MARIETTA, Ohio, July 23, 2019 /PRNewswire/ -- Peoples Bancorp
Inc. ("Peoples") (Nasdaq: PEBO) today announced results for the
quarter ended June 30, 2019. Net income totaled
$9.6 million for the second quarter
of 2019, representing earnings per diluted common share of
$0.46. In comparison, earnings
per diluted common share were $0.73
for the first quarter of 2019 and $0.41 for the second quarter of 2018. For
the six months ended June 30, 2019,
earnings per diluted common share were $1.19, compared to $1.04 for the six months ended June 30, 2018. Acquisition-related costs
negatively impacted earnings per diluted common share by
$0.28, $0.01, and $0.25
during the second quarter of 2019, first quarter of 2019, and
second quarter of 2018, respectively, and by $0.29 and $0.27
during the first six months of 2019 and 2018, respectively.
On April 12, 2019, Peoples
completed the previously-announced merger with First Prestonsburg
Bancshares Inc. ("First Prestonsburg"). First Prestonsburg
merged into Peoples, and First Prestonsburg's wholly-owned
subsidiary, First Commonwealth Bank of Prestonsburg Inc. ("First
Commonwealth"), which operated nine full-service bank branches in
eastern and central Kentucky,
merged into Peoples Bank. As of April
12, 2019, First Prestonsburg had $294.1 million in total assets, which included
$130.4 million in total loans, and
$257.2 million in total deposits,
after preliminary fair value adjustments. Consideration of
$43.7 million was paid in the merger,
of which $11.3 million was in the
form of a special cash dividend paid to shareholders of First
Prestonsburg prior to the merger, with the remainder paid in the
form of an aggregate of 1,005,478 Peoples common shares.
"During the second quarter of 2019, we completed our acquisition
of First Prestonsburg and grew net interest income by 6% compared
to the first quarter of 2019," 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. For the first six months of 2019, net interest
margin grew to 3.78%, compared to 3.70% for the same period of
2018. Non-interest income was also a highlight for the first
six months of 2019 as we have grown those sources of income by 9%
over the same 2018 period. Asset quality remains strong, with
annualized net charge-offs at 3 basis points of average total loans
for the quarter. We are committed to maintaining focus on
building strong, reliable results for our shareholders as we
proceed into the second half of 2019."
Statement of Income Highlights:
- Net interest income grew $2.1
million, or 6%, compared to the linked quarter and
$3.2 million, or 10%, compared to the
second quarter of 2018.
-
- Net interest margin was 3.77% for the second quarter of 2019,
compared to 3.80% for the linked quarter and 3.74% for the second
quarter of 2018.
- Peoples recorded a provision for loan losses of
$0.6 million during the second
quarter of 2019, compared to a recovery of loan losses of
$0.3 million during the first quarter
of 2019, and a provision for loan losses of $1.2 million for the second quarter of
2018.
-
- Given the low net charge-offs of $208,000, combined with originated loan balances
remaining stable during the quarter, the provision for loan losses
during each of the current quarter and linked quarter was lower
than historical trends.
- Gross charge-offs were $665,000,
or 0.09% of average total loans, for the second quarter of 2019,
compared to $1.0 million, or 0.15% of
average total loans, for the linked quarter, and $1.0 million, or 0.15% of average total loans,
for the second quarter of 2018.
- Total non-interest income, excluding net gains and
losses, increased $58,000 compared to
the linked quarter, and increased $1.8
million, or 13%, compared to the second quarter of
2018.
-
- Overall increases in non-interest income, particularly deposit
account service charges and commercial loan swap fee income, offset
declines in insurance income ($1.4
million of annual performance-based insurance commissions)
and other non-interest income ($787,000 of income related to the sale of
restricted Class B Visa stock) compared to the linked quarter.
- The growth compared to the second quarter of 2018 was driven by
increases in deposit account service charges of $589,000, or 25%, and electronic banking income
of $482,000, or 17%. Additionally,
commercial swap fee income more than tripled to $516,000 in the current quarter, driven by
customer demand given the rate environment.
- Total non-interest expense increased $7.0 million, or 22%, compared to the linked
quarter and grew $2.9 million, or 8%,
compared to the second quarter of 2018.
-
- The increase in non-interest expense compared to the linked
quarter was primarily driven by acquisition-related expenses, which
totaled $6.8 million for the second
quarter of 2019, compared to $253,000
for the first quarter of 2019.
- Compared to the prior year second quarter, salaries and
employee benefit costs were up, driven by higher medical insurance
costs due to medical claims, annual merit increases, which included
the continued movement towards a $15
per hour minimum wage throughout the company, and employees that
have been added in the last twelve months from acquisitions and for
future growth. Total acquisition-related expenses increased
$714,000 compared to the second
quarter of 2018.
- The efficiency ratio for the second quarter of 2019 was 73.2%
and for the first six months of 2019 was 68.1%. Adjusted to exclude
non-core items, the efficiency ratio was 60.2% for the second
quarter of 2019 and 61.2% for the first six months of 2019.
Balance Sheet Highlights:
- As of June 30, 2019, loan
balances acquired from First Prestonsburg totaled $125.3 million, and deposit balances acquired
from First Prestonsburg totaled $232.2
million.
- Period-end total loan balances increased $96.0 million compared to the end of the linked
quarter.
-
- Originated loan balances remained relatively stable, declining
slightly during the quarter. While loan origination levels were
higher than in prior periods, they were outpaced by large paydowns
during the quarter.
- Compared to June 30, 2018,
period-end total loans grew $147.0
million, or 5%, due to a combination of loans acquired from
First Prestonsburg and originated loan growth.
- Average loan balances grew $96.0
million, or 14% annualized, compared to the linked quarter.
Compared to the second quarter of 2018, average loan balances
increased $202.8 million, or 8%.
- Asset quality metrics remained strong during the
quarter.
-
- Delinquency trends improved as loans considered current
comprised 99.0% of the loan portfolio at June 30, 2019, compared to 98.6% at March 31, 2019, and 98.5% at December 31, 2018, and were down slightly from
99.1% at June 30, 2018.
- Classified loans and criticized loans increased compared to
March 31, 2019, which was driven by
the acquired loans from First Prestonsburg.
- As a percent of total loans and other real estate owned
("OREO"), nonperforming assets were 0.71% at June 30, 2019, compared to 0.67% at March 31, 2019 and 0.67% at June 30, 2018.
- Period-end total deposit balances grew $226.2 million, or 7%, compared to March 31, 2019, and increased $414.4 million, or 14%, compared to June 30, 2018.
-
- The increase in deposits compared to March 31, 2019 was driven by the deposits
acquired from First Prestonsburg, partially offset by a decline in
governmental deposits of $31.9
million, due to seasonality.
- Total demand deposit balances were 37% of total deposits at
June 30, 2019, compared to 38% at
March 31, 2019 and 39% at
June 30, 2018.
Net Interest Income:
Net interest income
was $36.0 million for the second
quarter of 2019, an increase of 6% compared to the linked
quarter. Net interest margin was 3.77% for the second quarter
of 2019, compared to 3.80% for the linked quarter. The slight
decline in interest margin during the quarter was driven by higher
costs for time deposits and governmental deposits, which more than
offset increased loan yields, driven by the First Prestonsburg
acquisition. Compared to the first quarter of 2019, net
interest income was positively impacted by the acquisition of First
Prestonsburg.
Accretion income, net of amortization expense, from acquisitions
was $1.2 million for the second
quarter of 2019 and $722,000 for the
first quarter of 2019, which added 13 basis points and 8 basis
points, respectively, to net interest margin. The growth in
net accretion income compared to the first quarter of 2019 was due
to the First Prestonsburg acquisition, specifically the loan
discount that was accreted during the quarter.
Net interest income for the current quarter increased
$3.2 million, or 10%, over the second
quarter of 2018. Net interest margin increased 3 basis points
compared to 3.74% for the second quarter of 2018. The
increase in net interest income compared to the second quarter of
2018 was driven by higher yields on loans, combined with the impact
of acquired First Prestonsburg loans. These were partially
offset by higher deposit costs due to increased competition for
deposits, combined with additional interest expense related to the
acquired First Prestonsburg deposits. 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 other-than-temporary
impairment ("OTTI"), which added 3 basis points to the net interest
margin. Peoples recorded no similar proceeds during the
current quarter.
Accretion income, net of amortization expense, from acquisitions
was $1.2 million for the second
quarter of 2019 and $523,000 for the
second quarter of 2018, which added 13 basis points and 6 basis
points, respectively, to net interest margin. The increase in
net accretion income compared to the second quarter of 2018 was due
to the First Prestonsburg acquisition.
For the first six months of 2019, net interest income grew 13%
compared to 2018, and net interest margin grew 8 basis points to
3.78%. The increases were driven by higher interest income on loans
due to a combination of loan growth, which was primarily the result
of the First Prestonsburg and ASB Financial Corp. ("ASB")
acquisitions, and higher yields from interest rate increases.
The interest income from higher average loan balances outpaced
interest expense from deposits, which increased due to the recent
acquisitions and increased competition for deposits. The
first six months of 2018 benefited from proceeds of $589,000 received on investment securities that
had been previously written down due to OTTI, which added 3 basis
points to net interest margin.
Accretion income, net of amortization expense, from acquisitions
was $1.9 million for the first six
months of 2019 and $1.1 million for
the first six months of 2018, which added 10 basis points and 6
basis points, respectively, to net interest margin. The
growth in net accretion income compared to the first six months of
2018 was largely due to the First Prestonsburg acquisition.
Provision for (Recovery of) Loan
Losses:
The provision for loan losses was
$626,000 for the second quarter of
2019, compared to recovery of loan losses of $263,000 for the linked quarter and provision for
loan losses of $1,188,000 for the
second quarter of 2018. Net charge-offs for the second
quarter of 2019 were $208,000, or
0.03% of average total loans, compared to net recoveries of
$1,007,000, or 0.15% of average total
loans, for the linked quarter and net charge-offs of $720,000, or 0.11% of average total loans, for
the second quarter of 2018. Net recoveries during the first
quarter of 2019 were driven by a $1.8
million recovery recorded on a previously charged-off
commercial loan. Gross charge-offs were $665,000, or 0.09% of average total loans, for
the second quarter of 2019, compared to $1.0
million, or 0.15% of average total loans, for the first
quarter of 2019, and $1.0 million, or
0.15% of average total loans, for the second quarter of 2018.
For the first six months of 2019, the provision for loan losses
was $363,000, compared to
$3.2 million for the first six months
of 2018. Net recoveries for the first six months of 2019 were
$799,000, compared to net charge-offs
of $2.7 million for the first six
months of 2018. The first six months of 2019 included the
$1.8 million recovery recorded on a
previously charged-off commercial loan. The first six months
of 2018 included a charge-off of $827,000 on an acquired commercial loan
relationship. Gross charge-offs were $1.7 million, or 0.12% of average total loans,
for the first six months of 2019, compared to $3.3 million, or 0.26% of average total loans,
for the first six months of 2018.
Net Gains and Losses:
Net gains and
losses include gains and losses on investment securities, and on
asset disposals and other transactions, which are included in
non-interest income. Net losses during the second quarter of
2019 were $350,000, compared to
$152,000 for the linked quarter, and
$552,000 in the second quarter of
2018. During the second quarter of 2019, losses included
$253,000 of write-offs of fixed
assets acquired from First Prestonsburg. Losses during the
linked quarter included $118,000 of
market value write-downs related to closed offices that were held
for sale. During the second quarter of 2018, losses included
$192,000 related to fixed assets
acquired from ASB and $147,000 in
market value write-downs for buildings that were held for sale.
For the first six months of 2019, net losses were $502,000, compared to $477,000 for the first six months of 2018.
Net losses during the year-to-date period through June 30, 2019 were driven by the write-offs of
fixed assets acquired from First Prestonsburg and market value
write-downs related to closed offices that were held for
sale. In the year-to-date period in 2018, the second quarter
losses on fixed asset disposals, loss on investment securities and
market value write-downs on properties held for sale were partially
offset by net gains on repossessed assets that had been recorded in
the first quarter of 2018.
Total Non-interest Income, Excluding Net Gains and
Losses:
Total non-interest income, excluding net
gains and losses, for the second quarter of 2019 increased
$58,000 compared to the linked
quarter. The first quarter of 2019 included $1.4 million of annual performance-based
insurance commissions, which are primarily received in the first
quarter each year. Additionally, other non-interest income in
the first quarter of 2019 included $787,000 of income related to the sale of
restricted Class B Visa stock. These two items were offset by
increases in a number of categories in the second quarter of
2019. Income from deposit account service charges was up 27%
compared to the linked quarter, due to a combination of the
additional accounts acquired from First Prestonsburg and a new
deposit account fee schedule that was implemented in March
2019. Commercial loan swap fee income was up $370,000, driven by higher customer demand and an
increase in the average size of each transaction, given the current
rate environment. Trust and investment income, and electronic
banking income each increased 9%, while mortgage banking income
increased 27% compared to the linked quarter due to more sales of
residential real estate loans to the secondary market.
Compared to the second quarter of 2018, non-interest income,
excluding net gains and losses, grew $1.8
million, or 13%. All non-interest income categories
increased, with the exception of bank owned life insurance, which
had a slight decrease. Income from deposit account service
charges, which increased 25% compared to the prior year quarter,
benefited from the additional accounts acquired from First
Prestonsburg and the new deposit account fee schedule implemented
in March 2019. Electronic banking income was up 17% primarily
as the result of increased debit card usage, which was positively
impacted by the additional cardholders obtained in the First
Prestonsburg acquisition. Commercial loan swap fee income
increased, driven by an increase in the average size of each
transaction and customer demand as a result of the current rate
environment.
For the first six months of 2019, non-interest income, excluding
net gains and losses, grew $2.5
million, or 9%, compared to the same period in the prior
year. Income from deposit account service charges was up 18%
compared to a year ago primarily due to the ASB and First
Prestonsburg acquisitions, coupled with changes in fee
schedules. Electronic banking increased 12%, as it was
positively impacted by the additional customers and accounts
obtained in the acquisitions. Commercial loan swap fee income
increased, driven by an increase in the average size of each
transaction and customer demand as a result of the current rate
environment. Year-over-year, mortgage banking income
increased 35% due to more sales as the result of the mortgage
operation acquired from ASB. Realized and unrealized gains on
equity investment securities increased $585,000 compared to the first six months of
2018, driven by $787,000 of income
related to the sale of restricted Class B Visa stock during the
first quarter of 2019. These increases were partially offset
by lower Small Business Administration income, which declined
$550,000 compared to the first six
months of 2018 as the result of lower volume.
Total Non-interest Expense:
Total
non-interest expense increased $7.0
million, or 22%, compared to the linked quarter, and grew
$2.9 million, or 8%, compared to the
second quarter of 2018. Core non-interest expense, which
excludes acquisition-related expenses, increased $499,000, or 2%, compared to the linked quarter,
and grew $2.2 million, or 7%,
compared to the second quarter of 2018. For the first six
months of 2019, total non-interest expense increased $6.5 million, or 10%, compared to the first six
months of 2018. Core non-interest expense for the first six
months of 2019 increased $5.7
million, or 10%, compared to the first six months of
2018.
The table below summarizes core non-interest expense by category
of non-interest expense. Core non-interest expense is a
non-US GAAP financial measure derived from amounts reported in
Peoples' consolidated financial statements. This non-US GAAP
financial measure used by Peoples provides information useful to
investors in understanding Peoples' operating performance and
trends, and facilitates comparisons with the performance of
Peoples' peers.
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2019
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Non-interest
expense:
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefit costs
|
20,824
|
|
|
19,202
|
|
|
18,025
|
|
|
40,026
|
|
|
34,015
|
|
Net occupancy and
equipment expense
|
3,132
|
|
|
2,978
|
|
|
2,803
|
|
|
6,110
|
|
|
5,669
|
|
Professional
fees
|
2,344
|
|
|
1,276
|
|
|
3,022
|
|
|
3,620
|
|
|
4,740
|
|
Electronic banking
expense
|
1,693
|
|
|
1,577
|
|
|
1,407
|
|
|
3,270
|
|
|
2,857
|
|
Data processing and
software expense
|
1,567
|
|
|
1,545
|
|
|
1,359
|
|
|
3,112
|
|
|
2,681
|
|
Amortization of other
intangible assets
|
824
|
|
|
694
|
|
|
861
|
|
|
1,518
|
|
|
1,615
|
|
Franchise tax
expense
|
772
|
|
|
705
|
|
|
614
|
|
|
1,477
|
|
|
1,258
|
|
Marketing
expense
|
490
|
|
|
594
|
|
|
656
|
|
|
1,084
|
|
|
981
|
|
FDIC insurance
expense
|
381
|
|
|
371
|
|
|
416
|
|
|
752
|
|
|
782
|
|
Foreclosed real
estate and other loan expenses
|
469
|
|
|
255
|
|
|
338
|
|
|
724
|
|
|
550
|
|
Communication
expense
|
317
|
|
|
278
|
|
|
300
|
|
|
595
|
|
|
644
|
|
Other non-interest
expense
|
6,063
|
|
|
2,385
|
|
|
6,170
|
|
|
8,448
|
|
|
8,400
|
|
Total
non-interest expense
|
38,876
|
|
|
31,860
|
|
|
35,971
|
|
|
70,736
|
|
|
64,192
|
|
Acquisition-related expenses:
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefit costs
|
2,368
|
|
|
3
|
|
|
1,923
|
|
|
2,371
|
|
|
1,923
|
|
Net occupancy and
equipment expense
|
20
|
|
|
17
|
|
|
12
|
|
|
37
|
|
|
14
|
|
Professional
fees
|
562
|
|
|
58
|
|
|
652
|
|
|
620
|
|
|
711
|
|
Data processing and
software expense
|
12
|
|
|
79
|
|
|
25
|
|
|
91
|
|
|
59
|
|
Marketing
expense
|
87
|
|
|
36
|
|
|
55
|
|
|
123
|
|
|
91
|
|
Foreclosed real
estate and other loan expenses
|
—
|
|
|
5
|
|
|
2
|
|
|
5
|
|
|
2
|
|
Communication
expense
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
Other non-interest
expense
|
3,721
|
|
|
54
|
|
|
3,387
|
|
|
3,775
|
|
|
3,405
|
|
Total
acquisition-related expenses
|
6,770
|
|
|
253
|
|
|
6,056
|
|
|
7,023
|
|
|
6,205
|
|
Core non-interest
expense:
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefit costs
|
18,456
|
|
|
19,199
|
|
|
16,102
|
|
|
37,655
|
|
|
32,092
|
|
Net occupancy and
equipment expense
|
3,112
|
|
|
2,961
|
|
|
2,791
|
|
|
6,073
|
|
|
5,655
|
|
Professional
fees
|
1,782
|
|
|
1,218
|
|
|
2,370
|
|
|
3,000
|
|
|
4,029
|
|
Electronic banking
expense
|
1,693
|
|
|
1,577
|
|
|
1,407
|
|
|
3,270
|
|
|
2,857
|
|
Data processing and
software expense
|
1,555
|
|
|
1,466
|
|
|
1,334
|
|
|
3,021
|
|
|
2,622
|
|
Amortization of other
intangible assets
|
824
|
|
|
694
|
|
|
861
|
|
|
1,518
|
|
|
1,615
|
|
Franchise tax
expense
|
772
|
|
|
705
|
|
|
614
|
|
|
1,477
|
|
|
1,258
|
|
Marketing
expense
|
403
|
|
|
558
|
|
|
601
|
|
|
961
|
|
|
890
|
|
FDIC insurance
expense
|
381
|
|
|
371
|
|
|
416
|
|
|
752
|
|
|
782
|
|
Foreclosed real
estate and other loan expenses
|
469
|
|
|
250
|
|
|
336
|
|
|
719
|
|
|
548
|
|
Communication
expense
|
317
|
|
|
277
|
|
|
300
|
|
|
594
|
|
|
644
|
|
Other non-interest
expense
|
2,342
|
|
|
2,331
|
|
|
2,783
|
|
|
4,673
|
|
|
4,995
|
|
Total core
non-interest expense
|
32,106
|
|
|
31,607
|
|
|
29,915
|
|
|
63,713
|
|
|
57,987
|
|
The following three paragraphs discuss changes to core
non-interest expense. Each comparison was affected by added
core expenses in the second quarter of 2019 related to the First
Prestonsburg acquisition.
The increase in core non-interest expense compared to the linked
quarter was driven by increases in professional fees, and
foreclosed real estate and other loan expenses, partially offset by
a decline in salaries and employee benefit costs. The
increase in professional fees was mainly the result of additional
audit and consulting procedures performed during the second quarter
of 2019. Salaries and employee benefit costs declined
compared to the linked quarter as the result of expenses that occur
annually in the first quarter, which included those associated with
annual stock grants, primarily related to employees who were
retirement eligible, and annual contributions to employee health
benefit accounts. The acquisition of First Prestonsburg
mainly impacted the following line items: salaries and employee
benefit costs, net occupancy and equipment expenses, and
amortization of other intangible assets, in the linked quarter
comparison.
Core non-interest expense increased compared to the second
quarter of 2018 primarily due to higher salaries and employee
benefit costs, partially offset by a decline in professional
fees. Base salaries, stock-based compensation, and medical
insurance were the main contributors to the increase in salaries
and employee benefit costs. Base salaries were
primarily impacted by the First Prestonsburg and ASB acquisitions,
and annual merit increases, which included the continued movement
towards a $15 per hour minimum wage
throughout the company. The $15
per hour minimum wage was announced in early 2018 and will be
largely implemented by January 1,
2020. The increase in medical insurance was driven by higher
medical claims. Stock-based compensation increased as a
result of the employees that have been added in the last twelve
months for future growth. Professional fees declined 25%
compared to the second quarter of 2018, primarily due to consulting
procedures performed during the second quarter of 2018.
The increase in core non-interest expense for the first six
months of 2019, compared to the first six months of 2018, was
driven by higher salaries and employee benefit costs, partially
offset by a decline in professional fees. Salaries and
employee benefit costs were up primarily due to higher base
salaries, medical insurance and stock-based compensation.
Base salaries were impacted by the acquisitions, and annual merit
increases, which included the continued movement towards a
$15 per hour minimum wage throughout
the company. The increase in medical insurance was driven by
higher medical claims. Stock-based compensation increased as
a result of the employees that have been added in the last twelve
months for future growth. Professional fees declined 26%
compared to the second quarter of 2018, mostly due to consulting
procedures performed during the first six months of 2018. Net
occupancy and equipment expenses also increased compared to the
first six months of 2018, primarily due to the acquisitions.
Peoples also made investments in technology, which resulted in
increased electronic banking, and data processing and software
expenses.
The efficiency ratio for the second quarter of 2019 was 73.2%,
compared to 62.7% for the linked quarter, and 75.0% for the second
quarter of 2018. The efficiency ratio increased compared to
the linked quarter, driven by higher acquisition-related expenses.
The efficiency ratio, adjusted for non-core items, was 60.2% for
the second quarter of 2019, compared to 62.2% for the linked
quarter, and 62.0% for the second quarter of 2018. For the
first six months of 2019, the efficiency ratio was 68.1%, compared
to 68.5% for the first six months of 2018. Adjusted for
non-core items, the efficiency ratio for the first six months of
2019 was 61.2%, compared to 61.7% for the same period in the prior
year.
Income Tax Expense:
Income tax expense
was $2.2 million for the second
quarter of 2019, compared to $3.4
million for the linked quarter and $1.0 million for the second quarter of
2018. The decline in income tax expense compared to the
linked quarter was due to lower pre-tax income. The current
quarter included a tax benefit of $59,000 recorded for the vesting of restricted
stock during the current quarter, compared to a tax benefit of
$133,000 in the linked quarter.
The vesting of a majority of stock awards granted by Peoples occurs
annually in the first quarter. The increase in income tax
expense compared to the second quarter of 2018 was primarily due to
higher pre-tax income.
For the first six months of 2019, Peoples recorded income tax
expense of $5.6 million, compared to
$3.4 million for the same period in
the prior year, and the effective tax rate for the first six months
of 2019 was 18.9%, compared to 14.7% for the first six months of
2018. The year-over-year increase in income tax expense was
primarily due to higher pre-tax income. The first six months
of 2019 included a tax benefit of $192,000 recorded for the vesting of restricted
stock during the period. The first six months of 2018
included an $805,000 valuation
allowance release, as well as a tax benefit of $296,000 recorded for the vesting of restricted
stock during the period.
Loans:
Period-end total loan balances at
June 30, 2019 increased $96.0 million compared to March 31, 2019, and $104.8
million compared to December
31, 2018. The increases were primarily due to the
First Prestonsburg acquisition. Originated loan balances
declined $187,000 during the quarter,
and increased $18.4 million compared
to December 31, 2018. Loan
originations during the first half of 2019 were higher than in
recent years for the same period; however, significantly higher
loan paydowns experienced during the first half of 2019 minimized
the impact of the increased production on loan growth for all
comparison periods. Total commercial loan balances increased
$32.3 million compared to
March 31, 2018. Consumer loans
continued to provide additional growth, driven by an increase in
residential real estate loans of $41.8
million, or 28% annualized.
Compared to June 30, 2018, total
loan balances increased $147.0
million, or 5%. Commercial loan balances were up
$60.7 million, or 4%, residential
real estate loans increased $38.0
million, or 6%, and consumer indirect loans were up
$46.1 million, or 12%, in each case
from balances as of June 30,
2018.
As of June 30, 2019, the First
Prestonsburg acquisition added:
- $52.1 million in residential real
estate loans;
- $42.4 million in commercial real
estate loans;
- $7.4 million in consumer, direct
loans;
- $17.7 million in commercial and
industrial loans, and;
- $5.8 million in home equity lines
of credit.
Quarterly average loan balances grew $96.0 million compared to the linked quarter,
driven by the First Prestonsburg acquisition. Commercial loan
balances were up $40.9 million and
residential real estate loans grew $43.7
million.
Quarterly average loan balances increased $202.8 million, or 8%, compared to the second
quarter of 2018, driven by the recent acquisitions, coupled with
the originated loan growth experienced during 2018.
Commercial loan balances increased $95.5
million, or 7%, compared to the second quarter of
2018. Consumer indirect loans provided growth of $53.0 million, or 15%, compared to the year-ago
quarter, and residential real estate loans increased $46.2 million, or 8%.
For the six months ended June 30,
2019, average gross loan balances increased $280.6 million, or 11%, compared to the same
period in the prior year, driven by the recent acquisitions,
coupled with the originated loan growth. Average commercial
and industrial loan balances grew $97.6
million, or 20%, while residential real estate balances grew
$78.7 million, or 14%, and consumer
indirect loans were up $59.9 million,
or 17%, compared to the first six months of 2018.
Asset Quality:
Asset quality was impacted
by the loans acquired from First Prestonsburg; however, overall
asset quality metrics remained strong. Criticized loans,
which are those categorized as special mention, substandard or
doubtful, increased $7.2 million, or
8%, compared to March 31, 2019, and
decreased $23.8 million, or 20%,
compared to June 30, 2018. As a
percent of total loans, criticized loans were 3.42% at June 30, 2019, compared to 3.28% at March 31, 2019 and 4.50% at June 30, 2018. The increase in criticized
loans was largely related to acquired First Prestonsburg
loans. Classified loans, which are those categorized as
substandard or doubtful, increased $15.7
million, or 33%, compared to March
31, 2019, and were up $7.5
million, or 13%, from June 30,
2018. As a percent of total loans, classified loans were
2.23% at June 30, 2019, compared to
1.73% at March 31, 2019 and 2.07% at
June 30, 2018. The increase in
classified loans was largely related to acquired First Prestonsburg
loans, coupled with downgrades of two commercial loan relationships
during the second quarter of 2019.
Nonperforming assets increased $1.9
million, or 11%, compared to March
31, 2019, and were up $2.1
million, or 11%, compared to June
30, 2018. The increase compared to March 31, 2019, was partially due to acquired
loans from First Prestonsburg, which comprised $0.7 million of nonperforming assets at
June 30, 2019, with the remainder due
to smaller relationships that have become past due and are still
accruing. Nonperforming assets as a percent of total loans
and OREO were 0.71% at June 30, 2019,
up from 0.67% at March 31, 2019 and
0.67% at June 30, 2018.
Annualized net charge-offs were 0.03% of average total loans for
the second quarter of 2019. Annualized net recoveries were
0.15% of average total loans for the linked quarter, which
reflected the recognition during the quarter of a $1.8 million recovery on a previously charged-off
commercial loan. Annualized net charge-offs were 0.11% of
average total loans for the second quarter of 2018. For the
first six months of 2019, annualized net recoveries were 0.06% of
average total loans, which reflected the large recovery during the
first quarter of 2019. Annualized net charge-offs were 0.22%
of average total loans for the first six months of 2018, which was
higher due to a charge-off of $827,000 on an acquired commercial loan
relationship.
At June 30, 2019, the allowance
for loan losses increased to $21.4
million, compared to $20.9
million at March 31, 2019 and
$19.3 million at June 30, 2018. The increase in the
allowance for loan losses compared to March
31, 2019 was minimal due to the decline in originated loans
coupled with the lower amount of gross charge-offs. The
increase in the allowance for loan losses compared to June 30, 2018 was driven by loan growth.
The ratio of the allowance for loan losses as a percent of total
loans declined to 0.75% at June 30,
2019, compared to 0.76% at March 31,
2019 and increased from 0.72% at June
30, 2018. The ratio includes all acquired loans, from
both First Prestonsburg and previous acquisitions since 2012, of
$659.1 million and allowance for
acquired loan losses of $533,000. The increase in the ratio
compared to June 30, 2018 was
attributable to a combination of loan growth and an increase in the
reserve on impaired loans of $802,000.
Deposits:
Period-end deposit balances
increased $226.2 million, or 7%,
compared to March 31, 2019, and were
up $414.4 million, or 14% compared to
June 30, 2018, both driven by the
deposits acquired from First Prestonsburg. Compared to
March 31, 2019, the increase from the
acquisition was partially offset by a decline in governmental
deposits of $31.9 million, due to
seasonality. As of June 30,
2019, the acquired First Prestonsburg deposits added:
- $65.3 million of CDs;
- $62.8 million of interest-bearing
demand accounts;
- $55.7 million of savings
accounts;
- $33.4 million of
non-interest-bearing demand accounts, and;
- $15.1 million of money market
accounts.
Average deposit balances during the second quarter of 2019
increased $217.3 million, or 7%,
compared to the linked quarter, and $343.6
million, or 12%, from the second quarter of 2018. For
the first six months of 2019, average deposits increased
$337.9 million, or 12%, compared to
the first six months of 2018. Most of the growth compared to
the prior periods was related to the acquired First Prestonsburg
deposits. Compared to the linked quarter, increases in retail
certificates of deposit of $80.6
million and savings accounts of $50.6
million were partially offset by a decline in brokered
certificates of deposit of $41.5
million. The increase compared to the second quarter
of 2018 was driven by brokered certificates of deposit growth of
$85.3 million and retail certificates
of deposit growth of $82.2
million. The increase compared to the first six months
of 2018 was driven by brokered certificates of deposit growth of
$121.2 million and retail
certificates of deposit growth of $70.6
million.
Total demand deposit accounts comprised 37% of total deposits at
June 30, 2019, compared to 38% at
March 31, 2019 and 39% at
June 30, 2018.
Stockholders' Equity:
At June 30, 2019, the tier 1 risk-based capital
ratio was 14.07%, compared to 14.22% at March 31, 2019, and 13.29% at June 30, 2018. The common equity tier 1
risk-based capital ratio was 13.82% at June
30, 2019, compared to 13.96% at March
31, 2019, and 13.03% at June
30, 2018. The total risk-based capital ratio was
14.81% at June 30, 2019, compared to
14.98% at March 31, 2019, and 13.99%
at June 30, 2018. These capital
ratios were impacted by the First Prestonsburg acquisition, which
created increases in capital and risk-weighted assets. In
addition, net income earned during the second quarter of 2019
exceeded the dividends declared and paid during the quarter by
$2.6 million.
The book value per share grew to $27.98 at June 30,
2019, compared to $27.19 at
March 31, 2019, and $25.57 at June 30,
2018. The tangible book value per share, which excludes
goodwill and other intangible assets, was $18.89 at June 30,
2019, compared to $19.00 at
March 31, 2019, and $17.17 at June 30,
2018. The ratio of total shareholders' equity to total assets
was 13.54% at June 30, 2019, compared
to 13.32% at March 31, 2019 and
12.57% at June 30, 2018. The
tangible equity to tangible assets ratio, which excludes goodwill
and other intangible assets, was 9.56% at June 30, 2019, compared to 9.70% at March 31, 2019, and 8.81% at June 30, 2018. The primary contributor to
the increase in the book value per share at June 30, 2019 compared to both March 31, 2019 and June
30, 2018, was the issuance of common stock associated with
the First Prestonsburg acquisition. While increases in equity
and asset balances were experienced as a result of the First
Prestonsburg 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.
Total shareholders' equity at June 30,
2019 increased $43.9 million,
or 8%, compared to March 31, 2019,
which was mainly caused by the common shares issued for the First
Prestonsburg acquisition, net income of $9.6
million and other comprehensive income of $7.8 million, partially offset by dividends paid
of $7.0 million. Other
comprehensive income was the result of a higher market value
adjustment related to the available-for-sale investment securities
portfolio, which was driven by overall declines in market interest
rates during the quarter.
Peoples Bancorp Inc. is a diversified financial services holding
company with $4.3 billion in total
assets, 89 locations, including 79 full-service bank branches, and
86 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 2019 results of operations on July
23, 2019 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-US 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 ("US GAAP"). Management uses
these "non-US GAAP" financial measures in its analysis of Peoples'
performance and the efficiency of its operations. Management
believes that these non-US 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-US GAAP performance measures that may
be presented by other companies. Below is a listing of the non-US
GAAP financial measures used in this news release:
- Core non-interest expenses are non-US GAAP since they exclude
the impact of acquisition-related expenses and pension 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, excluding net gains and losses. This measure is non-US 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.
- Efficiency ratio adjusted for non-core items 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 non-interest income, excluding net gains and losses.
This measure is non-US GAAP since it excludes the impact of
acquisition-related expenses and pension settlement charges, the
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-US 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 non-interest income, excluding net gains and losses,
minus total non-interest expense. This measure is non-US GAAP since
it excludes the provision for loan losses and all gains and/or
losses included in earnings.
- Return on average assets adjusted for non-core items is
calculated as annualized net income (less the impact of the Tax
Cuts and Jobs Act on the remeasurement of deferred tax assets and
deferred tax liabilities, and the after-tax impact of all gains
and/or losses, acquisition-related expenses, and pension settlement
charges) divided by average assets. This measure is non-US GAAP
since it excludes the impact of the Tax Cuts and Jobs Act on the
remeasurement of deferred tax assets and deferred tax liabilities,
and the after-tax impact of all gains and/or losses,
acquisition-related expenses, and pension settlement charges.
- Return on average tangible stockholders' equity is calculated
as annualized net income (less after-tax impact of amortization of
other intangible assets) divided by tangible stockholders' equity.
This measure is non-US 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-US 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-US 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 business of First
Prestonsburg following the merger, and the expansion of consumer
lending activity;
|
(2)
|
risks and
uncertainties associated with Peoples' entry into new geographic
markets and risks resulting from Peoples' inexperience in these new
geographic markets;
|
(3)
|
Peoples' ability to
integrate future acquisitions, which may be unsuccessful, or may be
more difficult, time-consuming or costly than expected;
|
(4)
|
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,
changes in the manner of providing services, customer acquisition
and retention pressures, and Peoples' ability to attract, develop
and retain qualified professionals;
|
(5)
|
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;
|
(6)
|
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;
|
(7)
|
the effects of easing
restrictions on participants in the financial services
industry;
|
(8)
|
local, regional,
national and international economic conditions (including the
impact of potential or imposed 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;
|
(9)
|
the existence or
exacerbation of general geopolitical instability and
uncertainty;
|
(10)
|
changes in policy and
other regulatory and legal developments, and uncertainty or
speculation pending the enactment of such changes;
|
(11)
|
Peoples may issue
equity securities in connection with future acquisitions, which
could cause ownership and economic dilution to Peoples' current
shareholders;
|
(12)
|
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;
|
(13)
|
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;
|
(14)
|
deterioration in the
credit quality of Peoples' loan portfolio, which may adversely
impact the provision for loan losses;
|
(15)
|
Peoples may have more
credit risk and higher credit losses to the extent loans are
concentrated by location or industry of the borrowers or
collateral;
|
(16)
|
changes in accounting
standards, policies, estimates or procedures, including the new
current expected credit loss rule issued by the Financial
Accounting Standard Board in June 2016, which will require banks to
record, at the time of origination, credit losses expected
throughout the life of the asset portfolio on loans
and held-to-maturity securities, as opposed to the
current practice of recording losses when it is probable that a
loss event has occurred, which may adversely affect Peoples'
reported financial condition or results of operations;
|
(17)
|
Peoples' assumptions
and estimates used in applying critical accounting policies, which
may prove unreliable, inaccurate or not predictive of actual
results;
|
(18)
|
the discontinuation
of the London Inter-Bank Offered Rate and other reference rates may
result in increased expenses and litigation, and adversely impact
the effectiveness of hedging strategies;
|
(19)
|
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;
|
(20)
|
the volatility from
quarter to quarter of mortgage banking income, whether due to
interest rates, demand, the fair value of mortgage loans, or other
factors;
|
(21)
|
Peoples' ability to
receive dividends from its subsidiaries;
|
(22)
|
Peoples' ability to
maintain required capital levels and adequate sources of funding
and liquidity;
|
(23)
|
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;
|
(24)
|
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;
|
(25)
|
Peoples' ability to
secure confidential information and deliver products and services
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;
|
(26)
|
Peoples' ability to
anticipate and respond to technological changes, and 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, which can impact Peoples' ability to respond to
customer needs and meet competitive demands;
|
(27)
|
operational issues
stemming from and/or capital spending necessitated by the potential
need to adapt to industry changes in information technology systems
on which Peoples and its subsidiaries are highly
dependent;
|
(28)
|
changes in consumer
spending, borrowing and saving habits, whether due to tax reform
legislation, changes in retail distribution strategies, consumer
preferences and behavior, changes in business and economic
conditions, legislative or regulatory initiatives, or other
factors, which may be different than anticipated;
|
(29)
|
the adequacy of
Peoples' internal controls and risk management program in the event
of changes in strategic, reputational, market, economic,
operational, cyber security, compliance, legal, asset/liability
repricing, liquidity, credit and interest rate risks associated
with Peoples' business;
|
(30)
|
the impact on
Peoples' businesses, personnel, facilities, or systems, related to
fraud, theft, or violence;
|
(31)
|
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;
|
(32)
|
Peoples' continued
ability to grow deposits; and
|
(33)
|
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, 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 US GAAP, Peoples is required to evaluate the
impact of subsequent events through the issuance date of its
June 30, 2019 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,
|
|
2019
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
PER COMMON
SHARE:
|
|
|
|
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.47
|
|
|
$
|
0.74
|
|
|
$
|
0.41
|
|
|
$
|
1.20
|
|
|
$
|
1.05
|
|
Diluted
|
0.46
|
|
|
0.73
|
|
|
0.41
|
|
|
1.19
|
|
|
1.04
|
|
Cash dividends
declared per common share
|
0.34
|
|
|
0.30
|
|
|
0.28
|
|
|
0.64
|
|
|
0.54
|
|
Book value per common
share
|
27.98
|
|
|
27.19
|
|
|
25.57
|
|
|
27.98
|
|
|
25.57
|
|
Tangible book value
per common share (a)
|
18.89
|
|
|
19.00
|
|
|
17.17
|
|
|
18.89
|
|
|
17.17
|
|
Closing stock price
at end of period
|
$
|
32.26
|
|
|
$
|
30.97
|
|
|
$
|
37.78
|
|
|
$
|
32.26
|
|
|
$
|
37.78
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED
RATIOS:
|
|
|
|
|
|
|
|
|
|
Return on average
stockholders' equity (b)
|
6.81
|
%
|
|
11.12
|
%
|
|
6.46
|
%
|
|
8.87
|
%
|
|
8.39
|
%
|
Return on average
tangible equity (b)(c)
|
10.82
|
%
|
|
16.69
|
%
|
|
10.47
|
%
|
|
13.67
|
%
|
|
13.21
|
%
|
Return on average
assets (b)
|
0.91
|
%
|
|
1.46
|
%
|
|
0.81
|
%
|
|
1.17
|
%
|
|
1.06
|
%
|
Return on average
assets adjusted for non-core items
(b)(d)
|
1.44
|
%
|
|
1.49
|
%
|
|
1.35
|
%
|
|
1.47
|
%
|
|
1.34
|
%
|
Efficiency ratio
(e)
|
73.24
|
%
|
|
62.71
|
%
|
|
74.96
|
%
|
|
68.09
|
%
|
|
68.53
|
%
|
Efficiency ratio
adjusted for non-core items (f)
|
60.21
|
%
|
|
62.21
|
%
|
|
62.03
|
%
|
|
61.19
|
%
|
|
61.73
|
%
|
Pre-provision net
revenue to total average assets (b)(g)
|
1.21
|
%
|
|
1.79
|
%
|
|
1.10
|
%
|
|
1.49
|
%
|
|
1.44
|
%
|
Net interest margin
(b)(h)
|
3.77
|
%
|
|
3.80
|
%
|
|
3.74
|
%
|
|
3.78
|
%
|
|
3.70
|
%
|
Dividend payout ratio
(i)
|
73.30
|
%
|
|
40.84
|
%
|
|
69.27
|
%
|
|
53.84
|
%
|
|
52.15
|
%
|
(a)
|
This amount
represents a non-US 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 percentage
represents a non-US 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)
|
Return on average
assets adjusted for non-core items represents a non-US GAAP
financial measure since it excludes the impact of the Tax Cuts and
Jobs Act on the remeasurement of deferred tax assets and deferred
tax liabilities, and the after-tax impact of all gains and/or
losses, acquisition-related expenses, and pension settlement
charges.
|
(e)
|
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 (excluding all gains and losses). This
amount represents a non-US 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.
|
(f)
|
The efficiency ratio
adjusted for non-core items is defined as core non-interest expense
(less amortization of other intangible assets) as a percentage of
fully tax-equivalent net interest income plus total non-interest
income, excluding all gains and losses. This amount represents a
non-US GAAP financial measure since it excludes the impact of all
gains and/or losses, acquisition-related expenses, and pension
settlement charges included in earnings, and uses fully
tax-equivalent net interest income.
|
(g)
|
Pre-provision net
revenue is defined as net interest income plus total non-interest
income (excluding all gains and losses) minus total non-interest
expense. This ratio represents a non-US GAAP financial
measure since it excludes the provision for loan losses and all
gains and/or losses included in earnings. 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.
|
(h)
|
Information presented
on a fully tax-equivalent basis.
|
(i)
|
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)
|
2019
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Total interest
income
|
$
|
43,621
|
|
|
$
|
40,576
|
|
|
$
|
37,769
|
|
|
$
|
84,197
|
|
|
$
|
70,995
|
|
Total interest
expense
|
7,572
|
|
|
6,662
|
|
|
4,961
|
|
|
14,234
|
|
|
8,828
|
|
Net interest
income
|
36,049
|
|
|
33,914
|
|
|
32,808
|
|
|
69,963
|
|
|
62,167
|
|
Provision for
(recovery of) loan losses
|
626
|
|
|
(263)
|
|
|
1,188
|
|
|
363
|
|
|
3,171
|
|
Net interest income
after provision for (recovery of) loan
losses
|
35,423
|
|
|
34,177
|
|
|
31,620
|
|
|
69,600
|
|
|
58,996
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
income:
|
|
|
|
|
|
|
|
|
|
Insurance
income
|
3,486
|
|
|
4,621
|
|
|
3,369
|
|
|
8,107
|
|
|
8,024
|
|
Trust and investment
income
|
3,401
|
|
|
3,112
|
|
|
3,232
|
|
|
6,513
|
|
|
6,300
|
|
Electronic banking
income
|
3,267
|
|
|
2,987
|
|
|
2,785
|
|
|
6,254
|
|
|
5,570
|
|
Deposit account
service charges
|
2,977
|
|
|
2,341
|
|
|
2,388
|
|
|
5,318
|
|
|
4,508
|
|
Mortgage banking
income
|
1,000
|
|
|
788
|
|
|
969
|
|
|
1,788
|
|
|
1,320
|
|
Bank owned life
insurance income
|
490
|
|
|
485
|
|
|
497
|
|
|
975
|
|
|
965
|
|
Commercial loan swap
fees
|
516
|
|
|
146
|
|
|
146
|
|
|
662
|
|
|
262
|
|
Net (loss) gain on
investment securities
|
(57)
|
|
|
30
|
|
|
(147)
|
|
|
(27)
|
|
|
(146)
|
|
Net loss on asset
disposals and other transactions
|
(293)
|
|
|
(182)
|
|
|
(405)
|
|
|
(475)
|
|
|
(331)
|
|
Other non-interest
income
|
502
|
|
|
1,101
|
|
|
421
|
|
|
1,603
|
|
|
1,752
|
|
Total
non-interest income
|
15,289
|
|
|
15,429
|
|
|
13,255
|
|
|
30,718
|
|
|
28,224
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
expense:
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefit costs
|
20,824
|
|
|
19,202
|
|
|
18,025
|
|
|
40,026
|
|
|
34,015
|
|
Net occupancy and
equipment expense
|
3,132
|
|
|
2,978
|
|
|
2,803
|
|
|
6,110
|
|
|
5,669
|
|
Professional
fees
|
2,344
|
|
|
1,276
|
|
|
3,022
|
|
|
3,620
|
|
|
4,740
|
|
Electronic banking
expense
|
1,693
|
|
|
1,577
|
|
|
1,407
|
|
|
3,270
|
|
|
2,857
|
|
Data processing and
software expense
|
1,567
|
|
|
1,545
|
|
|
1,359
|
|
|
3,112
|
|
|
2,681
|
|
Amortization of other
intangible assets
|
824
|
|
|
694
|
|
|
861
|
|
|
1,518
|
|
|
1,615
|
|
Franchise tax
expense
|
772
|
|
|
705
|
|
|
614
|
|
|
1,477
|
|
|
1,258
|
|
Marketing
expense
|
490
|
|
|
594
|
|
|
656
|
|
|
1,084
|
|
|
981
|
|
FDIC insurance
expense
|
381
|
|
|
371
|
|
|
416
|
|
|
752
|
|
|
782
|
|
Foreclosed real
estate and other loan expenses
|
469
|
|
|
255
|
|
|
338
|
|
|
724
|
|
|
550
|
|
Communication
expense
|
317
|
|
|
278
|
|
|
300
|
|
|
595
|
|
|
644
|
|
Other non-interest
expense
|
6,063
|
|
|
2,385
|
|
|
6,170
|
|
|
8,448
|
|
|
8,400
|
|
Total
non-interest expense
|
38,876
|
|
|
31,860
|
|
|
35,971
|
|
|
70,736
|
|
|
64,192
|
|
Income before
income taxes
|
11,836
|
|
|
17,746
|
|
|
8,904
|
|
|
29,582
|
|
|
23,028
|
|
Income tax
expense
|
2,238
|
|
|
3,377
|
|
|
1,012
|
|
|
5,615
|
|
|
3,395
|
|
Net income
|
$
|
9,598
|
|
|
$
|
14,369
|
|
|
$
|
7,892
|
|
|
$
|
23,967
|
|
|
$
|
19,633
|
|
|
|
|
|
|
|
|
|
|
|
PER COMMON SHARE
DATA:
|
|
|
|
|
|
|
|
|
|
Earnings per common
share – basic
|
$
|
0.47
|
|
|
$
|
0.74
|
|
|
$
|
0.41
|
|
|
$
|
1.20
|
|
|
$
|
1.05
|
|
Earnings per common
share – diluted
|
$
|
0.46
|
|
|
$
|
0.73
|
|
|
$
|
0.41
|
|
|
$
|
1.19
|
|
|
$
|
1.04
|
|
Cash dividends
declared per common share
|
$
|
0.34
|
|
|
$
|
0.30
|
|
|
$
|
0.28
|
|
|
$
|
0.64
|
|
|
$
|
0.54
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding – basic
|
20,277,028
|
|
|
19,366,008
|
|
|
19,160,728
|
|
|
19,824,035
|
|
|
18,646,266
|
|
Weighted-average
common shares outstanding – diluted
|
20,442,366
|
|
|
19,508,868
|
|
|
19,293,381
|
|
|
19,972,350
|
|
|
18,773,169
|
|
Actual common shares
outstanding (end of period)
|
20,696,041
|
|
|
19,681,692
|
|
|
19,528,952
|
|
|
20,696,041
|
|
|
19,528,952
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
June
30,
|
|
December
31,
|
|
2019
|
|
2018
|
(Dollars in
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
Assets
|
|
|
|
Cash and cash
equivalents:
|
|
|
|
Cash and due
from banks
|
$
|
56,731
|
|
|
$
|
61,775
|
|
Interest-bearing deposits in other banks
|
36,692
|
|
|
15,837
|
|
Total cash and cash equivalents
|
93,423
|
|
|
77,612
|
|
|
|
|
|
Available-for-sale
investment securities, at fair value (amortized cost of
|
|
|
|
$910,431 at
June 30, 2019 and $804,655 at December 31, 2018)
|
919,364
|
|
|
791,891
|
|
Held-to-maturity
investment securities, at amortized cost (fair value of
|
|
|
|
$35,747 at June
30, 2019 and $36,963 at December 31, 2018)
|
34,839
|
|
|
36,961
|
|
Other investment
securities
|
43,508
|
|
|
42,985
|
|
Total investment securities
|
997,711
|
|
|
871,837
|
|
|
|
|
|
Loans, net of
deferred fees and costs (a)
|
2,833,533
|
|
|
2,728,778
|
|
Allowance for loan
losses
|
(21,357)
|
|
|
(20,195)
|
|
Net loans
|
2,812,176
|
|
|
2,708,583
|
|
|
|
|
|
Loans held for
sale
|
5,928
|
|
|
5,470
|
|
Bank premises and
equipment, net of accumulated depreciation
|
64,451
|
|
|
56,542
|
|
Bank owned life
insurance
|
69,909
|
|
|
68,934
|
|
Goodwill
|
174,567
|
|
|
151,245
|
|
Other intangible
assets
|
13,471
|
|
|
10,840
|
|
Other
assets
|
44,740
|
|
|
40,391
|
|
Total assets
|
$
|
4,276,376
|
|
|
$
|
3,991,454
|
|
|
|
|
|
Liabilities
|
|
|
|
Deposits:
|
|
|
|
Non-interest-bearing
|
$
|
643,058
|
|
|
$
|
607,877
|
|
Interest-bearing
|
2,720,555
|
|
|
2,347,588
|
|
Total deposits
|
3,363,613
|
|
|
2,955,465
|
|
|
|
|
|
Short-term
borrowings
|
186,457
|
|
|
356,198
|
|
Long-term
borrowings
|
85,691
|
|
|
109,644
|
|
Accrued expenses and
other liabilities
|
61,593
|
|
|
50,007
|
|
Total liabilities
|
$
|
3,697,354
|
|
|
$
|
3,471,314
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
Preferred
stock, no par value, 50,000 shares authorized, no shares
issued
at June
30, 2019 and December 31, 2018
|
—
|
|
|
—
|
|
Common stock, no par
value, 24,000,000 shares authorized, 21,142,256 shares
issued
at June 30, 2019 and 20,124,378 shares issued at December 31,
2018,
including shares in treasury
|
418,950
|
|
|
386,814
|
|
Retained
earnings
|
171,410
|
|
|
160,346
|
|
Accumulated other
comprehensive income (loss), net of deferred income
taxes
|
316
|
|
|
(12,933)
|
|
Treasury stock, at
cost, 489,802 shares at June 30, 2019 and 601,289 shares
at December
31, 2018
|
(11,654)
|
|
|
(14,087)
|
|
Total stockholders' equity
|
$
|
579,022
|
|
|
$
|
520,140
|
|
Total liabilities and stockholders' equity
|
$
|
4,276,376
|
|
|
$
|
3,991,454
|
|
|
|
|
|
(a) Also
referred throughout the document as "total loans".
|
SELECTED FINANCIAL
INFORMATION (Unaudited)
|
|
|
June
30,
|
March
31,
|
December
31,
|
September
30,
|
June
30,
|
(Dollars in
thousands)
|
2019
|
2019
|
2018
|
2018
|
2018
|
Loan
Portfolio
|
|
|
|
|
|
Commercial real
estate, construction
|
$
|
109,679
|
|
$
|
124,958
|
|
$
|
136,417
|
|
$
|
116,612
|
|
$
|
122,035
|
|
Commercial real
estate, other
|
842,970
|
|
802,464
|
|
816,911
|
|
822,713
|
|
857,707
|
|
Commercial and
industrial
|
599,966
|
|
592,907
|
|
565,744
|
|
551,779
|
|
512,208
|
|
Residential real
estate
|
647,612
|
|
605,804
|
|
593,797
|
|
607,946
|
|
609,563
|
|
Home equity lines of
credit
|
131,636
|
|
128,915
|
|
133,979
|
|
135,853
|
|
135,890
|
|
Consumer,
indirect
|
419,685
|
|
410,283
|
|
407,303
|
|
396,862
|
|
373,582
|
|
Consumer,
direct
|
81,309
|
|
71,731
|
|
74,044
|
|
75,313
|
|
74,646
|
|
Deposit account
overdrafts
|
676
|
|
518
|
|
583
|
|
649
|
|
860
|
|
Total loans
|
$
|
2,833,533
|
|
$
|
2,737,580
|
|
$
|
2,728,778
|
|
$
|
2,707,727
|
|
$
|
2,686,491
|
|
Total acquired loans
(a)
|
$
|
659,081
|
|
$
|
562,941
|
|
$
|
572,748
|
|
$
|
600,243
|
|
$
|
621,774
|
|
Total originated loans
|
$
|
2,174,452
|
|
$
|
2,174,639
|
|
$
|
2,156,030
|
|
$
|
2,107,484
|
|
$
|
2,064,717
|
|
Deposit
Balances
|
|
|
|
|
|
Non-interest-bearing
deposits (b)
|
$
|
643,058
|
|
$
|
628,464
|
|
$
|
607,877
|
|
$
|
617,447
|
|
$
|
585,861
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
Interest-bearing demand accounts (b)
|
610,464
|
|
572,316
|
|
573,702
|
|
547,172
|
|
570,359
|
|
Retail
certificates of deposit
|
497,221
|
|
404,186
|
|
394,335
|
|
402,309
|
|
406,214
|
|
Money market
deposit accounts
|
428,213
|
|
403,642
|
|
379,878
|
|
391,377
|
|
389,893
|
|
Governmental
deposit accounts
|
331,754
|
|
363,636
|
|
267,319
|
|
344,320
|
|
305,255
|
|
Savings
accounts
|
526,746
|
|
477,824
|
|
468,500
|
|
473,240
|
|
480,615
|
|
Brokered
certificates of deposit
|
326,157
|
|
287,345
|
|
263,854
|
|
265,258
|
|
211,062
|
|
Total interest-bearing deposits
|
$
|
2,720,555
|
|
$
|
2,508,949
|
|
$
|
2,347,588
|
|
$
|
2,423,676
|
|
$
|
2,363,398
|
|
Total deposits
|
$
|
3,363,613
|
|
$
|
3,137,413
|
|
$
|
2,955,465
|
|
$
|
3,041,123
|
|
$
|
2,949,259
|
|
Total demand
deposits
|
$
|
1,253,522
|
|
$
|
1,200,780
|
|
$
|
1,181,579
|
|
$
|
1,164,619
|
|
$
|
1,156,220
|
|
Asset
Quality
|
|
|
|
|
|
Nonperforming assets
(NPAs):
|
|
|
|
|
|
Loans 90+ days
past due and accruing
|
$
|
3,449
|
|
$
|
1,074
|
|
$
|
2,256
|
|
$
|
1,885
|
|
$
|
1,975
|
|
Nonaccrual
loans
|
16,591
|
|
17,089
|
|
17,098
|
|
16,235
|
|
16,069
|
|
Total nonperforming loans (NPLs)
|
20,040
|
|
18,163
|
|
19,354
|
|
18,120
|
|
18,044
|
|
Other real
estate owned (OREO)
|
123
|
|
81
|
|
94
|
|
106
|
|
63
|
|
Total NPAs
|
$
|
20,163
|
|
$
|
18,244
|
|
$
|
19,448
|
|
$
|
18,226
|
|
$
|
18,107
|
|
Criticized loans
(c)
|
$
|
97,016
|
|
$
|
89,812
|
|
$
|
114,188
|
|
$
|
118,703
|
|
$
|
120,809
|
|
Classified loans
(d)
|
63,048
|
|
47,327
|
|
43,818
|
|
49,058
|
|
55,596
|
|
Allowance for loan
losses as a percent of NPLs (e)(f)
|
106.57
|
%
|
115.28
|
%
|
104.35
|
%
|
109.71
|
%
|
106.77
|
%
|
NPLs as a percent of
total loans (e)(f)
|
0.71
|
%
|
0.66
|
%
|
0.71
|
%
|
0.67
|
%
|
0.67
|
%
|
NPAs as a percent of
total assets (e)(f)
|
0.47
|
%
|
0.45
|
%
|
0.49
|
%
|
0.46
|
%
|
0.46
|
%
|
NPAs as a percent of
total loans and OREO (e)(f)
|
0.71
|
%
|
0.67
|
%
|
0.71
|
%
|
0.67
|
%
|
0.67
|
%
|
Criticized loans as a
percent of total loans (e)
|
3.42
|
%
|
3.28
|
%
|
4.18
|
%
|
4.38
|
%
|
4.50
|
%
|
Classified loans as a
percent of total loans (e)
|
2.23
|
%
|
1.73
|
%
|
1.61
|
%
|
1.81
|
%
|
2.07
|
%
|
Allowance for loan
losses as a percent of total loans (e)
|
0.75
|
%
|
0.76
|
%
|
0.74
|
%
|
0.73
|
%
|
0.72
|
%
|
Capital
Information (g)
|
|
|
|
|
|
Common equity tier 1
risk-based capital ratio (h)
|
13.82
|
%
|
13.96
|
%
|
13.61
|
%
|
13.29
|
%
|
13.03
|
%
|
Tier 1 risk-based
capital ratio
|
14.07
|
%
|
14.22
|
%
|
13.87
|
%
|
13.55
|
%
|
13.29
|
%
|
Total risk-based
capital ratio (tier 1 and tier 2)
|
14.81
|
%
|
14.98
|
%
|
14.60
|
%
|
14.27
|
%
|
13.99
|
%
|
Leverage
ratio
|
9.99
|
%
|
10.31
|
%
|
9.99
|
%
|
9.69
|
%
|
9.73
|
%
|
Common equity tier 1
capital
|
$
|
399,704
|
|
$
|
389,393
|
|
$
|
378,855
|
|
$
|
367,537
|
|
$
|
358,987
|
|
Tier 1
capital
|
407,072
|
|
396,719
|
|
386,138
|
|
374,776
|
|
366,182
|
|
Total capital (tier 1
and tier 2)
|
428,429
|
|
417,657
|
|
406,333
|
|
394,655
|
|
385,448
|
|
Total risk-weighted
assets
|
$
|
2,892,352
|
|
$
|
2,788,934
|
|
$
|
2,782,995
|
|
$
|
2,764,951
|
|
$
|
2,755,112
|
|
Total shareholders'
equity to total assets
|
13.54
|
%
|
13.32
|
%
|
13.06
|
%
|
12.60
|
%
|
12.57
|
%
|
Tangible equity to
tangible assets (i)
|
9.56
|
%
|
9.70
|
%
|
9.35
|
%
|
8.88
|
%
|
8.81
|
%
|
(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, 2019
data based on preliminary analysis and subject to
revision.
|
(h)
|
Peoples' capital
conservation buffer was 6.81% at June 30, 2019, 6.98% at March
31, 2019, 6.60% at December 31, 2018, 6.27% at September 30, 2018,
and 5.99% at June 30, 2018, compared to 2.50% for the fully
phased-in capital conservation buffer required by January 1,
2019.
|
(i)
|
This ratio represents
a non-US 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
(RECOVERY OF) LOAN LOSSES INFORMATION (Unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2019
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Provision for
(recovery of) loan losses
|
|
|
|
|
|
|
|
|
|
Provision for
(recovery of) loan losses
|
$
|
475
|
|
|
$
|
(360)
|
|
|
$
|
1,000
|
|
|
$
|
115
|
|
|
$
|
2,842
|
|
Provision for
checking account overdrafts
|
151
|
|
|
97
|
|
|
188
|
|
|
248
|
|
|
329
|
|
Total
provision for (recovery of) loan losses
|
$
|
626
|
|
|
$
|
(263)
|
|
|
$
|
1,188
|
|
|
$
|
363
|
|
|
$
|
3,171
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs
(recoveries)
|
|
|
|
|
|
|
|
|
|
Gross
charge-offs
|
$
|
665
|
|
|
$
|
1,003
|
|
|
$
|
990
|
|
|
$
|
1,668
|
|
|
$
|
3,289
|
|
Recoveries
|
457
|
|
|
2,010
|
|
|
270
|
|
|
2,467
|
|
|
591
|
|
Net
charge-offs (recoveries)
|
$
|
208
|
|
|
$
|
(1,007)
|
|
|
$
|
720
|
|
|
$
|
(799)
|
|
|
$
|
2,698
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs
(recoveries) by type
|
|
|
|
|
|
|
|
|
|
Commercial real
estate, other
|
$
|
41
|
|
|
$
|
103
|
|
|
$
|
(21)
|
|
|
$
|
144
|
|
|
$
|
806
|
|
Commercial and
industrial
|
(228)
|
|
|
(1,721)
|
|
|
7
|
|
|
(1,949)
|
|
|
38
|
|
Residential real
estate
|
(35)
|
|
|
78
|
|
|
41
|
|
|
43
|
|
|
160
|
|
Home equity lines of
credit
|
(1)
|
|
|
8
|
|
|
18
|
|
|
7
|
|
|
48
|
|
Consumer,
indirect
|
299
|
|
|
358
|
|
|
412
|
|
|
657
|
|
|
1,207
|
|
Consumer,
direct
|
6
|
|
|
50
|
|
|
94
|
|
|
56
|
|
|
135
|
|
Deposit account
overdrafts
|
126
|
|
|
117
|
|
|
169
|
|
|
243
|
|
|
304
|
|
Total net
charge-offs (recoveries)
|
$
|
208
|
|
|
$
|
(1,007)
|
|
|
$
|
720
|
|
|
$
|
(799)
|
|
|
$
|
2,698
|
|
|
|
|
|
|
|
|
|
|
|
As a percent of
average total loans (annualized)
|
0.03
|
%
|
|
(0.15)
|
%
|
|
0.11
|
%
|
|
(0.06)
|
%
|
|
0.22
|
%
|
SUPPLEMENTAL
INFORMATION (Unaudited)
|
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2019
|
|
2019
|
|
2018
|
|
2018
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
Trust assets under
administration and
management
|
$
|
1,501,110
|
|
|
$
|
1,471,422
|
|
|
$
|
1,384,113
|
|
|
$
|
1,489,810
|
|
|
$
|
1,454,009
|
|
Brokerage assets
under administration and
management
|
887,745
|
|
|
863,286
|
|
|
849,188
|
|
|
914,172
|
|
|
881,839
|
|
Mortgage loans
serviced for others
|
473,443
|
|
|
464,575
|
|
|
461,256
|
|
|
458,999
|
|
|
451,391
|
|
Employees (full-time
equivalent) (a)
|
918
|
|
|
859
|
|
|
871
|
|
|
849
|
|
|
862
|
|
|
(a) The
increase in employees between March 31, 2019 and June 30, 2019 was
due to the First Prestonsburg acquisition, which added 60 full-time
equivalent employees.
|
CONSOLIDATED
AVERAGE BALANCE SHEETS AND NET INTEREST INCOME
(Unaudited)
|
|
|
Three Months
Ended
|
|
June 30,
2019
|
|
March 31,
2019
|
|
June 30,
2018
|
(Dollars in
thousands)
|
Balance
|
Income/
Expense
|
Yield/
Cost
|
|
Balance
|
Income/
Expense
|
Yield/
Cost
|
|
Balance
|
Income/
Expense
|
Yield/
Cost
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
investments
|
$
|
27,979
|
|
$
|
263
|
|
3.77
|
%
|
|
$
|
16,247
|
|
$
|
176
|
|
4.39
|
%
|
|
$
|
10,815
|
|
$
|
56
|
|
2.00
|
%
|
Investment securities
(a)(b)
|
992,668
|
|
6,929
|
|
2.79
|
%
|
|
864,040
|
|
6,527
|
|
3.03
|
%
|
|
890,488
|
|
6,672
|
|
3.00
|
%
|
Loans
(b)(c):
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate, construction
|
124,334
|
|
1,655
|
|
5.27
|
%
|
|
131,683
|
|
1,732
|
|
5.26
|
%
|
|
118,206
|
|
1,438
|
|
4.81
|
%
|
Commercial real
estate, other
|
833,991
|
|
11,322
|
|
5.37
|
%
|
|
806,181
|
|
10,596
|
|
5.26
|
%
|
|
840,677
|
|
10,434
|
|
4.91
|
%
|
Commercial and
industrial
|
599,432
|
|
8,081
|
|
5.33
|
%
|
|
578,954
|
|
7,681
|
|
5.31
|
%
|
|
503,364
|
|
6,216
|
|
4.89
|
%
|
Residential real
estate (d)
|
646,978
|
|
7,918
|
|
4.90
|
%
|
|
603,253
|
|
6,927
|
|
4.59
|
%
|
|
600,799
|
|
6,749
|
|
4.49
|
%
|
Home equity lines of
credit
|
132,395
|
|
2,006
|
|
6.08
|
%
|
|
131,089
|
|
1,860
|
|
5.75
|
%
|
|
131,970
|
|
1,701
|
|
5.17
|
%
|
Consumer,
indirect
|
412,986
|
|
4,255
|
|
4.13
|
%
|
|
409,975
|
|
4,088
|
|
4.04
|
%
|
|
359,941
|
|
3,498
|
|
3.90
|
%
|
Consumer,
direct
|
80,442
|
|
1,459
|
|
7.27
|
%
|
|
73,457
|
|
1,189
|
|
6.56
|
%
|
|
72,820
|
|
1,230
|
|
6.77
|
%
|
Total
loans
|
2,830,558
|
|
36,696
|
|
5.20
|
%
|
|
2,734,592
|
|
34,073
|
|
5.00
|
%
|
|
2,627,777
|
|
31,266
|
|
4.73
|
%
|
Allowance for loan
losses
|
(21,311)
|
|
|
|
|
(20,406)
|
|
|
|
|
(19,071)
|
|
|
|
Net loans
|
2,809,247
|
|
|
|
|
2,714,186
|
|
|
|
|
2,608,706
|
|
|
|
Total earning
assets
|
3,829,894
|
|
43,888
|
|
4.56
|
%
|
|
3,594,473
|
|
40,776
|
|
4.55
|
%
|
|
3,510,009
|
|
37,994
|
|
4.31
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible
assets
|
185,081
|
|
|
|
|
161,673
|
|
|
|
|
161,600
|
|
|
|
Other
assets
|
224,804
|
|
|
|
|
229,475
|
|
|
|
|
226,348
|
|
|
|
Total
assets
|
$
|
4,239,779
|
|
|
|
|
$
|
3,985,621
|
|
|
|
|
$
|
3,897,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
|
|
|
|
|
Savings
accounts
|
$
|
523,295
|
|
$
|
110
|
|
0.08
|
%
|
|
$
|
472,656
|
|
$
|
91
|
|
0.08
|
%
|
|
$
|
477,167
|
|
$
|
69
|
|
0.06
|
%
|
Governmental deposit
accounts
|
331,607
|
|
848
|
|
1.03
|
%
|
|
297,537
|
|
557
|
|
0.76
|
%
|
|
312,999
|
|
273
|
|
0.35
|
%
|
Interest-bearing
demand accounts
|
603,494
|
|
231
|
|
0.15
|
%
|
|
569,472
|
|
247
|
|
0.18
|
%
|
|
581,600
|
|
202
|
|
0.14
|
%
|
Money market
accounts
|
414,307
|
|
654
|
|
0.63
|
%
|
|
395,324
|
|
531
|
|
0.54
|
%
|
|
393,580
|
|
323
|
|
0.33
|
%
|
Retail certificates
of deposit
|
477,530
|
|
2,079
|
|
1.75
|
%
|
|
396,977
|
|
1,417
|
|
1.45
|
%
|
|
395,304
|
|
1,242
|
|
1.26
|
%
|
Brokered certificates
of deposit
|
272,693
|
|
1,797
|
|
2.64
|
%
|
|
314,163
|
|
2,001
|
|
2.58
|
%
|
|
187,387
|
|
992
|
|
2.13
|
%
|
Total
interest-bearing deposits
|
2,622,926
|
|
5,719
|
|
0.87
|
%
|
|
2,446,129
|
|
4,844
|
|
0.80
|
%
|
|
2,348,037
|
|
3,101
|
|
0.53
|
%
|
Short-term
borrowings
|
240,594
|
|
1,233
|
|
2.06
|
%
|
|
244,754
|
|
1,173
|
|
1.94
|
%
|
|
310,823
|
|
1,175
|
|
1.52
|
%
|
Long-term
borrowings
|
103,865
|
|
620
|
|
2.39
|
%
|
|
108,234
|
|
645
|
|
2.41
|
%
|
|
122,053
|
|
685
|
|
2.25
|
%
|
Total borrowed
funds
|
344,459
|
|
1,853
|
|
2.16
|
%
|
|
352,988
|
|
1,818
|
|
2.09
|
%
|
|
432,876
|
|
1,860
|
|
1.72
|
%
|
Total
interest-bearing liabilities
|
2,967,385
|
|
7,572
|
|
1.02
|
%
|
|
2,799,117
|
|
6,662
|
|
0.96
|
%
|
|
2,780,913
|
|
4,961
|
|
0.71
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing
deposits
|
654,468
|
|
|
|
|
613,924
|
|
|
|
|
585,800
|
|
|
|
Other
liabilities
|
52,934
|
|
|
|
|
48,384
|
|
|
|
|
41,368
|
|
|
|
Total
liabilities
|
3,674,787
|
|
|
|
|
3,461,425
|
|
|
|
|
3,408,081
|
|
|
|
Stockholders'
equity
|
564,992
|
|
|
|
|
524,196
|
|
|
|
|
489,876
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
4,239,779
|
|
|
|
|
$
|
3,985,621
|
|
|
|
|
$
|
3,897,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income/spread (b)
|
|
$
|
36,316
|
|
3.54
|
%
|
|
|
$
|
34,114
|
|
3.59
|
%
|
|
|
$
|
33,033
|
|
3.60
|
%
|
Net interest margin
(b)
|
|
|
3.77
|
%
|
|
|
|
3.80
|
%
|
|
|
|
3.74
|
%
|
|
Six Months
Ended
|
|
June 30,
2019
|
|
June 30,
2018
|
(Dollars in
thousands)
|
Balance
|
Income/
Expense
|
Yield/
Cost
|
|
Balance
|
Income/
Expense
|
Yield/
Cost
|
Assets
|
|
|
|
|
|
|
|
Short-term
investments
|
$
|
22,145
|
|
$
|
439
|
|
4.00
|
%
|
|
$
|
11,052
|
|
$
|
106
|
|
1.93
|
%
|
Investment securities
(a)(b)
|
928,707
|
|
13,456
|
|
2.90
|
%
|
|
881,690
|
|
13,173
|
|
2.99
|
%
|
Loans
(b)(c):
|
|
|
|
|
|
|
|
Commercial real
estate, construction
|
127,988
|
|
3,387
|
|
5.26
|
%
|
|
118,396
|
|
2,771
|
|
4.66
|
%
|
Commercial real
estate, other
|
820,163
|
|
21,918
|
|
5.32
|
%
|
|
803,085
|
|
19,558
|
|
4.84
|
%
|
Commercial and
industrial
|
589,249
|
|
15,762
|
|
5.32
|
%
|
|
491,643
|
|
11,787
|
|
4.77
|
%
|
Residential real
estate (d)
|
625,236
|
|
14,845
|
|
4.75
|
%
|
|
546,558
|
|
12,058
|
|
4.41
|
%
|
Home equity lines of
credit
|
131,746
|
|
3,866
|
|
5.92
|
%
|
|
120,360
|
|
2,972
|
|
4.98
|
%
|
Consumer,
indirect
|
411,489
|
|
8,343
|
|
4.09
|
%
|
|
351,581
|
|
6,628
|
|
3.80
|
%
|
Consumer,
other
|
76,969
|
|
2,648
|
|
6.94
|
%
|
|
70,633
|
|
2,392
|
|
6.83
|
%
|
Total
loans
|
2,782,840
|
|
70,769
|
|
5.07
|
%
|
|
2,502,256
|
|
58,166
|
|
4.64
|
%
|
Allowance for loan
losses
|
(20,861)
|
|
|
|
|
(18,878)
|
|
|
|
Net loans
|
2,761,979
|
|
|
|
|
2,483,378
|
|
|
|
Total earning
assets
|
3,712,831
|
|
84,664
|
|
4.55
|
%
|
|
3,376,120
|
|
71,445
|
|
4.23
|
%
|
|
|
|
|
|
|
|
|
Intangible
assets
|
173,442
|
|
|
|
|
152,943
|
|
|
|
Other
assets
|
227,130
|
|
|
|
|
219,268
|
|
|
|
Total
assets
|
$
|
4,113,403
|
|
|
|
|
$
|
3,748,331
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
|
Savings
accounts
|
$
|
498,115
|
|
$
|
201
|
|
0.08
|
%
|
|
$
|
465,091
|
|
$
|
133
|
|
0.06
|
%
|
Governmental deposit
accounts
|
314,666
|
|
1,405
|
|
0.90
|
%
|
|
302,286
|
|
490
|
|
0.33
|
%
|
Interest-bearing
demand accounts
|
586,577
|
|
478
|
|
0.16
|
%
|
|
574,465
|
|
423
|
|
0.15
|
%
|
Money market deposit
accounts
|
404,868
|
|
1,185
|
|
0.59
|
%
|
|
380,834
|
|
549
|
|
0.29
|
%
|
Retail certificates
of deposit
|
437,476
|
|
3,496
|
|
1.61
|
%
|
|
366,923
|
|
2,007
|
|
1.10
|
%
|
Brokered certificates
of deposit
|
293,313
|
|
3,798
|
|
2.61
|
%
|
|
172,101
|
|
1,712
|
|
2.01
|
%
|
Total
interest-bearing deposits
|
2,535,015
|
|
10,563
|
|
0.84
|
%
|
|
2,261,700
|
|
5,314
|
|
0.47
|
%
|
Short-term
borrowings
|
242,663
|
|
2,406
|
|
2.00
|
%
|
|
278,829
|
|
2,143
|
|
1.55
|
%
|
Long-term
borrowings
|
106,037
|
|
1,265
|
|
2.40
|
%
|
|
124,067
|
|
1,371
|
|
2.22
|
%
|
Total borrowed
funds
|
348,700
|
|
3,671
|
|
2.12
|
%
|
|
402,896
|
|
3,514
|
|
1.75
|
%
|
Total
interest-bearing liabilities
|
2,883,715
|
|
14,234
|
|
0.99
|
%
|
|
2,664,596
|
|
8,828
|
|
0.67
|
%
|
|
|
|
|
|
|
|
|
Non-interest-bearing
deposits
|
634,308
|
|
|
|
|
569,711
|
|
|
|
Other
liabilities
|
50,674
|
|
|
|
|
41,872
|
|
|
|
Total
liabilities
|
3,568,697
|
|
|
|
|
3,276,179
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
544,706
|
|
|
|
|
472,152
|
|
|
|
Total liabilities and
equity
|
$
|
4,113,403
|
|
|
|
|
$
|
3,748,331
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income/spread (b)
|
|
$
|
70,430
|
|
3.56
|
%
|
|
|
$
|
62,617
|
|
3.56
|
%
|
Net interest margin
(b)
|
|
|
3.78
|
%
|
|
|
|
3.70
|
%
|
(a)
|
Average balances are
based on carrying value.
|
(b)
|
Interest income and
yields are presented on a fully tax-equivalent basis, using a 21%
statutory federal corporate income tax rate.
|
(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-US GAAP
FINANCIAL MEASURES (Unaudited)
|
The following non-US
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. Peoples also uses the non-US GAAP financial measures
for calculating incentive compensation. The following tables
summarize the non-US 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)
|
2019
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
Core non-interest
expense:
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
$
|
38,876
|
|
|
$
|
31,860
|
|
|
$
|
35,971
|
|
|
$
|
70,736
|
|
|
$
|
64,192
|
|
Less:
acquisition-related expenses
|
6,770
|
|
|
253
|
|
|
6,056
|
|
|
7,023
|
|
|
6,205
|
|
Core non-interest
expense
|
$
|
32,106
|
|
|
$
|
31,607
|
|
|
$
|
29,915
|
|
|
$
|
63,713
|
|
|
$
|
57,987
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2019
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
Efficiency
ratio:
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
$
|
38,876
|
|
|
$
|
31,860
|
|
|
$
|
35,971
|
|
|
$
|
70,736
|
|
|
$
|
64,192
|
|
Less: amortization of
intangible assets
|
824
|
|
|
694
|
|
|
861
|
|
|
1,518
|
|
|
1,615
|
|
Adjusted non-interest
expense
|
$
|
38,052
|
|
|
$
|
31,166
|
|
|
$
|
35,110
|
|
|
$
|
69,218
|
|
|
$
|
62,577
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
income
|
$
|
15,289
|
|
|
$
|
15,429
|
|
|
$
|
13,255
|
|
|
$
|
30,718
|
|
|
$
|
28,224
|
|
Less: net (loss) gain
on investment securities
|
(57)
|
|
|
30
|
|
|
(147)
|
|
|
(27)
|
|
|
(146)
|
|
Less: net loss on
asset disposals and other transactions
|
(293)
|
|
|
(182)
|
|
|
(405)
|
|
|
(475)
|
|
|
(331)
|
|
Total non-interest
income, excluding net gains and losses
|
$
|
15,639
|
|
|
$
|
15,581
|
|
|
$
|
13,807
|
|
|
$
|
31,220
|
|
|
$
|
28,701
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
|
36,049
|
|
|
$
|
33,914
|
|
|
$
|
32,808
|
|
|
$
|
69,963
|
|
|
$
|
62,167
|
|
Add: fully
tax-equivalent adjustment (a)
|
267
|
|
|
200
|
|
|
225
|
|
|
467
|
|
|
450
|
|
Net interest income
on a fully tax-equivalent basis
|
$
|
36,316
|
|
|
$
|
34,114
|
|
|
$
|
33,033
|
|
|
$
|
70,430
|
|
|
$
|
62,617
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
revenue
|
$
|
51,955
|
|
|
$
|
49,695
|
|
|
$
|
46,840
|
|
|
$
|
101,650
|
|
|
$
|
91,318
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency
ratio
|
73.24
|
%
|
|
62.71
|
%
|
|
74.96
|
%
|
|
68.09
|
%
|
|
68.53
|
%
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio
adjusted for non-core items:
|
|
|
|
|
|
|
|
|
Core non-interest
expense
|
$
|
32,106
|
|
|
$
|
31,607
|
|
|
$
|
29,915
|
|
|
$
|
63,713
|
|
|
$
|
57,987
|
|
Less: amortization of
intangible assets
|
824
|
|
|
694
|
|
|
861
|
|
|
1,518
|
|
|
1,615
|
|
Adjusted core
non-interest expense
|
$
|
31,282
|
|
|
$
|
30,913
|
|
|
$
|
29,054
|
|
|
$
|
62,195
|
|
|
$
|
56,372
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
revenue
|
$
|
51,955
|
|
|
$
|
49,695
|
|
|
$
|
46,840
|
|
|
$
|
101,650
|
|
|
$
|
91,318
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio
adjusted for non-core items
|
60.21
|
%
|
|
62.21
|
%
|
|
62.03
|
%
|
|
61.19
|
%
|
|
61.73
|
%
|
|
(a) Tax effect is
calculated using a 21% statutory federal corporate income tax
rate.
|
NON-US GAAP
FINANCIAL MEASURES (Unaudited) -- (Continued)
|
|
(Dollars in
thousands, except per share
data)
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
2019
|
|
2019
|
|
2018
|
|
2018
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
Tangible
equity:
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
$
|
579,022
|
|
|
$
|
535,121
|
|
|
$
|
520,140
|
|
|
$
|
504,290
|
|
|
$
|
499,339
|
|
Less: goodwill and
other intangible assets
|
188,038
|
|
|
161,242
|
|
|
162,085
|
|
|
163,401
|
|
|
163,953
|
|
Tangible
equity
|
$
|
390,984
|
|
|
$
|
373,879
|
|
|
$
|
358,055
|
|
|
$
|
340,889
|
|
|
$
|
335,386
|
|
|
|
|
|
|
|
|
|
|
|
Tangible
assets:
|
|
|
|
|
|
|
|
|
|
Total
assets
|
$
|
4,276,376
|
|
|
$
|
4,017,119
|
|
|
$
|
3,991,454
|
|
|
$
|
4,003,089
|
|
|
$
|
3,972,091
|
|
Less: goodwill and
other intangible assets
|
188,038
|
|
|
161,242
|
|
|
162,085
|
|
|
163,401
|
|
|
163,953
|
|
Tangible
assets
|
$
|
4,088,338
|
|
|
$
|
3,855,877
|
|
|
$
|
3,829,369
|
|
|
$
|
3,839,688
|
|
|
$
|
3,808,138
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book
value per common share:
|
|
|
|
|
|
|
|
|
|
Tangible
equity
|
$
|
390,984
|
|
|
$
|
373,879
|
|
|
$
|
358,055
|
|
|
$
|
340,889
|
|
|
$
|
335,386
|
|
Common shares
outstanding
|
20,696,041
|
|
|
19,681,692
|
|
|
19,565,029
|
|
|
19,550,014
|
|
|
19,528,952
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value
per common share
|
$
|
18.89
|
|
|
$
|
19.00
|
|
|
$
|
18.30
|
|
|
$
|
17.44
|
|
|
$
|
17.17
|
|
|
|
|
|
|
|
|
|
|
|
Tangible equity to
tangible assets ratio:
|
|
|
|
|
Tangible
equity
|
$
|
390,984
|
|
|
$
|
373,879
|
|
|
$
|
358,055
|
|
|
$
|
340,889
|
|
|
$
|
335,386
|
|
Tangible
assets
|
$
|
4,088,338
|
|
|
$
|
3,855,877
|
|
|
$
|
3,829,369
|
|
|
$
|
3,839,688
|
|
|
$
|
3,808,138
|
|
|
|
|
|
|
|
|
|
|
|
Tangible equity to
tangible assets
|
9.56
|
%
|
|
9.70
|
%
|
|
9.35
|
%
|
|
8.88
|
%
|
|
8.81
|
%
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2019
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
Pre-provision net
revenue:
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
$
|
11,836
|
|
|
$
|
17,746
|
|
|
$
|
8,904
|
|
|
$
|
29,582
|
|
|
$
|
23,028
|
|
Add: provision for
loan losses
|
626
|
|
|
—
|
|
|
1,188
|
|
|
363
|
|
|
3,171
|
|
Add: loss on debt
extinguishment
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
Add: net loss on
OREO
|
24
|
|
|
25
|
|
|
—
|
|
|
49
|
|
|
—
|
|
Add: net loss on
investment securities
|
57
|
|
|
—
|
|
|
147
|
|
|
27
|
|
|
146
|
|
Add: net loss on
other assets
|
274
|
|
|
157
|
|
|
330
|
|
|
431
|
|
|
251
|
|
Add: net loss on
other transactions
|
—
|
|
|
—
|
|
|
76
|
|
|
—
|
|
|
76
|
|
Less: recovery of
loan losses
|
—
|
|
|
263
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Less: net gain on
OREO
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
9
|
|
Less: net gain on
investment securities
|
—
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Less: net gain on
other transactions
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
Pre-provision net
revenue
|
$
|
12,812
|
|
|
$
|
17,635
|
|
|
$
|
10,644
|
|
|
$
|
30,447
|
|
|
$
|
26,676
|
|
Total average
assets
|
$
|
4,239,779
|
|
|
$
|
3,985,621
|
|
|
$
|
3,897,957
|
|
|
$
|
4,113,403
|
|
|
$
|
3,748,331
|
|
|
|
|
|
|
|
|
|
|
|
Pre-provision net
revenue to total average assets
(annualized)
|
1.21
|
%
|
|
1.79
|
%
|
|
1.10
|
%
|
|
1.49
|
%
|
|
1.44
|
%
|
NON-US GAAP
FINANCIAL MEASURES (Unaudited) -- (Continued)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2019
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
Annualized net
income adjusted for non-core items:
|
|
|
|
|
Net income
|
$
|
9,598
|
|
|
$
|
14,369
|
|
|
$
|
7,892
|
|
|
$
|
23,967
|
|
|
$
|
19,633
|
|
Add: net loss on
investment securities
|
57
|
|
|
—
|
|
|
147
|
|
|
27
|
|
|
146
|
|
Less: tax effect of
loss on investment securities (a)
|
12
|
|
|
—
|
|
|
31
|
|
|
6
|
|
|
31
|
|
Less: net gain on
investment securities
|
—
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Less: tax effect of
net gain on investment securities(a)
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Add: net loss on
asset disposals and other transactions
|
293
|
|
|
182
|
|
|
405
|
|
|
475
|
|
|
331
|
|
Less: tax effect of
net loss on asset disposals and other
transactions (a)
|
62
|
|
|
38
|
|
|
85
|
|
|
100
|
|
|
70
|
|
Add:
acquisition-related expenses
|
6,770
|
|
|
253
|
|
|
6,056
|
|
|
7,023
|
|
|
6,205
|
|
Less: tax effect of
acquisition-related expenses (a)
|
1,422
|
|
|
53
|
|
|
1,272
|
|
|
1,475
|
|
|
1,303
|
|
Net income adjusted
for non-core items
|
$
|
15,222
|
|
|
$
|
14,677
|
|
|
$
|
13,112
|
|
|
$
|
29,911
|
|
|
$
|
24,911
|
|
|
|
|
|
|
|
|
|
|
|
Days in the
quarter
|
91
|
|
|
90
|
|
|
91
|
|
|
181
|
|
|
181
|
|
Days in the
year
|
365
|
|
|
365
|
|
|
365
|
|
|
365
|
|
|
365
|
|
Annualized net
income
|
$
|
38,497
|
|
|
$
|
58,274
|
|
|
$
|
31,655
|
|
|
$
|
48,331
|
|
|
$
|
39,591
|
|
Annualized net income
adjusted for non-core items
|
$
|
61,055
|
|
|
$
|
59,523
|
|
|
$
|
52,592
|
|
|
$
|
60,318
|
|
|
$
|
50,235
|
|
Return on average
assets:
|
|
|
|
|
|
|
|
|
|
Annualized net
income
|
$
|
38,497
|
|
|
$
|
58,274
|
|
|
$
|
31,655
|
|
|
$
|
48,331
|
|
|
$
|
39,591
|
|
Total average
assets
|
$
|
4,239,779
|
|
|
$
|
3,985,621
|
|
|
$
|
3,897,957
|
|
|
$
|
4,113,403
|
|
|
$
|
3,748,331
|
|
Return on average
assets
|
0.91
|
%
|
|
1.46
|
%
|
|
0.81
|
%
|
|
1.17
|
%
|
|
1.06
|
%
|
Return on average
assets adjusted for non-core items:
|
|
|
|
|
Annualized net income
adjusted for non-core items
|
$
|
61,055
|
|
|
$
|
59,523
|
|
|
$
|
52,592
|
|
|
$
|
60,318
|
|
|
$
|
50,235
|
|
Total average
assets
|
$
|
4,239,779
|
|
|
$
|
3,985,621
|
|
|
$
|
3,897,957
|
|
|
$
|
4,113,403
|
|
|
$
|
3,748,331
|
|
Return on average
assets adjusted for non-core items
|
1.44
|
%
|
|
1.49
|
%
|
|
1.35
|
%
|
|
1.47
|
%
|
|
1.34
|
%
|
|
(a) Tax effect
is calculated using a 21% statutory federal corporate income tax
rate.
|
NON-US GAAP
FINANCIAL MEASURES (Unaudited) -- (Continued)
|
|
|
Three Months
Ended
|
|
At or For the Six
Months
Ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
(Dollars in
thousands)
|
2019
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
Annualized net
income excluding amortization of other intangible
assets:
|
|
|
|
|
Net income
|
$
|
9,598
|
|
|
$
|
14,369
|
|
|
$
|
7,892
|
|
|
$
|
23,967
|
|
|
$
|
19,633
|
|
Add: amortization of
other
intangible assets
|
824
|
|
|
694
|
|
|
861
|
|
|
1,518
|
|
|
1,615
|
|
Less: tax effect of
amortization of
other intangible assets (a)
|
173
|
|
|
146
|
|
|
181
|
|
|
319
|
|
|
339
|
|
Net income
excluding
amortization of other intangible
assets
|
$
|
10,249
|
|
|
$
|
14,917
|
|
|
$
|
8,572
|
|
|
$
|
25,166
|
|
|
$
|
20,909
|
|
|
|
|
|
|
|
|
|
|
|
Days in the
period
|
91
|
|
|
90
|
|
|
91
|
|
|
181
|
|
|
181
|
|
Days in the
year
|
365
|
|
|
365
|
|
|
365
|
|
|
365
|
|
|
365
|
|
Annualized net
income
|
$
|
38,497
|
|
|
$
|
58,274
|
|
|
$
|
31,655
|
|
|
$
|
48,331
|
|
|
$
|
39,591
|
|
Annualized net income
excluding
amortization of other intangible
assets
|
$
|
41,109
|
|
|
$
|
60,497
|
|
|
$
|
34,382
|
|
|
$
|
50,749
|
|
|
$
|
42,165
|
|
|
|
|
|
|
|
|
|
|
|
Average tangible
equity:
|
|
|
|
|
Total average
stockholders' equity
|
$
|
564,992
|
|
|
$
|
524,196
|
|
|
$
|
489,876
|
|
|
$
|
544,706
|
|
|
$
|
472,152
|
|
Less: average
goodwill and other
intangible assets
|
185,081
|
|
|
161,673
|
|
|
161,600
|
|
|
173,442
|
|
|
152,943
|
|
Average tangible
equity
|
$
|
379,911
|
|
|
$
|
362,523
|
|
|
$
|
328,276
|
|
|
$
|
371,264
|
|
|
$
|
319,209
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
stockholders' equity ratio:
|
|
|
|
|
|
Annualized net
income
|
$
|
38,497
|
|
|
$
|
58,274
|
|
|
$
|
31,655
|
|
|
$
|
48,331
|
|
|
$
|
39,591
|
|
Average stockholders'
equity
|
$
|
564,992
|
|
|
$
|
524,196
|
|
|
$
|
489,876
|
|
|
$
|
544,706
|
|
|
$
|
472,152
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
stockholders' equity
|
6.81
|
%
|
|
11.12
|
%
|
|
6.46
|
%
|
|
8.87
|
%
|
|
8.39
|
%
|
|
|
|
|
|
|
Return on average
tangible equity ratio:
|
|
|
|
|
|
Annualized net income
excluding
amortization of other intangible
assets
|
$
|
41,109
|
|
|
$
|
60,497
|
|
|
$
|
34,382
|
|
|
$
|
50,749
|
|
|
$
|
42,165
|
|
Average tangible
equity
|
$
|
379,911
|
|
|
$
|
362,523
|
|
|
$
|
328,276
|
|
|
$
|
371,264
|
|
|
$
|
319,209
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
tangible equity
|
10.82
|
%
|
|
16.69
|
%
|
|
10.47
|
%
|
|
13.67
|
%
|
|
13.21
|
%
|
|
(a) Tax effect
is calculated using a 21% statutory federal corporate income tax
rate.
|
View original
content:http://www.prnewswire.com/news-releases/peoples-bancorp-inc-reports-quarterly-net-income-300889343.html
SOURCE Peoples Bancorp Inc.