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People's Bank continues to diversify

It's a busy time for People's Bank of Commerce.

The Medford-based community bank is building new headquarters on Biddle Road, acquired Steelhead Finance in August, and last Friday the bank moved into Klamath Falls when it purchased a commercial lending center from Oregon City-based Lewis & Clark Bank.

On top of that, the financial institution's bottom line is thriving.

People's Bank Wednesday reported third-quarter earnings of $695,000, or 28 cents per share, up from $614,000, or 26 cents per share a year earlier. For the first nine months of 2017, the bank has shown a $1.7 million profit, or 71 cents per share, up from from $1.4 million, or 59 cents per share.

People's Bank President and CEO Ken Trautman said merely taking deposits and lending money won't do over the long haul.

"There hasn't been a bank founded in Southern Oregon since the 1800s that has survived," Trautman said. "We're the last one standing. Southern Oregon is the first area hit during an economic downturn and the last to come out; we have to diversify. We're committed long term. We got through the last downturn, and it was tough one, but we don't want that to happen again."

Steelhead Finance, located in Navigators Landing office park, was the initial step in that direction, and even produced $170,000 pre-tax for the bank in its first month under People's ownership.

"Steelhead is a perfect fit because its customers are truckers nationwide that aren't subject to downturns in Oregon," Trautman said. "It's well managed and a good fit.

The latest move came about when Lewis & Clark's management decided after three years Klamath Falls was a geographic challenge.

The 3-year-old lending office on Main Street in Klamath Falls has one employee. Pending regulatory approval, the institution plans to begin regular banking operations at the 1,400-square-foot office, including in December with a four-person staff.

Trautman said People's Bank expects to attract customers throughout the Klamath Basin, including Lakeview and Merrill, as well as the Tulelake region in Northern California. The Medford bank acquired $5 million in loans from Lewis & Clark, and may take on another three Small Business Administration loans at a later date.

"This gives us more diversification," he said. "We have no ag loans, and our office in Klamath Falls is a very strong ag lender. Ag reacts differently than commercial lending, so it will be another stabilizing influence for us."

Klamath County has roughly $800 million in banking deposits, but no locally based banks. People's Bank envisions claiming a 20 percent share of the market within five years.

The bank's assets have grown to $300 million with $264 million in deposits. The headquarters building is due for completion next spring and occupation April 2.

People's Bank will continue seeking to diversify its revenue streams. That might be in the form of an insurance agency or investment advisers.

"All our present clients use insurance for buildings, equipment and life insurance," Trautman said. There's nothing on the horizon right now, but in the near future — a year or two — we'll be looking for opportunities."

 — 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.

People's Bank is building a new headquarters on the corner of Biddle Road and Progress Drive in Medford. [Mail Tribune / Andy Atkinson]