EXHIBIT 99
PEOPLES BANCORP INC. - P.O. BOX 738 - MARIETTA, OHIO - 45750
www.peoplesbancorp.com
NEWS RELEASE
FOR IMMEDIATE RELEASE Contact: John W. Conlon
- --------------------- Chief Financial Officer
April 19, 2006 (740) 373-3155
PEOPLES BANCORP INC. REPORTS 27% INCREASE
IN FIRST QUARTER EARNINGS PER SHARE
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MARIETTA, Ohio - Peoples Bancorp Inc. ("Peoples") (NASDAQ: PEBO)
announced today earnings per diluted share of $0.56 for the first quarter of
2006, up 27% over $0.44 a year ago. Net income was $5,931,000 for the quarter
ended March 31, 2006, a 26% increase compared to $4,692,000 earned in 2005's
first quarter. Return on average equity improved to 13.02% for the first quarter
of 2006, from 10.85% a year ago, and return on average assets was 1.30% compared
to 1.05% for the same periods, respectively.
"We are very pleased with our strong start to 2006 as reflected in
improved first quarter results," commented Mark F. Bradley, President and CEO.
"Key drivers of our earnings growth were higher net interest income levels,
increased insurance and investment revenues and a lower provision for loan
losses. In addition, we experienced modest loan growth, despite some expected
loan payoffs."
Net interest income improved 6% to $13,503,000 in the first quarter of
2006, from $12,712,000 a year ago, as average earning assets and related
interest income increased more than average interest-bearing liabilities and
related funding costs. In the first quarter of 2006, average earning assets were
up $38 million from the same period a year ago, as a direct result of increased
average loan balances, while average interest-bearing liabilities grew $21
million. Net interest margin was 3.40% for the quarter ended March 31, 2006,
compared to 3.39% for the fourth quarter of 2005 and 3.27% for the first quarter
of 2005.
"First quarter net interest income and margin exceeded expectations,"
said Jack Conlon, Chief Financial Officer. "The Federal Reserve's efforts to
increase the general level of market interest rates have resulted in
improvements in asset yields that exceeded the increase in funding costs when
compared to the same quarter of 2005. However, we expect the repricing of
maturing interest-bearing liabilities, the current flat yield curve, and
competitive loan and deposit pricing to pressure our net interest margin for the
remainder of 2006."
The provision for loan losses was $268,000 for the first quarter of
2006, down sharply from $941,000 in the first quarter of 2005. The provision is
based on management's in depth quarterly analysis of the loan portfolio and
historical loss experience and is directionally consistent with Peoples' loan
quality and improving loss experience. The first quarter of 2005 included a
specific provision of $500,000 for a group of loans that management determined
to be impaired. First quarter 2006 net charge-offs decreased 37% to $316,000
from $499,000 a year ago and decreased 43% from the $550,000 experienced in the
fourth quarter of 2005, attributable to a reduced amount of loans deemed
uncollectible. The largest portion of first quarter 2006 net charge-offs related
to commercial loans, while real estate loans comprised over half of the first
quarter of 2005 net charge-offs. The allowance for loan losses was $14.7
million, or 242.7% of nonperforming loans, at March 31, 2006, compared to 225.2%
at year-end and 208.1% at March 31, 2005.
Non-interest income, excluding gains and losses on security and asset
transactions, totaled $8,096,000 for first quarter of 2006, up 14% compared to a
year ago due mostly to higher insurance revenues. In the first quarter of 2006,
Peoples' insurance and investment commissions totaled $3,375,000 versus
$2,654,000 a year ago, a 27% increase, with $556,000 of additional performance
based commission income accounting for nearly all of this growth. Deposit
account service charges remain a significant source of non-interest income,
totaling $2,461,000 and $2,274,000 for the first quarters of 2006 and 2005,
respectively.
"For several quarters, we have worked to grow non-traditional revenues
and reduce our reliance on margin-based revenue," stated Bradley. "Performance
based commission income, which is typically earned in the first quarter of the
year, accounted for much of the first quarter increase in non-interest income.
We are very pleased with the increased insurance income, which was the result of
good volume and loss performance at our insurance agency and other strategic
actions."
In the first quarter of 2006, total non-interest expense was up 3% to
$13.1 million, compared to the first quarter of 2005. Salaries and benefits,
Peoples' largest operating expense, were $6.9 million for the first quarter of
2006, up from $6.7 million a year ago, the result of annual salary adjustments
and higher incentive costs based on Peoples' performance. Peoples also recorded
stock option expense of $124,000 in the first quarter of 2006 under the new
stock-based compensation accounting rules adopted on January 1, 2006.
Approximately $97,000 of this expense was for options granted to certain
employees in 2006 deemed vested for expense recognition due to the implicit
service period under Peoples' stock option plans. Marketing expense was up 25%
in the first quarter of 2006, largely attributable to costs associated with
Peoples' deposit growth campaign implemented in late 2005. Compared to the
fourth quarter of 2005, non-interest expense grew 4%, as the expected increase
in salaries and benefits was offset by decreases in several major expense areas,
including occupancy and equipment costs, state franchise taxes and intangible
amortization expense.
"We are comfortable with the increase in non-interest expense in the
first quarter, as well as the improved efficiency ratio and better than expected
financial results," stated Bradley. "We remain committed to controlling expenses
to help mitigate the impact of interest rate pressures on our earnings."
Peoples' effective tax rate was 28.4% for the first quarter of 2006
versus 26.6% a year ago. The increase in the effective rate was due to higher
pre-tax income without a comparable increase in tax-exempt income and reflects
management's current estimate of the approximate annual effective rate for 2006.
At March 31, 2006, portfolio loans totaled $1.08 billion, up $7.2
million from the prior year-end balance. Much of this increase was the result of
commercial loan originations, while consumer loan balances (primarily indirect
loans), excluding overdrafts, grew $1.9 million, representing the fourth
consecutive quarter of consumer loan growth. As part of its mortgage banking
activities, Peoples was servicing $147.4 million of fixed-rate real estate loans
at March 31, 2006, that were sold to the secondary market, compared to $144.3
million at December 31, 2005.
"Continued demand for loans in key markets and lower than expected
payoffs were key factors in loan growth during the quarter," commented Bradley.
"Lending opportunities exist in our markets, and our lenders are focused on
originating quality loans."
Nonperforming loans were $6.0 million, or 0.56% of total loans, at
March 31, 2006, down from $6.5 million, or 0.61%, at December 31, 2005. Total
nonperforming assets declined $760,000 during the first quarter of 2006 to $6.1
million, or 0.33% of total assets, compared to $6.8 million, or 0.37% at the end
of 2005. Due largely to the decline in nonperforming loans, the allowance for
loan losses grew to 242.7% of nonperforming loans at quarter-end, compared to
225.2% at December 31, 2005.
At March 31, 2006, total deposits were $1.14 billion, up $50.3 million
from $1.09 billion at year-end 2005. Interest-bearing deposits grew $46.3
million to $972.8 million, due to higher certificates of deposit balances
resulting from certain promotional offerings and an increase in brokered
deposits. As a result of the deposit growth campaign initiated in late 2005,
non-interest-bearing deposits grew $4.1 million in the first quarter of 2006,
totaling $166.8 million at March 31, 2006.
"Overall, our first quarter results provide the foundation for solid
earnings momentum," summarized Bradley. "We continue to build on recent success
to create long-term shareholder value, as we work through difficult operating
conditions that include industry-wide interest rate pressures and intense
competition for loans and deposits."
Peoples Bancorp Inc., a diversified financial products and services
company with $1.9 billion in assets, makes available a complete line of banking,
investment, insurance, and trust solutions through 48 locations and 34 ATMs in
Ohio, West Virginia and Kentucky. Peoples' financial service units include
Peoples Bank, Peoples Financial Advisors (a division of Peoples Bank) and
Peoples Insurance Agency, Inc. Peoples' common shares are traded on the NASDAQ
National 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 first
quarter of 2006 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 (877) 407-8033. 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
or 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.
Safe Harbor Statement:
- ---------------------
This press 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 press release, the matters
discussed in this press release, and other statements identified by words such
as "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) competitive pressures among depository institutions which may
increase significantly; (2) changes in the interest rate environment which may
adversely impact interest margins; (3) prepayment speeds, loan originations and
sale volumes, charge-offs and loan loss provisions may be less favorable than
expected; (4) general economic conditions may be less favorable than expected;
(5) political developments, wars or other hostilities may disrupt or increase
volatility in securities markets or other economic conditions; (6) legislative
or regulatory changes or actions may adversely affect Peoples' business; (7)
changes and trends in the securities markets; (8) a delayed or incomplete
resolution of regulatory issues that could arise; (9) the impact of reputational
risk created by these developments on such matters as business generation and
retention, funding and liquidity; (10) 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; (11) the
integration of acquired businesses may not be successful or the integration may
take longer to accomplish than expected; (12) the expected synergies from
acquisitions may make it difficult to maintain relationships with clients,
associates and suppliers; and (13) 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 disclosure under the heading "ITEM 1A. RISK FACTORS" of Peoples'
Annual Report on Form 10-K for the fiscal year ended December 31, 2005. Peoples
does not commit to any obligation to release revisions to these forward-looking
statements or reflect events or circumstances after the date of this release,
except as required by applicable law. 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.
PEOPLES BANCORP INC. (NASDAQ: PEBO)
Financial Highlights (Unaudited)
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Three Months Ended
March 31, December 31, March 31,
(in $000's, except per share data) 2006 2005 2005
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PER SHARE DATA
Net income per share:
Basic $ 0.56 $ 0.54 $ 0.45
Diluted $ 0.56 $ 0.53 $ 0.44
Cash dividends declared per share $ 0.20 $ 0.20 $ 0.19
Book value per share $ 17.51 $ 17.40 $ 16.61
Tangible book value per share (a) $ 11.00 $ 10.82 $ 9.84
Closing stock price at end of period $ 30.00 $ 28.53 $ 26.90
Dividend payout as a percentage of net income 35.74% 37.34% 42.39%
Actual shares outstanding (net of treasury shares) 10,543,483 10,518,980 10,393,879
Weighted average shares outstanding:
Basic 10,530,444 10,501,679 10,419,189
Diluted 10,655,233 10,631,310 10,558,003
PERFORMANCE RATIOS (b)
Return on average equity 13.02% 12.50% 10.85%
Return on average assets 1.30% 1.21% 1.05%
Efficiency ratio (c) 56.67% 57.09% 59.60%
Net interest margin (fully-tax equivalent) 3.40% 3.39% 3.27%
Net loan charge-offs as a percentage of average loans 0.12% 0.20% 0.20%
----------------- ----------------- ----------------
<FN>
(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).
</FN>
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Three Months Ended
March 31, December 31, March 31,
(in $000's, except per share data) 2006 2005 2005
------------------------------------------------------
PROVISION FOR LOAN LOSSES
Provision for Overdraft Privilege losses $ 56 $ 212 $ 30
Provision for other loan losses $ 212 $ 350 $ 911
----------------- ----------------- ----------------
Total provision for loan losses $ 268 $ 562 $ 941
NET CHARGE-OFFS
Gross charge-offs $ 653 $ 1,103 $ 1,068
Recoveries 337 553 569
----------------- ----------------- ----------------
Net charge-offs $ 316 $ 550 $ 499
Commercial $ 137 $ 143 $ 43
Overdrafts 104 199 88
Real estate 90 113 315
Consumer (13) 97 61
Credit card (2) (2) (8)
----------------- ----------------- ----------------
Total net charge-offs $ 316 $ 550 $ 499
----------------- ----------------- ----------------
PEOPLES BANCORP INC. CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST INCOME
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Three Months Ended
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March 31, 2006 December 31, 2005 March 31, 2005
------------------------------- ------------------------------- -----------------------------
(in $000's) Balance Income/ExpeYield/ Balance Income/ExpYield/ Balance Income/ExpeYield/
Cost Cost Cost
-----------------------------------------------------------------------------------------------
Short-term investments $ 3,972 $ 40 4.05% $ 2,612 $ 23 3.51% $ 2,567 $ 12 1.80%
Investment securities (a) 587,564 7,141 4.86 599,373 7,149 4.77 599,467 6,698 4.47
Gross loans (a) 1,072,563 18,997 7.09 1,066,308 18,639 6.96 1,023,825 16,327 6.47
Allowance for loan losses (14,834) (14,707) (14,850)
------------------------------- ------------------------------- -----------------------------
Total earning assets 1,649,265 26,178 6.40% 1,653,586 25,811 6.22% 1,611,009 23,037 5.76%
Intangible assets 68,980 69,594 70,614
Other assets 129,345 130,215 127,746
------------ ------------ ------------
Total assets 1,847,590 1,853,395 1,809,369
Interest-bearing deposits:
Savings 127,596 198 0.63% 136,287 249 0.72% 154,344 290 0.76%
Interest-bearing demand deposits 289,206 1,596 2.24 299,761 1,582 2.09 279,319 1,007 1.46
Time deposits 538,934 4,848 3.65 496,316 4,255 3.40 495,992 3,808 3.11
------------------------------- ------------------------------- -----------------------------
Total interest-bearing deposits 955,736 6,642 2.82 932,364 6,086 2.59 929,655 5,105 2.23
Short-term borrowings 165,332 1,767 4.33 170,696 1,652 3.84 91,945 546 2.41
Long-term borrowings 361,385 3,836 4.25 393,116 4,114 4.19 439,523 4,280 3.90
------------------------------- ------------------------------- -----------------------------
Total borrowed funds 526,717 5,603 4.28 563,812 5,766 4.02 531,468 4,826 3.66
------------------------------- ------------------------------- -----------------------------
Total interest-bearing 1,482,453 12,245 3.34% 1,496,176 11,852 3.13% 1,461,123 9,931 2.75%
liabilities
Non-interest-bearing deposits 164,722 162,312 155,607
Other liabilities 15,715 15,166 17,235
------------ ------------ ------------
Total liabilities 1,662,890 1,673,654 1,633,965
Stockholders' equity 184,700 179,741 175,404
------------ ------------ ------------
Total liabilities and equity $ 1,847,590 $ 1,853,395 $ 1,809,369
Net interest income/spread (a) $ 13,933 3.06% $ 13,959 3.09% $ 13,106 3.01%
Net interest margin (a) 3.40% 3.39% 3.27%
-----------------------------------------------------------------------------------------------
<FN>
(a) Information presented on a fully tax-equivalent basis.
</FN>
PEOPLES BANCORP INC. CONSOLIDATED STATEMENTS OF INCOME
----------------------------------
Three Months Ended
March 31,
(in $000's) 2006 2005
-------------------------------
Interest income $ 25,748 $ 22,643
Interest expense 12,245 9,931
---------------- ----------------
Net interest income 13,503 12,712
Provision for loan losses 268 941
---------------- ----------------
Net interest income after provision for loan losses 13,235 11,771
Net gain on securities transactions - 233
Net gain on asset disposals 18 8
Non-interest income:
Insurance and investment commissions 3,375 2,654
Service charges on deposits 2,461 2,274
Fiduciary revenues 777 757
Electronic banking revenues 697 647
Business owned life insurance 406 454
Mortgage banking income 170 117
Other non-interest income 210 224
---------------- ----------------
Total non-interest income 8,096 7,127
Non-interest expense:
Salaries and benefits 6,912 6,686
Net occupancy and equipment 1,242 1,289
Professional fees 612 665
Amortization of intangible assets 582 688
Marketing 475 381
Data processing and software 468 461
Franchise taxes 445 411
Bankcard costs 289 282
Other non-interest expense 2,041 1,884
---------------- ----------------
Total non-interest expense 13,066 12,747
---------------- ----------------
Income before income taxes 8,283 6,392
Income tax expense 2,352 1,700
---------------- ----------------
Net income $ 5,931 $ 4,692
---------------- ----------------
PEOPLES BANCORP INC. SELECTED FINANCIAL INFORMATION
---------------- ---------------- ----------------
(in $000's, end of period) March 31, December 31, March 31,
2006 2005 2005
---------------- ---------------- ----------------
LOAN PORTFOLIO
Commercial, mortgage $ 466,707 $ 504,923 $ 457,667
Commercial, other 182,801 136,331 128,898
Real estate, construction 52,698 50,745 32,120
Real estate, mortgage 310,048 316,081 334,681
Consumer 66,773 63,796 59,634
---------------- ---------------- ----------------
Total loans $ 1,079,027 $ 1,071,876 $ 1,013,000
DEPOSIT BALANCES
Interest-bearing deposits:
Retail certificates of deposit $ 493,235 $ 465,148 $ 451,359
Interest-bearing transaction accounts 183,411 178,030 187,034
Savings accounts 129,556 131,221 151,592
Money market deposit accounts 106,367 110,372 111,224
Brokered certificates of deposits 60,255 41,786 44,837
---------------- ---------------- ----------------
Total interest-bearing deposits 972,824 926,557 946,046
Non-interest-bearing deposits 166,782 162,729 157,087
---------------- ---------------- ----------------
Total deposits $ 1,139,606 $ 1,089,286 $ 1,103,133
---------------- ---------------- ----------------
ASSET QUALITY
Nonperforming assets (in $000's, end of period):
Loans 90 days or more past due $ - $ 251 $ 84
Renegotiated loans - - 1,116
Nonaccrual loans 6,045 6,284 6,105
Other real estate owned 38 308 873
---------------- ---------------- ----------------
Total nonperforming assets $ 6,083 $ 6,843 $ 8,178
Allowance for loan losses as a percent of
nonperforming loans (a) 242.7% 225.2% 208.1%
Nonperforming loans as a percent of total loans (a) 0.56% 0.61% 0.72%
Nonperforming assets as a percent of total assets 0.33% 0.37% 0.46%
Nonperforming assets as a percent of total loans and
other real estate owned 0.56% 0.64% 0.81%
Allowance for loan losses as a percent of total loans 1.36% 1.37% 1.50%
REGULATORY CAPITAL (b)
Tier 1 risk-based capital 11.97% 11.60% 11.16%
Total risk-based capital ratio (Tier 1 and Tier 2) 13.26% 12.91% 12.52%
Leverage ratio 8.40% 8.10% 7.60%
Tier 1 capital $ 150,032 $ 144,994 $ 131,546
Total capital (Tier 1 and Tier 2) $ 166,215 $ 161,356 $ 147,516
Total risk-weighted assets $ 1,253,343 $ 1,250,105 $ 1,178,647
SUPPLEMENTAL DATA
Trust assets under management $ 684,659 $ 658,708 $ 626,829
Mortgage loans serviced for others 147,389 144,339 124,078
Employees (full-time equivalent) 525 531 530
Announced treasury share plans: (c)
Total shares authorized for plan 400,000 525,000 525,000
Shares purchased - - 59,700
Average price $ - $ - $ 26.78
---------------- ---------------- ----------------
<FN>
(a) Nonperforming loans include loans 90 days past due and accruing,
renegotiated loans and nonaccrual loans.
(b) March 31, 2006, data based on preliminary analysis and is subject
to revision.
(c) 2006 data reflects 2006 Stock Repurchase Program of 400,000 shares.
2005 data reflects 2005 Stock Repurchase Program of 525,000 shares.
The amount of shares purchased for treasury and average price paid
are presented for the three-month period ended on the date indicated.
</FN>
PEOPLES BANCORP INC. CONSOLIDATED BALANCE SHEETS
------------------ ------------------
(in $000's) March 31, December 31,
2006 2005
------------------ ------------------
ASSETS Cash and cash equivalents:
Cash and due from banks $ 32,779 $ 35,564
Interest-bearing deposits in other banks 904 1,084
Federal funds sold 2,000 3,000
------------------ ------------------
Total cash and cash equivalents 35,683 39,648
Available-for-sale investment securities, at estimated fair value
(amortized cost of $594,876 at March 31, 2006 and $591,022
at December 31, 2005) 588,787 589,313
Loans, net of unearned interest 1,079,027 1,071,876
Allowance for loan losses (14,672) (14,720)
------------------ ------------------
Net loans 1,064,355 1,057,156
Loans held for sale 1,910 1,103
Bank premises and equipment, net of accumulated depreciation 23,163 23,486
Business owned life insurance 47,399 46,993
Goodwill 59,773 59,767
Other intangible assets 8,917 9,513
Other assets 30,539 28,298
------------------ ------------------
TOTAL ASSETS $ 1,860,526 $ 1,855,277
------------------ ------------------
LIABILITIES
Non-interest-bearing deposits $ 166,782 $ 162,729
Interest-bearing deposits 972,824 926,557
------------------ ------------------
Total deposits 1,139,606 1,089,286
Federal funds purchased, securities sold under repurchase agreements,
and other short-term borrowings 194,038 173,696
Long-term borrowings 294,660 362,466
Junior subordinated notes held by subsidiary trusts 29,372 29,350
Accrued expenses and other liabilities 18,181 17,402
------------------ ------------------
TOTAL LIABILITIES 1,675,857 1,672,200
STOCKHOLDERS' EQUITY
Common stock, no par value (24,000,000 shares authorized, 10,874,222 shares
issued at March 31, 2006, and
10,869,655 shares issued at December 31, 2005) 162,345 162,231
Retained earnings 34,551 30,740
Accumulated comprehensive (loss) income, net of deferred income taxes (3,962) (1,116)
Treasury stock, at cost (330,739 shares at March 31, 2006,
and 350,675 shares at December 31, 2005) (8,265) (8,778)
------------------ ------------------
TOTAL STOCKHOLDERS' EQUITY 184,669 183,077
------------------ ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,860,526 $ 1,855,277
------------------ ------------------
END OF RELEASE