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People's Bank sees 64% net earnings gain

Propelled in part by an 11 percent gain in mortgage lending income, People’s Bank of Commerce saw a 64 percent net earnings gain during the third quarter as the Medford-based bank reported a $367,000 profit compared to $223,000 a year ago.

Per share earnings climbed to 19 cents from 13 cents a year earlier.

Through nine months, People's Bank has earned $874,000, up 49 percent from $585,000 for the same period in 2013. Earnings per share for the period were 46 cents, compared to 41 cents last year.  

Interest income is up by 16 percent year-to-date, the result of strong loan growth during 2014. Loans are up 14 percent, and deposits have grown 24 percent in the past 12 months.

Chief Financial Officer Russ Millburn said People's Bank has attracted enough deposits to produce money available to lend.

"Bank lending is very different than it was in the early 2000s," Millburn said. "In those days, banks, including People's Bank, made a lot of money on very high-risk land, construction and development loans. We all know banks that took on too much risk and paid the ultimate price of failure. Now, People's Bank is building a portfolio of loans based on relationships, not just the loan or project."

The bank's non-current loans account for merely 0.03 percent of total loans, down from 0.25 percent a year ago. Non-performing assets, loans past due 90 days and more, were also down. 

Millburn said new offices on Barnett Road in 2012 and Grants Pass in 2013 have been paying off.

"These branches represent millions of dollars of capital invested and significant expense to staff and run the branches," he said. "In short, we had to spend money to make money. We have room in all our branches for more relationships, and we don’t see growth slowing down into next year. I anticipate my next earnings release headline will be similar to the past four."

Reach reporter Greg Stiles at 541-776-4463 or business@mailtribune.com. Follow him on Twitter at www.twitter.com/GregMTBusiness, on Facebook at https://www.facebook.com/greg.stiles.31, and read his blog at www.mailtribune.com/Economic Edge.