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PBCO Financial Corporation Reports Q2 2024 Earnings

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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