MARIETTA, Ohio, Oct. 25, 2016 /PRNewswire/ -- Peoples
Bancorp Inc. ("Peoples") (NASDAQ: PEBO) today announced results for
the quarter and nine months ended September 30, 2016.
Net income totaled $7.8 million for
the third quarter of 2016, representing earnings per diluted common
share of $0.43. Earnings per
diluted common share were negatively impacted by $0.02 due to the system upgrade costs of
$423,000 incurred during the third
quarter of 2016. In comparison, reported earnings per diluted
common share were $0.44 for the
second quarter of 2016 and $0.22 for
the third quarter of 2015. Net income was $23.7 million and earnings per diluted common
share were $1.31 for the nine months
ended September 30, 2016, compared to
$8.4 million and $0.47 per diluted common share in 2015.
"We are pleased with the third quarter of 2016 results, with two
big achievements being the 8% annualized loan growth reported for
the quarter and the positive operating leverage generated," said
Chuck Sulerzyski, President and
Chief Executive Officer. "While we have seen steady growth in
our indirect lending business all year, which has increased 38%
since December 31, 2015, our
commercial business was slow to show growth in the first half of
the year but reported 8% annualized growth during the third
quarter. Growth in our fee based income provided us with
total revenue growth of 3% during the third quarter, while expenses
only increased 1%, which included $423,000 of non-core charges associated with our
system upgrade that is scheduled for November 7, 2016."
Statement of Operations Highlights:
- Net interest income was relatively flat compared to the
linked quarter and increased 2% compared to the third quarter of
2015.
- Net interest margin was 3.54% for the third quarter of 2016,
compared to 3.57% for the linked quarter and 3.55% for the third
quarter of 2015.
- Provision for loan losses was $1.1
million for the third quarter of 2016 and was driven
primarily by loan growth.
- Total non-interest income grew 9% compared to the linked
quarter and 14% compared to the third quarter of 2015, with growth
in almost all categories.
- Total non-interest expense was $26.8 million, up slightly compared to the linked
quarter.
- The efficiency ratio was 64.3% for the third quarter of 2016,
compared to 65.1% for the second quarter of 2016 and 65.8% in the
third quarter of 2015.
- The efficiency ratio, when adjusted for non-core charges, was
63.3% for the third quarter of 2016, compared to 64.9% for the
second quarter of 2016 and 65.3% in the third quarter of 2015.
- Operating leverage was positive for the third quarter,
compared to both the linked quarter and the third quarter of 2015,
and for the first nine months of 2016 compared to
2015.
Balance Sheet Highlights:
- Period-end total loan balances grew 8% on an annualized
basis compared to June 30, 2016 and
6% on an annualized basis compared to December 31, 2015 and September 30, 2015.
- Indirect loans grew $23.2
million, or 45% annualized, compared to the linked quarter,
while total consumer loans grew $16.7
million, or 7% annualized. For the first nine months of
2016, indirect loans grew $63.2
million, or 50% annualized.
- Commercial and industrial loans increased $21.7 million, or 23% annualized, from the linked
quarter as total commercial loans increased $23.7 million, or 8% annualized.
- Asset quality was relatively stable during the
quarter.
- Net charge-offs as a percent of average gross loans were 0.14%
annualized for the quarter, compared to 0.03% in the linked quarter
and 0.15% in the third quarter of 2015. Year-to-date, net
charge-offs were 0.09% of average loans on an annualized basis in
2016 compared to 0.10% in 2015.
- Criticized loans, which are those categorized as watch,
substandard or doubtful, decreased $7.9
million, or 7%, during the quarter.
- Nonperforming assets increased slightly to 1.11% of total loans
and OREO at September 30, 2016
compared to 1.04% at June 30,
2016.
- Allowance for loan losses increased $1.4
million, or 9%, compared to December
31, 2015.
- Allowance for loan losses as a percent of originated loans, net
of deferred fees and costs, decreased slightly to 1.13% at
September 30, 2016, compared to 1.16%
at June 30, 2016.
- Period-end total deposit balances increased $42.5 million, or 2%, compared to the linked
quarter.
- Non-interest-bearing deposits increased $45.8 million, or 7%, compared to the linked
quarter and, as a percent of total deposits, increased to 29% at
September 30, 2016, compared to 28%
at June 30, 2016.
Note: The comparison of the income statement and average
balance sheet results between the first nine months of 2015 and the
first nine months of 2016 was affected by the NB&T Financial
Group, Inc. ("NB&T") acquisition, which closed March 6, 2015.
Net Interest Income:
Net interest income was
$26.1 million in the third quarter of
2016, a slight decline compared to the linked quarter and a 2%
increase over the third quarter of 2015. The net interest
margin for the third quarter of 2016 was 3.54%, compared to 3.57%
in the second quarter of 2016 and 3.55% in the third quarter of
2015. The decrease compared to the second quarter in net
interest income was due primarily to the reduced size of the
investment portfolio, for which the average balance declined
$27.8 million, or 3%.
For the first nine months of 2016, net interest income grew 9%
compared to 2015 and net interest margin improved to 3.55% from
3.49%. The NB&T acquisition and loan growth were the
drivers of the increase in interest income.
The accretion income, net of amortization expense, from the
acquisitions was $0.8 million for the
third quarter of 2016, compared to $0.9
million for the second quarter of 2016 and $1.4 million in the third quarter of 2015, which
added 10 basis points, 12 basis points and 18 basis points,
respectively, to the net interest margin. In addition,
accretion income, net of amortization expense, from the
acquisitions was $2.6 million in the
first nine months of 2016 compared to $3.6
million in the first nine months of 2015, and added 12 basis
points and 17 basis points, respectively, to net interest
margin.
Net interest margin, excluding net accretion income from
acquisitions, declined 1 basis point compared to the second quarter
of 2016 and improved 7 basis points from the third quarter of
2015. In the first nine months of 2016, net interest margin,
excluding net accretion income from acquisitions, increased 11
basis points compared to 2015. The changes in net interest
margin were the result of the sustained shift in the mix of the
balance sheet, for both assets and liabilities, coupled with the
restructuring of borrowings during the second quarter of 2016.
Provision for Loan Losses:
The provision for loan
losses was $1.1 million in the third
quarter of 2016, compared to $0.7
million in the second quarter of 2016 and $5.8 million in the third quarter of 2015.
For the first nine months of 2016, the provision for loan losses
totaled $2.8 million compared to
$6.9 million in 2015. Recent
loan growth was the main driver of the provision for loan losses
recorded during the quarter and the first nine months of
2016. The provision for loan losses recorded in the third
quarter of 2015 was driven primarily by an increase to the specific
reserve for a large commercial loan relationship that was
charged-off in the fourth quarter of 2015.
Non-interest Income:
Total non-interest income
increased $1.2 million, or 9%,
compared to the linked quarter, and grew $1.6 million, or 14%, compared to the third
quarter of 2015. The increases compared to the second quarter
of 2016 and the third quarter of 2015 were due primarily to
increases in commercial loan swap fee income, bank-owned life
insurance income and electronic banking income. Also
contributing to the growth compared to the second quarter of 2016
was an increase in deposit account service charges. The
increase compared to the third quarter of 2015 was also impacted by
growth in mortgage banking income. For the first nine months
of 2016, total non-interest income increased $3.6 million, or 10%, compared to the first nine
months of 2015. The increase compared to the first nine
months of 2015 was due to increases in electronic banking income,
trust and investment income, commercial loan swap fee income and
bank-owned life insurance income, with a portion of the growth
attributable to the NB&T acquisition.
The commercial loan swap fee income, which is included in other
non-interest income, was $569,000 for
the third quarter of 2016, compared to $263,000 for the second quarter of 2016 and
$135,000 for the third quarter of
2015. For the first nine months of 2016, commercial loan swap
fee income was $997,000 compared to
$284,000 for the first nine months of
2015. The increase in bank-owned life insurance income of
$238,000 was the result of the
additional $35 million of bank-owned
life insurance policies that were purchased in the second quarter
of 2016.
Non-interest Expense:
Total non-interest expense, on
an as reported basis, for the third quarter of 2016 was
$26.8 million, compared to
$26.5 million for the second quarter
of 2016 and $26.1 million for the
third quarter of 2015. Total non-interest expense, adjusted
for non-core charges, was $26.4
million for the third quarter of 2016 and the second quarter
of 2016, and $25.9 million for the
third quarter of 2015. Beginning in the second quarter of
2016, non-core charges included one-time costs associated with the
system upgrade of Peoples' core banking system. These costs
are expected to be approximately $1.4
million for the full year, with $423,000 recorded in the third quarter of 2016
and $90,000 recorded in the second
quarter of 2016.
During the third quarter of 2016, salaries and employee benefits
increased compared to both the second quarter of 2016 and third
quarter of 2015. The increase in salaries and employee
benefits compared to the second quarter of 2016 was due primarily
to increased medical costs as a result of higher claims, and higher
sales-based and incentive compensation as a result of
performance. The increase in salaries and employee benefits
compared to the third quarter of 2015 was due primarily to
increased sales-based and incentive compensation as a result of the
corporate incentive plan.
For the nine months ended September 30,
2016, reported total non-interest expense was $79.6 million, a decrease of 9% from $87.8 million for the first nine months of
2015. Total non-interest expense, adjusted for non-core
charges, was $79.1 million in the
first nine months of 2016, compared to $77.3
million in 2015, with the increase primarily due to the
addition of operating expenses from the NB&T acquisition, and
an increase in salaries and employee benefits associated with
increased sales-based and incentive compensation as a result of the
corporate incentive plan. Peoples' number of full time
equivalent employees declined to 799 at September 30, 2016, compared to 803 at
June 30, 2016 and 821 at September 30, 2015.
The efficiency ratio for the third quarter of 2016 was 64.3%,
compared to 65.1% for the linked quarter and 65.8% for the third
quarter of 2015. For the first nine months of 2016, the
efficiency ratio was 64.6% compared to 78.2% in the first nine
months of 2015. The efficiency ratio, when adjusted for
non-core charges, was 63.3% for the third quarter of 2016, 64.9%
for the linked quarter and 65.3% for the third quarter of
2015. The lower adjusted efficiency ratio in the third
quarter of 2016 compared to the linked quarter and the third
quarter of 2015 was primarily due to revenue growth and the
continued focus on expense management. Revenue grew 3% and
core expenses grew 1% in the third quarter of 2016 compared to the
linked quarter and 6% and 3%, respectively, compared to the third
quarter of 2015. For the first nine months of 2016, the
adjusted efficiency ratio was 64.1% compared to 68.5% for the first
nine months of 2015, as revenue grew 9% and core expenses increased
2%.
Loans:
For the third quarter of 2016, period-end total
loan balances increased $40.4
million, or 8% annualized, compared to June 30, 2016. Indirect lending continued
to be a key component of loan growth, as balances increased
$23.2 million, or 45% annualized,
during the quarter. The growth in indirect lending was the
result of diversification in the portfolio beyond just automobile
loans, as well as the expanded footprint over recent years in
southeast and northeast Ohio. Commercial loans grew
$23.7 million, or 8% annualized, with
increases of $21.7 million in
commercial and industrial loans and $2.0
million in commercial real estate loans during the
quarter.
Compared to December 31, 2015,
period-end loan balances increased $96.8
million, or 6% annualized. The growth was primarily
the result of indirect lending contributing loan growth of
$63.2 million, or 50%
annualized. Commercial and industrial loan balances grew
$48.3 million, or 18% annualized.
Period-end total loan balances at September 30, 2016 increased $119.0 million, or 6%, compared to September 30, 2015. Consumer loans
increased $58.1 million, or 6%
compared to September 30, 2015, and
were driven by higher indirect lending activity. Commercial
loans grew primarily from an increase in commercial and industrial
loans of $42.6 million, or 12%,
compared to September 30, 2015.
Quarterly average gross loan balances increased $12.0 million, or 2% annualized, compared to the
linked quarter, due primarily to indirect lending. The
increase in commercial loan balances previously noted was largely
recorded late in the quarter and did not have a significant impact
on the quarterly average balances. Compared to the third
quarter of 2015, average gross loans increased $106.7 million, or 5%, largely due to growth in
indirect lending and commercial and industrial loans. During
the first nine months of 2016, average gross loan balances grew
$200.1 million, or 10%, compared to
the first nine months of 2015, primarily due to the NB&T
acquisition, higher indirect lending and increased commercial and
industrial loan balances.
Indirect lending continued to account for a larger proportion of
the consumer loan portfolio, comprising 24% at September 30, 2016, compared to 22% at
June 30, 2016, 18% at December 31, 2015 and 17% at September 30, 2015. In addition, commercial
and industrial loan balances comprised 33% of the commercial
portfolio at September 30, 2016,
compared to 32% at June 30, 2016, 30%
at December 31, 2015 and 31% at
September 30, 2015. The recent
growth in indirect lending and commercial and industrial loan
balances has provided additional diversification to the loan
portfolio as they were 11% and 18% of the period-end total loan
balance at September 30, 2016,
respectively, compared to 8% and 17%, respectively, at December 31, 2015.
Asset Quality:
Asset quality metrics were relatively
stable during the third quarter of 2016. Annualized net
charge-offs were 0.14% of average gross loans during the third
quarter of 2016, compared to 0.03% in the second quarter of 2016
and 0.15% in the third quarter of 2015. During the first nine
months of 2016, annualized net charge-offs were 0.09% of average
gross loans compared to 0.10% in 2015.
Criticized loans, which are those categorized as watch,
substandard or doubtful, decreased $7.9
million compared to June 30,
2016, $22.9 million compared
to December 31, 2015 and $11.2 million compared to September 30, 2015. Classified loans, which
are those categorized as substandard or doubtful, were relatively
stable compared to June 30, 2016,
decreased $6.6 million compared to
December 31, 2015 and $11.1 million compared to September 30, 2015.
Nonperforming assets increased $2.1
million during the third quarter of 2016 compared to
June 30, 2016, due primarily to an
increase of $3.8 million in
nonaccrual loans, which was partially offset by a decrease of
$1.7 million in loans 90+ days past
due. The increase in nonaccrual loans was due primarily to
two commercial real estate loans. Compared to September 30, 2015, nonperforming assets
decreased $2.2 million, as nonaccrual
loans declined $1.8 million.
At September 30, 2016, the
allowance for loan losses increased to $18.2
million, compared to $17.8
million at June 30, 2016,
$16.8 million at December 31, 2015 and $23.3 million at September
30, 2015. The ratio of the allowance for loan losses
as a percent of originated loans (which does not include acquired
loan balances), net of deferred fees and costs, was 1.13% at
September 30, 2016, compared to 1.16%
at June 30, 2016, 1.19% at
December 31, 2015 and 1.72% at
September 30, 2015. The decline
in this ratio compared to June 30,
2016 and December 31, 2015 was
primarily due to the continued stabilization of our asset quality
metrics. The decrease compared to September 30, 3015 was due to the build up of
reserves on one commercial loan relationship that was fully
charged-off in the fourth quarter of 2015.
Deposits:
During the third quarter of 2016, period-end
deposits increased $42.5 million, or
2%, attributable to an increase of $45.8
million, or 7%, in non-interest-bearing deposits. The
increase in non-interest-bearing deposits was primarily due to
commercial non-interest-bearing deposit balances, which increased
$36.0 million, with individual
non-interest-bearing deposit balances increasing $12.0 million during the quarter.
Commercial non-interest-bearing deposit balances were impacted by
one large customer maintaining a higher than normal balance on
September 30, 2016.
Compared to December 31, 2015,
period-end deposit balances increased $39.5
million, or 2%, with $27.5
million of the growth in non-interest-bearing deposits and
$12.0 million of the growth in
interest-bearing deposits. The growth in non-interest-bearing
deposits was attributable to growth of $38.7
million in commercial non-interest-bearing deposit
balances. Interest-bearing deposits grew as a result of all
categories increasing except for certificates of deposits, which
declined $59.3 million.
Period-end deposits increased $44.6
million, or 2%, compared to September
30, 2015, with $34.2 million
of the growth in non-interest-bearing deposits and $10.4 million of the growth in interest-bearing
deposits. Individual and commercial non-interest-bearing
deposits each grew $17.4
million. The growth in interest-bearing deposits was
the result of growth in all categories except for certificates of
deposit, which decreased $71.7
million, and governmental deposits, which declined
$7.2 million.
Non-interest-bearing deposits comprised 29% of total deposits at
September 30, 2016, compared to 28%
at June 30, 2016, December 31, 2015 and September 30, 2015.
Average deposits for the third quarter of 2016 decreased
$24.2 million, or 1%, compared to the
linked quarter, with a decline of $16.6
million in non-interest-bearing deposits and $7.6 million in interest-bearing deposits.
Compared to the third quarter of 2015, average deposits increased
$12.1 million, with
non-interest-bearing deposits increasing $15.2 million and interest-bearing deposits
declining $3.1 million. For the
first nine months of 2016, average deposits increased $162.5 million, or 7%, compared to the first nine
months of 2015, mainly due to the NB&T acquisition.
Stockholders' Equity:
At September 30, 2016, the tier 1 risk-based capital
ratio was 13.34%, compared to 13.33% at June
30, 2016, 13.67% at December 31,
2015 and 13.77% at September
30, 2015. The total risk-based capital ratio was
14.24% at September 30, 2016,
compared to 14.23% at June 30, 2016,
14.54% at December 31, 2015 and
14.97% at September 30, 2015.
These capital ratios were relatively flat compared to the linked
quarter. During the second and third quarters of 2016, no
common shares were repurchased under the share repurchase program,
compared to 279,770 shares repurchased in the first quarter of
2016.
Peoples Bancorp Inc. is a diversified financial services holding
company with $3.4 billion in total
assets, 80 locations, including 73 full-service bank branches, and
80 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 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 third
quarter and year-to-date 2016 results of operations today at
11:00 a.m., Eastern Daylight Time,
with members of Peoples' executive management participating.
Analysts, media and individual investors are invited to participate
in the conference call by calling (866) 890-9285. 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" financial measures in its analysis
of Peoples' performance and the efficiency of its operations.
Management believes that these non-GAAP financial 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 financial measures that may be
presented by other companies. Below is a listing of the non-GAAP
financial measures used in this news release:
- Core non-interest expenses are non-GAAP since they exclude the
impact of costs associated with the system upgrade,
acquisition-related costs, pension settlement charges, severance
charges and legal settlement charges.
- Efficiency ratio is calculated as total non-interest expense
(less amortization of other intangible assets) as a percentage of
fully tax-equivalent net interest income plus total non-interest
income. This measure is non-GAAP since it excludes amortization of
other intangible assets and all gains and/or losses included in
earnings, and uses fully tax-equivalent net interest income.
- Tangible assets, tangible equity and tangible book value per
common share measures are non-GAAP since they exclude the impact of
goodwill and other 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 total non-interest income minus total non-interest expense.
This measure is non-GAAP since it excludes 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", "estimate", "may", "feel", "expect", "believe",
"plan", "will", "would", "should", "could" 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)
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Peoples' ability to
complete the system upgrade (include the related core operating
systems, data systems and products) without complications or
difficulties that may otherwise result in the loss of customers,
operational problems or one-time costs currently not anticipated to
arise in connection with such upgrade;
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(2)
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the success, impact,
and timing of the implementation of Peoples' business strategies,
including the successful integration of acquisitions and the
expansion of consumer lending activity;
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(3)
|
Peoples' ability to
integrate any future acquisitions which may be unsuccessful, or may
be more difficult, time-consuming or costly than
expected;
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(4)
|
Peoples may issue
equity securities in connection with future acquisitions, which
could cause ownership and economic dilution to Peoples' current
shareholders;
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(5)
|
local, regional,
national and international economic conditions and the impact these
conditions may have on Peoples, its customers and its
counterparties, and Peoples' assessment of the impact, which may be
different than anticipated;
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(6)
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competitive pressures
among financial institutions or from non-financial institutions
which may increase significantly, including product and pricing
pressures, third-party relationships and revenues, and Peoples'
ability to attract, develop and retain qualified
professionals;
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(7)
|
changes in the
interest rate environment due to economic conditions and/or the
fiscal policies of the United States ("U.S.") government and the
Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), which may adversely impact interest rates,
interest margins and interest rate sensitivity;
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(8)
|
changes in prepayment
speeds, loan originations, levels of nonperforming assets,
delinquent loans and charge-offs, which may be less favorable than
expected and adversely impact the amount of interest income
generated;
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(9)
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adverse changes in
the economic conditions and/or activities, including, but not
limited to, continued economic uncertainty in the U.S., the
European Union (including the uncertainty created by the June 23,
2016 referendum by British voters to exit the European Union),
Asia, and other areas, which could decrease sales volumes, add
volatility to the global stock markets, and increase loan
delinquencies and defaults;
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(10)
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legislative or
regulatory changes or actions, promulgated and to be promulgated
thereunder by governmental and regulatory agencies in the State of
Ohio, the Federal Deposit Insurance Corporation, the Office of the
Comptroller of the Currency, the Federal Reserve Board and the
Consumer Financial Protection Bureau, 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, including in
particular the rules and regulations promulgated and to be
promulgated under the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010;
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(11)
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deterioration in the
credit quality of Peoples' loan portfolio, which may adversely
impact the provision for loan losses;
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(12)
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changes in accounting
standards, policies, estimates or procedures which may adversely
affect Peoples' reported financial condition or results of
operations;
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(13)
|
Peoples' assumptions
and estimates used in applying critical accounting policies, which
may prove unreliable, inaccurate or not predictive of actual
results;
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(14)
|
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;
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(15)
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Peoples' ability to
receive dividends from its subsidiaries;
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(16)
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Peoples' ability to
maintain required capital levels and adequate sources of funding
and liquidity;
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(17)
|
the impact of minimum
capital thresholds established as a part of the implementation of
Basel III;
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(18)
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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;
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(19)
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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;
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(20)
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Peoples' ability to
secure confidential information through the use of computer systems
and telecommunications networks, including those of Peoples'
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;
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(21)
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the overall adequacy
of Peoples' risk management program;
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(22)
|
the impact on
Peoples' businesses, as well as on the risks described above, of
various domestic or international widespread natural or other
disasters, pandemics, cyberattacks, military or terrorist
activities or conflicts; and
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(23)
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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 (the "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, 2015.
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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
September 30, 2016 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
|
|
Nine Months
Ended
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
PER COMMON
SHARE:
|
|
|
|
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.43
|
|
|
$
|
0.44
|
|
|
$
|
0.23
|
|
|
$
|
1.31
|
|
|
$
|
0.48
|
|
Diluted
|
0.43
|
|
|
0.44
|
|
|
0.22
|
|
|
1.31
|
|
|
0.47
|
|
Cash dividends
declared per common share
|
0.16
|
|
|
0.16
|
|
|
0.15
|
|
|
0.47
|
|
|
0.45
|
|
Book value per common
share
|
24.22
|
|
|
24.07
|
|
|
23.08
|
|
|
24.22
|
|
|
23.08
|
|
Tangible book value
per common share (a)
|
16.14
|
|
|
15.93
|
|
|
14.86
|
|
|
16.14
|
|
|
14.86
|
|
Closing stock price
at end of period
|
$
|
24.59
|
|
|
$
|
21.79
|
|
|
$
|
20.79
|
|
|
$
|
24.59
|
|
|
$
|
20.79
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED
RATIOS:
|
|
|
|
|
|
|
|
|
|
Return on average
stockholders' equity (b)
|
7.07
|
%
|
|
7.45
|
%
|
|
3.89
|
%
|
|
7.36
|
%
|
|
2.78
|
%
|
Return on average
assets (b)
|
0.93
|
%
|
|
0.97
|
%
|
|
0.51
|
%
|
|
0.96
|
%
|
|
0.36
|
%
|
Efficiency ratio
(c)
|
64.33
|
%
|
|
65.08
|
%
|
|
65.81
|
%
|
|
64.56
|
%
|
|
78.18
|
%
|
Pre-provision net
revenue to total average assets (b)(d)
|
1.53
|
%
|
|
1.48
|
%
|
|
1.40
|
%
|
|
1.52
|
%
|
|
0.84
|
%
|
Net interest margin
(b)(e)
|
3.54
|
%
|
|
3.57
|
%
|
|
3.55
|
%
|
|
3.55
|
%
|
|
3.49
|
%
|
Dividend payout
ratio
|
37.37
|
%
|
|
36.47
|
%
|
|
66.74
|
%
|
|
36.06
|
%
|
|
93.19
|
%
|
(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)
|
Total non-interest
expense (less amortization of other intangible assets) as a
percentage of fully tax-equivalent net interest income plus total
non-interest income. This amount represents a non-GAAP
financial measure since it excludes amortization of other
intangible assets, and all gains and/or losses included in
earnings, and uses fully tax-equivalent net interest income.
Additional information regarding the calculation of this ratio is
included at the end of this news release.
|
(d)
|
This ratio represents
a non-GAAP financial measure since it excludes the provision for
loan losses and net gains or losses on investment securities, 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.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
(in
$000's)
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Total interest
income
|
$
|
28,730
|
|
|
$
|
28,921
|
|
|
$
|
28,178
|
|
|
$
|
86,094
|
|
|
$
|
79,903
|
|
Total interest
expense
|
2,607
|
|
|
2,613
|
|
|
2,642
|
|
|
7,896
|
|
|
8,155
|
|
Net interest
income
|
26,123
|
|
|
26,308
|
|
|
25,536
|
|
|
78,198
|
|
|
71,748
|
|
Provision for loan
losses
|
1,146
|
|
|
727
|
|
|
5,837
|
|
|
2,828
|
|
|
6,859
|
|
Net interest income
after provision for loan losses
|
24,977
|
|
|
25,581
|
|
|
19,699
|
|
|
75,370
|
|
|
64,889
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) gain on
investment securities
|
(1)
|
|
|
767
|
|
|
62
|
|
|
862
|
|
|
673
|
|
Loss on debt
extinguishment
|
—
|
|
|
(707)
|
|
|
—
|
|
|
(707)
|
|
|
(520)
|
|
Net loss on loans
held-for-sale and other real estate owned
|
—
|
|
|
—
|
|
|
(50)
|
|
|
(1)
|
|
|
(131)
|
|
Net loss on other
assets
|
(224)
|
|
|
(62)
|
|
|
(1)
|
|
|
(316)
|
|
|
(639)
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
income:
|
|
|
|
|
|
|
|
|
|
Insurance
income
|
3,137
|
|
|
3,299
|
|
|
3,275
|
|
|
10,934
|
|
|
10,870
|
|
Deposit account
service charges
|
2,833
|
|
|
2,563
|
|
|
2,922
|
|
|
7,999
|
|
|
8,065
|
|
Electronic banking
income
|
2,765
|
|
|
2,567
|
|
|
2,241
|
|
|
7,867
|
|
|
6,533
|
|
Trust and investment
income
|
2,692
|
|
|
2,776
|
|
|
2,497
|
|
|
7,850
|
|
|
7,088
|
|
Commercial loan swap
fee income
|
569
|
|
|
263
|
|
|
135
|
|
|
997
|
|
|
284
|
|
Bank owned life
insurance
|
491
|
|
|
253
|
|
|
174
|
|
|
911
|
|
|
428
|
|
Mortgage banking
income
|
427
|
|
|
265
|
|
|
212
|
|
|
852
|
|
|
927
|
|
Other non-interest
income
|
624
|
|
|
381
|
|
|
450
|
|
|
1,549
|
|
|
1,145
|
|
Total
non-interest income
|
13,538
|
|
|
12,367
|
|
|
11,906
|
|
|
38,959
|
|
|
35,340
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
expense:
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefit costs
|
14,584
|
|
|
13,972
|
|
|
13,572
|
|
|
42,881
|
|
|
45,493
|
|
Net occupancy and
equipment expense
|
2,768
|
|
|
2,581
|
|
|
2,840
|
|
|
8,155
|
|
|
8,273
|
|
Professional
fees
|
1,661
|
|
|
2,123
|
|
|
1,287
|
|
|
5,243
|
|
|
5,542
|
|
Electronic banking
expense
|
1,650
|
|
|
1,485
|
|
|
1,408
|
|
|
4,568
|
|
|
3,852
|
|
Amortization of other
intangible assets
|
1,008
|
|
|
1,007
|
|
|
1,127
|
|
|
3,023
|
|
|
2,944
|
|
Data processing and
software expense
|
741
|
|
|
1,013
|
|
|
910
|
|
|
2,503
|
|
|
2,670
|
|
FDIC insurance
expense
|
549
|
|
|
540
|
|
|
562
|
|
|
1,706
|
|
|
1,516
|
|
Franchise tax
expense
|
529
|
|
|
483
|
|
|
502
|
|
|
1,550
|
|
|
1,552
|
|
Communication
expense
|
518
|
|
|
584
|
|
|
628
|
|
|
1,730
|
|
|
1,722
|
|
Marketing
expense
|
380
|
|
|
414
|
|
|
459
|
|
|
1,192
|
|
|
2,175
|
|
Foreclosed real
estate and other loan expenses
|
189
|
|
|
100
|
|
|
159
|
|
|
540
|
|
|
1,031
|
|
Other non-interest
expense
|
2,265
|
|
|
2,203
|
|
|
2,658
|
|
|
6,538
|
|
|
11,034
|
|
Total
non-interest expense
|
26,842
|
|
|
26,505
|
|
|
26,112
|
|
|
79,629
|
|
|
87,804
|
|
Income before
income taxes
|
11,448
|
|
|
11,441
|
|
|
5,504
|
|
|
34,538
|
|
|
11,808
|
|
Income tax
expense
|
3,656
|
|
|
3,479
|
|
|
1,370
|
|
|
10,789
|
|
|
3,450
|
|
Net income
|
$
|
7,792
|
|
|
$
|
7,962
|
|
|
$
|
4,134
|
|
|
$
|
23,749
|
|
|
$
|
8,358
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE
DATA:
|
|
|
|
|
|
|
|
|
|
Earnings per common
share – Basic
|
$
|
0.43
|
|
|
$
|
0.44
|
|
|
$
|
0.23
|
|
|
$
|
1.31
|
|
|
$
|
0.48
|
|
Earnings per common
share – Diluted
|
$
|
0.43
|
|
|
$
|
0.44
|
|
|
$
|
0.22
|
|
|
$
|
1.31
|
|
|
$
|
0.47
|
|
Cash dividends
declared per common share
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
$
|
0.15
|
|
|
$
|
0.47
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding – Basic
|
17,993,443
|
|
|
17,980,797
|
|
|
18,127,131
|
|
|
18,015,249
|
|
|
17,357,034
|
|
Weighted-average
common shares outstanding – Diluted
|
18,110,710
|
|
|
18,113,812
|
|
|
18,271,979
|
|
|
18,123,660
|
|
|
17,487,642
|
|
Actual common shares
outstanding (end of period)
|
18,195,986
|
|
|
18,185,708
|
|
|
18,400,809
|
|
|
18,195,986
|
|
|
18,400,809
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
September
30,
|
|
December
31,
|
(in
$000's)
|
2016
|
|
2015
|
|
|
|
|
Assets
|
|
|
|
Cash and cash
equivalents:
|
|
|
|
Cash and due
from banks
|
$
|
54,745
|
|
|
$
|
53,663
|
|
Interest-bearing deposits in other banks
|
13,090
|
|
|
17,452
|
|
Total cash and cash equivalents
|
67,835
|
|
|
71,115
|
|
|
|
|
|
Available-for-sale
investment securities, at fair value (amortized cost of
|
|
|
|
$743,878 at
September 30, 2016 and $780,304 at December 31, 2015)
|
762,143
|
|
|
784,701
|
|
Held-to-maturity
investment securities, at amortized cost (fair value of
|
|
|
|
$45,145 at
September 30, 2016 and $45,853 at December 31, 2015)
|
43,662
|
|
|
45,728
|
|
Other investment
securities, at cost
|
38,443
|
|
|
38,401
|
|
Total investment securities
|
844,248
|
|
|
868,830
|
|
|
|
|
|
Loans, net of
deferred fees and costs
|
2,169,208
|
|
|
2,072,440
|
|
Allowance for loan
losses
|
(18,219)
|
|
|
(16,779)
|
|
Net loans
|
2,150,989
|
|
|
2,055,661
|
|
|
|
|
|
Loans held for
sale
|
4,715
|
|
|
1,953
|
|
Bank premises and
equipment, net of accumulated depreciation
|
54,854
|
|
|
53,487
|
|
Goodwill
|
132,631
|
|
|
132,631
|
|
Other intangible
assets
|
14,374
|
|
|
16,986
|
|
Other
assets
|
93,939
|
|
|
58,307
|
|
Total assets
|
$
|
3,363,585
|
|
|
$
|
3,258,970
|
|
|
|
|
|
Liabilities
|
|
|
|
Deposits:
|
|
|
|
Non-interest-bearing
deposits
|
$
|
745,468
|
|
|
$
|
717,939
|
|
Interest-bearing
deposits
|
1,829,989
|
|
|
1,818,005
|
|
Total deposits
|
2,575,457
|
|
|
2,535,944
|
|
|
|
|
|
Short-term
borrowings
|
162,807
|
|
|
160,386
|
|
Long-term
borrowings
|
147,563
|
|
|
113,670
|
|
Accrued expenses and
other liabilities
|
37,121
|
|
|
29,181
|
|
Total liabilities
|
2,922,948
|
|
|
2,839,181
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
Preferred
stock, no par value, 50,000 shares authorized, no shares
issued
at
September 30, 2016 and December 31, 2015
|
—
|
|
|
—
|
|
Common stock, no par
value, 24,000,000 shares authorized, 18,936,214 shares
issued
at September 30, 2016 and 18,931,200 shares issued at
December
31, 2015, including shares in treasury
|
343,954
|
|
|
343,948
|
|
Retained
earnings
|
105,975
|
|
|
90,790
|
|
Accumulated other
comprehensive income (loss), net of deferred income
taxes
|
8,547
|
|
|
(359)
|
|
Treasury stock, at
cost, 794,857 shares at September 30, 2016 and
586,686
shares at December 31, 2015
|
(17,839)
|
|
|
(14,590)
|
|
Total stockholders' equity
|
440,637
|
|
|
419,789
|
|
Total liabilities and stockholders' equity
|
$
|
3,363,585
|
|
|
$
|
3,258,970
|
|
|
|
|
|
SELECTED FINANCIAL
INFORMATION
|
|
|
September
30,
|
June
30,
|
March
31,
|
December
31,
|
September
30,
|
(in $000's, end of
period)
|
2016
|
2016
|
2016
|
2015
|
2015
|
Loan
Portfolio
|
|
|
|
|
|
Commercial real
estate, construction
|
$
|
81,080
|
|
$
|
98,993
|
|
$
|
81,381
|
|
$
|
75,899
|
|
$
|
81,076
|
|
Commercial real
estate, other
|
728,878
|
|
708,910
|
|
728,199
|
|
736,276
|
|
710,630
|
|
Commercial and
industrial
|
400,042
|
|
378,352
|
|
367,810
|
|
351,719
|
|
357,456
|
|
Residential real
estate
|
545,161
|
|
555,123
|
|
565,749
|
|
565,555
|
|
571,132
|
|
Home equity lines of
credit
|
111,196
|
|
109,017
|
|
107,701
|
|
106,429
|
|
105,767
|
|
Consumer,
indirect
|
230,286
|
|
207,116
|
|
183,797
|
|
167,096
|
|
153,993
|
|
Consumer,
other
|
71,491
|
|
70,065
|
|
68,395
|
|
68,018
|
|
68,874
|
|
Deposit account
overdrafts
|
1,074
|
|
1,214
|
|
2,083
|
|
1,448
|
|
1,317
|
|
Total loans
|
$
|
2,169,208
|
|
$
|
2,128,790
|
|
$
|
2,105,115
|
|
$
|
2,072,440
|
|
$
|
2,050,245
|
|
Total acquired loans
(a)
|
$
|
551,021
|
|
$
|
591,967
|
|
$
|
627,819
|
|
$
|
657,801
|
|
$
|
694,436
|
|
Total originated loans
|
$
|
1,618,187
|
|
$
|
1,536,823
|
|
$
|
1,477,296
|
|
$
|
1,414,639
|
|
$
|
1,355,809
|
|
Deposit
Balances
|
|
|
|
|
|
Non-interest-bearing
deposits
|
$
|
745,468
|
|
$
|
699,695
|
|
$
|
716,202
|
|
$
|
717,939
|
|
$
|
711,226
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
Interest-bearing demand accounts
|
270,490
|
|
252,119
|
|
254,241
|
|
250,023
|
|
232,354
|
|
Retail
certificates of deposit
|
406,866
|
|
418,748
|
|
439,460
|
|
448,992
|
|
461,398
|
|
Money market
deposit accounts
|
411,111
|
|
401,828
|
|
395,022
|
|
394,119
|
|
393,472
|
|
Governmental
deposit accounts
|
286,716
|
|
300,639
|
|
313,904
|
|
276,639
|
|
293,889
|
|
Savings
accounts
|
438,087
|
|
438,952
|
|
434,381
|
|
414,375
|
|
404,676
|
|
Brokered certificates
of deposit
|
16,719
|
|
20,990
|
|
33,873
|
|
33,857
|
|
33,841
|
|
Total interest-bearing deposits
|
1,829,989
|
|
1,833,276
|
|
1,870,881
|
|
1,818,005
|
|
1,819,630
|
|
Total deposits
|
$
|
2,575,457
|
|
$
|
2,532,971
|
|
$
|
2,587,083
|
|
$
|
2,535,944
|
|
$
|
2,530,856
|
|
Asset
Quality
|
|
|
|
|
|
Nonperforming assets
(NPAs):
|
|
|
|
|
|
Loans 90+ days
past due and accruing
|
$
|
4,161
|
|
$
|
5,869
|
|
$
|
6,746
|
|
$
|
5,969
|
|
$
|
3,760
|
|
Nonaccrual
loans
|
19,346
|
|
15,582
|
|
13,579
|
|
13,531
|
|
21,144
|
|
Total nonperforming loans (NPLs)
|
23,507
|
|
21,451
|
|
20,325
|
|
19,500
|
|
24,904
|
|
Other real
estate owned (OREO)
|
719
|
|
679
|
|
679
|
|
733
|
|
1,566
|
|
Total NPAs
|
$
|
24,226
|
|
$
|
22,130
|
|
$
|
21,004
|
|
$
|
20,233
|
|
$
|
26,470
|
|
Allowance for loan
losses as a percent of NPLs (b)(c)
|
77.50
|
%
|
83.16
|
%
|
84.92
|
%
|
86.05
|
%
|
93.68
|
%
|
NPLs as a percent of
total loans (b)(c)
|
1.08
|
%
|
1.01
|
%
|
0.97
|
%
|
0.94
|
%
|
1.21
|
%
|
NPAs as a percent of
total assets (b)(c)
|
0.72
|
%
|
0.66
|
%
|
0.64
|
%
|
0.62
|
%
|
0.82
|
%
|
NPAs as a percent of
total loans and OREO (b)(c)
|
1.11
|
%
|
1.04
|
%
|
1.00
|
%
|
0.98
|
%
|
1.29
|
%
|
Allowance for loan
losses as a percent of originated
loans,
net of deferred fees and costs (b)
|
1.13
|
%
|
1.16
|
%
|
1.17
|
%
|
1.19
|
%
|
1.72
|
%
|
Capital
Information (d)
|
|
|
|
|
|
Common Equity Tier 1
risk-based capital ratio
|
13.04
|
%
|
13.03
|
%
|
13.10
|
%
|
13.36
|
%
|
13.45
|
%
|
Tier 1 risk-based
capital ratio
|
13.34
|
%
|
13.33
|
%
|
13.41
|
%
|
13.67
|
%
|
13.77
|
%
|
Total risk-based
capital ratio (Tier 1 and Tier 2)
|
14.24
|
%
|
14.23
|
%
|
14.29
|
%
|
14.54
|
%
|
14.97
|
%
|
Leverage
ratio
|
9.71
|
%
|
9.56
|
%
|
9.45
|
%
|
9.52
|
%
|
9.57
|
%
|
Common Equity Tier 1
capital
|
$
|
301,222
|
|
$
|
295,148
|
|
$
|
288,787
|
|
$
|
288,416
|
|
$
|
287,020
|
|
Tier 1
capital
|
308,099
|
|
301,977
|
|
295,569
|
|
295,151
|
|
293,705
|
|
Total capital (Tier 1
and Tier 2)
|
328,948
|
|
322,413
|
|
314,896
|
|
313,974
|
|
319,277
|
|
Total risk-weighted
assets
|
$
|
2,309,951
|
|
$
|
2,265,022
|
|
$
|
2,203,776
|
|
$
|
2,158,713
|
|
$
|
2,133,399
|
|
Tangible equity to
tangible assets (e)
|
9.13
|
%
|
9.10
|
%
|
8.88
|
%
|
8.69
|
%
|
8.88
|
%
|
(a)
|
Includes all loans
acquired in 2012 and thereafter.
|
(b)
|
Data presented as of
the end of the period indicated.
|
(c)
|
Nonperforming loans
include loans 90+ days past due and accruing, renegotiated loans
and nonaccrual loans. Nonperforming assets include nonperforming
loans and other real estate owned.
|
(d)
|
September 30,
2016 data based on preliminary analysis and subject to
revision.
|
(e)
|
This ratio represents
a non-GAAP financial measure since it excludes the balance sheet
impact of intangible assets acquired through acquisitions on both
total stockholders' equity and total assets. Additional
information regarding the calculation of this ratio is included at
the end of this news release.
|
PROVISION FOR LOAN
LOSSES INFORMATION
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
(in
$000's)
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Provision for Loan
Losses
|
|
|
|
|
|
|
|
|
|
Provision for loan
losses
|
$
|
978
|
|
|
$
|
575
|
|
|
$
|
5,635
|
|
|
$
|
2,410
|
|
|
$
|
6,385
|
|
Provision for
checking account overdrafts
|
168
|
|
|
152
|
|
|
202
|
|
|
418
|
|
|
474
|
|
Total
provision for loan losses
|
$
|
1,146
|
|
|
$
|
727
|
|
|
$
|
5,837
|
|
|
$
|
2,828
|
|
|
$
|
6,859
|
|
|
|
|
|
|
|
|
|
|
|
Net
Charge-Offs
|
|
|
|
|
|
|
|
|
|
Gross
charge-offs
|
$
|
1,263
|
|
|
$
|
855
|
|
|
$
|
1,140
|
|
|
$
|
4,121
|
|
|
$
|
2,695
|
|
Recoveries
|
498
|
|
|
705
|
|
|
365
|
|
|
2,733
|
|
|
1,198
|
|
Net
charge-offs
|
$
|
765
|
|
|
$
|
150
|
|
|
$
|
775
|
|
|
$
|
1,388
|
|
|
$
|
1,497
|
|
|
|
|
|
|
|
|
|
|
|
Net Charge-Offs
(Recoveries) by Type
|
|
|
|
|
|
|
|
|
|
Commercial real
estate, other
|
$
|
10
|
|
|
$
|
(17)
|
|
|
$
|
129
|
|
|
$
|
(1,143)
|
|
|
$
|
91
|
|
Commercial and
industrial
|
—
|
|
|
(244)
|
|
|
83
|
|
|
767
|
|
|
332
|
|
Residential real
estate
|
23
|
|
|
194
|
|
|
208
|
|
|
354
|
|
|
331
|
|
Home equity lines of
credit
|
21
|
|
|
—
|
|
|
8
|
|
|
25
|
|
|
9
|
|
Consumer
|
542
|
|
|
84
|
|
|
145
|
|
|
989
|
|
|
302
|
|
Deposit account
overdrafts
|
169
|
|
|
133
|
|
|
202
|
|
|
396
|
|
|
432
|
|
Total net
charge-offs
|
$
|
765
|
|
|
$
|
150
|
|
|
$
|
775
|
|
|
$
|
1,388
|
|
|
$
|
1,497
|
|
|
|
|
|
|
|
|
|
|
|
As a percent of
average gross loans (annualized)
|
0.14
|
%
|
|
0.03
|
%
|
|
0.15
|
%
|
|
0.09
|
%
|
|
0.10
|
%
|
SUPPLEMENTAL
INFORMATION
|
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
(in $000's, end of
period)
|
2016
|
|
2016
|
|
2016
|
|
2015
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Trust assets under
management
|
$
|
1,292,044
|
|
|
$
|
1,280,004
|
|
|
$
|
1,254,824
|
|
|
$
|
1,275,253
|
|
|
$
|
1,261,112
|
|
Brokerage assets
under management
|
754,168
|
|
|
729,519
|
|
|
706,314
|
|
|
664,153
|
|
|
621,242
|
|
Mortgage loans
serviced for others
|
$
|
389,090
|
|
|
$
|
380,741
|
|
|
$
|
383,531
|
|
|
$
|
390,398
|
|
|
$
|
387,200
|
|
Employees (full-time
equivalent)
|
799
|
|
|
803
|
|
|
821
|
|
|
817
|
|
|
821
|
|
CONSOLIDATED
AVERAGE BALANCE SHEETS AND NET INTEREST INCOME
|
|
|
Three Months
Ended
|
|
September 30,
2016
|
|
June 30,
2016
|
|
September 30,
2015
|
(in
$000's)
|
Balance
|
Income/
Expense
|
Yield/
Cost
|
|
Balance
|
Income/
Expense
|
Yield/
Cost
|
|
Balance
|
Income/
Expense
|
Yield/
Cost
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
investments
|
$
|
8,663
|
|
$
|
10
|
|
0.46
|
%
|
|
$
|
9,073
|
|
$
|
11
|
|
0.49
|
%
|
|
$
|
34,093
|
|
$
|
21
|
|
0.24
|
%
|
Other long-term
investments
|
—
|
|
—
|
|
—
|
%
|
|
—
|
|
—
|
|
—
|
%
|
|
1,261
|
|
3
|
|
0.94
|
%
|
Investment securities
(a)(b)
|
849,266
|
|
5,686
|
|
2.68
|
%
|
|
877,046
|
|
5,984
|
|
2.73
|
%
|
|
856,063
|
|
5,761
|
|
2.69
|
%
|
Gross loans
(b)(c)
|
2,133,993
|
|
23,531
|
|
4.35
|
%
|
|
2,122,000
|
|
23,428
|
|
4.39
|
%
|
|
2,027,322
|
|
22,918
|
|
4.46
|
%
|
Allowance for loan
losses
|
(17,787)
|
|
|
|
|
(17,362)
|
|
|
|
|
(17,982)
|
|
|
|
Total earning
assets
|
2,974,135
|
|
29,227
|
|
3.89
|
%
|
|
2,990,757
|
|
29,423
|
|
3.92
|
%
|
|
2,900,757
|
|
28,703
|
|
3.92
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible
assets
|
147,466
|
|
|
|
|
148,464
|
|
|
|
|
151,206
|
|
|
|
Other
assets
|
203,035
|
|
|
|
|
167,435
|
|
|
|
|
157,730
|
|
|
|
Total
assets
|
$
|
3,324,636
|
|
|
|
|
$
|
3,306,656
|
|
|
|
|
$
|
3,209,693
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
|
|
|
|
|
Savings
accounts
|
$
|
439,464
|
|
$
|
59
|
|
0.05
|
%
|
|
$
|
438,368
|
|
$
|
58
|
|
0.05
|
%
|
|
$
|
410,131
|
|
$
|
56
|
|
0.05
|
%
|
Government deposit
accounts
|
311,650
|
|
152
|
|
0.19
|
%
|
|
302,852
|
|
146
|
|
0.19
|
%
|
|
301,178
|
|
161
|
|
0.21
|
%
|
Interest-bearing
demand accounts
|
264,182
|
|
61
|
|
0.09
|
%
|
|
251,773
|
|
46
|
|
0.07
|
%
|
|
235,145
|
|
47
|
|
0.08
|
%
|
Money market deposit
accounts
|
400,749
|
|
175
|
|
0.17
|
%
|
|
400,286
|
|
165
|
|
0.17
|
%
|
|
395,547
|
|
158
|
|
0.16
|
%
|
Brokered certificates
of deposits
|
17,832
|
|
163
|
|
3.64
|
%
|
|
29,542
|
|
273
|
|
3.73
|
%
|
|
34,883
|
|
328
|
|
3.73
|
%
|
Retail certificates
of deposit
|
412,466
|
|
817
|
|
0.79
|
%
|
|
431,075
|
|
815
|
|
0.76
|
%
|
|
472,516
|
|
789
|
|
0.66
|
%
|
Total
interest-bearing deposits
|
1,846,343
|
|
1,427
|
|
0.31
|
%
|
|
1,853,896
|
|
1,503
|
|
0.33
|
%
|
|
1,849,400
|
|
1,539
|
|
0.33
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
143,814
|
|
109
|
|
0.30
|
%
|
|
142,888
|
|
105
|
|
0.29
|
%
|
|
98,996
|
|
42
|
|
0.17
|
%
|
Long-term
borrowings
|
147,732
|
|
1,071
|
|
2.89
|
%
|
|
118,427
|
|
1,005
|
|
3.40
|
%
|
|
119,477
|
|
1,061
|
|
3.54
|
%
|
Total borrowed
funds
|
291,546
|
|
1,180
|
|
1.61
|
%
|
|
261,315
|
|
1,110
|
|
1.70
|
%
|
|
218,473
|
|
1,103
|
|
2.01
|
%
|
Total
interest-bearing liabilities
|
2,137,889
|
|
2,607
|
|
0.49
|
%
|
|
2,115,211
|
|
2,613
|
|
0.50
|
%
|
|
2,067,873
|
|
2,642
|
|
0.51
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing
deposits
|
709,432
|
|
|
|
|
726,066
|
|
|
|
|
694,277
|
|
|
|
Other
liabilities
|
38,709
|
|
|
|
|
35,307
|
|
|
|
|
26,433
|
|
|
|
Total
liabilities
|
2,886,030
|
|
|
|
|
2,876,584
|
|
|
|
|
2,788,583
|
|
|
|
Stockholders'
equity
|
438,606
|
|
|
|
|
430,072
|
|
|
|
|
421,110
|
|
|
|
Total liabilities and
equity
|
$
|
3,324,636
|
|
|
|
|
$
|
3,306,656
|
|
|
|
|
$
|
3,209,693
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income/spread (b)
|
|
$
|
26,620
|
|
3.40
|
%
|
|
|
$
|
26,810
|
|
3.42
|
%
|
|
|
$
|
26,061
|
|
3.41
|
%
|
Net interest margin
(b)
|
|
|
3.54
|
%
|
|
|
|
3.57
|
%
|
|
|
|
3.55
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Average balances
are based on carrying value.
|
(b) Interest income
and yields are presented on a fully tax-equivalent basis using a
35% federal statutory tax rate.
|
(c) Average balances
include nonaccrual, impaired loans and loans held for sale.
Interest income includes interest earned on nonaccrual loans prior
to the loans being placed on nonaccrual status and related interest
income on loans originated for sale prior to the loan being
sold. Loan fees included in interest income were immaterial
for all periods presented.
|
|
For the Nine
Months Ended
|
|
September 30,
2016
|
|
September 30,
2015
|
(in
$000's)
|
Balance
|
Income/
Expense
|
Yield/
Cost
|
|
Balance
|
Income/
Expense
|
Yield/
Cost
|
Assets
|
|
|
|
|
|
|
|
Short-term
investments
|
$
|
10,052
|
|
$
|
37
|
|
0.49
|
%
|
|
$
|
63,670
|
|
$
|
115
|
|
0.24
|
%
|
Other long-term
investments
|
—
|
|
—
|
|
—
|
%
|
|
1,317
|
|
10
|
|
1.02
|
%
|
Investment securities
(a)(b)
|
867,253
|
|
17,598
|
|
2.71
|
%
|
|
817,860
|
|
16,926
|
|
2.76
|
%
|
Gross loans
(b)(c)
|
2,115,975
|
|
69,967
|
|
4.41
|
%
|
|
1,915,836
|
|
64,314
|
|
4.45
|
%
|
Allowance for loan
losses
|
(17,333)
|
|
|
|
|
(17,930)
|
|
|
|
Total earning
assets
|
2,975,947
|
|
87,602
|
|
3.90
|
%
|
|
2,780,753
|
|
81,365
|
|
3.88
|
%
|
|
|
|
|
|
|
|
|
Intangible
assets
|
148,482
|
|
|
|
|
141,754
|
|
|
|
Other
assets
|
175,909
|
|
|
|
|
145,957
|
|
|
|
Total
assets
|
$
|
3,300,338
|
|
|
|
|
$
|
3,068,464
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
|
Savings
accounts
|
$
|
433,233
|
|
$
|
173
|
|
0.05
|
%
|
|
$
|
381,717
|
|
$
|
154
|
|
0.05
|
%
|
Government deposit
accounts
|
304,422
|
|
444
|
|
0.19
|
%
|
|
273,768
|
|
450
|
|
0.22
|
%
|
Interest-bearing
demand accounts
|
255,796
|
|
151
|
|
0.08
|
%
|
|
217,220
|
|
134
|
|
0.08
|
%
|
Money market deposit
accounts
|
399,853
|
|
500
|
|
0.17
|
%
|
|
381,238
|
|
456
|
|
0.16
|
%
|
Brokered certificates
of deposits
|
27,049
|
|
751
|
|
3.71
|
%
|
|
37,130
|
|
1,034
|
|
3.72
|
%
|
Retail certificates
of deposit
|
432,515
|
|
2,512
|
|
0.78
|
%
|
|
469,010
|
|
2,488
|
|
0.71
|
%
|
Total
interest-bearing deposits
|
1,852,868
|
|
4,531
|
|
0.33
|
%
|
|
1,760,083
|
|
4,716
|
|
0.36
|
%
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
140,808
|
|
301
|
|
0.29
|
%
|
|
86,740
|
|
108
|
|
0.17
|
%
|
Long-term
borrowings
|
126,587
|
|
3,064
|
|
3.23
|
%
|
|
142,359
|
|
3,331
|
|
3.13
|
%
|
Total borrowed
funds
|
267,395
|
|
3,365
|
|
1.68
|
%
|
|
229,099
|
|
3,439
|
|
2.00
|
%
|
Total
interest-bearing liabilities
|
2,120,263
|
|
7,896
|
|
0.50
|
%
|
|
1,989,182
|
|
8,155
|
|
0.55
|
%
|
|
|
|
|
|
|
|
|
Non-interest-bearing
deposits
|
715,244
|
|
|
|
|
645,553
|
|
|
|
Other
liabilities
|
34,062
|
|
|
|
|
31,625
|
|
|
|
Total
liabilities
|
2,869,569
|
|
|
|
|
2,666,360
|
|
|
|
Stockholders'
equity
|
430,769
|
|
|
|
|
402,104
|
|
|
|
Total liabilities and
equity
|
$
|
3,300,338
|
|
|
|
|
$
|
3,068,464
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income/spread (b)
|
|
$
|
79,706
|
|
3.40
|
%
|
|
|
$
|
73,210
|
|
3.33
|
%
|
Net interest margin
(b)
|
|
|
3.55
|
%
|
|
|
|
3.49
|
%
|
|
|
|
|
|
|
|
|
(a) Average balances
are based on carrying value.
|
(b) Interest income
and yields are presented on a fully tax-equivalent basis using a
35% federal statutory tax rate.
|
(c) Average balances
include nonaccrual, impaired loans and loans held for sale.
Interest income includes interest earned on nonaccrual loans prior
to the loans being placed on nonaccrual status and related interest
income on loans originated for sale prior to the loan being
sold. Loan fees included in interest income were immaterial
for all periods presented.
|
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:
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
(in
$000's)
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Core non-interest
expenses:
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
$
|
26,842
|
|
|
$
|
26,505
|
|
|
$
|
26,112
|
|
|
$
|
79,629
|
|
|
$
|
87,804
|
|
Less: System upgrade
costs
|
423
|
|
|
90
|
|
|
—
|
|
|
513
|
|
|
—
|
|
Less:
Acquisition-related costs
|
—
|
|
|
—
|
|
|
108
|
|
|
—
|
|
|
9,884
|
|
Less: Pension
settlement charges
|
—
|
|
|
—
|
|
|
82
|
|
|
—
|
|
|
454
|
|
Less: Other non-core
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
185
|
|
Core non-interest
expenses
|
$
|
26,419
|
|
|
$
|
26,415
|
|
|
$
|
25,922
|
|
|
$
|
79,116
|
|
|
$
|
77,281
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
(in
$000's)
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Efficiency
ratio:
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
26,842
|
|
|
26,505
|
|
|
26,112
|
|
|
79,629
|
|
|
87,804
|
|
Less: Amortization of
intangible assets
|
1,008
|
|
|
1,007
|
|
|
1,127
|
|
|
3,023
|
|
|
2,944
|
|
Adjusted non-interest
expense
|
25,834
|
|
|
25,498
|
|
|
24,985
|
|
|
76,606
|
|
|
84,860
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
income
|
13,538
|
|
|
12,367
|
|
|
11,906
|
|
|
38,959
|
|
|
35,340
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
26,123
|
|
|
26,308
|
|
|
25,536
|
|
|
78,198
|
|
|
71,748
|
|
Add: Fully
tax-equivalent adjustment
|
$
|
497
|
|
|
$
|
502
|
|
|
$
|
525
|
|
|
$
|
1,508
|
|
|
$
|
1,462
|
|
Net interest income
on a fully taxable-equivalent basis
|
$
|
26,620
|
|
|
$
|
26,810
|
|
|
$
|
26,061
|
|
|
$
|
79,706
|
|
|
$
|
73,210
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
revenue
|
$
|
40,158
|
|
|
$
|
39,177
|
|
|
$
|
37,967
|
|
|
$
|
118,665
|
|
|
$
|
108,550
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency
ratio
|
64.33
|
%
|
|
65.08
|
%
|
|
65.81
|
%
|
|
64.56
|
%
|
|
78.18
|
%
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio
adjusted for non-core charges:
|
|
|
|
|
|
|
|
|
Core non-interest
expenses
|
$
|
26,419
|
|
|
$
|
26,415
|
|
|
$
|
25,922
|
|
|
$
|
79,116
|
|
|
$
|
77,281
|
|
Less: Amortization of
intangible assets
|
$
|
1,008
|
|
|
$
|
1,007
|
|
|
$
|
1,127
|
|
|
$
|
3,023
|
|
|
$
|
2,944
|
|
Adjusted non-interest
expense
|
25,411
|
|
|
25,408
|
|
|
24,795
|
|
|
76,093
|
|
|
74,337
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
revenue
|
$
|
40,158
|
|
|
$
|
39,177
|
|
|
$
|
37,967
|
|
|
$
|
118,665
|
|
|
$
|
108,550
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio
adjusted for non-core charges
|
63.28
|
%
|
|
64.85
|
%
|
|
65.31
|
%
|
|
64.12
|
%
|
|
68.48
|
%
|
|
|
|
At or For the
Three Months Ended
|
|
September
30,
|
|
June
30,
|
|
March
31
|
|
December
31,
|
|
September
30,
|
(in
$000's)
|
2016
|
|
2016
|
|
2016
|
|
2015
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Tangible
Equity:
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity, as reported
|
$
|
440,637
|
|
|
$
|
437,753
|
|
|
$
|
428,486
|
|
|
$
|
419,789
|
|
|
$
|
424,760
|
|
Less: goodwill and
other intangible assets
|
147,005
|
|
|
147,971
|
|
|
148,997
|
|
|
149,617
|
|
|
151,339
|
|
Tangible
equity
|
$
|
293,632
|
|
|
$
|
289,782
|
|
|
$
|
279,489
|
|
|
$
|
270,172
|
|
|
$
|
273,421
|
|
|
|
|
|
|
|
|
|
|
|
Tangible
Assets:
|
|
|
|
|
|
|
|
|
|
Total assets, as
reported
|
$
|
3,363,585
|
|
|
$
|
3,333,455
|
|
|
$
|
3,294,929
|
|
|
$
|
3,258,970
|
|
|
$
|
3,228,830
|
|
Less: goodwill and
other intangible assets
|
147,005
|
|
|
147,971
|
|
|
148,997
|
|
|
149,617
|
|
|
151,339
|
|
Tangible
assets
|
$
|
3,216,580
|
|
|
$
|
3,185,484
|
|
|
$
|
3,145,932
|
|
|
$
|
3,109,353
|
|
|
$
|
3,077,491
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Book
Value per Common Share:
|
|
|
|
|
|
|
|
|
|
Tangible
equity
|
$
|
293,632
|
|
|
$
|
289,782
|
|
|
$
|
279,489
|
|
|
$
|
270,172
|
|
|
$
|
273,421
|
|
Common shares
outstanding
|
18,195,986
|
|
|
18,185,708
|
|
|
18,157,932
|
|
|
18,404,864
|
|
|
18,400,809
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value
per common share
|
$
|
16.14
|
|
|
$
|
15.93
|
|
|
$
|
15.39
|
|
|
$
|
14.68
|
|
|
$
|
14.86
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Equity to
Tangible Assets Ratio:
|
|
|
|
|
Tangible
equity
|
$
|
293,632
|
|
|
$
|
289,782
|
|
|
$
|
279,489
|
|
|
$
|
270,172
|
|
|
$
|
273,421
|
|
Tangible
assets
|
$
|
3,216,580
|
|
|
$
|
3,185,484
|
|
|
$
|
3,145,932
|
|
|
$
|
3,109,353
|
|
|
$
|
3,077,491
|
|
|
|
|
|
|
|
|
|
|
|
Tangible equity to
tangible assets
|
9.13
|
%
|
|
9.10
|
%
|
|
8.88
|
%
|
|
8.69
|
%
|
|
8.88
|
%
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
(in
$000's)
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Pre-Provision Net
Revenue:
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
$
|
11,448
|
|
|
$
|
11,441
|
|
|
$
|
5,504
|
|
|
$
|
34,538
|
|
|
$
|
11,808
|
|
Add: provision for
loan losses
|
1,146
|
|
|
727
|
|
|
5,837
|
|
|
2,828
|
|
|
6,859
|
|
Add: loss on debt
extinguishment
|
—
|
|
|
707
|
|
|
—
|
|
|
707
|
|
|
520
|
|
Add: net loss on
loans held-for-sale and OREO
|
—
|
|
|
—
|
|
|
50
|
|
|
1
|
|
|
131
|
|
Add: net loss on
securities transactions
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
Add: net loss on
other assets
|
224
|
|
|
97
|
|
|
1
|
|
|
351
|
|
|
639
|
|
Less: net gain on
securities transactions
|
—
|
|
|
767
|
|
|
62
|
|
|
863
|
|
|
673
|
|
Less: gain on other
assets
|
—
|
|
|
35
|
|
|
—
|
|
|
35
|
|
|
—
|
|
Pre-provision net
revenue
|
$
|
12,819
|
|
|
$
|
12,170
|
|
|
$
|
11,330
|
|
|
$
|
37,528
|
|
|
$
|
19,284
|
|
|
|
|
|
|
|
|
|
|
|
Pre-provision net
revenue
|
$
|
12,819
|
|
|
$
|
12,170
|
|
|
$
|
11,330
|
|
|
$
|
37,528
|
|
|
$
|
19,284
|
|
Total average
assets
|
$
|
3,324,636
|
|
|
$
|
3,306,656
|
|
|
$
|
3,209,693
|
|
|
$
|
3,300,338
|
|
|
$
|
3,068,464
|
|
|
|
|
|
|
|
|
|
|
|
Pre-provision net
revenue to total average assets (annualized)
|
1.53
|
%
|
|
1.48
|
%
|
|
1.40
|
%
|
|
1.52
|
%
|
|
0.84
|
%
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/peoples-bancorp-inc-reports-third-quarter-results-300350553.html
SOURCE Peoples Bancorp Inc.