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Loan growth boosts People's Bank of Commerce earnings by 75%

Years of pent-up demand are fueling increased commercial loan activity at People’s Bank of Commerce.

The only bank with headquarters in Jackson County saw lending grow 12 percent in the first half of 2018, driving loan production to new heights.

“For almost nine years nobody did anything,” said Ken Trautman, president and CEO. “A year ago, we had pretty flat loan growth. Now there’s enough confidence that people are going out there and growing their business. There’s a more positive feeling among all of our clients — the best in 40 years of banking I’ve seen.”

That lending activity propelled the Biddle Road-based bank’s second quarter earnings 75 percent higher.

People’s Bank reported net income of $845,000 or 29 cents per share, compared to $483,000, or 20 cents per share a year ago.

For the first half of the year, the bank’s net is up 55 percent, to $1.57 million, 56 cents per share, versus $1.01 million or 43 cents per share, the first half of 2017.

Loans have grown 15 percent year-over-year to $231 million.

“The majority of it is for new construction,” he said. “We’re financing the project going up at the old Big Y (Northgate Marketplace), and we’re bidding on some projects that we’re not even getting.”

Loan quality has stayed strong, with no unusual risks associated with the expanded portfolio, Trautman said. “We’re talking about the growth in the community. Our pipeline of approved but not yet funded loans is at the highest level in the bank’s history, which positions us well for the last half of this year.”

The bank recently hired four commercial lenders, including Bill Haden, from the former Scott Valley Bank, recently acquired by Mechanics Bank.

People’s Bank subsidiary Steelhead Finance, which provides freight transportation industry funding, generated income of $1.3 million in the quarter, up from $1.2 million in the first quarter.

“Steelhead’s performance is a bellwether report on the economy,” Trautman said. “When they do well, the economy is doing well. When they slow down, it’s a precursor that the economy is slowing down. So that makes the freight industry a real good thing to track.”

Reach reporter Greg Stiles at 541-776-4463 or gstiles@rosebudmedia.com. Follow him on Twitter at www.twitter.com/GregMTBusiness or www.facebook.com/greg.stiles.31.