PEOPLES BANCORP INC. - P.O. BOX 738 - MARIETTA, OHIO - 45750
www.peoplesbancorp.com
NEWS RELEASE
FOR IMMEDIATE RELEASE Contact:Donald J. Landers
- --------------------- Chief Financial Officer
October 24, 2006 (740) 373-3155
PEOPLES BANCORP INC. REPORTS THIRD QUARTER RESULTS
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MARIETTA, Ohio - Peoples Bancorp Inc. ("Peoples") (NASDAQ: PEBO) today
reported net income of $5.3 million and diluted earnings per share of $0.50 for
the third quarter of 2006, which matched the amounts reported for the third
quarter of 2005. For the third quarter of 2006, Peoples achieved a return on
average equity of 11.05% and return on average assets of 1.13%, versus 11.61%
and 1.14%, respectively, a year ago.
"Our third quarter results were highlighted by higher non-interest
income, strong loan growth, lower effective tax rate and a gain on the sale of a
branch," commented Mark F. Bradley, President and Chief Executive Officer.
"Third quarter results also reflect the interest rate challenges affecting the
financial services industry due to intense competition for loans and deposits,
coupled with higher loan loss provision associated with recent trends in loan
quality."
For the nine months ended September 30, 2006, Peoples' net income
totaled $16.8 million, up 13% from $14.8 million through nine months of 2005,
while diluted earnings per share were $1.57 and $1.40, respectively, a 12%
increase. This improvement in net income and earnings per share from a year ago
was the result of higher net interest income and non-interest revenues, coupled
with lower non-interest expenses. Return on average equity and return on average
assets improved to 11.97% and 1.20%, respectively, from 11.19% and 1.09%,
respectively, for the same period a year ago.
Bradley continued, "In the third quarter, we completed the previously
announced sale of our South Shore, Kentucky banking office and its approximately
$5 million in deposits and $645,000 in loans, resulting in a pre-tax gain of
$232,000. We continue to serve customers in northern Kentucky through our
remaining five Kentucky offices."
Non-interest income totaled $7.3 million for the third quarter of 2006
versus $7.1 million a year ago, due to increased deposit account service charges
and electronic banking revenues. On a year-to-date basis, non-interest income
grew 7%, or $1.5 million, from a year ago, to $23.0 million, due to higher
insurance revenues, deposit account service charges and electronic banking
income. The improvements in non-interest income for the third quarter and first
nine months of 2006 were partially offset by lower mortgage banking income and
business owned life insurance, both of which have been negatively impacted by
the current interest rate environment.
Total non-interest expense increased by 2% in the third quarter of 2006
to $12.8 million compared to 2005's third quarter. Additional maintenance and
utility costs, along with marketing costs associated with Peoples' deposit
direct mail and gift program comprised the majority of the increase for the
third quarter. Tempering this increase were lower salaries and benefit costs as
a result of salaries included in direct loan origination costs. Through nine
months of 2006, non-interest expense was down slightly compared to the same
period in 2005, due primarily to declines in salaries and benefit costs and
intangible amortization.
"While still not at targeted levels, we believe the overall expense
growth in the third quarter was reasonable," stated Bradley. "Our efforts to
diversify revenues also have helped to mitigate the effect of interest rate
challenges on earnings. We will continue to seek opportunities to improve
operating efficiency and allocate resources to markets we believe have greater
potential to increase long-term shareholder value."
In the third quarter of 2006, net interest income was $12.9 million,
down 2% from the $13.2 million generated in the third quarter of 2005. While a
higher volume of earning assets generated additional interest income,
competitive loan pricing, combined with maturing deposits and debt being
replaced at higher, current market interest rates, caused Peoples' funding costs
to rise faster than yields on earning assets. Peoples' net interest margin was
3.20% for the third quarter of 2006, compared to 3.32% a year ago and 3.29% for
the prior quarter. Both net interest income and net interest margin for the
third quarter of 2006 were also negatively impacted by Peoples placing $4.5
million of loans from a single commercial relationship on nonaccrual status,
resulting in the reversal of $97,000 of interest income in the third quarter of
2006. On a year-to-date basis, net interest income totaled $39.8 million versus
$38.8 million a year ago, while Peoples' net interest margin dropped one basis
point to 3.29%.
"Our third quarter net interest income and margin levels reflect the
competitive interest rate environment in our markets and were in line with our
expectations," said Don Landers, Chief Financial Officer. "We feel that the
recent pauses by the Federal Reserve could ease some of the interest rate
pressure and provide limited spread improvement in some segments of the yield
curve. Still, improving net interest income and margin will depend in part on
our ability to grow lower cost core deposits and reduce our reliance on
wholesale funding, while continuing to fund higher yielding loans with cash
flows from our investment portfolio."
For the nine months ended September 30, 2006, Peoples' effective tax
rate was 26.6% compared to 27.2% for the same period a year ago. The reduction
in the effective tax rate produced an effective tax rate of 21.7% for the third
quarter of 2006. The change in the estimated effective tax rate was attributable
to additional alternative minimum tax credits expected to be realized in 2006.
The effective tax rate of 26.6% for the first nine months of 2006 is
management's current estimate of Peoples' effective rate for full year 2006.
During the third quarter of 2006, portfolio loans grew $25.6 million,
or 9% annualized, to $1.14 billion at September 30, 2006. Commercial real estate
originations continue to represent the main driver of loan growth, while
consumer loan balances, excluding overdrafts, grew for the sixth consecutive
quarter, with indirect lending providing the majority of the $2.4 million of
growth in the third quarter. Since year-end 2005, total portfolio loans have
increased $68.0 million, from $1.07 billion.
"Third quarter loan growth was the result of the successful efforts of
our lenders to capitalize on lending opportunities in our more dynamic markets,"
said Bradley. "Additionally, loan payoffs have been below our expectations
through the first nine months of 2006. However, during October, we have already
experienced significant commercial loan payoffs that will challenge fourth
quarter loan growth."
At September 30, 2006, nonperforming loans totaled $14.2 million, or
1.25% of total loans, up from $10.4 million, or 0.93% at June 30, 2006 and $6.5
million, or 0.61% at year-end 2005. The third quarter increase in nonperforming
loans was the result of the previously mentioned $4.5 million of commercial
loans being placed on nonaccrual status, partially offset by reductions in other
nonaccrual loans due to payments and charge-offs.
At September 30, 2006, the allowance for loan losses was $16.1 million,
or 113.5% of nonperforming loans, versus 148.0% and 225.2% of nonperforming
loans at June 30, 2006 and December 31, 2005, respectively. In the third quarter
of 2006, the provision for loan losses was $929,000 compared to $573,000 last
quarter and $485,000 in the third quarter of 2005, with provisions relating to
overdrafts accounting for $254,000, $250,000 and $175,000 for the same periods,
respectively. The higher provision for loan losses for the third quarter of 2006
was based on management's in-depth quarterly analysis of the loan portfolio and
loss trends and is directionally consistent with changes in Peoples' loan credit
quality. Net charge-offs were $126,000 in the third quarter of 2006 compared to
$505,000 for last year's third quarter and net recoveries of $86,000 in the
second quarter of 2006.
"The higher level of nonperforming loans since year end is attributed
to two commercial loan relationships," added Bradley. "We have considered these
relationships in our evaluation of the adequacy of the allowance for loan losses
at quarter-end. We expect net charge-offs will be higher in the fourth quarter
of 2006, which will reduce a portion of one of the groups of nonaccrual loans.
The other group of loans totaling $3.6 million are well collateralized and we do
not expect to incur any losses on that commercial loan relationship."
Deposit balances were up 7% to $1.23 billion at September 30, 2006,
compared to $1.15 billion at June 30, 2006. During the third quarter, Peoples
increased brokered deposits by $68.6 million to reduce its reliance on Federal
Home Loan Bank borrowings and diversify wholesale funding sources.
Interest-bearing deposits, excluding brokered deposits, grew $10.3 million with
most of the growth occurring in money market deposits. Non-interest-bearing
deposits were $166.5 million at September 30, 2006, versus $169.9 million at
June 30, 2006, attributable to a decline in commercial deposit balances that
offset higher consumer balances from Peoples' deposit growth campaign initiated
in late 2005. Since year-end 2005, total deposits, excluding brokered deposits,
have increased $53.5 million due primarily to increases in certificates of
deposits and money market accounts.
"In the fourth quarter, we will continue to work through the interest
rate challenges affecting our ability to grow earnings," said Bradley. "We
believe our strategies will be successful in creating long-term value for our
shareholders."
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 35 ATMs in
Ohio, West Virginia and Kentucky. Peoples' financial service units include
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 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 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
"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 financial institutions or from
non-financial 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 in the conditions 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; and (11) 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 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 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 Nine Months Ended
September 30, June 30, September 30, September 30,
(in $000's, except per share data) 2006 2006 2005 2006 2005
----------------------------------------------- -----------------------------
PER SHARE DATA Net income per share:
Basic $ 0.50 $ 0.52 $ 0.50 $ 1.59 $ 1.42
Diluted $ 0.50 $ 0.52 $ 0.50 $ 1.57 $ 1.40
Cash dividends declared per share $ 0.21 $ 0.21 $ 0.20 $ 0.62 $ 0.58
Book value per share $ 18.46 $ 17.60 $ 17.17 $ 18.46 $ 17.17
Tangible book value per share (a) $ 11.99 $ 11.03 $ 10.50 $ 11.99 $ 10.50
Closing stock price at end of period $ 29.23 $ 29.84 $ 27.63 $ 29.23 $ 27.63
Dividend payout as a percentage of net income 42.31% 40.44% 40.02% 39.38% 41.02%
Actual shares outstanding 10,664,603 10,600,413 10,487,752 10,664,603 10,487,752
Weighted average shares outstanding:
Basic 10,638,824 10,591,926 10,451,578 10,587,462 10,425,704
Diluted 10,748,996 10,714,030 10,591,470 10,709,312 10,563,753
PERFORMANCE RATIOS (b)
Return on average equity 11.05% 11.88% 11.61% 11.97% 11.19%
Return on average assets 1.13% 1.18% 1.14% 1.20% 1.09%
Efficiency ratio (c) 59.04% 56.25% 57.37% 57.30% 59.72%
Net interest margin (fully-tax equivalent) 3.20% 3.29% 3.32% 3.29% 3.30%
Net loan charge-offs (recoveries) as a
percentage of average loans 0.04% (0.03%) 0.19% 0.04% 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>
PEOPLES BANCORP INC. CONSOLIDATED STATEMENTS OF INCOME
----------------------------- ----------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
(in $000's) 2006 2005 2006 2005
----------------------------- ----------------------------
Interest income $ 27,649 $ 24,355 $ 80,403 $ 70,395
Interest expense 14,706 11,205 40,652 31,617
-------------- -------------- ------------- -------------
Net interest income 12,943 13,150 39,751 38,778
Provision for loan losses 929 485 1,770 1,466
-------------- -------------- ------------- -------------
Net interest income after provision for loan losses 12,014 12,665 37,981 37,312
Net gain on securities transactions 2 - 6 236
Net (loss) gain on asset disposals (6) (9) 34 112
Gain on sale of banking office 232 - 232 -
Non-interest income:
Service charges on deposits 2,682 2,533 7,747 7,279
Insurance and investment commissions 2,177 2,266 8,028 7,186
Fiduciary revenues 829 794 2,524 2,466
Electronic banking revenues 792 706 2,288 2,087
Business owned life insurance 404 423 1,209 1,314
Mortgage banking income 165 275 578 656
Other 273 130 627 468
-------------- -------------- ------------- -------------
Total non-interest income 7,322 7,127 23,001 21,456
Non-interest expense:
Salaries and benefits 6,445 6,608 19,789 20,530
Net occupancy and equipment 1,377 1,215 3,829 3,842
Professional fees 547 454 1,822 1,669
Amortization of intangible assets 556 661 1,705 2,023
Data processing and software 457 487 1,401 1,411
Franchise taxes 445 425 1,336 1,254
Marketing 398 299 1,286 1,088
Bankcard costs 333 284 940 871
Other 2,208 2,103 6,281 6,035
-------------- -------------- ------------- -------------
Total non-interest expense 12,766 12,536 38,389 38,723
-------------- -------------- ------------- -------------
Income before income taxes 6,798 7,247 22,865 20,393
Income tax expense 1,476 1,979 6,076 5,555
-------------- -------------- ------------- -------------
Net income $ 5,322 $ 5,268 $ 16,789 $ 14,838
============== ============== ============= =============
PEOPLES BANCORP INC. SELECTED FINANCIAL INFORMATION
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Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30,
(in $000's) 2006 2006 2005 2006 2005
------------------------------------------------ --------------------------
PROVISION FOR LOAN LOSSES
Provision for Overdraft Privilege losses $ 254 $ 250 $ 175 $ 560 $ 387
Provision for other loan losses 675 323 310 1,210 1,079
---------------- ------------ ---------------- ------------ ------------
Total provision for loan losses $ 929 $ 573 $ 485 $ 1,770 $ 1,466
NET CHARGE-OFFS
Gross charge-offs $ 628 $ 521 $ 918 $ 1,802 $ 3,090
Recoveries 502 607 413 1,446 1,572
---------------- ------------ ---------------- ------------ ------------
Net charge-offs (recoveries) $ 126 $ (86) $ 505 $ 356 $ 1,518
Overdrafts $ 234 $ 173 $ 195 $ 511 $ 439
Consumer 77 42 60 106 166
Real estate (29) (202) 49 (141) 490
Commercial (155) (98) 203 (116) 447
Credit card (1) (2) (4) (24)
(1)
---------------- ------------ ---------------- ------------ ------------
Total net charge-offs (recoveries) $ 126 $ (86) $ 505 $ 356 $ 1,518
---------------- ------------ ---------------- ------------ ------------
PEOPLES BANCORP INC. CONSOLIDATED BALANCE SHEETS
------------------ ------------------
(in $000's) September 30, December 31,
2006 2005
------------------ ------------------
ASSETS Cash and cash equivalents:
Cash and due from banks $ 32,477 $ 35,564
Interest-bearing deposits in other banks 1,036 1,084
Federal funds sold 1,300 3,000
------------------ ------------------
Total cash and cash equivalents 34,813 39,648
Available-for-sale investment securities, at estimated fair value
(amortized cost of $558,886 at September 30, 2006 and $591,022
at December 31, 2005) 557,137 589,313
Loans, net of unearned interest 1,139,852 1,071,876
Allowance for loan losses (16,134) (14,720)
------------------ ------------------
Net loans 1,123,718 1,057,156
Loans held for sale 980 1,103
Bank premises and equipment, net of accumulated depreciation 22,848 23,486
Business owned life insurance 48,203 46,993
Goodwill 61,260 59,767
Other intangible assets 7,793 9,513
Other assets 29,782 28,298
------------------ ------------------
TOTAL ASSETS $ 1,886,534 $ 1,855,277
================== ==================
LIABILITIES
Non-interest-bearing deposits $ 166,505 $ 162,729
Interest-bearing deposits 1,061,099 926,557
------------------ ------------------
Total deposits 1,227,604 1,089,286
Federal funds purchased, securities sold under repurchase agreements,
and other short-term borrowings 226,281 173,696
Long-term borrowings 188,107 362,466
Junior subordinated notes held by subsidiary trusts 29,391 29,350
Accrued expenses and other liabilities 18,270 17,402
------------------ ------------------
TOTAL LIABILITIES 1,689,653 1,672,200
STOCKHOLDERS' EQUITY
Common stock, no par value (24,000,000 shares authorized, 10,884,241 shares
issued at September 30, 2006, and
10,869,655 shares issued at December 31, 2005) 162,506 162,231
Retained earnings 40,918 30,740
Accumulated comprehensive loss, net of deferred income taxes (1,141) (1,116)
Treasury stock, at cost (219,638 shares at September 30, 2006,
and 350,675 shares at December 31, 2005) (5,402) (8,778)
------------------ ------------------
TOTAL STOCKHOLDERS' EQUITY 196,881 183,077
------------------ ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,886,534 $ 1,855,277
================== ==================
PEOPLES BANCORP INC. SELECTED FINANCIAL INFORMATION
---------------- ---------------- ---------------- ----------------
(in $000's, end of period) September 30, June 30, December 31, September 30,
2006 2006 2005 2005
---------------- ---------------- ---------------- ----------------
LOAN PORTFOLIO
Commercial, mortgage $ 488,278 $ 484,486 $ 504,923 $ 493,954
Commercial, other 194,227 187,296 136,331 135,568
Real estate, construction 81,572 66,627 50,745 45,299
Real estate, mortgage 299,444 305,199 316,081 322,975
Consumer 76,331 70,605 63,796 62,760
---------------- ---------------- ---------------- ----------------
Total loans $ 1,139,852 $ 1,114,213 $ 1,071,876 $ 1,060,556
DEPOSIT BALANCES
Interest-bearing deposits:
Retail certificates of deposit $ 498,564 $ 499,448 $ 465,148 $ 446,308
Interest-bearing transaction accounts 180,124 177,905 178,030 195,503
Money market deposit accounts 136,344 123,513 110,372 114,366
Brokered certificates of deposits 126,605 57,969 41,786 44,854
Savings accounts 119,462 123,293 131,221 136,979
---------------- ---------------- ---------------- ----------------
Total interest-bearing deposits 1,061,099 982,128 926,557 938,010
Non-interest-bearing deposits 166,505 169,903 162,729 158,892
---------------- ---------------- ---------------- ----------------
Total deposits $ 1,227,604 $ 1,152,031 $ 1,089,286 $ 1,096,902
ASSET QUALITY
Nonperforming assets:
Loans 90 days or more past due $ 177 $ 808 $ 251 $ 137
55555
Renegotiated loans 810 - - -
Nonaccrual loans 13,227 9,548 6,284 5,791
---------------- ---------------- ---------------- ----------------
Total nonperforming loans 14,214 10,356 6,535 5,928
Other real estate owned 34 130 308 2,259
---------------- ---------------- ---------------- ----------------
Total nonperforming assets $ 14,248 $ 10,486 $ 6,843 $ 8,187
Allowance for loan losses as a percent of
nonperforming loans 113.5% 148.0% 225.2% 248.1%
Nonperforming loans as a percent of total loans 1.25% 0.93% 0.61% 0.56%
Nonperforming assets as a percent of total assets 0.76% 0.56% 0.37% 0.44%
Nonperforming assets as a percent of total loans and
other real estate owned 1.25% 0.94% 0.64% 0.77%
Allowance for loan losses as a percent of total loans 1.42% 1.38% 1.37% 1.39%
REGULATORY CAPITAL (a)
Tier 1 risk-based capital 12.00% 11.95% 11.60% 11.34%
Total risk-based capital ratio (Tier 1 and Tier 2) 13.33% 13.26% 12.91% 12.65%
Leverage ratio 8.78% 8.46% 8.10% 7.92%
Tier 1 capital $ 159,077 $ 153,806 $ 144,994 $ 140,295
Total capital (Tier 1 and Tier 2) $ 176,724 $ 170,650 $ 161,226 $ 156,612
Total risk-weighted assets $ 1,325,303 $ 1,286,754 $ 1,249,378 $ 1,237,658
---------------- ---------------- ---------------- ----------------
<FN>
(a) September 30, 2006, data based on preliminary analysis and is subject to
revision.
</FN>
PEOPLES BANCORP INC. SUPPLEMENTAL INFORMATION
---------------- ---------------- ---------------- ----------------
(in $000's, except per share data) September 30, June 30, December 31, September 30,
2006 2006 2005 2005
---------------- ---------------- ---------------- ----------------
Trust assets under management $ 724,925 $ 711,135 $ 658,708 $ 655,991
Mortgage loans serviced for others $ 157,944 $ 154,447 $ 144,339 $ 140,639
Employees (full-time equivalent) 552 537 531 537
Announced treasury share plans: (a)
Total shares authorized for plan 425,000 425,000 525,000 525,000
Shares purchased - 14,000 - -
Average price $ - $ 28.00 $ - $ -
---------------- ---------------- ---------------- ----------------
<FN>
(a) 2006 data reflects the 2006 Stock Repurchase Program authorizing the
repurchase of up to 425,000 common shares. 2005 data reflects the 2005
Stock Repurchase Program authorizing the repurchase of up to 525,000 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.
</FN>
PEOPLES BANCORP INC. CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST INCOME
----------------------------------------------------------------------------------------------
Three Months Ended
----------------------------------------------------------------------------------------------
September 30, 2006 June 30, 2006 September 30, 2005
-------------------------------- ------------------------------- ---------------------------
(in $000's) Balance Income/ Yield/ Balance Income/ Yield/ Balance Income/ Yield/
Expense Cost Expense Cost Expense Cost
-------------------------------- ------------------------------- ---------------------------
Short-term investments $ 4,291 $ 53 4.96 % $ 3,747 $ 38 4.06 % $ 2,741 $ 21 2.91 %
Investment securities (a) 562,382 7,151 5.09 581,924 7,381 5.07 606,497 7,121 4.70
Gross loans (a) 1,123,290 20,858 7.38 1,104,839 20,012 7.26 1,044,668 17,635 6.75
Allowance for loan losses (15,507) (15,008) (14,717)
-------------------------------- ------------------------------- ----------------------------
Total earning assets 1,674,456 28,062 6.67 % 1,675,502 27,431 6.56 % 1,639,189 24,777 6.02 %
Intangible assets 69,332 68,557 70,215
Other assets 129,434 132,094 131,792
------------ ------------ ------------
Total assets 1,873,222 1,876,153 1,841,196
Interest-bearing deposits:
Savings 120,595 201 0.66 % 125,597 203 0.65 % 140,133 235 0.67 %
Interest-bearing demand deposits 311,405 2,150 2.74 290,323 1,755 2.42 308,782 1,472 1.89
Time deposits 596,006 6,444 4.29 556,319 5,476 3.95 490,213 4,063 3.29
-------------------------------- ------------------------------- ---------------------------
Total interest-bearing deposits 1,028,006 8,795 3.39 972,239 7,434 3.07 939,128 5,770 2.44
Short-term borrowings 236,967 3,120 5.27 227,983 2,756 4.84 148,142 1,301 3.48
Long-term borrowings 234,078 2,791 4.77 305,717 3,510 4.59 398,622 4,134 4.15
-------------------------------- ------------------------------- ---------------------------
Total borrowed funds 471,045 5,911 4.92 533,700 6,266 4.66 546,764 5,435 3.91
-------------------------------- ------------------------------- ---------------------------
Total interest-bearing 1,499,051 14,706 3.88 % 1,505,939 13,700 3.64 % 1,485,892 11,205 2.98 %
liabilities
Non-interest-bearing deposits 167,103 167,918 158,028
Other liabilities 16,071 15,411 17,317
------------ ------------ ------------
Total liabilities 1,682,225 1,689,268 1,661,237
Stockholders' equity 190,997 186,885 179,959
------------ ------------ ------------
Total liabilities and equity $1,873,222 $ 1,876,153 $ 1,841,196
Net interest income/spread (a) $ 13,356 2.79 % $ 13,731 2.92 % $13,572 3.04 %
Net interest margin (a) 3.20 % 3.29 % 3.32 %
----------------------------------------------------------------------------------------------
<FN>
(a) Information presented on a fully tax-equivalent basis.
</FN>
-----------------------------------------------------------------
Nine Months Ended
-----------------------------------------------------------------
September 30, 2006 September 30, 2005
-------------------------------- -------------------------------
(in $000's) Balance Income/ Yield/ Balance Income/ Yield/
Expense Cost Expense Cost
-----------------------------------------------------------------
Short-term investments $ 4,005 $ 132 4.38 % $ 2,785 $ 51 2.42 %
Investment securities (a) 577,198 21,672 5.01 601,222 20,893 4.63
Gross loans (a) 1,100,416 59,868 7.27 1,031,172 50,668 6.55
Allowance for loan losses (15,119) (15,004)
-------------------------------- -------------------------------
Total earning assets 1,666,500 81,672 6.54 % 1,620,175 71,612 5.90 %
Intangible assets 68,957 70,298
Other assets 130,292 129,933
------------ -------------
Total assets 1,865,749 1,820,406
Interest-bearing deposits:
Savings 124,571 602 0.65 % 147,535 790 0.72 %
Interest-bearing demand deposits 297,060 5,502 2.48 296,942 3,844 1.73
Time deposits 563,962 16,768 3.98 494,010 11,830 3.20
-------------------------------- -------------------------------
Total interest-bearing deposits 985,593 22,872 3.10 938,487 16,464 2.35
Short-term borrowings 210,357 7,643 4.84 114,030 2,573 3.02
Long-term borrowings 299,926 10,137 4.51 416,416 12,580 4.04
-------------------------------- -------------------------------
Total borrowed funds 510,283 17,780 4.61 530,446 15,153 3.79
-------------------------------- -------------------------------
Total interest-bearing liabilities 1,495,876 40,652 3.62 % 1,468,933 31,617 2.87 %
Non-interest-bearing deposits 166,590 157,473
Other liabilities 15,731 16,667
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Total liabilities 1,678,197 1,643,072
Stockholders' equity 187,552 177,334
------------ -------------
Total liabilities and equity $ 1,865,749 $ 1,820,406
Net interest income/spread (a) $ 41,020 2.92 % 39,995 3.03 %
Net interest margin (a) 3.29 % 3.30 %
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<FN>
(a) Information presented on a fully tax-equivalent basis.
</FN>
END OF RELEASE