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People's Bank: Businesses are spending again Tuesday Jul 18, 2017 at 4:29 PM Jul 18, 2017 at 4:34 PM Greg Stiles Mail Tribune @GregMTBusiness There are sections of the country, even parts of Oregon, that have done their post-recession victory lap and settled into a business-as-usual routine. Not so in the Rogue Valley, said People's Bank of Commerce President and CEO Ken Trautman, whose bank Tuesday posted a second-quarter profit of $483,000, or per-share earnings of 20 cents, up from $448,000, or 19 cents per share, a year ago. "Southern Oregon, from Roseburg to the California border, goes into recession early and comes out late," Trautman said. "While other parts of the state and country have been out of the recession for a while, we just started feeling it last year." The Medford-based bank's first-half 2017 results underscore that position, posting a profit of just over $1 million, up from $746,000 the first half of 2016. "Business is feeling positive and spending money," Trautman said. "That's created a lot of growth and a lot of opportunities." People's Bank loans increased 12 percent and deposits grew 8 percent in the past 12 months. While refinancing was a key component of the bank's business in 2016, the present round of lending is spurred by new business loans. "Many of these new loans in 2017 are commercial construction loans that do not add to our loan totals until they advance over the next six to 12 months,” Trautman said. "When we see the brand-new loans, businesses are building and adding to their business," he said. "That's exactly what you want to see in the community — people spending money and hiring employees." Multiple commercial developments are going up throughout the Rogue Valley. National tenants such as Cracker Barrel often lease buildings from local developers. "We get involved with the local developer, providing the construction loan and then the long-term loan," Trautman said. "There is a positive feeling when people look over the market and see what's happening here. We have low unemployment and a nonexistent vacancy rate; it's a very nice market right now." Business lending to support an expanding economy requires capital. The last time People's Bank raised capital with an offering was 2013, and while another one isn't on the docket, it's not out of the question in the present climate. "We're still living off the prior one," Trautman said. "If you've got moderate growth in your earnings you should be able to support your overall growth. If we had a couple of phenomenal years where we are seeing growth at the same level as now, then we won't have enough capital and we will go out for more." In the past year, the bank has seen some of its customers outgrow its capability, refinancing $15 million worth of loans with larger institutions. "We've had more payoffs than ever when they refinanced for a substantially lower rate, where we couldn't compete," Trautman said. "We can't do much more than $5 million without another bank joining in with us, but in this market there aren't many deals over $5.5 million." — Reach reporter Greg Stiles at 541-776-4463 or [email protected]. Follow him on Twitter at www.twitter.com/GregMTBusiness, on Facebook at www.facebook.com/greg.stiles.31.