People's Bank of Commerce reported a first-quarter earnings drop to $76,000 from $112,000 last year. The Medford-based bank reported earnings of 9 cents per share, adjusted for a recent 5 percent stock dividend, for the three months ending March 31, compared to 13 cents per share, adjusted, in 2007.

People's Bank of Commerce reported a first-quarter earnings drop to $76,000 from $112,000 last year. The Medford-based bank reported earnings of 9 cents per share, adjusted for a recent 5 percent stock dividend, for the three months ending March 31, compared to 13 cents per share, adjusted, in 2007.

The bank, however, noted growth in loans and deposits, reporting a 19 percent increase in portfolio loans to $71 million and a 9 percent increase in deposits to $74 million.

"Although we have experienced strong commercial loan growth," said Mike Sickels, chairman and chief executive officer, "the recent substantial cuts in prime rate and the need to strengthen our loan-loss reserve to reflect a softened local real estate market have resulted in a slight decline in net interest income."

After experiencing a slight reduction in the provision for losses during the first quarter last year, for the first quarter of 2008 the bank bumped up its loan-loss provision to $20,000. The reserve now represents 1.38 percent of portfolio loans compared to 1.18 percent a year ago.

Sickels noted that real estate mortgage originations during the first quarter of 2008 were stronger than those of a year ago, but added it is difficult to determine at this time if this will continue during the rest of the year.

People's Bank is also close to completing its expansion into the Central Point market as construction of a new building at the corner of Pine and 10th streets nears completion. A June opening is anticipated.