People's Bank reports 20 percent Q2 jump
People's Bank of Commerce earnings jumped 20 percent in the second quarter, driven by expanding loan demand.
The Medford-based community bank reported net income of $448,000 or 20 cents per share, up from $375,000 or 18 cents per share a year earlier.
Through the first six months of 2016, People's Bank has netted $746,000, or 34 cents per share, up from $709,000 with similar per-share earnings.
People's Bank loan portfolios expanded $8.2 million in the second quarter on the heels of a $14.3 million gain in the first quarter.
Chief Financial Officer Russ Millburn characterized the additional lending as long-term loans for building acquisition, equipment purchase and lines of credit.
"We're seeing the growth from both new and existing businesses," Millburn said. "It's really diverse with medical, office and retail involved."
The bank began seeing increased demand during 2015, Millburn said. "And it hasn't quit yet."
Net interest income grew 14 percent in the second quarter to $2.4 million from $2.1 million a year ago. Just as important, no loans were past due 90 days at the end of the second quarter in 2016 or 2015.
Although there is some refinancing and movement from other lenders, Millburn said there has been steady local economic expansion.
"We've been growing our loan portfolio for a number of years, but not at the rate we have the last three quarters," he said.
Part of the demand has been triggered by lower commercial lending rates.
"The rates are as low as I've seen in 30 years for commercial real estate at 4 and 5 percent, depending on many factors," he said. "The increased loans have been the big driver for us, because without increasing overhead, the interest income falls right to the bottom line."
Reach reporter Greg Stiles at 541-776-4463 or email@example.com. Follow him on Twitter at www.twitter.com/GregMTBusiness, on Facebook at www.facebook.com/greg.stiles.31