People's Bank of Commerce reported second-quarter earnings of $259,000, up 32 percent over the $196,000 profit the bank posted during the second quarter in 2012.
For the first half of 2013, the Medford-based bank earned $362,000, 15 percent below the $424,000 recorded in 2012.
Second-quarter per share earnings rose 25 percent to 20 cents from 16 cents for the same period a year earlier.
Noninterest income grew 16 percent during the quarter compared to the same period last year, primarily because of increased mortgage-lending income and loan fees.
Ken Trautman, president and chief executive officer, said the institution has seen strong loan and deposit growth since the beginning of 2011.
"Favorable interest rates in 2012 allowed for significant residential refinance activity that year," Trautman said. "During the first quarter of 2013 activity slowed, but refinance, as well as purchase activity, rebounded in the second quarter."
People's Bank said staff increases to accommodate deposit and loan growth following a move into a new headquarters during the fourth quarter of 2012 led to noninterest expenses rising 18 percent for the first half of 2013. During the past 12 months, the bank has upped its loan portfolio 16 percent and grown deposits 24 percent.
Nonperforming assets to total assets tumbled to 0.64 percent at the end of June compared to 1.94 percent a year earlier.
The bank's improving loan quality was reflected in its $88,000 loan loss provision for the first six months compared with $127,000 for the first six months of last year.
The bank's assets grew 22 percent to $161 million at the end of June, with shareholders' equity reaching $15.4 million and a book value of $11.69 per share.
In a separate move, People's Bank announced plans to move into Grants Pass, saying it would open a full-service branch before the fourth quarter of 2014.
"The latest round of mergers and acquisitions has left Grants Pass without a locally owned commercial bank," Trautman said. "Grants Pass has been fortunate to have Evergreen Federal Savings and Loan supporting the local community but is missing a commercial bank with extensive business-lending experience."
Pattie Baker, who previously was vice president and branch manager for Bank of the Cascades in Grants Pass, will head up People's Bank Grants Pass operations.