Attached files
| file | filename |
|---|---|
| EX-99 - PDF VERSION OF EARNINGS RELEASE - PEOPLES BANCORP INC | exhibit99q22012err45.pdf |
| 8-K - FORM 8-K - PEOPLES BANCORP INC | q220128ker.htm |
P.O. BOX 738 - MARIETTA, OHIO - 45750 | NEWS RELEASE | ||
www.peoplesbancorp.com | |||
FOR IMMEDIATE RELEASE | Contact: | Edward G. Sloane | |
July 24, 2012 | Chief Financial Officer and Treasurer | ||
(740) 373-3155 | |||
PEOPLES BANCORP INC. REPORTS IMPROVED
2ND QUARTER 2012 EARNINGS OF $0.47 PER SHARE
_____________________________________________________________________
MARIETTA, Ohio - Peoples Bancorp Inc. (“Peoples”) (NASDAQ: PEBO) today announced results for the quarter ended June 30, 2012. Net income totaled $5.0 million for the second quarter of 2012, representing earnings per diluted common share of $0.47. In comparison, earnings per diluted common share were $0.26 for the second quarter of 2011 and $0.63 for the first quarter of 2012. On a year-to-date basis, earnings per diluted common share were $1.10 through six months of 2012 versus $0.38 during the same period in 2011.
Summary points regarding second quarter 2012 results:
• | Peoples incurred pre-tax costs of $660,000 (or $429,000 after-tax) during the quarter related to pension settlement charges, acquisition activities and a private foundation contribution. |
• | Total revenue, which is net interest income plus non-interest income, was 4% higher than the prior year, driven mostly by stronger fee-based revenues. Net interest income also benefited from modestly higher average loan balances. On a linked quarter basis, total revenue was 2% lower reflecting the normal seasonal decline corresponding with the recognition of annual performance-based insurance revenue in the first quarter. |
• | Total criticized loans, which are those classified as watch, substandard or doubtful, decreased $16 million, or 14%, during the quarter, and $40 million, or 29%, since year-end 2011. These reductions were primarily the result of paydowns and upgrades. Total nonperforming loans as a percentage of gross loans and OREO also improved to 1.85%, compared to 2.25% at March 31, 2012 and 3.71% a year ago. |
• | Net charge-offs remained minimal for a second consecutive quarter. Through six months, net charge-offs were 0.11% of average loans on annualized basis in 2012 versus 1.94% in 2011. Peoples realized a $3.3 million recovery of loan losses in the first half of 2012 compared to a provision of $7.6 million a year ago. |
• | The sustained improvement in asset quality led to a further reduction in the allowance for loan losses to 2.09% of total loans, from 2.25% at the linked quarter-end and 2.53% at year-end 2011. |
• | Second quarter 2012 total non-interest expense was up moderately compared to both the linked and year-ago quarters. The previously mentioned acquisition and pension related costs were the key drivers, while $355,000 of additional incentive and sales-based compensation, plus a $100,000 contribution to Peoples' private charitable foundation were other significant contributing factors to the year-over-year increase. Compensation expenses are benefiting from the 8% reduction in employee count since June 30, 2011. |
• | Both period-end and average loan balances were higher in the second quarter due to commercial loan growth. Actual period-end balances increased $11 million during the quarter and $17 million since year-end, while average loan balances were up $13 million on a linked quarter basis and $12 million year-over-year. |
• | Retail deposit balances experienced continued growth during the quarter, increasing $19 million since the prior quarter-end and $77 million compared to year-end 2011. Non-interest-bearing deposits comprised 20.0% of total retail deposits versus 18.6% at year-end 2011. |
"We are pleased to report another quarter of solid earnings driven by improvements in several key areas,” said Chuck Sulerzyski, President and Chief Executive Officer. “Revenue growth is occurring with modest loan growth, reflecting the value of our revenue diversity. Operating expenses are being managed effectively. Credit quality trends remained favorable and led to us releasing additional reserves."
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Sulerzyski continued, "Other major accomplishments during the second quarter included the announcement of our first banking acquisition since 2006 and the completed acquisition of a small financial advisory book of business in Wood County, West Virginia. We are excited by this expansion of our franchise and customer base within our existing footprint. As the pending bank transaction progresses, our management team is working diligently to capitalize on potential opportunities to acquire banks, insurance agencies and wealth management providers in or around our existing markets."
On June 5, 2012, Peoples announced plans to acquire Sistersville Bancorp, Inc. and its wholly-owned subsidiary, First Federal Savings Bank, in a merger transaction for total cash consideration of $9.8 million, or $30.74 for each share of Sistersville common stock. The merger transactions are expected to be completed late in the third quarter of 2012, subject to customary closing conditions, including regulatory approvals and Sistersville shareholder approval. At that time, First Federal Savings' full service offices in Sistersville and Parkersburg, West Virginia, will become branches of Peoples Bank. Given the expected completion date, this transaction should have minimal impact on 2012 earnings but is expected to be accretive to earnings beginning in 2013.
Net interest income increased modestly in the second quarter of 2012, to $13.6 million compared to $13.4 million for both the linked and year-ago quarters. This improvement occurred as Peoples reduced funding costs, which caused a greater decrease in interest expense than the decline experienced in interest income due to lower reinvestment rates. On a year-to-date basis, net interest income of $27.0 million was comparable with the prior year period. Peoples has maintained a relatively stable net interest margin of 3.42% through six months of 2012 despite lower long-term interest rates.
"The flatter yield curve experienced in the second quarter placed additional downward pressure on asset yields," said Edward Sloane, Chief Financial Officer and Treasurer. “However, recent actions taken to reduce our funding costs successfully mitigated the impact on our net interest margin. Second quarter funding costs reflected a full quarter's impact of the debt restructuring completed last quarter, plus the benefit of our remaining high-cost special CDs maturing. In addition, asset yields, while lower than recent periods, benefited from the modest loan growth that has occurred thus far in 2012. Our ability to maintain and improve net interest margin continues to depend upon meaningful loan growth, coupled with disciplined balance sheet management and pricing."
Second quarter 2012 non-interest income was 8% higher than the prior year second quarter, as strong revenue generation occurred in several major sources. Non-interest income was down 6% on a linked quarter basis, due entirely to the recognition of $919,000 in annual performance-based insurance revenue during the first quarter. Mortgage banking income was more than double the amount generated in last year's second quarter and up 24% from the linked quarter. These increases reflect significantly higher production volumes attributable to refinancing activity. Peoples' insurance commission revenue has benefited from increases in premiums occurring within the industry. Increased debit card usage by Peoples' customers continued to produce double-digit year-over-year increases in electronic banking income.
Non-interest expenses totaled $15.7 million for the second quarter of 2012, up 4% from the linked quarter and 7% year-over-year. These increases were driven primarily by $353,000 in pension settlement charges associated with lump sum distributions, plus $207,000 of legal and other professional services costs associated with acquisitions either completed or evaluated by Peoples. In the second quarter of 2012, Peoples made an additional $100,000 contribution to its private foundation, resulting in year-to-date contributions of $200,000, while no contributions were made in the first half of 2011. Second quarter sales and incentive-based compensation also was $355,000 higher than the prior year quarter corresponding with insurance and mortgage loan production volumes, plus the stronger operating results through six months of 2012. Total salary and employee benefit costs, although higher than prior quarters, continued to benefit from the planned reduction in full-time equivalent employees initiated in the second half of 2011. At June 30, 2012, Peoples had 494 full-time equivalent employees, down 4% versus year-end 2011 and 8% fewer than at June 30, 2011.
"We remain committed to generating positive operating leverage through disciplined expense management," said Sloane. "Through six months of 2012, our revenue has grown at a faster pace than we previously anticipated, due to the significantly higher mortgage banking activity. In contrast, operating expenses were generally in line with our expectations considering the acquisition costs incurred during the second quarter. In addition, we began incurring pension settlement charges one quarter earlier this year than in 2011. In the second half of 2012, we will strive to continue to manage operating expenses to maintain our efficiency ratio in the range of 66% to 68%."
Peoples' portfolio loan balances experienced modest growth during the second quarter of 2012, driven primarily by commercial lending opportunities within Peoples' market area as most of the residential mortgage loan production continues to be sold on the secondary market. Year-to-date loan growth has been tempered by the first quarter payoff of two nonperforming commercial real estate loan relationships totaling $8.1 million.
“New loan production was stronger in the second quarter, which produced higher loan balances,” said Sulerzyski. “We also experienced continued improvement in our asset quality during the quarter, with a further decline in criticized assets and net charge-offs remaining at a very low level. In the second half of 2012, loan growth will be challenged by some expected payoffs. We also will continue to take a cautious approach with our allowance for loan losses. Any additional reserve releases will depend on our credit metrics and the factors affecting loan losses."
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During the second quarter of 2012, total nonperforming assets decreased 17% to $17.8 million, or 1.85% of total loans plus OREO, at June 30, 2012, compared to $21.4 million and 2.25% at March 31, 2012. This reduction was due mostly to $2.6 million in nonaccrual loans being restored to accrual status. Total criticized loans have decreased $40.5 million, or 28.7%, since year-end 2011, reflecting $26.2 million in principal paydowns. Peoples also upgraded $17.5 million in loans during the first half of 2012 based upon the financial condition of the borrowers. These positive trends in asset quality drove the significant decrease in Peoples' allowance for loan losses during the second quarter, which stood at 2.09% of total loans and 119.9% of nonperforming loans at June 30, 2012, compared to 2.53% and 79.0%, respectively, at year-end 2011.
"Overall, our second quarter results reflect positive progress towards sustaining the earnings momentum that has been building in recent quarters," summarized Sulerzyski. "We have maintained a growing, diversified revenue stream, which will be a source of strength if interest rates remain near their current low levels. Operating expenses are being managed to enhance overall efficiency. Continued asset quality improvement is freeing up capital that we intend to redeploy through prudent growth. We are committed to building shareholder value through disciplined execution of our strategies."
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 second 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, 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, 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, charge-offs and loan loss provisions, 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, its subsidiaries and one or more acquired companies 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) 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, its subsidiaries or one or more acquired companies to a variety of new and more stringent legal and regulatory requirements which adversely affect their respective businesses; (7) changes in accounting standards, policies, estimates or procedures may adversely affect Peoples' reported financial condition or results of operations; (8) 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; (9) Peoples' ability to receive dividends from its subsidiaries; (10) Peoples' ability to maintain required capital levels and adequate sources of funding and liquidity; (11) the impact of larger or similar financial
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institutions encountering problems, which may adversely affect the banking industry and/or Peoples' business generation and retention, funding and liquidity; (12) 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; (13) Peoples' ability to secure confidential information through the use of computer systems and telecommunications networks, including those of our third-party vendors and other service providers, may prove inadequate, which could adversely affect customer confidence in Peoples and/or result in Peoples incurring a financial loss; (14) the overall adequacy of our risk management program; (15) Peoples' ability to complete and, if completed, successfully integrate acquisitions, including the pending merger of Sistersville Bancorp, Inc. with and into Peoples; 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 June 30, 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.
PER COMMON SHARE DATA AND SELECTED RATIOS
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | ||||||||||||||||
2012 | 2012 | 2011 | 2012 | 2011 | |||||||||||||||
PER COMMON SHARE: | |||||||||||||||||||
Earnings per share: | |||||||||||||||||||
Basic | $ | 0.47 | $ | 0.63 | $ | 0.26 | $ | 1.10 | $ | 0.38 | |||||||||
Diluted | 0.47 | 0.63 | 0.26 | 1.10 | 0.38 | ||||||||||||||
Cash dividends declared per share | 0.11 | 0.11 | — | 0.22 | 0.10 | ||||||||||||||
Book value per share | 20.39 | 19.83 | 19.15 | 20.39 | 19.15 | ||||||||||||||
Tangible book value per share (a) | 14.18 | 13.71 | 12.99 | 14.18 | 12.99 | ||||||||||||||
Closing stock price at end of period | $ | 21.98 | $ | 17.54 | $ | 11.27 | $ | 21.98 | $ | 11.27 | |||||||||
SELECTED RATIOS: | |||||||||||||||||||
Return on average equity (b) | 9.57 | % | 12.90 | % | 5.48 | % | 11.22 | % | 4.47 | % | |||||||||
Return on average common equity (b) | 9.57 | % | 12.90 | % | 5.49 | % | 11.22 | % | 4.18 | % | |||||||||
Return on average assets (b) | 1.11 | % | 1.48 | % | 0.65 | % | 1.30 | % | 0.53 | % | |||||||||
Efficiency ratio (c) | 69.61 | % | 65.47 | % | 67.43 | % | 67.52 | % | 66.30 | % | |||||||||
Pre-provision net revenue to average assets (b)(d) | 1.41 | % | 1.68 | % | 1.34 | % | 1.54 | % | 1.48 | % | |||||||||
Net interest margin (b)(e) | 3.43 | % | 3.41 | % | 3.43 | % | 3.42 | % | 3.43 | % | |||||||||
Dividend payout ratio (f) | 23.36 | % | 17.61 | % | — | % | 20.08 | % | 26.26 | % | |||||||||
(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. |
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CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | ||||||||||||||||
(in $000’s) | 2012 | 2012 | 2011 | 2012 | 2011 | ||||||||||||||
Interest income | $ | 17,341 | $ | 17,612 | $ | 18,941 | $ | 34,953 | $ | 38,258 | |||||||||
Interest expense | 3,729 | 4,180 | 5,510 | 7,909 | 11,332 | ||||||||||||||
Net interest income | 13,612 | 13,432 | 13,431 | 27,044 | 26,926 | ||||||||||||||
(Recovery of) provision for loan losses | (1,120 | ) | (2,137 | ) | 2,295 | (3,257 | ) | 7,606 | |||||||||||
Net interest income after (recovery of) provision for loan losses | 14,732 | 15,569 | 11,136 | 30,301 | 19,320 | ||||||||||||||
Net gain on securities transactions | — | 3,163 | 56 | 3,163 | 416 | ||||||||||||||
Loss on debt extinguishment | — | (3,111 | ) | — | (3,111 | ) | — | ||||||||||||
(Loss) gain on loans held-for-sale and other real estate owned | (48 | ) | 56 | (533 | ) | 8 | (476 | ) | |||||||||||
Net gain (loss) on other assets | 5 | (7 | ) | (23 | ) | (2 | ) | (20 | ) | ||||||||||
Non-interest income: | |||||||||||||||||||
Deposit account service charges | 2,230 | 2,237 | 2,454 | 4,467 | 4,628 | ||||||||||||||
Insurance income | 2,438 | 2,951 | 2,165 | 5,389 | 4,997 | ||||||||||||||
Trust and investment income | 1,449 | 1,496 | 1,409 | 2,945 | 2,734 | ||||||||||||||
Electronic banking income | 1,464 | 1,488 | 1,284 | 2,952 | 2,505 | ||||||||||||||
Mortgage banking income | 682 | 549 | 286 | 1,231 | 660 | ||||||||||||||
Bank owned life insurance | (4 | ) | 8 | 92 | 4 | 179 | |||||||||||||
Other non-interest income | 239 | 353 | 201 | 592 | 562 | ||||||||||||||
Total non-interest income | 8,498 | 9,082 | 7,891 | 17,580 | 16,265 | ||||||||||||||
Non-interest expense: | |||||||||||||||||||
Salaries and employee benefits costs | 8,415 | 8,245 | 7,953 | 16,660 | 15,580 | ||||||||||||||
Net occupancy and equipment | 1,503 | 1,432 | 1,472 | 2,935 | 2,973 | ||||||||||||||
Professional fees | 1,204 | 813 | 1,013 | 2,017 | 1,808 | ||||||||||||||
Electronic banking expense | 870 | 694 | 685 | 1,564 | 1,303 | ||||||||||||||
Data processing and software | 485 | 487 | 453 | 972 | 916 | ||||||||||||||
Franchise taxes | 414 | 412 | 358 | 826 | 759 | ||||||||||||||
Communication expense | 288 | 348 | 294 | 636 | 608 | ||||||||||||||
FDIC insurance | 223 | 309 | 450 | 532 | 1,112 | ||||||||||||||
Foreclosed real estate and other loan expenses | 255 | 221 | 224 | 476 | 574 | ||||||||||||||
Amortization of intangible assets | 109 | 107 | 152 | 216 | 314 | ||||||||||||||
Other non-interest expense | 1,920 | 1,948 | 1,665 | 3,868 | 3,390 | ||||||||||||||
Total non-interest expense | 15,686 | 15,016 | 14,719 | 30,702 | 29,337 | ||||||||||||||
Income before income taxes | 7,501 | 9,736 | 3,808 | 17,237 | 6,168 | ||||||||||||||
Income tax expense | 2,471 | 3,079 | 887 | 5,550 | 1,378 | ||||||||||||||
Net income | $ | 5,030 | $ | 6,657 | $ | 2,921 | $ | 11,687 | $ | 4,790 | |||||||||
Preferred dividends | — | — | 238 | — | 761 | ||||||||||||||
Net income available to common shareholders | $ | 5,030 | $ | 6,657 | $ | 2,683 | $ | 11,687 | $ | 4,029 | |||||||||
PER COMMON SHARE DATA: | |||||||||||||||||||
Earnings per share – Basic | $ | 0.47 | $ | 0.63 | $ | 0.26 | $ | 1.10 | $ | 0.38 | |||||||||
Earnings per share – Diluted | $ | 0.47 | $ | 0.63 | $ | 0.26 | $ | 1.10 | $ | 0.38 | |||||||||
Cash dividends declared per share | $ | 0.11 | $ | 0.11 | $ | — | $ | 0.22 | $ | 0.10 | |||||||||
Weighted-average shares outstanding – Basic | 10,524,429 | 10,513,388 | 10,478,362 | 10,518,909 | 10,475,109 | ||||||||||||||
Weighted-average shares outstanding – Diluted | 10,524,429 | 10,513,388 | 10,507,895 | 10,518,929 | 10,492,712 | ||||||||||||||
Actual shares outstanding (end of period) | 10,526,954 | 10,521,548 | 10,478,149 | 10,526,954 | 10,478,149 | ||||||||||||||
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CONSOLIDATED BALANCE SHEETS
June 30, | December 31, | ||||||
(in $000’s) | 2012 | 2011 | |||||
Assets | |||||||
Cash and cash equivalents: | |||||||
Cash and due from banks | $ | 30,175 | $ | 32,346 | |||
Interest-bearing deposits in other banks | 3,508 | 6,604 | |||||
Total cash and cash equivalents | 33,683 | 38,950 | |||||
Available-for-sale investment securities, at fair value (amortized cost of | |||||||
$614,131 at June 30, 2012 and $617,128 at December 31, 2011) | 623,986 | 628,571 | |||||
Held-to-maturity investment securities, at amortized cost (fair value of | |||||||
$38,327 at June 30, 2012 and $16,705 at December 31, 2011) | 37,172 | 16,301 | |||||
Other investment securities, at cost | 24,356 | 24,356 | |||||
Total investment securities | 685,514 | 669,228 | |||||
Loans, net of deferred fees and costs | 955,278 | 938,506 | |||||
Allowance for loan losses | (19,925 | ) | (23,717 | ) | |||
Net loans | 935,353 | 914,789 | |||||
Loans held-for-sale | 5,173 | 3,271 | |||||
Bank premises and equipment, net of accumulated depreciation | 23,754 | 23,905 | |||||
Bank owned life insurance | 49,388 | 49,384 | |||||
Goodwill | 62,852 | 62,520 | |||||
Other intangible assets | 2,531 | 1,955 | |||||
Other assets | 33,111 | 30,159 | |||||
Total assets | $ | 1,831,359 | $ | 1,794,161 | |||
Liabilities | |||||||
Deposits: | |||||||
Non-interest-bearing deposits | $ | 272,627 | $ | 239,837 | |||
Interest-bearing deposits | 1,145,669 | 1,111,243 | |||||
Total deposits | 1,418,296 | 1,351,080 | |||||
Short-term borrowings | 43,347 | 51,643 | |||||
Long-term borrowings | 106,471 | 142,312 | |||||
Junior subordinated notes held by subsidiary trust | 22,618 | 22,600 | |||||
Accrued expenses and other liabilities | 26,004 | 19,869 | |||||
Total liabilities | 1,616,736 | 1,587,504 | |||||
Stockholders' Equity | |||||||
Preferred stock, no par value (50,000 shares authorized, no shares issued | |||||||
at June 30, 2012 and December 31, 2011) | — | — | |||||
Common stock, no par value (24,000,000 shares authorized, 11,134,025 shares | |||||||
issued at June 30, 2012 and 11,122,247 shares issued at December 31, 2011), | |||||||
including shares in treasury | 166,401 | 166,969 | |||||
Retained earnings | 62,920 | 53,580 | |||||
Accumulated comprehensive income, net of deferred income taxes | 430 | 1,412 | |||||
Treasury stock, at cost (607,071 shares at June 30, 2012 and | |||||||
615,123 shares at December 31, 2011) | (15,128 | ) | (15,304 | ) | |||
Total stockholders' equity | 214,623 | 206,657 | |||||
Total liabilities and stockholders' equity | $ | 1,831,359 | $ | 1,794,161 | |||
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SELECTED FINANCIAL INFORMATION
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||
(in $000’s, end of period) | 2012 | 2012 | 2011 | 2011 | 2011 | ||||||||||
Loan Portfolio | |||||||||||||||
Commercial real estate | $ | 394,323 | $ | 394,034 | $ | 410,352 | $ | 424,741 | $ | 411,355 | |||||
Commercial and industrial | 161,893 | 150,431 | 140,857 | 140,058 | 145,625 | ||||||||||
Real estate construction | 43,775 | 43,510 | 30,577 | 26,751 | 29,259 | ||||||||||
Residential real estate | 212,813 | 218,745 | 219,619 | 222,374 | 215,242 | ||||||||||
Home equity lines of credit | 48,414 | 48,067 | 47,790 | 48,085 | 48,148 | ||||||||||
Consumer | 92,334 | 86,965 | 87,531 | 87,072 | 88,345 | ||||||||||
Deposit account overdrafts | 1,726 | 2,351 | 1,780 | 1,712 | 2,145 | ||||||||||
Total loans | $ | 955,278 | $ | 944,103 | $ | 938,506 | $ | 950,793 | $ | 940,119 | |||||
Deposit Balances | |||||||||||||||
Interest-bearing deposits: | |||||||||||||||
Retail certificates of deposit | $ | 411,401 | $ | 392,503 | $ | 411,247 | $ | 415,190 | $ | 421,167 | |||||
Money market deposit accounts | 249,608 | 255,907 | 268,410 | 254,012 | 264,677 | ||||||||||
Governmental deposit accounts | 155,881 | 161,798 | 122,916 | 140,357 | 150,319 | ||||||||||
Savings accounts | 161,664 | 155,097 | 138,383 | 132,182 | 133,352 | ||||||||||
Interest-bearing demand accounts | 112,476 | 110,731 | 106,233 | 100,770 | 99,324 | ||||||||||
Total retail interest-bearing deposits | 1,091,030 | 1,076,036 | 1,047,189 | 1,042,511 | 1,068,839 | ||||||||||
Brokered certificates of deposits | 54,639 | 54,069 | 64,054 | 64,470 | 67,912 | ||||||||||
Total interest-bearing deposits | 1,145,669 | 1,130,105 | 1,111,243 | 1,106,981 | 1,136,751 | ||||||||||
Non-interest-bearing deposits | 272,627 | 268,444 | 239,837 | 235,585 | 222,075 | ||||||||||
Total deposits | $ | 1,418,296 | $ | 1,398,549 | $ | 1,351,080 | $ | 1,342,566 | $ | 1,358,826 | |||||
Asset Quality | |||||||||||||||
Nonperforming assets: | |||||||||||||||
Loans 90+ days past due and accruing | $ | 51 | $ | — | $ | — | $ | 146 | 124 | ||||||
Nonaccrual loans | 16,567 | 20,492 | 30,022 | 32,957 | 31,421 | ||||||||||
Total nonperforming loans | 16,618 | 20,492 | 30,022 | 33,103 | 31,545 | ||||||||||
Other real estate owned | 1,140 | 869 | 2,194 | 3,667 | 3,546 | ||||||||||
Total nonperforming assets | $ | 17,758 | $ | 21,361 | $ | 32,216 | $ | 36,770 | $ | 35,091 | |||||
Allowance for loan losses as a percent of | |||||||||||||||
nonperforming loans | 119.90 | % | 103.69 | % | 79.00 | % | 76.16 | % | 79.78 | % | |||||
Nonperforming loans as a percent of total loans | 1.73 | % | 2.16 | % | 3.19 | % | 3.47 | % | 3.35 | % | |||||
Nonperforming assets as a percent of total assets | 0.97 | % | 1.18 | % | 1.80 | % | 2.04 | % | 1.95 | % | |||||
Nonperforming assets as a percent of total loans | |||||||||||||||
and other real estate owned | 1.85 | % | 2.25 | % | 3.41 | % | 3.84 | % | 3.71 | % | |||||
Allowance for loan losses as a percent of total loans | 2.09 | % | 2.25 | % | 2.53 | % | 2.65 | % | 2.68 | % | |||||
Capital Information(a) | |||||||||||||||
Tier 1 common ratio | 13.92 | % | 13.82 | % | 12.82 | % | 12.40 | % | 12.05 | % | |||||
Tier 1 risk-based capital ratio | 15.93 | % | 15.86 | % | 14.86 | % | 15.98 | % | 15.62 | % | |||||
Total risk-based capital ratio (Tier 1 and Tier 2) | 17.27 | % | 17.20 | % | 16.20 | % | 17.33 | % | 16.97 | % | |||||
Leverage ratio | 10.18 | % | 10.05 | % | 9.45 | % | 10.37 | % | 10.10 | % | |||||
Tier 1 common capital | $ | 156,565 | $ | 153,180 | $ | 142,521 | $ | 139,828 | $ | 136,842 | |||||
Tier 1 capital | 179,183 | 175,789 | 165,121 | 180,294 | 177,287 | ||||||||||
Total capital (Tier 1 and Tier 2) | 194,307 | 190,694 | 180,053 | 195,485 | 192,663 | ||||||||||
Total risk-weighted assets | $ | 1,124,982 | $ | 1,108,633 | $ | 1,111,443 | $ | 1,127,976 | $ | 1,135,234 | |||||
Tangible equity to tangible assets (b) | 8.45 | % | 8.28 | % | 8.22 | % | 9.19 | % | 8.86 | % | |||||
Tangible common equity to tangible assets (b) | 8.45 | % | 8.28 | % | 8.22 | % | 8.16 | % | 7.83 | % | |||||
(a) June 30, 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.
7
PROVISION FOR LOAN LOSSES INFORMATION
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | ||||||||||||||||
(in $000’s) | 2012 | 2012 | 2011 | 2012 | 2011 | ||||||||||||||
(Recovery of) Provision for Loan Losses | |||||||||||||||||||
(Recovery of) Provision for checking account overdrafts | $ | 80 | $ | (12 | ) | $ | 95 | $ | 68 | $ | 106 | ||||||||
(Recovery of) Provision for other loan losses | (1,200 | ) | (2,125 | ) | 2,200 | (3,325 | ) | 7,500 | |||||||||||
Total (recovery of) provision for loan losses | $ | (1,120 | ) | $ | (2,137 | ) | $ | 2,295 | $ | (3,257 | ) | $ | 7,606 | ||||||
Net Charge-Offs | |||||||||||||||||||
Gross charge-offs | $ | 1,545 | $ | 2,571 | $ | 3,470 | $ | 4,116 | $ | 12,250 | |||||||||
Recoveries | 1,341 | 2,240 | 1,892 | 3,581 | 3,044 | ||||||||||||||
Net charge-offs | $ | 204 | $ | 331 | $ | 1,578 | $ | 535 | $ | 9,206 | |||||||||
Net Charge-Offs (Recoveries) by Type | |||||||||||||||||||
Commercial real estate | $ | 84 | $ | 351 | $ | 1,152 | $ | 435 | $ | 7,915 | |||||||||
Commercial and industrial | (67 | ) | (48 | ) | (385 | ) | (115 | ) | 391 | ||||||||||
Residential real estate | 126 | (97 | ) | 630 | 29 | 388 | |||||||||||||
Real estate, construction | — | — | — | — | — | ||||||||||||||
Home equity lines of credit | (1 | ) | 64 | 67 | 63 | 304 | |||||||||||||
Consumer | (33 | ) | 26 | 7 | (7 | ) | 68 | ||||||||||||
Deposit account overdrafts | 95 | 35 | 107 | 130 | 140 | ||||||||||||||
Total net charge-offs | $ | 204 | $ | 331 | $ | 1,578 | $ | 535 | $ | 9,206 | |||||||||
Net charge-offs as a percent of loans (annualized) | 0.09 | % | 0.14 | % | 0.67 | % | 0.11 | % | 1.94 | % | |||||||||
SUPPLEMENTAL INFORMATION
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
(in $000’s, end of period) | 2012 | 2012 | 2011 | 2011 | 2011 | ||||||||||||||
Trust assets under management | $ | 847,962 | $ | 853,444 | $ | 821,659 | $ | 776,165 | $ | 846,052 | |||||||||
Brokerage assets under management | 309,852 | 284,453 | 262,196 | 249,550 | 265,384 | ||||||||||||||
Mortgage loans serviced for others | 296,025 | 281,015 | 275,715 | 262,992 | 259,352 | ||||||||||||||
Employees (full-time equivalent) | 494 | 499 | 513 | 540 | 537 | ||||||||||||||
8
CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME
Three Months Ended | ||||||||||||||||||||||||||
June 30, 2012 | March 31, 2012 | June 30, 2011 | ||||||||||||||||||||||||
(in $000’s) | Balance | Income/ Expense | Yield/ Cost | Balance | Income/ Expense | Yield/ Cost | Balance | Income/ Expense | Yield/ Cost | |||||||||||||||||
Assets | ||||||||||||||||||||||||||
Short-term investments | $ | 9,336 | $ | 4 | 0.19 | % | $ | 6,280 | $ | 4 | 0.25 | % | $ | 9,200 | $ | 5 | 0.20 | % | ||||||||
Investment securities (a)(b) | 677,538 | 5,530 | 3.27 | % | 682,904 | 6,078 | 3.56 | % | 670,707 | 6,800 | 4.06 | % | ||||||||||||||
Gross loans (a) | 959,599 | 12,072 | 5.05 | % | 946,230 | 11,789 | 5.00 | % | 947,620 | 12,417 | 5.25 | % | ||||||||||||||
Allowance for loan losses | (21,650 | ) | (24,429 | ) | (27,835 | ) | ||||||||||||||||||||
Total earning assets | 1,624,823 | 17,606 | 4.35 | % | 1,610,985 | 17,871 | 4.45 | % | 1,599,692 | 19,222 | 4.81 | % | ||||||||||||||
Intangible assets | 64,737 | 64,425 | 64,682 | |||||||||||||||||||||||
Other assets | 133,991 | 131,331 | 144,357 | |||||||||||||||||||||||
Total assets | $ | 1,823,551 | $ | 1,806,741 | $ | 1,808,731 | ||||||||||||||||||||
Liabilities and Equity | ||||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||||
Savings accounts | $ | 159,242 | $ | 23 | 0.06 | % | $ | 147,420 | $ | 21 | 0.06 | % | $ | 137,518 | $ | 62 | 0.18 | % | ||||||||
Interest-bearing demand accounts | 263,303 | 286 | 0.44 | % | 247,557 | 269 | 0.44 | % | 248,258 | 440 | 0.71 | % | ||||||||||||||
Money market deposit accounts | 253,458 | 113 | 0.18 | % | 264,808 | 126 | 0.19 | % | 264,195 | 225 | 0.34 | % | ||||||||||||||
Brokered certificates of deposits | 53,843 | 487 | 3.64 | % | 61,443 | 528 | 3.46 | % | 69,747 | 570 | 3.28 | % | ||||||||||||||
Retail certificates of deposit | 407,413 | 1,380 | 1.36 | % | 400,444 | 1,603 | 1.61 | % | 420,497 | 2,377 | 2.27 | % | ||||||||||||||
Total interest-bearing deposits | 1,137,259 | 2,289 | 0.81 | % | 1,121,672 | 2,547 | 0.91 | % | 1,140,215 | 3,674 | 1.29 | % | ||||||||||||||
Short-term borrowings | 52,172 | 19 | 0.14 | % | 57,509 | 19 | 0.13 | % | 42,536 | 26 | 0.25 | % | ||||||||||||||
Long-term borrowings | 129,145 | 1,421 | 4.38 | % | 153,106 | 1,614 | 4.20 | % | 174,350 | 1,810 | 4.13 | % | ||||||||||||||
Total borrowed funds | 181,317 | 1,440 | 3.16 | % | 210,615 | 1,633 | 3.09 | % | 216,886 | 1,836 | 3.37 | % | ||||||||||||||
Total interest-bearing liabilities | 1,318,576 | 3,729 | 1.14 | % | 1,332,287 | 4,180 | 1.26 | % | 1,357,101 | 5,510 | 1.63 | % | ||||||||||||||
Non-interest-bearing deposits | 269,316 | 247,487 | 226,669 | |||||||||||||||||||||||
Other liabilities | 24,191 | 19,350 | 11,257 | |||||||||||||||||||||||
Total liabilities | 1,612,083 | 1,599,124 | 1,595,027 | |||||||||||||||||||||||
Preferred equity | — | — | 17,856 | |||||||||||||||||||||||
Common equity | 211,468 | 207,617 | 195,848 | |||||||||||||||||||||||
Stockholders’ equity | 211,468 | 207,617 | 213,704 | |||||||||||||||||||||||
Total liabilities and equity | $ | 1,823,551 | $ | 1,806,741 | $ | 1,808,731 | ||||||||||||||||||||
Net interest income/spread (a) | $ | 13,877 | 3.21 | % | $ | 13,691 | 3.19 | % | $ | 13,712 | 3.18 | % | ||||||||||||||
Net interest margin (a) | 3.43 | % | 3.41 | % | 3.43 | % | ||||||||||||||||||||
(a) Information presented on a fully tax-equivalent basis. | ||||||||||||||||||||||||||
(b) Average balances are based on carrying value. | ||||||||||||||||||||||||||
9
Six Months Ended | |||||||||||||||||
June 30, 2012 | June 30, 2011 | ||||||||||||||||
(in $000’s) | Balance | Income/ Expense | Yield/ Cost | Balance | Income/ Expense | Yield/ Cost | |||||||||||
Assets | |||||||||||||||||
Short-term investments | $ | 7,808 | $ | 8 | 0.21 | % | $ | 14,672 | $ | 16 | 0.22 | % | |||||
Investment securities (a)(b) | 680,221 | 11,608 | 3.41 | % | 665,004 | 13,702 | 4.12 | % | |||||||||
Gross loans (a) | 952,915 | 23,861 | 5.03 | % | 955,478 | 25,121 | 5.29 | % | |||||||||
Allowance for loan losses | (23,039 | ) | (28,085 | ) | |||||||||||||
Total earning assets | 1,617,905 | 35,477 | 4.40 | % | 1,607,069 | 38,839 | 4.85 | % | |||||||||
Intangible assets | 64,581 | 64,751 | |||||||||||||||
Other assets | 132,348 | 144,864 | |||||||||||||||
Total assets | $ | 1,814,834 | $ | 1,816,684 | |||||||||||||
Liabilities and Equity | |||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||
Savings accounts | $ | 153,331 | $ | 44 | 0.06 | % | $ | 133,175 | $ | 117 | 0.18 | % | |||||
Interest-bearing demand accounts | 255,430 | 555 | 0.44 | % | 240,637 | 1,062 | 0.89 | % | |||||||||
Money market deposit accounts | 259,133 | 240 | 0.19 | % | 271,390 | 470 | 0.35 | % | |||||||||
Brokered certificates of deposits | 57,643 | 1,014 | 3.54 | % | 75,685 | 1,202 | 3.20 | % | |||||||||
Retail certificates of deposit | 403,929 | 2,983 | 1.49 | % | 423,689 | 4,808 | 2.29 | % | |||||||||
Total interest-bearing deposits | 1,129,466 | 4,836 | 0.86 | % | 1,144,576 | 7,659 | 1.35 | % | |||||||||
Short-term borrowings | 54,841 | 38 | 0.14 | % | 44,420 | 61 | 0.27 | % | |||||||||
Long-term borrowings | 141,126 | 3,035 | 4.28 | % | 175,404 | 3,612 | 4.12 | % | |||||||||
Total borrowed funds | 195,967 | 3,073 | 3.12 | % | 219,824 | 3,673 | 3.34 | % | |||||||||
Total interest-bearing liabilities | 1,325,433 | 7,909 | 1.20 | % | 1,364,400 | 11,332 | 1.67 | % | |||||||||
Non-interest-bearing deposits | 258,401 | 224,674 | |||||||||||||||
Other liabilities | 21,458 | 11,626 | |||||||||||||||
Total liabilities | 1,605,292 | 1,600,700 | |||||||||||||||
Preferred equity | — | 21,530 | |||||||||||||||
Common equity | 209,542 | 194,454 | |||||||||||||||
Stockholders’ equity | 209,542 | 215,984 | |||||||||||||||
Total liabilities and equity | $ | 1,814,834 | $ | 1,816,684 | |||||||||||||
Net interest income/spread (a) | $ | 27,568 | 3.20 | % | $ | 27,507 | 3.18 | % | |||||||||
Net interest margin (a) | 3.42 | % | 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 | |||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
(in $000’s) | 2012 | 2012 | 2011 | 2011 | 2011 | ||||||||||||||
Tangible Equity: | |||||||||||||||||||
Total stockholders' equity, as reported | $ | 214,623 | $ | 208,666 | $ | 206,657 | $ | 224,530 | $ | 218,527 | |||||||||
Less: goodwill and other intangible assets | 65,383 | 64,429 | 64,475 | 64,489 | 64,602 | ||||||||||||||
Tangible equity | $ | 149,240 | $ | 144,237 | $ | 142,182 | $ | 160,041 | $ | 153,925 | |||||||||
Tangible Common Equity: | |||||||||||||||||||
Tangible equity | $ | 149,240 | $ | 144,237 | $ | 142,182 | $ | 160,041 | $ | 153,925 | |||||||||
Less: preferred stockholders' equity | — | — | — | 17,875 | 17,862 | ||||||||||||||
Tangible common equity | $ | 149,240 | $ | 144,237 | $ | 142,182 | $ | 142,166 | $ | 136,063 | |||||||||
Tangible Assets: | |||||||||||||||||||
Total assets, as reported | $ | 1,831,359 | $ | 1,805,923 | $ | 1,794,161 | $ | 1,805,743 | $ | 1,802,703 | |||||||||
Less: goodwill and other intangible assets | 65,383 | 64,429 | 64,475 | 64,489 | 64,602 | ||||||||||||||
Tangible assets | $ | 1,765,976 | $ | 1,741,494 | $ | 1,729,686 | $ | 1,741,254 | $ | 1,738,101 | |||||||||
Tangible Book Value per Common Share: | |||||||||||||||||||
Tangible common equity | $ | 149,240 | $ | 144,237 | $ | 142,182 | $ | 142,166 | $ | 136,063 | |||||||||
Common shares outstanding | 10,526,954 | 10,521,548 | 10,507,124 | 10,489,400 | 10,478,149 | ||||||||||||||
Tangible book value per common share | $ | 14.18 | $ | 13.71 | $ | 13.53 | $ | 13.55 | $ | 12.99 | |||||||||
Tangible Equity to Tangible Assets Ratio: | |||||||||||||||||||
Tangible equity | $ | 149,240 | $ | 144,237 | $ | 142,182 | $ | 160,041 | $ | 153,925 | |||||||||
Total tangible assets | $ | 1,765,976 | $ | 1,741,494 | $ | 1,729,686 | $ | 1,741,254 | $ | 1,738,101 | |||||||||
Tangible equity to tangible assets | 8.45 | % | 8.28 | % | 8.22 | % | 9.19 | % | 8.86 | % | |||||||||
Tangible Common Equity to Tangible Assets Ratio: | |||||||||||||||||||
Tangible common equity | $ | 149,240 | $ | 144,237 | $ | 142,182 | $ | 142,166 | $ | 136,063 | |||||||||
Tangible assets | $ | 1,765,976 | $ | 1,741,494 | $ | 1,729,686 | $ | 1,741,254 | $ | 1,738,101 | |||||||||
Tangible common equity to tangible assets | 8.45 | % | 8.28 | % | 8.22 | % | 8.16 | % | 7.83 | % | |||||||||
11
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | |||||||||||||||||
(in $000’s) | 2012 | 2012 | 2011 | 2012 | 2011 | |||||||||||||||
Pre-Provision Net Revenue: | ||||||||||||||||||||
Income before income taxes | $ | 7,501 | $ | 9,736 | $ | 3,808 | $ | 17,237 | $ | 6,168 | ||||||||||
Add: provision for loan losses | — | — | 2,295 | — | 7,606 | |||||||||||||||
Add: loss on debt extinguishment | — | (3,111 | ) | — | (3,111 | ) | — | |||||||||||||
Less: recovery of loan losses | (1,120 | ) | (2,137 | ) | — | (3,257 | ) | — | ||||||||||||
Less: net gain on securities transactions | — | 3,163 | 56 | 3,163 | 416 | |||||||||||||||
Pre-provision net revenue | $ | 6,381 | $ | 7,547 | $ | 6,047 | $ | 13,928 | $ | 13,358 | ||||||||||
Pre-provision net revenue | 6,381 | 7,547 | 6,047 | 13,928 | 13,928 | 13,358 | ||||||||||||||
Total average assets | 1,823,551 | 1,806,741 | 1,808,731 | 1,814,834 | 1,816,684 | |||||||||||||||
Pre-provision net revenue to average assets (annualized) | 1.41 | % | 1.68 | % | 1.34 | % | 1.54 | % | 1.48 | % | ||||||||||
END OF RELEASE
12