People`s Bank Reports Earnings

http://www.businesswire.com/news/home/20091029006570/en

MEDFORD, Ore.--(Business Wire)--
People`s Bank of Commerce (OTCBB:PBCO) today reported modest earnings for the
third quarter of 2009 of $48,000, a substantial improvement from the $534,000
loss reported in the previous quarter. These earnings are also favorable
compared to the $7,000 loss in the same quarter of 2008. The bank reported
earnings of $0.05 per share for the three months ended September 30, 2009
compared to the loss of one cent per share in 2008.

Through the first nine months of 2009, People`s Bank had a net loss of $434,000
compared to a profit of $73,000 for the same period in 2008. On a per share
basis, a loss of $0.48 per share in 2009 is compared to $0.08 in 2008. Year to
date 2009 results are tempered by the large additions the bank made to its loan
loss reserve totaling $1,110,500 compared to $105,000 the same period in 2008.
The bank continues to closely monitor its loan loss reserve for adequacy; the
bank has increased its reserve ratio from 1.22% of portfolio loans in 2008 to
1.62% of portfolio loans this year.

Ken Trautman, People`s Bank President and CEO explained that third quarter
earnings were again positive. Although small, they reflect the positive changes
in the bank`s balance sheet and key ratios. The Bank benefited from significant
loan and deposit increases this year. Total portfolio loans increased 11% to
$74.9 million in the past 12 months as of September 30, 2009 while deposits are
up in the same period by 26% to $91,374,000. At the end of the third quarter of
2009 the bank`s loan to deposit ratio stood at 82% compared to 93% in 2008.
Trautman explained, "The change in loan to deposit ratio increases liquidity and
in uncertain times additional liquidity increases the bank`s safety."

Net interest income remained steady in the third quarter of 2009, with the net
interest margin at 4.53% through September 30, 2009 compared to 4.78% in 2008.
"While the net interest margin has decreased slightly, it is still strong
compared to other banks." Trautman noted. "It is the higher loan loss provisions
that have reduced profitability." Non-interest income was up 44% for the third
quarter of 2009 compared to the same period in 2008 primarily a reflection of
the outstanding performance of our residential lending department which showed a
53% increase in home lending activity.

The bank`s Board of Directors recently made the decision to suspend its
quarterly dividend to preserve capital. "Even though the bank`s capital is
extremely strong at over 10% equity, the board felt it prudent based on the
robust level of asset growth we have experienced and the extreme economic
uncertainty, that the shareholders are better served keeping the capital in the
bank until more normal economic times return."

The bank`s has total shareholders` equity of over $10.8 million and a book value
of $11.91 per share. The stock trades in the OTC Bulletin Board market under the
symbol PBCO.

2009 2008

Quarter ended September 30:
Net income (loss) $ 48,000 $ (7,000)
EPS 0.05 (0.01)

Quarter ended June 30:
Net income (loss) $ (534,000) $ 3,500
EPS (0.59) 0.004

Nine months end September 30:
Net income (loss) $ (434,000) $ 73,000
EPS (0.48) 0.08

At September 30:
Total Portfolio Loans $ 74,886,000 $ 67,417,000
Total Reserve for Loan Losses 1,215,000 821,000
Total Deposits 91,374,000 72,606,000
Total Assets 103,402,000 84,462,000
Total Shareholders' Equity 10,844,000 11,391,000
No. of shares outstanding 910,176 910,176 *
Book Value, per share 11.91 12.52 *

At June 30:
Total Portfolio Loans $ 73,021,000 $ 67,412,000
Total Reserve for Loan Losses 1,209,000 822,000
Total Deposits 84,966,000 68,103,000
Total Assets 96,889,000 84,573,000
Total Shareholders' Equity 10,717,000 11,487,000
No. of shares outstanding 910,176 910,176 *
Book Value, per share 11.77 12.62 *

* 2008 data adjusted retroactively for stock dividend paid 4/16/09.

People`s Bank of Commerce
President and CEO
Ken Trautman, 541-774-7654

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