EXHIBIT 99.1
The Peoples Holding Company (AMEX:PHC)
P.O. Box 709
Tupelo, MS 38801-0709
Phone: (662) 680-1001
Fax: (662) 680-1234
www.thepeoplesbankandtrust.com
Press Release
- --------------------------------------------------------------------
For additional information, contact:
Jim Gray
Executive Vice President, Investor Relations and Planning Director
(662) 680-1217
Stuart Johnson
Executive Vice President and Chief Financial Officer
(662) 680-1472
Date: October 16, 2002
PEOPLES HOLDING REPORTS RECORD CORE EARNINGS FOR SEVENTH CONSECUTIVE QUARTER
The Peoples Holding Company (the Company)(AMEX: PHC) reported today record
results for third quarter 2002, showing improved performance over the record
earnings announced for the comparable period in 2001. Earnings per share for the
third quarter were $.81, an increase of 22.73% from $.66 a year ago. Net income
for the third quarter was $4,544,000 compared to $3,842,000 for the same period
in 2001, an increase of 18.27%. Net interest income for third quarter 2002 was
up 9.88% while non-interest income increased 13.17% for the same period.
Annualized return on average equity for the third quarter of 2002 was 14.00%
compared to 12.36% for the third quarter of 2001, an increase of 13.27%. For the
same periods, the annualized return on average assets was 1.38% and 1.25%
respectively, an increase of 10.40%.
According to Peoples President and CEO, E. Robinson McGraw, "The Company's
performance reflects an upward trend in earnings that began in the first quarter
of 2001. Our business plan has consistently produced record core earnings for
the entire year 2001 as well as for the first three quarters of 2002. Our 24
community banks have performed extremely well in view of the fact that these
seven consecutive quarters have been marked by the Federal Reserve's interest
rate decreases to 50-year lows in a continuing effort to boost consumer
confidence and stimulate a sluggish economy."
STOCK PRICE AND REPURCHASES
The market price of The Peoples Holding Company shares was $40.75 per share at
September 30, 2002, an increase of 21.68% from $33.49 at September 30, 2001.
The Company continues to repurchase shares, and since January 2002, has acquired
129,247 shares. This represents 2.27% of shares outstanding at an average
purchase price of $36.07. Since initiating a tender offer on April 16, 2001 to
purchase up to 604,312 shares, or approximately 10% of its common shares
outstanding, the Company has repurchased a total of approximately 467,000
shares.
FINANCIAL DETAILS
For third quarter 2002, the Company's net interest margin improved to 4.68% from
4.58% for the comparable period of 2001.
The provision for loan losses decreased to $1,125,000 for third quarter 2002
from $1,225,000 for the same period in 2001. Allowance for loan losses as a
percentage of loans was 1.44% at September 30, 2002 and 1.35% for the same
period of 2001. Net charge-offs for third quarter 2002 as a percentage of
average loans was .06% compared to .18% for the same period in 2001, a decrease
of 66.67%. Non-performing loans as a percentage of total loans decreased to .46%
for third quarter 2002 compared with .62% for the same period in 2001. The
Company's non-performing loan coverage ratio stood at 309.95% for the quarter
compared to 218.20% for third quarter 2001. Despite the sluggish economy, asset
quality has continued to improve as a result of credit scoring, central credit
analysis and central collections.
Total non-interest income has grown quarter to quarter and, for third quarter
2002 and 2001, totaled $6,985,000 and $6,172,000 respectively, an improvement of
13.17%. "Our consistent improvement in non-interest income demonstrates that we
are meeting the total financial needs of our clients and providing them
convenience and value through the sale of insurance and investment products as
well as traditional banking services," McGraw stated. The Company's non-interest
income has been generated primarily through a diversified revenue stream of
commissions on the sale of insurance and investments, loan fees, merchant
discount services, debit card income, service charges and fiduciary income.
Third quarter 2002 non-interest expense increased 6.48% over that of third
quarter 2001. This was due in part to consulting fees and computer depreciation
related to a number of recent technology upgrades; salary increases; and
increased insurance premiums. Net non-interest expense as a percentage of assets
has improved to 1.74% for third quarter 2002 as compared to 1.86% for the same
period in 2001.
The Company's efficiency ratio improved for the third quarter of 2002 to 60.44%
from 62.63% for the same period in 2001.
CONFERENCE CALL INFORMATION
A live audio Web cast of a conference call with analysts will be available
beginning at 9 A. M. Central time on Thursday, October 17 through the Investor
Relations page of our website, www.thepeoplesbankandtrust.com, through
www.streetevents.com or any of CCBN's distribution network. The event will be
archived for 90 days. The conference may also be heard live via telephone by
dialing 877-279-3019 and entering the conference I. D. number, 5662233. A
digital telephone recording of the conference call, available two hours after
the event and available for 48 hours, may be accessed by dialing 1-800-642-1687
or 706-645-9291 and entering the conference I. D. number, 5662233.
ABOUT THE HOLDING COMPANY
The Peoples Holding Company is the parent of Mississippi's fourth largest
commercial bank headquartered in the state. Through its wholly owned subsidiary,
The Peoples Bank & Trust Company, the Company is also parent of The Peoples
Insurance Agency, Inc. The Peoples Bank has assets of approximately $1.3 billion
and operates 40 community banking offices in 27 north and north central
Mississippi cities.
NOTE TO INVESTORS
This news release contains forward-looking statements regarding The Peoples
Holding Company. All forward-looking statements involve risk and uncertainty and
a number of factors could cause actual results to differ materially from the
anticipated results or other expectations expressed in the forward-looking
statements. Those factors include, but are not limited to, interest rate
fluctuation, regulatory changes, portfolio performance and other factors
discussed in our recent filings with the Securities and Exchange Commission
(SEC).
The Peoples Holding Company
Selected Financial Information
(Dollars in Thousands, Except Share Data)
Unaudited
For The Three Months For The Nine Months
Ended September 30, Ended September 30,
-------------------------------------- --------------------------------------
Core Earnings Summary * 2002 2001 % Change 2002 2001 % Change
----------------------- ----------- ----------- ---------- ----------- ----------- ----------
Reported net income ............................. $ 4,544 $ 3,842 18.27 % $ 11,798 $ 10,731 9.94 %
Goodwill amortization, net of tax ............... - 102 (100.00) - 306 (100.00)
Transitional goodwill impairment ................ - - - 1,300 - -
----------- ----------- ---------- ----------- ----------- ----------
Core net income ................................. $ 4,544 $ 3,944 15.21 % $ 13,098 $ 11,037 18.67 %
=========== =========== ========== =========== =========== ==========
Basic and diluted earnings per share:
Reported net income ............................. $ 0.81 $ 0.66 22.73 % $ 2.10 $ 1.81 16.02 %
Goodwill amortization, net of tax ............... - 0.02 (100.00) - 0.05 (100.00)
Transitional goodwill impairment ................ - - - 0.23 - -
----------- ----------- ---------- ----------- ----------- ----------
Core net income ................................. $ 0.81 $ 0.68 19.12 % $ 2.33 $ 1.86 25.27 %
=========== =========== ========== =========== =========== ==========
* The table above presents net income for the prior periods as reported as well
as core net income, which has been adjusted for the exclusion of goodwill
amortization and the cumulative effect of the transitional goodwill impairment.
For The Three Months For The Nine Months
Ended September 30, Ended September 30,
-------------------------------------- --------------------------------------
Earnings Summary 2002 2001 % Change 2002 2001 % Change
---------------- ----------- ----------- ---------- ----------- ----------- ----------
Interest income ................................. $ 19,707 $ 21,877 (9.92)% $ 59,207 $ 66,972 (11.59)%
Interest expense ................................ 6,554 9,907 (33.84) 20,364 32,366 (37.08)
----------- ----------- ---------- ----------- ----------- ----------
Net interest income ............................. 13,153 11,970 9.88 38,843 34,606 12.24
Provision for loan losses ....................... 1,125 1,225 (8.16) 3,325 3,475 (4.32)
Noninterest income .............................. 6,985 6,172 13.17 20,244 17,748 14.06
Noninterest expenses ............................ 12,642 11,873 6.48 37,466 34,303 9.22
----------- ----------- ---------- ----------- ----------- ----------
Income before taxes and cumulative effect
of accounting change ....................... 6,371 5,044 26.31 18,296 14,576 25.52
Income taxes .................................... 1,827 1,202 52.00 5,198 3,845 35.19
----------- ----------- ---------- ----------- ----------- ----------
Net income before cumulative effect
of accounting change ....................... 4,544 3,842 18.27 13,098 10,731 22.06
Cumulative effect of accounting change .......... - - - (1,300) - -
----------- ----------- ---------- ----------- ----------- ----------
Net income ...................................... $ 4,544 $ 3,842 18.27 % $ 11,798 $ 10,731 9.94 %
=========== =========== ========== =========== =========== ==========
Common Stock Data
-----------------
Earnings per share - basic and diluted:
Income before cumulative effect
of accounting change ....................... $ 0.81 $ 0.66 22.73 % $ 2.33 $ 1.81 28.73 %
Cumulative effect of accounting change ....... - - - (0.23) - -
----------- ----------- ---------- ----------- ----------- ----------
Net income ................................... 0.81 0.66 22.73 2.10 1.81 16.02
=========== =========== ========== =========== =========== ==========
Book value per share ............................ 23.42 21.76 7.63
Market value per share .......................... 40.75 33.49 21.68
Cash dividends per share ........................ 0.26 0.24 8.33 0.77 0.71 8.45
Weighted average shares outstanding ............. 5,591,462 5,793,822 (3.49) 5,620,891 5,925,326 (5.14)
Weighted average shares outstanding - diluted ... 5,597,362 5,793,822 (3.39) 5,625,348 5,925,326 (5.06)
End of period shares outstanding ................ 5,575,433 5,757,799 (3.17)
Balance Sheet Summary As of September 30,
--------------------- --------------------------------------
2002 2001 % Change
----------- ----------- ----------
Total loans ..................................... $ 855,415 $ 827,041 3.43 %
Allowance for loan losses ....................... 12,299 11,166 10.15
Total investment securities ..................... 326,344 286,001 14.11
Total assets .................................... 1,306,640 1,263,504 3.41
Total deposits .................................. 1,090,396 1,087,599 0.26
Total borrowings ................................ 67,595 31,155 116.96
Shareholders' equity ............................ 130,559 125,299 4.20
For The Three Months For The Nine Months
Ended September 30, Ended September 30,
-------------------------------------- --------------------------------------
Selected Ratios 2002 2001 % Change 2002 2001 % Change
--------------- ----------- ----------- ---------- ----------- ----------- ----------
Return on average assets * ...................... 1.38 % 1.25 % 10.40 % 1.23 % 1.16 % 6.03 %
Return on average shareholders' equity * ........ 14.00 12.36 13.27 12.77 11.44 11.63
Adjusted for cumulative effect
of accounting change:
Core return on average assets* .............. 1.38 1.28 7.81 1.33 1.18 12.71
Core return on average shareholders' equity*. 14.00 12.68 10.41 13.80 11.68 18.15
Shareholders' equity to assets (actual) ......... 9.99 9.92 0.71
Net interest margin (TE) * ...................... 4.68 4.58 2.18 4.67 4.44 5.18
Allowance for loan losses to total loans ........ 1.44 1.35 6.67
Reserve coverage of nonperforming loans ......... 309.95 218.20 42.05
Average loans to average deposits ............... 75.97 77.27 (1.68) 75.21 76.85 (2.13)
Average earning assets to average assets ........ 90.49 90.12 0.41 90.46 90.95 (0.54)
Nonperforming loans to total loans .............. 0.46 0.62 (25.81)
Net charge-offs to average loans * .............. 0.23 0.71 (67.61) 0.38 0.47 (19.15)
Noninterest income (less securities
gains/losses) to average assets* ............... 2.12 1.99 6.53 2.06 1.92 7.29
Noninterest expense to average assets* .......... 3.86 3.85 0.26 3.84 3.73 2.95
Overhead ratio * ................................ 1.74 1.86 (6.45) 1.78 1.81 (1.66)
Efficiency ratio ................................ 60.44 62.63 (3.50) 60.99 62.50 (2.42)
Nonperforming Assets
--------------------
Nonaccruing loans ............................... $ 635 $ 795 (20.13)%
Accruing loans past due 90 days or more ......... 3,333 4,322 (22.88)
----------- ----------- ----------
Total nonperforming loans .................. 3,968 5,117 (22.45)
ORE and repossessions ........................... 3,518 2,362 48.94
----------- ----------- ----------
Total nonperforming assets ................. $ 7,486 $ 7,479 0.09%
=========== =========== ==========
* Ratios annualized
TE - taxable equivalent basis
The Peoples Holding Company
Allowance for Loan Losses
(Dollars in Thousands)
Unaudited
For The Three Months For The Nine Months
Ended September 30, Ended September 30,
-------------------------------------- --------------------------------------
2002 2001 % Change 2002 2001 % Change
----------- ----------- ---------- ----------- ----------- ----------
Reserve for loan losses at beginning of period .. $ 11,658 $ 11,403 2.24 % $ 11,354 $ 10,536 7.76 %
Provision for loan losses ....................... 1,125 1,225 (8.16) 3,325 3,475 (4.32)
Loans charged-off ............................... 573 1,534 (62.65) 2,869 3,107 (7.66)
Recoveries of loans previously charged-off ...... 89 72 23.61 489 262 86.64
----------- ----------- ---------- ----------- ----------- ----------
Reserve for loan losses at end of period ........ $ 12,299 $ 11,166 10.15 % $ 12,299 $ 11,166 10.15 %
=========== =========== ========== =========== =========== ==========
The Peoples Holding Company
Loans and Credit Quality
(Dollars in Thousands)
Unaudited
Loans, Net Charge-offs
Net of Unearned Income Non-performing Loans For The Nine Months Ended
As of September 30, As of September 30, September 30,
------------------------- ------------------------ ------------------------
2002 2001 2002 2001 2002 2001
----------- ----------- ---------- ----------- ----------- ----------
Commercial, financial, agricultural ............. $ 148,791 $ 152,621 $ 1,707 $ 535 $ 528 $ 749
Real estate - construction ...................... 36,480 33,067 - 103 96 25
Real estate - mortgage .......................... 572,283 528,718 1,990 3,957 1,200 1,086
Consumer ........................................ 97,861 112,635 271 522 556 985
----------- ----------- ---------- ----------- ----------- ----------
Total ...................................... $ 855,415 $ 827,041 $ 3,968 $ 5,117 $ 2,380 $ 2,845
=========== =========== ========== =========== =========== ==========
The Peoples Holding Company
Condensed Consolidated Statements of Income
(Dollars in Thousands, Except Share Data)
Unaudited
For The Three Months For The Nine Months
Ended September 30, Ended September 30,
-------------------------------------- --------------------------------------
2002 2001 % Change 2002 2001 % Change
----------- ----------- ---------- ----------- ----------- ----------
Interest income:
Loans ....................................... $ 15,363 $ 17,773 (13.56)% $ 46,027 $ 53,919 (14.64)%
Securities .................................. 4,270 4,021 6.19 12,903 12,384 4.19
Other ....................................... 74 83 (10.84) 277 669 (58.59)
----------- ----------- ---------- ----------- ----------- ----------
Total interest income ................. 19,707 21,877 (9.92) 59,207 66,972 (11.59)
Interest expense:
Deposits .................................... 5,940 9,548 (37.79) 18,567 31,276 (40.63)
Borrowings .................................. 614 359 71.03 1,797 1,090 64.86
----------- ----------- ---------- ----------- ----------- ----------
Total interest expense ................ 6,554 9,907 (33.84) 20,364 32,366 (37.08)
Net interest income ................... 13,153 11,970 9.88 38,843 34,606 12.24
Provision for loan losses ....................... 1,125 1,225 (8.16) 3,325 3,475 (4.32)
----------- ----------- ---------- ----------- ----------- ----------
Net interest income after provision
for loan losses ................... 12,028 10,745 11.94 35,518 31,131 14.09
Noninterest income:
Service charges on deposit accounts ......... 3,220 2,961 8.75 9,220 8,569 7.60
Fees and commissions ........................ 2,456 1,905 28.92 6,731 5,406 24.51
Trust revenue ............................... 218 130 67.69 680 660 3.03
Gains on sale of securities ................. 22 42 (47.62) 30 87 (65.52)
Other ....................................... 1,069 1,134 (5.73) 3,583 3,026 18.41
----------- ----------- ---------- ----------- ----------- ----------
Total noninterest income .............. 6,985 6,172 13.17 20,244 17,748 14.06
Noninterest expenses:
Salaries and employee benefits .............. 7,290 6,862 6.24 21,609 19,285 12.05
Data processing ............................. 957 902 6.10 2,838 2,629 7.95
Net occupancy ............................... 784 797 (1.63) 2,368 2,402 (1.42)
Equipment ................................... 792 733 8.05 2,386 2,195 8.70
Other ....................................... 2,819 2,579 9.31 8,265 7,792 6.07
----------- ----------- ---------- ----------- ----------- ----------
Total noninterest expenses ............ 12,642 11,873 6.48 37,466 34,303 9.22
Income before taxes and cumulative effect
of accounting change ........................ 6,371 5,044 26.31 18,296 14,576 25.52
Income taxes .................................... 1,827 1,202 52.00 5,198 3,845 35.19
----------- ----------- ---------- ----------- ----------- ----------
Net income before cumulative effect
of accounting change ........................ 4,544 3,842 18.27 13,098 10,731 22.06
Cumulative effect of accounting change .......... - - - (1,300) - -
----------- ----------- ---------- ----------- ----------- ----------
Net income ...................................... $ 4,544 $ 3,842 18.27 % $ 11,798 $ 10,731 9.94 %
=========== =========== ========== =========== =========== ==========
The Peoples Holding Company
Average Consolidated Balance Sheet and Net Interest Analysis *
(Dollars in Thousands)
Unaudited
For The Three Months For The Nine Months
Ended September 30 Ended September 30
------------------------- ------------------------
2002 2001 2002 2001
----------- ----------- ---------- -----------
Earning Assets:
Loans and leases:
Interest (TE) ............................. $ 15,483 $ 17,910 $ 46,393 $ 54,358
Average balance ........................... 840,393 822,628 829,724 814,827
Yield ..................................... 7.31% 8.64% 7.48% 8.92%
Interest bearing bank balances, federal
funds sold and repos:
Interest .................................. 74 83 277 669
Average balance ........................... 18,079 9,202 21,872 18,528
Yield ..................................... 1.62% 3.54% 1.69% 4.83%
Investment securities:
Interest (TE) ............................. 4,929 4,700 14,877 14,472
Average balance ........................... 326,251 279,051 325,330 283,322
Yield ..................................... 6.04% 6.73% 6.09% 6.81%
Total earning assets:
Interest (TE) ........................ 20,486 22,693 61,547 69,499
Average balance ...................... 1,184,723 1,110,881 1,176,926 1,116,677
Yield ................................ 6.87% 8.12% 6.99% 8.32%
Interest Bearing Liabilities:
Interest bearing demand deposit accounts:
Interest .................................. 434 497 1,273 1,675
Average balance ........................... 98,155 75,440 95,037 76,451
Rate ...................................... 1.75% 2.61% 1.79% 2.93%
Savings and money market accounts:
Interest .................................. 1,092 1,644 3,435 5,377
Average balance ........................... 288,769 262,612 290,626 257,855
Rate ...................................... 1.50% 2.48% 1.58% 2.79%
Time deposits:
Interest .................................. 4,414 7,407 13,859 24,224
Average balance ........................... 567,032 581,773 564,944 583,195
Rate ...................................... 3.09% 5.05% 3.28% 5.55%
Total interest bearing deposits:
Interest ............................. 5,940 9,548 18,567 31,276
Average balance ...................... 953,956 919,825 950,607 917,501
Rate ................................. 2.47% 4.12% 2.61% 4.56%
Other interest bearing liabilities:
Interest .................................. 614 359 1,797 1,090
Average balance ........................... 57,402 26,388 55,559 24,857
Rate ...................................... 4.24% 5.40% 4.32% 5.86%
Total interest bearing liabilities:
Interest ............................. 6,554 9,907 20,364 32,366
Average balance ...................... 1,011,358 946,213 1,006,166 942,358
Rate ................................. 2.57% 4.15% 2.71% 4.59%
Net interest income (TE) ........................ $ 13,932 $ 12,786 $ 41,183 $ 37,133
Net interest margin (TE) ........................ 4.68% 4.58% 4.67% 4.44%
* Interest amounts annualized for purposes of calculating yields and rates
TE - taxable equivalent basis