People's Bank of Commerce reports loss

People's Bank of Commerce Friday reported a third-quarter loss of $6,700, or 1 cent per share.

During the same period last year, the Medford-based bank earned a profit of $158,000, or 19 cents per share.

For the first nine months of the year, People's Bank of Commerce had net earnings of $73,000, or 8 cents per share, compared to $408,000, or 50 cents per share, for a similar period in 2007.

The bank declared its 11th quarterly cash dividend, 10 cents per share, payable Dec. 1 to shareholders of record Nov. 15.

People's Bank loans totaled $69 million at the end of the third quarter, resulting in a 6 percent decrease from the $71 million the same quarter last year. The portfolio mix showed significant change, with commercial and consumer loans increasing by 8 percent while real estate loans decreased by 40 percent.

The bank reported total assets of $84.4 million, total deposits of $73 million and total shareholders' equity of $11.4 million. President Ken Trautman said real estate loans related to construction and development were down 32 percent. Net interest margin through the third quarter was 4.75 percent, compared to 5.44 percent during the same period in 2007. The decrease is due to a shift in less risky general commercial loans.

The bank's provision for loan loss expense is $105,000 in 2008 compared to $161,000 at a similar time in 2007. Loans 90 days and more past due or non-accrual grew by $785,000 during the quarter. The bank attributed the increase primarily to one borrower and said it has adequate collateral and reserves.

Non-interest expense is up 7 percent with the most notable item being the start-up costs of the new Central Point branch.

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