.2 years at the prior quarter-end. Securities income was $0.68 million during the quarter, with a yield of 1.64%, versus $0.77 million, and a yield of 1.67% for the fourth quarter of 2023. As of March 31, 2024, the net after tax unrealized loss on the investment portfolio increased to $14.5 million versus $13.8 million as of December 31, 2023. The increase was primarily due to increases in market interest rates from the prior quarter which negatively affects the prices on outstanding investments. As of the first quarter 2024, liquid assets to total assets were 13.3%, including the market value of the investment portfolio less pledged investments.
First quarter 2024 non-interest income totaled $2.0 million, a decrease of $315 thousand from the fourth quarter of 2023. During fourth quarter 2023, the bank recognized $183 thousand in mortgage revenue and $174 thousand from a loan prepayment penalty, both of which were non-recurring. Factoring revenue was flat over the prior quarter.
Non-interest expenses totaled $5.4 million in the first quarter, down $7.5 million from the previous quarter. Fourth quarter non-interest expense was exacerbated by the one-time costs of a partial liquidation of the bank’s investment portfolio and closure of the mortgage division.
As of March 31, the Tier 1 Capital Ratio for PBCO Financial Corporation was 11.38% with total shareholder equity of $78.6 million, versus a Tier 1 Capital Ratio of 11.54% and total shareholder equity of $77.6 million as of December 31, 2023. The decrease in the capital ratio is directly attributed to a larger increase in assets than capital augmentation via earnings during the quarter. The Tier 1 Capital Ratio for the Bank was 13.18% at quarter-end, down from 13.39% as of December 31, 2023. Tangible Capital was $74.9 million, or 9.49% as of March 31, 2024, versus fourth quarter of 2023 at $73.8 million, or 9.73%, which increased due to improvement in earnings.
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) | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | |||||||||||||||
| BALANCE SHEET | ||||||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and due from banks | $ |
5,592 |
|
$ |
6,926 |
|
$ |
4,502 |
|
$ |
6,021 |
|
$ |
5,097 |
|
|||||
| Federal funds sold |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||
| Interest bearing deposits |
|
13,303 |
|
|
13,127 |
|
|
15,732 |
|
|
20,469 |
|
|
8,224 |
|
|||||
| Investment securities |
|
148,601 |
|
|
154,228 |
|
|
200,941 |
|
|
220,430 |
|
|
234,647 |
|
|||||
| Loans held for sale |
|
- |
|
|
- |
|
|
449 |
|
|
1,863 |
|
|
299 |
|
|||||
| Loans held for investment, net of unearned income |
|
547,229 |
|
|
516,697 |
|
|
511,374 |
|
|
490,378 |
|
|
488,025 |
|
|||||
| Total Loans, net of deferred fees and costs |
|
547,229 |
|
|
516,697 |
|
|
511,823 |
|
|
492,241 |
|
|
488,324 |
|
|||||
| Allowance for credit losses |
|
(6,029 |
) |
|
(5,863 |
) |
|
(5,656 |
) |
|
(5,424 |
) |
|
(5,508 |
) |
|||||
| Premises and equipment, net |
|
29,727 |
|
|
30,001 |
|
|
30,334 |
|
|
27,352 |
|
|
27,659 |
|
|||||
| Bank owned life insurance |
|
16,777 |
|
|
16,637 |
|
|
16,479 |
|
|
16,322 |
|
|
16,210 |
|
|||||
| Other Assets |
|
33,550 |
|
|
31,524 |
|
|
36,961 |
|
|
35,470 |
|
|
36,450 |
|
|||||
| Total assets | $ |
788,750 |
|
$ |
763,277 |
|
$ |
811,116 |
|
$ |
812,881 |
|
$ |
811,103 |
|
|||||
| LIABILITIES | ||||||||||||||||||||
| Deposits | ||||||||||||||||||||
| Demand - non-interest bearing | $ |
256,558 |
|
$ |
272,945 |
|
$ |
292,230 |
|
$ |
291,981 |
|
$ |
299,535 |
|
|||||
| Demand - interest bearing |
|
165,547 |
|
|
142,043 |
|
|
131,603 |
|
|
115,844 |
|
|
123,494 |
|
|||||
| Money market and savings |
|
187,329 |
|
|
186,875 |
|
|
187,952 |
|
|
213,715 |
|
|
222,834 |
|
|||||
| Time deposits of less than $250,000 |
|
16,697 |
|
|
16,771 |
|
|
20,530 |
|
|
21,017 |
|
|
19,579 |
|
|||||
| Time deposits of more than $250,000 |
|
9,420 |
|
|
11,147 |
|
|
9,685 |
|
|
8,078 |
|
|
8,236 |
|
|||||
| Total deposits | $ |
635,551 |
|
$ |
629,781 |
|
$ |
642,000 |
|
$ |
650,635 |
|
$ |
673,678 |
|
|||||
| Borrowed funds |
|
67,517 |
|
|
49,756 |
|
|
86,190 |
|
|
79,276 |
|
|
54,860 |
|
|||||
| Other liabilities |
|
7,067 |
|
|
6,151 |
|
|
11,545 |
|
|
10,349 |
|
|
9,013 |
|
|||||
| Total liabilities | $ |
710,135 |
|
$ |
685,688 |
|
$ |
739,735 |
|
$ |
740,260 |
|
$ |
737,551 |
|
|||||
| STOCKHOLDERS' EQUITY | ||||||||||||||||||||
| Common stock, surplus & retained earnings | $ |
93,076 |
|
$ |
91,399 |
|
$ |
95,516 |
|
$ |
93,959 |
|
$ |
92,433 |
|
|||||
| Accumulated other comprehensive income, net of tax |
|
(14,461 |
) |
|
(13,810 |
) |
|
(24,135 |
) |
|
(21,338 |
) |
|
(18,881 |
) |
|||||
| Total stockholders' equity | $ |
78,615 |
|
$ |
77,589 |
|
$ |
71,381 |
|
$ |
72,621 |
|
$ |
73,552 |
|
|||||
| Total liabilities & stockholders' equity | $ |
788,750 |
|
$ |
763,277 |
|
$ |
811,116 |
|
$ |
812,881 |
|
$ |
811,103 |
|
|||||
| Consolidated Statements of Income | |||||||||||||||||
| (Dollars in 000's) | 1st Quarter 2024 |
4th Quarter 2023 |
3rd Quarter 2023 |
2nd Quarter 2023 |
1st Quarter 2023 |
||||||||||||
| INCOME STATEMENT | |||||||||||||||||
| INTEREST INCOME | |||||||||||||||||
| Loans | $ |
7,907 |
$ |
7,399 |
|
$ |
7,071 |
$ |
6,757 |
|
$ |
6,350 |
|||||
| Investments |
|
621 |
|
766 |
|
|
880 |
|
970 |
|
|
1,035 |
|||||
| Federal funds sold and due from banks |
|
133 |
|
195 |
|
|
312 |
|
113 |
|
|
61 |
|||||
| Total interest income |
|
8,661 |
|
8,360 |
|
|
8,263 |
|
7,840 |
|
|
7,446 |
|||||
| INTEREST EXPENSE | |||||||||||||||||
| Deposits |
|
2,121 |
|
1,885 |
|
|
1,580 |
|
1,418 |
|
|
746 |
|||||
| Borrowed funds |
|
676 |
|
794 |
|
|
997 |
|
520 |
|
|
382 |
|||||
| Total interest expense |
|
2,797 |
|
2,679 |
|
|
2,577 |
|
1,938 |
|
|
1,128 |
|||||
| NET INTEREST INCOME |
|
5,864 |
|
5,681 |
|
|
5,686 |
|
5,902 |
|
|
6,318 |
|||||
| Provision for loan losses |
|
175 |
|
286 |
|
|
252 |
|
(86 |
) |
|
57 |
|||||
| Net interest income after provision for loan losses |
|
5,689 |
|
5,395 |
|
|
5,434 |
|
5,988 |
|
|
6,261 |
|||||
| NONINTEREST INCOME | |||||||||||||||||
| Service charges |
|
124 |
|
115 |
|
|
119 |
|
124 |
|
|
119 |
|||||
| Mortgage lending income |
|
- |
|
183 |
|
|
252 |
|
275 |
|
|
59 |
|||||
| Steelhead finance income |
|
1,202 |
|
1,192 |
|
|
1,224 |
|
1,291 |
|
|
1,465 |
|||||
| BOLI Income |
|
134 |
|
155 |
|
|
124 |
|
112 |
|
|
108 |
|||||
| Other non-interest income |
|
503 |
|
633 |
|
|
523 |
|
558 |
|
|
426 |
|||||
| Total noninterest income |
|
1,963 |
|
2,278 |
|
|
2,242 |
|
2,360 |
|
|
2,177 |
|||||
| NONINTEREST EXPENSE | |||||||||||||||||
| Salaries and employee benefits |
|
3,374 |
|
3,804 |
|
|
3,332 |
|
3,990 |
|
|
4,000 |
|||||
| Occupancy & equipment expense |
|
881 |
|
899 |
|
|
902 |
|
875 |
|
|
877 |
|||||
| Advertising expense |
|
86 |
|
115 |
|
|
118 |
|
121 |
|
|
119 |
|||||
| Professional expenses |
|
234 |
|
206 |
|
|
194 |
|
205 |
|
|
214 |
|||||
| Data processing expense |
|
316 |
|
355 |
|
|
322 |
|
317 |
|
|
321 |
|||||
| Loss on sale of investments |
|
- |
|
6,814 |
|
|
- |
|
- |
|
|
- |
|||||
| Other operating expenses |
|
493 |
|
724 |
|
|
706 |
|
614 |
|
|
674 |
|||||
| Total noninterest expense |
|
5,384 |
|
12,917 |
|
|
5,574 |
|
6,122 |
|
|
6,205 |
|||||
| Income before taxes |
|
2,268 |
|
(5,244 |
) |
|
2,102 |
|
2,226 |
|
|
2,233 |
|||||
| Provision for income taxes |
|
590 |
|
(1,338 |
) |
|
544 |
|
571 |
|
|
560 |
|||||
| NET INCOME | $ |
1,678 |
$ |
(3,906 |
) |
$ |
1,558 |
$ |
1,655 |
|
$ |
1,673 |
|||||
| Shares Outstanding End of Quarter |
|
5,328,535 |
|
5,327,035 |
|
|
5,325,535 |
|
5,325,535 |
|
|
5,325,535 |
|||||
| Average shares outstanding |
|
5,328,035 |
|
5,326,035 |
|
|
5,325,535 |
|
5,325,368 |
|
|
5,317,065 |
|||||
| Earnings per share | $ |
0.31 |
$ |
(0.73 |
) |
$ |
0.29 |
$ |
0.31 |
|
$ |
0.31 |
|||||
| (Dollars in 000's) | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | |||||||||||||||
| Financial Highlights | ||||||||||||||||||||
| Total portfolio loans | $ |
547,229 |
|
$ |
516,697 |
|
$ |
511,374 |
|
$ |
490,378 |
|
$ |
488,025 |
|
|||||
| Total deposits | $ |
635,551 |
|
$ |
629,781 |
|
$ |
642,000 |
|
$ |
650,635 |
|
$ |
673,678 |
|
|||||
| Total assets | $ |
788,750 |
|
$ |
763,277 |
|
$ |
811,116 |
|
$ |
812,881 |
|
$ |
811,103 |
|
|||||
| Net income | $ |
1,678 |
|
$ |
(3,906 |
) |
$ |
1,558 |
|
$ |
1,655 |
|
$ |
1,673 |
|
|||||
| Steelhead Finance contribution, pre-tax | $ |
205 |
|
$ |
205 |
|
$ |
323 |
|
$ |
450 |
|
$ |
481 |
|
|||||
| Mortgage contribution, pre-tax | $ |
- |
|
$ |
(476 |
) |
$ |
(162 |
) |
$ |
(164 |
) |
$ |
(259 |
) |
|||||
| Performance Ratios | ||||||||||||||||||||
| Return on average assets |
|
0.85 |
% |
|
-1.97 |
% |
|
0.76 |
% |
|
0.82 |
% |
|
0.83 |
% |
|||||
| Return on average equity |
|
8.60 |
% |
|
-22.02 |
% |
|
8.53 |
% |
|
9.06 |
% |
|
9.48 |
% |
|||||
| Net interest margin |
|
3.31 |
% |
|
3.19 |
% |
|
3.07 |
% |
|
3.22 |
% |
|
3.49 |
% |
|||||
| Yield on loans |
|
5.83 |
% |
|
5.68 |
% |
|
5.55 |
% |
|
5.46 |
% |
|
5.36 |
% |
|||||
| Cost of deposits |
|
1.33 |
% |
|
1.16 |
% |
|
0.96 |
% |
|
0.84 |
% |
|
0.44 |
% |
|||||
| Efficiency ratio |
|
68.79 |
% |
|
162.29 |
% |
|
70.31 |
% |
|
74.10 |
% |
|
73.04 |
% |
|||||
| Efficiency ratio excluding non-recurring expenses |
|
68.79 |
% |
|
72.40 |
% |
|
70.31 |
% |
|
74.10 |
% |
|
73.04 |
% |
|||||
| Full-time equivalent employees |
|
132 |
|
|
132 |
|
|
148 |
|
|
142 |
|
|
146 |
|
|||||
| Capital | ||||||||||||||||||||
| Tier 1 Capital Ratio |
|
11.38 |
% |
|
11.54 |
% |
|
11.36 |
% |
|
11.15 |
% |
|
10.98 |
% |
|||||
| Community Bank Leverage Ratio(1) |
|
13.18 |
% |
|
13.39 |
% |
|
13.01 |
% |
|
12.78 |
% |
|
12.60 |
% |
|||||
| Book value per share | $ |
14.75 |
|
$ |
14.57 |
|
$ |
13.40 |
|
$ |
13.64 |
|
$ |
13.81 |
|
|||||
| Tangible book value per share | $ |
14.05 |
|
$ |
13.86 |
|
$ |
12.70 |
|
$ |
12.93 |
|
$ |
13.10 |
|
|||||
| Asset Quality | ||||||||||||||||||||
| Allowance for loan losses (ALLL) | $ |
6,029 |
|
$ |
5,863 |
|
$ |
5,782 |
|
$ |
4,873 |
|
$ |
5,508 |
|
|||||
| Nonperforming loans (NPLs) | $ |
412 |
|
$ |
733 |
|
$ |
427 |
|
$ |
677 |
|
$ |
1,280 |
|
|||||
| Nonperforming assets (NPAs) | $ |
618 |
|
$ |
939 |
|
$ |
713 |
|
$ |
963 |
|
$ |
1,566 |
|
|||||
| Classified assets(2) | $ |
6,442 |
|
$ |
6,549 |
|
$ |
5,800 |
|
$ |
5,964 |
|
$ |
6,984 |
|
|||||
| ALLL as a percentage of net loans |
|
1.10 |
% |
|
1.13 |
% |
|
1.13 |
% |
|
0.99 |
% |
|
1.13 |
% |
|||||
| ALLL as a percentage of NPLs |
|
1463 |
% |
|
800 |
% |
|
1354 |
% |
|
720 |
% |
|
430 |
% |
|||||
| Net charge offs (recoveries) to average loans |
|
0.00 |
% |
|
0.01 |
% |
|
0.01 |
% |
|
0.00 |
% |
|
0.00 |
% |
|||||
| Net NPLs as a percentage of total loans |
|
0.08 |
% |
|
0.14 |
% |
|
0.08 |
% |
|
0.14 |
% |
|
0.27 |
% |
|||||
| Nonperforming assets as a percentage of total assets |
|
0.08 |
% |
|
0.12 |
% |
|
0.09 |
% |
|
0.12 |
% |
|
0.19 |
% |
|||||
| Classified Asset Ratio(3) |
|
7.61 |
% |
|
7.85 |
% |
|
7.53 |
% |
|
7.64 |
% |
|
8.83 |
% |
|||||
| Past due as a percentage of total loans |
|
0.55 |
% |
|
0.14 |
% |
|
0.08 |
% |
|
0.14 |
% |
|
0.26 |
% |
|||||
| End of period balances | ||||||||||||||||||||
| Total securities and short term deposits | $ |
161,904 |
|
$ |
167,355 |
|
$ |
216,673 |
|
$ |
240,899 |
|
$ |
242,871 |
|
|||||
| Total loans, net of allowance | $ |
541,200 |
|
$ |
510,834 |
|
$ |
506,167 |
|
$ |
486,817 |
|
$ |
482,816 |
|
|||||
| Total earning assets | $ |
709,133 |
|
$ |
684,052 |
|
$ |
728,496 |
|
$ |
733,140 |
|
$ |
731,195 |
|
|||||
| Intangible Assets | $ |
3,741 |
|
$ |
3,753 |
|
$ |
3,766 |
|
$ |
3,778 |
|
$ |
3,790 |
|
|||||
| Total assets | $ |
788,750 |
|
$ |
763,277 |
|
$ |
811,116 |
|
$ |
812,881 |
|
$ |
811,103 |
|
|||||
| Total noninterest bearing deposits | $ |
256,558 |
|
$ |
272,945 |
|
$ |
292,230 |
|
$ |
291,981 |
|
$ |
299,535 |
|
|||||
| Total deposits | $ |
635,551 |
|
$ |
629,781 |
|
$ |
642,000 |
|
$ |
650,635 |
|
$ |
673,678 |
|
|||||
| Average balances | ||||||||||||||||||||
| Total securities and short term deposits | $ |
165,584 |
|
$ |
201,788 |
|
$ |
241,049 |
|
$ |
242,315 |
|
$ |
245,101 |
|
|||||
| Total loans, net of allowance | $ |
536,255 |
|
$ |
504,002 |
|
$ |
493,314 |
|
$ |
489,624 |
|
$ |
473,919 |
|
|||||
| Total earning assets | $ |
701,839 |
|
$ |
705,790 |
|
$ |
734,363 |
|
$ |
731,939 |
|
$ |
719,020 |
|
|||||
| Total assets | $ |
787,127 |
|
$ |
794,196 |
|
$ |
821,162 |
|
$ |
811,697 |
|
$ |
803,116 |
|
|||||
| Total noninterest bearing deposits | $ |
255,204 |
|
$ |
273,413 |
|
$ |
291,470 |
|
$ |
293,331 |
|
$ |
318,548 |
|
|||||
| Total deposits | $ |
642,420 |
|
$ |
643,015 |
|
$ |
657,331 |
|
$ |
675,579 |
|
$ |
685,318 |
|
|||||
| (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. | ||||||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240417833152/en/
Contacts
Julia Beattie, President & CEO
(541) 608-8920, julia.beattie@peoplesbank.bank
