People's Bank of Commerce has announced a 5 percent stock dividend payable to shareholders of record April 28. The dividend will be paid around May 30.

The Medford-based community bank has declared stock dividends seven times in the past six years. Chief Financial Officer Russ Millburn said the action allows the bank to continue its growth.

"A cash dividend results in a reduction in capital when it's given back to the shareholder," Millburn said. "It lowers your leverage, when capital is divided by assets. We want to maintain a higher level of capital assets, so we don't want to distribute the capital. In turn, that allows us to put more into earning assets, which allows us to make more money."

Millburn said a stockholder with 100 shares in 2011, participating in each of the 5 percent dividends, would have seen significant growth. Shares traded for $7 in 2011, which would have resulted in a value of $700. The same shareholder would now have 140 shares that were priced at $11.50 the day the dividend was declared, which would be worth $1,610.

The bank's net income grew 34 percent in 2016, and Millburn said the first quarter, ending March 31, is shaping up well.

— Reach reporter Greg Stiles at 541-776-4463 or business@mailtribune.com. Follow him on Twitter at www.twitter.com/GregMTBusiness, on Facebook at www.facebook.com/greg.stiles.31.