People’s Bank Reports 13 Consecutive Quarters of Profitability

  People’s Bank Reports 13 Consecutive Quarters of Profitability

Business Wire

MEDFORD, Ore. -- October 24, 2012

People’s Bank of Commerce (OTCBB: PBCO) today reported earnings of $676,000
for the first nine months of 2012, up 114% over the $315,000 for the same
period last year. This resulted in earnings of $0.57 per share for the first
nine months of 2012, compared to $0.27 per share reported the prior year. Net
interest income was up by 16% year-to-date, the result of strong loan growth
during 2012. The Bank is also excited to report the opening of its Barnett
Road branch in mid-November 2012.

“The first nine months of 2012 produced the best net profit we’ve had in the
past five years and marks the Bank’s 13^th consecutive quarter of
profitability since the recession hit,” said Ken Trautman, president and CEO
of People’s Bank.

“Strong loan and deposit growth continues in excess of 14%, as local
businesses refinance with People’s Bank to take advantage of the extremely low
long-term rates. The bank’s excellent profit, due in large part to its
tremendous development in commercial lending, showcases its commitment to lend
local deposits to local businesses,” added Trautman.

Earnings for the third quarter of 2012 were $252,000, compared to $155,000 for
the same period in 2011, an increase of 62%. The Bank reported earnings of
$0.21 per share for the three months ending September 30, 2012, compared to
$0.13 per share in 2011. Mortgage lending income for the current three month
period was $413,000, up 185% over the same period last year. Non-interest
income was also 36% higher during the third quarter of 2012, compared to the
third quarter of 2011. Non-interest expenses showed an increase of 19% over
the same period last year, due primarily to salaries of added personnel to
support the Bank’s strong growth.

For the first three quarters, non-interest income was up 50%, compared to
2011, primarily due to the increase in mortgage lending activity, reflective
of the improved local residential real estate market. Non-interest expense for
the nine month period ending September 30, 2012 was up 14% over the prior

“It is very satisfying to report significant mortgage lending income, which
reflects an energized local residential real estate market,” said Trautman.
“This is in stark contrast to last year’s report of ‘reduced mortgage lending
income, reflective of a slow residential real estate market.’”

The Bank’s loan quality continues to excel with non-current loans to total
loans at 0.09% as of September 30, 2012, down from 0.27% last year.
Non-performing assets to total assets compares loans past due 90 days and
more, loans on non-accrual and other real estate owned to total assets. This
ratio was 1.39% as of September 30, 2012, compared to 2.44% at the end of
September 2011. Reserves totaled 1.62% of total loans at the end of the third
quarter 2012, compared to 1.61% one year ago. The loan loss provision totaled
$242,000 for the first nine months of 2012, compared to $258,000 for the first
nine months of 2011.

People's Bank reported total assets of $137 million at the end of September
2012, up 16% from the prior year. The Bank has total shareholders’ equity of
$14.4 million and a book value of $12.04 per share. Tier one capital to
average assets remains strong at 10.3%, considerably above regulatory
guidelines for a well-capitalized bank. The Bank’s stock trades on the
over-the-counter market under the symbol PBCO.

                                                2012            2011
Quarter ended September 30:
Net interest income                      $      1,437,000     $ 1,245,000
Provision for Loan Losses                       114,000         163,000
Noninterest income                              699,000         514,000
Noninterest expense                             1,646,000       1,380,000
Net income                                      252,000         155,000
EPS                                             0.21            0.13        **
Year to Date
Net Interest income                      $      4,085,000     $ 3,534,000
Provision for Loan Losses                       242,000         258,000
Noninterest income                              1,792,000       1,194,000
Noninterest expense                             4,637,000       4,075,000
Net income                                      676,000         315,000
EPS                                             0.57            0.27        **
At September 30:
Total Portfolio Loans                    $      105,104,000   $ 92,081,000
Total Reserve for Loan Losses                   1,750,000       1,525,000
Total Deposits                                  120,767,000     100,141,000
Total Assets                                    137,060,000     118,199,000
Total Shareholders' Equity                      14,384,000      13,352,000
No. of shares outstanding                       1,194,253       1,179,262   **
Book Value, per share                           12.04           11.32
** Retroactively adjusted for 2012 stock

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of

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.


People’s Bank of Commerce
Ken Trautman, President and CEO, 541-774-7654
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