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| 8-K - 8-K - PEOPLES BANCORP INC | q120148ker.htm |
P.O. BOX 738 - MARIETTA, OHIO - 45750 | NEWS RELEASE | ||
www.peoplesbancorp.com | |||
FOR IMMEDIATE RELEASE | Contact: | Edward G. Sloane | |
April 22, 2014 | Chief Financial Officer and Treasurer | ||
(740) 373-3155 | |||
PEOPLES BANCORP INC. REPORTS SOLID 1ST QUARTER 2014 EARNINGS
_____________________________________________________________________
Summary first quarter 2014 results:
• | Diluted earnings per share were $0.44 for the quarter. |
◦ | Peoples incurred $486,000 of pension settlement charges during the quarter related to lump-sum payments. |
◦ | No settlement charges were incurred for the first quarter of 2013. |
◦ | Acquisition activities resulted in pre-tax expenses of $150,000 for the quarter versus $65,000 a year ago. |
• | Total revenue grew 17% year-over-year and exceeded the increase in operating expenses. |
◦ | Non-interest income growth was driven mostly by $1.2 million higher insurance income compared to the prior year. |
◦ | Net interest income and margin improved from continued loan growth and stabilization of asset yields. |
◦ | Acquisitions accounted for half of the year-over-year increase in total revenue. |
• | Higher operating expenses were driven mostly by prior acquisitions and additional employee benefit costs. |
◦ | Acquisitions completed during 2013 caused a $1.0 million year-over-year increase in operating expenses. |
◦ | Employee benefit costs were impacted by timing differences of pension and medical plan expenses. |
◦ | Other operating expenses were generally held consistent with the linked quarter. |
• | Total loan balances experienced 10% annualized growth during the quarter. |
◦ | Over half of the increase was due to higher commercial loan balances. |
◦ | Non-mortgage consumer balances grew at a 25% annualized rate for the quarter. |
◦ | Average loan balances were up 6% from the linked quarter and 23% year-over-year. |
• | Bottom-line earnings continued to benefit from favorable asset quality trends. |
◦ | Peoples recorded a minimal provision for loan losses for the quarter versus a $1.0 million recovery a year ago. |
◦ | Nonperforming assets were 0.79% of gross loans and OREO at quarter-end versus 0.81% at year-end 2013. |
◦ | Allowance for loan losses decreased to 1.38% of gross loans at March 31, 2014, from 1.43% at year-end 2013. |
• | Retail deposit balances experienced seasonal growth in consumer and governmental balances. |
◦ | Higher interest-bearing balances were driven by increases in savings and governmental account balances. |
◦ | Non-interest-bearing balances increased 2% during the quarter, and comprised 26% of total deposits at quarter-end. |
◦ | Average retail balances were up 4% from the linked quarter and 5% year-over-year. |
MARIETTA, Ohio - Peoples Bancorp Inc. (“Peoples”) (NASDAQ: PEBO) today announced results for the quarter ended March 31, 2014. Net income totaled $4.8 million for the first quarter of 2014, representing earnings per diluted share of $0.44. In comparison, net income was $5.0 million or $0.47 per diluted share for the first quarter of 2013. The lower first quarter earnings were primarily the result of Peoples recording a nominal provision for loan losses in the first quarter of 2014 while recording a $1.0 million recovery of loan losses a year ago.
"Our first quarter results reflect success in several key areas, with bottom-line earnings generally in line with our expectations," said Chuck Sulerzyski, President and Chief Executive Officer. "For the fourth straight quarter, we have been successful in generating double-digit annualized growth in loan balances. Revenue continues to improve due to the higher loan balances and increased fee-based revenue generation. Year-over-year revenue growth exceeded the increase in operating expenses, creating positive operating leverage. We also benefited from a reduction in our allowance for loan losses which led to essentially no provision for the quarter."
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Sulerzyski continued, "Also during the quarter, we made meaningful progress with our acquisition strategy. Our pending acquisition of Midwest Bancshares remains on schedule, with closing expected to occur by the end of May. We also will be expanding our footprint and entering some quality markets with the planned acquisition of Ohio Heritage Bancorp. These deals represent good strategic fits for Peoples and, when completed, are expected to help us increase long-term shareholder value."
Earlier this month, Peoples announced plans to acquire Coshocton-based Ohio Heritage Bancorp and its banking subsidiary, Ohio Heritage Bank. This transaction is expected to be completed in the third quarter of 2014, subject to the satisfaction of customary closing conditions. At that time, Ohio Heritage's six banking offices would become branches of Peoples. Management expects this transaction to add over $180 million in both loans and deposits. One-time acquisition costs are expected to offset incremental earnings in 2014. Beginning in 2015, this transaction should add $0.10 to $0.12 to Peoples' annual earnings per share.
As announced yesterday, Peoples also has entered into an agreement providing for the acquisition of North Akron
Savings Bank and its four banking offices in northeastern Ohio. This transaction is expected to be completed in the fourth
quarter of 2014, subject to the satisfaction of customary closing conditions. Management anticipates adding another $120
million of loans and $110 million of deposits through this transaction. As a result, this transaction is expected to increase
Peoples' annual earnings per share by at least $0.06 per share beginning in 2015. One-time acquisitions expenses will likely exceed the incremental earnings from this transaction in 2014.
Net interest income was up 19% in the first quarter of 2014, compared to the prior year, while net interest margin was 3.35% versus 3.10%. These improvements were driven by a 10% increase in earning assets due to higher loan balances. Nearly half of the increase in average loans was attributable to the acquisition of Ohio Commerce Bank in the fourth quarter of 2013. First quarter 2014 net interest income and margin also benefited from $231,000, or 14 basis points of margin, in accretion income associated with the fourth quarter 2013 acquisition of Ohio Commerce Bank. On a linked quarter basis, net interest income was down slightly as the impact of earning asset growth was offset by lower interest income. The decreased interest income was due to Peoples recognizing $427,000 of income in the fourth quarter for prepayment fees and interest recovered on nonaccrual loans. This additional income also accounted for a 10 basis point reduction in net interest margin on a linked quarter basis.
"Both net interest income and margin experienced continued improvement in the first quarter, absent the impact of the one-time income recognized in the fourth quarter," said Ed Sloane, Chief Financial Officer and Treasurer. "Overall, we are pleased with this accomplishment, which was driven mostly by the strong loan growth over the last four quarters. The higher earning assets have more than offset the decline experienced in yields due to the prolonged low interest rate environment. Our funding costs also benefited from the continued shift from higher-cost wholesale funding to low-cost core deposits."
Total non-interest income was up 13% in the first quarter of 2014 compared to the prior year, due largely to higher insurance income. Annual performance-based insurance income was $1.2 million versus $0.5 million a year ago. At the same time, insurance commissions were up 24% driven largely by acquisitions completed in the second quarter of 2013. Absent the acquisitions, insurance commission income would have been up 7% year-over-year. Peoples also experienced 8% year-over-year growth in both investment and electronic banking income. In contrast, mortgage banking income was less than half of the prior year amount, as origination volumes have declined in response to the higher long-term interest rates. On a linked quarter basis, total non-interest income grew 10% in the first quarter of 2014. Nearly all of this increase was the result of Peoples recognizing the annual performance-based insurance income.
Non-interest expenses totaled $18.8 million for the first quarter of 2014, 16% higher than the prior year first quarter. Much of this increase was the result of $1.0 million of operating expenses added in connection with acquisitions completed in the second and fourth quarters of 2013. Other significant contributing factors were $929,000 of additional employee benefit costs and $150,000 of acquisition-related expenses. Included in the additional employee benefit costs was $486,000 of pension settlement charges associated with lump-sum payments. The remaining increase related to Peoples' employee medical benefit plan and, to a lesser extent, stock-based compensation. The acquisition-related expenses consisted primarily of fees for legal and other professional services. In comparison, Peoples did not incur any pension settlement charges in the first quarter of 2013, while acquisition-related expenses in that quarter totaled $65,000. Compared to the linked quarter, total non-interest expense was up 2%. Salary and employee benefit costs increased 14% due largely to a difference in the timing of certain benefit costs, such as pension and employee medical plan expenses. Another major contributing factor was the impact of normal annual merit increases.
"Growing revenue faster than operating expenses is a key priority for us during 2014," said Sulerzyski. "First quarter revenue growth was driven by the combination of higher loan balances and additional annual insurance income. These increases more than offset the greater than expected decline in mortgage banking income. On the expense side, pension settlement charges, while occurring a quarter earlier than last year, were less than our prior expectations. We are
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encouraged by the positive gap between revenue and expense growth for the quarter and are working to widen it in future quarters."
During the first quarter of 2014, period-end loan balances grew at a 10% annualized rate to $1.22 billion. Commercial lending accounted for the majority of the higher balances. Consumer lending remained steady with 25% annualized growth in non-mortgage balances for the quarter. Since March 31, 2013, period-end loan balances have increased 25%, with a third of the increase due to the Ohio Commerce Bank acquisition. As a result, average loan balances were 6% higher than the linked quarter and up 23% over the prior year first quarter.
“New production in both our commercial and consumer lending areas has remained steady, which led to another quarter of strong growth in balances,” said Sulerzyski. "Even more importantly, the growth has been more balanced between commercial and consumer lending than it was prior to the Great Recession, which helps create better diversity within the portfolio. This solid start to 2014 positions us to meet, if not surpass, our goal of 15% to 20% increase in average loan balances for the full year. In the coming quarters, preserving our strong asset quality will be equally as important as achieving our desired level of growth."
At March 31, 2014, total nonperforming assets were $9.7 million, unchanged from the prior quarter-end and 30% lower than a year ago. As a percentage of total loans plus other real estate owned ("OREO"), total nonperforming assets were 0.79% at quarter-end versus 0.81% at year-end 2013 and 1.41% a year ago. Net charge-offs also remained lower than Peoples' long-term historical average during the first quarter of 2014, totaling 7 basis points of average loans on an annualized basis. The sustained improvement in asset quality led to a further reduction of Peoples' allowance for loan losses. At quarter-end, the ratio of the allowance for loan losses to total loans was 1.38%, compared to 1.43% at December 31, 2013 and 1.78% at March 31, 2013. As a percentage of nonperforming loans, Peoples' allowance for loan losses was 188.2%, 194.1% and 134.0%, respectively.
Peoples' retail deposits grew 3% during the first quarter, due mostly to seasonal increases in certain deposit balances. Retail interest-bearing deposits were up 4% since year-end 2013, due mostly to higher governmental and savings account balances, while non-interest-bearing balances grew 2%. Balances in each of these account types normally are higher in the first quarter of each year compared to the other quarters. Peoples continued to experience a further reduction in certificate of deposit balances as a result of management's ongoing funding strategy. The higher retail deposit balances allowed Peoples to reduce total borrowed funds compared to year-end 2013.
"Overall, we are very pleased with first quarter results," summarized Sulerzyski. "The solid start to the year enhances our ability to achieve key 2014 goals and sustain the earnings momentum built during 2013. We also have had continued success with acquisitions, which are an integral part of our strategy to grow the company and build long-term shareholder value."
Peoples Bancorp Inc. is a diversified financial services holding company with $2.1 billion in total assets, 49 locations and 47 ATMs in Ohio, West Virginia and Kentucky. Peoples makes available a complete line of banking, investment, insurance and trust solutions through its subsidiaries - Peoples Bank, National Association 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 U.S. 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 2014 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.
Use of Non-GAAP Financial Measures
This news release contains financial information and performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Management uses these "non-GAAP" measures in its analysis of Peoples' performance and the efficiency of its operations. Management believes that these non-GAAP measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods and peers. These disclosures should not be viewed as substitutes for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Below is a listing of the types of non-GAAP measures used in this news release:
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◦ | Tangible assets and tangible equity measures are non-GAAP since they exclude the impact of intangible assets acquired through acquisitions on both total stockholders’ equity and total assets and the related amortization from earnings. |
◦ | Pre-provision net revenue is defined as net interest income plus non-interest income minus non-interest expense. This measure is non-GAAP since it excludes the provision for loan losses and all gains and/or losses included in earnings. |
A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is included at the end of this news release under the caption of "Non-GAAP Financial Measures".
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) the success, impact, and timing of Peoples' business strategies, including the successful completion and subsequent integration of acquisitions and the expansion of consumer lending activity; (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 due to economic conditions and/or the fiscal policies of the U.S. government and Federal Reserve Board, which may adversely impact interest margins and interest rate sensitivity; (4) changes in prepayment speeds, loan originations and charge-offs, which may be less favorable than expected and adversely impact the amount of interest income generated; (5) adverse changes in the economic conditions and/or activities, including impacts from the implementation of the Budget Control Act of 2011 and the American Taxpayer Relief Act of 2012, as well as continuing economic uncertainty in the U.S., the European Union, and other areas, which could decrease sales volumes 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) deterioration in the credit quality of Peoples' loan portfolio, which may adversely impact the provision for loan losses; (8) changes in accounting standards, policies, estimates or procedures which may adversely affect Peoples' reported financial condition or results of operations; (9) adverse changes in the conditions and trends in the financial markets, including political developments, which may adversely affect the fair value of securities within Peoples' investment portfolio, the interest rate sensitivity of Peoples' consolidated balance sheet, and the income generated by Peoples' trust and investment activities; (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 sized financial institutions encountering problems, which may adversely affect the banking industry and/or Peoples' business generation and retention, funding and liquidity; (13) 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; (14) 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; (15) the overall adequacy of our risk management program; 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, 2013.
Peoples encourages readers of this news release to understand forward-looking statements are 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.
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As required by U.S. GAAP, Peoples is required to evaluate the impact of subsequent events through the issuance date of its March 31, 2014 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 | |||||||||||
March 31, | December 31, | March 31, | |||||||||
2014 | 2013 | 2013 | |||||||||
PER SHARE: | |||||||||||
Earnings per share: | |||||||||||
Basic | $ | 0.45 | $ | 0.48 | $ | 0.47 | |||||
Diluted | 0.44 | 0.47 | 0.47 | ||||||||
Cash dividends declared per share | 0.15 | 0.14 | 0.12 | ||||||||
Book value per share | 21.63 | 20.89 | 21.39 | ||||||||
Tangible book value per share (a) | 14.38 | 13.57 | 14.77 | ||||||||
Closing stock price at end of period | $ | 24.73 | $ | 22.51 | $ | 22.39 | |||||
SELECTED RATIOS: | |||||||||||
Return on average equity (b) | 8.56 | % | 9.09 | % | 9.18 | % | |||||
Return on average assets (b) | 0.95 | % | 1.01 | % | 1.06 | % | |||||
Efficiency ratio (c) | 71.13 | % | 71.80 | % | 71.61 | % | |||||
Pre-provision net revenue to average assets (b)(d) | 1.38 | % | 1.29 | % | 1.24 | % | |||||
Net interest margin (b)(e) | 3.35 | % | 3.43 | % | 3.10 | % | |||||
Dividend payout ratio | 33.91 | % | 29.61 | % | 25.79 | % | |||||
(a) | This amount represents a non-GAAP financial 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 news 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 financial measure since it excludes the recovery of or provision for loan losses and net gains or losses on securities transactions, debt extinguishment, loans held-for-sale and other real estate owned, and other assets. 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 news release. |
(e) | Information presented on a fully tax-equivalent basis. |
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CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended | |||||||||||
March 31, | December 31, | March 31, | |||||||||
(in $000’s) | 2014 | 2013 | 2013 | ||||||||
Interest income | $ | 18,152 | $ | 18,385 | $ | 16,066 | |||||
Interest expense | 2,672 | 2,806 | 3,091 | ||||||||
Net interest income | 15,480 | 15,579 | 12,975 | ||||||||
Provision for (recovery of) loan losses | 8 | (964 | ) | (1,065 | ) | ||||||
Net interest income after provision for (recovery of) loan losses | 15,472 | 16,543 | 14,040 | ||||||||
Net (loss) gain on securities transactions | (30 | ) | 46 | 418 | |||||||
Net gain (loss) on loans held-for-sale and other real estate owned | 18 | — | (5 | ) | |||||||
Net loss on other assets | (7 | ) | (125 | ) | — | ||||||
Non-interest income: | |||||||||||
Insurance income | 4,116 | 2,842 | 2,878 | ||||||||
Deposit account service charges | 2,111 | 2,285 | 2,057 | ||||||||
Trust and investment income | 1,847 | 1,897 | 1,702 | ||||||||
Electronic banking income | 1,539 | 1,664 | 1,419 | ||||||||
Mortgage banking income | 227 | 316 | 718 | ||||||||
Other non-interest income | 455 | 342 | 298 | ||||||||
Total non-interest income | 10,295 | 9,346 | 9,072 | ||||||||
Non-interest expense: | |||||||||||
Salaries and employee benefits costs | 10,792 | 9,463 | 8,717 | ||||||||
Net occupancy and equipment | 1,816 | 1,719 | 1,858 | ||||||||
Electronic banking expense | 1,082 | 941 | 840 | ||||||||
Professional fees | 854 | 1,123 | 894 | ||||||||
Data processing and software | 570 | 533 | 461 | ||||||||
Marketing expense | 459 | 742 | 450 | ||||||||
Franchise taxes | 385 | 405 | 413 | ||||||||
Communication expense | 359 | 333 | 303 | ||||||||
Amortization of intangible assets | 263 | 274 | 189 | ||||||||
FDIC insurance | 260 | 282 | 280 | ||||||||
Foreclosed real estate and other loan expenses | 215 | 197 | 217 | ||||||||
Other non-interest expense | 1,762 | 2,383 | 1,563 | ||||||||
Total non-interest expense | 18,817 | 18,395 | 16,185 | ||||||||
Income before income taxes | 6,931 | 7,415 | 7,340 | ||||||||
Income tax expense | 2,148 | 2,301 | 2,318 | ||||||||
Net income | $ | 4,783 | $ | 5,114 | $ | 5,022 | |||||
PER SHARE DATA: | |||||||||||
Earnings per share – Basic | $ | 0.45 | $ | 0.48 | $ | 0.47 | |||||
Earnings per share – Diluted | $ | 0.44 | $ | 0.47 | $ | 0.47 | |||||
Cash dividends declared per share | $ | 0.15 | $ | 0.14 | $ | 0.12 | |||||
Weighted-average shares outstanding – Basic | 10,636,089 | 10,602,266 | 10,556,261 | ||||||||
Weighted-average shares outstanding – Diluted | 10,740,884 | 10,718,465 | 10,571,383 | ||||||||
Actual shares outstanding (end of period) | 10,657,569 | 10,605,782 | 10,568,147 | ||||||||
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CONSOLIDATED BALANCE SHEETS
March 31, | December 31, | ||||||
(in $000’s) | 2014 | 2013 | |||||
Assets | |||||||
Cash and cash equivalents: | |||||||
Cash and due from banks | $ | 41,279 | $ | 36,016 | |||
Interest-bearing deposits in other banks | 23,405 | 17,804 | |||||
Total cash and cash equivalents | 64,684 | 53,820 | |||||
Available-for-sale investment securities, at fair value (amortized cost of | |||||||
$598,445 at March 31, 2014 and $621,126 at December 31, 2013) | 592,097 | 606,108 | |||||
Held-to-maturity investment securities, at amortized cost (fair value of | |||||||
$47,599 at March 31, 2014 and $46,094 at December 31, 2013) | 48,803 | 49,222 | |||||
Other investment securities, at cost | 21,299 | 25,196 | |||||
Total investment securities | 662,199 | 680,526 | |||||
Loans, net of deferred fees and costs | 1,226,506 | 1,196,234 | |||||
Allowance for loan losses | (16,870 | ) | (17,065 | ) | |||
Net loans | 1,209,636 | 1,179,169 | |||||
Loans held-for-sale | 2,947 | 1,688 | |||||
Bank premises and equipment, net of accumulated depreciation | 30,551 | 29,809 | |||||
Goodwill | 70,520 | 70,520 | |||||
Other intangible assets | 6,768 | 7,083 | |||||
Other assets | 30,948 | 36,493 | |||||
Total assets | $ | 2,078,253 | $ | 2,059,108 | |||
Liabilities | |||||||
Deposits: | |||||||
Non-interest-bearing deposits | $ | 417,629 | $ | 409,891 | |||
Interest-bearing deposits | 1,215,436 | 1,170,867 | |||||
Total deposits | 1,633,065 | 1,580,758 | |||||
Short-term borrowings | 68,777 | 113,590 | |||||
Long-term borrowings | 120,164 | 121,826 | |||||
Accrued expenses and other liabilities | 25,671 | 21,381 | |||||
Total liabilities | 1,847,677 | 1,837,555 | |||||
Stockholders' Equity | |||||||
Preferred stock, no par value (50,000 shares authorized, no shares issued | |||||||
at March 31, 2014 and December 31, 2013) | — | — | |||||
Common stock, no par value (24,000,000 shares authorized, 11,260,232 shares | |||||||
issued at March 31, 2014 and 11,206,576 shares issued at | |||||||
December 31, 2013), including shares in treasury | 169,503 | 168,869 | |||||
Retained earnings | 84,058 | 80,898 | |||||
Accumulated other comprehensive loss, net of deferred income taxes | (7,956 | ) | (13,244 | ) | |||
Treasury stock, at cost (602,663 shares at March 31, 2014 and | |||||||
600,794 shares at December 31, 2013) | (15,029 | ) | (14,970 | ) | |||
Total stockholders' equity | 230,576 | 221,553 | |||||
Total liabilities and stockholders' equity | $ | 2,078,253 | $ | 2,059,108 | |||
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SELECTED FINANCIAL INFORMATION
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
(in $000’s, end of period) | 2014 | 2013 | 2013 | 2013 | 2013 | ||||||||||
Loan Portfolio | |||||||||||||||
Commercial real estate, construction | $ | 55,935 | $ | 47,539 | $ | 39,969 | $ | 30,770 | $ | 24,108 | |||||
Commercial real estate, other | 458,580 | 450,170 | 374,953 | 389,281 | 381,331 | ||||||||||
Commercial and industrial | 233,329 | 232,754 | 192,238 | 184,981 | 174,982 | ||||||||||
Residential real estate | 268,794 | 268,617 | 262,602 | 252,282 | 237,193 | ||||||||||
Home equity lines of credit | 60,319 | 60,076 | 55,341 | 52,212 | 50,555 | ||||||||||
Consumer | 143,541 | 135,018 | 127,785 | 119,029 | 108,353 | ||||||||||
Deposit account overdrafts | 6,008 | 2,060 | 4,277 | 1,674 | 3,996 | ||||||||||
Total loans | $ | 1,226,506 | $ | 1,196,234 | $ | 1,057,165 | $ | 1,030,229 | $ | 980,518 | |||||
Deposit Balances | |||||||||||||||
Interest-bearing deposits: | |||||||||||||||
Retail certificates of deposit | $ | 355,345 | $ | 363,226 | $ | 334,910 | $ | 349,511 | $ | 353,894 | |||||
Money market deposit accounts | 276,226 | 275,801 | 224,400 | 238,554 | 288,538 | ||||||||||
Governmental deposit accounts | 177,590 | 132,379 | 151,910 | 146,817 | 167,441 | ||||||||||
Savings accounts | 227,695 | 215,802 | 196,293 | 199,503 | 200,549 | ||||||||||
Interest-bearing demand accounts | 133,508 | 134,618 | 123,966 | 125,875 | 124,969 | ||||||||||
Total retail interest-bearing deposits | 1,170,364 | 1,121,826 | 1,031,479 | 1,060,260 | 1,135,391 | ||||||||||
Brokered certificates of deposits | 45,072 | 49,041 | 49,620 | 50,393 | 52,648 | ||||||||||
Total interest-bearing deposits | 1,215,436 | 1,170,867 | 1,081,099 | 1,110,653 | 1,188,039 | ||||||||||
Non-interest-bearing deposits | 417,629 | 409,891 | 356,767 | 325,125 | 340,887 | ||||||||||
Total deposits | $ | 1,633,065 | $ | 1,580,758 | $ | 1,437,866 | $ | 1,435,778 | $ | 1,528,926 | |||||
Asset Quality | |||||||||||||||
Nonperforming assets: | |||||||||||||||
Loans 90+ days past due and accruing | $ | 159 | $ | 910 | $ | 2,597 | $ | 1,520 | $ | 1,215 | |||||
Nonaccrual loans | 8,806 | 7,881 | 8,537 | 10,607 | 11,803 | ||||||||||
Total nonperforming loans | 8,965 | 8,791 | 11,134 | 12,127 | 13,018 | ||||||||||
Other real estate owned | 773 | 893 | 120 | 120 | 815 | ||||||||||
Total nonperforming assets | $ | 9,738 | $ | 9,684 | $ | 11,254 | $ | 12,247 | $ | 13,833 | |||||
Allowance for loan losses as a percent of | |||||||||||||||
nonperforming loans | 188.19 | % | 194.13 | % | 151.79 | % | 141.11 | % | 133.96 | % | |||||
Nonperforming loans as a percent of total loans | 0.73 | % | 0.73 | % | 1.05 | % | 1.17 | % | 1.32 | % | |||||
Nonperforming assets as a percent of total assets | 0.47 | % | 0.47 | % | 0.59 | % | 0.64 | % | 0.71 | % | |||||
Nonperforming assets as a percent of total loans | |||||||||||||||
and other real estate owned | 0.79 | % | 0.81 | % | 1.06 | % | 1.18 | % | 1.41 | % | |||||
Allowance for loan losses as a percent of loans, net | |||||||||||||||
of deferred fees and costs (c) | 1.38 | % | 1.43 | % | 1.60 | % | 1.66 | % | 1.78 | % | |||||
Capital Information(a) | |||||||||||||||
Tier 1 common ratio | 12.56 | % | 12.42 | % | 14.09 | % | 14.17 | % | 14.69 | % | |||||
Tier 1 risk-based capital ratio | 12.56 | % | 12.42 | % | 14.09 | % | 14.17 | % | 14.69 | % | |||||
Total risk-based capital ratio (Tier 1 and Tier 2) | 13.92 | % | 13.78 | % | 15.46 | % | 15.54 | % | 16.05 | % | |||||
Leverage ratio | 8.56 | % | 8.52 | % | 9.14 | % | 9.04 | % | 8.90 | % | |||||
Tier 1 common capital | $ | 170,677 | $ | 166,217 | $ | 168,254 | $ | 166,576 | $ | 164,329 | |||||
Tier 1 capital | 170,677 | 166,217 | 168,254 | 166,576 | 164,329 | ||||||||||
Total capital (Tier 1 and Tier 2) | 189,145 | 184,457 | 184,550 | 182,706 | 179,569 | ||||||||||
Total risk-weighted assets | $ | 1,358,691 | $ | 1,338,811 | $ | 1,194,016 | $ | 1,175,647 | $ | 1,118,644 | |||||
Tangible equity to tangible assets (b) | 7.66 | % | 7.26 | % | 8.16 | % | 8.07 | % | 8.35 | % | |||||
(a) March 31, 2014 data based on preliminary analysis and subject to revision.
(b) These ratios represent non-GAAP financial 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 news release.
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(RECOVERY OF) PROVISION FOR LOAN LOSSES INFORMATION
Three Months Ended | |||||||||||
March 31, | December 31, | March 31, | |||||||||
(in $000’s) | 2014 | 2013 | 2013 | ||||||||
Provision for (Recovery of) Loan Losses | |||||||||||
Provision for (recovery of) checking account overdrafts | $ | 8 | $ | 102 | $ | (15 | ) | ||||
Provision for (recovery of) other loan losses | — | (1,066 | ) | (1,050 | ) | ||||||
Total provision for (recovery of) loan losses | $ | 8 | $ | (964 | ) | $ | (1,065 | ) | |||
Net Charge-Offs (Recoveries) | |||||||||||
Gross charge-offs | $ | 618 | $ | 871 | $ | 991 | |||||
Recoveries | 415 | 1,998 | 1,684 | ||||||||
Net charge-offs (recoveries) | $ | 203 | $ | (1,127 | ) | $ | (693 | ) | |||
Net Charge-Offs (Recoveries) by Type | |||||||||||
Commercial real estate, construction | $ | — | $ | — | $ | — | |||||
Commercial real estate, other | (112 | ) | (1,455 | ) | (808 | ) | |||||
Commercial and industrial | 44 | 21 | (17 | ) | |||||||
Residential real estate | 99 | (55 | ) | 18 | |||||||
Home equity lines of credit | 14 | (6 | ) | (6 | ) | ||||||
Consumer | 118 | 248 | 55 | ||||||||
Deposit account overdrafts | 40 | 120 | 65 | ||||||||
Total net charge-offs (recoveries) | $ | 203 | $ | (1,127 | ) | $ | (693 | ) | |||
As a percent of average gross loans (annualized) | 0.07 | % | (0.39 | )% | (0.29 | )% | |||||
SUPPLEMENTAL INFORMATION
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
(in $000’s, end of period) | 2014 | 2013 | 2013 | 2013 | 2013 | ||||||||||||||
Trust assets under management | $ | 995,861 | $ | 1,000,171 | $ | 994,683 | $ | 939,292 | $ | 927,675 | |||||||||
Brokerage assets under management | 494,246 | 474,384 | 449,196 | 433,651 | 433,217 | ||||||||||||||
Mortgage loans serviced for others | $ | 340,057 | $ | 341,183 | $ | 339,557 | $ | 338,854 | $ | 343,769 | |||||||||
Employees (full-time equivalent) | 557 | 546 | 539 | 545 | 517 | ||||||||||||||
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CONSOLIDATED AVERAGE BALANCE SHEETS AND NET INTEREST INCOME
Three Months Ended | ||||||||||||||||||||||||||
March 31, 2014 | December 31, 2013 | March 31, 2013 | ||||||||||||||||||||||||
(in $000’s) | Balance | Income/ Expense | Yield/ Cost | Balance | Income/ Expense | Yield/ Cost | Balance | Income/ Expense | Yield/ Cost | |||||||||||||||||
Assets | ||||||||||||||||||||||||||
Short-term investments | $ | 7,058 | $ | 20 | 1.15 | % | $ | 8,652 | $ | 30 | 1.38 | % | $ | 39,099 | $ | 18 | 0.20 | % | ||||||||
Other long-term investments | 2,254 | 3 | 0.54 | % | 2,948 | 2 | 0.27 | % | — | — | — | % | ||||||||||||||
Investment securities (a)(b) | 675,311 | 5,024 | 2.98 | % | 691,365 | 5,040 | 2.92 | % | 705,532 | 4,845 | 2.75 | % | ||||||||||||||
Gross loans (a) | 1,214,664 | 13,410 | 4.43 | % | 1,147,285 | 13,619 | 4.69 | % | 985,056 | 11,495 | 4.69 | % | ||||||||||||||
Allowance for loan losses | (17,228 | ) | (17,439 | ) | (18,783 | ) | ||||||||||||||||||||
Total earning assets | 1,882,059 | 18,457 | 3.93 | % | 1,832,811 | 18,691 | 4.04 | % | 1,710,904 | 16,358 | 3.83 | % | ||||||||||||||
Intangible assets | 77,448 | 77,025 | 69,988 | |||||||||||||||||||||||
Other assets | 91,095 | 102,016 | 133,827 | |||||||||||||||||||||||
Total assets | $ | 2,050,602 | $ | 2,011,852 | $ | 1,914,719 | ||||||||||||||||||||
Liabilities and Equity | ||||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||||
Savings accounts | $ | 220,935 | $ | 30 | 0.06 | % | $ | 211,116 | $ | 29 | 0.05 | % | $ | 190,769 | $ | 25 | 0.05 | % | ||||||||
Government deposit accounts | 149,057 | 123 | 0.33 | % | 141,181 | 131 | 0.37 | % | 145,714 | 202 | 0.56 | % | ||||||||||||||
Interest-bearing demand accounts | 137,026 | 28 | 0.08 | % | 128,877 | 26 | 0.08 | % | 126,763 | 25 | 0.08 | % | ||||||||||||||
Money market deposit accounts | 278,413 | 111 | 0.16 | % | 256,398 | 104 | 0.16 | % | 288,161 | 96 | 0.14 | % | ||||||||||||||
Brokered certificates of deposits | 47,335 | 436 | 3.74 | % | 49,320 | 462 | 3.72 | % | 54,134 | 476 | 3.57 | % | ||||||||||||||
Retail certificates of deposit | 360,457 | 840 | 0.95 | % | 360,733 | 890 | 0.98 | % | 381,650 | 1,115 | 1.18 | % | ||||||||||||||
Total interest-bearing deposits | 1,193,223 | 1,568 | 0.53 | % | 1,147,625 | 1,642 | 0.57 | % | 1,187,191 | 1,939 | 0.66 | % | ||||||||||||||
Short-term borrowings | 102,874 | 31 | 0.12 | % | 120,135 | 49 | 0.16 | % | 33,975 | 13 | 0.15 | % | ||||||||||||||
Long-term borrowings | 121,517 | 1,072 | 3.55 | % | 123,713 | 1,115 | 3.58 | % | 128,421 | 1,139 | 3.57 | % | ||||||||||||||
Total borrowed funds | 224,391 | 1,103 | 1.98 | % | 243,848 | 1,164 | 1.89 | % | 162,396 | 1,152 | 2.86 | % | ||||||||||||||
Total interest-bearing liabilities | 1,417,614 | 2,671 | 0.76 | % | 1,391,473 | 2,806 | 0.80 | % | 1,349,587 | 3,091 | 0.93 | % | ||||||||||||||
Non-interest-bearing deposits | 385,471 | 370,962 | 319,994 | |||||||||||||||||||||||
Other liabilities | 20,876 | 26,108 | 23,381 | |||||||||||||||||||||||
Total liabilities | 1,823,961 | 1,788,543 | 1,692,962 | |||||||||||||||||||||||
Stockholders’ equity | 226,641 | 223,309 | 221,757 | |||||||||||||||||||||||
Total liabilities and equity | $ | 2,050,602 | $ | 2,011,852 | $ | 1,914,719 | ||||||||||||||||||||
Net interest income/spread (a) | $ | 15,786 | 3.17 | % | $ | 15,885 | 3.24 | % | $ | 13,267 | 2.90 | % | ||||||||||||||
Net interest margin (a) | 3.35 | % | 3.43 | % | 3.10 | % | ||||||||||||||||||||
(a) Information presented on a fully tax-equivalent basis. | ||||||||||||||||||||||||||
(b) Average balances are based on carrying value. | ||||||||||||||||||||||||||
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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) | 2014 | 2013 | 2013 | 2013 | 2013 | ||||||||||||||
Tangible Equity: | |||||||||||||||||||
Total stockholders' equity, as reported | $ | 230,576 | $ | 221,553 | $ | 222,247 | $ | 219,147 | $ | 226,079 | |||||||||
Less: goodwill and other intangible assets | 77,288 | 77,603 | 71,417 | 71,608 | 69,977 | ||||||||||||||
Tangible equity | $ | 153,288 | $ | 143,950 | $ | 150,830 | $ | 147,539 | $ | 156,102 | |||||||||
Tangible Assets: | |||||||||||||||||||
Total assets, as reported | $ | 2,078,253 | $ | 2,059,108 | $ | 1,919,705 | $ | 1,899,841 | $ | 1,938,722 | |||||||||
Less: goodwill and other intangible assets | 77,288 | 77,603 | 71,417 | 71,608 | 69,977 | ||||||||||||||
Tangible assets | $ | 2,000,965 | $ | 1,981,505 | $ | 1,848,288 | $ | 1,828,233 | $ | 1,868,745 | |||||||||
Tangible Book Value per Share: | |||||||||||||||||||
Tangible equity | $ | 153,288 | $ | 143,950 | $ | 150,830 | $ | 147,539 | $ | 156,102 | |||||||||
Common shares outstanding | 10,657,569 | 10,605,782 | 10,596,797 | 10,583,161 | 10,568,147 | ||||||||||||||
Tangible book value per common share | $ | 14.38 | $ | 13.57 | $ | 14.23 | $ | 13.94 | $ | 14.77 | |||||||||
Tangible Equity to Tangible Assets Ratio: | |||||||||||||||||||
Tangible equity | $ | 153,288 | $ | 143,950 | $ | 150,830 | $ | 147,539 | $ | 156,102 | |||||||||
Tangible assets | $ | 2,000,965 | $ | 1,981,505 | $ | 1,848,288 | $ | 1,828,233 | $ | 1,868,745 | |||||||||
Tangible equity to tangible assets | 7.66 | % | 7.26 | % | 8.16 | % | 8.07 | % | 8.35 | % | |||||||||
Three Months Ended | |||||||||||
March 31, | December 31, | March 31, | |||||||||
(in $000’s) | 2014 | 2013 | 2013 | ||||||||
Pre-Provision Net Revenue: | |||||||||||
Income before income taxes | $ | 6,931 | $ | 7,415 | $ | 7,340 | |||||
Add: provision for loan losses | 8 | — | — | ||||||||
Add: net loss on loans held-for-sale and OREO | — | — | 5 | ||||||||
Add: net loss on securities transactions | 30 | — | — | ||||||||
Add: net loss on other assets | 7 | 125 | — | ||||||||
Less: recovery of loan losses | — | 964 | 1,065 | ||||||||
Less: net gain on loans held-for-sale and OREO | 18 | — | — | ||||||||
Less: net gain on securities transactions | — | 46 | 418 | ||||||||
Pre-provision net revenue | $ | 6,958 | $ | 6,530 | $ | 5,862 | |||||
Pre-provision net revenue | $ | 6,958 | $ | 6,530 | $ | 5,862 | |||||
Total average assets | 2,050,602 | 2,011,852 | 1,914,719 | ||||||||
Pre-provision net revenue to total average assets (annualized) | 1.38 | % | 1.29 | % | 1.24 | % | |||||
END OF RELEASE
11