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People's Bank earnings increase

In addition, its earnings for the fourth quarter more than double

It was a tough year to make money for just about everyone. Nonetheless, People's Bank of Commerce increased its net income by more than a third in 2001, the Medford financial institution reported Thursday.

Spurred by strong mortgage lending revenues, People's Bank net income for the year ending Dec. 31, was $430,000 compared to $320,000 in 2000.

People's Bank also showed a 133 percent increase in earnings for the fourth quarter of 2001, compared to those in the fourth quarter of the prior year. Its earnings of $137,000, or 23 cents per share, for the three months ended Dec. 31, compared to $59,000, or 10 cents per share, in 2000.

"Anytime you can more than double your earnings one year to next, quarter to quarter, that's an outstanding performance," said Mike Sickels, People's Bank chairman and chief executive officer.

The 3-year-old bank also saw continued strong growth in its balance sheet in the fourth quarter of 2001 compared with a year ago. At year's end, deposits of 538.2 million were up 24 percent over last year, total loans of $37.9 million were up 37 percent, and total assets were $45.1 million.

"The dramatic drop in loan and investment rates to 40-year record lows has certainly had an immediate adverse affect upon our interest margin," Sickels said. "Frankly, we were a little reluctant to hurry and interest drops on deposits as rapidly as we were committed to dropping rates on the on the loan side."

That reduced the bank's interest margins, but was offset by mortgage activity.

"The lobby traffic has been very good and new accounts have been very steady," Sickels said. "We put together four- to five-hundred real estate loans and that brought a lot of new people into the building."

In all, the bank originated more than $50 million in mortgage loans in 2001. The bank has total shareholder equity of $6,567,000, or a book value of $10.94 per share. In the third quarter, the bank earned 14 cents per share, compared to 13 cents, in 2000.

Reach reporter Greg Stiles at 776-4463 or e-mail