Attached files
| file | filename |
|---|---|
| EX-99 - PDF VERSION OF EARNINGS RELEASE - PEOPLES BANCORP INC | exhibit99q12012err38.pdf |
| 8-K - FORM 8-K - PEOPLES BANCORP INC | q120128ker.htm |
P.O. BOX 738 - MARIETTA, OHIO - 45750 | NEWS RELEASE |
www.peoplesbancorp.com | |
FOR IMMEDIATE RELEASE | Contact: | Edward G. Sloane |
April 24, 2012 | Chief Financial Officer and Treasurer | |
(740) 373-3155 | ||
PEOPLES BANCORP INC. REPORTS RECORD
1ST QUARTER 2012 EARNINGS OF $0.63 PER SHARE
_____________________________________________________________________
MARIETTA, Ohio - Peoples Bancorp Inc. (“Peoples”) (NASDAQ: PEBO) today announced results for the quarter ended March 31, 2012. Net income totaled $6.7 million for the first quarter of 2012, representing earnings per diluted common share of $0.63. In comparison, earnings per diluted common share were $0.33 and $0.13 for the fourth and first quarters of 2011, respectively. The increase in earnings during the first quarter of 2012 was the result of a $2.1 million recovery of loan losses, plus other significant improvements in Peoples' core operations.
Summary points regarding first quarter 2012 results:
• | Pre-provision net revenue of $7.5 million was 3% higher than a year ago, as total revenue increased while operating expenses were controlled. On a linked quarter basis, pre-provision net revenue improved substantially as first quarter 2012 benefited from $0.9 million of annual insurance revenue plus lower operating expenses attributable to cost saving initiatives implemented in 2011. |
• | Total criticized loans, which are those classified as watch, substandard or doubtful, decreased $24 million, or 17%, since year-end 2011, while total nonperforming loans decreased $10 million, or 32%. These reductions primarily reflect the payoff of two substandard loans during the quarter. Other real estate owned ("OREO") also benefited from the sale of a single commercial property. As a result, total nonperforming assets as a percentage of gross loans and OREO was 2.25% versus 3.41% at December 31, 2011, and 3.85% a year ago. |
• | Net charge-offs were 0.14% of average loans on an annualized basis, versus 0.43% in the linked quarter and 3.21% a year ago. Due to the continued improvement in asset quality, the allowance for loan losses was lowered to 2.25% of total loans at March 31, 2012, from 2.53% at year-end 2011 and 2.58% at March 31, 2011. |
• | Total revenue, which is net interest income plus non-interest income, was 3% higher than the prior year, driven mostly by stronger fee-based revenues. Net interest income was consistent with the prior year, despite lower average loan balances. Compared to the linked quarter, total revenue benefited the recognition of annual performance-based insurance revenue, which more than offset declines in net interest income and deposit service charges. |
• | Total non-interest expense was down 9% from the linked quarter due to cost saving initiatives implemented in 2011. Year-over-year, total non-interest expense increased 3%, due almost entirely to higher employee benefit costs as other operating costs were either comparable to or lower than the prior year quarter. |
• | Total period-end loan balances grew $6 million during the first quarter, as commercial production remained strong but was tempered by the two substandard loan payoffs. |
• | Retail deposit balances experienced 18% annualized growth split evenly between interest-bearing and non-interest-bearing deposits. A portion of the higher balances was the result of normal seasonal fluctuations in consumer and governmental deposit balances. Non-interest-bearing deposits grew to 20.0% of total retail deposits versus 18.6% at year-end 2011. |
"We are pleased to report record earnings for the quarter and solid progress towards achieving our strategic 2012 goals,” said Chuck Sulerzyski, President and Chief Executive Officer. “Bottom-line earnings growth occurred due to a
1
mix of improved performance in key areas and the sizable reserve release. We also strengthened our core revenue stream by generating positive operating leverage in the first quarter. Other first quarter successes included increased loan balances and double-digit deposit growth. Asset quality trends also remained favorable for another consecutive quarter."
Net interest income was $13.4 million for the first quarter of 2012, comparable to the prior year quarter and modestly lower than linked quarter. Interest income continued to be negatively impacted by lower average loan balances, plus declining asset yields as a result of the low interest rate environment. Interest expense benefited from ongoing efforts to reduce funding costs by replacing higher-cost funds with low-cost core deposits. First quarter 2012 net interest margin was 3.41%, versus 3.49% and 3.43% for the linked and prior year quarters, respectively. Downward pressure on asset yields was the primary reason for the lower net interest margin. A significant contributing factor to the linked quarter decline in net interest income and margin was $215,000, or 5 basis points of margin, in additional investment accretion income recognized in the fourth quarter of 2011 due to the accelerated payoff of a single collateral mortgage-obligation security.
In the first quarter of 2012, Peoples prepaid $35 million of wholesale borrowings using short-term funds, which resulted in prepayment charges of $3.1 million. These borrowings had an average cost of 3.09% and consisted of both term repurchase agreements and advances from the Federal Home Loan Bank. The impact of the prepayment charges on first quarter earnings was offset by $3.2 million in gains from the sale of $60.5 million in investment securities. The securities sold were primarily mortgage-backed securities issued by U.S. government-sponsored agencies. The proceeds of these investment sales were reinvested into other securities with similar duration and yield.
"Net interest income and margin were relatively stable in the first quarter despite the additional investment income recognized in the fourth quarter," said Edward G. Sloane, Chief Financial Officer and Treasurer. “During the first quarter, the last of our high-cost CDs matured, which provided some offset to the downward pressure on our asset yields. However, average loan balances still lagged the linked and prior year quarters, despite modest period-over-period growth in balances. For the remainder of 2012, the first quarter debt restructuring will result in a reduction in interest expense equal to approximately 6 basis points of margin. Our ability to sustain this improvement in net interest margin will depend on meaningful loan growth occurring and continued disciplined balance sheet management and pricing."
Non-interest income totaled $9.1 million for quarter ended March 31, 2012, up 8% over the prior year quarter and up 10% on a linked quarter basis. The year-over-year improvement was due to strong revenue generation in nearly every major category. The linked quarter growth was driven mostly by recognition of annual performance-based insurance revenues, as a normal seasonal decline in deposit service charges offset higher revenue generated from trust, insurance and investment sales and debit card usage by customers.
During the first quarter of 2012, Peoples recognized $919,000 of performance-based insurance revenues versus $943,000 a year ago. The majority of these revenues are earned annually in the first quarter; thus, no such revenue was recognized in the fourth quarter of 2011. Peoples' other insurance revenues benefited from increases in premiums occurring within the industry. Trust and investment income grew 13% over the prior year first quarter and 5% from the linked quarter. These increases occurred as a result of growth in managed assets due to Peoples adding experienced sales professionals in previously under-served markets during the second half of 2011. Electronic banking income has remained a strong revenue contributor for Peoples, with increases of 22% and 12% in the first quarter of 2012, compared to the prior year and linked quarters, respectively. First quarter 2012 mortgage banking income, while significantly higher than the prior year quarter, was down from the linked quarter, with the variances reflecting the change in refinancing activity. Deposit service charges, although down on a linked quarter basis due to normal fluctuations in overdraft fees, continue to benefit from the new deposit products introduced during the first quarter of 2011.
Total non-interest expense was $15.0 million, 3% higher than the prior year quarter but 9% lower than the linked quarter. Most of the year-over-year increase was due to increased sales and incentive compensation costs, corresponding with the stronger first quarter results. Partially offsetting these additional costs was significantly lower FDIC insurance costs resulting from the change in assessment methodology during 2011. The linked quarter decline primarily reflects the actions taken in the second half of 2011 to right-size staffing levels and improve overall operating efficiency. At March 31, 2012, Peoples had 499 full-time equivalent employees versus 513 at year-end 2011 and 543 at March 31, 2011. While staffing reductions drove much of the decrease in salary and employee benefit costs, Peoples also benefited from the non-recurrence of pension settlement charges in the first quarter, as $407,000 in settlement charges were incurred in the fourth quarter of 2011. First quarter 2012 expenses also included a $100,000 contribution to Peoples' private foundation. No contributions were made in the first half of 2011, while contributions of $100,000 and $200,000 were made in the final two quarters of 2011, respectively.
"A major focus for 2012 is generating positive operating leverage," said Sloane. "In the first quarter, we made good progress towards this goal due mostly to the strength of our fee-based revenues and renewed commitment to prudent expense management. Our cost reduction initiatives became fully phased-in during the first quarter of 2012. As a result, we expect operating expenses for remaining quarters of 2012 to be comparable to, if not lower than, the first quarter as
2
some of the savings will be reinvested to the extent revenue growth goals are achieved."
During the first quarter, period-end portfolio loan balances increased $5.6 million, to $944.1 million at March 31, 2012. This growth occurred as a result of commercial lending opportunities within Peoples' market area. First quarter 2012 loan growth was tempered by the payoff of two unrelated nonperforming commercial real estate loans totaling $8.1 million. Peoples also continued to experience steady growth in its residential mortgage lending activity as consumers take advantage of historically low fixed rates. Much of the new production was sold to the secondary market due to the associated interest rate risk. As a result, Peoples' serviced loan portfolio grew to $281.0 million at March 31, 2012, versus $258.7 million a year ago.
“We are encouraged by higher period-end loan balances versus year-end given the increased competition and the reduction in nonperforming loans,” said Sulerzyski. “We are pleased with the ability to resolve two significant problem loans during the quarter. While these efforts partially offset the impact of new production during the quarter, the removal of these loans from the balance sheet improves asset quality and avoids the costs associated with a prolonged workout process. For the remainder of 2012, our outlook for loan growth remains positive as our pipeline remains strong.”
At March 31, 2012, the amount of loans classified as watch, substandard or doubtful was down $24.3 million, or 17%, since year-end 2011. In addition to the previously mentioned resolution of two nonperforming loans, Peoples sold a large commercial property held as OREO. The combined impact of these events was a 34% reduction in total nonperforming assets. As a result, total nonperforming assets were 2.25% of total loans plus OREO at March 31, 2012, versus 3.41% at December 31, 2011. This improvement in asset quality occurred without Peoples incurring any additional significant losses. First quarter 2012 net charge-offs were $331,000 or 0.14% of average loans on an annualized basis, compared to $1.0 million, or 0.43%, and $7.6 million, or 3.21%, for the fourth and first quarters of 2011, respectively.
Peoples' allowance for loan losses was $21.2 million, or 2.25% of gross loans, at March 31, 2012, down from $23.7 million, or 2.53%, at December 31, 2011. This reduction corresponds with the decrease in substandard-rated loans, coupled with the sustained period of lower net charge-offs, and resulted in a $2.1 million net recovery in respect of loan losses for the first quarter of 2012. In comparison, Peoples recorded a $0.5 million net recovery in respect of loan losses in the fourth quarter of 2011, which was more than offset by a net loss of $0.9 million on OREO, and a provision for loan losses of $5.3 million recorded for the first quarter of 2011.
“Our asset quality continues to improve while net charge-offs remained below 50 basis points of loans for the third consecutive quarter,” commented Sloane. “These two factors were the driving force behind the substantial decrease in our allowance for loan losses during the first quarter of 2012. We remain cautiously optimistic the recent favorable asset quality trends will be sustained in future quarters. The extent to which any additional reserves are released during 2012 will continue to depend on our credit metrics and the factors affecting loan losses.”
Retail deposit balances grew at an annualized rate of 18% in the first quarter of 2012. Non-interest-bearing balances were up $28.6 million to $268.4 million at March 31, 2012, driven by seasonal growth in consumer balances, coupled with increased commercial balances. Interest-bearing retail deposits were $28.8 million higher at quarter-end versus December 31, 2011. This 11% annualized growth occurred as seasonal increases in governmental and savings deposits were partially offset by reductions in retail certificates of deposit ("CD") and money market balances. The higher governmental balances reflected the impact of annual tax collections being deposited by local municipalities. The decreased CD and money market balances were the result of Peoples' funding strategy of emphasizing low-cost deposits and reduced reliance on high-cost funding sources.
"Overall, first quarter results reflected the benefits of actions taken last year to improve performance in every area of our business," summarized Sulerzyski. "Our outlook for 2012 remains positive as we work to build on recent successes and capitalize on growth opportunities that exist within our market area. We are confident our efforts will restore Peoples to being a steady, dependable performer."
Peoples Bancorp Inc. is a diversified financial products and services company with $1.8 billion in total assets, 44 locations and 42 ATMs in Ohio, West Virginia and Kentucky. Peoples makes available a complete line of banking, investment, insurance, and trust solutions through its financial service units - Peoples Bank, National Association; Peoples Financial Advisors (a division of Peoples Bank); and Peoples Insurance Agency, LLC. 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 first quarter 2012 results of operations today at 11:00 a.m., Eastern Daylight Saving Time, with members of Peoples' executive management participating. Analysts, media and individual investors are invited to participate in the conference call by calling (800) 860-2442. A simultaneous Webcast of the conference call audio will be available online via the “Investor Relations” section of Peoples' website,
3
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 and, if required, to 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:
Certain statements made in this news release regarding Peoples' financial condition, results of operations, plans, objectives, future performance and business, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by the fact they are not historical facts and include words such as “anticipate”, “could”, “may”, “feel”, “expect”, “believe”, “plan”, and similar expressions.
These forward-looking statements reflect management's current expectations based on all information available to management and its knowledge of Peoples' business and operations. Additionally, Peoples' financial condition, results of operations, plans, objectives, future performance and business are subject to risks and uncertainties that may cause actual results to differ materially. These factors include, but are not limited to: (1) deterioration in the credit quality of Peoples' loan portfolio could occur due to a number of factors, such as adverse changes in economic conditions that impair the ability of borrowers to repay their loans, the underlying value of the collateral could prove less valuable than otherwise assumed and assumed cash flows may be worse than expected, which may adversely impact the provision for loan losses; (2) competitive pressures among financial institutions or from non-financial institutions may increase significantly, including product and pricing pressures and Peoples' ability to attract, develop and retain qualified professionals; (3) changes in the interest rate environment, which may adversely impact interest margins; (4) changes in prepayment speeds, loan originations, sale volumes and charge-offs, which may be less favorable than expected and adversely impact the amount of interest income generated; (5) economic conditions, either nationally or in areas where Peoples and its subsidiaries do business, may be less favorable than expected, which could decrease the demand for loans, deposits and other financial services and increase loan delinquencies and defaults; (6) political developments, wars or other hostilities, which may disrupt or increase volatility in securities markets or other economic conditions; (7) legislative or regulatory changes or actions, including in particular the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the regulations promulgated and to be promulgated thereunder, which may subject Peoples and its subsidiaries to a variety of new and more stringent legal and regulatory requirements which adversely affect their businesses; (8) changes in accounting standards, policies, estimates or procedures may adversely affect Peoples' reported financial condition or results of operations; (9) adverse changes in the conditions and trends in the financial markets, which may adversely affect the fair value of securities within Peoples' investment portfolio and interest rate sensitivity of Peoples' consolidated balance sheet; (10) Peoples' ability to receive dividends from its subsidiaries; (11) Peoples' ability to maintain required capital levels and adequate sources of funding and liquidity; (12) the impact of larger or similar financial institutions encountering problems, which may adversely affect the banking industry and/or Peoples; (13) the impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity; (14) the costs and effects of regulatory and legal developments, including the outcome of potential regulatory or other governmental inquiries and legal proceedings and results of regulatory examinations; (15) Peoples' ability to secure confidential information through the use of computer systems and telecommunications network may prove inadequate, which could adversely affect customer confidence in Peoples and/or result in Peoples incurring a financial loss and (16) 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 disclosures under the heading “ITEM 1A. RISK FACTORS” of Peoples' Annual Report on Form 10-K for the fiscal year ended December 31, 2011.
Peoples encourages readers of this news release to understand forward-looking statements to be strategic objectives rather than absolute targets of future performance. 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 legal requirements. 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.
As required by U.S. GAAP, Peoples is required to evaluate the impact of subsequent events through the issuance date of its March 31, 2012 consolidated financial statements as part of its Quarterly Report on Form 10-Q to be filed with the SEC. Accordingly, subsequent events could occur that may cause Peoples to update its critical accounting estimates and to revise its financial information from that which is contained in this news release.
4
PER COMMON SHARE DATA AND SELECTED RATIOS
Three Months Ended | |||||||||||
March 31, | December 31, | March 31, | |||||||||
2012 | 2011 | 2011 | |||||||||
PER COMMON SHARE: | |||||||||||
Earnings per share: | |||||||||||
Basic | $ | 0.63 | $ | 0.33 | $ | 0.13 | |||||
Diluted | 0.63 | 0.33 | 0.13 | ||||||||
Cash dividends declared per share | 0.11 | 0.10 | 0.10 | ||||||||
Book value per share | 19.83 | 19.67 | 18.39 | ||||||||
Tangible book value per share (a) | 13.71 | 13.53 | 12.21 | ||||||||
Closing stock price at end of period | $ | 17.54 | $ | 14.81 | $ | 12.02 | |||||
SELECTED RATIOS: | |||||||||||
Return on average equity (b) | 12.90 | % | 6.79 | % | 3.47 | % | |||||
Return on average common equity (b) | 12.90 | % | 6.69 | % | 2.83 | % | |||||
Return on average assets (b) | 1.48 | % | 0.84 | % | 0.42 | % | |||||
Efficiency ratio (c) | 65.47 | % | 73.53 | % | 65.21 | % | |||||
Pre-provision net revenue to average assets (d) | 1.68 | % | 1.03 | % | 1.62 | % | |||||
Net interest margin (b)(e) | 3.41 | % | 3.49 | % | 3.43 | % | |||||
Dividend payout ratio (f) | 17.61 | % | 30.32 | % | 78.60 | % | |||||
(a) | This amount represents a non-GAAP measure since it excludes the balance sheet impact of intangible assets acquired through acquisitions on stockholders' equity. Additional information regarding the calculation of this ratio is included at the end of this release. |
(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). |
(d) | This amount represents a non-GAAP measure since it excludes the recovery of or provision for loan loss and net gains or losses on security transactions. This measure is a key metric used by federal bank regulatory agencies in their evaluation of capital adequacy for financial institutions. Additional information regarding the calculation of this ratio is included at the end of this release. |
(e) | Information presented on a fully tax-equivalent basis. |
(f) | Dividends declared on common shares as a percentage of net income available to common shareholders. |
5
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended | |||||||||||
March 31, | December 31, | March 31, | |||||||||
(in $000’s) | 2012 | 2011 | 2011 | ||||||||
Interest income | $ | 17,612 | $ | 18,475 | $ | 19,317 | |||||
Interest expense | 4,180 | 4,686 | 5,822 | ||||||||
Net interest income | 13,432 | 13,789 | 13,495 | ||||||||
(Recovery of) provision for loan losses | (2,137 | ) | (473 | ) | 5,311 | ||||||
Net interest income after (recovery of) provision for loan losses | 15,569 | 14,262 | 8,184 | ||||||||
Net gain on securities transactions | 3,163 | — | 360 | ||||||||
Loss on debt extinguishment | (3,111 | ) | — | — | |||||||
Gain (loss) on loans held-for-sale and other real estate owned | 56 | (869 | ) | 57 | |||||||
Net (loss) gain on other assets | (7 | ) | 60 | 3 | |||||||
Non-interest income: | |||||||||||
Deposit account service charges | 2,237 | 2,509 | 2,174 | ||||||||
Insurance income | 2,951 | 1,944 | 2,832 | ||||||||
Trust and investment income | 1,496 | 1,429 | 1,325 | ||||||||
Electronic banking income | 1,488 | 1,324 | 1,221 | ||||||||
Mortgage banking income | 549 | 657 | 374 | ||||||||
Bank owned life insurance | 8 | 76 | 87 | ||||||||
Other non-interest income | 353 | 349 | 361 | ||||||||
Total non-interest income | 9,082 | 8,288 | 8,374 | ||||||||
Non-interest expense: | |||||||||||
Salaries and employee benefits costs | 8,245 | 9,345 | 7,627 | ||||||||
Net occupancy and equipment | 1,432 | 1,459 | 1,501 | ||||||||
Professional fees | 813 | 916 | 795 | ||||||||
Electronic banking expense | 694 | 676 | 618 | ||||||||
Data processing and software | 487 | 487 | 463 | ||||||||
Franchise taxes | 412 | 377 | 401 | ||||||||
Communication expense | 348 | 308 | 314 | ||||||||
FDIC insurance | 309 | 315 | 662 | ||||||||
Foreclosed real estate and other loan expenses | 221 | 388 | 350 | ||||||||
Amortization of intangible assets | 107 | 131 | 162 | ||||||||
Other non-interest expense | 1,948 | 2,162 | 1,725 | ||||||||
Total non-interest expense | 15,016 | 16,564 | 14,618 | ||||||||
Income before income taxes | 9,736 | 5,177 | 2,360 | ||||||||
Income tax expense | 3,079 | 1,333 | 491 | ||||||||
Net income | $ | 6,657 | $ | 3,844 | $ | 1,869 | |||||
Preferred dividends | — | 345 | 523 | ||||||||
Net income available to common shareholders | $ | 6,657 | $ | 3,499 | $ | 1,346 | |||||
PER COMMON SHARE DATA: | |||||||||||
Earnings per share – Basic | $ | 0.63 | $ | 0.33 | $ | 0.13 | |||||
Earnings per share – Diluted | $ | 0.63 | $ | 0.33 | $ | 0.13 | |||||
Cash dividends declared per share | $ | 0.11 | $ | 0.10 | $ | 0.10 | |||||
Weighted-average shares outstanding – Basic | 10,513,388 | 10,494,210 | 10,471,819 | ||||||||
Weighted-average shares outstanding – Diluted | 10,513,388 | 10,514,960 | 10,477,360 | ||||||||
Actual shares outstanding (end of period) | 10,521,548 | 10,507,124 | 10,474,507 | ||||||||
6
CONSOLIDATED BALANCE SHEETS
March 31, | December 31, | ||||||
(in $000’s) | 2012 | 2011 | |||||
Assets | |||||||
Cash and cash equivalents: | |||||||
Cash and due from banks | $ | 29,870 | $ | 32,346 | |||
Interest-bearing deposits in other banks | 8,085 | 6,604 | |||||
Total cash and cash equivalents | 37,955 | 38,950 | |||||
Available-for-sale investment securities, at fair value (amortized cost of $602,817 | |||||||
at March 31, 2012 and $617,128 at December 31, 2011) | 610,036 | 628,571 | |||||
Held-to-maturity investment securities, at amortized cost (fair value of $34,634 | |||||||
at March 31, 2012 and $16,705 at December 31, 2011) | 34,298 | 16,301 | |||||
Other investment securities, at cost | 24,356 | 24,356 | |||||
Total investment securities | 668,690 | 669,228 | |||||
Loans, net of deferred fees and costs | 944,103 | 938,506 | |||||
Allowance for loan losses | (21,249 | ) | (23,717 | ) | |||
Net loans | 922,854 | 914,789 | |||||
Loans held-for-sale | 5,167 | 3,271 | |||||
Bank premises and equipment, net of accumulated depreciation | 23,863 | 23,905 | |||||
Bank owned life insurance | 49,392 | 49,384 | |||||
Goodwill | 62,520 | 62,520 | |||||
Other intangible assets | 1,909 | 1,955 | |||||
Other assets | 33,573 | 30,159 | |||||
Total assets | $ | 1,805,923 | $ | 1,794,161 | |||
Liabilities | |||||||
Deposits: | |||||||
Non-interest-bearing deposits | $ | 268,444 | $ | 239,837 | |||
Interest-bearing deposits | 1,130,105 | 1,111,243 | |||||
Total deposits | 1,398,549 | 1,351,080 | |||||
Short-term borrowings | 44,905 | 51,643 | |||||
Long-term borrowings | 106,652 | 142,312 | |||||
Junior subordinated notes held by subsidiary trust | 22,609 | 22,600 | |||||
Accrued expenses and other liabilities | 24,542 | 19,869 | |||||
Total liabilities | 1,597,257 | 1,587,504 | |||||
Stockholders' Equity | |||||||
Preferred stock, no par value (50,000 shares authorized, no shares issued | |||||||
at March 31, 2012 and December 31, 2011) | — | — | |||||
Common stock, no par value (24,000,000 shares authorized, 11,129,412 shares | |||||||
issued at March 31, 2012 and 11,122,247 shares issued at December 31, 2011), | |||||||
including shares in treasury | 166,065 | 166,969 | |||||
Retained earnings | 59,065 | 53,580 | |||||
Accumulated comprehensive (loss) income, net of deferred income taxes | (1,310 | ) | 1,412 | ||||
Treasury stock, at cost (607,864 shares at March 31, 2012 and | |||||||
615,123 shares at December 31, 2011) | (15,154 | ) | (15,304 | ) | |||
Total stockholders' equity | 208,666 | 206,657 | |||||
Total liabilities and stockholders' equity | $ | 1,805,923 | $ | 1,794,161 | |||
7
SELECTED FINANCIAL INFORMATION
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
(in $000’s, end of period) | 2012 | 2011 | 2011 | 2011 | 2011 | ||||||||||
Loan Portfolio | |||||||||||||||
Commercial real estate | $ | 394,034 | $ | 410,352 | $ | 424,741 | $ | 411,355 | $ | 413,011 | |||||
Commercial and industrial | 150,431 | 140,857 | 140,058 | 145,625 | 147,825 | ||||||||||
Real estate construction | 43,510 | 30,577 | 26,751 | 29,259 | 38,154 | ||||||||||
Residential real estate | 218,745 | 219,619 | 222,374 | 215,242 | 215,040 | ||||||||||
Home equity lines of credit | 48,067 | 47,790 | 48,085 | 48,148 | 48,281 | ||||||||||
Consumer | 86,965 | 87,531 | 87,072 | 88,345 | 84,078 | ||||||||||
Deposit account overdrafts | 2,351 | 1,780 | 1,712 | 2,145 | 1,640 | ||||||||||
Total loans | $ | 944,103 | $ | 938,506 | $ | 950,793 | $ | 940,119 | $ | 948,029 | |||||
Deposit Balances | |||||||||||||||
Interest-bearing deposits: | |||||||||||||||
Retail certificates of deposit | $ | 392,503 | $ | 411,247 | $ | 415,190 | $ | 421,167 | $ | 420,828 | |||||
Money market deposit accounts | 255,907 | 268,410 | 254,012 | 264,677 | 270,574 | ||||||||||
Governmental deposit accounts | 161,798 | 122,916 | 140,357 | 150,319 | 149,961 | ||||||||||
Savings accounts | 155,097 | 138,383 | 132,182 | 133,352 | 132,323 | ||||||||||
Interest-bearing demand accounts | 110,731 | 106,233 | 100,770 | 99,324 | 97,561 | ||||||||||
Total retail interest-bearing deposits | 1,076,036 | 1,047,189 | 1,042,511 | 1,068,839 | 1,071,247 | ||||||||||
Brokered certificates of deposits | 54,069 | 64,054 | 64,470 | 67,912 | 70,522 | ||||||||||
Total interest-bearing deposits | 1,130,105 | 1,111,243 | 1,106,981 | 1,136,751 | 1,141,769 | ||||||||||
Non-interest-bearing deposits | 268,444 | 239,837 | 235,585 | 222,075 | 219,175 | ||||||||||
Total deposits | $ | 1,398,549 | $ | 1,351,080 | $ | 1,342,566 | $ | 1,358,826 | $ | 1,360,944 | |||||
Asset Quality | |||||||||||||||
Nonperforming assets: | |||||||||||||||
Loans 90+ days past due and accruing | $ | — | $ | — | $ | 146 | $ | 124 | 37 | ||||||
Nonaccrual loans | 20,492 | 30,022 | 32,957 | 31,421 | 32,322 | ||||||||||
Total nonperforming loans | 20,492 | 30,022 | 33,103 | 31,545 | 32,359 | ||||||||||
Other real estate owned | 869 | 2,194 | 3,667 | 3,546 | 4,400 | ||||||||||
Total nonperforming assets | $ | 21,361 | $ | 32,216 | $ | 36,770 | $ | 35,091 | $ | 36,759 | |||||
Allowance for loan losses as a percent of | |||||||||||||||
nonperforming loans | 103.69 | % | 79.00 | % | 76.16 | % | 79.78 | % | 75.56 | % | |||||
Nonperforming loans as a percent of total loans | 2.16 | % | 3.19 | % | 3.47 | % | 3.35 | % | 3.41 | % | |||||
Nonperforming assets as a percent of total assets | 1.18 | % | 1.80 | % | 2.04 | % | 1.95 | % | 2.04 | % | |||||
Nonperforming assets as a percent of total loans | |||||||||||||||
and other real estate owned | 2.25 | % | 3.41 | % | 3.84 | % | 3.71 | % | 3.85 | % | |||||
Allowance for loan losses as a percent of total loans | 2.25 | % | 2.53 | % | 2.65 | % | 2.68 | % | 2.58 | % | |||||
Capital Information(a) | |||||||||||||||
Tier 1 common ratio | 13.82 | % | 12.82 | % | 12.40 | % | 12.05 | % | 11.72 | % | |||||
Tier 1 risk-based capital ratio | 15.86 | % | 14.86 | % | 15.98 | % | 15.62 | % | 15.25 | % | |||||
Total risk-based capital ratio (Tier 1 and Tier 2) | 17.20 | % | 16.20 | % | 17.33 | % | 16.97 | % | 16.60 | % | |||||
Leverage ratio | 10.05 | % | 9.45 | % | 10.37 | % | 10.10 | % | 9.81 | % | |||||
Tier 1 common capital | $ | 153,180 | $ | 142,521 | $ | 139,828 | $ | 136,842 | $ | 133,891 | |||||
Tier 1 capital | 175,789 | 165,121 | 180,294 | 177,287 | 174,314 | ||||||||||
Total capital (Tier 1 and Tier 2) | 190,694 | 180,053 | 195,480 | 192,663 | 189,672 | ||||||||||
Total risk-weighted assets | $ | 1,108,633 | $ | 1,111,443 | $ | 1,127,921 | $ | 1,135,234 | $ | 1,142,758 | |||||
Tangible equity to tangible assets (b) | 8.28 | % | 8.22 | % | 9.19 | % | 8.86 | % | 8.39 | % | |||||
Tangible common equity to tangible assets (b) | 8.28 | % | 8.22 | % | 8.16 | % | 7.83 | % | 7.36 | % | |||||
(a) March 31, 2012 data based on preliminary analysis and subject to revision.
(b) These ratios represent non-GAAP measures since they exclude the balance sheet impact of intangible assets acquired through acquisitions on both total stockholders' equity and total assets. Additional information regarding the calculation of these ratios is included at the end of this release.
8
PROVISION FOR LOAN LOSSES INFORMATION
Three Months Ended | |||||||||||
March 31, | December 31, | March 31, | |||||||||
(in $000’s) | 2012 | 2011 | 2011 | ||||||||
(Recovery of) Provision for Loan Losses | |||||||||||
(Recovery of) Provision for checking account overdrafts | $ | (12 | ) | $ | 147 | $ | 11 | ||||
(Recovery of) Provision for other loan losses | (2,125 | ) | (620 | ) | 5,300 | ||||||
Total (recovery of) provision for loan losses | $ | (2,137 | ) | $ | (473 | ) | $ | 5,311 | |||
Net Charge-Offs | |||||||||||
Gross charge-offs | $ | 2,571 | $ | 2,352 | $ | 8,780 | |||||
Recoveries | 2,240 | 1,329 | 1,152 | ||||||||
Net charge-offs | $ | 331 | $ | 1,023 | $ | 7,628 | |||||
Net Charge-Offs (Recoveries) by Type | |||||||||||
Commercial real estate | $ | 351 | $ | 518 | $ | 6,763 | |||||
Commercial and industrial | (48 | ) | (72 | ) | 776 | ||||||
Residential real estate | (97 | ) | 302 | (242 | ) | ||||||
Real estate, construction | — | — | — | ||||||||
Consumer | 26 | 126 | 61 | ||||||||
Home equity lines of credit | 64 | 7 | 237 | ||||||||
Deposit account overdrafts | 35 | 142 | 33 | ||||||||
Total net charge-offs | $ | 331 | $ | 1,023 | $ | 7,628 | |||||
Net charge-offs as a percent of loans (annualized) | 0.14 | % | 0.43 | % | 3.21 | % | |||||
SUPPLEMENTAL INFORMATION
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
(in $000’s, end of period) | 2012 | 2011 | 2011 | 2011 | 2011 | ||||||||||||||
Trust assets under management | $ | 853,444 | $ | 821,659 | $ | 776,165 | $ | 846,052 | $ | 852,972 | |||||||||
Brokerage assets under management | $ | 284,453 | 262,196 | 249,550 | 265,384 | 260,134 | |||||||||||||
Mortgage loans serviced for others | $ | 281,015 | 275,715 | 262,992 | 259,352 | 258,626 | |||||||||||||
Employees (full-time equivalent) | 499 | 513 | 540 | 537 | 543 | ||||||||||||||
9
CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME
Three Months Ended | ||||||||||||||||||||||||||
March 31, 2012 | December 31, 2011 | March 31, 2011 | ||||||||||||||||||||||||
(in $000’s) | Balance | Income/ Expense | Yield/ Cost | Balance | Income/ Expense | Yield/ Cost | Balance | Income/ Expense | Yield/ Cost | |||||||||||||||||
Assets | ||||||||||||||||||||||||||
Short-term investments | $ | 6,280 | $ | 4 | 0.25 | % | $ | 8,623 | $ | 4 | 0.22 | % | $ | 20,204 | $ | 11 | 0.22 | % | ||||||||
Investment securities (a)(b) | 682,904 | 6,078 | 3.56 | % | 676,550 | 6,518 | 3.85 | % | 659,238 | 6,902 | 4.19 | % | ||||||||||||||
Gross loans (a) | 946,230 | 11,789 | 5.00 | % | 948,598 | 12,225 | 5.12 | % | 963,424 | 12,704 | 5.33 | % | ||||||||||||||
Allowance for loan losses | (24,429 | ) | (25,695 | ) | (28,338 | ) | ||||||||||||||||||||
Total earning assets | 1,610,985 | 17,871 | 4.45 | % | 1,608,076 | 18,747 | 4.64 | % | 1,614,528 | 19,617 | 4.89 | % | ||||||||||||||
Intangible assets | 64,425 | 64,451 | 64,820 | |||||||||||||||||||||||
Other assets | 131,331 | 137,664 | 145,379 | |||||||||||||||||||||||
Total assets | $ | 1,806,741 | $ | 1,810,191 | $ | 1,824,727 | ||||||||||||||||||||
Liabilities and Equity | ||||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||||
Savings accounts | $ | 147,420 | $ | 21 | 0.06 | % | $ | 136,665 | $ | 20 | 0.06 | % | $ | 128,784 | $ | 55 | 0.17 | % | ||||||||
Interest-bearing demand accounts | 247,557 | 269 | 0.44 | % | 238,860 | 267 | 0.44 | % | 232,932 | 622 | 1.08 | % | ||||||||||||||
Money market deposit accounts | 264,808 | 126 | 0.19 | % | 264,378 | 135 | 0.20 | % | 278,664 | 245 | 0.36 | % | ||||||||||||||
Brokered certificates of deposits | 61,443 | 528 | 3.46 | % | 64,396 | 549 | 3.38 | % | 81,688 | 632 | 3.14 | % | ||||||||||||||
Retail certificates of deposit | 400,444 | 1,603 | 1.61 | % | 415,887 | 1,968 | 1.88 | % | 426,917 | 2,431 | 2.31 | % | ||||||||||||||
Total interest-bearing deposits | 1,121,672 | 2,547 | 0.91 | % | 1,120,186 | 2,939 | 1.04 | % | 1,148,985 | 3,985 | 1.41 | % | ||||||||||||||
Short-term borrowings | 57,509 | 19 | 0.13 | % | 50,674 | 18 | 0.14 | % | 46,324 | 35 | 0.30 | % | ||||||||||||||
Long-term borrowings | 153,106 | 1,614 | 4.20 | % | 165,939 | 1,729 | 4.10 | % | 176,471 | 1,802 | 4.11 | % | ||||||||||||||
Total borrowed funds | 210,615 | 1,633 | 3.09 | % | 216,613 | 1,747 | 3.17 | % | 222,795 | 1,837 | 3.32 | % | ||||||||||||||
Total interest-bearing liabilities | 1,332,287 | 4,180 | 1.26 | % | 1,336,799 | 4,686 | 1.39 | % | 1,371,780 | 5,822 | 1.72 | % | ||||||||||||||
Non-interest-bearing deposits | 247,487 | 236,405 | 222,656 | |||||||||||||||||||||||
Other liabilities | 19,350 | 12,248 | 12,001 | |||||||||||||||||||||||
Total liabilities | 1,599,124 | 1,585,452 | 1,606,437 | |||||||||||||||||||||||
Preferred equity | — | 17,104 | 25,245 | |||||||||||||||||||||||
Common equity | 207,617 | 207,635 | 193,045 | |||||||||||||||||||||||
Stockholders’ equity | 207,617 | 224,739 | 218,290 | |||||||||||||||||||||||
Total liabilities and equity | $ | 1,806,741 | $ | 1,810,191 | $ | 1,824,727 | ||||||||||||||||||||
Net interest income/spread (a) | $ | 13,691 | 3.19 | % | $ | 14,061 | 3.25 | % | $ | 13,795 | 3.17 | % | ||||||||||||||
Net interest margin (a) | 3.41 | % | 3.49 | % | 3.43 | % | ||||||||||||||||||||
(a) Information presented on a fully tax-equivalent basis. | ||||||||||||||||||||||||||
(b) Average balances are based on carrying value. | ||||||||||||||||||||||||||
10
NON-GAAP FINANCIAL MEASURES
The following non-GAAP financial measures used by Peoples provide information useful to investors in understanding Peoples' operating performance and trends, and facilitate comparisons with the performance of Peoples' peers. The following tables summarize the non-GAAP financial measures derived from amounts reported in Peoples' consolidated financial statements:
At or For the three months ended | |||||||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
(in $000’s) | 2012 | 2011 | 2011 | 2011 | 2011 | ||||||||||||||
Pre-Provision Net Revenue: | |||||||||||||||||||
Income before income taxes | $ | 9,736 | $ | 5,177 | $ | 5,806 | $ | 3,808 | $ | 2,360 | |||||||||
Add: provision for loan losses | — | — | 865 | 2,295 | 5,311 | ||||||||||||||
Add: loss on debt extinguishment | (3,111 | ) | — | — | — | — | |||||||||||||
Less: recovery of loan losses | (2,137 | ) | (473 | ) | — | — | — | ||||||||||||
Less: net gain on securities transactions | 3,163 | — | 57 | 56 | 360 | ||||||||||||||
Pre-provision net revenue | $ | 7,547 | $ | 4,704 | $ | 6,614 | $ | 6,047 | $ | 7,311 | |||||||||
Pre-provision net revenue | 7,547 | 4,704 | 6,614 | 6,047 | 7,311 | ||||||||||||||
Total average assets | 1,806,741 | 1,810,191 | 1,802,218 | 1,808,731 | 1,824,727 | ||||||||||||||
Pre-provision net revenue to average assets | 1.68 | % | 1.03 | % | 1.46 | % | 1.34 | % | 1.62 | % | |||||||||
Tangible Equity: | |||||||||||||||||||
Total stockholders' equity, as reported | $ | 208,666 | $ | 206,657 | $ | 224,530 | $ | 218,527 | $ | 210,485 | |||||||||
Less: goodwill and other intangible assets | 64,429 | 64,475 | 64,489 | 64,602 | 64,765 | ||||||||||||||
Tangible equity | $ | 144,237 | $ | 142,182 | $ | 160,041 | $ | 153,925 | $ | 145,720 | |||||||||
Tangible Common Equity: | |||||||||||||||||||
Tangible equity | $ | 144,237 | $ | 142,182 | $ | 160,041 | $ | 153,925 | $ | 145,720 | |||||||||
Less: preferred stockholders' equity | — | — | 17,875 | 17,862 | 17,850 | ||||||||||||||
Tangible common equity | $ | 144,237 | $ | 142,182 | $ | 142,166 | $ | 136,063 | $ | 127,870 | |||||||||
Tangible Assets: | |||||||||||||||||||
Total assets, as reported | $ | 1,805,923 | $ | 1,794,161 | $ | 1,805,743 | $ | 1,802,703 | $ | 1,801,590 | |||||||||
Less: goodwill and other intangible assets | 64,429 | 64,475 | 64,489 | 64,602 | 64,765 | ||||||||||||||
Tangible assets | $ | 1,741,494 | $ | 1,729,686 | $ | 1,741,254 | $ | 1,738,101 | $ | 1,736,825 | |||||||||
Tangible Book Value per Common Share: | |||||||||||||||||||
Tangible common equity | $ | 144,237 | $ | 142,182 | $ | 142,166 | $ | 136,063 | $ | 127,870 | |||||||||
Common shares outstanding | 10,521,548 | 10,507,124 | 10,489,400 | 10,478,149 | 10,474,507 | ||||||||||||||
Tangible book value per common share | $ | 13.71 | $ | 13.53 | $ | 13.55 | $ | 12.99 | $ | 12.21 | |||||||||
Tangible Equity to Tangible Assets Ratio: | |||||||||||||||||||
Tangible equity | $ | 144,237 | $ | 142,182 | $ | 160,041 | $ | 153,925 | $ | 145,720 | |||||||||
Total tangible assets | $ | 1,741,494 | $ | 1,729,686 | $ | 1,741,254 | $ | 1,738,101 | $ | 1,736,825 | |||||||||
Tangible equity to tangible assets | 8.28 | % | 8.22 | % | 9.19 | % | 8.86 | % | 8.39 | % | |||||||||
Tangible Common Equity to Tangible Assets Ratio: | |||||||||||||||||||
Tangible common equity | $ | 144,237 | $ | 142,182 | $ | 142,166 | $ | 136,063 | $ | 127,870 | |||||||||
Tangible assets | $ | 1,741,494 | $ | 1,729,686 | $ | 1,741,254 | $ | 1,738,101 | $ | 1,736,825 | |||||||||
Tangible common equity to tangible assets | 8.28 | % | 8.22 | % | 8.16 | % | 7.83 | % | 7.36 | % | |||||||||
END OF RELEASE
11