PBCO Financial Corporation (OTCPK: “PBCO”), the holding company (Company) of People’s Bank of Commerce (Bank), today reported net income of $1.9 million and earnings per share of $0.36 for the quarter ended September 30, 2024, compared to net income of $1.8 million and $0.33 per share for the quarter ended June 30, 2024.

Highlights

• Net interest margin of 3.51% which expanded by 2 basis points compared to prior quarter and represents the fourth consecutive quarter of margin expansion
• 2.2% increase in total deposits compared to prior quarter
• Tangible book value per share increased to $15.67, compared to $14.56 in the prior quarter
• Return on Average Assets increased to 0.97% compared to 0.90% in the prior quarter

“The Bank continued to show positive momentum in third quarter with increasing earnings per share and expansion of the net interest margin,” reported Julia Beattie, President & CEO. “We saw growth in core deposits and the Bank was able to pay off the remaining FHLB borrowings during the quarter, which helped improve our overall cost of funds. We continue to focus on risk management and driving improvement in profitability,” noted Beattie.

Total deposits grew 2.2% during third quarter and 5.3% year-to-date. “The Bank’s focus through the end of third quarter has been to retain and recapture deposit relationships with existing customers,” added Beattie. In addition to noted on-balance sheet deposit growth during third quarter, the Bank also had $8.5 million in off-balance sheet deposits that are anticipated to be brought back on balance sheet during the fourth quarter.

The investment portfolio decreased 3.3% to $139.6 million during the third quarter of 2024 from $144.3 million at the end of the second quarter. The decrease is primarily the result of matured investments along with monthly principal reductions on the MBS portfolio. The average life of the portfolio was 3.8 years at the end of the third quarter, a slight decrease from the prior quarter-end. Due to improving market rates on investments during the quarter the Company’s AOCI book loss decreased to $10.0 million at the end of the third quarter compared to $13.8 million at the end of the second quarter.

Non-interest income was $2.0 million in the third quarter, up $57 thousand from the second quarter of 2024. Factoring revenue was flat from the prior quarter, while other non-interest income was up $55 thousand, with $145 thousand recouped during the quarter on prior-year expenses of a non-performing loan that paid off in third quarter.

Non-interest expenses totaled $5.6 million in the third quarter, down $71 thousand from the previous quarter. The decrease in non-interest expense during the quarter is largely attributed to a reduction in personnel expenses of $154 thousand due to employee retirements and continued focus on personnel expense containment. Occupancy and equipment expense also improved by $106 thousand from the prior quarter with the sale and lease-back of the bank’s Lebanon branch and bringing a portion of the bank’s managed IT services in-house. These decreases in non-interest expense were offset by a significant increase in other operating expenses attributed to a $269 thousand provision for unfunded loan commitments.

As of September 30th, the Tier 1 Capital Ratio for PBCO Financial Corporation was 11.88% with total shareholder equity of $86.9 million, versus a Tier 1 Capital Ratio of 11.62% and total shareholder equity of $81.0 million as of June 30, 2024. The Tier 1 Capital Ratio for the Bank was 13.71% at quarter-end, up from 13.44% as of June 30, 2024. Tangible Capital was $83.0 million, or 10.55% as of September 30, 2024, versus second quarter of 2024 at $77.3 million, or 9.80%.

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.

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