MARIETTA, Ohio, July 24, 2018 /PRNewswire/ -- Peoples
Bancorp Inc. ("Peoples") (Nasdaq: PEBO) today announced results for
the quarter ended June 30, 2018. Net income totaled
$7.9 million for the second quarter
of 2018, representing earnings per diluted common share of
$0.41. During the second
quarter of 2018, earnings per diluted common share were negatively
impacted by $0.25 per share for
acquisition-related costs, and were positively impacted by
$0.04 per share due to the release of
a tax valuation allowance. In comparison, earnings per
diluted common share were $0.64 for
the first quarter of 2018 and $0.53
for the second quarter of 2017. For the six months ended
June 30, 2018, earnings per diluted
common share were $1.04, compared to
$1.02 for the six months ended
June 30, 2017.
On April 13, 2018, Peoples
completed the previously-announced merger with ASB Financial Corp.
("ASB"). ASB merged into Peoples, and ASB's wholly-owned
subsidiary, American Savings Bank, fsb, which operated six
full-service bank branches and two loan production offices in
southern Ohio and northern
Kentucky, merged into Peoples
Bank. As of April 13, 2018, ASB
had $275.5 million in total assets,
which included $239.6 million in
loans, and $198.6 million in total
deposits, after preliminary fair value adjustments.
Consideration of $41.5 million was
paid for the acquisition.
"During the second quarter of 2018, we completed our first bank
acquisition in over three years, and the first on our new core
banking system," said Chuck
Sulerzyski, President and Chief Executive Officer. "We
are excited about the new capabilities and product offerings
available to our new customers as a result of the
acquisition. The second quarter results were significantly
impacted by acquisition costs. Excluding the balances
contributed by the ASB acquisition, we achieved annualized loan
growth of 9% during the quarter, compared to the first quarter of
2018. We also made improvements in credit quality during the
quarter, reducing net charge-offs as a percent of average gross
loans to 0.11% on an annualized basis. We are pleased with
the progress made during the quarter and believe we are well
positioned to provide solid shareholder returns in the second half
of the year and beyond."
Statement of Income Highlights:
- Net interest income grew 12% compared to the first
quarter of 2018 and 17% compared to the second quarter of
2017.
-
- Net interest margin increased to 3.74% for the second quarter
of 2018, compared to 3.66% for the linked quarter and 3.62% for the
second quarter of 2017.
- The first and second quarters of 2018 benefited from proceeds
of $341,000 and $248,000, respectively, received on investment
securities that had previously been written down due to an
other-than-temporary impairment ("OTTI").
- Provision for loan losses was $1.2
million for the second quarter of 2018, a decrease of
$0.8 million from the linked quarter,
and an increase of $0.2 million from
the second quarter of 2017.
-
- Loan growth was the primary contributor to the increase
compared to the prior year quarter.
- Annualized net charge-offs as a percent of average gross loans
declined to 0.11% for the second quarter of 2018.
- Total fee-based income decreased 7% during the second
quarter of 2018 compared to the linked quarter, and increased 2%
compared to the second quarter of 2017.
-
- The decrease compared to the linked quarter was largely due to
annual performance-based insurance commissions of $1.3 million recorded in the first quarter of
2018.
- The largest contributor to the increase compared to the second
quarter of 2017 was an increase in mortgage banking income of
$500,000, which was largely due to
the mortgage origination operation acquired in the ASB
acquisition.
- Total non-interest expense was up 27% for the second
quarter of 2018 compared to the linked quarter, and up 35% compared
to the second quarter of 2017.
-
- Acquisition-related expenses totaled $6.1 million for the second quarter of 2018,
compared to $149,000 for the first
quarter of 2018, and none in the second quarter of 2017.
- The efficiency ratio was 68.5% for the first six months of
2018, compared to 63.0% for the first six months of 2017.
- Adjusted to exclude acquisition-related expenses, the
efficiency ratio was 61.7% for the first six months of 2018,
compared to 63.0% for the first six months of 2017.
Balance Sheet Highlights:
- As of June 30, 2018, loan
balances acquired from ASB totaled $228.8
million, and deposit balances acquired from ASB totaled
$168.4 million.
- Excluding the impact of the ASB acquisition, period-end
organic loan balances grew 9%, on an annualized basis, compared to
March 31, 2018.
-
- Commercial organic loans grew $35.9
million, or 10% annualized, during the second quarter of
2018 compared to March 31, 2018, and
$123.0 million, or 10%, compared to
June 30, 2017.
- Indirect consumer organic loans grew $23.4 million, or 27% annualized, during the
second quarter of 2018 compared to March 31,
2018, and $65.1 million, or
21%, compared to June 30, 2017.
- Asset quality improved during the quarter.
-
- Nonperforming assets as a percent of total loans and other real
estate owned ("OREO") decreased to 0.67% at June 30, 2018 compared to 0.72% at March 31, 2018, and 0.88% at June 30, 2017.
- Nonperforming assets at June 30,
2018 increased 4%, compared to March
31, 2018, primarily due to growth in past due acquired
loans, but decreased 10% compared to June
30, 2017.
- Excluding the impact of the ASB acquisition, period-end
total organic deposit balances at June 30,
2018 decreased $32.3 million,
or 1%, compared to March 31, 2018,
and increased $103.8 million, or 4%,
compared to June 30,
2017.
-
- Governmental deposits decreased $36.7
million, or 11%, during the second quarter of 2018, due
primarily to seasonality.
- The organic growth compared to June 30,
2017 included $28.7 million in
demand deposit accounts, $18.5
million in savings accounts, and $7.7
million in governmental deposit accounts.
Net Interest Income:
Net interest income was
$32.8 million for the second quarter
of 2018, a 12% increase compared to the linked quarter and a 17%
increase over the second quarter of 2017. Net interest margin
increased to 3.74% for the second quarter of 2018, compared to
3.66% for the first quarter of 2018 and 3.62% for the second
quarter of 2017. The increase in net interest income and net
interest margin compared to the first quarter of 2018 and the
second quarter of 2017 was primarily due to loan growth, including
that contributed by the acquisition of ASB. In addition, the
increase was due to higher loan yields, which have benefited from
rises in interest rates, including the escalation of LIBOR rates in
the first quarter of 2018, while deposit costs have remained
relatively low. The second quarter of 2018 also benefited
from proceeds of $248,000 received on
an investment security that had been previously written down due to
an OTTI, which added 3 basis points to net interest margin for the
quarter, while the first quarter of 2018 benefited from similar
proceeds of $341,000, which added 4
basis points to net interest margin for the quarter.
For the first six months of 2018, net interest income grew 13%
compared to 2017, and net interest margin grew 12 basis points to
3.70%. The increases were attributable to loan growth,
including balances contributed by the ASB acquisition, and the
proceeds received on investment securities that had been previously
written down due to OTTI, which added 3 basis points to net
interest margin. In addition, the increase was due to higher
loan yields, which have benefited from rises in interest rates,
including the escalation of LIBOR rates in the first quarter of
2018, while deposit costs have remained relatively low.
Income on investment securities has also benefited from rising
interest rates. During the first six months of 2017, proceeds
received on an investment security that had previously been written
down due to an OTTI were $203,000,
which added 1 basis point to net interest margin for the
period.
The accretion income from acquisitions, net of amortization
expense, was $523,000 for the second
quarter of 2018, compared to $566,000
for the first quarter of 2018, and $735,000 for the second quarter of 2017, which
added 6 basis points, 7 basis points, and 10 basis points,
respectively, to net interest margin. Accretion income, net
of amortization expense, from the ASB acquisition was $210,000 for the second quarter of 2018, and was
more than offset by amortization of the fair value adjustment to
time deposits of $218,000.
Provision for Loan Losses:
The provision for loan
losses was $1.2 million for the
second quarter of 2018, compared to $2.0
million for the first quarter of 2018 and $0.9 million for the second quarter of
2017. For the first six months of 2018, provision for loan
losses was $3.2 million, compared to
$1.6 million for the first six months
of 2017. Provision for loan losses was higher in the first
quarter and the first six months of 2018 due to one acquired
commercial loan relationship, which was charged off in the amount
of $827,000 in the first quarter of
2018. The increases compared to the prior year periods were
also associated with loan growth, partially offset by improvements
in certain asset quality metrics.
Gains and Losses:
Net losses for the second quarter
of 2018 were $552,000, compared to
net gains of $75,000 for the first
quarter of 2018, and net gains of $127,000 for the second quarter for 2017.
During the second quarter of 2018, losses included $268,000 related to fixed asset disposals,
largely attributable to write-offs of $192,000 on equipment acquired from ASB, and
$80,000 related to the sale of a
building. Second quarter 2018 losses also included
$147,000 in losses on the sale of
investment securities and $147,000 in
market value write-downs for buildings that are held for sale.
For the first six months of 2018, net losses were $477,000, compared to net gains of $464,000 for the first six months of 2017.
During the year-to-date period through June
30, 2018, the second quarter losses on fixed asset
disposals, investment securities, and market value write-downs on
properties held for sale were partially offset by net gains on
repossessed assets that were recorded in the first quarter.
In the year-to-date period in 2017, gains included $358,000 on the sale of investment securities and
$130,000 on fixed asset disposals,
largely attributable to the sale of a building.
Total Fee-based Income:
Total fee-based income for
the second quarter of 2018 was $13.8
million, compared to $14.9
million for the first quarter of 2018 and $13.6 million for the second quarter of
2017. The decrease of $1.1
million, or 7%, compared to the linked quarter was largely
attributable to a decrease of $1.3
million in insurance income, as annual performance-based
insurance commissions are primarily recognized in the first quarter
of each year. In addition, compared to the first quarter of
2018, mortgage banking income increased approximately $600,000, largely attributable to gains on sale
of real estate loans originated by the mortgage origination
operation acquired in the ASB acquisition. This increase was
more than offset by reductions in the fair value of equity
securities of approximately $700,000,
that were recognized in fee-based income in accordance with an
accounting standard update that was effective January 1, 2018.
The increase of $0.2
million, or 2%, compared to the second quarter of 2017 was
primarily due to a $500,000 increase
in mortgage banking income, mostly attributable to gains on sale of
real estate loans originated by the mortgage origination operation
acquired in the ASB acquisition, and a $300,000 increase in trust and investment income,
largely due to higher brokerage income. These increases were
partially offset by a decrease of $500,000 in swap fee income, which is dependent
upon customer-driven demand. In addition, the second quarter
of 2017 benefited from a gain of $437,000 on the sale of a government guaranteed
loan, which moderated the increase compared to the second quarter
of 2018.
For the first six months of 2018, total fee-based income grew
$1.8 million, or 7%, compared to the
same period in the prior year. The largest contributors to
the increase included approximately $600,000 in trust and investment income,
approximately $600,000 in other
non-interest income, in part due to changes in the fair value of
equity securities, and approximately $500,000 in insurance income, mostly due to the
acquisition of a property and casualty focused independent
insurance agency on October 2,
2017. Another contributor to the increase in total fee-based
income compared to the first six months of 2017 was growth in
mortgage banking income, largely attributable to gains on sale of
real estate loans originated by the mortgage origination operation
acquired in the ASB acquisition. These increases were
partially offset by a decrease in swap fee income.
Total Non-interest Expense:
Total non-interest
expense for the second quarter of 2018 was $36.0 million, compared to $28.2 million for the first quarter of 2018 and
$26.7 million for the second quarter
of 2017. Peoples recognized $6.1
million of acquisition-related expenses in the second
quarter of 2018, compared to $149,000
in the first quarter of 2018, and none in the second quarter of
2017.
The increase in total non-interest expense in the second quarter
of 2018 compared to both the linked quarter and the second quarter
of 2017 was primarily attributable to acquisition-related
expenses. Excluding acquisition-related expenses, total
non-interest expense increased $1.8
million compared to the first quarter of 2018, largely due
to an increase in base salaries and other expenses associated with
the addition of ASB. Other contributors to the increase in
total non-interest expense compared to the first quarter of 2018
included higher professional fees, including consulting and legal
fees, and fraud-related expenses of $207,000 related to an ATM skimming
incident. Actions have been taken to prevent future
fraudulent ATM activity.
Excluding acquisition-related expenses, total non-interest
expense increased $3.2 million
compared to the second quarter of 2017, attributable in part to
higher salaries and employee benefit costs associated with the
addition of ASB. Another contributor to the increase was
higher professional fees, including consulting and legal fees.
For the first six months of 2018, total non-interest expense
increased $10.2 million, or 19%,
compared to the first six months of 2017. Peoples recognized
$6.2 million of acquisition-related
expenses in the first six months of 2018, while no
acquisition-related expenses were recorded in the first six months
of 2017. The increase of $4.0
million, excluding acquisition-related expenses, was
primarily attributable to higher salaries and employee benefit
costs and professional fees, including consulting and legal
fees. Approximately 20% of the increase represented ongoing
expenses resulting from the ASB acquisition.
The efficiency ratio for the second quarter of 2018 was 75.0%,
compared to 61.8% for the linked quarter, and 61.2% for the second
quarter of 2017, and was higher due to acquisition-related
expenses. The efficiency ratio, when adjusted for
acquisition-related expenses, was 62.0% for the second quarter of
2018, compared to 61.4% for the linked quarter, and 61.2% for the
second quarter of 2017. The increase in the adjusted
efficiency ratio compared to the linked quarter and the second
quarter of 2017 was due primarily to the increase in total
non-interest expense. In addition, the decrease in insurance
income in the second quarter of 2018 compared to the linked
quarter, due to the annual performance-based insurance commissions
primarily recognized in the first quarter of each year, contributed
to the increase in the adjusted efficiency ratio. For
the first six months of 2018, the efficiency ratio was 68.5%,
compared to 63.0% for the first six months of 2017. Adjusted
for acquisition-related expenses, the efficiency ratio for the
first six months of 2018 was 61.7%, compared to 63.0% for the same
period in the prior year.
Income Tax Expense:
For the second quarter of 2018,
Peoples recorded income tax expense of $1.1
million, compared to $2.4
million for the linked quarter, and $4.4 million for the second quarter of
2017. Income tax expense decreased during the second quarter
of 2018 compared to the linked quarter in part due to the release
of a valuation allowance of $0.8
million. The valuation allowance was related to a
historical tax credit invested in during 2015. Recent capital
gains realized as a result of the sale of equity investment
securities were large enough to offset the anticipated capital loss
in 2021, resulting in the release of the valuation allowance.
Another contributor to the decrease in income tax expense during
the second quarter of 2018 was the lower pre-tax income recorded
due to acquisition-related costs. The reduction in the income
tax expense reported in the second quarter of 2018 compared to the
second quarter of 2017 was also attributable to the decrease in the
federal statutory corporate income tax rate from 35% to 21% as a
result of the Tax Cuts and Jobs Act enacted in December 2017, and its impact on Peoples
effective tax rate, which was 11.4% for the second quarter of 2018,
compared to 16.9% for the first quarter of 2018 and 31.1% for the
second quarter of 2017.
For the first six months of 2018, Peoples recorded income tax
expense of $3.4 million, compared to
$8.3 million for the same period in
the prior year, and the effective tax rate for the first six months
of 2018 was 14.7%, compared to 30.8% for the first six months of
2017. The first six months of 2018 included the $0.8 million valuation allowance release, as well
as a tax benefit of $290,000 as a
result of stock awards that vested during the first quarter,
compared to $104,000 tax benefit
during the first six months of 2017. The vesting of a
majority of stock awards granted by Peoples occurs annually in the
first quarter.
Loans:
As of June 30,
2018, balances in loan accounts acquired from ASB totaled
$228.8 million, including
$124.1 million in residential real
estate loans, $53.9 million in
commercial real estate loans, $27.3
million in home equity lines of credit, $11.9 million in commercial and industrial loans,
$9.3 million in construction loans,
and $2.3 million in indirect consumer
loans.
Period-end total loan balances at June
30, 2018 increased $284.2
million, compared to March 31,
2018, $329.4 million compared
to December 31, 2017, and
$392.1 million compared to
June 30, 2017. Compared to the
end of the linked quarter, excluding the balances acquired from
ASB, loan balances were up $55.3
million, or 9% on an annualized basis, with an increase of
$35.9 million, or 10% annualized, in
commercial loans, and an increase of $23.4
million, or 27% annualized, in indirect consumer
loans. The increase in commercial loans included $19.7 million, or 10% annualized, in commercial
real estate and $11.3 million, or 9%
annualized, in commercial and industrial loans.
Compared to December 31, 2017,
excluding the impact of the ASB acquisition, period-end loan
balances grew $100.5 million, or 9%
on an annualized basis. Commercial loan balances grew
$68.3 million, or 10% annualized,
including $43.2 million in commercial
real estate and $27.8 million in
commercial and industrial loan balances. Indirect consumer
loan balances increased $30.5
million, or 18% annualized, at June
30, 2018 compared to December 31,
2017.
Compared to June 30, 2017,
excluding the impact of the ASB acquisition, loan balances were up
$163.3 million, or 7%, with an
increase of $123.0 million, or 10%,
in commercial loans, and an increase of $65.1 million, or 21%, in indirect consumer
loans. The growth in commercial loans included $68.8 million, or 16%, in commercial and
industrial loans, and $53.5 million,
or 7%, in commercial real estate. At June 30, 2018, commercial real estate loans
comprised 37% of the total loan portfolio, while commercial and
industrial loan balances comprised 19%, and indirect consumer loan
balances comprised 14%. In comparison, at March 31, 2018, commercial real estate loans
comprised 37% of the total loan portfolio, while commercial and
industrial loan balances and indirect consumer loan balances
comprised 20% and 14%, respectively. At June 30, 2017, commercial real estate loans
comprised 38% of the total loan portfolio, while commercial and
industrial loan balances, and indirect consumer loan balances
comprised 19% and 13%, respectively.
Quarterly average gross loan balances increased $252.4 million, or 11%, compared to the linked
quarter, and $356.1 million, or 16%,
compared to the second quarter of 2017. For the six months
ended June 30, 2018, average gross
loan balances increased $244.2
million, or 11%, compared to the same period in the prior
year. Average loan balances associated with the ASB
acquisition contributed to the growth compared to all periods, with
the most significant impact occurring in the quarterly comparisons.
Commercial lending and indirect consumer lending were among the
largest contributors to the growth compared to each period.
These balances grew $98.8 million, or
7%, and $16.8 million, or 5%,
respectively, in the second quarter of 2018 compared to the linked
quarter, and $185.8 million, or 15%,
and $66.0 million, or 22%,
respectively, compared to the second quarter of 2017.
Compared to the first six months of 2017, average commercial loan
balances grew $144.0 million, or 11%,
while average consumer indirect loan balances grew $69.6 million, or 25%.
Asset Quality:
A number of asset quality metrics
improved during the second quarter of 2018. Nonperforming
assets as a percent of total loans and OREO decreased to 0.67% at
June 30, 2018, compared to 0.72% at
March 31, 2018 and 0.88% at
June 30, 2017, as the growth in total
loans as a result of the ASB acquisition outpaced the growth in
nonperforming assets. At June 30,
2018, nonperforming assets increased $0.8 million from March
31, 2018, due in part to past due loans acquired from ASB,
and decreased $2.0 million from
June 30, 2017.
Annualized net charge-offs were 0.11% of average gross loans
during the second quarter of 2018, compared to 0.34% in the linked
quarter and 0.11% in the second quarter of 2017. For the
first six months of 2018, annualized net charge-offs were 0.22%,
compared to 0.11% for the first six months of 2017. The rate
for the first quarter and the first six months of 2018 was higher
due to the charge-off of a single acquired commercial loan
relationship during the first quarter of 2018.
Classified loans, which are those categorized as substandard or
doubtful, increased $10.9 million, or
24%, compared to March 31, 2018 and
$2.6 million, or 5%, compared to
June 30, 2017. As a percent of
total loans, classified loans were 2.07% at June 30, 2018, compared to 1.86% at March 31, 2018 and 2.31% at June 30, 2017. Criticized loans, which are
those categorized as special mention, substandard or doubtful,
increased $4.6 million, or 4%,
compared to March 31, 2018, and
increased $9.3 million, or 8%,
compared to June 30, 2017. As a
percent of total loans, criticized loans were 4.50% at June 30, 2018, compared to 4.84% at March 31, 2018 and 4.86% at June 30, 2017. The increase in both
classified and criticized loans was largely related to acquired ASB
loans, coupled with downgrades of two commercial loan relationships
during the second quarter of 2018.
At June 30, 2018, the allowance
for loan losses increased to $19.3
million, compared to $18.8
million at both March 31,
2018, and June 30, 2017.
The increase was primarily attributable to organic loan
growth. The ratio of the allowance for loan losses as a
percent of total loans, net of deferred fees and costs, was 0.72%
at June 30, 2018, compared to 0.78%
at March 31, 2018 and 0.82% at
June 30, 2017. The ratio
includes all acquired loans, from both ASB and previous
acquisitions, of $621.8 million and
allowance for acquired loan losses of $0.1
million. The decline in the ratio was attributable to
improvement in asset quality metrics, and to the ASB acquisition,
as the loans acquired from ASB were recorded at a preliminary fair
value, in accordance with generally accepted accounting principles,
and no allowance for loan loss related to these loans was recorded
as of June 30, 2018 based on analysis
of the loans as of that date.
Deposits:
As of June 30,
2018, balances in deposit accounts acquired from ASB totaled
$168.4 million, including
$62.1 million in certificates of
deposit, $52.0 in demand deposit
accounts, $35.3 million in money
market deposit accounts, and $19.0
million in savings accounts.
Period-end deposits increased $136.1
million, or 5%, at June 30,
2018, compared to March 31,
2018, and $272.1 million, or
10%, compared to June 30, 2017.
Compared to the end of the linked quarter, excluding the balances
acquired from ASB, deposit balances were down $32.3 million, or 1%, due in part to a decrease
of $36.7 million in governmental
deposit accounts, as balances in governmental deposits are
seasonally higher in the first quarter of each year compared to the
other quarters. Compared to the end of the second quarter of
2017, excluding the impact of the ASB acquisition, the increase in
period-end deposits at June 30, 2018
was $103.8 million, or 4%, primarily
due to a $91.5 million increase in
certificates of deposit.
Average deposits for the second quarter of 2018 increased
$206.0 million compared to the linked
quarter, and $263.9 million compared
to the second quarter of 2017. For the first six months of
2018, average deposits increased $199.0
million, or 8%, compared to the first six months of
2017. Average deposit balances associated with the ASB
acquisition contributed to the growth for all periods, with the
most significant impact occurring in the quarterly
comparisons. Compared to both the first quarter of 2018 and
the second quarter of 2017, average deposit balances were up in all
categories, with the most significant increases in certificates of
deposit, which were up $87.8 million,
or 18%, compared to the first quarter of 2018, and $117.3 million, or 25%, compared to the second
quarter of 2017. In addition, average demand deposit account
balances were up $46.7 million, or
4%, for the second quarter of 2018 compared to the linked quarter,
and $102.9 million, or 10%, compared
to the second quarter of 2017. Average balances in
certificates of deposit were up $92.3
million, or 21%, and average balances in demand deposit
accounts were up $89.4 million, or
8%, for the first six months of 2018 compared to the same period in
the prior year.
Total demand deposit accounts comprised 39% of total deposits at
June 30, 2018, compared to 41% at
March 31, 2018 and 40% at
June 30, 2017.
Stockholders' Equity:
At June
30, 2018, the tier 1 risk-based capital ratio was 13.26%,
compared to 13.57% at March 31, 2018,
and 13.47% at June 30, 2017.
The common equity tier 1 risk-based capital ratio was 13.00% at
June 30, 2018, compared to 13.28% at
March 31, 2018, and 13.18% at
June 30, 2017. The total
risk-based capital ratio was 13.96% at June
30, 2018, compared to 14.31% at March
31, 2018, and 14.40% at June
30, 2017. These capital ratios were impacted by the
ASB acquisition, which created increases in capital and
risk-weighted assets. In addition, net income earned during
the second quarter of 2018 exceeded the dividends declared and paid
during the quarter by $2.4
million.
Peoples' capital position remained strong at June 30, 2018. The book value per share was
$25.57 at June
30, 2018, compared to $24.87
at March 31, 2018, and $24.69 at June 30,
2017. The tangible book value per share was $17.17 at June 30,
2018, compared to $17.04 at
March 31, 2018, and $16.78 at June 30,
2017. The tangible equity to tangible assets ratio was 8.81%
at June 30, 2018, compared to 8.97%
at March 31, 2018, and 9.07% at
June 30, 2017. The primary
contributor to the increase in the book value per share and the
tangible book value per share at June 30,
2018 compared to both March 31,
2018 and June 30, 2017, was
the issuance of common stock associated with the ASB
acquisition. While increases in equity and asset balances
were experienced as a result of the ASB acquisition, the tangible
equity to tangible assets ratio decreased slightly compared to the
end of the linked quarter as a result of increased intangible
assets associated with the acquisition.
Peoples Bancorp Inc. is a diversified financial services holding
company with $4.0 billion in total
assets, 82 locations, including 71 full-service bank branches, and
78 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
second quarter 2018 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 performance 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 acquisition-related expenses.
- 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 fee-based
income. This measure is non-GAAP since it excludes
amortization of other intangible assets and all gains and/or losses
included in earnings (which are excluded from total fee-based
income), and uses fully tax-equivalent net interest income.
- Adjusted efficiency ratio is calculated as core non-interest
expense (less amortization of other intangible assets) as a
percentage of fully tax-equivalent net interest income plus total
fee-based income. This measure is non-GAAP since it excludes
the impact of acquisition-related expenses, the amortization of
other intangible assets and all gains and/or losses included in
earnings (which are excluded from total fee-based income), 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.
- Pre-provision net revenue is defined as net interest income
plus total fee-based income minus total 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, which are
excluded from total fee-based income.
- Return on tangible stockholders' equity is calculated as net
income (less after-tax impact of amortization of other intangible
assets) divided by tangible stockholders' equity. This
measure is non-GAAP since it excludes the after-tax impact of
amortization of other intangible assets from earnings and the
impact of goodwill and other intangible assets acquired through
acquisitions on total stockholders' equity.
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," "project," "goal,"
"target," "potential," "seek," "intend," 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 the implementation of Peoples' business strategies,
including the successful integration of the recently completed
acquisition and the expansion of consumer lending activity;
(2) Peoples' ability to integrate acquisitions, including the
merger with ASB and any future acquisitions, which may be
unsuccessful, or may be more difficult, time-consuming or costly
than expected;
(3) competitive pressures among financial institutions, or from
non-financial institutions, which may increase significantly,
including product and pricing pressures, changes to third-party
relationships and revenues, and Peoples' ability to attract,
develop and retain qualified professionals;
(4) 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, loan demand and interest rate sensitivity;
(5) uncertainty regarding the nature, timing, cost, and effect of
legislative or regulatory changes or actions, promulgated and to be
promulgated by governmental and regulatory agencies in the
State of Ohio, the Federal Deposit
Insurance Corporation, 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, and the Basel III regulatory capital
reform;
(6) uncertainties in Peoples' preliminary review of, and additional
analysis of, the impact of the Tax Cuts and Jobs Act;
(7) local, regional, national and international economic conditions
(including the impact of tariffs, a U.S. withdrawal from or
significant renegotiation of trade agreements, trade wars and other
changes in trade regulations) 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;
(8) changes in policy and other regulatory and legal developments
accompanying the current presidential administration, including the
recently-enacted Tax Cuts and Jobs Act, and uncertainty or
speculation pending the enactment of such changes;
(9) Peoples may issue equity securities in connection with future
acquisitions, which could cause ownership and economic dilution to
Peoples' current shareholders;
(10) 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;
(11) adverse changes in economic conditions and/or activities,
including, but not limited to, continued economic uncertainty in
the U.S., the European Union (including the uncertainty surrounding
the actions to be taken to implement the 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;
(12) deterioration in the credit quality of Peoples' loan
portfolio, which may adversely impact the provision for loan
losses;
(13) changes in accounting standards, policies, estimates or
procedures which may adversely affect Peoples' reported financial
condition or results of operations;
(14) Peoples' assumptions and estimates used in applying critical
accounting policies, which may prove unreliable, inaccurate or not
predictive of actual results;
(15) 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;
(16) Peoples' ability to receive dividends from its
subsidiaries;
(17) Peoples' ability to maintain required capital levels and
adequate sources of funding and liquidity;
(18) the impact of minimum capital thresholds established as a part
of the implementation of Basel III;
(19) 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;
(20) the costs and effects of new federal and state laws, and other
regulatory and legal developments, including the outcome of
potential regulatory or other governmental inquiries and legal
proceedings and results of regulatory examinations;
(21) 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, which may prove inadequate, and could adversely affect
customer confidence in Peoples and/or result in Peoples incurring a
financial loss;
(22) Peoples' reliance on, and the potential failure of, a number
of third-party vendors to perform as expected, including its
primary core banking system provider;
(23) Peoples' ability to anticipate and respond to technological
changes which can impact Peoples' ability to respond to customer
needs and meet competitive demands;
(24) changes in consumer spending, borrowing and saving habits,
whether due to the recently enacted tax reform legislation,
changes in business and economic conditions, legislative or
regulatory initiatives, or other factors, which may be different
than anticipated;
(25) the overall adequacy of Peoples' risk management program;
(26) the impact on Peoples' businesses, as well as on the risks
described above, of various domestic or international widespread
natural or other disasters, pandemics, cyber attacks, civil unrest,
military or terrorist activities or international conflicts;
(27) significant changes in the tax laws, which may adversely
affect the fair values of deferred tax assets and obligations of
states and political subdivisions held in Peoples' investment
securities portfolio;
(28) Peoples' continued ability to grow deposits; and
(29) other risk factors relating to the banking industry or Peoples
as detailed from time to time in Peoples' reports filed with 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, 2017, and
under the heading "ITEM 1A. RISK FACTORS" in Part II of Peoples'
Quarterly Report on Form 10-Q for the quarter ended March 31, 2018.
Peoples encourages readers of this news release to understand
forward-looking statements to be strategic objectives rather than
absolute targets of future performance. Peoples undertakes no
obligation to update these forward-looking statements to reflect
events or circumstances after the date of this news release or to
reflect the occurrence of unanticipated events, except as required
by applicable legal requirements. Copies of documents filed
with the SEC are available free of charge at the SEC's website at
http://www.sec.gov and/or from Peoples' website.
As required by U.S. GAAP, Peoples is required to evaluate the
impact of subsequent events through the issuance date of its
June 30, 2018 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 (Unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
PER COMMON
SHARE:
|
|
|
|
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.41
|
|
|
$
|
0.64
|
|
|
$
|
0.54
|
|
|
$
|
1.05
|
|
|
$
|
1.02
|
|
Diluted
|
0.41
|
|
|
0.64
|
|
|
0.53
|
|
|
1.04
|
|
|
1.02
|
|
Cash dividends
declared per common share
|
0.28
|
|
|
0.26
|
|
|
0.20
|
|
|
0.54
|
|
|
0.40
|
|
Book value per common
share
|
25.57
|
|
|
24.87
|
|
|
24.69
|
|
|
25.57
|
|
|
24.69
|
|
Tangible book value
per common share (a)
|
17.17
|
|
|
17.04
|
|
|
16.78
|
|
|
17.17
|
|
|
16.78
|
|
Closing stock price
at end of period
|
$
|
37.78
|
|
|
$
|
35.45
|
|
|
$
|
32.13
|
|
|
$
|
37.78
|
|
|
$
|
32.13
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED
RATIOS:
|
|
|
|
|
|
|
|
|
|
Return on average
stockholders' equity (b)
|
6.46
|
%
|
|
10.48
|
%
|
|
8.76
|
%
|
|
8.39
|
%
|
|
8.45
|
%
|
Return on average
tangible stockholders' equity (b) (c)
|
10.47
|
%
|
|
16.14
|
%
|
|
13.71
|
%
|
|
13.21
|
%
|
|
13.34
|
%
|
Return on average
assets (b)
|
0.81
|
%
|
|
1.32
|
%
|
|
1.12
|
%
|
|
1.06
|
%
|
|
1.08
|
%
|
Efficiency ratio
(d)
|
74.96
|
%
|
|
61.75
|
%
|
|
61.19
|
%
|
|
68.53
|
%
|
|
63.01
|
%
|
Pre-provision net
revenue to total average assets (b)(e)
|
1.10
|
%
|
|
1.81
|
%
|
|
1.72
|
%
|
|
1.44
|
%
|
|
1.63
|
%
|
Net interest margin
(b)(f)
|
3.74
|
%
|
|
3.66
|
%
|
|
3.62
|
%
|
|
3.70
|
%
|
|
3.58
|
%
|
Dividend payout ratio
(g)
|
69.27
|
%
|
|
40.64
|
%
|
|
37.32
|
%
|
|
52.15
|
%
|
|
39.19
|
%
|
|
|
(a)
|
This amount
represents a non-GAAP financial measure since it excludes the
balance sheet impact of goodwill and other 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)
|
This amount
represents a non-GAAP financial measure since it excludes the
after-tax impact of amortization of other intangible assets from
earnings and it excludes the balance sheet impact of goodwill and
other 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.
|
(d)
|
Total non-interest
expense (less amortization of other intangible assets) as a
percentage of fully tax-equivalent net interest income plus total
fee-based 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 (which are
excluded from total fee-based income), 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.
|
(e)
|
Pre-provision net
revenue is defined as net interest income plus total fee-based
income minus total non-interest expense. This ratio
represents a non-GAAP financial measure since it excludes the
provision for loan losses and all gains and/or losses included in
earnings (which are excluded from total fee-based income).
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.
|
(f)
|
Information presented
on a fully tax-equivalent basis.
|
(g)
|
Ratios are calculated
based on dividends declared during the period divided by net income
for the period.
|
CONSOLIDATED
STATEMENTS OF INCOME (Unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Total interest
income
|
$
|
37,769
|
|
|
$
|
33,226
|
|
|
$
|
31,208
|
|
|
$
|
70,995
|
|
|
$
|
61,025
|
|
Total interest
expense
|
4,961
|
|
|
3,867
|
|
|
3,118
|
|
|
8,828
|
|
|
5,990
|
|
Net interest
income
|
32,808
|
|
|
29,359
|
|
|
28,090
|
|
|
62,167
|
|
|
55,035
|
|
Provision for loan
losses
|
1,188
|
|
|
1,983
|
|
|
947
|
|
|
3,171
|
|
|
1,571
|
|
Net interest income
after provision for loan losses
|
31,620
|
|
|
27,376
|
|
|
27,143
|
|
|
58,996
|
|
|
53,464
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) gain on
investment securities
|
(147)
|
|
|
1
|
|
|
18
|
|
|
(146)
|
|
|
358
|
|
Loss on debt
extinguishment
|
(13)
|
|
|
—
|
|
|
—
|
|
|
(13)
|
|
|
—
|
|
Net gain (loss) on
loans held-for-sale and other real estate owned
|
14
|
|
|
(5)
|
|
|
(24)
|
|
|
9
|
|
|
(24)
|
|
Net (loss) gain on
other assets
|
(406)
|
|
|
79
|
|
|
133
|
|
|
(327)
|
|
|
130
|
|
|
|
|
|
|
|
|
|
|
|
Fee-based
income:
|
|
|
|
|
|
|
|
|
|
Insurance
income
|
3,369
|
|
|
4,655
|
|
|
3,414
|
|
|
8,024
|
|
|
7,516
|
|
Trust and investment
income
|
3,232
|
|
|
3,068
|
|
|
2,977
|
|
|
6,300
|
|
|
5,659
|
|
Electronic banking
income
|
2,785
|
|
|
2,785
|
|
|
2,587
|
|
|
5,570
|
|
|
5,148
|
|
Deposit account
service charges
|
2,388
|
|
|
2,120
|
|
|
2,294
|
|
|
4,508
|
|
|
4,723
|
|
Mortgage banking
income
|
969
|
|
|
351
|
|
|
467
|
|
|
1,320
|
|
|
854
|
|
Bank owned life
insurance income
|
497
|
|
|
468
|
|
|
496
|
|
|
965
|
|
|
989
|
|
Commercial loan swap
fees
|
146
|
|
|
116
|
|
|
651
|
|
|
262
|
|
|
919
|
|
Other
income
|
421
|
|
|
1,331
|
|
|
704
|
|
|
1,752
|
|
|
1,116
|
|
Total
fee-based income
|
13,807
|
|
|
14,894
|
|
|
13,590
|
|
|
28,701
|
|
|
26,924
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
expense:
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefit costs
|
18,025
|
|
|
15,990
|
|
|
15,049
|
|
|
34,015
|
|
|
30,545
|
|
Professional
fees
|
3,022
|
|
|
1,718
|
|
|
1,529
|
|
|
4,740
|
|
|
3,139
|
|
Net occupancy and
equipment expense
|
2,803
|
|
|
2,866
|
|
|
2,648
|
|
|
5,669
|
|
|
5,361
|
|
Electronic banking
expense
|
1,448
|
|
|
1,528
|
|
|
1,525
|
|
|
2,976
|
|
|
3,039
|
|
Data processing and
software expense
|
1,359
|
|
|
1,322
|
|
|
1,096
|
|
|
2,681
|
|
|
2,238
|
|
Amortization of other
intangible assets
|
861
|
|
|
754
|
|
|
871
|
|
|
1,615
|
|
|
1,734
|
|
Marketing
expense
|
656
|
|
|
325
|
|
|
354
|
|
|
981
|
|
|
634
|
|
Franchise tax
expense
|
614
|
|
|
644
|
|
|
584
|
|
|
1,258
|
|
|
1,167
|
|
FDIC insurance
expense
|
416
|
|
|
366
|
|
|
457
|
|
|
782
|
|
|
890
|
|
Foreclosed real
estate and other loan expenses
|
338
|
|
|
212
|
|
|
179
|
|
|
550
|
|
|
375
|
|
Communication
expense
|
300
|
|
|
344
|
|
|
390
|
|
|
644
|
|
|
800
|
|
Other non-interest
expense
|
6,129
|
|
|
2,152
|
|
|
1,998
|
|
|
8,281
|
|
|
4,089
|
|
Total
non-interest expense
|
35,971
|
|
|
28,221
|
|
|
26,680
|
|
|
64,192
|
|
|
54,011
|
|
Income before
income taxes
|
8,904
|
|
|
14,124
|
|
|
14,180
|
|
|
23,028
|
|
|
26,841
|
|
Income tax
expense
|
1,012
|
|
|
2,383
|
|
|
4,414
|
|
|
3,395
|
|
|
8,266
|
|
Net income
|
$
|
7,892
|
|
|
$
|
11,741
|
|
|
$
|
9,766
|
|
|
$
|
19,633
|
|
|
$
|
18,575
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE
DATA:
|
|
|
|
|
|
|
|
|
|
Earnings per common
share – Basic
|
$
|
0.41
|
|
|
$
|
0.64
|
|
|
$
|
0.54
|
|
|
$
|
1.05
|
|
|
$
|
1.02
|
|
Earnings per common
share – Diluted
|
$
|
0.41
|
|
|
$
|
0.64
|
|
|
$
|
0.53
|
|
|
$
|
1.04
|
|
|
$
|
1.02
|
|
Cash dividends
declared per common share
|
$
|
0.28
|
|
|
$
|
0.26
|
|
|
$
|
0.20
|
|
|
$
|
0.54
|
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding – Basic
|
19,160,728
|
|
|
18,126,089
|
|
|
18,044,574
|
|
|
18,646,266
|
|
|
18,037,333
|
|
Weighted-average
common shares outstanding – Diluted
|
19,293,381
|
|
|
18,256,035
|
|
|
18,203,752
|
|
|
18,773,169
|
|
|
18,195,715
|
|
Actual common shares
outstanding (end of period)
|
19,528,952
|
|
|
18,365,035
|
|
|
18,279,036
|
|
|
19,528,952
|
|
|
18,279,036
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
June
30,
|
|
December
31,
|
|
2018
|
|
2017
|
(Dollars in
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
Assets
|
|
|
|
Cash and cash
equivalents:
|
|
|
|
Cash and due
from banks
|
$
|
63,375
|
|
|
$
|
58,121
|
|
Interest-bearing deposits in other banks
|
21,427
|
|
|
14,073
|
|
Total cash and cash equivalents
|
84,802
|
|
|
72,194
|
|
|
|
|
|
Available-for-sale
investment securities, at fair value (amortized cost of
|
|
|
|
$816,217 at
June 30, 2018 and $797,732 at December 31, 2017) (a)
|
795,924
|
|
|
795,187
|
|
Held-to-maturity
investment securities, at amortized cost (fair value of
|
|
|
|
$38,426 at
June 30, 2018 and $41,213 at December 31, 2017)
|
38,834
|
|
|
40,928
|
|
Other investment
securities (a)
|
42,007
|
|
|
38,371
|
|
Total investment securities
|
876,765
|
|
|
874,486
|
|
|
|
|
|
Loans, net of
deferred fees and costs
|
2,686,491
|
|
|
2,357,137
|
|
Allowance for loan
losses
|
(19,266)
|
|
|
(18,793)
|
|
Net loans
|
2,667,225
|
|
|
2,338,344
|
|
|
|
|
|
Loans held for
sale
|
6,278
|
|
|
2,510
|
|
Bank premises and
equipment, net of accumulated depreciation
|
58,292
|
|
|
52,510
|
|
Bank owned life
insurance
|
67,943
|
|
|
62,176
|
|
Goodwill
|
151,423
|
|
|
133,111
|
|
Other intangible
assets
|
12,530
|
|
|
11,465
|
|
Other
assets
|
46,833
|
|
|
34,890
|
|
Total assets
|
$
|
3,972,091
|
|
|
$
|
3,581,686
|
|
|
|
|
|
Liabilities
|
|
|
|
Deposits:
|
|
|
|
Non-interest-bearing
deposits
|
$
|
585,861
|
|
|
$
|
556,010
|
|
Interest-bearing
deposits
|
2,363,398
|
|
|
2,174,320
|
|
Total deposits
|
2,949,259
|
|
|
2,730,330
|
|
|
|
|
|
Short-term
borrowings
|
360,727
|
|
|
209,491
|
|
Long-term
borrowings
|
113,085
|
|
|
144,019
|
|
Accrued expenses and
other liabilities
|
49,681
|
|
|
39,254
|
|
Total liabilities
|
3,472,752
|
|
|
3,123,094
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
Preferred
stock, no par value, 50,000 shares authorized, no shares
issued
at June
30, 2018 and December 31, 2017
|
—
|
|
|
—
|
|
Common stock, no par
value, 24,000,000 shares authorized, 20,114,405 shares
issued
at June 30, 2018 and 18,952,385 shares issued at
December
31, 2017, including shares in treasury
|
385,751
|
|
|
345,412
|
|
Retained earnings
(b)
|
145,723
|
|
|
134,362
|
|
Accumulated other
comprehensive loss, net of deferred income taxes (b)
|
(17,603)
|
|
|
(5,215)
|
|
Treasury stock, at
cost, 623,852 shares at June 30, 2018 and
702,449 shares
at December 31, 2017
|
(14,532)
|
|
|
(15,967)
|
|
Total stockholders' equity
|
499,339
|
|
|
458,592
|
|
Total liabilities and stockholders' equity
|
$
|
3,972,091
|
|
|
$
|
3,581,686
|
|
|
|
|
|
|
(a) As of
January 1, 2018, Peoples adopted ASU 2016-01, resulting in the
reclassification of equity securities (including those held in
participant accounts in the Peoples Bancorp Inc. Nonqualified
Deferred Compensation Plan) from available-for-sale investment
securities to other investment securities. At December 31,
2017, $7.8 million of equity securities were included in
available-for-sale investment securities.
|
(b) As of December
31, 2017, Peoples early adopted ASU 2018-02, reclassifying income
tax effects of the Tax Cuts and Jobs Act of $0.9 million from
accumulated other comprehensive loss to retained
earnings.
|
As of January 1,
2018, Peoples adopted ASU 2014-09, resulting in a reduction to
retained earnings of $3.1 million, net of federal income
taxes, to reflect uncompleted contracts in the initial application
of the guidance, and ASU 2016-01, reclassifying $5.0 million
in net unrealized gains on equity securities from accumulated other
comprehensive loss to retained earnings.
|
SELECTED FINANCIAL
INFORMATION
|
|
|
June
30,
|
March
31,
|
December
31,
|
September
30,
|
June
30,
|
|
2018
|
2018
|
2017
|
2017
|
2017
|
(Dollars in
thousands)
|
(Unaudited)
|
(Unaudited)
|
|
(Unaudited)
|
(Unaudited)
|
Loan
Portfolio
|
|
|
|
|
|
Commercial real
estate, construction
|
$
|
122,035
|
|
$
|
107,811
|
|
$
|
115,437
|
|
$
|
119,752
|
|
$
|
112,169
|
|
Commercial real
estate, other
|
857,707
|
|
784,047
|
|
760,567
|
|
747,413
|
|
750,219
|
|
Commercial and
industrial
|
512,208
|
|
489,058
|
|
472,544
|
|
443,930
|
|
431,473
|
|
Residential real
estate
|
609,563
|
|
496,953
|
|
489,387
|
|
499,044
|
|
512,887
|
|
Home equity lines of
credit
|
135,890
|
|
107,730
|
|
109,477
|
|
110,787
|
|
111,710
|
|
Consumer,
indirect
|
373,582
|
|
347,860
|
|
340,719
|
|
335,844
|
|
306,113
|
|
Consumer,
direct
|
74,646
|
|
68,326
|
|
68,157
|
|
69,758
|
|
69,267
|
|
Deposit account
overdrafts
|
860
|
|
543
|
|
849
|
|
507
|
|
521
|
|
Total loans
|
$
|
2,686,491
|
|
$
|
2,402,328
|
|
$
|
2,357,137
|
|
$
|
2,327,035
|
|
$
|
2,294,359
|
|
Total acquired loans
(a)
|
$
|
621,774
|
|
$
|
413,248
|
|
$
|
414,847
|
|
$
|
438,380
|
|
$
|
463,684
|
|
Total originated loans
|
$
|
2,064,717
|
|
$
|
1,989,080
|
|
$
|
1,942,290
|
|
$
|
1,888,655
|
|
$
|
1,830,675
|
|
Deposit
Balances
|
|
|
|
|
|
Non-interest-bearing
deposits (b)
|
$
|
585,861
|
|
$
|
570,804
|
|
$
|
556,010
|
|
$
|
724,846
|
|
$
|
772,061
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
Interest-bearing demand accounts (b)
|
570,359
|
|
584,563
|
|
593,415
|
|
384,261
|
|
303,501
|
|
Retail
certificates of deposit
|
406,214
|
|
335,843
|
|
338,673
|
|
343,122
|
|
352,758
|
|
Money market
deposit accounts
|
389,893
|
|
364,232
|
|
371,376
|
|
388,876
|
|
397,211
|
|
Governmental
deposit accounts
|
305,255
|
|
341,920
|
|
264,524
|
|
289,895
|
|
297,560
|
|
Savings
accounts
|
480,615
|
|
461,440
|
|
446,714
|
|
440,633
|
|
443,110
|
|
Brokered
certificates of deposit
|
211,062
|
|
154,379
|
|
159,618
|
|
93,049
|
|
110,943
|
|
Total interest-bearing deposits
|
2,363,398
|
|
2,242,377
|
|
2,174,320
|
|
1,939,836
|
|
1,905,083
|
|
Total deposits
|
2,949,259
|
|
2,813,181
|
|
2,730,330
|
|
2,664,682
|
|
2,677,144
|
|
Total demand
deposits
|
1,156,220
|
|
1,155,367
|
|
1,149,425
|
|
1,109,107
|
|
1,075,562
|
|
Asset
Quality
|
|
|
|
|
|
Nonperforming assets
(NPAs):
|
|
|
|
|
|
Loans 90+ days
past due and accruing
|
$
|
1,975
|
|
$
|
1,030
|
|
$
|
1,626
|
|
$
|
3,542
|
|
$
|
2,583
|
|
Nonaccrual
loans
|
16,069
|
|
16,202
|
|
15,692
|
|
16,219
|
|
16,921
|
|
Total nonperforming loans (NPLs)
|
18,044
|
|
17,232
|
|
17,318
|
|
19,761
|
|
19,504
|
|
Other real
estate owned (OREO)
|
63
|
|
99
|
|
208
|
|
276
|
|
652
|
|
Total NPAs
|
$
|
18,107
|
|
$
|
17,331
|
|
$
|
17,526
|
|
$
|
20,037
|
|
$
|
20,156
|
|
Criticized loans
(c)
|
120,809
|
|
116,243
|
|
90,418
|
|
96,671
|
|
111,480
|
|
Classified loans
(d)
|
55,596
|
|
44,661
|
|
46,380
|
|
41,233
|
|
53,041
|
|
Allowance for loan
losses as a percent of NPLs (e)(f)
|
106.77
|
%
|
109.08
|
%
|
108.52
|
%
|
96.11
|
%
|
96.47
|
%
|
NPLs as a percent of
total loans (e)(f)
|
0.67
|
%
|
0.72
|
%
|
0.73
|
%
|
0.85
|
%
|
0.85
|
%
|
NPAs as a percent of
total assets (e)(f)
|
0.46
|
%
|
0.48
|
%
|
0.49
|
%
|
0.56
|
%
|
0.57
|
%
|
NPAs as a percent of
total loans and OREO (e)(f)
|
0.67
|
%
|
0.72
|
%
|
0.74
|
%
|
0.86
|
%
|
0.88
|
%
|
Criticized loans as a
percent of total loans (e)
|
4.50
|
%
|
4.84
|
%
|
3.83
|
%
|
4.15
|
%
|
4.86
|
%
|
Classified loans as a
percent of total loans (e)
|
2.07
|
%
|
1.86
|
%
|
1.97
|
%
|
1.77
|
%
|
2.31
|
%
|
Allowance for loan
losses as a percent of total loans (e)
|
0.72
|
%
|
0.78
|
%
|
0.80
|
%
|
0.82
|
%
|
0.82
|
%
|
Capital
Information (g)
|
|
|
|
|
|
Common Equity Tier 1
risk-based capital ratio
|
13.00
|
%
|
13.28
|
%
|
13.23
|
%
|
13.31
|
%
|
13.18
|
%
|
Tier 1 risk-based
capital ratio
|
13.26
|
%
|
13.57
|
%
|
13.52
|
%
|
13.60
|
%
|
13.47
|
%
|
Total risk-based
capital ratio (Tier 1 and Tier 2)
|
13.96
|
%
|
14.31
|
%
|
14.39
|
%
|
14.49
|
%
|
14.40
|
%
|
Leverage
ratio
|
9.75
|
%
|
9.86
|
%
|
9.75
|
%
|
9.81
|
%
|
9.71
|
%
|
Common Equity Tier 1
capital
|
$
|
359,645
|
|
$
|
335,393
|
|
$
|
327,172
|
|
$
|
326,966
|
|
$
|
318,849
|
|
Tier 1
capital
|
366,840
|
|
342,544
|
|
334,279
|
|
334,027
|
|
325,865
|
|
Total capital (Tier 1
and Tier 2)
|
386,105
|
|
361,343
|
|
355,977
|
|
355,951
|
|
348,309
|
|
Total risk-weighted
assets
|
$
|
2,765.769
|
|
$
|
2,524,970
|
|
$
|
2,473,329
|
|
$
|
2,456,797
|
|
$
|
2,419,335
|
|
Tangible equity to
tangible assets (h)
|
8.81
|
%
|
8.97
|
%
|
9.14
|
%
|
9.20
|
%
|
9.07
|
%
|
(a)
|
Includes all loans
acquired in 2012 and thereafter.
|
(b)
|
The sum of amounts
presented is considered total demand deposits.
|
(c)
|
Includes loans
categorized as a special mention, substandard, or
doubtful.
|
(d)
|
Includes loans
categorized as substandard or doubtful.
|
(e)
|
Data presented as of
the end of the period indicated.
|
(f)
|
Nonperforming loans
include loans 90+ days past due and accruing, renegotiated loans
and nonaccrual loans. Nonperforming assets include nonperforming
loans and OREO.
|
(g)
|
June 30, 2018
data based on preliminary analysis and subject to
revision.
|
(h)
|
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 (Unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Provision for Loan
Losses
|
|
|
|
|
|
|
|
|
|
Provision for loan
losses
|
$
|
1,000
|
|
|
$
|
1,842
|
|
|
$
|
850
|
|
|
$
|
2,842
|
|
|
$
|
1,250
|
|
Provision for
checking account overdrafts
|
188
|
|
|
141
|
|
|
97
|
|
|
329
|
|
|
321
|
|
Total
provision for loan losses
|
$
|
1,188
|
|
|
$
|
1,983
|
|
|
$
|
947
|
|
|
$
|
3,171
|
|
|
$
|
1,571
|
|
|
|
|
|
|
|
|
|
|
|
Net
Charge-Offs
|
|
|
|
|
|
|
|
|
|
Gross
charge-offs
|
$
|
990
|
|
|
$
|
2,299
|
|
|
$
|
957
|
|
|
3,289
|
|
|
$
|
2,057
|
|
Recoveries
|
270
|
|
|
321
|
|
|
357
|
|
|
591
|
|
|
872
|
|
Net
charge-offs
|
$
|
720
|
|
|
$
|
1,978
|
|
|
$
|
600
|
|
|
$
|
2,698
|
|
|
$
|
1,185
|
|
|
|
|
|
|
|
|
|
|
|
Net Charge-Offs
(Recoveries) by Type
|
|
|
|
|
|
|
|
|
|
Commercial real
estate, other
|
$
|
(21)
|
|
|
$
|
827
|
|
|
$
|
11
|
|
|
$
|
806
|
|
|
$
|
(91)
|
|
Commercial and
industrial
|
7
|
|
|
31
|
|
|
—
|
|
|
38
|
|
|
117
|
|
Residential real
estate
|
41
|
|
|
119
|
|
|
78
|
|
|
160
|
|
|
97
|
|
Home equity lines of
credit
|
18
|
|
|
30
|
|
|
14
|
|
|
48
|
|
|
14
|
|
Consumer,
indirect
|
412
|
|
|
795
|
|
|
299
|
|
|
1,207
|
|
|
576
|
|
Consumer,
direct
|
94
|
|
|
41
|
|
|
73
|
|
|
135
|
|
|
63
|
|
Deposit account
overdrafts
|
169
|
|
|
135
|
|
|
125
|
|
|
304
|
|
|
409
|
|
Total net
charge-offs
|
$
|
720
|
|
|
$
|
1,978
|
|
|
$
|
600
|
|
|
$
|
2,698
|
|
|
$
|
1,185
|
|
|
|
|
|
|
|
|
|
|
|
As a percent of
average gross loans (annualized)
|
0.11
|
%
|
|
0.34
|
%
|
|
0.11
|
%
|
|
0.22
|
%
|
|
0.11
|
%
|
SUPPLEMENTAL
INFORMATION (Unaudited)
|
|
|
June
30,
|
|
March
31,
|
|
December
31
|
|
September
30
|
|
June
30
|
(Dollars in
thousands)
|
2018
|
|
2018
|
|
2017
|
|
2017
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Trust assets under
administration and
management
|
$
|
1,454,009
|
|
|
$
|
1,447,636
|
|
|
$
|
1,452,959
|
|
|
$
|
1,418,360
|
|
|
$
|
1,393,435
|
|
Brokerage assets
under administration
and management
|
881,839
|
|
|
882,018
|
|
|
887,303
|
|
|
862,530
|
|
|
836,192
|
|
Mortgage loans
serviced for others
|
$
|
451,391
|
|
|
$
|
412,154
|
|
|
$
|
412,965
|
|
|
$
|
409,199
|
|
|
$
|
402,516
|
|
Employees (full-time
equivalent)
|
862
|
|
|
802
|
|
|
774
|
|
|
778
|
|
|
775
|
|
CONSOLIDATED
AVERAGE BALANCE SHEETS AND NET INTEREST INCOME
(Unaudited)
|
|
|
Three Months
Ended
|
|
June 30,
2018
|
|
March 31,
2018
|
|
June 30,
2017
|
(Dollars in
thousands)
|
Balance
|
Income/
Expense
|
Yield/
Cost
|
|
Balance
|
Income/
Expense
|
Yield/
Cost
|
|
Balance
|
Income/
Expense
|
Yield/
Cost
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
investments
|
$
|
10,815
|
|
$
|
54
|
|
2.00
|
%
|
|
$
|
11,291
|
|
$
|
52
|
|
1.87
|
%
|
|
$
|
12,275
|
|
$
|
26
|
|
0.85
|
%
|
Investment securities
(a)(b)
|
890,488
|
|
6,672
|
|
3.00
|
%
|
|
872,793
|
|
6,501
|
|
2.98
|
%
|
|
879,498
|
|
6,174
|
|
2.81
|
%
|
Loans
(b)(c):
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate, construction
|
118,206
|
|
1,438
|
|
4.81
|
%
|
|
118,589
|
|
1,333
|
|
4.50
|
%
|
|
107,224
|
|
1,158
|
|
4.27
|
%
|
Commercial real
estate, other
|
840,677
|
|
10,434
|
|
4.91
|
%
|
|
765,076
|
|
9,124
|
|
4.77
|
%
|
|
735,915
|
|
8,892
|
|
4.78
|
%
|
Commercial and
industrial
|
503,364
|
|
6,216
|
|
4.89
|
%
|
|
479,792
|
|
5,571
|
|
4.64
|
%
|
|
433,277
|
|
4,858
|
|
4.44
|
%
|
Residential real
estate (d)
|
600,799
|
|
6,749
|
|
4.49
|
%
|
|
491,713
|
|
5,309
|
|
4.32
|
%
|
|
520,863
|
|
5,564
|
|
4.27
|
%
|
Home equity lines of
credit
|
131,970
|
|
1,701
|
|
5.17
|
%
|
|
108,620
|
|
1,271
|
|
4.75
|
%
|
|
111,185
|
|
1,233
|
|
4.45
|
%
|
Consumer,
indirect
|
359,941
|
|
3,498
|
|
3.90
|
%
|
|
343,128
|
|
3,130
|
|
3.70
|
%
|
|
293,917
|
|
2,570
|
|
3.51
|
%
|
Consumer,
direct
|
72,820
|
|
1,230
|
|
6.77
|
%
|
|
68,422
|
|
1,162
|
|
6.89
|
%
|
|
69,329
|
|
1,229
|
|
7.11
|
%
|
Total
loans
|
2,627,777
|
|
31,266
|
|
4.73
|
%
|
|
2,375,340
|
|
26,900
|
|
4.54
|
%
|
|
2,271,710
|
|
25,504
|
|
4.46
|
%
|
Allowance for loan
losses
|
(19,071)
|
|
|
|
|
(18,683)
|
|
|
|
|
(18,554)
|
|
|
|
Net loans
|
2,608,706
|
|
|
|
|
2,356,657
|
|
|
|
|
2,253,156
|
|
|
|
Total earning
assets
|
3,510,009
|
|
37,992
|
|
4.31
|
%
|
|
3,240,741
|
|
33,453
|
|
4.14
|
%
|
|
3,144,929
|
|
31,704
|
|
4.01
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible
assets
|
161,600
|
|
|
|
|
144,190
|
|
|
|
|
145,052
|
|
|
|
Other
assets
|
226,348
|
|
|
|
|
212,112
|
|
|
|
|
199,720
|
|
|
|
Total
assets
|
$
|
3,897,957
|
|
|
|
|
$
|
3,597,043
|
|
|
|
|
$
|
3,489,701
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
|
|
|
|
|
Savings
accounts
|
$
|
477,167
|
|
$
|
69
|
|
0.06
|
%
|
|
$
|
452,882
|
|
$
|
64
|
|
0.06
|
%
|
|
$
|
444,824
|
|
$
|
61
|
|
0.06
|
%
|
Governmental deposit
accounts
|
312,999
|
|
273
|
|
0.35
|
%
|
|
291,454
|
|
217
|
|
0.30
|
%
|
|
301,448
|
|
168
|
|
0.22
|
%
|
Interest-bearing
demand accounts
|
581,600
|
|
202
|
|
0.14
|
%
|
|
567,252
|
|
221
|
|
0.16
|
%
|
|
295,080
|
|
98
|
|
0.13
|
%
|
Money market deposit
accounts
|
393,580
|
|
323
|
|
0.33
|
%
|
|
367,945
|
|
226
|
|
0.25
|
%
|
|
393,807
|
|
197
|
|
0.20
|
%
|
Retail certificates
of deposit
|
395,304
|
|
1,242
|
|
1.26
|
%
|
|
338,226
|
|
765
|
|
0.92
|
%
|
|
355,256
|
|
746
|
|
0.84
|
%
|
Brokered certificates
of deposit
|
187,387
|
|
992
|
|
2.13
|
%
|
|
156,645
|
|
720
|
|
1.86
|
%
|
|
110,160
|
|
459
|
|
1.67
|
%
|
Total
interest-bearing deposits
|
2,348,037
|
|
3,101
|
|
0.53
|
%
|
|
2,174,404
|
|
2,213
|
|
0.41
|
%
|
|
1,900,575
|
|
1,729
|
|
0.36
|
%
|
Short-term
borrowings
|
310,823
|
|
1,175
|
|
1.52
|
%
|
|
246,481
|
|
968
|
|
1.59
|
%
|
|
159,505
|
|
233
|
|
0.58
|
%
|
Long-term
borrowings
|
122,053
|
|
685
|
|
2.25
|
%
|
|
126,101
|
|
686
|
|
2.20
|
%
|
|
178,131
|
|
1,156
|
|
2.60
|
%
|
Total borrowed
funds
|
432,876
|
|
1,860
|
|
1.72
|
%
|
|
372,582
|
|
1,654
|
|
1.80
|
%
|
|
337,636
|
|
1,389
|
|
1.65
|
%
|
Total
interest-bearing liabilities
|
2,780,913
|
|
4,961
|
|
0.71
|
%
|
|
2,546,986
|
|
3,867
|
|
0.61
|
%
|
|
2,238,211
|
|
3,118
|
|
0.56
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing
deposits
|
585,800
|
|
|
|
|
553,444
|
|
|
|
|
769,406
|
|
|
|
Other
liabilities
|
41,368
|
|
|
|
|
42,381
|
|
|
|
|
34,685
|
|
|
|
Total
liabilities
|
3,408,081
|
|
|
|
|
3,142,811
|
|
|
|
|
3,042,302
|
|
|
|
Stockholders'
equity
|
489,876
|
|
|
|
|
454,232
|
|
|
|
|
447,399
|
|
|
|
Total liabilities and
equity
|
$
|
3,897,957
|
|
|
|
|
$
|
3,597,043
|
|
|
|
|
$
|
3,489,701
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income/spread (b)
|
|
$
|
33,031
|
|
3.60
|
%
|
|
|
$
|
29,586
|
|
3.53
|
%
|
|
|
$
|
28,586
|
|
3.45
|
%
|
Net interest margin
(b)
|
|
|
3.74
|
%
|
|
|
|
3.66
|
%
|
|
|
|
3.62
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
June 30,
2018
|
|
June 30,
2017
|
|
(Dollars in
thousands)
|
Balance
|
Income/
Expense
|
Yield/
Cost
|
|
Balance
|
Income/
Expense
|
Yield/
Cost
|
|
Assets
|
|
|
|
|
|
|
|
|
Short-term
investments
|
$
|
11,052
|
|
$
|
106
|
|
1.93
|
%
|
|
$
|
9,859
|
|
$
|
41
|
|
0.84
|
%
|
|
Investment securities
(a)(b)
|
881,690
|
|
13,173
|
|
2.99
|
%
|
|
871,103
|
|
12,150
|
|
2.79
|
%
|
|
Loans
(b)(c):
|
|
|
|
|
|
|
|
|
Commercial real
estate, construction
|
118,396
|
|
2,771
|
|
4.66
|
%
|
|
100,755
|
|
2,151
|
|
4.25
|
%
|
|
Commercial real
estate, other
|
803,085
|
|
19,558
|
|
4.84
|
%
|
|
735,182
|
|
17,315
|
|
4.68
|
%
|
|
Commercial and
industrial
|
491,643
|
|
11,787
|
|
4.77
|
%
|
|
433,173
|
|
9,403
|
|
4.32
|
%
|
|
Residential real
estate (d)
|
546,558
|
|
12,058
|
|
4.41
|
%
|
|
526,131
|
|
11,333
|
|
4.31
|
%
|
|
Home equity lines of
credit
|
120,360
|
|
2,972
|
|
4.98
|
%
|
|
111,149
|
|
2,392
|
|
4.34
|
%
|
|
Consumer,
indirect
|
351,581
|
|
6,628
|
|
3.80
|
%
|
|
281,935
|
|
4,802
|
|
3.43
|
%
|
|
Consumer,
other
|
70,633
|
|
2,392
|
|
6.83
|
%
|
|
69,766
|
|
2,447
|
|
7.07
|
%
|
|
Total
loans
|
2,502,256
|
|
58,166
|
|
4.64
|
%
|
|
2,258,091
|
|
49,843
|
|
4.42
|
%
|
|
Allowance for loan
losses
|
(18,878)
|
|
|
|
|
(18,570)
|
|
|
|
|
Net loans
|
2,483,378
|
|
|
|
|
2,239,521
|
|
|
|
|
Total earning
assets
|
3,376,120
|
|
71,445
|
|
4.23
|
%
|
|
3,120,483
|
|
62,034
|
|
3.97
|
%
|
|
|
|
|
|
|
|
|
|
|
Intangible
assets
|
152,943
|
|
|
|
|
145,298
|
|
|
|
|
Other
assets
|
219,268
|
|
|
|
|
202,365
|
|
|
|
|
Total
assets
|
$
|
3,748,331
|
|
|
|
|
$
|
3,468,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
|
|
Savings
accounts
|
$
|
465,091
|
|
$
|
133
|
|
0.06
|
%
|
|
$
|
442,030
|
|
$
|
120
|
|
0.05
|
%
|
|
Governmental deposit
accounts
|
302,286
|
|
490
|
|
0.33
|
%
|
|
292,576
|
|
299
|
|
0.21
|
%
|
|
Interest-bearing
demand accounts
|
574,465
|
|
423
|
|
0.15
|
%
|
|
290,807
|
|
176
|
|
0.12
|
%
|
|
Money market deposit
accounts
|
380,834
|
|
549
|
|
0.29
|
%
|
|
396,309
|
|
384
|
|
0.20
|
%
|
|
Retail certificates
of deposit
|
366,923
|
|
2,007
|
|
1.10
|
%
|
|
371,728
|
|
1,473
|
|
0.80
|
%
|
|
Brokered certificates
of deposit
|
172,101
|
|
1,712
|
|
2.01
|
%
|
|
74,967
|
|
764
|
|
2.06
|
%
|
|
Total
interest-bearing deposits
|
2,261,700
|
|
5,314
|
|
0.47
|
%
|
|
1,868,417
|
|
3,216
|
|
0.35
|
%
|
|
Short-term
borrowings
|
278,829
|
|
2,143
|
|
1.55
|
%
|
|
182,274
|
|
484
|
|
0.53
|
%
|
|
Long-term
borrowings
|
124,067
|
|
1,371
|
|
2.22
|
%
|
|
175,108
|
|
2,290
|
|
2.63
|
%
|
|
Total borrowed
funds
|
402,896
|
|
3,514
|
|
1.75
|
%
|
|
357,382
|
|
2,774
|
|
1.56
|
%
|
|
Total
interest-bearing liabilities
|
2,664,596
|
|
8,828
|
|
0.67
|
%
|
|
2,225,799
|
|
5,990
|
|
0.54
|
%
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing
deposits
|
569,711
|
|
|
|
|
763,956
|
|
|
|
|
Other
liabilities
|
41,872
|
|
|
|
|
35,173
|
|
|
|
|
Total
liabilities
|
3,276,179
|
|
|
|
|
3,024,928
|
|
|
|
|
Stockholders'
equity
|
472,152
|
|
|
|
|
443,218
|
|
|
|
|
Total liabilities and
equity
|
$
|
3,748,331
|
|
|
|
|
$
|
3,468,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income/spread (b)
|
|
$
|
62,617
|
|
3.56
|
%
|
|
|
$
|
56,044
|
|
3.43
|
%
|
|
Net interest margin
(b)
|
|
|
3.70
|
%
|
|
|
|
3.58
|
%
|
|
(a)
|
Average balances are
based on carrying value.
|
(b)
|
Interest income and
yields are presented on a fully tax-equivalent basis, using a 21%
federal statutory corporate income tax rate for the 2018 periods,
and a 35% federal statutory corporate income tax rate for the 2017
periods.
|
(c)
|
Average balances
include nonaccrual and impaired loans. Interest income
includes interest earned and received on nonaccrual loans prior to
the loans being placed on nonaccrual status. Loan fees
included in interest income were immaterial for all periods
presented.
|
(d)
|
Loans held for sale
are included in the average loan balance listed. Related
interest income on loans originated for sale prior to the loan
being sold is included in loan interest income.
|
NON-GAAP FINANCIAL
MEASURES (Unaudited)
|
|
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
|
|
Six Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Core Non-interest
Expense:
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
$
|
35,971
|
|
|
$
|
28,221
|
|
|
$
|
26,680
|
|
|
$
|
64,192
|
|
|
$
|
54,011
|
|
Less:
Acquisition-related expenses
|
6,056
|
|
|
149
|
|
|
—
|
|
|
6,205
|
|
|
—
|
|
Core non-interest
expense
|
$
|
29,915
|
|
|
$
|
28,072
|
|
|
$
|
26,680
|
|
|
$
|
57,987
|
|
|
$
|
54,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Efficiency
Ratio:
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
$
|
35,971
|
|
|
$
|
28,221
|
|
|
$
|
26,680
|
|
|
$
|
64,192
|
|
|
$
|
54,011
|
|
Less: Amortization of
intangible assets
|
861
|
|
|
754
|
|
|
871
|
|
|
1,615
|
|
|
1,734
|
|
Adjusted non-interest
expense
|
$
|
35,110
|
|
|
$
|
27,467
|
|
|
$
|
25,809
|
|
|
$
|
62,577
|
|
|
$
|
52,277
|
|
|
|
|
|
|
|
|
|
|
|
Total fee-based
income
|
$
|
13,807
|
|
|
$
|
14,894
|
|
|
$
|
13,590
|
|
|
28,701
|
|
|
26,924
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
|
32,808
|
|
|
$
|
29,359
|
|
|
$
|
28,090
|
|
|
$
|
62,167
|
|
|
$
|
55,035
|
|
Add: Fully
tax-equivalent adjustment (a)
|
223
|
|
|
227
|
|
|
496
|
|
|
450
|
|
|
1,009
|
|
Net interest income
on a fully tax-equivalent basis
|
$
|
33,031
|
|
|
$
|
29,586
|
|
|
$
|
28,586
|
|
|
$
|
62,617
|
|
|
$
|
56,044
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
revenue
|
$
|
46,838
|
|
|
$
|
44,480
|
|
|
$
|
42,176
|
|
|
$
|
91,318
|
|
|
$
|
82,968
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency
ratio
|
74.96
|
%
|
|
61.75
|
%
|
|
61.19
|
%
|
|
68.53
|
%
|
|
63.01
|
%
|
|
|
|
|
|
|
|
|
|
|
Efficiency Ratio
Adjusted for Non-core Items:
|
|
|
|
|
|
|
|
|
Core non-interest
expense
|
$
|
29,915
|
|
|
$
|
28,072
|
|
|
$
|
26,680
|
|
|
$
|
57,987
|
|
|
$
|
54,011
|
|
Less: Amortization of
intangible assets
|
861
|
|
|
754
|
|
|
871
|
|
|
1,615
|
|
|
1,734
|
|
Adjusted core
non-interest expense
|
$
|
29,054
|
|
|
$
|
27,318
|
|
|
$
|
25,809
|
|
|
$
|
56,372
|
|
|
$
|
52,277
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
revenue
|
$
|
46,838
|
|
|
$
|
44,480
|
|
|
$
|
42,176
|
|
|
$
|
91,318
|
|
|
$
|
82,968
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio
adjusted for non-core items
|
62.03
|
%
|
|
61.42
|
%
|
|
61.19
|
%
|
|
61.73
|
%
|
|
63.01
|
%
|
|
|
(a)
|
Based on a 21%
federal statutory corporate income tax rate for the 2018 periods,
and a 35% federal statutory corporate income tax rate for the 2017
periods.
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2018
|
|
2018
|
|
2017
|
|
2017
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Tangible
Equity:
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
$
|
499,339
|
|
|
$
|
456,815
|
|
|
$
|
458,592
|
|
|
$
|
457,386
|
|
|
$
|
451,353
|
|
Less: goodwill and
other intangible assets
|
163,953
|
|
|
143,820
|
|
|
144,576
|
|
|
143,859
|
|
|
144,692
|
|
Tangible
equity
|
$
|
335,386
|
|
|
$
|
312,995
|
|
|
$
|
314,016
|
|
|
$
|
313,527
|
|
|
$
|
306,661
|
|
|
|
|
|
|
|
|
|
|
|
Tangible
Assets:
|
|
|
|
|
|
|
|
|
|
Total
assets
|
$
|
3,972,091
|
|
|
$
|
3,634,929
|
|
|
$
|
3,581,686
|
|
|
$
|
3,552,412
|
|
|
$
|
3,525,126
|
|
Less: goodwill and
other intangible assets
|
163,953
|
|
|
143,820
|
|
|
144,576
|
|
|
143,859
|
|
|
144,692
|
|
Tangible
assets
|
$
|
3,808,138
|
|
|
$
|
3,491,109
|
|
|
$
|
3,437,110
|
|
|
$
|
3,408,553
|
|
|
$
|
3,380,434
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Book
Value per Common Share:
|
|
|
|
|
|
|
|
|
|
Tangible
equity
|
$
|
335,386
|
|
|
$
|
312,995
|
|
|
$
|
314,016
|
|
|
$
|
313,527
|
|
|
$
|
306,661
|
|
Common shares
outstanding
|
19,528,952
|
|
|
18,365,035
|
|
|
18,287,449
|
|
|
18,281,194
|
|
|
18,279,036
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value
per common share
|
$
|
17.17
|
|
|
$
|
17.04
|
|
|
$
|
17.17
|
|
|
$
|
17.15
|
|
|
$
|
16.78
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Equity to
Tangible Assets Ratio:
|
|
|
|
|
Tangible
equity
|
$
|
335,386
|
|
|
$
|
312,995
|
|
|
$
|
314,016
|
|
|
$
|
313,527
|
|
|
$
|
306,661
|
|
Tangible
assets
|
$
|
3,808,138
|
|
|
$
|
3,491,109
|
|
|
$
|
3,437,110
|
|
|
$
|
3,408,553
|
|
|
$
|
3,380,434
|
|
|
|
|
|
|
|
|
|
|
|
Tangible equity to
tangible assets
|
8.81
|
%
|
|
8.97
|
%
|
|
9.14
|
%
|
|
9.20
|
%
|
|
9.07
|
%
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Pre-Provision Net
Revenue:
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
$
|
8,904
|
|
|
$
|
14,124
|
|
|
$
|
14,180
|
|
|
$
|
23,028
|
|
|
$
|
26,841
|
|
Add: provision for
loan losses
|
1,188
|
|
|
1,983
|
|
|
947
|
|
|
3,171
|
|
|
1,571
|
|
Add: loss on debt
extinguishment
|
13
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
Add: net loss on
OREO
|
—
|
|
|
5
|
|
|
24
|
|
|
—
|
|
|
24
|
|
Add: net loss on
investment securities
|
147
|
|
|
—
|
|
|
—
|
|
|
146
|
|
|
—
|
|
Add: net loss on
other assets
|
330
|
|
|
—
|
|
|
—
|
|
|
251
|
|
|
—
|
|
Add: net loss on
other transactions
|
76
|
|
|
—
|
|
|
—
|
|
|
76
|
|
|
—
|
|
Less: net gain on
OREO
|
14
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
Less: net gain on
investment securities
|
—
|
|
|
1
|
|
|
18
|
|
|
—
|
|
|
358
|
|
Less: net gain on
other assets
|
—
|
|
|
79
|
|
|
133
|
|
|
—
|
|
|
130
|
|
Pre-provision net
revenue
|
$
|
10,644
|
|
|
$
|
16,032
|
|
|
$
|
15,000
|
|
|
$
|
26,676
|
|
|
$
|
27,948
|
|
|
|
|
|
|
|
|
|
|
|
Pre-provision net
revenue
|
$
|
10,644
|
|
|
$
|
16,032
|
|
|
$
|
15,000
|
|
|
$
|
26,676
|
|
|
$
|
27,948
|
|
Total average
assets
|
$
|
3,897,957
|
|
|
$
|
3,597,043
|
|
|
$
|
3,489,701
|
|
|
$
|
3,748,331
|
|
|
$
|
3,468,146
|
|
|
|
|
|
|
|
|
|
|
|
Pre-provision net
revenue to total average assets
(annualized)
|
1.10
|
%
|
|
1.81
|
%
|
|
1.72
|
%
|
|
1.44
|
%
|
|
1.63
|
%
|
|
At or For the
Three Months Ended
|
|
For the Six Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Annualized Net
Income Excluding Amortization of Other Intangible
Assets:
|
|
|
|
|
Net income
|
$
|
7,892
|
|
|
$
|
11,741
|
|
|
$
|
9,766
|
|
|
$
|
19,633
|
|
|
$
|
18,575
|
|
Add: amortization of
other intangible assets
|
861
|
|
|
754
|
|
|
871
|
|
|
1,615
|
|
|
1,734
|
|
Less: tax effect (a)
of amortization
of other intangible assets
|
181
|
|
|
158
|
|
|
305
|
|
|
339
|
|
|
607
|
|
Net income
excluding
amortization of other intangible assets
|
$
|
8,572
|
|
|
$
|
12,337
|
|
|
$
|
10,332
|
|
|
$
|
20,909
|
|
|
$
|
19,702
|
|
|
|
|
|
|
|
|
|
|
|
Days in the
period
|
91
|
|
|
90
|
|
|
91
|
|
|
181
|
|
|
181
|
|
Days in the
year
|
365
|
|
|
365
|
|
|
365
|
|
|
365
|
|
|
365
|
|
Annualized net
income
|
$
|
31,655
|
|
|
$
|
47,616
|
|
|
$
|
39,171
|
|
|
$
|
39,591
|
|
|
$
|
37,458
|
|
Annualized net income
excluding
amortization of other intangible assets
|
$
|
34,382
|
|
|
$
|
50,033
|
|
|
$
|
41,442
|
|
|
$
|
42,165
|
|
|
$
|
39,731
|
|
|
|
|
|
|
|
|
|
|
|
Average Tangible
Stockholders' Equity:
|
|
|
|
|
Total average
stockholders' equity
|
$
|
489,876
|
|
|
$
|
454,232
|
|
|
$
|
447,399
|
|
|
$
|
472,152
|
|
|
$
|
443,218
|
|
Less: average
goodwill and other intangible assets
|
161,600
|
|
|
144,190
|
|
|
145,052
|
|
|
152,943
|
|
|
145,298
|
|
Average tangible
stockholders' equity
|
$
|
328,276
|
|
|
$
|
310,042
|
|
|
$
|
302,347
|
|
|
$
|
319,209
|
|
|
$
|
297,920
|
|
|
|
|
|
|
|
|
|
|
|
Return on Average
Stockholders' Equity Ratio:
|
|
|
|
|
|
Annualized net
income
|
$
|
31,655
|
|
|
$
|
47,616
|
|
|
$
|
39,171
|
|
|
$
|
39,591
|
|
|
$
|
37,458
|
|
Average stockholders'
equity
|
$
|
489,876
|
|
|
$
|
454,232
|
|
|
$
|
447,399
|
|
|
$
|
472,152
|
|
|
$
|
443,218
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
stockholders' equity
|
6.46
|
%
|
|
10.48
|
%
|
|
8.76
|
%
|
|
8.39
|
%
|
|
8.45
|
%
|
|
|
|
|
|
|
Return on Average
Tangible Stockholders' Equity Ratio:
|
|
|
|
|
|
Annualized net income
excluding
amortization of other intangible assets
|
$
|
34,382
|
|
|
$
|
50,033
|
|
|
$
|
41,442
|
|
|
$
|
42,165
|
|
|
$
|
39,731
|
|
Average tangible
stockholders' equity
|
$
|
328,276
|
|
|
$
|
310,042
|
|
|
$
|
302,347
|
|
|
$
|
319,209
|
|
|
$
|
297,920
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
tangible stockholders' equity
|
10.47
|
%
|
|
16.14
|
%
|
|
13.71
|
%
|
|
13.21
|
%
|
|
13.34
|
%
|
|
|
(a)
|
Tax effect is
calculated using a 21% federal statutory corporate income tax rate
for the 2018 periods and a 35% federal statutory corporate income
tax rate for the 2017 periods.
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content:http://www.prnewswire.com/news-releases/peoples-bancorp-inc-reports-second-quarter-results-300685482.html
SOURCE Peoples Bancorp Inc.