EXHIBIT 99
NEWS RELEASE
FOR IMMEDIATE RELEASE Contact: Jack Conlon, Chief Financial Officer
- --------------------- (740) 373-3155
January 22, 2002
PEOPLES BANCORP ANNOUNCES 28th CONSECUTIVE
YEAR OF INCREASED EARNINGS
____________________________________________________________________
Earnings per share up 11% to $1.70
MARIETTA, Ohio - Peoples Bancorp Inc. (Nasdaq: PEBO) announced its 28th
consecutive year of increased earnings. In 2001, Peoples achieved record profits
due in large part to increased net interest income and non-interest income
growth, as fourth quarter profits reached record levels due to enhanced
operating results and nonrecurring revenues.
Diluted earnings per share grew 11.1% in 2001 to $1.70 compared to
$1.53 in 2000. Net income in 2001 totaled $12,335,000, up $1,209,000 (or 10.9%)
over the prior year. In the fourth quarter of 2001, diluted earnings per share
totaled $0.49 on net income of $3,537,000, compared to earnings per share of
$0.37 on net income of $2,682,000 in the fourth quarter of 2000. For the year
ended December 31, 2001, return on average equity ("ROE") was 13.60% compared to
14.92% in 2000. In the fourth quarter of 2001, ROE totaled 14.76%, compared to
13.62% in the fourth quarter of 2000.
"Our strong results in 2001 reflect solid improvement in key
performance areas, including top-line revenue generation and double-digit
earnings growth," said Robert E. Evans, President and CEO. "Considering the
first half of the year was slower than expected and the economic conditions for
the entire year were challenging, we are very pleased with our overall
performance in 2001. These results reflect our associates' commitment to
Peoples' client-focused strategies."
Evans continued, "In 2002, our focus will be building upon our client
relationships and satisfying the needs within Peoples' markets, one client at a
time, as well as developing long-lasting relationships within Peoples' new
markets resulting from the planned acquisition of First Colony Bancshares and
expansion into Guernsey and Belmont Counties. We believe this focus and the
integration of Peoples' products and services with those currently offered by
Guernsey Bank will further enhance Peoples' long-term shareholder value." Under
the terms of the agreement, Peoples will pay approximately $18 million in cash
and assume $2 million of First Colony debt to purchase assets of approximately
$110 million and deposits of approximately $100 million.
Effective January 1, 2002, Peoples adopted Statement No. 142, "Goodwill
and Other Intangible Assets" ("SFAS 142") issued by the Financial Accounting
Standards Board in July 2001. Upon adoption, Peoples ceased the amortization of
goodwill totaling approximately $6.0 million. If SFAS 142 had been in place in
2001, Peoples goodwill amortization expense would have been reduced by $750,000
and reported diluted EPS would have increased by $0.10 per share.
On a cash basis, diluted earnings per share grew to $0.55 for the
fourth quarter of 2001 versus $0.43 for the three months ended December 31,
2000, an increase of 27.9%. Cash basis earnings exclude the impact of intangible
assets and related amortization expenses. In the fourth quarter of 2001, Peoples
had amortization expense of $617,000 related to intangible assets, compared to
$571,000 for the same period a year ago. Cash basis ROE was 20.20% for the
quarter ended December 31, 2001, compared to 20.34% in the fourth quarter of
2000.
In the fourth quarter of 2001, net interest income totaled $11,244,000,
up $1,278,000 (or 12.8%) compared to $9,966,000 for the same period last year.
For the year ended December 31, net interest income increased by $2,843,000
(or 7.1%) to $43,133,000 in 2001 compared to 2000. Peoples' net interest margin
improved throughout 2001, reaching 4.30% in the fourth quarter compared to 3.91%
for the fourth quarter of 2000. On a year-to-date basis, net interest margin
was 4.11% in 2001 compared to 4.08% last year.
"The Federal Reserve aggressively lowered interest rates in 2001, which
was the significant driver of improvement in net interest income and net
interest margin through lower costs of funds," said Jack Conlon, Chief Financial
Officer. "In addition to the improvements generated from the Fed's discount rate
reductions, our proactive approach to managing deposit pricing and use of other
funding options produced additional benefits."
In 2001, non-interest income totaled $10,728,000 compared to $9,009,000
last year, an increase of $1,719,000 (or 19.1%). In the fourth quarter of 2001,
Peoples recognized non-recurring income of $877,000 as a result of stock it
received from the demutualization of Anthem Insurance Companies, Inc. In
addition, Peoples' mid-year investment in business owned life insurance
("BOLI"), as well as increased electronic banking income and deposit service
charges, continued to be significant contributors to Peoples' non-interest
income in the fourth quarter of 2001.
Electronic banking income grew $202,000 (or 16.6%) in 2001 from 2000's
total of $1,220,000. For the fourth quarter of 2001, electronic banking income
was $390,000, up $56,000 (or 16.8%) compared to 2000's fourth quarter total.
These increases can be attributed to volume increases in ATM and debit card
usage by Peoples' clients. Peoples largest source of non-interest income,
deposit account service charges, totaled $3,608,000 in 2001, up $365,000 (or
11.3%) compared to last year. For the three months ended December 31, 2001,
deposit account income totaled $1,049,000 compared to $863,000 a year ago, an
increase of $186,000 (or 21.6%), the result of increased volume of overdraft
fees.
"One of our primary strategies is to increase non-interest income
through the introduction of new products and services," said Conlon. "In
December, Peoples started offering `Overdraft Privilege' to qualified
non-business clients, which resulted in increased deposit account service
charges, particularly overdraft fees. Due in part to this program, overdraft
fees were up 60% compared to last year's fourth quarter."
Peoples' other significant non-interest income sources, insurance and
investment commissions and fiduciary revenues, totaled $1,504,000 and
$2,508,000, respectively, in 2001 compared to $1,540,000 and $2,608,000,
respectively, in 2000. Peoples' ability to grow these revenues in 2001 has been
challenged more than expected as a result of a weakening US stock market and
general economic conditions. Although revenues were down on a year-to-date
basis, insurance and investment commissions were up $25,000 (or 6.2%) in the
fourth quarter of 2001 compared to the same period last year while fiduciary
revenues were virtually unchanged.
"Insurance and investment commissions and fiduciary revenues remain
viable sources for future non-interest income growth," added Conlon. "We
continue to pursue new ways to provide asset and risk management products to
Peoples' clients and prospects."
Non-interest expense totaled $33,412,000 in 2001, up $2,368,000 (or
7.6%) compared to last year and $9,176,000 for the three months ended December
31, 2001 versus $7,947,000 for the fourth quarter of 2000. Increased salaries
and benefits expense, Peoples' largest non-interest expense, was the primary
reason for non-interest expense growth in 2001. Compared to last year, salaries
and benefits grew $2,087,000 (or 15.5%) to $15,590,000 in 2001, a result of wage
increases, rising benefit costs and the addition of associates. For the quarter
ended December 31, 2001, salaries and benefits were $4,573,000, an increase of
$1,057,000 (or 30.1%) from 2000's fourth quarter total, due largely to
additional incentive and medical plan expenses. Data processing and software
costs were up $93,000 (or 36.2%) in the fourth quarter of 2001 compared to year
ago, due to a one-time software licensing fee of $77,000. Peoples' other
non-interest expenses were at or below the level of recent periods, except for
marginal increases in non-income based taxes and intangible amortization
expense.
"Rising medical costs and benefit expenses, as well as salary increases
necessary to retain and recruit key personnel, challenged our ability to control
total non-interest expense growth for the year," commented Conlon. "However, we
will continue to implement strategies to manage these rising costs and explore
new revenue streams, such as our BOLI investment, to help offset such
increases."
Loan balances increased by $35.9 million (or 4.9%) in 2001 totaling
$772.9 million at year-end. Growth occurred in commercial and real estate loans,
while consumer loan balances declined. For the quarter ended December 31, 2001,
Peoples experienced modest loan growth, primarily in commercial lending.
The continuing sales efforts of Peoples' associates and Peoples'
competitive pricing of select deposits produced higher deposit balances in 2001
(primarily certificates of deposit). Since year-end 2000, total deposits grew
$56.7 million (or 7.5%) to $814.4 million at December 31, 2001. Although up
compared to last year, deposits dropped by $28.2 million (or 3.3%) during the
fourth quarter from September 30's balance of $842.6 million, with increased
non-interest bearing deposits partially offsetting declines in interest bearing
deposit balances.
In the fourth quarter of 2001, the combination of loan growth and
deposit declines, coupled with planned balance sheet leveraging, resulted in an
increase in borrowings. Peoples has also taken steps to secure long-term funding
during this period of low interest rates using selected FHLB advances to reduce
risks associated with a rising rate environment. As a result, Peoples' total
borrowings increased by $52.1 million (or 26.5%) to $248.5 million at year-end
compared to September 30, 2001, but remained below Peoples' total borrowings of
$258.4 million at year-end 2000.
For the three months ended December 31, 2001, Peoples' provision for
loan losses was $634,000 compared to $600,000 in the same period last year. On a
year-to-date basis, Peoples' provision for loan losses totaled $2,659,000, up
$337,000 (or 14.5%) compared to 2000's provision due to less favorable loss
experience and general economic conditions. At December 31, 2001, the allowance
for loan losses totaled $12.4 million, or 1.60% of total loans, up $1.4 million
from year-end 2000 when the allowance was 1.48% of total loans.
Net chargeoffs totaled $562,000 in the fourth quarter of 2001 and
$2,199,000 for the year compared to $876,000 and $1,656,000 for the same periods
in 2000. Consumer and commercial loans accounted for a majority of net
chargeoffs in 2001, totaling $238,000 and $208,000, respectively, for the fourth
quarter of 2001 and $902,000 and $924,000, respectively, for the year ended
December 31, 2001. Peoples' nonperforming assets totaled $5.7 million, or 0.47%
of total assets, at December 31, 2001, compared to $4.6 million, or 0.39% of
total assets, at September 30, 2001 and $5.2 million, or 0.46%, at year-end
2000.
"Despite the modest increase in nonperforming assets during the fourth
quarter, we believe Peoples' asset quality remains somewhat stronger than peer
levels and our allowance for loan losses is adequate for risks inherent in the
loan portfolio," added Conlon. "We anticipate our provision for loan losses for
the first quarter of 2002 to increase marginally compared to recent periods.
Changes in loan volume, general economic conditions and other factors affecting
loan losses, such as loan delinquencies and portfolio risk, could impact future
provisions."
During the fourth quarter of 2001, Peoples completed the dissolution of
Northwest Territories Life Insurance Company ("NTLIC"). This dissolution is part
of Peoples' current strategy to exit the insurance underwriting business.
Management anticipates improved revenue streams from credit life and accident
and health insurance products placed with independent insurance carriers. This
change will also eliminate the underwriting risk associated with NTLIC. As a
result of the dissolution, net assets of approximately $1.2 million (primarily
marketable securities) were transferred to the parent company. The dissolution
had no impact on Peoples' fourth quarter results of operations.
"Overall, we are pleased with our results in light of the challenges we
faced," summarized Evans. "We are optimistic that our recent efforts and current
strategic initiatives will continue to provide benefits to all of our
stakeholders."
Peoples Bancorp Inc., a diversified financial products and services
company with $1.2 billion in assets, offers a complete line of banking,
investment, insurance, and trust solutions through Peoples Bank's 40 sales
offices and 25 ATM's in Ohio, West Virginia, and Kentucky. Peoples' common stock
is traded on the NASDAQ exchange under the symbol "PEBO." Learn more about
Peoples or enroll in Peoples OnLine Connection, Peoples' Internet banking
product, at www.peoplesbancorp.com.
Conference Call to Discuss Earnings:
Peoples will conduct a facilitated conference call to discuss 2001
results of operations on January 23, 2002, at 3:00 p.m. local time. The
conference call is open to the public; however, management asks that questions
be limited to investment analysts, interested members of the media and
shareholders. To participate in the call, please dial (877) 735-0939
approximately five minutes before the scheduled start of the conference call.
Members of Peoples' executive management will participate in the conference
call. Brief opening remarks will be followed by a question and answer period. A
complete transcript of the conference call will be placed on peoplesbancorp.com,
in the "Investor Relations" section under "Conference Call Transcripts".
Safe Harbor Statement:
The statements in this press release which are not historical fact are
forward looking statements that involve a number of risks and uncertainties,
including, but not limited to, the interest rate environment, the effect of
banking and tax regulations, the effect of economic conditions, the impact of
competitive products and pricing, and other risks detailed in Peoples' SEC
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)
-------------------------------- --------------------------------
Three Months Ended Year Ended
(in $000's, except share and per share data) December 31, December 31,
2001 2000 2001 2000
-------------------------------- --------------------------------
PER SHARE DATA Net income per share (a):
Basic $ 0.50 $ 0.38 $ 1.72 $ 1.55
Diluted $ 0.49 $ 0.37 $ 1.70 $ 1.53
Cash basis earnings - diluted (b) $ 0.55 $ 0.43 $ 1.92 $ 1.75
Dividends declared per share $ 0.15 $ 0.13 $ 0.56 $ 0.51
Book value per share $ 13.20 $ 11.65 $ 13.20 $ 11.65
Tangible book value per share (b) $ 10.81 $ 9.15 $ 10.81 $ 9.15
Dividend payout as a percentage of net income 30.36% 34.08% 33.08% 33.06%
Actual shares outstanding (net of treasury shares) (a) 7,110,922 7,138,638 7,110,922 7,138,638
Weighted average shares outstanding (a):
Basic 7,113,264 7,147,985 7,166,264 7,176,189
Diluted 7,222,227 7,208,308 7,275,994 7,260,176
PERFORMANCE RATIOS
Return on average equity 14.76% 13.62% 13.60% 14.92%
Cash basis return on average equity (b) 20.20% 20.34% 19.21% 22.90%
Return on average assets 1.21% 0.96% 1.06% 1.02%
Cash basis return on average assets (b) 1.38% 1.12% 1.22% 1.19%
Non-interest income leverage ratio (c) 43.56% 31.47% 34.50% 31.32%
Efficiency ratio (d) 56.00% 58.54% 56.53% 57.12%
Net interest margin (fully tax equivalent) 4.30% 3.91% 4.11% 4.08%
Net loan chargeoffs as a percentage of average loans 0.07% 0.12% 0.29% 0.24%
<FN>
(a) Adjusted for stock dividends.
(b) Excludes after-tax impact of goodwill and other intangible amortization
expense and/or balance sheet impact of intangible assets acquired through
use of purchase accounting for acquisitions.
(c) Non-interest income (less securities and asset disposal gains) as a
percentage of non-interest expense (less intangible amortization and
non-direct operational expenses). Significant non-recurring items are
excluded from the calculation.
(d) 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. Significant non-recurring items are
excluded from the calculation.
</FN>
PEOPLES BANCORP INC. CONSOLIDATED STATEMENTS OF INCOME
----------------------------- ------------------------------
Three Months Ended Year Ended
(in $000's) December 31, December 31,
2001 2000 2001 2000
------------- ------------- ------------- -------------
Interest income $ 20,539 $ 22,294 $ 86,107 $ 85,129
Interest expense 9,295 12,328 42,974 44,839
------------- ------------- ------------- -------------
Net interest income 11,244 9,966 43,133 40,290
Provision for loan losses 634 600 2,659 2,322
------------- ------------- ------------- -------------
Net interest income after provision for loan losses 10,610 9,366 40,474 37,968
Net gain on securities transactions 2 - 29 10
Net gain (loss) on asset disposals 11 - 24 (109)
Mark-to-market adjustment on interest rate caps - - (131) -
Non-interest income:
Service charges on deposits 1,049 863 3,608 3,243
Fiduciary revenues 640 634 2,508 2,608
Insurance and investment commissions 427 402 1,504 1,540
Electronic banking revenues 390 334 1,422 1,220
Business owned life insurance 239 - 481 -
Other non-interest income 998 88 1,205 398
------------- ------------- ------------- -------------
Total non-interest income 3,743 2,321 10,728 9,009
Non-interest expense:
Salaries and benefits 4,573 3,516 15,590 13,503
Occupancy and equipment 903 943 3,695 3,900
Trust preferred 645 662 2,621 2,623
Amortization of intangibles 617 571 2,347 2,284
Data processing and software 350 257 1,107 1,033
Other non-interest expense 2,088 1,998 8,052 7,701
------------- ------------- ------------- -------------
Total non-interest expense 9,176 7,947 33,412 31,044
------------- ------------- ------------- -------------
Income before income taxes 5,190 3,740 17,712 15,834
Income taxes 1,653 1,058 5,377 4,708
------------- ------------- ------------- -------------
Net income $ 3,537 $ 2,682 $ 12,335 $ 11,126
============= ============= ============= =============
Fully tax equivalent net interest income $ 11,542 $ 10,231 $ 44,221 $ 41,326
PEOPLES BANCORP INC. SELECTED FINANCIAL INFORMATION
---------------------------------- ---------------------------------
Three Months Ended Year Ended
(in $000's) December 31, December 31,
2001 2000 2001 2000
---------------------------------- ---------------------------------
CONSOLIDATED AVERAGE BALANCES
Average gross loans $ 765,112 $ 731,369 $ 753,777 $ 698,144
Average earning assets 1,074,336 1,048,659 1,076,591 1,013,441
Average total assets 1,169,253 1,122,327 1,162,874 1,090,544
Average non-interest bearing deposits 90,725 81,602 87,503 81,205
Average interest bearing deposits:
Savings 78,144 76,368 77,543 83,246
Interest-bearing demand deposits 282,153 252,982 275,331 234,311
Time deposits 374,199 342,911 370,704 341,020
--------------- --------------- --------------- ---------------
Total average interest bearing deposits 734,496 672,261 723,579 658,577
Average stockholders' equity $ 95,845 $ 78,773 $ 90,689 $ 74,591
NET CHARGEOFFS
Gross chargeoffs $ 653 $ 998 $ 2,638 $ 2,061
Recoveries 91 122 439 405
--------------- --------------- --------------- ---------------
Net chargeoffs $ 562 $ 876 $ 2,199 $ 1,656
PEOPLES BANCORP INC. SELECTED FINANCIAL INFORMATION
----------------- ----------------- -----------------
(in $000's, end of period) December 31, September 30, December 31,
2001 2001 2000
----------------- ----------------- -----------------
LOAN PORTFOLIO
Commercial, financial, and agricultural $ 343,800 $ 315,607 $ 310,558
Real estate, construction 14,530 21,077 20,267
Real estate, mortgage 295,944 295,747 283,323
Consumer 118,582 123,752 122,817
----------------- ----------------- -----------------
Total loans $ 772,856 $ 756,183 $ 736,965
ASSET QUALITY
Allowance for loan losses as a percent of total loans 1.60% 1.62% 1.48%
Allowance for loan losses as a percent of
nonperforming loans (a) 225.0% 273.6% 212.6%
Nonperforming loans as a percent of total loans (a) 0.71% 0.59% 0.70%
Nonperforming assets as a percent of total assets (b) 0.47% 0.39% 0.46%
Nonperforming assets as a percent of total loans and
other real estate owned
real estate owned (b) 0.73% 0.61% 0.71%
Nonperforming assets:
Loans 90 days or more past due $ 686 $ 551 $ 344
Renegotiated loans $ 425 $ 146 $ 518
Nonaccrual loans $ 4,380 $ 3,794 $ 4,280
Other real estate owned $ 181 $ 93 $ 86
----------------- ----------------- -----------------
Total nonperforming assets $ 5,672 $ 4,584 $ 5,228
REGULATORY CAPITAL
Tier 1 risk-based capital 12.83% 12.92% 12.83%
Total risk-based capital ratio (Tier 1 and Tier 2) 14.18% 14.26% 14.21%
Leverage ratio 9.18% 8.86% 8.69%
Tier 1 capital $ 105,065 $ 102,421 $ 97,056
Total capital (Tier 1 and Tier 2) $ 116,138 $ 112,993 $ 107,428
Total risk-weighted assets $ 818,854 $ 792,477 $ 756,195
SUPPLEMENTAL DATA
Trust assets under management $ 539,487 $ 477,012 $ 498,563
One year cumulative repricing gap $ (11,925) $ (41,157) $ (26,132)
Employees (full-time equivalent) 403 397 388
Full service offices 34 34 32
Supermarket offices 4 4 4
ATMs 25 25 27
Announced treasury share plans: (c)
Total shares in plan 137,500 137,500 181,500
Shares purchased (d) 11,257 68,240 9,895
Average price (d) $ 17.63 $ 19.70 $ 12.53
<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) 2001 data reflects 2001 Stock Repurchase Program of 137,500 shares (or 2%
of outstanding shares); 2000 data reflects 2000 Stock Repurchase Program
of 181,500 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
------------------ ----------------
(in $000's) December 31, December 31,
2001 2000
------------------ ----------------
ASSETS
Cash and cash equivalents $ 32,838 $ 28,449
Available-for-sale investment securities, at estimated fair value (amortized
cost of $329,081 and $335,111 at December 31, 2001 and 2000, respectively) 330,364 330,521
Loans, net of unearned interest 772,856 736,965
Allowance for loan losses (12,357) (10,930)
----------------- -----------------
Net loans 760,499 726,035
Bank premises and equipment, net of accumulated depreciation 16,369 15,565
Goodwill 15,388 15,702
Other intangibles 1,622 2,146
Other real estate owned 181 86
Other assets 38,628 17,330
----------------- -----------------
TOTAL ASSETS $ 1,195,889 $ 1,135,834
================= =================
LIABILITIES
Non-interest bearing deposits $ 96,533 $ 84,974
Interest bearing deposits 717,835 672,647
----------------- -----------------
Total deposits 814,368 757,621
Federal funds purchased, securities sold under repurchase agreements,
and other short term borrowings 56,052 119,915
Long-term borrowings 192,448 138,511
Accrued expenses and other liabilities 10,111 7,572
----------------- -----------------
TOTAL LIABILITIES 1,072,979 1,023,619
Guaranteed preferred beneficial interests in junior subordinated debentures 29,056 29,021
STOCKHOLDERS' EQUITY
Common stock, no par value (12,000,000 shares authorized, 7,289,266 shares
issued at December 31, 2001, and
6,679,028 shares issued at December 31, 2000) 78,664 66,364
Accumulated comprehensive income, net of deferred income taxes 834 (2,983)
Retained earnings 17,735 23,381
Treasury stock, at cost (178,344 shares at December 31, 2001,
and 189,357 shares at December 31, 2000) (3,379) (3,568)
----------------- -----------------
TOTAL STOCKHOLDERS' EQUITY 93,854 83,194
----------------- -----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,195,889 $ 1,135,834
================= =================
END OF RELEASE