EXHIBIT 99
NEWS RELEASE
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FOR IMMEDIATE RELEASE Contact: John W. Conlon, Chief Financial Officer
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October 23, 2000
PEOPLES BANCORP REPORTS 11% INCREASE
IN THIRD QUARTER EARNINGS PER SHARE
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MARIETTA, Ohio - Peoples Bancorp Inc. (Nasdaq: PEBO) announced third
quarter earnings of $0.44 per diluted share, up 10.8% over the third quarter of
1999, as growth in non-interest revenues contributed to increased earnings. Net
income for the quarter ended September 30, 2000, totaled $2,882,000, up $124,000
(or 4.5%) from the same period last year. Return on average assets and return on
average equity were 1.04% and 15.33%, respectively, for the third quarter of
2000 compared to 1.07% and 14.37%, respectively, for the third quarter of 1999.
Earnings for the third quarter of 2000 include pre-tax gains on sales of
securities and assets of $102,000, which increased earnings per share by $0.01.
Cash basis earnings increased to $0.50 per diluted share in the third
quarter of 2000, up $0.04 (or 8.7%) compared to the third quarter of 1999, and
for the nine months ended September 30, 2000, totaled $1.46 per diluted share,
an increase of $0.11 (or 8.1%) over the same period last year. Cash basis return
on average equity was 23.25% for the third quarter of 2000 compared to 22.84% a
year earlier and 23.03% for the first nine months of 2000 versus 20.04% in 1999.
Cash basis earnings exclude the effects of intangible assets and related
amortization expenses.
Year-to-date through September 30, 2000, net income totaled $8,444,000,
or $1.28 per diluted share, a $507,000 (6.4%), or $0.15 per diluted share
(13.3%), increase from 1999's total of $7,937,000, or $1.13 per diluted share.
Return on average equity was 15.38% for the first nine months of 2000 versus
12.74% a year ago. For the nine months ended September 30, return on average
assets was 1.04% versus 1.10% a year ago.
"We are pleased to announce solid third quarter results," commented
Robert E. Evans, Peoples Bancorp's President and CEO. "Our investment and
insurance sales efforts continue to produce strong revenue growth. One of our
goals is to grow revenues 20% annually while fulfilling our clients' needs by
providing diversified, integrated financial products and services."
Since 1999, Peoples Bancorp ("Peoples") has continued to implement its
"Connections" process to enhance client service through integrated,
relationship-based selling. Promotional campaigns to increase core deposits and
enhance Peoples' product and service visibility in its primary markets have been
recent focal points of these marketing initiatives. Peoples deposit growth of
nearly $26 million in the third quarter of 2000 can be attributed to the
Connections process, which also provides Peoples with increased fee income
opportunities with new clients and referral opportunities to Peoples' many
investment and insurance products.
Peoples' commitment to diversity and growth of revenues through various
lines of business, especially those not dependent on interest rates, resulted in
strong growth of non-interest income (excluding securities gains) in the third
quarter of 2000 as revenues increased $430,000 (or 22.7%) to $2,327,000 compared
to 1999's third quarter. For the nine months ended September 30, 2000,
non-interest income totaled $6,688,000, an increase of $1,132,000 (or 20.4%)
compared to the same period in 1999.
Service charges on deposits, still Peoples' largest source of
non-interest revenues, grew $145,000 (or 21.0%) in the third quarter of 2000
compared to the same period a year earlier. Revenue growth can be attributed to
volume increases of standard cost-recovery fees related to overdraft and
non-sufficient funds, as well as volume growth in Peoples' deposit service
income generated from business customers. Insurance commission revenues
increased from $130,000 in the third quarter of 1999 to $415,000 for the three
months ended September 30, 2000. The majority of revenue growth resulted from
increases in Peoples' life insurance and annuity sales. Commission revenues from
sales of property and casualty insurance also grew significantly in the third
quarter of 2000 as Peoples Insurance client service teams continue to expand the
number of clients served.
Growth of investment and insurance commissions was partially offset by
decreased trust revenues in the third quarter of 2000 compared to the same
period a year ago. Trust revenues have been challenged in 2000 due to recent
decreases in market valuations. Despite those challenges, on a year-to-date
basis, trust revenues are up $14,000 (or 0.7%) compared to the nine months ended
September 30, 1999. Electronic banking revenues increased $47,000 (or 19.0%) to
$294,000 in the third quarter of 2000, due primarily to increased debit card
activity and expanded use of debit cards by Peoples' clients. Management
believes growth in non-interest income reflects the success of Peoples' client
service teams to professionally and quickly serve client needs. Fueled by
continued insurance and investment revenue growth, management expects
non-interest income to grow modestly in the latter part of 2000 and into the
first quarter of 2001.
Compared to the same period a year earlier, net interest income on a
fully tax equivalent basis decreased $173,000 (or 1.7%) to $10,250,000 for the
quarter ended September 30, 2000, resulting in a net interest margin of 3.99%.
Through the first nine months of 2000, net interest margin was 4.14% versus
4.41% in 1999. Net interest margin faced downward pressure due to competitive
pricing of loans and deposits in Peoples' markets, as well as rising interest
rates on Peoples' interest-bearing liabilities, particularly Peoples' short-term
borrowings, which have repriced upward approximately 160 basis points since the
third quarter of 1999. Peoples' reliance on short-term funding has increased due
to recent loan growth and repayments of certain longer-term borrowings.
Management anticipates that Peoples' net interest income levels will remain
stable compared to the third quarter of 2000 or decrease modestly due to
competition for loans and deposits in Peoples' primary markets. Management
recently increased Peoples' base retail loan rates to reflect current interest
rate conditions, although any enhancements in net interest margin from this
increase is expected to be offset by increases in funding source costs. Net
interest margin in 2000 has also been impacted by Peoples' asset growth strategy
implemented in mid-1999, as Peoples increased its earning asset base by
approximately $150 million in conjunction with the trust preferred securities
issued in April 1999.
Peoples' strong loan growth continued in the third quarter of 2000,
increasing $22.9 million (or 3.3%) since June 30, 2000 to $724.3 million at the
end of the third quarter of 2000. Most of Peoples' loan growth has occurred in
its mid-Ohio Valley markets and contiguous areas, as well as central Ohio
markets in Fairfield and Licking Counties. Volume increases occurred in
commercial loans and real estate loans, including home equity loans, which
continue to be a popular loan product for many Peoples' clients. Management
expects modest loan growth in the fourth quarter of 2000.
As a result of the increase in loan volume, the loan loss provision
increased $153,000 during the third quarter of 2000 compared to the same period
a year earlier. At September 30, 2000, Peoples' allowance for loan losses
totaled $11.2 million (or 1.55% of total loans), up $942,000 since year-end
1999. Peoples' asset quality continues to be above peer group levels and
reflects the overall quality of Peoples' loan portfolio.
Peoples continued its investment in enhanced client service initiatives
in the third quarter of 2000, which contributed to increased non-interest
expense. In the third quarter of 2000, non-interest expense totaled $7,750,000,
an increase of $434,000 (or 5.9%) compared to the same period last year.
Salaries and benefits expense is Peoples' largest non-interest expense, and
increased $412,000 (or 13.8%) compared to the third quarter of 1999, due
primarily to commissions paid to insurance and investment associates as well as
modest increases in the number of Peoples' client service associates. Occupancy
and equipment expenses were up $95,000 (or 10.9%) from the third quarter of 1999
due to investments in technology and client service areas designed to enhance
Peoples' associates ability to serve client needs.
One of Peoples strategies is to make financial services more
convenient, flexible, and speedy for clients, including Internet banking and
other means of electronic banking. Management believes current investments in
and expansion of client service efforts helps Peoples accomplish that goal. The
increased level of non-interest expense is reflected in Peoples Bancorp's
efficiency ratio. For the quarter ended September 30, 2000, the efficiency ratio
was 56.80% compared to 54.03% a year ago, while on a year-to-date basis, was
56.60% in 2000 versus 53.61% in 1999. The combination of compressed net interest
margins and increased levels of non-interest expense have negatively impacted
Peoples' efficiency ratio, while favorably impacting other ratios such as return
on shareholders' equity and earnings per share.
Peoples' effective tax rate was 29.3% in the third quarter of 2000
compared to 32.5% for the third quarter of 1999. For the nine months ended
September 30, the effective tax rate was 30.2% compared to 31.9% in 1999.
Peoples has implemented tax reduction strategies, including investing in low
income housing and historic tax credits, in an effort to reduce tax burden and
lower the effective tax rate reflected in the third quarter of 2000 and going
forward. Management continues to explore methods in which to decrease Peoples'
tax burden.
Peoples continues to repurchase treasury shares through its 2000 Stock
Repurchase Program, although such purchases have slowed in recent weeks as
management analyzes other cash considerations for optimum return to
shareholders. At October 20, 2000, Peoples had repurchased approximately 56% of
the 165,000 shares authorized under the 2000 Stock Repurchase Program.
Peoples Bancorp Inc. is a diversified financial services company with
$1.1 billion in assets. Peoples' lead subsidiary is Peoples Bank, National
Association, which offers complete banking products and services through 38
financial service locations and 25 ATM's in Ohio, West Virginia, and Kentucky.
Peoples Bank also makes available other financial services through Peoples
Investments, which provides customer-tailored solutions for fiduciary needs,
investment alternatives, and asset management needs (securities are offered
exclusively through Raymond James Financial Services, member NASD/SIPC, an
independent broker/dealer located at Peoples Bank). Peoples Insurance also
provides life, property and casualty insurance products and services through
Peoples Insurance Agency, Inc. Peoples Bancorp's common shares are traded
through the Nasdaq National Market System under the symbol PEBO. Learn more
about Peoples Bancorp or enroll in Peoples OnLine Connection, Peoples Bank's
Internet banking product, at www.peoplesbancorp.com.
The statements in this release which are not historical fact are
forward looking statements that involve risks and uncertainties, including, but
not limited to, the interest rate environment, the effect of federal and state
banking and tax regulations, the effect of technological changes, the effect of
economic conditions, the impact of competitive products and pricing, and other
risks detailed in Peoples' Securities and Exchange Commission filings. Although
management believes that the expectations in these forward-looking statements
are based on reasonable assumptions within the bounds of management's knowledge
of Peoples' business and operations, it is possible that actual results may
differ materially from these projections.
PEOPLES BANCORP INC. (Nasdaq: PEBO)
Financial Highlights (Unaudited)
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Three Months Ended Nine Months Ended
(in $000's, except share data) September 30, September 30,
2000 1999 2000 1999
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PER SHARE DATA Net income per share (a)
Basic $ 0.44 $ 0.41 $ 1.29 $ 1.15
Diluted $ 0.44 $ 0.40 $ 1.28 $ 1.13
Cash basis earnings - diluted (b) $ 0.50 $ 0.46 $ 1.46 $ 1.35
Dividends declared per share $ 0.14 $ 0.13 $ 0.42 $ .37
Book value per share $ 11.86 $ 11.24 $ 11.86 $ 11.24
Tangible book value per share (b) $ 9.03 $ 8.23 $ 9.03 $ 8.23
Dividend payout as a percentage of net income 31.78% 31.18% 32.73% 32.28%
Actual shares outstanding (net of treasury shares) (a) 6,496,726 6,688,156 6,496,726 6,688,156
Weighted average shares outstanding:
Basic 6,518,187 6,763,341 6,532,434 6,872,698
Diluted 6,583,143 6,977,334 6,616,546 7,056,986
PERFORMANCE RATIOS
Return on average equity 15.33% 14.37% 15.38% 12.74%
Cash basis return on average equity (b) 23.25% 22.84% 23.03% 20.04%
Return on average assets 1.04% 1.07% 1.04% 1.10%
Cash basis return on average assets (b) 1.21% 1.27% 1.21% 1.32%
Efficiency ratio (c) 56.80% 54.03% 56.60% 53.61%
Net interest margin (fully tax equivalent) 3.99% 4.38% 4.14% 4.41%
Net loan chargeoffs as a percentage of average loans 0.04% 0.03% 0.11% 0.09%
NET CHARGEOFFS
Gross chargeoffs $ 422 $ 274 $ 1,063 $ 848
Recoveries $ 115 $ 99 $ 283 $ 300
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Net chargeoffs $ 307 $ 175 $ 780 $ 548
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<FN>
(a) Adjusted for stock dividends.
(b) Excludes after-tax impact of intangible amortization expense and/or balance
sheet impact of intangible assets acquired through use of purchase
accounting for acquisitions.
(c) Non-interest expense (less intangible amortization and non-direct
operational expenses) as a percentage of fully tax equivalent net interest
income plus non-interest income. All non-recurring items are removed from
the calculation.
</FN>
PEOPLES BANCORP INC. CONSOLIDATED STATEMENTS OF INCOME
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Three Months Ended Nine Months Ended
(in $000's) September 30, September 30,
2000 1999 2000 1999
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Interest income $ 21,799 $ 19,104 $ 62,835 $ 52,711
Interest expense 11,804 9,049 32,511 24,453
-- ----------- -- ----------- -- ----------- -- -----------
Net interest income 9,995 10,055 30,324 28,258
Provision for loan losses 600 447 1,722 1,431
-- ----------- -- ----------- -- ----------- -- -----------
Net interest income after provision for loan losses 9,395 9,608 28,602 26,827
Net gain (loss) on securities transactions 66 (115) 10 (114)
Net gain (loss) on asset disposals 36 14 (109) 9
Non-interest income:
Service charges on deposits 835 690 2,380 1,993
Trust revenues 648 681 1,974 1,960
Insurance commissions 415 130 945 378
Electronic banking revenues 294 247 886 741
Other non-interest income 135 149 503 484
-- ----------- -- ----------- -- ----------- -- -----------
Total non-interest income 2,327 1,897 6,688 5,556
Non-interest expense:
Salaries and benefits 3,393 2,981 9,987 8,762
Occupancy and equipment 963 868 2,957 2,697
Trust preferred 656 663 1,961 1,180
Amortization of intangibles 571 657 1,713 1,970
Other non-interest expense 2,167 2,147 6,479 6,017
-- ----------- -- ----------- -- ----------- -- -----------
Total non-interest expense 7,750 7,316 23,097 20,626
-- ----------- -- ----------- -- ----------- -- -----------
Income before income taxes 4,074 4,088 12,094 11,652
Income taxes 1,192 1,330 3,650 3,715
-- ----------- -- ----------- -- ----------- -- -----------
Net income $ 2,882 $ 2,758 $ 8,444 $ 7,937
-- ----------- -- ----------- -- ----------- -- -----------
Fully tax equivalent net interest income $ 10,250 $ 10,423 $ 31,095 $ 29,265
PEOPLES BANCORP INC. SELECTED FINANCIAL INFORMATION
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Three Months Ended Nine Months Ended
(in $000's) September 30, September 30,
2000 1999 2000 1999
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CONSOLIDATED AVERAGE BALANCES
Average gross loans $ 711,194 $ 613,306 $ 686,988 $ 590,673
Average earning assets 1,003,321 933,252 976,061 873,661
Average total assets 1,104,197 1,031,184 1,079,868 960,570
Average non-interest bearing deposits 80,283 78,665 81,054 77,487
Average interest bearing deposits:
Savings 81,109 95,434 85,555 97,383
Interest-bearing demand deposits 241,879 217,405 228,041 212,028
Time deposits 336,624 309,905 340,388 317,041
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Total average interest bearing deposits 659,612 622,744 653,984 626,452
Average stockholders' equity $ 75,187 $ 76,764 $ 72,875 $ 83,046
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PEOPLES BANCORP INC. SELECTED FINANCIAL INFORMATION
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September 30, December 31, September 30,
2000 1999 1999
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LOAN PORTFOLIO (in $000's, end of period)
Commercial, financial, and agricultural $ 290,308 $ 272,219 $ 254,486
Real estate, construction 27,344 14,067 12,135
Real estate, mortgage 280,206 252,427 246,191
Consumer 126,470 121,120 118,328
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Total loans $ 724,328 $ 659,833 $ 631,140
ASSET QUALITY
Allowance for loan losses as a percent of total loans 1.55% 1.56% 1.65%
Allowance for loan losses as a percent of
nonperforming loans (a) 320.1% 487.6% 540.1%
Nonperforming loans as a percent of total loans (a) 0.48% 0.32% 0.30%
Nonperforming assets as a percent of total assets (b) 0.34% 0.21% 0.22%
Nonperforming assets as a percent of total loans and
other real estate owned
real estate owned (b) 0.52% 0.35% 0.36%
Nonperforming assets (in $000's, end of period):
Loans 90 days or more past due $ 610 $ 249 $ 702
Renegotiated loans $ 945 $ 747 $ 748
Nonaccrual loans $ 1,946 $ 1,109 $ 474
Other real estate owned $ 283 $ 207 $ 349
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Total nonperforming assets $ 3,501 $ 2,312 $ 2,273
REGUALTORY CAPITAL (in $000's, end of period)
Tier 1 risk-based capital 12.58% 12.57% 13.15%
Total risk-based capital ratio (Tier 1 and Tier 2) 14.03% 14.30% 14.86%
Leverage ratio 8.54% 8.29% 8.58%
Tier 1 capital $ 94,247 $ 87,216 $ 87,795
Total capital (Tier 1 and Tier 2) $ 105,097 $ 99,213 $ 99,222
Total risk-weighted assets $ 749,331 $ 693,688 $ 667,591
SUPPLEMENTAL DATA (in $000's, end of period)
Trust assets under management $ 508,396 $ 560,229 $ 572,091
One year cumulative repricing gap $ (49,345) $ (63,033) $ (28,192)
Employees (full-time equivalent) 383 385 377
Full service offices 32 31 31
Supermarket offices 4 3 3
ATMs 25 24 23
Announced treasury share plans: (c)
Total shares in plan 165,000 346,500 346,500
Shares purchased (d) 16,670 89,977 169,154
Average price (d) $ 14.75 $ 23.46 $ 25.57
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<FN>
(a) Nonperforming loans include loans 90 days past due and accruing,
renegotiated loans, and nonaccrual loans.
(b) Nonperforming assets include nonperforming loans, and other real estate
owned.
(c) 1999 data reflects 1999 Stock Repurchase Program of 346,5000 shares
(or 5% of outstanding shares); 2000 data reflects 2000 Stock Repurchase
Program of 165,000 shares (or 2.5% of outstanding shares). All share
amounts adjusted for stock dividends.
(d) Reflects treasury shares purchased and average price paid for the three
month period ended on the date indicated.
</FN>
PEOPLES BANCORP INC. CONSOLIDATED BALANCE SHEETS
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(in $000's) September 30, December 31,
2000 1999
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ASSETS
Cash and cash equivalents $ 26,062 $ 43,751
Available-for-sale investment securities, at estimated fair value (amortized
cost of $340,865 and $340,082 at September 30, 2000 and
December 31, 1999, respectively) 329,421 328,306
Loans, net of unearned interest 724,328 659,833
Allowance for loan losses (11,206) (10,264)
-- --------------- --- --------------
Net loans 713,122 649,569
Bank premises and equipment, net of accumulated depreciation 15,776 15,321
Goodwill 16,133 17,428
Other intangibles 2,291 2,726
Other real estate owned 283 207
Other assets 19,517 18,142
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TOTAL ASSETS $ 1,122,605 $ 1,075,450
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LIABILITIES
Non-interest bearing deposits $ 80,749 $ 83,267
Interest bearing deposits 673,926 644,940
-- --------------- --- --------------
Total deposits 754,675 728,207
Federal funds purchased, securities sold under repurchase agreements,
and other short term borrowings 115,131 87,439
Long-term borrowings 138,518 150,338
Accrued expenses and other liabilities 8,205 7,606
-- --------------- --- --------------
TOTAL LIABILITIES 1,016,529 973,590
Guaranteed preferred beneficial interests in junior subordinated debentures 29,012 28,986
STOCKHOLDERS' EQUITY
Common stock, no par value (12,000,000 shares authorized, 6,672,875 shares
issued at September 30, 2000, and
6,387,509 shares issued at December 31, 1999) 66,279 65,043
Accumulated comprehensive income, net of deferred income taxes (7,439) (7,654)
Retained earnings 21,614 26,241
Treasury stock, at cost (176,149 shares at September 30, 2000
and 398,662 shares at December 31, 1999) (3,390) (10,756)
-- --------------- --- --------------
TOTAL STOCKHOLDERS' EQUITY 77,064 72,874
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,122,605 $ 1,075,450
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