PEOPLES BANCORP INC. – P.O. BOX 738 - MARIETTA, OHIO – 45750www.peoplesbancorp.com
NEWS RELEASE
| FOR IMMEDIATE RELEASE | Contact: | Edward G. Sloane |
| October 23, 2008 | Chief Financial Officer and Treasurer | |
| (740) 373-3155 |
PEOPLES BANCORP INC. ANNOUNCES
THIRD QUARTER EARNINGS
_____________________________________________________________________
MARIETTA, Ohio - Peoples Bancorp Inc. (“Peoples”) (NASDAQ: PEBO) today announced third quarter 2008 net income of $3.0 million, or $0.28 per diluted share. This compares to $2.0 million, or $0.19 per diluted share, last quarter and $5.1 million, or $0.49 per diluted share, for the third quarter of 2007. On a year-to-date basis, net income totaled $10.6 million and diluted earnings per share were $1.02, versus $16.1 million and $1.52, respectively, for the same period in 2007. In the third quarter of 2008, provision for loan losses was $6.0 million compared to $6.8 million last quarter and $1.0 million in the third quarter of 2007. On a year-to-date basis, Peoples’ provision for loan losses totaled $14.2 million versus $2.4 million a year ago.
“Like many financial services companies, our third quarter results were negatively affected by the impact of the struggling economy and weakened commercial real estate market,” said Mark F. Bradley, President and Chief Executive Officer. “While these conditions produced a higher loan loss provision, third quarter earnings benefited from a stable net interest margin, diversified revenue growth, controlled expense growth and a lower effective tax rate. Over the last several months, we have taken steps to preserve and enhance Peoples’ healthy capital position and liquidity levels in light of this difficult credit cycle.”
Bradley continued, “During the third quarter, we downgraded the loan quality ratings of certain commercial real estate loans as part of our normal loan review process, which was the major driver of the increased loan loss provision compared to last year. These downgrades were caused by deterioration in the borrowers’ financial condition from the weakened real estate market, and economy as a whole, and resulted in certain loans being placed on nonaccrual status.”
The provision for loan losses resulted from management’s quarterly evaluation of the loan portfolio and procedural methodology that estimates the amount of credit losses probable within the loan portfolio based on several factors, such as changes in loss trends, risk ratings, and current economic conditions.
At September 30, 2008, nonperforming loans totaled $35.7 million, or 3.21% of total loans, up from $21.2 million, or 1.92%, at June 30, 2008, and $9.4 million, or 0.83% at December 31, 2007. The third quarter increase was attributable to downgrades of three commercial real estate loan relationships, totaling $14.4 million, which increased nonaccrual loans. These loans are secured primarily by real estate in Ohio, with some collateral located in Indiana. The remaining increase since year-end 2007 was the result of two large commercial real estate loans, with balances of $7.0 million and $6.2 million, being placed on nonaccrual status in the first and second quarter of 2008, respectively.
“Despite recent market events, we believe our nonperforming loans are manageable, given our ongoing communication with the borrowers and actions intended to minimize losses,” said Edward G. Sloane, Chief Financial Officer. “Our consumer loan quality, including our residential real estate loans, remains sound, with delinquency levels and losses comparable to those experienced during the last several quarters. The steps taken in the third quarter have bolstered our loan loss reserves and we continually monitor the entire loan portfolio closely for signs of credit deterioration.”
The allowance for loan losses grew to $19.2 million, or 1.72% of total loans, at September 30, 2008, from $15.2 million, or 1.38%, at the prior quarter-end and $15.7 million, or 1.40%, at year-end 2007. The increase in the allowance for loan losses reflects the impact of commercial real estate loan downgrades on management’s estimate of losses within the portfolio. Management appropriately considered all loans in establishing the allowance for loan losses for each period and believes the allowance was adequate at September 30, 2008, based on all information currently available.
Third quarter 2008 net loan charge-offs were $2.1 million, or 0.74% of average loans on an annualized basis, down from $7.5 million, or 2.70%, in the second quarter of 2008, due to the $6.4 million charge-off of a single impaired commercial real estate loan in the second quarter. Net charge-offs were $1.0 million, or 0.36%, for the third quarter of 2007. The increase in 2008 was attributable to a third quarter $1.1 million charge-off of one of the previously mentioned nonaccrual loan relationships. Net loan charge-offs totaled $10.8 million through nine months of 2008, versus $2.3 million a year ago.
PEOPLES BANCORP INC.
Third Quarter 2008 Earnings Release
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Despite the increased level of losses recognized in 2008 compared to prior years, the capital position of Peoples and its banking subsidiary have remained strong and well above amounts needed to be considered well-capitalized by banking regulations. At September 30, 2008, Peoples’ Tier 1 and Total Risk-Based capital ratios were 12.35% and 13.68%, respectively, while the ratio of tangible equity to tangible assets was 7.03%. These strong capital positions have allowed Peoples to increase dividends declared to shareholders. In the third quarter of 2008, Peoples declared a cash dividend of $0.23 per share, up 4.5% from the $0.22 per share declared for third quarter of 2007. Through nine months of 2008, Peoples has declared dividends of $0.68 per share in 2008 versus $0.66 per share declared through the same period of 2007, resulting in a dividend payout ratio of 67.0% of net income in 2008 versus 43.1% a year ago. Based on current capital levels, management anticipates continuation of quarterly dividend payments.
During 2008, Peoples has systematically sold the preferred stock issued by the Federal National Mortgage Association (“Fannie Mae”), and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) held in its investment portfolio, due to the uncertainty surrounding these entities. In the third quarter of 2008, Peoples completely eliminated all holdings of these preferred stocks and recognized a pre-tax loss of $594,000 ($386,000 after-tax). Peoples also recognized a pre-tax gain of $479,000 ($311,000 after-tax) from the sale of various investment securities, primarily obligations of U.S. government-sponsored enterprises and tax-exempt municipal bonds, with a recorded value of $21.4 million as part of management’s ongoing efforts to reduce credit and interest rate exposures in Peoples’ investment portfolio.
In the third quarter of 2008, net interest income increased 11% to $14.6 million and the net interest margin expanded 24 basis points to 3.50% compared to the prior year third quarter. These improvements were attributable to Peoples’ funding costs declining more than asset yields, due to lower short-term market rates and wider credit spreads. Third quarter net interest income and margin also benefited from retail deposit growth in 2008, which has allowed Peoples to reduce its amount of higher-cost wholesale funding. As a result, Peoples’ third quarter cost of funds dropped 103 basis points year-over-year to 3.01%, while asset yields declined only 69 basis points to 6.15%. Compared to the second quarter of 2008, net interest income decreased 2% and net interest margin compressed 11 basis points, due to the combination of an increased level of nonaccrual loans recognized during the third quarter and higher loan prepayment fees earned during the second quarter. Through nine months of 2008, net interest income has grown 9% compared to the same period last year and net interest margin was 3.54% versus 3.29%. On a year-to-date basis, the average cost of funds decreased 81 basis points, outpacing the 49 basis point decline in asset yields.
Peoples’ reported net interest income and margin include loan prepayment fees, interest reductions for loans placed on nonaccrual status and interest collected on nonaccrual loans. The net impact of these items was a $241,000 reduction in income, or five basis points of margin, in the third quarter of 2008, compared to $5,000 of additional income in the third quarter of 2007 and $226,000 of additional income, or five basis points, in the second quarter of 2008.
“As expected, our third quarter net interest income and margin were pressured by some assets repricing downward and limited additional opportunities to lower funding costs,” said Sloane. “In addition, we experienced lower loan prepayment fees and an increase in nonaccrual loans in the third quarter, which combined to reduce asset yields compared to the first half of 2008. Current interest rate conditions may continue to put pressure on net interest income and margin. Still, we are continuing to manage our balance sheet position to optimize Peoples’ net interest income stream, while also minimizing the impact of future rate changes on our earnings.”
Third quarter non-interest income increased 6% over the prior year, totaling $8.2 million in 2008 versus $7.7 million in 2007. The largest gains occurred in Peoples’ insurance revenues, deposit account service charges, and electronic banking (“e-banking”) income, while mortgage banking income declined. Compared to the second quarter of 2008, increases in deposit account service charges and insurance income were partially offset by lower trust and investment income, resulting in a total non-interest income increase of 3% in the third quarter of 2008. Through nine months of 2008, total non-interest income was $24.3 million compared to $23.7 million through nine months of 2007, with the increase primarily attributable to debit card revenues and trust and investment income.
“Non-interest revenues remain a major component of our earnings stream,” said Sloane. “While we managed to grow these revenues during the third quarter, our efforts are challenged by the generally lower market value of investments due to the current state of the financial markets and economy, considering a portion of our fiduciary and brokerage revenues is based on the value of managed assets.”
Peoples has enhanced insurance revenues despite tighter pricing margins within the insurance industry caused by insurance companies reducing property and casualty insurance premiums in an effort to attract market share. Deposit account service charges grew during the third quarter of 2008 as the result of increased checking account overdraft activity. Peoples’ efforts to attract new trust business over the last several quarters have tempered the reduction in revenues caused by the lower market value of managed assets from the downturn in the financial markets.
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Third Quarter 2008 Earnings Release
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Non-interest expense totaled $13.2 million for the third quarter of 2008, up 5% from a year ago, and totaled $40.0 million through nine months of 2008 versus $39.1 million for the nine months ended September 30, 2007. These increases were primarily attributable to higher salary and benefit costs and increased net occupancy and equipment expense. Salary and benefit costs, Peoples’ largest non-interest expense, were up year-over-year due to the combination of normal annual merit increases and higher employee medical benefit costs, while modest increases in property taxes and utility costs during 2008 were key drivers of higher net occupancy and equipment expense. On a linked quarter basis, non-interest expense growth was contained, as modest increases in salary and benefit costs, e-banking expense and professional fees were partially offset by reduced marketing expenditures and lower depreciation expense from assets becoming fully depreciated.
“Overall, we believe third quarter expense levels were reasonable, even though total expense was higher than a year ago,” said Sloane. “Still, we continue to implement measures to reduce expenses and gain operating efficiencies, while also preparing Peoples for possible future disciplined expansion through establishing new sales offices.”
For the nine months ended September 30, 2008, Peoples’ effective tax rate was 23.1%, which represents management’s current estimate for the full year 2008 and a decrease from 26.0% in the first half of 2008 and 25.8% through nine months of 2007. The lower projected effective tax rate is due mainly to a greater utilization of estimated tax credits. In addition, income from tax-exempt sources is expected to comprise a larger portion of Peoples’ 2008 pre-tax income, which further decreased the projected effective tax rate.
At September 30, 2008, total portfolio loan balances were $1.11 billion, up $8.8 million for the quarter. Construction loan balances grew $17.7 million, due mostly to advances on existing commercial construction loans, while commercial and commercial mortgage loan balances declined a combined $12.6 million. Peoples also experienced modest increases in consumer and home equity loan balances. Since year-end 2007, total portfolio loan balances were down $7.3 million at quarter-end, due to commercial loan payoffs offsetting new production and the impact of charge-offs in 2008. Peoples’ serviced real estate loan portfolio totaled $180.4 million at September 30, 2008, down slightly from $182.3 million at June 30, 2008, but up versus $176.7 million at December 31, 2007.
During the third quarter of 2008, total retail deposit balances, which exclude brokered deposits, were essentially unchanged from $1.24 billion at June 30, 2008, as an $8.4 million increase in interest-bearing balances was offset by an $8.8 million decline in non-interest-bearing balances. For the quarter, retail certificates of deposit (“CDs”) balances grew $5.7 million, while money market and savings balances grew $3.1 and $2.1 million, respectively. The growth in retail interest-bearing deposits was tempered by a single commercial customer transferring approximately $14 million of money market deposits to an overnight repurchase agreement. The decline in non-interest-bearing deposits was largely attributable to lower commercial balances at September 30, 2008, although consumer balances saw a modest decrease during the quarter. Since year-end 2007, total retail balances have increased $114.1 million, or 10%, due mostly to higher interest-bearing retail balances from Peoples attracting nearly $70 million of funds from customers outside its primary market area instead of using higher-cost brokered deposits. The retail deposit growth during 2008 has allowed Peoples to reduce higher rate brokered certificates of deposit balances by $49.6 million and contributed to the $20.5 million reduction in borrowed funds since year-end 2007.
“Overall, we saw several positives in the third quarter results, despite lower net income caused by the ongoing credit challenges in the loan portfolio,” summarized Bradley. “Our core earnings stream remains strong, driven by stable net interest margin, diversified revenue growth, controlled operating expenses and retail deposit growth. Our capital and liquidity levels continue to be healthy and a source of strength during this challenging economic cycle.”
Peoples Bancorp Inc. is a diversified financial products and services company with $1.9 billion in assets, 49 locations and 38 ATMs in Ohio, West Virginia and Kentucky. Peoples makes available a complete line of banking, investment, insurance, and trust solutions through its financial service units – Peoples Bank, National Association; Peoples Financial Advisors (a division of Peoples Bank); and Peoples Insurance Agency, Inc. Peoples’ common shares are traded on the NASDAQ Global Select Market under the symbol “PEBO”, and Peoples is a member of the Russell 3000 index of US publicly traded companies. Learn more about Peoples at www.peoplesbancorp.com.
Conference Call to Discuss Earnings:
Peoples will conduct a facilitated conference call to discuss third quarter 2008 results of operations today at 11:00 a.m. Eastern Daylight Time, with members of Peoples’ executive management participating. Analysts, media and individual investors are invited to participate in the conference call by calling (800) 860-2442. A simultaneous Webcast of the conference call audio will be available online via the “Investor Relations” section of Peoples’ website, www.peoplesbancorp.com. Participants are encouraged to call or sign in at least 15 minutes prior to the scheduled conference call time to ensure participation and, if required, to download and install the necessary software. A replay of the call will be available on Peoples’ website in the “Investor Relations” section for one year.
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Third Quarter 2008 Earnings Release
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Safe Harbor Statement:
This news release may contain certain forward-looking statements with respect to Peoples’ financial condition, results of operations, plans, objectives, future performance and business. Except for the historical and present factual information contained in this news release, the matters discussed in this news release, and other statements identified by words such as “estimate”, “anticipate”, “feel,” “expect,” “believe,” “plan,” “will,” “would,” “should,” “could” and similar expressions are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. Factors that might cause such a difference include, but are not limited to: (1) deterioration in the credit quality of Peoples’ loan portfolio could occur due to a number of factors, such as adverse changes in economic conditions that impair the ability of borrowers to repay their loans, the underlying value of the collateral could prove less valuable than otherwise assumed and assumed cash flows may be less favorable than expected, which may adversely impact the provision for loan losses; (2) competitive pressures among financial institutions or from non-financial institutions, which may increase significantly; (3) changes in the interest rate environment, which may adversely impact interest margins; (4) changes in prepayment speeds, loan originations, and charge-offs, which may be less favorable than expected and adversely impact the amount of interest income generated; (5) general economic conditions and weakening in the economy, specifically the real estate market, either national or in the states in which Peoples does business, which may be less favorable than expected; (6) political developments, wars or other hostilities, which may disrupt or increase volatility in securities markets or other economic conditions; (7) legislative or regulatory changes or actions, which may adversely affect the business of Peoples; (8) adverse changes in the conditions and trends in the financial markets, which may adversely affect the fair value of securities within Peoples’ investment portfolio; (9) a delayed or incomplete resolution of regulatory issues that could arise; (10) Peoples’ ability to receive dividends from its subsidiaries; (11) changes in accounting standards, policies, estimates or procedures, which may impact Peoples’ reported financial condition or results of operations; (12) Peoples’ ability to maintain required capital levels and adequate sources of funding and liquidity; (13) the impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity; (14) the costs and effects of regulatory and legal developments, including the outcome of regulatory or other governmental inquiries and legal proceedings and results of regulatory examinations; and (15) other risk factors relating to the banking industry or Peoples as detailed from time to time in Peoples’ reports filed with the Securities and Exchange Commission (“SEC”), including those risk factors included in the disclosures under the heading “ITEM 1A. RISK FACTORS” of Peoples’ Annual Report on Form 10-K for the fiscal year ended December 31, 2007. Peoples undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect the occurrence of unanticipated events, except as required by applicable legal requirements. Copies of documents filed with the SEC are available free of charge at the SEC’s website at http://www.sec.gov and/or from Peoples’ website.
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Third Quarter 2008 Earnings Release
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PEOPLES BANCORP INC. (NASDAQ: PEBO)
PER SHARE DATA AND PERFORMANCE RATIOS
| Three Months Ended | Nine Months Ended | ||||||||
| September 30, | June 30, | September 30, | September 30, | ||||||
| (in $000’s, except per share data) | 2008 | 2008 | 2007 | 2008 | 2007 | ||||
| Net income per share: | |||||||||
| Basic | $ 0.29 | $ 0.19 | $ 0.49 | $ 1.02 | $ 1.53 | ||||
| Diluted | $ 0.28 | $ 0.19 | $ 0.49 | $ 1.02 | $ 1.52 | ||||
| Cash dividends declared per share | $ 0.23 | $ 0.23 | $ 0.22 | $ 0.68 | $ 0.66 | ||||
| Book value per share | $ 19.09 | $ 19.55 | $ 19.25 | $ 19.09 | $ 19.25 | ||||
| Tangible book value per share (a) | $ 12.62 | $ 13.03 | $ 12.63 | $ 12.62 | $ 12.63 | ||||
| Closing stock price at end of period | $ 21.77 | $ 18.98 | $ 26.18 | $ 21.77 | $ 26.18 | ||||
| Dividend payout as a percentage of net income | 81.23% | 122.38% | 44.83% | 67.02% | 43.10% | ||||
| Return on average equity (b) | 5.82% | 3.81% | 10.27% | 6.88% | 10.88% | ||||
| Return on average assets (b) | 0.61% | 0.41% | 1.09% | 0.74% | 1.15% | ||||
| Efficiency ratio (c) | 55.33% | 54.55% | 57.03% | 55.98% | 58.06% | ||||
| Net interest margin (fully tax-equivalent) (b) | 3.50% | 3.61% | 3.26% | 3.54% | 3.29% | ||||
| (a) | Excludes the balance sheet impact of intangible assets acquired through acquisitions. |
| (b) | Ratios are presented on an annualized basis. |
| (c) | Non-interest expense (less intangible amortization) as a percentage of fully tax-equivalent net interest income plus non-interest income (less securities and asset disposal gains/losses) |
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Third Quarter 2008 Earnings Release
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PEOPLES BANCORP INC. CONSOLIDATED STATEMENTS OF INCOME
| Three Months Ended | Nine Months Ended | ||||||
| September 30, | September 30, | ||||||
| (in $000’s) | 2008 | 2007 | 2008 | 2007 | |||
| Interest income | $ 26,063 | $ 28,241 | $ 79,910 | $ 84,681 | |||
| Interest expense | 11,461 | 15,089 | 36,148 | 44,675 | |||
| Net interest income | 14,602 | 13,152 | 43,762 | 40,006 | |||
| Provision for loan losses | 5,996 | 967 | 14,198 | 2,437 | |||
| Net interest income after provision for loan losses | 8,606 | 12,185 | 29,564 | 37,569 | |||
| Net (loss) on securities transactions | (111) | (613) | (126) | (575) | |||
| Net (loss) gain on asset disposals | (14) | 42 | (11) | 76 | |||
| Non-interest income: | |||||||
| Deposit account service charges | 2,761 | 2,562 | 7,431 | 7,375 | |||
| Insurance income | 2,439 | 2,230 | 7,701 | 7,657 | |||
| Trust and investment income | 1,266 | 1,211 | 3,915 | 3,639 | |||
| Electronic banking income | 994 | 879 | 2,925 | 2,607 | |||
| Bank owned life insurance | 391 | 418 | 1,220 | 1,237 | |||
| Mortgage banking income | 104 | 251 | 500 | 722 | |||
| Other | 201 | 143 | 581 | 491 | |||
| Total non-interest income | 8,156 | 7,694 | 24,273 | 23,728 | |||
| Non-interest expense: | |||||||
| Salaries and benefits | 7,035 | 6,603 | 21,501 | 20,770 | |||
| Net occupancy and equipment | 1,344 | 1,233 | 4,169 | 3,917 | |||
| Electronic banking expense | 638 | 554 | 1,678 | 1,568 | |||
| Professional fees | 528 | 469 | 1,594 | 1,714 | |||
| Data processing and software | 521 | 530 | 1,622 | 1,594 | |||
| Franchise taxes | 416 | 449 | 1,248 | 1,336 | |||
| Amortization of intangible assets | 390 | 478 | 1,208 | 1,467 | |||
| Marketing | 273 | 350 | 1,010 | 1,078 | |||
| Other | 2,048 | 1,933 | 5,949 | 5,647 | |||
| Total non-interest expense | 13,193 | 12,599 | 39,979 | 39,091 | |||
| Income before income taxes | 3,444 | 6,709 | 13,721 | 21,707 | |||
| Income tax expense | 493 | 1,594 | 3,169 | 5,597 | |||
| Net income | $ 2,951 | $ 5,115 | $ 10,552 | $ 16,110 | |||
| Net income per share: | |||||||
| Basic | $ 0.29 | $ 0.49 | $ 1.02 | $ 1.53 | |||
| Diluted | $ 0.28 | $ 0.49 | $ 1.02 | $ 1.52 | |||
| Cash dividends declared per share | $ 0.23 | $ 0.22 | $ 0.68 | $ 0.66 | |||
| Weighted average shares outstanding: | |||||||
| Basic | 10,319,534 | 10,421,548 | 10,309,010 | 10,502,866 | |||
| Diluted | 10,354,522 | 10,483,657 | 10,350,008 | 10,573,934 | |||
| Actual shares outstanding (end of period) | 10,324,573 | 10,363,397 | 10,324,573 | 10,363,397 | |||
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Third Quarter 2008 Earnings Release
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PEOPLES BANCORP INC. CONSOLIDATED BALANCE SHEETS
| September 30, | December 31, | ||
| (in $000’s) | 2008 | 2007 | |
| ASSETS | |||
| Cash and cash equivalents: | |||
| Cash and due from banks | $ 38,311 | $ 43,275 | |
| Interest-bearing deposits in other banks | 1,247 | 1,925 | |
| Total cash and cash equivalents | 39,558 | 45,200 | |
| Available-for-sale investment securities, at fair value (amortized cost of $598,355 | |||
| at September 30, 2008 and $535,979 at December 31, 2007) | 589,017 | 542,231 | |
| Other investment securities, at cost | 23,996 | 23,232 | |
| Total investment securities | 613,013 | 565,463 | |
| Loans, net of unearned interest | 1,113,610 | 1,120,941 | |
| Allowance for loan losses | (19,156) | (15,718) | |
| Net loans | 1,094,454 | 1,105,223 | |
| Loans held for sale | 1,069 | 1,994 | |
| Bank premises and equipment, net of accumulated depreciation | 25,283 | 24,803 | |
| Bank owned life insurance | 51,511 | 50,291 | |
| Goodwill | 62,520 | 62,520 | |
| Other intangible assets | 4,268 | 5,509 | |
| Other assets | 28,712 | 24,550 | |
| TOTAL ASSETS | $ 1,920,388 | $ 1,885,553 | |
| LIABILITIES | |||
| Non-interest-bearing deposits | $ 184,474 | $ 175,057 | |
| Interest-bearing deposits | 1,066,383 | 1,011,320 | |
| Total deposits | 1,250,857 | 1,186,377 | |
| Federal funds purchased, securities sold under repurchase agreements, | |||
| and other short-term borrowings | 140,461 | 222,541 | |
| Long-term borrowings | 293,565 | 231,979 | |
| Junior subordinated notes held by subsidiary trusts | 22,487 | 22,460 | |
| Accrued expenses and other liabilities | 15,924 | 19,360 | |
| TOTAL LIABILITIES | 1,723,294 | 1,682,717 | |
| STOCKHOLDERS’ EQUITY | |||
| Common stock, no par value (24,000,000 shares authorized, 10,963,199 shares | |||
| issued at September 30, 2008, and 10,925,954 shares issued at December 31, 2007) | 164,457 | 163,399 | |
| Retained earnings | 56,007 | 52,527 | |
| Accumulated comprehensive (loss) income, net of deferred income taxes | (7,113) | 3,014 | |
| Treasury stock, at cost (638,626 shares at September 30, 2008, and | |||
| 629,206 shares at December 31, 2007) | (16,257) | (16,104) | |
| TOTAL STOCKHOLDERS’ EQUITY | 197,094 | 202,836 | |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 1,920,388 | $ 1,885,553 | |
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PEOPLES BANCORP INC. SELECTED FINANCIAL INFORMATION
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||
| (in $000’s, end of period) | 2008 | 2008 | 2008 | 2007 | 2007 | ||||
| LOAN PORTFOLIO | |||||||||
| Commercial, mortgage | $ 490,978 | $ 499,043 | $ 498,426 | $ 513,847 | $ 481,341 | ||||
| Commercial, other | 181,783 | 186,346 | 180,523 | 171,937 | 174,753 | ||||
| Real estate, construction | 70,899 | 53,170 | 72,326 | 71,794 | 83,714 | ||||
| Real estate, mortgage | 234,823 | 234,870 | 237,366 | 237,641 | 240,599 | ||||
| Home equity lines of credit | 46,909 | 44,595 | 43,101 | 42,706 | 43,506 | ||||
| Consumer | 85,983 | 83,605 | 81,108 | 80,544 | 80,661 | ||||
| Deposit account overdrafts | 2,235 | 3,223 | 2,879 | 2,472 | 2,047 | ||||
| Total loans | 1,113,610 | 1,104,852 | 1,115,729 | 1,120,941 | 1,106,621 | ||||
| DEPOSIT BALANCES | |||||||||
| Interest-bearing deposits: | |||||||||
| Retail certificates of deposit | $ 563,124 | $ 557,406 | $ 549,439 | $ 499,684 | $ 515,432 | ||||
| Interest-bearing transaction accounts | 199,534 | 202,063 | 211,708 | 191,359 | 178,880 | ||||
| Money market deposit accounts | 175,120 | 172,048 | 156,206 | 153,299 | 147,848 | ||||
| Savings accounts | 118,634 | 116,485 | 114,433 | 107,389 | 112,507 | ||||
| Total retail interest-bearing deposits | 1,056,412 | 1,048,002 | 1,031,786 | 951,731 | 954,667 | ||||
| Brokered certificates of deposits | 9,971 | 39,781 | 39,756 | 59,589 | 57,507 | ||||
| Total interest-bearing deposits | 1,066,383 | 1,087,783 | 1,071,542 | 1,011,320 | 1,012,174 | ||||
| Non-interest-bearing deposits | 184,474 | 193,265 | 177,449 | 175,057 | 171,319 | ||||
| Total deposits | 1,250,857 | 1,281,048 | 1,248,991 | 1,186,377 | 1,183,493 | ||||
| ASSET QUALITY | |||||||||
| Nonperforming assets: | |||||||||
| Loans 90 days or more past due | $ 1,852 | $ 290 | $ 438 | $ 378 | $ 190 | ||||
| Nonaccrual loans | 33,896 | 20,910 | 17,061 | 8,980 | 5,979 | ||||
| Total nonperforming loans | 35,748 | 21,200 | 17,499 | 9,358 | 6,169 | ||||
| Other real estate owned | 260 | 411 | 343 | 343 | 343 | ||||
| Total nonperforming assets | $ 36,008 | $ 21,611 | $ 17,842 | $ 9,701 | $ 6,512 | ||||
| Allowance for loan losses as a percent of | |||||||||
| nonperforming loans | 53.6% | 71.8% | 91.2% | 168.0% | 237.3% | ||||
| Nonperforming loans as a percent of total loans | 3.21% | 1.92% | 1.57% | 0.83% | 0.56% | ||||
| Nonperforming assets as a percent of total assets | 1.88% | 1.13% | 0.94% | 0.51% | 0.34% | ||||
| Nonperforming assets as a percent of total loans and | |||||||||
| other real estate owned | 3.23% | 1.96% | 1.60% | 0.87% | 0.59% | ||||
| Allowance for loan losses as a percent of total loans | 1.72% | 1.38% | 1.43% | 1.40% | 1.32% | ||||
| CAPITAL INFORMATION(a) | |||||||||
| Tier 1 risk-based capital | 12.35% | 12.10% | 12.12% | 11.91% | 11.82% | ||||
| Total risk-based capital ratio (Tier 1 and Tier 2) | 13.68% | 13.33% | 13.43% | 13.23% | 13.04% | ||||
| Leverage ratio | 8.66% | 8.72% | 8.81% | 8.48% | 8.67% | ||||
| Tier 1 capital | $ 160,556 | $ 159,242 | $ 158,919 | $ 154,933 | $ 156,209 | ||||
| Total capital (Tier 1 and Tier 2) | $ 177,823 | $ 175,397 | $ 176,083 | $ 172,117 | $ 172,263 | ||||
| Total risk-weighted assets | $ 1,299,711 | $ 1,316,021 | $ 1,310,895 | $ 1,301,056 | $ 1,321,367 | ||||
| Tangible equity to tangible assets (b) | 7.03% | 7.30% | 7.67% | 7.42% | 7.20% | ||||
(a) September 30, 2008 data based on preliminary analysis and subject to revision.
(b) Excludes balance sheet impact of intangible assets acquired through acquisitions on both total stockholders’ equity and total assets.
PEOPLES BANCORP INC.
Third Quarter 2008 Earnings Release
- Page 9 of 11 -
PEOPLES BANCORP INC. PROVISION FOR LOAN LOSSES INFORMATION
| Three Months Ended | Nine Months Ended | ||||||||
| September 30, | June 30, | September 30, | September 30, | ||||||
| (in $000’s) | 2008 | 2008 | 2007 | 2008 | 2007 | ||||
| PROVISION FOR LOAN LOSSES | |||||||||
| Provision for Overdraft Privilege losses | $ 421 | $ 160 | $ 227 | $ 618 | $ 386 | ||||
| Provision for other loan losses | $ 5,575 | $ 6,605 | $ 740 | $ 13,580 | $ 2,051 | ||||
| Total provision for loan losses | $ 5,996 | $ 6,765 | $ 967 | $ 14,198 | $ 2,437 | ||||
| NET CHARGE-OFFS | |||||||||
| Gross charge-offs | $ 2,510 | $ 7,720 | $ 1,251 | $ 11,868 | $ 3,861 | ||||
| Recoveries | 441 | 231 | 233 | 1,108 | 1,556 | ||||
| Net charge-offs | $ 2,069 | $ 7,489 | $ 1,018 | $ 10,760 | $ 2,305 | ||||
| NET CHARGE-OFFS BY TYPE | |||||||||
| Commercial | $ 1,428 | $ 6,900 | $ 472 | $ 9,190 | $ 1,283 | ||||
| Real estate | 140 | 294 | 232 | 594 | 231 | ||||
| Overdrafts | 341 | 148 | 207 | 576 | 392 | ||||
| Consumer | 161 | 148 | 107 | 410 | 404 | ||||
| Credit card | (1) | (1) | - | (10) | (5) | ||||
| Total net charge-offs | $ 2,069 | $ 7,489 | $ 1,018 | $ 10,760 | $ 2,305 | ||||
| Net charge-offs as a percent of loans (annualized) | 0.74% | 2.70% | 0.36% | 1.29% | 0.27% | ||||
PEOPLES BANCORP INC. SUPPLEMENTAL INFORMATION
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||
| (in $000’s, end of period) | 2008 | 2008 | 2008 | 2007 | 2007 | ||||
| Trust assets under management | $ 734,483 | $ 770,714 | $ 775,834 | $ 797,443 | $ 805,931 | ||||
| Brokerage assets under management | $ 207,284 | $ 216,930 | $ 221,340 | $ 223,950 | $ 218,573 | ||||
| Mortgage loans serviced for others | $ 180,441 | $ 182,299 | $ 178,763 | $ 176,742 | $ 176,380 | ||||
| Employees (full-time equivalent) | 545 | 554 | 556 | 559 | 553 | ||||
| Announced treasury share plans: (a) | |||||||||
| Total shares authorized for plan | 500,000 | 500,000 | 500,000 | 925,000 | 425,000 | ||||
| Shares purchased | - | - | 13,600 | 84,600 | 139,000 | ||||
| Average price | $ - | $ - | $ 21.59 | $ 24.25 | $ 24.05 |
(a) 2008 data reflects shares purchased under the repurchase plan announced on November 9, 2007, authorizing the repurchase of up to 500,000
common shares, upon the completion of the 2007 Stock Repurchase Program. 2007 data reflects shares purchased under the repurchase plan
announced on November 9, 2007, and under the 2007 Stock Repurchase Program announced on January 12, 2007, authorizing the repurchase of
up to 425,000 common shares. The number of common shares purchased for treasury and average price paid are presented for the three-month
period ended on the date indicated.
PEOPLES BANCORP INC.
Third Quarter 2008 Earnings Release
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PEOPLES BANCORP INC. CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST INCOME
| Three Months Ended | |||||||||||
| September 30, 2008 | June 30, 2008 | September 30, 2007 | |||||||||
| (in $000’s) | Balance | Income/ Expense | Yield/ Cost | Balance | Income/ Expense | Yield/ Cost | Balance | Income/ Expense | Yield/ Cost | ||
| ASSETS | |||||||||||
| Short-term investments | $ 2,640 | $ 12 | 1.87% | $ 3,391 | $ 17 | 2.17% | $ 4,035 | $ 50 | 4.91% | ||
| Investment securities (a) | 620,475 | 8,381 | 5.40% | 598,111 | 7,991 | 5.35% | 571,632 | 7,590 | 5.31% | ||
| Gross loans (a) | 1,109,478 | 18,052 | 6.45% | 1,114,474 | 18,954 | 6.81% | 1,105,592 | 21,008 | 7.55% | ||
| Allowance for loan losses | (16,554) | (16,243) | (14,662) | ||||||||
| Total earning assets | 1,716,039 | 26,445 | 6.15% | 1,699,733 | 26,962 | 6.36% | 1,666,597 | 28,648 | 6.84% | ||
| Intangible assets | 67,006 | 67,395 | 68,754 | ||||||||
| Other assets | 130,991 | 127,190 | 129,015 | ||||||||
| Total assets | 1,914,036 | 1,894,318 | 1,864,366 | ||||||||
| LIABILITIES AND EQUITY | |||||||||||
| Interest-bearing deposits: | |||||||||||
| Savings | 117,590 | 155 | 0.52% | 115,625 | 140 | 0.49% | 113,740 | 190 | 0.66% | ||
| Interest-bearing demand deposits | 202,402 | 900 | 1.77% | 203,411 | 890 | 1.76% | 181,352 | 1,048 | 2.29% | ||
| Money market | 176,510 | 852 | 1.92% | 165,592 | 816 | 1.98% | 149,753 | 1,463 | 3.88% | ||
| Brokered time | 23,716 | 291 | 4.88% | 39,767 | 509 | 5.15% | 64,518 | 827 | 5.09% | ||
| Retail time | 560,463 | 5,260 | 3.73% | 549,642 | 5,426 | 3.97% | 519,063 | 5,919 | 4.52% | ||
| Total interest-bearing deposits | 1,080,681 | 7,458 | 2.75% | 1,074,037 | 7,781 | 2.91% | 1,028,426 | 9,447 | 3.64% | ||
| Short-term borrowings | 133,511 | 689 | 2.02% | 148,854 | 778 | 2.07% | 232,586 | 2,975 | 5.03% | ||
| Long-term borrowings | 297,901 | 3,314 | 4.38% | 270,746 | 3,115 | 4.58% | 217,440 | 2,667 | 4.89% | ||
| Total borrowed funds | 431,412 | 4,003 | 3.65% | 419,600 | 3,893 | 3.69% | 450,026 | 5,642 | 4.92% | ||
| Total interest-bearing liabilities | 1,512,093 | 11,461 | 3.01% | 1,493,637 | 11,674 | 3.13% | 1,478,452 | 15,089 | 4.03% | ||
| Non-interest-bearing deposits | 186,412 | 180,399 | 172,164 | ||||||||
| Other liabilities | 13,729 | 14,214 | 16,125 | ||||||||
| Total liabilities | 1,712,234 | 1,688,250 | 1,666,741 | ||||||||
| Stockholders’ equity | 201,802 | 206,068 | 197,625 | ||||||||
| Total liabilities and equity | $ 1,914,036 | $1,894,318 | $1,864,366 | ||||||||
| Net interest income/spread (a) | $ 14,984 | 3.14% | $ 15,288 | 3.23% | $13,559 | 2.81% | |||||
| Net interest margin (a) | 3.50% | 3.61% | 3.26% | ||||||||
| (a) Information presented on a fully tax-equivalent basis. | |||||||||||
PEOPLES BANCORP INC.
Third Quarter 2008 Earnings Release
- Page 11 of 11 -
| Nine Months Ended | |||||||||
| September 30, 2008 | September 30, 2007 | ||||||||
| (in $000’s) | Balance | Income/ Expense | Yield/ Cost | Balance | Income/ Expense | Yield/ Cost | |||
| ASSETS | |||||||||
| Short-term investments | $ 3,346 | $ 61 | 2.47% | $ 3,808 | $ 139 | 4.89% | |||
| Investment securities (a) | 600,149 | 24,183 | 5.37% | 557,225 | 21,689 | 5.19% | |||
| Gross loans (a) | 1,112,315 | 56,885 | 6.80% | 1,121,801 | 63,917 | 7.61% | |||
| Allowance for loan losses | (16,346) | (14,683) | |||||||
| Total earning assets | 1,699,464 | 81,129 | 6.37% | 1,668,151 | 85,745 | 6.86% | |||
| Intangible assets | 67,409 | 68,496 | |||||||
| Other assets | 128,170 | 128,645 | |||||||
| Total assets | 1,895,043 | 1,865,292 | |||||||
| LIABILITIES AND EQUITY | |||||||||
| Interest-bearing deposits: | |||||||||
| Savings | 113,927 | 416 | 0.49% | 115,006 | 544 | 0.63% | |||
| Interest-bearing demand deposits | 201,275 | 2,772 | 1.84% | 178,002 | 2,804 | 2.11% | |||
| Money market | 164,811 | 2,727 | 2.21% | 146,211 | 4,282 | 3.92% | |||
| Brokered time | 38,883 | 1,496 | 5.14% | 67,536 | 2,591 | 5.13% | |||
| Retail time | 544,736 | 16,293 | 4.00% | 526,726 | 17,700 | 4.49% | |||
| Total interest-bearing deposits | 1,063,632 | 23,704 | 2.98% | 1,033,481 | 27,921 | 3.61% | |||
| 9,031 | |||||||||
| Short-term borrowings | 156,908 | 3,006 | 2.52% | 234,164 | 9,031 | 5.05% | |||
| Long-term borrowings | 275,498 | 9,438 | 4.53% | 211,522 | 7,723 | 4.87% | |||
| Total borrowed funds | 432,406 | 12,444 | 3.80% | 445,686 | 16,754 | 4.97% | |||
| Total interest-bearing liabilities | 1,496,038 | 36,148 | 3.22% | 1,479,167 | 44,675 | 4.02% | |||
| Non-interest-bearing deposits | 179,959 | 172,288 | |||||||
| Other liabilities | 14,269 | 15,921 | |||||||
| Total liabilities | 1,690,266 | 1,667,376 | |||||||
| Stockholders’ equity | 204,777 | 197,916 | |||||||
| Total liabilities and equity | $ 1,895,043 | $ 1,865,292 | |||||||
| Net interest income/spread (a) | $ 44,981 | 3.15% | $ 41,070 | 2.84% | |||||
| Net interest margin (a) | 3.54% | 3.29% | |||||||
| (a) Information presented on a fully tax-equivalent basis. | |||||||||
END OF RELEASE